Plant Health Care (PHC) 2007年年度報告「LSE」.pdf

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1、Plant Health Care plc.1From inventor to investor.The inventorSometimes help comes from unexpected places.It was a power outagethat led Plant Health Care founder and Chief Scientist,Donald Marx,to animportant discovery in developing a unique,environmentally-friendly way tofoster plant growth.Marxs re

2、search career has been devoted to mycorrhizal fungi,which are vitalto plant health and have existed on plant roots for millions of years.While with the USDA Forest Service in the 1960s,he set up a greenhouseexperiment to grow these fungi on pine seedlings.One weekend,the powerwent out,shutting off t

3、he greenhouse cooling system.When he arrived the nextmorning,the temperature in the greenhouse had reached more than 130?F(55?C)and nearly all of the pineseedlings had died except one group.“Those seedlings inoculated with a specific fungus were thriving,”recallsMarx.The fungus seemed to have enable

4、d the plants to withstand the high temperatures.Later,he found the same fungus growing on tree roots in unlikely environments,such as the acidic,hot andhostile climates on strip mined coal spoils.Marx saw potential for it to be used to help reforest theseenvironmentally-stressed and drought-ridden a

5、reas.By the mid-1970s,his research team became the first to develop an inoculant of the fungus that could be applied tothe roots of tree seedlings in nurseries.They found that,when these seedlings were planted on the adverse coalspoils,they survived and grew normally,whereas seedlings without the fu

6、ngus died within a month.Following these initial successes,Marx tested the fungal technology in Africa,Mexico,South America,India,Europe and in China and found that it significantly increased the success of reforestation on cut-over and erodedland.Marx also won numerous awards for his pioneering wor

7、k,including Swedens prestigious MarcusWallenburg Prize,awarded to him by the King of Sweden for his research on tree mycorrhizae.When Marx retired from the Forest Service in 1994,he put his vast knowledge on mycorrhizal fungi to good use infounding Pittsburgh,Pennsylvania-based Plant Health Care.Wor

8、king with Dr.Stephen Maul,whose company(MycorrTech)was later merged with the Company,Dr.Ming Lin of Formosa Plastic and Dr.Michael Kernan ofPlant Health Care,they were able to mass produce these fungi for commercial use.The team developed environmentally-friendly products with the fungi for use on p

9、lants in urban landscapes,turf,flower beds,nursery,forestry,mined-land revegetation and,most recently,agriculture.Today,one of theCompanys core products uses patented Myconate?technology to strengthen plant health by stimulatingmycorrhizal development and increasing yields.One of Plant Health Cares

10、first achievements has been acooperation agreement with Bayer Crop Science to test the Myconate technology on certain agriculture crops.In February 2007,the Company also acquired the rights to the Harpin technology from Eden Bioscience Corp.Harpin proteins activate a plants natural ability to protec

11、t itself during growth with stress-defence responses.The Myconate and Harpin technologies,says Marx,will“change the face of farming.”Meanwhile,he and histechnical team will continue to seek out other environmentally-friendly technologies that fit with Plant Health Caresportfolio.But,who knows where

12、he would be today if it hadnt been for that power outage?Plant Health Care plc.2The farmerMore than 30 years of farming the High Plains of Texas has taught Ron Lukerthe key to turning out a good crop.“Get the soils right,get the roots healthy,and the rest will usually take care ofitself,”says Luker,

13、who farms just over 1,000 acres,mostly cotton,nearBrownfield,in north Texas.“There can be too much focus on the top half of thecotton crop,when the real source of plant vigour and yield is the ground the cropstands in,”he adds.In his quest to build the best foundation for his crops,Luker focuses on

14、enhancingand balancing the health of the soil with environmentally-friendly products thatdo not disturb the soils bio-ecology.This is a crop management philosophy that seems to be catching on these days,and Plant Health Cares products fit that approach.Luker,who graduated in agricultural engineering

15、 from Texas A&M,has always had a penchant for tinkering with thelatest technologies.But he prides himself not only on testing and adopting the most innovative,but also the mostlow-impact farming technologies on his cotton fields.He adds digested chicken manure to his liquid fertiliser,which is not o

16、nly effective as a fertiliser but has allowed himto cut his nitrogen use in half,sparing the soil.He also adds some calcium to the mix to help release phosphorus thecotton leaves in the ground.Luker is also using low-impact products to help him improve the soil.He says using a combination of Plant H

17、ealthCares N-Hibit?and a natural nutrient blend on his crops last year significantly increased plant yields and resulted infewer crops that got sick.He uses the Companys N-Hibit,for example,to help him manage nematodes,microscopic worms rampant in theHigh Plains that can sap a cotton plants health.“

18、A lot of people underestimate the damage and yield loss nematodes cause in cotton,”says Luker.“I know they arein my fields and that they have to be managed.We need new nematode tools that perform but dont have toxicityissues,and that are affordable.”N-Hibit contains Harpin,a naturally occurring prot

19、ein produced by bacteria that attack plants.The presence ofHarpin turns on internal plant signals that activate its natural self defence and growth systems as though the plant wasunder attack.N-Hibit has been found to increase cotton plant yields by an average of 5.4%in replicated andcommercial fiel

20、d trials.Luker is also using some soil aids that are probably as old as the planet,including mycorrhizal fungi products.WhenLuker plants his crop,the Texas farmer makes sure to water in products that increase fungi production.After decadesof use,modern agricultural techniques tend to strip away the

21、natural bacteria and other microbes that make forhealthy soil.Plant Health Care has developed a full line of inoculants and soil nutrient formulations that help restorethis balance.These ancient fungi have a symbiotic relationship with roots,building tubes that greatly extend thereach of roots so th

22、ey can capture more water and nutrients in return for plant sugars.Another key factor for Luker in growing cotton in the parched Southwest is that such fungi help cotton plants thriveeven at times of water scarcity.“Building more root mass and healthier soils helps less water do more for the crop,an

23、d if we have abundant rainfall that will really bring the crop on,”he says.Plant Health Care plc.3The salesmanWhen Pius Floris heard Don Marx speak at a tree conference about the unknownhealing power of mycorrhizal fungi in Hilton Head,South Carolina more than adecade ago,he knew the founder of Plan

24、t Heath Care was on to something.Floris,who at the time ran Pius Floris Tree Care,his own chain of tree carecompanies in the Netherlands,was highly intrigued by what Marx had to sayabout the symbiotic relationship of mycorrhizal fungi and a variety of plants.“Most people at that time misunderstood t

25、he role of mycorrhizal fungi,”saysFloris.“Few believed that they actually helped plants grow,acting like anotherkind of fertiliser.”For the unconvinced,there was even a demonstration outsidethe hotel of some thriving trees whose roots had already been treated with the fungi.Excited,Floris decided to

26、 try taking strains of the ancient fungi back with him to the Netherlands to apply to treesprone to diseases.He was thrilled by the results.“We found that the trees werent dying anymore after beingplanted or transplanted.”As the head of a business with some 200 employees and ten branches across the

27、Netherlands,the trained treeexpert says he always sought to keep on top of innovations in plant care.This was clearly one of them and Floris wassoon importing fungi-based products from Plant Health Care to use in his tree care company.Ultimately,he became so involved with the innovative range of pro

28、ducts that Plant Health Cares Chief Executive,John Brady,asked Floris if he wanted to come over to the other side.Floris opened the Companys first offices in theNetherlands and,in 2001,after selling his own company,came on board full-time as managing director in chargeof Dutch,German and Greek sales

29、 at Plant Health Care.He and his sales team are now selling the Companys products and services in several countries in Europe and theMiddle East,from northern Finland to sunny Sicily,in the areas of horticulture and for agricultural uses.Whereas US customers tend to respond more to the message that

30、mycorrhizal fungi help increase crop yield,a big selling point for Europeans,he notes,is that Plant Health Cares products can help farmers and horticulturistssave on pesticides,reducing the amount of harmful fertilisers applied to the ground.Still,it takes a lot of educational work to get the messag

31、e out,as some potential customers still have to be shown thevalue of mycorrhizal fungi and other environmentally-friendly products.“People have been told for decades thatchemicals alone are the answer when a plant is sick,”he notes.“But thats the same old recipe.You have to changethe mindset of the

32、growers.”Thats why Floris sales team keeps busy not only in making sales calls,but also givingpresentations on the benefits of the environmentally-friendly Plant Health Care technologies at growers groupsacross Europe.Floris says he is convinced that more and more customers will see the value in app

33、lying products to their crops thatwill enable a more sustainable use of the land.“This is going to be the future of agriculture.These products will beincreasingly employed to reduce the amount of harmful chemicals used.”Plant Health Care plc.4The investorAs a homeopathic veterinary surgeon,Marc Baer

34、 takes a different view than aconventional animal doctor on how to cure disease in horses,dogs or cats.Homeopathy believes in using the bodys natural defence mechanisms to helporganisms regain their internal balance and thus cure disease,rather thanmerely treating symptoms.Baer views what Plant Heal

35、th Care is doing as applying this same philosophy tothe plant world.“They are introducing sustainable methods to help individualplants restore their equilibrium,”says the Swiss vet,one of the early investors inthe Company.Baer invested his own funds in Plant Health Care as far back as 1996,when the

36、Company was just a fledglingstart-up.In spite of a successful IPO on Londons Alternative Investment Market(AIM)in 2004,Baer insists onkeeping his shares.“I have no intention of selling my stake.This is something I believe in.”After coming into contact with founder Don Marx and Plant Health Cares man

37、agement,Baer decided that he likedthe team,the product and the Companys philosophy towards the environment,which matches his own.“We all need to be aware that we should look after our planet.Once it becomes too polluted,that will be difficultto fix,”says Baer.Just as homeopathic treatments seek to p

38、revent disease from entering by keeping the living organism in good shape,so do Plant Health Cares products prevent plant sickness by allowing them to thrive,both by utilising mycorrhizalfungi or the use of Harpin proteins.In doing so,they not only increase crop yield or let nursery plants thrive,bu

39、t alsoreduce the amount of chemical substances that must be used to combat sickness.Baer has seen the results of Plant Health Cares mycorrhizal fungi treatment at very close range.Several years ago,he applied the Companys mycorrhizal fungi mixture to the roots of a large but sickly beech tree that s

40、prawls in hisfront yard in the historic quarter of Zurich.Baer says the trees condition has markedly improved since doing so.Plant Health Care plc.5Contents.6Directors and advisors7Highlights8Chairmans statement10Chief Executives report14Directors16Board committees17Corporate governance statement20R

