TREE.L Regulatory News (TREE)

4 August 2011

Cambium Global Timberland Limited (the "Company")

Annual Report and Audited Financial Statements for the year ended 30 April 2011

The Company announces that the Annual Report and Audited Financial Statements for the year ended 30 April 2011 are available and attached hereto.

An electronic copy of the Financial Statements is available on the Company's website at www.cambiumfunds.com.

For further enquires please contact:

Investment Manager

CP Cogent Asset Management

Rich Standeven / Matt Haertzen

+ 1 214 871 5400

Broker

Matrix Corporate Capital LLP

Paul Fincham / Jonathan Becher

+ 44 (0) 20 3206 7000

Nominated Adviser

PricewaterhouseCoopers LLP

Melville Trimble / Krysia Sturgeon

+ 44 (0) 20 7213 8898 / + 44 (0) 20 7212 5504

Since its inception, Cambium's goal has been to deliver its investors a total return from a diversified timberland portfolio. Over a period marked by very difficult timber markets, the Company has taken several steps to enhance value and reshape the portfolio to the changing economic landscape. The active rebalancing initiative resulted in several transactions that enhanced the portfolio's value and positioned the Company for continued investment in the highest returning opportunities. These strategic transactions began with a loan taken out against the North American properties at favorable long-term rates, reducing net exposure to the Dollar while freeing capital to continue the planting activities in the greenfield plantations in Brazil.

In November, to reduce exposure to the North American timber markets, the Company closed a sale of 14,270 acres of timberland in Corrigan, TX, at 97% of net asset value and 111% of the Company's cost basis in the land. A sale of the Renwick property in New Zealand was closed in February at 118% of net asset value and 120% of the cost basis. And finally, a sale of the remaining 7,270 acres of timberland in Corrigan, TX was announced in June and will close shortly.

The financial results for the Company reflect the difficult market environment that exists in the global timber markets, and those markets' impact on timberland valuations. For the period, after adding back the dividend distribution, the Company's net asset value declined 11% from 91 pence per share to 81 pence per share including the 3 pence dividend. This loss was the result of downward adjustments in property valuations and losses from the now discontinued currency hedging.

Soft lumber demand in North America and a weak land market impacted the remaining North American properties. While the housing market has been depressed in North America for the past few years, the effect of that weakened demand impacted valuations in earnest this year. Cambium's North America property valuations were adjusted downward by 9.1% in local currency terms during the period.

Cambium's valuations were not without their bright spots. The second half of the year saw the Brazilian property valuations increase 6% in local currency terms. The upward trend in valuation was especially pronounced in the first acreage planted in 2008, which was revised upwards 15% in local currency terms. The Company is excited to see the successful establishment and accomplishment of targeted growth more fully reflected in the valuations, as the valuation firms migrate the established acreage from cost accounting that underestimates the value to discounted cash flow analysis that more fully reflects the economic value of the properties. The Company believes that the valuation trend evident in the first planting will spread to the additional established acreage in the succeeding periods.

Besides the efforts to rebalance the portfolio, the Company has also reacted to the negative impact the hedging was having on the portfolio value. Following consultation with shareholders a plan was approved to suspend currency hedging. The cost of the options will not be a drag on performance in the future though the net asset value will be more heavily impacted by foreign exchange movements.

The Board is proposing a final dividend of 3 pence per share.

While the results for the year are disappointing, the Board is confident that the portfolio is positioned to deliver attractive long-term timber returns for investors. Current timber values reflect the new economic reality and the investments are positioned to deliver the targeted returns from their current levels. It is anticipated the value created in the successful establishment of the Brazilian plantations will continue to be reflected in the valuation increases as established acreage is valued based on the value of the timber instead of standardized costs. The Company monitors the share price and remains concerned about the wide discount. With recent land sales there is more balance sheet flexibility for any potential share repurchases.

Donald Adamson

Chairman

3 August 2011

Investment Manager's Report

There were a number of activities that occurred during the period covered by these reports that impacted Cambium's portfolio. In May 2010 we entered into a loan agreement at favorable terms. In November 2010 we reduced our exposure in the United States by selling 14,270 acres of land in East Texas at 97% of net asset value. In February 2011 we closed on the sale of the property in New Zealand at 118% of net asset value. Additionally, in June 2011 we entered into an agreement to sell the remaining 7,270 acres in East Texas. These activities provided needed liquidity to continue the investment program of the Company. We also reduced developed market exposure and shifted more to higher returning geographies notably in Brazil.

Total returns for the year were -11.2%. The majority of the decrease was felt in the first half of the year (-8.9%). Components of return over the year were the performance of the investments at -5.6%, the impact of foreign exchange and hedging at -4.2%, and administrative expenses of -1.5%. While returns in the second half were still negative we did see a broad based stabilization of values across the portfolio. Emerging market returns were as expected while land prices in mature markets continued to decrease. We feel like land prices are accurately portrayed in the appraisals and evidenced by the large transaction we were able to enter into in June 2011 at a premium to net asset value.

The second half of the year saw improvements in the value of the properties in Brazil. This was due to increases in land prices as well as more favorable reflections in value of our young plantations. While our new plantations are still valued at 90% of cost, we saw the one-year-old plantation advance in value by 6.3% and the two-year-old plantation advance 15%. As the land in Brazil becomes a larger component of the portfolio and relatively older it is our view that it will dominate most of the net asset value progression over the next couple of years.

Below is a recap of each of the areas that the Company has investments in.

