1、Plant Health Care plc Annual report and accounts 2020Plant Health Care plcAnnual report and accounts 2020GROWING SUSTAINABLYAT THE HEART OF THE MOVEMENT TOWARDS SUSTAINABLE FOOD PRODUCTIONSTRATEGIC REPORT1 Overview2 2020 in review4 At a glance6 Business model and strategy8 Chairmans statement9ChiefE
2、xecutiveOfficersstatement11 Commercial business14 New technology17 Science19 Environmental matters/sustainability20 Financial summary22 Key performance indicators(“KPIs”)24 Section 172 statement26 Risks and uncertaintiesCORPORATE GOVERNANCE28 Board of Directors30 Corporate governance report33 Audit
3、Committee report34 Remuneration Committee report37 Report of the Directors40 Statement of Directors responsibilitiesFINANCIAL STATEMENTS42 Independent auditors report47 Consolidated statement of comprehensiveincome48 Consolidatedstatementoffinancialposition49 Consolidatedstatementofchangesinequity50
4、 Consolidatedstatementofcashflows51 Notes forming part of the Group financialstatements74 Companystatementoffinancialposition75 Companystatementofchangesinequity76 Notes forming part of the Company financialstatements80 Directors and advisersIN THIS REPORTWe help farmers to feed the worldsustainably
5、.DR CHRISTOPHER RICHARDSChief Executive OfficerLearn more in our business model on page 6Stay up to date on our website at OVERVIEW Plant Health Care is a leading provider of biological products,helping farmers to feed the world sustainably.The market for biological products is growing at more than
6、16%pa,driven by the need to make farming more sustainable.Plant Health Cares core patented products act as“vaccines for plants”,improving crop yieldandqualitybymakingplantshealthier.The Companys Commercial business is now EBITDA positive and cash generative;demand in major markets in accelerating.Th
7、e Company has invested more than$20millioninPREtec,a powerful new platform technology,since 2012.PREtec products are targeting markets worthmorethan$5billionaroundtheworld.The first PREtec product,Saori,will be launchedin2021;arichproductpipelinefollows.1Annual report and accounts 2020STRATEGIC REPO
8、RTLEADING THE FIELD2020 IN REVIEWSustainability is a major trend in agriculture.Plant Health Care aims to help mainstream farmers by providing cost-effective products which help them to feed the world,without damaging the planet.Our products are classified by the Environmental Protection Agency of t
9、he USA as“low toxicity and zero residue”;assuch,theyreceive“fast track”approval.MEXICO Plant Health Care Mexico sells a range of sustainable products to farmers in Mexico.Harpin represented 25%of sales in 2020,with third-party products making up the remainder.Plant Health Care Mexico employs a staff
10、 of 15,including sales and technical specialists in the field,selling to retailers throughout the country.NORTH AMERICA(CORN)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
11、able to resist stress such as drought.Higher yields result.Launched in 2018,sales reached 650,000 acres in 2020.NORTH AMERICA(FRUITS AND VEGETABLES)Harpin is sold as“Employ”through Wilbur-Ellis,a$3.4billiondistributorintothespecialtycropmarketintheUSA.Employhelpsfarmerstogrowbetterqualitycrops,withl
12、ower pesticide inputs.Sales to Wilbur-Ellis doubled in 2020.Plant Health Care is also working with Wilbur-Ellis to develop four PREtecpeptidesforthismarket.2Plant Health Care plcEMEAA In the UK,Harpin is sold through Headland,a major distributor supplying to the professional turf market.Many leading
13、 golf courses and soccer fields are greener and more resilient to abiotic stress as a result.In Spain,Harpin is sold as ProAct AA,where sales into fruit and vegetable crops have now reached$1.0million.BRAZIL Harpin is sold as H2Copla into sugar cane in Brazil,through Coplacana,the largest distributo
14、r of inputs for this crop.Launched in 2018,sales reached 43,000Ha in 2020,three times the level of sales in 2019.Saori,the worlds first launch of a PREtec peptide product,will be in Brazil in late 2021.Saori helps soy farmers to combat diseases,which can devastate the crop.The Commercial business sa
15、w Harpin on ground sales grow two times in 2020 driven by strong performance in sugar cane,corn and specialty crops and delivering a cash positive business in 2020.Alignment with large distributors combined with strong performance in 2020 gives us confidence in strong Harpin growth for 2021.JEFFREY
16、TWEEDYChief Operating Officer3Annual report and accounts 2020STRATEGIC REPORTHOW WE PERFORMEDAT A GLANCEUsing environmentally friendly peptides derived from natural proteins,our innovative,patent-protected products help growers to protect their crops from stress and diseases,and to produce higher qu
17、ality fruitand vegetables,all while being compatible with mainstream agricultural practices.2020 HIGHLIGHTSCOMMERCIAL Revenue was$6.6 million(2019:$6.4million),a3%increaseontheprioryear,10%inconstantcurrency*.The Commercial business was EBITDA and cash positive for the first time.In-market sales in
18、the USA and Brazil doubled in 2020;product adoption points to strong revenue growth ex PHC.In-market distributor inventory reduced by more than$1 million.Market access:30 million hectares.Harpin in-market sales doubled in core markets.PREtec PRODUCTS Saori(PHC279),the first product from the PREtec p
19、latform,was registered as aseedtreatmentforsoybeansinBrazil.PHC279 was submitted for registration intheUSA.$20 million invested in PREtec platform.A Joint Development Agreement was signed with Wilbur-Ellis for the development of four PREtec products inspecialtycropsintheUSA.Low-cost manufacture of P
20、REtec peptides was demonstrated at the pilotscale.The first patents on PREtec were granted by the US Patent Office.The Group has a rich pipeline from the PREtec platform.GROUP Cash used in operations reduced to$2.5million(2019:$4.4million).AdjustedLBITDAimprovedto$3.3million(2019:$3.8million)Cashand
21、cashequivalentsincludinginvestmentsat31December2020were$4.1million(2019:$2.4million).The Company successfully raised 3.6million($4.4million)throughtheissuance of new ordinary shares in March2020andafurther6.6million($9.1 million)in March 2021.*Constantcurrencyisdefinedonpage10.*AdjustedLBITDA:lossbe
22、foreinterest,tax,depreciation,amortisation,sharebasedpaymentsandintercompanyforeignexchange.4Plant Health Care plc2020 SALES SPLIT BY REGION($m)18 18+3434+4848+M+M2020 SALES SPLIT BY PRODUCT($m)59 59+4141+M+M$3.9m Harpin$2.7m Thirdparty*ThirdpartysoldinMexico.$1.2m Rest of World$2.2m Americas$3.2m M
23、exicoREVENUE($m)$6.6m8.16.46.620182019 2020CASH AND INVESTMENTS($m)$4.1m4.32.44.120182019 2020ADJUSTED LBITDA($m)$(3.3)m(5.4)(3.8)(3.3)20182019 20205Annual report and accounts 2020STRATEGIC REPORTHOW WE DO BUSINESSBUSINESS MODEL AND STRATEGYThe Company develops and commercialises products which supp
24、ort mainstream farmers to produce better crops,more efficiently and more sustainably.The Commercial business is now EBITDA positive and generates cash.It is focused on driving the revenue of Harpin in large markets,where the product adds the most value.The current major targets are corn and specialt
25、y crops in the USA and sugar cane in Brazil.We will extend sales of Harpin into new crops and countries over time.Global product development iscomplex,expensiveandtimeconsuming.We will often work with strong local partners under Joint Development Agreements,to share experience and investment,sharing
26、 profit fromcommercialisation.We develop extensive intellectual property,mainly in our Seattle laboratory.We intend to continue investing in our IP,to defend and extend our lead in innovation with peptides for agriculture.We make appropriate use of outsourcing to optimise the use of capital.We work
27、with manufacturing partners to producehighqualityproductsusing the Groups proprietary production processes,developed in our laboratories inSeattle.Wedonotplantoown manufacturing assets.We are active players in the global market for biological products,which is growing atmorethan16%annually.There are
28、 numerous players inafragmentedmarket,whichweexpecttoconsolidateovertime.Our global capabilities ininnovationandcommercialdevelopment position us well for this trend.We are investing to develop and launch products from the PREtec platform.ThefirsttargetmarketsaresoybeansinBrazilandspecialtycropsinth
29、eUSA.WeaimtolaunchatleastonelargenewPREtec product every year from 2021 onwards.WewillstartthedevelopmentofPREtec products in Europe during 2021.We work in partnership with influential distributors,which enable us to access large numbers of farmers.Our distribution partners provide valued technical
30、advice onthebestuseofourproducts.Weworktogether to drive product adoption,to mutual benefit.GENERATING CASHCREATING SHARED VALUEBUILDING ON OUR OPPORTUNITIESINVESTING IN PRODUCTSWORKING IN PARTNERSHIPFind out more on page 11Find out more on page 14Find out more on page 116Plant Health Care plcOUR GR
31、OWTH STRATEGYOur future growth will be achieved by focusing on the following key areas:SUBSTANTIAL INCREASE IN MARKETACCESS1ACHIEVEMENTSWe intend to drive revenue in the short term by focusingondistributionofHarpin by aligning with large distributors with broad market access.We plan toexpandsalesinb
32、roadacrecropswhereHarpin provides the most benefit to farmers,including sugar cane,corn,soy,citrus,rice,almondsandgrapes.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating loss LBITDALAUNCHING PEPTIDE PRODUCTS FROMOURPREtec PLATFORMS2ACHIEVEMENTSIn trials conducted by PHC and our partn
33、ers in 2020,our lead peptide,PHC279,continued to provide impressive levels of disease control and improved yield in a variety of crops,including soybeans,corn,wheat and lettuces.Our application to sell PHC279 in Brazil for the treatment of Asian Soybean Rust was accepted by the relevant agencies,and
34、 we are anticipating a rapid approval process.We anticipate launches from 2021 onwards.LINKS TO KPIS Revenue Gross profit Gross profit margin LBITDABUILDING FURTHER THE CAPABILITY TO DELIVER ADDITIONAL PRODUCTS FROMPREtec3ACHIEVEMENTSHaving now established pilot plant manufacturing capabilities at P
35、enn State Universitys CSL Behring FermentationFacility,PlantHealthCarecanquicklyscale up production of other PREtec peptides in its pipeline,including PHC949 and PHC414.LINKS TO KPIS Revenue Gross profit Gross profit margin LBITDAIP PROTECTION AND ONGOINGINNOVATION4ACHIEVEMENTSThe Group has an exten
36、sive 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 reviewed around the world,as the Group builds its IP portfolio.LINKS TO KPIS Revenue Gross profit Gross profit
37、margin Operating loss LBITDACONSOLIDATION5ACHIEVEMENTSThe Group is well positioned to consolidate the biologicals market due its capability to evaluate technologies and broad market access.LINKS TO KPIS Revenue Gross profit Gross profit margin Operating lossFind our key performance indicators on pag
38、e 227Annual report and accounts 2020STRATEGIC REPORTCONTINUED SUSTAINABLE GROWTHCHAIRMANS STATEMENTDr Richard Webb,Non-executive ChairmanI am proud to report that Plant Health Care rose tothe challenge in this most challenging of years.Our staff adapted swiftly and creatively to find effective ways
39、to work around the global restrictions caused by Covid-19.Despite all the disruption,we delivered year-on-year revenue growth in 2020.Operating cost savings were also delivered and a further improvement in working capital over 2020.The outcome was that our Commercial operations were EBITDA and cash
40、positive for the first time.In a year when revenues grew and our development programme accelerated,PHC still reduced cash burn by more than expected.We ended the year with over$4millionofcashequivalentsandinvestmentsinhand.Thisisagreatcredit not only to the Executive leadership,but also to our loyal
41、 and hard-working staff in five countries.Covid-19 brought about many work and personal life challenges.WetookearlyanddecisivemanagementactionduringtheonsetofCovid19.TheGroupdecidedearlyontolookafteritsemployeesand customers to minimise disruption to the business and ensure thatthelongtermgoalsofthe
