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HEALTHIER,
TASTIER
FOOD.
ANNUAL REPORT 2021
CONTENTS
STRATEGIC REPORT
2
Our purpose
Our business today
10
12
14
20
22
24
26
At a glance
Chair’s statement
Chief Executive’s review
Our world
Our business model
Our strategy
Key performance indicators
Review of the year
32
36
40
Food & Beverage Solutions
Primary Products
Innovation and Commercial
Development
Global Operations
Chief Financial Officer’s
introduction
Group financial review
Our people
Equity, diversity and inclusion
Community involvement
Environment, health and safety
Task Force on Climate-related
Financial Disclosures
Risk Report
42
44
46
50
53
54
56
66
68
Board of Directors
Executive Committee
Corporate governance
GOVERNANCE
80
84
86
101 Nominations Committee Report
104 Audit Committee Report
110 Directors’ Remuneration Report
129 Directors’ Report
131
Directors’ statement
of responsibilities
144
FINANCIAL STATEMENTS
134
Independent Auditor’s Report to
the members of Tate & Lyle PLC
142 Consolidated income statement
Consolidated statement of
143
comprehensive income
Consolidated statement of
financial position
Consolidated statement
of cash flows
Consolidated statement
of changes in equity
Notes to the consolidated financial
statements
Parent Company financial
statements
146
145
147
194
USEFUL INFORMATION
202 Group five-year summary
204 Additional information
205
207 Glossary
208 Definitions/explanatory notes
Information for investors
DOWNLOAD THE FULL
ANNUAL REPORT 2021
Download at www.tateandlyle.com
Tate & Lyle is a global
provider of ingredients
and solutions for the
food, beverage and
industrial markets.
STRATEGIC REPORT
EVERY DAY, ACROSS THE WORLD,
MILLIONS OF PEOPLE ENJOY
PRODUCTS CONTAINING
OUR INGREDIENTS.
Our purpose of Improving Lives for Generations
inspires us to work with our customers to
deliver sweetness, mouthfeel, fortification
and stabilisation to food and drink,
making people’s favourite products even better.
IN THIS REPORT
Our purpose is
why we do what
we do...
it helps shape our
strategy and our
priorities...
it guides how
we run our
business...
and creates better
outcomes for all
our stakeholders.
Read more:
Read more:
Read more:
Read more:
Our purpose 2 to 9
Our strategy 24 and 25
Governance 86 to 125
Our business model 22 and 23
TATE & LYLE PLC ANNUAL REPORT 2021
1
OUR PURPOSE
LIVING OUR PURPOSE
OUR
PURPOSE
OUR
WORLD
OUR
BUSINESS
OUR
STRATEGY
OUR
PROGRESS
OUR PURPOSE OF IMPROVING
LIVES FOR GENERATIONS
IS WHY WE DO WHAT WE DO.
IT GUIDES EVERY ACTION WE
TAKE AND EVERY DECISION
WE MAKE.
We’ve been working to improve people’s lives for over 160 years,
growing our business and making a positive impact on society.
Whether it’s by supporting healthy living, building thriving communities
or caring for our planet, we live our purpose every day, in everything
we do.
UNITED NATIONS SUSTAINABLE
DEVELOPMENT GOALS (UN SDGS)
We focus on five of the UN SDGs which most closely
align to our purpose and where we can have most impact.
SDG 2 Zero hunger
SDG 3 Good health and wellbeing
SDG 5 Gender equality
SDG 12 Responsible consumption and production
SDG 13 Climate action
To demonstrate our support for the UN SDGs, we are
a participating member of the UN Global Compact,
a major global sustainability initiative.
OUR PURPOSE
In December 2020, we published our purpose booklet
explaining our purpose and what it means to us.
Download at www.tateandlyle.com/purpose
2
TATE & LYLE PLC ANNUAL REPORT 2021
IMPROVING LIVES FOR GENERATIONSIntroducing our purposeDECEMBER 2020 STRATEGIC REPORT
TATE & LYLE PLC ANNUAL REPORT 2021
3
OUR THREE PURPOSE PILLARS
SUPPORTING
HEALTHY LIVING
Supporting healthy living is at the heart of what we
do and where our purpose has the biggest impact on
the world. Our goal of helping our customers make
healthy food tastier and tasty food healthier drives
the development of new ingredients and solutions
which in turn helps us grow our business.
BUILDING THRIVING
COMMUNITIES
We think about community in its broadest sense.
Our employees are part of the Tate & Lyle community
and we are also part of the communities of other
stakeholders we work with such as our customers,
suppliers and partner organisations. We’re also part
of the local communities where we live and work.
CARING FOR
OUR PLANET
Nearly everything we make begins life in the natural
world, whether it’s a kernel of corn or a leaf of stevia.
This makes it all the more important that we take
care of the planet for its own health and the future
health of our business.
IMPROVING
NUTRITION
ENCOURAGING
BALANCED
LIFESTYLES
PROMOTING
PERSONAL
WELLBEING
PREVENTING
HUNGER
SUPPORTING
EDUCATION
PROGRESSING
EQUITY,
DIVERSITY AND
INCLUSION
CLEANER AIR
USING WASTE
BENEFICIALLY
USING LESS
WATER
SUPPORTING
SUSTAINABLE
AGRICULTURE
SUPPORTING
HEALTHY LIVING
We help people make healthier
and tastier choices when they
eat and drink, and lead more
balanced lifestyles.
MAKING TASTY FOOD HEALTHIER
We removed 1.8 million tonnes of sugar –
equivalent to 7.1 trillion calories – from
people’s diets this year, thanks to our
low-calorie and no-calorie sweeteners
such as sucralose, DOLCIA PRIMA®
Allulose, and TASTEVA® M Stevia
Sweetener, and our fibres such as
PROMITOR® Soluble Fibre and STA-LITE®
Polydextrose.
1.8m
tonnes of sugar removed
from people’s diets
4
STRATEGIC REPORT
Our sugar reduction
initiatives help
address public health
challenges like
diabetes and obesity.
Dr Kavita Karnik
Global Head, Nutrition and Regulatory Affairs
SHARING NUTRITION KNOWLEDGE
In Brazil, we partnered with our customer
Nestlé, and local nutrition education
platform Nutrição em Pauta, to deliver free
online seminars for customers and health
professionals on the many benefits of dietary
fibre. The course, developed and delivered
by leading academics in nutrition, received
great participation and feedback.
6,000
people joined our online
seminars in Brazil on the many
benefits of dietary fibre
TATE & LYLE PLC ANNUAL REPORT 2021
5
BUILDING
THRIVING
COMMUNITIES
We help build thriving communities
where we operate, and support
people to achieve their potential.
CARING FOR OUR COMMUNITIES
In January, in honour of Dr. Martin Luther
King Jr.’s birthday, colleagues from our
Black Employee Network phoned elderly
people living alone or homebound across
Chicago through our partnership with the
charity My Block, My Hood, My City. As well
as having a chat, our support included
food parcels and PPE for those in need
of extra help.
1,600
meals provided to elderly
people living alone or
homebound across Chicago
6
STRATEGIC REPORT
We want everyone in our
communities to have the
opportunity to achieve
their potential.
Jennifer Walker
Director, Global Community Relations
FEEDING OUR NEIGHBOURS
TRANSFORMING YOUNG LIVES
We provided 1.7 million nutritious meals to
people in need in our local communities
this year – 700,000 as part of our annual
donation programme, and 1 million
additional meals to provide relief during
the pandemic. We work closely with 25
food bank partners worldwide, not just
through donations but by packing food
parcels, hosting food drives, and delivering
meals through mobile pantries.
We were excited to join other organisations
in the UK including the National Health
Service to help launch FastFutures, a
learning and skills programme to increase
the employability of young people from
disadvantaged backgrounds. Through
FastFutures, 2,000 people aged 18-22
received mentorship and job-seeking
coaching, and interacted with leaders from
participating organisations, including our
Chief Executive.
1.7m
nutritious meals provided
to people in our local
communities
2,000
people aged 18-22 received
mentorship and coaching
through FastFutures in the UK
TATE & LYLE PLC ANNUAL REPORT 2021
7
CARING
FOR OUR
PLANET
We care for our planet and help
protect its natural resources for
the benefit of future generations.
INVESTING TO ELIMINATE COAL
Since 2008, we’ve reduced greenhouse
gas emissions from our operations by 25%.
We’re now in the middle of a multi-year
investment programme of over
US$150 million to reduce emissions
further, targeting an absolute reduction
of 30% (from 2019) by 2030. Key to this
is eliminating coal from our operations
by 2025. We’re currently replacing coal
boilers in our US plants in Decatur, Illinois
and Lafayette, Indiana.
25%
reduction in greenhouse
gas emissions from our
operations since 2008
8
STRATEGIC REPORT
Working together with
Tate & Lyle, we are
finding environmentally
responsible solutions
for waste.
Brian Furrer
President, Bio Town Ag, Indiana, USA
USING WASTE BENEFICIALLY
Our target is to beneficially use all the
waste we generate by 2030. But some sites
have already got there. In repurposing its
waste products, our citric acid plant in
Santa Rosa, Brazil not only avoids sending
waste to landfill but also supports local
farmers and improves the land. The site’s
processes produce highly nutritious
organic waste. We supply local farmers
with this valuable material, helping them
to reduce their environmental impact.
100%
of the waste generated at our
Santa Rosa plant in Brazil is
beneficially used
TATE & LYLE PLC ANNUAL REPORT 2021
9
AT A GLANCE
INGREDIENTS AND SOLUTIONS FOR
CUSTOMERS ALL OVER THE WORLD
Open any fridge or kitchen cupboard, in any household,
in practically any part of the world, and you’re likely to
find products containing our ingredients and solutions.
TWO GLOBAL BUSINESS DIVISIONS
FOOD & BEVERAGE SOLUTIONS
We use smart science and technology to develop innovative
ingredients and solutions that deliver sweetness, mouthfeel,
fortification and functionality to a wide range of foods and
beverages. Our extensive portfolio includes:
• Sweeteners
• Texturants
• Health and wellness ingredients
• Stabilisers
Read more on pages 32 to 35
PRIMARY PRODUCTS
We provide high-volume products for customers mostly in
the food and beverage, and paper and packaging industries,
primarily in North America. Our portfolio includes:
• Bulk sweeteners
• Industrial starches
• Acidulants
• Animal nutrition
Read more on pages 36 to 39
SUPPORTED BY TWO GLOBAL TEAMS
INNOVATION AND COMMERCIAL DEVELOPMENT
We develop new products through a growing innovation pipeline.
We connect leading-edge science and research with market
insight, local knowledge and a deep understanding of our
customers. We work closely with customers through every stage
of our innovation process to move ideas quickly from concept to
commercial launch.
GLOBAL OPERATIONS
We produce high-quality ingredients from agricultural
raw materials mainly at large-volume corn wet mills, and
also at smaller blending facilities where we make bespoke
solutions for customers. We run our plants and manage the
global supply chain to ensure our ingredients reach our
customers on time and to the right specification.
Read more on pages 40 and 41
Read more on pages 42 and 43
10 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
ROBUST FINANCIAL
PERFORMANCE
Year ended 31 March 2021
GLOBAL REACH
GROUP STATUTORY RESULTS
30
4,400
We have plants, labs,
offices and sales teams
in over 30 countries
We employ around
4,400 employees
worldwide
140
1.5m
We serve customers
in more than 140
countries
We process around
1.5 million acres of
corn each year
Revenue
£2,807m
Profit before tax
£283m
2021
2020
2019
£2,807m
£2,882m
£2,755m
2021
2020
2019
£283m
£296m
£240m
Diluted earnings per share
Net debt1
53.8p
£417m
2021
2020
2019
53.8p
52.1p
38.6p
2021
2020
2019
£417m
£451m
£337m
INGREDIENTS FOR DAILY LIFE
ALTERNATIVE PERFORMANCE MEASURES
Our food and beverage ingredients are primarily
used in beverages, dairy, soups, sauces and
dressings, and bakery. Our industrial ingredients
are used in paper and board, packaging, tapes and
adhesives, building products, detergents and
personal care products.
Adjusted diluted earnings per share2
Return on capital employed2
61.2p
2021
2020
2019
61.2p
57.8p
52.0p
17.2%
2021
2020
2019
17.2%
17.5%
17.1%
Adjusted profit before tax2
Adjusted free cash flow2
£335m
£250m
2021
2020
2019
£335m
£331m
£309m
2021
2020
2019
£250m
£247m
£212m
1 Net debt is not itself defined by IFRS. It comprises line items that are IFRS-defined terms. See Note 27.
2 Adjusted results and a number of other terms and performance measures used in this Annual Report
are not directly defined within accounting standards. For clarity, we have provided descriptions of the
various metrics and their reconciliations to the most directly comparable measures reported in
accordance with IFRS, and the calculations, where relevant, of any ratios in Notes 1 and 4.
TATE & LYLE PLC ANNUAL REPORT 2021
11
CHAIR’S STATEMENT
STRONG RESULTS FROM
EXCEPTIONAL EFFORT
Gerry reports on an exceptional year and
how, through the tremendous efforts of
our people across the world, Tate & Lyle
has kept focused on the longer term, while
dealing with the challenges of the year.
I was writing my statement last year
just as Covid-19 was taking hold across
the world. At the time, I expressed my
confidence in Tate & Lyle’s ability to
prosper whatever the circumstances,
because of the commitment, quality and
decency of our people. That confidence
was fully vindicated as colleagues in our
plants, labs and offices came together in
the most difficult circumstances and in the
most inspiring ways. My Board colleagues
and I are truly grateful, because we know
that the outstanding performance achieved
this year has required exceptional efforts
by all our people to deliver strong financial,
operating and strategic progress but also
in looking after each other, our communities
and our customers.
I would also like to thank our leadership
team who have been exemplary in
providing clear direction while supporting
and encouraging everyone, from the
smallest to the largest of our sites.
Keeping people informed, connected, and
focused on what’s most important, has
been both difficult and essential. In my
view, Nick’s frequent virtual town halls,
smaller café meetings, personal emails
and videos set the standard for caring
and thoughtful communication during an
unprecedented crisis. And I must thank
my Board colleagues for their contribution
too. We have been more engaged with
management than ever this year, and
we got much closer to the wider team
through our own virtual interactions. We
hosted regional virtual cafés open to all
employees and some special sessions on
key topics. For example, Dr Ajai Puri and
Kim Nelson held an inspiring session on
equity, diversity and inclusion, which was
very well received. These conversations
have become much more urgent for us all
as the pandemic has amplified the inequity
in society, and the Board and leadership
team have united in progressing equity,
diversity and inclusion as a critical priority.
OUR PURPOSE – A POWERFUL
MOTIVATOR
Nick and his team said from the start of the
pandemic that we must be guided by our
purpose, with our first imperative being to
keep our people and communities safe and
well. What came through loud and clear
from our virtual conversations was just
how anchoring this purpose message has
been for our people. When everything
outside is confusing and uncertain, our
purpose confirms a set of beliefs and an
enduring direction in all circumstances.
It reminds our people, whether working
in plants with unsettling and difficult
constraints, or working at home on their
screens, that what they are doing is really
important, and not just for today.
TACKLING CLIMATE CHANGE
Covid-19 has shown that humanity is just
a subset of a bigger, complex natural
ecosystem which is inherently fragile.
It has also accelerated the world’s focus
on environmental, social and governance
issues because it has sensitised us to our
own vulnerability and the consequences of
what we do. Tackling the climate change
crisis and protecting our natural resources
for future generations is probably the most
significant long-term challenge facing the
world today. As a business with an integral
role in the food supply chain, we recognise
our responsibility to play our part and
during the year we set new and ambitious
targets for 2030 in areas such as waste,
water, agriculture and greenhouse gas
emissions. Importantly, our Scope 1 and 2
and Scope 3 greenhouse gas emissions
reduction targets were validated by the
Science Based Targets initiative and
align with the goals enshrined in the
Paris Agreement.
INVESTING TO DELIVER OUR STRATEGY
We also expanded our product portfolio
and geographic footprint through two
acquisitions, a stevia (natural sweetener)
business in China and a tapioca-based
texturant business in Thailand, both of
which I was fortunate to have visited before
travel restrictions came into force. These
are important strategic developments in
a number of ways. They diversify our raw
material supply, expand our presence in
the higher growth Asian markets, and
broaden our sweetener and texturant
solutions portfolio for customers globally.
I must congratulate our management team
for completing these acquisitions while
working remotely, without compromising
any aspect of our due diligence. The
strategic progress we have made over the
last few years has enabled the Board, as
we announced in April 2021, to explore the
potential to separate our two businesses,
about which Nick expands in his report on
the following pages. The Board is fully
engaged in this important process and
discussions are ongoing.
12
TATE & LYLE PLC ANNUAL REPORT 2021
This year has shown that, whatever
the world throws at us, our people
will find a way to prosper.
Gerry Murphy
Chair
THANKING DEPARTING BOARD
MEMBERS AND WELCOMING
NEW COLLEAGUES
Two outstanding non-executive directors,
Anne Minto and Dr Ajai Puri, are retiring
from the Board this year as they have
now served for nine years. Anne has
upheld the highest standards of
governance through her stewardship of
the Remuneration Committee, while Ajai’s
continuing education of the Board on
scientific and regulatory developments has
been exemplary. We will miss them both
for their specific expertise and their
contributions to the wider Board agenda.
As we bid farewell to Anne and Ajai, I am
delighted to welcome John Cheung and
Patrícia Corsi to the Board. John is our first
non-executive director to be based in Asia
since I became Chair, and his wealth of
expertise in the food and beverage industry
in the region will be invaluable as we grow
our Asian business. Similarly, Patrícia is
our first Latin American non-executive
director and brings extensive experience
in this important growth market as well as
expertise in global marketing, digital and
brand development.
I am also delighted to welcome Vivid
Sehgal to the Board. Vivid joined us as
Chief Financial Officer Designate in March
before becoming Chief Financial Officer in
April. His extensive financial, commercial
and transactional experience will be of
great benefit to the Board and Tate & Lyle.
Vivid replaces Imran Nawaz who has
accepted a new external CFO role. Imran
steered our finances expertly during his
time with us, particularly during the
pandemic, helping to ensure we finished
the year in a stronger financial position
than we started. On behalf of the Board,
I would like to thank Imran and wish him
well in his future endeavours.
STAYING FOCUSED ON OUR
SHAREHOLDERS, MAINTAINING OUR
PROGRESSIVE DIVIDEND POLICY
Notwithstanding our emphasis on
protecting the interests of our broader
stakeholders during this extraordinary
year, the Board has retained its focus on
our shareholders. We were sorry that, in
accordance with public health restrictions,
we had to hold a closed AGM in 2020. We
very much hope that this year we’ll be able
to meet again the many shareholders who
like to join us in person.
We recognise the importance of dividends
to our shareholders and, despite considerable
uncertainty during the year, we maintained
our interim dividend. Given the robust
performance over the full year the Board
is recommending an increase in the final
dividend of 5.8% to 22.0 pence per share,
bringing the total dividend for the year
ended 31 March 2021 to 30.8 pence, an
increase of 4.1%. This increase brings
dividends to a level consistent with the
Board’s progressive dividend policy,
notwithstanding the pandemic.
IN CONCLUSION
It has been a very demanding year for all
of us, both personally and professionally,
and we still face continuing uncertainties.
But despite everything, our business has
continued to flourish. The agility and
resilience of our people, along with the
commitment, quality and decency I’ve
already mentioned, reassures me that,
whatever the world throws at us,
Tate & Lyle will find a way to prosper.
Gerry Murphy
Chair
STRATEGIC REPORT
CONNECTING WITH
COLLEAGUES
DURING LOCKDOWN
This year, the Board went virtual,
connecting with employees across
the business through regional virtual
cafés open to all. They were very
positively received and, because of
the informal setting, with everyone
in their own homes, in many ways
it actually made engagement
easier because people were more
comfortable asking questions. The
sessions were recorded and shared
over the Company’s intranet for those
who couldn’t join.
TATE & LYLE PLC ANNUAL REPORT 2021
13
CHIEF EXECUTIVE’S REVIEW
PURPOSE-LED
PERFORMANCE
Nick reflects on an unprecedented year in
every sense – from how the world’s been
turned upside down, to how our team has
responded, looking after each other and our
communities, keeping our operations running
and our customers served.
HIGHLIGHTS
Adjusted profit before tax
+6%
in constant currency
Adjusted diluted
earnings per share
+12%
in constant currency
Food & Beverage Solutions
adjusted operating profit
+12%
in constant currency
• Food & Beverage Solutions
delivered strong revenue and
profit growth
• Sucralose saw robust demand
• Primary Products profit higher,
benefiting from record year of
Commodities profits
• Productivity programme supporting
operational efficiency and
investment in growth
• Balance sheet further strengthened
• 2030 sustainability and 2025 equity,
diversity and inclusion targets
on track
Despite all these challenges, Primary
Products increased adjusted operating
profit by 5%, helped by a record year of
Commodities profits; and Food & Beverage
Solutions delivered another year of strong
performance with revenue up 6% and
adjusted operating profit 12% higher.
Overall, Group adjusted profit before tax
was up 6%, and adjusted diluted earnings
per share were 12% higher, benefiting
from a lower effective tax rate.
What these results show is the continuing
strength of our strategy, and the importance
of our ‘Sharpen, Accelerate, Simplify’
priorities in supporting performance, as
detailed on page 16. I’d like to highlight two
areas in particular: first, a tremendous
effort from our Global Operations team,
whose focus on efficiency delivered
another US$37 million in productivity
benefits. This means we have delivered
US$124 million towards our target of
achieving productivity benefits of
US$150 million over the six years to March
2024. And second, we continued to make
progress on our strategy. I’m delighted
that we succeeded in completing two
important strategic acquisitions, funded by
the free cash flow generated in the year,
and that New Products grew by an
impressive 21% to £133 million. We also
finished the year in a more robust financial
position and with a stronger balance sheet.
Despite all the challenges of the global
pandemic, in my view, we achieved more
this year than in any of my seven years at
Tate & Lyle.
It’s been a year like no other and the way
our people have responded, and what they
have achieved, has been nothing short of
inspirational. Our results this year show
a strong, agile and resilient business, with
a purpose that permeates across the
organisation and a strategy that is
delivering consistent growth. Given the
huge personal and professional challenges
of the Covid-19 pandemic, with our
office-based colleagues working from
home and smaller crews operating our
plants, I can honestly say I haven’t seen
anything more remarkable in over 30 years
of working in business. I am both humbled
by and proud of what the team has
achieved this year – and more confident
than ever in the future of Tate & Lyle.
ROBUST PERFORMANCE
Being in the food industry, we are an
essential business in the countries we
operate in, and during the pandemic, all
our manufacturing facilities have remained
operational. Demand closely correlated to
the imposition and easing of lockdowns in
our largest markets of North America and
Europe. At the start of the year, in April
and May, with lockdowns in place in both
regions, we saw a significant reduction
in demand for our ingredients used in
products for out-of-home consumption,
partially offset by stronger in-home
consumption. From June onwards,
demand improved as lockdowns eased,
although as we finished the year, out-of-
home demand remained below pre-
pandemic levels. In the higher growth
markets of Asia and Latin America,
demand improved in China from the
second quarter of the financial year as it
emerged from lockdown, while in Latin
America demand slowed as lockdowns
were imposed.
14 TATE & LYLE PLC ANNUAL REPORT 2021
Our purpose has guided us throughout
the year, supporting our commitment
to our communities, customers and
to each other.
Nick Hampton
Chief Executive
felt guided and supported too. At the
start of the pandemic I called every single
plant manager to ask them two questions.
Are people safe, and do you have what you
need? People saw that we meant what we
said – safety was our priority, and that we
would support our people in whatever
way they needed. Throughout the year,
as a leadership team, we made sure we
communicated clearly with our people and
stayed as visible as possible.
One of the ways we kept in touch was
through our virtual cafés. Our IT team did
a great job rolling out MS Teams, a video
meetings tool, across the organisation in
a matter of weeks in March and April,
enabling people to work from home and,
crucially, stay connected with each other.
And that was a big plus for me too this year.
While it’s been tough not being able to get
out to our offices, labs and plants and meet
with colleagues, through our virtual cafés,
in many ways I’ve felt more connected
than ever with our people. This year I did
something I’ve never done before: I got
the opportunity to talk to every single
employee in the Group. And the format of
virtual cafés was more conducive to people
being open and honest with each other at
every level – no doubt helped by the
personal aspect of seeing inside each
other’s homes, meeting families and pets
too. I know I speak for the whole leadership
team in saying that I feel I understand our
people and their challenges far better now
than I did before the pandemic.
PURPOSE: OUR NORTH STAR IN
A TURBULENT YEAR
At the start of the year, we set out four
clear priorities: to look after our
colleagues and communities; strengthen
our relationships with customers; continue
to progress our strategy; and maintain
our financial strength. In determining
these priorities, we were guided by our
purpose of Improving Lives for Generations,
which has been our north star in how to
handle an uncertain and constantly
changing environment.
When the pandemic hit, we said our
decisions must be led by the science and
the data. And with the data being different
in every location, this meant putting the
safety of our people in the hands of those
on the ground – our local leadership –
guided by principles set by our Global
Pandemic Response Team. We trusted our
local leaders to make plans based on the
circumstances at their location, and they
stepped up to the task. During the year
we’ve had only three small outbreaks of
Covid-19 infection at our sites, with just
a handful of people involved, all of whom
recovered well. But safety is about more
than just not catching the virus – it’s about
people’s wellbeing, and that was hugely
challenged by the pressures of lockdown
and people’s individual personal
circumstances.
People’s mental health and wellbeing
has been very high on our agenda all year.
In times of high stress and uncertainty,
people look to their leaders for reassurance
and guidance. So, while we expected our
local leaders to take responsibility in a
practical way to decide what was best for
their own teams, it was essential that they
STRATEGIC REPORT
CREATING OUR OWN
CAFÉ CULTURE
Virtual cafés – time out for an informal
chat – popped up across the business,
to great success. Colleagues found
themselves sitting at a virtual table
with the Chief Executive, and often
other members of the leadership
team too. The cafés became an
important way to connect with people
during lockdown. During the year,
through these cafés, every colleague
in Tate & Lyle had the opportunity to
talk directly to the Chief Executive and
ask him questions.
TATE & LYLE PLC ANNUAL REPORT 2021
15
CHIEF EXECUTIVE’S REVIEW CONTINUED
OUR THREE PRIORITIES SUPPORTING BUSINESS PERFORMANCE
Our financial results continue to reflect the good progress we’re
making in delivering on our strategic priorities: sharpen the focus on
our customers; accelerate portfolio development; and simplify the
business and drive productivity.
SHARPEN
CLOSER TO CUSTOMERS
ACCELERATE
FASTER INNOVATION
SIMPLIFY
PRODUCTIVITY GAINS
Actions
• Becoming the growth partner for our customers
• New ways of working together
• Growing our customer project pipeline
• Becoming the ‘go to’ company for reformulation
and sugar reduction
Examples in the year
• Developed bespoke customer webinars on topics
such as sugar reduction and plant-based ingredients
• Accelerated launch of online customer tutorials, such
as our Sweetener and Fibre Universities
• Launched new Nutrition Centre digital hub,
including clinical research and health data
12%
Increase in value of new business
pipeline during the year
Actions
• Closer and earlier customer collaboration
on key projects
• Bringing new products to market faster
• Expanding our portfolio, including through
partnerships and acquisitions
• Working with start-ups
Examples in the year
• New Product revenue increased by 21%
• 13 New Products launched from innovation
pipeline including clean label and stevia solutions
• Completed acquisitions of stevia and
tapioca businesses
18%
Increase in value of innovation
pipeline during the year
Actions
• Simplifying the organisation
• Investing to improve operational efficiency
• Creating a culture of continuous improvement
• Reducing costs and increasing productivity
Examples in the year
• Benefits from continuous improvement projects
increased by 3%
• Investment in new gas-fired boiler
in Decatur, Illinois, USA
• Simplified organisation of customer-facing teams
US$124m
Total productivity benefits delivered in the first
three years of productivity programme
16
TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
Supporting our local communities
We are an active member of the
communities where we live and work.
Many of these communities suffered real
hardship during the pandemic and so we
did everything we could to support them
in their time of need. We significantly
increased the donations and support we
gave to our food bank partners around the
world, which helped provide 1.7 million
nutritious meals for people in need in our
local communities. We donated PPE to
family members who were frontline
workers, and found new ways to support
our communities, such as taking our
school education and mentoring
programmes online and working on
helplines to support elderly people living
alone during the pandemic.
Keeping connected with our customers
Our focus on serving our customers was a
thread that ran through everything we did
this year. We were inspired by knowing that
we were keeping the all-important food
supply chain going, whether that was
making food and beverage ingredients or,
for our industrial starches, meeting the
increased demand for packaging materials
as people shopped online. I think we
surprised even ourselves with just how
ambitious and agile we could be, and
nowhere was this more evident than the
creative ways we kept connected with our
customers. These included our technical
people using video technology to see inside
our customers’ operations to help optimise
their production. Or our logistics team
finding ways to accommodate rapidly
fluctuating demand for products by
rethinking delivery systems and
schedules. Or holding virtual tasting
sessions for customers with prototypes
being prepared and sent out in advance.
By having an absolute focus on serving
our customers at their time of need, by
introducing new and innovative ways of
working, and by thinking creatively, we
have strengthened our relationships with
our customers this year.
Progressing equity,
diversity and inclusion is
a key priority for us both
within our company and in
our local communities.
Building a more inclusive culture
Our purpose has made us more open with
each other and better able to transparently
address challenges and opportunities
within equity, diversity and inclusion.
I believe people are at their best when
they feel they can be themselves and
businesses are at their best when
everyone can be seen, heard and valued.
This is why progressing equity, diversity
and inclusion is a key priority for us both
within our company and in our local
communities. To unlock the power and
potential of diverse perspectives, we
believe our teams in each site, lab and
office must reflect the local communities
we call home. We’ve already set a target
for gender parity in leadership roles
by 2025.
I’ve been deeply moved and inspired to
action by the conversations happening
across Tate & Lyle, particularly amongst
our Employee Resource Groups, with our
Black employees in the US creating our
Black Employee Network during the
summer. I’m proud of our work to foster
psychological safety which allows our
people to feel they can share their lived
experiences so openly and honestly. Our
people and these sentiments underpin our
work on expanding our equity, diversity
and inclusion ambitions with a tangible
action plan, guided by our Chief Equity,
Diversity & Inclusion Officer, who joined
us in April 2021. We know that inclusion
requires cultural change and equity
requires systemic change, both of which
will take time and effort, and for people to
be accountable. We are not yet where we
want to be and remain committed to
prioritising equity, diversity and inclusion
as a major focus in the years ahead. We
can and will make change happen.
TACKLING THE CLIMATE CHALLENGE
Another key area of focus for us is
sustainability and caring for our planet.
Covid-19 has, if anything, put the climate
emergency even more front and centre, as
it has woken us all up to systemic risk and
the interconnectedness of the modern
world. It’s clear that time is running out to
make the changes needed to halt climate
change and enable societies to continue to
prosper. For that reason, in July, together
with many other CEOs, I was delighted to
be a signatory of the Science Based
Targets initiative’s ‘Recover Better’
statement, urging governments across the
world to address climate change in their
Covid-19 recovery plans.
We are in the middle of
a multi-year investment
programme of over
US$150 million to
significantly reduce
greenhouse gas emissions
and eliminate coal from
our operations.
One of the things I’m most proud of this
year is our announcement in May 2020 of
our purpose commitments. These included
ambitious 2030 targets to reduce water
use, support sustainable agriculture and
beneficially use all the waste we generate,
as well as challenging, science-based
targets to reduce our absolute greenhouse
gas (GHG) emissions. In our purpose
booklet published in December 2020, we
talked about the tangible progress we’re
making to meet these targets.
To support the delivery of our GHG
emissions targets, we are in the middle
of a multi-year capital investment
programme totalling more than
US$150 million to significantly reduce
GHG emissions and increase our efficiency.
This includes replacing coal boilers in our
US plants in Decatur, Illinois and Lafayette,
Indiana and constructing a biomass
boiler in Santa Rosa, Brazil. When this
programme is complete, our Scope 1 and 2
GHG emissions will be up to 20% lower and
we will have eliminated coal from our
operations. We continue to operate our
sustainable corn programme in the US
Midwest – the only one of its kind in our
industry – in line with our commitment to
maintain sustainable acreage equivalent to
the amount of corn we buy, currently
1.5 million acres. This is essential to our
Scope 3 carbon emissions target because
the growing of corn represents the largest
proportion of the emissions coming from
our value chain – and it also supports
farmers’ livelihoods, and so contributes to
our purpose pillar of building thriving
communities.
TATE & LYLE PLC ANNUAL REPORT 2021
17
CHIEF EXECUTIVE’S REVIEW CONTINUED
OUR 2020 HEROES
2020 was a year of incredible challenges. Given the exceptional
performance of so many people across the Company, we launched a
special ‘2020 Heroes Awards’ to recognise those people who had gone
above and beyond in supporting their colleagues, our communities and
customers during the pandemic. We asked everyone to nominate their
colleagues that most deserved gratitude and recognition and we received
575 nominations for individuals and teams. We whittled all these deserving
submissions down to 45 nominees, and 30 eventual winners. These
winners are shown on the divider pages in this report to celebrate and
recognise their outstanding contribution. We’re hugely grateful for their
hard work, dedication, care and compassion.
Read more on pages 30, 78, 132, 200
TEAM AWARD
Not all heroes stand alone, and often the biggest impact occurs when a
team of dedicated people comes together to make a change. Because of
this, we wanted to recognise a group of US colleagues who were nominated
many times for setting up and co-leading our Black Employee Network,
and for having such a positive impact on equity, diversity and inclusion at
Tate & Lyle. They are:
O U R
2 0 2 0
H E R O E S
CASELL RANDLE
US National Account
Manager
(home-based)
DERRICK WILLIAMS
Recruiting Manager,
Hoffman Estates,
Illinois
DONALD COLE
Senior Legal Counsel,
Hoffman Estates,
Illinois
MELINDA WHITE
HR Manager,
Dayton, Ohio
MONICA CLARK
Senior Legal
Counsel, Hoffman
Estates, Illinois
18 TATE & LYLE PLC ANNUAL REPORT 2021
Responding to demand for more
plant-based diets
The context for our focus on the planet
is wider than simply reducing our
environmental impact. Nearly everything
we make at Tate & Lyle starts life in the
natural world, and the increasing demand
for plant-based diets is a trend we are well
placed to meet. Corn is by far our largest
agricultural raw material, but we are
diversifying our portfolio by investing in
other crops such as stevia and tapioca.
As I mentioned earlier, I’m delighted that,
despite the challenges of being in
lockdown, we were able to complete two
acquisitions this year without any lessening
of our due diligence – and welcome two
new businesses into Tate & Lyle. In
November, we completed the acquisition
of the outstanding majority shareholding
in Sweet Green Fields, a global stevia
business with a production facility in
Eastern China, and in February, we
completed the acquisition of an 85%
shareholding in Chaodee Modified Starch
Co., Ltd, a well-established tapioca starch
manufacturer in Thailand.
NEW APPOINTMENTS TO SUPPORT
OUR GROWTH PLANS
Both the businesses we acquired this year
are in Asia, which is a market where we
see significant growth potential. In October,
I reorganised my leadership team, with
Andrew Taylor, previously President of
Innovation and Commercial Development
(ICD), moving into a new role of President,
Asia, Middle East, Africa and Latin America,
based in Singapore. These markets have
common themes and challenges and
focusing on them in this way under
Andrew’s leadership will allow us to take
advantage of the opportunities they
present. Andrew’s move meant welcoming
Victoria Spadaro Grant as our new
President of ICD. She comes with 30 years’
experience of innovation and R&D in the
food and beverage industry, and brings an
essential customer perspective to our team.
We also welcomed our new Chief Financial
Officer (CFO), Vivid Sehgal, who took on the
role in April 2021. Vivid brings a wealth of
experience in financial and operational
leadership in global companies, and we
are already seeing the benefit of his
expertise. Of course, welcoming Vivid was
due to the departure of Imran Nawaz, who
STRATEGIC REPORT
THANK YOU FOR THE MUSIC
The Tate & Lyle Global Choir was formed to keep
people connected and improve mental health
during the pandemic. Colleagues from 21 countries
answered the call, many of them discovering the
joys of group singing for the first time. The choir,
which meets every week, recorded two songs
which can be seen and heard on our YouTube
channel and website.
has made a huge contribution as CFO and
been a great support to me during his
years with Tate & Lyle. I’d like to thank him
for everything he’s done to strengthen our
financial position, particularly in this really
difficult year.
As at the date of this report, discussions
are ongoing. There can be no certainty that
a transaction will be concluded, and we
will make further announcements when
appropriate. Any transaction, if concluded,
would be subject to shareholder approval.
EXPLORING OPPORTUNITIES
TO SEPARATE THE TWO BUSINESSES
In April 2021, following speculation in the
media, we issued a statement confirming
that we are exploring the potential to
separate our Food & Beverage Solutions
and Primary Products businesses through
the sale of a controlling stake in Primary
Products to a long-term financial partner.
This transaction, if concluded, would
create two businesses – Tate & Lyle,
focused on Food & Beverage Solutions and
a global leader in sweetening, mouthfeel
and fortification, and Primary Products, a
leader in plant-based products for the food
and industrial markets, alongside a new
investor with a strong appetite to develop
and grow the business.
As shown in this report, we continue to
successfully execute our strategy and
remain confident in the future growth
prospects of the Company. However, the
Board believes that if a transaction of this
nature were to be completed, it would
enable Tate & Lyle and the new business
to focus their respective strategies and
capital allocation priorities and create the
opportunity for enhanced shareholder
value. During the year, we incurred
£19 million of exceptional costs, principally
for external advisors, for work performed
in relation to this potential transaction.
OUTLOOK FOR 2022 FINANCIAL YEAR
For the year ending 31 March 2022,
despite the continuing impact of the
Covid-19 pandemic, we expect:
• Food & Beverage Solutions to deliver
another year of progress
• Sucralose to see further modest pricing
pressure
• In Primary Products, Sweeteners and
Starches to return to growth as
out-of-home consumption recovers
and Commodities profits to be
significantly lower
• Further productivity benefits
With overall positive momentum, we
expect growth in Group adjusted operating
profit before Commodities to be in the
mid-single digit range in constant
currency. Reflecting significantly lower
Commodities profits and an increase in
the adjusted effective tax rate, Group
adjusted diluted earnings per share are
expected to be lower than the prior year
in constant currency.
A BRIGHT FUTURE IN AN
UNCERTAIN WORLD
Tate & Lyle has had a strong year,
weathering the pandemic and finishing the
year in a more robust financial position
than when we started. It’s tempting to talk
about a post-pandemic world, but it’s clear
that we’ll be living with Covid-19 for at
least the coming financial year, and we’ll
probably be living with its effects for years
to come. There is much that we still don’t
know about what that world will look like,
but we do know the pandemic has
heightened people’s awareness of the
importance of a healthier diet and lifestyle.
Our high-quality portfolio and technical
capabilities in sweetening, mouthfeel and
fortification which help reduce sugar,
calories and fat, and add fibre to food and
drink, mean we are well-positioned to
meet this growing trend. Covid-19 has
also accelerated our own journey towards
being a more agile, ambitious and
compassionate company with more
contemporary ways of working. We must
strive to maintain these positive attributes
as the world opens up.
Looking with a wider lens, I certainly hope
the pandemic will be a tipping point for
positive change and lead to a more
compassionate and less divided society.
Our people have shown this year how a
powerful purpose can inspire them to do
extraordinary things and, through their
hard work, we are emerging stronger from
the pandemic. I am more confident than
ever in the long-term growth potential of
Tate & Lyle.
Nick Hampton
Chief Executive
TATE & LYLE PLC ANNUAL REPORT 2021
19
OUR WORLD
WHAT’S HAPPENING
AROUND US
The food and beverage market has an
inherent strength – people need to eat and
drink. Within that, a number of major
global trends are shaping our industry,
many of which have been accelerated by
the pandemic.
OUR
PURPOSE
OUR
WORLD
OUR
BUSINESS
OUR
STRATEGY
OUR
PROGRESS
GLOBAL TRENDS AND COVID-19
The Covid-19 pandemic has caused major
changes to the way we live, as well as
having a direct impact on our health. We
still don’t know how permanent these
changes will be, but the increase in online
shopping, more flexible working practices
and a greater awareness of personal
hygiene and health are just some of the
trends expected to stay. Some of the factors
which were driving changes in people’s
lifestyles before the pandemic, such as
population growth, urbanisation, climate
change and the greater use of technology,
are still with us and in some ways been
accelerated by it. Lockdown measures have
also had a major impact on the way we eat
and drink. The majority of people have been
eating their meals at home, whereas
previously many visited cafés, pubs or
restaurants for snacks and meals. While
some of the lockdown measures have now
been relaxed either partially or wholly, the
change in behaviour due to lockdowns has
the potential to have a longer-term impact
on our lives and our understanding of the
relationship between diet and health.
Changing diets and lifestyles
No matter where you look, societies and
governments are facing significant food
and health-related challenges. In today’s
more urbanised world, people are leading
less active ways of life, a situation made
worse by lockdowns. People are generally
eating too much and moving too little, and
these progressively unbalanced lifestyles
are affecting their health. The incidence of
obesity and diabetes, and concerns about
digestive health, are increasing rapidly. It
is estimated that there are approximately
463 million adults in the world living with
diabetes, growing to 700 million by 20451.
Healthcare costs are rising over the longer
term, placing health services in many
countries under increased pressure.
In the UK, for example, the government
estimates that the costs for the National
20 TATE & LYLE PLC ANNUAL REPORT 2021
Health Service attributable to overweight
and obesity will increase from £6.1 billion
to £9.7 billion by 2050, with wider costs to
society estimated to reach £49.9 billion per
year2. Overconsumption of sugar is seen as
a major concern, and around 40 national
governments have already introduced a
‘sugar tax’3. And yet, while obesity is now
responsible for more deaths than hunger,
one in nine people in the world still
struggle to find enough nutritious food to
eat every day4. And this is likely to rise as
the economic consequences of the
pandemic play out over the next few years.
Convenience and home cooking
Before the pandemic, the growth in the
middle class, especially in Asia Pacific, and
people’s more hectic lifestyles, were
causing a long-term shift towards greater
convenience and time-saving ways of
eating. As the world emerges from the
pandemic, convenience will remain
important, but the pandemic has
undoubtedly had an impact on food
purchasing and consumption behaviour.
For example, people are snacking 50%
more often than before lockdown across
the UK, Spain, Brazil and France5. And
home cooking has increased dramatically,
causing the reversal of a long-term trend
away from eating desserts5. There has
clearly been a shift in behaviour but as the
world opens up the extent to which these
changes will be adopted permanently is yet
to be seen.
Climate change and plant-based foods
The global pandemic has shone a light on
the interconnectivity between maintaining
a healthy natural world and living in
thriving societies. Concern for our planet
and its natural resources, particularly the
need to tackle climate change, is
increasing rapidly and this concern is
affecting people’s food choices in many
ways. Demand for plant-based alternatives
is growing, as people adopt vegan,
vegetarian or ‘flexitarian’ diets, cutting
back on meat amid concerns for their
health and the effects of animal farming on
the environment. And they’re also wanting
to know exactly what goes into the food they
eat and where it comes from, examining
labels more closely and looking for simpler
or ‘more natural’ ingredients. And it’s not
just the food that’s important –
environmental concerns mean that the
packaging needs to be sustainable too.
THE OPPORTUNITY FOR TATE & LYLE
For food companies like Tate & Lyle, these
global trends present both opportunities
and risks. This year, we have had to be
agile to adapt to changing consumer needs
as people moved away from eating in
restaurants and bars to buying more food
from retail outlets to eat at home. As a
plant-based ingredients business, the
combination of increasing awareness of
climate change and the recognition of the
importance of a healthy lifestyle is a
particular opportunity. Inspired by our
purpose of Improving Lives for Generations,
we work to create ingredients and
solutions that give people healthier and
tastier choices when they eat and drink and
help them to lead more balanced lifestyles.
At the same time, we are working to take
care of our planet and helping to protect its
natural resources. Whether through health
and wellness ingredients in a new
generation of popular brands, nutritive
sweeteners at an affordable price, or
stabilising systems that allow food to travel
over long distances, our goal is not just to
feed people, but to feed them well.
International Diabetes Federation, 2019 (age 20 – 79 years).
1
2 www.gov.uk.
3 Obesity Evidence Hub, 2019.
4 FAO: The State of Food Security and Nutrition in the World 2019.
5 Kantar, 2020.
6 Population Reference Bureau, 2020.
7 World Health Organization, 2016 data.
8 FMCG Gurus, January 2021.
9 Our World in Data, 2020.
STRATEGIC REPORT
STRATEGIC REPORT
SNAPSHOT OF TRENDS
25%
estimated increase in global
population by 20506
39%
of adults worldwide aged 18
or over are overweight7
60%
of people are more concerned
about their immune health due
to the pandemic8
26%
of global greenhouse gas emissions
come from food production9
TATE & LYLE PLC ANNUAL REPORT 2021
21
People are snacking
more often than
before lockdown and
home cooking has
increased dramatically.
Susanna Palatucci
Global Head of Health and Wellness,
Innovation and Commercial Development
OUR
PURPOSE
OUR
WORLD
OUR
BUSINESS
OUR
STRATEGY
OUR
PROGRESS
OUR BUSINESS MODEL
WHAT WE DO
We improve lives by making food tastier
and healthier; by making everyday tasks
easier; by promoting a safe, healthy
working environment; by making a
difference in our communities; and by
caring for our planet.
OUR RESOURCES
WHAT WE DO
SCIENTIFIC AND
TECHNICAL KNOW-HOW
LARGE-SCALE
MANUFACTURING
OPERATIONS
TALENTED PEOPLE
WE THINK AND CREATE
WE SOURCE AND MANUFACTURE
Innovation and Commercial Development
Our scientists and nutritionists research,
develop and test ingredients to create
solutions for our customers. We work closely
with them through every stage of our
innovation process to move ideas quickly
from concept to commercial launch.
Consumer preferences are different across
the world, which is why our customers come
to our local applications labs to work with us
to reformulate their products with our
ingredients for their local markets.
Global Operations
Our ingredients come largely from
agricultural crops, principally corn.
We produce them mainly at large-volume
corn wet mills shared by both businesses,
and also at smaller blending facilities.
Wherever we are in the process, from
field to customer, our priorities are
safety, quality and consideration for
the environment.
Read more on pages 40 and 41
Read more on pages 42 and 43
CUSTOMERS
We collaborate with, and provide ingredients and solutions to, our customers, large and
small, in more than 140 countries.
STRONG BALANCE SHEET
AND DISCIPLINED USE
OF CAPITAL
WE PARTNER AND SELL
Food & Beverage Solutions
We have strong technical knowledge of the
interplay between sweetness, mouthfeel,
fortification and stabilisation. Through this,
we provide customers across the world with
solutions that bring specific functionality and
nutrition to their products.
Primary Products
We sell high-volume products primarily into
the food and beverage, and paper and
packaging industries, and mainly in North
America. Leveraging our scale and cost-
competitive manufacturing base, we compete
mainly on quality, service and price.
LONG-TERM
RELATIONSHIPS WITH
STAKEHOLDERS
Read more on pages 32 to 35
Read more on pages 36 to 39
EVERYTHING WE DO
IS UNDERPINNED BY...
Our purpose
Improving Lives for Generations
Our priorities
• Sharpen
• Accelerate
• Simplify
22 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
THE VALUE WE CREATE FOR OUR STAKEHOLDERS
FOR SHAREHOLDERS
We balance investing in growth
with paying an attractive dividend.
FOR CUSTOMERS
We help our customers bring products
to market quickly that address society’s
changing needs.
FOR EMPLOYEES
We are committed to the health, safety
and wellbeing of our employees, and to
providing a culture that is both inclusive
and performance-driven.
£408m
dividends paid in the past
three financial years
£133m
revenue from New Products
from our innovation pipeline1
£347m
paid to employees1
FOR COMMUNITIES
We have a long history of community
involvement, helping us to make
lasting contributions to the places
where we live and work.
FOR SUPPLIERS
Corn is our largest input, and we
have long-term, mutually beneficial
relationships with farmers and other
supplier partners.
FOR THE ENVIRONMENT
Throughout our operations we look
to minimise our environmental impact
by reducing emissions and waste, and
using water sustainably.
1.7m
1.5m
meals given to people in need
in our local communities1
total acreage of corn
purchased globally1
1 Year ended 31 March 2021.
25%
reduction in Scope 1 and 2
greenhouse gas emissions
since 2008
Our priorities
• Sharpen
• Accelerate
• Simplify
Our values
• Safety
• Integrity
• Respect
Our behaviours
• Partnership
• Agility
• Execution
TATE & LYLE PLC ANNUAL REPORT 2021
23
OUR STRATEGY
HOW WE
DELIVER VALUE
Our strategy is to deliver top-line and
bottom-line growth in Food & Beverage
Solutions and steady earnings from
Primary Products.
OUR
PURPOSE
OUR
WORLD
OUR
BUSINESS
OUR
STRATEGY
OUR
PROGRESS
Our customers come to us for our expertise,
particularly in the following areas.
We deliver value in Primary Products in
the following ways.
• Sweetening: Our understanding of
sweeteners, built over many years,
and our broad portfolio have given
us unique expertise in sweetening,
and sugar and calorie reduction in
particular. Our sweeteners and fibres
help reduce sugar and calories without
compromising the taste and texture
consumers know and want.
• Mouthfeel: Our starches add body,
lengthen shelf-life and replace fat while
preserving the texture and mouthfeel
people want.
• Fortification: Our fibres offer a range
of nutritional and functional benefits,
alongside exceptional digestive
tolerance.
• Stabilisation: With our deep knowledge
of ingredients and complex food
systems, we create customised
stabiliser systems (highly functional
ingredient blends) that ensure products
maintain their stability and appetising
texture.
PRIMARY PRODUCTS
Through this division, we provide high-
volume products to customers in the food
and beverage, and paper and packaging
industries, primarily in North America.
We also sell co-products as animal feed to
customers around the world. Our two main
markets are bulk sweeteners and
industrial starches. These are both large,
mature markets with high barriers to
entry. In these markets, we compete
primarily on quality, service and price.
• Drive productivity and efficiency: The
more efficient our plants, the lower our
costs of production. We have four large
corn wet mills in the US, two smaller
corn wet mills in Europe, and acidulants
plants in the US and Brazil. For the best
returns, they need to operate at, or close
to, capacity. We have global and local
programmes which ensure a relentless
focus on safety, productivity and
efficiency at every plant.
• Optimise product and category mix:
With tight margins on our products,
small changes can make an important
difference to our performance. We look
very closely at what we sell, to whom,
and into which markets, moving
production where we can from declining
to growing product lines, and targeting
new and growing markets.
• Secure corn supply: Corn is our largest
raw material, and a secure supply is
essential. We invest in our corn silo
(elevator) storage network and our
relationships with the farmers who
supply us, and we manage inventory
carefully.
• Reduce exposure to volatile commodity
markets: Every part of the corn kernel
has some commercial value, but the
selling price of commodities such as
corn oil and corn meal is set by the
market and can vary considerably. We
use a range of measures to manage our
exposure as best we can, from tolling
contracts which pass the raw material
costs on to customers, to using futures
contracts to lock in future corn prices.
We produce our ingredients from
agricultural raw materials mainly at
large-volume corn wet mills, and also at
smaller blending facilities where we make
bespoke solutions for customers. We
operate as an integrated business made up
of two trading divisions, both with distinct
roles to play. Food & Beverage Solutions is
focused on delivering growth, with Primary
Products focused on delivering cash and
steady earnings. They share a cost-
efficient asset base and some common
customers, and we manage both
businesses to optimise returns for
shareholders. The challenges of managing
through the pandemic have highlighted the
strength of our strategy, as shown by our
resilient performance during the year.
FOOD & BEVERAGE SOLUTIONS
Through this division, we provide
ingredients and solutions which add
specific functionality, nutrition and health
benefits to our customers’ products. This
division includes our Sucralose business.
We work in partnership with customers
to develop new products, and reformulate
existing ones, to make food and drink
healthier but still taste great. It sounds
simple, but it’s far more complicated than
just swapping one ingredient for another.
Taste, texture, mouthfeel, shelf-life,
stability – all these things have to be taken
into account when reformulating food and
beverages in our network of applications
labs. Taste is inherently local, which
means that food and beverages also need
to be adapted to different regions and
countries. Our portfolio of sweeteners,
starches, fibres and stabilisers, combined
with our technical expertise in key
categories, help us deliver solutions for
customers in their local markets.
24 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
INVESTMENT CASE
OUR PURPOSE
IMPROVING LIVES FOR GENERATIONS
SUPPORTING
HEALTHY LIVING
BUILDING THRIVING
COMMUNITIES
CARING FOR
OUR PLANET
CLEAR STRATEGY
FOOD & BEVERAGE SOLUTIONS
Top-line and bottom-line growth
PRIMARY PRODUCTS
Stable earnings and cash generation
By building leading positions in:
By managing our portfolio to:
• Three categories globally – beverages, dairy and soups,
sauces and dressings
• Two or three additional categories in each region where
we have local expertise, such as bakery and snacks
• Optimise product and category mix
• Drive productivity and operational efficiency
• Diversify into new and growing markets
SUCRALOSE
Manage for cash – high return on assets
ACCELERATING PERFORMANCE THROUGH THREE PRIORITIES
SHARPEN THE FOCUS ON
OUR CUSTOMERS
ACCELERATE PORTFOLIO
DEVELOPMENT
SIMPLIFY THE BUSINESS AND
DRIVE PRODUCTIVITY
DELIVER RETURNS FOR SHAREHOLDERS
ACCELERATE GROWTH IN
EARNINGS PER SHARE
IMPROVE ORGANIC RETURN ON
CAPITAL EMPLOYED
MAINTAIN A PROGRESSIVE
DIVIDEND POLICY
TATE & LYLE PLC ANNUAL REPORT 2021
25
OUR PROGRESS
KEY PERFORMANCE
INDICATORS
To keep us on track, we measure progress against our strategy: how we are maintaining
the financial flexibility to grow our business and provide returns to shareholders;
how we’re keeping our people safe at work; and how we’re living our purpose.
OUR
PROGRESS
OUR
BUSINESS
OUR
STRATEGY
OUR
PURPOSE
OUR
WORLD
CHANGES TO KPIs IN 2021
There have been no changes to our KPIs
other than, from this year, we began
measuring progress against our
long-term purpose targets and
commitments announced in May 2020.
◊ LINK TO REMUNERATION
These KPIs are used in determining
executive directors’ annual bonuses and
for long-term incentive plans. Our safety
KPIs and progress against our purpose
targets are also taken into account
when determining performance against
the strategic non-financial component
of annual bonuses.
DELIVERING OUR STRATEGY
Food & Beverage Solutions – volume ◊
Food & Beverage Solutions – revenue ◊
2021
2020
2019
1%
3%
3%
3%
2021
2020
2019
6%
£970m
£942m
£889m
Performance in 2021
Volume grew 3%. During the pandemic
demand for foods consumed in-home drove
growth in both North America and Europe
of 4%, and in Asia, Middle East, Africa and
Latin America of 2%.
Why we measure it
Top-line growth in Food & Beverage
Solutions is a key element of our strategy.
How we calculate it
As reported, excluding Sucralose.
Performance in 2021
Revenue increased by 6%, driven by higher
volume and good price and mix
management, which included strong
growth in New Product revenue.
Why we measure it
To ensure we are successfully converting
our investments into revenue growth.
How we calculate it
In constant currency, excluding Sucralose.
Food & Beverage Solutions – profit1, 2, ◊
Primary Products – profit1, 2
Group adjusted profit before tax1, ◊
£177m
£162m
£143m
2021
2020
2019
12%
2021
2020
2019
5%
£158m
£158m
£148m
2021
2020
2019
6%
£335m
£331m
£309m
Performance in 2021
Adjusted operating profit was 12% higher,
driven by revenue growth, good operational
performance and cost discipline.
Why we measure it
We invest in Food & Beverage Solutions
to deliver growth, and profit growth
demonstrates the return on those investments.
How we calculate it
In constant currency, excluding Sucralose.
Performance in 2021
Adjusted operating profit was 5% higher,
with good operational efficiency, cost
discipline and a record year of profits in
Commodities.
Why we measure it
We aim to deliver steady earnings by
offsetting declining demand from traditional
markets with ever more efficient production
and expansion into new and growing
markets.
How we calculate it
In constant currency.
Performance in 2021
Adjusted profit before tax increased by 6%
with strong revenue and profit growth from
Food & Beverage Solutions, strong cost
management and record Commodities
profits from Primary Products.
Why we measure it
To ensure we make good investment
decisions and execute our strategy
successfully.
How we calculate it
In constant currency.
1 Adjusted results and a number of other terms and performance measures used in this Annual Report are not defined by accounting standards. For clarity, we have provided descriptions
of the various metrics and their reconciliations to the most directly comparable measures reported in accordance with IFRS, and the calculations, where relevant, of any ratios in
Notes 1 and 4.
2 Adjusted operating profit.
26 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
DELIVERING FOR OUR SHAREHOLDERS
Adjusted diluted earnings per share1, ◊
Adjusted free cash flow1
Return on capital employed1, ◊
2021
2020
2019
12%
61.2p
57.8p
52.0p
2021
2020
2019
£250m
£247m
£212m
2021
2020
2019
17.2%
17.5%
17.1%
£3m
30bps
Performance in 2021
Adjusted diluted earnings per share
increased by 12% in constant currency,
benefiting from the adjusted effective tax
rate in the year being 360 basis points lower
at 14.3%.
Performance in 2021
Reflecting the impact of increased earnings
mitigated by higher corn prices and a strong
focus on generating cash, especially
important this year to maintain our financial
strength during the pandemic.
Why we measure it
To track the underlying performance of the
business and ensure revenue growth
translates into increased earnings.
Why we measure it
To track how efficient we are at turning
profit into cash and to ensure that working
capital is managed effectively.
How we calculate it
As defined in Note 12, with growth rate
in constant currency.
How we calculate it
As defined in Note 4.
Performance in 2021
Lower, mainly due to the short-term impact
of acquisitions completed in the year.
Why we measure it
To ensure we continue to generate a strong
rate of return on the assets we employ, and
to maintain a disciplined approach to capital
investment.
How we calculate it
The return as a percentage of our profit
before interest, tax and exceptional items
from continuing operations, divided by
average invested operating capital from
continuing operations.
MAINTAINING FINANCIAL FLEXIBILITY
ACTING SAFELY
Net debt to EBITDA multiple1
Recordable incident rate3
Lost-time rate3
0.8x
0.8x
0.9x
2020
2019
2018
0.67
0.78
0.94
2020
2019
2018
0.40
0.42
0.47
2021
2020
2019
0.1x
Performance in 2021
The net debt to EBITDA ratio was slightly
lower at 0.8 times due to earnings growth
and lower net debt as we focused on
maintaining our financial strength in the
pandemic.
Why we measure it
To ensure we have the appropriate level
of financial gearing, and that our debt
is not a disproportionate burden on
the Company.
How we calculate it
The number of times our net debt exceeds
our EBITDA.
3 Measured by calendar year.
14% DECREASE
5% DECREASE
Performance in 2020
Our recordable incident rate improved with the number of accidents in the year down
from 52 to 42. The lost-time rate also improved. These improvements are a positive sign
that our Journey to EHS Excellence programme is being embedded in the organisation.
Why we measure it
Ensuring safe and healthy conditions at all our locations is essential for our success.
How we calculate it
The number of injuries requiring treatment
beyond first aid per 200,000 hours.
How we calculate it
The number of injuries that resulted
in lost-work days or restricted work
days per 200,000 hours.
TATE & LYLE PLC ANNUAL REPORT 2021
27
OUR PROGRESS CONTINUED
PURPOSE TARGETS
AND COMMITMENTS
In 2020, we set out targets and commitments for the next 10 years to live
our purpose. This shows how we are progressing against these targets.
OUR
BUSINESS
OUR
PURPOSE
OUR
WORLD
OUR
STRATEGY
OUR
PROGRESS
SUPPORTING HEALTHY LIVING
Improving nutrition
By 2025, through our low- and no-calorie
sweeteners and fibres, we’ll have helped
remove nine million tonnes of sugar from
people’s diets, equivalent to 36 trillion
calories.
Encouraging balanced lifestyles
By 2025, we’ll have helped improve the
lives of over 250,000 people by supporting
programmes that promote healthier
lifestyles and activities.
Promoting personal wellbeing
By 2025, we’ll have helped our colleagues
improve how they look after their physical
and mental wellbeing so they can be their
best at work and in their daily lives.
2021
1.8m
2020
0
2025
target
9m
2021
40,000
2020
0
2025
target
250,000
2020
70%
2021
75%
2025
target
90%
Performance in 2021
We benefited from a strong performance
from our PROMITOR® fibres and stevia
sweeteners along with sales of Sucralose.
1.8 million tonnes of sugar is equivalent to
7.1 trillion calories.
How we calculate it
We take the volume of fibres and low- and
no-calorie sweeteners we sell and calculate
the sugar equivalence and caloric conversion.
Performance in 2021
While some programmes were cancelled due
to the pandemic, we still managed to support
many health education and physical activity
programmes across the world.
How we calculate it
The number of people who benefit from the
programmes we support either through cash
donations or volunteering. In many cases,
this information comes from the third parties
running the events.
Performance in 2021
Supporting the physical and mental
wellbeing of our colleagues during the
pandemic is a key priority, and we are
pleased they recognised this, as shown
by the improvement in this year’s survey
results at 75%, compared with 70%
last year.
How we calculate it
Percentage of colleagues who agree that
Tate & Lyle actively supports their health and
wellbeing in our annual employee survey.
BUILDING THRIVING COMMUNITIES
Preventing hunger
By 2025, we’ll have provided over three
million nutritious meals for people in need.
Supporting education
By 2025, we’ll have supported the education
of over 100,000 children and students
through learning programmes and grants,
helping them attain skills for life.
Progressing equity, diversity and
inclusion
By 2025, we’ll achieve gender parity in our
leadership roles.
2020
0
2021
1.7m
2025
target
3m
2021
14,000
2020
0
2025
target
100,000
2020
27%
2021
32%
2025
target
50%
Performance in 2021
Our annual programme provided 700,000
meals this year, and we donated an extra one
million meals to help people in need during
the pandemic.
How we calculate it
Each food bank or charitable partner we
support tells us how many meals our
donations provide.
Performance in 2021
With many schools closed during the
pandemic, we moved our support online,
continuing to mentor students and give food
science demonstrations. We also continued
giving educational grants and bursaries.
How we calculate it
Each school or organisation we work with
tells us how many students benefit from the
programmes we support.
Performance in 2021
We made solid progress in the year with a
number of senior roles filled by women,
including our new President of Innovation
and Commercial Development.
How we calculate it
Percentage of women who hold leadership
roles, defined as the top three employee
bands. This year the total number of roles
in these bands was 60, of which 19 were
held by women.
28 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
CARING FOR OUR PLANET
Scope 1 and 2 greenhouse gas emissions
By 2030, we’ll have delivered a 30% absolute
reduction in our Scope 1 and 2 greenhouse
gas emissions, with an ambition to reach a
20% reduction by 2025.
Scope 3 greenhouse gas emissions
By 2030, we’ll have delivered a 15% absolute
reduction in our Scope 3 greenhouse gas
emissions.
20201
7%
2019
0%
2030
target
30%
20201
0.5%
2019
0%
2030
target
15%
Performance in 2020
Reduction was driven mainly by our US plants
in Decatur, Illinois and Lafayette, Indiana
starting to transition away from coal, and the
greater use of renewable energy in our
plant network.
Performance in 2021
The small reduction primarily came from
our sustainable agriculture programme.
Our main focus this year was identifying
projects and building partnerships to reduce
Scope 3 emissions in the future.
How we calculate it
Percentage absolute reduction in Scope 1
and 2 greenhouse gas emissions.
How we calculate it
We receive data from Truterra LLC, our
partner in our sustainable agriculture
programme, and other third parties across
our value chain.
Using waste beneficially
By 2030, 100% of our waste will be
beneficially used, with an ambition to reach
75% by 2025.
Using less water
By 2030, we’ll have reduced water use
intensity by 15%.
20201
69%
2019
61%
2030
target
100%
20201
1%
2019
0%
2030
target
15%
Performance in 2020
We made good progress mainly through
our large corn wet mills in the US working
with local partners to use more of our waste
to generate energy or as nutrients on
local farms.
How we calculate it
Percentage of waste generated by our sites
that is beneficially used.
Performance in 2020
We made solid progress reducing water
use. However, our main focus this year was
identifying projects to make material
reductions in future years.
How we calculate it
Percentage reduction in water use intensity
across our operations.
COMMITMENTS
Establish science-based targets
We committed to having our Scope 1 and 2
and Scope 3 greenhouse gas emissions
reduction targets validated as science-
based by the Science Based Targets
initiative. This was done in September
2020, meaning our targets are in line with
the goals of the Paris Agreement on
Climate Change.
Eliminate use of coal
We committed to eliminating the use of
coal in our operations by 2025. The capital
investment projects needed to replace
our coal-fired boilers with natural
gas-fired boilers are underway and we
are on track to deliver this commitment.
Support sustainable agriculture
We committed to maintaining sustainable
acreage equivalent to the volume of
corn we buy globally each year, currently
1.5 million acres, and through
partnerships accelerate the adoption
of conservation practices.
We achieved the 1.5 million acres goal this
year, and more information about the
programme can be found on page 65.
BASELINE
The baseline for our caring for our planet
targets is the year ended 31 December
2019. For supporting healthy living and
building thriving communities, the
baseline is 31 March 2020.
MORE INFORMATION
You can find more details about our
sustainability performance on pages 60
to 65 of this Report. Further information
on the education, meals and healthier
lifestyles programmes we support can be
found in the Community Involvement
section on pages 54 and 55. Information
on our employee wellbeing programmes
is in the People section on pages 50 to 53.
1 Measured by calendar year.
TATE & LYLE PLC ANNUAL REPORT 2021
29
O U R
2 0 2 0
H E R O E S
2020 was a year of incredible challenges.
Given the exceptional performance of so
many people across the Company, we
launched a special ‘2020 Heroes Awards’
to recognise those people who had gone
above and beyond in supporting their
colleagues, our communities and
customers during the pandemic.
We asked everyone to nominate their
colleagues that most deserved gratitude
and recognition and we received
575 nominations for individuals and
teams. We whittled these deserving
submissions down to 45 nominees, and
30 eventual winners.
These winners are shown on the divider
pages in this Report to celebrate and
recognise their outstanding contributions.
Read more online at www.tateandlyle.com
30 TATE & LYLE PLC ANNUAL REPORT 2021
ZHIJUN ZHAO
EHS Manager, Nantong, China
For leading the Journey to EHS Excellence
and Covid-19 response at our fibre plant in
Nantong, China. Zhijun engages all Nantong
employees in creating a safety culture.
ARCHI QUDDUS
Investor Relations Officer, London, UK
For bringing people together across
Tate & Lyle by forming the Global Choir, giving
people a real boost during lockdown.
CLINT DAVIDSON
Process Technician, Loudon, Tennessee, USA
For taking over production of a key ingredient
during the pandemic, ensuring we continued
to serve our customers.
CONSUELO ABBRUZZESE
Application and Technical Service,
Buenos Aires, Argentina
For staying closely connected with a key
customer during the pandemic, strengthening
our relationship and positioning us as a
trusted partner.
ROB DAVIES
Logistics Team Leader, Mold, UK
For jumping in to take on an IT role, ensuring
that within 24 hours our teams in Mold were
able to work from home – all while doing his
regular job.
KERSTIN WERNER
Category Development Manager, Europe,
Soups, Sauces and Dressings Category,
Lübeck, Germany
For her resilience in delivering our ‘Plant
Power’ customer conference – moving the
event twice before finally taking it online for
customers in Europe with great results.
STRATEGIC REPORT
REVIEW OF
THE YEAR
IN THIS SECTION
32
36
40
42
44
46
50
53
54
56
66
Food & Beverage Solutions
Primary Products
Innovation and Commercial Development
Global Operations
Chief Financial Officer’s introduction
Group financial review
Our people
Equity, diversity and inclusion
Community involvement
Environment, health and safety
Task Force on Climate-related Financial
Disclosures
Risk Report
68
TATE & LYLE PLC ANNUAL REPORT 2021
31
FOOD & BEVERAGE SOLUTIONS
DELIVERING
TOP-LINE GROWTH
Andrew reflects on another strong year for
Food & Beverage Solutions, and his new
role leading our Asia, Middle East, Africa
and Latin America business.
We work with our
customers to develop
new products, and
reformulate existing ones,
to make food and drink
healthier while still
tasting great.
PARTNER AND SELL
Our portfolio, combined with our
technical expertise in key categories
such as beverages, dairy, bakery and
soups, sauces and dressings, helps
us deliver solutions for our customers.
SWEETENERS
• Replace sugar
• Reduce calories
• Match sweetness
• Optimise taste
TEXTURANTS
• Add body and mouthfeel
• Improve shelf-life and stability
• Improve sensory appeal
HEALTH AND WELLNESS
INGREDIENTS
• Replace sugar to reduce calories
while maintaining taste
• Add nutrition through fibre
fortification
STABILISERS
• Improve shelf-life
• Provide stability
32 TATE & LYLE PLC ANNUAL REPORT 2021
OUR YEAR
WHAT’S BEHIND THE GREAT RESULTS
THIS YEAR?
In this challenging year, we kept the team
moving forward with a very clear message:
keep people safe, support customers, keep
the business going. That’s the playbook
we’ve been running all year. By doing that,
and by staying close to our customers
we’ve delivered great results, and I’m
incredibly proud of how our people
responded. I believe our purpose is a key
reason why we grew our business strongly
this year. Our goal of supporting healthy
living by making food and drink healthier
and tastier really motivates our people,
and it’s what our customers and
consumers want. The last four or five
customer CEO conversations I’ve had have
all started with our purpose – it’s only
afterwards that we start talking about
what we’re going to do. And yet our
purpose is about more than just what we
make and sell. I think of Improving Lives for
Generations as the glue that holds us
together. Even though customer demand
held up, it was incredibly tough to deliver,
and when things got tough, our purpose
guided us and kept us on track.
WHAT WILL THE TWO ACQUISITIONS
BRING TO THE BUSINESS?
The two acquisitions we made this year are
both in Asia, and I’m very excited to have
them in our portfolio. Stevia (our acquisition
in China) is very important to us because
it’s the sugar reduction ingredient of choice
in many applications, while tapioca (our
acquisition in Thailand) is the starch of
choice across much of our higher growth
Asian markets. We are delighted to
welcome our new colleagues in these
businesses to the Tate & Lyle family.
This year our people proved just
how agile they can be and, in doing
so, deepened our relationships with
our customers.
Andrew Taylor
President, Asia, Middle East, Africa and Latin America
OUR MARKET
OUR FUTURE
WHAT CHANGES ARE YOU SEEING IN
THE MARKET?
We are certainly seeing some short-term
shifts as a result of the pandemic; for
example there’s a move by consumers to
core brands, people are cooking and eating
a lot more at home, and demand from
the food service sector is much lower.
The timing for when this returns to
pre-pandemic levels is still not clear.
What is clear is that the pandemic has
accelerated people’s desire to eat and
drink more healthily, and we are well-
positioned to benefit from that trend.
We are also seeing demand for ingredients
that reduce cost as people look for better
value without compromising taste. With
our wide reformulation expertise, we’re
well placed to help with this shift. The
sustainability of our ingredients is also
increasingly important, so the work
we’re doing on caring for our planet,
particularly around sustainable
agriculture, is a key priority.
HAS THE PANDEMIC CHANGED HOW
CONSUMERS VIEW FOOD?
To some extent, yes. We’ve all seen,
sadly, that many of those who suffered
most from Covid-19 had key risk factors,
such as diabetes. Before the pandemic,
people mostly understood that what you
ate affected your health, but the
pandemic has really shown people the
importance of ‘getting healthy’ and
‘staying healthy’. That’s why I believe the
trend for sugar and calorie reduction is
set to grow even further as we emerge
from the pandemic as consumers look
for healthier choices when they eat and
drink. Taking sugar and calories out of
food, while still making it taste great, is
a key expertise for us and that’s why I am
excited by what’s ahead.
WHAT DOES YOUR NEW ROLE HEADING
UP ASIA, MIDDLE EAST, AFRICA AND
LATIN AMERICA MEAN FOR THE
FUTURE?
My role was created to accelerate our
growth in some of the most dynamic
markets in the world. While food is
inherently local, our customers in these
markets have similar consumer,
technical and operational challenges
which we can address better as one
region. These markets require fast and
decentralised decision-making, because
that’s how our customers operate, and
that’s the customer-centric approach we
are developing in these regions.
STRATEGIC REPORT
WHAT ARE YOUR PRIORITIES FOR THE
COMING YEAR?
Continue to deliver top-line growth,
integrate our two acquisitions and get even
closer to our customers so we remain their
partner of choice, building on the great
work the team did this year. Customers
work with us because of our technical
expertise in sweetening, mouthfeel and
fortification, the wide range of solutions
we offer and our focus on innovation.
This year, we have also shown we can be
fast and agile, and that we are totally
committed to serving their needs. It’s
been amazing to see what our people
have achieved in incredibly challenging
circumstances – working at home,
educating their kids, worrying about family
and friends and doing their day job. Despite
all this, they’ve found creative ways to meet
customers, ship samples to them, and find
Covid-safe ways of interacting. And it’s
also brought us all closer together as
people. I look back with a lot of pride and
look forward with a lot of confidence.
TATE & LYLE PLC ANNUAL REPORT 2021
33
FOOD & BEVERAGE SOLUTIONS CONTINUED
OUR RESULTS
Volume
+3%
Revenue
Adjusted operating profit
+6%
in constant currency
+12%
in constant currency
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Volume
North America
Asia, Middle East, Africa and Latin America
Europe
Total
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Revenue
North America
Asia, Middle East, Africa and Latin America
Europe
Total
Adjusted operating profit
SUCRALOSE
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Volume
Revenue
Adjusted operating profit
2021
VOLUME
CHANGE
4%
2%
4%
3%
2021
£M
485
269
216
970
177
2021
£M
151
55
2020
£M
CHANGE
%
CONSTANT
CURRENCY
CHANGE
%
470
263
209
942
162
2020
£M
161
63
3%
2%
3%
3%
6%
7%
2%
6%
10%
12%
CONSTANT
CURRENCY
CHANGE
%
(2%)
(9%)
CHANGE
%
0%
(6%)
(12%)
STRONG TOP-LINE GROWTH
Volume increased by 3% with revenue 6%
higher in constant currency at £970 million.
Stronger customer demand for ingredients
used in packaged and shelf-stable foods
for consumption in-home more than offset
reduced demand for ingredients used in
food and drink consumed out-of-home.
Momentum built as the year progressed,
benefiting from growing demand for
healthier food and beverages that are
lower in sugar and calories, with cleaner
labels and added fibre and a gradual
recovery in out-of-home consumption.
Good mix management further contributed
to revenue growth.
Adjusted operating profit was 12% higher
in constant currency at £177 million with
good operational performance and strong
cost discipline. The effect of currency
translation decreased revenue by
£26 million and adjusted operating profit
by £4 million.
As explained earlier, we completed two
acquisitions during the year. In November
2020, we acquired the outstanding 85%
interest in the global stevia sweetener
solutions business of Sweet Green Fields.
In February 2021, we acquired an 85%
holding in Chaodee Modified Starch Co.,
Ltd, a tapioca business based in Thailand.
These acquisitions broaden our customer
offering, strengthen our sweetener
and texturant platforms and expand
our presence in the higher growth
Asian markets.
SUPPORTING CUSTOMERS AND HEALTHY LIVING
pandemic, we wanted to give our
customers more online support, and
so we accelerated the launch of our
Sweetener and Fibre Universities over
the last year. Our three Universities have
attracted many thousands of attendees
worldwide and are another way we
live our purpose of Improving Lives
for Generations.
Through our unique product and
application expertise in sweetening,
mouthfeel and fortification, we work with
our customers to help them create the
next generation of consumer products.
In 2018 we launched the TEXTURE-
VANTAGE® education programme
designed to help our customers navigate
the science of texturants. This suite of
tools included ‘Texture University’ – free
online tutorials open to food formulators
worldwide. With the onset of the
34 TATE & LYLE PLC ANNUAL REPORT 2021
During the year, to increase our focus on
building our business and presence in
higher growth markets, we created a new
single Asia, Middle East, Africa and Latin
America region. This comprises the
regions previously reported as Asia Pacific,
Latin America and Middle East and Africa
(formerly part of Europe, Middle East and
Africa). Note 5 provides the divisional
results for the year ended 31 March 2021
using the previous disclosure model.
North America
Top-line momentum continued with
volume 4% higher. The Covid-19 pandemic
caused significant changes in demand
patterns earlier in the year with strong
demand for in-home consumption offset by
weaker out-of-home demand. The North
American market for food and beverages
saw low single-digit growth in the year
benefiting from stronger in-home
consumption. A focus on customer service
and good performance across categories
such as beverage and confectionery and
nutrition and bakery helped us grow ahead
of the market.
Revenue in constant currency was 6%
higher at £485 million, benefiting from
good mix management with strong growth
from clean label starches, stevia sweeteners
and our fibre portfolio. Strengthening
out-of-home consumption and good
commercial performance saw revenue
growth accelerate as the year progressed.
Asia, Middle East, Africa and
Latin America
Volume was 2% higher with a weaker
first half due to the pandemic and strong
growth in the second half. Revenue
increased by 7% in constant currency to
£269 million helped by good price and mix
management. Asia saw high single-digit
revenue growth, while in Latin America,
constant currency revenue growth
benefited from US dollar-based pricing,
with the region delivering double-digit
revenue growth.
In Asia, revenue growth was strong in
China, where the pandemic recovery
started earlier, and in Australia and New
Zealand, while revenue was slightly lower
in South East Asia. In Latin America,
revenue grew strongly in Brazil where
pandemic restrictions were less stringent,
with Mexico slightly lower due to lockdowns.
Across Latin America, new front-of-pack
labelling rules are leading to increased
reformulation opportunities with
customers, particularly to reduce sugar.
In Middle East and Africa revenue was
in line with the prior year, reflecting the
impact of the pandemic mainly in the
first half, and increased focus on credit
risk management.
Europe
Volume was 4% higher with revenue 2%
higher in constant currency at £216 million.
Volume growth reflected solid demand for
in-home consumption offset by weaker
out-of-home demand. Revenue grew more
slowly than volume as strong texturant
demand impacted mix with customers
looking for bulking and cost reduction in
foods. This was mitigated by higher stevia
and clean label texturants revenue as well
as the benefit of increased revenue from
higher-grade maltodextrin, used in
categories such as baby food, following the
opening of additional capacity at our facility
in Slovakia.
New Products
Revenue from New Products (products
launched in the last seven years) increased
by 21% in constant currency to £133 million,
representing 14% of Food & Beverage
Solutions revenue, up from 12% in the
prior year. Acquisitions, particularly
the Sweet Green Fields stevia business,
helped to accelerate New Product
revenue growth.
Our texturants platform delivered strong
double-digit revenue growth driven by high
demand for our Non-GMO and CLARIA®
line of functional clean label starches.
Revenue from the sweeteners platform
also delivered strong double-digit growth,
particularly in stevia and allulose, as sugar
and calorie reduction across categories
such as beverage, dairy, confectionery
and bakery remained an important focus
for customers and consumers. Revenue
was lower in the health and wellness
platform reflecting reduced consumption
in the sports nutrition category due to
Covid-19 lockdowns.
SUCRALOSE
Robust demand
Sucralose volume was in line with the
prior year with customer orders slightly
higher in the second half despite continued
softness in beverages consumed out-of-
home. Revenue in constant currency
decreased by 2% to £151 million reflecting
STRATEGIC REPORT
EXPANDING OUR PORTFOLIO
THROUGH ACQUISITION
In November 2020, we acquired the
stevia business, Sweet Green Fields.
This brought us an extensive portfolio
of stevia sweetener solutions – one
of the world’s fastest growing
low-calorie sweeteners – and a
production facility in China and a fully
integrated supply chain. Then, in
February 2021, we completed the
acquisition of an 85% shareholding in
Chaodee Modified Starch, offering a
range of tapioca-based texturant
solutions from a production facility in
Thailand. Both acquisitions broaden
our portfolio, expand our customer
offering, strengthen our sweetener
and texturant platforms, enhance our
technical capabilities, and expand our
presence in the Asia market.
customer mix and pricing pressure.
We expect further modest pricing pressure
to continue in the 2022 financial year.
Adjusted operating profit at £55 million
was 9% lower in constant currency
reflecting de-leverage from lower revenue
and one-off production costs. Currency
translation decreased revenue by
£6 million and adjusted operating profit
by £2 million.
TATE & LYLE PLC ANNUAL REPORT 2021
35
PRIMARY PRODUCTS
AGILITY AND RESILIENCE
IN A TOUGH YEAR
Jim discusses how Primary Products
managed through a very difficult year and
reacted quickly to a rapidly changing
business environment.
We sell high-volume
products into the food
and beverage, and paper
and packaging industries,
mainly in North America.
PARTNER AND SELL
The two main markets we operate in
are bulk sweeteners, used mainly in
carbonated soft drinks, and industrial
starches. Our customers come to us
for quality, service and price.
SOME OF OUR INGREDIENTS
• Nutritive sweeteners, such as high
fructose corn syrup and dextrose
• Industrial starches for paper,
packaging and industrial adhesives
• Acidulants such as citric acid
• Commodities, such as corn gluten
feed and meal for animal nutrition,
as well as corn oil
36 TATE & LYLE PLC ANNUAL REPORT 2021
OUR YEAR
AT THE START OF THE YEAR,
LOCKDOWNS IN THE US CAUSED MAJOR
DISRUPTION TO YOUR MAIN MARKETS
– HOW DID YOU DEAL WITH THAT?