US South

Approximately 38% of the value of the portfolio is located in North America. When the land sale that was announced on 1 June 2011 closes, the US South will represent 30% of the portfolio. During the period covered by these accounts the US South assets returned -9.1%. About 50% of this decline occurred in the second half of the year. The property values have been impacted by both the poor performance of the building products markets and decreases in underlying land values. It is our view that we are now at a point in which the values of the US assets have stabilized and do not anticipate additional significant declines in valuations.

During the year the US properties contributed $1,667,000 from the harvest of timber and recreational leases. The timber sales were primarily from pulpwood thinning harvests. Additionally we sold 308 acres of non-strategic land in Texas which generated $470,000. This sale generated a price at a premium to the fair value as of 30 April 2010. We also completed the sale of 14,270 acres located in Texas for proceeds of approximately $18,100,000 representing 97% of the 30 April 2010 net asset value.

In June we entered into an agreement to sell the remaining 7,270 acres of land around Corrigan, Texas for $12,500,000. During the weekend of 18-19 June 2011 a portion of the Corrigan plantation was involved in a fire. The "Bearing Fire" was one of the largest in East Texas history and impacted over 20,000 acres. Approximately 3,500 acres were owned by Cambium. Salvage operations are being conducted for stands that were heavily impacted by the fire. After the completion of salvage operations a purchase price adjustment will be made. It is currently anticipated that the adjustment will be in the range of 8-10% of the purchase price and that the transaction will complete in September 2011. After both land sales and the anticipated purchase price adjustment the Corrigan investment will be sold for 105% of the cost basis.

Brazil

The Brazil properties represent 40% of net assets. For the year these assets produced a 4.2% return. The decline we reported in the interim report was more than offset by the gain that we experienced in the second half of the year. As the planted timber continues to grow, biological growth will add value and drive net asset value gains.

The properties in Brazil are being developed to capitalize on the high biological growth rate potential that is inherent in this region. The markets for charcoal have improved since the 2009 downturn and it is anticipated that additional plantations will need to be established to supply future demand. Brazil continues to expand its capacity to produce pulp and paper and is now the fourth largest pulp producer in the world. As with charcoal, additional plantations will need to be established to meet the growing pulp and paper sector demand.

Cambium's ongoing investment in Brazil continues to be high priority and we planted 2.6 million seedlings on 5,950 acres in fiscal year 2011. We now have established 6.4 million seedlings on 14,200 acres which represents 51% of the plantable acres. The remainder of the property will be established over the next two planting seasons. We anticipate that harvest will begin on these properties in 2015. We continue to work on the certification of these properties which we anticipate achieving next year.

Hawaii

The Hawaii properties comprise 10% of the portfolio. These assets produced a -11% return for the year. All of the negative return occurred in the first six months of the year and can be attributed to the write down of the Pahala asset due to the sulfur dioxide emissions from a volcanic vent that began emitting after the asset was acquired. During the second six months of the year the assets produced a positive return and it is our view that this will continue with additional biological growth. We do not anticipate further reductions from the volcanic gas in the future.

The properties in Hawaii are influenced by the wood chip and log export markets in the Pacific Rim. Japan continues to be the world's largest importer of wood chips. China's demand for wood chips in 2010 was more than four times that of 2007. The major supplying countries are Australia, Vietnam, Chile, Indonesia and Thailand. The Hawaii assets are well located to serve these growing end-use markets. The logs from these assets are currently being marketed to a mix of end users including pulp and paper, building products and energy users. As a part of this marketing effort we have containerized some sample logs from the Pahala plantation and in July they were shipped to various end users in China for testing.

Australia/New Zealand

The asset in Australia represents 8% of the Cambium portfolio. The property generated AU$1,850,000 in proceeds from the sale of non-strategic land during the period. The sale was completed at the net asset value as of 30 April 2010. The planting has been completed on this asset and maintenance activities are minimal.

End-use markets for logs and chips into Asia are robust. During the past six months, exports to China and India have increased 70% and 30% respectively. Saw log prices in New Zealand have continued to increase. In Australia, eucalyptus log production was significantly higher than the same quarter last year.

During the period we sold the asset that Cambium held in New Zealand. The sale closed 25 February 2011 and proceeds were approximately NZ$7.8 million. The proceeds equated to 120% of the Company's cost basis.

CP Cogent Asset Management

Investment Manager

3 August 2011

Board of Directors

Donald Lindsay Adamson (aged 52), Independent Non-executive Chairman

Donald Adamson has many 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 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 Chartered Institute for Securities & Investment and Chairman of the Offshore Committee of the Association of Investment Companies.

Martin Willaume Richardson (aged 63), Independent Non-executive Director

Martin Richardson was a partner of the Jersey practice of Rawlinson & Hunter between 1987 and 2009 and continues as a consultant to the firm, 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 1976 to 1981.

Colin Sean McGrady (aged 40), 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 USA and Japan. Colin earned an MBA from Harvard Business School, received a BA in Economics from Brigham Young University and is a Chartered Financial Analyst.

Robert James Rickman (aged 53), Independent Non-executive Director

Robert Rickman is a director of and adviser to a number of forestry and forest industry companies in the UK and internationally. He is a founding partner of the Rockley Group, making and managing technology-based investments worldwide. 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, and during the year was appointed non-executive director of The Schroder Mid Cap Investment Trust Limited, which is listed on the LSE. 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 an MA in Agriculture and Forest Science and an MSc in Forestry and its relation to Land Management from the University of Oxford.

William Taylor Spitz (aged 60), Independent Non-executive Director

William Spitz is a principal and director of Diversified Trust Company and is also 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 University's 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 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.

