Plant Health Care (PHC) 2021年年度報告「LSE」.pdf

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1、HELPING FARMERS TO SUSTAINABLY GROW MOREPlant Health Care plcAnnual report and accounts 2021BY 2050 THE WORLD WILL NEED 60%MORE FOODOur products support sustainable food production by using nature to enable farmers to produce more from less land,whilst protecting soils and biodiversity and reducing

2、reliance on chemical fertilisers.OUR MISSION AND VALUESSustainability We care passionately about sustainability.All of our products help farmers grow crops more sustainably.We aim to support mainstream agriculture,aswell as organic growers,to feed the world sustainably.Science We believe that scienc

3、e drives progress.All of our products are built by leading edge science.We understand how they work,so that we can make them even more effective and more sustainable.People We are a team which works together to achieve our aims.We help our people develop their full potential,working with customers a

4、nd other stakeholders to deliver our mission.Prosperity Economic sustainability is essential to our success as a business.Our work should create financial benefits for our customers,partners and employees,alongside shareholders.STRATEGIC REPORT1 Overview2 2021 in review4 At a glance6 Business model

5、and strategy8 Chairmans statement9 Chief Executive Officers statement11 Commercial business14 New technology16 Science18 Financial summary20 Key performance indicators(“KPIs”)22 Section 172 statement24 Sustainability30 Risks and uncertaintiesCORPORATE GOVERNANCE32 Board of Directors35 Corporate gove

6、rnance report38 Audit Committee report40 Remuneration Committee report42 Report of the Directors45 Statement of Directors responsibilities46 Corporate governance statementFINANCIAL STATEMENTS48 Independent auditors report53 Consolidated statement of comprehensiveincome54 Consolidated statement of fi

7、nancialposition55 Consolidated statement of changes inequity56 Consolidated statement of cashflows57 Notes forming part of the Group financialstatements80 Company statement of financialposition81 Company statement of changes inequity82 Notes forming part of the Company financialstatements86 Director

8、s and advisersIN THIS REPORT Learn more in our business model on page 6 Learn more in our financial summary on page 18OVERVIEWFINANCIAL HIGHLIGHTS Plant Health Care is a leading provider of biological products,helping farmers to feed the world sustainably.The market for biological products is growin

9、g at 12%per annum and is projected to be a$19 billion market by 2026.Plant Health Cares core patented products act as“vaccines for plants”,making plants healthier,better able to resist disease and stress,thereby improving crop yield and quality.Sales of the Groups Harpin product increased by 55%in 2

10、021,as market shares grew in core markets;the Commercial business is profitable and cash generative.The Company has invested more than$25million in PREtec,a powerful new platform technology,since 2012.PREtec products are targeting markets worth more than$5 billion around theworld.The first PREtec pr

11、oduct Saori,was launched in Brazil in 2021,through our partner Nutrien,generating a very positive response from growers.REVENUE($m)$8.4mCASH AND INVESTMENTS($m)$9.2mGROSS PROFIT MARGIN(%)59%ADJUSTED LBITDA($m)$4.6m Stay up to date on our website at 1Annual report and accounts 2021STRATEGIC REPORTCOS

12、T-EFFECTIVE PRODUCTS FOR SUSTAINABLE AGRICULTURE2021 IN REVIEWIt is imperative that agriculture becomes more sustainable,while continuing to feed the world.Plant Health Care aims to help mainstream farmers to become more sustainable by providing cost-effective,environmentally friendly alternatives t

13、o conventional agrochemicals.Our products are classified by the Environmental Protection Agency of the USA as“low toxicity and zero residue”;as such,they receive“fast track”approval.MEXICO Plant Health Care Mexico sells a range of sustainable products tofarmers in Mexico.Harpin represented 23%of sal

14、es in 2021,with third-party products making up the remainder.PlantHealth Care Mexico employs a staff of 16,including sales and technical specialists in the field,selling to retailers throughout the country.Sales in Mexico were held back in 2021 due to decreased domestic demand for fruits and vegetab

15、les and reduced plantings in Baja California due to adverse weather conditions.NORTH AMERICACORN Harpin is sold into corn through the second largest distributor in the USA.Farmers apply Harpin to the seed prior to planting;the crop comes up stronger and taller and better able to resist stress such a

16、s drought.Higher yields result.Sales of Harpin increased 29%,reaching 841,000 acres in 2021.In-market sales into the Corn market since 2019 have grown at 55%Compound Annual Growth Rate(“CAGR”).FRUITS AND VEGETABLES Harpin is also sold into the specialty market through our partner Wilbur-Ellis.Sales

17、of Harpin increased 142%to 157,000 ounces in 2021 due to increased sales into the California almond and grape markets.In-market sales into the fruits and vegetable markets since 2019 have grown at 116%CAGR.HARPIN 242kounces in 2020HARPIN 362kounces in 2021HARPIN 139kounces in 2020HARPIN 145kounces i

18、n 20212Plant Health Care plcEMEAA In Spain,Harpin is sold as ProAct AA,where sales into fruit and vegetable crops have now reached$1.2million.Sales growth in Spain was driven by Harpin sales into citrus andexpansion into the greenhouse market.In the UK,Harpin is sold through Headland,a major distrib

19、utor supplying to the professional turf market.Many leading golf courses and football fields are greener and more resilient to abiotic stress as a result.The Group signed an exclusive Harpin distribution agreement with UK market leader Agrii in July 2021.SOUTH AMERICA Harpin is sold as H2Copla into

20、sugar cane in Brazil,through Coplacana,the largest distributor of inputs for this crop.SalesinBrazil sugarcane grew 100%under challenging droughtconditions throughout 2021.In-market sales into thesugar canemarket since 2019 have grown at 103%CAGR.The Group received registration for Harpin in Argenti

21、na for use in corn and soybeans in August 2021 with first year sales planned for the 2022 cropping season.In September 2021,the Group successfully launched Saori insoybeans for Asian soybean rust control through our partner Nutrien.HARPIN 53,000acres treated in 2020HARPIN 233kounces in 2020HARPIN 10

22、5,000acres treated in 2021HARPIN 289kounces in 2021Adoption of Plant Health Cares products are accelerating in core target markets.”3Annual report and accounts 2021STRATEGIC REPORT2021 HIGHLIGHTSCOMMERCIAL Revenue was$8.4 million(2020:$6.6million),a 28%increase on the prior year,24%in constant curre

23、ncy*.Proprietary product revenue increased$2.2 million or 58%to$6.1 million(2020:$3.9 million).The Commercial business wasEBITDA and cash positive for the second year straight.On-ground sales*in Brazil and the USA increased 48%and 85%,respectively.PREtec PRODUCTS Successful launch of Saori in Brazil

24、.PHC949 was submitted for registration in the USA.Low-cost manufacture of PREtec peptides was demonstrated at the pilot scale.The Group has a rich pipeline from the PREtec platform.PREtec is a patented platform technology,targeting$5 billion market opportunities.These vaccines for plants use environ

25、mentally friendly peptides,derived from natural proteins,to make plants healthier and help growers produce larger yields and betterquality crops.GROUP Cash used in operations increased to$3.2 million(2020:$2.5 million).Adjusted LBITDA*increased to$4.6million(2020:$3.3 million).Cash and cash equivale

26、nts including investments at 31 December 2021 were$9.2 million(2020:$4.1 million).The Company successfully raised 6.6million($9.1 million)through the issuance of new ordinary shares in March 2021.PREtec TARGETING AT LEAST ONE MAJOR LAUNCH EVERY YEAR*Constant currency is defined on page 10.*On-ground

27、 sales is defined as sales by our distributors to growers.*Adjusted LBITDA:loss before interest,tax,depreciation,amortisation,share-based payments and intercompany foreign exchange.AT A GLANCERegulatory submissionRegulatory approvalLaunch ofproduct2021202220232024PHC279 USASAORI$3M TARGET$7M TARGETD

28、isease controlSaoriNematode controlPHC949 USA$10M TARGETPHC949 BRAZIL$5M TARGETNematode controlKey:A SUCCESSFUL JOURNEY4Plant Health Care plc2021 SALES SPLIT BY REGION($m)19 19+4646+3535+M+M2021 SALES SPLIT BY PRODUCT($m)71 71+2929+M+M 71%Harpin 29%Third party products*Third party products sold in M

29、exico.19%Rest of World 46%Americas 35%MexicoREVENUE($m)$8.4m6.46.68.42019 2020 2021CASH AND INVESTMENTS($m)$9.2m2.44.19.22019 2020 2021ADJUSTED LBITDA($m)$4.6m(3.8)(3.3)(4.6)2019 2020 2021$1.6m$6.1m$2.3m$3.8m$3.0m5Annual report and accounts 2021STRATEGIC REPORTHOW WE DO BUSINESSBUSINESS MODEL AND ST

30、RATEGYThe Company develops and commercialises products which support mainstream farmers to produce better crops,more efficiently and more sustainably.The Commercial business is EBITDA positive and generates cash.It is focused on driving the revenue of Harpin in large markets,where the product adds t

31、he most value.The current major targets are corn and specialty crops in the USA and sugar cane in Brazil.We will extend sales of Harpin into new crops and countries over time.The Group successfully launched its first product,Saori,from its PREtec platform for use in Brazil on soybeans to prevent Asi

32、an soybean rust.Global product development is complex,expensive and time consuming.We will often work with strong local partners under Joint Development Agreements,to share experience and investment,sharing profit from commercialisation.We make appropriate use of outsourcing to optimise the use of c

33、apital.We work with manufacturing partners to produce high-quality products using the Groups proprietary production processes,developed in our laboratories in Seattle.We do not plan to own manufacturing assets.We develop extensive intellectual property,mainly in our Seattle laboratory.We intend to c

34、ontinue investing in our IP,to defend and extend our lead in innovation with peptides for agriculture.We are active players in the global market for biological products,whichis growing at more than 16%annually.There are numerous players in a fragmented market,which we expect to consolidate over time

35、.Ourglobal capabilities in innovation and commercial development position us well for this trend.We are investing to develop and launch products from the PREtec platform.Thelatest target market of PHC279 will be in the USA for use on fruits,vegetables and tree nuts.The Group filed a submission with

36、the USA Environmental Protection Agency(“EPA”)for PHC949 to help prevent nematode losses in crops.Weaim to launch at least one large new PREtec product every year from 2021 onwards.Wewill start the development ofPREtec products in Europeduring 2022.We work in partnerships with influential distributo

37、rs,which enable us to access large numbers of farmers.Our distribution partners provide valued technical advice onthe best use of our products.Weworktogether to drive product adoption,to mutual benefit.GENERATING CASHCREATING SHARED VALUEBUILDING ON OUR OPPORTUNITIESINVESTING IN PRODUCTSWORKING IN P

38、ARTNERSHIPFind out more on page 11Find out more on page 14Find out more on page 116Plant Health Care plcOUR GROWTH STRATEGYOur future growth will be achieved by focusing on the following key areas:SUBSTANTIAL INCREASE IN MARKETACCESSSTRATEGYWe intend to drive revenue in the short term by focusingon

39、distribution of Harpin by aligning with large distributors with broad market access.We plan toexpand sales in broad acre crops where Harpin provides the most benefit to farmers,including sugar cane,corn,soy,citrus,rice,almonds and grapes.With the launch of Saori in Brazil,we have gained access to th

40、e 99 million acre soybean market.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating loss LBITDALAUNCHING PEPTIDE PRODUCTS FROMOURPREtec PLATFORMSSTRATEGYOur target is to launch at least one PREtec product in a major market every year.The launch of Saori in Brazil in 2021 was the first.

