Cambium Annual Report 2008

Cambium Global Timberland Limited Annual report and financial statements
for the period ended 30 April 2008
about us
Cambium Global Timberland Limited has been established to invest in a global portfolio of forestrybased products. Cambium seeks to invest primarily in forestry assets which are or can be managed on an environmentally and socially sustainable basis. Cambium raised 104,350,000 in a placing by Landsbanki Securities (UK) Limited and joined AIM and the Channel Islands Stock Exchange on 6 March 2007.
Pahala, Hawaii, US
about us highlights chairmans statement investment managers report board of directors directors report independent auditors report to the members 11 consolidated income statement 12 consolidated balance sheet 13 consolidated statement of changes in equity 14 consolidated cash flow statement 15 company income statement 16 company balance sheet 17 company statement of changes in equity 18 company cash flow statement 19 otes to the financial statements n 38 notice of annual general meeting IBC key parties
IFC 1 2 4 5 6 10
Corrigan, Texas, US
Tarrangower, AUS
highlights
+ Current investments in North America, Asia/Pacific and Australia/New Zealand regions + 12% gain in appraised plantation value since acquisition + Investments performing according to plan + We continue to find investment opportunities consistent with the model portfolio + Portfolio adding diversity across geography, age class and species
Cambium Global Timberland Limited Annual report and financial statements 2008
chairmans statement
The fundamental drivers of investment returns biological growth, product prices and land values continue to offer investors an opportunity to realise attractive risk-adjusted returns.
Dear Shareholders,
Introduction
I am pleased to present our first full-year results since the Company was admitted to the Alternative Investment Market (AIM) in March 2007. During what has been a particularly difficult time in the financial markets, Cambium Global Timberland Limited continues to find attractive timber investment opportunities. Credit market turmoil, rising unemployment and persistently high commodity prices have combined to lower economic growth. Housing remains a major drag on the United States economy and has impacted sawtimber prices in many markets globally. Additionally, increased shipping costs have impacted many timber investments in predominantly export markets, such as New Zealand. Conversely, high energy prices have produced opportunities with interest in timber as a fuel stock for energy production increasing. Timberland remains a unique asset class, an appreciating renewable resource with performance that is largely un-correlated to financial market volatility. Moreover, the fundamental drivers of investment returns biological growth, product prices and land values continue to offer investors an opportunity to realise attractive risk-adjusted returns. A number of investment opportunities which meet the original guidelines have been identified and closed. As the remaining capital is deployed, both originally identified strategies and opportunities enhanced by the changes in the market conditions will be utilised to fill out an attractive global portfolio of timber assets with a superior risk-adjusted return.
highlights
+ 51% of capital committed to existing projects + Strong pipeline of new investment opportunities + 3 pence per share proposed dividend
Current Status
Our strong financial position and thorough due diligence carried out by our Investment Managers has afforded us the opportunity to purchase three attractive investments as of the fiscal year end accounting for 24 per cent of the assets. Since the end of the fiscal year, we have purchased two additional timber properties representing 25 per cent of assets in the Company. With allowances for working capital reserves and planting costs, we have committed a total of 51 per cent of the capital to these existing projects.
Since the fiscal year end, Cambium has also entered into contracts on properties in New Zealand and Brazil. These properties represent an additional 9 per cent of the Net Asset Value (NAV) of the Company, bringing Cambium to an anticipated 60 per cent invested capital upon closing of these investments. The Investment Manager, CP Cogent Asset Management LP, continues to work diligently to find attractive assets for the remaining 40 per cent of the portfolio. Cambiums current properties by value are 38 per cent in North America, 4 per cent in Australia/New Zealand and 7 per cent in Asia/Pacific. After closing the properties under contract Cambium will increase its Australia/New Zealand allocation to 10 per cent and will have 4 per cent invested in South America. The Company currently has a higher exposure to North America than originally anticipated (but still within the terms of our prospectus). While pricing for timberland assets has been very competitive in the United States we have been able to find two opportunistic transactions that are within our targeted returns and we believe we have been able to acquire them at a discount to where United States properties have been transacting. We anticipate a rebalance of North American exposure as uninvested capital is committed.
we feel the United States exposure provides an adequate substitute at more attractive discount rates. We continue to monitor the situation in Australia closely and if we see a correction in the marketplace our strategy may change.
Financial Results
The Company had earnings this period of 1.22 pence per share. We had significant cash balances during the period and generated approximately 5.7 million in earnings from interest on our cash balances. Additionally we generated 2.8 million from increases in the revaluations of our forestry investments. Significant expenses for the period include 3.4 million in establishment expenses and 2.7 million in administrative expenses. We expect our administrative expense ratio to fall as the portfolio matures.
Dividend
The Board is proposing an annual dividend of 3 pence per share. The target quarterly dividend, after the Company is fully invested, will be at the annual rate of 5 pence per ordinary share and is expected to grow in due course as the portfolio matures.
Articles of Association
Strategy and Implementation
As described in the accompanying Investment Managers report, the properties we have acquired continue to progress satisfactorily. We have a solid pipeline of opportunities that are consistent with our original thesis in each of our targeted geographies. The primary challenge we have faced has been locating and securing these transactions in the original timeframe we had proposed given the increased competition in the timber marketplace. However, the Board continues to believe that the capital raised will be committed within our original investment period. Our primary focus at this time is on the non-North American marketplace. Our pipeline is particularly strong in Latin and South America and New Zealand. Given difficult market conditions, we have reduced our focus on Australia at this point and will likely substitute a portion of our North American exposure for some of the Australian exposure in our original investment model. Non-timber competition within Australia has driven land prices to such a point that compelling timber returns are difficult to find. Given the mature nature of the marketplace, and well established political and economic environment,
The Chairman noted that at the Annual General Meeting it was proposed that the Articles of Association of the Company were to be substituted for and to the exclusion of the existing Articles of Association.
Outlook
We are looking forward to the upcoming year and the further development of the portfolio. Our investment pipeline is healthy and our existing investments continue to generate value. When our existing funds are fully invested we will consider the case for raising additional capital to secure operating economies of scale and the benefits of further diversification for our shareholders. Our next scheduled update will come when the interim financials for the period ending 31 October 2008 are available. Current information about the Company is always available on our website: www.cambiumfunds.com.
Donald Adamson
Chairman 11 July 2008
investment managers report

