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TRANSFORMING LIVES
THROUGH THE
SCIENCE OF FOOD
ANNUAL REPORT 2022
PURPOSE-
LED
GROWTH
Our purpose is transforming lives
through the science of food.
Today, the demand for more
nutritious food and the desire to live
healthier lifestyles are greater than
ever. Through our deep scientific
knowledge, passion for innovation
and leading expertise in sweetening,
mouthfeel and fortification, we
create solutions that make food and
drink healthier and tastier.
Working with our customers,
we reduce calories, sugar and fat
in their products, and add fibre,
to make people’s favourite foods
even better.
Every day, across the world, millions
of people enjoy products containing
our solutions.
CONTENTS
INTRODUCTION
2
4
A snapshot of Tate & Lyle
Our growth opportunity
STRATEGIC REPORT
OUR BUSINESS TODAY
12 Chair’s statement
14 Chief Executive’s review
22 The world around us
24 Our business model
26 Our strategy
28 Key performance indicators
REVIEW OF THE YEAR
32
Continuing operations: Food & Beverage
Solutions
34 Continuing operations: Sucralose
35
Discontinued operations: Primary Products
in the Americas
Innovation and Commercial Development
36 Global Operations
37
38 Chief Financial Officer’s introduction
39 Group financial review
44 Our people
50 Community involvement
52 Environment, health and safety
63
Task Force on Climate-related Financial
Disclosures
68 Risk report
GOVERNANCE
78 Board of Directors
82 Executive Committee
84 Corporate governance
100 Nominations Committee Report
102 Audit Committee Report
108 Directors’ Remuneration Report
127 Directors’ Report
129 Directors’ statement of responsibilities
FINANCIAL STATEMENTS
132 Independent Auditor’s Report to the
members of Tate & Lyle PLC
140 Consolidated income statement
141 Consolidated statement of comprehensive
income
142 Consolidated statement of financial position
143 Consolidated statement of cash flows
144 Consolidated statement of changes in equity
145 Notes to the consolidated financial statements
195 Parent Company financial statements
USEFUL INFORMATION
204 Group five-year summary
206 Additional information
207 Information for investors
208 Glossary
208 Definitions/explanatory notes
Visit tateandlyle.com/purpose to read more
about our purpose
Tate & Lyle PLC Annual Report 2022
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Tate & Lyle PLC Annual Report 2022
2
INTRODUCTION
A SNAPSHOT OF TATE & LYLE
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.
OUR BUSINESS
PEOPLE
3,167
EMPLOYEES GLOBALLY1
SITES
57
PLANTS, OFFICES AND CUSTOMER
INNOVATION AND COLLABORATION
CENTRES ACROSS THE WORLD1
LABS
16
GLOBAL NETWORK OF
CUSTOMER INNOVATION AND
COLLABORATION CENTRES2
COUNTRIES
122
CUSTOMERS SERVED IN 122 COUNTRIES1
CORE CATEGORIES
4
OUR INGREDIENTS AND SOLUTIONS ARE
USED IN A RANGE OF CATEGORIES, BUT
MAINLY BEVERAGES, DAIRY, BAKERY, AND
SOUPS, SAUCES AND DRESSINGS
1 At 1 April 2022, after business separation.
2 At 8 June 2022.
Tate & Lyle PLC Annual Report 2022
FOOD & BEVERAGE SOLUTIONSProvides customers with innovative ingredients and solutions that deliver sweetening, mouthfeel and fortification to a wide range of foods and beverages. This business includes sucralose, although we report its results separately. Read more on PAGE 32INNOVATION AND COMMERCIAL DEVELOPMENTDevelops new products through our innovation pipeline and combines leading-edge science with market insight, local knowledge and a deep understanding of our customers to create solutions which help reduce sugar, calories and fat, and add fibre, to food and drink.Read more on PAGE 37GLOBAL OPERATIONSManages our global supply chain. As well as ensuring the safe and efficient operation of our production facilities, it procures raw materials and makes sure our ingredients and solutions reach our customers on time and to the right specification.Read more on PAGE 36 3
OUR PERFORMANCE
FINANCIAL PERFORMANCE
year ended 31 March 2022
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE PERFORMANCE
GROUP STATUTORY RESULTS
REVENUE — CONTINUING
OPERATIONS1
PROFIT BEFORE TAX —
CONTINUING OPERATIONS
£1,375m £42m
£1,375m
2022 £42m
2022
2021
ENVIRONMENTAL
12%
REDUCTION IN SCOPE 1 AND 2
GREENHOUSE GAS EMISSIONS1
83%
£1,211m
2021
£90m
WASTE BENEFICIALLY USED1
DILUTED EARNINGS PER
SHARE — TOTAL OPERATIONS
NET DEBT²
50.2p
2022
2021
50.2p
53.8p
£626m
2022
£626m
2021
£417m
ALTERNATIVE PERFORMANCE MEASURES³
1.4m
ACRES OF SUSTAINABLE
CORN SUPPORTED
SOCIAL
42%
WOMEN IN LEADERSHIP AND MANAGEMENT ROLES2
2.9m
ADJUSTED PROFIT BEFORE
TAX — CONTINUING OPERATIONS
ADJUSTED DILUTED EARNINGS PER
SHARE — CONTINUING OPERATIONS
MEALS DONATED THROUGH FOOD BANKS
AND OTHER CHARITABLE PARTNERS3
£145m
24.9p
2022
2021
£145m
£134m
2022
2021
24.9p
25.2p
RETURN ON CAPITAL EMPLOYED —
TOTAL OPERATIONS
ADJUSTED FREE CASH FLOW
— TOTAL OPERATIONS
14.9%
£16m
2022
20214
14.9%
2022 £16m
17.3%
2021
£250m
1 Continuing operations comprise: Food & Beverage Solutions (into which the European Primary
Products business and some stranded costs have been combined); Sucralose and Central costs.
2 Net debt is not itself defined by IFRS. It comprises line items that are IFRS-defined terms.
See Note 28.
3 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.
4 Restated for changes in accounting policy. See Notes 1 and 38.
4.0m
TONNES OF SUGAR REMOVED FROM DIETS
THROUGH LOW-/NO CALORIE SWEETENERS AND FIBRES3
GOVERNANCE
45%
OF BOARD OF DIRECTORS ARE WOMEN4
56%
OF EXECUTIVE COMMITTEE ARE WOMEN4
4
ESG METRICS PART OF REMUNERATION TARGETS5
1 From baseline of year ended 31 December 2019; Total operations.
2 At 1 April 2022, after business separation.
3 From baseline of 31 March 2020.
4 At 8 June 2022.
5 From 2022 financial year; long-term share incentive plan.
Tate & Lyle PLC Annual Report 2022
4
INTRODUCTION
YUM YUM
YUM YUM
YUM YUM
YUM YUM
YUM YUM
Tate & Lyle PLC Annual Report 2022
YUM YUM
YUM YUM
YUM YUM
YUM YUM
YUM YUM
5
OUR GROWTH OPPORTUNITY:
CONSUMER TRENDS
THE WAY THE WORLD EATS IS
CHANGING. PEOPLE WANT LESS
SUGAR, LESS FAT AND MORE
FIBRE IN THEIR FOOD, AS LONG AS
IT STILL TASTES GREAT. THEY ALSO
WANT MORE PLANT-BASED AND
SUSTAINABLE CHOICES.
THE POTENTIAL GROWTH
OPPORTUNITY IS TREMENDOUS —
AND IT’S WHAT WE DO BEST.
95%
CONSUMERS REDUCED
THEIR INTAKE OF SUGAR
IN FOOD IN PAST YEAR1
53%
PEOPLE PLAN TO EAT OR
DRINK MORE FIBRE2
84%
CONSUMERS READ
INGREDIENT LABELS
ALWAYS/SOMETIMES2
49%
PEOPLE ARE REDUCING
OR ELIMINATING MEAT TO
BE MORE SUSTAINABLE3
1 Tate & Lyle proprietary research, 2020 Global Consumer Ingredient Perception Research (14 countries).
2 Tate & Lyle proprietary research, 2020/21 Global Consumer Ingredient Perception Research (17 countries).
3 FMCG Gurus, Top 10 Trends for 2022, Global Report.
Tate & Lyle PLC Annual Report 2022
6
INTRODUCTION
THE
BRAINS
BEHIND
Tate & Lyle PLC Annual Report 2022
7
OUR GROWTH OPPORTUNITY:
SCIENCE-LED SOLUTIONS
OUR SCIENTISTS AND NUTRITIONISTS
ARE PASSIONATE ABOUT CREATING
GREAT-TASTING, HEALTHIER FOOD.
EXPERTS IN THEIR FIELDS, THEY ALSO
UNDERSTAND THAT FOOD IS TO BE
CELEBRATED AND ENJOYED.
We lead the field in sweetening, mouthfeel and fortification – three essential
attributes consumers look for in their favourite products.
SWEETENING
We have over 160 years of experience and knowledge of the science of
sweetness. We understand the importance of taste: our scientists are
experts at taking sugar and calories out, while keeping the all-important
sweetness and taste that define our customers’ brands.
MOUTHFEEL
How food feels in the mouth is just as important as how it tastes.
From low-fat or low-calorie to clean label or gluten-free, our
range of texturants adds body, replaces fat and extends the
shelf-life of our customers’ products.
FORTIFICATION
Making tasty food healthier is as much about putting things in as it is about
taking things out. We’re experts at adding fibre, which not only supports
digestive health, but can also be used to reduce sugar and calories, lower
glycaemic response and help with managing cholesterol.
Tate & Lyle PLC Annual Report 2022
8
INTRODUCTION
OUR GROWTH OPPORTUNITY:
PARTNERSHIPS WITH
CUSTOMERS
SERVING OUR CUSTOMERS IS AT
THE HEART OF EVERYTHING WE
DO. THAT’S WHY WE HAVE A
NETWORK OF CENTRES AROUND
THE WORLD TO HELP OUR
CUSTOMERS FORMULATE THEIR
PRODUCTS FOR LOCAL TASTES
IN LOCAL MARKETS.
16
CUSTOMER INNOVATION AND
COLLABORATION CENTRES
ACROSS THE WORLD1
1 At 8 June 2022.
2 Year ended 31 March 2022.
Tate & Lyle PLC Annual Report 2022
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NEW PRODUCTS LAUNCHED LAST YEAR
FROM OUR INNOVATION PIPELINE2
9
WINNING
TOGETHER
Tate & Lyle PLC Annual Report 2022
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OUR BUSINESS TODAY
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Tate & Lyle PLC Annual Report 2022
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STRATEGIC
REPORT
1 OUR BUSINESS TODAY
12 Chair’s statement
14 Chief Executive’s review
22 The world around us
24 Our business model
26 Our strategy
28 Key performance indicators
2 REVIEW OF THE YEAR
32 Continuing operations: Food & Beverage Solutions
34 Continuing operations: Sucralose
35
Discontinued operations: Primary Products
in the Americas
Innovation and Commercial Development
36 Global Operations
37
38 Chief Financial Officer’s introduction
39 Group financial review
44 Our people
50 Community involvement
52 Environment, health and safety
63
68 Risk report
Task Force on Climate-related Financial Disclosures
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 12
OUR BUSINESS TODAY
CHAIR’S
STATEMENT
A year of major change
and achievement:
Another demanding
year brought out the
best in our people, who
succeeded in delivering
a major transformation
of the business while
also delivering a strong
financial performance.
It has been another challenging year with
the global pandemic, disruption to global
supply chains and rapidly increasing
inflation all presenting hurdles to
progress. We made big demands of
our people again this year and it is to their
huge credit that they not only delivered
strong financial results but also the
transformational event of separating the
company into two standalone businesses,
Tate & Lyle and Primient. I know I speak
for the whole Board in expressing my
appreciation for our people’s achievements
and the hard work it took to deliver them.
I’d also like to thank Nick and his team for
the clarity of leadership they provided,
guided as ever by our purpose, which
continued to be the glue that bound people
together when we weren’t able to meet
in person. Keeping people informed,
connected and focused on what’s
important is essential in challenging times,
and Tate & Lyle’s communications to, and
interactions with, colleagues during the
year were second to none. I have no doubt
that the humanity and empathy that
emanated from leadership have been
instrumental in galvanising the whole
Company to deliver a landmark year for
Tate & Lyle.
CREATING TWO STRONGER BUSINESSES
A long time in the planning and
preparation, the separation of the Group
into the two standalone businesses of
Tate & Lyle and Primient – announced in
July 2021 and completed on 1 April 2022 –
was a complex transaction that’s been
well executed. It is ultimately about
giving two companies with quite different
characteristics the right ownership,
capital structure and corporate objectives
for their respective businesses. Primient
is better controlled by a shareholder
whose principal interest is to invest in
a stable, cash-generative business;
while Tate & Lyle is better served by
investors looking for investment in growth.
We are grateful for the support of our
shareholders and are excited by the
prospects for both companies.
A PROGRESSIVE DIVIDEND FROM OUR NEW BASE
As a result of the transaction, which was
approved by shareholders at a general
meeting on 30 September 2021, we
returned approximately £500 million to
ordinary shareholders on 16 May 2022
by way of a special dividend with an
associated share consolidation. More
details can be found on page 41. Looking
ahead, as previously announced and
consistent with the sale of a controlling
stake in Primient, the Board has decided
to reduce the dividend to reflect the
smaller earnings base of the new
Tate & Lyle. The pay-out ratio, excluding
any Primient earnings, has been
maintained and the dividend per share
reduced by around 50% before the share
consolidation. The Board intends to
operate a progressive dividend policy
from the new base. Reflecting this and the
impact of the share consolidation, the
Board is recommending a final dividend
for the year ended 31 March 2022 of
12.8p (2021 – 22.0p) per share, bringing
the full year dividend to 21.8p per share
(2021 – 30.8p). This will be paid on 5 August
2022 to shareholders on the Register of
Members on 1 July 2022.
DELIVERING GROWTH
Turning to this year’s results, what really
stands out is the continued strong growth
of our Food & Beverage Solutions
business, which is the heart of the new
Tate & Lyle. This reflects a sustained
period of investment in capabilities and
people, and in building a management
team focused on growth. As well as
delivering strong organic growth, I’m
pleased with the steps we are taking to
grow by acquisition. The integrations of
the stevia and tapioca businesses in China
and Thailand respectively, acquired in
the 2021 financial year, are progressing
well, and in March 2022 we announced
the acquisition of Quantum Hi-Tech
(Guangdong) Biological Co., Ltd, a leading
prebiotic dietary fibre business in China.
These acquisitions are important as they
expand our business and presence in the
higher growth markets of Asia, and add
new products to our portfolio to support
our customer solutions offering.
LESSONS LEARNT FROM THE PANDEMIC
The pandemic has continued to pose
immense challenges for our people
and the communities where we operate.
But it has also taught us some lessons that
we are keen to retain in the years to come.
As a Board, we are planning to operate
more nimbly and flexibly. Like the rest
of the company, we’ve learnt to use
technology and virtual meetings to
do routine tasks efficiently, with
correspondingly less stress on people
and their families, and less impact on
the planet. We’ll get together physically
slightly less often, but when we do, we
will be more thoughtful about it because,
through the pandemic, we all learnt from
its absence the value of being together.
Human interaction can be suspended for
a while, but it is ultimately irreplaceable.
Keeping this front of mind will be central
to Tate & Lyle in the future, as will the
resilience and agility we all had to find
in ourselves and with each other.
Tate & Lyle PLC Annual Report 2022
13
The business is now fully
focused on creating healthier
and tastier food and drink, a
growing trend across the world
that is here to stay.
GERRY MURPHY Chair
STRENGTHENING THE BOARD
Talking of the future, I am delighted to
welcome Dawn Allen, our new Chief
Financial Officer, to the Board from 16 May
2022. Dawn comes from the world of our
customers. With over two decades of
experience in the food industry and a
proven track record of financial leadership
at Mars Incorporated, she is an outstanding
addition to our Board and executive team.
Dawn replaces Vivid Sehgal, who stepped
down in November, and I’d like to thank
Vivid on behalf of the Board for his
contribution to the business. We also
welcomed Dr Isabelle Esser to the Board
as a non-executive director on 1 June
2022. Isabelle has over 30 years’
experience in global consumer food and
ingredient companies and is currently
Chief Research, Innovation and Food
Quality Safety Officer at Danone. Her
scientific and technology expertise will be
of great benefit to the Board as we look to
become a more science-driven business.
A PURPOSEFUL BUSINESS
Our purpose continues to be a powerful
motivator for our people and acts as our
guide through these uncertain times.
It has been inspiring to see how colleagues
have lived our purpose over the past year,
whether through projects that support
people’s mental and physical health,
working in food banks to feed people
in need, or initiatives that protect and
improve the environment in the areas
where we operate. It was no surprise
that, when the conflict in Ukraine erupted,
our people in Łód´z, Poland and Boleráz,
Slovakia, went straight into action to
provide much-needed clothing, food,
shelter and medicine for refugees
arriving in their cities from Ukraine.
Our global employee matching scheme
to support Ukrainian refugees with
financial donations has also been very
well supported.
Making progress on equity, diversity and
inclusion is core to our purpose and very
important to our Board. As of the date of
this report, 45% of our Board, 56% of our
Executive Committee, and 42% of our
top 500 managers in the business are
women. We were also pleased to see
our leadership team setting meaningful,
stretching targets around equity, diversity
and inclusion over the next ten years (see
page 49). These will be just as important
to the future success of Tate & Lyle as the
investments we are making in assets,
people and capabilities.
Our purpose continues
to be a powerful
motivator for our
people and acts as our
guide through these
uncertain times.
While the world is facing a number of
short-term challenges, tackling the
climate change crisis and protecting our
natural resources for future generations
continues to be the most significant
long-term challenge. We have an important
part to play as a business with an integral
role in the food supply chain. That’s why
I am pleased to see the good progress we
made against our environmental targets
and commitments this year – and in
particular, eliminating the use of coal in
all our operations four years ahead of
schedule. The Board is also pleased that
the business is making a commitment to
become carbon net zero by 2050, more
details of which you can find on page 58.
To emphasise the importance of these
ambitions, we have added targets for
greenhouse gas emissions, beneficial use
of waste, water use and gender equality to
the metrics used for our long-term share
incentive plan.
LOOKING AHEAD
The whole sustainability ecosystem is on
the brink of change. The world needs to
move from a mindset of doing things that
are bad for the planet less harmfully, to
doing different things that are intrinsically
less harmful. This change is often
positioned as a threat, but it could just
as easily be an opportunity, and we must
embrace change quickly and spend time
thinking about creative and innovative
ways of feeding people in a more
sustainable way. I have no doubt that the
new Tate & Lyle is well positioned to do
this. The business is now fully focused on
creating healthier and tastier food and
drink, a growing trend across the world
that is here to stay.
At the start of a year that we knew would
be demanding, I was confident that the
quality and resilience of our business
would shine through – and thanks to our
excellent people, that’s exactly what we
saw. This experience gives me even
greater confidence for what lies ahead.
The opportunities for our business and the
world are challenging as well as exciting,
but I know that we have the right people,
the right products and the right capabilities
to thrive, whatever the future brings.
GERRY MURPHY
Chair
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 14
OUR BUSINESS TODAY
CHIEF
EXECUTIVE’S
REVIEW
HIGHLIGHTS¹
REVENUE GROWTH
— CONTINUING OPERATIONS
+18%
GROWTH IN ADJUSTED PROFIT
BEFORE TAX
— CONTINUING OPERATIONS
+14%
GROWTH IN ADJUSTED DILUTED
EARNINGS PER SHARE
— CONTINUING OPERATIONS
+4%
– Tate & Lyle (continuing
operations) delivered double-
digit revenue and profit growth
– Strong innovation performance
– Major strategic divestment
repositions Tate & Lyle as a
growth-focused business
– Agreement to acquire leading
dietary fibre business in China
– 2030 sustainability metrics
on track
– New equity, diversity and
inclusion metrics established
– Strong balance sheet
supporting investment for
growth and c.£500 million
special dividend paid in
May 2022
1 Percentage growth in constant currency.
2 Excludes Sucralose and the retained Primary
Products business in Europe.
Tate & Lyle PLC Annual Report 2022
Unlocking our growth
potential: This has
been a landmark year
as we repositioned
Tate & Lyle as a
growth-focused
speciality food and
beverage solutions
business.
I am very proud of how our colleagues
have risen to the many challenges of the
past year, delivering a strong financial
performance while also completing a
major strategic transformation to create
two strong standalone companies. To do
this during a global pandemic while living
our purpose, serving our customers and
accelerating innovation is truly remarkable
and a testament to their resilience, agility
and ambition. In many ways the last 12
months have been even tougher than the
first year of the pandemic, as everyone
started the year exhausted from that
experience. Despite that, we have thrived
as a business, emerging stronger and
positioning both Tate & Lyle and Primient
for exciting futures with capacity for
investment and opportunities for growth.
REPOSITIONING TATE & LYLE AS A GROWTH-
FOCUSED BUSINESS
In July 2021, we announced we had entered
into an agreement to sell a controlling
stake in our Primary Products business
in North America and Latin America, and
our interests in the Almex and DuPont
Tate & Lyle Bio-Products joint ventures
(together called Primient), to KPS Capital
Partners, LP (KPS). The details of the
transaction, which was completed on
1 April 2022, and the shape of the two
companies, are set out on pages 16 and 17.
This transaction represents an ambitious
and bold step forward for Tate & Lyle. By
enabling Primient to chart its own future,
Tate & Lyle has been transformed into a
purpose-led, growth-focused food and
beverage solutions business serving
faster-growing speciality markets. Our
unique product portfolio and leading
technical capabilities in sweetening,
mouthfeel and fortification position us very
well to benefit from the growing demand
for food and drink that is lower in sugar,
calories and fat, and with added fibre.
To support this growth, we are increasing
our investment in R&D, innovation and
solutions development. We will increase
spend on R&D to more than 4% of Food &
Beverage Solutions’ revenue each year,
and we expect to grow revenue from
New Products to around 20% of Food &
Beverage Solutions’ revenue by the end
of the 2027 financial year.
With our new focus, positive top-line
momentum, and increased investment
in innovation, we are confident we have a
strong platform from which to accelerate
growth. Our ambition for the five years
ending 31 March 2027 is to:
– Deliver organic revenue growth of
mid-single digit percent each year
– Expand operating margin by at least 50
to 100 basis points each year on average
– Improve organic return on capital
employed by 50 basis points each year
on average.
We will also continue to accelerate growth
through value-enhancing acquisitions.
The performance of Food & Beverage
Solutions over the four years ended
31 March 2022, a compound annual
revenue growth of 8%2, supports our
ambition and shows the potential of
Tate & Lyle as a growth-focused business.
The transaction also gives Primient the
opportunity as an independent company to
unlock its growth potential. We have been
impressed with KPS and are excited to
partner with them in the next phase of
Primient’s development. KPS has proven
15
Thanks to the superb efforts
of our people and resilience
of our business, we have
not only survived the
pandemic but thrived,
emerging as a stronger
business ready to seize the
opportunities ahead.
NICK HAMPTON Chief Executive
expertise in managing and creating value
from large manufacturing businesses,
and we look forward to working with them
under the long-term agreements we
have established which provide supply
security and economic protection to both
businesses. We will also benefit from
ongoing cash dividends from Primient and
potential future value creation from the
49.9% equity stake we have retained.
Two standalone companies
Creating value for all our stakeholders
was at the heart of our decision to separate
into two companies. Over the last five
years, our two divisions have grown into
two strong businesses with their own
strategies and their own – but different
– potential for purpose-led growth.
We would not have been able to do this
transaction five years ago, but both
businesses are now well placed to stand on
their own and determine their own futures.
Critical to the success of the transaction
was our ability to take people with us –
not just our own people, but our other
stakeholders too, especially our customers
and shareholders. We spent a lot of time
preparing our customers for the change,
particularly those who will transact with
both Tate & Lyle and Primient in the future.
Clear communication with all stakeholders
has been a core part of the project
from the start and we are very grateful
for the support we have received. Our
shareholders were very supportive, with
99.9% of those who voted approving the
transaction at the general meeting in
September 2021.
The separation into Tate & Lyle and
Primient was a complex and challenging
project to execute. I’m hugely grateful to
everyone at Tate & Lyle and Primient who
put in the extra hours needed to achieve
our goal of separating the businesses
successfully, on schedule, while continuing
to do their day jobs. It is to everyone’s great
credit that, despite all the extra work,
our people never once lost sight of the
day-to-day requirements of serving our
customers and keeping our operations
running safely and efficiently.
A YEAR OF STRONG PERFORMANCE
Discussing our results this year is a
little more complex than usual, since
we have to split our reporting between
continuing operations (‘new’ Tate & Lyle
– mainly Food & Beverage Solutions
and Sucralose), and discontinued
operations (the Primary Products
business in the Americas in which we
sold a controlling stake to KPS – now
Primient). For the purposes of my review,
as I talk to our results, where applicable,
I will refer to them as Tate & Lyle and
Primient. Together, they are referred to
as total operations.
Strong customer demand
For Tate & Lyle, the year saw improved
customer demand in many of our key
markets, although the trading environment
remained challenging as we had to
manage significant disruption to supply
chains, evolving Covid-19 restrictions,
rapidly increasing cost inflation and,
latterly, the uncertainty related to the
conflict in Ukraine.
We saw strong demand in Food &
Beverage Solutions, as in-home
consumption remained robust and
out-of-home consumption continued
to recover. We also saw good revenue
growth and we were able to price through
the increase in input costs during our
2022 calendar year contract renewals.
Sucralose benefited from strong volume
growth in beverages, driven by the
recovery in out-of-home consumption.
It also benefited from increased volume
following production optimisation at
our facility in McIntosh, Alabama, US,
and from having the only sucralose facility
based outside China. In constant currency,
Tate & Lyle’s revenue grew by 18%,
adjusted profit before tax by 14% and
adjusted diluted EPS by 4%.
By contrast, Primient saw a reduction
in adjusted profit after tax of 9% in
constant currency. This was due to two
things: firstly, cost inflation, particularly
in the third quarter of the financial year
before calendar year contracts were
renewed in the fourth quarter; and
secondly, short-term operational
disruption, including from the installation
of new gas turbines at the facility in
Lafayette, Indiana, US. In the longer term,
these new turbines will increase efficiency
and environmental performance at
the facility. Commodities saw higher
profits due to exceptionally strong
market conditions.
In Tate & Lyle, we saw cost inflation
totalling £100 million during the year in
areas such as energy, labour, consumables
and transport. This was mitigated by a
combination of pricing, productivity,
cost discipline, volume growth and mix
improvements. Given this tough cost
environment, we were pleased that we
exceeded our target to deliver US$150
million in productivity benefits, over a
six-year period ending 31 March 2024, two
years ahead of schedule. In total, we have
delivered US$158 million of productivity
benefits over the last four years.
Overall, taking Tate & Lyle and Primient
together, adjusted profit before tax was in
line with the previous year, while adjusted
diluted earnings per share were 4% lower.
DELIVERING STRATEGIC PROGRESS
Growth in Food & Beverage Solutions
was driven by the delivery of our strategic
growth framework (see page 26 for
more details), centred on four pillars –
market focus; portfolio expansion;
accelerate innovation; and integrated
solutions for customers.
Market focus
We aim to maximise opportunities in all
our markets; to grow above the market in
developed markets; and accelerate growth
in the faster-growing markets of Asia, the
Middle East, Africa and Latin America.
We focus on four global categories – dairy,
beverages, bakery, and soups, sauces
and dressings, and two or three regional
categories where we have local expertise,
such as confectionery and snacks.
Continues on page 18
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 16
OUR BUSINESS TODAY
CHIEF EXECUTIVE’S REVIEW CONTINUED
CREATING TWO STRONGER, STANDALONE BUSINESSES
Q: WHAT WAS THE TRANSACTION?
A: On 12 July 2021, we announced that we had entered
into an agreement to sell a controlling interest in a
new company, Primient, and its subsidiaries to KPS
Capital Partners, LP (KPS) (the Transaction). The new
company would hold our Primary Products business
in North America and Latin America, and our interests
in the Almex joint venture in Mexico (Almidones
Mexicanos S.A de C.V) and in the joint venture with
DuPont (DuPont Tate & Lyle Bio-Products Company,
LLC). We sent out full details of the Transaction in a
circular to shareholders posted in early September
2021 (also available on our website).
The Transaction was approved by 99.9% of the ordinary
shareholders who voted at a general meeting on
30 September 2021 and, following the satisfaction
of all conditions, we completed the Transaction on
1 April 2022. We now hold a 49.9% interest in Primient,
while KPS holds a 50.1% interest and has board and
operational control.
Q: WHAT DOES THE TRANSACTION MEAN IN PRACTICE?
A: We have created two standalone businesses –
Tate & Lyle and Primient – each positioned to
focus on their respective strategies and capital
allocation priorities:
Tate & Lyle – a leading global food and beverage
solutions business focused on faster-growing
speciality markets
Primient – a leading producer of food and
industrial ingredients made from plant-based,
renewable sources.
Q: WHAT ARE THE BENEFITS FOR TATE & LYLE?
A: Tate & Lyle is now positioned as a focused global
food and beverage solutions business, which means
we can:
– Benefit from growing global consumer demand for
healthier food and drink, a trend accelerated by the
global pandemic
– Accelerate growth through a step-up in R&D
investment and innovation
– Support and strengthen our customer relationships
by increasing our focus on developing solutions
The Transaction substantially reduces our exposure
to commodities markets and bulk ingredients in
North America, strengthens our balance sheet, and
allows us to focus our investments on delivering
stronger organic and inorganic growth. We expect
that, over time, Primient will generate significant and
steady cash flows by paying meaningful dividends.
We will also benefit from the potential increase in
value of our 49.9% equity stake in Primient.
Q: WHAT ARE THE BENEFITS FOR PRIMIENT?
A: KPS is a leading global private equity firm,
headquartered in New York, that invests exclusively
in manufacturing and industrial companies. It has a
proven track record of successfully creating value in
businesses like Primient. As a standalone company,
controlled by KPS, Primient will have the opportunity
to unlock potential value in a way that would not be
possible under Tate & Lyle’s ownership, given our
different strategy and priorities for allocating capital.
For example, Primient will now be able to pursue
new opportunities for growth in areas like precision
fermentation, bio-industrial applications and
sustainable packaging.
Q: HOW WILL THE TWO COMPANIES WORK TOGETHER?
A: Both companies will continue to work closely
together and supply products to each other. Long-
term, 20-year agreements are in place to protect
the supply and economics of our Food & Beverage
Solutions products made in Primient’s facilities.
As shown in the maps opposite, both Tate & Lyle and
Primient will have their own separate manufacturing
facilities. In both cases, the majority of their products
will come from their own plants.
Q: WHAT IS BEING DONE WITH THE CASH PROCEEDS?
A: In summary, of the approximately £1.1 billion gross
cash proceeds we received, we returned around
£500 million to shareholders on 16 May 2022 by way of
a special dividend and associated share consolidation,
and retained the balance to invest in growth and
strengthen our balance sheet. In technical terms, on
completion of the Transaction, we received gross cash
proceeds of approximately £1.1 billion taking into
account estimates of cash, debt, debt-like items and
working capital balances at completion. After one-off
transaction and separation costs, as well as estimated
tax liabilities associated with the Transaction, net
proceeds were approximately £0.9 billion, subject to
customary post-completion adjustments.
We are now two stronger
businesses, pursuing new and
exciting growth opportunities
in our respective markets.
NICK HAMPTON Chief Executive
Tate & Lyle PLC Annual Report 2022
−
17
−
Global leader in sweetening, mouthfeel and fortification
REVENUE
£1.4bn
EMPLOYEES
3,167
COUNTRIES SOLD INTO
122
GLOBAL INNOVATION CENTRE
(Hoffman Estates, Illinois, US)
1
CUSTOMER INNOVATION AND COLLABORATION
CENTRES
16
MAIN FACILITIES
Corn wet mills1
– Sagamore, Indiana, US
– Koog, The Netherlands
– Boleráz, Slovakia
Speciality starches2
– Van Buren, Arkansas,
US
– Houlton, Maine, US
Sucralose
– McIntosh, Alabama, US
Stevia
– Anji, China
Fibre
– Nantong, China
Tapioca
– Dan Khun Thot,
Thailand
Locust bean gum
– Noto, Italy
Blending
– Six facilities in US, UK,
Brazil, South Africa,
Italy and Australia
1 Corn wet mills produce a range of products including sweeteners, starches and fibres.
2 Speciality starches include corn, tapioca and potato; these plants do not have grind capacity and are not classified as corn wet mills.
Leader in plant-based products for food and industrial markets
MAIN FACILITIES
REVENUE
£1.8bn
EMPLOYEES
1,424
CUSTOMERS
500+
Corn wet mills1
– Decatur, Illinois, US
– Lafayette, Indiana, US
– Loudon, Tennessee, US
Acidulant plants
– Dayton, Ohio, US
– Duluth, Minnesota, US
– Santa Rosa, Brazil
50/50 joint ventures
– DuPont Tate & Lyle Bio Products,
Loudon, Tennessee, US
– Almex, Guadalajara, Mexico
Network of grain elevators
and bulk transfer stations
1 Corn wet mills produce a range of products including sweeteners, starches and fibres.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
18
OUR BUSINESS TODAY
CHIEF EXECUTIVE’S REVIEW CONTINUED
This category focus, combined with our
expertise in sweetening, mouthfeel and
fortification, provides a unique and
attractive offering for customers. For
example, in North America, revenue from
bakery and snacks grew by 19% and from
beverages by 12%, supported by strong
demand for our fibre and stevia solutions.
In Europe, dairy grew by 14% helped by
demand for clean-label solutions. In Asia,
the Middle East, Africa and Latin America,
revenue grew by 25% with good progress
across our focus categories as customers
continued to demand solutions that reduce
sugar, calories and fat in their products.
Portfolio expansion
The integration of the two acquisitions we
made at the end of the 2021 financial year
(Sweet Green Fields, a leading global
stevia solutions business in China, and
Chaodee Modified Starch Co., Ltd., a
speciality tapioca food starch business
in Thailand) is progressing well. Our
expanded stevia business in particular
is performing very well.
In March 2022, we announced we had
signed an agreement to acquire Quantum
Hi-Tech (Guangdong) Biological Co., Ltd
(Quantum), a leading prebiotic dietary
fibre business in China, for a total
consideration of US$237 million. The
acquisition of Quantum, which makes
fructo-oligosaccharides (FOS) and
galacto-oligosaccharides (GOS),
strengthens our position as a leading
global player in the fast-growing global
dietary fibres market, as well as adding
new, speciality and complementary
products to our portfolio. It also
strengthens our fortification platform,
enhances our capabilities in integrated
solutions, and significantly extends our
presence and customer offering in China
and other parts of Asia.
Accelerate innovation
We continued to increase our investment
in R&D and innovation, both by building on
our strong in-house scientific expertise
and with external partners through open
innovation. New Product revenue grew by
35%, with our sweetener platform up 97%
driven by high demand for stevia solutions.
Revenue from our mouthfeel platform was
also good, 19% higher reflecting consumer
demand for cleaner labels. Our increased
focus on open innovation is unlocking
exciting new ideas and opportunities.
In April 2022, we acquired Nutriati, an
ingredient technology business that
develops chickpea protein and flour,
expanding our capability to offer customers
sustainable, plant-based solutions.
Integrated solutions
We continued to focus on creating
integrated solutions for customers to
strengthen our position as their partner
for growth. Our deep understanding of how
ingredients interact across the food matrix
in our core categories, together with our
Tate & Lyle PLC Annual Report 2022
leading product portfolio and technical
expertise, allows us to provide customers
with bespoke solutions. We continue to
invest in accelerating our solutions
offering by strengthening our capabilities
in areas such as sensory, prototyping and
category and consumer insights. Pilot
programmes are underway to develop new
ways of working with customers, and build
stronger solutions-based partnerships.
At the start of the year, to support our
solutions offering, we launched the
Stabiliser University™, an online modular
course designed to help formulators and
food scientists solve even the toughest
stabiliser formulation challenges.
This follows the success of three other
courses – Texture University™, Sweetener
University™ and Fibre University™ –
which have attracted thousands of
attendees worldwide.
We continued to invest in both
infrastructure and capabilities to support
our customers particularly in higher
growth markets. In October 2021, we
opened a new Customer Innovation and
Collaboration Centre in Dubai to serve
customers in the Middle East. The Centre’s
state-of-the-art technology is accelerating
the innovation process for customers.
In May 2022, we opened another Customer
Innovation and Collaboration Centre, in
Santiago, Chile.
INCREASINGLY AMBITIOUS WITH OUR PURPOSE
I’ve always believed that purpose and
performance go hand in hand, and that’s
certainly been true of Tate & Lyle this year.
Our purpose has continued to be our north
star, helping us navigate the ongoing
uncertainties of a changing world.
Our strong financial performance was
supported by a second year of good
progress against our long-term purpose
targets and commitments for supporting
healthy living, building thriving
communities and caring for our planet,
thanks to the inspirational way our people
responded to the challenges of working
and living during a global pandemic.
The pandemic has certainly increased
people’s awareness of the importance
of a healthy diet and lifestyle, and so I’m
particularly proud of the progress we’ve
made in supporting healthy living. Through
our low- and no-calorie sweeteners like
TASTEVA® M Stevia Sweetener, SPLENDA®
Sucralose, DOLCIA PRIMA® Allulose,
PUREFRUITTM Monk Fruit Extract, and our
fibres such as PROMITOR® Soluble Fibre
and STA-LITE® Polydextrose, we’ve taken
four million tonnes of sugar out of people’s
diets over the last two years, the equivalent
of 16 trillion calories. At the same time, we
have also helped our food bank partners
around the world provide 2.9 million
nutritious meals for people in need in our
local communities.
Combatting climate change
Covid-19 has, if anything, put the climate
emergency even more front and centre in
people’s minds, as it has highlighted the
systemic risk and interconnectedness
of the modern world. This makes our
ambitious 2030 targets for waste, water
and greenhouse gas (GHG) emissions all
the more important. Over the last few
years, we have implemented a major
capital investment programme totalling
more than US$150 million to significantly
reduce GHG emissions in our plants and
increase operational efficiency. A key aim
was to replace coal systems at some of our
large corn wet mills in the US with natural
gas-fired combined heat and power
systems. Two years ago, we committed
to eliminate the use of coal in all our
operations by 2025, and I am delighted
that, in October 2021, we achieved this
four years ahead of schedule. We also
expanded our sustainable agriculture
programme for stevia in China. This
programme, operated in partnership
with Earthwatch Europe and Nanjing
Agricultural University, helps farmers
minimise their environmental impact and
achieve better economic returns.
In October 2021,
we delivered on our
commitment to
eliminate coal from
all our operations,
four years ahead of
schedule.
We have made good progress on our
sustainability programme over the last
two years, reducing Scope 1 and 2 absolute
GHG emissions by 12%, and beneficially
using 83% of the waste we generate
globally. We also supported 1.4 million
acres of sustainable corn, equivalent to all
the corn we purchased for our plants
during the last year. We were pleased to
see this progress recognised when the
UK government invited Tate & Lyle to
join the G7 Sustainable Supply Chain
Initiative, bringing together leading food
and agriculture companies from G7
countries to take action to improve the
environmental, social and nutritional
impact of supply chains, and to build
a constructive dialogue between
governments and businesses.
Turning to the future, a question I have
been asked many times as we separated
into two businesses is what it means for
our purpose targets and commitments.
The answer is – even more focus. If
anything, the challenges of Covid-19, the
heightened dialogue about social inclusion
19
OUR PURPOSE OF TRANSFORMING LIVES THROUGH
THE SCIENCE OF FOOD IS WHY WE DO WHAT WE DO. IT GUIDES
EVERY DECISION WE MAKE AND EVERY ACTION WE TAKE
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SUPPORTING HEALTHY LIVING
We help people make healthier and tastier
choices when they eat and drink, and lead more
balanced lifestyles.
BUILDING THRIVING COMMUNITIES
We help build thriving communities where
we operate, and support people to achieve
their potential.
CARING FOR OUR PLANET
We care for our planet and help protect
its natural resources for the benefit of future
generations.
CARING FOR O U R P L A N
T
E
In November 2021 we published our second
report on progress against our purpose targets
and commitments.
Download at www.tateandlyle.com/purpose
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.
Zero hunger
Good health and wellbeing
Gender equality
SDG 2
SDG 3
SDG 5
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
20
OUR BUSINESS TODAY
CHIEF EXECUTIVE’S REVIEW CONTINUED
and the climate emergency have shown us
the value of healthy living, the importance
of connecting with and supporting each
other as colleagues and neighbours, and
the fragility of the natural world. The past
year has made us even more determined
to pursue our purpose and to strengthen
our ambition wherever we can. That is why,
while our three purpose pillars remain
unchanged, we have evolved our purpose
statement from ‘Improving Lives for
Generations’ to ‘Transforming Lives
through the Science of Food’.
Carbon net zero by 2050
During the year, we carried out an analysis
of what a pathway to net zero carbon
emissions would look like for Tate & Lyle,
including comprehensive Scope 1 and 2
decarbonisation reviews at our four largest
facilities and an in-depth review of our
Scope 3 emissions. On the basis of this
work, I am delighted that we are making a
commitment for Tate & Lyle to be carbon
net zero by 2050. We recognise that
advances in technology, changes in policy
and many other factors will evolve as we
move towards 2050, but what won’t change
is our determination to deliver on our
commitment. More details can be found
on page 58.
We have committed
to becoming carbon
net zero by 2050.
Setting targets to progress equity,
diversity and inclusion
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 equity,
diversity and inclusion together are a key
business-wide priority, not only for us but
for our customers, suppliers and local
communities. To make this real, during the
year we launched a set of commitments
and targets for the next eight years, as set
out on page 49. What’s encouraging is we
are already making positive progress.
As at 1 April 2022, 42% of Tate & Lyle’s
top 500 managers are women, so we are
getting closer to our target of gender parity
in leadership and management roles by
2025. 56% of our Executive Committee are
also women and our UK gender pay gap (as
at 1 April 2021) is 1.7% in favour of women.
In December 2021,
we launched a set of
targets for equity,
diversity and
inclusion over the
next eight years.
Overall, I’m excited about our ambitions
in this area, and firmly believe that equity,
diversity and inclusion are accelerators
for growth and a key element of being a
purpose-led company.
Focusing on mental health
With the world opening up over the past
year, it can sometimes feel like the
pandemic is over, but that’s far from true
as recent lockdowns in China showed. The
toll Covid-19 continues to take on people’s
mental health is considerable, and so this
year we redoubled our efforts to look after
our colleagues’ health and wellbeing.
Our ‘Happy Healthy Minds’ Employee
Resource Group, which provides support,
information and educational events for
colleagues on mental health, continues
to make an outstanding contribution.
We now have over 70 Mental Health First
Aiders trained across the organisation,
colleagues who are available for anyone
suffering from mental health issues or
emotional distress. Our Employee
Assistance Programme is also working
well, and it’s been really encouraging to
see all the virtual local events like coffee
mornings and our global choir – and it
always brings a smile to my face when the
London HQ coffee morning link pops up on
Teams each week! They may sound like
small things, but these individual and
collective personal connections have been
absolutely essential in supporting one
another through challenging times.
EXPERIENCED MANAGEMENT TEAM
For our Executive Committee’s biographies, see page 83.
ROWAN ADAMS
Executive Vice President,
Corporate Affairs
DAWN ALLEN
Chief Financial Officer
LINDSAY BEARDSELL
Executive Vice President,
General Counsel
LAURA HAGAN
Chief Human Resources
Officer
Tate & Lyle PLC Annual Report 2022
21
EXPERIMENTING WITH NEW WAYS OF WORKING
There’s been much public debate about
what the return to work looks like, and
whether companies should be prescriptive
about returning to the office. In line with
our desire to build a more open and
inclusive culture, we have decided to
experiment with ‘back to the office’. We
have three key principles – to make sure
we serve customers better; to connect
more effectively with each other; and to
balance our working and our personal
lives. Within these guidelines, we’re
leaving it to individuals and teams to
arrange what works best for them. We’ve
put this into practice with our new London
head office, which we opened in February
2022. It’s an entirely open environment (no
individual offices or assigned desks) and is
designed to encourage collaboration and
new ways of working. We’ve asked people
to experiment, tell us what works and what
doesn’t, so that we can make this flexible
space work for everyone.
Cultural change is a key element of
Tate & Lyle’s transformation. We want to
build a more dynamic, ambitious and
inclusive culture, and experimenting with
new ways of working, and learning from
those experiments, is part of that process.
We have developed a set of new behaviours
to underpin this new culture of innovation
and experimentation, and these are
explained in the people section on page 44.
WELCOMING NEW LEADERS
Culture is very much about leading by
example, and I’m delighted to welcome
two new members to the executive team.
Bill Magee was promoted to President,
North America in October 2021, and has
already become a key member of the team.
Then in May 2022, Dawn Allen joined us
as Chief Financial Officer from Mars
Incorporated, replacing Vivid Sehgal who
stepped down from the executive team in
December 2021. Dawn brings with her
a wealth of experience of the food and
beverage industry and of business
transformation, and I know I speak for the
executive team in saying how much we’re
looking forward to working with her.
Jim Stutelberg, President, Primary
Products stepped down from the Executive
Committee at the end of the financial year
to take up his new role as Chief Executive,
Primient on 1 April 2022. We look forward
to continuing to work with Jim and the
Primient team in the years ahead.
LOOKING AHEAD
As our results show, we entered the
2023 financial year with strong top-line
momentum, innovation gathering pace and
our productivity programme continuing to
drive benefits. Customer demand remains
strong. We also entered the 2022 calendar
year with renewed customer contracts that
offset expected inflation. Since then, the
conflict in Ukraine has caused significant
further inflation in raw material (including
corn), energy and logistics costs globally,
especially in Europe. A programme of
supplementary price increases has been
implemented across our main markets to
recover incremental input costs together
with a continued focus on productivity and
cost control. To ensure supply continuity,
we have committed agreements in place
for key production inputs such as corn and
energy covering the majority of the first
half of the 2023 financial year.
Our focus remains on continuity of supply,
serving our customers, and maintaining
our financial strength and strategic
progress. For the year ending 31 March
2023, we expect further progress with
adjusted profit before tax in line with
market expectations and revenue growth
reflecting top-line momentum and the
pricing through of higher input costs.
MEETING THE WORLD’S CHALLENGES WITH
OPTIMISM
The world is an increasingly challenging
and unpredictable place, which makes
running a business all the more
complicated. When I look back at what
we set out to achieve this year, I can say
that we’ve made Tate & Lyle a stronger
business, better able to meet the
challenges ahead. We said we wanted
to deliver strategic transformation – and
we did. We said we wanted to position
ourselves as a purpose-led business – and
we have. We said we wanted to continue to
drive growth in Food & Beverage Solutions
– and we did. And we said we wanted to
create a culture that’s bolder, more agile
and inclusive – and throughout the year
I’ve seen many examples of our people
behaving in all these ways.
Ultimately, our aim was to emerge
stronger from the pandemic and I believe
we’ve done just that, setting ourselves up
for a new, ambitious and exciting chapter
in our history. I know I speak for the Board
and my executive team in saying that I look
forward to the future with great optimism.
NICK HAMPTON
Chief Executive
MELISSA LAW
President, Global Operations
BILL (WILLIAM) MAGEE
President, North America
VICTORIA SPADARO GRANT
President, Innovation and
Commercial Development
ANDREW TAYLOR
President, Asia, Middle East,
Africa and Latin America
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 22
OUR BUSINESS TODAY
THE WORLD AROUND US
The food and beverage market is constantly evolving, shaped by the world
around us. From a source of nutrition to a foundation for healthy living,
pleasure and celebration, food means different things to different people.
THE WAY WE LIVE, WORK AND EAT IS CHANGING
The Covid-19 pandemic has had a major
impact on the way we live, work and eat,
as well as directly affecting our health.
The increase in online shopping, more
flexible working practices and a greater
awareness of personal hygiene and health
are just some of the trends that are likely
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 some have been accelerated by it.
Lockdown measures changed the way we
ate and drank, with most people cooking
and eating their meals at home – and the
habit of home deliveries seems to be
staying with us. After two years of constraint
and restricted choices, consumers are
ready to embrace the world once again
and have returned to cafés, pubs and
restaurants, although the balance between
eating out and eating at home is yet to find
its new level – and the cost-of-living crisis
in many countries may affect this balance
in the short term. Long-term trends such
as the shift towards greater convenience
seem to be continuing, particularly as
people’s hectic lives resume. Amongst all
these moving parts, one aspect – an
increased focus on health and wellbeing
– has remained constant. It’s clear that the
pandemic has focused people’s minds on
their personal wellbeing and the importance
of maintaining a healthier diet and lifestyle.
The desire for healthier food is also driving
a desire to be more in control of what
people eat and drink. They want to be
empowered to make their own choices and
for their values to be reflected in the choices
they make. For example, transparency on
sustainability credentials, product claims
and labelling are three areas of consumer
focus. The use of technology and access
to information on social media and other
digital platforms are also increasingly
affecting purchasing behaviour.
Focus on health and wellbeing
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 during the pandemic.
People are generally eating too much and
moving too little, an unbalanced lifestyle
which affects their health. The incidence
of obesity and diabetes, and concerns
about digestive health and immunity, are
increasing rapidly. For example, it is
estimated that there are approximately
537 million adults in the world living with
diabetes. This is expected to grow to
783 million by 20451.
Healthcare costs are rising over the longer
term, placing health services in many
countries under increased pressure.
Governments continue to introduce
policies and initiatives to support healthier
choices when it comes to food and drink.
These include front-of-pack labelling in
Latin America, with warnings about the
level of sugar, fat and salt in foods; and UK
restaurants, cafés and takeaways having
to provide calorie labels on the food they
sell. Over-consumption of sugar is a major
concern, and over 50² national governments
have introduced a ‘sugar tax’, while more
than two-thirds of consumers are looking
to reduce their sugar consumption over the
next year3.
Convenience and home cooking
Before the pandemic, 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
remains important, but the pandemic has
undoubtedly had an impact on food
purchasing and consumption behaviour.
For example, working from home has
meant that people are eating together
more, cooking more, and snacking and
grazing more often.
Connecting the planet with food choices
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. People are
increasingly aware of the environmental
impact of what they consume. Demand for
plant-based food 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 challenges. During the
pandemic, we had 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. And as out-of-home consumption
recovered, we adapted again to ensure our
business continued to meet changing
consumer demand.
As a global leader in sweetening,
mouthfeel and fortification, we are very
well placed to benefit from growing global
consumer demand for food and drink which
is lower in sugar, calories and fat, and has
more fibre. At the same time, we are
working to take care of our planet and are
helping to protect its natural resources.
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. Our goal is not just
to feed people, but to feed them well.
1 IDF Diabetes Atlas 2021, tenth edition.
2 Obesity Evidence Hub.
3 Tate & Lyle Proprietary Global Ingredients Perception
Research, 2020/21.
Tate & Lyle PLC Annual Report 2022
23
SNAPSHOT OF TRENDS
ESTIMATED INCREASE IN GLOBAL
POPULATION BY 20501
PEOPLE USING APPS TO MONITOR THEIR
NUTRITIONAL INTAKE3
GREENHOUSE GAS EMISSIONS THAT COME
FROM THE WORLD’S FOOD SYSTEMS4
25%
24%
34%
ADULTS WORLDWIDE AGED 18 OR OVER
WHO ARE OVERWEIGHT2
PEOPLE MORE CONSCIOUS OF THEIR
IMMUNE HEALTH3
39%
64%
PEOPLE WHO HAVE MADE CHANGES TO
THEIR DIET IN THE LAST TWO YEARS TO
LEAD A MORE SUSTAINABLE LIFESTYLE3
48%
1 United Nations Department of Economic and Social Affairs.
2 World Health Organization.
3 FMCG Gurus, Top 10 Trends for 2022 Global Report.
4 United Nations Food and Agriculture Organization and European Commission’s Joint Research Centre. Food Systems cover land-use change, agricultural production to
packaging and waste management.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 24
OUR BUSINESS TODAY
OUR BUSINESS MODEL
OUR RESOURCES
WHAT WE DO
SCIENCE AND TECHNICAL KNOW-HOW
Leading science, technology, intellectual
property and processes
TALENTED PEOPLE
Skilled people with a passion for
serving our customers, and working in
an increasingly agile and flexible way
GLOBAL SUPPLY CHAIN
End-to-end supply solutions including
raw material sourcing, manufacturing
facilities and logistics
LONG-TERM RELATIONSHIPS
Strong relationships with customers,
suppliers, local communities and
other stakeholders
STRONG BALANCE SHEET
Disciplined use of capital ensures
we have the funds to invest for
long-term growth
ANUFAC T U
& M
E
C
R
U
O
S
OUR BUSINESS
ACTIVITIES
E
R
CREATING
SOLUTIONS
FOR
CUSTOMERS
PARTNER & S E
L
L
T
H
I
N
K
&
C
R
E
A
T
E
HOW WE DO IT
H O W W E D O
I T
I NSIGHTS
O R Y
G
C A T E
CONSU
M
E
R
E
S
I
T
R
E
P
X
E
RY
O
T
A
L
U
G
E
R
N
U
T
R
I
TIO
N
CREATING
SOLUTIONS
FOR
CUSTOMERS
FORMUL A T I O N
P
R
O
T
O
T
Y
P
I
N
G
SENSORY
A PPLICATIONS
THINK AND CREATE
Our scientists and
nutritionists research
and develop ingredients
to create solutions for
our customers. We
work closely with our
customers through every
stage of the innovation
process to move ideas
quickly from concept to
commercial launch.
PARTNER AND SELL
Through our leading
expertise in sweetening,
mouthfeel and
fortification, we provide
customers with solutions
that bring specific
functionality and nutrition
to their products, helping
to make them healthier
and tastier for consumers
in their local markets.
SOURCE AND MANUFACTURE
Our ingredients are made
from agricultural crops
such as stevia, corn and
tapioca. We produce them
at our facilities around the
world. Wherever we are in
the process from field to
customer, our priorities
are safety, quality and
consideration for the
environment.
EVERYTHING WE DO
IS UNDERPINNED BY...
OUR PURPOSE
Transforming lives through the
science of food
OUR VALUES
– Safety
– Integrity
– Respect
Tate & Lyle PLC Annual Report 2022
OUR BUSINESS
ACTIVITIES
E
R
ANUFAC T U
& M
E
C
R
U
O
S
CREATING
SOLUTIONS
FOR
CUSTOMERS
PARTNER & S E
L
L
T
H
I
N
K
&
C
R
E
A
T
E
25
H O W W E D O
I T
I NSIGHTS
THE VALUE WE CREATE
FOR SHAREHOLDERS
We balance investing in
growth with paying an
attractive dividend
O R Y
G
C A T E
CONSU
M
E
R
CREATING
SOLUTIONS
FOR
CUSTOMERS
P
R
O
T
O
T
Y
P
I
N
G
RY
O
T
A
L
U
G
E
R
N
U
T
E
S
I
T
R
E
P
X
E
HOW WE DO IT
N
U
T
R
I
T
I
O
N
R
I
TIO
N
FORMUL A T I O N
UNDERSTANDING
Y
R
O
R E G U L A T
SENSORY
A PPLICATIONS
SENSORY
CREATING SOLUTIONS FOR CUSTOMERS
We bring together our consumer and category insight with our broad portfolio of
products and our technical capabilities in a range of areas including sensory,
prototyping and regulatory to provide our customers with the solutions they need.
OUR BEHAVIOURS
– Be curious
– Bring challenge
– Have courage
– Create flow
OUR CONTRIBUTION
TO THE UN SDGS
FOR CUSTOMERS
We help our customers
quickly bring products to
market 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 inclusive and
performance-driven
FOR SUPPLIERS
We have long-term,
mutually beneficial
relationships with
supplier partners
FOR COMMUNITIES
We have a long history
of community involvement,
helping to make lasting
contributions to the places
where we live and work
FOR THE PLANET
We care for our planet
by reducing greenhouse
gas emissions, benefically
using our waste, using less
water and supporting
sustainable agriculture
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
26
OUR BUSINESS TODAY
OUR STRATEGY
Our strategy is to deliver top-line growth and margin expansion in
Food & Beverage Solutions. We do this by delivering our strategic
growth framework which, in turn, unlocks customer growth.
STRATEGIC GROWTH FRAMEWORK
We have been executing this framework over the last three years and will accelerate its
delivery now that we are a growth-focused business specialising in food and beverage
solutions. The framework is based on four pillars, with serving our customers at its core.
Accelerate innovation
Increase our investment in
R&D; internally by building on
our in-house scientific
expertise, and externally
through open innovation.
Integrated solutions
Strengthen our position as
our customers’ growth
partner by bringing together
our category expertise and
insight, our broad portfolio of
products and our technical
capabilities to provide the
solutions they need.
E
T
A
ACCELE R
INNOV A T I O N
CUSTOMER
I
N
S
T
O
E
L
G
U
R
TI
O
ATED
NS
PO
EXP
A
R
T
F
O
N
L
S
I
I
O
O
N
A RKET
F OCUS
M
Portfolio expansion
Strengthen our three
platforms – sweetening,
mouthfeel and fortification
– and, over time, move into
new platforms. This will be
achieved organically and
through acquisitions.
Market focus
Maximise opportunities in all
our markets; grow above the
market in developed markets
and accelerate growth in the
faster-growing markets of
Asia, Middle East, Africa and
Latin America.
KEY GROWTH
ENABLERS
SCIENCE AND
TECHNICAL KNOW-HOW
TALENT AND CULTURE
GLOBAL SUPPLY CHAIN
Tate & Lyle PLC Annual Report 2022
UNLOCKING CUSTOMER GROWTH
Our ingredients and solutions add specific
functionality, nutrition and health benefits
to our customers’ products. We work in
partnership with our customers to develop
new products, and reformulate existing
ones, to make food and drink healthier and
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
have to be taken into account when
reformulating food and beverages in our
global network of labs, which we call
Customer Innovation and Collaboration
Centres. 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. In
particular, our customers come to us for
our leading expertise in three areas:
– Sweetening: Our understanding of
sweeteners, built over many years, and
our broad portfolio, have given us unique
expertise in sweetening – sugar and
calorie reduction in particular. Our
sweeteners and fibres help reduce
sugar and calories without
compromising taste and mouthfeel.
– 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.
With this expertise and our deep knowledge
of ingredients and complex food systems,
we also create customised stabiliser
systems (highly functional ingredient
blends) that ensure products maintain
their stability and appetising texture.
27
INVESTMENT CASE:
GROWTH-FOCUSED BUSINESS
PURPOSE: TRANSFORMING LIVES THROUGH
THE SCIENCE OF FOOD
SUPPORTING
HEALTHY LIVING
BUILDING THRIVING
COMMUNITIES
CARING FOR
OUR PLANET
CLEAR STRATEGY
SUCRALOSE
Manage for cash
PRIMIENT (JOINT
VENTURE)
Cash generation
FOOD & BEVERAGE
SOLUTIONS
Top-line growth and
margin expansion
DELIVER RETURNS FOR SHAREHOLDERS
ACCELERATE GROWTH IN
EARNINGS PER SHARE1
IMPROVE ORGANIC
RETURN ON CAPITAL
EMPLOYED2
MAINTAIN A
PROGRESSIVE DIVIDEND
POLICY
1 Adjusted diluted earnings per share from continuing operations in constant currency.
2 In constant currency.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 28
OUR BUSINESS TODAY
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.
CHANGES TO KPIs IN 2022
We have replaced profit from Primary
Products with profit from Sucralose to
reflect the sale of a controlling stake in
the Primary Products business in the
Americas which completed on 1 April 2022.
Sucralose is a reporting segment of our
continuing operations.
LINK TO REMUNERATION
A number of KPIs are used in
determining Executive Directors’ annual
bonuses and for long-term incentive
plans. This year, we added four of our
purpose metrics (see pages 30 and 31)
to the targets used for our long-term
share incentive plan. These are
a reduction in greenhouse gas emissions,
reduction in water use, the beneficial
use of waste and progressing gender
equality. Further details can be found in
the Remuneration Report on page 121.
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.
When you see this symbol ◊
the KPI is linked to remuneration
DELIVERING OUR STRATEGY
FOOD & BEVERAGE SOLUTIONS
VOLUME GROWTH ◊
FOOD & BEVERAGE SOLUTIONS REVENUE◊
2022
2021 0%1
5%
5%
2022
£1,212m
2021
£1,060m1
19%
Performance in 2022
Demand for in-home consumption remained
strong, supplemented by increasing
out-of-home consumption, resulting in
volume growth of 5% overall, with growth
of 2% in North America, 4% in Europe,
and 15% in Asia, Middle East, Africa and
Latin America.
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 2022
Revenue increased by 19%, driven by higher
volume, strong mix management, the
pricing through of input cost inflation and
higher corn costs. Acquisitions contributed
2ppts to revenue growth.
