TIDMTATE
Tate & Lyle PLC
Annual Financial Report
Tate & Lyle PLC (the "Company") confirms that copies of the
following documents have been submitted to the National Storage
Mechanism and will shortly be available for inspection at:
www.morningstar.co.uk/uk/NSM.
1. Annual Report 2018;
2. Notice of Annual General Meeting 2018;
3. Notice of Availability; and
4. Proxy Form.
The Annual Report 2018, Notice of Annual General Meeting 2018
and Notice of Availability are also available on Tate & Lyle's
website at www.tateandlyle.com/investors/annual-reports.
For the purposes of complying with Disclosure Guidance and
Transparency Rule (DTR) 6.3.5R and the requirements it imposes on
issuers as to how to make public annual financial reports, we set
out below:
- in Appendix A, the principal risks and uncertainties facing
the Company;
- in Appendix B, the Directors' responsibility statement;
and
- in Appendix C, the disclosure regarding related party
transactions.
The appendices have been extracted from the Annual Report 2018
in unedited full text and the page numbers in the text refer to the
page numbers in that document. This information should be read in
conjunction with the Company's 2018 full-year results announcement,
released on 24 May 2018, which contained a condensed set of
financial statements and which can be found at
www.tateandlyle.com/Investors/results-and-presentations. Together,
these constitute the material required by DTR 6.3.5R to be
communicated to the media in unedited full text through a
Regulatory Information Service.
Claire-Marie O'GradyCompany Secretary21 June 2018
APPIX ARISK FACTORS
Principal risksThe Board has carefully considered the type and
extent of the principal risks to the Group achieving its
objectives. While the Group seeks to manage risk carefully, at the
same time the Board recognises that some risk needs to be taken for
the Group to achieve its strategic goals.
Over time, the Group's risk profile evolves and the Board's view
of the principal risks is updated accordingly. Following a number
of changes to the principal risks over the last few years, the
Board decided this year that no changes to the principal risks were
required.
The Board confirms that a robust assessment of the principal
risks facing the Company, including those that would threaten its
business model, performance, solvency and liquidity, has been
carried out. The principal risks identified as part of the process
undertaken during the year, together with examples of the
mitigating actions being taken, are set out on pages 40 and 41. It
is not possible to identify or anticipate every risk that may
affect the Group.
SafetyAct safely and maintain the safe operation of our
facilitiesThe safety of our employees, contractors, suppliers, and
the communities in which we operate is paramount. We must operate
within local laws, regulations, rules and ordinances relating to
health, safety and the environment, including emissions. Failure to
act safely, which could lead to loss of life or serious injury, may
give rise to fines or penalties for breach of safety laws,
interruptions in operations or loss of our licence to operate,
liability payments and costs arising from injuries or damage, and
damage to our reputation.
Examples of how we manage the risk
* Health and safety policies and procedures are in place at all
facilities with dedicated staff to ensure they are embedded and
measured
* Regular review of performance and policies by the Board
* Maintenance of suitable insurance programme
* Programme of global compliance audits
* SafeStart® behavioural safety training programme rolled out
across plants, offices and labs
* During the year, a comprehensive review of Group-wide safety
protocols, procedures and culture was undertaken with the support
of an independent external expert consultancy. As a result, a new
strategy and approach to safety was implemented called 'Journey to
EHS Excellence'
* A new global environment, health and safety (EHS) organisation
was put in place to support our Journey to EHS Excellence (see
pages 46 and 47 for more information).
StrategyGrowth in food and beverage solutionsOur ability to
deliver our strategy to grow our Food & Beverage Solutions
business may be affected by a number of factors such as delivering
growth in emerging markets, customers' readiness to adopt new
ingredients and incorporate them in new product launches,
competitor actions, and growing key product or product families.
Furthermore, failure to make acquisitions and create value by
integrating them into the Group effectively, may also affect our
ability to deliver growth. Failure to deliver our strategy over the
longer term would negatively affect our credibility, reputation and
profitability.
Examples of how we manage the risk
* Investments to increase sales and technical resources, and
infrastructure, particularly in emerging markets (laboratories
expanded in Shanghai, Singapore and Mexico City during the
year)
* New staff recruited and existing staff developed to upgrade
skillsets in customer-facing areas and innovation
* Global programme to increase customer focus in key areas such
as customer account management, planning and execution
* Programme put in place to sharpen focus on our customers
* Commercial organisation re-aligned to focus on key
categories.
InnovationInnovate and commercialise new productsFailure to
identify important consumer trends and provide innovative
solutions, and the inability to successfully commercialise new
products, could impact the delivery of our strategy. This would
affect our performance and reputation.
Examples of how we manage the risk
* Innovation and Commercial Development team conducts research
and works closely with customers and other external organisations
to identify emerging consumer trends
* Open innovation team actively scouts for breakthrough
technologies and opportunities across industries and
universities
* Strategic marketing organisation provides support for new
product launches and consumer and category insight
* Prioritisation of 'partnership' opportunities with customers
to accelerate development cycles and bring new ingredients to
market more quickly
* Tate & Lyle Ventures invests in early-stage companies in
food science and technology by partnering with research
institutions, entrepreneurs and other venture funds.