CP Cogent Asset Management LP is pleased with the performance of the current investments and with the full pipeline of opportunities. We continue to see opportunities consistent with the original investment thesis and anticipate having the capital of the Company substantially committed over the next several months. The current properties held for investment are summarised as follows: Corrigan is a 22,000 acre property consisting of intensively managed pine plantations located in eastern Texas purchased in June 2007. A balanced age distribution characterises the timber on this property, which upon harvest can be sold into an established end use market for timber products. To date this property has performed up to expectations and has produced income from timber harvests, recreational leases and a right of way easement. Currently United States sawtimber prices are at cyclical lows though asset values have been increasing as recent transactions have been made at high price levels. Tarrangower is a 21,000 acre greenfield opportunity in northern New South Wales, Australia purchased in July 2007. This project generates returns from a mix of long-rotation timber crops, carbon credits, water rights and biodiversity conservation grants. The planting of Eucalyptus seedlings, which commenced in October 2007, is slightly behind schedule due to out of the ordinary drought conditions in the area. Reforestation efforts will be accelerated when an improvement in available soil moisture is present on the site. Also, Cambium has received grant income for conservation management practices on this property. A contract has been signed with a third party that defines a forward delivery carbon credit-based transaction per the Green House Friendly Program, with the first payment scheduled for 2009. In Australia log exports have increased year over year but earnings have been down due to increased shipping rates. Lumber production has been down across the country, primarily driven by the United States and domestic housing slump. Pahala is a 3,700 acre leasehold interest located on the south East Coast of the Big Island of Hawaii. This asset was acquired in July 2007. The project consists of well stocked Eucalyptus Grandis plantations aged between 6 and 10 years. A wood supply agreement for the timber has been negotiated with a developer of a sliced veneer mill. Pinnacle is a 4,446 acre leasehold interest located on the north Eastern side of the Big Island of Hawaii. This asset was acquired in May 2008.The growing stock consists of Eucalyptus Grandis planted in stands ranging from 2 to 7 years of age. Harvesting is anticipated to begin in 2014. In June 2008 Cambium acquired 29,900 acres of timberland located in Florida and Georgia. The plantations on this property consist primarily of intensively managed southern pine including improved trees, intensive thinning regimes and fertilisation. The investment strategy includes even age management of high quality plantations utilising intensive forest management practices, short rotations of 25 to 27 years to provide cash flow, final harvest of older and slower growing natural, upland pine timber and marketing the least productive tracts and HBU tracts for sale. Numerous area timber mills will serve as delivery points for the wood products harvested from this asset, providing a very competitive marketplace. In addition we have properties under contract in Brazil and New Zealand that, when added to the current ownership, will result in the commitment of approximately 60 per cent of the capital of the Company. The current pipeline includes properties in each of the targeted geographies and should provide the path to full investment. The investments to date continue to perform in line with expectations and represent a portfolio diversified across species, geography and age class. We will seek to add further diversification with the projects identified to fill out the balance of the Cambium portfolio. We look forward to updating you on the development of the portfolio with the release of the interim financials for the period ending 31 October 2008.
CP Cogent Asset Management LP
board of directors
Donald Lindsay Adamson (aged 49), Robert James Rickman (aged 50),
Independent Non-Executive Chairman Donald Adamson has 27 years experience in fund management, corporate finance and private equity. He acts as Director or Chairman of a number of listed and privately held investment companies including The Lindsell Train Investment Trust Plc, Invesco Leveraged High Yield Fund Limited, F&C Commercial Property Trust Limited, JP Morgan Progressive Multi-Strategy Fund Limited, and other companies. He holds an MA (Hons) from University College, Oxford in History and Economics and carried out postgraduate research at Nuffield College, Oxford in private equity investment. He is a member of the Securities & Investment Institute and Chairman of the Offshore Committee of the Association of Investment Companies. Independent Non-Executive Director Martin Richardson has been a partner of the Jersey practice of Rawlinson & Hunter, a firm of chartered accountants, since 1987, specialising in trust and mutual fund administration services to the financial services sector. He is a Director of Diversified Portfolios Fund Limited, The Equity Partnership Investment Company Plc, Real Estate Opportunities Limited and a number of other companies. He has a BA in Science Engineering from the Royal Military College of Science, Shrivenham and served in the Royal Engineers between 1968 and 1977. On leaving the army, he qualified as a chartered accountant with Coopers & Lybrand, Jersey for whom he worked from 1977 to 1981.
Martin Willaume Richardson (aged 59),
Independent Non-Executive Director Robert Rickman is a Director of and adviser to a number of forestry, forest industry and technology companies in the UK and internationally. From 2001 until 2007 he was a Director and latterly Chairman of the AIM quoted Highland Timber Plc, with forestry operations in the UK and New Zealand. Robert was a Non-Executive Director of Bookham Technology Plc from 1994 to 2004 during which time the Company was listed on the LSE and NASDAQ. He has held various Non-Executive and Executive positions with a number of forestry companies (including until 1999, FIM Services Limited) and was an economist for the Government of St. Lucia. He is a current member of the UK Institute of Chartered Foresters. Robert has a MA in Agriculture and Forest Science and a MSc in Forestry and its relation to Land Management from the University of Oxford.
William Taylor Spitz (aged 57),
Colin Sean McGrady (aged 37),
Non-Executive Director Colin McGrady is a founding partner of Cogent and is head of its asset management business. Colin is a Director of Cogent GP, LLC and Cogent Partners Investment, LLC. Prior to co-founding Cogent, Colin was a member of the eight person investment team at The Crossroads Group, a US$2 billion private equity fund of funds in Dallas, Texas. Prior to Crossroads, Colin spent three years at Bain & Company in the United States and Japan. Colin earned an MBA from the Harvard Business School, received a BA in Economics from Brigham Young University, and is a Chartered Financial Analyst.
Independent Non-Executive Director William Spitz is Vice-Chancellor for Investments Emeritus for Vanderbilt University. Prior to his retirement after 22 years of service, he was responsible for the management of the universitys US$3.5 billion endowment as well as its treasury and technology transfer operations. During that period, he served on a number of advisory committees for timber, private equity and real estate funds and was the recipient of several significant awards given to prominent members of the endowment community. In addition to Cambium Global Timberland Limited, William serves as a Director of Diversified Trust Company, MassMutual Financial Group, and Acadia Realty. Previously, he served as a Director of the Bradford Fund and was Chair of the Board of The Common Fund. Prior to joining Vanderbilt University in 1985, he was an officer of several investment management firms in New York. William is a Chartered Financial Analyst and holds an MBA from the University of Chicago.
directors report
The Directors present their annual report and the audited financial statements of Cambium Global Timberland Limited (the Company) and entities under its control (the Group) for the period from 19 January 2007 to 30 April 2008.
Business of the company
The Company was incorporated as a closed-ended Jersey registered investment company with limited liability on 19 January 2007. The ordinary shares were successfully admitted to the Alternative Investment Market (AIM), a market of the London Stock Exchange, with a dual listing on the Channel Islands Stock Exchange (CISX). The Company aims to establish a portfolio comprising geographically diverse assets located both in mature markets and in developing markets where potentially higher returns may be generated but with commensurately higher risks. The Company will initially target investments in North and South America and the Asia-Pacific region (including Australia and New Zealand), but may invest in other regions on an opportunistic basis, as determined by the Investment Manager with the approval of the Board. The Companys strategy is to generate superior total returns to investors by establishing an optimised portfolio of timberland properties and timberland-related investments diversified by location, age class and species. The Company will invest in a global portfolio of forestry-based properties which can be managed on an environmentally and socially sustainable basis. Assets will be managed for timber production, environmental credit production or both. A review of business during the period and future developments is contained in the Chairmans Statement and Investment Managers Report.
Results and dividends Directors
The results of the Group are stated on page 11. The Directors proposed a dividend of 3,130,500. The Directors of the Company are detailed below:
Appointed
Colin McGrady Donald Adamson Martin Richardson Robert Rickman William Spitz No Directors resigned during the period.
13 February 2007 19 January 2007 19 January 2007 13 February 2007 13 February 2007
Directors interests
The following Directors had interests in the shares of the Company at 30 April 2008:
Number of ordinary shares % held
Colin McGrady Donald Adamson Martin Richardson William Spitz
50,000 50,000 50,000 50,000
0.02 0.02 0.02 0.02
Colin McGrady is a founding partner of CP Cogent Asset Management LP, who acts as Investment Manager.
Directors remuneration
During the period the Directors received the following remuneration in the form of fees from the Company:
2008
Donald Adamson Martin Richardson Robert Rickman William Spitz
49,753 31,096 31,096 31,096 143,041
Colin McGrady waived his Directors fees for the period.
Substantial shareholdings
Name of investors
Shareholders with holdings of more than 3 per cent of the issued shares of the Company as at 30 June 2008 were as follows:
Number of ordinary shares % held
Baillie Gifford Rensburg Sheppards Investment Management British Steel Pensions AXA Framlington Investment Managers SVM Asset Management Tilney Private Wealth Management Artemis Investment Management Ashcourt Asset Management Speirs & Jeffrey, stockbrokers Rathbones Midas Capital JP Morgan Asset Management West Yorkshire PF
16,450,000 10,712,049 10,000,000 7,085,000 6,050,000 6,002,106 5,000,000 4,746,807 4,632,900 4,403,200 3,800,000 3,626,077 3,150,000 85,658,139
15.76 10.27 9.58 6.79 5.80 5.75 4.79 4.55 4.44 4.22 3.64 3.47 3.02 82.08
Corporate governance
The Company is a closed-ended investment company incorporated in Jersey, listed on AIM and CISX and is not required to comply with the requirements of the Combined Code issued by the UKs Financial Reporting Council (the Combined Code). The Company has however become a member of the Association of Investment Companies and will endeavour where practical to comply with the principles and best practice of the AIC Code of Corporate Governance (the Model Code). The Chairman is Donald Adamson. The Directors consider that the Chairman is independent for the purposes of the Model Code. The Board considers that, with the exception of Colin McGrady, the Directors are independent of the Investment Manager and the Investment Adviser. The Board have also put in place a framework for corporate governance which takes in to account the best practice and rules of both AIM and CISX. The Board has considered the principles and recommendations of the Model Code by reference to the AIC Corporate Governance Guide for Investment Companies (AIC Guide). The Model Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. The Board considers that by reporting against the principles and recommendations of the Model Code and referring to the AIC Guide (which incorporates the Combined Code), they will provide better information to shareholders.
directors report continued

Corporate governance continued
+ the role of the Chief Executive; + Executive Directors remuneration; and + the need for an internal audit function. The Company has complied with the recommendations of the Model Code and the relevant provisions of Section 1 of the Combined Code, except as set out below. For the reasons set out in the AIC Guide and in the preamble to the Combined Code, the Board considers these provisions are not relevant to the position of the Company, being an externally managed investment company. The Company has therefore not reported further in respect of these provisions. The Board meets quarterly and as appropriate considers the following issues: + the overall objectives for the Company; + the appropriate risk framework; + any shifts in strategy that may be appropriate in light of changes in market conditions; + the appointment and ongoing monitoring, through regular reports and meetings, of the Investment Manager, administrator and other service providers; + review of the Companys performance including Net Asset Value and payment of dividends; and + the shareholder profile of the Company. Additional ad-hoc meetings of the Board are convened as and when necessary.
Board meetings Held Attended Audit committee meetings Held Attended Other meetings Held Attended
The Combined Code includes provisions relating to:
Colin McGrady Donald Adamson Martin Richardson Robert Rickman William Spitz
8 8 8 8 8
6 7 8 6 6
N/A 1 1 1 1
N/A 1 1 1 1
5 5 5 5 5
5 4 5 2 5
The Board receive compliance reports and reporting from third party service providers enabling the assessment of the effectiveness of the service providers, their internal controls and to consider any relevant risks and how these can be effectively managed. These compliance reports are provided by the administrator. The Investment Manager maintains direct contact with the shareholders of the Company through regular investor meetings and keeps the Board appraised at the scheduled quarterly meetings. The Chairman also maintains direct communication with the Nominated Advisor of the Company to ensure that any investor relations issues brought to the attention of the Nominated Advisor are communicated to the Board. The Board has the relevant experience required to manage the Company and they have access to professional advice. The Company does not have a Remuneration Committee or Nomination Committee as the Board do not consider such committees appropriate as the Company has no employees and all the Directors are Non-Executive. As no formal Remuneration or Nomination Committee has been established, the performance of each Director will be appraised by the Audit Committee prior to the holding of the Annual General Meeting (AGM) for future years. In accordance with the Model Code, each Director is standing for re-election at the AGM in 2008, being the first AGM following his appointment. Pursuant to the Articles of Association of the Company, following the AGM on 15 August 2008, one third, or the number nearest to but not exceeding one third, of the Directors will retire and stand for re-election at the AGM each year, provided that each Director shall retire and stand for re-election at intervals of no more than three years. Colin McGrady as the only Non-Independent Director will stand for re-election every year. Each Director is appointed subject to the provisions of the Articles of Association in relation to retirement as described above.
Audit committee
The Board operates an Audit Committee which meets twice a year. The Audit Committee is comprised of Martin Richardson (Chairman), Donald Adamson, Robert Rickman and William Spitz. When required the Audit Committee meetings are also attended by the administrator and the Companys auditors. The Audit Committee operates within defined terms of reference as agreed by the Board which are available from the Company Secretary upon request. The Audit Committee function is to ensure the Companys financial reporting is maintained to the highest standards and as such is responsible for the following: + reviewing the interim and annual audited financial statements; + scope of the appointment of the auditors, and their remuneration; + reviewing the auditors effectiveness and independence; and + the effectiveness of the Companys internal control systems.
Directors responsibilities
The Directors are responsible for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards (IFRS). Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: + select suitable accounting policies and then apply them consistently; + make judgements and estimates that are reasonable and prudent; + state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and + prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that they have complied with the above requirements in preparing the financial statements.
Auditors
The auditors of the Company, KPMG Channel Islands Limited, have expressed their willingness to continue in office and a resolution giving authority to re-appoint will be proposed at the forthcoming AGM.
By order of the Board