Why we measure it
To ensure we are successfully converting
our investments into revenue growth.
How we calculate it
In constant currency, excluding Sucralose.
SUCRALOSE ADJUSTED OPERATING PROFIT
GROUP ADJUSTED PROFIT BEFORE TAX
CONTINUING OPERATIONS◊
£61m
£55m
2022
2021
£63m
£145m
£134m
2022
2021
2020
15%
Performance in 2022
Higher volume and the pricing through
of input cost inflation resulted in a 15%
increase in adjusted operating profit.
Why we measure it
Sucralose is an important part of our
sweetener platform and is one of our
operating segments.
How we calculate it
In constant currency.
Tate & Lyle PLC Annual Report 2022
1 Restated to include the European Primary Products business.
14%
Performance in 2022
Strong revenue and profit growth from both
Food & Beverage Solutions and Sucralose
combined with strong cost control resulted
in a 14% increase in adjusted profit before
tax (continuing operations).
Why we measure it
To ensure we make good investment
decisions and execute our strategy
successfully.
How we calculate it
In constant currency, excluding
discontinued operations.
29
DELIVERING FOR OUR SHAREHOLDERS
ADJUSTED DILUTED EARNINGS PER SHARE
CONTINUING OPERATIONS◊
ADJUSTED FREE CASH FLOW
CONTINUING OPERATIONS
RETURN ON CAPITAL EMPLOYED
TOTAL OPERATIONS◊
2022
2021
24.9p
2022
£72m
2022
14.9%
25.2p
2021
£153m
20212
17.3%
4%
in constant currency
£81m
240bps
Performance in 2022
Adjusted diluted earnings per share
increased by 4% in constant currency,
benefiting from growth in profit in our
continuing operations, partially offset
by a higher adjusted effective tax rate.
Why we measure it
To track the underlying performance of
the business and ensure revenue growth
translates into increased earnings.
How we calculate it
As defined in Note 13, with growth rate
in constant currency.
Performance in 2022
Reflecting higher working capital as we
planned for the business separation, the
impact of input cost inflation and higher
capital expenditure.
Why we measure it
To track how efficient we are at turning
profit into cash and to ensure that working
capital is managed effectively.
Performance in 2022
Lower, mainly due to the impact of
weaker profits and cash flows from
discontinued operations.
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
As presented in Note 4.
How we calculate it
The return as a percentage of our profit
before interest, tax and exceptional
items from total operations, divided by
average invested operating capital from
total operations.
FINANCIAL FLEXIBILITY
ACTING SAFELY
NET DEBT TO EBITDA RATIO
RECORDABLE INCIDENT RATE3
LOSTTIME RATE3
2022
2021
2020
0.8x
0.9x
1.3x
2021
2020
2019
0.78
2021
0.67
2020
0.78
2019
0.50
0.40
0.42
0.5x
15% INCREASE
25% INCREASE
Performance in 2021
Both our recordable incident rate and our lost-time rate increased during the year,
largely because we had more people on site as pandemic restrictions were lifted,
and therefore more hours worked. For more details, see pages 54 and 55.
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.
Performance in 2022
Our net debt to EBITDA ratio was higher
at 1.3x, as we repositioned the business
through the Primient transaction, with
EBITDA lower and net debt temporarily
higher as we prepared for the separation.
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 Group.
How we calculate it
The number of times our net debt exceeds
our EBITDA.
2 Restated for changes in accounting policy. See Notes 1 and 38.
3 Measured by calendar year.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
30
OUR BUSINESS TODAY
OUR PROGRESS CONTINUED
PURPOSE TARGETS AND COMMITMENTS
In 2020, we set out targets and commitments to help us pursue our
purpose over the next 10 years. We continued to make good progress
this year.
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.
2022
4.0m
2020
0
2025
target
9m
2020
0
2022
70,000
2025
target
250,000
2022
71%
2020
70%
2025
target
90%
Performance in 2022
We benefited from a strong performance
from our stevia solutions and sucralose.
Four million tonnes of sugar is equivalent to
16 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 2022
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
We count 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 who run the events.
Performance in 2022
Supporting the physical and mental wellbeing
of our colleagues is a key priority. Our survey
results showed a slightly lower score this
year compared to 75% last year, mainly due
to frustration and weariness from the
ongoing pandemic.
How we calculate it
We report the percentage of colleagues who,
in our annual employee survey, agree that
Tate & Lyle actively supports their health
and wellbeing.
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
2022
2.9m
2025
target
3m
2020
0
2022
33,000
2025
target
100,000
2020
27%
2022
33%
2025
target
50%
Performance in 2022
Our programme provided 1.2 million meals
this year to help people in need in our local
communities. Because of the pandemic we
increased and accelerated our programme,
and are now close to meeting our target.
Performance in 2022
With schools either closed or restricting
visitors, we continued to provide our support
online, mentoring students and giving food
science demonstrations. We also continued
giving educational grants and bursaries.
How we calculate it
Each food bank or charitable partner we
support tells us how many meals our
donations provide.
How we calculate it
Each school or organisation we work with
tells us how many students benefit from the
programmes we support.
Performance in 2022
We made solid progress in the year, with
a number of senior roles filled by women.
How we calculate it
Leadership roles is defined as the top three
employee bands. Out of 64 roles in these
bands, 21 were held by women. Next year, we
will be expanding this target to the top five
employee bands, representing more than 500
people. At 1 April 2022, in the new Tate & Lyle,
42% of people in these bands were women.
Tate & Lyle PLC Annual Report 2022
31
CARING FOR OUR PLANET
Scope 1 and 2 greenhouse gas emissions1◊
By 2030, we’ll have delivered a 30% absolute
reduction in our Scope 1 and 2 greenhouse
gas emissions.
Scope 3 greenhouse gas emissions1
By 2030, we’ll have delivered a 15%
absolute reduction in our Scope 3
greenhouse gas emissions.
2019
0%
2021
12%
2030
target
30%
2021
1%
2019
0%
2030
target
15%
Performance in 2021
Reduction was driven mainly by the US plants
in Decatur, Illinois and Lafayette, Indiana
eliminating the use of coal in favour of natural
gas, and the greater use of renewable energy
in our plant network.
Performance in 2021
The small reduction primarily came from
our sustainable corn and stevia programmes.
A major 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 for corn in the US, and other
third parties across our value chain.
Using waste beneficially1◊
By 2030, 100% of our waste will be
beneficially used, with an ambition to reach
75% by 2025.
Using less water1◊
By 2030, we’ll have reduced water use
intensity by 15%.
2019
62%
2021
83%
2030
target
100%
2021
+3%
2019
0%
2030
target
-15%
Performance in 2021
We made good progress again this year,
mainly by working with local partners in
the US to use more of our waste to generate
energy or as nutrients on local farms.
Performance in 2021
While our absolute use of water reduced,
lower production volumes meant that our
water intensity increased by 3% during
the year.
How we calculate it
Percentage of waste generated by our sites
that is beneficially used.
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 eliminate the use of coal in
all our operations by 2025. In October 2021,
when we de-commissioned our last
coal-fired boiler at the corn wet mill in
Decatur, Illinois, US, we delivered on that
commitment four years ahead of schedule.
Support sustainable agriculture
We committed to maintaining sustainable
acreage equivalent to the volume of corn
we buy globally each year, and through
partnerships accelerate the adoption of
conservation practices.
We achieved our goal this year, supporting
1.4 million acres of sustainable corn. More
information about the programme can be
found on page 62.
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.
TOTAL OPERATIONS
The 2022 and 2021 results for our
purpose targets set out on these two
pages are for the Group’s total operations.
The performance of our continuing
operations against our targets for ‘caring for
our planet’ can be found on pages 57 to 62.
MORE INFORMATION
You can find more details about our
sustainability performance on pages 57 to
62. Further information on the education,
meals and healthier lifestyles programmes
we support can be found on pages 50 and 51.
Information on our employee wellbeing
programmes can be found on page 45.
1 Measured by calendar year.
◊ One of the metrics used for our long-term share incentive plan.
Our Scope 1, 2 and 3 absolute greenhouse gas emissions
reduction targets are validated as science-based by the
Science-Based Targets initiative.
Tate & Lyle is a constituent of the FTSE4Good Index.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
32
REVIEW OF THE YEAR
CONTINUING OPERATIONS:
FOOD & BEVERAGE SOLUTIONS
YEAR ENDED 31 MARCH 2022
North America
VOLUME
CHANGE
REVENUE
+2%
£542m
Asia, Middle East, Africa and Latin America
+15%
£325m
Europe1
+4%
£345m
REVENUE
GROWTH
ADJUSTED
OPERATING
PROFIT
ADJUSTED
OPERATING
PROFIT
CHANGE
+16%
+25%
+19%
–
–
–
–
–
–
Food & Beverage Solutions
+5% £1,212m
+19%
£160m
+7%
Memo: Food & Beverage Solutions
(before reporting changes)
+6%
£1,111m
+19%
£190m
+12%
The adjusted results for the year ended 31 March 2022 have been adjusted to exclude exceptional items, amortisation of
acquired intangible assets, the tax on those adjustments and tax items that are themselves exceptional. A reconciliation of
statutory and adjusted information is included in Note 4 to the Financial Statements. Growth percentages are calculated on
unrounded numbers. Changes in revenue and adjusted operating profit are in constant currency.
1 Includes loss from the retained European Primary Products business for the year ended 31 March 2022 £(21) million loss
(2021 – £(14) million loss) and cost reallocations (stranded costs) of £(9) million (2021 – £(7) million).
EXCELLENT TOP-LINE GROWTH
Volume increased by 5% with revenue
19% higher in constant currency at
£1,212 million. Customer demand for
ingredients used for in-home consumption,
such as packaged and shelf-stable foods,
remained strong, supplemented by
increasing demand for ingredients used
in food and drink consumed out-of-home.
Consumer demand for healthier food and
beverages that are lower in sugar and
calories, with cleaner labels and added
fibre, also continued to grow. Strong mix
management, together with pricing
through of input cost inflation and higher
corn costs contributed 12ppts of price/mix
leverage. Acquisitions contributed 2ppts
to revenue growth. European Primary
Products is now included in the Food &
Beverage Solutions division.
Looking through the impact of the Covid-19
pandemic and before the impact of
reporting changes, compared to the year
ended 31 March 2020, volume was 10%
higher and revenue 28% higher.
Adjusted operating profit was 7% higher
in constant currency at £160 million with
the benefit of strong mix management,
cost discipline in the face of inflationary
headwinds and productivity benefits
mitigated by selected investments in future
growth. Input cost inflation impacted
profit, especially in the final quarter of
the 2021 calendar year, before customer
contracts for the 2022 calendar year were
renewed that offset expected inflation
while seeking to at least maintain absolute
unit margins. Operating losses in the
European Primary Products business
increased by £7 million to £21 million
reflecting the impact of higher corn and
other input costs. Excluding this, adjusted
operating profit for the division was 12%
higher in constant currency. The effect of
currency translation decreased revenue by
£50 million and adjusted operating profit
by £7 million.
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.
SWEETENING
– Replace sugar
– Reduce calories
– Match sweetness
– Optimise taste
MOUTHFEEL
– Add body and mouthfeel
– Improve shelf-life and stability
– Improve sensory appeal
FORTIFICATION
– Add nutrition through fibre
fortification
– Use fibre to replace sugar
to reduce calories while
maintaining taste
REPORTING CHANGES
Following the transaction to sell the
controlling stake in Primient which
was announced in July 2021, Primient
was classified as held for sale and
met the definition of a discontinued
operation under IFRS 5. The
remaining businesses of the Group
comprising: Food & Beverage
Solutions (into which the European
Primary Products business, which is
not part of the transaction, and some
stranded costs have been combined);
Sucralose; and Central costs are
reported as continuing operations in
this Annual Report. The results for the
comparative period have been
restated on a consistent basis.
Tate & Lyle PLC Annual Report 2022
33
North America
Top-line momentum continued with
volume 2% higher as strong demand
for in-home consumption continued
supported by improving out-of-home
demand, especially for customers in
the food service channel. Demand for
solutions which make food and beverage
healthier remained strong in our focus
categories in North America, driving
volume growth ahead of the overall food
and beverage market which remained in
line with the prior year. Growth was driven
by good performance across categories
such as beverage, confectionery, dairy and
bakery, especially for solutions using our
fibre portfolio.
Revenue was 16% higher in constant
currency at £542 million. Significant
volume to revenue growth leverage
reflects good mix with particularly strong
growth from the fibre portfolio and New
Products, the impact of acquisitions and
the pricing through of input cost inflation.
Revenue for New Products increased by
43% in North America, with high customer
demand for stevia and allulose sweeteners
and fibre ingredients.
Asia, Middle East, Africa and
Latin America
Volume was 15% higher reflecting
double-digit growth in each region, the
impact of acquisitions and a comparative
period impacted by the pandemic. Revenue
increased by 25% in constant currency to
£325 million. Revenue growth was strong
in each region benefiting from good mix
and pricing, higher volume and the impact
of acquisitions.
In Asia, revenue growth was strong in
the South East and North Asia, with both
benefiting from customers rebuilding
inventory after the pandemic, together with
good revenue growth in both tapioca and
stevia. In China, revenue was slightly
higher as good demand in some dairy
sub-categories and stevia demand was
partially offset by the exit from some lower
margin business.
In March 2022, we announced that we
had agreed to acquire Quantum Hi-Tech
(Guangdong) Biological Co., Ltd (Quantum),
a leading prebiotic dietary fibre business
in China. Quantum will strengthen our
fortification platform, enhance our
integrated solutions capabilities, and
extend our presence and customer
offering in China and Asia.
In Latin America, sugar reduction
solutions for customers addressing new
front-of-pack labelling regulations
accelerated growth in the Mexico and
Central American region, while growth
was also robust in southern Latin America
driven by stevia performance. In Brazil,
revenue was lower reflecting a sustained
impact from the pandemic. In the Middle
East and Africa, revenue grew strongly
reflecting good performance in the United
Arab Emirates, following the opening
of our new Customer Innovation and
Collaboration Centre in Dubai in the year,
and also in Türkiye and South Africa.
Europe
Volume was 4% higher. Revenue for
the region was £345 million including
£101 million from the retained European
Primary Products business. Revenue
was 19% higher in constant currency
both before and after the inclusion of the
European Primary Products business.
Revenue growth benefited from strong
performance in the beverage, bakery
and confectionery categories, good mix
management, the pricing through of input
cost inflation and the impact of the
pandemic in the prior year. European
Primary Products revenue growth
reflected higher pricing.
New Products
Revenue from New Products (products
launched in the last seven years)
increased by 35% in constant currency
to £173 million, representing 14% of
Food & Beverage Solutions revenue (16%
excluding European Primary Products),
with revenue growth across the three
platforms of sweeteners, mouthfeel and
fortification. Acquisitions, particularly the
Sweet Green Fields stevia business, helped
to accelerate New Product revenue growth.
The sweeteners platform delivered
exceptionally strong performance with
revenue nearly doubling in the year driven
mainly by demand for stevia solutions.
Stevia is an important natural sweetening
ingredient for customers and consumers
and our stevia solutions are used to
reduce sugar and calories in products
across a range of categories such as
beverage, dairy, confectionery and
bakery. Revenue in the mouthfeel platform
also grew strongly reflecting good demand
for clean label and higher functionality
tapioca starches.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 34
REVIEW OF THE YEAR
CONTINUING OPERATIONS:
SUCRALOSE
YEAR ENDED 31 MARCH 2022
Sucralose
VOLUME
CHANGE
REVENUE
REVENUE
GROWTH
ADJUSTED
OPERATING
PROFIT
ADJUSTED
OPERATING
PROFIT
CHANGE
+15%
£163m
+13%
£61m
+15%
The adjusted results for the year ended 31 March 2022 have been adjusted to exclude exceptional items, amortisation of
acquired intangible assets, the tax on those adjustments and tax items that are themselves exceptional. A reconciliation of
statutory and adjusted information is included in Note 4 to the Financial Statements. Growth percentages are calculated on
unrounded numbers. Changes in revenue and adjusted operating profit are in constant currency.
ROBUST DEMAND
Sucralose volume increased by 15%
driven by strong customer demand in
the beverage category as out-of-home
consumption recovered and the benefit of
optimisation of production at our facility in
McIntosh, Alabama, US. Industry demand
for sucralose continues to grow in support
of sugar reduction initiatives, while the
strong demand for our sucralose also
reflected high customer service levels in a
challenged global supply chain environment.
Revenue increased by 13% in constant
currency to £163 million reflecting strong
volume growth partially offset by the
modest impact of customer mix.
Looking through the impact of the Covid-19
pandemic, compared to the year ended
31 March 2020, volume was 16% higher
and revenue 12% higher.
Adjusted operating profit at £61 million
was 15% higher in constant currency
reflecting both operational leverage of
higher volume and input cost inflation.
Currency translation decreased revenue
by £8 million and adjusted operating profit
by £3 million.
The optimisation of production is expected
to continue in the 2023 financial year
generating small volume growth
opportunities and creating mitigation for
modest pricing headwinds and ongoing
input cost inflation.
Tate & Lyle PLC Annual Report 2022
DISCONTINUED OPERATIONS:
PRIMARY PRODUCTS IN THE AMERICAS
35
DISCONTINUED
OPERATIONS
This business’ two main markets
are bulk sweeteners, used mainly in
carbonated soft drinks, and industrial
starches. Customers are motivated
by quality, service and price.
INGREDIENTS INCLUDE:
– 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
REPORTING CHANGES
Following the Transaction to sell the
controlling stake in Primient which
was first announced in July 2021,
Primient was classified as held for
sale and met the definition of a
discontinued operation under IFRS 5.
As a result, Primient (the Primary
Products business in the Americas)
is treated as a discontinued operation
for all of the year ended 31 March
2022 and this classification has been
adopted in this Annual Report.
The results for the comparative
period have been restated on a
consistent basis. From 1 April 2022,
our interest in Primient will be
reported as a joint venture.
For more information on the
Transaction, see pages 16 and 17.
YEAR ENDED 31 MARCH 2022
Sweeteners and Starches1
Commodities
Primary Products in the Americas
Memo: Primary Products2
(before reporting changes)
VOLUME
CHANGE
–
–
REVENUE
–
–
in line £1,757m
REVENUE
GROWTH
–
–
+15%
ADJUSTED
OPERATING
PROFIT
£68m
£74m
£142m
ADJUSTED
OPERATING
PROFIT
CHANGE
(42%)
+52%
(16%)
in line £1,858m
+15%
£112m
(25%)
The adjusted results for the year ended 31 March 2022 have been adjusted to exclude exceptional items, amortisation of
acquired intangible assets, the tax on those adjustments and tax items that are themselves exceptional. Adjusted results for
discontinued operations have also been adjusted to exclude the impact of IFRS 5 Held for Sale accounting. A reconciliation of
statutory and adjusted information is included in Note 12 to the Financial Statements. Growth percentages are calculated on
unrounded numbers. Changes in revenue and adjusted operating profit are in constant currency.
1 Excludes European Primary Products, which has been retained. Reflects cost reallocations (stranded costs) transferred to
Food & Beverage Solutions reflecting separation of the businesses see Note 5.
2 Adjusted results for the former Primary Products operating segment which included European Primary Products,
consistent with how the Group disclosed the results of the Primary Products operating segment in prior years.
A CHALLENGING YEAR
Volume was in line with the prior year
with sweetener volume also in line and
industrial starch volume 8% higher.
Sweetener volume benefited from improved
out-of-home demand for beverages but
was impacted by operational and wider
supply chain disruption. Industrial starch
volume benefited from its strategy to
focus on packaging markets as well as
a weak comparative period impacted by
Covid-19. Revenue at £1,757 million
increased by 15% in constant currency
reflecting the pass through of higher
corn costs and significantly higher
revenue from Commodities due to higher
co-product prices.
Looking through the impact of the Covid-19
pandemic and before reporting changes,
compared to the year ended 31 March
2020, volume was 5% lower and revenue
was 16% higher.
Adjusted operating profit was 16% lower in
constant currency at £142 million. Adjusted
operating profit in Sweeteners and Starches
at £68 million was 42% lower in constant
currency reflecting increased costs in our
operations including productivity-related
operational disruption at the Lafayette,
Indiana facility of £6 million, and other
costs from global supply chain pressures,
partially mitigated by benefits from the
productivity programme. Input cost inflation
impacted adjusted operating profit,
especially in the final quarter of the 2021
calendar year, before customer contracts
for the 2022 calendar year were renewed
that offset expected inflation. Commodities
adjusted operating profit at £74 million was
52% higher in constant currency reflecting
exceptionally strong pricing in North
American commodities markets.
Currency translation decreased revenue
by £81 million and adjusted operating profit
by £8 million.
Sweeteners
Volume was in line with the prior year
as out-of-home consumption continued
to recover after declining during Covid-19
lockdowns. The benefit of recovering
demand was offset by the impact of
operational disruption. Volume for
customers in the domestic US market
increased slightly, while exports to
Mexico declined.
Industrial starches
Volume was 8% higher as demand for
paper and packaging recovered compared
to weaker demand in the prior year. We
continued to pursue our strategy to partner
with customers focused on higher growth
segments of the packaging market and
more sustainable, plant-based packaging.
Commodities
Commodities delivered adjusted operating
profit of £74 million, 52% higher in constant
currency. Supply chain capacity concerns
positively impacted North American
commodities pricing driving co-product
recoveries higher, especially in corn oil and
corn gluten feed. Dynamics in the US
ethanol market also improved, with pricing
stronger on increased industry demand.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 36
REVIEW OF THE YEAR
GLOBAL OPERATIONS
We make and deliver high quality ingredients
to our customers around the world, focusing
relentlessly on safety, quality and productivity.
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 and engineering
– Quality
– Procurement
– Logistics
– Customer service
– Continuous improvement
– Environment, health and safety
Tate & Lyle PLC Annual Report 2022
In a challenging year for
operations, our team continued
to deliver for our customers
while enabling our separation
into two businesses.
high on our agenda. We delivered
US$26 million in benefits in our operations
from continuous improvement projects
during the year. This helped us exceed our
six-year target of delivering US$150
million in productivity benefits two years
ahead of schedule.
The role of Global Operations is to run our
plants and manage the global supply chain
to ensure our ingredients are delivered to
our customers on time, in full and to the
right specification. Whatever the world
throws at us, we work with our customers
to find the best outcome for their needs.
A CHALLENGING YEAR FOR THE GLOBAL
SUPPLY CHAIN
This year, the world presented us with
plenty of challenges such as running our
plants under Covid-19 restrictions and the
onset of inflation. We also saw significant
disruption in the global supply chain, from
the container ship blocking the Suez Canal,
to shortages of key materials, to fewer
lorry drivers and trucks, to congestion
at ports, and, at the end of the year, to
uncertainties and disruption caused by the
conflict in Ukraine. At the same time, we
saw a considerable increase in demand as
consumer demand increased generally.
Despite this, our team did an outstanding
job of keeping our plants running and
showed tremendous agility in keeping
our customers served.
Focusing on operational excellence
In delivering for our customers, we never
lost sight of our absolute focus on our
Journey to Environment, Health and Safety
(EHS) Excellence, or J2EE. Despite the
ongoing challenges of Covid-19, we
continued to run our safety and quality
programmes, and to always focus on our
priority of keeping people safe (see pages
54-55). This was particularly important in
those plants where we were also completing
major capital projects, such as Lafayette,
Indiana and Decatur, Illinois where we
installed new natural gas-fired boilers to
complete our multi-year US$150 million
capital investment programme to increase
operational efficiency and eliminate the
use of coal. Productivity was once again
Successful separation of our operations
Aside from the day-to-day running of our
operations and delivering for customers,
Global Operations had the considerable
task of separating the plant network
and supply chain into two standalone
businesses (see page 17 for the main sites
in Tate & Lyle and Primient). This meant
not only the physical separation of IT and
other systems, but also agreeing how both
businesses would work together in the
future. Under the new arrangements,
20-year agreements are in place for
products supplied to each business, and
Primient will manage corn procurement
for Tate & Lyle in the US. A key task in the
coming year will be to work with Primient
to ensure these agreements work in
practice. Given the many years we’ve
worked side-by-side as colleagues, we are
confident it will be a strong and mutually
beneficial partnership.
Looking ahead
Tate & Lyle has a considerably different
operational footprint today, although the
challenges of managing a complex, global
supply chain remain the same. Looking
ahead, our focus on growth will mean
more capital projects to expand capacity,
investing further in our supply chain
systems to support our customers, and
a greater focus on acquisitions and
integrating new businesses into our
network. During the year, we worked
to integrate our tapioca acquisition in
Thailand, and our stevia acquisition in
China, including capacity expansion plans
in both. In the coming year our focus will
be on integrating Quantum Hi-tech, our
new fibre acquisition in China, and
continuing to serve our customers as
best we can.
37
INNOVATION AND
COMMERCIAL DEVELOPMENT
Innovation is a key enabler of our
growth strategy and how we work
with our customers.
We’re stepping up our
investment in R&D, innovation
and solutions development
to become our customers’
growth partner.
Innovation and Commercial Development
(ICD) uses its deep understanding of
consumer trends and food and beverage
categories, along with leading-edge
science and technical expertise, to create
solutions for customers which address
growing consumer demand for healthier
and tastier food and drink. It does this by
bringing together scientific and commercial
functions into one team, thereby providing
a fully integrated approach to serving
customers and helping them bring their
products to the market faster. ICD not only
creates ‘new to the world’ products, like
our CLARIA® Functional Clean-Label
Starches and DOLCIA PRIMA® Allulose,
but also develops extensions to existing
product lines, as well as new technologies
and processes which make our business
more efficient.
Our researchers and food scientists are
experts in formulating food and beverages,
working side-by-side with customers to
leverage our skills and knowledge to reduce
or eliminate sugar and calories from our
customers’ products. But we don’t just take
things out, we also improve the nutritional
profile of products by adding structure, fibre
and protein and offer other benefits, such as
our stabiliser systems which allow food to
travel over long distances. During the year,
we launched 10 New Products and more
than 30 new stevia sweetener solutions from
our innovation pipeline.
SCIENTIFIC EXPERTISE
Our deep scientific knowledge in the fields
of bio-chemistry and materials science
are at the heart of our business. Our core
capabilities in areas such as enzymology
and fermentation, industrial scale up,
drying and crystallisation and separation
and fractionation, mean we are uniquely
placed to create solutions for customers
which address growing consumer trends
such as sugar reduction, added fibre and
clean label. Supported by our nutrition and
regulatory knowledge, we carry out
research with academic organisations
around the world. This, alongside our
intellectual property and our external
partnerships and open innovation
activities, gives us a strong, science-based
innovation platform which we use to
accelerate growth.
Investing in innovation
Consumer preferences are different
around the world and so we have a global
network of labs, which we call Customer
Innovation and Collaboration Centres,
where we work together with customers
to make their products work in their local
markets. During the year, we opened a new
centre in Dubai to serve our customers
in the Middle East, and in May 2022 we
opened another centre in Santiago, Chile.
Investing in clinical research, promoting
nutrition education
We design, conduct and interpret pre-
clinical and clinical research to provide key
scientific knowledge about our ingredients,
and to support the development of new
ingredients and solutions. We also
contribute to the general understanding
of the impact of food policy on public
health, much of which we do with academic
and industry partners who bring wider
expertise and resources to the table.
Our online Nutrition Centre, launched in
2021, provides public access to technical
papers, articles on topics such as gut
health immunity, as well as helpful videos
and infographics.
In line with our purpose pillar of supporting
healthy living, we promote nutrition
education, and the science underpinning
the physiological function and health
benefits of our ingredients, in partnership
with our customers, health professionals,
academic researchers and opinion leaders.
This year, building on our partnership
with Nestlé in Latin America to share
the latest science on dietary fibre, we
launched a new online fibre partnership
with the Kellogg’s Nutrition and Health
Institute across Mexico, Colombia, Chile
and Argentina.
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 REVENUE1
£173m
NEW PRDUCTS AS A PERCENTAGE
OF FOOD & BEVERAGE SOLUTIONS
REVENUE1
14%
PATENTS GRANTED1
82
1 Year ended 31 March 2022.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 38
REVIEW OF THE YEAR
CHIEF FINANCIAL
OFFICER’S
INTRODUCTION
Our new CFO,
Dawn Allen, joined
us in May 2022. Here
she talks about the
year, along with her
first impressions
and thoughts for the
year ahead.
Joining Tate & Lyle was in many respects
an easy decision – a company driven by an
inspirational purpose; a company that’s
just completed a bold and ambitious
transformation; a company that, in the
context of all the challenges facing
businesses today, has delivered a strong
set of financial results. All three speak to
strength of the management team and
the growth potential of the business and
I am delighted to have the opportunity to
contribute my expertise to Tate & Lyle as
it enters a new chapter in its history.
A ROBUST PERFORMANCE IN A
CHALLENGING YEAR
Having only recently joined the business,
and therefore having had no hand in the
results I discuss in this introduction,
I’d like to pay tribute to the whole
Tate & Lyle team – and I include those
now part of Primient – for their
tremendous work in delivering these
results. In the context of two years of
a global pandemic, it’s certainly been
a strong financial performance. It is
especially noteworthy given that, in
parallel, the team was also working to
separate Tate & Lyle and Primient into
two standalone businesses. They did this
exceptionally well, with the finance team,
particularly our shared services team in
Łód´z, Poland, supporting the complex
task of separating our systems.
The most pleasing aspect of this year’s
results is that new Tate & Lyle – our
continuing operations – performed so
well. Revenue grew by 18%; adjusted profit
before tax by 14%; and adjusted diluted
earnings per share by 4% (all in constant
currency). Within that, our Food &
Beverage Solutions business grew
volume by 5% and revenue by 19%, while
Sucralose grew volume by 15% and
revenue by 13%. That is impressive
growth and shows the future potential
of the business.
A STRONG BALANCE SHEET TO INVEST
FOR GROWTH
However, the results were not without their
challenges. Free cash flow from continuing
operations was lower at £72 million, due in
part to rising inflation later in the year, but
also to decisions we took to preserve good
service to customers ahead of closing the
Primient transaction. Nonetheless, the
transaction has left Tate & Lyle with a very
strong balance sheet which gives us the
ability to invest behind our growth strategy.
We have already begun to do this through
the agreement to acquire Quantum Hi-Tech
in China. We have a US$800 million
undrawn credit facility; proven access
to debt capital markets; and a cash
generative business, all of which is a great
position for a new CFO to be in.
That said, there are plenty of challenges
ahead, not least rising cost inflation and
operating in an increasingly uncertain
world. It’s tough for many businesses at
the moment, but Tate & Lyle has emerged
from the pandemic in a position of strength
and is well placed to navigate through
these challenges and deliver on its growth
agenda. I look forward to playing my part
in this exciting future.
DAWN ALLEN
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
I’m delighted to have
joined an exceptional
team, and look forward
to contributing my expertise
to helping Tate & Lyle
deliver our purpose-led
growth strategy.
DAWN ALLEN Chief Financial Officer
Tate & Lyle PLC Annual Report 2022
GROUP FINANCIAL REVIEW
SUMMARY OF FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2022 (AUDITED)
39
YEAR ENDED 31 MARCH1
CONTINUING OPERATIONS
Revenue
Adjusted operating profit2
– Food & Beverage Solutions
– Sucralose
– Central
Adjusted operating profit
Net finance expense
Adjusted profit before tax
Exceptional items
Amortisation of acquired intangible assets
Profit before tax
Income tax expense3
Profit for the year – continuing operations
Profit for the year – discontinued operations
Profit for the year – total operations
Earnings per share (pence) – continuing operations
Adjusted diluted
Diluted
Earnings per share (pence) – total operations
Adjusted diluted
Diluted
Cash flow and net debt – total operations
Adjusted free cash flow
Net debt
2022
£M
1 375
RESTATED*
2021
£M
1 211
CHANGE
%
14%
160
61
(51)
170
(25)
145
(93)
(10)
42
(16)
26
210
236
24.9p
5.5p
56.0p
50.2p
16
626
156
55
(51)
160
(26)
134
(34)
(10)
90
(1)
89
164
253
25.2p
19.1p
61.2p
53.8p
250
417
3%
9%
1%
6%
4%
8%
(>99%)
(4%)
(54%)
(>99%)
(71%)
29%
(7%)
(1%)
(71%)
(8%)
(7%)
CONSTANT
CURRENCY
CHANGE
%
18%
7%
15%
–
12%
–
14%
(>99%)
(9%)
(37%)
(>99%)
(46%)
34%
6%
4%
(46%)
(4%)
6%
* Restated to reflect discontinued operations (see Notes 1 and 12).
1 Adjusted results and certain other terms and performance measures used in this document are not directly defined within IFRS. We have provided descriptions of such metrics and their
reconciliations to the most directly comparable measures reported in accordance with IFRS and the calculation (where relevant) of any ratios in Note 4.
2 For a reconciliation to the IFRS 8 segmental results refer to Note 5.
3 Statutory income tax expense on continuing operations of £16 million (2021 – £1 million) includes an adjusted income tax charge of £28 million (2021 – £16 million), exceptional tax charge of
£12 million (2021 – exceptional tax credit of £7 million) and a tax credit on adjusting items of £24 million (2021 – £8 million). Refer to Note 11.
CONTINUING OPERATIONS – ADJUSTED OPERATING PROFIT
YEAR ENDED 31 MARCH
ADJUSTED OPERATING PROFIT
Food & Beverage Solutions
As previously reported
Costs reallocation1
Retained European Primary Products business2
Food & Beverage Solutions
Sucralose
Central costs
Adjusted operating profit – continuing operations
2022
£M
190
(9)
(21)
160
61
(51)
170
CONSTANT
CURRENCY
CHANGE
%
12%
(21%)
(63%)
7%
15%
–
12%
2021
£M
177
(7)
(14)
156
55
(51)
160
1 Inclusion of certain operating costs which are reallocated from Primary Products to Food & Beverage Solutions because they will remain with the Group post disposal.
2 Adjustment to include the European Primary Products business in Food & Beverage Solutions, which is not subject to the Primient disposal transaction.
CONTINUING OPERATIONS
Continuing operations comprise: Food
& Beverage Solutions (into which the
European Primary Products business,
which is not part of the Transaction,
and certain stranded costs have been
combined); Sucralose; and Central costs.
CENTRAL COSTS
Central costs, which include head office
costs and certain treasury and legal
activities, were in line with the prior year in
constant currency at £51 million benefiting
from strong discipline on overhead costs
which offset higher costs from continued
investment in the business.
NET FINANCE EXPENSE AND LIQUIDITY
Net finance expense from continuing
operations at £25 million was 4% lower
(in line with the prior year in constant
currency), mainly reflecting lower net
interest on the Group’s net retirement
benefit liabilities being offset by a full year
of interest on the US$200 million US
Private Placement Notes issued in the
first half of the prior year.
EXCEPTIONAL ITEMS
The Group recorded a net exceptional
charge of £105 million in continuing
operations, comprising £93 million of
exceptional items included in profit before
tax and a £12 million charge included as
exceptional items within tax. Such items
principally included the following:
– £79 million of cash costs associated with
the transaction to dispose of the Primary
Products business in the Americas
(‘Primient’ or the ‘Primient business’);
– £13 million non-cash impairment charge
related to the write-off of dedicated
assets in the European Primary
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 40
REVIEW OF THE YEAR
GROUP FINANCIAL REVIEW CONTINUED
In the prior year, the Group recorded a
net exceptional charge of £34 million in
continuing operations included in profit
before tax and a £7 million credit included
as an exceptional item within tax.
DISCONTINUED OPERATIONS
Discontinued operations comprises the
Primient business which represents a
disposal group.
Products business and certain other
assets, which are obsolete as a result
of the Primient business disposal;
– £9 million net exceptional gain resulting
from a variation of certain benefits
within one of the US pension plans.
This consists of a non-cash past service
credit of £13 million which has been
partially offset by a cash charge of
£4 million;
– £9 million charge related to stabiliser
product contamination, an issue
affecting not only the Group but the
wider industry, consisting of a £6 million
write-off of impacted inventories and
receivables and a further £3 million
impairment of certain fixed assets;
– £1 million of cash costs relating to
productivity and simplification projects
in our operations; and
– £12 million tax charge due to a reduction
in the amount of brought forward UK tax
losses and the amount of US State tax
credits that the Group expects to be able
to utilise as a result of the agreement to
sell a controlling interest in Primient.
Exceptional cash outflows for the year
totalled £60 million (for total operations),
comprising £48 million of cash outflows
related to charges recorded in the current
year and £12 million of cash outflows
resulting from exceptional costs recorded
in the prior year.
The Group is in the fourth year of its
programme to generate productivity
benefits of US$150 million by 31 March
2024 and has already exceeded this target,
delivering US$158 million of total benefits
to date. During the year ended 31 March
2022, exceptional cash costs in respect
of this programme of US$4 million
(£3 million, total operations) were
recognised (either paid or provided),
bringing the total to date to US$52 million.
DISCONTINUED OPERATIONS
TAXATION
The adjusted effective tax rate on
continuing operations was 19.3%
(31 March 2021 – 12.1%). The rate reflects
the prevailing rates of corporation tax in
the US and UK, the jurisdictions most
applicable to the Group’s activities.
The prior year rate benefited from the
release of certain tax provisions following
expiry of statute of limitations as well as
recognition of certain tax credits in the US.
We expect the adjusted effective tax rate
for the year ending 31 March 2023 to be
slightly higher than the current year.
The reported effective tax rate (on
statutory earnings) for continuing
operations was 38.4% (31 March 2021 –
1.2%). The higher effective tax rate is due
to the factors highlighted above and the
impact of the £12 million exceptional tax
charge on the de-recognition of deferred
tax assets in the US and UK as a result of
the agreement to sell a controlling interest
in Primient. The prior year also benefited
from a £7 million exceptional tax credit.
EARNINGS PER SHARE
For continuing operations, adjusted basic
earnings per share decreased by 1%
(increase of 4% in constant currency) to
25.2p and adjusted diluted earnings per
share at 24.9p were also 1% lower (4%
higher in constant currency). The increase
in constant currency reflects strong
business performance mitigated by a
higher adjusted effective tax rate. Statutory
diluted earnings per share decreased by
13.6p to 5.5p, reflecting lower statutory
profit for the year mainly due to higher
exceptional charges in the year.
YEAR ENDED 31 MARCH
Revenue
Primary Products as previously reported – adjusted operating profit
Costs reallocations to continuing operations¹
Transfer of European Primary Products business to continuing
operations²
Adjusted operating profit
Net finance expense
Adjusted share of profit after tax of joint ventures
Adjusted profit before tax
Exceptional items
IFRS 5 Held for Sale adjustments
Profit before tax
Income tax expense
Profit for the year – discontinued operations
2022
£M
1 757
112
9
21
142
(3)
35
174
(3)
83
254
(44)
210
Adjusted profit after tax for discontinued
operations (which excludes the impact of
exceptional items and IFRS 5 Held for Sale
adjustments) of £146 million was 13%
lower (9% lower in constant currency) than
the prior year, mainly reflecting weaker
operating performance.
IFRS 5 HELD FOR SALE ADJUSTMENTS
OF £83 MILLION
IFRS 5 requires certain adjustments to
assets held for sale, for which the relevant
items to the Group from the Primient
disposal transaction were as follows:
– Cessation of depreciation of assets of
the Primient business, this reduced
operating costs by £68 million; and
– Cessation of equity accounting of the
share of profits from the Group’s
existing joint venture interests in Almex
and Bio-PDO. The impact of this resulted
in a reduction in share of profit after tax
of joint ventures of £27 million; however
dividends recognised in the period were
recorded as income within discontinued
operations of £42 million.
Such adjustments applied prospectively
from 1 July 2021 (being the date at which
the Primient disposal transaction became
highly probable) and comparatives are
not restated. The impact of these
adjustments is reflected in discontinued
operations only.
ADJUSTED SHARE OF PROFIT AFTER TAX OF
JOINT VENTURES
The Group’s adjusted share of profit after
tax of joint ventures of £35 million was 38%
higher (37% higher in constant currency)
principally due to higher profits in both
joint ventures reflecting good demand for
textiles and cosmetics at Bio-PDO and
2021
£M
1 596
158
7
14
179
(4)
26
201
(8)
–
193
(29)
164
CHANGE
%
CONSTANT
CURRENCY
CHANGE
%
10%
(29%)
20%
56%
(21%)
30%
38%
(13%)
66%
–
32%
(50%)
29%
15%
(25%)
21%
63%
(16%)
25%
37%
(9%)
64%
–
37%
(51%)
34%
1 Exclusion of certain operating costs which are reallocated from Primary Products to Food & Beverage Solutions because they will remain with the Group post disposal.
2 Adjustment to include the European Primary Products business in Food & Beverage Solutions, which is not subject to the Primient disposal transaction.
Tate & Lyle PLC Annual Report 2022
41
good demand for sweeteners at Almex.
The statutory share of profit after tax of
joint ventures of £8 million reflects the
impact of stopping equity accounting on
1 July 2021 (reduction of £27 million).
NET FINANCE EXPENSE
Relates to the interest charge on certain
leases, principally railcars.
EXCEPTIONAL ITEMS
Relates to the exceptional charge
recognised within the Primient business.
This cash charge of £3 million relates
principally to productivity and simplification
projects in its operations.
TOTAL OPERATIONS
Total operations or the Group, comprise
both the continuing operations and the
discontinued operations.
CASH FLOW, NET DEBT AND LIQUIDITY
Adjusted free cash flow for total operations
was £16 million (2021 – £250 million)
reflecting investments in working capital
following actions to separate the Primient
business and the adverse impact of input
cost inflation. Adjusted free cash flow for
total operations excludes cash outflows
from exceptional items in the year of
£60 million (2021 – £32 million).
In continuing operations free cash flow
was £72 million, £81 million lower than the
prior year. Of this year-on-year reduction,
£41 million related to increased working
capital driven by the completion of the sale
of Primient where, to help mitigate the
risks of separating our IT systems, we took
decisions to build inventory to ensure good
service was maintained to customers.
Higher capital expenditure and the broader
impact of inflation also contributed to the
overall reduction.
In discontinued operations, free cash flow
was a £(56) million outflow, £153 million
lower than the prior year mainly due to the
Primient disposal. As part of the closing
of the transaction, US$120 million
(£92 million) of higher working capital
was recovered through increased disposal
proceeds. Lower profits and the impact
of inflation were further drivers of the
year-on-year decline.
We expect capital expenditure for the 2023
financial year to be in the £90 million to
£100 million range, an increase compared
to investment in the 2022 financial year of
£75 million. The increase reflects increased
investment in growth capacity and
investment related to acquired businesses.
Net debt at 31 March 2022 of £626 million
was £209 million higher than in the prior
year. The increase primarily reflects
dividend payments of £144 million, cash
exceptional costs of £60 million and an
increase in value of debt denominated in
foreign currencies of £24 million, which
more than offset the free cash flow
generated in the period.
Leverage at 31 March 2022 was 1.3x net
debt to EBITDA on a total operations
reported basis (2021 – 0.8x) and 1.1x on
a covenant basis (2021 – 0.6x). Following
receipt of cash proceeds from the sale
of a controlling stake in the Primient
business on 1 April 2022, the £497 million
special dividend paid to shareholders and
the acquisition of Quantum, the continuing
Group has pro-forma1 net leverage of less
than 1.0x net debt to EBITDA.
DIVIDENDS
Proceeds from sale of controlling stake
in Primary Products
On completion of the Transaction,
Tate & Lyle received gross cash
proceeds of approximately £1.1 billion
(US$1.4 billion), taking into account
estimates of cash, debt, debt-like items
and working capital balances at
completion. After one-off transaction and
separation costs, as well as estimated tax
liabilities associated with the Transaction,
net proceeds were approximately
£0.9 billion (US$1.2 billion) subject to
customary post-completion adjustments
in accordance with the Transaction
documentation.
£500 million special dividend and
associated share consolidation
Having taken into account all relevant
considerations, the Board decided to
return approximately £500 million to
ordinary shareholders by way of a special
dividend of £1.07 per existing ordinary
share. To maintain comparability, so far
as possible, of the Company’s share price
before and after the special dividend, it
was accompanied by a consolidation and
division of the Company’s ordinary share
capital resulting in ordinary shareholders
receiving six new ordinary shares for every
seven existing ordinary shares they held.
Information about the special dividend
and share consolidation can be found in
the shareholder circular dated 7 April
2022. The special dividend and share
consolidation were approved by
shareholders at a General Meeting on
26 April 2022. The share consolidation
applied to ordinary shareholders on the
Register on 29 April 2022, while the special
dividend was paid on 16 May 2022.
Final dividend for year ended
31 March 2022
As previously communicated, the sale of
the controlling stake in Primient reduces
the Group’s earnings base by around 50%.
As a result, the Board has decided to
reduce the dividend to reflect this new
base. The pay-out ratio (dividend cost
compared to the Group’s earnings base)
has been maintained at the same level, and
the Board intends to operate a progressive
dividend policy from the new base. The
share consolidation reduced the number
of ordinary shares in issue, allowing
dividends to be paid over a smaller number
of shares, with the result that dividends
per share reduce by less than the 50%.
CASH FLOW, NET DEBT AND LIQUIDITY
YEAR ENDED 31 MARCH
ADJUSTED FREE CASH FLOW2
Continuing operations
Adjusted operating profit
Adjusted depreciation and adjusted amortisation
Share-based payments charge
Changes in working capital
Capital expenditure
Pensions, tax and interest
Other non-cash movements
Adjusted free cash flow – continuing operations
Adjusted free cash flow – discontinued operations
Adjusted free cash flow – total operations
2022
£M
170
70
10
(68)
(75)
(39)
4
72
(56)
16
2021
£M
160
87
5
(8)
(60)
(31)
–
153
97
250
CHANGE
£M
10
(17)
5
(60)
(15)
(8)
4
(81)
(153)
(234)
1 Pro-forma leverage on 1 April 2022 calculated after: completion of Primient disposal; the £500 million (approx.) special dividend paid to shareholders and the acquisition of Quantum
Hi-Tech (US$237 million).
2 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 Note 4.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 42
REVIEW OF THE YEAR
GROUP FINANCIAL REVIEW CONTINUED
The Board is recommending a final
dividend for the year ended 31 March 2022
of 12.8p (2021 – 22.0p) per share, bringing
the full year dividend to 21.8p per share
(2021 – 30.8p). This will be paid on 5 August
2022 to all shareholders on the Register
of Members on 1 July 2022. As well as the
cash dividend option, shareholders will
be offered a Dividend Reinvestment Plan
alternative. The interim dividend for the
year ending 31 March 2023 is expected
to be similarly adjusted to reflect the
new earnings base.
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. Consistent with
the prior year, 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).
On disposal of the Primient Business,
the Group retains all US defined benefit
pension schemes but certain funded
non-qualified deferred compensation
arrangements as well as the unfunded
post-retirement medical plans relating
to employees who transitioned to the
Primient business (together representing
a net deficit of £28 million) were disposed
of and were therefore classified as held
for sale.
At 31 March 2022, the Group’s retirement
benefit obligations are in a net deficit of
£107 million (31 March 2021 – net deficit of
£140 million). This decrease of £33 million
is principally due to classification of certain
plans as held for sale as mentioned above.
Excluding the impact of the held for sale
classification, the net deficit decreased by
£5 million mainly driven by a £13 million
decrease as a result of a plan amendment
to vary benefits to the US pension plans
for which the past service credit was
recognised within exceptional items.
The net deficit decreased further as a
result of employer contributions of
£10 million. These decreases were
partially offset by a currency translation
charge of £8 million and other movements
of £10 million.
During the year ended 31 March 2022,
the asset performance closely matched
and offset the actuarial gain in the funded
plans. The actuarial gain was principally
due to higher corporate bond yields in
both the US and UK leading to higher
discount rates.
The main UK plan was subject to a ‘buy-in’
in the 2020 financial year and therefore the
significant decrease in obligations due to
a higher discount rate was largely offset
by a decrease in the value of the ‘buy-in’
insurance policy. As a result, the balance
sheet for the UK plans remained consistent
with the prior year.
In the year ended 31 March 2022,
pension contributions of £10 million were
marginally lower than the prior year.
In the first half of the next financial year,
the Group expects to make a one-off
contribution of approximately £11 million
to settle a post-transaction price
adjustment in respect of the bulk annuity
policy ‘buy in’ of the main UK plan.
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 30.
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 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 2024. The sale of
a controlling stake in Primient is included
in this assessment. 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 2022, the Group has significant
available liquidity, including £127 million of
cash and US$800 million (£608 million) of
committed and undrawn revolving credit
facility, which does not mature before March
2025. The earliest maturity date for any of
the Group’s loans is October 2023,
when $120 million will mature. During
the prior 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
also considered the impact of net proceeds
of the sale of a controlling stake in Primient
of £0.9 billion after one-off transaction
and separation costs and estimated tax
liabilities, the return of capital to
shareholders via a special dividend of
approximately £500 million on 16 May 2022
and the associated share consolidation
(refer to Note 37) and the commitment to
acquire Quantum (refer to Note 35).
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 1.1 times at 31 March 2022. As set
out below, for a covenant breach to occur
it would require a significant reduction in
Group profit. Such reduction is considered
to be unlikely.
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
retained in the US following the Primient
transaction; the loss of two of our largest
Food & Beverage Solutions customers;
and significant energy, raw material
and commodity inflation due to the
consequences of conflict in Ukraine.
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. The Directors
have also 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 reduce
significantly in order to cause a breach.
Accordingly, the Directors have concluded
that there are no material uncertainties with
respect to going concern and have adopted
the going concern basis in preparing the
consolidated financial information of the
Group as at 31 March 2022.
Tate & Lyle PLC Annual Report 2022
43
UNAUDITED PRO-FORMA FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2022
On 21 October 2021, the Group published
a document to show the impact of
restatement of prior year financial
information for the shareholder-approved
sale of a controlling interest in the Primary
Products business (‘Primient’) – within
Section II of that document was included
certain pro-forma financial information,
which took the restated continuing
operations financial information and
showed the pro-forma effect of further
adjustments reflecting additional factors
that came into effect at completion of the
Transaction. These adjustments were for:
– The financial impact of certain long-
term agreements that will exist between
the Group and Primient; and
– The Group’s equity-accounted share of
profits of the Primient business from
completion of the Transaction.
Because the adjustments are also not
included in the continuing operations
information contained within the results
for the year ended 31 March 2022 disclosed
herein, pro-forma adjustment is given to
them as set out below.
While IFRS 5 provides the basis on which
to determine the composition of continuing
and discontinued operations, pro-forma
financial information is a non-IFRS
measure. In addition, because such
pro-forma financial information contains
estimates with respect to each of the items
set out above, it should not be used to
replace the restated statutory financial
information but is an illustration of how the
Group will present its financial results.
Further to the pro-forma infortmation
below, included in Additional Information
on page 206 are details on the
pro-forma Return on Capital Employed
for the year ended 31 March 2022 for
continuing operations.
PRO-FORMA – YEAR ENDED 31 MARCH
Adjusted operating profit – continuing operations
Impact of long-term agreements
Pro-forma adjusted operating profit
Pro-forma share of Primient Joint Venture profit
Net finance expense
Pro-forma adjusted profit before tax
Pro-forma adjusted tax charge
Pro-forma adjusted profit for the year
FOOD &
BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
JOINT
VENTURES
£M
CENTRAL
£M
2022
TOTAL
£M
2021
TOTAL
£M
CHANGE IN
CONSTANT
CURRENCY
%
160
(7)
153
–
–
153
61
–
61
–
–
61
–
–
–
61
–
61
(51)
–
(51)
–
(25)
(76)
170
(7)
163
61
(25)
199
(37)
162
160
(7)
153
74
(26)
201
(34)
167
12%
–
13%
(13%)
–
5%
(13%)
3%
The table above starts with the adjusted operating profit set out in Note 5 (year ended 31 March 2022, section (ii) Adjusted operating
profit) and then gives pro-forma effect to the financial impact of certain long-term agreements between the Group and Primient, and
the Group’s equity accounted share of profits of Primient from completion.
The resultant pro-forma adjusted operating margins are as follows:
Pro-forma adjusted operating margin
FOOD & BEVERAGE
SOLUTIONS
SUCRALOSE
CENTRAL
12.6%
37.1%
n/a
TOTAL
11.9%
Pro-forma comparative for the year ended 31 March 2021 – Food & Beverage Solutions: 14.1%, Sucralose: 36.8%, Total: 12.7%.
YEAR ENDED 31 MARCH 2022
Earnings Per Share
Diluted weighted average number of ordinary shares (millions)
Adjusted diluted EPS (pence)
AS REPORTED
TOTAL OPERATIONS
PRO-FORMA
470.4
56.0p
403.5
40.0p
Following the completion of the special dividend and share consolidation in May 2022, pro-forma EPS has been updated to give effect to
all components of the Transaction and the share consolidation. For better comparability in future, the share consolidation is included as
if it were effected on 1 April 2021. On a pro-forma basis, adjusted diluted EPS of 40.0p represents dilution of 29% compared to adjusted
diluted EPS from total operations as reported.
The Group’s share of the Primient joint venture profit is set out in the table below:
SHARE OF PRIMIENT JOINT VENTURE PROFIT:
Adjusted profit before tax from discontinued operations1
Pro-forma effect of Primient’s financing facilities2
Impact of long-term agreements
Additional standalone costs in Primient3
Adjusted pro-forma profit before tax of Primient
Share of Primient joint venture profit at 49.9% pro-forma equity interest
YEAR ENDED 31 MARCH
2022
£M
174
(45)
7
(14)
122
61
2021
£M
201
(45)
7
(14)
149
74
1 Primient joint venture’s adjusted profit before tax of £174 million (2021 – £201 million) is before charging exceptional items of £3 million (2021 – £8 million) and the impact of held for sale
adjustments of £83 million.
2 Updated to reflect final borrowings in Primient of $1.1 billion.
3 Represents additional costs required in Primient in order to replicate back-office activities previously shared across Tate & Lyle PLC.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 44
REVIEW OF THE YEAR
OUR PEOPLE: LIVING
OUR PURPOSE AND
EMBRACING CHANGE
This was a year of
significant change for
our people, and they
stepped up to the
challenges they faced
with purpose, resilience
and agility.
THRIVING THROUGH THE
PANDEMIC
Our people are the heartbeat of our
company – they are passionate about our
purpose and passionate about making
Tate & Lyle a successful business and a
great place to work. We asked a lot of them
this year – separating the Group into two
standalone businesses during a global
pandemic, while experiencing high
customer demand and supply chain
disruption – and they delivered time and
time again. This was all the more
creditable because they started the year
already exhausted from living through the
first year of the pandemic and had to find
new reserves of strength to get through
another year of lockdowns and restrictions.
But in the end, we did far more than ‘get
through’. We thrived as a business, not
least because we learnt a number of things
during the first year of Covid-19 which
benefited us in the second. More personal,
connected and open ways of communicating.
The empowerment of our local leadership.
Our ability to serve our customers in a
more agile way and to connect with them
using technology. And, of course, the
resilience of our people.
Guided by our purpose, we continued to
prioritise keeping each other safe and well
inside and outside work. Our front-line
staff continued to operate our plants safely
and efficiently, despite skeleton crews
and ongoing pandemic protocols, ensuring
that we kept our customers served. Our
office-based staff continued to adapt to
homeworking, coming up with new ways
of staying connected. Our commercial and
innovation teams found ever more creative
ways of staying close to and supporting our
customers. And we did not forget our local
communities – colleagues across the
world spent more time giving back to those
who faced hardships from the pandemic.
It was a year like no other and once again,
our people stepped up.
SEPARATING THE BUSINESS WHILE
DOING THE DAY JOB
Separating the company into two
standalone businesses during the year
was an immense task. To do this in just
eight months, while delivering strong
financial results, is a tremendous
achievement for all the people involved,
many of whom worked on the separation
while doing their day job. While it was a lot
of hard work, it also presented opportunities
for people to take on new roles and develop
new skills which will serve them well in the
future and support both companies as they
focus on the growth opportunities ahead.
It was also an unsettling time because
change, however exciting, is challenging.
A key priority, particularly for our
leadership team, was open and honest
communication. A lot of time was spent on
video calls, in townhalls and face-to-face
meetings with people, explaining why we
were separating the two businesses
and what it meant for our people both
collectively and for individuals’ roles.
We were pleased that employees on the
whole were supportive and excited about
the future, and understood that the two
separate companies would bring new
opportunities for personal and collective
development.
A CULTURE OF AMBITION AND
EXPERIMENTATION
Separating into two businesses was a
bold move, and that sense of boldness,
ambition and innovation is something
we want to make a central part of our
culture moving forward. Tate & Lyle has
always been a place for explorers and
experimenters, and we want everyone to
‘find their innovator and disruptor within’.
This means having the courage to
experiment, share ideas openly, and
respond quickly. To this end, we have
defined four new behaviours, explained in
the box below, to support our three values
of safety, integrity and respect.
CREATING A DYNAMIC
AND AMBITIOUS
CULTURE
We have introduced four new
behaviours to underpin our growing
culture of innovation and
experimentation.
BE CURIOUS
Ask questions; listen without
judgement; look up and out to bring
in fresh perspectives
BRING CHALLENGE
Invite it; be open to feedback; call out
alternatives to improve; say what’s
needed in the moment
CREATE FLOW
Know when to step in or when to
trust others; bring creativity to
constraints; remove obstacles
for others
HAVE COURAGE
Stand proud behind ideas that
inspire; be more ambitious; see
mistakes as fuel for learning
Tate & Lyle PLC Annual Report 2022
PRIORITISING WELLBEING
Caring for our people’s physical and
mental health is central to our purpose.
This is shown in many ways, not least by
our health and wellbeing purpose target,
which is measured through our annual
employee survey each year. This year, 71%
of our employees told us that we actively
supported their wellbeing. This was
slightly lower than the 75% reported last
year, mainly due to weariness and
frustration from a second year of
pandemic restrictions. We will be working
hard to improve this score in the year
ahead. Wellbeing is also a core element of
our Journey to EHS Excellence (J2EE)
programme (see more on page 52).
Through J2EE, teams at each of our
sites track what’s being done to care for
the wellbeing of our employees through
initiatives such as training events, healthy
eating information, running groups and
education sessions.
The Covid-19 pandemic made it more
important than ever that we support the
physical and mental health of our people.
For many, the past year continued to be a
time of ongoing uncertainty and relentless
challenge – working at home or working in
very different circumstances in our plants;
for some, the difficulties of combining
home-schooling children with work; and
for others, isolation. Our aim was to
remain supportive and compassionate
throughout, doing whatever was needed
for people’s individual circumstances.
Separating the company into
two standalone businesses
during the year was an
immense task, and to do it
in just eight months, while
delivering strong financial
results, is a tremendous
achievement for all our people.
LAURA HAGAN Chief Human
Resources Officer
We continued to encourage people and
their families to use our free counselling
service, offered as part of our global
Employee Assistance Programme. The
number of volunteer Mental Health First
Aiders also increased – we now have more
than 70 globally across Tate & Lyle.
As last year, the example of our leadership
team was essential in setting the tone,
demonstrating support and compassion
for people’s individual circumstances.
Through regular virtual cafés, our leaders
were open about their own challenges,
and encouraged their teams to do the
same. We also supported employees’
own initiatives – it was great to see so
many teams coming together for yoga
sessions, coffee mornings, and singing
or exercise groups.
STEPPING UP OUR
COMMUNICATIONS
Technology has permeated everyone’s
working lives since the pandemic started,
and continued to be hugely important in
enabling the frequent, informal, local
conversations that have been so critical
in keeping everyone connected.
The business separation project added
new urgency to the necessity for frequent,
open communication, as people wanted
information about what was happening,
reassurance about the future, and the
opportunity to ask questions. Our leaders
continued to use virtual cafés to connect
with colleagues, as well as encouraging
discussion and debate through our internal
social media channels. We established
a dedicated team to plan, prepare and
deliver all our communications throughout
the business separation process. This
involved, amongst other things, regular
email messages and videos from Nick
Hampton and members of the Executive
Committee. They discussed key aspects of
the transformation to generate excitement
about the future of both Tate & Lyle and
Primient. The separation into two
companies also meant separating our
communication channels, with new
intranets built for both companies.
45
EMPLOYEE
PROFILE
As at 31 March 2022
4,591
(2021: 4,441)
EMPLOYEES BY GEOGRAPHY (%)
As at 31 March 2022
1
9
13
29
48
North America
Europe
Asia Pacific
Latin America
Middle East and Africa
GENDER DIVERSITY (%)
As at 31 March 2022
33
BOARD
67
44
EXECUTIVE
COMMITTEE
56
31
ALL
EMPLOYEES
69
Men
Women
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 46
REVIEW OF THE YEAR
OUR PEOPLE CONTINUED
CODE OF ETHICS
Central to our Code is a profound
respect for human rights –
particularly health and safety,
which is our highest priority.
