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TATE: Tate & Lyle PLC: Final Results

  TATE: Tate & Lyle PLC: Final Results

UK Regulatory Announcement

LONDON

30 May 2013

TATE & LYLE PLC
ANNOUNCEMENT OF FULL YEAR RESULTS
For the year ended 31 March 2013
                                                              
Continuing operations^1                               Change       Change
£m unless stated otherwise           2013   2012   (reported)  (constant
                                                                   currency)^5
                                                                   
Sales                                 3 256   3 088   + 5%         + 6%
                                                                   
Adjusted results^2
Adjusted operating profit^2           358     348     + 3%         + 4%
Adjusted profit before tax^3          329     318     + 4%         + 4%
Adjusted diluted earnings per         57.0p   54.7p   + 4%         + 5%
share^3
                                                                   
Statutory results
Operating profit                      336     404
Profit before tax                     309     379
Profit for the year (on total         278     309
operations)
Diluted earnings per share (on        58.5p   64.3p
total operations)
                                                                   
Cash flow and net debt
Free cash flow^4                      110     79
Net debt                              479     476
                                                                   
Dividend per share                   26.2p  24.9p  + 5.2%      
                                                                   

Javed Ahmed, Chief Executive, said:

“I am pleased to report that the underlying business continues to perform well
and that despite having entered the year facing a number of headwinds we have
made progress. The opening of our new global Commercial and Food Innovation
Centre in Chicago has significantly enhanced the level of engagement with our
customers, and we have also made headway developing the innovation pipeline
and bringing new products to market. Looking ahead, we will continue to build
on the foundations we have laid and expect to deliver another year of
profitable growth.”

Highlights

  *Speciality Food Ingredients sales up 7% to £947 million (8% in constant
    currency) with adjusted operating profit broadly in line (0% in constant
    currency) with the prior year at £213 million (2012 – £214 million)
  *Bulk Ingredients adjusted operating profit up by 6% to £182 million (7% in
    constant currency)
  *Adjusted diluted earnings per share up 4% to 57.0p (5% in constant
    currency)
  *5.6% increase proposed for the final dividend to 18.8p, making a total
    dividend increase of 5.2% to 26.2p
  *Promising new product launches including our stevia-based, natural,
    no-calorie sweetener, TASTEVA^® Stevia Sweetener and salt reduction
    product, SODA-LO^® Salt Microspheres

Outlook

In Speciality Food Ingredients, we expect to deliver good sales and profit
growth with volume growth across all major product categories.

In Bulk Ingredients, against a backdrop of continued corn price volatility,
improved bulk sweetener unit margins in the US are expected to offset a softer
start in US bulk sweetener volumes and lower isoglucose margins in Europe.
Profits within Bulk Ingredients are expected to be more evenly distributed
between the first and second half than in the prior year.

Overall, we expect to deliver another year of profitable growth.

1  Excluding the results of discontinued operations in both periods except
    where noted otherwise.
    Before net exceptional charge of £12 million (2012 – net gains of £68
2   million) and amortisation of acquired intangible assets of £10 million
    (2012 – £12 million).
    Before net exceptional charge of £12 million (2012 – net gains of £68
3   million), amortisation of acquired intangible assets of £10 million (2012
    – £12 million) and post retirement pension interest credit of £2 million
    (2012 – £5 million)
    Free cash flow is operating cash flow, based on adjusted operating profit
4   from continuing operations, after working capital, interest, taxation and
    capital expenditure.
5   Changes in constant currency are calculated by retranslating comparative
    period results at current period exchange rates.
    

Cautionary statement

This Statement of Full Year Results 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
will 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. Nothing in this
Statement of Full Year Results should be construed as a profit forecast.

A copy of this Statement of Full Year Results for the year ended 31 ^ March
2013 can be found on our website at www.tateandlyle.com. A hard copy of this
statement is also available from The Company Secretary, Tate & Lyle PLC,  1
Kingsway, London WC2B 6AT.

SPLENDA^® is a trademark of McNeil Nutritionals, LLC.

Webcast and Conference Call Details

A presentation of the results by Chief Executive, Javed Ahmed and Chief
Financial Officer, Tim Lodge will be audio webcast live at 10.00 (UKT) today.
To view and/or listen to a live audio-cast of the presentation, please visit:
http://view-w.tv/w/797-1031-12863/en. Please note that remote listeners will
not be able to ask questions during the Q&A session. A webcast replay of the
presentation will be available within two hours of the end of the live
broadcast on the link above.

For those unable to view the webcast, there will also be a teleconference
facility for the presentation. Details are given below:

Dial in details:
Standard International Access: +44 (0) 20 3003 2666
US dial in number: +1 212 999 6659
Password: Tate & Lyle

14 day Conference Participant Call Replay:
UK replay number: +44 (0) 20 8196 1998
US replay number: +1 866 583 1035
Replay Access code: 7579240
For additional international replay access numbers please visit:
http://www.meetingzone.com/ReplayDialInNumbers.aspx

For more information contact Tate & Lyle PLC:

Mathew Wootton, Group VP, Investor and Media Relations
Tel: +44 (0) 20 7257 2110 or Mobile: +44 (0) 7500 100 320

Andrew Lorenz, FTI Consulting
Tel: +44 (0) 20 7269 7113 or Mobile: +44 (0) 7775 641 807


CHIEF EXECUTIVE’S REVIEW

Results for the continuing operations are adjusted to exclude exceptional
items, post-retirement benefit interest and amortisation of intangible assets
acquired through business combinations. Except where specifically stated to
the contrary, this commentary relates only to the adjusted results for the
continuing operations. A reconciliation of statutory and adjusted information
is included at Note 17.

Key performance indicators

Our key performance indicators for the year to 31 March 2013 are as follows:

KPI                   Measure              Year to 31 March   Change*
                                           2013     2012     
Growth in SFI sales    Sales                 £947m    £887m    + 8%
Profitability          Adjusted operating    £358m     £348m     + 4%
                       profit
Working capital        Cash conversion       42 days   36 days   Lengthened by
efficiency             cycle†                                    6 days
Financial strength     Net debt/EBITDA**     1.0.x     1.1x
                       Interest cover**      11.1x     11.1x
Return on assets       Return on capital     19.8%     21.6%     - 180 bps
                       employed
Corporate              Safety – Recordable   0.85      0.85      No change
Responsibility^        incident rate
                     Safety – Lost work   0.26     0.21     3 more lost
                       case rate                                 work cases

*Sales and operating profit growth shown in constant currency
†Defined as controllable working capital divided by quarterly sales,
multiplied by number of days in quarter on a four quarter rolling basis (a
reduction in the number of days represents an improvement)
**Calculated under banking covenant definitions
^Measured on a calendar year basis


Overview of Group’s financial performance

I am pleased to report that the underlying business continues to perform well
and that, despite having entered the year facing a number of headwinds,
including the step change in fixed costs associated with the restart of our
SPLENDA^® Sucralose facility in McIntosh, Alabama and our business
transformation initiatives, we have made progress.

Sales for the year were £3,256 million (2012 – £3,088 million), an increase of
5% (6% in constant currency) on the prior year with sales in our Speciality
Food Ingredients division growing by 7% (8% in constant currency) to £947
million (2012 – £887 million). Adjusted operating profit increased by 3% (4%
in constant currency) to £358 million (2012 – £348 million) with adjusted
operating profit in Speciality Food Ingredients broadly in line with the prior
year at £213 million and up 6% (7% in constant currency) in Bulk Ingredients
at £182 million (2012 – £172 million). Adjusted profit before tax increased by
4% (4% in constant currency) to £329 million (2012 – £318 million) with
adjusted diluted earnings per share also up 4% (5% in constant currency) to
57.0p (2012 – 54.7p).

Financial management and balance sheet

Our average quarterly cash conversion cycle increased from 36 days to 42 days.
This was driven by an increase in working capital including higher inventory
levels in the US due to higher corn prices and aflatoxin^1, and the
requirement for additional sucralose inventory following the restart of
production at our McIntosh, Alabama facility.

The key performance indicators (KPIs) of our financial strength, the ratio of
net debt to earnings before interest, tax, depreciation and amortisation
(EBITDA) and interest cover, remain well within our internal targets. At 31
March 2013, the net debt to EBITDA ratio was 1.0 times (2012 – 1.1 times),
against our upper limit of 2.0 times. Interest cover on total operations at 31
March 2013 was 11.1 times (2012 – 11.1 times), again comfortably ahead of our
minimum limit of 5.0 times.

Net debt of £479 million at 31 March 2013 was slightly higher than at the end
of last year (2012 – £476 million), reflecting an increase in working capital,
capital expenditure payments including our business transformation projects
and an increase in the value of dollar denominated debt as a result of the
strengthening of the US dollar against sterling.

Return on capital employed at 19.8% (2012 – 21.6%) was lower than the prior
year driven by an increase in operating assets reflecting the restart of our
SPLENDA^® Sucralose facility in McIntosh, Alabama, investment in our business
transformation initiatives and higher levels of working capital within the
business.

Dividend

In line with our progressive dividend policy, the Board is recommending a 5.6%
increase in the final dividend to 18.8p (2012 – 17.8p) making a full year
dividend of 26.2p (2012 – 24.9p) per share, up 5.2% on the prior year. Subject
to shareholder approval, the proposed final dividend will be due and payable
on 2 August 2013 to all shareholders on the Register of Members at 28 June
2013. In addition to the cash dividend option, shareholders will also be
offered a dividend reinvestment plan (DRIP) alternative.

Safety

We have no higher priority than safety and are committed to providing safe and
healthy working conditions for all our employees and contractors, and our
safety performance continues to compare well with companies both within and
outside our industry.

While we delivered an improvement in our contractor recordable incident rate
during calendar year 2012, there are still areas where we can do better. The
overall recordable incident rate in 2012 was the same as in 2011 and the
number of lost-work cases increased by three.

During the year, we undertook a wide range of safety improvement projects and
we continue to work to assure the safety of all those who work at our sites.
Our employees can be rightly proud that we are a leader in safety performance
in our sector, but we are not complacent and we continually strive for
improvement.

Building a platform for long-term growth

During the year, we reached a number of important milestones in our business
transformation programme.

In June 2012, we formally opened our global Commercial and Food Innovation
Centre in Chicago to customers, featuring state-of-the-art laboratories, a
demonstration kitchen, sensory testing, analytical facilities and a pilot
plant. Since then we have seen a step change in the level of customer
engagement with a significant increase in the number of visits to the new
facility as well as an improvement in the quality of customer interaction. In
April 2013, the global Commercial and Food Innovation Centre was awarded the
prestigious Gold certification by LEED^2 (Leadership in Energy and
Environmental Design). The total investment made to develop the new Centre was
£33 million, including £7 million of costs incurred during the year.

Our Innovation and Commercial Development group (ICD), continues to develop
the new product development pipeline across our core platforms of sweeteners,
texturants and health and wellness. During the year, ICD supported the launch
of six new products including our stevia-based, natural, no-calorie sweetener
TASTEVA^® Stevia Sweetener, and our salt reduction product, SODA-LO^® Salt
Microspheres for which the formal grant of the US patent was confirmed in
March 2013. To drive the successful commercialisation of our new products, we
have reorganised and strengthened our marketing organisation including the
recruitment of a new Senior Vice-President, Global Marketing.