42、Groupareunaffected.Aspartofseveral governmental assistance programmes,the Group received$0.3 million from the Paycheck Protection Program in the USA and$0.1 million in Spain.The Group experienced minimal disruption from Covid-19 globally,where domestic demand for fruits and vegetables and the Peso d
43、evaluation held back sales growth.Agricultural input companies faced mixed fortunes in 2020,but world opinion is swinging strongly in support of novel and sustainable solutions to help farmers preserve their soils,increase crop yields andquality,andreducecarbonandresiduefootprints.PHCisapioneer in t
44、his sector,and after investing$20 million in new technology over the past seven years,we now have a broad portfolio of benign biologicals close to launch.In agriculture,long dominated by harsh chemical fertilisers and pesticides,our patented PREtec is a disruptive technology.It acts not directly on
45、pests,diseases or soils,but on the plants themselves,toboosttheirdefencesandimproveyield,vigourandharvestquality.We call our products“vaccines for plants”.Tiny protein fragments mimic natural signals in the environment and stimulate the plants to defend themselves,to build stronger,and to lay down m
46、ore seeds and biomass.PREtec rapidly biodegrades,but its beneficial effects persist.Theresultingdeeperrootssequestermorecarbontothesoil,thehigheryieldsrequirenoadditionalfertiliser,andinsugarcanethe surge converts to over 20%more biofuel produced per hectare.Our success in getting registrations in B
47、razil ahead of expectation shows that international regulatory authorities recognise the benefits and benign profile of our new products.PREtec registrations are advancing in Brazil and North America it is our ambition to address Europe next,as the largest biologicals market in the world.In March 20
48、20 we completed a$4.4 million fundraise at 8p per share in the teeth of an emerging international crisis and stock market downturn.Post year end,in March 2021 we completed a$9.1 million(net of costs)fundraise at 14p per share,to finance accelerated PREtec product launches and address opportunities i
49、n Europe.During 2020,Board meetings and the AGM moved to a remote format,which is not ideal but works well.AMBA Secretaries Limited took over the role of PHC Company Secretary in July 2020 and the Board is benefiting from her deep experience.DR RICHARD WEBBChairman22 April 2021MISSION AND VALUESSust
50、ainability-We care passionately about sustainability.All of our products help farmers grow crops more sustainably.We aim to support mainstream agriculture,aswellasorganicgrowers,tofeedtheworldsustainably.Science-We believe that science drives progress.All of our products are built by leading edge sc
51、ience.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 and other stakeholders to deliver our mission.Prosperity-Economic s
52、ustainability is essential to our success as a business.Our work should create financial benefits for our customers,partners and employees,alongside shareholders.8Plant Health Care plcA CLEARLY DEFINED STRATEGYCHIEF EXECUTIVE OFFICERS STATEMENTDr Christopher Richards,Chief Executive OfficerPlant Hea
53、lth Care had a year of substantial progress,in both the Commercial business and in the development of the very exciting PREtec new technology.Global agriculture needs sustainable products more than ever;Plant Health Care intends to contribute to this effort with outstandingly cost-effective products
54、.This progress builds on the clear strategic direction established in recent years,with momentum maintained in spite of the disruption of Covid-19 on so many aspects of life.FUNDRAISEWe were delighted in March 2021 to receive the support of shareholders for a fundraise.We raise$9.1 million(net of co
55、sts)to finance accelerated PREtec product launches and address growth opportunities in Europe.COMMERCIAL BUSINESS IN-MARKET SALES ACCELERATINGIn the Commercial business,in-market sales of Harpin in our three core growth markets in the USA and Brazil doubled.We now have close relationships with the m
56、ajor distributors which are our partners in these markets and work with them to drive customer adoption of the product.Improved visibility of in-market sales led us to reduce in-market inventory of Harpin by more than$1 million.As a result,reported sales of Harpin ($3.9 million)substantially underst
57、ate progress in developing grower demand for this outstanding product.Revenue growth of 10%in constant currency(3%in US$)to$6.6 million would have been significantly higher.Harpin sales in the Brazilian sugar cane market in 2020 were three times that of 2019,driven by consistent yield increases well
58、 inexcessof20%andareturnoninvestment(“ROI”)forgrowersofmorethan14times.Aswetrackmonthlysales,wehaveseenproduct adoption accelerate.We increased our investment in field promotioninsugarcaneinthesecondhalfof2020,whichshouldhelp to bring the benefits of Harpin tonewusersoverthecoming years.In the USA,H
59、arpin performed very well as a seed treatment in corn in 2020,consistently delivering stronger early plant growth.With in-market sales 1.8 times those in 2019,we are confident of continued growth in the coming years.Also in the USA,we are delighted by the progress with our new partner,Wilbur-Ellis,i
60、n specialty crops.Wilbur-Ellis is not only a very large distributor with nationwide reach,it is also focused on bringing the benefits of biological products to growers through its highly skilled agronomists in the field.This capability is delivering increased sales in crops where Harpin was already
61、established.With the launch of Harpin into almonds and grapes in California,we anticipate further growth to come.In Europe,sales to new markets compensated for the impact ofCovid19;salesincreasedby24%(22%inconstantcurrency).However,reduced demand for domestic fruits and vegetables in the pandemic ad
62、versely affected sales in Mexico;in particular,wewereunabletoraisepricestocompensateforthedevaluationof the Mexican Peso.Sales in Mexico nonetheless came close to target in local currency.PREtec NEW TECHNOLOGY PROGRESS TOWARDS FIRST PRODUCT LAUNCHESAfter eight years and an investment in excess of$20
63、 million,weareenormouslyexcitedbytheprospectofthefirstproductlaunch from the PREtec platform.Saori,the new name for PHC279 in Brazil,will be introduced to Brazilian soybean growers inthesecondhalfof2021.ThecurrentpipelineofPREtec products is targeting markets with a current value of more than$5 bill
64、ion;we are set on a highly ambitious plan.With outstanding grower benefits and an excellent sustainability profile,we are confident of a bright future for PREtec products.The Brazilian authorities registered Saori in an astonishingly short 13 months from the date of our submission.As we report later
65、,the“early read”from this seasons trials with Saori demonstrates again the substantial benefits of the product for growers.Our focus in 2021 will be on getting Saori trialed by as many“early adopters”as possible,with the limited product volumes available this year;this will provide a good base for a
66、ccelerated product adoption in 2022 and beyond.In the USA,we were delighted to conclude a Joint Development Agreement with Wilbur-Ellis for the development and commercialisation of four PREtec peptides in specialty crops in theUSA.TheregulatorysubmissionofPHC279wasmadetotheEnvironmental Protection A
67、gency(“EPA”)of the USA in late 2020;we expect registration to be granted in the second half of 2022,with a succession of product launches following.9Annual report and accounts 2020STRATEGIC REPORTPREtec NEW TECHNOLOGY PROGRESS TOWARDS FIRST PRODUCT LAUNCHES CONTINUEDThe PREtec product pipeline is bu
68、ilding well,with substantial progress in bringing forward the next products.PHC949 is showing exceptional promise for control of nematodes;we expect to make a submission for this product to the EPA during 2021,with first salesin2023.HardonitsheelscomesPHC404,apowerfulbiostimulant,and other products
69、will follow.Substantial progress has been made towards establishing low-cost manufacture of PREtec peptides at a commercial scale.While the launch of Saori is being met from pilot scale manufacture,we anticipate concluding long-term toll manufacturing arrangements during the course of 2021.IMPACT OF
70、 COVID-19Covid-19 impacted growers of fruits and vegetables globally,assupplychainsrushedtoadapttotheclosingoffoodserviceindustries such as restaurants and canteens.In the first months ofthepandemic,thiscausedsignificantdisruptiontocompaniessupplying inputs for these crops,including Plant Health Car
71、e.However,with the exception of Mexico,growth in demand for Harpin was such that the impact on the Companys revenue was limited.The Companys ability to promote the use of our products through field days,technical visits and promotional events was significantly constrained;while remote contacts were
72、used extensively,we cannot rule out some impact on future growth.The ravages of Covid-19 did not leave Plant Health Cares team untouched.Like everyone else around the world,PHC employees faced substantial additional challenges,alongside ensuring the safetyoffamily,customersandcolleagues.Thisrequired
73、substantial changes to work patterns,making it especially hard forourfieldpromotionteamstoengagewithcustomers.WhileIampleasedtoreportthatthehandfulofPHCemployeeswhocontracted Covid-19 have all made a full recovery,we continue tomonitorthedevelopmentofthevirusclosely;newvariantsandvariablelockdownreg
74、imeswillpresentchallengesthroughout2021 and,most likely,beyond.Our commercial business is now profitable,with revenue poised to accelerate.Our first PREtec product will be launched in 2021;a strong pipeline follows.DR CHRISTOPHER RICHARDSChief Executive OfficerCHIEF EXECUTIVE OFFICERS STATEMENT CONT
75、INUEDDr Christopher Richards,Chief Executive OfficerSUMMARY AND OUTLOOKPlant Health Care is well positioned for growth in 2021.In our core markets,Harpin is gaining traction together with very strong distributor partners.The prices of agricultural commodities have bounced back to the highest level f
76、or many years;growers will be investing more in their crops and may be willing to try new,yield-enhancing products.The PREtec product pipeline looks stronger every time we look at it.Our first product launch,Saori in Brazil,is a pivotal moment for the Group.With regulatory submissions in the USA and
77、 in South America,the schedule of product launches is taking shape,with profitable sales building from there.The recent fundraise will allow us to invest,to accelerate this growth,not only in the Americas butalsotoenterEurope,thelargestmarketintheworldforsustainable agriculture.Supporting this growt
78、h is an exciting challenge for the Plant Health Care team.As we grow,the team is increasing in size,but we remain a small team of high-performing professionals around the world.The global team is increasingly sharing ideas for product development and growth,learning from each other.What works for ci
79、trus and fruit in Spain often works also in the USA;exceptional results on golf courses in the UK offer learnings for the much larger market in the USA;and seed treatment in Brazil and the USA can teach much to Europe.I am highly privileged to lead this outstanding team.In closing,I would like to th
80、ank the entire Plant Health Care team for all its hard work during the year.As CEO,I am proud of the Groups impressive team of highly motivated professionals,inwhomIhavethegreatestconfidence.CONSTANT CURRENCYWe evaluate our results of operations on an as reported and constant currency basis.The cons
81、tant currency presentation,which is a non-IFRS measure,excludes the impact of fluctuations in foreign currency exchange rates.We believe providing constant currency information provides valuable supplemental information regarding our results of operations,consistent with how we evaluate our performa