It was an extraordinary time. All the things
you can’t control shifted from one extreme
to another and back again – not just in the
US as a whole, but from state to state. And
so two words come to mind – agility and
resilience. Our people had to adjust
incredibly quickly under very challenging
circumstances to keep each other safe,
keep our business running and serve our
customers’ changing needs. While demand
for our sweeteners was lower due to the
reduction in the out-of-home soft drinks
market, and office and school closures
meant demand for our paper starches was
also down, our packaging starches grew
strongly as online shopping boomed. And,
with more people cooking at home, we saw
higher demand for corn oil.
HOW DID YOU SUCCEED IN SERVING
CUSTOMERS, DESPITE LOCKDOWN AND
RESTRICTED TRAVEL?
We rapidly switched to video meetings and
virtual interactions, which actually led to
more face-time with customers because
we didn’t have to travel. We also went
virtual to provide operational support.
In our industrial starch business, for
example, we are in many cases an
extension of our customers’ plant
engineering team, helping them optimise
their processes while using our products.
Throughout the year, there are multiple
examples of our people solving customer
manufacturing issues remotely using video
technology, with our technical service
teams working from home partnering with
customer teams in their plants to make
recommendations, tweak starch input
variables, and help troubleshoot problems.
For those few essential on-site visits, we
worked in partnership with our safety and
pandemic response teams to implement
Covid-safe customer visit protocols, so our
STRATEGIC REPORT
We rapidly switched to virtual
meetings which actually led to
more face-time with customers.
Jim Stutelberg
President, Primary Products
OUR MARKET
OUR FUTURE
THE MARKET CHANGED
SIGNIFICANTLY THIS YEAR – DOES
THAT AFFECT YOUR LONGER-TERM
STRATEGY IN PRIMARY PRODUCTS?
A lot has changed – some of it is
temporary, while some will drive more
permanent changes that we’ll need to
consider. And we don’t have all the
answers now – no one does. How quickly
will out-of-home consumption recover?
How will the move to home working
affect our paper starches? Will the trend
for online shopping move even faster?
But then, our strategy has always been
about asking these kinds of questions,
analysing our markets, and planning for
many scenarios. If anything, the
pandemic has emphasised just how
important our strategy is – optimising
product and customer mix, driving
operational efficiencies through our
continuous improvement programme,
and driving long-term value creation by
being very intentional about identifying
new and profitable end-markets for our
products, whether that’s with new
customers or for new uses.
WHAT DOES THE FUTURE HOLD?
We’ve learnt so much this year. We’ve
found new, smart and efficient ways of
working, and we’ve learnt how effective we
can be in a non-traditional working model,
with some people at home, some at plants,
some doing both. These learnings will last
far beyond the pandemic. We’ve also learnt
a lot about ourselves, about just how agile
and resilient we are, which will serve us
well in the years ahead. We’ve also learned
the power of focusing on what’s important.
One area that I am passionate about is
sustainability. All the products we make
are plant-based and we take our
responsibility to look after our natural
resources very seriously. When I look at
the co-generation project in Lafayette,
Indiana, USA which will significantly drive
down greenhouse gas emissions at that
site, and our industry-leading sustainable
corn programme with Truterra LLC, it
gives me great pride. And looking ahead
we can do more, such as helping people
move out of plastic and into paper-based
packaging, and increasing the use of
bio-based products. These things matter
to our customers and they matter to us. We
have some big challenges for sure, but our
agility and resilience this year have shown
we have the team and the capabilities
to succeed.
people could go onto our customers’
sites and could help them safely and
effectively. And our customers really
valued our can-do attitude – one of
our largest customers, for example,
awarded us preferred supplier status for
the first time. I’m incredibly proud of how
the team kept each other safe and took
care of our customers in what was
a very difficult year.
THE TEAM STAYED INCREDIBLY
FOCUSED DESPITE THE CHALLENGES.
WHAT KEPT THEM GOING?
Our purpose of Improving Lives for
Generations is the starting point for
everything we do, and, at a leadership
level, we proved that through the
pandemic. We were totally clear that the
number one priority was to keep people
safe and healthy, mentally as well as
physically. Seeing this focus on our
purpose in action was so important for
our people. Our purpose also caused
us to reflect on those parts of our
communities hardest hit by lockdowns.
For example, our Black Employee
Network, which I’m proud to sponsor,
had the idea of marking Martin Luther
King Day by getting volunteers to phone
elderly folks in Chicago, check they had
food in their pantries, and if not, order it
for them. We also spent time helping to
pack and deliver food parcels for our
food bank partners. There are
still millions of people in the world,
including in the US, who aren’t sure
where their next meal is coming from,
and the economic effects of the
pandemic have only made that worse.
Helping prevent hunger is totally aligned
with our purpose, and our efforts are
something I feel really good about.
TATE & LYLE PLC ANNUAL REPORT 2021
37
PRIMARY PRODUCTS CONTINUED
OUR RESULTS
Volume
(5%)
Revenue
Adjusted operating profit
(2%)
in constant currency
+5%
in constant currency
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Volume
North American Sweeteners
North American Industrial Starches
Total Primary Products
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Revenue
Adjusted operating profit
Sweeteners and Starches
Commodities
Total Primary Products
2021
VOLUME
CHANGE
(7%)
(6%)
(5%)
2021
£M
1 686
109
49
158
2020
£M
1 779
CHANGE
%
(5%)
CONSTANT
CURRENCY
CHANGE
%
(2%)
133
25
158
(18%)
87%
(1%)
(13%)
98%
5%
SPECIALIST STARCHES SUPPORT ONLINE SHOPPING BOOM
During the pandemic, people all over
the world have been shopping more
online, driving huge demand for
packaging. As part of our long-term
strategy to move from declining to
growing markets, we’ve been shifting
our focus from printing and writing
paper to packaging, and this really
helped this year with the volume of our
starches used in packaging up by 19%.
And it’s not just for cardboard boxes,
we’ve also seen growth in speciality
packaging – packaging that in itself
conveys a marketing message, like
the high-quality boxes for high-end
technology products. These require
specialist starches, and customers
come to us for our technical expertise,
and for the sustainability and
recyclability of our starches which
support the sustainability credentials
of their packaging.
RESILIENT PERFORMANCE
Volume was 5% lower with sweetener
volume 7% lower and industrial starch
volume 6% lower, both reflecting the
impact of the Covid-19 pandemic. Revenue
at £1,686 million decreased by 2% in
constant currency, reflecting lower volume
mitigated by improved mix and higher
Commodities revenue where co-product
prices were higher. Adjusted operating
profit was 5% higher in constant currency
at £158 million. Currency translation
decreased revenue by £59 million and
adjusted operating profit by £9 million.
Adjusted operating profit in Sweeteners
and Starches was 13% lower in constant
currency. Actions to reduce costs across
the business, especially in operations, and
further productivity benefits were
successful in mitigating some of the
impact of lower volume. Adverse US winter
weather increased costs by £6 million in
the last months of the year. Profit for the
year also benefited from transactional
foreign exchange in Latin America of
£3 million. In the prior year, adjusted
operating profit included profit of
£7 million from a non-core, savoury
ingredients business closed during that
year. Commodities adjusted operating
profit at £49 million was £26 million higher
in constant currency.
Sweeteners
Volume was 7% lower reflecting reduced
out-of-home consumption (representing
around 30% of sweetener consumption) as
lockdowns in North America impacted
consumer consumption patterns in the
early part of the year. The pandemic also
impacted consumption in Mexico, with
export volume lower. As the year
progressed, out-of-home consumption
began to recover but demand remains
below pre-pandemic levels.
38 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
The 2021 calendar year bulk sweetener
pricing round was more competitive than
in previous years delivering slight unit
margin compression which we expect to
mitigate with our continuing productivity
programme.
Industrial Starches
Volume was 6% lower reflecting lower
demand for paper, partially mitigated
by stronger demand for packaging.
The pandemic resulted in lower demand
from the printing and writing paper
industry following the closure of many
schools and offices. Demand for printing
and writing paper improved later in the
year but remains below pre-pandemic
levels. In packaging, demand was higher,
benefiting from increased online shopping.
Our strategy over recent years
to diversify away from the printing and
writing paper market towards other
markets such as packaging helped to
mitigate the impact of these changes.
Commodities
Commodities delivered a record year with
adjusted operating profit of £49 million,
£26 million higher in constant currency.
Co-product recoveries were significantly
higher benefiting from good market
conditions including increased market
demand and strong prices across our
co-products, and in particular for corn
oil prices.
USING EVERY BIT OF THE CORN KERNEL
Nothing is wasted in the corn wet milling
process. Brad Morrison, Director, Global
Raw Materials Procurement explains
how each part of the kernel is used.
‘After steeping in water, the softened
kernels go through various milling
processes to separate out the starch,
fibre, gluten and oil. Starch is the largest
component and we extract it from the
endosperm to use in our food and
industrial ingredients. Protein-rich
gluten, also from the endosperm, goes
into corn gluten meal, used in aquaculture
feed and pet food. Fibre from the hull is
used in corn gluten feed for livestock,
and we sell oil from the germ to the food
industry. We even use the steep-water –
it contains nutrients used in animal feed
and fermentation. In these resource-
constrained times, it’s good to know
we’re being efficient and sustainable.’
STARCH
(food and
industrial
ingredients)
58%
GLUTEN FROM
ENDOSPERM
(corn gluten meal)
4%
PERICARP – HULL
AND FIBRE
(corn gluten feed)
22%
WATER
13%
GERM (corn oil)
3%
TATE & LYLE PLC ANNUAL REPORT 2021
39
INNOVATION AND COMMERCIAL DEVELOPMENT
PURPOSE AT THE
HEART OF INNOVATION
Victoria joined Tate & Lyle in November
2020. Here she shares her initial
impressions about the business and
reviews ICD’s year.
Innovation is central to
our strategy. We develop
new ingredients and
applications for our
customers, and new
ways of doing things that
make our business even
more efficient.
THINK AND CREATE
Innovation and Commercial
Development (ICD) consists of a
number of areas working together
as one team:
• Research and development
• Solution innovation
• Platform management
• Nutrition
• Regulatory
• Open innovation
• Global marketing
• Process technologies
New Products revenue
£133m
Increase in value of
innovation pipeline
+18%
Patents granted
57
40 TATE & LYLE PLC ANNUAL REPORT 2021
OUR YEAR
HOW HAVE YOU FOUND JOINING
TATE & LYLE DURING LOCKDOWN?
I’m amazed at how well it’s gone despite
only having met in person a few of the
people I work with! And that’s because of
the calibre of people at Tate & Lyle, and
how they’ve integrated me into the team.
The breadth of talent across the whole
company is outstanding. There is a real
mix of experience and backgrounds which
brings a lot of diverse thinking and makes
the business vibrant and interesting. The
other thing that I’ve found inspiring is the
absolute focus on safety, more so than I’ve
experienced before. And not just safety at
work, but also driving safely and safety at
home. That really speaks to the care
people have for each other.
HOW HAS ICD SUPPORTED OUR
PURPOSE, IMPROVING LIVES FOR
GENERATIONS, THIS YEAR?
Our purpose is at the heart of what we do,
inspiring us to improve lives all day, every
day. In particular, it’s about supporting
healthy living, and whether it’s through
the launch of our Sweetener and Fibre
Universities during the year, or our online
webinars, we are constantly looking for
new ways we can support our customers.
This close relationship with our customers
is also helping to deliver results with a 21%
growth (in constant currency) in revenue
from New Products this year.
As well as looking after the present, ICD’s
role is to design what the future looks like.
And in line with our purpose we need to do
that in a sustainable way. The ingredients
we design, the processes we design –
everywhere we have an impact we need
to consider sustainability. That’s why I’m
particularly pleased about our new
acquisitions this year. With stevia and
tapioca, we’re not only diversifying the raw
materials we use, but also providing more
plant-based options for our customers
and, in turn, helping consumers have
healthier, more balanced diets.
Our passion is to help our
customers develop delicious
and nutritious products, while
ensuring we are respectful
of the planet we live in.
Victoria Spadaro Grant
President, Innovation and Commercial Development
OUR MARKET
HOW HAS COVID-19 AFFECTED THE
MARKET THIS YEAR?
I’d point to three key things. One is a
polarisation between premium and
value. With more people eating at home
during lockdown, we saw an increase in
some premium sectors. At the same
time, with others worried about their
jobs or struggling financially, there was
also an increase in demand for
affordable food – such as smaller pack
sizes of favourite products. The second
is a resurgence of established,
traditional brands. In times of crisis,
many people revert to brands they trust.
With pressure on supply chains and
retailers having trouble keeping their
shelves full – whether online or in stores
– many food companies rationalised by
reducing the number of products they
offer. As a result, there was less desire
to innovate and customer launches
slowed down. Customer innovation
will increase as we move beyond the
pandemic, but it won’t happen overnight.
The third trend is again two opposites –
indulgence and wellbeing. As we come
out of the pandemic, we’ll see people
wanting to celebrate and indulge while,
at the same time, Covid-19 has made
people realise the importance of a
healthy diet to wellbeing. And that’s set
to continue.
WITH FEWER CUSTOMER LAUNCHES
AS A RESULT OF COVID-19, HOW HAS
THE ICD PIPELINE SUCCEEDED IN
GROWING?
Our innovation pipeline is fuller than
ever and grew in value by 18% during the
year. That’s because we collaborate very
closely with our customers throughout
the innovation process, and our
solutions and technical expertise give
them what they need – low-calorie,
reduced-sugar, clean label, non-GM and
plant-based options. I’m particularly
proud of the nutrition team’s launch this
year of our new digital Nutrition Centre.
It offers expert insights, research and
educational tools for customers,
scientists, health professionals – in fact
anyone who’s interested. It’s an open
platform which is rare in our industry,
and so, I believe, it shows Tate & Lyle as
a thought leader in the field, while
helping us develop even closer
relationships with customers.
OUR FUTURE
WHERE DO YOU SEE OUR BIGGEST
OPPORTUNITIES?
Customers must be our focus, and
food and beverages our obsession.
The team has worked really hard to find
creative ways to help customers during
lockdown, and we’ve got closer to them
as a result. As we come out of the
pandemic, we need to capitalise on
those relationships and make sure we’re
even more customer-focused than
before. And we need to step up how we
think about food, to become even more
focused on the end product. Food is
about taste, wellbeing, conviviality – if
we can demonstrate more of that, we’ll
have an even greater meeting of minds
with our customers.
STRATEGIC REPORT
TATE & LYLE NUTRITION
CENTRE: SHARING OUR
RESEARCH
The Tate & Lyle Nutrition Centre is a
new online hub launched in February
2021. Developed by our Global
Nutrition Team, the Centre makes it
easy for customers, scientists, health
professionals and consumers to
access authoritative research on
ingredients that can help address
formulation and public health
challenges. As well as technical
papers, visitors can find articles on
topics from keto diets to gut health to
immunity, plus easy-to-understand
infographics and videos.
Kavita Karnik, Global Head, Nutrition
& Regulatory Affairs at Tate & Lyle,
said: ‘With our new Centre, we have
made it easier for our customers and
the wider industry, as well as peers in
the nutrition and science world, to
access high-quality research content
that informs product development,
adds to the evidence base, and
supports healthy living.’
Read more online at
www.tateandlyle.com/nutrition-centre
TATE & LYLE PLC ANNUAL REPORT 2021
41
GLOBAL OPERATIONS
FINDING SOLUTIONS
DESPITE UNCERTAINTY
Melissa talks about how the team has
worked to meet the rapidly changing
needs of both Food & Beverage
Solutions and Primary Products,
and their customers.
SOURCE AND MANUFACTURE
We run our plants and manage the
global supply chain to ensure our
ingredients reach our customers on
time and to the right specification.
• Raw material sourcing
• Manufacturing
• Quality
• Procurement
• Logistics
• Customer service
• Continuous improvement
• Environment, health and safety
We make and deliver
high quality ingredients
to our customers around
the world, focusing
relentlessly on safety,
quality and productivity.
42 TATE & LYLE PLC ANNUAL REPORT 2021
OUR YEAR
DESPITE ALL THE CHALLENGES, IT HAS
BEEN A SUCCESSFUL YEAR – HOW DID
YOU DO IT?
The team, the team, the team!
In operations, circumstances change all the
time, so you have to be solutions finders
with a can-do attitude. The pandemic
caused a lot of change very quickly, but the
team kept positive, and repeatedly found
solutions for keeping each other safe and
our customers served while continuing to
deliver our ambitious sustainability and
productivity programmes. Throughout the
year our fundamental principles of working
as partners, supporting one another and
our customers, have been front and centre,
alongside our guiding light – our purpose.
And, since our plants are often at the heart
of their local communities, it was no
surprise to see our teams supporting family
members on the frontline with access to
critical PPE as well as organising help for
local food banks.
HOW DID YOU KEEP PEOPLE SAFE
WHILE STILL RUNNING THE PLANTS?
We acted early. Most challenging was the
incredible uncertainty – no one knew what
was coming; no one knew the full extent
of the consequences of the virus. So, at
a global level, we put together a set of
principles based on science and data,
while empowering site leaders and their
pandemic teams to use local data, in
real-time, to adjust their response within
those principles, and always with the core
aim of keeping each other safe while
maintaining operations and the essential
service of providing food ingredients to our
customers. We said we would be cautious
– and we were. We said we’d need to learn
and build as the year progressed – and
we did. Our local leaders really made the
difference by localising our response –
it had to be that way, because Covid-19
affected every country, every state, every
town differently.
I’m extremely proud of how
our team has played its part in
supporting the food supply chain
during the pandemic.
Melissa Law
President, Global Operations
accelerate new product development.
The tapioca facility in Thailand
complements our US-based manufacturing
capabilities and allows us to establish
ourselves as a major supplier in Asia. I am
excited about the investment plans that
include increasing the supply of new
products for Food & Beverage Solutions.
WHAT HAVE YOU LEARNT THIS YEAR
THAT YOU’LL BE TAKING FORWARD?
Not so much a learning, but a good
reminder this year has been the critical
role that operations plays with respect to
keeping essential goods and services
available – and our team was right at the
centre of keeping food on the tables of
families around the world. The pandemic
also accelerated our acceptance and use
of technologies to maintain operations
without losing connectivity to our business
partners and our customers. Finally, the
pandemic has helped us all to confront
more directly the reality of the inequalities
that still remain in our society. This led us
to take a closer look at what we can do
to change them. As a Champion for both
our Women’s and our Black Employee
Networks, I am pleased with the progress
we’ve made in increasing the participation
of under-represented people in
operational and engineering roles over the
past several years. But we need to do
more, not only to progress a wider equity,
diversity and inclusion agenda, but to
ensure our operations reflect the
communities around us. We are not where
we want to be yet but, inspired by our
purpose, I am confident we can and will
make it happen.
CUSTOMER DEMAND CHANGED ALMOST
OVERNIGHT – HOW DID YOU DELIVER?
With large-scale processing plants it’s
not easy to react quickly to production
changes, but the work we’ve done over the
last few years to improve our agility and
productivity helped us navigate the year
well. And our operations team already had
a winning mindset: one that continuously
looks for better ways to serve our
customers with quality product while
ensuring the safety of our people and our
communities. We realised quickly that we
had to work differently to maintain strong
customer service, so we used technology
and new ways of working to find solutions,
efficiently and effectively, and our
customers really appreciated that.
YOU SET SOME AMBITIOUS LONG-TERM
ENVIRONMENTAL TARGETS AT THE
START OF THE YEAR – WHAT PROGRESS
HAVE YOU MADE?
It’s all on track! Of course, when the
pandemic hit we had to pause some capital
projects, such as our new co-generation
system in Lafayette, Indiana, USA to
assess how to continue construction work
safely, but we soon got them up and
running again. We continued to support
1.5 million acres of sustainable corn
through our sustainable agriculture
programme, and we continued investing in
our Journey to Environment, Health and
Safety (EHS) Excellence, because nothing
less than excellence in EHS and quality
across our operations will do.
OUR FUTURE
HOW WILL YOU INTEGRATE THE NEW
ACQUISITIONS?
I’m excited because they further diversify
our portfolio of plant-based food
ingredients, while having manufacturing
capabilities that enhance our own. We
already had a relationship with the stevia
business in China, but we now have the
opportunity to scale it to serve a much
larger global customer base and
STRATEGIC REPORT
COVID-19 PROTOCOLS
Local site leadership teams know
their plants better than anybody, so
they had autonomy to make Covid-
compliant arrangements for their own
sites, in line with guidance from the
Global Pandemic Response Team.
When it came to social distancing,
some sites had to make significant
changes to the configuration of control
rooms, to ensure operators could
work safely apart from each other;
while in other areas, taped-out areas
on the floor were enough. Many of our
sites introduced rotating work
schedules to keep people safely
distanced while making sure we had
enough people on site to run operations.
Some procedures, though, are
universal. For example, everyone had
their temperature taken before
entering a facility, and we set up
sanitation stations at every location.
TATE & LYLE PLC ANNUAL REPORT 2021
43
CHIEF FINANCIAL OFFICER’S INTRODUCTION
DRIVING RESULTS IN
A PURPOSEFUL WAY
From our new Chief Financial Officer,
Vivid Sehgal, who joined Tate & Lyle
in March 2021.
FINANCIAL HIGHLIGHTS
Adjusted diluted
earnings per share
+12%
in constant currency
Adjusted free
cash flow
£250m
increase of £3 million
Return on
capital employed
17.2%
decrease of 30bps
44 TATE & LYLE PLC ANNUAL REPORT 2021
Vivid talks about the
year, why he joined
and shares his first
impressions along with
some thoughts for the
year ahead.
FIRST IMPRESSIONS
WHAT ATTRACTED YOU TO
TATE & LYLE?
The purpose of Improving Lives for
Generations is one of the main reasons I
joined. We help our customers improve
people’s lives by making food and drink
healthier and that’s something I believe
passionately in. And the Company has
many other outstanding attributes: a
strong growth profile with an emphasis
on innovation; a healthy balance sheet
with opportunities for both organic and
inorganic growth especially in emerging
markets; a strong Board and
management team; and a genuine focus
on inclusion and respect. Tate & Lyle is
a company that really lives and
breathes its purpose. In short, the
Company seemed very aligned to my
own personal values.
WHAT HAVE YOU OBSERVED IN YOUR
FIRST FEW MONTHS?
Thankfully, that things were exactly as
I thought they would be! And I don’t say
that lightly. I’ve worked in different
businesses over 30 years and it’s great
to work for a company with a strong
business model and that’s so thoughtful
in how it operates. And by that I mean
that the purpose of the Company really
does permeate how we operate and
what we are trying to achieve. And, at
Tate & Lyle, the finance function is a real
partner to the business, challenging how
the Company operates and adding value,
and I’m delighted to be able to contribute
to that.
OUR YEAR
COULD YOU COMMENT ON TATE & LYLE’S
FINANCIAL POSITION?
I’ve been fortunate to come into a company
with strong financial discipline. It is also
prudent – doing the pension ‘buy-in’ the
2020 financial year to save cash while
protecting people’s pensions, for example;
or raising debt at record low interest rates
this year in case it was needed (which it
wasn’t!). But it also knows when and where
to invest, such as completing two
acquisitions funded by the free cash flow
generated in the year. As a result, the
balance sheet remains strong.
GIVEN THE DECLINE IN OUT-OF-HOME
CONSUMPTION, HOW HAS TATE & LYLE
ACHIEVED SUCH STRONG RESULTS?
At first glance, it looks like Primary
Products was hit by the impact of
lockdowns on the out-of-home market,
and that Food & Beverage Solutions made
up for it. But there’s far more to it than
that. Food & Beverage Solutions was also
affected by the reduction in out-of-home
consumption through exposure to the food
service market, such as restaurants and
bars. If you look at the detail, you’ll see that
Primary Products, while helped by a very
strong performance from Commodities,
also benefited from the strategy it has
pursued for a number of years around
diversifying its product portfolio and
targeting new and growing markets.
Similarly, in Food & Beverage Solutions,
the strategy of focusing on creating health
and wellness solutions is paying off as
people are increasingly looking for
healthier options when they eat and drink.
We also can’t forget the tremendous
contribution from Global Operations for
delivering above and beyond on the
productivity and cost agenda as well as
great flexibility to keep customers served.
It really has been a Group-wide team
effort, which is fantastic to see.
STRATEGIC REPORT
Strong financial discipline gives
us the financial strength and
flexibility to invest in the future.
Vivid Sehgal
Chief Financial Officer
CAPITAL ALLOCATION
FRAMEWORK
We allocate capital as set out
below. In doing so, we aim to
maintain our investment-grade
credit rating.
INVEST IN ORGANIC GROWTH
INVEST IN ACQUISITIONS, JOINT
VENTURES, PARTNERSHIPS
MAINTAIN A PROGRESSIVE
DIVIDEND POLICY
RETURN SURPLUS CAPITAL
TO SHAREHOLDERS
and flexibility the team has shown, and
this stepping up to take responsibility,
are things I’d certainly like to see more
of in the coming year.
WHAT EXCITES YOU MOST ABOUT THE
FUTURE AND YOUR NEW ROLE?
Tate & Lyle is emerging from the
pandemic in a position of real strength.
Not only has the Company done a great
job of delivering what it said it would do
over the last few years, but the business
itself, with its focus on health and
wellness solutions, has strong
opportunities for growth, especially
in the higher growth markets of Asia,
Middle East, Africa and Latin America.
But more than that, the companies of the
future are, I believe, those that want to
do the right thing, and that have a strong
purpose guiding who they are and what
they do. Taking care of people is a
hallmark of a strong company, and
Tate & Lyle not only takes care of its
own, but extends this attitude of care
beyond the walls of the Company and
into its local communities and wider
society. A Company that’s not just about
driving results, but driving them in a
good and sustainable way – what could
be better than that?
WHERE ARE YOU INVESTING CAPITAL
AND WHY?
There are two key areas – growth
and sustainability, which together will
enable a strong future for the Company.
As I mentioned, on the growth side,
Tate & Lyle made two acquisitions this
year, and I’m delighted to be able to
contribute my experience in this area
as we integrate those acquisitions and
look for new opportunities. On the
sustainability side, Tate & Lyle is in the
process of a multi-year investment of
more than US$150 million to reduce
greenhouse gas emissions and improve
operational efficiency. This is all part of
delivering our commitment to eliminate
the use of coal in our operations by 2025,
and to reduce our absolute Scope 1 and
2 greenhouse gas emissions by 30%
by 2030.
LOOKING AHEAD
WHAT POSITIVES WILL YOU TAKE
FORWARD FROM THIS PANDEMIC
YEAR?
From what I’ve observed, right across
Tate & Lyle, people have adapted
amazingly well to the move to working
from home for office-based staff and, for
plant-based staff, the move to smaller
crews and new working protocols. One
cultural shift that’s been very beneficial
is the devolving of decision-making
throughout the business. Local
managers have had to make more
decisions and people have had to trust
each other to get things done – and they
did. The finance team had to work
harder to keep controls strong, and to
make sure nothing went wrong, and to
change the way they worked since the
simple act of being in a room with each
other wasn’t possible. While we’re all
looking forward to being in the office
together – and I can’t wait to meet my
team in person! – the creativity, agility
TATE & LYLE PLC ANNUAL REPORT 2021
45
GROUP FINANCIAL REVIEW
SUMMARY OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021 (AUDITED)
YEAR ENDED 31 MARCH1
CONTINUING OPERATIONS UNLESS STATED OTHERWISE
Revenue
Adjusted operating profit
– Food & Beverage Solutions
– Sucralose
– Primary Products
– Central
Adjusted operating profit
Net finance expense
Share of profit after tax of joint ventures
Adjusted profit before tax
Exceptional items
Amortisation of acquired intangible assets
Profit before tax
Income tax expense
Profit for the year
Earnings per share (pence)
Adjusted diluted
Diluted
Cash flow and net debt
Adjusted free cash flow
Net debt
2021
£M
2 807
2020
£M
2 882
CHANGE
%
(3%)
CONSTANT
CURRENCY
CHANGE
%
1%
177
55
158
(51)
339
(30)
26
335
(42)
(10)
283
(30)
253
61.2p
53.8p
250
417
162
63
158
(52)
331
(28)
28
331
(24)
(11)
296
(51)
245
57.8p
52.1p
247
451
10%
(12%)
(1%)
1%
2%
(7%)
(6%)
1%
(69%)
5%
(4%)
39%
3%
6%
3%
12%
(9%)
5%
-%
7%
(9%)
7%
6%
(73%)
4%
1%
40%
10%
12%
10%
1 Adjusted results and a number of other terms and performance measures used in this document are not directly defined within IFRS. We have provided descriptions of the various metrics
and their reconciliation to the most directly comparable measures reported in accordance with IFRS and the calculation (where relevant) of any ratios in Notes 1 and 4.
46 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
Sales from continuing operations of
£2,807 million were 3% lower than the
prior year (1% higher at constant currency).
On a statutory basis, profit before tax
from continuing operations decreased
by £13 million to £283 million reflecting
increased profit from operations more
than offset by a higher exceptional charge
of £42 million (2020 – charge of
£24 million).
Statutory diluted earnings per share
from continuing operations increased by
1.7 pence to 53.8 pence due to the impact of
increased earnings and a lower effective
tax rate of 10.9% (2020 – 17.1%), mitigated
by higher net exceptional charges.
Adjusted profit before tax from continuing
operations at £335 million was £4 million
higher than the prior year (6% in constant
currency). Adjusted diluted earnings per
share from continuing operations
increased by 3.4 pence to 61.2 pence (12%
in constant currency) reflecting higher
adjusted profit before tax.
CENTRAL COSTS
Central costs, which include head office
costs and certain treasury and legal
activities, were 1% lower (in line with the
prior year in constant currency). This
reflected continued strong discipline on
overhead costs but was largely offset by
higher self-insurance costs and additional
costs incurred as we adapted to new ways
of working during the pandemic and
positioned the Group to exit the pandemic
a stronger business.
NET FINANCE EXPENSE AND LIQUIDITY
Net finance expense at £30 million was
7% higher. This reflected lower interest
income on cash balances, the loss of
non-cash finance income following the
‘buy-in’ of the main UK defined benefit
pension scheme during the prior year and
the issue of US$200 million of US private
placement debt in August 2020, which was
issued to increase the Group’s access
to liquidity.
In May 2020, we extended the maturity of
our committed but undrawn US$800 million
revolving credit facility by one year to
2025. Then, in March 2021, we extended
US$700 million of this facility by a further
year to 2026. The pricing of this facility
is linked to the delivery of our 2030
environmental targets for Scope 1 and 2
greenhouse gas emissions, water use and
beneficial use of waste. As set out above, in
August 2020, we issued US$200 million in
US private placement debt comprising
US$100 million 2.91% notes maturing in
2030 and US$100 million 3.01% notes
maturing in 2032.
As a result, we have strong liquidity
headroom with access to US$1.3 billion
through cash on hand and a committed and
undrawn revolving credit facility. Leverage
remains low with a net debt to EBITDA
ratio at 31 March 2021 of 0.8x (0.6x on
a covenant basis).
SHARE OF PROFIT AFTER TAX OF JOINT
VENTURES
The Group’s share of profit after tax of
joint ventures of £26 million was 6%
lower (7% higher in constant currency),
reflecting a weakening of the Mexican
peso. In Almex, the Group’s joint venture
in Mexico, weaker sweetener demand was
offset by transactional foreign exchange
benefit of £4 million. In DuPont Tate & Lyle
Bio Products (Bio-PDOTM) weaker demand
for high-performance textiles and
cosmetics, both impacted by the pandemic,
saw volume and profits lower than the
prior year.
EXCEPTIONAL ITEMS
The Group recorded a net exceptional
charge of £35 million, comprising £42
million of exceptional items included in
profit before tax and a £7 million credit
included as an exceptional item within
tax. Such items principally included
the following:
• £20 million of restructuring charges
(£12 million cash costs and £8 million
non-cash costs) for the previously
announced simplification and
productivity programme.
• £19 million of costs (all cash costs),
principally for external advisors, for
work performed in exploring the
potential to separate the Food &
Beverage Solutions and Primary
Products businesses.
• A £3 million net charge related to
historical legal matters in the US,
including income recorded for the
favourable settlement of an insurance
claim.
• The exceptional credit of £7 million
within tax related to the release of an
uncertain tax provision in the US, which
had been recorded at the time of the
Group’s exit of Sucralose manufacturing
in Singapore. At that time, the costs
arising from the closure of Singapore
and the associated tax were recorded as
exceptional items.
The exceptional cash outflows for the
period were £32 million, comprising
£19 million of cash outflows related to
charges recorded in the current period
and £13 million of cash outflows resulting
from exceptional costs recorded in the
prior years.
In the prior year, the Group recorded
a net exceptional charge of £24 million
which comprised £19 million of
restructuring costs related to the
productivity programme and a £5 million
charge related to the decision to exit
a small non-core savoury business.
The Group is in the third year of a six-year
programme to generate productivity
benefits of US$150 million by 31 March
2024. For the first half of the year the
Group reported spend of US$22 million.
US$12 million of this has now been
classified as spend relating to the potential
separation of the two businesses and as
such the total spend for the year on
productivity projects other than this was
US$15 million (£12 million). This brings the
total to date to US$48 million. We now
expect to spend less than the previously
announced estimate of around
US$75 million in delivering the targeted
benefits of US$150 million.
TATE & LYLE PLC ANNUAL REPORT 2021
47
GROUP FINANCIAL REVIEW CONTINUED
CASH FLOW AND NET DEBT
Adjusted operating profit from continuing operations
Adjusted for:
Adjusted depreciation and adjusted amortisation2
Share-based payments charge
Changes in working capital and other non-cash movements
Net retirement benefit obligations
Capital expenditure
Net interest and tax paid
Adjusted free cash flow
Net debt
YEAR ENDED 31 MARCH1
2021
£M
339
165
8
(24)
(8)
(152)
(78)
250
2021
£M
417
2020
£M
331
161
14
2
(21)
(166)
(74)
247
AT 31 MARCH
2020
£M
451
1 Adjusted results and a number of other terms and performance measures used in this document are not directly defined within IFRS. We have provided descriptions of the various metrics
and their reconciliation to the most directly comparable measures reported in accordance with IFRS and the calculation (where relevant) of any ratios in Notes 1 and 4.
2 Total depreciation of £148 million (2020 – £145 million) and amortisation of £33 million (2020 – £35 million) less £6 million (2020 – £8 million) of accelerated depreciation recognised in
exceptional items and £10 million (2020 – £11 million) of amortisation of acquired intangible assets.
TAXATION
The adjusted effective tax rate was 14.3%
(2020 – 17.9%). The rate was lower than the
prior year reflecting the release of certain
tax provisions following expiry of statute of
limitations as well as recognition of certain
tax credits in the US.
Given the release of certain tax provisions
noted above we now expect the adjusted
effective tax rate for the year ending
31 March 2022 to be higher than the year
ended 31 March 2021.
The reported effective tax rate (on
statutory earnings) was 10.9% (2020 –
17.1%), this was lower than the adjusted
effective tax rate due to the impact of the
factors highlighted above and the impact
of the £7 million tax credit recorded as an
exceptional item.
EARNINGS PER SHARE
Adjusted basic earnings per share
increased by 6% (12% in constant currency)
to 61.9 pence and adjusted diluted earnings
per share at 61.2 pence were 6% higher
(12% in constant currency). Statutory
diluted earnings per share increased by
1.7 pence to 53.8 pence reflecting the items
above and higher exceptional charges in
the year.
DIVIDEND
The Board is recommending a 1.2 pence
or 5.8% increase in the final dividend to
22.0 pence (2020 – 20.8 pence) per share,
bringing the full year dividend to
30.8 pence per share (2020 – 29.6 pence),
an increase of 4.1%. This increase brings
dividends back to a level consistent with
the Board’s progressive dividend policy,
notwithstanding the pandemic.
The final dividend is subject to approval by
shareholders at the AGM on 29 July 2021.
Subject to shareholder approval, the final
dividend will be due and payable on
6 August 2021 to all shareholders on the
Register of Members on 25 June 2021.
In addition to the cash dividend option,
shareholders will continue to be offered a
Dividend Reinvestment Plan alternative.
CASH FLOW, NET DEBT AND LIQUIDITY
Adjusted free cash flow was £250 million
(2020 – £247 million). The increase of
£3 million reflects higher adjusted
earnings, lower capital expenditure and
lower retirement benefit contributions
following the ‘buy-in’ of the main UK
pension scheme in the prior year, partially
offset by the impact of higher corn prices
on working capital. Capital expenditure of
£152 million (2020 – £166 million) included
investment in our Lafayette and Decatur
plants in the US to further reduce our
greenhouse gas emissions and increase
operational efficiency at each site.
We expect capital expenditure for the
2022 financial year to be between
£180 million and £200 million reflecting
both a step up in Food & Beverage
Solutions growth capacity and investment
related to acquisitions.
48 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
Net debt at 31 March 2021 of £417 million
was £34 million lower than at 31 March
2020. This movement mainly reflects the
strong net cash flow generated from
operating activities and the favourable
translation impact of the weaker US dollar
on US dollar-denominated debt, partially
offset by exceptional cash flows of
£32 million, investments to acquire
businesses totalling £62 million and
dividend payments of £137 million.
At 31 March 2021, the Group held cash and
cash equivalents of £371 million and had
a committed, undrawn revolving credit
facility of US$800 million until 2025 (of
which US$700 million has been extended
to 2026). Net Debt to EBITDA ratio was
0.8 times (31 March 2020 – 0.9 times). On a
covenant-testing basis, Net Debt to EBITDA
ratio was 0.6 times, which was significantly
lower than the covenant ratio of not greater
than 3.5 times, demonstrating continued
significant headroom above this covenant
requirement.
RETIREMENT BENEFITS
The Group maintains pension plans for its
current employees and former employees
in a number of countries. Certain of these
arrangements are defined benefit pension
schemes. All funded schemes in the UK
and US are closed for further accrual. In
the US, the Group also continues to provide
an unfunded post-retirement medical
benefit scheme.
At 31 March 2021, the Group’s retirement
benefit obligations are in a net deficit of
£140 million (31 March 2020 – net deficit of
£203 million). The largest component of
the net deficit relates to schemes in the
US that are by their nature unfunded
schemes (e.g. US post-retirement medical
benefit scheme).
The net deficit decreased by £63 million,
due to higher returns of £30 million on
plan assets in the US funded plans and
reductions in retirement benefit
obligations in the US of £21 million, due
to changes in actuarial assumptions.
Additionally, US dollar denominated plans
showed a foreign exchange translation
benefit of £20 million.
The main UK plan was subject to a ‘buy-in’
in the prior year and therefore the
significant increase in obligations due to
a lower discount rate and the impact of
higher inflation was largely offset by an
increase in the value of the ‘buy-in’
insurance policy. As a result, the balance
sheet for the UK plans remained broadly
consistent with the prior year.
The Group has only one debt covenant
requirement which is to maintain a Net
Debt to EBITDA ratio of not more than
3.5 times. On the covenant-testing basis
this was 0.6 times at 31 March 2021. As set
out below, for a covenant breach to occur
it would require a profound reduction in
Group profit. Such reduction is considered
to be extremely unlikely.
In the year ended 31 March 2021, pension
contributions were £14 million lower than
the prior year as a result of cessation of
contributions to the main UK scheme
following the ‘buy-in’.
FINANCIAL RISK FACTORS
Our key financial risk factors are
market risks, such as foreign exchange,
transaction and translation exposures,
and credit and liquidity risks, as
explained in Note 29.
GOING CONCERN
The Directors are satisfied that the Group
has adequate resources to continue to
operate as a going concern for the
foreseeable future and that no material
uncertainties exist with respect to this
assessment. In making the assessment,
the Directors have considered the Group’s
balance sheet position and forecast
earnings and cash flows for the period
from the date of approval of these financial
statements to 31 March 2023. The
business plan used to support the going
concern assessment (the ‘Base case’) is
derived from Board-approved forecasts
together with certain downside sensitivities.
Further details of the Directors’
assessment are set out below:
At 31 March 2021, the Group has significant
available liquidity, including £371 million of
cash and US$800 million (£579 million) of
committed and undrawn revolving credit
facility, none of which matures before
March 2025. In addition, none of the
Group’s existing financing matures during
the going concern assessment period, with
the earliest maturity being in the year
ending 31 March 2024. During the year, the
Group demonstrated its ability to raise new
finance despite the uncertainties of the
Covid-19 pandemic, raising US$200 million
of new private placement debt in August
2020, with 10-year and 12-year tenors at
2.91% and 3.01%, respectively.
As described elsewhere in the Annual
Report, the Group’s performance has
demonstrated resilience to the challenges
of Covid-19, with revenue, profit and cash
flow growth being delivered during the
year ended 31 March 2021. None of the
scenarios modelled in the Directors’
‘worst case scenario’ in the Group’s two
most recent going concern assessments
(30 September 2020 and 31 March 2020)
have come to fruition to any degree.
In concluding that the going concern
basis is appropriate, the Directors have
modelled the impact of a ‘worst case
scenario’ to the ‘Base case’ by including
the same three plausible but severe
downside risks also used for the Group’s
viability statement, being: a major
operational failure causing an extended
shutdown of our largest manufacturing
facility; the loss of two of our largest Food
& Beverage Solutions customers; and a
slower recovery from the impact of the
Covid-19 pandemic. In aggregate, such
‘worst case scenario’ does not result in any
material uncertainty to the Group’s going
concern assessment and the resultant
position still has significant headroom
above the Group’s debt covenant
requirement.
In addition, the Directors have calculated a
‘reverse stress test’, which represents the
changes that would be required to the
‘Base case’ in order to breach the Group’s
debt covenant. Such ‘reverse stress test’
shows that the forecast Group profit would
have to be reduced to almost zero in order
to cause a breach. Finally, the Group has
and continues to demonstrate its ability to
operate all of its manufacturing facilities
safely in the current environment.
Having reviewed the ‘worst case scenario’
and ‘reverse stress test’, the Directors
consider that there is no reasonable
scenario in which available liquidity could
be exhausted or the Group’s debt covenant
could be breached. Accordingly, there is no
reasonable basis under which the Group
would not be a going concern.
TATE & LYLE PLC ANNUAL REPORT 2021
49
OUR PEOPLE
AMAZING DEEDS, SPIRIT AND
PERFORMANCE FROM ALL
OUR PEOPLE
Laura Hagan, Chief Human Resources
Officer, shares how our people have
gone above and beyond during the many
challenges of the last year whilst continuing
to transform our business, including
embracing new ways of working with ease.
In times of crisis, the values that were
always there become amplified and very
visible. I am so impressed by the way our
people responded to all the challenges
presented globally from Covid-19. In a year
like no other, our people lived our culture,
values and beliefs.
Guided by our purpose of Improving Lives
for Generations, we moved quickly to
articulate a set of clear priorities for our
people – keeping each other safe and
supported in and outside work, working
together to prioritise the operations of our
plants and supply chain – and so delivering
to our customers. We felt confident if we
put our people first, the rest would follow
successfully.
Last year we said we wanted our culture
to be pacier, adaptable and more ambitious
– and the pandemic spurred us to do this
almost overnight. Key to this was how
local leaders and managers, especially
those at the front line of our operations,
immediately knew how best to lead,
communicate and keep things running.
And the reality of the pandemic was
different in every location, and ever-
changing. It was vital local leaders and
their teams were able to make the right
decisions, quickly, for the circumstances
they were facing. They did this without
hesitation: reorganising safety protocols,
ways of working and shift patterns for
different and multiple teams – letting the
Global Pandemic Response Team know
what was working and what help they
needed on a daily basis.
Our commercial and innovation teams
also adapted. When you are not able to
meet your customers in person, you use
technology and ingenuity to continue
discussions – realising our customers
were also adapting to very different
demand scenarios and uncertain futures
50 TATE & LYLE PLC ANNUAL REPORT 2021
It’s been a privilege to lead our People
Function this year – I continue to be inspired
by our people and their individual and
collective achievements – we are all excited
about the future at Tate & Lyle. What a great
platform to move forward with our agenda.
Laura Hagan
Chief Human Resources Officer
too! In some ways, our teams felt closer to
our customers and enjoyed the speed and
efficiency of organising remote meetings.
Another way of working that we will keep
going forwards.
Our office-based staff around the world
switched seamlessly to working at home
– helped by the speed of response from
our technology team – our people felt
supported and productive from the very
early days of the pandemic. Our functional
leaders followed the examples being set
from the front line: keep our people safe
and customers served. And we were all
pitched into each other’s homes by many
video meetings.
Despite all of this, it wasn’t always easy.
We were determined to recognise and
actively support our people’s wellbeing.
For many of our people, this last year has
been a relentless challenge – working at
home, living with uncertainty and isolation
for some, the joys and ‘head in hands’
moments of home-schooling children
from pre-school to older teenagers. For
some, it’s also been a time of family grief
and loss. We’ve remained compassionate
and supportive.
FOCUS ON WELLBEING
Home and working lives merged, blurred
together like never before. Although not
meeting people face-to-face, we felt very
connected to each other through technology,
with the ubiquitous interruptions of
delightful children, animals of all varieties
and a sense of life beyond the office.
We made practical support available.
But it was more important than that:
regular check-ins, team socials, external
learning and inspiration too. We ensured
our diverse population were supported –
our plant and lab employees continued to
work in difficult conditions – trying to
balance operations with keeping safe, and
our office-based employees working at
home, some for the first time.
As we entered 2021, it was important to
give our people a break – we asked people
to take a ‘Wellbeing Day’ – not holiday or
formal leave, but a chance for people to
shut down their screens or equivalent and
have a day to do something for themselves.
Throughout the pandemic we also offered
a confidential employee assistance
programme which provided many services
including in-person and virtual counselling
for our employees and their loved ones to
get help with life’s difficulties.
STRATEGIC REPORT
And we experienced joyful moments – the
Tate & Lyle Global Choir was a great
example – more connection in our global
leadership group and the resilience and
growth built in our teams as they stepped
up to the challenge of 2020.
SHINING A SPOTLIGHT ON EQUITY,
DIVERSITY AND INCLUSION
The open, honest and personal culture
we’ve seen emerge this year has also
allowed our people to be far more candid
about things we could do better at
Tate & Lyle. A key one is equity, diversity
and inclusion. Global events in 2020 led
us to have much more open and honest
conversations. This has been a real
highlight for me this year: the way the
dialogue about equity, diversity and
inclusion grew so powerfully across the
Company. We discussed the importance of
building a trusting and open environment
in which everyone has a voice, developing
a more diverse workforce which reflects
the local communities we call home, and
redesigning our core organisational
policies and practices to promote equitable
advancement, retention and reward.
Personally, I’ve found these conversations
humbling and inspiring and I am so proud
that our teams have increasingly felt safe
to truly share their lived experiences.
I remain resolute that an inclusive
environment and culture is a fundamental
prerequisite to commercial success and
continuing to be a purpose and people-led
business. I am proud to be working with
our Chief Equity, Diversity & Inclusion
Officer, Lauren von Stackelberg – together,
alongside the Board and the Executive
Committee, we undertake to shift the dial
and play an important role.
STEPPING UP OUR VIRTUAL
COMMUNICATIONS
Communication with our people was
essential and we moved to informal,
frequent and local conversations. Virtual
cafés were a regular part of our working
days and weeks, particularly in the first
few months of the pandemic. People
wanted reassurance, information and a
chance to ask questions. And it wasn’t just
the virtual cafés, our leaders stayed
connected with regular check-ins, asking
‘how are you?’ and spending time with their
teams away from the day-to-day of intense
business operations. The feedback from
many of our colleagues through impromptu
internal social media posts and feedback
via our regular pulse surveys, was very
positive and underlined how much more
connected they felt to the leadership team.
REWARDING AND RECOGNISING PEOPLE
IN CHALLENGING TIMES
Fair, performance-based remuneration is
fundamental to people’s motivation, and
our incentive arrangements are based on
both Group and individual performance
measures. We ensure our packages are
fair by benchmarking them regularly
against the market. We continued to invest
in our teams on the front line and so
maintained the usual salary investment
in plant-based operational roles, in
recognition of the importance of their
contribution. Beyond the usual annual
salary review, we wanted to recognise
those who had worked so hard to keep our
business running during the pandemic,
particularly in our plants, and so we gave
special recognition bonuses to our
frontline staff. However, given the level
of uncertainty in the market, we froze
salaries for senior management and our
managers in our bonus schemes. We
resumed our normal approach to salary
reviews for all staff in April 2021.
For us, recognition is about far more than
pay. This takes many forms, from localised
recognition moments in team meetings,
through to large events which recognise
truly exceptional behaviour. Given the
exceptional performance of so many
people across the Company, we launched
a special ‘2020 Heroes Awards’, to
recognise those people who had gone
above and beyond in supporting their
colleagues, communities and our
customers through the pandemic. We had
a fantastic number of nominees – 575
from across the business, with 30 eventual
winners. The event itself, a simple virtual
event, to say thank you to our winners
around the globe was incredibly moving.
The level of commitment, dedication and
extraordinary achievement that shone
through was both inspiring and humbling
for those involved. Our winners, and what
they did, are included on various pages
across this report.
OUR PEOPLE
Employee profile
(as at 31 March 2021)
4,441
(2020: 4,218)
Employees by geography (%)
North America
Europe
Asia Pacific
Latin America
Middle East and Africa
10 1
14
28
Gender diversity (%)
as at 31 March 2021
Men
Women
Board
30
40
Executive
Committee
All
employees
30
47
70
60
70
TATE & LYLE PLC ANNUAL REPORT 2021
51
OUR PEOPLE CONTINUED
SUPPORTING OUR
COLLEAGUES AND THEIR
MENTAL HEALTH
We talk about ‘the Tate & Lyle family’
and it’s no empty phrase. Caring for
our people is central to our purpose,
and this year we have worked hard to
ensure that our people prioritise their
own wellbeing, and the physical and
mental health of each other. For
example, wellbeing was formally
made part of our ‘Journey to EHS
Excellence’ programme in all sites,
we strongly encouraged use of free
counselling for our employees and
their loved ones via our global
Employee Assistance Programme,
and regularly reminded our teams to
ask for help and take space where
they needed it. We focused on
helping each other, and it has been
encouraging to see our teams come
together around the world with
colleagues organising themselves into
yoga, coffee, singing, walking and
running groups, or volunteered to
become Mental Health First Aiders
at their local sites.
EMPLOYMENT POLICY
Our policy is to employ the best
candidates for every position
regardless of gender, sexual
orientation, age, nationality, colour,
disability, race, religion or
philosophical beliefs, marriage or civil
partnership, pregnancy, maternity,
gender reassignment or ethnic or
national origin.
52 TATE & LYLE PLC ANNUAL REPORT 2021
DEVELOPING TALENT AND ENHANCING
LEADERSHIP SKILLS
2020 saw a total revolution in our
development offerings and coverage as
we pivoted from a largely face-to-face
training environment to a purely digital
one. Our Global Leadership Programme
cohort became our test group and
completed their programme virtually, with
full completion. After the positive feedback
from this group, we created a new virtual
learning suite, for both leaders and
managers, starting with a coaching module
that was rolled out to our top 100 leaders,
including our Executive Committee.
For our broader employee population,
we significantly extended both coverage
and usage of learning provision. Having
experienced limited take-up of our
previous digital skills platform, which had
dwindled to around 25 users per month,
we wanted to democratise and extend
learning throughout the organisation,
offering Just in Time skills training geared
to employees’ unique needs. We launched
LinkedIn Learning in August, with over
16,000 courses on almost every business
topic imaginable available, in seven
languages. We are delighted that we
are already achieving high levels of
engagement with the platform with over
650 active users spending on average just
under 90 minutes per month online.
DOING BUSINESS WITH INTEGRITY –
OUR CODE OF ETHICS
We are proud of our values and expect
everyone at Tate & Lyle, and all who work
with us, to act in accordance with these
standards. We set out what this means
in our Code of Ethics, available in 10
languages. Central to our Code is a
profound respect for human rights. The
Code is publicised widely across the Group
and is promoted through online training for
everyone and face-to-face training for
particular areas of risk. We strongly
encourage people to report breaches
through our Speak Up (whistleblowing)
programme, which is advertised across
our plants and offices, on our intranet and
in other internal communications. This
reflects our belief that prevention is the
best approach – if people understand
what’s expected of them and why, they’re
more likely to do the right thing.
Raising concerns
This year, concerns raised through
Speak Up, either directly or through our
independent third-party partner, Safecall,
were 57 compared with 70 in 2020.
We believe this drop is due to many
people working from home, and far fewer
interactions in person. We investigate
every concern raised, but we sometimes
have multiple calls about the same issue.
As a result, the number of concerns we
investigated this year was 49. We treat any
concern raised as whistleblowing which
means it is reviewed independently by our
Head of Ethics and Compliance.
Communicating our standards and policies
We support the Code with a set of
standards including Group Competition
(Anti-trust), Group Gifts and Hospitality,
Anti-Money Laundering and Anti-
Corruption/Bribery, and Agents and
Commissions. Our global HR policies cover
topics such as equal opportunities, equity,
diversity and inclusion, employee training
and reward, and we publish these and our
standards on our intranet, as well as
publicising them across Tate & Lyle.
We also publish standards for our supply
chain, and our statement on anti-slavery
and human trafficking can be found at
www.tateandlyle.com/anti-
slaverystatement.
IN SUMMARY
Looking ahead, we are emerging from the
pandemic a stronger, more connected and
compassionate business with our purpose
very much at the forefront. And we’ve many
things to look forward to; meeting people
in person, visiting our sites around the
world – spending time reconnecting and
exchanging new views. Many are talking
about the ‘new normal’ – I’d like to think
we will create our own path forward, with
greater resilience and ability to change,
and our ingenious people will continue to
work together for the success of
Tate & Lyle.
CODE OF ETHICS
Central to our Code is a profound
respect for human rights –
particularly health and safety, which
is our highest priority.
• 10 languages
• 97% of employees trained on the
Code
• 95% of employees (who require it)
completed online competition law
training with 331 high-risk
employees participating in live
competition law training
• 98% employees (who require it)
trained in human trafficking
STRATEGIC REPORT
DRIVING INCLUSIVE CHANGE
Our new Chief Equity, Diversity & Inclusion Officer,
Lauren von Stackelberg, who joined Tate & Lyle in April
2021, talks about our ambitions, shares why she joined
and her first impressions.
WHAT ATTRACTED YOU TO TATE & LYLE?
When you work in equity, diversity and
inclusion, authenticity and accountability
are paramount. I was drawn to Tate & Lyle
by the courage of their people’s convictions
and their heartfelt honesty. It was evident
the Company is investing long-term in
equity, diversity and inclusion not simply
because it’s the right thing to do, but
because their purpose demands it. Like
many of our employees, Tate & Lyle’s
purpose, Improving Lives for Generations,
resonated with my personal purpose to
make the world a better place than I found
it. And doing equity, diversity and inclusion
work at Tate & Lyle will allow me, and us,
to do just that.
ALLIES IN PROGRESSING
OUR CULTURE
We want equity, diversity and inclusion
to be at the heart of our culture. Our
Ally Training is instrumental to this.
This year we trained more than 228
employees, including our Executive
team, on how to be an ally. This training
empowered many employees to begin
their inclusion learning journeys and to
take personal ownership of our equity,
diversity and inclusion agenda.
HOW WAS OUR PROGRESS LAST YEAR?
Tate & Lyle’s year was marked by
accelerated impact, driven by our
employees’ and leaders’ great intentions
and mindsets. We witnessed first-hand
the power and potential of our employees’
energy to make change happen alongside
their personal willingness to change. This
led to our growing Employee Resource
Group footprint, the increasing reach of
our Ally Training Programme, and
progress towards our gender parity goal
in leadership roles.
• Employee Resource Groups and Allies
Our Employee Resource Groups play an
important role in connecting under-
represented groups across the Company,
prioritising support and solidarity, and
cultivating a sense of belonging at
Tate & Lyle. We have three groups –
Professional Women’s Network, LGBTQ+
Network and, launched this year, Black
Employee Network. To magnify the
impact of these important communities,
we launched Ally Training to create ‘allies’
– people who use their influence to
support those who experience unequal
treatment.
• Binary gender diversity We are pleased
with the representation of women on our
Board (36%) and Executive Committee
(44%) as at the date of this Report. But we
still have much to do at the next level,
hence our target for gender parity in
leadership roles by 2025. We define
leadership roles as the top three employee
bands. We made solid progress in the year,
increasing the number of women in
leadership roles from 27% to 32%. We
have 136 senior managers, including
statutory directors, of whom 24% (33) are
women. Looking ahead, areas of focus
include our senior plant management
where we lack representation of women.
We are committed to measuring and
reporting our progress and to expanding
our representation goals.
• Gender pay gap reporting Although we
are below the legislative threshold for
UK gender pay reporting, we voluntarily
publish details of our gender pay gap on
our website annually. Using the UK
government’s methodology, our median
gender pay gap for UK employees was
3.2% (2020 – 15%). We expect this gap
to narrow even further as we increase
the number of women in leadership roles
to achieve our target of gender parity
by 2025.
WHAT ARE TATE & LYLE’S AMBITIONS
AND KEY PRIORITIES?
Our future potential is reflected in our
decision to expand our nomenclature to
now refer to this work as Equity, Diversity
& Inclusion (ED&I). We think about this as
driving equity as our impact, by fostering
local diversity as a fact, and conscious
inclusion as an act. We have an opportunity
and an obligation to ensure our progress
is both interpersonal and institutional
by weaving ED&I into our culture and
purpose. The pillars we will focus on
in the future are:
• Talent: Ensure the diversity of our
workforce reflects the local
communities we call home
• Culture: Educate all to achieve the ED&I
competence and confidence needed to
create and sustain an inclusive culture
where diversity thrives, unlocks
innovation and maximises our business’
global growth
• Systems: Integrate ED&I into core
organisational policies and practices to
promote equitable advancement,
retention and reward
• Society: Listen to, speak to and serve
society by promoting ED&I progress
for our customers, communities and
supply chain
We want equity, diversity and inclusion to
be at the heart of our culture. That is why
we aspire for all our employees to be seen,
heard and valued, and for our teams to
reflect the local communities we call
home. We are committed to making
change happen.
TATE & LYLE PLC ANNUAL REPORT 2021
53
COMMUNITY INVOLVEMENT
ADAPTING TO MEET
CHANGING NEEDS
Rowan talks about how our people
took to heart the importance of
keeping our communities safe, well
and cared for during a challenging year.
HOW WE INVEST IN OUR
COMMUNITIES
In the year ended 31 March 2021,
cash community spend and charitable
donations amounted to
£752,000
(2020 – £443,000)
Areas of focus (%)
Health
Hunger
Education
36
22
42
54 TATE & LYLE PLC ANNUAL REPORT 2021
OUR PROGRAMME
Our community involvement programme
is a key part of how we live our purpose,
brought to life through our pillar of
building thriving communities. For our
employees, community involvement is
fundamental to who we are. The overall
aim of our programme is to build stronger,
healthier communities where we live and
work, and to focus on those areas where
we can make the most difference. That’s
why our community involvement
programme is centred around three main
areas, with a particular emphasis on
supporting children and young adults.
• Health: We support projects which
improve the health and wellbeing of
people of all ages, helping them
understand the roles played by nutrition
and physical activity in a well-balanced
life.
• Hunger: We work with organisations to
give people in need in our communities,
and beyond, access to nutritious meals.
• Education: We work with local schools,
education foundations and other
community partners to help prepare
students for healthier, brighter futures.
These three areas are part of our purpose
targets and commitments, with our
performance reported on page 28.
Our partners include registered
charities, educational institutions and
non-governmental organisations that meet
our high standards for delivering services
and results. Our plan and budget for
community involvement are developed and
approved as part of our annual operating
plan process.
OUR YEAR
This year has been like no other.
Community support is about adapting
to whatever is most needed, and so we
stepped up our funding for our community
partners to ensure they received the help
they needed at a time of great uncertainty.
As part of our annual programme, we
support 25 food banks across the world.
They told us early on in the pandemic
that they were seeing significantly higher
demand, mostly from families who had
never had to use a food bank before.
So we decided to make extra donations
totalling US$200,000, which together
with our annual programme helped to
provide around 1.7 million meals for
people in need. We also provided PPE for
employees’ family members who were
frontline workers.
The pandemic meant we had to adapt many
of our programmes and find creative ways
to continue supporting our communities.
With schools closed during lockdown, we
moved our traditional classroom support
onto virtual platforms with teams in Latin
America, the UK and the US taking part in
virtual mentorship programmes for
students of all ages. In Argentina, Brazil,
Colombia and the US, we made sure
vulnerable children got their school meals
through a combination of mobile food
trucks, school pantries and backpack
programmes. In Chicago, volunteers took
part in a programme to make calls to
elderly people living alone or homebound
to ensure they had access to health
support and had enough food to eat. Some
of the activities we usually support didn’t
happen because of lockdown – the London
Youth Games, for example – and we aim to
re-engage with these programmes in the
year ahead.
The pandemic was challenging in so many
ways, but one positive outcome has been
a real strengthening of local community
spirit and togetherness. Thanks to the
inspirational and selfless work of
colleagues across the world, we helped
our communities get through this very
challenging time and will continue to do
so in the months and years ahead.
STRATEGIC REPORT
Colleagues stepped up and masked up
to support our local communities during
the pandemic, improving lives at a time
of real need.
Rowan Adams
Executive Vice President, Corporate Affairs
HIGHLIGHTS OF THE YEAR
HEALTH
We supported health, nutrition and
wellbeing programmes for more than
HUNGER
We helped people in need in our local
communities by providing
EDUCATION
We gave educational support and
mentorship opportunities to more than
40,000
people across the world
1.7 million
nutritious meals through
our food bank and charitable partners
14,000
students of diverse ages and
backgrounds
Our sincerest thanks for your
partnership in a time where our
most vulnerable families face the
greatest need for health and
hygiene supplies.
Fundo Social de Solidariedade
Santa Rosa, Brazil
Examples
• United Way Supporting wellbeing
programmes in US and Mexico
• Secours Populaire Français Providing
women and students with vouchers to
access hygiene essentials in Lille,
France
• Decatur Staley Striders Providing
healthy recreation and physical
activities in Decatur, Illinois, USA
We are deeply grateful for your
support, helping us provide meals
to people in desperate need.
Your funding gives our teachers the
supplies they need for hands-on
STEM lessons.
Cradle of Hope
Johannesburg, South Africa
Public Schools Foundation
of Tippecanoe County
Lafayette, Indiana, USA
Examples
• GoodTruck Brasil Delivering meals
to people via a mobile kitchen in
São Paulo, Brazil
• Northern Illinois Food Bank
Sponsoring and helping pack 49,000
holiday meal boxes for hungry families
in Illinois, USA during the festive period
• Cradle of Hope Providing thousands of
meals to people in South Africa during
the pandemic
Examples
• FastFutures Programme in the UK
helping students from disadvantaged
backgrounds increase their skills and
employability
• MENTOR Provision of school books
and supplies in Lübeck, Germany
• STEM-based grants Provided to
schools in our local communities
across the US, adapted this year for
virtual learning and teacher support
TATE & LYLE PLC ANNUAL REPORT 2021
55
ENVIRONMENT, HEALTH AND SAFETY
MAINTAINING GOOD
PROGRESS
Given Covid-19, our priorities this year were to keep
people safe whatever their circumstances, to keep
our operations running and our customers served.
Our people rose to the challenge, enabling us to make
good progress with many of the things we’d planned,
including our sustainability commitments.
NEW 2030 ENVIRONMENTAL TARGETS
In May 2020, we announced ambitious new
environmental targets for 2030, reflecting
the increasing urgency to combat climate
change. These included targets for
greenhouse gas (GHG) emissions at our
facilities and across our value chain,
waste, water and sustainable agriculture.
Our Scope 1 and 2 and Scope 3 GHG
emissions reduction targets were validated
as science-based by the Science Based
Targets initiative (SBTi). This means that,
by meeting our reduction targets by 2030,
we will play our part in helping limit global
warming in line with the goals of the Paris
Agreement on Climate Change. In setting
these new targets, we didn’t lose sight of
the need to achieve our 2020 targets for
GHG emissions and waste to landfill, both
of which we exceeded. For more on our
environmental work, see pages 60 to 65.
GOOD PROGRESS ON J2EE
Because our people responded well to the
challenges of the pandemic, and because
of the systems and processes we already
had in place through our Journey to
Environment, Health and Safety (EHS)
Excellence (J2EE) programme, we were
able to make progress in many of the areas
we had planned for the year. Our J2EE
programme is designed to involve
everyone within Tate & Lyle in strengthening
our EHS culture and performance. In
practical terms, this involves each site
introducing standardised protocols and
passing through a series of stages, or
tollgates (seven in total), with the help
of colleagues who champion a particular
aspect of EHS culture (element owners).
Passing a tollgate involves a rigorous
assessment carried out by internal
EHS experts.
to town. Our improved safety performance
this year is testament to our people’s
commitment, dedication and how they care
for each other. Feedback from employees
in our site assessments and pulse surveys
was overwhelmingly positive – they feel
proud to work for Tate & Lyle because they
believe the Company genuinely cares
about them. For more on our Covid-19
response and our performance on health
and safety, see pages 58 and 59.
RISING TO THE CHALLENGES OF
COVID-19
From the outset of the pandemic, our
priorities were clear – keep our people
safe, keep our operations running and
serve our customers. We established
a Global Pandemic Response Team to
develop, co-ordinate and carry out our
plans, as well as local response teams
at every site. These local teams were
empowered to make decisions on the
ground depending on local circumstances.
This local ownership was essential
because infection rates and lockdown
rules varied enormously from country
to country, state to state and even town
56 TATE & LYLE PLC ANNUAL REPORT 2021
Our improved safety performance
this year is testament to our colleagues’
commitment, dedication and how much
they care for each other.
Jan-Jaap van der Bij
Senior Vice President, Global Environment, Health,
Safety, Quality and Security
We encourage all employees to share
their ideas and report concerns via our
cloud-based tool, Gensuite, which enables
us to manage EHS data efficiently and
consistently. Gensuite was quickly adapted
to include Covid-19 tracking and reporting
this year, helping our teams on the ground
manage quarantine and other issues on
site. Every week, the EHS team shares
with a wide group of employees the latest
EHS performance data, details of any
incidents and corrective actions taken,
and examples of good practice. We added
a special Covid-19 section to this
communication this year.
Our EHS Advisory Board oversees
J2EE and reviews performance in a
number of areas including safety and
our environmental progress. It meets
quarterly and is made up of senior
executives, including the Chief Executive,
and an external expert. The Board of
Directors receives updates on EHS
performance at every meeting, and
a more detailed review of progress at
least twice a year.
In normal years, senior executives visit
sites to meet employees and contractors
to discuss EHS and identify key issues.
This first-hand insight helps us review
and improve our EHS practices and
address any specific concerns employees
may have. Due to Covid-19, these visits
could not take place this year, but instead
Nick Hampton, our Chief Executive, and
Melissa Law, our President, Global
Operations, ran special virtual cafés with
our operations team.
This year we integrated our food safety and
product quality processes into J2EE, as
well as the work we do on the security of
our sites. Particularly at our smaller sites,
many of the people who manage quality
and security are also responsible for EHS,
so it made sense to incorporate those
aspects into J2EE as well. In practice,
this means we’ve added requirements
around quality and site security to our
tollgate assessments. Sites must meet
these additional requirements to pass to
the next stage.
Despite the Covid-19 situation making
programmes and assessments more
difficult, and with quality and security
requirements added, our sites nonetheless
achieved another year of good progress
on our J2EE. By the end of March 2021, 39
sites had passed tollgate 1, 34 sites tollgate
2, 26 sites tollgate 3, and nine sites tollgate
4. We were particularly pleased that two
passed tollgate 5. We also encourage
employees to tell us about any EHS
concerns they may have, no matter how
large or small. This year, they raised 4,969
concerns, and over 73% were addressed
within our target of 30 days. This was 8%
fewer than 2019, due to so many people
having to work from home as a result of
Covid-19.
EHS SYSTEMS AND GOVERNANCE
J2EE is supported by a global EHS
management system aligned with the
requirements of international standards
for the environment, occupational health
and safety, and risk management. In
2020 our EHS management system was
certified to ISO 14001 and ISO 45001. This
feeds into our global EHS policy (available
on www.tateandlyle.com), which sets out
a number of principles designed to keep
our people and environment safe, along
with a consistent set of requirements.
STRATEGIC REPORT
J2EE AIMS
• To build a strong, sustainable EHS
culture
• To keep people safe and prevent
loss of life and injuries
• To prevent business disruption
• To provide clarity about the
behaviour we expect from those
who work for us and with us
• To manage our operational EHS
risks while ensuring compliance
with applicable regulations
• To minimise our environmental
footprint
PUBLIC REPORTING
We explain the scope, principles and
methodologies we use to report our EHS
performance in ‘EHS Reporting Criteria’ at
www.tateandlyle.com/purpose
ASSURANCE
AECOM has independently verified
selected environmental data from pages
60 to 64. Their Independent Verification
Opinion is at www.tateandlyle.com/purpose/
caring-for-our-planet
We report EHS data by calendar year.
TATE & LYLE PLC ANNUAL REPORT 2021
57
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
necessary, ensured employees
quarantined (on full pay). We were also
quick to roll out MS Teams, a video
conferencing programme, which enabled
many plant and operational people to work
from home while staying connected with
and supporting those people still on site.
Another area we focused on was site
security – with fewer people on site, this
was more important than ever. All our
manufacturing sites remained operational
throughout the pandemic – by keeping
our people safe, we were also able to
keep our operations running and our
customers served.
A key part of how we managed through
Covid-19 was the openness and humanity
we showed each other, with the tone set
from the top. The stress on our people was
tremendous, particularly on those who
were home-schooling or looking after
relatives who were ill, shielding or
quarantining. Our HR teams handled calls
day in, day out, reassuring and advising
colleagues that staying at home, staying
safe and not risking infecting others was
the right thing to do. In total, around 11% of
our workforce contracted Covid-19 during
the year ended 31 March 2021, with only
three small outbreaks at our sites
(between five and 10 people), and
thankfully no employees were seriously ill
or died as a result. However, very sadly, a
cleaning contractor at our facility in Mexico
City caught Covid-19 away from our
premises and passed away.
COVID-19 STATISTICS
Year ended 31 March 2021
• 497 (11%) of our workforce
(employees and contractors)
tested positive
• 2,014 people quarantined, either
from testing positive, waiting for
test results, returning from
visiting a high-risk area, or from
potential infection from direct
contact with someone else testing
positive
• Three small outbreaks (5-10
people) at our sites (all recovered)
2020 SAFETY PERFORMANCE1
Perhaps because Covid-19 reminded us all
of the paramount importance of safety, we
saw a good improvement in our lagging
safety indicators – although having fewer
people on site may also have contributed to
this. Our recordable incident rate improved
by 14%, with the number of incidents down
from 52 in the 2019 calendar year to 42 this
year. The lost-time rate was down by 5%.
Within this, though, our contractor rate
was higher, despite fewer injuries,
because, due to Covid-19, contractor hours
were 18% down on the previous year. In
terms of leading indicators, we had nine
potentially severe events (PSEs), up from
six in 2019 (see below for more information).
1 We report safety performance by calendar year. For EHS
reporting purposes, employees include all those at
Tate & Lyle-owned operations and joint ventures, and we
also include contractors.
Responding to potentially severe events
When major, severe or potentially severe
events (PSEs) do occur, the site manager
reports them to our Incident Review
Board (IRB). The IRB is led by the Senior
Vice President, Global EHSQS, and is
attended by senior leadership from Global
Operations, and plant and site managers.
It is an open forum for discussion, and
considers these questions:
• Do we understand what happened?
• Do we understand the root cause?
• Have we defined the right corrective
actions to prevent it from happening
again at this site?
• What do we need to do for other sites
with a similar situation, equipment,
process, product or procedure?
This work continued unchanged during
Covid-19, with the IRB meeting virtually.
Any resulting actions are tracked to
completion by our Global Incident
Investigation Process Manager. During
2020, the IRB considered nine PSEs,
including a number of fires which were
extinguished effectively and spills which
were contained. We shared the results and
action plans with all our plants to ensure
everyone learnt the lessons – also
virtually. Our ongoing work on safety
particularly benefited from our hiring of
full-time safety engineers at all our major
plants in 2019.
HEALTH AND SAFETY
The safety and wellbeing of our people –
all those who work at our sites, whether
employees or contractors – has always
been our primary concern. So when
Covid-19 hit, the message from leadership
was first and foremost to keep people safe.
With smaller crews operating in our plants
and many people working at home during
lockdown, it was no surprise that the
mental health aspect of people’s safety
was high on our agenda. We discuss
wellbeing, and the initiatives we put in
place due to Covid-19, in the People section
on pages 50 to 53; here we discuss health
and safety in terms of the safety work at
our sites covered by our J2EE.
RESPONSE TO THE PANDEMIC
As a minimum we expect everyone
working on a Tate & Lyle site – employees,
contractors and any other third parties
– to take responsibility in three ways:
• Comply with all safety rules and
regulations relevant to their work
• Intervene to prevent unsafe conditions
• Respect fellow workers and the
communities in which we work
These principles – and the need for people
to take personal responsibility – became
even more important during the pandemic
as we brought in new Covid-safe protocols
and ways of working at each site. We acted
early and quickly, setting up a Global
Pandemic Response Team led by our
Senior Vice President, Global Environment,
Health, Safety, Quality and Security
(EHSQS). We set out clear guidelines for
people to apply to their local situations,
based on local data (e.g. infection rates),
guided always by the principle that people’s
safety was paramount. The Chief Executive
spoke to every plant manager across the
world to offer his support and guidance.
Our local leaders everywhere stepped
up and took responsibility for the local
response, which was no small task,
considering the complexities of
working out how to staff and operate a
manufacturing plant 24/7 while avoiding
spreading infection. We quickly brought
in measures like wearing face masks,
creating employee ‘bubbles’ and social
distancing. We also changed the shift
handover process so that people didn’t
need to interact face-to-face and, when
58 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
Ongoing maintenance and investment
Despite the restrictions of the pandemic,
we continued to deliver our maintenance
and continuous improvement
programmes. In many ways this was more
important than ever – because it’s what
ensures our operations are safe and
efficient. A key project that continued was
our investment in demolishing old,
potentially unsafe structures at our
manufacturing sites, such as stacks,
grain silos and coal conveyer belts. This
represents a US$22 million investment
over three years and we expect the work
to be completed in the summer of 2021.
OUR 10 LIFE-SAVING PRINCIPLES
For high-risk operations, as part
of our J2EE, we developed 10
life-saving principles to prevent
serious injury or loss of life. Each
principle defines the critical
behaviours expected of leaders
and employees to ensure their
own safety and that of their teams.
1. Permit to work
2. Lock/tag/try and electrical
safety
3. Railcar safety
4. Working at height
5. Mobile-powered equipment
6. Transportation (driving)
7. Safety barrier management
8. Hot liquids, chemicals, gases
and steam
9. Combustible dust
10. Emergency situations
PERFORMANCE IN 2020
Leading indicator – PSEs
Potentially severe events (PSEs) are events or incidents which could have
resulted in a major or severe incident.
9
(2019 – 6)
Recordable incident rate1
Lost-time rate2
Employees
Contractors
Combined
Employees
Contractors
Combined
2020
2019
2018
2020
2019
2018
0.58
0.67
0.97
0.73
0.91
0.78
0.91
1.03
0.94
0.39
0.42
0.40
0.34
0.45
0.42
0.47
0.45
0.47
1 Number of injuries requiring treatment beyond first aid per 200,000 hours.
2 Number of injuries that resulted in lost-work days per 200,000 hours.
Number of incidents
combined
Number of lost-work and restricted
work cases combined
42
(2019 – 52)
Nature of accidents (%)
5
5
5
5
5
7
2 2 2 2
24
14
10
12
25
(2019 – 28)
Contact with sharp object
Caught in, under, on, between
Forceful exertion or pushing or pulling
Body position or posture – bend, lean or twist
Falls, same level
Struck by or against
Slip or trip, no fall
Falls, different level
Contact with temperature extremes
Contact with chemical/substance
Heat stress
Stepped on
Exposure to
Contact with electrical
TATE & LYLE PLC ANNUAL REPORT 2021
59
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
ENVIRONMENT
The pandemic has dominated the agenda
for governments, businesses and societies
everywhere this year. As we recover from
the pandemic, the world is focusing
increasingly on using the opportunity to
rebuild economies and societies in a way
that is sustainable and addresses the
climate change emergency – a ‘green’
recovery. In this context, our purpose
commitments, including ambitious
environmental targets for 2030, which we
launched in May 2020, were timely. Our
environmental targets are particularly
relevant because nearly everything we
make begins life in the natural world,
whether it’s a kernel of corn, a cassava
root or a leaf of stevia. So it’s all the more
important that we take care of the planet
for its own health and the future health of
our business.
We measure our environmental footprint
in four main areas which are the focus
of our 2030 targets: cleaner air; using
waste beneficially; using less water; and
supporting sustainable agriculture.
This year we report progress against our
2030 targets for the first time, as well as
reporting the final results of the reduction
targets we set for 2020 using a 2008
baseline for greenhouse gas (GHG)
emissions and waste to landfill. Our
progress in both has been encouraging.
We also began reporting for the first time
against the Task Force on Climate-related
Financial Disclosures (TCFD), as set out
on pages 66 and 67.
HOW WE DEVELOPED OUR TARGETS
AND COMMITMENTS
In setting our new targets, rather than
starting from where we are, we looked
at where we felt we should be in 2030 and
beyond, and then worked back to see what
that would mean for what we must achieve
by 2025 and then 2030. To make our GHG
emissions reduction targets more tangible,
they are based on absolute rather than
intensity reduction, and have been
validated as science-based by the Science
Based Target initiative (SBTi), in line with
the goals of the Paris Agreement on
Climate Change.
Our commitment to promote sustainable
agriculture is fundamental to our overall
ability to meet our targets because of the
significant proportion of our environmental
impact that comes from corn growing.
That is why we’ve committed to ensuring
we support sustainable farming of the
equivalent corn acreage that we buy each
year – currently 1.5 million acres. And
we’re proud to be leading the industry with
this initiative as the first corn wet miller
to make this kind of commitment. It has
a wider significance too, because
sustainable agricultural practices aren’t
just about their environmental impact –
they’re about supporting farmers’
livelihoods and local communities, which
also aligns with our purpose pillar of
building thriving communities.
We also signalled our commitment to our
environmental targets by ‘going green’
with the refinancing of our US$800 million
revolving credit facility in May 2020, the
pricing of which is linked to us achieving
targets relating to our Scope 1 and 2 GHG
emissions, water use and waste.
A PURPOSEFUL APPROACH TO THE
ENVIRONMENT
The capital investments we’re making
in our plants, such as co-generation
systems and biomass boilers, and in our
sustainable agriculture programme, are of
course vital for achieving our targets. But
what matters perhaps even more is the
behaviour and commitment of our people,
as we know from our work with J2EE.
Despite the challenges of Covid-19 and
with many people working at home or in
more testing circumstances in our plants,
we’ve seen a real shift this year with people
far more engaged around environmental
issues. For example, in April 2020, our first
global ‘virtual’ event held in lockdown
recognised Earth Day, which saw many
people connecting around environmental
issues, often including their families.
Society’s focus on climate change has
certainly contributed to colleagues’
increasing interest, but the work we are
doing on our new targets to protect the
environment, and our purpose-led culture,
are also important factors. As we start to
move beyond the pandemic, we believe
we’ll see this awareness and commitment
continuing, to the benefit of our
environmental performance overall.
CARING FOR OUR PLANET
Carbon footprint
• By 2030, we’ll have delivered a
30% absolute reduction in our
Scope 1 and 2 greenhouse gas
emissions, with an ambition to
reach a 20% reduction by 2025.
• By 2030, we’ll have delivered
a 15% absolute reduction in our
Scope 3 greenhouse gas
emissions.
• By 2025, we’ll have eliminated
coal from our operations.
Waste
• By 2030, 100% of our waste will
be beneficially used, with an
ambition to reach 75% by 2025.
Water
• By 2030, we’ll have reduced
water use by 15%.
Sustainable agriculture
• We’ll maintain sustainable
acreage equivalent to the volume
of corn we buy globally each year,
currently 1.5 million acres, and
through partnerships we’ll
accelerate the adoption of
conservation practices.
HOW WE MANAGE
ENVIRONMENTAL RISK
Our global EHS management
system includes:
• Identifying and measuring
environmental risks to prevent
and mitigate our impacts
• Planning, setting targets,
measuring progress, and tracking
actions to achieve our objectives
• Documenting all legal and other
environmental obligations and
their fulfilment
• Building a sustainable EHS culture
• Communicating internally and
externally any changes in our
environmental strategy, risks or
opportunities
60 TATE & LYLE PLC ANNUAL REPORT 2021
CLEANER AIR
Our target for 2020 was to reduce
greenhouse gas emissions (Scope 1 and 2)
from our energy use by 19% per tonne of
production from a 2008 baseline. We’ve
exceeded that target, and our final result
for 2020 was a 25% reduction, with the
largest contribution coming from our
Loudon, Tennessee and Sagamore, Indiana
plants transitioning out of coal in 2016 and
2014, respectively. While achieving this
target was important, our focus shifted
this year to our new, more challenging,
science-based targets for 2030, and
particularly the work to ensure a
thoroughly robust 2019 baseline for
measuring our Scope 3 emissions.
OUR TOTAL CARBON FOOTPRINT –
ESTABLISHING A ROBUST BASELINE
In 2020, with the support of an external
expert, we analysed the carbon footprint
throughout our value chain to ensure
that the 2019 baseline for our Scope 3
emissions is as accurate as it can be.
This matters not just for the accuracy of
our metrics, but also because it’s the basis
for deciding what programmes we should
be developing to make the biggest
contribution to emissions reduction. As a
result of our analysis, we can now account
for 98% of our Scope 3 emissions. We have
also restated our 2019 Scope 3 baseline,
having emitted 6,754,000 tonnes of CO2e in
2019. Therefore, the 2019 baseline for our
total carbon footprint is 27% of our carbon
emissions from Scope 1 and 2 (energy
used by our sites), with 73% from Scope 3
(indirect emissions).
All our facilities, regardless
of size, have annual targets
for air quality, waste and
water that contribute to our
global targets. Getting
everyone involved helps
us build a culture of
continuous environmental
improvement.