41、emuneration Committee report26Report of the directors30Statement of directors responsibilities31Independent auditors report33Consolidated income statement34Consolidated statement of recognised income and expense35Consolidated balance sheet36Consolidated cash flow statement37Notes forming part of the

42、 Group financial statements69Company balance sheet70Notes forming part of the Company financial statementsPlant Health Care plc.6Directors and advisors.DirectorsDr.Albert FischerNon-executive ChairmanJohn BradyChief ExecutiveDr.Donald MarxExecutive Director and Chief ScientistStephen WeaverFinance D

43、irectorThomas IslerSenior Independent DirectorDr.Robert ChansonNon-executive DirectorSamuel WauchopeNon-executive DirectorSecretaryAndrew C.Wood FCISRegistered OfficeMinerva House5 Montague CloseLondon SE1 9BBCompany number05116780AuditorsBDO Stoy Hayward LLP55 Baker StreetLondon W1U 7EUCompany Soli

44、citorsReed Smith Richards Butler LLPMinerva House5 Montague CloseLondon SE1 9BBRegistrarsCapita RegistrarsThe Registry34 Beckenham RoadBeckenhamKent BR3 4TUBrokers andNominated AdvisorEvolution Securities Limited100 Wood StreetLondon EC2V 7ANPlant Health Care plc.7Highlights.Plant Heath Care was est

45、ablished in 1995 in Pittsburgh(Pennsylvania)in the UnitedStates.Its products are aimed at the agriculture,commercial landscaping and landreclamation industries,through both direct sales and supply and distribution agreementswith major agrichemical industry partners.Plant Health Cares products create

46、both environmental and economic benefits for its customers and capitalise uponlong-term trends toward natural systems and biological products to promote plantgrowth,health and yield.Financial highlightsTurnover up 34%to$18.3 million(2006:$13.7 million);Gross profit up 37%to$8.4 million(2006:$6.1 mil

47、lion);Gross margin up from 44.7%to 45.6%due to upfront fee income from partners and entry into the higher marginHarpin business;Loss,before exceptional costs,costs of share-based payments,interest andtaxation,of$4.4 million(2006:loss of$2.5 million);Net loss of$5.4 million(2006:loss of$3.0 million);

48、andNet cash at 31 December 2007 of$9.8 million(2006:$3.7 million).Operational highlightsFirst Myconate manufacture and supply agreement signed with Bayer Cropsciencein January 2007exclusive for seed-coated corn,soybean,cotton and sunflower;In December 2007,agreement signed with Monsanto to evaluate,

49、develop andcommercialise certain applications of the Harpin-based technologymade possible by the acquisition of the Harpin intellectual property fromEden Bioscience;Significant contribution from US Agriculture division in its first full year of operation;New share capital of$10 million raised in Sep

50、tember;andPost year end:Steve Weaver appointed to the Board of Directors as FinanceDirector on 28 March 2008.Plant Health Care plc.8Chairmans statement.Our core business is to provide natural products which promote plant growth,health andyield with environmental care.There are few more topical issue

51、s in the markets today thanincreased world population,the rapid growth of a sizeable middle class in emergingeconomies demanding higher protein diets,and the drive for biofuels.These have allcontributed to higher demand levels for agricultural products than has ever been seenbefore.At the same time,

52、the availability of productive agricultural land in suitable climatezones is becoming more limited.Despite significant productivity increases from advancesin seeds,fertilisers,pest control and land management,the demand/supply balance isbeing seriously tilted,crop prices are rising and strategic sec

53、urity concerns are beingaired.Major agriscience and agrichemical companies are responding to this by seekingthe next wave of technology innovation to further improve yields and re-establish balance,in order to secure their own future profitability.Plant Health Care is very well positioned in this ma

54、rket environment,with the provencapabilities of our IP-protected natural technologies,as evidenced by our two majorpartnership deals with Bayer CropScience and Monsanto,for Myconate and Harpin,respectively.We have set two strategic targets:growth and product development.Ourmajor target is to exploit

55、 our natural technologies through two sales channels:majorpartnerships with significant players who have the distribution and resources to achievewide penetration for our technologies in high volume row crops,and product sales throughmajor national distributors for more fragmented markets where we c

56、an be cost effective inreaching customers.We also continue to pursue the strategy of securing and developinginnovative natural technologies and products with a high level of intellectual propertyprotection for plant growth,health and yield,which can fulfil the above market demand.An overview of 2007

57、The most important milestones during the period were the first two major partnershipagreements signed for our natural technologies.In January,Bayer CropScience agreed todevelop and commercialise Myconate seed treatment applications for corn,cotton,soybean and sunflowers,while,in December,Monsanto en

58、tered into an agreement withus to evaluate,develop and commercialise certain applications of our Harpin-basedtechnology suite.The latter agreement was made possible by our acquisition in February 2007 of certainassets and the Harpin intellectual property from Eden Bioscience,another highlightof our

59、year.In 2007,we continued our pursuit of sales growth.Our performance was pleasing,withrecord revenue in almost all business units;in particular,in its first full year of operation,ourUS Agriculture division successfully introduced Plant Health Care into what will be animportant market for the futur

60、e.Shareholder support for the Company was demonstrated when,in September,we raised$10 million of new equity,which has left us in a strong cash position with no foreseeableneed for further capital or borrowings to fulfil our present plans.Financial resultsRevenue for the year was$18.3 million,an incr

61、ease of 34%over 2006($13.7 million).The gross margin was 45.6%(2006:44.7%),although increased expenses associatedwith the development and testing of our Myconate and Harpintechnologies,together withPlant Health Care plc.9Chairmans statementc o n t i n u e d.the costs of our first full year of operat

62、ion in the US agriculture market,led to an operatingloss,before exceptional costs and the costs of equity share-based payments,of$4.4 million(2006:loss of$2.5 million).After exceptional costs,the costs of equityshare-based payments,interest and a small taxation charge on certain overseasoperations,t

63、he net loss for the year was$5.4 million(2006:loss of$3.0 million).At 31 December 2007,net cash was$9.8 million(2006:$3.7 million).Board changesI am pleased to announce that Steve Weaver was appointed to the Board on 28 March2008.Steve joined us as Chief Financial Officer in May 2007 and has made in

64、valuablecontributions in improving our financial controls,analysis and reporting to meet our needsas we grow.He has also proven himself a strong contributor in strategic discussions andwe look forward to his input as a Board member in the coming years.Today we are also announcing that our two longes

65、t serving Board members,Don Marxand Robert Chanson,are both standing down at the forthcoming annual general meeting.Each has served thirteen years as a director of Plant Health Care plc and its predecessorcompanies,during which time they have each contributed a great deal to the developmentof the Co

66、mpany and its business.Don,a co-founder of Plant Health Care,provided us with a wealth of knowledge,experience and contacts after a highly successful and prestigious career with the USDAForestry Service.After a period as Chief Executive of the Group,he has since deployed hisskills as our Chief Scien

67、tist and as a member of the Board.Although standing down fromthe Board,Don will continue as Chief Scientist and we look forward to his continuedcontribution in that role.Robert has made many contributions to the Company in his role as non-executive director.Before our AIM listing,he was instrumental

68、 in helping to secure investment in the Companyand his wider business knowledge has enabled him to contribute greatly to the strategy ofthe Company.I would like to take this opportunity to thank both Don and Robert for their contributions tothe Company and to the Board over the past thirteen years.O

69、utlookPlant Health Cares ability to fulfil the need for higher yields on existing land has beenvalidated by the transactions with Bayer CropScience and Monsanto.With our stable ofeffective natural technologies,we are extremely well positioned to offer further solutions tohelp meet this global challe

70、nge and,as such,the macro environment remains favourable.As a consequence of our progress in 2007 and the positive global drivers for the business,the Board looks forward to the coming year with confidence.I would like to thank all of thePlant Health Care team for their contribution to the success o

71、f our Company and lookforward to working with them to achieve our shared goals.Dr Albert FischerNon-executive Chairman28 March 2008Plant Health Care plc.10Chief Executives report.Introduction andsummary of operatingresults2007 was another successful year for Plant Health Care,with our first two majo

72、rpartnership deals with Bayer CropScience and Monsanto for Myconate and Harpin,respectively,and turnover up 34%to a record$18.3 million(2006:$13.7 million).I amdelighted to report that this growth was led by our US Agriculture division(established in2006)which generated$4.0 million of sales in 2007

73、and from fee income from partners,which contributed some 5%of turnover.Gross profit was up 37%to$8.4 million(2006:$6.1 million).The improvement in ourgross margin to 45.6%(2006:44.7%)is attributable to fee income from our partnersand to our entry into the higher margin Harpin business,which contribu

74、ted salesof$2.6 million.We continued to develop and test new applications of our natural technologies,and weexpanded our sales team to achieve the above-mentioned sales growth in US Agriculture.This resulted in increased operating costs of$13.6 million(2006:$9.0 million).The operating loss for the y

75、ear was$5.2 million(2006:loss of$2.9 million),slightlyhigher than expected due to a delay on another Harpin deal,which is expected to becompleted in the first half of the current year.Net cash at 31 December 2007 was$9.8 million,boosted by a successful$10 million equity fundraising in September 2007

76、.Our naturaltechnologiespartnershipsMyconate?Myconate increases the rate of plant root colonisation by beneficial fungi,which extractnutrients from the soil for the benefit of the plant.This allows the plant to grow more quicklyand with more strength to resist pathogens and disease.The result is hea

77、lthier plants and,in the context of agriculture,significantly improved yields.Myconate is particularlyeffective when applied in the earliest stages of a plants growth,and can be applied as aseed coating or side dressing at time of planting.In January 2007,the first manufacture and supply agreement f

78、or Myconate was signedwith Bayer CropScience,covering seed treatment of corn,cotton,soybean andsunflower,and a year on Bayer confirmed that they are continuing to pursue their plannedprogramme to introduce Myconate to their market.As a result,we have now received ourfirst milestone payment and our r

79、elationship with Bayer remains strong.Bayer is the worldwide leader in seed coatings for corn,and is also strongly represented inseed coatings for the other crops in which we are partnered with them.They haveindicated their intention to launch their first Myconate-based product in 2010,and weexpect

80、that such products will,following a period of market rollout,address a significantproportion of the markets in which Bayer is currently represented.In 2007,we also continued our independent programme of Myconate testing in otherapplications,the results of which reaffirm significant yield enhancement

81、 when it is appliedto grains and high-value vegetables.Plant Health Care plc.11Chief Executives reportc o n t i n u e d.For example:on grain and straw in winter wheat,tested using a variety of application methods,there were particularly pleasing yield improvements.When applied as a seedtreatment,yie