82、nce.We calculate constant currency percentages by converting our prior-period local currency financial results using the current period exchange rates and comparing these adjusted amounts to our current period reported results.DR CHRISTOPHER RICHARDSChief Executive Officer22 April 202110Plant Health
83、 Care plcCOMMERCIAL BUSINESSOverall sales in 2020 were$6.6 million,an increase of 3%(10%in constantcurrency*)comparedwith2019($6.4million).Salesbyregion are listed in the table below:20202019GrowthCC growth$000$000percentagepercentageNorth America1,6571,715(3%)(3%)South America52741627%64%EMEAA1,213
84、97524%22%Mexico3,2143,330(3%)7%Sales of core Harpin products increased by 7%(13%in constant currency).Harpin represented 56%of sales in 2020(2019:59%).Although sales in North America were flat year over year because of a one-time sale in 2019,in-market sales of our two distributors incornandspecialt
85、ycropsgrewsubstantially.Incorn,inmarketsales of Harpin reached 650,000 acres,some 1.8 times those in2019;thisresultedinsubstantialreductionintheinventoryheldby our distributor.Moreover,the product is delivering impressive results;data from the Independent Seedsmen Association(IPSA)an independent age
86、ncy,showed yield increases of up to 5%.This creates a strong base for future sales growth.In specialty crops(fruits and vegetables),sales to Wilbur-Ellis doubled.We also achieved a registration for Harpin in California,for use on the important almond and citrus crops;Wilbur-Ellis will launch Employ
87、into those crops in 2021.Sales ex Plant Health Care in 2020 were$1.7 million(2019:$1.7 million);we estimate that distributor inventoryinNorthAmericadecreasedbyapproximately$400k.POTENTIAL FOR SIGNIFICANT REVENUE GROWTHEMEAAThe prestigious Agricultural Technical Adviser JosMara Filgueiras Snchez reco
88、mmends ProActforitsexcellent results in citrus.About seven years ago,Jos Mara Filgueiras Snchez,one of Spains leading experts in citrus cultivation,encountered problems with skin physiological disorders in mandarins.He decided to test ProAct and was surprised by the spectacular results provided by P
89、lant Health Cares biostimulant product.Filgueiras Snchez,Agricultural Technical engineer and Agrovesas company associate,located in the south of Alicante(Spain),advises thousands of hectares in the Spanish Mediterranean and since that test recommends the use of ProAct in different varieties of manda
90、rins,oranges and lemons:“because the results have always been very good as on that first occasion:“We are very happy with the product because we are drastically reducing skin physiological disorders in all varieties”.JosMaraFilgueirasSnchez,AgrovesaTechnicalAdviser,talkstongelMarn,CommercialDirector
91、EMEAAatPlantHealthCare11Annual report and accounts 2020STRATEGIC REPORTIn-market sales to sugar cane in Brazil grew three times in 2020 versus 2019 levels due to continued adoption of our proprietary product H2Copla in the sugar cane market.The H2Copla product isgainingtractionrapidly,duetotheconsis
92、tentyieldincreasesofmorethan23%.During2020,wereviewedwithourpartnerCoplacana the plans for promoting H2Copla in the field,following the first 18 months of sales since launch in 2018.We have agreed increased resources dedicated to the product,which should drive further sales increases in the future.S
93、ales ex PHC in Brazil increased 27%in 2020(64%in constant currency)to$0.5 million(2019:$0.4 million).NUMBER OF HECTARES OF HARPIN SOLD ONTO SUGAR CANEJan 19Apr 19Jul 19Oct 19Jan 20Apr 20Jul 20Oct 20Jan 2150,00040,00030,00020,00010,0000Sales in EMEAA increased to$1.2 million due to further growth int
94、o the citrus market and expansion into the Chile market.Sales in Spain increased by 33%to$0.9 million(2019:$0.7 million).In South Africa,sales continued to be hit by drought and the Group decided not to make any sales in order to further reduce in-market inventory.Sales in Mexico decreased 3%to$3.2
95、million(increased 7%in constant currency).Sales of Harpin decreased by 9%(increased by 1%constant currency).The decrease in sales can be attributed to the devaluation of the Peso and decreased domestic demand of fruits and vegetables.COMMERCIAL BUSINESS CONTINUEDBRAZILAccelerating in-market sales of
96、 H2Copla2020 was a challenging year in Brazil due to the restrictions imposed by Covid-19.Despite these restrictions,Plant Health Care,working in collaboration with Coplacana,increased in-market sales of H2Copla on sugar cane by three times versus 2019.Plant Health Care Brazil increased sales and ex
97、panded the technical team in Brazil to focus on accelerating sales in sugar cane and to grow product adoption by sugar cane processors.“There is an amazing opportunity to generate value with sustainability on sugar cane in Brazil.The Harpin protein generates incredible benefits helping the crop to e
98、nhance development and production with the current technology adoption.During the last five years,Plant Health Care Brazil has expanded ways of using the Harpin protein on sugar cane,making itevenmoreuserfriendlytogrowers,”saysRodrigode Miranda,PHC Brazil General Manager.H2Copla has continued to con
99、sistently demonstrate sugar cane yield increases of more than 25%over four years of testing.Applications have expanded from foliar ratoon to in-furrow,ratoon cut and seedling applications prior to planting.H2Copla has delivered amazing yield results with expanded use patterns.H2Coplaisnowpoisedforra
100、pidadoptioninsugarcane.Rodrigo de Miranda,General Manager,PHC BrazilH2Copla is all technology.WhenIuseit,I know that I will havegreat results.I am so in love with itand cant live without it anymore.The results are incredible.ALVARO AMGARTENSugar cane producer in Cosmopolis,So Paulo,Brazil12Plant Hea
101、lth Care plcNORTH AMERICAExpansion in California via Wilbur-Ellis2021 brings renewed excitement to the expansion of Plant Health Cares core product,Harpin,withexpansioninCalifornia.IncollaborationwithWilbur-Ellis,Harpin,the active ingredient in Employ,is being launched as part of Wilbur-Ellis Integr
102、ated Crop Management Portfolio.“With California leading the US specialty crops this year,we launched Employ in almonds and grapes,which focuses on almost 2 million acres of opportunity.We intend to continue our label expansion with Wilbur-Ellis in leafy and brassica crops,berries and cherries this f
103、all,”says Plant Health Cares Head of Sales,Barner Jones.“Growers continue to focus on integrated crop management in specialty crops,which makes Employ a perfect fit in California,”says Jones.Employ has shown its ability to improve root development which aids in nutrient uptake and water utilisation
104、while helping the plant improve its natural ability to defend itself against abiotic and biotic stress factors,including diseases and nematodes,thus showing significant improvement in yield.Travis Hester-Supply Chain ManagerBarner Jones,Head of Sales US and cherries from CaliforniaADMINISTRATIONTrav
105、is Hester Supply Chain ManagerTravis graduated from the North Carolina State University withadegreeinAgriculturalBusinessManagement.HejoinedPlant Health Care in July of 2018 and has been instrumental in consolidating our vendors to better support the commercial business while improving the overall i
106、nventory position of PlantHealthCare.During 2020,the focus of Supply Chain has been to select a potential manufacturing partner for scale up of the production of Saori.In 2021,Travis will focus on delivering commercial production ofSaoriandbeginscaleupproductionofPHC949.13Annual report and accounts
107、2020STRATEGIC REPORTNEW TECHNOLOGYPREtec-NEW TECHNOLOGYAfter an investment of more than$20 million since 2012,Plant Health Cares PREtec(Plant Response Elicitor Technology)platform has now generated a strong pipeline of blockbuster products;the first product from this pipeline,Saori,was registered in
108、 Brazil in January 2021.The Group is currently focusing on three products targeting very large market opportunities with a value of more than$5 billion.Further products are under evaluation.WHAT IS PREtec?PREtec is a novel,environmentally friendly approach to growing crops more sustainably.PREtec pe
109、ptides can be thought of as“vaccines for plants”-they stimulate the plants natural defence systemsandresultinimprovedcropyieldandquality.Derivedfromnaturallyoccurringproteins,PREtec peptides present a broad opportunity to develop novel crop protection and yield-enhancing products.PlantHealthCarehasf
110、iledmorethan40patentsonPREtec,the first three of which have now been granted by the USPatentOffice.GROWTH OPPORTUNITIESIn November,the Company announced a Joint Development Agreement with Wilbur-Ellis for the commercialisation of four PREtec products in US specialty crops(fruits and vegetables).This
111、collaborationbringstogetherthedevelopmentandmarketingstrengths,as well as decades of agricultural knowledge,of Wilbur-Ellis,especially in biological products,with Plant Health Cares industry-leading expertise on PREtec peptides.As one of the largest US distributors of crop protection products and wi
112、th its focus on innovative products for specialty crops markets,Wilbur-Ellis is an ideal partner to launch PREtec into the US specialty crops market.Multiple PREtec products are being evaluated,initially focusing on improving disease and nematode control,and plant stress tolerance.The parties are co
113、mmitted to rapidly moving new products through the development process inordertomakethisnoveltechnologyavailabletogrowersassoonas possible.InBrazil,regulatoryauthoritiesapprovedPHC279(subsequentlybranded Saori)for sale in soybeans.Saori will be used as a seed treatment;trials over the last three yea
114、rs have shown excellent early vigour and disease control,resulting in significantly increased crop yield.There is an extensive field-testing programme underway inthe2020/21season,whichhasconfirmedtheseoutstandinggrower benefits.Plant Health Care is in discussion with several leading crop protection
115、companies regarding the distribution of Saori.Many of these companies have planted their own soybean trials to independently confirm the performance of Saori.The Group is planning the commercial launch of Saori during the second half of 2021.Initial sales will specifically focus on early adopters of
116、 novel technologies within the sustainable agricultural markets.There are 38 million hectares of soy planted in Brazil,onwhichgrowersspendsome$2.5billiononcontrollingdisease.Significant penetration of this market is expected over the comingyears.Europe represents an excellent market opportunity for
117、PREtec.Increasingly stringent environmental and safety regulations across the EU have resulted in many heavily used products having their registrations cancelled,often leaving growers without viable solutions to manage their crops.Moreover,the EU has set out targets to further reduce agrochemical us
118、age,through the“FarmtoFork”framework,whichaimstopromotetheadoptionofsustainable agriculture.As a result,Europe is expected to see rapid growth in the market for biostimulants and biocontrols over the next decade and is already recognised as the largest global market for plant biostimulants and one o
119、f the largest markets for biocontrol solutions.Plant Health Care has started to conduct trials in the EU and the UK,as a first step to entering this very large market.TARGET MARKETSPREtec peptides are targeting markets with global agrochemical sales of more than$5 billion.These markets are split by
120、crops(corn,soy,etc.),geographies(USA,Brazil and Europe)and mode ofapplication(seedtreatmentorfoliarspray),providinganumberofspecificopportunities.Theaverageyieldincrease(5%+)achievedwith PREtec in large acreage row crops is one easily identifiable point of potential value of PREtec to the industry a
121、nd highlights how valuable even a small market share could be.The opportunity for Saori in Brazil(and LATAM more generally)to prevent and treat disease(especially Asian Soybean Rust(“ASR”)is very large.ASR,caused by the fungus Phakopsora pachyrhizi,is a devastating disease which can lead to crop yie