LANGUAGES
11
% OF EMPLOYEES TRAINED
IN THE CODE
98%
% OF EMPLOYEES (WHO REQUIRE IT)
TRAINED IN COMPETITION LAW
97%
% EMPLOYEES (WHO REQUIRE IT)
TRAINED IN HUMAN TRAFFICKING
97%
POLICIES
Alongside the Code, we publish
our supporting policies on our
intranet. These include:
– Competition (Anti-trust)
– Gifts and Hospitality
– Anti-Corruption/Bribery
– Agents and Distributors
We also publish supply chain
policies (including trade
compliance policies), and our
statement on anti-slavery and
human trafficking can be found
at www.tateandlyle.com/
antislaverystatement
Tate & Lyle PLC Annual Report 2022
We publicise the Code widely across
Tate & Lyle, including through online
training for everyone and face-to-face
training, either in person or via a Teams
call, for areas of particular risk. We
strongly encourage people to report
breaches through our Speak Up
(whistleblowing) programme, which is
advertised in all our plants and offices, on
our intranet and through 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 54 compared with 57 in 2021. These
include our first calls from Asia, which
marks a real cultural shift, with people in
that region now feeling they can raise
issues. Given our focus on Asia as a growth
market, this is particularly important for
the future. We are also getting more
variety in the types of calls we receive,
which in the past have tended to be mostly
about HR issues. This again is a good step
forward, since it means people are really
understanding the Code and what
constitutes a concern for the business.
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.
We strongly encourage
people to report breaches
through our Speak Up
programme, which is
advertised in all our plants,
labs and offices, on our
intranet and through other
internal communications.
LAUREN HIGGINS Head of Ethics
and Compliance
REWARDING AND RECOGNISING
OUR PEOPLE
Fair, performance-based recognition
is fundamental to people’s motivation.
We ensure our remuneration packages
are fair by benchmarking them regularly
against the market. In our approach to
the salary review this year we were
particularly attentive to the inflation and
cost of living pressures faced by people in
many of the countries in which we operate.
We recognise that the success of the
business is a collective effort, which is why
we continue to recognise the majority of
our employees with at least six months’
service with some form of discretionary
reward or recognition for the year.
But we know that 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. For example, the Executive
Committee nominates at least one person
or team each month for special recognition;
and people are encouraged to recognise
colleagues’ achievements and contributions
through our internal social media channels.
DEVELOPING TALENT AND
ENHANCING LEADERSHIP SKILLS
We continued to evolve our training
provision and coverage from a largely
face-to-face training environment to a
largely digital one. Traditional face-to-face
programmes still have their place, but
technology has given us the opportunity
to democratise learning, which means
offering people a range of training options
which they can take up in their own time
and which are geared to their own
individual needs. We continued to offer
our employees LinkedIn Learning, with
over 17,000 courses available in seven
languages, on almost every business topic
imaginable. We also used our company-
wide Workday® platform to provide over
800 learning and training courses.
DOING BUSINESS WITH INTEGRITY
– OUR CODE OF ETHICS
Our values of safety, integrity and respect
are the cornerstone of our business.
We expect everyone at Tate & Lyle, and all
who work with us, to act in accordance
with these standards, and it is a key part of
the due diligence we do when considering
an acquisition. We set out what ‘doing
business with integrity’ means in our
Code of Ethics, currently available in
11 languages. Central to our Code is a
profound respect for human rights.
EQUITY, DIVERSITY AND INCLUSION
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 equity,
diversity and inclusion together are a key
business-wide priority for us, affecting
our current and future employees, our
customers, our supply chain and our
communities. This is not simply because
it’s the right thing to do, but because our
purpose demands it.
We want to embrace equity, diversity and
inclusion in everything we do. That’s
why we are refreshing our policies and
systems, developing new ways of working,
educating our people, and hiring new
people with this agenda front of mind.
We have also set targets for the next eight
years to measure our progress (see page
49), and have established a dedicated team
to progress equity, diversity and inclusion
within the business.
WHAT EQUITY, DIVERSITY AND INCLUSION
MEANS TO US
During the year, we held hundreds of
conversations in our plants, labs and offices
around the world to find definitions of these
three words that resonated with our people.
Here is what we discovered together:
– Equity: grounded in the principles of
fairness; establishing policies and
practices; creating access to
opportunities; removing barriers; and
ensuring everyone has the opportunity
to achieve their potential
– Diversity: the mosaic of people who
bring a variety of backgrounds, lived
experiences, perspectives and values
as assets to the groups and
organisations with which they interact
– Inclusion: a dynamic state of operating
that enables everyone to feel safe,
respected and valued for who they are
and for their contributions towards
organisational and societal goals.
The simple way we think about these three
words together is that equity is our impact;
diversity is a fact; and inclusion is the act.
OUR EQUITY, DIVERSITY AND INCLUSION
STRATEGY
This strategy belongs to our people, as
they have helped to create it and are
entrusted to help shape its future. We are
integrating equity, diversity and inclusion
into our culture and purpose by focusing
on four pillars:
– Systems: integrate equity, diversity and
inclusion into core organisational
policies and practices to promote
equitable advancement, retention and
reward
– Talent: ensure the diversity of our
workforce reflects the local
communities we serve
47
OUR PEOPLE: EMPLOYEE
RESOURCE GROUPS
Helping to create awareness and enable
communities to drive inclusive interaction
across the business.
CELEBRATING THE WORK OF OUR ERGs
Our Employee Resource Groups
(often called ERGs) play an important
part in enabling colleagues to
experience solidarity, support,
education, growth and development.
They are strategic, self-organised
groups that work to advance equity,
diversity and inclusion in our workplace
and local communities, helping to
connect under-represented groups
across Tate & Lyle and cultivate a sense
of belonging. We have five groups:
– Professional Women’s Network
– LGBTQ+ Network
– Black Employee Network
– Happy Healthy Minds (focusing on
mental health and wellbeing)
– Veteran Employees Together
Local regions can set up ERG chapters
or sub-groups, and we were delighted
that this year saw employees setting up
our first ERGs in Latin America, the
Middle East and Africa. For example,
employees in Latin America set up a
sub-group of the Professional Women’s
network with over 130 members.
During the year, almost 3,000 employees
took part in equity, diversity and
inclusion events across Tate & Lyle,
including open, honest conversations
around International Women’s Day,
Juneteenth, Transgender Day of
Visibility, Black History Month, and
many more. We also grew our
community of ‘allies’, people who use
their influence to support those who
experience unequal treatment, training
more than 150 employees, including our
Executive Team, on how to be an ally.
Our ERGs also play a role in
communicating equity, diversity and
inclusion initiatives. For example, with
the support of our ERGs, we saw
excellent take-up of our ‘#EDIPledge’
on our internal social network, Yammer,
where people across the business
shared a personal pledge to play their
role in our equity, diversity and
inclusion journey. The pledge campaign
was launched in October 2021, and has
generated well over 300 pledges
including actions like sponsoring a
re-design of our recruitment process;
having courageous conversations;
learning about different perspectives;
speaking up against injustice; and
visibly advocating for under-
represented groups personally and
professionally.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 48
REVIEW OF THE YEAR
OUR PEOPLE CONTINUED
PROGRESS ON GENDER
DIVERSITY
– Target for gender parity in
leadership roles by 2025: 33%1
at 31 March 2022
– Women on our Board: 33% at
31 March 2022; 45% at date of
this report
– Women on our Executive
Committee: 44% at 31 March
2022; 56% at date of this report
– Women in senior management,
including statutory directors:
33% out of 98 people
1 In the 2023 financial year, we will be extending
this target to gender parity in all leadership and
management roles. This expands the number of
employees from around 60 to more than 500. At
1 April 2022, the number of women in leadership
and management roles was 42%.
UK GENDER PAY GAP
REPORTING
Although we are below the
legislative threshold for UK gender
pay reporting, we publish details
of our UK gender pay gap on our
website. Using the UK government’s
methodology, our median pay gap
has significantly improved. In April
2020 the gap was 3.2%; by April
2021 the gap had become -1.7% in
favour of women, primarily because
we have increased the number of
women in senior roles at our global
headquarters in London. This
increase was achieved both through
promotions and new hires.
OUR EMPLOYMENT
POLICY
Our policy is to employ the best
candidates for every position
regardless of age, disability,
marital or civil partnership status,
pregnancy or parental/care-giving
responsibilities, race, ethnic or
national origin, nationality, religion
or belief (including lack of belief),
social background, gender, gender
reassignment or sexual orientation.
– Culture: educate all to achieve the
competence and confidence needed to
create and sustain an inclusive culture
– Society: listen to, speak to and serve
society by promoting equity, diversity
and inclusion with our customers, our
communities and our supply chain.
We have set ambitious targets to help us
make progress against each of these
pillars over the next eight years (see page
49). And we’ve already started to take
action. In pursuit of these targets, we are
currently working to:
– Redesign our recruitment and
performance process to mitigate
for bias, diversify our talent pipeline
and produce more equitable retention
and advancement opportunities
– Pursue more inclusive and localised
benefits that better reflect the needs
of our people
– Increase the membership of our
Employee Resource Groups (ERGs)
(see case study on page 47), including
‘allies’, people who use their influence to
support those who experience unequal
treatment
– Better understand who is in our global
workforce and what their experiences
are of inclusion, equity and ‘allyship’,
mainly through our annual employee
survey and demographic data collection
– Modernise and scale up our learning
programmes around equity, diversity
and inclusion to build people’s
capabilities and confidence
– Formalise a supplier diversity
programme that meets the increasing
demands of our customers.
Government guidance on
parental leave differs
considerably by country and
many colleagues have told us
that, in some countries, the
time provided simply isn’t
enough. We sincerely hope our
new equal parental leave policy
will enable parents to spend
valuable bonding time with
their new child or children,
without having to worry about
financial and time constraints.
LAURA HAGAN Chief Human
Resources Officer
Tate & Lyle PLC Annual Report 2022
We’ve made good progress so far,
including:
– Almost 3,000 colleagues attended
equity, diversity and inclusion events
such as presentations by external
speakers and education sessions
– More than 300 employees made
personal pledges to advance equity,
diversity and inclusion inside and outside
the business
– Over 150 employees joined ‘ally’ training,
which helps people learn about equity,
diversity and inclusion, and take
personal ownership of our agenda
– We held employee events on subjects
such as World Mental Health Day,
National Coming Out Day and Domestic
Violence and Abuse Awareness
– In March 2022, Tate & Lyle was
recognised as a top 25 performer in the
McKenzie-Delis Review for Diversity and
Inclusion.
NEW EMPLOYMENT POLICIES
Another way we are delivering our
strategy, and a consequence of separating
into two companies, is the development of
our employment policies. With the support
of our ERGs, we’re reviewing all our
policies with an equity lens so we can be
sure that the new company we’re building
is based on inclusive foundations, and with
respect for every individual’s needs.
One policy we have already implemented
is our new Equal Parental Leave Policy.
This new policy provides employees across
the world with a minimum of 16 weeks
fully-paid parental leave, covering birth,
adoption, foster-to-adopt and surrogacy.
It applies to all parents and prospective
parents regardless of gender, marital
status and sexual orientation, and allows
employees to take parental leave any time
within the first 12 months of a child
entering the home.
EQUITY, DIVERSITY AND INCLUSION:
OUR STATEMENT OF INTENT
We believe in the power and potential
of diverse perspectives to unlock
innovation and to accelerate the
global growth of our business.
This is why we are committed to all
of our employees being seen, heard
and valued, and our teams reflecting
the local communities we serve.
As a global business founded on
expertise and creativity, we celebrate
how our unique differences generate
better ideas and deeper insights,
empowering us to lead the next food
revolution for and with our customers.
49
OUR TARGETS FOR EQUITY,
DIVERSITY AND INCLUSION
We have launched a set of clear goals and
targets with a baseline of 1 April 2022,
spanning our four equity, diversity and
inclusion pillars – systems, talent, culture
and society. These will enable us to
measure our progress and integrate
equity, diversity and inclusion further into
our culture and purpose.
SYSTEMS
Integrate equity, diversity and inclusion
into core organisational structures,
policies and practices, to promote
equitable advancement, retention
and reward.
2023
50 high potential employees from under-
represented groups will be sponsored for
advancement
CULTURE
Educate all to achieve the equity, diversity
and inclusion competence needed to create
and sustain an inclusive culture.
2022
10% of Employee Resource Group leaders’
paid time will be spent on ERG work
2025
In each region, we will achieve parity
between minority and majority groups in
attrition rates, and employee engagement
scores on equity, diversity and inclusion
2025
Employees, managers and leadership will
spend 10, 15 and 20 hours each respectively
on equity, diversity and inclusion training
TALENT
Ensure the diversity of our workforce
reflects the local communities we serve.
SOCIETY
2025
We’ll achieve gender parity in leadership
and management roles
2030
2030
Teams at all levels will be representative
of their local communities
2030
Listen to, speak to and serve society by
delivering progress on equity, diversity
and inclusion for and with our customers,
communities and suppliers.
Employees will have spent 50,000 hours
volunteering for projects aligned with our
purpose and our priority UN SDGs, with an
ambition to reach 20,000 hours by 2025
We will expand our spend with diverse
suppliers globally, with interim goals
achieved for North America supplier
diversity by 2027
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 50
REVIEW OF THE YEAR
OUR COMMUNITIES:
SUPPORTING OUR LOCAL
COMMUNITIES WITH
PURPOSE
OUR COMMUNITY PROGRAMME
We believe in building stronger, healthier
communities where we work and live.
For our employees, our commitment to
community involvement is fundamental
to who we are and is a key part of how we
live our purpose. This is brought to life by
our purpose pillar of building thriving
communities. Our community involvement
programme is focused on 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 access to nutritional meals to people
in need in our communities and beyond.
Education: We work with local schools,
education foundations and other
community partners to help prepare
students for healthier, brighter futures.
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
planning process, and we report progress
against our community purpose targets
on page 30.
FINDING CREATIVE WAYS
TO HELP DURING THE PANDEMIC
The global pandemic continued to cause
uncertainty and hardship in many of our
local communities. Demand for food banks
remained high, and so our continued
partnership with 25 food banks across the
world was as important as ever. During the
year, we provided 1.2 million nutritious
meals to people in need in our local
communities, making a total of 2.9 million
meals over the last two years.
Tate & Lyle PLC Annual Report 2022
The pandemic, with its lockdowns and
restrictions, continued to pose challenges
for some of our regular community
programmes, requiring our employees
to continue to come up with creative ways
to adapt. Our mentorship programmes in
Latin America, the UK and US, which went
virtual the previous year, stayed online this
year, and many of our school education
programmes were online too.
Gardening is great for physical and mental
health, as well as supplementing people’s
diets with freshly grown produce. During
the year, we launched new gardening
projects in many of our communities
across the world. A great example is our
partnership with Food & Trees for Africa,
which saw employees getting directly
involved in planting and tending the food
garden of a primary school close to our
facility in South Africa. We helped
community partners with similar projects
in Brazil, Mexico and Colombia.
As the financial year came to an end, we
saw a humanitarian crisis unfolding in
Ukraine and its neighbouring countries.
As well as making donations to the British
Red Cross Ukrainian Relief Fund, we also
supported charities in and around Łód´z,
Poland and Boleráz, Slovakia, where we
have an office and a plant respectively,
to provide food, clothes, shelter and
medicines for refugees arriving in both
regions. We also set up an employee
matching scheme, whereby donations
made by employees were doubled by the
Company, and the matched money given
to charities in Łód´z and Boleráz.
LOOKING AHEAD
The sale of a controlling stake in our
Primary Products business in North
America and Latin America means that
a number of our community projects in
those regions have moved to the new
business, Primient. We wish them well in
their future endeavours. For Tate & Lyle,
our community programme will continue
HOW WE INVEST IN OUR
COMMUNITIES
IN THE YEAR ENDED 31 MARCH 2022,
CASH COMMUNITY SPEND AND
CHARITABLE DONATIONS AMOUNTED TO
£548,000 (2021 — £752,000¹).
£548,000
AREAS OF FOCUS (%)
29
38
33
Education
Health
Hunger
1 In the year ended 31 March 2021 we made
one-off donations of US$200,000 to our food
bank partners to support our local
communities during the pandemic.
to be purpose-led, and focused around the
three areas of health, hunger and education.
We remain committed to delivering our
purpose targets for 2025 and will strive to
continue to make a positive contribution in
all the communities where we operate.
Our community programme is
all about collaboration, working
with local partners across the
world to make a positive and
lasting difference in our local
communities.
ROWAN ADAMS Executive Vice President,
Corporate Affairs
51
HIGHLIGHTS OF THE YEAR
GROWING FOOD WITH NUESTROS PEQUEÑOS HERMANOS
In January 2022 we launched a new partnership in Morales,
Mexico with Nuestros Pequeños Hermanos, a charity housing
over 650 orphaned, abandoned or otherwise vulnerable
children in the region. We are working with staff and children
at these homes to help them grow more fresh fruit and
vegetables for their meals, while also helping them learn
about food safety and nutrition.
Our partnership with Tate & Lyle not only helps us expand
greenhouse production, but also allows us the opportunity
for personal connection, knowledge exchange and
mentorship which is so important to the children and
volunteers who help bring our projects to life.
RAFAEL BERMÚDEZ GUTIÉRREZ National Director Mexico, Nuestros
Pequeños Hermanos
FASTFUTURES: HELPING TO GIVE YOUNG PEOPLE NEW SKILLS
We are a founding partner of FastFutures. This UK learning and
skills programme helps thousands of people aged 18-22 from
diverse and disadvantaged backgrounds into work. As part of the
programme, our UK employees mentor students virtually, and
our senior leadership team holds skills-building Q&A sessions.
The encouragement I received from my Tate & Lyle
mentor meant a great deal to me while applying for jobs.
VAIDA ARLAUSKAITÉ Participant in FastFutures programme
My experience with FastFutures proved invaluable and
exceeded my expectations.
CHIOMA ABAZIE Participant in FastFutures programme
HEALTHY EATING, HAPPY LEARNING IN CHINA
As part of our ‘Healthy Eating, Happy Learning’ child health
improvement programme in China, we partnered with the
China Foundation for Poverty Alleviation to provide more than
2,000 children in ten schools in underdeveloped areas of the
country with a nutritious daily meal. We also upgraded the
kitchen and canteen facilities at the schools and worked with
local authorities to provide nutrition education for students
and teachers.
Investing in children’s nutrition and health is one of
the fundamental ways to tackle the intergenerational
transmission of poverty. We greatly appreciate
Tate & Lyle’s focus on the nutritional status of children
in China and their trust in the Foundation.
ZHENG WENKAI Chairman of China Foundation for Poverty
Alleviation
GETTING CHILDREN READY TO LEARN IN ILLINOIS, US
We are a long-term supporter of the Enders-Salk Elementary
School free breakfast programme. Our partnership with the
school, which is based in Hoffman Estates, Illinois, US, is part of
District 54 Education Foundation’s Food 4 Thought programme.
Through this, we have provided over 50,000 nutritious breakfasts
for students at the school to help them start the day ready to
learn. The local Tate & Lyle team also provides mentorship and
connection through nutrition education sessions, support in
planting and harvesting in the school garden, and sharing
careers advice.
Tate & Lyle has been a longstanding supportive partner in
ensuring that District 54 students begin their day ready to
learn. Throughout the pandemic, when many families and
communities were struggling and having to cut back,
Tate & Lyle stayed true to their commitment of ensuring
access to meals for our students.
MEAGAN KASPER Community Relations Administrative Assistant at
School District 54
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 52
REVIEW OF THE YEAR
REVIEW OF THE YEAR
ENVIRONMENT, HEALTH AND SAFETY:
MAINTAINING MOMENTUM IN A
TRANSFORMATIONAL YEAR
CONTINUING TO MANAGE
THROUGH THE PANDEMIC
BENEFITS AND CHALLENGES
FOR J2EE
When the pandemic started in 2020, we
established local response teams who
were empowered to make decisions on the
ground, depending on local circumstances,
under the overall guidance of our Global
Pandemic Response Team. In this second
year of the pandemic, our site leaders
continued to rise to the challenge, dealing
with new issues that arose, not least
the toll on people’s mental health from
the ongoing state of uncertainty, and
increasing levels of frustration. With the
pandemic an ongoing daily reality, our
people’s resilience and commitment to
help each other this year was all the more
commendable.
We were really helped in our management
of Covid-19 by the global, standardised
structure of our Journey to Environment,
Health and Safety (EHS) Excellence (J2EE)
programme, which has been in place since
January 2018. In 2020, we adapted this
programme to integrate food safety and
product quality processes, and the work
we do on site security. The programme is
designed to involve everyone within
Tate & Lyle in strengthening our EHS
culture and performance, and this paid off
during the pandemic. Our cloud-based
reporting tool, Gensuite, was important
here, since we were able to adapt it quickly
to record infections, quarantines and
vaccinations, meaning we had data early
on. And because our people were already
used to sharing ideas and reporting
concerns through Gensuite, it was natural
to use it for managing Covid-19 issues
as well.
In practical terms, J2EE 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. We were really pleased with the
ongoing progress despite the pandemic
– by the end of March 2022, two sites had
passed tollgate 1, six sites tollgate 2, eight
sites tollgate 3, 16 sites tollgate 4 and two
sites tollgate 5. And we were particularly
proud that our McIntosh, Alabama, US site
was the first to pass tollgate 6. We also
encourage employees to tell us about any
EHS concerns they may have, no matter
how large or small. This year, they raised
5,720 concerns, and we were pleased that
75% were addressed within our target of
30 days, up from 73% in 2021.
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 regulation
– To minimise our environmental
footprint
Covid-19 continued to
challenge us this year,
requiring huge efforts
from our people to
continue to run our
plants safely and
efficiently, and keep
our customers served.
This was another year of progress, despite
many challenges such as the global
pandemic, supply chain disruption and
high customer demand. While keeping
customers front of mind, we didn’t forget
our focus on the everyday, ongoing safety
of our people and processes, and our
longer-term goals for environmental
sustainability. We are pleased with the
progress we made on our environmental
targets and commitments, particularly
exiting coal in our operations four years
ahead of schedule; and that we continued
to do well on process safety, thanks to the
team’s efforts around combustible dust
and chemical management.
TOTAL AND CONTINUING OPERATIONS
Following the transaction to sell the
controlling stake in Primient which
was first announced in July 2021,
Primient was classified as a
discontinued operation under IFRS 5.
The remaining businesses of the
Group comprising: Food & Beverage
Solutions (into which the European
Primary Products business, which is
not part of the transaction, and some
stranded costs have been combined);
Sucralose; and Central costs are
reported as continuing operations.
Total operations are continuing and
discontinued operations combined.
Tate & Lyle PLC Annual Report 2022
53
Nonetheless, Covid-19 brought some
challenges for the programme, because
ultimately good performance is about
culture, which is much easier to maintain
when people are together face-to-face.
Not only could we not send out our global
engineers to sites, but the sites themselves
had to operate with fewer people at a time,
and in more socially-distanced ways.
However, with travel increasingly back
on the agenda, and more people allowed
on-site, we expect progress to pick up
again in the coming year.
A STRONG FOUNDATION FOR
THE FUTURE
Talking of the coming year, J2EE was a
strong basis for the launch of Primient
as a standalone company, and it remains
central to both Tate & Lyle and Primient.
Over the years we’ve operated the
programme, we have adapted and
expanded it with experience and ideas
from people across the business, while
always holding on to its key principles.
This makes it an excellent tool for
integrating new plants and sites, as we’ve
seen with our acquisitions in the last two
years. Our commitment to J2EE, and to
meeting our 2030 environmental targets,
remains stronger than ever.
It’s hugely exciting to be part of
a company that truly aligns how
we make our products with our
purpose. Our EHS ambitions
are no less ambitious than our
plans for growth.
JAN-JAAP VAN DER BIJ Senior Vice President,
Global Environment, Health, Safety, Quality
and Security
EHS GOVERNANCE, SYSTEMS AND REPORTING
Before the pandemic, senior executives
would visit sites to meet employees and
contractors to discuss EHS and identify key
issues. Such first-hand insight helps us
review and improve our EHS practices and
address any specific concerns employees
may have. During Covid-19, when travel
was impossible, we replaced these site
visits with special virtual cafés for our
operations team, led by Nick Hampton, our
Chief Executive, and Melissa Law, our
President, Global Operations. As things
have started to open up, we are resuming
senior executive site visits, where Covid-19
restrictions allow.
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. We
report EHS data by calendar year.
ASSURANCE
AECOM has independently verified
selected environmental data from pages
56 to 61. Their limited assurance statement
is at www.tateandlyle.com/purpose/
caring-for-our-planet.
GOVERNANCE
Our EHS Advisory Board oversees
J2EE and reviews performance. It
meets quarterly and is made up of
senior executives, including the
Chief Executive. The Board of Directors
receives updates on EHS performance
at every meeting, and a more detailed
review of progress at least twice
a year. The governance process
for overseeing environmental
performance can be found on pages 63
and 64, as part of our report against
the recommendations of the Task
Force on Climate-related Financial
Disclosures.
SYSTEMS
J2EE is supported by a global EHSQ
management system (Q representing
quality), aligned with the requirements
of international standards for the
environment, occupational health and
safety, and risk management (ISO
14001 and ISO 45001). This feeds into
our global Environment, Health, Safety,
Quality and Security policy (available
on www.tateandlyle.com), which sets
out a number of principles designed to
keep our people safe, along with a
consistent set of requirements and
expected results.
We encourage all employees to share
their ideas and report concerns via our
cloud-based tool, Gensuite, which
enables us to manage EHS data –
including Covid-19 reporting –
efficiently and consistently. 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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 54
REVIEW OF THE YEAR
REVIEW OF THE YEAR
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
HEALTH AND SAFETY
The safety and wellbeing of our people –
all those who work at our sites – is our
primary concern. Our approach is built
on the idea of shared responsibility: we
all have a part to play in safeguarding
ourselves and those around us. 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
Our approach means more than just
following the rules, however; it’s about
having a mindset that keeps us aware of,
and allows us to eliminate or control, the
risks we face every day. Key to that is
openness – the desire by everyone to
challenge each other, without judgement,
to understand why accidents happen. It’s at
the heart of every good safety programme.
KEEPING GOING IN A CHALLENGING YEAR
Our principles, and the need for people to
take personal responsibility, became even
more important during the pandemic,
when, first and foremost, our priority was
to keep people safe and well. This second
year of the pandemic has been very
challenging for our people, not least for
their mental health and wellbeing, as
discussed in the ‘our people’ section on
page 45. Here we discuss health and safety
in terms of the safety work at our sites
covered by our J2EE.
With more people on site and more hours
worked than last year, it’s no surprise that
our lagging safety indicators worsened
during the year1. The increase in both
our recordable injury rate (15%) and our
lost-time rate (25%) resulted from minor
incidents, albeit a larger number.
A contributing factor was the addition
of our new tapioca and stevia operations,
acquired in Thailand and China, respectively.
Together these accounted for nearly 10%
(five) of our recordable injuries, and 14%
(five) of our combined lost-work and
restricted work cases. Without these, the
number of incidents would have been on a
par with our 2019 safety results.
In the coming year, we will be focusing
particularly on the sites where we’ve seen
a high number of safety incidents, and
continuing to support colleagues in our
new sites to embrace the principles of
our J2EE.
Some of our sites did exceptionally well
in every respect, from managing their
Covid-19 response to improving their
record on lagging indicators.
MAINTAINING OUR COVID-19 RESPONSE
2021 was very much about continuing to
live with Covid-19 and remaining in a
heightened state of alert so we could be
responsive as countries and regions went
in and out of lockdown, and vaccines were
rolled out. In this continued state of
uncertainty, it was a real challenge for
our people not to lose focus. Our use of
J2EE to help manage the response to the
pandemic, and the protocols we had
brought in during the previous year, served
us well. But even more important was the
response of our local leaders, who
continued to take responsibility for the
local response under the overall guidance
of our Global Pandemic Response team,
led by our Senior Vice President, Global
Environment, Health, Safety, Quality and
Security (EHSQS). Working out how to staff
and operate a manufacturing plant 24/7
while avoiding spreading infection is no
small task, and we’re really proud of our
people for succeeding in keeping all our
manufacturing sites operational
throughout the year.
The pandemic is far from over and, despite
the world beginning to open up, infection
rates continue to rise in some countries.
We saw double the number of our people
contracting Covid-19 during the year,
although most, thankfully, were not
seriously ill, helped by high vaccination
rates at most sites. Despite this, in the
summer of 2021, three colleagues in
the US very sadly passed away from
complications due to Covid-19, contracted
away from our premises. Prior to that, a
cleaning contractor at our facility in Mexico
City also passed away from Covid-19
complications, again caught away from our
premises. Covid safety protocols remain in
place wherever necessary, so that the
workplace is as safe as it can be for all.
COVID-19 STATISTICS
Two years ended 31 March 2022
– 1,562 (35%) of our workforce
(employees and contractors)
tested positive
– 3,268 (73%) of our workforce were
quarantined, either from testing
positive, waiting for test results,
returning from holiday in a
high-risk area, or from potential
infection from direct contact with
somebody else testing positive
– Three colleagues and one
contractor passed away, having
contracted Covid-19 away from
our premises.
RESPONDING TO POTENTIALLY SEVERE EVENTS
When major, severe, or potentially severe
events (PSE) 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?
Any resulting actions are tracked to
completion by our Global Incident
Investigation Process Manager. The IRB
considered 12 PSEs during the year with
meetings held virtually due to the
pandemic. The PSE events themselves
were all different; for example, two
involved falls, while two involved
equipment malfunction. In all cases, no
one suffered any long-lasting injuries but
we considered them PSEs because the
injuries could have been more serious.
The IRB’s findings and follow-up action
plans were shared with all our plants to
ensure everyone learnt the lessons.
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.
Tate & Lyle PLC Annual Report 2022
55
INVESTING IN NEW SAFETY TECHNOLOGY
As last year, despite the restrictions of
the pandemic, we continued to deliver our
maintenance and continuous improvement
programmes. In summer 2021, we
completed our US$22 million investment
in demolishing old, potentially unsafe
structures at our sites. We also completed
the combustible dust safety assessments
required by regulation, which have had a
positive impact on reducing potentially
unsafe incidents involving dust. An exciting
new step was beginning to use drones to
conduct the regular inspections of our
chemical storage tanks, which we tested at
Houlton, Maine, US. There are so many
benefits to using drones in these situations
– it’s safer, since people don’t have to go
inside the tanks, and it’s also faster.
We’ll be continuing to look at ways
technology can improve our safety
response in the coming year. But as
always, our main focus will be cultural,
because ultimately safety is about the
individual actions taken by every one of
us, every day. As we begin to put the
pandemic behind us and re-establish ways
of working on site, we will be investing
significant time and energy in face-to-face
safety briefings, safety committee
meetings and training. And most
importantly, as we accelerate our plans for
growth, we will keep safety front of mind
as we bring new people and integrate new
sites into Tate & Lyle.
OUR TEN LIFE-SAVING PRINCIPLES
For high-risk operations, as part
of our J2EE, we developed ten
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 2021
LEADING INDICATOR — PSES
12
(2020: 9)
Potentially severe events (PSEs) are events or incidents which could have had
major or severe consequences.
RECORDABLE INCIDENT RATE1
LOST-TIME RATE2
2021
2020
2019
2021
2020
2019
0.77
0.81
0.78
0.58
0.67
0.97
0.73
0.91
0.78
0.52
0.43
0.50
0.39
0.42
0.40
0.45
0.34
0.42
Employees
Contractors
Combined
Employees
Contractors
Combined
1 Number of injuries requiring treatment beyond
2 Number of injuries that resulted in lost-work days
first aid per 200,000 hours.
per 200,000 hours.
NUMBER OF INCIDENTS COMBINED
NUMBER OF LOST-WORK AND RESTRICTED
WORK CASES COMBINED
54
(2020: 42)
NATURE OF ACCIDENTS (%)
2 2
4
4
6
6
9
11
13
25
18
35
(2020: 25)
Struck by or against (14)
Contact with sharp object (10)
Slip, trip or fall (7)
Caught in, under, on or between (6)
Body position or posture – bend, lean or twist (5)
Contact with a chemical or other substance (3)
Lowering, lifting or carrying (3)
Burn (2)
Stepped on an object (2)
Bitten or stung (1)
Forceful exertion, pushing or pulling (1)
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 56
REVIEW OF THE YEAR
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
ENVIRONMENT
With the UN’s COP26 conference taking
place in the UK in November 2021,
discussions about climate change and
the urgency of transitioning to a low-
carbon economy have been high on the
political and corporate agenda in
the past year. This is reflected in the
increasing expectations of companies to
establish a pathway to net zero carbon
emissions, and the new regulatory
requirement in the UK to report against the
Task Force on Climate-related Financial
Disclosures (TCFD). For Tate & Lyle, this
focus on the environment brings both risks
and opportunities: nearly everything we
make begins life in the natural world,
whether it’s a kernel of corn, a grain of
tapioca 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.
Our purpose commitments include
ambitious targets for 2030, covering the
four main areas of our environmental
footprint: climate and carbon emissions;
using waste beneficially; using less water;
and supporting sustainable agriculture.
This is our second year of reporting against
these targets. We also made a commitment
to eliminate the use of coal in all our
operations by 2025, and we were pleased
to deliver on this commitment in October
2021, four years ahead of schedule.
OUR 2030 COMMITMENTS AND TARGETS
EXPLAINED
When we developed our targets in 2020,
we looked at where we wanted to be in
2030 and beyond, and worked back to see
what that would mean for what we must
achieve by 2025 and then 2030. To make
our greenhouse gas (GHG) emissions
reduction targets more tangible, they are
based on absolute rather than intensity
reduction, and have been approved as
science-based by the Science Based
Targets initiative (SBTi), in line with
the goals of the Paris Agreement on
Climate Change.
Our commitment to promoting sustainable
agriculture is fundamental to our overall
ability to meet our targets, because of the
significant proportion of our environmental
impact that comes from our agricultural
raw materials. At the time of setting our
targets, corn represented by far the
largest proportion of that footprint, which
is why we committed to ensuring that
we support sustainable farming of the
equivalent corn volume that we buy each
year – 1.4 million acres over the last year.
We were proud that, in making this
commitment, we were the first corn wet
miller in the industry to do so.
Tate & Lyle PLC Annual Report 2022
COMMITMENT TO OUR 2030 TARGETS
An important part of planning the
successful separation of the Tate & Lyle
and Primient businesses at the end of the
2022 financial year was to consider how
this affected our environmental targets for
2030. This resulted in us recalculating the
2019 baseline for each of our environmental
targets on the basis of Tate & Lyle’s new
operational footprint. We knew that the
separation would make a significant
difference to our 2019 baselines, given that
three of our four large US corn wet mills,
which represented a large portion of our
carbon emissions, waste and water use,
would become part of Primient. Having
recalculated the 2019 baseline for each
target, we then worked out new pathways
for Tate & Lyle to deliver them. Despite the
material change in Tate & Lyle’s operational
footprint, we remain committed to
achieving our existing carbon emissions,
waste and water targets for 2030.
However, our interim ambition of a 20%
reduction in Scope 1 and 2 GHG emissions
by 2025 is no longer practical, given that
most of our major capital projects since
2020 to reduce emissions were in plants
that are now part of Primient. We are
nonetheless still committed to our
2030 target.
In addition to our existing targets, we are
setting a new target that, by 2030, we will
purchase renewable energy to supply
100% of our electricity consumption,
thereby eliminating our Scope 2 GHG
emissions. We will report on our progress
on this new target next year.
We are also looking at expanding our
sustainable agriculture commitment
beyond corn, given that the mix of our
agricultural raw materials has changed
following the business separation.
We provide details of the impact of the
business separation on our 2019 baselines
in the relevant sections below, along
with performance against our targets
for total operations and restated for our
continuing operations.
BUILDING A PATHWAY TO CARBON NET ZERO
During the year, we analysed in detail what
a carbon net zero pathway by 2050 would
look like for Tate & Lyle for our Scope 1, 2
and 3 GHG emissions. On the basis of this
work and the pathways we have identified,
we have committed to being carbon net
zero by 2050. See more details on pages
58 and 59.
ENHANCING THE ‘E’ IN J2EE
We continue to focus on encouraging our
people’s commitment to environmental
improvements and efficiency. The world’s
focus on the urgency of climate change is
helping, making it easier to develop the
level of commitment to the environmental
aspects of our J2EE programme that our
CARING FOR OUR
PLANET TARGETS
AND COMMITMENTS
CARBON FOOTPRINT
– By 2030, we’ll have delivered a
30% absolute reduction in our
Scope 1 and 2 greenhouse gas
emissions.
– 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 intensity by 15%.
SUSTAINABLE AGRICULTURE
– We’ll maintain sustainable
acreage equivalent to the volume
of corn we buy globally each year,
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
people have long held for the safety
aspects. We saw increasing levels of
engagement this year as each of our sites
worked to meet its own annual carbon
emissions, water and waste targets as part
of J2EE. In the coming year, we will focus
even more on raising awareness of the
importance of good environmental
practices at our sites, and therefore
embedding the ‘E’ of J2EE even further
across our business.
57
CLIMATE AND CARBON EMISSIONS
OVERVIEW
In 2020 we set ambitious science-based
absolute targets for reducing our
greenhouse gas (GHG) emissions by 2030
– 30% for Scope 1 and 2, and 15% for
Scope 3. We also committed to eliminate
coal from all our operations by 2025. We
made good progress against these targets
during the year, delivering a 12% reduction
in Scope 1 and 2 emissions and a 1%
reduction in Scope 3 emissions, both
against our 2019 baseline in total
operations. In October 2021, we also
delivered on our commitment to eliminate
coal from all our operations, four years
ahead of schedule.
2021 PERFORMANCE
Scope 1 and 2 emissions
The 12% reduction we saw in our Scope 1
and 2 emissions in total operations came
principally from switching from coal to
natural gas-fired boilers at the Decatur,
Illinois and Lafayette, Indiana plants in
the US, completing the transition out
of coal. It was also helped by the
Loudon, Tennessee, US plant using
more renewable energy from the grid.
By comparison, the result for continuing
operations this year was a 4% reduction
against our 2019 baseline. This is because
our capital investment projects over the
last two years to reduce GHG emissions
have focused on what were, at the time,
our largest plants (now part of Primient).
The improvements at our continuing
operations were achieved by energy
efficiency projects, particularly at our
McIntosh, Alabama, US plant.
Scope 3 emissions
We achieved a 1% reduction in Scope 3
emissions, mainly from our sustainable
agriculture programmes focused on corn
and stevia. By comparison, in continuing
operations (the new Tate & Lyle), we
achieved a 5% reduction in Scope 3
emissions, mainly due to capital investments
to reduce GHG emissions over the last two
years at plants which are now part of
Primient. Following the recalculation of
our 2019 baseline, the benefits of these
capital investments in Primient’s plants
are now included in our Scope 3 emissions
under the investments category.
ESTABLISHING NEW 2019 BASELINES
Given the separation of the Group
into two standalone businesses –
Tate & Lyle and Primient – we carried
out an exercise to recalculate the 2019
baseline for the carbon footprint of both
businesses. Before the separation, 28%
of Tate & Lyle’s total carbon footprint
came from Scope 1 and 2 emissions
(energy used in or purchased for our
sites), with 72% from Scope 3 emissions
(indirect emissions from across
our value chain). As a result of the
separation, Tate & Lyle’s 2019 baseline
has changed materially, with only 13%
now coming from Scope 1 and 2
emissions and 87% from Scope 3
emissions. The absolute amount of
Scope 1 and 2 emissions has also
decreased significantly, since three
of the four large corn wet mills in the
US which Tate & Lyle used to operate
(Decatur, Lafayette and Loudon) have
moved into Primient. The Scope 1 and 2
emissions for the products made by
Primient for Tate & Lyle at those three
large corn wet mills have now moved
into Tate & Lyle’s Scope 3 emissions,
within the purchased goods and
services category.
The mix of Scope 3 emissions in the
2019 baseline has also changed
following the separation. Purchased
goods and services remains the
largest category at 44%, with
Tate & Lyle’s 49.9% equity holding in
Primient being incorporated in the
investments category.
CARBON FOOTPRINT FOR 2019 BASELINE
TATE & LYLE BEFORE BUSINESS
SEPARATION ON 1 APRIL 2022 (%)
TATE & LYLE AFTER BUSINESS
SEPARATION ON 1 APRIL 2022 (%)
21
7
72
Tonnes CO2e
Scope 1 – 1,849,530
Scope 2 – 607,070
Scope 3 – 6,312,394
9
4
87
Tonnes CO2e
Scope 1 – 379,479
Scope 2 – 165,387
Scope 3 – 3,731,789
SCOPE 3 BREAKDOWN FOR 2019 BASELINE
TATE & LYLE BEFORE BUSINESS
SEPARATION ON 1 APRIL 2022 (%)
TATE & LYLE AFTER BUSINESS
SEPARATION ON 1 APRIL 2022 (%)
23
7
7
40
41
2 2
4
22
26
44
Purchased goods and services
Processing of sold products
Downstream transportation and distribution
Other Scope 3
Investments
Upstream transportation and distribution
Purchased goods and services
Investments
Processing of sold products
Downstream transportation and distribution
Upstream transportation and distribution
Other Scope 3
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 58
REVIEW OF THE YEAR
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
PROGRESS AGAINST 2030 TARGETS
SCOPE 1 AND 2 GHG EMISSIONS
By 2030, we’ll have delivered a 30%
absolute reduction in our Scope 1
and 2 greenhouse gas emissions1.
SCOPE 3 GHG EMISSIONS
By 2030, we’ll have delivered a 15%
absolute reduction in our Scope 3
greenhouse gas emissions1.
TOTAL OPERATIONS
TOTAL OPERATIONS
2019
0%
2021
12%
2030
target
30%
2021
1%
2019
0%
CONTINUING OPERATIONS
CONTINUING OPERATIONS
2021
2019
0% 4%
2030
target
30%
2021
5%
2019
0%
2030
target
30%
2030
target
30%
1 Approved as science-based by the Science Based Targets initiative, meaning they are in line with the goals of the
Paris Agreement on Climate Change.
PATHWAY TO CARBON NET ZERO BY 2050
SCOPE 1 AND 2 GHG EMISSIONS
(Tonnes of CO2e)
544,866
SCOPE 3 GHG EMISSIONS
(Tonnes of CO2e)
3,731,789
3,172,021
381,406
30%
reduction
15%
reduction
2019
2030
2050
2019
2030
2050
net zero
net zero
We expect to deliver this by a combination of:
We expect to deliver this by a combination of:
– Electrifying our production facilities
– Further use of co-generation boilers
– More use of renewable energy
– Benefitting from the development of new
technologies such as green hydrogen
– Sustainable agriculture programmes
– Customers and suppliers meeting their
carbon reduction targets
– Decarbonisation of logistics and
transportation supply chain
CLIMATE AND CARBON EMISSIONS CONTINUED
CLEANER AIR CONTINUED
Pathway to carbon net zero by 2050
During the year, we analysed in detail what
a carbon net zero pathway by 2050 would
look like for our Scope 1, 2 and 3 GHG
emissions. As part of this work, we
carried out Scope 1 and 2 decarbonisation
assessments at Tate & Lyle’s four largest
production facilities (after business
separation), which together generate the
vast majority of these emissions. We then
looked at the impact on our Scope 1, 2
and 3 footprint of changes in policies by
governments or other organisations,
and decarbonisation commitments in
our value chain including our customers.
We also considered other issues outside
our control which would affect our
decarbonisation plans, such as the
decarbonisation of electricity from the grid
and the electrification of different types
of transport such as trucks and trains.
Our decarbonisation assessments showed
that we could potentially achieve carbon
net zero by 2050 in terms of Scope 1 and 2
GHG emissions through a combination of
electrifying our production facilities,
further use of co-generation boilers,
purchasing more energy from renewable
sources and benefitting from the
development of new technologies such as
green hydrogen.
The capital investments required to meet
our existing target of a 30% reduction in
Scope 1 and 2 GHG emissions by 2030 are
expected to be within, not additional to,
our normal annual capital expenditure
programme. Beyond 2030, we expect our
Scope 1 trajectory will evolve as new
technologies develop. For example, green
hydrogen (hydrogen from a low-/zero-
carbon energy source) could play a role,
particularly to replace the use of natural
gas, although the timeframe over which
green hydrogen at scale becomes
accessible and economically viable is
still uncertain. The capital investments
required to deliver net zero Scope 1 GHG
emissions after 2030 will depend on the
speed of development, and cost, of these
technologies. In that context, it is not yet
feasible to put meaningful costs against
our net zero plan beyond 2030, although
we will do so as soon as it is practical.
Tate & Lyle PLC Annual Report 2022
59
Overall, and based on our current
operational footprint, we have identified
a pathway to reduce our total carbon
footprint (Scopes 1, 2 and 3 GHG emissions)
by around two thirds by 2050 from our
2019 baseline. The emissions making up
the remaining third, where we are still
working on identifying a pathway, are
nearly all in Scope 3, mostly from
agriculture. That is why sustainable
agriculture is so important, and
partnerships to advance it will continue to
be so in the years ahead. On the basis of
this work, we have committed to reaching
carbon net zero by 2050. Advances in
technology, changes in policy and many
other factors will no doubt mean that our
decarbonisation trajectory will change as
we move towards 2050. However, what
won’t change is our determination to
deliver on our targets by 2030, and to meet
our net zero commitment by 2050.
ENERGY USE1,8
Gigajoules
TOTAL OPERATIONS
20212
20203
20194
CONTINUING OPERATIONS
20215
20206
20197
34,454,491
34,191,556
35,051,415
8,811,223
8,754,051
8,887,720
CARBON FOOTPRINT FOR THE YEAR ENDED
31 DECEMBER 20211,8
(Tonnes of CO2e)
TOTAL OPERATIONS
SCOPE
2021
2020
2019
Scope 1 (direct emissions from our sites)
1,688,514
1,729,703
1,849,530
Scope 2 (indirect emissions from the energy
we buy)
Scope 3 (all other emissions associated with
our activities)
Total
466,234
544,791
607,070
6,258,589
6,233,158
6,312,394
8,413,337
8,507,652
8,768,994
SCOPE 3 BREAKDOWN
COMPONENTS OF SCOPE 3 EMISSIONS
FOR TOTAL OPERATIONS
Use of ingredients
Goods and services
All other Scope 3
Downstream transportation and distribution
Investments
Upstream transportation and distribution
Total
CONTINUING OPERATIONS
2021
2,550,528
2,505,515
470,499
415,299
190,000
126,748
6,258,589
SCOPE
2021
2020
2019
Scope 1 (direct emissions from our sites)
363,022
366,190
379,479
Scope 2 (indirect emissions from the energy
we buy)
Scope 3 (all other emissions associated with
our activities)
Total
157,565
162,587
165,387
3,544,563
3,599,661
3,731,789
4,065,150
4,128,438
4,276,655
SCOPE 3 BREAKDOWN
COMPONENTS OF SCOPE 3 EMISSIONS
FOR CONTINUING OPERATIONS
Goods and services
Use of ingredients
Investments
Downstream transportation and distribution
All other Scope 3
Upstream transportation and distribution
Total
1 Our London Head Office is usually excluded from
the energy use and carbon footprint figures because
its environmental impact is negligible but we have
included it here together with our Mold, UK facility
to meet the UK’s Streamlined Energy and Carbon
Reporting (SECR) requirements.
2021
1,624,374
822,941
781,363
134,036
110,000
71,849
3,544,563
2 UK use represents 0.007%
3 UK use represents 0.008%
4 UK emissions represent 0.007%
5 UK emissions represent 0.029%
6 UK emissions represent 0.030%
7 UK emissions represent 0.028%
8 Restated to reflect the acquisition of Sweet Green
Fields in 2020.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 60
REVIEW OF THE YEAR
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
USING WASTE BENEFICIALLY
Most of our waste is organic matter that
comes from our manufacturing processes.
Before our separation into two companies,
the largest contributors to our waste were
our four large corn wet mills in the US and
our two citric acid plants, one in the US and
one in Brazil. In most cases, this organic
waste can be beneficially used, for
example as nutrients for local farms, or to
generate energy. This allows us to improve
not only our own environmental impact,
but that of the communities around us too.
2025 AMBITION ALREADY MET
On the way to 100% beneficial use by 2030,
we set an ambition to reach 75% of our
waste being beneficially used by 2025.
We are delighted to have exceeded that
target four years early, with 83% of our
waste from our total operations beneficially
used in the 2021 calendar year. What’s
even more exciting is that, for our
continuing operations, the result was 91%.
The main way we manage the organic
waste we generate at our large corn wet
mills is working with the right local partner
who can help us find environmentally
responsible solutions. This year, we
continued to focus on the major waste
streams for which we still needed to find
beneficial uses: the waste feed and filter
aid from our largest plant in Decatur,
Illinois, US (now part of Primient), and
wastewater sludge from our Sagamore,
Indiana, US plant. In doing so, we worked
to expand our relationships with local
partners and identify new opportunities to
beneficially use our main waste streams –
primarily through land application,
renewable energy generation, animal
nutrition and composting. At Sagamore,
for example, we continued to work with
local companies to collect and distribute
our organic waste for use in local farms.
PROMOTING A ‘WASTE MINDSET’
As of today, our three remaining corn
wet mills in the US, Slovakia and the
Netherlands, generate the bulk of our
waste. Nonetheless, all our sites, no
matter what their size, have a role to play
in achieving our target. Each site has an
annual target for the beneficial use of
waste. Some already beneficially use
nearly all the waste they generate, while
many have taken other small actions to
improve their environmental performance.
Key to this is engaging employees –
encouraging them to keep waste front of
mind in their day-to-day work, and to come
up with ideas for improving their own sites.
PROGRESS AGAINST
2030 TARGET
By 2030, 100% of our waste will be
beneficially used, with an ambition
to reach 75% by 2025.
TOTAL OPERATIONS1
2019
62%
2021
83%
2030
target
100%
CONTINUING OPERATIONS1
2019
65%
2021
91%
2030
target
100%
1 Restated to reflect the acquisition of Sweet Green
Fields in 2020.
Organic waste from
our plants is used as
nutrients for local
farms in the US
Tate & Lyle PLC Annual Report 2022
USING LESS WATER
Our manufacturing operations, corn wet
milling especially, use water-intensive
processes, 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.
Considering the quantity of water we use,
our target to reduce water use intensity by
15% is perhaps the most challenging of our
2030 environmental targets. When we set
the target, we began a programme of
water studies at our largest sites to
determine the investments needed to
reach it, and to identify the main ways we
consume water and the equipment that
could increase our water efficiency.
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. Last
year, we began testing a mobile water
filtration device, devised by our innovation
team, to pilot recycling techniques on
different production streams. From this
work, and larger scale filtration testing,
we assessed the capital projects that
would be necessary to meet the target.
STEADY PROGRESS TOWARDS OUR TARGET
This year, we began implementing water
reduction projects at some of our plants in
the US, and were pleased to see the results
starting to come through in terms of
reducing our overall use of water. However,
because production volumes in total
operations were lower this year, our water
intensity figure actually increased by 3%.
WATER USE
Cubic metres per tonne of production
TOTAL OPERATIONS1
2021
2020
2019
CONTINUING OPERATIONS1
2021
2020
2019
5.03
4.87
4.88
5.45
5.63
5.62
1 Restated to reflect the acquisition of Sweet Green
Fields in 2020.
61
PROGRESS AGAINST
2030 TARGET
By 2030, we’ll have reduced
water use intensity by 15%.
TOTAL OPERATIONS
2021
+3%
2019
0%
CONTINUING OPERATIONS
2021
3%
2019
0%
2030
target
15%
2030
target
15%
The picture is a little different for our
continuing operations. Although our
absolute water use increased, because
production volumes were higher overall
at these plants, we succeeded in reducing
our water intensity by 3% compared
with 2020. Looking ahead, the capital
investment plans we had in place which
would have seen us reach our target by
2030 were largely focused on plants that
are now part of Primient. So our focus
this year will be to determine the capital
projects we need to invest in at our
continuing operations to achieve our
target. We will also focus on increasing
water efficiency and reducing water waste.
We already have a project underway at our
Sagamore, Indiana, US site, which is now
our biggest user of water, and we are
looking into new projects for our other
large sites. However, as our Sycamore,
Illinois, US site has shown, we can achieve
a tremendous amount simply by being
aware of how we use water. The team
there achieved a 9% absolute reduction in
water use in just one year from improving
the efficiency of their operations. In the
coming year, we’ll be taking the lessons
from Sycamore and sharing them across
Tate & Lyle, as well as focusing on the
major projects needed to reach our target.
Projects are underway
at our plant in Sagamore,
Indiana, US to reduce
water use
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 62
ENVIRONMENT, HEALTH AND SAFETY CONTINUED
EVOLVING OUR FOCUS
Following our separation into two
standalone businesses – Tate & Lyle and
Primient – our new agricultural footprint
is far less focused on corn. Other raw
materials, especially stevia, have
increased in relevance. So last year, we
launched a sustainable agricultural
programme for stevia and are expanding it
further this year (see below).
Maintaining our commitment to corn
We remain committed to maintaining
sustainable acreage equivalent to the
volume of corn we buy for our plants,
now some 437,000 acres. Primient
now manages corn procurement for
our remaining corn wet mill in the US,
Sagamore, Indiana. The corn for
Sagamore and the corn-based
ingredients we now buy from Primient
are all enrolled in the Truterra
programme. Our two corn wet mills in
Europe – Koog, the Netherlands and
Boleráz, Slovakia – are also still enrolled
in the Truterra programme. However
for the future, we are looking into
a local solution, working with our
suppliers in those countries to procure
sustainable corn.
Increasing our focus on stevia
Following our acquisition of the stevia
business, Sweet Green Fields, in
November 2020, we launched a pilot stevia
grower outreach programme in China
in partnership with Earthwatch Europe
and support from Nanjing Agricultural
University. The programme’s focus is to
help stevia growers minimise their
environmental impact and gain greater
economic benefit from the farming of this
leaf which is used to produce a low-calorie
sweetener. We launched the programme
with a small number of growers in
Stevia farmers in
Dongtai, Eastern China.
PROGRESS AGAINST
2030 TARGET
Acres of sustainable corn
maintained, equivalent to the volume
of corn we buy globally each year.
TOTAL OPERATIONS
1.4m
acres
Dongtai in Jiangsu Province, focusing on
the use of fertilisers and helping them
understand soil health through regular,
straightforward testing. In its first full year,
we saw promising reductions in all of the
nine impact categories measured against
the 2019 baseline, notably:
– 16% reduction in eutrophication1,
a process in which a body of water
becomes overly enriched with nutrients,
therefore decreasing its quality
– 13% reduction in acidification potential1,
the measure of the potential increase in
acidity of an ecosystem, which is linked
to reduced soil health and water quality
and lower crop yield
– 7% reduction in GHG emissions1.
We are now expanding the programme
to all of our Dongtai-based stevia
suppliers and launching a pilot with two
farms in Gansu Province, where we also
source stevia, to apply the lessons we
learned in Dongtai.
1 Per pound of stevia rebaudioside A produced.
SUSTAINABLE AGRICULTURE
Our commitment to supporting sustainable
agriculture is fundamental to our overall
ability to meet our environmental targets,
because of the significant proportion of our
impact on the climate that comes from
agricultural raw materials. 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
aim of building thriving communities.
Having a long-term, ongoing 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.
REPORTING ON OUR COMMITMENT TO
SUSTAINABLE CORN
When we set out our purpose targets
and commitments, corn was by far our
largest agricultural raw material, so our
sustainable agriculture commitment
was to maintain sustainable acreage
equivalent to the volume of corn we
bought globally each year; and, through
partnerships, to accelerate the adoption
of conservation practices.
We first achieved our target in 2019,
when we succeeded in enrolling over
1.4 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, the
programme aims to help farmers
understand the impact conservation
practices have on their fields and their
profitability, and to support farmers in
adopting them. We’ve maintained our
commitment for the last three years
as well.
While we have 1.4 million acres currently
in the programme, matching the volume
of corn we bought globally this year, we
report results from ‘retained acres’ which
are those that have been in the programme
since 2019. Retained acres in 2021 were
1.09 million, representing 1,400 growers;
a 73% grower retention rate. Results for
the three years include:
– 5% reduction in greenhouse gas
emissions, equivalent to removing 5,966
petrol-powered cars from the road
– Soil quality improved by 2%, as
measured by the Soil Conditioning Index
– Wind erosion reduced by 64%, the
equivalent of 3,815 trucks of soil staying
on a farm over the three-year period.
Tate & Lyle PLC Annual Report 2022
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
63
INTRODUCTION
GOVERNANCE
Climate change is one of the biggest and
most urgent challenges facing the world
today and presents risk to every country,
business and person on the planet –
Tate & Lyle is no different in that respect.
That is why one of the three pillars of our
purpose is Caring for our Planet, helping
to protect its natural resources for the
benefit of future generations. Guided by
our purpose, we are committed to
responding to and preparing for climate
change as well as the related issues of
water stress, beneficial use of waste and
sustainable agriculture. We are continuing
to develop our response to climate change
and have included information on our
actions and progress in several sections
of this year’s Annual Report.
The following statement, consistent
with the Task Force on Climate-related
Financial Disclosures (TCFD)
Recommendations and Recommended
Disclosures, summarises our approach
and progress under each of the four pillars
of the TCFD – governance, strategy, risk
management, and metrics and targets.
These four categories are interlinked and
inform each other. Where appropriate, to
avoid unnecessary repetition, we have
cross-referenced to information provided
elsewhere in this Annual Report and have
included a table of concordance at the end
of this statement showing where the
relevant disclosures against the 11
principles of the TCFD can be found.
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 supported in that task
by the Executive Committee with executive
responsibility shared jointly by the
Executive Vice President, Corporate
Affairs and President, Global Operations.
The Executive Vice President, General
Counsel has executive responsibility
for risk management, including the
assessment of climate-related risk.
We have a dedicated sustainability
function which develops and manages our
environmental programme, interacting
and working with stakeholders throughout
our value chain to accelerate positive
action. This function reports into the
Executive Vice President, Corporate
Affairs and works closely with the Global
Operations team and other members
of the executive team as necessary.
Updates on the progress of our
sustainability programme and climate-
related targets are provided to the 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 for
climate-related risks. The Committee
reviews updates from an internal working
group established in 2020 to align
processes and disclosures with the TCFD
recommendations. The Risk Committee
updates the Board at least annually.
Following the separation of the Group
into two standalone businesses –
Tate & Lyle and Primient – on 1 April
2022, we have further enhanced the
governance structure for sustainability
(see governance diagram on page 64).
A new Sustainability Committee, a
sub-Committee of the Executive
Committee, has been formed to review
the delivery of our sustainability strategy
and progress against our climate-related
and other environmental targets. This
Committee is chaired by the Chief
Executive and meets twice a year.
On an operational level, a cross-functional
Sustainability Working Group including
internal experts from our sustainability
and operations teams meets each quarter
to discuss progress on key projects and
detailed aspects of our approach to climate
change and sustainability generally. This
Steering Group is jointly chaired by the
Executive Vice President, Corporate
Affairs and President, Global Operations.
CLIMATE CHANGE AS PART OF REMUNERATION
Given the importance we place on
climate-related matters, one of the
elements of the performance criteria for
our long-term share incentive plan is
progress on sustainability, and this
includes targets for an absolute reduction
in greenhouse gas (GHG) emissions,
reduction in water use and the beneficial
use of waste. More information can be
found in the Remuneration Report on
page 121.
NEXT STEPS
In the 2023 financial year, we intend to
embed the enhanced governance structure
for sustainability (see governance diagram
on page 64) into the business, following the
separation of the Group into Tate & Lyle
and Primient.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 64
REVIEW OF THE YEAR
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
CORPORATE GOVERNANCE
from 1 April 2022
BOARD OF DIRECTORS
AUDIT COMMITTEE
CHIEF EXECUTIVE AND
EXECUTIVE COMMITTEE
RISK COMMITTEE
SUSTAINABILITY COMMITTEE
SUSTAINABILITY WORKING GROUP
STRATEGY
Tate & Lyle has operations all over the
world and therefore is exposed to a wide
variety of physical climate risks and the
transition to a low-carbon economy. To
better understand these risks, an internal
team worked with climate change and
sustainability specialists from AECOM to
undertake a physical and transition climate
change risk assessment (CCRA) of our
production facilities and supply chain. The
CCRA, which was completed in May 2021,
also considered the results of a detailed
water risk assessment of Tate & Lyle’s
major production facilities undertaken
by AECOM in 2020. The outputs from the
CCRA have, amongst other things, enabled
us to strengthen our enterprise risk
management framework through the
further integration of climate-related
business risks and opportunities, and
better align our disclosures with the
principles and recommendations of
the TCFD.
