1. business and industrial
2. agriculture and forestry
3. crops and seed

PREPARATION
FOR GROWTH
Annual Report 2014
01
Our products enhance the effects of modern
crop protection programmes; they deliver
proven benefits not only to healthy crops
but also to those facing more challenging
growing conditions.
1
4
5
6
8
10
Key Events and Highlights
Our Product Brands
The Veritas® Story
Business overview
Chairman’s Statement
Strategic Report
Governance
14
15
16
19
21
22
Board of Directors
Advisors
Group Directors’ Report
Corporate Governance Statement
Statement of Directors’ Responsibilities
Directors’ Remuneration Report
Financial Statements
24Report of the Independent Auditors to the
Members of Plant Impact plc
25Group Statement of Comprehensive Income
26 Group Statement of Changes in Equity
27 Group Statement of Financial Position
28 Group Cash Flow Statement
29Notes to the Group Financial Statements
47 Company Balance Sheet
48 Notes to the Company Balance Sheet
Governance
Our robust research and development
programme gives growers access to wellformulated, technically superior products
that help plants perform better. We call it
“Science for a Growing Future”.
Strategic Review
Strategic Review
Plant Impact is a leader in plant
science innovation. We develop
and formulate products that
enhance crop capacity, enabling
growers to improve quality and
deliver consistently higher yields.
KEY EVENTS AND HIGHLIGHTS
FINANCIAL
Financial Statements
•Turnover doubled to £2.5m (2013*: £1.2m)
•Gross profit increased substantially to £1.8m (2013*: £0.8m)
•Gross margin increased from 67% to 71%
•Cash at 31 July 2014 was £0.5m (2013: £1.3m). Cash as at the
date of publication was £1.1m
•Entered into a £1.0m receivables financing facility with HSBC
•R&D investment significantly increased to £1.1m (2013*: £0.7m)
OPERATIONAL
•First year of commercial sales of Veritas® in Brazilian soy
•Long term commercial deal in Brazil with Bayer CropScience for Veritas®
•Strong sales of Ametros® in European apples
•Office opened in Sao Paulo, Brazil in January 2014
•Group’s second crop enhancement product for soy shown technical
promise; third and fourth products at early stage development
•New soy and wheat products to be commercially piloted by 2016
* Comparatives are for the twelve months ended 31 July 2013 (unaudited).
Plant Impact Annual Report 2014
Strategic Review
THE GLOBAL FOOD
CHALLENGE 2050
Agricultural food production must keep pace
with growing demand. It’s a complex challenge
that cannot be met by just farming more land.
9bn
World population is
predicted to reach
9 billion by 2050; 90%
of growth will occur in
the developing world.
60
%
Output of maize, rice
and wheat needs to
increase by 60%.
As a country’s GDP increases,
so does its population’s total
calorific intake.
As the developing world changes
its eating habits, demand for meat
protein expands. The world needs
more animal feed.
50
2 1
Additional yield is the answer.
New technologies are critical
to increasing yields.
%
Growing conditions are
increasingly volatile; 50%
of yield potential is lost to
environmental stress.
%
%
Over the past 20 years,
population has grown by 2% p/a;
global crop yields have expanded
only 1% each year
30
YRS
Meeting the next 30 years’ food
output requirement by farming
more land would require new
farms with surface area equivalent
to all of current American farmland.
03
HOW CROP ENHANCEMENT WORKS
Crop enhancement technology is essential to increase global agricultural yields
Alongside agrochemicals, fertilisers and advanced
seeds, Crop Enhancement is the ‘fourth pillar’ of
modern farming inputs. CE technologies, which include
manufactured chemicals, naturally-occurring plant
extracts, bio-regulators, and certain applications of
micro- and macro- nutrients, all support and enhance
the capacity of crops to produce high quality yield
in a variety of growing and climatic conditions.
CE technologies are typically applied to crops as
liquid foliar sprays or pre-plant seed coatings.
STIMULATE & REINFORCE PLANT RESILIENCE
Crop Enhancement products are used in farming as a
complement to other crop inputs such as agrochemicals
and advanced seeds. CE products from Plant Impact
deliver better yields in agricultural crops like soy and
wheat, higher quality produce in field vegetables like
leafy salads and carrots, and reduced post-harvest
losses in fruit crops such as apples. These benefits
represent a meaningful profit opportunity for Plant
Impact’s ultimate customer: the modern grower.
SPEED TO MARKET
A new Crop Enhancement product typically involves a
3-5 year development cycle, from initial concept through
to a pilot commercial launch with growers. Development
involves technical screening, product formulation,
laboratory testing, glasshouse evaluation and in-field
efficacy trials and demonstrations. In contrast to a new
agrochemical or seed product, which involve between
10 and 12 years of work, CE technologies can be quickly
developed and commercialised.
Governance
Crop Enhancement products deliver proven benefits not
only to healthy crops but - most importantly – to those
facing more challenging growing conditions. They
work by beneficially stimulating a plant’s physiological
responses to stress factors such as heat, salinity,
rapid growth, in-field rooting establishment, and the
application of agrochemicals.
INCREASED CROP YIELD & QUALITY
Strategic Review
HOW CROP ENHANCEMENT WORKS
Plant impact is developing a complete portfolio of crop enhancement products for
the world’s most important agricultural crops. Soy and wheat are our first targets.
SOY
WHEAT
World’s second largest
food crop, 20% of food
calories supplied to world
WHAT ARE WE DELIVERING TO FARMERS
Products with proven improvement in
grower returns
Plant Impact products typically provide in excess of a 4:1
financial return for growers relative to the “farm-gate”
cost of the product. This return represents compelling
value for money relative to competitive products and
other crop inputs. We continually invest in multi-year
product field trials to demonstrate consistent efficacy
to support our value proposition.
Portfolio differentiation for industry leaders
Plant Impact technologies and products are marketed
by commercial partners in more than 15 countries
around the world. These partners are recognised
distributors and agrochemical multinationals. Plant
Impact Crop Enhancement products help these partners
differentiate themselves opposite their own competitors,
enabling them to provide more complete solutions to
their grower customers.
Plant Impact Annual Report 2014
Financial Statements
Largest oil crop in the
world, 80% becomes
livestock feed, 51%
production increase
since 1998
Strategic Review
OUR PRODUCT BRANDS
ABOUT
ABOUT
Improves the soy plant’s ability to withstand
stress at the critical flowering growth stage
Reduces bitter-pit, an apple quality disorder,
by 50-75% with fewer sprays in a safer chemical
form than traditional alternatives
GROWER BENEFITS
4-6% yield increase
GROWER BENEFITS
COUNTRIES
Increased % of yield in post-harvest Grade 1
Brazil
COUNTRIES
UK, Netherlands, Belgium, Spain, France
ABOUT
ABOUT
Improves quality of high-value fruit and vegetables such
as cabbage, strawberries, leafy salads and carrots
Stimulates rooting and plant establishment in
both transplanted field vegetables and certain
broad acre crops like oilseed rape (canola)
GROWER BENEFITS
Fewer rejects by supermarkets
of market-bound produce
COUNTRIES
UK, Netherlands, Germany, Spain, Greece, Egypt, Jordan
GROWER BENEFITS
Improved crop establishment, higher
marketable and absolute yields
COUNTRIES
UK
ABOUT
Delivers controlled nutrition to high-value sports turf (golf
courses), stimulating more desirable plant growth
GROWER BENEFITS
Improved colour, more playable turf
COUNTRIES
UK, United States
05
THE VERITAS® STORY
THE OPPORTUNITY
Brazilian growers farm more than
30 million hectares of soy each year
– an area equivalent to 125% the
landmass of the British Isles.
Plant Impact has identified
Brazilian soy as a strategic target:
a $3 billion potential market for
Crop Enhancement products.
Strategic Review
Our four year journey to introduce new
technology into Brazilian agriculture.
Average soy yields in Brazil have improved
by 45% since 1990, but are still only
50%
of the levels commonly achieved by the top Brazilian
growers who use a full technology programme,
including Crop Enhancement products.
Governance
2010–2011
TESTING FOR EFFICACY
Small scale field testing begins
for Pi-2xx, a prototype product
to improve soy yield. Results show
significant yield improvements
of 4-6% per hectare.
2012–2013
PROVING THE PRODUCT
TO GROWERS
Financial Statements
Pi-2xx completes field testing phase
– Veritas® is branded and tested
with 50 growers in 2012. A 2013
commercial pilot with Bayer
CropScience in the Cerrado region
tests the product with close to
1,000 farmers.
2014 +
COMMERCIAL LAUNCH
Plant Impact and Bayer CropScience
Brazil sign a long-term agreement,
with Veritas entering the Bayer
portfolio. Product is launched
in all regions of Brazil.
Plant Impact Annual Report 2014
Strategic Review
BUSINESS OVERVIEW
Plant Impact plc and its subsidiary
companies (together “the Group”)
develop and formulate Crop
Enhancement products. This
category enhances the capacity of
crops to produce high-quality yield
in a variety of growing and climatic
conditions. Crop Enhancement
products work by beneficially
stimulating a plant’s physiological
responses to stress factors such as
heat, salinity, rapid growth, in-field
rooting establishment, and the
application of pesticides. Crop
Enhancement products are distinct
from fertilisers, which correct
soil deficiency, as well as from
conventional agrochemicals
(pesticides), which protect crops
from invasive pests, diseases
or weeds.
The Group’s products – which are
all presently foliar chemical sprays
applied on the farm by growers –
are developed and registered by
the Group and then marketed by
regional agrochemical distributors
or global strategic partners such
as Bayer CropScience and Arysta
LifeScience.
Plant Impact’s products are derived
from technologies which are
proprietary to the Group, having
been developed through the Group’s
internal scientific research efforts
or via collaborations with academic
and research institutes such
as Lancaster University and
Rothamsted Research. The Group
protects its intellectual property and
products through the use of patents,
trade secrets and trademarks. Plant
Impact conducts multi-year product
efficacy trials which generate
compelling data packages that are
a key point of market differentiation
and a significant barrier to
competitive entrants.
These technologies and products
include:
•CaT™, a patented technology
which combines a calcium salt
with an active molecule that
mobilises calcium throughout
plant tissues. Getting calcium
quickly and effectively to the right
place produces an anti-stress
response in the plant and –
depending on the particular
product formulation – can deliver
higher yields, better quality
produce, or reduced post-harvest
losses. The Group has
commercialised three CaT™
products: Veritas®, in Brazilian
soy; InCa®, for European field
vegetables; and Ametros®, for
European tree fruit. In addition
to these Plant Impact brands,
various distribution partners
market private-label CaT™
technology brands.
•PiNT®, a trade secret formulation,
binds a nitrogen molecule with
a cation to produce a chemical
application which stimulates
desirable growth effects in crops.
The Group has commercialised
two PiNT® products to date:
iNTrench®, for high-value sports
turf; and eNTiton®, which
stimulates better rooting and
establishment of field vegetables
and oilseed rape (canola).
•Alethea®, a patented combination
of three chemical additives, which
when combined with selected
micronutrients, produces an
anti-stress response in crops.
The Group is currently developing
a series of products using this
technology for application in world
crops such as soy and wheat.
In addition, the Group has a pilot
commercial programme with
Arysta LifeScience in cocoa.
•TGT-101, a patented, essential-oil
based insecticide which has control
benefits on agricultural pests such
as mites, whiteflies and thrips. The
Group was granted a United States
EPA registration for this technology
in 2012, and its Californian
registration is in progress.
Plant Impact’s distribution approach
aligns the Group’s selection of route
to market according to both crop and
geography. This plan is summarised
in the Chairman’s Statement and
further described in the Strategic
Report. The Group currently sells in
15 countries, though it is focused on
three key areas: Europe, the Middle
East, and the Americas. Sales in the
Americas currently account for more
than 50% of the Group’s turnover.
07
the regulatory process is relatively
simple and speedy. This is in
contrast to regulatory regimes
which oversee the introduction
of pesticides, which typically take
several years and require much
more extensive testing and dossier
preparation. The Group maintains
a strict regulatory compliance
approach, and will continue to
monitor the appropriate regulations
related to its current and
future products.
The Group has approximately 30
people associated with the business,
of which 14 are salaried employees
and the remainder are compensated
via various contracting and
consulting arrangements.
Governance
Plant Impact maintains its headoffice and primary research facility
at RoCRE in Harpenden, United
Kingdom. In addition, in January
2014, the Group opened a second
office in Sao Paulo, Brazil.
Financial Statements
Research and development for new
products, as well as extensions and
upgrades of existing products, is
conducted at the Group’s primary
research facility at the Rothamsted
Centre for Research and Enterprise
(“RoCRE”) in Harpenden, United
Kingdom. At RoCRE, Plant Impact
has on-demand access to
glasshouses, controlled growth
environments, a 250 hectare
research farm, as well as advanced
imaging and analytical equipment.
In addition, the Group supplements
these in-house efforts with field
efficacy and analytical trials
placed with contract research
organisations in multiple countries.
