GA20403 DATE OF SUBMISSION: 14 MARCH 2012FINANCIAL STATEMENT ANALYSISMISS SITI NUR AQILAH AB WAHAB

ContentsExecutive Summary22.0 Situation Analysis32.1 Company Analysis32.1.1 Tate & Lyle Company32.1.2 Tate & Lyle Markets and Structure32.1.3 Tate & Lyle Business Strategy32.1.4 Tate & Lyle Operations43.0 SWOT Analysis43.1 Strength53.1.1 The market for value added53.1.2 Research and Development (R&D)53.2 Weaknesses63.3 Opportunities63.4 Threat63.4.1 Top Competitors for Tate & Lyle:64.0 Strategy Analysis75.0 Strategies Capabilities of Tate & Lyle106.0 Industry Analysis (Porters Five Forces)116.1 Rivalry among existed firm116.2 Threat of new entrants126.3 Threats of substitute products136.4 Bargaining power of buyers136.5 Bargaining power of suppliers.147.0 Tate & Lyle Environmental (PEST) Factors147.1 Political Factors147.1.1 Business Code of Conduct147.2 Economy Factor167.2.1 Summary of Tate & Lyle Performance167.3 Social Factors207.3.1 Corporate Social Responsibilities207.4 Technology Factors227.4.1 How Tate & Lyle adding value227.4.2 How Tate & Lyle creating volume25

Executive Summary

Tate & Lyle is committed to conducting its business in a manner that issensitive to the environmental needs of the communities in which it operates. They comes with several approach in order to fulfil the requirements that include and can be achieved as a minimum, compliance with all applicable environmental laws and regulations and implementation of responsible standards where laws or regulations do not exist. Besides that, Tate & Lyle take seriously by making continuous efforts to prevent pollution and improve environmental performance throughout all its activities. In order to become a successful company, they able to seeking and to minimize the use of energy, materials and natural resources where possible, developing renewable sources for the energy and materials used by our processes.

In Tate & Lyle it is important to assessing the environmental risks associated with existing and new activities or when decommissioning facilities, and establishing controls to ensure that the risks remain at an acceptable level. The achievement that can be proud of Tate & Lyle Company is by developing renewable products for our customers for instance Bio-ethanol and Bio-PDO to help them reduce their impact on the natural environment. Tate & Lyle encouraging concern and respect for the environment, emphasizing every employee's responsibility for environmental performance through providing appropriate operating procedures and training.

2.0 Situation Analysis2.1 Company Analysis2.1.1 Tate & Lyle Company

Tate & Lyle was founded in the United Kingdom (UK) in 1921 but its roots can be traced back to a number of companies established in the middle of the 19th century focused on sugars in Europe, and corn milling in the USA and Europe. Tate & Lyle is headquartered in the UK and operates more than 45 production facilities around the world. Tate & Lyle PLC is a public limited company listed on the London Stock Exchange and registered in England. At March 2010, Tate & Lyle employed 5,666 people across the Group.

Tate & Lyle is a global provider of distinctive, high quality ingredients and solutions to the food, beverage and other industries. Through them large-scale of efficient manufacturing plants, they turn raw materials into distinctive and high quality ingredients for them customers. Tate & Lyle ingredients and solutions add taste, texture, nutrition and increased functionality to products that millions of people around the world use or consume every day.2.1.2 Tate & Lyle Markets and Structure

Tate & Lyle provide customers in four market which is food and beverage, industrial, animal feed and pharmaceutical and personal care with quality services and ingredients. Tate & Lyle operates through two global business units which are in Specialty Food Ingredients and Bulk Ingredients. These two business units are supported by globalised support services and Tate & Lyle Innovation and Commercial Development group.

2.1.3 Tate & Lyle Business StrategyTate & Lyle strategy is to deliver sustainable long-term growth and returns for them shareholders. This strategy will go through disciplined focus on growing them specialist food ingredients business like deeper customer understanding, continuous innovation and agility and stronger positions in high- growth markets. In addition, the strategy to fuel the growth also will do through driving bulk ingredients and sugars business for sustained cash generation.

2.1.4 Tate & Lyle Operations

Tate & Lyle operates a network of corn wet mills in both North America and Europe, processing two types of corn that called dent and waxy. Dent corn is the most common crop end is used to make high fructose corn syrup, basic food and industrial starches, alcohol and animal feed meanwhile waxy corn is contracted direct from the farmer and has special functionality that makes it ideal for creating stabilizers, thickeners and emulsifiers for the food industry. It is also used in adhesives and gums for the paper industry. Tate & Lyle sugars business processes and refines cane sugar, a tropical crop grown in areas of high sunshine and rainfall. The results, cane sugar accounts for around 80% of world sugar production.

Tate & Lyle have over 250 people in R&D team worldwide working to develop innovative ingredients from renewable resources. Tate & Lyle have R&D laboratories in Decatur, Illinois and Lille, France, but they also have application laboratories in countries such as France, China, Germany, Italy and Australia which are combined with them sales offices. Tate & Lyle also develop partnerships with the external research community in order to give the fresh ideas and insights into the markets.

