REG-Tate & Lyle PLC Half-year Report <Origin Href="QuoteRef">TATE.L</Origin> - Part 3
03/11/2016 07:05
- Part 3: For the preceding part double click ID:nBw1k1ryKb
Exceptional tax credit/(charge) – total operations 26 – (5)
Continuing operations – within operating profit
(a) In the six months to 30 September 2016, the Group recognised a further net
£3 million charge (£4 million of additional cash costs offset by a £1
million non-cash credit) in respect of the re-alignment of SPLENDA(®)
Sucralose and its European operations. The net £3 million of costs were
recognised within the Speciality Food Ingredients segment.
Cumulative business re-alignment costs relating to the Group’s restructuring
programme announced in April 2015 now total £169 million, with £59 million
being cash costs and £110 million being non-cash costs. Further details of
amounts previously recognised in the 2015 and 2016 financial years can be
found in the Group’s 2016 Annual Report.
(b) In the six months to 30 September 2016, the Group recognised a £6 million
non-cash charge in respect of the impairment of certain redundant assets at
our Decatur facility in the US, that are no longer in use in the business. The
charge was recognised within the Bulk Ingredients segment.
In the year to 31 March 2016, the Group recognised a non-cash exceptional
credit of £3 million in respect of the recognition of a partial reversal of
an impairment of plant and equipment assets which were previously impaired
through an exceptional charge.
(c) In the six months to 30 September 2016, the Group recognised a £5 million
charge in respect of its equity interest in Jiangsu Tate & Lyle Howbetter Food
Co., Ltd, its Food Systems subsidiary in China, for which it reached agreement
to sell after 30 September 2016. The charge comprised a £3 million cost
reflecting the impact of impairing and deconsolidating the Group’s
investment (itself a cash generating unit), together with a £2 million charge
for associated costs. Accordingly, the Group has derecognised the £3 million
financial liability previously recorded in equity for the written put option
over the minority shareholder’s equity interest. This charge was recognised
within the Speciality Food Ingredients segment.
(d) During the six months to 30 September 2016, the Group recognised a £9
million non-cash gain in respect of the settlement of certain elements of its
US retirement benefit plan obligations. Under the settlement, some deferred
members of the plans elected to receive a lump sum during the six months to 30
September 2016, in exchange for surrendering their rights to future payments
under the scheme. The exceptional gain was recognised within the Bulk
Ingredients segment (£6 million) and Speciality Food Ingredients segment (£3
million).
(e) In the six months to 30 September 2016, the Group recognised a £2 million
gain, primarily in respect of deferred consideration received following
disposal of part of its venture fund portfolio which was previously classified
as an available-for-sale financial asset. This profit was classified within
central costs. In the year to 31 March 2016, the Group recognised a net £7
million gain (£9 million profit on the disposal in the first half and a £2
million impairment in the second half) from its ventures portfolio. Further
details can be found in the Group’s 2016 Annual Report.
(f) In the first half of the year to 31 March 2016, the Group recognised a net
£2 million charge in respect of the revision of its SPLENDA(® )brand table
top commercial agreement. Further details can be found in the Group’s 2016
Annual Report.
(g) In the year to 31 March 2016, the Group recognised a £15 million
exceptional charge in respect of two US litigation cases: one brought by the
American Sugar Association; and another in respect of the Passaic River
litigation. Further details can be found in the Group’s 2016 Annual Report.
(h) In the year to 31 March 2016, as part of the re-alignment of the
Eaststarch joint venture, the Group recognised an exceptional gain of £5
million within continuing operations reflecting the re-measurement to fair
value of its existing investment in Slovakia. Further details can be found in
the Group’s 2016 Annual Report.
The tax on exceptional items within continuing operations was a £3 million
charge (six months to 30 September 2015 – £13 million credit; year to 31
March 2016 – £21 million credit). Tax credits on exceptional costs are only
recognised to the extent that losses incurred are expected to result in tax
recoverable in the future.
Discontinued operations within operating profit
(i) On 1 June 2016, the Group completed the sale of its corn wet mill in
Casablanca, Morocco to ADM, receiving gross cash proceeds of £4 million. The
Group had previously recognised an impairment charge of £4 million in the
year to 31 March 2016, aligning book value with expected proceeds after
allowing for working capital and cash extracted from the business before
completion. In the six months to 30 September 2016, the Group recognised a £1
million exceptional gain resulting from the recycling of cumulative foreign
exchange translation gains from reserves to the income statement upon
completion of the disposal. This non-cash gain was recognised within the Bulk
Ingredients segment.