11 July 2008
independent auditors report to the members

We have audited the Group and Company financial statements (the financial statements) of Cambium Global Timberland Limited for the period ended 30 April 2008 which comprise the Consolidated and Company Income Statement, the Consolidated and Company Balance Sheets, the Consolidated and Company Cash Flow Statement, the Consolidated and Company Statement of Changes in Equity and the related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Companys members, as a body, in accordance with Article 110 of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Companys members those matters we are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the companys members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the Statement of Directors Responsibilities on page 9, the Companys Directors are responsible for preparation of the financial statements in accordance with applicable law and IFRS. Our responsibility is to audit the financial statements in accordance with the relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies (Jersey) Law 1991. We also report to you if, in our opinion, the Company has not kept proper accounting records or if we have not received all the information and explanations we require for our audit. We read the Directors Report and other information accompanying the financial statements and consider the implications for our report if we become aware of any apparent misstatements within it.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the Groups and Companys circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements: + give a true and fair view, in accordance with IFRS, of the state of the Groups and Companys affairs as at 30 April 2008 and of the Groups profit for the period then ended; and + have been properly prepared in accordance with the Companies (Jersey) Law 1991.
Chartered Accountants
KPMG Channel Islands Limited 5 St Andrews Place Charing Cross St Helier Jersey JE4 8WQ 11 July 2008
a) The maintenance and integrity of the Cambium Global Timberland Limited website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements or audit report since they were initially presented on the website. b) Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions
10
consolidated income statement

For the period from 19 January 2007 to 30 April 2008
Notes
Revenue Cost of sales Gross profit Increase in fair value of land and plantations Administrative expenses Other operating expenses Establishment expenses
699,828 (354,140) 345,688
14,15 7
2,819,043 (2,654,022) (118,371) (3,391,375) (6,163,768)
Operating loss Losses on available-for-sale investments Finance income Finance costs Net finance income Net foreign exchange losses Profit before taxation Taxation Profit for the period attributable to shareholders Basic and diluted earnings per share The notes on pages 19 to 37 form an integral part of these annual financial statements. 11 10 8 9
(2,999,037) (30,035) 5,659,705 (70) 5,629,600 (62,933) 2,567,630 (1,295,985) 1,271,645 1.22 pence
11
consolidated balance sheet

at 30 April 2008
30 April 2008
Notes
Non-current assets Plantations Property, plant and equipment Intangible assets Deferred tax assets 14 15 16 10 23,807,920 461,120 123,164 630,005 25,022,209 Current assets Trade and other receivables Available-for-sale investments Forward exchange currency contracts Cash and cash equivalents 18 20 21 22 774,630 8,964,000 43,106 73,757,639 83,539,375 Total assets Current liabilities Trade and other payables 23 471,674 471,674 Non-current liabilities Deferred tax liabilities 10 1,920,265 1,920,265 Total liabilities Net assets Equity Stated capital Distributable reserve Revaluation reserve Translation reserve Retained earnings Total equity These financial statements were approved and authorised for issue on 11 July 2008 by the Board of Directors. 24 24 2,000,000 102,350,000 52,292 495,708 1,271,645 106,169,645 2,391,939 106,169,645 108,561,584
Donald Adamson
Director
Martin Richardson
Director
The notes on pages 19 to 37 form an integral part of these annual financial statements.
12
consolidated statement of changes in equity

Stated capital
Distributable reserve
Translation reserve
Revaluation reserve
Retained earnings
Total
At 19 January 2007 Net profit for the period Issue of ordinary share capital Reduction of stated capital account (note 24) Currency translation differences Increase in fair value of intangible assets Decrease in fair value of available-for-sale investments At 30 April 2008
104,350,000 (102,350,000) 2,000,000
102,350,000 102,350,000
495,708 495,708
69,942 (17,650) 52,292
1,271,645 1,271,645
1,271,645 104,350,000 495,708 69,942 (17,650) 106,169,645
13
consolidated cash flow statement

30 April 2008
Cash flows from operating activities Operating loss for the period Adjustments for: Gain on revaluation of land and plantations Depreciation Increase in trade and other receivables Increase in trade and other payables (2,819,043) 880 (563,077) 464,107 (2,917,133) Net cash from operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of land and plantations Cost capitalised to plantations Purchase of intangible assets Purchase of available-for-sale investments Net cash used in investing activities Cash flows from financing activities Net proceeds from the issue of shares Finance income Finance costs Net cash from financing activities Foreign exchange movements Net increase in cash and cash equivalents The notes on pages 19 to 37 form an integral part of these annual financial statements. 104,350,000 5,464,549 (70) 109,814,479 (397,266) 73,757,639 (469,679) (19,688,534) (559,827) (43,714) (8,981,650) (29,743,404) (5,916,170) (2,999,037)
14
company income statement

For the period from 19 January 2007 to 30 April 2008
Notes
Administrative expenses Establishment expenses Operating loss Losses on available-for-sale assets Finance income Net finance income Net foreign exchange gain Loss for the period The notes on pages 19 to 37 form an integral part of these annual financial statements.
(2,580,212) (3,391,375) (5,971,587) (30,035)
5,791,060 5,761,025 31,137 (179,425)
15
company balance sheet

at 30 April 2008
30 April 2008
Notes
Non-current assets Investment in subsidiary undertakings Loans to subsidiary undertakings 13 19 1,333,169 20,459,175 21,792,344 Current assets Trade and other receivables Available-for-sale investments Forward exchange currency contracts Cash and cash equivalents 18 20 21 22 599,517 8,964,000 43,106 72,928,781 82,535,404 Total assets Current liabilities Trade and other payables Total liabilities Net assets Equity Stated capital Distributable reserve Revaluation reserve Retained earnings Total equity The notes on pages 19 to 37 form an integral part of these annual financial statements. 24 24 2,000,000 102,350,000 (17,650) (179,425) 104,152,925 23 174,823 174,823 104,152,925 104,327,748
16
company statement of changes in equity

Stated capital Distributable reserve Revaluation reserve Retained earnings
Total
At 19 January 2007 Net loss for the period Issue of ordinary share capital Reduction of stated capital account (note 24) Revaluation of available-for-sale investments At 30 April 2008
104,350,000 (102,350,000) 2,000,000
102,350,000 102,350,000
(17,650) (17,650)
(179,425) (179,425)
(179,425) 104,350,000 (17,650) 104,152,925
17
company cash flow statement

30 April 2008
Cash flows from operating activities Operating loss for the period Adjustments for: Increase in trade receivables Increase in trade and other payables Foreign exchange loss
(5,971,587) (599,517) 174,823 (11,969) (436,663)
Net cash from operating activities Cash flows from investing activities Investments acquired Available for sale investments acquired Disposal of available-for-sale investments Increase in loans to subsidiary undertakings Net cash used in investing activities Cash flows from financing activities Net proceeds from the issue of shares Finance income Net cash from financing activities Net increase in cash and cash equivalents The notes on pages 19 to 37 form an integral part of these annual financial statements.
(6,408,250) (1,333,169) (8,981,650) (30,035) (20,459,175) (30,804,029) 104,350,000 5,791,060 110,141,060 72,928,781
18
notes to the financial statements