41、The next target is the USA launch of PHC279 into specialty crops in the USA with Wilbur-Ellis.LINKS TO KPIS Revenue Gross profit Gross profit margin LBITDAFURTHER BUILDING THE CAPABILITY TO DELIVER ADDITIONAL PRODUCTS FROMPREtecSTRATEGYThe Group made a significant capital investment by building a pi

42、lot plant facility in our Seattle location.This allows the Group to produce peptides on a pilot scale and assist with developing and optimising manufacturing methods.The Group also secured a production facility for PHC279,which led to the achievement of our volume cost targets.LINKS TO KPIS Revenue

43、Gross profit Gross profit margin LBITDAIP PROTECTION AND ONGOINGINNOVATIONSTRATEGYThe Group has an extensive library of PREtec peptides,which can be further expanded.The Group has now been granted the first patents for PREtec peptides by the USPTO;numerous filings are in the process of being reviewe

44、d around the world,as the Group builds its IP portfolio.The Group has been issued 18 patents and more than 50 applications in 11 countries and the European Patent Office.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating loss LBITDA1234CONSOLIDATIONSTRATEGYThe Group is well positioned

45、to take a lead in consolidating this fragmented sector,due to its strong portfolio and market access.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating lossSUSTAINABILITYSTRATEGYThe Groups products have been classified as“low toxicity”products and quality for fast track regulatory appr

46、oval in the USA and Brazil.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating loss567Annual report and accounts 2021STRATEGIC REPORTSUSTAINABLE GROWTHCHAIRMANS STATEMENTDr Richard Webb,Non-executive Chairman2021 has been an excellent year of delivery against promise.The market for sust

47、ainable agriculture is growing at more than 12%per annum;Plant Health Care aims to grow faster than that market.Sustainability is at the heart of everything we do.DELIVERING PERFORMANCEPlant Health Care delivered strong results in 2021,ahead of market expectations.We are resolved to set and achieve

48、realistically ambitious targets each year;this is the start of a new trend.SUSTAINABILITYThe benign profile of our technology has long attracted investor attention.PHC applied for and gained the LSEs Green Economy Mark in 2021.This is gratifying,but in a sense it understates our case.We are world le

49、aders in the use of biological signals to engage the natural powers of crop plants to protect themselves from stresses like drought or frost,and to defend themselves against pests and diseases.This is good not only for crop yields,plant health and harvest quality,but it also improves soil health,boo

50、sts carbon sequestration,and reduces the need for pesticides.STRATEGYSince 2018,we have evolved our strategy from a focus on licensing our technology to major suppliers of agrochemicals,towards working with distributors.In the USA,we have been working with two of the four largest distributors since

51、2019;these relationships have developed into productive partnerships,combining sales of Harpin today with collaboration to bring PREtec products to the market in 2022 and beyond.The addition of two more major distributor relationships in 2021 is a further important step in the development of this st

52、rategy.I am increasingly convinced that our distributor partners will drive the adoption of our technologies over the coming years,to the benefit of the farming industry as it seeks to adopt more sustainable practices.PREtec “VACCINES FOR PLANTS”I am immensely proud that we are now launching the fir

53、st products.We are now confident of launching a new PREtec product every year in a major market,via a major distributor.This has required securing scale up production capability in house,and manufacturing capacity externally.In 2021 we installed pilot production capacity in our technology centre in

54、Seattle,which supplied launch volumes of Saori.We also signed a major biologicals manufacturer in the EU to supply both Harpin and PREtec products at scale,and at a lower manufacturing cost.COVID-19The world had to cope with the continued pandemic throughout 2021.In Plant Health Care,both the Board

55、and Executives adapted well to the use of remote working and I am delighted to say that everyone in the team stayed safe.At the same time,demand for our products remained buoyant and continued to grow;we are fortunate to be in an industry which was largely unaffected by thepandemic in 2021.UKRAINETh

56、e directors have been watching the heartbreaking situation happening in Ukraine.We anticipate the conflict to have no material impact on the Groups operations.The Group currently has no customers or manufacturers in Ukraine or Russia and we do not anticipate any business dealings in the long-term wi

57、th either of thesecountries.PEOPLEIn the face of 2021s worldwide challenges,our people have been thriving.During the year,Christopher Richards,as CEO,stepped back from operational management to focus on strategy and investor relations.Operational management was substantially delegated to the very ex

58、perienced hands of Jeff Tweedy(COO),who has been the architect of the Companys successful strategy of focusing on distributors.With his fellow Executive Director Jeffrey Hovey(CFO),supported by a very strong Executive Committee,Plant Health Care boasts outstanding leadership.DR RICHARD WEBBNon-execu

59、tive Chairman11 May 20228Plant Health Care plcACCELERATING PERFORMANCECHIEF EXECUTIVE OFFICERS STATEMENTDr Christopher Richards,Chief Executive OfficerPlant Health Cares encouraging performance in 2021 demonstrated the strength of our competitive position.In our sector of sustainable products for ag

60、riculture,we have a unique combination of proven products,with low costs of goods and very strong market access.During the year,we launched Saori,the first product from the PREtecplatform,in which we have invested morethan$25million over the last eight years.Mid-termsales of Saori are now expected t

61、o exceed the entire current revenue of Plant Health Care today and we plan tofollow that with at least one major product launch every year.PERFORMING ABOVE EXPECTATIONSRevenue growth accelerated in 2021,with Harpin sales up 55%,lifting overall sales growth to 28%(24%in constant currency).The Commerc

62、ial business remains profitable and cash generative.We invested$3.0 million in the PREtec platform,focused on obtaining registrations and refining manufacturing costs to support our plan for at least one major product launch every year,starting with the launch of Saori in Brazil in 2021.STRONGER BAL

63、ANCE SHEETWe were very pleased to receive the support of shareholders for a fundraise in March 2021,raising$9.1 million(net of costs).With that improved funding,we increased investment in PREtec product launches during 2021.As a result,the Company increased the rate of cash burn to$4.1 million.At th

64、e end of 2021,our cash reserves were$9.2 million.We are confident that Plant Health Care will reach profit within these cash reserves.ACCELERATING COMMERCIAL SALESSales of our core Harpin product were up 55%in 2021,at a gross margin of 70%.This growth is testament both to the outstanding grower bene

65、fits of the product and to the strength of our market access.Our suite of distribution partners was widened to include Nutrien,the worlds largest agriculture retailer,in Brazil and market leader Agrii in the UK.We now have close relationships with four of the worlds largest distributors of agricultu

66、re inputs;in total,we have access to some 52 million hectares of crops,with a$5 billion set of opportunities.Our three largest customers for Harpin each bought more than$1 million worth in 2021.Sales of Harpin in the USA reached$2.8 million,as in-market sales into corn and specialty crops(fruits and

67、 vegetables)accelerate.In-market sales into specialty crops since 2019 have grown at 116%CAGR and we anticipate continued growth at this level.In Brazil,Harpin sales reached$1.0 million;in-market sales into sugar cane have grown at 103%CAGR since 2019.Sales in our Europe/Africa/Asia region reached$1

68、.6 million.DR CHRISTOPHER RICHARDSChief Executive Officer11 May 20229Annual report and accounts 2021STRATEGIC REPORTTHE LAUNCH OF SAORI THE FIRST“VACCINE FOR PLANTS”After eight years of research and development,we were excited to launch our first PREtec product,Saori,in Brazil in September 2021.Saor

69、i promotes healthy growth of soybeans and helps them fight disease;Brazilian soybean growers spent$2.5 billion on fungicides to control disease in 2021,so this is a huge opportunity for Saori.With limited volume of product available,we focused on demonstrating the benefits of Saori in 2021;approxima

70、tely 250 farmers tested the product and the reaction was enormously positive.Our partner Nutrien is planning to sell Saori on more than 300,000 hectares in 2022,which will result in sales well in excess of$0.75 million for PHC in 2022.Nutrien is targeting sales of more than 1 million hectares in 202

71、5.With commercial production now established,we are confident that Saori will generate gross margins at least comparable to those we currently enjoy with Harpin and we have the capacity to supply all forecast global demand and more.PREtec PRODUCT PIPELINEFollowing an investment of more than$25 milli

72、on over the last eight years,we now have a full pipeline of major product launches.The next launch will be PHC279 in the USA;we anticipate regulatory approval in the second half of 2022 and are making detailed plans with our partner Wilbur-Ellis to launch before the end of the year.We have submitted

73、 PHC949 for registration in the USA and anticipate that this will be launched in 2023,subject to receiving regulatory approval.Registration of PHC949 in Brazil will follow.Each of these products has potential to generate revenues in excess of$5 million within the next 5 years,at gross margins compar

74、able to those of Harpin.CHIEF EXECUTIVE OFFICERS STATEMENT CONTINUEDPEOPLE AND SUSTAINABILITYPlant Health Care is fortunate to have a very strong team,with extensive experience and a track record of value creation.I am particularly proud of the way in which the global team operated in 2021,under the

75、 leadership of Jeff Tweedy.Learnings are being shared around the world,which will accelerate the growth of Harpin.The team worked exceptionally well in 2021;buoyed by a successful year,everyone is excited about continuing this trajectory over the coming years.Sustainability is at the heart of everyt

76、hing we do at Plant Health Care;it is as motivational for our colleagues as we expect it to be mandatory for our investors.SUMMARY AND OUTLOOKWe have set out ambitious plans for organic growth,with revenue exceeding$30 million in 2025.By that time,we expect to be generating strong profit and cash fl

77、ows.The performance in 2021was an important step along that road.As we roll out PREtecproducts,we anticipate that sales growth in 2022 and beyond will be even faster than in 2021.Strengthening our positionin Europe,the worlds largest market for sustainable agriculture,isanimportant element in our st

78、rategy.CONSTANT CURRENCYWe evaluate our results of operations on an as reported and constant currency basis.The constant currency presentation,which is a non-IFRS measure,excludes the impact of fluctuations in foreign currency exchange rates.We believe providing constant currency information provide