The Directors present their annual report and the audited consolidated financial statements (the "Financial Statements") of the Group, which comprises Cambium Global Timberland Limited (the "Company") and entities under its control (together the "Group"), for the year ended 30 April 2011.

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 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 has initially targeted 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 Company's 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 year and future developments is contained in the Chairman's Statement and Investment Manager's Report.

Results and dividends

The results of the Group are stated on page 1. The Directors proposed a final dividend of 3 pence per share (2010: 3 pence per share) in respect of the financial year ended 30 April 2011. An ordinary resolution will be put to shareholders at the forthcoming Annual General Meeting ("AGM") on 12 October 2011 to approve the final dividend. It is anticipated that the ex-dividend date will be 10 August 2011 and the record date associated with this dividend will be 12 August 2011. The proposed payment date of the dividend is 20 October subject to shareholder approval.

The Board

The Board currently consists of five Directors. The Chairman is Donald Adamson who is independent of the Investment Manager. Colin McGrady, as the only non-independent Director, stands for re-election every year. The Board considers that, with the exception of Colin McGrady, the Directors are independent of the Investment Manager.

It is required that Directors shall retire and stand for re-election at regular intervals of no more than three-years. Each Director, with the exception of Colin McGrady, is appointed for a three-year term subject to the performance evaluation carried out by the Remuneration Committee each year. The Board will agree whether it is appropriate for a Director to seek an additional term. There is no set notice period and no provision for compensation upon early termination of appointment.

Directors

The Directors of the Company, who held office during the year and at the date of this report, are detailed below:

No Directors resigned during the year.

Directors' interests

The following Directors had interests in the shares of the Company at 30 April 2011:

Colin McGrady is a founding partner of CP Cogent Asset Management LP who acts as Investment Manager.

Substantial shareholdings

Shareholders with holdings of more than 3% of the issued shares of the Company as at 6 July 2011 were as follows:

Corporate governance

As a Jersey incorporated Company and under the AIM Rules for companies, it is not a requirement for the Company to comply with the Combined Code on Corporate Governance published by the Financial Reporting Council (the "2010 FRC Code"). In May 2010 the FRC issued a new edition of the Code which will apply for financial years beginning 29 June 2010 and it is the Company's policy to comply with best practice on good corporate governance that is applicable to investment companies.

The Company has voluntarily chosen to adopt the principles and recommendations of the Association of Investment Companies Code of Corporate Governance (the "AIC Code") by reference to the Association of Investment Companies Corporate Governance Guide for Investment Companies (the "AIC Guide"). A framework of best practice for Jersey domiciled member companies was issued by the Association of Investment Companies ("AIC") in October 2010 and a Statement of Support was given by the Jersey Financial Services Commission ("JFSC") in relation to the adoption of the AIC Code by Jersey domiciled investment companies. The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code and sets out additional principles and recommendations on issues that are of specific relevance to the Company.

Board meetings

The Board meets at least four times a year and between these formal meetings there is regular contact between the Investment Manager, Nominated Advisor, Broker, Administrator, Sub-Administrator, Delegate Company Secretary and Company Secretary. The Directors are kept fully informed of investment and financial controls and other matters that are relevant to the business of the Company. The Directors have access, where necessary in the furtherance of their duties, to independent professional advice at the expense of the Company.

Any matters that should be brought to the Directors' attention are provided in an agenda and all items are considered by the Board and its advisers at the Company's quarterly meetings. Sufficient notice is provided to all the Board members and the Investment Manager prior to any formal meeting. Focus is given to a review of the Company's investment performance, approval of financial statements, approval of borrowings by the Company and its Group, as well as associated matters such as investor relations, industry and market conditions and the overall strategy of the Company. A set of papers containing quarterly reporting is circulated to the Board in advance of the meeting and the Directors may request any agenda items to be added that they consider appropriate for Board discussion. All Directors are able to request relevant financial and regulatory information from its engaged parties and should expect to receive such items within a timely manner. Additionally, each Director is required to inform the Board of any potential or actual conflicts of interest prior to Board discussion.

Contractual agreements are not entered into without full and proper consideration by the Board and their contracts are reviewed on an annual basis by its Remuneration Committee. The remuneration of each appointment is carefully considered in line with the quality and experience of the provider and measured against the work they undertake for the Company.

The Board has agreed investment guidelines with the Investment Manager and the overall strategy and actions of the Company are not without due consideration to these remits. The Board monitors the guidelines in relation to repurchasing of shares and cash management.

The Board considers its share price discount at every Board meeting and will, if thought fit and proper, take action to address any imbalance in the supply and demand for Company shares.

Committees of the Board

Audit Committee

The Board operates an Audit Committee which comprises Donald Adamson, Martin Richardson, Robert Rickman and William Spitz. Martin Richardson serves as Chairman of the Committee. 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 Company's financial performance is properly reported on and monitored. The Committee meets at least twice a year and considers the items below, the list is not exhaustive;

When required the Audit Committee meetings are also attended by the Administrator and the Company's Auditors.

Remuneration Committee

The Board has appointed a Remuneration Committee which comprises all Non-executive Directors. Either Martin Richardson or Donald Adamson act as chair. The Committee operates within defined terms of reference agreed by the Board which are available from the Company Secretary upon request. The Committee meets at least once a year and is responsible for reviewing annually the remuneration of the Directors and reviewing the performance and remuneration of the Investment Manager and other engaged third-party service providers. The Committee met once in March 2011 and the report was approved by the Board of Directors. The main duties of the Committee are outlined below but the list is not exhaustive.

As part of the evaluation process the Board will evaluate its composition and balance. The experience, skills and effectiveness of each Director are also considered before recommendation of their individual re-election.

