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D1 Oils Plc (NEOS)

  Print      Mail a friend       Annual reports

Wednesday 09 April, 2008

D1 Oils Plc

Final Results - Part 2

D1 Oils Plc
09 April 2008

Part 2

Notes to the financial statements
for the year ended 31 December 2007

1. Authorisation of financial statements and compliance with IFRS

The financial statements of D1 Oils plc and its subsidiaries ('the Group') for
the year ended 31 December 2007 were authorised for issue by the Board of
Directors on 8 April 2008 and the balance sheet was signed on the Board's behalf
by Christopher Tawney. D1 Oils plc is a public limited company incorporated and
domiciled in England and Wales. The Company's ordinary shares are traded on AIM.

The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
31 December 2007.


2. Summary of significant accounting policies.

Basis of preparation

The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
31 December 2007.

The Group's date of transition to IFRS reporting is 1 January 2006, having
previously reported under UK GAAP. Reconciliations of net assets, profit and
cash flow under UK GAAP to IFRS are summarised in note 30.

The Group financial statements are presented in Sterling and all values are
rounded to the nearest thousand pounds (£000) except where otherwise indicated.

Key sources of estimation uncertainty

The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported for assets and liabilities as
at the balance sheet date and the amounts reported for revenues and expenses
during the year.  The nature of estimation means that actual outcomes could
differ from those estimates.

The key sources of estimation uncertainty that have a significant risk of
causing material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.

Impairment of non-financial assets

The Group asses whether there are any indicators of impairment for all
non-financial assets at each reporting date. Goodwill and other indefinite life
tangible and intangible assets are tested for impairment annually and at other
times when there are indicators that the carrying amounts may not be
recoverable. When value in use calculations are undertaken, management must
estimate the expected future cash flows from the asset or cash generating unit
and choose a suitable discount rate in order to calculate the present value of
those cash flows. Where realisable value is used as the basis of valuation,
management must estimate the net income realisable from the sale of the asset
and apply an appropriate discount rate to the cash flows arising.

Impairment of available-for-sale financial assets

The Group classifies certain financial assets as available-for-sale and
recognises movements in their fair value in equity. When the fair value
declines, management makes assumptions about the decline in value to determine
whether it is an impairment that should be recognised in profit or loss. At 31
December 2007 no impairment losses have been recognised for available-for-sale
assets (2006: £nil).

Share based payments

The estimation of the share-based payment cost requires the selection of an
appropriate valuation model, consideration as to the inputs necessary for the
valuation model chosen and the estimation of the number of awards that will
ultimately vest, inputs which arise from judgments relating to the probability
of meeting non-market performing performance conditions and the continuing
participation of employees.

Basis of consolidation

The Group financial statements consolidate the financial statements of D1 Oils
plc and the entities it controls drawn up to 31 December each year.

Subsidiaries are consolidated from the date of their acquisition, being the date
on which the Group obtains control and continue to be consolidated until the
date that such control ceases.  Control comprises the power to govern the
financial and operating polices of the investee so as to obtain benefit from its
activities and is achieved through direct or indirect ownership of voting
rights; currently exercisable or convertible voting rights; or by way of
contractual agreement.

The financial statements of subsidiaries are prepared for the same reporting
year as the parent company and are based on consistent accounting policies. All
inter-company balances and transactions, including unrealised profits arising
from intra-group transactions, are eliminated.  Minority interests represent the
portion of profit or loss and net assets in subsidiaries that is not held by the
Group and is presented within equity in the consolidated balance sheet,
separately from parent company's shareholders' equity.  When a subsidiary is not
wholly owned by the Group and it incurs losses, amounts allocated to the
minority are limited to the value in the balance sheet of the minority interest
in the subsidiary's equity. Losses in excess of this limit have been allocated
against the majority interest, except where the minority is under an obligation
to make good any loss.

Interests in joint ventures

A joint venture is defined in IAS 31 as a 'contractual arrangement whereby two
or more parties undertake an economic activity that is subject to joint
control.'

Where the joint venture is established through an interest in a company,
partnership or other entity (a jointly controlled entity), the Group recognises
its interest in the entity's assets and liabilities using the equity method of
accounting.  Under the equity method, the interest in the joint venture is
carried in the balance sheet at cost plus post-acquisition changes in the
Group's share of its net assets, less distributions received and less any
impairment in value of individual investments.  The Group income statement
reflects the share of the jointly controlled entity's results after tax.  The
Group statement of recognised income and expense reflects the Group's share of
any income and expense recognised by the jointly controlled entity outside
profit and loss.

Any goodwill arising on the acquisition of a jointly controlled entity,
representing the excess of the cost of the investment compared to the Group's
share of the net fair value of the entity's identifiable assets, liabilities and
contingent liabilities, is included in the carrying amount of the jointly
controlled entity and is not amortised.  To the extent that the net fair value
of the entity's identifiable assets, liabilities and contingent liabilities is
greater than the cost of the investment, a gain is recognised and added to the
Group's share of the entity's profit or loss in the period in which the
investment is acquired.

Financial statements of jointly controlled entities are prepared for the same
reporting period as the Group.  Where necessary adjustments are made to bring
the accounting policies into line with those of the Group: to take into account
fair values assigned at the date of acquisition and to reflect impairment losses
where appropriate.  Adjustments are also made in the Group's financial
statements to eliminate the Group's share of unrealised gains and losses on
transactions between the Group and its jointly controlled entities.
The Group ceases to use the equity method on the date from which it no longer
has joint control over, or significant influence in, the joint venture.

Where the financial statements of a jointly controlled entity used in the
preparation of the financial statements are prepared as of a reporting date that
is different from that of the Group, interim accounts are drawn up as at the
Group reporting date and adjustments are made for the effects of significant
transactions or events falling within the Group reporting period.

Interests in associates

The Group's interests in its associates, being those entities over which it has
a significant influence and which are neither subsidiaries nor joint ventures,
are accounted for using the equity method of accounting, as described above for
jointly controlled entities.

Financial assets

Financial assets are recognised when the Group becomes party to the contracts
that give rise to them and are classified as loans and receivables or
held-to-maturity investments, as appropriate.  Financial assets also include
cash and cash equivalents; trade and other receivables; other investments and
derivative financial instruments. The Group determines the classification of its
financial assets at initial recognition.  When financial assets are recognised
initially, they are measured at fair value, being the transaction price plus, in
the case of financial assets not at fair value through profit or loss, directly
attributable transaction costs.

The subsequent measurement of financial assets classified as fair value
financial assets is as follows:

The fair value of quoted investments is determined by reference to bid prices at
the close of business on the balance sheet date.  When there is no active
market, fair value is determined using valuation techniques.  These include
using recent arm's length market transactions; reference to the current market
value of another instrument which is substantially the same; discounted cash
flow analysis and pricing models.  Where fair value cannot be reliably
estimated, assets are carried at cost.

Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market, do not qualify as
trading assets and have not been designated as either fair value through profit
and loss or available for sale.  Such assets are carried at amortised cost using
the effective interest method if the time value of money is significant.  Gains
and losses are recognised in income when the loans and receivables are
derecognised or impaired, as well as through the amortisation process.

Derecognition of financial assets and liabilities

A financial asset or liability is generally derecognised when the contract that
gives rise to it is settled, sold, cancelled or expires.

Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability,
such that the difference in the respective carrying amounts together with any
costs or fees incurred are recognised in profit or loss.


Impairment of financial assets

The Group assesses at each balance sheet date whether a financial asset or group
of assets is impaired.

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables
carried at amortised cost has been incurred, the amount of the loss is measured
as the difference between the asset's carrying amount and the present value of
estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset's original effective interest rate
(i.e. the effective interest rate computed at initial recognition).  The
carrying amount of the asset is reduced with the amount of the loss recognised
in administration costs.

If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised, the previously recognised impairment loss is reversed.  Any
subsequent reversal of an impairment loss is recognised in the income statement,
to the extent that the carrying value of the asset does not exceed its amortised
cost at the reversal date.

Intangible assets

Research and development expenditure

The Group undertakes a range of plant science related research and development
activities.

Product placement and agronomy research involves testing how well individual
cultivars perform in identified growing areas. In these trials, the key
performance characteristics of grain and oil yield and disease and insect
resistance are measured, typically over a period of two years. On the basis of
these tests, a number of the best performing cultivars are identified as
technically feasible and are selected for commercial release. Any costs incurred
up to the point of selection of these cultivars are regarded as research and are
charged to the income statement as they are incurred. Costs subsequently
incurred in producing the mother plants for planting seed orchards are classed
as development expenditure and are capitalised as intangible assets. However,
the useful economic life of any particular cultivar cannot be accurately
predicted and may be as little as one year before it is superseded by the next
generation. Therefore development expenditure is written off over a period of 12
months.

The sustainable oil supply programme collects and analyses data from commercial
plantations and model farms with the aim of optimising the grain and oil yield
through harvesting and expelling techniques. The costs of collation, creation
and analysis of the database are treated as research expenditure and are charged
to the income statement as it is incurred. Any subsequent expenditure incurred
in producing instruction manuals, training programmes and other materials
intended to assist planting partners improve performance is treated as
development expenditure and is charged to the income statement as incurred.

The feed programme investigates alternative uses for and the removal of
anti-nutritional substances from the by-product created when oil is extracted
from the jatropha kernel. Any costs incurred in the design and construction of
prototype processes and equipment are capitalised as intangible assets and
charged against income over the useful economic life of the process. Otherwise
costs are expensed to the income statement as incurred.

Various technologies for expelling oil from the harvested grains are being
evaluated. The costs associated with the design, construction and testing of
pilot plants are capitalised as tangible assets and charged against income over
the expected useful economic life of the plant. Costs incurred prior to the
construction of pre-production prototypes are charged against income as
incurred.

Software

Software is initially carried at cost and thereafter stated at cost less
accumulated amortisation and accumulated impairment losses.  Intangible assets
with a finite life have no residual value and are amortised on a straight-line
basis over their expected useful economic lives of 3-5 years.

The carrying value of intangible assets is reviewed for impairment whenever
events or changes in circumstances indicate the carrying value may not be
recoverable.  In addition, the carrying value of capitalised development
expenditure is reviewed for impairment annually before being brought into use.

Leases

Assets held under finance leases, which transfer to the Group substantially all
of the risks and benefits incidental of ownership of the leased item are
capitalised at the inception of the lease, with a corresponding liability being
recognised for the lower of the fair value of the leased asset and the present
value of minimum lease payments. Lease payments are apportioned between
reduction of the lease liability and finance charges in the income statement so
as to achieve a constant rate of interest on the remaining balance of the
liability. Assets held under finance leases are depreciated over the shorter of
the estimated useful life of the asset and the lease term.

Leases where the lessor retains a significant portion of the risks and benefits
of ownership of the asset are classified as operating leases and rentals payable
are charged in the income statement on a straight-line basis over the lease
term.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less. Restricted deposits
such as amounts held by Allied Irish Bank as security are classified as
financial assets rather than cash where the terms of the deposit mean that the
balance cannot be readily converted to finance the day-to-day operations of the
Group.

For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation
and accumulated impairment losses. Cost comprises the aggregate amount paid and
the fair value of any other consideration given to acquire the asset and
includes costs directly attributable to making the asset capable of operating as
intended.  Borrowing costs attributable to assets under construction are
recognised as an expense as incurred.

Depreciation is provided on all property, plant and equipment, other than land,
on a straight-line basis over the expected useful life as follows:

Buildings                                over 20 years
Plant and machinery                      over 3-10 years
Motor vehicles                           over 3-10 years
Fixtures, fittings and equipment         over 3-5 years

The carrying value of property, plant and equipment is reviewed for impairment
if events or changes in circumstance indicate the carrying value may not be
recoverable, and are written down immediately to their recoverable amount.
Useful lives and residual values are reviewed annually and where adjustments are
required these are made prospectively.

An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of the
asset.  Any gain or loss arising on the derecognition of the asset is included
in the income statement in the period of derecognition.

Where assets are held under finance leases and there is reasonable certainty
that the Group will obtain ownership of the asset by
the end of the lease term (based on best estimates as at the balance sheet
date), the asset is depreciated over its expected useful economic life.
Otherwise, assets held under finance lease are depreciated over the shorter of
the lease term and its useful economic life.

Plantations

The cost of managed plantations is capitalised included in property, plant and
equipment and includes the direct costs of site preparation and clearance,
fencing and all costs incurred to bring the plantation to a state in which seeds
and seedlings can be planted.  The trees themselves are classed as biological
assets and are not included in the cost of the plantation.

Biological assets

Biological assets are the costs of seeds or seedlings purchased and the
associated propagation, planting and cultivation costs incurred up to the point
that the trees produce their first commercial harvest. Jatropha trees produce
their first commercial harvest approximately two years after planting and are
considered mature after five to six years. Following the first commercial
harvest of grain, the trees are measured at fair value less estimated point of
sale costs using discounted cash flow techniques.

Until the first commercial harvest, the viability and yield of any plantation
cannot be reliably measured and therefore immature or juvenile trees are
recorded at cost.