On an annual basis, the Group will
typically commission 50 trials with
25 independent trialists.
Strategic Review
All of the Group’s products are
currently manufactured within the
United Kingdom at the facilities
of three, outsourced, contract
manufacturers. The Group operates
a “make-to-order” business,
placing orders with its contract
manufacturers only following
receipt of a firm purchase order
from one of the Group’s customers.
The Group has no current plans to
own production facilities.
The Group’s products are typically
regulated under national and
multinational rules which govern
the manufacture and distribution
of foliar fertilisers. Since these
compounds are well characterised,
Plant Impact Annual Report 2014
Strategic Review
CHAIRMAN’S STATEMENT
Plant Impact’s technology raises the
yields of world crops for a grower
cost that represents compelling
value for money. This is a useful and
enduring proposition given global
demographics and agricultural
challenges. The Group’s strategic
plan is to secure value for its
technology across three pillars.
Firstly, to sell “direct to market”
in Europe and the Middle East by
commercialising products for high
value crops. This activity is aimed
at generating secure cash flow with
acceptable operational risk. The
second pillar is to “globalise and
scale” the business by partnering
with leading agrochemical
businesses which can market Plant
Impact’s technologies in large world
crops. Thirdly, the Group will
“accelerate innovation” by investing
surplus cash in R&D.
“We have recently entered
the Brazilian soy market
and I am pleased to
report that our product,
Veritas®, was extremely
well received by
Brazilian growers.”
In the last twelve months, my
Board colleague and I have
focused on supporting the CEO
and management to deliver this
strategy. For the direct-to-market
opportunities, we are committed
to horticulture and fruit crops.
For the second pillar, the essential
challenge of globalisation and
scale-up, we have recently entered
the Brazilian soy market in
partnership with Bayer CropScience.
In R&D, the team is focused on
broadening the offer in soy with
a range of products that add
cumulatively to the yield proposition
to Brazilian growers and to branch
out to develop new products for
cereals and other crops.
In the last annual report I wrote
about headwinds in Europe as a
consequence of the poor spring
weather and high in-market stocks
of the Group’s products in the
channel. This last year the European
business has improved. It is still a
modest performer, but generates an
appreciable margin and has shown
good growth over last year. We
remain committed to building
this business, and a number of
initiatives, including widening
distribution and further broadening
our territorial cover, are expected
to drive continued progress in sales
performance in the spring of 2015.
Last year also saw a pilot
commercial launch of Veritas® into
Brazilian soy with our partners
Bayer CropScience. This was a
crucial opportunity to prove the
value of the product in one of the
largest single crop sectors in the
world under the scrutiny of a major
R&D based agrochemical company.
I am pleased to report that our
product, Veritas® was extremely
well received by Brazilian growers
“The third element of our
strategy is to invigorate
R&D in order to swell and
freshen the product range
at a pace that facilitates
further growth in big
global crops.”
09
The third element of our strategy,
invigorating and accelerating R&D,
has made some exciting, if early, field
confirmations of ideas developed
over the last twelve months.
It remains for me to thank our
shareholders for their support of
Plant Impact especially those longer
term holders, who have remained
loyal throughout the period required
to effect the business turn-around
that is now beginning to be evident
in the P&L, cash flows and the
Group’s valuation. The Board and
management look forward to
reporting further progress through
the current season in Brazil and in
Europe during its Spring 2015
Financial Statements
The R&D programme is directed
both by the Board (Commercial) and
a Scientific Advisory Board (SAB).
The SAB consists of three senior
external advisory members with
academic and industrial
backgrounds, and is coordinated
by Dr. Steven Adams (Technical
director). The SAB meets alongside
every Board meeting and is a
strategic forum of the first
importance for R&D targeting.
Finally, the Board takes an active
role in supporting the CEO in his
task in attracting and retaining top
talent. The Group depends on
partnership building with major
agricultural technology companies
who have best in class teams. Plant
Impact has secured people of equal
quality and will need to hire more.
A resolution for this year’s AGM
addresses one important aspect
of this point; share based
compensation.
Governance
A little on how we work: the Plant
Impact Board consists of three
people who are responsible for
refining and implementing the
strategy, achieving and monitoring
performance, especially cash and
the allocation of funds. Much
emphasis is placed on achieving
financial self-sufficiency of the
business and delivery to market
expectation. With many companies
in the agricultural sector promising
breakthrough performance, the
Board’s style is toward prudent
prediction with energetic and
determined delivery. I am pleased to
say that there is excellent alignment
on the Board and within the
executive on these priorities and
this culture.
Strategic Review
and by our partners Bayer. They are
cooperating enthusiastically with
the Plant Impact Brazilian team with
a full scale commercialisation of
Veritas® in the upcoming 2014/15
soy growing season.
David Jones
Chairman
24 October 2014
Plant Impact Annual Report 2014
Strategic Review
STRATEGIC REPORT
STRATEGY
In 2011, the Plant Impact Board
conceived a strategy to stabilise the
Group, achieve P&L profitability and
positive operating cash flow, and
prioritise the Group’s commercial
and product development efforts on
the highest potential projects. This
strategic plan has the following
three pillars:
“Plant Impact’s products
are derived from
technologies which
are proprietary to the
Group, having been
developed through the
Group’s internal scientific
research efforts.”
•To sell “direct to market” in
territories which could be served
affordably from the Group’s home
base in the United Kingdom. This
was directed at developing and
focusing on products which
improve the post-harvest quality
of high-value horticultural crops
such as field lettuce, root
vegetables, soft fruit and tree
fruit. In these markets, such
as the United Kingdom, the
Netherlands and various legacy
markets of the Middle East, the
Group provides direct, technical
“on-farm” support to the
distributors who sell Plant Impact
products and also to the growers
who use them. This element of the
Group’s strategy is intended to
develop stable customer
relationships and improved
predictability of recurring
revenue. The aim is to generate
operating cash flow to cover the
majority of the operating cost
of the Group, both near and
mid-term.
•To “globalise and scale” by
selecting crop targets and
countries in which to enter the
business of supplying technical
inputs to growers of large-scale
world crops, such as soy, rice,
maize, and wheat. The Group’s
strategy is to market its products
in these crops via strategic
partnerships with major
agrochemical suppliers. The
Group identified the Brazilian soy
market in partnership with Bayer
CropScience as its first “globalise
and scale” objective. As the Group
achieves the targeted growth from
its entry to world-scale crops,
surplus cash will provide
additional financial and
organisational capacity to develop
new products and technologies.
•To “accelerate innovation” by
identifying and commercialising
new technologies and products
to bring a complete Crop
Enhancement portfolio offering
to growers of large-scale world
crops. This aspect of the strategy
would only follow on the financial
improvement in cash flow from
sales into the first target,
Brazilian soy. The Group has set
in motion development plans for
a complete portfolio of new Crop
Enhancement products for the
soy and wheat crops.
11
The Directors are very pleased to
report progress across all three
pillars of its strategy in the year
to 31 July 2014.
evaluated with a view to refining
the next programme and field and
glasshouse trials in the Spring
of 2015.
The Group currently plans to bring
new soy and wheat products to
commercial pilot as early as 2016.
Finally, the Group has made good
technical progress in supplementing
innovation for the soy market. Initial
field test results for the Group’s
second Crop Enhancement product
for Brazilian soy, a foliar spray
which will be applied at the
emergence stage of the crop’s life
cycle, has shown technical promise
sufficient to move it to field and
glasshouse testing in the coming
season. Work on the third and fourth
products are now at early stages,
with various laboratory, glasshouse
and field experiments planned over
the coming twelve months.
The Directors are confident of the
Group’s strategic direction and
financial prospects over the medium
term and are excited about the
longer term scale-up potential.
The 2014 financial year has marked
an important transition for the
Group, with the successful launch
of Veritas®, a marketing success in
European tree fruit with Ametros®,
and good technical progress on
its development pipeline.
In 2013/14, the Group also began
work to develop a portfolio of Crop
Enhancement products for wheat
crops. Test results for the first and
second products designed for this
important world crop are being
The Group’s decision in 2013 to
relocate its head office and the
Group to Rothamsted Research
in Harpenden will be further reaffirmed as Rothamsted completes
the majority of a £25m investment
OUTLOOK
Plant Impact Annual Report 2014
Financial Statements
Most importantly, 2014 was the first
year of commercial sales for Plant
Impact’s products for world-scale
agriculture. Following a three year
development process of field-trials
and customer demonstrations, the
Group launched Veritas®, a product
which reliably and economically
improves the yield of Brazilian soy.
“The Group has set
in motion development
plans for a complete
portfolio of new
Crop Enhancement
products for the
soy and wheat crops.”
Governance
In the United Kingdom and the
Benelux countries where the Group
invests in a full technical team,
Plant Impact works directly with
distributors to commercialise its
products in high-value horticultural
and fruit crops, sales have expanded
year-over-year. In addition, grower
consumption of Plant Impact
products also expanded, as
reflected by reduced stock levels
at the Group’s distributors at the
end of the 2014 growing season.
In particular, the Group saw strong
second year sales and consumption
of Ametros®, a product that
improves the post-harvest quality
of apples. Plant Impact achieved
appreciable market share for the
product in both territories, and now
looks forward to expanding the
commercial footprint of Ametros®
in other European markets.
Veritas® was marketed in the large
Brazilian Cerrado growing region
in the 2013/14 season in pilot with
Bayer CropScience. Veritas®
provided an average yield
improvement of 4-6% per hectare,
which creates an incremental
revenue of $70-$100 per hectare
for the grower (2014 crop prices).
Following this successful pilot,
Plant Impact secured a long-term
agreement with Bayer CropScience,
whereby Bayer will market Veritas®
in Brazil as part of its portfolio. This
is an important affirmation of the
Group’s strategic plan and a critical
validation of our technology.
Strategic Review
2014 BUSINESS RESULTS
AND OUTLOOK
Strategic Review
STRATEGIC REPORT
CONTINUED
programme. This promises to bring
enhanced scientific capabilities to
the Centre, including the relocation
of other SMEs, further reducing the
need for Plant Impact to invest in
expensive fixed assets and enriching
the collaborative environment with
a commercial element on “campus”.
Since the year-end, the Group has
announced an important next step
in its commercial relationship with
Bayer CropScience Brazil, and
the outlook for sales and grower
consumption of Veritas® in the
2014/15 crop year looks strong.
The Group looks forward to an
appreciable full launch of Veritas®
in the first quarter and first half of
its 2015 financial year. Sales in the
second half of the financial year are
also expected to increase, as lower
channel inventories within European
customers at the end of 2014 give
good visibility of increased growth
in the 2015 growing season.
CHANGE OF YEAR-END,
COMPARABLE PERIOD DATA
The twelve months ended 31 July
2014 is the first full financial year to
be reported on the Group’s revised,
July year-end. The change in year-
£m end was implemented to provide
shareholders with discrete visibility
of the southern hemisphere
business in the first half of the
financial year (primarily Brazilian
operations, reported in the
Americas geographic segment)
and the northern hemisphere
businesses (primarily business
reported in the Europe, Middle East,
and Rest of World segment) in the
second half of the year. In making a
transition to this new year-end, the
Group reported an extended, sixteen
month period for the period ending
31 July 2013. This report provides
prior period comparison data for the
sixteen months ending 31 July 2013
(audited), as well as comparable
data for the 12 months ended
31 July 2013 (unaudited).
TURNOVER
The Group’s customers are
agrochemical distributors and
global strategic partners, who will
each typically place orders for
physical volumes of the Group’s
products once or twice for each
agricultural selling and growing
season. Customers in Europe, the
Middle East, and the United States
(reported in the Americas
Year to
July 2014
(audited)
Year to 16 months to
July 2013
July 2013
(unaudited)
(audited)
2.5
1.2
1.6
(0.7)
(0.4)
(0.5)
1.8
0.8
1.1
Total expenses
(2.7)
(2.1)
(2.9)
Operating loss
(0.9)
(1.3)
(1.8)
Net loss
(0.7)
(1.2)
(1.7)
Turnover
Cost of goods
Gross profit
geographic segment) will typically
order products between October
and February and take delivery
between February and May.
Southern hemisphere customers
(Brazil, reported in the Americas
geographic segment) will place
orders between March and July
and typically take delivery between
August and November.
EUROPE
European sales grew by 51% in 2014
from £516k in the year to 31 July
2013 to £789k. Half of this growth
was due to the launch of Ametros®.
The UK grew 118% and Benelux
48%. Most other European countries
showed modest increases in sales.
MIDDLE EAST
Demand from customers in the
Middle East was severely affected
by the political crisis in Egypt.
Turnover was reduced by 53%.
However, customer demand remains
strong and turnover is budgeted to
return to pre-2013 levels during the
coming year.
AMERICAS
Sales in the Americas rose by 228%
on the back of the pilot launch of
Veritas®. Shipments were in the first
half of the year, for the 2013/14
growing season. These full year
results also benefit from early
commercial shipments for the 2014
season which occurred in July.