79、s valuable supplemental information regarding our results of operations,consistent with how we evaluate our performance.We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amou

80、nts to our current period reported results.DR CHRISTOPHER RICHARDSChief Executive Officer11 May 202210Plant Health Care plcCOMMERCIAL BUSINESSOverall sales in 2021 were$8.4 million,an increase of 28%(24%in constant currency*)compared with 2020($6.6 million).Sales by region are listed in the table be

81、low:20212020GrowthCC growth$000$000percentagepercentageNorth America2,7741,65767%67%South America1,098527108%120%EMEAA1,5911,21331%26%Mexico2,9693,214(8%)(12%)Sales of core Harpin products increased by 55%(53%in constant currency),driven by sales of greater than$1.0 million each to three of our dist

82、ribution partners.Harpin represented 71%of sales in2021(2020:59%).NORTH AMERICASales in North America were up 67%,led by support from our twodistribution partners in USA corn and specialty crops.Sales in USA corn were up 133%in 2021,driven by strong demand for the Groups Harpin seed treatment produc

83、t.Harpin use in corn continues to deliver higher yields due to stronger corn plants that are protected from stress.In-market sales to growers are now approaching 1%of the USA corn market of 92 million acres.EPA registration of PHC279 is expected in Q3 2022 with a limited launch planned for Q4 2022 t

84、hrough our distribution partner Wilbur-Ellis.Harpin sales in the USA specialty crop market were up 42%,in part due to sales growth in cherries,apples,and pears and a 143%increase in on-ground sales to growers.Wilbur-Ellis has over 600 field employees who are focused on selling differentiated biostim

85、ulant product offerings into the specialty crop markets.Employ helps the plant improve its own natural ability to defend against abiotic and biotic stress factors,including nematodes,which improves overall crop yield.SOUTH AMERICASales of Harpin for PHC in Brazil sugarcane grew 108%evenunder challen

86、ging drought conditions in 2021.Sugar cane growers experienced extreme drought during the 2021 growing season which reduced yield by more than 13%.Even under these conditions,Harpin reinforced the benefits with yield increases greater than 23%.The Group received registration for Harpin in Argentina

87、for use in corn and soybeans in August 2021 with first year sales planned for the 2022 cropping season.POTENTIAL FOR SIGNIFICANT REVENUE GROWTHMARIA LOPEZTECHNICAL DIRECTOR AND REGULATORY AFFAIRS EMEAAMara holds a Bachelors degree in Agriculture from the University of Almera.She brings 13 years of e

88、xperience as a Study Director of GLP and GEP projects in contract research organisations.Mara joined Plant Health Care in June 2020 and has been instrumental in overseeing and coordinating pre-launch demonstration trials with a main focus on greenhouse crops in Spain,as well as providing technical a

89、nd regulatory support in the EMEAA region.In 2022,Maras main focus will be creating demand in the field to help on the positioning of ProAct in the glasshouse market,working closely with our business partners in Southern Europe and enabling successful and positive distributor and agent sentiment tow

90、ards new campaigns for Harpin technology.11Annual report and accounts 2021STRATEGIC REPORTNUMBER OF HECTARES OF HARPIN SOLD ONTO SUGAR CANEDec 19Jun 20Dec 20Jun 21Dec 2170,00060,00050,00040,00030,00020,00010,0000SOUTH AMERICA CONTINUEDIn September 2021,the Group announced a major milestone by formin

91、g a partnership with the worlds largest agricultural distributor,Nutrien,for the exclusive distribution of Saori asaseed treatment in soybeans for Asian soybean rust control.Saori is the Groups first product from its PREtec platform to be commercialised and is the first PREtec peptide approved in Br

92、azil.PREtec peptides represent a novel class of technology which stimulates the plant to defend itself.Nutrien has a goal to build a differentiated biological portfolio and the addition of Saori is a major step in that direction.Derived from natural proteins,PREtecis an environmentally friendly appr

93、oach to protecting cropsand is compatible with mainstream agricultural practices.Brazil is the worlds leading soybean producer with more than 40 million hectares(99 million acres)expected to be planted in the 2021/22 season.Asian soybean rust,caused by the fungus Phakopsora pachyrhizi,is a devastati

94、ng disease which can lead to crop yield loss of up to 90%.Brazilian soybean farmers spent$2.85billion ondisease control in the 2019/20 season.EMEAA2021 sales in the EMEAA region were up 31%with growth in Spain and the UK.Sales growth in Spain was driven by Harpin sales into citrus and expansion into

95、 the greenhouse market.The Group signed an exclusive Harpin distribution agreement with UK market leader Agrii in July 2021.UK sales growth was driven by the return of the amenity(turf)market and increased Harpin salesinto potatoes.MEXICOPlant Health Care Mexico has a broad biological product line f

96、or farmers in Mexico including third-party products.Harpin represented 23%of sales in 2021,with third-party products making up the remainder.Sales of Harpin in Mexico grew 15%in2021.Mexico continues to be Plant Health Cares largest businessunit.Revenue from the Mexican business decreased 8%(12%in co

97、nstant currency)to$3.0 million(2020:$3.2 million).Thiswas primarily due to decreased export demand for fruits and vegetables and reduced plantings in the specialty market.The decreased export demand resulted in up to 50%reduction in planted fruit and vegetable crops.However increased plantings of fr

98、uits and vegetables resumed in Q4 2021.PHC Mexico completed the first trials in agave and avocado with positive results in 2021 which will open new markets in the coming years.COMMERCIAL BUSINESS CONTINUEDMEAGAN OSBORNHEAD OF SUPPLY CHAINMeagan received her Bachelors of Science in Business Managemen

99、t degree from North Carolina State University and her MBA from Campbell University.She has held various positions within the supply chain field including inventory management,customer service,purchasing andproduction planning throughout her career.Meaganjoined Plant Health Care in June 2021 and has

100、been instrumental in the successful scale up of Saori forcommercial production.Meagans focus in 2022 will be to continue the project management work started in 2021 to ensure the successfulregistration and commercial launch of PHC279and PHC949 globally.Meagan will also continue to build on our manuf

101、acturing network for the Harpin and the PREtec portfolios to ensure favourable cost positioning and reliable supply.12Plant Health Care plcGREGORY ZORNETZERSENIOR SCIENTISTGregory holds a PhD in Biochemistry from the University of Wisconsin-Madison and received his Bachelors degree in Biological Sci

102、ences from Carnegie Mellon University in Pittsburgh,PA.Gregory joined Plant Health Care in July 2013 to support the development of stable liquid formulations of existing products.He transitioned to the development of new plant stimulating peptides in 2014,leading to the production of peptides.Gregor

103、y has also coordinated patent filing with internal leadership and external patent attorneys,resulting in nine issued USA patents and three issued international patents protecting Plant Health Cares intellectual property.PATRICK DOYLEVP,PRODUCT DEVELOPMENT ANDREGULATORYPatrick holds a PhD in Antibody

104、 Engineering from the University of Guelph,Canada,and has respective MSc and BSc degrees in Biochemistry and Soil Science from the University of Saskatchewan,Saskatoon,Canada.Prior to joining Plant Health Care,Patrick held various senior roles over a 30-year career with Novartis AG,Syngenta,and Plan

105、t Response Inc.in the USA,Canada and Europe.During this tenure,Patrick played a major role in numerous interdisciplinary teams to bring new/novel agricultural products and technologies to market.Patrick joined Plant Health Care in June 2021 as part of PHCs Executive Committee to lead product develop

106、ment,regulatory and portfolio management to drive commercialisation of PREtec and Harpin technologies in key markets in the most cost-effective,efficient and timely manner possible.His core target is the annual registration of each one of the Groups PREtec products.ARMANDO CRUZ HERRERAGENERAL MANAGE

107、RArmando is the general manager of Plant Health Care Mexico,and he is one of the first employees of the company.He is an accountant by profession and an agronomist at heart.Armando studied at the Universidad Nacional Autnoma de Mxico(“UNAM”).He has extensive experience in the finance and accounting

108、areas and seeks to help others achieve their long-term goals.Armando advocates that customer service is one of the best added values that companies can provide.Hetries to encourage a collaborative and trusting internal environment that encourages his team to work towards helping the companys custome

109、rs.He has participated in various national and international seminars related to biotechnology and nanotechnology applied to agriculture,horticulture,andforestrytechnology.Before working at Plant Health Care Mexico,he worked as an accountant in companies dedicated to the manufacture of residential a

110、nd commercial aluminium.13Annual report and accounts 2021STRATEGIC REPORTPREtec PIPELINE The PREtec technology platform is proving to be a reliable source for new products.The pipeline is poised to launch one new PREtec product each year going forward.All PREtec peptides are variants of naturally oc

111、curring proteins and break down rapidly in the environment,leaving no harmful residues on the crop or in the environment.The Group has a long history of offering products that support agricultural and environmental sustainability.The new products described below continue to meet the highest standard

112、s of sustainability.USAThe Company is on track to launch PHC279(the active ingredient in Saori)in the USA in partnership with Wilbur-Ellis(the fourth largest crop inputs provider in the USA)before the end of 2022.Regulatory approval from the EPA is being pursued.The launch with Wilbur-Ellis will be

113、focused on growers of speciality crops fruits,vegetables,and tree nuts.Foliar applications will enable these high value crops to resist losses in crop yield and quality associated with destructive plant diseases.By applying PHC279,producers will be able to ensure a high-quality crop while reducing t

114、heir reliance on older,higher use-rate,synthetic fungicides,which are associated with leaving residues after harvest and having adverse environmental impacts.A new liquid formulation of PHC279 has been developed,which is optimised for use as a seed treatment in row crops like corn and soybeans.This

115、is expected to gain EPA approval in late 2023.The Group is confident that formulations of PHC279 represent a multi-million-dollar revenue opportunity in USA markets.Knowledge gained from these product launches will be leveraged with strategic partners to identify new countries and additional high va

116、lue markets where these products can be introduced.During 2021,following in the tracks laid by PHC279,we have been preparing to file a regulatory submission for a product based on PHC949.This was filed with the EPA in January 2022.The new PHC949 product prevents yield loss from nematode(soil pests)d

117、amage in a wide range of crops.Nematode control products are forecast to be worth$1.6 billion globally by 2025;these pests reduce crop yields by some$100 billion annually.In the USA,PHC949 will be co-developed with Wilbur-Ellis in high value specialty crops.Launch plans are in progress to introduce

118、the product in the second half of 2023,after registration by the EPA and in key USA states.Thereafter,a new,liquid formulation of PHC949 optimised for use as seed treatment in row crops such as corn and soybeans is expected to be approved in late 2024.PREtec TARGETING MARKETS WITH VALUE GREATER THAN