The CCRA and the water risk assessment
were both conducted on Tate & Lyle’s
operations before the business separation
into Tate & Lyle and Primient on 1 April
2022. As the reports were conducted
on a site-by-site, region-by-region and
country-by-country basis, the content and
outputs from the reports remain relevant
to both businesses post-separation.
CLIMATE CHANGE RISK ASSESSMENT PROCESS
The CCRA considered risks and
opportunities over three time horizons,
and exposure to potential physical and
low-carbon transition impacts under
Representative Concentration Pathways
(RCP) scenarios modelled by the
Intergovernmental Panel on Climate
Change (see page 65 for more detail).
In line with our risk management criteria,
potential business impacts and financial
implications were determined by
considering the likelihood of the risk
occurring and the nature and magnitude
of its impact on the business.
Tate & Lyle PLC Annual Report 2022
For both the physical and transition risk
assessments described below, a series of
interviews and working sessions were
held between AECOM and Tate & Lyle
throughout the assessment process to
discuss findings, historic events and
existing controls, nature of risks and
definitions of impact magnitude.
PHYSICAL RISKS
Methodology
The assessment looked at the potential
physical risk exposure of major production
facilities, logistics and corn and stevia
supply to projected acute weather events
and incremental changes in climatic
conditions over the short term (2020-
2039), medium term (2040-2059) and long
term (beyond 2060). This assessment was
conducted under a business-as-usual
scenario with no further decarbonisation
policy changes over the three time
horizons. Data for a defined set of climate
variables was extracted from online World
Bank databases, and from the previous
water risk assessment of production
facilities conducted by AECOM in 2020.
Data was then reviewed to identify the
potential likelihood of occurrence of
climate-related hazards. Potential
business risks resulting from these
hazards were identified, for example
a prolonged heatwave resulting in
equipment failure and operational
disruption. The likelihood of the risk
occurring was considered in the context
of the nature of operations, existing
climate conditions and vulnerability to the
climate hazard. The broad nature and
magnitude of business impacts, such as
repair costs, from the risks occurring were
defined and an overall rating for each risk
determined based on likelihood of risk
occurrence and the magnitude of
associated business impact in line with
Tate & Lyle’s existing Enterprise Risk
Management (ERM) process.
Key risks for Tate & Lyle (continuing
operations)
– 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.
The greatest increase in temperature is
projected for the McIntosh facility in
Alabama, US, while all production
facilities except Noto, Italy are projected
to have more frequent and intense heavy
precipitation. In the medium and long
term, these trends are predicted to
continue, with some additional sites
affected over time. All sites are
projected to experience higher
maximum and average temperatures,
as well as greater frequency, severity
and duration of heatwaves than the
preceding decades. The greatest
increases in frequency and intensity of
heavy precipitation events are expected
at sites in the US and Brazil.
– 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 these 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, storm surges and rising
sea levels.
– Corn and stevia supply: In the short
term, potential risks facing major corn
and stevia supply regions include
changes in total annual precipitation,
increased seasonal variability of rainfall,
and more severe droughts. In the US
Midwest corn-growing region, risks also
include increased frequency and
severity of hurricanes, increased spring
precipitation, and decreased summer
precipitation. Extreme precipitation and
flood frequency and intensity is
projected in European corn-growing
regions. In the medium and long term,
along with higher temperatures, these
trends are set to continue with additional
regions potentially impacted over time.
Potential impacts on our business
It is recognised that if we do not continue to
take proactive measures to mitigate the
risks identified, our business could
potentially be affected by, for example,
operational disruptions, asset damage,
increased raw material and utility costs,
and transport delays. These measures
include ensuring potential physical risks
are appropriately monitored and adequate
mitigation controls are in place, ensuring
that carbon pricing costs are factored into
engineering feasibility studies for capital
projects, and continuing to review logistics
and shipment risks associated with
weather events.
65
– Production facilities: Key impacts could
include disruption to production, asset
damage, equipment failure and
occupational health risks, potentially
resulting in revenue loss, higher
operating costs for energy and water,
costs for repair and/or replacements,
reduced work capacity, increased
insurance premiums, and/or associated
reputational damage.
– Distribution network: In the short term,
impacts facing our business due to risks
within our strategic distribution and
logistics network relate primarily to
disruption or delays in product
distribution. For example, we have seen
increased disruptions from port
closures as a result of hurricanes as
well as winter precipitation and flooding
issues across our road transportation
network. These may reduce our
profitability as additional costs for
shipment re-routing and/or product
replacement may not necessarily be
passed on to the customer.
– Corn and stevia supply: Potential
impacts relate primarily to increased
uncertainty and decline of crop yields
resulting in increased operating costs
and exposure to price volatility. If such
risks are not addressed in a proactive
and timely manner, profit erosion and
reputational damage may come to be
more material as climate-related
hazards affecting crop growing regions
become more frequent and more severe
in the medium and longer term with
increasing significance and cumulative
business impacts.
TRANSITION RISKS AND OPPORTUNITIES
Methodology
The assessment looked at the potential
exposure of production facilities and
business activities (e.g. procurement,
logistics) to market impacts driven by
economic, policy, technology and social
changes stemming from the shift to a
low-carbon economy and the need to adapt
to climatic change. The assessment looked
at exposure under an aggressive mitigation
scenario (2ºC) over the short (2020-25),
medium (2026-35), and long term (beyond
2035). Transition risks and opportunities
were screened for their relevance, for
example carbon pricing, and the likelihood
of occurrence assessed through a review
of trends and policies. The broad nature
and magnitude of business impacts, such
as increased costs for regulatory
compliance, for each risk or opportunity
was assessed, and an overall risk or
opportunity rating for each risk was
determined based on likelihood of risk
occurrence and the magnitude of
associated business impact in line with
Tate & Lyle’s existing ERM process.
Key risks for Tate & Lyle (continuing
operations)
– 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 emission modes of transport.
Drivers that are expected to be most
relevant are the national climate
commitments in the countries where our
major production facilities are located,
as well as decreasing ‘caps’ on carbon
allowances set as part of national
Emissions Trading Schemes. There will
be costs associated with adapting
products and materials with lower
carbon alternatives, such as additional
research and development requirements,
as well as additional processing
indirectly leading to higher carbon
emissions and costs associated with
minimising emissions at a facility level.
– 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. At an individual
facility level, this may impact on
competitiveness relative to another
facility. At a corporate level, risks
include increasing attention from
customers and stakeholders on the
commitment of businesses to reduce
carbon emissions, potentially impacting
reputation, demand, and market
stability. The move towards lower-
emissions transport modes could
increase transport costs. For example,
changes to vehicle fleets (upgrading
road fleets to electric vehicles) may lead
to increased expenditure as hauliers
subcontracted through logistics
providers work towards net zero and
move away from diesel powered
vehicles to lower carbon alternatives.
Transition opportunities
It is recognised that the need for transition
to a low-carbon world also presents
potential opportunities for Tate & Lyle.
For instance, an increased market demand
for low-carbon plant-based products
within the food industry over the short to
medium term may present access to new
markets and improve business resilience
through resource diversification. At
our production facilities, opportunities
include using more efficient production
processes and a continued change to
more sustainable and renewable energy
sources. Changing transportation modes
towards low and no-emissions transport
could pose an opportunity for Tate & Lyle in
the medium to long term due to improved
efficiency and reduced costs.
PHYSICAL RISK
ASSESSMENT
TIME HORIZON
Potential physical risks were
considered over three time
horizons:
– Short term: 2020-39
– Medium term: 2040-59
– Long term: beyond 2060
TATE & LYLE SITES
17 production sites across
Brazil, China, Italy, Slovakia,
the Netherlands and US
SUPPLY REGIONS
– 10 corn growing regions across
US, France and Slovakia
– Stevia growing regions
TRANSPORTATION
Transport, distribution and logistics
(upstream and downstream)
EMISSIONS CONCENTRATION PATHWAY
High emissions scenario
– +4oC, RCP 8.5 pathway1
TRANSITION RISK
ASSESSMENT
TIME HORIZON
Potential transition risks were
considered over three time
horizons:
– Short term: 2020-25
– Medium term: 2026-35
– Long term: Beyond 2035
TATE & LYLE SITES
Countries in which production
facilities are located – Brazil, China,
Italy, Slovakia, Netherlands and US.
PROCUREMENT AND COMMERCIAL
Global policy trends in key
geographies and markets
TRANSPORTATION
Transport, distribution and logistics
(upstream and downstream)
EMISSIONS CONCENTRATION PATHWAY
Aggressive mitigation scenario
– 2oC, RCP 2.6 pathway2
1 RCP 8.5 is the ‘high-emissions’ business-as-
usual scenario, with no policy changes to reduce
emissions and with increasing high atmospheric
GHG concentrations.
2 RCP 2.6 is the most aggressive mitigation
scenario where GHG emissions are halved
by 2050.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 66
REVIEW OF THE YEAR
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED
NEXT STEPS
In the 2023 financial year, we will continue
to embed the findings from the CCRA into
our ERM system, as well as the findings
from the assessment of new sites acquired
since the CCRA was conducted.
METRICS AND TARGETS
We have been measuring, managing
and reporting our greenhouse gas (GHG)
emissions for many years. For example,
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,
and we exceeded that target with a 25%
reduction. Continuous improvement in
our environmental performance is
ingrained in our day-to-day operations
with every production facility, regardless
of size, having annual targets for carbon,
waste and water that contribute to our
global targets.
PROGRESS AGAINST OUR TARGETS AND
COMMITMENTS FOR 2030
In May 2020, we announced a set of
ambitious targets and commitments
to assess and manage our environmental
performance including in climate-related
areas. These targets are, by 2030, to deliver:
– 30% absolute reduction in Scope 1 and 2
GHG emissions
– 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 intensity.
Details of revised 2019 baselines and our
performance against each of our
environmental targets in the two years
ended 31 December 2021 can be found in
the Environment, Health and Safety section
as follows:
– Reduction in absolute Scope 1 and 2
and Scope 3 GHG emissions on pages 57
and 58
– Beneficial use of waste on page 60
– Water use intensity reduction on
page 61.
In June 2022, we announced an additional
target to achieve zero Scope 2 GHG
emissions by 2030.
Tate & Lyle’s business strategy provides a
degree of resilience to some of the physical
and transition risks identified. For
example, we are diversifying our substrate
base which is reducing our dependency on
corn-based products, such as the
acquisitions over the last two years of
businesses that use tapioca, stevia and
chickpea as substrates. In addition, with
our ongoing efforts towards lower-carbon
production, including renewable electricity
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.
BENEFITS OF CONDUCTING THE CCRA
The process of preparing, and the output
from, the CCRA had many benefits, in
particular:
– Increased overall awareness and
understanding within the organisation
of climate change and its relationship
to business risks
– Identified key climate-related business
risks
to eliminate coal from our operations as
part of our climate action commitments,
and to increase operational efficiency.
These investments included replacing
coal-generated power with natural
gas-fired systems and boilers at the US
facilities in Loudon, Tennessee, Lafayette,
Indiana, and Decatur, Illinois (all three are
now part of Primient). Environmental
impact and climate-related issues are also
part of our process for reviewing potential
acquisitions including the acquisition of
Quantum Hi-Tech (Guangdong) Biological
Co., Ltd announced in March 2022.
NEXT STEPS
In the 2023 financial year we intend to take
the following actions:
– Split the CCRA that was conducted on
Tate & Lyle’s operations before the
business separation into Tate & Lyle and
Primient, so that we have a standalone
assessment for the new Tate & Lyle. As
part of this, we will consider if there are
any new risks which were not included in
the CCRA, for example, in relation to the
businesses acquired since the CCRA
was conducted.
– Identified business transition risks and
– Conduct a materiality assessment and a
scenario analysis to quantify the
financial impact of climate risk.
RISK MANAGEMENT
The Board recognises the significant
impacts posed by climate change and the
consideration of climate-related issues is
part of our global ERM system. Climate-
related issues are predominantly captured
as sub-risks through the principal risk on
‘Disruptive Forces’.
During the year, the ERM system was
updated to reflect findings from the CCRA.
These changes included integration of
more explicit definitions for climate
sub-risks and an enhanced process to
consider longer-term climate-related
risks and opportunities in the risk
assessment workshops held across
the Group.
Climate-related risks are measured using
the same risk measurement approach as
other risks within the ERM process. This
ensures that the significance of climate-
related risks are compared with other
risks within the overall ERM system.
More information about our ERM system
and processes can be found on pages 69
and 70. These changes form 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.
opportunities
– Enabled Tate & Lyle to better align its
corporate disclosures with
recommendations of the TCFD
– Enabled further integration of climate-
related risks into Tate & Lyle’s ERM
system (see risk management
section below).
WATER RISK ASSESSMENT
In 2020, with the support of AECOM, a
water risk assessment was undertaken
to identify potential water risks facing our
major production facilities and to provide
a baseline for the 2030 target to reduce
water use by 15% by 2030. As well as
looking at potential or historic water
scarcity and stress by site with the
associated financial cost, and the existing
management controls in place, the
assessment looked at competition for
available water resources. The water risk
was categorised by site and the output
included in the overall CCRA and its
actions. Following the separation of the
Group into two businesses on 1 April 2022,
a further review is now being undertaken
to consider potential actions to reduce
water use at the four largest production
facilities in the new Tate & Lyle.
CAPITAL INVESTMENTS
In line with our purpose, assessing the
environmental impact or benefits of capital
investments, such as capacity expansions,
are part of our capital approval process.
For example, in October 2021 we
completed a multi-year investment
programme of more than US$150 million
Tate & Lyle PLC Annual Report 2022
As well as adopting these targets, we also
committed to:
– Eliminate the use of coal in all 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
and through partnerships accelerate the
adoption of conservation practices.
We have made good progress against each
of these commitments as follows:
– As previously stated, in October 2021 we
closed down the final coal boiler in the
corn wet mill in Decatur, Illinois, US
thereby meeting our commitment to
eliminate the use of coal in all our
operations four years ahead of schedule
– 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.
– Through the sustainable corn
programme in partnership with
Truterra, explained in more detail
on page 62 in this Annual Report,
we maintained sustainable acreage
equivalent to the volume
of corn we bought in 2021, being
1.4 million acres.
The scope, principles and methodologies
used to report our GHG emissions can
be found in ‘EHS Reporting Criteria’ at
www.tateandlyle.com/purpose.
PATHWAY TO CARBON NET ZERO BY 2050
During the year, we analysed in detail
what a carbon net zero pathway by 2050
would look like for our Scope 1, 2 and 3
GHG emissions. As part of this work, we
undertook Scope 1 and 2 decarbonisation
assessments at our four largest plants
(after business separation) as well as
a detailed analysis of our Scope 3
emissions. On the basis of this work, we
have committed to being carbon net zero
by 2050. More details of this commitment
can be found on pages 58 and 59 of this
Annual Report.
67
TABLE OF CONCORDANCE
The table below cross-refers to where the relevant disclosures in this Annual Report
have been made against the 11 principles of the TCFD.
TCFD PRINCIPLES
1.
1.1
1.2
2.
2.1
2.2
2.3
3.
3.1
3.2
3.3
4.
4.1
4.2
4.3
Governance
Describe the Board’s oversight of climate-related risks and opportunities
Describe management’s role in assessing and managing climate-related
risks and opportunities
Strategy
Describe the climate-related risk and opportunities the organisation has
identified over the short, medium and long term
Describe the impact of climate-related risk and opportunities on the
organisation’s businesses, strategy and financial planning
Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2ºC
or lower scenario
Risk management
PAGE(S)
63, 64
63, 64
64-66
65-66
64-66, 70
Describe the organisation’s processes for identifying and assessing
climate-related risks
65-66, 70
Describe the organisation’s processes for managing climate-related risks
66, 71-75
Describe how the processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall
risk management
66
Metrics and targets
Disclose the metrics used by the organisation to assess climate-related
risks and opportunities in line with its strategy and management process
52-62, 66-67
Disclose Scope 1, Scope 2 and if appropriate Scope 3 greenhouse gas (GHG)
emissions and related risks
57-59
Describe the targets used by the organisation to manage climate-related
risks and opportunities, and performance against targets
52-62, 66-67
NEXT STEPS
In the 2023 financial year we will continue
to measure progress against our targets
and commitments for 2030. We will also
consider additional climate-related
metrics and targets against which we can
assess and disclose our progress.
Following the business separation,
we intend to take a fresh look at our
sustainable agriculture commitment
with a view to expanding it beyond corn.
We recognise that promoting sustainable
agriculture will be critical to delivering our
Scope 3 emissions target and that is why
we have expanded our sustainable stevia
grower outreach programme in Eastern
China, in partnership with Earthwatch
Europe and Nanjing Agricultural
University, both to minimise the farmers’
environmental impact and increase the
economic benefit of their production. More
details of this programme can be found on
page 62 of this Annual Report.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 68
REVIEW OF THE YEAR
RISK REPORT: FOSTERING GREATER
AWARENESS OF RISK
Our risk management processes played an important role
in ensuring the successful separation of the Group into
two standalone businesses.
PURSUING OUR SEPARATION
WHILE MANAGING THE IMPACTS
OF THE ONGOING PANDEMIC
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. That’s never been more
important than this year when, as well as
continuing to live and work through a
pandemic, we also took on the challenge
of separating Tate & Lyle into two
standalone businesses.
We said last year that we saw two positive
outcomes of the pandemic with regards to
risk management: first, more engagement
around the business on strategic risk, and
second, how our local teams really stepped
up and owned risk in their own areas. It
was pleasing that this year we saw that
cultural shift continuing, with greater
awareness of risk management in
day-to-day operations, as well as in the
strategic projects we worked on, notably
the business separation and the
integration of our stevia acquisition in
China. Both were made more challenging
by Covid-19 travel restrictions, but we still
managed to deal with issues as they arose.
Business continuity planning has been
central to our work this year, both for our
continuing operations and for Primient.
The business separation project involved
many teams and people across the
business, and it has really helped them
to see the value of our risk management
processes. It’s also strengthened
relationships between the teams, which
will be hugely valuable in the future.
As you will see from our principal risks
section, our overall risk profile has not
changed significantly as a result of the
business separation; it’s more a matter
of emphasis, given our ambitious growth
agenda and wider geographical spread,
especially our greater exposure to
emerging markets. In considering our
risks post-separation, we’ve paid
particular attention to the increasingly
complex and uncertain operating
environment facing all global companies:
geopolitical tensions and potential
Tate & Lyle PLC Annual Report 2022
economic protectionism; inflation;
pressure on global supply chains; and the
challenges of climate change.
IMPLEMENTING NEW SYSTEMS
AND PROCESSES
Core to our ability to plan for the future and
manage uncertainty is effective systems
and processes. This year we completed
a project to deliver a new enterprise risk
management system that replaces the
lengthy, complex spreadsheets that were
both time-consuming and cumbersome
for our people. The new system has set us
up well to manage risk post-separation,
enabling risk owners to spend time where
it really matters: investigating, managing
and reporting on their risks in a
co-ordinated way. A key focus in the
year ahead will be training more of
our people on the new system and
embedding it across the organisation.
of our new Responsible Sourcing
Programme. This programme uses the
not-for-profit SEDEX system, where
possible, since it minimises the burden on
suppliers by enabling them to share audits
with all of their customers. The target for
our Responsible Sourcing Programme was
to complete 75 high-risk supplier audits by
the end of the year. We were pleased that,
by 31 March 2022, we exceeded that target,
with 77 audits completed.
Turning to our programme for agents
and distributors, while some left and
others joined during the year, we
completed 88% of due diligence reviews
of those in scope, compared with 55%
last year. We also continue to monitor
those after certification, and, when
additional reviews are required, we
carry out recertification. Our statement
on anti-slavery and human trafficking
can be found on our website at
www.tateandlyle.com/antislaverystatement.
OUR FOCUS FOR THE YEAR AHEAD
We are now a company focused on
delivering growth, and particularly in
higher growth markets such as Asia.
The pandemic showed us the difficulties
of managing risks constructively when you
don’t have ‘eyes on the ground’, and so,
given our recent acquisitions in Asia and
China in particular, we have created a new
role of compliance manager for Asia,
based out of our Shanghai office. Our new
manager has the cultural insight and local
knowledge that will help us work
constructively with our partners and
suppliers as we build our business in the
region. And, we will continue to support
our people with the tools and systems they
need to embed a risk mindset in all our
operations, everywhere.
This year we completed
a project to deliver
a new enterprise risk
management system.
LINDSAY BEARDSELL Executive Vice
President, General Counsel
CONTINUING DUE DILIGENCE ON
OUR SUPPLY CHAIN
Last year, we completed the risk
assessment work for our new compliance
programme for third parties, so we could
focus our efforts on our highest risk areas.
Those at highest risk include: agents and
distributors; suppliers of some raw
materials; and packaging and warehousing
partners; either because of the nature of
the supply chains themselves, or because
of their importance to Tate & Lyle. For
these third parties, we have a due diligence
programme, and for other suppliers we
launched an audit programme as part
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.
69
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, environmental 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. Two changes have been made
to our principal risks over the last year.
– In the first half of the 2022 financial year,
the Board added a new principal risk:
‘Failure to complete the sale of a
controlling stake in Primary Products
and to successfully manage the
transition to two standalone businesses’.
Following completion of the Primient
transaction on 1 April 2022 and the
successful transition into two
standalone businesses, this principal
risk has been removed. Risks that
remain in relation to the ongoing
relationship with Primient, in areas such
as managing the long-term supply
agreements, supply chain and
information control have been integrated
into other principal risks.
– The principal risk for ‘Failure to manage
effectively changes in government
regulations and/or trade policies’ has
been merged with the principal risk
relating to government, consumer and
customer attitudes to form a revised
principal risk on: ‘Changes in government
trade policies, regulations or attitudes to
our products leading to a change in
consumer or customer outlook’.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 70
REVIEW OF THE YEAR
RISK REPORT CONTINUED
We will continue to review our principal
risks in light of both the separation of the
Group into two standalone businesses
and external factors. For Tate & Lyle,
a significant focus is now on delivering
organic growth and growth by acquisition.
The Company’s geographic composition
has shifted with a more balanced exposure
to markets in North America, Europe
and increasingly Asia. The wider risk
environment also continues to evolve
following the pandemic and increasing
geopolitical instability.
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.
COVID-19
The Covid-19 pandemic has presented
a significant challenge for the business,
its operations and employees. Our local
teams continued to manage our response
to keep our employees safe, ensure
business continuity and mitigate the risks
identified. Our local teams adapted their
approach and mitigating activities as
restrictions were lifted or, in some cases,
imposed again. All our production facilities
remained operational during the pandemic
which is a testament to the commitment
and skill of our people, as well as the
effectiveness of the actions taken. The
Board received updates on progress at
every meeting. This pandemic risk is
captured in the principal risk relating
to disruptive forces.
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 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 is reflected in our
principal risk relating 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 other 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.
As explained under the Task Force on
Climate-related Financial Disclosures
(TCFD) on pages 63 to 67, last year we
undertook a Climate Change Risk
Assessment to better understand potential
impacts of current and future climate-
related risks and opportunities in our
operations and supply chain. The findings
of this assessment have been embedded
into our enterprise risk management
programme. For example, consideration of
short-term and long-term climate-related
risks has now been fully integrated into the
risk assessment workshops held across
the business each year.
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 2025.
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
aggregate, both before and after
mitigating actions within our control.
Tate & Lyle PLC Annual Report 2022
The three downside scenarios modelled
were:
– A major operational failure causing
an extended shutdown of our largest
manufacturing facility in the US
following the Primient transaction
– The loss of two of our largest Food &
Beverage Solutions customers
– Significant energy, raw material and
commodity cost inflation due to the
consequences of the conflict in Ukraine
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 2022, the Group has a
strong cash position and committed
and undrawn liquidity of £735 million,
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$120 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 2025.
71
T
C
A
P
M
I
11
5
8
1
3
2
6
9
10
4
7
12
LIKELIHOOD
Key to the risks
Strategic
Operational
Legal, Regulatory and Compliance
This heat map illustrates the relative
positioning of our principal risks after
taking into account any mitigating
controls in place.
PRINCIPAL RISKS
1
2
3
4
5
6
7
8
9
10
11
12
STRATEGIC RISKS
Failure to deliver the Food & Beverage Solutions
growth strategy
Failure to develop and commercialise new
ingredients
Inability to attract, develop, engage and retain key
people
Failure to adequately anticipate and minimise
adverse impacts from global disruptive forces such
as disease, climate change, natural disaster, trade
disruption or civil unrest
OPERATIONAL RISKS
Failure to act safely and operate our facilities safely
and responsibly
Failure to maintain the quality and safety of our
products
Inability to manage fluctuations in the price and
availability of raw materials, energy, freight and other
operating inputs
Failure to operate our plants continuously, manage
our supply chain, and meet high standards of
customer service
Failure to maintain the continuing operation and the
security of our information systems and data
LEGAL, REGULATORY AND COMPLIANCE RISKS
Breach of legal or regulatory requirements including
our Code of Ethics
Failure to maintain an effective system of internal
financial controls
Changes to government trade policies, regulations or
attitudes to our products leading to a change in
consumer or customer outlook
OUR PRINCIPAL RISKS
Trend compared with
2021 financial year
Increasing
Unchanged
Decreasing
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
TREND
STRATEGIC RISKS
1. FAILURE TO DELIVER THE FOOD & BEVERAGE SOLUTIONS GROWTH STRATEGY
– Our organic and acquisitive growth plan 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 Food &
Beverage Solutions 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.
Failing to grow Food &
Beverage Solutions, our
main business division,
would prevent us from
delivering against our
Group targets. This could
reduce our profitability
over both the shorter and
longer term and damage
investors’ view of us.
Top-line growth, margin
expansion and M&A
activity remain key
components of successfully
growing our business
and we have a five-year
strategic plan in place to
support this.
– We strengthened our customer offering and presence
in Asia with the integration of the stevia and tapioca
businesses we acquired in the previous year, and we
announced an agreement to acquire Quantum
Hi-Tech, a leader in prebiotic fibres in China.
– We have strengthened our capabilities to serve our
customers in areas such as applications, sensory and
prototyping.
– We continued to build capabilities in the new region
of Asia, the Middle East, Africa and Latin America,
established in the previous year, to accelerate our
business 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 further
support and connect with our customers including
our Stabiliser University.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
72
REVIEW OF THE YEAR
RISK REPORT CONTINUED
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
TREND
STRATEGIC RISKS CONTINUED
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
– We launched 10 New Products and more than 30 new
internal development and open innovation, delivers a
strong pipeline of New Products.
stevia sweetener solutions from our innovation
pipeline.
– 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.
– The value of wins from our new business pipeline
increased by 23%.
– We increased our investment in the monitoring of
global trends and consumer insights for sharing
across our regions.
– We opened new Customer Innovation and
Collaboration Centres in Dubai and Chile.
– We prioritise partnership opportunities with
– We continued to offer online tools to support our
customers to accelerate development cycles and
bring New Products to market more quickly.
customers including the Tate & Lyle Nutrition Centre
and the Collaborate at Home Kitchen in North America.
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 as effectively as
possible and to have a
diverse and inclusive
workforce.
– We have a mix of short- and long-term 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
also have a dedicated team in place to develop and
measure our progress on equity, diversity and
inclusion.
– 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.
– During the pandemic, we significantly 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 have a Group-wide programme to support the
physical and mental wellbeing of our employees. Our
‘Happy Healthy Minds’ Employee Resource Group
provides support and information on mental health
and wellbeing for employees.
– We established and published a set of targets for the
next eight years to measure our progress on equity,
diversity and inclusion.
– We introduced new policies to promote better work
life balance, including a policy on equal parental
leave.
– We accelerated adoption of e-learning for all
employees by providing access to learning tools such
as LinkedIn Learning.
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
– The establishment of a Global Pandemic Response
framework to enable effective recovery from a major
disruption.
– Caring for our planet is one of the three pillars of our
purpose, and environmental considerations are part
of how we make strategic decisions.
– Having plants in different regions and countries
means we can serve customers where practical from
elsewhere if a particular area is disrupted, and
diversifies our business into different markets and
geographies.
– Our Risk Committee oversees emerging risks to
ensure we’re prepared to meet customers’ needs.
Team, together with teams at our local sites,
managed our response to Covid-19 in order to
minimise disruption.
– We progressed our sustainability programme
including good progress against our environmental
targets for 2030.
– We committed to become carbon net zero as a
company by 2050.
– We enhanced our strategic planning process to
provide 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
– We put in place strict protocols at all our sites to
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.
ensure we protected our people during the pandemic
including sanitation, social distancing, hand washing
and wearing face masks.
– 27 of our sites have passed tollgate 3 (of 7) as part of
– Our EHS Advisory Board, which includes our Chief
Executive, 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.
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.
– Food safety, product quality and site security continues to
be integrated into the responsibilities of our EHS team.
– Employee wellbeing continues to be included into the
J2EE programme.
Tate & Lyle PLC Annual Report 2022
73
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
TREND
OPERATIONAL RISKS CONTINUED
6. 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 continued to embed 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.
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.
– We have a programme to manage allergens in our
– Having previously combined the leadership of the
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.
– Governance process is in place for Tate & Lyle and
Primient to review on a regular basis the delivery of
the long-term supply and other related agreements,
which determine the safety and quality standard that
products sold to each business must meet.
Quality and EHS functions, we continued to leverage
the strengths of the J2EE programme to apply them
to the Global Quality Standards.
– We established separate quality and safety product
teams for Tate & Lyle and Primient as part of the
business separation.
7. INABILITY TO MANAGE FLUCTUATIONS IN THE PRICE AND AVAILABILITY OF RAW MATERIALS, ENERGY, FREIGHT AND OTHER OPERATING INPUTS
– We have strategic relationships and multi-year
– We strengthened our procurement resources
agreements with suppliers and trading companies.
– Our supply and tolling contracts with customers help
regionally to better manage local market variances
under a global centralised management structure.
us reduce raw material risk.
– Our raw material and energy purchasing policies
increase the security of our supply.
– Our US corn position is managed 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.
– Governance process is in place for Tate & Lyle and
Primient to review on a regular basis the delivery of
the long-term supply and related corn procurement
services.
– Our transportation procurement and logistics
teams work together to manage supplier and
customer service.
– We continued to leverage new technologies such as
Oracle Transportation Management System to
manage freight more efficiently and cost effectively.
– Following the outbreak of the conflict in Ukraine, we
formed an executive steering committee that meets
regularly to analyse the impact on our supply chain
and our customers, and to develop appropriate
mitigating actions.
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.
8. 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 continued to operate strict hygiene protocols
at all our sites to ensure our people were protected
and our plants kept running during the pandemic.
– We continued with new working protocols to enable
major capital projects to continue.
– We implemented our new business continuity
framework across Tate & Lyle.
– Our productivity programme continued to operate
despite the challenges of the pandemic, delivering
US$34 million of productivity benefits in total
operations.
– We have contingency plans to manage disruption such
– We completed our three-year programme to
as extreme winter weather to the extent possible.
– Governance process in place for Tate & Lyle and
Primient to review on a regular basis the delivery of
the long-term supply and other related agreements.
demolish old and potentially unsafe structures at our
manufacturing sites.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 74
REVIEW OF THE YEAR
RISK REPORT CONTINUED
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
TREND
OPERATIONAL RISKS CONTINUED
9. FAILURE TO MAINTAIN THE CONTINUING OPERATION AND 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
increases their resilience.
– We have a 24/7, third-party security operations centre
to deal promptly with any issues.
– We continued to embed remote working technology
such as MS Teams, strengthened our firewalls,
invested in new equipment and maintained strict
password security to ensure people could work safely.
– We held a Cyber Security Awareness month to
educate employees on cyber risks and security.
– We strengthened our Cyber Security Incident
Response Plan including critical breach scenario
exercises and aligned it to our company-wide risk
and controls management programme.
– Dedicated teams were deployed, together with
external support, to manage and deliver the
separation of the IT systems for Tate & Lyle and
Primient. Tate & Lyle continued to offer support
services to Primient under a transitional services
agreement.
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 further embedded our document management
system to facilitate better ways of working that are
easier to audit.
– We monitor legal and regulatory developments
– We strengthened our contract documentation
regularly to make sure we know what could affect
Tate & Lyle.
processes including the tracking of agreed terms and
conditions, and provided training for sales teams.
– We review our key legal policies regularly.
– We run a legal and ethics and compliance
training programme.
– We continued to provide training to our global
procurement team on legal policies including
contract training.
– We have a third-party whistleblowing service that gives
our employees a way to raise concerns anonymously if
they’re not comfortable raising them internally.
– We continued to provide legal, ethics and compliance
training across the organisation as part of our annual
training plan.
– We have lawyers in each region to work with
commercial colleagues to identify and mitigate legal
risk from the bottom up.
– We provided anti-trust/competition training.
– We developed sanctions awareness training and put
in place processes to ensure no breaches occur.
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 have an established framework of financial
– We continued to invest in our financial controls
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.
function, expanding the team and increasing the
scope and resources within our centres of excellence
within our Global Shared Services Centre in Poland.
– We established our Finance Global Process Ownership
– 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.
forum, to further enhance the consistency and
effectiveness of financial controls at all Group locations.
– We implemented specific financial controls in the
readiness and separation testing for the disposal of
our Primary Products business in the Americas,
including continuous monitoring against necessary
Financial Position and Prospects Procedures.
– We carried out refresher training for our senior
finance team on more complicated and judgemental
areas of finance and accounting, and the importance
of effective financial controls.
– We established an end-to-end process owner forum.
Tate & Lyle PLC Annual Report 2022
75
RISKS
HOW WE MITIGATE THE RISK
WHAT WE’VE DONE THIS YEAR
TREND
LEGAL, REGULATORY AND GOVERNANCE RISKS CONTINUED
12. CHANGES IN GOVERNMENT TRADE POLICIES, REGULATIONS OR ATTITUDES TO OUR PRODUCTS LEADING TO A CHANGE IN CONSUMER
OR CUSTOMER OUTLOOK
Government actions or
policies could impose
import/export limitations
on and other barriers to
our business that could
lead to additional costs,
restrict our growth and
limit our ability to operate
in certain markets. The
regulatory status or
perception of our
ingredients could also 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
also affect our ability or
freedom to operate.
– We engage with political parties and regulatory
authorities in the main countries in which we operate.
– 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.
– 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.
– 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 worked with national and state trade associations
as well as local authorities in both the US and China to
progress our commercial and sustainability goals.
– We expanded our advocacy programme in key
markets, including in partnership with customers, by
taking up positions on boards and as committee
chairs of key trade associations.
– Our global nutrition team initiates and monitors
– We initiated a number of projects with external
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.
experts to specifically assess the changing nature of
influencing factors on policy issues in key markets
and their likely impact on the business.
– We expanded our online Nutrition Centre to include
independent scientific contributions by external
experts on key topics of public health.
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
Task Force on Climate-related Financial Disclosures
PAGES
52 to 62
63 to 67
44 to 49
48
52 to 55
46 and 93
44 to 49
68
68 to 75
44 to 49
68
68 to 75
24 to 25
30 to 31
47 to 49
52 to 55
56 to 62
68 to 75
Code of Ethics1
Board Policy on equity, diversity
and inclusion1
Our people
Community involvement
Equity, diversity and inclusion matters
44 to 49
50 and 51
Throughout this Report
Employees
Human rights
Social matters
Anti-bribery and corruption
Business model
Non-financial KPIs
Code of Ethics1
Global EHS Policy1
Global HR Policy2
Code of Ethics1
Anti-Slavery Statement1
Data protection2
Our people
Gender pay gap reporting
Health and safety
Ethics and whistleblowing
Our people
Supplier audit programme
Risk Report
Code of Ethics1
Anti-money laundering and
Anti-bribery Standard2
Agents and Distributors2
Group Competition (Anti-trust)2
Trade Compliance2
Gifts and Hospitality Standard2
Our people
Supplier audit programme
Risk Report
Our business model
Our purpose commitments and targets
Gender diversity
Health and safety
Environment and sustainability
Principal risks
Risk Report
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 95 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 90.
The Board approved the Strategic Report on pages 11 to 75 of this Annual Report on 8 June 2022.
By order of the Board
CLAIRE-MARIE O’GRADY
Company Secretary
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 7676
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Tate & Lyle PLC Annual Report 2022
GOVERNANCE
IN THIS SECTION
78 Board of Directors
82 Executive Committee
84 Corporate Governance
100 Nominations Committee Report
102 Audit Committee Report
108 Directors’ Remuneration Report
127 Directors’ Report
129 Directors’ statement of responsibilities
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Tate & Lyle PLC Annual Report 2022
BOARD COMMITTEES
Certain responsibilities are delegated to
three Board Committees, details of
which are provided on pages 100, 102
and 108.
A Audit Committee
R Remuneration Committee
N Nominations Committee
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BOARD OF
DIRECTORS
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DR GERRY MURPHY
Chair and Chair of the
Nominations Committee
Date appointed to Board:
January 2017
Independent: Yes on
appointment
Aged: 66
Nationality: Irish
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:
– Chair 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.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 2
3
4
A N
5
R N
6
R N
DR GERRY MURPHY
Chair and Chair of the
Nominations Committee
Date appointed to Board:
January 2017
Independent: Yes on
appointment
Aged: 66
Nationality: Irish
SKILLS AND EXPERTISE:
CURRENT EXTERNAL COMMITMENTS:
Gerry started his career in the food and drinks
– Chair of Burberry Group plc
sector and received his PhD in food technology.
He has held a number of chief executive roles
PREVIOUS ROLES:
and has also been an investor and independent
Chairman of The Blackstone Group’s principal
director in a number of international listed
European entity (2009 to September 2019).
companies. His significant business and board
Senior Managing Director in Blackstone’s
level experience and detailed understanding of
Private Equity Group (2008 to 2017). CEO
UK corporate governance requirements enable
of Greencore Group plc, Exel plc, Carlton
him to provide the Board with valuable
leadership.
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.
NICK HAMPTON
Chief Executive
Date appointed to Board:
September 2014
Date appointed Chief
Executive: April 2018
Independent: No
Aged: 55
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.
DAWN ALLEN
Chief Financial Officer
Date appointed to Board:
May 2022
Date appointed Chief Financial
Officer: May 2022
SKILLS AND EXPERTISE:
Dawn brings more than two decades of
experience in the global food industry and has
a proven track record of financial leadership.
Her financial, commercial and international
experience is of great value to the Board. Dawn
is a member of the Institute of Chartered
Accountants of England and Wales.
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.
SKILLS AND EXPERTISE:
Patrícia brings brand marketing and digital
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.
Independent: No
Aged: 53
Nationality: British
JOHN CHEUNG
Non-Executive Director
Date appointed to Board:
January 2021
Independent: Yes
Aged: 57
Nationality: Chinese
(Hong Kong)
PATRÍCIA CORSI
Non-Executive Director
Date appointed to Board:
May 2021
Independent: Yes
Aged: 49
Nationality: Brazilian
DR ISABELLE ESSER
Non-Executive Director
Date appointed to Board:
June 2022
Independent: Yes
Aged: 58
Nationality: Belgian
79
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.
CURRENT EXTERNAL COMMITMENTS:
– None
PREVIOUS ROLES:
Global CFO & VP, Global Transformation at Mars
Incorporated from 2020 until joining Tate & Lyle.
During a 25-year career at Mars, she held a
number of senior financial roles in Europe and
the US including Global Divisional CFO, Food,
Drinks and Multisales, and Regional CFO
Wrigley Americas.
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.
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:
Isabelle brings over 30 years’ experience in
global consumer food and ingredient companies,
with a particular focus on research and
development. Her scientific expertise and
extensive technology leadership experience
in Tate & Lyle’s markets are of significant
benefit to the Board.
CURRENT EXTERNAL COMMITMENTS:
– Chief Research, Innovation and Food Quality
Safety Officer at Danone SA
PREVIOUS ROLES:
EVP, R&D Foods Transformation, Global Foods
and Refreshment at Unilever PLC and Chief
Human Resources Officer at Barry Callebaut AG.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 80
BOARD OF DIRECTORS CONTINUED
7
9
8
10
10
BOARD COMMITTEES
Certain responsibilities are delegated to
three Board Committees, details of
which are provided on pages 100, 102
and 108.
A Audit Committee
R Remuneration Committee
N Nominations Committee
11
BOARD COMPOSITION
GENDER DIVERSITY OF DIRECTORS
As at 8 June 2022
DIRECTORS’ NATIONALITIES
As at 8 June 2022
TENURE OF NON-EXECUTIVE DIRECTORS
As at 8 June 2022
5
Men
Women
6
1
1
1
1
1
1
5
British
American
Danish
Irish
Chinese
Brazilian
Belgian
3
2
4
Less than
3 years = 4
3 to 6 years = 2
Over 6 years = 3
7
A N
PAUL FORMAN
Senior Independent Director
Date appointed to Board:
January 2015
Independent: Yes
Aged: 57
Nationality: British
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 2022
GOVERNANCE 81
8
R N
9
A N
10
A R
N
11
A R
N
LARS FREDERIKSEN
Non-Executive Director
Date appointed to Board:
April 2016
Independent: Yes
Aged: 63
Nationality: Danish
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.
KIMBERLY (KIM)
NELSON
Non-Executive Director
Date appointed to Board:
July 2019
Independent: Yes
Aged: 59
Nationality: American
SYBELLA STANLEY
Non-Executive Director and
Chair of the Remuneration
Committee
Date appointed to Board:
April 2016
Independent: Yes
Aged: 60
Nationality: British
WARREN TUCKER
Non-Executive Director and
Chair of the Audit Committee
Date appointed to Board:
November 2018
Independent: Yes
Aged: 59
Nationality: British
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.
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.
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 shareholder institutions.
CURRENT EXTERNAL COMMITMENTS:
– Chairman of Matas A/S
– Non-executive director of Falck A/S
– 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
successful listing on the Copenhagen stock
exchange during that period. Prior to becoming
CEO, he held various management positions at
Chr. Hansen.
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.
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.
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.
Tate & Lyle PLC Annual Report 2022
PAUL FORMAN
Senior Independent Director
Date appointed to Board:
January 2015
Independent: Yes
Aged: 57
Nationality: British
SKILLS AND EXPERTISE:
Paul has wide experience in global
CURRENT EXTERNAL COMMITMENTS:
– Chief Executive of Essentra plc
manufacturing, commercial, as well as strategy
consultancy and M&A advisory services.
PREVIOUS ROLES:
He brings insight to the commercialisation of
Group Chief Executive of Coats plc and Low &
innovation pipelines and the implementation
Bonar PLC. Served as a non-executive director
of business-to-business customer and
at Brammer PLC.
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.
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 82
OUR EXECUTIVE
TEAM
NATIONALITIES OF THE
EXECUTIVE COMMITTEE
As at 8 June 2022
1
3
5
British
American
Argentinian
3
6
9
2
5
8
1
4
7
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 83
1
2
3
4
5
6
7
8
9
NICK HAMPTON
Chief Executive
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.
DAWN ALLEN
Chief Financial Officer
Nationality: British
Dawn joined Tate & Lyle in May 2022 as Chief Financial Officer from Mars Incorporated where she
was Global CFO & VP, Global Transformation since 2020. Prior to that, during a 25-year career at
Mars, she held a number of senior finance roles in Europe and the US. Her financial experience and
knowledge of the global food and beverage industry will be of great benefit to Tate & Lyle.
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. Lindsay currently
serves as a non-executive director of 4Imprint Group plc.
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.
WILLIAM (BILL)
MAGEE
President, North America
Nationality: American
Bill joined Tate & Lyle in 2018 as Commercial Vice President for Food & Beverage Solutions,
North America. Later that year, he was appointed Senior Vice President and General Manager for
Food & Beverage Solutions, North America before becoming President, North America and joining
the Executive Committee in October 2021. Previously Bill held senior leadership roles in speciality
materials firms including Rohm & Haas, Dow, and H.B. Fuller. Bill’s experience and customer focus
has been instrumental in driving North America’s growth strategy.
MELISSA LAW
President, Global Operations
Nationality: American
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
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. Laura currently serves as a non-executive director of Fever-Tree
Drinks plc.
ROWAN ADAMS
Executive Vice President,
Corporate Affairs
Nationality: British
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 include leading our global sustainability programme. He has deep knowledge and
understanding of the Company and our industry.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 84
GOVERNANCE
CORPORATE
GOVERNANCE:
CHAIR’S
INTRODUCTION
INTRODUCTION
This has been an unusually busy year for
the Board of Tate & Lyle as the Group was
repositioned as a focused speciality food
and beverage ingredients business. In
pursuing that transition and in taking the
major decisions to enable it, the Board has
been supported, and indeed reassured by,
our governance framework and the
commitment of our Board colleagues.
Due to Covid-19 restrictions, we continued
to hold many of our Board and Committee
meetings remotely via video conference,
more recently enjoying the opportunity for
some of the Board, including overseas
Board members, to meet in person. While
we have learnt that operating in an online
forum can work well, we look forward to
returning to more regular face-to-face
meetings in the coming financial year and
to visiting our sites around the world and
connecting with our people in person too.
An unusually busy
year for the Board
as we repositioned
the business.
Tate & Lyle PLC Annual Report 2022
OUR PRIORITIES DURING THE YEAR
CONTINUING TO DEVELOP OUR LONG-TERM
STRATEGY
In my introduction last year, I noted that the
Board had 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. In July 2021,
we were pleased to announce that we had
agreed to sell a controlling stake in the
Primary Products business in the
Americas to KPS Capital Partners, LP.
Inevitably, the Board spent significant time
considering the benefits and risks of such
a transaction, for all our stakeholders, in
the months leading up to the announcement.
The Board also spent time considering the
information circular to shareholders which
sought approval for the transaction at a
general meeting which took place in
September 2021 and in considering the
appropriate use of the proceeds. This
included the payment of a c.£500 million
special dividend to ordinary shareholders,
together with an associated share
consolidation, which was explained in a
second information circular and approved
by ordinary shareholders at a general
meeting in April 2022.
The separation of the Primary Products
business from Tate & Lyle was a complex
undertaking especially for the IT and
finance functions. The Board and in
particular the Audit Committee, paid
careful attention to the progress of the
separation activities, and the risks and
mitigation activities associated with them.
You can read more about the transaction
on pages 16 and 17 and the work of the
Audit Committee from page 102.
The successful completion of this
transaction allows Tate & Lyle to
concentrate its future strategy on
becoming a growth-focused food and
beverage solutions business both through
organic and inorganic growth. A good
example of this is the agreement signed
in March 2022 to acquire Quantum Hi-Tech
(Guangdong) Biological Co., Ltd (Quantum),
a leading fibre business in China. This
acquisition is fully aligned to Tate & Lyle’s
growth strategy. The Board took a detailed
interest in this business which represents
a significant acquisition for Tate & Lyle.
My Board colleagues and I will pay close
attention to the integration of the Quantum
business into the Group. In fact, as soon as
travel restrictions in China are relaxed,
I plan to visit the business and also to
return to Sweet Green Fields, our other
recently acquired business in China.
Aside from these priorities, we also
considered the usual subjects on the
Board’s calendar: financial performance;
risk management; 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
Food & Beverage Solutions in each of our
regions. Our annual Board effectiveness
review was internally facilitated this year
following an externally facilitated review
last year.
FOCUSING ON INNOVATION FOR THE FUTURE
TATE & LYLE
We recognise that innovation is central to
Tate & Lyle’s strategy to be a growth-
focused speciality food and beverage
business. To that end, the Board spent time
with Victoria Spadaro Grant and members
of her leadership team to learn about the
priorities, initiatives and investment
opportunities which will unlock our
customers’ growth potential. The Board
was also delighted to receive a
presentation from, and to have the
opportunity to hold a discussion with, the
Head of Research and Development at a
major food and beverage multinational,
and one of our largest customers, about
the trends and opportunities which that
organisation anticipates will shape the food
and beverage industry over the coming
years, and the characteristics they look for
in their preferred partners and suppliers.
85
OUR EFFECTIVENESS AS A BOARD
As I mentioned, our Board effectiveness
review was internally facilitated this year.
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.
This year’s review showed that the Board
and its Committees are operating well and
identified areas for increased or continued
focus in the year ahead as described on
page 89.
OUR FOCUS FOR THE 2023
FINANCIAL YEAR
Tate & Lyle started the 2023 financial year
as a newly focused company with a clear
strategy to grow the business as a
speciality food and beverage solutions
business. Our focus as a Board will be to
help Nick and his team deliver on that
strategy while navigating the challenges
of inflation and global supply chain
disruption. We will do that whilst also
keeping front of mind our other recurring
key themes of people and culture,
sustainability, and succession and
development. I and all my Board
colleagues are looking forward to
connecting with our people around the
globe in person again, and we sincerely
hope that the Covid-19 pandemic will not
frustrate those desires for a third year.
GERRY MURPHY
Chair
DEVELOPING OUR RELATIONSHIPS WITH
STAKEHOLDERS
Although, as a Board, we are very mindful
of all stakeholders and try to consider
every perspective in our discussions, we
cannot, of course, engage directly with
everyone. Covid-19 continued to present
challenges but we continued to use
technology to ensure we had meaningful
engagement with our people, customers
and shareholders. Here are some of the
Board’s highlights.
– Our people: After the completion of the
transaction, I co-hosted a virtual café
with Nick for our senior leadership team
and my Board colleagues Kim Nelson,
Lars Frederiksen and John Cheung held
virtual cafés open to all employees in
North America, Europe, Middle East and
Africa and Asia Pacific, respectively.
Patrícia Corsi will host a virtual café for
our colleagues in Latin America in
August 2022. These sessions gave the
Board the opportunity to thank our
people directly for their resilience and
commitment through a busy year and for
our people to ask questions and make
comments and observations about the
business and their view on the future of
the new Tate & Lyle and Primient.
– Customers: 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 is managing challenges
experienced in the global supply chain
and of rising inflation from the
perspective of our customers.
– Shareholders: We were pleased to hold
our AGM in person again in 2021
although we also took the opportunity
in advance of the meeting to publish a
presentation on our website along with
answers to questions submitted from
shareholders. We also enjoyed engaging
with those shareholders who attended
the general meetings to approve the
Transaction and the special dividend
and associated share consolidation in
September 2021 and April 2022,
respectively. We look forward to meeting
again with shareholders at our AGM
in July 2022.
A CULTURE DRIVEN BY A REFRESHED PURPOSE
Having a clear purpose at Tate & Lyle
which guides our approach to our business
and our stakeholders is fundamental.
That is why the Board was fully engaged
with, and supportive of, Nick and the
management team in refreshing our
purpose statement for the new Tate & Lyle.
Transforming Lives through the Science
of Food inspires all our people including
the Board.
The safety of our people continues to be
of significant focus for the Board. As in
previous years, we received updates from
Nick on health and safety performance at
every Board meeting and had two in-depth
sessions during the year on the continuing
progress of our Journey to Environment,
Health and Safety Excellence (J2EE)
programme. Laura Hagan, our Chief
Human Resources Officer also regularly
updates the Board on people issues. The
focus this year was around mental health
and wellbeing particularly in the context of
the Transaction which meant the transition
for many members of staff, often with very
long service records at the Company, from
Tate & Lyle to the new joint venture
company, Primient. Progress on equity,
diversity and inclusion has also been an
area of focus for management and about
which the Board takes a keen interest. We
are pleased with the progress in this area.
Our ethics and compliance programme is
essential to how we operate at Tate & Lyle.
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 also receives reports from the
Head of Ethics and Compliance twice a
year. This year we learnt that the number
of reports continued to be lower than in
pre-pandemic years, but we did see more
reports coming from our Asia region,
potentially evidence of better integration of
our compliance policies and procedures in
our new businesses in that region, which
the Board found to be reassuring.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 86
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.
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.
THE BOARD – 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
Read more on
PAGE 102
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
Read more on
PAGE 100
CHAIR: SYBELLA STANLEY
– 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 108
EXECUTIVE COMMITTEE
– 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 Food & Beverage Solutions
and Sucralose businesses and global support functions
– Identifies, evaluates, manages and monitors risks facing
– Monitors performance against our purpose commitments
the Group
– Manages the relationship with Primient
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, and the Capital Approval Committee. Committees may also
be established for a finite period to oversee key strategic or operational priorities.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 87
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
Responsible for proposing strategy to the Board and
delivering it
– Chairs Board meetings, Nominations Committee meetings
and the Annual General Meeting
– Sets the Board agenda with the Chief Executive and
Company Secretary
– Facilitates active engagement by all Directors
– Sets the style and tone of Board discussions
– Ensures the Directors receive accurate, timely and clear
information
– Runs the business
– Communicates within the organisation the Board’s
expectation with regard to culture, values and behaviours
– Ensures the Board is aware of current business issues
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
Responsible for maintaining the governance and listing rules
compliance framework
– Acts as a sounding board for the Chair and supports him in
the delivery of his objectives
– 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
views 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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 88
BOARD ACTIVITY DURING
THE YEAR ENDED 31 MARCH 2022
The Board holds six scheduled meetings each year and a meeting to discuss strategy. Due to the ongoing Covid-19 pandemic and
lockdown restrictions, this year’s meetings were held via video conference, with occasional in person attendance by those Board
members who were able to travel. The Board held a number of additional calls and meetings during the year to consider and approve
the sale of a controlling stake in the Primary Products business in the Americas to KPS Capital Partners, LP (KPS) and the acquisition
of Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum).
STRATEGY
– Approved the sale of a controlling
stake in the Primary Products
business in the Americas to KPS (the
Transaction). Monitored the project
and received regular updates on
progress towards successful
separation of the two businesses and
completion on 1 April 2022
– Undertook deep dives into the
strategy of our Food & Beverage
Solutions (F&BS) division focusing in
detail on North America, Latin
America, Europe and our other
growth markets, considering the key
growth drivers, markets and
customers in each
– Reviewed the priorities identified for
our three key innovation platforms
within Innovation and Commercial
Development (ICD), namely: our
Sweetening, Mouthfeel and
Fortification platforms
– Approved Tate & Lyle’s new purpose
statement, ambition and strategy (see
pages 26 to 30 for more information)
– Reviewed the Group’s five-year
strategic plan
– Considered the Group’s strategy for
organic and M&A growth
opportunities. Approved the
acquisition of Quantum.
LEADERSHIP AND EMPLOYEES
– Approved the appointment of Dawn
Allen as Chief Financial Officer
– Approved the appointment of
Dr Isabelle Esser as a non-executive
director
– Endorsed the Chief Executive’s
appointment of Bill Magee to the
Executive Committee
– Reviewed the Group’s people agenda
including equity, diversity and
inclusion, talent management and
bench strength within the
organisation
– Considered the impact of the ongoing
Covid-19 pandemic on the health and
wellbeing of our employees.
Tate & Lyle PLC Annual Report 2022
FINANCIAL
– Approved the full-year results and
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
– Considered the ongoing 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.
GOVERNANCE AND STAKEHOLDERS
– Considered the output and
recommendations from the Board
effectiveness review
– Discussed feedback from institutional
shareholders and analysts
– Reviewed and approved the Directors’
register of interests.
financial statements and the Annual
Report and financial statements for
the 2021 financial year
– Approved the half-year results for the
2022 financial year
– Approved the payment of the
interim dividend for the 2022 financial
year and recommended payment of
the final dividend for the 2021
financial year
– 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 2023
– Regularly reviewed the Group’s
financial performance and forecasts
– Reviewed and agreed the Company’s
commitment to be carbon net zero
by 2050
– Considered the use of proceeds from
the Transaction and recommended
to shareholders the payment of a
c.£500 million special dividend and
associated share consolidation.
INTERNAL CONTROL AND RISK MANAGEMENT
– Considered and agreed the Group’s
risk appetite and principal risks
particularly in the context of the sale
of a controlling stake in the Primary
Products business in the Americas
to KPS
– Assessed the effectiveness of our
internal controls and risk
management systems
– Agreed the Viability Statement as
disclosed in the Annual Report 2021
– 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.
GOVERNANCE 89
DIRECTORS’ ATTENDANCE AT BOARD AND COMMITTEE MEETINGS DURING THE FINANCIAL YEAR
NAME
Dr Gerry Murphy
Nick Hampton
Vivid Sehgal2
John Cheung
Patrícia Corsi3
Paul Forman
Lars Frederiksen
Anne Minto4
Kim Nelson
Sybella Stanley
Warren Tucker
BOARD
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATIONS
COMMITTEE
9/9
9/9
5/5
9/9
9/9
9/9
9/9
3/3
9/9
9/9
9/9
6/61
6/61
4/4
6/6
n/a
6/6
n/a
2/2
6/6
6/6
6/6
4/51
5/51
n/a
n/a
4/4
n/a
5/5
2/2
n/a
5/5
5/5
4/4
4/41
n/a
4/4
4/4
4/4
4/4
1/1
4/4
4/4
4/4
1 Although not a Committee member, attended the Committee meetings by invitation.
2 Resigned from the Board with effect from 3 November 2021.
3 Appointed to the Board as a non-executive director with effect from 1 May 2021.
4 Retired from the Board at the end of the AGM on 29 July 2021.
BOARD EFFECTIVENESS REVIEW
This year’s internally 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 100, 102 and 108 for information about the effectiveness evaluations of each of the Committees and
of individual Directors conducted this year.
2022 BOARD EFFECTIVENESS REVIEW
AREAS FOR FOCUS
ACTION
Continuing to focus on mergers and
acquisitions (M&A)
During the 2022 financial year (FY22), the Board approved the acquisition of Quantum. The Board
and the management team will continue to review M&A opportunities and to monitor the successful
integration of recent acquisitions including that of Quantum.
Organic growth and innovation
During FY22, the Board looked in depth at the performance and strategies of our Food & Beverage
Solutions business in North America, Europe and in Asia, Middle East, Africa and Latin America
and at the platform strategies for Sweetening, Mouthfeel and Fortification. In the 2023 financial
year (FY23), it will continue to look in depth at the delivery of our growth strategy, building
capabilities and new product pipeline development. The Board will also review updates on the
progress of the relationship with Primient from time to time.
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.
Board succession planning, and talent
development throughout the organisation
The Nominations Committee will focus on succession planning for those non-executive directors
who are due to retire from the Board in the near term. The Board will also consider long-term
executive sucession planning and 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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 90
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 92. 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 95.
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.
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.
Engagement takes various
forms throughout the year:
by executive directors; our Chair;
and our Investor Relations
team. The Transaction resulted in
more shareholder interactions
this year, including two additional
shareholder meetings. For more
information, see pages 16 and 17.
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 July, the Board had the
pleasure of speaking directly
with the Chief Science and Global
R&D Officer of one of our major
customers about innovation in
the food and beverage market
and about ways of working to
optimise partnerships between
suppliers such as Tate & Lyle
and their customers.
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 (ESG)
issues. At the general meeting in September 2021, the Board
received approval to amend the Directors’ Remuneration Policy
to include non-financial performance conditions linked to ESG
metrics for the long-term incentive awards.
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.
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 continued to launch online tools to help our customers
with their reformulation efforts, including our new Stabiliser
University (educational course). As pandemic restrictions have
been lifted in some of our key markets we have started to meet
with customers face-to-face again.
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.
We listen to our employees to
gain their insight and feedback
through a range of channels
such as team meetings,
townhalls 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 92.
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 continued to operate a number of programmes to keep
our people safe, well connected and productive. The Board
increased its focus on equity, diversity and inclusion during the
year, supporting management’s actions including the publication
of a set of number targets for the next eight years. See pages 44
to 51 for more details on our people and how we engage with
them.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 91
REGIONAL VIRTUAL CAFÉS WITH BOARD MEMBERS
Following the completion of the sale of a controlling stake
in our Primary Products business in the Americas to KPS
on 1 April 2022, our non-executive directors, Lars
Frederiksen, Kim Nelson and John Cheung each hosted
virtual cafés with staff in our Europe, Middle East and
Africa, North America and Asia Pacific regions. Here,
Lars Frederiksen is joined by Murat Orhon, SVP & General
Manager, Europe and over 200 colleagues from our sites in
Europe, Middle East, South Africa and the United Kingdom.
STAKEHOLDER ENGAGEMENT
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.
We have a dedicated
procurement function, based
around the world, which engages
with our suppliers to optimise
the way we work with them.
By leveraging third-party supplier 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.
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.
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.
Regulators
Before our new
ingredients can be
incorporated into our
customers’ products they
must be approved by
regulatory authorities.
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.
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 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.
Through a range of programmes supporting health, wellbeing
and education across the world, we help improve the lives of
thousands of people in our local communities. See pages 50 and
51 for more details.
In response to the impact of the pandemic on many of our local
communities, we provided 1.2 million additional meals for
people in need during the year through donations to food banks
and charitable partners. Since the humanitarian crisis in
Ukraine began we have made donations to charitable partners
to support Ukranian refugees in the communities in Poland and
Slovakia in which we have operations as well as more widely.