(j) In the year to 31 March 2016, the Group recognised an £18 million
exceptional charge within discontinued operations for settlement made with
American Sugar Refining, Inc. (“ASR”) in respect of claims made in
relation to its acquisition of the Group’s EU Sugars business in September
2010. Further details can be found in the Group’s 2016 Annual Report.
There was no tax impact on discontinued exceptional items in either the
current or comparative periods.
Continuing operations – exceptional taxation items
(k) During the six months to 30 September 2016, the Group recognised an
exceptional tax credit of £26 million arising from the recognition of
deferred tax assets following changes to UK tax legislation.
Discontinued operations – exceptional taxation items
(l) During the year to 31 March 2016, the Group recognised an exceptional tax
charge of £5 million in discontinued operations in respect of historical tax
matters relating to the Moroccan facility which the Group has now sold to ADM.
Exceptional cash flows
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
Net cash (outflow)/inflow on exceptional items: Footnote £m £m £m
Continuing operations
Business re-alignment – impairment, restructuring and other net (a) (13) (3) (29)
costs
SPLENDA (®)Sucralose – revised table top commercial agreement (f) – 5 5
US litigation (g) – – (9)
Net cash (outflow)/inflow – exceptional items (13) 2 (33)
Income statement charge – included in profit before tax 3 25 50
Exceptional items – per cash flow statement (10) 27 17
5. Income tax expense
Continuing operations Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
£m £m £m
Current tax:
In respect of the current year
– UK – – –
– Overseas (13) (7) (32)
Adjustments in respect of previous years – – 2
(13) (7) (30)
Deferred tax credit 14 4 24
Adjustments in respect of previous years – – 1
Income tax credit/(expense) 1 (3) (5)
Reconciliation to adjusted income tax expense Note £m £m £m
Income tax credit/(expense) 1 (3) (5)
Adjusted for:
Taxation on exceptional items, amortisation of acquired (1) (15) (27)
intangibles and net retirement benefit interest
Exceptional deferred tax credit (26) – –
Adjusted income tax expense – continuing operations 2 (26) (18) (32)
The Group recorded an income tax credit of £1 million in continuing
operations for six months to 30 September 2016 (six months to 30 September
2015 – expense of £3 million; year to 31 March 2016 – expense of £5
million). This included an income tax credit of £1 million (six months to 30
September 2015 – credit of £15 million; year to 31 March 2016 – credit of
£27 million) in respect of exceptional items, amortisation of acquired
intangibles and net retirement benefit interest (see Note 2) together with an
exceptional tax credit of £26 million (see Note 4) in relation to deferred
tax assets arising from UK losses recognised following changes to UK tax
legislation (six months to 30 September 2015 – £nil; year to 31 March 2016
– £nil). In March 2016, the UK government announced further draft changes
to UK loss utilisation rules which if or when carried into legislation, may
impact our ability to utilise brought forward losses in the future.
The Group’s adjusted effective tax rate on continuing operations, calculated
on the basis of the adjusted income tax expense of £26 million (six months to
30 September 2015 – £18 million; year to 31 March 2016 – £32 million) as
a proportion of adjusted profit before tax of £140 million (six months to 30
September 2015 – £103 million; year to 31 March 2016 – £193 million) was
18.3% (six months to 30 September 2015 – 17.9%; year to 31 March 2016 –
16.5%).
The Group’s reported tax rate on continuing operations, calculated on the
basis of the reported income tax credit of £1million (six months to 30
September 2015 – charge of £3 million; year to 31 March 2016 – charge of
£5 million) as a proportion of profit before tax of £128 million (six months
to 30 September 2015 – £70 million; year to 31 March 2016 – £126
million) was a credit of 0.9% (six months to 30 September 2015 – charge of
4.5%; year to 31 March 2016 – charge of 4.0%).
The standard rate of corporation tax in the United Kingdom will reduce from
20% to 19% with effect from 1 April 2017 and from 19% to 17% with effect from
1 April 2020.
6. Discontinued operations
The discontinued operations of the Group are disclosed in Note 1.