Sara Leeman
Global Environmental Lead
STRATEGIC REPORT
Construction of our new
natural gas-fired heat
and power system in
Lafayette, Indiana, USA.
Our 2020 total carbon footprint (%)
19
6
75
Scope 1 19%1
Direct emissions from our sites
Scope 2 6%1
Indirect emissions from the energy we buy
Scope 3 75%2
The components of our Scope 3 emissions are:
45% goods and services we buy (mostly corn)
37% use of our ingredients (mostly by customers)
fuel and energy related activities (not in
10%
Scope 1 or 2), investments, end-of-life
treatment of sold products, employee
commuting and business travel
6% downstream transportation
2% upstream transportation
1
Independently verified by AECOM and included in its
assurance opinion.
2 Subject of AECOM’s work to define our Scope 3 emissions
in 2019/20; excluded from their assurance opinion.
A GOOD START FOR OUR GREENHOUSE
GAS EMISSIONS TARGETS
In the first year of our new 2030 targets, we
made a good start. Our target for Scope 1
and 2 GHG emissions is an absolute
reduction of 30% by 2030, and this year we
achieved a 7% reduction. This was mostly
due to our plants in Lafayette, Indiana, and
Decatur, Illinois, beginning to transition out
of coal and the greater use of renewable
energy in our plants. Our target for Scope 3
emissions is an absolute reduction of 15%
by 2030, and this year we achieved 0.5%
reduction (having emitted 6,721,000 tonnes
of CO2e). We are developing Scope 3 GHG
reduction projects in key categories that
contribute significantly to our Scope 3
footprint, for example transport and goods
and services such as packaging and
agricultural products. Building partnerships
with our suppliers, customers and other
stakeholders across our value chain will
be key to delivering our Scope 3 target.
TATE & LYLE PLC ANNUAL REPORT 2021
61
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
CLEANER AIR CONTINUED
PROGRESS AGAINST 2030 TARGETS
INVESTING TO ACHIEVE OUR TARGETS
We will achieve a significant proportion of
our Scope 1 and 2 reduction target through
our multi-year capital investment
programme totalling more than
US$150 million. This programme not only
benefits our local communities by
improving air quality, but also makes our
plants more efficient. They include
replacing coal boilers in our plants in
Decatur, Illinois and Lafayette, Indiana,
both in the US, and constructing a biomass
boiler in Santa Rosa, Brazil. These projects
will reduce our GHG emissions by up to
20% and eliminate coal from our operations.
We continued to make good progress with
these projects during the year, thanks to
the actions of our teams on the ground who
worked hard to develop Covid-safe
protocols, ensuring work could continue
alongside the essential everyday working
of the plants. And, we were delighted that
our Lafayette plant along with our Loudon,
Tennessee plant, received Energy Star
certifications from the US Environmental
Protection Agency again this year. These
are awarded each year for outstanding
energy efficiency performance, and our
two plants are the only corn wet mills in
the US to receive them.
HIGHLIGHTS OF GOOD PRACTICE
Investments are not the only route to
meeting our targets. Other essential
contributions come from the ongoing,
everyday efforts of our employees in
making continuous improvements to our
operations. And here again, despite having
to run our plants under challenging
conditions during the pandemic, our teams
worked hard to keep us on track. For
example, in Nantong, China, our team
switched a heat source from a fossil fuel to
steam, which reduced Scope 1 emissions
at the site by 65% while also saving costs.
And, at our Van Buren, Arkansas, US site,
the team reduced overall energy usage by
7%. This excellent result came from our
operators managing processes better,
thanks to greater awareness and training.
By 2030, we’ll have delivered a 30%
absolute reduction in our Scope 1 and 2
greenhouse gas emissions, with an
ambition to reach a 20% reduction
by 2025.1
By 2030, we’ll have delivered a 15%
absolute reduction in our Scope 3
greenhouse gas emissions.1
2020
7%
2019
0%
2030
target
30%
2020
0.5%
2019
0%
2030
target
15%
1
Approved as science-based targets by the Science Based Targets initiative, meaning they are in line with the goals of
the Paris Agreement on Climate Change.
PERFORMANCE AGAINST 2020 TARGETS
Energy use1
Gigajoules
20202
20193
20184
2008
Energy use intensity3
Gigajoules per tonne of production
36,444,000
37,643,000
37,254,000
37,459,000
2020
2019
20184
2008
4.94
4.96
4.87
5.10
Carbon footprint, Scope 1 and 21
Tonnes CO2e
0
0
0
,
4
4
4
,
2
6
0
0
0
,
6
6
8
,
1
5
0
0
0
,
8
7
5
20202
0
0
0
,
9
1
6
,
2
8
0
0
0
,
5
9
9
,
1
7
0
0
0
,
3
2
6
20193
0
0
0
,
5
9
6
,
2
0
0
0
,
0
3
9
,
1
0
0
0
,
5
6
7
20184
Total
Scope 2 (indirect emissions from the energy we buy)
Scope 1 (direct emissions from our sites)
0
0
0
,
7
3
2
,
3
0
0
0
,
9
1
1
,
2
0
0
0
,
8
1
1
,
1
2008
1 While we usually exclude our London Head Office from these figures because its environmental impact is negligible,
we have included it here to meet the UK’s Streamline Energy and Carbon Reporting (SECR) requirements.
2 UK use represents 0.016%.
3 UK use represents 0.014%.
4 Restated to reflect the sale of our Kimstad, Sweden facility in 2019.
5 UK emissions represent 0.052%.
6 UK emissions represent 0.003%.
7 UK emissions represent 0.052%.
8 UK emissions represent 0.004%.
62 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
USING WASTE BENEFICIALLY
PROGRESS AGAINST 2030 TARGET
By 2030, 100% of our waste
will be beneficially used, with an
ambition to reach 75% by 2025.
2020
69%
2019
61%
2030
target
100%
PERFORMANCE AGAINST 2020
TARGET
Waste to landfill
Tonnes per 1,000 tonnes of production
2020
2019
2018
2008
6.32
9.16
9.02
10.10
Most of our waste is organic matter that
comes from the manufacturing process at
our four large corn wet mills in the US and
our two citric acid plants in the US and
Brazil. In most cases, it can be beneficially
used, for example to generate energy or as
nutrients for local farms. This allows us to
improve not only our own environmental
impact, but that of the communities around
us too.
EXCEEDING OUR 2020 WASTE TARGET
Our first waste target for the years up to
2020 (from a 2008 baseline) was to reduce
waste to landfill by 30%. We were delighted
that we exceeded our target, with a 37%
reduction. This was helped by significantly
decreasing waste generated at our
Loudon, Tennessee plant. By pressing
water out of the organic solids from our
process water, we were able to reclaim
those nutrients for our feed co-product,
diverting it from landfill and adding value
to our products.
GOOD PROGRESS TOWARDS OUR 2030
WASTE TARGET
Our new 2030 waste target is broader in
scope. Where our 2020 target focused on
minimising landfilled waste, our 2030
target considers all waste generated by
our operations to ensure that 100% has a
beneficial use. We have an ambition to hit
75% by 2025. Our 2019 baseline was 61%
beneficial use, and this year, we made good
progress, reaching 69%.
In 2020, we’ve focused on expanding
our relationships with local partners
and identifying new opportunities to
beneficially use our main waste streams
primarily through land application,
renewable energy generation, animal
nutrition and composting.
HIGHLIGHTS OF GOOD PRACTICE
While our large US corn wet mills and our
citric acid plants generate the bulk of our
waste, all our sites, no matter how large or
small, have a role to play in achieving our
target. Each site has an annual target for
waste management and reduction. Some
already beneficially use nearly all the
waste they generate, while many have
taken other small actions to improve their
environmental performance, engaging
employees to make positive environmental
choices, including switching from
single-use plastic, such as coffee and
water cups, to more sustainable alternatives.
For example, our London, UK office
switched from paper towels to hand dryers
in the toilets, and eliminated single-use
cups. Another small but effective change
was the installation of a rubbish crusher
at our Noto, Italy site, which compresses
cardboard and paper waste, making it
easier for it to be recycled.
LOCAL WASTE SOLUTIONS
Teams at our Lafayette and Sagamore
plants in Indiana, USA have played a
major part in transforming the way we
manage our waste. Working with local
agribusiness Bio Town Ag, they’ve
ensured that the key waste streams
from these two plants are beneficially
used. Our partnership benefits us
both as they use what we cannot use
to make compost for local farms and
gardens, to provide nutrition and
bedding for its livestock, and as
renewable energy sources for its
anaerobic digester that generates
electricity for the local grid.
TATE & LYLE PLC ANNUAL REPORT 2021
63
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
USING LESS WATER
PROGRESS AGAINST 2030 TARGET
By 2030, we’ll have reduced
water use by 15%.
2020
1%
2019
0%
2030
target
15%
PERFORMANCE IN 2020
Water use
Cubic metres per tonne of production
2020
2019
20181
2008
4.53
4.56
4.52
4.60
1 Restated to reflect the sale of our Kimstad, Sweden
facility in 2019.
Corn wet milling is a water-intensive
process and many of our plants are located
close to rivers or lakes. Water is a shared
resource, which means we need to ensure
our use is sustainable not only for
ourselves but for our local communities
as well.
Our new target, to reduce our water use
by 15% per unit of production by 2030, is
perhaps the most challenging of our new
environmental targets. So it’s encouraging
that, in this first year of setting this target,
and while we’re working on identifying
bigger projects, we still made solid
progress, reducing water use by 1%. This
was due entirely to engaging our people
around the importance of the target, and
their efforts to improve our processes
despite the constraints of the pandemic
on ways of working. Our teams are now
looking at where they’re using water, the
inputs and outputs, with a view to finding
further efficiencies.
PILOTING WATER RECYCLING
TECHNIQUES
Following a two-year global project to
assess water risks and opportunities,
we’ve been working to determine the
investments we will need to make at our
large corn wet milling plants to get us to
our target. Because we make ingredients
for the food industry, quite rightly there are
stringent regulations over how water can
be recycled and reused. So an important
part of our work has been to determine
what we can and can’t do with recycled
water. To support this in a practical way,
we have been testing a mobile water
filtration device, devised by our ICD team,
to pilot recycling techniques. We’ve tested
the device on different production streams
at various plants to see how they work and
therefore what projects would be feasible
at full scale. From this work, and larger
scale filtration testing, we are assessing
capital projects which will enable us to
meet our water use reduction target.
In the meantime, we’ve made good
progress at some sites in improving the
quality of discharged water, and also
recycling water. At our Decatur, Illinois
corn wet mill, we added new filtration
membranes in 2020 to the wastewater
treatment process that have reduced
effluent solids by over 90%. This improves
both the quality of water leaving
the site and enables us to reuse the
water produced.
A SECONDARY BENEFIT OF
ELIMINATING COAL
Eliminating coal from our operations by
2025 will also help us towards achieving
our water reduction target. At our
Lafayette, Indiana plant, the emissions
from burning coal require a lot of
‘scrubbing’ – using considerable quantities
of water to clean the emissions – before
they can be released into the air. Emissions
from natural gas production don’t need
to be ‘scrubbed’, and so that will save
water too.
SAVING WATER WITH
SEAL POTS
A seal pot is a system that enables the
water required to cool and lubricate
pumps to be reused. Installing 53 new
seal pots on our pumps at our plant in
Sagamore, Indiana, US, together with
adjustments to dryer sanitation
schedules, reduced the plant’s water
consumption by over 26 million gallons.
64 TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
SUPPORTING SUSTAINABLE AGRICULTURE
PROGRESS AGAINST 2030 TARGET
SUSTAINABLE CORN AT SCALE
Corn is by far the largest agricultural
raw material we buy. Our sustainable
agriculture target therefore focuses on
corn, namely to maintain sustainable
acreage equivalent to the volume of corn
we buy globally each year, currently
1.5 million acres, and through partnerships
to accelerate the adoption of conservation
practices. This commitment is fundamental
to our overall ability to meet our Scope 3
greenhouse gas emissions reduction target
because of the significant proportion of our
climate impact that comes from growing
corn. And so, if our usage increases, we
will enrol more acres. This long-term
commitment is important because changes
in agricultural practices don’t happen
quickly, and measuring their impact
takes multiple growing seasons, given
uncontrollable factors such as the weather.
We first achieved our target in 2019, when
we succeeded in enrolling 1.5 million
acres of corn in the US Midwest in our
sustainable agriculture programme with
Truterra LLC, the sustainability business
of Land O’Lakes, a leading US resource
stewardship solutions provider. The first
of its kind in our industry, this programme
aims to help farmers understand the
impact conservation practices will have
on their fields and their profitability, and
to support farmers in adopting them.
Our target has wider significance too
because sustainable agricultural practices
aren’t just about their environmental
impact – they’re about supporting farmers’
livelihoods and local communities.
We’re also active members of the US Corn
Refiners Association and Field to Market,
the US alliance for sustainable agriculture
which helps define, measure and promote
sustainability in US agriculture, particularly
for row crops such as corn. Our partnership
with Truterra continues to be the largest
registered continuous improvement
project with Field to Market. We also work
closely with key customers to enable them
to meet their responsible sourcing
commitments and realise their climate
change goals.
Second year of results of our corn
programme with Truterra
In practical terms, the Truterra™
platform establishes the environmental
sustainability baseline for each acre in the
programme, working with the farmers to
understand the data and make informed
decisions on how conservation practices
could improve soil and water quality, and
their impact on field profitability. The
programme has been running for three
years and continues to support 1.5 million
acres, more than 22,000 fields and over
1,800 growers. While we have 1.5 million
acres in the programme, we report results
from ‘retained acres’ which are those
acres that were in the programme in 2019
and 2020. Retained acres in 2020 were
1.24 million, representing an 86% grower
retention rate.
While having a programme of this size has
its advantages, it also has its challenges,
not least driving change on such a large
scale, especially during the Covid-19
pandemic which made working directly
with farmers more difficult, although we
made the best use we could of virtual
meetings. The results from retained acres
in 2020 bear this out, with a modest
improvement during the year:
• Greenhouse gas emissions reduced by
2%, equivalent to removing 2,430 cars
from the road.
• Soil quality improved by 2%, as
measured by the Soil Conditioning Index,
while topsoil erosion reduced by 1%.
• Nitrogen use efficiency continues to be
considered advanced within the industry
at 0.93 pounds of nitrogen per bushel of
corn, a 1% increase from 2019.
This year’s work has given us a better
understanding of the challenges growers
face, and we are shifting our focus to place
conservation agronomists to work directly
with growers to accelerate change. To
date, along with the Truterra network,
NGOs and our customers, we have placed
five conservation agronomists within our
enrolled acres.
SUPPORTING SUSTAINABLE STEVIA
Following our acquisition of the
stevia business, Sweet Green Fields, in
November 2020, we launched a stevia
grower outreach programme in China in
partnership with NGO Earthwatch and
support from Nanjing Agricultural
University.
Support 1.5 million acres of
sustainable corn equivalent to the
volume of corn we buy globally
each year.
1.5m
acres maintained
The programme was developed following
the 2019 assessment of the impact of our
stevia supply chain which identified several
opportunities for improvement in farming
practices. The programme’s focus is to
help stevia growers in China minimise
their environmental impact and gain
greater economic benefit from the farming
of this leaf which is used to produce a
low-calorie sweetener. The programme
has begun by training small-scale farming
families in Dongtai, Eastern China, to
modernise farming practices and achieve
sustainability accreditation for their stevia
over time.
SUPPLIER AUDIT PROGRAMME
Aside from focusing on sustainable
agriculture, we are looking closer at our
entire supply chain. This year, we are
developing a wider supplier audit
programme to monitor all our suppliers
on sustainability issues – not just
environmental, but key corporate social
responsibility topics as well. We also began
developing a risk assessment to help us
prioritise which suppliers to focus on and
where, so we concentrate our audit
programme on the areas of highest risk.
Our sustainable agriculture
programme, with its focus
on environmental impact as
well as livelihoods, is the
perfect blend of two pillars
of our purpose: caring for
our planet and building
thriving communities.
Anna Pierce
Director, Sustainability
TATE & LYLE PLC ANNUAL REPORT 2021
65
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
INTRODUCTION
We are pleased to present our first report
under the Task Force on Climate-related
Financial Disclosures (TCFD) framework.
As recommended by the TCFD, we have
set out key disclosures around four areas
that represent the core elements of how
organisations operate: governance,
strategy, risk management, and metrics
and targets. These areas are interlinked
and inform each other.
GOVERNANCE
The Board has responsibility for oversight
of our sustainability strategy, including
climate change. The Board considers
climate-related matters when reviewing
and guiding core components of
commercial strategy, such as business
plans, annual budgets, and major capital
expenditure.
Our Chief Executive, Nick Hampton, is
responsible for the Group’s preparedness
and response to climate-related risks and
opportunities. He is directly supported
in that task by our President of Global
Operations, our Executive Vice President
of Corporate Affairs, and the Executive
Vice President General Counsel, who
has executive responsibility for risk
management, including climate change.
Our Environmental, Health and Safety
(EHS) Advisory Board, which includes our
Chief Executive and an external expert,
reviews the progress of our environmental
programme and supporting goals,
including those related to climate change.
It meets quarterly and reports to the
Board at least twice a year.
Sitting within Global Operations, our
dedicated EHS function develops and
manages our environmental programme,
interacting and working with stakeholders
throughout our value chain to accelerate
positive action. The function holds regular
meetings with members of the Executive
Committee to discuss our environmental
programme and our approach to climate
change, including progress against our
climate-related targets. Updates on
progress are also provided to the Board
and the EHS Advisory Board at least twice
a year.
The Risk Committee, a sub-committee
of the Executive Committee, oversees
the operation of our enterprise risk
framework, including risk management
policies and practices. The Committee
66 TATE & LYLE PLC ANNUAL REPORT 2021
reviews updates from an internal
working group established in 2020 to
align processes and disclosures more
fully with the TCFD recommendations.
The Committee updates the Board at
least annually.
STRATEGY
Potential impacts of climate risks and
opportunities
In line with TCFD principles, during the
year we worked with climate change and
sustainability specialists from AECOM
to conduct a comprehensive climate
change risk assessment to better
understand potential impacts from
physical climate risks and the transition
to a low-carbon economy.
The assessment considered risks and
opportunities over three time horizons,
and exposure to potential physical and
low-carbon transition impacts under
greenhouse gas and temperature
scenarios (i.e. Representative
Concentration Pathways) modelled by
the Intergovernmental Panel on Climate
Change. In line with our risk management
criteria, potential financial materiality was
determined by considering the likelihood
of the hazard occurring and the nature and
magnitude of its impact on the business.
Physical risks
Potential physical risks were considered
over the short-term (2020-2039),
medium-term (2040-2059) and long-term
(beyond 2060).
• Production facilities: In the short term,
the potential risks most likely to impact
certain production facilities include
more frequent and severe flood events,
tropical storms, wildfires and droughts.
In the medium- and long-term, these
trends are predicted to continue, with
some additional sites affected over time.
• Distribution network: In the short-term,
risks facing our distribution network
(primarily road, rail and sea freight)
include more frequent and severe
extreme cold weather, floods and
wildfires. In the medium-term, it is
predicted that the frequency and
severity of events will continue to
increase. In the long-term, as the
trend continues, risks may also arise
due to more frequent and severe
tropical storms.
• Corn supply: In the short-term, potential
risks facing major corn supply regions
include changes in total annual
precipitation, increased seasonal
variability, and more severe droughts.
In the medium- and long-term, along
with higher temperatures, these trends
are set to continue with additional
regions affected over time.
If we do not continue to take proactive
measures to mitigate such issues, our
business could potentially be affected by,
for example, operational disruptions, asset
damage, increased raw material and utility
costs, and transport delays.
Transition risks
Potential transition risks were considered
over the short-term (2020-2025),
medium-term (2026-2035) and long-term
(beyond 2035).
• Short- to medium-term: Potential
financial impacts are most likely to arise
through predicted changes in regulation,
policy and technology. Specifically,
compliance with new and emerging
legislation for carbon tax and pricing
mechanisms, and a global move towards
lower emissions modes of transport.
• Long-term: Transition risks may arise
through increased utility and supply
costs (e.g. where lower carbon
alternatives are not available), and
continued market expectations for
low-carbon production.
The need for transition to a low-carbon
world also presents potential
opportunities for the Group; for instance,
an increased market demand for low-
carbon plant-based products over the
short- to medium-term. With our ongoing
efforts towards lower-carbon production,
including renewable and cleaner energy,
we will continue to proactively respond to
emerging regulation with interventions
that deliver both operational efficiency and
reduce our exposure to variable fossil fuel
prices and carbon taxes.
Capital investments
One of the three pillars of our purpose of
Improving Lives for Generations is caring
for our planet. In line with our purpose,
assessing the environmental impact or
benefits of capital investments are part of
our capital approval process. For example,
we are in the process of a multi-year
investment programme of more than
US$150 million to eliminate coal from our
operations as part of our climate action
STRATEGIC REPORT
commitments, and to increase operational
efficiency. These investments include
replacing coal-generated power with
natural gas-fired systems and boilers at
our US facilities in Loudon, Tennessee,
Lafayette, Indiana, and Decatur, Illinois.
RISK MANAGEMENT
Our Board recognises the significant
impacts posed by climate change and the
consideration of climate-related issues
is part of our global enterprise risk
management (ERM) system. Climate-
related issues are predominantly captured
as sub-risks through the Principal Risk on
‘Disruptive Forces’.
We are currently updating aspects of the
ERM system to reflect findings from the
recent climate change risk assessment.
This includes integration of more explicit
definitions for climate sub-risks and an
enhanced process to consider longer-
term risks and opportunities. This forms
part of ongoing efforts to stimulate
discussion and find new and more
innovative solutions to climate-related
matters in the wider organisation,
supported by education and training.
METRICS AND TARGETS
We have been measuring, managing, and
reporting our greenhouse gas (GHG)
emissions for many years. Using a 2008
baseline, we set a target to reduce our
Scope 1 and 2 GHG emissions by 19% per
tonne of production by 2020. We exceeded
this target with a 25% reduction.
In May 2020, we announced a set of
ambitious new environmental targets and
commitments to assess and manage our
performance, including in climate-related
areas. These targets are aligned to our
purpose of Improving Lives for Generations.
Our environmental targets are, by 2030,
to deliver:
• 30% absolute reduction in Scope 1 and 2
GHG emissions, with an ambition to
reach a 20% reduction by 2025
• 15% absolute reduction in Scope 3 GHG
emissions
• 100% of waste to be beneficially used,
with an ambition to reach 75% by 2025
• 15% reduction in water use
In adopting these targets, we also
committed to:
• Eliminate coal from our operations
by 2025
• Establish our Scope 1 and 2 and Scope 3
GHG emissions reduction targets as
science-based targets
• Maintain sustainable acreage equivalent
to the volume of corn we buy each year,
currently 1.5 million acres, and through
partnerships accelerate the adoption of
conservation practices
Our GHG emissions reduction targets
were validated by the Science Based
Targets initiative (SBTi) in September
2020, with our Scope 1 and 2 GHG
emissions reduction target at the ‘Well
below 2°C’ level. In the first year since we
set our new 2030 targets, we reduced our
Scope 1 and 2 GHG emissions by 7%.
Our Scope 3 emissions were also reduced
by 0.5%.
These new targets and commitments
build on the steps already taken to
enhance positive impacts across our
entire value chain, in line with our purpose
and risk management process.
We have established a team to work
through what it would take to reach net
carbon zero by 2050. This work is ongoing
and we expect to report on our progress in
next year’s Annual Report. Our continued
efforts to better understand and define
our Scope 3 GHG emissions across our
value chain will provide critical
information for achieving our net zero
carbon ambitions.
More details of our environmental metrics
and targets, including performance during
2020, can be found on pages 60 to 65.
ROADMAP FOR TCFD DISCLOSURE
Set out below are some of the actions we took last year and will be taking in the coming year to further align disclosure and our
processes with TCFD recommendations.
FINANCIAL YEAR 2021
FINANCIAL YEAR 2022
Governance
• Board reviewed progress on 2030 environmental
• Board to review progress on 2030 environmental
targets and sustainability programme
targets and sustainability programme
• Roadmap for TCFD disclosure agreed by Risk
Committee
• Progress towards delivery of roadmap for TCFD
disclosure to be reviewed by Risk Committee
Strategy
• Capital investment decisions linked to
environmental impact and benefits
• Further integration of climate-related data into
long-term strategic decision-making
Risk Management
• Climate change risk assessment (CCRA)
• Continue to integrate longer-term climate risks into
undertaken
ERM processes
• ERM system updated based on findings from
• Conduct a materiality assessment
the CCRA
• Water risk assessment undertaken in the 2020
financial year integrated into ERM system
Metrics and Targets
• New 2030 environmental targets announced
• GHG emissions targets validated by the SBTi
• Detailed assessment of Scope 3 GHG emissions
• Work towards setting a renewable energy
(Scope 2) target
• Continue to report on progress against 2030 targets
TATE & LYLE PLC ANNUAL REPORT 2021
67
RISK REPORT
TAKING OWNERSHIP
OF RISK
Lindsay talks about how the
pandemic has focused people’s
minds on risk and how local teams
have taken ownership of risks in
their own areas.
This year showed that we can continue
business as usual, even when circumstances
are far from it.
Lindsay Beardsell
Executive Vice President, General Counsel
Covid-19, we didn’t lose sight of this
important work. We’ve had to be
creative about how we carried out risk
assessments, compliance checks and
audits, bringing in local people where
restrictions allowed, and carrying out
online ‘visits’ where work could be done
that way. It showed us that we can
continue business as usual, even when
circumstances are far from it. In some
cases, we’ve even benefited because it’s
been much easier to get a wider group of
people ‘in a room’ together, leading to
deeper and more productive conversations
around risk.
Despite the challenges of Covid-19 we
delivered the risk programme we planned
at the start of the year. We completed the
risk assessment work for our new supplier
audit programme, part of which will involve
supplier audits being undertaken by
SEDEX, a not-for-profit organisation that
enables suppliers to share audits with their
customers. We trained our distributors
on our Code of Ethics and carried out a
detailed Climate Change Risk Assessment
with the support of an external party. We
also carried out due diligence work on our
two acquisitions, Sweet Green Fields in
China and Chaodee Modified Starch Co.,
Ltd. in Thailand. Restrictions on travel due
to Covid-19 made this work more
challenging, but no less necessary,
and it has been encouraging to see the
openness of both businesses about the
risks and opportunities they face.
During the year, we implemented
a new, more automated enterprise
risk management system which will
significantly enhance how we manage
risk and make it easier for our local
teams to identify risk and monitor
mitigating actions.
OUR FOCUS FOR THE YEAR AHEAD
One positive outcome of the pandemic
is that it has led us to engage more actively
around the business on strategic risk.
Another, which is critical for our future,
is how our local teams have really stepped
up and owned risk in their own areas, and
seen how they can benefit from doing so.
The main task for the coming year is less
about process, and more about helping
our people keep going amidst continuing
uncertainty and to continue to embed a risk
mindset in everything we do.
RESPONDING TO COVID-19
There’s no doubt that the biggest risk
we’ve faced this year – as for everyone
– has been keeping our people safe amidst
a global pandemic, while supporting the
food supply chain by keeping our
operations running and serving our
customers. Our approach to managing
Covid-19 reflects our approach to risk
more broadly, namely that we consider
things in the round, guided, as always,
by our purpose of Improving Lives for
Generations. Risk management can often
feel very compliance-driven but a true
understanding of risk is a human
experience, because it’s about how people
behave and why.
This wider consideration of our people and
their individual circumstances came to the
fore this year like never before, with the
almost overnight transition to working
from home for office-based staff, the need
for new safe-working protocols at our
plants and in our labs, and the need to find
new ways to interact with and support our
customers. All of this while people were
dealing with their own unique challenges
at home. With the pandemic manifesting
itself differently in every location, we had
to delegate decisions far more to our
teams on the ground, under the umbrella
of risk-based principles set at global level
by the Global Pandemic Response Team.
Last year, we said we wanted to be more
agile and quick to respond – and this year
has certainly proved that we can be.
A CREATIVE APPROACH TO MANAGING
RISK DURING COVID-19
Housekeeping is an important element of
risk management – risks that are well
known and similar in all companies, but
nonetheless need proper management,
checking and auditing. In our focus on
68 TATE & LYLE PLC ANNUAL REPORT 2021
HOW WE MANAGE RISK
We have a single, Group-wide programme to identify, analyse and assess risks,
and then to determine how we manage, control and monitor them.
THREE LINES OF DEFENCE
We manage significant risks at three distinct levels.
1 RISK OWNERSHIP AND CONTROL
Our business and operational managers identify risks and create policies and
procedures to maintain effective controls day-to-day. They also update our
front-line controls regularly in response to our changing risk profile.
2 MONITORING AND COMPLIANCE
Our Group functional teams help management to monitor key risk areas and make
sure the first line of defence is working as intended. These teams include risk
management, finance, quality, ethics and compliance, and environment, health
and safety. They identify current and emerging risks, and ensure we address any
changes in the risk landscape in good time. They also consider what the effects
might be if a combination of certain risks materialises together.
3 INDEPENDENT ASSURANCE
Our Group Audit and Assurance team (internal audit) and external assurance
providers give independent assurance over our risk management, control, and
governance processes and systems.
OVERSIGHT
We oversee risk management at Group and operational levels to ensure it is governed well.
BOARD
Our Board has overall responsibility for how we manage and control risk, and for
setting the Group’s risk appetite. Every year, the Board thoroughly assesses our
principal risks to determine the nature and extent of risk necessary to achieve our
strategic objectives. They also evaluate emerging risks.
AUDIT COMMITTEE
Our internal audit plan and risk plan, reviewed and approved by the Audit Committee,
is based on where our operational and Group risks lie. The audit plan is part of our
wider assurance plan which involves our enterprise risk management, quality, and
ethics and compliance teams.
EXECUTIVE COMMITTEE
Executive Committee members oversee and direct risk management in line with
their respective responsibilities. They review our principal risks and risk appetite,
ensuring these remain relevant. They also evaluate the potential impact of
emerging risks.
RISK COMMITTEE
Our Risk Committee, which approves the annual risk assessment plan, reviews
and challenges how the business assesses risk, looking at both single risks and
combinations of risk. Each quarter, it reviews principal and emerging risks and
progress against actions, and conducts a deep dive into agreed risk areas.
STRATEGIC REPORT
OUR APPROACH TO RISK
Identifying risks
Each year, we hold bottom-up and
top-down reviews of our principal risks,
namely those that could threaten our
business model, strategy, performance,
solvency or liquidity, looking at a three-
year horizon. The bottom-up process
involves a rolling programme of
workshops held around the business,
facilitated by our risk team. These
workshops help us to identify current and
potential risks, which we then collate and
report through functional and divisional
levels to our Risk Committee and Executive
Committee. We also consider any areas
and behaviours which could bring about
new risks, and different combinations of
risk with other potentially larger impacts.
Through these processes, we identify
our main business, strategic, financial,
operational and compliance risks and
create action plans and controls to mitigate
them to the extent appropriate to our
risk appetite.
Principal risks
The top-down review involves the Board
assessing the output of this work,
confirming that our principal risks have
been captured and addressed, and that
emerging risks have been considered. Our
risk profile does of course evolve, and the
Board updates its view of principal risks
accordingly. In the 2020 financial year, the
Board decided to add a new principal risk
in relation to external disruptive forces that
might materially impact our business.
These could include the impact of climate
change and of diseases such as the current
Covid-19 pandemic. This has received
further review over the last 12 months, and
will remain on our principal risk register
moving forward. Therefore, no changes
were made to our principal risks during
the year.
Our Risk Committee reviews our principal
risks regularly – at least every quarter –
and reports to the Board any changes in
the level or velocity of the risks, and the
associated mitigating actions.
Our Board reviews the principal risks at
least every six months.
TATE & LYLE PLC ANNUAL REPORT 2021
69
RISK REPORT CONTINUED
Covid-19
The Covid-19 pandemic has presented
significant challenges for the business, its
operations and employees, and actions
continue to be taken to keep our employees
safe, our operations running and our
customers served. With the pandemic
continuing, our Global Pandemic Response
Team and local response teams at every
site continue to manage our overall
response, to ensure business continuity,
and mitigate the risks identified. The Board
receives updates on progress at every
meeting and reviews our overall approach
to ensure it remains appropriate.
The fact that all our production facilities
have remained operational during the
pandemic is a testament to the
commitment and skill of our people, as
well as the effectiveness of the actions
taken. As the pandemic continues to
impact our ways of working, the risk
remains captured in the principal risk
relating to disruptive forces, of which
Covid-19 is a clear example.
Determining our risk appetite
As part of our annual risk assessment
process, our Board and Executive
Committee consider the nature and extent
of our risk appetite. The outcome of this
exercise informs our strategic planning
activities, and helps us to set the level of
mitigation needed to achieve our strategic
objectives – accepting, of course, that
some level of risk is necessary.
Managing risks
Individual members of the Executive
Committee have responsibility for
managing certain risks and their mitigating
controls. Senior management formally
confirms to the Audit Committee once
a year that risks are being managed
appropriately in their areas of
responsibility, and that controls are
in place and effective.
Climate-related risks
The Board recognises the significant risks
posed by climate change and consideration
of these risks is part of our enterprise risk
framework. The increasing importance of
climate change risk was reflected in the
Board’s decision to introduce a new
principal risk last year in relation to
disruptive forces, external events which
could materially impact our business and
operations, including climate change, in
addition to climate change being a core
element of a number of our principal risks.
The Board considers all the Group’s
principal risks, which include risks related
to climate change, at least twice a year.
Our Chief Executive is ultimately
responsible for the Group’s preparedness
and response to climate-related risks and
opportunities. He is supported by our EHS
Advisory Board, which meets four times a
year. The delivery of our purpose, including
our sustainability and climate change
objectives, is part of our strategic
decision-making process, including for
capital investments. During the year, the
Board agreed a refreshed sustainability
programme including new environmental
targets for 2030. More information on our
environmental metrics can be found on
pages 60 to 65.
Task Force on Climate-related Financial
Disclosures
During the year, we brought together
a cross-functional team from around
Tate & Lyle and engaged an external expert
to help us analyse the requirements of the
Task Force on Climate-related Financial
Disclosures (TCFD) and determine how
we can report against them. We also
completed a detailed Climate Change Risk
Assessment. Our first disclosure under the
TCFD framework can be found on pages 66
and 67.
VIABILITY STATEMENT
In accordance with the requirements of
the UK Corporate Governance Code, the
Directors have assessed the viability
of the Group, taking into account our
current position and the potential
impact of the principal risks we face.
Although our strategic plan, which the
Board reviews annually, forecasts
beyond three years, we create a
detailed three-year financial plan.
This plan includes anticipated capital
and funding requirements. For this
reason, the Directors agree that it is
appropriate to assess our viability over
a three-year period to 31 March 2024.
To assess our viability, we stress-tested
our strategic plan under three downside
scenarios which might impact our
potential viability if one or more of the
downside risks set out below were to
occur. We assessed the potential impact
of these scenarios, individually and in
70 TATE & LYLE PLC ANNUAL REPORT 2021
aggregate, both before and after mitigating
actions within our control.
The three downside scenarios modelled
were:
• A major operational failure causing an
extended shutdown of our largest
manufacturing facility;
• The loss of two of our largest Food &
Beverage Solutions customers; and
• A slower recovery from the impact of the
Covid-19 pandemic.
We measured the impact of these risks by
quantifying their individual and aggregate
financial impact on our strategic plan, and
on our viability when set against measures
such as liquidity, credit rating and financial
covenant requirements. We also
considered operational and commercial
impacts. This exercise showed that, over
this three-year period, the Group would be
able to withstand the impact of the most
severe combination of these risks.
At 31 March 2021, the Group has a
strong cash position and committed
and undrawn liquidity of US$1.3 billion,
including a revolving credit facility of
US$800 million, all of which is available
for the entire three-year viability
assessment period. In addition, none
of the Group’s borrowings mature
until October 2023, at which point
US$136 million of external borrowings
mature. Although the Group expects to
be able to refinance these at that time,
given the significant liquidity position,
this viability statement is not contingent
on such refinancing.
Based on this assessment, the
Directors have a reasonable
expectation that we will be able to
continue operating and meet our
liabilities as they fall due between
now and 31 March 2024.
STRATEGIC REPORT
OUR PRINCIPAL RISKS
Link to our priorities
Trend compared with 2020
SHARPEN
ACCELERATE
SIMPLIFY
Increasing
Unchanged
Decreasing
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
STRATEGIC RISKS
1. LACK OF GROWTH IN FOOD & BEVERAGE SOLUTIONS
• Our organic and acquisitive growth plan
• We strengthened our customer offering
Failing to grow Food & Beverage
Solutions would prevent us from
delivering against our targets.
This could reduce our
profitability over both the shorter
and longer term and damage
investors’ view of us.
supports our strategy.
• We have global and regional five-year plans
focused on key categories.
• Our M&A team works closely with Innovation
and Commercial Development (ICD) and
with our divisions to find acquisitions and
partnerships that will help us grow.
• We have incentive schemes and bonus
programmes for customer-facing teams tied
to strategic as well as operational targets.
2. FAILURE TO DEVELOP AND COMMERCIALISE NEW INGREDIENTS
New products are essential to
our ability to lead the industry in
our chosen categories, and thus
to the long-term growth of our
business. Without them, we
might be unable to meet our
customers’ future requirements,
which could damage our
performance and reputation and
result in customers switching to
competitors.
• We have a robust innovation process that,
through internal development and open
innovation, delivers a strong pipeline of New
Products.
• Our ICD team tracks emerging consumer
trends and works closely with commercial
partners to create New Products and
solutions that will deliver growth.
• Our customer-facing teams’ incentive and
bonus schemes include targets for New
Product revenue.
• We have an open innovation team that scouts
for breakthrough technologies.
• We prioritise partnership opportunities with
customers to accelerate development cycles
and bring New Products to market more
quickly.
and presence in Asia with the acquisition of
stevia and tapioca businesses in China and
Thailand, respectively.
• We appointed a new, experienced leader of
our ICD team.
• We created a new region of Asia, Middle
East, Africa and Latin America, under new
leadership, to increase our focus on building
our presence in higher growth markets.
• We continued to simplify the structure of
our customer-facing teams to get closer to
our customers and help commercialise new
products more quickly.
• We launched a number of online tools to
support and connect with our customers
including our Sweetener and Fibre
Universities.
• We launched 13 New Products from our
innovation pipeline.
• We increased the value of our innovation
pipeline by 18%.
• Our marketing centre of excellence increased
the monitoring of global trends and consumer
insights for sharing across our regions.
• We expanded our ICD team into Asia Pacific.
• We launched new online concepts to support
our customers including the Tate & Lyle
Nutrition Centre and the Collaborate at Home
Kitchen in North America.
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71
RISK REPORT CONTINUED
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
STRATEGIC RISKS CONTINUED
3. INABILITY TO ATTRACT, DEVELOP, ENGAGE AND RETAIN KEY PEOPLE
To be a successful global
business, and to deliver our
strategy, having the right
capabilities and people is critical.
We therefore have a number of
strategies in place to recruit,
develop and retain our people
effectively.
• We have a mix of short- and long-term
• During the pandemic, we significantly
incentives. This includes a bonus scheme
available to a broad population of
employees.
• Our talent development plans give
employees opportunities and training to
build their capabilities and resilience.
• We have initiatives in place to enhance
equity, diversity and inclusion across
the organisation.
• We have a single global performance
management system and talent
planning process.
• We measure progress against cultural
objectives and carry out global employee
surveys that help to tell us what employees
really think about working at Tate & Lyle.
• Our Executive Committee and the Board
plan succession for business-critical roles.
• We encourage open and transparent
feedback from our people so we are able to
react to any challenges that emerge.
expanded our internal communications
programme to connect with our people
working at home and in our plants and
labs, using new initiatives such as virtual
cafés with the Chief Executive and other
senior leaders.
• We implemented a programme to support
the physical and mental wellbeing of our
employees during lockdown.
• We undertook a review of our approach to
equity, diversity and inclusion and developed
a set of priorities and actions, including the
establishment of a new role of Chief Equity,
Diversity & Inclusion Officer and a new
function to support our work in this area.
• We accelerated adoption of e-learning for all
employees by providing access to learning
tools such as LinkedIn Learning, and also
provided an extensive coaching programme
for our top 100 managers.
4. FAILURE TO ADEQUATELY ANTICIPATE AND MINIMISE ADVERSE IMPACTS FROM GLOBAL DISRUPTIVE
FORCES SUCH AS DISEASE, CLIMATE CHANGE, NATURAL DISASTER, TRADE DISRUPTION OR CIVIL UNREST
Global disruptive events could
have a significant impact on our
business and our ability to
conduct manufacturing
operations. This could
materialise at any point along the
supply chain as well as affecting
global demand, capacity or our
customers’ needs.
• We have a global business continuity
management framework to enable effective
recovery from a major disruption.
• Caring for our planet is one of the three
• The establishment of a Global Pandemic
Response Team, together with teams at
our local sites, managed our response to
Covid-19 in order to minimise disruption.
pillars of our purpose, and environmental
considerations are part of how we make
strategic decisions.
• We progressed our sustainability programme
including the publication of ambitious new
environmental targets for 2030.
• Having plants in different regions and
• We continued to strengthen operational
countries means we can serve customers
where practical from elsewhere if a
particular area is disrupted.
• Our Risk Committee oversees emerging
risks to ensure we’re prepared to meet
customers’ needs.
business continuity capabilities and our crisis
management plans.
• We enhanced our strategic planning process
to provide us with greater resilience and
future-proofing against future disruptive
events.
OPERATIONAL RISKS
5. FAILURE TO ACT SAFELY AND OPERATE OUR FACILITIES SAFELY AND RESPONSIBLY
Safety is not just a priority, it’s
foundational at Tate & Lyle.
Failure to comply with laws and
regulations relating to health,
safety and the environment could
result in us being unable to
protect our employees,
stakeholders and the wider
communities in which we
operate. It could also lead to
fines and have a negative impact
on our reputation.
• We have a continuous improvement plan
for Environment, Health and Safety (EHS)
in place at all our sites (Journey to EHS
Excellence, or J2EE). It is visibly sponsored
by the Chief Executive and Executive
Committee.
• Our EHS Advisory Board, which includes
our Chief Executive and an external EHS
expert, receives EHS updates and reviews
performance quarterly. Our Executive
Committee and Board regularly review EHS
performance and progress against J2EE.
• The Incident Review Board conducts reviews
of major, severe or potentially severe events.
• Gensuite, a cloud-based tool, is used
to manage EHS data and facilitate EHS
reporting.
• We put in place strict protocols at all our sites
to ensure we protected our people during
the pandemic including sanitation, social
distancing, hand washing and wearing
face masks.
• 26 of our sites have passed tollgate 3 (of
seven) as part of our J2EE programme.
• We continued to invest in our EHS team,
recruiting, developing and embedding safety
engineers at our major plants.
• We utilised virtual safety assessments in light
of Covid-19 to ensure we maintained progress
with our safety programme.
• We integrated food safety, product quality and
site security into the responsibilities of our
EHS team.
• We added employee wellbeing into the J2EE
programme.
72 TATE & LYLE PLC ANNUAL REPORT 2021
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HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
OPERATIONAL RISKS CONTINUED
6. FAILURE TO OPERATE OUR PLANTS CONTINUOUSLY, MANAGE OUR SUPPLY CHAIN, AND MEET HIGH
STANDARDS OF CUSTOMER SERVICE
There are many risks in
operating plants which could
cause breaks in production
leading to disruption and a
deterioration in customer
service. This, in turn, could
damage our ability to grow
our business.
• Our plant network has a preventative
maintenance programme.
• We have an ongoing programme to improve
our global supply chain processes.
• Business continuity capabilities enable
us to supply products to customers from
alternative sources quickly if there’s a
natural disaster or major equipment or
plant failure.
• Our customer service team is part of Global
Operations so works closely with our plants,
enabling us to be agile and responsive.
• We have contingency plans to manage
disruption such as extreme winter weather
to the extent possible.
• We put in place strict hygiene protocols
at all our sites to ensure our people were
protected and our plants kept running
during the pandemic.
• We introduced new working protocols to
enable major capital projects to continue.
• We further developed our approach to
business continuity.
• The continuous improvement programme
continued to operate despite the challenges
of the pandemic delivering 3% increase in
productivity benefits.
• We continued our three-year programme
to demolish old and potentially unsafe
structures at our manufacturing sites.
7. FAILURE TO MAINTAIN THE QUALITY AND SAFETY OF OUR PRODUCTS
Poor quality products could
affect safety and also damage
our reputation and relationships
with customers. This could
have a negative effect on our
performance and corporate
reputation.
• We have strict quality control and product
• We embedded our centralised recipe
testing procedures.
• We regularly test our recall process.
• We have a third-party audit programme,
supplemented by internal compliance audits.
• We assess our raw material suppliers,
tollers and third-party warehouses for food
safety and quality risks.
• We have a programme to manage allergens
in our supply chain and ensure our
ingredients are either free from allergens or
that any allergens are disclosed.
• Our Quality Incident Review Board
investigates incidents and shares best
practice across our sites.
management system streamlining how
we manage products and ingredients.
• We continued to ensure compliance with
the US Food Safety Modernization Act across
our plants.
• We manage cross-contamination risk at
our plants by using the US Food and Drug
Administration (FDA) food defence plan
builder.
• Having combined the leadership of the
Quality and EHS functions last year, we
continued to leverage the strengths of the
J2EE programme to apply them to the Global
Quality Standards.
8. INABILITY TO MANAGE FLUCTUATIONS IN THE PRICE AND AVAILABILITY OF RAW MATERIALS, ENERGY,
FREIGHT AND OTHER OPERATING INPUTS
• We strengthened our procurement resources
regionally to better manage local market
variances under a global centralised
management structure.
• Our transportation procurement and logistics
teams merged to better manage supplier and
customer service.
• We leveraged new technologies such as
Oracle Transportation Management System
to manage freight more efficiently and cost
effectively.
Fluctuations in crop prices could
affect our margins. These
changes could stem from things
like alternative crops, co-product
values and varying local or
regional harvests because of, for
example, weather conditions,
crop disease, climate change or
crop yields. In some cases, due
to the basis for pricing in sales
contracts or due to competitive
markets, we may not be able to
pass the full increase in raw
material prices, or higher energy,
freight or other operating costs,
on to our customers. Our
margins might also be affected
by customers not taking
expected volumes.
• We have strategic relationships and
multi-year agreements with suppliers and
trading companies.
• Our supply and tolling contracts with
customers help us reduce raw material risk.
• Our raw material and energy purchasing
policies increase the security of our supply.
• Our network of corn silos (elevators)
enhances the security of our supply.
• We manage our US corn position on a net
basis, which includes operating within
certain pre-approved limits on inventories of
corn and co-products as well as executory
contracts for the purchase of corn and sale
of corn-based products.
• As part of this risk management strategy,
the risk of fluctuations in prices of certain
commodities (mainly corn) is also partially
managed through the use of certain
derivatives (mainly corn futures sold and
purchased on the Chicago Mercantile
Exchange).
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RISK REPORT CONTINUED
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
OPERATIONAL RISKS CONTINUED
9. FAILURE TO MAINTAIN THE SECURITY OF OUR INFORMATION SYSTEMS AND DATA
A cyber security breach, whether
stemming from human error,
deliberate action or a technology
failure, could lead to unauthorised
access to or misuse of our
information systems, technology
or data. This, in turn, could result
in harm to our assets, data loss
and business disruption – and
could bring legal risks and
reputational damage.
• Our cyber security programme focuses on
maintaining and strengthening our defences
in terms of our processes, people and
technology.
• We run compulsory cyber security training.
• We have robust cyber security defences
including a continuous programme to
detect threats and vulnerabilities, and we
undertake independent penetration tests.
• Our plants run on separate IT systems which
• With many people working from home due to
the pandemic, we strengthened our firewalls,
introduced remote working technology such
as MS Teams, invested in new equipment
and introduced stricter password security to
ensure people could work safely remotely.
• We held a Cyber Security Awareness month
to educate employees on cyber risks and
security.
• We strengthened our Cyber Security
increases their resilience.
• We have a 24/7, third-party security
operations centre to deal promptly with
any issues.
Incident Response Plan including critical
breach scenario exercises and aligned it
to our Company-wide risk and controls
management programme.
LEGAL, REGULATORY AND GOVERNANCE RISKS
10. BREACH OF LEGAL OR REGULATORY REQUIREMENTS INCLUDING OUR CODE OF ETHICS
If we don’t meet our legal and/or
regulatory obligations, our
relationships with customers are
likely to suffer, and we could be
subject to contractual claims,
threats to our licences and, in
extreme cases, risks to our
directors and officers. It could
also affect our performance and
corporate reputation.
• Our legal and regulatory teams work
closely with our commercial teams to
identify legal and regulatory risk and provide
advice and solutions.
• We monitor legal and regulatory
developments regularly to make sure we
know what could affect Tate & Lyle.
• We review our key legal policies regularly.
• We run a legal and ethics and compliance
training programme.
• We implemented a document management
system to facilitate better ways of working
that are easier to audit.
• We strengthened our contract documentation
processes including the tracking of agreed
terms and conditions, and provided training
for sales teams.
• We provided training to our global
procurement team on legal policies including
contract training.
• We have a third-party whistleblowing
• We continued to provide legal, ethics and
service that gives our employees a way to
raise concerns anonymously if they’re not
comfortable raising them internally.
• We have lawyers in each region to work
with commercial colleagues to identify and
mitigate legal risk from the bottom up.
compliance training across the organisation
as part of our annual training plan.
• We provided anti-trust/competition training.
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HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
LEGAL, REGULATORY AND GOVERNANCE RISKS CONTINUED
11. FAILURE TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL FINANCIAL CONTROLS
Without effective internal
financial controls, we could be
exposed to the risk of fraud and
error in our financial reporting as
well as losses from events which
may then affect our performance
and ability to operate.
• We substantially completed the roll-out of
our single SAP platform across the Group.
• We continued to invest in our financial
controls function, expanding the team and
setting up centres of excellence within our
Global Shared Services Centre in Poland.
• We appointed a financial controller focused
on Global Operations and financial controls
across our plant network.
• We rolled out our Finance Excellence
programme including an end-to-end review
of key financial processes and how we can
better use automation.
• We established an end-to-end process
owner forum.
• We have an established framework of
financial policies and standards supported
by procedures and controls over key
processes – in many instances these
controls are automated and we maximise
the use of preventative controls.
• The design and operating effectiveness of
controls are monitored on an ongoing basis
and the results are reported twice a year to
the Executive Committee.
• We have several forums to monitor and
manage our financial controls effectiveness,
such as our quarterly regional Control
Environment Councils chaired by the
relevant General Manager.
• The Chief Executive and Chief Financial
Officer review the business and financials
monthly.
• At both the half year and the end of the
financial year, confirmation is provided to the
Executive Committee, the Audit Committee
and the Board that minimum control
standards are operating effectively.
• Our well-resourced Group Audit and
Assurance team provides independent
assurance to management and the Board.
12. CHANGES IN CONSUMER, CUSTOMER OR GOVERNMENT ATTITUDES TO OUR PRODUCTS
The regulatory status or
perception of our ingredients
could be affected by things like
changes in customers’ or
consumers’ attitudes, changes
in food laws and regulations,
and/or campaigns targeted
at specific ingredients or
technologies. These could affect
our ability or freedom to operate.
• The science behind our ingredients (for
example, health claims or nutritional
impact) is supported by credible sources and
is communicated clearly to and understood
by the relevant regulatory authorities.
• Our global regulatory team, supported by
external consultants, monitors any local
regulatory requirements that affect
our products.
• Our global nutrition team initiates and
• We continued to develop our regulatory team
in the Asia, Middle East, Africa and Latin
America regions to strengthen relationships
with regulators in these markets.
• We continued to invest in our global nutrition
team with funding for studies supporting the
safety and efficacy of our ingredients.
• We further evolved how the Research
Advisory Group works to align it more closely
with our strategy.
monitors research and publications on the
use and functionality of our ingredients,
and maintains a global advisory network of
health and nutrition clinicians, academics
and experts.
• We work closely with thought-leading
customers around the world to jointly focus
on the science and consumer benefits
of our ingredients.
• Membership of trade organisations gives us
access to broader sources of information
and provides, where necessary, a single
voice for our industry on issues (both
regulatory and public interest) affecting our
ingredients.
• Our Research Advisory Group, comprising
leading scientific experts, reviews key
aspects of our innovation activities and
provides guidance to our team.
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RISK REPORT CONTINUED
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
KEY
TREND
LEGAL, REGULATORY AND GOVERNANCE RISKS CONTINUED
13 FAILURE TO MANAGE EFFECTIVELY CHANGES IN GOVERNMENT REGULATIONS AND/OR TRADE POLICIES
Government actions or policies
could cause changes in tariffs or
customs duties. Governments
could also impose import/export
limitations and other barriers on
our business. These could lead to
additional costs, restrict our
growth and limit our ability to
operate in certain markets.
• We engage with political parties, influencers
and regulatory authorities in the main
countries in which we operate.
• We are an active member of relevant
industry trade associations, such as the
Corn Refiners Association in the US.
• Having plants in different countries means
we can serve customers from elsewhere
where practical if products from certain
markets are restricted or become less
economically attractive.
• We make sure our business is diversified
by continuing to invest in resources and
infrastructure in different markets and
geographies.
• We developed a contingency plan in the event
the UK and the EU did not agree a trade deal.
• We worked with national and state trade
associations in the US to progress our
commercial and sustainability goals.
• We acquired two businesses in the year
based in China and Thailand, expanding our
geographic reach and plant network.
76
TATE & LYLE PLC ANNUAL REPORT 2021
STRATEGIC REPORT
NON-FINANCIAL INFORMATION STATEMENT
The table below sets out where you can find the information as required under the non-financial reporting requirements contained in
sections 414CA and 414CB of the Companies Act 2006.
REPORTING REQUIREMENTS RELEVANT POLICIES
WHERE TO READ ABOUT OUR IMPACT
Environmental matters
Global EHS Policy1
Environment and sustainability
PAGES
60 to 65
Task Force on Climate-related Financial Disclosures
66 to 67
Employees
Code of Ethics1
Global EHS Policy1
Global HR Policy2
Our people
Gender pay gap reporting
Health and safety
Ethics and whistleblowing
Human rights
Code of Ethics1
Our people
Anti-Slavery Statement1
Supplier audit programme
Social matters
Data protection2
Code of Ethics1
Risk Report
Our people
50 to 53
53
58 to 59
52 and 95
50 to 53
65
68 and 74
50 to 53
54 and 55
Board Policy on equity, diversity
and inclusion1
Community involvement
Equity, diversity and inclusion matters
Throughout this Report
Anti-bribery and corruption
Code of Ethics1
Our people
Supplier audit programme
Risk Report
Anti-money laundering and
Anti-Bribery Standard2
Agents and Distributors2
Group Competition (Anti-trust)2
Trade Compliance2
Gifts and Hospitality Standard2
Business model
Non-financial KPIs
Principal risks
Our business model
Our purpose commitments and targets
Gender diversity
Health and safety
Environment and sustainability
Risk Report
50 to 53
65
68 and 74
22 and 23
28 and 29
28 and 51
58 and 59
60 to 65
68 to 76
1 Available on our website www.tateandlyle.com and available to employees through the Tate & Lyle intranet.
2 Available to all employees through the Tate & Lyle intranet. Not published externally.
SECTION 172(1) STATEMENT AND STAKEHOLDER ENGAGEMENT
See page 97 within Governance for our ‘Section 172(1) Statement’. This describes how the Directors have had regard to stakeholders’
interests when discharging the directors’ duties set out in Section 172 of the Companies Act 2006. Our engagement activities with
stakeholders and the impact of those interactions are set out from page 92.
The Board approved the Strategic Report on pages 1 to 77 of this Annual Report on 26 May 2021.
By order of the Board
Claire-Marie O’Grady
Company Secretary
TATE & LYLE PLC ANNUAL REPORT 2021
77
O U R
2 0 2 0
H E R O E S
2020 was a year of incredible challenges.
Given the exceptional performance of so
many people across the Company, we
lauched a special ‘2020 Heroes Awards’
to recognise those people who had gone
above and beyond in supporting their
colleagues, our communities and
customers during the pandemic.
We asked everyone to nominate their
colleagues that most deserved gratitude
and recognition and we received
575 nominations for individuals and
teams. We whittled these deserving
submissions down to 45 nominees, and
30 eventual winners.
These winners are shown on the divider
pages in this Report to celebrate and
recognise their outstanding contributions.
Read more online at www.tateandlyle.com
78 TATE & LYLE PLC ANNUAL REPORT 2021
MICHAEL WAKELEY
Process Lab Coordinator, Hoffman Estates,
Illinois, USA
For being an integral part of keeping our
labs running during the pandemic, fixing
equipment and keeping trial runs moving.
KELLY FOX-PETERSEN
Executive Assistant, London, UK
For showing incredible positivity and
kindness, both as a Mental Health First Aider
and through her active participation in virtual
coffee mornings, employee resource groups
and numerous online community events.
TONY CHAPMAN
Technical Service Engineer, Decatur,
Illinois, USA
For going the extra mile to keep our
customers served and attending their sites in
a Covid-safe manner when issues couldn’t be
resolved remotely.
PATRICIA GONZALES
Project Manager, SAP, Ossona, Italy
For supporting the order-to-cash process
in Europe and leading the implementation
of SAP at her site, collaborating with people
and finding solutions to every problem.
TUMELO NXUMALO
Import Export Controller, Supply Chain,
Johannesburg, South Africa
For always going the extra mile to help
teams and customers, such as helping a
colleague with a sick child transition
comfortably to homeworking.
CLARICE SEAH
Executive Assistant, Singapore
For supporting other teams in Asia,
and ensuring the safety of employees
when returning to our Singapore office
after lockdown.
GOVERNANCE
GOVERNANCE
Board of Directors
Executive Committee
Corporate governance
IN THIS SECTION
80
84
86
101 Nominations Committee Report
104 Audit Committee Report
110 Directors’ Remuneration Report
129 Directors’ Report
131
Directors’ statement of responsibilities
TATE & LYLE PLC ANNUAL REPORT 2021
79
BOARD OF DIRECTORS
OUR BOARD
BOARD COMMITTEES
Certain responsibilities are delegated to
three Board Committees, details of which
are provided on pages 101, 104 and 110.
A Audit Committee
R Remuneration Committee
N Nominations Committee
N
DR GERRY MURPHY
Chair and Chair of the
Nominations Committee
NICK HAMPTON
Chief Executive
VIVID SEHGAL
Chief Financial Officer
Date appointed to Board: September 2014
Date appointed to Board: March 2021
Date appointed to Board: January 2017
Date appointed Chief Executive: April 2018
Independent: Yes on appointment
Aged: 65
Nationality: Irish
Independent: No
Aged: 54
Nationality: British
Date appointed Chief Financial Officer:
April 2021
Independent: No
Aged: 52
Nationality: British
Skills and expertise:
Nick brings a wealth of food industry
insights to the Board. His general
management, financial and operational
experience in senior management roles
in a major multinational food and beverage
business, combined with his experience
in leading transformational projects,
provides him with the skillset required
to inspire and lead the Group.
Current external commitments:
• Non-executive director and Chairman
of the Audit Committee of Great
Portland Estates plc
Previous roles:
Prior to being appointed Chief Executive,
he served as Chief Financial Officer of
Tate & Lyle. Before joining Tate & Lyle,
he held a number of senior roles over a
20-year career at PepsiCo, including
Senior Vice President and Chief Financial
Officer, Europe, and President, West
Europe Region and Senior Vice President
Commercial, Europe.
Skills and expertise:
Vivid brings over 25 years of experience in
financial, operational and transactional
leadership roles which makes him a key
part of our leadership team. Vivid is a
member of the Chartered Institute of
Management Accountants.
Current external commitments:
• None
Previous roles:
Chief Financial Officer of Delphi
Technologies PLC from 2017 until its
acquisition by BorgWarner Inc in 2020. He
previously served as Chief Financial Officer
of LivaNova PLC from 2015 to 2017, and
during a seven-year career at Allergan,
Inc. he held a number of senior financial
positions across the US, Europe, Middle
East and Africa. In his earlier career, he
worked for GlaxoSmithKline, Gillette
Company, Inc. during its acquisition by
Procter and Gamble, Inc. and Grand
Metropolitan PLC.
Skills and expertise:
Gerry started his career in the food and
drinks sector and received his PhD in food
technology. He has held a number of chief
executive roles and has also been an
investor and independent director in a
number of international listed companies.
His significant business and board level
experience and detailed understanding of
UK corporate governance requirements
enable him to provide the Board with
valuable leadership.
Current external commitments:
• Chairman of Burberry Group plc
Previous roles:
Chairman of The Blackstone Group’s
principal European entity (2009 to
September 2019). Senior Managing
Director in Blackstone’s Private
Equity Group (2008 to 2017). CEO of
Greencore Group plc, Exel plc, Carlton
Communications plc and most recently
Kingfisher plc (2003 to 2008). He held
non-executive directorships in Intertrust
NV, British American Tobacco plc,
Invest Europe, Merlin Entertainments plc,
Reckitt Benckiser Group plc, Abbey
National plc and Novar plc.
80 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
A N
JOHN CHEUNG
Non-Executive Director
R N
PATRÍCIA CORSI
Non-Executive Director
A N
PAUL FORMAN
Senior Independent Director
Date appointed to Board: January 2021
Date appointed to Board: May 2021
Date appointed to Board: January 2015
Independent: Yes
Aged: 56
Independent: Yes
Aged: 48
Nationality: Chinese (Hong Kong)
Nationality: Brazilian
Independent: Yes
Aged: 56
Nationality: British
Skills and expertise:
John brings a breadth of food and
beverage experience with a deep
understanding of markets in Asia,
particularly in China. His experience in
senior positions in Asia in multiple
companies and as a CEO enables him to
provide valuable insights into the region.
Current external commitments:
• Chief Executive Officer at Zhejiang Supor
Co., Limited
• Non-executive director at China Feihe
Limited
Previous roles:
President of Wyeth Nutrition Global,
Chairman and CEO of Nestlé Greater
China, VP China at Coca-Cola.
Skills and expertise:
Patrícia brings digital and brand
expertise and significant experience and
understanding of the Latin American
market. She has over 20 years of
experience in global consumer products
throughout the region.
Current external commitments:
• Global Chief Marketing and Digital
Officer at Bayer Consumer Health
Previous roles:
SVP and Chief Marketing Officer, Mexico
for Heineken NV and held various global
brand roles for Unilever as well as
marketing roles for Kraft Foods and
Tetra Pak International in Brazil.
Skills and expertise:
Paul has wide experience in global
manufacturing, commercial, as well as
strategy consultancy and M&A advisory
services. He brings insight to the
commercialisation of innovation pipelines
and the implementation of business-to-
business customer and market-led
strategies in a large multinational
company. His experience as a CEO of a
number of global companies enables him
to provide valuable insights to the Board.
Current external commitments:
• Chief Executive of Essentra plc
Previous roles:
Group Chief Executive of Coats plc and
Low & Bonar PLC. Served as a non-
executive director at Brammer PLC.
TATE & LYLE PLC ANNUAL REPORT 2021
81
BOARD OF DIRECTORS CONTINUED
BOARD COMMITTEES
Certain responsibilities are delegated to
three Board Committees, details of which
are provided on pages 101, 104 and 110.
A Audit Committee
R Remuneration Committee
N Nominations Committee
R N
LARS FREDERIKSEN
Non-Executive Director
Date appointed to Board: April 2016
Independent: Yes
Aged: 62
Nationality: Danish
A R N
ANNE MINTO OBE
Non-Executive Director and Chair of the
Remuneration Committee
A N
KIMBERLY (KIM) NELSON
Non-Executive Director
Date appointed to Board: December 2012
Independent: Yes
Aged: 67
Nationality: British
Date appointed to Board: July 2019
Independent: Yes
Aged: 58
Nationality: American
Skills and expertise:
Kim brings substantial experience in the
food and beverage industry and specific
insights into the US market, having worked
for General Mills Inc. for nearly 30 years.
During her career at General Mills, she
held a number of senior brand and general
management roles, including serving as
President of the Snacks operating division.
She served as Senior Vice President,
External Relations, leading on issues and
crisis management, environmental, social,
governance and global external
stakeholder relations.
Current external commitments:
• Non-executive director of Cummins, Inc.
• Non-executive director of Colgate-
Palmolive Company
Previous roles:
President of the Snacks operating division
at General Mills Inc. and Senior Vice
President, External Relations, from 2010
until retirement in 2018.
Skills and expertise:
As the former CEO of a global speciality
food ingredients business, Lars led a
successful business transformation and
his insights are invaluable to the Board as
Tate & Lyle continues to evolve. He also
brings operational expertise and an
understanding of how to attract and retain
talent in a global business.
Current external commitments:
• Chairman of Matas A/S
• Chairman of Atos Medical AB
• Non-executive director of Falck A/S
• Chairman of the Danish Committee for
Good Corporate Governance
• Chairman of the Hedorf Foundation
• Chairman of PAI Partners SA
Previous roles:
CEO of Chr. Hansen Holding A/S from 2005
until retirement in March 2013, leading
a transformation of the business and a
successful listing on the Copenhagen
stock exchange during that period.
Prior to becoming CEO, he held various
management positions at Chr. Hansen.
Skills and expertise:
Anne’s extensive career in general
management and human resources has
been particularly useful to the Board when
considering succession planning, talent
management, executive remuneration
and other employee-related activities.
She has a detailed understanding of how
to attract and retain global talent, and her
experience on the boards of companies
listed in both London and New York
provides her with a deep knowledge of
global executive remuneration practices
and UK and US remuneration governance
requirements. Anne will be retiring from
the Board of Tate & Lyle at the AGM.
Current external commitments:
• Non-executive director of ExlService
Holdings, Inc.
• Chair of the University of Aberdeen
Development Trust
• Non-executive director of the Court of
the University of Aberdeen
Previous roles:
Non-executive director and chairman of
the Remuneration Committee of Shire PLC
(until April 2018). Group Director of Human
Resources at Centrica plc from 2002 until
retirement in 2011. Prior to that, she held
senior management roles at Shell UK
and Smiths Group plc and was Deputy
Director-General of the Engineering
Employers’ Federation.
82 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
R N
SYBELLA STANLEY
Non-Executive Director
Date appointed to Board: April 2016
Independent: Yes
Aged: 59
Nationality: British
A R N
WARREN TUCKER
Non-Executive Director and Chair of the
Audit Committee
Date appointed to Board: November 2018
Independent: Yes
Aged: 58
Nationality: British
BOARD COMPOSITION
Gender diversity of Directors
As at 26 May 2021
Men
Women
4
7
Skills and expertise:
Sybella has extensive commercial and
financial experience and brings a wealth of
knowledge about the London investment
community and substantial experience
of communicating with this and other
investment communities outside the UK.
Her long career in corporate finance
and M&A is invaluable to the Board’s
consideration of strategic opportunities.
Current external commitments:
• Director of Corporate Finance at
RELX plc
• Non-executive director of The
Merchants Trust PLC
• Co-chair of the Somerville College
Oxford Development Board
Previous roles:
Originally qualified as a barrister and,
before joining RELX in 1997, she was a
member of the M&A advisory team at
Citigroup and later Barings.
Skills and expertise:
Warren is a chartered accountant and
has extensive experience as a former
Chief Financial Officer of a large global
manufacturing group, where he also
co-led the company’s organic and strategic
growth. His experience in large
multinational and business-to-business
organisations across several geographies
and industries enables him to provide
valuable insights to the Board. He also
brings an understanding of the London
investment community and UK
shareholder institutions.
Current external commitments:
• Chairman of TT Electronics plc
Previous roles:
Executive director and Chief Financial
Officer on the board of Cobham plc for
10 years until 2013. Most recently non-
executive director of Reckitt Benckiser
Group plc for a decade until 2020 and
non-executive director and chair of the
Audit Committee of Survitec Topco Ltd.
He also held senior finance roles at Cable
& Wireless and British Airways, and was
a non-executive director and chair of the
Remuneration Committee of Thomas Cook
Group plc and a non-executive director at
PayPoint plc.
Directors’ nationalities
As at 26 May 2021
British
American
Danish
Irish
Chinese
Brazilian
1
1
1
1
1
Tenure of Non-Executive Directors
As at 26 May 2021
Less than 3 years
3 to 6 years
Over 6 years
2
3
6
4
TATE & LYLE PLC ANNUAL REPORT 2021
83
EXECUTIVE COMMITTEE
OUR EXECUTIVE
TEAM
Responsible for delivering
our strategy and achieving
business results.
NATIONALITIES OF THE
EXECUTIVE COMMITTEE
At 26 May 2021
British
American
Argentinian
1
3
5
NICK HAMPTON
Chief Executive
Nationality: British
VIVID SEHGAL
Chief Financial Officer
Nationality: British
Nick became Chief Executive of Tate & Lyle
in April 2018, having joined as Chief
Financial Officer in September 2014. He
brings a wealth of food industry insights
from his 20-year career at PepsiCo. He
has general management, financial and
operational experience through senior
management roles, as well as experience
in leading transformational projects. This
provides him with the skills and attributes
to inspire and lead the Tate & Lyle team.
Vivid joined Tate & Lyle on 1 March 2021
as Chief Financial Officer Designate,
becoming Chief Financial Officer on 1 April
2021. He previously served as Chief
Financial Officer of Delphi Technologies
and LivaNova, and has also held senior
management roles at Allergan, Gillette
and GlaxoSmithKline, working in the US,
Europe and the Middle East. His 25 years
of experience in financial, operational and
transactional leadership roles makes him
a key part of our leadership team. Vivid is
a member of the Chartered Institute of
Management Accountants.
VICTORIA SPADARO GRANT
President, Innovation and Commercial
Development
Nationality: Argentinian/American
Victoria joined Tate & Lyle in November
2020, from the Italian multinational food
company Barilla, where she was the
Chief Global Research Development and
Quality Officer. Victoria has strong R&D,
commercial and customer-facing
expertise having previously held positions
at Mars, Kraft Heinz and PepsiCo. Victoria
has worked and lived in many countries
including in Asia, US, Italy and her native
Argentina. Her extensive experience
driving innovation in the global food and
beverage marketplace is key to delivering
our growth strategy.
LINDSAY BEARDSELL
Executive Vice President, General Counsel
Nationality: British
Lindsay joined Tate & Lyle in September
2018 from GVC Holdings PLC where she
was Group General Counsel. She studied
local and European law in the UK, France
and Germany, giving her a broad
understanding of different legal
environments. Lindsay brings a wide
knowledge of corporate law and practical
legal experience from her early career at
Freshfields Bruckhaus Deringer, as well as
from her years working in FTSE companies
across a diverse range of sectors.
84 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
ANDREW TAYLOR
President, Asia, Middle East, Africa and
Latin America
Nationality: American
Andrew joined Tate & Lyle in 2017 as
President, Innovation and Commercial
Development, having spent 20 years at
management consultancy firm Boston
Consulting Group (BCG), where he was
a Senior Partner and Managing Director,
and led BCG’s Global Innovation Practice.
He took on his current role in October
2020. Andrew’s broad international
experience and deep understanding of
the food industry are key to delivering our
strategy in many of the world’s higher
growth markets.
JIM STUTELBERG
President, Primary Products
MELISSA LAW
President, Global Operations
Nationality: American
Nationality: American
Jim joined Tate & Lyle in 2014 from
Pennsylvania-based PPG Industries Inc.,
where he led its Automotive Coatings
business. Before that, he spent 17 years
with Dow Corning Corporation in a
variety of senior roles including five years
working in Shanghai, China. His wide
global and commercial experience makes
him well-placed to lead our Primary
Products business.
A chemist by training, Melissa joined
Tate & Lyle in 2017 after 20 years in the
oil industry. Before joining us, she was
President of the Global Specialities
Division of Baker Hughes, a GE company.
Prior to that, she held senior executive
management positions in Australasia
and the Gulf of Mexico in areas such as
commercial management, supply chain
and research and technology. Melissa
currently serves as a non-executive
director for Cactus Inc., a US-based oilfield
service provider. Her commitment to
making our operations safe and productive
places to work is making a real difference
across Tate & Lyle.
LAURA HAGAN
Chief Human Resources Officer
ROWAN ADAMS
Executive Vice President, Corporate Affairs
Nationality: British
Nationality: British
Laura joined Tate & Lyle in September 2018
from Dyson Ltd, where she helped the
business grow its global employee base
more than tenfold, influencing the hiring
and promotion of the top team. Her
entrepreneurial spirit and understanding
of how to get the best out of people,
sharpened by previously setting up and
running her own talent business, are
crucial for the development of Tate & Lyle’s
people strategy.
Rowan is the longest serving employee
on our Executive Committee. He joined
Tate & Lyle in 2001 and has since held a
number of senior roles including leading
our global strategy team. He became EVP,
Corporate Affairs, and joined the Executive
Committee in November 2014. His current
responsibilities also include leading our
global sustainability programme. He has
deep knowledge and understanding of the
Company and our industry.
TATE & LYLE PLC ANNUAL REPORT 2021
85
CORPORATE GOVERNANCE
CHAIR’S
INTRODUCTION
While the pandemic remained high
on our agenda throughout the year,
we were nonetheless able to continue
to focus on our key priorities.
INTRODUCTION
In my introduction last year, I spoke about the novel experience
of holding our first Board and Committee meetings remotely
via video conference. Sadly this year, that’s become the norm
since none of us could travel abroad, and we’ve had to adapt
our timetable to accommodate directors in time zones from
the American midwest to Beijing. Some Board members in the
UK have been able to meet in person with appropriate social
distancing, which has been a real bonus. On the positive side
(and I know I speak for my fellow Board members too), while we
have missed the opportunity to meet each other and others in the
business in person, the online forum has worked well and we are
confident that our governance remains robust.
OUR PRIORITIES DURING THE YEAR
At the start of the financial year, our focus was on navigating the
Covid-19 pandemic. To that end, we scheduled additional time
to learn how Nick and the team were managing the safety of our
people and plants and to understand the potential impact on
our business from lockdown measures around the world. As
I mentioned in my statement in the Strategic Report, my Board
colleagues and I were soon reassured by the leadership team’s
quick response and, during the course of the year, were very
impressed with their continuing excellent management of this
unprecedented crisis. Our purpose was clearly a guiding light for
everyone during the year. And so, while the pandemic remained
high on our agenda, we were nonetheless able to continue to
focus on our key priorities: our strategy; building our business
in our growth markets and developing relationships with
stakeholders despite the restrictions we all faced.
Aside from these priorities, we also considered the usual
subjects on the Board’s calendar: financial performance,
risk management and productivity initiatives; environmental,
health and safety matters; and innovation and R&D initiatives
with a detailed look into our key platform strategies and the
performance and strategic progress of Primary Products and
Food & Beverage Solutions.
Our annual Board effectiveness review was carried out by an
external expert this year as is our practice at least every third year.
Developing our long-term strategy
As I said in my statement on page 12, this year we were pleased
to see the completion of our acquisition of the stevia business,
Sweet Green Fields, and the acquisition of an 85% stake in the
tapioca business Chaodee Modified Starch. Both align with our
strategic goals of strengthening our existing product offerings
and expanding our presence in higher growth markets, particularly
86 TATE & LYLE PLC ANNUAL REPORT 2021
Guided by our purpose,
Tate & Lyle is navigating
Covid-19 well.
Gerry Murphy
Chair
in Asia. As we announced in April 2021, the Board also spent
time considering the potential separation of the Food & Beverage
Solutions and Primary Products businesses through a sale of
a controlling stake in the Primary Products business to a
long-term financial partner. Discussions are ongoing and the
Board remains highly engaged in this process.
Understanding our business in growth markets
Although we couldn’t travel anywhere in person this year, we
nonetheless took the opportunity to focus on Latin American
markets at our meeting in January. Our leadership team in Brazil
and Mexico joined us for a detailed review of plans for their
markets, and we were fortunate to hear from the CEO of one of
our major customers in the region who shared insights regarding
regional trends in the food and beverage market, and the
characteristics they look for in their preferred suppliers.
Developing our relationships with stakeholders
Although, as a Board, we are very mindful of all stakeholders
and try to consider every angle in our discussions, we cannot,
of course, engage directly with everyone, even in a normal year.
Obviously, this last year has been particularly challenging due to
the pandemic. However, thanks to the quick roll-out of MS Teams
by our IT team, we were able to embrace new technology to enjoy
meaningful engagement with our people, our customers and our
shareholders. Here are some of the Board’s highlights.
• Our people: this year, I held virtual cafés with employees in
each of our four regions, co-hosting each session with a
different fellow non-executive director. These were really
valuable in two ways. We learnt a lot from colleagues’
questions, comments and observations about the business
and the future outlook for Tate & Lyle. They were also a great
opportunity to thank our people directly for the extraordinary
way they have managed through the pandemic. I propose to
continue these sessions even after business travel returns to
something like normal. One particularly noteworthy session
GOVERNANCE
was held by my fellow director, Kim Nelson and our former
colleague, Dr Ajai Puri who hosted a discussion and Q&A about
equity, diversity and inclusion open to all employees. Kim has
been an active champion for equity, diversity and inclusion,
supporting the establishment of our employee resource group,
the Black Employee Network.
• Customers: as I mentioned above, it was great to hear directly
from one of our major customers in Brazil. As always, the
Board takes close interest in, and receives regular updates on,
conversations Nick and his senior leadership team have had
with customers and on the feedback they’ve received. This
year, these reports have helped us to understand how well
Tate & Lyle has managed through the pandemic from the
perspective of our customers.
• Shareholders: as in previous years, I spent time with
representatives of some of our major shareholders.
Unfortunately, the pandemic prevented us from holding our
AGM in the traditional way but we were pleased to publish a
presentation on our website along with answers to questions
submitted from shareholders. At the time of writing, we are
hopeful that we will be able to hold our AGM as a physical
meeting in the usual manner; but if we can’t, we will do our
best again to engage with all our shareholders and will keep
them informed as our AGM plans develop.
A culture driven by our purpose
We’ve always said how important our purpose is at Tate & Lyle
and, in my view, our response to the challenges of this year
demonstrated just that. Right from the start, Nick’s message was
clear: keep our people and our communities safe, our operations
running and customers served. For our plant and operational
workforce, this meant a lot of extra work at each site to ensure
they adapted quickly to local circumstances and enabled
Covid-safe working – and they rose tremendously to the task.
We received updates from Nick on health and safety performance
at every Board meeting and had two in-depth sessions on the
progress of our Journey to Environment, Health and Safety
Excellence programme during the year. My Board colleagues
and I have also been impressed by how our office-based
colleagues have adapted to working with each other and our
customers remotely.
Laura Hagan, our Chief Human Resources Officer also regularly
updates the Board on people issues, with the focus this year
naturally being how we have supported colleagues through the
challenges of the pandemic. A big focus for the HR team has been
initiatives around mental health and wellbeing, which we know
have been a challenge for many. We also continued to work on
our efforts to promote equity, diversity and inclusion, a big
priority this year and moving forward. Aside from the session
I mentioned above, we were pleased to receive equity, diversity
and inclusion training ourselves, and I know I speak for my
Board colleagues in saying how much we learnt from it. We
were delighted that in April 2021 Lauren von Stackelberg was
appointed as Chief Equity, Diversity & Inclusion Officer, a new role
at Tate & Lyle.
Acting with integrity is at the heart of Tate & Lyle, which is why
our compliance and ethics programme is so important. Each year
we review a report from our Head of Ethics and Compliance on
the progress of our programme, and the number and nature of
reports to our whistleblowing hotline. The Audit Committee
receives reports from the Head of Ethics and Compliance twice
a year. This year we learnt that the number of reports were down
BOARD MEETINGS IN LOCKDOWN
Since the start of the pandemic, the Board and its
Committees have held meetings remotely via video
conference, accommodating directors in time zones
from the American midwest to Beijing.
on previous years, we suspect because of the pandemic and
more people working from home, but we were reassured that the
number of reports we did receive was typical for companies of
our size and geography.
Our effectiveness as a Board
As I mentioned, our Board effectiveness review was externally
facilitated this year. As previously, the Board also invited members
of management (who are regular attendees at our meetings),
external advisors Deloitte (for the Remuneration Committee) and
our external auditor EY (for the Audit Committee) to share their
views. Our last externally facilitated review was three years ago,
just before Nick became Chief Executive and at that time identified
several areas for improvement. These included giving greater
focus to the major consumer and regulatory trends which might
affect our industry; improving how the Board focused on culture;
gaining a clearer picture of executive succession and professional
development; and improving the quality of information brought to
the Board.
I’m pleased to say that this year’s review showed that we have
made good progress in all of these areas and that the Board
and its Committees are operating well. However, we are not
complacent – the review also identified other areas where we
could do better, as described on page 91.
OUR FOCUS FOR THE 2022 FINANCIAL YEAR
As we start the new financial year, our focus as a Board will
be to help Nick and his team ensure we emerge from the
pandemic a stronger business. The challenges of Covid-19 have
laid bare the real inequalities in society, and so equity, diversity
and inclusion will continue to be high on our agenda, along
with our usual key themes of strategy, people and culture,
sustainability, and succession and development. And, I know
I speak for all my Board colleagues in saying that what we are
most looking forward to is connecting with our people around
the globe in person again, as soon as it is safe to do so.
Gerry Murphy
Chair
TATE & LYLE PLC ANNUAL REPORT 2021
87
CORPORATE GOVERNANCE CONTINUED
OUR GOVERNANCE
STRUCTURE
LEADERSHIP
OUR GOVERNANCE STRUCTURE
The Group’s primary decision-making body is the Board. It is
accountable to shareholders for the Group’s financial and
operational performance, and is responsible for setting the
strategy and ensuring that risk is managed effectively. The Board
maintains a schedule of items which it is required to consider and
approve. We review this schedule regularly and update it to reflect
developments in corporate governance and emerging practice.
THE BOARD
As shown in the diagram below, the Board has delegated certain
responsibilities to a number of Committees. The Board retains
overall accountability and the Committee Chairs are responsible
for reporting back to the Board on the Committees’ activities.
Minutes of the Committees’ meetings are made available to all
the Directors on the web-based Board portal.