122、ld loss of up to 90%.Brazilian soybean farmers spent US$2.85 billion on disease control in the 2019/20 season,approximately 90%of which was for ASR control.The Group has also observed significantly improved early plant growth and enhanced early season disease control in Saori testing,suggesting that
123、 Saori may add value beyond the ASR control opportunity.Being adopted for use on even a single-digit percentage of the available soybean hectares in Brazil would generate millions of Dollars in annual Saori sales.In addition to the opportunities discussed elsewhere for PREtec inspecialtycropsintheUS
124、AviaitscollaborationwithWilburEllis,the Company is pursuing development in the USA of PHC279 as:(1)afungicideboosterinwhichthepeptideisaddedtoexistingPREtec PEPTIDES:POISED TO ENTERLARGE MARKETS14Plant Health Care plcINTELLECTUAL PROPERTY PROTECTION OF PREtecInnovation is at the heart of what Plant
125、Health Care does every day and having a strong position protecting its intellectual property is critical to its success.Plant Health Care has filed more than 50 patent applications worldwide for its PREtec peptide technology since 2012.In 2020,the Group announced that its first seven US PREtec paten
126、ts were granted by the US Patent and Trademark Office(“USPTO”).These patents provide protection for a wide range of PREtec peptides and their use in agricultural production.Additional patents are expected to be granted in 2021,including the first foreign patents corresponding to the US patents.These
127、 patents provide robust barriers to potential competitors and will enable the Company to pursue strategic and opportunistic out-licensing opportunities.chemical fungicides to improve the spectrum of disease control in potatoes and other row crops,(2)a foliar micronutrient,in which PHC279 improves nu
128、trient uptake by corn and soy plants to improve yield,and(3)as a seed treatment to fight soil-borne disease and increase yields in soybeans.In Brazil,PHC is also exploring the opportunity for PHC279 as a foliar product to enhance disease control and yield in sugar cane.PHC414 is a biostimulant that
129、has demonstrated reliable performance in a variety of crops.As such,the Group anticipates that the product will be regulated as a fertiliser in some countries andisbeingtargetedatthequalityandyieldcharacteristicsoftheglobal fruit and vegetable market.PHC949 is being developed for the control of nema
130、todes in row crops and specialty crops in the USA and LATAM.Recent field studies indicate that PHC949 offers improved nematode control characteristics relative to current leading chemical products whether it is applied via foliar application or as a seed treatment.The global nematicides market size
131、was estimated to be valued at US$1.3 billion in 2019 and is projected to reach US$1.6 billion by 2025.Vegetables accounted for the largest share of the nematicides market globally in 2018 and North America was the largest market,driven by use on soybean,corn and cotton crops.PHC949 is expected to fi
132、nd applications in US and Brazilian soy crops as well as US,Brazilian and European vegetable crops.REGISTRATIONSSaori was approved for commercial use as a seed treatment for the prevention and control of ASR.The approval process was completed by the three responsible Brazilian regulatory agencies in
133、 just over one year.This rapid approval is a testimony to the safety profile of Saori and the urgency the Brazilian government attaches to making new sustainable solutions available for soybean growers in order to reduce reliance on traditional,less safe,chemical fungicides.The Company is currently
134、planning to pursue regulatory approval for Saori in the other important South American soybean growing markets,including Argentina and Paraguay.In the USA,PHC279 was submitted for approval to the EPA as a biopesticide in February 2020.This submission starts the clock on an 18-month review process th
135、at is expected to permit PHC279 to be used for the prevention and treatment of a variety of agronomically important diseases in a wide range of row crops and specialty crops.Given PHCs prior success achieving registration for a similar product,PHC398,approved earlier in the year by the EPA,the Group
136、 anticipates by the EPA in the second half of 2022.Also in the USA,PHC404 was registered in 2020 under the brand ZARAgrowTM for use as a fertiliser in California.In 2021 the Group plans to submit an application to the EPA for approval of PREtec peptide PHC949 for use in row crops and specialty crops
137、 for the control of soil nematodes.Assuming the review process proceeds as expected,the US launch of PHC949 could occur in early 2023.In Europe,a variety of PREtec products are being evaluated,both as plant protectants for enhanced disease control and as biostimulants in row crops and specialty crop
138、s.In 2021,the Group intends to ramp up the PREtec development programme substantially.15Annual report and accounts 2020STRATEGIC REPORTNEW TECHNOLOGY CONTINUEDNEW TECHNOLOGYCHIJUN LISENIOR SCIENTISTChijun holds a PhD in Plant Science from the Institute of Botany,Chinese Academy of Sciences,Beijing,C
139、hina,and received his masters in Plant Science from Sichuan University inChengdu,Sichuan,China.Chijun joined Plant Health Care in June 2015 to support the research effort in our Seattle,Washington laboratory.He has been pivotal in successfully developing the first-generation antibiotic-free strain f
140、or the production of our 279 peptide,optimised the processing method for our 949 peptide and assisted with the pilot scale production at the Penn State University for several of our lead peptides.Chijun Li,Senior ScientistPREtec TARGETING MARKETS WITH VALUE GREATER THAN$5 BILLIONSUNK INVESTMENT$20 M
141、ILLION;SCOPE TO ACCELERATE LAUNCH ROLL-OUT201214 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 40 patents filed;first patents granted in 2020 201719 EFFICACY CONFIRMED Testing in mul
142、tiplecropsintheUSA,Braziland the EU PHC279 emerging as first champion Low-cost production process in lab202021 REGULATOR SUBMISSION FIRST LAUNCH PHC279 registered in Brazil;launch H22021 PHC279 production scale-up confirms low COGS PHC949 second champion;US submission JDA with Wilbur-Ellis in US spe
143、cialty crops202225 ACCELERATE LAUNCHES Achieve US and Brazil registrations of PHC279 and PHC949 Launch first products with Wilbur-Ellis in the USA Further JDAs andpartnershipsfor multiple launches Product development inEurope16Plant Health Care plcSCIENCEZhongmin Wei,Chief Science OfficerA plant has
144、 its own strong immune activity,which is activated in nature by infectious agents such as bacteria and fungi.The same reaction can be activated by carefully targeted plant vaccines/elicitors,such as Harpin or a PREtec peptide.Our PREtec technology platform enables us to develop multiple such plant v
145、accine products with targeted performance such as disease,nematode,growth and yield enhancement.PREtec has a completely novel mode of action:it works inside out by activating a plants innate defence and growth system.As illustrated inthepicturebelow,asasignalmoleculetheactivepieceofpeptidesequencepe
146、netratesthecellwallanddirectlyinteractswithpreexistingreceptor-like proteins by chemical binding.The binding complex triggers cascade responses and leads to the activation of specific plant resistance and growth pathways,through the plant.The activation involves elevating the expression of multiple
147、genes,just as if the plant had been attacked by a pathogen and abiotic stress such as drought.Itisimportanttorememberthatthisisnotgeneticmodification;PREtec is simply stimulating an entirely natural response within the plant.While the reaction can have effects which last for a considerable time,thes
148、e effects are not passed on to the next generation.PREtec is environmentally friendly and a sustainable technology.There is no demonstrable toxicity against any other living organisms.Most of the ingredients of the product are edible material such as protein and corn starch.Once PREtecisappliedtocro
149、ps,thepeptidewillquicklybedegraded into plant food and leaves no residues in the environment.This is acknowledged by the Environmental Protection Agency(“EPA”)of the USA,which has classified PREtec peptides as having low toxicity and leaving zero residues in either plants or the environment.After 30
150、 years of research and development work on plant elicitors,we were able to build the PREtec discovery platform over the last eight years.We synthesised,characterised and tested more than 800 peptides for specific performance,which led to the discovery of three distinct product development platforms,
151、each of which has the potential to produce many products with different characteristics.These discoveries led to over 40 patents being filed,the first of which have now been granted by the US Patent Office.Innatus 3G This platform enables us to develop products serving as a plant vaccine to prevent
152、diseases such as Asian Soybean Rust(“ASR”).The vaccinated plants also show enhanced growth,strength and yield increase.We are currently focused on PHC279 from the Innatus 3G platform,whichhasshownremarkableactivityinmanycrops.T-Rex 3G This platform enables us to develop products specifically for the
153、 activation of plants natural defence against nematode infection for both major row crops and specialty crops.The vaccinated plants also show great resistance to abiotic stress such as drought.Within T-Rex 3G,we are currently focused on PHC949.This product is showing performance comparable to that o
154、f conventional chemicals in field trials;this is very remarkable efficacy for a biological product,with its very benign toxicological profile.Y-Max 3G This platform enables us to develop products as biostimulants activating plant growth genes and pathways for yield increaseandqualityimprovementinvar
155、iouscropssuchasfruitandvegetables.We are currently focused on PHC404 and PHC414 from the Y-Max platform.Both are showing encouraging results in the field.Dozens of potential PREtec candidates have been identified and tested in greenhouses and in the field for multiple years as pipeline products.We h
156、ave developed fermentation-based high-yield production methods for our PREtecproducts.Bothdryandliquidformulationshave been developed.Our production method is simple,consistent and very low cost.The production method uses largely food grade raw materials and has zero discharge,which makes it very en
157、vironmentally friendly.Toll manufacturing at pilot scale has been achieved and large-scale commercial production is in process.SCIENTIFIC EXCELLENCE17Annual report and accounts 2020STRATEGIC REPORTLeading togrowth and defenceresponses,incl.SARPLANT RESPONSE ELICITOR TECHNOLOGYIn comparing to the cur
158、rent Harpin commercial product,PREtec offers the following advantages:1)More potent enters the plant cells and activates plant defence and growth pathways.2)Morestableandabletodeliverliquidformulationproduct,soeasiertouse.3)Differentiated products have specific performance advantages,such as increas
159、ed disease resistance,reduced nematode infection and enhanced yield.4)Lower cost to achieve the same effect in the field.SCIENCE CONTINUEDPRODUCT PIPELINE TARGETING MARKETS WORTH$5BNSoybeans;greater vigour plusdisease control H2 2021 LAUNCH PLANNEDDISEASE AND YIELDFruit&veg;disease managementMULTIPL
160、E LAUNCHES INTO$4.9BN MARKETSDISEASE CONTROL BIOPESTICIDEFruit&veg;yield&quality$582m MARKETYIELD AND QUALITY BIOSTIMULANTAll crops;protect against soil pests;replace toxic chemicals GLOBALNEMATODE MARKET$1.3BNNEMATODE CONTROL BIOPESTICIDENEMATODE CONTROL BIOPESTICIDEPotentially all crops;pesticides
161、 being removed by regulators ENTERWORLDS LARGESTMARKETREGULATORY TRACK TBCBRAZIL SAORIUSA PHC279USA PHC404USA PHC949BRAZIL PHC949EUROPE Submit for registrationTarget registration date(subject to review by relevant authorities)MULTIPLE PRODUCTS FROM THE PREtec PIPELINE2021FUNDEDNOT FUNDED202218Plant