GROSS PROFIT
Gross profit margin increased
from 67% to 72% during the year,
reflecting the reduced sales to the
lower profit region of the Middle
East compared to the growth of
higher profit regions such as
Europe and the Americas.
13
The increase in sales for 2014 and
the budgeted increase for 2015
will enable the Group to invest
more money in its research and
development programs. A total of
£1.1m was spent on R&D during the
year (£758k expensed and £380k
capitalised). This expenditure
was predominantly focused on
the soy and wheat development
programmes. This will continue
and at increased levels over the
next financial year.
The Group issues stock options
to incentivise employees and
recruit high calibre experts to
its management team and
functional specialities.
The value of the share options is
expensed in the Group Income
Statement. The value of each option
granted is determined at the time of
grant using the trinomial valuation
method, and expensed pro-rata
over the options’ vesting period.
When share options are forfeited
pre-vesting, the Group records a
benefit to its Income Statement,
equivalent to the current and prior
at an annualised rate of 3.5%, are
incurred by the Group only in the
event that the facility is used to
accelerate cash collection.
In 2014 the Group expensed £38k
(2013: £186k) relating to share
options. The decline in cost is due
to the aging of options currently
granted – most have vested during
the year.
BORROWINGS
INCOME TAX
In the previous financial year, the
Group repaid its £0.6m corporate
loan to Arysta LifeScience. The
Group operated without any longterm debt during the year to
31 July 2014.
The Group benefits from Research
and Development tax credits, in the
form of a cash refund. £204k was
received during the year, reflecting
an under accrual of tax credit
receivable of £69k at 31 July 2013.
This, plus the expected tax credit of
£117k for the current financial year,
brings the income statement credit
to £185k.
CASH FLOW AND CASH
The Group currently has an
accumulated tax loss of £8.1m, and
does not anticipate any income tax
liability for the foreseeable future.
Cash balances at the time of this
report publication were £1.1 million,
having increased steadily since the
middle of the 2014 calendar year.
The Group has sufficient funds to
support its near-term operating
requirements and the operational
flexibility to reduce or increase
expenditure to respond to
challenges or opportunities.
RECEIVABLES
Trade and Other receivables at
31 July 2014 were £0.5m, reflecting
shipments to customers in the June
and July timeframe.
The Group has entered into a £1.0
million receivables financing facility
with HSBC Invoice Financing which
gives the Group the option (though
not the requirement) to accelerate
cash collection of up to 80% of its
outstanding debtor book to the date
of invoice issuance. This is a nonrecourse facility, where ownership
of the Group’s customer debts
passes to HSBC Invoice Financing,
and HSBC provides credit insurance
and credit control. Interest costs,
Cash at 31 July 2014 was £0.5m
(2013: £1.3m). Cash outflow from
operating activities was £0.4m
(2013: £1.1m). £0.4m was spent
on the purchase of assets (2013:
£0.3m). There were no financing
activities during the period (2013:
£2.2m was raised through the
issue of shares).
On behalf of the Board
John Brubaker
Chief Executive Officer
24 October 2014
Plant Impact Annual Report 2014
Financial Statements
SHARE-BASED PAYMENTS
year charges which had previously
been recognised. However postvesting share option forfeitures
are recycled through the reserves.
Governance
Expenses over the year were £2.7m.
This reflects the Group’s continued
focus on careful expense control
opposite its strategic and
commercial plans. Approximately
£500k was expensed via the Group’s
newly-established Brazilian
operations. Expense growth in
Brazil is expected to continue
into 2015, as field trial activity
is increased, and the marketing
and technical support of Bayer
CropScience intensifies.
Strategic Review
EXPENSES
Governance
BOARD OF DIRECTORS
DAVID JONES
Non-Executive Chairman
David joined Plant Impact in
February 2011 when he was
appointed Non-Executive Chairman.
He has extensive and senior
experience in the agribusiness
sector. David was the Chairman
of Arysta between 2008 and 2010.
From 2000 to 2007, David was
Head of Business Development
for Syngenta International having
previously been Strategy and
Product Director of Zeneca’s
Agrochemicals Division. From 2000
to 2003, he was the principal
manager for the Syngenta merger.
This involved the simultaneous
demerging of the agricultural
businesses of Novartis and Zeneca,
the unification in a new entity,
Syngenta, and the immediate
flotation on three exchanges.
Prior to this David had marketing/
operational roles in Asia, Europe
and emerging markets.
JOHN BRUBAKER
Executive Director
John was appointed as Chief
Executive Officer on 1 September
2011. Prior to his appointment
at Plant Impact, John served as
the Global Head of Business
Development for Tokyo-based
Arysta. He worked at Arysta from
2005 to 2011 and was responsible
for all aspects of global acquisitions,
divestures and various other
strategic initiatives. John was a
member of Arysta’s global executive
staff and operating committee. Prior
to Arysta, he was Director of
Business Development at R4 Global
Solutions, a San Francisco based
technology start-up, since acquired
by Verisign. He has also worked as
an investment banker and as a
product and accounts manager at an
early-stage software and telecoms
Group. John holds a bachelor’s
degree from Yale University and
master’s degree from the Johns
Hopkins School of Advanced
International Studies.
MARTIN ROBINSON
Non-Executive Director
Martin joined Plant Impact in June
2005, when he was appointed
Non-Executive Chairman and,
subsequently, a Non-Executive
Director. He is the Executive
Chairman of Brooks Macdonald
Funds Ltd, a property and
investment fund manager and a
Non-executive director of a number
of other public and private
companies, including two farming
businesses. He was formerly Chief
Executive of stockbroker and fund
manager Henry Cooke Group plc
and a Director of private bank
Brown, Shipley & Co. Ltd. In addition,
he is a Chartered Accountant.
15
ADVISORS
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
BROKERS
REGISTRARS
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
BANKERS
INDEPENDENT AUDITORS
REGISTERED OFFICE
SOLICITORS
DLA Piper UK LLP
101 Barbirolli Square
Manchester
M2 3DL
HSBC Bank plc
8 Canada Square
London
E14 5HQ
Governance
Baker Tilly UK Audit LLP
3 Hardman Street
Manchester
M3 3HF
Strategic Review
NOMINATED ADVISOR
Plant Impact plc
Rothamsted
West Common
Harpenden
Hertfordshire
AL5 2JQ
FINANCIAL PR
Financial Statements
Buchanan
107 Cheapside
London
EC2V 6DN
Plant Impact Annual Report 2014
Governance
GROUP DIRECTORS’ REPORT
The Directors present their report and audited financial
statements for the year ended 31 July 2014.
PRINCIPAL ACTIVITY
The principal activity of the Group is to develop and
market crop enhancement and specialty nutrition
products to deliver yield and quality benefits for
growers.
RESULTS AND DIVIDENDS
The loss for the period after taxation amounted to
£668k (2013: £1,733k). The Directors do not recommend
the payment of any dividends (2013: £nil).
The Directors who held office during the year,
and their interests as at 31 July 2014 were:
D Jones
J Brubaker
M Robinson
The Audit Committee has recommended to the Board
of Directors that the incumbent auditor, Baker Tilly UK
Audit LLP, be reappointed. Baker Tilly UK Audit LLP
have expressed their willingness to continue in office as
auditor and a resolution for their reappointment will be
proposed at the forthcoming Annual General Meeting.
FINANCIAL RISK MANAGEMENT OBJECTIVES
AND POLICIES
The Group’s treasury policy is one of conservatism
approved by the Board.
As a matter of policy, the Group does not undertake
speculative transactions which would increase its
currency or interest rate exposure. Further detail
of the Group’s financial risk management objectives
and policies are disclosed in note 23.
Directors and their interests
DIRECTOR
INDEPENDENT AUDITORS
SHARES HELD
PRINCIPAL RISKS AND UNCERTAINTIES
Early stage development risk
678,571
606,000
236,768
New City Investment Managers
9,037,346
13.9%
Enterprise Ventures
5,473,131
8.4%
Arysta LifeScience Corporation
4,560,530
7.0%
The Group is in the early stage of development and has
not yet generated significant revenues. Its operations
are subject to all the risks inherent in a start-up or
developing business enterprise, including the likelihood
of continued operating losses. The likelihood of the
Group’s success must be considered in the light of the
problems, expenses, difficulties, complications and
delays frequently encountered in connection with the
growth of an existing business, the development of
products and channels of distribution and current and
future development in several key technical fields, as
well as the competitive and regulatory environment
in which the Group operates.
WH Ireland (UK Growth EIS Fund) 3,571,428
5.5%
Commercial risk
FIL Investments International
3,215,039
5.0%
Mr Richard Sneller
2,050,000
3.2%
Mr Michael Andrew Bennett
2,020,571
3.1%
SUBSTANTIAL SHAREHOLDINGS
The Directors are aware of the following shareholdings
exceeding 3% of the Group’s share capital as of
21 October 2014:
Ordinary shares
Number
%
The Group has relationships with a number of
companies and other organisations, including third party
laboratories, which it uses to conduct more extensive
trials after initial trials have been performed by the
Group, multi-national agrochemical companies which
17
The success of the Group will depend on its ability to
maintain these relationships and also initiate, develop
and maintain beneficial commercial relationships with
other parties. The successful realisation of the Group’s
business model requires the establishment and
maintenance of beneficial commercial and strategic
relationships with other parties in the industry.
Competition risk
Intellectual Property Risk
Manufacturing
The Group uses contract manufacturers for all medium
and high volume production of its products. The Group’s
products need to be manufactured in commercial
quantities, in compliance with regulatory requirements
and at acceptable costs. The Group may not be able to
secure or maintain competent contract manufacturers
to deliver products on time, with the required quality
levels or at a cost that is competitive with the products
of its rivals or competitive with the incumbent
technologies it intends to displace.
Funding risk
Sustainability is dependent upon generating cash flows
from successful development and commercialisation
of the Group’s products. Until then, the Group will be
dependent upon additional funding through completion
of distribution and licensing arrangements or through
injection of capital. There can be no assurances that
such funding will be achieved on favourable terms,
if at all. Failure to generate additional funding
may lead to the postponement or cancellation of
programmes and/or the scale back of operations.
Further details are disclosed within note 2 to the
Group Financial Statements.
Plant Impact Annual Report 2014
Financial Statements
Technological innovation is critical to the Group’s
long-term success. However, third parties may
challenge the measures that the Group takes to protect
processes, compounds and methods of use through
patents and other intellectual property rights and, as a
result, the Group’s products may not always have the full
benefit of intellectual property rights. In addition, while
the Group takes steps to prevent unauthorised access to
and distribution of its intellectual property, it cannot
assure that unauthorised parties do not obtain access to
and use such property. Third parties may also claim that
the Group’s products violate their intellectual property
rights. Defending such claims, even those without merit,
could be time-consuming and expensive. In addition, any
such claim could also result in the Group having to enter
into licence arrangements, develop non-infringing
products or engage in litigation that could be costly.
The agribusiness industry is subject to seasonal and
climactic factors which make the Group’s operations
relatively unpredictable from period to period. Weather
can impact the number of days available for farmers to
apply crop nutrition products or the underlying market
demand for the Group’s products, which are tailored
to the particular physiological needs of a given crop.
Climactic conditions and commodity prices can impact
the number of planted hectares of targeted crops in
any particular region. As the Group’s products are sold
on a seasonal basis, if weather or industry conditions
negatively impact demand for the Group’s products in
the current season, the Group’s customers may wait
until the subsequent season or year before
purchasing again.
Governance
Competitors may develop technologies that are more
effective or economical than those of the Group. In
addition, current and potential competitors may have
substantially greater financial, technical and marketing
resources, longer operating histories, larger customer
bases, greater name recognition and more established
relationships than the Group and so may be better able
to compete in the Group’s target markets.
Climate and Agribusiness Risk
Strategic Review
are conducting field trials with a view to entering into
distribution and/or licensing agreements and also
marketing partnerships.
Governance
GROUP DIRECTORS’ REPORT
CONTINUED
Attraction and retention of key employees
The Group depends on its Directors and other key
employees and whilst it has entered into contractual
arrangements with these individuals with the aim of
securing the services of each of them, retention of these
services cannot be guaranteed. The Group has
attempted to reduce this risk by offering competitive
remuneration packages including the opportunity to
participate in a share option scheme and investment in
training, development and succession planning.
RESEARCH AND DEVELOPMENT
Research and development costs that have been
charged directly to the Group income statement for the
period ended 31 July 2014 amounted to £758k (2013:
£770k). Further details of research and development
progress are outlined within the Chairman’s Statement
and Strategic Report on pages 5 and 7 respectively.
KEY PERFORMANCE INDICATORS (KPIS)
The KPIs of the business are the progress towards
commercialisation of products and research and
development progress as reviewed in the Chairman’s
Statement. These KPIs are measured by sales growth.
Other financial KPIs reviewed by the Directors are sales
(actual as compared to budget), gross margin, operating
expenses, and available cash as reviewed within the
Chairman’s Statement and the Strategic Report on
pages 5 to 7.