CHAIR: DR GERRY MURPHY
• Accountable to shareholders for the Group’s financial and
operational performance
• Sets the Group’s strategy
• Oversees management’s implementation of the strategy
• Monitors the operational, environmental and financial
• Sets the Group’s risk appetite
• Ensures that appropriate risk management systems and
internal controls are in place
• Sets the Group’s ethics and culture and agrees the Group’s
purpose and values
performance of the Group
• Ensures good corporate governance practices are in place
CHIEF EXECUTIVE
NICK HAMPTON
AUDIT
COMMITTEE
NOMINATIONS
COMMITTEE
REMUNERATION
COMMITTEE
CHAIR:
WARREN TUCKER
• Oversees financial
reporting, internal
financial controls and
risk management
systems, the risk
management process,
the internal audit
function and the Group’s
relationship with the
external auditor
CHAIR:
DR GERRY MURPHY
• Makes recommendations
to the Board regarding
the structure, size,
composition and
succession needs of the
Board and its Committees
• Reviews the performance
of the Executive Directors
• Oversees succession
planning for Directors
and senior management
CHAIR:
ANNE MINTO
• Recommends the
Group’s Remuneration
Policy for Executive
Directors
• Sets and monitors the
level and structure of
remuneration for the
Executive Directors and
other senior executives
• Sets the Board Chair’s
fee
Read more on page 104
Read more on page 101
Read more on page 110
EXECUTIVE COMMITTEE
CHAIR: NICK HAMPTON
• Recommends strategic and operating plans to the Board
• Assists the Chief Executive in implementing the strategy
agreed by the Board
• Monitors the performance of the two business divisions
and global support functions
• Identifies, evaluates, manages and monitors risks facing
• Monitors performance against our purpose commitments
the Group
The Executive Committee is supported by a number of operational committees, including the Environment, Health and Safety
(EHS) Advisory Board, the Operations Committee, the Risk Committee, the Capital Approval Committee, the Cyber Security
Committee and the Research Advisory Group. Committees may also be established for a finite period to oversee key strategic or
operational priorities.
88 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
KEY RESPONSIBILITIES OF THE BOARD
At the date of this Annual Report, the Board comprises the Chair, two Executive Directors and eight Non-executive Directors.
Their responsibilities are summarised below. There is a clear division of responsibilities: the Chair leads the Board and the
Chief Executive leads the business.
CHAIR
CHIEF EXECUTIVE
Responsible for the effective operation, leadership
and governance of the Board
• Chairs Board meetings, Nominations Committee meetings
and the Annual General Meeting
Responsible for proposing strategy to the Board
and delivering it
• Runs the business
• Communicates within the organisation the Board’s
• Sets the Board agenda with the Chief Executive and
expectation with regard to culture, values and behaviours
Company Secretary
• Ensures the Board is aware of current business issues
• Facilitates active engagement by all Directors
• Sets the style and tone of Board discussions
• Ensures the Directors receive accurate, timely and clear
information
CHIEF FINANCIAL OFFICER
NON-EXECUTIVE DIRECTORS
Responsible for the Group’s financial affairs
• Contributes to the management of the Group’s business
• Supports the Chief Executive with the development and
implementation of the strategy
Responsible for overseeing the delivery of the strategy within
the risk appetite set by the Board
• Advise and constructively challenge the Executive Directors
• Scrutinise the performance of management in meeting
agreed goals and objectives and monitor the reporting of
performance
• Perform their duties diligently and use best endeavours
to promote, protect, develop and extend the business
of the Group
• Devote time to develop and refresh knowledge and skills
SENIOR INDEPENDENT DIRECTOR
COMPANY SECRETARY
Responsible for ensuring that the Chair’s performance
is evaluated
• Acts as a sounding board for the Chair and supports him in
the delivery of his objectives
Responsible for maintaining the governance and listing
rules compliance framework
• Supports the Chair, Chief Executive and Committee Chairs
in setting agenda items for Board and Committee meetings
• Serves as an intermediary with the Chair for other Directors
• Advises the Board on developments in corporate
if necessary
governance, legislation and regulation
• Maintains a comprehensive understanding of the major
issues of shareholders and is available if shareholders have
any concerns that they have been unable to resolve through
the normal channels
• Assists the Chair and the Chief Executive in ensuring that
the Directors are provided with relevant information in a
timely manner
• Organises inductions for new Directors and ongoing training
for all Directors
TATE & LYLE PLC ANNUAL REPORT 2021
89
CORPORATE GOVERNANCE CONTINUED
BOARD ACTIVITY DURING
THE YEAR ENDED 31 MARCH 2021
The Board holds six scheduled meetings each year and a meeting to discuss strategy. Due to the Covid-19 pandemic and lockdown
restrictions, this year’s meetings were held via video conference, with occasional in person attendance by some Board members who
are based in the UK. At the start of the pandemic, the Board held a number of additional calls to understand how the pandemic was
impacting our business and to learn about how management was mitigating those impacts.
FINANCIAL
• Approved the full-year results and
financial statements and the Annual
Report and financial statements for
the 2020 financial year
• Approved the half-year results for
the 2021 financial year
• Approved the payment of the interim
dividend for financial year 2021 and
recommended payment of the final
dividend for financial year 2020
• Considered and agreed treasury and
tax matters
• Approved the Group’s tax strategy
(available on the Company’s website)
• Approved the Annual Operating Plan
for the year ending 31 March 2022
• Regularly reviewed the Group’s
financial performance and forecasts
• Considered the financial position and
liquidity headroom in light of the
Covid-19 pandemic
OPERATIONAL/COMMERCIAL
• Received regular progress updates
on the Group’s Environment, Health
and Safety (EHS) and Quality strategy
including from the independent
safety expert appointed to the EHS
Advisory Board
• Reviewed the Simplification and
Productivity agenda and its progress
throughout the year
• Considered the potential impact of
the Covid-19 pandemic on the safety
of our people, the Group’s operations
and financial performance and
reviewed management’s plans for
mitigating its impact on the Group’s
operations and customers
• Reviewed progress embedding
purpose and progress on our
long-term purpose targets,
including our sustainability targets
for 2030
INTERNAL CONTROL AND RISK
MANAGEMENT
• Considered and agreed the Group’s
risk appetite and principal risks
• Assessed the effectiveness of our
internal controls and risk
management systems
• Agreed the Viability Statement as
GOVERNANCE AND
STAKEHOLDERS
• Considered the output and
recommendations from the Board
effectiveness review
• Discussed feedback from
institutional shareholders and
analysts
disclosed in the Annual Report 2020
• Reviewed and approved the
Directors’ register of interests
• Approved the adoption of a going
concern basis of accounting in
preparing the half- and full-year
results
• Agreed the Modern Slavery Act
statement, available on the
Company’s website
STRATEGY
• Undertook deep dives into the
strategies of each of our Primary
Products (PP) and Food & Beverage
Solutions (FBS) divisions focusing in
detail on our North America, Latin
America, Europe regions in FBS,
considering the key growth drivers,
markets and customers in each and
the impact of the pandemic on
customers and consumers in those
markets
• Reviewed the priorities identified for
our three key innovation platforms
within Innovation and Commercial
Development (ICD), namely: our
Sweeteners, Health and Wellness,
and Texturants platforms
• Reviewed the Group’s five-year
strategic plan
• Approved the acquisition of Sweet
Green Fields and an 85%
shareholding in Chaodee Modified
Starch
• Considered in detail the potential to
separate the FBS and PP businesses
through a sale of a controlling stake
in the PP business to a long-term
financial partner. Monitored the
project and received regular updates
on progress
LEADERSHIP AND EMPLOYEES
• Approved the appointment of John
Cheung and Patrícia Corsi as
non-executive directors
• Approved the appointment of Vivid
Sehgal as Chief Financial Officer
• Endorsed the Chief Executive’s
appointment of Victoria Spadaro
Grant to the Executive Committee
and of Andrew Taylor to the role of
President, Asia, Middle East, Africa
and Latin America
• Reviewed the Group’s people agenda
including diversity, talent
management and bench strength
within the organisation and
undertook a Board training session
on equity, diversity and inclusion
with an external specialist in the field
• Considered the impact of the
Covid-19 pandemic on the health and
wellbeing of our people
90 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS DURING THE FINANCIAL YEAR
NAME
Dr Gerry Murphy
Nick Hampton
Imran Nawaz
Vivid Sehgal2
John Cheung3
Paul Forman
Lars Frederiksen
Anne Minto
Kim Nelson
Dr Ajai Puri
Sybella Stanley
Warren Tucker
BOARD
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATIONS
COMMITTEE
8/8
8/8
8/8
2/2
2/2
8/8
8/8
8/8
8/8
8/8
8/8
8/8
5/51
5/51
5/51
1/1
2/2
5/5
n/a
5/5
5/5
5/5
n/a
5/5
4/41
4/41
n/a
n/a
n/a
n/a
4/4
4/4
n/a
n/a
4/4
4/4
3/3
3/31
n/a
n/a
1/1
3/3
3/3
3/3
3/3
3/3
3/3
3/3
1 Although not a Committee member, attended the Committee meetings by invitation.
2 Appointed a Director with effect from 1 March 2021.
3 Appointed a Director with effect from 1 January 2021.
BOARD EFFECTIVENESS REVIEW
This year’s externally facilitated evaluation of the Board and its Committees took the form of a questionnaire circulated to the relevant
Board members as well as to regular attendees from management and external advisors. The questionnaires sought input on a
range of matters including: composition; Board and Committee dynamics, particularly in light of the virtual meeting arrangements
necessitated by the Covid-19 pandemic; engagement with management; effective oversight of matters within remit, including risk; and
quality of papers and presentations. Please see pages 102,105 and 114 for information about the effectiveness evaluations of each of the
Committees and of individual Directors conducted this year.
2021 BOARD EFFECTIVENESS REVIEW
AREAS FOR FOCUS
ACTION
Long-term ambition and M&A
The Board and the management team will continue to work on the long-term strategy and
ambition for the business and to consider M&A opportunities, including monitoring the successful
integration of the recent acquisitions of Sweet Green Fields and the 85% stake in Chaodee
Modified Starch.
Building our understanding of customers
and consumers
The Board will continue to welcome opportunities to hear directly from Tate & Lyle’s major
customers about consumer and market trends and how Tate & Lyle can be the solutions partner
of choice for our customers.
Organic growth and innovation
During FY21 the Board looked in depth at the execution plans for our Food & Beverage Solutions
business in North America, Latin America and Europe and at the platform strategies for
Sweeteners, Health and Wellness and Texturants. In FY22 it will continue to look in depth at our
organic growth and innovation programmes, with reviews of our execution plans for Food &
Beverage Solutions in the Middle East and Africa and our Stabilisation platform.
Executive Committee succession planning,
and talent development throughout the
organisation
The Nominations Committee will review senior management succession and development plans.
The Board will also focus on how we nurture and develop our talented people throughout the
organisation.
Culture, equity, diversity and inclusion
The Board will continue to monitor the culture of the organisation with a particular focus on our
progress towards greater equity, diversity and inclusion within our business.
TATE & LYLE PLC ANNUAL REPORT 2021
91
CORPORATE GOVERNANCE CONTINUED
STAKEHOLDER
ENGAGEMENT
At Tate & Lyle, we engage with a wide
range of stakeholders, all of whom are
essential in enabling us to do business
across the world.
The table below describes our key stakeholders and summarises
the engagement that has been undertaken across the business,
including by the Board, during the year. In addition, the Board’s
engagement with our workforce is set out from page 94. How the
Board understands the interests of stakeholders, and how the
Board considers stakeholders’ interests in decision-making,
including examples of principal decisions made in the financial
year and our section 172(1) statement, are summarised on page 97.
STAKEHOLDER ENGAGEMENT
WHY THEY MATTER
ENGAGEMENT ACTIVITIES
OUTCOMES/IMPACT
Shareholders Our shareholders are
investors in and owners of
our business, providing the
capital we need to invest in
and grow the business.
Engagement takes various forms
throughout the year: by Executive
Directors; our Chair; and our
Investor Relations team. For
more information, see pages 95
and 96.
Customers
As a business-to-business
company, all the ingredients
we make are sold to our
customers. Listening to our
customers helps us to better
understand their needs and
provide the products and
services they want.
Employees
Everyone at Tate & Lyle plays
a key role in driving our
success by partnering with
each other in an agile way to
deliver a consistently great
service for our customers, to
ensure our plants run safely
and efficiently, and that new
products are created that
provide solutions to address
our customers’ and
consumers’ needs.
92 TATE & LYLE PLC ANNUAL REPORT 2021
We maintain close relationships
with our customers at all levels
of their organisation, from the
Chief Executive to R&D, to Sales
and Marketing. We are a growth
partner for many of our
customers.
In January, the Board had the
pleasure of speaking directly
with the Brazilian CEO of one of
our major customers to learn
about key trends in the Latin
American market and how
Tate & Lyle’s team in Latin
America is working with
customers and fostering closer
partnerships.
We listen to our employees to
gain their insight and feedback
through a range of channels such
as team meetings, town halls
and pulse surveys. This feedback
helps us to take actions and
establish programmes which
develop and stretch our
employees and helps them both
deliver our strategy and fulfil
their personal goals. Details of
the Board’s engagement with
employees are set out from
page 94.
Our engagement activities provide opportunities for
management and the Board to communicate our strategy
and performance, and to listen and understand
shareholders’ views and concerns.
The Board and management team are aware that our
shareholders, together with wider society, are increasingly
interested in environmental, social and governance issues.
At the start of the year, we announced new ambitious
long-term commitments for each pillar of our purpose
including for the environment. The Board reviewed progress
against these targets during the year, as well as actions and
progress on our other purpose pillars.
Our ingredients help our customers meet growing consumer
demand for food and drink which is lower in sugar, calories
and fat, and with added fibre, and which also taste great. Our
industrial starches enhance the performance of our
customers’ products, from paper production to adhesives, to
applications in building supplies.
Customer insight and market understanding plays an
important part in our decision-making process, for example,
in areas such as new product development and capacity
expansions.
To support our customers during the pandemic, we moved a
number of our services online, such as bespoke webinars on
areas such as sugar reduction and plant-based ingredients.
We also accelerated the launch of online tools to help our
customers with their reformulation efforts, including our
new Fibre and Sweetener Universities (educational courses).
Having the right culture is central to our success. People are
at their best when they feel they are contributing to the
Group and are fully engaged and happy in their work. This
has never been more important than during the Covid-19
pandemic, when maintaining connectivity and supporting
employees’ physical and mental health were paramount.
We put in place a number of initiatives to keep our people
safe, well, connected and productive. The Board also
increased its focus on equity, diversity and inclusion during
the year, supporting management’s actions including the
creation of a new dedicated role of Chief Equity, Diversity &
Inclusion Officer. See from pages 50 to 53 for more details on
our people and how we engage with them.
GOVERNANCE
CHAIR’S VIRTUAL CAFÉS
This year the Chair held virtual cafés with staff
in each of our four regions, co-hosting each session
with a different fellow non-executive director.
Here, Gerry and Lars are seen engaging with
colleagues from Europe including staff at our
plant in Ossona, Italy.
STAKEHOLDER ENGAGEMENT
CONTINUED
WHY THEY MATTER
ENGAGEMENT ACTIVITIES
OUTCOMES/IMPACT
Suppliers
We cannot conduct or grow
our business without the
products, expertise, advice
and support of our suppliers.
Communities
It’s where our employees and
their families live and where
we recruit many of the people
who work for us. It’s also
important that, as a
significant local employer in
some locations, we support
the local community not only
through employee
involvement but as a
responsible and sustainable
local manufacturer.
We have a dedicated
procurement function based
around the world which engages
with our suppliers to optimise the
way we work with them.
We build relationships globally,
regionally and locally with our
suppliers to better understand
the markets where we source.
Our community involvement
programme is centred around
three main areas: health, hunger
and education, with a particular
emphasis on supporting children
and young adults. We support
projects in our local communities
based on these three areas.
Regulators
Before our new ingredients
can be incorporated into our
customers’ products they
must be approved by
regulatory authorities.
Governments Government policies on
trade, safety and product
quality, transport, tax and
inward investment, among
others, all have an impact on
how we do business.
We have a dedicated team of
regulatory experts, based
around the world, who actively
engage with regulators to
provide evidence of, and answer
enquiries about, the safety and
quality of our ingredients.
We meet periodically with
federal, state and local officials
in countries where we have
significant operations.
We are also members of major
trade associations in our key
markets, such as the Corn
Refiners Association in the US.
By leveraging third-party relationships we are able to be
more agile and meet ever-changing customer demands.
This also limits our supply risk across an increasingly
complex global supply network.
Through a range of programmes supporting health,
wellbeing and education, and partnerships with food banks
across the world, we help improve the lives of thousands of
people in our local communities. See pages 54 and 55 for
more details.
The pandemic had a significant impact on many of our local
communities. Therefore, we significantly increased the level
of donations and support we gave our food bank and
charitable partners, providing 1.7 million meals for people in
need during the year. We also donated PPE to family
members who were frontline workers.
Our purpose of Improving Lives for Generations was at the
centre of our response to Covid-19. In December, we
published our purpose booklet, explaining what our purpose
is and setting out the actions we are taking to deliver our
long-term purpose targets and commitments.
By helping regulators understand our ingredients we speed
up the process of regulatory approval.
For example, in April 2020, the Brazilian Health Regulatory
Agency (Anvisa) approved a claim for PROMITOR® fibre to
assist the absorption of calcium in food and its retention
in bones.
Government policies and legislation, in areas such as trade
and tax, can have an impact on our ability to operate
competitively, and sell and transport our products around
the world. At a more local level, permits are needed to
operate or expand our production facilities.
TATE & LYLE PLC ANNUAL REPORT 2021
93
CORPORATE GOVERNANCE CONTINUED
PEOPLE AND CULTURE
Engaging with our people
In 2019, the Board considered the 2018 UK Corporate Governance
Code requirements on workforce engagement. The Board
concluded that each director should be active in engaging with our
people in order to gather their views and to understand the culture
within the Group. The Board decided not to introduce any of the
three methods suggested in the Code but to develop an approach
which built on the mechanisms and practices which we already
had in place, in particular the non-executive director site visit
programme. The methods of engagement are set out below.
Prior to the Covid-19 pandemic, it was the practice at each Board
meeting, for the Chairman and the non-executive directors to brief
the Board on their interactions with, and impressions of, our
people, our sites and our culture. The Board believes that these
methods of engagement have enabled them to learn the views of a
wide cross-section of the workforce and to understand how our
strategy, purpose and ‘Sharpen, Accelerate, Simplify’ priorities
are being received, understood and applied across Tate & Lyle.
Board members look forward to returning to a programme of
individual site visits as soon as travel restrictions are lifted and it
is safe to do so.
Although the Covid-19 pandemic prevented Board members
from visiting our sites, Board members actively participated in a
programme of workforce engagement throughout the year as
described below. Some of these initiatives were so successful that
they will likely be added to the Board’s regular engagement
activities when we are able to return to normal.
At Tate & Lyle we consider our workforce to include employees, contractors (in post for three
months or more), representatives in countries where we do not have employees and
contingent labour. We do not include temporary contract labour (of less than three months),
service provision workers, outsourced contract consultants and staff at our joint ventures.
ENGAGEMENT ACTIVITIES
Chair’s virtual cafés
As the Covid-19 pandemic prevented travel this year, Gerry Murphy hosted four virtual cafés during the
course of the year with each of our teams in Latin America, Asia, Europe and North America. These events
were open to all and were positively received by those who attended. Gerry Murphy was accompanied by a
different Board colleague (Kim Nelson, Dr Ajai Puri, Paul Forman and Lars Frederiksen) at each meeting.
Inclusion and Diversity
Panel
Kim Nelson and Dr Ajai Puri joined a panel discussion, open to all and hosted by our Professional
Women’s Network, about equity, diversity and inclusion sharing their experiences of interventions which
create greater diversity and inclusion in the workplace.
Reaching the wider
workforce
The Chair’s virtual cafés and the equity, diversion and inclusion panel discussion with Kim Nelson and
Dr Ajai Puri were all recorded and made available to employees. Recognising that English is not the first
language for many of our employees we included sub-titles with the videos including Portuguese
sub-titles for the video of the Chair’s virtual café with the Latin America team.
Black Employee
Network sponsorship
Kim Nelson championed and provided support to the newly established Black Employee Network, one of
our employee resource groups.
Research Advisory
Group
Until his retirement in March 2021, Dr Ajai Puri chaired the Research Advisory Group (RAG) which meets
with members of the Innovation and Commercial Development function, usually in person, twice a year at
our Commercial and Food Innovation Centre in Hoffman Estates, Illinois, US. A feature of these visits is
the ‘lunch and learn’ session with an external expert speaker, hosted by Dr Ajai Puri and Victoria Spadaro
Grant. This year, Dr Puri and Ms Spadaro Grant hosted a virtual event which was open to a large number
of employees, with a high level of attendance. The Chair also attended some of these meetings in 2020
and 2021.
Employee surveys and
engagement initiatives
The Chief Executive and the Chief Human Resources Officer regularly report to the Board on the outcome
of employee surveys and other engagement initiatives. The quarterly business performance dashboard
which is shared with the Board contains information on the number of open roles, regrettable
resignations and gender diversity throughout the workforce.
CEO Weekly Newsletter
and ‘virtual cafés’
At the end of February 2020, Nick Hampton began to share a weekly Covid-19 and business update with
the workforce via email and video. Later in the year, after feedback from employees, this update moved to
once every two weeks and continues to be shared with employees.
Nick has also held regular virtual cafés, sometimes with other members of the Executive Committee.
Between April 2020 and March 2021, Nick held 58 virtual cafés providing our employee population with an
opportunity to connect with him.
94 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
Over the past 12 months we have learned
to use digital communication to get much
closer to employees. The Chair’s virtual
café is a good example of this. It’s a place
where the Board can engage and interact
directly with Tate & Lyle people all over the
world both to understand and address
individual concerns, but also to say thanks
for the commitment everybody has shown
during these difficult times.
Lars Frederiksen
A non-executive director, who attended the Chairman’s virtual
café for our Europe region
Investing in and rewarding our people
The Remuneration Committee considers remuneration
arrangements for our global workforce. The Group’s
remuneration strategy is to provide competitive packages that
enable the Group to recruit, retain and motivate high-calibre
individuals in the markets in which we operate, so that we can
deliver consistently strong operational performance and financial
results. For more information, see our Directors’ Remuneration
Report from page 110.
Assessing and monitoring culture
As described in the Chair’s introduction to corporate governance
on pages 86 and 87, the Board has multiple touchpoints
throughout the year which provide opportunities for gauging and
monitoring the culture at Tate & Lyle and how it aligns with our
purpose and values. These touchpoints include individual Board
member engagement activities and management reports to the
Board and its Committees on a range of topics including:
environment, health and safety performance; results of employee
engagement surveys; equity, diversity and inclusion statistics and
analysis; reports to the whistleblowing hotline; reports from the
Head of Group Audit and Assurance; and reviews of workforce
policies and practices. On those occasions where the Board is not
satisfied that policy, practices or behaviours are aligned with the
Company’s purpose, values and strategy, it seeks assurance from
management that: (i) it has thoroughly understood the extent of
and the reasons for the issue; (ii) it has considered whether the
issue concerned could have implications across the wider Group;
(iii) corrective action has been taken to address the issue; and (iv)
any lessons which might be learned are identified and
communicated across the Group.
Ethics and whistleblowing programme
Speak Up, the Group’s whistleblowing programme, has been
in place for a number of years in all operations controlled by
the Group. This programme, which is monitored by the Board,
is designed to enable employees, contractors, customers,
suppliers and other stakeholders to raise concerns confidentially
about conduct they consider contrary to the Group’s values.
It may include, for example, unsafe or unethical practices, or
criminal offences.
The Speak Up programme provides a number of ways to raise
concerns including a telephone reporting line, email and a
web-based reporting facility. These multilingual communication
channels are operated by independent service providers who
submit reports to the Speak Up Committee for investigation as
necessary. For more information about Speak Up, see page 52.
Reports received during the year were kept strictly confidential
and the concerns identified were referred to appropriate
managers within the Group for resolution. Where appropriate,
action was taken to address the issues raised. The reports were
analysed and monitored to ensure the process continued to be
effective. The Board received an analysis of all reports submitted
via the Speak Up programme during the year. The Head of Ethics
and Compliance reports to the Audit Committee twice a year on
the ethics and compliance programme and its activities.
ENGAGEMENT WITH INVESTOR COMMUNITY
Investors are an essential stakeholder for any listed company.
At Tate & Lyle, as well as our institutional investors and debt
investors, we have a significant number of retail shareholders,
including many employees and retired employees, who have a
personal interest in the ongoing success of the Company. We’ve
always held our investor community in the highest respect as
owners and supporters of the business, and our relationships with
them are very important to us, particularly in difficult times like
Covid-19, when restrictions have made it impossible to meet them
in person.
Like everyone else this year, we have made the best use we
can of video conferencing technologies in place of face-to-face
meetings, and so have kept as closely as possible to our usual
Investor Relations programme. This programme has two
objectives. It aims to help existing and potential investors
understand Tate & Lyle, while ensuring that Directors understand
the views of our major investors through regular feedback. All
Directors receive periodic updates on investor communication
activities, including at every Board meeting.
We said from the start of the pandemic that we would be guided
in our approach by our purpose, and in December 2020 we
published a booklet to introduce and explain our purpose to
our external audiences, particularly investors. It explains our
purpose, what it means to us and sets out our commitments
and targets to 2030. This is available on our website at
www.tateandlyle.com/purpose.
TATE & LYLE PLC ANNUAL REPORT 2021
95
CORPORATE GOVERNANCE CONTINUED
Institutional investors
The Chief Executive, Chief Financial Officer and our VP, Investor
Relations, maintain a programme of meetings with institutional
shareholders from the UK, Europe and North America. Our key
meetings take place after our full-year and half-year results, but
we also meet investors regularly outside the results cycle. Many
of these meetings are arranged direct, but we also take part in
investor conferences arranged by sell-side institutions.
The Covid-19 pandemic has of course meant extra
communications with investors, to keep them up to date on its
effect on our business and balance sheet. As a result, we issued
two extra trading updates, one in early May and one in July. The
Chief Executive, Chief Financial Officer and VP, Investor Relations
spent more time than usual with investors during the year,
including reaching out periodically to our largest shareholders.
Before the 2020 AGM, our Chair, Gerry Murphy, held virtual
meetings with a number of the Company’s larger institutional
shareholders primarily to engage on the business of the AGM.
As well as the full-year and half-year results presentations to
investors and analysts, we host conference calls after trading
updates are issued. We publish presentations, together with the
associated announcements, on the Company’s website and we
also make audio recordings available for a short period after each
event. The Chief Financial Officer and VP, Investor Relations, also
meet regularly with analysts.
Feedback
Our corporate brokers regularly seek investors’ feedback
following key announcements and investor meetings. A summary
of feedback is communicated to all Directors. Our advisers also
give us updates on best practice in investor relations, which we
seek to reflect in our programme. Recent recommendations
include continuing to build a broader shareholder base in the UK
and US, and giving more details on environmental, social and
governance (ESG) issues, an area growing significantly in
importance to the whole investment community.
Other capital providers
The Chief Financial Officer, Group Treasurer and VP, Investor
Relations meet periodically with our committed lending banks,
debt investors and ratings agencies (Standard & Poor’s and
Moody’s). In August 2020, we issued a new US$200 million
of private placement debt to increase our access to liquidity.
The Chief Financial Officer, Group Treasurer and VP, Investor
Relations, met with, and answered questions from investors
as part of this fund raising.
Private (retail) shareholders
We encourage private shareholders to talk to our Company
Secretary who will then share their views with the Board. We also
include a questions card with the AGM documentation we send to
shareholders so that those who cannot come to the meeting can
have their questions answered.
Annual General Meeting
The AGM gives all shareholders the opportunity to ask questions
of the Board, including about this Annual Report. In 2020 we had to
close our AGM to shareholders because of UK Covid-19 guidance
from the government advising that such meetings posed a safety
risk to the attendees. But, because the AGM is such an important
opportunity for shareholders to express their views directly to
Board members, we opted instead to ask shareholders to submit
questions in advance of the meeting, which were then answered
through an audiocast presentation from our Chair, Gerry Murphy,
and our Chief Executive, Nick Hampton, published on the
Company’s website in advance of the proxy voting deadline.
As the UK government continues to ease Covid-19 restrictions,
we anticipate that indoor public gatherings will be permitted
at the time of the 2021 AGM. If so, this will mean that our
shareholders will be welcome to attend the AGM in person but
with some additional measures to ensure the safety of all
attendees. However, at the time of writing we cannot be certain
that restrictions on public gatherings will have been lifted and
so we will continue to monitor developments, including the
latest government measures, and in the event that our AGM
arrangements have to change, the Company will issue a further
communication via a regulatory information service and on the
Company’s website. The details of the 2021 AGM are set out in the
Notice of AGM. Votes received in respect of each resolution put to
the AGM, together with the number of abstentions, are announced
through a regulatory information service and published on the
Company’s website. Shareholders can choose to receive
shareholder documentation, including the Annual Report,
electronically or in paper format, and may submit proxy votes
and any questions either electronically or by post.
ENGAGING WITH SHAREHOLDERS
INVESTOR CALENDAR
Set out below is a summary of our major investor activity during the year:
May 2020
Trading
statement
issued
Full-year
results issued
Investor
roadshow
meetings in the
UK – by video
June 2020
Investor
roadshow
meetings in the
US – by video
Investor
conference
based in
France – by
video
Annual Report
published
Sept 2020
Investor
conferences
based in the
UK – by video
July 2020
Trading
statement
issued
Audiocast
published in
support of
Annual General
Meeting
Dec 2020
Investor
conference
based in the
UK – by video
Purpose booklet
published
Nov 2020
Half-year
results issued
Investor
roadshow
meetings in the
UK and
US – by video
Investor
conference
based in the
US – by video
96 TATE & LYLE PLC ANNUAL REPORT 2021
Jan 2021
Trading
statement
issued
Mar 2021
Investor
conferences
based in the
UK – by video
SECTION 172(1)
STATEMENT
Section 172 of the Companies Act 2006 requires a director of a
company to act in the way he or she considers, in good faith, would
most likely promote the success of the company for the benefit of
its members as a whole. In doing this, section 172 requires a
director to have regard, among other matters, to the:
• likely consequences of any decisions in the long term;
• interests of the company’s employees;
• need to foster the company’s business relationships with
suppliers, customers and others;
• impact of the company’s operations on the community and
environment;
• desirability of the company maintaining a reputation for high
standards of business conduct, and
• need to act fairly as between members of the company.
In discharging our section 172 duties we have regard to the factors
set out above. We also have regard to other factors which we
consider relevant to the decision being made. Those factors, for
example, include the interests and views of our pensioners. We
acknowledge that every decision we make will not necessarily
result in a positive outcome for all our stakeholders. By
considering the Company’s purpose and values together with its
strategic priorities, and having a process in place for decision
making, we do, however, aim to make sure that our decisions are
consistent and predictable.
For details on how our Board operates and the way in which we
reach decisions, including the matters we discussed and debated
during the year, the key stakeholder considerations that were
central to those discussions and the way in which we have had
regard to the need to foster the Company’s business relationship
with customers, suppliers and other stakeholders, please see the
Chair’s introduction to corporate governance from page 86, our
corporate governance structure from page 88, Board activities
on page 90 and stakeholder engagement from page 92.
We set out below some examples of how the Directors have
had regard to the matters set out in section 172(1)(a)-(f) when
discharging our section 172 duty and the effect of that on decisions
taken by them.
ANNUAL STRATEGY REVIEW
Each year the Board carries out a review of the Group’s strategy.
In 2020, the Board discussed progress towards responding to the
key mega-trends, which it had identified at the Board strategy
review in 2019, including climate change; health and wellbeing;
reduction in international trade; and the increase of artificial
intelligence. It also received an update on progress towards
our 2030 commitments and targets for the three pillars of our
purpose. In addition, the Board discussed our five-year plan,
our bolt-on M&A strategy, and the progress of our ‘Sharpen,
Accelerate, Simplify’ initiatives and the execution strategies
for our two divisions, Primary Products and Food & Beverage
Solutions. The Board also spent significant time considering the
potential to separate the Food & Beverage Solutions and Primary
Products businesses through a sale of a controlling stake in the
Primary Products business to a long-term financial partner. In
considering the potential separation the Board has been mindful
of the long-term interests of the Company, the interests of
shareholders, employees, customers and the impact of the
Company’s operations on the community and environment.
GOVERNANCE
DIVIDEND
The Board recognises the importance of dividends to
shareholders and operates a progressive dividend policy
(available on the website). In May 2020, as we announced our
results for the 2020 financial year, the length and severity of the
pandemic was unknown. Therefore, the Board decided not to
increase the final dividend for the 2020 financial year, and it also
decided not to increase the interim dividend for the 2021 financial
year. However, given the Group’s robust performance in the 2021
financial year, and having considered the risks and uncertainties
caused by the continuation of the pandemic and the Company’s
available reserves, the Board is recommending a 5.8% increase in
the final dividend to 22.0 pence per share, bringing the full year
dividend to 30.8 pence per share, an increase of 4.1%. This
increase brings dividends back to a level consistent with the
Board’s progressive dividend policy, notwithstanding the
pandemic.
RESPONDING TO THE COVID-19 PANDEMIC
During the year, the Board closely monitored and engaged in
management’s response to the Covid-19 pandemic, scheduling
additional time to ensure that employees were being kept safe and
well, that our customers were being supplied, and at the same
time, the Company was continuing to progress its strategy for the
benefit of all stakeholders. The physical and mental wellbeing of
our employees, both those working in our plants and those
working from home, has been a key concern for us. The Board
was pleased that the Company was able to navigate the pandemic
without furloughing any staff or seeking any government support.
ACQUISITIONS
During the year we acquired an 85% shareholding in a speciality
tapioca food starch business in Thailand, Chaodee Modified Starch
Co., Ltd. This investment strengthens our texturant platform and
brings new tapioca capabilities and raw material sourcing
expertise. It also establishes a dedicated tapioca facility in Asia
and expands our customer offering in categories including dairy,
bakery, snacks, noodles, and soups, sauces and dressings.
Also, during the year, we completed the acquisition of the
outstanding majority shareholding in Sweet Green Fields.
This acquisition brings a broad portfolio of stevia products and
a fully integrated stevia supply chain to Tate & Lyle including leaf
sourcing, leaf varietal development and established agricultural
programmes. It strengthens Tate & Lyle’s position as a leading
provider of innovative sweetener solutions with the capabilities to
create foods and beverages that are lower in sugar and calories
and with cleaner labels for customers across the world. The
acquisition also extends Tate & Lyle’s presence in the faster
growing Asia markets with dedicated stevia production and
research and development facilities located in Anji, China.
In approving both of these acquisitions, the Board was cognisant
of the interests of a range of stakeholders, including our
customers and their consumers, and the potential benefits for
our shareholders. The Board is taking an active interest in the
integration of these acquisitions into Tate & Lyle to ensure these
businesses operate within our framework of standards and
controls and in accordance with our values and purpose.
TATE & LYLE PLC ANNUAL REPORT 2021
97
CORPORATE GOVERNANCE CONTINUED
HOW WE HAVE APPLIED THE PRINCIPLES OF THE CORPORATE GOVERNANCE CODE
Compliance with the 2018 UK Corporate Governance Code: For the year ended 31 March 2021, we are pleased to report that we have
applied the principles and complied with the provisions of the Code. The Code can be found at www.frc.org.uk.
1. BOARD LEADERSHIP AND PURPOSE
A. THE ROLE OF THE BOARD:
Our Board comprises a diverse group of
skilled and experienced individuals as
described in their biographies on pages
80 to 83. Working within the governance
structure set out on page 88 and through
a programme of regular meetings with
agendas which focus on financial
performance, strategic initiatives,
sustainability, risk management, our
people and Nick’s ‘Sharpen, Accelerate,
Simplify’ priorities, together with an
annual strategy day, the Board promotes
the long-term sustainable success of the
Company through the decisions it takes
about the products, customers, markets
and geographies in which the Group
operates and invests. The Board
maintains a dividend policy to share the
value generated by these operations with
shareholders. Tate & Lyle’s products,
many of which also support health and
wellbeing, and our sustainability strategy
contribute to the wider society.
For more information about the Group’s
strategy, see the Strategic Report from
page 2.
B. PURPOSE, VALUES AND CULTURE:
The Board fully endorses Tate & Lyle’s
purpose of Improving Lives for Generations.
This purpose informs our strategy, our
values and our culture and inspires our
people. The Board reviews workforce
culture and employee engagement
through a range of touchpoints
throughout the year. The Audit Committee
receives quarterly updates from our
Group Audit and Assurance function as
well as regular updates from our Head of
Ethics and Compliance. These updates
include the results of internal audits and
whistleblowing and provide insights into
the culture of the Group and individual
areas of the business. The Committee
reviewed steps taken by management to
address any areas of concern and to
ensure follow-up actions were taken.
For more information about: our purpose
see page 2; workforce engagement see
page 94; Board oversight of culture see
page 95; and the work of the Audit
Committee see page 104.
C. RESOURCES AND CONTROLS:
The Board ensures that the necessary
resources are in place for the Group
to meet its objectives and measure
performance against them. The Group
has established an executive Risk
Committee and operates a three lines
of defence model which provides a
framework for establishing a range of
internal controls and managing risk.
For more information see the Risk Report
from page 68 and the Audit Committee
Report from page 104.
CONFLICTS OF INTEREST:
The Board has a formal system in place
for Directors to declare a conflict, or
potential conflict of interest. A statement
of Directors’ interests in Company shares
is set out on page 127.
D. SHAREHOLDER AND STAKEHOLDER
ENGAGEMENT:
The Board maintains regular
engagement, whether directly or
indirectly, via feedback from the Chief
Executive and other members of
management, with shareholders as well
as a range of key stakeholders.
For more information on our engagement
with shareholders see the Chair’s
introduction to corporate governance from
page 86, the shareholder engagement
section on pages 95 and 96 and the
Remuneration Committee Chair’s
introduction to the Directors’
Remuneration Report on page 110.
For information on our approach to
stakeholder engagement see from page
92. Our section 172(1) statement is set out
on page 97.
E. WORKFORCE POLICIES AND
PRACTICES:
Our Code of Ethics sets out our values and
the standards of behaviour we expect
from everyone at Tate & Lyle and those
who work with us. We encourage people
to report any breaches of the Code
through our Speak Up (whistleblowing)
programme which is available to all our
workforce and to third parties. The Board
is given access to the Code training
undertaken by our people and reviews the
operation of and reports from the Speak
Up programme.
For more information about this and our
approach to ethics and compliance
generally, see pages 52 and 95.
98 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
2. DIVISION OF RESPONSIBILITIES
F. THE ROLE OF THE CHAIR:
Dr Gerry Murphy, our non-executive
Chair, leads the Board and facilitates
constructive and open dialogue and
debate between the Board and
management. Under his leadership
the Board is responsible for its overall
effectiveness in directing the Company
and, every year, the Board conducts a
review of its own effectiveness and those
of its Committees. The Chair reviews the
performance of individual non-executive
directors and the Senior Independent
Director leads a review of the Chair. The
Nominations Committee reviews the
performance of the Executive Directors.
For information about the outcome of the
Board’s effectiveness review this year see
page 91 and the Nominations Committee
Report from page 101.
G. BOARD COMPOSITION AND DIVISION
OF RESPONSIBILITIES:
The Board comprises ten directors in
addition to the Chair, two Executive
Directors (Chief Executive, Nick Hampton
and Chief Financial Officer, Vivid Sehgal)
and eight independent non-executive
directors, one of whom is the Senior
Independent Director. None of the
Directors has served on the Board for
more than nine years. The Board
considers all the non-executive directors
to be independent. The Chair was deemed
independent on appointment.
Membership of the Board and information
about individual directors is set out from
page 80. The responsibilities of the
executive and non-executive directors
are described on page 89.
H. ROLE OF THE NON-EXECUTIVE
DIRECTORS:
The role of the non-executive directors
is to provide constructive challenge,
strategic guidance, offer specialist advice
and hold management to account. Before
every Board meeting the Chair holds
a pre-meeting without the Executive
Directors present to gather the views of
the non-executive directors on the papers
submitted and the topics to be discussed.
At the conclusion of each Board meeting,
the Chair holds another meeting without
the Executive Directors present to
consider and discuss any matters that
have arisen during the meeting. The Chair
of the Audit Committee also holds
meetings without the Executive Directors
present at the end of each Audit
Committee meeting.
Time commitment: In accepting their
appointment to the Board of Tate & Lyle,
non-executive directors confirm that they
are able to allocate sufficient time to
discharge their duties effectively. Each
year the Nominations Committee reviews
the time commitments of the non-
executive directors, which indicates that
in a typical year, non-executive directors
spend between 30 and 46 days on
business relating to Tate & Lyle, with the
Chairs of the Audit and Remuneration
Committees spending the most time.
The Board Chair typically spends two days
a week on Tate & Lyle business. In 2019,
the Board agreed a framework for
determining the number of public
company directorships directors can
undertake in addition to their appointment
at Tate & Lyle in order to ensure that they
do not become over-committed.
The significant commitments of each of
the Directors are included in the Board
biographies from page 80. For more
information, see meeting attendance in
the 2021 financial year on page 91.
I. ENSURING THE BOARD FUNCTIONS
EFFECTIVELY AND EFFICIENTLY:
The Company Secretary works with
the Board Chair, the Chairs of the
Committees, the Chief Executive and
other members of management to
ensure that the Board has the policies,
processes, information, time and
resources it needs in order to function
effectively and efficiently. All Directors
have access to the advice of the Company
Secretary who is responsible for advising
the Board on all governance matters.
Directors also have access to the advice
of the Executive Vice President, General
Counsel, as well as independent
professional advice at the expense of the
Company.
3. COMPOSITION, SUCCESSION AND EVALUATION
J. SUCCESSION PLANNING FOR
THE BOARD:
The Nominations Committee (which
comprises all the non-executive
directors and the Chair) is responsible
for succession planning for, and
recommending candidates for
appointment to, the Board and certain
senior management positions. It applies a
formal, rigorous and transparent process
focused on finding candidates who can
support the strategic priorities of the
business while also representing the
diversity of our global workforce and
customer base. The UK Corporate
Governance Code provides that all
Directors should seek re-election on an
annual basis and all Directors, with the
exception of Anne Minto, will seek
re-election at the forthcoming AGM.
For more information about the work
of the Nominations Committee and the
Board’s policy on diversity and inclusion,
see the Nominations Committee Report
from page 101.
L. BOARD EVALUATION:
In the 2021 financial year, the Board
undertook an externally facilitated review,
in line with the UK Corporate Governance
Code guidance.
For more information, see the Board
evaluation on page 91.
K. SKILLS, EXPERIENCE AND
KNOWLEDGE OF THE BOARD:
The Nominations Committee ensures that
the Board and its Committees have a
combination of skills, experience and
knowledge necessary to discharge their
oversight roles and to support the
management team in the execution of the
Company’s strategy.
For more information on the Board’s skills
and experience, see page 80 and the
Nominations Committee Report from
page 101.
TATE & LYLE PLC ANNUAL REPORT 2021
99
CORPORATE GOVERNANCE CONTINUED
4. AUDIT, RISK AND INTERNAL CONTROL
M. ENSURING THE INDEPENDENCE AND
EFFECTIVENESS OF INTERNAL AND
EXTERNAL AUDIT:
The Audit Committee is responsible for
reporting to the Board on a range of
matters concerning audit, risk and
internal controls. In particular, the Audit
Committee reviews and monitors the
independence and performance of the
internal audit function, Group Audit and
Assurance, and the external auditor, EY.
The Audit Committee has established and
monitors a policy for non-audit work
which EY is permitted to conduct.
For further information about the role and
work of the Audit Committee, external
audit and Group Audit and Assurance, see
from page 104.
5. REMUNERATION
P. DESIGNING REMUNERATION
POLICIES:
The Remuneration Committee is
responsible for determining
remuneration policies and practices
which support the strategy and promote
the long-term sustainable success
of the Group.
For more information about the work of
the Remuneration Committee, see the
Directors’ Remuneration Report from
page 110.
N. FAIR, BALANCED AND
UNDERSTANDABLE ASSESSMENT:
The Audit Committee reviews the
financial statements set out in the Group’s
annual and half-year results and reports
its findings and recommendations to the
Board. The Board, as a whole, considers
the recommendations of the Audit
Committee, the representations made by
management and the views of the internal
and external auditor in order to satisfy
itself of the integrity of the narrative and
financial statements and to determine
whether the financial and narrative
statements when taken together present
a fair, balanced and understandable
assessment of the Company’s position
and prospects.
O. RISK MANAGEMENT AND INTERNAL
CONTROLS:
The Audit Committee oversees the
internal controls framework and receives
regular reports from management
and the internal audit function on the
effectiveness of that framework. It
reports its findings to the Board. At least
twice a year, the Board reviews the
principal and emerging risks which apply
to the Group to ensure that they remain
current and that, to the extent possible,
there are mitigation plans in place to
manage those risks in accordance with
the risk appetite that the Board
determines, from time to time, is
appropriate to achieve the long-term
strategic objectives of the Group.
For further information, see the Audit
Committee Report from page 104 and the
‘fair, balanced and understandable’
statement on page 109.
For further information, see Risk Report
from page 68 and the Audit Committee
Report from page 104.
Q. EXECUTIVE REMUNERATION:
The Directors’ Remuneration Policy was
approved by shareholders on 23 July
2020. It continues to: (i) align with
corporate governance best practice; (ii)
enable the attraction and retention of
executive talent to deliver against the
Group’s strategy; and (iii) promote the
delivery of the long-term strategy.
As part of the process for developing
the Directors’ Remuneration Policy, the
Chair of the Remuneration Committee
consulted major institutional
shareholders on the Committee’s
proposals. A summary of the Directors’
Remuneration Policy can be found from
page 115.
The full Directors’ Remuneration Policy is
on pages 115 to 120 of the 2020 Annual
Report.
R. REMUNERATION OUTCOMES AND
INDEPENDENT JUDGEMENT:
The Remuneration Committee
determines remuneration outcomes
for the Executive Directors and other
members of senior management and
in so doing exercises independent
judgement and discretion in the context of
Company and individual performance and
the wider circumstances. No Director or
member of management is involved in
determining his or her own pay.
For more information about the
Remuneration Committee and
remuneration outcomes, see the
Directors’ Remuneration Report from
page 110.
100 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
NOMINATIONS COMMITTEE REPORT
CHAIR’S
INTRODUCTION
Our Board and senior leadership are
becoming more diverse in terms of
gender, nationality, ethnicity and
experience.
SUCCESSION PLANNING
EXECUTIVE COMMITTEE MEMBERS
This year we continued our focus on long-term succession
planning for the Executive Directors including consideration
of the development needs of members of our Executive
Committee. These planning exercises help the Board to manage
those instances of unplanned succession such as we experienced
this year when our former Chief Financial Officer, Imran Nawaz,
resigned to join Tesco plc. The Nominations Committee supported
Nick in the search for a new Chief Financial Officer and was
delighted with the swift appointment of Vivid Sehgal.
NON-EXECUTIVE DIRECTORS
As previously reported, in 2018 we undertook an externally
facilitated review of the Board’s composition to ensure that we
have the right combination of skills and experience to support
management in delivering our strategy into the future. That review
produced two important recommendations. The first was to
appoint a non-executive director (NED) with relevant and recent
senior management experience in the US food and beverage
sector, which is so critical to our business. In July 2019, Kim
Nelson joined our Board to fulfil that mandate.
The second recommendation was to appoint a NED with similar
experience in Asian markets to support our expansion in that
region. I’m pleased to report that we concluded our search in 2020
and John Cheung joined our Board in January 2021. John has
many years of experience in nutrition, food and beverages notably
in China. John replaced Dr Ajai Puri who retired from the Board in
March 2021 after nine years of service.
In May 2021, we were delighted to welcome Patrícia Corsi to the
Board. Patrícia, a Brazilian national, brings in-depth knowledge
of our key growth markets in Latin America as well as global
marketing, digital and brand expertise. Patrícia replaces our
colleague, Anne Minto, who will retire from the Board at the AGM
after serving nearly nine years of which six years were as Chair of
our Remuneration Committee. I am delighted that Sybella Stanley,
who joined the Board in 2016, will succeed Anne as Chair of the
Remuneration Committee.
I would like to take this opportunity once again to thank Anne and
Ajai for their long and dedicated service to Tate & Lyle.
This year, our focus will
continue to be on
long-term succession
planning.
DIVERSITY AT AND BELOW THE BOARD
In a consumer-led business like Tate & Lyle, diversity at all levels
is a pre-requisite to future-proofing our Company, by ensuring
that our employees reflect the customers and communities we
serve. Furthermore, as a global business, our Board needs to
reflect the rich diversity of the regions where we operate. This is
not just a matter of governance and social responsibility,
important as these dimensions are, it’s just good common sense.
That is why, last year, the Nominations Committee refreshed our
Board Diversity Policy and committed to maintain, as a minimum,
gender and ethnicity diversity of at least 30% respectively. We are
pleased that, at the time of writing, our Board is 36% women and
27% Black, Asian or ethnically diverse groups with a mix of
nationalities that reflects the global profile of our business.
It is also why the Board supported management’s commitment
made last year to achieve 50% gender diversity in leadership roles
by 2025. We monitor progress against this target and are pleased
to see that in the last 12 months the number of women in
leadership roles has increased from 27% to 32%.
PRIORITIES FOR THE YEAR AHEAD
In the year ahead, we will continue to focus on long-term
succession planning for senior executives below the Board and to
follow the progress of management’s talent development and
equity, diversity and inclusion initiatives.
Gerry Murphy
Chair of the Nominations Committee
TATE & LYLE PLC ANNUAL REPORT 2021
101
NOMINATIONS COMMITTEE REPORT CONTINUED
COMMITTEE GOVERNANCE
Responsibilities
The Committee assists the Board by reviewing the size and
composition of the Board, including succession planning, and
the leadership needs of the Group generally. It recommends
candidates for appointment as Directors and as Company
Secretary and reviews the performance of the Executive
Directors. Further details of its responsibilities are in the
Committee’s terms of reference, which the Committee reviews
annually and can be found on the Company’s website,
www.tateandlyle.com.
Composition
During the financial year under review, the Committee comprised
the Chair of the Company and all independent Directors.
The Company Secretary is the secretary to the Committee.
Meetings during the year
Meetings are generally held around the time of scheduled Board
meetings. The Committee held three scheduled meetings during
the year. Attendance during the year is set out on page 91.
The Chief Executive and the Chief Human Resources Officer are
invited to attend and present to the Committee on an ad hoc basis,
depending on the issues being discussed.
Effectiveness
The Committee carried out an externally facilitated review of its
effectiveness and the output was discussed by the Committee.
This concluded that the Committee continued to operate
effectively and confirmed that the focus for the coming year would
continue to be on Executive Director succession planning, as well
as succession planning for other members of the executive
management team and talent management in the wider
organisation.
WORK UNDERTAKEN DURING THE YEAR
The Committee maintains a calendar of items for consideration
at each meeting and reviews and updates it regularly.
Board succession planning
During the course of the year, the Nominations Committee
was involved in the search for a new Chief Financial Officer,
culminating in the appointment of Vivid Sehgal, and concluded
its search for a non-executive director with knowledge and
experience of the markets in Asia with the appointment of
John Cheung.
The Committee started a new search for a NED to replace Anne
Minto. A detailed job specification was prepared for the new NED
and Odgers Berndtson was appointed to assist with the search,
which resulted in the appointment of Patrícia Corsi. Both Odgers
Berndtson and Russell Reynolds which assisted in the search for
Vivid Sehgal are signatories to the Voluntary Code of Conduct for
Executive Search Firms and both have a good understanding of
the Group’s business.
Succession planning for senior management
The Committee also considered succession plans for senior
executive roles. During the year, members of the Committee were
consulted on the appointment of Victoria Spadaro Grant to the
Executive Committee as President, Innovation and Commercial
Development and on the appointment of Andrew Taylor to the
newly created role of President Asia, Middle East, Africa and
Latin America.
Review of individual Directors and members of the Executive
Committee
Each Director goes through a formal performance review
process as part of the annual Board effectiveness review.
Dr Gerry Murphy led performance reviews of the non-executive
directors. All Directors completed this process during the year.
The Nominations Committee reviewed the performance
of the Chief Executive and the Chief Financial Officer.
The Senior Independent Director, Paul Forman, led the review
of the Chair.
These reviews confirmed that each Director continues to make
an effective contribution to the Board’s work and is well prepared
and informed about issues they needed to consider. In each case,
their commitment remains strong.
The Committee evaluated the performance of the other members
of the Executive Committee and reported its conclusions to the
Remuneration Committee.
BOARD DIVERSITY
As described in the Chair’s introduction to this Nominations
Committee Report, the Board believes that a diverse and inclusive
culture is a driver of superior business performance, growth and
innovation. In its Diversity Policy the Board commits to maintain,
as a minimum, 30% gender diversity and 30% ethnic
representation and to improve it over time.
102 TATE & LYLE PLC ANNUAL REPORT 2021
The Committee uses search firms who are signatories to the
Voluntary Code of Conduct for Executive Search Firms which
seeks to address gender diversity on boards and best practice for
the related search processes.
When considering candidate directors, the Committee looks at
a number of different criteria, including gender, age, culture and
personal attributes such as thinking style. This is reflected in the
longlists and shortlists of possible candidates.
As at the date of this Annual Report, the Board comprises the
Chair, two Executive Directors and eight non-executive directors.
Female representation (four Directors) equates to 36% of the
Board and representation from Black, Asian or ethnically diverse
groups is 27%.
Diversity below the Board
We recognise that to be a successful company, we must be both
diverse and inclusive. We expect everyone, everywhere, to play
a role in ensuring we become a truly diverse and inclusive
organisation where differences are respected and everyone’s
contributions are valued.
Our Group human resources policy sets out our commitment to
providing opportunities for all colleagues, irrespective of (among
other things) sex, race, ethnicity, colour, religion, background, age
and sexual orientation.
The Board supported management’s commitment to achieve 50%
gender diversity in leadership roles across the organisation by
2025 and tracks progress against that target. It also supported the
appointment of our first Chief Equity, Diversity & Inclusion Officer
and, in March, received a dedicated training session on this topic.
GOVERNANCE
GENDER DIVERSITY OF
SENIOR MANAGEMENT AND
THEIR DIRECT REPORTS1 (%)
At 26 May 2021
Men
Women
48
52
1
In accordance with the Code, senior management is
defined as the Executive Committee (including the
Chief Executive and Chief Financial Officer) and the
Company Secretary.
TATE & LYLE PLC ANNUAL REPORT 2021
103
AUDIT COMMITTEE REPORT
CHAIR’S
INTRODUCTION
I am pleased to present the work of the Committee during the
year. Although we have conducted most of our meetings by video
conference this year, with occasional in person attendance by
some Board members and management who are based in the UK,
the responsibilities of the Committee have not changed. I continue
to engage with a significant number of stakeholders, including the
Group Audit and Assurance (internal audit) function, senior
management and the external auditor to ensure our processes
and controls are not impacted by the pandemic. The Committee
and I were reassured that there was minimal impact on our usual
processes, albeit adapted, and they remain effective.
REVIEWS DURING THE YEAR
In addition to the usual review of accounting judgements and
disclosures on key accounting matters including commodity
accounting, exceptional items and taxation (see details set out on
page 106), we continued with our practice of looking in particular
depth at certain aspects of the control environment. During the
year, we met our finance leaders from Primary Products (based
in the US), Food & Beverage Solutions North America, Asia
and Latin America and the Group Tax and Treasury functions.
The Committee also received updates on the work of the Group
Audit and Assurance (internal audit) team, ethics and compliance,
IT and cyber risks, data privacy management and the finance
talent management programme.
As part of the Group’s strategy to expand our portfolio and bring
new products to the market faster, during the year Tate & Lyle
completed the acquisition of outstanding majority shareholding
in Sweet Green Fields and bought an 85% stake in Chaodee
Modified Starch Co., Ltd. The Committee monitored the
acquisition accounting and the work performed to date in
implementing Tate & Lyle’s controls, processes and ethics
and compliance programme into these new businesses.
This was another year in which we completed the year-end close
process and audit under lockdown restrictions. The Committee
was reassured by the actions that management and the external
auditor had taken to ensure there was minimal impact on the
year-end timetable. The Committee and the Board would like to
thank the teams for their remarkable resilience and for adapting
to the new ways of working so well.
104 TATE & LYLE PLC ANNUAL REPORT 2021
There was minimal impact on our
usual processes, albeit adapted,
and they remain effective.
I would also like to thank my fellow colleagues, Dr Ajai Puri who
stepped down from the Board on 31 March 2021, and Anne Minto,
who will be stepping down from the Board at the 2021 AGM. They
have both made huge contributions to Tate & Lyle over the last
nine years and we thank them for their support of, and counsel
to, the Committee. In their place we welcomed to the Committee,
John Cheung from 1 January 2021 and Sybella Stanley from
1 April 2021 in advance of her appointment as the Chair of the
Remuneration Committee.
CONCLUSION
Information on the following pages sets out in detail the
composition of the Committee, its activities and our priorities
going forward. The Committee and I are looking forward to
engaging with our employees in person and visiting our sites when
it is safe to do so.
I hope that you will find this report useful in understanding
our work and I welcome any comments from shareholders
on my report.
Warren Tucker
Chair of the Audit Committee
GOVERNANCE
COMMITTEE GOVERNANCE
Responsibilities
The Committee assists the Board by overseeing financial
reporting, internal controls and the risk management process,
the Group Audit and Assurance function and our relationship with
the external auditor. Further details of its responsibilities are in
the Committee’s terms of reference on the Company’s website,
www.tateandlyle.com.
The Chief Financial Officer, VP Group Audit and Assurance, VP
Group Financial Controller, EVP General Counsel and
representatives of the external auditor are invited to, and attend,
all relevant parts of each meeting. The Chair of the Board and
Chief Executive are also invited to, and attend, each Committee
meeting. In addition, senior finance and operational leaders attend
and present to the Committee as needed, depending on the issues
being discussed.
The Committee meets privately with each of: the Chief Financial
Officer; the VP Group Audit and Assurance; the Chief Executive;
and the Company’s external auditor on an individual basis to
ensure the effective flow of material information between the
Committee and management. The Committee also meets without
management present at the end of every meeting.
Effectiveness
The Committee Chair carried out an externally facilitated review
of its effectiveness and sought feedback from its Committee
members, certain members of senior management and the
external auditor. The output was discussed by the Committee.
This concluded that the Committee continued to operate
effectively throughout the year.
WORK UNDERTAKEN DURING THE YEAR
The Committee maintains a rolling calendar of items for
consideration at each meeting and reviews and updates it
regularly. As well as the work referred to above, the Committee
focused on four main areas: financial reporting; oversight of the
external auditor; oversight of the internal audit function; and
internal control and risk management.
Financial reporting
At each of its meetings, the Committee reviewed and
constructively challenged the accounting methodologies,
judgements and disclosures set out in the papers prepared by
management and determined, with the input from the external
auditor, the appropriateness of these. The significant issues
considered by the Committee in relation to this year’s financial
statements are listed on page 106. Papers on the Group’s existing
and emerging litigation risks were also considered.
Composition
The Committee currently comprises six independent Directors:
Warren Tucker (Chair), John Cheung, Anne Minto, Paul Forman,
Kim Nelson and Sybella Stanley. The Committee welcomed John
Cheung upon his appointment to the Board on 1 January 2021 and
Sybella Stanley on 1 April 2021 in advance of her appointment as
the Chair of the Remuneration Committee when Anne Minto
retires at the AGM. As part of John’s induction programme, he met
with the external auditor, VP Group Financial Controller, VP Group
Audit and Assurance and other leaders of key functions to help
him gain an understanding of Tate & Lyle’s finance and controls
framework. In addition, Dr Ajai Puri stepped down from the Board
and the Committee on 31 March 2021.
The Code stipulates that:
i.
the Committee, as a whole, shall have competence relevant to the
sector in which the Company operates. The Committee
considered that it does, as a whole, have extensive experience
of global manufacturing and supply organisations, and of
business-to-business groups, experience of commercialisation
of innovation pipelines and a wealth of knowledge and
understanding of the London investment community and
governance matters. It continues to strengthen the
competencies of its members through deep dives and updates
on relevant matters.
ii. at least one Committee member should have recent and relevant
financial experience. Warren Tucker meets this requirement.
Warren was Chief Financial Officer of Cobham plc for a decade
until 2013 and is a chartered accountant. He also served as an
independent non-executive director on a FTSE 100 audit
committee from 2010 to May 2020.
The Company Secretary is the secretary to the Committee.
Meetings during the year
Meetings are generally scheduled in line with key times in the
Group’s financial reporting calendar. The Committee held five
scheduled meetings during the year. Attendance during the year
is set out on page 91. The Committee has also met once since
the end of the financial year and prior to the signing of this
Annual Report.
TATE & LYLE PLC ANNUAL REPORT 2021
105
AUDIT COMMITTEE REPORT CONTINUED
SIGNIFICANT MATTERS RELATING TO THE FINANCIAL STATEMENTS CONSIDERED BY THE COMMITTEE
AREA
BACKGROUND
COMMITTEE’S ACTIVITIES AND CONCLUSION
Commodity
accounting
Exceptional items
Taxation
We use commodity contracts to manage and
hedge our corn and associated co-product
positions in the US. The valuations of co-
products positions in particular are
underpinned by several judgements, which can
have a material impact on the reported results
of the Group.
We exclude from our alternative performance
measures exceptional items which are material
in amount and that are outside the normal
course of business or relate to events which do
not frequently recur. Therefore these merit
separate disclosure in the financial statements
in order to provide a better understanding of the
Group’s underlying financial performance.
We operate and pay taxes in multiple
jurisdictions, which requires the interpretation
of complex tax law. As such, we make provision
for potential tax exposures with local tax
authorities and reassess this as necessary at
the half year and year end. Our assessment is
underpinned by a range of judgements from tax
professionals and external advisors.
The Committee considered the work performed by management and
the external auditor and probed management on the assumptions
and modelling before concluding that the judgements made in
determining the accounting treatment and valuations of commodity
and co-product positions were appropriate.
The Committee constructively challenged the judgement of
management regarding the measurement and classification of
exceptional items.
The Committee also considered the appropriateness of the
associated disclosures and concluded that both the judgements
made, and the disclosures proposed were reasonable. See page 47.
The Committee reviewed the key judgements made in estimating the
Group’s tax charge along with the key disclosures, set out on page 47
and in Note 11. The Committee was satisfied that the judgements
made in estimating the Group’s tax charge were reasonable, and that
the disclosures were appropriate.
The Committee considered and challenged the appropriateness of
tax provisions at the balance sheet date, including changes in
provisions during the year, as well as the Group’s associated tax
risks. The Committee also considered the composition of the Group’s
deferred tax balances and recognition judgements. The Committee
concluded that the measurement and disclosures of tax balances
were appropriate.
Acquisitions of two
new businesses
As part of the Group’s strategy to expand our
portfolio and bring new products to the market
faster, Tate & Lyle completed the acquisition of
the remaining 85% equity in Sweet Green Fields
in November 2020 and acquired an 85%
shareholding in Chaodee Modified Starch Co.,
Ltd in February 2021.
The Committee considered the work management performed on the
completion accounts and provisional purchase price allocations and
concurred with management’s recommendation.
The Committee monitored the implementation of Tate & Lyle’s
controls, processes and ethics and compliance programme into the
new businesses and will continue to do so going forward.
Impairment reviews
As required, we test all goodwill for impairment
annually and, additionally, test all assets where
there has been an indicator of potential
impairment.
The Committee reviewed and challenged the annual goodwill
impairment assessments and considered the appropriateness of
management’s assumptions, including consideration of the impact
of the pandemic on such assessments.
Management concluded that there was significant headroom in its
goodwill impairment reviews and, accordingly, no impairments were
required on the CGUs. Impairment reviews were also undertaken
on other assets and concluded that any impairments recorded
were appropriate. The Committee agreed with this conclusion.
The disclosure is set out in Note 18.
106 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
Engagement with regulators
During the year, the Corporate Reporting Review team of the
Financial Reporting Council (FRC) informed the Chair of
Tate & Lyle that they had reviewed certain aspects of our 2020
Annual Report. Following its review, the FRC informed Tate & Lyle
that there were no questions or queries that it wished to raise, and
the letter did not require any formal response other than our
acknowledgement of receipt. The FRC has used certain of our
2020 Annual Report disclosures for goodwill impairment and
Covid-19 risk as examples of best practice.
Focus areas for the Audit Committee in the 2022 financial year
In addition to the recurring matters on the Committee’s rolling
calendar, the Committee will focus on (i) the continued integration
into our controls framework of the two businesses that were
acquired; (ii) continued enhancements to the risk and controls
matrix; and (iii) monitoring closely the recent proposals for
reform of audit and corporate governance published by the UK
government to ensure Tate & Lyle is well placed to address them.
The Committee will continue to carry out deep dives into the two
business divisions, both at Group functional level and at divisional
business levels, on a rotational basis.
External auditor
As part of the reporting of the half-year and full-year results
statements, EY reported to the Committee on its assessment of
the Group’s accounting judgements and estimates and its control
environment. EY did not report any significant deficiencies in
controls nor did it disagree with any of the Group’s accounting
judgements and estimates. The Chair of the Committee meets
with EY prior to each meeting and outside the meeting cycle on
a regular basis.
Safeguarding the auditor’s independence
The independence of the external auditor is essential to the
provision of an objective opinion on the true and fair view
presented in the financial statements. Auditor independence and
objectivity are safeguarded by a number of control measures,
including limiting the nature and value of non-audit services
performed by the external auditor.
The Committee operates a policy to safeguard the objectivity and
independence of the external auditor. This policy sets out certain
disclosure requirements by the external auditor to the Committee;
restrictions on the employment of the external auditor’s former
employees; and partner rotation.
During the year, the Committee reviewed the operation and
results of this policy and confirmed that, in its opinion, the
external auditor remained independent.
Provision of non-audit services
The policy also sets out the circumstances in which the external
auditor may be permitted to undertake non-audit services and
the services which are not permitted under any circumstances,
such as the provision of remuneration advice and internal
audit outsourcing.
The Committee considers quarterly reports which set out any
non-audit services provided by the auditor and the fees incurred.
Under our policy on non-audit services, the Chief Financial Officer
has authority to approve the permitted services up to £10,000,
with any amounts above that limit requiring approval of the
Committee Chair or the Committee itself. Any amounts approved
by the Chief Financial Officer are reported to the Committee at its
next meeting.
The total amount payable in respect of the Group audit and audit
of subsidiaries was £2.7 million, and £0.1 million was in respect
of the review of the half-year results, being the only non-audit
service and it being standard practice. Fees paid in respect of
non-audit services therefore comprised 4% of the total fees paid
to EY.
Audit quality
To maintain audit quality, the Committee reviews and challenges
the proposed external audit plan, including its scope and
materiality, before approval, to make sure that EY has identified
all key risks and developed robust audit procedures and
communication plans. Throughout the year, the Committee looks
at the quality of the auditor’s reports and considers its response
to accounting, financial control and audit issues as they arise.
The Committee also meets with EY regularly without
management present, providing an opportunity to raise any
matters in confidence and for an open dialogue. This meeting
also gives the Committee the chance to monitor the performance
of the lead engagement partner both inside and outside
Committee meetings.
The Chair meets to review EY’s quality reporting and discussed
items that could impact Tate & Lyle, in particular the culture
of the Audit Division.
Effectiveness of the external auditor
The effectiveness of the external auditor is assessed in
accordance with a process agreed by the Committee. As part of
the process, the auditor’s performance for the 2020 financial year
was reviewed against criteria set at the start of the audit, which
includes quality and experience of the audit team, audit planning
and adaptability to changes in business needs and the control
environment, providing objectivity and challenge, project
management, and reporting and communication. The Committee
also took into consideration the latest FRC’s guidance on
evaluating audit quality.
TATE & LYLE PLC ANNUAL REPORT 2021
107
AUDIT COMMITTEE REPORT CONTINUED
The review sought feedback from management at Group and
divisional levels most directly involved in the year-end audit and
feedback was also sought from EY on the contribution from our
management team to an effective audit.
The Committee considered the feedback received together with
its wider knowledge and concluded that the external audit process
for the 2020 financial year was effective and that EY provided
independent challenge to management. Areas of focus were
identified and used to develop an audit improvement plan for the
audit in the 2021 financial year.
The Committee will formally assess EY’s performance in relation
to the 2021 audit following its completion.
Tenure
EY was appointed the Group’s external auditor at the Company’s
AGM in 2018 for the financial year 31 March 2019 following a
formal tender process. Subject to continuing satisfactory
performance, we anticipate that the lead audit partner, Lloyd
Brown, will rotate after his fifth year as lead audit partner, i.e.
after the financial year ending on 31 March 2023.
The Committee recommended, and the Board intends to propose,
the reappointment of EY as the Company’s auditor for the 2022
financial year. It believes the independence and objectivity of the
external auditor and the effectiveness of the audit process are
safeguarded and remain strong.
The Committee considers that the Company has complied with
the Competition and Markets Authority’s Statutory Audit Services
for Large Companies Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014 for the financial year under review.
There are no contractual obligations that restrict the Committee’s
choice of external auditor.
Internal audit – Group Audit and Assurance
Group Audit and Assurance (GAA) is an internal function that
provides independent and objective assurance to all levels of
management up to the Board. Its responsibilities include
evaluating and reporting on the adequacy and effectiveness of the
systems of risk management and internal controls operated by
management. Management remains responsible for identifying
risks and for the design and operation of controls to manage
risk effectively.
The GAA function is staffed by professionally qualified and
experienced individuals located in both London and Chicago.
They report to the VP, GAA, who is based in London, who in turn
reports directly to the Chair of the Audit Committee and the
Chief Executive.
The Committee received, considered and approved the annual
internal audit plan, which was constructed using a risk-based
approach taking account of risk assessments, input from senior
management and previous audit findings. This year there was an
emphasis on the impact of Covid-19 and providing assurance over
key financial controls given the disruption to working practices,
as well as a continued focus on cyber security and IT operations.
The audit plan is kept under review depending on the operational
limitations and business requirements and any proposed changes
to the plan are discussed and agreed with the Committee.
Ongoing visibility of the internal control environment is provided
through internal audit reports to management and the
Committee. This year, all the audits were performed remotely and
with an external local co-source partner where appropriate. The
reports are graded to reflect an overall assessment of the control
environment under review, and the significance of any control
weaknesses identified. Remedial actions to address findings are
identified and agreed with management. The Committee receives
a quarterly status report from the VP, GAA, detailing progress
against the agreed plan, key trends and findings. The Committee
places high emphasis on actions being taken as a result of internal
audits and regular reports are provided on the status of any
overdue actions.
The Committee also reviewed the effectiveness of GAA this year.
It was undertaken by way of a questionnaire and feedback was
sought from members of the Audit Committee, senior
management and external auditor. The Committee concluded
that the function continues to operate effectively.
Internal control and risk management
The Board is responsible for determining the nature and extent
of the principal risks it is willing to take in achieving the Group’s
strategic objectives and for maintaining sound risk management
and internal control systems. A formal process is in place which
aims to identify and evaluate risks including emerging risks and
how they are managed. Further details including the description
of principal risks are set out on pages 71 to 76.
The objective of the internal control system is to protect the
Group’s assets and reputation and to ensure the reliability of
financial information for both internal use and external
publication. The systems of internal control and risk management
cannot eliminate the risk of failure to achieve business objectives
and can only provide reasonable, not absolute, assurance against
material misstatement or loss. The Committee continued to
receive and consider regular reports from management and the
VP, GAA, on the effectiveness of the Group’s internal controls and
risk management system as well as the external auditor on
matters identified during its statutory audit work.
During the year, an external third party was engaged to review
the effectiveness of the risk management function and the
Committee discussed the findings from the review. Whilst many
good practices were observed, a small number of areas for
improvement were identified which included fully embedding
the new Enterprise Risk Management system and enhancing
system reporting capabilities to provide more insightful
management reporting.
108 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
CORPORATE GOVERNANCE
FAIR, BALANCED AND UNDERSTANDABLE REPORTING
Robust year-end governance processes are in place
to support the Board’s review of the Annual Report
which include:
• ensuring that all of those involved in the preparation of
the Annual Report have been briefed on the ‘fair, balanced
and understandable’ requirements;
• internal verification by the Group Audit and Assurance
team of non-financial factual statements, key
performance indicators and descriptions used within the
narrative;
• regular engagement with, and feedback from, senior
management on proposed content and changes;
• feedback from external parties (corporate reporting
specialists, remuneration advisors, external auditor) to
enhance the quality of our reporting;
• review by the Audit Committee of the governance
processes employed to provide assurance that the
Annual Report is fair, balanced and understandable,
including the opportunity to challenge members of
management, Group Audit and Assurance and
the external auditor on the robustness of those
processes; and
• a process to ensure that unfavourable outcomes have
been duly highlighted.
The Board considers that, taken as a whole, the Annual
Report is fair, balanced and understandable. The Board
further believes that the Annual Report provides the
necessary information for shareholders to adequately
assess the Company’s position and performance, business
model and strategy.
Internal control over financial reporting
The Group has specific internal mechanisms that govern the
financial reporting process and the disclosure controls and
procedures around the approval of the Group’s financial
statements. Twice a year, representatives from the business
units certify that they have complied with the minimum control
standards and that their reported information provides a true and
fair view of the state of the financial affairs of their division and
its results for the period. The results of this financial disclosure
process are reported to the Audit Committee.
Annual review of the effectiveness of the systems
of internal control
The Board monitors the effectiveness of the Group’s systems
of internal control and risk management throughout the year.
Once a year, the Board, supported by the Audit Committee,
conducts its own review of the effectiveness of the systems of risk
management and internal control. As last year, the 2021 review
was facilitated by GAA and covered the period from the start of the
financial year to the date of this Annual Report. The process
included a two-stage review to facilitate discussion, with the Audit
Committee discussing the results of the review at their meetings
in March and May 2021. The Board then discussed the output at its
meeting in May 2021.
The 2021 review covered material financial, operational and
compliance controls, our values and behaviours, and the risk
management process, and included questionnaires and
representation letters completed by management. GAA validated
the results of the review, ensuring that the responses from
management were consistent with the results of its work during
the year. The Committee reported to the Board that the process
for monitoring and reviewing internal control and risk management
processes is robust and appropriate for the size and scale of the
business. It was noted that no significant failing or weakness had
been identified and confirmed that it was satisfied the systems and
processes were functioning effectively.
The Group’s going concern and Viability Statement disclosures are
set out in the Strategic Report on pages 49 and 70 respectively.
TATE & LYLE PLC ANNUAL REPORT 2021
109
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION REPORT
CHAIR’S
INTRODUCTION
The Committee reflected on remuneration
outcomes in the context of a demanding
year and believes they appropriately reflect
strong performance and the broader
stakeholder experience.
REFLECTING ON PERFORMANCE THIS YEAR
As you will have read in the introductory statements in this
Annual Report, it has been an exceptional year in many
respects. We are pleased to report a year of strong financial
performance in spite of a very challenging environment. Food &
Beverage Solutions delivered another year of strong top-line
growth and double-digit profit growth. Primary Products
delivered resilient performance with profit higher benefiting
from a record year of Commodities profits. Both businesses
were supported by strong operational performance and
rigorous cost discipline.
FINANCIAL PERFORMANCE HIGHLIGHTS:
• 6% increase1 in adjusted Group adjusted profit before tax
• 12% increase1 in adjusted diluted earnings per share,
benefitting from lower effective tax rate of 14.3%
(2020: 17.9%)
• Strong growth in Food & Beverage Solutions: +3% volume;
+6% revenue; +12% adjusted operating profit1 to £177m
• Adjusted free cash flow £3m higher at £250m
• Productivity programme delivering ahead of expectations
• Final dividend increased, to 22.0p up 5.8%, making a full
year dividend of 30.8p, up 4.1%
We are proud of the extraordinary efforts of our people to
deliver against the clear priorities that Nick and the Board set
out just over a year ago to:
• look after our colleagues and communities
• build stronger customer relationships
• continue to progress our strategy
• maintain our financial strength
Throughout the year, the Committee and Board received
regular updates on the impact of the pandemic on our business
and our people. Against that backdrop, we are pleased to
report that we made good progress in all these areas.
Our purpose of Improving Lives for Generations has been central
to our response to the pandemic. We live our purpose through
three pillars – Supporting Healthy Living, Building Thriving
Communities and Caring for our Planet – and these have all
been at the front of our minds during the year. In May 2020,
we announced a set of long-term targets and commitments
to live our purpose, which aligned to five of the UN Sustainable
Development Goals where we believe we can have the
greatest impact.
We are pleased with our progress against our sustainability
commitments in our first year. More details can be found on
pages 28 and 29, with the key highlights being:
• Scope 1 and 2 absolute greenhouse gas emissions reduced
by 7% (2030 target: 30%)
• 69% of our waste was beneficially used (2030 target: 100%)
• Supported 1.5 million acres of sustainable acreage,
equivalent to the amount of corn we buy each year.
We also exceeded the two environmental targets set with a
2008 baseline to be delivered by 2020. The first was to reduce
greenhouse gas emissions by 19% on a per tonne of production
110 TATE & LYLE PLC ANNUAL REPORT 2021
110 TATE & LYLE PLC ANNUAL REPORT 2021
1 Percentage change in constant currency for continuing operations.
basis by 2020 – we delivered 25% reduction. The second was to
reduce waste to landfill by 30% – we delivered 37% reduction.
In addition to our environmental performance, we made good
progress on our 2025 targets to further our Supporting Healthy
Living and Building Thriving Communities purpose pillars
(more details can be found on pages 28-29). For example,
our commitment to achieving gender parity in leadership roles
by 2025 made good progress with the number of women in
leadership roles increasing from 27% to 32%. We also provided
1.7 million nutritious meals to people in need in our local
communities through our partnership with food banks across
the world.
Despite the external challenges, the Board approved the
acquisitions of tapioca and stevia businesses during the year,
expanding our global customer offering and our presence in
the key growth market of Asia. To complete these acquisitions
and still undertake all the necessary due diligence during a
global pandemic is a significant achievement and is a credit to
management and the teams directly involved.
We are very grateful to all our employees for the commitment
and resilience they have shown to serve our customers and to
move the business forward during the year. We are particularly
pleased to celebrate the ‘2020 Heroes’ profiled in this Annual
Report, and to recognise the collective endeavours of all our
people to deliver a successful year through our various broad-
based reward and recognition arrangements: All permanent
employees with at least six months’ service will have received
some form of discretionary reward or recognition payment for
the year.
DIRECTORS’ REMUNERATION REPORT
CHAIR’S
INTRODUCTION
The Committee reflected on remuneration
outcomes in the context of a demanding
year and believes they appropriately reflect
strong performance and the broader
stakeholder experience.
REFLECTING ON PERFORMANCE THIS YEAR
FINANCIAL PERFORMANCE HIGHLIGHTS:
As you will have read in the introductory statements in this
Annual Report, it has been an exceptional year in many
• 6% increase1 in adjusted Group adjusted profit before tax
• 12% increase1 in adjusted diluted earnings per share,
respects. We are pleased to report a year of strong financial
benefitting from lower effective tax rate of 14.3%
performance in spite of a very challenging environment. Food &
(2020: 17.9%)
Beverage Solutions delivered another year of strong top-line
growth and double-digit profit growth. Primary Products
• Strong growth in Food & Beverage Solutions: +3% volume;
+6% revenue; +12% adjusted operating profit1 to £177m
delivered resilient performance with profit higher benefiting
• Adjusted free cash flow £3m higher at £250m
from a record year of Commodities profits. Both businesses
were supported by strong operational performance and
• Productivity programme delivering ahead of expectations
• Final dividend increased, to 22.0p up 5.8%, making a full
rigorous cost discipline.
year dividend of 30.8p, up 4.1%
1 Percentage change in constant currency for continuing operations.
We are proud of the extraordinary efforts of our people to
deliver against the clear priorities that Nick and the Board set
out just over a year ago to:
• look after our colleagues and communities
• build stronger customer relationships
• continue to progress our strategy
• maintain our financial strength
Throughout the year, the Committee and Board received
regular updates on the impact of the pandemic on our business
and our people. Against that backdrop, we are pleased to
report that we made good progress in all these areas.
Our purpose of Improving Lives for Generations has been central
to our response to the pandemic. We live our purpose through
three pillars – Supporting Healthy Living, Building Thriving
Communities and Caring for our Planet – and these have all
been at the front of our minds during the year. In May 2020,
we announced a set of long-term targets and commitments
to live our purpose, which aligned to five of the UN Sustainable
Development Goals where we believe we can have the
greatest impact.
We are pleased with our progress against our sustainability
commitments in our first year. More details can be found on
pages 28 and 29, with the key highlights being:
• Scope 1 and 2 absolute greenhouse gas emissions reduced
by 7% (2030 target: 30%)
• 69% of our waste was beneficially used (2030 target: 100%)
• Supported 1.5 million acres of sustainable acreage,
equivalent to the amount of corn we buy each year.
basis by 2020 – we delivered 25% reduction. The second was to
reduce waste to landfill by 30% – we delivered 37% reduction.
In addition to our environmental performance, we made good
progress on our 2025 targets to further our Supporting Healthy
Living and Building Thriving Communities purpose pillars
(more details can be found on pages 28-29). For example,
our commitment to achieving gender parity in leadership roles
by 2025 made good progress with the number of women in
leadership roles increasing from 27% to 32%. We also provided
1.7 million nutritious meals to people in need in our local
communities through our partnership with food banks across
the world.
Despite the external challenges, the Board approved the
acquisitions of tapioca and stevia businesses during the year,
expanding our global customer offering and our presence in
the key growth market of Asia. To complete these acquisitions
and still undertake all the necessary due diligence during a
global pandemic is a significant achievement and is a credit to
management and the teams directly involved.