82、ld increased as much as 5.4%and,when applied as a ground spray,the improvement was up to 7.4%.Additionally,Myconates application as both aseed treatment and a ground spray delivered yield increases of up to 9.4%;when applied to carrots in furrow application at seeding,Myconate produced ayield improv

83、ement in excess of 30%in two separate trials;celery trials demonstrated a 14%harvestable yield increase when Myconate wasapplied as a pre-plant,transplant spray.Against the control,tests showed a 12%increase in total weight and 12%increase in top weight;anda 13%yield increase was achieved in trials

84、on onions;as with celery,applicationwas by pre-plant,transplant spray.Additionally,a 13%increase in bulb weight and11%increase in diameter were recorded.We have reached non-exclusive agreements with several multi-national agriculturecompanies to allow them to run their own tests and consider the com

85、mercialisation ofMyconate for application on small grain cereals,such as wheat and barley.We will continue discussions with prospective partners regarding the use of Myconate onvegetables,although we will also consider the option of addressing this market,which ischaracterised in the USA by a small

86、number of large,specialised growers for each of themain crops,by means of direct sales.Finally,we continue to explore the potential for Myconate in the emerging market ofenergy crops.We have evidence that Myconate is highly effective on crops such asswitchgrass,which are anticipated to be the coming

87、 crops of choice to fuel the growingdemand for biofuels,and we will address that market with a properly structureddevelopment,testing and commercialisation model.HarpinThe acquisition of certain assets from Eden Bioscience was completed in February 2007.The assets included the patent-protected right

88、s to Harpin technology and,additionally,provided Plant Health Care with Harpin-based products aiding the development of ourUS Agriculture business.Harpin is a protein which,while itself harmless to a plant,causes the plant to believe it isunder attack from pathogens.Accordingly,the plant triggers it

89、s natural defences,whichtypically involve stronger growth and pathogen resistance.Plant Health Care plc.12Chief Executives reportc o n t i n u e d.Amongst the proven applications of this technology to date are:to defend against cyst nematodes,particularly in soybeans;cyst nematodes areestimated to c

90、ause approximately$1.0 billion of damage to the annual soybeancrop in the USA,and there is no other effective treatment available today;to generate extended shelf life in leaf and other salad crops,of real economicbenefit to supermarkets and other retailers;andto improve yield in crops treated with

91、glyphosate,an industry-standard herbicide.At the interim stage,the Board stated its belief that“following an evaluation of thetechnology,the commercial prospects for Harpin were significantly greater than initiallythought.In light of this,Plant Health Care has actively pursued opportunities to furth

92、erdemonstrate the efficacy of Harpin and has undertaken trials in conjunction with theAmerican Soybean Association and the University of Illinois”.These field trials of Harpin-based N-Hibit and ProAct?delivered very encouraging results.Yield improvements in cotton were between 6%and 12%when used in

93、combination withnematicides and both products consistently demonstrated their efficacy in improving cropyields by reducing harmful nematodes.The acquisition of Eden Biosciences assets provided us with five years of trial datademonstrating significant yield increases for plants treated with a combina

94、tion ofglyphosate and Harpin.Additionally,we continued to pursue registration of Pre-Tect,our shelf-life extension product.Our first partnership agreement to develop,evaluate and commercialise Harpin wassigned with Monsanto Company in December 2007.This agreement grants Monsantoexclusive rights to c

95、ertain applications of Harpin in return for undisclosed upfront fees,milestone payments,which are dependent on the progress of the developmentprogramme,and ongoing royalty payments based on the acreage to which the product isapplied.The Board believes that,once evaluations are complete,products coul

96、d begin tobe available to growers by 2009.Product salesAgricultureWe continue to believe that agriculture represents the market of greatest potential for PlantHealth Care.As well as through the partnerships described above,we see significantpotential in our product sales operations.In 2007,we saw st

97、rong growth in our agriculturebusinesses in the USA,Mexico and in various European markets.Only in the UK was therea slight slowdown.Our growth is derived from a number of products which meet particular needs ofgrowers and their customers.For example,our natural liquid plant foods are provingpopular

98、 with growers with a need for a high nitrogen input but a desire also for naturalinputs,PreTect offers extended shelf life in-store for a wide variety of leaf and saladplants,while Harpin-based N-Hibit offers soybean farmers a means of addressing theirnematode problem.It is through these and other s

99、imilar innovative products,and a strategy of progressivelyintroducing these products into new territories(as registrations and marketing resourcesallow),that we anticipate continued strong growth in our direct sales to the worldsagriculture markets.Plant Health Care plc.13Chief Executives reportc o

100、n t i n u e d.Horticulture and TurfOur US horticulture and turf business reached a major milestone in 2007 by delivering apositive financial contribution for the first time on the back of record sales of$6.3 million(2006:$6.0 million).We had recognised that the growth potential for Plant Health Care

101、in this market in the near term does not match that available in agriculture,and had set oursights,therefore,on achieving a positive return from what we could conservativelyanticipate in sales,rather than on major promotional spending to chase growth,whichmight prove difficult to secure.Our focused

102、work with major distributors,combined withstringent cost control,resulted in the shift into profitability for this operating unit.OutlookA number of important milestones were met during the period and we made significantprogress towards achieving our objectives.Our work with Bayer CropScience and Mo

103、nsanto continues to take us closer torealising significant revenue and financial returns from the widespread exploitation ofour natural technologies.Our product sales activities provide a powerful platform from which to promote ourtechnologies,and also generate revenue and contribution from higher v

104、alue,smallervolume products and crops.We continue to invest heavily into the development and testing of our technologies toensure that we maximise our potential from their exploitation,and we remain alert to thepossibilities of securing further innovative natural technologies,which can be effectivel

105、ydeployed in our target markets.We remain focused on building Plant Health Care into the leading global provider ofnatural technologies and products which promote plant growth,health and yield,andthereby building value for our shareholders.The macro drivers and market conditionsremain extremely favo

106、urable and the prospects for our Company remain strong.As aresult,we look forward to reporting further progress during the current year.John BradyChief Executive28 March 2008Plant Health Care plc.14Directors.Dr.Albert FischerNon-executive ChairmanAge 50Dr.Fischer is a citizen of the Netherlands.He j

107、oined the Group as Non-executiveChairman in 2001.Dr.Fischer is managing partner and co-founder of Planet Capital,anindependent advisory firm to entrepreneurs,management teams and investors in cleantechnology;it is also an active investor in companies with key intellectual property in cleantechnology

108、.Previously,he was a partner with Green Partners and PYMWYMIC,aninvestment firm focused on businesses that integrate the values of a socially andenvironmentally sustainable society into their day-to-day business practices.Prior to that,Dr.Fischer served in various senior functions at Reed Elsevier S

109、cience plc,one of theworlds largest providers of scientific and technical information products.Dr.Fischerserved at Elsevier for nine years;his last function was Head of Development.Dr.Fischer is a director of Social Venture Network Europe,a network of Europeanenterprises and organisations dedicated

110、to working according to sustainable businesspractices.John BradyChief ExecutiveAge 53Mr.Brady is a US national and joined the Group as Chief Executive in 2001.Mr.Bradyis responsible for implementing the Groups strategy and for management of theGroups operations.Prior to joining the Group,Mr.Brady wa

111、s President and CEO of Alaska SeafoodInternational,a seafood product manufacturing company.Prior to that,Mr.Brady servedas Executive Vice President,Operations,for Anderson Clayton Corp,one of the worldslargest vertically-integrated cotton companies.Mr.Brady served at Anderson Claytonfor 19 years.Mr.

112、Brady is also a non-executive director of Organic Bouquet Inc.and Organic StyleLimited.Mr.Brady holds an MBA degree with an emphasis in Finance from Arizona StateUniversity and a BA degree in Political Science from the University of Connecticut.Dr.Donald MarxExecutive Director andChief ScientistAge

113、71Dr.Marx is a US national and was a founding director of the Group in 1995,following37 years with the USDA Forest Service.As Chief Scientist,Dr.Marx oversees theGroups research programmes and works with the Groups partners and customers toexplain and demonstrate to them the benefits of Plant Health

114、 Cares approach to plantmanagement.He also manages the university and field-testing of Plant Health Careproducts,and chairs the Companys Scientific Advisory Board.Dr.Marx lectures extensively throughout the USA and abroad on soil ecology,plantphysiology,mycorrhizal fungi and bacteria.He has authored

115、 more than 250 scientificpapers in forest microbiology,has presented more than 400 invitational lecturesin 28 countries,as well as at most major universities in the USA,and has carried outresearch in 25 countries.As a result of his accomplishments Dr.Marx has receivednumerous awards,including the Ma

116、rcus Wallenberg Prize(awarded by the Kingof Sweden),the Barrington Moore Award from the Society of American Foresters,theUSDA Distinguished Science Award,the Superior Achievement Award from theUS Department of Energy and the Congress Medal for Outstanding Achievement inPlant Protection from the Inte

117、rnational Congress of Plant Protection.Plant Health Care plc.15Directorsc o n t i n u e d.Stephen WeaverFinance DirectorAge 54Mr.Weaver is a US national and joined the Group as Chief Financial Officer in 2007.He was appointed to the Board on 28 March 2008.He is responsible for managing theaccounting

118、,finance,human resource and information technology functions for the Group.Prior to joining the Group,Mr.Weaver was Chief Financial Officer of Xaloy,Inc.,aninternational manufacturing business serving the global plastics industry.Prior to that,Mr.Weaver served consecutively as Vice President and Chi

119、ef Financial Officer andSenior Vice President and General Manager of Carbide/Graphite Group,Inc.,amanufacturing company serving the global steel industry.He served at Carbide/GraphiteGroup,Inc.,a NASDAQ-listed company,for 11 years.Mr.Weaver holds an MBA degree from Indiana University and a BA degree

120、 in economicsfrom DePauw University.Thomas IslerSenior IndependentDirectorAge 63Mr.Isler is a Swiss national and joined the Board of the Group in 2001.Mr.Isler hasextensive experience in industry,international marketing and private and internationalbanking.He is currently CEO of a privately-owned Sw

121、iss textile company,and is adirector of several other Swiss companies,including Desco von Schulthess AG,aninternational trading house.From 1987 to 2005,Mr.Isler served as a Member ofParliament of the Canton of Zurich.Dr.Robert ChansonNon-executive DirectorAge 58Dr.Chanson is a Swiss national.He join