Our Open Innovation team continues to search for opportunities globally to
form partnerships with universities, research institutes and start-ups
specialising in food science. In December 2012, we signed an agreement with
Nandi Proteins Limited, a spin-out from Heriot-Watt University in Edinburgh,
to continue developing an early-stage protein ingredient technology for use in
the food texturants space. In January 2013, we launched a new, dedicated open
innovation web portal (www.tateandlyleopeninnovation.com) to encourage
potential partners to submit proposals aligned with our innovation priorities.
In May 2013, following our earlier agreement on SODA-LO^® Salt Microspheres,
we broadened our relationship with Eminate, a subsidiary of Nottingham
University, with an agreement to develop its hollow microsphere technology to
reduce sodium bicarbonate in baked goods.

We launched a new £30 million eight-year venture capital fund on 1 January
2013, building on our existing venture fund activities. The new fund will
invest in start-ups and expansion-stage companies in both developed and
emerging markets in food sciences and enabling technologies. The combination
of the new fund and our internal Open Innovation team will give us access to
the full spectrum of new ideas, technologies and opportunities in the global
food science sector enabling us to deliver more innovative solutions to our
customers.

On 17 May 2013, we acquired Biovelop, an early-stage manufacturer of oat
beta-glucan. The acquisition broadens our health and wellness offering and
adds a clean-label, speciality fibre with strong health claims to our existing
corn-based fibre portfolio.

We continued to grow our presence in emerging markets. In December 2012, we
opened our newly upgraded offices and applications centre in Shanghai which,
together with the opening of applications and technical services facilities in
Mexico City and São Paulo last year, has strengthened our ability to service
customers in these regions and expanded our global innovation network. These
new facilities include pilot plant equipment for the production of food and
beverage prototypes which are helping us leverage our applications know-how
and technical expertise to help meet local taste preferences and to respond
rapidly to our customers. We have also continued to expand our go-to-market
and technical teams in both Asia and Latin America allowing us to broaden our
coverage in these regions in terms of both product categories and geography.

Global Shared Service Centre and IS/IT system

Our global Shared Service Centre in Łódź, Poland is operating well having
successfully completed its first full year of operations processing financial
transactions for our European and US businesses.

In July 2012, we deployed our new global IS/IT system across the majority of
our European operations alongside a new set of business processes. Since then,
we have gained invaluable practical experience operating the new system and
processes in a live environment. This has shown us that while the new system
meets the day-to-day needs of the business, we need to adapt the design to
meet the high quality operational capabilities we require, and to realise
further benefits, some of which have been identified as a result of operating
the new system. Accordingly, to allow time to develop, build and test the
design changes, we have decided to extend the next phase of the system’s
deployment into the first half of calendar year 2014.

Given that the new system is a key enabler of our global operating model, it
warrants taking the additional time. As a result, the total investment in the
global Shared Service Centre and IS/IT system is expected to increase by
£45-60 million, dependent on the final date of implementation, bringing the
total expected investment in these projects to around £120-135 million. Based
on our current estimates, including the benefits that have already been
delivered from these projects, we continue to target a three-year cash payback
on the total investment following implementation of the IS/IT system across
the business.

During the year, we incurred £43 million of costs on the rollout of the global
Shared Service Centre and the common IS/IT platform, taking the total costs to
date on these projects to £78 million.

Conclusion

Three years ago we set out to build a high quality business, one capable of
generating sustained growth over the long term. We are on track to deliver
this but we are not there yet. While we have more work to do, I believe we now
have a solid foundation from which we can build.

Our new Innovation Centre in Chicago and global network of satellite
laboratories are working well, providing the ideal environment for us to get
closer to our customers. We have started to get new products into the market
and expanded our health & wellness offering through the acquisition of new
technologies. Our emerging markets presence and business continues to grow as
we leverage the investment we have made in both people and infrastructure.

A key competitive advantage for any company is its people and its culture. We
have very talented and dedicated people at Tate & Lyle working hard to create
a real entrepreneurial and high performance culture and without them none of
what we have achieved during the year would have been possible. I am very
grateful for their support and commitment.

Speciality Food Ingredients

                           Year to 31 March   Change
                            2013      2012                   Constant
                                            Reported   currency
                            £m        £m
                                                    
Sales                       947      887        + 7%       + 8%
Adjusted operating profit   213       214        0%          0%
Margin                     22.5%    24.1%    - 160 bps  - 170 bps
                                                             

Market conditions and trends

While the food and beverage industry remains relatively resilient, it is not
immune to fluctuations in the wider economy. Nonetheless, the global market
for speciality food ingredients continued to benefit from a number of
underlying global consumer trends.

The rising incidence of diabetes and obesity in both developed and developing
countries is driving consumers and governments to focus more on healthier
lifestyles and in turn, increasing demand for ingredients from food and
beverage manufacturers in the health and wellness space. Consumer demand for
more natural, ‘cleaner label’ products is increasing with close to a third of
all product launches in 2012 in Western Europe^3 making some form of natural
claim.

Rapid urbanisation in emerging markets and rising levels of disposable income
continue to increase the penetration of packaged and convenience foods which
in turn is supporting demand for speciality ingredients that provide added
functionality such as extending shelf-life, stability and texture.

Against the backdrop of continuing tough macroeconomic conditions and a weaker
consumer environment, particularly in Europe, coupled with high and volatile
prices for certain raw materials, cost-optimisation continues to be an
important driver for food and beverage customers, looking at ways to reduce
costs and provide more value-based alternatives for consumers.

We believe that the combination of our leading market positions, strong
product portfolio and technical and applications expertise along with the
investments we have made to build a platform capable of delivering long-term
sustainable growth, makes us well placed to benefit from these global trends
in the future.

Financial performance

Within Speciality Food Ingredients, volumes grew by 4% and sales increased by
7% (8% in constant currency) to £947 million (2012 – £887 million). Adjusted
operating profit was broadly in line with the prior year at £213 million (2012
– £214 million) with operating margins down 1.6 percentage points at 22.5%
(2012 – 24.1%). The reduction in margin reflects the step change in fixed
costs associated with the restart of our SPLENDA^® Sucralose facility in
McIntosh, Alabama, our business transformation initiatives, lower sucralose
volumes and higher corn input costs. The effect of exchange translation was to
decrease adjusted operating profit by £1 million.

This segment comprises three broad product categories namely: starch-based
speciality ingredients, high intensity sweeteners and food systems.

Starch-based speciality ingredients

In starch-based speciality ingredients, sales increased by 13% (14% in
constant currency) to £559 million (2012 – £494 million) with volume growth of
5%. While we increased unit margins, percentage operating margins were lower
due to the increase in fixed costs and higher corn prices. While we expect to
deliver an increase in unit margins within this category for the 2014
financial year, the impact of passing through a further increase in corn
prices during the 2013 calendar year contracting round is expected to result
in a slight reduction in percentage operating margins in this category.

In food starches, volumes grew across all regions, with particularly strong
growth in Asia driven by rising demand for convenience foods where our
value-added starches are used to add functionality such as mouth-feel and
extending shelf-life. We have also seen good demand for our speciality
starches in Europe and the US, particularly within the snacks sector.

We saw strong volume growth in our speciality corn sweeteners in emerging
markets where demand is driven not only by the functional benefits they
provide, including the delivery of a consistent texture and sweetness profile,
but also the role that they play as a substitute for sugar in
cost-optimisation projects. The strike at our plant in Turkey during the first
quarter resulted in volumes in Europe being lower than the comparative period.

Our fibres range continues to benefit from consumers’ increased focus on
health and wellness, and we saw strong volume growth in Europe and Asia during
the period. The acquisition in May 2013 of Biovelop, an early-stage
manufacturer of oat beta-glucan, adds a clean-label speciality fibre with
strong health claims to our existing corn-based fibres portfolio.

High-intensity sweeteners

Within high-intensity sweeteners, which comprises SPLENDA^® Sucralose and our
no-calorie, natural sweeteners PUREFRUIT^™ Monk Fruit Extract and TASTEVA^®
Stevia Sweetener, sales were in line with the comparative period at £198
million (2012 – £197 million) with volumes 1% lower.

After a very strong prior year, where volumes grew by 12%, SPLENDA^® Sucralose
volumes were 1% lower than the prior year as a result of two main factors.
First, we had a slow start to the year with a soft first quarter driven by
weakness in Europe. Second, we experienced lower volumes within the table top
segment where competition from natural alternatives has increased.

While we saw a return towards more normal growth patterns overall in the
second quarter and throughout the remainder of the year, supported by the
delivery of a number of growth initiatives, this was not sufficient to match
the strong prior year result.

We expect long-term demand for SPLENDA^® Sucralose to continue to be
underpinned by the health and wellness trend as well as its superior taste
profile and heat stability. With our two unique large-scale continuous
production facilities now operational following the restart of our facility in
McIntosh, Alabama we continue to provide our customers with the highest
quality, fully traceable sucralose, produced according to the highest
standards of sustainability and reliability in the industry.

The launch of products by our customers within the table top segment
incorporating our no-calorie, fruit-based sweetener, PUREFRUIT™ Monk Fruit
Extract has stimulated a number of other customer product launches and driven
incremental sales within the high-intensity sweetener category. We have also
been encouraged by the initial customer response to our stevia-based, natural
sweetener TASTEVA^® Stevia Sweetener which launched in September 2012.

Food systems

In Food Systems, our blending business, sales were 3% lower (flat in constant
currency) at £190 million (2012 – £197 million) with volumes also down 3% on
the prior year. Despite the price of certain raw materials remaining high
during the period, the performance of this product category was ahead of the
prior year reflecting the improvements we have made in managing these higher
input costs and our decision to focus on higher margin blends.

Our new technical and commercial facility in Lübeck, Germany which opened in
June 2012, has helped us to increase the level of customer interaction and has
provided a focal point for the creation and sharing of new ideas between our
food systems facilities around the world.

Bulk Ingredients

                           Year to 31 March   Change
                            2013      2012                  Constant
                                            Reported  currency
                            £m        £m
Sales                       2 309    2 201      + 5%      + 6%
Adjusted operating profit   182       172        + 6%       + 7%
Margin                     7.9%     7.8%     + 10 bps  + 10 bps
                                                            

Market conditions

In the US, the worst drought in the mid-west for 56 years affected both the
size and quality of the 2012/13 harvest with supply falling from the original
US Department of Agriculture’s (USDA) projections of 15.6 million^4 to 11.9
million^5 bushels (-24%), resulting in a sharp rise in corn prices during the
summer. While corn prices remained high and volatile throughout the remainder
of the financial year, they eased slightly during the second half based on
higher projections for ending stocks and on the latest planting intentions for
the new harvest which if realised would represent the highest acreage since
1936. Corn prices in Europe, where the harvest was also affected by a hot and
dry summer, followed a similar pattern to the US.

The extremely dry and hot conditions in the US also affected corn quality with
aflatoxin, a by-product of a grain fungus which tends to concentrate in
certain co-products, present in the harvest particularly in those areas
hardest hit by the drought.

