Plant Health Care (PHC) 2017年年度報告「LSE」.pdf

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1、LEADING THE FIELDPLANT HEALTH CARE PLCANNUAL REPORT AND ACCOUNTS 2017PLANT HEALTH CARE PLC ANNUAL REPORT AND ACCOUNTS 2017Plant Health Care is a leading provider of proprietary agricultural biological products and technology solutions focused on improving crop performance.We work in both research an

2、d development as well as commercial sales.STRATEGIC REPORT1 Highlights2 At a glance4 Our products and technologies6 Chairmans letter10 Business model and strategy12 Key performance indicators(“KPIs”)13 Principal risks and uncertainties14 Financial reviewCORPORATE GOVERNANCE17 Board of Directors18 Co

3、rporate governance report20 Audit Committee report21 Remuneration Committee report26 Directors report27 Statement of Directors responsibilitiesFINANCIAL STATEMENTS29 Independent auditors report33 Consolidated statement of comprehensive income34 Consolidated statement of financialposition35 Consolida

4、ted statement of changes inequity36 Consolidatedstatementofcashflows37 Notes forming part of the Group financialstatements59 Company statement of financialposition60 Company statement of changes inequity61 Notes forming part of the Company financialstatements64 Directors and advisersOnline report av

5、ailable at Read more on page 4 Harpin a sales growing 23%CAGR 20132017PREtec has been under evaluation byninepartnersFirst PREtec technology licenceplanned for 2018Harpin aPREtecSTRATEGIC REPORT1Plant Health Care plc Annual Report and Accounts 2017HighlightsOPERATIONALSignificant progress in moving

6、the PREtecTM(Plant Response Elicitor)technology towards the Companysfirst Technology Licence.All five of the top global agricultural/seed companies and a number of other companies are testing lead peptides from our PREtec platforms Innatus 3G,T-Rex 3G and Y-Max 3G.Four global agricultural/seed major

7、s are running field trials in Brazil of Innatus 3G added to chemicalsprays for thecontrol of Asian Soybean Rust(ASR),a devastating fungal disease of soybeans.Farmersspent US$1.7billion on soybean fungicides in 2016 in Brazil;there are increasing concerns about disease resistance and the resulting im

8、pact on yield.Exclusive rights to Innatus 3G for use in South American soybeans are expected to be licensed througha competitive licensing process in the second half of 2018.In the Companys trials,our lead peptides have shown promise for the control of ASR,especially for thecontrol of resistant dise

9、ase when used in mixture with conventional agrochemicals.Data from these ASRtrials are due in Q2 2018.PHC expanded its programme of trials in other crops.Results continued to show good performance forInnatus 3G under disease and drought stress,and for T-Rex 3G against nematodes.Y-Max 3G peptidesincr

10、eased yields even under optimal growing conditions.Discussions continue with partners about future licensing of Innatus 3G in other crops and regions andof both T-Rex 3G and Y-Max 3G.FINANCIALOn 27 February 2018,the Group successfully raised$6.7 million(net of costs)which was well supportedby existi

11、ng shareholders and brought in a number of new institutional investors.Revenue from commercial products in 2017 increased by 21%to$7.7 million(2016:$6.3 million);inconstant currency*,sales increased by 23%.Strong external sales growth in Rest of World(up 100%;107%in constant currency)was offset by w

12、eaker sales in Mexico due to low produce prices in the firsthalf of the year;sales in external North America grew 8%.Sales of core Harpin products increased by 42%(44%in constant currency),driven by broadly basedgrowth in all geographies.Harpin and Myconate products represented 69%of sales in 2017(2

13、016:59%).Harpin was launched into sugarcane in Brazil in early 2018.Initial response has been veryencouraging in this large market.Gross margin was steady at 62%.Cash,cash equivalents and investments at 31 December 2017 were$3.9 million.*We calculate constant currency percentages by converting our p

14、rior-period local currency financial results using the current period exchange rates andcomparing these adjusted amounts to our current period reported results.REVENUE($000)$7,685CASH AND INVESTMENTS($000)$3,89420177,68520173,89420166,329201610,0762Plant Health Care plc Annual Report and Accounts 20

15、17At a glanceBIOLOGICAL PRODUCTS A GROWING OPPORTUNITY$9.1bn202012%CAGR(compound annual growth rate)$5.7bn2016BIOLOGICALS:AN EMERGING MARKET(global demand for biologicals)Source:Dunham Trimmer.COMPARED TO CONVENTIONAL AGROCHEMICALS,BIOLOGICALS ARE:less toxic products which do not contaminate soils o

16、rtheenvironment;safer for farmers to handle;and promote sustainable agriculture.In addition to these advantages,biologicals such as Plant Health Cares products can promote more efficient agriculture through:protecting plants from stress such as drought;helping plants to resist disease;and increasing

17、 resistance to soil pests.As a result of these advantages,regulatory authorities around the world are adopting accelerated regulations,which allow biological products to come to market more quickly than conventional agrochemicals.Inaddition,biological products tend to cost farless to develop than co

18、nventional agrochemicals.The demand for biological products is increasing rapidly as a result.Farmers confront many challenges in providing food for a rapidly growing and more prosperous world.These challenges include reducing the use of toxic agrochemical products.Biological products are becoming a

19、n increasingly important part of the solution because of the benefits they offer.HOW THEY WORKPlant Health Care products can be applied both to the leaves of plants(foliar applications)and to the seeds(seed treatment).Protection from stress such asdrought.Protection from disease and promotion of gro

20、wth.Protection against soil pests.ROW CROPSSPECIALTY CROPSSTRATEGIC REPORT3Plant Health Care plc Annual Report and Accounts 2017Plant Health Cares Commercial business is driven by sales ofHarpin,a recombinant protein which acts as a powerful biostimulant,promoting the yield and quality of crops.Sale

21、s are growing at more than 20%per annum.The Company sells the proprietary soil treatment Myconate in selected countries.The Company sells Harpin and Myconate through specialist distributors around the world.In Mexico,the Company also distributes third-party biological products.COMMERCIALPlant Health

22、 Cares New Technology is focused on PREtec plant response elicitors.These are peptides(short chains of amino acids)which stimulate plants to increase yield and resist disease.The Company intends to license PREtec platforms to large companies which willdevelop and commercialise them.The Company has s

23、o far launched three platforms of PREtec,which have been under evaluation bynine potential licence partners.NEW TECHNOLOGYWHERE BIOLOGICALS WORKPLANT HEALTH CARE IS A LEADING PROVIDER OF PROPRIETARY BIOLOGICAL PRODUCTS Current commercial use PREtec trials4Plant Health Care plc Annual Report and Acco

24、unts 2017Harpin Sales of Harpin have grown at 23%CAGR over the five years to2017,since we adopted a strategy of expanding registrations and developing distribution through new partners.We are now able to sell Harpin in more than 14 countries.In the USA,we sell into corn as a component of seed treatm

25、ent and,since 2016,as a component of fluency agents used in seedplanters.These treatments all improve crop yield.We also sell into fruit inthe Pacific Northwest and into soft fruit and citrus in Florida.In Europe,we started sales into table grapes in Italy in 2016;sales are growing and there are pla

26、ns to expand to other countries.In Spain,sales are growing rapidly in citrus and have also started in rice.In the UK,activity included the launch into potatoes in 2017 and sales also started in turf,where Harpin improves the vigour and condition of the grass.Extensive trials over the last three year

27、s have shown significant benefits of Harpin in sugarcane in Brazil,where the benefit is increased yield;the product was launched in Brazil in early 2018.In South Africa,sales have been developed into fruit,corn and sugarcane.Benefits of Harpin in BrazilPREtecPREtec(plant response elicitor technology

28、)is our core new technology,inspired by natural proteins found in plants and plant pathogens.We are able to identify families of peptides(chains ofamino acids)that can provide various agronomic benefits for farmers.We have so far characterised four 3G peptide platforms from our research,three of whi

29、ch we have launched with partners.By platform,we mean a family of related peptide designs,all covered by extensive patent filings.3G signifies third generation and indicates that these are small peptides.Inaddition,we have fourth generation or 4G platforms,which areapplications of DNA or RNA forms o

30、f PREtec for various genetic uses in agriculture and plant breeding.Within each 3G platform,we are able to modify the peptide sequence in order to customise the performance of peptides invarious ways.For example,to make them better at inducing resistance to pests and diseases in plants,to improve th

31、e tolerance of plants to drought or to accelerate root growth.Furthermore,we can optimise the physical and chemical stability of peptides,so that they are stable in mixtures with agrochemicals.TechnologyInnatus 3G was our first platform.It delivers a range of disease andyield benefits to growers.It

32、has been under evaluation with four of the top global agricultural seed companies.Their field testing and other technical evaluation is well advanced.Our 3Gpeptides aredesigned to be combined with standard crop protection applications through both seed treatment and foliarapplications toimprove plan

33、t health.T-Rex 3G is a platform developed to protect crop plants against pest nematodes.It also shows good effects in limiting the loss ofyield caused by drought stress.Y-Max 3G behaves more like abiostimulant,promoting vigour and yield by regulating growth genes in the plant.T-Rex 3G and Y-Max 3G w

34、ere introduced to selected partners in the latter part of 2016.During 2017,eight industry partners conducted evaluation trials on one or both ofthese platforms.We are in the early stages of development of our 4G peptide platforms.The first platform entails the incorporation of geneticsequences in th

35、e plant that allow the plant to express peptides internally.Our products and technologiesINNOVATIVE AND PROPRIETARYOur innovative line of patent-protected products provides both economic and environmental benefits for our customers and capitalises upon long-term trends towards natural systems and bi

36、ological solutions to promote plant health and growth.There are 10 million has of sugarcane in Brazil*.There are 5 million has of sugarcane in Sao Paulo state.Coplacana,our distributor,is the largest supplier of inputs forsugarcane in Sao Paulo state.Applications of H2Copla(Harpin)have been shown to

37、 potentially increase sugarcane yield by as much as 12%resulting in a possible 4x return for the grower*.Coplacana launched the H2Copla brand in February 2018.*Based on 2016 sugarcane harvested data and 2017/2018 projected data from USDA Foreign Agricultural Services GAIN report dated 19 April 2017.

