Guangzhao Industrial Forest Biotechnology Group LTD Annual Report 2008

Guangzhao Industrial Forest Biotechology Group Limited
Annual Report 2008
nurturing the seeds of opportunities

Annual Report 2008
CONTENTS
Corporate Profile
01
Chairman’s Statement
02
Board of Directors
06
Financial Highlights
09
Corporate Information
10
Corporate Directory
11
Corporate Governance
12
Statistics of Shareholdings
21
Statistics of Warrant holdings
23
Notice of Annual General Meeting
24
Proxy form
27
Report of the Directors And Financial Statements
29
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Annual Report 2008
CORPORATE PROFILE
Based in Shanghai, China, Guangzhao Industrial Forest Biotechnology Group Limited (“Guangzhao”
or “the Group”) is engaged in the tissue culture and propagation of plantlets and saplings, of which
its main product is the Guangzhao Fast-Growing Poplar. This unique poplar is able to grow at twice
the normal rate and can also thrive in conditions where the soil is arid or saline. Currently, its tissue-
cultured poplar is planted in over 18,600 hectares spread across eight provinces in China for eventual
harvest and sale to the pulp or timber industries.
Building upon its successful commercialisation of tissue culture for poplar trees, the Group has
in recent years begun supplying plantlets and saplings of other plant species both within China
and Southeast Asia. These include Jatropha curcas, orchids, tropical fruit such as banana and non-
poplar trees such as the Oriental Fir. Established in 1999, Guangzhao was listed on the Singapore
Exchange in July 2004. The Group’s founders believe that tissue culture of plants will not only yield
commercial rewards for its shareholders and other stakeholders, but will also contribute positively to
environmental preservation.
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Annual Report 2008
CHAIRMAN’S STATEMENT
Dear shareholders carrying value of our biological assets to RMB547.8

On behalf of the Board of Directors (the “Board”) million as at 31 December 2008 from RMB695.8
of Guangzhao, I am pleased to present you our million as at 31 December 2007 to better present a
annual report for the financial year ended 31 fair-value assessment of our biological assets.
December 2008 (“FY2008”).
In view of the changes in fair value, the Group
Year in Retrospect recognised a RMB223.2 million loss attributable
FY2008 was a year of many challenges and to shareholders for FY2008 compared to a profit
achievements for Guangzhao as we continued to of RMB65.8 million in FY2007. Net asset value per
streamline our core operating processes and cost share was 70.0 RMB cents as at 31 December 2008
structure. While we continue compared to 108.2 RMB cents a year ago while
to make headway with the the Group’s net cash and
harvesting of our proprietary “FY2008 was a year bank balances was RMB8.8
fast-growing poplar in million, including RMB7.8
FY2007, the unexpected
of many challenges million pledged to financial
snowstorm in January 2008 and achievements institutions.
coupled with the impact of the
recent global financial crisis on for Guangzhao as we Nevertheless, we continue
wood-related product prices continued to streamline to strive for the benefit
in the second half of FY2008 of our shareholders and I
hampered our harvesting our core operating am pleased to report that
efforts. processes and cost subsequent to the end
of the financial year, we
Despite the obstacles that structure.” have started to harvest our
interrupted the harvesting forestry assets in Shandong
of our standing timber, the Group’s revenue grew Province in February 2009. We expect the revenue
90.1% to RMB21.5 million in FY2008 from RMB11.3 generated from the sales of these harvested trees
million in FY2007, mainly driven by the harvesting to supplement our existing business activities
and sale of our biological assets in Anhui and and contribute positively to the Group’s financial
Hubei provinces during fourth quarter of FY2008. performance in FY2009.
Proceeds from the sale of timber contributed
RMB20.7 million while the sales of tissue-cultured Prospects and Future Plans
banana plantlets, orchids and ornamental plants Guangzhao has consistently leveraged on its
from our nurseries made up the remaining RMB0.8 technical competencies and proprietary patents to
million. develop market-leading, fast-growing renewable
forestry and agricultural resources.
Outside the PRC, although the strong fundamentals
of our operations in Malaysia and Cambodia remain Jatropha Curcas
largely intact, the global uncertainty and credit Testament to the success of our intensive research,
crunch have become a hindrance to our efforts to we have successfully cultivated a strain of high-
pursue new opportunities in these countries. To yield, fast-growing dwarfed Jatropha that can be
reflect the new challenges that we are currently used as a key feedstock for the global biodiesel
facing, we have established an allowance for industry. Possessing higher oil content per seed and
impairment on investment in FY2008. a bioengineered height restriction that will help
reduce harvesting costs, the dwarfed Jatropha plant
While damage to the plantations due to the will help alleviate pressures on the global biodiesel
unprecedented winter storm was limited, we have industry. In recent years the biofuel industry has
made impairment charges of RMB18.9 million to drawn the ire of environmentalists and national
the fair value of our biological assets following a governments for their excessive usage of corn –
detailed damage assessment. Owing to the dual a key food supply – resulting in rising prices and
impact of the January snowstorm and the decline shortages of the commodity.
in wood-related product prices, we restated the
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Annual Report 2008
In May 2008, we initiated large-scale cultivation 25 February 2009, and will continue logging until
of approximately 120,000 Jatropha seedlings at a end–April 2009. The Group also plans to harvest
42-hectare plot in Cambodia. I am pleased to report 40,258 mu (2,684 hectares) of our forest lands
that progress on this widely supported test-plot is from October 2009.
on-track and we will seek additional collaborative
opportunities to maximise the potential of our Latest Development
dwarfed Jatropha plant. We are currently applying On 12 September 2008, Guangzhao voluntarily
for a total of six research patents based on findings suspended the trading of its shares following the
from this Jatropha project. drastic drop in its share price due to rumours of
accounting irregularities and cash flow problems.
Tropical Fruit Plantlets
In addition to our breakthrough achievement in The suspension, which exceeded 14 consecutive
Jatropha research, our tropical fruit joint-venture business days, constituted an event of default under
in Malaysia, Jalur Lipur Sdn. Bhd. (“Jalur”), has the terms of the convertible notes that Guangzhao
also delivered commendable results. By adapting issued to Liberty Harbour LLC (“Liberty Harbour”)
Guangzhao’s tissue-culture technology to banana and thus allowing Liberty Harbour to redeem the
trees, Jalur produced and sold one million fast- convertible notes. The Group is actively negotiating
growing higher-yielding banana plantlets to with Liberty Harbour and will make prompt
Malaysia’s Department of Agriculture in FY2008. announcement after both parties concluded the
We have also promulgated various key initiatives to negotiation.
increase the capacity of our Malaysian operations
in the subsequent periods to capitalise on the Appreciation
overwhelming demand. In October 2008, Mr Ong Han Sim relinquished his
role as an Executive Director of the Group to pursue
Beyond the lucrative sale of banana plantlets, Jalur his personal interests. He is replaced by Mdm Sun
is currently researching other tropical fruits such as Shu Shen who was also appointed as Deputy Chief
papaya and mangosteen at its 4,000-square-metre Executive Officer in December 2008.
greenhouse in Selangor state, Malaysia.
Subsequent to the end of the year, Mr Lew Syn Pau,
Fast-Growing Poplar Mr Ong Kian Min and Dr Yong Wan Hong Jean have
The cultivation and harvesting of our fast-growing respectively relinquished their appointments as
poplars remains the stalwart of the Group’s independent directors within the Group. We would
operation. While harvesting of our poplars was like to take this opportunity to thank all outgoing
halted prematurely due to the January snowstorm directors for their past contributions and wish them
and the strategic decision to retain our forestry every success in their future endeavours. We would
assets in anticipation of higher future prices, the also like to extend a warm welcome to Mdm Sun
Group remains confident of the long-term prospects and look forward to her valued contribution.
of the forestry industry in the PRC.
FY2008 has been a challenging year for the Group.
Prospects I would like to take this opportunity to extend my
In view of the global financial crisis and the appreciation to our valued shareholders, customers,
prospects of slower economic growth in the PRC, business associates and staff for their continued
the central government promulgated a broad support and contributions during this period. As
array of economic stimulus plans such as the fiscal we enter yet another year ahead, I look forward
injection of over RMB4.0 trillion and the easing of to your continued support and the greater heights
rules and regulations governing home ownership that we will scale together.
to spur domestic consumption.
With the projected increase in construction and

housing projects, demand and consequently the Yours sincerely,
prices for wood-related products have witnessed
a gradual recovery. Following the revival of prices Su Min
of wood and wood-related products, we initiated Executive Chairman
new harvesting work at Shandong Province on
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Annual Report 2008
主席致辞
亲爱的股东们: 分），而现金和银行存款为880万元，其中包括抵
押给金融机构的780万元定期存款。
我很荣幸能够代表董事局向大家提呈光兆工业森林
生物科技集团有限公司（“光兆”）2008年的财政虽然如此，我们依然致力提升股东价值。我在此很
年报。高兴地向大家报告光兆已经在2009年2月开始砍伐
并售卖我们在山东省所拥有的林业资产。我们预测
回顾2008 销售这些木材的收益将有助于发展现有业务并改善
2008年对光兆来说是充满挑战和成就的一年。我们 2009年的财务表现。
在这一年里继续简化业务流程和成本架构，并致力
提升股东价值。我们自2007年开始推行的大面积采前景与展望
伐计划由于受到了2008年1月突发的雪灾和全球金光兆一向致力开发先进技术和专利树种, 着重发展
融危机在2008年下半年对木材与木制品价格的冲击领先市场的快速增长再生林业和农业资源。
影响，而提前停工。
小桐子项目
尽管我们的大面积采伐工作遇上了一些阻难，但是经过深入研究，我们成功培育出一个速生并拥有高
我们在2008年第四季度采伐在安徽和湖北两省的林产量的矮化小桐子单系。小桐子是全球生物柴油行
地依然为公司带来可观的收益。光兆的收入因此从业的一个关键原材料。我们的小桐子含油量较高，
2007年的1130万元（人民币，下同）增加了90.1% 而且透过生物工程方式矮化植株，使种植及采摘成
至2008年的2150万元。其中，售卖所砍伐的木材的本大大降低。全球生物柴油行业近年来过度使用玉
收益为2070万元，而其余的80万元是售卖组培香蕉米这一关键粮食来生产生物柴油，导致玉米价格上
苗和花卉的收入。涨和供应短缺，受到了环保人士与各国政府谴责。
运用可取代玉米等粮食的光兆良种小桐子将有助生
在中国境外，虽然我们在马来西亚和柬埔寨的业务物柴油行业发展。
基础稳健，而且大致上保持不变，但是全球经济前
景不明朗和信贷紧缩对我们在这两个区域市场寻求我们在2008年5月开始在柬埔寨一片42公顷的土地
新突破的努力有着一定的影响。为了有效反映我们上种植了12万株小桐子树苗。我很高兴地向大家报
所面对的新挑战，我们在2008年的财务报告里记录告我们在这示范基地上的种植工作进行顺利。在接
了一项投资减损备留金。下来的日子里，我们将会积极寻求合作机会以充分
发挥光兆良种小桐子的潜能。到目前为止，我们已
2008年1月的雪灾并没有严重地破坏光兆的生物资经为光兆的小桐子研究结果申请了六项专利。
产。我们在仔细审核我们受影响的林地后决定纪录
1890万元的减损备留金。鉴于雪灾和木制品价格下热带水果种苗
滑这双重打击，我们在2008年12月31日将光兆的生除了小桐子良种方面的成就，我们在马来西亚的合
物资产公允价格从2007年12月31日的6亿9580万元资公司——Jalur Lipur也取得辉煌的成就。我们通
重报为5亿4780万元以反映公司生物资产的市价。过运用光兆组培速生技术，在2008年成功培植出
100万棵速生兼高产量的香蕉苗，并将这些苗种卖
鉴于生物资产的公允价值变动，股东应占盈利由给马来西亚的政府部门。
2007年的6580万元转为2008年的2亿2320万元亏
损。公司每股净资产为70.0分（2007年：108.2
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Annual Report 2008
同时，我们采取各种重要措施提高我们在马来西亚感言
的产力，以便能够从强劲需求中获益。除了利润丰王汉森先生在2008年10月因为私人因素卸下其执行
厚的香蕉苗生意，Jalur Lipur目前也在位于马来西董事职务。王先生所留下的空缺在同年12月由兼任
亚雪兰莪州的一间4,000平米的温室着手研究如木光兆署理首席执行官的孙淑申女士填补。
瓜与山竹等其它热带水果。
我们的三位独立董事——刘信保先生、王建民先生
速生杨树和杨远方博士在2009年三月各自向董事会呈辞。我
种植和采伐我们的速生杨树依然是光兆的核心业们想借此机会感谢各位离职董事在这几年来对公司
务。虽然我们采伐杨树林的计划因为2008年1月的的付出并衷心祝愿他们前程似锦。同时，我们欢迎
雪灾和近期保留林业资产等待价格回涨的策略而孙女士上任并期待她为公司做出贡献。
中断，可是我们依然对中国林业的长期前景充满信
心。 2008年对光兆来说是充满挑战的一年。我想借此机
会感谢各位股东、客户、生意伙伴与员工在这段日
前景子里给予公司的大力支持及为光兆作出的贡献。在
有鉴于目前的全球金融危机和中国经济增长放缓，我们踏入新的一年的这一刻，我期望大家依然继续
中国中央政府颁布了一系列的经济刺激方案，包括支持光兆，并与我们一起取得更好的成就。
注资4万亿人民币和放宽购房条例等，以刺激国内
消费。
额外的建筑和房屋项目预计已带动中国国内对木材苏敏
的需求，进而使木材价格逐渐回升。随着木材与木主席
制品的价格逐渐回升，我们已在2009年2月25日开
始采伐我们在山东省所拥有的林地并预计采伐工作
将延续到今年4月底。我们更计划在2009年10月开
始砍伐40,258亩（2,684公顷）的木材储备。
近期发展
在2008年9月12日，公司的股票受会计不规范和现
金流问题等谣言影响，导致股价猛挫而停盘。由于
光兆股票停盘超过14个交易日，构成了可转换债
券违约，债权人Liberty Harbour因此可要求光兆
即时偿还可转换债券本金。光兆目前在与Liberty
Harbour商讨此事，并将在与债权人达成协议后通
知各位股东。
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Annual Report 2008
Board Of Directors
Ms Su Min, Executive Chairman experience gained from the management of

Appointed on 1 July 2003, Su Min is one of the several companies. Since the establishment of
founders of our Group. She is responsible for charting Shanghai Guangzhao in April 1999, he has been its
the strategic direction of our Group. Su Min was Chief Executive Officer and, together with Su Min,
instrumental in leading the Group’s technological was instrumental in developing the commercial
development in the biotechnology industry. Since production of our Guangzhao Fast Growing
the establishment of Shanghai Guangzhao in Poplar. Prior to 1999, Song Xuemeng co-founded
April 1999, she has been its Executive Chairman Shanghai Shihua Technology Investment Co., Ltd.
and Chief Technology Officer and, together with (上海世华科技投资有限公司), and was its Chief
Song Xuemeng, was instrumental in developing Executive Officer and Chief Financial Officer from
the commercial production of our Guangzhao 1996 to 2001. From 1998 to 2001, he was also
Fast Growing Poplar. Prior to 1999, together with the Chief Financial Officer of Shanghai Shihua Plant
Song Xuemeng, she co-founded Shanghai Shihua Gene Engineering Co., Ltd (上海世华植物基因工程
Technology Investment Co., Ltd. (上海世华科技投有限公司). Between 1994 to 1996, Song Xuemeng
资有限公司), an investment management company was the General Manager of the Shanghai branch
that also provides investment advisory services and of Heilongjiang Land Resource Development Co. (
was its Chairman from 1996 to 2001. From 1998 to 黑龙江国土资源开发公司上海分公司) where he
2001, Su Min was also the Chairman of Shanghai was responsible for the management of various
Shihua Plant Gene Engineering Co., Ltd (上海世 business projects of the company in Shanghai. Mr
华植物基因工程有限公司), a company involved Song graduated from Beijing University (北京大学)
in the development and provision of plant gene in 1988 with a Bachelor of Arts degree.
engineering technology. Between 1994 to 1996,
Su Min was the Deputy General Manager of the Mdm Sun Shu Shen, Deputy Chief Executive
Shanghai branch of Heilongjiang Land Resource Officer & Executive Director
Development Co. (黑龙江国土资源开发公司上 Mdm Sun Shu Shen was appointed as Executive
海分公司) where she served as deputy general Director and Deputy Chief Executive for the Group
manager involved in business development. on 29 December 2008. She oversees the Group’s
China operations and is in charge of assisting
Ms Su graduated from Zhongshan University (中 the Group to obtain government funding and
山大学) in 1982 with a Bachelor of Arts degree subsidies.
in Literature (中文系文学专业). In 1992, Su Min
obtained a doctorate in Oriental Medicine from Mdm Sun joined the Group as the Chief Executive
the International Martial Arts Medical University, Officer of our subsidiary, Shanghai Guangzhao
California through parttime studies from 1990 Plant Fast Growing Technology Co., Ltd., in June
to 1992. In July 2003, Su Min completed a post- 2008. Prior to 2008, she was the Mayor Assistant of
graduate program in Ethics (Orientation of Tai’an City, Shandong Province, and was in charge
Economic Ethics and Strategic Decision-making) at of the operations of the city’s regulatory bodies for
Fudan University (复旦大学). Finance, Security and Capital Markets. Concurrently,
Mdm Sun was also appointed as Director of Tai’an
Mr Song Xuemeng, Chief Executive Officer City’s Department of Planning and Development.
Appointed on 1 July 2003, and together with In addition to her in-depth understanding of the
Su Min, is one of the founders of the Group. He PRC regulatory policies, Mdm Sun also has vast
oversees the operations, finance and business commercial experience. During her tenure with
development of the Group. Song Xuemeng has the Tai’an City government, she was appointed as
more than ten years of experience in business Deputy Chairman of City Commercial Bank, Vice
management and finance as a result of his Chairman of Pacific Securities Company as well
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Annual Report 2008
as Party Committee Secretary of Tai’an Lurun Co., Mr Ong Han Sim, Finance Director
Ltd. and Sinopec Shandong Taishan Petroleum (Stepped down on 1 October 2008)
Co.,Ltd. Between 1990 and 1996, Mdm Sun was Mr Ong Han Sim was appointed as Finance
the District Party Committee Secretary of Taishan Director on 15 May 2006 and has been our Chief
District, Tai’an City. From 1974 to 1990, Mdm Sun Financial Officer from September 2005. Overseeing
served as Party Committee Secretary of Tai’an City’s the Group’s overall financial management and
Bureau of Textile Industry and Tai’an Woolen textile corporate planning, Mr Ong brings with him a
Factory. wealth of experience in financial management and
risk control. Having held key positions in numerous
Mdm Sun holds a bachelor degree from the Party multi-national companies, Mr Ong was the Group
School of the Central Committee of the Communist Financial Controller for SESDAQ listed Mayfran
Party of China. International Ltd from 2002 and the General
Manager of Jeje Corporatama Pte Ltd from 1997.
Mr Lew Syn Pau, Independent Director He was also the Finance Director of DIT Singapore
(Stepped down on 6 March 2009) Pte Ltd from 1991. Mr Ong graduated from
Appointed on 29 March 2004. Mr Lew is presently Nanyang University, Singapore with Honours in
the Chairman of Stanbridge International Pte Accountancy and has a Post Graduate Diploma in
Ltd, an international executive search firm. He Business and Administration from Brunel University,
was President of the Singapore Manufacturers’ UK. He is a Fellow of the Member of Institute of
Federation from 2002 to 2006. In addition, he Certified Public Accountants of Singapore.
holds directorships in several other public listed
and private companies in Singapore. Between Dr Jean Yong Wan Hong, Independent Director
1988 to 2001, he served as a Member of the (Stepped down on 6 March 2009)
Singapore Parliament and chaired the Government A plant biochemist and eco-physiologist by
Parliamentary Committees for Education, Finance, training, Dr. Jean Yong received his B.Sc. (Hons)
Trade and Industry and National Development. and M.Sc. degrees from the National University
Between 1994 and 1997, Mr Lew was General of Singapore. His Ph.D. was awarded by the
Manager and Senior Country Officer of Banque Research School of Biological Sciences, Australian
Indosuez (now known as Credit Agricole Indosuez). National University. Currently, he is an Assistant
Prior to that, he was the Assistant Secretary-General Professor at National Institute of Education,
of NTUC from 1990 to 1994, and the Managing Nanyang Technological University (NTU). Among
Director of General Automotive Services Pte Ltd his accolades of achievements, he has published
from 1990 to 1993. Between 1987 to 1993, he was his research in a number of scientific journals and
the General Manager and subsequently Managing also contributed to several books. Between 2003
Director of NTUC Comfort. During this period, he and 2004, Dr. Jean Yong was the US Fulbright
was concurrently the General Manager of NTUC Scholar with Brown University, USA where he
Pasir Ris Resort from 1989 to 1991. had the opportunity to be immersed in his other
research interest of climate change science and
Mr Lew is a Colombo Plan scholar and holds a policy issues. On his return to Singapore, Dr.
Masters of Engineering from Cambridge University, Jean Yong continued to contribute his technical
UK and a Masters of Business Administration from and scientific expertise to various governmental
Stanford University, USA. agencies and commercial firms in addition to
his regular research on the biochemistry and
physiology of plant growth regulators (especially
for cytokinins). Pragmatic and yet learned in his
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Annual Report 2008
Board Of Directors
approach towards problem solving, he provides director of Katana Asset Management Pte. Ltd.
effective solutions and academically, inspires In his 19 years’ of legal practice, he focused on
many students under his charge, to follow in corporate and commercial law such as mergers
his footsteps, a passion in pursuing sustainable and acquisitions, joint ventures, restructuring
development, biodiversity conservation, plant and corporate finance. Mr Ong also serves as
industry and climate change science. He has an independent director and chairs most of the
also, recently won the 2006 Nanyang Award for audit committees of several other SGX-ST listed
Teaching Excellence, and the ROAR (Research companies. Mr Ong was awarded the President’s
Outcome Award & Recognition) Award at NTU. Scholarship and Police Force Scholarship in
Within the local context, he firmly believes in the 1979. He holds a Bachelor of Laws (Honours)
restoration of native mangroves in Singapore to external degree from the University of London
yield a natural protection against coastal erosion, and a Bachelor of Science (Honours) Degree from
to provide a means of remediation against the Imperial College of Science and Technology
pollutants and the other chemical contaminants in England. Mr Ong has been a Member of
while conferring a natural solution to sequester Parliament of Singapore since January 1997, and
CO2 using the ubiquitous seawater via mangrove serves as Deputy Chairman of the Government
plant photosynthesis. Regionally, he is evaluating Parliamentary Committee (GPC) for Transport.
various “ecologically-friendlier” bio-fuel plant
species for wide-scale industrial implementation
in order to support the emerging bio-diesel
industry throughout Asia, while at the same time
ensuring the continual preservation of the tropical
rain forests and the adjacent arable lands.
Mr Ong Kian Min, Independent Director