The results of the discontinued operations which have been included in the
consolidated income statement in the six months to 30 September 2016 and the
comparative periods were as follows:
Six months to 30 September 2016
Discontinued operations Notes Eaststarch / Total
Morocco Discontinued
£m £m
Sales 3 3 3
Operating profit including exceptional items 1 1
Profit for the period - discontinued operations 1 1
Basic and diluted earnings per share - discontinued operations 7 0.3p
On 1 June 2016, the Group completed the sale of its corn wet mill in
Casablanca, Morocco to ADM, receiving gross cash proceeds of £4 million. The
Group recognised a £1 million exceptional gain in the six months to 30
September 2016 resulting from the transaction (see Note 4).
Restated (* )
Six months to 30 September 2015
Discontinued operations Notes Eaststarch / Sugars / Total
Morocco EU Starch Discontinued
£m £m £m
Sales 3 6 – 6
Operating loss (2) (18) (20)
Share of profit after tax of joint ventures and associates 2 – 2
Loss for the period - discontinued operations – (18) (18)
Basic and diluted loss per share - discontinued operations 7 (3.9p)
* Restated (see Note 1 and text below)
In the year to 31 March 2016, the Group realised an exceptional profit on
disposal of £68 million in respect of the disposal of the Hungarian,
Bulgarian and Turkish Eaststarch plants. The profit on disposal included an
amount of £17 million representing the share of profit after tax attributable
to the Group whilst the investments were classified as held for sale, £15
million of which was incorrectly recognised in the Statement of Half Year
Results for the six months to 30 September 2015. Under IAS 28 guidance, the
profit attributable to a joint venture business whilst held for sale should
have been deferred and recognised as part of the profit on disposal. Whilst
this has no impact on the Group’s full year results, restatement has been
made in the comparative amounts reported above.
Year to 31 March 2016
Discontinued operations Notes Eaststarch / Sugars / Total
Morocco EU Starch Discontinued
£m £m £m
Sales 3 13 – 13
Operating profit/(loss) including exceptional items 65 (20) 45
Share of profit after tax of joint ventures and associates 2 – 2
Profit/(loss) before tax 67 (20) 47
Income tax charge (exceptional item) (5) – (5)
Profit/(loss) for the year - discontinued operations 62 (20) 42
Basic earnings per share - discontinued operations 7 9.0p
Diluted earnings per share - discontinued operations 7 8.9p
The results of the discontinued operations which have been included in the
consolidated cash flow statement were as follows:
Six months to 30 September 2016
Discontinued operations Eaststarch / Total
Morocco Discontinued
£m £m
Profit before tax from discontinued operations 1 1
Adjustment for: Exceptional items and changes in working capital (3) (3)
Cash used in discontinued operations (2) (2)
Restated*
Six months to 30 September 2015
Eaststarch / Sugars / Total
Morocco EU starch Discontinued
Discontinued operations £m £m £m
Loss before tax from discontinued operations – (18) (18)
Adjustment for: Exceptional items and changes in working capital – 18 18
Share of profit after tax of joint ventures and associates (2) – (2)
Cash used in discontinued operations (2) – (2)
* Restated (see Notes 1 and text on the previous page)
Year to 31 March 2016
Discontinued operations Eaststarch / Sugars / Total
Morocco EU starch Discontinued
£m £m £m
Profit/(loss) before tax from discontinued operations 67 (20) 47
Adjustment for: Exceptional items and changes in working capital (69) (5) (74)
Share of profit after tax of joint ventures and associates (2) – (2)
Cash used in discontinued operations (4) (25) (29)
7. Earnings per share
Basic earnings per share is calculated using a consistent methodology with
that used as at 31 March 2016 (see the Group’s 2016 Annual Report for
further details). The average market price of the Company’s ordinary shares
during the six months to 30 September 2016 was 666p (six months to 30
September 2015 – 562p; year to 31 March 2016 – 574p). The dilutive effect
of share-based incentives was 5.1 million shares (30 September 2015 – 2.3
million shares; 31 March 2016 – 3.4 million shares).