38、*Yield increase based on Plant Health Care field trials conducted on sugarcane in Brazil in 2017;Value and ROI based on cost data from Agrianual 2016 FNP Informa report.PREtec IS PROTECTED BY EXTENSIVE IP:Variations on peptide structures are patentable and,within eachof these“platforms”,it ispossibl

39、e to design and make a very large number of closely related peptide variants.Our first proprietary design platform,Innatus 3G,was introduced to partners in 20142015.In2016,we presented the next two platforms T-Rex 3G and Y-Max 3G.We continue towork on further patentable designs,which will be launche

40、d in due course.Patent filings cover the various PREtec peptide designs in all agricultural applications what wecall 3G technologies.They also extend to the genes that code for those peptides,forexample in crops bred to display increased defensive responses what we call 4G.Anumber of patent filings

41、are now being progressed.PREtec:THREE PROPRIETARY PLATFORMSSTRATEGIC REPORTPlant Health Care plc Annual Report and Accounts 20175WHAT IS PREtec?Innatus 3GBroad plant defence andgrowth platformValue propositionsYield improvementCrop protection value-addBreeding:seed-applied traitsT-Rex 3GNematode def

42、ence platformY-Max 3GYield and growth platformBIOPESTICIDESBIOSTIMULANTSPREtec works by inducing natural defensive and metabolic responses in crop plants sothat they suffer less harm from the usual stresses(like drought or disease)that they face during a growing season.This is achieved by designing

43、short proteins(peptides)that mimic the active sites of larger naturally occurring proteins to which plants are evolved to responddefensively.These peptides are generally accepted as being safe to handle and having negligible toxicity.They do not leave any detectable residue and rapidly degrade so th

44、at they do not persist on the plant after application.For these reasons,PREtec peptides should be generally easier,cheaper and quicker to register for commercial use than most other agricultural chemicals.6Plant Health Care plc Annual Report and Accounts 2017Chairmans letterEXCITING NEW DEVELOPMENTS

45、OverviewPlant Health Care is a leading provider of proprietary agricultural biological products and technology solutions focused on improving crop performance.2017 was a year of strong progress for the Group.Revenue and gross profit rose strongly in the Commercial business;we now have a well-diversi

46、fied business.At the same time,great strides have been made in New Technology and we are well placed to deliver our first substantial technology licence during 2018.Commercially,sales growth of 21%was driven by increased sales of our core product,Harpin;sales of Harpin have now grown at 21%Compound

47、Annual Growth Rate(“CAGR”)since we re-launched the business in 2013.The Commercial business is well placed to fulfil its mission of generating profit and cash tofinance the business by 2021.In New Technology,nine partners have been evaluating our PREtec platforms of biorational peptides,including al

48、l five of the top global agricultural/seed companies.We are particularly excited about the potential for the first Innatus 3G technology licences,which we now plan will be for rights for use on South American soybeans;we expect that competitive licensing process to be completed by the end of Q3 2018

49、,ahead of the planting of the next soybean crop.We report here separately on the two areas of focus for the business:New Technology and Commercial.We are organised in these two lines of business and report our Commercial business in three geographic segments Americas,Mexico and Rest of World.Werepor

50、t our New Technology business in a single segment.New TechnologyNew Technology is focused on the discovery and early development of novel proprietary biological solutions using the Groups PREtec science and technology capabilities(PREtec signifies plant response elicitor technology).These new techno

51、logies will mainly be developed into final products in partnership with agricultural industry companies active downstream,who will take them to market;the Group would then receive licence payments on these sales.We expect to partner with major agrochemical companies for the larger arable crops such

52、as corn and soybean;for specialty crops,such as regional crops and fruits and vegetables,we will work with a wider range of partners.Our laboratory,glasshouse and field trials,and a number of othertrials run for us by university groups and other specialists,confirm that peptides from Innatus 3G,T-Re

53、x 3G and Y-Max 3G can be customised to deliver targeted agronomic benefits,such as,resistance to attack by fungi and soil pests and improved recovery from the effects of drought.All of these benefits increase crop yield.Our peptides have been shown to be compatible with standard agricultural applica

54、tions,such as seed treatment and foliar sprays,and to work with different genetic strains of crops.They can enhance the performance of established chemical and biological products,and resistant crop varieties.In some instances peptides on their own perform as effectively as significant commercial pr

55、oducts currently on the market.However,we generally expect our peptides to be used in combination with conventional agricultural products,to extend the performance and to reducetheir environmental impact.This promise has encouraged an increasing number of potential licensees to evaluate PREtec pepti

56、des.This now includes all five of the major global agricultural/seed companies.In total,nine potential partners ran field trials during 2017,under the terms offormal evaluation agreements with the Company.During 2017,we also made significant progress in characterising the lead peptides from each of

57、Innatus 3G,T-Rex 3G and Y-Max 3G.From the total of eight lead peptides we worked on in 2017,PHC279 is currently the focus for work in three main areas demonstrating effectiveness;establishing the route towards regulatory licences to sell;and developing a cost-effective production process.While we ar

58、e also working on a wide range of opportunities across the three platforms,I will focus here on PHC279,for purposes ofillustration.“2017 was a year of substantial progress.OurCommercial sales are now on a firm growth track.In New Technology,we are poised for our first technology licence ofPREtec in

59、2018.”STRATEGIC REPORT7Plant Health Care plc Annual Report and Accounts 2017Many peptide variants possible within each platform:focusing on lead peptides 3G platformPerformance focusLead peptides (synthetic fermented product)Partner trials startedInnatus 3GDisease resistance,vigour,quality,yieldPHC3

60、98 PHC279 PHC296 PHC863 PHC958 PHC404 PHC180 PHC1482015T-Rex 3GNematode,yieldPHC176 PHC032 PHC097 PHC9492016Y-Max 3GGrowth,roots,yieldPHC353 PHC414 PHC326 PHC5352016CommercialPre-launchAdvanced developmentEarly developmentProof of conceptDiscoveryPREtec:MOVING FROM PLATFORMS TO PRODUCTSOUR LEAD PEPT

61、IDE FOR SOYBEAN IN BRAZIL:PHC279201620172018Before 2021EfficacyLab/greenhouseEvaluation field trialsDevelopment field trialsCommercial salesAbility to makeSynthesisBench-top fermentationPilot productionCommercial productionRegulatoryFast-track strategySubmit packageApprovalTechnology licenceCompetit

62、ive arenaAnnounce competitive licensingCompetitive licensing H2Milestone paymentsCompleteIn progressPlannedValue proposition Works on disease that is resistant tofungicides.Extends commercial life of existing fungicide products;defend or extend market share.Potential to boost yield through plant hea

63、lth effects.Innatus 3G platform can be mined for potentially even better peptides overtime.Asian Soybean Rust field trial Iracempolis Brazil21DAT4 Bars are one standard error from the meanUntreated108642Disease level(severity)PHCBayerBayer+PHCSyngentaSyngenta+PHCUPL/BayerUPL/Bayer+PHCTreatment8Plant

64、 Health Care plc Annual Report and Accounts 2017New Technology continuedPHC279 is showing notable promise for use in the control ofAsianSoybean Rust(“ASR”)in Brazil.ASR is a devastating diseaseofsoybeans;Brazilian farmers spend some US$1.7billion(according to the 2015 AgrAspire database)each year on

65、 its control.However,ASR is developing resistance even to the mostadvanced chemical fungicides in the market,leading to poorer control and the need for ever larger and more frequent applications.Our own trials,including repeated greenhouse tests and field trials in two countries,indicate that PHC279

66、,when mixed with the market-leading fungicides,improves control of resistant ASR even on disease-tolerant soybean varieties.We also expect that PHC279 applications will boostsoybean yield,by enhancing crop health.The four market leaders in the fungicide market in Brazil are nowrunning their own fiel

67、d trials with our lead peptides from theInnatus 3G platform.Trials started in late 2017 and results are anticipated late in Q2 2018.Embrapa,the highly regarded Brazilian government agricultural research entity,is also evaluating Innatus 3G peptides in the field,in parallel with our own field trials.

68、In parallel with these field trials,we are evaluating the path to regulatory licences needed to sell Innatus 3G peptides in Brazil,as well as in other countries.We are encouraged that regulatory authorities have indicated that they are likely to treat PREtec peptides as biologicals,which have a subs

69、tantially faster route to market than conventional agrochemicals.The most cost-effective means of production for the Companys peptides is likely to be by industrial fermentation.We have now developed a high-yield fermentation process for PHC279 and taken it up to pilot scale.Material produced in thi

70、s way has been shown tobe fully effective in field and greenhouse trials and physically stable,including in mixtures with agricultural chemicals.Importantly,the costs of production have now achieved our targets to ensure cost-efficiency in the field.We are working towards a competitive licensing rou

71、nd in the second halfof 2018 for rights touse Innatus 3G in South American soybean markets.Whoever licenses these rights will be seeking touse Innatus 3G as an ingredient or component of their own product ranges.If our peptides can show benefits such as performance improvement,resistance management

72、and environmental and regulatory advantages this will be of significant commercialvalue.We anticipate that a series of competitive licensing events in other crops,geographical regions and other value propositions will follow over the coming years.CommercialOur Commercial business sells our proprieta

73、ry products worldwide through distributors and also distributes complementary third-party products in Mexico.Overall sales in 2017 were$7.7 million,an increase of 21%over 2016($6.3 million);in constant currency*,the increase was 23%.Strong external sales growth in Rest of World(up 100%;107%inconstan

74、t currency)was offset by weaker sales in Mexico due tolow produce prices in the first half of the year.External sales inthe Americas grew 8%,following moves in 2016 to reduce distributor inventories.Sales of the core Harpin products increased by 42%(44%inconstant currency),driven by broadly based gr

75、owth in many countries.Harpin and Myconate products represented 69%ofsales in 2017(59%in 2016).Gross margin was steady at 62%.Sales of Harpin are now established on a strong growth track;CAGR from 20132017 was 23%.In Rest of World,sales increased strongly in Spain and South Africa.Harpin is growing

76、well in Italy,following the launch onto table grapes in 2016,through our partner Sipcam.Harpin was also successfully launched on potatoes in the UK.During the year,registration and first sales were achieved in Morocco.We anticipate further registrations and product launches in 2018.In the Americas,s