Foreign currency translation

Transactions in foreign currencies are initially recorded in the functional
currency by applying the spot exchange rate ruling at the date of the
transaction.  Monetary assets and liabilities denominated in foreign currencies
are retranslated at the functional currency rate of exchange ruling at the
balance sheet date.  All differences are taken to the income statement, except
when hedge accounting is applied and for differences on monetary assets that
form part of the Group's net investment in a foreign operation.  These are taken
directly to equity until the disposal of the net investment, at which time they
are recognised in profit or loss.

The assets and liabilities of foreign operations and jointly controlled
entities, including the related goodwill, are translated into Sterling at the
rate of exchange ruling at the balance sheet date.  Income, expenses and cash
flows are translated at weighted average exchange rates for the year.  The
resulting exchange differences are taken directly to a separate component of
equity.  On disposal of a foreign entity, the deferred cumulative amount
recognised in equity relating to that particular foreign operation is recognised
in the income statement.

The Group has taken advantage of the exemption in IFRS 1 in respect of
cumulative translation differences so as to record the cumulative translation
differences for all foreign entities as nil as at 1 January 2006.

Non-monetary items that are measured in terms of historic cost in a foreign
currency are translated using the exchange rates as at the dates of the initial
transactions.  Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.

Business combinations and goodwill

Business combinations on or after 1 January 2006 are accounted for under IFRS 3
using the purchase method.  Any excess of the cost of the business combination
over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities is recognised in the balance sheet as
goodwill and is not amortised.  To the extent that the net fair value of the
acquired entity's identifiable assets, liabilities and contingent liabilities is
greater than the cost of the investment, a gain is recognised immediately in the
income statement.  Goodwill recognised as an asset as at 31 December 2005 is
recorded at its carrying amount under UK GAAP and is not amortised.  Any
goodwill asset arising on the acquisition of equity accounted entities is
included within the cost of those entities.

After initial recognition, goodwill is stated at cost less any accumulated
impairment losses, with the carrying value being reviewed for impairment, at
least annually and whenever events or changes in circumstances indicate that the
carrying value may be impaired.

For the purpose of impairment testing, goodwill is allocated to the related
cash-generating units expected to benefit from the combination's synergies and
monitored by management.  Where the recoverable amount of the cash-generating
unit is less than its carrying amount, including goodwill, an impairment loss is
recognised in the income statement. On disposal of a cash-generating unit, the
allocated goodwill is taken into account when determining the gain or loss on
disposal to be recognised in the income statement.

Inventories

Inventories are stated at the lower of cost and net realisable value.  Cost
includes all costs incurred in bringing each product to its present location and
condition, as follows:

Raw materials, consumables and goods for resale           -  purchase cost on a first-in, first-out basis

Work in progress and finished goods                       -  cost of direct materials and labour plus attributable      
                                                             overheads based on a normal level of activity, excluding   
                                                             borrowing costs

Net realisable value is based on estimated selling price less any further costs
expected to be incurred to completion and disposal.

Trade and other receivables

Trade receivables, which generally have 7-14 day terms, are recognised and
carried at the lower of their original invoiced value and recoverable amount.
Provision is made where there is objective evidence that the Group will not be
able to recover balances in full.  Balances are written off when the probability
of recovery is assessed as being remote.

Interest bearing loans and borrowings

Loans and borrowings are recognised when the Group becomes party to the related
contracts and are measured initially at fair value, being the proceeds received
less directly attributable transaction costs.

After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest method and
taking into account any issue costs and any discount or premium on settlement.

Gains and losses arising on the repurchase, settlement or otherwise cancellation
of liabilities are recognised respectively in finance revenue and finance cost.

Income taxes

Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates and laws
that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
     
•    Where the temporary difference arises from the initial recognition of 
     goodwill or of an asset or liability in a transaction that is not a 
     business combination that at the time of the transaction affects neither 
     the accounting nor taxable profit or loss;

•    In respect of taxable temporary differences associated with investments in 
     subsidiaries, associates and joint ventures, where the timing of the 
     reversal of the temporary differences can be controlled and it is probable
     that the temporary differences will not reverse in the foreseeable future; 
     and

•    Deferred income tax assets are recognised only to the extent that it is 
     probable that taxable profits will be available against which the 
     deductible temporary differences, carried forward tax credits or tax losses 
     can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis
at the tax rates that are expected to apply when the related asset is realised
or liability is settled, based on tax rates and laws enacted or substantively
enacted at the balance sheet date.

Tax is charged or credited directly to equity if it relates to items that are
credited or charged to equity.  Otherwise tax is recognised in the income
statement.

Derivative financial instruments and hedging

The Group uses derivative financial instruments to hedge its risks associated
with fluctuations in the price of Ultra Low Sulphur Diesel (ULSD), which is used
in the invoice price of certain sales.  From 1 January 2006, such derivative
financial instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently re-measured at
fair value.  Derivatives are carried as assets when the fair value is positive
and as liabilities when the fair value is negative.

For those derivatives designated as hedges and for which hedge accounting is
desired, the hedging relationship is documented at its inception.  This
documentation identifies the hedging instrument, the hedged item or transaction,
the nature of the risk being hedged and how effectiveness will be measured
throughout its duration.  Such hedges are expected at inception to be highly
effective.

For the purpose of hedge accounting, hedges are classified as cash flow hedges
when hedging exposure to variability in cash flows that is either attributable
to a particular risk associated with a recognised asset or liability or a highly
probable forecast transaction.

Any gains or losses arising from changes in the fair value of derivatives that
do not quality for hedge accounting are taken to the income statement.  The
treatment of gains and losses arising from revaluing derivatives designated as
hedging instruments depends on the nature hedging relationship, as follows:

Cash flow hedges:

For cash flow hedges, the effective portion of the gain or loss on the hedging
instrument is recognised directly in equity, while the ineffective portion is
recognised in profit or loss.  Amounts taken to equity are transferred to the
income statement when the hedged transaction affects profit or loss, such as
when a forecast sale or purchase occurs.  Where the hedged item is the cost of a
non-financial asset or liability, the amounts taken to equity are transferred to
the initial carrying amount of the non-financial asset or liability.

If a forecast transaction is no longer expected to occur, amounts previously
recognised in equity are transferred to profit or loss.  If the hedging
instrument expires or is sold, terminated or exercised without replacement or
rollover, or if its designation as a hedge is revoked, amounts previously
recognised in equity remain in equity until the forecast transaction occurs and
are transferred to the income statement or to the initial carrying amount of a
non-financial asset or liability as above.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, VAT and other sales taxes or duty.  The following criteria
must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when the significant risks and
rewards of ownership of the goods have passed to the buyer, usually on dispatch
of the goods.

Interest income

Finance revenue is recognised as interest accrued using the effective interest
method, that is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial instruments to its net carrying
amount.

Borrowing costs

Borrowing costs are recognised as an expense when incurred.

Share-based payments

Equity-settled transactions

The cost of equity-settled transactions with employees is measured by reference
to the fair value at the date at which they are granted and is recognised as an
expense over the vesting period, which ends on the date on which the relevant
employees become entitled to the award.  Fair value is determined by an external
valuer using an appropriate pricing model.  In valuing equity-settled
transactions, no account is taken of any vesting conditions, other than
conditions linked to the price of the shares of the Company (market conditions).

No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether or not the market condition is satisfied,
provided that all other performance conditions are satisfied.

At each balance sheet date before vesting, the cumulative expense is calculated,
representing the extent to which the vesting period has expired and management's
best estimate of the achievement or otherwise of non-market conditions and of
the number of equity instruments that will ultimately vest or, in the case of an
instrument subject to a market condition, be treated as vesting as described
above. The movement in cumulative expense since the previous balance sheet date
is recognised in the income statement, with a corresponding entry in equity.

Where the terms of an equity-settled award are modified or a new award is
designated as replacing a cancelled or settled award, the cost based on the
original award terms continues to be recognised over the original vesting
period.  In addition, an expense is recognised over the remainder of the new
vesting period for the incremental fair value of any modification, based on the
difference between the fair value of the original award and the fair value of
the modified award, both as measured on the date of the modification.  No
reduction is recognised if this difference is negative.

Where an equity-settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any cost not yet recognised in the income
statement for the award is expensed immediately.  Any compensation paid up to
the fair value of the award at the cancellation is deducted from equity, with
any excess over fair value being treated as an expense in the income statement.

Assets held for sale

When an asset or disposal group's carrying value will be recovered principally
through a sale transaction rather than through continuing use, it is classified
as held for sale and stated at the lower of carrying value and fair value less
costs to sell. No depreciation is charged in respect of non-current assets
classified as held for sale.

New standards and interpretations not applied

During the year the IASB and IFRIC have issued the following standards and
interpretations with an effective date after the date of these financial
statements:


International Accounting Standards (IAS/IFRS)
          
IAS1         Amendment to IAS 1 - Presentation of Financial Statements (revised September 2007)      1 January 2009

IAS 23       Amendment to IAS 23 - Borrowing costs                                                   1 January 2009

IAS 27       Consolidated and Separate Financial Statements (revised January 2008)                   1 July 2009

IFRS 2       Amendment to IFRS 2 - Vesting Conditions and Cancellations                              1 January 2009

IFRS3        Business Combinations (revised January 2008)                                            1 July 2009

IFRS 8       Operating Segments                                                                      1 January 2009


International Financial Reporting Interpretations Committee (IFRIC)

IFRIC 12     Service Concession Arrangements                                                         1 January 2008

IFRIC 13     Customer Loyalty Programmes                                                             1 July 2008

IFRIC 14     IAS 19 The Limit on Defined Benefit Assets, Minimum Funding Requirements                1 January 2008


The Directors are currently reviewing the amendments to IAS 23 to determine
whether there will be a material impact on the Group's financial statements.


IFRS 8 requires disclosure based on information presented to the board. This is
not expected to differ from the disclosures currently provided.


Apart from this, the Directors do not anticipate that the adoption of these
standards will have a material impact on the Group's financial statements in the
period of initial application.



3. Segmental information

The Group's primary reporting format is business segments as the Group's risks
and returns are affected predominantly by differences in the products and
services provided. Secondary segmental information is reported geographically.
The operating businesses are organised and managed separately according to the
nature of the products and services provided with each segment representing a
strategic business unit that offers different products and serves different
markets.

The plant science segment breeds seedlings for commercial planting and
undertakes research and development activities focused on jatropha curcas.

The refining and trading segment is concerned with the procurement and refining
of vegetable oil and other feedstocks and the sale of biodiesel.

The agronomy segment is responsible for the commercial planting of jatropha and
was transferred to the joint venture created with BP with effect from 1 October
2007.

D1-BP Fuelcrops is the joint venture established with BP on 1 October 2007 and
with effect from that date, is responsible for all commercial planting
activities.

The corporate segment includes the activities of the Company and other central
unallocated overheads. The corporate segment is responsible for raising finance
and financing subsidiary operations. Included in operating loss for this segment
are the operating costs of D1 Oils plc as well as central unallocated finance,
business development, and corporate communications costs. The only item of
income included is interest accruing on cash balances and short-term deposits.
Assets held in the corporate segment are primarily cash and short-term deposits
and interest accruing thereon.

The following table presents revenue and loss information and certain asset and
liability information regarding the Group's business segments for the years
ended 31 December 2007 and 31 December 2006.