(Stepped down on 6 March 2009)
Mr Ong was last re-elected as an Independent
Director in the Annual General Meeting held on
26th day of April 2008. He was a member of the
Audit Committee, Remuneration Committee and
Nominating Committee. Mr Ong was called to
the Bar of England and Wales in 1988 and to
the Singapore Bar the following year. In addition
to practising as a consultant with Drew & Napier
LLC, a leading Singapore law firm, he is a senior
adviser of Alpha Advisory Pte. Ltd. (a financial
and corporate advisory firm) and an executive
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Annual Report 2008
Financial Highlights
Group
FY2008 FY2007
RMB’000 RMB’000
Revenue
Sales of agricultural products 21,489 11,304
Gains arising from changes in fair value
less estimated point-of-sales costs (138,135) 157,963
Profitability
Operating profit (230,743) 89,919
Profit before income tax (243,870) 82,905
Profit after income tax (223,202) 65,873
Return on assets (%) N.M.1 7.60 %
Return on equity (%) N.M.1 10.38 %
Earnings per ordinary share (RMB cents) - basic (37.97 ) 11.91
Earnings per ordinary share (RMB cents) - diluted (37.97 ) 8.77
Financial Position
Total assets 669,534 866,662
Total debts 258,059 232,297
Shareholders’ equity 411,475 634,365
Debt to equity ratio (times) 0.63 0.37
Net tangible assets per share (RMB cents) 70.0 108.22
Cashflows
Net cash used in operating activities (48,723) (68,094)
Net cash used in investing activities (3,203) (2,492)
Net cash from financing activities 22,814 95,200

1
Explanatory Notes
N.M. - Not Meaningful
9
Annual Report 2008
Corporate information
Board of Directors
SU MIN Executive Chairman
SONG XUEMENG Chief Executive Officer
Sun Shu Shen Deputy Chief Executive Officer & Executive Director
Audit Committee Remuneration Committee

LEW SYN PAU (Chairman) DR JEAN YONG WAN HONG (Chairman)
(Stepped down on 6 March 2009) (Stepped down on 6 March 2009)
DR JEAN YONG WAN HONG LEW SYN PAU
ONG KIAN MIN ONG KIAN MIN
Nominating Committee Company Secretaries

LEW SYN PAU (Chairman) ONG WEI JIN (LLB - Hons)
(Stepped down on 6 March 2009) GOH WEI LIN (LLB - Hons)
DR JEAN YONG WAN HONG
ONG KIAN MIN
Shanghai, P.R. China Office Registered Office

138, Yulu Road, Malu Town 6, Temasek Boulevard #23-06
Jiading District Suntec Tower Four
Shanghai 201801 P.R. China Singapore 038986
Tel: 86-21-6915 6062
Fax: 86-21-6915 6076
中国上海市嘉定区马陆镇育绿路138号，
邮编: 201801
电话: 86-21-6915 6062
传真: 86-21-6915 6076
Share and Warrant Registrar Auditors

Boardroom Corporate & Moore Stephens LLP
Advisory Services Pte Ltd 10 Anson Road #29-15
3 Church Street #08-01 International Plaza
Samsung Hub Singapore 079903
Singapore 049483 Partner-in-charge: Ng Chiou Gee Willy
Tel: 6536 5355 Date of appointment: Since financial year
Fax: 6536 1360 ended 31 December 2008
BankerS
DBS Bank Ltd
United Overseas Bank Ltd
10
Annual Report 2008
Corporate Directory
SINGAPORE CHINA MALAYSIA Cambodia
Guangzhao Industrial Shanghai Guangzhao Plant Jalur Lipur Sdn. Bhd. Guangzhao Biofuel Pte. Ltd.
Forest Biotechology Fast-Growing Technology
Group Limited Co., Ltd.
Shanghai Guangzhao
Forestry Development
Co., Ltd.
Shanghai Shizhao Trading

Co., Ltd.
6, Temasek Boulevard #23-06 138, Yulu Road, Malu Town 82-A, Lorong 5/2, 138, Norodom Boulevard,
Suntec Tower Four Jiading District Oakland Commercial Square Sangkat Tonle Bassac,
Singapore 038986 Shanghai 201801 P.R. China 70200, Seremban, Khan Chamkarmon,
Negeri Sembilan, Malaysia Phnom Penh, Cambodia
Tel: 65-62350255 Tel: 86-21-6915 6062 Tel: 60-6-6012979 Tel: 855-23-228866

Fax: 65-62350705 Fax: 86-21-6915 6076 Fax: 60-6-6012977 Fax: 855-23-227766
Mr Song Xuemeng Mr Song Xuemeng Mr Lai Sead Ping Mr Song Xuemeng

CEO CEO Director CEO
11
Annual Report 2008
CORPORATE GOVERNANCE
Report for the period 1 January 2008 to 31 December 2008
The Board of Directors (the “Board”) of Guangzhao Industrial Forest Biotechnology Group Limited is committed to maintaining a high
standard of corporate governance within the Company and its subsidiaries (the ”Group”) based on which its operations, businesses and
strategies are directed and controlled. Good corporate governance establishes and maintains an ethical environment in the Group, which
strives to enhance the interests of the shareholders of the Company (the “Shareholders”). This report describes the Company’s corporate
governance processes and activities in FY2008 with specific reference to the Code of Corporate Governance 2005 (the “Code”).
Board Matters
Principle 1: The Board’s Conduct of Affairs
At 31 December 2008, the Board comprises six directors, three of whom are executive directors and three of whom are independent
directors. To maintain effective supervision and accountability at each of the Board and management levels, the positions of Chairman and
Chief Executive Officer (“CEO”) are held by two persons.
The Board’s primary role is to protect Shareholders’ interests and enhance long-term Shareholders’ value. To fulfil this role, the Board is
responsible for setting strategic direction of the Group, establishing goals for management and monitoring the achievement of these goals.
Apart from its statutory responsibilities, the principal functions of the Board are:
(a) approving the Group’s key business strategies and financial objectives;
(b) reviewing and approving corporate policies and strategies;
(c) reviewing and approving annual budgets, major funding proposals, investment and divestment proposals;
(d) monitoring management’s performance;
(e) reviewing the adequacy and integrity of the Group’s internal controls, risk management systems and financial reporting systems;
(f) ensuring the Group’s compliance to laws, regulations, policies, directives, guidelines and internal code of conduct;
(g) ensuring accurate, adequate and timely reporting to, and communication with shareholders; and
(h) assuming the responsibility for the satisfactory fulfilment of social responsibilities of the Group.
Matters which are specifically reserved to the full Board for approval are those involving corporate plans and budgets, material acquisitions
and disposals of assets, corporate or financial restructuring, share issuances, dividends and other returns to shareholders, and matters
involving interested person transactions and major undertakings outside the ordinary course of business.
The composition of the Board has a strong independent element, which enables the Board to exercise objective judgment in corporate affairs
independently and, in particular, exercise judgment independent of the executive management. The Board is also of an appropriate size. The
directors who comprise the Board possess, collectively, core competencies in finance, management, industry, strategic planning and customer
management. These factors amount to a Board that is able to effectively lead and control the Company.
Certain functions have been delegated to various Board committees, namely, the Audit Committee, the Nominating Committee and the
Remuneration Committee.
The Board has conducted regular scheduled meetings to approve the Group’s financial results announcement and ad-hoc meetings are also
arranged whenever the need arises. The Company's Articles of Association allow meetings to be conducted both physically and by way of
telephone conferencing or by means of similar communication equipment whereby all persons participating in the meeting are able to hear
each other, provided that the requisite quorum is present.
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Annual Report 2008
In the year under review, the number of Board meetings and Board committee meetings held and attendance of the directors at meetings,
as well as the frequency of such meetings, are as follows:-
Board Audit Remuneration Nominating Committee

Committee Committee
Directors No. of No. of No. of No. of No. of No. of No. of No. of
meetings meetings meetings meetings meetings meetings meetings meetings
held attended held attended held attended held attended
Su Min 4 1 4 0 * 1 0 * 1 0 *
Song Xuemeng 4 4 4 3 * 1 1 * 1 1 *
Lew Syn Pau 4 4 4 4 1 1 1 1
Dr Jean Yong Wan Hong 4 2 4 2 1 0 1 0
Ong Kian Min 4 4 4 4 1 1 1 1
Sun Shu Shen1 N/A N/A N/A N/A N/A N/A N/A N/A
Ong Han Sim2 4 3 4 3 * 1 1 * 1 1 *
Notes:
* By invitation
1. Sun Shu Shen was appointed on 29 December 2008
2. Ong Han Sim resigned on 1 October 2008
All Directors are provided with regular updates on changes in the relevant laws and regulations to enable them to make well-informed
decisions and to ensure that the directors are competent in carrying out their expected role and responsibilities. Where possible and when
an opportunity arises, the Directors will be invited to locations within the Group’s operations to enable them to obtain a better perspective
of the business and enhance their understanding of the Group’s operations.
On directors’ training, the Group has instituted an orientation programme to familarise new directors with the Group’s core business and
governance practice. The programmes are briefed by the Chief Executive Officer on the Group’s history, business operations, policies,
strategic plans and objectives. Directors and senior executives are encouraged to undergo relevant training to enhance their skills and
knowledge, particularly on new laws and regulations affecting the Group’s operations.
Principle 2: Board Composition and Guidance
The Board comprised three Executive Directors and three Independent Directors in 2008. Key information regarding the directors can be found
under the “Board of Directors" section on pages 6, 7 and 8 of this annual report. The Nominating Committee reviews the independence of
each Independent Director annually and adopts the Code’s definition of what constitutes an Independent Director in its review.
The Nominating Committee is of the view that the current Board, with independent directors making up at least one-third of the Board,
has an independent element that sufficiently enables the Board to exercise objective judgment on corporate affairs independently from the
management. The Nominating Committee is also of the view that no individual or small groups of individuals dominate the Board’s decision-
making processes.
The Board is of the view that the size of the current board, is appropriate with reference to the scope and extent of the Group’s operations.
The Board will constantly examine its size with a view to determine its impact upon its effectiveness. The Board also considers that its
composition of non-executive and independent directors provide an effective Board with a combination of core competencies of knowledge,
business contacts and extensive business and commercial experience. This balance is vital in ensuring that the strategies proposed by the
executive management are fully discussed and examined, taking into account the long term interests of the Group.
Principle 3: Chairman and Chief Executive Officer
The roles and responsibilities between the Chairman and the CEO are held by separate individuals. The Chairman, Ms Su Min, and the CEO,
Mr Song Xuemeng, are both Executive Directors of the Group. The Board believes that notwithstanding that the Chairman and the CEO are
both part of the executive management team, the current composition of the Board is able to make objective and prudent judgment on the
Group’s corporate affairs.
The Board is of the view that there are sufficient safeguards and checks to ensure that the process of decision making by the Board is
independent and based on collective decisions without any individual exercising any considerable concentration of power or influence.
Further, the Audit Committee, Remuneration Committee and Nominating Committee are chaired by Independent Directors.
13
Annual Report 2008
Ms Su Min, our Executive Chairman of the Board has several years of experience in agriculture-related biotechnology business. Mr Song
Xuemeng, our CEO is responsible for day-to-day overall management of our Group. There is a clear separation of their roles and responsibilities.
The Chairman leads the Board and is responsible for its workings and proceedings, while the CEO is responsible for implementing the Group’s
strategies and policies and the conduct of its business.
Board Committees
Nominating Committee
Principle 4: Board Membership
The Nominating Committee (“NC”) comprises the following Directors, the majority of whom, including the Chairman of the NC, are
independent from the management. In addition, the Chairman of the NC is not, or not directly associated with, the substantial shareholder
of the Company.
Lew Syn Pau (Chairman)

Dr Jean Yong Wan Hong (Member)
Ong Kian Min (Member)
The NC has adopted specific written terms of reference and is scheduled to meet at least once a year. Its role is to establish a formal and
transparent process for:
(a) reviewing and making recommendations to the Board on all candidates nominated for appointment to the Board;
(b) to decide whether a Director is able to carry out his/her duties adequately especially when he/she has multiple board representations.
(c) reviewing and recommending to the Board on an annual basis, the Board structure, size and composition, taking into account the
balance between Executive and Non-Executive, Independent and Non-Independent Directors and having regard at all times to the
principles of corporate governance and the Code;
(d) procuring that at least one-third of the Board shall comprise Independent Directors;
(e) making recommendations to the Board on the continuation of the services of any Director who has reached the age of 70;
(f) identifying and making recommendations to the Board as to which directors are to retire by rotation and to be put forward for re-
election at each Annual General Meeting (“AGM”) of the Company, having regard to the Directors’ contribution and performance,
including Independent Directors;
(g) determining whether a Director is independent (taking into account the circumstances set out in the Code and other salient factors); and
(h) proposing a set of objective performance criteria to the Board for approval and implementation, to evaluate the effectiveness of the
Board as a whole and the contribution of each Director to the effectiveness of the Board.
We believe that Board renewal must be an on-going process, to ensure good corporate governance and to maintain relevance to the business
as well as the changing needs of the Company. Our Articles of Association require at least one-third of our Directors (excluding the Executive
Chairman) to retire by rotation and subject themselves to re-election by Shareholders at every AGM such that no director stays in office for
more than three years without being re-elected by Shareholders.
The NC had recommended to the Board that Mdm Sun Shu Shen be nominated for re-appointment at the forthcoming AGM. Mdm Sun
Shu Shen, whom has been appointed as an Executive Director on 29 December 2008, will be retired in accordance to Article 117 of the
Company’s Article of Association.
Although the Non-Executive Directors hold directorships in other companies which are not in the Group, the Board is of the view that such
multiple board representations do not hinder them from carrying out their duties as directors. These Directors would widen the experience
of the Board and give it a broader perspective.
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Annual Report 2008
Principle 5: Board Performance
The NC strives to ensure that Directors on the Board possess the experience and knowledge that are critical to the Group’s business, and that
each director brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.
The NC will decide on how the Board’s performance is to be evaluated and propose objective performance criteria subject to the Board’s
approval. The Board will implement a process to be carried out by the NC for assessing the effectiveness of the Board as a whole and for
assessing the contribution by each individual director, taking into consideration attendance at meetings of the Board and Board committees
and the contribution of each individual Director. Each director shall abstain from voting on any resolutions and making any recommendations
and/or participate in any deliberations of the NC in respect of the assessment of his performance or re-nomination as a Director.
Principle 6: Access to Information
To assist the Board in fulfilling its responsibilities, the Board is provided with management reports containing complete, adequate and
timely information, and papers containing relevant background or explanatory information required to support the decision-making process.
The Board is also provided with updates on the relevant new laws, regulations and changing commercial risks in the Group’s operating
environment through regular presentations and meetings. Orientation to the Group’s business strategies and operations is conducted as and
when required.
The Board has separate and independent access to the senior management of the Company and the Company Secretary at all times. The
Company Secretary administer, attend and prepare minutes of Board meetings, and assist the Chairman in ensuring that Board procedures are
followed and reviewed so that the Board functions effectively, and the Company’s Articles of Association and relevant rules and regulations,
including requirements of the Companies Act and Singapore Exchange Securities Trading Limited (SGX-ST), are complied with.
The Board, either individually or as a group, in the furtherance of their duties, has access to independent professional advice, if necessary, at
the Company’s expense.
Remuneration Committee
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure on Remuneration
The function of the Remuneration Committee (“RC”) is to review and recommend the remuneration of the Executive Directors of the
Company and directors’ fees to the Board so as to provide a greater degree of objectivity and transparency in the setting of remuneration.
The RC comprises entirely of Non-Executive Directors, all of whom, including the Chairman, are independent:-
Dr Jean Yong Wan Hong (Chairman)

Lew Syn Pau (Member)
The RC is scheduled to meet at least once a year and has adopted specific terms of reference. The RC has access to independent professional
advice, if necessary.
The RC has written terms of reference and is responsible for:
(a) recommending to the Board a framework of remuneration for the Board and the key executives of the Group covering all aspects of
remuneration such as director’s fees, salaries, allowances, bonuses and benefits-in-kind;
(b) proposing to the Board, appropriate and meaningful measures for assessing the performance of the Executive Directors;
(c) determining the specific remuneration package for each Executive Director;
15
Annual Report 2008
(d) considering the eligibility of directors for benefits under long-term incentive schemes; and
(e) considering and recommending to the Board the disclosure of details of the Group’s remuneration policy, level and mix of remuneration
and procedure for setting remuneration and details of the specific remuneration packages of the directors of the Company and key
executives of the Group to those required by law or by the Code.
The RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations,
the RC takes into consideration industry practices and norms in compensation, in addition to the Company’s relative performance to the
industry and the performance of the individual directors. No director will be involved in deciding his own remuneration.
Our executive directors have entered into service agreements with the Company. The service agreement spells out the terms of employment
such as salary and other benefits. The Non-Executive and Independent Directors do not have any service contracts. They are paid a basic
fee and additional fees for serving on any of the Board committees. The directors’ fees for the non-executive and independent directors
are determined by their respective contributions to the Company, taking into account factors such as effort and time spent as well as their
responsibilities on the Board and Board committees.
Directors’ Remuneration
The RC ensures the level of remuneration is appropriate to attract, retain and motivate the directors to run the Company successfully. Our
Executive Directors’ remuneration consists of a salary, allowances and bonuses. A proportion of the remuneration for the Executive Directors
is linked to performance in the form of performance bonus. Directors’ fees for our directors are subject to approval of shareholders at the
AGM of the Company.
The components of the directors’ remuneration for financial year ended 31 December 2008, all of which are within the S$250,000 and below
band, is given below:-
Name of Director Salary and Allowances Performance Bonus Directors’ Fees Total
Su Min 100% – – 100%
Song Xuemeng 100% – – 100%
Lew Syn Pau – – 100% 100%
Dr Jean Yong Wan Hong – – 100% 100%
Ong Han Sim 91% 9% – 100%
Ong Kian Min – – 100% 100%
Sun Shu Shen 100% – – 100%
The number of directors falling within the various remuneration bands are as set out below:-
Remuneration bands FY2008 FY2007

S$500,000 and above 0 0
S$250,000 to below S$500,000 0 1
Below S$250,000 7 4
Total 7 5
Remuneration of Key Employees
The overall wage policies for the employees are linked to performance of the Group as well as the individual and determined by the Board
and the RC. The Board will respond to any queries raised at the AGM pertaining to such policies. Accordingly, it is the opinion of the Board
that there is no necessity for such policies to be approved by the Shareholders.
Details of remuneration paid to the top 5 key executives, in terms of position (who are not directors of the Company) for the financial year
ended 31 December 2008, all of which are within the S$250,000 and below band, is given below:-
Name of Executive Salary and Allowances Bonus Total