PAYABLES
The Group agrees terms and conditions for business
transactions with its suppliers. Payment is then made
on these terms, subject to the terms and conditions
being met by the supplier.
discriminate in the recruitment and promotion of staff.
All eligible employees are included in the Group’s bonus
incentive plan and have historically been awarded
share options.
During the year ended 31 July 2014, the Group employed
14 full time staff on average (2013: 10 employees). From
time to time, the Group supplements key roles and
organisational functions with third parties, contractors
and outsourced service providers. The Group’s fulltime-equivalent workforce at 31 July 2014 was 17.
SAFETY, HEALTH AND ENVIRONMENT
Plant Impact is committed to maintaining high standards
of safety, health and environmental protection by
conducting itself in a responsible manner to protect
people and the environment.
DIRECTORS THIRD-PARTY INDEMNITY PROVISIONS
During the financial period, a qualifying third-party
indemnity provision for the benefit of the Directors
was in place.
GOING CONCERN
Having made reasonable enquiries, the Directors are
of the opinion that the Group has adequate resources
to continue in operational existence for the foreseeable
future and hence these Financial Statements have
been prepared on a going concern basis. Further
details are disclosed within note 2 to the Group
Financial Statements.
By order of the Board
EMPLOYEES
The Group involves all its employees in its corporate
objectives, plans and performance and on other relevant
matters of interest to employees through various
communication methods and regular meetings. The
Group is an equal opportunity employer and does not
Martin Robinson
Secretary
24 October 2014
19
CORPORATE GOVERNANCE STATEMENT
THE BOARD
The Board currently comprises one Executive and two
Non-Executive Directors. The Non-Executive Directors,
namely David Jones and Martin Robinson, both have
relevant and complementary expertise gained from
differing business backgrounds, materially enhancing
the judgement and overall performance of the Board.
The Board believes that the Non-Executive Directors
are all independent, notwithstanding all Non-Executive
Directors were granted options. All Non-Executive
Directors are also shareholders.
The Board has established Audit and Remuneration
Committees, each with defined terms of reference.
Audit Committee
This comprises of the Non-Executive Directors, with
Martin Robinson as Chairman. The Committee meets at
least twice each year and the meetings are arranged to
tie in with the Group’s financial calendar. The external
auditors attend the meetings at which half year or
full year results are reviewed and reported on as
appropriate, both in the presence and absence of
management.
The Committee’s terms of reference include reviewing
the Group’s accounting policies, financial reporting,
internal control and risk management processes. It also
reviews the need to appoint an internal audit function,
and considers the appointment and fees of the external
auditors together with their independence and
objectivity. The outcomes of the meetings are reported
to the Board.
REMUNERATION COMMITTEE
This comprises the Non-Executive Directors with David
Jones as Chairman. It meets at least twice each year
and makes recommendations to the Board on the
policy, structure and amount of the remuneration of all
Executive Committee members. The Committee also
reviews and approves share-based compensation
schemes and awards for all levels of the employees
in the Group.
The Directors’ Remuneration Report is set out on pages
22 to 23.
Plant Impact Annual Report 2014
Financial Statements
As part of its leadership and control of the Group, the
Board has an agreed list of items that are specifically
reserved for its consideration. These include strategy
and management, approval and monitoring of
budgets, financial reporting, internal controls, major
contracts, external communications with investors,
Executive Committee appointments and remuneration,
appropriate delegation of authority and corporate
governance matters.
BOARD COMMITTEES
Governance
The Board is responsible for overall strategy, major
finance matters and internal financial control. It also
monitors executive management in the business through
its review of financial, strategic and operational matters.
The Board, which meets regularly, at least six times per
year, receives timely documentation ahead of meetings
which includes reports from all members of the
Executive Committee on their areas of responsibility.
Strategic Review
The Group’s shares are quoted on AIM, a market
operated by London Stock Exchange plc, and as
such there is no requirement to publish a detailed
Corporate Governance Statement nor comply with the
requirements of the UK Corporate Governance Code.
However, the Directors are committed to maintaining
high standards of Corporate Governance and this
statement sets out how the Board has applied the
principles of good Corporate Governance in its
management of the business in the year ended 31 July
2014, relevant to the Group’s size and complexity.
Governance
CORPORATE GOVERNANCE STATEMENT
CONTINUED
RISK ASSESSMENT AND INTERNAL CONTROLS
The Directors are responsible for ensuring that the
Group maintains a system of internal control and for
reviewing its effectiveness. There are practical limits to
what can be achieved in a Group of Plant Impact’s size.
Accordingly, the system is designed to manage rather
than eliminate the risk of failure to achieve business
objectives and can only provide reasonable and not
absolute assurance against material misstatement
or loss.
The Group, in administering its business, has put in
place strict authorisation, approval and control levels
within which senior management operates. These
controls reflect the Group’s organisational structure
and business objectives. This control system includes
clear lines of accountability to cover all areas of the
organisation. The Group has a comprehensive budgeting
and reporting system in place such that financial
performance is monitored both by the Executive
Committee and the Board. This includes a comparison
of actual results to budget, variance analysis and
re-forecasting of projected results.
The Group has established an Executive Committee
comprising the Chief Executive Officer and all other
functional heads. The Executive Committee meets at
least once a month to monitor and review progress on
each of the Group’s projects as well as general HR and
management matters. Each member of the Committee
operates within a clearly defined Group structure and
has appropriate operational authority.
SHAREHOLDER RELATIONS
The Board recognises the importance of continual
communication with shareholders and maintains
a programme of regular dialogue with its investors,
including presentations following the Group’s
announcements of its preliminary full year figures
and of the half year results. Separate announcements
of all material events are made as necessary by press
releases that are posted on the Group’s website. This
provides additional information about the Group and
allows access to reports and accounts, press releases
and other materials issued by the Group. There is also
an opportunity at the Group’s Annual General Meeting
for individual shareholders to raise general business
matters with the full Board. The Chairman of the Audit
and Remuneration Committees will be available at the
Annual General Meeting to answer questions.
Plant Impact’s share price is available via a link
on its website (www.plantimpact.com) to the
London Stock Exchange plc website and via
the London Stock Exchange plc’s website
(www.londonstockexchange.com) using the
symbol PIM.
21
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The group financial statements are required by law and
IFRS adopted by the EU to present fairly the financial
position and performance of the Group; the Companies
Act 2006 provides in relation to such financial
statements that references in the relevant part of that
Act to financial statements giving a true and fair view
are references to their achieving a fair presentation.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Group and the Company and of the profit or loss of the
Group for that period.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Plant Impact plc website.
On behalf of the Board
Governance
Company law requires the Directors to prepare group
and company financial statements for each financial
year. The Directors are required by the AIM Rules of
the London Stock Exchange to prepare group financial
statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the
European Union (“EU”) and have elected under company
law to prepare the company financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting
Standards and applicable law).
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s and the Company’s transactions
and disclose with reasonable accuracy at any time the
financial position of the Group and the Company and
enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the group
and the company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
Strategic Review
The directors are responsible for preparing the Strategic
Report and the Directors’ and the financial statements
in accordance with applicable law and regulations.
David Jones
Chairman
24 October 2014
Financial Statements
In preparing each of the group and company financial
statements, the Directors are required to:
a.select suitable accounting policies and then apply
them consistently;
b.make judgements and accounting estimates that
are reasonable and prudent;
c.for the group financial statements, state whether
they have been prepared in accordance with IFRSs
adopted by the EU and for the company financial
statements state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained
in the company financial statements;
d.prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the group and the company will
continue in business.
Plant Impact Annual Report 2014
Governance
DIRECTORS’ REMUNERATION REPORT
REMUNERATION POLICY
•Benefits
These comprise life insurance cover, and healthcare
insurance.
•Share-based Payments
Executive share options have historically been granted
to Directors under share option schemes operated
by the Group. The share options granted to individual
Directors to date are disclosed later in this report and
include grants made in prior years. All share options
granted are subject to continued employment.
The remuneration of Executive Directors comprises
the following elements:
DIRECTORS’ CONTRACTS
The Committee’s policy is to set remuneration packages
for Executive Directors that are competitive with the
market, allowing the Group to attract, motivate and
retain executives of the highest calibre. Remuneration
packages are designed to reward executives for
performance via annual bonus payments and awards
of share-based payments, which together constitute
a potentially significant proportion of the total
remuneration opportunity.
Each Executive Director has a service contract of
indefinite term with a notice period of no more than
one year. Non-Executive Directors have Letters of
Appointment which are terminable by the Director or the
Company with three months’ notice. Martin Robinson’s
appointment was effective from 24 June 2005, and
David Jones was appointed on 10 February 2011.
•Emoluments
This reflects the market rate for each position and
the individual Director’s experience and value to the
business. Salaries are reviewed annually by reference
to comparative information. In addition, the Group
operates a discretionary bonus scheme.
DIRECTORS’ REMUNERATION
Details of the remuneration (excluding share-based payments) of those who served as Directors are set
out below:
Emoluments
£000
Pension
£000
Year ended
31 July 2014
£000
16 months ended
31 July 2013
£000
174
–
174
229
D Jones
35
–
35
46
M Robinson
22
–
22
28
D McNeilly
–
–
–
20
E Sharkey
–
–
–
22
231
–
231
345
Executive Directors
J Brubaker
Non-Executive Directors
Total
23
Strategic Review
DIRECTORS’ SHARE OPTIONS
At 31 July 2014, the Directors had options to subscribe
for ordinary shares under the Group’s share option
scheme as follows:
Options held at
1 April 2013
Movement
in the period
Options held at
31 July 2014
Exercise price
Date of grant
Expiry date
2,822,100
–
2,822,100
24.3p
01/08/12
01/08/22
90,440
–
90,440
29.5p
10/11/05
10/11/15
150,000
–
150,000
18.3p
04/08/10
04/08/20
Executive Directors
J Brubaker
Non-Executive Directors
M Robinson
–
1,375,000
25.5p
26/08/11
26/08/21
100,000
(100,000)
–
18.3p
04/08/10
04/08/20
E Sharkey
100,000
(100,000)
–
18.3p
04/08/10
04/08/20
4,637,540
(200,000)
4,437,540
D Jones
Governance
1,375,000
D McNeilly
None of the terms and conditions of the share options
scheme were varied during the period.
The market price of the Group’s shares at the end
of the financial period was 24.50 pence and the range
of market prices during the period was between
12.62 pence and 25.50 pence.
Financial Statements
David Jones
Chairman of the Remuneration Committee
24 October 2014
Plant Impact Annual Report 2014
Financials Statements
REPORT OF THE INDEPENDENT AUDITORS
TO THE MEMBERS OF PLANT IMPACT PLC
We have audited the Group and parent company financial
statements (“the financial statements”) on pages 26 to
64. The financial reporting framework that has been
applied in the preparation of the Group financial
statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European
Union. The financial reporting framework that has been
applied in the preparation of the parent company
financial statements is applicable law and United
Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice)
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Group’s
members those matters we are required to state to
them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Group
and the Group’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITORS
As more fully explained in the Statement of Directors’
Responsibilities set out on page 20, the Directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a true
and fair view. Our responsibility is to audit and express
an opinion on the financial statements in accordance
with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us
to comply with the Auditing Practices Board’s (APB’s)
Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL
STATEMENTS
A description of the scope of an audit of financial
statements is provided on the Financial Reporting
Council’s website at www.frc.org.uk/
auditscopeukprivate.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
•the financial statements give a true and fair view of
the state of the Group’s and of the parent company’s
affairs as at 31 July 2014 and of the Group’s loss
for the year then ended;
•the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union;
•the parent company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
•the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
Report of the Independent Auditors to the Members
of Plant Impact plc continued
Opinion on other matter prescribed by the Companies
Act 2006
In our opinion the information given in the Strategic
Report and the Directors’ Report for the financial year
for which the financial statements are prepared is
consistent with the financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
•adequate accounting records have not been kept by
the parent company, or returns adequate for our audit
have not been received from branches not visited by
us; or
•the parent company financial statements are not in
agreement with the accounting records and returns;
or
•certain disclosures of Directors’ remuneration
specified by law are not made; or
•we have not received all the information and
explanations we require for our audit.
