NEW TECHNOLOGY FOR SUSTAINABLE AGRICULTURE

NEW TECHNOLOGY FOR SUSTAINABLE AGRICULTURE ANNUAL REPORT AND ACCOUNTS 31 MARCH 2008

Corporate Statement Plant Impact s innovative approach to antistress technology is delivering benefits along the entire value chain and taking the uncertainty out of farming.

CONTENTS Key Events and Highlights 1 Chairman s Statement 3 Business Review 5 Financial Review 15 Board of Directors 16 Advisors 17 Group Directors Report 18 Corporate Governance Statement 21 Directors Remuneration Report 23 Independent Auditors Report to the Members of Plant Impact plc 25 Group Income Statement 26 Group Statement of Changes in Equity 27 Group Balance Sheet 28 Group Cash Flow Statement 29 Notes to the Group Financial Statements 30 Company Balance Sheet 51 Notes to the Company Balance Sheet 52

Key Events and Highlights Key Events May 2007 Strengthened executive and sales / technical teams June 2007 Commenced trading on PLUS market Strengthened Spanish sales / technical team August 2007 Appointment of joint broker September 2007 Field trials results tomatoes October 2007 Field trials results lettuce and table grapes November 2007 Analyst and media site visit Alethea patent granted Morocco February 2008 Placing 1.5m EU and South Africa patents granted BugOil Registration of BugOil in Tanzania March 2008 Field trial results BugOil Strengthened UK sales / technical team Post March 2008 USA distribution agreement crop nutrients Tanzania distribution agreement BugOil UK patent granted Speedo 1

Highlights Corporate Placing 1.5m USA distribution agreement crop nutrients Tanzania distribution agreement BugOil Strengthened executive and sales / technical teams Research & Development BugOil EU registration, dossier submission Q3 2008 BugOil USA registration, dossier submission Q4 2008 BugOil EU and South Africa patents granted Speedo UK patent granted Alethea Morocco patent granted Further validation of product efficacy First independent trial on arable crop soy bean Financial Turnover 285k (2007: 377k) Improved margins 35.8% (2007: 28.7%) Increase in Research & Development and Distribution spend 1,257k (2007: 810k) Loss before tax 1,847k (2007: 1,822k) Cash 2,980k (2007: 3,078k) 2

Chairman s Statement I am very pleased to present Plant Impact s results for the year ended 31 March 2008, the first full year of trading since the flotation of the Group on AIM in October 2006. In my statement that accompanied the results for the six months ended 30 September 2007, I said that the next six months were potentially the most exciting in the Group s history. At that time, we were in discussions with a number of potential partners with a view to entering into distribution and/or licensing deals. Two distribution deals have been signed in the last six months, the first with Miller Chemical & Fertilizer Corporation, of Pennsylvania, USA ("Miller"), is for three of Plant Impact s crop nutrient products. The second, with DVA Agro GmbH ("DVA"), a global crop protection company, is the Group s first commercial agreement for BugOil, under which DVA will distribute BugOil in Tanzania under the name Bionic. These two agreements are major milestones in the development of the Group and come on the back of a series of excellent results from the field trials being conducted around the world. Financial Review During the year ended 31 March 2008, we have achieved many important product development, regulatory, IP protection and corporate milestones. Whilst these initiatives have required significant upfront financial commitment, which is reflected in the results for the year, they do represent a strategic investment in Plant Impact s fundamental long term growth drivers. Impressive trial results and strong underlying customer demand across our portfolio of plant stress control technologies also leave us confident about our future prospects. Turnover for the year was 284,853 compared with 377,237 for the year ended 31 March 2007. The comparative fall in turnover is due to the Group focusing on larger distributors, with increased geographical penetration, and increasing its activity on our licensing and partnering strategy. Although sales for the year are lower than the previous year, the Directors believe that the move to larger distributors and the focus on licensing deals will be beneficial to the Group in the longer term. The loss before tax was 1,847,001, compared with 1,821,945 for the year ended 31 March 2007. This reflects the expenditure on people, marketing and travel as we move from being a research based business to concentrate on the commercialisation of our products. Research and development tax credits reduced the loss attributable to equity shareholders to 1,664,549 (2007: 1,723,935). A further 1.425 million, net of expenses, was raised from a placing, of shares at 47 pence per share in February 2008. The Directors were delighted that this placing was completed at a discount to the then market price of approximately 6% when market conditions at the time made any form of fund raising for smaller quoted companies very difficult. Net assets at 31 March 2008 were 3,458,587 (2007: 3,486,946) and the Group had cash and cash equivalents of 2,979,926 (2007: 3,077,959). Product development During the year, the Group has made excellent progress extending its field trial programmes, product registrations and intellectual property protection. Field trials The field trial programmes continue to demonstrate efficacy of the Plant Impact technologies and products. The results from these trials have demonstrated increased marketable yield, improved shelf life, healthier crops and lower inputs. The number of crops on which trials have been conducted has increased and so has the geographical spread. During the year, Plant Impact completed in excess of 80 field trials in 10 countries. Trials for the coming year have already commenced, a total of 170 are planned. Product registrations The Group has continued to work on the registration dossiers for BugOil to be filed with each of the UK Pesticides Safety Directorate ("PSD") and the USA Environment Protection Agency ("EPA"). The dossiers are nearing completion with the toxicology work completed and the final report being compiled. The Directors believe that the final dossier will be ready for filing with the PSD by the end of July 2008 and with the EPA before the end of 2008. BugOil has been registered in Tanzania. Intellectual property protection The Group has seen the patent portfolio improved with granted patents for BugOil in Europe and South Africa, for Alethea in Morocco and for Speedo in the United Kingdom, post 31 March 2008. 3

Commercial development Progress has been made with agreements being signed with Miller Chemicals in the USA and DVA Agro for Tanzania. The significance of these agreements is that Miller Chemical will give the Group s crop nutrient products access to over 400 distributors in the USA, will market the products and will assist with product development in terms of field trials. The DVA Agro agreement is the first commercial contract for BugOil on a high value crop; roses. The Group continues to work with a number of other potential strategic partners with a view to entering into more distribution and/or licensing agreements and to build on its established networks in Europe, the Middle East, USA and South and Central America. The Group has also started to engage with food groups and supermarkets to establish the benefits to growers and consumers of using the Group s range of nutrient products. These are new audiences for the Group. By demonstrating that growers can improve their yields while reducing the amount of traditional nutrients that are applied to the crop, thereby improving their profitability, and by demonstrating to supermarkets that this approach produces crops that are healthier to eat, less damaging to the environment and have a longer shelf life, the Group is aiming to create a pull through of demand for its products from an audience that sees the commercial benefits that come from good environmental practice, which consumers are demanding increasingly. Management team appointments The management team has been enhanced during the year with the appointment of Mike Panteli as Finance Director, which has been announced previously, and four appointments to boost the Group s business development and sales resource as we move away from being a research based business to concentrate on the commercialisation of the Group s proprietary technologies. Martyn Pearce s appointment as International Business Director in May 2007 and Angel Ruiz s appointment as Business Development Manager in June 2007 have also been announced previously. In March 2008 we appointed Mark Horner and Scott Garnett as sales managers, with responsibility for direct sales in the UK and northern Europe. They are also working closely with Miller to support their sales program in the USA. Mark and Scott have over 40 years experience in the distribution of nutrient products in these markets. Dividends The Directors currently intend to devote the Company s cash resources to its operations and therefore do not anticipate paying dividends in the near future. They will reconsider the Company s dividend policy as and when the Company is in a position to pay dividends. The declaration and payment by the Company of any dividends will depend on the results of the Company s operations, its financial condition, cash requirements, future prospects, profits available for distribution and other factors deemed to be relevant at the time. Outlook The Directors are pleased with the progress made in the last twelve months. The Company has attracted the attention of many key players in the agrochemical industry, many of whom have entered into evaluation agreements as a prelude to an agreement for the commercialisation of the Group s products. The agreements with Miller and DVA are important milestones in the implementation of this strategy for bringing our products to market. More similar agreements are being worked on and the Directors hope to make further announcements in the coming months. The fact that many of these companies have approached Plant Impact in the first instance suggests that the Group s products are gaining wide recognition. This has been achieved by the superb efforts of what is still a very small, but dedicated, management team, who have developed and are promoting a range of compounds that the Directors believe have the potential to be world beating products. Our vision has always been that our products would become noticed by food producers and retailers, who will appreciate the commercial benefits that can be gained from the combination of improvements in yield, quality and shelf life while reducing the quantity of potentially harmful chemicals that are applied to the crops, resulting in healthier plants and healthier food to eat. We have recently seen the first signs that this philosophy is being recognised and look forward to seeing the rewards from this for the Group and all its stakeholders. Martin Robinson Chairman 23 June 2008 4

Business Review Plant Impact s technologies and products, from the start, have been designed to help food producers increase marketable yield, improve shelf life, lower inputs and be more environmentally friendly than current standard practice. During the last year the world has experienced unprecedented pressure on food production and supply. The agricultural market drivers require ever increasing food production volumes in an environment of limited resources. Innovation will help the world feed itself and this is Plant Impact s niche. World Drivers Population growth World population estimated to increase from 6 billion to 9 billion by 2050. This will require a doubling of world food production; China s urban population increasing by 1020 million per annum. 2050 Increasing affluence China s urban population becoming more affluent and switching to more western style diets rich in meat, protein and dairy products; China has become the largest importer of soy bean, acquiring 40% of world production. 5

Contraction of arable land Urbanisation; Soil erosion; Scarcity of water; Climate change Drought Australia 2007 wheat harvest at less than half the country s average; Desertification is accelerating in China and subsaharan Africa; More frequent flooding. Biofuels Increased demand for ethanol drives record corn plantings. 54% of the world s corn supply is grown in America s midwest. Biofuels are expected to consume about a third of America s grain harvest in 2007; Two Latin American (Bolivia and Peru) leaders have issued warnings about the effect of biofuel production on food supplies. 6

Not in the future but now These world drivers are happening now as evidenced by events of the last year. Food riots / government stability Ghana, Haiti, Egypt, Mexico. Embargoes on food exports from certain countries India, China and Vietnam have restricted exports of rice to protect their stock and limit inflation; Importers such as Bangladesh, Philippines and Afghanistan have been hit hard. Cereal prices Raw food prices have risen 22% in the past year; Consumers have paid 6.5% more for food in the past year; Wheat prices have risen 92% in the past year; Centre of imminent food catastrophe is corn the main staple of the ethanol industry. The price of corn has risen by circa 44% over the past 15 months; Soy bean prices rise to highest in decades; Rice prices have risen by 70% in the last year; These increases impact on the price of meat and dairy produce. FOOD PRICES CORN PRICES RAW FOOD RICE PRICES WHEAT PRICES Fertiliser prices Some fertilisers have nearly tripled in price in the last year. This is jeopardising food production in poorer countries; Currently short supply of fertiliser, however fertiliser companies are confident this will not happen in the long term as they intend to build new factories. This will create fresh problems of increasing dependency on fossil fuels and greater pollution to waterways i.e. nitrogen leaches into streams and waterways; Overall global consumption of fertiliser increased by an estimated 31% from 1996 to 2008, driven by a 56% increase in developing countries (International Fertiliser Industry Association); India s fertiliser subsidy bill could be as high as $22 billion in the coming year, up from $4 billion in 20045. Shrinking agricultural commodity stocks EU traditionally a net exporter became a cereal importer in July 2007. Set aside land at zero (EU) Sources: UN Food and Agricultural Organisation (FAO), UN World Food Programme, United States Department of Agriculture (USDA). 7