119、$5 BILLION201214 DISCOVERY Build lab and team 800 peptides synthesised and screened in lab Mode of action studies201517 IP SECURED Identified six lead products Initial field trials 50 patents filed;first patents grantedin2020 201719 EFFICACY CONFIRMED Testing in multiplecrops inthe USA,Brazil and th

120、e EU PHC279 emerging as first champion Low-cost production process in lab PREtec PEPTIDES:POISED TO ENTER LARGE MARKETSNEW TECHNOLOGY14Plant Health Care plcUSA field trials testing PHC949 relative to established competitor products shows outstanding control of nematode pests in a variety of crops.Fo

121、r example,in peppers,PHC949 increased marketable yield by about 3,265 lbs/acre,worth an extra$2,070/acre at current prices.Field trials are also under way,demonstrating the value of PHC949 in soybeans and other crops in the USA based on foliar and seed treatment applications.The Group expects long-t

122、erm global sales of products based on PHC949 to reach into the tens of millions of dollars and become a significant value driver for the Group.Work is also continuing in the USA in conjunction with Wilbur-Ellis to develop our leading biostimulant peptides,PHC414 and PHC404.BRAZILIn Brazil,further de

123、velopment work is under way to build on the successful 2021 launch of Saori for the treatment of Asian Soybean Rust.The Company plans to register a new liquid formulation of Saori,to complement the granular formulation launched in 2021.An application is expected to be submitted to the Brazilian Mini

124、stry of Agriculture,Livestock and Food Supply(“MAPA”)in mid-2022,with approval targeted for mid-2023.The Group continues to invest in Saori to extend the label claims to cover plant diseases like Brown Spot and Target Spot.In 2023,the Group also plans to submit new registrations in Brazil for the fo

125、liar use of PHC279 for treating diseases affecting sugarcane and coffee.Also in Brazil,studies are under way to support the registration of PHC949 for preventing nematode damage in soybeans.This application is expected to be submitted to MAPA in late 2022,with the expectation of being granted regist

126、ration by the end of 2023.REST OF WORLDWorking with various multinational crop protection companies,opportunities to deploy PHC279,PHC949 and other PREtec products are being actively explored in China,Taiwan,Vietnam,Spain,Chile,and the UK.While the regulatory route to market and associated costs,tim

127、elines,and opportunities vary from country to country,the Group will invest selectively in these markets wherever these opportunities are large enough to justify the required investment.202021 REGULATOR SUBMISSION FIRST LAUNCH Saori(PHC279)launch in Brazil H2 2021 Agreement for commercial scale low

128、COGS production PHC949 USA registration submission JDA with Wilbur-Ellis in USA specialty crops202225 ACCELERATE LAUNCHES Achieve USA and Brazil registrations of PHC279 and PHC949 Fourth quarter 2022 launch of PHC279 withWilbur-Ellis in the USA Further JDAs andpartnerships for multiple launches Prod

129、uct development inEurope 15Annual report and accounts 2021STRATEGIC REPORTSCIENCEZhongmin Wei,Chief Science OfficerSCALE UP PRODUCTION OF THE TWO LEADING PEPTIDES,PHC279 AND PHC949PHC279 is a peptide derived from the Innatus 3G family within the PREtec platform.The Innatus 3G family has the potentia

130、l to deliver multiple products that serve as plant vaccines to protect against crop diseases such as Asian soybean rust.Vaccinated plants also show better growth,strength,and yields.As a representative peptide,PHC279 has shown remarkable activity in multiple crops;itis but the first of many products

131、 from the Innatus 3G family.Building on our pilot production experience with PHC279,the Seattle R&D teams primary focus in 2021 was on developing the scale-up manufacturing procedures.This included fermentation,downstream processing and final formulation at a scale and consistency capable of support

132、ing product launch and future growth,and at a cost to deliver attractive margins in market.Intheearly part of the year,we produced enough material for theinitial,small-scale launch of PHC279 as Saori in Brazil.During the year,we achieved great success in improving yield and optimising production met

133、hods,preparing a full production process manual for a third-party manufacturer.We sought and secured a reliable,cost-effective third-party manufacturer and successfully transferred the production methods for scale up production from 2-litre to 30-litre,and from there to commercial 5,000-litre fermen

134、tation tanks.The product produced from this large-scale production is being supplied in 2022 to Brazil as Saori,for the seed treatment of soybeans.PHC949 is a peptide developed from the T-Rex 3G family of PREtec,which enables us to develop products specifically for the activation of plants natural d

135、efences against nematode infection.Nematodesare a major class of soil pests for both row crops and specialty crops.In addition to protection from nematodes,vaccinated plants also show great resistance to abiotic stress suchas drought.Remarkably for a plant response elicitor,PHC949 has consistently s

136、hown performance comparable to conventional chemicals in fieldtrials.This is remarkable efficacy for a biological product,withits benign toxicological profile.For PHC949,our R&D team focused on the development of production methods and started work on scaling up manufacture.Great success was achieve

137、d in improving yield and scaling up from a 2-litre bench top fermenter to 30-litre tanks.In 2022,work continues with our chosen contract manufacturer for the development of cost-effective manufacturing methods forcommercial-scale production.SCALE UP MANUFACTURING OF PREtec PRODUCTSPILOT SCALE MANUFA

138、CTURING OF PRETEC PRODUCTS Successful commercialisation of peptides is critically dependent on the development of low-cost manufacturing.The Group is committed to building on our existing lead in this regard,to ensure that we can offer the benefits of PREtec peptides to growers at prices which offer

139、 them substantial returns on their investment,while ensuring strong profitability for both Plant Health Care and our distribution partners.In 2021,the Group made a significant capital investment in production and scale-up capability,to support accelerated development of low-cost manufacturing proces

140、ses for our current and future peptide pipeline.Large scale manufacture will always be outsourced,but the ability to develop Granulation machine used to create a dry formulation for PREtec products.Two 10-litre fermentation tanks used to grow peptide expression bacteria.16Plant Health Care plcdetail

141、ed production processes for third party manufacturers is critical.Manufacturing at pilot scale also gives us flexibility,especially for launches and large-scale market development trials of new products and formulations.We are unaware of any company which can match PHCs ability to develop high yield

142、 production methods for peptides.This is a key capability for the Group to retain in house,as we develop and optimise manufacturing methods for further leading peptides.Manufacturing technology can be transferred in a controlled manner to large-scale third-party production without losing the proprie

143、tary knowhow.Capital was invested in the purchase of two 10-litre fermentation tanks and a granular dry formulation dryer,and the construction of a downstream processing line,which raised the processing volume from 5 to 50 litres.By the end of 2021,the pilot production facility was completed.These f

144、acilities will significantly accelerate the development of production process methodology for new peptides from the PREtec platform.The facility also enables us to produce 100 kg of peptide products per month,which will allow us to produce for small scale product launches.COMMERCIAL SCALE PRODUCTION

145、The pilot scale manufacturing process developed by the Group can be transferred to any of several companies around the world which have suitable facilities for commercial production.It is not the Companys intention to duplicate this capability by building our own facilities.Third party manufacturers

146、,however,need not only to have the appropriate facilities and the capability to produce quality product at scale for low cost but also all the requisite registrations and certifications to produce biopesticides.During 2021 the Group has worked hard to identify and sign up a world class manufacturing

147、 partner,with a view to securing a flexible,responsive,high-quality,low-cost source for our peptide products.After protracted evaluation,a manufacturing partner in the European Union has been signed up.The first commercial runs of manufacture of PHC279 were completed successfully in early 2022,for s

148、ale as Saori.PRODUCT DEVELOPMENT AND REGULATORYThe Group has established a Product Development and Regulatory team under the leadership of Dr Patrick Doyle.This team drives the delivery of the PREtec product pipeline to ensure that the Company will make at least one major product launch each year.It

149、 also supports the continued commercialisation of the Harpin product portfolios in priority markets.This role aligns the Groups global regulatory,product testing,and portfolio management strategies to deliver the Groups technology and products to support the overall Commercial strategy.The Product D

150、evelopment and Regulatory team maintains continuous contact with the Groups scientists to ensure that technical study requirements meet regulatory requirements to deliver registration dossiers with government agencies.To ensure that product submissions support commercial objectives,the Group maintai

151、ns systems and processes supported by cross-functional product teams covering R&D,Formulation Chemistry,Field Testing,Regulatory and Product Development,Production and Supply,and Commercial.Experts within each function participate in regular meetings to discuss key milestones,capture opportunities,r

152、esolve issues,and make decisions to move products and technologies from the research to commercial phase in the most efficient and cost-effective manner possible.The Product Development and Regulatory Team also governs annual field-testing programmes to confirm product efficacy,use-rate response,lev

153、el and duration of control,crop tolerance and compatibility with current agronomic practices,etc.within high value target markets to support registration and commercial objectives.This work is also closely aligned with business development to ensure that product testing protocols and priorities are

154、well aligned with testing conducted by external and partner companies.Commercialisation of PREtec products within Europe remains a challenge as the current regulatory framework required to bring products to market remains cumbersome,expensive,and time-consuming.The Group remains committed to bringin

155、g PREtec technology to Europe through continued investment in field trials which demonstrate the benefits of PREtec technology relative to established,conventional chemistry.17Annual report and accounts 2021STRATEGIC REPORTCONTINUED CONTROL OF EXPENSES AND REDUCED WORKING CAPITALFINANCIAL SUMMARYJef

156、frey Hovey,Chief Financial OfficerA summary of the financial results for the year ended 31 December 2021 with comparatives for theprevious financial year is set out below:2021$0002020$000Revenue8,4326,611Gross profit5,0033,683Gross profit margin59%56%Operating loss(6,381)(3,568)Finance(expense)/inco

157、me net(34)264Net loss for the year before tax(6,415)(3,304)Adjusted LBITDA*(4,618)(3,304)Cash equivalents andinvestments9,1624,149REVENUESRevenues in 2021 increased by 28%to$8.4 million(2020:$6.6million).On a constant currency basis revenue increased 24%or$1.6million driven by strong growth in the s

158、ugar cane and the corn and specialty markets in Brazil and the USA,respectively.The gross margin increase to 59%(2020:56%)is due to increased Harpin sales into the Americas.Harpin sales increased 55%to$6.0million(2020:$3.9million).Third-party revenue decreased 11%to$2.4million(2020:$2.6million)due t

159、o reduced plantings in the Mexican specialty market.The Group has three separate reporting segments as set out below.The Groups revenue,gross margin and LBITDA are weighted towards the second half of the financial year.Revenue in the first half of the year is 40%,with the remainder being recognised

160、in the second half.AMERICASThis segment includes activities in both North and South America but is exclusive of Mexico.Revenue in the Americas segment increased 77%(80%in constant currency)to$3.9 million(2020:$2.2million).The increase in revenue was due to further expansion into the specialty crop a

161、nd corn markets through our partner Wilbur-Ellis and another large USA distributor.Revenue in the Americas is predominantly from Harpin sales.REST OF WORLDRevenue in the Rest of World segment increased 31%(26%in constant currency)to$1.6 million(2020:$1.2 million).Theincrease was primarily due to a s

162、ales increase of 33%(28%in constant currency)in Spain due to continued growth into the citrus market and expansion into the glasshouse market.Revenue in the Rest of World segment is predominantly from Harpin sales.MEXICOA significant portion of the Groups revenue comes from Mexico.Revenue from the M

163、exican segment decreased 8%(12%in constant currency)to$3.0 million(2020:$3.2 million).This was primarily due to decreased export demand for fruits and vegetables and reduced plantings in the specialty market.Revenue in Mexico includes sales of Harpin and third-party products.The gross margin in Mexi

164、co for Harpin and third-party products are 70%+and 40%+,respectively.GROSS MARGINGross margin increased to 59%(2020:56%).The increase was primarily due to increased sales of Harpin in North America and Brazil.Harpin globally consistently achieves a gross margin of 70%+.OPERATING EXPENSESThe Group ra

165、ised equity to help accelerate our product launches,which caused expenses to increase to$9.6 million(2020:$7.3million).Themain contributors were increased sales and marketing spend at$3.7million(2020:$2.9 million)to drive additional commercial sales in Brazil and the USA,increased PREtec spend at$3.