Graham Bond FCA (Senior Statutory Auditor)
For and on behalf of BAKER TILLY UK AUDIT LLP,
Statutory Auditor
Chartered Accountants
3 Hardman Street
Manchester
M3 3HF
24 October 2014
25
GROUP STATEMENT OF
COMPREHENSIVEINCOME
INCOME
COMPREHENSIVE
For the year ended
ended 31
31 July
July 2014
2014
Note
£000
Revenue
Year ended
31 July 2014
£000
£000
16 months
ended
31 July 2013
£000
1,601
Cost of sales
(714)
(529)
Gross profit
1,787
1,072
(1,048)
(1,203)
(758)
(770)
Sales and marketing costs
Research and development costs
Share-based payments
Exceptional costs
Other administrative expenses
(38)
(186)
–
–
(799)
(716)
(837)
(902)
Total expenses
(2,643)
(2,875)
Operating loss
(856)
(1,803)
Administrative expenses
8
3
1
Finance cost
9
–
(61)
3
(60)
(853)
(1,863)
185
130
(668)
(1,733)
(1 pence)
(3 pence)
Net finance costs
Loss before tax
Income tax credit
11
Loss for the period attributable to equity shareholders
Governance
Finance income
Strategic Review
2,501
Loss per ordinary share attributable to equity shareholders
Total and continuing:
Basic and diluted
13
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
The Group has no other comprehensive income or expenses. Accordingly the total comprehensive loss for the period
is equal to the loss for the period, and no separate Group Statement of Total Gains and Losses has been shown.
Financials
Statements
Financial Statements
GROUP STATEMENT OF
CHANGESIN
INEQUITY
EQUITY
For the year ended
ended 31
31 July
July 2014
2014
Share capital
£000
Share premium
£000
Other reserve
£000
Merger reserve
£000
Balance at 1 April 2012
504
12,547
290
183
(11,469)
2,055
Share issue (net)
145
2,083
–
–
–
2,228
Share-based payments
–
–
186
–
–
186
Forfeited share-based payments
–
–
(110)
–
110
–
Transactions with owners
145
2,083
76
–
110
2,414
Loss for the year and total
comprehensive income
–
–
–
–
(1,733)
(1,733)
649
14,630
366
183
(13,092)
2,736
Share issue (net)
–
–
–
–
–
–
Share-based payments
–
–
75
–
–
75
Forfeited share-based payments
–
–
(37)
–
–
(37)
Reclassification
–
(287)
–
104
183
–
Transactions with owners
–
(287)
38
104
183
38
(668)
(668)
(13,577)
2,106
Balance at 31 July 2013
Loss for the period and total
comprehensive income
Balance at 31 July 2014
649
14,343
404
287
Retained losses
£000
Total equity
£000
OTHER RESERVE
The other reserve comprises the fair value of share-based payments granted in accordance with IFRS 2.
MERGER RESERVE
The merger reserve arose on the acquisition of PI Bioscience Limited which was accounted for under UK GAAP.
This business combination took place prior to 1 April 2006, the Group’s date of transition to IFRS, and as such
the Group has elected not to apply IFRS 3 Business Combinations.
The reclassification between merger reserve, retained earnings and share premium has been made in order
to bring the Group reserves into line with the Company reserves.
27
GROUP STATEMENT OF
FINANCIALPOSITION
POSITION
FINANCIAL
For the year ended
ended 31
31 July
July 2014
2014
Note
31 July 2014
£000
31 July 2013
£000
Intangible assets
14
1,782
1,454
Property, plant and equipment
15
209
184
1,991
1,638
Assets
Non-current assets
16
18
4
Trade and other receivables
17
543
389
117
136
516
1,266
1,194
1,795
3,185
3,433
(57)
–
(57)
–
(1,022)
(697)
(1,079)
(697)
2,106
2,736
649
649
14,343
14,630
Other reserve
404
366
Merger reserve
287
183
Retained losses
(13,577)
(13,092)
2,106
2,736
Corporation tax receivable
Cash and cash equivalents
18
Total assets
Liabilities
Non-current liabilities
Borrowings
19
Governance
Inventories
Strategic Review
Current assets
Current liabilities
Trade and other payables
20
Total liabilities
Net assets
Equity
Share capital
Share premium
Total equity
21
The Group financial statements were approved and authorised for issue by the Board of Directors on 24 October 2014
and were signed on its behalf by:
D Jones
Chairman
Plant Impact plc
Company number: 5442961
Plant Impact Annual Report 2014
Financial Statements
Equity attributable to equity shareholders of the Company
Financials
Statements
Financial Statements
GROUP CASH FLOW
STATEMENT
For the year ended
ended 31
31 July
July 2014
2014
Note
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
Cash flows from operating activities
(853)
(1,863)
14/15
85
93
22
38
186
(3)
(1)
–
61
Operating cash flows before working capital changes
(733)
(1,524)
(Increase)/Decrease in trade and other receivables
(154)
539
(Increase)/Decrease in inventories
(14)
12
Increase/(Decrease) in trade and other payables
325
(362)
(576)
(1,335)
204
246
(372)
(1,089)
Loss before tax
Adjusted for:
Depreciation and amortisation
Share-based payments
Finance income
Finance cost
Cash absorbed by operations
Research and development tax credit received
Net cash outflow from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
15
(58)
(180)
Purchase of intangible assets
14
(380)
(137)
3
1
(435)
(316)
–
2,228
57
(842)
Interest Paid
–
(61)
Share-based payments exercised
–
–
57
1,325
(750)
(80)
1,266
1,346
516
1,266
Interest received
Net cash absorbed by investing activities
Cash flows from financing activities
Proceeds from issue of share capital (net of expenses)
Increase in/(repayment of) borrowings
Net cash generated by financing activities
(Decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
18
NOTES TO THE
THEGROUP
GROUP
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
29
1. NATURE OF OPERATIONS AND GENERAL INFORMATION
The principal activities of the Group are described in the Group Directors’ Report.
The registered number of the Company is 5442961.
The Group financial statements of Plant Impact plc for the year ended July 2014 were authorised for issue by the Board
of Directors on 24 October 2014.
Strategic Review
Plant Impact is the Group's ultimate parent company. It is incorporated and domiciled in England and Wales.
The address of Plant Impact plc's registered office, which is also its principal place of business, is Rothamsted,
West Common, Harpenden, Hertfordshire, AL5 2JQ, United Kingdom. Plant Impact's shares are quoted on AIM,
a market operated by London Stock Exchange plc.
2. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The consolidated financial statements of Plant Impact have been prepared in accordance with International
Financial Reporting Standards and IFRIC interpretations as endorsed by the EU (“IFRS”) and the requirements
of the Companies Act 2006 applicable to companies reporting under IFRS.
Basis of preparation
The consolidated financial statements have been prepared under the historical cost convention. The consolidated
financial statements are presented in round thousands Sterling (£) which is also the functional currency of the Group.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Review on pages 7 to 11. The financial position of the Group, its cash flows and
liquidity position including the Group’s objectives, policies and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk
and liquidity risk are described in note 23 to the Group financial statements.
Governance
The accounting policies have been applied consistently throughout the Group for the purposes of preparation
of these Group financial statements.
The Group has demonstrated its capability in securing contractual arrangements and maintaining customer
relationships which increase the probability of improving revenues.
In summary, the Group’s financial resource procedures are managed in a way that identify potential risks, are forward
looking and provide sufficient time to respond to these risks while maintaining a going concern status. The Group’s
financial resource management includes regular reporting to the Board. This reporting includes up to date cash
resource visibility and forward looking projections of the Group’s financial position.
After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the Group financial statements.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
The Group has undertaken a review of forecasts and projections, which have been prepared for the period to
31 January 2016. These indicate growth in product revenues and cash flows. The projections take into account the new
business opportunities highlighted in the Strategic Review, the timing and quantum of which will affect the Group’s
cash requirements, which are continually monitored by the Board. The sensitivity analysis undertaken included a
number of scenarios surrounding uncertainties achieving forecast product revenues and a review of the ability of the
Group to manage its cost base to meet working capital and funding requirements in the event that forecast revenues
and cash flows are not achieved. This review supports the Directors’ conclusion that the Group should be able to
operate within the level of its current cash resources and on this basis the Directors believe that the Group is well
placed to manage its business risks successfully.
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Basis of consolidation
Until 31 March 2012 the Group’s annual financial statements was comprised of the financial statements of Plant
Impact and its subsidiaries as at 31 March each year. From 31 July 2013 the Group’s annual statement was comprised
of the annual financial statements of Plant Impact and its subsidiaries as at 31 July each year. Subsidiaries are entities
over which the Group has the power to control the financial and operating policies so as to obtain benefits from its
activities. The Group obtains and exercises control through voting rights (“parent company concept”).
The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using
consistent accounting policies. Inter-company transactions, balances and unrealised gains on transactions between
the Group and its subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Acquisitions of subsidiaries are dealt with by the purchase method. The purchase method involves the recognition at
fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition
date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition.
On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated balance sheet at their
fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting
policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of
acquisition cost over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary at
the date of acquisition.
Revenue recognition
The Group currently sells Crop Nutrient products to national and global distributors. Revenue is recognised to the
extent that the Group obtains the right to consideration in exchange for its performance. Revenue is measured at
the fair value of the consideration received, excluding discounts and VAT.
Revenue from the sale of Crop Nutrient products is recognised when:
• the significant risks and rewards of ownership of the goods have passed to the buyer, usually on dispatch
of the goods or on proof of acceptance by the customer;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the Group; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue recognition is dependent on contractual terms and geographical location.
Revenue arising from product licence agreements typically have an initial up-front non-refundable payment on
execution of the licence, and the potential for further payments conditional on achieving specific milestones, plus
royalties on product sales. Where the initial fee is non-refundable and there are no ongoing commitments from
the Group, the Group recognises the element received up front as a payment in consideration of the granting of
the licence on execution of the contract. Amounts receivable in respect of milestone payments are recognised
as revenue when the specific conditions stipulated in the licence agreement have been met. Payments linked to
“success” such as regulatory filing or approval, and achievement of specified sales volumes, are recognised in
full when the relevant event has occurred.
Interest income
Interest income represents bank interest received.
Research and development expenditure
Research expenditure is charged to the income statement in the period in which it is incurred. Development
costs incurred are capitalised when all the following conditions are satisfied:
• completion of the intangible asset is technically feasible so that it will be available for use or sale,
considering its commercial and technological feasibility;
• the Group intends to complete the intangible asset and use or sell it;
• the Group has the ability to use or sell the intangible asset;
• the intangible asset will generate probable future economic benefits;
31
• there are adequate technical, financial and other resources to complete the development and to use or sell
the intangible asset; and
• the expenditure attributable to the intangible asset during its development can be measured reliably.
Development costs not meeting the above criteria for capitalisation are expensed as incurred.
Goodwill, representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable
assets acquired, is capitalised and reviewed annually for impairment as it has an indefinite life. Goodwill is carried at
cost less accumulated impairment losses. A gain from bargain purchase is recognised immediately after acquisition in
the income statement.
Strategic Review
Goodwill
Intangible assets
Development costs capitalised, which form part of the Group's intangible assets, are amortised on a straight line basis
over a period not exceeding 20 years starting from the point that those products resulting from the development activity
commence mainstream sales. Amortisation is charged to administrative expenses.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and provision for impairment. Depreciation
is provided on all property, plant and equipment at rates calculated to write off the cost of each asset, less its
estimated residual value, on a straight line basis over its expected useful life, as follows:
33.3% per annum
Leasehold improvements
10.0% per annum
The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate,
at each financial year end.
Impairment of assets
Governance
Laboratory and office equipment
The carrying values of intangible assets are tested for impairment when events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised in the Group Income Statement within administrative expenses for the amount by
which the asset's carrying amount exceeds its recoverable amount. Impairment losses recognised for goodwill are not
subsequently reversed.
Other intangible assets are reassessed for indications that an impairment loss previously recognised may no longer
exist. The impairment review of intangible assets is analysed in note 15. An impairment charge is reversed if the
cash-generating units recoverable amount exceeds its carrying amount.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date.
Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at
the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
If any such indication exists, or when annual impairment testing for an asset is required (e.g. cash-generating units
that include goodwill), the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount
is the higher of an asset’s or cash-generating unit’s fair value less costs to sell (separable identifiable cash flows) and
its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. Impairment losses on continuing operations are recognised in the
Group income statement in those categories consistent with the function of the impaired asset.
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Foreign currencies continued
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were initially recorded are recognised in the profit or loss in the period in which they
arise. Exchange differences on non-monetary items are recognised in the statement of other comprehensive income to
the extent that they relate to a gain or loss on that non-monetary item taken to Group Other Comprehensive Income;
otherwise such gains and losses are recognised in the Group Income Statement.
Operating segments
Operating segments have been determined based on the reports regularly reviewed by the Board which are used
to make strategic and operational decisions.
The Group’s main reporting segments are Crop Nutrients and Pest Control. However, management analyses data
at a more detailed level using geographies. Whilst this does not represent a segment, the Board has decided to include
the geographical information in note 5.
Taxation
Credit is taken in the accounting period for research and development (R&D) tax credits, which will be claimed from
Her Majesty’s Revenue & Customs (HMRC), in respect of qualifying R&D costs incurred in the same accounting period.
The resultant amount is measured at the amount expected to be recovered from HMRC.