122、ed the Board of the Group in 1995.He isa lawyer,politician and ecoinvestment consultant.In 1991,he founded Eco-RatingInternational Limited in Switzerland and,since its inception,has been ExecutiveChairman.He is also Chairman and CEO of Ambiocare Holdings Limited in Switzerland.Dr.Chanson acts as a m

123、ember of various advisory boards and committees in academicresearch,commerce and environmental conservation in Europe and the USA.Samuel WauchopeNon-executive DirectorAge 56Mr.Wauchope is a UK citizen and joined the Group as a non-executive director inJune 2004.A chartered accountant,Mr.Wauchopes ex

124、ecutive career has involvedCEO and Executive Chairman positions in a number of UK listed companies,includingAcorn Computer Group plc,Oceonics Group plc and Ultrasis plc.He has alsoserved as a non-executive director on the boards of other fast-growing UK quotedcompanies,including Waste Recycling Grou

125、p plc and Gall Thomson Environmentalplc.Mr.Wauchope is currently advisor to a number of private companies and anon-executive director of Property Recycling Group plc.Plant Health Care plc.16Board committees.The principal standing committees appointed by the Board are as follows:Audit CommitteeThe Au

126、dit Committee is chaired by Sam Wauchope.Thomas Isler is also a member.TheCommittee provides a forum for reporting by the Groups auditors and reviews the Groupsbudget and its interim and final financial statements before their submission to the Board.The Committee also monitors the Companys internal

127、 control and risk managementpractices and reports to the Board on these.The Committee advises the Board on theappointment of external auditors and on their remuneration,both for audit and non-auditwork.It also discusses the nature and scope of the audit with the auditors.Remuneration CommitteeThe Re

128、muneration Committee is chaired by Thomas Isler and includes Albert Fischer,Robert Chanson and Sam Wauchope as members.The Committee is responsible fordetermining the contract terms,remuneration and other benefits for executive directors andsenior management.Its policy is to ensure that,through a pr

129、ocess of regular review,theGroups remuneration arrangements attract and incentivise the quality of executivemanagement that the Company needs to achieve its goals and grow shareholder value,and are in line with best practice.The Committee may take independent specialist adviceto assist it in its wor

130、k.When required,the Committee is also involved in the selectionprocess for executive directors and approves remuneration before a final offer is made.The Remuneration Committee report is set out on pages 20 to 25.Plant Health Care plc.17Corporate governance statement.In July 2003,the Financial Repor

131、ting Council published the Principles of GoodGovernance and the Code of Best Practice(“the Combined Code”).This code wasupdated in July 2006.Since admission to AIM,Plant Health Care plc has taken note of the CombinedCode and has applied its principles of corporate governance commensurate with theCom

132、panys size,notwithstanding that the rules of the London Stock Exchange donot require companies that have securities traded on AIM to formally comply with theCombined Code.The Board is accountable to the Companys shareholders for good governance and thestatement set out below describes how the princi

133、ples identified in the Combined Codeare applied.Board compositionThe Board currently comprises a non-executive chairman,three executive directors andthree other non-executive directors.Biographies of the Board members appear on pages 14 and 15.These indicate the highlevels and range of business expe

134、rience which is essential to oversee effectively a businessof the size,complexity and geographical spread of the Group.The Board considers all of the non-executives to be independent in judgment andcharacter,while acknowledging the following departures from the Combined Codesanticipated criteria for

135、 independence:(i)While serving as non-executive directors of Plant Health Care,Inc.,Albert Fischer,Robert Chanson and Thomas Isler were granted options for their services to thatcompany.At flotation,these options were exchanged for options in Plant HealthCare plc.The Company will not make any furthe

136、r awards of options tonon-executive directors.(ii)Robert Chanson was first appointed to the Board of the Group in 1995.He has,therefore,now served as a director of the Group for over the recommendedmaximum of nine years.Robert Chanson and Donald Marx have informed the Board that they will not be see

137、kingre-election at the forthcoming Annual General Meeting on 6 June 2008,and will standdown from the Board as of that date.Board committeesThe Board has established audit and remuneration committees,as described onpage 16.No separate nominations committee has been established;the full Board actsas s

138、uch a committee when changes to the Board of directors are proposed.Workings of the BoardThe Board meets on a pre-scheduled basis nine times each year and more frequently whenrequired.The Board has a schedule of matters reserved to it for decision and therequirement for Board approval on these matte

139、rs is communicated widely throughout thesenior management of the Group.The schedule includes matters such as:approval of theGroups strategic plan;extension of the Groups activities into new business orgeographic areas;any decision to cease to operate all or any material part of the Groupsbusiness;ch

140、anges relating to the Groups capital structure;major(over$1 million)bids byPlant Health Care plc.18Corporate governance statementc o n t i n u e d.PHC Reclamation;contracts that are material strategically or by reason of size;investmentsincluding the acquisition or disposal of interests in the votin

141、g shares of any company or themaking of any takeover offer;and the prosecution,defence,or settlement of litigationmaterial to the Group.There is an agreed procedure for directors to take independent professional advice ifnecessary at the Companys expense.This is in addition to the access which every

142、 directorhas to the Company Secretary.The Secretary is charged by the Board with ensuring thatBoard procedures are followed.The differing roles of Chairman and Chief Executive are acknowledged and defined inseparate statements approved by the Board.The key functions of the Chairman are toconduct Boa

143、rd meetings and meetings of shareholders and to ensure that all directors areproperly briefed in order to take a full and constructive part in Board discussions.The ChiefExecutive is required to develop and execute business strategies and processes to enablethe Groups business to meet the requiremen

144、ts of its shareholders.The Senior Independent Director acts as a point of contact for shareholders and otherstakeholders with concerns which have failed to be resolved or would not be appropriatethrough the normal channels of the Chairman,Chief Executive or Finance Director and canbe contacted in co

145、nfidence through the Company Secretary.The Senior IndependentDirector also meets with the other members of the Board,without the Chairman present,onat least an annual basis in order to evaluate and appraise the performance of theChairman.To enable the Board to function effectively and allow director

146、s to discharge theirresponsibilities,full and timely access is given to all relevant information.In the case ofBoard meetings,this consists of a comprehensive set of papers,including regular businessprogress reports and discussion documents regarding specific matters.The Board conducts an annual Boa

147、rd Performance Evaluation in line with the requirementsof the Combined Code.Re-election of directorsAny director appointed during the year is required under the provisions of the Companysarticles of association to retire and seek election by shareholders at the next annual generalmeeting.The article

148、s also require that one-third of the directors retire by rotation each yearand seek re-election at the annual general meeting.The directors required to retire will bethose in office longest since their previous re-election.Remuneration ofdirectorsA statement of the Companys remuneration policy and f

149、ull details of directorsremuneration are set out in the Remuneration Committee report on pages 20 to 25.Executive directors abstain from any discussion or voting at full Board meetings onRemuneration Committee recommendations where the recommendations have a directbearing on their own remuneration p

150、ackage.Plant Health Care plc.19Corporate governance statementc o n t i n u e d.CommunicationThe Company places a great deal of importance on communication with its shareholders.The Company publishes an interim statement,as well as its full-year report and accounts.Both are mailed to all shareholders

151、 and upon request to other parties who have an interestin the Groups performance.Regular communication with shareholders also takes placevia the Company website is regular dialogue with major shareholders,as well as general presentations afterthe interim and final results.From time to time,these mee

152、tings involve the non-executivechairman or other non-executive directors.All shareholders have the opportunity to askquestions at the Companys annual general meeting.Internal controls andrisk managementThe directors are responsible for the Groups system of internal control and for reviewing itseffec

153、tiveness.However,such a system can provide only reasonable,but not absolute,assurance against material misstatement or loss.The directors recognise that the Group is ambitious and seeking significant growth.Thereis an on-going process in place to review regularly the control systems across the Group

154、 toensure that they develop in anticipation of this growth.Twice a year,prior to theannouncement of the Groups interim and final financial results,the Finance Directorpresents to the Board for discussion and approval a summary of the key internal controls inplace during the prior period and proposal

155、s for enhancements to these controls in theforthcoming period.Based on this process,the directors believe that the Group hasinternal control systems in place appropriate to its size and nature.The Board also has in place a formal ongoing process for identifying,evaluatingand managing the significant

156、 risks faced by the Group,which complies with theguidance provided by the document:Internal Control:Guidance for Directors on theCombined Code.The Company does not maintain an internal audit function.The directors do not believesuch a function is justified in terms of the scale of the Group or the c

157、osts involved.Auditor independenceThe Audit Committee has sole responsibility for assessing the independence of the externalauditors,BDO Stoy Hayward LLP.The Committee has had due regard to the documentpublished in May 2003 by the Institute of Chartered Accountants in England andWales:Reviewing Audi

158、tor Independence:Guidance for Audit Committees.Each yearthe Committee:seeks reassurance that the external auditors and their staff have no family,financial,employment,investment or business relationship with the Company.To this end,theCommittee requires the external auditors and their associates to

159、confirm this inwriting,and detail the procedures which the auditors have carried out in order tomake this confirmation;checks that all partners engaged in the audit process are rotated at least everyfive years;assesses the likely impact on the auditors independence and objectivity beforeawarding the

160、m any contract for additional services.It is Company policy to requireAudit Committee approval for all non-audit services provided by the independentauditors;andhas as a standing agenda item at each Audit Committee meeting the considerationof auditor independence.Plant Health Care plc.20Remuneration

161、 Committee report.The Remuneration Committee is chaired by Thomas Isler and includes Albert Fischer,Robert Chanson and Sam Wauchope as members.All are non-executive directors.TheCommittee is responsible for determining the contract terms,remuneration and otherbenefits of the executive directors and

162、of the Chairman,and for monitoring theremuneration of first-line executive management.The Committee may also call on outsidecompensation experts as required.Remuneration policyIt is Group policy to set directors remuneration levels to attract,incentivise and retain thequality of individuals that the

163、 Group requires to succeed in its chosen objectives.It is also Group policy to ensure that there is a strong link between the level of executivedirectors remuneration and the performance of the Group in achieving its goals.At the forthcoming annual general meeting,shareholders will be given the oppo

164、rtunity toask the chairman of the Remuneration Committee questions on any aspect of the Groupsremuneration policy.Elements ofremuneration executive directorsThe following comprise the principal elements of executive directors remuneration:basic salary and benefits;annual bonus;long-term share-based

165、incentives;pension contributions;andpost-employment health benefits.Basic salary and benefitsSalaries are reviewed(but not necessarily increased)annually by the Committee.As thelevel of each individual directors remuneration can be significantly augmented throughperformance-related bonuses,only in e