Year ended 31 December 2007
                                  UK     Europe     Africa       Asia      India       JV's   Elimination      Group
                                £000       £000       £000       £000       £000       £000          £000       £000
_____________________________________________________________________________________________________________________

Revenue to external customers
Plant science                      -          -          -        9.7        0.4          -             -       10.1
Refining & trading          10,569.6          -          -          -          -          -             -   10,569.6
_____________________________________________________________________________________________________________________
Total                       10,569.6          -          -        9.7        0.4          -             -   10,579.7
_____________________________________________________________________________________________________________________

Operating loss
Plant science               (1,286.6)    (226.9)    (241.9)      30.1     (278.7)         -             -   (2,004.0)
Agronomy                           -          -   (1,450.9)  (1,246.9)    (657.4)         -             -   (3,355.2)
D1-BP Fuel Crops                   -          -          -          -          -   (1,516.5)            -   (1,516.5)
Refining & trading         (31,746.3)         -          -          -          -          -             -  (31,746.3)
Exceptional item            (2,491.2)         -     (296.3)      31.3       (8.1)         -             -   (2,764.3)
_____________________________________________________________________________________________________________________
                           (35,524.1)    (226.9)  (1,989.1)  (1,185.5)    (944.2)  (1,516.5)            -  (41,386.3)
Corporate                   (4,713.2)         -          -          -          -          -             -   (4,713.2)
_____________________________________________________________________________________________________________________
Total                      (40,237.3)    (226.9)  (1,989.1)  (1,185.5)    (944.2)  (1,516.5)            -  (46,099.5)
_____________________________________________________________________________________________________________________

Assets by business segment
Plant science                  236.7      159.7    2,463.3      943.1      431.8          -        (902.2)   3,332.4
D1-BP Fuel Crops                   -          -          -          -          -   15,180.5             -   15,180.5
Refining & trading          31,762.0          -          -          -          -          -     (18,799.4)  12,962.6
_____________________________________________________________________________________________________________________
                            31,998.7      159.7    2,463.3      943.1      431.8   15,180.5     (19,701.6)  31,475.5
Corporate                   83,109.9          -          -          -          -          -     (71,322.1)  11,787.8
_____________________________________________________________________________________________________________________
Total                      115,108.6      159.7    2,463.3      943.1      431.8   15,180.5     (91,023.7)  43,263.3
_____________________________________________________________________________________________________________________

                                  UK     Europe     Africa       Asia      India       JV's   Elimination      Group
                                £000       £000       £000       £000       £000       £000          £000       £000
_____________________________________________________________________________________________________________________

Liabilities by business segment
Plant science               (1,456.6)     (91.1)  (7,519.4)    (196.7)  (1,949.6)         -      10,377.9     (835.5)
Refining & trading         (88,018.5)          -          -  (2,855.1)          -         -      80,645.9  (10,227.7)
_____________________________________________________________________________________________________________________
                           (89,475.1)     (91.1)  (7,519.4)  (3,051.8)  (1,949.6)         -      91,023.8  (11,063.2)
Corporate                     (918.5)          -          -          -          -         -             -     (918.5)
_____________________________________________________________________________________________________________________
Total                      (90,393.6)     (91.1)  (7,519.4)  (3,051.8)  (1,949.6)         -      91,023.8  (11,981.7)
_____________________________________________________________________________________________________________________

Capital expenditure - tangible assets
Plant science                   25.3        3.9          -        2.0          -          -             -       31.2
Agronomy                           -          -      914.3       65.0      134.3          -             -    1,113.6
Refining & trading          15,962.2          -          -          -          -          -             -   15,962.2
_____________________________________________________________________________________________________________________
                            15,987.5        3.9      914.3       67.0      134.3          -             -   17,107.0
Corporate                       55.7                     -          -          -                        -       55.7
_____________________________________________________________________________________________________________________
Total                       16,043.2        3.9      914.3       67.0      134.3          -             -   17,162.7
_____________________________________________________________________________________________________________________

Depreciation
Plant science                   (3.5)      (0.4)         -       (1.9)      (0.5)         -             -       (6.3)
Agronomy                           -          -     (151.8)     (36.3)     (42.2)         -             -     (230.3)
Refining & trading            (533.7)         -          -          -          -          -             -     (533.7)
_____________________________________________________________________________________________________________________
                              (537.2)      (0.4)    (151.8)     (38.2)     (42.7)         -             -     (770.3)
Corporate                      (75.1)                    -          -          -                        -      (75.1)
_____________________________________________________________________________________________________________________
Total                         (612.3)      (0.4)    (151.8)     (38.2)     (42.7)         -             -     (845.4)
_____________________________________________________________________________________________________________________

Capital expenditure - intangible assets
Plant science                    1.4          -          -          -          -          -             -        1.4
Refining & trading               3.3          -          -          -          -          -             -        3.3
_____________________________________________________________________________________________________________________
Total                            4.7          -          -          -          -          -             -        4.7
_____________________________________________________________________________________________________________________

Intangible amortisation
Plant science                    0.3          -          -          -          -          -             -        0.3
Refining & trading              18.1          -          -          -          -          -             -       18.1
_____________________________________________________________________________________________________________________
Total                           18.4          -          -          -          -          -             -       18.4
_____________________________________________________________________________________________________________________

Asset impairment
Refining & trading          22,778.9          -          -          -          -          -             -   22,778.9
_____________________________________________________________________________________________________________________
Total                       22,778.9          -          -          -          -          -             -   22,778.9
_____________________________________________________________________________________________________________________





                                  UK     Europe     Africa       Asia      India       JV's   Elimination      Group
                                £000       £000       £000       £000       £000       £000          £000       £000
_____________________________________________________________________________________________________________________

Impairment of investments
Corporate                       60.0          -          -          -          -          -             -       60.0
_____________________________________________________________________________________________________________________
Total                           60.0          -          -          -          -          -             -       60.0
_____________________________________________________________________________________________________________________

Share-based payments
Corporate                    1,857.0          -          -          -          -          -             -    1,857.0
_____________________________________________________________________________________________________________________
Total                        1,857.0          -          -          -          -          -             -    1,857.0
_____________________________________________________________________________________________________________________



Year ended 31 December 2006
                                  UK     Europe     Africa       Asia      India       JV's   Elimination      Group
                                £000       £000       £000       £000       £000       £000          £000       £000
_____________________________________________________________________________________________________________________

Revenue to external customers
Agronomy                           -          -          -        1.7          -      (11.5)            -       (9.8)
Refining & trading           1,570.1          -          -          -          -          -             -    1,570.1
_____________________________________________________________________________________________________________________
Total                        1,570.1          -          -        1.7          -      (11.5)            -    1,560.3
_____________________________________________________________________________________________________________________

Operating loss
Agronomy                           -          -   (1,578.0)    (786.1)    (279.5)    (121.5)            -   (2,765.1)
Refining & trading          (6,669.3)         -          -          -          -          -             -   (6,669.3)
_____________________________________________________________________________________________________________________
                            (6,669.3)         -   (1,578.0)    (786.1)    (279.5)    (121.5)            -   (9,434.4)
Corporate                   (3,194.3)         -          -          -          -          -             -   (3,194.3)
_____________________________________________________________________________________________________________________
Total                       (9,863.6)         -   (1,578.0)    (786.1)    (279.5)    (121.5)            -  (12,628.7)
_____________________________________________________________________________________________________________________

Assets by business segment
Agronomy                           -          -    1,317.8      703.8      446.0      480.1        (161.0)   2,786.7
Refining & trading          28,285.8          -          -          -          -          -      (8,736.7)  19,549.1
_____________________________________________________________________________________________________________________
                            28,285.8          -    1,317.8      703.8      446.0      480.1      (8,897.7)  22,335.8
Corporate                   81,873.5          -          -          -          -          -     (33,157.1)  48,716.4
_____________________________________________________________________________________________________________________
Total                      110,159.3          -    1,317.8      703.8      446.0      480.1     (42,054.8)  71,052.2
_____________________________________________________________________________________________________________________

Liabilities by business segment
Agronomy                           -          -   (4,190.3)  (1,744.7)  (1,058.2)    (634.6)      5,068.5   (2,559.3)
Refining & trading         (42,262.3)         -          -          -          -          -      36,986.3   (5,276.0)
_____________________________________________________________________________________________________________________
                           (42,262.3)         -   (4,190.3)  (1,744.7)  (1,058.2)    (634.6)     42,054.8   (7,835.3)
Corporate                   (1,579.8)         -          -          -          -          -             -   (1,579.8)
_____________________________________________________________________________________________________________________
Total                      (43,842.1)         -   (4,190.3)  (1,744.7)  (1,058.2)    (634.6)     42,054.8   (9,415.1)
_____________________________________________________________________________________________________________________


                                  UK     Europe     Africa       Asia      India       JV's   Elimination      Group
                                £000       £000       £000       £000       £000       £000          £000       £000    
_____________________________________________________________________________________________________________________   
                        
Capital expenditure
Agronomy                           -          -      342.0       27.4       94.0          -             -      463.4
Refining & trading          11,078.9          -          -          -          -          -             -   11,078.9
_____________________________________________________________________________________________________________________
Total                       11,078.9          -      342.0       27.4       94.0          -             -   11,542.3
_____________________________________________________________________________________________________________________

Depreciation
Agronomy                           -          -       38.8       15.1       33.3          -             -       87.2
Refining & trading             280.4          -          -          -          -          -             -      280.4
_____________________________________________________________________________________________________________________
                               280.4          -       38.8       15.1       33.3          -             -      367.6
_____________________________________________________________________________________________________________________

Intangible amortisation
Refining & trading               7.0          -          -          -          -          -             -        7.0
_____________________________________________________________________________________________________________________
Total                            7.0          -          -          -          -          -             -        7.0
_____________________________________________________________________________________________________________________

Share-based payments
Corporate                    1,135.0          -          -          -          -          -             -    1,135.0
_____________________________________________________________________________________________________________________
Total                        1,135.0          -          -          -          -          -             -    1,135.0
_____________________________________________________________________________________________________________________



4.  Revenue and administrative expenses

Revenue recognised in the income statement is analysed as follows:
                                                                                             Year            Year
                                                                                            ended           ended
                                                                                      31 December     31 December
                                                                                             2007            2006
                                                                                             £000            £000
__________________________________________________________________________________________________________________
Sales of goods                                                                           10,579.7         1,560.3
Finance revenue                                                                           1,572.5           566.4
__________________________________________________________________________________________________________________
                                                                                         12,152.2         2,126.7
__________________________________________________________________________________________________________________

No revenue was derived from exchanges of goods or services.


Group operating loss is stated after charging/(crediting):
                                                                                            Year            Year
                                                                                           ended           ended
                                                                                     31 December     31 December
                                                                                            2007            2006
                                                                                            £000            £000
_________________________________________________________________________________________________________________
Research and development costs written off                                                 110.4           976.0


Depreciation of plant, property and equipment
 - owned assets                                                                            462.7           310.1
 - impairment                                                                           22,778.9               -
 - leased assets                                                                           382.7            57.5
Amortisation of intangible assets                                                           18.4             3.5
Impairment of Goodwill                                                                      64.1             6.3
_________________________________________________________________________________________________________________
Total depreciation and amortisation expense                                             23,706.8           377.4
_________________________________________________________________________________________________________________

(Profit)/loss on disposal of fixed assets                                                    7.0               -
Net foreign currency differences                                                          (45.1)               -


Auditors' remuneration
 - audit fees                                                                              115.0           119.3
 - interim audit                                                                            29.6            45.5
 - overseas audit                                                                          165.5           126.0
 - taxation services                                                                       167.5            18.0
 - audit of IFRS conversion                                                                 40.7               -
 - advice in relation to establishment of the D1-BP Fuel Crops joint venture                23.6               -
 - corporate finance services                                                                  -            85.0
_________________________________________________________________________________________________________________
 Total                                                                                     541.9           393.8
_________________________________________________________________________________________________________________

Payments under operating leases
 - property rents                                                                          136.7               -
 - plant and machinery                                                                     126.7           156.0


Provision for bad and doubtful debts                                                        16.3               -


Financial assets at fair value through income statement classified as held for
trading
 - fair value on foreign currency contracts                                               (56.3)               -


Financial liabilities at fair value through income statement classified as held
for trading
 - fair value on commodity swaps                                                         1,101.7               -
 - fair value on foreign currency contracts                                                 33.6               -
_________________________________________________________________________________________________________________



5. Staff numbers and costs

The average number of persons employed by the Group (including Directors) during
the year, analysed by category was as follows:
                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                            Number          Number
___________________________________________________________________________________________________________________
Executive Directors                                                                              3               4
Technical                                                                                       66              25
Administration and operational staff                                                           204              70
___________________________________________________________________________________________________________________
Total                                                                                          273              99
___________________________________________________________________________________________________________________


The costs incurred in respect of these employees (including Directors) were:
                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                              £000            £000
___________________________________________________________________________________________________________________
Wages and salaries                                                                         6,271.8         4,867.4
Social security costs                                                                        752.2           409.9
___________________________________________________________________________________________________________________
Total                                                                                      7,024.0         5,277.3
___________________________________________________________________________________________________________________



The average number of persons employed by the Company (including Executive
Directors) during the year was:
                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                            Number          Number
___________________________________________________________________________________________________________________
Executive Directors                                                                              3               4
Administration and operational staff                                                             1               1
___________________________________________________________________________________________________________________
Total                                                                                            4               5
___________________________________________________________________________________________________________________


The costs incurred in respect of these employees (including Directors) were:
                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                              £000            £000
___________________________________________________________________________________________________________________
Wages and salaries                                                                           943.2           714.4
Social security costs                                                                        132.8            95.7
___________________________________________________________________________________________________________________
Total                                                                                      1,076.0           810.1
___________________________________________________________________________________________________________________

6. Directors' remuneration
                                                                                              
                                                                          Benefits    Year ended    Year ended          
                                            Basic                          In kind   31 December   31 December
                                         salaries      Bonus       Fees  and other          2007          2006
                                             £000       £000       £000       £000          £000          £000
_______________________________________________________________________________________________________________
Executive Directors
Elliott Michael Mannis                      200.0       50.0          -       16.4         266.4         223.3
Richard Keith Gudgeon (i)                    67.5       25.0          -        5.8          98.3          58.6
Stephen Peter Douty (ii)                    112.5       25.0          -        9.5         147.0         179.1
William Peter Campbell (iii)                120.7          -          -        2.7         123.4         140.0
Philip Kenneth Wood                             -          -          -          -             -         164.4
Christopher Tawney (iv)                      50.0          -          -        3.1          53.1             -
Non-Executive Directors
Karl Eric Watkin                                -          -       55.0          -          55.0          75.0
John Barclay Forrest                            -          -       40.6          -          40.6          35.0
Clive Neil Morton                               -          -       52.2          -          52.2          62.5
Peter John Davidson (v)                         -       10.0       23.3        0.6          33.9          35.9
Lord Oxburgh of Liverpool                    75.0          -          -          -          75.0          12.5
Christopher Leaver (vi)                         -          -       17.5          -          17.5             -
Moira Black (vii)                               -          -        9.1          -           9.1             -
_______________________________________________________________________________________________________________
                                            625.7      110.0      197.7       38.1         971.5         986.3
_______________________________________________________________________________________________________________
(i)       Richard Keith Gudgeon resigned as a Director on 28 September 2007.      
(ii)      Stephen Peter Douty resigned as a Director on 28 September 2007.
(iii)     William Peter Campbell resigned as a Director on 31 March 2007. 
          Amounts totaling £90,690 were paid to him as compensation for loss of 
          office and are included in the table above.
(iv)      Christopher Tawney was appointed as a Director on 26 September 2007.
(v)       Peter John Davidson resigned as a Director on 28 September 2007.
          During the year ended 31 December 2007 the Group incurred consultancy 
          costs of £88,458 to Davidson Technology Limited (2006: £161,333), a 
          company in which Peter John Davidson has indirect control.
(vI)      Christopher Leaver was appointed as a Director on 13 July 2007.
(viI)     Moira Black was appointed as a Director on 26 September 2007.