Details of the skills and experience of the Directors are disclosed in the biography section of the Annual Report and consolidated Financial Statements.

The Chairman leads the performance evaluation of the Board and the Directors lead the evaluation of the Chairman. The Board, as a whole, evaluates its own performance and that of its committees and third party advisers. This evaluation ensures that the Chairman continues to remain independent from the Investment Manager and his integrity and judgment does not conflict with his own interests and those of the shareholders.

Meeting attendance

All members of the Board are expected to attend each Board meeting and to arrange their schedules accordingly, although non-attendance is unavoidable in certain circumstances.

The table below shows the number of meetings held during the year ended 30 April 2011 and the number of Board and committee meetings attended by each Director:

Board responsibilities

The Directors meet at least four times a year to consider, as appropriate, such matters as:

The Board has been continually engaged in a review of the Company's strategy with the Investment Manager and Broker to ensure the employment of appropriate strategies under prevailing market, political and economic conditions at any particular time, within the overall investment restrictions of the Company.

To support the review of the strategy, the Board has focused at Board meetings on a review of individual investments and returns, country exposure, the overall portfolio performance and associated matters such as gearing and pipeline investment opportunities. Additionally a strong focus of attention is given to marketing, investor relations, risk management and compliance, peer group information and industry issues.

These matters are discussed by the Board to clearly demonstrate the seriousness with which the Directors take their fiduciary responsibilities and as an ongoing means of measuring and monitoring the effectiveness of their actions.

The Board has engaged external companies to undertake the investment management, administrative activities of the Company and the production of the annual report and consolidated financial statements, which are independently audited. Clearly documented contractual arrangements are in place between these firms that define the areas where the Board has delegated responsibility to them. Whilst the Board delegates responsibility, it retains accountable for the functions it delegates and is responsible for the systems of internal control.

Relations with shareholders

The Board monitors the trading activity and shareholder profile on a regular basis and places importance on effective communication with shareholders. Both the Broker and Investment Manager maintain dialogue with major shareholders and feedback is reported at least quarterly to the Board. In addition the Company reports formally to shareholders twice a year, by way of the annual report and interim report. All shareholders have the opportunity to attend the AGM of the Company where a Director is present to meet shareholders and answer any questions.

The Board has involvement in reviewing the content of communication to shareholders and the Chairman, from time to time, may meet with major shareholders to listen to their views. Current information is provided to shareholders on an on going basis through the Company's website: www.cambiumfunds.com.

Shareholder sentiment can also be gauged by the careful monitoring of the premium or discount that the Company's shares are traded at in the market when compared to those experienced by similar companies. The Board ensures that shareholders have sufficient information for them to understand the risk/reward balance to which they are exposed by holding the shares.

Internal Controls

The Board is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place for the year under review and up to the date of approval of this annual report and consolidated financial statements. In line with general market practice for investment companies, the Directors do not conduct a formal annual review of the internal controls. However, the Board does conduct an annual review of the financial reporting procedures and corporate governance controls and feels that the procedures employed by the service providers adequately mitigate the risks to which the Company is exposed.

The key procedures which have been established to provide effective internal controls are as follows:

The internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.

Bribery Act

The Bribery Act came into force on 1 July 2011. The Company undertakes third party review of its asset administrators and reviews the reporting on a quarterly basis. The Company will ensure that adequate procedures are in place to prevent acts of bribery by assessing the risks.

Directors' responsibilities with regards to financial reporting

The Directors are responsible for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards. 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 Group and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group 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 Group 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.

Auditor

The auditor of the Company, KPMG Channel Islands Limited, has expressed its willingness to continue in office and a resolution giving authority to reappoint KMPG Channel Islands Limited will be proposed at the forthcoming AGM.

Directors' Remuneration Report

An ordinary resolution for approval of this report will be put to shareholders at the forthcoming AGM.

Policy on Directors' fees

The Board's policy is that the remuneration of the Directors should reflect the experience of each Board member and the Board as a whole. It is ensured that the remuneration of each Director, save for Colin McGrady, reflects their duties, responsibilities and time spent to be fair and comparable to that of similar size funds, with similar regulation and structure. The level of remuneration should be sufficient to retain the Directors to oversee the Company properly and to reflect its specific circumstances. It is intended that this policy will continue for the year ending 30 April 2012 and subsequent years.

Furthermore, the fees for the Directors are determined within limits set out in the Company's Articles of Association. The present limit is the aggregate of £200,000 per annum. The Directors are not eligible for bonuses or incentive schemes. Details of the Directors' remuneration can be found within the annual report and financial statements.

During the year the Directors received the following remuneration in the form of fees from the Company:

Colin McGrady waived his Director's fees for the year (2010: £nil).

Policy on Directors' fees (continued)

The Chairman and Directors have not increased their remuneration since the Company's launch.

The Board has a breadth of experience relevant to the Company and has access to independent professional advice at the Company's expense where they deem it necessary to discharge their responsibility as Directors. The Board, with assistance of its Committees, can identify the need of any new appointments and consideration will be given as to whether a formal induction process is appropriate and if any relevant training needs to be offered for the role. Directors believe that any changes to the Board's composition can be managed without undue disruption.

Directors service contracts

It is the Board's policy that Directors do not hold service contracts but each new Director will be provided with a letter of appointment. The terms of the Directors' appointments provide that Directors should retire and be subject to reappointment at the AGM after their appointment. Directors are obliged to offer themselves for re-election by shareholders at least every three years. Colin McGrady, as a non-independent Director, stands for re-election every year. The Board considers that, with the exception of Colin McGrady, the Directors are independent of the Investment Manager.