1 General information
The Company and its subsidiaries, including special purpose vehicles (SPVs) controlled by the Company, were established to invest in a global portfolio of forestry-based properties which can be managed on an environmentally and socially sustainable basis. Assets may be managed for timber production, environmental credit production or both. The Group currently owns forestry assets located in Australia, Hawaii and the United States. The Company is a closed-ended company with limited liability, incorporated in Jersey, Channel Islands on 19 January 2007. The address of its registered office is 5 Castle Street, St Helier, Jersey JE2 3RT. The Company has its primary listing on AIM, a market of the London Stock Exchange and a dual listing on the CISX.
2 Basis of preparation
The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS), which comprise standards and interpretations approved by the International Accounting Standards Board (IASB). The financial statements have been prepared in pounds sterling, which is the presentational currency of the Group and under the historical cost convention, except for the revaluation of land, plantations and certain financial instruments. Standards and interpretations in issue and not yet effective At the date of authorisation of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:
New standards Effective for periods beginning on or after
IFRS 8: Operating segments

Revised and amended standards
1 January 2009
IFRS 2: Share based payments IFRS 3: Business combinations IAS 1: Presentation of Financial Statements IAS 23: Borrowing costs IAS 29: Financial reporting in associates IAS 31: Interest in joint ventures IAS 32: Financial Instruments: Presentation IAS 36: Impairment of assets IAS 38: Intangible assets IAS 39: Financial instrument: Recognition and measurement IAS 40: Investment property
Interpretations
1 January 2009 1 July 2009 1 January 2009 1 January 2009 1 July 2009 1 July 2009 1 January 2009 1 January 2009 1 January 2009 1 January 2009 1 January 2009
Effective for periods beginning on or after
IFRIC 11: IFRS 2 Group and Treasury Share Transactions IFRIC 12: Service Concession Arrangements IFRIC 13: Customer Loyalty Programmes IFRIC 14: IAS 19 The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
1 March 2007 1 January 2008 1 July 2008 1 January 2008
The Directors anticipate that all of the above standards and interpretations will be adopted in the consolidated financial statements for the periods commencing 1 May 2008 and 1 May 2009 as appropriate and that the impact of the adoption of these standards and interpretations on the consolidated financial statements are still being assessed. Some of these standards and interpretations will require significant additional disclosures in the period of initial application over and above these currently included in the financial statements.
19
notes to the financial statements continued

3 Significant accounting policies
A summary of the principal accounting policies, all of which have been applied consistently throughout the period, is set below. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries, including SPVs controlled by the Company, made up to 30 April 2008. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefit from its activities. When necessary, adjustments are made to the financial statements of subsidiaries and SPVs to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Revenue and other income Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue can be measured reliably. Revenues are accounted for on an accruals basis. Lease income is recognised over the lease term on a straight-line basis, unless another systematic basis is more representative of the time pattern in which benefit use derived from the leased asset is diminished. Interest income is accrued on a time basis by reference to the principal outstanding and the effective interest rate applicable. Government grants Government grants are recognised on receipt of funds or earlier if there is reasonable assurance that the conditions of the grant will be met. They are accounted for in the income statement at fair value. Foreign currencies a) Functional and presentational currency Items included in the financial statements of each of the Group entities are measured in the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in pounds sterling, which is the Companys functional and presentational currency. b) Transactions and balances Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and liabilities that are carried at fair value and denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in net profit or loss for the period, except for exchange differences arising on non-monetary assets and liabilities where the changes in fair value are recognised directly to equity. c) Group companies The results and financial position of all the Group entities that have a functional currency different from the presentational currency are translated into the presentation currency as follows: (i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet; (ii) income and expenses for the income statement are translated at the average exchange rate prevailing in the period; and (iii) all resulting exchange differences are recognised as a separate component of equity. On consolidation, the exchange differences arising from the translation of the net investment in foreign entities are taken to shareholders equity. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. The period end exchange rate used is 1: US$1.9714 and 1: AU$2.111. The average rate was calculated from the date the subsidiary was acquired to 30 April 2008. The average exchange rate for the period used on the Hawaiian investment is 1: US$2.011, the Texan investment 1: US$2.0107 and the Australian investment 1: AU$2.2876. Operating profit Operating profit includes net gains and losses on revaluation of land and plantations, as reduced by administrative expenses and operating costs and excludes finance costs and income.
20
3 Significant accounting policies continued
Expenses All income and expenses are accounted for on an accruals basis and include those of the administrators, the Investment Manager and the Directors. Establishment expenses Establishment expenses incurred on the launch of the Company have been accounted for in the income statement as incurred. Impairment The carrying amount of the Groups non-financial assets, other than plantations, are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists the assets recoverable amount is estimated. Any impairment loss is recognised in the income statement whenever the carrying amount of an asset exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped together at the lowest levels for which there are separately identifiable cash flows. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount, after the reversal, does not exceed the amount that have been determined, net of applicable depreciation, if no impairment loss had been recognised. Taxation The Company is registered as a Jersey tax exempt company. The Company was exempt from Jersey taxation on income derived from outside of Jersey and bank interest earned in Jersey under the Income Tax (Jersey) Ordinance, 1961. This law was amended for assessment periods starting 1 January 2008 under Income Tax (Amendment 28) (Jersey) Law 2007. The Company will no longer be exempt from tax, it will be taxed at a corporate rate of 0 per cent. A fixed annual fee of 600 was paid to the States of Jersey in respect of the exemption up to 31 December 2007. No charge to Jersey taxation arises on capital gains. The Group is liable to foreign tax arising on activities in the overseas subsidiaries. The Company has subsidiary operations in Australia, Texas and Hawaii (Delaware). The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years or that are never taxable or deductible. The Groups liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. Deferred tax is the tax arising on differences on the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the near future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Plantations Plantations are measured on initial recognition and at each balance sheet date at fair value. Any changes in fair values are recognised in the income statement. Agricultural produce harvested from plantations are also measured at fair value less point of sale costs as at the date of harvest. Property, plant and equipment Property, plant and equipment (with the exception of motor vehicles) is initially recognised at purchase price plus any directly attributable costs. It is subsequently measured to fair value. The fair value of property is determined on a 6 monthly basis by independent external appraisal. Revaluation gains are recognised in equity through the revaluation reserve with revaluation losses recognised in the income statement. Subsequent costs are included in the carrying amount of buildings, when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they incurred. Motor vehicles are recognised at purchase cost less accumulated depreciation and any recognised impairment losses. Depreciation is provided at the rate of 12.5 per cent per annum on a diminishing balance basis.
21

Intangible assets Intangible assets are initially recognised at cost and subsequently measured to fair value. Any resultant gains are recognised in equity through the revaluation reserve. Any resultant losses are recognised directly in the income statement unless there has been previous gains on that asset which have been taken through the revaluation reserve, in which case these are cleared before the balance is taken to the income statement. Investment in subsidiaries Investments in subsidiaries are initially recognised and subsequently carried at cost in the Companys financial statements less, where appropriate, provisions for impairment. Financial instruments Financial assets and financial liabilities are recognised in the Groups balance sheet when the Group becomes a party to the contractual provisions of the instrument. The Group offsets financial assets and financial liabilities if the Group has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis. Financial assets The Groups financial assets fall into the categories below, with the allocation depending to an extent on the purpose for which the asset was acquired. Although the Group uses derivative financial instruments in economic hedges of currency, it does not hedge account for these transactions. The Group has not classified any of its financial assets as held to maturity. Unless otherwise indicated, the carrying amounts of the Groups financial assets are a reasonable approximation of their fair values. a) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise through deposits on new acquisitions and also incorporate other types of contractual monetary assets. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Trade and other receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. The effect of discounting on these financial instruments is not considered to be material. Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, such impairments directly reduce the carrying amount of the impaired asset and are recognised against the relevant income category in the income statement. Cash and cash equivalents are carried at cost and comprise cash-in-hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. b) Available-for-sale investments All quoted investments have been designated as available-for-sale. Available-for-sale investments are initially recognised on the date of purchase at cost being the fair value of purchase consideration paid plus any incremental transaction costs incurred as part of the purchase. They are subsequently adjusted to fair value with any unrealised gains or losses being recognised in equity, through the statement of changes in equity. Realised gains and losses on sale of quoted investments are recognised in the income statement. c) Fair value through profit or loss This category comprises only forward foreign currency contracts. The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (based on government bonds). Forward currency contracts are recorded as an asset and liability at the forward contract rate. The liability is subsequently measured to fair value with the resulting gain or loss being recognised in the income statement. d) De-recognition of financial assets A financial asset (in whole or in part) is de-recognised either: + when the Group has transferred substantially all the risks and rewards of ownership and when it no longer has control over the asset or a portion of the asset; or + when the contractual right to receive cash flow from the asset has expired.
22
Financial liabilities a) Financial liabilities at amortised cost Trade payables and other short term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method. The effect of discounting on these financial instruments is not considered to be material. The Group has not classified any of its financial liabilities as at fair value through profit or loss. b) De-recognition of financial liabilities A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expired.
c) Stated capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Companys ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 24 the Group considers all its stated capital and all other reserves as equity. The Company is not subject to any externally imposed capital requirements. Effective interest rate method The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and of allocating interest income and expense over relevant periods. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability or where appropriate, a shorter period.
4 Significant accounting judgements and key sources of estimation uncertainty
The Group makes estimates and assumptions concerning the future. The resulting accounting estimate will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Valuation of plantations The Group normally uses the valuation performed by its independent valuers as the fair value of its plantations. The valuation is based on assumptions. The valuers also make reference to market evidence of transaction prices for similar transactions. Valuation of buildings The Group normally uses the valuation performed by its independent valuers as the fair value of its buildings. The valuation is based on assumptions. The valuers also make reference to market evidence of transaction prices for similar transactions. Income and deferred taxes The Group is subject to income and capital gains taxes in numerous jurisdictions. Significant judgement is required in determining the total provision for income and deferred taxes. There are many transactions and calculations for which the ultimate tax determination and timing of payment are uncertain. The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded such differences will impact the income and deferred tax provisions in the period in which the determination is made. Fair value of derivative contracts The Group estimates fair values of derivative contracts by reference to current market conditions compared to the terms of contracts using the results of an appraisal process carried out by the counterparty. Valuation of intangible asset The water licence has initially been recognised at purchase cost and is revalued to a value calculated by URS Australia Pty Ltd, an external valuer. These calculations are based on assumptions.
23