3.0 SWOT Analysis

Tate & Lyle (T&L) is a leading manufacturer of renewable food and industrial ingredients. The Tate & Lyle annual report indicates that there has some real strength that can build on. The company has cost efficient, well invested manufacturing footprint, and deep technical process.

3.1 Strength3.1.1 The market for value added

Overall, value added food ingredients remained steady throughout 2010 financial year, although the focus of consumers on health and wellness trend and facilities continue to drive growth in these areas. Value added ingredients sales increased by 4% to 546 million. Operating profits increased by 22% to 101 million. There was continued to experiences good growth in sales volumes of wellness ingredients. Within primary food markets, they expect domestic demand for corn sweeteners to continue its long-term trend of gradual decline. Whilst we have seen a degree of improvement in demand for industrial starches from the levels experienced during the second half of the 2009 financial year. The level of net corn cost will be a key factor in determining performance in the coming financial year.

3.1.2 Research and Development (R&D)

The Tate & Lyle Company has a strong focus on research and development (R&D) for introducing innovative products and technologies in the market. Scientists have developed food ingredients and industrial from renewable resources. Marketing and regulatory teams work together to provide consumer research, support on labeling requirements, and assistance on meeting product claims. Tate & Lyle company use of market research to understand the consumer, the markets operate in and customers needs. . By continuing to invest in R&D, the group is able to come up with innovative a product which is add value and act as key differentiators. In additional, the specialist knowledge supplements existing in-house R&D capability. This business act as an R&D team for small- to medium-sized customers and build close working relationships is a reliable trusted partners in development.

3.2 Weaknesses

The Tate & Lyle company indicates that the primary sales decreased by 4% from 2,584 million to 2,476 million. This decline was due to lower co-product income, lower industrial sales volume in both American and Europe and reduced selling prices of sugar and isoglucose in Europe, reflecting the institutional price cuts implemented. The overall adjusted operating profit was in line with prior year was decreased by 7% in constant currency at 298 million. The food and industrial ingredients of American were decreased of 178 million, 2% below the prior year. Furthermore, low sales will be affected low return at the end. Weak return on resources will be reflecting the managements inability to deploy its asset in profitable avenues, and this could reduce investor confidence.

3.3 Opportunities A relatively small market for Tate & Lyle, pharmaceutical and personal care is now they expect will grow in the future although remaining relatively modest. At the moment, they sell two value added ingredients into this market which is ZemeaTM which is cosmetics and creams, through joint venture DuPont Tate & Lyle BioProducts; and SPLENDA Sucrlose that used in oral care products and to sweeten medicines without adding calories.

3.4 ThreatThe bulk starch market, where our food and industrial ingredients business to compete, is concentrated in a relatively small number of large players who operate in many different fields, including food, beverages, paper and pharmaceuticals. Tate & Lyle Company main competitors in the USA for corn wet milling and starch-based products are Archer Daniels Midland Company (ADM), Corn Products International and Cargill. National Starch is also a competitor, particularly in relation to some higher-value modified food and industrial starches.

3.4.1 Top Competitors for Tate & Lyle:

Archer Daniels Midland Company, Cargill Foods, Corn Products International, Danisco, Kerry Group plc, Penford Corporation, Sudzucker Group and Tereos S.A.

4.0 Strategy Analysis

Tate & Lyle delivered a solid performance in the face of challenging conditions in number of them markets. Adjusted operation profit from core value added food ingredients grew strongly increasing by 22% (14% in constant currency) to 131 million. Profit within primary ingredients in the Americas and Europe wore 22% below the prior year at 98 million (27% in constant currency), as lower co-product income and weaker industrial profits adversely impacted results.

With regard to Tate & Lyle plant in Fort Dodge, Lowa, in the last few months them have conducted detailed analysis of the end markets which the plant would supply under they new capital management process. The continuing depressed and volatile outlook for ethanol, and uncertain conditions in industrial starch and corn gluten feed markets, do not provide any basic to complete and commission the plant.

Changes in feed and energy markets together with the reconfiguration of technology required following Tate & Lyle experience of installing new equipment at them Loudon plant, along with remobilization costs, would mean that, if them were to complete Fort Dodge; total additional costs would now be in the region of 70 million.

At the beginning of the year, recognizing the need to act decisively and quickly in the face of the global economic downturn, them set out they three near- term financial priorities for the business: to optimist working capital; implement tight capital expenditure control; and reduce they cost base.

Working capital reductions generated 79 million represented 68% of depreciation, in line with the commitment stated at the beginning of the financial year to hold expenditure below the annual depreciation charge. Underlying costs reduced by 30 million in the year compared to the comparative period including the cost savings achieved from rationalizing the sucralose manufacturing footprint, with reductions achieved through our focus on all areas of the cost base.