77、ales by our largest distributor in the Pacific Northwest were held back by adverse weather.However,new outlets in Florida and as a fluency agent in corn(maize)helped tosupport modest sales growth.Mexico had a challenging year,particularly due to very low prices of peppers,tomatoes and other produce

78、exported to the USA in the first half of the year.Sales were more positive in the second half of the year but ended up 11%lower(in local currency)than in2016.In Brazil,Harpin was launched into sugarcane at the turn of the year.Results from demonstration trials have shown significant increases in yie

79、ld,which is a promising indicator for the launch.First sales by the Company were expected at the end of 2017;due to delays in importation,these sales slipped into early 2018 but first in-country sales were not affected.Financial and corporateOperating expenses in 2017 were$10.5 million,compared with

80、$15.2 million in 2016.Excluding the exceptional costs incurred in2016 evaluating a potential US listing($1.2 million)and anon-cash decrease in the value of loans from our UK subsidiary(again of$1.3million in 2017,compared with a loss of$1.5 million in 2016),cash operating expenses reduced by$0.6 mil

81、lion to$11.9 million(2016:$12.5 million).R&D costs increased by$0.6million to$5.1 million,while other costs excluding the exceptional costs detailed above decreased by$1.2 million.As we report in US Dollars,the increase in Sterling value has resulted in a foreign currency gain of$1.3 million arising

82、 in respect of the Sterling loan between the holding company and the UK trading company.The net increase in the consolidated statement of comprehensive income in respect of the revaluation of these loans is$1.3 million.Chairmans letter continued20153,8634212,9747,25820163,4053562,5686,32920174,82245

83、52,4067,685 Harpin Myconate Third party*Excludes license revenue.20136,3142,1253,7923972014 6,7303,1653,106459PRODUCT SALES*($000)*We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates andcomparing these adj

84、usted amounts to our current period reported results.STRATEGIC REPORT9Plant Health Care plc Annual Report and Accounts 2017Constant currencyWe evaluate our results of operations on both an as reported and a constant currency basis.The constant currency presentation,which is a non-IFRS measure,exclud

85、es the impact of fluctuations in foreign currency exchange rates.We believe providing constant currency information provides valuable supplemental information regarding our results of operations,consistent with how we evaluate our performance.We calculate constant currency percentages by converting

86、our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results.Board changesI have had the honour to act as Interim CEO,as well as Executive Chairman,since November 2016.The Board reviewed these ar

87、rangements in early 2018 and hasrequested that I continue as Interim CEO for the time being.The Board will review the situation periodically and may initiate asearch for a new CEO in due course.The relevant experience and background of each member oftheBoard is set out on page 17.OutlookAfter depres

88、sed years in 20152016,agriculture markets appear tohave stabilised at a new,lower level;commodity prices are unlikely to recover while grain stocks remain at relatively high levels.The global agrochemical market is estimated to have been flat in 2017.Even in depressed agrochemical markets;however,we

89、 believe that growers in key markets will continue toadopt agricultural biological products which increase their productivity.Based on various reports,we expect growth in the demand for biological products to increase at approximately 10%per annum from 2017 to 2020.We are confident that Harpin sales

90、 will continue to grow significantly faster than the market for biological products as a whole over the medium term.However,sales in any one period will be subject to seasonal factors such as weather,timing of registrations and third-party relations”.As a result,Group sales may not follow a strictly

91、 linear trend.We are currently focused on ensuring successful field trials ofPHC279 and other Innatus 3G peptides for the control of ASR and yield enhancement in soybeans.We are confident that our partners will replicate our own positive results,which will lead toa successful competitive licensing o

92、f rights to the platform forSouth American soybean during the H2 2018.In addition,we are working on a number of other value propositions for our PREtec peptides,in co-operation with our partners;we expect these tolead to a series of technology licensing agreements over thecoming years.Plant Health C

93、are has a clearly defined strategy,which we are implementing effectively.2018 will be a decisive year for the Company,which we enter with confidence.In closing,I would like to thank the entire Plant Health Care teamfor all its hard work during the year.Strong results come from great people,working t

94、owards shared goals.As Interim CEO,I am proud of the Groups impressive team of highly motivated professionals,in whom I have the greatest confidence.On 27 February 2018,the Group successfully completed an equity raise which generated$6.7 million(net of costs)from new and existing investors.The signa

95、l of our investors confidence in the Group is highly noteworthy.Dr Christopher RichardsExecutive Chairman and Interim Chief Executive Officer9 April 2018TECHNOLOGY LICENSING TIMELINESInnatus 3GT-Rex 3G Y-Max 3G and PREtec 4G20182019 Exclusive rights against milestone achievement Multiple competitive

96、 licences feasible20162017 Present to potentialpartners Complementary to Innatus3G20182019 Exclusive rights by cropandgeography Competitive licensing process H2 2018 for SouthAmerican soybeans Further competitive licences planned20162017 PHC develops productconcepts Partners test productsandexplore

97、platform capabilities2015 Signed four evaluation agreements for Innatus 3G with major players10Plant Health Care plc Annual Report and Accounts 2017Business model and strategyHOW WE WORKPlant Health Care believes that PREtec has very significant commercial potential.Wetherefore plan to license the t

98、echnology to larger companies,which will have the resources to turn our lead peptides into final products andtake them to market.RESEARCH AND DEVELOPMENTNEW TECHNOLOGYPlant Health Care has so far characterised four platforms and launched three of them:Innatus 3G T-Rex 3G Y-Max 3GPlant Health Cares l

99、aboratory in Seattle:Designs peptides from each platform and launched three of them.Screen them for activity in protecting plants from stress such as drought ordisease.Select lead peptides for testing.Field trialsField trials are run through a network of universities and specialist contractors.Colla

100、borating with partnersPartners carry out laboratory,greenhouse and field trials on many crops andtargets.Manufacturing processDuring 2017,we developed production processes for PHC279.Fermentation is now being done at pilot scale.Wearemoving other lead peptides down this route.Obtaining regulatory ap

101、provalsRegulatory rules vary across the world;Plant Health Care is pursuing“fast-track”approvals for PREtec peptides.Out-licensing to partnersPlant Health Care intends to segment our licences by crop and geography.TheCompany anticipates that the first licence will be for Innatus 3G in South American

102、 soybean.Licences for Innatus 3G in other crops and geographies will follow,as well as licences to T-Rex 3G and Y-Max.123456OUR PARTNERSPREtec has been under evaluation by nine partners,including all of the“big five”global agricultural/seed companies.Our value proposition to our partners:Improving e

103、fficacy of fungicides,tocombat diseaseresistance.Improving corn or soybean yield.Controlling of nematode infestations throughtheseason.Safening chemicalproducts used in seedtreatment.Increasing yield and quality of grapes,tomatoes,peppers,lettuces and cucumbers.Improving turf health under heat and t

104、rafficstress.STRATEGIC REPORT11Plant Health Care plc Annual Report and Accounts 2017OUR GROWTH STRATEGYOur future growth will be achieved by focusing on the following key areas:OUR RESEARCH AND DEVELOPMENT PROCESSDiscoveryPartner evaluationCharacterisationProduct development INCREASING SALES OF EXIS

105、TING COMMERCIAL PRODUCTSWe intend to drive revenue in the short term in our Commercial business,focusing onHarpin,particularly inspecialty crops.We plan to grow in crops where Harpin provides the most benefits to farmers,including sugarcane,citrus,tomatoes and potatoes.BUILDING FURTHER THE CAPABILIT

106、Y TOSUPPORT OURLICENCESPlant Health Care has a unique understanding of PREtec,which will be important for supporting partners as they develop and commercialise products from our platforms.Our capacity to develop cost-effective production,processes and our skill in achieving fast-track registrations

107、will enable our partners to accelerate market launches.Our extensive experience of the platforms will enable us to mine our platforms for further peptides over time,inco-operation withour licensees.CONTINUING TO DEVELOP FURTHER PEPTIDE PLATFORMSWe have already filed a patent application for a furthe

108、r peptide platform,beyond the three already under evaluation by partners.We expect to discover more platforms over time.LICENSING OF PREtec PLATFORMS:INNATUS 3G,T-REX 3G AND Y-MAX 3GOur partners have been evaluating our peptide platforms since 2016.With partners currently evaluating these platforms

109、in many crops and countries,we anticipate aseries of competitive licensing rounds,leading to licensing events by crop and geography over several years.We are currently focused on our first technology licence,which we anticipate will be for Innatus 3G in South American soybeans,during the second half

110、 of2018.12Plant Health Care plc Annual Report and Accounts 2017Key performance indicators(“KPIs”)REVENUE($000)$7,685GROSS PROFIT MARGIN(%)61.6%GROSS PROFIT($000)$4,732OPERATING LOSS($000)$(5,801)20177,685201761.620174,7322017(5,801)20166,329201661.520163,8932016(11,350)MONITORING THE BUSINESSThe Gro

111、up uses a range of performance measures to monitor and manage thebusiness effectively.These are both financial and non-financial.The most significant relate to Group financial performance and to the Groups progress indriving the two pillars ofitsstrategy.In addition,an important KPI is the movement

112、in revenue achieved from the sale of our proprietary products.These movements are shown below,separating out the product revenue from the receipt of licence/milestone payments and other one-off payments,which are less predictable and tend todistort the product sales growth.Proprietary sales(excludin

113、g licencing revenue)2017$0002016$000The Americas1,5741,424Mexico570734Rest of World3,2001,603Total5,3443,761Non-financialThe KPIs for non-financial performance relate to the Groups technologies and include the number and nature of relationships realised with partners,and progress along the mutually

114、agreed paths to commercial launch of products.The Board continues to monitor the progress of its R&D activities and expenditures.As each research project advances,specific progress is reported to the Board and costs against budget are monitored.We anticipate refining the KPIs for R&D as each project

115、 develops.The KPIs for financial performance of the Commercial area andfor the Group as a whole include revenue,gross profit andmargin,and operating profit/loss.These KPIs indicate thevolume of work the Group has undertaken,as well as the efficiency with which this work has been delivered.The KPIs f

116、or financial performance for the year ended 31December 2017,with comparatives for the year ended 31December 2016,are set out below:STRATEGIC REPORT13Plant Health Care plc Annual Report and Accounts 2017MEASURING RISKPrincipal risks and uncertaintiesOur business is subject to a number of potential ri