5 Segmental information
Jersey
Australia
United States
Hawaii
Total assets Segment revenue Segment gross profit
84,744,721
4,966,789 253,152 229,810
15,743,240 446,676 115,878
3,106,834
The Group operates in four distinctly separate geographical locations, with timberlands located in NSW (Australia), Texas (United States) and Hawaii (Delaware). The Group owns approximately 21,163 acres of land known as Tarrangower in Ashford, New South Wales, Australia. This land was previously being used for cattle grazing and is now being planted with high value commercial and non-commercial species with a view to longer term revenue from plantations and short term revenue from carbon credits. In addition to this, the Group has managed to secure a grant from the local Catchments Management Authority for biodiversity conservation and salinity control services provided by Tarrangower as a timber and carbon estate. In Texas, the Group are part of a syndicate owning approximately 115,188 acres of land known as Corrigan of which the majority is established plantation with a balanced age distribution suitable for long and short term sustainable yield. The Hawaiian plantation consists of 3,700 acres of mature Eucalyptus trees known as the Pahala plantation. The plantation was acquired to provide for the needs of a veneer mill which is coming in to operation. This will generate higher value products such as veneer logs as opposed to commodity wood chips.
6 Revenue
Group 2008
Sales timber Sales right of way Lease income Grant income
291,227 106,012 105,876 196,713 699,828
The grant income was received from Border Rivers-Gwydir Catchment Management Authority (an Australian Government Authority) on signature of a Property Vegetation Plan (PVP) in connection with the Tarrangower property. The PVP covers conservation management, regeneration of the area, natural revegetation and plantation and allows for income receipts of up to a total of AU$960,000 (419,654) on certification of certain milestones having been achieved by the landholder. The PVP is for a term of 15 years and is governed by the laws of New South Wales.
7 Administrative expenses
Company 2008
Group 2008
Investment Managers fees Directors fees Auditors fees Other professional fees Revaluation on property, plant and equipment Depreciation
1,207,676 143,041 38,000 1,191,495 2,580,212
1,207,676 143,041 38,000 1,221,148 43,277 880 2,654,022
24
8 Finance income
Company 2008
Group 2008
Interest from subsidiary undertakings Bank interest Bond interest
159,632 5,316,177 315,251 5,791,060
5,344,454 315,251 5,659,705
9 Finance costs
Company 2008
Group 2008
Bank interest
70
10 Taxation
Taxation on profit on ordinary activities: Company The Company was exempt from taxation up to 31 December 2007 under the provisions of the Income Tax (Jersey) Law, 1961. This law was amended for assessment periods starting 1 January 2008 under Income Tax (Amendment 28) (Jersey) Law 2007. The Company will no longer be exempt from tax, it will be taxed at a corporate rate of 0 per cent. Group The Groups tax expenses for the period comprises:
Group 2008
Deferred taxation United States Australia
1,791,527 (495,542) 1,295,985
Tax expense reconciliation Profit for the period Less: income non-taxable Add: expenditure non-taxable Add: unprovided deferred tax asset movement Taxable profit for the year Tax at domestic rates applicable to profits in the country concerned:
2,567,630 (5,791,060) 6,224,027 475,404 3,476,001
Group 2008
Australian taxation at 30% United States Texan taxation at 35% United States Delaware taxation at 34%
(3,087,512) 1,682,550 108,977 (1,295,985)
25

10 Taxation continued
Deferred taxation The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon:
Group 2008
Revaluation of biological assets and land Accelerated tax depreciation Capitalised assets deducted Capitalised liabilities taxed
(1,298,560) (833) (958) 4,366 (1,295,985)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after offset) for the financial reporting purposes available for the offset against future profits.
Group 2008
Deferred tax liabilities Deferred tax assets Foreign exchange effect
(1,877,454) 581,469 5,725 (1,290,260)
At the balance sheet date the Group has unused tax losses of 475,404. No deferred tax asset has been recognised in respect of these losses. Due to the unpredictability of future taxable profits, the Directors believe it is not prudent to recognise deferred tax assets in respect of these losses.
11 Basic and diluted earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Group 2008
Earnings for the purposes of basic and diluted earnings per share being net profit for the period as per income statement Number of ordinary shares Number of ordinary shares for basic and diluted earnings per share: Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share Basic and diluted earnings per share
1,271,645
104,350,000 1.22 pence
26
12 Net Asset Value
Group 2008
Total assets Total liabilities Net Asset Value Number of shares in issue Net Asset Value per share
108,561,584 2,391,939 106,169,645 104,350,000 1.02
13 Investment in subsidiaries
A list of the significant investments in subsidiaries, including the name, country of incorporation and the proportion of ownership interest is given below.
Name of subsidiary undertaking % of voting rights Country of incorporation Principal activity
Cambium Tarrangower Holdings Limited Cambium Australia Trust Cambium Pahala Holdings Limited Cambium Pahala Hungary Holdings Kft. Cambium Pahala Inc. (Delaware) Cambium Pinnacle Holdings Limited Cambium Holdings Limited Corrigan Holdings Limited Cambium Hungary Holdings Kft. Corrigan Hungary Holdings Kft. Cambium Corrigan Limited Partnership Cambium Minas Gerias Holdings Limited Cambium MG Holdings Limited Investments held by the Company:
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Jersey Australia British Virgin Islands Hungary Delaware, United States British Virgin Islands British Virgin Islands British Virgin Islands Hungary Hungary Texas, United States British Virgin Islands British Virgin Islands
Holding company Forestry Holding company Holding company Forestry Holding company Holding company Holding company Holding company Holding company Forestry Holding company Holding company
Company 2008
Cambium Tarrangower Holdings Limited Cambium Pahala Holdings Limited Cambium Pinnacle Holdings Limited Cambium Holdings Limited Corrigan Holdings Limited Cambium Minas Gerias Holdings Limited Cambium MG Holdings Limited
1,191,567 67,455 49 36,999 36,999 51 49 1,333,169
27

14 Plantations
Merchantable timber Group
Pre-merchantable timber Group
Land and plantations Group
Total Group
Land acquired in the period Plantations acquired in the period Acquisition costs capitalised Gains on growth Harvesting agriculture produce (felling) Transfer to merchantable timber Transfer to pre-merchantable timber Fair value adjustments on plantations Fair value adjustments on land Foreign exchange effect Carrying value as at 30 April 2008
6,207,140 123,739 6,330,879
5,660,615 119,750 5,780,365
6,940,340 12,748,194 559,827 537,978 (437,588) (6,207,140) (5,660,615) 1,270,859 1,591,461 353,360 11,696,676
6,940,340 12,748,194 559,827 537,978 (437,588) 1,270,859 1,591,461 596,849 23,807,920
The land and plantations are carried at their fair value as at 30 April 2008, as measured by external independent valuers URS Australia Pty Ltd (URS) and Day Forest Management and Appraisal Inc. The appraisal on the Texas forest was undertaken by Day Forest Management and Appraisal Inc. in conformance with Uniform Standards of Professional Appraisal Practice. For this valuation three valuation approaches were used as considered applicable. These included the cost approach, the sales comparison approach and the income approach. The methodology used by URS to determine the land value of the Australian investment is consistent with the Australian equivalent of IFRS. The preferred approach in the standard is the fair value model. While non-forestry land values can be assessed using transaction evidence, there is no comparable transaction evidence to determine the value of land for forestry purposes in the region. Therefore, URS has applied a discounted cash flow analysis to determine the value of the land for forestry purposes. The small plantation area is valued according to the requirements of Australian Accounting Standards Board 141 Agriculture which is consistent with IFRS. The property revaluation was performed taking into account the Groups intention to use land for plantation purposes. The Hawaiian plantation was valued by URS at fair value. The market value of the plantations has been assessed using a discounted cash flow (DCF) in accordance with IFRS. A discount rate of 7.5 per cent real was derived using a Capital Asset Pricing Model (CAPM)/Weighted Average Cost of Capital (WACC) methodology and applied to real, pre-tax cash flows.
15 Property, plant and equipment