Technologies and Products Plant Impact has developed six key technologies designed to increase marketable yield, improve shelf life, lower inputs and be more environmentally friendly than current standard practice. These technologies can be divided into two distinct groups: a) Crop nutrients CaT, PINT, Alethea, and Speedo ; b) Pest control BugOil and nematicide. Of these technologies Plant Impact has developed nine products which are: InCa, Cold Grow and Hot Grow from CaT technology; Impaction Calcium, Impaction Potassium and Impaction Magnesium from PiNT technology; Balance and Saxon from Speedo technology; Bionic from BugOil technology. Alethea and nematicide are at the research and development stage. Crop Nutrients Calcium Technology CaT A Calcium transport and delivery technology designed to work at a cellular level. CaT uses patent applied chemistry to improve calcium absorption by plant tissues with a low ability to take up and retain calcium. Calcium is used by plants for cell integrity, cell wall strength and cell division. However, calcium uptake and movement within plants is erratic and therefore some parts of plants struggle to absorb and retain calcium. This leaves them weak and prone to infection and quality problems. Often these areas are the part of the plant that growers wish to harvest. Many fruit and vegetable crops suffer from physiological disorders associated with low calcium levels. This technology has a patent application, and has yielded several commercial products, the main benefits of which are: Prevents physiological disorders; Increased shelflife and quality; Improved growth during high and low temperatures and frosts; Holding and setting more flowers and fruit; Lower input levels compared to standard calcium applications. PiNT Plant Impact Nitrogen Technology (PiNT) controls the uptake of nitrogen by a plant. PiNT Calcium gives the plant a better root system, improving reproductive growth (which is harvested) and reduced vegetative growth (which is discarded). This is also valuable in ornamentals and turf crops, where growers do not want leggy growth for cosmetic reasons. PiNT Potassium and Magnesium improve quality and colour of product and shorten the time to harvest. With some crops having shorter maturation periods there is also the possibility for additional harvests. Speedo Speedo is a natural plant maturity promoter. Field trials have indicated an increase in sugar content, colour, and reproductive maturity in a range of fruit and vegetable crops. Alethea This technology uses a new molecule that has been designed to combat the effects of abiotic stress. Abiotic stress is caused by extremes of temperature, water, drought, salinity, heavy metals, herbicide and light intensity. Abiotic stress is a major problem in agriculture, limiting the ability of crops to achieve optimum yield and quality. Abiotic stress contributes to disease, since stressed crops suffer from higher levels of many diseases. The Alethea chemistry promotes the maintenance of strong, healthy cell walls in conditions of stress and reduced water availability, whilst this allows the cells to neutralise harmful ammonia and oxidative toxins that accumulate in plants at times of stress. 8

Pest Control BugOil BugOil is a botanical pest control technology that controls sapfeeding pests including mites, whitefly, cotton aphid and thrips. The control provided by BugOil is to the level of the current best performing synthetic pesticides (verified through independent trials). It is safe on most beneficial insects (bees, earthworms, ladybirds) and is based on food grade materials. BugOil is safe to nontargets and provides excellent control of pests. Nematicide A chemistry based on a synergy between essential oils, that controls nematodes (Potato Cyst Nematode). Further development of the Plant Impact nematicide technology is subject to a pending grant application. 9

Field Trial Programmes Crop Nutrients During the year ended 31 March 2008, Plant Impact has extended its field trial programmes to increase the number of crops covered and geographical areas. The main focus to date has been high value fruit and vegetables, however significantly we have seen an independent trial on drought stressed soy bean conducted in the USA. This is Plant Impact s first trial on an arable crop. The total number of field trials conducted during the year was in excess of 80 covering 10 countries. Field trial results this year include: Tomato The trial, conducted in Spain (Almeria), using a combination of Plant Impact s CaT and PiNT technologies, demonstrated an increase in marketable tomato yield of between 36% and 48% as well as a reduction in the incidence of blossom end rot from 30% to 8%, when compared to the standard grower practice. Other beneficial trial observations were increased fruit homogeneity and increased fruit setting. This trial suggests that the use of Plant Impact technologies on fresh tomato crops could result in increases in profitability for the grower of between $1,500 and $2,000 per hectare. The global fresh tomato market for Plant Impact s CaT and PiNT technologies has an estimated market size of US$120m and is expected to grow, due to the increasing demand for fresh tomatoes and the more unpredictable climatic conditions being experienced in the areas where they are grown. Tomatoes are believed to represent one of the most important horticultural crops in terms of world production and trade. The EU is the biggest single producer of fresh tomatoes, followed by the USA, then Turkey. Within the EU, Italy is the biggest producer by far, followed by Spain, Greece, Portugal and France. Between them Italy and Spain grow almost 9.5 million tonnes of tomatoes a year. Tomato blossom end rot is a physiological disorder that is caused by a lack of calcium in the fruit. Unlike traditional products, Plant Impact's CaT technology overcomes the problem efficiently and specifically, reducing the amount of agricultural inputs applied to the plants, significantly improving marketable yield to the grower and providing consumers with better quality tomatoes. Lettuce In another field trial, carried out in Spain, the use of Plant Impact s CaT and PiNT technologies was demonstrated to significantly improve the marketable yield, shelf life and speed to maturity of lettuce. The trial also demonstrated a reduction in the incidence of tip burn. After 8 to 9 weeks of storage under ambient conditions the percentage of lettuce hearts in good, saleable condition (without browning of leaves and rotting) increased by between 40% and 80% in the treated group compared with between 0% to 40% in the control group. This trial design included storage in extreme conditions and indicates an important value for retailers that sell prepacked salads, where two days extra storage makes a significant impact on profitability by reducing spoilage. Additional shelf life potentially opens global markets to growers. Supermarkets are currently suffering spoilage rates of between 20% and 30% on salads. Other findings of the trial showed that following lettuce seedling transplantation, plant growth had increased by between 6% and 11% compared to the control group, and yields on harvesting of the crop after transplantation increased by between 5% and 10% compared to the control group. This indicates earlier maturity of the crop through better growth, allowing the grower to cut earlier or harvest a heavier crop. In addition, lettuce tip burn, a calcium deficiency disorder, was reduced from 15% in the control group to 10% in those plants treated with Plant Impact s products. This indicates that calcium uptake by the plant was more effective, leading to improved quality and a reduction in waste. Tip burn is caused by environmental factors, such as high temperatures and low relative humidity, and agricultural factors such as salinity, calciumpoor soils and water stress. Leaves with tip burn have an unpleasant appearance and the edge of the damaged leaf is weaker and subject to rotting. The global lettuce market for Plant Impact s CaT and PiNT technologies has an estimated market size of US$120m per annum, which is expected to grow due to the increasing demand for fresher and better quality lettuce. In the last 10 years, per capita consumption of lettuce has grown by 17% (USDA). 10

Table grape Five trials have been conducted, in Spain (3), in Jordan and in Morocco, on table grapes, using the Group s PiNT, CaT and Speedo technologies. Grapes grown in those and other viticulture regions typically face plant stresses such as drought, high temperatures, poor soil conditions and calcium deficiency all of which contribute to suboptimal yield. The trial groups, treated with the Plant Impact technologies, showed a range of improvements compared with their respective controls: marketable yield up by 10 15%; shelf life increased by 8%; colour improved by 7%; based on measurement of CIRG (colour index for red grapes) which is a standard statistical calculation; and sugar content increased by 20%. As a result of treatment with Plant Impact s solutions the growers revenues increased by 20 25% and the timetoharvest was reduced by 10 12 days. In addition, the grapes became less susceptible to heat and drought stress and the vines showed an overall improvement in health, both with regards to colour (of leaf and stem) and strength (thickness of stem). The global table grape market for Plant Impact s PiNT, CaT and Speedo technologies has an estimated market size of US$230m. Apple Trials conducted in the USA using the Group s InCa technology on apples showed that bitter pit can be prevented. The amount of calcium that needs to be applied to the crop can be reduced, while doubling the calcium levels in the apples and increasing the size and uniformity of the fruit. A trial conducted by Miller using InCa, demonstrated excellent control of bitter pit on the apple variety Honeycrisp, a high value crop with known susceptibility to this problem. Not only was InCa as good as the standard treatment but it offered the unique advantage of using 8 times less calcium than standard treatments, with considerable environmental benefit. In addition, InCa application increased calcium levels in the fruit by over twofold, improving nutritional benefits and storage life. Trials on Golden Delicious apples demonstrated that treatment with InCa increased fruit size compared to standard treatments and significantly reduced variability of apple diameter, with 80% of the fruit on treated plants fitting into a single size class. Maintaining a regular apple size is an important commercial consideration for the grower to ensure consistency of quality fruit. The amount of calcium applied to the crop was nearly 4.5 times lower with InCa compared to the standard treatment, offering real environmental gains to the grower. Pear A trial on Anjou pears, commonly susceptible to severe physiological disorders due to calcium and nitrogen imbalance, showed that InCa significantly reduced Alfalfa Greening by up to 4 times at each harvest compared to the standard treatment. Cork Spot was almost totally eliminated through treatment with InCa. Soy bean A field trial conducted by Miller on soybean, a crop suffering from drought stress, proved the efficacy of InCa in reducing the negative effects of drought stress on a soya crop by increasing the yield by 17.5% from 2.69 tonnes per hectare to 3.16 tonnes per hectare. This is the first trial to be conducted using a Plant Impact technology on a mainstream arable crop. Other crops Other trials have shown improvements in marketable yield in squash (62.5% improvement), cucumber (50% improvement) and olives (10% improvement). The third year of trials on cocoa has confirmed earlier years results, showing a 69% increase in marketable yield and demonstrating control of pests by increasing the number of healthy pods by 30%. Future trials The strategy for future field trials is to: Continue with the high value fruit and vegetables; Increase the geographical spread; and Commence further trials on arable crops. The Group has already commissioned further trials on apples, grapes (table and wine), potatoes, melons, pears, peaches, olives, strawberries, blackberries, blueberries, raspberries, artichokes, pistachios, almonds, lettuce, tomatoes, cherries, cucumber and sugar beet. In addition to these, planning has commenced on trials of arable crops, for example barley, wheat and soy bean. These trials are being conducted in Europe, the Middle East, East Africa, South and Central America and the USA. A total of 170 field trials have already commenced, the majority of which are sponsored by independent third parties. Furthermore, a number of potential commercial partners are conducting their own trials on the Group s products and have agreed to share the results of those trials with the Group. 11

Pest Control BugOil During the year, the Group conducted 25 concurrent field trials on its proprietary, benign insect and mite control agent, BugOil in the USA, Europe, Africa and the UK. These results highlighted BugOil s pest control abilities, which are at least equal to those of commonly used pesticides, in addition to its significant environmental and safety benefits. These field trials, conducted by third parties, including contract research organisations, to regulatory standards (Good Experimental Practice), on highvalue crops such as ornamentals, fruit and vegetables, demonstrated that BugOil has the following benefits when compared with standard treatments: Significant pestrepellent properties when applied ahead of crop planting, reflected in an increased average crop yield in tomatoes of 42% against standard; Broadspectrum pest coverage, particularly for ornamentals such as cut flowers; and Several trials indicated increasing evidence of efficacy, suggesting that BugOil is at least equal to, if not better than current industry standards. An example of efficacy when measured against standard is in the control of mites on chrysanthemums, BugOil showed 100% control of mites three days after application, whereas the standard achieved this level only 14 days after application. Similar results were evidenced on other pests such as whitefly, thrips and aphids. The global ornamental plant market alone has an estimated value of US$540 million a year with an anticipated growth rate of 4% to 5%. In addition, BugOil offers a number of important safety and environmental benefits. As a benign agent it leaves no harmful residues and offers pesticide operators a safe way to minimize the risk of pesticide poisoning. Harmful residues on crops and operator safety are key regulatory and consumer concerns. Finding a safe and effective method of pest control without so many of the associated health and environmental side effects remains a key target for food producers. Future trials The Group has already commissioned further trials on ornamentals (roses) in East Africa. In addition to these, planning is for commencement of trials on fruit and vegetables. These trials are being conducted in Europe, East Africa, South and Central America and the USA. Furthermore, a number of potential commercial partners are conducting their own trials on BugOil and have agreed to share the results of those trials with the Group. Product Registrations Crop Nutrients Until recently there was no requirement to register Plant Impact crop nutrient products. However, recent developments in the regulatory environment means registrations could be required in the future. Plant Impact has already begun planning for such an eventuality. Registration work has commenced in France and Spain, both these countries are leading proponents of new registration requirements. An example of the changing regulatory environment is the introduction of REACH. This law entered into force on 1 June 2007. REACH is a new European Community Regulation on chemicals and their safe use (EC 1907/2006). It deals with the Registration, Evaluation, Authorisation and Restriction of Chemical substances. The aim of REACH is to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances. At the same time, innovative capability and competitiveness of the EU chemicals industry should be enhanced. The benefits of the REACH system will come gradually, as more and more substances are phased into REACH. The REACH Regulation gives greater responsibility to industry to manage the risks from chemicals and to provide safety information on the substances. Manufacturers and importers will be required to gather information on the properties of their chemical substances, which will allow their safe handling, and to register the information in a central database run by the European Chemicals Agency (ECHA). Pest Control The Group has continued to work on the registration dossiers for BugOil to be filed with each of the UK Pesticides Safety Directorate ("PSD") and the USA Environment Protection Agency ("EPA"). The dossiers are nearing completion with the toxicology work completed and final report being compiled. The Directors believe that the final dossier will be ready for filing with the PSD by quarter 3 2008 and with the EPA before the end of 2008. BugOil has been registered in Tanzania. 12