The Board will agree whether it is appropriate for a Director to seek an additional term. There is no set notice period and no provision for compensation upon early termination of appointment.

Company performance

The Board is responsible for the Company's investment strategy and performance, although the management of the Company's investment portfolio is delegated to the Manager. An ordinary resolution for approval of the investment strategy of the Company will be put to shareholders for approval at the forthcoming AGM.

On behalf of the Board

Independent Auditor's report to the members of Cambium Global Timberland Limited

We have audited the Group Financial Statements of Cambium Global Timberland Limited (the "Company") together with its subsidaries (the "Group") for the year ended 30 April 2011 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards.

This report is made solely to the Company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page 13, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the Financial Statements

An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the Financial Statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited consolidted Financial Statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on Financial Statements

In our opinion the Financial Statements:

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

Dermot A Dempsey

for and on behalf of KPMG Channel Islands Limited

Chartered Accountants

3 August 2011

Consolidated Statement of Comprehensive Income

For the year ended 30 April 2011

All items in the above statement are derived from continuing operations. All income is attributable to the equity holders of the parent company. There are no minority interests.

The notes form an integral part of these consolidated financial statements.

Consolidated Statement of Financial Position

At 30 April 2011

These financial statements were approved and authorised for issue on 3 August 2011 by the Board of Directors.

The notes form an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Equity

For the year ended 30 April 2011

The notes form an integral part of these consolidated financial statements.

Consolidated Statement of Cash Flows

For the year ended 30 April 2011

The notes form an integral part of these consolidated financial statements.

Notes to the Consolidated Financial Statements

For the year ended 30 April 2011

1 General information

The Company and its subsidiaries, including special purpose vehicles ("SPVs") controlled by the Company (together the "Group"), 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. As at the year end date the Group owned forestry assets located in Australia, Hawaii, Brazil and the southern 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 26 New Street, St Helier, Jersey JE2 3RA.

These Financial Statements were approved and authorised for issue on 3 August 2011 and signed by Martin Richardson and Donald Adamson on behalf of the Board.

The Company has a dual listing on the AIM, a market of the London Stock Exchange, and on the CISX.

2 Basis of preparation

The consolidated financial information included in the Annual Report for the year ended 30 April 2011 has been prepared in accordance with International Financial Reporting Standards ("IFRSs"), issued and adopted by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee. They give a true and fair view and are in compliance with applicable legal and regulatory requirements of the Companies (Jersey) Law 1991.

The consolidated Financial Statements have been prepared in Sterling, which is the presentational currency and functional currency of the Company, and under the historical cost convention, except for investment property, plantations, buildings, intangible assets and certain financial instruments, which are carried either at fair value, fair value less cost to sell or fair value less subsequent accumulated depreciation and subsequent accumulated impairment loss.

The preparation of the consolidated Financial Statements requires Directors to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the consolidated Financial Statements. If in the future such estimates and assumptions, which are based on the Directors' best judgement at the date of the consolidated financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the circumstances change.

In preparing these consolidated Financial Statements, significant judgements, estimates and assuptions are made by management in applying the Group's accounting policies. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated Financial Statements is included in note 4.

New, revised and amended standards

At the date of authorisation of these consolidated Financial Statements, the following standards and interpretations, which have not been applied in these consolidated Financial Statements, were in issue but not yet effective:

In addition the IASB completed its third annual improvements project in May 2010. This project amended a number of existing standards and interpretations effective for accounting periods commencing between 1 July 2010 and 1 January 2011.

The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the Financial Statements of the Group.

The following new standards, amendments and interpretations, none of which has had a material effect on the Group, have been applied for the first time in these Financial Statements.

There are also significant changes in the disclosure requirements of the revised standard. Contingent consideration in an IFRS 3(R) business combination will also now fall within the scope of IAS 39 and be measured initially and subsequently at fair value with remeasured differences being recognised in profit or loss. Changes in value of contingent consideration in a business combination falling with the scope of the old IFRS 3 continue to be treated as adjustments to goodwill.

The revised standard does not require the restatement of previous business combinations and, in consequence, the Group is currently unaffected by the revision.

3. Significant accounting policies

A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out below.

The preparation of financial statements in conformity with IFRS requires the use of critical accounting estimates. It also requires management to exercise its judgement in the process of applying accounting policies. The areas involving high degree of judgement or complexity, or areas where the assumptions and estimates are significant to financial statements are disclosed in note 4.

Basis of consolidation

The consolidated Financial Statements incorporate the Financial Statements of the Company and its subsidiaries, including special purpose entities ("SPEs") controlled by the Company, made up to 30 April 2011. 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.

a) Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated Financial Statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

b) Special purpose entities

The Group has established a number of SPEs for trading and investment purposes. The Group does not have any direct or indirect shareholdings in these entities. An SPE is consolidated if, based on an evaluation of the substance of its relationship with the Group and the SPE's risks and rewards, the Group concludes that it controls the SPE. SPEs controlled by the Group were established under terms that impose strict limitations on the decision-making powers of the SPEs' management and that result in the Group receiving the majority of the benefits related to the SPEs' operations and net assets, being exposed to the majority of risks incident to the SPEs' activities, and retaining the majority of the residual or ownership risks related to the SPEs or their assets.

c) Transactions eliminated on consolidation

When necessary, adjustments are made to the financial statements of subsidiaries and SPEs 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.