Mu Zhong Jiang 97% 3% 100%
Wang De 91% 9% 100%
Bie Zhi Yuan 91% 9% 100%
Bai Bo 100% – 100%
Goh Tcheng Hion 100% – 100%
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Annual Report 2008
The number of top executives falling within the various remuneration bands are as set out below:-
Remuneration bands FY2008 FY2007

S$500,000 and above 0 0
S$250,000 to below S$500,000 0 0
Below S$250,000 5 5
Total 5 5
The Company does not have any employees who are immediate family members of a director, Executive Chairman or the CEO.
The Group has also entered into various letters of employment with all of the executive officers. Their compensation consists of salary, bonus,
performance awards that are dependent on the performance of the Group.
The Company does not have any employee share option schemes.
Audit Committee
Principle 10: Accountability
Principle 11: Audit Committee
The Board is mindful that it is accountable to the Shareholders and strives to ensure that full material information is timely disclosed to
Shareholders in compliance with the statutory requirements and SGX-ST Listing Manual. Price sensitive information is first publicly released,
either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual
reports will be announced or issued within legally prescribed periods.
The Board provides the Shareholders with a detailed and balanced explanation and analysis of the Group’s performance position and
prospects on a quarterly basis. The management provides the Board with appropriately detailed management accounts of the Group’s
performance, position and prospects on a quarterly basis.
In preparing the financial statements, the directors have:
(a) selected suitable accounting policies and applied them consistently;
(b) made judgments and estimates that are reasonable and prudent;
(c) ensured that all applicable accounting standards have been followed; and
(d) prepared financial statements on a going concern basis as the directors have a reasonable expectation, having made enquiries, that the
Group and Company have adequate resources to continue in operational existence for the foreseeable future.
The Audit Committee (“AC”) comprises the following non-executive directors, all of whom including the Chairman, are independent and
majority of whom possess the appropriate accounting experience and/or related financial management expertise:
Lew Syn Pau (Chairman)

Dr Jean Yong Wan Hong (Member)
The AC meets periodically to perform the following functions:
(a) review with the external auditors the audit plan, their evaluation of the system of internal accounting controls, their letter to management
and the management’s response;
(b) review the quarterly and annual financial statements and balance sheet and profit and loss accounts before submission to our Board for
approval, focusing in particular on changes in accounting policies and practices, major risk areas, significant adjustments resulting from
the audit, compliance with accounting standards and compliance with the SGX-ST Listing Manual and any other relevant statutory or
regulatory requirements;
17
Annual Report 2008
(c) review the internal control procedures and ensure co-ordination between the external auditors and our management, and review the
assistance given by our management to the auditors, and discuss problems and concerns, if any, arising from the interim and final
audits, and any matters which the auditors may wish to discuss (in the absence of the management, where necessary);
(d) review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or
regulations, which has or is likely to have a material impact on our Group’s operating results or financial position, and our management’s
response;
(e) consider the appointment or re-appointment of the external auditors and matters relating to the resignation or dismissal of the
auditors;
(f) review interested person transactions (if any) falling within the scope of Chapter 9 of the SGX-ST Listing Manual;
(g) review potential conflicts of interest, if any;
(h) undertake such other reviews and projects as may be requested by the Board and will report to the Board its findings from time to time
on matters arising and requiring the attention of our AC; and
(i) generally undertake such other functions and duties as may be required by the legislation, regulations or the SGX-ST Listing Manual, or
by such amendments as may be made thereto from time to time.
The Board considers that the members of the AC are appropriately qualified to discharge their responsibilities.
The AC has full access to and full co-operation of the management and external auditors. It also has the discretion to invite any director and
executive director to attend its meetings. The AC also has the power to conduct or authorise investigations into any matters within its terms
of reference.
The AC has reviewed the external auditors’ non-audit services and is satisfied that the nature and extent of such services has not prejudiced
the independence and objectivity of the external auditors. The AC recognizes the need to maintain a balance between the independence
and objectivity of the external auditors and the work carried out by the external auditors based on value for money consideration.
The AC has recommended to the Board the re-appointment of Moore Stephens LLP as the Company’s external auditors at the forthcoming AGM.
Principle 12: Internal Controls
The Board is responsible for the overall internal control framework and is fully aware of the need to put in place a system of internal controls
within the Group to safeguard Shareholders’ interests and the Group’s assets, and to manage risks. The Board also acknowledges that no
cost effective internal control system will preclude all errors and irregularities. A system is designed to manage rather than eliminate the risk
of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.
The Board is satisfied that currently there are adequate internal controls in the Company. The Board regularly reviews the effectiveness of all
internal controls, including operational controls.
Principle 13: Internal Audit
The Board recognises and is responsible for maintaining a system of internal control processes to safeguard Shareholders’ investments and
the Group’s business and assets. The Internal Audit Department is independent of the activities it audits. It reports to the AC functionally and
to the management administratively. The Internal Audit Manager manages the internal audit functions and coordinates with the external
accounting firm that perform specific audit assignments as directed by AC. She oversees and carries out the functions of internal audits,
including the running of a stable and timely process of identifying and evaluating business risks, controls over cash flows and preparing
timely reports and communications to the various committees, such as audit matters to the AC and administrative and operational matters
to the Board.
As part of the procedures to ensure adequacy of the internal audit functions, the AC reviews the internal audit’s activities and processes on
a regular basis.
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Annual Report 2008
Communication With Shareholders
Principle 14: Communication with Shareholders
Principle 15: Greater Shareholder Participation
We believe in regular and timely communication with Shareholders as part of our organisation's development to build systems and procedures
that will enable us to compete internationally. The Company places great emphasis on investor relations and strives to maintain a high
standard of transparency and to promote better investor communications. It aims to provide investors with clear, balanced and useful
information, on a timely basis, about the Group’s performance, financial position and prospects.
The Company does not practise selective disclosure. In line with continuous obligations of the Company pursuant to the SGX-ST Listing
Manual and the Companies Act, Cap. 50 of Singapore, the Board’s policy is that all Shareholders should be equally and timely informed of
all major developments that will impact the Company or the Group. Information is communicated to Shareholders on a timely basis through
the SGXNET and the press.
We support the Code’s principle to encourage shareholder participation. Shareholders are encouraged to attend the AGM to ensure a high
level of accountability and to stay informed of the Company’s strategy and goals. Notice of the AGM is despatched to Shareholders, together
with explanatory notes or a circular on items of special business (if necessary), at least 14 clear days before the meeting. The Board welcomes
questions from Shareholders who have an opportunity to raise issues either informally or formally before or at the AGM.
Dealings In Securities
In line with chapter 12, rule 1207(18) of the listing manual, the Company has in place a policy on dealings in securities. The Directors and
employees are prohibited from securities dealings whilst they are in possession of price - sensitive information. The Company issues regular
circulars to its Directors, principal officers and relevant officers who have access to unpublished material price - sensitive information to
remind them of the prohibition and the requirement to report their dealing in shares of the Company.
The Directors and employees are also prohibited from dealing in the securities of the Company during the period commencing two weeks
prior to the announcement of the Company’s financial statements for each of the first three quarters of its financial year and one month
before the announcement of the Company’s financial statements for the full financial year, and ending on the date of the announcement of
the relevant results.
Directors and executives are also expected to observe insider-trading laws at all times even when dealing with securities within the permitted
trading period.
Material Contracts
Save for the interested person transactions and the service agreement between the executive Chairman and CEO and the Company, there
were no material contracts of the Company or its subsidiary involving the interests of any director or controlling shareholder subsisted at the
end of the financial year or have been entered into since the end of the previous financial year.
Risk Management
The Company does not have a Risk Management Committee. However, the Management regularly reviews the Company’s business and
operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The
Management reviews all significant control policies and procedures and highlights all significant matters to the directors and AC.
19
Annual Report 2008
Interested Person Transactions
The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC
and that the transactions are on an arm’s length basis.
The aggregate value of the interested person transactions entered during the financial year under review is as follows:
Name of Interested Person Aggregate value of all interested Aggregate value of all interested
person transactions during the person transactions conducted
financial year under review under shareholders’ mandate
(excluding transactions less than pursuant to Rule 920 (excluding
$100,000 and transactions transactions less than $100,000)
conducted under shareholders’
mandate pursuant to Rule 920)
RMB RMB
Suzhou Shihua Tianlibao Biofertilizer Co. Ltd 6,276,125 0
Sanan Shihua Bio-fertilizer Co. Ltd 1,449,000 0
Su Min and Song Xue Meng 8,325,105 0
The above transactions to Suzhou Shihua Tianlibao Biofertilizer Co. Ltd and Sanan Shihua Bio-fertilizer Co. Ltd. were incurred for the
purchase of fertilizer at arm’s length.
The above transactions to Su Min and Song Xue Meng were payments made on behalf of directors. There were a series of payments made
on behalf of them which had generally been settled within a month. As at 31 December 08, there were no outstanding amounts. For these
payments made on behalf, interest at 3.5% pa were charged and for FY2008, the interest amounted to about RMB 7,000.
20
Annual Report 2008
statistics of shareholdings
As At 19 March 2009
Issued and fully paid-up capital : S$60,019,061

Number of shares issued : 588,082,360
Class of shares : Ordinary shares
Voting rights : One vote per share
Distribution Of Shareholdings
No. of No. of
Size of shareholdings shareholders % shares %
1 - 999 126 4.16 5,134 0.00

1,000 - 10,000 737 24.33 5,248,480 0.89
10,001 - 1,000,000 2,121 70.02 181,725,040 30.90
1,000,001 and above 45 1.49 401,103,706 68.21
Total 3,029 100.00 588,082,360 100.00
Twenty Largest Holders Of Shares
No. Name No. of shares %
1 See Hoy Chan Investment Limited 96,500,000 16.41

2 Dbs Nominees Pte Ltd 35,345,000 6.01
3 United Overseas Bank Nominees Pte Ltd 26,685,000 4.54
4 Cimb-Gk Securities Pte. Ltd. 24,007,033 4.08
5 Raffles Nominees Pte Ltd 17,048,000 2.90
6 Hong Leong Finance Nominees Pte Ltd 16,550,000 2.81
7 Dmg & Partners Securities Pte Ltd 15,810,000 2.69
8 Phillip Securities Pte Ltd 14,877,233 2.53
9 Sbs Nominees Pte Ltd 14,850,000 2.53
10 Uob Kay Hian Pte Ltd 13,809,730 2.35
11 Kim Eng Securities Pte. Ltd. 12,644,045 2.15
12 Ocbc Securities Private Ltd 10,258,705 1.74
13 Oversea-Chinese Bank Nominees Pte Ltd 10,000,000 1.70
14 Rhb Bank Nominees Pte Ltd 10,000,000 1.70
15 Hl Bank Nominees (S) Pte Ltd 8,122,540 1.38
16 Perennial Advisory Pte Ltd 7,993,000 1.36
17 Mayban Nominees (S) Pte Ltd 5,825,010 0.99
18 Dbs Vickers Securities (S) Pte Ltd 4,973,000 0.85
19 Citibank Consumer Nominees Pte Ltd 4,265,005 0.73
20 Tan Boon Liat 4,000,000 0.68

Total 353,563,301 60.13
21
Annual Report 2008
statistics of shareholdings
As At 19 March 2009
Substantial Shareholders
Substantial Shareholders of the Company (as recorded in the Register of Substantial Shareholders) as at 19 March 2009.

No. of Ordinary shares
Name Direct Interest % Indirect Interest %
Su Min (1) 66,496,000 11.31% 20,000,000 3.40%

Song Xuemeng (1) 100,523,460 17.09% 20,000,000 3.40%
See Hoy Chan Investment Limited 96,500,000 16.41% – –
See Hoy Chan Equities Pte Ltd (2) – – 96,500,000 16.41%

Notes:
(1) Su Min and Song Xuemeng are deemed to be interested in the 20,000,000 shares held by Hireach Assets Limited.
(2) See Hoy Chan Equities Pte Ltd is deemed to be interested in the 96,500,000 shares held by See Hoy Chan Investment Limited.
Free Float
As at 19 March 2009, approximately 51.79% of the Issued ordinary shares of the Company was held in the hands of the public (on the basis
of information available to the Company).
Accordingly, the Company has complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.
22
Annual Report 2008
Statistics of warrant holdings

As at 19 March 2009
Distribution Of Warrant Holdings
No. of No. of
Size of warrant holdings warrant holders % warrants %
1 - 999 6 1.59 2,016 0.00

1,000 - 10,000 140 37.14 684,544 0.37
10,001 - 1,000,000 218 57.82 23,196,600 12.40
1,000,001 and above 13 3.45 163,214,784 87.23
Total 377 100.00 187,097,944 100.00
Twenty Largest Warrant Holders
No. of
No. Name warrants %
1 Hireach Assets Limited 89,195,784 47.67

2 See Hoy Chan Investment Limited 35,400,000 18.92
3 Asiacap Management Pte Ltd 7,460,000 3.99
4 Er Sock Lang 4,945,000 2.64
5 Leow Kwee Siew 4,173,000 2.23
6 Oversea-Chinese Bank Nominees Pte Ltd 4,000,000 2.14
7 Perennial Advisory Pte Ltd 3,941,000 2.11
8 Ocbc Securities Private Ltd 3,682,000 1.97
9 Lim & Tan Securities Pte Ltd 3,454,000 1.85
10 Teo Ah Tiak 1,886,000 1.01
11 Sun Wei 1,875,000 1.00
12 Lim Ngern Khee 1,604,000 0.86
13 Dbs Vickers Securities (S) Pte Ltd 1,599,000 0.85
14 Chew Kheng Siang 1,000,000 0.53
15 Cimb-Gk Securities Pte. Ltd. 868,000 0.46
16 Chua Keng Loy 840,000 0.45
17 Tan Jit Seng 834,000 0.45
18 Low Cheng Lum 800,000 0.43
19 Goh Tze Min 710,000 0.38
20 Lim Kok Siong 656,000 0.35
Total 168,922,784 90.29
23
Annual Report 2008
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of Guangzhao Industrial Forest Biotechnology Group Limited will be held
at Grand Park City Hall, 10 Coleman Street, Singapore 179809 (Canning Room, Level 2) on Friday, 24 April 2009 at 9.30 a.m. for the
following purposes:-
As Ordinary Business
1. To receive and, if approved, to adopt the Audited Financial Statements for the financial year ended 31 December 2008 together with
the Directors’ Report and Auditors’ Report thereon. Resolution 1
2. To approve Directors' fees of S$150,000 for the financial year ended 31 December 2008. Resolution 2
3. To re-elect Mdm Sun Shu Shen who is retiring pursuant to Article 117 of the Articles of Association. Resolution 3

4. To re-appoint Messrs Moore Stephens LLP, Certified Public Accountants, as the Company’s Auditors and to authorise the Directors to fix
their remuneration. Resolution 4
5. To transact any other ordinary business which may be properly transacted at an annual general meeting.
Share Issue Mandate
6. THAT pursuant to Section 161 of the Companies Act, Cap. 50 (the “Act”) and the listing rules of the Singapore Exchange Securities
Trading Limited (“SGX-ST”), authority be and is hereby given to the Directors to:
(i) issue shares in the capital of the Company whether by way of bonus issue, rights issue or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively “Instruments”) that might or would require shares to be issued, including
but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into
shares; and/or
(iii) issue additional Instruments convertible into shares arising from adjustments made to the number of Instruments
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may, in their absolute
discretion, deem fit; and (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares
in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of any
Instruments made or granted pursuant to this Resolution):
(A) by way of renounceable rights issues on a pro rata basis to shareholders of the Company ("Renounceable Rights
Issues") shall not exceed 100 percent of the total number of issued shares in the capital of the Company excluding
treasury shares (as calculated in paragraph (3) below); and
(B) otherwise than by way of Renounceable Rights Issues ("Other Shares Issues") shall not exceed 50 percent of the
total number of issued shares in the capital of the Company excluding treasury shares (as calculated in accordance
with paragraph (3) below), of which the aggregate number of shares to be issued other than on a pro rata basis to
shareholders of the Company shall not exceed 20 percent, of the total number of issued shares in the capital of the
Company excluding treasury shares (as calculated in accordance with paragraph (3) below);
(2) the Renounceable Rights Issues and Other Shares Issues shall not, in aggregate, exceed 100 percent of the total number of
issued shares in the capital of the Company excluding treasury shares (as calculated in paragraph (3) below);
24
Annual Report 2008
As Ordinary Business (Cont’d)
Share Issue Mandate (Cont’d)
(3) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate
number of shares that may be issued under paragraphs (1)(A) and (1)(B) above, the percentage of issued shares shall
be based on the total number of issued shares in the capital of the Company excluding treasury shares at the time this
Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of any convertible securities or shares options or vesting of share
awards which are outstanding or subsisting at the time this Resolution is passed; and
(ii) any subsequent bonus issue or consolidation or subdivision of shares;
(4) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual
of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of
Association for the time being of the Company; and
(5) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall continue
in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is the earlier. Resolution 5
Placement of Shares under the Share Issue Mandate at not more than 20% Discount
7. THAT notwithstanding Rule 811 of the Listing Manual, the Directors of the Company be and are hereby authorised to issue shares and/
or Instruments other than on a pro rata basis pursuant to the aforesaid general mandate at a discount not exceeding twenty percent
(20%) to the weighted average price for trades done on the SGX-ST for the full market day on which the placement or subscription
agreement in relation to such shares and/or Instruments is executed, provided that:-
(a) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the
SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for
the time being of the Company; and
(b) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall continue in force
until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting
of the Company is required by law to be held, whichever is the earlier. Resolution 6
By order of the board
ONG WEI JIN

Company Secretary
9 April 2009
Singapore
25
Annual Report 2008
Explanatory Notes
1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A member of the Company, which is a
corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf.
A proxy need not be a member of the Company.
The instrument appointing a proxy must be deposited at the Company’s registered office at 6 Temasek Boulevard, #23-06 Suntec Tower Four, Singapore 038986 at
least 48 hours before the time of the Meeting.
2. If re-elected under Resolution No. 3, Mdm Sun Shu Shen will remain as Deputy Chief Executive Officer and Executive Director of the Company.
3. Resolution No. 5 is to empower the Directors to issue shares in the capital of the Company and to make or grant instruments (such as warrants or debentures)
convertible into shares, and to issue shares in pursuance of such instruments; up to a number not exceeding (i) 100% for Renounceable Rights Issues and (ii) 50%
for Other Shares Issues, of which up to 20% may be issued other than on a pro rata basis to shareholders, provided that the total number of shares which may be
issued pursuant to (i) and (ii) shall not exceed 100% of the issued shares (excluding treasury shares) in the capital of the Company. For the purpose of determining
the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the total number of issued shares (excluding treasury shares)
in the capital of the Company at the time that Resolution No. 5 is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible
securities or share option or vesting of share awards which are outstanding or subsisting at the time that Resolution No. 5 is passed, and (b) any subsequent bonus
issue or consolidation or subdivision of shares.
The authority for undertaking 100% Renounceable Rights Issues is proposed pursuant to the SGX-ST’s news release of 19 February 2009 which introduced further
measures to accelerate and facilitate the fund raising efforts of listed issuers.
4. Resolution No. 6 is to authorise the Directors to issue new shares to subscribers or placees at a discount of not more than 20% to the weighted average price for
trades done on the SGX-ST for the full market day on which the placement or subscription agreement is signed.
The maximum pricing discount of 20% is proposed pursuant to the SGX-ST’s news release of 19 February 2009 which introduced further measures to accelerate
and facilitate the fund raising efforts of listed issuers.
26
Annual Report 2008
PROXY FORM
(Please see notes overleaf before completing this Form)
GUANGZHAO INDUSTRIAL FOREST Important:

BIOTECHNOLOGY GROUP LIMITED 1. For investors who have used their CPF monies to buy Guangzhao Industrial Forest
Biotechnology Group Limited’s shares, this Annual Report is forwarded to them at the
(Incorporated in the Republic of Singapore) request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all
intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit their
requests through their CPF Approved Nominees within the time frame specified. If
they also wish to vote, they must submit their voting instructions to the CPF Approved
Nominees within the time frame specified to enable them to vote on their behalf.
I/We (Name) NRIC/Passport No.
of (Address)
being a member/members of the above-mentioned Company, hereby appoint:-
Name NRIC/Passport No. Proportion of Shareholdings
No. of Shares %
Address
and/or (delete as appropriate)
Name NRIC/Passport No. Proportion of Shareholdings
No. of Shares %
Address
or failing him/her/them, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the
Annual General Meeting (the “Meeting”) of the Company to be held at Grand Park City Hall, 10 Coleman Street, Singapore 179809
(Canning Room, Level 2) on Friday, 24th day of April 2009 at 9.30 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies
to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or
in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting
at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.
(Please indicate your vote “For” or “Against” with a tick [ X ] within the box provided)
No. Resolutions relating to: For Against

Ordinary Business
1. To receive and adopt the Audited Financial Statements, Directors’ Report and Auditors’ Report for the
financial year ended 31 December 2008
2. To approve Directors’ Fees for the financial year ended 31 December 2008.
3. To re-elect Mdm Sun Shu Shen who is retiring under Article 117 of the Articles of Association of the Company.
4. To re-appoint Messrs Moore Stephens LLP as Auditors of the Company and to authorise the Directors to fix
their remuneration.
Special Business
5. To approve Share Issue Mandate
6. To approve placement of shares under the Share Issue Mandate at not more than 20% discount
Dated this day of 2009.