In future, Tate & Lyle purpose will be to grow them specialty food ingredients business. They will do it through deeper customer understanding, continuous innovation and agility, and through building stronger positions in high-growth markets. They also will continue to drive sustained cash generation from the bulk ingredients and sugars businesses to fuel this growth.

From 1 June 2010 Tate & Lyle will reorganize and operate through three global business unit: Specialty food ingredients, bulk ingredients and sugars. Each business unit will have a distinct go-to-market organization to provide the necessary focus and bring the required expertise to the different markets them serve, and each will have a dedicated manufacturing asset base.

Ongoing reviews performed regularly by the Group Executive Committee, as well as peer reviews, have been added to sharpen the investment appraisal process. Tate & Lyle will also create a dedicated, internal resource, independent of the operations, with responsibility for oversight of all capital expenditure.

Tate & Lyle have already made huge strides in the way they control working capital in them business, evident from the improvement delivered in the 2010 financial year. There is a much clearer appreciation within the organization now of the need for working capital optimization and this is something that Tate & Lyle intend to build on. To this end, they have implemented standard measures of working capital efficiency. In the 2011 financial year, these targets will, for the first time, be linked to management incentive structures.

Tate & Lyle three business units will be supported by global support services, using shared service centres to eliminate duplication and rationalize resources required. This will also allow them to redeploy some needed resources to the front end of the business. Tate & Lyle have already started work to strengthen operation enablers, by establishing a common set of performance metrics across the business and they will move to a single global IS/IT platform to drive improved global decision making over the next two years. It will take time but the steps will lay the foundation to deliver significant improvements in operational execution over the coming months and years.

Exceptional costs of 8 million associated with the reorganization and restructuring of the group activities are expected to be recognized in the 2011 financial year, with further exceptional costs expected to be in the region of 13 million the following year. These cash costs are expected subsequently to pay back within two years. Additionally, they are developing a detailed implementation plan for a common, global IS/IT platform, which they anticipate will be implemented over the next 24 months.

Tate & Lyle investment focus will be realigned to them strategy: Tate & Lyle engine of growth and the focus of acquisitions will be specialty food ingredients, with greater emphasis on emerging markets. Tate & Lyle bulk ingredients and sugars businesses remain strong and valued business, and we will continue to invest appropriately in order to increase their efficiency and generate cash.

A new unit, the Innovation and Commercial Development Group, will be established, dedicated to driving sustained long-term growth, with a key focus on specialty food ingredients. This unit will integrate R&D, global marketing and global product management, and will enable a fully integrated approach to developing and commercializing innovation. Tate & Lyle expect to achieve growth both in the existing markets, through the benefits of the new operating modal and investment focus, and also in emerging markets and in the small-and medium-sized enterprise (SME) and private label customer segments, where they have limited presence today. Tate & Lyle new operating structure will provide a clean platform from which to grow the business, both organically and through acquisitions

5.0 Strategies Capabilities of Tate & Lyle

Strategies Capabilities of Tate & Lyle have been divided into cost leadership and differentiation. For cost leadership, company Tate & Lyle achieves economies of scale lowers the average cost per unit through increased production. It is a global provider of ingredients and solutions to the food, beverage and other industries, operating from over 30 production facilities around the world. For evidence, Tate & Lyle is a large-scale corn processor. It grinds over 750k bushels of corn per day, which is equivalent to 1.75 million acres annually. The plant size and overall scale provides this company with a low-cost platform from which to aggressively grow our value added portfolio.

For differentiation, company Tate & Lyle does investment in research and development (R&D) capabilities to develop innovative solution that meet customers product challenges. The company emphasizes their customers. It investigates and understands what are the customers need deeply and create the products that can satisfy their customers. It enables all the products from their company have high quality. Success in long term, company Tate & Lyle requires a mindset of constant enquiry and a relentless search for how to do things better. It knows that creating new, profitable products requires world-class ideas and innovation in ingredients, food applications and process technology.

Besides that, this company also focuses on attracting and developing talent, and on making sure their employees succeed. This company requires finding the right people who have enthusiasm, tenacity and confidence as well as being technically competent and help to develop their employees by providing training. Moreover, company Tate & Lyle create opportunities which develop new skills and increases levels of competences and sponsor educational and technical development through continuing education programs.

In addition, this company is not just concern about the quality of products and ingredients it is also about customer services. It establishes and enhances long term customer relationship. This company provides more flexible delivery to work out the most efficient way possible to get customers order to them in the form and at the time they want it.

6.0 Industry Analysis (Porters Five Forces)

6.1 Rivalry among existed firm

Refers to annual report on 2010, we will find out that Tate & Lyle has go through very fast in industry growth compare to other company and also their competitor. In 2010 report, Tate &Lyle has responded well to the near-term financial priorities set at the start of the years, resulting in a stronger balance sheet and solid overall performance in what have been challenging market conditions.

Tate & Lyle is a global provider of ingredients and solution to the food, beverage and other industries. Tata & Lyle is famous for their raw materials, corn and cane sugar. Since their raw material is very important in people life, this industry has growth very fast. Corn and cane sugar is daily use products and there is less substitution products to replace them. It is impossible for people to take sweet food without contain any sugar ingredients.

