Plant Health Regulatory News (PHC)

For immediate release 27 February 2012

PLANT HEATH CARE PLC

("Plant Heath Care" or the "Company")

Results for the year ended 31 December 2011

Plant Heath Care (AIM: PHC.L), a leading provider of naturally-derived products to the agriculture industry, announces its results for the year ended 31 December 2011.

Highlights:

Ø Revenue of $7.9 million (2010: $7.1 million)

Ø Gross profit of $4.1 million (2010: $3.6 million)

Ø Gross margin of 52% (2010: 51%)

Ø Operating loss (continuing operations) of $7.1 million (2010: loss of $7.9 million)

Ø $2.0 million gain from sale of US retail and landscape business in January 2011

Ø Net loss of $5.1 million (2010: loss of $7.6 million)

Ø Cash and liquid short-term investments at 31 December 2011 of $13.8 million (2010: $13.0 million)

Ø Operating loss (continuing operations) before share-based payments of $6.6 million (2010: $7.4 million)

Ø Strong on-ground sales for Harpin

o US up 40%

o Mexico and South Africa up 50%

Commenting on the results, Chief Executive John Brady said: "With the efficacy of our key technologies now well established, our focus remains on the rapid conversion of our existing partnerships into full commercial agreements and leveraging our constructive discussions with other major agrichemical and seed treatment companies in order to take Plant Health Care into profitability."

For further information please contact:

Notes to editors:

About Plant Health Care plc: Plant Health Care plc ("PHC") is a leading provider of naturally derived products for plants and soil. Established in 1995 in Pittsburgh (Pennsylvania) in the United States, PHC currently has approximately 40 employees and has operations in the United States, Mexico, the United Kingdom, Spain, and the Netherlands.

The Company's ordinary shares have been quoted on the AIM Market of the London Stock Exchange since July 2004 and listed on the Official List of the Channel Islands Stock Exchange ("CISX") since February 2010 (ticker symbol/ mnemonic: PHC).

Plant Health Care plc

("Plant Health Care" or the "Company")

Results for the Year Ended 31 December 2011

Chairman's statement

I am pleased to report Plant Health Care's results for the year ended 31 December 2011.

OVERVIEW

As of 2012, the world's population is estimated to be nearly seven billion, growing at an annual rate of 1.2 per cent. Challenges facing farmers and growers relying on finite land and an increasingly strained supply of water are clear. Meeting these challenges will require a range of initiatives and technologies to enhance the yield of crops, both basic food crops and row crops supporting animal protein production, for the world's rapidly growing middle class.

Plant Health Care has the patented technology and the proven products to help address this economic and societal dilemma. The challenge for the Board and management is to generate shareholder value by successfully bringing these products to market across large agricultural areas by leveraging the existing industry supply chain.

STRATEGY

Our strategy for commercialising our natural platform technologies, Harpin and Myconate, allows Plant Health Care to take advantage of the various routes to market and opportunities for generating revenue and shareholder returns. Our approach has three distinct but complementary strands.

First, we develop and prove the efficacy of our natural technologies. This process begins in the laboratory before moving to greenhouse testing and then our own and independent field trials. This process has been on-going for a number of years, and we have successfully demonstrated to the market the efficacy of Harpin and Myconate across a range of crops and via a number of application methods. Testing continues to extend the scope of our opportunities on further crops and working in conjunction with existing products. As part of proving the product, and as a means of creating market awareness and acceptance, we will, where appropriate, introduce the product through distributors into closely-targeted markets. Use by farmers via this approach is important in order to prove that Harpin and Myconate perform in the field and can generate support from growers. These sales provide short-term revenue but, more importantly, demonstrate to our potential large-scale partners the effectiveness and potential demand for our technologies. This approach resulted in our signing major agreements with INCOTEC and Alexin in 2011.