Sugar is the key competitor of many of our corn bulk sweeteners. World sugar
prices fell during the year reflecting better supplies, underpinned by a
better harvest in Brazil, which helped stock levels to recover and created a
global surplus. In the US, prices also fell as a result of a record beet
harvest, a large crop in Mexico (where sugar prices also fell) and the USDA’s
decision to allow additional imports before the size of the domestic crop was
known. Conversely, EU prices remained high and increased slightly during the
year reflecting the undersupply of imports from preferential cane sugar
suppliers over the last few years, something that has led the EU Commission to
intervene to boost supply.

While US domestic demand for nutritive sweeteners continued its long-term
downward trend, once again strong seasonal demand and an increase in exports
helped offset this decline with Mexico continuing to represent the major
export destination. In Europe, higher corn prices during the second half
reduced isoglucose (HFCS) margins.

In the US and Europe, overall consumption of paper and board, the main sources
of demand for our industrial starches, was slightly lower than the prior year.

The market for US ethanol continued to be challenging with negative industry
margins and inventory overhang for much of the period as a result of
oversupply, following the removal of the blender’s tax credit in December
2011, and high corn prices. In response, some industry capacity has come off
line in order to get a better balance between supply and demand leading to
lower levels of industry utilisation and inventory.

Against a backdrop of high corn prices and the severe drought in the US,
prices for animal feed increased in the summer peaking in September and
remaining high for the remainder of the financial year. However, as
anticipated, the increased concentration of aflatoxin above certain
thresholds, particularly in corn gluten meal, restricted the end markets into
which these co-products could be sold reducing average prices in the second
half.

Financial performance

Bulk Ingredients volumes decreased by 2% as we continued our strategy of
diverting grind to produce speciality food ingredients, with sales up 5% (6%
in constant currency) to £2,309 million (2012 – £2,201 million) as a result of
higher corn prices. Adjusted operating profit increased by 6% (7% in constant
currency) to £182 million (2012 – £172 million) driven by a strong performance
from bulk sweeteners in both the US and Europe, partially offset by
challenging market conditions in US ethanol and £8 million adverse impact from
aflatoxin. The full year result includes the release of accrued royalties and
other expenses totalling £4.5 million following the settlement of the
commercial dispute with Whitefox after the year end. The effect of exchange
translation was to decrease operating profit by £2 million.

This division comprises three broad product categories namely: sweeteners;
industrial starches, acidulants and ethanol; and co-products.

Sweeteners

In the Americas, bulk corn sweeteners volumes decreased by 1% and sales
increased by 8% (7% in constant currency) to £942 million (2012 – £876
million) due to higher corn prices. Having achieved a modest increase in HFCS
unit margins in the 2012 contracting round, profits were higher within this
segment than the comparative period despite the lower volumes.

In Europe, sales of bulk corn sweeteners increased by 4% (10% in constant
currency) to £146 million (2012 – £141 million) with volumes in line with the
prior year. While unit margins during the first half were higher as a result
of higher sugar prices (which provide the reference price for isoglucose
(HFCS) in the EU), they were squeezed during the second half on the back of
higher corn prices, with the overall performance for the full year ahead of
the comparative period.

Operating profits from Almex, our Mexican joint venture, were up on the
comparative period.

Industrial starches, acidulants and ethanol

Sales of industrial starches, acidulants and ethanol decreased by 2% (flat at
constant currency) to £667 million (2012 – £677 million) with volumes down by
5%.

In industrial starches, volumes were 5% lower as we continued to switch a
proportion of corn grind to speciality food ingredients. In the US where we
are able to contract for longer periods than in Europe, while volumes were
lower than the comparative period, we delivered a better performance for the
year overall driven by firmer pricing. In Europe, while volumes were broadly
in line with the prior year, unit margins were somewhat lower reflecting
higher corn costs. This part of the business remains particularly sensitive to
changes in the macroeconomic environment.

In US ethanol, which represents a small part of our business, the challenging
market conditions resulted in negative margins for much of the period and an
increase in operating losses for the full year compared to the prior year.

The performance of our citric acid business was slightly better than the prior
year with higher volumes more than offsetting the impact of higher raw
material costs. Having made a loss last year, our Bio-PDO™ joint venture
delivered a better performance generating a small operating profit during the
period.

As part of our strategy to diversify and reduce volatility within our Bulk
Ingredients division, our Bio-Ventures team continued to work on a number of
projects to leverage our fermentation facilities with our green-chemistry
partners. In December 2012 we completed the first successful commercial scale
production of 1,4-Butanediol (Bio-BDO) with our partner Genomatica using a
bio-based manufacturing process at our joint-venture facility in Loudon,
Tennessee.

Co-products

Sales of co-products increased by 9% (9% in constant currency) to £554 million
(2012 - £507 million). For the full year, overall we generated a small amount
of net additional income from co-products with gains made in corn gluten feed
partially offset by lower returns on corn gluten meal where quality and prices
have been affected by aflatoxin. We will continue to manage the risk posed by
aflatoxin throughout the current crop, until the new harvest in the autumn of
2013.

Since over 80% of our US corn grind is utilised to produce Bulk Ingredients,
the majority of the impact from co-products is recorded within this segment.

Group outlook for year ending 31 March 2014

In Speciality Food Ingredients, we expect to deliver good sales and profit
growth with volume growth across all major product categories.

In Bulk Ingredients, against a backdrop of continued corn price volatility,
improved bulk sweetener unit margins in the US are expected to offset a softer
start in US bulk sweetener volumes and lower isoglucose margins in Europe.
Profits within Bulk Ingredients are expected to be more evenly distributed
between the first and second half than in the prior year.

Overall, we expect to deliver another year of profitable growth.

^1 A fungus impacting corn quality caused by prolonged hot and dry conditions
^2 LEED certification is official recognition that the design, fit-out and
operation of a building complies with the requirements prescribed within the
LEED rating systems of the US Green Building Council^® (USGBC^®).
^3 GNPD Mintel; Food and drink products claiming to be ‘natural’ or ‘all
natural’ as a proportion of all food and drink product launches.
^4 10 May 2012
^5 10 August 2012

GROUP FINANCIAL RESULTS

Basis of preparation

Adjusted performance

We report adjusted profit because it provides both management and investors
with valuable additional information on the performance of the business. The
following items are excluded from adjusted profit:

  *results of discontinued operations, including gains and losses on disposal
    (Note 9 and Note 11)
  *exceptional items from continuing operations (Note 4)
  *amortisation of intangible assets acquired through business combinations
  *post-retirement benefit interest (as announced in May 2012).

This adjusted information is used internally for analysing the performance of
the business. A reconciliation of reported and adjusted information is
included in Note 17.

Impact of changes in exchange rates

In comparison to the prior year, the Group’s reported financial performance
this year has been adversely affected by exchange rate translation. A
strengthening of the average US dollar exchange rate against sterling has been
more than offset by the weakening of other currencies which has reduced
profits. The movement in period-end exchange rates, particularly the stronger
US dollar, led to an increase in net debt as a result of the translation of
dollar-denominated debt. The average and closing exchange rates used to
translate reported results were as follows:

                        Average rates      Closing rates
                       2013    2012    2013    2012
US dollar : sterling       1.57    1.60    1.52    1.60
Euro : sterling            1.24       1.15       1.18       1.20
                                                            

Summary of financial results

                                                                     Change
                                                        Change
Year to 31 March                   2013     2012                 (constant
                                                        (reported)
                                                                     currency)
                                  £m       £m       %           %
Continuing operations
Sales                               3 256     3 088     5      %     6    %
                                                                     
Adjusted operating profit           358       348       3      %     4    %
Adjusted net finance expense        (29   )  (30   )
Adjusted profit before tax          329       318       4      %     4    %
Exceptional items                   (12   )   68
Amortisation of intangible assets
acquired through                    (10   )   (12   )
business combinations
Post-retirement benefit interest    2       5     
Profit before tax                   309       379
Income tax expense                  (49   )  (72   )
Profit for the year from            260       307
continuing operations
Profit for the year from            18      2     
discontinued operations
Profit for the year                 278       309

Earnings per share – continuing
operations
Basic                               56.0p     65.9p
Diluted                             54.9p     64.6p
                                                                     
Adjusted earnings per share –
continuing operations
Basic                               58.2p     55.8p
Diluted                             57.0p     54.7p     4      %     5    %
                                                                     
Dividends per share
Interim paid                        7.4p      7.1p      4.2    %
Final proposed                      18.8p   17.8p    5.6    %
                                    26.2p     24.9p     5.2    %

Net debt
At 31 March                         479       476
                                                                     

Sales from continuing operations of £3,256 million (2012 – £3,088 million)
were 5% higher than the prior year (6% in constant currency). Sales in
Speciality Food Ingredients increased by 7% (8% in constant currency) to £947
million (2012 – £887 million), with sales volumes increasing by 4%. Sales in
Bulk Ingredients grew by 5% (6% in constant currency) to £2,309 million (2012
– £2,201 million) with volumes 2% lower.

Adjusted operating profit increased by 3% (4% in constant currency) to £358
million (2012 – £348 million). In Speciality Food Ingredients, adjusted
operating profit was broadly in line with the prior year at £213 million (2012
– £214 million) and in Bulk Ingredients adjusted operating profit increased by
6% (7% in constant currency) to £182 million (2012 – £172 million).

Adjusted net finance expense (excluding post-retirement benefit interest)
decreased from £30 million to £29 million largely driven by the repayment of
our £100 million bond at its maturity in June 2012 which was funded from cash
reserves.

Adjusted profit before tax increased by 4% (4% in constant currency) to £329
million (2012 – £318 million) with adjusted diluted earnings per share
increasing by 4% (5% in constant currency) to 57.0p (2012 – 54.7p).

On a statutory basis, profit before tax from continuing operations decreased
by 18% to £309 million (2012 – £379 million) and profit for the year from
total operations was down 10% at £278 million (2012 – £309 million) with the
comparative period benefiting from a net exceptional credit of £68 million
largely related to our decision to restart production at our SPLENDA
Sucralose^® facility in McIntosh, Alabama.

As announced in May 2012 we now exclude post-retirement benefit interest from
the presentation of our adjusted earnings. All comparatives have been restated
accordingly.

Central costs

Central costs, which include head office, treasury and reinsurance activities,
decreased by £1 million to £37 million mainly as a result of the settlement of
claims by our captive insurer.

Energy costs

Energy costs were slightly lower than the prior year at £170 million (2012 –
£171 million) as a result of lower consumption, following the sale of our
share in Sucromiles SA, the former citric-acid joint venture in Colombia,
partially offset by increased costs due to changes in energy mix. We have
covered approximately 70% of our estimated energy needs for year ending 31
March 2014, albeit at higher prices than in the year ended 31 March 2013 which
we will look to mitigate through further efficiencies.

Exceptional items from continuing operations

                                                             Year to 31 March
                                                              2013       2012
                                                                    
                                                              £m         £m
Gain on disposal of joint venture – Sucromiles                8         –
Business transformation costs                                 (20  )     (15 )
Reversal of fixed asset impairments – McIntosh and Decatur    −          60
assets
Reversal of provision – McIntosh                             −        23  
Exceptional (loss)/gain                                      (12  )    68  
                                                                             

Exceptional items within continuing operations generated a net loss of £12
million on a pre-tax basis. On 1 August 2012, the Group completed the disposal
of our share in Sucromiles SA, the former citric acid joint venture in
Colombia, to our former joint venture partner, Organizacion Ardila Lulle,
resulting in a gain on disposal of £8 million.