High in industry growth mean high in concentration. Industry growth will attract many competitors into the market. Although Tate & Lyle is one of the biggest corn and cane sugar suppliers in this world, their main competitors in Europe are Cargill, Syral (part of Tereos), Roquette Freres, Danisco, Kerry and National Starch. Besides that, competition for Tate & Lyle in European sugar businesses comes mainly from British Sugar which called a subsidiary of Associated British Food plc, Sudzucker, Nordzucker and Tereos. In this market, the concentration is still remaining high.

The differentiation in this market will be brand name, pricing, advertising strategy and packaging. Tate & Lyle and their competitor are producing same products, which is cane sugar and corn. So there will be no much big different in their producing product in customer mind. Only the differentiation that available for customers to choose would be like mentioned above. For instance, Tate & Lyle always choose the right pricing according to the product quality. Conclude that higher quality means higher in price.

Besides that, switching costs for customer is extremely low. This also mean buyer can easily switching to buy from Tate & Lyle competitor products. Low in switching cost cause lower loyalty for Tate & Lyle products. In corn and cane sugar products, price different is extremely low. Today, I want to buy Tate & Lyle sugar in hypermarket, but since no more in shelf, I will only simply choose companys sugar since the price different is only 20 or 30 cents. So low switching costs can cause customers easily switch to other product.

6.2 Threat of new entrants

First mover advantage is very important for a company get luxury profits. Even thought Tate & Lyle is not a first mover in this corn and cane sugar market, but still they are great company. In the sugar cane industry, Booker Brother, McConnell emerged as the largest sugar plantation owner in British Guinea. In British, sugar was owned by a complex mix of different types of firm, local and British owned, even before the large-scale investments of the British sugar refiner Tate & Lyle in the 1930s.

There are also some legal barriers that stop other competitor from entering the sugar industry. This is to prevent too much competitor in a single market. There are investment cost and laws and regulations. Investment cost mean cost that needed when entering in sugar industry. This investment is to get all the machinery and the resources that needed to operate in sugar market. According to one report, a company needs at least 160 billion as 80 billion for sugar farms, 50 million on mills and 30 billion on refineries.

Tate & Lyle has entered into five-year strategic partnership agreement with Biovittoria Ltd. for the exclusive global marketing and distribution right for BioVittorias monk fruit. Tate & Lyle will be marketing the products in the US under the PUREFRRUIT[TM] brand name. This can help Tate & Lyle to market the fruit. This distribution access is useful for Tate & Lyle to enter another market easily.

6.3 Threats of substitute products

Tate & Lyle Caster Sugar 500g sell about $2.87 and Tate & Lyle icing sugar will sell about $3.22. Caster sugar is for normal daily use and it can be use with any food that we like while icing sugar will be more used on making cake or biscuit. Tate & Lyle have market many type of sugar to suit the customer demand. The pricing are quite cheap compare to other competitor price and this has become one of the comparative advantages.

Some customer prefers Tate & Lyle sugar products because their products have quality assured. They use Tate & Lyle products from the very first day and they will not easily change to other products. Most customers showed unwillingness to switch to other product even though the price is lower. Tate & Lyle have built loyalty inside their customer mind. Tate & Lyle always come out with sugar products that meet with market demand. With this, customer can easily found sugar with different purpose with Tate & Lyle sugar product.

6.4 Bargaining power of buyers

Switching costs of customer from Tate & Lyle sugar product to other company product is extremely low. This is because the price of sugar product is not high and the different is low. This mean if customer do not like Tate & Lyle sugar product, he can easily switching to other company product.

Besides that, differentiation in customer perception also important for Tate & Lyle sugar product. Most of the customer will choose back Tate & Lyle sugar because they believe Tate & Lyle sugar are the best among other company sugar. This is because after they already use it and they felt the sugar is suitable for them. This will help them to differentiate Tate & Lyle sugar with other company sugar. After that, they will continue buy Tate & Lyle sugar in the future.

Sugar is one of the very important daily use products. And we can say that sugar is important product for cost and quality. Tate & Lyle sugar products are cheaper in price and better in quality compare to other competitor sugar products. This is because Tate & Lyle is large company which can operate efficiently and enjoy economy of scale. This will help to reduce the Tate & Lyle production cost and then later lower price can be enjoyed by customer. 6.5 Bargaining power of suppliers.

Since Tate & Lyle is a producer of its own sugar products, so there will no bargaining power of suppliers. Tate & Lyle are producer and also suppliers for its sugar products. Tate & Lyle will produce the cane sugar with their own technology and sugar cane field. Tate & Lyle will not depend on any suppliers. This gave Tate & Lyle a lot benefits from reaching its own customers. Tate & Lyle can use their best way to produce the product to maximum customers need. They can put their effort n understanding their customers and serve them better. 7.0 Tate & Lyle Environmental (PEST) Factors

7.1 Political Factors 7.1.1 Business Code of Conduct

The following Business Code of Conduct set out in abbreviated form the Tate & Lyle Ethical Commitment and Policy Guidelines. Tate&Lylesharesthewidely accepted view that a greater level of management control of a company thathas more than onesetof operations,greaterresponsibility for ensuringcompliancewith Group policies. Group Ethical commitment andpolicy guidancewithout conditionstoall operating unitsandsubsidiariesareownedbyTate&Lyleitself.