Second, we develop partnerships with major agrichemical and seed companies and work with them to make sales for crops grown on very large acreage via their established sales channels. We seek to partner with a number of companies, splitting up the rights to the use of our patented technologies (by application method, by crop and by territory) in order to secure the best partners in each situation and also to mitigate the risk of over-dependence on one crop or customer. Partnering with a major company, where our natural technologies are used in combination with their existing offerings, provides these large players with a differentiator for which they can charge a higher price and achieve more profitable sales, whilst offering Plant Health Care access to a market share it could not hope to achieve alone. It is this approach which has led to our current partnerships with Monsanto, Syngenta and others, including those with INCOTEC and Alexin, newly established in 2011.

Whilst the long-term benefits of partnering will prove transformational, it is important to stress that developing successful programmes to the stage of significant sales takes time. The companies with whom we already partner, and those with whom we will partner in the future, rigorously test our technologies, perhaps in combination with their existing products. If there are new combinations or products resulting, they may require expert formulation and then registration, and market launches are progressed cautiously. It is a process which will almost always take two to three years, and in complex cases even longer, but the reward comes in the 'lifetime value' of these partnering relationships which, while time intensive with limited returns in the early years, in the long term will enable us to generate very substantial revenue at high margin for many years ahead.

Finally, we ensure that Plant Health Care is already responding to the needs we expect our customers and partners to have in the years ahead. We are already working to develop future generations of our natural technologies, which deliver more benefit and stronger results. In doing so and building for tomorrow, we are seeking to future proof our platform of natural, yield-enhancing agricultural technologies, whilst also locking in the potential to deliver returns for our shareholders for the long term.

PROGRESS

The year saw significant progress in each of the three key elements of our strategy towards our goal of profitability, as reported in more detail in the Chief Executive's report.

We have seen very significant growth in on-ground, defined as end-user application, sales of Harpin which, in the USA alone, rose approximately 40% in 2011 and, as a result of in-hand distributor orders, we expect 2012 on-ground sales to more than triple 2011 levels. On-ground sales of Harpin have also grown rapidly in Mexico and South Africa as a result of initiatives in those markets. Both countries experienced roughly 50% growth in on-ground sales in 2011, and we expect this to accelerate by 70% in 2012.

As a result of technical collaboration and excellent field trial results, we are well advanced in discussions with a number of major partners with high commercial potential for Plant Health Care, and expect to make a number of announcements of new deals this year.

During the year, we developed six new Harpinproduct candidates, which have exhibited significantly stronger attributes in greenhouse trials than those Harpin products currently in the market. Initial field trials of these product candidates will commence during this year.

We have also benefitted from a sharper focus and additional resources for our core business, following the sale of the US retail and landscape business in January 2011.

FINANCIAL RESULTS

A summary of the financial results for the twelve months to 31 December 2011, with comparatives for the previous financial year, is set out below:

Group sales from continuing operations were $7.9 million (2010: $7.1 million), an increase of 11% compared to the prior year. The increase resulted from higher sales of Harpin products in the USA (excluding Monsanto), Mexico and Europe. US sales from continuing operations fell by 45% to $0.8 million, due to lower sales of Harpin to Monsanto as their inventory stock is being depleted. Sales in Mexico were $3.0 million in 2011, up 25% from the prior year. Europe had sales of $4.0 million in 2011, up 27% from 2010.

The gross profit margin from continuing operations increased to 52% (2010: 51%) as margins remained robust, due to a product mix weighted towards higher margin Harpin products.

Operating expenses were $11.2 million (2010: $11.5 million), a reduction of 3%. Administrative expenses were reduced by 6% during the year and research and development spending increased 4%, consistent with our initiatives to increase product development while reducing corporate overheads.

As a result, the operating loss from continuing operations was $7.1 million (2010: $7.9 million), a 10.4% improvement. Including the $2.0 million gain from the sale of the Group's US retail and landscape business in January 2011, the net loss was $5.1 million (2010: loss of $7.6 million).

As a consequence of strong collections from debtors and the contribution of the $4.25 million proceeds from the sale of the US retail and landscape business, the Group had cash and liquid short-term investments at the year-end of $13.8 million, compared to $13.0 million at 1 January 2011.

THE BOARD

In September, the Board reported, with deep regret, the death of Jeremy Scudamore, a non-executive director of Plant Health Care since October 2008. We would like to take this opportunity, on behalf of the Board, our staff and our shareholders, to recognise Jeremy's significant contribution and unstinting commitment to the Group.