166、0 million(2020:$2.3 million)to support ourPREtec product launches and increased administration costs tosupport our consolidation efforts.Non-cash unallocated corporate expenses increased$1.6 million to$1.8 million(2020:$0.2 million).The increase was attributable to the forex loss in the value of Ste

167、rling loans from our UK subsidiary due to the appreciation of the Pound(2020:forex gain).Adjusted LBITDA,a non-GAAP measure,increased by$1.3 million to$4.6 million(2020:$3.3 million)primarily due to improved gross profit of$1.3 million offset by increased spend in sales and marketing of$0.8 million,

168、PREtec of$0.7 million,and administration of$0.7 million.*Adjusted LBITDA:loss before interest,tax,depreciation,amortisation,share-based payments and intercompany foreign exchange.18Plant Health Care plc2021$0002020$000Operating loss(6,381)(3,568)Depreciation/amortisation567639Share-based payment exp

169、ense572596Intercompany foreign exchange losses/(gains)624(971)Adjusted LBITDA(4,618)(3,304)BALANCE SHEETAt 31 December 2021 and 2020,investments and cash and cash equivalents were$9.2 million and$4.1 million respectively.Cashremains a primary focus for the Group.Inventory($2.1 million)decreased$1.4

170、million due to increased consumption and improved purchasing patterns.Trade accounts receivable($3.4 million)increased$0.6 million due to increased sales in the USA market in the fourth quarter versus the prior year.Trade payables($1.2 million)were comparable to the prior year($1.3 million).Translat

171、ion of the results of foreign subsidiaries for inclusion within the consolidated Group results resulted in an exchange gainof$0.5 million recorded within other comprehensive income and foreign exchange reserves(2020:loss of$1.2 million).CASH FLOW AND LIQUIDITYThe Company successfully raised 6.6 mill

172、ion($9.1 million)throughthe issuance of new ordinary shares in March 2021.Netcash used in operations was$3.2 million(2020:$2.5 million).The increase is due to increased losses offset by an improvement in working capital primarily by reduced inventory through increased product consumption and improve

173、ment inventory management.Net cash used by investing was$5.4 million(2020:$1.2 million).TheGroup holds surplus cash in several bond and money market funds.The movement in these funds was used to further invest in the PREtec business and fund the Commercial business.Net cash provided by financing act

174、ivities was$8.6 million(2020:$4.2million).The increase was primarily due to the March2021 equity raise of$9.1 million.GOING CONCERNIn assessing whether the going concern basis is appropriate for preparing the 2021 annual report,the Directors have utilised the Groups detailed forecasts,which take int

175、o account its current and expected business activities,its cash and cash equivalents and its investments balance of$9.2 million.The principal risks and uncertainties the Group faces and other factors impacting the Groups future performance were considered.The Directors confirm that they have areason

176、able expectation that the Group will have adequate resources to continue in operational existence for the next 12 months from approval of these financial statements and accordingly these financial statements are prepared on a going concern basis,with no material uncertainty over going concern.Analys

177、is of the going concern position is detailed in the Directors reportand note 2 to the financial statements.JEFFREY HOVEYChief Financial Officer11 May 202219Annual report and accounts 2021STRATEGIC REPORTHOW WE MEASURE SUCCESSKEY PERFORMANCE INDICATORS(“KPIs”)The Group uses a range ofperformance meas

178、ures to monitor and manage the business effectively.These are both financial and non-financial.Themost significant relate to Group financial performance and to the Groups progress in driving the two pillars of its strategy.The KPIs for financial performance of the Commercial area and for the Group a

179、s a whole include revenue,gross profit and margin,operating loss and LBITDA.These KPIs indicate the volume ofwork the Group has undertaken,as well as the valuation with which this work has been delivered.The KPIs for financial performance for theyear ended 31 December 2021,withcomparatives for the y

180、ears ended 31December 2020 and 2019,are set out onthe right.REVENUE($m)$8.4m8.46.46.62019 2020 2021GROSS PROFIT($m)$5.0m5.03.63.72019 2020 2021WHY WE MEASURE ITWhen viewed with the gross profit and operating expenses,revenue gives an indication if the Group is close to achieving a breakeven position

181、.WHY IT IS IMPORTANTRevenue growth shows how the business isperforming year over year.WHAT IT MEANSRevenue increased,driven by strong sales of Harpin.This gives the Group confidence that adoption of our products is accelerating sales with our global partners.LINKS TO STRATEGY12345WHY WE MEASURE ITTo

182、 analyse the profitability and financial performance of each segment and the Group as a whole.WHY IT IS IMPORTANTA strong gross profit indicates the efficiency of the Group in producing its goods.WHAT IT MEANSThe Groups gross profit increased from 2020 levels due to increased sales of Harpin,which h

183、as a margin of 70%+globally.LINKS TO STRATEGY12345The 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 paths to commercial launch of products.The Board continues to monitor the progre

184、ss of its research and development activities and expenditures.As each research project advances,specific progress is reported tothe Board and costs against budget are monitored.We anticipate refining the KPIs for R&D as each project develops.NON-FINANCIALIn addition,an important KPI is the movement

185、 in revenue and gross margin achieved from the sale of ourproprietary products.FINANCIALPROPRIETARY PRODUCTSREVENUE($000)3,6016,0963,8692019 2020 20216620Plant Health Care plc70GROSS PROFIT MARGIN(%)59%56.055.759.32019 2020 2021OPERATING LOSS($m)$(6.4)m(6.4)(3.6)(4.1)2019 2020 2021LBITDA($m)$(4.6)mW

186、HY WE MEASURE ITTo show the efficiency with which the Group can sell its products.WHY IT IS IMPORTANTA high gross profit margin leads to a strong bottom line.WHAT IT MEANSThe Groups gross profit margin improved from the prior year due to increased sales of higher margin Harpin.LINKS TO STRATEGY12345

187、WHY WE MEASURE ITTo ensure that the Group is maximising gross profit and maintaining strict control of its expenses against budget.WHY IT IS IMPORTANTAchieving an operating profit is a critical goal of the Group as it would significantly reduce the key risk of running out of cash before realising th

188、e Groups long-term vision.WHAT IT MEANSAn increase in operating loss from the previous year shows that the Group has decided to accelerate investment in growing the commercial business and support PREtec launches globally.LINKS TO STRATEGY145WHY WE MEASURE ITTo eliminate intercompany forex gains and

189、 losses,share-based payments,depreciation,amortisation,interest and tax from operating loss to help understand the operational business exclusive of non-cash items.WHY IT IS IMPORTANTReducing LBITDA is a core short-term andlong-term goal of the Group.ImprovingLBITDA reduces the risk of the Group run

190、ning out of cash before the Grouphasrealised its strategic goals.WHAT IT MEANSThe Groups LBITDA increased from 2020 as the business increased its investment indeveloping the Commercial business.LINKS TO STRATEGY1234FINANCIALPROPRIETARY PRODUCTSGROSS MARGIN PERCENTAGE(%)GROSS MARGIN($000)(4.6)(3.3)(3

191、.5)2019 2020 20212,5932,6244,2622,6692019 2020 202173692019 2020 20216621Annual report and accounts 2021STRATEGIC REPORTSECTION 172 STATEMENTSection 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision making.Th

192、e Directors continue to have regard to the interests of the Groups employees and other stakeholders,including the impact of its activities on the community,the environment and the Groups reputation,whenmaking decisions.Actingin good faith and fairly between members,the Directors consider what is mos

193、t likely to promote the success of the Group for its members in the longterm.The Directors are fully aware of their responsibilities to ensure that the Group is successful in accordance with section 172 oftheCompanies Act 2006.STAKEHOLDERSThe Board regularly reviews our principal stakeholders and ho

194、w weengage with them.The Group views its investors,customers,employees and suppliers as its principal stakeholders.All concerns or thoughts of our stakeholders are brought into the boardroom throughout the annual cycle through information provided by management and by direct engagement with stakehol

195、ders themselves.The relevance of each stakeholder group may increaseor decrease depending on the matter or issue in question,so the Board seeks to consider the needs and priorities of each stakeholder group during its discussions and as part of its decisionmaking.The following table shows how the Gr

196、oup engages with itsstakeholders and the outcomes:StakeholderType of engagementWhy we engageINVESTORS Investor website.Proactive investor relations.Periodic investor calls or meetings.Webinars to update investors on the progress oftheGroup.Stock Exchange announcements andpressreleases.To allow our s

197、hareholders to understand Plant Health Cares strategy and long-term goals.To help understand the Groups vision,responsibilities and compensation structures.To confirm our commitment to our employees and our global environment.CUSTOMERS The Board focuses on the needs of all customers with emphasis on

198、 assisting thecustomer with sales of our products.Direct engagement with customers byseveral Board members.Review of strategy and performance monitoring throughout the year.To provide the best quality products to our customers,to meet their individual needs.To ensure we comply with all local and glo

199、bal regulatory requirements.EMPLOYEES Participation in employee activities and global staff meetings is encouraged.Monthly meetings to encourage the sharing of ideas and views.All-employee bonus and option schemes.Covid-19 safeguards were implemented during March 2020 and continue to be maintained t

200、hroughout the pandemic.To ensure our employees feel that their contributions help with the long-term goals of the Group.To inspire our employees.To enrich our employees through development and training.SUPPLIERS Supply chain risk management.Regular engagement with our suppliers through production pl