Total number of Shares in: No. of Shares
(a) CDP Register
(b) Register of Members
Signature(s) of Shareholder(s)
or, Common Seal of Corporate Shareholder
Guangzhao Industrial Forest Biotechnology Group Limited
27
Annual Report 2008
Notes:
1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the
Companies Act, Chapter 50), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert
that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you
should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no
number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you.
2. A member of the Company entitled to attend and vote at the Meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his/
her stead.
3. Where a member appoints two proxies, he/she shall specify the percentage of his shares to be represented by each proxy and if no percentage is specified, the first
named proxy shall be deemed to represent 100 per cent of his shareholding and the second named proxy shall be deemed to be an alternate to the first named.
4. A proxy need not be a member of the Company.
5. The instrument appointing a proxy or proxies together with the letter of power of attorney, if any, under which it is signed or a duly certified copy thereof, must be
deposited at the registered office of the Company at 6 Temasek Boulevard, #23-06 Suntec Tower Four, Singapore 038986, not less than 48 hours before the time
appointed for the Meeting.
6. A corporation which is a member may authorise by resolution of its directors or other governing body such a person as it thinks fit to act as its representative at the
Meeting, in accordance with Section 179 of the Companies Act, Chapter 50.
7. Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be for or against the Resolutions as set out in the Notice of Annual General
Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/she/they may think fit, as he/she/they will on any other matter arising at
the Meeting.
8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions
of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies.
9. In the case of a member whose shares are entered against his name in the Depository Register, the Company may reject any instrument appointing a proxy or proxies
lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed
for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
28
Annual Report 2008
REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS

CONTENTS
Report of the Directors

1
Statement by Directors
4
Independent Auditors’ Report
5
Consolidated Income Statement
9
Balance Sheets
10
Consolidated Statements of Changes in Equity
11
Consolidated Cash Flow Statement
12
Notes to the Financial Statements
13
29
GUANGZHAO INDUSTRIAL FOREST BIOTECHNOLOGY GROUP LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 31 DECEMBER 2008
The directors are pleased to present their report to the members together with the consolidated financial
statements of Guangzhao Industrial Forest Biotechnology Limited (the “Company”) and its subsidiaries (the
“Group”) for the financial year ended 31 December 2008 and the balance sheet of the Company as at
31 December 2008.
1 Directors
The directors of the Company in office at the date of this report are as follows:
Su Min
Song Xuemeng
Sun Shu Shen (Appointed on 29 December 2008)
2 Arrangements to Enable Directors to Acquire Shares and Debentures
Except as disclosed in Note 3 of this report, neither at the end of nor at any time during the financial
year was the Company a party to any arrangement whose object is to enable the directors of the
Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or
any other body corporate.
3 Directors’ Interests in Shares and Debentures
The directors of the Company who held office at the end of the financial year had no interests in the
shares, warrants and debentures of the Company and related corporations as recorded in the register
of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act,
Cap. 50 except as follows:
Direct interest Deemed interest
At the At the At At the At the At

beginning of end of 21 January beginning of end of 21 January
Name of director financial year financial year 2009 financial year financial year 2009
The Company
Ordinary shares
Su Min 68,750,000 66,496,000 66,496,000 40,000,000 20,000,000 20,000,000
Song Xuemeng 119,739,460 100,523,460 100,523,460 40,000,000 20,000,000 20,000,000
1
3 Directors’ Interests in Shares and Debentures (cont’d)
Rights issue of warrants to subscribe for ordinary shares in the Company:
Holdings at the Holdings at At

Exercise beginning of the end of 21January
Name of director price Exercise period financial year financial year 2009
Deemed interest
Su Min S$0.07 29 June 2007 - 28 June 2011 89,195,784 89,195,784 89,195,784
Song Xuemeng S$0.07 29 June 2007 - 28 June 2011 89,195,784 89,195,784 89,195,784
4 Directors’ Contractual Benefits
Since the end of the previous financial year, no director has received or become entitled to receive a
benefit by reason of a contract made by the Company or a related corporation with the director or
with a firm of which he is a member, or with a company in which he has a substantial financial
interest, except as disclosed in the financial statements. Certain directors also received remuneration
from related corporations in their capacity as directors and/or executives of those related
corporations.
5 Options Granted
During the financial year, no options to take up unissued shares of the Company or any corporations in
the Group were granted, except as disclosed in Note 8 of this report.
6 Options Exercised
During the financial year, there were no shares of the Company or any corporations in the Group
issued by virtue of the exercise of an option to take up unissued shares.
7 Options Outstanding
At the end of the financial year, there were no unissued shares of the Company or any corporations in
the Group under option, except as disclosed in Note 8 of this report.
8 Rights Issue of Warrants
During the financial year ended 31 December 2006, the Company issued 199,400,944 warrants on
the basis of two warrants for every five existing ordinary shares in the capital of the Company, at an
issue price of S$0.03 each to the shareholders of the Company to subscribe for new ordinary shares
in the capital of the Company. The warrants may be exercised at any time from the date of issue of
the warrants up to the fifth anniversary on the date of the warrants. Each warrant carries the right to
subscribe for one new ordinary share at an exercise price of S$0.07 each.
2
8 Rights Issue of Warrants (cont’d)
During the financial year, the Company issued 1,925,000 (2007: 10,378,000) ordinary shares pursuant
to the exercise of 1,925,000 (2007: 10,378,000) warrants. At the end of the financial year, the number
of outstanding warrants was 187,097,944 (2007: 189,022,944).
9 Audit Committee
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore
Companies Act, the Singapore Exchange Securities Trading Limited (“SGX-ST”) Listing Manual
and the Code of Corporate Governance.
The composition of the Audit Committee and those functions performed by the Audit Committee
during the financial year are disclosed in the Corporate Governance Report.
Subsequent to the financial year end, all the members of the Audit Committee have resigned as
Independent Directors of the Company with effect from 6 March 2009, the reasons for which are
disclosed in the Company’s announcement on the Singapore Exchange Ltd on the same day.
10 Independent Auditors
Moore Stephens was converted to Moore Stephens LLP, a limited liability partnership with effect
from 1 July 2008. Accordingly, Moore Stephens LLP, Certified Public Accountants, have expressed
their willingness to accept re-appointment.
On behalf of the Board of Directors,
Su Min
Executive Chairman
Song Xuemeng
Chief Executive Officer
Singapore
31 March 2009
3
STATEMENT BY DIRECTORS
31 DECEMBER 2008
(a) The directors are of the opinion that the consolidated financial statements of the Group and the
balance sheet of the Company set out on pages 9 to 68 are drawn up so as to give a true and fair
view of the state of affairs of the Group and the Company as at 31 December 2008 and of the results,
changes in equity and cash flows of the Group for the year then ended; and
(b) As mentioned and more fully described in Note 2 to the financial statements, the ability of the
Company and the Group to continue as going concerns is dependent upon:
- the Convertible Noteholder not demanding immediate redemption of the Company’s convertible
note and the successful outcome of the ongoing negotiations with the Convertible Noteholder on
the waiver and revised terms and conditions of the Convertible Note;
- the success of various strategies that management is presently evaluating to improve the
operating performance, financial position and cash flow of the Company and the Group. These
strategies include, inter alia, obtaining alternative sources of finance; and
- the generation of significant positive cash flows from the harvesting of the Group’s biological
assets in 2009 which is stated in the Group’s balance sheet at RMB103,354,000.
Based on the above factors, at the date of this statement, the directors are of the opinion that there are
reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
On behalf of the Board of Directors,
Su Min
Executive Chairman
Song Xuemeng
Chief Executive Officer
Singapore
31 March 2009
4
CONSOLIDATED INCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008
Group
Note 2008 2007
RMB’000 RMB’000
Sales of agricultural products 5 21,489 11,304
(Loss)/Gain arising from changes in fair value

less estimated point-of-sale costs 6 (138,135) 157,963
Interest and other income 7 943 2,469
Expenses
Harvesting costs (15,236) (3,215)
Staff costs 8 (12,075) (10,265)
Depreciation and amortisation expense 9 (4,690) (4,301)
Allowance for impairment loss 10 (4,945) (3)
Research and development costs (3,342) (3,199)
Rental expenses 34 (32,453) (31,283)
Other operating expenses (20,312) (17,823)
Finance costs 11 (13,127) (7,014)
Total expenses (106,180) (77,103)
Share of loss of jointly controlled entity 16 (498) (424)
(Loss)/Profit before income tax 12 (243,870) 82,905
Income tax 13 20,668 (17,032)
(Loss)/Profit for the year (223,202) 65,873
(Loss)/Earnings per share (RMB cents) 14

Basic (37.97) 11.91
Diluted (37.97) 8.77
The accompanying notes form an integral part of the financial statements
9
BALANCE SHEETS
AS AT 31 DECEMBER 2008
Group Company
Note 2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
ASSETS
Non-current Assets
Investment in subsidiaries 15 - - 188,196 194,158
Due from subsidiaries 15 - - 151,352 121,589
Investment in a jointly controlled entity 16 - 1,124 - 1,548
Property, plant and equipment 17 18,766 19,004 597 1,301
Land use rights 18 11,667 12,037 - -
Prepaid lease payments 19 14,460 14,668 - -
Land development costs 20 35,901 36,761 - -
Biological assets 21 444,408 534,145 - -
525,202 617,739 340,145 318,596
Current Assets
Cash and cash equivalents 22 8,848 67,835 8,298 45,233
Financial assets, at fair value
through profit or loss 23 88 1,117 88 1,117
Trade receivables 24 20,516 6,066 - -
Other receivables 25 10,003 10,901 507 1,500
Prepaid lease payments 19 1,395 1,333 - -
Biological assets 21 103,354 161,638 - -
Inventories 26 128 33 - -
144,332 248,923 8,893 47,850
Total Assets 669,534 866,662 349,038 366,446
EQUITY AND LIABILITIES

Share Capital and Reserves
Share capital 27 288,985 288,007 288,985 288,007
Reserves 28 122,490 346,358 3,594 26,719
411,475 634,365 292,579 314,726
Non-current Liabilities
Other payables 29 - 32,441 - -
Finance lease liabilities 30 - 290 - 290
Borrowings 31 - 50,037 - 48,037
Deferred income tax liabilities 32 65,054 85,822 1,096 1,485
65,054 168,590 1,096 49,812
Current Liabilities
Trade and other payables 29 117,978 34,167 7,569 1,728
Staff incentive and welfare fund 33 5,220 5,297 - -
Finance lease liabilities 30 - 80 - 80
Borrowings 31 59,694 14,150 47,594 -
Income tax payable 10,113 10,013 200 100
193,005 63,707 55,363 1,908
Total liabilities 258,059 232,297 56,459 51,720
Total Equity and Liabilities 669,534 866,662 349,038 366,446

10
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Currency
Share Capital General Other translation Accumulated
capital reserve reserve reserve reserve profits/(losses) Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Group
Balance at 1 January 2008 288,007 27,731 9,927 6,697 (44) 302,047 634,365
Loss recognised directly

in equity - currency translation
difference - - - - (373) - (373)
Loss for the year - - - - - (223,202) (223,202)
Total recognised (loss) - - - - (373) (223,202) (223,575)
Issue of shares
- Exercise of rights issue
of warrants 978 (293) - - - - 685
Balance at 31 December 2008 288,985 27,438 9,927 6,697 (417) 78,845 411,475
Balance at 1 January 2007 218,835 29,292 9,927 - - 236,174 494,228
Loss recognised directly

in equity - currency translation
difference - - - - (44) - (44)
Profit for the year - - - - - 65,873 65,873
Total recognised (loss)/gain - - - - (44) 65,873 65,829
Issue of shares
- Convertible note exercised 30,385 - - - - - 30,385
- Placement exercise 35,052 - - - - - 35,052
- Exercise of rights issue
of warrants 5,204 (1,561) - - - - 3,643
Share issue expenses (1,469) - - - - - (1,469)
Equity portion of
convertible note - - - 6,697 - - 6,697
Balance at 31 December 2007 288,007 27,731 9,927 6,697 (44) 302,047 634,365
11
CONSOLIDATED CASH FLOW STATEMENT
Group
2008 2007
RMB’000 RMB’000
Cash Flows from Operating Activities
(Loss)/Profit before income tax (243,870) 82,905
Adjustments for:
Loss/(Gain) arising from changes in fair value less estimated point-of-sale costs 138,135 (157,963)
Fair value loss/(gain) of financial assets, at fair value through profit or loss 142 (49)
Unrealised foreign exchange gain of convertible note (1,389) (1,339)
Depreciation and amortisation expense (Note 9) 4,690 4,301
Amortisation of transaction costs of convertible note 619 150
Allowance for impairment loss (Note 10) 4,945 3
Loss on disposal of property, plant and equipment 241 7
Loss on disposal of financial assets, at fair value through profit or loss 393 -
Dividend income (100) -
Share of loss of jointly controlled entity 498 424
Interest income (411) (1,813)
Interest expense 13,127 7,014
Operating cash flows before working capital changes (82,980) (66,360)
Inventories (95) 378
Trade and other receivables (1,629) (6,808)
Trade and other payables 41,459 7,775
Proceeds from sales of biological assets 6,125 5,239
Purchases of biological assets (11,603) (8,124)
Income tax paid - (194)
Net cash used in operating activities (48,723) (68,094)
Cash Flows from Investing Activities

Investment in a jointly controlled entity (878) (1,548)
Purchases of financial assets, at fair value through profit or loss (3,403) (1,068)
Proceeds from disposal of financial assets, at fair value through profit or loss 3,897 -
Prepaid lease payments (1,234) -
Purchases of property, plant and equipment (2,522) (1,695)
Proceeds from disposal of property, plant and equipment 426 6
Interest received 411 1,813
Dividends received 100 -
Net cash used in investing activities (3,203) (2,492)
Cash Flows from Financing Activities

Net proceeds from issuance of shares 685 67,611
Net proceeds from issuance of convertible note - 57,020
Proceeds from borrowings 30,087 13,250
Repayment of borrowings (34,137) (27,548)
Fixed deposit pledged 29,502 (12,182)
Repayment of finance lease liabilities (370) (34)
Interest paid (2,953) (2,917)
Net cash from financing activities 22,814 95,200
Net effect of exchange rate in consolidating subsidiaries (373) (44)
Net (decrease)/increase in cash and cash equivalents (29,485) 24,570

Cash and cash equivalents at the beginning of the financial year 30,535 5,965
Cash and cash equivalents at the end of the financial year (Note 22) 1,050 30,535
12
NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2008
These notes form an integral part of and should be read in conjunction with the accompanying financial
statements.
1 General
Guangzhao Industrial Forest Biotechnology Group Limited (the “Company”) is a public limited
liability company incorporated and domiciled in Singapore and is listed on the Singapore Exchange
Securities Trading Limited (“SGX-ST”). The Company’s registered office address and principal
place of business is 6 Temasek Boulevard, #23-06 Suntec Tower Four, Singapore 038986.
The principal activity of the Company is that of investment holding. The principal activities of the
subsidiaries are disclosed in Note 15 to the financial statements.
The Board of Directors has authorised the issue of the financial statements in accordance with a
resolution of the directors on 31 March 2009.
2 Going Concern Assumption
(a) The Group incurred a net loss of RMB223,202,000 for the financial year ended
31 December 2008, (2007: net profit of RMB65,873,000), and as of that date, the Group’s
current liabilities exceeded its current assets by RMB48,673,000 (2007: net current assets of
RMB185,216,000). In addition the Group incurred a negative operating cash flow of
RMB48,723,000 (2007: negative RMB68,094,000).
(b) As disclosed in Note 31(a), the Company had on 12 September 2008 requested for a trading
halt of its shares pending the release of an announcement. Subsequently, the Company had
on 18 September 2008 announced that, as at 12 September 2008, the collective equity
interests of the Company’s majority shareholders, namely, Hireach Assets Limited, Mr Song
Xuemeng and Mdm Su Min (collectively the “Majority Shareholders”) have decreased to
approximately 31.8% as a result of involuntary sales by financial institutions of shares held
by the Majority Shareholders. Under the terms of the Subscription Agreement of the
Convertible Note, in the event that the shares of the Company are suspended for a period of
14 consecutive business days or more, such event shall constitute a breach of covenant and
accordingly, the Convertible Noteholder has the right to redeem the Convertible Note
totalling US$8 million (RMB60.141 million) immediately, upon serving a notice to the
Company. The Company duly reported on 2 October 2008 that an event of default had
occurred in respect of its Convertible Note due to a breach of covenant of the Subscription
Agreement with the Convertible Noteholder. Consequently, the Convertible Note became
repayable upon demand and accordingly, in the financial statements, the Convertible Note
have been reclassified to current liabilities as at 31 December 2008.
As at the date of this report, the Convertible Noteholder has not exercised its right to redeem
the Convertible Note. The Company is presently negotiating with the Convertible
Noteholder for a waiver and to revise the terms and conditions of the Convertible Note. It is
presently not possible to determine the eventual outcome of these negotiations.
13
2 Going Concern Assumption (cont’d)
The conditions referred to above indicate the existence of material uncertainties which may cast
significant doubt as to the ability of the Company and the Group to continue as going concerns. The
ability of the Group and the Company to continue as going concerns is therefore dependent upon:
- the Convertible Noteholder not demanding immediate redemption of the Company’s convertible
note and the successful outcome of the ongoing negotiations with the Convertible Noteholder on
the waiver and revised terms and conditions of the Convertible Note;
- the success of various strategies that management is presently evaluating to improve the
operating performance, financial position and cash flow of the Company and the Group. These
strategies include, inter alia, obtaining alternative sources of finance; and
- the generation of significant positive cash flows from the harvesting of the Group’s biological
assets in 2009 which is stated in the Group’s balance sheet at RMB103,354,000.
The financial statements have been prepared on the assumption that the Company and the Group
will continue as going concerns notwithstanding the current economic conditions. This assumption
is premised on future events, the outcome of which is inherently uncertain. In the event the
Company and the Group are unable to continue in operational existence for the foreseeable future,
the Company and the Group may be unable to discharge their liabilities in the normal course of
business and adjustments may have to be made to reflect the situation that assets may need to be
realised other than in the normal course of business and at amounts which could differ significantly
from the amounts at which they are currently recorded in the balance sheets. In addition, the
Company and the Group may have to reclassify certain non-current assets and non-current liabilities
as current assets and current liabilities respectively. No such adjustments have been made to these
financial statements.
3 Significant Accounting Policies
(a) Basis of Preparation
The financial statements, which are expressed in Renminbi (“RMB”), have been prepared in
accordance with the provisions of the Singapore Companies Act, Cap. 50 and Singapore Financial
Reporting Standards (“FRS”). These financial statements have been prepared under the historical
cost convention, except as disclosed in the accounting policies below.
14
3 Significant Accounting Policies (cont’d)
(a) Basis of Preparation (cont’d)
The preparation of financial statements in conformity with FRS requires management to exercise
judgments in the process of applying the Group’s accounting policies. It also requires the use of
certain critical accounting estimates and assumptions that affect the application of accounting
policies and reported amounts of revenue, expenses, assets and liabilities, and the disclosure of
contingent assets and contingent liabilities at the balance sheet date that are not readily apparent
from other sources. Estimates and judgments are continually evaluated and are based on historical
experience and other factors that are considered to be relevant, including expectations of future
events that are believed to be reasonable under the circumstances. However, actual results may
ultimately differ from these estimates.
Critical accounting estimates and assumptions used that are significant to the financial statements
and areas involving a higher degree of judgment or complexity are disclosed in Note 4.
(b) New or Revised FRS
New or Revised FRS and Interpretations to FRS (INT FRS) issued but not yet effective
At the date of authorisation of these financial statements, the Group has not adopted the following
new or revised FRS that have been issued and which are relevant to the Group but not yet effective:
FRS 1 (revised) Presentation of Financial Statements