It is the intention of the Board to appoint a new non-executive director in 2012.

NOMINATED ADVISER / STOCKBROKER

On 27 February 2012, Plant Health Care expects to announce the appointment of a new nominated adviser and stockbroker to the Company.

OUTLOOK

With the efficacy of Harpin and Myconate now well established, we are currently focusing on bringing the partnerships we have already secured to full commercial roll-out and sales, and on securing further partnering relationships with major agrichemical and seed treatment companies throughout the world. A number of negotiations were brought to conclusion in 2011, but many others continue into 2012. We are optimistic that these negotiations will produce new partnering agreements within the current year.

We prudently cut spending on corporate overheads in 2011 for the second straight year and will maintain strict cost control in 2012. At the same time, we will increase spending on developing new Harpin products and new formulations for Harpin and Myconate. This is a key facet of our corporate strategy and one which we expect to ultimately achieve a very high return on investment. We ended the year with $13.8 million of cash and liquid short-term investments, which provide us with adequate resources to pursue our strategy on our existing products through to profitability, whilst increasing research and development spend on our next generation products.

I would like to thank my fellow directors, our shareholders and our employees for their contributions in the past year and encourage everyone to have high expectations for the success of your Company.

Dr. Dominik Koechlin

Chairman

24 February 2012

Chief Executive's report

INTRODUCTION

As indicated in the Chairman's statement, 2011 saw good progress in the execution of our strategy.

One important step has been the significant reduction in the Harpin inventory held by Monsanto, as a result of its agreement with Direct Enterprises, Inc. ("DEI") in February 2011. Based on DEI's sales projections for 2012, we anticipate that Plant Health Care will begin delivering new product, which should positively impact revenues and profitability, from around the fourth quarter of 2012. On-ground sales, defined as end-user application of the product, grew by approximately 40% in 2011 and, based on current orders, are expected to grow a further 250%, to nearly $2 million, in 2012. Growth rates of this magnitude, if maintained, bode well for gaining the critical mass and market acceptance that will propel us to profitability.

Outside the USA, in Mexico, the UK and South Africa in particular, we have seen on-ground sales increase approximately 30% in 2011, which we expect to accelerate to 60% in 2012. Market acceptance in targeted crops, in initial markets, has been vitally important to our growth. For example, in South Africa we have reached the point where it is estimated that Harpin has achieved up to a 25% penetration of the total potato crop. This has provided the platform, in terms of proving the product and growing awareness, to enable us to move into the US potato market, which covers some 400,000 acres, through a distribution agreement with Alexin Enterprises.

In the UK, cherry growers now incorporate Harpin into their pre-harvest regimen on roughly 80% of the total cherry harvest, due to its proven reduction in fruit splitting. This wide acceptance of Harpin at harvest is now generating new business for Plant Health Care with cherry growers in Australia and in the USA.

Our customers' success in achieving on-ground sales growth and many compelling trial results generated in 2011 have naturally accelerated progress in our partnering discussions. INCOTEC is a prime example of a preferred partner as it has technological strength in seed treatments and respect within the industry. We are negotiating with a number of other global and regional agrichemical and seed treatment companies for the full exploitation of our Harpin and Myconate technologies. We expect to finalise a number of new agreements during the course of 2012.

During the year, our Seattle laboratory evaluated 28 new Harpin peptide molecules in greenhouse studies. We have chosen the top six of these new peptides, which show promise for better targeted performance than the current commercial Harpin product, Proact, and will advance them into field trials in 2012 with expected commercialisation and registrations completed within two to three years.

In January 2011, we completed the sale of our US retail and landscape business, a non-core business unit, realising proceeds of $4.65 million and a gain on disposal of $2.0 million. This transaction has allowed us to add resources to and sharpen our focus on our core business with the goal of becoming a leading global provider of natural technologies for the promotion of plant health and growth.

TECHNOLOGY PLATFORMS

- Harpin and Myconate

In 2011, we achieved important breakthroughs for Plant Health Care and our partners in terms of market acceptance and market penetration. As a result of excellent on-farm trials, we are now moving our first Myconate project into commercial sales in the US vegetable market with INCOTEC.