Health & Safety - Tate & Lyle believed that no business activity is of such urgency or importance that it may be carry out in an unsafe manner. The Group target of an accident is to reduce them into zero. Group committedtoprovidinga safe and healthy environmentfor theiremployeesand visitorsto their premises,andis committed tocontinue toincreaseHealthandSafety proceduresand performance. Safety committees comprise of employees work to ensure that safety remain paramount- safety is not someone else concern, it is everyone responsibilities. This is an ongoing process that requires continuous training.

Environment - Tate&Lyle takeseriously tothe environmentalissues, striving to begoodneighboursand to minimize the Group environmental. All operation which is carried outby 2theGrouprecognizes theresponsibilitytowardsthe natural environmentin which welive and work,and the Groupcomply withalllocal laws as applicable,andagree. The Group subscribes to the principal of the International Chamber of Commerces Business Charter of Sustainable Development, and to be popular definition of Sustainable Development as a better quality of life for everyone, now and generation to come. Tate&Lyleenvironmental policiesandoperating proceduresare supportedbya written reportthat requiresthe integration ofenvironmental concernsinto the operations, training and management practicesat all levels.

Human Right Afteroperating in the developing world more than 60 years, Tate & Lyle recognizes that theprimaryresponsibility ofthe employerandsource of incomein the communitylead. Tate&Lylerecognizeshuman rights andfreedomand strive toreflectthebusiness operations. This Groupis open todiscussissuesabout human rightsrelated to thewayit does businesswiththegovernment and NGOs. Rareconditionrestrictions orembargoesimposedby the international communityin these countriesTate&Lylewhichbusiness, the Group is the lead of the relevant political authorities to ensure that the restrictionis notbrokenandthat anyobservedtrade embargo. Tate&Lylereservesthe right, whereit is ableto do so,to withdraw fromtrade relations with companiesor countrieswhere it isnotpossibleforTate&Lyleto operateunderits ownpolicies andethicalstandards.

Legal Compliance - Tate&Lylewill comply withall applicablelocal, national,andsupra-relatednationallaws andregulationsin each country inwhich it operates. In These countries, or a particular situation, where there are no laws or rules governing certain activities of operations, Tate & Lyle will strive to operatein accordancewith the principles ofthisCode.

7.2 Economy Factor 7.2.1 Summary of Tate & Lyle Performance

Sales of3,506millionfrom continuing operationswere1% lower thanthe previous year. After excluding the impression of the exchange, sales were lower 6. Primary sales decline of 4% (8% in constant currency) from 2,584million to2,476million. The decrease ismainly due todeclining revenueco product, lower industry sales volume in both America and Europe and reduce the selling price of sugar isoglucosein Europe, reflecting theinstitutionalpricecutsimplemented under theEUsugarregime reform. Value-addedsales increased by 6% (flat in constant currency) to 1,030million, this had representingabout 30% of Groupsales.

Overalladjustedoperating profitwas in linewiththe previous yearthat is decrease by 7%inconstantcurrency to298million. Adjustedoperating profitinthe Food& IndustrialIngredients,Americaof 178million is2% lower thanthe previous year, 10%inconstantcurrency as alow incomewith product and reduce the starch industry profit was partially offset by increased profits from the ingredientsvalue-addedfoods.

Food & Industrial Ingredients, Europe achieved an increase in operating profits of 6%(4%inconstantcurrency)to54million,this reflecting the growth in value added food ingredients and Food System,partlyoffsetbyweakerprimaryfood andindustrialstarch margins. Sugardeliveran increase of 150% (100% in constant currency) to 30million, this reflecting the expected increase inmarginunits in thesecond half of theEUsugarthisyear.

Adjustedoperating profit in Sucralose has been reduce by 7%(9% in constant currency) to 67million, with operating margins reflect lower unit costs associatedwith makingatransitionto the location. Central costs areincreasedby13millionto31million, due mainlyto aone-offcost of5million during the yearassociatedwith this reviewand restructuring of the Groups activities, and certain one-off credit of 6millionrecognizedin the previous year.

In addition to theeffects of changes inexchange rates, operating profitwas influencedby a small numberofitemsin the financial year2010. Werecognize the delivery of income 3millionquota isoglicose in Romania;andincurredcosts of 5millionin connection with research and business restructuring done this year.