UK corporation tax is provided on taxable profits or losses at amounts expected to be paid, or recovered, applying the
tax rates and laws that have been enacted, or substantively enacted, by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases
used in the computation of taxable profit or loss. Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will be available against which the temporary differences can be utilised. Their carrying amount is
reviewed at each balance sheet date on the same basis. However, deferred tax is not provided on the initial recognition of
goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or
affects tax or accounting profit. Deferred tax is measured on an undiscounted basis, and at the tax rates that are expected to
apply in the period in which the asset or liability is settled, provided they are enacted or substantively enacted at the balance
sheet date. It is recognised in the income statement or within other comprehensive income except when it relates to items
credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Financial assets
Financial assets are classified into the following specified categories: financial assets ‘at fair value’ through profit
or loss (FVTPL), ‘held to maturity’ investments, ‘available for sale’ financial assets and ‘loans and receivables’.
The classification depends on the nature and purpose of the financial asset and is determined at the time of initial
recognition. The Group currently has only loans and receivables. Financial assets, other than those categorised
as at FVTPL, are initially recognised at fair value plus transaction costs.
Effective investment method
The effective investment method is a method of calculating the amortised cost of a financial asset/liability and of
allocating interest income/expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts/payments through the expected life of the financial asset/liability, or,
where appropriate, a shorter period.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Cash and cash equivalents, trade receivables and other debtors are classified as loans and
receivables. Loans and receivables are measured subsequent to initial recognition at amortised cost using the
effective interest method, less provision for impairment. Any change in their value through impairment or reversal
of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect
all amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is
determined as the difference between the asset's carrying amount and the present value of estimated future
cash flows.
33
A financial asset is derecognised only where the contractual rights to the cash flows from the asset expire or the
financial asset is transferred and that transfer qualifies for derecognition.
Cash and cash equivalents
For the purpose of the consolidated Cash Flow Statement, cash and cash equivalents consist of cash and cash
equivalents as defined above.
Financial liabilities
Strategic Review
Cash and cash equivalents comprise cash in hand and on demand deposits together with other short-term highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value.
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes
a party to the contractual provisions of the instrument. The Group currently has no liabilities categorised as FVTPL.
All other financial liabilities (for example, trade payables) are recorded initially at fair value, net of direct issue costs
and are recorded at amortised cost using the effective interest method, with interest-related charges recognised as
an expense in finance cost in the Income Statement.
Finance charges, including premiums payable on settlement or redemption and direct issue costs, are charged to the
Income Statement on an accruals basis using the effective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they arise. A financial liability is derecognised only
when the obligation is extinguished, that is, when the obligation is discharged, cancelled or expires.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into.
A financial liability exists where there is a contractual obligation to deliver cash or another financial asset to another
entity, or to exchange financial assets or financial liabilities under potentially unfavourable conditions. In addition
contracts which result in the entity delivering a variable number of its own equity instruments are financial liabilities.
Shares containing such obligations are classified as financial liabilities.
Governance
Financial instruments
Classification as equity or financial liability
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. Dividends and distributions relating to equity instruments are debited direct to equity.
Inventories
Inventories are stated at the lower of cost and net realisable value, after making due allowance for obsolete and
slow moving items. Costs include all purchased costs incurred in bringing each product to its present locations
and condition on a first-in, first-out basis.
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted and is recognised as an expense over the vesting period, which ends on the date on which the relevant
employees become fully entitled to the award. Fair value is determined using a Trinomial valuation model. In valuing
equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of
the shares of the Company (market conditions).
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Estimates are subsequently
revised if there is any indication that the number of share options expected to vest differs from previous estimates.
Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised are different to that estimated on vesting.
All equity-settled share-based payments are ultimately recognised as an expense in the Group Income Statement
with a corresponding credit to "other reserve".
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share
capital and, where appropriate, share premium.
Upon forfeiture of share options the cumulative income statement charge previously recognised is credited to reserves.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
Share-based payments
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the leased asset. The related asset is recognised
at the time of inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum
lease payments plus incidental payments, if any, to be borne by the lessee. A corresponding amount is recognised as
a finance leasing liability.
The interest element of leasing payments represents a constant proportion of the capital balance outstanding and
is charged to the income statement over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the income
statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.
Equity
Equity comprises the following:
• "Share capital" represents the nominal value of equity shares;
• "Share premium" represents the excess over nominal value of the fair value of consideration received for equity
shares, net of expenses of share issues;
• "Other reserve" represents equity-settled share-based employee remuneration until such share options
are exercised;
• "Merger reserve” arose on the acquisition of PI Bioscience Limited under previous GAAP; and
• “Retained losses” represent cumulative retained profits/(losses).
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 2, the Directors are required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and future periods.
Critical accounting judgements in applying accounting policies
The following are the critical judgements, apart from those involving estimations, that the Directors have made in the
process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised
in the financial statements.
Research and development activities
Management has reviewed the Group’s R&D activities and has made judgements on the amount of development
expenditure it is appropriate to capitalise. The criteria which management has to make judgements about are set
out in note 2, in particular that certain products are technically and commercially viable.
Key sources of estimation uncertainty
Impairment of goodwill and development costs
Determining whether goodwill and development costs are impaired requires an estimation of the value in use.
The value in use calculation requires the Directors’ to estimate the future cash flows expected to arise and
a suitable discount rate in order to calculate present value.
Details of the impairment estimation are provided in note 14.
Share-based payments
Details of share-based payments estimation are provided in note 2.
35
4. STANDARDS AND INTERPRETATIONS IN ISSUE NOT YET ADOPTED
At the date of authorisation of these consolidated financial statements, certain new standards, amendments and
interpretations to existing standards have been published but are not yet effective, and have not been adopted early
by the Group.
New standards and interpretations currently in issue but not effective are:
Governance
• IFRS 9 Financial Instruments (effective 1 January 2015)
• IFRS 10 and IAS 28 Sales or Contribution of Assets between an Investor and its Associate or Joint Venture
(effective 1 January 2016)
• IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (effective 1 January 2016)
• IFRS 14 Regulatory Deferral Accounts (effective 1 January 2016)
• IFRS 15 Revenue from Contracts with Customers (effective 1 January 2017)
• IAS 16 and IAS 41 Agriculture: Bearer Plants (effective 1 January 2016)
• IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation (effective 1 January 2016)
• IAS 27 Equity Method in Separate Financial Statements (effective 1 January 2016)
Strategic Review
The Directors anticipate that all of the relevant pronouncements will be adopted in the Group’s accounting policies for
the first period beginning after the effective date of the pronouncement. Information on new standards, amendments
and interpretations that are expected to be relevant to the Group's financial statements is provided below. Certain
other new standards and interpretations have been issued but are not expected to have a material impact on the
Group's financial statements.
There is not expected to be any material impact upon adoption of these standards.
5. SEGMENT INFORMATION
The Group’s operating segments have been identified based on internal management reporting information that
is regularly reviewed by the chief operating decision maker as set out in note 2.
All of the results for the year ending 31 July 2014 related to Crop Nutrients, other than £21k of costs relating
to Pest Control.
The Group further monitors its business based on geography. These operating segments are monitored and
strategic decisions are made on the basis of the segment results for the year ended 31 July 2014, which are
as follows:
Europe
£000
Middle East
£000
Rest of world
£000
Total
£000
1,507
789
205
–
2,501
466
(360)
102
–
208
Other costs not allocated
–
–
–
–
(941)
Depreciation and amortisation
–
(85)
–
–
(85)
Other non-cash movements*
–
–
–
–
(38)
Segment revenue from external customers
Operating profit/(loss)
Total operating loss
(856)
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
Americas
£000
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
5. SEGMENT INFORMATION CONTINUED
The segment results for the 16 months ended 31 July 2013 are as follows:
Americas
£000
Europe
£000
Middle East
£000
Rest of world
£000
Total
£000
Segment revenue from external customers
459
621
434
87
1,601
Operating profit/(loss)
231
(733)
180
63
(259)
Other costs not allocated
–
–
–
–
(1,024)
Depreciation and amortisation
–
(93)
–
–
(93)
Other non-cash movements*
–
–
–
–
(186)
Interest payable
–
–
–
–
(238)
Total operating loss
(1,803)
* Other non-cash movements represent share-based payments.
All R&D is incurred in the UK.
Customers that constituted in excess of 10% of Groups revenues are:
Customer A and Customer B from the Crop Nutrients segment, being £1,450k and £157k respectively (2013: £415k and
£555k respectively).
6. OPERATING LOSS
The operating loss for the year is stated after charging/(crediting):
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
Auditors’ remuneration (note 10)
44
47
Depreciation and amortisation (notes 14 and 15)
85
93
43
54
126
(26)
38
186
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
231
345
231
345
Operating lease rentals:
Land and buildings
Foreign exchange differences
Share-based payments (note 22)
7. STAFF COSTS
The total amounts for Directors’ remuneration and other benefits are as follows:
Directors’ remuneration
Aggregate emoluments
37
Highest paid Director
The above includes remuneration of the highest paid Director as follows:
16 months
ended
31 July 2013
£000
174
229
Individual Director remuneration details are contained in the Directors’ Remuneration Report on page 22.
The total employment cost during the period was as follows:
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
1,080
934
21
18
119
69
1,220
1,021
Year ended
31 July 2014
Number
16 months
ended
31 July 2013
Number
Administration
2
1
Management
1
2
Research and development
3
3
Production
0
0
Sales and technical
8
4
14
10
Wages and salaries
Pension
Social security costs
Strategic Review
Aggregate emoluments
Year ended
31 July 2014
£000
Included in the above employment cost is £150k (2013: £319k) relating to R&D costs.
8. FINANCE INCOME
Bank interest receivable
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
3
1
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
–
61
9. FINANCE COST
Loan interest payable
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
As at 31 July 2014, the Group employed 14 full-time staff (2013: 10 employees). From time to time, the Group
supplements key roles and organisational functions with third parties, contractors and outsourced service providers.
The Group’s full-time-equivalent workforce at 31 July 2014 was 17.
Governance
The average number of employees during the period was:
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
10. AUDITORS’ REMUNERATION
Fees payable to Baker Tilly UK Audit LLP for the audit of parent
and Group financial statements
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
22
10
15
15
7
7
44
32
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
Other fees to Baker Tilly UK Audit LLP:
The audit of the Group’s subsidiaries pursuant to legislation
Tax compliance
11. INCOME TAX CREDIT
Recognised in the Group Income Statement
Current tax credit
Current tax
Adjustments for prior years
Total tax in Group Income Statement
(116)
(136)
(69)
6
(185)
(130)
Reconciliation of effective tax rate
Year ended
31 July 2014
£000
16 months
ended
31 July 2013
£000
Loss before tax
(853)
(1,863)
Loss before tax multiplied by rate of corporation tax in the UK of 22.3% (2013: 24%)
(190)
(447)
Non-deductible expenses
7
38
Accelerated capital allowances
–
(8)
(131)
(163)
Losses not recognised for tax purposes
263
432
Other temporary differences
(66)
12
UK corporation tax re earlier years
(68)
6
(185)
(130)
Enhanced R&D tax relief
Total tax in Group Income Statement
Unrelieved tax losses of £9,703k (2013: £8,800k) remain available to offset against future taxable trading profits.
39
12. DEFERRED INCOME TAX
No provision has been made for deferred income tax on losses carried forward as they will only be available for offset
when the Group makes taxable profits arising from the same trade. As the availability of future profits is uncertain, it
has been assumed that the losses will not be recoverable in the foreseeable future.
Year ended
31 July 2014
£000
Accelerated capital allowances
Temporary differences relating to share-based payments
Temporary differences relating to capitalisation of R&D
Tax losses
16 months
ended
31 July 2013
£000
(14)
(8)
54
–
(239)
(208)
1,755
2,032
1,556
1,816
Strategic Review
Deferred income tax assets which have not been recognised comprise of the following amounts:
All amounts are calculated at 22.3% (2013: 24%) using the balance sheet liability method.
13. LOSS PER ORDINARY SHARE
Year ended
31 July 2014
16 months ended
31 July 2013
Governance
The loss per ordinary share is based on the loss after taxation of £668k (2013: £1,733k) and 64,896,513
(2013: 55,964,477) ordinary shares of 1 pence each, being the weighted average number of shares in issue
during the period.
(£668,000) (£1,733,000)
Loss for the period attributable to equity shareholders
Weighted average number of ordinary shares in issue
Basic and diluted loss per share
64,896,513
55,964,447
(1p)
(3p)
The share options in issue are anti-dilutive in respect of the basic loss per share calculation and have therefore not
been included.
14. INTANGIBLE ASSETS
Development
costs
£000
Total
£000
585
987
1,572
Additions in the year
–
380
380
Cost at 31 July 2014
585
1,367
1,952
Accumulated amortisation at 1 August 2013
–
118
118
Charge in the year
–
52
52
Accumulated amortisation at 1 August 2014
–
170
170
Net book value at 31 July 2014
585
1,197
1,782
Net book value at 31 July 2013
585
869
1,454
Cost at 1 August 2013
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
Goodwill
£000
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
14. INTANGIBLE ASSETS CONTINUED
Goodwill
Goodwill is allocated to the Pest Control cash-generating unit and is not amortised but tested annually for impairment.