As a result of exceptionally good results with the Iowa Soybean grower trials, highlighted below, our Harpin/fungicide programme will move into test marketing in the important US corn crop in 2012. Our consistent aim has been to increase market awareness, acceptance and recognition of Harpin, as well as to enhance our partners' existing crop protection products. By combining Harpin with our partners' established crop protection products, the cost of applying Harpin is minimised and maximum efficiency is achieved in the supply chain, resulting in high added value and high return on investment for the farmer.

As a result, significant market penetration is being achieved in the USA, Mexico, and South Africa. We expect to make further gains in these countries, as well as in Australia, in 2012. The largest application of Harpin has been on soybeans, cherries, potatoes, cotton, strawberries and assorted vegetable crops. We are also currently focusing on the citrus markets in Florida, expecting the application of Harpin to be part of the solution to the pervasive fungal problem currently impacting the citrus crop.

As mentioned earlier, a prime example of how an investment in field testing worked to our benefit in 2011 was a series of field trials conducted by the Iowa Soybean Association's ON FARM network, an independent association promoting agricultural innovation. In this series of tests, Harpin was combined with an off-patent fungicide and compared to one of the most widely used and most expensive proprietary fungicides on the market. The performance of Harpin with a leading off-patent fungicide exceeded the performance of the leading product which dominates the markets. These results can be viewed at:

http://www.isafarmnet.com/2011ResultsProject/CropProtection/HeadlineAMPvsProActwithPropicure.html

- Trials and Testing

During 2011, Germains Seed Technology carried out trials with Harpin used as a seed treatment on sugar beet. Trials were conducted in the greenhouse, as well as in the field, in both the UK and the USA. The results were sufficiently encouraging for this partner to continue testing into 2012, looking at a range of agronomic and performance traits in the same production areas.

Earlier this month (February 2012), Plant Health Care announced an exclusive, multi-year agreement with ASP - Chile, a wholly-owned subsidiary of Agrium Inc. Agrium is one of North America's largest fertiliser manufacturers, supplying North and South America, and Australia, with all of the major agriculture nutrients. Under the agreement, we will supply ASP with both Harpin and Myconate product for use on all crops in Chile; Harpin for all foliar uses and Myconate for seed treatment or ground application. Plant Health Care will work with ASP while the products are tested for registration in Chile, which is expected to be completed in less than two years. Not only will this agreement extend our geographical reach into Chile, but it also allies Plant Health Care with a major international group with a significant foothold in agriculture markets.

In July 2011, Plant Health Care signed a non-exclusive agreement with INCOTEC of the Netherlands, one of the world's largest specialist seed treatment companies, who will incorporate Myconate with their existing seed treatment packages. The INCOTEC agreement was signed too late for it to establish a large testing programme in the northern hemisphere in 2011. However, a small amount of testing was completed and provided very encouraging results. Testing is being expanded in more crops and more countries during 2012, fuelled in part by the excellent results of our testing of Myconate seed treatment on corn in the USA, where statistically significant yield increases were achieved.

Syngenta conducted tests for both Harpin and Myconate in various applications in 2011. Testing is expected to continue during 2012.

In Brazil, a university testing programme for Myconate was initiated in 2011. Testing was carried out in multiple locations by several Brazilian universities and consolidated data should be available in the coming weeks. Due to the time required for the issuance of import certificates and use permits, it became too late for our own trials of Harpin and Myconate to be initiated. We are verifying partner interest and will establish new trials during 2012.

- Product Development 

To ensure the long-term success of our partnering relationships and maximise the ultimate value of Plant Health Care, we are investing in the development of the next generation of Harpin products, as well as improved formulations for Harpin and Myconate.

From 28 original peptides developed and tested, our Seattle laboratory identified eight peptides that performed 5% to 28% better in greenhouse trials than our current Harpin product, Proact. The best candidates were selected for large-scale synthesis production and field tests during 2012. Two of the six peptides target growth in soybeans, two target growth in corn, and the remainder target both growth and defence in soybeans and corn. All are expected to have positive impacts on crops beyond those specifically targeted, similar to our current Harpin product, Proact.

