Tate & Lyle PLC

Annual Financial Report and Notice of Annual General Meeting 2022

In accordance with Listing Rule 9.6.1, Tate & Lyle PLC (the 'Company' or 'Tate & Lyle') confirms that copies of the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism

1.   Annual Report 2022;

2.   Notice of Annual General Meeting 2022;

3.   Notice of Availability; and

4.   Proxy Form.

The Annual General Meeting 2022 will be held at Thistle London Marble Arch, Bryanston Street, London, W1H 7EH at 10.30am on 28 July 2022.

As noted in the announcement made by the Company on 15 June 2022, the Notice of Annual General Meeting 2022 contains further details in relation to the proposed cancellation and repayment of the Company's 6½ per cent. cumulative preference shares as well as the relevant resolutions to be proposed to the Company's shareholders in this respect at the 2022 Annual General Meeting.

The Annual Report 2022, Notice of Annual General Meeting 2022, Notice of Availability and Proxy Form are also available on the Investors Hub section of the Company's website. Mailing of the Annual Report 2022, Notice of Annual General Meeting 2022, Notice of Availability and Proxy Form to shareholders who have requested or are entitled to receive them will occur shortly.  

We will notify shareholders of any significant updates to our Annual General Meeting 2022 arrangements via a regulatory information service and on the Investors Hub section of the Company's website.

Annual Financial Report

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 2022 in unedited full text and page numbers in the text refer to page numbers in that document. This information should be read in conjunction with the Company's 2022 full-year results announcement, released on 9 June 2022, which contained a condensed set of financial statements and 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'Grady

Company Secretary

21 June 2022

For more information contact:

Investors and analysts

Christopher Marsh, VP Investor Relations

Tel: Mobile: +44 (0) 7796 192 688

APPENDIX A

PRINCIPAL RISKS AND UNCERTAINTIES

Strategic Risks

1.   Failure to deliver the Food & Beverage Solutions growth strategy

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.

How we mitigate the risk

·      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.

What we've done this year

·      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.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      We have a robust innovation process that, through internal development and open innovation, delivers a strong pipeline of New Products.

·      Our ICD team tracks emerging consumer trends and works closely with commercial partners to create New Products and solutions that will deliver growth.

·      Our customer-facing teams' incentive and bonus schemes include targets for New Product revenue.

·      We have an open innovation team that scouts for breakthrough technologies.

·      We prioritise partnership opportunities with customers to accelerate development cycles and bring New Products to market more quickly.

What we've done this year

·      We launched 10 New Products and more than 30 new stevia sweetener solutions from our innovation pipeline.

·      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 continued to offer online tools to support our customers including the Tate & Lyle Nutrition Centre and the Collaborate at Home Kitchen in North America.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      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.

What we've done this year

·      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.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      We have a global business continuity management framework to enable effective recovery from a major disruption.

·      Caring for our planet is one of the three 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.

What we've done this year

·      The establishment of a Global Pandemic Response Team, together with teams at our local sites, managed our response to Covid-19 in order to minimise disruption.

·      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.

Trend compared with 2021: increasing

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.

How we mitigate the risk

·      We have a continuous improvement plan for Environment, Health and Safety (EHS) in place at all our sites (Journey to EHS Excellence, or J2EE). It is visibly sponsored by the Chief Executive and Executive Committee.

·      Our EHS Advisory Board, which includes our Chief Executive, 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.

What we've done this year

·      We put in place strict protocols at all our sites to ensure we protected our people during the pandemic including sanitation, social distancing, hand washing and wearing face masks.

·      27 of our sites have passed tollgate 3 (of 7) as part of our J2EE programme.

·      We continued to invest in our EHS team, recruiting, developing and embedding safety engineers at our major plants.

·      We utilised virtual safety assessments in light of Covid-19 to ensure we maintained progress with our safety programme.

·      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.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      We have strict quality control and product testing procedures.

·      We regularly test our recall process.

·      We have a third-party audit programme, supplemented by internal compliance audits.

·      We assess our raw material suppliers, tollers and third-party warehouses for food safety and quality risks.