PeopleAttract, develop, engage and retain key personnelThe
performance, knowledge and skills of employees are central to our
success. We must attract, integrate, engage and retain the talent
we need to deliver our strategy, and have the appropriate processes
and culture in place. Being unable to retain key people and
adequately plan for succession could have a negative impact on our
performance.
Examples of how we manage the risk
* Remuneration policies designed to attract, retain and reward
employees with ability and experience to execute Group strategy
* Talent development strategy to provide opportunities for
employees, as well as training to close skills gaps
* Single global performance management system and talent
planning processes in place
* Focus by the Board on succession planning for
business-critical roles
* Measurement of progress against cultural objectives, for
example, global employee surveys.
Legal and complianceComply with legal or regulatory
requirements, and our Code of EthicsWe operate in a variety of
markets and are therefore exposed to a wide range of legal and
regulatory frameworks. We must understand and comply with all
applicable legislation. Any breach could have a financial impact
and damage our reputation.
Examples of how we manage the risk
* Regular monitoring and review of changes in law and regulation
in areas such as health and safety, environment, quality, food
safety, corporate governance and data protection
* Legal teams maintain compliance policies in areas such as
anti-trust and anti-corruption law; and provide ongoing training to
employees
* Ethics training provided to employees
* Full-time global Head of Ethics and Compliance appointed
during the year
* Whistleblowing process in place (Speak Up programme)
* Compliance with the EU General Data Protection Regulation.
Cyber securityMaintain the security of our information systems
and dataA cyber security breach, whether as a result of human
error, deliberate action or the failure of technology systems,
could result in unauthorised access to or misuse of information
systems, technology or data. This could cause harm to our assets,
loss of data, business disruption, legal liabilities and damage to
our reputation.
Examples of how we manage the risk
* Cyber security enhancement programme in place focused on
strengthening people, process and technology defences
* Compulsory cyber security training
* Cyber security breach scenario exercises
* Advanced perimeter defences in place
* Continuous vulnerability detection and defences
* Separation of systems within plant network
* Third-party Security Operations Centre providing 24/7 security
monitoring, security event correlation and threat
counter-measures.
Operations and supply chainMaintain the continuous operation of
our plant network and supply chain, including high standards of
customer serviceOperating plants involves many risks which could
cause temporary or permanent breaks in production. We must have a
robust sales and operations planning process to avoid disruption to
the supply chain and maintain high standards of customer service.
Failure to do any of these things could have a material adverse
effect on our performance and reputation.
Examples of how we manage the risk
* Preventive maintenance programme across the plant network
* Ongoing programme to improve global supply chain processes
* Business continuity capabilities in place to enable supply, as
quickly as practicable, of product to customers from alternative
sources in the event of a natural disaster or major equipment or
plant failure
* Dedicated internal resources allocated to key projects in
conjunction with business teams to ensure business continuity is
not compromised
* Customer service managed by Global Operations as part of
integrated end-to-end supply chain process.
Raw materialsFluctuations in prices and availability of raw
materials, energy, freight and other operating inputsOur margins
may be affected by fluctuations in crop prices due to factors such
as alternative crops, co-product values and the variability of
local or regional harvests caused by, 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 on to customers the
full increase in raw material prices or higher energy, freight or
other operating costs. Additionally, margins may be affected by
customers not taking expected volumes.
Examples of how we manage the risk
* Strategic relationships with suppliers and trading companies
including multi-year agreements
* Balanced portfolio of supply and tolling contracts in
operation with customers to manage balance of raw material prices
and product sales prices and volume risks
* Raw material and energy purchasing policies to provide
security of supply
* Network of corn elevators to enhance security of supply
* New or back-up supply sources in place in case primary
suppliers face localised challenges
* Use of derivatives and forward contracts where practical, to
hedge and manage our exposure to raw material and co-product
prices.
QualityMaintain the quality and safety of our productsThe safety
of the consumers of our products is critical. Poor quality or
sub-standard products could have a negative impact on consumer
safety and on our reputation and relationships with customers.
Examples of how we manage the risk
* Strict quality control and product testing procedures to
ensure products are released only with full quality control
clearance
* Quality policies, procedures and performance reviewed by the
Board
* Hazard Analysis and Critical Control Points plans updated at
all plants to be fully compliant with new US Food Safety
Modernization Act
* Immediate response Recall Committee meets promptly if a recall
event occurs
* Third-party audit programme supplemented by internal global
compliance audits
* Regular recall simulation exercises.
Consumer concerns and food regulationChanges in consumer,
customer or government attitudes to our productsOur freedom or
ability to operate may be affected by changes in consumer or
customer attitudes, food law and regulatory changes, campaigns
targeted at specific ingredients or technologies or other factors
that may impact the regulatory status or perception of our products
or of their functionality, efficacy or use. We must ensure that the
science behind our ingredients (for example, health claims,
nutritional impact) is supported by credible sources, clearly
communicated and understood by relevant regulatory authorities.