If the field tests show similarly exceptional results to those seen in the greenhouse tests, we will look to pursue immediate registration and subsequent full commercialisation, which is expected to be completed within two to three years.

We are also developing a liquid Harpin formulation for use by Monsanto and others. We are optimistic that a viable formulation, which will allow greater ease of application and integration with other seed treatments, most of which are liquid in nature, can be achieved during 2012, which we expect to result in sales in 2013.

OTHER DEVELOPMENTS

In May 2011, the US Environmental Protection Agency issued a statement removing the requirement for use of a colouring agent when seeds are commercially treated with Harpin exclusively. This means that seeds treated only with Harpin can be returned to the food chain, if not used as a planted seed. This is important for soybeans, which have a one-year planting window, and therefore must be destroyed if they cannot be returned to the food chain.

In October 2011, Plant Health Care's Computer Automated Spatial Analysis (CASA) technology, licensed to XS Inc., was publicly demonstrated to a broad cross-section of seed, crop protection, distribution and precision/services companies in a plenary session of the AgGateway Conference. Participation at this event and at the American Seed Trade Association generated significant interest in the technology from a number of multinational seed and crop protection industry leaders. Individualised demonstrations are planned for those companies during the first quarter of 2012, with a limited commercial launch scheduled for later in the year.

OUTLOOK

As set out above, we have made significant progress on each aspect of our three point strategy. Our focus remains on the rapid conversion of our existing partnerships into full commercial agreements and leveraging our constructive discussions with other major agrichemical and seed treatment companies in order to take Plant Health Care into profitability.

We are confident that our efforts, both to date and in the forthcoming year, will result in further progress towards commercial roll-out with some of our existing partners, as well as the brokering of new partnering agreements.

As we read in the newspapers on a daily basis, the world is facing the mounting challenge of feeding an ever growing population, with increasingly limited resources in terms of land and water. Our naturally derived, sustainable technologies will form a part of the solution.

John Brady

Chief Executive

24 February 2012

Consolidated statement of comprehensive income for the year ended 31 December 2011

Consolidated statement of financial position at 31 December 2011

Consolidated statement of changes in equity at 31 December 2011

Consolidated statement of cash flows for the year ended 31 December 2011

Notes forming part of the Group financial statements for the year ended 31 December 2011

1. Annual Report

The financial information set out in this document does not constitute the company's statutory accounts for 2010 or 2011. Statutory accounts for the years ended 31 December 2010 and 31 December 2011 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for each of 2010 and 2011 were unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 Statutory accounts for the year ended 31 December 2010 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 December 2011 will be delivered to the Registrar in due course and will be posted to shareholders shortly, and thereafter will be available from the Company's registered office at The Broadgate Tower, 20 Primrose Street, London EC2A 2RS and from the Company's website www.plantheathcare.com

 The financial information set out in these preliminary results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2011. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 31 December 2010. New standards, amendments and interpretations to existing standards, which have been adopted by the group have not been listed, since they have no material impact on the financial statements.

2. Accounting policies

Reporting currency

The directors believe that it is appropriate to use US dollars as the presentational currency for reporting, since the majority of the Group's transactions are conducted in that currency.

The principal accounting policies are set out below. The policies have been applied consistently to all the years presented and on a going concern basis.

Standards, amendments and interpretations to published standards effective in 2011 adopted by the Group

Revised IAS 24 Related Party Disclosures (Revision to IAS 24). This revision concerns the previous disclosure requirements and simplifies the definition of a related party.

Improvements to IAS 1: Presentation of financial statements. This clarifies that the analysis of components of other comprehensive income in the statement of changes in equity may be presented in a note.

None of the other standards or amendments effective from periods beginning 1 January 2011 have a material impact on the financial statements.

Standards, amendments and interpretations to published standards not yet effective

There are a number of new standards and amendments to and interpretations of existing standards which have been published and are not yet mandatory and which the Company has decided not to adopt early.