Intellectual Property The Group continues to file patents for its technologies. During the year the following patents have been granted: BugOil Europe; BugOil South Africa; and Alethea Morocco. Post 31 March 2008, the UK Intellectual Property Office granted a patent for Plant Impact s Speedo technology. Commercial Development In April 2008, the Group signed a significant, fiveyear agreement with Miller, to market and distribute three of Plant Impact s proprietary products, primarily in the US. Miller is a global manufacturer and distributor of specialty agricultural products and fertilisers. The agreement has already resulted in the Group securing orders worth US$100,000. This is Plant Impact s first marketing and distribution agreement in the US and as such represents a significant milestone, increasing the global reach of the Group s technologies and products. Under the agreement, Miller will market, distribute and provide branding support by displaying the Plant Impact logo on all products sold. In addition, this agreement allows for sales in other territories under the "Miller" brand name. This agreement centres around three of Plant Impact products: InCa improved fruit quality, longer shelf life and resistance to climate stress using Plant Impact's proprietary CaT technology; Cocoa Stress Tolerance "CST" increased marketable yield in cocoa (chocolate) production using the proprietary Alethea technology; and Balance accelerated harvest and improved fruit quality using the proprietary Speedo technology. Miller has a significant US network with access to over 400 distributors nationwide. It also has international partners outside the US in countries including Canada, several South and Central American countries, South Africa and Australia. In addition to agricultural crops, Miller also supplies growers of commodity row crops such as cotton, corn grains and soybeans. Miller boasts a strong sales and technical team including 26 fulltime sales representatives in the US. This agreement follows the successful completion of field trials conducted by Miller during the year ended 31 March 2008 on apples, pears and soybeans, the results of which are described above, following a evaluation agreement that was entered into in February 2006. In May 2008, the Group announced that it had signed an exclusive agreement with DVA, a global crop protection business, to distribute the benign insecticide Bionic in Tanzania, East Africa. Bionic is the trademark of Plant Impact s unique insect control agent BugOil and, in this application, will be targeted specifically at ornamental rose production in Tanzania. This is the first commercial agreement for Plant Impact s BugOil technology and demonstrates the proven commercial benefits of its use. Plant Impact and DVA anticipate strong market acceptance of the Bionic product in Tanzania and beyond. East Africa produces more than 200 million worth of roses per year, requiring US$32 million per year in pesticides, or six per cent. of the global pesticide market for ornamentals (US$540 million per annum). Roses in Tanzania suffer from a pest known as spider mite, which can rapidly devastate rose crops by puncturing plant cells and causing leaf tissues to collapse. During severe infestations the plant may turn yellow and decay. Mite damage may also appear as shortened stem (internodes) and leafstalk (petioles), failure to bloom, and twisted or distorted new growth. BugOil based Bionic is highly effective in controlling spider mite, as verified by independent trials conducted on roses. These trials were conducted to regulatory standard (Good Experimental Practice) and demonstrated that BugOil showed 100% control of mites three days after application, whereas the control used in the trials achieved this level only 14 days after application, similar results were achieved on other pests such as whitefly, thrips and aphids. Moreover, BugOil has the proven ability to control the 13

insecticideresistant populations of mites, making it a highly suitable product for the East African market. BugOil is also safe for operators to apply and is benign to the environment as it leaves no harmful residues. The Group continues to work with a number of other potential strategic partners with a view to entering into more distribution and/or licensing agreements and to build on its established networks in Europe, the Middle East, USA and South and Central America. The Group has also started to engage with food groups and supermarkets to establish the benefits to growers and consumers of using the Group s range of nutrient products. These are new audiences for the Group. By demonstrating that growers can improve their yields while reducing the amount of traditional nutrients that are applied to the crop, thereby improving their profitability, and by demonstrating to supermarkets that this approach produces crops that are healthier to eat, less damaging to the environment and have a longer shelf life, the Group is aiming to create a pull through of demand for its products from an audience that sees the commercial benefits that come from good environmental practice, which consumers are demanding increasingly. 14

Financial Review The Group s financial performance in the year and the associated loss was in line with internal projections. Our key focus is on strong cash management, the yearend balance at 2,979,926 is better than expected. Cash Flow The net cash outflow from operating activities was 1,610,859 (2007: 1,081,946). Capital expenditure was 29,721 (2007: 6,881). Interest received was 117,547 (2007: 63,362). The net proceeds from the placing in February 2008 amounted to 1,425,000. As a result cash and cash equivalents totalled 2,979,926 (2007: 3,077,959), a decrease of 98,033. Revenue In the year ended 31 March 2008, revenue was 284,853 (2007: 377,237), derived solely from Plant Impact crop nutrient products. The decrease from 2007 is the result of management s focus away from small local distributors to large national and global entities. Gross Profit In the year ended 31 March 2008, gross profit was 101,925 (2007: 108,250). The gross profit margin has improved from 28.7% in 2007 to 35.8% in 2008. Expenses Total expenses for the year were 2,069,269 (2007: 1,573,819). Expenses rose by 495,450 from 2007 as a result of increase expenditure on distribution and research and development. The increase in distribution expense is as a result of the sales and technical team being strengthened and a full year s support for Pi MENA. The research and development expense increase is mainly due to BugOil registration. Finance income and cost Finance income represents interest received from cash and cash equivalents amounting to 120,343 (2007: 70,599). Finance cost of 426,975 in the year ended 31 March 2007, represents interest and redemption premium on convertible loans which were converted in October 2006 when the Company floated on AIM. Income tax Income tax comprises tax credits booked against research and development eligible expenditure of 182,452 (2007: 98,010). The tax credit claims for the years ending 31 March 2007 and 31 March 2008 have yet to be submitted to HMRC. The claim for years ending 31 March 2005 and 31 March 2006 being 103,868 was received in June 2007. Loss for the year The loss for the year attributable to equity shareholder decreased to 1,664,549 (2007: 1,723,935). The increase in finance income, the reduction in finance costs and research and development tax credits increase more than compensating for the increase in expenditure. Michael Panteli Finance Director 23 June 2008 15

Board of Directors Martin Robinson NonExecutive Chairman Martin Robinson joined Plant Impact plc in June 2005 when he was appointed Nonexecutive Chairman. He is the Executive Chairman of Braemar Group plc, a property fund manager and whose shares are quoted on AIM, a Nonexecutive director at Regenesis Group plc, a shortterm asset finance company and a Nonexecutive director of several private companies. He was formerly Chief Executive of both Lloyd Street Private Equity, an FSA regulated company that specialises in raising finance for growing companies and 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. Mark Wyatt NonExecutive Director Mark was appointed as a Nonexecutive Director on 28 September 2006, having been an observer on behalf of the RisingStars Growth Fund, a Plant Impact shareholder. Mark is employed by Enterprise Ventures Limited, investment manager of the RisingStars Growth Fund. Prior to joining RisingStars Growth Fund, Mark was an associate at Merlin Biosciences. He has a degree and PhD in Pharmacology, the PhD being from the Glaxo Institute of Applied Pharmacology at Cambridge University. He has an MBA from the University of Warwick, where he was awarded a Sainsbury Fellowship in Life Sciences. William Thompson NonExecutive Director Bill joined BioFutures Pi as a Nonexecutive Director in May 2004 and was appointed as a Nonexecutive Director on the formation of the Company in June 2005. He is Managing Director of Microcheck Technical Services, a food testing laboratory acquired by him in 2004. He was a founder and Chief Executive of InPlanta, an agricultural biotechnology start up company. He spent 17 years at Dow Chemicals, latterly as Global Business Leader for Insecticides and Fungicides, where he increased sales from $65 million to $130 million over four years. Gordon Harman NonExecutive Director Gordon is a Chartered Accountant and joined the Company in June 2005 as Finance Director. He is the former Finance Director of Holidaybreak plc, having been part of the MBO team that acquired the business and Finance Director at the time of its flotation. He is a former Chairman of La Tasca Restaurants Limited, Finance Director of International Life Leisure Group Limited and Nonexecutive director of a number of other private companies. Gordon had a parttime executive service contract with the Company committing 12 days per month. As of 8 May 2007, Gordon stepped down as Finance Director of the Company, however he remains with the Company as nonexecutive Director. Peter Blezard Chief Executive Officer Peter is a founder shareholder of the Company. He is a Fellow of the Royal Society of Arts, Manufacturers & Commerce. Peter has extensive experience in pioneering new products into new markets and in working with major companies on a global basis at board level. Previous roles include General Manager of Pak 2000, a division of Asia Pulp and Paper, between 1988 and 2000, where his core duties were European sales and marketing. His responsibilities also include working with national security agencies and meeting governments in Europe, Asia and the Far East. He also has experience in the strategic planning of new factories in Indonesia and China, with projects to ISO9000 standards. Peter cofounded Plant Impact in 2003, and has recently accepted the Bio entrepreneur award as sponsored by UK Trade & Investment and London First in recognition of Plant Impact s work to date. David Marks Chief Technical Officer David is the inventor of the Group s key technologies. David is a plant and soil scientist and a graduate in Applied Biology. He started his career with the Campden & Chorleywood Food Research Association before joining a multinational fertilizer manufacturer as a Technical Officer, where he organized field trials of specialty fertilizers throughout Europe and the Middle East, rising to become a director in 2002, with responsibility for technical work and sales in Europe, the Middle East and Africa. David cofounded Plant Impact in 2003, and has since won Young Biotechnologist of the Year (Bionow awards) in recognition of his scientific work with the Group. He has lectured at the Royal Society of Chemistry, the Society of Chemical Industry and International Plant Protection Congress seminars, is widely published in the industry for his work on botanical pest control and plant stress chemistry and is an expert reviewer for the journal Pest Management Science. Michael Panteli Finance Director Mike was appointed fulltime Finance Director on 8 May 2007. He is a Chartered Management Accountant, has an economics and finance degree and has recently been awarded the ACCA diploma in International Financial Reporting. Mike moved from Intercytex Group plc ("Intercytex"), where he served as Financial Controller. During his six years at Intercytex, he was a key member of the finance and management teams overseeing the development of Intercytex from a venture capital backed biotechnology company through to admission to trading on AIM. Prior to Intercytex, he served as Financial Director of Telescope Technologies Limited, a manufacturer of large telescopes. 16

Advisors Nominated Advisor Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU Joint Brokers Fiske Plc Salisbury House London Wall London EC2M 5QS Hichens, Harrison & Co. plc Bell Court House 11 Blomfield Street London EC2M 1LB Financial PR Abchurch Communications Limited 100 Cannon Street London EC4N 6EU Independent Auditors Grant Thornton UK LLP 4 Hardman Square Spinningfields Manchester M3 3EB Registrars Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Bankers National Westminster Bank plc PO Box 76 1st Floor, 13 New Market Street Blackburn BB1 7EN Solicitors Halliwells LLP 3 Hardman Square Spinningfields Manchester M3 3EB Registered Office Plant Impact plc 2 Lockside Office Park Lockside Road Riversway Preston PR2 2YS 17