Amortizationofacquired intangible is 14million(2009-15million)was slightly lowerthan the previous year. Extraordinary itemsamounted toa charge of276million(2009-119million)have been addressedinthe executivestudy. While the netfinancialexpensesfrom continuing operations areincreasedfrom51millionto 69million. Effect of change inaccordance with the interestscontributedcaused an increase of4million over the previous year. We had been recognize thechargesin interest expensein the current yearrelated topost-employment benefitplans19million(2009-3million). Net finance expense

A net financial expense from continuing operations is increased from 51millionto69million. Effect of change inaccordance with the interestshas contributedan increase of4million over the previous year. They have recognize thechargesin the interest expensein the current yearrelated topost-employment benefitplans19million(2009-3million). Interestcapitalized during theyearreduced to2million of the11millionin the corresponding period, reflecting thelower capitalexpenditureand the decision to suspend thecompletionand commissioning ofFort Dodge, Iowaplant.

Underlying net finance expense was below the level of the prior year, reflecting significantly lower levels of average net debt. Loweraverage netdebt levelswill benefit theinterest expenseduring the financial year 2011,although themix ofdebtwill result inan average cost ofdebtwill increaseover the previous year. They expectnet interest chargesrelatedtopost-retirementbenefitplans to be around 6million in financial year 2011. The effective interest ratefor the yearon the operationamount,calculated as net financial expenses excluding net financing charges related to retirement benefitsand including capitalized interest, divided byaverage netdebtis5.3%(2009-5.0%). Interest coverfor the operationamount, calculatedon the basis ofthe bankagreement was5.8 times(2009 to 6.1times). Taxation

TheTaxationchargefromcontinuingoperationsbefore exceptional items and amortization of acquired intangible assets was 47million(2009-68million).The effective rate of tax on adjusted profit was 20.4% (2008 27.3%). This decline was dueprimarilyto changes in thegeographical originof profits,especially the lowerlevel of profitin the United States,andthe impactof their internalfinancing plan. Ifthe mixture ofgeographical origin ofprofits in theyearto31 March 2011is similar to thosein the year31 March 2010, tax ratesexpected to remainin thelow20%range. Impact of changes in exchange rates

Theyhave reportedtheir financial performancehad a positive impactthis year with the translation ofthe exchange rate,mainly due tothe strengtheningU.S. dollar (U.S.) and the averageexchangerate ofeuroagainst the pound. In addition tothe impact onprofits,strengthening to theclosing exchangerate ofsterling which hasthe effect of reducingnet debt, withthebenefitof netdebtreported.

Interest rate risk

They are exposed to interest rate changes, arising principally from changes in borrowing rates in US dollars, sterling and Euros. They have manage this risk by fixing or capping portions of debt using interest rate derivatives to achieve a target level of fixed/floating rate net debt. This aims to optimise net finance expense and reduce volatility in reported earnings. Their policy is that between 30% and 75% of Group net debt (excluding the Groups share of joint-venture net debt) is fixed or capped (excluding out-of-the-money caps) for more than one year, and that no interest rate fixings are undertaken for more than 12 years. A derogation of the maximum percentage of fixed-rate debt was approved by the Tate & Lyle PLC Board until 30 June 2010. At 31 March 2010 the longest term of any fixed-rate debt held by the Group was until November 2019. The proportion of net debt (excluding the Groups share of joint-venture net debt) that was fixed or capped for more than one year was 82% (2009 55%). If the interest rates applicable to their floating-rate debt rise from the levels of 31 March 2010 by an average of 100 basis points over the year to 31 March 2011, with all other variables held constant, this would reduce Group operating profit before tax by approximately 1 million (2009 4 million) Foreign exchange risk

They have significant investment in overseas operations, particularly in the USA and Europe. Earnings, cash flows and shareholders equity are therefore exposed to foreign exchange risks. They require our subsidiaries to hedge transactional currency exposures against their functional currency once they are committed or highly probable, mainly through the use of forward foreign exchange contracts.Their accounting policy is to translate profits of overseas companies using average exchange rates. They do not hedge exposures arising from profit translation. As a result, in any particular financial year, currency fluctuations may have a significant impact on our financial results. In particular, a strengthening or weakening of the US dollar against sterling will have a favourable or adverse effect respectively on the Groups reported results.

7.3 Social Factors 7.3.1 Corporate Social Responsibilities

Tate&Lyle,corporate social responsibilityequatesto applyfourcore values, which is safety, integrity,knowledgeandinnovationwhen they conduct their business. This means thatfurther progressin achieving thehighest standards ofsafety;consider theenvironmentalimpact ofevery aspect ofwhat they doandtreatemployees, suppliers andthe communities in whichthey workas a long term partners. Putting these concernsatthe centre oftheir businessrequiresa proactivemanagementat all the levels withinthe group. The Board reviews Tate & Lyles policies and performance annually, and the Chief Executive is the Board member accountable for all aspects of corporate social responsibility.