Revenue comprises:

a) Sales-harvested timber or right of way

Where revenue is obtained by the sale of harvested timber or right of way, it is recognised when the significant risks and returns have been transferred to the buyer. In the case of harvested timber, this is generally on unconditional exchange. For conditional exchanges, sales are recognised when the conditions are satisfied.

b) Lease income

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.

c) Grant income

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 statement of comprehensive income at fair value.

Finance income and finance costs

Finance income comprises interest income on funds invested and changes in the fair value of financial assets at fair value through profit or loss.

Interest income is accrued on a time basis by reference to the principal outstanding and the effective interest rate applicable.

Finance costs comprise changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and interest on the bank loan.

Foreign currency gains and losses are reported on a net basis.

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 Sterling, which is the Company's functional and presentational currency.

b) Transactions and balances

Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of transactions. At each period end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the year end 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 in other comprehensive income.

c) Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentational currency of the Company are translated into the presentational currency of the Company as follows:

On consolidation, the exchange differences arising from the translation of the net investment in foreign entities are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in other comprehensive income as part of the gain or loss on sale.

Rates are applied at the year ends referred to below to convert to Sterling:

Operating profit/loss

Operating profit or loss includes net gains and losses on revaluation and disposal of investment property and plantations, as increased by revenue less administrative expenses and operating costs and excludes finance costs and income.

Expenses

All expenses are accounted for on an accruals basis and include fees and other expenses paid to the administrators, the Investment Manager and the Directors. Expenses which are incidental to the acquisition of an investment property or plantation are included within the cost of that property and plantation; for example this will include legal fees, stamp duty, founders fees, initial valuation fees and due diligence fees.

Borrowing costs

All borrowing costs are recognised in the statement of comprehensive income using the effective interest method.

Impairment

The carrying amount of the Group's non-financial assets, other than investment property and plantations, buildings, improvements and intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists the asset's recoverable amount is estimated. Any impairment loss is recognised in the statement of comprehensive income 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 asset's carrying amount, after the reversal, does not exceed the amount that has been determined, net of applicable depreciation, if

Taxation

The Company is subject to Jersey corporate tax rate of 0%. 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 (United States), Delaware (United States), Brazil, British Virgin Islands and Hungary.

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 or net loss as reported in the statement of comprehensive income because it excludes items of income and expense that are taxable or deductible in other years or that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted by the reporting date.

Deferred tax is the tax arising on differences on the carrying amounts of assets and liabilities in the consolidated Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the 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 reporting 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 statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Investment property and plantations

a) Investment property

Land is classified as investment property as it is held for capital appreciation. Investment property is recognised as an asset when it is probable that the future economic benefits that are associated with the property will flow to the enterprise and the cost of the property can be reliably measured. Investment property is initially measured at cost, including transaction costs.

Investment property is remeasured at fair value, which is the amount for which the property could be exchanged between knowledgeable, willing parties in an arm's length transaction. The fair values are determined by professional valuations on a six monthly basis. Gains or losses arising from changes in the fair value of investment property are included in the Statement of Comprehensive Income.

b) Plantations

Plantations are recognised as biological assets when the Group controls the asset as a result of past events, it is probable that future economic benefits will flow to the Group and the fair value or cost of the asset can be measured reliably. Plantations are measured on initial recognition and at each reporting date at fair value less cost to sell. Fair value less cost to sell is determined by professional valuers on a six monthly basis. Any changes in fair values are recognised in the Statement of Comprehensive Income. Agricultural produce harvested from plantations are classified as harvested timber. Plantations can be divided in two classifications:

i) Pre-merchantable timber

Agricultural produce that has not matured to an age and class to be sold as harvested product is classified within this asset class. Pre-merchantable timber is carried at fair value less cost to sell. Once the pre-merchantable trees mature they are transferred to merchantable timber at fair value less cost to sell at the time of transfer.

ii) Merchantable timber

Plantations are classified as merchantable timber when they mature to an age that the trees can be traded actively in the markets. This asset class does not include harvested trees. The age at which trees are transferred into this class can differ by type of tree. Currently the majority of trees owned by the Group are transferred at the age of 15 years. Merchantable timber is carried at fair value less cost to sell.

c) Harvested timber

Plantations harvested are measured at fair value less point of sale costs as at the date of harvest and are reclassified to inventory if the harvest has not been sold at date of reporting. Inventory is carried at the lower of the value at which it was transferred or net realisable value.

Buildings, plant and equipment

Buildings and improvements are initially recognised at purchase price plus any directly attributable costs and subsequently revalued to fair value. The fair value of property is determined on a six monthly basis by independent external appraisal. Revaluation gain is recognised in the statement of comprehensive income to the extent that it reverses an impairment loss on the same property previously recognised in the statement of comprehensive income, with any remaining gain recognised in equity through the revaluation reserve. Any revaluation loss is recognised directly in equity through revaluation reserve to the extent of any credit balance existing in the revaluation reserve in respect of that property, with any remaining loss recognised immediately in the statement of comprehensive income.

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 statement of comprehensive income during the financial period in which they are incurred.

Motor vehicles and furniture and fittings are recognised at purchase cost less accumulated depreciation and any recognised impairment losses. Depreciation is provided at the rate of 12.5% per annum on motor vehicles on a diminishing balance basis. Depreciation is provided at the rate of 10% per annum on furniture and fittings on a straight-line basis.

Intangible assets

Intangible assets are recognised if it is probable that the future economic benefits that are attributable to the asset will flow to the Group and the cost of the asset can be measured reliably.