Group Directors Report The Directors present their report and audited financial statements for the year ended 31 March 2008. Principal activity The principal activity of the Group is focused on plant stress management. As such the Group continues to research, develop and commercialise crop nutrient and natural pest control products that improve the health and productivity of crops, whilst being inherently nontoxic and ecologically sound. Results and dividends The loss for the year after taxation amounted to 1,664,549 (2007: loss 1,723,935). The directors do not recommend the payment of any dividends. Review of business The review of the business during the financial year and at the balance sheet date, together with the Company s principal risks and uncertainties and further developments have been disclosed within the Chairman s Statement, Business and Financial Reviews on pages 3, 5 and 15 respectively. Directors and their interests The Directors who held office during the year were: M Robinson (Chairman) P Blezard (Chief Executive Officer) D Marks (Chief Technical Officer) M Panteli (Finance Director and Company Secretary) M Wyatt (Nonexecutive) W Thompson (Nonexecutive) G Harman (Nonexecutive) The Directors at 31 March 2008 and their beneficial interests in the share capital of the Company were as follows: Executive Directors P Blezard D Marks M Panteli Nonexecutive Directors M Robinson M Wyatt W Thompson G Harman 2008 Ordinary shares of 1p each 716,860 716,860 49,910 499,150 2007 Ordinary shares of 1p each 716,860 716,860 49,910 499,150 On the 8 May 2007, G Harman stepped down as parttime Finance Director and remains on the Board as a Nonexecutive Director. On the same date M Panteli was appointed as fulltime Finance Director. Details of the Directors interests in options to subscribe for shares in the Company are provided in the Directors Remuneration Report set out on pages 23 to 24. 18

Substantial shareholdings The Directors are aware of the following shareholdings exceeding 3% of the Company s share capital as of 8 June 2008: RisingStars Growth Fund Axa Framlington Investment Management Gartmore Investment Management plc Majedie Investments plc Blackrock Investment Management Lancashire County Developments (Investments) Limited YFM Private Equity Limited Alliance Cornhill Number 4,438,684 2,495,000 2,167,319 1,794,680 1,137,872 913,157 869,473 851,063 Ordinary Shares % 16.9 9.5 8.2 6.8 4.3 3.5 3.3 3.2 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 24. Principal risks and uncertainties Early stage development risk 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 startup 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. Commercial risk 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, multinational agrochemical companies which are conducting field trials with a view to entering into distribution and/or licensing agreements and also marketing partnerships. 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. Currently, a significant proportion of the Group's revenues are generated in the Middle East through an exclusive sales agency agreement with PiMENA. The loss of this contract could lead to a significant reduction in the Group's sales. Competition and intellectual property risk Competitors may develop technologies which are more effective or economic 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. Manufacturing The Group uses contract manufacturers for all medium and high volume production of its products. If the Group succeeds as expected in developing commercially viable products, these products will 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. 19

Financial 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 deals 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 postponement or cancellation of programmes and/or scale back of operations. Research and development All research and development costs have been charged directly to the Group income statement for the year ended 31 March 2008 amounting to 945,627 (2007: 690,780). Further details of research and development progress is outlined within the Chairman s Statement and Business Review on pages 3 and 5 respectively. Key Performance Indicators (KPIs) The KPIs of the business are the progress towards commercialisation of products, research and development progress and the management of cash resources (both funding and cash outflows), as reviewed in the Chairman s Statement on page 3. Other financial KPIs reviewed by the Directors are gross margin, research and development expenditure and capital expenditure as reviewed within the Chairman s Statement, Business and Financial Reviews on pages 3, 5 and 15 respectively. The Board also monitor nonfinancial KPIs against internal targets in relation to the number of specific field trials conducted and the outcome from a commercial and environmental perspective. Creditors 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. The number of trade creditor days at 31 March 2008 was 68 days (2007: 65 days). 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 discriminate in the recruitment and promotion of staff. All employees are included in the Group s bonus incentive plan and have historically been awarded share options. As at 31 March 2008, the Group employed 8 staff (2007: 6). Safety, Health and Environment Plant Impact plc 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 year, a qualifying third party indemnity provision for the benefit of certain Directors was in place. Going concern The Directors have reviewed the Group s budgets and forecasts with respect to its financial position as at 31 March 2008. After taking into consideration the cash flow implications of these plans, the Directors are satisfied that it is appropriate to produce the Group financial statements on a going concern basis. By order of the board. M Panteli Secretary 23 June 2008 20

Corporate Governance Statement The Company's shares are listed on the Alternative Investment Market (AIM) and as such there is no requirement to publish a detailed Corporate Governance Statement nor comply with all of the requirements of the Combined 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 period ended 31 March 2008, relevant to the Group s size and complexity. The Board 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 currently comprises three Executive and four NonExecutive Directors. The NonExecutive Directors, namely Martin Robinson, Mark Wyatt, William Thompson and Gordon Harman, all have relevant and complementary expertise gained from differing business backgrounds, materially enhancing the judgment and overall performance of the Board. The Board believes that the NonExecutive Directors are all independent, notwithstanding that three of the four NonExecutive Directors were granted options one year prior to AIM admission, when the Company was a private company. It is common practice amongst venture capital owned companies to offer share options in order to attract the services of high calibre Non Executives. Martin Robinson and Gordon Harman are also shareholders. As part of its leadership and control of the Company, 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. The Board which meets regularly, at least ten times per year, receives timely documentation ahead of meetings which includes reports from all members of the Executive Committee on their areas of responsibility. Board Committees The Board has established Audit and Remuneration Committees, each with defined terms of reference. Audit Committee This comprises the NonExecutive Directors with Martin Robinson as Chairman. The Committee meets at least twice each year and the meetings are arranged to tie in with the Company 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 NonExecutive Directors with Martin Robinson 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 sharebased compensation schemes and awards for all levels of the employees in the Company. The Directors Remuneration Report is set out on pages 23 to 24. 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 company 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 reforecasting of projected results. 21 The Group has established an Executive Committee comprising Executive Directors and all other functional heads. The Executive Committee meets at least once a month to monitor and review progress on each of the Company 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 Company 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 Company s website. This provides additional information about the Company and allows access to reports and accounts, press releases and other materials issued by the Company. There is also an opportunity at the Company 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 website and via the Stock Exchange website (www.londonstockexchange.com) using the symbol PIM. Plant Impact s shares are also traded on the PLUS Market (www.plusmarketsgroup.com) using the symbol PIM. Statement of Directors Responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the parent company and of the Group as at the end of the financial year and of the profit or loss of the Group for the financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The Directors have elected to prepare the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP). In preparing these financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgments and estimates that are reasonable and prudent; for the Group financial statements, state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements; for the Parent Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping proper accounting records that 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 1985. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Directors are aware: there is no relevant audit information of which the Company s auditors are unaware; and the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company s website, www.plantimpact.com. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Auditors Grant Thornton UK LLP offer themselves for reappointment as auditors in accordance with section 385 of the Companies Act 1985 and a resolution for their reappointment will be proposed at the forthcoming Annual General Meeting. On behalf of the Board Peter Blezard Chief Executive Officer 23 June 2008 22

Directors Remuneration Report Remuneration Policy (unaudited) The Committee s policy is to set remuneration packages for Executive Directors that are competitive with the market, allowing the Company 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 sharebased payments, which together constitute a potentially significant proportion of the total remuneration opportunity. The remuneration of Executive Directors comprises the following elements: Basic Salary 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. Benefits These comprise of life insurance cover. Share Based Payments Executive share options have historically been granted to Directors under share option schemes operated by the Company. 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 exercisable two years from date of grant and subject to continued employment. Bonus The Company operates a discretionary bonus scheme. Pension Arrangements The Company operates a stakeholder pension scheme. Directors Contracts (unaudited) Each Executive Director has a service contract of indefinite term with a notice period of no more than one year. NonExecutive 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, Mark Wyatt from 28 September 2006, William Thompson from 24 June 2005 and Gordon Harman from 8 May 2007. Directors Remuneration (audited) Details of the remuneration (excluding sharebased payments) of those who served as Directors are set out below: Basic Salary Bonus Benefits 31 March 2008 31 March 2007 Executive Directors P Blezard D Marks G Harman M Panteli * 111,638 107,887 5,417 75,337 7,500 5,000 5,000 3,732 1,392 122,870 114,279 5,417 80,337 93,073 89,985 72,364 Nonexecutive Directors M Robinson M Wyatt ** W Thompson G Harman *** Total 25,000 15,000 15,000 14,715 369,994 17,500 5,124 Benefits in kind relate to life insurance cover and no directors waived emoluments. 25,000 15,000 15,000 14,715 392,618 24,300 7,654 15,000 302,376 * On the 8 May 2007, M Panteli was appointed to the Board as Finance Director. ** The amount payable to M Wyatt in respect to his engagement as a Director of the Company is paid to Enterprise Ventures Limited, the investment manager of the RisingStars Growth Fund. *** On the 8 May 2007, G Harman stepped down as Finance Director to become a NonExecutive Director. 23

Directors Share Options At 31 March 2008, the Directors had options to subscribe for ordinary shares under the Company s share option scheme as follows: Executive Directors P Blezard D Marks M Panteli Nonexecutive Directors M Robinson M Wyatt G Harman W Thompson Options held at 1 April 2007 271,290 924,773 271,290 924,773 90,440 271,290 151,020 2,904,876 Options granted in the year 75,000 75,000 Options held at 31 March 2008 271,290 924,773 271,290 924,773 75,000 90,440 271,290 151,020 2,979,876 Exercise price 29.49p 38p 29.49p 38p 50p 29.49p 29.49p 1p Date of grant 10 Nov 2005 16 Oct 2006 10 Nov 2005 16 Oct 2006 20 May 2007 10 Nov 2005 10 Nov 2005 10 Nov 2005 Expiry date 10 Nov 2015 16 Oct 2016 10 Nov 2015 16 Oct 2016 7 May 2018 10 Nov 2015 10 Nov 2015 10 Nov 2015 None of the terms and conditions of the share options scheme were varied during the year and all options were granted in respect of qualifying services. The market price of the Company s shares at the end of the financial year was 46.5p and the range of market prices during the year was between 44.5p and 58.0p. Martin Robinson Chairman of the Remuneration Committee 23 June 2008 24

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") of Plant Impact plc for the year ended 31 March 2008, which comprise the Group Income Statement, the Group Statement of Changes in Equity, the Group Balance Sheet, the Group Cash Flow Statement, Notes to the Group Financial Statements, the Company Balance Sheet and Notes to the Company Balance Sheet. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Company s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company s members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company 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 The Directors' responsibilities for preparing the Annual Report and the Group financial statements in accordance with United Kingdom law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and for preparing the parent Company financial statements in accordance with United Kingdom law and Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors Responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Group Directors' Report is consistent with the financial statements. The information given in the Group Directors Report includes that specific information presented in the Chairman s Statement, Business Review and Financial Review that is cross referred from the Business Review section of the Group Directors Report. In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed. We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Key Events and Highlights, Chairman s Statement, Business Review, Financial Review, Board of Directors and Group Directors' Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group and Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion: the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the Group s affairs as at 31 March 2008 and of its loss for the year then ended; the Group financial statements have been properly prepared in accordance with the Companies Act 1985; the parent Company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the parent Company s affairs as at 31 March 2008; the parent Company financial statements have been properly prepared in accordance with the Companies Act 1985; and the information given in the Group Directors' Report is consistent with the financial statements. 25 GRANT THORNTON UK LLP Registered Auditors / Chartered Accountants Manchester 23 June 2008

Group Income Statement For the year ended 31 March 2008 Revenue Note 5 31 March 2008 284,853 31 March 2007 377,237 Cost of sales (182,928) (268,987) Gross profit 101,925 108,250 Distribution costs Research and development costs General and administrative expenses 11 (310,901) (945,627) (812,741) (119,433) (690,780) (763,606) Total expenses (2,069,269) (1,573,819) Operating loss 7 (1,967,344) (1,465,569) Finance income Finance cost Finance income / (costs) net 9 10 120,343 120,343 70,599 (426,975) (356,376) Loss before tax (1,847,001) (1,821,945) Income tax credit 13 182,452 98,010 Loss for the year attributable to equity shareholders of the Company (1,664,549) (1,723,935) Loss per share attributable to equity shareholders of the Company during the year Total and continuing: Basic and diluted (pence) 15 (0.07) (0.12) All revenue and costs originate from continuing activities. The notes on pages 30 to 50 are an integral part of these Group financial statements. 26