Environment - Today,it is something that they must understand and reduce environment impact. Most countrieshave signed uptotargets forcarbon emissions,andlegislationforthe corporate world far more stringent environmentalissues isconcerned. AtTate&Lyle, they believe thattoachieve sustainable growthin harmonywith the environment,not onlysocial responsibility,it's whatcustomers wantandit isgood businesssense. Therefore,they are committed toconducting them businessin a manner thatis sensitive to the environment andthe community in whichthey operate. They havedefinedenvironmental standardsand practices inallof their operations,and they activelyencouragetheir partnersto demonstratea similarlevel of commitment. All their operations fully integrate sustainable management practices into their operational systems and procedures and their board reviews environmental performance annually to ensure that they continue to make progress in reducing their impact on the environment while bringing economic benefits to Tate & Lyle.

Safety - Tate&Lylehas nohigher prioritythansafety, which they believeis important torun a successful business. This means thatensuringa safeand healthy conditionfor everyone attheir website:employees, contractors and visitors. By reporting, recognising and rewarding safety performance, they aim toensurethatall of their operationsto focus oncontinuous improvement.

Overall, their employee safety performance showed good progress in 2008, particularly in reducing the severity rate. During another year of heavy construction activity, they were pleased that they are overall contractor safety index also improved significantly, although it is lost-time and recordable injury rates for contractors both worsened.

Employee health and wellbeing - At Tate & Lyle, they aim to lead the way in employee health. Programswill different across the Groupin accordance withlocal needs,butallare based on theprinciple thatthe Companyhave a roletoplay inhelpingemployeesimprove their healthby supportinginformation, adviceand otherson healthand wellness. In US, Tate&Lylecontinues to provideprograms andtools tohelpemployees become more informedconsumersof health care servicesthemselves,andencourage them toadopt a healthy lifestyle. There are some examples of their programmes include Tate&Lylecontinues to provideprograms andtools tohelp theiremployees to become better informedconsumersof their healthcare services, andthis have encourage them toadopt a healthy lifestyle. Besides that, they also have offer wed-based system to their entire employee, which is called Blue Points system. It providesa platformfor their employeesto startandkeep track ofhealthy behaviours. Employees can earn pointsformeetingcertain healthtargets, which can beredeemedonline forhealthrelated productssuch asyogamatsanda sports bag. While in UK, nurse-ledin Tate&Lyle was a healthprogramwhich is emphasizes in education and prevention and is often referred toas amodelfor other businessesandpublic sector organizationsin UK. The major Initiatives include educating their employees on health and wellness, and provide vocational rehabilitation as an alternative to certificate the absence of disease and health promotion activities, health clinic, advice on healthy eating, and counselling services. Besides that, they also share elements oftheirprogrampartners. For instance, they have helped twocommunitiesin the absence ofmanagementtraining and advice,andtheyhostregular visitsfromthe trainee ofGPsand doctors from Occupational Health Diploma coursestoassisttheir understanding ofoccupational healthin a factory environment. They also offer work experience to thetrainees fromoccupational healthnursefrom SouthBank andBrunel University.

Communities - Tate&Lyleaimstoplay apositiveroleinanycommunityin whichthey operate. Over the past fewyears,theyhave developed aGroup-widecommunity of engagement policy that form oneof the core componentsunder their ethical behaviour. Their program involves building a long term relationships withlocal partners todeliver a common objective, which is creation astrong, safe and healthy communitiesby investingtime and resourcesinto the projectsthat directlyaddresslocalneeds. For example, in the financial year ended 31 March 2009, Tate &Lyles total worldwidecharitable donationsis 674,000, up from 642,000in the previous year,while their totalglobalprobonocontributions in goods and services were estimated to be 221,000, downfrom 254,000the previous year. They have supportvarious initiativesand local organizationswhich involved in theregeneration of communitiesaround the world.7.4 Technology Factors7.4.1 How Tate & Lyle adding value

Nowadays, there are rapidly changingin our lifestyleswhich arecausingconsumers todemand morefromthe products theybuy no matter in product department or service departments. This company have their own expertise in processingcarbohydrates andblending,specialistR&Dknowledge andinsightinto the market tohelp themdevelopingredients thataddtaste, nutritionand increasedfunctionalityto theirproducts customersTate & Lyle have high-volumecommoditybasewhich is allows themto runtheir plantsefficientlyandproducelow-cost substratetheycan use tocreatea special,highermarginproductsfor bothfood and industrialcustomers. These products are adding valuethroughthe fact that theyare either proprietary to Tate&Lyle,havea greaterfunctionthan alternatives,orcome up withadditional servicestocustomers. There have five ways to adding value in their product, which is research and development, research partnerships, consumer insights and commercial partnerships.

Research and development

Tate & Lyle have280peopleinR&Dteams around the worldwide to developinnovative ingredientsfromrenewable resources. InSeptember 2008,they openeda newInnovation CentreinLille,France,andthey also haveapplicationlaboratoriesin countriessuch as India, China andAustralia which are combined withtheir salesoffices.