201、anning,forecasting and shipment logistics.Continuous process improvements by working closely with our toll manufacturers.To comply with regulatory requirements.To expand our long-term partnerships and agreements.To minimise the risk of the ability to supply our product to our customers.22Plant Healt

202、h Care plcThe Board has overseen the implementation of measures to ensure that stakeholder interests are always considered.Board papers prepared by management for Board approval highlight relevant stakeholder considerations to be considered as part of the debate when making decisions.As required,the

203、 Company Secretary will provide support to the Board to help ensure that sufficient consideration is given tostakeholder issues.RELATIONS WITH SHAREHOLDERSThe Board encourages the engagement of our shareholders andwith the capital markets more generally.Our Chairman takesoverall responsibility for e

204、nsuring that the views of our shareholders are communicated to the Board and that our Directors are made aware of shareholders key issues and concerns so these can be fully considered.The Board achieves thisthrough:dialogue with shareholders,prospective investors and analysts,which are led by the Ch

205、ief Executive Officer,Chief Operating Officer and Chief Financial Officer;reports received from analysts to ensure that the Board maintains an understanding of the priorities and concerns ofourinvestors;and regular investor roadshows and meetings with majorshareholders.Investors,prospective investor

206、s and analysts can contact our ChiefExecutive Officer or Chief Financial Officer at any time or access information on our corporate website.The Board believes that appropriate steps have been taken during the year so that allmembers of the Board,and in particular the Non-executive Directors,have an

207、understanding of the views ofmajorshareholders.Outcomes Investors opinions are taken into account when determining strategy,operational performance and remuneration policies.Technical support provided to multiple customers through fieldtrial support or educating the customer on proper application of

208、 ourproducts.Customers viewpoints are taken into account as part of the decision-making process.Assist customers with regulatory and registration issues bycountry,in particular with sugar cane in Brazil and corn intheUSA.Improvements were made to the remuneration policy mainly through the issuance o

209、f new bonus option schemes.Board encouraged senior management to proactively manage career development for all employees.The senior management team hassemi-annual meetings with its staff to assess employees interest in expanding their current duties and responsibilities.Expanded HS&E policies to inc

210、lude enhanced safety training fortheSeattle laboratory,sensitivity training globally and warehousetraining.Our employees have been minimally affected by Covid-19 due tothe ability to work remotely and the safeguards established.Continued improvement of long-term agreements with manufacturers to ensu

211、re that product will still be available totheGroup.Decreased unit costs and simplified the packaging process byreducing the number of packagers.Negotiated long-term materials agreements with favourableterms.The Group minimised supply chain disruptions due to Covid-19,byordering product ahead of typi

212、cal needs and prior to the pandemic being widespread.23Annual report and accounts 2021STRATEGIC REPORTSUSTAINABILITYThe agricultural sector faces some of the biggest challenges ofour time.As a business,our mission is to support food security forgrowers,and help feed the worlds population,which bring

213、s PHCto the heart of this challenge.Supporting a growing populationaround the world,with challenges from climate change,nature-related risks and geopolitical instability,growers are under extensive pressure.We know that reliable access to a sufficient quantity of affordable,nutritious food is becomi

214、ng more of a priority for businesses and governments worldwide.Based on theWorld Economic Forums 2021-22 Global Risks,many of the top 10 risks identified could have an impact on food security,including extreme weather,biodiversity loss,infectious diseases and geoeconomic confrontation.Our role is to

215、 support growers and to help them confront food security issues and feed the worldsgrowing population.Sustainable,long-term approaches that support positive environmental and social outcomes are vital.Plant Health Care is a believer in sustainability as a way of doing business,both in terms of our p

216、roducts and operations.PlantHealth Care has a unique combination of proven products,with low costs of goods and very strong market access.Weareable to develop products specifically for the activation of plants natural defence against parasite infection for both major crops and specialty crops.Operat

217、ionally,we are proud to support our people,our workplaces and the wider environment.An exampleof our resilient and supportive culture is the way in which Plant Health Care employees worked together as we navigated through the many changes that Covid-19 brought.Adapting to conference calls,instead of

218、 in-person meetings,and working in different shifts to accommodate social distancing and local guidelines are just a fewof the changes we had to make.Over the following pages,we share our achievements for this year,and our forthcoming commitments,against our three sustainability pillars of environme

219、ntal,social and governance.OUR APPROACH TO SUSTAINABILITY24Plant Health Care plcENVIRONMENTAL PILLAROur environmentally positive products.Our environmentally sensitive operations.We aim to improve the agricultural environment through our products and support our growers to improve their environmenta

220、l awareness.1SOCIAL PILLAROur goal is to create a culture that is positive,diverse and socially oriented,supporting the communities we engage with.2GOVERNANCE PILLARWe aim to build an environment of trust and transparency with our stakeholders3GREEN ECONOMY MARK In June 2021,we received the Green Ec

221、onomy Mark for achieving 50%of our revenues from environmentally supportive products.The underlying methodology for the Green Economy Mark incorporates the“Green Revenues data model”,which has been developed and managed by FTSE Russell,the leading global index provider.Through its consistent applica

222、tion across London Stock Exchange markets and segments,the Mark validates Plant Health Cares commitment to the environment while improving its visibility to investors and other stakeholders interested in the global transition to a green and low carbon economy.ENVIRONMENTAL We aim to improve the agri

223、cultural environment through our products and support growers by improving their environmental awareness.Our environmental pillar is split out into our products and operations,two areas where we know we can have a big impact.OUR ENVIRONMENTALLY FRIENDLY PRODUCTSMost of the ingredients in our product

224、s are edible,such as protein and cornstarch.Once PREtec is applied to crops,the peptide will quickly be degraded into plant food and leaves no residues in the environment.The Environmental Protection Agency of the USA hasclassified PREtec peptides as having low toxicity and leaving zero residues in

225、either plants or the environment.The vaccinated plants also show great resistance to abiotic stress such as drought,with some peptide seed treatment projects increasing yield by up to 15%vs the standard seed treatment under drought conditions.In 2021,we launched Saori in Brazil,the first product fro

226、m the PREtec platform.We plan to follow that with at least one major product launch every year.We have focused on obtainingregistrations and refining manufacturing costs to support our goals.THE FUTURE OF OUR PRODUCTSPlant Health Care is fortunate to have a very strong team,with extensive experience

227、 and a proven commitment to supporting foodsecurity for the worlds population.We are currently focused on PHC279 and PHC949,which are biostimulants that activate plants,growth genes and pathways foryield increase and quality improvement in various crops such asfruits and vegetables.Dozens of potenti

228、al PREtec candidates have been identified and tested in greenhouses and in the field for multiple years as future pipeline products.Our PHC 949 product is showing comparable performance for nematode control as compared to conventional chemicals in fieldtrials.There is a compelling market for biologi

229、cal products that can replace chemistries with a toxic profile plus be a new toolfor growers who have lost nematicide products due to increaseregulations.TOTAL 2020 REVENUE$6.6m90%($6m)of our total revenue was from the sale of products either certified or registered for organic crop productionHARPIN

230、 APPROVEDfor use in organic agriculture in a number of countries around the worldTOTAL 2020 HARPIN SALES$4.0m 3030+99+66+5555+M+M$2.00m Mexico$0.74m Portugal,Spain and Greece$0.54m Brazil$2.72m Other25Annual report and accounts 2021STRATEGIC REPORTSUSTAINABILITY CONTINUEDOUR ENVIRONMENTALLY SENSITIV

231、E OPERATIONSEnsuring that our operations can be as environmentally sensitiveas possible is important to Plant Health Care.Asasmallcompanywith limited physical premises,we undertake specific environmental initiatives to upskill our senior team and all colleagues on greener operational approaches,to e

232、nsure we are being responsible to the environment.We are alert to the challenges of agricultural and scientific waste and are mindful of our impact on the environment.Our products are packaged in cartons and dividers that are made from recycled paper,as well as being recyclable.Our bottles are also

233、recyclable.We continue to work towards finding a vendor that can provide bags that are made of recyclable materials.In locations where we have offices we recycle cans,bottles and cardboard.We moved our Raleigh office to Holly Springs,NC,for a more environmental workspace that includes motion sensor

234、lights to save electricity.Environment/operational:Agriculture as a sector is exposed to the impacts of climate change,from global temperature increase to more frequent weather events.As suppliers to this sector,PlantHealth Care is aware of the impacts of climate-related risks and opportunities on o

235、ur business.The UK has made it mandatory forpremium listed companies to disclose their exposure to climate-related risks under the Task Force on Climate-Related Financial Disclosures(“TCFD”)regulation.This is growing in importance around the world.As such,this will be an area that weshow more in-dep

236、th consideration over the coming years.Similarly,nature-related risks are becoming increasingly important for legislators around the world.These risks have long been a concern for growers,who work closely with the earth and with nature.As nature-related reporting grows in importance over the coming

237、years,we intend to explore Plant Health Cares exposure to these risks,and how the business can go about mitigating such risks.SOCIAL Our goal is to create a culture that is positive,diverse,and socially oriented,supporting the communities we engage with locally.Oursocial pillar encompasses how we in

238、teract with our people,how we develop our policies,and how we prioritise health and safety as a core part of our operations.We provide an excellent medical benefit package to our employees in the USA.OUR PEOPLEPlant Health Care is proud to say that we did not incur any layoffs due to the pandemic.We

239、 provided additional technical support to assist our employees that were working from home and offered financial assistance to support this initiative.We have a very diverse group from multiple backgrounds working towards a common goal.Our employees are located throughout the USA,Brazil,Mexico,Spain

240、 and the UK.OUR POLICIESAt PHC we know that it is vital that our people know our products thoroughly.We provide our employees with extensive training,which consists of an overview of the Company and an introduction on how the Harpin protein interacts with the plant.We then go into detail as to how t

241、he products works,the application process for our products and the results obtained.We frequently provide our team with opportunities to better understand the use of our products,knowledge of the growing seasons,the dosage,and the timing of a correct application.Thishelps them to gain a level of kno

242、wledge of the products and provide our customers with the correct solution for each phase ofthe planting season.We also have a full Code of Conduct,developed and flexed for multiple markets,and share an Employee Handbook with our new hires.EMPLOYEE RETENTION(%)5656+2727+1717+MM 56%Between 1 and 5 ye

243、ars 27%Between 6 and 15 years 17%16 years or more7people added to the business56%of our employees have been here between 1 and 5 years26Plant Health Care plcHEALTH AND SAFETYAccidents are thankfully rare at PHC,and this is primarily due to ourdedication to health and safety.We provide online safety