FRS 23 (revised) Borrowing Costs
FRS 108 Operating Segments
The above FRS will become effective for the Group’s financial statements for the annual period
beginning 1 January 2009.
FRS 1 (revised) requires an entity to present, in a statement of changes in equity, all owner changes
in equity. All non-owner changes in equity (i.e. comprehensive income) are required to be presented
in one statement of comprehensive income or in two statements (a separate income statement and a
statement of comprehensive income). Components of comprehensive income are not permitted to be
presented in the statement of changes in equity. FRS 1 (revised) will not have any impact on the
Group’s financial position or results.
FRS 23 (revised) removes the option to expense borrowing costs and requires an entity to capitalise
borrowing costs directly attributable to the acquisition, construction or production of a qualifying
asset as part of the cost of the asset. The Group’s current accounting policy to capitalise borrowing
costs is consistent with the requirement in the FRS 23 (revised).
FRS 108, which replaces FRS 14 Segment Reporting, requires identification and reporting of
operating segments based on internal report that are regularly reviewed by the Group’s chief
operating decision maker in order to allocate resources to the segment and to assess its performance.
Currently, the Group presents segment information in respect of its business and geographical
segments. Under FRS 108, the Group will present segment information in respect of its operating
segments. FRS 108 would require the restatement of comparatives.
15
(c) Currency Translation
Functional and Foreign Currency
Items included in the financial statements of each entity in the Group are measured using the
currency of the primary economic environment in which the entity operates (“functional currency”).
The consolidated financial statements are presented in Renminbi (RMB), which is the Group’s
functional currency, as it best reflects the economic substance of the underlying events and
circumstances relevant to the Group, and all values are rounded to the nearest thousand (RMB’000)
except when otherwise indicated.
Transactions and Balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into
the functional currency using the exchange rates prevailing at the dates of the transactions. Currency
translation gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except for currency translation differences on net
investment in foreign operations and borrowings and other currency instruments qualifying as net
investment hedges for foreign operations in the financial statements, which are included in the
currency translation reserve within equity in the consolidated financial statements.
Non-monetary items that are measured in terms of historical cost in foreign currencies are translated
using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair
value in foreign currencies are translated using the exchange rates at the date when the fair value
was determined. Currency translation differences on non-monetary items, whereby the gains or
losses are recognised in the income statement, such as equity instruments held at fair value through
profit or loss, are reported as part of the fair value gain or loss. Currency translation differences on
non-monetary items whereby the gains or losses are recognised directly in equity, such as equity
investments classified as financial assets, available-for-sale are included in the fair value reserve.
Translation of Group Entities’ Financial Statements
The results and financial position of all the group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
- Assets and liabilities for each balance sheet presented are translated at the closing rate at the
date of the balance sheet;
- Income and expenses are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated using the exchange rates at the
dates of the transactions); and
- All resulting translation differences are recognised in the currency translation reserve within
equity.
16
(d) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries). Control is achieved where the Company has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. The Company generally has such power when it, directly or indirectly, holds more than
50% of the issued share capital, or controls more than half of the voting power, or controls the
composition of the board of directors.
Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is
measured as the fair value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.
Goodwill arising on acquisitions of subsidiaries is initially measured at cost being the excess of the
cost of the business combination over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities.
The results of subsidiaries acquired or disposed of during the financial year are included from the
effective date of acquisition or up to the effective date of disposal. All significant intra-group
transactions, balances, income and expenses are eliminated on consolidation. Accounting policies of
subsidiaries have been changed when necessary to ensure consistency with the policies adopted by
the Group.
Investment in subsidiaries are stated in the Company’s balance sheet at cost less any accumulated
impairment losses. An assessment of investments in subsidiaries is performed when there is
indication that the asset has been impaired or the impairment losses recognised in the prior years no
longer exist. On disposal of investments in subsidiaries, the difference between net disposal
proceeds and the carrying amount of the investments are taken to the income statement.
(e) Investment in a Jointly Controlled Entity
The Group has an interest in a jointly controlled entity that involves the establishment of a separate
entity in which each venturer has an interest. The Group’s investment in a jointly controlled entity is
accounted for using the equity method of accounting. Investment in a jointly controlled entity in the
consolidated balance sheet includes goodwill (net of any accumulated impairment losses) identified
on acquisition.
Investment in a jointly controlled entity is initially recognised at cost. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued or liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition.
17
(e) Investment in a Jointly Controlled Entity (cont’d)
In applying the equity method of accounting, the Group’s share of its jointly controlled entity’s
post-acquisition profits or losses is recognised in the income statement and its share of post-
acquisition movements in reserves is recognised in equity directly. These post-acquisition
movements are adjusted against the carrying amount of the investment. When the Group’s share of
losses in a jointly controlled entity equals or exceeds its interest in the jointly controlled entity,
including any other unsecured non-current receivables, the Group does not recognise further losses,
unless it has obligations or has made payments on behalf of the jointly controlled entity.
Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to
the extent of the Group’s interest in the jointly controlled entity. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the asset transferred.
(f) Property, Plant and Equipment
Property, plant and equipment are initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses.
Properties under construction-in-progress for production, rental or administrative purposes, or for

purposes not yet determined, are carried at cost less accumulated impairment losses. Cost capitalised
include professional fees and other directly related development expenditure including borrowing
costs incurred in developing the properties. Depreciation of these assets, on the same basis as other
property assets, commences when the assets are ready for their intended use.
Depreciation on property, plant and equipment, other than construction-in-progress, is calculated

using the straight-line method to allocate their depreciable amounts over their estimated useful lives
as follows:
Buildings - 20 years
Plant and machinery - 5 to 8 years
Office equipment - 5 years
Motor vehicles - 5 years
Computers - 5 years
Furniture and fittings - 5 years
Renovation - 5 years
The carrying amounts of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying amounts may not be recoverable.
The residual values, estimated useful lives and depreciation method of property, plant and
equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any
revision are recognised in the income statement when the changes arise.
Fully depreciated assets still in use are retained in the financial statements. On disposal or retirement
of an item of property, plant and equipment, the difference between the net disposal proceeds and its
carrying amount is recognised in the income statement.
18
(g) Land Use Rights
Land use rights are stated at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is charged to income statement to write off the cost of land use rights over the term of
the land use rights using the straight-line method over 20 or 50 years.
(h) Prepaid Lease Payments
Prepaid lease payments is stated at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is charged to income statement to write off the prepaid rental expenses over
the prepaid rental period using the straight-line method over 15 or 20 years.
(i) Land Development Costs
Land development costs are stated at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is charged to income statement to write off the cost of land
development costs over the term of the land lease using the straight-line method over 46 to 47 years.
(j) Intangible Assets
Goodwill on Acquisitions
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of
the net identifiable net assets and contingent liabilities of the acquired subsidiaries and jointly
controlled entity at the date of acquisition.
Goodwill on subsidiaries are recognised separately as intangible assets and carried at cost less
accumulated impairment losses. Goodwill on jointly controlled entity is included in the carrying
amount of the investment.
Gains and losses on the disposal of subsidiaries and jointly controlled entity include the carrying
amount of goodwill relating to the entity sold.
Research and Development Costs
Internally-generated intangible assets are amortised on a straight-line basis over their estimated
useful lives. Where no internally-generated intangible asset can be recognised, development costs
are charged to the income statement in the period in which it is incurred. Research costs are
recognised as an expense when incurred.
An internally-generated intangible asset is recognised only if all of the following conditions are met:
• an asset is created that can be identified (such as software and new processes);
• it is probable that the asset created will generate future economic benefit;
• the entity has the capacity to control the future economic benefits from the asset; and
• the developments cost of the asset can be measured reliably.
19
(k) Impairment of Non-financial Assets
Non-financial assets (excluding goodwill) are tested for impairment whenever there is any objective
evidence or indication that these assets may be impaired. Goodwill is tested for impairment annually
and whenever there is indication that the goodwill may be impaired. Goodwill included in the
carrying amount of an investment in a jointly controlled entity is tested for impairment as part of the
investment, rather than separately. If any such indication exists, the recoverable amount (i.e. the
higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the
amount of impairment loss.
For the purpose of impairment testing of these assets, the recoverable amount is determined on an
individual asset basis unless the asset does not generate cash flows that are largely independent of
those from other assets. If this is the case, the recoverable amount is determined for the cash
generating unit (CGU) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying value, the
carrying value of the asset or CGU is reduced to its recoverable amount. The difference between the
carrying amount and recoverable amount is recognised as an impairment loss in the income
statement, unless the asset is carried at revalued amount, in which case, such impairment loss is
treated as a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a
change in the estimates used to determine the assets’ recoverable amount since the last impairment
loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would have
been determined (net of accumulated amortisation or depreciation) had no impairment loss been
recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognised in the income statement,
unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation
increase. However, to the extent that an impairment loss on the same revalued asset was previously
recognised in the income statement, a reversal of that impairment is also recognised in the income
statement.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the
weighted average method. Net realisable value represents the estimated selling price in the ordinary
course of business less estimated cost of completion and costs necessary to make the sale.
Allowance is made for obsolete or slow-moving inventories.
20
(m) Biological Assets
Biological assets comprise seedlings, grown saplings, timber and Jatropha plantation. Grown
saplings, timber and Jatropha plantation are measured on initial recognition and at each balance sheet
date at their fair value less estimated point-of-sale costs. Any resultant gains or losses arising from
changes in fair value are recognised in the income statement.
Biological assets are recognised when and only when the Group controls the asset as a result of past
events, it is probable that future economic benefits associated with the asset will flow to the Group
and the fair value of the asset can be measured reliably.
If an active market exists for the biological asset, the quoted price in that market is the appropriate
basis for determining the fair value of that asset. Gain or loss arising from changes in fair value less
estimated point-of-sale costs is determined with reference the valuation performed by a professional
independent valuer with reference to the most recent transaction price used by the Group to measure
the fair value of the biological assets at the end of the financial year. Point-of-sale costs include
commission to brokers and dealers, levies by regulatory agencies and commodity exchanges, and
transfer taxes and duties.
If market based prices or values are not available for a biological asset in its present location and
condition, fair value should be estimated on the basis of the present value of expected net cash flows
from the asset, discounted at a current market-based pre-tax rate.
Seedlings are stated at the lower of cost and net realisable value, as there is no active market existing
for seedlings.
(n) Investment in Financial Assets
Management determines the classification of its financial assets at initial recognition and
re-evaluates this designation at every reporting date, with the exception that the designation of
financial assets at fair value through profit or loss is not revocable.
Financial assets are classified as financial assets at fair value through profit or loss if acquired
principally for the purpose of selling in the short term or if so designated by management. Assets in
this category are classified as current assets if they are either held for trading or are expected to be
realised within twelve months after the balance sheet date.
Purchases and sales of financial assets are recognised on trade-date - the date on which the Group
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been transferred and the Group has
transferred substantially all risks and rewards of ownership.
Financial assets at fair value through profit or loss are recognised at fair value. Realised and
unrealised gains and losses arising from the changes in fair value are included in the income
statement in the period in which they arise. The fair values of quoted financial assets are based on
quoted market prices, which are the current bid prices.
21
(o) Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group
becomes a party to the contractual provisions of the instrument. Management determines the
classification of its financial assets and financial liabilities at initial recognition and re-evaluates this
designation at every reporting date, with the exception that the designation of financial assets at fair
value through profit or loss is not revocable.
Trade and Other Receivables
Trade and other receivables, which are normally settled on 30 to 90 days term, including amounts
due from subsidiaries, jointly controlled entity and related party, are initially recognised at fair value,
and subsequently measured at amortised cost using the effective interest method, less allowance for
impairment. Appropriate allowances for estimated irrecoverable amounts are recognised in the
income statement when there is objective evidence that the assets are impaired. The allowance
recognised is measured as the difference between the receivable’s carrying amount and the present
value of estimated future cash flows, discounted at the original effective interest rate computed at
initial recognition.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and at banks or financial institutions, including
fixed deposits which are not pledged, and short-term, highly liquid investments that are readily
convertible to known amounts of cash and that are subject to insignificant risk of changes in value.
Trade and Other Payables
Trade and other payables are initially measured at fair value and are subsequently measured at
amortised cost using the effective interest method.
Equity Instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue
costs.
(p) Borrowings
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs and subsequently carried at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings using the effective
interest method.
22
(p) Borrowings (cont’d)
Convertible Notes
When convertible notes are issued, the total proceeds are allocated to the liability component and the
equity component, which are separately presented on the balance sheet.
The liability component is recognised initially at its fair value, determined using a market interest
rate for equivalent non-convertible notes. It is subsequently carried at amortised cost using the
effective interest method until the liability is extinguished on conversion or redemption of the notes.
The difference between the total proceeds and the liability component is allocated to the conversion
option (equity component), which is presented in equity net of deferred tax effect. The carrying
amount of the conversion option is not adjusted in subsequent periods. When the conversion option
is exercised, its carrying amount will be transferred to share capital. When the conversion option
lapses, its carrying amount will be transferred to accumulated profits.
(q) Leases
Finance Lease Liabilities
Leases where the Group assumes substantially all risks and rewards incidental to ownership of the
leased assets are classified as finance leases.
The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases
are recognised on the balance sheet as property, plant and equipment and borrowings respectively, at
the inception of the leases based on the lower of the fair value of the leased assets and the present
value of the minimum lease payments.
Each lease payment is apportioned between the finance expense and the reduction of the outstanding
lease liability. The finance expense is recognised in the income statement on a basis that reflects a
constant periodic rate of interest on the finance lease liability.
Operating Leases
Leases of office premises and plantations where a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating leases. Payments made under
operating leases are charged to income statement on a straight-line method over the term of the
leases.
(r) Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it
is probable that the Group will be required to settle that obligation. Provisions are measured at the
directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date,
and are discounted to present value where the effect is material.
23
(s) Revenue Recognition
Sales of agricultural products are recognised when goods are delivered and title has passed.
Gain or loss arising on initial recognition of biological assets at fair value less estimated point-of-sale
costs and from subsequent changes in fair value less estimated point-of-sale costs is included in the
income statement in which it arises.
Interest income is recognised on a time-proportion basis interest accrues using the effective interest
method unless collectibility is in doubt.
Rental income from operating leases is recognised on a straight-line method over the term of the
leases.
Dividend income is recognised when the right to receive payment is established.
(t) Borrowing Costs
Borrowing costs directly attributable to the construction of a qualifying asset are capitalised during
the period of time that is required to complete and prepare the asset for its intended use. Other
borrowing costs are recognised on a time-proportion basis in the income statement using the
effective interest method.
(u) Employee Benefits
Defined Contribution Plans
Defined contribution plans are post-employment benefit plans under which the Group pays
contributions to and are recognised as employee compensation expense when they are due.
Employee Leave Entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision
is made for the estimated liability for annual leave as a result of services rendered by employees up
to the balance sheet date.
(v) Income Tax
Income tax expense represents the sum of the income tax currently payable and deferred income tax.
Current income tax for current and prior period is recognised at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates and tax laws that have been enacted and
substantively enacted by the balance sheet date.
24
(v) Income Tax (cont’d)
Deferred income tax is provided using the liability method on all temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred tax assets and liabilities are recognised for all temporary differences, except:
- Where the deferred tax arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction affects
neither the accounting profit nor taxable profit or loss;
- In respect of temporary differences associated with investments in subsidiaries, where the

timing of the reversal of the temporary differences can be controlled by the Group and it is
probable that the temporary differences will not reverse in the foreseeable future; and
- In respect of deductible temporary differences and carry-forward of unutilised tax losses, if

it is not probable that taxable profits will be available against which those deductible
temporary differences and carry-forward of unutilised tax losses can be utilised.
The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
balance sheet date and are recognised to the extent that it has become probable that future taxable
profit will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the balance sheet date.
(w) Reserves
Capital Reserve
Rights issue of warrants has been issued on 29 June 2006 at an issue price of S$0.03 each to the
shareholders of the Company to subscribe for new ordinary shares in the capital of the Company. The
warrants may be exercised at any time from the date of issue of the warrants up to the fifth anniversary
on the date of issue of the warrants. Each warrant carries the right to subscribe for one new ordinary
share at an exercise price of S$0.07 each. Net proceeds from the rights issue of warrants are recorded
in the capital reserve.
25
(w) Reserves (cont’d)
General Reserve
Pursuant to relevant laws and regulations in the People’s Republic of China (“PRC”) and the articles
of association of the subsidiaries, the subsidiaries are required to make appropriation from profit
after income tax as reported in the PRC statutory financial statements, at 10% of such profit after
income tax, to a reserve fund until the balance reaches at least 50% of the registered capital of the
subsidiaries. The reserve fund may be used to make up losses incurred or to increase share capital.
The PRC subsidiaries also make appropriation from profit after income tax to an enterprise
expansion fund. Subject to approval by the relevant government authorities, the enterprise expansion
fund may also be used to increase share capital. The appropriation rate has to be approved by the
board of directors of the subsidiaries.
(x) Segment Information
Segment information is presented in respect of the Group’s business and geographical segments.
The primary format, business segment, is based on the Group’s management and internal reporting
structure.
Segment revenue and expense: Segment sales of agricultural products, gain arising from changes in
fair value less estimated point-of-sale costs and expenses are those reported in the Group’s income
statement that are directly attributable to a segment and the relevant portion of such sales, gains and
expenses that can be allocated on a reasonable basis to a segment.
Segment assets and liabilities: Segment assets include all operating assets used by a segment and
consist principally of operating receivables, inventories and property, plant and equipment, net of
impairment and provisions. Capital expenditure includes the total cost incurred to acquire property,
plant and equipment, and intangible assets directly attributable to the segment. Segment liabilities
include all operating liabilities and consist principally of trade payable and accrued expenses.
4 Critical Accounting Judgements and Key Sources of Estimation Uncertainty
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.
Critical Judgements in Applying the Group’s Accounting Policies
Management makes the following judgements in the process of applying the Group’s accounting
policies. The judgements that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities are discussed below.
26
4 Critical Accounting Judgements and Key Sources of Estimation Uncertainty (cont’d)
Critical Judgements in Applying the Group’s Accounting Policies (cont’d)
Recognition of biological assets for which certificates of forestry ownership not fully obtained
The biological assets located in the PRC are recognised based on settlement of purchase
consideration or lease contracts entered into with third parties.
As at 31 December 2008, out of the total area of the Group’s biological assets located in the PRC
amounting to 279,897 mu (one mu is approximately equivalent to 666.67 square metres), the Group
has only obtained the certificate of forestry ownership amounting to 78,904 mu. The Group has
applied for but not obtained certificates of forestry ownership of the remaining biological assets of
200,993 mu.
Management considered whether it was appropriate to recognise the biological assets, or whether it
was more appropriate to defer recognition until the certificates for the remaining biological assets
were obtained.
In making this judgement, management considered the detailed criteria for the recognition of
biological assets set out in FRS 41 Agriculture, and in particular, whether the Group controls the
biological assets and whether the fair value of the biological assets can be measured reliably. Based
on the settlement of the purchase consideration, the various land lease contracts entered into with
third parties, and a professional independent valuer’s valuation of the fair value of the biological
assets, the directors are satisfied that the Group has control of the biological assets and recognition
of the biological assets is appropriate, in conjunction with the recognition of an appropriate fair
value for the biological assets at the end of the financial year.
Key Sources of Estimation Uncertainty
Management makes key accounting estimates and assumptions concerning the future. 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.
Fair value of biological assets
The Group has recognised a fair value loss of RMB138,135,000 (2007: fair value gain of
RMB 157,963,000) arising from changes in fair value less estimated point-of-sale costs of biological
assets during the financial year.
Grown saplings and timber are measured on initial recognition and at each balance sheet date at their
fair values less estimated point-of-sale costs. For grown saplings, the fair value calculation requires the
Group to estimate appropriate market prices used as reference point in the relevant locations. For
timber, the fair value calculation requires the Group to estimate the volume of timber that can be
harvested from the biological assets and the appropriate market prices to be used as reference point in
the relevant locations.
27
4 Critical Accounting Judgements and Key Sources of Estimation Uncertainty (cont’d)
Key Sources of Estimation Uncertainty (cont’d)
Fair value of biological assets (cont’d)
The fair value of the Jatropha plantation is measured using the discounted cash flow method. The key
assumptions for the discounted cash flow method are those regarding the average lives of plantation,
yield per tree, discount rate, Jatropha seedlings prices and direct costs incurred during the relevant
periods.
Seedlings are stated at the lower of cost and net realisable value, as there is no active market existing
for seedlings. The Group estimated that the net realisable value of seedlings exceeds their cost as at the
end of the financial year.
The quantum of changes in fair value would be different if there are changes to the assumptions made.
A decrease in fair value would increase the loss recognised during the year and decrease the carrying
value of biological assets. The assumptions are discussed in Note 21. As at 31 December 2008, the
carrying value of biological assets amounted to RMB547,762,000 (2007: RMB695,783,000).
Impairment of Non-financial assets
Property, plant and equipment, prepaid lease payments, land use rights and land development costs
are tested for impairment whenever there is any objective evidence or indication that these assets
may be impaired. The Group assesses impairment of these assets whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be recoverable. If any such
indication exists, the recoverable amount (i.e higher of the fair value less cost to sell and value-in-
use) of these assets is estimated to determine the impairment loss. In making this judgement, the
Group evaluates the fair value which is supported by the current price on an active market or net
present value of future cash flows (value-in-use) derived from such assets using cash flow
projections which have been discounted at an appropriate rate. No impairment loss on these assets
has been recognised as at 31 December 2008 and 2007.
Allowance for impairment of receivables
During the current financial year, the Group made an allowance for impairment of trade and other
receivables amounting to RMB3,441,000 (2007: Nil). The Group makes allowances for impairment
of receivables based on an assessment of the recoverability of trade and other receivables.
Allowances are applied to trade and other receivables where events or changes in circumstances
indicate that the balances may not be recoverable. Management analyses historical bad debt,
customer concentrations, customer creditworthiness, current economic trends and changes in
customer payment terms when making a judgement to evaluate the adequacy of the allowance for
impairment of receivables. Where the expectation is different from the original estimate, such
difference will impact the carrying value of trade and other receivables. The carrying amount of the
Group’s trade and other receivables as at 31 December 2008 was RMB30,519,000 (2007:
RMB16,967,000).
28
5 Sales of Agricultural Products
Sales of agricultural products represent the invoiced value of goods sold. All intra-group
transactions are excluded from the revenue of the Group.
Group
2008 2007
RMB’000 RMB’000
Sales of seedlings and grown saplings 844 1,999