We are very grateful to all our employees for the commitment
and resilience they have shown to serve our customers and to
move the business forward during the year. We are particularly
pleased to celebrate the ‘2020 Heroes’ profiled in this Annual
Report, and to recognise the collective endeavours of all our
people to deliver a successful year through our various broad-
based reward and recognition arrangements: All permanent
employees with at least six months’ service will have received
some form of discretionary reward or recognition payment for
We also exceeded the two environmental targets set with a
2008 baseline to be delivered by 2020. The first was to reduce
greenhouse gas emissions by 19% on a per tonne of production
the year.
GOVERNANCE
GOVERNANCE
LOOKING AFTER OUR EMPLOYEES DURING COVID-19
As described in last year’s report, due to Covid-19, the
business implemented a salary freeze for employees at
‘management’ level and above, prioritising increases for
‘front-line’ operational and technical roles. The salary review
at 1 April 2021 has run as normal for all our employees.
Throughout the pandemic, there were no furloughs
or redundancies due to Covid-19, and the Company has
not applied for any government relief programmes in
any jurisdiction.
We made enhancements to our US healthcare benefits in the
context of Covid-19, for example: waiving employee payments
on telemedicine appointments and adapting policies to make
quarantine periods fully paid – to enable our employees to
safeguard themselves, their families and colleagues.
Recognition payments have been made to a broad group of
operator and technician plant-based roles to recognise their
significant contribution in maintaining operational continuity
in the year.
MODERATION IN EXECUTIVE PAY AND SHAREHOLDER
SUPPORT FOR OUR 2020 POLICY RENEWAL
We have engaged proactively with shareholders over
successive years, and I am pleased to report that the level of
shareholder support for our remuneration policy and
framework remains strong – our most recent Policy and Report
resolutions both enjoying support in excess of 97%:
• Our Policy renewal in 2020 formally adopted structural
reductions in bonus opportunity and retirement benefit
provision
• Executive Directors agreed changes to the level of their own
retirement benefits, to give up contractual entitlements
and the CEO’s pension benefit has reduced from 25% on
appointment to 15% of salary from 1 April 2021, in line with
the rate available to the UK workforce
• We introduced post-employment shareholding requirements
and strengthened claw back and malus provisions to include
circumstances relating to ‘corporate failure’.
EXECUTIVE DIRECTOR CHANGES IN THE YEAR
We are pleased to welcome Vivid Sehgal who joined the Board
on 1 March 2021 as Chief Financial Officer Designate, and
became Chief Financial Officer (CFO) on 1 April 2021.
As announced on 7 October 2020, Imran Nawaz stepped down
from the Board on 31 March 2021, and ceased employment
on 30 April 2021 to take up a new CFO role. The Committee
recognises Imran’s significant contribution to the business
during his tenure and in supporting a managed succession.
However, under the terms of his appointment, certain awards
become repayable on cessation of employment as described
on page 119, and all outstanding variable pay awards are
similarly forfeited. Accordingly, his remuneration for the year
ended 31 March 2021 reflects the fixed elements of his
remuneration only.
VARIABLE PAY OUTCOMES FOR THE YEAR
Headline incentive outcomes for the year just ended reflect the
strong operational and financial performance and strategic
progress of the business through this demanding period.
• Annual bonus plan: awards for the year reflect strong
year-on-year profit growth and cash performance relative
to stretching targets set at the start of the year (before the
impact of the pandemic was known), as well as strong
progress against strategic non-financial targets, including
the targets for our three purpose pillars and performance
against our environmental commitments.
• Performance Share Plan (PSP): awards made in 2018 will
vest at 57.3% of maximum, having reached the end of their
three-year performance period. Adjusted return on capital
employed in the year to 31 March 2021 of 17.2% results
in full vesting for that element; adjusted profit before tax
compound annual growth of 4.4% was just below the target
range; and compound annual profit growth in the Food &
Beverage Solutions division at 8.8% is above the stretching
three-year profit growth threshold we set at the start of
the period.
• Total remuneration outcomes: these are above ‘target’
but below ‘maximum’ policy levels. The Committee believes
these outcomes are consistent with the performance achieved
in a demanding year and are appropriate in the context of the
overall business financial and strategic performance,
and reflects the positive experience of stakeholders in the
business, including our employees, customers, suppliers,
and the communities in which we operate.
CONCLUDING REMARKS
The Committee is satisfied that, at the time of writing, our
Policy will continue to provide for a strong alignment between
Group performance and the remuneration of the Executive
Directors. A resolution to approve the Remuneration Report
will be proposed at the AGM on 29 July 2021.
In closing, and recognising that I will retire from the Board
after the 2021 AGM, I would like to personally thank members
of the Committee for their continued diligence, engagement
and support throughout the year. In particular, I would like
to thank Sybella Stanley who succeeds me as Committee Chair
and to wish her well in her new role. Additionally, I would like
to thank our advisors, Deloitte, and the members of the
internal team for the excellent support they have provided to
the Committee during my tenure.
Anne Minto
Remuneration Committee Chair
KEY SECTIONS OF THIS REPORT
112 At a glance
114 The Remuneration Committee
115 Remuneration Policy
116 Context for executive remuneration
118 Remuneration framework and key principles
119 Executive Director changes
119 Salary and pension
120 Annual bonus
123 Long-term incentives
127 Directors’ share interests
128 Single figure table
110 TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021 111
111
DIRECTORS’ REMUNERATION REPORT CONTINUED
REMUNERATION AT A GLANCE
Our remuneration philosophy is simple: we offer competitive packages that mean
we can recruit, develop and motivate excellent people wherever they are in the
world. By excellent, we mean people who are not only highly skilled at their jobs,
but those who believe in our purpose and will therefore help us create sustainable,
long-term, profitable growth. This philosophy applies to all our people.
WHAT ARE THE COMPONENTS OF OUR EXECUTIVES’ REMUNERATION?
SALARY
+
BENEFITS
+
PENSION
CONTRIBUTION
+
ANNUAL
BONUS
+
PERFORMANCE
SHARE PLAN
=
TOTAL
REMUNERATION
FIXED PAY
PERFORMANCE-RELATED PAY
Shareholding requirements: CEO 4 x salary; CFO 3 x salary
HOW DID WE DETERMINE PERFORMANCE-RELATED PAY IN 2021?
Annual bonus metrics
Rewards achievement of annual performance objectives:
Performance share plan awards vesting in 2021
Rewards achievement of long-term strategic objectives:
ANNUAL
BONUS
40% Group adjusted
operating profit
20% Food & Beverage
Solutions net sales
20% Group adjusted
operating cash flow
20% Strategic/non-financial
objectives, including
environmental and
sustainability goals
PERFORMANCE
SHARE PLAN
50% Group adjusted ROCE
25% Food & Beverage Solutions
adjusted operating profit growth
25% Group adjusted profit
before tax growth
• Target bonus is 75% of salary; Maximum is 150%
• Maximum cash bonus is 100% of salary
• Any award over 100% is paid in shares, deferred for two years,
• Maximum award is 300% of salary
• Only 15% of the award vests at ‘threshold’
• A five-year timeframe applies: three-year performance period
subject to clawback
plus a two-year post-vesting holding period
HOW DID TATE & LYLE PERFORM IN 2021?
Group adjusted
profit before tax
Group adjusted free
cash flow
Food & Beverage
Solutions revenue
Food & Beverage
Solutions volume
+6%
£335m
+£3m
£250m
+6%
£970m
+3%
Group adjusted
diluted earnings per
share (EPS)
Group return on
capital employed
(ROCE)
+12%
61.2p
-30bps
17.2%
1 The adjusted results for the year ended 31 March 2021 have been adjusted to exclude exceptional items, amortisation of acquired intangible assets and the tax on those adjustments.
A reconciliation of statutory and adjusted information is included in Note 3 to the Financial Information. Growth percentages are in constant currency.
112 TATE & LYLE PLC ANNUAL REPORT 2021
GOVERNANCE
HOW DID ACTUAL PERFORMANCE COMPARE TO THE PERFORMANCE-RELATED PAY TARGETS?
Annual bonus
Metrics
Actual
THRESHOLD
TARGET
STRETCH
Group adjusted profit (£m) (40%)
298
307
321
327
Food & Beverage Solutions net sales ($m) (20%)
1,391
1,423
1,425
1,453
Group adjusted operating cash flow (£m) (20%)
266
Strategic objectives (20%)
Overall outcome annual bonus (% of max)
281
50%
50%
296
368
100%
100%
90%
100%
Performance share plan awards made in
2018 vesting in 2021
Actual
Metrics
THRESHOLD
TARGET
STRETCH
Group adjusted profit before tax growth (25%)
4.4%
5%
Food & Beverage Solutions adjusted operating profit
growth (25%)
Adjusted Group ROCE from continuing operations (50%)
Overall outcome for performance share plan (% of max)
8.8%
8%
11%
15%
10%
13%
15%
17.2%
57.3%
100%
OUTCOME
(% OF MAX)
100%
50%
100%
100%
90%
OUTCOME
(% OF MAX)
0%
29%
100%
57.3%
REMUNERATION POLICY OUTCOMES VS SCENARIOS FOR THE YEAR ENDED 31 MARCH 2021
Base and Benefits
Annual Bonus
Performance Share Plan
Chief Executive – Nick Hampton
Chief Financial Officer – Imran Nawaz
s
0
0
0
£
n
o
i
t
a
r
e
n
u
m
e
r
f
o
n
o
i
t
i
s
o
p
m
o
C
4,000
3,000
2,000
1,000
0
£815
100%
Below
threshold
£3,808
53%
£3,246
47%
26%
28%
21%
25%
£2,311
43%
22%
35%
Target
Stretch
FY21
actual
s
0
0
0
£
n
o
i
t
a
r
e
n
u
m
e
r
f
o
n
o
i
t
i
s
o
p
m
o
C
4,000
3,000
2,000
1,000
0
£2,692
53%
26%
21%
£1,635
43%
22%
35%
Target
Stretch
£577
100%
FY21
actual
£577
100%
Below
threshold
SUSTAINABILITY PERFORMANCE IN 2020
NO CHANGES ARE PROPOSED FOR THE YEAR AHEAD
Greenhouse
gas emissions
Scope 1 and 2*
7%
Using waste
beneficially*
Using less water*
2020 Policy reflected changes to:
• Post-employment shareholding requirements and clawback
provisions
69%
1%
• Structural reductions in bonus opportunity
• Alignment of pension (and other benefits) with workforce
reduction vs 2019
vs 61% in 2019
reduction vs 2019
See page 29 for more detail and how performance links to our 2030 targets
* Sustainability performance is measured by calendar year.
The current Policy will apply without change in the year ahead
• The Committee believes that our Policy continues to provide
an effective overall framework that is aligned with long-term
success and returns to shareholders
TATE & LYLE PLC ANNUAL REPORT 2021
113
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION
PREPARATION OF THIS REPORT
This Report has been prepared in accordance with the requirements of the Companies Act 2006 (the Act) and Schedule 8 to the
Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, the Listing Rules of the UK Listing
Authority and the UK Corporate Governance Code. Ernst & Young LLP have audited such content as required by the Act
(the information marked as ‘(audited)’).
RESOLUTION TO APPROVE THE ANNUAL REPORT ON REMUNERATION AT THE 2021 AGM
A resolution to approve this Annual Report on Remuneration will be proposed at the AGM on 29 July 2021.
THE REMUNERATION COMMITTEE
COMMITTEE MEMBERSHIP AND MEETINGS DURING THE YEAR
The Remuneration Committee comprised the following independent non-executive directors during the year: Anne Minto (Chair),
Lars Frederiksen, Warren Tucker and Sybella Stanley. The Company Secretary serves as secretary to the Committee.
Membership and attendance during the year are set out on page 91.
The Chair of the Board; the Chief Executive; the Chief Human Resources Officer; and the VP, Global Compensation and Benefits
may be invited to attend meetings to assist the Committee, although none is present or involved when his or her own
remuneration is discussed.
The Committee met four times during the year, and twice after the end of the financial year and before the signing of this Annual
Report. The Committee’s external advisor attends each meeting to provide independent advice, and also provides regular updates
to the Committee on relevant corporate governance and market-related developments to ensure that the Committee’s decisions
take Group strategy and the needs of the business into account, while reflecting investor and governance expectations.
MAIN RESPONSIBILITIES OF THE REMUNERATION COMMITTEE
The Committee has a formal calendar of items for consideration. The main responsibilities of the Committee include:
• Assessing the appropriateness of executive remuneration
in the context of the Group’s strategy and priorities as
well as overall competitiveness, informed by data from
independent, external sources
• Setting the detailed remuneration of the Executive
Directors, designated members of senior management,
and the Chair of the Board (in consultation with the Chief
Executive), including: base salary or fees, annual bonus,
long-term incentives, benefits, and contractual terms
• Setting performance targets for awards made to senior
executives under the annual bonus plan and the long-term
incentive plan, and reviewing performance outcomes
• Reviewing the broader operation of the annual bonus
and Performance Share Plans, including participation
and overall share award levels
• Reviewing workforce remuneration policies and
engagement in accordance with the UK Corporate
Governance Code
• Reviewing its own effectiveness each year.
The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website, www.tateandlyle.com.
COMMITTEE EFFECTIVENESS
The Committee Chair carried out an externally facilitated review of its effectiveness and sought feedback from the Committee
members, certain members of senior management and the external advisor. The output was discussed by the Committee.
This concluded that the Committee continued to operate effectively throughout the year and confirmed the intended areas of focus
for the year ahead.
COMMITTEE ADVISOR
The Committee appointed Deloitte LLP to act as external advisor following a review and competitive tender process in 2012, with
a change in lead advisor in 2019. As part of its annual processes, the Committee considered and confirmed that advice received
during the year from Deloitte LLP was objective and independent. Deloitte LLP is a signatory to the Remuneration Consultants’
Code of Conduct; this gives the Committee additional confidence that the advice received is objective and independent of conflicts
of interest. Fees charged by Deloitte LLP for the provision of remuneration advice to the Committee amounted to £26,250 for the
year ended 31 March 2021, with fees charged on a time incurred basis. During the year ended 31 March 2021, Deloitte LLP also
provided unrelated services to the rest of the Group in respect of corporate finance, consulting, tax and compliance.
114 TATE & LYLE PLC ANNUAL REPORT 2021
114 TATE & LYLE PLC ANNUAL REPORT 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
ANNUAL REPORT ON REMUNERATION
PREPARATION OF THIS REPORT
This Report has been prepared in accordance with the requirements of the Companies Act 2006 (the Act) and Schedule 8 to the
Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, the Listing Rules of the UK Listing
Authority and the UK Corporate Governance Code. Ernst & Young LLP have audited such content as required by the Act
(the information marked as ‘(audited)’).
RESOLUTION TO APPROVE THE ANNUAL REPORT ON REMUNERATION AT THE 2021 AGM
A resolution to approve this Annual Report on Remuneration will be proposed at the AGM on 29 July 2021.
THE REMUNERATION COMMITTEE
COMMITTEE MEMBERSHIP AND MEETINGS DURING THE YEAR
The Remuneration Committee comprised the following independent non-executive directors during the year: Anne Minto (Chair),
Lars Frederiksen, Warren Tucker and Sybella Stanley. The Company Secretary serves as secretary to the Committee.
Membership and attendance during the year are set out on page 91.
The Chair of the Board; the Chief Executive; the Chief Human Resources Officer; and the VP, Global Compensation and Benefits
may be invited to attend meetings to assist the Committee, although none is present or involved when his or her own
remuneration is discussed.
The Committee met four times during the year, and twice after the end of the financial year and before the signing of this Annual
Report. The Committee’s external advisor attends each meeting to provide independent advice, and also provides regular updates
to the Committee on relevant corporate governance and market-related developments to ensure that the Committee’s decisions
take Group strategy and the needs of the business into account, while reflecting investor and governance expectations.
MAIN RESPONSIBILITIES OF THE REMUNERATION COMMITTEE
The Committee has a formal calendar of items for consideration. The main responsibilities of the Committee include:
• Assessing the appropriateness of executive remuneration
• Setting performance targets for awards made to senior
in the context of the Group’s strategy and priorities as
executives under the annual bonus plan and the long-term
well as overall competitiveness, informed by data from
incentive plan, and reviewing performance outcomes
independent, external sources
• Setting the detailed remuneration of the Executive
• Reviewing the broader operation of the annual bonus
and Performance Share Plans, including participation
Directors, designated members of senior management,
and overall share award levels
and the Chair of the Board (in consultation with the Chief
• Reviewing workforce remuneration policies and
Executive), including: base salary or fees, annual bonus,
engagement in accordance with the UK Corporate
long-term incentives, benefits, and contractual terms
Governance Code
• Reviewing its own effectiveness each year.
The Committee’s terms of reference, which are reviewed annually, are available on the Company’s website, www.tateandlyle.com.
COMMITTEE EFFECTIVENESS
The Committee Chair carried out an externally facilitated review of its effectiveness and sought feedback from the Committee
members, certain members of senior management and the external advisor. The output was discussed by the Committee.
This concluded that the Committee continued to operate effectively throughout the year and confirmed the intended areas of focus
for the year ahead.
COMMITTEE ADVISOR
The Committee appointed Deloitte LLP to act as external advisor following a review and competitive tender process in 2012, with
a change in lead advisor in 2019. As part of its annual processes, the Committee considered and confirmed that advice received
during the year from Deloitte LLP was objective and independent. Deloitte LLP is a signatory to the Remuneration Consultants’
Code of Conduct; this gives the Committee additional confidence that the advice received is objective and independent of conflicts
of interest. Fees charged by Deloitte LLP for the provision of remuneration advice to the Committee amounted to £26,250 for the
year ended 31 March 2021, with fees charged on a time incurred basis. During the year ended 31 March 2021, Deloitte LLP also
provided unrelated services to the rest of the Group in respect of corporate finance, consulting, tax and compliance.
REMUNERATION POLICY
SUMMARY OF THE DIRECTORS’ REMUNERATION POLICY
Executive Directors’ remuneration consists of base salary, annual bonus, long-term incentives/share awards, and retirement
and other benefits as summarised in the ‘at a glance’ section on pages 112 and 113. Each component has a clear purpose, and the
variable elements are driven by achievement against relevant financial and non-financial performance indicators which have a
clear link to Company strategy and purpose. A strong alignment with shareholders’ interests is maintained through a weighting of
the package towards performance-based reward as well as significant personal shareholding requirements imposed on each
Executive Director. Safety and broader corporate responsibility matters are specific factors that the Committee may factor into
decisions on pay and annual incentive plan outcomes. Malus and claw back provisions apply to incentive awards following release.
Non-executive directors receive fees, relating to their Board and Committee responsibilities, and do not receive additional
benefits or participate in incentive arrangements.
The Directors’ Remuneration Policy (Policy) is published on pages 115 to 120 of our Annual Report 2020, and is available on the
Company’s website (www.tateandlyle.com/investors/annual-reports). The Policy was formally approved by shareholders at the
AGM on 23 July 2020 (with 97% of votes cast to support the resolution).
The Committee retains discretion on specific aspects of Policy and implementation, as described in the Policy, along with an
overriding discretion to determine bonus outcomes and judge the level at which share awards vest, to ensure that payments are
consistent with the underlying financial health and performance of the business, within the maximum opportunity stated in the
policy tables.
The Committee may make minor changes to the Policy without seeking shareholder approval, for example, to benefit the
administration arrangements, or to take account of changes in legislation. Any such changes would be disclosed in the relevant
Annual Report.
SERVICE CONTRACTS
The Group’s policy regarding Executive Directors’ service contracts and appointment terms is to take account of market practice,
and to ensure that provisions in relation to notice periods or termination payments are not excessive, as well as to ensure that
contracts provide appropriate protection for the Group, for example, in relation to restrictions on competition, solicitation of
customers or employees, and the protection of intellectual property. Executive Directors are employed under service contracts
that provide for six months’ notice from the executive and 12 months’ notice from the Company.
The Chair and non-executive directors have letters of appointment and do not have service contracts or notice periods. Under the
terms of their appointment, they are usually expected to serve on the Board for between three and nine years, subject to their re-
election by shareholders. The Chair and non-executive directors receive a fee for their services, and do not participate in
the Group’s incentive or pension schemes, do not receive any other benefits, and have no right to compensation if their
appointment is terminated.
Service contracts for Executive Directors and letters of appointment for the Chair and non-executive directors are available
for inspection at the Company’s registered office.
EXECUTIVE DIRECTORS’ EXTERNAL APPOINTMENTS
The Board believes that the Group can benefit from Executive Directors holding external non-executive directorships. Such
appointments are subject to approval by the Board and are normally restricted to one position for each Executive Director.
Fees may be retained by the Executive Director concerned.
STATEMENT OF SHAREHOLDER VOTING
The Remuneration Policy was approved by shareholders at the AGM on 23 July 2020. The last Annual Report on Remuneration
was approved by shareholders at the AGM on 23 July 2020. The following voting outcomes were disclosed after the relevant AGM:
RESOLUTION
Directors’ Remuneration Policy – 23 July 20202
Annual Report on Remuneration – 23 July 20202
TOTAL FOR
(NUMBER OF
VOTES)
333 350 795
339 436 069
TOTAL AGAINST
(NUMBER OF
VOTES)
% OF VOTE
97.24
99.01
9 474 353
3 400 066
% OF VOTE
2.76
0.99
VOTES
1
WITHHELD
(NUMBER OF
VOTES)
1 515 345
1 504 358
1 Votes withheld are not counted in the calculation of the proportion of votes for or against a resolution.
2 On 23 July 2020, there were 468,417,247 ordinary shares in issue and eligible to vote.
IMPLEMENTATION OF THE REMUNERATION POLICY IN THE FINANCIAL YEAR ENDING 31 MARCH 2022
As a Committee, we believe that our Policy continues to provide an effective overall framework that is aligned with long-
term success and returns to shareholders. No changes have been made to the Policy or its operation, and we intend to operate
within this Policy in the year ahead.
114 TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021 115
115
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
CONTEXT FOR EXECUTIVE REMUNERATION
WE OPERATE IN AN INTERNATIONAL CONTEXT
Although we are UK-listed and headquartered in London, UK, only c.1% of our revenue1 is made to the UK and only c.10% of
our global workforce are located in the UK. Accordingly, it is important that our remuneration arrangements are and remain
competitive in that international context.
1 Geographic sales (from continuing operations) as per Note 5.
TOTAL SHAREHOLDER RETURN AND CHIEF EXECUTIVE’S PAY
The chart illustrates cumulative total shareholder return (TSR) performance of the Company in comparison with the FTSE 100
and FTSE 250 indices, as they represent a broad equity market with constituents comparable in size and complexity to the
Company. The chart shows the value of £100 invested in each Index and the Company in the 10 years from 31 March 2011.
Tate & Lyle PLC (Ordinary Shares)
FTSE 100
FTSE 250
250
200
150
100
50
31 MARCH
2011
31 MARCH
2012
31 MARCH
2013
31 MARCH
2014
31 MARCH
2015
31 MARCH
2016
31 MARCH
2017
31 MARCH
2018
31 MARCH
2019
31 MARCH
2020
31 MARCH
2021
Chief Executive’s1 total remuneration (£000s per single figure table)
Nick Hampton
Javed Ahmed
n/a
11 1982
Iain Ferguson
170
n/a
5 367
n/a
n/a
2 728
n/a
Annual bonus
(% of max)
LTI vesting
(% of max)
58%
18%
1.6%
100%
100%
67.7%
n/a
996
n/a
0%
0%
n/a
2 139
n/a
n/a
3 239
n/a
n/a
3 672
n/a
3 045
2 499
3 246
n/a
n/a
n/a
n/a
n/a
n/a
77%
80%
72%
53%
78%
90%
10.9%
50%
100%
75%
62.5%
57.3%
1 Nick Hampton has served as Chief Executive since his appointment on 1 April 2018. Javed Ahmed served as Chief Executive from his appointment on 1 October 2009 until 1 April
2018. Iain Ferguson was Chief Executive prior to 1 October 2009.
2 This figure for the year ended 31 March 2012 includes one-off compensatory appointment awards.
COMPARISON OF MOVEMENT IN DIRECTOR AND BROADER EMPLOYEE REMUNERATION
The table below shows the percentage change in remuneration of Directors1 and the broader employee population
DR GERRY
MURPHY
NICK
HAMPTON
IMRAN
NAWAZ
VIVID
SEHGA L2
JOHN
CHEUNG2
Salary/fees
Benefits3
Bonus3
0%
n/a
n/a
0%
0%
0%
-88%
15%
-100%
n/a
n/a
n/a
n/a
n/a
n/a
PAUL
FORMAN
5%4
n/a
n/a
LARS
FREDERIKSEN
ANNE
MINTO
KIMBERLY
NELSON2
DR AJAI
PURI
SYBELLA
STANLEY
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
WARREN
TUCKER
8%4
n/a
n/a
AVERAGE
EMPLOYEE
0-3%5
-8%6
18%
1 Figures for Directors are consistent with the values shown in the Single Figure table (see page 128 for explanatory notes).
2 Vivid Sehgal and John Cheung joined the Board during the year, so there is no prior year comparison. Kimberly Nelson joined in the prior year and there is no change in annual fee.
3 The Chair and non-executive directors do not receive benefits nor participate in bonus arrangements.
4 Fee increases for Paul Forman and Warren Tucker were due to changes in Board responsibilities.
5 As described in last year’s report, salary increases (typically 3%) were awarded to employees in our manufacturing facilities, effective April 2020, while discretionary salary increases
for the broader management population were limited. The salary review process has run as normal this year, with average employee salaries increasing by 3% from 1 April 2021.
6 No changes to benefits policies were made in the year. The reduction in the total value reflects headcount changes and individual employee benefit elections (for example reduction
in the take up of certain benefits) which has reduced the overall cost of provision year on year.
RELATIVE IMPORTANCE OF SPEND ON PAY
YEAR ENDED
31 MARCH 2021
YEAR ENDED
31 MARCH 2020
% CHANGE
Remuneration paid to or receivable by employees of the Group
(continuing operations)
Distributions to shareholders (by way of dividend and purchase of ordinary shares)
£347m
£137m
£353m
£150m
-1.7%
-8.7%
The year-on-year variance in employee remuneration is attributable to factors including foreign exchange rate movements
(reflecting our significant US employee base) as well as variable pay arrangements driven by Group financial performance.
The year-on-year change in ‘distributions to shareholders’ reflects dividend payments at the same level as the prior year.
The prior year figure additionally reflects the purchase of shares to satisfy share incentive awards. See Notes 13 and 22 for
further information.
116 TATE & LYLE PLC ANNUAL REPORT 2021
116 TATE & LYLE PLC ANNUAL REPORT 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
CONTEXT FOR EXECUTIVE REMUNERATION
WE OPERATE IN AN INTERNATIONAL CONTEXT
competitive in that international context.
1 Geographic sales (from continuing operations) as per Note 5.
Although we are UK-listed and headquartered in London, UK, only c.1% of our revenue1 is made to the UK and only c.10% of
our global workforce are located in the UK. Accordingly, it is important that our remuneration arrangements are and remain
TOTAL SHAREHOLDER RETURN AND CHIEF EXECUTIVE’S PAY
The chart illustrates cumulative total shareholder return (TSR) performance of the Company in comparison with the FTSE 100
and FTSE 250 indices, as they represent a broad equity market with constituents comparable in size and complexity to the
Company. The chart shows the value of £100 invested in each Index and the Company in the 10 years from 31 March 2011.
n/a
996
n/a
0%
0%
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
31 MARCH
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Chief Executive’s1 total remuneration (£000s per single figure table)
Nick Hampton
n/a
Javed Ahmed
11 1982
Iain Ferguson
170
n/a
5 367
n/a
n/a
2 728
n/a
n/a
2 139
n/a
n/a
3 239
n/a
n/a
3 672
n/a
3 045
2 499
3 246
n/a
n/a
n/a
n/a
n/a
n/a
Annual bonus
LTI vesting
(% of max)
(% of max)
58%
18%
1.6%
77%
80%
72%
53%
78%
90%
100%
100%
67.7%
10.9%
50%
100%
75%
62.5%
57.3%
1 Nick Hampton has served as Chief Executive since his appointment on 1 April 2018. Javed Ahmed served as Chief Executive from his appointment on 1 October 2009 until 1 April
2018. Iain Ferguson was Chief Executive prior to 1 October 2009.
2 This figure for the year ended 31 March 2012 includes one-off compensatory appointment awards.
COMPARISON OF MOVEMENT IN DIRECTOR AND BROADER EMPLOYEE REMUNERATION
The table below shows the percentage change in remuneration of Directors1 and the broader employee population
DR GERRY
NICK
MURPHY
HAMPTON
IMRAN
NAWAZ
VIVID
JOHN
PAUL
LARS
SEHGA L2
CHEUNG2
FORMAN
FREDERIKSEN
ANNE
MINTO
KIMBERLY
DR AJAI
NELSON2
PURI
SYBELLA
STANLEY
WARREN
TUCKER
AVERAGE
EMPLOYEE
Salary/fees
Benefits3
Bonus3
0%
n/a
n/a
0%
0%
0%
-88%
15%
-100%
n/a
n/a
n/a
n/a
n/a
n/a
5%4
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
0%
n/a
n/a
8%4
n/a
n/a
0-3%5
-8%6
18%
1 Figures for Directors are consistent with the values shown in the Single Figure table (see page 128 for explanatory notes).
2 Vivid Sehgal and John Cheung joined the Board during the year, so there is no prior year comparison. Kimberly Nelson joined in the prior year and there is no change in annual fee.
3 The Chair and non-executive directors do not receive benefits nor participate in bonus arrangements.
4 Fee increases for Paul Forman and Warren Tucker were due to changes in Board responsibilities.
5 As described in last year’s report, salary increases (typically 3%) were awarded to employees in our manufacturing facilities, effective April 2020, while discretionary salary increases
for the broader management population were limited. The salary review process has run as normal this year, with average employee salaries increasing by 3% from 1 April 2021.
6 No changes to benefits policies were made in the year. The reduction in the total value reflects headcount changes and individual employee benefit elections (for example reduction
in the take up of certain benefits) which has reduced the overall cost of provision year on year.
RELATIVE IMPORTANCE OF SPEND ON PAY
YEAR ENDED
31 MARCH 2021
YEAR ENDED
31 MARCH 2020
% CHANGE
Remuneration paid to or receivable by employees of the Group
(continuing operations)
Distributions to shareholders (by way of dividend and purchase of ordinary shares)
£347m
£137m
£353m
£150m
-1.7%
-8.7%
The year-on-year variance in employee remuneration is attributable to factors including foreign exchange rate movements
(reflecting our significant US employee base) as well as variable pay arrangements driven by Group financial performance.
The year-on-year change in ‘distributions to shareholders’ reflects dividend payments at the same level as the prior year.
The prior year figure additionally reflects the purchase of shares to satisfy share incentive awards. See Notes 13 and 22 for
further information.
116 TATE & LYLE PLC ANNUAL REPORT 2021
GENDER PAY RATIO
Our two employing businesses in the UK each employ fewer than the 250-employee threshold for reporting gender pay
statistics. Therefore, we elect to report voluntarily. The Committee supports gender pay reporting and the actions taken in
the business to drive gender balance, supporting a culture of inclusion which is representative of our communities. We are
committed to providing opportunities based on capability and talent, irrespective of gender, ethnicity, or culture. See page 53
for more information.
CEO PAY RATIO
Key principles of our people strategy are to provide competitive remuneration for each role in a way that enables the Group
to recruit, retain and motivate high-calibre individuals so that we may deliver consistently strong operational performance and
financial results; and to provide opportunities to employees for career and salary progression over time, reflecting each
individual’s contribution and capabilities.
Reflecting our commitment to high standards of governance and transparency, we report on the ratio of CEO pay to UK employee
pay. Data representing employees at the ‘median’ and ‘upper’ and ‘lower’ quartiles are as follows:
CEO PAY RATIO VS UK EMPLOYEES
YEAR
2021 – pay ratio (total compensation)
2021 – Representative employee salary
2021 – Representative employee total compensation
2020 – pay ratio (total compensation)
2019 – pay ratio (total compensation)
LOWER
QUARTILE
71x
£39,250
£45,921
55x
74x
MEDIAN
37x
UPPER
QUARTILE
21x
£69,021
£110,000
£88,780
£154,671
27x
39x
13x
20x
In the table above, total compensation has been calculated for all UK employees individually as at 31 March 2021 in a consistent
manner for comparison with the CEO ‘single figure’ total compensation figure in the table on page 128, adjusted only to provide
a consistent comparison of employee data on a full-time equivalent basis. (This approach is known as ‘Method A’ in the reporting
regulations and was selected because it provides greater consistency in comparison).
The Committee notes that the median pay ratio figure of 37x has increased year on year but remains below the 2019 figure of 39x.
Although the median employee salary has increased to a greater extent than CEO salary over the period, the overall ratio is driven
primarily by performance related (incentive) outcomes, the value of which is greater for Executive Directors than employees.
The Committee notes that the ‘median’ employee is not a participant in the long-term performance share plan. As such, the ratio
remains sensitive to financial performance and consequently to incentive plan outcomes and share price performance (which may
lead to greater variability in the CEO pay figure as compared with the broader employee group) over time.
CONSIDERATION OF SHAREHOLDER VIEWS
The Chair of the Remuneration Committee engages with our major institutional shareholders each year specifically on
remuneration topics, alongside the Board’s shareholder engagement programme.
Detailed consultation was undertaken in 2018-2019 in conjunction with changes to the operation of our incentive plans (and
reduction in overall incentive opportunity), and ahead of the renewal of our Remuneration Policy in 2020 – which received
overwhelming support from our shareholders.
The Committee also receives regular updates on investors’ views and corporate governance matters. These lines of
communication ensure that emerging best practice principles are factored into the Committee’s decision-making during the year.
STATEMENT OF CONSIDERATION OF EMPLOYMENT CONDITIONS IN THE GROUP
The principles on which we base remuneration decisions for executives (as described on page 118) are broadly consistent with
those on which we base remuneration decisions for all employees. In particular, the Committee takes into account the general pay
and employment conditions of other employees of the Group when making decisions on Executive Directors’ remuneration. This
includes considering the levels of base salary increase for employees below executive level, and ensuring that the same principles
apply in setting performance targets for executives’ incentives as for other relevant employees of the Group. The Committee also
reviews information on bonus payments and share awards made to the broader management of the Group when determining
awards and outcomes at Executive Director level.
The Committee considers workforce remuneration matters in greater detail at the November meeting each year, and has taken
steps to engage with employees on the matters covered by the Code.
TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021 117
117
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
REMUNERATION FRAMEWORK AND KEY PRINCIPLES
The Group’s remuneration strategy and principles apply consistently to employees, managers and executives.
Our remuneration philosophy is simple: we offer competitive packages that mean we can recruit, develop and motivate
excellent people wherever they are in the world. By excellent we mean people who are not only highly skilled at their jobs,
but those who believe in our purpose and will therefore help us create sustainable, long-term, profitable growth.
• Our approach is designed to be equitable, transparent and globally
consistent, recognising that we recruit talented individuals and
operate in an international market
• Base pay and benefits are referenced to the comparative local
market, taking account of company size and operations
• Assessments of performance and potential provide meaningful
opportunities for career and salary progression, based on an
individual’s skills and contribution over time
• Individuals in key roles that can drive annual and longer-term
performance may be selected to participate in our sales incentive
plan, or the annual bonus plan, and/or the Performance Share Plan,
to encourage the achievement of genuinely stretching short-term
and long-term objectives
• All aspects of remuneration are designed to encourage a focus on
long-term, sustained performance and risk management.
Outcomes must be achieved in a way that is consistent with the
Group’s values and Code of Ethics, and that foster sustainable,
profitable growth
• Alignment with shareholders’ long-term interests is carefully
preserved by linking senior executive pay to performance; effective
governance around remuneration decisions; setting targets that
challenge management to drive high performance; the adoption of
shareholding guidelines at senior executive levels; and appropriate
malus and claw back provisions.
OVERVIEW OF EXECUTIVE DIRECTOR REMUNERATION FRAMEWORK FOR THE YEAR ENDED 31 MARCH 2021 AND FOR THE YEAR AHEAD
The table below summarises the operation of our current remuneration arrangements. We received strong shareholder support
for our Directors’ Remuneration Policy at the 2020 AGM. A number of changes to our incentive programmes were adopted in 2019,
following consultation with shareholders. These changes, along with updates to our Executive Director pension benefits and post-
employment shareholding requirements, were adopted into the Remuneration Policy approved at the 2020 AGM.
BASE SALARY AND EMPLOYMENT BENEFITS
• Fixed compensation
Market competitive salary and benefits to attract the right calibre of executives:
• Benefits include health insurance, car benefit and defined contribution retirement benefits
• Executive Director retirement benefit levels have reduced to align with the rate available to the UK workforce
ANNUAL BONUS
• 40% Group adjusted
operating profit
• 20% Food & Beverage
Solutions1 net sales
• 20% Group adjusted
operating cash flow
• 20% Strategic objectives
Rewards achievement against annual performance objectives:
• Target bonus is 75% of salary; maximum cash bonus is 100% of salary
• Maximum opportunity 150% of salary
• Any award over 100% is paid in shares, deferred for two years, subject to claw back
• 80% of the bonus is calculated by reference to financial performance conditions
• 20% of the bonus is linked to strategic objectives to create additional value over time
No changes are proposed for the year ahead
PERFORMANCE SHARE PLAN
• 40% Group adjusted EPS
• 20% Food & Beverage
Solutions1 volume
• 40% Group adjusted ROCE
Supports the Group’s strategy to create shareholder value by incentivising sustained profit growth
and capital efficiency, growing the Food & Beverage Solutions division, and to motivate and retain
senior talent:
• Maximum award is 300% of salary; 15% of the award vests at ‘threshold’
• Awards subject to a three-year performance period plus a two-year post-vesting holding period – five years
in total.
No changes are proposed for the year ahead
SHAREHOLDING REQUIREMENTS
• Chief Executive –
4 times salary
• Chief Financial Officer –
3 times salary
Since the 2020 Policy renewal, a post-employment shareholding requirement also applies: for a period of
two years following cessation, an Executive Director will be required to maintain a shareholding in
keeping with the guideline prevailing at the time of their departure, or their actual holding on departure
(if lower).
MALUS AND CLAW BACK PROVISIONS
Apply for two years after a bonus award or vesting of PSP awards
Key: Number of years: Performance period Deferral/holding period Ongoing requirements
1 Food & Beverage Solutions metrics relate to the reportable segment.
118 TATE & LYLE PLC ANNUAL REPORT 2021
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DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
REMUNERATION FRAMEWORK AND KEY PRINCIPLES
EXECUTIVE DIRECTOR CHANGES
The Group’s remuneration strategy and principles apply consistently to employees, managers and executives.
Our remuneration philosophy is simple: we offer competitive packages that mean we can recruit, develop and motivate
excellent people wherever they are in the world. By excellent we mean people who are not only highly skilled at their jobs,
but those who believe in our purpose and will therefore help us create sustainable, long-term, profitable growth.
• Our approach is designed to be equitable, transparent and globally
consistent, recognising that we recruit talented individuals and
operate in an international market
• Base pay and benefits are referenced to the comparative local
market, taking account of company size and operations
• Assessments of performance and potential provide meaningful
opportunities for career and salary progression, based on an
individual’s skills and contribution over time
• Individuals in key roles that can drive annual and longer-term
performance may be selected to participate in our sales incentive
plan, or the annual bonus plan, and/or the Performance Share Plan,
to encourage the achievement of genuinely stretching short-term
and long-term objectives
• All aspects of remuneration are designed to encourage a focus on
long-term, sustained performance and risk management.
Outcomes must be achieved in a way that is consistent with the
Group’s values and Code of Ethics, and that foster sustainable,
profitable growth
• Alignment with shareholders’ long-term interests is carefully
preserved by linking senior executive pay to performance; effective
governance around remuneration decisions; setting targets that
challenge management to drive high performance; the adoption of
shareholding guidelines at senior executive levels; and appropriate
malus and claw back provisions.
OVERVIEW OF EXECUTIVE DIRECTOR REMUNERATION FRAMEWORK FOR THE YEAR ENDED 31 MARCH 2021 AND FOR THE YEAR AHEAD
The table below summarises the operation of our current remuneration arrangements. We received strong shareholder support
for our Directors’ Remuneration Policy at the 2020 AGM. A number of changes to our incentive programmes were adopted in 2019,
following consultation with shareholders. These changes, along with updates to our Executive Director pension benefits and post-
employment shareholding requirements, were adopted into the Remuneration Policy approved at the 2020 AGM.
BASE SALARY AND EMPLOYMENT BENEFITS
• Fixed compensation
Market competitive salary and benefits to attract the right calibre of executives:
• Benefits include health insurance, car benefit and defined contribution retirement benefits
• Executive Director retirement benefit levels have reduced to align with the rate available to the UK workforce
ANNUAL BONUS
• 40% Group adjusted
operating profit
• 20% Food & Beverage
Solutions1 net sales
• 20% Group adjusted
operating cash flow
• 20% Strategic objectives
PERFORMANCE SHARE PLAN
Rewards achievement against annual performance objectives:
• Target bonus is 75% of salary; maximum cash bonus is 100% of salary
• Maximum opportunity 150% of salary
• Any award over 100% is paid in shares, deferred for two years, subject to claw back
• 80% of the bonus is calculated by reference to financial performance conditions
• 20% of the bonus is linked to strategic objectives to create additional value over time
No changes are proposed for the year ahead
• 40% Group adjusted EPS
Supports the Group’s strategy to create shareholder value by incentivising sustained profit growth
and capital efficiency, growing the Food & Beverage Solutions division, and to motivate and retain
• 20% Food & Beverage
Solutions1 volume
• 40% Group adjusted ROCE
senior talent:
• Maximum award is 300% of salary; 15% of the award vests at ‘threshold’
• Awards subject to a three-year performance period plus a two-year post-vesting holding period – five years
in total.
No changes are proposed for the year ahead
SHAREHOLDING REQUIREMENTS
• Chief Executive –
4 times salary
• Chief Financial Officer –
3 times salary
(if lower).
MALUS AND CLAW BACK PROVISIONS
Since the 2020 Policy renewal, a post-employment shareholding requirement also applies: for a period of
two years following cessation, an Executive Director will be required to maintain a shareholding in
keeping with the guideline prevailing at the time of their departure, or their actual holding on departure
Apply for two years after a bonus award or vesting of PSP awards
Key: Number of years: Performance period Deferral/holding period Ongoing requirements
1 Food & Beverage Solutions metrics relate to the reportable segment.
VIVID SEHGAL – APPOINTED CHIEF FINANCIAL OFFICER
As announced on 21 January 2021, Vivid Sehgal joined the Board on 1 March 2021 as CFO Designate, and became Chief Financial
Officer on 1 April 2021. Vivid receives an annual salary of £475,000. Retirement benefits are 15% of salary, consistent with our
commitment to offer Executive Director arrangements in line with those available to the wider UK workforce.
Vivid participates in the Executive Director incentive arrangements applicable under our Policy from his commencement date,
and no other cash or share awards are required in relation to his appointment.
IMRAN NAWAZ – RESIGNED AS CHIEF FINANCIAL OFFICER
Imran Nawaz left Tate & Lyle to take up a new CFO role, stepping down from the Board on 31 March 2021, and ceasing
employment on 30 April 2021. The Committee recognises Imran’s contribution to the business during his tenure and in supporting
a managed succession. However, under the terms of his appointment, specified payments and vested awards are forfeited and
become repayable in full on cessation of employment prior to August 2021 (being the third anniversary of his appointment).
The relevant items are: relocation payments totalling £200,000 made in 2018 and 2019, and Restricted Stock Awards made on
appointment in 2018 (with a reference value of £800,000). Accordingly, a cash repayment in the amount of £644,517 has been
made, and 63,051 vested but unexercised shares under option (with an indicative value of £483,727 based on a closing price of
£7.672 per share at 31 March 2021) are forfeited and lapse unexercised.
Other unvested incentives: the PSP awards made in 2018, 2019 and 2020, deferred bonus in relation to the year ended 31 March
2020, and any bonus that would have been earned in respect of the year ended 31 March 2021, are similarly forfeited.
FIXED ELEMENTS OF DIRECTORS’ PAY
EXECUTIVE DIRECTORS’ SALARIES
The Remuneration Committee reviews Executive Director salaries at the start of each financial year.
Nick Hampton was appointed Chief Executive with effect from 1 April 2018 with an annual salary of £665,000. The Committee has
approved an increase in line with the broader workforce (being 3%) with effect from 1 April 2021, noting that no increase in salary
had been awarded since his appointment in April 2018. In the same period, pension benefits have reduced by 10% of salary.
As previously announced, Vivid Sehgal was appointed to the Board on 1 March 2021 as CFO Designate on a salary of £475,000, and
became CFO on 1 April 2021, with no change in salary.
EXECUTIVE DIRECTORS’ PENSION ENTITLEMENTS (AUDITED)
As described in last year’s report, and reflected in our 2020 Policy renewal, retirement benefits provided to Executive Director
roles in the UK are aligning with the benefits applicable to the majority of the UK workforce.
As part of this change, our Executive Directors agreed reductions to the level of their own retirement benefits from 1 April 2020
to give up contractual entitlements and reduce these so that they will be brought into line with the broader workforce within a
two-year period. This has resulted in a cumulative benefit reduction of 10% of salary for the CEO so that the retirement benefit
is 15% of salary with effect from 1 April 2021. This 15% level aligns with the rate generally available to the broader UK workforce
from 1 April 2021. In keeping with this Policy, Vivid Sehgal was appointed as CFO with a retirement benefit equivalent to 15%
of salary.
CHAIR’S AND NON-EXECUTIVE DIRECTORS’ FEES
Fees are reviewed annually, in accordance with our stated Policy, by the Committee (excluding the Chair) in respect of the Chair’s
fee, and by the Chair and the Executive Directors in respect of other non-executive directors’ fees.
At the annual review in March 2021, it was noted that no increases were awarded since 1 April 2018. However, taking into account
the general market and economic context, it was agreed that fees would not be increased at this review. Fees, based on individual
director responsibilities, remain as shown in the table below:
FEES (PER ANNUM) AS AT 1 APRIL (£)
2021
2020
% CHANGE
Basic fees
Chair
Non-executive director
Senior Independent Director
Supplemental fees
Chair of Audit Committee
Chair of Remuneration Committee
350 000
350 000
68 000
78 800
18 050
13 550
68 000
78 800
18 050
13 550
0%
0%
0%
0%
0%
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119
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS
The bonus structure described below has applied since 1 April 2019. The bonus opportunity reduced from 175% to 150% of salary
as part of that review. 80% of the bonus is linked to financial performance conditions, with 20% linked to the achievement of
specific ‘business strategic’ non-financial objectives, to capture the actions and performance necessary to create additional value
over time, including environmental and sustainability goals.
Objectives are established by the Committee at the start of the year, reflecting the Group’s corporate financial and strategic
priorities for the year ahead. Achievements against those objectives are reviewed by the Committee at the end of the year
to determine a bonus outcome.
In determining final bonus outcomes, the Committee has due regard to the shareholder and broader stakeholder experience
and the overall financial performance of the business.
OPPORTUNITY
(% OF SALARY)
FINANCIAL METRICS (80% OF TOTAL):
THRESHOLD: 20%
TARGET: 75%
MAXIMUM: 150%
GROUP ADJUSTED
OPERATING PROFIT
(40% OF TOTAL)
GROUP ADJUSTED
OPERATING CASH FLOW
(20% OF TOTAL)
+
FOOD & BEVERAGE
SOLUTIONS NET SALES
(20% OF TOTAL)
+
STRATEGIC
OBJECTIVES
(20% OF TOTAL)
+
ALIGNED TO
STRATEGIC AND
OPERATIONAL
PRIORITIES
A minimum level of profit must be achieved before a bonus can be earned for other metrics.
Awards are subject to Remuneration Committee discretion: taking into account underlying business performance; and
environmental, health and safety performance.
Note: Bonus metrics relate to adjusted metrics and targets are set and actual performance is assessed at budgeted exchange rates for comparability, consistent with our practice in
prior years. Performance may therefore differ from the corresponding metrics included in the financial statements.
To eliminate potential volatility due to the pass-through of corn price in our sales, Food & Beverage Solutions sales targets are set and actual performance assessed at constant corn
price and exchange rates, to ensure a like-for-like assessment.
Adjusted operating cash flow is adjusted free cash flow before the impact of retirement cash contributions, net interest and tax paid, and excludes movements for corn-related
derivative and margin call movements compared with those included in the budget.
DEFERRAL INTO SHARES
The bonus amount up to 100% of base salary is paid in cash. The excess above 100% of base salary is paid in the form of deferred
shares. The shares are released after two years subject to the Executive Director remaining in service with the Group and carry
the right to receive a payment in lieu of dividend between award and release.
MALUS AND CLAW BACK PROVISIONS
Both the cash and share elements are subject to malus and claw back provisions for a period of 24 months following the award.
This means that they may be recouped in whole or in part, at the discretion of the Committee, in the exceptional event that results
are found to have been misstated or if an Executive Director commits an act of gross misconduct. With effect from the 2020 Policy
renewal, ‘corporate failure’ is included within these provisions.
BONUS ARRANGEMENTS FOR THE YEAR AHEAD
This framework will be retained for the year ahead. The Board considers that bonus targets for the year ahead are commercially
sensitive because they may reveal information about the business plan that may damage our competitive advantage, and
accordingly does not disclose these on a prospective basis. However, we continue our practice of reporting targets in full,
and the level of performance actually achieved, for the year just ended.
ASSESSMENT OF BONUS FOR THE YEAR ENDED 31 MARCH 2021
As described on the following pages, the Committee has made a careful assessment of performance in determining bonus
outcomes for the year ended 31 March 2021. As described in the Chair’s statement (see page 110), the Committee was particularly
mindful of the context of the Covid-19 pandemic and has assessed overall performance reflecting on the broad stakeholder
experience through this period. Financial performance targets for the bonus were set at the start of the year in line with our
business plan, which had been developed before the global impact of the Covid-19 pandemic was known. As we entered the
year, Executive Directors and the Board established clear near-term priorities: to look after our people (and communities), to
keep our operations running and our customers served (and meet their needs for an agile response and continued innovation),
and to maintain the financial strength of the business. The Committee is pleased to report that the business has delivered against
those priorities, and considers these bonus outcomes appropriate.
120 TATE & LYLE PLC ANNUAL REPORT 2021
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DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
BUSINESS AND PERFORMANCE OVERVIEW FOR THE YEAR ENDED 31 MARCH 2021
Awards are linked to stretching financial targets set at the start of the year against key metrics linked to our strategic goals.
Bonus awards as described below are considered appropriate in the context of strong financial performance and significant
strategic progress, and the actions taken to support our purpose, and our people:
GROUP FINANCIAL HIGHLIGHTS:
• +12% increase in Food & Beverage Solutions
profit1 to £177m; +3% volume and +6% revenue
• Sucralose profit1 (9%) lower at £55m reflecting
pricing pressure and higher production costs
• +5% increase in Primary Products profit1 to
£158m with Sweeteners and Starches (13%),
and record Commodities profits
• +6% increase in Group adjusted profit before tax
• Productivity programme delivered US$37m,
ahead of expectations
• 12% increase2 in adjusted diluted earnings per
share, benefitting from lower effective tax rate
of 14.3% (2020: 17.9%)
• Return on capital employed of 17.2%, 30bps
lower reflecting investments in acquisitions
• Full-year dividend of 30.8p, up 4.1%
PURPOSE AND STRATEGY PROGRESS:
• New Products revenue +21% at £133m
• Two acquisitions completed: tapioca and stevia
LOOKING AFTER OUR PEOPLE:
• Purpose-led response to pandemic
• Strong delivery against key priorities
businesses, expanding our global customer offering
and presence in Asia
• Purpose (including sustainability) long-term targets
announced, and reporting framework published
• Sustainability targets and commitments established
linked to UN Sustainable Development Goals with
performance targets over a 10-year period to deliver
cleaner air, less water use, beneficial use of waste and
to support sustainable agriculture
• Strong environmental performance in 2020 against
these long-term targets (see pages 62-64):
• Scope 1 and 2 greenhouse gas emissions –
7% reduction
• Beneficial use of waste – increased to 69%
• Water use – reduced by 1%
established at the start of the year in the context
of Covid-19: to look after our people and
communities, keep our operations running,
and our customers served
• No employees furloughed. No government
assistance sought.
• 1.7 million meals provided to food banks
in our communities
• Expanded recognition programme with
payments made to support both operational
and home-working colleagues
• Enhanced approach to communicating with our
colleagues to improve engagement and
connection with our purpose; adopt a culture
with greater flexibility, agility and trust; and a
focus on equity, diversity and inclusion.
1 Adjusted operating profit, percentage change in constant currency.
2 Adjusted diluted earnings per share from continuing operations in constant currency.
ANNUAL BONUS FOR THE YEAR ENDED 31 MARCH 2021 (AUDITED)
The table below provides further information on each metric, the targets set at the start of the year and actual performance for
the year.
Adjusted operating cash flow is adjusted free cash flow before the impact of retirement cash contributions, net interest and tax paid, and excludes movements for corn-related
BONUS METRIC
LINK TO STRATEGY
WEIGHTING
THRESHOLD
TARGET STRETCH
TARGET RANGE
ACTUAL PERFORMANCE IN
THE YEAR ENDED
31 MARCH 2021
BONUS OUTCOME
% OF MAX
% OF
SALARY
Group adjusted
operating profit before
tax, exceptional items,
amortisation and net
retirement benefit
interest
Food & Beverage
Solutions net sales
Group adjusted
operating cash flow
Measures the underlying
profit generated by the total
business and whether
management is converting
growth into profit effectively
Captures ‘top line’ value-
based performance of the
Food & Beverage Solutions
division
Provides a focus on
managing working capital
and converting profit into
cash effectively
40%
£298m £307m £321m
£327m
100%
60%
20% $1,361m $1,425m $1,453m
US$1,423m
50%
15%
20%
£266m £281m £296m
£368m
100%
30%
Non-financial personal
and strategic
performance
Measures non-financial
performance key to achieving
corporate goals
20%
See page 123 for
details
Chief Executive
Chief Financial Officer2
Chief Financial Officer
Designate (from 1 March)3
100%
N/A
50%
30%
N/A
15%
Financial underpin
The Committee also considers the Group’s safety and overall financial performance to ensure that the results are
a true reflection of the underlying strength and performance of the Group.
Based on these performance outcomes, annual bonus awards to Executive Directors for the year ended 31 March 2021 have been
determined as follows:
Nick Hampton
Imran Nawaz2
Vivid Sehgal
Chief Executive
Chief Financial Officer (until 31 March)
Chief Financial Officer Designate (from 1 March)
% OF
MAX
90%
n/a
80%3
% OF
SALARY
135%
n/a
120%3
Any bonus up to 100% of base salary is paid in cash and any balance is paid in the form of deferred shares, as described above.
1 Bonus targets are set and actual performance is assessed at constant (budget) exchange rates, reflecting consistent practice with prior years.
2
3 Vivid Sehgal was appointed 1 March 2021 – and bonus payments as a % of salary are by reference to one month’s salary only.
Imran Nawaz will not receive any bonus in respect of the year ending 31 March 2021 as a result of cessation of employment on 30 April 2021 (see page 119).
ANNUAL BONUS
The bonus structure described below has applied since 1 April 2019. The bonus opportunity reduced from 175% to 150% of salary
as part of that review. 80% of the bonus is linked to financial performance conditions, with 20% linked to the achievement of
specific ‘business strategic’ non-financial objectives, to capture the actions and performance necessary to create additional value
over time, including environmental and sustainability goals.
Objectives are established by the Committee at the start of the year, reflecting the Group’s corporate financial and strategic
priorities for the year ahead. Achievements against those objectives are reviewed by the Committee at the end of the year
to determine a bonus outcome.
In determining final bonus outcomes, the Committee has due regard to the shareholder and broader stakeholder experience
and the overall financial performance of the business.
OPPORTUNITY
(% OF SALARY)
FINANCIAL METRICS (80% OF TOTAL):
THRESHOLD: 20%
TARGET: 75%
MAXIMUM: 150%
GROUP ADJUSTED
OPERATING PROFIT
(40% OF TOTAL)
GROUP ADJUSTED
FOOD & BEVERAGE
ALIGNED TO
+
OPERATING CASH FLOW
SOLUTIONS NET SALES
(20% OF TOTAL)
(20% OF TOTAL)
+
STRATEGIC
OBJECTIVES
(20% OF TOTAL)
+
STRATEGIC AND
OPERATIONAL
PRIORITIES
A minimum level of profit must be achieved before a bonus can be earned for other metrics.
Awards are subject to Remuneration Committee discretion: taking into account underlying business performance; and
environmental, health and safety performance.
Note: Bonus metrics relate to adjusted metrics and targets are set and actual performance is assessed at budgeted exchange rates for comparability, consistent with our practice in
prior years. Performance may therefore differ from the corresponding metrics included in the financial statements.
To eliminate potential volatility due to the pass-through of corn price in our sales, Food & Beverage Solutions sales targets are set and actual performance assessed at constant corn
price and exchange rates, to ensure a like-for-like assessment.
derivative and margin call movements compared with those included in the budget.
DEFERRAL INTO SHARES
The bonus amount up to 100% of base salary is paid in cash. The excess above 100% of base salary is paid in the form of deferred
shares. The shares are released after two years subject to the Executive Director remaining in service with the Group and carry
the right to receive a payment in lieu of dividend between award and release.
MALUS AND CLAW BACK PROVISIONS
Both the cash and share elements are subject to malus and claw back provisions for a period of 24 months following the award.
This means that they may be recouped in whole or in part, at the discretion of the Committee, in the exceptional event that results
are found to have been misstated or if an Executive Director commits an act of gross misconduct. With effect from the 2020 Policy
renewal, ‘corporate failure’ is included within these provisions.
BONUS ARRANGEMENTS FOR THE YEAR AHEAD
This framework will be retained for the year ahead. The Board considers that bonus targets for the year ahead are commercially
sensitive because they may reveal information about the business plan that may damage our competitive advantage, and
accordingly does not disclose these on a prospective basis. However, we continue our practice of reporting targets in full,
and the level of performance actually achieved, for the year just ended.
ASSESSMENT OF BONUS FOR THE YEAR ENDED 31 MARCH 2021
As described on the following pages, the Committee has made a careful assessment of performance in determining bonus
outcomes for the year ended 31 March 2021. As described in the Chair’s statement (see page 110), the Committee was particularly
mindful of the context of the Covid-19 pandemic and has assessed overall performance reflecting on the broad stakeholder
experience through this period. Financial performance targets for the bonus were set at the start of the year in line with our
business plan, which had been developed before the global impact of the Covid-19 pandemic was known. As we entered the
year, Executive Directors and the Board established clear near-term priorities: to look after our people (and communities), to
keep our operations running and our customers served (and meet their needs for an agile response and continued innovation),
and to maintain the financial strength of the business. The Committee is pleased to report that the business has delivered against
those priorities, and considers these bonus outcomes appropriate.
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TATE & LYLE PLC ANNUAL REPORT 2021 121
121
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
STRATEGIC NON-FINANCIAL OBJECTIVES
20% of each Executive Director’s bonus opportunity is linked to performance against individual business strategic measures.
Payment of this element of the bonus is subject to achievement of a minimum profit hurdle (which has been achieved for the year).
Non-financial objectives are established through a process involving the Nominations and Remuneration Committees, reflecting
corporate priorities for the year ahead and in particular the actions necessary to ‘Sharpen, Accelerate, and Simplify’ our business,
drive progress against EHS and broader purpose goals, and to develop the Group’s culture. For the year just ended, these
reflected key priorities to support our people and customers in response to the pandemic, and to drive progress against our
environmental and sustainability commitments.
Achievements against those objectives, including specific KPIs, are reviewed by the Committee at the end of the financial year,
and a bonus outcome is determined accordingly. The Committee’s assessment of the bonus outcome, and key achievements
against specific objectives are shown below. Business strategic objectives such as M&A pipeline and customer relationships
are often commercially sensitive.
The Committee’s assessment against non-financial objectives is summarised below in relation to the CEO (Nick Hampton).
CEO (NICK HAMPTON)
Sharpen the
focus on our
customers and
key categories
Simplify the
business
and deliver
productivity
improvements
Objective(s):
• Driving new ways of working to enable
effective internal and external
collaboration: Becoming the growth
partner for our customers
• Becoming the ‘go to’ company for
reformulation and sugar reduction
Key achievement(s):
• Maintained strong connection with major
customers through technology
• Developed bespoke customer webinars
in areas such as sugar reduction and
plant-based ingredients
• Accelerated launch of online tutorials,
our Sweetener and Fibre Universities,
and digital Nutrition Centre hub, including
clinical research data
• 12% increase in value of new business
pipeline
Outcome:
Objective(s):
• Simplifying the organisation
• Investing to improve operational efficiency
and purpose benefits
• Creating a culture of continuous
improvement
• Reducing costs and increasing productivity
Key achievement(s):
• Investment in new gas-fired boiler in
Decatur, Illinois, US
• Simplified organisation of customer-facing
teams
• Productivity programme delivered US$37m
supporting continued investment in
strengthening capabilities and for growth
Outcome:
Accelerate
portfolio
development:
innovation,
partnerships,
strategy
development and
M&A readiness
Objective(s):
• Drive continued innovation geographically,
enabling closer customer collaboration
• Bringing new products to market faster
• Expanding our portfolio, including through
partnerships and acquisitions
• Develop M&A pipeline and drive opportunities
to conclusion
Key achievement(s):
• New Product revenue increased by 21%
• 13 New Products launched from innovation
pipeline including high fibre and stevia solutions
• Completed acquisitions of stevia and tapioca
businesses
• 18% increase in value of innovation pipeline
Outcome:
Culture and
Governance,
including
Environmental,
Health, Safety
and Governance
(ESG) and social
purpose
Objective(s):
• Embed purpose in the organisation
• Establish and accelerate delivery against ESG
and Sustainability commitments
• Mange effectively through Covid-19 pandemic
Key achievement(s):
• CEO provided exemplary leadership through
pandemic, with clear communication and focus
on keeping our people safe
• Operations remained running through pandemic
to serve our customers
• Published set of long-term purpose targets and
commitments (including sustainability), aligned
to five of the UN Sustainable Development Goals,
and a reporting framework
• Strong environmental performance exceeded 2020
targets, including reduction in greenhouse gas
emissions and waste to landfill (see pages 62-64)
Outcome:
Bonus outcome
(Nick Hampton)
Overall outcome: 20/20
30% of salary (at maximum)
No assessment for bonus purposes has been made in relation to the CFO (Imran Nawaz) following his resignation.
The Committee considered it appropriate to award the CFO Designate a bonus based on personal objectives equivalent to an
‘at target’ level, being 15% of salary (50% of maximum for this element) applicable for the pro-rata period of the year, on account
of making an effective transition into the role and a strong initial contribution to the Group since joining on 1 March 2021.
122 TATE & LYLE PLC ANNUAL REPORT 2021
122 TATE & LYLE PLC ANNUAL REPORT 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
STRATEGIC NON-FINANCIAL OBJECTIVES
20% of each Executive Director’s bonus opportunity is linked to performance against individual business strategic measures.
Payment of this element of the bonus is subject to achievement of a minimum profit hurdle (which has been achieved for the year).
Non-financial objectives are established through a process involving the Nominations and Remuneration Committees, reflecting
corporate priorities for the year ahead and in particular the actions necessary to ‘Sharpen, Accelerate, and Simplify’ our business,
drive progress against EHS and broader purpose goals, and to develop the Group’s culture. For the year just ended, these
reflected key priorities to support our people and customers in response to the pandemic, and to drive progress against our
environmental and sustainability commitments.
Achievements against those objectives, including specific KPIs, are reviewed by the Committee at the end of the financial year,
and a bonus outcome is determined accordingly. The Committee’s assessment of the bonus outcome, and key achievements
against specific objectives are shown below. Business strategic objectives such as M&A pipeline and customer relationships
are often commercially sensitive.
The Committee’s assessment against non-financial objectives is summarised below in relation to the CEO (Nick Hampton).
CEO (NICK HAMPTON)
Sharpen the
focus on our
customers and
key categories
Objective(s):
• Driving new ways of working to enable
effective internal and external
collaboration: Becoming the growth
partner for our customers
• Becoming the ‘go to’ company for
reformulation and sugar reduction
Key achievement(s):
• Maintained strong connection with major
customers through technology
• Developed bespoke customer webinars
in areas such as sugar reduction and
plant-based ingredients
• Accelerated launch of online tutorials,
our Sweetener and Fibre Universities,
and digital Nutrition Centre hub, including
clinical research data
• 12% increase in value of new business
pipeline
Outcome:
Objective(s):
• Simplifying the organisation
• Investing to improve operational efficiency
and purpose benefits
improvement
• Reducing costs and increasing productivity
Key achievement(s):
• Investment in new gas-fired boiler in
Decatur, Illinois, US
• Simplified organisation of customer-facing
teams
• Productivity programme delivered US$37m
supporting continued investment in
strengthening capabilities and for growth
Outcome:
Accelerate
portfolio
development:
innovation,
partnerships,
strategy
development and
M&A readiness
Objective(s):
• Drive continued innovation geographically,
enabling closer customer collaboration
• Bringing new products to market faster
• Expanding our portfolio, including through
partnerships and acquisitions
• Develop M&A pipeline and drive opportunities
to conclusion
Key achievement(s):
• New Product revenue increased by 21%
• 13 New Products launched from innovation
pipeline including high fibre and stevia solutions
• Completed acquisitions of stevia and tapioca
• 18% increase in value of innovation pipeline
businesses
Outcome:
Culture and
Governance,
including
Environmental,
Health, Safety
Objective(s):
• Embed purpose in the organisation
• Establish and accelerate delivery against ESG
and Sustainability commitments
• Mange effectively through Covid-19 pandemic
and Governance
Key achievement(s):
(ESG) and social
purpose
• CEO provided exemplary leadership through
pandemic, with clear communication and focus
on keeping our people safe
• Operations remained running through pandemic
to serve our customers
• Published set of long-term purpose targets and
commitments (including sustainability), aligned
to five of the UN Sustainable Development Goals,
and a reporting framework
• Strong environmental performance exceeded 2020
targets, including reduction in greenhouse gas
emissions and waste to landfill (see pages 62-64)
Outcome:
Simplify the
business
and deliver
productivity
improvements
• Creating a culture of continuous
Bonus outcome
(Nick Hampton)
Overall outcome: 20/20
30% of salary (at maximum)
No assessment for bonus purposes has been made in relation to the CFO (Imran Nawaz) following his resignation.
The Committee considered it appropriate to award the CFO Designate a bonus based on personal objectives equivalent to an
‘at target’ level, being 15% of salary (50% of maximum for this element) applicable for the pro-rata period of the year, on account
of making an effective transition into the role and a strong initial contribution to the Group since joining on 1 March 2021.
LONG-TERM INCENTIVE – PERFORMANCE SHARE PLAN
The Performance Share Plan (PSP) provides a share-based incentive to closely align Executive Directors’ and senior executives’
interests with the strategy and with the interests of shareholders over the long term.
MAXIMUM AWARD LEVEL
Awards to Executive Directors and other senior executives have been granted at the discretion of the Committee, with flexibility
for the Committee to make awards of up to 300% of base salary where appropriate to ensure market competitiveness, while
taking into account Group performance. Individual awards made in any year are considered by the Committee on a case-by-case
basis. This overall limit has not been increased since 2010. The level of vesting if threshold conditions are met is 15% of the
total award.
PERFORMANCE CONDITIONS APPLICABLE TO AWARDS GRANTED PRIOR TO 2019
Structural changes in the business in 2015 led to a review of the performance framework to ensure continued alignment with the
Group strategy. Targets were considered carefully by the Committee, taking into account a number of reference points, including
internal and external benchmarks of performance and global market growth in the Food & Beverage Solutions (FBS) industry.
We consulted with a broad group of our largest shareholders on these arrangements, which were established in 2016.
VESTING OUTCOME FOR AWARDS MADE IN 2018
The table below summarises the assessment of actual performance against the conditions set for the award made in 2018.
METRICS FOR AWARDS
2017 AND 2018
LINK TO STRATEGY
FBS adjusted
operating profit (25%)
Reflects our focus on growing
the FBS business
Group adjusted profit
before tax (25%)
Group adjusted
ROCE (50%)
Key performance metric to
drive sustainable long-term
profitable growth
Drives efficient investment for
value-added returns from the
total business
TARGET RANGE
(THRESHOLD-STRETCH)
ACTUAL PERFORMANCE
OUTCOME FOR 2018
AWARD
COMBINED VESTING
OUTCOME FOR 2018 AWARD
8% – 13% p.a.
8.8% p.a.
three-year
compound growth
5% – 10% p.a.
three-year
compound growth
11% – 15% in the
final year of the
three-year
performance period
(above threshold)
4.4% p.a.
(below threshold)
17.2%
(above stretch)
57.3% of the 2018 award
will vest – Group ROCE
performance is above the
‘stretch’ level required
while FBS operating profit
growth performed in range,
and adjusted profit before
tax compound annual
growth of 4.4% was just
below the target range
Note: FBS metrics relate to the reportable segment. Targets are set and performance is assessed at reported exchange rates.
PERFORMANCE CONDITIONS APPLICABLE TO AWARDS GRANTED FROM 2019
As described in our 2019 Annual Report, we re-focused long-term performance metrics for PSP towards EPS growth and ROCE
performance each with a 40% weighting, so that 80% of the overall award is linked to ‘bottom line’ financial performance and
capital efficiency. Alongside these, a Food & Beverage Solutions (FBS) volume metric (with a 20% weighting) provides continued
focus on our growth ambition for the FBS business within the Group portfolio, complementing the ‘FBS sales’ metric in the annual
bonus, and incentivising above-market performance in that division.
The metrics and targets and the strategic rationale for these are summarised below. The target ranges shown below for each
metric were carefully considered by the Committee, taking into account the investment case we set out for shareholders and
our ambition for growth, as well as historic company and competitor/customer financial performance. This approach is intended
to place a clear focus on long-term strategic growth and FBS market ‘out-performance’, to drive long-term value creation.
METRICS FOR AWARDS
FROM 2019 (WEIGHTING)
RATIONALE FOR METRIC
(LINK TO INVESTMENT CASE)
TARGET RANGE
(THRESHOLD-STRETCH)
Group adjusted earnings per share
(40%)
Key performance metric to drive sustainable
5% – 10% p.a. three-year compound growth
long-term profitable growth
FBS volume growth (20%)
Lead indicator of strategy execution and FBS
2% – 6% p.a. three-year compound growth
Adjusted Group ROCE (40%)
value growth
Drives disciplined and efficient investment
for value-added returns from the total
business
13%-17% in the final year of the three-year
performance period
Note: FBS metrics relate to the reportable segment. Targets are set and performance is assessed at reported exchange rates.
122 TATE & LYLE PLC ANNUAL REPORT 2021
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TATE & LYLE PLC ANNUAL REPORT 2021 123
123
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
PERFORMANCE UNDERPIN
Before any shares are released in relation to any award, the Committee must also be satisfied that the level of vesting determined
by performance against these targets is justified by the broader underlying financial performance of the Group.
Recognising the importance of the dividend to our investors, the Committee retains a specific discretion to reduce PSP vesting if
dividends paid by the Group over the performance period do not conform with our stated dividend policy.
POST-VESTING HOLDING PERIOD
Executive Directors are required to hold shares for a two-year period after the end of the three-year performance period; the
combined total is five years. This holding period sits alongside the existing personal shareholding requirements and claw
back/malus provisions and demonstrates a strong long-term alignment with shareholder interests.
MALUS AND CLAW BACK PROVISIONS
Awards made under the PSP are subject to malus and claw back provisions for a period following the vesting date and extending
to the fifth anniversary following the date of grant. During this period, the Committee may determine that an award will lapse
wholly or in part (or may require that a participant shall repay up to 100% of the value of any award that has vested by virtue of
performance), in the event of circumstances including the following: material misstatement of financial results; misconduct which
justifies, or could justify, summary dismissal of the participant; or if information emerges which would have affected the value of
the original award that was granted to a participant, or the level at which the performance conditions were judged to have been
satisfied. For awards made following the 2020 Policy renewal, ‘corporate failure’ will be included within these provisions.
IMPACT OF CAPITAL EVENTS
In keeping with our Policy, the impact on the incentive plans arising from a merger or acquisition or other material corporate
activity is specifically considered by the Committee, and the Committee retains the authority to vary the performance targets
to ensure that these are neither easier nor more demanding than the original targets. This principle remains important as
we seek to grow the business through organic sales growth and improved organic returns, as well as value-added strategic
M&A-related activity over time. The Committee considered the pro-forma impact of the two acquisitions completed during the
year and determined that, although the ROCE targets would be marginally harder to achieve, no adjustment would be made on
this occasion.
CHANGE OF CONTROL
The Company’s share plans contain provisions relating to a change of control. Outstanding awards would normally vest
and become exercisable on a change of control, subject to the satisfaction of any performance conditions assessed at that time,
and, at the Committee’s discretion, in proportion to the time served during the performance period.
ARRANGEMENTS FOR THE YEAR AHEAD
The same performance metrics and targets are intended to apply for awards made in the year ahead and will be kept under review
ahead of the grant in any year to ensure they remain appropriately stretching.
124 TATE & LYLE PLC ANNUAL REPORT 2021
124 TATE & LYLE PLC ANNUAL REPORT 2021
PERFORMANCE UNDERPIN
Before any shares are released in relation to any award, the Committee must also be satisfied that the level of vesting determined
by performance against these targets is justified by the broader underlying financial performance of the Group.
Recognising the importance of the dividend to our investors, the Committee retains a specific discretion to reduce PSP vesting if
dividends paid by the Group over the performance period do not conform with our stated dividend policy.
POST-VESTING HOLDING PERIOD
Executive Directors are required to hold shares for a two-year period after the end of the three-year performance period; the
combined total is five years. This holding period sits alongside the existing personal shareholding requirements and claw
back/malus provisions and demonstrates a strong long-term alignment with shareholder interests.
MALUS AND CLAW BACK PROVISIONS
Awards made under the PSP are subject to malus and claw back provisions for a period following the vesting date and extending
to the fifth anniversary following the date of grant. During this period, the Committee may determine that an award will lapse
wholly or in part (or may require that a participant shall repay up to 100% of the value of any award that has vested by virtue of
performance), in the event of circumstances including the following: material misstatement of financial results; misconduct which
justifies, or could justify, summary dismissal of the participant; or if information emerges which would have affected the value of
the original award that was granted to a participant, or the level at which the performance conditions were judged to have been
satisfied. For awards made following the 2020 Policy renewal, ‘corporate failure’ will be included within these provisions.
IMPACT OF CAPITAL EVENTS
In keeping with our Policy, the impact on the incentive plans arising from a merger or acquisition or other material corporate
activity is specifically considered by the Committee, and the Committee retains the authority to vary the performance targets
to ensure that these are neither easier nor more demanding than the original targets. This principle remains important as
we seek to grow the business through organic sales growth and improved organic returns, as well as value-added strategic
M&A-related activity over time. The Committee considered the pro-forma impact of the two acquisitions completed during the
year and determined that, although the ROCE targets would be marginally harder to achieve, no adjustment would be made on
this occasion.
CHANGE OF CONTROL
The Company’s share plans contain provisions relating to a change of control. Outstanding awards would normally vest
and become exercisable on a change of control, subject to the satisfaction of any performance conditions assessed at that time,
and, at the Committee’s discretion, in proportion to the time served during the performance period.
ARRANGEMENTS FOR THE YEAR AHEAD
The same performance metrics and targets are intended to apply for awards made in the year ahead and will be kept under review
ahead of the grant in any year to ensure they remain appropriately stretching.
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
APPLICATION OF REMUNERATION POLICY FOR THE YEAR AHEAD
The charts below illustrate the value that may be delivered from each element of the package under different performance
scenarios, reflecting the structural reduction in bonus opportunity adopted in the 2020 Policy, and the pension changes applicable
for the financial year ahead. The charts also illustrate the incremental value that would be delivered under a ‘stretch’
performance scenario if the share price increased by 50% between award and release of the long-term incentive award (under
which scenario all shareholders would benefit from similar gains).
Base and Benefits
Annual Bonus
Performance Share Plan
50% Share Price Growth
Chief Executive – Nick Hampton
s
0
0
0
£
n
o
i
t
a
r
e
n
u
m
e
r
f
o
n
o
i
t
i
s
o
p
m
o
C
5,000
4,000
3,000
2,000
1,000
0
£805
100%
Below
threshold
£4,914
21%
42%
45%
£3,887
53%
26%
21%
21%
16%
£2,346
25%
44%
22%
34%
Target
Stretch
Stretch +50%
share growth
Chief Financial Officer – Vivid Sehgal
s
0
0
0
£
n
o
i
t
a
r
e
n
u
m
e
r
f
o
n
o
i
t
i
s
o
p
m
o
C
5,000
4,000
3,000
2,000
1,000
0
£2,697
53%
26%
21%
£1,628
44%
22%
34%
£3,409
21%
42%
21%
16%
Target
Stretch
Stretch +50%
share growth
£559
100%
Below
threshold
STATEMENT OF DIRECTORS’ SHARE AWARDS (AUDITED)
AWARDS MADE DURING THE YEAR ENDED 31 MARCH 2021 (AUDITED)
AWARD
TYPE OF
AWARD
DATE OF
GRANT
NUMBER OF
SHARES
FACE VALUE
OF AWARD
PERFORMANCE
CONDITIONS
PERFORMANCE
PERIOD
% OF
VESTING AT
THRESHOLD
Nick
Hampton
Performance
Share Plan1
Nil cost
option
30 September
2020
273 295
£1 994 998 20% CAGR of FBS
volume; 40% CAGR
of EPS; 40%
adjusted ROCE
Three financial years
ending 31 March 2023
plus two-year
holding period
15%
Group Bonus
Plan2
Imran
Nawaz
Performance
Share Plan1,3
Nil cost
option
Nil cost
option
30 September
2020
30 September
2020
Group Bonus
Plan2,3
Nil cost
option
30 September
2020
15 487
£113 052
None
Two-year deferral
n/a
193 156
£1 409 997 20% CAGR of FBS
volume; 40% CAGR
of EPS; 40%
adjusted ROCE
Three financial years
ending 31 March 2023
plus two-year
holding period
15%
10 946
£79 904
None
Two-year deferral
n/a
1 Under the terms of the Performance Share Plan approved by shareholders, the number of shares comprising an award in any year is calculated based on the average share price
over the last three months of the preceding financial year, being 729.98 pence per share for the 2020 award. In 2019, the Committee approved awards of 300% of salary for the
Chief Executive and 300% of salary for the Chief Financial Officer, which is within our approved Remuneration Policy. Performance conditions applicable to PSP awards made in
2019 are described on page 123.
2 Deferred bonus awards were granted under the annual bonus plan (as described on page 120). The full value of these awards has been previously disclosed for each Director in the
single figure table in last year’s Annual Report and is similarly included in the 2021 figure in the single figure table on page 128 of this Report. The share allocation was made during
the year ended 31 March 2021, and shown in the table above, based on the average share price over the last three months of the preceding financial year, being 729.98 per share
for the 2020 award. Deferred bonus awards were subject to performance conditions in the year ended 31 March 2020, and remain subject to continued employment in accordance
with the Scheme rules.
3 The awards to Imran Nawaz have been forfeited as a result of his resignation and cessation of employment on 30 April 2021.
124 TATE & LYLE PLC ANNUAL REPORT 2021
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TATE & LYLE PLC ANNUAL REPORT 2021 125
125
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
SHARE AWARDS MADE IN FINANCIAL YEARS TO 31 MARCH 2020 (AUDITED)
The table below sets out the current position of share-based awards made to Executive Directors.
AS AT
31 MARCH 2020
(NUMBER)
AWARDS
VESTED
DURING YEAR
(NUMBER)
AWARDS
LAPSED
DURING YEAR
(NUMBER)
AWARDS
EXERCISED
DURING YEAR
(NUMBER)
AS AT
31 MARCH 2021
(NUMBER)
MARKET PRICE
ON DATE
AWARDS
GRANTED
(PENCE)
MARKET PRICE
ON DATE
AWARDS
EXERCISED
(PENCE)1
VESTING DATE
217 855
136 159
81 696
136 159
–
723.72
680.40
01/06/20
Nick Hampton
Performance Share Plan2:
2017
20183
2019
Group Bonus Plan:
2018
Imran Nawaz4
Performance Share Plan2:
330 380
287 278
–
–
22 629
22 629
2018
2019
233 502
203 038
–
–
Restricted Share Award:
20185
63 051
63 051
–
–
–
–
–
–
–
–
330 380
603.85
287 278
694.45
After
31/03/21
After
31/03/22
–
–
22 629
–
603.85
680.40
01/06/20
–
(see note 4)
603.85
–
(see note 4)
694.45
–
(see note 4)
634.40
After
31/03/21
After
31/03/22
After
01/08/20
–
–
–
1 Awards are structured as nil cost options; awards were exercised with a nil exercise price.
2 The performance conditions for the PSP awards made in 2018 and 2019 are described on page 123. The three-year performance period for these awards began on the first day of the
financial year in which the award was granted. The performance conditions and vesting outcome for the 2017 award is described in the 2020 Annual Report.
3 The PSP award made in 2018 to Mr Hampton will vest at 57.3%, following the Committee’s assessment of performance conditions (as described on page 123).
4 As described on page 119, these appointment awards and unvested share incentive awards lapsed on cessation of employment on 30 April 2021, following resignation during
the year.
5 This is the second tranche of an award that was made in connection with Imran Nawaz’s appointment, to compensate him for incentives forfeited with his previous employer, as
described on appointment via RNS, and in the subsequent Directors’ Remuneration Reports. The Committee had made a determination that this tranche would vest based on
performance as at the second anniversary of appointment (being 1 August 2020). The full award has subsequently lapsed, as a result of resignation, as described on page 119.
Accordingly, the first tranche is being repaid in cash, and the shares in the second tranche shown here have lapsed unexercised.
Executive Directors may participate in the HMRC-approved Sharesave Plan, under which option awards are granted on the
same terms to all participating employees. These awards are not subject to performance conditions, and are normally exercisable
during the six-month period following the end of the relevant three- or five-year savings contract. The exercise price reflects a
20% discount to market value as permitted under HMRC rules and is applicable to all participants.