Basis of consolidation

On 6 July 2004, Plant Health Care plc became the legal parent company of Plant Health Care, Inc. in a share-for-share transaction. The former shareholders of Plant Health Care, Inc. became the majority shareholders of Plant Health Care plc. Further, the continuing operations and executive management of Plant Health Care plc were those of Plant Health Care, Inc.

This combination was accounted for as a reverse acquisition with Plant Health Care, Inc., the legal acquiree, being treated as the acquirer. Under this method the assets and results of Plant Health Care plc were combined with the assets, liabilities and results of Plant Health Care, Inc. from the date of combination. There was no adjustment to the carrying values of the assets and liabilities in Plant Health Care, Inc. to reflect their fair value at the date of combination. No goodwill arose on this combination.

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

From 1 January 2010, the total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests. Before this date, unfunded losses in such subsidiaries were attributed entirely to the group. In accordance with the transitional requirements of IAS 27 (2008), the carrying value of non-controlling interests at the effective date of the amendment has not been restated.

Revenue

Revenue comprises sales of goods to external customers and revenues generated through the commercialisation of the Group's technology (fee income). Sales of goods to external customers are at invoiced amount less value added tax or local taxes on sales and are recognised at the point that the customer takes legal title to the goods sold. Fee income is recognised when the Group has no remaining obligations to perform under a non-cancellable contract which permits the user to act freely under the terms of the agreement. For sales of goods that are subject to bill and hold arrangements this means:

Ø The goods are complete and ready for delivery;

Ø The goods are separately identified from the Group's other inventory and are not used to fulfil any other orders; and

Ø The customer has requested that the goods not be delivered.

Goodwill

Goodwill is measured as the excess of the cost of an acquisition over the net fair value of the identifiable assets, liabilities and contingent liabilities, plus any direct costs of acquisition.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to administrative expenses in the consolidated statement of comprehensive income. The Company performs annual impairment tests for goodwill at the financial year end.

Other intangible assets

Externally-acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within administrative expenses in the consolidated statement of comprehensive income.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to contractual or other legal rights, and are initially recognised at their fair value.

Expenditures on internally-developed intangible assets (development costs) are capitalised if it can be demonstrated that:

Ø it is technically feasible to develop the product for it to be sold;

Ø adequate resources are available to complete the development;

Ø there is an intention to complete and sell the product;

Ø the Group is able to sell the product;

Ø sale of the product will generate future economic benefits; and

Ø expenditure on the project can be measured reliably.

Capitalised development costs are amortised over the periods of the future economic benefit attributable to the asset. The amortisation expense is included within administrative expenses in the consolidated statement of comprehensive income.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in profit or loss.

The significant intangibles recognised by the Group and their estimated useful economic lives are as follows:

Licenses - 12 years

Registrations - 5-10 years

Impairment of goodwill and other intangible assets

Impairment tests on goodwill are undertaken annually at the financial year-end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (that is the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Impairment charges are included within administrative expenses in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not reversed.

Foreign currency

Foreign currency transactions of individual companies are translated into the individual company's functional currency. Any differences are recognised in profit or loss.

On consolidation, the results of operations that have a functional currency other than US dollars are translated into US dollars at rates approximating to those ruling when the transactions took place. Statements of financial position are translated at the rate ruling at the end of the financial period. Exchange differences arising on translating the opening net assets at opening rate and the results of operations that have a functional currency other than US dollars at average rate are included within "other comprehensive income" in the consolidated statement of comprehensive income and taken to the foreign exchange reserve within capital and reserves.

Exchange differences recognised in profit or loss in Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the overseas operation concerned are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.

Financial instruments

Trade receivables collectible within one year from date of invoicing are recognised at invoice value less provision for amounts the collectibility of which is uncertain. Trade receivables collectible after more than one year from date of invoicing are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Investments comprise short-term investments in notes and bonds having investment grade ratings. These assets are actively managed and evaluated by key management personnel on a fair value basis in accordance with a documented investment strategy. They are carried at fair value as determined by quoted prices on active markets, with changes in fair values recognised through profit or loss.

Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. The Group's ordinary shares are classified as equity instruments.