166、xceptional circumstances will the Committeeconsider an increase in excess of the general rate of wage inflation for the United States.Where such an increase has been awarded,the Committee will publish the reasonsbehind its decision in the Remuneration Committee report.In addition to basic salary,eac

167、h executive director is entitled to the following mainbenefits:up to 20 days holiday per annum;coverage under the Companys health insurance plans or a cash payment to coverthe directors cost of acquiring medical insurance;andcoverage under the Companys long-term and short-term disability and group t

168、ermlife insurance plans.Annual bonusAnnual bonuses are payable to each executive director based on achievement offinancial,strategic and sustainability objectives,both corporate and personal.For 2007,the directors had bonus potential of between 25%and 67%of their basic salaries:for2008,the figures a

169、re between 40%and 62%.This ensures that there is a significantelement of“at risk”pay,which is only available when good results are achieved.Plant Health Care plc.21Remuneration Committee reportc o n t i n u e d.Long-term share-based incentivesEach of the executive directors is eligible to participat

170、e in the Companys share optionschemes and long-term incentive stock award plan.The Company may award optionsand shares under these plans up to the greater of 3%of its issued share capital or suchnumber as,when aggregated with any outstanding options converted from the PlantHealth Care,Inc.option pla

171、ns described below,amounts to no more than 10%of theissued share capital of the Company.The main features of these plans are:(a)Share option schemesPrior to the formation of Plant Health Care plc,the then executive directors participated inthe Plant Health Care,Inc.Incentive Stock Option plans.Under

172、 these plans,options wereperiodically awarded at the discretion of the board of directors of that company.Theseplans were effectively frozen at the time of admission to AIM.Outstanding options in PlantHealth Care,Inc.were converted into options in Plant Health Care plc bearing the samerights mutatis

173、 mutandis as under the Plant Health Care,Inc.scheme.No further awards ofoptions will be made under the Plant Health Care,Inc.plans.In July 2004,the Board of directors adopted the Plant Health Care plc Unapproved ShareOption Scheme 2004.Under this scheme,the Board may grant options at an exercisepric

174、e of not less than the market value of a share on the date of award.Options maynormally be exercised between three and ten years from grant.In most cases,vesting isalso dependent upon the Companys total shareholder return exceeding that of the AIMAll-Share Index for the period from grant to vesting.

175、(b)Long-term incentive stock award planOn 8 June 2007,the Company adopted the Plant Health Care plc 2007 Long TermIncentive Plan(the“LTIP”).The main features of the plan are:all employees of the Company and its subsidiaries are eligible to participate in theLTIP.The Remuneration Committee shall sele

176、ct the employees to receive awards andshall determine the number of ordinary shares subject to a particular award;the grantee must pay at least the nominal value per share to receive the stock award;the Remuneration Committee will determine the period of vesting for any given stockaward.Vesting of a

177、ny stock award will be contingent on the fulfilment ofchallenging performance criteria set by the Committee.The Committee mayaccelerate the vesting or amend or relax performance conditions,to the extent thatconditions which are amended or relaxed will be no more or less difficult to satisfythan when

178、 they were originally imposed;if a grantee terminates employment for any reason prior to vesting of all or a portionof a stock award,the unvested portion must be returned to the Company;andthe LTIP automatically terminates ten years from its effective date of 8 June 2007,unless terminated earlier by

179、 the Company or extended by the Company with theapproval of the shareholders.Plant Health Care plc.22Remuneration Committee reportc o n t i n u e d.Pension contributionsEach of the executive directors is entitled to participate in the Plant Health Care,Inc.401(k)Plan.This is a defined contribution p

180、ension plan approved by the US Internal RevenueService.The main features of the plan are:participation is open to all US-based employees who have completed aprobationary period after initial employment;employees may contribute a percentage of salary to the plan through a payrollwithholding scheme;th

181、e Company contributes an amount up to 3%of compensation,at the discretion ofthe Board,for all employees eligible to participate;vesting of Company contributions is 20%after two years of service,with furthervesting in 20%annual increments until vesting is complete;andthe plan is subject to various st

182、atutory non-discrimination tests to ensure that it doesnot favour highly-compensated employees.Post-employment health benefitsJohn Bradys service contract includes a benefit for payment of health benefits during hislifetime,unless he is terminated by the Company for cause,subject to limitations on t

183、heannual cost as set forth in the contract.Elements ofremuneration non-executive directorsThe remuneration for non-executive directors consists solely of fees for their services inconnection with the Board and Board committees.Sam Wauchope receives 100%of hisfees in cash.The other non-executive dire

184、ctors,including the Chairman,have to31 December 2007 received 50%of their fees in cash and 50%in the form of theCompanys ordinary shares.Commencing 1 January 2008,Robert Chanson will alsoreceive 100%of his fees in cash.Prior to the creation of Plant Health Care plc,the then non-executive directors p

185、articipatedin the Plant Health Care,Inc.Incentive Stock Option plans described above.AlbertFischer,Robert Chanson and Thomas Isler hold such options(now converted to optionsover shares in Plant Health Care plc).No options have been granted to non-executivessince the formation of Plant Health Care pl

186、c and no further options will be grantedto non-executives.Service contractsThe Company has service contracts with all executive and non-executive directors.Provisions included in the service contracts include:For executive directors:termination may be initiated by either party with a notice period o

187、f 12 months;if the Company terminates other than for cause,the individual is entitled to apayment equal to 12 months monthly base salary plus a payment equal to salary tothe effective date of termination,payment for accrued but unused vacation,andpro rata cash bonus for the year to date(if targets a

188、re being met);andPlant Health Care plc.23Remuneration Committee reportc o n t i n u e d.in the event of termination for cause,the individual would receive only base salarythrough the date of termination and accrued vacation pay.“For cause”includesfraud or felonious conduct;embezzlement or misappropr

189、iation of Company fundsor property;refusal,misconduct in or disregard of the performance of theindividuals duties and obligations;abandonment or voluntary resignation;death,retirement or permanent disability.For non-executive directors:termination is on not less than one months written notice;anddir

190、ectors may be terminated with immediate effect for serious breach or repeated orcontinued material breach of any obligations to the Company;any act of dishonestor serious misconduct or conduct which tends to bring the director or the Companyinto disrepute;or a declaration of bankruptcy.In addition t

191、o the above,the Companys articles of association require that at leastone-third of the directors retire by rotation at each annual general meeting.Such retiringdirectors are eligible for re-election.Outside appointmentsThe committee believes that there are significant benefits,to both the Company an

192、d theindividual,from executive directors accepting non-executive directorships of outsidecompanies.The committee will consider up to one external appointment,for which adirector may retain some or all of the fee.John Brady is a non-executive director of OrganicBouquet Inc.and Organic Style Limited(t

193、wo connected companies regarded by theCommittee as a single appointment for this purpose),and is permitted to retain a maximumof$25,000 of the fee received,the balance(if any)being remitted to the Company.DirectorsremunerationThe remuneration of the individual directors who served during the year,fo

194、r the period forwhich they were directors,was as follows:Base salaryand feesPerformance-relatedbonusOthershort-termbenefitsCompensationfor lossof officeTotal2007Total2006$000s$000s$000s$000s$000s$000sExecutive:J Brady2812005486252W Bratkowski*631510145233130D Marx142307179153Non-executive:A Fischer7

195、67665R Chanson555556T Isler555551S Wauchope707060742245221451,154767*Appointed 3 March 2006;resigned 16 May 2007In 2007,the Company accrued a contribution to the 401(k)Plan of 1.5%of eligiblecompensation.In 2007,pension expense for the executive directors was$8,000(2006:nil)and post-employment healt

196、h benefits for John Brady were$23,000(2006:nil).Plant Health Care plc.24Remuneration Committee reportc o n t i n u e d.With effect from 1 April 2007,the Committee recommended and the Board approved anincrease in the base salary of John Brady to$300,000,and increased his bonus potentialto an annual$2

197、00,000.This exceptional increase reflects the Boards view of theoutstanding performance of John Brady in developing the Company to its current position,and acknowledges also the value that the market would place on those achievements.Stephen Weaver joined the Board as Finance Director on 28 March 20

198、08.He has abase salary of$200,000 and annual bonus potential of up to 40%of base salary.Directors share-basedincentivesMovements in yearOn 30 January 2007,John Brady exercised 300,000 options at 37 pence from optionsexercisable until 20 August 2011.On the same date,Don Marx exercised all of hisoptio

199、ns,comprising 715,761 options at 37 pence and 34,237 options at 71 pence.The share price at the close of the day on which the options were exercised was233.5 pence.Upon the resignation of Walter Bratkowski on 16 May 2007,200,000 optionsgranted to him,which had not vested,were forfeited.On 1 July 200

200、7,John Brady was awarded 300,000 ordinary shares under the LTIP.Thestock award will vest,subject to certain performance and service conditions,in three equaltranches following the announcement of the Companys final results for the years ended31 December 2007,2008 and 2009.With regard to the 100,000

201、shares,the vesting of which was dependent upon theachievement of 2007 performance targets,the Committee has determined that 20,000of such shares will vest,the balance being forfeited.These shares will be allotted toJohn Brady after the announcement of the Companys final results for 2007.On 20 July 2

202、007,Don Marx,as personal representative of the Estate of Selina Marx,exercised options over 3,470 shares at 73.5 pence.The share price at the close of theday on which the options were exercised was 281 pence.On 4 October 2007,Stephen Weaver(then Chief Financial Officer)was awarded100,000 ordinary sh

203、ares under the LTIP.The stock award will vest,subject to certainperformance and service conditions,following the announcement of the Companys finalresults for the year ended 31 December 2009.There were no movements in the directors share-based incentives in 2006.Further information related to shares

204、 issued to directors during the year is detailed innote 21 to the financial statements.Plant Health Care plc.25Remuneration Committee reportc o n t i n u e d.Interests in share-based incentives(a)OptionsThe interests of the directors in share options over the ordinary shares of the Company at31 Dece

205、mber 2007,all of which are exercisable now,are set out in the following table.No ofoptionsExercisepriceExpiry dateA Fischer37,5000.3718 November 201137,5000.3718 November 201237,5000.371 March 201475,0000.7423 March 201437,5000.3715 June 2014J Brady225,0000.3720 August 2011918,9750.374 March 201456,

206、0250.714 March 2014R Chanson37,5000.3718 November 201137,5000.3718 November 201237,5000.371 March 201460,0000.7423 March 201437,5000.3715 June 2014T Isler37,5000.3718 November 201137,5000.3718 November 201237,5000.371 March 201452,5000.7423 March 201437,5000.3715 June 20141,837,500There were no move