AS AT
1 APRIL 2020
(NUMBER)
OPTIONS
VESTED
DURING YEAR
(NUMBER)
OPTIONS
EXERCISED
DURING YEAR
(NUMBER)
OPTIONS
LAPSED
DURING YEAR
(NUMBER)
AS AT
31 MARCH 2021
(NUMBER)
EXERCISE
PRICE (PENCE)
EXERCISE
PERIOD
Nick Hampton
Savings-related options 2017
3 243
–
–
–
3 243
555.00
01/03/21 to
31/08/21
126 TATE & LYLE PLC ANNUAL REPORT 2021
126 TATE & LYLE PLC ANNUAL REPORT 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
GOVERNANCE
SHARE AWARDS MADE IN FINANCIAL YEARS TO 31 MARCH 2020 (AUDITED)
The table below sets out the current position of share-based awards made to Executive Directors.
AS AT
AWARDS
VESTED
AWARDS
LAPSED
AWARDS
EXERCISED
AS AT
31 MARCH 2020
DURING YEAR
DURING YEAR
DURING YEAR
31 MARCH 2021
(NUMBER)
(NUMBER)
(NUMBER)
(NUMBER)
(NUMBER)
ON DATE
AWARDS
GRANTED
(PENCE)
ON DATE
AWARDS
EXERCISED
(PENCE)1
VESTING DATE
MARKET PRICE
MARKET PRICE
Nick Hampton
Performance Share Plan2:
2017
20183
2019
2018
2018
2019
20185
Group Bonus Plan:
Imran Nawaz4
Performance Share Plan2:
Restricted Share Award:
330 380
287 278
233 502
203 038
217 855
136 159
81 696
136 159
–
723.72
680.40
01/06/20
22 629
22 629
22 629
–
603.85
680.40
01/06/20
–
–
330 380
603.85
287 278
694.45
–
(see note 4)
603.85
–
(see note 4)
694.45
–
–
–
–
–
–
–
–
–
–
–
–
–
–
After
31/03/21
After
31/03/22
After
31/03/21
After
31/03/22
After
63 051
63 051
–
(see note 4)
634.40
–
01/08/20
1 Awards are structured as nil cost options; awards were exercised with a nil exercise price.
2 The performance conditions for the PSP awards made in 2018 and 2019 are described on page 123. The three-year performance period for these awards began on the first day of the
financial year in which the award was granted. The performance conditions and vesting outcome for the 2017 award is described in the 2020 Annual Report.
3 The PSP award made in 2018 to Mr Hampton will vest at 57.3%, following the Committee’s assessment of performance conditions (as described on page 123).
4 As described on page 119, these appointment awards and unvested share incentive awards lapsed on cessation of employment on 30 April 2021, following resignation during
the year.
5 This is the second tranche of an award that was made in connection with Imran Nawaz’s appointment, to compensate him for incentives forfeited with his previous employer, as
described on appointment via RNS, and in the subsequent Directors’ Remuneration Reports. The Committee had made a determination that this tranche would vest based on
performance as at the second anniversary of appointment (being 1 August 2020). The full award has subsequently lapsed, as a result of resignation, as described on page 119.
Accordingly, the first tranche is being repaid in cash, and the shares in the second tranche shown here have lapsed unexercised.
Executive Directors may participate in the HMRC-approved Sharesave Plan, under which option awards are granted on the
same terms to all participating employees. These awards are not subject to performance conditions, and are normally exercisable
during the six-month period following the end of the relevant three- or five-year savings contract. The exercise price reflects a
20% discount to market value as permitted under HMRC rules and is applicable to all participants.
AS AT
OPTIONS
VESTED
OPTIONS
EXERCISED
OPTIONS
LAPSED
AS AT
1 APRIL 2020
DURING YEAR
DURING YEAR
DURING YEAR
31 MARCH 2021
EXERCISE
(NUMBER)
(NUMBER)
(NUMBER)
(NUMBER)
(NUMBER)
PRICE (PENCE)
EXERCISE
PERIOD
Nick Hampton
Savings-related options 2017
3 243
–
–
–
3 243
555.00
31/08/21
01/03/21 to
STATEMENT OF DIRECTORS’ SHAREHOLDINGS (AUDITED)
PERSONAL SHARE OWNERSHIP REQUIREMENTS (POLICY ON EXECUTIVE SHARE OWNERSHIP)
The Committee believes that material personal investment in Company shares serves to strengthen the long-term alignment
of interests between senior executives and shareholders.
Our executive shareholding requirements are considered to be more demanding and extend to a greater number of senior
executives in the Group when compared with similar sized UK-listed companies.
• The Chief Executive has a target share ownership requirement of four times base salary, to be achieved within five years
of appointment. Nick Hampton was appointed Chief Executive from 1 April 2018, and as at 31 March 2021, Mr Hampton holds
shares with a value of just under six times base salary, exceeding this requirement.
• The Chief Financial Officer has a target shareholding requirement of three times base salary to be achieved within five years
of appointment. Vivid Sehgal was appointed Chief Financial Officer on 1 April 2021.
• Other Executive Committee members are subject to the share ownership policy, with target holdings at three times base salary.
• This policy extends to a broader group of executives who have senior leadership roles within the Group. The shareholding target
for this group is equal to their base salary.
Under the shareholding policy, the value of deferred shareholdings is assessed net of income tax, at the prevailing share price.
The Committee monitors progress against the share ownership requirements annually.
Awards made to Executive Directors under the PSP are subject to a mandatory 2-year post-vesting holding period.
POST-EMPLOYMENT SHAREHOLDING POLICY
A post-employment shareholding requirement has been introduced as part of the 2020 Policy renewal: Executive Directors will
normally be required to maintain a shareholding in keeping with the guideline prevailing at the time of their departure, or their
actual holding on departure (if lower), for a period of two years following cessation of employment.
DIRECTORS’ INTERESTS (AUDITED)
The interests held by each person who was a Director during the financial year in the ordinary shares of 25 pence each in the
Company are shown below. All these interests are beneficially held, and no Director had interests in any other class of shares.
The table also summarises the interests in shares held through the Company’s various share plans.
Chair
Dr Gerry Murphy
Executive Directors
Nick Hampton
Imran Nawaz
Vivid Sehgal5
Non-executive directors
John Cheung7
Paul Forman
Lars Frederiksen
Anne Minto
Kimberly Nelson
Dr Ajai Puri6
Sybella Stanley
Warren Tucker
INTEREST IN
SHARES1
NIL COST OPTIONS –
CONDITIONAL ON
PERFORMANCE2
SHARES – NOT
CONDITIONAL ON
PERFORMANCE3
OPTIONS – NOT
CONDITIONAL ON
PERFORMANCE4
TOTAL AS AT
31 MARCH 2021
TOTAL AS AT
31 MARCH 2020
20 000
–
–
–
20 000
20 000
544 968
42 700
890 953
629 696
15 487
10 946
3 243
1 454 651
1 322 196
63 051
746 393
542 291
–
–
10 000
15 000
8 600
–
10 018
4 983
4 321
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10 000
15 000
8 600
–
n/a
n/a
10 000
15 000
8 600
–
10 018
10 018
4 983
4 321
4 983
4 321
Includes shares owned by connected persons.
1
2 Awards under the PSP, and the RSA award made to Mr Nawaz in 2018 which is subject to the same performance conditions as 2018 PSP awards. These awards were made as options
with a nil exercise price.
3 Deferred share awards made under the Group Bonus Plan.
4 These are HMRC-approved Sharesave Plan awards and vested awards.
5 Appointed a Director with effect from 1 March 2021.
6
7 Appointed a Director with effect from 1 January 2021.
Includes 8,000 shares held as 2,000 ADRs.
As described on page 119, specific appointment awards and unvested share incentive awards held by Imran Nawaz lapsed as a
result of his resignation. Accordingly, Imran Nawaz’s total interest in shares reduced to 42,700 on 30 April 2021.
There were no other changes in Directors’ interests in the period from 1 April 2021 to 26 May 2021.
126 TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021 127
127
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTORS’ REMUNERATION REPORT CONTINUED
SINGLE FIGURE TABLE (AUDITED)
£000s
SALARY/FEES
BENEFITS1
PENSION
TOTAL FIXED
REMUNERATION
ANNUAL
BONUS3
SHARE AWARDS
TOTAL VARIABLE
REMUNERATION
TOTAL
REMUNERATION
YEAR ENDED
31 MARCH 2021
Chair
Dr Gerry
Murphy
Executive
Directors
Nick Hampton
Imran Nawaz2
Vivid Sehgal5
Non-executive
directors6
John Cheung7
Paul Forman
Lars
Frederiksen
Anne Minto
Kimberly Nelson
Dr Ajai Puri
Sybella Stanley
Warren Tucker
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
350
350
–
–
–
–
350
350
–
–
–
–
–
–
350
350
665
470
40
665
470
–
17
13
1
17
113
–
133
94
6
166
94
–
815
577
47
848
677
–
898
–
48
778 1 5334
550
–
–
–
873 2 431 1 651 3 246 2 499
477
577 1 704
–
– 1 027
–
48
94
–
17
79
68
82
68
93
68
86
–
75
68
82
51
93
68
80
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17
79
68
82
68
93
68
86
–
75
68
82
51
93
68
80
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17
79
68
82
68
93
68
86
–
75
68
82
51
93
68
80
Totals
2 086 2 002
31
130 233
260 2 350 2 392
946 1 328 1 533 1 350 2 479 2 678 4 828 5 070
1 Benefits for Executive Directors include health insurance and car allowance.
2 Imran Nawaz – stepped down as a director on 31 March 2021 and left employment on 30 April 2021. As a consequence, certain amounts shown for 2020 become repayable (as
described on page 119).
3 Annual Bonus includes the value of deferred shares (based on the average share price over the period 1 January – 31 March 2020). The cash bonus award (with payment conditional
on approval of the dividend at the AGM) to Nick Hampton is £665,000 and to Imran Nawaz is £470,000.
4 This is the PSP award made in 2018. PSP award outcomes are discussed on page 123 and the value is included in this table above based on a share price of £8.10, being the closing
price on 24 May 2021 when the Remuneration Committee determined the extent to which the performance conditions were met.
5 Vivid Sehgal was appointed to the Board on 1 March 2021.
6
In accordance with the Group’s expenses policies, non-executive directors receive reimbursement for their reasonable expenses for attending Board meetings. In instances where
those costs are treated by HMRC as taxable benefits, the Group also meets the associated tax cost to the non-executive director through a PAYE settlement agreement with HMRC.
Amounts are minimal and do not show in the table after rounding.
7 John Cheung was appointed to the Board on 1 January 2021.
PAYMENTS TO PAST DIRECTORS AND PAYMENTS FOR LOSS OF OFFICE (AUDITED)
There have been no payments to past directors other than as disclosed in this Report. No loss of office payments have been made
during the year.
EXECUTIVE DIRECTORS’ EXTERNAL APPOINTMENTS
Nick Hampton was appointed as a non-executive director of Great Portland Estates plc on 17 October 2016 and under the terms of
the policy is entitled to retain those fees.
On behalf of the Board
Anne Minto OBE
Chair of the Remuneration Committee
26 May 2021
128 TATE & LYLE PLC ANNUAL REPORT 2021
128 TATE & LYLE PLC ANNUAL REPORT 2021
DIRECTORS’ REPORT
DIRECTORS’ REPORT
ABOUT THE DIRECTORS’ REPORT
The Directors’ Report comprises the Board of Directors
from pages 80 to 83, Governance section from pages 84 to
109, the Directors’ Report on pages 129 and 131 and the
Useful Information section from pages 202 to 208. Other
information that is relevant to the Directors’ Report, and
which is incorporated by reference into the Directors’
Report, is disclosed as follows:
• Likely future developments and performance of the
Company (throughout the Strategic Report)
• Engagement with suppliers, customers and others
(throughout the Strategic Report and pages 92 and 93)
• Engagement with employees (pages 50 to 53 and 94 to 95)
• Respect for human rights (pages 50 to 53, 65, 68 and 74)
• Going concern (page 49)
• Greenhouse gas emissions (pages 60 to 62)
• Financial instruments (Note 28)
• Post balance sheet events (Note 36).
RESULTS AND DIVIDEND
A review of the consolidated Group’s results can be found
from pages 11 to 76. An interim dividend of 8.8 pence per ordinary
share was paid on 6 January 2021. The Directors recommend
a final dividend of 22.0 pence per ordinary share to be paid on
6 August 2021 to shareholders on the register on 25 June 2021,
subject to approval at the 2021 Annual General Meeting (AGM).
The total dividend for the year is 30.8 pence per ordinary share
(2020 – 29.6 pence).
The Trustees of the Tate & Lyle PLC Employee Benefit Trust
(the EBT) have waived their right to receive dividends over their
total holding of 3,967,194 ordinary shares as at 31 March 2021.
RESEARCH AND DEVELOPMENT
The Group spent £43 million (2020 – £46 million) on research
and development expenditure during the year, including certain
research-based technical services.
ARTICLES OF ASSOCIATION
The Articles of Association set out the internal regulation of the
Company and cover such matters as the rights of shareholders,
the appointment and removal of Directors, and the conduct of the
Board and general meetings. Copies are available on request and
are displayed on the Company’s website, www.tateandlyle.com.
In accordance with the Articles of Association, Directors can be
appointed or removed by the Board or by shareholders in general
meeting. Amendments to the Articles of Association have to be
approved by at least 75% of those voting in person or by proxy at
a general meeting of the Company. Subject to UK company law
and the Articles of Association, the Directors may exercise all
the powers of the Company, and may delegate authorities to
committees, and may delegate day-to-day management and
decision-making to individual executive directors. Details of the
Board Committees can be found on pages 101, 104 and 110.
GOVERNANCE
SHARE CAPITAL
As at 31 March 2021, the Company had nominal issued ordinary
and preference share capital of £119 million comprising
£117 million in ordinary shares and £2 million in preference
shares. To satisfy obligations under employee share plans, the
Company issued 56,722 ordinary shares during the year. The
Company issued 10,863 shares during the period from 1 April
2021 to 26 May 2021. Further information about share capital is in
Note 22. Information about options granted under the Company’s
employee share plans is in Note 31.
The Company was given authority at the 2020 AGM to make
market purchases of up to 46,840,770 of its own ordinary shares.
The Company made no purchases of its own ordinary shares
during the year ended 31 March 2021 and the EBT also made
no purchases of ordinary shares during the year. This authority
will expire at the 2021 AGM and approval will be sought from
shareholders for a similar authority to be given for a further year.
RESTRICTIONS ON HOLDING SHARES
There are no restrictions on the transfer of ordinary and
preference shares in the capital of the Company. No limitations
are placed on the holding of shares and no share class carries
special rights of control of the Company. There are no restrictions
on voting rights other than those outlined in ‘Shareholders’ rights’
on preference shares. The Company is not aware of any
agreements between shareholders that may restrict the transfer
or exercise of voting rights.
SHAREHOLDERS’ RIGHTS
Holders of ordinary shares have the rights accorded to them
under UK company law, including the rights to receive the
Company’s annual report and accounts, attend and speak at
general meetings, appoint proxies and exercise voting rights.
Holders of preference shares have limited voting rights and may
not vote on: the disposal of surplus profits after the dividend on the
preference shares has been provided for; the election of Directors
or their remuneration; any agreement between the Directors and
the Company; or the alteration of the Articles of Association
dealing with any such matters. Further details regarding the
rights and obligations attached to share classes are contained in
the Articles of Association which are available on the Company’s
website, www.tateandlyle.com.
DIRECTORS’ INDEMNITIES AND INSURANCE COVER
The Company has agreed to indemnify the Directors, to the
extent permitted by the Companies Act 2006, against claims
from third parties in respect of certain liabilities arising out of,
or in connection with, the execution of their powers, duties and
responsibilities as Directors of the Company and any of its
subsidiaries. The Directors are also indemnified against the cost
of defending a criminal prosecution or a claim by the Company,
its subsidiaries or a regulator, provided that where the defence
is unsuccessful, the Director must repay those defence costs.
These indemnities are qualifying indemnity provisions for the
purposes of Sections 232 to 234 of the Companies Act 2006.
The Company also maintains Directors’ and officers’ liability
insurance cover, and reviews the level of cover each year.
TATE & LYLE PLC ANNUAL REPORT 2021
129
DIRECTORS’ REPORT CONTINUED
CHANGE OF CONTROL
At 31 March 2021, the Group had a committed bank facility of
US$800 million with a number of relationship banks which
contains change of control clauses. The Group also had
US$800 million of Private Placement Notes which contain change
of control provisions. In aggregate, this financing is considered
significant to the Group and in the event of a takeover (change
of control) of the Company, these contracts may be cancelled,
become immediately payable or be subject to acceleration.
POLITICAL DONATIONS
In line with the Group’s policy, no political donations were made
in the UK or in any country other than the US. The Group’s US
business made contributions during the year totalling US$3,950
(£3,038) (2020 – US$7,800; £6,000) to state political party
committees or political action committees, and to the campaign
committees of state or local candidates affiliated to the major
parties. In all, six separate donations were made, the largest
being US$1,200 and the smallest being US$250.
All the Company’s share plans contain provisions relating to a
change of control. Further information is set out in the Directors’
Remuneration Policy.
DTR RULE 5 DISCLOSURE
The Company had been notified under Rule 5 of the Disclosure
Guidance and Transparency Rules of the following holdings
of voting rights in its shares during the financial year ended
31 March 2021:
US$3,500 (£2,690) (2020 – US$12,000; £9,320) was also
contributed by the Tate & Lyle Political Action Committee (PAC).
Four separate donations were made, the largest being of
US$1,000 and the smallest being US$500. The PAC is funded
entirely by US employees. Employee contributions are entirely
voluntary and no pressure is placed on US employees to
participate. No funds are provided to the PAC by Tate & Lyle but
under US law, an employee-funded PAC must bear the name of
the employing company.
BlackRock Inc.
NUMBER OF
SHARES
22,991,481
% HELD
4.9%
SUBSIDIARIES AND BRANCHES
A list of the Group’s subsidiaries is set out in Note 37. The Group
has branches in China, Hong Kong and New Zealand.
On 13 April 2021, the Company was notified of an increase in the
interest BlackRock Inc. held to 23,447,463 shares (5%). The
Company has not been notified of any other changes in holdings
between 1 April and 26 May 2021.
DISCLOSURE TABLE PURSUANT TO LISTING RULE LR 9.8.4C
In accordance with LR 9.8.4C, the table below sets out the location of the information required to be disclosed, where applicable.
APPLICABLE SUB-PARAGRAPH WITHIN LR 9.8.4C
(1)
Interest capitalised by the Group
(2) Unaudited financial information
(4) Long-term incentive scheme only involving a Director
(5) Directors’ waivers of emoluments
(6) Directors’ waivers of future emoluments
(7) Non pro-rata allotments for cash (issuer)
(8) Non pro-rata allotments for cash (major subsidiaries)
(9) Listed company is a subsidiary of another company
(10) Contracts of significance involving a Director
(11) Contracts of significance involving a controlling shareholder
(12) Waivers of dividends
(13) Waivers of future dividends
(14) Agreement with a controlling shareholder
130 TATE & LYLE PLC ANNUAL REPORT 2021
PAGES
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none
none
n/a
none
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none
n/a
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n/a
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129
n/a
GOVERNANCE
DIRECTORS’ STATEMENT OF RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
United Kingdom law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the Group financial
statements in accordance with International Accounting
Standards in conformity with the requirements of the
Companies Act 2006, and the Company financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards
and applicable law), including Financial Reporting Standard
101 Reduced Disclosure Framework (‘FRS 101’). Under
company law the 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 the Company
and of the profit or loss of the Group for that period.
Under the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, Group financial statements are
required to be prepared in accordance with International
Financial Reporting Standards (IFRSs) adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the
European Union.
In preparing these financial statements the Directors are
required to:
• select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and then apply them consistently
• make judgements and accounting estimates that are
reasonable and prudent
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information
• provide additional disclosures when compliance with the
specific requirements in IFRSs and in respect of the
Company financial statements, FRS 101 is insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the Group and
Company financial position and financial performance
• in respect of the Group financial statements, state whether
International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and IFRSs
adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union have been followed, subject
to any material departures disclosed and explained in the
financial statements
• in respect of the Company financial statements, state
whether applicable UK Accounting Standards, including
FRS 101, have been followed, subject to any material
departures disclosed and explained in the financial
statements
• prepare the financial statements on the going concern
basis unless it is appropriate to presume that the Group
and/or the Company will not continue in business.
The Directors are 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
the Company and enable them to ensure that the Group and
the Company financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that comply with that law and those
regulations. The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website.
In accordance with Disclosure Guidance and Transparency
Rule 4.1, the Directors confirm, to the best of their knowledge:
• that the Group financial statements, prepared in accordance
with International Accounting Standards in conformity with
the requirements of the Companies Act 2006 and IFRSs
adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company and undertakings included in the consolidation
taken as a whole;
• that the Annual Report, including the Strategic Report,
includes a fair review of the development and performance
of the business and the position of the Company and
undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and
uncertainties that they face; and
• that they consider the Annual Report, 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, performance, business
model and strategy.
DISCLOSURE OF INFORMATION TO AUDITOR
So far as each Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
he or she has taken all the steps that he or she ought to have
taken as a Director in order to make himself or herself aware
of any relevant audit information and to establish that the
Group and Company’s auditor is aware of that information.
The Directors’ Report on pages 80 to 109, pages 129 to 131 and
pages 202 to 208 and the Directors’ Remuneration Report from
pages 110 to 128 of this Annual Report were approved by the
Directors on 26 May 2021.
Claire-Marie O’Grady
Company Secretary
26 May 2021
TATE & LYLE PLC ANNUAL REPORT 2021
131
O U R
2 0 2 0
H E R O E S
2020 was a year of incredible challenges.
Given the exceptional performance of so
many people across the Company, we
launched a special ‘2020 Heroes Awards’
to recognise those people who had gone
above and beyond in supporting their
colleagues, our communities and
customers during the pandemic.
We asked everyone to nominate their
colleagues that most deserved gratitude
and recognition and we received
575 nominations for individuals and
teams. We whittled these deserving
submissions down to 45 nominees, and
30 eventual winners.
These winners are shown on the divider
pages in this Report to celebrate and
recognise their outstanding contributions.
Read more online at www.tateandlyle.com
132 TATE & LYLE PLC ANNUAL REPORT 2021
BARTLOMIEJ ‘BARTEK’ WALAS
Industrial Starch Finance Business Partner,
Decatur, Illinois, USA
For working tirelessly to ensure our
industrial starches team had the financial
data required for managing our business
during the pandemic.
CLARA SATIZABAL
Customer Service Analyst, Cali, Colombia
For working tirelessly to ensure customer
expectations are met, and always maintaining
a positive, professional attitude.
ALAN HOLLIDAY
End User Service Delivery Executive Support
Europe, London, UK
For keeping our London Head Office
operating, through outstanding IT technical
support both on and off-site. For Alan, nothing
was ever too much trouble.
FRANK LUCIANI
Bulk Station Manager Morrisville,
Pennsylvania, USA
For going above and beyond to ensure we
continued to run our grain elevators safely –
supporting pandemic protocols, new ways of
working and training for our sites.
MAYBELL MORFE
Office Manager, Dubai, UAE
For outstanding work as Pandemic Manager
in Dubai, helping the team to stay safe and
adapt to new ways of working and living.
RYAN GROSS
Scientist, Hoffman Estates, Illinois, USA
For being the backbone of the sweeteners
research and development team’s smaller
crew during Covid-19. Ryan willingly stepped
up to support colleagues who couldn’t be in
the lab, to move their projects forward.
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
IN THIS SECTION
134 Independent Auditor’s Report to
the members of Tate & Lyle PLC
142 Consolidated income statement
143 Consolidated statement of comprehensive income
144 Consolidated statement of financial position
145 Consolidated statement of cash flows
146 Consolidated statement of changes in equity
147 Notes to the consolidated financial statements
194 Parent Company financial statements
TATE & LYLE PLC ANNUAL REPORT 2021
133
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC
Opinion
In our opinion:
• Tate & Lyle PLC’s Group financial statements and Parent Company financial statements (the ‘financial statements’) give a true and
fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2021 and of the Group’s and Parent Company’s
profits for the year then ended;
• the Group financial statements have been properly prepared in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and, as regards the group financial statements, International Financial Reporting
Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Tate & Lyle PLC (the ‘Company’) and its subsidiaries (the ‘Group’) for the year ended
31 March 2021 which comprise:
GROUP
PARENT COMPANY
Consolidated statement of financial position as at 31 March 2021
Balance sheet as at 31 March 2021
Consolidated income statement for the year then ended
Statement of changes in equity for the year then ended
Consolidated statement of comprehensive income for the year
then ended
Related notes 1 to 12 to the financial statements including a
summary of significant accounting policies
Consolidated statement of changes in equity for the year then ended
Consolidated statement of cash flows for the year then ended
Related notes 1 to 37 to the financial statements, including a
summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and International Accounting Standards
in conformity with the requirements of the Companies Act 2006 and as regards the Group financial statements, International Financial
Reporting Standards (IFRSs) adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union. The financial reporting
framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in
the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
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.
Our evaluation of the directors’ assessment of the Group and Parent Company’s ability to continue to adopt the going concern basis of
accounting included the following:
• We assessed the risk around going concern at the interim half-year review and again at the planning and year-end phases of the audit;
• In conjunction with our walkthrough of the Group’s financial close process, we confirmed our understanding of management’s going
concern assessment process and also engaged with management early to assess the key factors considered in its assessment;
• We obtained management’s going concern assessment, including the cash flow forecast model and covenant calculation for the going
concern period to 31 March 2023. The Group has modelled a number of downside scenarios, including the continued impact of Covid-19,
to its cash forecasts and covenant calculations in order to incorporate unexpected changes to the forecasted liquidity of the Group;
• We tested the clerical accuracy of the model used to prepare the Group’s going concern assessment;
• We assessed management’s ability to forecast with reference to historical accuracy of forecasts prepared for going concern and
impairment tests in prior periods;
• We tested the inputs to the model, including cash on hand, operating cash generation and financing commitments and agreed them
to the latest Board-approved forecasts that factored in the downside scenarios;
• We assessed the reasonableness of the key assumptions, in the context of other supporting evidence gained from our audit work
on goodwill impairment reviews and on other external market data, including analyst forecasts and competitor trading updates;
• We assessed the potential downside scenarios that management had applied and assessed their likelihood and whether other more
severe scenarios could apply and the associated impact on liquidity headroom;
• We considered the appropriateness of key assumptions in management’s reverse stress testing and assessed the likelihood of the
various scenarios (the impact of Covid-19, extended shutdowns of the largest manufacturing facility and the loss of the two largest Food
& Beverage Solutions customers) that could erode liquidity headroom;
• We confirmed the details of the available committed and undrawn facilities with reference to agreements and to third party confirmations
• We performed testing to evaluate whether the covenant requirements of the Group borrowings would be met under all base and
stress scenarios;
• We reviewed minutes of board meetings, analysts’ reports and trading updates released to the market from competitors and customers
with a view to identifying any matters which may impact the going concern assessment and contradict the findings made from the
procedures we performed above;
• We reviewed the Group’s going concern disclosures included in the annual report in order to assess that the disclosures were
appropriate and in conformity with the reporting standards.
134 TATE & LYLE PLC ANNUAL REPORT 2021
134 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
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 and Company’s ability to continue as a going concern for the period to 31 March 2023.
In relation to the Group and Company’s 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s or
Company’s ability to continue as a going concern.
OVERVIEW OF OUR AUDIT APPROACH
Audit scope
• We performed an audit of the complete financial information of five components (Tate & Lyle PLC, Tate & Lyle
International Finance PLC, Tate & Lyle Ingredients Americas LLC, Tate & Lyle Grain, Inc. and Tate & Lyle
Sucralose LLC) and audit procedures on specific balances for a further two components (Tate & Lyle Brasil S.A.
and Tate & Lyle Slovakia, s.r.o.).
• The components where we performed full or specific audit procedures accounted for 88% of the adjusted profit
before tax measure used to calculate materiality (as defined below), 86% of revenue and 77% of total assets.
Key audit matters
• Commodity co-product valuation (Group)
• Revenue recognition, including the risk of management override (Group)
Materiality
• We used an overall Group materiality of £15 million which represents 4.5% of profit before tax adjusted for
exceptional items and the Group’s share of tax of joint ventures.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into
account size, risk profile, the organisation of the Group and effectiveness of Group-wide controls, changes in the business environment
and other factors such as recent internal audit results when assessing the level of work to be performed at each entity.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, of the reporting components of the Group, we selected seven components covering
entities within the US, Brazil, Slovakia and the UK, which represent the principal business units within the Group.
Of the seven components selected, we performed an audit of the complete financial information of five components (‘full scope
components’) which were selected based on their size or risk characteristics. For the remaining two components (‘specific scope
components’), we performed audit procedures on specific accounts within that component that we considered had the potential for the
greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 88% (2020 – 82%) of the Group’s adjusted profit before
tax measure used to calculate materiality, 86% (2020 – 81%) of the Group’s revenue and 77% (2020 – 76%) of the Group’s total assets.
For the current year, the full scope components contributed 86% (2020 – 79%) of the Group’s adjusted profit before tax measure used
to calculate materiality, 74% (2020 – 69%) of the Group’s revenue and 75% (2020 – 74%) of the Group’s total assets. The specific scope
component contributed 2% (2020 – 3%) of the Group’s adjusted profit before tax measure used to calculate materiality, 12% (2020 – 12%)
of the Group’s revenue and 2% (2020 – 2%) of the Group’s total assets. The audit scope of these components may not have included testing
of all significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group.
We also instructed three components to perform specified procedures over certain aspects of the financial statements. This included
procedures relating to inventory existence to gain sufficient coverage over the inventory held at year-end and procedures relating to the
completeness and valuation of insurance provisions. Additionally, we have performed procedures over the opening balance sheet, cash,
inventory and related party balances relating to the Sweet Green Fields acquisition in the year.
Of the remaining components that together represent 12% of the Group’s adjusted profit before tax measure used to calculate materiality,
none are individually greater than 10% of the Group’s adjusted profit before tax measure used to calculate materiality. For these components,
we performed other procedures, including analytical review, specified procedures on material accounts, testing of consolidation journals
and intercompany eliminations and foreign currency translation recalculations to respond to any potential risks of material misstatement
to the Group financial statements.
TATE & LYLE PLC ANNUAL REPORT 2021 135
TATE & LYLE PLC ANNUAL REPORT 2021
135
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC CONTINUED
The charts below illustrate the coverage obtained from the work performed by our audit teams.
COVERAGE OBTAINED BY OUR AUDIT TEAMS
Adjusted profit before tax (%)
Revenue (%)
Total assets (%)
12
2
14
12
23
2
86
Full scope components
Specific scope components
Other procedures
74
75
Changes from the prior year
The changes from the prior year include the removal of Tate & Lyle Trading (Shanghai) Co. Ltd as a specific scope component due
to the positive results from prior years audits and a reduction in our assessment of risk of material misstatement in this component.
As Tate & Lyle Insurance (Gibraltar) Limited is in our audit scope specifically in relation to insurance provisions, we designated this as
specified procedures in the current year as opposed to specific scope. We also performed specified procedures over specific account
balances within the newly acquired Sweet Green Fields group, given the group operates in a key emerging market.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the
components by us, as the primary audit engagement team, or by component auditors from other EY global network firms operating under
our instruction. Of the five full scope components, audit procedures were performed on two of these directly by the primary audit team
with the remaining three being completed by a component auditor. For the two specific scope components, where the work was performed
by component auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence had
been obtained as a basis for our opinion on the Group as a whole.
We have adapted our approach to interact with and oversee local EY teams in response to the Covid-19 pandemic. During the current audit
cycle, due to the travel restrictions from the Covid-19 pandemic, we were unable to complete in-person visits to the component locations.
In response to this, we have held video calls with component teams and local management, including members of finance and members
of operations. At the start of the audit, we held a remote global team planning event with representatives from the UK Group, US and Polish
shared service centre teams. The UK Group team held planning calls with all other in-scope locations. Detailed instructions were sent
to all in-scope teams. These instructions covered the significant areas that should be addressed by the component team auditors (which
included the relative risks of material misstatement detailed above) and set out the information to be reported back to the Group audit team.
The Group audit team interacted regularly with the component teams and Polish shared service centre team during various stages of the
audit, reviewed key working papers, attended planning and closing meetings remotely by video conference and were responsible for the
scope and direction of the audit process. In line with prior year, we continued to work with our component teams to coordinate and
execute virtual stock counts in response to Covid-19. In addition, we met virtually with the non-EY firm audit team for the Group’s joint
venture in Mexico.
The above measures, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on
the consolidated financial statements.
136 TATE & LYLE PLC ANNUAL REPORT 2021
136 TATE & LYLE PLC ANNUAL REPORT 2021
FINANCIAL STATEMENTS
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our 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) that we
identified. These matters included 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 were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
RISK
OUR RESPONSE TO THE RISK
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEE
Commodity co-product
valuation (Group)
The fair value adjustment of
co-product inventory and executory
purchase and sale contracts is
£33 million (2020 --- £17 million)
Refer to the Audit Committee Report
(page 106); Accounting policies (pages
148 and 175); and Notes 2, 28 and 29 of
the Consolidated Financial Statements
The Group is exposed to price risk on
the three co-products (corn gluten
meal, corn gluten feed and corn oil)
that are produced by the corn wet
milling process.
The price risk associated with the
three co-products cannot readily be
hedged through purchase or sale of
derivatives as there are no actively
traded markets for these specific
co-products. Whilst the Group
actively manages its overall
co-product positions in the US, the
Group can hold either a net long or
short position for each co-product
based on the volume of co-products
made, bought and forward sold at any
point in time. These positions are
measured at fair value at each
reporting date, with gains and losses
recognised in the income statement.
The valuation of co-products is
identified as a key audit matter due
to the significant judgement involved
in the valuation of co-product positions.
No matters were identified
that would indicate that
the risk management and
accounting policies were
either inappropriate or
not being followed.
We concluded that the
valuation of co-product
inventory and forward
purchase and sale contracts
were materially correct.
We understood and evaluated management’s process for
managing the price risk inherent within its co-product positions
and compared it with management’s underlying risk management
and accounting policies.
To address the co-product valuation risk we performed the
following principal procedures:
• Lowered thresholds when determining sample sizes for
testing prices used in the valuation of co-product inventory
and forward sale and purchase contracts
• Compared market prices used to contracted prices of
companies in the sector that are collated by and quoted in
Jacobsen’s market publication and the Wall Street Journal,
which each represent widely recognised third party sources
• Validated the correlation and ratio of corn meal to soybean
meal (quoted on Chicago Mercantile Exchange). We compared
corn gluten meal prices to soybean meal prices to assist in
evaluating the reasonableness of selected forward corn gluten
meal prices
• Tested the clerical accuracy of the calculations of gains or
losses on contracts and reconciled values to the general ledger
• Compared selected forward market prices to the competitor
quotes obtained by management
• Confirmed the terms of a sample of sales and purchase
contracts with counterparties
• Selected a sample of contracts executed prior to and
subsequent to period end and compared the consistency of
prices on the executed contracts to the market prices used
in valuation. For any significant variances to the year-end
market prices we held discussions with the traders to
understand the variances
• Performed trader inquiries to understand market dynamics
and factors impacting pricing as of period end
• Assessed the adequacy of the Group’s commodities hedging
documentation to assess compliance with IFRS 9 requirements
• Evaluated the adequacy and transparency of commodities
disclosures
The procedures detailed above were performed in conjunction
between the component and Group audit team.
TATE & LYLE PLC ANNUAL REPORT 2021 137
TATE & LYLE PLC ANNUAL REPORT 2021
137
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC CONTINUED
RISK
OUR RESPONSE TO THE RISK
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEE
Revenue recognition, specifically in
relation to the risk of management
override (Group)
£2,807 million (2020 – £2,882 million)
Refer to the Accounting policies
(page 152); and Note 5 of the
Consolidated Financial Statements
The majority of the Group’s sales
arrangements are generally
straightforward, requiring little
judgement to be exercised.
However, management’s reward and
incentive schemes, based on achieving
sales and profit targets, may create
pressure to manipulate results.
There is a risk that management
may override controls to intentionally
misstate revenue through recording
fictitious revenue transactions in
the underlying subledgers or as
consolidation journals.
• Performed walkthroughs of significant classes of revenue
Based on the procedures
performed, we did not identify
any evidence of material
misstatement in the revenue
recognised in the year.
transactions to understand related significant processes and
to identify and assess the design effectiveness of key controls
• Understood how each of the revenue recognition policies are
applied. We understood the relevant controls including IT
controls over the revenue applications
• Tested the underlying IT systems and the controls related to
manage access, manage change and IT operations to investigate
whether there was any evidence of override of the underlying
IT systems which could facilitate management override
• As part of our revenue testing, we used data analysis tools on
revenue populations in the year to test the correlation of
revenue to cash receipts to verify the occurrence of revenue.
We identified any material transactions which fell outside the
expected transactions flow and tested these to confirm that
they were valid business transactions and were appropriately
accounted for
• Performed cut-off testing over a sample of revenue
transactions around the year-end date, to check that they were
recognised in the appropriate period
• Performed other audit procedures specifically designed to
address the risk of management override of controls. This
included journal entry testing, applying particular focus to
significant manual or unusual journal entries to ensure each
entry is supported by an appropriate, underlying business
rationale, is properly authorised and accounted for correctly
in the correct period
The procedures detailed above were performed principally by
component audit teams for all in-scope locations with trading
revenues and reviewed by the Group audit team.
In the prior year, our auditor’s report included a key audit matter in relation to the impact of Covid-19. The key aspect of this matter was
in relation to going concern. Given the significant headroom and available liquidity within the going concern assessment, we no longer
consider this a key audit matter. Additionally, in the prior year, our auditor’s report included a key audit matter in relation to the
recoverability of the investments in the Company’s subsidiaries. Similarly, given the headroom in the Company’s impairment assessment,
we have deemed the likelihood of material misstatement to be low and therefore do not consider this as a key audit matter.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our
audit procedures.
We determined materiality for the Group to be £15 million (2020 – £16.6 million), which is 4.5% (2020 – 5%) of profit before tax adjusted
for exceptional items and the Group’s share of tax of joint ventures. We believe that profit before tax adjusted for exceptional items and
the Group’s share of tax of joint ventures provided us with the most relevant profit basis as the exceptional items were non-recurring
and not related to the ongoing trading of the Group.
During the course of our audit, we reassessed initial materiality and the actual profit before tax adjusted for exceptional items and the
Group’s share of tax of joint ventures was higher than the Group’s initial estimates used in planning. However, due to the status of our
procedures we did not change our materiality assessment to reflect this.
STARTING
BASIS
• £283 million
• Profit before tax
ADJUSTMENTS
• £42 million exceptional items
• £9 million Group’s share of tax of joint ventures
MATERIALITY
• Totals £334 million (materiality basis)
• Materiality maintained at planning level of £15 million
(versus £16.7 million based on 5% of final reported)
We determined materiality for the Parent Company to be £12.6 million (2020 – £12.9 million), which is 0.5% (2020 – 0.5%) of total assets.
138 TATE & LYLE PLC ANNUAL REPORT 2021
138 TATE & LYLE PLC ANNUAL REPORT 2021
FINANCIAL STATEMENTS
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was
that performance materiality was 75% (2020 – 75%) of our planning materiality, being £11.3 million (2020 – £12.5 million). We have
set performance materiality at this percentage due to our assessment of the control environment and the low number of historical
audit findings.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is undertaken
based on a percentage of total performance materiality. The performance materiality set for each component is based on the relative
scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that component. In the current
year, the range of performance materiality allocated to components was £11.3 million to £1.1 million (2020 – £12.5 million to £1.2 million).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.8 million (2020 –
£0.8 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting
on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
OTHER INFORMATION
The other information comprises the information included in the Annual Report and accounts as set out on pages 1 to 133, other than
the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the
Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
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 course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with
the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
TATE & LYLE PLC ANNUAL REPORT 2021 139
TATE & LYLE PLC ANNUAL REPORT 2021
139
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC CONTINUED
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group and Company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
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 or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 49;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is
appropriate set out on page 70;
• Directors’ statement on fair, balanced and understandable set out on page 109;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 69;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out
on pages 108 and 109; and
• The section describing the work of the Audit Committee set out on pages 104 to 109.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ statement of responsibilities set out on page 131, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors 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 and Parent 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 Parent Company or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S 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 auditor’s 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.
EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. 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. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity
and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most
significant are those that relate to the form and content of the financial statements, such as the International Financial Reporting
Standards in conformity with the requirements of the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice,
FRS 101, the Companies Act 2006 and the UK Corporate Governance Code and the relevant tax compliance regulations in the
jurisdictions in which the Group operates. In addition, we concluded that there are certain significant laws and regulations which may
have an effect on the determination of the amounts and disclosures in the financial statements being the Listing Rules of the UK Listing
Authority, and those laws and regulations relating to health and safety and employee matters.
• We understood how Tate & Lyle PLC is complying with those frameworks by making enquiries of management, internal audit, those
responsible for legal and compliance procedures and the company secretary. We corroborated our enquiries through our review of
Board minutes and papers provided to the Audit Committee and attendance at all meetings of the Audit Committee.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by
meeting with management from various parts of the business to understand where it considered there was susceptibility to fraud.
We also considered performance targets and their propensity to influence efforts made by management to manage earnings or
influence the perceptions of analysts. We considered the programmes and controls that the Group has established to address risks
identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures
included incorporating data analytics in testing of manual journals (for example with respect to our work on revenue recognition noted
on page 138 above) and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our
procedures involved: journal entry testing, with a focus on manual consolidation journals and journals indicating large or unusual
transactions based on our understanding of the business; enquiries of legal counsel, Group management, internal audit and divisional
management and all full and specific scope management; and focused testing, as referred to in the key audit matters section above.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
140 TATE & LYLE PLC ANNUAL REPORT 2021
140 TATE & LYLE PLC ANNUAL REPORT 2021
FINANCIAL STATEMENTS
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
• Following the recommendation of the Audit Committee we were appointed by the Company at its Annual General Meeting on 26 July 2018
to audit the financial statements for the year ending 31 March 2019 and subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and re-appointments is 3 years, covering the years ending 31 March 2019 to 31 March 2021.
• The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain
independent of the Group and the Parent Company in conducting the audit.
• The audit opinion is consistent with the additional report to the Audit Committee.
USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Lloyd Brown
(Senior statutory auditor)
For and on behalf of Ernst & Young LLP, Statutory Auditor
London
26 May 2021
Notes:
1 The maintenance and integrity of the Tate & Lyle PLC website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented
on the website.
2 Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
TATE & LYLE PLC ANNUAL REPORT 2021 141
TATE & LYLE PLC ANNUAL REPORT 2021
141
NOTES
5
6
10
10
21
11
12
12
8
18
4
4, 11
4
YEAR ENDED 31 MARCH
2021
£M
2 807
2020
£M
2 882
287
1
(31)
26
283
(30)
253
253
253
---
253
296
5
(33)
28
296
(51)
245
245
245
–
245
PENCE
PENCE
54.4p
53.8p
54.4p
53.8p
£M
283
42
10
335
(48)
287
52.8p
52.1p
52.8p
52.1p
£M
296
24
11
331
(59)
272
CONSOLIDATED INCOME STATEMENT
CONTINUING OPERATIONS
Revenue
Operating profit
Finance income
Finance expense
Share of profit after tax of joint ventures
Profit before tax
Income tax expense
Profit for the year – continuing operations
Profit for the year --- total operations
Attributable to:
– owners of the Company
– non-controlling interests
Profit for the year
Earnings per share
Continuing operations:
• basic
• diluted
Total operations:
• basic
• diluted
Analysis of adjusted profit for the year --- continuing operations*
Profit before tax
Adjusted for:
Net exceptional charge
Amortisation of acquired intangible assets
Adjusted profit before tax
Adjusted income tax expense
Adjusted profit for the year
* Adjusted earnings per share information is presented in Note 12.
142 TATE & LYLE PLC ANNUAL REPORT 2021
142 TATE & LYLE PLC ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the year
Other comprehensive (expense)/income
Items that have been/may be reclassified to profit or loss:
(Loss)/gain on currency translation of foreign operations
Fair value gain/(loss) on net investment hedges
Net gain/(loss) on cash flow hedges
Share of other comprehensive expense of joint ventures
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
• actual return higher/(lower) on plan assets
• impact of ‘buy-in’ on main UK pension scheme
• net actuarial (loss)/gain on retirement benefit obligations
Changes in the fair value of equity investments at fair value through OCI
Tax effect of the above items
Total other comprehensive expense
Total comprehensive income
Attributable to:
– owners of the Company
– non-controlling interests
Total comprehensive income
Total comprehensive income relates entirely to continuing operations.
NOTES
23
23
23
21, 23
30
30
30
17, 23
11
FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH
2021
£M
253
2020
£M
245
(141)
39
1
(6)
(107)
129
---
(80)
3
(13)
39
(68)
185
185
---
185
46
(18)
(1)
(3)
24
(58)
(195)
12
2
41
(198)
(174)
71
71
–
71
TATE & LYLE PLC ANNUAL REPORT 2021 143
TATE & LYLE PLC ANNUAL REPORT 2021
143
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
Non-current assets
Goodwill and other intangible assets
Property, plant and equipment (including right-of-use assets
of £121 million (2020 – £150 million))
Investments in joint ventures
Investments in equities
Retirement benefit surplus
Deferred tax assets
Trade and other receivables
Derivative financial instruments
Current assets
Inventories
Trade and other receivables
Current tax assets
Derivative financial instruments
Other current financial assets
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Capital and reserves
Share capital
Share premium
Capital redemption reserve
Other reserves
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
TOTAL EQUITY
LIABILITIES
Non-current liabilities
Borrowings (including lease liabilities of £116 million (2020 – £141 million))
Retirement benefit deficit
Deferred tax liabilities
Provisions
Derivative financial instruments
Current liabilities
Borrowings (including lease liabilities of £27 million (2020 – £30 million))
Trade and other payables
Provisions
Current tax liabilities
Derivative financial instruments
Other current financial liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
NOTES
AT 31 MARCH
2020
£M
2021
£M
18
19
21
17
30
11
16
28
14
16
11
28
28
15
22
22
23
25
30
11
32
28
25
24
32
11
28
28
354
340
1 105
104
59
18
32
1
1
1 674
532
333
11
23
32
371
1 302
2 976
117
407
8
144
783
1 459
1
1 460
746
158
44
11
---
959
42
431
24
25
9
26
557
1 516
2 976
1 190
91
63
4
30
–
1
1 719
456
323
10
5
67
271
1 132
2 851
117
406
8
239
629
1 399
–
1 399
682
207
42
11
2
944
40
370
21
38
20
19
508
1 452
2 851
The notes on pages 147 to 193 form part of these financial statements. The consolidated financial statements on pages 142 to 193 were
approved by the Board of Directors on 26 May 2021 and signed on its behalf by:
Nick Hampton
Director
Vivid Sehgal
Director
144 TATE & LYLE PLC ANNUAL REPORT 2021
144 TATE & LYLE PLC ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for:
• depreciation of property, plant and equipment (excluding exceptional items)
• amortisation of intangible assets
• share-based payments
• net impact of exceptional income statement items
• net finance expense
• share of profit after tax of joint ventures
• net retirement benefit obligations
Changes in working capital and other non-cash movements
Cash generated from continuing operations
Net income tax paid
Interest paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Disposal of property, plant and equipment (exceptional)
Disposal of property, plant and equipment
Acquisition of businesses, net of cash acquired
Investments in intangible assets
Purchase of equity investments
Disposal of equity investments
Interest received
Dividends received from joint ventures
Net cash used in investing activities
Cash flows from financing activities
Purchase of own shares including net settlement
Cash inflow from additional borrowings
Cash outflow from repayment of borrowings
Repayment of leases
Dividends paid to the owners of the Company
Net cash used in financing activities
Cash and cash equivalents
Balance at beginning of year
Net increase/(decrease) in cash and cash equivalents
Currency translation differences
Balance at end of year
FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH
2021
£M
283
142
33
8
10
30
(26)
(8)
(24)
448
(57)
(22)
369
2020
£M
296
137
35
14
1
28
(28)
(21)
2
464
(49)
(30)
385
(134)
(141)
---
5
(62)
(18)
(4)
3
1
4
(1)
–
–
(25)
(6)
4
5
35
(205)
(129)
(5)
154
(5)
(36)
(137)
(29)
271
135
(35)
371
(22)
157
(234)
(37)
(137)
(273)
285
(17)
3
271
NOTES
19
18
31
8
10
21
26
8
34
17
17
21
22
20
13
27
27
15
A reconciliation of the movement in cash and cash equivalents to the movement in net debt is presented in Note 27.
TATE & LYLE PLC ANNUAL REPORT 2021 145
TATE & LYLE PLC ANNUAL REPORT 2021
145
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SHARE CAPITAL
AND SHARE
PREMIUM
£M
CAPITAL
REDEMPTION
RESERVE
£M
OTHER
RESERVES
£M
RETAINED
EARNINGS
£M
ATTRIBUTABLE
TO THE
OWNERS OF
THE COMPANY
£M
NON-
CONTROLLING
INTERESTS
£M
523
–
–
–
–
–
–
–
–
–
523
---
---
---
---
---
---
1
---
---
---
---
524
8
–
–
–
–
–
–
–
–
–
8
---
---
---
---
---
---
---
---
---
---
---
8
217
–
26
26
(6)
2
–
–
–
–
239
---
(104)
(104)
12
(3)
---
---
---
---
---
---
144
733
245
(200)
45
–
–
14
(22)
(137)
(4)
629
253
36
289
---
---
10
---
(5)
---
(137)
(3)
783
1 481
245
(174)
71
(6)
2
14
(22)
(137)
(4)
1 399
253
(68)
185
12
(3)
10
1
(5)
---
(137)
(3)
1 459
–
–
–
–
–
–
–
–
–
–
–
---
---
---
---
---
---
---
---
1
---
---
1
TOTAL
EQUITY
£M
1 481
245
(174)
71
(6)
2
14
(22)
(137)
(4)
1 399
253
(68)
185
12
(3)
10
1
(5)
1
(137)
(3)
1 460
YEAR ENDED 31 MARCH
2021
PENCE
2020
PENCE
NOTE
13
13
13
13
8.8
22.0
30.8
8.8
20.8
29.6
8.8
20.8
29.6
8.8
20.8
29.6
At 1 April 2019
Profit for the year – total operations
Other comprehensive income/(expense)
Total comprehensive income
Hedging gains transferred to inventory
Tax effect of the above item
Transactions with owners:
Share-based payments, net of tax
Purchase of own shares including net
settlement (Note 22)
Dividends paid (Note 13)
Other movements
At 31 March 2020
Profit for the year – total operations
Other comprehensive (expense)/income
Total comprehensive (expense)/income
Hedging losses transferred to inventory
Tax effect of the above item
Transactions with owners:
Share-based payments, net of tax
Issue of share capital (Note 22)
Purchase of own shares including net
settlement (Note 22)
Non-controlling interests in subsidiaries
acquired
Dividends paid (Note 13)
Other movements
At 31 March 2021
Dividends on ordinary shares (pence per share)
In respect of the financial year:
• interim
• final
Paid in the financial year:
• interim – in respect of the financial year
• final – in respect of the previous financial year
146 TATE & LYLE PLC ANNUAL REPORT 2021
146 TATE & LYLE PLC ANNUAL REPORT 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
Description of business
Tate & Lyle PLC (the Company) is a public limited company
incorporated in the United Kingdom and registered in England.
The Company’s ordinary shares are listed on the London
Stock Exchange.
The Company and its subsidiaries (together ‘the Group’) provide
ingredients and solutions to the food, beverage and other industries.
The Group operates from numerous production facilities around
the world.
The Group’s operations comprise three operating segments:
Food & Beverage Solutions, Sucralose and Primary Products.
The Group’s reportable segments are the same as its operating
segments. Segment information is presented in Note 5.
Accounting period
The Group’s annual financial statements are drawn up to 31 March.
These financial statements cover the year ended 31 March 2021
with comparative financials for the year ended 31 March 2020.
Basis of accounting
The consolidated financial statements on pages 142 to 193 have
been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies
Act 2006 and International Financial Reporting Standards (IFRS)
adopted pursuant to Regulation (EC) No 1606/2002 as it applies
in the European Union.
The Directors are satisfied that the Group has adequate resources
to continue to operate as a going concern for the foreseeable future
and that no material uncertainties exist with respect to this
assessment. In making this assessment, the Directors have
considered the Group’s balance sheet position and forecast
earnings and cash flows for the period from the date of approval
of these financial statements to 31 March 2023. The business plan
used to support the going concern assessment (the ‘Base case’)
is derived from Board-approved forecasts together with certain
downside sensitivities.
Further details of the Directors assessment are set out below:
At 31 March 2021, the Group has significant available liquidity,
including £371 million of cash and US$800 million (£579 million)
of committed and undrawn revolving credit facility, none of which
matures before March 2025. In addition, none of the Group’s
existing financing matures during the going concern assessment
period, with the earliest maturity being in the year ending 31 March
2024. During the year, the Group demonstrated its ability to
raise new finance despite the uncertainties of the Covid-19
pandemic, raising US$200 million of new private placement debt
in August 2020, with ten-year and twelve-year tenors at 2.91%
and 3.01%, respectively.
The Group has only one debt covenant requirement – to maintain
a net debt to EBITDA ratio of not more than 3.5 times. On the
covenant testing basis this was 0.6 times at 31 March 2021. As set
out below, for a covenant breach to occur it would require a
profound reduction in Group profit. Such reduction is considered
to be extremely unlikely.
As described elsewhere in the Annual Report, the Group’s
performance has demonstrated resilience to the challenges of
Covid-19, with revenue, profit and cash flow growth being delivered
during the year ended 31 March 2021. None of the scenarios
modelled in the Directors’ ‘worst case scenario’ in the Group’s two
most recent going concern assessments (30 September 2020 and
31 March 2020) have come to fruition to any degree.
In concluding that the going concern basis is appropriate, the
Directors have modelled the impact of a ‘worst case scenario’
to the ‘Base case’ by including the same three plausible but severe
downside risks also used for the Group’s viability statement, being:
a major operational failure causing an extended shutdown of our
largest manufacturing facility; the loss of two of our largest Food
& Beverage Solutions customers; and a slower recovery from the
impact of the Covid-19 pandemic. In aggregate, such ‘worst case
scenario’ does not result in any material uncertainty to the Group’s
going concern assessment and the resultant position still has
significant headroom above the Group’s debt covenant requirement.
In addition, the Directors have calculated a ‘reverse stress test’
which represents the changes that would be required to the ‘Base
case’ in order to breach the Group’s debt covenant. Such ‘reverse
stress test’ shows that the forecast Group profit would have to be
reduced to almost zero in order to cause a breach. Finally, the
Group has and continues to demonstrate its ability to operate all
of its manufacturing facilities safely in the current environment.
Having reviewed the ‘worst case scenario’ and ‘reverse stress test’,
the Directors consider that there is no reasonable scenario in
which available liquidity could be exhausted or the Group’s debt
covenant could be breached. Accordingly, there is no reasonable
basis under which the Group would not be a going concern.
The Group’s principal accounting policies have been consistently
applied throughout the year. Descriptions and specific accounting
policy information on how the Group has applied the requirements
of IFRS are included throughout the notes to these financial
statements. All amounts are rounded to the nearest million,
unless otherwise indicated.
Foreign currency
The consolidated financial statements are presented in Pound
sterling, which is also the Company’s functional currency. Where
changes in constant currency are presented, they are calculated
by retranslating current year results at prior year exchange rates.
Calculations of changes in constant currency have been included
in ‘Additional information’ within this document.
Accounting standards adopted during the year
In the current year, the Group has adopted, with effect from
1 April 2020, the following new accounting standards:
• Amendments to IFRS 3 Definition of a Business
• Amendments to IAS 1 Presentation Financial Statements and
IAS 8 Definition of Material
The adoption of these amendments from 1 April 2020 had no
material effect on the Group’s financial statements.
No other new standards, new interpretations or amendments
to standards or interpretations have been published which
are expected to have a significant impact on the Group’s
financial statements.
Alternative performance measures
The Group also presents alternative performance measures,
including adjusted operating profit, adjusted profit before tax,
adjusted earnings per share and adjusted free cash flow, which are
used for internal performance analysis and incentive compensation
arrangements for employees. They are presented because they
provide investors with additional information about the performance
of the business which the Directors consider to be valuable.
Reconciliations of the alternative performance measures to the
most directly comparable IFRS measures are presented in Note 4.
Alternative performance measures reported by the Group are not
defined terms under IFRS and may therefore not be comparable
with similarly titled measures reported by other companies.
2. SIGNIFICANT JUDGEMENTS AND ESTIMATES
In preparing these consolidated financial statements, management
has made judgements and used estimates and assumptions in
establishing the reported amounts of assets, liabilities, income
and expense under the Group’s accounting policies. Judgements
are based on the best evidence available to management.
Estimates are based on factors including historical experience
and expectations of future events, corroborated with external
information where possible. Judgements and estimates and their
underlying assumptions are reviewed and updated on an ongoing
basis, with any revisions being recognised prospectively.
TATE & LYLE PLC ANNUAL REPORT 2021 147
TATE & LYLE PLC ANNUAL REPORT 2021
147
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CCOONNTTIINNUUEEDD
2. SIGNIFICANT JUDGEMENTS AND ESTIMATES CONTINUED
However, given the inherent uncertainty of such estimates, the
actual results might differ significantly from the anticipated ones.
Information about the accounting estimates and judgements made
in applying these accounting policies that have the most significant
effect on the amounts recognised in the consolidated financial
statements are set out below.
Fair value of purchases, sales and inventory of corn-based
products (Notes 14, 28 and 29)
The Group manages its US net corn position, comprising the
purchase, sale and inventory of corn and corn-based goods,
including co-products, on a net basis.
The Group has designated the components of its US net corn
position in effective fair value hedge accounting relationships
whereby the hedged item is a group of items with offsetting risk
positions. This results in each element of the net corn position
being marked to market. The Group uses financial instruments
(mainly corn futures contracts) as hedging instruments to manage
this net position. The application of fair value hedge accounting is
not itself a significant accounting policy judgement. Recording all
components of the US net corn position at fair value also aligns
with the underlying economics and risk management of the
business. All changes in fair value of hedged items and hedging
instruments are recorded in operating costs. There is significant
estimation uncertainty in determining the fair values of certain
components of the hedged items and hedging instruments, as set
out in the table below.
In contrast to the US, the Group does not manage its European
corn and co-product positions (short: executory sales contracts;
long: executory purchase contracts and inventories) on a net basis,
it does not purchase or sell derivative financial instruments to
manage risk and its positions are not marked to market.
Consequently, the Group measures and carries its European corn
and co-product inventories at the lower of cost and net realisable
value and executory sales and purchase contracts are not recorded
on the balance sheet.
YEAR ENDED 31 MARCH
2021
£M
2020
£M
FOOTNOTES
Hedged items:
Corn purchase contracts
Corn sale contracts
Co-product sale contracts
Corn and elevator inventory
Co-products inventory
Total hedged items
Financial instrument products
(hedging instrument)
Net corn position
(a)
(b)
(c)
(d)
(d)
(e)
22
(54)
38
49
(5)
50
3
53
(15)
40
23
(20)
(4)
24
(4)
20
The fair value of certain components of the fair value hedges
contain significant accounting estimates, as set out below.
The fair value for each element of the US net corn position
enumerated in the table above is determined as follows:
(a) Contracts for the purchase of corn: represent executory
contracts for the purchase of corn. The hedged risks are
corn price and basis. The fair value adjustments to price are
made with reference to corn futures traded on the Chicago
Mercantile Exchange and to a lesser extent a management
estimate of basis (with reference to market prices).
Accordingly, these are principally classified as Level 2 hedged
item adjustments (refer to Note 28) and shown within other
current financial assets and liabilities on the balance sheet.
(b) Contracts for the sale of corn-based finished goods:
represent executory contracts for the sale of corn-based
finished goods. The hedged risks are corn price, basis and a
credit for co-products. The fair value adjustments to price are
made with reference to corn futures traded on the Chicago
Mercantile Exchange, a management estimate of basis and
management estimate of co-product credits (with reference to
market prices). Accordingly, these are principally classified as
Level 3 hedged item adjustments (refer to Note 28) and shown
within other current financial assets and liabilities on the
balance sheet.
(c) Co-product sale contracts: represent executory contracts
for the sale of co-products. The hedged risk is the change in
co-product pricing, which is based on management’s estimate
and reference to market prices. Accordingly, these are
principally classified as Level 3 hedged item adjustments
(refer to Note 28) and shown within other current financial
assets and liabilities on the balance sheet.
(d) Corn inventory and co-products inventory: represent physical
holdings of corn (and certain other inventories held at
elevators) as well as co-product inventories. The hedged risks
are commodity price and basis. The fair value adjustments are
made with reference to a number of inputs, including
management’s own assessment of future pricing and futures
traded on the Chicago Mercantile Exchange, where applicable.
(e) Financial instruments (mainly corn futures contracts):
fair value is determined by reference to quoted prices for
these instruments on the Chicago Mercantile Exchange. These
are classified as Level 1 financial instruments (refer to Note 28).
Of the components of the net corn positions set out above, those
components which have the greatest estimation uncertainty are the
fair values of basis and co-products. As a result, certain disclosures
about the nature of these items and the estimation uncertainty
inherent in them is required by IAS 1. Such disclosures are set
out in Note 28. The nature of these items is included below:
Basis represents the difference in price between the corn pricing
on the Chicago Mercantile Exchange and localised pricing that
can be achieved for physical delivery. It is typically driven by local
supply, demand and logistics factors. At 31 March 2021, the
carrying value of fair value adjustments made to basis was a net
liability of £1 million (2020 – £7 million asset). This is included as
a component within certain line items set out above.
Co-products included in fair value hedges comprise corn gluten
feed, corn gluten meal and corn oil, which are manufactured as
part of the corn wet-milling process. The Group can hold either a
net long or short position for each co-product based on the volume
of co-products made, bought or forward sold at any point in time.
The net position of fair value adjustments made to co-product
positions is £38 million assets (2020 – £23 million assets) for sales
contracts (including co-product credits in corn sales contracts) and
£5 million liability (2020 – £4 million liability) for inventories.
In addition to the above, the Group holds futures with a fair value
of £5 million profit (2020 – £6 million loss) to hedge the cash flow
risk associated with the purchases and sales of other commodities
or purchases of chemicals used in the manufacturing process
which are designated as cash flow hedges. The Group also holds
futures contracts held on behalf of customers with a fair value of
£7 million profit (2020 – £7 million loss) which do not impact the
Group’s income statement as all risks and rewards are borne by
the customers.
Key sources of estimation uncertainty
Management uses estimates in deriving these fair values, which
involves calculating the basis and the price at which the Group
will purchase or sell its net corn position in the future.
The inputs in these calculations are classified as observable where
referenced to a quoted market or unobservable when determined
by in-house experts, with reference to sources such as the
expected pricing for co-products.
The Group discloses its sensitivity to the corn price in Note 29
and valuation techniques and sensitivity analysis on the price of
co-products and basis (Level 3 financial instruments) in Note 28.
148 TATE & LYLE PLC ANNUAL REPORT 2021
TATE & LYLE PLC ANNUAL REPORT 2021 148
2. SIGNIFICANT JUDGEMENTS AND ESTIMATES CONTINUED
Taxation (Note 11)
Key sources of estimation uncertainty
The Group’s current and deferred tax balances are subject to
estimation uncertainty, which could also impact the effective tax
rate in the next financial year.
The specific sources of estimation uncertainty are as follows:
(a) Resolution of uncertain tax provisions: at 31 March 2021,
the Group has recorded current tax liabilities of £47 million
(2020 – £57 million) for uncertain tax positions (refer to Note 11).
Such provisions arise because the Group operates in an
international tax environment and is subjected to periodic tax
examination and uncertainties in a number of jurisdictions.
Such examination can include, inter alia, transfer pricing
arrangements relating to the Group’s operating activities,
historical reorganisations and the deductibility of interest on
certain intra-group borrowing arrangements. The issues involved
are complicated and may take a number of years to resolve.
Tax liabilities, if required, have been estimated based on one of
two methods, the expected value method (the sum of the probability
weighted amounts in a range of possible outcomes) or the single
most likely amount method, depending on which is expected to
better predict the resolution of the uncertainty. Of the £47 million
total of uncertain tax positions held at 31 March 2021, between
zero and £12 million of the balance could be resolved in the year
ending 31 March 2022. Such resolution could be favourable or
unfavourable. Of the £57 million balance at 31 March 2020,
£25 million met the criteria for being released in the year ending
31 March 2021. This compares to the range of possible outcomes
coming into the year for potential releases of provisions of
£15 million to £25 million.
(b) Recognition of deferred tax assets: at 31 March 2021, the
Group has recorded deferred tax assets of £32 million (2020 –
£30 million) and deductible temporary differences for which
the unrecognised deferred tax asset is £162 million (2020 –
£168 million) (refer to Note 11), the most significant of which
relates to unrecognised tax losses in the UK. Management
exercises judgement in its determination of recognition of
deferred tax assets.
In addition to these items, the tax rate in future periods is likely
to be impacted by changes to tax legislation and material changes
to the geographic mix of profits.
Retirement benefit plans (Note 30)
At 31 March 2021, the present value of the benefit obligations of
the plans was £1,573 million (2020 – £1,610 million). The present
value of the benefit obligations is based on key assumptions
including actuarial estimates of the future benefits that will be
payable to the members of the plans. Changes to key assumptions
could have a material impact on the reported amounts and, as
a result, represent a significant accounting estimate.
Key sources of estimation uncertainty
The present value of the benefit obligations is most sensitive to
the discount rate applied to the benefit obligations, assumed life
expectancies, and expected future inflation rates. Sensitivity
analysis is included in Note 30.
Whilst the Group establishes the assumptions on a consistent
basis reflecting advice from qualified actuaries, based on published
indices and other actuarial data, management must apply
judgement in selecting the most appropriate value from within an
acceptable range.
Changes in the assumptions used in determining the present
value of the benefit obligations will have an impact on the Group’s
income statement through their effect on the service cost and the
interest on the net deficit or surplus in the plans. However, most
of the impact of such changes, together with fluctuations in the
actual return on the plan assets, will be reflected in other
comprehensive income.
FINANCIAL STATEMENTS
Exceptional items (Note 8)
Key source of judgement
Exceptional items comprise items of income, expense and cash
flow, including tax items that: are material in amount; and are
outside the normal course of business or relate to events which
do not frequently recur, and therefore merit separate disclosure in
order to provide a better understanding of the Group's underlying
financial performance. Examples of events that give rise to the
disclosure of material items of income, expense and cash flow as
exceptional items include, but are not limited to: significant
impairment events; significant business transformation activities;
disposals of operations or significant individual assets; litigation
claims by or against the Group; and restructuring of components
of the Group’s operations.
For tax items to be treated as exceptional, amounts must be
material and their treatment as exceptional enable a better
understanding of the Group’s underlying financial performance.
Exceptional items in the Group’s financial statements are
classified on a consistent basis across accounting periods.
The classification of income and expense as exceptional items
is a significant judgement.
Potential separation
As previously announced, the Group is in the process of exploring
the potential to separate its Food & Beverage Solutions and Primary
Products businesses through the sale of a controlling stake in
Primary Products to a new long-term financial partner. At 31 March
2021 and at the date of this report, discussions with potential new
partners for Primary Products are ongoing. Given this and the
nature of any separation, a transaction is not yet sufficiently
probable to require any part of the Primary Products business to
be classified either as held for sale or as a discontinued operation.
3. KEY ACCOUNTING POLICIES
The consolidated financial statements have been prepared under
the historical cost convention, modified in respect of the revaluation
to fair value of certain investments in equities, derivative financial
instruments and non-derivative financial instruments in fair value
hedge relationships, certain inventories, assets held by defined
benefit pension plans and intangible and tangible assets acquired
in a business combination.
Descriptions and specific accounting policy information on how
the Group has applied the requirements of IFRS are included
throughout the notes to these financial statements.
Key accounting policies, where information can be found in the
applicable note, include:
• Revenue recognition (Note 5)
• Income taxes (Note 11)
• Goodwill and other intangible assets (Note 18)
• Leases (Note 20)
• Foreign currency translation of subsidiaries (Note 23)
• Financial instruments (Notes 16, 24, 25 and 28)
• Retirement benefit obligations (Note 30)
• Share-based payments (Note 31)
Accounting standards issued but not yet adopted
A number of amendments and interpretations have been issued
which are not expected to have any significant impact on the
accounting policies and reporting.
TATE & LYLE PLC ANNUAL REPORT 2021 149
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149
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
4. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
Income statement measures
For the reasons set out in Note 1, the Group presents alternative performance measures including adjusted operating profit, adjusted
profit before tax and adjusted earnings per share.
For the years presented, these alternative performance measures exclude, where relevant:
• Exceptional items (excluded as they are material in amount; and are outside the normal course of business or relate to events which
do not frequently recur, and therefore merit separate disclosure in order to provide a better understanding of the Group's underlying
financial performance);
• Amortisation of acquired intangible assets (costs associated with amounts recognised through acquisition accounting that impact
earnings compared to organic investments); and
• Tax on the above items and tax items that themselves meet these definitions. For tax items to be treated as exceptional, amounts must
be material and their treatment as exceptional enable a better understanding of the Group’s underlying financial performance.
The following table shows the reconciliation of the key income statement alternative performance measures to the most directly
comparable measures reported in accordance with IFRS:
CONTINUING OPERATIONS
£M UNLESS OTHERWISE STATED
Revenue
Operating profit
Net finance expense
Share of profit after tax of joint ventures
Profit before tax
Income tax expense
Profit for the year
Basic earnings per share (pence)
Diluted earnings per share (pence)
Effective tax rate expense %
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
IFRS
REPORTED
ADJUSTING
ITEMS
ADJUSTED
REPORTED
IFRS
REPORTED
ADJUSTING
ITEMS
ADJUSTED
REPORTED
2 807
287
(30)
26
283
(30)
253
54.4p
53.8p
10.9%
---
52
---
---
52
(18)
34
7.5p
7.4p
3.4%
2 807
2 882
339
(30)
26
335
(48)
287
296
(28)
28
296
(51)
245
–
35
–
–
35
(8)
27
2 882
331
(28)
28
331
(59)
272
61.9p
61.2p
52.8p
52.1p
5.8p
5.7p
58.6p
57.8p
14.3%
17.1%
0.8%
17.9%
The following table shows the reconciliation of the adjusting items impacting adjusted profit for the year:
CONTINUING OPERATIONS
Exceptional costs included in operating profit
Amortisation of acquired intangible assets
Total excluded from adjusted profit before tax
Tax effect of adjusting items
Exceptional US tax credit
Total excluded from adjusted profit for the year
NOTES
8
18
11
8, 11
YEAR ENDED 31 MARCH
2021
£M
42
10
52
(11)
(7)
34
2020
£M
24
11
35
(8)
–
27
Cash flow measure
The Group also presents an alternative cash flow measure, ‘adjusted free cash flow’, which is defined as cash generated from continuing
operations, after net interest and tax paid, after capital expenditure and excluding the impact of exceptional items.
The following table shows the reconciliation of adjusted free cash flow:
CONTINUING OPERATIONS
Adjusted operating profit
Adjusted for:
Adjusted depreciation and adjusted amortisation1
Share-based payments
Changes in working capital and other non-cash movements
Net retirement benefit obligations
Capital expenditure
Net interest and tax paid
Adjusted free cash flow
YEAR ENDED 31 MARCH
2021
£M
339
165
8
(24)
(8)
(152)
(78)
250
2020
£M
331
161
14
2
(21)
(166)
(74)
247
1 Total depreciation of £148 million (2020 – £145 million) and amortisation of £33 million (2020 – £35 million) less £6 million (2020 – £8 million) of accelerated depreciation recognised
in exceptional items and £10 million (2020 – £11 million) of amortisation of acquired intangible assets.
150 TATE & LYLE PLC ANNUAL REPORT 2021
150 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
4. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Financial strength measures
The Group uses two financial metrics as key performance measures to assess its financial strength. These are the net debt to EBITDA
ratio, and the return on capital employed ratio.
For the purposes of KPI reporting, the Group uses a simplified calculation of these KPIs to make them more directly related to information
in the Group’s financial statements. The net debt to EBITDA ratios using the calculation methodology prescribed for financial covenants on
the Group’s borrowing facilities are shown in Note 29.
All ratios are calculated based on unrounded figures in £ million.
The net debt to EBITDA ratio is as follows:
Calculation of net debt to EBITDA ratio
Net debt
Adjusted operating profit
Add back adjusted depreciation and adjusted amortisation
EBITDA1
Net debt to EBITDA ratio (times)
NOTE
27
AT 31 MARCH
2020
£M
451
331
161
492
0.9
2021
£M
417
339
165
504
0.8
1 EBITDA is calculated as adjusted operating profit £339 million (2020 – £331 million) adding back adjusted depreciation of £142 million (2020 – £137 million) (total depreciation of
£148 million (2020 – £145 million) less £6 million (2020 – £8 million) of accelerated depreciation recognised in exceptional items) and adding back adjusted amortisation of £23 million
(2020 – £24 million) (total amortisation of £33 million (2020 – £35 million) less £10 million (2020 – £11 million) of amortisation of acquired intangible assets).
The return on capital employed ratio is as follows:
Calculation of return on capital employed (ROCE)
Adjusted operating profit
Deduct amortisation on acquired intangible assets
Profit before interest, tax and exceptional items from continuing operations for ROCE
Goodwill and other intangible assets
Property, plant and equipment
Working capital, provisions and non-debt related derivatives1
Invested operating capital of continuing operations
Average invested operating capital2
Return on capital employed (ROCE) %
2021
£M
339
(10)
329
354
1 105
421
1 880
1 910
AT 31 MARCH
2019
£M
342
982
401
1 725
2020
£M
331
(11)
320
340
1 190
409
1 939
1 832
17.2%
17.5%
1 All derivatives held at 31 March 2021 and 2020 were non-debt related derivatives. For the purpose of this calculation other current financial assets and liabilities are also included.
2 Average invested operating capital represents the average at the beginning and end of the year of goodwill and other intangible assets, property, plant and equipment, working
capital, provisions and non-debt related derivatives.
TATE & LYLE PLC ANNUAL REPORT 2021 151
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151
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5. SEGMENT INFORMATION
Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an
amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group
has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before
transferring them to the customer at a point in time.
Discounts mainly comprise volume-driven rebates. Revenue from these sales is recognised based on the price specified in the
contract, net of the estimated volume discounts. A liability is recognised for expected volume discounts payable to customers in
relation to sales made until the end of the reporting period.
There is no material element of financing in sales which are made with credit terms in general between 30 to 60 days, which is
consistent with market practice. The Group makes use of certain supply-chain financing arrangements with a number of its
customers in North America – and such arrangements include a financing element, which is deducted from revenue. During the
year, £3 million (2020 – £5 million) was deducted from revenue for supply-chain financing costs.
Segment information is presented on a basis consistent with the information presented to the Board (the designated Chief Operating
Decision Maker (CODM)) for the purposes of allocating resources within the Group and assessing the performance of the Group’s
businesses. Continuing operations comprise three operating segments: Food & Beverage Solutions, Sucralose and Primary Products.
These operating segments are also the Group’s three reportable segments. The Group does not aggregate operating segments to form
reportable segments. Food & Beverage Solutions operates in the key categories of beverages, dairy and soups. Sucralose, a high-intensity
sweetener, is used in various food categories and beverages. Primary Products has strong market positions in high-volume sweeteners
and industrial starches.
Central, which comprises central costs including head office, treasury and insurance activities, does not meet the definition of an
operating segment under IFRS 8 Operating Segments but is included below in order to be consistent with the presentation of segment
information presented to the Board. The segments are served by a single manufacturing network and receive services from a number
of global support functions. The segmental allocation of costs is performed using standard product costs to allocate all direct costs
(including manufacturing facility-based depreciation) and allocation keys for all indirect costs (including share-based payments and
amortisation) are consistently applied over time. The Group does not have any operations classified as a discontinued operation.
The Board uses adjusted operating profit as the measure of the profitability of the Group’s businesses. Adjusted operating profit is,
therefore, the measure of segment profit presented in the Group’s segment disclosures. During the years presented, the items excluded
from operating profit in arriving at adjusted operating profit were the amortisation of acquired intangible assets and exceptional items.
The segmental classification of exceptional items is detailed in Note 8.
Segment results
CONTINUING OPERATIONS
Revenue
Adjusted operating profit1
Adjusted operating margin
Included within statutory operating profit2:
• depreciation
• amortisation
• share-based payments
FOOD & BEVERAGE
SOLUTIONS
£M
970
177
SUCRALOSE
£M
151
55
18.3%
36.8%
PRIMARY
PRODUCTS
£M
1 686
158
9.4%
43
23
2
9
---
1
90
7
3
1 Reconciled to statutory profit for the year in Note 4.
2 Disclosure provided as either included in the measure of segment profit and loss or otherwise regularly provided to CODM.
CONTINUING OPERATIONS
Revenue
Adjusted operating profit1
Adjusted operating margin
Included within statutory operating profit2:
• depreciation
• amortisation
• share-based payments
FOOD & BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
942
162
161
63
17.2%
39.3%
41
25
4
9
–
1
PRIMARY
PRODUCTS
£M
1 779
158
8.9%
88
8
4
1 Reconciled to statutory profit for the year in Note 4.
2 Disclosure provided as either included in the measure of segment profit and loss or otherwise regularly provided to CODM.
YEAR ENDED 31 MARCH 2021
CENTRAL
£M
---
(51)
n/a
6
3
2
TOTAL
£M
2 807
339
12.1%
148
33
8
YEAR ENDED 31 MARCH 2020
CENTRAL
£M
–
(52)
n/a
7
2
5
TOTAL
£M
2 882
331
11.5%
145
35
14
152 TATE & LYLE PLC ANNUAL REPORT 2021
152 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
5. SEGMENT INFORMATION CONTINUED
Geographic disclosures
Revenue
CONTINUING OPERATIONS
Food & Beverage Solutions
North America
Asia, Middle East, Africa and Latin America
Europe
Food & Beverage Solutions --- total
Sucralose --- total
Primary Products
Americas
Rest of the world
Primary Products --- total
Total
FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH
2021
£M
485
269
216
970
151
1 596
90
1 686
2 807
RESTATED*
2020
£M
470
263
209
942
161
1 683
96
1 779
2 882
* Comparatives have been restated following a change during the year to the geographic Food & Beverage Solutions disclosure. To increase our focus on building our business and
presence in higher growth markets, we created a new single Asia, Middle East, Africa and Latin America region. This comprises the regions previously reported as Asia Pacific,
Latin America and Middle East and Africa (formerly part of Europe, Middle East and Africa).
Sales to customers in the United Kingdom totalled £32 million (2020 – £36 million). Sales to customers in the United States totalled
£2,004 million (2020 – £2,060 million). No customer contributed more than 10% of the Group’s external sales from continuing operations
(2020 – no customer contributed more than 10%).
The Food & Beverage Solutions segment’s divisional revenue using the previous disclosure model is as follows:
CONTINUING OPERATIONS
Food & Beverage Solutions
North America
Asia Pacific and Latin America
Europe, Middle East and Africa
Food & Beverage Solutions --- total
YEAR ENDED 31 MARCH
2021
£M
485
221
264
970
2020
£M
470
214
258
942
Location of non-current assets
The location of non-current assets, other than financial instruments (including long-term receivables), deferred tax assets, and
retirement benefits are as follows:
United Kingdom
United States
Other European countries
Rest of the world
Non-current assets
2021
£M
24
1 074
275
190
1 563
AT 31 MARCH
2020
£M
25
1 200
294
102
1 621
TATE & LYLE PLC ANNUAL REPORT 2021 153
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153
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
6. OPERATING PROFIT
Analysis of operating expenses by nature:
CONTINUING OPERATIONS
Revenue
Operating expenses
NOTES
Cost of inventories (included in cost of sales)
Staff costs (of which £163 million (2020 – £162 million) was included in cost of sales1)
9
Depreciation of property, plant and equipment:
• owned assets (of which £98 million (2020 – £97 million) was included in cost of sales2)
• leased assets (of which £22 million (2020 – £24 million) was included in cost of sales)
Exceptional costs
Amortisation of intangible assets:
• acquired intangible assets
• other intangible assets
Impairment of trade receivables
Impairment of intangible assets
Impairment of property, plant and equipment
Net fair value gain on commodity contracts
Total net foreign exchange gains
Other operating expenses
Total operating expenses
Operating profit
19
19, 20
8
18
18
16
18
19
YEAR ENDED 31 MARCH
2021
£M
2 807
1 502
340
113
29
42
10
23
(2)
5
3
(33)
---
488
2 520
287
2020
£M
2 882
1 465
353
106
31
24
11
24
5
1
1
(4)
(1)
570
2 586
296
1 Excludes £7 million of staff costs recognised in exceptional items.
2 Excludes £6 million (2020 – £8 million) of accelerated depreciation recognised in exceptional items.
The Group spent £43 million (2020 – £46 million) on research and development expenditure during the year, including certain research-
based technical services.
7. AUDITOR’S REMUNERATION
Fees payable to the Company’s external auditor, Ernst & Young LLP, and its associates, were as follows:
YEAR ENDED 31 MARCH
2021
£M
1.1
1.6
0.1
2.8
2020
£M
1.1
1.4
0.1
2.6
FOOTNOTES
YEAR ENDED 31 MARCH
2021
£M
2020
£M
(a)
(b)
(c)
(d)
(20)
(19)
(3)
---
(42)
7
7
(35)
(19)
–
–
(5)
(24)
–
–
(24)
Fees payable for the audit of the Company and consolidated financial statements
Fees payable for other services:
• the audit of the Company’s subsidiaries
• audit-related assurance services
Total
8. EXCEPTIONAL ITEMS
Exceptional (costs)/income recognised in the consolidated income statement are as follows:
CONTINUING OPERATIONS
Income statement
Restructuring costs
Exploration of potential separation of the business
Historical legal matters
Primary Products’ savoury business exit
Exceptional items included in profit before tax
US tax credit
Exceptional items included in income tax
Total exceptional items
154 TATE & LYLE PLC ANNUAL REPORT 2021
154 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
8. EXCEPTIONAL ITEMS CONTINUED
Set out below are the principal components of the Group’s exceptional items:
(a) The Group recorded £20 million of restructuring charges, principally comprising £16 million of productivity costs including accelerated
depreciation of assets being replaced with more efficient alternatives, Global Operations cost saving initiatives and other associated
project costs and £4 million of severance costs for roles removed from the organisation. Of these costs, £7 million was recorded in
Food & Beverage Solutions, £8 million was recorded in Primary Products and £5 million was recorded in Central.