162、Health Care plcENVIRONMENTAL MATTERS/SUSTAINABILITYPlant Health Care is committed to protecting the environment in areas where we conduct our business.This requires the Group to be fully compliant with a range of national,regional and international guidelines on safety,EMC emissions and energy effic
163、iency.Our core proprietary products are classified by the US Environmental Protection Agency as non-toxic and presenting zero residues in the crop.Both Harpin and PREtecrequireverylittleenergyinputtobecreatedthoughfermentation,andverysmallquantitiesarerequiredtoachievenotableyieldincreases.Moderncro
164、pcultivationrequiresa significant amount of energy during the application of fertilisers,pesticides,and water.Plant Health Cares products enable significant reductions in carbon intensity of crops.AGRICULTURAL INPUTSAgricultural inputs are the focus of increasing concern around the world.While often
165、 critical for ensuring food security and high harvest yields,conventional inputs may be energy-intensive and hazardous to handle;they may leave damaging residues in harvested crops and the environment;and they may result in long term depletion of soils and the net release of greenhouse gases.This ha
166、s led to increasingly tight restrictions on the use of conventional inputs,as regulations are tightened and use patterns are restricted.For example,the European Unions Farm to Fork framework sets out a target to reduce chemical pesticide usage by 50%by 2030,encouraging the use of Integrated Pest Man
167、agement.Specifically,the EU aims to facilitate market entry by biological products;similar initiatives are already in place in the USA and some other countries,including Brazil.BIOLOGICALS Biologicals are inputs that are based on living systems or derived from plants or copied or inspired by natural
168、ly occurring materials.They are not all entirely harmless and benign but,compared with chemical pesticides,they tend to be less harmful,less persistent,andlessdamagingtotheenvironment.Consequently,biologicalsare subject to significantly less demanding,expensive and time-consuming registration proced
169、ures.Biologicals are increasingly used in organic farming and in export fruit and vegetable production,where consumer pressure for provenance is particularly high.However,organic farming accounts for less than 5%of global food production.Many biologicals are more expensive and may be less practical
170、to use by mainstream farmers.As a result,the adoption of biologicals in conventional agriculture has been limited.PHC:A LEADER IN BIOLOGICALSPlant Health Care has been committed to biologicals from the beginning,with a particular focus on developing products that can be used across mainstream agricu
171、lture in many crops and regions.The Companys technology seeks to enable the plants themselves to manage their environmental challenges.We have been able to stabilise small peptide molecules so the finished products have a long shelf life,the active ingredient will last longer in the farmers tank mix
172、,(we have not conducted studies to support the claims)yet will biodegrade rapidly in the environment leaving no residues.Our peptides do not have demonstrable toxicity in mammalian and nontargetedorganisms.Basedonthesequenceanalysisandsearch through the data base our peptides do not elicit any aller
173、genicity reaction to human and other organisms.Our fermentation-based production is environmentally friendly.Most ingredients used in the production are food grade material.There is zero discharge during and after the production run except for the evaporation of water during the dry formulation.BENE
174、FITSMinimising harmful impacts through sustainable manufacturing and safe handling are core principles for us.Moreover,once applied in commercial agricultural systems,our products have the potential to deliver massive benefits at the global environmental scale.Increasingyieldsforgrowersmeanlesslandi
175、srequiredforagriculture.Treated crops grow stronger without additional fertiliser,tendtorequirelessfungicidetocontroldiseases,andsurvive stressful events like drought that might otherwise lead to the loss of harvest.Biomass increases with the yield,and roots tend to grow“deeper and steeper”after tre
176、atment.This means more straw and more root material left in the soil,helping to retain soil structure and associated biodiversity,locking in carbon.SUSTAINABLE AGRICULTUREFarming is one of the most impactful global activities in terms of energy inputs,net greenhouse gas emissions and environmental i
177、mpact.With proper management,agriculture could deliver environmentalimprovementandcarbonsequestration.Lowerinputs,higher yields,improved soil health and avoiding losses in the food chain are the key driving factors.Plant Health Care has deployed cutting edge science over many years to develop a pipe
178、line of new inputs to provide practical and economic benefits for sustainable agriculture around the world.AT THE HEART OF SUSTAINABLEAGRICULTURE19Annual report and accounts 2020STRATEGIC REPORTCONTINUED CONTROL OF EXPENSES AND REDUCED WORKING CAPITALFINANCIAL SUMMARYJeffrey Hovey,Chief Financial Of
179、ficerA summary of the financial results for the year ended 31 December 2020 with comparatives for theprevious financial year is set out below:2020$0002019$000Revenue6,6116,436Gross profit3,6833,60256%56%Operating loss(3,568)(4,127)Finance income(net)264285Net loss for the year before tax(3,304)(3,84
180、2)Adjusted LBITDA(3,304)(3,814)Cashequivalentsandinvestments4,1492,420REVENUESRevenues in 2020 increased by 3%to$6.6 million(2019:$6.4 million).On a constant currency basis revenue increased 10%or$0.6 million driven by strong growth in the sugar cane and citrus markets in Brazil and Spain,respective
181、ly.The gross margin was steady at 56%(2019:56%)despite a cost increase in Harpin due to the US tariffs with China.The Group was able to maintain its margin versus 2019 levels due to increased Harpin sales in several regions.The Group has three separate reporting segments as set out below.AMERICASThi
182、s segment includes activities in both North and South America but is exclusive of Mexico.External revenue in the Americas segment increased 2%to$2.2million(2019:$2.1million).Theincreaseinrevenuewasprimarily due to further expansion into the specialty crop market through our partner Wilbur-Ellis.Reve
183、nue in the Americas is predominantly from Harpin sales.MEXICOA significant portion of the Groups revenue comes from Mexico.Revenue from the Mexican segment decreased 3%(increase of 7%in constant currency)to$3.2 million(2019:$3.3 million).This was due to reduced domestic demand for fruits and vegetab
184、les and the devaluation of the Peso as a result of the Covid-19 pandemic.Revenue in Mexico includes sales of Harpin,Myconate and third-party products.REST OF WORLDExternal revenue in the Rest of World segment increased 24%(22%in constant currency)to$1.2 million(2019:$1.0 million).The increase was pr
185、imarily due to a sales increase of 33%(30%in constant currency)in Spain due to further growth into the citrus market andexpansionintoChile.RevenueintheRestofWorldsegmentispredominantlyfromHarpin and nominal Myconate sales.The Groups revenue,gross margin and LBITDA is weighted towards the second half
186、 of the financial year.GROSS MARGINGross margin remained steady at 56%(2019:56%).The Group experienced a cost increase in Harpin due to the US tariffs with China but was able to maintain its margin versus 2019 levels due toincreasedHarpinsalesinseveralregions.OPERATING EXPENSESThe Group has maintain
187、ed strict control of cash operating expenses,which decreased to$7.3 million(2019:$7.4 million).The main contributors were reduced sales and marketing spend at$2.9million(2019:$3.2million)offsetbyincreasedspendinnewtechnologyof$2.3million(2019:$2.1million).Unallocated corporate expenses decreased$0.1
188、 million to$0.2million(2019:$0.3million).Thedecreasewasattributabletothe increase in the value of Sterling loans from our UK subsidiary due to the appreciation of the Pound.AdjustedLBITDA*,anonGAAPmeasure,decreasedby$0.5millionto$3.3 million primarily due to improved gross profit of$0.1 million and
189、reduced spend in Sales and Marketing$0.3 million offset by increased spend in New Technology$0.2 million.The LBITDA in 2020 also improved due to the receipt of$0.3 million from the Paycheck Protection Program in the USA and a Covid loan of$0.1millionfromtheSpanishgovernment.*AdjustedLBITDA:lossbefor
190、einterest,tax,depreciation,amortisation,share-based payments and intercompany foreign exchange.20Plant Health Care plc2020$0002019$000Operating loss(3,568)(4,127)Depreciation/amortisation639778Share-based payment expense596318Intercompany foreign exchange gains(971)(783)Adjusted LBITDA(3,304)(3,814)
191、BALANCE SHEETAt31December2020and2019,investments,cashandcashequivalentswere$4.1 million and$2.4 million respectively.Cash remains a primary focus for the Group.Cash used in operations decreased to$2.5million(2019:$4.4million)primarilyduetoimprovedworkingcapital through increased collections,increase
192、d accounts payable and proceeds of$0.3 million from the Paycheck Protection Program intheUnitedStatesandaCovid19loanof$0.1millionfromtheSpanish government.Inventory($3.6 million),accounts receivable($3.1 million),and payables($1.3 million)were comparable to the prior year($3.0 million,$3.6 million a
193、nd$0.8 million,respectively)with the exception of large trade payable balance with our manufacturer of Harpin (2020:$0.5 million;2019:nil).Translation of the results of foreign subsidiaries for inclusion within the consolidated Group results resulted in an exchange loss of$1.2 million recorded withi
194、n other comprehensive income and foreign exchange reserves(2019:loss of$0.8 million).CASH FLOW AND LIQUIDITYNet cash used in operations was$2.5 million(2019:$4.4 million).The decrease is due to reduced losses and improvement in working capital through increased collections and payables management.Ne
195、tcashusedbyinvestingwas$1.2millionin2020(2019:$0.1million).The Group holds surplus cash in several bond and money market funds.The movement in these funds was used to further invest in the New Technology business and fund the Commercial business.Net cash provided by financing activities was$4.2 mill
196、ion(2019:$2.6million).TheincreasewasprimarilyduetotheMarch2020equityraiseof$4.4million.GOING CONCERNIn assessing whether the going concern basis is appropriate for preparing the 2020 annual report,the Directors have utilised the Groups detailed forecasts,which take into account its current andexpect
197、edbusinessactivities,itscashandcashequivalentsbalance and investments of$4.1 million.The principal risks and uncertainties the Group faces and other factors impacting the Groups future performance were considered.The directors confirm that they have a reasonable expectation that the group willhavead
198、equateresourcestocontinueinoperationalexistencefor the next 12 months from approval of these financial statements and accordingly these financial statements are prepared on a going concern basis,with no material uncertainty over going concern.Analysis of the going concern position is detailed in the
199、 Directors report and note 2 to the financial statements.JEFFREY HOVEYChief Financial Officer22 April 202121Annual report and accounts 2020STRATEGIC REPORTHOW WE MEASURE SUCCESSKEY PERFORMANCE INDICATORS(“KPIs”)The Group uses a range of performance measures to monitor and manage the business effecti
200、vely.These are both financial and non-financial.Themost significant relate to Group financial performance and to the Groups progress in driving the two pillars of its strategy.The KPIs for financial performance of the Commercial area and for the Group as a whole include revenue,gross profit and marg
201、in,operating loss and LBITDA.These KPIsindicatethevolumeofworktheGrouphas undertaken,as well as the valuation with which this work has been delivered.The KPIs for financial performance for theyearended31December2020,withcomparativesfortheyearended31December2019,aresetoutontheright.REVENUE($m)$6.6m6.
