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Financial Review from the CFO

Results for the year to December 31, 2008 show a successful year in achieving key milestones, bringing products to market and investing in key resources. Net revenues increased to US$5.9 million from US$5.5 million and the operating expenses increased to US$20.4 million from US$18.9 million. Revenues: The Group achieved major milestones during the year principally from Kraft resulting in payments of US$4.1 million (2007: US$5.2 million); the amount recognized for revenue during the year was US$4.9 million (2007: US$5.6 million). During the year we also invoiced and recognized US$1.1 million (2007: US$ 0.1 million) of product revenue and a revenue debit for sustainable solutions of US$(0.1) million (2007: US$0.3 million credit). Revenue in 2007 was also offset by an amount relating to the fair value of warrants issued to a commercial partner and treated as a sales incentive of US$(0.5) million for which there was no adjustment in 2008. Cost of Sales and Gross Profit: Cost of sales for the year was US$4.4 million (2007: US$2.4 million). This included research and development costs for collaborative revenue projects of US$2.7 million (2007: US$1.4 million), cost of continued insecticide products in the U.S. institutional markets and Indian markets of US$1.0 million, (2007: US$0.1 million), cost of sales of WasteSolver in 2007 of US$0.7 million and inventory write-offs of US$0.7 million (2007: US$0.2 million). OpOp erating Expenses: Overall operating expenses increased to US$20.4 million (2007: US$18.9 million) and include non-cash compensation expense relating to founder share grants and options of US$4.1 million (2007: US$4.0 million) and US$0.9 million of provisions for overdue receivables. The net cash expenditure in operating expenses grew 3.1% to US$15.5 million (2007: US$14.9 million). Overall this reflects a full year of the costs related to expansion in the Company´s operations after the IPOPO in May of 2007 and cost reductions undertaken during the second half of 2008 which brought our cash expenditures back in line with the first half of 2007. Research and development expenditure increased to US$4.6 million (2007: US$4.5 million) and the cash expenditure grew to US$4.2 million (2007: US$3.9 million) after deducting non-cash compensation 08 Financial Review from the CFO