Intangible assets are initially recognised at cost and subsequently measured at fair value. Any resultant gains are recognised in other comprehensive income through the revaluation reserve. Any resultant losses are recognised directly in the statement of comprehensive income unless there have 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 statement of comprehensive income.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position 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 Group's 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 Group's 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 twelve months after the reporting date which 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 Statement of Comprehensive Income.

b) Cash and cash equivalents

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.

c) Financial Assets at fair value through profit or loss

This category comprises only forward foreign currency contracts and currency options. The fair value of forward exchange contracts and currency options are based on their listed market price, if available.

If a listed market price for forward foreign currency contracts 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 or liability at the forward contract rate. The asset or liability is subsequently measured to fair value with the resulting gain or loss being recognised in the statement of comprehensive income as part of net foreign exchange gains/losses.

The foreign currency options are initially recognised at the cost of the premium to acquire the foreign currency option. The asset is subsequently measured to fair value with the resulting gain or loss being recognised in the statement of comprehensive income, as gain or loss on foreign currency options. The fair value of the foreign currency options is based on their listed market price.

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; or when it no longer has control over the asset or a portion of the asset; or when the contractual right to receive cash flows from the asset has expired.

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.

Borrowings are recognised initially at fair value. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Statement of Comprehensive Income over the period of the borrowings on an effective interest basis.

b) De-recognition of financial liabilities

A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expired.

c) Stated capital

Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's ordinary shares are classified as equity instruments. For the purposes of the disclosures given in note 31 the Group considers all its stated capital and all other reserves as equity. The Company is not subject to any externally imposed capital requirements.

d) Effective interest 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.

Dividends

A dividend is recognised as a liability in the Group's Financial Statements in the period in which it becomes an obligation of the Company.

Determination and presentation of operating segments

The Group determines and presents operating segments based on the information that is provided internally to the Board of Directors by the Investment Manager.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results are reviewed regularly by the Board of Directors to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Board of Directors is the Chief Operating Decision Maker ("CODM"). Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The Jersey segment comprises mainly corporate assets and corporate expenses to administrate and register the ultimate holding company.

Segment capital expenditure is the total cost incurred during the period to acquire property, buildings, plant and equipment and intangible assets.

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.

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.

Valuation of investment property and plantations

The Group normally uses the valuation performed by its independent valuers as the fair value of its property and plantations. The valuation is based on assumptions. The valuers also make reference to market evidence of transaction prices for similar transactions (refer to note 16).

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.

Valuation of buildings

The Group normally uses the valuation performed by its independent valuers as the fair value of its buildings. As described in note 18 the valuation is based on assumptions. The valuers also make reference to market evidence of transaction prices for similar transactions.

Fair value of forward foreign currency 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.

Fair value of foreign currency options

The Group estimates fair values of foreign currency options by reference to current market conditions using the results of an appraisal process carried out by the counterparty.

5. Operating segments

The Board of Directors is charged with setting the Company's investment strategy in accordance with the Prospectus. The Board of Directors is the CODM. They have delegated the day to day implementation of this strategy to its Investment Manager but retain responsibility to ensure that adequate resources of the Company are directed in accordance with their decisions. The investment decisions of the Investment Manager are reviewed on a regular basis to ensure compliance with the policies and legal responsibilities of the Board.

The Investment Manager has been given full authority to act on behalf of the Company for transactions of up to 10% of the Group's NAV, including the authority to purchase and sell timberland and other investments on behalf of the Company and to carry out other actions as appropriate to give effect thereto. Whilst the Investment Manager may make the investment decisions on a day to day basis regarding the allocation of funds to different investments, any changes to the investment strategy or major allocation decisions have to be approved by the Board, even though they may be proposed by the Investment Manager.

The Board therefore retains full responsibility as to the major allocations decisions made on an ongoing basis.

The Investment Manager will always act under the terms of the Prospectus which cannot be radically changed without the approval of the Board of Directors and shareholders. Details of the investment restrictions are set out in part 3 of the Admission Document and the Investment Strategy, available on www.cambiumfunds.com.

The Group operates in five distinctly separate geographical locations, which the CODM identified as operating segments and one non-operating segment, Jersey. Timberlands are located in New Zealand, New South Wales (Australia), Texas, north-western Florida and south-western Georgia (United States), Hawaii and Brazil.

The accounting policies of each operating segment are the same as the accounting policies of the Group, as stated in note 3. Therefore no reconciliation was done.

The Group owns nine distinct parcels of land across four main geographical areas.

The Group owns approximately 16,500 acres 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 exposure to potential environmental markets.

The second strategy consists of buying established plantations in the southern United States. Established plantations with a balanced age class distribution are suitable for long and short-term sustainable yield. Marketable products include sawtimber and pulp, which can be sold into healthy forest product markets that exist in this geography. These properties also generate revenue from hunting leases and non-strategic land sales. After a land sale completed during the period since the reporting date, the Group owns 7,270 acres of land in Texas and another 29,100 acres of land spread across Florida and Georgia dedicated to this strategy.

The third investment strategy involves the development of fast-growth eucalyptus plantations to serve either export log markets in Asia or developing markets in Hawaii. The Group has a leasehold interest in two plantations on the Big Island of Hawaii dedicated to this strategy. Pahala consists of 3,350 acres and Pinnacle is approximately another 4,725 acres of maturing eucalyptus trees.

The Group has a fourth investment strategy of converting bare land to eucalyptus plantation for conversion to charcoal to serve pig iron markets or for emerging pulp and paper markets in Brazil. The Group owns one property in Tocantins, Brazil of approximately 25,600 acres and three properties in Minas Gerias, Brazil totalling 29,400 acres dedicated to this strategy. It is anticipated that the eucalyptus will be grown on a rotation length of seven years.