An exceptional charge of £20 million was recognised in relation to business
transformation costs with £18 million in relation to the implementation of a
common global IS/IT platform and global Shared Service Centre and £2 million
in relation to the new Commercial and Food Innovation Centre in Chicago.

The tax impact on continuing operations’ net exceptional items is a credit of
£5 million.

Exceptional items from continuing operations in the prior year comprised a net
exceptional credit of £68 million related to our decision to restart
production at our SPLENDA^® Sucralose facility in McIntosh, Alabama (£76
million credit) and the reversal of previously impaired assets in Decatur,
Illinois (£7 million credit), partially offset by business transformation
costs (£15 million). The tax impact of net exceptional items from continuing
operations was a £31 million charge and the Group also recognised an
exceptional tax credit of £10 million for the recognition of a deferred tax
asset in respect of US foreign tax credits associated with the disposal of the
partially constructed and mothballed corn wet mill facility in Fort Dodge,
Iowa.

Net finance expense

As announced in May 2012, when calculating adjusted earnings we now exclude
the impact of post-retirement benefit plans from net finance expense to
provide a more stable measure of the underlying performance of the business.
After excluding this impact, net finance expense from continuing operations
decreased to £29 million (2012 – £30 million) with a reduction in underlying
net interest expense largely driven by the repayment of our £100 million bond
in June 2012.

For the year ending 31 March 2014, the Group will adopt the revised IAS19
accounting standard on employee benefits. We will continue to exclude the
impact of post-retirement benefit plans from net interest expense in
calculating adjusted earnings. The standard also requires administration costs
for post-retirement schemes to be expensed through the profit and loss
account. These are approximately £2 million and adoption of the revised
standard will reduce both reported and adjusted operating profit by this
amount. A proforma income statement in Appendix 2 shows the impact of adopting
the revised standard.

Taxation

Our tax rate is sensitive to the geographic mix of profits and reflects a
combination of higher rates in certain jurisdictions such as the US, nil
effective rates in Singapore (due to pioneer status which we were granted in
2003 to reflect our investment in innovative technology) and the UK, and rates
that lie somewhere in between for example, in certain Eastern European
countries.

Our UK earnings are now relatively small following the sale of our sugars and
molasses businesses with less than 1% of total group sales (£23 million) being
derived from our UK operations and which are offset by our corporate costs,
primarily the interest we pay on our borrowings. As a result, we pay no
corporation tax in the UK.

The effective tax rate on adjusted profit reduced to 17.9% (2012 – 18.2%) with
an increase in the underlying tax rate of around 150 basis points – driven by
changes in the geographic mix of profits – being more than offset by the
settlement of outstanding tax issues in certain jurisdictions outside the UK.
As a result of these non-recurring tax benefits in financial year 2013, and
our expectation of further changes in the geographic mix of profits, we
anticipate the effective tax rate will be somewhat higher in financial year
2014 than this underlying tax rate.

Discontinued operations and legacy issues

Discontinued operations comprise our former Sugars division, principally the
EU Sugars business which we sold in September 2010, Molasses which we sold in
December 2010, our Vietnamese sugar interests which we sold in June 2012 and
legacy contracts and investments of our former International Sugar Trading
business.

Sales from discontinued operations for the year decreased to £10 million from
£72 million as a result of the disposal of the Vietnamese sugar interests and
the continued run-off of activities in the former International Sugar Trading
business. The operating profit from our discontinued operations totalled £18
million, after exceptional gains of £26 million (2012 – £11 million).

The exceptional gains for the year relate to the disposal of our Vietnamese
sugar operations (£21 million) and the disposal of land and buildings relating
to the former Molasses business (£5 million). The impact of taxation on our
discontinued operations was £nil which compares to a £15 million exceptional
tax charge in the prior year in respect of outstanding tax matters associated
with our former starch facilities in Europe. The profit from discontinued
operations after taxation for the year was £18 million (2012 – £2 million).

American Sugar Refining (ASR) has issued proceedings setting out a number of
claims it believes it has under the Agreement dated 30 September 2010 relating
to the sale and purchase of Tate & Lyle’s EU Sugar refining business,
totalling around £40 million. The subject matter of these claims is closely
related to the issues considered by the independent accounting expert in his
decision notified to the parties in May 2012 which strongly supported Tate &
Lyle’s position, as reported in our full year results last year.

After the period end, we settled the commercial dispute with Whitefox
Technologies Limited which was the subject of proceedings in New York last
year. The terms of the settlement are confidential, but the companies are
pleased that this matter has now been resolved in a positive way for all
involved.

Earnings per share

Adjusted diluted earnings per share from continuing operations were 57.0p
(2012 – 54.7p), an increase of 4% (5% in constant currency) as a result of
higher operating profits, marginally lower net finance expense and the
reduction in the effective tax rate. On the same basis, adjusted basic
earnings per share increased by 4% (5% in constant currency) to 58.2p (2012 –
55.8p).

Total basic earnings per share decreased by 9% to 59.7p (2012 – 65.5p) with
the prior year benefiting from net exceptional gains driven by the restart of
our SPLENDA^® Sucralose facility in McIntosh, Alabama.

Dividend

The Board is recommending a 5.6% increase in the final dividend to 18.8p (2012
– 17.8p) making a full year dividend of 26.2p (2012 – 24.9p) per share, up
5.2% on the prior year. Subject to shareholder approval, the proposed final
dividend will be due and payable on 2 August 2013 to all shareholders on the
Register of Members on 28 June 2013. In addition to the cash dividend option,
shareholders will continue to be offered a Dividend Reinvestment Plan (DRIP)
alternative.

Assets

Gross assets of £2,787 million at 31 March 2013 were £119 million lower than
the prior year principally as a result of the disposal of assets that were
held for sale, including our former Vietnamese sugar and Colombian citric acid
businesses. Net assets decreased by £22 million to £1,036 million with profits
generated in the year and foreign exchange gains on the translation of
overseas subsidiaries being more than offset by actuarial losses on our
post-retirement schemes and dividend payments.

Post-retirement benefits

We maintain pension plans for our employees in a number of countries. Some of
these arrangements are defined benefit pension schemes and, although we have
now closed the main UK scheme and US salaried scheme to future accrual,
certain obligations remain. In the US, we also provide medical and life
assurance benefits as part of the retirement package.

In December 2012, the Trustee of the main UK pension scheme agreed a £347
million partial pensioner buy-in of approximately 43% of total pensioner
liabilities with Legal & General plc which effectively hedges these
liabilities in full.

The net deficit of our post-retirement obligations at 31 March 2013 of £265
million increased by £125 million from the prior year (2012 – £140 million).
The increase in obligations was a result of lower discount rates used to value
our obligations and the accounting impact on plan assets of the pensioner
buy-in, partly offset by cash contributions made to the schemes.

Net debt

Net debt was marginally higher than the prior year at £479 million (2012 –
£476 million). Free cash flow from continuing businesses of £110 million
together with disposal proceeds from the sale of businesses (£51 million) were
partially offset by dividend payments of £117 million and the repurchase of
£23 million of ordinary shares to satisfy the Group's share option schemes.
There was an adverse exchange rate impact on net debt of £43 million
principally as a result of the strengthening of the US dollar exchange rate
against sterling.

In June 2012, at maturity, we repaid our 6.5% £100 million Guaranteed Notes
from cash resources. During the year, net debt peaked at £526 million in
February 2013. The average net debt was £433 million, a reduction of £21
million from £454 million in the prior year.

Cash flow

Operating cash flow from continuing operations was £297 million (2012 – £233
million). An outflow within working capital of £107 million included higher
inventory levels in the US due to higher corn prices and aflatoxin, and the
requirement for additional sucralose inventory following the restart of
production at our McIntosh, Alabama facility.

The cash flow impact of payments made into the Group’s main pension schemes
amounted to £44 million (2012 – £80 million) with the prior year including a
one-off contribution of £45 million into the main UK pension scheme following
the conclusion in June 2011 of the triennial valuation as at 31 March 2010.

                                                             Year to 31 March
                                                              2013      2012
                                                                    
                                                              £m        £m
Adjusted operating profit from continuing operations          358      348
Depreciation/amortisation                                     98        91
Working capital before retirement benefits and exceptional    (107  )   (121 )
cash items
Net retirement benefit obligations                            (44   )   (80  )
Cash expenditure on exceptional items                         (21   )   (16  )
Share based payments                                         13      11   
Operating cash flow                                           297       233
Capital expenditure                                          (134  )  (130 )
Operating cash flow less capital expenditure                  163       103
Net interest and tax paid                                    (53   )  (24  )
Free cash flow                                               110     79   
                                                                             

Capital expenditure of £134 million, including a £42 million investment in
intangible assets, was 1.4 times the depreciation and amortisation charge of
£98 million and, as in the prior year, reflects expenditure on our business
transformation initiatives and in particular, the implementation of the global
IS/IT system. We expect the ratio of capital expenditure to
depreciation/amortisation in the year ending 31 March 2014 to be higher than
that of 2013.

Net interest paid decreased by £5 million to £35 million principally as a
result of the repayment of the £100 million bond in June 2012.

Net income tax payments were £18 million (2012 – £16 million inflow), with the
prior year including a one-off US tax receipt of £24 million in relation to
the recovery of tax as a result of the sale of the mothballed facility at Fort
Dodge, Iowa.

Free cash inflow (representing cash generated from continuing operations after
working capital, interest, taxation and capital expenditure) at £110 million
was £31 million higher than the prior year principally as a result of lower
contributions to the main UK pension scheme and lower working capital outflows
partially offset by higher tax payments.

During the year we spent £23 million on the repurchase of ordinary shares to
satisfy share option schemes. Parent company cash dividends paid were £117
million, £5 million higher than the prior year.