207、ments in the above holdings from 1 January 2008 to the dateof this report.(b)LTIPAs described above,on 1 July 2007 John Brady was awarded 300,000 sharesunder the LTIP and on 4 October 2007 Stephen Weaver was awarded 100,000 sharesunder the LTIP.As described above,following the announcement of the Co

208、mpanys final results for2007,20,000 share awards will vest and 80,000 share awards will be forfeited,from the first tranche of LTIP awards granted to John Brady.(c)Other informationDuring the year,the Companys share price on AIM ranged between 169.5 penceand 289 pence.At 31 December 2007,the share p

209、rice was 271 pence,and at27 March 2008,the last working day prior to the approval of this Annual Report,theshare price was 247.5 pence.Plant Health Care plc.26Report of the directorsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.The directors present their report together with the audited

210、 financial statements for theyear ended 31 December 2007.Results and dividendsThe results of the Group for the year are set out on page 33 and show a loss for the yearof$5,413,000(2006:loss of$2,998,000).The directors recommend that no dividend be paid at this time.Principal activities,review of bus

211、iness andfuture developmentsDetails of the Groups principal activities and a review of business and futuredevelopments are included in the Chairmans statement and Chief Executives reporton pages 8 to 13.DirectorsThe directors of the Company at the end of the year and their beneficial interests in th

212、eordinary share capital of the Company,options to purchase ordinary shares of theCompany and LTIP share awards were as follows.At 31 December 2007At 1 January 2007SharesOptionsLTIPSharesOptionsA Fischer151,092225,000138,628225,000J Brady 1,200,000300,000 1,500,000D Marx432,283578,815753,468R Chanson

213、135,166210,000135,166210,000T Isler406,654202,500397,777202,500S Wauchope52,23250,000Walter Bratkowski resigned as a director on 16 May 2007.On 28 March 2008,Stephen Weaver was appointed to the Board of Directors asFinance Director.On the same date,Donald Marx and Robert Chanson announcedthat they w

214、ill not be seeking re-election at the forthcoming annual general meeting on6 June 2008 and will leave the Board as of that date.Further details of the directors share options are shown in the Remuneration Committeereport on pages 24 and 25.None of the directors has any holding in any subsidiary comp

215、any,nor any material interestin the transactions of the Group.SubstantialshareholdersOn 27 March 2008,the Company had been notified of the following holdingsrepresenting in excess of 3%of the Companys ordinary shares:NameSharesheldPercentage ofissued sharecapitalPictet Asset Management S.A.4,350,900

216、10.34Gartmore Investment Limited3,983,8209.47Universities Superannuation Scheme Limited2,552,5006.08Aviva plc and its subsidiaries2,328,4815.27Branco Weiss2,196,9545.24Funds managed by AXA SA for Framlington HSBC2,125,9955.05Credit Suisse1,377,4323.11Plant Health Care plc.27Report of the directorsf

217、o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.Research anddevelopmentThe Group continues to invest in research and development activities with an emphasis onthe commercialisation of existing technologies and formulation of products to meet specificcustomer needs.Business reviewFor a discus

218、sion of the Groups 2007 performance against its key performance indicators,see the Chairmans statement and Chief Executives report on pages 8 to 13.Key performance indicators(“KPIs”):The Group uses a range of performance measures to monitor and manage the businesseffectively.The most significant of

219、these relate to financial performance and to the Groupsprogress in proving and exploiting its key natural technologies.KPIs for financial performance include turnover,gross profit margin,and earnings beforeinterest and tax.These KPIs indicate the volume of work the Group has undertaken,as wellas the

220、 efficiency and profitability with which this work has been delivered.KPIs for the Groups natural technologies include the number and nature of contractsrealised with partners,and progress along the mutually agreed paths to commerciallaunch of products.Principal risks and uncertaintiesThere are a nu

221、mber of potential risks and uncertainties which have been identified withinthe business which could have a material impact on the Groups longer-term performance.These can be summarised as:the Group is dependent on a small management team;technology and commercialisation risks associated with the Gro

222、ups proprietaryproducts and its technology partners must be monitored,developed and modifiedas conditions require;andthe Group does not currently generate sufficient cash from operations to meet itsannual funding needs.In the past,this has required the Group to raise cash from itsshareholders.Over t

223、he longer term,this requires the Group to become profitableand cash generating.Financial instruments:The Group uses various financial instruments,including loans,equity offerings,cash anditems such as trade debtors and trade creditors that arise directly from its operations.Themain purpose of these

224、financial instruments is to raise finance for the Groups operations.The existence of these financial instruments exposes the Group to a number of financialrisks,which are described in more detail below.The main risks arising from the Groupsfinancial instruments are currency risk,credit risk,interest

225、 rate risk and liquidity risk.Thedirectors review and agree policies for managing each of these risks and they aresummarised below.These policies have remained unchanged from previous years.Currency riskThe Group has a minimal exposure to translation and transaction foreign exchange risk.This is ach

226、ieved by maintaining the vast majority of the Groups cash in US dollars,which isthe Groups functional currency.Plant Health Care plc.28Report of the directorsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.Credit riskThe Groups principal credit risk relates to the recovery of amounts owed

227、by trade debtors.In order to manage credit risk,the Group sets limits for customers based on a combinationof payment history and third-party credit references.Credit limits are reviewed on a regularbasis in conjunction with debt ageing and collection history.Balances that are beyondagreed upon terms

228、 are actively followed up to ensure collection.Interest rate riskThe Groups external borrowings bear interest at a rate which may be a combination offixed and variable elements.The Group seeks the lowest market rate available.Liquidity riskLiquidity risk arises from the Groups management of working

229、capital and,moreparticularly,its ability to reach a point where its trading is cash generative,together withthe finance charges and principal repayments on its debt instruments.It is the risk that theGroup will encounter difficulties in meeting its financial obligations as they fall due.Current and

230、projected working capital demand is reviewed in conjunction with existingfinancing facilities to determine cash requirements on an on-going basis.Further information related to financial instruments is detailed in Note 19 to thefinancial statements.Payment of creditorsThe Company follows the practic

231、es customary in the various geographic areas in which itoperates.Terms of payment are established with suppliers when agreeing the terms ofeach transaction.As of 31 December 2007,creditor days outstanding stood at 51(2006:68).Charitable and politicalcontributionsDuring the year,the Group made the fo

232、llowing contributions:2007$2006$Charitable1,0003,000Board meetings andattendanceThe following table shows the attendance of directors at meetings of the Board and Auditand Remuneration Committees held during the 2007 financial year.BoardAuditCommitteeRemunerationCommitteeNumber of meetings held12412

233、A Fischer1212J Brady12D Marx11R Chanson1112T Isler12412S Wauchope11412W Bratkowski*4*Resigned as a director on 16 May 2007Plant Health Care plc.29Report of the directorsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.Capital raisingOn 26 September 2007,the Company raised 4,993,240(before e

234、xpenses)by wayof a placing of 2,098,000 new ordinary shares at a price of 238 pence per share.Post balance sheeteventsThere are no post balance sheet events to report.AuditorsAll of the current directors have taken all the steps that they ought to have taken to makethemselves aware of any informatio

235、n needed by the Companys auditors for the purposesof their audit and to ensure that the auditors are aware of that information.The directors arenot aware of any relevant audit information of which the auditors are unaware.Annual generalmeetingAt the forthcoming annual general meeting of the Company,

236、resolutions will be putforward to elect Stephen Weaver,who was appointed to the Board since the last annualgeneral meeting and to re-appoint BDO Stoy Hayward LLP as auditors to the Company.By Order of the BoardAndrew C.Wood FCISCompany Secretary28 March 2008Plant Health Care plc.30Statement of direc

237、tors responsibilities.The directors are responsible for keeping proper accounting records which disclose withreasonable accuracy at any time the financial position of the Group,for safeguarding theassets of the Company,for taking reasonable steps for the prevention and detection offraud and other ir

238、regularities and for the preparation of a directors report which complieswith the requirements of the Companies Act 1985.The directors are responsible for preparing the annual report and the financial statementsin accordance with the Companies Act 1985.The directors are also required to preparefinan

239、cial statements for the Group in accordance with International Financial ReportingStandards as adopted by the European Union(IFRSs)and the rules of the London StockExchange for companies trading securities on the Alternative Investment Market.Thedirectors have chosen to prepare financial statements

240、for the Company in accordancewith UK Generally Accepted Accounting Practice.Group financialstatementsInternational Accounting Standard 1 requires that financial statements present fairly foreach financial year the Groups financial position,financial performance and cash flows.This requires the faith

241、ful representation of the effects of transactions,other events andconditions in accordance with the definitions and recognition criteria for assets,liabilities,income and expenses set out in the International Accounting Standards BoardsFramework for the preparation and presentation of financial stat

242、ements.In virtually allcircumstances,a fair presentation will be achieved by compliance with all applicableIFRSs.A fair presentation also requires the directors to:consistently select and apply appropriate accounting policies;present information,including accounting policies,in a manner that provide

243、srelevant,reliable,comparable and understandable information;andprovide additional disclosures when compliance with the specific requirements inIFRSs is insufficient to enable users to understand the impact of particulartransactions,other events and conditions on the entitys financial position andfi

244、nancial performance.Parent companyfinancial statementsCompany law requires the directors to prepare financial statements for each financial yearwhich give a true and fair view of the state of affairs of the Company and of the profit or lossof the Company for that period.In preparing these financial

245、statements,the directors arerequired to:select suitable accounting policies and then apply them consistently;prepare the financial statements on the going concern basis,unless it isinappropriate to presume that the Company will continue in business;make judgments and estimates that are reasonable an

246、d prudent;andstate whether applicable accounting standards have been followed,subject to anymaterial departures disclosed and explained in the financial statements.Financial statements are published on the Groups website in accordance with legislationin the United Kingdom governing the preparation a

247、nd dissemination of financialstatements,which may vary from legislation in other jurisdictions.The maintenanceand integrity of the Groups website is the responsibility of the directors.Thedirectors responsibility also extends to the ongoing integrity of the financial statementscontained therein.Plan

248、t Health Care plc.31Independent auditors report.To the shareholders ofPlant Health Care plcWe have audited the Group and parent company financial statements(the“financialstatements”)of Plant Health Care plc for the year ended 31 December 2007 whichcomprise the consolidated income statement,the conso