Directors' share options:
                            Options   Granted  Exercised  Lapsed in       Options  Exercise         Date        Expiry
                          1 January      2007       2007       2007   31 December     price  exercisable          Date
_______________________________________________________________________________________________________________________
        Karl Eric Watkin     39,062         -          -          -     39,062    £1.280    October 2005  October 2014
  William Peter Campbell     39,062         -   (39,062)          -          -    £1.280    October 2005  October 2014
    John Barclay Forrest     78,125         -          -          -     78,125    £1.280    October 2005  October 2014
     Peter John Davidson    156,250         -  (156,250)          -          -    £1.280    October 2005  October 2014
       Clive Neil Morton    156,250         -          -          -    156,250    £1.280    October 2005  October 2014
  William Peter Campbell    106,897         -          -  (106,897)          -    £2.900             (a)  October 2015
  William Peter Campbell    136,363         -          -  (136,363)          -    £2.640             (a)    March 2016
  Elliott Michael Mannis     33,613         -          -          -     33,613    £2.975             (a)      May 2015
  Elliott Michael Mannis    132,075         -          -          -    132,075    £2.650             (a)      May 2015
  Elliott Michael Mannis    500,000         -          -          -    500,000    £2.000             (a)  January 2016
     Stephen Peter Douty     56,497         -          -          -     56,497    £1.770             (a)  January 2015
     Stephen Peter Douty    132,075         -          -          -    132,075    £2.650             (a)      May 2015
     Stephen Peter Douty    170,454         -          -          -    170,454    £2.640             (a)    March 2016
   Richard Keith Gudgeon    100,378         -          -          -    100,378    £2.640             (a)    March 2016
         Lord Oxburgh of          -    50,000          -          -     50,000    £0.010             (a)     September
               Liverpool                                                                                       2016
  Elliott Michael Mannis          -   487,500          -          -    487,500    £1.725             (a)    March 2017
     Stephen Peter Douty          -   175,000          -          -    175,000    £1.725             (a)    March 2017
   Richard Keith Gudgeon          -    22,727          -          -     22,727    £2.640             (a)      May 2016
   Richard Keith Gudgeon          -    75,000          -          -     75,000    £1.725             (a)    March 2017
_______________________________________________________________________________________________________________________
                          1,837,101   810,227  (195,312)  (243,260)  2,208,756
_______________________________________________________________________________________________________________________

(a) These options have been granted as one third exercisable on the first
anniversary of their date of grant. Thereafter a further 1/36 vests each month
over the next 24 months so that the full amount is capable of being exercised
after three years. The aggregate amounts of gains made by former Directors on
the exercise of share options during the year amounted to £178,515. This
represents the market price of the shares in excess of the exercise price on the
date the options were exercised.


7. Finance revenue and costs

                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                              £000            £000
___________________________________________________________________________________________________________________

Interest received on bank deposits                                                         1,572.5           566.4
___________________________________________________________________________________________________________________
Interest income                                                                            1,572.5           566.4
___________________________________________________________________________________________________________________

Bank loans and overdrafts                                                                     63.9             0.9
Interest payable under finance leases and hire purchase agreements                           242.9            46.0
___________________________________________________________________________________________________________________
Interest expense                                                                             306.8            46.9
___________________________________________________________________________________________________________________


8. Taxation

Tax recognised in the income statement

                                                                                                Year         Year
                                                                                               ended        ended
                                                                                         31 December  31 December
                                                                                                2007         2006
                                                                                                £000         £000
__________________________________________________________________________________________________________________
Current tax charge - UK                                                                            -            -
Current tax charge - overseas (India)                                                           36.7            -
__________________________________________________________________________________________________________________
Tax reported in consolidated income statement                                                   36.7            -
__________________________________________________________________________________________________________________


Reconciliation

A reconciliation of total tax applicable to accounting profit before tax at the
statutory tax rate at the Group's effective tax rate for the years ended 31
December 2007 and 31 December 2006 is as follows:

                                                                                          Year               Year
                                                                                         ended              ended
                                                                                   31 December        31 December
                                                                                          2007               2006
                                                                                          £000               £000
__________________________________________________________________________________________________________________
Loss on ordinary activities before taxation                                         (46,099.5)         (12,627.6)
At United Kingdom tax rate of 30% (2006 - 30%)                                      (13,829.9)          (3,788.3)
Expenditure not allowable for tax purposes                                               100.0              100.0
Unrecognised deferred tax asset on impairment of assets                                6,893.7                  -
Unrecognised deferred tax asset on ULSD swaps                                            330.5                  -
Share option charge                                                                      557.1              340.5
Share of loss of joint venture                                                           443.7                  -
Transfer of operations to joint venture not taxable                                      992.0                  -
Unrecognised tax losses                                                                3,513.9            2,554.6
Losses of overseas subsidiaries for which no tax relief available                      1,035.7              793.2
__________________________________________________________________________________________________________________
Total tax expense reported in consolidated income statement                               36.7                  -
__________________________________________________________________________________________________________________


9. Loss per ordinary share
                                                                                              Year            Year
                                                                                             ended           ended
                                                                                       31 December     31 December
                                                                                              2007            2006
                                                                                            Number          Number
___________________________________________________________________________________________________________________
Weighted average number of shares in issue                                              61,638,732      31,584,579
___________________________________________________________________________________________________________________

                                                                                             Pence           Pence
___________________________________________________________________________________________________________________
Loss per ordinary share - basic and diluted                                                  74.85           39.98
___________________________________________________________________________________________________________________

The number of shares in issue at 31 December 2007 was 62,241,219 (2006:
61,480,578). For the purposes of calculating the loss per ordinary share the
weighted average number of shares excludes 193,645 shares (2006: 193,645 shares)
held by the D1 Oils plc Employee Benefit Trust. No diluted loss per share has
been disclosed as the share options are anti-dilutive.


10. Property, plant and equipment


                                     Freehold                              Motor  Plant and       Fixtures
                                         land  Buildings  Plantations   vehicles  machinery   and fittings      Total
                                         £000       £000         £000       £000       £000           £000       £000
_______________________________________________________________________________________________________________________
Cost
At 1 January 2006                     1,283.2          -        650.7       24.4    2,217.4           73.7    4,249.4
Additions                                   -       25.8         64.3       14.0   11,073.7          271.4   11,449.2
Disposals                                   -          -            -      (7.7)      (6.2)          (3.8)     (17.7)
Reclassify as assets held for sale          -          -            -          -    (100.0)              -    (100.0)
Sale of assets to joint venture             -          -      (650.7)          -          -              -    (650.7)
_______________________________________________________________________________________________________________________
At 31 December 2006                   1,283.2       25.8         64.3       30.7   13,184.9          341.3   14,930.2
_______________________________________________________________________________________________________________________
Additions                             2,941.7          -        346.5      229.7   13,297.1          347.7   17,162.7
Disposal                                    -          -            -          -          -              -          -
Reclassifications                           -      300.0            -          -    (300.0)              -          -
Foreign exchange movements                  -                     1.0        4.2       10.3            7.7       23.2
Transfer of assets to joint venture         -          -      (411.8)    (242.8)    (339.0)        (203.6)  (1,197.2)
_______________________________________________________________________________________________________________________
At 31 December 2007                   4,224.9      325.8            -       21.8   25,853.3          493.1   30,918.9
_______________________________________________________________________________________________________________________
Accumulated depreciation
At 1 January 2006                           -          -            -        4.9       60.2           15.2       80.3
Charge for the year                         -        4.1            -        9.9      281.1           68.5      363.6
_______________________________________________________________________________________________________________________
At 31 December 2006                         -        4.1            -       14.8      341.3           83.7      443.9
_______________________________________________________________________________________________________________________
Charge for the year                         -       30.0            -        5.5      531.8          278.1      845.4
Impairment                            1,241.7      253.2            -          -   21,127.9          156.1   22,778.9
Foreign exchange movements                  -          -            -        0.4        3.4            3.2        7.0
Transfer of assets to joint venture         -          -            -      (3.3)      (1.5)        (135.8)    (140.6)
_______________________________________________________________________________________________________________________
At 31 December 2007                   1,241.7      287.3            -       17.4   22,002.9          385.3   23,934.6
_______________________________________________________________________________________________________________________
Net book value
At 31 December 2007                   2,983.2       38.5            -        4.4    3,850.4          107.8    6,984.3
_______________________________________________________________________________________________________________________
At 31 December 2006                   1,283.2       21.7         64.3       15.9   12,843.6          257.6   14,486.3
_______________________________________________________________________________________________________________________
At 1 January 2006                     1,283.2          -        650.7       19.5    2,157.2           58.5    4,169.1
_______________________________________________________________________________________________________________________


Impairment

In accordance with accounting standards, the Group undertakes an annual
impairment test of its cash generating units. The refinery operations at our
Middlesbrough and Bromborough sites have been impacted by high feedstock prices
and imports of heavily subsidised biodiesel from the US. As a consequence, the
Directors have stated their intention to cease refining and trading operations,
to close the UK refining sites at Middlesbrough and Bromborough and to impair
the assets at both sites down to their estimated net realisable values. The
total impairment charge is as follows:


                                                            2007                      2007           2007        
                                                        Freehold         2007    Plant and   Fixtures and        2007
                                                            land    Buildings    machinery       fittings       Total
                                                            £000         £000         £000           £000        £000
______________________________________________________________________________________________________________________
Middlesbrough - site                                           -        253.2            -              -       253.2
Bromborough - site                                       1,241.7            -            -              -     1,241.7
Middlesbrough - refinery and associated assets                 -            -     12,198.9          156.1    12,355.0
Bromborough - refinery and associated assets                   -            -      8,929.0              -     8,929.0
______________________________________________________________________________________________________________________
                                                         1,241.7        253.2     21,127.9          156.1    22,778.9
______________________________________________________________________________________________________________________

All impairment losses are attributable to the refining and trading segment and
have been recognised in the income statement as a separate line item within
operating profit.

Middlesbrough

The impairment of the refinery and associated assets held at Middlesbrough is
based on the Board's estimate of their realisable value less costs of
realisation. A charge of £12,355,000 has been recognised in the year (2006:
£nil). At 31 December 2007 these assets have a carrying value of £3,750,000.
The carrying value of these assets is based on recent discussions held with
third parties who have expressed an interest in buying the D1-20 units.

The carrying value of the Middlesbrough site is a based on the Board's estimate
of the realisable value net of any associated costs and an impairment charge of
£253,200 (2006: £nil) has been recognised. The carrying value of the
Middlesbrough site at 31 December 2007 stands at £1,000,000 (2006: £1,283,200).


Bromborough

The impairment of the Bromborough refinery assets was based on value in use and
resulted in an impairment of £8,929,000 (2006: £nil). These now have a carrying
value of £nil.

The carrying value of the Bromborough site is a based on an independent
third-party valuation and has been impaired by £1,241,700 (2006: £nil) to
£2,000,000.