CONSOLIDATED INCOME STATEMENT
                                                                 
                                                         Year to      Year to
                                                         31 March     31 March
                                                         2013         2012
                                               Notes            
                                                         £m           £m
Continuing operations
                                                 3       3 256       3 088  
Sales
                                                                      
Operating profit                                 3       336          404
Finance income                                   5       3            8
Finance expense                                  5       (30    )     (33    )
Profit before tax                                        309          379
Income tax expense                               6       (49    )     (72    )
Profit for the year from continuing operations           260          307
Profit for the year from discontinued            9       18          2      
operations
Profit for the year                                      278         309    
                                                                      
Profit for the year attributable to:
– Owners of the Company                                  277          305
– Non-controlling interests                              1           4      
Profit for the year                                      278         309    
                                                                      
Earnings per share attributable to the owners
of the Company                                   7       Pence        pence

from continuing and discontinued operations
– Basic                                                  59.7         65.5
– Diluted                                                58.5        64.3   
                                                                      
Earnings per share attributable to the owners
of the Company                                   7

from continuing operations
– Basic                                                  56.0         65.9
– Diluted                                                54.9        64.6   
                                                               
                                                                      
Analysis of adjusted profit before tax from              £m           £m
continuing operations
Profit before tax                                        309          379
Adjustments for:
Exceptional items                                4       12           (68    )
Amortisation of intangible assets acquired               10           12
through business combinations
Post-retirement benefit interest                 5       (2     )     (5     )
Adjusted profit before tax, exceptional items,
amortisation of intangible assets                        329         318    
acquired through business combinations and
post-retirement benefit interest
                                                                    
                                                                             

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                   
                                                           Year to    Year to
                                                           31 March   31 March
                                                           2013       2012
                                                                  
                                                           £m         £m
Profit for the year                                        278        309
                                                                      
Actuarial losses in post-employment benefit plans          (153  )    (87   )
Deferred tax relating to actuarial losses in               (3    )    33
post-employment benefit plans
Net fair value losses on cash flow hedges                  (3    )    (2    )
Cash flow hedges reclassified and reported in the income
statement                                                  4          (3    )

during the year
Valuation loss on available-for-sale financial assets      (1    )    (1    )
Net exchange differences                                   27         (30   )
Items recycled to the income statement on disposal         (14   )    (11   )
Deferred tax relating to the other above components        (6    )    (6    )
Other comprehensive expense for the year, net of tax       (149  )    (107  )
Total comprehensive income for the year                    129       202   
                                                                      
Total comprehensive income relating to continuing          117        211
operations
Total comprehensive income relating to discontinued        12        (9    )
operations
                                                           129       202   
                                                                      
Attributable to:
– Owners of the Company                                    127        198
– Non-controlling interests                                2         4     
                                                           129       202   
                                                                      
Dividends per share:                                       Pence      Pence
– Interim paid                                             7.4        7.1
– Final proposed                                           18.8      17.8  
                                                           26.2      24.9  
                                                                            

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                  
                                                           31 March   31 March
                                                           2013       2012
                                                 Notes           
                                                           £m         £m
ASSETS
Non-current assets
Goodwill and other intangible assets                       356        325
Property, plant and equipment                              958        922
Investments in associates                                  6          5
Available-for-sale financial assets                        27         23
Derivative financial instruments                           54         57
Deferred tax assets                                        8          37
Trade and other receivables                                3          2
Retirement benefit surplus                                 12         146
                                                           1 424      1 517
Current assets
Inventories                                                510        450
Trade and other receivables                                383        332
Current tax assets                                         4          3
Derivative financial instruments                           86         80
Cash and cash equivalents                          12      379        424
                                                           1 362      1 289
Assets held for sale                               10      1          100
                                                           1 363      1 389
TOTAL ASSETS                                               2 787      2 906
                                                                      
SHAREHOLDERS’ EQUITY
Capital and reserves attributable to the owners
of the Company
Share capital                                              117        117
Share premium                                              406        406
Capital redemption reserve                                 8          8
Other reserves                                             139        128
Retained earnings                                          366        374
                                                           1 036      1 033
Non-controlling interests                                  –          25
TOTAL SHAREHOLDERS’ EQUITY                                 1 036      1 058
                                                                      
LIABILITIES
Non-current liabilities
Trade and other payables                                   3          4
Borrowings                                         12      821        805
Derivative financial instruments                           21         19
Deferred tax liabilities                                   24         25
Retirement benefit deficit                                 277        286
Provisions for other liabilities and charges               15         18
                                                           1 161      1 157
Current liabilities
Trade and other payables                                   382        382
Current tax liabilities                                    53         49
Borrowings and bank overdrafts                     12      75         141
Derivative financial instruments                           60         94
Provisions for other liabilities and charges               20         10
                                                           590        676
Liabilities held for sale                          10      –          15
                                                           590        691
TOTAL LIABILITIES                                          1 751      1 848
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES                 2 787      2 906
                                                                      

CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                  
                                                           Year to    Year to
                                                           31 March   31 March
                                                           2013       2012
                                                 Notes           
                                                           £m         £m
Cash flows from operating activities
Profit before tax from continuing operations               309        379
Adjustments for:
Depreciation of property, plant and equipment              91         85
Exceptional items, net of cash flow impact                 (9    )    (84   )
Amortisation of intangible assets                          17         18
Share-based payments                                       13         11
Finance income                                     5       (3    )    (8    )
Finance expense                                    5       30         33
Changes in working capital                                 (107  )    (121  )
Changes in net retirement benefit obligations              (44   )    (80   )
Cash generated from continuing operations                  297        233
Interest paid                                              (36   )    (43   )
Income tax (paid)/received                                 (18   )    16
Cash generated from discontinued operations        9       8         25    
Net cash generated from operating activities               251       231   
                                                                      
Cash flows from investing activities
Proceeds on disposal of property, plant and                3          2
equipment
Interest received                                          1          3
Purchase of available-for-sale financial assets            (4    )    (6    )
Disposal of available-for-sale financial assets            –          18
Acquisitions of businesses, net of cash acquired   11      –          (7    )
Disposal of joint ventures, net of cash disposed   11      15         –
Disposal of businesses, net of cash disposed       11      36         1
Purchase of property, plant and equipment                  (92   )    (102  )
Purchase of intangible assets and other                    (42   )    (28   )
non-current assets
Net cash generated from investing activities in    9       –         2     
discontinued operations
Net cash used in investing activities                      (83   )    (117  )
                                                                      
Cash flows from financing activities
Proceeds from issuance of ordinary and treasury            1          3
shares
Purchase of ordinary shares                                (23   )    (19   )
Cash inflow from additional borrowings                     24         8
Cash outflow from repayment of capital element             (2    )    (5    )
of finance leases
Cash outflow from repayment of borrowings                  (117  )    (188  )
Dividends paid to the owners of the Company                (117  )    (112  )
Dividends paid to non-controlling interests                (2    )    –
Net cash used in financing activities in           9       –         (2    )
discontinued operations
Net cash used in financing activities                      (236  )    (315  )
                                                                     
Net decrease in cash and cash equivalents          12      (68   )    (201  )
                                                                      
Cash and cash equivalents
Balance at beginning of year                               446        654
Effect of changes in foreign exchange rates                1          (7    )
Net decrease in cash and cash equivalents                  (68   )    (201  )
Balance at end of year                                     379       446   
                                                                      
Less: Assets held for sale                         10      –         22    
Balance as presented in the consolidated           12      379       424   
statement of financial position
                                                                            

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
                                                                                     
                   Share                                        Attributable
                   capital   Capital      Other      Retained   to             Non-          Total
                  and       redemption   reserves   earnings   the owners     controlling   equity
                   share     reserve                            of             interests
                   premium                                      the Company
                 £m       £m          £m        £m        £m            £m           £m
Balance at 1       523       8            175        244        950            23            973
April 2011
Other
comprehensive      –         –            (47   )    (60   )    (107     )     –             (107 )
expense for the
year
Profit for the    –        –           –        305      305          4           309  
year
Total
comprehensive      –         –            (47   )    245        198            4             202
(expense)/income
for the year
Share-based
payments charge,   –         –            –          13         13             –             13
including tax
Proceeds from      –         –            –          3          3              –             3
shares issued
Share repurchase   –         –            –          (19   )    (19      )     –             (19  )
Dividends paid    –        –           –        (112  )   (112     )    (2     )     (114 )
Balance at 31     523      8           128      374      1 033        25          1    
March 2012                                                                                   058
Other
comprehensive      –         –            11         (161  )    (150     )     1             (149 )
income/(expense)
for the year
Profit for the    –        –           –        277      277          1           278  
year
Total
comprehensive      –         –            11         116        127            2             129
income for the
year
Share-based
payments charge,   –         –            –          15         15             –             15
including tax
Proceeds from      –         –            –          1          1              –             1
shares issued
Share repurchase   –         –            –          (23   )    (23      )     –             (23  )
Dividends paid     –         –            –          (117  )    (117     )     (2     )      (119 )
Non-controlling
interests         –        –           –        –        –            (25    )     (25  )
disposed
Balance at 31     523      8           139      366      1 036        –           1    
March 2013                                                                                   036
                                                                                                  

                      NOTES TO THE FINANCIAL INFORMATION
                        For the Year to 31 March 2013

1. Basis of preparation

The full year results for the year to 31 March 2013 have been extracted from
audited consolidated financial statements which have not yet been delivered to
the Registrar of Companies. The financial information in this announcement
does not constitute the Group’s Annual Report and financial statements. The
auditors have reported on the Group’s financial statements for the year to 31
March 2013. The report was unqualified and did not contain a statement under
Section 498 (2) or (3) of the Companies Act 2006.

The consolidated financial statements have been prepared in accordance with
IFRS as adopted by the European Union, and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.

2. Changes in accounting policy and disclosures

The accounting policies adopted in the preparation of the condensed set of
consolidated financial information are consistent with those of the Group’s
Annual Report and Accounts for the year ended 31 March 2012, other than the
adoption, with effect from 1 April 2012, of new or revised accounting
standards, as set out below.

Discontinued operations includes activity relating to businesses that were
part of the former Sugars segment.

The following standards are effective for the Group’s accounting period
beginning on 1 April 2012 and where relevant have been adopted in this
financial information. They have not had a material impact on the results or
financial position of the Group:

  *Amendment to IFRS 7 Financial instruments: Transfers of financial assets
  *Amendment to IFRS 1 First time adoption on hyperinflation and fixed dates
  *Amendment to IAS 12,'Income taxes' on deferred tax

The following new standards, new interpretations and amendments to standards
and interpretations have been issued but are not effective for the financial
year beginning 1 April 2012 and have not been early adopted:

  *Amendments to IAS 19 Employee benefits (effective 1 January 2013)
  *Amendments to IAS 1 Presentation of financial statements – other
    comprehensive income (effective 1 July 2012)
  *Amendments to IAS 32 Financial instruments presentation (effective 1
    January 2014)
  *Amendment to IFRS 7 Financial instruments: Disclosures on offsetting
    (effective 1 January 2013)
  *Annual Improvements 2011 (effective 1 January 2013)
  *IFRS 9 Financial instruments (effective 1 January 2013)
  *IFRS 10 Consolidated financial statements (endorsed 1 January 2014)
  *IFRS 11 Joint arrangements (endorsed 1 January 2014)
  *IFRS 12 Disclosure of interest in other entities (endorsed 1 January 2014)
  *IFRS 13 Fair Value measurement (effective 1 January 2013)

With the exception of Amendments to IAS 19 Employee Benefits and IFRS 11 Joint
Arrangements, the adoption of the above standards, amendments and
interpretations is not expected to have a material impact on the Group’s
result for the year or equity. The change to IAS 19 modifies the basis on
which the financing charge is calculated by applying the discount rate to the
net defined benefit obligation and requires the recognition of scheme
administration costs within operating profit. For the year ended 31 March
2013, the new requirements would have increased net finance costs recognised
outside adjusted earnings by £6 million and reduce operating profit by £2
million. Under its current accounting policies the Group recognises actuarial
gains and losses directly in other comprehensive income, as required by the
new standard.