In November 2021, we published our second Purpose Report,
explaining what our purpose is and setting out our progress on
delivering our long-term purpose targets and commitments.
By helping regulators understand our ingredients we speed up
the process of regulatory approval.
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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 92
STAKEHOLDER ENGAGEMENT CONTINUED
Prior to the Covid-19 pandemic, it was the
practice at each Board meeting, for the
Chair 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
priorities are being received, understood
and applied across Tate & Lyle. Board
members look forward to returning to a
programme of individual site visits during
the course of the 2023 financial year.
Although the Covid-19 pandemic prevented
Board members from visiting our sites,
Board members actively participated in
a number of engagement initiatives
throughout the year as described below.
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.
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.
ENGAGEMENT ACTIVITIES
Reaching the wider
workforce
To mark the start of a new era for Tate & Lyle after the completion of the sale of a controlling stake in the
Primary Products business in the Americas, Board members held a series of virtual cafés in April 2022
to engage with the wider workforce in our regions and to hear their thoughts about the new Tate & Lyle.
Kim Nelson hosted a café for our colleagues in North America, John Cheung hosted a café for colleagues
in our Asia Pacific region and Lars Frederiksen hosted a café for colleagues in Europe, Middle East and
Africa. Patrícia Corsi will host a café with colleagues in Latin America in August 2022. Nick hosted a
virtual café for the Global Leadership Team of the new Tate & Lyle business with Gerry Murphy, the
Board Chair.
Higher Growth Markets
Engagement
Patrícia Corsi met in person with members of our senior leadership team for Asia, Middle East, Africa
and Latin America to share her experiences of building business in higher growth markets such as those
in Latin America.
Black Employee Network
sponsorship
Kim Nelson continued to provide support to the Black Employee Network, one of our Employee
Resource Groups.
Recognising our Global
Shared Services team
In September 2021, our Global Shared Services team in Łódź in Poland celebrated its 10th anniversary.
To mark this occasion and to recognise the work of the team, members of the Audit Committee held a
virtual meeting with the leadership team in Łódź.
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 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 2021 and May 2022, Nick held 34 virtual cafés providing our broader employee population
with an opportunity to connect with him.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 93
I was delighted to host a virtual
café with our teams in the
Asia Pacific region and to hear
first-hand the enthusiasm and
passion which this group of
future stars have for their work
and for Tate & Lyle’s purpose.
JOHN CHEUNG Non-executive director
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 where we operate, so that we can
deliver consistently strong operational
performance and financial results. For
more information, see our Directors’
Remuneration Report from page 108.
Assessing and monitoring culture
As described in the Chair’s introduction
to corporate governance on pages 84 and
85, 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 46.
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 difficult to meet them in person.
As Covid-19 restrictions have eased,
we have resumed some face-to-face
meetings with investors, but have also
continued to use video conferencing
technologies which have enabled us
to keep as close as possible to our usual
Investor Relations programme.
This programme has two objectives.
It aims to help existing and potential
investors understand Tate & Lyle,
and ensure 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 are guided in our approach by our
purpose. We published our second
annual Purpose Report in November 2021,
which set out progress on our purpose
targets and commitments to 2030.
This report is available on our website
at www.tateandlyle.com/purpose.
Institutional investors
The Chief Executive, Chief Financial Officer
and our VP, Investor Relations, maintain a
programme of meetings with institutional
investors 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. Other members of
the senior management team occasionally
participate in these conferences where
possible, giving investors the opportunity
to appreciate the breadth and depth of the
executive team.
Investor interactions have been
significantly higher this year, driven in
particular by the transaction for the sale
of a controlling stake in our Primary
Products business in the Americas. The
Transaction has generated incremental
interest from investors who have been
keen to understand the rationale and
details of the Transaction. On the
announcement of this transaction, the
Chief Executive and Chief Financial Officer
presented to investors and analysts via
a webcast and then participated in an
additional cycle of investor meetings.
The Transaction has also meant extra
communications with shareholders to seek
their approval for the Transaction and the
treatment of the proceeds. In particular,
we issued an information circular and held
a general meeting in September 2021 to
obtain approval for the Transaction and
issued another information circular and
held a further general meeting in April
2022 to obtain approval for the c.£500 million
special dividend and associated share
consolidation. We also issued a
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 94
STAKEHOLDER ENGAGEMENT CONTINUED
restatement document in October 2021
to assist investors in understanding the
accounting impact of the transaction,
including details of the framework under
which the future results of Tate & Lyle will
be reported, and restated comparative
information for the six months to 30
September 2020 and the year ended
31 March 2021.
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 suggestions to support our
efforts to build a broader shareholder
base in the UK and US, and expanding
disclosures on environmental, social and
governance (ESG) matters, 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).
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
2021, we were once again pleased to invite
shareholders to attend an in-person event.
Mindful of the ongoing Covid-19 pandemic
in addition to the general meeting itself, we
chose again to give shareholders the
opportunity to watch a presentation and
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.
We look forward to meeting shareholders
in person at our AGM in July. The details of
the 2022 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:
Jan 2022
Investor
roadshow
meetings
in the US –
by video
Feb 2022
Trading
statement
issued
Mar 2022
Investor
conferences
based in the
UK – by video
and in person
Dec 2021
Investor
conference
based in the
UK – by video
Purpose
booklet
published
Nov 2021
Half-year
results issued
Investor
roadshow
meetings –
by video and
in person
Investor
conference
based in the
US – by video
Sept 2021
Information
circular
published
relating to the
transaction
General
Meeting to
approve the
transaction
Investor
conferences
based in
the UK –
by video
Apr 2022
Information
circular
published
relating to
a proposed
special
dividend
and share
consolidation
General
Meeting to
approve
the special
dividend
and share
consolidation
May 2021
Full-year
results issued
June 2021
Investor
roadshow
meetings –
by video
Investor
conference
based in
France –
by video
Annual Report
published
July 2021
Announcement
of agreement
with KPS for
the sale of a
controlling
stake in
Primary
Products
business (the
transaction)
Audiocast
relating to the
transaction
Investor
roadshow
meetings in
respect of the
transaction
– by video
Audiocast
published in
support of
Annual General
Meeting
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 95
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 84, our corporate governance
structure from page 86, Board activities on
page 88 and stakeholder engagement from
page 90.
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 addition to reviews
of the business and enabling units
throughout the year. In 2021, the Board
spent significant time considering the
purpose, ambition and strategy of
Tate & Lyle after the sale of a controlling
stake in the Primary Products business in
the Americas to KPS Capital Partners, LP
(KPS), which was completed in April 2022
(see more below). In considering this the
Board focused on 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.
SALE OF CONTROLLING STAKE IN PRIMARY
PRODUCTS BUSINESS IN THE AMERICAS TO KPS
In approving this Transaction, which
created a joint venture business called
Primient, the Board was mindful of the
interests of a range of stakeholders,
including our employees, customers and
the potential benefits for our shareholders.
In particular, the Board considered that the
Transaction had the following benefits:
For shareholders, the Transaction:
– accelerates Tate & Lyle’s transformation
by creating a more focused business,
better positioned for growth
– creates potential for a re-rating of the
share price in line with value-added and
speciality ingredients companies
– allowed for a significant return of cash to
shareholders (in the form of the special
dividend which was paid in May 2022 and
associated share consolidation)
– creates a strong balance sheet for
further organic and M&A growth
opportunities
For customers, the Transaction:
– allows both Primient and Tate & Lyle to
focus their innovation efforts on serving
their respective customers’ needs
– allows each business to allocate capital
to drive their respective growth
strategies in service of their customers
– provides greater potential for more
creative partnerships such as over-the-
fence arrangements that might benefit
customers and geographical expansion
For employees and communities,
the Transaction:
– provides greater opportunities for
employees to grow and develop within
more focused organisations, each with
their own clear growth strategies
– will enable each business to continue
to serve the communities in which
they operate
For suppliers, the Transaction:
– creates the opportunity to participate
in the growth and development of both
companies.
DIVIDEND
The Board recognises the importance
of dividends to shareholders. The Board
approved an increase in the interim
dividend for the six months to
30 September of 0.2p to 9.0p per share.
In April 2022, the Board sought and
received approval to pay a special dividend
to shareholders of c.£500 million or
107p per share using part of the proceeds
from the sale of a controlling stake in
our Primary Products business in the
Americas. The Board considered that
returning funds to shareholders in this
way, while retaining the balance to invest
in growth, was in the best interests
of shareholders.
As previously described, following the
sale of a controlling stake in our Primary
Products business in the Americas,
future dividends will be rebased to
reflect the earnings base of the re-focused
Tate & Lyle. The pay-out ratio (excluding
any Primient earnings) is expected to be
maintained and the dividend per share
reduced by around 50%, before the impact
of the share consolidation. Following
payment of the special dividend of
c.£500 million and the associated share
consolidation which took place in May
2022, it is intended that a progressive
dividend policy will be maintained
(available on the website). Accordingly,
the Board recommends a final dividend
of 12.8p per share for approval by
shareholders at the Annual General Meeting.
As well as the cash dividend option,
shareholders are also offered a Dividend
Reinvestment Plan alternative.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 96
SECTION 172(1) STATEMENT CONTINUED
SUSTAINABILITY
The Board recognises the need for
businesses to play their part in reducing
global greenhouse gas emissions for the
benefit of all our stakeholders. That is why
the Board is fully supportive of the Group’s
sustainability targets and commitments
for 2030 aimed at reducing our
environmental impact; and was
particularly pleased that we were able to
eliminate the use of coal-based energy in
all our operations across the globe in 2021.
The Board also fully supports the
Company’s commitment to be carbon net
zero by 2050.
EQUITY, DIVERSITY AND INCLUSION
The Board of Tate & Lyle recognises
the importance of equity, diversity and
inclusion to all its stakeholders and for
the success of the Tate & Lyle business.
That is why in December 2021, Tate & Lyle
announced a new strategy for equity,
diversity and inclusion consisting of four
pillars – systems, talent, culture and
society and a new set of ambitious
targets and commitments spanning
each of these pillars over the next
eight years.
RESPONDING TO THE COVID-19 PANDEMIC
During the year, the Board continued to
monitor and engage in management’s
response to the Covid-19 pandemic.
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
In March 2022, we announced that we had
signed an agreement to acquire Quantum
Hi-Tech (Guangdong) Biological Co., Ltd
(Quantum), a leading prebiotic dietary fibre
business in China. The Board was mindful
of the positive impact this acquisition will
have on Tate & Lyle’s customers, in
particular in China and the wider Asia
region, as it will expand our ability to
provide added-fibre solutions for our
customers in those markets across a
range of categories including dairy,
beverages, bakery and nutrition (including
infant nutrition), and to meet growing
consumer interest in gut health.
In the 2021 financial year, we completed
the acquisition of two businesses in Asia;
Chaodee Modified Starch in Thailand and
Sweet Green Fields in China. During the
2022 financial year, the Board has taken an
active interest in the integration of these
businesses into Tate & Lyle to ensure that
they each operate within our framework of
standards and controls and in accordance
with our values and purpose for the benefit
of all our stakeholders. The Board will
continue to monitor their integration and
that of our latest acquisition, Quantum in
the 2023 financial year.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 97
OUR GOVERNANCE
STRUCTURE
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 2022, 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
78 to 81. Working within the governance
structure set out on page 86 and through
a programme of regular meetings with
agendas which focus on financial
performance, strategic initiatives,
sustainability, risk management, our
people and our 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 11.
B. PURPOSE, VALUES AND CULTURE:
The Board fully endorses Tate & Lyle’s
refreshed purpose of Transforming Lives
through the Science of Food. This purpose
informs our strategy, our values and our
culture and inspires our people. The
Board reviews workforce culture and
employee engagement through a series 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 19; workforce engagement see
page 92; Board oversight of culture see
page 93; and the work of the Audit
Committee see page 102.
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 102.
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 125.
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 84, the shareholder
engagement section on pages 93 and 94
and the Remuneration Committee Chair’s
introduction to the Directors’
Remuneration Report on page 108.
For information on our approach to
stakeholder engagement see from page
90. Our section 172(1) statement is set out
on page 95.
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 page 46.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
98
OUR GOVERNANCE STRUCTURE CONTINUED
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 78. For more
information, see meeting attendance in
the 2022 financial year on page 89.
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.
L. BOARD EVALUATION:
In the 2022 financial year, the Board
undertook an internally facilitated review,
in line with the UK Corporate Governance
Code guidance.
For more information, see the Board
evaluation on page 89.
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 89 and the Nominations Committee
Report from page 100.
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, Dawn Allen)
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.
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 will seek
re-election at the forthcoming AGM.
Tate & Lyle PLC Annual Report 2022
Membership of the Board and information
about individual Directors is set out from
page 78. The responsibilities of the
executive and non-executive directors are
described on page 87.
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
Chairs of the Audit and Remuneration
Committees also hold meetings without
the executive directors present at each
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.
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 100.
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 78 and the
Nominations Committee Report from
page 100.
GOVERNANCE 99
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 102.
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 108.
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.
For further information, see the Audit
Committee Report from page 102 and the
‘fair, balanced and understandable’
statement on page 107.
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 Risk
Report from page 68 and the Audit
Committee Report from page 102.
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 108.
Q. EXECUTIVE REMUNERATION:
The Directors’ Remuneration Policy was
approved by shareholders on 23 July
2020. In September 2021, shareholders
approved a change to the Directors’
Remuneration Policy to enable the
Remuneration Committee to set
performance requirements for the
vesting of awards under the long-term
incentive performance share plan (PSP)
which are not restricted to financial
performance conditions, but, following
good corporate governance, which also
include those linked to environmental,
social and governance metrics. The
revised Policy: (i) aligns with corporate
governance best practice; (ii) enables the
attraction and retention of executive
talent to deliver against the Group’s
strategy; and (iii) promotes the delivery of
the long-term strategy. As part of the
process for developing the Directors’
Remuneration Policy, including revisions
to the 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 113.
The full, revised, Directors’ Remuneration
Policy is available on the Company’s
website at www.tateandlyle.com.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 100
GOVERNANCE
NOMINATIONS
COMMITTEE REPORT:
CHAIR’S
INTRODUCTION
diversity in line, as a minimum, with
the recommendations of the Parker
Review. We are pleased that, at the time
of writing, our Board is 45% women and
18% from Black, Asian or non-white
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 in
2020 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 to 33% (at 31 March 2022).
From 1 April 2022, this target is being
expanded to leadership and management
roles, more than 500 people. At 1 April
2022, 42% of the top 500 managers in
Tate & Lyle were women. With Dawn’s
appointment in May 2022, 56% of the
Executive Committee are women.
PRIORITIES FOR THE YEAR AHEAD
As mentioned above, to assist and inform
our succession planning for the non-
executive directors in the context of the
new Tate & Lyle, we have engaged an
independent external consultant to
conduct a Board effectiveness and Board
composition review which will take place in
the last quarter of the 2023 financial year.
Also 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
This year, our focus will be on succession
planning for those non-executive directors
who will retire in the near term.
SUCCESSION PLANNING
Executive committee members
This year we combined continuing our
focus on long-term succession planning
for the executive directors with the need
to appoint a new Chief Financial Officer
following Vivid Sehgal’s departure. The
Nominations Committee supported Nick in
the search for a new Chief Financial Officer
and was delighted with the appointment
of Dawn Allen. The Committee was also
pleased to support the promotion of
Bill Magee to the Executive Committee.
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. John Cheung joined our Board
in January 2021. John has many years of
experience in nutrition, food and beverages
notably in China.
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.
Earlier this month, we welcomed
Dr Isabelle Esser to our Board. Isabelle’s
scientific expertise and extensive
technology leadership experience in our
markets will be of significant benefit to
the Board.
Over the next three years, three of our
non-executive directors: Paul Forman,
our Senior Independent Director, Sybella
Stanley, Chair of our Remuneration
Committee and Lars Frederiksen will
retire, as they each approach the nine-year
anniversary of their appointment to the
Board. In contemplation of the departure
of these distinguished colleagues, the
Nominations Committee will once again
turn its attention to Board composition and
succession planning for the Board and will
undertake another externally facilitated
review, as it did in 2018, to inform those
deliberations.
DIVERSITY AT AND BELOW THE BOARD
As I have said before, in a purpose-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. And, 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.
This year, the Nominations Committee
refreshed our Board Diversity Policy in
light of the revised targets set by the FTSE
Women Leaders Review and committed to
maintain, as a minimum, gender diversity
of at least 40% and non-white ethnic
Tate & Lyle PLC Annual Report 2022
101
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 four meetings during the
year. Attendance during the year is set out
on page 89.
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 internally
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 be non-executive succession
planning while continuing to review
executive director succession planning, and
succession planning for other members of
the executive management team.
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 Dawn Allen. The Committee also
considered and approved the appointment
of Dr Isabelle Esser. MWM Consulting
assisted in the appointment of Dr Esser.
Both MWM and Russell Reynolds which
assisted in the search for Dawn Allen
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
promotion of Bill Magee to the Executive
Committee as President, Food & Beverage
Solutions, North 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.
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, 40% gender diversity and
ethnic representation in line with the
targets set out in the Parker Review.
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 experience, 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 (five Directors)
equates to 45% of the Board and
representation from Black, Asian or
non-white ethnically diverse groups
is 18%.
GENDER DIVERSITY OF SENIOR
MANAGEMENT AND THEIR DIRECT REPORTS1
As at 8 June 2022
39
Men
Women
48
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.
We continue to build
a Board and senior
leadership team which
is diverse in terms of
gender, nationality,
ethnicity and experience.
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 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
establishment of a team to progress
equity, diversity and inclusion across
the business.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 102
GOVERNANCE
AUDIT COMMITTEE
REPORT: CHAIR’S
INTRODUCTION
A significant area of focus for the Committee this
year was the impact of the sale of a controlling
interest in our Primary Products business in the
Americas to KPS.
INTRODUCTION
I am pleased to present the work of the
Committee during the year. My Committee
colleagues and I enjoyed the opportunity
to meet in person on some occasions,
although we have and will continue
to conduct some meetings via video
conference. As described below, a
significant area of focus for the Committee
this year was the impact of the sale of
a controlling interest in our Primary
Products business in the Americas to KPS.
In discharging its duties this year, the
Committee was mindful that the Group
was without a Chief Financial Officer
for a significant part of the financial year.
Accordingly, I (and members of the
Committee) spent additional time outside
the formal meeting cycle with the Group
Financial Controller and the senior
financial leader of the Food & Beverage
Solutions business to provide support and
guidance, where appropriate.
As in previous years, I continued to engage
with a significant number of stakeholders,
including the Group Audit and Assurance
(internal audit) function, senior management
and the external auditor (EY) to ensure
our processes and controls were not
impacted by the ongoing pandemic
(and working from home arrangements)
or by the Primary Products Transaction.
Conscious of ongoing restrictions in
China due to the Covid-19 pandemic,
the Committee also kept a focus on the
operation of the risks and controls
framework in our business there.
The Committee and I were reassured
that the Company continued to operate
robust processes and controls throughout
the year.
As the crisis in Ukraine unfolded, the
Committee engaged with management
on the impact of the crisis including on
our people in our shared services centre
in Łód´z, Poland.
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
104), we continued with our practice of
looking in particular depth at certain
aspects of the control environment.
During the year, we met leaders from
the Group Tax and Treasury teams and
undertook in-depth reviews into each of
their functions.
The Committee also received updates on
the work of the Group Audit and Assurance
team, Ethics and Compliance, IT and cyber
risks, data privacy management and the
Finance talent management programme.
The Committee continued to monitor the
implementation of Tate & Lyle’s controls,
processes and ethics and compliance
programme into our recently acquired
businesses, Sweet Green Fields and
Chaodee Modified Starch Co., Ltd. The
Committee will continue to monitor the
integration of these businesses including
the integration of Quantum Hi-Tech
(Guangdong) Biological Co., Ltd (Quantum).
This was a year in which the business
undertook two major transactions: the
Primary Products Transaction and the
agreement to acquire Quantum. The
Committee held an additional meeting to
review and understand the implications of
the Primary Products transaction for the
Group’s accounting, to consider the size
and mechanics of a return to shareholders
of a portion of the proceeds from the
transaction in the form of a special
dividend and associated share consolidation,
and also to understand the steps
management were taking to mitigate the
risks of separating the Primary Products
business in the Americas from the
remaining Tate & Lyle business. The
Committee was reassured by management
and the external auditor that the Company
continued to operate robust processes and
controls throughout this period. The
Committee and the Board would like to
thank the teams for their commitment and
resilience during this exceptional year.
I would also like to thank my fellow
colleagues on the Committee for their
support during the year.
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 spending more time with our
colleagues in person and visiting our sites
in the coming year.
I hope that you find this report useful
in understanding our work in the past year
and I welcome any comments from
shareholders on my report.
WARREN TUCKER
Chair of the Audit Committee
Tate & Lyle PLC Annual Report 2022
103
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.
Composition
The Committee currently comprises five
independent Directors: Warren Tucker
(Chair), John Cheung, Paul Forman, Kim
Nelson and Sybella Stanley.
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
and one additional meeting to discuss
the accounting impact of the Primary
Products Transaction, as described above.
Attendance during the year is set out on
page 89. The Committee has also met once
since the end of the financial year and prior
to the signing of this Annual Report.
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
internally 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 maintained its focus
on four main areas: financial reporting;
oversight of the external auditor; oversight
of the internal audit function; and internal
control and risk management. During this
financial year, the Committee paid close
attention to certain matters relating to the
Primary Products Transaction. As part
of this, the Committee reviewed the
document published in October 2021 that
set out the restatement of the prior year
financial information to show the impact
of disclosing the disposed Primary
Products business as a discontinued
operation together with proforma
financial information illustrating the
effect of the Primary Products transaction
on the Company’s historical financial
reporting. The Committee also considered
other accounting judgements applied to
the Primary Products business as well
as the use of proceeds from the
transaction, the special dividend and
associated share consolidation.
The Committee also took a close interest
in the management of finance and IS/IT
risks associated with the separation of the
Primary Products business from the
remaining Tate & Lyle business in advance
of the close of the Transaction, receiving
progress reports from management at
each meeting.
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 104. Papers on the
Group’s existing and emerging litigation
risks were also considered.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 104
AUDIT COMMITTEE REPORT CONTINUED
SIGNIFICANT MATTERS RELATING TO THE FINANCIAL STATEMENTS CONSIDERED BY THE COMMITTEE
AREA
BACKGROUND
COMMITTEE’S ACTIVITIES AND CONCLUSION
Sale of controlling
stake in Primary
Products (the
Primary Products
transaction)
In July 2021, we entered into an agreement to sell a
controlling stake in the Primary Products business
in the Americas to KPS. The sale closed immediately
after the end of the financial year. See pages 16 and 17
for further information.
Commodity
accounting
Within our discontinued Primary Products business,
we used 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 could have a
material impact on the reported results of the Group.
Exceptional items We exclude from certain of 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 to local tax
authorities and reassess these 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 accounting treatment of the
proposed sale. In particular, it considered the accounting
impact of the classification of Primient as held for sale and a
discontinued operation. It also considered the use of proceeds
from the Transaction and the mechanism for returning those
proceeds to shareholders by way of a special dividend and
associated share consolidation.
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 also reviewed in detail how
commodity accounting for Tate & Lyle in the 2023 financial year
will change in light of the disposal of the Primary Products
business, including within its 49.9% interest in Primient.
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 39.
The Committee reviewed the key judgements made in
estimating the Group’s tax charge along with the key
disclosures, set out on page 40 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.
In addition, the Committee considered the implications of
the Primary Products Transaction on the Group’s tax position
including the cash tax payable on the disposal, non-cash
exceptional and other tax charges.
In the previous financial year, Tate & Lyle acquired Sweet
Green Fields and a majority shareholding in Chaodee
Modified Starch Co.
The Committee monitors the implementation of Tate & Lyle’s
controls, processes and ethics and compliance programme into
new businesses acquired by the Group.
We test all goodwill for impairment annually and,
additionally, as required 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 and the Primary Products Transaction
on such assessments.
Management concluded that there was significant headroom
in its goodwill impairment reviews and, accordingly, no
impairments were required on the Food & Beverage Solutions
cash generating unit. Management also concluded that no
impairment was required for any held for sale assets (including
goodwill) as proceeds from the Primary Products Transaction
exceeded the carrying value of these assets. Impairment
reviews were also undertaken on other assets and concluded
that any impairments recorded were appropriate. The
Committee agreed with these conclusions.
The disclosure is set out in Note 19.
Taxation
Integration
of new
acquisitions
Impairment
reviews
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 105
FOCUS AREAS FOR THE AUDIT COMMITTEE IN
THE 2023 FINANCIAL YEAR
In addition to the recurring matters on
the Committee’s rolling calendar, the
Committee will focus on (i) the integration
into our controls framework of our recent
acquisitions; (ii) continued enhancements
to the risk and controls matrix; and (iii)
talent management and succession
planning in the Finance function. The
Committee will continue to carry out deep
dives into our Food & Beverage Solutions
business, both at Group functional level
and at a regional level, on a rotational
basis. In addition, the Committee will
review the effectiveness of new controls
which will operate in relation to certain
aspects of the long-term agreements
between Tate & Lyle and Primient.
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 by the Company. Under our
policy on non-audit services, the Chief
Financial Officer has authority to approve
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
£3.1 million, including £0.4 million of
one-off audit fees in relation to the Primary
Products Transaction. In addition, the fee
for the Group’s half-year review was
£0.1 million, which is included as a
non-audit service in accordance wth
standard practice. The Group incurred
a further £1.1 million of non-audit costs
specific to the transaction, including
£0.5 million for work as Reporting
Accountant, £0.1 million for other
assurance work associated with the
Class 1 Circular and £0.5 million for a
non-statutory audit required under the
terms of financing agreements for the
disposed Primary Products business.
Fees paid in respect of non-audit services
therefore comprised 33% 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 EY’s 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
2021 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.
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 2021 financial year was
effective and that EY provided independent
challenge to management. Areas of focus
were identified for the 2022 financial year.
The Committee will formally assess EY’s
performance in relation to the 2022 audit
following its completion.
Tenure
EY was appointed the Group’s external
auditor at the Company’s AGM in 2018 for
the financial year ended 31 March 2019
following a formal tender process. Subject
to EY’s continuing satisfactory performance,
we anticipate approving the appointment
of a successor to Lloyd Brown as EY lead
audit partner when he rotates off the
engagement 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 2023 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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 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 2022 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 2022. The Board then
discussed the output at its meeting in
May 2022.
The 2022 review covered material
financial, operational and compliance
controls, our values and behaviours, and
the risk management process. The review
included an independent analysis of the
questionnaires and representation letters
completed by management to ensure 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 Board recognises that the risk profile
of the Group will change as a result of the
Primary Products transaction and will
conduct a further detailed review of the
Group’s principal risks and risk appetite
during the course of the financial year.
The Group’s going concern and Viability
Statement disclosures are set out in
the Strategic Report on pages 42 and
70 respectively.
106
AUDIT COMMITTEE REPORT CONTINUED
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 London, Chicago,
Poland and Singapore. 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
providing assurance on the management
of risks, including finance and IS/IT risks,
associated with the separation of the
Primary Products business, key financial
controls given the disruption to working
practices due to the ongoing Covid-19
pandemic and 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, it was possible to
conduct some audits in person again
although many 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 75. 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, the Enterprise Risk
Manager presented to the Audit Committee
on risk process enhancements made over
the previous 12 months and planned
improvements to enhance the risk process
over the following 12-month period. He
also presented the risk management plan
for calendar year 2022.
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 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
business unit and its results for the
period. The results of this financial
disclosure process are reported to the
Audit Committee.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 107
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 108
GOVERNANCE
DIRECTORS’ REMUNERATION
REPORT: CHAIR’S
INTRODUCTION
The Committee reflected on the remuneration
outcomes in the context of the value created for
shareholders in a year of major strategic change
and good financial performance for the Group.
DELIVERING OUR STRATEGY
As you will have read in the introductory
statements in this Annual Report, it has
been a landmark year for Tate & Lyle. With
the sale of a controlling stake in the Primary
Products business in the Americas, now
called ‘Primient’, to KPS Capital Partners,
LP (KPS) (the ‘Transaction’), Tate & Lyle has
been repositioned as a leading global
speciality food and beverage solutions
business. The Transaction, which was
announced on 12 July 2021 and approved
by 99.9% of ordinary shareholders who
voted at a general meeting on 30 September
2021, was completed on 1 April 2022 and
represents a major strategic milestone in
unlocking potential growth opportunities
for both Tate & Lyle and Primient.
The separation into two standalone
businesses – Tate & Lyle and Primient – was
a demanding project which took many
months to execute. As a Board we are very
grateful to the management team and the
broader workforce, who demonstrated
great resilience and commitment to ensure
the successful completion of this complex
transaction. The sense of achievement is all
the greater as it was delivered alongside our
priorities for the year, to: look after our
colleagues and communities through the
continuing Covid-19 pandemic; keep our
customers served and strengthen our
relationships with them; maintain our
financial strength; and continue our
strategic progress, particularly through
New Product growth and acquisitions.
REFLECTING ON OUR FINANCIAL PERFORMANCE
AS CONTEXT FOR REMUNERATION OUTCOMES
Consistent with our practice in prior years,
and with established principles,
performance targets for annual and
long-term incentive plans were set at the
start of the relevant performance period.
Tate & Lyle PLC Annual Report 2022
In practical terms these had to be set with
reference to the Group as it was before the
Transaction was announced. As noted
earlier in this Annual Report, the
Transaction means that our financial
reporting and headline financial key
performance indicators (KPIs) have been
split into ‘continuing’, ‘discontinued’ and
‘total’ operations. Performance and
remuneration outcomes for executive
directors reflect the performance of the
Group as a whole (total operations) for the
full financial year and therefore may not
align with headline KPIs set out elsewhere
in this Annual Report.
The Committee has also reflected on the
financial health and performance of both
the Group and the continuing operations
(new Tate & Lyle), to ensure that
remuneration outcomes are appropriate
in this broader context – and is pleased to
report positive momentum across our
KPIs as well as clear strategic progress
(see headlines opposite).
FOCUS ON SUSTAINABILITY
We live our purpose of Transforming Lives
through the Science of Food through three
pillars: Supporting Healthy Living, Building
Thriving Communities and Caring for our
Planet. In May 2020, we announced
long-term targets and commitments
linked to these three purpose pillars.
Our performance against these targets (as
described on pages 30 and 56) has formed
part of the bonus assessment; and following
shareholder consultation and approval in
2021, four of these purpose targets will also
be reflected in our long-term (Performance
Share Plan) awards from 2021.
We have made good progress against
these purpose targets and commitments.
For example, in the last two years we have
FINANCIAL PERFORMANCE HIGHLIGHTS:
Continuing operations
(New Tate & Lyle)
– Revenue growth +18%; adjusted
operating profit before tax +14%
– Positive momentum in Food &
Beverage Solutions: +5% volume;
+19% revenue growth, double-digit
organic growth across all regions;
+7% adjusted operating profit
£160 million
– Acceleration in New Product
revenue growth of +35%
– Good progress in purpose-linked
sustainability programme
Discontinued operations (Primient)
– Volume flat; adjusted profit after
tax (9)% lower
– Sweeteners & Starches profit
(42)% lower
– Commodities profit 52% higher in
an exceptionally strong market
STRATEGIC PROGRESS:
(New Tate & Lyle)
– Integration of two businesses
acquired in 2021 financial year
progressing well
– Agreement to acquire leading
dietary fibre business in China:
Quantum Hi-Tech (Guangdong)
Biological Co., Ltd. (Quantum)
significantly strengthening our
fortification platform
– 10 New Products and more than
30 stevia sweetener solutions
launched from innovation pipeline
delivered a 12% reduction in Scope 1 and 2
absolute greenhouse gas emissions in our
total operations and in October 2021 we
eliminated the use of coal in all our
operations four years ahead of schedule.
The Board is currently reviewing
appropriate future environment, social
and governance (ESG) targets for new
Tate & Lyle reflecting the changes in our
operational footprint. We are being
supported in this work by sustainability
specialists, AECOM.
109
OUR PEOPLE
We are very grateful to our employees for
the commitment and resilience they have
shown to serve our customers through the
pandemic and to separate the Group into
two standalone businesses – new
Tate & Lyle and Primient.
As we closed the year, the executive team
and the Committee have been particularly
aware of the recent rise in the cost of living
for our employees. We had preserved
normal employee salary increases
throughout the pandemic (except for a
salary freeze for management roles in
2020) and the salary review at 1 April 2022
was fully reflective of the latest available
inflation information.
Additionally, in the context of our financial
and strategic performance, including
performance against our purpose targets
described above, we continue to recognise
the majority of our employees with at least
six months’ service through some form
of discretionary reward or recognition for
the year.
SHAREHOLDER SUPPORT FOR OUR POLICY AND
GOVERNANCE OF EXECUTIVE PAY
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 received 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 the
equivalent of 10% of salary, so that
benefits are in line with the rate
available to the wider UK workforce
from 1 April 2021.
– In September 2021, following
consultation, shareholders approved an
amendment to Policy (with a vote of 99%
FOR) to enable the adoption of
environmental, social and governance
(ESG) metrics into our performance share
plan (PSP); and we have also adopted
relative Total Shareholder Return (TSR)
performance into our PSP from 2021 to
demonstrate our commitment to
long-term value creation (see page 121).
EXECUTIVE DIRECTOR CHANGES IN THE YEAR
Vivid Sehgal stepped down from the Board,
as announced on 3 November 2021 and
ceased employment with the Company on
31 December 2021. Vivid’s remuneration is
therefore limited to fixed elements only.
We are very pleased to welcome Dawn
Allen who joined the Board as Chief
Financial Officer on 16 May 2022. Further
details of Dawn’s remuneration are set out
on page 117.
ASSESSMENT OF PERFORMANCE IN THE
CONTEXT OF THE PRIMIENT TRANSACTION
As noted earlier, the targets for the annual
and long-term incentives were set at the
start of their relative performance periods
and before the Transaction to create two
new businesses, the new Tate & Lyle and
Priment, was announced. The Committee
has, therefore, looked to ensure that the
outcomes are assessed on a fair basis to
ensure management did not benefit from,
nor were they penalised as a consequence
of, the Transaction. Where it has been
appropriate to make adjustments to achieve
this, the Committee has been supported in
its assessment by the Audit Committee. In
this context, the Committee took particular
note of the fact that the Transaction closed
on 1 April 2022, contemporaneous with the
year end, and that this had a direct impact on
a number of financial KPI outcomes. The
impact of the timing of the Transaction was
most pronounced on cash flow (a KPI for
20% of the annual incentive) where, for
instance, working capital increased in what
became the Primient business. This was
recognised in the payment received on
completion of the Transaction by the Group,
which occurred just after year-end. In
addition, ahead of closing the Transaction,
the Group took certain actions with respect
to inventory balances in the continuing
business and customer invoicing to support
the successful closing of the Transaction
and to ensure continuity of operations and
supply. These activities negatively impacted
working capital and cash flow in the final
month of the financial year in the continuing
business. Together these factors resulted in
an increase in working capital at the
year-end which was only caused by the
actions taken to ensure the Transaction
completed smoothly.
Having assessed the relevant factors, the
Committee is satisfied that overall outcomes
for the year are appropriate in the context of
strong operational and financial
performance of the business and clear
strategic progress. The outcomes are
summarised below:
– Annual bonus plan: the CEO bonus award
at 67% of maximum (as described on page
119) reflects strong Food & Beverage
Solutions net sales growth; total Group
operating profit at ‘target’; and adjusted
cash flow at below ‘target’ level, relative
to stretching targets set at the start of the
year; as well as strong progress against
strategic non-financial targets, including
performance against our purpose and
sustainability commitments. The
outcomes for the bonus plan reflect the
Committee’s judgement and assessment
of cash flow performance (as descibed
above) taking account of the impact of the
timing of closing the Transaction.
– Performance Share Plan (PSP): awards
made in 2019 will vest at 42% of maximum
(as described on page 121) reflecting: (i)
adjusted return on capital employed in the
period to 31 March 2022 of 16.1% and (ii)
Food & Beverage Solutions volume
growth of 3.4%; while (iii) growth in Group
Adjusted Earnings Per Share before tax
was below the level required for that
element to vest.
Total Director remuneration is therefore at
around a ‘target’ policy level overall (and
notably lower than the prior year).
KEY SECTIONS OF THIS REPORT
110 At a glance
112 The Remuneration Committee
113 Remuneration Policy
114 Context for executive remuneration
116 Remuneration framework and key
principles
117 Executive Director changes
117 Fixed elements of Directors’ pay
118 Annual bonus
121 Long-term incentives
125 Directors’ share interests
126 Single figure table
Having reviewed these outcomes, the
Committee believes these are appropriate in
the context of the performance achieved for
the Group (taking account of the targets set
at the start of the year), and in the context of
the progress against our strategic objectives
and the re-positioned new Tate & Lyle with
the enhanced value proposition we have
created for all shareholders.
IMPACT OF THE SPECIAL DIVIDEND AND SHARE
CONSOLIDATION ON SHARE AWARDS
Following completion of the Transaction,
a return of capital by way of a special
dividend was approved by shareholders on
26 April 2022. This was accompanied by an
associated share consolidation, intended to
preserve the market value of a share pre
and post the special dividend, (as explained
in the shareholder circular). The Committee
gave careful consideration to the
appropriate treatment of share incentive
participants (which extend to a broader
management group beyond executive
directors) in the context of the special
dividend and share consolidation. As these
participants did not receive the special
dividend, and the intention of the share
consolidation was to maintain equivalent
market value of a share pre and post the
special dividend, the Committee confirmed
(having taken advice on the prevailing
market practice) that awards should
remain in effect over the original number
of shares (allowing the special dividend
and the share consolidation to offset
one another).
CONCLUDING REMARKS
The Committee is satisfied that, at the time
of writing, our Policy will continue to
provide for a strong alignment between
the performance of Tate & Lyle and the
remuneration of the Executive Directors.
A resolution to approve the Remuneration
Report will be proposed at the AGM on
28 July 2022.
In closing, I would like to thank Anne Minto
for her stewardship of the Committee
before I assumed the chair following the
2021 AGM; and my fellow members of the
Committee for their diligence and
engagement through the year, particularly
regarding the additional matters we have
considered in relation to the Transaction.
SYBELLA STANLEY
Remuneration Committee Chair
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 110
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 – 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 2022?
Annual bonus metrics
Rewards achievement of annual performance objectives:
Performance share plan awards vesting in 2022
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
40% Adjusted Group ROCE on
total operations
40% Adjusted Group EPS CAGR
from total operations
20% F&BS volume CAGR
PERFORMANCE
SHARE PLAN
– 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 2022?
Food & Beverage
Solutions volume
Food & Beverage
Solutions revenue
+5%
+19%
£1,212m
Adjusted profit
before tax –
continuing
operations
+14%
£145m
Adjusted diluted
earnings
per share (EPS) –
total operations
-4%
56.0p
Adjusted free cash
flow – continuing
operations
-£81m
£72m
Group return
on capital
employed (ROCE) –
total operations
-240bps
14.9%
The adjusted results for the year ended 31 March 2022 have been adjusted to exclude exceptional items, amortisation of acquired intangible assets, the tax on those adjustments and tax
items that are themselves exceptional. A reconciliation of statutory and adjusted information is included in Note 4 to the Financial Statements. Growth percentages are calculated on
unrounded numbers and are in constant currency.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE
HOW DID ACTUAL PERFORMANCE COMPARE TO THE PERFORMANCE-RELATED PAY TARGETS?
Annual bonus
METRICS
Actual
THRESHOLD
TARGET
STRETCH
Group adjusted operating profit before tax, exceptional items,
amortisation and net retirement benefit interest (40%)
Food & Beverage Solutions net sales (20%)
309
1,431
324
324
338
1,530
1,560
1,691
100%
111
OUTCOME
(% OF MAX)
50%
Group adjusted operating cash flow (20%)
281
292
296
311
Non-financial personal and strategic
performance (20%)
Overall outcome annual bonus (% of max)
50%
90%
100%
50%
67%
100%
Performance share plan awards made in 2019
vesting in 2022
Actual
METRICS
THRESHOLD
TARGET
STRETCH
Adjusted Group ROCE on total operations (40%)
13%
16.1%
Adjusted Group EPS CAGR total operations (40%)
1.9%
5%
Food & Beverage Solutions volume CAGR (20%)
Overall outcome annual bonus (% of max)
2%
15%
3.4%
42%
17%
10%
6%
100%
REMUNERATION OUTCOMES VS POLICY SCENARIOS FOR THE YEAR ENDED 31 MARCH 2022
Chief Executive – Nick Hampton
Chief Financial Officer – Vivid Sehgal
40%
90%
67%
OUTCOME
(% OF MAX)
33%
0%
9%
42%
£3,887
53%
26%
21%
£2,346
44%
22%
34%
Target
Stretch
£2,409
38%
29%
33%
FY22
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
£805
100%
Below
threshold
Base and Benefits
Annual Bonus
Performance Share Plan
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
£559
100%
Below
threshold
£2,697
53%
26%
21%
£1,628
44%
22%
34%
Target
Stretch
£419
100%
FY22
actual
SUSTAINABILITY PERFORMANCE IN 2022
THE YEAR AHEAD
Total operations
Scope 1 and 2
greenhouse gas
emissions
reduction
-12%
Beneficial use
of waste
Water use
intensity
83%
+3%
See pages 30 and 56 for more detail and how performance links to our 2030 targets.
2021 Policy amendment reflected changes to:
– Performance Share Plan awards - to enable the adoption of
non-financial metrics (ESG, sustainability and purpose-related)
in respect of up to 20% of each award.
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 our long-
term ambition, generating returns for shareholders, and value
creation for our broader stakeholders.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
112
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 2022 AGM
A resolution to approve this Annual Report on Remuneration will be proposed at the AGM on 28 July 2022.
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 (Committee
Chair until 29 July 2021 when she stepped down from the Board), Sybella Stanley (became Committee Chair from 29 July 2021), Lars
Frederiksen, Warren Tucker and Patrícia Corsi (from joining the Board on 1 May 2021). Dr Isabelle Esser joined the Committee with
effect from 1 June 2022. The Company Secretary serves as secretary to the Committee. Membership and attendance during the year
are set out on page 89.
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 five 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 internally 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 £34,750 for the year ended 31 March
2022, with fees charged on a time incurred basis. During the year ended 31 March 2022, Deloitte LLP also provided unrelated services
to the rest of the Group in respect of corporate finance, consulting, tax and compliance.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 113
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 110 and 111. 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 environmental, sustainability and corporate responsibility matters are specific factors that the Committee may factor into decisions
on pay and annual incentive plan outcomes. Malus and clawback 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.
Directors’ Remuneration Policy (Policy) was approved by shareholders at the AGM on 23 July 2020 (with 97% of votes cast to support the
resolution), and an amendment to the Policy was approved by shareholders on 30 September 2021 (with 99% of votes cast to support the
resolution) to enable the adoption of non-financial ESG metrics to be included for PSP awards from 2021, as described on page 121. The
full Policy, incorporating that amendment, is available on the Company’s website (www.tateandlyle.com/investors-hub).
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 and an amendment was approved on 30 September
2021. The last Annual Report on Remuneration was approved by shareholders at the AGM on 29 July 2021. The following voting
outcomes were disclosed after the relevant AGM:
RESOLUTION
Directors’ Remuneration Policy – 23 July 2020
Annual Report on Remuneration – 29 July 2021
TOTAL FOR
(NUMBER OF VOTES)
333,350,795
334,425,571
% OF VOTE
97.24%
96.48%
TOTAL AGAINST
(NUMBER OF
VOTES)
9,474,353
12,211,637
Amendment Directors’ Remuneration Policy – 30 September
2021
337,351,740
99.29%
2,427,714
1 Votes withheld are not counted in the calculation of the proportion of votes for or against a resolution.
VOTES
WITHHELD1
(NUMBER OF
VOTES)
1,515,345
1,704,959
92,074
% OF VOTE
2.76%
3.52%
0.71%
IMPLEMENTATION OF THE REMUNERATION POLICY IN THE FINANCIAL YEAR ENDING 31 MARCH 2023
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, subsequent to the amendment approved by
shareholders in September 2021, and we intend to operate within this Policy in the year ahead.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 114
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 in the UK and only c.5% 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 total 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 2013.
Tate & Lyle PLC (Ordinary Shares)
FTSE 100
FTSE 250
250
200
150
100
50
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
31 MARCH
2022
Chief Executive’s1 total remuneration (£000s per single figure table)
Nick Hampton
Javed Ahmed
Annual bonus (% of max)
LTI vesting (% of max)
n/a
5 367
18%
100%
n/a
2 728
1.6%
67.7%
n/a
996
0%
0%
n/a
2 139
77%
10.9%
n/a
3 239
80%
50%
n/a
3 672
72%
100%
3 045
n/a
53%
75%
2 499
n/a
78%
62.5%
3 246
n/a
90%
57.3%
2 409
n/a
67%
42%
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.
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 for the year ended
31 March 2022 vs year ended 31 March 2021.
2022 v 2021
Salary/fees
Benefits3
Bonus3
DR GERRY
MURPHY
NICK
HAMPTON
VIVID
SEHGAL
JOHN
CHEUNG
PAUL
FORMAN
LARS
FREDERIKSEN
ANNE
MINTO
KIMBERLY
NELSON
SYBELLA
STANLEY
WARREN
TUCKER
PATRICIA
CORSI2
AVERAGE
EMPLOYEE
0%
n/a
n/a
3%
-20%7
-24%
0%
0%
0%
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
13%4
n/a
n/a
0%
n/a
n/a
n/a
n/a
n/a
3%5
-1.2%6
-14%
1 Figures for Directors are consistent with the values shown in the Single Figure table (see page 126 for explanatory notes).
2 Patrícia Corsi joined the Board during the year, so there is no prior year comparison.
3 The Chair and non-executive directors do not receive benefits nor participate in bonus arrangements.
4 Fee increases for Sybella Stanley were due to changes in Board responsibilities when she became the Remuneration Committee Chair on 29 July 2021.
5 The salary review process ran as normal this financial 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.
7 CEO retirement benefits reduced to 15% of salary to align with the wider employee population from 1 April 2021.
The table below shows the percentage change in remuneration of Directors1 and the broader employee population for the year ended
31 March 2021 vs year ended 31 March 2020.
2021 v 2020
Salary/fees
Benefits2
Bonus2
DR GERRY
MURPHY
NICK
HAMPTON
IMRAN
NAWAZ
VIVID
SEHGAL1
JOHN
CHEUNG1
PAUL
FORMAN
LARS
FREDERIKSEN
ANNE
MINTO
KIMBERLY
NELSON
DR AJAI
PURI
SYBELLA
STANLEY
WARREN
TUCKER
AVERAGE
EMPLOYEE
0%
n/a
n/a
0%
0%
0% -88%6
15% -100%6
n/a
n/a
n/a
n/a
n/a
n/a
5% 3
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% 3
n/a
n/a
0-3%4
-8%5
18%
1 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.
2 The Chair and non-executive directors do not receive benefits nor participate in bonus arrangements.
3 Fee increases for Paul Forman and Warren Tucker were due to changes in Board responsibilities.
4
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.
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.
Imran Nawaz – stepped down as a director on 31 March 2021 and left employment on 30 April 2021.
5
6
RELATIVE IMPORTANCE OF SPEND ON PAY
Remuneration paid to or receivable by employees of the Group (total operations)
Distributions to shareholders (by way of dividend and purchase of ordinary shares)
YEAR ENDED
31 MARCH 2022
YEAR ENDED
31 MARCH 2021
£360m
£149m
£347m
£137m
% CHANGE
4%
9%
Tate & Lyle PLC Annual Report 2022
GOVERNANCE
115
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 £144 million up from the prior year £137 million,
this excludes the special dividend payment that will be reported in our financial year ended 31 March 2023. The purchase of shares to
satisfy share incentive awards in the current year to 31 March 2022 was £5 million, the purchase of shares for the prior year £nil. See
Notes 13 and 22 for further information.
UK 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 48 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 have reported on the ratio of CEO pay to UK
employee pay since 2019. Data representing employees at the ‘median’, ‘upper’ and ‘lower’ quartiles are as follows:
CEO PAY RATIO VS UK EMPLOYEES
YEAR
2022 – pay ratio (total compensation)
2022 – representative employee salary
2022 – representative employee total compensation
2021 – pay ratio (total compensation)
2020 – pay ratio (total compensation)
2019 – pay ratio (total compensation)
LOWER
QUARTILE
49x
£20,621
£48,748
71x
55x
74x
MEDIAN
25x
£60,825
£97,860
37x
27x
39x
UPPER
QUARTILE
14x
£108,446
£175,464
21x
13x
20x
In the table above, total compensation has been calculated for all UK employees individually as at 31 March 2022 in a consistent manner
for comparison with the CEO ‘single figure’ total compensation figure in the table on page 126, 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 25x has decreased and is the lowest figure reported to date. The overall ratio is
driven primarily by performance-related (incentive) outcomes, the value of which is greater for Executive Directors than employees, and
the reduction in the ratio this year reflects lower overall CEO remuneration for the year (with variable pay outcomes at around ‘target’).
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.
We consulted with a broad group of our largest shareholders on an amendment to our Policy in connection with the Transaction, to
enable the adoption of non-financial (ESG, sustainability and purpose-related) targets (in respect of up to 20% of each award) alongside
the introduction of relative TSR performance and retaining key financial key performance metrics. Shareholders approved this
amendment to our policy on 30 September 2021 (with more than 99% of votes cast in approval). Details of these changes are on page 121.
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 116) are 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. The Committee did not consult directly with employees on Directors’
remuneration, however developed the policy for Executive Directors with an understanding and clear oversight of remuneration for the
wider workforce. The Chair and other members of the Board enjoy engagement opportunities from time to time with employees across
the Company, where employees are provided updates on the Company and its performance and are encouraged to ask questions about
the Company, which may include questions on management and remuneration.
General employee salary increases were preserved throughout the pandemic except for a salary freeze for management roles in 2020.
Management and the Committee have been mindful of the prevailing inflationary and cost of living challenges in many of the countries in
which we operate when reviewing the level of salary increases to take effect from 1 April 2022.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 116
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
– 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
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
– 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
clawback provisions.
OVERVIEW OF EXECUTIVE DIRECTOR REMUNERATION FRAMEWORK FOR THE YEAR ENDED 31 MARCH 2022 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, following consultation with shareholders. Reductions in the maximum
bonus opportunity and to the Executive Director pension benefits to align with the UK workforce from 1 April 2021, were adopted into
the Remuneration Policy approved at the 2020 AGM. An amendment to the Directors’ Renumeration Policy was approved in September
2021 to permit up to 20% of Performance Share Plan awards from 2021 to be linked to Environmental, Sustainability and Governance
(ESG) metrics.
BASE SALARY AND EMPLOYMENT BENEFITS
– Fixed compensation
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
Awards made in 2019 and 2020:
– 40% Group adjusted EPS
– 20% Food & Beverage Solutions1 volume
– 40% Group adjusted ROCE
SHAREHOLDING REQUIREMENTS
– Chief Executive – 4 times salary
– Chief Financial Officer – 3 times salary
MALUS AND CLAWBACK PROVISIONS
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 are aligned to the rate available to the UK workforce
Rewards achievement against annual performance objectives:
– Target bonus is 75% of salary; maximum cash bonus is 100% of salary
– Maximum opportunity is 150% of salary
– Any award over 100% is paid in shares, deferred for two years, subject to clawback
– 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
For the year ahead, the Food & Beverage Solutions net sales metric will be replaced with Group
net sales.
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-year total.
Conditions for awards made from 2021 include the adoption of non-financial (ESG, sustainability and
purpose-related) targets as well as ‘total shareholder return’ relative to an identified peer group,
following shareholder consultation and approval (as described on page 121).
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).
Key: Number of years:
Performance period
1 Food & Beverage Solutions metrics relate to the reportable segment.
Deferral/holding period
Ongoing requirements
Apply for two years after a bonus award or vesting of PSP awards.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE
117
EXECUTIVE DIRECTOR CHANGES
VIVID SEHGAL – RESIGNED AS CHIEF FINANCIAL OFFICER
Vivid Sehgal left Tate & Lyle stepping down from the Board on 3 November 2021 and ceased employment on 31 December 2021.
The Committee recognises Vivid’s contribution to the business during his tenure. However, under the terms of his appointment, variable
pay awards were forfeited on cessation of employment.
DAWN ALLEN – APPOINTED AS CHIEF FINANCIAL OFFICER
As announced on 9 February 2022, Dawn Allen joined the Board on 16 May 2022 and became Chief Financial Officer. Dawn 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.
Dawn participates in the Executive Director incentive arrangements applicable under our Policy from her commencement date.
As described in the announcement, to compensate Dawn for incentive awards that she forfeited at Mars Incorporated, Tate & Lyle will
make her two performance-based Awards over Tate & Lyle shares: (i) an Award with a headline value of £785,000 which will be capable
of vesting on the first anniversary of employment with Tate & Lyle, subject to achievement of performance conditions relating to
specified individual and business objectives; and (ii) an Award with a headline value of £950,000, subject to the same performance
conditions as Performance Share Plan Awards made to Executive Directors in 2021, and capable of vesting following the announcement
of full-year financial results for the year ending 31 March 2024. These compensatory awards will be subject to forfeiture/repayment in
full if she ceases to be employed in the first 36 months of employment due to her resignation or dismissal for cause.
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, and received no increase until 2021 (while retirement
benefits were reduced by 10% of salary). The Committee has approved an increase with effect from 1 April 2022 at a level that is in line
with the broader workforce (being 4%) taking his annual salary to £712,400.
As previously announced, Dawn Allen was appointed to the Board on 16 May 2022 as CFO on a salary of £475,000.
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 have been reduced to 15% of salary, with effect from 1 April 2021. This 15% level aligns with the rate generally available to the
broader UK workforce.
CHAIR’S AND NON-EXECUTIVE DIRECTORS’ FEES
Fees are reviewed annually, in accordance with our stated Policy, by the Committee (excluding the Board Chair) in respect of the Board
Chair’s fee, and by the Board Chair and the Executive Directors in respect of other non-executive directors’ fees.
At the annual review in March 2022, it was noted that no increases had been 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 (£)
Basic fees
Board Chair
Non-executive director
Senior Independent Director
Supplemental fees
Chair of Audit Committee
Chair of Remuneration Committee
2022
2021
% CHANGE
350 000
68 000
78 800
18 050
13 550
350 000
68 000
78 800
18 050
13 550
0%
0%
0%
0%
0%
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 118
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS
The bonus structure described below has applied since 1 April 2019. 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)
THRESHOLD: 20%
TARGET: 75%
MAXIMUM: 150%
FINANCIAL METRICS (80% OF TOTAL):
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 and Group adjusted operating cash flow targets are set and actual
performance assessed at constant (budgeted) 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
Bonus awards up to 100% of base salary are paid in cash. Any 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 dividends (but not the special dividend) between award and release.
MALUS AND CLAWBACK PROVISIONS
Both the cash and share elements are subject to malus and clawback 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 bonus structure will be retained for the year ahead, however following the Transaction we completed to position Tate & Lyle as a
food and beverage solutions focused business (see page 16), the Food & Beverage Solutions net sales metric (which previously related
to divisional performance) will be replaced with net sales from the Group total business, supporting our strategic ambition for growth.
As in previous years, 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 achieved, for each year just ended.
ASSESSMENT OF BONUS FOR THE YEAR ENDED 31 MARCH 2022
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 2022. As described in the Chair’s statement, as we entered the year, near-term priorities relating to Covid
remained front of mind: 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.
Our bonus arrangements are linked to stretching targets set at the start of each year against key metrics linked to our strategic goals.
Accordingly, targets were set on the basis of ‘total Group’ performance, prior to the Transaction which was announced on 12 July 2021
to separate our key business divisions (described on pages 16 and 17) and which completed on 1 April 2022. Accordingly, for bonus purposes,
to enable an appropriate assessment against targets as originally set on a consistent basis, it has been necessary to assess ‘total Group’
performance across all metrics, and to normalise for the impact of the Transaction on cash flow (as described below), which means that
some of the figures here are different from those relating to ‘continuing operations’ shown elsewhere in the report and accounts.
In accordance with our shareholder-approved Remuneration Policy, the Committee carefully considered the impact of the Transaction
in order to maintain the principle that, where appropriate, certain adjustments should be made, if required, to ensure a fair and
equitable assessment of performance against the targets that were originally set.
For the year ended 31 March 2022, adjusted free cash flow from continuing operations was £72 million and adjusted free cash flow
from total operations was £16 million. Consistent with our past practice and disclosure, certain mechanical adjustments were made for
retirement benefit arrangements, net interest paid, net tax paid, foreign exchange, M&A activities, as well as our standard adjustments
to normalise for grain procurement activities versus assumptions made at the time of setting the annual business plan. After making
such adjustments, the resultant cash flow measure was £186 million versus a target of £296 million.
A key further driver of the cash performance for the year were factors relating to the separation of the businesses and the closing of the
Transaction, which completed on 1 April 2022. The most significant of which related to the increased working capital of what became the
Primient business. Immediately on closing the Transaction, additional cash proceeds of US$120 million were received by the Group
because of the working capital mechanism negotiated by management.
In addition, ahead of closing the Transaction, the Group took certain necessary actions with respect to inventory balances within the
retained business and customer invoicing activities. Such actions were taken to enable the successful close of the Transaction and to
ensure continuity of operations and supply following IT systems separation and operational cutover up to closing. These activities
negatively impacted working capital and cash flow in the final month of the year in the retained business by £41 million.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 119
Accordingly, upon due consideration, the Committee judged that adjustments to the cash flow performance to reflect these unique
circumstances were appropriate, resulting in an assessment of adjusted operating cash flow of £292 million. The accuracy of these
adjustments was validated by the independent external auditor. The Committee is satisfied that this assessment is appropriate in the
context of and consistent with overall business and strategic performance, as well as the broader stakeholder experience.
BUSINESS AND PERFORMANCE CONTEXT FOR BONUS OUTCOMES FOR THE YEAR ENDED 31 MARCH 2022
Alongside the technical assessment of performance referred to above, the Committee has considered the bonus outcomes (as set out
below) and considers these appropriate in the context of: achieving a major transformation of the business to position Tate & Lyle as a
focused speciality food and beverage solutions business; delivering significant strategic progress (for example through the growth of
New Product revenue and strategic acquisitions that augment our portfolio); and driving strong financial performance for the year,
despite continuing external challenges – and alongside the meaningful actions taken to further our purpose, particularly in relation
to our environmental commitments, and to support our people through Covid-19 and the current inflationary challenges:
FINANCIAL HIGHLIGHTS:
Continuing operations (New Tate & Lyle):
– Revenue growth +18%; adjusted operating
profit before tax +14%
– Positive momentum in Food & Beverage
Solutions: +5% volume and +19% revenue
growth; +7% adjusted operating profit £160m
– Sucralose profit1 +15% at £61m reflecting
strong demand in beverages; Revenue +13%;
Volume +15%
– Acceleration in New Product revenue +35%
Discontinued operations (Primient):
– (9)% lower in Primary Products profit1 to
£146m with Sweeteners and Starches (42)%,
and Commodities profits +52%
Total operations:
– (7)% Group satutory profit after tax; free
cash flow £16m; (4)% adjusted diluted earnings
per share
– Return on capital employed of 14.9%,
240 bps lower mainly from discontinued
operations profit
PURPOSE AND STRATEGY PROGRESS:
– Exit from use of coal in all operations
4 years earlier than committed helped drive
12% reduction in Scope 1 and 2 absolute
greenhouse gas emissions from 2019 baseline
– Tate & Lyle commits to become carbon net
zero by 2050
– Building agile, ambitious and diverse culture:
42% of top 500 managers at 1 April 2022 are
women
– New targets established to progress equity,
inclusion and diversity over the next eight
years
LOOKING AFTER OUR PEOPLE:
– Introduced four new behaviours to underpin
our growing culture of innovation
– Thorough review of annual salary increases
in the context of high inflation and cost of
living increases; the salary review was
reflective of the latest inflation information
– New equity, diversity and inclusion targets
published
– In the year, 1.2 million nutritious meals
provided to people in need in our local
communities (2.9 million meals provided
over two years)
– Beneficial use of waste – increased to 83%
– Dedicated employee communications and
in total operations; water use reduced by 3%
in continuing operations
internal social media channels, with regular
messages driving engagement with the
members of the executive team
1 Adjusted operating profit, percentage change in constant currency.
ANNUAL BONUS FOR THE YEAR ENDED 31 MARCH 2022 (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.