117、sks and uncertainties,including those listed below.The occurrence of any of these risks may materially and adversely affect our business,financial condition,results of operations and future prospects.We manage and mitigate these risks by executing the strategy described on page 11.RiskDescriptionFIN

118、ANCIAL AND LIQUIDITY RISK We have a history of losses since inception,and anticipate continuing to incur losses in the future,and may notachieve or maintain profitability.We expect to require additional financing in the future and may be unable to obtain such financing on favourable terms or at all,

119、which could force us to delay,reduce or eliminate our research,development orcommercial activities.TECHNOLOGY AND COMMERCIALISATION RISK Our PREtec out-licensing strategy depends on evaluation partners converting their declared interest into formal commercial offers.We are subject to risks relating

120、to product concentration due to the fact that we derive substantially all of our revenues from our Harpin and Myconate product lines and from the sale of third-party products.We may be unable to establish or maintain successful relationships with third-party distributors and retailers,which could ma

121、terially and adversely affect our sales.We have a limited number of sales and marketing personnel and will need to expand our sales and marketing capabilities to grow revenues from our commercial products.While a number of patents have been filed to date,we may be unable to secure adequate protectio

122、n for the intellectual property covering our New Technology and product candidates,or develop and commercialise theseproduct candidates without infringing the intellectual property rights of third parties.Our partners trials can be influenced by weather and other factors,which can result in the tria

123、ls having to be repeated;this can lead to delays of a year in planned licences.REGULATORY ANDLEGALRISK If we are unable to obtain regulatory approvals,or comply with ongoing and changing regulatory requirements,itcould delay or prevent sales of our commercial products or impede the development of po

124、tential products.If we use PREtec in trait development,our technologies and product candidates will face more stringent regulatory regimes.If we are unable to comply with regulations applicable to our facilities and procedures and those of our third-party manufacturers,our research and development o

125、r manufacturing activities could be delayed,limited or prevented.CREDIT RISK The majority of our net sales are credit sales that are made primarily to customers whose ability to pay is dependent,in part,upon the economic strength of the industry and geographic areas in which they operate,and the fai

126、lure to collect,or,timely collect,monies owed from customers could materially and adversely affect our financial condition.PERSONNEL Our future growth and ability to compete depend on retaining our key personnel and recruiting additional qualifiedpersonnel.Financial instrumentsThe Group uses various

127、 financial instruments,including cash,short-term investments of investment grade notes and bonds,and items such as trade receivables and trade payables that arise directly from its operations.Information on the risks associated with the Groups involvement in financial instruments is given in note 19

128、 to the financial statements.On behalf of the BoardDr Christopher RichardsExecutive Chairman and Interim Chief Executive Officer9 April 201814Plant Health Care plc Annual Report and Accounts 2017Financial review“Plant Health Care had strong sales growth in 2017.Sales increased 21%to$7.7 million.At t

129、he same time,operating expenses decreased 31%to$10.5 million.”A summary of the financial results for the year ended 31December 2017 with comparatives forthe previous financial year is set out below:2017$0002016$000Revenue7,6856,329Gross profit4,7323,893Operating loss(5,801)(11,350)Finance income(net

130、)8650Net loss for the year(5,716)(11,217)RevenuesRevenues in 2017 increased by 21%to$7.7 million(2016:$6.3million)as a result of strong growth in ourRest of World segment,in particular Spain and South Africa.The gross margin remained steady at62%ofsales in 2017.The AmericasExternal revenue in the Am

131、ericas segment increased 8%to$1.6 million(2016:$1.5 million).The increase in revenue was primarily due to increased sales of Harpin in potatoes in the Upper Midwest and strawberries in Florida.The Americas includes revenues from the sales to North and South America.Initial sales to Brazil were delay

132、ed due to importation issues;these sales occurred in early 2018,with the launch intosugarcane.Revenue in Americas ispredominantly fromHarpin sales.MexicoA significant portion of the Groups revenue continues to come from Mexico.Revenue from the Mexican segment decreased 11%(10%in local currency)to$2.

133、9 million(2016:$3.2 million).This was due to lower than expected produce prices in the north-west portion of Mexico.Revenue in Mexico includes sales of Harpin,Myconate and third-party products.Rest of WorldIn 2017,the Groups largest revenues were derived fromthe Rest of World segment.External revenu

134、e increased 100%to$3.2 million(2016:$1.6 million).The increase was primarily due to increased sales in the South African and Spain regions.Sales increased 104%and60%for South Africa and Spain,respectively.Revenue in theRest of World segment is predominantly from Harpin sales.Operating expensesOperat

135、ing expenses decreased to$10.5 million from$15.2million.The factors that contributed tothe decrease were continued investment in Research and Development up 11%to$5.1million,non-cash expenses associated with the increase in the value of loans from our UK subsidiary of a foreign currency gain of$1.3

136、million(2016:foreign currency loss of$1.5million)and costs of approximately$1.2 million were incurred in 2016 inassociation with evaluating apotential USA listing.There were no USAlisting costs in 2017.The 2016 costs associated witha potential USA listing were charged to administration.Administratio

137、n expenses also included$1.3 million(2016:foreign currency loss of$1.5 million)of a non-cash foreign currency gain associated with the increase in the value ofthe loans from our UKsubsidiary.STRONG SALES GROWTHSTRATEGIC REPORT15Plant Health Care plc Annual Report and Accounts 2017Expenditure within

138、the New Technology segmentincreased$0.5million to$5.5 million in 2017(2016:$5.0 million).The increase was due to thehiring of additional R&D staff,increased contract research and intellectual property costs.In addition,we have set out in note 9 the separate category of expenditure relating to Busine

139、ss Development,which decreased to$0.6 million in 2017(2016:$1.0 million).This relates to reduced personnel costs and other costs relating to customer support and market research.Unallocated corporate expenses decreased$4.7million to a gain of$0.3 million(2016:$4.4million).The increase was attributab

140、le to costs in 2016 associated with a USA listing and the increase in the value of Sterling loans from our UK subsidiary due to the appreciation of the Pound.Balance sheetAt 31 December 2017 and 2016,investments cashandcash equivalents were$3.9 million and$10.1millionrespectively.Working capital was

141、$7.2 million at 31 December 2017(31 December 2016:$12.5 million).The$5.3 million reduction is primarily due to an increase in accounts receivable,accounts payable and further spend in research and development activities.Translation of the results of foreign subsidiaries forinclusion within the conso

142、lidated Group results resulted in an exchange loss of$1.3 million recorded within Other Comprehensive Income and Foreign Exchange Reserves(2016:gain of$1.3 million).Cash flow and liquidityNet cash used in operations was$4.9 million in 2017(2016:$9.2million),a decrease of$4.3 million.This decrease wa

143、s primarily the result of a decrease in the Groups net loss offset by an increased working capital position.Net cash provided by investing was$2.6 million in2017(2016:$1.8 million).The Group holds surplus cash in several bond and money market funds.The movement in these funds was used to further inv

144、est in the New Technology business and fund the Commercial business.Net cash provided by financing activities was$nil for2017(2016:$9.7 million).The decrease is due toa$9.7 million fundraise concluded in 2016.On 27 February 2018,the Group successfully completed an equity raise which generated$6.7 mi

145、llion(net of costs)from new and existing investors.Based upon the Groups current cash and cash equivalent position,projected revenue from product sales,anticipated operating costs and the additional funding received post year end,the Group is confident that it will have sufficient cash to meet its w

146、orking capital needs through the next 12 months.Jeffrey HoveyChief Financial Officer9 April 201816Plant Health Care plc Annual Report and Accounts 2017CORPORATE GOVERNANCE17 Board of Directors18 Corporate governance report20 Audit Committee report21 Remuneration Committee report26 Directors report27

147、 Statement of Directors responsibilitiesCORPORATE GOVERNANCE17Plant Health Care plc Annual Report and Accounts 2017Board of DirectorsTHE RIGHT TEAMDr Christopher G J Richards(Executive Chairman and Interim Chief Executive Officer)Dr Christopher Richards joined the Company as Non-executive Chairman i

148、n August 2012.He became Executive Chairman in April 2015 to take on a more active role in investor relations and in developing strategy,particularly the focus on New Technology.Following the departure of Paul Schmidt in November 2016,DrChristopher Richards became the Interim Chief Executive Officer.

149、Dr Christopher Richards spent 20 years at Syngenta and its predecessor companies in various strategic management positions in South America,Europe and Asia.In November 2003,he was appointed COO of Arysta LifeScience,and he served as CEO from 2004 until 2010,leading Arysta LifeSciences transformation

150、 into a global agrochemical company with sales above$1.6 billion.He also served as a director of Arysta LifeScience from 2003 to 2015.He serves on the board of directors of Origin Enterprises plc,a service provider to farmers for food production solutions,and Nanoco Group plc,a technology company ca

151、rrying out research,development and commercialisation of products based on heavy metal-free quantum dots.Michael J Higgins(Senior Independent Director)Michael Higgins joined the Company in May 2013 as Senior Independent Director and Chair of the Audit Committee.He also serves as a member of the Remu

152、neration Committee.He currently serves as non-executive chairman of Ebiquity plc,a leading independent marketing and media consultancy,a non-executive director of Progility plc,a project management services group,and a non-executive director of Premier Technical Services Group plc,a niche specialist

153、 services provider.Michael is also non-executive Chairman of IPSX UK Ltd,which,subject to regulatory approval,will operate the first regulated securities exchange dedicated to the IPO and secondary trading inExchange-Traded Properties,and a non-executive director of the Quoted Companies Alliance,a n

154、on-profit organisation that champions the interests of small to mid-sized publicly traded companies.He is also an alternate member of the Panel on Takeovers and Mergers on behalf of the Quoted Companies Alliance.Michael Higgins was apartner at KPMG for 10 years and subsequently served as a senior ad

155、viser at KPMG.Prior to KPMG,Michael Higgins was a director at Charterhouse Bank,worked at Saudi International Bank and qualified as an accountant withPrice Waterhouse(now PricewaterhouseCoopers).Dr Richard H Webb(Executive Director,New Technology)Dr Richard Webb joined the Company in September 2013

156、as a Non-executive Director.In January 2015,he was appointed an Executive Director,responsible for supporting the Chief Science Officer,Dr Zhongmin Wei,as the Company was expanding its research and development capability.He leads the New Technology strategy and licensing for the business.He was prev