249、lidated statement of recognisedincome and expense,the consolidated and individual company balance sheets,theconsolidated cash flow statement and the related notes.These financial statements havebeen prepared under the accounting policies set out therein.Respectiveresponsibilities ofdirectors and aud

250、itorsThe directors responsibilities for preparing the annual report,the directors remunerationreport,the Group financial statements in accordance with applicable law andInternational Financial Reporting Standards(IFRSs)as adopted by the European Unionand for preparing the parent company financial st

251、atements in accordance with applicablelaw and United Kingdom Accounting Standards(United Kingdom Generally AcceptedAccounting Practice)are set out in the Statement of directors responsibilities.Our responsibility is to audit the financial statements in accordance with relevant legal andregulatory re

252、quirements and International Standards on Auditing(UK and Ireland).We report to you our opinion as to whether the financial statements give a true and fairview and have been properly prepared in accordance with the Companies Act 1985and whether the information given in the directors report is consis

253、tent with those financialstatements.We also report to you if,in our opinion,the Company has not kept properaccounting records,if we have not received all the information and explanations werequire for our audit,or if information specified by law regarding directors remunerationand other transactions

254、 is not disclosed.We read other information contained in the annual report and consider whether it isconsistent with the audited financial statements.The other information comprises only theHighlights,Chairmans statement,Chief Executives report,Directors,Board committees,Corporate governance stateme

255、nt,Remuneration Committee report and the Report of thedirectors.We consider the implications for our report if we become aware of anyapparent misstatements or material inconsistencies with the financial statements.Ourresponsibilities do not extend to any other information.Our report has been prepare

256、d pursuant to the requirements of the Companies Act 1985and for no other purpose.No person is entitled to rely on this report unless such a person isa person entitled to rely upon this report by virtue of and for the purpose of the CompaniesAct 1985 or has been expressly authorised to do so by our p

257、rior written consent.Save asabove,we do not accept responsibility for this report to any other person or for any otherpurpose and we hereby expressly disclaim any and all such liability.Basis of audit opinionWe conducted our audit in accordance with International Standards on Auditing(UK andIreland)

258、issued by the Auditing Practices Board.An audit includes examination,on a testbasis,of evidence relevant to the amounts and disclosures in the financial statements.Italso includes an assessment of the significant estimates and judgments made by thedirectors in the preparation of the financial statem

259、ents,and of whether the accountingpolicies are appropriate to the Groups and Companys circumstances,consistentlyapplied and adequately disclosed.Plant Health Care plc.32Independent auditors reportc o n t i n u e d.We planned and performed our audit so as to obtain all the information and explanation

260、swhich we considered necessary in order to provide us with sufficient evidence to givereasonable assurance that the financial statements are free from material misstatement,whether caused by fraud or other irregularity or error.In forming our opinionwe also evaluated the overall adequacy of the pres

261、entation of information in thefinancial statements.OpinionIn our opinion:the Group financial statements give a true and fair view,in accordance with IFRSsas adopted by the European Union,of the state of the Groups affairs as at31 December 2007 and of its loss for the year then ended;the parent compa

262、ny financial statements give a true and fair view,in accordancewith United Kingdom Generally Accepted Accounting Practice,of the state of theparent companys affairs as at 31 December 2007;the financial statements have been properly prepared in accordance with theCompanies Act 1985;andthe information

263、 given in the directors report is consistent with the financialstatements.BDO STOY HAYWARD LLPChartered Accountantsand Registered AuditorsLondon28 March 2008Plant Health Care plc.33Consolidated income statementf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.20072006Note$000s$000sRevenue318

264、,29513,679Cost of sales(9,944)(7,565)Gross profit8,3516,114Distribution costs(4,660)(3,143)Research and development expenses(771)(306)Administrative expenses(8,161)(5,531)Operating loss4(5,241)(2,866)Finance revenue9177275Finance costs9(302)(335)Loss before tax(5,366)(2,926)Tax expense10(47)(72)Loss

265、 for the year(5,413)(2,998)Attributable to:Equity holders of the parent(5,424)(3,028)Minority interest1130(5,413)(2,998)Basic and diluted loss per share11(12.8)(8.2)In 2007 and 2006 all results derived from continuing operations.The notes on pages 37 to 68 form part of these financial statements.Pla

266、nt Health Care plc.34Consolidated statement of recognised incomeand expensef o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.20072006$000s$000sNet income recognised directly in equity:Exchange differences on translation offoreign operations130219Loss for the year(5,413)(2,998)Total recognise

267、d income and expense for the year(5,283)(2,779)Attributable to:Equity holders of the parent(5,294)(2,809)Minority interest1130(5,283)(2,779)The notes on pages 37 to 68 form part of these financial statements.Plant Health Care plc.35Consolidated balance sheeta t 3 1 D e c e m b e r 2 0 0 7.20072006No

268、te$000s$000sAssetsNon-current assetsIntangible assets124,2822,737Property,plant and equipment139281,008Total non-current assets5,2103,745Current assetsInventories142,8722,468Trade and other receivables156,7516,942Short-term investments19559436Cash and cash equivalents10,2544,446Total current assets2

269、0,43614,292Total assets25,64618,037LiabilitiesCurrent liabilitiesTrade and other payables163,6483,108Short-term borrowings17205314Provisions18546396Total current liabilities4,3993,818Non-current liabilitiesLong-term borrowings17278414Provisions18440Total non-current liabilities718414Total liabilitie

270、s5,1174,232Total net assets20,52913,805Capital and reserves attributable to equityholders of the CompanyShare capital21809731Share premium2233,45121,826Reverse acquisition reserve2211,01611,174Share-based payment reserve22580118Foreign exchange reserve22121(9)Retained earnings22(25,679)(20,255)20,29

271、813,585Minority interests22231220Total equity20,52913,805The financial statements were approved and authorised for issue by the Board on28 March 2008.J BradyDirectorThe notes on pages 37 to 68 form part of these financial statements.Plant Health Care plc.36Consolidated cash flow statementf o r t h e

272、 y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.20072006Note$000s$000sCash flows from operating activitiesLoss before tax(5,366)(2,926)Adjustments for:Depreciation12262248Amortisation of intangibles132422Impairment charge30Finance revenue(177)(275)Finance costs302335Share-based payment expense46268(G

273、ain)/loss on sale of fixed assets(5)10Cash used in operating activities beforechanges in working capital and provisions(4,280)(2,508)Decrease/(increase)in trade and otherreceivables208(3,952)Decrease/(increase)in inventories436(887)Increase in trade and other payables836387(Decrease)/increase in pro

274、visions(121)396Cash used in operations(2,921)(6,564)Interest paid(287)(322)Income taxes paid(74)(79)Net cash flows used in operating activities(3,282)(6,965)Investing activitiesPurchase of business net assets25(2,446)Purchase of tangible fixed assets(136)(396)Expenditure on internally-developed inta

275、ngible assets12(53)Proceeds on sale of assets held for sale675Proceeds on sale of fixed assets2120Interest received177275Purchase of short-term investments(123)(184)Net cash used in investing activities(1,885)(285)Financing activitiesIssuing of ordinary share capital10,18211,053Exercise of options a

276、nd warrants1,36564Repayment of borrowings(367)(180)Repurchase of minority interests shares bysubsidiary(160)(119)Net cash generated from financing activities11,02010,818Effects of exchange rate changes on cash andcash equivalents(45)(16)Net increase in cash and cash equivalents5,8083,552Cash and cas

277、h equivalents at beginning of period4,446894Cash and cash equivalents at end of period10,2544,446The notes on pages 37 to 68 form part of these financial statements.Plant Health Care plc.37Notes forming part of the Group financial statementsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7.1

278、.Accounting policiesReporting currencyThe financial statements are reported in US dollars.The directors believe that it isappropriate to use US dollars as a currency for reporting,given that the majority of theGroups operations are denominated in that currency.Basis of preparationThis is the first t

279、ime the Group has prepared its financial statements in accordance withInternational Financial Reporting Standards(IFRS)as adopted by the European Union,having previously prepared its financial statements in accordance with UK GAAPaccounting standards.Details of how the transition from UK accounting

280、standards toEU-adopted IFRS has affected the Groups reported financial position,financialperformance and cash flows are given in note 28.Changes in accounting policies First-time adoption of International Financial ReportingStandardsIn preparing these financial statements,the Group has elected to ap

281、ply the followingtransitional arrangements permitted by IFRS 1 First-time Adoption of International FinancialReporting Standards:business combinations effected before 1 January 2006 have not been restated;the carrying amount of capitalised goodwill at 31 December 2005 that arose onbusiness combinati

282、ons accounted for using the acquisition method under UK GAAPwas frozen at this amount and tested for impairment at 1 January 2006;andIFRS 2 Share-based payment has been applied to employee options granted after7 November 2002 that had not vested by 1 January 2006.The Group has made estimates under I

283、FRSs at the date of transition;these were consistentwith those estimates made at the same date under UK GAAP,there being no objectiveevidence that those estimates were in error;that is,the Group has not reflected any newinformation in its opening IFRS balance sheet,but reflected that new information

284、,if any,in its income statement for subsequent periods.Basis of consolidationOn 6 July 2004,Plant Health Care plc became the legal parent company of Plant HealthCare,Inc.in a share-for-share transaction.The former shareholders of Plant Health Care,Inc.became the majority shareholders of Plant Health

285、 Care plc.Further,the continuingoperations and executive management of Plant Health Care plc were those of Plant HealthCare,Inc.Accordingly,the substance of the combination was that Plant Health Care,Inc.acquired Plant Health Care plc in a reverse acquisition.In order to present a true andfair view,

286、the directors have adopted reverse acquisition accounting as the basisof consolidation.Business combinationsThe consolidated financial statements incorporate the results of business combinationsusing the purchase method.In the consolidated balance sheet,the acquirees identifiableassets,liabilities a

287、nd contingent liabilities are initially recognised at their fair values at theacquisition date.The results of acquired operations are included in the consolidatedincome statement from the date on which control is obtained.Plant Health Care plc.38Notes forming part of the Group financial statementsf

288、o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7 c o n t i n u e d.1.Accounting policiescontinuedRevenueRevenue is comprised of sales of goods to external customers,revenues from servicecontracts and fee income.Sales of goods to external customers are at invoiced amountless value added tax or

289、 local taxes on sales and are recognised at the point that thecustomer takes legal title to the goods sold.Revenue from service contracts is recognisedas the services are performed and revenue is earned and billed over the term of thecontract.Fee income is recognised when the Company has no remainin