Restated*
Six months to 30 September 2016 Six months to 30 September 2015
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
Profit/(loss) attributable to 129 1 130 67 (18) 49
owners of the Company
(£million)
Weighted average number of 464.4 464.4 464.4 464.2 464.2 464.2
ordinary shares (millions) –
basic
Basic earnings/(loss) per share 27.7p 0.3p 28.0p 14.4p (3.9p) 10.5p
Weighted average number of 469.5 469.5 469.5 466.5 466.5 466.5
ordinary shares (millions) –
diluted
Diluted earnings/(loss) per 27.4p 0.3p 27.7p 14.3p (3.9p) 10.4p
share
* Restated (see Notes 1 and 6)
Year to 31 March 2016
Continuing Discontinued Total
operations operations
Profit attributable to owners of 121 42 163
the Company (£million)
Weighted average number of 464.3 464.3 464.3
ordinary shares (millions) –
basic
Basic earnings per share 26.1p 9.0p 35.1p
Weighted average number of 467.7 467.7 467.7
ordinary shares (millions) –
diluted
Diluted earnings per share 25.9p 8.9p 34.8p
Adjusted earnings per share
A reconciliation between profit attributable to owners of the Company from
continuing operations and the equivalent adjusted metric, together with the
resulting adjusted earnings per share metrics can be found below:
Continuing operations Notes Six months to 30 September 2016 £m Six months to 30 September 2015 £m Year to 31 March 2016 £m
Profit attributable to owners of the Company 129 67 121
Adjusting items:
– Net charge for exceptional items 4 3 25 50
– Amortisation of acquired intangible assets 6 4 11
– Net retirement benefit interest 13 3 4 6
– Tax effect of the above adjustments 5 (1) (15) (27)
– Exceptional deferred tax credit 5 (26) – –
Adjusted profit attributable to owners of the Company 2 114 85 161
Adjusted basic earnings per share (pence) - continuing operations 24.6p 18.2p 34.7p
Adjusted diluted earnings per share (pence) - continuing operations 24.3p 18.1p 34.5p
8. Dividends on ordinary shares
The Directors have declared an interim dividend of 8.2p per share for the six
months to 30 September 2016 (six months to 30 September 2015 – 8.2p per
share), payable on 3 January 2017.
The final dividend for the year to 31 March 2016 of £92 million, representing
19.8p per share, was paid during the six months to 30 September 2016.
9. Net debt
The components of the Group’s net debt are as follows:
At At At
30 September 30 September 31 March
2016 2015 2016
£m £m £m
Non-current borrowings (594) (285) (556)
Current borrowings and bank overdrafts (105) (494) (200)
Debt-related derivative financial instruments (8) 24 5
Cash and cash equivalents 289 234 317
Net debt (418) (521) (434)
Debt-related derivative financial instruments represents the net fair value of
currency and interest rate swaps that are used to manage the currency and
interest rate profile of the Group’s net debt. At 30 September 2016, the net
fair value of these derivatives comprised assets of £25 million (30 September
2015 – £37 million; 31 March 2016 – £24 million) and liabilities of £33
million (30 September 2015 – £13 million; 31 March 2016 – £19 million).
Movements in the Group’s net debt were as follows:
Six months to Six months to Year to
30 September 30 September 31 March
2016 2015 2016
£m £m £m
Net debt at beginning of the period (434) (555) (555)
Net (decrease)/increase in cash and cash equivalents in the period (50) 41 108
Net decrease/(increase) in borrowings (#) 109 (15) 29
Fair value and other movements 1 2 (1)
Currency translation differences (44) 6 (15)
Decrease in net debt in the period 16 34 121
Net debt at end of the period (418) (521) (434)
(#) Where relevant, net change in borrowings includes repayments of capital
elements of finance leases (six months to 30 September 2016 – £nil, six
months to 30 September 2015 – £1 million; year to 31 March 2016 – £4
million).
During the six months to 30 September 2016, the Group repaid a maturing US$250
million bond.
Gearing and banking covenants metrics((a)):
30 September 2016 30 September 2015 31 March 2016
Gearing
= Net debt 418 521 434
Total equity 1 119 888* 1 029
= 37% = 59% = 42%
Net debt to EBITDA – on banking covenant basis ((b))
= Net debt 385 428 423
Pre-exceptional EBITDA 404 384 345
= 1.0 times = 1.1 times = 1.2 times
Interest cover – on banking covenant basis ((b))
= Operating profit before exceptional items and amortisation of intangible assets
Net finance expense
281 269 235
23 21 22
= 12.2 times = 12.8 times = 10.7 times
* Gearing restated (see Notes 1 and 6)
Notes:
(a) All ratios are calculated based on unrounded figures in £ million.
(b) Net debt to EBITDA and interest cover are defined under the Group’s
banking covenants and reported on a proportionate consolidation basis. For
banking covenant purposes these ratios are calculated based on the accounting
standards that applied in the annual accounts immediately preceding the period
in which the financing was agreed, with no adjustment for subsequent changes
in accounting standards adopted by the Group. Net debt is calculated using
average currency exchange rates.