Buildings Group 2008 Improvements Group 2008
Motor vehicles Group 2008
Total Group 2008
Cost Assets acquired in period Balance as at 30 April 2008 Depreciation and fair value movements Revaluation Foreign exchange effect Depreciation for the period
365,886 365,886 (41,528) 27,135 (14,393)
91,899 91,899 (1,749) 7,542 5,793 97,692
11,894 11,894 921 (880) 41 11,935
469,679 469,679 (43,277) 35,598 (880) (8,559) 461,120
Carrying value Balance as at 30 April 2008
351,493
The buildings and improvements are carried at their fair value as at 30 April 2008, as measured by external independent valuers URS Australia Pty Ltd and Day Forest Management and Appraisal Inc. (in conjunction with the external valuation of plantations). The valuations have been prepared using techniques approved under IFRS. The motor vehicles are carried at cost less accumulated depreciation.
28
16 Intangible assets
Group 2008
Cost water licence Revaluation Foreign exchange effect
43,714 69,942 9,508 123,164
The Tarrangower property has approximately 4km of frontage to the Severn River and has attached to it a water licence administered by the Department of Natural Resources in Australia (DNR). The 105 mega litre surface irrigation license (Number 90SL100620) has rights attached to it allowing an annual allocation of 48 mega litres A class and 57 mega litres B class from Pindari Dam which is located 11km further up stream. The licence is renewable on a five yearly basis and at a small administration cost to the Group. The licence is measured at fair value as at 30 April 2008, as measured by external independent valuers URS Australia Pty Ltd. The valuations have been prepared using techniques approved under IFRS.
17 Categories of financial assets and financial liabilities
Company 2008
Group 2008
Current financial assets Financial assets through profit or loss: Forward exchange currency contracts Loans and receivables: Trade and other receivables Cash and cash equivalents Available-for-sale investments: Available-for-sale investments Non-current financial assets Loans and receivables: Loans to subsidiary undertakings Current financial liabilities Financial liabilities measured at amortised cost: Trade and other payables
43,106 599,517 72,928,781 8,964,000
43,106 774,630 73,757,639 8,964,000
20,459,175
174,823
471,674
18 Trade and other receivables
Company 2008
Group 2008
Accrued interest on bonds Bank interest receivable Goods and service tax receivable Trade receivables Deposit paid Deferred costs Prepaid expenses
53,565 141,591 41,696 251,572 87,341 23,752 599,517
53,565 141,591 8,985 199,940 251,572 87,341 31,636 774,630
The deposit was paid on the Pinnacle forest and deferred costs were incurred on prospective investments in forests.
29

19 Loans to subsidiary undertakings
Company 2008 US$
Company 2008
Cambium Corrigan Holdings Limited Corrigan Holdings Limited Cambium Pahala Holdings Limited
13,589,129 13,589,129 5,683,997 32,862,255

AU$
6,893,137 6,893,136 2,883,229 16,669,502
Cambium Tarrangower Holdings Limited Total loans to subsidiary undertakings
8,000,000
3,789,673 20,459,175
All inter-company loans are interest free and have no fixed terms of repayment. The Directors do not anticipate that payment on these loans will be demanded during the next 12 months.
20 Available-for-sale investments
Company 2008
Group 2008
UK Treasury stock 4% 3.07.2009
8,964,000
8,964,000
The UK Treasury stock is held as a margin account for the forward currency contracts (see note 21). As the forward contracts have a strike date of 30 April 2009, it is the intention of the Company to sell these gilts at this date. The fair value of the UK Treasury stock is determined with standard terms and conditions and traded on the London Stock Exchange determined with reference to quoted market prices.
21 Forward exchange currency contracts
Company 2008
Group 2008
Forward foreign currency contracts: At forward rate At market rate Difference
26,690,135 (26,647,029) 43,106
26,690,135 (26,647,029) 43,106
As at 30 April 2008 there were five forward foreign currency contracts in place. They are used to hedge against foreign exchange exposure arising from investing in foreign operations and foreign currency transactions. Forward exchange currency contracts held by the Company and the Group at their forward exchange rates are listed below. All of the contracts have a strike date of 30 April 2009.
US$
Forward exchange currency contracts for United States dollar
42,250,000
AU$
21,870,721
Forward exchange currency contracts for Australian dollar
10,500,000
4,819,414
30
22 Cash and cash equivalents
Company 2008
Group 2008
Cash held at bank Cash held at broker
72,908,716 20,065 72,928,781
73,737,574 20,065 73,757,639
23 Trade and other payables
Company 2008
Group 2008
Accruals Trade creditors Advances held
174,823 174,823
187,068 70,444 214,162 471,674
24 Stated capital
Company 2008
Group 2008
Net proceeds from issue of shares Less: reduction in share capital
104,350,000 104,350,000 (102,350,000) (102,350,000) 2,000,000 2,000,000
The total authorised share capital of the Company is 250 million ordinary shares of no par value with 104,350,000 shares issued at 100 pence each on initial placement. Ordinary shares carry no automatic rights to fixed income but the Company may declare dividends from time to time to which ordinary shareholders are entitled. Each share is entitled to one vote at meetings of the Company. On 22 February 2007 a special resolution was passed by the Company to reduce the stated capital account from 104,350,000 to 2,000,000. Approval was sought from the Royal Court of Jersey and was granted on 29 June 2007. The balance of 102,350,000 was transferred to a distributable reserve on that date.
25 Reserves
The movements in the reserves for the Group and the Company are shown on pages 13 and 17 respectively. Translation reserve The translation reserve contains exchange differences arising on consolidation of the Groups foreign operations. Revaluation reserve The revaluation reserve arises from the revaluation on available-for-sale investments, intangible assets and property plant and equipment. Distributable reserve The Company reduced its stated capital account and a balance of 102,350,000 was transferred to distributable reserves.
31

26 Business combinations
On 18 April 2007 Cambium Jersey Trust was established with initial settled funds of 100 transferred by the Company. The Company was the sole beneficiary of Cambium Jersey Trust. Cambium Jersey Trust was the sole investor in Cambium Australia Trust which is a Unit Trust established in Australia which currently holds Australian land for agricultural purposes. On 12 June 2007 the Company contributed capital of US$27,125,000 to Cambium Corrigan LP, a limited partnership established in the state of Texas, which holds timberland in the United States. On 10 August 2007 CP Cogent Asset Management LP advised the Board on a new structure in which to hold the Australian investment. The benefit the Company will derive from the new structure is that withholding tax will be lowered from 45 per cent to 30 per cent. The Board decided that the Company should acquire a newly formed Jersey company, Cambium Tarrangower Holdings Limited. The Cambium Australia Trust would buy their units back from Cambium Jersey Trust and the Cambium Jersey Trust would be terminated as soon as possible. Cambium Tarrangower Holdings Limited subscribed to the units on Cambium Australia Trust. Funding for this transaction was provided by the Company. On 1 August 2007 the Company transferred US$5,491,000 to an escrow account in respect of a capital contribution to Cambium Pahala Inc., a Company established in Delaware.
27 Financial instruments risk exposure and management
In common with other businesses, the Group is exposed to risks that arise from use of financial instruments. The notes below describe the Groups objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements. Principal financial instruments The principal financial instruments used by the Group and Company, from which financial instrument risk arises, as follows: + Amounts receivable from subsidiary and SPV undertakings + Trade and receivables + Available-for-sale investments + Forward exchange currency contracts + Cash and cash equivalents + Trade and other payables + Deposits The Board of Directors and Investment Manager are responsible for overseeing the measurement and control of all aspects of risk management and hold regular meetings in order to do so. Various risk management models are in place which help to identify and monitor key risks both at individual investment level and at a Group level. The risk management policies apply equally to the Group and the Company. Further details regarding these policies are set out below. Credit risk Credit risk is the risk that the counterparty to a financial instrument will fail to meet obligations, causing a loss to the Group. a) Group Cash and cash equivalents represent the majority of the Groups financial assets. The credit risk associated with the holding of cash and cash equivalents is managed under the Groups cash management policy. The cash management policy states that the Group must have a minimum of 5 bankers so as to spread the risk of default. The cash management policy will be reviewed on an annual basis by the Board of Directors and the Investment Manager.
32
27 Financial instruments risk exposure and management continued
Credit risk continued b) Company The Companys credit risk mainly arises from cash and equivalents and amounts receivable from subsidiaries and SPVs. The Company follows the same Group policy with regards to diversification of banking arrangements. Amounts receivable from subsidiaries and SPVs are mainly long term in nature and the loans are monitored on a regular basis. The table below shows the exposure to risk of the major counterparties at the balance sheet date:
Counterparty Credit rating symbols Rating Carrying amount
Investec Bank (Channel Islands) Limited AIB Bank (Channel Islands) Limited Bank of Scotland International PLC Royal Bank of Scotland International PLC UBS AG MF Global (United Kingdom) Limited New South Wales Treasury Corporation National Australia Bank Limited Regions Bank Maturities of these financial assets:
Fitch Fitch Fitch Fitch Fitch Fitch S&P S&P S&P
F2 F1+ F1+ F1+ F1+ F2 A +1 A +1 A +1
8,107,779 20,736,996 17,715,974 21,636,894 4,854,865 20,065 198,357 388,961 409,153

3 months 1 year
< 1 month
1 3 months
Investec Bank (Channel Islands) Limited AIB Bank (Channel Islands) Limited Bank of Scotland International PLC Royal Bank of Scotland International PLC UBS AG MF Global (United Kingdom) Limited New South Wales Treasury Corporation National Australia Bank Limited Regions Bank
3,330,464 15,961,174 13,148,126 16,861,451 82,470 20,065 388,961 409,153
4,777,315 4,775,822 4,567,848 4,775,443 4,772,395 198,357
Liquidity risk Liquidity risk is the risk that the Group will not be able to meet financial liability obligations as they fall due. The Groups liquidity risk is managed by the Investment Manager in accordance with policies and procedures established by the Board. The derivative financial liabilities have been put in place so as to manage the potential foreign exchange exposure arising from investing in assets in foreign jurisdictions. Under the Groups hedging policy, hedging will only be employed once timber assets are acquired. Therefore all hedging liabilities are matched with an associated asset so as to keep risk to a minimum. The hedging policy is reviewed quarterly by the Board of Directors. The table below analyses the Groups financial liabilities and derivative assets and liabilities, which will be settled on an net basis, into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
33