202、68.16.420182019 2020GROSS PROFIT($m)$3.7m3.75.33.620182019 2020WHY WE MEASURE ITThe value of goods recognised as income inaccordancewithIFRS15“RevenuefromContracts with Customers”.WHY IT IS IMPORTANTRevenue growth shows how the business isperformingyearoveryear.WHAT IT MEANSWhen viewed with the gros
203、s profit and operating expenses,revenue gives an indication if the Group is close to achieving a breakeven position.LINKS TO STRATEGY12345WHY WE MEASURE ITTo analyse the profitability and financial performance of each segment and the Group as a whole.WHY IT IS IMPORTANTA strong gross profit indicate
204、s the efficiency of the Group in producing its goods.WHAT IT MEANSThe Groups gross profit increased from 2019 levels.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 a
205、long the paths to commercial launch of products.The Board continues to monitor the progress of its research and development activities and expenditures.As each research project advances,specific progress is reported totheBoardandcostsagainstbudgetaremonitored.We anticipate refining the KPIs for R&D
206、as each project develops.NON-FINANCIALIn addition,an important KPI is the movement in revenue and gross margin achieved from the sale of ourproprietaryproducts;Harpin and Myconate.REVENUE($000)5555+1515+3030+M+M$2,165 Americas(2019:$2,109)$613 Mexico(2019:$689)$1,206 Rest of World(2019:$972)FINANCIA
207、LPROPRIETARY PRODUCTS22Plant Health Care plcGROSS PROFIT MARGIN(%)55.7%64.956.055.720182019 2020OPERATING LOSS($m)$(3.6)m(3.6)(4.1)(8.0)20182019 2020LBITDA($m)$(3.3)mWHY WE MEASURE ITTo show the efficiency with which the Group can sell its products.WHY IT IS IMPORTANTA high gross profit margin leads
208、 to a strong bottom line.WHAT IT MEANSThe Groups gross profit margin remained steady from the prior year.LINKS TO STRATEGY12345WHY WE MEASURE ITThe result after deducting operating expenses from the gross profit.WHY IT IS IMPORTANTAchieving an operating profit is a critical goal of the Group as it w
209、ould significantly reduce the key risk of running out of cash before realising the Groups long-term vision.WHAT IT MEANSA reduced operating loss from the previous year indicates that the Group is making progress towards its long-term goals.LINKS TO STRATEGY145WHY WE MEASURE ITThe result after deduct
210、ing intercompany Forex gains and losses,shared-based payments,depreciation,amortisation,interestandtaxfromtheGroupsrevenue.WHY IT IS IMPORTANTReducing LBITDA is a core short-term andlongtermgoaloftheGroup.ImprovingLBITDA reduces the risk of the Group running out of cash before the Group hasrealisedi
211、tsstrategicgoals.WHAT IT MEANSThe Groups LBITDA improved in 2020 which brought the Group closer to cash flow neutral.LINKS TO STRATEGY1234FINANCIALPROPRIETARY PRODUCTSGROSS MARGIN($000)5656+1515+2929+M+M$1,512 Americas(2019:$1,544)$418 Mexico(2019:$500)$792 Rest of World(2019:$635)70%Americas(2019:7
212、3%)68%Mexico(2019:73%)66%Rest of World(2019:65%)GROSS MARGIN PERCENTAGE(%)706866(3.3)(3.5)(5.2)20182019 202023Annual report and accounts 2020STRATEGIC REPORTSECTION 172 STATEMENTSection 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and othe
213、r matters in their decision making.The 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,when making decisions.Acting in good faith and fairly between mem
214、bers,the Directors consider what is most 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 re
215、views our principal stakeholders and how weengagewiththem.TheGroupviewsitsinvestors,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 b
216、y direct engagement with stakeholders themselves.Therelevanceofeachstakeholdergroupmayincreaseordecreasedependingonthematterorissueinquestion,sotheBoardseeksto consider the needs and priorities of each stakeholder group duringitsdiscussionsandaspartofitsdecisionmaking.The following table shows how t
217、he Group engages with itsstakeholdersandtheoutcomes:StakeholderType of engagementINVESTORS Investor website.Proactive investor relations.Periodic investor calls or meetings.Webinars to update investors on the progressoftheGroup.Stock Exchange announcements andpressreleases.CUSTOMERS The Board focuse
218、s on the needs of all customers with emphasis on assisting thecustomerwithsalesofourproducts.Direct engagement with customers byseveralBoardmembers.Review of strategy and performance monitoring throughout the year.EMPLOYEES Participation in employee activities and global staff meetings is encouraged
219、.Monthly meetings to encourage the sharing of ideas and views.All-employee bonus and options schemes.Due to Covid-19,the ability to work remotely wasputinplacethroughoutmostof2020.Covid-19 safeguards were implemented during March 2020 and maintained throughout the pandemic.SUPPLIERS Supply chain ris
220、k management.Regular engagement with our suppliers.Continuous process improvements.The risks associated with delays and constraints to the supply chain as a result oftheCovid19pandemichadthepotentialto have a material impact on the Group.24Plant Health Care plcThe Board has overseen the implementati
221、on 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 whenmakingdecisions.Asrequired,theCompanySecretarywillprovide support to the Board to
222、help ensure that sufficient considerationisgiventostakeholderissues.RELATIONS WITH SHAREHOLDERSThe Board encourages the engagement of our shareholders andwiththecapitalmarketsmoregenerally.OurChairmantakesoverallresponsibilityforensuringthattheviewsofourshareholders are communicated to the Board and
223、 that our Directors are made aware of major shareholders 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 Chief Executive Officer,Chief Operating Officer and Chief Financial Officer;
224、reports are 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 investors and analysts can contact our ChiefExecutiveOfficerorChiefFinancialOf
225、ficeratanytimeoraccess information on our corporate website.The Board believes that appropriate steps have been taken during the year so that allmembersoftheBoard,andinparticulartheNonexecutiveDirectors,have an understanding of the views of majorshareholders.Outcomes Investors opinions are taken int
226、o account when determining strategy,operational performance and remuneration policies.Technical support provided to multiple customers through fieldtrialsupportoreducatingthecustomeronproperapplicationofourproducts.Customers viewpoints are taken into account as part of the decision-making process.As
227、sist customers with regulatory and registration issues bycountry,inparticularwithsugarcaneinBrazilandcornintheUSA.Improvements were made to the remuneration policy mainly through the issuance of new bonus option schemes.Board encouraged senior management to proactively manage career development for
228、all employees.The senior management team hassemiannualmeetingswithitsstafftoassessemployeesinterest in expanding their current duties and responsibilities.Expanded HS&E policies to include enhanced safety training fortheSeattlelaboratory,sensitivitytraininggloballyandwarehousetraining.Our employees
229、have been minimally affected by Covid-19 due totheabilitytoworkremotelyandthesafeguardsestablished.Continued improvement of long-term agreements with manufacturers to ensure that product will still be available totheGroup.Decreased unit costs and simplified the packaging process byreducingthenumbero
230、fpackagers.Negotiatedlongtermmaterialsagreementswithfavourableterms.The Group minimised supply chain disruptions due to Covid-19,byorderingproductaheadoftypicalneedsandpriortothepandemicbeing widespread.25Annual report and accounts 2020STRATEGIC REPORTEFFECTIVE MANAGEMENT OF PRINCIPAL RISKS AND UNCE
231、RTAINTIESRISKS AND UNCERTAINTIESRISK MANAGEMENT FRAMEWORKIdentify riskAssess riskMitigate riskUpdate risk registerReview and evaluate riskBOARD OF DIRECTORSDivisional and functionalteamsEXECUTIVE COMMITTEEREMUNERATION COMMITTEEAUDIT COMMITTEEThe Board is responsible for the systems of risk managemen
232、t 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 effectiveness of these intern
233、al 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 opportunities presented to the
234、 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 condition,results of
235、operations and future prospects.We manage and mitigate these risks by executing the strategy described above.DescriptionMitigationCAPITAL MARKETS,FINANCIAL AND LIQUIDITY RISK We have a history of losses since inception,and anticipate continuing to incur losses in the future,and may not achieve or ma
236、intain profitability.The Group believes that the strategic plans that have been established will lead to profitability in the coming years.Wedonotexpecttorequireadditionalfinancinginthefuture.However,ashortfallinachievingoursalesorworkingcapitaltargetscouldexhaustourcashreserves.ThismaycompeltheGrou
237、ptoseekadditionalfinancing.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 depend on delivering against our stated objectives.If we are un
238、able tomeetmarketexpectations,oursharepricemaydecrease,andwemayloseshareholders.Sales in any one period will be subject to seasonal factors such as weather,timing of registrations and third-party relations.As a result,Group sales may not follow a strictly linear trend which makes sales forecasting c
239、hallenging.These risks are mitigated bybeingprudentinthemanagement of the Groups cash,controlling costs andmaintainingstronginvestor support.DISRUPTION TO THE GLOBAL SUPPLY CHAIN The supply chain for the Group is global.Because of this,it is subject to disruption from political,social,economic facto
240、rs and the impacts of the Covid-19 pandemic.This risk is mitigated by the Groups ability to use multiple suppliers in the European and Southeast Asian markets.26Plant Health Care plcDescriptionMitigationCOMMERCIALISATION RISK We are subject to risks relating to product concentration due to the fact
241、that we derive substantially all ofourrevenuesfromourHarpin 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.Covid-19 could adver
242、sely affect the Groups ability to collect from its customers and could have a negative impact on the Groups ability to generate revenue.Our PREtec product launches depend on evaluation and distribution partners converting their declared interest into formal commercial transactions.These risks are mi
243、tigated by continuing to promote our products and perform regular reviews of our commercial business plans,continued product development and maintaining close relationships with our key distributors.TECHNOLOGY RISK Our PREtec peptide development depends on demonstrating that the products can perform
244、 in the fieldagainsttargetedvaluepropositions.Trialscanbeinfluencedbyweatherandotherfactors,whichcanresultinthetrialshavingtoberepeated;thiscanleadtodelaysofayearinproductlaunches.We are developing new production methods for the commercial manufacture of PREtec peptides.We may be unsuccessful in ach
245、ieving 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 production.Whileanumberofpatentshavebeenfiledtodate,wemaybeunabletosecureadequateprotectionfortheintellectual property c
246、overing our new technology and product candidates,or develop and commercialise these product candidates without infringing the intellectual property rights of third parties.These risks are mitigated by reviewing and refining the strategy for commercialising our new technology to include both technol
247、ogy licensing and direct sales to distributors.REGULATORY AND LEGAL RISK Ifweareunabletoobtainregulatoryapprovals,orcomplywithongoingandchangingregulatoryrequirements,itcoulddelayorpreventsalesofourcommercialproductsorimpedethedevelopmentofpotentialproducts.If we use PREtec in trait development,our
248、technologies and product candidates will face more stringent regulatory regimes.If we are unable to comply with regulations applicable to our facilities and procedures and those of our third-party manufacturers,our research and development or manufacturing activities could be delayed,limited or prev