·      We have a programme to manage allergens in our supply chain and ensure our ingredients are either free from allergens or that any allergens are disclosed.

·      Our Quality Incident Review Board investigates incidents and shares best practice across our sites.

·      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.

What we've done this year

·      We continued to embed our centralised recipe management system streamlining how we manage products and ingredients.

·      We continued to ensure compliance with the US Food Safety Modernization Act across our plants.

·      We manage cross-contamination risk at our plants by using the US Food and Drug Administration (FDA) food defence plan builder.

·      Having previously combined the leadership of the 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.

Trend compared with 2021: unchanged

7.   Inability to manage fluctuations in the price and availability of raw materials, energy, freight and other operating inputs

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.

How we mitigate the risk

·      We have strategic relationships and multi-year agreements with suppliers and trading companies.

·      Our supply and tolling contracts with customers help us reduce raw material risk.

·      Our raw material and energy purchasing policies increase the security of our supply.

·      Our 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.

What we've done this year

·      We strengthened our procurement resources regionally to better manage local market variances under a global centralised management structure.

·      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.

Trend compared with 2021: increasing

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.

How we mitigate the risk

·      Our plant network has a preventative maintenance programme.

·      We have an ongoing programme to improve our global supply chain processes.

·      Business continuity capabilities enable us to supply products to customers from alternative sources quickly if there's a natural disaster or major equipment or plant failure.

·      Our customer service team is part of Global Operations so works closely with our plants, enabling us to be agile and responsive.

·      We have contingency plans to manage disruption such as extreme winter weather to the extent possible.

·      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.

What we've done this year

·      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 completed our three-year programme to demolish old and potentially unsafe structures at our manufacturing sites.

Trend compared with 2021: increasing

9.   Failure to maintain the continuing operation and security of 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.

How we mitigate the risk

·      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.

What we've done this year

·      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.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      Our legal and regulatory teams work closely with our commercial teams to identify legal and regulatory risk and provide advice and solutions.

·      We monitor legal and regulatory developments regularly to make sure we know what could affect Tate & Lyle.

·      We review our key legal policies regularly.

·      We run a legal and ethics and compliance training programme.

·      We 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 have lawyers in each region to work with commercial colleagues to identify and mitigate legal risk from the bottom up.

What we've done this year

·      We further embedded our document management system to facilitate better ways of working that are easier to audit.

·      We strengthened our contract documentation processes including the tracking of agreed terms and conditions, and provided training for sales teams.

·      We continued to provide training to our global procurement team on legal policies including contract training.

·      We continued to provide legal, ethics and compliance training across the organisation as part of our annual training plan.

·      We provided anti-trust/competition training.

·      We developed sanctions awareness training and put in place processes to ensure no breaches occur.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      We have an established framework of financial policies and standards supported by procedures and controls over key processes - in many instances these controls are automated and we maximise the use of preventative controls.

·      The design and operating effectiveness of controls are monitored on an ongoing basis and the results are reported twice a year to the Executive Committee.

·      We have several forums to monitor and manage our financial controls effectiveness, such as our quarterly regional Control Environment Councils chaired by the relevant General Manager.

·      The Chief Executive and Chief Financial Officer review the business and financials monthly.

·      At both the half year and the end of the financial year, confirmation is provided to the Executive Committee, the Audit Committee and the Board that minimum control standards are operating effectively.

·      Our well-resourced Group Audit and Assurance team provides independent assurance to management and the Board.

What we've done this year

·      We continued to invest in our financial 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 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.

Trend compared with 2021: unchanged

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.

How we mitigate the risk

·      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.

·      Our global nutrition team initiates and monitors research and publications on the use and functionality of our ingredients, and maintains a global advisory network of health and nutrition clinicians, academics and experts.

·      We work closely with thought-leading customers around the world to jointly focus on the science and consumer benefits of our ingredients.

What we've done this year

·      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.

·      We initiated a number of projects with external 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.

Trend compared with 2021: unchanged

APPENDIX B

DIRECTORS' RESPONSIBILITY STATEMENT

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.

APPENDIX C

RELATED PARTY DISCLOSURES

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

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.