Contract maturities of financial liabilities
< 1 month 1 3 months 3 months 1 year
Forward exchange currency contracts Trade and other payables
(471,674) (471,674)
26,647,029 26,647,029
The forward exchange currency contracts have a strike date of 30 April 2009. The Company has a forward exchange currency facility with UBS AG to the amount of 1,800,000. The review date of this facility is 25 December 2050. Market risk Foreign exchange risk The Group is exposed to currency risk through investing in assets held in currencies other than the functional currency. As a result, the Group is exposed to the risk that the exchange rate of its currency relative to other foreign currencies may fluctuate and have an adverse affect on the Groups performance. The Group operates in various parts of the world and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to pound sterling, Australian dollar and United States dollar. Foreign exchange risk arises from future commercial transactions, recognised monetary assets and liabilities and net investments in foreign operations. The Group safeguards foreign currency operations against adverse movements between pound sterling, Australian dollar and United States dollar through the use of forward foreign currency contracts. The forward foreign currency contracts are established and monitored in accordance with the Groups hedging policy. At reporting date the Group had the following exposure:
Company 2008 Group 2008
Australian dollar United States dollar Hungarian forint
3,789,673 16,669,502
4,941,376 4,904,164 23,865
The table below summarises the Groups and Companys exposure to foreign currency risk at 30 April 2008. The Groups and Companys assets and liabilities at carrying amounts are included in the table, categorised by the currency at their carrying amount and the underlying principle amount of the forward exchange contracts.
Monetary assets Monetary liabilities Forward exchange contracts Net exposure
599,808 422,091 23,868
34,688 271,095 11,762
4,863,058 21,783,971
12,106
The exposure analysis in this does not represent the fair view of the exposure as the Group is hedging not only monetary assets and liabilities but all foreign operations. This includes all foreign assets and liabilities. The Groups policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency with cash generated from their own operations in that currency.
34
Market risk continued Foreign exchange risk continued At 30 April 2008, had the pound sterling strengthened by 5 per cent in relation to all currencies, with all other variables held constant, the Net Asset Value would have decreased by the amounts shown below:
(180,461) (793,143)
(235,349) (890,295) (1,136)
A 5 per cent weakening of the pound sterling against the above currencies would have resulted in an equal but opposite effect on the above financial statement amounts to the amounts shown above, on the basis that all other variables remain constant. The sensitivity analyses above, both interest and exchange rates, are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be correlated, for example, change in interest rates and change in market values. Price risk Price risk is the risk that value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. The majority of the Groups financial instruments are carried at fair value with fair value changes recognised in the income statement or the statement of changes in equity, changes in market prices will directly affect these statements. Price risk is reviewed and managed by the Board on a quarterly basis. The available-for-sale investments is the only financial assets that expose the Group to price risk. The details are as follows:
UK Treasury stock 4% 03.07.2009
8,964,000
8,964,000
100 per cent of the Groups equity investments are listed on the UK London Stock Exchange. A 3 per cent increase in stock prices at 30 April 2008 would have increased the Net Assets Value of the Group by 268,920 and an equal change in the opposite direction would have decreased the Net Assets Value of the Group by an equal but opposite amount.
35

Market risk continued Cash flow and fair value interest rate risk The majority of the Groups financial assets are interest bearing in the form of cash. Interest rate risk arises in the Group predominantly from the holding of cash and cash equivalents. The Board have established a cash management policy to ensure the best return from the Groups bankers and to mitigate interest rate risk arising from the holding of cash. Cash is predominantly held on short term deposit and the Board reviews interest rates on a quarterly basis. The Groups and Companys interest rate profile is shown in the table below: Interest rate profile as at 30 April 2008
Group % Group Company % Company
Weighted average interest rate Loans and receivables Non-interest bearing Cash and cash equivalents Variable Amounts receivable from subsidiaries Non-interest bearing Financial assets through profit and loss Derivative financial liabilities Fixed payable Fixed receivable Available-for-sale investments Non-interest bearing Variable Financial liabilities at amortised cost trade and payables Non-interest bearing 4.93
774,630 73,757,639 5.38
599,517 72,928,781 20,459,175
(26,647,029) 26,690,135
(26,647,029) 26,690,135
4.00
8,964,000
4.00
8,964,000
(471,674)
(174,823)
For the Group, an increase in 100 basis points in interest yields would result in a pre-tax profit of 735,693. A decrease in 100 basis points in interest yields would result in a pre-tax loss for the period of 735,693. For the Company, an increase in 100 basis points in interest yields would result in a pre-tax profit of 727,404. A decrease in 100 basis points in interest yields would result in a pre-tax loss for the period of 727,404. Capital risk management The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost to capital. In order to maintain or adjust the capital structure the Group may adjust amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell net assets to reduce debt. In order to ensure that the Group will be able to continue as a going concern, management continuously monitor forecast and actual cash flows and matching the maturity profiles of assets and liabilities. The Group has no external borrowings.
36
28 Events after the balance sheet date
The Company has purchased a leasehold interest on Pinnacle, a Hawaiian property. The Pinnacle investment comprises of approximately 4,500 acres located on the Big Island of Hawaii. The asset consists of existing plantations which will be managed for timber production. The purchase price was approximately US$7,500,000. The Company has purchased 29,900 acres of timberland for approximately 22,000,000. The property is located in Northwestern Florida and Southwestern Georgia. The property consists of professionally managed diverse pine plantations that possess a well structured array of age classes allowing immediate harvest income. Marketable products include sawtimber and pulp, which can be sold into healthy forest product markets that exist in this geography. The property also generates revenue from hunting leases. The Company has made commitments to buy properties in both Brazil and New Zealand. The property in Brazil is in the state of Minas Gerais and will be a greenfield Eucalyptus plantation development. The land purchase will be approximately 1,500,000 and will require a further 2,300,000 in expenditure over the next two years to develop the estate. Two properties are under contract in New Zealand they will approximately amount to 5,500,000. The Company is awaiting approval of the New Zealand Overseas Investment Office and then will purchase the assets. The two assets consist of existing radiate pine plantations. Other than the above, the Company had no significant post balance sheet events.
29 Related party transactions
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. CP Cogent Asset Management LP is the Investment Manager to the Company under the terms of the Investment Manager Agreement and is thus considered a related party of the Company. During the period 1,207,676 was paid to CP Cogent Asset Management LP in respect of management fees. Transactions between the Company and its subsidiaries, which are related parties, have been disclosed in notes 13 and 19. Colin McGrady is a Director of CP Cogent Asset Management LP, who act as Investment Manager. He is also a Director of the Company and has waived his Directors fees for the period. The Directors of the Company received fees for their services and further details are provided in the Directors Report. The total charge fees are shown in note 7 and separately disclosed in the Directors Report.
37
notice of annual general meeting