11. Intangible assets

                                                                             Software
                                                                             licences      Goodwill        Total
                                                                                 £000          £000         £000
_________________________________________________________________________________________________________________
Cost
At 1 January 2006                                                                 1.5          64.1         65.6
Additions in the period                                                          60.5             -         60.5
_________________________________________________________________________________________________________________
At 31 December 2006                                                              62.0          64.1        126.1
_________________________________________________________________________________________________________________
Additions in the period                                                           4.7             -          4.7
_________________________________________________________________________________________________________________
At 31 December 2007                                                              66.7          64.1        130.8
_________________________________________________________________________________________________________________
Accumulated amortisation
At 1 January 2006                                                                 0.6             -          0.6
Charge for the year                                                               6.4             -          6.4
_________________________________________________________________________________________________________________
At 31 December 2006                                                               7.0             -          7.0
_________________________________________________________________________________________________________________
Charge for the year                                                              18.4             -         18.4
Impairment                                                                          -          64.1         64.1
_________________________________________________________________________________________________________________
At 31 December 2007                                                              25.4          64.1         89.5
_________________________________________________________________________________________________________________
Net book value
At 31 December 2007                                                              41.3             -         41.3
_________________________________________________________________________________________________________________
At 31 December 2006                                                              55.0          64.1        119.1
_________________________________________________________________________________________________________________
At 1 January 2006                                                                 0.9          64.1         65.0
_________________________________________________________________________________________________________________


Goodwill arose on the acquisition of D1 Oils Subsidiary Limited by D1 Oils
Trading Limited in 2004. It represents the excess of the fair value of the
acquired net assets over their book value. As from 1 January 2006, the date of
transition to reporting under IFRS, goodwill is no longer amortised but is now
subject to annual impairment testing. The Directors have taken the decision to
impair the carrying value of the goodwill in light of the decision to cease
refining and trading operations in the UK.

12. Investments in subsidiaries and jointly controlled entities



The Company owns more than 10% of the share capital of the following companies:


                                                              Nature of      Country of  Shareholder
Name                                                           business   incorporation        class   Percentage
_________________________________________________________________________________________________________________
D1 Oils Trading Limited                               Biodiesel trading              UK     Ordinary         100%
D1 Oils Subsidiary Limited                            Biodiesel trading              UK     Ordinary         100%
D1 (UK) Limited                                       Biodiesel trading              UK     Ordinary         100%
D1-BP Fuel Crops Limited                           Jatropha plantations              UK     Ordinary          50%
D1 Oils Plant Science (UK) Limited                        Plant science              UK     Ordinary         100%
D1 Oils Plant Science Belgium BVT                         Plant science         Belgium     Ordinary         100%
D1 Oils Plant Science Netherlands BVT                     Plant science     Netherlands     Ordinary         100%
D1 Oils Plant Science Australia Pty Limited                     Dormant       Australia     Ordinary         100%
D1 Oils Plant Science West Africa                         Plant science      Cape Verde     Ordinary         100%
D1 Oils Plant Science Swaziland                           Plant science       Swaziland     Ordinary         100%
D1 Oils Plant Science Indonesia                           Plant science       Indonesia     Ordinary         100%
D1 Oils Plant Science Thailand                            Plant science        Thailand     Ordinary         100%
D1 Oils Plant Science Zambia                              Plant science          Zambia     Ordinary         100%
D1 Oils Plant Science Philippines                         Plant science     Philippines     Ordinary         100%
D1 Oils Plant Science Madagascar                          Plant science      Madagascar     Ordinary         100%
D1 Oils Plant Science India Pvt                           Plant science           India     Ordinary         100%
D1 Oils Plant Science Hybrid Creations (Asia)             Plant science        Malaysia     Ordinary         100%
D1 Oils Africa Pty Limited                                      Dormant    South Africa     Ordinary          95%
D1 Oils Ghana Pty Limited                                       Dormant           Ghana     Ordinary         100%
D1 Oils Asia Pacific Pte Limited                          Plant science       Singapore     Ordinary         100%
GroupBio Limited                                     Engine development              UK     Ordinary          55%

Investments in the Group comprise interests in joint ventures and trade
investments. Investments in the Company comprise interests in subsidiary
undertakings and trade investments.



Group
                                          D1-BP Fuel Crops       Other joint             Other
                                             joint venture          ventures       investments             Total
                                                      £000              £000              £000              £000
_________________________________________________________________________________________________________________
Cost
1 January 2007                                           -           (154.6)              18.2           (136.4)
Additions in the year                             16,693.5             903.5              60.0          17,657.0
Disposals in the year                                    -                 -            (18.2)            (18.2)
Share of joint ventures' results                 (1,516.5)           (249.5)                 -         (1,766.0)
Exchange difference                                    3.5              12.5                 -              16.0
Impairment                                               -                 -            (60.0)            (60.0)
Written off on transfer to BP-D1                         -           (511.9)                 -           (511.9)
Fuelcrops
31 December 2007                                  15,180.5                 -                 -          15,180.5

Additions in the year for other joint ventures represent investments in joint
ventures subsequently transferred into the D1-BP Fuel Crops joint venture.



Company
                                         D1-BP Fuel Crops        Subsidiary             Other
                                            joint venture      undertakings       investments             Total
                                                     £000              £000              £000              £000
_________________________________________________________________________________________________________________
Cost
1 January 2007                                          -             125.0              18.2             143.2
Additions in the year                            12,787.0                 -                 -          12,787.0
Disposals in the year                                   -                 -            (18.2)            (18.2)
_________________________________________________________________________________________________________________
31 December 2007                                 12,787.0             125.0                 -          12,912.0
_________________________________________________________________________________________________________________


The Group's share of joint ventures' assets and liabilities are as follows:
                                                                                           2007              2006
                                                                                           £000              £000
_________________________________________________________________________________________________________________
Non Current assets                                                                        883.5             416.8
Current assets                                                                         16,527.5              63.2
Current liabilities                                                                   (2,193.0)             (6.0)
Non-current liabilities                                                                  (37.5)           (628.6)
_________________________________________________________________________________________________________________
Share of net assets of joint ventures                                                  15,180.5           (154.6)
_________________________________________________________________________________________________________________



The Group's share of joint ventures' losses is as follows:
                                                                                           2007              2006
                                                                                           £000              £000
_________________________________________________________________________________________________________________
Revenue                                                                                       -                 -
Net operating costs                                                                   (1,493.0)           (121.5)
_________________________________________________________________________________________________________________
Operating profit                                                                      (1,493.0)           (121.5)
Net finance income                                                                         21.0                 -
Share of loss from joint ventures accounted for using the equity method                  (70.5)                 -
_________________________________________________________________________________________________________________
Profit before tax                                                                     (1,542.5)           (121.5)
Minority interest                                                                          26.0               0.0
_________________________________________________________________________________________________________________
Share of losses of joint ventures                                                     (1,516.5)           (121.5)
_________________________________________________________________________________________________________________


D1-BP Fuel Crops Limited had no capital commitments as at 31 December 2007.



13. Creation of joint venture with BP

On 27 July 2007, Shareholders approved a 50/50 joint venture between D1 Oils
Trading Limited and BP International Limited for the purpose of planting
Jatropha curcas and selling jatropha oil.

The joint venture was established on 1 October 2007 through the creation of
D1-BP Fuel Crops Limited, a company incorporated in England, in which D1 Oils
Trading Limited and BP International Limited own equal shares.

Under the terms of the joint venture agreement, D1 has transferred its existing
planting and overseas operations into D1-BP Fuel Crops Limited and has granted
to BP International Limited options over 11,725,467 ordinary shares in D1 Oils
plc which represents 16% of the issued share capital of the Company after
exercise of the option in full. In consideration, BP International Limited has
undertaken to fund the first £31.75 million of the Joint Venture's working
capital requirements through an equity subscription. Thereafter, both parties
will fund the expenditure within the Joint Venture on a pro rata basis. It is
anticipated that the total funding requirement of the Joint Venture over the
next five years will amount to approximately £80 million.

The options granted to BP International are detailed in note 28. Upon issue, it
is intended that the option shares will be admitted to trading on AIM and will
rank pari passu with all other Ordinary Shares



Exceptional item - deficit on transfer of operations to joint venture
                                                                                                             £'000
__________________________________________________________________________________________________________________
Investment in D1-BP Fuel Crops Limited (50% share)                                                        16,693.5
Share option recognised in equity                                                                       (12,787.0)
Net assets transferred to joint venture or impaired                                                      (4,993.3)
Costs associated with transfer                                                                           (1,677.5)
__________________________________________________________________________________________________________________
Net deficit on transfer                                                                                  (2,764.3)
__________________________________________________________________________________________________________________


14. Assets held for resale

The Company has been actively pursuing a disposal strategy for certain oil
storage facilities located in Ghana. As at 31 December 2007 terms were agreed
for their sale subject to certain conditions being met. The Directors have a
reasonable expectation that these conditions will be met early in 2008 and that
the disposal will realise net revenue in excess of the carrying value of
£100,000. Disposal of the assets will be recognised when all conditions have
been satisfied.




15. Inventories


                                                                        Group      Group    Company    Company
                                                                         2007       2006       2007       2006
                                                                         £000       £000       £000       £000
______________________________________________________________________________________________________________
Raw material stock                                                    1,962.7    3,023.3          -          -
Work in progress                                                         98.5          -          -          -
Finished product                                                        159.1          -          -          -
______________________________________________________________________________________________________________
Total                                                                 2,220.3    3,023.3          -          -
______________________________________________________________________________________________________________


16. Trade and other receivables


                                                                  Group        Group      Company       Company
                                                                   2007         2006         2007          2006
                                                                   £000         £000         £000          £000
_______________________________________________________________________________________________________________
Non-current
Amounts owed by joint ventures                                        -        898.9            -             -
Amounts owed by Group undertakings                                    -            -            -
Other debtors                                                         -         50.0            -             -
_______________________________________________________________________________________________________________
                                                                      -        948.9            -             -
_______________________________________________________________________________________________________________
Current
Trade receivables                                                 909.0        547.8            -             -
Amounts owed by Group undertakings                                    -            -        431.6      33,152.7
Other receivables                                               2,776.5            -            -             -
Prepayments and accrued income                                    432.6        346.2         26.1           8.2
Taxation and social security                                        0.6          4.3            -             -
_______________________________________________________________________________________________________________
                                                                4,118.7        898.3        457.7      33,160.9
_______________________________________________________________________________________________________________

As at 31 December 2007, trade receivables at a nominal value of £16,300 were
impaired and are fully provided for. Movements in the provision for impairment
of receivables were as follows:
                                                                             Individually  Collectively
                                                                                 impaired      impaired      Total
                                                                                     £000          £000       £000
__________________________________________________________________________________________________________________
At 1 January 2007                                                                       -             -          -
Charge for the year                                                                  16.3             -       16.3
__________________________________________________________________________________________________________________
At 31 December 2007                                                                  16.3             -       16.3
__________________________________________________________________________________________________________________

The Company had no impairment provisions at any time during 2007 or 2006.



As at 31 December 2007, the ageing of trade receivables is as follows:

Group
                                                        Not yet     Overdue      Overdue     Overdue
                                                            due   < 30 days   31-60 days   > 60 days      Total
                                                           £000        £000         £000        £000       £000
________________________________________________________________________________________________________________
Gross trade receivables as at 31 December 2007            829.1        77.0            -        19.2      925.3
Other receivables                                             -     2,776.5            -           -    2,776.5
Impairment                                                    -           -            -      (16.3)     (16.3)
_______________________________________________________________________________________________________________
Net trade receivables as at 31 December 2007              829.1     2,853.5            -         2.9    3,685.5
_______________________________________________________________________________________________________________


Company
                                                        Not yet     Overdue     Overdue     Overdue
                                                            due   < 30 days  31-60 days   > 60 days       Total
                                                           £000        £000        £000        £000        £000
_______________________________________________________________________________________________________________
Amounts owed by Group undertakings                     71,321.7           -           -           -    71,321.7
Impairment of amounts owed by Group undertakings     (70,890.1)           -           -           -  (70,890.1)
_______________________________________________________________________________________________________________
Net trade receivables as at 31 December 2007              431.6           -           -           -       431.6
_______________________________________________________________________________________________________________


The Company has advanced funds to subsidiary companies to meet their working
capital and capital expenditure funding requirements. Amounts owed by Group
companies have no fixed repayment date. The Company has not made any calls on
subsidiary companies to repay these amounts so they have been classified as not
yet due. In view of the Board's decision to close the UK refining and trading
operations at Middlesbrough and Bromborough, and in light of the transfer of
overseas planting operations into the D1-BP Fuel Crops joint venture during the
course of the year, amounts owed by Group undertakings have been impaired to
their estimated realisable amount.  The balance of amounts owed by Group
undertakings of £431,600 represents the balance due from D1 Oils Plant Science
Limited which forms an integral part of the Group's strategy and the Directors
believe there is a reasonable expectation that this amount will be recoverable
in full in the future.



The Group has no concerns over the credit quality of amounts which are overdue
and not impaired. An amount of £2,119,000 included in other receivables
represents amounts owed to the Group by D1-BP Fuel Crops Limited.