Employee benefits

The Group maintains a number of defined contribution pension schemes for certain of its employees; the Group does not contribute to any defined benefit pension schemes. The amount charged to profit or loss represents the employer contributions payable to the schemes for the financial period.

The expected costs of all short-term employee benefits, including short-term compensated absences, are recognised during the period the employee service is rendered.

Equity share-based payments

Share-based payments issued to employees include share options and stock awards under a long-term incentive plan. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the date of grant is recognised as an expense with a corresponding increase in equity on a straight-line basis over the vesting period, based on the Company's estimate of the shares that will eventually vest and be adjusted for the effect of non-market-based vesting conditions.

Leased assets: Lessee

Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is recognised in profit or loss.

Lease payments are analysed between capital and interest components. The interest element of the payment is charged to income over the period of the lease and is calculated so that it represents a constant proportion of the balances of capital repayments outstanding. The capital element reduces the amounts payable to the lessor.

All other leases are treated as operating leases. Their annual rentals are charged to income on a straight-line basis over the lease term.

Leased assets: Lessor

Where assets are leased to a third party and give rights approximating to ownership (finance leases), the assets are treated as if they had been sold outright.

Lease payments are analysed between capital and interest components so that the interest element of the payment is credited to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts owed by the lessee.

Property, plant and equipment

Items of property, plant and equipment are initially recognised at cost. Cost includes the purchase price and costs directly attributable to bringing the asset into operation. Depreciation is provided to write off the cost, less estimated residual values, of all property, plant and equipment over their expected useful lives. It is calculated at the following rates:

Leasehold improvements - over the lesser of the asset's useful life or the length of the lease

Production machinery - 10 - 20% per annum

Office equipment - 20 - 33% per annum

Vehicles - 20% per annum

Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase and all other costs of conversion.

Deferred tax

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences on:

Ø the initial recognition of goodwill;

Ø the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit; and

Ø investments in subsidiaries and jointly-controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the end of the financial period and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Provisions

Provisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of past transactions and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability.

Non-current assets held for sale and disposal groups

Non-current assets and disposal groups are classified as held for sale when:

Ø they are available for immediate sale;

Ø management is committed to a plan to sell;

Ø it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn;

Ø an active programme to locate a buyer has been initiated;

Ø the asset or disposal group is being marketed at a reasonable price in relation to its fair value; and

Ø a sale is expected to complete within 12 months from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at the lower of:

Ø their carrying amount immediately prior to being classified as held for sale in accordance with the Group's accounting policy; and

Ø fair value less costs to sell.

Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.

The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been abandoned, or that meets the criteria to be classified as held for sale.

Discontinued operations are presented in the consolidated statement of comprehensive income as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal groups constituting discontinued operations.

3. Revenue

4. Operating loss

5. Segment Information

The segregation shown within the segment analysis below has been re-aligned to provide greater consistency with the manner in which management internally monitors and reports on the Group's performance. The Group views, manages and operates its business according to geographical segments. Revenue is generated from the sale of agricultural products across all geographic segments. Fee income is only generated in the USA segment.

Other segment information related to continued operations:

* These amounts represent intercompany amounts and public company expenses for which there is no reasonable basis by which to allocate the amounts across the Group's segments.

Other segment information:

* These amounts represent intercompany amounts and public company expenses for which there is no reasonable basis by which to allocate the amounts across the Group's segments.

Segment assets include all operating assets used by a segment and consist principally of operating cash, receivables, inventories, property, plant and equipment and intangible assets, net of allowances and provisions. Segment liabilities include all operating liabilities and consist principally of trade payables and accrued liabilities.

Unallocated assets and liabilities include assets and liabilities attributable to the general entity, including cash and short-term investments, property plant and equipment, income tax payable, borrowings and trade payables and accrued expenses.

All material non-current assets are located in the USA.

6. Finance income and expense

7. Tax expense

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

At 31 December 2011, the Group had a potential deferred tax asset of $15,459,000, which includes tax losses available to carry forward of $14,907,000 (being actual losses of $51,994,000) arising from historical losses incurred and other timing differences of $552,000.

The deferred tax liability comprises sundry timing differences.