(b) As previously announced, the Group has undertaken work to explore the potential to separate its Food & Beverage Solutions
and Primary Products businesses through a sale of a controlling stake in its Primary Products business to a new long-term
financial partner. During the year ended 31 March 2021, the Group incurred costs of £19 million relating to this activity, principally
for external advisors.
(c) During the year, the Group recorded a net charge of £3 million relating to certain historical legal matters in the US. Included within
this net cost was £2 million of income recorded for the favourable settlement of an insurance claim and provision made to settle
other historical matters.
(d) The Group recorded an exceptional tax credit of £7 million within tax related to the release of an uncertain tax provision in the US,
which had been recorded at the time of the Group’s exit of Sucralose manufacturing in Singapore. At that time, the costs arising from
the closure of Singapore and the associated tax were recorded as exceptional items.
Of the net £35 million exceptional charge recorded during the year ended 31 March 2021, £19 million was reflected in exceptional cash flow
in the current year. In addition, £13 million of exceptional costs recorded in the prior year resulted in exceptional cash outflows in the
current year such that net cash outflow from exceptional items for the year ended 31 March 2021 was £32 million.
The most significant exceptional costs in the prior year was restructuring charges related to the Group’s previously announced programme
to simplify the business and drive productivity. Other exceptional costs in the prior year related to exit costs for the Primary Products’
small, non-core savoury ingredients business, mainly comprising the cost of writing off the associated assets of the business.
Tax credits/charges on exceptional items are only recognised to the extent that gains/losses incurred are expected to result in tax
recoverable/payable in the future. The total tax impact of these exceptional items included in profit before tax was a tax credit of £8 million.
Further details in respect of cash flows from exceptional items are set out below:
Net cash outflows on exceptional items
Restructuring costs
Exploration of potential separation of the business
Historical legal matters
Primary Products’ savoury business exit
Oats ingredients business disposal
Asset remediation1
Net cash outflows
1 Cash outflow of £7 million relates to utilisation of existing provision.
FOOTNOTES
(a)
(b)
(c)
YEAR ENDED 31 MARCH
2021
£M
(11)
(15)
1
---
---
(7)
(32)
2020
£M
(13)
–
–
(1)
(1)
(9)
(24)
Cash outflows in relation to asset remediation related to costs to remediate environmental health and safety risks associated primarily
with idle assets at manufacturing sites in North America.
Exceptional cash flows
The total cash outflows from exceptional items presented in the cash flow statement of £10 million reflect that the exceptional costs in
profit before tax of £42 million were £10 million higher than net cash outflows of £32 million set out in the table above. In the prior year,
cash flows from exceptional items were £1 million in cash generated from operating activities and £1 million in net cash used in investing
activities, as the exceptional costs in profit before tax in total were the same as net cash outflows.
TATE & LYLE PLC ANNUAL REPORT 2021 155
TATE & LYLE PLC ANNUAL REPORT 2021
155
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
9. STAFF COSTS
Staff costs were as follows:
Wages and salaries
Social security costs
Retirement benefit costs:
• defined benefit schemes
• defined contribution schemes
Share-based payments
Total
YEAR ENDED 31 MARCH
2021
£M
307
23
1
8
8
347
2020
£M
306
23
2
8
14
353
The average number of people employed by the Company and its subsidiaries, including part-time employees, is set out below:
By operating segment
CONTINUING OPERATIONS
Food & Beverage Solutions1
Sucralose1
Primary Products
Central
Total
YEAR ENDED 31 MARCH
2021
2020
1 985
102
1 638
529
4 254
1 798
100
1 792
503
4 193
1 The Food & Beverage Solutions division operates with a single commercial team. It is not practicable to split this team between the two segments comprising this division,
and therefore the entire headcount of the commercial team has been included within the Food & Beverage Solutions segment.
At 31 March 2021, the Group employed 4,441 people (2020 – 4,218 people). The Group’s three operating segments are supported by Global
Operations, a single manufacturing network, which is responsible for running the Group’s manufacturing facilities. The Group allocates
the headcount of the Global Operations team to segments based on the split of primary capacity at each location. Central includes
shared-service employees who perform activities for the whole Group, including the Food & Beverage Solutions, Sucralose and Primary
Products segments.
Key management compensation
Salaries and short-term employee benefits
Retirement benefits
Share-based payments
Total
YEAR ENDED 31 MARCH
2021
£M
9
1
3
13
2020
£M
9
1
5
15
Key management is represented by the Executive Committee and the Company’s Directors. Remuneration details of the Company’s
Directors are given in the Directors’ Remuneration Report on pages 110 to 128. Members of the Executive Committee are identified
on pages 84 and 85. The aggregate gains made by key management on the exercise of share options were £4 million (2020 – £6 million).
Not included in key management compensation set out above is the impact of repayment of certain awards that became repayable on
the cessation of employment of Imran Nawaz on 30 April 2021. The figures also exclude the impact of his long-term outstanding variable
pay awards that were also forfeited. No related party transactions with close family members of the Group’s key management occurred
in the current or prior year.
10. FINANCE INCOME AND EXPENSE
CONTINUING OPERATIONS
Interest payable on bank and other borrowings
Fair value hedges:
• fair value loss on interest rate derivatives
• fair value adjustment of hedged borrowings
Lease interest
Net retirement benefit interest
Finance expense
Finance income – income on cash balances
Net finance expense
156 TATE & LYLE PLC ANNUAL REPORT 2021
156 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
NOTE
20
30
YEAR ENDED 31 MARCH
2021
£M
(20)
---
---
(6)
(5)
(31)
1
(30)
2020
£M
(26)
(3)
3
(7)
–
(33)
5
(28)
FINANCIAL STATEMENTS
11. INCOME TAXES
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except
to the extent that it relates to items recognised directly in equity and other comprehensive income.
Current tax is the amount of tax expected to be payable or receivable on the taxable profit or loss for the current period. This amount
is amended for adjustments in respect of prior periods. Current tax is calculated using tax rates that have been written into law
(‘enacted’) or irrevocably announced/committed by the respective government (‘substantively enacted’) at the period-end date.
Income tax in the consolidated income statement will differ from the income tax paid in the consolidated cash flow statement primarily
because of deferred tax arising on temporary differences and payment dates for income tax occurring after the balance sheet date.
Deferred tax is provided based on temporary differences between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date. Deferred tax is calculated using the enacted or substantively enacted rates that are
expected to apply when the asset is realised, or the liability is settled. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Current and deferred tax receivable (assets) and payable (liabilities) are offset only when there is a legal right to settle them net and
the Group intends to do so. This is generally true when the taxes are levied by the same tax authority.
Refer to Note 2 for key sources of estimation uncertainty relating to income taxes.
Analysis of charge for the year
CONTINUING OPERATIONS
Current tax
United Kingdom
Overseas
Exceptional tax credit
(Expense)/credit in respect of previous financial years
Deferred tax
Credit/(expense) for the year
Credit/(expense) in respect of previous financial years
Exceptional tax credit
Income tax expense
Statutory effective tax rate (%)
Reconciliation to adjusted income tax expense
Income tax expense
Taxation credit on exceptional items
Taxation credit on amortisation of acquired intangibles
Exceptional US tax credit
Adjusted income tax expense
Adjusted effective tax rate (%)
YEAR ENDED 31 MARCH
2021
£M
2020
£M
(5)
(51)
13
(5)
(48)
4
12
2
(30)
(8)
(42)
3
6
(41)
(10)
(2)
2
(51)
10.9%
17.1%
YEAR ENDED 31 MARCH
2021
£M
(30)
(8)
(3)
(7)
(48)
2020
£M
(51)
(5)
(3)
–
(59)
14.3%
17.9%
NOTES
4
At 31 March 2021, the carrying value of current tax assets totalled £11 million (2020 – £10 million) and the carrying value of the current tax
liabilities totalled £25 million (2020 – £38 million).
The Group’s current and deferred tax balances are subject to estimation uncertainty, which could also impact the effective tax rate in the
next financial year. The specific sources of estimation uncertainty are as follows:
(a) Resolution of uncertain tax provisions: at 31 March 2021, the Group has recorded current tax liabilities of £47 million (2020 –
£57 million) for uncertain tax positions (refer to Note 2). Such provisions arise because the Group operates in an international tax
environment and is subjected to periodic tax examination and uncertainties in a number of jurisdictions. Such examination can include,
inter alia, transfer pricing arrangements relating to the Group’s operating activities, historical reorganisations and the deductibility
of interest on certain intra-group borrowing arrangements. The issues involved are complicated and may take a number of years
to resolve. Tax liabilities, if required, have been estimated based on one of two methods, the expected value method (the sum of the
probability weighted amounts in a range of possible outcomes) or the single most likely amount method, depending on which is
expected to better predict the resolution of the uncertainty. Of the £47 million total of uncertain tax positions held at 31 March 2021,
between zero and £12 million of the balance could be resolved in the year ending 31 March 2022. Such resolution could be favourable
or unfavourable. Of the £57 million balance at 31 March 2020, £25 million met the criteria for being released in the year ending
31 March 2021. This compared to the range of possible outcomes coming into the year for potential releases of provisions of
£15 million to £25 million.
TATE & LYLE PLC ANNUAL REPORT 2021 157
TATE & LYLE PLC ANNUAL REPORT 2021
157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
11. INCOME TAXES CONTINUED
(b) Recognition of deferred tax assets: at 31 March 2021, the Group has recorded deferred tax assets of £32 million (2020 – £30 million
assets), and deductible temporary differences for which the unrecognised deferred tax asset is £162 million (2020 – £168 million),
the most significant of which relates to unrecognised tax losses in the UK. Management exercises judgement in its determination
of recognition of deferred tax assets.
In addition to these items, the tax rate in future periods is likely to be impacted by changes to tax legislation and material changes to the
geographic mix of profits.
Reconciliation of the effective tax rate
As the Group’s head office and Parent Company are domiciled in the UK, the Group uses the UK corporation tax rate to reference its
effective tax rate, notwithstanding that only a small proportion of the Group’s business is in the UK. The tax on the Group’s profit before
tax differs from the standard rate of corporation tax in the UK as follows:
YEAR ENDED 31 MARCH
CONTINUING OPERATIONS
Profit before tax
Less share of profit after tax of joint ventures
Parent Company and subsidiaries’ profit before tax
Corporation tax charge thereon at 19% (2020 – 19%)
Adjusted for the effects of:
• non-deductible income/(expenses) and other permanent items
• adjustments in respect of previous financial year
• losses not currently treated as being recoverable in future periods1
• losses now being treated as being recoverable in future periods2
• exceptional US tax credit3
• changes in tax rate
• tax rates below/(above) the UK rate applied on overseas earnings4
Total tax charge
2021
£M
283
(26)
257
(49)
---
7
---
---
7
---
5
(30)
2020
£M
296
(28)
268
(51)
(4)
4
(3)
8
–
1
(6)
(51)
1 The Group incurs expenses in jurisdictions where it does not currently expect to be able to recover these amounts against future taxable profits. This has the effect of increasing
the Group’s overall effective tax rate.
2 Where the Group now reasonably believes it is able to recover losses not previously expected to be recovered against future taxable profits these losses are recognised. This has
3
the effect of decreasing the Group’s overall effective tax rate.
In the year ending 31 March 2021, the Group’s tax rate was favourably impacted by the release of £25 million of uncertain tax provision, £7 million of which was treated as an
exceptional US tax credit. The remaining £18 million provision release, together with changes in, or increases to, existing provisions and the identification of new uncertain tax items
for which provisions were required is reflected in the line tax rates below/(above) the UK rate applied on overseas earnings.
4 The Group is subject to tax rates in the jurisdictions in which it operates which can be above or below the UK corporation tax rate (the Group’s reference rate). In the year ending
31 March 2021, the Group’s tax rate was favourably impacted by one-off local tax credits in relation to the US and by the net release of uncertain tax provisions mentioned above.
Analysis of exceptional tax items
An analysis of tax charged or credited on adjusting items and exceptional tax items within continuing operations is set out below:
CONTINUING OPERATIONS
Exceptional items
Restructuring costs
Exploration of potential separation of the business
Historical legal matters
Primary Products’ savoury business exit
Exceptional items
Amortisation of acquired intangibles
Total adjusting items
Exceptional tax item
US tax credit
Total exceptional tax item
Total continuing operations
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
NOTES
PRE-TAX
£M
TAX CREDIT
£M
PRE-TAX
£M
TAX CREDIT/
(CHARGE)
£M
8
8
18
4
4
4
(20)
(19)
(3)
---
(42)
(10)
(52)
---
---
5
2
1
---
8
3
11
7
7
(19)
–
–
(5)
(24)
(11)
(35)
–
–
(52)
18
(35)
4
–
–
1
5
3
8
–
–
8
158 TATE & LYLE PLC ANNUAL REPORT 2021
158 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
11. INCOME TAXES CONTINUED
Deferred tax
The movements in deferred tax assets and liabilities during the year were as follows:
At 1 April 2019
(Charged)/credited to the income statement
• underlying
• exceptional
Credited to other comprehensive income
(Charged)/credited directly to equity
Currency translation differences
At 31 March 2020
Credited/(charged) to the income statement
• underlying
• exceptional
Charged to other comprehensive income
Credited/(charged) directly to equity
Acquisitions/disposals
Currency translation differences
At 31 March 2021
CAPITAL
ALLOWANCES
IN EXCESS OF
DEPRECIATION
£M
RETIREMENT
BENEFIT
OBLIGATIONS
£M
SHARE-
BASED
PAYMENTS
£M
TAX LOSSES
£M
(109)
(12)
2
–
–
(4)
(123)
24
2
---
---
---
8
(89)
4
(1)
–
39
–
1
43
(1)
---
(13)
---
---
(3)
26
5
–
–
–
(1)
–
4
1
---
---
1
---
---
6
17
4
–
–
–
(1)
20
(6)
---
---
---
---
---
14
OTHER1
£M
43
TOTAL
£M
(40)
(3)
–
–
2
2
44
(2)
---
---
(3)
(4)
(4)
31
(12)
2
39
1
(2)
(12)
16
2
(13)
(2)
(4)
1
(12)
1 Other deferred tax items include temporary differences arising from accounting provisions where the timing of the tax deduction is different from the timing of accounting
recognition, and business combinations.
Deferred tax assets and liabilities are offset where there is a legally enforceable right of offset and there is an intention to net settle
the balances. After taking these offsets into account, the net position of £12 million liability (2020 – £12 million liability) is presented as
a £32 million deferred tax asset (2020 – £30 million asset) and a £44 million deferred tax liability (2020 – £42 million liability) in the Group’s
statement of financial position.
Unrecognised deferred tax asset/liabilities
No deferred tax assets have been recognised in respect of tax losses of £787 million (2020 – £786 million) as there is uncertainty as to
whether taxable profits against which these assets may be recovered, will be available. In the year ended 31 March 2021, no tax losses
expired (2020 – £nil). Tax losses amounting to £7 million (2020 – £10 million) will expire within five years. The remaining tax losses have
no expiry date.
A deferred tax liability of £2 million (2020 – £1 million) has not been recognised in respect of taxable temporary differences associated
with investments in subsidiaries as there is control over the timing of the reversal of the temporary differences and it is probable
that the temporary differences will not reverse in the foreseeable future.
Changes in tax rates/tax law
The UK budget 2021 announced on 3 March 2021 included measures to support economic recovery as a result of the ongoing Covid-19
pandemic. These included an increase in the UK’s main corporation tax rate to 25%, which is due to be effective from 1 April 2023. These
changes were not substantially enacted at the balance sheet date and hence have not been reflected in the measurement of deferred tax
balances at the period end. If the Group’s deferred tax balances at the year-end were re-measured at 25%, this would result in a deferred
tax credit of £2.4 million.
There was no impact from the imposition of new taxes.
Tax on items recognised in other comprehensive income
The total tax on other comprehensive income was an expense of £13 million (2020 – £41 million credit). This included charges to deferred
tax on retirement benefit obligations of £13 million (2020 – £39 million credit). The credits recorded in the prior year include the deferred tax
impact of the ‘buy-in’ of the main UK pension scheme described in Note 30. In addition, in the prior year, the Group has recognised current
tax credits of £2 million on retirement benefit obligations.
Tax on items recognised directly in equity
The total tax charge in equity was £1 million (2020 – £2 million credit). This included deferred tax charges relating to financial instruments
of £3 million (2020 – £2 million credit), a deferred tax credit on share-based payments of £1 million (2020 – £1 million charge) and a
£1 million current tax credit on share-based payments (2020 – £1 million credit).
TATE & LYLE PLC ANNUAL REPORT 2021 159
TATE & LYLE PLC ANNUAL REPORT 2021
159
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number
of ordinary shares in issue during the year excluding shares held by the Company and the Employee Benefit Trust to satisfy awards
made under the Group’s share-based incentive plans.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming conversion
of potentially dilutive ordinary shares, reflecting vesting assumptions on employee share plans, as well as the deemed profit
attributable to owners of the Company for any proceeds on such conversions.
The average market price of the Company’s ordinary shares during the year was 679p (2020 – 733p). The dilutive effect of share-based
incentives was 5.2 million shares (2020 – 6.4 million shares).
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
CONTINUING
OPERATIONS
DISCONTINUED
OPERATIONS
TOTAL
OPERATIONS
CONTINUING
OPERATIONS
DISCONTINUED
OPERATIONS
TOTAL
OPERATIONS
Profit attributable to owners of the
Company (£ million)
Weighted average number of ordinary shares
(million) – basic
Basic earnings per share (pence)
Weighted average number of ordinary shares
(million) – diluted
Diluted earnings per share (pence)
253
464.2
54.4p
469.4
53.8p
---
---
---
---
---
253
245
464.2
54.4p
464.2
52.8p
469.4
53.8p
470.6
52.1p
CALCULATION OF AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number of ordinary shares --- basic
Effects of dilution from:
• Sharesave plan
• Performance share plan/Restricted share awards/Group Bonus plan – deferred element
Weighted average number of ordinary shares --- diluted
–
–
–
–
–
245
464.2
52.8p
470.6
52.1p
YEAR ENDED 31 MARCH
2021
MILLION
2020
MILLION
464.2
464.2
---
5.2
0.1
6.3
469.4
470.6
Adjusted earnings per share
A reconciliation between profit attributable to owners of the Company from continuing operations and the equivalent adjusted measure,
together with the resulting adjusted earnings per share measure, can be found below:
CONTINUING OPERATIONS
Profit attributable to owners of the Company
Adjusting items:
• exceptional items
• amortisation of acquired intangible assets
• tax impact of adjusting items
• exceptional US tax credit
Adjusted profit attributable to owners of the Company
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share (pence)
NOTES
8
18
11
8, 11
4
YEAR ENDED 31 MARCH
2021
£M
253
42
10
(11)
(7)
287
2020
£M
245
24
11
(8)
–
272
61.9p
61.2p
58.6p
57.8p
160 TATE & LYLE PLC ANNUAL REPORT 2021
160 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
13. DIVIDENDS ON ORDINARY SHARES
Dividends on the Company’s ordinary shares are recognised when they have been appropriately authorised and are no longer at
the Company’s discretion. Accordingly, interim dividends are recognised when they are paid, and final dividends are recognised
when they are declared following approval by shareholders at the Company’s AGM. Dividends are recognised as an appropriation
of shareholders’ funds.
Dividends on ordinary shares in respect of the financial year:
Per ordinary share:
• interim dividend paid
• final dividend proposed
Total dividend
YEAR ENDED 31 MARCH
2021
PENCE
2020
PENCE
8.8
22.0
30.8
8.8
20.8
29.6
The Directors propose a final dividend for the financial year of 22.0p per ordinary share that, subject to approval by shareholders, will be
paid on 6 August 2021 to shareholders who are on the Register of Members on 25 June 2021.
Dividends on ordinary shares paid in the financial year:
Final dividend paid relating to the prior financial year
Interim dividend paid relating to the financial year
Total dividend paid
YEAR ENDED 31 MARCH
2021
£M
97
40
137
2020
£M
97
40
137
Based on the number of ordinary shares outstanding at 31 March 2021 and the proposed amount, the final dividend for the financial year
is expected to amount to £102 million.
14. INVENTORIES
Inventories are carried at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition
and is calculated using the ‘first in/first out’ or ‘weighted average’ methods, appropriate to the materials and production processes
involved. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred
in marketing, selling and distribution. Provisions are made for any slow-moving, obsolete or defective inventories.
The carrying value of US net corn position inventories designated as hedged items (managed on a group basis for risk management)
in an effective fair value hedge accounting relationship is adjusted by the change in fair value attributable to the hedged risk. (Refer
to Note 2).
Raw materials and consumables
Work in progress
Finished goods
Total11
AT 31 MARCH
2020
£M
232
20
204
456
2021
£M
280
21
231
532
1
Includes a £44 million positive fair value adjustment (2020 – £24 million negative) as a result of certain inventories in the US being designated as hedged items with a fair value
hedging relationship.
Finished goods inventories of £2 million (2020 – £2 million) are carried at net realisable value, this being lower than cost.
In the year ended 31 March 2021, the Group recognised a write-down of inventories totalling £2 million (2020 – £6 million) included in the
cost of inventories.
15. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash held with banks and other short-term highly liquid investments with original maturities
of three months or less and which are subject to an insignificant risk of change in value. The credit rating of short-term highly liquid
investments, other than £7 million (2020 – £nil), is AAA or equivalent (2020 – AAA or equivalent).
Short-term highly liquid investments
Cash at bank
Cash and cash equivalents
AT 31 MARCH
2020
£M
222
49
271
2021
£M
305
66
371
TATE & LYLE PLC ANNUAL REPORT 2021 161
TATE & LYLE PLC ANNUAL REPORT 2021
161
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
15. CASH AND CASH EQUIVALENTS CONTINUED
The carrying amount of cash and cash equivalents was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
AT 31 MARCH
2020
£M
195
15
42
19
271
2021
£M
311
9
19
32
371
16. TRADE AND OTHER RECEIVABLES
A trade receivable is recognised if an amount of consideration that is unconditional is due from the customer (i.e. only the passage of
time is required before payment of the consideration is due). Trade receivables that do not contain a significant financing component
are measured at the transaction price.
The Group applies the simplified approach for measuring expected credit losses prescribed by IFRS 9, which permits the use of the
lifetime expected loss provision for all trade receivables. The Group has established a provision matrix that is based on the historical
rates of default then adjusted for forward-looking factors specific to the debtor and economic environment. The Group considers
a receivable to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts. A receivable is written off when there is no reasonable expectation of recovering the contractual cash flows.
The Group participates in supply-chain financing arrangements. Refer to Note 5 and Note 29.
Trade receivables
Less loss allowance provision
Trade receivables – net
Prepayments and accrued income
Margin deposits
Other receivables
Total
The amounts above do not include non-current other receivables of £1 million (2020 – £nil).
The carrying amount of trade and other receivables was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
AT 31 MARCH
2020
£M
306
(12)
294
16
2
11
323
AT 31 MARCH
2020
£M
227
53
4
39
323
2021
£M
304
(9)
295
14
---
24
333
2021
£M
219
58
10
47
334
The gross amount of receivables, reflecting the maximum exposure to credit risk, is £343 million (2020 – £335 million).
The loss allowance provision for trade receivables as at 31 March 2021 reconciles to the opening loss allowance for that provision as
follows. There was no additional impairment of trade receivables in the year (2020 – £nil). The effect of expected credit loss on other
receivables is not material.
AT 31 MARCH 2021
£M UNLESS OTHERWISE STATED
Expected loss rate %
Gross carrying amount
Loss allowance provision
Expected loss rate %
Gross carrying amount
Loss allowance provision
162 TATE & LYLE PLC ANNUAL REPORT 2021
162 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
CURRENT
30 --- 60 DAYS
PAST DUE
60 --- 90 DAYS
PAST DUE
GREATER
THAN 90 DAYS
PAST DUE
1%
284
2
2%
280
5
0%
12
---
0%
18
–
0%
100%
1
---
7
7
TOTAL
304
9
AT 31 MARCH 2020
1%
100%
1
–
7
7
306
12
16. TRADE AND OTHER RECEIVABLES CONTINUED
At 1 April
Utilisation of provision
Change in loss allowance recognised in the income statement during the year
At 31 March
17. INVESTMENTS IN EQUITIES
FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH
2021
£M
12
(1)
(2)
9
2020
£M
7
–
5
12
Investments in equities comprise financial assets recognised at fair value through profit or loss (FVPL) and financial assets recognised
at fair value through the statement of OCI (FVOCI). Investments in equities do not meet the IFRS 9 criteria for classification at amortised
cost because their cash flows do not represent solely payments of principal and interest. For certain investments the available election
to recognise equity securities as FVOCI has been taken because these investments are held as long-term strategic investments that
are not expected to be sold in the short to medium term. All other investments are recognised at FVPL.
At 1 April 2020
Total gains/(losses)
• in operating profit
• in other comprehensive income
Non-qualified deferred compensation arrangements
Purchases
Disposals
Transfer of investment on acquisition of controlling interest
Currency translation differences
At 31 March 2021
At 1 April 2019
Total gains/(losses)
• in operating profit
• in other comprehensive income
Non-qualified deferred compensation arrangements
Purchases
Disposals
Currency translation differences
At 31 March 2020
FINANCIAL
ASSETS
AT FVPL
£M
FINANCIAL
ASSETS
AT FVOCI
£M
TOTAL
INVESTMENTS
IN EQUITIES
£M
36
27
63
---
---
8
4
(3)
(11)
(5)
29
35
–
–
(2)
5
(4)
2
36
---
3
---
---
---
---
---
30
24
–
2
–
1
–
–
27
---
3
8
4
(3)
(11)
(5)
59
59
–
2
(2)
6
(4)
2
63
On 30 November 2020, the Group acquired the remaining 85% of the shares of Sweet Green Fields it did not already own. The amounts
recognised at FVPL were re-measured at the date of acquisition to fair value resulting in no change in value. The fair value of the previously
held investment has been included in accounting for business combinations. Refer to Note 34.
The non-qualified deferred compensation arrangements refers to a ‘Rabbi Trust’ which is a ‘non-qualified defined contribution’ pension
scheme split between corporate-owned life insurance (COLI) assets (values are determined by the performance of variable investment
sub-accounts, similar to mutual funds, but which are only available within a variable life insurance policy) and other assets invested directly
in mutual funds. This scheme is principally for the highest-paid members of the US salaried pension scheme for compensation above limits
set by the US Internal Revenue Service. These assets of £29 million (2020 – £23 million) do not qualify as IAS 19 pension assets on the basis
that the assets are available to the creditors in the event of the Company’s bankruptcy or insolvency. Movements in these assets were
largely offset by corresponding movements on retirement benefit liabilities. Refer to Note 30.
The carrying value of equity investments was denominated in the following currencies:
US dollar
Sterling
Euro
Total
AT 31 MARCH
2021
£M
51
3
5
59
2020
£M
55
3
5
63
TATE & LYLE PLC ANNUAL REPORT 2021 163
TATE & LYLE PLC ANNUAL REPORT 2021
163
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill arising in a business combination is recognised as an intangible asset and is allocated to the Cash Generating Unit (CGU)
or group of CGUs that is expected to benefit from the synergies of the business combination. Goodwill is carried at cost less any
recognised impairment losses (impairment tested annually).
Acquired intangible assets, principally customer relationships and know-how, were recognised as part of previous business
combinations and are amortised on a straight-line basis over the periods of their expected benefit to the Group, which range from
three to 15 years.
Other intangible assets comprise product development and computer software (including global IS/IT systems) and are amortised on
a straight-line basis over the periods of their expected benefit to the Group. Product development is amortised over five to ten years.
Capitalised costs in respect of core global IS/IT systems included within computer software are being amortised over a period of five
to seven years.
Product development costs incurred on the development, design and testing of new or improved products are capitalised only
when the technical and commercial feasibility of the product has been established and prior to the product going into full production.
Any such assets which have not been brought into use are tested annually for impairment. Research and other related expenditures
are charged to the income statement in the period in which they are incurred.
Changes to intangible assets’ useful economic lives are only made if there is objective evidence that the Group expects to receive economic
benefits from these intangible assets systems over a shorter or longer period.
Cost
At 1 April 2020
Additions at cost
Subsidiaries acquired (provisional)
Disposals and write-offs
Currency translation differences
At 31 March 2021
Accumulated amortisation and impairment
At 1 April 2020
Impairment charge
Amortisation charge
Disposals and write-offs
Currency translation differences
At 31 March 2021
Net book value at 31 March 2021
Cost
At 1 April 2019
Additions at cost
Disposals and write-offs
Currency translation differences
At 31 March 2020
Accumulated amortisation and impairment
At 1 April 2019
Impairment charge
Amortisation charge
Disposals and write-offs
Currency translation differences
At 31 March 2020
Net book value at 31 March 2020
OTHER
ACQUIRED
INTANGIBLES
£M
TOTAL
ACQUIRED
INTANGIBLES
£M
OTHER
INTANGIBLE
ASSETS
£M
GOODWILL
£M
TOTAL
£M
212
---
40
---
(16)
236
10
---
---
---
(2)
8
228
204
---
18
---
(9)
213
179
---
10
---
(9)
180
33
416
---
58
---
(25)
449
189
---
10
---
(11)
188
261
210
200
410
–
–
2
–
–
4
–
–
6
212
204
416
320
19
---
(4)
(26)
309
207
5
23
(4)
(15)
216
93
291
25
(6)
10
320
736
19
58
(4)
(51)
758
396
5
33
(4)
(26)
404
354
701
25
(6)
16
736
12
–
–
–
(2)
10
202
165
177
182
359
–
11
–
3
179
25
–
11
–
1
189
227
1
24
(6)
6
207
113
1
35
(6)
7
396
340
At 31 March 2021, the carrying value of other intangible assets is represented by product development of £31 million (2020 – £40 million),
computer software of £62 million (2020 – £68 million) and assets under construction of £nil (2020 – £5 million).
164 TATE & LYLE PLC ANNUAL REPORT 2021
164 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
18. GOODWILL AND OTHER INTANGIBLE ASSETS CONTINUED
Goodwill
The carrying amount of goodwill is allocated to groups of CGUs as follows:
Allocated by operating segment
Food & Beverage Solutions
Primary Products
Total
FINANCIAL STATEMENTS
AT 31 MARCH
2020
£M
171
31
202
2021
£M
200
28
228
Impairment tests carried out during the year
As is required, goodwill is tested annually. For both the goodwill allocated to Food & Beverage Solutions and Primary Products cash-
generating units, the recoverable amounts were calculated based on value-in-use.
The key assumptions in the value-in-use model are derived from the Group’s Board-approved five-year plan with the most sensitive
assumptions being: 1) operating profit growth rate, 2) discount rates, and 3) long-term growth rates.
The operating profit growth rate used to estimate the future economic performance is based on estimates from past performance, and
the Group’s five-year strategic plan, which incorporates the next year’s annual forecast. A 1% decrease in the growth rate across the five-
year cash flows would decrease headroom by 9% and 8% in the Food & Beverage Solutions and Primary Products models respectively.
Based on the risk profile of the assets tested, cash flows were discounted using a pre-tax rate of 9.4% and 8.3% in the Food & Beverage
Solutions and Primary Products models respectively (2020 – 9.3% and 8.1%). The long-term nominal growth rate after year five does not
exceed 2%, reflecting a conservative long-term assumption for the Food & Beverage Solutions and Primary Products markets respectively.
At the time of performing the test, very significant headroom existed for each of the two cash-generating units to which goodwill is
allocated and there was no reasonable scenario in which impairment would be required.
Acquisitions completed during the year ended 31 March 2021 were reviewed for impairment. The carrying values were not more than their
fair value less costs of disposal, and accordingly no impairment was recorded.
Impairment charge
No impairment charges in relation to goodwill have been recognised in the current financial year (2020 – £nil).
Possibility of impairment in the near future
As explained above, at the time of carrying out the annual impairment test, there were no reasonably possible changes in assumptions
that would give rise to an impairment loss now or during the coming year.
19. PROPERTY, PLANT AND EQUIPMENT
Land and buildings mainly comprise manufacturing sites, application laboratories and administrative facilities. Plant and machinery
mainly comprise equipment used in the manufacturing and operating process. Assets in the course of construction comprise property,
plant and equipment which is in the process of being completed and not ready for use. Property, plant and equipment is stated at
historical cost less accumulated depreciation and impairment. Property, plant and equipment is reviewed for impairment when any
changes in circumstances indicate that their carrying amounts may not be recoverable.
Useful economic lives, applied on a straight-line basis, are as follows:
• Freehold land
• Freehold buildings
• Leasehold improvements
• Plant and machinery
No depreciation
20 to 50 years
Up to the length of the lease
3 to 28 years
TATE & LYLE PLC ANNUAL REPORT 2021 165
TATE & LYLE PLC ANNUAL REPORT 2021
165
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
19. PROPERTY, PLANT AND EQUIPMENT CONTINUED
LAND
AND BUILDINGS
£M
PLANT AND
MACHINERY
£M
ASSETS IN THE
COURSE OF
CONSTRUCTION
£M
Cost
At 1 April 2020
Additions at cost
Subsidiaries acquired
Transfers on completion
Disposals and write-offs
Currency translation differences
At 31 March 2021
Accumulated depreciation and impairment
At 1 April 2020
Depreciation charge
Impairment charge
Disposals and write-offs
Currency translation differences
At 31 March 2021
Net book value at 31 March 2021
Cost
At 1 April 2019
Additions at cost
Transfers on completion
Disposals and write-offs
Currency translation differences
At 31 March 2020
Accumulated depreciation and impairment
At 1 April 2019
Depreciation charge
Impairment charge
Disposals and write-offs
Currency translation differences
At 31 March 2020
Net book value at 31 March 2020
694
1
9
19
(7)
(62)
654
348
23
3
(6)
(32)
336
318
2 736
15
11
101
(37)
(262)
2 564
1 984
125
---
(35)
(186)
1 888
676
647
2 540
5
17
(1)
26
694
307
27
–
(1)
15
348
346
18
84
(7)
101
2 736
1 798
118
1
(7)
74
1 984
752
92
139
1
(120)
(1)
---
111
---
---
---
---
---
---
111
51
142
(101)
–
–
92
–
–
–
–
–
–
92
TOTAL
£M
3 522
155
21
---
(45)
(324)
3 329
2 332
148
3
(41)
(218)
2 224
1 105
3 238
165
–
(8)
127
3 522
2 105
145
1
(8)
89
2 332
1 190
Amounts relating to right-of-use assets under IFRS 16, which are included in the amounts above, are presented in more detail in Note 20.
In the consolidated statement of cash flows, cash outflows relating to purchase of property, plant and equipment are lower than the amount
of additions in this table primarily due to the inclusion of right-of-use assets in the figures above. The payment profile of right-of-use assets
will be in line with the associated lease contracts.
20. LEASES
All leases where the Group is the lessee and the Group has the right to control the use of the identified asset are recognised in the
statement of financial position (with the exception of short-term and low-value leases). The Group’s leases principally comprise
railcars, properties and other miscellaneous leases such as motor vehicles or machinery. At the commencement date of the lease,
the Group recognises lease liabilities measured at the present value of future lease payments. In calculating the present value of
lease payments, the Group uses the incremental borrowing rate at the lease commencement date.
The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost including
the amount of lease liabilities recognised and initial direct costs incurred less any incentives granted by the lessor. Right-of-use assets
are subject to impairment. Right-of-use assets are depreciated over the shorter of the lease term and the useful life of the right-of-
use assets, unless there is a transfer of ownership or purchase option which is reasonably certain to be exercised at the end of the
lease term, in which case depreciation is over the useful life of the underlying asset.
Leases of buildings usually have lease terms between 1 and 16 years, while plant and machinery generally have lease terms between
1 and 20 years. The Group also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment
with low value (typically below US$5,000). The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition
exemptions for these leases and recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
166 TATE & LYLE PLC ANNUAL REPORT 2021
166 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
20. LEASES CONTINUED
The movements in the carrying value of the Group’s right-of-use assets are summarised as follows:
FINANCIAL STATEMENTS
Cost
At 1 April 2019
Additions to right-of-use assets
Depreciation charge
Currency translation differences
At 31 March 2020
Additions to right-of-use assets
Depreciation charge
Impairment
Currency translation differences
At 31 March 2021
The statement of profit or loss shows the following amounts relating to leases:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Expense relating to leases of low-value assets
Expense relating to variable lease payments not included in the measurement of lease liability
Income from sub-leasing right-of-use assets
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
TOTAL
£M
51
3
(7)
1
48
---
(7)
(2)
(3)
36
108
14
(24)
4
102
14
(22)
---
(9)
85
159
17
(31)
5
150
14
(29)
(2)
(12)
121
YEAR ENDED 31 MARCH
2021
£M
29
6
---
1
---
(1)
35
2020
£M
31
7
–
2
–
(1)
39
The total cash outflow for leases in the year ended 31 March 2021 was £36 million (2020 – £37 million), excluding cash outflow of £1 million
(2020 – £2 million) relating to leases of low-value items. The movement in the lease liability balances is shown in Note 25 and the
undiscounted maturity is shown in Note 29.
The Group has several lease contracts that include extension and termination options. The Group has estimated that the potential future
lease payments, should it exercise the extension option, would result in an increase in lease liability of £1 million (2020 – £1 million).
The future cash outflows relating to leases that have not yet commenced are disclosed in Note 33.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. These options are negotiated
by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management
exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
The Group has an arrangement in respect of an energy procurement contract and related infrastructure which has not been recognised
as an IFRS 16 lease because the Group has determined that it does not have the right to direct the use of the related asset for the following
reasons: 1) the Group did not design the asset (pipeline), 2) the amount of power to be transported is predetermined in the contract, 3)
the gas supplier operates and maintains the pipeline, and 4) the Group has no rights to change how the pipeline is used.
TATE & LYLE PLC ANNUAL REPORT 2021 167
TATE & LYLE PLC ANNUAL REPORT 2021
167
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
21. INVESTMENTS IN JOINT VENTURES
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets
of the arrangement. Investments in joint ventures are accounted for under the equity method. They are initially recognised at cost,
which includes transaction costs. Subsequently, the Group’s share of the profit or loss, other comprehensive income and net assets
are shown on one line of the relevant primary financial statements, until the date on which joint control ceases. Distributions received
from the investee reduce the carrying amount of the investment.
The Group’s material joint ventures are Almidones Mexicanos S.A. de C.V. (Almex) and DuPont Tate & Lyle Bio Products Company, LLC
(Bio-PDO) (refer to Note 37). These joint ventures complement the Group’s wholly owned activities. Almex produces and distributes
corn-based products and Bio-PDO produces bio-based 1,3 – propanediol (Bio-PDO).
The joint ventures have share capital consisting of ordinary shares, which are held directly by the Group (and its joint venture partners)
and are private companies. No quoted market price is available for their shares. There are no contingent liabilities relating to the Group’s
interest in the joint ventures.
The movements in the carrying value of the Group’s investment in joint ventures are summarised as follows:
At 1 April
Share of profit after tax of joint ventures – total operations
Other comprehensive expense (including foreign exchange)
Dividends paid
Other movements (including contributions)
At 31 March
NOTE
23
YEAR ENDED 31 MARCH
2021
£M
91
26
(6)
(4)
(3)
104
2020
£M
102
28
(3)
(35)
(1)
91
The information set out below reflects the amounts presented in the financial statements of the joint ventures (and not the Group’s share
of those amounts) adjusted for differences in accounting policies between the Group and the joint ventures to make it consistent with the
Group’s accounting policies. The statutory reporting date of Almex is 31 December due to local statutory requirements, Bio-PDO’s statutory
reporting date is also 31 December, therefore both results are consolidated on the basis of management accounts for the year to 31 March.
Income statement
Revenue
Depreciation and amortisation
Other expense
Net finance expense
Profit before tax
Income tax expense
Profit for the year from total operations
Other comprehensive expense (including foreign exchange)
Total comprehensive income/(expense)
Dividends
Revenue
Depreciation and amortisation
Other expense
Net finance expense
Profit before tax
Income tax expense
Profit for the year from total operations
Other comprehensive (expense)/income (including foreign exchange)
Total comprehensive income
Dividends
168 TATE & LYLE PLC ANNUAL REPORT 2021
168 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
ALMEX
£M
586
(2)
(518)
(1)
65
(17)
48
(4)
44
(6)
ALMEX
£M
654
(2)
(583)
(1)
68
(20)
48
(10)
38
(50)
YEAR ENDED 31 MARCH 2021
BIO-PDO
£M
51
(9)
(37)
---
5
(1)
4
(8)
(4)
(8)
TOTAL
£M
637
(11)
(555)
(1)
70
(18)
52
(12)
40
(14)
YEAR ENDED 31 MARCH 2020
BIO-PDO
£M
92
(7)
(75)
–
10
(3)
7
4
11
(27)
TOTAL
£M
746
(9)
(658)
(1)
78
(23)
55
(6)
49
(77)
21. INVESTMENTS IN JOINT VENTURES CONTINUED
Statement of financial position
Assets
Non-current assets
Cash and cash equivalents
Other current assets
Liabilities
Non-current liabilities
Current borrowings
Other current liabilities
Net assets
Assets
Non-current assets
Cash and cash equivalents
Other current assets
Liabilities
Non-current liabilities
Current borrowings
Other current liabilities
Net assets
FINANCIAL STATEMENTS
AT 31 MARCH 2021
ALMEX
£M
BIO-PDO
£M
TOTAL
£M
48
7
200
255
16
47
65
128
127
53
19
18
90
---
---
9
9
81
101
26
218
345
16
47
74
137
208
AT 31 MARCH 2020
ALMEX
£M
BIO-PDO
£M
TOTAL
£M
45
5
212
262
10
116
45
171
91
66
21
16
103
–
–
13
13
90
111
26
228
365
10
116
58
184
181
Reconciliation of summarised financial information to the Group’s investments in joint ventures
Opening net assets at 1 April 2020
Profit for the year from total operations
Other comprehensive expense (including foreign exchange)
Dividends
Other movements (including contributions)
Closing net assets at 31 March 2021
Interest in joint venture (%)
Carrying value at 31 March 2021
Opening net assets at 1 April 2019
Profit for the year from total operations
Other comprehensive (expense)/income (including foreign exchange)
Dividends
Other movements (including contributions)
Closing net assets at 31 March 2020
Interest in joint venture (%)
Carrying value at 31 March 2020
ALMEX
£M
BIO-PDO
£M
TOTAL
£M
91
48
(4)
---
(8)
127
50%
64
103
48
(10)
(42)
(8)
91
50%
46
90
4
(8)
(8)
3
81
50%
40
100
7
4
(27)
6
90
50%
45
181
52
(12)
(8)
(5)
208
104
203
55
(6)
(69)
(2)
181
91
TATE & LYLE PLC ANNUAL REPORT 2021 169
TATE & LYLE PLC ANNUAL REPORT 2021
169
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
22. SHARE CAPITAL AND SHARE PREMIUM
At 1 April 2019 and 2020
Allotted under share option schemes
At 31 March 2021
ORDINARY SHARE
CAPITAL
£M
SHARE
PREMIUM
£M
117
---
117
406
1
407
TOTAL
£M
523
1
524
Ordinary shares carry the right to participate in dividends and each share entitles the holder to one vote on matters requiring
shareholder approval.
Allotted, called up and fully paid equity share capital
At 1 April
Allotted under share option schemes
At 31 March
* The nominal value of each share is 25 pence.
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
NUMBER OF
SHARES*
COST
£M
NUMBER OF
SHARES*
468 401 671
117
468 345 950
56 722
---
55 721
468 458 393
117
468 401 671
COST
£M
117
–
117
Own shares
Own shares represent the Company’s ordinary shares that are acquired to meet the Group’s expected obligations under share-based
incentive arrangements (refer Note 31). Own shares are held either by the Company in treasury or by an Employee Benefit Trust (EBT)
that was established by the Company. The EBT is included in the consolidated accounts.
Movements in own shares held were as follows:
At 1 April
Purchased in the market1:
• into the EBT
Transferred to employees:
• from treasury
• from the EBT
At 31 March
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
NUMBER
OF SHARES
5 122 967
COST
£M
NUMBER
OF SHARES
38
5 251 587
---
---
(1 155 773)
3 967 194
---
1 635 490
---
(8)
30
(805 138)
(958 972)
5 122 967
COST
£M
38
13
(6)
(7)
38
1
IFRS 2 permits net settled share-based payments to be treated as equity-settled in full, if certain criteria were met, rather than the tax element being cash-settled. The amount
transferred to the tax authorities in the year was £5 million (2020 – £9 million) and has been recognised within financing activities in the consolidated statement of cash flows.
Shares held in the EBT
Total
NUMBER
OF SHARES
3 967 194
3 967 194
AT 31 MARCH 2021
MARKET
VALUE
£M
% OF
OUTSTANDING
SHARE CAPITAL
30
30
0.8%
0.8%
NUMBER
OF SHARES
5 122 967
5 122 967
AT 31 MARCH 2020
MARKET
VALUE
£M
% OF
OUTSTANDING
SHARE CAPITAL
34
34
1.1%
1.1%
170 TATE & LYLE PLC ANNUAL REPORT 2021
170 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
23. OTHER RESERVES
At 1 April 2019
Cash flow hedges:
• fair value loss in the year
• hedging gain transferred to inventory
• tax effect of the above items
FVOCI financial assets:
• fair value gain in the year
Currency translation differences:
• gain on currency translation of foreign operations
• fair value loss on net investment hedges
Share of other comprehensive income/(expense)
of joint ventures
At 31 March 2020
Cash flow hedges:
• fair value gain in the year
• hedging loss transferred to inventory
• tax effect of the above items
FVOCI financial assets:
• fair value gain in the year
Currency translation differences:
• loss on currency translation of foreign operations
• fair value gain on net investment hedges
Share of other comprehensive expense of joint
ventures
At 31 March 2021
FINANCIAL STATEMENTS
HEDGING
RESERVE
£M
FVOCI
RESERVE
£M
CURRENCY
TRANSLATION
RESERVE
£M
PRE-IFRS
RESERVES
£M
1
(1)
(6)
2
–
–
–
2
(2)
1
12
(3)
---
---
---
(4)
4
(1)
113
104
–
–
–
2
–
–
–
1
---
---
---
3
---
---
---
4
–
–
–
–
46
(18)
(5)
136
---
---
---
---
(141)
39
(2)
32
–
–
–
–
–
–
–
104
---
---
---
---
---
---
---
104
TOTAL
£M
217
(1)
(6)
2
2
46
(18)
(3)
239
1
12
(3)
3
(141)
39
(6)
144
Gains or losses relating to the effective portion of hedging instruments where cash flow hedge accounting is applied are recognised in
OCI within the hedging reserve. Amounts accumulated in the hedging reserve are reclassified in the periods when the hedged item affects
the income statement. For a non-financial asset (such as inventory), the hedging gains and losses are transferred to the cost of inventory
and then subsequently recognised in the income statement or else recognised immediately in the income statement.
The FVOCI reserve includes cumulative gains or losses on FVOCI assets including investments in equity.
The currency translation reserve includes:
• Gains/losses on currency translation of foreign operations: on consolidation, the results of foreign operations are translated into pounds
sterling at the average rate of exchange for the period and their assets and liabilities are translated into pounds sterling at the exchange
rate ruling at the period-end date. Currency translation differences arising on consolidation are recognised in other comprehensive
income and taken to the currency translation reserve.
• Fair value gains/losses on net investment hedges: a net investment hedge is the hedge of the currency exposure on the retranslation
of the Group’s net investment in a foreign operation. Net investment hedges are accounted for by recognising changes in the fair value
of the hedging instrument and, to the extent that the hedge is effective, recognised in other comprehensive income. Further detail
on net investment hedges can be found in Note 28.
The pre-IFRS reserve relates to amounts previously recorded in reserves prior to transition to IFRS and relates predominantly to
merger reserves.
TATE & LYLE PLC ANNUAL REPORT 2021 171
TATE & LYLE PLC ANNUAL REPORT 2021
171
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
24. TRADE AND OTHER PAYABLES
Trade payables are predominantly short-term and are initially recognised at fair value, which is generally the invoice amount. The effects
of the time-value of money are not material.
Current payables
Trade payables
Social security
Accruals and deferred income
Margin payables
Other payables
Total
There were no non-current other payables as at 31 March 2021 (2020 – £nil).
The carrying amount of trade and other payables was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
25. BORROWINGS
AT 31 MARCH
2020
£M
250
6
101
–
13
370
AT 31 MARCH
2020
£M
268
58
21
23
370
2021
£M
267
12
108
16
28
431
2021
£M
287
67
31
46
431
Borrowings are initially measured at fair value, net of transaction costs incurred, which is generally the amount of proceeds received.
Borrowings are subsequently measured at amortised cost using the effective interest rate method, whereby the net proceeds are
gradually increased to the amount that will be ultimately settled using a constant rate of interest. This constant rate of return is used
to calculate the amount recognised as interest expense in the income statement.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the period-end date.
The carrying amount of a borrowing may be adjusted where it is a hedged liability in a fair value hedge (refer to Note 28).
Non-current borrowings
2,394,000 6.5% cumulative preference shares of £1 each
Industrial Revenue Bonds 2023–2036 (US$70,100,000)
US Private Placement Notes1
Bank loans (unsecured)
Total loan notes
Lease liabilities
Total non-current borrowings
AT 31 MARCH
2020
£M
2
56
480
3
541
141
682
2021
£M
2
51
577
---
630
116
746
1 At 31 March 2021, the US Private Placement Notes consisted of US$800 million (2020 – US$600 million) that will mature from calendar year 2023 to 2032 (2020 – 2023 to 2031)
and are net of deferred arrangement fees.
172 TATE & LYLE PLC ANNUAL REPORT 2021
172 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
25. BORROWINGS CONTINUED
Current borrowings
Short-term loans and facilities
Total loan notes
Lease liabilities
Total current borrowings
FINANCIAL STATEMENTS
AT 31 MARCH
2020
£M
10
10
30
40
2021
£M
15
15
27
42
On 6 August 2020, the Group issued a US$200 million (£152 million) debt private placement comprising US$100 million 2.91% notes
maturing in 2030 and US$100 million 3.01% notes maturing in 2032.
In the prior year, the Group refinanced its maturing £200 million 6.75% bond principally using the proceeds of drawing down
US$100 million (£77 million) 3.31% notes due 2029 and US$100 million (£77 million) 3.41% notes due 2031, with the remaining amount
made up from cash balances.
Effective interest rates
The effective interest rates of the Group’s borrowings are as follows:
US$25m 3.83% US Private Placement Notes 2023
US$180m 4.06% US Private Placement Notes 2025
US$100m 4.16% US Private Placement Notes 2027
US$95m US Private Placement FRN1 2023
2,394,000 6.5% cumulative preference shares of £1 each
Lease liabilities
Industrial Revenue Bonds 2023–2036 (US$70,100,000)2
US$100m 3.31% US Private Placement Notes 2029
US$100m 3.41% US Private Placement Notes 2031
US$100m 2.91% US Private Placement Notes 2030
US$100m 3.01% US Private Placement Notes 2032
Bank loans (unsecured) 3
YEAR ENDED 31 MARCH
2021
3.8%
4.1%
4.2%
1.7%
6.5%
3.6%
0.2%
3.3%
3.4%
2.9%
3.0%
---
2020
3.8%
4.1%
4.2%
3.4%
6.5%
3.8%
1.6%
3.3%
3.4%
–
–
5.2%
1 Floating rate note based on US six-month LIBOR + 1.47%.
2 As part of these arrangements the Group is required to obtain credit insurance from certain banks. The annual premium cost of the credit insurance is approximately 1% of the
principal which is not included in the effective interest rate disclosed above.
In the prior year the floating rate loan based on Brazil CDI + 1.58%.
3
Short-term loans
Short-term loans mature within the next 12 months. Short-term loans are arranged at floating rates of interest and expose the Group
to cash flow interest rate risk. The effective interest rate of short-term loans is 5.8% (2020 – 5.8%).
Credit facilities and arrangements
During May 2020, the Group extended the maturity of its committed but undrawn US$800 million revolving credit facility by one year to
March 2025. In March 2021, US$700 million of this facility was then extended for a further year to March 2026. The financial covenant
thereon is described in the ‘Liquidity risk management’ section of Note 29. At 31 March 2021, the facility had a sterling equivalent value
of £579 million (2020 – £642 million) and was undrawn.
The facility incurs commitment fees at market rates prevailing when the facility was arranged. The lenders have the right, but not the
obligation, to cancel their commitments in the event of specified events of default (principally an expected covenant breach or insolvency
of the Group).
TATE & LYLE PLC ANNUAL REPORT 2021 173
TATE & LYLE PLC ANNUAL REPORT 2021
173
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
26. CHANGE IN WORKING CAPITAL AND OTHER NON-CASH MOVEMENTS
Increase in inventories
(Increase)/decrease in receivables
Increase in payables
Movement in derivative financial instruments (excluding debt-related derivatives)
Increase/(decrease) in provisions for other liabilities and charges
Change in working capital
Other non-cash movements
Change in working capital and other non-cash movements
27. NET DEBT
Reconciliation of the movement in cash and cash equivalents to the movement in net debt:
YEAR ENDED 31 MARCH
2021
£M
(27)
(38)
40
(20)
12
(33)
9
(24)
2020
£M
(16)
11
19
(7)
(8)
(1)
3
2
YEAR ENDED 31 MARCH
Net debt at beginning of the year
Net increase/(decrease) in cash and cash equivalents
Net (increase)/decrease in borrowings and leases
Decrease in net debt resulting from cash flows
Currency translation differences1
Fair value and other movements
Subsidiaries acquired
Leases non-cash movements
Decrease in net debt in the year
Net debt at end of the year
2021
£M
(451)
135
(113)
22
39
---
(7)
(20)
34
(417)
1
Includes the foreign currency element of the fair value movement on cross currency swaps (2020 only) and the translation of foreign denominated borrowings.
Movements in the Group’s net debt were as follows:
At 1 April 2019
Movement from cash flows
Currency translation differences1
Fair value and other movements
Leases non-cash movements
At 31 March 2020
Movement from cash flows
Currency translation differences1
Subsidiaries acquired
Fair value and other movements
Leases non-cash movements
At 31 March 2021
CASH AND CASH
EQUIVALENTS
£M
BORROWINGS AND
LEASE LIABILITIES
£M
DEBT-RELATED
DERIVATIVES
£M
285
(17)
3
–
–
271
135
(35)
---
---
---
371
(764)
85
(24)
5
(24)
(722)
(113)
74
(7)
---
(20)
(788)
(25)
29
(1)
(3)
–
–
---
---
---
---
---
---
2020
£M
(504)
(17)
114
97
(22)
2
–
(24)
53
(451)
TOTAL
£M
(504)
97
(22)
2
(24)
(451)
22
39
(7)
---
(20)
(417)
1
Includes the foreign currency element of the fair value movement on cross currency swaps (2020 only) and the translation of foreign denominated borrowings.
At 31 March 2021, total liabilities arising from financing activities were £788 million (2020 – £722 million).
At 31 March 2021, the Group held no debt-related derivative financial instruments (i.e. there were no currency and interest rate swaps
used to manage the currency and interest rate profile of the Group’s net debt). Such derivative financial instruments matured in November 2019
on the refinancing of the £200 million bond and no additional debt-related derivative financial instruments were entered into after that
date. As such, at 31 March 2021 and 31 March 2020, the Group had no debt-related derivative financial instruments.
174 TATE & LYLE PLC ANNUAL REPORT 2021
174 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
27. NET DEBT CONTINUED
Net debt is denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
28. FINANCIAL INSTRUMENTS
FINANCIAL STATEMENTS
2021
£M
(440)
(1)
5
19
AT 31 MARCH
2020
£M
(488)
14
13
10
(417)
(451)
Financial instruments comprise investments (other than investments in joint ventures), trade receivables, cash and cash equivalents,
payables and accruals, borrowings and derivative financial instruments.
Derivatives are measured at fair value with any related transaction costs expensed as incurred. The treatment of changes in the value
of derivatives depends on their use as explained below.
Fair value hedges Hedging relationships are classified as fair value hedges where the hedging instrument hedges the exposure to
changes in the fair value of a recognised asset or liability that is attributable to a particular risk. Where the hedging relationship is
classified as a fair value hedge, the carrying amount of the hedged asset or liability is adjusted by, or a firm commitment is recorded
for, the change in its fair value attributable to the hedged risk only and the resulting gain or loss is recognised in the income statement
where, to the extent that the hedge is effective, it offsets the fair value gain or loss on the hedging instrument.
As explained in Note 2, for the US net corn position, a group of items representing a net position and consisting of items that
individually are eligible hedged items and which are managed together on a group basis for risk management can be designated in
a hedging relationship as a net position hedged item. As such, the Group has designated the components of its US net corn position
into two effective fair value hedge accounting relationships (net corn (futures and basis) and net co-products) whereby the hedged
item is a group of items with offsetting risk positions.
Net investment hedges A net investment hedge is the hedge of the currency exposure on the retranslation of the Group’s net
investment in a foreign operation. Net investment hedges are accounted for similarly to cash flow hedges. Changes in the fair value
of the hedging instrument are, to the extent that the hedge is effective, recognised in other comprehensive income. In the event that
the foreign operation is disposed of, the cumulative fair value gain or loss recognised in other comprehensive income is transferred
to the income statement where it is included in the gain or loss on disposal of the foreign operation.
Cash flow hedges Derivatives are also held to hedge the uncertainty in timing or amount of future forecast cash flows. Such derivatives
are classified as being part of cash flow hedge relationships. For an effective hedge, gains and losses from changes in the fair value
of derivatives are recognised in equity. Cost of hedging, where material and opted for, is recorded in a separate account within equity.
Any ineffective elements of the hedge are recognised in the income statement. Ineffectiveness may occur if there are changes to the
expected timing of the hedged transaction. If the hedged cash flow relates to a non-financial asset, the amount accumulated in equity
is subsequently included within the carrying value of that asset. For other cash flow hedges, amounts deferred in equity are taken to
the income statement at the same time as the related cash flow. When a derivative no longer qualifies for hedge accounting, any
cumulative gain or loss remains in equity until the related cash flow occurs. When the cash flow takes place, the cumulative gain
or loss is taken to the income statement. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss is taken
to the income statement immediately.
Financial instruments by category
Set out below is a comparison by category of carrying values and fair values of the Group’s financial assets and financial liabilities:
Investments in equities
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Forward foreign exchange contract
Commodity derivative net assets
Other net financial assets
• commodity pricing contracts
NOTES
17
16
15
24
25
AMORTISED
COST/CASH
£M
DERIVATIVES IN A
HEDGING
RELATIONSHIP
£M
HEDGED ITEM
(FAIR VALUE
HEDGE)
£M
INVESTMENTS IN
EQUITIES
£M
TOTAL CARRYING
VALUE
£M
FAIR VALUE
£M
AT 31 MARCH 2021
---
320
371
(419)
(788)
---
---
---
---
---
---
---
---
---
15
---
---
---
---
---
---
---
---
6
59
---
---
---
---
---
---
---
59
320
371
(419)
(788)
---
15
6
59
320
371
(419)
(815)
---
15
6
TATE & LYLE PLC ANNUAL REPORT 2021 175
TATE & LYLE PLC ANNUAL REPORT 2021
175
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
28. FINANCIAL INSTRUMENTS CONTINUED
Financial instruments by category continued
Investments in equities
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Forward foreign exchange contract
Commodity derivative net liabilities
Other net financial assets
• commodity pricing contracts
NOTES
17
16
15
24
25
AMORTISED
COST/CASH
£M
DERIVATIVES IN
A HEDGING
RELATIONSHIP
£M
HEDGED ITEM
(FAIR VALUE
HEDGE)
£M
INVESTMENTS IN
EQUITIES
£M
TOTAL
CARRYING
VALUE
£M
FAIR VALUE
£M
AT 31 MARCH 2020
–
307
271
(364)
(722)
–
–
–
–
–
–
–
–
1
(17)
–
–
–
–
–
–
–
–
48
63
–
–
–
–
–
–
–
63
307
271
(364)
(722)
1
(17)
63
307
271
(364)
(727)
1
(17)
48
48
Investments in equities comprise financial assets recognised at fair value through the income statement (FVPL), and financial assets
recognised at fair value through OCI (FVOCI). Further analysis is provided in Note 17.
Trade and other receivables presented above excludes £14 million (2020 – £16 million) relating to prepayments. Trade and other payables
presented above excludes £12 million (2020 – £6 million) relating to social security.
There are no listed bonds as at 31 March 2021 (2020 – £nil). At that date, the Group held US$800 million US Private Placement Notes with
a carrying value of £577 million (2020 – US$600 million US Private Placement Notes with a carrying value of £480 million) and a fair value
of £604 million, (2020 – £485 million) measured by discounted estimated cash flows based on broker dealer quotations and are categorised
as Level 3 for fair value measurement. The remaining borrowings had a fair value measured by discounted estimated cash flows with an
applicable market quoted yield and are categorised as Level 2 for fair value measurement.
Derivatives assets/(liabilities) and other financial assets/(liabilities) are presented in the statement of financial position as follows:
Non-current derivative financial instruments
Current derivative financial instruments
Other non-current financial assets/(liabilities)
Other current financial assets/(liabilities)
AT 31 MARCH 2021
AT 31 MARCH 2020
ASSETS
£M
LIABILITIES
£M
ASSETS
£M
LIABILITIES
£M
1
23
24
---
32
32
---
(9)
(9)
---
(26)
(26)
1
5
6
–
67
67
(2)
(20)
(22)
–
(19)
(19)
Derivatives are only used for economic hedging purposes and not as speculative investments.
Fair value hedges
In the 2020 financial year, the Group employed interest rate swap contracts to hedge interest rate risks associated with its borrowings.
This was achieved by swapping fixed for floating rates to meet the Group’s risk management objectives. Refer to Note 29. These derivative
financial instruments matured in November 2019 on the refinancing of the £200 million bond and no additional debt-related derivative
financial instruments were entered into after that date. This fair value hedge was therefore discontinued during the prior financial year.
The Group has designated the components of its US net corn position into two effective fair value hedge accounting relationships (net
corn (futures and basis) and net co-products) whereby the hedged item is a group of items with offsetting risk positions. Refer to Note 2.
US NET CORN POSITION (FUTURES AND BASIS) IN EFFECTIVE FAIR VALUE HEDGE ACCOUNTING RELATIONSHIPS
Nominal amounts of corn futures contracts (expressed in millions of bushels)
Gross carrying amount of outstanding hedged items: assets
Gross carrying amount of outstanding hedged items: liabilities
Carrying amount of hedging instrument
Hedge ratio
Change in intrinsic value of outstanding hedging instruments used to determine hedge effectiveness
Change in intrinsic value of outstanding hedging item used to determine hedge effectiveness
Ineffectiveness recognised in profit or loss
2021
£M
(1)bu
88
(71)
3
1:1
7
12
19
AT 31 MARCH
2020
£M
37bu
41
(36)
(4)
1:1
(2)
4
2
176 TATE & LYLE PLC ANNUAL REPORT 2021
176 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
28. FINANCIAL INSTRUMENTS CONTINUED
Fair value hedges continued
US NET CORN POSITION (NET CO-PRODUCTS) IN EFFECTIVE FAIR VALUE HEDGE ACCOUNTING RELATIONSHIPS
Nominal amounts of co-product futures contracts (expressed in metric tonnes)
Gross carrying amount of outstanding hedged items: assets
Gross carrying amount of outstanding hedged items: liabilities
Carrying amount of hedging instrument
Hedge ratio
Change in intrinsic value of outstanding hedging instruments used to determine hedge effectiveness
Change in intrinsic value of outstanding hedging item used to determine hedge effectiveness
Ineffectiveness recognised in profit or loss
FINANCIAL STATEMENTS
2021
£M
---
46
(13)
---
1:1
---
14
14
AT 31 MARCH
2020
£M
–
27
(8)
–
1:1
–
2
2
Net investment hedges
The Group held some currency swaps contracts that matured in November 2019 on the refinancing of the £200 million bond and no
additional debt-related derivative financial instruments were entered into after that date. This net investment hedge was therefore
discontinued during the prior financial year.
The Group employs borrowings to hedge the currency risk associated with its net investments in subsidiaries located in the US and Europe.
The Group’s borrowings designated as net investment hedges are principally in US dollars and are presented in the table below.
BORROWINGS USED TO NET INVESTMENT HEDGE CURRENCY TRANSLATION RISK
Notional principal amounts of borrowings (weighted liability)
Gain/(loss) on translation of borrowings recognised in currency translation reserve
Carrying amount of hedging instrument
Maturity date
Hedge ratio
Change in intrinsic value of outstanding hedging instruments used to determine hedge effectiveness
Change in intrinsic value of outstanding hedging item used to determine hedge effectiveness
Weighted average foreign currency rate for the year (/£1)
Ineffectiveness recognised in profit or loss
Cumulative loss remaining in translation reserve1
2021
£M
363
39
363
AT 31 MARCH
2020
£M
396
(16)
396
Oct 2023-Aug 2032 Oct 2023-Nov 2031
1:1
39
(39)
$1.34
---
(78)
1:1
(16)
16
$1.27
–
(117)
1 Cumulative loss remaining in translation reserve in relation to US Private Placement Notes is £22 million (2020 – £61 million).
In addition, in the year ended 31 March 2021, a weighted average total of £3 million (2020 – £6 million) of the Group’s liabilities were
designated as a hedge of the net investment in the Group’s European operations. Translation of these liabilities taken to reserves was £nil
(2020 – £1 million loss).
Cash flow hedges
The Group employs pricing contracts, principally futures, to hedge cash flow risk associated with forecast purchases and sales of
commodities or purchases of chemicals used in the manufacturing process which are designated as cash flow hedges. The fair value
of these hedging instruments at 31 March 2021 is £5 million asset (2020 – £6 million liability). There was no ineffectiveness recorded
in the current or prior financial year. As at 31 March 2021 the Group also held forward foreign exchange contracts designated as cash flow
hedges with a fair value of £nil (2020 – £1 million assets).
Financial instruments measured at fair value: the fair value hierarchy
Fair value measurements are categorised into three different levels based on the degree to which the inputs used to arrive at the fair
value of the assets and liabilities are observable and the significance of the inputs to the fair value measurement in its entirety, as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can assess at the
measurement date. The prices of equity shares or bonds quoted on the London Stock Exchange are examples of Level 1 inputs.
• Level 2 inputs are those, other than quoted prices included in Level 1 that are observable either directly or indirectly.
• Level 3 inputs are unobservable inputs. The Group generally classifies assets or liabilities as Level 3 when their fair value is determined
using unobservable inputs that individually, or when aggregated with other unobservable inputs, represent more than 10% of the fair
value of the observable inputs of the assets or liabilities. This would include expected future cash flows from budgets and forecasts
the Group has made. Certain elements of the Group’s commodity contract portfolio also fall into this category, as their values include
significant management-derived assumptions.
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level of input that is significant
to the fair value measurement as a whole) at the end of the reporting period.
TATE & LYLE PLC ANNUAL REPORT 2021 177
TATE & LYLE PLC ANNUAL REPORT 2021
177
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
28. FINANCIAL INSTRUMENTS CONTINUED
Financial instruments measured at fair value: the fair value hierarchy continued
The following tables illustrate the Group’s financial assets and liabilities measured at fair value and fair value adjustments due to risks
hedged at 31 March 2021 and 31 March 2020:
Assets at fair value
Financial assets at FVPL
Financial assets at FVOCI
Derivative financial instruments:
• forward foreign exchange contracts
• commodity derivatives
Other financial assets (commodity pricing contracts)1
Assets at fair value
Liabilities at fair value
Derivative financial instruments:
• currency swaps
• commodity derivatives
Other financial liabilities (commodity pricing contracts)1
Liabilities at fair value
1 Fair value adjustments due to risks hedged.
Assets at fair value
Financial assets at FVPL
Financial assets at FVOCI
Derivative financial instruments:
• forward foreign exchange contracts
• commodity derivatives
Other financial assets (commodity pricing contracts)1
Assets at fair value
Liabilities at fair value
Derivative financial instruments:
• commodity derivatives
Other financial liabilities (commodity pricing contracts)1
Liabilities at fair value
1 Fair value adjustments due to risks hedged.
NOTES
LEVEL 1
£M
LEVEL 2
£M
LEVEL 3
£M
TOTAL
£M
AT 31 MARCH 2021
17
17
---
---
---
24
---
24
---
(9)
---
(9)
---
---
---
---
21
21
---
---
---
---
29
30
---
---
11
70
---
---
(26)
(26)
29
30
---
24
32
115
---
(9)
(26)
(35)
NOTES
LEVEL 1
£M
LEVEL 2
£M
LEVEL 3
£M
TOTAL
£M
AT 31 MARCH 2020
17
17
–
–
–
5
–
5
(22)
–
(22)
–
–
1
–
–
1
–
(3)
(3)
36
27
–
–
67
130
–
(16)
(16)
36
27
1
5
67
136
(22)
(19)
(41)
178 TATE & LYLE PLC ANNUAL REPORT 2021
178 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
28. FINANCIAL INSTRUMENTS CONTINUED
Level 3 financial assets
The following table reconciles the movement in the Group’s net financial instruments and fair value adjustments due to risks hedged
classified in Level 3 of the fair value hierarchy:
At 1 April 2019
Income statement:
• prior year amounts settled
• current year net gain/(loss)1
Other comprehensive income
Non-qualified deferred compensation
arrangements (Note 17)
Purchases
Disposals
Currency translation differences
At 31 March 2020
Income statement:
• prior year amounts settled
• current year net gain/(loss)1
Other comprehensive income
Non-qualified deferred compensation
arrangements (Note 17)
Purchases
Disposals
Transfer of investment on acquiring controlling interest
Currency translation differences
At 31 March 2021
1 Unrealised.
COMMODITY
PRICING
CONTRACTS ---
ASSETS
£M
COMMODITY
PRICING
CONTRACTS ---
LIABILITIES
£M
FINANCIAL
ASSETS
AT FVPL
£M
39
(37)
65
–
–
–
–
–
67
(67)
11
---
---
---
---
---
---
11
(2)
2
(16)
–
–
–
–
–
(16)
15
(25)
---
---
---
---
---
---
(26)
35
–
–
–
(2)
5
(4)
2
36
---
---
---
8
4
(3)
(11)
(5)
29
FINANCIAL
ASSETS
AT FVOCI
£M
24
–
–
2
–
1
–
–
TOTAL
£M
96
(35)
49
2
(2)
6
(4)
2
27
114
---
---
3
---
---
---
---
---
30
(52)
(14)
3
8
4
(3)
(11)
(5)
44
The full impact to the income statement of movements in the corn price on the net corn and co-product position is described within the
‘Price risk management’ section of Note 29. The table below describes the valuation techniques in relation to Level 3 financial instruments
and isolates the unobservable inputs.
TYPE
VALUATION TECHNIQUE
Net corn position
(refer to Fair value of
purchases, sales and
inventory of corn-
based products
section in Note 2).
Based on the
Group’s own
assessment of the
commodity, supply
and demand, as well
as expected pricing.
SIGNIFICANT
UNOBSERVABLE INPUTS
SENSITIVITY OF THE FAIR VALUE MEASUREMENT
IN REASONABLE CHANGES TO INPUTS
1. Co-products
1. A 25% increase/(decrease) in the price of co-products
would result in a net increase/(decrease) in fair value
of £14 million (2020 – £6 million) in respect of Level 3
financial instruments.
2. Basis
2. A 50% increase/(decrease) in the cost of basis would
result in a net increase/(decrease) in fair value of
£9 million (2020 – £2 million) in respect of Level 3
financial instruments.
Assets classified as FVOCI are long-term strategic investments that we do not control, nor have significant influence over. The investments
are non-listed and are mainly start-ups or in the earlier stages of their lifecycle. Therefore, fair value has been determined based on the
most recent funding rounds adjusted for indicators of impairment. The fair values assigned to each of the investments have different
significant unobservable inputs. Assets classified as FVPL largely consists of a ‘non-qualified defined contribution’ pension scheme for
which the movements in its assets are largely offset by corresponding movements on retirement benefit liabilities. For more details refer
to Note 17.
As discussed in Note 2, there is significant estimation uncertainty in determining the fair values of the key unobservable inputs. The two
key unobservable inputs are shown in the table above, together with the impact of a reasonably possible change in assumptions on the fair
value of the level 3 financial assets/liabilities only.
In addition to the above, the Group’s FVOCI and FVPL financial assets are sensitive to a number of market and non-market factors.
TATE & LYLE PLC ANNUAL REPORT 2021 179
TATE & LYLE PLC ANNUAL REPORT 2021
179
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. RISK MANAGEMENT
Management of financial risk
The key financial risks faced by the Group are credit risk, liquidity risk and market risks, which include interest rate risk, foreign exchange
risk and certain commodity price risks. The Board regularly reviews these risks and approves written policies covering the use of financial
instruments to manage these risks and sets overall risk limits. The derivative financial instruments approved by the Board of Tate & Lyle
PLC to manage financial risks include: swaps (both interest rate and currency), swaptions, caps, forward rate agreements, foreign
exchange contracts, commodity forward contracts and options, and commodity futures.
The Chief Financial Officer retains overall responsibility for management of financial risk for the Group. Most of the Group’s financing,
interest rate and foreign exchange risk are managed through the Group treasury company, Tate & Lyle International Finance PLC.
Tate & Lyle International Finance PLC arranges funding and manages interest rate, foreign exchange and bank counterparty risks
within limits approved by the Board of Tate & Lyle PLC.
Commodity price risks are managed through the commodity trading functions in the US and Europe. The performance of the commodity
trading function is monitored against its ability to match the Group’s needs for raw materials with purchase contracts, as well as the
Group’s output of co-products with sales contracts. As noted in Note 2, in order to manage the commodity price risk the Group has
designated the components of its US net corn position into two effective fair value hedge accounting relationships (net corn (futures
and basis) and net co-products) whereby the hedged item is a group of items with offsetting risk positions. In addition, the Group applies
a limited level of cash flow hedge accounting to its economic price exposure on the purchase and sales of certain commodities and
purchase of chemicals used in the production process.
Market risks
Foreign exchange management
The Group operates internationally and is exposed to foreign exchange risks arising from commercial transactions (transaction exposure),
and from recognised assets, liabilities and investments in foreign operations (translation exposure).
Transaction exposure
The Group manages foreign exchange transaction risk using economic hedging principles including managing working capital levels and
entering into offsetting arrangements wherever possible. The Group uses limited foreign exchange forward contracts to hedge its exposure
to foreign currency risk in some circumstances. There is no material amount recognised in the statement of financial position or hedging
reserve in the current or prior period.
Translation exposure
The Group manages the foreign exchange exposure to net investments in overseas operations, particularly in the US, by borrowing in
US dollars, which provide a partial match for the Group’s major foreign currency assets. The detail of these net investment hedges is set
out in Note 28.
The following table illustrates only the Group’s sensitivity to the fluctuation of the Group’s major currencies against sterling on its income
statement and other components of equity, assuming that each exchange rate moves in isolation. The income statement impact is due
to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The equity impact
for foreign exchange sensitivity relates to derivative and non-derivative financial instruments hedging the Group’s net investments in its
European and US operations.
Sterling/US dollar 10% change
Sterling/euro 10% change
AT 31 MARCH 2021
AT 31 MARCH 2020
INCOME
STATEMENT -/+
£M
EQUITY -/+
£M
INCOME
STATEMENT -/+
£M
1
---
38
---
1
–
EQUITY -/+
£M
44
–
Interest rate management
The Group has an exposure to interest rate risk, arising principally from changes in US dollar interest rates. In the 2021 and 2020 financial
years, the objective of optimising net finance expense and reducing volatility in reported earnings was achieved by ensuring an optimal
mix of fixed and floating rate debt. The Group retains the option of entering into interest rate swaps and a recommendation is made to the
Group’s Board each year on how to best manage interest rate risk for the forthcoming 12 months. The Group currently has low levels
of net debt and secure long-term borrowings which are mostly fixed at low interest rates.
The proportion of gross debt managed by the Group’s treasury function at 31 March 2021 that was fixed or capped for more than one
year was 80% (2020 – 75%). At 31 March 2021, the longest term of any fixed rate debt held by the Group was until 2032 (2020 – until 2031).
Given the proportion of debt that is fixed rate debt, as at 31 March 2021, if interest rates increased by 100 basis points, Group profit before
tax would increase by £2 million (2020 – £1 million increase). If interest rates decreased by 100 basis points, or less where applicable,
Group profit before tax would decrease by £nil (2020 – £nil). If the Group maintains a consistent level of working capital benefit in relation
to supply-chain financing arrangements (see ‘Liquidity risk management’ section) then an increase in interest rates of 100 basis points
would decrease Group profit before tax by £2 million (2020 – £2 million).
180 TATE & LYLE PLC ANNUAL REPORT 2021
180 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
29. RISK MANAGEMENT CONTINUED
Price risk management
The Group manages its US net corn position, comprising the purchase, sale and recognition of corn and corn derived co-product
inventory on a net basis. Each element of the net corn position is marked to market on the basis that doing so aligns with the economics
of the business and minimises price risk volatility. The Group has designated the components of its US net corn position into two effective
fair value hedge accounting relationships (net corn (futures and basis) and net co-products) whereby the hedged item is a group of items
with offsetting risk positions. The Group uses certain derivative financial instruments (mainly corn futures contracts) to manage this
net position.
There is estimation required in determining the fair value of certain components of this net position. The nature of these estimates is
disclosed in Note 2. Given the net position for corn, as at 31 March 2021, a 50% increase/decrease in the price of corn would result in
a decrease/increase to the income statement of £1 million (2020 – £2 million) and related decrease/increase in other components of
equity of £2 million (2020 – £1 million).
The Group discloses sensitivity analysis on the key areas of estimation uncertainty (price of co-products and basis) and the carrying
amounts impacted by estimation uncertainty in Note 28. Full details of the valuation technique are also included in Note 28.
Additionally, the Group employs limited pricing contracts, principally futures, to hedge cash flow risk associated with certain forecast
purchases and sales of commodities and purchases of chemicals used in the manufacturing process which are designated as cash flow
hedges. Refer to Note 28.
Credit risk management
Counterparty credit risk arises from the placing of deposits (refer to Note 15) and entering into derivative financial instrument contracts
with banks and financial institutions, as well as credit exposures inherent within the Group’s outstanding receivables. The Group manages
credit risk by entering into financial instrument contracts substantially with investment grade counterparties approved by the Board.
The Board has approved maximum counterparty exposure limits for specified banks and financial institutions based on the long-term
credit ratings from major credit rating agencies. Trading limits assigned to commercial customers are based on ratings from Dun &
Bradstreet (2020 – Credit Safe). In cases where published financial ratings are not available or inconclusive, credit application, reference
checking, measurement of performance against agreed terms, and obtaining of customers’ financial information such as liquidity and
turnover ratio, are required to evaluate customers’ credit worthiness. Counterparties’ positions are monitored on a regular basis to
ensure that they are within the approved limits and there are no significant concentrations of credit risks.
The Group’s trade receivables are short term in nature and are largely comprised of amounts receivable from business customers.
Concentrations of credit risk with respect to trade receivables are limited, with our customer base including large, unrelated and
internationally dispersed customers. The Group considers its maximum exposure to credit risk at the year-end date is the carrying
value of each class of financial assets as disclosed under financial instruments by category on page 175. Refer to Note 16 for the effect
of expected credit loss on the Group’s trade receivables.
Liquidity risk management
The Group manages its exposure to liquidity risk and ensures maximum flexibility in meeting changing business needs by maintaining
access to a wide range of funding sources, including capital markets and bank borrowings. The majority of the Group’s borrowings are
raised through the Group treasury company, Tate & Lyle International Finance PLC, and are then on-lent to the business units on an
arm’s length basis.
At the year end, the Group held cash and cash equivalents of £371 million (2020 – £271 million) and had committed undrawn facilities
of £579 million (2020 – £642 million). These resources are maintained to provide liquidity back-up and to meet the projected maximum
cash outflow from debt repayment, capital expenditure and seasonal working capital needs foreseen for at least a year into the future at
any one time. The Group policy requires that available liquidity (undrawn committed facilities plus cash) is greater than £400 million and
minimum liquidity requirements are maintained in order to retain an investment grade credit rating, per any relevant published definitions
of Standard & Poor’s and Moody’s.
At 31 March 2021, the average maturity of the Group’s drawn financing was 7.3 years (2020 – 7.3 years).
To allow more effective management of interest rate risk and optimisation of overall cost of debt, the Group policy is as follows; a) no
more than 20% of the total Group gross debt plus undrawn committed facilities should mature within 12 months from balance sheet date
b) the Group’s core undrawn committed bank facility must be refinanced no later than 12 months prior to its full maturity, and c) at least
50% of drawn debt should have a maturity of more than 2.5 years. At 31 March 2021, after taking account of undrawn committed facilities,
the Group was compliant with the policy.
The Group has a core committed revolving credit facility of US$800 million. In March 2021, the Group extended the maturity of
US$700 million of the US$800 million revolving credit facility by a year, to March 2026. This facility is unsecured and contains one
financial covenant, that the multiple of net debt to EBITDA, as defined in the facility agreement, should not be greater than 3.5 times.
The Group policy requires that net debt is managed within the target range of 1.5 – 2.5 times EBITDA (including the impact of IFRS 16).