157、iously engaged by the Company as a consultant,contracted through StepOut Ltd.,aconsultancy business he founded in 1995.In this capacity,between 2012 and 2014,he was instrumental in the development of the Companys new business strategy.He previously held various positions at Imperial Chemical Industr

158、ies,including responsibilities for managing laboratory discovery and field development programmes for its public health pesticide business.His doctorate,in pest biology,wasfrom the London School of Hygiene and Tropical Medicine.William M Lewis(Non-executive Director)William Lewis joined the Company

159、as a Non-executive Director in April 2015.He also currently serves as Chairman of the Remuneration Committee and as a member of the Audit Committee.Since June 2014,William Lewis has served as President and CEO of Summit Agro USA,LLC,a joint venture agrochemicals business between Sumitomo Corporation

160、 and ISK Biosciences.He previously held senior roles within Arysta LifeScience,Syngenta Crop Protection andZeneca/ICI.William Lewis has also been an owner/operator of two John Deere dealerships in GA,where he improved the overall operations and value of the business,which led to the successful sale

161、of thebusinesses.18Plant Health Care plc Annual Report and Accounts 2017Corporate governance reportHIGH STANDARDS OF GOVERNANCEPlant Health Care plc has taken note of the UK Corporate Governance Code(the“UK Code”)published in April 2016.The UK Code and associated guidance can be found on the Financi

162、al Reporting Council website at https:/www.frc.org.uk/directors/corporate-governance-and-stewardship/uk-corporate-governance-code.The rules of the London Stock Exchange do not require companies that have securities traded on AIM to formally comply with the UK Code and the Company does not seek to fo

163、rmally comply nor give a statement of compliance.However,the Board is accountable to the Companys shareholders for good governance and has sought toapply those principles of corporate governance commensurate with the Companys size.The Companys approach is set out below:Board compositionThe Board com

164、prises an Executive Chairman,whoisalso the Interim Chief Executive Officer,one Executive Director and two Non-executive Directors.TheBoard considers both of the Non-executives tobe independent in judgement andcharacter.Biographies of the Board members appear on page 17.These indicate the high levels

165、 and range of business experience which is essential to oversee effectively a business of the size,complexity and geographical spread of the Group.Concerns relating to the executive management of the Group or the performance of the Directors can be raised in confidence by contacting the Senior Indep

166、endent Director,Michael Higgins,through the CompanySecretary.Board CommitteesThe Board has established Audit and Remuneration Committees,as described on page 19.No separate Nominations Committee has been established.ANominations Working Group comprised of Non-executive Directors provides advice and

167、guidance on the selection of candidates;the full Board acts as a Nominations Committee when changes to the Board of Directors are proposed.Workings of the BoardThe Board meets on a pre-scheduled basis at least six times each year and more frequently when required.The Board has reserved certain matte

168、rs to it for decision and the requirement for Board approval on these matters is communicated widely throughout the senior management of the Group.This includes matters such as:approval of the Groups strategic plan;extension of the Groups activities into new business or geographic areas;any decision

169、 to ceaseto operate all or any material part of the Groups business;changes relating to the Groups capital structure;contracts that are material strategically or by reason of size;investments,including the acquisition or disposal of interests in the voting shares of any company or the making of any

170、takeover offer;and the prosecution,defence or settlement of litigation material to the Group.There is an agreed procedure for Directors to take independent professional advice,if necessary,at the Companys expense.This is in addition to the access which every Director has to the Company Secretary,who

171、 is charged by the Board with ensuring that Board procedures are followed.The differing roles of Chairman and Chief Executive are acknowledged.The key functions of the Chairman are to conduct Board meetings and meetings of shareholders and to ensure that all Directors are properly briefed in order t

172、o take a full and constructive part in Board discussions.The Chief Executive is required to develop and execute business strategies and processes to enable the Groups business tomeet the requirements of its shareholders.DrChristopher Richards,Executive Chairman and Interim CEO,iscurrently filling bo

173、th of these roles.The Senior Independent Director acts as a point of contact for shareholders and other stakeholders with concerns which have failed to be resolved,or would not be appropriate to be addressed,through the normal channels of the Chairman or Chief Executive.The Senior Independent Direct

174、or also meets with the other members of the Board without the Chairman present on at least an annual basis in order to evaluate and appraise the performance of the Chairman.To enable the Board to function effectively and allowDirectors to discharge their responsibilities,full andtimely access is giv

175、en to all relevant information.Inthe case of Board meetings,this consists of a comprehensive set of papers,including regular business progress reports and discussion documents regarding specific matters.All Board members engage actively with management to provide support in their areas of specific c

176、ompetence;this provides ample opportunity for Non-executive Directors to understand the business in depth.In line with the requirements of the UK Code,the Board normally conducts an internal Board performance evaluation on a regular basis,including during 2017.CORPORATE GOVERNANCE19Plant Health Care

177、 plc Annual Report and Accounts 2017Re-election of DirectorsAny Director appointed during the year is required under the provisions of the Companys articles of association to retire and seek election by shareholders at the next annual general meeting.The articles also require that one-third of the D

178、irectors retire by rotation each year and seek re-election at the annual general meeting.The Directors required to retire will be those in office longest since their previous re-election.Inany event,each Director must retire at the third annual general meeting following his appointment orre-appointm

179、ent in a general meeting.Retiring Directors are eligible for re-election by shareholders.Remuneration of DirectorsA statement of the Companys remuneration policyand full details of Directors remuneration areset outin the Remuneration Committee report onpages21to 25.Executive Directors abstain from a

180、nydiscussion or voting at full Board meetings on Remuneration Committee recommendations where the recommendations have a direct bearing ontheirownremuneration package.CommunicationThe Company places a great deal of importance on communication with its shareholders.The Company publishes online both a

181、n interim statement and its full-year report and accounts.The annual report is mailed to all shareholders who have so requested and,upon request,toother parties who have an interest in the Groupsperformance.Regular communication withshareholders also takes place via the Companys website: is regular

182、dialogue with major shareholders,aswell as general presentations after the release ofthe interim and final results.From time to time,these meetings involve the Executive Chairman or Non-executive Directors.All shareholders have the opportunity to ask questions at the Companys annualgeneral meeting.R

183、isk management and internal controlsThe Directors recognise that the Group is ambitious and seeking significant growth.The Board has in place a formal process for identifying,evaluating and managing the significant risks faced by the Group,which complies with the Revised Guidance on Board Effectiven

184、ess published by theFinancial Reporting Council.The Directors are responsible for the Groups system of internal control and for reviewing its effectiveness.However,such a system can provide only reasonable,but not absolute,assurance against material misstatement or loss.There is a formal process in

185、place to regularly review the control systems across the Group to evaluate whether they are designed appropriately to mitigate emerging risks and in anticipation of expected growth.Twice a year,the Chief Financial Officer presents to the Board,for discussion and approval,a summary ofthe key internal

186、 controls in place during the prior period and proposals for enhancements to these controls in the forthcoming period.Based on this process,the Directors believe that the Group has internal control systems in place appropriate to itssize and nature.The Remuneration Committee is chaired by WilliamLew

187、is.Michael Higgins is also a member.Both are Non-executive Directors.The Committee isresponsible for determining the contract terms,remuneration and other benefits of the Executive Directors including the Executive Chairman,and for monitoring the remuneration of first-line executive management.The C

188、ommittee may call on outside compensation experts as required.Remuneration policyIt is Group policy to set Directors remuneration levelsto attract,incentivise and retain the quality ofindividuals that the Group requires to succeed initschosen objectives.It is also Group policy to ensure that thereis

189、 a strong link between the level ofExecutive Directors remuneration and the performance of theGroup in achieving its goals.Remuneration CommitteeThe members of the Remuneration Committee are William Lewis(Chairman)and Michael Higgins.The Remuneration Committees responsibilities include the following

190、:reviewing and approving,or making recommendations to the Board with respect to,the compensation of the Executive Directors and senior management;overseeing an evaluation of senior management;and overseeing and administering the Groups employee share option scheme and equity incentive plans in opera

191、tion from time to time.The Remuneration Committee report is set out on pages 21 to 25.20Plant Health Care plc Annual Report and Accounts 2017Audit Committee reportThe Audit Committee is chaired by Michael Higgins.The Audit Committee is made up solely of independent Non-executive Directors.The Commit

192、tee provides a forum for reporting by theGroups auditor and reviews the Groups budget and its interim and final financial statements before their submission to the Board.The Committee also ensures appropriate challenge and governance around accounting treatment and the Groups risk management and int

193、ernal control practices.TheCommittee advises the Board on the appointment ofthe external auditor and on its remuneration,bothforaudit and non-audit work.It also discusses the nature and scope of the audit with the auditor.The Audit Committee has sole responsibility for assessing the independence of

194、the external auditor,BDO LLP.Each year,the Committee seeks reassurance that the external auditor and its staff have no family,financial,employment,investment or business relationship with the Group.The Committee requires the external auditor and its associates to confirm this in writing,and detail t

195、he procedures which the auditor has carried out in order to make this confirmation.The Committee also ensures that all partners engaged in the audit process are rotated at least every five years,and assesses the likely impact on the auditors independence and objectivity before awarding it any contra

196、ct for additional services.It is Group policy to require Audit Committee approval for all non-audit services provided by the independent auditor.The consideration of auditor independence is a standing agenda item at each Audit Committee meeting.CORPORATE GOVERNANCE21Plant Health Care plc Annual Repo

197、rt and Accounts 2017Elements of remuneration Executive DirectorsThe following comprised the principal elements of the Groups Executive Directors during 2017:basic salary and benefits;annual bonus(performance related anddiscretionary);long-term share-based incentives;and pension contributions.Long-te

198、rm share-based incentivesEach of the Executive Directors was eligible to participate in the Companys share option schemes and long-term incentive stock award plans.The main features of these plans are:(a)2004 Unapproved Share Option SchemeIn July 2004,the Board adopted the Plant Health Care plc Unap

199、proved Share Option Scheme 2004.Under this scheme,the Board could grant options at an exercise price of not less than the market value of a share on the date of award.Options may normally be exercised between three and 10 years from grant.Inmost cases,vesting is also dependent upon the option holder

200、 remaining an eligible employee.In 2014,the scheme reached the10th anniversary of its approval by shareholders;no further options may be granted.The Company was authorised to award options and shares under these plans up to the greater of 3%of its issued share capital or such number as,when aggregat