17. Other financial assets


                                                                  Group        Group      Company      Company
                                                                   2007         2006         2007         2006
                                                     Note          £000         £000         £000         £000
_______________________________________________________________________________________________________________
Cash held as collateral against finance lease         (a)       2,317.3      2,317.3            -            -
creditors
Cash held as collateral against swap transactions     (b)       2,000.0            -      2,000.0            -
Cash held as collateral against letter of credit      (c)       1,112.4            -      1,112.4            -
transactions
Cash held as collateral against 3rd party             (d)         250.0            -        250.0            -
guarantees
Other cash deposits                                             5,000.0            -      5,000.0            -
Accrued bank interest                                             285.6            -        285.6            -
Forward currency contracts                                         56.3            -         56.3            -
_______________________________________________________________________________________________________________
                                                               11,021.6      2,317.3      8,704.3            -
_______________________________________________________________________________________________________________

(a)  The Group has a deposit of £2,317,300 (2006: £2,317,300) charged
to Allied Irish Bank as cash collateral for part of the finance lease creditor.
The deposit earns interest at 5%.

(b)  The Group has entered into swap transactions with its bank to
hedge its exposure to fluctuating Ultra Low Sulphur Diesel prices. An amount of
£2,000,000 (2006: £nil) has been deposited with the bank to act as security for
any accrued trading losses. The bank holds a charge over these funds which are
placed on deposit and earn interest at variable short-term deposit rates.

(c)  During the year, the Group entered into transactions to buy raw
materials which were paid for by means of documentary letters of credit. At 31
December the Group has a £3,000,000 facility (2006: £nil) with its bank to enter
into documentary letters of credit transactions. The bank requires the Group to
place on deposit as collateral an amount equal to the value of any open letters
of credit, and, as at 31 December 2007, the Group had deposited amounts totaling
£1,112,400 (2006: £nil). The bank holds a charge over these funds which are
placed on deposit and earn interest at variable short-term deposit rates.

(d)  During the year, the Group has entered into an agreement for the
procurement of bulk storage facilities. Under the terms of the agreement, the
Group's bank has provided a guarantee of £250,000 to the supplier. The guarantee
expires on 30 September 2008. As at 31 December 2007, the Group has deposited an
amount of £250,000 (2006: £nil) with its bank to act as collateral for the
guarantee. The bank holds a charge over these funds which are placed on deposit
and earn interest at variable short-term deposit rates.

Other cash deposits represent funds placed on 12 month deposit with Bank of
Scotland at an interest rate of 5.83%. The maturity date is 21 January 2008.

Forward currency contracts represent the fair value of futures contracts to buy
US dollars at fixed rates (note 29).



18. Cash and short-term deposits


                                                                  Group         Group      Company       Company
                                                                   2007          2006         2007          2006
                                                                   £000          £000         £000          £000
________________________________________________________________________________________________________________
Cash at bank and in hand                                        3,206.3       2,261.8      2,635.5       1,764.8
Short-term deposits                                               390.3      46,804.5        390.3      46,804.5
________________________________________________________________________________________________________________
                                                                3,596.6      49,066.3      3,025.8      48,569.3
________________________________________________________________________________________________________________


Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods up to three months depending on
the immediate cash requirements of the Group and earn interest are varying
short-term deposit rates. The fair value of Group cash and cash equivalents at
31 December 2007 is £3,596,600 (2006: £49,066,300).
19. Trade and other payables


                                                                  Group        Group      Company      Company
                                                                   2007         2006         2007         2006
                                                                   £000         £000         £000         £000
______________________________________________________________________________________________________________
Current
Trade payables                                                  1,782.1      2,660.5        194.8        181.8
Taxation and social security                                      585.3        151.4        182.2         42.5
______________________________________________________________________________________________________________
                                                                2,367.4      2,811.9        377.0        224.3
______________________________________________________________________________________________________________

20. Interest-bearing loans and borrowings


                                                                  Group        Group      Company      Company
                                                                   2007         2006         2007         2006
                                                                   £000         £000         £000         £000
______________________________________________________________________________________________________________
Current
Bank overdrafts                                                       -         41.9            -            -
Current obligations under finance leases and hire purchase        432.9        374.2            -            -
agreements
Mortgage payable                                                   60.0         60.0            -            -
______________________________________________________________________________________________________________
                                                                  492.9        476.1            -            -
______________________________________________________________________________________________________________
Non-current
Non-current obligations under finance leases and hire           2,587.2      2,983.6            -            -
purchase agreements
Mortgage payable                                                  720.0        780.0            -            -
______________________________________________________________________________________________________________
                                                                3,307.2      3,763.6            -            -
______________________________________________________________________________________________________________


Group borrowings include a mortgage over Forty Foot Road, Middlesbrough, TS2
1HG. The mortgage is secured by a fixed and floating charge over the property
and is repayable in 56 equal quarterly instalments commencing March 2007.
Interest is charged at 1.75% over LIBOR.



21.     Finance lease and hire purchase commitments



Group
                                                                Minimum Present value      Minimum Present value
                                                               payments   Of payments     payments   of payments
                                                                   2007          2007         2006          2006
                                                                   £000          £000         £000          £000
________________________________________________________________________________________________________________
Within one year                                                   623.3         432.9        617.1         374.2
After one year but not more than five years                     2,818.5       2,587.2      3,400.4       2,983.6
________________________________________________________________________________________________________________
Total minimum lease payments                                    3,441.8       3,020.1      4,017.5       3,357.8
Less amounts representing finance charges                       (421.7)             -      (659.7)             -
________________________________________________________________________________________________________________
                                                                3,020.1       3,020.1      3,357.8       3,357.8
________________________________________________________________________________________________________________


The Company did not have any finance leases in either 2007 or 2006.

In the light of the intended cessation of refining and trading operations, D1 is
in discussions with Allied Irish Bank (the lessor under certain leases of
refining equipment), with a view to terminating such leases in due course.



22. Other financial liabilities


                                                                  Group        Group      Company      Company
                                                                   2007         2006         2007         2006
                                                                   £000         £000         £000         £000
________________________________________________________________________________________________________________
ULSD swaps                                                      1,101.7            -            -            -
Forward currency contracts                                         33.6            -         33.6            -
________________________________________________________________________________________________________________
                                                                1,135.3            -         33.6            -
________________________________________________________________________________________________________________


The Group has entered in to Ultra Low Sulphur Diesel (ULSD) swaps to hedge its
exposure to fluctuating commodity prices. The fair value of these contacts at 31
December was a liability of £1,101,700 (2006: £nil).

Forward currency contracts represent the fair value of futures contracts to buy
US dollars at fixed rates (note 29).



23.     Provisions


                                                                                                      Contractual
                                                                                                      commitments
                                                                                                             £000
_________________________________________________________________________________________________________________
Current                                                                                                         
At 1 January 2007                                                                                               -
Movements in the year                                                                                     3,000.0
a
_________________________________________________________________________________________________________________
At 31 December 2007                                                                                       3,000.0



Provision has been made for the Directors' current best estimate of the cost of
settling various contractual commitments which subsisted as at 31 December 2007.
These commitments arise as a consequence of entering into the joint venture and
the announced changes in strategic direction. This provision is expected to
crystallise within 12 months.



24. Operating lease commitments



Future minimum rentals payable under non-cancellable operating leases as at 31
December 2007 are as follows:


                                                                  Group        Group        Group        Group
                                                               Land and    Plant and     Land and    Plant and
                                                              buildings    equipment    buildings    equipment
                                                                   2007         2007         2006         2006
                                                                   £000         £000         £000         £000
______________________________________________________________________________________________________________
Within one year                                                   159.0        726.9            -            -
After one year but not more than five years                       636.0      2,889.1            -            -
After more than five years                                      1,407.4            -            -            -
______________________________________________________________________________________________________________
                                                                2,202.4      3,616.0            -            -
______________________________________________________________________________________________________________


The Group entered into commercial leases on certain property and items of
machinery.  There are two property leases at Bromborough. Each lease runs until
the year 2106 and each lease contains a break clause exercisable in 2021. The
machinery leases have an average duration of between one and four years. There
are no restrictions placed upon the lessee by entering into these leases.



                                                                                             Company      Company
                                                                                            Land and     Land and
                                                                                           buildings    buildings
                                                                                                2007         2006
                                                                                                £000         £000
_________________________________________________________________________________________________________________
Within one year                                                                                159.0            -
After one year but not more than five years                                                    636.0            -
After more than five years                                                                   1,407.4            -
_________________________________________________________________________________________________________________
                                                                                             2,202.4            -
_________________________________________________________________________________________________________________




25.  Authorised and issued share capital


                                                                Group and    Group and    Group and    Group and
                                                                  Company      company      company      company
                                                                     2007         2006         2007         2006
                                                                   No. of       No. of 
                                                                   shares       shares         £000         £000
_________________________________________________________________________________________________________________
Authorised
Ordinary shares of 1p each                                    200,000,000  100,000,000      2,000.0      1,000.0
_________________________________________________________________________________________________________________
Called up, allotted and fully paid
At 1 January                                                   61,480,578   31,225,517        614.8        312.3
Issued on exercise of share options                               681,521      416,213          6.8          4.1
Issued under bonus share scheme                                    79,120            -          0.8            -
Issued on placing of new shares                                         -   29,838,848            -        298.4
_________________________________________________________________________________________________________________
At 31 December                                                 62,241,219   61,480,578        622.4        614.8
_________________________________________________________________________________________________________________
The company has one class of ordinary shares which carry no rights to fixed
income. On 27 July 2007, the Company increased its authorised share capital from
100,000,000 ordinary shares of 1p each to 200,000,000 ordinary shares of 1p
each.



During the year 681,529 shares with a nominal value of £6,815.29 were allotted
on the exercise of share options as follows:
                                                                                               No of      Average
                                                                                              shares     exercise
                                                                                                            price
_________________________________________________________________________________________________________________
Directors and related parties                                                                156,250        £1.28
Former directors                                                                             413,258        £1.57
Employees and former employees                                                               112,023        £1.43
_________________________________________________________________________________________________________________
                                                                                             681,521        £1.48
_________________________________________________________________________________________________________________


During the year, the directors and other senior executives were given the option
to take all or part of their 2006 bonus entitlement in the form of shares in the
Company at a deemed issue price of £1.725. In total 79,120 shares were issued to
directors and other senior executives as follows:
                                                                                                             No of
Name                                                                                                        shares
__________________________________________________________________________________________________________________
Elliott Michael Mannis                                                                                      37,623
Stephen Peter Douty                                                                                          5,772
Peter John Davidson                                                                                          2,437
Richard Keith Gudgeon                                                                                        2,924
Other senior executives                                                                                     30,364
__________________________________________________________________________________________________________________
                                                                                                            79,120
__________________________________________________________________________________________________________________


On 28 December 2006, the Company completed the placing of 29,838,848 new
ordinary shares. The Company received cash consideration of £49,234,100 for this
placing prior to expenses of £3,005,200.

During the prior year 416,249 ordinary shares with a nominal value of £4,162.49
were allotted on the exercise of share options. On 2 February 2006 Philip
Kenneth Wood exercised options over 78,125 shares at £1.28 per share and 150,000
ordinary shares at £1.60 per share. On 31 May 2006 he exercised options over a
further 70,000 ordinary shares at £1.60 per share.

On 13 April 2006 Mark Lockhart Muir exercised options over 39,062 ordinary
shares at £1.28.

26. Movements in equity


                                                                  Own      Profit     Currency     Share
                                    Share     Share   Merger   shares    and loss  translation    option
                                  capital   premium  reserve     held     reserve      reserve   reserve       Total
                                     £000      £000     £000     £000        £000         £000      £000        £000
____________________________________________________________________________________________________________________
Group
At 1 January 2006                   312.3  37,104.7    437.7  (484.0)  (10,679.4)            -         -    26,691.3
Total recognised income and             -         -        -        -  (12,627.6)      (591.6)         -  (13,219.2)
expense
Share issues net of expenses        302.5  46,727.5        -        -           -            -         -    47,030.0
Share-based payments                    -         -        -        -     1,135.0            -         -     1,135.0
____________________________________________________________________________________________________________________
At 31 December 2006                 614.8  83,832.2    437.7  (484.0)  (22,172.0)      (591.6)         -    61,637.1
Total recognised income and             -         -        -        -  (46,136.2)       (90.1)         -  (46,226.3)
expense
Issue of shares by the Company        7.6   1,137.1        -        -           -            -         -     1,144.7
Share-based payments                    -         -        -        -     1,857.0            -         -     1,857.0
Issue of equity instruments             -         -        -        -           -            -  12,787.0    12,787.0
Adjustment to 2006 share issue          -      82.1        -        -           -            -         -        82.1
costs
____________________________________________________________________________________________________________________
At 31 December 2007                 622.4  85,051.4    437.7  (484.0)  (66,451.2)      (681.7)  12,787.0    31,281.6
____________________________________________________________________________________________________________________

Company
At 1 January 2006                   312.3  37,104.7        -  (484.0)   (1,780.0)            -         -    35,153.0
Total recognised income and             -         -        -        -   (2,774.4)            -         -   (2,774.4)
expense
Share issues net of expenses        302.5  46,727.5        -        -           -            -         -    47,030.0
Share-based payments                    -         -        -        -     1,135.0            -         -     1,135.0
____________________________________________________________________________________________________________________
At 31 December 2006                 614.8  83,832.2        -  (484.0)   (3,419.4)            -         -    80,543.6
Retained loss for the period            -         -        -        -  (72,266.7)            -         -  (72,266.7)
Issue of shares by the Company        7.6   1,137.1        -        -           -            -         -     1,144.7
Share option charge                     -         -        -        -     1,857.0            -         -     1,857.0
Issue of equity instruments             -         -        -        -           -            -  12,787.0    12,787.0
Adjustment to 2006 share issue          -      82.1        -        -           -            -         -        82.1
costs
____________________________________________________________________________________________________________________
At 31 December 2007                 622.4  85,051.4        -  (484.0)  (73,829.1)            -  12,787.0    24,147.7
____________________________________________________________________________________________________________________

Share capital

Share capital represents the nominal value of shares issued by the Company.