At 31 March 2020, the Group had US$600 million of US Private Placement notes which mature between 2023 and 2031. In August 2020,
the Group issued a further US$200 million of US Private Placement notes consisting of US$100 million 2.91% notes maturing in 2030 and
US$100 million 3.01% notes maturing in 2032. Therefore, at 31 March 2021, the Group had US$800 million of US Private Placement notes
which mature between 2023 and 2032. These notes contain financial covenants that the multiple of net debt to EBITDA, as defined in the
note purchase agreement, should not be greater than 3.5 times.
The ratios for this financial covenant were:
Net debt/EBITDA1
1 This financial covenant applies to both the revolving credit facility and US Private Placement notes at 31 March 2021 and 31 March 2020.
YEAR ENDED 31 MARCH
2021
TIMES
0.6
2020
TIMES
0.6
TATE & LYLE PLC ANNUAL REPORT 2021 181
TATE & LYLE PLC ANNUAL REPORT 2021
181
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. RISK MANAGEMENT CONTINUED
Liquidity risk management continued
The Group monitors compliance against all its financial obligations and it is Group policy to manage the consolidated statement of financial
position so as to operate well within these covenanted restrictions. In both the current and prior reporting periods, the Group complied
with its financial covenants at all measurement points. (The Group is required to report on covenants after the interim and year-end
reporting dates).
In the past, the net debt to EBITDA ratio was reported as key performance metrics in line with the calculation methodology used for
financial covenants on the Group’s borrowing facilities. Following the refinancing of the revolving credit facility and the amended covenant
definitions, the Group has simplified the calculation of its KPIs to make them more directly related to information in the Group’s financial
statements. The simplified calculation of net debt to EBITDA is reported in Note 4.
The table below analyses the undiscounted cash flows related to the Group’s non-derivative financial liabilities and derivative assets
and liabilities.
Liquidity analysis
Borrowings
Lease liabilities
Interest on borrowings
Trade and other payables
Derivative contracts:
• receipts
• payments
Commodity derivatives
Liquidity analysis
Borrowings
Lease liabilities
Interest on borrowings
Trade and other payables
Derivative contracts:
• receipts
• payments
Commodity derivatives
AT 31 MARCH 2021
< 1 YEAR
£M
1 --- 5 YEARS
£M
> 5 YEARS
£M
(8)
(32)
(20)
(419)
84
(84)
12
(229)
(95)
(74)
---
---
---
2
(404)
(32)
(55)
---
---
---
---
AT 31 MARCH 2020
< 1 YEAR
£M
1 – 5 YEARS
£M
> 5 YEARS
£M
(2)
(36)
(19)
(364)
90
(90)
(16)
(112)
(110)
(69)
–
–
–
(1)
(431)
(48)
(54)
–
–
–
–
Included in borrowings are £2,394,000 of 6.5% cumulative preference shares. Only one year’s worth of interest payable on these shares
is included in the less than one-year category.
Derivative contracts include forward exchange contracts. Commodity pricing contracts included above represent options and futures.
Commodity pricing contracts classified within Level 2 and Level 3 of fair value measurement (included in other current financial
assets/(liabilities) on the balance sheet) are not included in the liquidity analysis above as they are not settled for cash.
The Group also participated in certain customer-led supply chain financing arrangements which resulted in an earlier payment through
an intermediary (usually a bank) at a discount. Other than a working capital benefit relating to these arrangements of £203 million in
the year ended 31 March 2021 (2020 – £174 million) and the supply chain financing costs, there is no further impact on the Group’s
accounting on the basis that once the intermediary has settled the receivable there is no further recourse to the Group in the event the
customer defaults on its payment to the intermediary. The classification of the receivable is not changed as the Group is not able to
instigate collection ahead of the contractual terms of this arrangement meaning that the business model’s objective continues to be
holding assets in order to collect contractual cash flows. The discount incurred is recorded as a reduction of revenue.
Capital risk management
The Group’s primary objectives in managing its capital are to safeguard the business as a going concern; to maintain the dividend policy;
to maintain sufficient financial flexibility to undertake its investment plans; and to retain an investment-grade credit rating which enables
access to debt capital markets. The Group’s financial profile and level of financial risk is assessed on a regular basis in the light of changes
to the economic conditions, business environment, the Group’s business profile and the risk characteristics of its businesses.
Tate & Lyle PLC has contractual relationships with Moody’s and Standard & Poor’s (S&P) for the provision of credit ratings. At 31 March
2021, the long-term credit rating from Moody’s was Baa2 (stable outlook) (2020 – Baa2) and from S&P was BBB (stable outlook)
(2020 – BBB).
The Group regards its total capital as follows:
Net debt
Equity attributable to owners of the Company
Total capital
182 TATE & LYLE PLC ANNUAL REPORT 2021
182 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
NOTE
27
2021
£M
417
1 459
1 876
2020
£M
451
1 399
1 850
FINANCIAL STATEMENTS
30. RETIREMENT BENEFIT OBLIGATIONS
For accounting purposes, a valuation of each of the defined benefit plans is carried out annually at 31 March using independent
qualified actuaries. Benefit obligations are measured using the projected unit credit method and are discounted using the market
yields on high-quality corporate bonds denominated in the same currency as, and of similar duration to, the benefit obligations.
Plan assets are measured at their fair value at the period-end date. Where a plan holds a qualifying insurance policy, the fair value
of the policy is equivalent to the present value of the related benefit obligations.
A deficit or surplus is recognised on each plan, representing the difference between the present value of the benefit obligation and
the fair value of the plan assets.
The costs of the defined benefit plan that are recognised in the income statement include the current service cost, any past service
cost and the interest on the net deficit or surplus. Gains or losses on curtailments or settlements of the plans are recognised in the
income statement in the period in which the curtailment or settlement occurs. Plan administration costs incurred by the Group are
also recognised in the income statement. Interest on the net deficit or surplus is calculated by applying the discount rate that is used
in measuring the present value of the benefit obligation to the opening deficit or surplus.
Re-measurements of the deficit or surplus are recognised in other comprehensive income. Re-measurements comprise differences
between the actual return on plan assets (less asset management expenses) and the interest on the plan assets and actuarial gains
and losses. Actuarial gains and losses represent the effect of changes in the actuarial assumptions made in measuring the present
value of the benefit obligation and experience differences between those assumptions and actual outcomes. Actuarial gains and
losses are recognised in full in the period in which they occur.
For defined contribution plans contributions made by the Group to defined contribution pension schemes are recognised in the income
statement in the period in which they fall due.
Plan information
The Group operates a number of defined benefit pension plans, principally in the UK and the US. At 31 March 2021, the Group’s retirement
benefit obligations are in a net deficit of £140 million (2020 – deficit of £203 million).
The UK plans primarily comprise funded retirement benefit plans where plan assets were previously held separately from those of the
Group in funds that were under the control of trustees.
In the prior year the Group supported the trustees of the main UK pension scheme in completing a £930 million bulk annuity insurance policy
'buy-in' for that scheme. As a result, the assets of the main UK pension scheme were replaced with an insurance asset matching UK scheme
liabilities. Under a 'buy-in', an insurance company undertakes to 'track' the liability with an insurance policy that exactly matches the
liability, thereby enabling a full netting of the liability being tracked. A 'buy-in' is not a settlement and the liability is not derecognised as
the Group retains the ultimate responsibility for funding of the plan. The impact of this transaction in the year ended 31 March 2020, was
to record a re-measurement loss of £195 million to other comprehensive income. There was no impact on profit before tax. As a result,
in the current year, the actuarial movements in the liabilities subject to the ‘buy-in’ are matched by an equal and opposite movement
on its assets both recorded in other comprehensive income.
The UK plans are closed to new entrants and to future accrual. In the UK, scheme members can elect to forego a portion of their future
pension benefits, in return for a lump sum payment, or a transfer out to other arrangements. These amounts are excluded from future
benefit projections.
The US plans, presented below, principally comprise:
• two funded plans where plan assets are held separately from those of the Group in funds that are under the control of an investment
management committee. These plans are closed to new entrants and to future accrual
• a retirement benefit plan to certain employees which is funded but the associated assets do not qualify for recognition as IAS 19 plan
assets. As such the plan is presented below as funded. The related assets are recognised as FVPL assets within investments in equities
(refer to Note 17). This is referred to as ‘non-qualified deferred compensation arrangements’ within this note
• a retirement benefit plan for certain employees which is unfunded and non-qualified for tax purposes
• an unfunded retirement medical plan where the costs of providing these benefits are recognised in the period in which they are
incurred. Such plans provide financial assistance in meeting various costs including medical, dental and prescription drugs. Employees
are required to contribute to the cost of benefits received under the plans. The liability associated with this plan at 31 March 2021 was
£57 million (2020 – £75 million). The Group paid £3 million (2020 – £4 million) into this plan in the year. Details on assumptions applied
in the calculation of the liability and sensitivity analysis thereon is included in this note.
The Group operates defined contribution pension plans in a number of countries. Contributions payable by the Group to these plans during
the year amounted to £8 million (2020 – £8 million).
TATE & LYLE PLC ANNUAL REPORT 2021 183
TATE & LYLE PLC ANNUAL REPORT 2021
183
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Movement in net defined benefit asset/(liability)
Analysis of net defined benefit asset/(liability)
Benefit obligations:
Funded plans
Unfunded plans
Fair value of plan assets
Net deficit
Presented in the statement of financial position as:
Retirement benefit surplus
Retirement benefit deficit
Net deficit
AT 31 MARCH 2021
AT 31 MARCH 2020
UK PLANS*
£M
US PLANS
£M
TOTAL
£M
UK PLANS*
£M
US PLANS
£M
TOTAL
£M
(957)
(3)
(960)
942
(18)
3
(21)
(18)
(505)
(108)
(613)
491
(122)
15
(137)
(122)
(1 462)
(111)
(1 573)
1 433
(140)
18
(158)
(140)
(896)
(4)
(900)
881
(19)
3
(22)
(19)
(569)
(141)
(710)
526
(184)
1
(185)
(184)
(1 465)
(145)
(1 610)
1 407
(203)
4
(207)
(203)
*
Includes £3 million (2020 – £4 million) relating to legacy unfunded retirement benefit plans of European subsidiaries.
Net defined benefit asset/(liability) reconciliation
Net deficit at 1 April 2020
Income statement:
• current service costs
• administration costs
• net interest expense US plans
Other comprehensive income:
• actual return higher than interest on plan assets
• actuarial (loss)/gain:
– changes in financial assumptions
– changes in demographic assumptions
– experience against assumptions
Other movements:
• employer’s contribution
• non-qualified deferred compensation arrangements
• currency translation differences
Net deficit at 31 March 2021
*
Included within US unfunded plans is the retirement medical plan of £57 million (2020 – £75 million).
Analysis of movement in the benefit obligations
At 1 April 2020
Income statement:
• current service costs
• interest costs
Other comprehensive income:
• actuarial (loss)/gain:
– changes in financial assumptions
– changes in demographic assumptions
– experience against assumptions
Other movements:
• benefits paid
• non-qualified deferred compensation arrangements
• currency translation differences
At 31 March 2021
184 TATE & LYLE PLC ANNUAL REPORT 2021
184 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED*
£M
TOTAL
£M
(19)
(43)
(141)
(203)
---
(1)
---
---
(1)
(1)
99
30
(107)
(3)
9
2
---
2
(18)
---
4
---
2
(9)
4
(14)
(1)
---
(4)
---
7
1
9
7
---
14
(108)
(1)
(2)
(5)
129
(100)
2
18
11
(9)
20
(140)
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED
£M
TOTAL
£M
(900)
(569)
(141)
(1 610)
---
(20)
---
(15)
(1)
(4)
(1)
(39)
(107)
(3)
9
58
---
3
---
4
---
28
(9)
56
7
1
9
7
---
14
(100)
2
18
93
(9)
73
(960)
(505)
(108)
(1 573)
30. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Analysis of movement in plan assets
At 1 April 2020
Income statement:
• administration costs
• interest gains
Other comprehensive income:
• actual return higher than interest on plan assets
Other movements:
• employer contributions
• benefits paid
• currency translation differences
At 31 March 2021
FINANCIAL STATEMENTS
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED
£M
881
526
(1)
20
99
2
(58)
(1)
942
(1)
14
30
2
(28)
(52)
491
---
---
---
---
---
---
---
---
TOTAL
£M
1 407
(2)
34
129
4
(86)
(53)
1 433
Significant assumptions
For accounting purposes, the benefit obligation of each plan is based on assumptions made by the Group on the advice of independent
actuaries. For the UK defined benefit pension plan these ’best estimate’ IAS 19 assumptions are different to the more prudent assumptions
used for funding valuation purposes. For the US defined benefit pension plan, the funding valuation assumptions are identical to the
IAS 19 assumptions.
PRINCIPAL ASSUMPTIONS
Inflation rate
Expected rate of salary increases
Expected rate of pension increases:
• deferred pensions
• pensions in payment
Discount rate
Average life expectancy
• male aged 65 now/in 20 years
• female aged 65 now/in 20 years
AT 31 MARCH 2021
AT 31 MARCH 2020
UK
2.7%/3.4%
n/a
2.7%
3.3%
1.9%
US
2.5%
3.0%
n/a
n/a
2.9%
UK
1.8%/2.8%
n/a
1.8%
2.8%
2.3%
US
2.5%
3.0%
n/a
n/a
2.9%
21.3/22.9 years 20.6/23.3 years
21.1/22.8 years 20.6/22.2 years
23.7/25.4 years 22.5/25.2 years
23.5/25.2 years 22.5/24.1 years
Principal assumptions used in calculating the US medical benefit obligation are medical cost inflation and the discount rate applied to
the expected benefit payments. The Group has assumed medical cost inflation at 6.5% per annum (2020 – 7.0%), grading down to 6%
by 2023, and used a discount rate of 2.8% (2020 – 2.8%).
At 31 March 2021, the sensitivity of the net surplus/(deficit) on the plans to changes in the principal assumptions was as follows (assuming
in each case that the other assumptions are unchanged):
Inflation rate1
Life expectancy
Discount rate
INCREASE/(DECREASE) IN OBLIGATION
INCREASE IN
SURPLUS/
(DEFICIT)
£M
DECREASE IN
SURPLUS/
(DEFICIT)
£M
48
74
(93)
(46)
(73)
103
CHANGE IN
ASSUMPTIONS +/-
50 bp
1 year
50 bp
1
Inflation rate sensitivity covers the inflation assumption, expected rate of salary increases assumption and expected rate of pensions in payment increases assumption.
TATE & LYLE PLC ANNUAL REPORT 2021 185
TATE & LYLE PLC ANNUAL REPORT 2021
185
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Analysis of plan assets
Quoted11
Equities
Corporate bonds
Investment funds
Liability Driven Investments (LDI)
fixed income
Cash
Unquoted
Investment funds
Insurance policies
UK
£M
3
2
5
---
8
---
924
942
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
US
£M
---
---
---
487
---
---
4
491
TOTAL
£M
UK2
£M
3
2
5
487
8
---
928
1 433
2
2
6
–
9
1
861
881
US
£M
–
–
–
TOTAL
£M
2
2
6
522
522
–
–
4
526
9
1
865
1 407
1 Quoted assets contain certain pooled funds where the underlying assets are quoted.
2 During the prior year, the Group completed a £930 million bulk annuity insurance policy ‘buy-in’ for the main UK pension scheme.
The fair value of the insurance policies is deemed to be equivalent to the present value of the related benefit obligation. The Group also
paid an additional £3 million (2020 – £4 million) into the US unfunded retirement medical plans and £4 million (2020 – £4 million) into
the US unfunded pension plans to meet the cost of providing benefits in the financial year.
Maturity profile
At 31 March 2021, the weighted average duration of the plans and the benefit payments expected by the plans are as follows:
Weighted average duration (years)
Benefit payments expected:
• within 12 months
• between 1 to 5 years
• between 6 to 10 years
UK PLANS
£M
US PLANS
£M
14.9
11.1
41
169
216
36
144
170
TOTAL
£M
13.4
77
313
386
Funding of the plans
As required by local regulations, actuarial valuations of the US pension plans are carried out each year and those of the UK pension
plans are carried out at least every three years. The main UK scheme triennial valuation as at 31 March 2019 was concluded during the
year ended 31 March 2020 and, given that the liabilities were secured through the purchase of a bulk annuity insurance policy, both core
contributions to the scheme and supplementary contributions to the secured funding account has ceased. In the year ended 31 March 2021,
£1 million was paid to fund on-going administration costs of the main UK scheme.
In respect of the US plans £2 million of contributions were paid to the funded plans, £4 million to the unfunded pension plan with £3 million
paid for health plans.
During the year ending 31 March 2022 the Group expects to contribute approximately £8 million to its defined benefit pension plans and
to pay approximately £4 million in relation to retirement medical benefits, principally in the US. The Group also expects to make a one-off
contribution to settle a post transaction price adjustment in respect of the bulk annuity policy ‘buy-in’ of the main UK plan.
Where a plan is in surplus, the surplus recognised is limited to the present value of any amounts that the Group expects to recover
by way of refunds or a reduction in future contributions.
186 TATE & LYLE PLC ANNUAL REPORT 2021
186 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
30. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Risk mitigation
RISK
ACTION TAKEN
Investment and
longevity risks
The investment and longevity risks for the main UK scheme have been fully insured through the purchase of a
qualifying bulk annuity insurance policy during the year ended 31 March 2020, whilst the remaining assets of the
funded defined benefit plans in the US are predominately held in fixed interest security type investments, as a result
of the de-risking initiatives through the sale of equities and some investment funds. At 31 March 2021 £928 million
(2020 – £865 million) of the benefit obligation was fully matched by qualifying insurance policies that also mitigate
longevity and investment risks.
Interest rate
risk
The bulk annuity insurance policy has nullified the interest rate risk for the main UK Scheme. For the US funded
plans, the Group seeks to ensure that, as far as practicable, the investment portfolios are invested in securities with
maturities and in currencies that match the expected future benefit payments as they fall due.
Inflation risk
Inflation risk for the main UK Scheme has also been nullified due to the bulk annuity policy. The deferred pensions
and pensions in payment in the US funded plans do not attract inflation increases. Some inflation risk exists in
relation to the employee members' benefits which is mitigated by holding index-linked government bonds and
corporate bonds.
31. SHARE-BASED PAYMENTS
All of the awards granted under the existing plans are classified as equity-settled awards. The Group recognises compensation expense
based on the fair value of the awards measured at the grant date using the Black-Scholes option pricing model. Fair value is not
subsequently re-measured unless relevant conditions attaching to the award are modified.
Fair value reflects any market performance conditions and all non-vesting conditions. Adjustments are made to the compensation
expense to reflect actual and expected forfeitures due to failure to satisfy service conditions or non-market performance conditions.
The resulting compensation expense is recognised in the income statement on a straight-line basis over the vesting period and a
corresponding credit is recognised in equity. In the event of the cancellation of an award the compensation expense that would have
been recognised over the remainder of the vesting period is recognised immediately in the income statement.
The Company operates share-based incentive arrangements for the executive directors, senior executives and other eligible employees
under which awards and options are granted over the Company’s ordinary shares. All of the arrangements under which awards and
options were outstanding during the 2021 and 2020 financial years are classified as equity-settled.
During the year, the compensation expense recognised in profit or loss in respect of share-based incentives was £8 million (2020 –
£14 million). Other than the Sharesave Plan, all option awards have a nil exercise price. The following arrangements existed during
the period:
Performance Share Plan
The Group’s principal ongoing share-based incentive arrangement is the Performance Share Plan (PSP). Participation in the PSP is
restricted to the executive directors and other senior executives. Awards made under the PSP normally vest provided the participant
remains in the Group’s employment until the end of the performance period and are subject to the satisfaction of performance conditions.
The conditions applicable to PSP awards made from 1 April 2016 relate to the achievement of the Group adjusted return on capital
employed (ROCE) and adjusted profit targets. Up to 50% of each award vests dependent on the Group’s adjusted ROCE from continuing
operations reaching specified levels at the end of the performance period. Up to 25% of each award vests dependent on the compound
annual growth in the Group’s adjusted profit before tax with the remaining 25% from compound annual growth of the Food & Beverage
Solutions adjusted operating profit. For awards made from 1 April 2019, up to 40% of each award vests dependent on the above mentioned
ROCE target. Up to 40% of each award vests based on the compound annual growth of the Group’s adjusted earnings per share with the
remaining 20% from compound annual growth of the Food & Beverage Solutions volume over the performance period.
Group Bonus Plan --- deferred element
Bonuses earned under the Group Bonus Plan (GBP) are normally paid in cash up to 100% of the base salary of the participating executive.
Any excess above 100% of base salary is paid in the form of deferred shares that are released after two years subject to the executive
remaining in the Group’s employment. During the vesting period, payments in lieu of dividends are made in relation to the deferred shares.
Sharesave Plan
Options are granted from time to time under the Company’s Sharesave Plan, which is open to all employees in the UK. It offers eligible
employees the option to buy shares in the Company after a period of three or five years funded from the proceeds of a savings contract
to which they contribute on a monthly basis. The exercise price reflects a discount to market value of up to 20%.
Restricted Share Awards
The Company has made a Restricted Share Award (RSA) to a number of eligible employees. Awards made normally vest provided the
participant remains in the Group’s employment during the performance period and other conditions, specific to the individual awards,
are met.
Further information relating to specific awards made to executive directors are set out in the Directors’ Remuneration Report on pages
110 to 128.
TATE & LYLE PLC ANNUAL REPORT 2021 187
TATE & LYLE PLC ANNUAL REPORT 2021
187
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
31. SHARE-BASED PAYMENTS CONTINUED
Movements in the year
Movements in the awards outstanding during the year were as follows:
Outstanding at 1 April
Granted
Exercised
Lapsed
Outstanding at 31 March
Exercisable at 31 March
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
AWARDS
(NUMBER)
10 293 944
3 491 921
(1 919 388)
(2 073 138)
9 793 339
233 167
WEIGHTED
AVERAGE
EXERCISE PRICE
(PENCE)
15p
9p
17p
10p
14p
82p
AWARDS
(NUMBER)
11 452 236
3 768 268
(2 977 197)
(1 949 363)
10 293 944
WEIGHTED
AVERAGE
EXERCISE PRICE
(PENCE)
13p
15p
10p
10p
15p
59 749
254p
The weighted average market price of the Company’s ordinary shares on the dates on which awards were exercised during the year was
679p (2020 – 726p).
Awards granted in the year
During the year, PSP awards were granted over 3,324,590 shares (2020 – 3,592,831 shares), RSAs were granted over 80,253 shares
(2020 – 78,984 shares), Shares issued under the Group Bonus Plan were granted in the year were 26,433 (2020 – nil) and Sharesave
options were granted over 60,645 shares (2020 – 96,453 shares). The compensation expense recognised in relation to these awards
is based on the fair value of the awards at their respective grant dates.
The weighted average fair values of the awards granted during the year and the principal assumptions made in measuring those fair
values were as follows:
Fair value at grant date
Exercise price
Principal assumptions:
Share price on grant date
Expected life of the awards
Risk-free interest rate
Dividend yield on the Company’s shares
Volatility of the Company’s shares
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
PSP
SHARESAVE
PSP
SHARESAVE
605p
---
116p
531p
691p
–
166p
568p
664p
656p
756p
748p
3 years 3.3/5.3 years
3 years
3.3/5.3 years
n/a -0.05%/0.03%
n/a
0.60%/0.63%
4.45%
n/a
4.51%
25%
3.89%
n/a
3.96%
25%
There were 26,433 shares issued under the Group Bonus Plan during the year (2020 – nil). The RSAs were granted, with employment
related conditions and expected life of the award, specific to each individual grant.
The fair value of the awards was measured using a Black-Scholes option pricing methodology, taking into account factors such as
exercise restrictions and behavioural considerations.
Expected volatility was based on the historical volatility of the market price of the Company’s shares over the expected life of the awards.
Awards outstanding at the end of the year
The range of exercise prices and the weighted average remaining contractual life of the awards outstanding at the end of the year were
as follows:
Exercise price
Nil
400p to 799p
Total
AT 31 MARCH 2021
AT 31 MARCH 2020
WEIGHTED
AVERAGE
CONTRACTUAL
LIFE
(MONTHS)
48.7
28.8
48.2
AWARDS
(NUMBER)
9 542 752
250 587
9 793 339
WEIGHTED
AVERAGE
CONTRACTUAL
LIFE
(MONTHS)
46.7
30.9
46.3
AWARDS
(NUMBER)
10 011 329
282 615
10 293 944
188 TATE & LYLE PLC ANNUAL REPORT 2021
188 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
32. PROVISIONS AND CONTINGENT LIABILITIES
A provision is a liability of uncertain timing or amount that is recognised when: 1) the Group has a present obligation (legal or
constructive) as a result of a past event; 2) it is more likely than not that a payment will be required to settle the obligation; and 3)
the amount can be reliably estimated.
Where a payment is not probable, or the amount of the obligation cannot be measured with sufficient certainty, a contingent liability
is disclosed. Contingent liabilities are also disclosed if a possible obligation arises from past events, but its existence will be
confirmed only by the occurrence or non-occurrence of uncertain future events.
Provisions
At 1 April 2019
Provided in the year
Released in the year
Utilised in the year
Exchange
At 31 March 2020
Provided in the year
Released in the year
Utilised in the year
Exchange
At 31 March 2021
Provisions are expected to be utilised as follows:
• within one year
• after more than one year but before five years
Total
INSURANCE
PROVISIONS
£M
RESTRUCTURING
AND CLOSURE
PROVISIONS
£M
ENVIRONMENTAL
HEALTH & SAFETY
PROVISION
£M
LITIGATION
AND OTHER
PROVISIONS
£M
12
–
–
(6)
1
7
4
---
(3)
(1)
7
5
8
–
(6)
–
7
2
---
(6)
---
3
15
–
–
(9)
1
7
---
---
(7)
---
---
12
4
(4)
(2)
1
11
17
(2)
---
(1)
25
2021
£M
24
11
35
TOTAL
£M
44
12
(4)
(23)
3
32
23
(2)
(16)
(2)
35
AT 31 MARCH
2020
£M
21
11
32
Insurance provisions include amounts provided by the Group’s captive insurance subsidiary in respect of the expected level of insurance claims.
Restructuring provisions include certain costs for the Group programme to deliver US$150 million of productivity benefits. Provision is
made for restructuring costs when a detailed formal plan for the restructuring has been determined and the plan has been communicated
to those affected by it. Refer to Note 8 for further detail.
The difference between the carrying value and the discounted present value was not material in either year.
Contingent liabilities
Passaic River
The Group remains subject to a legal case arising from the notification in 2007 by the U.S. Environmental Protection Agency (USEPA) that
it, along with approximately 70+ others, is a potentially responsible party (PRP) for a 17 mile section of the northern New Jersey Passaic
River, a major ‘Superfund’ site. In March 2016, the USEPA issued its Record of Decision (ROD) on the likely cost for the remediation of the
lower eight-mile section of the river (the most contaminated). Whilst the Group will continue to vigorously defend itself in this matter,
in light of the publication of the ROD, the Group continues to recognise a provision in respect of this. Following a favourable insurance
claim to recover a portion of the associated legal expenses, the Group has reappraised the provision to £5 million (2020 – £6 million).
The Group continues to be unable to estimate a reasonably possible range of loss in respect of the remaining nine-mile section of the
river and therefore has not recognised a provision for this section.
Other claims
The Group is subject to claims and litigation generally arising in the ordinary course of its business. Provision is made when liabilities are
considered likely to arise and the expected quantum of the exposure is estimable. The risk in relation to claims and litigation is monitored
on an ongoing basis and provisions amended accordingly. It is not expected that claims and litigation existing at 31 March 2021 will have
a material adverse effect on the Group’s financial position.
TATE & LYLE PLC ANNUAL REPORT 2021 189
TATE & LYLE PLC ANNUAL REPORT 2021
189
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
33. COMMITMENTS
Total commitments for the purchase of tangible and intangible non-current assets are £33 million (2020 – £51 million).
In addition, the Group has various lease contracts that have not yet commenced as at 31 March 2021. The future lease payments for these
non-cancellable lease contracts are £nil within one year, £6 million within five years and £3 million thereafter. Commitments in respect
of retirement benefit obligations are detailed in Note 30.
34. ACQUISITIONS
Business combinations
A business combination is a transaction or other event in which the Group obtains control over a business. Business combinations
are accounted for using the acquisition method, the key elements of which are below.
Identifiable assets and liabilities of the acquired business are generally measured at their fair value at the acquisition date. Retirement
benefit obligations and deferred tax assets and liabilities are measured in accordance with the Group’s accounting policies.
Consideration transferred represents the sum of the fair values at the acquisition date of the assets given, liabilities incurred or
assumed and equity instruments issued by the Group in exchange for control over the acquired business. Acquisition-related costs
are charged to the income statement in the period in which they are incurred.
Any non-controlling interest in the acquired business is measured either at fair value or at the non-controlling interest’s
proportionate share of the identifiable assets and liabilities of the business.
Goodwill arising in a business combination represents the excess of the sum of the consideration transferred, the amount of any
non-controlling interest in the acquired business and, where a business combination is achieved in stages, the fair value at the
acquisition date of the Group’s previously held equity interest, over the net total of the identifiable assets and liabilities of the acquired
business at the acquisition date. Any re-measurement gain or loss on the previously held equity interest is recognised in the income
statement. Any shortfall, or negative goodwill, is recognised immediately as a gain in the income statement.
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for within equity.
Any gain or loss upon loss of control is recognised in the income statement.
In the 2021 financial year:
Sweet Green Fields (‘‘SGF’’)
On 30 November 2020, the Group acquired the remaining 85% of the equity of SGF which it did not already own. Total provisional
consideration in respect of the acquisition was £61 million (including the fair value of the 15% that the Group already owned). The
provisionally determined fair value of identifiable net assets acquired was £25 million, resulting in provisional goodwill at the date of
acquisition of £36 million. This is not deductible for tax purposes. The goodwill of £36 million remains provisional subject to finalisation
of the completion accounts and working capital adjustments. The acquisition of SGF brings a broad portfolio of stevia products and a fully
integrated stevia supply chain to the Group including leaf sourcing, leaf varietal development, established agricultural programmes
and cost-efficient manufacturing. It strengthens the Group's position as a leading provider of innovative sweetener solutions with the
capabilities to create foods and beverages that are lower in sugar and calories and with cleaner labels for customers across the world.
The acquisition of the remaining shares simplifies the existing relationship by creating a fully integrated supply chain and commercial
organisation, unified research and development capabilities, and combined strengths to accelerate innovation and optimise production
technologies. The provisional goodwill primarily represented the premium paid to acquire an established business with a fully integrated
supply chain and growth potential in the speciality food ingredients market.
The acquired business contributed revenue of £7 million and an operating loss of £2 million for the period from acquisition on 30 November
2020 until the end of the 2021 financial year (including the amortisation of acquired intangibles recognised from the acquisition). Had the
business been acquired at the beginning of the 2021 financial year, it would have contributed revenue of £41 million and an operating profit
of £nil in the 2021 financial year.
Chaodee Modified Starch Co., Ltd (‘‘CMS’’)
On 10 February 2021, the Group acquired 85% of the shares of CMS a well-established tapioca modified food starch manufacturer located
in Thailand. Total provisional consideration in respect of the CMS acquisition was £13 million. The provisionally determined fair value
of identifiable net assets acquired was £9 million, resulting in provisional goodwill at the date of acquisition of £4 million. This is not
deductible for tax purposes. The goodwill of £4 million remains provisional subject to finalisation of the completion accounts and working
capital adjustments. This investment extends the Group's presence in speciality tapioca-based texturants and establishes a dedicated
production facility in the main tapioca region of eastern Thailand. The acquisition will enable the Group to offer a broader range of tapioca-
based solutions to meet customers' needs for better tasting and clean label foods in categories including dairy, bakery, snacks, noodles
and soup, sauces and dressings. The provisional goodwill primarily represented the premium paid to acquire an established business with
a manufacturing plant which has the potential for modernisation and expansion.
The acquired business contributed revenue and operating profit that was immaterial to the Group.
The Group has elected to measure the non-controlling interests in the acquiree at fair value.
190 TATE & LYLE PLC ANNUAL REPORT 2021
190 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
34. ACQUISITIONS CONTINUED
The following table provides a summary of the acquisition accounting for Sweet Green Fields:
Cash consideration
Non-cash consideration (fair value of existing interest in SGF)
Purchase price adjustments
Total consideration
Less: fair value of net assets acquired
Provisional goodwill
Cash flows:
Total cash consideration (including purchase price adjustments)
Less: net cash and working capital adjustments
Acquisition of business, net of cash acquired
The fair value of net assets recognised on acquisition is comprised as follows:
Intangible assets (customer relationships £2 million, intellectual property £16 million)
Property, plant and equipment
Inventories
Trade and other receivables1
Cash and cash equivalents
Trade and other payables
Borrowings
Tax liabilities
Net assets at fair value on acquisition
FINANCIAL STATEMENTS
SWEET
GREEN
FIELDS
£M
50
11
---
61
25
36
(50)
1
(49)
SWEET
GREEN
FIELDS
£M
18
13
20
10
1
(26)
(7)
(4)
25
1 At the date of acquisition, trade and other receivables are presented at fair value. This amount equals the gross contractual amounts receivable of which the full amount is expected
to be collected when due.
In the 2020 financial year:
There were no equity acquisitions or disposals in the year ended 31 March 2020.
35. RELATED PARTY DISCLOSURE
Identity of related parties
The Group has related party relationships with its joint ventures, the Group’s pension schemes and with key management, being its
Directors and executive officers. Key management compensation is disclosed in Note 9. There were no other related party transactions
with key management. There were no material changes in related parties or in the nature of related party transactions during the year
and no material related party transactions containing unusual commercial terms in the current or prior year.
Subsidiaries and joint ventures
Sales of goods and services to joint ventures
Purchases of goods and services from joint ventures
Receivables due from joint ventures
Payables due to joint ventures
YEAR ENDED 31 MARCH
2021
£M
128
---
6
---
2020
£M
164
–
7
–
Transactions entered into by the Company, Tate & Lyle PLC, with subsidiaries and between subsidiaries as well as the resultant balances
of receivables and payables are eliminated on consolidation and are not required to be disclosed.
36. EVENTS AFTER THE BALANCE SHEET DATE
There are no other post balance sheet events requiring disclosure in respect of the year ended 31 March 2021.
TATE & LYLE PLC ANNUAL REPORT 2021 191
TATE & LYLE PLC ANNUAL REPORT 2021
191
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
37. RELATED UNDERTAKINGS
A full list of related undertakings, comprising subsidiaries and joint ventures, is set out below. All are 100% owned directly or indirectly
by the Group except where percentage ownership is indicated with (X)%.
Subsidiaries
COMPANY NAME
REGISTERED ADDRESS
COMPANY NAME
REGISTERED ADDRESS
United Kingdom11
1 Kingsway, London WC2B 6AT, UK
Astaxanthin Manufacturing Limited
G.C. Hahn and Company Limited2
1 Kingsway, London WC2B 6AT, UK
Hahntech International Limited
1 Kingsway, London WC2B 6AT, UK
Tate & Lyle Export Holdings Limited2 1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
Tate & Lyle Group Services Limited
1 Kingsway, London WC2B 6AT, UK
Tate & Lyle Holdings Americas
Limited
Tate & Lyle Holdings Limited3
Tate & Lyle Mold UK Limited
Tate & Lyle Industries Limited
Tate & Lyle International Finance
PLC2
Tate & Lyle Investments America
Limited3
Tate & Lyle Investments Brazil
Limited
Tate & Lyle Investments Limited2,3
Tate & Lyle L.P.
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1209 North Orange Street,
Wilmington, DE 19801, USA
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
1 Kingsway, London WC2B 6AT, UK
San Martín 140, 14th Floor, City of
Buenos Aires, Argentina
Building 2, 1425 Boundary Road,
Wacol QLD 4076, Australia
Industrielaan 4 box, 10-11, 9320
Aalst, Belgium
Aon House, 30 Woodbourne Avenue,
Pembroke, HM 08, Bermuda
Santa Rosa do Viterbo, State of São
Paulo, Fazenda Amália, São Paulo,
14270-000, Brazil
Rua Sapetuba Nº 211, CEP:- 005510-
001- Vila Pirajussara, Estado de São
Paulo, Brazil
Rua Bruno Simili No. 380, Distrito
Industrial, City of Juiz de Fora, State
of Minas Gerais, 36092-050, Brazil
Kingston Chambers, PO Box 173,
Road Town, Tortola, British Virgin
Islands
Kingston Chambers, PO Box 173,
Road Town, Tortola, British Virgin
Islands
Suite 400, Phoenix Square,
371 Queen Street, Fredericton
NB E3B 4Y9, Canada
Tate & Lyle Overseas Limited
Tate & Lyle Pension Trust Limited2
Tate & Lyle Technology Limited2
Tate & Lyle UK Limited2
Tate & Lyle Ventures II LP
Tate & Lyle Ventures Limited2
Tate & Lyle Ventures LP
Argentina
Tate & Lyle Argentina SA4
Australia
Tate & Lyle ANZ Pty Limited
Belgium
Tate & Lyle Services (Belgium) N.V.2
Bermuda
Tate & Lyle Management & Finance
Limited
Brazil
Tate & Lyle Brasil S.A.4
G.C. Hahn & Co. do Brasil
Estabilizantes e Tecnologia para
Alimentos Ltda.4
Tate & Lyle Gemacom Tech Indústria
e Comércio S.A.4
British Virgin Islands
SGF (Asia) Co., Limited
SGF Investment Co., Limited
Canada
Tate & Lyle Ingredients Canada
Limited
Cayman Islands
Sweet Green Fields Group Co.,
Limited
Chile
Tate & Lyle Chile Commercial Ltda
China
Sweet Green Fields Co., Limited4
Tate & Lyle Trading (Shanghai)
Co. Ltd4
G.C. Hahn & Co. Food Stabiliser
Business (Shanghai) Ltd4
Tate & Lyle Food Ingredients
(Nantong) Company Limited4
Colombia
Tate & Lyle Colombia S.A.S.4
Costa Rica
Tate & Lyle Costa Rica Limitada
Croatia
G.C. Hahn & Co. d.o.o.
Czech Republic
G.C. Hahn & Co. stabilizacni
technika, s.r.o.
Egypt
Tate & Lyle Egypt LLC
France
G.C. Hahn & Cie. SARL
Tate & Lyle Ingredients France
S.A.S.
Germany
G.C. Hahn & Co.
Stabilisierungstechnik GmbH
G.C. Hahn & Co.
Cooperationsgesellschaft GmbH
Tate & Lyle Germany GmbH
Gibraltar
Tate & Lyle Insurance (Gibraltar)
Limited
Greece
Tate & Lyle Greece A.E.
Hong Kong
Sweet Green Fields International
Co., Limited
India
Tate & Lyle Investments (India)
Private Ltd
Italy
Tate & Lyle Italia S.P.A.
Isidora Goyenechea 2800, Piso 43,
Las Condes, Santiago, Chile
Anji Economic Development Zone,
Health Medicine Industry Garden,
Huzhou, Zhejiang, China
Room 1401, Building 11, No. 1582,
Gumei Road, Xuhui District,
Shanghai, 200233, China
Unit A, Room 1301, Building 11,
No. 1582, Gumei Road, Xuhui
District, Shanghai, 200233, China
New & Hi-Tech Industrial
Development District, Rudong
county, Nantong city, 226400, China
Calle 11 #100-121 Of 309, Cali,
Colombia
San Jose-San Jose Merced, Edificio
Torre Mercedes, Piso Octavo,
Oficinas De CDO Auditores,
Costa Rica
Radnička cesta 80, Zagreb, 10 000,
Croatia
Kateřinská 466/40, Nové Město, 120
00 Praha 2, Czech Republic
87 Street 9, Maadi, Cairo, Egypt
2 Avenue de L’Horizon, 59650
Villeneuve-D’Ascq, France
2 Avenue de L'Horizon, 59650
Villeneuve-D'Ascq, France
Roggenhorster Strasse 31, 23556,
Lübeck, Germany
Roggenhorster Strasse 31, 23556,
Lübeck, Germany
Roggenhorster Strasse 31, 23556,
Lübeck, Germany
Suite 913, Europort, Gibraltar
69 K. N Papadaki, Thessaloniki,
54248 Thessaloniki, Greece
2701, 27th Floor, Central Plaza, 18
Harbour Road, Wanchai, Hong Kong
Block – E, 2nd Floor, The MIRA, Plot
– 1&2, Ishwar Nagar, Mathura Road,
New Delhi – 110065, India
Via Verdi, 1-CAP 20002 Ossona,
Milano, Italy
Abidjan Cocody 2, Plateaux 01, BP
659 ABJ 01, Cote d'Ivoire
PO Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands
Ivory Coast
Tate & Lyle Ivory Coast
192 TATE & LYLE PLC ANNUAL REPORT 2021
192 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
37. RELATED UNDERTAKINGS CONTINUED
FINANCIAL STATEMENTS
COMPANY NAME
REGISTERED ADDRESS
COMPANY NAME
REGISTERED ADDRESS
Japan
Tate & Lyle Japan KK
Lithuania
UAB G.C. Hahn & Co.
Mexico
Tate & Lyle México, S. de R.L.
de C.V.4
Mexama, S.A. de C.V.4 (65%)
Talo Services de Mexico, S.C.4
Morocco
T&L Casablanca S.A.R.L.
2F Oak Minami-Azabu Building,
3-19-23 Minami-Azabu, Minato-ku,
Tokyo, Japan
Vito Gerulaičio str. 10-101, LT-08200,
Vilnius, Lithuania
Piso 2, Av. Universidad 749,
Col del Valle Sur, Ciudad de Mexico,
03100, México
Calle lago de tequesquitengo,
No 111 Col. Cuahutemoc C.P. 62430,
Morelos, México
Piso 2, Av. Universidad 749,
Col del Valle Sur, Ciudad de Mexico,
03100, México
22, Rue du Parc, Casa Théâtre
Centre, Anfa, Casablanca, Morocco
Netherlands
Nederlandse Glucose Industrie B.V. 1541 KA, Koog aan de Zaan,
Tate & Lyle Netherlands B.V.
Poland
G.C. Hahn & Co. Technika
stabilizowania Sp.z o.o.
Tate & Lyle Global Shared Services
Sp.z o.o.
Singapore
Tate & Lyle Asia Pacific Pte. Ltd.
Tate & Lyle Singapore Pte Ltd
Slovakia
Tate & Lyle Boleraz s.r.o.
Tate & Lyle Slovakia s.r.o
South Africa
Tate and Lyle South Africa
Proprietary Limited
Spain
G.C. Hahn Estabilizantes y
Tecnologia para Alimentos
Ebromyl S.L.
Sweden
Tate & Lyle Sweden AB
Thailand
Chaodee Modified Starch Co., Ltd
(88%)
Tate & Lyle (Trading) Thailand
Limited
Turkey
Tate and Lyle Turkey Gıda Hizmetleri
Anonim Şirketi
Lagendijk 5, The Netherlands
1541 KA, Koog aan de Zaan,
Lagendijk 5, The Netherlands
Ul. Sterlinga 8A, 91425, Łódź, Poland
Ul. Sterlinga 8A, 91425, Łódź, Poland
3 Biopolis Drive, #05-11-16 Synapse,
138623 Singapore
One Marina Boulevard #28-00,
1 Marina Boulevard, 018989
Singapore
114, Boleráz, 91908, Slovakia
114, Boleráz, 91908, Slovakia
1 Gravel Drive, Kya Sand Business
Park, Kya Sand, 2163, South Africa
Calle Príncipe de Vergara 112,
Planta Cuarta, 28002, Madrid, Spain
Ps. de la Constitución 10, Entlo.
Dcha., 50008, Zaragoza,
Zaragoza, Spain
Mäster Samuelsgatan 17, Box
1432, 111 84, Stockholm, Sweden
No. 345, Moo 14, Hin Dat Subdistrict,
Dan Khun Thot District, Nakhom
Ratchasima Province, Thailand
No. 345, Moo 14, Hin Dat Subdistrict,
Dan Khun Thot District, Nakhom
Ratchasima Province, Thailand
Esentepe Mah., Büyükdere Cad.,
193 Plaza Kat: 2 193/235A14 Şişli,
İstanbul, Turkey
Ukraine
PII G.C. Hahn & Co. Kiev4
United Arab Emirates
Tate & Lyle DMCC
USA
Staley Holdings LLC
Staley International Inc.
Sweet Green Fields USA LLC
Tate & Lyle Finance LLC
TLHUS, Inc.
Tate & Lyle Ingredients
Americas LLC
Tate & Lyle Sucralose LLC
TLI Holding LLC
Tate & Lyle Domestic International
Sales Corporation
Tate & Lyle Grain, Inc.
Tate & Lyle Malic Acid LLC
Tate & Lyle Sugar Holdings, Inc.
Tate & Lyle Americas LLC
Tate & Lyle Citric Acid LLC
Mala Olexandriwka, Zentralna-Str.
2-B, Borispol, 08320 Kiew, Ukraine
Office n. 3805, Jumeirah Bay X3
Tower, Cluster X, Jumeirah Lakes
Towers, Dubai, United Arab Emirates
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
11 Bellwether Way, Suite 305,
Bellingham WA 98225, United States
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
Joint Ventures
COMPANY NAME
REGISTERED ADDRESS
Mexico
Almidones Mexicanos S.A. de C.V.4
(50%)
Promotora de Productos y Mercados
Mexicanos, S.A. de C.V.4 (50%)
Estacion de Transferencia
Coatzacoalcos, S.A. de C.V.4 (50%)
USA
DuPont Tate & Lyle Bio Products
Company, LLC4 (50%)
Calle 26 No. 2756, Zona Industrial,
Guadalajara, Jal., 44940, Mexico
Calle 26 No. 2756, Zona Industrial,
Guadalajara, Jal., 44940, Mexico
Calle 26 No. 2756, Zona Industrial,
Guadalajara, Jal., 44940, Mexico
1209 North Orange Street,
Wilmington, DE 19801, USA
1 Registered in England and Wales, except Tate & Lyle L.P. which is registered in
Delaware, USA.
2 Direct subsidiaries of Tate & Lyle PLC.
3 Entity also issues preference shares which are 100% attributable to Tate & Lyle PLC.
4 Non-coterminous year end (31 December).
The results, assets and liabilities and cash flows of those entities
whose financial years are not coterminous with that of the Group
are consolidated or equity accounted in the Group’s financial
statements on the basis of management accounts for the year
to 31 March.
Changes in the Group’s ownership interest in a subsidiary that do
not result in a loss of control would be accounted for within equity.
Any gain or loss upon loss of control would be recognised in the
income statement.
TATE & LYLE PLC ANNUAL REPORT 2021 193
TATE & LYLE PLC ANNUAL REPORT 2021
193
PARENT COMPANY BALANCE SHEET
ASSETS
Fixed assets
Tangible fixed assets (including right-of-use assets of £5 million (2020 – £9 million))
Intangible assets
Investments in subsidiary undertakings
Total
Current assets
Debtors
Creditors – amounts falling due within one year
Borrowings (including lease liabilities of £1 million (2020 – £1 million))
Net current assets
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Borrowings (including lease liabilities of £7 million (2020 – £9 million))
Net assets
Capital and reserves
Called up share capital
Share premium account
Capital redemption reserve
Retained earnings
Total shareholders’ funds
NOTES
AT 31 MARCH
2020
£M
2021
£M
2
2
2
4
5
6
5
6
8
5
5
1 085
1 095
1 516
1 516
(1 227)
(1)
288
1 383
(2)
(7)
9
4
1 079
1 092
1 592
1 592
(1 320)
(1)
271
1 363
(2)
(9)
1 374
1 352
117
407
8
842
117
406
8
821
1 374
1 352
The Company recognised profit for the year of £153 million (2020 – £199 million).
The notes on pages 196 to 199 form part of these financial statements. The Parent Company’s financial statements on pages 194 to 199
were approved by the Board of Directors on 26 May 2021 and signed on its behalf by:
Nick Hampton
Director
Vivid Sehgal
Director
Tate & Lyle PLC
Registered number: 76535
194 TATE & LYLE PLC ANNUAL REPORT 2021
194 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FINANCIAL STATEMENTS
At 1 April 2019
Profit for the year
Purchase of own shares including net settlement
Share-based payments
Dividends paid
At 31 March 2020
Profit for the year
Purchase of own shares including net settlement
Issue of share capital
Share-based payments
Dividends paid
At 31 March 2021
CALLED UP
SHARE
CAPITAL
£M
117
SHARE
PREMIUM
ACCOUNT
£M
406
–
–
–
–
–
–
–
–
117
406
---
---
---
---
---
---
---
1
---
---
117
407
CAPITAL
REDEMPTION
RESERVES
£M
RETAINED
EARNINGS
£M
8
–
–
–
–
8
---
---
---
---
---
8
765
199
(22)
16
(137)
821
153
(5)
---
10
(137)
842
TOTAL
EQUITY
£M
1 296
199
(22)
16
(137)
1 352
153
(5)
1
10
(137)
1 374
At 31 March 2021, the Company had realised profits available for distribution in excess of £725 million (2020 – in excess of £640 million).
TATE & LYLE PLC ANNUAL REPORT 2021 195
TATE & LYLE PLC ANNUAL REPORT 2021
195
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES
Basis of preparation
Tate & Lyle PLC (the Company) is a public limited company
incorporated in the United Kingdom and registered in England.
The Company’s ordinary shares are listed on the London
Stock Exchange.
The Company’s financial statements are prepared under the
historical cost convention in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (FRS 101) and the
Companies Act 2006 as at 31 March 2021, with comparative figures
as at 31 March 2020.
For the reasons set out on page 147, the Company’s financial
statements are prepared on a going concern basis.
As permitted by Section 408 of the Companies Act 2006, the
Company’s profit and loss account is not presented in these
financial statements. Profit and loss account disclosures are
presented in Note 10.
The results of the Company are included in the preceding Group
financial statements.
The following disclosure exemptions from the requirements
of IFRS have been applied in the preparation of these financial
statements, in accordance with FRS 101:
• the requirements of IAS 7 Statement of Cash Flows
• the requirements of paragraph 17 and 18(a) of IAS 24 Related
Party Disclosures
• the requirements in IAS 24 Related Party Disclosures to disclose
related party transactions entered into between two or more
members of a group, provided that any subsidiary which is
a party to the transaction is wholly owned by such a member
• the requirement in paragraph 38 of IAS 1 Presentation of
Financial Statements to present comparative information in
respect of paragraph 79(a)(iv) of IAS 1, paragraph 73(e) of
IAS 16 Property, Plant and Equipment and 118(e) of IAS 38
Intangible assets
• the requirements of IFRS 7 Financial Instruments: Disclosures
• the requirements of paragraphs 30 and 31 of IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors
• the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
Share-Based Payments
• the requirements of paragraphs 91 to 99 of IFRS 13 Fair
Value Measurement
• the requirements of paragraphs 10(d) (statement of cash flows),
10(f) (statement of financial position as at the beginning of the
preceding period when an entity applies an accounting policy
retrospectively), 38(A to D) (comparative information), 111
(statement of cash flows) and 134 to 136 (capital management)
of IAS 1 Presentation of Financial Statements
• the requirements of paragraphs 52 and 58 of IFRS 16 Leases
• the requirements of paragraph 16 of IAS 1.
The Company intends to maintain these disclosure exemptions
in future years.
Accounting policies
Investments
Subsidiaries are all entities over which the Company has control.
The Company controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity.
Investments in subsidiary undertakings represent interests that
are directly owned by the Company and are stated at cost less
amounts written off for any permanent diminution in value.
Retirement benefits
The Company participates in a defined benefit pension scheme
in which certain of its subsidiaries also participate. The Company,
which is not the principal employer, cannot identify its share of
the underlying assets and liabilities of the scheme. Accordingly,
as permitted by IAS 19 Employee benefits, the Company accounts
for the scheme as a defined contribution scheme and charges its
contributions to the scheme to the profit and loss account in the
periods in which they fall due.
Share-based payments
As described in Note 31 to the consolidated financial statements,
the Company operates share-based incentive plans under which
it grants awards over its ordinary shares to its own employees and
to those of its subsidiary undertakings. All of the awards granted
under the existing plans are classified as equity-settled awards.
Estimating fair value for share-based transactions requires
determination of the most appropriate valuation model which
depends on the terms and conditions of each individual grant.
This estimation also requires determination of the most appropriate
inputs to the valuation model and represents a key source of
estimation uncertainty.
For awards granted to its own employees, the Company recognises
an expense that is based on the fair value of the awards measured
at the grant date using a Black-Scholes option pricing methodology.
For awards granted to employees of its subsidiary undertakings,
the Company recognises a capital contribution to the subsidiary
and a corresponding credit to equity calculated on the same basis
as the expense that it recognises for awards to its own employees.
Guarantees
From time to time, the Company provides guarantees to third
parties in respect of the indebtedness of its subsidiary undertakings
and joint ventures. The Directors consider these guarantees to be
insurance arrangements and, therefore, the Company recognises
a liability in respect of such guarantees only in the event that it
becomes probable that the guarantee will be called upon and the
Company will be required to make a payment to the third party.
Own shares
Own shares represent the Company’s ordinary shares that are held
by the Company in treasury or by a sponsored Employee Benefit
Trust that are used to satisfy awards made under the Company’s
share-based incentive plans. When own shares are acquired, the
cost of purchase in the market is deducted from the profit and
loss account reserve. Gains or losses on the subsequent transfer
or sale of own shares are also recognised in the profit and loss
account reserve.
Dividends
Dividends on the Company’s ordinary shares are recognised
when they have been appropriately authorised and are no longer
at the Company’s discretion. Accordingly, interim dividends are
recognised when they are paid and final dividends are recognised
when they are declared following approval by shareholders at the
Company’s AGM. Dividends are recognised as an appropriation
of shareholders’ funds. Details of dividends paid and proposed are
set out in Note 9.
Dividend income received from subsidiary companies is recognised
when the right to receive the payment is established.
Debtors
Debtors are recognised initially at fair value. Subsequent to
initial recognition they are measured at amortised costs or their
recoverable amount. The Company recognises an allowance
for expected credit losses based on the difference between the
contractual cash flows due in accordance with the contract and
all the cash flows that the group expects to receive, discounted
at an approximation of the original effective interest rate.
196 TATE & LYLE PLC ANNUAL REPORT 2021
196 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
2. FIXED ASSETS
Cost
At 1 April 2020
Additions
At 31 March 2021
Accumulated depreciation/amortisation/impairment
At 1 April 2020
Depreciation/amortisation/impairment charge
At 31 March 2021
Net book value at 31 March 2020
Net book value at 31 March 2021
FINANCIAL STATEMENTS
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
INTANGIBLE
ASSETS
£M
INVESTMENTS IN
SUBSIDIARIES
£M
9
–
9
1
4
5
8
4
5
–
5
4
–
4
1
1
8
1
9
4
–
4
4
5
1 229
6
1 235
150
–
150
1 079
1 085
3. LEASES
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of future lease payments.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date.
The right-of-use assets presented in the Company balance sheet comprise of tangible fixed assets being leases of office buildings. The
Company recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost including the
amount of lease liabilities recognised and initial direct costs incurred less any incentives granted by the lessor. Right-of-use assets are
subject to impairment. Right-of-use assets are depreciated over the shorter of the lease term and the useful life of the right-of-use assets.
Movements in right-of-use assets are presented as land and buildings in Note 2 Fixed Assets.
The total cash outflow for leases in the year ended 31 March 2021 was £2 million (2020 – £2 million).
Leases of buildings usually have lease terms between 1 and 16 years.
4. DEBTORS
Due within one year
Current tax
Amounts owed by subsidiary undertakings1
Other debtors1
Due after one year
Deferred tax
Total
2021
£M
29
1 479
5
3
AT 31 MARCH
2020
£M
48
1 541
3
–
1 516
1 592
1 The effective interest rate applicable to amounts owed by subsidiary undertakings at 31 March 2021 is 1.7% (2020 – 2.6%). Amounts owed by subsidiary undertakings are receivable
on demand. There is no security for non-trading amounts. The Company has assessed the effect of expected credit loss on amounts owed by subsidiary undertakings and other
debtors and has concluded that no provision is necessary (2020 – £nil).
5. CREDITORS
Due within one year
Amounts owed to subsidiary undertakings1
Other creditors
Accruals and deferred income
Total
AT 31 MARCH
2020
£M
2021
£M
1 195
1 297
7
25
5
18
1 227
1 320
1 The effective interest rate applicable to amounts owed to subsidiary undertakings at 31 March 2021 was 2.2% (2020 – 3.1%). Amounts owed to subsidiary undertakings are repayable
on demand. There is no security for non-trading amounts.
There are £2 million (2020 – £2 million) of cumulative preference shares due after one year. On a return of capital on a winding-up,
the holders of 6.5% cumulative preference shares shall be entitled to £1 per share, in preference to all other classes of shareholders.
Holders of these shares are entitled to vote at meetings, except on the following matters: any question as to the disposal of the surplus
profits after the dividend on these shares has been provided for; the election of directors; their remuneration; any agreement between
the directors and the Company; or the alteration of the Articles of Association dealing with any such matters.
6. BORROWINGS
At 31 March 2021, borrowings of £8 million (2020 – £10 million) relate to lease liabilities. £1 million (2020 – £1 million) of the total relates
to current lease liabilities. Lease liabilities are measured at the present value of the remaining lease payments, discounted using lessee’s
weighted average incremental borrowing rate of 2.1% at the date of IFRS 16 adoption.
TATE & LYLE PLC ANNUAL REPORT 2021 197
TATE & LYLE PLC ANNUAL REPORT 2021
197
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
7. GUARANTEES AND FINANCIAL COMMITMENTS
At 31 March 2021, the Company had given guarantees in respect of committed financing of certain of its subsidiaries and joint ventures
totalling £1,288 million (2020 – £1,282 million), against which amounts drawn totalled £647 million (2020 – £574 million). The Company
had given guarantees in respect of lease commitments of certain of its subsidiaries and joint ventures totalling £192 million (2020 –
£242 million). The Company provides other guarantees in the normal course of business. The Company has assessed the probability
of material loss under these guarantees as remote. In addition, commitments in respect of retirement benefit obligations are detailed
in Note 11.
At 31 March 2021 and 31 March 2020, the Company had no outstanding capital commitments.
8. SHARE CAPITAL AND SHARE PREMIUM
Allotted, called up and fully paid equity share capital
At 1 April
Allotted under share option schemes
At 31 March
YEAR ENDED 31 MARCH 2021
YEAR ENDED 31 MARCH 2020
NUMBER
OF SHARES
COST
£M
NUMBER
OF SHARES
468 401 671
117
468 345 950
56 722
---
55 721
468 458 393
117
468 401 671
COST
£M
117
–
117
Refer to Note 22 in the consolidated financial statements for details of movement in share premium and shares held in the Employee
Benefit Trust.
9. DIVIDENDS ON ORDINARY SHARES
Dividends on ordinary shares in respect of the financial year:
Per ordinary share:
• interim dividend paid
• final dividend proposed
Total dividend
YEAR ENDED 31 MARCH
2021
PENCE
2020
PENCE
8.8
22.0
30.8
8.8
20.8
29.6
The Directors propose a final dividend for the financial year of 22.0p per ordinary share that, subject to approval by shareholders, will be
paid on 6 August 2021 to shareholders who are on the Register of Members on 25 June 2021.
Dividends on ordinary shares paid in the financial year:
Final dividend paid relating to the prior year
Interim dividend paid relating to the year
Total dividend paid
YEAR ENDED 31 MARCH
2021
£M
97
40
137
2020
£M
97
40
137
Based on the number of ordinary shares outstanding at 31 March 2021 and the proposed amount, the final dividend for the financial year
is expected to amount to £102 million.
10. PROFIT AND LOSS ACCOUNT DISCLOSURES
The Company recognised a profit for the year of £153 million (2020 – £199 million).
Fees payable to the Company’s external auditors, Ernst & Young LLP, for the audit of the Company’s financial statements amounted
to £0.1 million (2020 – £0.1 million).
The Company employed an average of 153 people (including Directors) during the year (2020 – 161). Staff costs are shown below:
Wages and salaries
Social security costs
Other pension costs
Share-based incentives
Total
YEAR ENDED 31 MARCH
2021
£M
27
4
3
2
36
2020
£M
27
5
3
5
40
Directors’ emoluments disclosures are provided in the Directors’ Remuneration Report on pages 110 to 128 and in Note 9 of the
consolidated financial statements.
No deferred tax assets have been recognised in respect of tax losses of £341 million (2020 – £341 million) as there is uncertainty
as to whether taxable profits against which these assets may be recovered will be available.
198 TATE & LYLE PLC ANNUAL REPORT 2021
198 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
FINANCIAL STATEMENTS
11. RETIREMENT BENEFIT OBLIGATIONS
Plan information
The Company participates in a defined benefit plan together with another subsidiary company, Tate & Lyle Industries Ltd. In the prior year,
a bulk annuity insurance policy ‘buy-in’ was completed for the main UK scheme, refer to Note 30 of the consolidated financial statements
for further details. The plan is closed to new entrants and future accruals. The Company has 304 pensioners and deferred pensioners out
of a total membership of circa 5,000 (excluding dependent beneficiaries).
The Company also operates a defined contribution pension plan. Contributions payable by the Company to the plan during the year
amounted to £1 million (2020 – £2 million).
The Company has provided a full liability guarantee in respect of the pension obligations of Tate & Lyle Industries Ltd, the other
participating employer.
Funding commitments of the plan
As required by UK regulations, actuarial valuations are carried out every three years. The latest main UK scheme triennial valuation as at
31 March 2019 was concluded during 2019. Following the purchase of the bulk annuity insurance policy (buy-in) in the main UK scheme,
the previously agreed core funding contributions of £18 million per year ceased and the funding triggers linked to the Company’s financial
strength, payable into the secured funding account, are now limited to the residual costs of the scheme. The Company continues to fund
the UK plan administration costs.
12. EVENTS AFTER THE BALANCE SHEET DATE
There are no post balance sheet events requiring disclosure in respect of the year ended 31 March 2021.
TATE & LYLE PLC ANNUAL REPORT 2021 199
TATE & LYLE PLC ANNUAL REPORT 2021
199
O U R
2 0 2 0
H E R O E S
2020 was a year of incredible challenges.
Given the exceptional performance of so
many people across the Company, we
launched a special ‘2020 Heroes Awards’
to recognise those people who had gone
above and beyond in supporting their
colleagues, our communities and
customers during the pandemic.
We asked everyone to nominate their
colleagues that most deserved gratitude
and recognition and we received
575 nominations for individuals and
teams. We whittled these deserving
submissions down to 45 nominees, and
30 eventual winners.
These winners are shown on the divider
pages in this Report to celebrate and
recognise their outstanding contributions.
Read more online at www.tateandlyle.com
200 TATE & LYLE PLC ANNUAL REPORT 2021
AVANTI PATEL
Director, Corporate Development,
London, UK
For working tirelessly to complete our
acquisition of Sweet Green Fields during the
pandemic when travel was not possible, and
bringing global teams together.
JASON STOKES
Control Room Operator, Decatur, Illinois, USA
For going the extra mile since the start of the
pandemic – moving between teams and
locations as needed, and proactively finding
ways to improve our operations.
CATHY RENTSCHLER
TMS Analyst, Decatur, Illinois, USA
For enduring pride in her work, and her ongoing
support both professionally and personally to
colleagues during the pandemic.
JOHANNA MARTINEZ
Application and Technical Service Engineer,
Cali, Colombia
For working across four categories in the
Andean Region, supporting three account
managers, customers and distributors –
and always delivering outstanding work.
RANDALL SQUIREK
Plant Services Coordinator, Lafayette South,
Indiana, USA
For leading Covid-19 preparations in the plant,
remaining proactive and positive, and helping
others do the same.
LORI DONLEY
HR Manager, Decatur, Illinois, USA
For ensuring the safety of everyone in the
Decatur facility, helping colleagues to
understand the Covid-19 protocols and
procedures in place to support them.
SULEY SANIK
Brand Manager, London, UK
For creating a safe space for colleagues to share
experiences and discuss challenges related to
the LGBTQ+ community, and promoting allyship
across Tate & Lyle, helping to move our inclusion
and diversity discussions to a new level.
USEFUL INFORMATION
USEFUL
INFORMATION
IN THIS SECTION
202 Group five-year summary
204 Additional information
205
207 Glossary
208 Definitions/explanatory notes
Information for investors
TATE & LYLE PLC ANNUAL REPORT 2021
201
GROUP FIVE-YEAR SUMMARY
Results summary
Continuing operations
Revenue
Adjusted operating profit
Amortisation of acquired intangible assets
Exceptional items
Operating profit
Adjusted net finance expense*
Net retirement benefit interest expense
Net finance expense
Share of profit after tax of joint ventures and associates
Profit before tax
Income tax credit/(expense)
Profit for the year from continuing operations
Profit for the year from discontinued operations
Non-controlling interests
Profit for the year attributable to owners of the Company
Adjusted profit before tax
2017
£M
2018*
£M
2019
£M
2020
£M
2021
£M
YEAR ENDED 31 MARCH
2 753
2 710
2 755
2 882
2 807
264
(12)
(19)
233
(25)
(7)
(32)
32
233
22
255
1
–
256
271
300
(12)
2
290
(27)
(5)
(32)
28
286
(23)
263
2
–
265
296
305
(11)
(58)
236
(26)
–
(26)
30
240
(59)
181
–
–
181
309
331
(11)
(24)
296
(28)
–
(28)
28
296
(51)
245
–
–
245
331
339
(10)
(42)
287
(30)
---
(30)
26
283
(30)
253
---
---
253
335
* Restated as the Group now includes net retirement benefit interest and associated tax in its alternative performance measures. For the 2018 year presented above net retirement
benefit interest is separated however adjusted net finance expense as restated was £32 million. Years prior to 2018 have not been restated.
2017
£M
2018
£M
2019
£M
342
982
59
401
24
360
965
37
385
18
1 765
1 808
85
(392)
(91)
102
(337)
(84)
401
1 061
30
394
(139)
1 747
96
(452)
(59)
AT 31 MARCH
2020
£M
2021
£M
340
1 190
63
409
(203)
1 799
91
(451)
(40)
354
1 105
59
421
(140)
1 799
104
(417)
(26)
1 332
1 367
1 489
1 399
1 460
117
1 215
1 332
–
117
1 250
1 367
–
117
1 372
1 489
–
117
1 282
1 399
–
117
1 342
1 459
1
1 332
1 367
1 489
1 399
1 460
Employment of capital
Goodwill and intangible assets
Property, plant and equipment
Other assets
Working capital (including provisions and non-debt derivatives)
Net pension (deficit)/surplus
Net operating assets
Investment in joint ventures and associates
Net debt
Net tax liability
Total net assets
Capital employed
Called up share capital
Reserves
Non-controlling interests
Total equity
202 TATE & LYLE PLC ANNUAL REPORT 2021
202 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
Per share information
Earnings per share continuing operations:
• basic (pence)
• diluted (pence)
Basic earnings per share total operations:
• reported (pence)
• adjusted basic (pence)
Diluted earnings per share total operations:
• reported (pence)
• adjusted diluted (pence)
Dividends per ordinary share (pence)
Closing share price at 31 March (pence)
USEFUL INFORMATION
2017
2018*
2019
2020
2021
55.0p
54.2p
55.2p
47.9p
54.4p
47.1p
28.0p
57.0p
56.1p
57.4p
50.3p
56.5p
49.4p
28.7p
39.2p
38.6p
39.2p
52.8p
38.6p
52.0p
29.4p
52.8p
52.1p
52.8p
58.6p
52.1p
57.8p
29.6p
54.4p
53.8p
54.4p
61.9p
53.8p
61.2p
30.8p
764.5p
544.6p
725.8p
656.0p
767.2p
Closing market capitalisation at 31 March (£million)
3 580
2 550
3 399
3 073
3 594
Business ratios
Net debt to EBITDA (times)11
Net debt divided by pre-exceptional EBITDA
Gearing33
Net debt as a percentage of total net assets2
Adjusted operating margin
Adjusted operating profit as a percentage of revenue2
0.9x
0.9x
0.8x
0.9x
0.8x
34%
29%
23%
32%
29%
9.6%
11.1%
11.1%
11.5%
12.1%
Return on capital employed
14.3%
16.2%
17.1%
17.5%
17.2%
Profit before interest, tax and exceptional items as a percentage
of invested operating capital2
Dividend cover (times)
Basic earnings per share divided by dividends per share2
Adjusted basic earnings per share divided by dividends per share2
2.0x
1.7x
2.0x
1.8x
1.4x
1.8x
1.8x
2.0x
1.8x
2.1x
1 Following the refinancing of the revolving credit facility in the year to 31 March 2020 (refer to Note 25) the amended covenant definitions were adopted. In light of this, the Group has
simplified the calculation of these KPIs to make them more directly related to information in the Group’s financial statements. Years prior to the 2018 financial year have not been
restated here and are calculated based on the applicable covenant definition. Refer to Note 4.
2 These metrics have been calculated using the results of both continuing and discontinued operations.
3 During the year ended 31 March 2020 the Group adopted IFRS 16 without restating comparatives. On a like-for-like basis the ratios for Net debt to EBITDA, Gearing and Return
on capital employed were 0.6 times, 20% and 17.9%, respectively.
* Restated as the Group now includes net retirement benefit interest and associated tax in its alternative performance measures. Years prior to 2018 have not been restated.
TATE & LYLE PLC ANNUAL REPORT 2021 203
TATE & LYLE PLC ANNUAL REPORT 2021
203
ADDITIONAL INFORMATION
CURRENCY EXCHANGE RATES
The principal exchange rates used to translate the results, assets and liabilities and cash flows of the Group’s foreign operations into
pounds sterling were as follows:
Average rates
US dollar
Euro
Year-end closing rates
US dollar
Euro
YEAR ENDED 31 MARCH
2021
£1 =
1.31
1.12
1.38
1.17
2020
£1 =
1.27
1.14
1.25
1.13
CALCULATION OF CHANGES IN CONSTANT CURRENCY
Where changes in constant currency are presented in this statement, they are calculated by retranslating current year results at prior
year exchange rates. The following table provides a reconciliation between the 2021 performance at actual exchange rates and at constant
currency exchange rates. Absolute numbers presented in the tables are rounded for presentational purposes, whereas the growth
percentages are calculated on unrounded numbers.
Adjusted performance
CONTINUING OPERATIONS
Revenue
Food & Beverage Solutions
Sucralose
Primary Products
Central
Adjusted operating profit
Net finance expense
Share of profit after tax of joint ventures
Adjusted profit before tax
Adjusted income tax expense
Adjusted profit after tax
Adjusted diluted EPS (pence)
2021
£M
2 807
177
55
158
(51)
339
(30)
26
335
(48)
287
2021 AT
CONSTANT
CURRENCY
£M
2 898
181
57
167
(52)
353
(30)
29
352
(48)
304
FX
£M
91
4
2
9
(1)
14
–
3
17
–
17
UNDERLYING
GROWTH
£M
16
19
(6)
9
–
22
(2)
1
21
11
32
2020
£M
2 882
162
63
158
(52)
331
(28)
28
331
(59)
272
61.2p
3.6p
64.8p
7.0p
57.8p
CHANGE IN
CONSTANT
CURRENCY
%
CHANGE
%
(3%)
10%
(12%)
(1%)
1%
2%
(7%)
(6%)
1%
19%
6%
6%
1%
12%
(9%)
5%
–%
7%
(9%)
7%
6%
19%
12%
12%
204 TATE & LYLE PLC ANNUAL REPORT 2021
204 TATE & LYLE PLC ANNUAL REPORT 2021
Internal Use Only
INFORMATION FOR INVESTORS
SHAREHOLDER ENQUIRIES
ORDINARY SHARES
Equiniti Limited
Information about how to manage your shareholdings can be found at www.shareview.co.uk. The website also provides answers
to commonly asked shareholder questions and has links to downloadable forms, guidance notes and Company history fact sheets.
You can also send your enquiry via secure email from the Shareview website.
USEFUL INFORMATION
Telephone enquiries
0371 384 2063 (for UK calls)1
+44 (0)121 415 0235 (for calls from outside the UK)
1 Lines open 8.30am to 5.30pm (UK time), Monday to Friday (excluding public holidays in England and Wales).
Written enquiries
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA.
AMERICAN DEPOSITARY SHARES (ADS)
Citibank Shareholder Services
The Company’s shares trade in the US on the over-the-counter (OTC) market in the form of ADSs and these are evidenced by
American Depositary Receipts (ADRs). The shares are traded under the ticker symbol TATYY.
Telephone and email enquiries
Tel: 1-877-CITI-ADR (toll free)
Tel: 1-781-575-4555 (outside US)
Fax 1-201-324-3284
E-mail: Citibank@shareholders-online.com
Written enquiries
Citibank Shareholder Services
P.O. Box 43077
Providence,
Rhode Island 02940-3077
USA
TATE & LYLE WEBSITE AND SHARE PRICE INFORMATION
Tate & Lyle’s website provides other information relevant
to shareholders of the Company. The share price is available
on the website with a 20-minute delay.
TATE & LYLE PLC ANNUAL REPORT 2021
205
INFORMATION FOR INVESTORS CONTINUED
FINANCIAL CALENDAR
2021 Annual General Meeting
Announcement of half-year results for the six months to 30 September 2021
Announcement of full-year results for the year ending 31 March 2022
2022 Annual General Meeting
DIVIDENDS PAID ON ORDINARY SHARES DURING THE YEAR ENDED 31 MARCH 2020
PAYMENT
31 July 2020
6 January 2021
DIVIDEND CALENDAR FOR DIVIDENDS ON ORDINARY SHARES
Announced
Payment date
1 Provisional date.
2 Subject to approval of shareholders.
DIVIDENDS PAID ON 6.5% CUMULATIVE PREFERENCE SHARES
Paid each 31 March and 30 September.
29 July 2021
4 Nov 20211
26 May 20221
28 July 20221
DIVIDEND
DESCRIPTION
Final 2020
Interim 2021
DIVIDEND
PER SHARE
20.8p
8.8p
2021
FINAL
2022
INTERIM
2022
FINAL
27 May 2021
6 August 20212
4 November 20211
5 January 20221
26 May 20221
2 August 20221,2
CAPITAL GAINS TAX
The market values on 31 March 1982 for the purposes of indexation up to April 1998 in relation to capital gains tax of Tate & Lyle PLC
shares then in issue were:
Ordinary share of £1 each
Equivalent value per ordinary share of 25p
6.5% cumulative preference share
201.00p
50.25p
43.50p
ELECTRONIC COMMUNICATIONS
Shareholder documents are only sent in paper format to shareholders who have elected to receive documents in this way.
This approach enables the Company to reduce printing and distribution costs and the impact of the documents on the environment.
Shareholders who wish to receive email notification should register online at www.shareview.co.uk, using their shareholder reference
number that is on either their share certificate or other correspondence.
DIVIDEND PAYMENTS
Dividend reinvestment plan
The Company operates a Dividend Reinvestment Plan (DRIP) which enables shareholders to use their cash dividend to buy additional
shares in Tate & Lyle PLC. Further information can be obtained from Equiniti.
Direct into your bank account
We encourage shareholders to have their dividends paid directly into their bank or building society account; dividend confirmations
are then mailed to shareholders separately. This method avoids the risk of dividend cheques being delayed or lost in the post. If you
live outside the UK, Equiniti also offers an overseas payment service whereby your dividend is converted into your local currency.
Further information on mandating your dividend payments and the overseas payment service can be obtained from Equiniti.
BEWARE OF SHARE FRAUD
Shareholders should be very wary of any unsolicited calls or correspondence offering to buy or sell shares at a discounted price.
These calls are typically from fraudsters operating ‘boiler rooms’. Boiler rooms use increasingly sophisticated means to approach
investors and often leave their victims out of pocket. If you are concerned that you may have been targeted by fraudsters please contact
the Financial Conduct Authority (FCA) Consumer Helpline on 0800 111 6768.
206 TATE & LYLE PLC ANNUAL REPORT 2021
GLOSSARY
A
Acidulants
Ingredients such as citric acid that are
used to add a ‘sour’ taste to food and soft
drinks and to act as a preservative.
Adjusted free cash flow
Adjusted free cash flow represents cash
generated from continuing operations
after net interest and tax paid, after capital
expenditure and excluding the impact of
exceptional items.
Adjusted operating profit (PBITEA)
Operating profit (as defined separately),
adjusted for amortisation of acquired
intangible assets and net exceptional
items.
Adjusted profit before tax (PBTEA)
Profit before tax (as defined separately),
adjusted for amortisation of acquired
intangible assets and net exceptional
items.
B
Bio-PDOTM
Multi-purpose monomer propanediol
made from corn (as opposed to being
made from a petrochemical source).
Used in cosmetics, detergents, carpets
and textiles.
C
Carbon dioxide equivalent (CO2e)
One metric tonne of carbon dioxide or an
amount of any other greenhouse gas with
an equivalent global warming potential,
calculated consistently with international
carbon reporting practices.
CLARIA® Functional Clean-Label
Starches
A line of clean-label starches with neutral
taste and colour comparable to normal
modified starches that is versatile across
a broad range of applications and
sophisticated processes.
‘Clean label’
A term used in the food and beverage
industry generally to refer to shorter or
simpler ingredient lists or less processed
ingredients that appeal more to some
consumers than those containing complex
ingredients. Interpretations may vary.
Commodities
Commodities include corn and basis, US
ethanol and co-products.
USEFUL INFORMATION
Constant currency
Where changes in constant currency
are presented, they are calculated by
retranslating current year results at
prior year exchange rates. Reconciliation
between the 2021 performance at actual
exchange rates and at constant currency
exchange rates have been included in the
additional information on page 204.
Continuing operations
Operations of the Group excluding any
discontinued operations
(as defined separately).
Co-products
Corn gluten feed, corn gluten meal and
corn oil.
D
Discontinued operations
An operation is classified as discontinued
if it is a component of the Group that:
(i) has been disposed of, or meets the
criteria to be classified as held for sale;
and (ii) represents a separate major line of
business or geographic area of operations;
or will be disposed of as part of a single
co-ordinated plan to dispose of a separate
major line of business or geographic area
of operations.
DOLCIA PRIMA® Allulose
Low-calorie sugar that offers a superior,
new taste experience.
N
New Products
New Products are products in the first
seven years after launch.
O
Operating profit (also referred to as profit
before interest and tax (PBIT))
Revenue less net operating expenses.
P
Profit before tax (PBT)
Sales, less net operating expense, less net
finance expense and including the Group’s
share of profit after tax of joint ventures.
PROMITOR® Soluble Fibre
A prebiotic soluble fibre.
S
Stabiliser Systems
Systems customising ingredient blends to
improve product mouthfeel, texture and
stability profile.
STA-LITE® Polydextrose
A soluble fibre with prebiotic properties
made from corn and used to provide body
and texture in reduced calorie, no-added
sugar and high-fibre foods.
Sucralose
A operating segment and part of the
Food & Beverage Solutions division.
E
EHSQS
Environment, Health, Safety, Quality
and Security.
T
TASTEVA® M Stevia Sweetener
A zero-calorie sweetener made
from stevia.
TEXTURE-VANTAGE® Expert Systems
Cutting-edge texture design tools aim
at predicting product and ingredient
performance and reducing development
time.
G
Greenhouse gas (GHG)
Any of the following: carbon dioxide (CO2),
methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), sulphur
hexafluoride (SF6).
H
High fructose corn syrup
High fructose corn syrup is widely used
as a substitute for sugar in North America.
Also called isoglucose in Europe.
TATE & LYLE PLC ANNUAL REPORT 2021
207
DEFINITIONS/EXPLANATORY NOTES
DEFINITIONS
In this Annual Report:
• ‘Company’ means Tate & Lyle PLC
• ‘Tate & Lyle’, ‘Group’, ‘we’, ‘us’ or ‘our’
means Tate & Lyle PLC and its
subsidiaries
• ‘Gemacom’ means Tate & Lyle Gemacom
Tech Indústria e Comércio S.A.
• ‘Almex’ means Almidones Mexicanos SA
• ‘Bio-PDO’ means DuPont Tate & Lyle Bio
Products Company, LLC
• ‘during the year’ means during the
financial year ended 31 March 2021.
NON-RELIANCE STATEMENT
This Annual Report has been prepared
solely to provide additional information
to shareholders to assess the Group’s
strategy and the potential of that strategy
to succeed, and should not be relied upon
by any other party or for any other purpose.
CAUTIONARY STATEMENT
This Annual Report contains certain
forward-looking statements with respect
to the financial condition, results,
operations and businesses of Tate & Lyle
PLC. These statements and forecasts
involve risk and uncertainty because
they relate to events and depend upon
circumstances that may occur in the
future. There are a number of factors
that could cause actual results or
developments to differ materially from
those expressed or implied by these
forward-looking statements and forecasts.
TATE & LYLE PLC
Tate & Lyle PLC is a public limited company
listed on the London Stock Exchange and is
registered in England and Wales.
More information about Tate & Lyle can
be found on the Company’s website,
www.tateandlyle.com
ENVIRONMENTAL STATEMENT
This Annual Report has been printed on
Heaven 42 and UPM Fine offset, which are
both Forest Stewardship Council® (FSC®)
certified paper.
The paper is Carbon Balanced with World
Land Trust, an international conservation
charity, which offset carbon emissions
through the purchase and preservation of
high conservation value land. Through
protecting standing forests, under threat
of clearance, carbon is locked in that would
otherwise be released. These protected
forests are then able to continue absorbing
carbon from the atmosphere, referred to
as REDD (Reduced Emissions from
Deforestation and forest Degradation).
This is now recognised as one of the most
cost-effective and swiftest ways to arrest
the rise in atmospheric CO2 and global
warming effects. Additional to the carbon
benefits is the flora and fauna this land
preserves, including a number of species
identified at risk of extinction on the
IUCN Red List of Threatened Species.
Printed in the UK by Pureprint Group,
a CarbonNeutral® Company with
FSC® certification.
If you have finished with this Annual Report
and no longer wish to retain it, please pass
it on to other interested readers or dispose
of it in your recycled paper waste.
208 TATE & LYLE PLC ANNUAL REPORT 2021
Registered office
Tate & Lyle PLC
1 Kingsway
London WC2B 6AT
Tel: +44 (0)20 7257 2100
Fax: +44 (0)20 7257 2200
Company number: 76535
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