BONUS METRIC
LINK TO STRATEGY
WEIGHTING THRESHOLD
TARGET
STRETCH
TARGET RANGE
ACTUAL PERFORMANCE
IN THE YEAR ENDED
31 MARCH 2022
40%
£309m
£324m
£338m
£324m
BONUS OUTCOME
% OF
MAX
50%
% OF
SALARY
30%
Group adjusted
operating profit before
tax, exceptional items,
amortisation and net
retirement benefit
interest
Measures the underlying
profit generated by
the total business and
whether management is
converting growth into
profit effectively
Food & Beverage
Solutions net sales
Group adjusted
operating cash flow
Non-financial
personal and strategic
performance
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
Measures non-financial
performance key to
achieving corporate
goals
20%US$1,431m US$1,530m US$1,560m
US$1,691m
100%
30%
20%
£281m
£296m
£311m
£292m
40%
12%
20%
See page 120
for details
Chief Executive
Chief Financial Officer2
90%
N/A
27%
N/A
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 Directors1 for the year ended 31 March 2022 have been
determined as follows:
Nick Hampton
Vivid Sehgal
Chief Executive
Chief Financial Officer (ceased employment on 31 December 2021)
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.
% OF
MAX
67%
0%2
% OF
SALARY
100%
0%2
1 Bonus targets are set and actual performance is assessed at constant (budget) exchange rates, reflecting consistent practice with prior years.
2
Vivid Sehgal stepped down from the Board on 3 November 2021 and ceased employment on 31 December 2021 – any bonus award was forfeit on ceasing employment.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 120
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS 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, to 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 Chief Executive (Nick Hampton).
CEO (NICK HAMPTON)
Sharpen the focus
on our customers and
key categories
Simplify the
business and
deliver
productivity
improvements
Accelerate portfolio
development:
innovation, partnerships,
strategy development
and M&A readiness
Culture and
Governance, including
Environmental, Health,
Safety and Governance
(ESG) and social purpose
OBJECTIVE(S):
– Create best-in-class solutions selling
capability across the three platforms of
sweetening, mouthfeel and fortification
– Develop prioritised investment and
execution plans in our key markets
KEY ACHIEVEMENT(S):
– Double-digit revenue growth across all
regions in Food & Beverage Solutions
– Maintained strong connection with
key customers
– Value of wins from new business pipeline
increased by 23%
– Opened new Customer Innovation and
Collaboration Centres in Dubai and Chile
OUTCOME:
OBJECTIVE(S):
– Execute separation of Group into two
standalone companies
– Increase investment in new Tate & Lyle
to lay foundations for future growth
– Create a culture of continuous improvement
– Reducing costs and increasing productivity
KEY ACHIEVEMENT(S):
– Delivered major strategic milestone by
successfully executing complex separation of
business into Tate & Lyle and Primient
– Projects to build growth capacity underway
with total capital expenditure in 2023 financial
year expected to be in the £90 million to £100
million range
– Productivity programme exceeded target of
US$150 million of benefits over a six-year
period ending 31 March 2024 two years
ahead of schedule. Total benefits since the
programme started are US$158 million
– Total operations delivered US$34 million
of benefits during the year of which US$26
million was realised from projects in our
operations and US$8 million from Selling,
General & Administrative savings
OBJECTIVE(S):
– Bring new products and solutions to
market faster
– Successfully integrate acquisitions
– Expand our portfolio and strengthen platforms
– Develop M&A pipeline and drive opportunities
to conclusion
KEY ACHIEVEMENT(S):
– New Products revenue increased by 35%
(products launched from innovation pipeline
in the last seven years)
– 10 New Products and over 30 stevia
sweetener solutions launched from
innovation pipeline
– Integration of stevia and tapioca
acquisitions made in the 2021 financial
year progressing well
– Agreement to acquire Quantum Hi-Tech
(Guangdong) Biological Co., Ltd, a leading
fibre business in China
OUTCOME:
OBJECTIVE(S):
– Further embed purpose within the
organisation
– Launch fresh culture for ‘new’ Tate & Lyle
post business separation
– Take actions to progress equity, diversity and
inclusion across the business
– Deliver progress on published purpose
targets and commitments
KEY ACHIEVEMENT(S):
– Developed and championed new purpose
of Transforming Lives through the Science
of Food to reflect ambition and focus of new
Tate & Lyle.
– Building agile, ambitious and diverse
culture with four new behaviours introduced
to encourage greater innovation and
experimentation
– New targets established to progress equity,
diversity and inclusion over next eight years
– Scope 1 and 2 greenhouse gas emissions 12%
lower (total operations) from 2019 baseline
– Eliminated the use of coal in all our operations
– Expanded sustainable agriculture
programme for stevia in China
OUTCOME:
OUTCOME:
Bonus outcome
(Nick Hampton)
OVERALL OUTCOME: 18/20
27% of salary
Tate & Lyle PLC Annual Report 2022
GOVERNANCE
121
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.
VESTING OUTCOME FOR AWARDS MADE IN 2019
The table below summarises the assessment of actual performance against the conditions set for the award made in 2019.
TARGET RANGE
(THRESHOLD-STRETCH)
ACTUAL PERFORMANCE
OUTCOME FOR 2019 AWARD
COMBINED VESTING OUTCOME
FOR 2019 AWARD
METRICS FOR AWARDS 2019
LINK TO STRATEGY
Adjusted Group ROCE
(40%)
Group adjusted earnings
per share (40%)
Drives efficient investment
for value-added returns
from the total business
Key performance metric to
drive sustainable long-term
profitable growth
13%–17% in the final
year of the three-year
performance period
5%–10% p.a. three-year
compound growth
16.1% (in range)
1.9% p.a. (below threshold)
F&BS volume growth
(20%)
Lead indicator of strategy
execution and F&BS value growth
2%–6% p.a. three-year
compound growth
3.4% p.a. (in range)
42% of the 2019 award will vest
– Group ROCE performance
is in range required while
F&BS operating profit growth
performed in range, and
adjusted earnings per share
% was below the target range
required
Note: Targets are set and performance is assessed at reported exchange rates. F&BS metrics relate to the reportable segment. Earnings per Share performance has been assessed prior to
the share consolidation approved 26 April 2022 and effective 3 May 2022.
As described in previous reports, the Committee carefully considers the impact of M&A activity (in accordance with our shareholder-
approved Remuneration Policy) and maintains the principle that, where appropriate, certain adjustments should be made, if required,
to ensure a fair and equitable assessment of performance against targets that were originally set.
To enable a consistent assessment of performance for the award made in 2019, ROCE performance has been adjusted to reflect the
full-year impact of the Board-approved acquisitions of SGF and CMS (announced in the year ended 31 March 2021), deducting both the
aggregate profit generated by these acquired businesses as well as their impact on average invested operating capital. In addition,
consistent with the approach set out above for Group adjusted operating cash flow, certain adjustments were made to average invested
operating capital for the impact of working capital investment ahead of the Transaction. The net impact of these adjustments was to
increase ROCE from 14.9% to 16.1%. The Committee believes that such adjustments are reasonable and that the resultant vesting
outcome is appropriate in the context of overall business performance and in the context of the broader stakeholder experience.
PERFORMANCE CONDITIONS APPLICABLE TO AWARDS GRANTED FROM 2021
The Transaction we announced on 12 July (see page 16) strategically re-positions Tate & Lyle as a focused global food and beverage
solutions business and, as such, created an appropriate opportunity to adopt long-term performance conditions to reflect our strategic
ambition for the future. Metrics and targets for awards from 2021 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 speciality food
ingredient industry.
As part of this process, we consulted with a broad group of our largest shareholders on the proposed arrangements and took their
feedback into account in finalising these arrangements for the future. Shareholders approved an amendment to our Directors’
Remuneration Policy on 30 September 2021, (with more than 99% of votes cast), to enable the adoption of non-financial (ESG,
sustainability and purpose-related) targets alongside the introduction of relative TSR performance and retaining key financial key
performance metrics. The framework adopted for 2021 awards, which also applies for the year ahead, reflects the strategic focus of our
business and our ambition for the future in financial and shareholder value terms, but also in terms of the contribution we can make to
our people, communities, and the environment. These metrics, and the strategic rationale, 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 along with the proposed Transaction, and our ambition for growth, as well as historic and competitor/customer financial
performance. This approach is intended to place a clear focus on long-term strategic growth and market out-performance, to drive
long-term value creation.
Performance share plan awards granted in 2019 and 2020
Rewards achievement of long-term strategic objectives approved
following review in 2016:
Performance share plan awards granted in 2021 onwards
Rewards achievement of long-term strategic objectives for new
Tate & Lyle:
40% Adjusted Group ROCE on
total operations
40% Adjusted Group EPS CAGR
from total operations
20% F&BS volume CAGR
PERFORMANCE
SHARE PLAN
PERFORMANCE
SHARE PLAN
30% Compound annual organic
revenue growth
25% Relative Total Shareholder
Return
25% Adjusted Group ROCE
20% Purpose and sustainability
metrics: reduction in greenhouse
gas emissions, beneficial use of
water, reduction in water use, and
gender diversity
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
122
DIRECTORS’ REMUNERATION REPORT CONTINUED
LONG-TERM INCENTIVE – PERFORMANCE SHARE PLAN CONTINUED
METRICS FOR AWARDS
FROM 2021 (WEIGHTING)
RATIONALE FOR METRIC
(LINK TO INVESTMENT CASE)
TARGET RANGE
(THRESHOLD-STRETCH)
Compound annual organic revenue growth (30%)
Key performance metric to drive
long-term profitable growth
3% – 8% p.a. three-year compound annual growth over
the three-year Performance Period
Relative Total Shareholder Return (25%)
Adjusted Group ROCE (25%)
Purpose and sustainability metrics (20%):
Reduction in greenhouse gas emissions,
beneficial use of water, reduction water
use and gender diversity
External measure of shareholder
value/return
Drives disciplined and efficient
investment for value-added returns
from the total business
Central to positioning as a purpose-
led organisation e.g. aligned to our
commitment to be carbon neutral
by 2050
‘Median’ to ‘upper quartile’ relative to global industry
peers (see below) over the three-year Performance
Period
13% – 17% in the final year of the three-year
performance period
Targets linked to ESG and sustainability commitments
aligned with existing 2030 commitments, to be re-
stated to reflect our business post-Transaction (and
disclosed via our Purpose Report)
Targets for financial metrics are set, and performance is assessed at, reported exchange rates.
The TSR comparator group is comprised of the following businesses, chosen as they represent global peers and industry participants that collectively provide an appropriate benchmark
for performance: AAK (Sweden), Archer Daniels Midland (US), Balchem (US), Christian Hansen (Denmark), Corbion (Netherlands), Croda (UK), DSM (Netherlands), Givaudan (Switzerland),
Glanbia (Ireland), IFF (US), Ingredion (US), Kerry (Ireland), Novozymes (Denmark), Sensient (US), Symrise (Germany). In selecting a comparator group, the Committee noted that a number
of more direct competitors are not publicly listed.
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 (recognising this has been
rebased in connection with the Transaction).
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 clawback/malus provisions
and demonstrates a strong long-term alignment with shareholder interests.
MALUS AND CLAWBACK PROVISIONS
Awards made under the PSP are subject to malus and clawback 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.
IMPACT OF SPECIAL DIVIDEND AND SHARE CONSOLIDATION ON SHARE AWARDS
Following completion of the Transaction, a return of capital by way of a special dividend (of £1.07 per ordinary share) was approved by
shareholders on 26 April 2022. This was accompanied by an associated share consolidation, to maintain the comparability, so far as
possible, of Tate & Lyle’s share price before and after the special dividend (as explained in the shareholder circular). In this context,
the Committee gave careful consideration to the appropriate treatment of share incentive participants (which include a broader
management group beyond Executive Directors). As these participants did not receive the special dividend, and as the intention of the
share consolidation was to maintain equivalent market value per share pre and post the special dividend, the Committee confirmed
(having also taken advice on the prevailing market practice) that awards should remain in effect over the original number of shares,
to maintain the headline value of awards (allowing the special dividend and the share consolidation to offset one another).
CHANGE OF CONTROL
The Company’s share plans contain provisions relating to a change of control. Outstanding awards would normally vest in full 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 as adopted following shareholder approval in 2021 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.
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 123
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,
for the financial year ahead (reflecting the structural reduction in bonus opportunity and a reduction in pensions benefit levels adopted
in the 2020 Remuneration Policy). 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).
Chief Executive – Nick Hampton
Chief Financial Officer – Dawn Allen
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
6,000
5,000
4,000
3,000
2,000
1,000
0
£836
100%
Below
threshold
Base and Benefits
Annual Bonus
Performance Share Plan
45%
£4,040
53%
26%
21%
£5,108
63%
21%
16%
25%
£2,438
44%
22%
34%
Target
Stretch
Stretch +50%
share growth
STATEMENT OF DIRECTORS’ SHARE AWARDS (AUDITED)
AWARDS MADE DURING THE YEAR ENDED 31 MARCH 2022 (AUDITED)
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
6,000
5,000
4,000
3,000
2,000
1,000
0
£2,697
53%
26%
21%
£1,628
44%
22%
34%
Target
Stretch
£3,409
63%
21%
16%
Stretch +50%
share growth
£559
100%
Below
threshold
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
Conditional
award
21 July 2021
284 259
2 054 993 Organic revenue
growth (30%);
Relative Total
Shareholder
Return (25%);
Adjusted Group
ROCE (25%);
Purpose and
sustainability
metrics (20%)
Group Bonus
Plan2
Conditional
award
21 July 2021
32 195
232 747
None
Vivid Sehgal3
Performance
Share Plan1
Conditional
award
21 July 2021
197 114
1 424 996 Organic revenue
growth (30%);
Relative Total
Shareholder
Return (25%);
Adjusted Group
ROCE (25%);
Purpose and
sustainability
metrics (20%)
15%
n/a
15%
Three financial
years ending
31 March 2024
plus two-year
holding period
Two-year
deferral
Three financial
years ending
31 March 2024
plus two-year
holding period
Group Bonus
Plan2
Conditional
award
21 July 2021
1 095
7 916
None
Two-year
deferral
n/a
1
2
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 722.93. pence per share for the 2021 award. In 2021, 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 2021 are described on pages
121 and 122.
Deferred bonus awards were granted under the annual bonus plan (as described on page 118). 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 126 of this Report. The share allocation was made during the year ended
31 March 2022, and shown in the table above, based on the average share price over the last three months of the preceding financial year, being 722.93p per share for the 2021 award. Deferred
bonus awards were subject to performance conditions in the year ended 31 March 2021, and remain subject to continued employment in accordance with the Scheme rules.
3 Th e awards made to Vivid Sehgal have been forfeited as a result of his resignation and cessation of employment on 31 December 2021.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
124
DIRECTORS’ REMUNERATION REPORT CONTINUED
STATEMENT OF DIRECTORS’ SHAREHOLDINGS (AUDITED) CONTINUED
SHARE AWARDS MADE IN FINANCIAL YEARS TO 31 MARCH 2021 (AUDITED)
The table below sets out the current position of share-based awards made to Executive Directors.
Nick Hampton
Performance Share Plan2:
2018
20193
2020
AS AT
31 MARCH
2021
(NUMBER)
AWARDS
VESTED
DURING
YEAR
(NUMBER)
AWARDS
LAPSED
DURING
YEAR
(NUMBER)
AWARDS
EXERCISED
DURING
YEAR
(NUMBER)
AS AT
31 MARCH
2022
(NUMBER)
MARKET
PRICE
ON DATE
AWARDS
GRANTED
(PENCE)
MARKET
PRICE
ON DATE
AWARDS
EXERCISED
(PENCE)1
VESTING DATE
330 380
287 278
273 295
189 307
141 073
189 307
–
–
–
–
–
–
–
287 278
273 295
603.85
694.45
729.98
791.4
After 31/03/21
–
–
After 31/03/22
After 31/03/23
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 2019 and 2020 are described on page 121. 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 2018 award is described in the 2021 Annual Report.
3 The PSP award made in 2019 to Mr Hampton will vest at 42%, following the Committee’s assessment of performance conditions (as described on page 121).
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.
Nick Hampton
AS AT
1 APRIL 2021
(NUMBER)
OPTIONS VESTED
DURING YEAR
(NUMBER)
OPTIONS
EXERCISED DURING
YEAR (NUMBER)
OPTIONS LAPSED
DURING YEAR
(NUMBER)
AS AT
31 MARCH 2022
(NUMBER)
EXERCISE
PRICE
(PENCE)
Savings-related options 2017
Savings-related options 2021
3 243
3 321
3 243
–
–
–
3 2431
–
555.00
–
3 321
542.00
1 Options lapsed due to a restriction in trading.
EXERCISE
PERIOD
01/03/21 to
31/08/21
01/03/25 to
31/08/25
Tate & Lyle PLC Annual Report 2022
GOVERNANCE 125
STATEMENT OF DIRECTORS’ SHAREHOLDINGS (AUDITED) CONTINUED
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; following the share consolidation approved by
shareholders on 26 April, Mr Hampton holds shares with a value of just under six times base salary, exceeding this requirement.
– 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 two-year post-vesting holding period.
POST-EMPLOYMENT SHAREHOLDING POLICY
A post-employment shareholding requirement was 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 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.
SHARES HELD AT
31 MARCH 20221
AWARDS –
CONDITIONAL ON
PERFORMANCE2
SHARES – NOT
CONDITIONAL ON
PERFORMANCE3
OPTIONS – NOT
CONDITIONAL ON
PERFORMANCE
TOTAL AS AT
31 MARCH 2022
TOTAL AS AT
3 MAY 20224
TOTAL AS AT
31 MARCH 2021
Chair
Dr Gerry Murphy
Executive Directors
Nick Hampton
Vivid Sehgal5
Non-executive Directors
John Cheung
Paul Forman
Lars Frederiksen
Kimberly Nelson6
Sybella Stanley
Warren Tucker
Patrícia Corsi7
30 000
645 300
–
–
10 000
15 000
4 400
4 983
11 603
–
844 832
197 114
47 682
1 095
3 321
–
30 000
25 713
20 000
1 541 135
1 448 948
1 454 651
–
–
10 000
15 000
4 400
4 983
11 603
–
–
8 571
12 857
3 711
4 271
9 944
–
–
–
10 000
15 000
–
4 983
4 321
–
1
2
Includes shares owned by connected persons.
Awards under the PSP: PSP awards made in 2019 and 2020 were made as options with a nil exercise price; PSP awards made in 2021 were made as conditional shares as set out in
previous tables.
3 Deferred share awards made under the Group Bonus Plan.
4
Shares held outright were subject to consolidation as agreed at the General Meeting on 26 April 2022, resulting in ordinary shareholders receiving six new ordinary shares with a nominal
value of 29¹⁄6 pence each for every seven existing ordinary shares with a nominal value of 25 pence each that they previously held. Interests in shares held through the Company’s various
share plans have not been subject to consolidation. The figures in this column represent consolidated shares held, and any interest in share plans.
Vivid Sehgal was appointed as a Director with effect from 1 March 2021 and resigned from the Company ceasing employment on 31 December 2021 and his awards have subsequently
been forfeited.
5
6 Kimberly Nelson’s shares are held as ADRs.
7 Patrícia Corsi was appointed as a Director with effect from 1 May 2021.
There were no other changes in Directors’ interests in the period from 1 April 2022 to 8 June 2022 other than the reduction in the
number of shares held outright, as a consequence of the share consolidation, as recorded in the column titled ‘Interest in Shares as at
3 May 2022’.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 126
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 2022
Board Chair
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Dr Gerry Murphy
350
350
–
–
350
350
–
–
–
350
350
Executive
Directors
Nick Hampton
685
665
17
17
103
133
805
815
686
898
9184
1 533
1 604
2 431
2 409
3 246
Non-executive
Directors6
John Cheung
Paul Forman
Lars Frederiksen
Kimberly Nelson
Anne Minto7
Sybella Stanley
Warren Tucker
Patrícia Corsi8
Former
Executive
Directors
Imran Nawaz2
Vivid Sehgal5
Totals
68
79
68
68
27
77
86
62
17
79
68
68
82
68
86
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
68
79
68
68
27
77
86
62
17
79
68
68
82
68
86
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
68
79
68
68
27
77
86
62
17
79
68
68
82
68
86
–
–
–
48
46
419
577
95
39
356
470
40
1 965
1 993
1
10
28
13
1
31
6
53
94
6
46
419
577
47
–
–
–
48
–
–
162
233
2 155
2 257
686
946
918
1 533
1 604
2 479
3 759
4 736
1 Benefits for Executive Directors include health insurance and car allowance.
2
3
4
Imran Nawaz stepped down as a director on 31 March 2021 and left employment on 30 April 2021. Normal pay is included in the table above for the period 1 April 2021 to 30 April 2021.
Annual Bonus includes the value of deferred shares. The cash bonus award to Nick Hampton is £685,000.
This is the PSP award made in 2019. PSP award outcomes are discussed on page 121 and the value is included in this table above based on a share price of £7.61, being the closing price on
23 May 2022 when the Remuneration Committee determined the extent to which the performance conditions were met.
5 Vivid Sehgal was appointed to the Board on 1 April 2021 and stepped down from the Board on the 3 November 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 Anne Minto stepped down from the Board as anticipated, after the AGM on 29 July 2021.
8 Patrícia Corsi was appointed to the Board on 1 May 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
Remuneration Policy is entitled to retain those fees.
On behalf of the Board
SYBELLA STANLEY
Chair of the Remuneration Committee
8 June 2022
Tate & Lyle PLC Annual Report 2022
GOVERNANCE
127
DIRECTORS’ REPORT
ABOUT THE DIRECTORS’ REPORT
The Directors’ Report comprises the Board of Directors
from pages 78 to 81, Governance section from pages 84
to 107, the Directors’ Report on pages 127 to 129 and the
Useful Information section from pages 203 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 90 to 94)
– Engagement with employees (pages 44 to 49 and 90 to 93)
– Respect for human rights (pages 44 to 49, 68 and 75)
– Going concern (page 42)
– Greenhouse gas emissions (pages 56 to 59)
– Financial instruments (Note 29)
– Post balance sheet events (Note 37).
RESULTS AND DIVIDEND
A review of the consolidated Group’s results can be found
from pages 12 to 75. An interim dividend of 9.0 pence per ordinary
share was paid on 5 January 2022. The Directors recommend
a final dividend of 12.8 pence per ordinary share to be paid on
5 August 2022 to shareholders on the register on 1 July 2022,
subject to approval at the 2022 Annual General Meeting (AGM).
The total dividend for the year is 21.8 pence per ordinary share
(2021 – 30.8 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 4,035,372 ordinary shares as at 31 March 2022.
The EBT’s balance was consolidated on 3 May 2022 to a total
holding of 3,458,890 ordinary shares.
RESEARCH AND DEVELOPMENT
The Group spend on research and development during the year
was £41 million (2021 – £42 million).
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 100, 102 and 108.
SHARE CAPITAL
As at 31 March 2022, 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 75,672 ordinary shares during the year. The
Company issued 3,711 shares during the period from 1 April 2022
to 8 June 2022. Further information about share capital is in Note
23. Information about options granted under the Company’s
employee share plans is in Note 32.
The Company was given authority at the 2021 AGM to make
market purchases of up to 46,846,926 of its own ordinary shares,
and a renewed authority at the General Meeting held on 26 April
2022 to make market purchases of up to 40,160,062 of its own
shares following the share consolidation. The Company made no
purchases of its own ordinary shares during the year ended 31
March 2022, and the EBT purchased 1,250,000 ordinary shares
during the year. This authority will expire at the 2022 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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 128
DIRECTORS’ REPORT CONTINUED
CHANGE OF CONTROL
At 31 March 2022, 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.
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 2022:
Norges Bank
Ameriprise Financial, Inc.
BlackRock, Inc.
Bank of America Corporation
NUMBER OF
SHARES
14,096,530
51,738,032
24,340,324
35,593,060
% HELD
3.01%
11.04%
5.18%
7.6%
Since 31 March 2022, the Company was notified of the following
changes in holdings:
Ameriprise Financial, Inc.
27 April 2022 50,736,287
Bank of America Corporation
4 May 2022 34,499,4741
DATE
NUMBER OF
SHARES
% HELD
10.83%
8.59%
1
This number represents the number of shares held following the share consolidation
undertaken on 3 May 2022.
The Company has not been notified of any other changes in
holdings between 1 April and 8 June 2022.
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$5,100
(£3,750) (2021 – US$3,950 (£3,038)) 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, four separate donations were made, the largest
being US$2,500 and the smallest being US$500.
US$4,500 (£3,300) (2021 – US$3,500 (£2,692)) was also
contributed by the Tate & Lyle Political Action Committee (PAC).
Three separate donations were made, the largest being of
US$2,500 and the smallest being US$1,000. 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.
Following completion of the sale of a controlling stake in the
Primary Products business in the Americas on 1 April 2022, the
Tate & Lyle PAC was transferred to the new joint venture Primient
business. Going forward, Tate & Lyle’s US business does not
intend to make political donations or operate a PAC.
SUBSIDIARIES AND BRANCHES
A list of the Group’s subsidiaries is set out in Note 39. The Group
has branches in China, Hong Kong and New Zealand.
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
Tate & Lyle PLC Annual Report 2022
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127
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GOVERNANCE 129
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 UK-adopted international
accounting standards, 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.
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 UK-adopted international
accounting standards 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
UK-adopted international accounting standards 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 UK-adopted international accounting standards, 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 78 to 107, pages 127 to 129 and
pages 206 to 208 and the Directors’ Remuneration Report from
pages 108 to 126 of this Annual Report were approved by the
Directors on 8 June 2022.
CLAIRE-MARIE O’GRADY
Company Secretary
8 June 2022
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 130
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Tate & Lyle PLC Annual Report 2022
131
FINANCIAL
STATEMENTS
IN THIS SECTION
132 Independent Auditor’s Report to the
members of Tate & Lyle PLC
140 Consolidated income statement
141 Consolidated statement of comprehensive income
142 Consolidated statement of financial position
143 Consolidated statement of cash flows
144 Consolidated statement of changes in equity
145 Notes to the consolidated financial statements
195 Parent Company financial statements
Tate & Lyle PLC Annual Report & Accounts 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 132
132
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 2022 and of the Group’s profit for the year then ended;
− the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
− 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 ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31 March 2022 which comprise:
GROUP
PARENT COMPANY
Consolidated statement of financial position as at 31 March 2022
Balance sheet as at 31 March 2022
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 14 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 39 to the financial statements, including a summary of
significant accounting policies
The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK-adopted international
accounting standards. 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 Financial Reporting Standard 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Group and Parent Company 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.
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.
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 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 2024. The Group has modelled a number of downside scenarios in their liquidity forecasts 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 considered the appropriateness of the methods used to calculate the cash forecasts and determined through inspection and testing of the methodology
and calculations, that the methods utilised were appropriate;
− 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 and cash equivalents of £110 million (in the continuing business) at 31 March 2022, operating cash
generation and financing commitments and agreed them to the latest Board-approved forecasts that factored in the downside scenarios. We confirmed
the details of the available committed and undrawn US$800 million revolving credit facility, US$100 million of which expires in March 2025 and the
remainder in March 2026, with reference to agreements and to third party confirmations;
− We assessed the reasonableness of the key assumptions, in the context of our understanding of the Group and its principal risks and from other supporting
evidence gained from our audit work including review of minutes of board meetings and our procedures in respect of goodwill impairment reviews and on
other external market data, including analyst forecasts and competitor trading updates;
− We checked that all debt repayments were included in the forecasts and that management had factored in other key events arising post year-end,
including the receipt of £1.1 billion in provisional proceeds from the sale of the controlling stake in Primient, the special dividend paid of £497 million
and the acquisition of Quantum (total consideration of US$237 million). We inspected bank statements to support the cash received from the disposal;
− We understood 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 that
could erode liquidity headroom;
− We performed testing to evaluate whether the covenant requirements of the Group borrowings would be met under all base and downside 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 Directors’ Report on page 127 and Note 1 to the consolidated financial statements on
pages 145 and 146 in order to assess that the disclosures were appropriate and in conformity with the reporting standards.
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
133
133
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 Parent Company’s ability to continue as a going concern for the period to 31 March 2024.
In relation to the Group and Parent 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 Parent Company’s ability to continue as a
going concern.
OVERVIEW OF OUR AUDIT APPROACH
Audit scope
Key audit matters
Materiality
− We performed an audit of the complete financial information of five components and audit procedures on specific balances for
a further two components
− The components where we performed full or specific scope audit procedures accounted for 84% of the adjusted profit before tax
measure used to calculate materiality, 88% of revenue and 78% of total assets
− Commodity co-product valuation
− Revenue recognition, including the risk of management override
− Tax impacts of the sale of the controlling stake in Primient
− Overall Group materiality of £20 million which represents 5% of profit before tax adjusted for exceptional items and the Group’s
share of tax of joint ventures (‘adjusted profit before tax’)
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, UK, Brazil and Slovakia,
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.
In addition to the full scope components and specific scope components, we also instructed three components to perform specified procedures over certain
aspects of the financial statements. This included procedures relating to cash and cash equivalents, inventory and the completeness and valuation of
insurance provisions, to gain sufficient coverage over these balance sheet accounts at the year-end.
The table below illustrates the coverage obtained from the work performed by our audit teams.
YEAR ENDED 31 MARCH
Full scope
Specific scope
Coverage
Specified procedures
Remaining components
Total reporting components
NUMBER
2022
2021
5
2
7
3
88
98
5
2
7
3
83
93
% GROUP ADJUSTED
PROFIT BEFORE TAX
% GROUP REVENUE
% TOTAL ASSETS
SEE NOTES
2022
80%
4%
84%
(2%)
18%
2021
86%
2%
88%
2%
10%
2022
74%
14%
88%
1%
11%
2021
74%
12%
86%
1%
13%
2022
76%
2%
78%
3%
19%
2021
75%
2%
77%
9%
14%
100%
100%
100%
100%
100%
100%
A, B
A, C
C
D
Notes
A. The Group audit risk in relation to revenue recognition was subject to audit procedures at one full scope and two specific scope components.
B. The Group audit risk in relation to Commodity co-product valuation was subject to audit procedures by the US component team.
C. 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.
D. Of the remaining components that together represent 18% of the Group’s adjusted profit before tax, none are individually greater than 5% of the Group’s adjusted profit before tax measure used to
calculate materiality. For these components, we performed other procedures, including analytical review, testing of consolidation journals, intercompany eliminations and foreign currency
translations recalculations to respond to any potential risks of material misstatement to the Group financial statements.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
134
134
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC CONTINUED
Changes from the prior year
The full and specific scope components have not changed from the prior year as these components remain the most significant to the Group, by size and risk,
and the coverage of the Group was consistent with the prior year audit.
On 12 July 2021, the Group announced that it has entered into an agreement to sell a controlling stake in the Primary Products business in the Americas, now
called ‘Primient’, to KPS Capital Partners, LP (KPS) (the ‘Transaction’). In preparation for the Transaction, certain legal entities were created to facilitate the
sale. This did not significantly impact the scoping of the Group.
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.
The Group audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory Auditor physically visited
the US, which is the most significant component to the Group, and which is also most impacted by the Transaction. Delegates of the Senior Statutory Auditor
also physically visited the shared service centre in Poland given this contributes to the audits of a number of components. These visits involved meetings with
local management, reviewing relevant working papers on risk areas and discussions with the component teams on the audit approach and any issues arising
from their work.
The Group audit team regularly interacted virtually with all component teams where appropriate during various stages of the audit. Our virtual interactions
involved using video technology and our global audit software to meet with our component teams to discuss and direct their audit approach, review relevant
working papers and understand the significant audit findings, particularly over the risk areas identified. We also held meetings with local management and
virtually attended all full scope and specific scope component audit closing meetings. We also 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 Group
financial statements.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Group has determined that the most significant
future impacts from climate change on their operations will be from disruption of production facilities, distribution networks as well as corn and stevia supply
from acute weather events and incremental changes in climatic conditions. These are explained on pages 63-67 in the required Task Force for Climate related
Financial Disclosures and on pages 68-75 in the principal risks and uncertainties, which form part of the ‘Other information,’ rather than the audited financial
statements. Our procedures on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated.
Our audit effort in considering climate change was focused on the adequacy of the Group’s disclosures in the financial statements and conclusion that no
issues were identified that would impact the carrying values of assets with indefinite and long lives or have any other impact on the financial statements for
Tate & Lyle PLC. We also challenged the Directors’ considerations of climate change in their assessment of going concern and viability and associated disclosures.
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
135
135
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
Commodity co-product
valuation (Group)
The fair value adjustment of co-product
inventory and executory purchase and sale
contracts is £49 million (2021 – £33 million)
Refer to the Audit Committee Report (page 104);
Accounting policies (pages 146 and 147); and
Notes 2, 29 and 30 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.
Revenue recognition, specifically in
relation to the risk of management
override (Group)
£3,132 million (2021 – £2,807 million)
Refer to the Accounting policies (page 151); 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, which are 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.
KEY OBSERVATIONS COMMUNICATED
TO THE AUDIT COMMITTEE
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.
Based on the procedures
performed, we did not identify any
evidence of material misstatement
in the revenue recognised in
the year.
OUR RESPONSE TO THE RISK
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 the year-end
− Assessed the adequacy of the Group’s commodities hedging
documentation to assess compliance with IFRS 9 Financial
Instruments requirements
− Evaluated the adequacy and transparency of commodities
disclosures
The procedures detailed above were performed principally by the US
component audit team and reviewed by the Group audit team.
− Performed walkthroughs of significant classes of revenue
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
136
136
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
We are satisfied that the Company
has appropriately identified and
considered the tax impacts of the
reorganisation / restructuring and
transactions related to the disposal
of the Primary Products business.
We are also satisfied that the
judgements they have applied in
accounting for the tax related
impacts of the sale are reasonable
and the resulting balances are
materially correct.
To address the risks, we performed the following procedures:
Reorganisation / restructuring step plan
− We reviewed the legal step plan prepared by management
− Assessed each of the transaction steps to ensure the US, UK and
international tax implications had been identified and correctly
applied and accounted for
− We reviewed the valuations related to the transfers of assets
and liabilities and shares were reasonable
− We reviewed the legal documents to confirm the transactions
as per the step plan had occurred
Partnership US tax treatment
− We engaged EY partnership specialists in the US to perform a
detailed review of the US partnership arrangements to consider
the tax risks arising and to assess whether any material tax
charge could be triggered in the current year in relation to
the formation and contribution of assets in relation to the
Primient business.
Transaction costs – allocation to the US and deductibility
in the US
− We engaged EY transfer pricing specialists to assess the
reasonableness of the transfer of costs to the US and our US tax
team assessed the risk of the US tax authorities disallowing
the deduction of the costs from the sale proceeds or other
partnership income.
Tax impacts of the sale of the
controlling stake in Primient
Refer to the Audit Committee Report (page 104);
Accounting policies (page 157); and Notes 2 and 11
of the Consolidated Financial Statements
Even though the sale of the Primient business to
KPS completed on 1 April 2022, subsequent to
the year end, there were a number of steps and
transactions undertaken in the current year in
preparation for the sale that impacted on the
current year financial statements. The principal
risks related to:
Reorganisation / restructuring step plan
In preparation for the sale on 1 April 2022, the
company transferred the assets and liabilities
that were included in the sale into separate legal
entities. They also transferred ownership of the
overseas entities included in the sale to Primient.
There was a risk that significant taxable amounts
could arise as a result of the transferring of
assets and liabilities and shares if not all tax
consequences had been identified or the
judgement in their application was not correct.
Partnership US tax treatment
The taxation of a US partnership is complex and
could trigger significant gains in the US and have
a material impact on the book and tax basis of the
partnership when assets were contributed to the
partnership by various Tate & Lyle entities in the
current year.
Transaction costs – allocation to the
US and deductibility in the US
The company recharged transaction costs from
the UK to the US and recognised a material
deferred tax asset as a result of considering them
to be fully deductible in future periods in the US.
There is judgement involved in whether any
transfer pricing exposure is created and whether
the costs will be fully deductible in the US.
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 £20 million (2021 – £15 million), which is 5% (2021 – 4.5%) 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 provides
us with the most relevant profit basis as the exceptional items were non-recurring and not related to the ongoing trading of the Group.
STARTING BASIS
– £296 million (profit before tax)
ADJUSTMENTS
– £96 million exceptional items
– £10 million Group’s share of tax of joint ventures
MATERIALITY BASIS
– £402 million (adjusted profit before tax)
MATERIALITY
– Materiality calculated as £20 million (5% of materiality basis)
We determined materiality for the Parent Company to be £13.1 million (2021 – £12.6 million), which is 0.5% (2021 – 0.5%) of total assets.
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
137
137
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% (2021 – 75%) of our planning materiality, namely £15 million (2021 – £11.3 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 (2021 – £11.3 million to £1.1 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 £1.0 million (2021 – £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 129, 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 this gives rise to 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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
138
138
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TATE & LYLE PLC CONTINUED
CORPORATE GOVERNANCE STATEMENT
We have reviewed 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 by the Listing Rules.
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 42;
− 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;
− Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its liabilities set out on
page 70;
− Directors’ statement on fair, balanced and understandable set out on page 107;
− Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 68 to 75;
− The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 106; and
− The section describing the work of the Audit Committee set out on pages 102 to 106.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ statement of responsibilities set out on page 129, 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 Company and management.
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: UK adopted International Accounting Standards (for the Group), FRS 101 (for the
Parent Company), the Companies Act 2006 and the UK Corporate Governance Code;
− Those that relate to the relevant tax compliance regulations in the jurisdictions in which the Group operates; and
– 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, as well as consideration of the results of our audit procedures across the Group.
− Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved
enquiries of Group management, internal audit, legal counsel, and divisional management at all full and specific scope components. Our procedures also
included journal entry testing, with a focus on manual consolidation journals and journals indicating large or unusual transactions based on our
understanding of the business; and focused testing over areas we considered more susceptible to management override, as referred to in the key audit
matters section above.
− 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; and by assessing whistleblowing incidences for those
with a potential financial reporting impact. 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 135 above) and were designed to provide reasonable
assurance that the financial statements were free from fraud or error.
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.
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
139
139
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
− Following the recommendation from 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 4 years, covering the years ending 31 March 2019 to 31 March 2022.
− 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
8 June 2022
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
YEAR ENDED 31 MARCH
2022
£M
1 375
67
1
(26)
42
(16)
26
210
236
236
–
236
RESTATED*
2021
£M
1 211
116
1
(27)
90
(1)
89
164
253
253
–
253
PENCE
PENCE
5.5p
5.5p
50.7p
50.2p
£M
42
93
10
145
(28)
117
19.3p
19.1p
54.4p
53.8p
£M
90
34
10
134
(16)
118
NOTES
5
6
10
10
11
12
13
13
8
19
4
4, 11
4
140
140
CONSOLIDATED INCOME STATEMENT
CONTINUING OPERATIONS
Revenue
Operating profit
Finance income
Finance expense
Profit before tax
Income tax expense
Profit for the year – continuing operations
Profit for the year – discontinued operations
Profit for the year – total operations
Attributable to:
– owners of the Company
– non-controlling interests
Profit for the year – total operations
Earnings per share
Continuing operations:
− basic
− diluted
Total operations:
− basic
− diluted
Analysis of adjusted profit for the year – continuing operations1
Profit before tax – continuing operations
Adjusted for:
Net charge for exceptional items
Amortisation of acquired intangible assets
Adjusted profit before tax – continuing operations
Adjusted income tax expense – continuing operations
Adjusted profit for the year – continuing operations
* Prior year restated to reflect discontinued operations (see Notes 1 and 12).
1 Adjusted earnings per share information is presented in Note 13.
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the year – total operations
Other comprehensive income/(expense)
Items that have been/may be reclassified to profit or loss:
Gain/(loss) on currency translation of foreign operations
Fair value (loss)/gain on net investment hedges
Net gain on cash flow hedges
Net change in cost of hedging
Share of other comprehensive income/(expense) of joint ventures
Tax effect of the above items
Items that will not be reclassified to profit or loss:
Re-measurement of retirement benefit plans:
− actual return (lower)/higher on plan assets
− net actuarial gain/(loss) 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 income/(expense)
Total comprehensive income
Analysed by:
– Continuing operations
– Discontinued operations
Total comprehensive income – total operations
Attributable to:
– Owners of the Company
– Non-controlling interests
Total comprehensive income – total operations
NOTES
24
24
24
24
22, 24
11
31
31
18, 24
11
141
141
YEAR ENDED 31 MARCH
2022
£M
236
86
(52)
82
(5)
10
(20)
101
(70)
67
(4)
–
(7)
94
330
9
321
330
330
–
330
2021
£M
253
(141)
39
1
–
(6)
–
(107)
129
(80)
3
(13)
39
(68)
185
129
56
185
185
–
185
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
142
142
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
Non-current assets
Goodwill and other intangible assets
Property, plant and equipment (including right-of-use assets
of £40 million (2021 – £121 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
Assets classified as held for sale
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 £49 million (2021 – £116 million))
Retirement benefit deficit
Deferred tax liabilities
Provisions
Current liabilities
Borrowings (including lease liabilities of £10 million (2021 – £27 million))
Trade and other payables
Provisions
Current tax liabilities
Derivative financial instruments
Other current financial liabilities
Liabilities directly associated with assets held for sale
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
NOTES
19
20
22
18
31
11
17
29
15
17
11
29
29
16
12
23
23
24
26
31
11
33
26
25
33
11
29
29
12
AT 31 MARCH
RESTATED*
2021
£M
345
1 105
104
59
18
32
1
1
1 665
532
333
11
23
32
371
1 302
–
1 302
2 967
117
407
8
144
777
1 453
1
1 454
746
158
41
11
956
42
431
24
25
9
26
557
–
557
1 513
2 967
2022
£M
283
497
–
46
23
9
1
3
862
317
270
11
13
2
110
723
1 666
2 389
3 251
117
407
8
222
865
1 619
1
1 620
658
130
51
12
851
21
294
11
23
31
–
380
400
780
1 631
3 251
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
The notes on pages 145 to 194 form part of these financial statements. The consolidated financial statements on pages 140 to 194 were approved by the Board
of Directors on 8 June 2022 and signed on its behalf by:
Nick Hampton
Director
Andy Henley
VP, Group Financial Controller
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from operating activities – total operations
Profit before tax from total operations
Adjustments for:
− depreciation of property, plant and equipment (including right-of-use assets and 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
− other non-cash movements
Changes in working capital
Cash generated from total 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
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 (decrease)/increase in cash and cash equivalents
Currency translation differences
Balance at end of year
143
143
YEAR ENDED 31 MARCH
NOTES
20
19
32
8
10, 12
22
27
27
35
18
18
23
21
14
28
28
16
2022
£M
296
74
26
12
36
28
(8)
(7)
(38)
(250)
169
(45)
(21)
103
(132)
–
1
(16)
(4)
4
1
33
2021
£M
283
142
33
8
10
30
(26)
(8)
9
(33)
448
(57)
(22)
369
(134)
5
(62)
(18)
(4)
3
1
4
(113)
(205)
(13)
2
(60)
(32)
(144)
(247)
371
(257)
13
127
(5)
154
(5)
(36)
(137)
(29)
271
135
(35)
371
A reconciliation of the movement in cash and cash equivalents to the movement in net debt is presented in Note 28.
Included in the total cash and cash equivalents of £127 million at 31 March 2022 is £17 million classified as held for sale.
The cash flows from discontinued operations included above are presented in Note 12.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
144
144
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
At 1 April 2020
Software-as-a-Service restatement
At 1 April 2020 – restated*
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 23)
Purchase of own shares including net
settlement (Note 23)
Non-controlling interests in
subsidiaries acquired
Dividends paid (Note 14)
Other movements
523
–
523
–
–
–
–
–
–
1
–
–
–
–
At 31 March 2021 – restated*
524
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 23)
Non-controlling interests in
subsidiaries acquired
Dividends paid (Note 14)
–
–
–
–
–
–
–
–
–
At 31 March 2022
524
8
–
8
–
–
–
–
–
–
–
–
–
–
–
8
–
–
–
–
–
–
–
–
–
8
239
–
239
–
(104)
(104)
12
(3)
–
–
–
–
–
–
144
–
97
97
(26)
7
–
–
–
–
222
629
(6)
623
253
36
289
–
–
10
–
(5)
–
(137)
(3)
777
236
(3)
233
–
–
12
(13)
–
(144)
865
1 399
(6)
1 393
253
(68)
185
12
(3)
10
1
(5)
–
(137)
(3)
1 453
236
94
330
(26)
7
12
(13)
–
(144)
1 619
–
–
–
–
–
–
–
–
–
–
–
1
–
–
1
–
–
–
–
–
–
–
–
–
1
TOTAL
EQUITY
£M
1 399
(6)
1 393
253
(68)
185
12
(3)
10
1
(5)
1
(137)
(3)
1 454
236
94
330
(26)
7
12
(13)
–
(144)
1 620
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
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
NOTE
14
14
14
14
YEAR ENDED 31 MARCH
2022
PENCE
2021
PENCE
9.0
12.8
21.8
9.0
22.0
31.0
8.8
22.0
30.8
8.8
20.8
29.6
Tate & Lyle PLC Annual Report 2022
Internal Use Only
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
145
145
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 2022 with comparative
financials for the year ended 31 March 2021.
Basis of accounting
The consolidated financial statements on pages 140 to 194 have been
prepared in accordance with UK adopted International Accounting Standards.
Notwithstanding the application of IFRS 5 – ‘Non-current Assets Held for Sale
and Discontinued Operations’ to the Primient business, the Group’s principal
accounting policies are unchanged compared with the year ended 31 March
2021 with one exception being the treatment of Software-as-a-Service
arrangements as described below. 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 UK adopted International Accounting Standards are included
throughout the notes to these financial statements. All amounts are rounded
to the nearest million, unless otherwise indicated.
Prior year restatements
Restatement of comparative financial information – discontinued operations and
application of Held for Sale
On 12 July 2021 the Group announced that it had entered into an agreement
to sell a controlling stake in a new company and its subsidiaries (‘Primient’ or
the ‘Primient business’), comprising its Primary Products business in North
America and Latin America and its interests in the Almidones Mexicanos S.A.
de C.V. (‘Almex’) and DuPont Tate & Lyle Bio-Products Company, LLC (‘Bio-
PDO’) joint ventures, to KPS Capital Partners, LP (‘KPS’) (the ‘Transaction’).
The Transaction completed on 1 April 2022 and Tate & Lyle now holds a
49.9% interest in Primient.
In accordance with IFRS 5 ‘Non-current Assets Held for Sale and Discontinued
Operations’, from 1 July 2021 the Group has classified the business that
became Primient on 1 April 2022 as a disposal group held for sale and a
discontinued operation. 1 July 2021 reflects the date that negotiations on
substantive matters with KPS were completed. 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 coordinated plan to dispose of a separate major
line of business or geographic area of operations. The results of discontinued
operations are presented separately from those of continuing operations.
Accordingly, the results for the year ended 31 March 2021 have been restated
impacting the consolidated income statement.
Refer to Note 12 for further details on discontinued operations.
Restatement of comparative financial information – upfront configuration or
customisation costs incurred in implementing Software-as-a-Service
arrangements
In April 2021 the IFRS Interpretations Committee published an agenda
decision regarding the treatment of Configuration or Customisation Costs in
a Cloud Computing Arrangement under IAS 38 – Intangible Assets. During
the year ended 31 March 2022, the Group has revised its accounting policy
in relation to upfront configuration or customisation costs incurred in
implementing Software-as-a-Service (SaaS) arrangements in response
to this IFRS Interpretations Committee decision. In addition, the Group
has assessed the impact of this change in accounting policy on any cloud
computing arrangements entered into during the prior periods and restated
the comparative figures. This has impacted the balance sheet and retained
earnings only as the consolidated income statement impact on earlier
periods was not material. A balance sheet as at the beginning of the
preceding period (i.e. at 1 April 2020) has not been presented on the grounds
of materiality, however the impact of the change is shown in Note 38.
SaaS arrangements are service contracts providing the Group with the right
to access the cloud provider’s application software over the contract period.
Costs incurred to configure or customise, and the ongoing fees to obtain
access to the cloud provider’s application software, are recognised as
operating expenses when the services are received. In a contract where the
cloud provider provides both the SaaS configuration and customisation as
well as the SaaS access over the contract term, then the configuration and
customisation costs are expensed over the contract term only if the services
provided are not distinct and are otherwise expensed upfront as the software
is configured or customised. Some of the costs incurred relate to the
development of software code that enhances or modifies, or creates
additional capability to, existing on-premise systems and meets the definition
of, and the recognition criteria for, an intangible asset. These costs are
recognised as intangible software assets and amortised over the useful life
of the software on a straight-line basis. The useful lives of these assets are
reviewed at least at the end of each financial year, and any change accounted
for prospectively as a change in accounting estimate.
Neither prior period restatement represented the correction of an error.
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 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 2024. The sale of a controlling stake
in Primient is included in this assessment. 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 2022, the Group has significant available liquidity, including
£127 million of cash and US$800 million (£608 million) of committed and
undrawn revolving credit facility, which does not mature before March 2025.
The earliest maturity date for any of the Group’s loans is October 2023, when
US$120 million will mature. During the prior 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. The
Group has also considered the impact of net proceeds of the sale of a
controlling stake in Primient of £0.9 billion after one-off transaction and
separation costs and estimated tax liabilities, the return of capital to
shareholders via a special dividend of approximately £500 million on
16 May 2022 and the associated share consolidation (refer to Note 37)
and the commitment to acquire Quantum (refer to Note 35).
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 1.1 times at 31 March 2022. As set out below, for a covenant
breach to occur it would require a significant reduction in Group profit.
Such reduction is considered to be unlikely.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
146
146
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
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.
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 15, 29 and 30)
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.
FOOTNOTES
YEAR ENDED 31 MARCH
2022
£M
2021
£M
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)
44
(78)
54
69
(5)
84
(5)
79
22
(54)
38
49
(5)
50
3
53
The fair value of certain components of the fair value hedges contain
significant accounting estimates, as set out below.
1. BASIS OF PREPARATION CONTINUED
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 retained in the US following
the Primient transaction; the loss of two of our largest Food & Beverage
Solutions customers; and significant energy, raw material and commodity
inflation due to the consequences of conflict in Ukraine. 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.
The Directors have also 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 reduce significantly in order to cause a breach.
Accordingly, the Directors have concluded that there are no material
uncertainties with respect to going concern and have adopted the going
concern basis in preparing the consolidated financial information of the
Group as at 31 March 2022.
Climate change considerations
In preparing the consolidated financial statements, the Directors have also
considered the impact of climate change. These considerations did not have
any immediate material impact on the financial reporting judgements and
estimates in the current year. Climate change related considerations made
in respect of the financial statements relate principally to (i) the impact of
climate change on the going concern assessment and viability assessment
and (ii) the impact of climate change on the cash flow forecasts used in the
impairment assessment of non-current assets including goodwill for the
Foods & Beverage Solutions cash-generating unit.
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 2021,
the following new accounting standards:
− Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 Interest Rate
Benchmark Reform – Phase 2
The adoption of these amendments from 1 April 2021 had no material effect
on the Group’s financial statements.
No other new standards, new interpretations or amendments to standards
or interpretations (other than the treatment of certain costs in a cloud
computing arrangement referred to above) 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 UK adopted International Accounting Standards measures are
presented in Note 4.
Alternative performance measures reported by the Group are not defined
terms under UK adopted International Accounting Standards and may therefore
not be comparable with similarly-titled measures reported by other companies.
Pro-forma impact of the disposal of the Primient business
Included in the ‘Group Financial Review’ on page 43 are certain illustrative
disclosures of the impact of the Transaction as if it completed on 1 April 2020.
This pro-forma financial information contains estimates and it should not be
used to replace the statutory financial information but is an illustration of how
the Group will present its financial results in future periods.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
147
147
2. SIGNIFICANT JUDGEMENTS AND ESTIMATES CONTINUED
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 29) 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 29) 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 with reference to market
prices. Accordingly, these are principally classified as Level 3 hedged
item adjustments (refer to Note 29) 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 29).
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 29. 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 2022, the fair value adjustments made to basis was a
net asset of £20 million (2021 – £1 million net liability). 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 £54 million assets (2021 – £38 million assets)
for sales contracts (including co-product credits in corn sales contracts)
and £5 million liability (2021 – £5 million liability) for inventories.
In addition to the above, the Group holds futures with a fair value of
£60 million profit (2021 – £5 million profit) 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 most significant of these relate to natural gas futures
which are principally held by the Primient disposal group. The Group did not
cease cash flow hedging such items upon classification of Primient as held
for sale but will do so upon completion of the transaction. The Group also
holds futures contracts held on behalf of customers with a fair value of
£21 million profit (2021 – £7 million profit) which do not impact the Group’s
income statement as all risks and rewards are borne by the customers.
On completion of the Primient disposal transaction on 1 April 2022, the Group
will continue to apply cash flow hedge accounting to manage its economic
price exposure on the purchase of chemicals used in the production process.
All corn procurement transferred to Primient on completion of the
disposal and the Group will procure corn from Primient in future (both
for the manufacturing of corn-based finished goods in the Group’s US
manufacturing sites and for corn embedded in the finished goods
manufactured by Primient and sold to the Group under long-term
agreements). The Group will cease to apply fair value hedge accounting to
manage the net corn risk and will instead manage the corn price risk by
using economic hedging principles such as entering into offsetting positions
with its supplier (Primient) and customers. The Group therefore expects
that in the next financial year fair value of purchases, sales and inventory of
corn-based products will no longer be a source of estimation uncertainty.
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 30 and valuation
techniques and sensitivity analysis on the price of co-products and basis
(Level 3 financial instruments) in Note 29.
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 2022, the Group has
recorded current tax liabilities of £46 million (2021 – £47 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
£46 million total of uncertain tax positions held at 31 March 2022,
between zero and £5 million of the balance could be resolved in the
year ending 31 March 2023. Such resolution could be favourable or
unfavourable. Of the £47 million balance at 31 March 2021, £16 million
met the criteria for being released in the year ended 31 March 2022.
This compares to the range of possible outcomes coming into the year
for potential releases of provisions of between zero to £12 million. The
increased release was the result of an early completion of a tax audit.
(b) Recognition of deferred tax assets: at 31 March 2022, the Group has
recorded deferred tax assets of £9 million (2021 – £32 million) and
deductible temporary differences for which the unrecognised deferred
tax asset is £209 million (2021 – £162 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. The next year’s tax rate will also be impacted by
the implications of the Primient business transaction on the cash tax payable
on disposal, non-cash exceptional and other tax charges. Although the
Transaction completed on 1 April 2022, there were a number of steps
undertaken in the current year in preparation for the disposal that impacted
on the current year financial statements. Significant judgement was applied
in considering the application of the tax rules relating to the restructuring to
facilitate the Transaction.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
148
148
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SIGNIFICANT JUDGEMENTS AND ESTIMATES CONTINUED
The prior year rate benefited from the release of certain tax provisions
totalling £25 million following expiry of statute of limitations as well as
recognition of certain tax credits in the United States.
Retirement benefit plans (Note 31)
At 31 March 2022, the present value of the benefit obligations of the plans
was £1,474 million (2021 – £1,573 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 31.
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.
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.
Future accounting of the Group’s investment in Primient
Key source of judgement
The Directors have determined that there is a significant accounting
judgement with respect to the Group’s future accounting for its 49.9%
interest in the Primient business following the completion of the disposal.
The Group will equity account for this interest as a joint venture.
Such accounting is appropriate because the Group will no longer have
unilateral control over Primient. Instead, important operational decisions will
be decided by a majority vote by the Primient Board (KPS have the right to
appoint four directors and the Group has the right to appoint two) with more
significant strategic matters requiring unanimous agreement of each of the
two shareholders. In addition, from completion, the Group and Primient
entered into certain long-term agreements, principally relating to the supply
of product between one another; such agreements do not afford either party
rights that are indicative of unilateral control.
As a result, decisions about relevant activities are principally reserved for
the two shareholders and cannot be decided upon unilaterally by either
shareholder. Therefore, the Group’s interest in Primient will meet the
definition of a joint venture.
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 assets held
for sale.
Descriptions and specific accounting policy information on how the Group has
applied the requirements of UK adopted International Accounting Standards
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)
− Discontinued operations (Note 12)
− Goodwill and other intangible assets (Note 19)
− Leases (Note 21)
− Foreign currency translation of subsidiaries (Note 24)
− Financial instruments (Notes 17, 18, 25, 26 and 29)
− Retirement benefit obligations (Note 31)
− Share-based payments (Note 32)
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 2022
FINANCIAL STATEMENTS
149
149
4. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES
Income statement measures
For the reasons set out in Note 1, 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. For the years presented, 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);
− 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; and
− IFRS 5 held for sale adjustment consisting of 1) cessation of depreciation and amortisation of assets of the Primient business; and 2) cessation of equity
accounting of the share of profits and dividends received from the Group’s existing joint venture interests. These adjustments relate to the year ended
31 March 2022 only. Within adjusted discontinued operations these adjustments are excluded in order to provide a better understanding of the Group’s
underlying financial performance on a like-for-like basis with the prior year.
Alternative performance measures reported by the Group are not defined terms under UK adopted International Accounting Standards and may therefore
not be comparable with similarly-titled measures reported by other companies. The following table shows the reconciliation of the key income statement
alternative performance measures to the most directly comparable measures reported in accordance with UK adopted International Accounting Standards:
YEAR ENDED 31 MARCH 2022
ADJUSTING
ITEMS
ADJUSTED
REPORTED
RESTATED*
YEAR ENDED 31 MARCH 2021
REPORTED
ADJUSTING
ITEMS
ADJUSTED
REPORTED
1 375
1 211
CONTINUING OPERATIONS
£M UNLESS OTHERWISE STATED
Revenue
Operating profit
Net finance expense
Profit before tax
Income tax expense
Profit for the year
Basic earnings per share (pence)
Diluted earnings per share (pence)
Effective tax rate expense %
REPORTED
1 375
67
(25)
42
(16)
26
5.5p
5.5p
38.4%
–
103
–
103
(12)
91
19.7p
19.4p
170
(25)
145
(28)
117
25.2p
24.9p
19.3%
* Prior year restated to reflect discontinued operations (see Notes 1 and 12).
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 credit on adjusting items
Exceptional tax charge/(credit)
Total excluded from adjusted profit for the year
* Prior year restated to reflect discontinued operations (see Notes 1 and 12).
116
(26)
90
(1)
89
19.3p
19.1p
1.2%
NOTES
8
19
11
8, 11
–
44
–
44
(15)
29
6.1p
6.1p
1 211
160
(26)
134
(16)
118
25.4p
25.2p
12.1%
RESTATED*
YEAR ENDED 31 MARCH
2022
£M
93
10
103
(24)
12
91
2021
£M
34
10
44
(8)
(7)
29
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
150
150
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
4. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES CONTINUED
Cash flow measure
The Group also presents an alternative cash flow measure, ‘adjusted free cash flow’, which is defined as cash generated from total 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 relating to total operations:
YEAR ENDED 31 MARCH
TOTAL OPERATIONS
Adjusted operating profit from total operations
Adjusted for:
Adjusted depreciation and adjusted amortisation1
Share-based payments charge
Other non-cash movements
Changes in working capital
Net retirement benefit obligations
Capital expenditure
Net interest and tax paid
Held for sale2
Adjusted free cash flow from total operations
2022
£M
312
90
12
4
(250)
(7)
(148)
(65)
68
16
2021
£M
339
165
8
9
(33)
(8)
(152)
(78)
–
250
1 Total depreciation of £74 million (2021 – £148 million) and amortisation of £26 million (2021 – £33 million) less £nil (2021 – £6 million) of accelerated depreciation recognised in exceptional items and
£10 million (2021 – £10 million) of amortisation of acquired intangible assets.
2 Total held for sale adjustment of £110 million, comprises £68 million of adjusted depreciation and amortisation included in adjusted operating profit of £312 million. The remaining £42 million is
dividend income from Almex and Bio-PDO recognised after these investments were recorded as held for sale, which is not included in either adjusted operating profit or adjusted free cash flow.
The following table shows the reconciliation of adjusted free cash flow relating to continuing operations:
CONTINUING OPERATIONS
Adjusted operating profit from continuing operations
Adjusted for:
Adjusted depreciation and adjusted amortisation1
Share-based payments charge
Other non-cash movements
Changes in working capital
Net retirement benefit obligations
Capital expenditure
Net interest and tax paid
Adjusted free cash flow from continuing operations
YEAR ENDED 31 MARCH
2022
£M
170
70
10
4
(68)
(7)
(75)
(32)
72
2021
£M
160
87
5
–
(8)
(8)
(60)
(23)
153
1 Total depreciation of £56 million (2021 – £71 million) and amortisation of £24 million (2021 – £26 million) less £10 million (2021 – £10 million) of amortisation of acquired intangible assets.
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 30.