Share premium

Share premium represents the premium over the nominal value raised on the issue
of shares by the Company.



Own shares held

D1 Oils Employee Benefit Trust holds 193,645 shares in D1 Oils plc which were
acquired at a total cost of £484,000. Shares held by the trust can be purchased
by employees exercising options under the Group's option scheme. At 31 December
2007, the shares had a market value of £261,420.



Merger reserve

The merger reserve arose when the Company acquired 100% of the issued share
capital of D1 Oils Trading Limited in consideration for ordinary shares in D1
Oils plc. The acquisition was accounted for under the rules of merger accounting
as a group reorganisation with the share premium being adjusted through the
merger reserve.



Share option reserve

The share option reserve arose on the granting of options to BP on the formation
of the D1-BP Fuelcrops Limited joint venture (see note 28).



Reconciliation of movement in equity shareholders' funds - Group
                                                                                              Year           Year
                                                                                             ended          ended
                                                                                       31 December    31 December
                                                                                              2007           2006
                                                                                              £000           £000
_________________________________________________________________________________________________________________
Loss for the financial period                                                           (46,136.2)     (12,627.6)
Issue of shares by the Company (net of expenses)                                           1,144.7       47,030.0
Share-based payments - employee share options                                              1,857.0        1,135.0
Issue of equity instruments  - options granted to BP                                      12,787.0              -
Currency translation difference                                                             (90.1)        (591.6)
Adjustment to 2006 share issue costs                                                          82.1              -
_________________________________________________________________________________________________________________
Net (decrease)/increase in equity shareholders' funds                                   (30,355.5)       34,945.8
Opening equity shareholders' funds                                                        61,637.1       26,691.3
_________________________________________________________________________________________________________________
Closing equity shareholders' funds                                                        31,281.6       61,637.1
_________________________________________________________________________________________________________________



Reconciliation of movement in equity shareholders funds - Company
                                                                                              Year           Year
                                                                                             Ended          Ended
                                                                                       31 December    31 December
                                                                                              2007           2006
                                                                                              £000           £000
_________________________________________________________________________________________________________________
Loss for the financial period                                                           (85,053.7)      (2,774.4)
Issue of shares by the Company (net of expenses)                                           1,144.7       47,030.0
Share-based payments - employee share options                                              1,857.0        1,135.0
Issue of equity instruments  - options granted to BP                                      12,787.0              -
Adjustment to 2006 share issue costs                                                          82.1              -
_________________________________________________________________________________________________________________
Net (decrease)/increase in equity shareholders' funds                                   (69,182.9)       45,390.6
Opening equity shareholders' funds                                                        80,543.6       35,153.0
_________________________________________________________________________________________________________________
Closing equity shareholders' funds                                                        11,360.7       80,543.6
_________________________________________________________________________________________________________________


27. Related party disclosures and principal subsidiary undertakings

The Group has a 50:50 joint venture agreement with a joint venture partner, BP
International Limited relating to D1-BP Fuel Crops Limited. Through this joint
venture vehicle, the parties will plant, cultivate and harvest Jatropha curcas,
and extract and trade jatropha oil. As part of the agreement, the Group provides
certain technical support and agronomy services to the joint venture. During the
year ended 31 December 2007, the Group supplied assets and services to the joint
venture totaling £2,119,000 and the amount due to the Group as at 31 December
2007 was £2,119,000.

The Group had a 50:50 joint venture agreement with a joint venture partner,
Mohan Breweries and Distilleries Limited, relating to D1 Oils Mohan Pty Limited.
The agreement required Mohan Breweries to lead on planting of jatropha and for
D1 Oils Trading Limited to lead on design and implementation of
transesterification technology. During the year ended 31 December 2007, D1 Oils
Trading Limited subscribed for new shares in D1 Oils Mohan Pty Limited for an
amount totaling £189,463. In entering into the joint venture arrangement with BP
International Limited (note 13), D1Oils Trading Limited transferred its interest
in D1 Oils Mohan Pty Limited to D1-BP Fuel Crops Limited on 1 October 2007.

The Group entered into a 50:50 joint venture agreement with a joint venture
partner, Williamson Magor & Co Limited relating to D1 Williamson Magor Bio Fuel
Limited. The joint venture was established to plant, cultivate and harvest
jatropha curcas and extract and trade jatropha oil. During the year ended 31
December 2007, D1 Oils Trading Limited subscribed for new shares in D1
Williamson Magor Bio Fuel Limited for amounts totaling £720,698. In entering
into the joint venture arrangement with BP International (note 13), D1 Oils
Trading Limited transferred its interest in D1 Williamson Magor Bio Fuel Limited
to D1-BP Fuel Crops Limited on 1 October 2007.



Any related party transactions involving Directors are shown in note 6.



During the year to 31 December 2007, the Company provided net funding to
subsidiary companies within the Group as follows:


                                                                                          2007               2006
                                                                                          £000               £000
_________________________________________________________________________________________________________________
D1 Oils Trading Limited                                                               22,372.5           15,253.2
D1 Oils Plant Science Limited                                                            431.6                  -
D1 (UK) Limited                                                                        7,322.4            5,828.0
D1 Oil Subsidiary Limited                                                              8,038.2              683.2
_________________________________________________________________________________________________________________
Total                                                                                 38,164.7           21,764.4
_________________________________________________________________________________________________________________


At 31 December 2007, net funding balances due to the Company from subsidiary
undertakings was as follows:


                                                                                         2007                2006
                                                                                         £000                £000
_________________________________________________________________________________________________________________
D1 Oils Trading Limited                                                              48,066.5            25,693.0
D1 Oils Plant Science Limited                                                           431.6                   -
D1 (UK) Limited                                                                      14,089.1             6,766.7
D1 Oil Subsidiary Limited                                                             8,735.5               697.3
Impairment                                                                         (70,891.1)                   -
_________________________________________________________________________________________________________________
Total                                                                                   431.6            33,157.0
_________________________________________________________________________________________________________________


The funding is repayable upon demand. With the exception of D1 Oils Plant
Science Limited, the Company does not anticipate any repayments being made
within one year and those balances have been fully impaired. The funding is not
subject to any interest charge.



28. Share-based payments - Group and Company

All employees share option plan

Awards are made to staff at the discretion of the Board of Directors either on
appointment, at salary review time, or any other time that the Directors deem
appropriate. There are no specific performance criteria attached to the options.



Options granted vest 1/3 after 12 months with the remaining 2/3 vesting in equal
monthly instalments over the next 24 months. Equity settlement is applied to all
options, there is no cash alternative.



The expected life of the options has been assessed at 2.5 years for options
which vest 1 year from grant and 4 years for options which vest after 1 year.
The contractual life of the options is 10 years.



The fair value of the awards are calculated using the Black-Scholes model and
subsequently adjusted for gain dependency, assessed at 15%, and forfeitures,
assessed at 10% over the life of the award. A volatility adjustment considered
appropriate for the sector and the age of the Group is included in the
calculation.  In forming the volatility assumption, the Directors have
considered the volatility of the share price since the date of listing. The
volatility of companies operating in the same sector has also been reviewed.
Based on these factors, volatility has been assessed at 65% for awards granted
before 1 March 2007 and 60% for awards granted thereafter. Appropriate risk free
rates (as defined by the Bank of England) between 4.4% and 5.6% have been
applied to individual awards and a zero dividend yield are applied to the
calculation.



The expenditure recognised in the income statement of the Group and the Company
for share-based payments in respect of employee services received during the
year to 31 December 2007 is £1,857,000 (2006: £1,135,000). This expense all
relates to equity-settled, share-based payment transactions.



The following table illustrates the number and weighted average exercise price
(WAEP) of, and movements in, share options during the year.


                                                                 2007         2007         2006            2006
                                                               Number         WAEP       Number            WAEP
_________________________________________________________________________________________________________________
Outstanding at 1 January                                    3,452,517         2.12    3,452,517            2.12
Granted during the year                                     3,177,367         1.85    1,514,799            2.47
Forfeited during the year                                   (562,290)         2.66      224,187            1.45
Exercised                                                   (681,521)         1.48      415,311            1.60
Outstanding at 31 December                                  5,386,073         1.99    3,452,517            2.12
_________________________________________________________________________________________________________________
Exercisable at 31 December                                  2,106,860         2.09    1,615,180            1.75
_________________________________________________________________________________________________________________


The range of exercise prices for options outstanding at the end of the year was
128p - 290p. The weighted average remaining contractual life of the options in
issue at 31 December 2007 is 8.6 years.




Option agreement with BP International Limited

During the year a joint venture was established with BP International Limited.
As part of this agreement, options were granted to BP International Limited
representing 16% of the issued share capital of the Company after exercise of
the options. The options are exercisable at the following prices:


Options                                     Exercise price
__________________________________________________________
2,931,367 ordinary shares                   210p per share
2,931,367 ordinary shares                   230p per share
2,931,367 ordinary shares                   265p per share
2,931,366 ordinary shares                   300p per share


These options may be exercised at any time between 1 October 2007 and 1 October
2010.

The fair value of the awards is calculated using the Binomial model. A
volatility assumption of 60% is included in the calculation and considered
appropriate for the sector and age of the Group. In forming the volatility
assumption the Directors have considered the volatility of the share price over
the two years to the date of grant. An appropriate risk free rate as defined by
the Bank of England of 5.7% and a zero dividend yield are applied to the
calculation.

The total fair value of these options for the Group and the Company is
£12,787,000 and this is all recognised in equity in the year to 31 December
2007.


The following table illustrates the number and weighted average exercise prices
(WAEP) of, and movements in, these options during the year.

                                                                                                2007         2007
                                                                                              Number         WAEP
_________________________________________________________________________________________________________________
Outstanding at 1 January                                                                           -            -
Granted during the year                                                                   11,725,467         2.51
Exercised                                                                                          -            -
Outstanding at 31 December                                                                11,725,467         2.51
_________________________________________________________________________________________________________________
Exercisable at 31 December                                                                11,725,467         2.51
_________________________________________________________________________________________________________________

The weighted average fair value per option of options granted to BP
International Limited during the year was 251.3p. The range of exercise prices
for options outstanding at the end of the year was 210p - 300p. The weighted
average remaining contractual life of the options in issue at 31 December 2007
is 2.8 years.



29. Financial risk management objectives and policies

The main risks arising from the Group's operations are interest rate risk,
liquidity risk, foreign currency translation risk and certain commodity price
risks.

Commodity risk

During the year, the Group hedged its exposure to fluctuating Ultra Low Sulphur
Diesel (ULSD) prices by entering into a swap transaction. Up until 30 September
2007, the Directors considered this to be an effective cash flow hedge and a
fair value adjustment of £1,100,600 has been recognised directly in equity and
is shown in the statement of recognised income and expense. From 1 October, when
the hedge was no longer considered effective, the fair value adjustment of
£1,100,600 has been reversed out of equity and is shown as a transfer to the
income statement in the statement of recognised income and expense. At 31
December 2007 the fair value of the swap was £1,101,700 (2006: £nil) which is
disclosed under other financial liabilities (note 22).


The following table demonstrates the sensitivity of the Group's profit before
tax and equity to a reasonably possible change in the price of ULSD with all
other variables held constant, through the impact of variable ULSD prices.


                                                                 Increase/    Effect on profit         Effect on
                                                                  decrease          before tax            equity
                                                              in ULSD rate                £000              £000
_________________________________________________________________________________________________________________
2007                                                                  +10%             (289.5)           (289.5)
                                                                      -10%               289.5             289.5

2006                                                                  +10%                96.5              96.5
                                                                      -10%              (96.5)            (96.5)



Liquidity risk

The Group seeks to manage financial risk to ensure sufficient liquid funds are
available to meet foreseeable needs while investing cash assets safely and
profitably.

The table below summarises the maturity profile of the Group's financial
liabilities at 31 December 2007 and 2006 based on contractual undiscounted
payments. Interest rates on variable rate loans are based on the rate prevailing
at the balance sheet date.