In May 2011, the IASB issued IFRS 11 Joint Arrangements which is effective for
accounting periods beginning on or after 1 January 2014 following endorsement
by the European Union. While the Group’s net result and net assets will remain
unchanged, the presentation of the Consolidated Income Statement, Consolidated
Statement of Financial Position and Consolidated Statement of Cash Flow will
change significantly as IFRS 11 does not allow proportional consolidation of
joint ventures, which is the Group’s current accounting policy, as allowed
under IAS 31. Under IFRS 11, joint ventures will be accounted for using the
equity method which, all other factors remaining the same, will reduce Group
sales, operating profit, total assets, and total liabilities. Operating
segment presentation will remain unchanged reflecting the use of proportional
consolidation of joint ventures for internal reporting to the Group’s Chief
Operating Decision Maker.

3. Segment information

The Group operates two divisions within continuing operations: Speciality Food
Ingredients and Bulk Ingredients. These divisions meet the definition of an
operating segment under IFRS 8. Central costs, which include head office,
treasury and reinsurance activities, do not meet the operating segment
definition under IFRS 8 but have been disclosed as a reportable segment in the
tables below to be consistent with internal management reporting.

In the current year, there has been a change to internal management reporting
which eliminates intersegment sales.

Discontinued operations comprise businesses that formed part of the former
Sugars segment (Note 9).

The segment results for the year to 31 March 2013 are as follows:

                 Continuing operations
                  Speciality    Bulk          Central            Discontinued   Total
                 Food         Ingredients  costs    Total   operations    operations
                  Ingredients                                    (Note 9)
                £m           £m           £m       £m      £m            £m
Sales
Total sales       947           2 309         –         3        10             3 266
                                                        256
Inter-segment     –            –            –        –       –             –       
sales
External sales    947          2 309        –        3       10            3 266   
(a)                                                     256
                                                                                
Operating
profit/(loss)
Before
exceptional
items and
amortisation of
intangible        213           182           (37  )    358      (8     )       350
assets acquired
through
business
combinations
Exceptional       (3      )     8             (17  )    (12  )   26             14
items (Note 4)
Amortisation of
intangible
assets acquired   (10     )     –            –        (10  )   –             (10     )
through
business
combinations
Operating         200          190          (54  )    336      18             354
profit/(loss)
Finance income
before
post-retirement                                         1        –              1
benefit
interest
Finance expense                                         (30  )   –              (30     )
Net
post-retirement                                         2       –             2       
benefit
interest credit
Profit before                                           309     18            327     
tax
                                                                                
Adjusted
operating         22.5    %     7.9     %     –         11.0 %
margin
                                                                                
Operating         21.1    %     8.2     %     –         10.3 %
margin
                                                                                

(a) There were no customers that contributed more than 10% of the Group’s
external sales from continuing operations for the year ended 31 March 2013.

The segment results for the year to 31 March 2012 are as follows:

                 Continuing operations
                  Speciality                                 Discontinued 
                  Food          Bulk          Central            operations     Total
                  Ingredients   Ingredients   costs     Total    (Note 9)       operations
                £m           £m           £m       £m      £m            £m
Sales
Total sales       992           2 277         –         3        72             3 341
                                                        269
Inter-segment     (105    )     (76     )     –        (181 )   –             (181    )
sales
External sales    887          2 201        –        3       72            3 160   
(b)                                                     088
                                                                                
Operating
profit/(loss)
Before
exceptional
items and
amortisation of
intangible        214           172           (38  )    348      5              353
assets acquired
through
business
combinations
Exceptional       70            7             (9   )    68       11             79
items (Note 4)
Amortisation of
intangible
assets acquired   (12     )     –            –        (12  )   –             (12     )
through
business
combinations
Operating         272          179          (47  )    404      16             420
profit/(loss)
Net finance
income before
post-retirement                                         3        2              5
benefit
interest
Finance expense                                         (33  )   (1     )       (34     )
Net
post-retirement                                         5       –             5       
benefit
interest credit
Profit before                                           379     17            396     
tax
                                                                                
Adjusted
operating         24.1    %     7.8     %     –         11.3 %
margin
                                                                                
Operating         30.7    %     8.1     %     –         13.1 %
margin
                                                                                

(b) There were no customers that contributed more than 10% of the Group’s
external sales from continuing operations for the year ended 31 March 2012.

4. Exceptional items

Exceptional items are as follows:

                                                          Year to   Year to
                                                           31 March   31 March
                                                           2013       2012
                                                         £m        £m
Continuing operations
Gain on disposal of joint venture – Sucromiles (a)         8          –
Business transformation costs (b)                          (20)       (15)
Reversal of property, plant and equipment impairments –
McIntosh                                                   –          60
and Decatur assets (c)
Reversal of provision – McIntosh (c)                       –          23
                                                           (12)       68
Discontinued operations
Gain on disposal of business – Vietnam Sugar (d)           21         –
Gain on disposal – Molasses (e)                            5          –
Gain on disposal of minority holdings – International      –          11
Sugar Trading (f)
                                                           26         11
                                                                      

Continuing operations

      On 1 August 2012, the Group completed the disposal of its share in
      Sucromiles SA (Sucromiles), its Colombian citric acid joint venture, to
      its former joint venture partner, Organizacion Ardila Lulle. After
(a)  recycling foreign exchange revaluation gains previously held in reserves
      to the income statement, a gain on disposal of £8 million was recorded
      and is reported in the Bulk Ingredients segment. Further details are set
      out in Note 11.
      
      The Group has recognised an exceptional charge of £20 million (2012 –
      £15 million) in relation to business transformation costs. The Group
      incurred £18 million (2012 – £9 million) of costs that did not meet the
      capitalisation criteria associated with the implementation of a common
      global IS/IT platform and Global Shared Services Centre, and £2 million
(b)   (2012 – £5 million) in relation to the relocation of employees and
      restructuring associated with the new Commercial and Food Innovation
      Centre in Chicago, Illinois. In the prior year, a further £1 million of
      closure and other restructuring costs were incurred in relation to the
      Food Systems business. These costs are reported in the Speciality Food
      Ingredients segment (£3 million; 2012 – £6 million) and within Central
      costs (£17 million; 2012 – £9 million).
      
      In the prior year, the Group took the decision to re-open the mothballed
      facility in McIntosh, Alabama and restart the production of sucralose,
      which resulted in the reversal of £53 million of the impairment charge
(c)   previously recognised against property, plant and equipment. In
      addition, £23 million of the provision in respect of obligations
      relating to the mothballed facility was no longer required and was also
      reversed. These exceptional items were reported within the Speciality
      Food Ingredients segment.
      
      In addition, in November 2010 the Group signed an agreement with Amyris,
      Inc. to manufacture Trans-beta-Farnesene using assets located at the
      Decatur, Illinois plant that were previously redundant. In the prior
      year, commercial viability of that production process was proven
      resulting in a £7 million reversal of a write down previously recognised
      against property, plant and equipment. This exceptional item was
      reported within the Bulk Ingredients segment.
      

The tax impact on continuing net exceptional items is a £5 million credit
(2012 – £31 million charge). Tax credits on exceptional costs are only
recognised to the extent that losses incurred will result in tax recoverable
in the future. In addition in the prior year, there was an exceptional tax
credit of £10 million which represented the recognition of a deferred tax
asset in respect of foreign tax credits in respect of the disposal of the
ethanol facility in Fort Dodge, Iowa.

Discontinued operations

      On 29 June 2012, the Group completed the sale of Vietnam Sugar to TH
      Milk Food Stock Company. After recycling foreign exchange revaluation
(d)  gains previously held in reserves to the income statement, a gain on
      disposal of £21 million was recorded. Further details are set out in
      Note 11.
      
      On 20 March 2013, the Group completed sale of the land and buildings
(e)   relating to the former Molasses business, with a gain recognised on
      disposal of £5 million. Further details are set out in Note 11.
      
      In the prior year the Group completed the sale of its minority holdings
(f)   in Egypt and Saudi Arabia relating to the former International Sugar
      Trading business. After recycling revaluation gains to the income
      statement, the Group recorded an exceptional gain of £11 million.
      

The tax impact on discontinued net exceptional items is £nil in the current
financial year (2012 – £nil). Tax credits on exceptional costs are only
recognised to the extent that losses incurred will result in tax recoverable
in the future.

In the prior year, the Group recognised an exceptional tax charge of £15
million in respect of outstanding tax matters associated with the starch
facilities that formed part of the former Food & Industrial Ingredients,
Europe segment, which are in the process of litigation. These facilities were
disposed of by the Group in the year ended 31 March 2008.

5. Finance income and finance expense

                                                         Year to   Year to
                                                           31 March   31 March
                                                           2013       2012
Continuing operations                                   £m        £m
Finance income
                                                           1          3
Interest receivable
Net finance income arising on defined benefit
retirement schemes:
– expected return on plan assets                           71         78
– interest cost                                            (69   )    (73   )
Total finance income                                       3         8     
                                                                      
Finance expense
Interest payable on bank and other borrowings              (28   )    (31   )
Finance lease charges                                      (2    )    (1    )
Fair value gains/(losses) on interest-related
derivative instruments:
– interest rate swaps – fair value hedges                  –          20
– derivatives not designated as hedges                     (1    )    (3    )
Fair value adjustment of borrowings attributable           1         (18   )
to interest rate risk
Total finance expense                                      (30   )    (33   )
                                                                            
Net finance expense                                        (27   )    (25   )
                                                                
Reconciliation to adjusted net finance expense      Note   £m         £m
Net finance expense                                        (27   )    (25   )
Net post-retirement benefit interest credit                (2    )    (5    )
Adjusted net finance expense                        17     (29   )    (30   )
                                                                
                                                                      

Finance expense is shown net of borrowing costs capitalised within intangible
assets of £2 million (2012 – £1 million capitalised within property, plant and
equipment) at a capitalisation rate of 3.8% (2012 – 3.7%).

Interest payable on other borrowings includes £0.2 million (2012 – £0.2
million) of dividends in respect of the Group’s 6.5% cumulative preference
shares.

Discontinued operations

Included within the profit for the year in relation to discontinued operations
(Note 9) is net finance income of £nil (2012 – £1 million).

6. Income tax expense

                                          Year to   Year to
                                           31 March   31 March
                                           2013       2012
Continuing operations                     £m        £m
Current tax:
In respect of the current year
– UK                                       –          –
– Overseas                                 23         7
Adjustments in respect of previous years   –         –     
                                           23         7
Deferred tax charge                        30         73
Adjustments in respect of previous years   (4    )    2
Exceptional tax credit                     –         (10   )
Income tax expense                         49        72    
                                                      

The income tax charge relating to continuing operations for the year to 31
March 2013 is £49 million (2012 – £72 million) and includes a credit of £5
million in respect of pre-tax exceptional items (2012 – £31 million charge).

The effective tax rate for the year, calculated on the basis of the total
income tax charge relating to continuing operations as a proportion of profit
before tax, is 15.8% (2012 – 19.0%). This compares with the standard rate of
corporation tax in the UK of 24% (2012 – 26%). The effective tax rate relating
to continuing operations on profit before exceptional items, amortisation of
intangibles assets acquired through business combinations, post-retirement
benefit interest and exceptional tax items is 17.9% (2012 – 18.2%).