249、ented.These risks are mitigated byconductingregularinternalreviewstoensureourcompliancewithregulatoryrequirements.PERSONNEL AND RESOURCES Our future growth and ability to compete depend on retaining our key personnel and recruiting additional qualifiedpersonnel.The success of the Group depends on ob
250、taining 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 objectives.These risks are mitigated by keeping employees engaged inthestrategyoftheGroupandthe establishing
251、 of long-term incentives.Annual reviews of the remuneration structure are carried out to retain and reward outstanding performance.FINANCIAL INSTRUMENTSThe Group uses various financial instruments,including cash,short-term investments of investment grade notes and bonds,and items such as trade recei
252、vables and trade payables that arise directly from its operations.Information on the risks associated with the Groups involvement in financial instruments is given in note 20 to the financial statements.On behalf of the BoardDR CHRISTOPHER RICHARDSChief Executive Officer22 April 202127Annual report
253、and accounts 2020CORPORATE GOVERNANCEBOARD OF DIRECTORSSTRONG AND EXPERIENCED LEADERSHIPCHIEF EXECUTIVE OFFICERAppointed August 2012Dr.Christopher Richards joined the Company as Non-executive Chairman inAugust 2012.He became Executive Chairman in April 2015 then Interim ChiefExecutive Officer in Nov
254、ember 2018.Chrisspent 20 years at Syngenta and its predecessor companies in various strategic management positions in South America,Europe and Asia.He then served as CEO of Arysta LifeScience from 2004 until 2010,leading Arysta LifeSciences transformation into a global agrochemical company with sale
255、s above$1.6 billion.He was then Chairman of Arysta LifeScience until 2015.He serves on the Board of Directors of Origin Enterprises plc,a service provider to farmers for food production solutions,and is Chairman ofNanoco Group plc,a nano-materials technology company carrying out research,development
256、 and commercialisation ofproducts based on heavy-metal free quantum dots.Chris farms in Devon,UK.DR CHRISTOPHER G J RICHARDSNON-EXECUTIVE CHAIRMANAppointed September 2013Richard Webb joined the Company in September 2013 as a Non-executive Director.In January 2015,he was appointed as Executive Direct
257、or,responsible for leading the New Technology strategy and licensing.In January 2019 he became a Non-executive again,taking over as Chairman in October 2019.Richard held various positions at ICI plc,including,early in his career,managing laboratory,field and commercial development programmes for its
258、 public health pesticide business.Later he held corporate strategy roles at the time of ICIs demerger and restructuring.Thereafter he worked as aconsultant,mostly with life sciences business.It was in this capacity that he was originally engaged by the Company in 2012 to work on the development of i
259、ts new business strategy.His doctorate,in pest biology,is from the London School of Hygiene&Tropical Medicine.DR RICHARD H WEBBCHIEF FINANCIAL OFFICERAppointed November 2019Jeffrey Hovey joined the Company as ChiefFinancial Officer in September 2013.He became an Executive Director in November 2019.H
260、e drove re-structuring and cost reduction for the Company in 2014.He has over 25 years financial management experience and is a CPA with IFRS and US GAAP experience.Jeffrey Hovey has held numerous senior financial and accounting roles in private and publicly listed retail,life sciences and technolog
261、y companies.While with a regional office supply company,he led the accounting andfinancial due diligence effort which ultimately led to the sale of the company toan international office supply company.MR JEFFREY HOVEYAR28Plant Health Care plcCHIEF OPERATING OFFICERAppointed November 2019Jeffrey Twee
262、dy joined the Company as Commercial Head,Americas in October 2017 and has held the position of Chief Operating Officer since 2018.He became anExecutive Director in November 2019.Heleads all Commercial activities for the Company globally as well as the PREtec product launches for the New Technology s
263、egment of the business.Jeffrey has over30 years of experience in sales and business development in the US and internationally.He has held senior Commercial North America and global roles in Syngenta,Arysta LifeScience and Horizon Ag.MR JEFFREY TWEEDYNON-EXECUTIVE DIRECTORAppointed November 2019Guy v
264、an Zwanenberg joined the Board in November 2019 as a Non-executive Director.He is the Chair of the Audit Committee,a member of the Remuneration Committee and the Senior Independent Director.Guyhas more than 40 years experience inindustry and practice.He qualified as a Chartered Accountant with Grant
265、 Thornton and then spent three years working with James Gulliver.Guy subsequently moved to become UK Finance Director of an American computer accessory company which was taken public in 1989.In 1991,he established his own interim financial management business and has since been involved inanumber of
266、 SME businesses providing strategic and financial help.Guy joined Gamingking plc in 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 which time he helped acquire several businesses and to
267、 reverse the company into Sceptre Leisure plc,which was then delisted.He joined Quixant plc as a Non-Executive in March 2013 as part of the float team.In 2015 he joined as a Non-Executive at Coms plc and was part of the team which transformed the business into the SaaS business Smartspace plc and be
268、came its Chairman in July 2018.Guy is both a Fellow of The Institute of Chartered Accountants in England and Wales and aChartered Director.MR GUY VAN ZWANENBERGNON-EXECUTIVE DIRECTORAppointed April 2015William Lewis joined the Company as a Non-executive Director in April 2015.He also currently serve
269、s as Chairman of the Remuneration Committee and as a member of the Audit Committee.Since June 2014,William Lewis has served as President andCEO of Summit Agro USA,LLC,a joint venture agrochemicals business between Sumitomo Corporation and ISK Biosciences.He previously held senior roles within Arysta
270、 LifeScience,Syngenta Crop Protection and Zeneca/ICI.William Lewis has also been an owner/operator of two John Deere dealerships in GA where he improved the overall operations and value of the business,which led to the successful saleof the businesses.MR WILLIAM M LEWISAARRKEY TO COMMITTEE MEMBERSHI
271、PAAuditRRemunerationChairman29Annual report and accounts 2020CORPORATE GOVERNANCECORPORATE GOVERNANCE REPORTINTRODUCTIONPlant Health Care plc(the“Company”)is committed to maintaining the highest standards of corporate governance throughout its operations and to ensuring that all of its practices are
272、 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 value.Therefore,and in compliance with the upd
273、ated AIM Rules for Companies,the Company 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 QCA Codes recommendations interms of disclo
274、sures 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 shareholders2.Seek to understand and meet shareholder needs and expectations3.Take into account wider stakeholder and
275、 social responsibilities and their implications for long-term success4.Embed effective risk management,considering both opportunities and threats,throughout the organisation5.Maintain the board as a well-functioning,balanced team led bythe chair6.Ensure that between them the directors have the neces
276、sary up-to-date experience,skills and capabilities7.Evaluate board performance based on clear and relevant objectives,seeking continuous improvement8.Promote a corporate culture that is based on ethical values andbehaviours9.Maintain governance structures and processes that are fit forpurpose and su
277、pport good decision-making by the board10.Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevantstakeholdersDisclosures recommended by the QCA Code to be included on the Companys website,and not in its Annual Report,being principles 2
278、,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 remaining seven principles are described below.In asse
279、ssing 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 complex scientific/specialist nature of certain of its activ
280、ities.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 a regular basis.Board meetings have appropriately rob
281、ust agendas and are held face to face in the US or UK or remotely based on Covid restrictions 5 times a year,with ad hoc meetings as and when the business needs demand.The US is the main centre of activity and management of the Company.EachBoard meeting also includes involvement of the key executive
282、 leadership not on the Board.Messrs Lewis and van Zwanenberg aresatisfied that the current Board has the right mix of skills thatare relevant to the Companys current position and stage of development.They are also satisfied that they present effective challenges to the Executive Directors and manage
283、ment team.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 Company;the Board and the committees have the appropriate balance of skills,experi
284、ence,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 m
285、aintaining an appropriate relationship with the Companys auditors;there is a dialogue with shareholders based on the mutual understanding of objectives;and all aspects of the Company are run in a robust and responsible way.The Companys overall strategic objective is to be a leading provider of propr
286、ietary biological products.The Companys strategy and business model and amendments thereto,are developed by the Executive Committee and approved by the Board.The Executive Committee,led by the CEO,is responsible for implementing the strategy and managing the business at an operational level.Acompreh
287、ensive budgeting process is completed once a year andisreviewed and approved by the Board.The Companys results,compared with the budget,are reported to the Board at least fivetimes per year.The full strategy and business operations of theCompany are set out in the Strategic report section of this An
288、nual Report on pages 2 to 27.The Companys business is subject to a number of potential risksand uncertainties.The occurrence of any of these risks may materially and adversely affect the Companys business,financial condition,results of operations and future prospects.The Company manages and mitigate
289、s these risks by executing its strategy and operational plans as described above.The Board is responsible for the systems 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 n
290、ot absolute assurance against material misstatement or loss.Through the activities of the Audit Committee,the effectiveness of these internal controls is reviewed annually.The Company maintains appropriate insurance cover in respect ofactions taken against the Directors because of their roles,aswell
291、 as against material loss or claims against the Company.Theinsured values and type of cover are comprehensively reviewed ona periodic basis.30Plant Health Care plcA summary of the principal risks and uncertainties facing the Company are set out on pages 26 and 27 of this Annual Report.TheExecutive C
292、ommittee meets at least twice annually to review the Companys risk register,along with potential causes and impact,controls and actions to minimise the probability of those risks materialising,and consider new risks and opportunities presented to the Company,making recommendations to the Board as ap
293、propriate at least once annually.BOARD OF DIRECTORSThe Board of directors is responsible for the proper management of the Company by formulating,reviewing and approving the Companys strategy,budgets,and corporate actions.In order to achieve its objectives,the Board adopts the ten principles of the Q