Group Statement of Changes in Equity For the year ended 31 March 2008 At 1 April 2006 Share capital 79,878 Share premium 844,812 Other reserve 80,815 Merger reserve 182,892 Retained earnings (1,410,923) Total equity (222,526) Loss for the year Issue of shares Share based payments Share issue expenses Balance at 31 March 2007 151,315 231,193 5,598,685 (424,234) 6,019,263 107,641 188,456 182,892 (1,723,935) (3,134,858) (1,723,935) 5,750,000 107,641 (424,234) 3,486,946 Loss for the year Share based payments Proceeds from placing 21 February 2008 Share issue expenses 31,915 1,468,085 (75,000) 211,190 (1,664,549) (1,664,549) 211,190 1,500,000 (75,000) Balance at 31 March 2008 263,108 7,412,348 399,646 182,892 (4,799,407) 3,458,587 Total recognised income and expense recognised directly to equity amounts to nil (2007: nil). Other reserve The other reserve comprises of 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 notes on pages 30 to 50 are an integral part of these financial statements. 27

Group Balance Sheet As at 31 March 2008 ASSETS Noncurrent assets Intangible assets Property, plant and equipment Current assets Inventories Trade and other receivables Corporation tax receivable Cash and cash equivalents Note 16 17 18 19 19 20 2008 585,383 29,470 614,853 3,793 212,019 176,594 2,979,926 3,372,332 2007 585,383 6,842 592,225 3,030 125,025 98,010 3,077,959 3,304,024 Total assets 3,987,185 3,896,249 LIABILITIES Current liabilities Trade and other payables 21 (528,598) (528,598) (409,303) (409,303) Total liabilities (528,598) (409,303) Net assets 3,458,587 3,486,946 EQUITY Equity attributable to equity shareholders of the Company Share capital Share premium Other reserve Merger reserve Retained earnings Total Equity 22 263,108 7,412,348 399,646 182,892 (4,799,407) 3,458,587 231,193 6,019,263 188,456 182,892 (3,134,858) 3,486,946 The Group financial statements were approved by the Board of Directors on the 23 June 2008 and were signed on its behalf by: W. M. Robinson Chairman The notes on pages 30 to 50 are an integral part of these Group financial statements. 28

Group Cash Flow Statement For the year ended 31 March 2008 Cash flows from operating activities Loss before tax Adjusted for: Depreciation Share based payments Deferred finance costs on convertible loan notes 2008 Finance income Finance cost Working capital changes: (Increase) / decrease in trade and other receivables (Increase) / decrease in inventories (Decrease) / increase in trade and other payables Note 17 23 9 10 31 March 2008 (1,847,001) 7,093 211,190 (120,343) (84,198) (763) 119,295 31 March 2007 (1,821,945) 3,785 107,641 30,155 (70,599) 426,975 307,720 4,801 (20,701) Cash generated from operations 34,334 291,820 Interest paid Research and development tax credit received 103,868 (49,778) Net cash outflow from operating activities (1,610,859) (1,081,946) Cash flows from investing activities Purchase of property, plant and equipment Interest received Net cash generated from investing activities 17 (29,721) 117,547 87,826 (6,881) 63,362 56,481 Cash flows from financing activities Proceeds from issue of share capital (net of expenses) Proceeds from issue of convertible loan notes Proceeds from issue of loan notes Repayment of loans Net cash generated from financing activities 22 1,425,000 1,425,000 3,428,766 100,000 143,444 (15,556) 3,656,654 Net (decrease) / increase in cash and cash equivalents (98,033) 2,631,189 Cash and cash equivalents at the beginning of the year 3,077,959 446,770 Cash and cash equivalents at the end of the year 2,979,926 3,077,959 The notes on pages 30 to 50 are an integral part of these financial statements. 29

Notes to the Group Financial Statements 1. Nature of operations and general information Plant Impact plc 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 2 Lockside Office Park, Lockside Road, Riversway, Preston, PR2 2YS, United Kingdom. Plant Impact plc's shares are quoted on the Alternative Investment Market (AIM) and are traded on the PLUS Market. The principal activities of the Group are described in the Group Directors report. The registered number of the company is 05442961. The Group financial statements of Plant Impact plc ("the Company") for the year ended 31 March 2008 were authorised for issue in accordance with a resolution of the Board of Directors on the 23 June 2008. 2. Significant Accounting Policies Statement of compliance The consolidated financial statements of Plant Impact plc have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Basis of preparation The financial statements have been prepared under the historical cost convention except that they have been modified to include the revaluation of certain noncurrent assets, financial assets and liabilities. Plant Impact plc's Group financial statements were prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) until 31 March 2007. The date of transition to IFRS was 1 April 2006. The comparative figures in respect of 2007 have been restated to reflect changes in accounting policies as a result of adoption of IFRS. The disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS are given in the reconciliation schedules, presented and explained in note 29. The Group has taken advantage of certain exemptions available under IFRS 1 First time adoption of International Financial Reporting Standards. The exemptions used are explained under the respective accounting policy. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these Group financial statements. Basis of consolidation The Group annual financial statements comprise the financial statements of Plant Impact plc and its subsidiaries as at 31 March 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. Intercompany 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. The Group has elected not to apply IFRS 3 Business Combinations retrospectively to business combinations prior to 1 April 2006. Accordingly, the classification of the combinations (acquisition and merger) remain unchanged from that used under UK GAAP. Assets and liabilities are recognised at date of transition if they would be recognised under IFRS, and are measured using their UK GAAP carrying amount immediately postacquisition as deemed cost under IFRS, unless IFRS requires fair value measurement. 30

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. Interest income Interest income represents bank interest received and is recognised on an accruals basis. Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire noncurrent assets are recognised as deferred income in the Balance Sheet and transferred to profit or loss on a systematic and rational basis over the useful life of the related assets. Other government grants are recognised as income over the periods necessary to match them with costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period for which they become receivable. Goodwill 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. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately after acquisition in the income statement. 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; 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. Regulatory and other uncertainties generally mean that such criteria are not met; in particular, the Group will not recognise the research and development costs attributable to a product development programme prior to grant of a marketing licence for the product or until there is evidence of future repeat sales generating probable future economic benefits. Development costs not meeting the criteria for capitalisation are expensed as incurred. 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: Laboratory and office equipment 33.3% 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 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 assets recoverable amount is the higher of an assets or cashgenerating units fair value less costs to sell (separable identifiable cash flows) and its valueinuse and is determined for an individual asset, unless the 31

asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets. 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 valueinuse, the estimated future cash flows are discounted to their present value using a pretax 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. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above. 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. Nonmonetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Nonmonetary 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. 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 nonmonetary items are recognised in the statement of changes in equity to the extent that they relate to a gain or loss on that nonmonetary item taken to the statement of recognised income and expenses, otherwise such gains and losses are recognised in the Group income statement. Taxation Credit is taken in the accounting period for research and development tax credits, which will be claimed from Her Majesty s Revenue & Customs (HMRC), in respect of qualifying research and development 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. 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. It is recognised in the income statement 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 (AFS) 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 in these financial statements. 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 nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. 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 32

the writedown is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows. 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. A financial asset is transferred if the contractual rights to receive the cash flows of the asset have been transferred or the Group retains the contractual rights to receive the cash flows of the asset but assumes a contractual obligation to pay the cash flows to one or more recipients. A financial asset that is transferred qualifies for derecognition if the Group transfers substantially all the risks and rewards of ownership of the asset, or if the Group neither retains nor transfers substantially all the risks and rewards if ownership but does transfer control of that asset. Financial liabilities 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. Financial liabilities categorised as at fair value through profit or loss (FVTPL) are recorded initially at fair value, all transaction costs are recognised immediately in the income statement. 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 interestrelated 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 instruments Classification as equity or financial liability 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. 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. Compound instruments Compound instruments comprise both a liability and an equity component. The elements of a compound instrument are classified in accordance with their contractual provisions. At the date of issue, the liability component is recorded at fair value and thereafter the liability component is accounted for as a financial liability in accordance with the accounting policy set out above. The residual is the equity component, which is accounted for as an equity instrument. The Group has deemed that the best evidence of the fair value of a financial instrument at initial recognition is the transaction price (i.e. the fair value of the consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. This may result in no gain or loss being recognised on the initial recognition of a financial asset or financial liability. In such a case a gain or loss shall be recognised after initial recognition only to the extent that it arises from a change in a factor (including time) that market participants would consider in setting a price. 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 firstin, firstout (FIFO) basis. Share based payments All share based payment arrangements granted after 7 November 2002 that had not vested prior to 1 April 2006 are recognised in the Group financial statements. The cost of equitysettled 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 BlackScholes pricing model. In valuing equitysettled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of the Company (market conditions). 33

If vesting periods or other nonmarket 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 equitysettled sharebased 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. Other share based payments During the year, the Group has issued share options to its brokers for annual services rendered. These services have been valued at their fair value as they are received and are charged to the Group Income Statement with a corresponding credit to equity. The fair value has been determined using the Black Scholes pricing model. 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. Leases of land and buildings are split into land and buildings elements according to the relative fair values of the leasehold interests at the date of entering into the lease agreement. 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 equitysettled sharebased employee remuneration until such share options are exercised; "Merger reserve" arose on the acquisition of PI Bioscience Limited under previous GAAP; "Retained earnings" 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. Revenue Recognition In making their judgement, the Directors consider the detailed criteria for the recognition of revenue from the sale of goods set out in IAS 18 Revenue and, in particular, whether the Group had transferred to the buyer the significant risk and rewards of ownership of the goods. The Directors are satisfied that the significant risks and rewards have been transferred and that recognition of the revenue in the current year is appropriate. 34

Research and development activities Management have reviewed the Group s research and development activities and have made estimates and judgements on the amount of development expenditure it is appropriate to capitalise. The criteria which management have to make judgements about are set out in note 2. Share based incentive arrangements Share based incentive arrangements are provided to management and certain employees. These are valued at the date of grant using the BlackScholes option pricing model and management have to exercise judgement over the likely exercise period, interest rate and share price volatility. Management uses various sources of information including its own share price performance. Or where there is insufficient history the performance of comparable listed entities, experience from the historical exercise of options and published data on bank base rates. Taxation Management has not recognised deferred tax assets in relation to unrelieved tax losses. AIM admission expenditure Management have reviewed the expenditure relating to admission and placing on AIM and, where appropriate, made judgements as to how much of the expenditure related to the placing of existing shares, and should therefore be charged to the Group Income Statement, and how much related to the placing of new shares, and should therefore be charged against share premium. Key sources of estimation uncertainty Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use which goodwill has been allocated. 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 16. 4. Adoption of new and revised standards Standards and Interpretations in issue not yet adopted At the date of authorisation of these Group financial statements, the following Standards and Interpretations were in issue but not yet effective: IFRS 8 Operating Segments IFRS 8 was issued in November 2006 and is effective for the periods beginning on or after 1 January 2009. This IFRS specifies how an entity should report information about its operating segments in its financial statements. Generally, financial information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. As the changes are presentational only, the adoption will have no impact upon the results or net assets of the Group. IFRIC 12 Service Concession Arrangements IFRIC 12 is effective for periods beginning on or after 1 January 2008. This IFRIC clarifies how certain aspects of existing IASB literature are to be applied to service concession arrangements, which are arrangements whereby a government or other body grants contracts for the supply of public services such as roads, energy distribution, prisons or hospitals to private operators. As the Group does not enter into such arrangements, the adoption will have no impact upon the results or net assets of the Group. IFRIC 13 Customer Loyalty Programmes IFRIC 13 is effective for periods beginning on or after 1 July 2008. This IFRIC addresses accounting by entities that grant loyalty award credits to customers who buy other goods or services. It requires the award to be accounted for as a separate component of the sale transaction, with the fair value of the award being deferred until the obligation to provide free or discounted goods or services has been redeemed. As the Group does not operate such schemes, the adoption will have no impact upon the results or net assets of the Group. IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interpretation IFRIC 14 is effective for periods beginning on or after 1 January 2008. Paragraph 58 of IAS 19 Employee Benefits limits the measurement of the defined benefit asset in a pension plan to the present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. IFRIC 14 clarifies how to measure this limit in the case of plans subject to a minimum funding requirement. As the Group only offers a stakeholder pension scheme whereby no contributions are currently made by employees and does not have a pension surplus, the adoption will have no impact upon the results or net assets of the Group. 35