244、training modules to our office personnel and in-person safety training to those in the field.We report to our Board quarterly onour accident rate.In 2020-21,we had no reportable accidents andare committed to maintaining this trend.HEARING FROM OUR EMPLOYEES“Working for Plant Health Care is a very re

245、warding experience.Ithas allowed me to expand my knowledge outside of the supply chain organisation.We have an extremely knowledgeable global team that works very well together to ensure cohesive practices and support of the overall vision of the Company.”MEAGAN OSBORN,HEAD OF SUPPLY CHAIN“I enjoy w

246、orking at PHC because it allows me to apply molecular microbiology to production of sustainable agricultural products.”BRETT MELLBYE,FERMENTATION SCIENTIST“PHC is an exceptional place to work because of the teamwork resulting from associates who are positive,supportive,responsive,and collaborative a

247、nd thus we get the job done while having fun,developing and promoting unique,sustainable proteins and peptides that help growers protect crops and increase quality and yields,and are safe for users,non-target beneficials,and the environment.”DARIN ALLRED,TECHNICAL SALES MANAGER“I like working for PH

248、C because of its supportive and welcoming environment.”TUCKER WALTON,FORMULATION ASSOCIATE“Plant Health Care has provided me with the opportunity to grow my skill set and responsibilities as our business needs evolved.Itsparticularly rewarding to talk withdistributors and growers andeducate themabou

249、t our products.”GREGORY ZORNETZER,SENIOR SCIENTIST IP MANAGEMENT“I mostly appreciate the collaborative atmosphere and the focuson the wellbeing ofemployees.”STEPHEN CARRASCO,STAFFACCOUNTANT“Plant Health Care provides many opportunities for the professionaldevelopment of our employees and encourages

250、thefostering of a family environment.The Plant Health Care Mexico team is proud to represent a company that cares about thewell-being of its partners,employees,customers,and suppliers.Wealsoencourage a sustainable environment,seekingnot to further damage the environment and its surroundings.”ARMANDO

251、 CRUZ HERRERA,GENERAL MANAGER,MEXICO27Annual report and accounts 2021STRATEGIC REPORTGOVERNANCEIn order to be a genuine component of our business activities,and to generate value for the company,our ESG approach needs to be well-governed and embedded into our governance mechanisms.Our CFO is ultimat

252、ely responsible for ensuring that decisions at the business take ESG elements into account where relevant,and for maintaining and promoting our ESG strategy.He is supported in this by the Human Resource manager who is responsible for championing ESG throughout the business,consolidating and recordin

253、g our ESG initiatives,and continually looking to improve our ESG credentials.Key decisions on ESG are taken at Board level,where key ESG topics make up a regular standing item on board meetings.We work with external consultants to bring new ESG information,including about our business exposure to de

254、veloping trends,into board-level circulation.Once decisions are made on ESG topics,they are communicated to management by monthly senior management meetings.As outlined in the Next steps below,we are also looking to create an employee board or group to feed into our ESG work and share guidance for c

255、ontinuous improvement.This will feed directly to the Human Resource manager.This approach to ESG governance forms part of our wider governance mechanisms for decision-making across PHC on page 35,and we manage ESG related risks through our existing corporate risk approach on page 30.We are supported

256、 across PHC in our management of our ESG approach by our employees,who are interested in our work in this area and keen to support its development.We believe this is due to the culture of engagement we have at PHC,which can be seen in the examples of employee interaction in our Social section above.

257、BOARD:Oversees our overall business strategy and management,including sustainability initiatives.EXECUTIVE DIRECTORS:Communicates decision making,business strategy and sustainability imperatives to the Board as determined bythemanagementcommittee.MANAGEMENT COMMITTEE:The formulation and execution of

258、 the business strategy has been assigned to the management committee who meet monthly to review the performance against the Groups strategic initiatives,which includes our approach and implementation of sustainable activities.ESG EMPLOYEE BOARD/GROUP:This group will determine and implement appropria

259、te ESG projects throughout the year.This will involve a global coordinated effort to work with all employees to determine the best ESG practices based on their respective regions.SUSTAINABILITY CONTINUED28Plant Health Care plcNEXT STEPSThese are early days for PHC in formalising our ESG strategy and

260、 beginning to think about how we monitor and share data against the key issues of sustainability.As in inherently sustainable business,with products that are designed to take on long-term global challenges around food security and grower wellbeing,we can be proud of our underlying commitment to envi

261、ronmental,social and governance issues.In particular,the reporting and pillar-led strategic approach we have shared for the first time in this report demonstrates our evolving approach to ESG reporting.We are interested to hear feedback and thoughts from all our stakeholders on this developing work.

262、We are devoting internal resource towards developing our approach on this topic and ensuring that ESG is on the agenda for senior teams and decision-makers.Based on discussion at the Board level,we have agreed to explore a suite of new initiatives as part of our ESG strategy over the course of the c

263、oming year.We are taking this exploratory approach with the ongoing constraint that we are a relatively small company we do not expect for every one of these areas to become a fully-fledged initiative and are keen to test out multiple routes to see which work best at PHC.Whilst we are not yet in a p

264、osition to set targets or performance indicators against these initiatives,we look forward to working on these areas and to reporting on our activities in the next annual cycle.ENVIRONMENTAL:Explore the introduction of commuter incentives for public transport Research methods to reduce business trav

265、el where possible Establish an internal recycling program Increase our use of sustainably sourced materials SOCIAL:Review our charitable donations approach with an aim of increasing giving to charities in line with our values Commit to an employee program supporting our colleagues to providing volun

266、teer opportunities,with a specific focus on food-oriented opportunities such as food bank drives andvolunteering Explore methods to assist employees with learning new skills and/or pursuing higher education Explore opportunities for PHC to participate in mentoring groups to give back to the communit

267、yGOVERNANCE:Establishing a Whistleblower channel or program Committing to empowering all our employees to participate in an Ethics&Compliance training course Establishing a company-wide social media policy Appointing employees to an internal board or other group to monitor the companys ESG progress,

268、and to offer suggestions for improvement We continue to review the composition of the board and will look to improve its diversity as opportunities allowWe aim for these initiatives to be undertaken closely with and on behalf of our employees,and will actively seek feedback from them and from other

269、stakeholders on these plans.29Annual report and accounts 2021STRATEGIC REPORTEFFECTIVE MANAGEMENT OF PRINCIPAL RISKS AND UNCERTAINTIESRISKS AND UNCERTAINTIESBOARD OF DIRECTORSDivisional and functionalteamsEXECUTIVE COMMITTEEREMUNERATION COMMITTEEAUDIT COMMITTEEThe Board is responsible for the system

270、s of risk management and internal control and for reviewing their effectiveness.The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss.Through the activities of the Audit Committee,the effectiven

271、ess of these internal controls is reviewed annually.The Executive Committee reviews formally at least twice annually the Companys risk register,along with potential causes and impact,controls and actions to minimise the probability of those risks materialising,and considers new risks and opportuniti

272、es presented to the Group,making recommendations to the Board as appropriate at least once annually.Our business is subject to a number of potential risks and uncertainties,including those listed below.The occurrence of any of these risks may materially and adversely affect our business,financial co

273、ndition,results of operations and future prospects.We manage and mitigate these risks by executing the strategy described above.RiskDescriptionMitigation1CAPITAL MARKETS,FINANCIAL AND LIQUIDITY RISK We have a history of losses since inception,and anticipate continuing to incur losses in the future,a

274、nd may not achieve or maintain profitability.The Group believes that the strategic plans that have been established will lead to profitability in the coming years.We do not expect to require additional financing in the near future.However,a shortfall in achieving our sales orworking capital targets

275、could exhaust our cash reserves.This may compel the Group to seek additional financing.The Group may be unable to obtain such financing on favourable terms or at all,which could force us to delay,reduce or eliminate our research,development or commercial activities.Our reputation and share price dep

276、end on delivering against our stated objectives.If we are unable tomeetmarket expectations,our share price may decrease,and we may loseshareholders.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 ma

277、y not follow a strictly linear trend which makes sales forecasting challenging.These risks are mitigated bybeing prudent in the management of the Groups cash,controlling costs andmaintaining strong investorsupport.PRINCIPAL RISKS HEAT MAP123465RiskLikelinessHighHighLowLowReview and evaluate riskUpda

278、te risk registerMitigate riskAssess riskIdentify risk30Plant Health Care plcRiskDescriptionMitigation2DISRUPTION TO THE GLOBAL SUPPLY CHAIN The conflict in Ukraine could adversely affect the Groups supply chain.Due to the lasting effects of Covid-19,we could experience disruption in the shipping ofo

279、ur product from our toll manufacturers.Due to current global supply chain issues,we could experience higher raw materials and freight costs.This risk is mitigated because the group currently does not have any suppliers in Ukraine or Russia.The Group has increased its forecasting of lead times from i

280、ts toll manufacturers to compensate for any potential shipping delays.We order higher quantities of raw materials to achieve favourable bulk pricing and ship large quantities of our product to reduce shipments.3COMMERCIALISATION RISK We are subject to risks relating to product concentration due to t

281、he fact that we derive substantially all ofour revenues from our Harpin product line and from the sale of third-party products.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.The conf

282、lict in Ukraine could adversely affect the Groups commercialisation efforts.Our PREtec product launches depend on evaluation and distribution partners converting their declared interest into formal commercial transactions.This risk is mitigated because the group currently does not have any customers

283、 in Ukraine or Russia.The Group is planning to hire additional personnel in 2022 to ensure that the commercial business achieves its short and long-term growth targets.We are actively engaged with several potential partners to ensure that they understand the value of our PREtec technology.4TECHNOLOG

284、Y RISK Our PREtec peptide development depends on demonstrating that the products can perform in the fieldagainst targeted value propositions.Trials can be influenced by weather and other factors,which canresult in the trials having to be repeated;this can lead to delays of a year in product launches

285、.We are developing new production methods for the commercial manufacture of PREtec peptides.We may be unsuccessful in achieving our targets for cost of goods.We may not be able to conclude agreements with outsourcing manufacturing partners or we may experience delays in scaling up to full commercial

286、 production.While a number of patents have been filed to date,we may be unable to secure adequate protection for the intellectual property covering our new technology and product candidates,or develop and commercialise these product candidates without infringing the intellectual property rights of t

287、hird parties.These risks are mitigated by reviewing and refining the strategy for commercialising our new technology to include both technology licensing and direct sales to distributors.The Group seeks to establish and protect its intellectual property rights by patents and other protectionmechanis

288、ms.5REGULATORY AND LEGAL RISK 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 potential products.If we use PREtec in trait development,our technologies a

289、nd 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 or manufacturing activities could be delayed,limited or prevented.These ri

290、sks are mitigated byconducting regular internalreviews to ensure ourcompliance with regulatoryrequirements.The Group also monitors prospective changes in local laws and regulations which may impact its business.6PERSONNEL AND RESOURCES Our future growth and ability to compete depend on retaining our