201、ed with any outstanding options converted from the Plant Health Care,Inc.option plans from 1996 and 2001,amounts to no more than 10%of the issued share capital of the Company.(b)Value Creation PlanOn 2 July 2013,the Company adopted the PlantHealth Care plc 2013 Equity Incentive Plan,orthe Value Crea

202、tion Plan.Participants(which include the Executive Chairman,Chief Executive Officer and key members of the Groups senior management team)are entitled to receive a share ofthe Executive total incentive pool established by the plan.The Executive total incentive pool equals upto 10%of the equity value

203、created.Equity valuecreated is defined as thevalue generated forshareholders in excess of the initial market value of the ordinary shares increased by an 8%annual hurdle,over a four-year performance period.The initial market value was 78p(corresponding to the price of the ordinary shares issued in t

204、he April 2013 private placement).The performance period extends from 16 April 2013 to the measurement date(the 20th market trading day after announcement of the Groups financial results for the year ended 31December 2016 or such shorter period in the event of certain changes of control).The mechanic

205、s of the plan accommodate equity issuances,including option awards and ordinary shares issued in new placements or as consideration for acquisitions by adjusting the Executive total incentive pool by up to 10%of any value generated from additional fundraisings in excess of the issue price of those f

206、undraisings increased by an annual hurdle of 8%(multiplied by the number of shares issued in the additional fundraising)from the date of the fundraising up to the measurement date and the payment of dividends during the performance period.The vesting of awards under this plan is generally subject to

207、 exercise conditions.The Company may not award options that amount to more than 10%of the issued share capital of the Company.No awards have been made under the VCP plan since 15 April 2015.As at 31 December 2017,no shares were deemed to have been earned,options over Ordinary Shares granted pursuant

208、 to the VCP have expired andare nolonger capable of being exercised.(c)2015 Employee Share Option PlanOn 16 June 2015,the Company adopted the PlantHealth Care plc 2015 Employee Share OptionPlan,or the EMI Plan,which provides for thegrant ofoptions to acquire the Companys ordinary shares.Under the EM

209、I Plan,the Company may grant enterprise management incentive options,known as EMI options,to eligible bona fide employees who qualify under applicable United Kingdom(“UK”)tax law,as well as options that do not qualify as EMI options,or NQOs.Vesting of options is subject to theperformance conditions

210、set out in the applicable option agreement and pursuant to the EMI Plan.Remuneration Committee report22Plant Health Care plc Annual Report and Accounts 2017Elements of remuneration Executive Directors continuedLong-term share-based incentives continued(c)2015 Employee Share Option Plan continuedTheB

211、oard has the discretion and authority to set andmeasure the satisfaction of the performance conditions,which under the EMI Plan must be linked to the achievement of challenging financial performance over a period of at least three years,but no more than 10 years,from the date of grant andthe enhance

212、ment of shareholder value.Performance conditions may be amended,relaxed orwaived by the Board provided that any varied performance conditions would be a fairer measure ofperformance than the original performance conditions and are no more or no less difficult to satisfy than prior to the amendment.A

213、t any time,the total market value of the shares that can be acquired upon the exercise of all EMI options under the EMIPlan may not exceed 3 million.As part of the EMI Plan,the Board has adopted rulesgoverning options awarded to the Companys US employees,or the US Sub-plan to the EMI Plan.TheUS Sub-

214、plan to the EMI Plan provides for grants of both incentive stock options qualifying under section 422 of the Internal Revenue Code of 1986,asamended,and non-statutory stock options.The term of an incentive stock option may not exceed 10 years(subject to certain limitations with respect to any employ

215、ee who owns more than 10%of the voting power of all classes of the Companys outstanding ordinary shares).In the event the option holder ceases to be an employee before he or she exercises the vested portion of the option for any reason other than death,disability or by the employer for cause,the opt

216、ion shall expire three months after the date on which the option holder ceases to be an employee.In the event the option holder ceases to be an employee because of death or disability,the option holder,or his or her personal representative in the event of death,may exercise the vested portion of the

217、 option during the 12-month period following the date the option holder ceases to be an employee.In the event that the option holders employment is terminated for cause by the employer,the option will expire immediately upon the date employment is terminated.On 16 June 2015,the Company also adopted

218、the PlantHealth Care plc 2015 Non-Employee Share Option Plan,or the Non-Employee Option Plan,thatprovides for the grant of options to acquire ordinary shares to eligible option holders who arenotemployees.As part of the Non-Employee Option Plan,theBoardhas adopted rules governing options awardedto i

219、ndividuals who are not employees,or theUSSub-plan to the Non-Employee Option Plan.This sub-plan provides for grants of non-statutory stockoptions.As of 31December 2017,no awards were outstanding under the Non-Employee Option Plan or the US Sub-plan to the Non-Employee Option Plan.(d)2017 Employee Sh

220、are Option PlanOn 19 May 2017,the Company adopted the Plant Health Care plc 2017 Employee Share Option Plan,orthe 2017 ESOP,which provides for the grant of options to acquire the Companys ordinary shares.Under the2017 ESOP,the Company may grant enterprise management incentive options,known asEMI opt

221、ions,to eligible bona fide employees who qualify under applicable United Kingdom(“UK”)tax law,as well as options that do not qualify as EMI options,or NQOs.Vesting of options is subject to any performance conditions set out in the applicable option agreement and pursuant to the EMI Plan.Atany time,t

222、he total market value of the shares that can be acquired upon the exercise of all EMI options under the 2017 ESOP maynotexceed 3million.As part of the 2017 ESOP,the Board has adopted rulesgoverning options awarded to the Companys US employees,or the US Sub-plan to the 2017 ESOP.TheUS Sub-plan to the

223、 EMI Plan provides for grants of both incentive stock options qualifying under section 422 of the Internal Revenue Code of 1986,asamended,and non-statutory stock options.The term of an incentive stock option may not exceed 10years(subject to certain limitations with respect to any employee whoowns m

224、ore than 10%of the voting power of all classes of the Companys outstanding ordinary shares).Remuneration Committee report continuedCORPORATE GOVERNANCE23Plant Health Care plc Annual Report and Accounts 2017(e)Options granted outside option schemesThe Company has granted options to acquire shares pur

225、suant to separate unapproved option agreements to Michael Higgins,William Lewis and Dr Richard Webb.Generally,the options may only be exercised while the option holder is a service provider to the Company.Inthe event that the option holder ceases to be a service provider as a result of injury,ill he

226、alth or disability,upon the company for which the option holder works ceasing to be a member of the Group,or the transfer of the business that employs the option holder to a person that is not in the Group,the option may be exercised during the six-month period beginning on the date upon which the o

227、ption holder is no longer a service provider to the Company.Shares allotted under these options rank equally with all other shares in the same class in issue at the date of allotment.Ifand for so long as the allotted shares are listed or traded on any stock exchange,the Company shall apply for the s

228、hares allotted under these options to be admitted to the relevant exchange.In the event of any capitalisation issue,rights issue,consolidation,sub-division,reduction or other variation of the Companys share capital,the number and description of the shares subject to each option or the exercise price

229、 of each option shall be varied as the Board determines,provided that it considers such adjustment to be fair and appropriate.Limitations apply to the extent to which any such adjustment may reduce the price at which shares may be purchased pursuant to the exercise of an option and the exercise pric

230、e for a share to be newly issued onthe exercise of an option shall not bereduced belowits nominal value.Pension benefit United States employees were entitled to participate in the Plant Health Care,Inc.401(k)Plan.This is a defined contribution plan approved by the US Internal Revenue Service.The mai

231、n features of the plan are:participation is open to all US-based employees who have completed a probationary period after initial employment;employees may contribute a percentage of salary to the plan through a payroll withholding scheme;in 2017,the Group made matching contributions ofup to 2%throug

232、h September of 2017 and 3%thereafter of compensation to participating employees.In 2018,the Group will continue to match contributions up to 3%of compensation toparticipating employees;beginning in 2014,Group contributions vest immediately;and the plan is subject to various statutory non-discriminat

233、ion tests to ensure that it does notfavour highly compensated employees.Elements of remuneration Non-executive DirectorsDuring 2016 and 2017,the remuneration for Non-executive Directors consisted solely of fees fortheir services in connection with the Board and Board Committees.The Non-executive Dir

234、ectors receive their fees wholly in cash.24Plant Health Care plc Annual Report and Accounts 2017Service contractsDuring 2016 and 2017,the Company had service contracts with all Executive and Non-executive Directors.The Groups Chief Executive Officers employment continued through 30 November 2016,at

235、which time his employment agreement was terminated.Provisions in the service contracts of other Executive Directors(including the Executive Chairman/Interim Chief Executive Officer)include:termination may be initiated by the Company or the Director at any time with three months written notice;the Co

236、mpany may also terminate the agreement with immediate effect by paying a sum in lieu of notice equal to the basic fixed salary the Director would have been entitled to receive during the notice period;and the Company may also terminate the agreement with immediate effect at any time without notice o

237、r payment in lieu of notice for certain circumstances including gross misconduct affecting the business.Provisions in the service contracts of Non-executive Directorsinclude:each Directors appointment may be terminated with no less than three months prior written notice;and each Directors appointmen

238、t may also be terminated with immediate effect for certain circumstances including serious breach or repeated breach of any obligations to the Company;any act of fraud or dishonesty;or a declaration of bankruptcy.Directors remuneration For the years ended 31 December 2016 and 31 December 2017,the ta

239、ble below sets forth the compensation paidto the Directors and,inthe case of PaulSchmidt,reflects the compensation paid for his services as ChiefExecutive Officer through November 2016.In the case of James Ede-Golightly,reflects the compensation paid for his services as Non-executive Director throug

240、h November 2016.Base salary and fees$000Performance-relatedbonus$000Otherbenefits$000Share option benefit$000Total2017$000Total2016$000Executive:Dr C Richards130178308134Dr R Webb200144344107P Schmidt(resigned 30 November 2016)529Non-executive:M Higgins585860W Lewis(appointed 1 April 2015)333333J Ed

241、e-Golightly(resigned30November 2016)31421322743894Executive salariesAt the time of his resignation,at 30 November 2016,Paul Schmidt had a base salary of$250,000 and bonus potential of 100%.Other benefitsIn 2017,the Company contributed to the 401(k)Plan 3%(2016:2%)of eligible compensation.In 2017,pen