To the extent that the carrying value exceeds the value in use, determined from estimated discounted future cash
flows, goodwill is written down to the value in use and an impairment charge is recognised.
Capitalised development costs
The Group currently has internally generated intangible assets from the development of its Crop Nutrient and Pest
Control products. All other development work has been written off as incurred where the criteria for recognition as
an asset are not met.
Capitalised development costs are being amortised over a period of 20 years. The balance at 31 July 2014 is being
amortised in full over 20 years which is considered by management to be representative of the useful economic life
of Crop Nutrient and Pest Control products.
Impairment review
During the year, goodwill and development costs for Crop Nutrient and Pest Control segments were tested for
impairment in accordance with IAS 36 Impairment of Assets. The recoverable amount exceeded the carrying amount
of goodwill recorded. The recoverable amount has been measured on a value in use calculation.
Key assumptions
Crop Nutrients
The Group has a number of commercially available products and continues to generate new products and new product
use from its current technologies. These products are currently generating commercial revenues in Europe, the
Americas, the Middle East and Africa.
The impairment review for Crop Nutrient products includes management’s development, review and sensitivity
analysis of a financial forecast for the products and technologies which comprise the segment. This forecast includes
a country-by-country review which details:
•
•
•
•
key crops;
the number of hectares and actual addressable market;
Plant Impact products available for sale or planned for commercialisation and their applicability to that market; and
the potential route to market and necessary distribution discounts.
Pest Control
The Group has invested considerable historical development expense and maintains intellectual property rights over
a number of patents for TGT-101 (formerly referred to as “BugOil”), an effective, low-residue insecticide used for the
treatment of mites, whitefly and aphids on commercially important crops such as vegetables, almonds and apples.
Arysta has licensed TGT-101 in the European Union and selected Eastern European countries, in Africa and several
countries of the Middle East as well as in Mexico, Japan and South Korea. Plant Impact maintains all other global
commercial rights to the product and commercial freedom to operate in other markets such as the United States,
South America, Asia (including China, India and Southeast Asia) and Australasia.
The Group received its first global registration for the product in the United States in April 2012. Since then, the
Group has conducted some additional field studies to confirm the product’s technical efficacy and develop data
to be used for marketing purposes and for securing a registration in California. The Group filed the registration
in California on 28 May 2014.
The Group pursues these registrations, including the intention to further register TGT-101 in other US States, with
the intent of commercialising TGT-101 under a to-be-announced trade name. Relative to the above commercial and
development strategy, the impairment review for Pest Control includes management’s development, review and
sensitivity analysis of a financial forecast for the Group’s direct sales of TGT-101 as well as potential royalties
from Arysta.
41
Specifically, the Group has forecast:
A period of ten years has been selected for cash flow estimates for both the Crop Nutrient and Pest Control segments.
This is greater than the IAS 36 requirement of five years; however, this is due to the long product lifecycles in
agriculture. Management believes that the forecasts developed were and are conservative.
A pre-tax discount rate of 16% was used for the value in use calculation. This discount rate is based on industry
standards in the agrochemical sector.
Strategic Review
• a revenue, margin and cost projection taking into account Plant Impact’s ability to commercialise the product
via direct access to agrochemical distributors in California and other US states; and
• royalties and milestone payments from Arysta taking into account the regulatory timeframes and forecasts
of Arysta sales in markets where Arysta retains distribution rights to the product.
The Directors believe that there have been no significant changes to the situation involving TGT-101, and therefore
there is no basis for impairment.
15. PROPERTY, PLANT AND EQUIPMENT
Total
£000
150
166
316
Additions
19
39
58
Disposals
(80)
–
(80)
Cost on 31 July 2014
89
205
294
126
6
132
Additions
15
18
33
Disposals
(80)
–
(80)
Accumulated depreciation on 31 July 2014
61
24
85
Net book value at 31 July 2014
28
181
209
Net book value at 31 July 2013
24
160
184
31 July 2014
£000
31 July 2013
£000
Raw materials
12
1
Finished goods
6
3
18
4
Cost on 1 August 2013
Accumulated depreciation on 1 August 2013
16. INVENTORIES
All inventories held at the year-end are expected to be realised within one year.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
Leasehold
costs
£000
Governance
Laboratory
and office
equipment
£000
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
17. TRADE AND OTHER RECEIVABLES
31 July 2014
£000
31 July 2013
£000
Trade receivables
355
288
Other receivables
74
12
114
89
543
389
Prepayments and accrued income
The average credit period on the sale of goods is 54 days (2013: 33 days). No interest is charged on trade receivables.
The Group has provided for all specific doubtful debts.
All trade and other receivables fall due within one year.
Before accepting a new customer, the Group uses an external credit agency to assess the potential customer’s credit
quality and seek trade references. Once accepted as an approved customer any outstanding debt is reviewed before
approval of new sales orders.
The ageing of trade receivables was as follows:
Neither past due nor impaired
31 July 2014
£000
31 July 2013
£000
276
288
79
–
355
288
Past due but not impaired
91–120 days past due
Of the trade receivables 78% (2013: 100%) are neither past due nor impaired. Of the above balance £nil (2013: £nil)
is included in the allowance for doubtful debts.
An analysis of trade and other receivables by currency is as follows:
31 July 2014
£000
31 July 2013
£000
276
139
7
72
260
178
543
389
31 July 2014
£000
31 July 2013
£000
Balance brought forward
–
9
Utilised
–
(9)
Balance carried forward
–
–
US Dollar
Euro
Sterling
Movement in the allowance for doubtful debts:
In determining the recoverability of trade receivables, the Group considers any change in the credit quality of
the trade receivables from the date credit was approved to the reporting date. The Group has no significant
concentration of credit risk, with exposure spread amongst several customers.
There has been a reduction in the concentrations of credit risk on the last financial year due to a focus on key
customers in lower risk markets. Accordingly, the Directors believe that there is no further credit provision
required in excess of the allowance for doubtful debts.
43
Corporation tax receivable
Corporation tax receivable of £117k (2013: £136k) relates to the R&D tax credits for the financial period 2014.
18. CASH AND CASH EQUIVALENTS
31 July 2013
£000
516
1,266
Cash at bank earns interest at floating rates on daily bank deposits.
19. BORROWINGS
Strategic Review
Cash at bank and in hand
31 July 2014
£000
The Group has an invoice financing facility provided by HSBC. At 31 July 2014 there was £57k of cash drawn down
with recourse (2013: £nil).
20. LIABILITIES
31 July 2014
£000
31 July 2013
£000
712
421
77
70
233
206
1,022
697
Number
Nominal Value
£
64,896,513
648,965
Current
Trade payables
Other taxation and social security
Total liabilities
Governance
Accruals and deferred income
21. SHARE CAPITAL
Issued share capital
As at 31 July 2013 and 31 July 2014
There were no shares issued in the year.
22. SHARE-BASED PAYMENTS
Details of the share options outstanding during the period are as follows:
2014
2013
Number of
share options
Weighted
average
exercise price
£
Number of
share options
Weighted
average
exercise price
£
Outstanding at 31 July
5,330,540
0.22
3,175,826
0.25
Granted during the period
1,200,000
0.13
3,377,100
0.20
–
–
–
–
(483,000)
0.18
(1,222,386)
0.29
6,047,540
0.20
5,330,540
0.22
Exercised during the period
Forfeited during the period
Outstanding at 31 July
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
The Company has a share option scheme for all employees of the Group. Options are exercisable at a price equal to the
average quoted market price of the Company's shares on the date of grant. The vesting period is between one and
three years. If the options remain unexercised after a period of ten years from the date of grant the options expire.
Options are forfeited if the employee leaves the Group before the options vest.
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
22. SHARE-BASED PAYMENTS CONTINUED
The weighted average remaining contractual life for the share options outstanding as at 31 July 2014 is eight years
(2013: eight years).
As at 31 July 2014, 3,566,839 share options were capable of being exercised (2013: 1,955,806) with a weighted average
exercise price of 24 pence (2013: 25 pence).
The Group uses the Trinomial model to fair value the Group’s share options which resulted in a fair value charge
of £75k (2013: £186k) and a corresponding credit to other reserves.
During the year ended 31 July 2014, 483,000 share options were forfeited and no share options were exercised;
as a result there has been a reserves transfer of £37k.
Assumptions
The following assumptions are used to determine the fair value of share options at the respective date of grant:
Exercise price
(pence)
Ordinary
shares
under option
Share price at
date of grant
(pence)
Expected
volatility
Interest rate
Life of option
(years)
Expected
dividend
10 Nov 2005
29.5
90,440
30.0
50%
4.35%
10
Nil
21 Sep 2009
26.8
8,000
26.8
50%
1.38%
10
Nil
4 Aug 2010
1.0
200,000
16.0
50%
3.45%
10
Nil
4 Aug 2010
18.3
150,000
16.0
50%
3.45%
10
Nil
31 Jan 2011
1.0
130,000
26.0
50%
3.45%
10
Nil
28 Aug 2011
25.5
1,375,000
24.2
50%
3.75%
10
Nil
1 Aug 2012
24.3
2,822,100
12.5
50%
3.75%
10
Nil
13 Sep 2012
13.2
130,000
13.2
50%
3.75%
10
Nil
12 Dec 2012
14.2
50,000
13.2
50%
3.75%
10
Nil
1 Feb 2013
13.3
100,000
13.3
50%
3.75%
10
Nil
22 Apr 2013
12.7
100,000
12.7
50%
3.75%
10
Nil
4 May 2013
12.8
175,000
12.8
50%
3.75%
10
Nil
15 Jan 2014
12.8
1,000,000
12.8
50%
3.75%
10
Nil
24 Feb 2014
15.5
200,000
15.5
50%
3.75%
10
Nil
Date of grant
The expected volatility for share options granted between 10 November 2005 and 28 July 2008 has been estimated by
reference to historic volatility of a sample of comparable companies, given the lack of share price trading history for
the Company during that time. Subsequently, the expected volatility for share options granted since 7 August 2009 has
been estimated with reference to Plant Impact share price trading history. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions,
and behavioural considerations.
National Insurance is payable by employees on gains made by them on exercise of share options granted to them.
23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise cash and cash equivalents, receivables and payables arising
in the normal course of business. These are used to finance the Group’s operations and hence safeguarding them is
regarded as a top priority. The Group’s objective in using financial instruments is to maximise the returns on funds
held consistent with this priority.
It is, and has been throughout the period, the Group’s policy that no speculative trading in financial instruments
or derivatives is undertaken.
45
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency
exchange risk, credit risk and market risk. The Board of Directors reviews and agrees policies for managing each
of these risks which are summarised below:
Interest rate risk
No interest rate hedging agreement is currently in place because given the level of borrowings and the current interest
rate environment the Board does not consider fluctuations in interest rates to pose a significant risk to
the Group.
Strategic Review
The Group is principally funded with equity. The Group invests its short-term bank treasury deposits. Therefore
exposure to interest rate movements is minimal although movements in interest rates over time will affect the Group’s
interest income.
Liquidity risk
The Group has managed its cash in a manner designed to ensure maximum benefit is gained, while ensuring
security of investment sources. The Group’s policy on investment of surplus funds limits the placing of deposits
to institutions with strong credit ratings.
The Group manages liquidity risk by continually monitoring forecast and actual cash flows. In addition, the Group
has entered into an invoice financing facility with HSBC and can draw down up to 80% of each invoice (64% is subject
to a concentration limit) in shipment.
Management monitors forecasts of the Group’s liquidity on a monthly basis and has access to funds at short notice
so that it is always able to meet its financial liabilities as and when they fall due.
Governance
All financial liabilities (2014: £1,079k; 2013 £697k) are due within six months.
The Group has no derivative financial liabilities.
Foreign currency exchange risk
The Group undertakes certain transactions denominated in foreign currencies. Hence, exchange rate fluctuations
arise. The Group’s foreign currency exchange exposure is mainly with regards to trade receivables. The carrying
amounts of the Group’s foreign currency denominated trade receivables are detailed in note 17. During the year
the strengthening of GBP caused foreign exchange losses of £126k.
The exposure of trade receivables to foreign exchange fluctuations is not reduced, as all relevant invoices are factored.
Up to 80% of the value of the invoice can be drawn down during the week that the invoice was raised. If exchange rates
are volatile, the Group has the option of converting all receipts to GBP at the earliest opportunity.
Credit risk
The Group’s credit risk is primarily attributable to its trade receivables. Plant Impact plc has entered into an invoice
finance arrangement with HSBC, who have assumed credit risk to the extent of 80% of any outstanding balance with a
customer, 64% if they are subject to a concentration limit. Trade receivables are therefore derecognised to the extent
that credit risk is transferred upon draw down of invoice finance funds. The amounts presented in the balance sheet
are net of allowances for doubtful debts, estimated by the Group’s management based on prior experience.
An allowance for impairment is made where there is an identified loss event which, based on previous experience,
is evidence of a reduction in the recoverability of the cash flows.