NOTICE IS HEREBY GIVEN THAT an Annual General Meeting of shareholders of Cambium Global Timberland Limited (the Company) will be held at 5 Castle Street, St. Helier, Jersey JE2 3RT on 15 August 2008 at 10.00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions:
Ordinary resolutions
1. To receive and adopt the Directors Report, Auditors Report and the Audited Consolidated Financial Statements for the period ended 30 April 2008. 2. That Donald Adamson be elected as a Director of the Company in accordance with Article 19.03 of the Companys Articles of Association. 3. That Martin Richardson be elected as a Director of the Company in accordance with Article 19.03 of the Companys Articles of Association. 4. That Robert Rickman be elected as a Director of the Company in accordance with Article 19.03 of the Companys Articles of Association. 5. That William Spitz be elected as a Director of the Company in accordance with Article 19.03 of the Companys Articles of Association. 6. That Colin McGrady be elected as a Director of the Company in accordance with Article 19.03 of the Companys Articles of Association. 7. The Board of Directors recommend a final dividend of 3 pence per share. 8. To re-appoint KPMG Channel Islands Limited as auditors of the Company. 9. To authorise the Directors to fix the remuneration of the Companys auditors. 10. That the Companys investment strategy as set out below is approved and affirmed: Returns from timberland are influenced by three factors: (i) biological tree growth; (ii) timber price changes; and (iii) changes in the value of the underlying land asset. The Company aims to establish a portfolio comprising geographically diverse assets located both in mature markets and in developing markets where potentially higher returns may be generated but with commensurately higher risk. The Company will initially target investments in North and South America and the Asia-Pacific region (including Australia and New Zealand) but may invest in other regions on an opportunistic basis, as determined by CP Cogent Asset Management LP (Cogent) with the approval of the Board. The Companys strategy is to achieve a balance between generating income and producing superior total returns to investors by establishing an optimised portfolio of timberland properties and timberland-related investments diversified by location, age class and species. Different age classes of tree will provide harvestable timber over time and diversification by region and species will provide exposure to different growth rates and different market segments. Investment strategies related to timber market segments, improved management, new opportunities in emerging environmental markets such as carbon credits and reduction of project risk may be employed to increase total returns. Geographic spread of investments Geographic diversification, which Cogent believes is integral to generating consistent risk-adjusted returns should also assist in the management of regulatory risk, environmental policy risk and natural disaster risk. It can also provide exposure to different climate zones with unique growing conditions and regional timber market prices. Species diversification The forestry sector includes a set of markets that respond to different demand drivers and with different supply side dynamics. An analysis of these factors by Cogent indicates that the Company should target allocations to specific timber market segments. Subject to prevailing market conditions, the Companys current expectation is to de-emphasise pulpwood plantations, be neutral on softwood structural lumber and emphasise investments producing hardwood saw logs. Age class diversification Mature forests typically generate steady cash flows of up to 10 per cent per annum, but offer limited prospects for capital appreciation. Alternatively, new plantations will provide no cash flow and will require funding of continued operational costs during their period of growth but offer better prospects for capital appreciation and usually provide a higher rate of total returns over time. Forestry investment opportunities can be found in all stages of growth and the Company will seek to create a portfolio (investing in plantations across all age classes) with a blended portfolio yield sufficient to support the target dividend yield. This assumes investment in assets at the immature growth stage or with unbalanced age classes which should over time facilitate potentially higher total returns, particularly in the Asia-Pacific region and South America.
38
Ordinary resolutions continued
10. That the Companys investment strategy as set out below is approved and affirmed continued: Value enhancement Traditional timberland investors have an opportunity to add value to forestry investments through a number of strategies which seek to exploit environmental option values of forests. These include but are not limited to, the sale of carbon credits, water use rights, endangered species banks, tradable development rights, conservation easements, leasing of ridgelines to wind farm operators, development of small scale hydro-electric generation facilities, and cooperating on biomass energy development. New Forests Advisory Pty Limited will seek to use its expertise in this area to exploit option values which may not be fully reflected in the price of assets acquired by the Company. In emerging markets such as those in Latin America and the Asia-Pacific region, significant value can be added by rationalising underperforming management or changing management strategy so as to achieve greater efficiency. Many plantation operations suffer from inappropriate choice of tree species, poor timber, lack of capital for roads, plant and equipment and a general lack of management competency. Putting in place effective management can significantly increase returns. Many emerging market transactions are complex and require negotiation with governments or governmental agencies and unsophisticated counterparties. There is a general perception of risk associated with such markets so that investors typically apply high discount rates when assessing the price of a primary transaction. However, once the assets are put under professional management, their marketability may significantly improve as the risk profile is seen to decline; this can provide substantial valuation uplift.
Special resolutions
11. To grant standing authority such that the Company be authorised generally and without conditions to make market purchases of its ordinary shares. That the Company be and is hereby generally and unconditionally authorised to make market purchases of fully paid shares in the capital of the Company (shares) pursuant to Article 57 of the Companies (Jersey) Law 1991 (the law) and the Companys Articles of Association provided that: (a) the maximum number of shares hereby authorised to be purchased shall be 15,642,065 being 14.99% of the total number of shares in issue as at 30 June 2008; (b) the minimum price which may be paid for a Share is one pence; (c) the maximum price which may be paid for a Share is an amount equal to 105% of the average middle market quotations of a Share taken from the London Stock Exchange for the five business days immediately preceding the date of the purchase (or such other amount as may be specified by the London Stock Exchange from time to time); (d) the minimum and maximum prices specified in sub-paragraphs (b) and (c) of this resolution are in all cases exclusive of any expenses payable by the Company; (e) the Company shall fund the payments of the purchases of shares in any manner permitted by the law; (f) the Directors of the Company reasonably believe that the Company shall be able to meet the solvency tests prescribed by the law although will require to consider and confirm that the relevant solvency tests are met when any purchase is effected; (g) the authority hereby conferred shall expire on the earlier of (i) the date of the Annual General Meeting of the Company to be held in 2008; and (ii) 18 months from the date of the passing of this resolution, unless such authority is varied, revoked or renewed prior to such time by the Company in general meeting by special resolution; and (h) the Company may enter into a contract to purchase shares under the authority hereby conferred prior to the expiry of such authority which will or may be completed or executed wholly or partly after the expiry of such authority. 12. That the Articles of Association contained in the printed document enclosed with this notice of Annual General Meeting be and are hereby approved and adopted as the Articles of Association of the Company in substitution for and to the exclusion of the existing Articles of Association of the Company with immediate effect. By order of the Board
For and on behalf of
Investec Trust (Jersey) Limited

Company secretary 24 July 2008
Registered office:
5 Castle Street St. Helier Jersey JE2 3RT Channel Islands
39
notice of annual general meeting continued

Notes:
1. Any shareholder entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company. 2. The form of proxy, together, if appropriate, with the power of attorney or other authority (if any) under which it is signed, must be deposited at the office of the Companys registered office not later than 48 hours before the time appointed for holding the meeting. 3. Return of a completed form of proxy will not preclude a shareholder from attending and voting personally at the meeting. 4. The notice sets out the resolutions to be proposed at the meeting. The meeting will be chaired by a person nominated by the shareholders present in person or by proxy at the meeting. It is anticipated that the Chairman of the meeting will be Martin Richardson. 5. The quorum for a meeting of shareholders is two or more shareholders present in person or by proxy. 6. If, within half an hour from the appointed time for the meeting, a quorum is not present, then the meeting will be adjourned to 10.00 a.m. on 18 August 2008 at the same address. At that meeting, those shareholders present in person or by proxy will form a quorum whatever their number. 7. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holders name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope.
40
key parties
Directors Registered Office of the Company
5 Castle Street St Helier Jersey JE2 3RT Telephone +44 (0)1534 512512
Donald Adamson Robert Rickman William Spitz Martin Richardson Colin McGrady
Registrar, Paying Agent and Transfer Agent

Capita Registrars (Jersey) Limited PO Box 378 Jersey JE4 0FF Landsbanki Securities (UK) Ltd Beaufort House 15 St Botolph Street London EC3A 7QR
Auditors
Nominated Adviser for AIM
KPMG Channel Islands Limited PO Box 453 5 St Andrews Place Charing Cross St Helier Jersey JE4 8WQ
Sponsor to CISX Listing
Investment Manager
CP Cogent Asset Management, LP 100 Crescent Court Suite 500 Dallas TX 75201
Carey Olsen Corporate Finance Limited 44 Esplanade St Helier Jersey JE1 0BD
Administrator and Company Secretary

Investec Trust (Jersey) Limited 5 Castle Street St Helier Jersey JE2 3RT
Property Valuers
Day Forest Management & Appraisal Inc. PO Drawer 1169 4711 North Wheeler/Highway 96 North Jasper Texas 75951 United States URS Australia Pty Ltd Level 6, 1 Southbank Boulevard Southbank Victoria 3006 Australia
5 Castle Street St Helier Jersey JE2 3RT Telephone +44 (0)1534 512512

Cambium Annual Report 2008

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Cambium Annual Report 2008

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Cambium Global Timberland Limited Annual report and financial statements

for the period ended 30 April 2008

Strategy and Implementation

investment managers report

CP Cogent Asset Management LP

Martin Willaume Richardson (aged 59),

William Taylor Spitz (aged 57),

Colin Sean McGrady (aged 37),

Business of the company

Results and dividends Directors

Colin McGrady Donald Adamson Martin Richardson William Spitz

50,000 50,000 50,000 50,000

0.02 0.02 0.02 0.02

Donald Adamson Martin Richardson Robert Rickman William Spitz

49,753 31,096 31,096 31,096 143,041

Colin McGrady waived his Directors fees for the period.

directors report continued

The Combined Code includes provisions relating to:

By order of the Board

independent auditors report to the members

Respective responsibilities of directors and auditors

Basis of audit opinion

consolidated income statement

699,828 (354,140) 345,688

2,819,043 (2,654,022) (118,371) (3,391,375) (6,163,768)

consolidated balance sheet

consolidated statement of changes in equity

104,350,000 (102,350,000) 2,000,000

69,942 (17,650) 52,292

1,271,645 104,350,000 495,708 69,942 (17,650) 106,169,645

consolidated cash flow statement

company income statement

(2,580,212) (3,391,375) (5,971,587) (30,035)

5,791,060 5,761,025 31,137 (179,425)

company balance sheet

company statement of changes in equity

104,350,000 (102,350,000) 2,000,000

(179,425) 104,350,000 (17,650) 104,152,925

company cash flow statement

(5,971,587) (599,517) 174,823 (11,969) (436,663)

notes to the financial statements

IFRS 8: Operating segments

1 March 2007 1 January 2008 1 July 2008 1 January 2008

notes to the financial statements continued

3 Significant accounting policies continued

notes to the financial statements continued

3 Significant accounting policies continued

4 Significant accounting judgements and key sources of estimation uncertainty

notes to the financial statements continued

Total assets Segment revenue Segment gross profit

4,966,789 253,152 229,810

15,743,240 446,676 115,878

Sales timber Sales right of way Lease income Grant income

291,227 106,012 105,876 196,713 699,828

1,207,676 143,041 38,000 1,191,495 2,580,212

1,207,676 143,041 38,000 1,221,148 43,277 880 2,654,022

Interest from subsidiary undertakings Bank interest Bond interest

159,632 5,316,177 315,251 5,791,060

5,344,454 315,251 5,659,705

Deferred taxation United States Australia

1,791,527 (495,542) 1,295,985

2,567,630 (5,791,060) 6,224,027 475,404 3,476,001

(3,087,512) 1,682,550 108,977 (1,295,985)