IAS 1 Presentation of Financial Statements (revised 2007) IAS 1 (revised 2007) is effective for periods beginning on or after 1 January 2008. As the changes are presentational only the adoption will have no impact upon the results or net assets of the Group. IAS 23 (Revised) Borrowing Costs IAS 23 (revised) is effective for periods beginning on or after 1 January 2009. This amendment requires the capitalisation of borrowing costs, to the extent they are directly attributable to the acquisition, production or construction of assets that need a period of time to get ready for their intended use or sale. As the Group does not have any borrowing costs directly attributable to qualifying assets, the adoption will have no impact upon the results or net assets of the Group. Amendments to IAS 32 Financial Instruments: Disclosure and Presentation This amendment is effective for periods on or after 1 January 2009. As the changes are presentational only the adoption will have no impact upon the results or net assets of the Group. Amendment to IFRS 2 Share based payment vesting conditions and cancellations This amendment is effective for periods on or after 1 January 2009 and should be applied retrospectively. The amendment to the standard may require the Group to restate the grant date fair value of certain share based payments whereby nonvesting conditions apply. As the Group currently has one share based payment arrangement the adoption of the standard may have an impact upon the results of net assets of the Group. IFRS 3 Business Combinations (revised 2008) and IAS 27 Group and Separate Financial Statements This revision is effective for periods on or after 1 July 2009. The revised standard introduces changes to the accounting requirements for business combinations, transactions with noncontrolling interests and the loss of control of a subsidiary. The Group has no plans to adopt the revised standard in advance of its mandatory implementation date and it is not possible to quantify the effect of the standard on future business combinations until those combinations take place. 36

5. Revenue All revenue is generated from continuing operations, the analysis of which is as follows: Sale of goods 31 March 2008 284,853 31 March 2007 377,237 6. Segment information The Group has two primary reporting segments, crop nutrients and pest control. The secondary segment is based on geographical location. The segment results for the year ended 31 March 2008 are as follows: Segment revenue Operating loss Finance income (Loss) before income tax Income tax credit Loss for the year Depreciation Other noncash movements Crop nutrients 284,853 (267,335) (267,335) (267,335) Pest control (191,823) (191,823) (191,823) Unallocated (1,508,186) 120,343 (1,387,843) 182,452 (1,205,391) (7,093) (211,190) Group 284,853 (1,967,344) 120,343 (1,847,001) 182,452 (1,664,549) (7,093) (211,190) The segment results for the year ended 31 March 2007 are as follows: Segment revenue Operating loss Finance income Finance cost (Loss) before income tax Income tax credit Loss for the year Depreciation Other noncash movements Crop nutrients 377,237 (59,294) (59,294) (59,294) Pest control (141,546) (141,546) (141,546) Unallocated (1,264,729) 70,599 (426,975) (1,621,105) 98,010 (1,523,095) 3,785 107,641 Group 377,237 (1,465,569) 70,599 (426,975) (1,821,945) 98,010 (1,723,935) 3,785 107,641 The segment assets and liabilities at 31 March 2008 and capital expenditure for the year then ended are as follows: Assets Liabilities Capital expenditure tangible Crop nutrients 132,009 (104,185) Pest control 588,337 (51,295) Unallocated 3,266,839 (373,118) 29,721 Group 3,987,185 (528,598) 29,721 The segment assets and liabilities at 31 March 2007 and capital expenditure for the year then ended are as follows: Assets Liabilities Capital expenditure tangible Crop nutrients 83,035 (89,735) Pest control 586,859 (65,614) Unallocated 3,226,355 (253,954) 6,881 Group 3,896,249 (409,303) 6,881 37

All assets and capital expenditure are located within the United Kingdom. The analysis of revenue by destination is as follows: United Kingdom Europe Middle East & North Africa Americas 7. Operating loss for the year The operating loss for the year is stated after charging: Auditors remuneration (note 12) Depreciation (note 17) Operating lease rentals: Land and buildings Grant income repaid Foreign exchange differences Reversal of impaired losses on trade receivables Share based payments (note 23) 31 March 2008 4,500 22,263 197,985 60,105 284,853 31 March 2008 75,500 7,093 23,308 419 (13,157) 211,190 31 March 2007 15,240 68,108 293,889 377,237 31 March 2007 195,552 3,785 22,599 9,594 36,661 107,641 8. Staff costs The total amounts for Directors remuneration and other benefits are as follows: Directors remuneration Aggregate emoluments Share based payments 31 March 2008 392,618 115,743 508,361 31 March 2007 302,376 106,787 409,163 Highest paid Director The above includes remuneration of the highest paid Director as follows: Aggregate emoluments Share based payments 31 March 2008 122,870 54,330 177,200 31 March 2007 93,073 36,397 129,470 The total employment cost during the period was as follows: Wages and salaries Social security costs Share based payments to Directors Share based payments to employees 31 March 2008 572,451 61,082 115,743 8,816 758,092 31 March 2007 365,105 42,964 106,787 854 515,710 38

The average number of employees for the period was: Administration Management Research and development Sales and technical 31 March 2008 No. 1 3 2 2 8 31 March 2007 No. 1 3 2 6 9. Finance income Bank interest receivable 31 March 2008 120,343 31 March 2007 70,599 10. Finance cost Bank loan interest Other loan interest Convertible loan note interest Premium on conversion of convertible loan notes 31 March 2008 31 March 2007 808 22,372 9,716 394,079 426,975 11. Research and development costs All research and development costs have been charged directly to the Group income statement for the year ended 31 March 2008 amounting to 945,627 (2007: 690,780). 12. Auditors remuneration Services provided by the Company s auditors and its associates: Fees payable to Company auditor for the audit of Parent and Group financial statements Other fees to auditors: the audit of Company s subsidiaries pursuant to legislation tax services Corporate finance services: reporting accountants AIM Admission fees NOMAD AIM Admission fees NOMAD annual fees 13. Income tax credit Recognised in the Group income statement Current tax credit Current tax Adjustments for prior years Total tax in Group income statement 31 March 2008 17,500 3,000 34,750 55,500 20,000 20,000 75,500 31 March 2008 (102,397) (80,055) (182,452) 31 March 2007 12,762 3,000 7,950 23,712 70,250 91,590 10,000 171,840 195,552 31 March 2007 (98,010) (98,010) 39

Reconciliation of effective tax rate Loss before tax Loss before tax multiplied by rate of corporation tax in the UK of 30% (2007: 30%) Nondeductible expenses Research & development tax credit Effect of adjustment in tax rates Movements in deferred tax not recognised Overprovided in prior years Total tax in Group income statement 31 March 2008 (1,847,001) (528,111) 17,922 (63,998) 66,063 405,727 (80,055) (182,452) 31 March 2007 (1,821,945) (546,584) 217,850 (46,376) 375,110 (98,010) (98,010) Unrelieved tax losses of 3,037,346 (2007: 2,023,847) remain available to offset against future taxable trading profits. During the year, as a result of the change in the UK Corporation Tax rates which will be effective from 1 April 2008, deferred tax balances have been remeasured. Deferred income tax relating to temporary differences expected to reverse after 1 April 2008 is measured at the tax rate of 28% as these are the tax rates that are likely to apply on reversal. 14. 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 Company makes taxable profits arising from the same trade. As the availability of future of profits is uncertain, it has been assumed that the losses will not be recoverable in the foreseeable future. Deferred income tax assets which have not been recognised comprise of the following amounts: Capital allowances Temporary difference relating to share based payments Tax losses 31 March 2008 3,058 94,966 850,457 948,481 All amounts are calculated at 28% (2007: 30%) using the balance sheet liability method. 31 March 2007 348 56,538 607,154 664,040 15. Loss per share The loss per share is based on the loss of 1,664,549 (2007: 1,723,935) and 23,460,332 (2007: 14,859,506) ordinary shares of 1p each, being the weighted average number of shares in issue during the period. The weighted average number of ordinary shares for the year ended 31 March 2008 includes those issued during the Placing of February 2008: 3,191,490 shares. Loss attributable to equity holders of the Group () Weighted average number of ordinary shares in issue Basic and diluted loss per share (pence) 31 March 2008 (1,664,549) 23,460,332 (0.07) 31 March 2007 (1,723,935) 14,869,506 (0.12) The share options in issue are antidilutive in respect of the basic loss per share calculation and have therefore not been included. 40

16. Intangible assets 31 March 2008 and 31 March 2007 Cost or valuation and Closing net book value Goodwill 585,383 Patents Total 585,383 As at 31 March 2008 and 31 March 2007 Cost or valuation Accumulated amortisation Net book value 585,383 585,383 15,523 (15,523) 600,906 (15,523) 585,383 Goodwill is allocated to the pest control segment 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. During the year, goodwill was 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. The key assumptions for the value in use calculations, performed for a 10 year period, are those regarding the discount rates, growth rates and expected changes to selling price and direct costs during the period. A period greater than the IAS 36 requirement of 5 years has been selected by management as this represents the internal financial budget approved by management. The key assumptions are consistent with external sources of information. A pretax discount rate of 15% was used in the value in use calculation. In determining the value in use, cash flows have not been increased after 5 years to reflect potential growth over the forecast period. Changes in selling price and direct costs are based on management s expectations of future changes in the market 17. Property, plant and equipment 31 March 2007 Opening net book value Additions Depreciation Closing net book value Laboratory & Office Equipment 3,746 6,881 (3,785) 6,842 31 March 2008 Opening net book value Additions Depreciation Closing net book value As at 31 March 2008 Cost or valuation Accumulated depreciation Net book value As at 31 March 2007 Cost or valuation Accumulated depreciation Net book value 6,842 29,721 (7,093) 29,470 43,406 (13,936) 29,470 13,685 (6,843) 6,842 18. Inventories Finished goods 2008 3,793 2007 3,030 The cost of inventories recognised as an expense and included in cost of sales amounted to nil (2007: nil). Prior to year end, all finished goods inventories were held for research and development purposes and were expensed to research and development costs. 41 All inventories held at the yearend are expected to be realised within one year.

19. Trade and other receivables Trade receivables Provision for receivables impairment Trade receivables net Other receivables Prepayments and accrued income 2008 159,447 (26,843) 132,604 51,968 27,447 212,019 2007 112,295 (40,000) 72,295 26,739 25,991 125,025 The average credit period on the sale of goods is 170 days (2007: 70 days). No interest is charged on trade receivables. The Group has provided for all potential impaired receivables. With the exception of the potential impaired receivables there are no trade receivables past due. 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 seeks trade references. Once accepted as an approved customer, any outstanding receivable is reviewed before approval of new sales orders. The aging profile of net trade receivables for the Group at the year end is as follows: 2008 % Current 596 0.4 030 days 20,287 15.3 3160 days 71,215 53.7 6190 days 91120 days 19,993 15.1 Over 120 days 20,513 15.5 Total 132,604 100 2007 % 5,288 7.3 13,874 19.2 15,580 21.6 19,192 26.5 18,361 25.4 72,295 100 An analysis of trade and other receivables by currency is as follows: US Dollar Euro Sterling Movement in the provision for receivables impairment: Balance brought forward Impaired losses reversed Balance carried forward 2008 117,614 14,394 80,011 212,019 2008 40,000 (13,157) 26,843 2007 32,956 92,069 125,025 2007 40,000 40,000 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. Accordingly, the directors believe that there is no further credit provision required in excess of the provision for receivables impairment. Included in the provision for receivables impairment are individually impaired trade receivables with a balance of 26,843 (2007: 40,000) which are being legally pursued. The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of the expected proceeds. The Group does not hold any collateral over these balances. 42