Failure to do so may restrict the markets for our products.
Examples of how we manage the risk
* Global regulatory team, supported by external consultants,
monitors local regulatory requirements affecting our products
* Global nutrition team initiates and monitors research and
publications concerning the use and functionality of our
ingredients and maintains global network of health and nutrition
clinicians, academics and experts
* Membership of trade organisations provides access to broader
sources of information and ensures, where appropriate, a single
voice for the industry on regulatory and public interest issues
affecting our ingredients
* Maintenance of relations with regulatory authorities
* Provision of clear information on ingredients' provenance and
traceability
* Research Advisory Group, chaired by a non-executive director
and comprising leading scientific experts, reviews critical aspects
of the Group's innovation activities and provides guidance.
Government regulations and trade policiesChanges in government
regulations and/or trade policiesGovernment actions or policies
causing changes in tariffs, customs duties, or imposing
import/export limitations, or other barriers, may lead to our
business incurring additional costs, or may restrict opportunities
for growth or prevent or limit our ability to operate in certain
markets.
Examples of how we manage the risk
* Programme in place to ensure that we actively engage in
discussions with political parties, influencers and regulatory
authorities in the main countries we operate in
* Active member of relevant industry trade associations
* Model in place enabling production across the plant network to
be adapted or optimised in the event of market restrictions in
certain countries
* Operation of a global plant network means customers can be
served from different countries if products from certain markets
are restricted or become economically less attractive
* Continue to invest in resources and infrastructure across
different markets and geographies to diversify business mix.
Financial controlsMaintain an effective system of internal
financial controlsWithout effective internal financial controls, we
could be exposed to financial irregularities and losses from acts
which could have a significant impact on the ability of the
business to operate. We must safeguard business assets and ensure
the accuracy and reliability of our records and financial
reporting.
Examples of how we manage the risk
* Financial policies and standards are in place supported by
procedures for key financial processes, for example, capital
expenditure
* Financial risks are monitored and managed through a number of
forums, for example, the regional Control Environment Councils
* Chief Executive and Chief Financial Officer undertake detailed
quarterly business and financial reviews
* Minimum control standards are confirmed at the half-year and
at the end of the financial year
* Automated controls are built into systems where possible.
APPENDIX BDIRECTORS' RESPONSIBILITY STATEMENT
Each of the Directors, whose names and functions are listed on
page 52, confirms that, to the best of his or her knowledge:
-- The Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders
to assess the Company's and the Group's position and
performance,
business model and strategy
-- The Group Financial Statements, which have been prepared in accordance
with IFRSs as adopted by the EU, give a true and fair view of
the
assets, liabilities, financial position and profit of the
Group
-- The Company Financial Statements, which have been prepared in
accordance with UK GAAP (United Kingdom Accounting
Standards,
comprising FRS 101 'Reduced Disclosure Framework' and applicable
law)
give a true and fair view of the assets, liabilities,
financial
position and profit of the Company
-- The Strategic Report and the Directors' Report include a fair review
of the development and performance of the business and the
position of
the Group and the Company, together with a description of
the
principal risks and uncertainties that it faces.
APPENDIX CRELATED PARTY DISCLOSURES
Identity of related partiesThe Group has related party
relationships with its joint ventures and associates, the Group's
pension schemes and with key management, being its Directors and
executive officers. No related party transaction with close family
members of the Group's key management occurred in the current or
comparative year.
Subsidiaries, joint ventures and associatesTransactions 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. Transactions and balances with and
between joint ventures are as shown below. There are no such
transactions with associates.
In the year ended 31 March 2018, the Group disposed of its 33.3%
interest in Tapioca Development Corporation, a company based in
Thailand, its only associate. See Notes 21 and 34.
In the year ended 31 March 2017, the Group disposed of, and
therefore ceased to have related party transactions with two of its
subsidiaries. The Group disposed of its equity interest in Jiangsu
Tate & Lyle Howbetter Food Co., Ltd, its Food Systems business
in China. The Group also completed the disposal of its interest in
its corn wet mill in Casablanca, Morocco.
There were no other material changes in related parties or in
the nature of related party transactions during the year.
Year ended 31 March
2018 2017
GBPm GBPm
Sales of goods and services
- to joint ventures 147 133
Purchases of goods and services
- from joint ventures - -
At 31 March
2018 2017
GBPm GBPm
Receivables
- due from joint ventures 20 24
Payables
- due to joint ventures - -
The Group had no material related party transactions containing
unusual commercial terms in the current or prior year.
Key management compensation is disclosed in Note 10. There were
no other related party transactions with key management.
View source version on businesswire.com:
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This information is provided by Business Wire
(END) Dow Jones Newswires
June 21, 2018 07:34 ET (11:34 GMT)
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