242、sion expense for the Executive Directors was$nil(2016:$5,523).In 2017,the Company incurred$nil(2016:$19,228)of medical,dental and life insurance expense on behalf of one Director.Other informationDuring the year,the Companys share price on AIM ranged between 13.5p and 33.0p.At 31 December 2017,the s

243、hare price was 16.25p.At 9 April 2018,the last working day prior to the approval of this annual report,the share price was 22.2p.Remuneration Committee report continuedCORPORATE GOVERNANCE25Plant Health Care plc Annual Report and Accounts 2017Report of the Directors The Directors present their annua

244、l report together with the audited financial statements for the year ended 31December 2017.See note 19 for discussion of financial risk management objectives and policies,and exposure toprice,credit,liquidity and cash flow risk.Results and dividendsThe results of the Group for the year are set out o

245、n page 33 and show a loss for the year of$5,454,000(2016:loss of$11,217,000).The Directors recommend that no dividend be paid atthis time.DirectorsThe beneficial interests of the Directors in the ordinary share capital of the Company and options to purchase ordinary shares of the Company as of 31 De

246、cember 2017 were as follows:At 31 December 2017SharesOptionsDr C Richards1,263,253*1,503,673Dr R Webb868,4001,606,189M Higgins60,000117,647W Lewis373,46089,686*Includes a beneficial interest of William Richards,a minor child of Dr Christopher Richards,of 34,578 ordinary shares.None of the Directors

247、has any holding in any subsidiary company,nor any material interest in the transactions of the Group.Substantial shareholdersOn 9 April 2018,the Directors are aware of the following persons who,directly or indirectly,are interested in 3%or more of the Companys existing ordinary share capital:NameSha

248、res heldPercent of issuedshare capital*Richard Griffiths63,447,43236.711798 Volantis35,675,17120.64Boulder River Capital Corporation and its affiliates12,651,4447.32Polar Capital12,044,0986.97City Financial6,529,2453.78Universities Superannuation Scheme(USS)5,531,5583.20*The percentages shown are ba

249、sed on the most recent share register analysis or notification.Research and developmentThe Group continues to invest in R&D activities with an emphasis on the improvement of existing technologies,the formulation of products to meet specific customer needs and the development of proprietary Groups bi

250、ostimulants based on the Companys Harpin platform technology.For further details of the Groups R&D activities,see the Chairmans letter and Strategic report on pages 6 to 15.Business reviewFor a discussion of the Groups 2017 performance and future developments,see the Chairmans letter and Strategic r

251、eport on pages 6 to 15.26Plant Health Care plc Annual Report and Accounts 2017Board meetings and attendanceThe following table shows the attendance of Directors at meetings of the Board,Audit Committee and Remuneration Committee held during the 2017 financial year:BoardAudit CommitteeRemuneration Co

252、mmitteeNumber of meetings held945Dr C Richards91Dr R Webb9M Higgins945W Lewis925AuditorAll of the Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Companys auditor for the purposes of its audit and to ensure that the auditor i

253、s aware of that information.The Directors are not aware of any relevant audit information of which the auditor is unaware.Post balance sheet eventOn 27 February 2018,the Group successfully completed an equity raise which generated$6.7 million from new and existing investors.Going concernIn considera

254、tion of the Groups current resources and review of financial forecasts and projections,the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.No material uncertainties that may cast significant doubt about the

255、 ability of the Company to continue as a going concern have been identified by the Directors.Accordingly,the Directors continue to adopt the going concern basis in preparing the annual report and accounts.Annual general meetingAt the forthcoming annual general meeting of the Company,resolutions will

256、 be put forward to re-elect DrRichard Webb as a Director and to re-appoint BDO LLP as the auditor of the Company.By Order of the BoardChristine MazzoneCompany Secretary9 April 2018Directors report CORPORATE GOVERNANCE27Plant Health Care plc Annual Report and Accounts 2017The Directors are responsibl

257、e for preparing the annual report and the financial statements in accordance withapplicable law and regulations.Company law requires the Directors to prepare financial statements for each financial year.Under that law,the Directors have elected to prepare the Group financial statements in accordance

258、 with International Financial Reporting Standards(“IFRSs”),as adopted by the European Union,and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice(United Kingdom Accounting Standards and applicable law).Under company law,the Directors must not a

259、pprove the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.The Directors are also required to prepare financial statements in accordance with the rules of the Lo

260、ndon Stock Exchange for companies trading securities onAIM.In preparing these financial statements,the Directors are required to:select suitable accounting policies and then apply them consistently;make judgements and accounting estimates that are reasonable and prudent;state whether they have been

261、prepared in accordance with IFRSs,as adopted by the European Union,subject to any material departures disclosed and explained in the financial statements;and prepare the financial statements on the going concern basis,unless it is inappropriate to presume that theCompany will continue in business.Th

262、e Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable accuracy,at any time,the financial position of the Company and the Group and enable them to ensure that the financial statements comply w

263、ith the requirements of the Companies Act 2006.They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.Website publicationThe Directors are responsible for ensuring the

264、 annual report and the financial statements are made available ona website.Financial statements are published on the Companys website in accordance with legislation inthe United Kingdom governing the preparation and dissemination of financial statements,which may vary from legislation in other juris

265、dictions.The maintenance and integrity of the Companys website is the responsibility of the Directors.The Directors responsibility also extends to the ongoing integrity of the financial statements contained therein.Statement of Directors responsibilities28Plant Health Care plc Annual Report and Acco

266、unts 2017FINANCIAL STATEMENTS29 Independent auditors report33 Consolidated statement of comprehensive income34 Consolidatedstatementoffinancialposition35 Consolidatedstatementofchangesinequity36 Consolidatedstatementofcashflows37 NotesformingpartoftheGroupfinancialstatements59 Companystatementoffina

267、ncialposition60 Companystatementofchangesinequity61 NotesformingpartoftheCompanyfinancialstatements64 Directors and advisersFINANCIAL STATEMENTS29Plant Health Care plc Annual Report and Accounts 2017OpinionWe have audited the financial statements of Plant Health Care plc(the“parent company”)and its

268、subsidiaries(the“Group”)for the year ended 31 December 2017 which comprise the consolidated statement of comprehensive income,the consolidated statement of financial position,the consolidated statement of changes in equity,the consolidated statement of cash flows,the Company statement of financial p

269、osition,the Company statement of changes in equity and the related notes to the financial statements,including a summary of significant accounting policies.The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International

270、 Financial Reporting Standards(“IFRSs”)as adopted by the European Union.The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards,including Financial Reporting Standard 102 The Finan

271、cial Reporting Standard Applicable in the United Kingdom and Republic ofIreland(United Kingdom Generally Accepted Accounting Practice).In our opinion:the financial statements give a true and fair view of the state of the Groups and of the parent companys affairs as at 31 December 2017 and of the Gro

272、ups loss for the year then ended;the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;and the f

273、inancial statements have been prepared in accordance with the requirements of the Companies Act 2006.Basis for opinionWe conducted our audit in accordance with International Standards on Auditing(UK)(“ISAs(UK)”)and applicable law.Our responsibilities under those standards are further described in th

274、e Auditors responsibilities for the audit of the financial statements section of our report.We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,including the FRCs Ethical Standard as a

275、pplied to listed entities,and we have fulfilled our other ethical responsibilities in accordance with these requirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Use of our reportThis report is made solely to the Companys me

276、mbers,as a body,in accordance with Chapter 3 of Part 16 of the Companies Act 2006.Our audit work has been undertaken so that we might state to the Companys members those matters we are required to state to them in an auditors report and for no other purpose.To the fullest extent permitted by law,we

277、do not accept or assume responsibility to anyone other than the Company and the Companys members as a body,for our audit work,for this report,or for the opinions we have formed.Conclusions relating to going concernWe have nothing to report in respect of the following matters in relation to which the

278、 ISAs(UK)require us to report to you where:the Directors use of the going concern basis of accounting in the preparation of the financial statements is not appropriate;or the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doub

279、t about the Groups or the parent companys ability to continue to adopt the going concern basis of accounting for a period of at least 12 months from the date when the financial statements are authorised for issue.Independent auditors report to the members of Plant Health Care plc30Plant Health Care

280、plc Annual Report and Accounts 2017Independent auditors report to the members of Plant Health Care plc continuedKey audit mattersKey audit matters are those matters that,in our professional judgement,were of most significance in our audit of the financial statements of the current period and include

281、 the most significant assessed risks of material misstatement(whether or not due to fraud)we identified,including those which had the greatest effect on:the overall audit strategy,the allocation of resources in the audit;and directing the efforts of the engagement team.These matters were addressed i

282、n the context of our audit of the financial statements as a whole,and in forming our opinion thereon,and we do not provide a separate opinion on these matters.Key audit matterAudit responseRevenue recognition(note 3)The Group generates revenue primarily from the sale of Thirdparty and proprietary pr

283、oducts.We considered there to be a significant audit risk arising from inappropriate or incorrect recognition of revenue where the Group makes sales under specific agreements and contracts.These contractual sales differ to“normal”product sales in that the terms are more complex and the accounting is

284、 therefore more susceptible to fraud/error.The sales agreements will frequently have several components such as protracted payment terms,multiple performance conditions and other rebate/support paymentswhich need to be suitably considered and accounted for so as to ensure revenue is not recorded ina

285、ccurately/recognised prematurely.Our procedures included reviewing the Groups adopted revenue recognition policy to ensure that it complies with accounting standards and has been consistently applied throughout the year.A sample of sales agreements subject to additional contractual terms signed duri

286、ng the year were reviewed in conjunction with managements proposed accounting treatment and BDO assessed whether the terms under the contract had been fulfilled and the revenue appropriately recognised.Where rebates/marketing support payments are provided bytheGroup,for a sample BDO has agreed the e

287、stimations made by management to the supporting information(historical,currentand forecast)to ensure that the amount of revenue recognised is appropriate.Recoverability of accounts receivable(note 16)The Group has significant accounts receivable balances at the year end,as the credit terms provided

288、are frequently in excess of 90 days extending in some instances to greater than 12 months,the collectability of these balances at the point of sign off is judgemental.Where funds have been collected post year end we have reviewed evidence of the bank receipts and for balances subject to payment plan