Aging of impaired trade receivables: Over 120 days 2008 26,843 2007 40,000 Other receivables relate to unpaid share capital and recoverable VAT which are neither past due nor impaired, and are due within 30 days of the balance sheet date. Corporation Tax receivable of 176,594 (2007: 98,010) relates to the research and development tax credits for the financial years 2007 and 2008. These are neither past due nor impaired. The 2007 tax credit is due within 30 days of the balance sheet date and the 2008 tax credit is due within 120 days of the balance sheet date. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. 20. Cash and cash equivalents Cash at bank and in hand Short term deposits 2008 1,671,731 1,308,195 2,979,926 2007 302,959 2,775,000 3,077,959 Cash at bank earns interest at floating rates on daily bank deposits. The fair value of cash for the Group at 31 March 2008 is 1,671,731 (2007: 302,959). Short term deposits earn interest at fixed rate and have an original maturity of three months or less. The fair value of short term deposits for the Group at 31 March 2008 is 1,308,195 (2007: 2,775,000). The Group s interest rate sensitivity analysis is disclosed within note 25. 21. Trade and other payables Trade payables Other taxation and social security Accruals and deferred income 2008 274,153 46,733 207,712 528,598 2007 248,662 48,827 111,814 409,303 Trade payables are noninterest bearing and are normally settled between 30 and 60 days. The Directors believe that the carrying amount of trade and other payables approximates to their fair value. 22. Share capital Authorised Ordinary shares of 1p each Issued share capital As at 1 April 2006 Subdivision of shares Increase in authorised share capital Issue of shares As at 31 March 2007 fully paid Issue of shares fully paid Issue of shares partly paid As at 31 March 2008 2008 2007 Number 50,000,000 500,000 Number 1,000,000 9,000,000 40,000,000 50,000,000 50,000,000 Authorised 100,000 400,000 500,000 500,000 Number 50,000,000 500,000 Issued Number 798,775 79,878 7,188,975 15,131,573 151,315 23,119,323 231,193 3,135,105 31,351 56,385 564 26,310,813 263,108 43

For the year ended 31 March 2007, the following share issues occurred: On 28 September 2006, each existing and unissued ordinary share of 10p each in the capital of the Company was subdivided into 10 ordinary shares of 1p each subject to the rights set out in the new articles of association. The authorised share capital of the Company was increased from 100,000 to 500,000 by the creation of 40,000,000 new ordinary shares. On 16 October 2006, the Company was admitted to AIM which resulted in the issue of 10,139,475 new ordinary shares. A further 4,334,204 ordinary shares were issued on conversion of Convertible Loan Notes 2008 of 1,500,000 and a further 657,894 ordinary shares were issued on capitalisation of the RisingStars Growth Fund loan of 250,000. Total gross proceeds from flotation and loan conversion of 5,750,000 were received and the associated issue costs allocated to Share Premium Account amounted to 424,234. The gross proceeds of 5,750,000 comprise of flotation funding of 3,853,000 (total cost of 586,774) giving net receipts from flotation of 3,266,226, together with conversion of the secured Convertible Loan Notes 2008 of 1,500,000, conversion of the RisingStars and Lancashire County Developments fund loans of 147,000 and capitalisation of the RisingStars Growth Fund loan of 250,000. For the year ended 31 March 2008, the following share issues occurred: On 21 February 2008, the Company issued 3,191,490 ordinary shares by way of a placing at 47 pence per share. The gross proceeds amounted to 1,500,000, placing expenses of 75,000 were charged to the share premium account. Of the issued share capital, 26,501 remained unpaid as at 31 March 2008, which was subsequently paid on 2 April 2008. 23. 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 two 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. Details of the share options outstanding during the year are as follows: 2008 2007 Outstanding at 1 April Granted during the year Outstanding at 31 March Number of share options 2,936,876 612,386 3,549,262 Weighted average exercise price 0.34 0.52 0.37 Number of share options 1,055,330 1,881,546 2,936,876 Weighted average exercise price 0.25 0.38 0.34 The weighted average remaining contractual life for the share options outstanding as at 31 March 2008 is 8 years (2007: 9 years). The options outstanding at 31 March 2008 had a weighted average exercise price of 37p. During the period to 31 March 2006, options were granted on 10 November 2005, the aggregate of the estimated fair values of the options granted on that date is 166,124. During the period to 31 March 2007, options were granted on 16 October 2006, the aggregate of the estimated fair values of the options granted on those dates is 253,632. During the period to 31 March 2008, the aggregate of the estimated fair values of the options granted during the year is 117,461. The fair value of options granted has been calculated using the BlackScholes model discounted for the effect of market related vesting conditions. The inputs into the BlackScholes option pricing model are as follows: Weighted average share price Weighted average exercise price Expected volatility Expected life Riskfree rate Expected dividends 2008 0.57 0.50 50% 2.0 years 5.61% 2007 0.38 0.34 50% 2.0 years 4.57% 44

Given the lack of share price trading history for Plant Impact plc, the expected volatility has been estimated by reference to historic volatility of a sample of comparable companies. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations. During the year ended 31 March 2008, Plant Impact plc granted 462,386 share options to its joint broker for annual services rendered. These services have been valued at their fair value of 86,632 as they are received and are charged to the Group Income Statement with a corresponding credit to other reserves. The Group recognised total expenses in the period of 211,190 (2007: 107,641). 24. 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. Balance sheets at 31 March 2008 and 31 March 2007 are not representative of the positions throughout the year as cash and cash equivalents fluctuate considerably depending on when share issues have occurred. It is, and has been throughout the year, the Group s policy that no speculative trading in financial instruments or derivatives is undertaken. The Group had no outstanding borrowing facilities at 31 March 2008. All outstanding loans were converted into equity on flotation (16 October 2006), discharging the Company s liability in respect of convertible loan stock, including the redemption premium thereon, a preferred loan and two shortterm loans. 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 summarized below: Interest rate risk and liquidity risk The Group is principally funded with equity and invests its funds in instant access higher rate deposit accounts and shortterm 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. The Group s interest rate sensitivity analysis is disclosed within note 25. Management monitor 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. Foreign currency exchange risk The Group undertakes certain transactions denominated in foreign currencies. Hence, exposure to 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 is detailed in note 19. Management believe that foreign currency exchange risk is currently immaterial and as such no sensitivity analysis is provided. Apart from holding funds in a number of foreign currencies, the Group does not currently enter into any forward contracts to mitigate such risk. Credit risk The Group s financial assets are cash and cash equivalents, trade and other receivables, which represent the Group s maximum exposure to credit risk in relation to financial assets. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit ratings. The Group s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, 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. The Group has no significant concentration of credit risk, with exposure spread amongst several customers. Note 19 sets out the impairment provision for credit losses on trade receivables and the aging analysis of overdue trade receivables. There are no impairment losses recognised on other financial assets. Market risk The Group s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see above) and interest rates (note 25). 45

25. 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 maximizing the return to stakeholders. The Group s overall strategy remains unchanged from 2007 to minimise costs and liquidity risk. The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital and reserves. Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements. Categories of financial instruments Financial Assets Loans and receivables (including cash and cash equivalents) Financial liabilities Amortised cost 2008 3,368,539 274,153 2007 3,300,994 248,662 The carrying amount reflected above represents the Group s maximum exposure to credit risk. Interest rate sensitivity The following table illustrates sensitivity of the loss for the year and equity to a reasonably possible change in interest rates of 1% with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the Group s cash and cash equivalents held at each balance sheet date. All other variables are held constant. Loss for the year Equity 2008 +1% 1% 29,800 (29,800) 29,800 (29,800) 2007 +1% 1% 30,780 (30,780) 30,780 (30,780) 26. Commitments and contingencies The Group has entered into commercial leases on its premises. The future aggregate minimum lease payments are : Within one year Between one to five years 2008 5,500 5,500 2007 20,000 20,000 The lease is renewable in October 2008 and the Group is required to give a 2 month notice for the termination of this agreement. The lease expenditure is charged to the Group income statement. 27. Key management compensation Key management compensation is as follows : Aggregate emoluments Share based payments 31 March 2008 68,750 6,933 75,683 31 March 2007 46

28. 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. Sharebased payments of 115,743 (2007: 106,787) were charged to the Group income statement in respect of management and other compensation paid to management is set out in the Directors Remuneration Report on pages 23 to 24 and note 8 to the Group financial statements. During the year ended 31 March 2008, the Company paid Enterprise Ventures Limited a fee for the nonexecutive services of M Wyatt, the fee being 15,000 (2007 7,654). Enterprise Ventures Limited is the investment manager for the RisingStars Growth Fund, a substantial shareholder in Plant Impact plc. W Thompson, a director of Plant Impact plc, is also a director of Quevedo Services Limited. Quevedo Services Limited charged Plant Impact plc a total of nil (2007: 4,290) during the period in respect of consultancy services provided by W Thompson. During the year ended 31 March 2007, the Company paid Braemar Securities Limited, a subsidiary of Braemar Group plc, of which Martin Robinson is Chairman, a fee of 25,000 (plus VAT) for additional consultancy work undertaken in the period prior to Admission to AIM. 29. Explanation of Transition to International Financial Reporting Standards (IFRS) The Group s financial statements for the year ended 31 March 2008 are the first annual financial statements that comply with IFRS, as adopted by the European Union. The Group s date of transition is 1 April 2006 and the opening IFRS balance sheet has been prepared as of that date. The commentary below highlights the key changes that have arisen due to the transition from reporting under UK GAAP to reporting under IFRS. The comparative figures have been prepared on the same basis and are therefore restated for the impact of IFRS from those previously reported under UK GAAP. A summary of the principal IFRS accounting policies adopted in these financial statements are set out in note 2. The impact of the IFRS transition is set out below: a. Firsttime adoption IFRS 1 "Firsttime Adoption of International Financial Reporting Standards" sets out the approach to be followed when IFRS are applied for the first time. Whilst IFRS 1 generally requires that the accounting policies are to be applied retrospectively it provides a number of optional exemptions. b. Share based payments Under IFRS 2 "Share based payments", the comparative figures for the six months ended 30 September 2006 have been adjusted to reflect the issue of share options. No restatement has been made in respect of the balance sheet as at 1 April 2006, as a prior year adjustment has already been reported under UK GAAP in accordance with FRS 20. c. Convertible loan notes The convertible loan notes have been restated to be in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" giving rise to an adjustment of 16,882. d. Goodwill amortisation Plant Impact plc has elected to apply the exemption that precludes the full retrospective application of IFRS 3: Business combinations. Hence no restatement has been made in respect of business combinations prior to 1 April 2006. Under IFRS goodwill is not amortised, but tested annually for impairment. The goodwill amortisation charge of 30,410 recognised in accordance with UK GAAP in 2007 was written back and the merger reserve arising from these business combinations has not been restated. e. Holiday pay Under IAS 19 "Employee Benefits" a provision for holiday pay to which employees are entitled, but have not yet taken, is required. This charge was not required under UK GAAP. Explanation of material adjustments to the cash flow statement Application of IFRS has resulted in reclassification of certain items in the cash flow statement as follows: (i) Under UK GAAP, payments to acquire property, plant and equipment were classified as part of Capital expenditure and financial investment. Under IFRS, payments to acquire property, plant and equipment have been classified as part of Investing activities. (ii) Income taxes are classified as operating cash flows under IFRS, but were included in a separate category of tax cash flows under previous GAAP. There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP. 47

Reconciliation of the Group s profit for the year ended 31 March 2007: Loss after tax under UK GAAP Convertible loan interest Goodwill amortisation writeback Loss after tax under IFRS Reference c d 2007 (1,771,227) 16,882 30,410 (1,723,935) Reconciliation of the income statement for the year ended 31 March 2007: Reference As previously reported under UK GAAP Restated under IFRS Revenue 377,237 377,237 Cost of sales (268,987) (268,987) Gross profit 108,250 108,250 Distribution costs Research and development Administrative expenses d (119,433) (721,190) (763,606) (119,433) (690,780) (763,606) Total expenses (1,604,229) (1,573,819) Operating loss (1,495,979) (1,465,569) Finance income Finance costs c 70,599 (443,857) 70,599 (426,975) (373,258) (356,376) Loss before tax (1,869,237) (1,821,945) Income tax expense 98,010 98,010 Loss for the year attributable to equity holders of the Company (1,771,227) (1,723,935) 48