10. Contingent liabilities
Passaic River
As noted in the Statement of Full Year Results released on 26 May 2016, the
Group is subject to a legal case arising from the notification in 2007 by the
U.S. Environmental Protection Agency (“USEPA”) that Tate & Lyle, along
with approximately 70+ others, is a potentially responsible party ("PRP") for
a 17 mile section of the northern New Jersey Passaic River, a major
“Superfund” Site. In March 2016, the USEPA issued its Record of Decision
(“ROD”) on the likely cost for the remediation of the lower 8 miles
section of the river (the most contaminated). Whilst Tate & Lyle will continue
to vigorously defend itself in this matter, in light of the publication of the
ROD, the Group took an exceptional charge of £6 million in the year to 31
March 2016 in respect of this matter. The Group continues to be unable to
estimate a reasonably possible range of loss in respect of the remaining 9
mile section of the river and therefore has not recognised a provision in this
regard. See the Group’s 2016 Annual Report for further details.
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. While there is always uncertainty as to the
outcome of any claim or litigation, it is not expected that claims and
litigation existing at 30 September 2016 will have a material adverse effect
on the Group’s financial position.
11. Capital expenditure and commitments
In the six months to 30 September 2016, there were additions to intangible
assets (excluding goodwill and acquired intangibles) of £10 million (30
September 2015 – £6 million; 31 March 2016 – £19 million) and additions
to property, plant and equipment of £70 million (30 September 2015 – £69
million; 31 March 2016 – £175 million).
Commitments at the balance sheet date were as follows:
At At At
30 September 30 September 31 March
2016 2015 2016
£m £m £m
Commitments for the purchase of intangible assets – 1 1
Commitments for the purchase of property, plant and equipment 36 62 47
Total commitments 36 63 48
12. Financial Instruments
The table below shows the Group’s financial assets and liabilities measured
at fair value at 30 September 2016. The fair value hierarchy categorisation,
valuation techniques and inputs are consistent with those used in the year to
31 March 2016 (see Notes 2 and 29 of our 2016 Annual Report):
* Level 1: Inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the Group can assess at the measurement
date;
* Level 2: Inputs are inputs, other than quoted prices included in Level 1,
that are observable either directly or indirectly; and
* Level 3: Inputs are unobservable inputs. The Group generally classifies
assets or liabilities as Level 3 when the fair value is determined using
unobservable inputs that individually, or when aggregated with other
unobservable inputs, represent more than 10% of the fair value of observable
inputs of the assets or liabilities.
At 30 September 2016 At 31 March 2016
Level 1 £m Level 2 £m Level 3 £m Total £m Level 1 £m Level 2 £m Level 3 £m Total £m
Assets at fair value
Available-for-sale financial assets – – 28 28 – – 23 23
Derivative financial instruments:
– Currency swaps – 1 – 1 – 5 – 5
– Interest rate swaps – 24 – 24 – 19 – 19
– Commodity pricing contracts 5 26 20 51 1 13 26 40
Assets at fair value 5 51 48 104 1 37 49 87
Liabilities at fair value
Other financial liability (within other payables) - - (2) (2) - - (2) (2)
Derivative financial instruments:
– Currency swaps - (33) - (33) - (19) - (19)
– Forward foreign exchange contracts - (1) - (1) - (1) - (1)
– Commodity pricing contracts (9) (14) (5) (28) (13) (5) (3) (21)
Liabilities at fair value (9) (48) (7) (64) (13) (25) (5) (43)
The most significant element of the Group’s Level 3 financial instruments
are written commodity contracts, which are valued based on the Group’s own
assessment of the particular commodity, its supply and demand and expected
pricing. The most significant unobservable input for those written commodity
contracts remains the price of co-product positions. The methodology used to
value all level 3 financial instruments remains unchanged from that used as at
31 March 2016 and the sensitivity of the fair value of the level 3 financial
instruments to changes in the price of commodity contracts is not materially
different to that disclosed as at 31 March 2016. Further detail can be found
on page 130 of the Group’s 2016 Annual Report.
The fair value of borrowings is estimated to be £734 million (30 September
2015 – £798 million; 31 March 2016 – £775 million) and has been
determined using quoted market prices or discounted cash flow analysis. The
carrying value of other assets and liabilities held at amortised cost are not
materially different from their fair values. Further details of these
instruments and our associated accounting policies can be found in Note 2 on
page 94 of our 2016 Annual Report.