290、g obligations toperform under a non-cancellable contract which permits the user to act freely under theterms of the agreement.Exceptional itemsExceptional items are those that in managements judgment need to be disclosed by virtueof their size or incidence.Such items are included within the income s

291、tatement caption towhich they relate,and are separately disclosed either in the notes to the consolidatedfinancial statements or on the face of the consolidated income statement.GoodwillGoodwill is measured as the excess of the cost of the acquisition over the net fair valueof the identifiable asset

292、s,liabilities and contingent liabilities,plus any direct costsof acquisition.Goodwill is capitalised as an intangible asset with any impairment in carrying value beingcharged to the consolidated income statement.Where the fair value of identifiable assets,liabilities and contingent liabilities excee

293、ds the fair value of consideration paid,the excessis credited in full to the consolidated income statement on the acquisition date.At the date of transition to IFRS,1 January 2006,the goodwill carrying amount under UKGAAP was tested for impairment and,based on the conditions existing at the transiti

294、ondate,no impairment was identified.Thus,the carrying amount of goodwill in theCompanys IFRS opening balance sheet was equal to the goodwill carrying amount underUK GAAP.From the date of transition to IFRS,the Company discontinued the amortisationof goodwill and implemented annual impairment tests f

295、or goodwill.Other intangible assetsExternally-acquired intangible assets are initially recognised at cost and subsequentlyamortised on a straight-line basis over their useful economic lives.The amortisationexpense is included within the administrative expenses line in the consolidatedincome statemen

296、t.Intangible assets are recognised on business combinations if they are separable from theacquired entity or give rise to other contractual or legal rights.The amounts ascribed tosuch intangibles are arrived at by using appropriate valuation techniques.Expenditures on internally-developed intangible

297、 assets(research and development costs)are capitalised if it can be demonstrated that:Plant Health Care plc.39Notes forming part of the Group financial statementsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7 c o n t i n u e d.1.Accounting policiescontinuedit is technically feasible to de

298、velop the product for it to be sold;adequate resources are available to complete the development;there is an intention to complete and sell the product;the Group is able to sell the product;sale of the product will generate future economic benefits;andexpenditure on the project can be measured relia

299、bly.Capitalised development costs are amortised over the periods of the future economicbenefit attributable to the asset.The amortisation expense is included within administrativeexpenses in the consolidated income statement.Development expenditure not satisfying the above criteria and expenditure o

300、n theresearch phase of internal projects are recognised in the consolidated income statementas incurred.The significant intangibles recognised by the Group and their estimated useful economiclives are as follows:Licenses12 yearsDeveloped technology15 yearsTrade name and customer relationships15 year

301、sRegistrations5-10 yearsImpairment of goodwill and other intangible assetsImpairment tests on goodwill and other intangible assets with indefinite useful economiclives are undertaken annually at the financial year end.Other non-financial assets aresubject to impairment tests whenever events or chang

302、es in circumstances indicate that theircarrying amount may not be recoverable.Where the carrying value of an asset exceeds itsrecoverable amount(that is the higher of value in use and fair value less costs to sell),theasset is written down accordingly.Impairment charges are included in the administr

303、ative expenses line item in theconsolidated income statement,except to the extent they reverse gains previouslyrecognised in the consolidated statement of recognised income and expense.Animpairment loss recognised for goodwill is not reversed.Foreign currencyForeign currency transactions of individu

304、al companies are translated at the rates rulingwhen they occurred.Foreign currency monetary assets and liabilities are translated at therate of exchange ruling at the balance sheet date.Any differences are taken tothe consolidated income statement.On consolidation,the results of non-US operations ar

305、e translated into US dollars at ratesapproximating to those ruling when the transactions took place.Balance sheets aretranslated at the rate ruling at the balance sheet date.Exchange differences arising ontranslating the opening net assets at opening rate and the results of non-US operations atactua

306、l rate are recognised directly in equity(the foreign exchange reserve).Plant Health Care plc.40Notes forming part of the Group financial statementsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7 c o n t i n u e d.1.Accounting policiescontinuedFinancial instrumentsTrade receivables are init

307、ially recognised at fair value,and are subsequently carried atamortised cost using the effective interest rate method,less provision for impairment.Short-term investments comprise interest bearing cash held on deposit and short-terminvestments maturing in less than one year at fixed rates of interes

308、t.Cash and cash equivalents comprise cash on hand and demand deposits,and othershort-term highly liquid investments that are readily convertible to a known amount of cashand are subject to insignificant risk of changes in value.Bank borrowings are initially recognised at fair value net of any transa

309、ction costs directlyattributable to the instrument.Borrowings are subsequently measured at amortised costusing the effective interest rate method,which ensures that interest expense over theperiod to repayment is at a constant rate on the balance of the liability carried in thebalance sheet.Trade an

310、d other payables are initially recognised at fair value and subsequently carried atamortised cost using the effective interest method.The Group does not trade in derivative financial instruments.Equity instruments issued by the Company are recorded at the proceeds received,net ofdirect issue costs.E

311、mployee benefitsThe Group maintains a number of defined contribution pension schemes for certainof its employees;the Group does not contribute to any defined benefit pension schemes.The amount charged to the consolidated income statement represents the employercontributions payable to the schemes fo

312、r the financial period.The expected costs of all short-term employee benefits,including short-term compensatedabsences,are recognised during the period the employee service is rendered.Equity share-based paymentsShare-based payments issued to employees include share options and stock awardsunder a l

313、ong-term incentive plan.Equity-settled share-based payments are measured at fairvalue(excluding the effect of non-market-based vesting conditions)at the date of grant.Thefair value determined at the date of grant is recognised as an expense with acorresponding increase in equity on a straight-line b

314、asis over the vesting period,based onthe Companys estimate of the shares that will eventually vest and adjusted for the effect ofnon-market-based vesting conditions.Where equity instruments are granted to persons other than employees,the consolidatedincome statement is charged with the fair value of

315、 goods and services received.The fair value of equity instruments is calculated using the binomial option pricing model.Leased assetsWhere assets are financed by leasing agreements that give rights approximating toownership(finance leases),the assets are treated as if they had been purchased outrigh

316、t.The amount capitalised is the present value of the minimum lease payments payable overthe term of the lease.The corresponding lease commitments are shown as amountspayable to the lessor.Depreciation on the relevant assets is charged to the consolidatedincome statement.Plant Health Care plc.41Notes

317、 forming part of the Group financial statementsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7 c o n t i n u e d.1.Accounting policiescontinuedLease payments are analysed between capital and interest components.The interestelement of the payment is charged to the consolidated income statem

318、ent over the period ofthe lease and is calculated so that it represents a constant proportion of the balances ofcapital repayments outstanding.The capital element reduces the amounts payable to thelessor.All other leases are treated as operating leases.Their annual rentals are charged to theconsolid

319、ated income statement.Property,plant and equipmentItems of property,plant and equipment are initially recognised at cost.Cost includes thepurchase price and costs directly attributable to bringing the asset into operation.Depreciation is provided to write off the cost,less estimated residual values,

320、of all tangiblefixed assets over their expected useful lives.It is calculated at the following rates:Leasehold improvementsover length of leaseProduction machinery10 20%per annumOffice equipment20 33%per annumVehicles20%per annumInventoriesInventories are initially recognised at cost,and subsequentl

321、y at the lower of cost and netrealisable value.Cost comprises all costs of purchase,costs of conversion and other costsincurred in bringing inventories to their present location and condition.Deferred taxDeferred tax assets and liabilities are recognised where the carrying amount of an asset orliabi

322、lity in the balance sheet differs from its tax base,except for differences on:the initial recognition of goodwill;the initial recognition of an asset or liability in a transaction which is not a businesscombination and at the time of the transaction affects neither accounting or taxableprofit;andinv

323、estments in subsidiaries and jointly controlled entities where the Group is able tocontrol the timing of the reversal of the difference and it is probable that thedifference will not reverse in the foreseeable future.Recognition of deferred tax assets is restricted to those instances where it is pro

324、bable thattaxable profit will be available against which the difference can be utilised.The amount of the asset or liability is determined using tax rates that have been enacted orsubstantively enacted by the balance sheet date and are expected to apply when thedeferred tax liabilities/(assets)are s

325、ettled/(recovered).Deferred tax assets and liabilities are offset when the Group has a legally enforceable rightto offset current tax assets and liabilities and when they relate to income taxes levied by thesame tax authority and the Group intends to settle its current tax assets and liabilities ona

326、 net basis.Plant Health Care plc.42Notes forming part of the Group financial statementsf o r t h e y e a r e n d e d 3 1 D e c e m b e r 2 0 0 7 c o n t i n u e d.1.Accounting policiescontinuedProvisionsProvisions are recognised for liabilities of uncertain timing or amount that have arisen as aresu

327、lt of past transactions and are discounted at a pre-tax rate reflecting current marketassessments of the time value of money and the risks specific to the liability.Standards and interpretations not yet appliedAt the date of authorisation of these financial statements,the following Standards andInte

328、rpretations,which have not been applied in these financial statements,were in issuebut not yet effective:IFRS 8Operating SegmentsIFRIC 11IFRS 2 Group and Treasury Share TransactionsIFRIC 12Service Concession ArrangementsIFRIC 13Customer Loyalty ProgrammesIFRIC 14IAS 19 The Limit on a Defined Benefit

329、 Asset,Minimum FundingRequirements and their InteractionIFRIC 11 requires share-based payment transactions in which an entity receives services asconsideration for its own equity instruments to be accounted for as equity settled.Inaddition,equity instruments accounted for as equity settled share-bas

330、ed paymenttransactions that are granted by a parent to the employees of its subsidiary,are to beaccounted for in the separate financial statements of each group entity.The Companycurrently accounts for share-based payment transactions in which it receives services asconsideration for its own equity

331、instruments as equity settled at the Group level.Thestandard will only impact how that transaction is recorded by each group entity and,therefore,it is not anticipated that IFRIC 11 will have a material impact on the financialstatements of the Group.IFRS 8 affects only disclosures and,therefore,is a

332、nticipated to have no material impact onthe Group financial statements.It is anticipated that the adoption of IFRIC 12,IFRIC 13and IFRIC 14 will have no impact on the financial statements of the Group.As of the date of authorisation of these financial statements,the following amendments topublished

333、standards,which have not been applied in these financial statements,were inissue but not yet effective.Management is currently assessing the impact of theseamendments on the accounts.IFRS 2Share-based Payment(Amendment)IAS 1Presentation of Financial Statements(Amendment)IAS 1Presentation of Financial Statements-Puttable Financial Instrumentsand Obligations Arising on Liquidation(Amendment)IAS 23Bo