Sales of timber 20,645 9,305
Sales of agricultural products (Note 21) 21,489 11,304
6 (Loss)/Gain Arising from Changes in Fair Value Less Estimated Point-of-sale Costs
Group
2008 2007
RMB’000 RMB’000
less estimated point-of-sale costs (Note 21) (138,135) 157,963
7 Interest and Other Income

Group
2008 2007
RMB’000 RMB’000
Interest income earned on bank and fixed deposits 411 1,813

Rental income 5 591
Foreign exchange gain 413 -
Dividend income 100 -
Fair value gain of financial assets,
at fair value through profit or loss - 49
Other income 14 16
943 2,469
29
8 Staff Costs
Group
2008 2007
RMB’000 RMB’000
Salaries, bonuses and fees 10,791 9,133

Defined contribution plans 660 507
Staff short-term benefits 624 625
12,075 10,265
Direct labour costs amounting to RMB1,223,000 (2007: RMB2,202,000) were capitalised to

biological assets as direct costs incurred (Note 21) during the financial year.
Labour costs for harvesting of biological assets during the financial year amounting to
RMB6,124,000 (2007: RMB1,179,000) are included as part of harvesting costs disclosed in the
income statement.
9 Depreciation and Amortisation Expense

Group
2008 2007
RMB’000 RMB’000
Depreciation of property, plant and equipment 2,080 1,738

Amortisation of land use rights 370 370
Amortisation of prepaid lease payments 1,380 1,333
Amortisation of land development costs 860 860
4,690 4,301
10 Allowance for Impairment Loss

Group
2008 2007
RMB’000 RMB’000
Allowance for impairment of investment in 1,504 -

a jointly controlled entity (Note 16)
Allowance for impairment of trade receivables (Note 24) 837 3
Allowance for impairment of other receivables (Note 25) 2,604 -
4,945 3
30
11 Finance Costs
Group
2008 2007
RMB’000 RMB’000
Amortisation of discount on convertible note 2,005 470

Interest expense on
- accrued rental and maintenance fees payable 3,530 3,627
- finance lease liabilities 25 4
- convertible note 6,023 399
- term loans 728 320
- bank borrowings 793 2,178
Others 23 16
13,127 7,014
12 (Loss)/Profit Before Income Tax

Group
2008 2007
RMB’000 RMB’000
This is stated after deducting the following expenses:
Loss on disposal of property, plant and equipment 241 7
Loss on disposal of financial asset, 393 -
at fair value through profit or loss
Fair value loss of financial assets, 142 -
at fair value through profit or loss
Foreign exchange loss - 543
13 Income Tax
Group
2008 2007
RMB’000 RMB’000
Income tax - Singapore
- current year 100 100
- under provision in prior years - 194
100 294
Deferred income tax (Note 32) (20,768) 16,738
(20,668) 17,032
31
13 Income Tax (cont’d)
The income tax expense on (loss)/profit before income tax differs from the amount that would arise
using the Singapore statutory tax rate is explained below:
Group
2008 2007
RMB’000 RMB’000
(Loss)/Profit before income tax (243,870) 82,905
Tax calculated at statutory tax rate of 18% (2007: 18%) (43,897) 14,923
Effect of different tax rates in other countries (13,463) 5,154
Effect of change in tax rate - (86)
Non-allowable items 36,720 957
Tax exemption (28) (4,110)
Under provision in prior years - 194
(20,668) 17,032
In March 2007, the new Enterprise Income Tax (“EIT”) Law, which is effective from 1 January
2008, was adopted in the PRC to unify income tax rates on domestic and foreign enterprises, new
preferential tax policies and tax deduction policies. Income tax rates for domestic and foreign
enterprises are unified and set at 25%. Foreign invested enterprises that are enjoying preferential tax
rates under the previous tax regime are given a five year transitional period, up to financial year
(“FY”) 2012 during which time the tax rate will gradually increase to 25%.
(a) Shanghai Guangzhao Plant Fast Growing Technology Co., Ltd (“SHFG”), a wholly owned
foreign enterprise since 17 August 2001, was subjected to a corporate tax rate of 27%. With
effect from 1 January 2008, under the EIT Law, the corporate tax rate for SHFG is 25%.
In accordance with the EIT Law, enterprises engaged in the business of agricultural produce
including forestry, seedlings and saplings are exempted from PRC income tax. SHFG has
filed for the application, but has not obtained the approval from the tax authority. During the
current financial year, the deferred tax liabilities are recognised based on the applicable
corporate tax rate of 25%.
(b) Shanghai Guangzhao Forestry Development Co., Ltd (“SGFD”) was incorporated on
21 January 2005 in Pudong Zhangjiang district, PRC where the applicable corporate tax rate
is 18% (2007: 18%). SGFD will be entitled to a favourable “five-year tax holiday”, where
the first two years starting from the first profitable year are at a zero tax rate followed by a
three year 50% reduction of the applicable tax rate. Under the EIT Law, the “five-year tax
holiday” will commence from 1 January 2008 for a five year transition period during which
time the tax rate will gradually increase to 25%. SGFD is currently in its second year of Tax
Holiday and is subject to an applicable tax rate of 18%. Its Tax Holiday will expire in
FY2011. During the current financial year, the deferred tax liabilities are recognised based
on the applicable corporate tax rate of 18%.
32
13 Income Tax (cont’d)
(c) Shanghai Shizhao Trading Co., Ltd was incorporated on 30 May 2007 in Huang Pu Jiang
district, PRC where the applicable corporate tax rate is 25%.
(d) Guangzhao Biofuel Pte Ltd was incorporated on 7 December 2007 in Cambodia where the
applicable corporate tax rate is 20%.
14 (Loss)/Earnings Per Share
(a) Basic (loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the Group’s net (loss)/profit for the financial
year attributable to equity holders of the Company by the weighted average number of ordinary
shares outstanding during the financial year.
Group
2008 2007
(Loss)/Profit for the year attributable to equity holders
of the Company (RMB’000) (223,202) 65,873
Weighted average number of ordinary shares 587,767,743 552,955,075
Basic (loss)/earnings per share (RMB cents) (37.97) 11.91
(b) Diluted (loss)/earnings per share

Diluted (loss)/earnings per share is calculated by dividing the (loss)/profit for the financial year
attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding after adjusting for the effects of all dilutive potential ordinary shares during the financial
year.
Group
2008 2007
(Loss)/Profit for the year attributable to equity holders

of the Company (RMB’000) (223,202) 65,873
Amortisation of discount and interest on convertible note 8,028 869
Adjusted (loss)/profit for the year attributable to
equity holders of the Company (215,174) 66,742
Weighted average number of ordinary shares for

basic earnings per share computation 587,767,743 552,955,075
Adjustments for
- unissued ordinary shares under rights issue of warrants 187,412,561 196,453,388
- unissued ordinary shares under convertible note 48,086,667 10,965,854
Adjusted weighted average number of ordinary shares
for basic earnings per share computation 823,266,971 760,374,317
Diluted (loss)/earnings per share (RMB cents) (37.97)* 8.77
* The diluted (loss)/earnings per share is the same as the basic (loss)/earnings per share for the
financial year ended 31 December 2008 as the effect of the conversion of the rights issue of
warrants and convertible note are anti-dilutive.
33
15 Investment in Subsidiaries
Company
2008 2007
RMB’000 RMB’000
Investment in unquoted shares, at cost
Balance at beginning of year 194,158 150,109
Additions during the year 1,311 44,049
Allowance for impairment loss (7,273) -
Balance at end of year 188,196 194,158
Due from subsidiaries – non-trade 154,603 121,589

Less: Allowance for impairment loss (3,251) -
151,352 121,589
The amounts due from subsidiaries are unsecured and are not expected to be repaid within the next
12 months and bear interest at 7% (2007: 7%) per annum. Interest income from subsidiaries
amounted to RMB9,530,000 (2007: RMB6,317,500) for the financial year ended 31 December 2008.
Details of the subsidiaries as at 31 December are as follows:

Effective
Name and country of ownership
incorporation/operation Principal activities interest
2008 2007
% %
Shanghai Guangzhao Planting and selling of 100 100

Plant Fast-Growing seedlings, saplings and
Technology Co., Ltd.(1) timber
PRC
Shanghai Guangzhao Planting and selling of 100 100

Forestry Development seedlings, saplings and timber
Co., Ltd.(1)
PRC
Shanghai Shizhao Trading Importers and exporters, 100 100

Co., Ltd(1) wholesales trade of
PRC agricultural product,
commission agents
Guangzhao Biofuel Pte Ltd(1) Plantation of crops for biofuel 100 100
Cambodia industries, trading of Jatropha
(1)
Audited by Moore Stephens LLP for FRS consolidation purposes
34
15 Investment in Subsidiaries (cont’d)
During the current financial year, the Company increased its cost of investment in Guangzhao Biofuel
Pte Ltd from US$808,750 (RMB5,962,000) to US$1,000,000 (RMB7,273,000). The cost of the
additional investment of RMB1,311,000 were fully paid in cash.
In the previous financial year, the Company increased its cost of investment in Shanghai Guangzhao
Forestry Development Co., Ltd from US$5,000,000 (RMB40,844,000) to US$8,000,000
(RMB63,884,000). The Company also incorporated two new subsidiaries with a cost of investment of
US$2,000,000 (RMB15,047,000) in Shanghai Shizhao Trading Co., Ltd and US$808,750
(RMB5,962,000) in Guangzhao Biofuel Pte Ltd. The total costs of the addition/new investments of
RMB44,049,000 were fully paid in cash.
As at 31 December 2008, the Company has made full allowance for impairment losses of
RMB7,273,000 and RMB3,251,000 in respect of the investment in and amount due from Guangzhao
Biofuel Pte Ltd.
16 Investment in a Jointly Controlled Entity

Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Investment in unquoted shares, at cost
Balance at beginning of year 1,548 - 1,548 -
Additions during the year 878 1,548 878 1,548
Allowance for impairment loss (1,504) - (2,426) -
Share of losses (922) (424) - -
Balance at end of year - 1,124 - 1,548
Name and country of Effective

incorporation/operation Principal activities ownership interest
2008 2007
% %
Jalur Lipur Sdn Bhd (1) Agriculture and Biotech 50 50

Malaysia
(1)
Audited by Moore Stephens, Malaysia, a member of Moore Stephens International Limited
During the current financial year, the Company increased its cost of investment in Jalur Lipur Sdn
Bhd from RM700,000 (RMB1,548,000) to RM1,100,000 (RMB2,426,000). The cost of the
additional investment of RMB878,000 was fully paid in cash. The Company continues to hold 50%
of the effective ownership interest in the jointly controlled entity.
At the date of acquisition on 15 April 2007, the fair value of identifiable net assets at the date of
acquisition amounted to RMB1,109,314, resulting in goodwill on acquisition of RMB438,588,
which has been included in the carrying amount of the investment in the jointly controlled entity.
During the financial year, the jointly controlled entity incurred losses of RMB498,000 (2007:
RMB424,000). The jointly controlled entity has a tax rate of 20% (2007: 20%) as at year end.
35
16 Investment in a Jointly Controlled Entity (cont’d)
The following summarised financial information represents the Group’s 50% share of the jointly
controlled entity:
Group
2008 2007
RMB’000 RMB’000
Assets:
Non-current 186 1,360
Current 272 894
458 2,254
Liabilities:
Current 508 1,568
Net liabilities/assets (50) 686
Income 1,069 413

Expenses (1,567) (837)
Loss for the year (498) (424)
As at 31 December 2008, the Group and the Company has made full allowance for impairment losses
of RMB1,504,000 and RMB2,426,000 for the investment in the jointly controlled entity.
36
NOTES TO THE FINANCIAL STATEMENTS – 31 DECEMBER 2008
17 Property, Plant and Equipment

Construction Plant and Office Motor Furniture
Group in-progress Buildings machinery Equipment vehicles Computers and fittings Renovation Total
2008 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost
Balance at beginning of year 35 19,119 3,182 517 2,570 107 307 199 26,036
Additions 38 194 1,191 42 894 39 43 81 2,522
Disposal - - (33) - (886) (28) - (60) (1,007)
Transfers (73) 73 - - - - - - -
Translation difference - - - - (12) (1) - - (13)
Balance at end of year - 19,386 4,340 559 2,566 117 350 220 27,538
Accumulated depreciation
Balance at beginning of year - 3,949 1,636 312 805 39 175 116 7,032
Charge for the year - 914 505 74 416 33 74 64 2,080
37
Disposals - - (15) - (281) (26) - (18) (340)
Balance at end of year - 4,863 2,126 386 940 46 249 162 8,772
Net carrying amount

Balance at end of year - 14,523 2,214 173 1,626 71 101 58 18,766
2007
Cost
Balance at beginning of year 281 18,561 2,546 421 1,643 97 303 199 24,051
Additions 35 277 719 96 927 41 4 - 2,099
Disposals - - (96) - - (18) - - (114)
Transfers (281) 281 13 - - (13) - - -
Balance at end of year 35 19,119 3,182 517 2,570 107 307 199 26,036
Balance at beginning of year - 3,049 1,367 232 525 31 115 76 5,395
Charge for the year - 900 355 80 280 23 60 40 1,738
Disposals - - (87) - - (14) - - (101)
Transfers - - 1 - - (1) - - -
Balance at end of year - 3,949 1,636 312 805 39 175 116 7,032
Net carrying amount

Balance at end of year 35 15,170 1,546 205 1,765 68 132 83 19,004
37
17 Property, Plant and Equipment (cont’d)
Plant and Office Motor Furniture and

machinery equipment vehicles Computers fittings Renovation Total
Company RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2008
Cost
Balance at beginning of year 274 179 730 107 303 199 1,792
Additions 191 3 - 10 - - 204
Disposals (21) - (730) - - - (751)
Balance at end of year 444 182 - 117 303 199 1,245
Balance at beginning of year 18 57 85 40 175 116 491
Charge for the year 88 36 134 23 61 39 381
Disposals (5) - (219) - - - (224)
Balance at end of year 101 93 - 63 236 155 648
Net carrying amount

Balance at end of year 343 89 - 54 67 44 597
2007
Cost
Balance at beginning of year - 93 - 97 303 199 692
Additions 261 86 730 41 - - 1,118
Disposals - - - (18) - - (18)
Transfers 13 - - (13) - - -
Balance at end of year 274 179 730 107 303 199 1,792
Balance at beginning of year - 36 - 31 115 76 258
Charge for the year 17 21 85 24 60 40 247
Disposals - - - (14) - - (14)
Transfers 1 - - (1) - - -
Balance at end of year 18 57 85 40 175 116 491
Net carrying amount

Balance at end of year 256 122 645 67 128 83 1,301
During the current financial year, the Group and the Company acquired property, plant and
equipment with an aggregate cost of RMB2,522,000 (2007: RMB2,099,000) and RMB204,000
(2007: RMB1,118,000) respectively of which nil (2007: 404,000) was acquired by means of finance
lease. Cash payments of RMB2,522,000 (2007: RMB1,695,000) and RMB204,000 (2007:
RMB714,000) were made by the Group and the Company respectively to purchase property, plant
and equipment.
During the current financial year, the Group disposed of the motor vehicle previously acquired
under finance lease. The motor vehicle had a carrying amount of RMB645,000 as at the end of the
previous financial year.
38
18 Land Use Rights

Group
2008 2007
RMB’000 RMB’000
Cost
Balance at beginning and end of year 14,024 14,024
Accumulated amortisation
Charge for the year 370 370
Net carrying amount

Details of the land use rights are as follows:

Location in the PRC Lease term Net carrying amount
2008 2007
RMB’000 RMB’000
Two plots of land in Shanxi(1) 50 years expiry in 7,591 7,771

year 2050/2051
Two plots of land in Shanghai(2) 20/50 years expiry in 4,076 4,266
years 2024/2053
11,667 12,037
(1)
The Group has land use rights over two plots of land in Shanxi, PRC where certain of the
Group’s biological assets – poplar timber are located. As at 31 December 2008, the directors
have assessed the recoverability of these land use rights, the details of which are described in
Note 20.
(2)
The Group has land use rights over two plots of land in Shanghai, PRC where the PRC
subsidiaries’ office building and plant nurseries reside. As at 31 December 2008, the Group has
not obtained the certificate of land use rights to one of these plots of land with a carrying
amount of RMB2,250,000 (2007: RMB2,400,000). Although the Group has not obtained the
certificate of the said land use rights, management is of the opinion that the Group is entitled to
lawfully and validly occupy the plot of land.
39
19 Prepaid Lease Payments

Group
2008 2007
RMB’000 RMB’000
Cost
Additions during the year 1,234 -
Charge for the year 1,380 1,333
Net carrying amount

Represented by:
Non-current 14,460 14,668
Current 1,395 1,333
15,855 16,001
The prepaid lease payments represent a lump-sum prepayment for 15-year rental expense starting
from January 2005 to December 2019 for the land in Jiangxi, PRC and a 20-year rental expense
starting from March 2008 to March 2028 for the land in Cambodia, with a carrying cost of
RMB14,668,000 and RMB1,187,000 respectively.
20 Land Development Costs

Group
2008 2007
RMB’000 RMB’000
Cost
Balance at beginning and end of year 40,000 40,000
Charge for the year 860 860
Net carrying amount

This represents land development costs incurred for two plots of land in Shanxi, PRC with land
areas totalling 200,000 mu. As at 31 December 2008, only 39,614 mu (2007: 39,614 mu) of this land
has been utitlised for planting of the Group’s biological assets – poplar timber. Management
presently has no plan for further planting on the remaining land area of 160,386 mu.
40
20 Land Development Costs (cont’d)
In view of the above, as at 31 December 2008, the directors have assessed the recoverable amount of
the land development costs including the related land use rights (Note 18) based on enquiries with a
professional independent valuer for the estimated fair value of the land. Based on enquiries by the
directors with the professional independent valuer, the recoverable amount (i.e. the fair value of the
land) was determined to be higher than the total carrying amount of the land development costs and
the related land use rights, and therefore in the opinion of the directors, no impairment loss was
required for the financial year ended 31 December 2008 (2007: Nil).
21 Biological Assets
A reconciliation of the carrying amounts of biological assets is as follows:
Group
2008 2007
RMB’000 RMB’000
Carrying amount at beginning of the year 695,783 541,000

Increase due to direct costs incurred 12,834 10,757
less estimated point-of-sale costs (Note 6)
- attributable to physical and price changes (54,134) 157,963
- attributable to co-operative arrangement costs (65,064) -
- attributable to impairment loss (18,937) -
(138,135) 157,963
Decrease due to sales (Note 5) (21,489) (11,304)
Biological assets used in research and development activities (1,231) (2,633)
Carrying amount at end of the year 547,762 695,783
Biological assets comprise:

Seedlings 1,036 657
Grown saplings 297 456
Timber – poplar 475,085 611,873
Timber – pine 66,235 82,797
Jatropha plantation 5,109 -
547,762 695,783
Classified as:
Non-current 444,408 534,145
Current 103,354 161,638
547,762 695,783
41
21 Biological Assets (cont’d)
(a) Grown Saplings and Timber
The Group’s biological assets of grown saplings and timber are located in the PRC. As at
31 December 2008, the Group’s total land area of the said biological assets, before deducting
harvested areas is approximately 279,897 mu (2007: 279,897 mu). There were no new acquisitions
of land and/or plantings carried out during the current and previous financial years.
During the current financial year, the Group harvested 63,154 tonnes (approximately 5,307 mu) of
poplar timber (2007: 19,280 cubic metres (approximately 6,552 mu) of pine timber). Sales from the
harvested timber are disclosed in Note 5.
As at 31 December 2008, the directors have approved a management plan to harvest 40,258 mu of
the Group’s biological assets within the next twelve months. These biological assets are located in
various locations and the fair value of these biological assets totalling RMB103,354,000, has been
classified and presented as current assets as at 31 December 2008.
As at 31 December 2007, the directors approved a management plan to harvest 328,688 cubic
metres (approximately 49,558 mu) of the biological assets within the next twelve months. These
biological assets are located in various locations and the fair value of these biological assets, which
approximates RMB161,638,000, were classified and presented as current assets as at 31 December
2007.
Fair Value of Biological Assets
The fair value of the biological assets as at the balance sheet date is based on a valuation performed
by a professional independent valuer in the PRC, Shanghai YinXin HuiYe Assets Appraisal Co., Ltd,
with reference to the most recent market transaction price.
Significant assumptions made in determining the fair value of the biological assets are as follows:
(i) Number of poplar/pine trees is approximately 100 per mu (2007: 100 per mu);
(ii) The market gross selling price of the timber – poplar/pine range between RMB250 to
RMB617 per tonne (2007: RMB277 to RMB798), depending on the age and locations of the
timber.
Co-operative Arrangement Costs
Certain of the Group’s biological assets located in 4 land areas totalling 32,532 mu in Jiangxi, PRC
have co-operative arrangements with the landlords whereby the Group pays nominal maintenance
fees each year. The fair value of these biological assets amounted to RMB148,988,000 as at
31 December 2008 (2007: RMB157,262,535).
During the financial year, management agreed with these landlords to pay an additional amount of
RMB2,000 per mu when harvesting of the biological assets commences. Consequently, the Group
has charged an amount of RMB65,064,000 against the carrying value of biological assets,
representing the estimated point-of-sale costs arising from co-operative arrangements that the Group
has entered into with the landlords.
42
Impairment Loss on Biological Assets
In early 2008, the Group’s biological assets located in certain locations were hit by the severe winter
storm that occurred in the PRC. Management had assessed the damages caused by the severe winter
storm to its biological assets and consequently an impairment loss of RMB18,937,000 (2007: Nil)
was recognised in the financial statements during the financial year ended 31 December 2008.
Pledged as Securities
Certain biological assets in Anhui, PRC with a land area amounting to 4,250 mu (2007: 5,717 mu)
valued at RMB4,377,634 (2007: RMB32,903,192) are pledged as security for term loans entered
into between a PRC financial institution and one of the subsidiaries as disclosed in Note 31(b).
Commodity Risks and Insurance Policies
The Group is exposed to commodity risks arising from changes in price of the biological assets,
primarily timber. Currently, there are no financial derivatives or other contracts in the PRC which
the Group can enter into to hedge the future selling price of the biological assets. The Group reviews
its outlook for seedlings, grown saplings and timber prices regularly in considering the need for
active financial risk management.
There are also scarce insurance policies in the PRC against losses arising from fire, flood or
uncontrollable and extraordinary weather conditions for biological assets such as trees. The Group
had in the previous financial year secured insurance coverage for 16,413 mu of land area of its
biological assets in Anhui, PRC. The insurance has expired and was not renewed during the current
financial year.
Sensitivity Analysis
The fair values of biological assets would be affected by changes in the above assumptions,
particularly the fair value less estimated point-of-sale costs used. If we assume the prices as at year
end increase/decrease by 10% with all other variables held constant, loss after income tax will be
lower/higher by approximately RMB54,904,000 (2007: profit after income tax will be higher/lower
by approximately RMB53,907,000).
(b) Jatropha Plantation
The Group’s Jatropha plantation is located in Cambodia. The Group commenced its planting
activities during the current financial year. As at the end of the financial year, the Group’s total land
area of the Jatropha plantation is approximately 42 hectares. No significant harvesting of Jatropha
seedlings was carried out during the financial year.
43
(b) Jatropha Plantation (cont’d)
The fair value of the Jatropha plantation is determined by management using the discounted future
cash flows of the underlying plantation. As the Group has no reference point to historical
performance, the expected future cash flows of the Jatropha plantation is therefore determined using
the estimated average market price of Jatropha seedlings. Significant assumptions made in
determining the fair value of the Jatropha plantation are as follows:
(i) Discounted future cash flows are projected for 10 years;

(ii) Yield per hectare, based on management’s expectation;
(iii) The discount rate of 10% per annum; and
(iv) The average selling price of Jatropha seedlings of US$1.25 per kg.
The fair values of Jatropha plantation would be affected by changes in the above assumptions,
particularly the fair value less estimated point-of-sale costs used. If we assume the prices as at year
end increase/decrease by 10% with all other variables held constant, loss after income tax will be
lower/higher by approximately RMB997,000.
22 Cash and Bank Balances

Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Cash at bank and on hand 1,050 23,728 500 1,126

Fixed deposits 7,798 44,107 7,798 44,107
Cash and cash equivalents 8,848 67,835 8,298 45,233
Less: Pledged fixed deposit (Note 31 (c)) (7,798) (37,300) (7,798) (37,300)
Per consolidated cash flow statement 1,050 30,535 500 7,933
As at 31 December 2008, fixed deposits which are denominated in Singapore dollars, have an
average maturity of 30 days (2007: 30 to 90 days) and bear interest at an average rate of 0.4% (2007:
2.19%) per annum during the financial year. Certain of these fixed deposits amounting to
RMB7,798,000 (2007: RMB37,300,000) were pledged to financial institutions for banking facilities
granted to one of the subsidiaries of the Group as disclosed in Note 31(c).
23 Financial Assets at Fair Value Through Profit or Loss

Group and Company
2008 2007
RMB’000 RMB’000
Quoted investments 88 1,117
44
24 Trade Receivables
Group
2008 2007
RMB’000 RMB’000
Third parties – sale of harvested timber 20,246 5,062

Third parties – sale of seedlings and grown saplings 1,852 1,586
Due from jointly controlled entity 837 1,000
Less: Allowance for impairment loss (2,419) (1,582)
20,516 6,066
The Group’s trade receivables that are impaired at the balance sheet date and the movements of the
allowance for impairment of trade receivables are as follows:
Group
2008 2007
RMB’000 RMB’000
Trade receivables 2,419 1,582

Less: Allowance for impairment loss (2,419) (1,582)
- -
Movement in allowance for impairment of trade receivables:

Charge for the year 837* 3
* relates to amount due from jointly controlled entity

The Group’s trade receivables that are individually determined to be impaired at the balance sheet
date relate mainly to debtors that have defaulted on payments. These receivables are not secured by
any collateral or credit enhancements.
45
25 Other Receivables
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Other receivables – third parties 8,323 5,945 10 79

Due from jointly controlled entity 212 931 - 931
Less: Allowance for impairment loss (2,604) - - -
Other receivables, net 5,931 6,876 10 1,010
Advances to suppliers 1,142 2,537 - -
Prepayments 1,610 175 168 145
Other deposits 1,150 1,300 329 345
Related party 170 13 - -
10,003 10,901 507 1,500
Movement in allowance for

impairment of other receivables:
Balance at beginning of year - - - -
Charge for the year 2,604* - - -
Balance at end of year 2,604 - - -
* includes amount due from jointly controlled entity of RMB212,000
The amount due from a jointly controlled entity and a related party is unsecured, interest-free and
repayable on demand and in cash.
26 Inventories
Inventories represent pesticides, chemicals and consumables, which are used in the Group’s
agricultural activities, and are stated at cost.
46
27 Share Capital
Group and Company
2008 2007 2008 2007
No. of shares No. of shares RMB’000 RMB’000
with no par with no par
value value
Issued and fully paid
Balance at beginning of year 586,157,360 498,502,360 288,007 218,835
Issue of shares
- Convertible note exercise - 40,436,000 - 30,385
- Placement exercise - 36,841,000 - 35,052
- Exercise of rights issue 1,925,000 10,378,000 978 5,204
of warrants (Note 28 (a))
1,925,000 87,655,000 978 70,641
Share issue expenses - - - (1,469)
Balance at end of year 588,082,360 586,157,360 288,985 288,007
The holders of ordinary shares are entitled to receive dividends as and when declared payable by the
Company. All ordinary shares carry one vote per share without restrictions.
(a) Convertible note exercise
On 13 December 2006, the Company entered into a Subscription Agreement with Pacific Capital
Investment Management Limited (“Pacific Capital”) to issue S$6 million (RMB30,385,000)
unsecured non-interest bearing notes (the “Notes”) due 2011. In the previous financial year, Pacific
Capital had fully exercised the conversion of the Notes at the conversion price of between S$0.136
to S$0.161 per share. The Company received S$6 million and issued 40,436,000 ordinary shares
upon the conversion of the Notes. The proceeds were used to finance the working capital of the
Group.
(b) Placement exercise
In the previous financial year, the Company entered into four Placement Agreements with third
parties to issue 36,841,000 ordinary shares for a total consideration of S$7 million (RMB35,052,000)
at the issue price of S$0.19 per share. The proceeds were used to finance the working capital of the
Group.
(c) Exercise of rights issue of warrants
During the current financial year, 1,925,000 (2007: 10,378,000) rights issue of warrants were
exercised, for a total consideration of S$134,750 (equivalent to RMB 685,000) (2007: S$726,640
(equivalent to RMB 3,643,000)) at the exercise price of S$ 0.07 per share. Each warrant carries the
right to subscribe for one new ordinary share. The proceeds were used to finance the working capital
of the Group.
47
28 Reserves
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Capital reserve 27,438 27,731 27,438 27,731

General reserve 9,927 9,927 - -
Other reserve 6,697 6,697 6,697 6,697
Currency translation reserve (417) (44) - -
Accumulated profits/(losses) 78,845 302,047 (30,541) (7,709)
122,490 346,358 3,594 26,719
Movements in reserves for the Group are set out in the consolidated statement of changes in equity.
(a) Capital Reserve
During the financial year, the Company issued 1,925,000 ordinary shares pursuant to the exercise of
1,925,000 (2007: 10,378,000) rights issue of warrants (Note 27(c)). At the end of the financial year,
the number of outstanding warrants was 187,097,944 (2007: 189,022,944).
(b) General Reserve
As at 31 December 2008 and 2007, the balances for the Group relate to a reserve fund and enterprise
expansion fund of RMB6,506,000 and RMB3,421,000 respectively.
(c) Other Reserve
Other reserve represents the difference between the net proceeds from the issuance of the
convertible note and the fair value of the liability portion recognised.
Group and Company

2008 2007
RMB’000 RMB’000
Convertible note – Equity portion (Note 31(a)) 8,719 8,719

Less: Tax on liability portion (Note 32) (1,570) (1,570)
Less: Transactions costs offset against equity portion (452) (452)
6,697 6,697
(d) Currency Translation Reserve
Currency translation reserve is used to record foreign exchange differences arising from the
translation of the financial statements of foreign subsidiaries whose functional currencies are
different from that of the Group’s presentation currency.
48
29 Trade and Other Payables

Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Accrued operating expenses - 4,976 - -
Accrued rental expenses - 27,465 - -
- 32,441 - -
Current
Trade payable 216 4 - -
Accrued operating expenses 30,446 10,728 1,546 1,728
Accrued rental expenses 69,193 17,974 - -
Accrued interest payable 13,180 3,627 6,023 -
Agricultural tax payable - 601 - -
Other payables 4,943 1,233 - -
117,978 34,167 7,569 1,728
In the previous financial year, the Group had entered into deferred payment arrangements with some
of the landlords to defer rental and maintenance fees payment until 31 December 2009. 7% interest
is charged on the outstanding balances. In the current financial year, these non-current liabilities of
accrued rental expenses of RMB27,465,000 have been reclassified under current liabilities as at
31 December 2008.
As at 31 December 2008, included in the accrued operating expenses is an amount of

RMB15,132,000 (2007: Nil) harvesting costs.
As at 31 December 2008, accrued interest payable comprised deferred payment arrangements

interest amounting to RMB7,157,000 (2007: RMB3,627,000) and default interest on convertible
note of RMB 6,023,000 (2007: Nil).
49
30 Finance Lease Liabilities
The Group and the Company acquired a motor vehicle under finance lease. The finance lease
has an effective interest rate of 5.5905% (2007: 5.5905%) per annum.
Group and Company

2008 2007
RMB’000 RMB’000
Minimum lease payments due:
- Within one year - 92
- Between two to five years - 329
- 421
Less: Future finance charges - (51)

Present value of finance lease liabilities - 370
Represented by:
Non-current - 290
Current - 80
- 370
During the current financial year, the Group and the Company has fully repaid the finance lease
following the disposal of the motor vehicle.
31 Borrowings
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Non-current
Convertible note - 48,037 - 48,037
Term loan - 2,000 - -
- 50,037 - 48,037
Current
Convertible note 47,594 - 47,594 -
Bank borrowings 7,200 11,250 - -
Term loan 4,900 2,900 - -
59,694 14,150 47,594 -
Total borrowings 59,694 64,187 47,594 48,037
50
31 Borrowings (cont’d)
(a) Convertible Note

Background
On 22 May 2007, the Company entered into a Subscription Agreement with Liberty Harbour LLC
(the “Convertible Noteholder”) and on 11 October 2007 issued 3% interest bearing unsecured
convertible note with a nominal value of US$ 8,000,000 (equivalent to RMB 60,141,000) due 2011.
The notes will mature in four years from the issue date at their nominal value of US$ 8,000,000 or
can be converted into new ordinary shares of the Company at the initial conversion price of S$0.24,
subject to adjustment stated in the Subscription Agreement.
The fair value of the liability portion, included in non-current borrowings, was calculated using a
market interest rate of 6.92%, for an equivalent non-convertible note at the date of issue. The
residual amount, representing the value of the equity conversion portion, was included in equity in
other reserves (Note 29), net of deferred income tax.
The carrying amount of the liability portion of the convertible note at the balance sheet date is as
follows:
Group and Company
2008 2007
RMB’000 RMB’000
Face value of convertible note issued on 11 October 2007 60,141 60,141

Convertible note – equity portion (Note 28 (c)) (8,719) (8,719)
Liability portion on initial recognition at 11 October 2007 51,422 51,422
Less: Transaction costs offset against liability portion (2,669) (2,669)

Accumulated amortisation of discount on convertible note 2,475 470
Payment of interest during the year (1,678) -
Accumulated amortisation of transaction costs 769 150
Foreign exchange revaluation gain (2,725) (1,336)
Liability portion at end of year 47,594 48,037
Breach of Convertible Note Covenants

The Company had on 12 September 2008 requested for a trading halt of its shares pending the
release of an announcement. Subsequently, the Company had on 18 September 2008 announced that,
as at 12 September 2008, the collective equity interests of the Company’s majority shareholders,
namely, Hireach Assets Limited, Mr Song Xuemeng and Mdm Su Min (collectively the “Majority
Shareholders”) have decreased to approximately 31.8% as a result of involuntary sales by financial
institutions of shares held by the Majority Shareholders. Under the terms of the Subscription
Agreement of the Convertible Note, in the event that the shares of the Company are suspended for a
period of 14 consecutive business days or more, such event shall constitute a breach of covenant and
accordingly, the Convertible Noteholder has the right to redeem the convertible notes totalling US$8
million (RMB60.141 million) immediately, upon serving a notice to the Company. The Company
duly reported on 2 October 2008 that an event of default had occurred in respect of its Convertible
Note due to a breach of covenant of the Subscription Agreement with the Convertible Noteholder.
Consequently, the Convertible Note became repayable upon demand and accordingly, in the
financial statements, the Convertible Note have been reclassified to current liabilities as at 31
December 2008.
51
31 Borrowings (cont’d)
(a) Convertible Note (cont’d)
Breach of Convertible Note Covenants (cont’d)
Further, interest amounting to RMB6,023,000 has been accrued in the financial statements as at
31 December 2008 being the unpaid 3% interest accrued up to the maturity period and default
interest charged at a rate of 10% as a result of the event of default in accordance with the terms of
the Subscription Agreement.
As at the date when these financial statements were authorised for issue, the Convertible Noteholder
has not exercised its rights to redeem the convertible note. The Company is presently negotiating
with the Convertible Noteholder for a waiver and to revise terms and conditions of the convertible
note. It is presently not possible to determine the eventual outcome of these negotiations.
(b) Term loans
The term loans comprised two separate loans of RMB2,000,000 (term loan 1) and RMB2,900,000
(term loan 2) which bear interest at an effective rate of 9.18% and 12.98% (2007: 9.18% and
12.98%) per annum respectively. Term loan 1 and Term loan 2 for 2008 are repayable in November
2009 and December 2009 respectively. Term loan 1 and Term loan 2 for 2007 were repayable in
November 2009 and December 2008 respectively, of which Term loan 2 was rolled-over by the
Group during the current financial year.
The term loans entered into between a PRC financial institution and one of the subsidiaries of the
Group are secured by certain biological assets in Anhui, PRC as disclosed in Note 21.
(c) Bank borrowings
The bank borrowings bear interest at effective interest rates of 8.217% (2007: 5.91% to 7.57%) per
annum. The bank borrowings of RMB7,200,000 for 2008 is due in January 2009 and were repaid
partially subsequent to the financial year end. The bank borrowings of RMB11,250,000 for 2007
was due in May 2008 and were repaid in full during the current financial year.
The bank borrowings entered into between a PRC financial institution and one of the subsidiaries of
the Group are secured by pledged fixed deposits placed by the Company as disclosed in Note 22.
(d) Undrawn borrowing facilities
At the balance sheet date, the Group had available RMB14,850,000 (2007: RMB29,256,400)
undrawn committed borrowing facilities in respect of which all conditions precedent had been met.
52
32 Deferred Income Tax Liabilities
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
deferred income tax assets against deferred income tax liabilities and when the deferred income
taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are
shown as follows:
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Deferred income tax assets

- to be recovered within one year - - - -
- to be recovered after one year (395) (395) - -
(395) (395) - -
Deferred income tax liabilities

- to be settled within one year 15,529 28,921 391 389
- to be settled after one year 49,920 57,296 705 1,096
65,449 86,217 1,096 1,485
Net position 65,054 85,822 1,096 1,485
The movement in deferred income tax liabilities is as follows:
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Balance at beginning of year 85,822 67,514 1,485 -

(Credited)/Charged to:
- income statement (Note 13) (20,768) 16,738 (389) (85)
- equity (Note 28) - 1,570 - 1,570
Balance at end of year 65,054 85,822 1,096 1,485
Deferred income Net

Deferred income tax liabilities tax assets position
Fair value Convertible
gains note Total Provision
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Group
2008
Balance at beginning of year 84,732 1,485 86,217 (395) 85,822
Credited to:
- income statement (20,379) (389) (20,768) - (20,768)
Balance at end of year 64,353 1,096 65,449 (395) 65,054
53
32 Deferred Income Tax Liabilities (cont’d)
Deferred income Net

Deferred income tax liabilities tax assets position
Fair value Convertible
gains note Total Provision
2007
Balance at beginning of year 67,941 - 67,941 (427) 67,514
Charged/(Credited) to:
- income statement 16,791 (85) 16,706 32 16,738
- equity - 1,570 1,570 - 1,570
Balance at end of year 84,732 1,485 86,217 (395) 85,822
Deferred income tax

liabilities
Convertible note
2008 2007
RMB’000 RMB’000
Company
Balance at beginning of year 1,485 -
(Credited)/Charged to:
- income statement (389) (85)
- equity - 1,570
33 Staff Incentive and Welfare Fund

Group
2008 2007
RMB’000 RMB’000
Balance at beginning of the year 5,297 5,344

Utilised for the year (77) (47)
Balance at end of the year 5,220 5,297
Pursuant to relevant laws and regulations in the PRC and the articles of association of one of the
subsidiaries, the subsidiary has the discretion to set aside an amount from profit after income tax as
reported in the PRC statutory financial statements to staff incentive and welfare fund at the rate
determined by the board of directors for the purpose of paying special bonus and financing general
welfare facilities for staff.
54
34 Operating Lease Commitments

Group
2008 2007
RMB’000 RMB’000
Lease payments under operating leases
recognised as an expense in the year 32,453 31,283
At the balance sheet date, the Group had entered into non-cancellable operating leases for the rental
of office premises and land for biological assets. The leases have varying terms and the periods of
these leases range between 1 to 25 years (2007: 2 to 25 years). The renewal of the lease of the office
premises and lands for its biological assets are subject to the approval of the relevant contracting
parties.
Future minimum lease payable under non-cancellable operating leases is as follows:
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Within one year 35,752 36,478 1,277 1,679