The following table reconciles the movement in the Group’s net financial
instruments classified in ‘Level 3’ of the fair value hierarchy:
Commodity Commodity Available- Other Total £m
pricing pricing for-sale financial
contract contract financial liabilities*
– assets – liabilities assets £m
£m £m £m
At 31 March 2016 26 (3) 23 (2) 44
Gains in operating profit – – 2 – 2
Purchases 14 (5) 3 – 12
Settlements (20) 3 – – (17)
At 30 September 2016 20 (5) 28 (2) 41
* Within other payables
13. Retirement benefit obligations
At 30 September 2016, the net liability in respect of retirement benefits was
£272 million (31 March 2016 - £208 million), which is analysed as follows:
At 30 September 2016 At 31 March 2016
Pensions Medical Total Pensions Medical Total
£m benefits £m £m benefits £m
£m £m
Present value of benefit obligations (1 857) (75) (1 932) (1 568) (66) (1 634)
Fair value of plan assets 1 660 – 1 660 1 426 – 1 426
Net liability (197) (75) (272) (142) (66) (208)
Presented as:
Deficits (205) (75) (280) (187) (66) (253)
Surpluses 8 – 8 45 – 45
Net liability (197) (75) (272) (142) (66) (208)
Changes in the net liability during the period are analysed as follows:
Six months to 30 September 2016
Pensions Medical Total
£m benefits £m
£m
Net liability at 1 April 2016 (142) (66) (208)
Income statement:
– Plan admin costs (2) – (2)
– Service cost (1) – (1)
– Net Interest expense (2) (1) (3)
– Settlement gain (exceptional item – see Note 4d) 9 – 9
Other comprehensive income:
– Actual return higher than interest on plan assets 219 – 219
– Actuarial loss (276) (3) (279)
Other movements:
– Employer’s contributions 21 2 23
– Currency translation differences (23) (7) (30)
Net liability at 30 September 2016 (197) (75) (272)
14. Acquisitions and disposals
Completion of Moroccan Disposal
On 1 June 2016, the Group completed the sale of its corn wet mill in
Casablanca, Morocco to ADM, receiving gross cash proceeds of £4 million. The
investment had previously been classified as held for sale as at 31 March
2016. The Group recognised an impairment charge of £4 million in the year to
31 March 2016, aligning book value with expected proceeds after allowing for
working capital and cash extracted from the business before completion. In the
six months to 30 September 2016, the Group recognised a £1 million
exceptional gain resulting from the recycling of cumulative foreign exchange
translation gains from reserves to the income statement upon disposal of the
investment.
During the year to 31 March 2016, the Group recognised an exceptional tax
charge of £5 million in discontinued operations in respect of historic tax
matters in Morocco. There have been no further material developments in
respect of these matters in the six months to 30 September 2016.
Eaststarch re-alignment update
In the six months to 30 September 2016 the Group recognised a £1 million
increase to the provisional goodwill in respect of the acquisition of the
remaining 50% of the plant in Slovakia, Amylum Slovakia s.r.o (subsequently
renamed Tate & Lyle Boleraz s.r.o.) following a remeasurement of net assets
acquired.
In the year to 31 March 2016, the Group completed the re-alignment of its
Eaststarch operations. The Group recognised an exceptional gain on disposal of
£68 million within discontinued operations from exiting the predominantly
bulk ingredient plants in Bulgaria, Turkey and Hungary. The Group also
recognised a £5 million gain reflecting the re-measurement to fair value of
its existing investment in the more speciality food ingredients-focused plant
in Slovakia.
15. Related party disclosures
The Group’s significant related parties are its associates and joint
ventures as disclosed in the 2016 Tate & Lyle Annual Report. In the period to
30 September 2016, the Group completed the disposal of its interest in its
corn wet mill in Casablanca, Morocco.
During the period, the Group deconsolidated its equity interest in Jiangsu
Tate & Lyle Howbetter Food Co, Ltd, its Food Systems business in China. An
agreement to sell this interest was reached after 30 September 2016.
There were no other material changes in related parties or in the nature of
related party transactions during the period. In the year to 31 March 2016,
the Group re-aligned its Eaststarch joint venture.
16. Events after the reporting period
There were no material post balance sheet events requiring disclosure in
respect of the six months to 30 September 2016.
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