8. Discontinued operations

In January 2011, the Group sold the trade and certain assets and liabilities of its US landscape and retail business, which represents the only operation presented as discontinued operations for the year ended 31 December 2011. In May 2010, the Group sold the trade, assets and liabilities relating to its subsidiary, PHC Reclamation, Inc. The results of these businesses for the years ended 31 December 2010 and 2011 are shown under "Profit of discontinued operations, net of tax" in the consolidated statement of comprehensive income.

(a) US landscape and retail: profit on disposal

In January 2011, the Group sold the trade and certain assets and liabilities of its US landscape and retail business. These assets and liabilities have been classified as held for sale in the consolidated statement of financial position at 31 December 2010.

The post-tax profit on disposal of discontinued operations was determined as follows:

The reorganisation costs comprise severance costs of approximately $679,000 and costs related to the shut-down of the manufacturing facilities following the above sale of $210,000. Transaction expenses comprise consulting and legal costs of $320,000.

(b) PHC Reclamation: profit on disposal

In May 2010, the Group sold the trade and those assets and liabilities relating to its subsidiary, PHC Reclamation, Inc., for cash consideration of $225,000 and deferred consideration of $160,000.

The post-tax profit on disposal of discontinued operations was determined as follows:

(c) The profit/(loss) of both discontinued operations, net of tax, was determined as follows:

(d) Cash flows on discontinued operations

Cash flows attributable to operating, investing and financing activities of the above discontinued operations were as follows:

9. Loss per share

Basic loss per ordinary share has been calculated on the basis of the loss for the year of $5,099,000 (2010: loss of $7,553,000) and the weighted average number of shares in issue during the period of 53,063,707 (2010: 52,800,972). Basic loss per share from continuing operations has been calculated with a numerator of $7,135,000 loss (2010: $7,689,000 loss) and basic earnings per share from discontinued operations has been calculated with a numerator of $2,036,000 earnings (2010: $136,000). The weighted average number of shares used in the above calculation is the same as for total basic loss per ordinary share. Equity instruments of 4,121,165 (2010: 3,683,998), which includes share options and LTIPs, that could potentially dilute basic earnings per share in the future have been considered but not included in the calculation of diluted earnings per share because they are anti-dilutive for the periods presented. This is due to the Group incurring a loss on continuing operations for the year.

10. Intangible assets

The intangible asset balances have been tested for impairment using discounted budgeted cash flows, a pre-tax discount rate of 18% and performance projections over five years with residual growth assumed at 2%.

Goodwill

Goodwill comprises of a net book value of $1,432,000 related to the 2007 acquisition of the assets of Eden Bioscience and $188,000 related to an acquisition of VAMTech LLC in 2004. The entire amount is allocated to Harpin, a cash generating unit within the USA segment. No impairment charge is considered necessary, and no reasonable possible change in key assumptions used would lead to an impairment in the carrying value of goodwill.

Licenses and registrations

These amounts represent the cost of licenses and registrations acquired in order to market and sell the Group's products internationally across a wide geography. These amounts are amortised evenly according to the straight-line method over the term of the license or registration. Impairment is reviewed and tested according to the method expressed above.

11. Trade and other receivables

The trade receivable current balance represents trade receivables with a due date for collection within a one year period. The trade receivable non-current balance represents the present value of trade receivables with a collection period that exceeds one year.

In October 2011, the Group entered into a sale/leaseback agreement for bulk containers with Direct Enterprises, Inc. (DEI) establishing a lease receivable of $535,000. Payments will be made by DEI every six months for three years beginning 1 June 2012. The Group owns the bulk containers and they serve as collateral for the receivable.

Movements on the provision for impairment of trade receivables are as follows:

The gross value of trade receivables for which a provision for impairment has been made is $1,620,401 (2010: $3,139,000).

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables set out above.

The following is an analysis of the Group's trade and other receivables, both current and non-current, identifying the totals of trade and other receivables which are not yet due and those which are past due but not impaired.

The main factors used in assessing the impairment of trade receivables are the age of the balances and the circumstances of the individual customer.

12. Trade and other payables