294、CA Code.Through successfully implementing these principles,the Company believes it is able to deliver long-term growth for shareholders and maintain a flexible,efficient and effective management framework within an entrepreneurial environment.It is important that the Board itself contains the right
295、mix of skills and experience in order to deliver the strategy of the Company.Assuch,the Board is currently comprised of:Dr Richard Webb,Non-executive Chairman Dr Christopher G J Richards,Executive Director and CEO Mr Jeffrey Hovey,Executive Director and CFO Mr Jeffrey Tweedy,Executive Director and C
296、OO Mr Guy van Zwanenberg,Senior Independent Director;and Mr William M.Lewis,an independent Non-executive Director.The backgrounds and relevant experience of these Directors is set out on the website.The Company Secretary assists the Chairman and Committee Chairmen in preparing for and running effect
297、ive Board meetings and Committee meetings,including the timely dissemination of appropriate information prior to meetings and minutes following the meetings.The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment.Each Director se
298、rves on the Board from appointment until the next annual general meeting at which he or she stands for election.Thereafter he or she stands for re-election in accordance with the Companys Articles of Association which is no less than once every three years.COMMITTEESIn compliance with UK best practi
299、ce,the Board has established the following committees.AUDIT COMMITTEEThe purpose of the Audit Committee is to monitor the integrity ofthe financial statements of the Company.Some of the Audit Committees duties include:reviewing the Groups accounting policies and reports produced by internal and exte
300、rnal audit functions;considering whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements,taking into account the views of the external auditor;reporting its views to the Board of Directors if it is not satisfied with any aspect of the proposed
301、financial reporting by the Company;reviewing the adequacy and effectiveness of the Companys internal financial controls and internal control;reviewing the adequacy and effectiveness of the Companys anti-money laundering systems and controls for the prevention of bribery and receive reports on non-co
302、mpliance;and overseeing the appointment of and the relationship with the external auditor.The Audit Committee has two members,each of whom is an independent Non-executive Director and at least one member who has recent and relevant financial experience.The current members of the committee are Guy va
303、n Zwanenberg as the Chairman and William Lewis.REMUNERATION COMMITTEEThe purpose of the Remuneration Committee is to determine and agree with the Board regarding the framework or broad policy for the remuneration of the Companys chairman and the Executive Directors as well as the composition of the
304、Board itself.Some of the Remuneration Committees duties include:reviewing the pay and employment conditions across the Company,including the Executives on the Board approving targets and performance related pay schemes operated by the Company and all share incentive plans and pension arrangements;re
305、gularly reviewing the structure,size,and composition(including the skills,knowledge,experience and diversity)oftheBoard and make recommendations to the Board with regard to any changes,succession planning and vacancies;and identifying suitable candidates from a wide range of backgrounds to be consid
306、ered for positions on the Board.The Remuneration Committee has two members,each of whom is an independent Non-executive Director.The current members of the committee are William Lewis as the Chairman and Guy van Zwanenberg.In light of the current composition of the executive leadership and the Board
307、,the Board as a whole has retained overall responsibility for the review of the overall risk management processes and principles.The Board as a whole constitutes the Nomination Committee and will appoint a subcommittee if considered appropriate;the Board also determines remuneration for the Non-exec
308、utive Directors.The Board made the decision not to form a separate HSE committee.Matters if HSE are treated with the up most importance and considered by the Board as a whole.HSE is a standing agenda item considered at every scheduled Board meeting.EXECUTIVE COMMITTEEThe Companys Executive Committee
309、 is the main decision-making body of the Company and ensures that key decisions are made in atimely manner with the best information available.The Executive Committee meets on a monthly basis and has six members:Christopher Richards chairs the Executive Committee and is joinedby Zhongmin Wei(Chief S
310、cience Officer),Jeffrey Tweedy(ChiefOperating Officer),Jeffrey Hovey(Chief Financial Officer)and Mark Turner(Director,Technology Licensing).31Annual report and accounts 2020CORPORATE GOVERNANCECORPORATE GOVERNANCE REPORT CONTINUEDBOARD COMPOSITIONThe Companys Board is currently comprised of 3 Non-ex
311、ecutive Directors and 3 Executive Directors.The Chairman is non-independent.Directors biographies are set out on pages 28 and 29.The Board is responsible to its shareholders for the proper management of the Company and meets at least five times a year to set the overall direction and strategy of the
312、 Company,to review scientific,commercial,operational and financial performance and to advise on management appointments.All key operational and investment decisions are subject to Board approval.A summary of Board and Committee meetings held in the year ended 31 December 2020,andDirectors attendance
313、 records,is set out on page 38.The Board considers itself to be sufficiently independent.The QCA Code suggests that a board should have at least two independent Non-executive Directors.Two of the Non-executive Directors whocurrently sit on the Board of the Company are regarded as independent under t
314、he QCA Codes guidance for determining such independence.Non-executive Directors receive their fees in the form of a basic cash fee.Concerns relating to the executive management of the Group or the performance of the Directors can be raised in confidence by contacting the Senior Independent Director,
315、Guy van Zwanenberg,through the Company Secretary.BOARD EXPERIENCEThe Board considers that all of the Non-executive Directors are of sufficient competence and calibre to add strength and objectivity to its activities,and bring considerable experience in scientific,commercial,operational and financial
316、 development of products and companies.The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills tosupport the ongoing development of the Company.The Chairman,in conjunction with the Company Secretary,ensuresthat the Directors knowledge
317、is kept up to date on key issues and developments pertaining to the Company,its operational environment and to the Directors responsibilities as members of the Board.During the course of the year,Directors receive updates from the Company Secretary and various external advisers on a number of corpor
318、ate governance matters.Furthermore,the key commercial executives and the New Technology team regularly present at Board meetings and attend dinners with Board members.Also the Board periodically visits the Research and Development centre in Seattle and are briefed by the team.In early 2020,the Board
319、 received a refresher from its Nomad onthe requirements of the UK market Abuse Regulations and disclosure requirements of the FCA.Directors service contracts or appointment letters make provision for a Director to seek personal advice in furtherance of his or her duties and responsibilities,normally
320、 via the Company Secretary.The Board seeks advice from its external advisers as needed in the ordinary course of business and for exceptional circumstances,including its Nominated Adviser and outside counsel in the UK and USA as well as globally.There is an agreed procedure for Directors to take ind
321、ependent professional advice,if necessary,at the Companys expense.This is in addition to the access which every Director has to the Company Secretary,who is charged by the Board with ensuring that Board procedures are followed.Directors service contracts or appointment letters make provision for a D
322、irector to seek personal advice in furtherance of his or her duties and responsibilities,normally via the Company Secretary.PERFORMANCE OF THE BOARDThe Board has a process for evaluation of its own performance,that of its committees and individual Directors,including the Chairman.This process is con
323、ducted on a regular basis and last took place in January 2020,with no substantive issues arising.Evaluation criteria include Board Composition,Strategy,Board Meetings,Training and Development,Governance,Risk,Company Secretary and Leadership.The Board may utilise the results of the evaluation process
324、 when considering the adequacy of the composition of the Board and for succession planning.CORPORATE CULTUREThe Board seeks to maintain the highest standards of integrity and ethics in the conduct of the Companys operations.These values are exhibited in the written policies and working practices ado
325、pted by all employees in the Company.An open culture is encouraged within the Company,with regular communications to staff regarding progress and staff feedback regularly sought.Employees are expected to behave and to execute the Companys strategy and objectives in an ethical,compliant manner as wel
326、l as to ask questions and raise concerns openly.The CEO and senior management team monitors the Companys cultural environment and seeks to address any concerns that may arise,escalating these to Board level asnecessary.GUY VAN ZWANENBERGSenior Independent Director22 April 202132Plant Health Care plc
327、AUDIT COMMITTEE REPORTThe Audit Committee is a formally constituted sub-committee of the Board.The Audit Committee comprises Guy van Zwanenberg as chairman and William Lewis.The Committee meets separately with the external auditors without management present.The Secretary to the Committee is the Com
328、pany Secretary.MAIN ACTIVITIES OF THE AUDIT COMMITTEEThe Audit Committee meets formally three times a year:in September,to review and consider the half year results announcement;in December,together with the external auditors,it considers and approves the nature and scope of the annual audit;and the
329、n in lateMarch or April it will receive reports from the external auditor on the conduct of their audit,and their review of the accounts,including accounting policies and areas of judgement,and their comments on risk management and control matters.The external auditor also present their fee proposal
330、s for the forthcoming annual audit at the December meeting.INDEPENDENCE OF EXTERNAL AUDITORBoth the Board and the external auditor have safeguards in place to avoid the possibility that the auditors objectivity and independence could be compromised.The policy in respect of services provided by exter
331、nal auditor is as follows:Audit related services-the external auditor is invited to provide services which,in their position as auditor they must or is bestplaced to undertake.This includes formalities relating to shareholders and other circulars or any other regulatory reports or work in respect of
332、 acquisitions or disposals.Tax consulting-in cases where they are best suited,we will use the external auditors tax advisers.However,in the current year and prior years,the Group has not used the auditors tax advisers for tax consultant services.General consulting-recognising the public concern over
333、 the issue of auditors independence,our policy is that the external auditor would not be used for general consulting work.INTERNAL MANAGEMENT ACCOUNTINGThe Audit Committee considered the performance of the internal accounting function and the resource requirements available taking into account the size and complexity of the Groups activities.Given the small size of the Board,the Board as a whole r
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