Included within deferred tax is a credit of £4 million (2012 – £2 million
charge) principally relating to the settlement of prior year tax obligations
in a number of jurisdictions.

In the prior year the exceptional tax credit of £10 million represents the
recognition of a deferred tax asset in respect of foreign tax credits
recognised in association with the disposal of Fort Dodge.

The standard rate of corporation tax in the United Kingdom has reduced from
24% to 23% from 1 April 2013.

Discontinued operations

The income tax charge in respect of discontinued operations (Note 9) in the
year to 31 March 2013 is £nil million (2012 – £15 million charge). The
comparative period comprised of a £15 million exceptional charge increasing
the provisions relating to outstanding tax matters associated with the starch
facilities that formed part of the former Food & Industrial Ingredients,
Europe segment, which are in the process of litigation. These facilities were
disposed of by the Group in the year ended 31 March 2008.

7. Earnings per share

Basic

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 ordinary shares purchased by the Company and
held in the Employee Share Ownership Trust or in Treasury.

                 Year to 31 March 2013              Year to 31 March 2012
                  Continuing  Discontinued  Total   Continuing  Discontinued  Total
                operations  operations          operations  operations    
Profit/(loss)
attributable to
owners of the     260          17             277     307          (2      )      305
Company (£
million)
Weighted
average number
of ordinary       464.2        464.2          464.2   465.7        465.7          465.7
shares in issue
(millions)
Basic
earnings/(loss)   56.0p        3.7p           59.7p   65.9p        (0.4    )p     65.5p
per share
                                                                                  

Diluted

Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue to assume conversion of all potential
dilutive ordinary shares. Potential dilutive ordinary shares arise from share
options and the Group’s long term share incentive plans. For non-performance
related share plans, a calculation is performed to determine the number of
shares that could have been acquired at fair value (determined as the average
annual market share price of the Company’s shares) based on the monetary value
of the subscription rights attached to outstanding share options. For
performance related share plans, a calculation is performed to determine the
satisfaction or otherwise, of the performance conditions at the end of the
reporting period, and the number of shares which would be issued based on the
status at the end of the reporting period.

                 Year to 31 March 2013              Year to 31 March 2012
                  Continuing  Discontinued  Total   Continuing  Discontinued  Total
                operations  operations          operations  operations    
Profit/(loss)
attributable to
owners of the     260          17             277     307          (2      )      305
Company (£
million)
Weighted
average number
of diluted        473.5        473.5          473.5   474.9        474.9          474.9
shares
(millions)
Diluted
earnings/(loss)   54.9p        3.6p           58.5p   64.6p        (0.3    )p     64.3p
per share
                                                                                  

The adjustment for the dilutive effect of share options at 31 March 2013 was
9.3 million shares (2012 – 9.2 million).

Adjusted earnings per share

Adjusted earnings per share is stated excluding exceptional items, the
amortisation of intangible assets acquired through business combinations and
net post-retirement benefit interest as follows:

                                                          Year to   Year to
                                                           31 March   31 March
Continuing operations                                     2013      2012
Profit attributable to owners of the Company (£ million)   260        307
Adjustments for (£ million):
– exceptional items (note 4)                               12         (68    )
– amortisation of intangible assets acquired through       10         12
business combinations
– net post-retirement benefit interest credit              (2     )   (5     )
– tax effect of the above adjustments                      (10    )   24
– exceptional tax credit                                   –         (10    )
Adjusted profit (£ million)                                270       260    
                                                                      
Adjusted basic earnings per share from continuing          58.2p      55.8p
operations
Adjusted diluted earnings per share from continuing       57.0p    54.7p  
operations
                                                                             

8. Dividends

                                                          Year to   Year to
                                                           31 March   31 March
                                                         2013      2012
Dividends paid on ordinary equity shares (£ million):
– final paid relating to prior year                        83         79
– interim paid relating to current year                    34         33
Total dividend paid in cash (£ million)                    117        112

The total ordinary dividend in respect of the current
financial year is 26.2p (2012 − 24.9p) made up as
follows:
– interim dividend paid                                    7.4p       7.1p
– final dividend proposed (Note a)                         18.8p      17.8p
Total                                                      26.2p      24.9p
                                                                      

      The final dividend proposed for the year of £87 million (2012 – £83
      million), based on the number of shares outstanding as at 31 March 2013,
(a)  has not been recognised as a liability and will be settled on 2 August
      2013, to shareholders who are on the Register of Members on 28 June 2013
      subject to approval by shareholders at the Company’s Annual General
      Meeting on 24 July 2013.
      

9. Discontinued operations

The results of the former Sugars segment are presented as discontinued
operations in both the current and comparative year. In the current year, the
Group completed the sale of its Vietnam Sugar operations, its remaining Israel
Sugar assets and other assets relating to Sugar operations which are
discontinued. Further details can be found in Note 11. In the prior year,
Other also includes £15 million of income tax expense in respect of
outstanding tax matters associated with the starch facilities that formed part
of the former Food & Industrial Ingredients, Europe segment, which are in the
process of litigation.

                                                Year to 31 March 2013
                                                                      
                                                 Vietnam Sugar   Other   Total
                                               £m             £m     £m
Sales                                            9               1       10
                                                                         
Operating profit/(loss) before exceptional       3               (11 )   (8  )
items
Exceptional items (Note 4)                      21            5     26  
Operating profit/(loss) and profit/(loss)        24              (6  )   18
before tax
Income tax expense (Note 6)                     –             –     –   
Profit/(loss) for the year                       24              (6  )   18
Non-controlling interests                       (1      )      –     (1  )
Profit/(loss) attributable to owners of the     23            (6  )  17  
Company
                                                                         
                                                 Year to 31 March 2012
                                                                         
                                                 Vietnam Sugar   Other   Total
                                               £m             £m     £m
Sales                                            31              41      72
                                                                         
Operating profit/(loss) before exceptional       7               (2  )   5
items
Exceptional items (Note 4)                      –             11    11  
Operating profit                                 7               9       16
Finance income                                   2               –       2
Finance expense                                 –             (1  )  (1  )
Profit before tax                                9               8       17
Income tax expense (Note 6)                     –             (15 )  (15 )
Profit/(loss) for the year                       9               (7  )   2
Non-controlling interests                       (4      )      –     (4  )
Profit/(loss) attributable to owners of the     5             (7  )  (2  )
Company

Net cash flows from discontinued operations are as follows:
                                                                         
                                                 Year to 31 March 2013
                                                                         
                                                 Vietnam Sugar   Other   Total
                                               £m             £m     £m
Net cash generated from operating activities     4             4     8   
                                                                         
                                                 Year to 31 March 2012
                                                                         
                                                 Vietnam Sugar   Other   Total
                                               £m             £m     £m
Net cash generated from operating activities     10              15      25
Net cash generated from investing activities     2               –       2
Net cash used in financing activities            (2      )      –     (2  )
                                                                         

10. Assets and liabilities classified as held for sale

Assets held for sale as at 31 March 2013 and 2012 are shown in the table
below. The assets held for sale at 31 March 2013 relates to the Group’s
investment in Mitr Lao Sugar Company.

Assets and liabilities reported as held for sale as at 31 March 2012 comprised
of the Group's majority share in Vietnam Sugar, its 50% share in Sucromiles SA
(Sucromiles), its Columbian citric acid joint venture, land and buildings
relating to the former Molasses business, the investment in Mitr Lao Sugar
Company and other assets relating to the Group's former sugar operations. All
of these assets and liabilities with the exception of the investment in Mitr
Lao Sugar Company were disposed during the year. Further detail relating to
these disposals can be found in Note 11.

                                      31 March  31 March
                                       2013       2012
                                     £m        £m
Assets
Goodwill and other intangible assets   –          2
Property, plant and equipment          –          22
Available-for-sale financial assets    1          1
Inventories                            –          25
Trade and other receivables            –          15
Derivative financial instruments       –          13
Cash and cash equivalents              –          22    
Total assets held for sale             1          100   
                                                  
Liabilities
Trade and other payables               –          (9    )
Current tax liabilities                –          (1    )
Derivative financial instruments       –          (5    )
Total liabilities held for sale        –          (15   )
                                                  

11. Acquisitions and disposals

2013

Continuing operations

Sucromiles

On 1 August 2012, the Group completed the disposal of its share in Sucromiles
SA (Sucromiles), its Colombian citric acid joint venture, to its former joint
venture partner, Organizacion Ardila Lulle, for consideration of £20 million.
After recycling foreign exchange revaluation gains previously held in reserves
to the income statement, an exceptional gain on disposal of £8 million (note
4) was recorded within continuing operations.

Discontinued operations

Vietnam Sugar

On 29 June 2012, the Group completed the sale of Vietnam Sugar to TH Milk Food
Stock Company for consideration of £45 million. After recycling foreign
exchange revaluation gains previously held in reserves to the income
statement, an exceptional gain on disposal of £21 million (note 4) was
recorded within discontinued operations.

Molasses

On 20 March 2013, the Group completed the sale of land and buildings with book
value of £2 million relating to the former Molasses business to W&R Barnett
Ltd. Cash consideration totalling £7 million was received resulting in a gain
on disposal of £5 million (note 4) recorded within discontinued operations.

EU Sugars

During the financial year, the Group received £2 million in respect of a
working capital settlement from its disposal of the EU Sugars business to
American Sugar Refining in the year ended 31 March 2011.

Other

During the financial year, the Group disposed of the remaining assets in the
Israeli Sugar business, resulting in a profit of £2 million. This has been
offset by losses from the disposal of other assets within the Group relating
to Sugar operations which are discontinued (note 9).

2012

Continuing operations

G.C. Hahn & Company

During the prior year, following the exercise of a put option by Georg Hahn
Familien GmbH, the Group acquired the final 5% of the issued share capital of
G.C. Hahn & Co. for a total consideration of £7 million. The Group has now
acquired 100% of the issued share capital.

Discontinued operations

International Sugar Trading

During the prior year, the Group completed the sale of its minority holdings
in Egypt and Saudi Arabia relating to the former International Sugar Trading
business and received £18 million in cash consideration. After recycling
revaluation gains previously held in reserves to the income statement, the
Group recorded an exceptional gain of £11 million (note 4).