Between two to five years 129,753 134,480 250 1,660
After five years 234,661 269,887 - 3,338
400,166 440,845 1,527 6,677
35 Capital Commitments
Group and Company
2008 2007
RMB’000 RMB’000
Contracted but not provided for in respect of:
Property, plant and equipment - 168
55
36 Related Parties Transactions
Related parties are entities with common direct or indirect shareholders. 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 and operating decisions.
(a) Significant related parties transactions
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Income
Related parties
Rental income 5 10 5 10
Jointly controlled entity

Sales of agricultural products - 1,000 - -
Management fees received 128 - 128 -
Fellow subsidiaries
Interest income - - 9,530 6,318
Administrative charge - - 1,680 1,680
Expenses
Related parties
Purchase of fertilisers 7,725 2,007 - -
Loans
Directors
Loan to directors 8,325 - 8,325 -
Interest received from directors 7 - 7 -
Balances with related parties outstanding at the balance sheet date are disclosed in Notes 24 and 25.
During the financial year, loans totalling S$1,719,049 (approximately RMB8,325,000) were made to
certain directors of the Company and interest was charged at 3.5% per annum. These loans together
with the interest were fully repaid by the directors during the financial year.
56
36 Related Parties Transactions (cont’d)
(b) Compensation of key management personnel

Group
2008 2007
RMB’000 RMB’000
Directors fees 889 650

Salaries and bonuses 3,176 3,688
Defined contribution plans 80 102
4,145 4,440
Comprise amounts paid to

Directors of the Company 3,711 4,079
Other key management personnel 434 361
4,145 4,440
37 Financial Risk Management
The Group’s activities expose to a variety of financial risks such as market risk (including interest rate
risk, currency risk and price risk), credit risk and liquidity risk. The Group’s overall risk management
strategy seeks to minimise adverse effects from the unpredictability of financial markets on the
Group’s financial performance. The Group continually monitors the risk management process to
ensure that an appropriate balance between risk and control is achieved. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The Board is responsible for setting the objectives and underlying principles of financial risk
management for the Group. The Board will review and agree on policies for managing each of these
risks as summarised below.
(a) Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk
relates primarily to the Group’s interest-bearing assets and liabilities. The Group does not enter into
interest rate swaps to manage its interest rate risk. These exposures are managed partly by using
natural hedges that arise from offsetting interest rate sensitive assets and liabilities.
57
37 Financial Risk Management (cont’d)
(a) Interest rate risk (cont’d)
The tables below set out the Group’s and the Company’s exposure to interest rate risks. Included in the
tables are the assets and liabilities at carrying amounts, categorised by the earlier of contractual
repricing or maturity dates.
Variable rates Fixed rates

Between Non-Interest
Within 1 Year Within 1 Year 2 to 5 Years Bearing Total
Group RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
2008
Assets
Cash and cash
equivalents 1,050 7,798 - - 8,848
Financial assets at fair
value through profit or
loss 88 - - - 88
Trade and other
receivables - - - 30,519 30,519
Non-financial assets - - - 630,079 630,079
1,138 7,798 - 660,598 669,534
Liabilities
Trade and other
payables - 50,449 - 67,529 117,978
Borrowings 7,200 52,494 - - 59,694
Non-financial liabilities - - - 80,387 80,387
7,200 102,943 - 147,916 258,059
2007
Assets
Cash and cash
equivalents 23,728 44,107 - - 67,835
loss - - - 1,117 1,117
Trade and other
receivables - - - 16,967 16,967
23,728 44,107 - 798,827 866,662
Liabilities
Trade and other
payables - - 32,441 34,167 66,608
Finance lease liabilities - 80 290 - 370
Borrowings 11,250 2,900 50,037 - 64,187
11,250 2,980 82,768 135,299 232,297
58
Variable rates Fixed rates

Between Non-Interest
Within 1 Year Within 1 Year 2 to 5 Years Bearing Total
Company
2008
Assets
Cash and cash
equivalents 500 7,798 - - 8,298
loss 88 - - - 88
Other receivables - - - 507 507
Due from subsidiaries - - 151,352 - 151,352
588 7,798 151,352 189,300 349,038
Liabilities
Trade and other
payables - - - 7,569 7,569
Borrowings - 47,594 - - 47,594
- 47,594 - 8,865 56,459
2007
Assets
Cash and cash
equivalents 1,126 44,107 - - 45,233
loss - - - 1,117 1,117
Other receivables - - - 1,500 1,500
Due from subsidiaries - - 121,589 - 121,589
1,126 44,107 121,589 199,624 366,446
Liabilities
Trade and other
payables - - - 1,728 1,728
Finance lease liabilities - 80 290 - 370
Borrowings - - 48,037 - 48,037
- 80 48,327 3,313 51,720
59
The Group’s and the Company’s borrowings at variable rates on which effective hedges have not
been entered into, are denominated mainly in S$, US$ and RMB. If the S$, US$ and RMB interest
rates increase/decrease by 100 basis point (2007: 100 basis point) with all other variables including
tax rate being held constant, the loss after income tax will be higher/lower by approximately
RMB50,200, Nil and RMB54,600 (2007: profit after income tax will be lower/higher by
approximately Nil, RMB 133,000 and RMB 154,000), respectively.
(b) Foreign currency risk
Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates. The Group’s mainly operates in the PRC
and its functional currency is in Renminbi. The Group’s is exposed to foreign currency risk when
transactions such as expenses and borrowings are denominated in currencies other than Renminbi. In
addition, the Group is exposed to currency translation risk on the net assets in foreign operations.
The currencies giving rise to this risk are primarily Singapore dollar (“S$”), United States dollar
(“USD”) and Malaysia Ringgit (“RM”).
The Group has not entered into any forward currency contracts or any hedging instruments to
manage the foreign currency risk. This exposure is managed as far as possible by natural hedges of
matching assets and liabilities.
The Group and the Company’s financial assets and financial liabilities are denominated in the
following currencies:
2008 2007
Singapore United States Singapore United States
Renminbi dollars dollars Renminbi dollars dollars
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Group
Financial assets
Cash and cash
equivalents 510 8,296 42 22,476 45,071 288
Financial assets at
fair value through
profit or loss - 88 - - 1,117 -
Trade receivables 20,516 - - 6,066 - -
Other receivables 7,733 507 1,763 3,942 569 6,390
28,759 8,891 1,805 32,484 46,757 6,678
Financial liabilities
Trade and other
payables 110,335 1,546 6,097 64,880 1,343 385
Finance lease
liabilities - - - - 370 -
Borrowings 12,100 - 47,594 16,150 - 48,037
122,435 1,546 53,691 81,030 1,713 48,422
60
(b) Foreign currency risk (cont’d)
2008 2007
Renminbi dollars dollars Renminbi dollars dollars
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Group (cont’d)
Net financial
(liabilities)/assets (93,676) 7,345 (51,886) (48,546) 45,044 (41,744)
Less: Net financial

liabilities (assets)
denominated in the
respective entities
functional
currencies 93,676 - 1,784 48,546 - (5,564)
Currency exposure - 7,345 50,102 - 45,044 (47,308)
2008 2007
dollars dollars dollars dollars
RMB’000 RMB’000 RMB’000 RMB’000
Company
Financial assets
Cash and cash equivalents 8,293 5 45,069 164
Financial assets at fair value
through profit or loss 88 - 1,117 -
Other receivables 507 - 569 931
8,888 5 46,755 1,095
Financial liabilities
Trade and other payables 1,546 6,023 1,343 385
Finance lease liabilities - - 370 -
Borrowings - 47,594 - 48,037
1,546 53,617 1,713 48,422
Currency exposure 7,342 (53,612) 45,042 (47,327)
61
(b) Foreign currency risk (cont’d)
A change of 10% (2007: 10%) (taking into consideration both strengthened and weakened) of RMB
against the following currencies at the balance sheet date would increase/(decrease) the Group’s
loss/profit after income tax and equity by the amounts as shown below. This analysis assumes that
all other variables, in particular interest and tax rates, remain constant.
2008 2007
Loss after Profit after
income tax Equity income tax Equity
RMB’000 RMB’000 RMB’000 RMB’000
Group
S$ against RMB
- strengthened (735) - 4,504 -
- weakened 735 - (4,504) -
USD against RMB
- strengthened 5,010 (178) (4,731) 555
- weakened (5,010) 178 4,731 (555)
Company
S$ against RMB
- strengthened (734) - 4,504 -
- weakened 734 - (4,504) -
USD against RMB
- strengthened 5,361 - (4,731) -
- weakened (5,361) - 4,731 -
(c) Price risk
Price risk refers to the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market prices. The Group is exposed to equity securities price risk
because of the investments held by the Group which are classified as fair value through profit or loss.
These securities are listed in Singapore. The Group is not exposed to commodity price risk. To
manage its price risk arising from investments in equity securities, the Group has set up an
Investment Committee to control and monitor the investments made by the Group. An Investment
Control Policies have been drawn up.
If prices for equity securities listed in Singapore increase/decrease by 10% with all other variables
including tax rate being held constant, the loss after income tax will be decreased/increased by
RMB8,800 (2007: profit after income tax will be increased/decreased by RMB 111,700).
62
(d) Credit risk
Credit risk refers to the risk that the customer or counterparty failed to discharge an obligation and
resulted in a financial loss to the Group. The Group’s credit risk is primarily attributable to its bank
deposits, trade and other receivables.
As the Group and the Company do not hold any collateral, the maximum exposure to credit risk is
the carrying amount of the related financial assets presented on the balance sheet.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade and other receivables. The allowance account in respect of trade and other
receivables is used to record impairment losses unless the Group is satisfied that no recovery of the
amount owing is possible. At that point, the financial asset is considered irrecoverable and the
amount charged to the allowance account is written off against the carrying amount of the impaired
financial asset.
Trade and other receivables balances are monitored on an ongoing basis and whether the trade and
other receivables are recoverable are estimated by the Group’s management based on prior
experience and the current economic environment. The Group adopts the policy of dealing with
customers of appropriate credit history, and obtaining sufficient security where appropriate to
mitigate credit risk.
Cash and fixed deposits are placed with banks and financial institutions which are regulated. The
Group limits its credit risk exposure in respect of investments by only investing in liquid securities
and only with counterparties that have a sound credit rating. Given these high credit ratings,
management does not expect any counterparty to fail to meet its obligations.
Significant concentrations of credit risk
Concentrations of credit risk exist when changes in economic, industry or geographic factors
similarly affect groups of counterparties whose aggregate credit exposure is significant in relation to
the Group’s total credit exposure. The Group’s credit exposure is concentrated mainly in the PRC.
Financial assets that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy companies with good
payment record with the Group. Bank deposits that are neither past due nor impaired are mainly
deposits with banks with high credit ratings and no history of default.
63
(d) Credit risk (cont’d)
Financial assets that are past due but not impaired
There is no class of financial assets that is past due but not impaired as at 31 December 2008 and
2007.
Financial assets that are either past due or impaired
The carrying amounts of trade and other receivables individually determined to be impaired are
disclosed in Notes 24 and 25. The impaired trade and other receivables arose from long outstanding
amounts due which remained unpaid as at balance sheet date and accordingly there are uncertainties
over the recovery of these amounts due.
(e) Liquidity risk
Liquidity risk refers to the risk that the Group will not be able to meet its financial obligations as
they fall due. As disclosed in Note 31(a), an event of default has occurred in respect of the
Company’s convertible note which the Convertible Noteholder has the right to redeem the
convertible note immediately and accordingly, the convertible note have been reclassified to current
liabilities as at 31 December 2008. The Company is presently negotiating with the Convertible
Noteholder to revise the terms and conditions of the convertible note.
The table below analyses the maturity profile of the Group’s financial liabilities based on contractual
undiscounted cash flows.
Carrying amount Cash Flows

Contractual
cash flows Within 1 year 2 to 5 years
RMB’000 RMB’000 RMB’000 RMB’000
Group
2008
Trade and other payables 117,978 (121,509) (121,509) -
Borrowings 59,694 (64,288) (64,288) -
177,672 (185,797) (185,797) -
2007
Trade and other payables 66,608 (71,150) (36,438) (34,712)
Finance lease liabilities 370 (421) (92) (329)
Borrowings 64,187 (70,469) (14,472) (55,997)
131,165 (142,040) (51,002) (91,038)
64
(e) Liquidity risk (cont’d)
Carrying amount Cash Flows

Contractual
cash flows Within 1 year 2 to 5 years
RMB’000 RMB’000 RMB’000 RMB’000
Company
2008
Borrowings 47,594 (51,560) (51,560) -
55,163 (59,129) (59,129) -
2007
Finance lease liabilities 370 (421) (92) (329)
Borrowings 48,037 (53,478) - (53,478)
50,135 (55,627) (1,820) (53,807)
(f) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
Management monitors capital with reference to gearing ratio. The Group strategies are to maintain a
prudent balance between the advantage and flexibility afforded by a strong capital position and the
higher return on equity that are possible with greater leverage.
Group Company
2008 2007 2008 2007
RMB’000 RMB’000 RMB’000 RMB’000
Total liabilities 258,059 232,297 56,459 51,720
Total equity 411,475 634,365 292,579 314,726
Debt to equity ratio 62.71% 36.62% 19.30% 16.43%
The Group and the Company are in compliance with all externally imposed capital requirements for
the financial years ended 31 December 2008 and 2007 except as disclosed in Note 31 to the financial
statements.
65
(g) Fair values of financial assets and financial liabilities
The fair value information presented represents the Group’s best estimate of those values and may
be subject to certain assumptions and limitations. The methodologies and assumptions used in the
estimation of fair values depend on the terms and characteristics of the various financial instruments.
The Group’s financial assets and liabilities included mainly trade and other receivables, cash and
cash equivalents, trade and other payables, short-term borrowings. The carrying amounts of these
financial assets and liabilities with a maturity of less than one year approximate their fair values due
to their short-term maturities.
The fair value of convertible note as at 31 December 2007 was calculated using a market interest
rate of 6.48% estimated to be the interest rate for equivalent non-convertible note at the balance
sheet date. As at 31 December 2007, the carrying amount of the convertible note approximated its
fair value.
The fair value of the long-term term loan as at 31 December 2007 was calculated based on
discounted expected future principal and interest cash flows. The discount rates used were based on
market rates for similar instruments at the balance sheet date. As at 31 December 2007, the carrying
amount of the long-term term loan approximated its fair value.
38 Segment Information
Business segments
The Group operates in the following major business segments:
Seedlings (“tissue cultured/propagated seedlings”) - Production and sale of self-cultivated tissue and
propagated seedlings with options to repurchase grown saplings from customers.
Grown saplings - Sale of grown saplings purchased through the exercise of options referred above or
from self-cultivated saplings.
Timber - Sale of cultivated timber, after about five years of growth, from the cultivation of grown
saplings.
Geographical segments
The Group operates predominantly in the PRC.
66
38 Segment Information (cont’d)
Primary reporting format - business segments
Details of the Group’s business segments for the financial year ended 31 December are presented
below:
Grown
Seedlings saplings Timber Jatropha Total
2008
Sales of agricultural
products 843 - 20,646 - 21,489
Gain arising from changes in

fair value less estimated
point-of-sale costs 28 - (143,289) 4,946 (138,135)
Segment result (569) (17) (224,462) 1,736 (222,312)

Interest income 530
Finance costs (13,127)
Share of loss of jointly
controlled entity (498)
Unallocated income 413
Unallocated expenses (7,876)
Loss before income tax (243,870)
Income tax 20,668
Loss for the year (223,202)
Other segment items

Capital expenditure of
property, plant and
equipment - - - 2,522 2,522
Depreciation of property,
plant and equipment 2 2 2,074 2 2,080
Amortisation of land use
rights - - 370 - 370
Amortisation of prepaid
lease payments - - 1,333 47 1,380
Amortisation of land
development costs - - 860 - 860
Statement of net assets

Assets
Segment assets 3,393 1,268 645,490 9,159 659,310
Unallocated corporate assets 10,224
Total assets 669,534
Liabilities
Segment liabilities 742 522 114,138 74 115,476
Income tax payable 10,113
Unallocated liabilities 132,470
Total liabilities 258,059
67
38 Segment Information (cont’d)
Primary reporting format - business segments (cont’d)
Grown
Seedlings saplings Timber Total
RMB’000 RMB’000 RMB’000 RMB’000
2007
Sales of agricultural products 1,999 - 9,305 11,304
Gain arising from changes in fair value

less estimated point-of-sale costs 28 (4,068) 162,003 157,963
Segment result (385) (4,478) 97,369 92,506

Interest income 1,813
Finance costs (7,014)
Share of loss of jointly controlled entity (424)
Unallocated income 656
Unallocated expenses (4,632)
Profit before income tax 82,905
Income tax (17,032)
Profit for the year 65,873
Other segment items

Capital expenditure of property, plant
and equipment - - 2,099 2,099
Depreciation of property, plant and
equipment 2 2 1,734 1,738
Amortisation of land use rights - - 370 370
Amortisation of prepaid lease payments - - 1,333 1,333
Amortisation of land development costs - - 860 860
Statement of net assets

Assets
Segment assets 4,022 2,818 782,174 789,014
Unallocated corporate assets 78,043
Total assets 867,057
Liabilities
Segment liabilities 1,196 1,196 69,513 71,905
Income tax payable 10,013
Unallocated liabilities 150,774
Total liabilities 232,692
68
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Guangzhao Industrial Forest
Biotechology Group Limited
Company Registration No. 200305430G
6 Temasek Boulevard #23-06

Suntec Tower Four
Singapore 038986
Tel: 65 6235 0255
Fax: 65 6235 0705
www.guangzhao.com.sg

Guangzhao Industrial Forest Biotechnology Group LTD Annual Report 2008

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Guangzhao Industrial Forest Biotechnology Group LTD Annual Report 2008

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Guangzhao Industrial Forest Biotechology Group Limited

Annual Report 2008

nurturing the seeds of opportunities

Dear shareholders carrying value of our biological assets to RMB547.8

With the projected increase in construction and

Ms Su Min, Executive Chairman experience gained from the management of

Mr Ong Kian Min, Independent Director

Audit Committee Remuneration Committee

Nominating Committee Company Secretaries

Shanghai, P.R. China Office Registered Office

Share and Warrant Registrar Auditors

SINGAPORE CHINA MALAYSIA Cambodia

Shanghai Shizhao Trading

Tel: 65-62350255 Tel: 86-21-6915 6062 Tel: 60-6-6012979 Tel: 855-23-228866

Mr Song Xuemeng Mr Song Xuemeng Mr Lai Sead Ping Mr Song Xuemeng

Principle 1: The Board’s Conduct of Affairs

(b) reviewing and approving corporate policies and strategies;

(d) monitoring management’s performance;

Board Audit Remuneration Nominating Committee

Principle 2: Board Composition and Guidance

Principle 3: Chairman and Chief Executive Officer

Principle 4: Board Membership

Lew Syn Pau (Chairman)

Principle 5: Board Performance

Principle 6: Access to Information

Principle 7: Procedures for Developing Remuneration Policies

Principle 8: Level and Mix of Remuneration

Principle 9: Disclosure on Remuneration

Dr Jean Yong Wan Hong (Chairman)

The RC has written terms of reference and is responsible for:

Remuneration bands FY2008 FY2007

Remuneration of Key Employees

Name of Executive Salary and Allowances Bonus Total

Remuneration bands FY2008 FY2007

Principle 10: Accountability

Principle 11: Audit Committee

In preparing the financial statements, the directors have:

(a) selected suitable accounting policies and applied them consistently;

Lew Syn Pau (Chairman)

The AC meets periodically to perform the following functions:

(g) review potential conflicts of interest, if any;

Principle 12: Internal Controls

Principle 13: Internal Audit

Communication With Shareholders

Principle 14: Communication with Shareholders

Principle 15: Greater Shareholder Participation

Interested Person Transactions

Issued and fully paid-up capital : S$60,019,061

1 - 999 126 4.16 5,134 0.00

Total 3,029 100.00 588,082,360 100.00

Twenty Largest Holders Of Shares

No. Name No. of shares %

1 See Hoy Chan Investment Limited 96,500,000 16.41

Su Min (1) 66,496,000 11.31% 20,000,000 3.40%

Statistics of warrant holdings

Distribution Of Warrant Holdings

1 - 999 6 1.59 2,016 0.00

Total 377 100.00 187,097,944 100.00

Twenty Largest Warrant Holders

1 Hireach Assets Limited 89,195,784 47.67

Total 168,922,784 90.29

NOTICE OF ANNUAL GENERAL MEETING