6. Revenue

The lease income is mainly from hunting leases which are for a term of two to three years. The income is recognised in the period it relates to on an accruals basis.

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 (approximately £630,000) 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.

Physical revenue

7. Administrative expenses

Administration of subsidiaries includes statutory fees, accounting fees and administrative expenses in regard to the asset holding subsidiaries.

8. Other operating forestry expenses

9. Finance income

10. Finance costs

11. Net unrealised gains and losses on financial assets and liabilities at fair value through profit and loss

12. Taxation

Taxation on profit on ordinary activities

The Group's tax expense for the year comprises:

* Marginal corporate income taxes in the United States vary between 15% and 35% depending on the size of the profits.

At the year end date the Group has unused tax losses. No deferred tax asset has been recognised in respect these losses due to the unpredictability of future taxable profits.

Tax losses not recognised in the Financial Statements

The value of deferred tax assets not recognised in regard to the operational losses amounted to £3,660,370 (2010: £2,502,268).

Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon:

13 Dividend

14 Basic and diluted loss per share

The calculation of the basic and diluted loss per share is based on the following data:

Number of ordinary shares

Number of ordinary shares for basic and diluted earnings per share:

15. Net asset value

16. Investment property and plantations

No harvested timber was held at the end of the year (30 April 2010: nil).

The land and plantations are carried at their fair value as at 30 April 2010 and 30 April 2011, as measured by external independent valuers American Forest Management Inc., James W. Sewall Company, Pöyry Forest Industry, Timberland Appraisal Services, LLC, Consufor Advisory & Research and Holtz Consultoria LTDA. Each of the valuers uses similar methodologies, though this can vary depending on the type of investment and local practices.

The appraisals for the Corrigan and South Atlantic States properties in the United States were undertaken by American Forest Management Inc. and Timberland Appraisal Services, LLC respectively. These appraisals conform to Uniform Standards of Professional Appraisal Practice in the United States. For these valuations, three valuation approaches were considered: the cost approach; the sales comparison approach; and the income approach. Each approach selected as being applicable and necessary to produce credible results is believed to have been applied appropriately.

The properties in Hawaii, Pahala and Pinnacle, are leasehold interests without any ownership of the underlying land. These investments were valued by James W. Sewall Company in accordance with IFRS. For these valuations the sales comparison approach and the income capitalisation approach were considered. Each approach selected as being applicable and necessary to produce credible results is believed to have been applied appropriately.

Pöyry Forest Industry valued the Tarrangower investment in Australia consistent with the local equivalent of IFRS. There is little comparable transaction evidence to determine the value of land for forestry purposes in the region. Therefore, Pöyry has applied a combination of the cost approach and the income approach to value the assets.

The 3R Tocantins property in Brazil was valued by Holtz Consultoria LTDA. The method applied for the bare land appraisal was the sales comparison approach. The analysis considered the bare land price from comparable transactions, soil quality, topography of the land, access and distance from cities and the proportion of the property which could be used for cultivation. The method applied for valuing the young tree crop is based on the standard costs approach.

The three properties in Minas Gerias were valued by Consufor Advisory & Research by first determining the highest and best use of the subject property. This analysis helps the appraiser identify comparable properties and identify the use that would produce the maximum income to the property. After determining the best use of the subject property, the appraiser analysed the value of the property using the cost approach, the sales comparison approach and the income capitalisation approach.

The asset in New Zealand was sold at the year end so had no carrying value (see note 17).

The discount rates used in these appraisals range in value from 6% to 10% (2010: 6.25% to 10.25%).

The Group is exposed to a number of risks related to its tree plantations:

Regulatory and environmental risks

The Group is subject to laws and regulations in various countries in which it operates. The Group has established environmental policies and procedures aimed at compliance with local environmental and other laws. Management performs regular reviews to identify environmental risks and to ensure that the systems in place are adequate to manage those risks.

Supply and demand risk

The Group is exposed to risks arising from fluctuations in the price and sales volume of trees. When possible the Group manages this risk by aligning its harvest volume to market supply and demand. Management performs regular industry trend analyses to ensure that the Group's pricing structure is in line with the market and to ensure that projected harvest volumes are consistent with the expected demand.

Climate and other risks

The Group's plantations are exposed to the risk of damage from climatic changes, diseases, forest fires and other natural forces. The Group has extensive processes in place aimed at monitoring and mitigating those risks, including regular forest health inspections and industry pest and disease surveys. The Group also insures itself against natural disasters such as floods and hurricanes.

17. Sale of land and plantations

18. Buildings, plant and equipment

The buildings and improvements are carried at their fair value as at 30 April 2011 and 30 April 2010, as measured by external independent valuers Pöyry Forest Industry. The buildings and structural improvements have been valued as part of the land on the sales comparison method. The buildings and structural improvements were physically inspected to verify their condition and valued as an added value to the overall land by reference to direct comparison to sales in the district. The motor vehicles and furniture and fittings are carried at cost less accumulated depreciation. The carrying value should buildings and improvements be depreciated would amount to £110,309 (2010: £355,284) and £16,416 (2010: £62,341) respectively. The motor vehicles and furniture and fittings are carried at cost less accumulated depreciation.

19. Disposal of buildings, plant and equipment

20. Intangible assets

21. Disposal of intangible assets

The Tarrangower property had approximately 4 kilometres of frontage to the Severn River and had 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 11 kilometres further up stream. The licence is renewable on a five year basis and at a small administration cost to the Group.

In the year ended 30 April 2011 this water licence was disposed of along with the property it was related to.

22. Trade and other receivables