291、 key personnel and recruiting additional qualified personnel.The success of the Group depends on obtaining and maintaining the appropriate level of skilled resources.If any of our employees contract the Covid-19 disease,it could negatively impact our ability to meet our short and long-term objective

292、s.There is a heightened risk of employees working from home to be susceptible to phishing attempts or other cyber security risks.These risks are mitigated by keeping employees engaged inthe strategy of the Group and the establishing of long-term incentives.Annual reviews of the remuneration structur

293、e are carried out to retain and reward outstandingperformance.The executive officers are subject to long-term contracts.Key staff have contractual arrangements designed todevelop and incentivise them.Employees are periodically prompted to update their passwords and operating systems and are notified

294、 by Human Resources if phishing activity has increased.FINANCIAL INSTRUMENTSThe Group uses various 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.Informatio

295、n on the risks associated with the Groups involvement in financial instruments is given in note 20 to the financial statements.On behalf of the BoardDR CHRISTOPHER RICHARDSChief Executive Officer11 May 202231Annual report and accounts 2021CORPORATE GOVERNANCEBOARD OF DIRECTORSSTRONG AND EXPERIENCED

296、LEADERSHIPAAudit CommitteeRRemuneration CommitteeChair of CommitteeDR CHRISTOPHER G J RICHARDSChief Executive OfficerSkills and experienceDr Christopher Richards joined theCompany as Non-executive Chairman in August 2012.He became Executive Chairman in April 2015 then Interim Chief Executive Officer

297、 in November 2018.Christopher spent20 years at Syngenta and its predecessor companies in various strategic management positions in South America,Europe,and Asia.Hethen served as CEO of Arysta LifeScience from 2004 until 2010,leading Arysta LifeSciences transformation into a global agrochemical compa

298、ny with sales above$1.6 billion.He was then Chairman of Arysta LifeScience until2015.He serves on the Board ofdirectors of Origin Enterprises plc,a service provider to farmers for foodproduction solutions,and is Chairman of Nanoco Group plc,anano-materials technology company conducting research,deve

299、lopment and commercialisation of products based on heavy metal-free quantumdots.Other current rolesNoneDR RICHARD H WEBBNon-executive Chairman Skills and experienceDr Richard Webb joined the Companyin September 2013 as aNon-executive Director.In January 2015,he was appointed asan Executive Director,

300、responsiblefor leading the PREtec strategy and licensing.InJanuary 2019 he became a Non-executive again,taking over asChairman in October 2019.Richardheld various positions at ICIplc including,early in his career,managing laboratory,field,and commercial development programmes for its public health p

301、esticide business.Later he held corporate strategy roles at the time of ICIs demerger and restructuring.Thereafter,he worked as a consultant,mostly with life sciences businesses.It was in this capacity that he was originally engaged by theCompany in 2012 to work on thedevelopment of its new business

302、 strategy.His doctorate in Pest Biology was from the London School of Hygiene&Tropical Medicine.Other current rolesNoneARJEFFREY HOVEYChief Financial Officer Skills and experience Jeffrey Hovey joined the Company asChief Financial Officer in September 2013.He became an Executive Director in November

303、 2019.He has over 25 years financialmanagement experience and is a CPA with IFRS and US GAAPexperience.Jeffrey Hovey hasheld numerous senior financial and accounting roles in private and publicly listed retail,life sciences and technology companies.Whilewith a regional office supply company,he led t

304、he accounting andfinancial due diligence effort which ultimately led to the sale of thecompany to an international office supply company.Other current rolesNone32Plant Health Care plcGUY VAN ZWANENBERGNon-executive Director Skills and experienceGuy van Zwanenberg joined the Board inNovember 2019 as

305、a Non-executive Director.He is the Chair of the Audit Committee,a member of the Remuneration Committee and the Senior Independent Director.Guyhasmore than 40 years experience in industry and practice.He qualified asa Chartered Accountant with Grant Thornton and then spent three years working with Ja

306、mes Gulliver.Guysubsequently moved to become UKFinance Director of an American computer accessory company which was taken public in 1989.In 1991,heestablished his own interim financialmanagement business and hassince been involved in a number of SME businesses providing strategic and financial help.

307、Guy joined Gamingking plcin 1998(when listing on AIM)on a part time basis as Finance Director and became Company Secretary and Non-executive Director in 2006,remaining until May 2013,during whichtime he helped acquire several businesses and to reverse the company into Sceptre Leisure plc,which was t

308、hendelisted.He joined Quixant plc as anon-executive in March 2013 as part ofthe float team.In 2015 he joined as anon-executive at Coms plc and was partof the team which transformed thebusiness into the SaaS business Smartspace plc and became its Chairman in July 2018.Guy is both a Fellow of The Inst

309、itute of Chartered Accountants in England and Wales andaChartered Director.Other current rolesNoneARWILLIAM M LEWISNon-executive Director Skills and experienceWilliam Lewis joined the Company asa Non-executive Director in April 2015.He also currently serves as Chairman of the Remuneration Committee

310、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 and ISK Biosciences.He previously held senior roles within Arysta LifeScience,Syngenta Crop Protection and Z

311、eneca/ICI.WilliamLewis 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 of the businesses.Other current rolesNoneAR33Annual report and accounts 2021CORPORATE GOVERNANCEJEFFREY TWEED

312、YChief Operating Officer Skills and experienceJeff has been with Plant Health Care since October 2017.In 2019,Jeff was promoted to Chief Operating Officer andExecutive Board member after leading the growth of the Commercial business in North and South America.Under Jeffs leadership,the go-to-market

313、strategy was transformed to align Plant Health Cares technology withseveral of the largest distributors globally to broaden market access for Harpin.Recent growth of the North American Commercial business has been due to several exclusive distribution agreements signed for Harpin.Thefirst was signed

314、 with a leading supplier to the USA corn grower market,which has given the Group access to the 90 million-acre USA corn market.Thesecond agreement was with Wilbur-Ellis,one of the largest USA agriculture distributors,for applications to specialty crops(fruits and vegetables)which comprises more than

315、 7 million acres in the USA.Since 2019,these two agreements have delivered a Harpin revenue CAGR of 53%and$2.4 million ofrevenue in 2021.Jeff also led the commercialisation and launch of Saori as a seed treatment forsoybeans in Brazil.Saori is the firstproduct from the Groups PREtec platform to be b

316、rought to market,andBrazil is the largest producer of soybeans in the world.Saori was approved for sale in January 2021 for thecontrol of Asian soybean rust,afteronly 12 months of government regulatory evaluation.This unusually short evaluation period was because of Saoris effectiveness and sustaina

317、bility profile.Through Jeffs leadership,theGroup has secured a distribution agreement with Nutrien Ag Solutions,theworlds largest provider of crop inputsand services.Jeff also led the Groups goal of rationalising its supply chain and drivingdown its manufacturing costs.Tothis end,in 2021 he signed a

318、 production and supply agreement with aleading EU-based fermentation company.This has secured production capacity of PHC279,the active ingredient in Saori,to meet projected global demand.Volume production cost targets were met,ensuring an attractivegross margin for the Companywhile still delivering

319、an attractive return on investment for soybean farmers in Brazil.Jeff brings 30+years of technical,product development,sales management,and executive leadership to the Plant Health Care team.Jeff holds a Bachelors of Science and Master of Science from Southern Illinois University at Carbondale.Other

320、 current rolesNoneBOARD OF DIRECTORS CONTINUEDAAudit CommitteeRRemuneration CommitteeChair of Committee34Plant Health Care plcCORPORATE GOVERNANCE REPORTINTRODUCTIONPlant Health Care plc(the“Company”)is committed to maintaining the highest standards of corporate governance throughout its operations

321、and to ensuring that all of its practices are conducted transparently,ethically and efficiently.The Company believes thatcontinual review of all aspects of its business and reflecting,analysing and improving its procedures will result in the continued success of the Company and improve shareholder v

322、alue.Therefore,and in compliance with the updated AIM Rules for Companies,theCompany has chosen to formalise its governance policies by complying with the UKs Quoted Companies Alliance Corporate Governance Guidelines for Small and Mid-Size Quoted Companies(the“QCA Code”).The Company has followed the

323、 QCA Codes recommendations interms of disclosures to be made on its website and in this AnnualReport.Specifically,the QCA Code has 10 principles being:1.Establish a strategy and business model which promote long-term value for shareholders.2.Seek to understand and meet shareholder needs and expectat

324、ions.3.Take into account wider stakeholder and social responsibilities and their implications for long-term success.4.Embed effective risk management,considering both opportunities and threats,throughout the organisation.5.Maintain the board as a well-functioning,balanced team led bythe chair.6.Ensu

325、re that between them the directors have the necessary up-to-date experience,skills and capabilities.7.Evaluate board performance based on clear and relevant objectives,seeking continuous improvement.8.Promote a corporate culture that is based on ethical values andbehaviours.9.Maintain governance str

326、uctures and processes that are fit forpurpose and support good decision-making by the board.10.Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevantstakeholders.Disclosures recommended by the QCA Code to be included on the Companys w

327、ebsite,and not in its Annual Report,being principles 2,3 and 9 may be found on the Companys website.For more detailsregarding Corporate Governance,including the Companys compliance with the ten principles of the QCA Code,please seetheCompanys Corporate Governance Statement located at https:/ of the

328、remaining seven principles are described below.In assessing its compliance with the QCA Code,the Companys Board of Directors(the“Board”)is mindful that in some areas it may not fully comply with the QCA Code.Such non-compliance reflects the size of the Company,its stage of development and the comple

329、x scientific/specialist nature of certain of its activities.The Board isalert to the potential risks this may create and has therefore provided the following background and explanation.Messrs Lewis and van Zwanenberg chair the Companys two key committees and also meet with the Chairman separately on

330、 a regular basis.Board meetings have appropriately robust agendas and are held face to face in the USA or UK or remotely based on Covid-19 restrictions 5 times a year,with ad hoc meetings as and when the business needs demand.The USA is the main centre of activity and management of the Company.EachB

331、oard meeting also includes,where appropriate,involvement of the key executive leadership not on the Board.It is felt that the current Board has theright mix of skills thatare relevant to the Companys current position and stage of development.The Non-Executive Directors are satisfied that they presen

332、t effective challenges to the Executive Directors and management team as and when required.The Company has established specific committees and implemented certain policies and practices to ensure that:it is led by an effective Board which is collectively responsible forthe long-term success of the C

333、ompany;the Board and the committees have the appropriate balance of skills,experience,independence,and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively;the Board establish a formal and transparent arrangement forconsidering how it applies the corporate reporting,risk management,and internal control principles and for maintaining an appro