Year ended 31 December 2007
                                                     Less than     3 to 12      1 to 5
                                         On demand    3 months      months       years   > 5 years       Total
                                              £000        £000        £000        £000        £000        £000
______________________________________________________________________________________________________________
Interest bearing loans and borrowings            -       181.7       544.1     3,330.5       543.5     4,599.8
Trade and other payables                         -     7,046.3           -           -           -     7,046.3
ULSD swaps                                       -       742.9       358.8           -           -     1,101.7
Foreign currency contracts                       -        33.6           -           -           -        33.6
______________________________________________________________________________________________________________
                                                 -     8,004.5       902.9     3,330.5       543.5    12,781.4
______________________________________________________________________________________________________________


Year ended 31 December 2006
                                                     Less than     3 to 12      1 to 5
                                         On demand    3 months      months       years   > 5 years       Total
                                              £000        £000        £000        £000        £000        £000
______________________________________________________________________________________________________________
Interest bearing loans and borrowings            -       180.8       541.7     3,927.6       621.0     5,721.1
Trade and other payables                         -     5,020.8           -           -           -     5,020.8
______________________________________________________________________________________________________________
                                                 -     5,201.6       541.7     3,927.6       621.0    10,741.9
______________________________________________________________________________________________________________


Interest rate risk

The Group has one mortgage obligation, the terms of which include a floating
interest rate of 1.75% above LIBOR. The capital outstanding at 31 December 2007
was £780,000 (2006: £840,000 at 1.75% above LIBOR).

The following table demonstrates the sensitivity of the Group's profit before
tax and equity to a reasonably possible change in LIBOR rates, with all other
variables held constant, through the impact of floating rate borrowings.


                                                                 Increase/    Effect on profit         Effect on
                                                                  decrease          before tax            equity
                                                             in LIBOR rate                £000              £000
________________________________________________________________________________________________________________
2007                                                                 +0.5%               (4.1)             (4.1)
                                                                     -0.5%                 4.1               4.1

2006                                                                 +0.5%               (4.2)             (4.2)
                                                                     -0.5%                 4.2               4.2



Foreign currency risk

An explanation of the Group's financial instrument risk is included in the
Directors' report in the principal risks and uncertainties section.

A significant amount of the Group's raw material and other input costs is
denominated in US Dollars and it has entered into a number of forward exchange
contracts to buy dollars at a fixed price to mitigate the effect of fluctuating
exchange rates. In assessing the fair value of forward exchange contracts at the
year end, the Group and the Company have recognised financial assets of £56,300
(2006: £nil) (note 17) and financial liabilities of £33,600 (2006: £nil) (note
22).



The following table demonstrates the sensitivity of the Group's profit before
tax and equity to a reasonably possible change in the US Dollar exchange rate,
with all other variables held constant, through the impact of floating rate
borrowings.


                                                               Increase/   Effect on profit           Effect on
                                                                decrease         before tax              equity
                                                             in USD rate               £000                £000
________________________________________________________________________________________________________________
2007                                                                 +5%             (84.0)              (84.0)
                                                                     -5%               92.8                92.8

2006                                                                 +5%               89.6                89.6
                                                                     -5%             (99.0)              (99.0)



Managing capital

The Group aims to optimise its capital structure by holding an appropriate level
of debt relative to equity in order to maximise shareholder value.  The
appropriate level of debt is set with reference to a number of factors and
financial ratios including expected operating and capital expenditure cash
flows, contingent liabilities and the level of restricted cash as well as the
general economic environment. The Group aims to control its capital structure by
issuing new shares and raising debt finance to the extent that it is possible on
commercially acceptable terms. The economic conditions currently prevailing
within the biofuels industry have restricted the Group's ability to raise debt
finance and exert any significant degree of control over its gearing ratio. As a
consequence, the Group is currently financed primarily from equity. The Group
monitors capital using a gearing ratio, being long-term liabilities divided by
equity shareholder funds plus long-term liabilities.


                                                                                              Year           Year
                                                                                             Ended          Ended
                                                                                       31 December    31 December
                                                                                              2007           2006
_________________________________________________________________________________________________________________
                                                                                              £000           £000
Long-term liabilities
Non-current obligations under finance leases                                               2,587.2        2,983.6
Non-current instalments due on mortgage                                                      720.0          780.0
_________________________________________________________________________________________________________________
Total long-term liabilities                                                                3,307.2        3,763.6
Equity                                                                                    27,685.0       12,570.8
_________________________________________________________________________________________________________________
Total equity and long-term liabilities                                                    30,992.2       16,334.4
_________________________________________________________________________________________________________________
Gearing ratio                                                                                10.7%          23.0%
_________________________________________________________________________________________________________________


Fair values of financial assets and financial liabilities

Set out below is a comparison by category of carrying amounts and fair values of
all of the Group's financial instruments that are carried in the financial
statements.


                                                                     Book value Fair value Book value Fair value
                                                                           2007       2007       2006       2006
                                                                                         £
                                                                           £000       £000       £000       £000
_________________________________________________________________________________________________________________
Financial assets
Cash and short-term deposits                                            3,596.6    3,596.6   49,066.3   49,066.3
Long-term deposits and cash collateral                                 10,679.7   10,679.7    2,317.3    2,317.3
Forward currency contracts                                                 56.3       56.3          -          -
Financial liabilities
Interest bearing loans and borrowings                                     760.0      760.0      852.8      852.8
Finance lease and hire purchase agreements                              3,020.1    3,292.0    3,345.0    3,697.4
Derivative financial instruments                                        1,101.7    1,101.7          -          -
Forward currency contracts                                                 33.6       33.6          -          -



30. Reconciliation of net assets, profit and cash flow under UK GAAP to IFRS

The group has applied IFRS 1, 'First Time Adoption of International financial
Reporting Standards', to provide a starting point for reporting under IFRS. The
Group's date of transition to IFRS is 1 January 2006 and all comparative
information in the financial statements is restated to reflect the Group's
adoption of IFRS, except where otherwise required or permitted under IFRS1.



The following is a summary of the key reconciling items:

IFRS3 - Business combinations

The Group has taken the option under the transitional arrangements not to apply
IFRS3 'Business Combinations' retrospectively to acquisitions that occurred
prior 31 December 2005.

IFRS3 does not permit the annual amortisation of goodwill, but does require an
annual impairment review of carrying values. Under UK GAAP goodwill was
amortised over the anticipated useful economic life of the business acquired.
Goodwill amortisation of £3,500 has been reversed in the year to 31 December
2006.

IFRS5 - Assets held for disposal

IFRS5 requires that any assets held for sale should be separately classified on
the balance sheet and any non-current assets classified as being held for sale
should not be depreciated from the date they meet the criteria to be recognised
as held for sale. As at 31 December 2006 £100,000 of assets have been disclosed
as held for resale relating to some assets held in Ghana. There was no impact on
reported profits.

IAS38 - Intangible Assets

Under IAS16 some items of software which do not meet the criteria of fixed
assets have been reclassified as intangible assets. The adjustment was £55,000
at 31 December 2006.

IAS1 - Presentation of financial statements

IAS 1 requires the split between current and non-current assets and liabilities
on the face of the balance sheet.

First time adoption (IFRS1)

In accordance with the requirements of IFRS 1 'First-time Adoption of
International Financial Reporting Standards', the Group is subject to a number
of voluntary and mandatory exemptions from full restatement to the requirements
of IFRS, which have been applied as follows:

•   IAS 32 'Financial Instruments: Disclosure and Presentation', and
    IAS 39 'Financial Instruments: Recognition and Measurement' was adopted with
    effect from 1 January 2006,

•   The Group has not applied IFRS 3 'Business Combinations'
    retrospectively to business combinations that occurred before 1 January 
    2006, and

•   IFRS 2 'Share-based Payments' has been applied to all grants of
    equity instruments after 7 November 2002 that had not vested at 1 January 
    2007.

IAS7 - Cash flow statements

IAS7 'Cash flow statements' defines cash as money an entity holds and money
deposited with financial institutions that can be withdrawn without notice. Cash
equivalents are defined as short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.  The 'short-term' characteristic of a
cash equivalent is generally taken as a maturity of three months from the date
of acquisition. The balance sheet has been adjusted to reclassify amounts held
on deposit with maturity periods greater than three months and restricted cash
of £2,317,000 at 31 December 2006 as other financial assets.

IAS 19 - Employee benefits

IAS 19 'Employee Benefits' requires that holiday accrued by employees, but not
taken at the balance sheet date must be provided for. There is no impact at 31
December, as the Group's holiday year is coterminous with its financial year.

IAS 16 Property, plant and equipment

IAS 16 requires maintenance spares, previously recorded as stock, to be
recognised as non-current assets where the entity expects to use these spares in
more than one period or if the spare parts can be used only in connection with
an item of property, plant or equipment.  The balance sheet has been adjusted to
reflect this reclassification with £41,900 reclassified from inventories to
fixed assets as at 31 December 2006 together with £2,400 of depreciation in the
year to 31 December 2006.

IAS 41 Biological assets

IAS 41 'Biological Assets' requires certain assets previously recognised as
property, plant and equipment to be reclassified as biological assets. The
balance sheet as at 31 December 2006 has been adjusted to reflect a
reclassification of £74,500.



Reconciliation of Group net assets
                                                                                        31 December    1 January
                                                                                               2006         2006
                                                                                               £000         £000
________________________________________________________________________________________________________________
Total net assets as reported under UK GAAP                                                 61,636.0     26,691.3
Depreciation of capital spares                                                                (2.4)            -
Reverse amortisation of goodwill                                                                3.5            -
________________________________________________________________________________________________________________
Total net assets as restated under IFRS                                                    61,637.1     26,691.3
________________________________________________________________________________________________________________


Reconciliation of Group reported profit
                                                                                                             2006
                                                                                                             £000
_________________________________________________________________________________________________________________
Profit after tax as reported under UK GAAP                                                             (12,628.7)
Depreciation of capital spares                                                                              (2.4)
Reverse amortisation of goodwill                                                                              3.5
_________________________________________________________________________________________________________________
Profit after tax as restated under IFRS                                                                (12,627.6)
_________________________________________________________________________________________________________________


There were no material differences to the net assets or the reported profit of
the Company.



Restatement of cash flow statement from UK GAAP to IFRS

The transition from UK GAAP to IFRS has no effect upon the reported cash flows
generated by the Group. The IFRS cash flow statement is presented in a different
format from that required under UK GAAP with cash flows split into three
categories of activities - operating activities, investing activities and
financing activities. The reconciling items between the UK GAAP presentation and
the

IFRS presentation have no net impact on the cash flows generated. In preparing
the cash flow statement under IFRS, cash and cash equivalents include cash at
bank and in hand, highly liquid interest bearing securities with original
maturities of three months or less, and bank overdrafts. Under UK GAAP highly
liquid interest bearing securities were not classified as cash equivalents.




31. Contingent assets

During the course of construction of the D1-20 transesterification units, one of
the Group's subsidiary companies was supplied with components which subsequently
proved to be out of specification. This resulted in commissioning delays and in
the company incurring rework costs. Discussions with the supplier are ongoing
but the Directors have a reasonable expectation that compensation terms will be
agreed within the next 12 months although the amount is still uncertain. The
income will be recognised when negotiations have been concluded.



32. Contingent liabilities

(a) Nandan Biomatrix Limited

Between 10 August 2004 and 26 November 2004, D1 entered into a number of
agreements in India with Nandan Biomatrix Limited ('Nandan') for the supply and
development of jatropha seeds. On 17 June 2005, Nandan submitted a claim to D1
for Rs. 80,796,029, (approximately £1.0m) alleging that D1 was in breach of
these agreements and that a termination agreement (extinguishing Nandan's
claims) is a forgery. D1 considers these claims groundless and accordingly has
not made any provision in respect of them. On 25 March 2008, Nandan obtained a 
'freezing' injunction in the Indian courts against 'D1 Oils Limited'. Having
taken Indian legal advice, D1 does not consider the injunction to be of any
effect, although steps are being taken to dissolve it on substantive grounds.



(b) D1-BP Fuel Crops Limited

D1 has entered into discussions with D1-BP Fuel Crops and BP as to whether or
not there was a planting shortfall as at 31 July 2007 for the purposes of the
relevant provisions of the joint venture agreement. A provision has been made in
relation to this matter and the Directors' current assessment is that there will
be no further financial obligation arising in this regard and they expect to
reach a satisfactory agreement with their joint venture partner.



33. Capital commitments

At the end of the year capital commitments were:


                                                                                           2007              2006
                                                                                           £000              £000
_________________________________________________________________________________________________________________
Contracted but not provided for in the accounts                                         1,967.7           2,700.0
_________________________________________________________________________________________________________________


34. Post balance sheet events

(a) Cessation of refining and trading activities at Middlesbrough and
Bromborough

D1 announced on 7 March 2008 that a consultation process had commenced with
employees at both the Middlesbrough and Bromborough sites. It is the intention
of the Group to cease its refining and trading operations and consultations as
to the future of the sites will include their potential closure and sale. As a
result, certain contractual commitments which have become onerous are to be
renegotiated or terminated and certain restructuring costs will be incurred.


(b) Placing of ordinary shares

Subject to shareholder approval, the Company has announced a proposed placing of
64,384,000 ordinary shares at 25p per share to raise additional capital of
£14.9m net of expenses of £1.2m.





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