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 – total operations
Net debt
Adjusted operating profit – total operations
Add back adjusted depreciation and adjusted amortisation
EBITDA – total operations
Net debt to EBITDA ratio (times)
Tate & Lyle PLC Annual Report 2022
NOTE
28
2022
£M
626
312
158
470
1.3
AT 31 MARCH
2021
£M
417
339
165
504
0.8
FINANCIAL STATEMENTS
4. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES CONTINUED
The reconciliation of adjusted depreciation and adjusted amortisation included in the calculation of EBITDA is shown in the table below:
151
151
RECONCILIATION OF ADJUSTED DEPRECIATION AND ADJUSTED AMORTISATION
Depreciation – total operations
Amortisation – total operations
Depreciation and amortisation – total operations
Add held for sale adjustment (cessation of depreciation and amortisation)
Less accelerated depreciation recognised in exceptional items
Less amortisation of acquired intangible assets
Adjusted depreciation and adjusted amortisation
The return on capital employed (ROCE) ratio is as follows:
Calculation ROCE – total operations
Adjusted operating profit
Deduct amortisation on acquired intangible assets
Profit before interest, tax and exceptional items from total operations for ROCE
Goodwill and other intangible assets*1
Property, plant and equipment1
Working capital, provisions and non-debt related derivatives2, 3
Invested operating capital – total operations
Average invested operating capital4
ROCE % – total operations
2022
£M
74
26
100
68
–
(10)
158
AT 31 MARCH
2021
£M
148
33
181
–
(6)
(10)
165
RESTATED*
2021
£M
AT 31 MARCH
RESTATED*
2020
£M
339
(10)
329
345
1 105
421
1 871
1 901
17.3%
331
1 190
409
1 930
NOTE
20
19
19
2022
£M
312
(10)
302
335
1 141
701
2 177
2 024
14.9%
* Prior years restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
1 Excludes the impact of IFRS 5 held for sale adjustments on intangible assets and property, plant and equipment of £4 million and £64 million respectively.
2 All derivatives held at 31 March 2022 and 2021 were non-debt related derivatives. For the purpose of this calculation other current financial assets and liabilities are also included.
3 Excludes the dividend receivable from Joint ventures of £26 million.
4 Average invested operating capital represents the average of 1) the beginning and 2) end of the year for goodwill and other intangible assets, property, plant and equipment, working capital,
provisions and non-debt related derivatives.
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 ended 31 March 2022, £3 million (2021 – £3 million), of which £2 million is
related to discontinued operations was deducted from revenue for supply-chain financing costs.
Despite the classification of Primient as a disposal group held for sale and discontinued operation, there was no change to the Group’s existing operating
segments for the purposes of IFRS 8 ‘Operating Segments’, because the segment information presented to the Board (the designated Chief Operating Decision
Maker (CODM)) during the year ended 31 March 2022 for the purpose of allocating resources and assessing business performance remained unchanged.
As a result, further information is provided to reconcile the IFRS 8 segmental results to the presentation in the Group Financial Review (page 39). Such
reconciliation is set out below.
The Group has 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, soups, sauces and dressings. 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) and are consistently applied over time.
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. In the years presented, the items excluded from operating profit in arriving at adjusted
operating profit were the amortisation of acquired intangible assets, exceptional items and IFRS 5 Held for Sale adjustments (2022 only). The segmental
classification of exceptional items is detailed in Note 8.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
152
152
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5. SEGMENT INFORMATION CONTINUED
Segment results for the year ended 31 March 2022
IFRS 8 Segment results
TOTAL OPERATIONS
Revenue*
Adjusted operating profit1
Adjusted operating margin
Included within statutory operating profit2:
− depreciation
− amortisation
− share-based payments
YEAR ENDED 31 MARCH 2022
FOOD & BEVERAGE
SOLUTIONS
£M
1 111
190
17.2%
41
22
4
SUCRALOSE
£M
163
61
37.1%
9
–
1
PRIMARY
PRODUCTS
£M
CENTRAL
£M
1 858
112
6.0%
22
2
3
–
(51)
n/a
2
2
4
TOTAL
£M
3 132
312
10.0%
74
26
12
Includes £1,757 million of revenue recognised in discontinued operations.
*
1 Reconciled to statutory profit for the year for continuing operations in Note 4 and for discontinued operations in Note 12.
2 Disclosure provided as either included in the measure of segment profit and loss or otherwise regularly provided to CODM.
Reconciliation of IFRS 8 segmental disclosures to the consolidated income statement and to the Group Financial Review:
(i) Revenue
CONTINUING OPERATIONS
Segmental revenue – as above
Reclassification to discontinued operations
Transfer of European PP business to F&BS
As presented in the Group Financial Review (page 39)
(ii) Adjusted operating profit
CONTINUING OPERATIONS
Segmental adjusted operating profits – as above
Transfer of European PP business to F&BS1
Reclassification to discontinued operations1
As presented in the Group Financial Review (page 39)2
YEAR ENDED 31 MARCH 2022
FOOD & BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
PRIMARY
PRODUCTS
£M
CENTRAL
£M
1 111
–
101
1 212
163
–
–
163
1 858
(1 757)
(101)
–
–
–
–
–
TOTAL
£M
3 132
(1 757)
–
1 375
YEAR ENDED 31 MARCH 2022
FOOD & BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
PRIMARY
PRODUCTS
£M
CENTRAL
£M
190
(21)
(9)
160
61
–
–
61
112
21
(133)
–
n/a
(51)
–
–
(51)
n/a
TOTAL
£M
312
–
(142)
170
12.4%
Adjusted operating margin
13.2%
37.1%
1 Food & Beverage Solutions adjustment relates to the inclusion of the European Primary Products business which is not subject to the disposal of the Primient business and the inclusion of certain
operating costs which will remain with the Group post disposal. Primary Products adjustment relates to its results (excluding the European Primary Products business results) being classified as a
discontinued operation.
2 Total adjusted operating profit for continuing operations is reconciled to the statutory profit in Note 4.
Segment results for the year ended 31 March 2021
IFRS 8 Segment results
TOTAL OPERATIONS
Revenue*
Adjusted operating profit1
Adjusted operating margin
Included within statutory operating profit2:
− depreciation
− amortisation
− share-based payments
YEAR ENDED 31 MARCH 2021
FOOD & BEVERAGE
SOLUTIONS
£M
970
177
18.3%
43
23
2
SUCRALOSE
£M
151
55
36.8%
9
–
1
PRIMARY
PRODUCTS
£M
CENTRAL
£M
1 686
158
9.4%
90
7
3
–
(51)
n/a
6
3
2
TOTAL
£M
2 807
339
12.1%
148
33
8
Includes £1,596 million of revenue recognised in discontinued operations.
*
1 Reconciled to statutory profit for the year for continuing operations in Note 4 and for discontinued operations in Note 12.
2 Disclosure provided as either included in the measure of segment profit and loss or otherwise regularly provided to CODM.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
5. SEGMENT INFORMATION CONTINUED
Reconciliation of IFRS 8 segmental disclosures to the consolidated income statement and to the Group Financial Review:
(i) Revenue
153
153
CONTINUING OPERATIONS
Segmental revenue – as above
Reclassification to discontinued operations
Transfer of European PP business to F&BS
As presented in the Group Financial Review (page 39)
* Restated to reflect discontinued operations (see Notes 1 and 12).
(ii) Adjusted operating profit
CONTINUING OPERATIONS
Segmental adjusted operating profits – as above
Transfer of European PP business to F&BS1
Reclassification to discontinued operations1
As presented in the Group Financial Review (page 39)2
RESTATED*
YEAR ENDED 31 MARCH 2021
FOOD & BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
PRIMARY
PRODUCTS
£M
CENTRAL
£M
970
–
90
1 060
151
–
–
151
1 686
(1 596)
(90)
–
–
–
–
–
TOTAL
£M
2 807
(1 596)
–
1 211
RESTATED*
YEAR ENDED 31 MARCH 2021
FOOD & BEVERAGE
SOLUTIONS
£M
SUCRALOSE
£M
PRIMARY
PRODUCTS
£M
CENTRAL
£M
177
(14)
(7)
156
55
–
–
55
158
14
(172)
–
n/a
(51)
–
–
(51)
n/a
TOTAL
£M
339
–
(179)
160
13.3%
Adjusted operating margin
14.7%
36.8%
* Restated to reflect discontinued operations (see Notes 1 and 12).
1 Food & Beverage Solutions adjustment relates to the inclusion of the European Primary Products business which is not subject to the disposal of the Primient business and the inclusion of certain
operating costs which will remain with the Group post disposal. Primary Products adjustment relates to its results (excluding the European Primary Products business results) being classified as a
discontinued operation.
2 Reconciled to statutory profit for the year for continuing operations in Note 4 and for discontinued operations in Note 12.
Geographic disclosures
Revenue
TOTAL 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
YEAR ENDED 31 MARCH
2022
£M
542
325
244
1 111
163
1 757
101
1 858
3 132
2021
£M
485
269
216
970
151
1 596
90
1 686
2 807
Sales to customers (total operations) in the United Kingdom totalled £40 million (2021 – £32 million). Sales to customers (total operations) in the United States
totalled £2,222 million (2021 – £2,004 million).
From continuing operations no customer contributed more than 10% of the Group’s external sales (2021 – no customer contributed more than 10%).
Revenue – reconciliation to the consolidated income statement
Revenue – geographic disclosure – total operations
Reclassification to discontinued operations
Revenue – continuing operations
YEAR ENDED 31 MARCH
2022
£M
3 132
(1 757)
1 375
2021
£M
2 807
(1 596)
1 211
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
154
154
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5. SEGMENT INFORMATION CONTINUED
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 – total operations1
AT 31 MARCH
RESTATED*
2021
£M
22
1 067
275
190
1 554
2022
£M
29
1 168
262
190
1 649
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
1 Current year total Includes £869 million (2021 – £nil) classified as held for sale. See Note 12.
6. OPERATING PROFIT
Analysis of operating expenses by nature:
CONTINUING OPERATIONS
Revenue
Operating expenses
Cost of inventories (included in cost of sales)
Staff costs (of which £122 million (2021 – £115 million) was included in cost of sales)1
Depreciation of property, plant and equipment:
− owned assets (of which £41 million (2021 – £54 million) was included in cost of sales)
− leased assets (of which £2 million (2021 – £3 million) was included in cost of sales)
Exceptional costs
Amortisation of intangible assets:
− acquired intangible assets
− other intangible assets
Impairment of trade receivables2
Impairment of intangible assets3
Impairment of property, plant and equipment4
Total net foreign exchange losses
Other operating expenses
Operating expenses
Operating profit
NOTES
9
21
8
19
17
20
YEAR ENDED 31 MARCH
2022
£M
1 375
696
260
47
9
93
10
14
–
1
3
2
173
1 308
67
RESTATED*
2021
£M
1 211
558
253
61
10
34
10
16
(3)
4
3
–
149
1 095
116
* Restated to reflect discontinued operations (see Notes 1 and 12).
1 Excludes £13 million (2021 – £6 million) of staff costs recognised in continuing exceptional items.
2 Excludes £3 million (2021 – £nil) of impairment of trade receivables recognised in continuing exceptional items.
3 Excludes £1 million (2021 – £nil) of impairment of intangible assets recognised in continuing exceptional items.
4 Excludes £15 million (2021 – £nil) of impairment of property, plant and equipment recognised in continuing exceptional items.
The Group spend on research and development expenditure during the year was £41 million (2021 – £42 million), in constant currency £43 million.
7. AUDITOR’S REMUNERATION
Fees payable to the Company’s external auditor, Ernst & Young LLP, and its associates, were as follows:
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
− services relating to corporate finance transactions
Total
Tate & Lyle PLC Annual Report 2022
YEAR ENDED 31 MARCH
2022
£M
1.4
2.2
0.1
0.6
4.3
2021
£M
1.1
1.6
0.1
–
2.8
FINANCIAL STATEMENTS
155
155
8. EXCEPTIONAL ITEMS
Refer to Note 2 for the exceptional items accounting policy.
Exceptional (costs)/income recognised in the consolidated income statement are as follows:
CONTINUING OPERATIONS
Income statement
Costs associated with the separation and disposal of Primient
Impairment related to the disposal of Primient
US pension plan past service credit
Stabiliser product contamination
Restructuring costs
Historical legal matters
Exceptional items included in profit before tax
UK tax (charge)
US tax (charge)/credit
Exceptional items included in income tax
Exceptional items – continuing operations
DISCONTINUED OPERATIONS
Restructuring costs
Exceptional items – discontinued operations
Exceptional items – total operations
* Prior year restated to reflect discontinued operations (see Notes 1 and 12).
Set out below are the principal components of the Group’s exceptional items:
FOOTNOTES
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(g)
FOOTNOTES
YEAR ENDED 31 MARCH
2022
£M
(79)
(13)
9
(9)
(1)
–
(93)
(6)
(6)
(12)
(105)
RESTATED*
2021
£M
(19)
–
–
–
(12)
(3)
(34)
–
7
7
(27)
YEAR ENDED 31 MARCH
2022
£M
(3)
(3)
(108)
RESTATED*
2021
£M
(8)
(8)
(35)
Continuing operations
(a)
In the year ended 31 March 2022, the Group announced it had entered into an agreement to sell a controlling interest in Primient. The associated
transaction and separation costs during this year totalled £79 million which consisted principally of external advisor fees, which were recognised
within Central.
(b) Following this agreement to sell a controlling interest in Primient, the Group assessed all assets for impairment. This resulted in no impairment of the
assets held for sale. However, for the assets remaining with the Group, an impairment charge of £13 million was recognised. This charge consisted
principally of the write-off of certain items of plant and equipment in the Group’s loss-making European Primary Products business. In addition,
certain IT and other assets which are expected to have no future benefit to the Group following completion of the Transaction have been fully impaired.
(c) Following a plan amendment made to its US pension plans, the Group has recognised a net exceptional income of £9 million within Food & Beverage
Solutions. The plan amendment resulted in a past service credit of £13 million which has been partially offset by a cash charge of £4 million associated
with an incremental contribution made, of which £1 million was paid in the year. The Group expects to make two further payments in the 2023 and 2024
financial years, which are included in the total expected cash charge of £4 million.
(d) During the year, the Group’s stabilisers business was impacted by contaminated products manufactured by certain third-party suppliers in China. The
contamination impacted not only the Group, but also the wider industry. As a result, the Group recorded £6 million of costs for write-off of impacted
inventories and receivables and a further £3 million of impairment charges for certain fixed assets. The £9 million charge was recognised within Food &
Beverage Solutions.
(e) The Group recorded £1 million of restructuring costs relating to productivity and simplification projects, principally in relation to Global Operations
cost-saving initiatives. The £1 million charge was recognised within Food & Beverage Solutions.
(f) During the year, the consolidated income statement impact of historical legal matters in the US was a net nil, as exceptional income and costs offset
one another.
(g) As a result of the agreement to sell a controlling interest in Primient, the amount of brought forward UK tax losses that the Group expects to be able to
utilise in the future has reduced resulting in an exceptional tax charge of £6 million. In addition, the amount of US state tax credits that the Group expects
to be able to utilise in the future has reduced as the Group will no longer have a presence in certain states also giving rise to an exceptional tax charge of
£6 million.
Of the net £93 million exceptional charge recorded in operating profit in continuing operations during the year, £46 million was reflected in exceptional cash
flow. In addition, £12 million of exceptional costs recorded in prior year resulted in cash outflows in the year ended 31 March 2022, such that cash outflow from
exceptional items in continuing operations was £58 million. There was a further net cash outflow of £2 million recognised in discontinued operations.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
156
156
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
8. EXCEPTIONAL ITEMS CONTINUED
The most significant exceptional costs in the comparative year were costs incurred in relation to the Primient disposal as well as restructuring costs related
to the Group’s previously-announced programme to simplify the business and drive productivity. Other exceptional costs and income in the comparative year
related to historical legal matters offset by a one-off tax credit due to release of an uncertain tax position in the US.
Tax credits or charges on exceptional items are only recognised to the extent that gains or losses incurred are expected to result in tax recoverable or payable
in the future. The total tax impact of these exceptional items was a tax credit of £21 million.
Discontinued operations
The exceptional costs in the current year were restructuring costs relating to productivity and simplification projects totalling £3 million which were mainly
related to Global Operations cost saving initiatives.
Cash flows from total operations
Further details in respect of cash flows from exceptional items are set out below:
Net operating cash outflows on exceptional items
Costs associated with the separation and disposal of Primient
US pension plan past service credit
Restructuring costs
Historical legal matters
Asset remediation
Net cash outflows – continuing operations
Net cash outflows – discontinued operations
Net cash outflows – total operations
* Restated to reflect discontinued operations (see Notes 1 and 12).
FOOTNOTES
(a)
(c)
(e)
(f)
YEAR ENDED 31 MARCH
2022
£M
(48)
(1)
(5)
(4)
–
(58)
(2)
(60)
RESTATED*
2021
£M
(15)
–
(9)
1
(1)
(24)
(8)
(32)
Exceptional cash flows
The total cash adjustment relating to exceptional items presented in the cash flow statement of £36 million (inflow) (2021 – £10 million (inflow)) reflects the
exceptional items included in profit before tax of £96 million in total operations (2021 – £42 million) which were £36 million higher (2021 – £10 million higher)
than net cash outflows of £60 million (2021 – £32 million) set out in the table above.
9. STAFF COSTS
Staff costs were as follows:
CONTINUING OPERATIONS
Wages and salaries
Social security costs
Retirement benefit costs:
− defined benefit schemes
− defined contribution schemes
Share-based payments
Staff costs – continuing operations
* Restated to reflect discontinued operations (see Notes 1 and 12).
The average number of people employed by the Company and its subsidiaries, including part-time employees, is set out below:
By operating segment
Food & Beverage Solutions1
Sucralose1
Primary Products
Central
Total
YEAR ENDED 31 MARCH
2022
£M
234
21
1
7
10
273
RESTATED*
2021
£M
227
20
1
6
5
259
YEAR ENDED 31 MARCH
2022
2021
2 191
106
1 665
560
4 522
1 985
102
1 638
529
4 254
1 The Food & Beverage Solutions division (which includes Sucralose) 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 2022, the Group employed 4,591 people (2021 – 4, 441 people), of which 1,424 transitioned to Primient on completion of the Transaction on
1 April 2022. 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.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
9. STAFF COSTS CONTINUED
Key management compensation
Salaries and short-term employee benefits
Retirement benefits
Share-based payments
Total
* Restated to reflect discontinued operations (see Notes 1 and 12).
157
157
YEAR ENDED 31 MARCH
2022
£M
8
1
5
14
RESTATED*
2021
£M
8
1
3
12
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 108 to 126. Members of the Executive Committee are identified on pages 82 and 83. The aggregate gains made by
key management on the exercise of share options were £6 million (2021 – £4 million), of which £1 million related to discontinued operations (2021 – £1 million).
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
Lease interest
Net retirement benefit interest
Finance expense
Finance income – income on cash balances
Net finance expense
* Restated to reflect discontinued operations (see Notes 1 and 12).
11. INCOME TAXES
NOTE
21
31
YEAR ENDED 31 MARCH
2022
£M
(21)
(2)
(3)
(26)
1
(25)
RESTATED*
2021
£M
(20)
(2)
(5)
(27)
1
(26)
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the consolidated 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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
158
158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
11. INCOME TAXES CONTINUED
Analysis of charge for the year
CONTINUING OPERATIONS
Current tax
United Kingdom
Overseas
Tax credit on exceptional items
US exceptional tax credit
Expense in respect of previous financial years
Deferred tax
Credit for the year
Credit in respect of previous financial years
Tax credit on exceptional items
UK exceptional tax charge
US exceptional tax charge
Income tax expense – continuing operations
Statutory effective tax rate (%)
* Restated to reflect discontinued operations (see Notes 1 and 12).
Reconciliation to adjusted income tax expense
CONTINUING OPERATIONS
Income tax expense
Add back the impact of:
Tax credit on exceptional items
Tax credit on amortisation of acquired intangibles
UK exceptional tax charge
US exceptional tax charge/(credit)
Adjusted income tax expense – continuing operations
Adjusted effective tax rate (%)
* Restated to reflect discontinued operations (see Notes 1 and 12).
YEAR ENDED 31 MARCH
2022
£M
RESTATED*
2021
£M
–
(40)
5
–
(1)
(36)
12
4
16
(6)
(6)
3
(26)
5
7
–
(11)
8
2
–
–
–
(16)
38.4%
(1)
1.2%
YEAR ENDED 31 MARCH
2022
£M
(16)
(21)
(3)
6
6
(28)
19.3%
RESTATED*
2021
£M
(1)
(5)
(3)
–
(7)
(16)
12.1%
NOTES
4
At 31 March 2022, the carrying value of current tax assets totalled £11 million (2021 – £11 million) and the carrying value of the current tax liabilities totalled
£23 million (2021 – £25 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 2022, the Group has recorded current tax liabilities of £46 million (2021 – £47 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 £46 million total of uncertain tax positions held at 31 March 2022, between zero and
£5 million of the balance could be resolved in the year ending 31 March 2023. Such resolution could be favourable or unfavourable. Of the £47 million
balance at 31 March 2021, £16 million met the criteria for being released in the year ended 31 March 2022. This compares to the range of possible
outcomes coming into the year for potential releases of provisions of between zero and £12 million. The increased release was the result of an early
completion of a tax audit.
(b) Recognition of deferred tax assets: at 31 March 2022, the Group has recorded deferred tax assets of £9 million (2021 – £32 million assets), and deductible
temporary differences for which the unrecognised deferred tax asset is £209 million (2021 – £162 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.
The prior year rate benefited from the release of certain tax provisions totalling £25 million following expiry of statute of limitations as well as recognition of
certain tax credits in the United States.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
159
159
11. INCOME TAXES CONTINUED
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:
CONTINUING OPERATIONS
Profit before tax
Corporation tax charge thereon at 19% (2021 – 19%)
Adjusted for the effects of:
− non-deductible income and other permanent items
− adjustments in respect of previous financial year
− losses not currently treated as being recoverable in future periods1
− UK exceptional tax (charge)
− US exceptional tax (charge)/credit2
− tax rates below the UK rate applied on overseas earnings3
Total tax charge
YEAR ENDED 31 MARCH
2022
£M
42
(8)
–
3
(4)
(6)
(6)
5
(16)
RESTATED*
2021
£M
90
(17)
5
2
(1)
–
7
3
(1)
* Restated to reflect discontinued operations (see Notes 1 and 12).
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
2
effective tax rate.
In the year ended 31 March 2022, as a result of the agreement to sell a controlling interest in Primient, the amount of the brought forward UK tax losses that the Group expects to be able to utilise in
the future has reduced resulting in an exceptional tax charge of £6 million. In addition, the amount of US state tax credits the Group expects to be able to utilise in the future has reduced as the Group
will no longer have a presence in certain states. This resulted in an exceptional tax charge of £6 million. In the year ended 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’.
3 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 ended 31 March 2022,
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.
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
Costs associated with the separation and disposal of Primient
Impairment related to the disposal of Primient
US pension plan past service credit
Stabiliser product contamination
Restructuring costs
Historical legal matters
Exceptional items included in profit before tax
Amortisation of acquired intangible assets
Adjusting items – continuing operations
Exceptional tax items
UK tax (charge)
US tax (charge)/credit
Total exceptional items included in income tax
Total adjusting items – continuing operations
Discontinued operations
Restructuring costs
Exceptional items – discontinued operations
Held for sale adjustment1
Held for sale adjustment2 – profit after tax of joint ventures
Total adjusting items – total operations
YEAR ENDED 31 MARCH 2022
NOTES
PRE-TAX
£M
TAX CREDIT/
(CHARGE)
£M
RESTATED*
YEAR ENDED 31 MARCH 2021
PRE-TAX
£M
TAX CREDIT/
(CHARGE)
£M
8
8
8
8
8
8
19
4
8
8
4
4
8, 12
12
12
(79)
(13)
9
(9)
(1)
–
(93)
(10)
(103)
–
–
–
(103)
(3)
(3)
110
(27)
83
(23)
20
3
(2)
–
–
–
21
3
24
(6)
(6)
(12)
12
1
1
(17)
–
(17)
(4)
(19)
–
–
–
(12)
(3)
(34)
(10)
(44)
–
–
–
(44)
(8)
(8)
–
–
–
2
–
–
–
2
1
5
3
8
–
7
7
15
3
3
–
–
–
(52)
18
* Restated to reflect discontinued operations (see Notes 1 and 12).
1 Total held for sale adjustment of £110 million comprises £68 million of adjusted depreciation and amortisation included in adjusted operating profit of £312 million. The remaining £42 million is
dividend income from Almex and Bio- PDO recognised after these investments were recorded as held for sale, which is not included in either adjusted operating profit or adjusted free cash flow.
2 Held for sale adjustment relates to cessation of equity accounting (reduction in share of profit after tax of joint ventures of £27 million).
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
160
160
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
11. INCOME TAXES CONTINUED
Deferred tax
The movements in deferred tax assets and liabilities during the year were as follows:
At 1 April 2020
Software-as-a-service – restatement*
At 1 April 2020 – restated
Credited/(charged) to the income statement
− underlying
− tax effect of exceptional items
Charged to other comprehensive income
Credited/(charged) directly to equity
Acquisitions/disposals
Currency translation differences
At 31 March 2021
Credited/(charged) to the income statement
− underlying2
− tax effect of exceptional items
− exceptional tax items
Charged to other comprehensive income
(Charged)/credited directly to equity
Currency translation differences
At 31 March 2022
CAPITAL
ALLOWANCES
IN EXCESS OF
DEPRECIATION
£M
RETIREMENT
BENEFIT
OBLIGATIONS
£M
SHARE-
BASED
PAYMENTS
£M
TAX LOSSES
£M
OTHER1
£M
TOTAL
£M
(123)
3
(120)
24
2
–
–
–
8
(86)
19
–
–
–
–
(6)
(73)
43
–
43
(1)
–
(13)
–
–
(3)
26
(3)
–
–
–
–
1
24
4
–
4
1
–
–
1
–
–
6
(1)
–
–
–
(1)
–
4
20
–
20
(6)
–
–
–
–
–
14
2
–
6
–
–
–
22
44
–
44
(2)
–
–
(3)
(4)
(4)
31
(29)
(16)
6
(20)
7
2
(19)
(12)
3
(9)
16
2
(13)
(2)
(4)
1
(9)
(12)
(16)
12
(20)
6
(3)
(42)
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.
Included in the movement is a £36 million credit in relation to discontinued operations.
2
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
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 £42 million liability (2021 – £9 million liability) is presented as a £9 million deferred tax asset (2021 – £32 million
asset) and a £51 million deferred tax liability (2021 – £41 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 £828 million (2021 – £787 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 2022, no tax losses expired (2021 – £nil). Tax losses amounting to
£24 million (2021 – £7 million) will expire within five years. The remaining tax losses have no expiry date.
A deferred tax asset has not been recognised in respect of share-based payments of £1 million (2021 – £nil) as there is uncertainty as to whether taxable
profits against which these assets may be recovered will be available.
A deferred tax liability of £3 million (2021 – £2 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’s main corporation tax rate will increase from 19% to 25% from 1 April 2023. These changes have been reflected in the measurement of deferred tax
balances at the period end.
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 £20 million (2021 – £13 million expense). This included charges to deferred tax on financial
instruments of £20 million (2021 – £nil) and retirement benefit obligations of £nil (2021 – £13 million charges).
Tax on items recognised directly in equity
The total tax credit in equity was £7 million (2021 – £1 million charge). This included deferred tax credit relating to financial instruments of £7 million (2021 –
£3 million charge), a deferred tax charge on share-based payments of £1 million (2021 – £1 million credit) and a £1 million current tax credit on share-based
payments (2021 – £1 million credit).
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
161
161
12. 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. The results of discontinued operations are presented as a single amount of profit or
loss after tax in the consolidated income statement, separate from the results of continuing operations.
Non-current assets or disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. A loss for
any initial or subsequent write-down of the asset or disposal group to a revised fair value less costs to sell is recognised at each reporting date. Non-current
assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in
its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year
from the date of classification. Assets and corresponding liabilities classified as held for sale are presented separately as current items in the statement of
financial position. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale. Equity accounting
for joint ventures ceases once they are classified as held for sale.
As described in Note 1, on 12 July 2021 the Group announced that it had entered into an agreement to sell to KPS a controlling stake in Primient (refer to
Note 37 for further details). This transaction completed on 1 April 2022.
The Primient business consists of the following operations:
− Corn wet mills in the US in Decatur, Illinois; Lafayette, Indiana; and Loudon, Tennessee.
− Acidulants plants in Dayton, Ohio; Duluth, Minnesota; and Santa Rosa, Brazil.
− The Group’s existing shareholdings in two joint ventures – Almex in Guadalajara, Mexico and Bio-PDO in Loudon, Tennessee.
− Grain elevator network and bulk transfer stations in North America.
Primary Products’ European operations are not included in this transaction and are therefore not part of the discontinued operations.
The statutory results of the discontinued operations which have been included in the consolidated income statement were as follows:
DISCONTINUED OPERATIONS
£ MILLION UNLESS OTHERWISE STATED
Revenue
Operating expenses
Operating profit
Finance expense
Share of profit after tax of joint venture
Profit before tax
Income tax expense
Profit for the year from discontinued operations1
Basic earnings per share from discontinued operations (pence)
Diluted earnings per share from discontinued operations (pence)
1 Attributable to owners of the Company.
YEAR ENDED 31 MARCH
2022
£M
1 757
(1 508)
249
(3)
8
254
(44)
210
45.2p
44.7p
2021
£M
1 596
(1 425)
171
(4)
26
193
(29)
164
35.1p
34.7p
On classification as held for sale, the net assets of the Primient disposal group were measured at the lower of their carrying amount and their fair value less
costs to sell. This did not result in any impairment.
The results of the discontinued operations which have been included in the consolidated statement of cash flows were as follows:
DISCONTINUED OPERATIONS
Operating
Investing
Financing
Net cash (outflow)/inflow
YEAR ENDED 31 MARCH
2022
£M
15
(40)
(21)
(46)
2021
£M
181
(88)
(24)
69
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
–
8
–
–
8
(3)
5
1.4p
1.3p
1 596
179
(4)
26
201
(32)
169
36.5p
36.0p
15.8%
YEAR ENDED 31 MARCH
2022
£M
3
(110)
(107)
27
(80)
16
(64)
2021
£M
8
–
8
–
8
(3)
5
162
162
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12. DISCONTINUED OPERATIONS CONTINUED
The following table shows the reconciliation of the key alternative performance measures to the most directly comparable measures reported in accordance
with IFRS:
YEAR ENDED 31 MARCH 2022
YEAR ENDED 31 MARCH 2021
REPORTED
ADJUSTING
ITEMS
ADJUSTED
REPORTED
REPORTED
ADJUSTING
ITEMS
ADJUSTED
REPORTED
DISCONTINUED OPERATIONS
£ MILLION UNLESS OTHERWISE STATED
Revenue
Operating profit
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 %
1 757
249
(3)
8
254
(44)
210
45.2p
44.7p
17.5%
–
(107)
–
27
(80)
16
(64)
(13.7p)
(13.6p)
1 757
142
(3)
35
174
(28)
146
31.5p
31.1p
16.1%
1 596
171
(4)
26
193
(29)
164
35.1p
34.7p
15.4%
The following table shows the reconciliation of the adjusting items impacting adjusted profit for the years:
DISCONTINUED OPERATIONS
Exceptional costs in operating profit
Held for sale adjustment1
Total excluded from adjusted operating profit
Held for sale adjustment2 – share of profit after tax of joint ventures
Total excluded from adjusted profit before tax
Tax effect of adjusting items
Total excluded from adjusted profit for the year
1 Held for sale adjustments include: cessation of depreciation and amortisation (reduction in operating costs of £68 million) and reclassification of dividends from joint ventures (income of £42 million).
2 Held for sale adjustment relates to cessation of equity accounting (reduction in share of profit after tax of joint ventures of £27 million).
The following table shows the reconciliation of adjusted free cash flow relating to discontinued operations:
YEAR ENDED 31 MARCH
DISCONTINUED OPERATIONS
Adjusted operating profit from discontinued operations
Adjusted for:
Adjusted depreciation and adjusted amortisation1
Share-based payments charge
Changes in working capital and other non-cash
movements
Capital expenditure
Net interest and tax paid
Held for sale adjustment2
Adjusted free cash flow from discontinued operations
2022
£M
142
20
2
(182)
(73)
(33)
68
(56)
2021
£M
179
78
3
(16)
(92)
(55)
–
97
1 Total depreciation of £18 million (2021 – £77 million) and amortisation of £2 million (2021 – £7 million) less £nil (2021 – £6 million) of accelerated depreciation recognised in exceptional items.
2 Total held for sale adjustment of £110 million, comprises £68 million of adjusted depreciation and amortisation included in adjusted operating profit of £142 million. The remaining £42 million relates
to dividend income from Almex and Bio-PDO, which is not included in either adjusted operating profit or adjusted free cash flow.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
12. DISCONTINUED OPERATIONS CONTINUED
The major classes of assets and liabilities of Primient classified as held for sale at 31 March 2022 are as follows:
DISCONTINUED OPERATIONS
AAsssseettss
Goodwill and other intangible assets
Property, plant and equipment
Investments in joint ventures
Investments in equities
Inventories
Trade and other receivables
Current tax assets
Derivative financial instruments
Other current financial assets
Cash and cash equivalents
Assets classified as held for sale
LLiiaabbiilliittiieess
Retirement benefit deficit
Trade and other payables
Lease liabilities
Derivative financial instruments
Other current financial liabilities
Liabilities directly associated with assets held for sale
NET ASSETS
Cumulative income and expense recognised in other comprehensive income are shown below:
DISCONTINUED OPERATIONS
Currency translation reserve
Actuarial gain (net of deferred tax)
Net gain on cash flow hedges (net of deferred tax)
Reserves of disposal group classified as held for sale
13. EARNINGS PER SHARE
163
163
AT 31 MARCH
2022
£M
56
708
105
12
398
246
1
65
58
17
1 666
28
253
74
5
40
400
1 266
YEAR ENDED
31 MARCH
2022
£M
81
7
49
137
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 721p (2021 – 679p). The dilutive effect of share-based incentives was
5.3 million shares (2021 – 5.2 million shares).
CONTINUING
OPERATIONS
DISCONTINUED
OPERATIONS
YEAR ENDED 31 MARCH 2022
TOTAL
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)
* Restated to reflect discontinued operations (see Notes 1 and 12).
26
465.1
5.5p
470.4
5.5p
210
465.1
45.2p
470.4
44.7p
OPERATIONS
236
465.1
50.7p
470.4
50.2p
RESTATED*
YEAR ENDED 31 MARCH 2021
CONTINUING
OPERATIONS
DISCONTINUED
OPERATIONS
TOTAL
OPERATIONS
89
464.2
19.3p
469.4
19.1p
164
464.2
35.1p
469.4
34.7p
253
464.2
54.4p
469.4
53.8p
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
164
164
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
13. EARNINGS PER SHARE CONTINUED
CALCULATION OF WEIGHTED 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
YEAR ENDED 31 MARCH
2022
MILLION
465.1
–
5.3
470.4
2021
MILLION
464.2
–
5.2
469.4
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, is shown below:
CONTINUING OPERATIONS
Profit attributable to owners of the Company
Adjusting items:
− exceptional costs in operating profit
− amortisation of acquired intangible assets
− tax credit on adjusting items
− exceptional tax charge/(credit)
Adjusted profit attributable to owners of the Company
Adjusted basic earnings per share (pence) – continuing operations
Adjusted diluted earnings per share (pence) – continuing operations
* Restated to reflect discontinued operations (see Notes 1 and 12).
TOTAL OPERATIONS
Adjusted profit attributable to owners of the Company – continuing operations
Adjusted profit attributable to owners of the Company – discontinued operations
Adjusted profit attributable to owners of the Company – total operations
Adjusted basic earnings per share (pence) – total operations
Adjusted diluted earnings per share (pence) – total operations
* Restated to reflect discontinued operations (see Notes 1 and 12).
14. DIVIDENDS ON ORDINARY SHARES
NOTES
8
19
11
8, 11
4
NOTES
4
12
YEAR ENDED 31 MARCH
2022
£M
26
93
10
(24)
12
117
25.2p
24.9p
RESTATED*
2021
£M
89
34
10
(8)
(7)
118
25.4p
25.2p
YEAR ENDED 31 MARCH
2022
£M
117
146
263
56.7p
56.0p
RESTATED*
2021
£M
118
169
287
61.9p
61.2p
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
2022
PENCE
2021
PENCE
9.0
12.8
21.8
8.8
22.0
30.8
The Directors propose a final dividend for the financial year of 12.8p per ordinary share that, subject to approval by shareholders, will be paid on 5 August 2022
to shareholders who are on the Register of Members on 1 July 2022.
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
2022
£M
102
42
144
2021
£M
97
40
137
Based on the number of ordinary shares outstanding at 31 March 2022, adjusted to reflect the impact of the share consolidation on 16 May 2022, and the
proposed dividend per share, the final dividend for the financial year is expected to amount to £51 million.
For details of the special dividend paid after the year end refer to Note 37.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
165
165
15. 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
Total1
2022
£M
93
20
204
317
AT 31 MARCH
2021
£M
280
21
231
532
1
Includes a £64 million positive fair value adjustment (2021 – £44 million positive) as a result of certain inventories in the US being designated as hedged items within a fair value hedging relationship.
The majority of such inventories is classified as held for sale.
Inventories classified as held for sale of £398 million are included in Note 12.
Finished goods inventories of £3 million (2021 – £2 million) are carried at net realisable value, this being lower than cost.
In the year ended 31 March 2022, the Group recognised a write-down of inventories totalling £7 million (£3 million included in discontinued operations)
(2021 – £2 million) included in the cost of inventories.
16. 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 is AAA or equivalent (2021 – AAA
or equivalent, other than £7 million).
Short-term highly liquid investments
Cash at bank
Reclassification to assets held for sale
Cash and cash equivalents
Cash and cash equivalents classified as held for sale are included in Note 12.
The carrying amount of cash and cash equivalents was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
2022
£M
30
97
127
(17)
110
2022
£M
72
9
–
46
127
AT 31 MARCH
2021
£M
305
66
371
–
371
AT 31 MARCH
2021
£M
311
9
19
32
371
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
166
166
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
17. 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 30.
Trade receivables1
Less loss allowance provision
Trade receivables – net
Prepayments and accrued income
Other receivables
Total
1 Trade and other receivables classified as held for sale of £246 million are included in Note 12.
The amounts above do not include non-current other receivables of £1 million (2021 – £1 million).
The carrying amount of trade and other receivables was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
2022
£M
235
(12)
223
16
31
270
2022
£M
126
84
16
45
271
AT 31 MARCH
2021
£M
304
(9)
295
14
24
333
AT 31 MARCH
2021
£M
219
58
10
47
334
The gross amount of receivables, reflecting the maximum exposure to credit risk, is £283 million (2021 – £343 million).
The loss allowance provision for trade receivables as at 31 March 2022 reconciles to the opening loss allowance for that provision as follows. There is
£3 million additional impairment of trade receivables in the year, which is recognised in continuing exceptional items (2021 – £nil). The effect of expected
credit loss on other receivables is not material.
£M UNLESS OTHERWISE STATED
Expected loss rate %
Gross carrying amount
Loss allowance provision
Expected loss rate %
Gross carrying amount
Loss allowance provision
CURRENT
30 – 60 DAYS
PAST DUE
60 – 90 DAYS
PAST DUE
GREATER
THAN 90 DAYS
PAST DUE
1%
207
2
1%
284
2
6%
18
1
0%
12
–
40%
2
1
0%
1
–
100%
8
8
100%
7
7
AT 31 MARCH 2022
TOTAL
235
12
AT 31 MARCH 2021
304
9
At 1 April
Utilisation of provision
Change in loss allowance recognised in the income statement1
At 31 March
1 The 2022 charge of £3 million was recognised in exceptional items in the consolidated income statement.
YEAR ENDED 31 MARCH
2022
£M
9
–
3
12
2021
£M
12
(1)
(2)
9
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
167
167
18. INVESTMENTS IN EQUITIES
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 2021
Total (losses)/gains
− in operating profit
− in other comprehensive income
Non-qualified deferred compensation arrangements
Purchases
Disposals
Currency translation differences
Reclassification to assets held for sale
At 31 March 2022
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 interest1
Currency translation differences
At 31 March 2021
FINANCIAL
ASSETS
AT FVPL
£M
FINANCIAL
ASSETS
AT FVOCI
£M
TOTAL
INVESTMENTS
IN EQUITIES
£M
29
–
–
1
4
(4)
2
32
(12)
20
36
–
–
8
4
(3)
(11)
(5)
29
30
–
(4)
–
–
–
–
26
–
26
27
–
3
–
–
–
–
–
30
59
–
(4)
1
4
(4)
2
58
(12)
46
63
–
3
8
4
(3)
(11)
(5)
59
1 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 35.
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 £20 million (2021 –
£29 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 31.
The carrying value of equity investments was denominated in the following currencies:
US dollar
Sterling
Euro
Total
2022
£M
39
3
4
46
AT 31 MARCH
2021
£M
51
3
5
59
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
168
168
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
19. 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 consolidated income statement in the period in
which they are incurred.
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software over the contract period.
Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider’s application software, are recognised as operating
expenses when the services are received. In a contract where the cloud provider provides both the SaaS configuration and customisation as well as the
SaaS access over the contract term, then the configuration and customisation costs are expensed over the contract term only if the services provided
are not distinct and are otherwise expensed upfront as the software is configured or customised. Some of the costs incurred relate to the development
of software code that enhances or modifies, or creates additional capability to, existing on-premise systems and meets the definition of, and the
recognition criteria for, an intangible asset. These costs are recognised as intangible software assets and amortised over the useful life of the software
on a straight-line basis.
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 2021 – restated*
Additions at cost
Disposals and write offs
Adjustment for subsidiaries acquired in prior year
Currency translation differences
Reclassification to assets held for sale
At 31 March 2022
Accumulated amortisation and impairment
At 1 April 2021 – restated*
Impairment charge
Amortisation charge
Disposals and write-offs
Currency translation differences
Reclassification to assets held for sale
At 31 March 2022
Net book value at 31 March 2022
GOODWILL
£M
OTHER
ACQUIRED
INTANGIBLES
£M
TOTAL
ACQUIRED
INTANGIBLES
£M
OTHER
INTANGIBLE
ASSETS
£M
236
–
–
(2)
8
(29)
213
8
–
–
–
2
–
10
203
213
–
–
–
3
–
216
180
–
10
–
2
–
192
24
449
–
–
(2)
11
(29)
429
188
–
10
–
4
–
202
227
298
16
(6)
–
6
(112)
202
214
2
16
(6)
5
(85)
146
56
TOTAL
£M
747
16
(6)
(2)
17
(141)
631
402
2
26
(6)
9
(85)
348
283
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
169
169
19. GOODWILL AND OTHER INTANGIBLE ASSETS CONTINUED
CCoosstt
At 1 April 2020
Software-as-a-service – restatement*
At 1 April 2020 – restated
Additions at cost
Subsidiaries acquired (provisional)
Disposals and write-offs
Currency translation differences
At 31 March 2021 – restated
Accumulated amortisation and impairment
At 1 April 2020
Software-as-a-service – restatement*
At 1 April 2020 – restated
Impairment charge
Amortisation charge
Disposals and write-offs
Currency translation differences
At 31 March 2021 – restated
Net book value at 31 March 2021 – restated
GOODWILL
£M
OTHER
ACQUIRED
INTANGIBLES
£M
TOTAL
ACQUIRED
INTANGIBLES
£M
OTHER
INTANGIBLE
ASSETS
£M
TOTAL
£M
212
–
212
–
40
–
(16)
236
10
–
10
–
–
–
(2)
8
228
204
–
204
–
18
–
(9)
213
179
–
179
–
10
–
(9)
180
33
416
–
416
–
58
–
(25)
449
189
–
189
–
10
–
(11)
188
261
320
(11)
309
19
–
(4)
(26)
298
207
(2)
205
5
23
(4)
(15)
214
84
736
(11)
725
19
58
(4)
(51)
747
396
(2)
394
5
33
(4)
(26)
402
345
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
At 31 March 2022, the carrying value of other intangible assets is represented by product development of £17 million (2021 – £31 million), computer software of
£17 million (2021 – £53 million – restated) and assets under construction of £22 million (2021 – £nil).
Goodwill
The carrying amount of goodwill is allocated to groups of CGUs as follows:
Allocated by operating segment
Food & Beverage Solutions
Primary Products – included in assets held for sale (see Note 12)
Goodwill – total operations
2022
£M
203
29
232
AT 31 MARCH
2021
£M
200
28
228
Impairment tests carried out during the year
As is required, goodwill is tested annually. The goodwill allocated to the Primary Products cash-generating unit was included in the Primient disposal group
held for sale. On classification as held for sale, and again at 31 March 2022, the recoverable amount for all net assets in the Primient disposal group was
calculated based on the fair value of the Primient disposal group less costs to sell. The recoverable amount for the goodwill allocated to Food & Beverage
Solutions cash-generating units was calculated based on value-in-use.
The key assumptions for the fair value of the Primient disposal group less costs to sell are the agreed purchase price with KPS after adjustments for
management’s estimate of Primient’s cash, debt, debt-like items and working capital at completion, and transaction costs (Level 2 within the fair value
hierarchy). No impairment charge was recognised in the year ended 31 March 2022.
The key assumptions in the value-in-use model for Food & Beverage Solutions cash-generating units are derived from the Group’s Board-approved five-year
plan with the most sensitive assumptions being: 1) operating profit growth rate, 2) discount rate, and 3) long-term growth rate.
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 12% (2021 – 9%) in the Food & Beverage Solutions model.
Based on the risk profile of the assets tested, cash flows were discounted using a pre-tax rate of 9.2% in the Food & Beverage Solutions model (2021 – 9.4%).
The long-term nominal growth rate after year five does not exceed 2% (2021 – 2%), reflecting a conservative long-term assumption for the Food & Beverage
Solutions market. At the time of performing the test, very significant headroom existed for the cash-generating unit to which goodwill is allocated and there
was no reasonable scenario in which impairment would be required.
Impairment charge
No impairment charges in relation to goodwill have been recognised in the current financial year (2021 – £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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
170
170
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
20. 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 Up to the length of the lease
− Plant and machinery
No depreciation
20 to 50 years
3 to 28 years
Cost
At 1 April 2021
Additions at cost
Transfers on completion
Disposals and write-offs
Currency translation differences and other movements
Reclassification to assets held for sale
At 31 March 2022
Accumulated depreciation and impairment
At 1 April 2021
Depreciation charge
Impairment charge
Disposals and write-offs
Currency translation differences and other movements
Reclassification to assets held for sale
At 31 March 2022
Net book value at 31 March 2022
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
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
ASSETS IN THE
COURSE OF
CONSTRUCTION
£M
654
12
12
(6)
40
(427)
285
336
24
10
(6)
22
(248)
138
147
694
1
9
19
(7)
(62)
654
348
23
3
(6)
(32)
336
318
2 564
2
118
(36)
133
(1 802)
979
1 888
50
8
(36)
127
(1 344)
693
286
2 736
15
11
101
(37)
(262)
2 564
1 984
125
–
(35)
(186)
1 888
676
111
129
(130)
–
25
(71)
64
–
–
–
–
–
–
–
64
92
139
1
(120)
(1)
–
111
–
–
–
–
–
–
111
TOTAL
£M
3 329
143
–
(42)
198
(2 300)
1 328
2 224
74
18
(42)
149
(1 592)
831
497
3 522
155
21
–
(45)
(324)
3 329
2 332
148
3
(41)
(218)
2 224
1 105
Amounts relating to right-of-use assets under IFRS 16, which are included in the amounts above, are presented in more detail in Note 21. 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.
The impairment charge of £18 million (2021 – £3 million) includes £15 million (2021 – £nil) recognised within exceptional items. This includes £12 million of
impairment related to the disposal of Primient (including the write-off of certain items of plant and equipment in the Group’s loss making European Primary
Products business) and £3 million of impairment relating to items of plant and equipment impacted by the Stabiliser product contamination. Refer to Note 8.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
171
171
21. 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.
The movements in the carrying value of the Group’s right-of-use assets are summarised as follows:
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
TOTAL
£M
Right-of-use assets
At 1 April 2020
Additions to right-of-use assets
Depreciation charge
Impairment
Currency translation differences
At 31 March 2021
Additions to right-of-use assets
Depreciation charge
Impairment
Currency translation differences
Reclassification to assets held for sale
At 31 March 2022
The consolidated income statement includes the following amounts relating to leases:
CONTINUING OPERATIONS
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
48
–
(7)
(2)
(3)
36
12
(7)
(7)
2
–
36
102
14
(22)
–
(9)
85
2
(6)
–
3
(80)
4
150
14
(29)
(2)
(12)
121
14
(13)
(7)
5
(80)
40
YEAR ENDED 31 MARCH
2022
£M
9
2
–
–
–
–
11
RESTATED*
2021
£M
10
2
–
1
–
–
13
* Restated to reflect discontinued operations (see Notes 1 and 12).
The total cash outflow for leases in the year ended 31 March 2022 was £32 million (2021 – £36 million), excluding cash outflow of £nil (2021 – £1 million)
relating to leases of low-value items. The movement in the lease liability balances is shown in Note 28 and the undiscounted maturity is shown in Note 30.
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 (2021 – £1 million). The future cash outflows relating to leases
that have not yet commenced are disclosed in Note 34.
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 assesses 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. This contract is held by the Primient discontinued operations.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
172
172
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
22. 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.
Under IFRS 5, when equity accounting ceases, the results of the joint ventures are no longer reported in the Group’s consolidated income statement
and any dividends received are treated as an adjusting item in the discontinued operations of the Group’s consolidated income statement.
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 39). 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). Both Almex and Bio-PDO are included in the Primient business being sold to KPS.
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.
Under IFRS 5, when a joint venture is classified as an asset held for sale, equity accounting ceases. From 1 July 2021, the date at which the sale of the Primient
business became highly probable and hence the recognition of the Primient disposal group as held for sale, no share of results received for Almex or Bio-PDO
has been recognised. Dividends from joint ventures of £42 million recognised by Tate & Lyle after 1 July 2021 have been included within discontinued
operations as an adjusting item (Refer to Note 4).
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 ventures1
Other comprehensive expense (including foreign exchange) for the full year
Dividends paid1
Other movements (including contributions)
Reclassification to assets held for sale
At 31 March
NOTE
24
YEAR ENDED 31 MARCH
2022
£M
104
8
10
(17)
–
(105)
–
2021
£M
91
26
(6)
(4)
(3)
–
104
1 The 2022 share of profit after tax for Almex and Bio-PDO is for the three months to 30 June 2021, prior to the date of the recognition of the disposal group as held for sale on 1 July 2021. Any dividend
recognised after that date has been included as an adjusting item in the consolidated income statement. Comparative amounts are not adjusted.
23. SHARE CAPITAL AND SHARE PREMIUM
At 1 April 2020
Allotted under share option schemes
At 31 March 2021
Allotted under share option schemes
At 31 March 2022
ORDINARY SHARE
CAPITAL
£M
SHARE
PREMIUM
£M
117
–
117
–
117
406
1
407
–
407
TOTAL
£M
523
1
524
–
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 2022
YEAR ENDED 31 MARCH 2021
NUMBER OF
SHARES*
468 458 393
75 672
468 534 065
COST
£M
117
–
117
NUMBER OF
SHARES*
468 401 671
56 722
468 458 393
COST
£M
117
–
117
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
173
173
23. SHARE CAPITAL AND SHARE PREMIUM CONTINUED
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 32). 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 the EBT
At 31 March
YEAR ENDED 31 MARCH 2022
YEAR ENDED 31 MARCH 2021
NUMBER OF
SHARES
3 967 194
1 250 056
(1 150 319)
4 066 931
COST
£M
NUMBER OF
SHARES
30
5 122 967
8
(8)
30
–
(1 155 773)
3 967 194
COST
£M
38
–
(8)
30
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 (2021 – £5 million) and has been recognised within financing activities in the consolidated statement of cash flows.
NUMBER OF
SHARES
4 066 931
4 066 931
AT 31 MARCH 2022
MARKET
VALUE
£M
% OF
OUTSTANDING
SHARE CAPITAL
30
30
0.9%
0.9%
NUMBER OF
SHARES
3 967 194
3 967 194
Shares held in the EBT
Total
24. OTHER RESERVES
AT 31 MARCH 2021
MARKET
VALUE
£M
% OF
OUTSTANDING
SHARE CAPITAL
30
30
0.8%
0.8%
TOTAL
£M
239
1
12
(3)
3
(141)
39
(6)
144
82
(26)
(5)
(13)
(4)
86
(52)
10
222
At 1 April 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
Cash flow hedges:
− fair value gain in the year
− hedging gain transferred to inventory
− cost of hedging
− tax effect of the above items
FVOCI financial assets:
− fair value loss 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 of joint ventures
At 31 March 2022
HEDGING
RESERVE
£M
COST OF
HEDGING
RESERVE
£M
FVOCI
RESERVE
£M
CURRENCY
TRANSLATION
RESERVE
£M
PRE-IFRS
RESERVES
£M
(2)
1
12
(3)
–
–
–
(4)
4
82
(26)
–
(13)
–
–
–
3
50
–
–
–
–
–
–
–
–
–
–
–
(5)
–
–
–
–
–
(5)
1
–
–
–
3
–
–
–
4
–
–
–
–
(4)
–
–
–
–
136
104
–
–
–
–
(141)
39
(2)
32
–
–
–
–
–
86
(52)
7
73
–
–
–
–
–
–
–
104
–
–
–
–
–
–
–
–
104
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 consolidated 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
consolidated income statement or else recognised immediately in the consolidated income statement.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
174
174
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
24. OTHER RESERVES CONTINUED
The FVOCI reserve includes cumulative gains or losses on FVOCI assets including investments in equities.
The currency translation reserve includes:
− Gains/losses on currency translation of foreign operations: on consolidation, the results of foreign operations are translated into pound sterling at the
average rate of exchange for the period and their assets and liabilities are translated into pound 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 29.
The pre-IFRS reserve relates to amounts previously recorded in reserves prior to transition to IFRS and relates predominantly to merger reserves.
25. 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 trade and other payables
Trade payables
Social security
Accruals and deferred income
Margin payables
Other payables
Total
2022
£M
151
6
118
7
12
294
AT 31 MARCH
2021
£M
267
12
108
16
28
431
Trade and other payables classified as liabilities directly associated with the assets held for sale of £253 million are included in Note 12. There were no non-
current trade and other payables as at 31 March 2022 (2021 – £nil).
The carrying amount of trade and other payables was denominated in the following currencies:
US dollar
Euro
Sterling
Other
Total
26. BORROWINGS
2022
£M
127
76
52
39
294
AT 31 MARCH
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
consolidated 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 29).
Non-current borrowings
2,394,000 6.5% cumulative preference shares of £1 each
Industrial Revenue Bonds 2023–2036 (US$70,100,000)1
US Private Placement Notes 2023-20322
Bank loans (unsecured)
Total loan notes
Lease liabilities
Total non-current borrowings
Lease liabilities reclassified as directly associated with the assets held for sale
Total non-current borrowings as shown in statement of financial position
1 The Industrial Revenue Bonds were repaid in full during the year.
2 At 31 March 2022 and 2021, the US Private Placement Notes totalled US$800 million and are presented net of deferred arrangement fees.
Tate & Lyle PLC Annual Report 2022
2022
£M
2
–
607
–
609
104
713
(55)
658
AT 31 MARCH
2021
£M
2
51
577
–
630
116
746
–
746
FINANCIAL STATEMENTS
26. BORROWINGS CONTINUED
Current borrowings
Short-term loans and facilities
Total loan notes
Lease liabilities
Total current borrowings
Lease liabilities reclassified as directly associated with the assets held for sale
Total current borrowings as shown in statement of financial position
175
175
2022
£M
11
11
29
40
(19)
21
AT 31 MARCH
2021
£M
15
15
27
42
–
42
Lease liabilities classified as liabilities directly associated with the assets held for sale totalling £74 million are included in Note 12.
On 15 and 22 December 2021 the Industrial Revenue Bonds were repaid in full totalling $70 million (£53 million).
In the prior year 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.
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
YEAR ENDED 31 MARCH
2022
3.8%
4.1%
4.2%
1.7%
6.5%
3.3%
–
3.3%
3.4%
2.9%
3.0%
2021
3.8%
4.1%
4.2%
1.7%
6.5%
3.6%
0.2%
3.3%
3.4%
2.9%
3.0%
1 Floating rate note based on US six-month LIBOR + 1.47%.
2 As part of these arrangements the Group was required to obtain credit insurance from certain banks. The annual premium cost of the credit insurance was approximately 1% of the principal which is
not included in the effective interest rate disclosed above.
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 4.9% (2021 – 5.8%).
Credit facilities and arrangements
In the prior year the Group extended the maturity of its committed but undrawn US$800 million revolving credit facility by one year to March 2025 and
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 30. At 31 March 2022, the facility had a sterling equivalent value of £608 million (2021 – £579 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).
27. CHANGE IN WORKING CAPITAL AND OTHER NON-CASH MOVEMENTS – TOTAL OPERATIONS
Increase in inventories
Increase in receivables
Increase in payables
Movement in derivative financial instruments (excluding debt-related derivatives)
(Decrease)/increase in provisions for other liabilities and charges
Change in working capital
Other non-cash movements1
Change in working capital and other non-cash movements
1
Includes an outflow of £42 million related to the adjustment made to dividend income from Almex and Bio-PDO (IFRS 5 cessation of equity accounting).
YEAR ENDED 31 MARCH
2022
£M
(147)
(151)
79
(25)
(6)
(250)
(38)
(288)
2021
£M
(27)
(38)
40
(20)
12
(33)
9
(24)
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
176
176
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
28. NET DEBT – TOTAL OPERATIONS
Reconciliation of the movement in cash and cash equivalents to the movement in net debt:
YEAR ENDED 31 MARCH
Net debt at beginning of the year
Net (decrease)/increase in cash and cash equivalents
Net decrease/(increase) in borrowings and lease liabilities
(Increase)/decrease in net debt resulting from cash flows
Currency translation differences
Subsidiaries acquired
Leases non-cash movements
(Increase)/decrease in net debt in the year
Net debt at end of the year
Movements in the Group’s net debt were as follows:
At 1 April 2020
Movement from cash flows
Currency translation differences
Subsidiaries acquired
Leases non-cash movements
At 31 March 2021
Movement from cash flows
Currency translation differences
Leases non-cash movements
At 31 March 20221, 2
2022
£M
(417)
(257)
90
(167)
(24)
–
(18)
(209)
(626)
CASH AND CASH
EQUIVALENTS
£M
BORROWINGS
AND LEASE
LIABILITIES
£M
271
135
(35)
–
–
371
(257)
13
–
127
(722)
(113)
74
(7)
(20)
(788)
90
(37)
(18)
(753)
2021
£M
(451)
135
(113)
22
39
(7)
(20)
34
(417)
TOTAL
£M
(451)
22
39
(7)
(20)
(417)
(167)
(24)
(18)
(626)
1 Borrowings and lease liabilities include £74 million of leases included in liabilities directly associated with the assets held for sale at 31 March 2022 (2021 – £nil). Refer to Note 12.
2 Cash and cash equivalents include £17 million of cash and cash equivalents included in assets held for sale as at 31 March 2022 (2021 – £nil). Refer to Note 12.
At 31 March 2022, total liabilities arising from financing activities were £753 million (2021 – £788 million).
Net debt is denominated in the following currencies:
2022
£M
(644)
(54)
34
38
(626)
AT 31 MARCH
2021
£M
(440)
(1)
5
19
(417)
US dollar
Euro
Sterling
Other
Total
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
177
177
29. FINANCIAL INSTRUMENTS
Financial instruments comprise investments (other than investments in joint ventures), trade and other receivables, cash and cash equivalents, trade and
other payables, 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 consolidated 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 consolidated 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
consolidated 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 consolidated 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 consolidated income statement. If the hedged cash flow is no longer expected to occur, the cumulative gain or loss
is taken to the consolidated 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:
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
NOTES
AT 31 MARCH 2022
18
17
16
25
26
Investments in equities
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Forward foreign exchange contract*
Commodity derivative net assets
Net other current financial assets
− commodity pricing contracts
* Deal contingent forward.
–
497
127
(537)
(753)
–
–
–
–
–
–
–
–
(31)
76
–
–
–
–
–
–
–
–
20
58
–
–
–
–
–
–
–
58
497
127
(537)
(753)
(31)
76
20
58
497
127
(537)
(735)
(31)
76
20
The presentation in the consolidated statement of financial position of derivatives assets/(liabilities) and other financial assets/(liabilities) is shown on the
next page. The presentation for the other financial instruments has been amended in order to classify the following assets and liabilities as held for sale:
Investments in equities: £12 million, trade and other receivables: £246 million; cash and cash equivalents: £17 million; trade and other payables: £253 million;
borrowings (relates to lease liabilities): £74 million.