The calculations of the results on disposal in the financial year, split
between continuing and discontinued operations, are shown below:

                                                                    
                                             Continuing  Discontinued 
                                             operations   operations     Total
                                           £m          £m            £m
Intangible assets                            −            2              2
Property, plant and equipment                3            20             23
Derivative financial instruments – assets    −            4              4
Inventories                                  9            10             19
Trade and other receivables                  9            13             22
Trade and other payables                     (6    )      (3      )      (9  )
Derivative financial instruments –           −            (4      )      (4  )
liabilities
Cash and cash equivalents                    5            22             27
Taxation                                     −          (1      )     (1  )
Total assets disposed                        20           63             83
Non-controlling interests disposed           −          (25     )     (25 )
Net assets disposed                          20         38           58  
                                                                         
Total consideration                          20           61             81
                                                                         
Other items:
Disposal costs                               −            (3      )      (3  )
Exchange differences reclassified from       8          6            14  
equity
Gain on disposal                             8          26           34  
                                                                         
Reported as:
Exceptional gain within continuing           8            −              8
operations (Note 4)
Operating loss within discontinued           −            (2      )      (2  )
operations
Exceptional gain within discontinued         −            26             26
operations (Note 4)
Operating gain within discontinued           −          2            2   
operations
                                             8          26           34  
                                                                         
Cash flows:
Cash consideration                           20           58             78
Cash disposed                                (5    )     (22     )     (27 )
Cash inflow in the period                    15         36           51  
                                                                             

12. Net debt

The components of the Group’s net debt are as follows:

                                                  31 March  31 March
                                                   2013       2012
                                                 £m        £m
Non-current borrowings                             (821  )    (805  )
Current borrowings and bank overdrafts             (75   )    (141  )
Debt-related derivative instruments (note a)       38         24
Cash and cash equivalents                          379        424
Assets held for sale – cash and cash equivalents   –         22    
Net debt                                           (479  )    (476  )
                                                                    

      Derivative financial instruments presented within assets and liabilities
      in the statement of financial position of £59 million (2012 - £24
      million) net asset comprise net debt-related instruments of £38 million
(a)  (2012 - £24 million) asset and net non-debt-related instruments of £21
      million (2012 - £nil). In the prior year, additional net non–debt
      related instruments of £8 million assets were included in assets and
      liabilities held for sale (Note 10).
      

Movements in the Group’s net debt are as follows:

                                                   Year to   Year to
                                                    31 March   31 March
                                                    2013       2012
                                                  £m        £m
At 1 April                                          (476   )   (464   )
Decrease in cash and cash equivalents in the year   (68    )   (201   )
Cash outflow from net decrease in borrowings        95         185
Inception of finance leases                         –          (7     )
Fair value and other movements                      13         7
Exchange                                            (43    )   4      
Increase in net debt in the year                    (3     )   (12    )
At 31 March                                         (479   )   (476   )
                                                                      

13. Capital commitments

                                                          31 March  31 March
                                                           2013       2012
                                                         £m        £m
Commitments for the acquisition of intangible assets       6          10
Commitments for the acquisition of property, plant and     21         21
equipment
Total commitments                                          27         31
                                                                      

14. Contingent liabilities

Sale of EU Sugars

As previously announced, American Sugar Holdings (ASR) has raised a number of
claims totalling in the region of £40 million that it believes it has under
the Share and Business Sale Agreement relating to its acquisition of the
Group’s EU Sugars business. These claims in large part relate to the
turbulence in the supply of raw sugar to the EU during the period prior to
closing and the increase in certain rolling re-export commitments of the
business. Some, but not all, of these issues were considered in the expert
adjudication on the closing accounts in which, as noted in the 2012 Annual
Report, the expert strongly supported Tate & Lyle’s position. ASR (through its
subsidiary T&L Sugars Limited) has now commenced formal proceedings in respect
of these claims which the Group intend to vigorously defend.

Whitefox Technologies

The commercial dispute with Whitefox Technologies which was the subject of
proceedings in the Supreme Court of the State of New York in June 2012 has
been settled, bringing this matter to a conclusion.

Other claims

The Group is subject to claims and litigation generally arising in the
ordinary course of its business, some of which are for substantial amounts.
All such actions are strenuously defended but provision is made for
liabilities that are considered likely to arise on the basis of current
information and legal advice and after taking into account the Group’s
insurance arrangements.

While there is always uncertainty as to the outcome of any claim or
litigation, it is not expected that claims and litigation existing at the
statement of financial position date will have a material adverse effect on
the Group’s financial position.

15. Post balance sheet events

On 17 May 2013, the Group acquired Biovelop, an early-stage Swedish
manufacturer of oat beta glucan.

16. Foreign exchange rates

The following exchange rates have been applied in the translation of the
financial statements of foreign subsidiaries, joint ventures and associates:

                                 Year to   Year to
                                  31 March   31 March
Average foreign exchange rates   2013      2012
US Dollar – £1 = US$              1.57       1.60
Euro – £1 = €                     1.24       1.15
                                             
                                  31 March   31 March
Year end foreign exchange rates  2013      2012
US Dollar – £1 = US$              1.52       1.60
Euro – £1 = €                     1.18       1.20
                                             

17. Reconciliation to adjusted information

Adjusted information is presented as it provides both management and investors
with valuable additional information on the performance of the business. The
following items are excluded from adjusted information:

  *discontinued operations;
  *exceptional items including losses on disposal of businesses, and closure
    and restructuring provisions;
  *post-retirement benefit interest; and
  *amortisation of intangible assets acquired through business combinations.

The following table shows the reconciliation of the statutory information
presented in the income statement to the adjusted information:

                 Year to 31 March 2013                Year to 31 March 2012
                            Exceptional/                       Exceptional/ 
                             adjusting                              adjusting
                  Reported   items          Adjusted     Reported   items          Adjusted
                £m        £m            £m           £m        £m            £m
Continuing
operations
Sales            3 256    –            3 256       3 088    –            3 088  
Operating         336        22             358          404        (56      )     348
profit
Net finance      (27    )  (2      )     (29    )     (25    )  (5       )    (30    )
expense
Profit before     309        20             329          379        (61      )     318
tax
Income tax       (49    )  (10     )     (59    )     (72    )  14           (58    )
expense
Profit
attributable to
                 260      10           270         307      (47      )    260    
owners of the
Company
                                                                                   
Basic earnings    56.0       2.2            58.2         65.9       (10.1    )     55.8
per share (p)
Diluted
earnings per      54.9       2.1            57.0         64.6       (9.9     )     54.7
share (p)
Tax rate          15.8   %                  17.9   %     19.0   %                  18.2   %
                                                                                   
Discontinued
operations
Sales            10       –            10          72       –            72     
Operating         18         (26     )      (8     )     16         (11      )     5
profit/(loss)
Net finance      –        –            –           1        –            1      
income
Profit/(loss)     18         (26     )      (8     )     17         (11      )     6
before tax
Income tax       –        –            –           (15    )  15           –      
expense
Profit/(loss)     18         (26     )      (8     )     2          4              6
after tax
Non-controlling  (1     )  –            (1     )     (4     )  –            (4     )
interests
Profit/(loss)
attributable to
                 17       (26     )     (9     )     (2     )  4            2      
owners of the
Company
                                                                                   
Basic
earnings/(loss)   3.7        (5.6    )      (1.9   )     (0.4   )   0.9            0.5
per share (p)
Diluted
earnings/(loss)   3.6        (5.5    )      (1.9   )     (0.3   )   0.8            0.5
per share (p)
                                                                                   
Total
operations
Sales            3 266    –            3 266       3 160    –            3 160  
Operating         354        (4      )      350          420        (67      )     353
profit
Net finance      (27    )  (2      )     (29    )     (24    )  (5       )    (29    )
expense
Profit before     327        (6      )      321          396        (72      )     324
tax
Income tax       (49    )  (10     )     (59    )     (87    )  29           (58    )
expense
Profit after      278        (16     )      262          309        (43      )     266
tax
Non-controlling  (1     )  –            (1     )     (4     )  –            (4     )
interests
Profit
attributable to  277      (16     )     261         305      (43      )    262    
owners
of the Company
                                                                                   
Basic earnings    59.7       (3.4    )      56.3         65.5       (9.2     )     56.3
per share (p)
Diluted
earnings per      58.5       (3.4    )      55.1         64.3       (9.1     )     55.2
share (p)
Tax rate          14.9   %                  18.3   %     21.9   %                  17.8   %
                                                                                   

                            ADDITIONAL INFORMATION
                        For the Year to 31 March 2013

1. Ratio analysis

                                                  Year to        Year to
                                                   31 March        31 March
                                                 2013           2012
                                                                   
                                                                   
Net debt to EBITDA ^(a)
= Net debt                                         461             481
Pre-exceptional EBITDA                             469             450
                                                   = 1.0 times     = 1.1 times
                                                                   
Interest cover ^(a)

= Operating profit before amortisation of acquired intangibles and exceptional
items
Net interest and finance expense
                                                   364           364
                                                   33             33
                                                   = 11.1 times   = 11.1 times
                                                                  
Earnings dividend cover
                                                                  
= Adjusted basic earnings per share from           58.2           55.8
continuing operations
Dividend per share                                 26.2           24.9
                                                   = 2.2 times    = 2.2 times
                                                                  
Cash dividend cover ^(b)
                                                                  
= Free cash flow from continuing operations        110            79
Cash dividends                                     121            116
                                                   = 0.9 times    = 0.7 times
                                                                  
Gearing
                                                                  
= Net debt                                         479            476
Total shareholders’ equity                         1 036          1 058
                                                   = 46%          = 45%
                                                                  
Return on capital employed
                                                                  
= Profit before interest, tax and exceptional      348            335
items
Average invested operating capital ^(c)            1 751          1 554
                                                   = 19.8%        = 21.6%
                                                                  
Average quarterly cash conversion cycle ^(d)       42 days        36 days
                                                                  

      These ratios have been calculated under the Group’s bank covenant
(a)  definitions and are based on unrounded figures. Net debt is calculated
      using average rates of exchange.
      Free cash flow is defined as cash generated from continuing operating
      activities, less interest paid, less income tax paid, less the purchase
(b)   of property, plant and equipment, less the purchase of intangible and
      other non-current assets. Cash dividends refer to dividends paid or
      proposed in respect of the reporting period, excluding the impact of any
      scrip dividend option where available.
      Defined as shareholders equity excluding net debt, net tax
(c)   assets/liabilities, net retirement benefit obligations and net operating
      assets of discontinued operations.
(d)   Defined as controllable working capital divided by quarterly sales,
      multiplied by number of days in quarter.
      

2. Proforma income statement impact of adopting IAS19 (revised)

As required from the year ending 31 March 2014, the Group will apply
Amendments to IAS 19 Employee benefits when presenting its financial results.
The change to IAS 19 modifies the basis on which the retirement benefits
financing charge is calculated by applying a discount rate to the net defined
benefit obligation and requires the recognition of scheme administration costs
within operating profit. Under its current accounting policies the Group
recognises actuarial gains and losses directly in other comprehensive income.

As a result of adopting the amendment, net finance expense will increase by £8
million as a result of the change in calculation methodology. In addition, £2
million of administration costs previously recognised within net finance
expense will be recognised within operating profit, with a net increase in
finance expense of £6 million. The below table shows impact of applying the
new standard on the Group’s statutory and adjusted income statement for the
year to 31 March 2013.

*Story too large*
                                     
                              Impact of              Exceptional/ 
                              IAS19       Reported    adjusting      Adjusted
                                                      items
                   Reported   (revised)   (revised)   (revised)      (revised)
                 £m         £m          £m         £m            £m
Continuing
operations
Sales             3 256     –          3 256     –            3 256   
Operating profit   336        (2     )    334         22             356
Net finance       (27    )   (6     )    (33     )  4            (29     )
expense
Profit before      309        (8     )    301         26             327
tax
Income tax        (49    )   3          (46     )  (13     )     (59     )
(expense)/credit
Profit
attributable to
                  260       (5     )    255       13           268     
owners of the
Company
                                                                     
Basic earnings     56.0       (1.1   )    54.9        2.8            57.7
per share (p)
Diluted earnings   54.9
per share (p)

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