Reconciliation of equity as at 1 April 2006 (date of transition to IFRS): ASSETS Noncurrent assets Intangible assets Property, plant & equipment Reference As previously reported under UK GAAP 585,383 3,746 589,129 Restated under IFRS 585,383 3,746 589,129 Current assets Inventory Trade and other receivables Cash and cash equivalents 7,831 425,509 446,770 880,110 7,831 425,509 446,770 880,110 Total assets 1,469,239 1,469,239 LIABILITIES Noncurrent liabilities Long term borrowings c (979,323) (979,323) (996,205) (996,205) Current liabilities Trade and other payables e (670,717) (670,717) (695,560) (695,560) Total liabilities (1,650,040) (1,691,765) Net liabilities (180,801) (222,526) EQUITY Equity attributable to equity holders of the Company Share capital Share premium Other reserve Merger reserve Retained earnings c + e 79,878 844,812 80,815 182,892 (1,369,198) 79,878 844,812 80,815 182,892 (1,410,923) Total equity (180,801) (222,526) 49

Reconciliation of equity as at 31 March 2007: ASSETS Noncurrent assets Intangible assets Property, plant & equipment Reference d As previously reported under UK GAAP 554,973 6,842 561,815 Restated under IFRS 585,383 6,842 592,225 Current assets Inventory Trade and other receivables Corporation tax recoverable Cash and cash equivalents 3,030 119,926 103,109 3,077,959 3,304,024 3,030 223,035 3,077,959 3,304,024 Total assets 3,865,839 3,896,249 LIABILITIES Current liabilities Trade and other payables e (384,460) (384,460) (409,303) (409,303) Total liabilities (384,460) (409,303) Net assets 3,481,379 3,486,946 EQUITY Equity attributable to equity holders of the Company Share capital Share premium Other reserve Merger reserve Retained earnings d+e 231,193 6,019,263 188,456 182,892 (3,140,425) 231,193 6,019,263 188,456 182,892 (3,134,858) Total Equity 3,481,379 3,486,946 50

Company Balance Sheet As at 31 March 2008 Notes 2008 2007 Fixed Assets Investments 5 910,535 785,976 Current assets Debtors Cash at bank and in hand 6 3,670,825 2,675,743 6,346,568 2,063,486 2,868,027 4,931,513 Creditors: amounts falling due within one year Net current assets 7 (48,250) 6,298,318 4,931,513 Total assets less current liabilities 7,208,853 5,717,489 Net assets 7,208,853 5,717,489 Capital and reserves Called up share capital Share premium account Other reserve Merger relief reserve Profit and loss account 8 9 10 11 12 263,108 7,124,891 399,646 287,457 (866,249) 231,193 5,731,806 188,456 287,457 (721,423) Shareholders funds 13 7,208,853 5,717,489 The notes on pages 52 to 56 are an integral part of the Company s financial statements. 51

Notes to the Company Balance Sheet 1. 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 1985 and applicable UK accounting standards (United Kingdom Generally Accepted Accounting Practice). The Company s accounting policies are unchanged compared with the prior year and are set out below: Tangible fixed assets and depreciation Tangible fixed assets are stated at cost net of depreciation and any provision for impairment. Depreciation is calculated to write down the cost less estimated residual value of all tangible fixed assets by equal annual instalments over their estimated useful economic lives as follows: Laboratory and office equipment 33.3% per annum Cash Cash comprises of cash on 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 year 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 is 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. Sharebased payments All share based payment arrangements granted after 7 November 2002 that have not vested prior to 1 January 2005 are recognised in the financial statements as in accordance with FRS 20. The cost of equitysettled 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 BlackScholes pricing model. In valuing equitysettled 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 nonmarket 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 equitysettled sharebased 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. The share based charges are recognised within the financial statements of the subsidiary company, P.I. 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 P.I. Bioscience Limited, see note 5. Other share based payments During the year, the Company has issued share options to its brokers for annual services rendered. These services have been valued at their fair value as they are received and are charged to the Company profit and loss with a corresponding credit to equity. The fair value has been determined using the BlackScholes pricing model. 52

2. Directors remuneration The total amounts for Directors remuneration and other benefits are as follows: Directors remuneration Aggregate emoluments 31 March 2008 392,618 31 March 2007 302,376 Highest paid Director The above includes remuneration of the highest paid Director as follows: Aggregate emoluments 31 March 2008 122,870 31 March 2007 93,073 3. Staff numbers and costs The average number of persons employed by the Company (including Directors) during the period was as follows: Management 31 March 2008 No. 3 3 31 March 2007 No. 3 3 The aggregate payroll costs of these persons were as follows: Wages and salaries Social security costs 31 March 2008 31 March 2007 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 two 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. Details of the share options outstanding during the year are as follows: Outstanding at 1 April Granted during the year Outstanding at 31 March Number of share options 2,936,876 612,386 3,549,262 2008 Weighted average exercise price 0.34 0.52 0.37 Number of share options 1,055,330 1,881,546 2,936,876 2007 Weighted average exercise price 0.25 0.38 0.34 The weighted average remaining contractual life for the share options outstanding as at 31 March 2008 is 8 years (2007: 9 years). The options outstanding at 31 March 2008 had a weighted average exercise price of 37p. During the period to 31 March 2006, options were granted on 10 November 2005, the aggregate of the estimated fair values of the options granted on that date is 166,124. During the period to 31 March 2007, options were granted on 16 October 2006, the aggregate of the estimated fair values of the options granted on those dates is 253,632. During the period to 31 March 2008, the aggregate of the estimated fair values of the options granted on those dates is 117,461. 53

The fair value of options granted has been calculated using the BlackScholes model discounted for the effect of market related vesting conditions. The inputs into the BlackScholes option pricing model are as follows: Weighted average share price Weighted average exercise price Expected volatility Expected life Riskfree rate Expected dividends 2008 0.57 0.50 50% 2.0 years 5.61% 2007 0.38 0.34 50% 2.0 years 4.57% Given the lack of share price trading history for Plant Impact plc the expected volatility has been estimated by reference to historic volatility of a sample of comparable companies. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations. During the year ended 31 March 2008, Plant Impact plc granted 462,386 share options to its joint broker for annual services rendered. These services have been valued at their fair value as they are received of 86,631 and are charged to the profit and loss account with a corresponding credit to other reserves. In accordance with UITF 44, the cost of share options granted to employees has been charged to the relevant subsidiary and is accounted for in the financial statements as an increase in the cost of investment of 124,559 (2007: 107,641), see note 5. 5. Investments The Company has the following investments in subsidiary undertakings: Cost or valuation: At 1 April 2007 Share based payment (note 4) At 31 March 2008 Bio Futures PI Limited 300,168 300,168 P.I. Bioscience Limited 485,808 124,559 610,367 Total 785,976 124,559 910,535 Net book value: At 31 March 2008 At 1 April 2007 300,168 300,168 610,367 485,808 910,535 785,976 Subsidiary Undertaking Bio Futures PI Limited Trading Activity Chemical research and development Class of share capital Ordinary and Preference Registered and operated in England & Wales Held by Company % 100 P.I. Bioscience Limited Chemical manufacturers Ordinary England & Wales 100 As at 31 March 2008 and 2007, the companies had the following capital and reserves: Bio Futures PI Limited P.I. Bioscience Limited 2008 Capital and reserves Loss 52,994 (3,453,269) (1,524,906) Capital and reserves 52,994 (2,052,922) 2007 Profit/(loss) 42,111 (1,199,885) 6. Debtors Amounts owed by Group undertakings Other debtors Prepayments and accrued income 31 March 2008 3,636,021 26,501 8,303 3,670,825 31 March 2007 2,051,249 12,237 2,063,486 54

Other debtors relates to unpaid share capital. 7. Creditors: amounts falling due within one year Accruals 31 March 2008 48,250 31 March 2007 8. Called up share capital Authorised Ordinary shares of 1p each 2008 2007 Number 50,000,000 500,000 Number 50,000,000 500,000 Issued share capital As at 1 April 2006 Subdivision of shares Increase in authorised shares Issue of shares As at 31 March 2007 Issue of shares Issue of shares As at 31 March 2008 Fully paid Fully paid Partly paid Number 1,000,000 9,000,000 40,000,000 50,000,000 50,000,000 Authorised For the year ended 31 March 2007, the following share issues occurred: 100,000 400,000 500,000 500,000 Issued Number 798,775 79,878 7,188,975 15,131,573 151,315 23,119,323 231,193 3,135,105 31,351 56,385 564 26,310,813 263,108 On 28 September 2006, each existing and unissued ordinary share of 10p each in the capital of the Company was subdivided into 10 ordinary shares of 1p each subject to the rights set out in the new articles of association. The authorised share capital of the Company was increased from 100,000 to 500,000 by the creation of 40,000,000 new ordinary shares. On 16 October 2006, the Company was admitted to AIM which resulted in the issue of 10,139,475 new ordinary shares. A further 4,334,204 ordinary shares were issued on conversion of Convertible Loan Notes 2008 of 1,500,000 and a further 657,894 ordinary shares were issued on capitalization of the RisingStars Growth Fund loan of 250,000. Total gross proceeds from flotation and loan conversion of 5,750,000 were received and the associated issue costs allocated to Share Premium Account amounted to 424,234. The gross proceeds of 5,750,000 comprise of flotation funding of 3,853,000 (total cost of 586,774) giving net receipts from flotation of 3,266,226, together with conversion of the secured Convertible Loan Notes 2008 of 1,500,000, conversion of the RisingStars and Lancashire County Developments fund loans of 147,000 and capitalisation of the RisingStars Growth Fund loan of 250,000. For the year ended 31 March 2008, the following share issues occurred: On 21 February 2008, the Company issues 3,191,490 ordinary shares by way of a placing at 47 pence per share. The gross proceeds amounted to 1,500,000, placing expenses of 75,000 were charged to the share premium account. Of the issued share capital, 26,501 remained unpaid as at 31 March 2008, which was subsequently paid on 2 April 2008. 9. Share premium account As at 1 April Shares issued during the year Share issue expenses As at 31 March 2008 5,731,806 1,468,085 (75,000) 7,124,891 2007 557,355 5,598,685 (424,234) 5,731,806 55

10. Other reserve As at 1 April Share based payments to Directors Share based payments to employees Share based payments to brokers As at 31 March 11. Merger relief reserve As at 1 April and 31 March 2008 188,456 115,743 8,816 86,631 399,646 2008 287,457 2007 80,815 106,787 854 188,456 2007 287,457 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 230 of the Companies Act 1985 and has not included its own profit and loss account in these financial statements. The parent Company s loss for the year was 144,826 (2007: 577,865). As at 1 April Loss for the financial year As at 31 March 13. Shareholders funds Loss for the financial year Share based payments Shares issued in the year Share issue expenses Increase in shareholders funds Shareholders funds at 1 April Shareholders funds at 31 March 2008 (721,423) (144,826) (866,249) 2008 (144,826) 211,190 1,500,000 (75,000) 1,491,364 5.717,489 7,208,853 2007 (143,558) (577,865) (721,423) 2007 (577,865) 107,641 5,750,000 (424,234) 4,855,542 861,947 5,717,489 14. Related party transactions The Company has taken advantage of the exemption in Financial Reporting Standard No. 8 "Related party disclosures" and has not disclosed transactions with Group undertakings. During the year ended 31 March 2008, the Company paid Enterprise Ventures Limited a fee for the nonexecutive services of M Wyatt, the fee being 15,000 (2007 7,654). Enterprise Ventures Limited is the investment manager for the RisingStars Growth Fund a substantial shareholder in Plant Impact plc. W Thompson, a director of Plant Impact plc, is also a director of Quevedo Services Limited. Quevedo Services Limited charged Plant Impact plc a total of nil (2007: 4,290) during the period in respect of consultancy services provided by W Thompson. During the year ended 31 March 2007, the Company paid Braemar Securities Limited, a subsidiary of Braemar Group plc, of which Martin Robinson is Chairman, a fee of 25,000 (plus VAT) for additional consultancy work undertaken in the period prior to Admission to AIM. 56

Plant Impact plc. 2 Lockside Office Park, Lockside Road Riversway, Preston UK PR2 2YS Tel: +44(0) 1772 733744 Fax: +44(0) 1772 733838 Email: info@plantimpact.com Website:www.plantimpact.com