Investments in equities comprise financial assets recognised at fair value through profit or loss (FVPL), and financial assets recognised at fair value through
OCI (FVOCI). Further analysis is provided in Note 18.
Trade and other receivables presented above excludes £20 million (2021 – £14 million) relating to prepayments of which £4 million is classified as held for sale.
Trade and other payables presented above excludes £10 million (2021 – £12 million) relating to social security of which £4 million is included in held for sale.
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
NOTES
AT 31 MARCH 2021
Investments in equities
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Commodity derivative net assets
Net other current financial assets
− commodity pricing contracts
18
17
16
25
26
–
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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
178
178
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. FINANCIAL INSTRUMENTS CONTINUED
Financial instruments by category continued
There are no listed bonds as at 31 March 2022 (2021 – £nil). At that date, the Group held US$800 million US Private Placement Notes with a carrying value of
£607 million (2021 – £577 million) and a fair value of £589 million (2021 – £604 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 consolidated statement of financial position as follows:
Non-current derivative financial instruments
Current derivative financial instruments
Reclassified as assets/(liabilities) held for sale (Note 12)
Other non-current financial assets/(liabilities)
Other current financial assets/(liabilities)
Reclassified as assets/(liabilities) held for sale (Note 12)
AT 31 MARCH 2022
AT 31 MARCH 2021
ASSETS
£M
LIABILITIES
£M
ASSETS
£M
LIABILITIES
£M
13
68
(65)
161
–
60
(58)
2
–
(36)
5
(31)2
–
(40)
40
–
1
23
24
–
32
–
32
–
(9)
(9)
–
(26)
–
(26)
1 Presented as £3 million in non-current derivative assets and £13 million in current derivative assets.
2 Presented as £nil in non-current derivative liabilities and £31 million in current derivative liabilities.
Included in assets held for sale are cash flow hedges totalling £44 million that relate to discontinued operations, of which the most significant relate to cash flow
hedging using natural gas futures. The Group did not cease cash flow hedging such items upon classification of Primient as held for sale but will do so upon
completion of the Transaction.
Fair value hedges
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
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
2022
£M
1 bu
146
(111)
(3)
1:1
(6)
18
12
2022
£M
–
70
(21)
(2)
1:1
(2)
16
14
AT 31 MARCH
2021
£M
(1)bu
88
(71)
3
1:1
7
12
19
AT 31 MARCH
2021
£M
–
46
(13)
–
1:1
–
14
14
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
179
179
29. FINANCIAL INSTRUMENTS CONTINUED
Net investment hedges
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)
(Loss)/gain 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
2022
£M
530
(26)
530
AT 31 MARCH
2021
£M
363
39
363
Oct 2023-Aug 2032
Oct 2023-Aug 2032
1:1
(26)
26
$1.33
–
(104)
1:1
39
(39)
$1.34
–
(78)
1 Cumulative loss remaining in translation reserve in relation to US Private Placement Notes is £47 million (2021 – £22 million).
In addition, in the year ended 31 March 2022, a weighted average total of £nil million (2021 – £3 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 (2021 – £nil).
During the year, the Group entered into a deal contingent forward to hedge the currency risk associated with the consideration received from the Transaction
which was partially used for the shareholder distribution on 16 May 2022. This deal contingent forward was designated as a hedging instrument in a net
investment hedge with the hedged items being the Group’s overseas operations in the US which were sold as part of the Transaction.
DEAL CONTINGENT FORWARD USED TO NET INVESTMENT HEDGE CURRENCY TRANSLATION RISK
Notional principal amounts of deal contingent forward
Loss on the forward recognised in hedging 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
Cost of hedging recognised in reserves
AT 31 MARCH
2022
£M
464
(26)
(31)
4 April 2022
1:1
(31)
26
(5)
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 2022 is
£60 million asset (2021 – £5 million asset). There was no ineffectiveness recorded in the current or prior financial year. The most significant fair values are
attributable to natural gas cash flow hedges for which the details are shown below. The carrying value of the hedging instruments related to natural gas cash
flow hedges held at 31 March 2021 was £3 million asset.
NATURAL GAS CASH FLOW HEDGES
Nominal amounts of futures contracts (each contract expressed in 10,000 mBTU of usage)
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
AT 31 MARCH
2022
£M
3 314
–
(58)
58
1:1
58
(58)
–
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
180
180
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. FINANCIAL INSTRUMENTS CONTINUED
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. There were no transfers between Level 1 and Level 2 fair value measurements during the period, and no transfers
into or out of Level 3 fair value measurements during the year ended 31 March 2022.
The following tables illustrate the Group’s financial assets and liabilities measured at fair value and 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:
− forward foreign exchange contract
− 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 2022
18
18
–
–
–
81
–
81
–
(5)
–
(5)
–
–
–
–
36
36
(31)
–
(2)
(33)
32
26
–
–
24
82
–
–
(38)
(38)
32
26
–
81
60
199
(31)
(5)
(40)
(76)
The presentation for the financial assets and liabilities measured at fair value has been amended in order to classify the following assets and liabilities as held
for sale: financial assets at FVPL: £12 million: commodity derivatives assets: £65 million; other financial assets: £58 million; commodity derivative liabilities:
£5 million and other financial liabilities: £40 million.
NOTES
LEVEL 1
£M
LEVEL 2
£M
LEVEL 3
£M
TOTAL
£M
AT 31 MARCH 2021
18
18
–
–
–
24
–
24
(9)
–
(9)
–
–
–
–
21
21
–
–
–
29
30
–
–
11
70
–
(26)
(26)
29
30
–
24
32
115
(9)
(26)
(35)
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.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
181
181
29. FINANCIAL INSTRUMENTS CONTINUED
Financial instruments measured at fair value: the fair value hierarchy 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 2020
Income statement:
− prior year amounts settled
− current year unrealised net gain/(loss) in operating profit
Other comprehensive income
Non-qualified deferred compensation arrangements (Note 18)
Purchases
Disposals
Transfer of investment on acquiring controlling interest
Currency translation differences
At 31 March 2021
Income statement:
− prior year amounts settled
− current year unrealised net gain/(loss) in operating profit
Other comprehensive income
Non-qualified deferred compensation arrangements (Note 18)
Purchases
Disposals
Currency translation differences
Reclassification to (assets)/liabilities directly associated with the
assets held for sale
At 31 March 2022
COMMODITY
PRICING
CONTRACTS –
ASSETS
£M
COMMODITY
PRICING
CONTRACTS –
LIABILITIES
£M
FINANCIAL
ASSETS
AT FVPL
£M
67
(67)
11
–
–
–
–
–
–
11
(11)
24
–
–
–
–
–
(22)
2
(16)
15
(25)
–
–
–
–
–
–
(26)
19
(31)
–
–
–
–
–
38
–
36
–
–
–
8
4
(3)
(11)
(5)
29
–
–
–
1
4
(4)
2
(12)
20
FINANCIAL
ASSETS
AT FVOCI
£M
27
TOTAL
£M
114
–
–
3
–
–
–
–
–
30
–
–
(4)
–
–
–
–
–
26
(52)
(14)
3
8
4
(3)
(11)
(5)
44
8
(7)
(4)
1
4
(4)
2
4
48
The full impact to the consolidated 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 30. The table below describes the valuation techniques in relation to Level 3 financial instruments and isolates the
unobservable inputs.
TYPE
VALUATION TECHNIQUE
SIGNIFICANT
UNOBSERVABLE INPUTS
SENSITIVITY OF THE FAIR VALUE MEASUREMENT
IN REASONABLE CHANGES TO INPUTS
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
1. Co-products
own assessment of the
commodity, supply and
demand, as well as
expected pricing.
1. A 25% increase/(decrease) in the price of co-products would
result in a net increase/(decrease) in fair value of £23 million
(2021 – £14 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 £26 million
(2021 – £9 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 18.
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 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
182
182
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. 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. Since the departure of the Chief Financial Officer,
such responsibility was managed by the Chief Executive Office and the VP, Group Financial Controller. Most of the Group’s financing, interest rate and foreign
exchange risks 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.
On completion of the Primient disposal transaction on 1 April 2022, the Group will continue to apply cash flow hedge accounting to manage its economic price
exposure on the purchase of chemicals used in the production process. All corn procurement transferred to Primient on completion of the disposal and the
Group will procure corn from Primient in future (both for the manufacturing of corn-based finished goods in the Group’s US manufacturing sites and for corn
embedded in the finished goods manufactured by Primient and sold to the Group under long-term agreements). The Group will cease to apply fair value hedge
accounting to manage the net corn risk and will instead manage the corn price risk by using economic hedging principles such as entering into offsetting
positions with its supplier (Primient) and customers.
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.
During the year, the Group entered into a deal contingent forward to hedge the currency risk associated with the consideration received from the Transaction
which was partially used for the shareholder distribution on 16 May 2022. This deal contingent forward was designated as a hedging instrument in a net
investment hedge with the hedged items being the Group’s overseas operations in the US which were sold as part of the Transaction.
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, including the deal contingent forward entered into in
the current year, is set out in Note 29.
The following table illustrates only the Group’s sensitivity to the fluctuation of the Group’s major currencies against sterling on its consolidated income
statement and other components of equity, assuming that each exchange rate moves in isolation. The consolidated 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% change1
Sterling/euro 10% change
AT 31 MARCH 2022
AT 31 MARCH 2021
INCOME
STATEMENT -/+
£M
EQUITY -/+
£M
INCOME
STATEMENT -/+
£M
1
–
44
–
1
–
EQUITY -/+
£M
38
–
1 This excludes the impact of the deal contingent forward which matured immediately after the year end on completion of the Primient business disposal transaction.
Interest rate management
The Group has an exposure to interest rate risk, arising principally from changes in US dollar interest rates. In the 2022 and 2021 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 full risk assessment and 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 2022 that was fixed or capped for more than one year was 88% (2021 –
80%). At 31 March 2022, the longest term of any fixed rate debt held by the Group was until 2032 (2021 – until 2032).
Given the proportion of debt that is fixed rate debt, as at 31 March 2022, if interest rates increased by 100 basis points, Group profit before tax would increase
by £nil (2021 – £2 million increase). If interest rates decreased by 100 basis points, or less where applicable, Group profit before tax would increase by
£1 million (2021 – £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 (2021 – £2 million).
A significant proportion of supply-chain financing exposure relates to the discontinued operations.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
183
183
30. 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 2022, a 50% increase/decrease in the price of corn would result in a decrease/increase to the consolidated
income statement of £17 million (2021 – £1 million) and related decrease/increase in other components of equity of £1 million (2021 – £2 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 29. Full details of the valuation technique are also included in Note 29.
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 29.
Credit risk management
Counterparty credit risk arises from the placing of deposits (refer to Note 16) 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. 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’ creditworthiness. 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 177. Refer to Note 17 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 £127 million (2021 – £371 million) and had committed undrawn facilities of £608 million (2021 –
£579 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. Note that the Group received a significant increase in cash
and cash equivalents on completion of the Primient business disposal transaction on 1 April 2022 which was partially used to fund the special dividend on
16 May 2022. Refer to Note 37.
At 31 March 2022, the average maturity of the Group’s drawn financing was 6.2 years (2021 – 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 2022, 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 2022, 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.
YEAR ENDED 31 MARCH
2022
TIMES
1.1
2021
TIMES
0.6
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).
Note that the multiple of net debt to EBITDA as required for the financial covenants of the loan notes and revolving credit facility is a different measure to the
simplified calculation of net debt to EBITDA used as a Group KPI. This KPI is more directly related to information in the Group’s financial statements and is
reported in Note 4.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
184
184
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. RISK MANAGEMENT CONTINUED
Liquidity risk management continued
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 liabilities1
Interest on borrowings
Trade and other payables
Derivative contracts:
− receipts
− payments
− deal contingent forward receipt
− deal contingent forward payment
Commodity derivatives
< 1 YEAR
£M
1 – 5 YEARS
£M
> 5 YEARS
£M
AT 31 MARCH 2022
(4)
(33)
(21)
(537)
160
(160)
464
(495)
62
(228)
(88)
(71)
–
–
–
–
–
14
(382)
(24)
(44)
–
–
–
–
–
–
1 Cash flows related to leases liabilities included in discontinued operations include £21 million to be paid in less than one year, £51 million to be paid between one and five years, and £8 million to be
paid after more than five years.
Liquidity analysis
Borrowings
Lease liabilities
Interest on borrowings
Trade and other payables
Derivative contracts:
− receipts
− payments
Commodity derivatives
< 1 YEAR
£M
1 – 5 YEARS
£M
> 5 YEARS
£M
AT 31 MARCH 2021
(8)
(32)
(20)
(419)
84
(84)
12
(229)
(95)
(74)
–
–
–
2
(404)
(32)
(55)
–
–
–
–
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 £199 million in the year ended 31 March 2022 (2021 –
£203 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 2022, the long-term
credit rating from Moody’s was Baa3 (stable outlook) (2021 – Baa2) and from S&P was BBB (stable outlook) (2021 – BBB).
Capital risk management
The Group regards its total capital as follows:
Net debt
Equity attributable to owners of the Company
Total capital
NOTE
28
2022
£M
626
1 619
2 245
RESTATED*
2021
£M
417
1 453
1 870
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
185
185
31. 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 consolidated 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 consolidated income statement
in the period in which the curtailment or settlement occurs. Plan administration costs incurred by the Group are also recognised in the consolidated 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 consolidated 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 2022, the Group’s retirement benefit obligations
are in a net deficit of £107 million (2021 – deficit of £140 million). The primary driver for the reduction in net liability was the reclassification of £28 million to
liabilities directly associated with assets held for sale on the balance sheet . Therefore, on a like-for-like basis the liability reduced by £5 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 2020 financial 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. 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 18). 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 2022 was £40 million (2021 – £57 million), which excludes the £16 million
designated as held for sale. The Group paid £4 million (2021 – £3 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 £9 million (2021 – £8 million).
On disposal of the Primient business, the Group retains all US defined benefit pension schemes but certain funded non-qualified deferred compensation
arrangements as well as the unfunded post-retirement medical plan relating to employees who transitioned to the Primient business (together a net deficit
of £28 million) were disposed of and were therefore classified as held for sale.
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
Reclassification to liabilities directly associated with the
assets held for sale
Net deficit
Presented in the statement of financial position as:
Retirement benefit surplus
Retirement benefit deficit
Liabilities directly associated with the assets held for sale
AT 31 MARCH 2022
AT 31 MARCH 2021
UK PLANS*
£M
US PLANS
£M
TOTAL
£M
UK PLANS*
£M
US PLANS
£M
TOTAL
£M
(881)
(4)
(885)
867
(18)
–
(18)
3
(21)
(18)
–
(18)
(484)
(105)
(589)
472
(117)
28
(89)
20
(109)
(89)
(28)
(117)
(1 365)
(109)
(1 474)
1 339
(135)
28
(107)
23
(130)
(107)
(28)
(135)
(957)
(3)
(960)
942
(18)
–
(18)
3
(21)
(18)
–
(18)
(505)
(108)
(613)
491
(122)
–
(122)
15
(137)
(122)
–
(122)
(1 462)
(111)
(1 573)
1 433
(140)
–
(140)
18
(158)
(140)
–
(140)
*
Includes £4 million (2021 – £3 million) relating to legacy unfunded retirement benefit plans of European subsidiaries.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
186
186
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
31. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Net defined benefit asset/(liability) reconciliation
Net deficit at 1 April 2021
Income statement:
− current service costs
− US pension past service credit
− administration costs
− net interest expense US plans
Other comprehensive income:
− actual return lower than interest on plan assets
− actuarial gain/(loss):
– changes in financial assumptions
– changes in demographic assumptions
– experience against assumptions
Other movements:
− employer’s contribution
− non-qualified deferred compensation arrangements
− currency translation differences
Reclassification to liabilities directly associated with the assets held for sale
Net deficit at 31 March 2022
*
Included within US unfunded plans is the retirement medical plan of £40 million (2021 – £57 million).
Analysis of movement in the benefit obligations
At 1 April 2021
Income statement:
− current service costs
− US pension past service credit
− interest costs
Other comprehensive income:
− actuarial gain/(loss):
– changes in financial assumptions
– changes in demographic assumptions
– experience against assumptions
Other movements:
− benefits paid
− non-qualified deferred compensation arrangements
− currency translation differences
Reclassification to liabilities directly associated with the assets held for sale
At 31 March 2022
Analysis of movement in plan assets
At 1 April 2021
Income statement:
− administration costs
− interest gains
Other comprehensive income:
− actual return lower than interest on plan assets
Other movements:
− employer’s contribution
− benefits paid
− currency translation differences
At 31 March 2022
Tate & Lyle PLC Annual Report 2022
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED*
£M
(18)
(14)
(108)
–
–
(1)
–
(42)
60
2
(19)
2
–
(2)
(18)
–
(18)
–
13
(1)
1
(28)
24
(2)
(2)
–
(1)
(2)
(12)
12
–
(1)
–
–
(4)
–
1
2
1
8
–
(4)
(105)
16
(89)
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED
£M
(960)
(505)
(108)
–
–
(18)
60
2
(19)
52
–
(2)
(885)
–
(885)
–
13
(13)
24
(2)
(2)
27
(1)
(25)
(484)
12
(472)
(1)
–
(4)
1
2
1
8
–
(4)
(105)
16
(89)
UK PLANS
£M
US PLANS
FUNDED
£M
US PLANS
UNFUNDED
£M
942
(1)
18
(42)
2
(52)
–
867
491
(1)
14
(28)
–
(27)
23
472
–
–
–
–
–
–
–
–
TOTAL
£M
(140)
(1)
13
(2)
(3)
(70)
85
2
(20)
10
(1)
(8)
(135)
28
(107)
TOTAL
£M
(1 573)
(1)
13
(35)
85
2
(20)
87
(1)
(31)
(1 474)
28
(1 446)
TOTAL
£M
1 433
(2)
32
(70)
2
(79)
23
1 339
FINANCIAL STATEMENTS
187
187
31. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
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 2022
AT 31 MARCH 2021
UK
3.2%/3.8%
n/a
3.2%
3.6%
2.7%
US
2.5%
2.5%
n/a
n/a
3.4%
UK
2.7%/3.4%
n/a
2.7%
3.3%
1.9%
US
2.5%
3.0%
n/a
n/a
2.9%
21.3/22.9 years
20.5/23.3 years
21.3/22.9 years
20.6/23.3 years
23.8/25.5 years
22.5/25.2 years
23.7/25.4 years
22.5/25.2 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 (2021 – 6.5%), grading down to 6% by 2023, and used a discount rate of 3.4%
(2021 – 2.8%).
Significant assumptions
At 31 March 2022, 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
IMPACT OF
INCREASE IN
ASSUMPTION
£M
IMPACT OF
DECREASE IN
ASSUMPTION
£M
36
69
(82)
(35)
(68)
91
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.
Analysis of plan assets
Quoted1
Equities
Corporate bonds
Investment funds
Liability Driven Investments (LDI)
fixed income
Cash
Unquoted
Insurance policies
YEAR ENDED 31 MARCH 2022
YEAR ENDED 31 MARCH 2021
UK
£M
3
2
5
–
7
850
867
US
£M
–
–
–
468
–
4
472
TOTAL
£M
3
2
5
468
7
854
1 339
UK
£M
3
2
5
–
8
924
942
US
£M
–
–
–
487
–
4
491
TOTAL
£M
3
2
5
487
8
928
1 433
1 Quoted assets contain certain pooled funds where the underlying assets are quoted.
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 £4 million
(2021 – £3 million) into the US unfunded retirement medical plans and £4 million (2021 – £4 million) into the US unfunded pension plans to meet the cost of
providing benefits in the financial year.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
188
188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
31. RETIREMENT BENEFIT OBLIGATIONS CONTINUED
Maturity profile
At 31 March 2022, 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
13.9
41
173
221
10.4
38
150
174
TOTAL
£M
12.5
79
323
395
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.
The Group continues to fund ongoing administration costs of the main UK scheme, £1 million for this financial year and £1million of contributions for the other
UK scheme. In respect of the US plans no contributions were paid to the funded plans, £4 million to the unfunded pension plan with £4 million paid for health plans.
During the year ending 31 March 2023 the Group expects to contribute approximately £5 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 of approximately £11 million
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.
Risk mitigation
RISK
Investment and
longevity risks
ACTION TAKEN
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
predominantly 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 2022, £854 million (2021 – £928 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.
32. 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 consolidated 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 consolidated 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 2022 and
2021 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 £12 million (2021 – £8 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 2021 relate to the achievement of organic revenue growth, the Group adjusted return on capital
employed (ROCE), relative Total Shareholder Return and Purpose and Sustainability metrics over the performance period. Up to 30% of each award vests
dependant on compound organic revenue growth over the performance period. Up to 25% of each award vests dependant 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 based on Total Shareholder Return over
the period ranked against the Group's industry peers. The final 20% vests based on achievement of Purpose and Sustainability aims with financial year 2024
outcomes compared to stated goals.
The conditions applicable to PSP awards made in prior years relate to the achievement of the Group adjusted ROCE, volume growth in Food & Beverage
Solutions and earnings per share growth. Up to 40% of each award vests dependant on the Group's adjusted ROCE from total operations reaching specified
levels at the end of the performance period. Up to 20% of each award vests dependant on the compound annual growth in Food & Beverage Solutions volume
over the performance period, with the remaining 40% from compound annual growth in the Group’s adjusted earnings per share, over the performance period.
The performance period runs for three financial years commencing in the financial year in which the award is granted.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
189
189
32. SHARE-BASED PAYMENTS CONTINUED
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 108 to 126.
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 2022
YEAR ENDED 31 MARCH 2021
WEIGHTED
AVERAGE
EXERCISE
PRICE
(PENCE)
14p
11p
22p
8p
12p
37p
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)
9 793 339
4 704 587
(1 926 800)
(2 163 237)
10 407 889
108 054
The weighted average market price of the Company’s ordinary shares on the dates on which awards were exercised during the year was 784p (2021 – 679p).
Awards granted in the year
During the year, PSP awards were granted over 3,600,659 shares (2021 – 3,324,590 shares), RSAs were granted over 932,309 shares (2021 – 80,253 shares).
Shares issued under the Group Bonus Plan in the year were 77,640 (2021 – 26,433 shares) and Sharesave options were granted over 93,979 shares (2021 –
60,645 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 2022
YEAR ENDED 31 MARCH 2021
PSP
608p
–
738p
SHARESAVE
141p
542p
649p
PSP
605p
–
664p
SHARESAVE
116p
531p
656p
3 years
3.3/5.3 years
3 years
3.3/5.3 years
n/a
0.39%/0.78%
n/a
-0.05%/0.03%
2.08%
n/a
2.39%
25%
4.45%
n/a
4.51%
25%
There were 77,640 shares issued under the Group Bonus Plan during the year (2021 – 26,433 shares). 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 2022
AT 31 MARCH 2021
WEIGHTED
AVERAGE
CONTRACTUAL
LIFE
(MONTHS)
36.7
33.4
36.7
WEIGHTED
AVERAGE
CONTRACTUAL
LIFE
(MONTHS)
48.7
28.8
48.2
AWARDS
(NUMBER)
9 542 752
250 587
9 793 339
AWARDS
(NUMBER)
10 171 846
236 043
10 407 889
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
190
190
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
33. 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 2020
Provided in the year
Released in the year
Utilised in the year
Currency translation differences
At 31 March 2021
Provided in the year
Released in the year
Utilised in the year
Currency translation differences
At 31 March 2022
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
7
4
–
(3)
(1)
7
4
–
(6)
–
5
7
2
–
(6)
–
3
–
(1)
(2)
–
–
7
–
–
(7)
–
–
–
–
–
–
–
11
17
(2)
–
(1)
25
13
(8)
(13)
1
18
2022
£M
11
12
23
TOTAL
£M
32
23
(2)
(16)
(2)
35
17
(9)
(21)
1
23
AT 31 MARCH
2021
£M
24
11
35
Insurance provisions include amounts provided by the Group’s captive insurance subsidiary in respect of the expected level of insurance claims.
The difference between the carrying value and the discounted present value was not material in either year. The amount and timing of settlement in respect
of these provisions are uncertain and dependent on various factors that are not always within management’s control.
Contingent liabilities
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.
The contingent liability previously disclosed with respect to the Passaic River matter is no longer expected to be material. The matter continues with the U.S.
Environmental Protection Agency.
It is not expected that claims and litigation existing at 31 March 2022 will have a material adverse effect on the Group’s financial position.
34. COMMITMENTS
Total commitments for the purchase of tangible and intangible non-current assets are £51 million (2021 – £33 million).
In addition, the Group has various lease contracts that have not yet commenced as at 31 March 2022. The future lease payments for these non-cancellable
lease contracts are £nil within one year, £9 million within five years and £2 million thereafter. These contracts are held by the Primient discontinued operations.
Commitments in respect of retirement benefit obligations are detailed in Note 31.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
191
191
35. 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 consolidated 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 consolidated income statement. Any shortfall, or negative goodwill, is recognised immediately as a gain
in the consolidated 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 consolidated income statement.
In the 2022 financial year:
No acquisitions or disposals were completed.
Quantum
On 31 March 2022, the Group announced it had signed an agreement to acquire Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a leading
prebiotic dietary fibre business in China from ChemPartner Pharmatech Co., Ltd (ChemPartner) for a total consideration of US$237 million. Closing of the
transaction is expected to occur in the second quarter of the 2022 calendar year.
The acquisition of Quantum which engages in the research, development, production and sale of fructo-oligosaccharides and galacto-oligosaccharides,
significantly strengthens Tate & Lyle's position as a leading global player in dietary fibres, bringing a high-quality portfolio of speciality fibres, strong R&D
capabilities and proprietary manufacturing processes and technologies. The acquisition expands Tate & Lyle's ability to provide added-fibre solutions for its
customers across a range of categories including dairy, beverages, bakery and nutrition (including infant nutrition), and to meet growing consumer interest in
gut health. It also significantly expands Tate & Lyle's presence in China and Asia, and extends its capabilities to create solutions across food and drink utilising
its leading speciality ingredient portfolio.
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. In the year ended 31 March 2022, following the
finalisation of the completion accounts and working capital adjustment, the final all cash consideration in respect of the acquisition is £60 million (including
the fair value of the 15% that the Group already owned) (a decrease of £1 million from the £61 million provisional consideration disclosed at 31 March 2021)
and the final fair value for identifiable net assets is £26 million, including £1 million cash and cash equivalents (an increase of £1 million compared to the
provisional fair value for identifiable net assets of £25 million disclosed at 31 March 2021). This has resulted in a final goodwill balance at the date of acquisition
of £34 million (a decrease of £2 million compared to the provisional goodwill of £36 million disclosed at 31 March 2021). This is not deductible for tax purposes.
Refer to Note 19.
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 that year.
Chaodee Modified Starch Co., Ltd (‘CMS’)
On 10 February 2021, the Group acquired 85% of the shares of CMS (increased to 93% at 31 March 2022 following the funding of capacity expansion in which
the minority shareholder did not participate), a well-established tapioca modified food starch manufacturer located in Thailand. In the year ended 31 March 2022,
there have been no changes to the provisional consideration, provisional fair value for identifiable net assets and resultant goodwill disclosed in the prior year
Annual Report.
The Group has elected to measure the non-controlling interests in the acquiree at fair value.
36. 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
2022
£M
147
–
13
–
2021
£M
128
–
6
–
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
192
192
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
37. EVENTS AFTER THE BALANCE SHEET DATE
Sale of controlling stake in Primient
Further to the announcement of 12 July 2021, the Group announced that on 1 April 2022 it completed the sale of a controlling stake in Primient, comprising its
Primary Products business in North America and Latin America and its interests in the Almidones Mexicanos S.A. de C.V. and DuPont Tate & Lyle Bio-
Products Company, LLC joint ventures, to KPS Capital Partners, LP (‘KPS’). KPS now holds a 50.1% interest in Primient. The Group holds a 49.9% interest in
Primient. The provisional cash consideration is US$1.4 billion and US$30 million of contingent consideration. The exercise to finalise the completion accounts
is in progress and will be disclosed in the Group’s Interim Results that will be published in November 2022. Details of assets held for sale are provided in
Note 12.
Special dividend
Following the announcement on 1 April 2022 of the completion of the sale of a controlling stake in Primient and following shareholder approval at the General
Meeting held on 26 April 2022, the Group returned £497 million on 16 May 2022 to ordinary shareholders by way of a special dividend of £1.07 per existing
ordinary share in the capital of Tate & Lyle PLC . In order to maintain the comparability, so far as possible, of Tate & Lyle PLC’s share price before and after the
special dividend, the Group also completed a share consolidation resulting in ordinary shareholders receiving six new ordinary shares with a nominal value of
29 1⁄6 pence each for every seven existing ordinary shares that they held. The new ordinary shares are traded on the London Stock Exchange in the same way
as the previously existing ordinary shares and have the same rights under the Articles to the previously existing ordinary shares. The total number of ordinary
shares after the share consolidation was 401.6 million shares.
A return of funds was also completed for ADR holders on the ADR register on 19 May 2022. As a result of the share consolidation, existing ADRs were
cancelled and new ADRs issued in the ratio of six new ADRs to replace every seven existing ADRs.
38. CHANGE IN ACCOUNTING POLICY
In April 2021 the IFRS Interpretations Committee published an agenda decision regarding the treatment of Configuration or Customisation Costs in a Cloud
Computing Arrangement under IAS 38 – Intangible Assets. During the year ended 31 March 2022, the Group has revised its accounting policy in relation to
upfront configuration or customisation costs incurred in implementing Software-as-a-Service (SaaS) arrangements in response to this IFRS Interpretations
Committee decision. In addition, the Group has assessed the impact of this change in accounting policy on any cloud computing arrangements entered into
during the prior periods and restated the comparative figures. This has impacted the balance sheet and retained earnings only as the consolidated income
statement impact on earlier periods was not material. A balance sheet as at the beginning of the preceding year (i.e. at 1 April 2020) has not been presented
on the grounds of materiality, however the impact of the change and the revised accounting policy is shown below.
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software over the contract period. Costs
incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider’s application software, are recognised as operating expenses
when the services are received. In a contract where the cloud provider provides both the SaaS configuration and customisation as well as the SaaS access over
the contract term, then the configuration and customisation costs are expensed over the contract term only if the services provided are not distinct and are
otherwise expensed upfront as the software is configured or customised. Some of the costs incurred relate to the development of software code that enhances
or modifies, or creates additional capability to, existing on-premise systems and meets the definition of, and the recognition criteria for, an intangible asset.
These costs are recognised as intangible software assets and amortised over the useful life of the software on a straight-line basis. The useful lives of these
assets are reviewed at least at the end of each financial year, and any change accounted for prospectively as a change in accounting estimate.
The impact of the adoption of this revised accounting policy is set out below. Comparatives have been restated accordingly.
At 1 April 2020
Goodwill and other intangible assets
Total assets
Deferred tax liabilities
Total liabilities
Retained earnings
Total equity
At 31 March 2021
Goodwill and other intangible assets
Total assets
Deferred tax liabilities
Total liabilities
Retained earnings
Total equity
Operating profit*
Profit for the year ended 31 March 2021*
* Before restatement for discontinued operations.
IMPACT OF CHANGE IN ACCOUNTING POLICY
AS REPORTED
£M
ADJUSTMENT
£M
AS RESTATED
£M
340
2 851
(42)
(1 452)
629
1 399
354
2 976
(44)
(1 516)
783
1 460
287
253
(9)
(9)
3
3
(6)
(6)
(9)
(9)
3
3
(6)
(6)
–
–
331
2 842
(39)
(1 449)
623
1 393
345
2 967
(41)
(1 513)
777
1 454
287
253
There was no impact on the Group’s basic or diluted earnings per share and no impact on the total operating, investing or financing cash flows for the year
ended 31 March 2021.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
39. 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
193
193
United Kingdom11
5 Marble Arch, London W1H 7EJ, UK
Astaxanthin Manufacturing Limited
G.C. Hahn and Company Limited2
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
Hahntech International Limited
Tate & Lyle Export Holdings Limited2
5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Group Services Limited
5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Holdings Americas Limited 5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Holdings Limited3
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Mold UK Limited
5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Industries Limited
Tate & Lyle International Finance PLC2 5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Investments America
5 Marble Arch, London W1H 7EJ, UK
Limited3
Tate & Lyle Investments Brazil Limited 5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Investments Limited2,3
5 Marble Arch, London W1H 7EJ, UK
1209 North Orange Street,
Tate & Lyle L.P.
Wilmington, DE 19801, USA
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
5 Marble Arch, London W1H 7EJ, UK
Tate & Lyle Overseas Limited
Tate & Lyle Pension Trust Limited2
Tate & Lyle Technology Limited2
Tate & Lyle UK Limited2
Tate & Lyle Ventures II LP (99.5%)
Tate & Lyle Ventures Limited2
Tate & Lyle Ventures LP (99.5%)
Argentina
Tate & Lyle Argentina SA4
Primary Products Ingredients SRL4
Australia
Tate & Lyle ANZ Pty Limited
Belgium
Tate & Lyle Services (Belgium) N.V.2
Bermuda
Tate & Lyle Management & Finance
Limited
Brazil
Primary Products Ingredients Brasil
S.A.4, 5
G.C. Hahn & Co. do Brasil
Estabilizantes e Tecnologia para
Alimentos Ltda.4
Tate & Lyle Gemacom Tech Indústria e
Comércio S.A.4
San Martín 140, 14th Floor,
City of Buenos Aires, Argentina
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
Tate & Lyle Solutions Brasil Limitada 4 Rua Dr. Rubens Gomes Bueno, No. 691,
British Virgin Islands
SGF (Asia) Co., Limited
SGF Investment Co., Limited
Canada
Primary Products Ingredients Canada
Limited5
Tate & Lyle Solutions Canada Limited
Torre Sigma, 10th floor, Bairro Várzea
de Baixo, 04730-903, Brazil
Kingston Chambers, PO Box 173, Road
Town, Tortola, British Virgin Islands
Kingston Chambers, PO Box 173, Road
Town, Tortola, British Virgin Islands
Suite 300, 77 Westmorland Street,
Fredericton, NB E3B 4Y9, Canada
Suite 300, 77 Westmorland Street,
Fredericton, NB E3B 4Y9, Canada
Cayman Islands
Sweet Green Fields Group Co., Limited PO Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands
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
Tate & Lyle Ingredients France S.A.S.
Germany
G.C. Hahn & Co. Stabilisierungstechnik
GmbH
G.C. Hahn & Co.
Cooperationsgesellschaft mbH
Tate & Lyle Germany GmbH
Gibraltar
Tate & Lyle Insurance (Gibraltar)
Limited
Greece
Tate & Lyle Greece A.E.
Hong Kong
Sweet Green Fields International
Co., Limited
Italy
Tate & Lyle Italia S.P.A.
Ivory Coast
Tate & Lyle Ivory Coast4
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 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
3-5 Rue Saint-Georges, 75009, Paris,
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
Via Verdi, 1-CAP 20002 Ossona, Milano,
Italy
Abidjan Cocody 2, Plateaux 01, BP 659
ABJ 01, Côte d’Ivoire
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
194
194
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
39. RELATED UNDERTAKINGS CONTINUED
COMPANY NAME
REGISTERED ADDRESS
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
COMPANY NAME
USA
Staley Holdings LLC
Staley International Inc.
Sweet Green Fields USA LLC
Tate & Lyle Finance LLC
TLHUS, Inc.
Primary Products Ingredients
Americas LLC5
Tate & Lyle Sucralose LLC
TLI Holding LLC
Primary Products Grain, LLC5
22, Rue du Parc, Casa Théâtre Centre,
Anfa, Casablanca, Morocco
Tate & Lyle Malic Acid LLC
1541 KA, Koog aan de Zaan,
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
Tate & Lyle Sugar Holdings, Inc.
Tate & Lyle Americas LLC
Tate & Lyle Citric Acid LLC
Tate & Lyle Solutions USA LLC
Tate & Lyle PP Americas LLC
3 Biopolis Drive, #05-11-16 Synapse,
138623 Singapore
114, Boleráz, 91908, Slovakia
114, Boleráz, 91908, Slovakia
Primary Products Investments LLC5
Primary Products Holdings LLC5
Primary Products Finance LLC5
1 Gravel Drive, Kya Sand Business Park,
Kya Sand, 2163, South Africa
Tate & Lyle Domestic International
Sales II Corporation
REGISTERED ADDRESS
1209 North Orange Street,
Wilmington, DE 19801, USA
1209 North Orange Street,
Wilmington, DE 19801, USA
11 Bellwether Way, Suite 305,
Bellingham WA 98225, 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
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
Calle Príncipe de Vergara 112, Planta
Cuarta, 28002, Madrid, Spain
Ps. de la Constitución 10, Entlo. Dcha.,
50008, 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
Dan Khun Thot District, Nakhom
Ratchasima Province, Thailand
Esentepe Mah., Büyükdere Cad.,
193 Plaza Kat: 2 193/235A14 Şişli,
İstanbul, Turkey
Mala Olexandriwka, Zentralna-Str.
2-B, Borispol, 08320 Kiev, Ukraine
Joint Ventures
COMPANY NAME
Mexico
Almidones Mexicanos S.A. de C.V.4, 5
(50%)
Promotora de Productos y Mercados
Mexicanos, S.A. de C.V.4, 5 (50%)
Estación de Transferencia
Coatzacoalcos, S.A. de C.V.4, 5 (50%)
USA
DuPont Tate & Lyle Bio Products
Company, LLC4, 5 (50%)
REGISTERED ADDRESS
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).
5 Disposed of on 1 April 2022 as part of the Primient Transaction.
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 ended 31 March.
Unit JLT-PH2-RET-X5, Detached Retail
X5, Jumeirah Lakes Towers, Dubai,
United Arab Emirates
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 consolidated
income statement.
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.
Netherlands
Nederlandse Glucose Industrie B.V.
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.
Slovakia
Tate & Lyle Boleráz 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
(93%)
Turkey
Tate and Lyle Turkey Gıda Hizmetleri
Anonim Şirketi
Ukraine
PII G.C. Hahn & Co. Kiev4
United Arab Emirates
Tate & Lyle DMCC
Tate & Lyle PLC Annual Report 2022
Tate & Lyle Trading (Thailand) Limited No. 345, Moo 14, Hin Dat Subdistrict,
FINANCIAL STATEMENTS
PARENT COMPANY BALANCE SHEET
195
195
ASSETS
Fixed assets
Tangible fixed assets (including right-of-use assets of £12 million (2021 – £5 million))
Intangible assets
Investments in subsidiary undertakings
Total
Current assets
Debtors
Creditors – amounts falling due within one year
Borrowings (including lease liabilities of £2 million (2021 – £1 million))
Provisions for liabilities
Net current assets
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Borrowings (including lease liabilities of £17 million (2021 – £7 million))
Provisions for liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Capital redemption reserves
Retained earnings
Total shareholders’ funds
NOTES
2022
£M
AT 31 MARCH
RESTATED*
2021
£M
2
2
2
4
5
6
5
6
7
9
16
2
1 092
1 110
1 617
1 617
(1 271)
(2)
(1)
343
1 453
(2)
(17)
(3)
5
3
1 085
1 093
1 516
1 516
(1 227)
(1)
–
288
1 381
(2)
(7)
–
1 431
1 372
117
407
8
899
117
407
8
840
1 431
1 372
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
The Company recognised profit for the year of £204 million (2021 – £153 million).
The notes on pages 197 to 201 form part of these financial statements. The Parent Company’s financial statements on pages 195 to 201 were approved by the
Board of Directors on 8 June 2022 and signed on its behalf by:
Nick Hampton
Director
Andy Henley
VP, Group Financial Controller
Tate & Lyle PLC
Registered number: 76535
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
196
196
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
At 1 April 2020
Software-as-a-Service restatement
At 1 April 2020 – restated*
Profit for the year
Purchase of own shares including net settlement
Issue of share capital
Share-based payments
Dividends paid
At 31 March 2021
Profit for the year
Purchase of own shares including net settlement
Share-based payments
Dividends paid
At 31 March 2022
CALLED UP
SHARE
CAPITAL
£M
SHARE
PREMIUM
ACCOUNT
£M
CAPITAL
REDEMPTION
RESERVES
£M
RETAINED
EARNINGS
£M
TOTAL
EQUITY
£M
117
–
117
–
–
–
–
–
406
–
406
–
–
1
–
–
117
407
–
–
–
–
–
–
–
–
117
407
8
–
8
–
–
–
–
–
8
–
–
–
–
8
821
(2)
819
153
(5)
–
10
(137)
840
204
(13)
12
(144)
899
1 352
(2)
1 350
153
(5)
1
10
(137)
1 372
204
(13)
12
(144)
1 431
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
At 31 March 2022, the Company had realised profits available for distribution in excess of £745 million (2021 – in excess of £725 million).
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
197
197
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 2022, with comparative figures as at 31 March 2021.
For the reasons set out on pages 145 and 146, 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 11.
The results of the Company are included in the preceding Group consolidated
financial statements.
The following disclosure exemptions from the requirements of UK adopted
International Accounting Standards 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.
Restatement of comparative financial information – upfront configuration or
customisation costs incurred in implementing Software-as-a-Service
arrangements
In April 2021 the IFRS Interpretations Committee published an agenda
decision regarding the treatment of Configuration or Customisation Costs in
a Cloud Computing Arrangement under IAS 38 – Intangible Assets. During
the year ended 31 March 2022, the Company has revised its accounting
policy in relation to upfront configuration or customisation costs incurred
in implementing Software-as-a-Service (SaaS) arrangements in response
to this IFRS Interpretations Committee decision. In addition, the Company
has assessed the impact of this change in accounting policy on any cloud
computing arrangements entered into during the prior periods and restated
the comparative figures. This has impacted the balance sheet and retained
earnings only as the income statement impact on earlier periods was not
material. A balance sheet as at the beginning of the preceding period
(i.e. at 1 April 2020) has not been presented on the grounds of materiality,
however the impact of the change is shown in Note 13.
Accounting policies
Investments in subsidiary undertakings
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.
Tangible fixed assets
Land and buildings mainly comprise of administrative facilities. Plant and
machinery mainly comprise of office equipment. Fixed assets are stated at
historical cost less accumulated depreciation and impairment and are
reviewed for impairment when any changes in circumstances indicate that
their carrying amounts may not be recoverable.
Intangible assets
Intangible assets comprise computer software and are amortised on a
straight-line basis over the periods of their expected benefit to the Company.
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
and are reviewed for impairment when any changes in circumstances
indicate that their carrying amounts may not be recoverable.
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 32 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 10.
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.
Creditors
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
198
198
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
2. FIXED ASSETS
Cost
At 1 April 2021
Software-as-a-Service restatement
At 1 April 2021 – restated*
Additions
At 31 March 2022
Accumulated depreciation/amortisation/impairment
At 1 April 2021
Depreciation/amortisation/impairment charge
Transfer between categories
At 31 March 2022
Net book value at 31 March 2021 – restated*
Net book value at 31 March 2022
LAND AND
BUILDINGS
£M
PLANT AND
MACHINERY
£M
RESTATED*
INTANGIBLE
ASSETS
£M
INVESTMENTS IN
SUBSIDIARIES
£M
9
–
9
16
25
5
5
(1)
9
4
16
5
–
5
–
5
4
–
1
5
1
–
9
(2)
7
–
7
4
1
–
5
3
2
1 235
–
1 235
7
1 242
150
–
–
150
1 085
1 092
* Prior year restated for change in accounting policy (to adopt the requirements of Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
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 included in land and buildings in Note 2 Fixed Assets.
The total cash outflow for leases in the year ended 31 March 2022 was £2 million (2021 – £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
2022
£M
39
1 567
10
1
1 617
AT 31 MARCH
2021
£M
29
1 479
5
3
1 516
1 The effective interest rate applicable to amounts owed by subsidiary undertakings at 31 March 2022 is 1.6% (2021 – 1.7%). 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 (2021 – £nil).
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
5. CREDITORS
Due within one year
Amounts owed to subsidiary undertakings1
Other creditors
Accruals and deferred income
Total
199
199
2022
£M
1 221
5
45
1 271
AT 31 MARCH
2021
£M
1 195
7
25
1 227
1 The effective interest rate applicable to amounts owed to subsidiary undertakings at 31 March 2022 was 1.9% (2021 – 2.2%). Amounts owed to subsidiary undertakings are repayable on demand.
There is no security for non-trading amounts.
Due after one year
Creditors – preference shares
Total
AT 31 MARCH
2021
£M
2
2
2022
£M
2
2
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 2022, borrowings of £19 million (2021 – £8 million) relate to lease liabilities. £2 million (2021 – £1 million) of the total relates to current lease
liabilities. Lease liabilities are measured at the present value of the future lease payments, discounted using lessee’s incremental borrowing rate at the lease
commencement date.
7. PROVISION FOR LIABILITIES
Due within one year
Other provisions
Due after one year
Other provisions
AT 31 MARCH
2022
£M
2021
£M
1
3
–
–
8. GUARANTEES AND FINANCIAL COMMITMENTS
At 31 March 2022, the Company had given guarantees in respect of committed financing of certain of its subsidiaries and joint ventures totalling £1,312 million
(2021 – £1,288 million), against which amounts drawn totalled £635 million (2021 – £647 million). The Company had given guarantees in respect of lease
commitments of certain of its subsidiaries and joint ventures totalling £192 million (2021 – £192 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 12.
At 31 March 2022, the Company had outstanding capital commitments of £1 million (2021 – £nil).
9. 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
* The nominal value of each share is 25 pence.
YEAR ENDED 31 MARCH 2022
YEAR ENDED 31 MARCH 2021
NUMBER OF
SHARES*
468 458 393
75 672
468 534 065
COST
£M
117
–
117
NUMBER OF
SHARES*
468 401 671
56 722
468 458 393
COST
£M
117
–
117
Refer to Note 23 in the consolidated financial statements for details of movement in share premium and shares held in the Employee Benefit Trust.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
200
200
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
10. 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
2022
PENCE
2021
PENCE
9.0
12.8
21.8
8.8
22.0
30.8
The Directors propose a final dividend for the financial year of 12.8p per ordinary share that, subject to approval by shareholders, will be paid on 5 August 2022
to shareholders who are on the Register of Members on 1 July 2022.
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
2022
£M
102
42
144
2021
£M
97
40
137
Based on the number of ordinary shares outstanding at 31 March 2022, adjusted to reflect the impact of the share consolidation on 16 May 2022, and the
proposed dividend per share, the final dividend for the financial year is expected to amount to £51 million.
11. PROFIT AND LOSS ACCOUNT DISCLOSURES
The Company recognised a profit for the year of £204 million (2021 – £153 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 (2021 –
£0.1 million). Refer to Note 7 of the consolidated financial statement.
The Company employed an average of 155 people (including Directors) during the year (2021 – 153). Staff costs are shown below:
Wages and salaries
Social security costs
Other pension costs
Share-based incentives
Total
YEAR ENDED 31 MARCH
2022
£M
31
5
3
5
44
2021
£M
27
4
3
2
36
Directors’ emoluments disclosures are provided in the Directors’ Remuneration Report on pages 108 to 126 and in Note 9 of the consolidated financial statements.
No deferred tax assets have been recognised in respect of tax losses of £341 million (2021 – £341 million) as there is uncertainty as to whether taxable profits
against which these assets may be recovered will be available.
12. 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 £2 million
(2021 – £1 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.
Tate & Lyle PLC Annual Report 2022
FINANCIAL STATEMENTS
201
201
13. CHANGE IN ACCOUNTING POLICY
In April 2021 the IFRS Interpretations Committee published an agenda decision regarding the treatment of Configuration or Customisation Costs in a Cloud
Computing Arrangement under IAS 38 – Intangible Assets. During the year ended 31 March 2022, the Company has revised its accounting policy in relation to
upfront configuration or customisation costs incurred in implementing Software-as-a-Service (SaaS) arrangements in response to this IFRS Interpretations
Committee decision. In addition, the Company has assessed the impact of this change in accounting policy on any cloud computing arrangements entered into
during the prior periods and restated the comparative figures. This has impacted the balance sheet and retained earnings only as the income statement
impact on earlier periods was not material. A balance sheet as at the beginning of the preceding year (i.e. at 1 April 2020) has not been presented on the
grounds of materiality, however the impact of the change and the revised accounting policy is shown below.
SaaS arrangements are service contracts providing the Company with the right to access the cloud provider’s application software over the contract period.
Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider’s application software, are recognised as operating
expenses when the services are received. In a contract where the cloud provider provides both the SaaS configuration and customisation as well as the SaaS
access over the contract term, then the configuration and customisation costs are expensed over the contract term only if the services provided are not distinct
and are otherwise expensed upfront as the software is configured or customised. Some of the costs incurred relate to the development of software code that
enhances or modifies, or creates additional capability to, existing on-premise systems and meets the definition of, and the recognition criteria for, an intangible
asset. These costs are recognised as intangible software assets and amortised over the useful life of the software on a straight-line basis. The useful lives of
these assets are reviewed at least at the end of each financial year, and any change accounted for prospectively as a change in accounting estimate.
The impact of the adoption of this revised accounting policy is set out below. Comparatives have been restated accordingly.
At 1 April 2020
Intangible assets
Total assets
Retained earnings
Total equity
At 31 March 2021
Intangible assets
Total assets
Retained earnings
Total equity
IMPACT OF CHANGE IN ACCOUNTING POLICY
AS REPORTED
£M
ADJUSTMENT
£M
AS RESTATED
£M
4
1 092
821
1 352
5
1 095
842
1 374
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
2
1 090
819
1 350
3
1 093
840
1 372
14. EVENTS AFTER THE BALANCE SHEET DATE
Special dividend
Following the announcement on 1 April 2022 of the completion of the sale of a controlling stake in Primient and following shareholder approval at the General
Meeting held on 26 April 2022, the Company returned £497 million on 16 May 2022 to ordinary shareholders by way of a special dividend of £1.07 per existing
ordinary share in the capital of Tate & Lyle PLC . In order to maintain the comparability, so far as possible, of Tate & Lyle PLC’s share price before and after the
special dividend, the Company also completed a share consolidation resulting in ordinary shareholders receiving six new ordinary shares with a nominal value
of 29 1⁄6 pence each for every seven existing ordinary shares that they held. The new ordinary shares are traded on the London Stock Exchange in the same
way as the previously existing ordinary shares and have the same rights under the Articles to the previously existing ordinary shares. The total number of
ordinary shares after the share consolidation was 401.6 million shares.
A return of funds was also completed for ADR holders on the ADR register on 19 May 2022. As a result of the share consolidation, existing ADRs were
cancelled and new ADRs issued in the ratio of six new ADRs to replace every seven existing ADRs.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
202
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O
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A
M
R
O
F
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F
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S
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Tate & Lyle PLC Annual Report 2022
203
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IN THIS SECTION
204 Group five-year summary
206 Additional Information
207 Information for investors
208 Glossary
208 Definitions/explanatory notes
Tate & Lyle PLC Annual Report 2022
204
204
GROUP FIVE-YEAR SUMMARY
The results for the years 2018, 2019 and 2020 have not been restated to reflect discontinued operations.
Results summary
Continuing operations
Revenue
Food & Beverage Solutions
Sucralose
Primary Products
Central
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 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
2018*
£M
2019
£M
2020
£M
2021**
£M
2022
£M
YEAR ENDED 31 MARCH
2 710
2 755
2 882
137
55
166
(58)
300
(12)
2
290
(27)
(5)
(32)
28
286
(23)
263
2
–
265
296
143
61
148
(47)
305
(11)
(58)
236
(26)
–
(26)
30
240
(59)
181
–
–
181
309
162
63
158
(52)
331
(11)
(24)
296
(28)
–
(28)
28
296
(51)
245
–
–
245
331
1 211
156
1 375
160
55
–
(51)
160
(10)
(34)
116
(26)
–
(26)
–
90
(1)
89
164
–
253
134
61
–
(51)
170
(10)
(93)
67
(25)
–
(25)
–
42
(16)
26
210
–
236
145
* 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.
** Prior years restated to reflect discontinued operations (see Notes 1 and 12).
Employment of capital
Goodwill and intangible assets
Property, plant and equipment
Other assets
Working capital (including provisions and non-debt derivatives)
Net pension surplus/(deficit)
Net assets held for sale (excluding cash and leases included in
net debt)
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
2018
£M
360
965
37
385
18
–
1 765
85
(392)
(91)
1 367
117
1 250
1 367
–
1 367
2019
£M
342
982
59
401
24
–
1 808
102
(337)
(84)
1 489
117
1 372
1 489
–
1 489
2020*
£M
331
1 190
63
409
(203)
–
1 790
91
(451)
(37)
1 393
117
1 276
1 393
–
1 393
2021*
£M
345
1 105
59
421
(140)
–
1 790
104
(417)
(23)
1 454
117
1 336
1 453
1
1 454
AT 31 MARCH
2022
£M
283
497
46
258
(107)
1 323
2 300
–
(626)
(54)
1 620
117
1 502
1 619
1
1 620
* Prior years restated for change in accounting policy (to adopt the requirements of Configuration of Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets) – Agenda Paper 2).
See Notes 1 and 38.
Tate & Lyle PLC Annual Report 2022
USEFUL INFORMATION
205
205
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)
Closing market capitalisation at 31 March (£ million)
Business ratios
Net debt to EBITDA (times)1
Net debt divided by pre-exceptional EBITDA
Gearing3
Net debt as a percentage of total net assets2
Adjusted operating margin
Adjusted operating profit as a percentage of revenue2
2018*
2019
2020
2021**
2022
57.0p
56.1p
57.4p
50.3p
56.5p
49.4p
28.7p
544.6p
2 550
0.9x
29%
39.2p
38.6p
39.2p
52.8p
38.6p
52.0p
29.4p
725.8p
3 399
0.8x
23%
52.8p
52.1p
52.8p
58.6p
52.1p
57.8p
29.6p
656.0p
3 073
0.9x
32%
19.3p
19.1p
54.4p
61.9p
53.8p
61.2p
30.8p
767.2p
3 594
0.8x
29%
5.5p
5.5p
50.7p
56.7p
50.2p
56.0p
21.8p
732.2p
3 431
1.3x
39%
11.1%
11.1%
11.5%
12.1%
10.0%
Return on capital employed
16.2%
17.1%
17.5%
17.3%
14.9%
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
1.8x
1.4x
1.8x
1.8x
2.0x
1.8x
2.1x
1.6x
1.8x
1 Following the refinancing of the revolving credit facility in the year ended 31 March 2020 (refer to Note 26) 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. 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.
** Prior year restated to reflect discontinued operations (see Notes 1 and 12).
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION
206
206
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 pound sterling were
as follows:
Average rates
US dollar
Euro
Year-end closing rates
US dollar
Euro
YEAR ENDED 31 MARCH
2022
£1 =
1.37
1.18
1.32
1.19
2021
£1 =
1.31
1.12
1.38
1.17
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 2022 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
Central
Adjusted operating profit
Net finance expense
Adjusted profit before tax
Adjusted income tax expense
Adjusted profit after tax
Adjusted diluted EPS (pence)
2022
£M
1 375
160
61
(51)
170
(25)
145
(28)
117
2022 AT
CONSTANT
CURRENCY
£M
1 433
167
64
(51)
180
(26)
154
(31)
123
FX
£M
58
7
3
–
10
(1)
9
(3)
6
24.9p
1.2p
26.1p
UNDERLYING
GROWTH
£M
222
11
9
–
20
–
20
(15)
5
0.9p
RESTATED*
2021
£M
1 211
156
55
(51)
160
(26)
134
(16)
118
25.2p
CHANGE
%
14%
3%
9%
1%
6%
4%
8%
(72%)
(1%)
(1%)
CHANGE IN
CONSTANT
CURRENCY
%
18%
7%
15%
–%
12%
–%
14%
(91%)
4%
4%
SUMMARY OF PRO-FORMA RETURN ON CAPITAL EMPLOYED FOR THE YEAR ENDED 31 MARCH 2022 FOR CONTINUING OPERATIONS
As set out in Note 4, Return on Capital Employed (ROCE) % for total operations was 14.9% (2021 – 17.3%).
Set out below is the pro-forma return on capital employed calculation:
CALCULATION OF ROCE – PRO-FORMA
Adjusted operating profit – continuing operations
Impact of long-term agreements
Deduct: Amortisation of acquired intangible assets
Profit before interest, tax and exceptional items for ROCE – pro-forma1
Invested operating capital – total operations
Less: impact of Primient invested operating capital and Add: impact of LTAs
Invested operating capital of continuing operations – pro-forma
Average invested operating capital of continuing operations – pro-forma2
Return on capital employed (ROCE) % – pro-forma
1 Excludes pro-forma share of profits of Primient.
2 Excludes pro-forma impact of investment in Primient joint venture.
YEAR ENDED 31 MARCH
2021
£M
1 871
(942)
929
2022
£M
170
(7)
(10)
153
2 177
(1 258)
919
924
16.5%
Tate & Lyle PLC Annual Report 2022
USEFUL INFORMATION
207
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.
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 15-minute delay.
FINANCIAL CALENDAR
2022 Annual General Meeting
28 July 20221
Announcement of half-year results for the six months to 30 September 2022
10 November 20221
Announcement of full-year results for the year ending 31 March 2023
2023 Annual General Meeting
25 May 20231
27 July 20231
DIVIDENDS PAID ON ORDINARY SHARES DURING THE YEAR ENDED
31 MARCH 2022
PAYMENT
6 August 2021
5 January 2022
SPECIAL DIVIDEND PAID ON ORDINARY SHARES
PAYMENT
16 May 2022
DIVIDEND
DESCRIPTION
Final 2021
Interim 2022
DIVIDEND
PER SHARE
22.0p
9.0p
DIVIDEND
DESCRIPTION
Special
DIVIDEND
PER SHARE
107.0p
DIVIDEND CALENDAR FOR DIVIDENDS ON ORDINARY SHARES
2022
FINAL
2023
INTERIM
2023
FINAL
Announced
Payment date
9 June 2022
9 November 20221
25 May 20231
5 August 20222
4 January 20231 2 August 20231,2
1 Provisional date.
2 Subject to approval of shareholders.
DIVIDENDS PAID ON 6.5% CUMULATIVE
PREFERENCE SHARES
Paid each 31 March and 30 September.
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.
Tate & Lyle PLC Annual Report 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSUSEFUL INFORMATION 208
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.
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 2022 performance at actual
exchange rates and at constant currency
exchange rates have been included in the
additional information on page 206.
Continuing operations
Continuing operations comprise: Food &
Beverage solutions (into which the European
Primary Products business, which is not part
of the Transaction, and certain stranded
costs have been combined); Sucralose;
and Central costs.
Co-products
Corn gluten feed, corn gluten meal and corn oil.
D
Discontinued operations
Discontinued operations comprises the Primient
business, which represents a disposal group.
DOLCIA PRIMA® Allulose
Low-calorie sugar that offers a superior, new
taste experience.
E
EHSQS
Environment, Health, Safety, Quality
and Security.
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.
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.
PUREFRUITTM Monk Fruit Extract
A versitile calorie-free sweetener that
blends well with other sweeteners.
S
SPLENDA® Sucralose
A zero-calorie sweetener, the manufacturing
process for which starts with sugar.
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
An operating segment and part of
Food & Beverage Solutions.
T
TASTEVA® M Stevia Sweetener
A zero-calorie sweetener made from stevia.
Transaction
The sale of a controlling interest in new
company Primient and its subsidiaries to KPS
Capital Partners LP as further described on
pages 16 and 17.
DEFINITIONS/EXPLANATORY NOTES
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
Tate & Lyle PLC Annual Report 2022
DEFINITIONS
In this Annual Report:
– ‘Company’ means Tate & Lyle PLC
– References to ‘Tate & Lyle’, ‘Group’, ‘we’, ‘us’
or ‘our’ in the period up to and including 31
March 2022 means Tate & Lyle PLC and its
subsidiaries prior to the sale of a controlling
interest in Primient to KPS Capital Partners
LP, which completed on 1 April 2022
– ‘Primient’ means the new business
comprised of the Primary Products business
in the Americas, and Tate & Lyle’s former
interests in Almex and Bio-PDO
– ‘Almex’ means Almidones Mexicanos S.A. de
C.V.
– ‘Bio-PDO’ means DuPont Tate & Lyle Bio
Products Company, LLC
– ‘during the year’ means during the financial
year ended 31 March 2022.
SPLENDA®
SPLENDA® is a trademark of Heartland
Consumer Products LLC.
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.
USEFUL INFORMATION Designed and produced by
Registered office
Tate & Lyle PLC
5 Marble Arch
London W1H 7EJ
Tel: +44 (0)20 7257 2100
Fax: +44 (0)20 7257 2200
Company number: 76535
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