289、s we have checked that receipts are in accordance with these plans.In instances where balances are not yet due we have reviewed managements assessment of the recoverability which included looking at historical payment patterns.This was discussed with both Executive and Non-executive Directors who ex

290、plicitly confirmed their expectation that the accounts receivable balance would be recovered in full.Our application of materialityWe apply the concept of materiality both in planning and performing our audit,and in evaluating the effect of misstatements.Weconsider materiality to be the magnitude by

291、 which misstatements,including omissions,could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.Importantly,misstatements below these levels will not necessarily be evaluated as immaterial as we also take into account the nature of identifi

292、ed misstatements,and the particular circumstances of their occurrence,when evaluating their effect on the financial statements as a whole.We determined materiality for the financial statements as a whole to be$300,000(2016:$400,000)which represents 5%of loss before tax(2016:5%loss before tax excludi

293、ng non-recurring items).We used loss before tax as a benchmark as this is a primary KPI used to address the performance of the business by the Board.Materiality for the parent company was set at$150,000(2016:$200,000).Performance materiality is the application of materiality at the individual accoun

294、t or balance level set at an amount to reduce to anappropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality forthe financial statements as a whole.Performance materiality was set at 75%(2016:75%)of materiality.In setting the level of

295、performance materiality we considered a number of factors including the expected total value of known and likely misstatements(based on past experience and other factors)and managements attitude towards proposed adjustments.We agreed with the Audit Committee that misstatements in excess of$15,000(20

296、16:$20,000),which are identified during the audit,would be reported to it,as well as smaller misstatements that in our view must be reported on qualitative grounds.FINANCIAL STATEMENTS31Plant Health Care plc Annual Report and Accounts 2017An overview of the scope of our auditWe tailored the scope of

297、 our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole,taking into account the geographic structure of the Group,the accounting processes and controls,and the industry in which the Group operates.In establishing the overall approach to

298、 the Group audit,we assessed the audit significance of each reporting unit in the Group by reference to both its financial significance and other indicators of audit risk,such as the complexity of operations and the degree ofestimation and judgement in the financial results.Classification of compone

299、ntsA full scope statutory audit was carried out for the UK subsidiary.BDO Mexico was engaged as both local statutory auditor and component auditor,to perform a full scope audit of financial information.We instructed BDO Mexico as to the scope and timing of its work on the financial information for G

300、roup reporting purposes;we met with the audit team to review its audit documentation and findings.Furthermore,we visited the Groups Mexican facility to ensure we obtained a full understanding of the operational activities and appropriately scoped risks and agreed responses to those risks,meeting loc

301、al management.Work on all remaining components was completed by BDO UK,with individual component audits carried out using component materialities of between 1850%of overall financial statement materiality.The US was identified as an individually significant component(determined as those that were gr

302、eater than 15%revenue)and full scope audit procedures were planned and performed by the UK team accordingly.We visited this location to ensure we obtained a full understanding of the operational activities,met with management and appropriately scoped risks.Specific procedures have been performed ove

303、r the Spanish subsidiary.This was also inclusive of a meeting with local management.Other informationThe Directors are responsible for the other information.The other information comprises the information included in the annual report,other than the financial statements and our Auditors report there

304、on.Our opinion on the financial statements does not cover the other information and,except to the extent otherwise explicitly stated in our report,we do not express any form of assurance conclusion thereon.In connection with our audit of the financial statements,our responsibility is to read the oth

305、er information and,in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.If we identify such material inconsistencies or apparent material misstatements,we are

306、 required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information.If,based on the work we have performed,we conclude that there is a material misstatement of this other information,we are required to report that fact.We ha

307、ve nothing to report in this regard.Opinions on other matters prescribed by the Companies Act 2006In our opinion,based on the work undertaken in the course of the audit:the information given in the Strategic report and the Directors report for the financial year for which the financial statements ar

308、e prepared is consistent with the financial statements;and the Strategic report and the Directors report have been prepared in accordance with applicable legal requirements.Matters on which we are required to report by exceptionIn light of the knowledge and understanding of the Group and the parent

309、company and its environment obtained in the course of the audit,we have not identified material misstatements in the Strategic report or the Directors report.We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if,in o

310、ur opinion:adequate accounting records have not been kept,or returns adequate for our audit have not been received from branches not visited by us;or the parent company financial statements are not in agreement with the accounting records and returns;or certain disclosures of Directors remuneration

311、specified by law are not made;or we have not received all the information and explanations we require for our audit.32Plant Health Care plc Annual Report and Accounts 2017Responsibilities of DirectorsAs explained more fully in the Directors responsibilities statement set out on page 27,the Directors

312、 are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view,and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,whether due to

313、 fraud or error.In preparing the financial statements,the Directors are responsible for assessing the Groups and the parent companys ability to continue as a going concern,disclosing,as applicable,matters related to going concern and using the going concern basis of accounting unless the Directors e

314、ither intend to liquidate the Group or the parent company or to cease operations,or have no realistic alternative but to do so.Auditors responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are fr

315、ee from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion.Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordance with ISAs(UK)will always detect a material misstatement when it exists.

316、Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.A further description of our responsibilities for the audit of t

317、he financial statements is located on the Financial Reporting Councils website at:www.frc.org.uk/auditorsresponsibilities.This description forms part of our Auditors report.Iain Henderson(Senior Statutory Auditor)For and on behalf of BDO LLP,Statutory Auditor55 Baker Street London W1U 7EU9 April 201

318、8BDO LLP is a limited liability partnership registered in England and Wales(with registered number OC305127).Independent auditors report to the members of Plant Health Care plc continuedFINANCIAL STATEMENTS33Plant Health Care plc Annual Report and Accounts 2017Note2017$0002016$000Revenue47,6856,329C

319、ost of sales(2,953)(2,436)Gross profit4,7323,893Research and development expenses(5,127)(4,485)Business development expenses(623)(954)Sales and marketing expenses(2,995)(2,518)Administrative expenses(1,788)(7,286)Operating loss5(5,801)(11,350)Finance income108752Finance expense10(2)(2)Loss before ta

320、x(5,716)(11,300)Income tax credit1126283Loss for the year attributable to the equity holders of the parent company(5,454)(11,217)Other comprehensive income:Items which will or may be reclassified to profit or loss:Exchange difference on translation of foreign operations(1,282)1,393Total comprehensiv

321、e loss for the year attributable to the equity holders oftheparent company(6,736)(9,824)Basic and diluted loss per share12$(0.04)$(0.11)The notes on pages 37 to 58 form part of these consolidated financial statements.Consolidated statement of comprehensive incomefor the year ended 31 December 201734

322、Plant Health Care plc Annual Report and Accounts 2017Note2017$0002016$000AssetsNon-current assetsIntangible assets131,8982,162Property,plant and equipment149681,236Trade and other receivables16134131Total non-current assets3,0003,529Current assetsInventories151,5361,245Trade and other receivables164

323、,6683,284Investments192,7195,349Cash and cash equivalents1,1754,727Total current assets10,11814,605Total assets13,11818,134LiabilitiesCurrent liabilitiesTrade and other payables172,8792,088Finance leases1888Total current liabilities2,8872,096Non-current liabilitiesFinance leases187Total non-current

324、liabilities7Total liabilities2,8872,103Total net assets10,23116,031Share capital212,2372,237Share premium2279,78679,786Foreign exchange reserve22(389)893Accumulated deficit22(71,403)(66,885)Total equity10,23116,031The consolidated financial statements were approved and authorised for issue by the Bo

325、ard on 9 April 2018.Christopher RichardsDirectorRegistered no:05116780(England and Wales)The notes on pages 37 to 58 form part of these consolidated financial statements.Consolidated statement of financial positionat 31 December 2017FINANCIAL STATEMENTS35Plant Health Care plc Annual Report and Accou

326、nts 2017Share capital$000Share premium$000Foreignexchangereserve$000Accumulated deficit$000Total$000Balance at 1 January 20161,23671,040(500)(56,731)15,045Loss for the year(11,217)(11,217)Exchange difference arising on translation of foreign operations1,3931,393Total comprehensive income/(loss)1,393

327、(11,217)(9,824)Shares issued1,0018,7469,747Share-based payments1,0631,063Options exercisedBalance at 31 December 20162,23779,786893(66,885)16,031Loss for the year(5,454)(5,454)Exchange difference arising on translation of foreign operations(1,282)(1,282)Total comprehensive income/(loss)(1,282)(5,454

328、)(6,736)Shares issued Share-based payments936936Options exercisedBalance at 31 December 20172,23779,786(389)(71,403)10,231The notes on pages 37 to 58 form part of these consolidated financial statements.Consolidated statement of changes in equityfor the year ended 31 December 201736Plant Health Care

329、 plc Annual Report and Accounts 2017Note2017$0002016$000Cash flows from operating activitiesLoss for the year(5,454)(11,217)Adjustments for:Depreciation14393359Amortisation of intangibles13264273Share-based payment expense9361,063Finance income10(87)(52)Finance expense1022Income taxes credit(262)(83

330、)(Increase)/decrease in trade and other receivables(1,024)1,145Gain on disposal of fixed assets(4)(14)(Increase)/decrease in inventories(291)146Increase/(decrease)in trade and other payables771(973)Income taxes paid(121)205Net cash used in operating activities(4,877)(9,146)Investing activitiesPurcha

331、se of property,plant and equipment14(125)(469)Sale of property,plant and equipment471Finance income108752Purchase of investments(2,258)(7,918)Sale of investments4,88810,060Net cash provided by investing activities2,5961,796Financing activitiesFinance expense10(2)(2)Issue of ordinary share capital9,7

332、47Repayment of finance lease principal(8)(9)Net cash(used)/provided by financing activities(10)9,736Net(decrease)/increase in cash and cash equivalents(2,291)2,386Effects of exchange rate changes on cash and cash equivalents(1,261)1,393Cash and cash equivalents at the beginning of period4,727948Cash

333、 and cash equivalents at the end of period1,1754,727The notes on pages 37 to 58 form part of these consolidated financial statements.Consolidated statement of cash flowsfor the year ended 31 December 2017FINANCIAL STATEMENTS37Plant Health Care plc Annual Report and Accounts 20171.General informationPlant Health Care plc(the Company)is a public limited company incorporated in England and Wales.The