Researchanddevelopment capabilitiesare divided intothreemain groups, which is development ofproducts, technologiesandcustomersolutions. Product developmentis divided intosweeteners, health,text rants, bio-products,industrial and animalfeed. This groupfocuses ondevelopingnewproductsandimprovingexisting products. While the technologiesgroupis includethe process of engineering,chemicalanalysis andcarbohydrates, andbio-chemicals. Their role is todeterminehowto create,analyzeandproduceingredients. Thecustomersolutions group includesthe applicationandtechnicalservice team. The applications team is to develop prototypes and sensory analysisfor customers who usetheiringredients. While thetechnical servicesteamswork directlywiththeir own customersto incorporate their ingredients intotheir products.

Research partnerships

Togive them have a new ideasandinsight into the market,they haddevelop apartnerships with externalresearch community. In October 2008, Tate & Lyle had contributed 4.5 million to support a new Clinical Research Facility which is opened by Kings College London at St Thomas Hospital. The aim of this Clinical Research Facility is to undertake research into areas such as gastrointestinal health, carbohydrate metabolism, and medical conditions such as obesity, diabetes and cardiovascular disorders. With the cooperation with Kings College London, they allow Tate & Lyle to toshare knowledge andultimately bringnewproducts and technologiesto market.

Besides that, they also have a Research Advisory Group which is comprise by a panel of six international industry and academic experts. This Research Advisory Group is to reviewthe researchand developmentportfolioandprovides an understanding on how thetechnologycan beappliedtofuture development.

Consumer insights

The market they operate is to satisfy customers needs by understanding their consumers. In 2005, they are one ofthe first ingredientscompanies go directlyto their consumertounderstand what drivespurchasing habits,andwhat a userlookin thefuture products. They have usedthis insight todrive the development oftheir own products,todifferentiate themselves fromtheir competitorsandgivetheir customers advantage. Every year, Tate & Lyle will have run a programme of studies to canvass the views of consumer in Europe, the Americas and Asia. Usuallythey will use thebasic researchattitudes like focus groups as a starting point tocomplete theprogramwitha detailedquantitativestudy.

This research is to showsa growingunderstanding ofthe benefits offibre in the dietthat is healthy,which is dealwith a variety oftheirPROMITORrange of dietary fibre. TheirResearch andDevelopment(R&D),marketingandregulatoryteamshave to work together toprovide insight from customer research,support onlabelling requirements,and assistance onmeetingproductdemand.

Commercial partnerships

In order to grow their business, they have form a joint venture or partnership to develop and distribute new products, and increase the capacity if their existing portfolio of ingredients. By using alliances andjoint venturescanbe an effective waytoreducecostsand invest innew markets,and this can gain an access tonew and complementary technologies and expertise. There have few examples about their partnerships with McNeil Nutritionals (a Johnson & Johnson company) on SPLENDA Sucralose, and with DuPont on Bio-PDO.

7.4.2 How Tate & Lyle creating volume

To satisfy the customer want about the quality ingredient, Tate & Lyle will start with the process a large volume of raw material from which we create the same basic products that are sold or used as a starting point for the development of specific materials and branded items.Producethisvolumeandlarge-scale operation, the plantseffectively,enables them tokeep unit costslowthroughout thebusiness. There have several ways to keep create the volume of raw material, there is developing new technologies, protecting their expertise, and manufacturing efficiency. Developing new technologies

Tate & Lyle have their own researchandtechnologyteamare dedicated todeveloping thelatestengineering technology,for their existing plantsandfor new builds. Tate & Lyle have their own technology, which is CORNBELT. The purpose of this technology is to increase the starch yields while at the same time reduce per unit energy consumption. Besides that, Tate & Lyle also used energy conservation technology in their cane sugar refinery in London. They had invested 20 million in refinery for biomass boiler is it assumes it will complete in March 2009. When this is fully operation, they assume that this biomass boiler can reduce refinerys carbon footprint for around 20% and it also can replace fossil fuel with the use of renewable energy source. While for the sugar business, they have their own specialist team, which is called Tate & Lyle Process Technology. This specialist team is provided support services, process engineering and design expertise to the sugar cane industry worldwide.

Protecting their expertise

In order to supporttheir business and protecttheir competitive advantage, they need to maintaina large number ofpatents. They need to carry out product innovation and development work to result innewtechnology, patentedorproprietary. They also need tomonitormarket developmentscloselyto identifyany possibleinfringement of patentsand intellectual propertyandtakelegal actionwhen they are necessary.

Manufacturing efficiency

In order to keep the factoryoperationssafely andefficientlyathigh volumes, theyrequirea reliable manufacturingprocessandup-to-date. The engineerswhoare actively involved inthe manufacturinglineanduse sometoolsof computer-basedprocessfortracking anddatamodeltohelp identifyopportunities for efficiency improvementssuch asincreasing revenues, reducing wasteandsaving energy. In US, they have run the pilot plants in both corn wet milling and sucralose businesses by dedicated teams which are used to identify a ways to make their manufacturing processes more efficient. Process of improvement to identify at their sucralose pilot plant within 12 monthshas enabled themtoachievea breakthrough inproductmanufacturing.