Note 17 sets out the impairment provision for credit losses on trade receivables and the ageing analysis of overdue
trade receivables. There are no impairment losses recognised on other financial assets.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
The Group’s financial assets are cash and cash equivalents, trade and other receivables. The credit risk on cash and
cash equivalents is limited because the counterparties are banks with high credit ratings.
Financials
Statements
Financial Statements
THEGROUP
GROUP
NOTES TO THE
FINANCIALSTATEMENTS
STATEMENTS
FINANCIAL
CONTINUED
CONTINUED
24. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders. The Group’s overall strategy remains unchanged from the prior year to
minimise costs and liquidity risk.
The capital structure of the Group consists of cash and cash equivalents (note 18) and equity attributable to equity
holders of the parent (Group Statement of Changes in Equity), comprising issued capital and reserves.
There are no externally imposed capital requirements.
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure the Group may
in future adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell
assets and reduce debt.
Categories of financial instruments
2014
£000
2013
£000
1,237
1,554
1,002
697
Financial assets
Loans and receivables (including cash and cash equivalents)
Financial liabilities
Amortised cost
The carrying amount reflected above represents the Group’s maximum exposure to credit risk and is equal to
fair value.
25. COMMITMENTS AND CONTINGENCIES
The Group has entered into commercial leases on its premises. The future aggregate minimum lease payments are:
2014
£000
2013
£000
48
41
Between two and five years
164
162
In more than five years
121
162
333
365
2014
£000
2013
£000
315
454
45
215
360
669
Within one year
Operating lease expenditure is charged to the Group Income Statement.
26. KEY MANAGEMENT COMPENSATION
Key management compensation (including Directors) is as follows:
Short-term employee benefits
Share-based payments
27. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.
47
COMPANY BALANCESHEET
SHEET
As at 31 July 2014
Note
31 July 2014
£000
31 July 2013
£000
5
1,633
1,505
6
6
7
167
–
–
400
173
407
(88)
(91)
85
316
1,718
1,821
–
–
1,718
1,821
Fixed assets
Investments
Debtors due within one year
Debtors due after one year
Cash at bank and in hand
Creditors: amounts falling due within one year
7
Net current assets
Total assets less current liabilities
Net assets
Governance
Creditors: amounts falling due after more than one year
Strategic Review
Current assets
Capital and reserves
8
649
649
Share premium account
9
14,343
14,343
Other reserve
10
404
366
Merger relief reserve
11
287
287
Profit and loss account
12
(13,965)
(13,824)
Shareholders’ funds
13
1,718
1,821
The financial statements were approved and authorised for issue by the Board of Directors on 24 October 2014 and
were signed on its behalf by:
D Jones
Chairman
Plant Impact plc
Company number: 5442961
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
Called up share capital
Financials
Statements
Financial Statements
NOTES TO THE
THECOMPANY
COMPANY
BALANCESHEET
SHEET
1. PRINCIPAL ACTIVITY
The principal activity of the Company is an investment holding company.
2. PRINCIPAL ACCOUNTING POLICIES – UK GAAP
Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with the
Companies Act 2006 and applicable UK accounting standards (United Kingdom Generally Accepted Accounting
Practice). The consolidated financial statements are prepared for the Group. These financial statements therefore
present information about the Company and not about the Group.
The Company’s accounting policies are unchanged compared with the prior year and are set out below:
Cash
Cash comprises cash in hand and demand deposits together with short-term highly liquid investments that are
readily convertible into known amounts of cash.
Investments
Investments are stated at cost, less amounts provided for permanent diminution in value.
Taxation
The current tax charge is based on the result for the period and is measured at the amounts to be paid based on
the tax rates and laws substantively enacted by the balance sheet date. Current and deferred tax are recognised
in the profit and loss account.
Deferred taxation
Deferred tax is recognised on all timing differences where the transactions or events that give the Company an
obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet date.
Deferred tax assets are recognised when it is more likely than not that they will be recovered. Deferred tax is
measured using rates of tax that have been enacted or substantively enacted by the balance sheet date.
Share-based payments
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at
which they are granted and is recognised as an expense over the vesting period, which ends on the date on which
the relevant employees become fully entitled to the award. Fair value is determined using the Trinomial valuation
model. In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions
linked to the price of the shares of the Company (market conditions).
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based
on the best available estimate of the number of share options expected to vest.
Estimates are subsequently revised if there is any indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are
different to that estimated on vesting.
All equity-settled share-based payments are ultimately recognised as an expense in the Company profit and
loss account with a corresponding credit to "other reserve".
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital
and, where appropriate, share premium. Upon forfeiture of share options the cumulative income statement charge is
credited to reserves.
The share-based charges are recognised within the financial statements of the subsidiary company, PI Bioscience
Limited, with corresponding increases in equity, as the services provided by the employees and Directors were in
respect of this subsidiary. The Company is deemed to receive additional benefit from its investment in the subsidiary
that is receiving the employees’ services. On this basis, the Company has capitalised the share-based payment cost
as an increase to its fixed asset investment in PI Bioscience Limited (see note 5).
49
3. DIRECTORS’ REMUNERATION
The total amounts for Directors’ remuneration and other benefits are as follows:
31 July 2013
£000
231
345
31 July 2014
£000
31 July 2013
£000
174
46
Directors’ remuneration
Aggregate emoluments
Highest paid Director
The above includes remuneration of the highest paid Director as follows:
Aggregate emoluments
Strategic Review
31 July 2014
£000
4. SHARE-BASED PAYMENTS
The Company has a share option scheme for all employees of the Group. Options are exercisable at a price equal to the
average quoted market price of the Company's shares on the date of grant. The vesting period is between one and
three years. If the options remain unexercised after a period of ten years from the date of grant the options expire.
Options are forfeited if the employee leaves the Group before the options vest.
2014
2013
Number of
share options
Weighted
average
exercise price
£
Number of
share options
Weighted
average
exercise price
£
Outstanding at 31 July
5,330,540
0.22
3,175,826
0.25
Granted during the period
1,200,000
0.13
3,377,100
0.20
–
–
–
–
(483,000)
0.18
(1,222,386)
0.29
6,047,540
0.20
5,330,540
0.22
Exercised during the period
Forfeited during the period
Outstanding at 31 July
As at 31 July 2014, 3,566,839 share options were capable of being exercised (2013: 1,955,806) with a weighted
average exercise price of 24 pence (2013: 25 pence).
The Group uses the Trinomial model to fair value the Group’s share options which resulted in a fair value charge
of £75k (2013: £186k) and a corresponding credit to other reserves.
During the year ended 31 July 2014, 483,000 share options were forfeited and no share options were exercised;
as a result there has been a reserves transfer of £37k.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
The weighted average remaining contractual life for the share options outstanding as at 31 July 2014 is eight
years (2013: eight years).
Governance
Details of the share options outstanding during the period are as follows:
Financials
Statements
Financial Statements
THECOMPANY
COMPANY
NOTES TO THE
BALANCESHEET
SHEET
BALANCE
CONTINUED
CONTINUED
4. SHARE-BASED PAYMENTS CONTINUED
Assumptions
The following assumptions are used to determine the fair value of share options at the respective date of grant:
Exercise price
(pence)
Ordinary shares
under option
Share price at
date of grant
(pence)
Expected
volatility
Interest rate
Life of option
(years)
Expected
dividend
10 Nov 2005
29.5
90,440
30.0
50%
4.35%
10
Nil
21 Sep 2009
26.8
8,000
26.8
50%
1.38%
10
Nil
4 Aug 2010
1.0
200,000
16.0
50%
3.45%
10
Nil
4 Aug 2010
18.3
150,000
16.0
50%
3.45%
10
Nil
31 Jan 2011
1.0
130,000
26.0
50%
3.45%
10
Nil
28 Aug 2011
25.5
1,375,000
24.2
50%
3.75%
10
Nil
1 Aug 2012
24.3
2,822,100
12.5
50%
3.75%
10
Nil
13 Sep 2012
13.2
130,000
13.2
50%
3.75%
10
Nil
12 Dec 2012
14.2
50,000
13.2
50%
3.75%
10
Nil
1 Feb 2013
13.3
100,000
13.3
50%
3.75%
10
Nil
22 Apr 2013
12.7
100,000
12.7
50%
3.75%
10
Nil
4 May 2013
12.8
175,000
12.8
50%
3.75%
10
Nil
15 Jan 2014
12.8
1,000,000
12.8
50%
3.75%
10
Nil
24 Feb 2014
15.5
200,000
15.5
50%
3.75%
10
Nil
Date of grant
The expected volatility for share options granted between 10 November 2005 and 28 July 2008 has been estimated by
reference to historic volatility of a sample of comparable companies, given the lack of share price trading history for
the Company during that time. Subsequently, the expected volatility for share options granted since 7 August 2009 has
been estimated with reference to Plant Impact share price trading history. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions,
and behavioural considerations.
National Insurance is payable by employees on gains made by them on exercise of share options granted to them.
5. INVESTMENTS
The Company has the following investments in subsidiary undertakings:
Total
£000
Cost or valuation:
At 31 July 2013
1,505
Capital increase in Brazil
90
Share-based payment (note 4)
38
At 31 July 2014
1,633
Net book value:
At 31 July 2014
1,633
At 31 July 2013
1,505
51
Trading activity
Class of share capital
Registered and operated in
Bio Futures PI Limited
Dormant
Ordinary and preference
England and Wales
100
PI Bioscience Limited
Chemical manufacturers
Ordinary
England and Wales
100
Plant Impact Inc.
Non-trading
Ordinary
United States
100
Plant Impact Tecnologia
em Nutrição Ltda
Consultancy services –
nutrition technology
Ordinary
Brazil
100
Strategic Review
Subsidiary undertaking
Held by
Company
%
6. DEBTORS
31 July 2014
£000
31 July 2013
£000
167
–
Prepayments and accrued income
4
7
VAT receivable
2
–
173
7
31 July 2014
£000
31 July 2013
£000
Trade creditors
26
33
Accruals
62
58
88
91
2014
2013
Number
Nominal value
£
Number
Nominal value
£
64,896,513
648,965
50,444,639
504,446
Shares issued – 13 December 2012
–
–
8,964,283
89,643
Shares issued – 11 January 2013
–
–
1,852,591
18,526
Shares issued – 26 July 2013
–
–
3,635,000
36,350
64,896,513
648,965
64,896,513
648,965
Amounts owed by Group undertakings
Amounts owed by Group undertakings all fall due after more than one year.
Governance
7. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
8. CALLED UP SHARE CAPITAL
Issued share capital
As at 31 July
Issue of shares
There were no shares issued during the year.
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Financial Statements
As at 1August/1 April
Financials
Statements
Financial Statements
THECOMPANY
COMPANY
NOTES TO THE
BALANCESHEET
SHEET
BALANCE
CONTINUED
CONTINUED
9. SHARE PREMIUM ACCOUNT
31 July 2014
£000
31 July 2013
£000
14,343
12,260
–
2,083
14,343
14,343
31 July 2014
£000
31 July 2013
£000
As at 1 August/1 April
366
290
Forfeited share-based payments
(37)
(109)
Share-based payments to Directors
41
197
Share-based payments to employees
34
(12)
404
366
31 July 2014
£000
31 July 2013
£000
287
287
As at 1 April/31 July
Shares issued during the period
As at 31 July
10. OTHER RESERVE
As at 31 July
11. MERGER RELIEF RESERVE
As at 31 July
The merger relief reserve represents the premium on shares issued arising from the acquisition of
PI Bioscience Limited.
12. PROFIT AND LOSS ACCOUNT
The Company has taken advantage of section 408 of the Companies Act 2006 and has not included its own profit
and loss account in these financial statements. The parent company’s loss for the year was £141k (2013: £2,354k).
31 July 2014
£000
As at 1 August/1 April
Loss for the financial period
Forfeited share-based payments
As at 31 July
31 July 2013
£000
(13,824)
(11,579)
(141)
(2,354)
–
109
(13,965)
(13,824)
53
13. SHAREHOLDERS’ FUNDS
31 July 2014
£000
31 July 2013
£000
(2,354)
38
186
–
2,227
(103)
59
Shareholders’ funds at 1 August/1 April
1,821
1,762
Shareholders’ funds at 31 July
1,718
1,821
Share-based payments
Shares issued in the period
Increase/(decrease) in shareholders’ funds
Strategic Review
(141)
Loss for the financial period
14. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption in FRS 8 in respect of transactions and balances with other wholly
owned group undertakings.
There are no related party transactions with Group undertakings to disclose in accordance with the requirements
of FRS 8 Related Party Disclosures. All inter-Group balances outstanding have been disclosed within note 6 to
the Company financial statements.
Governance
Financial Statements
Plant Impact Annual Report 2014
Plant Impact Annual Report 2014
Einfo@plantimpact.com
T +44 (0) 1582 465 540
Plant Impact Plc
Rothamsted
West Common
Harpenden
Hertfordshire
AL5 2JQ