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Tapping into New Areasof Growth

G M G G L O B A L L I M I T E D

A N N U A L R E P O R T 2 0 0 7

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1G M G G L O B A L L I M I T E D | A N N U A L R E P O R T 2 0 0 7

Contents

2 Coroporate Profi le3 Corporate Data4 Board of Directors and Key Management9 Corporate Structure10 Corporate Directorship11 Chairman’s Message12 Corporate Governance20 Group Financial Highlights21 Operations Overview24 Report of The Directors28 Statement of Directors29 Independent Auditors’ Report30 Balance Sheets31 Consolidated Profi t and Loss Statement32 Statements of Changes In Equity33 Consolidated Cash Flow Statement34 Notes To Financial Statements62 Major Properties63 Statistics of Shareholdings65 Notice of Annual General Meeting Proxy Form


G M G G L O B A L L I M I T E D | A N N U A L R E P O R T 2 0 0 72

GMG Global Ltd

GMG is a Singapore-headquartered plantation group dedicated to long-term investments in Central and West Africa as well as Indonesia. It is an integrated producer of natural rubber engaged in the planting, growing, tapping, processing, marketing and exporting of natural rubber. The Group’s emphasis is on producing premium products for Europe, US and Asia markets.

Currently, it operates in four countries, namely (i) Singapore where it maintains its corporate headquarters and marketing/sales arm, (ii) Cameroon, where its wholly-owned subsidiary, GMG International, SA owns a 90% stake in Hevecam, which owns an industrial rubber plantation with processing facility of over 50,000 metric tons annual capacity on a land concession of 40,000 hectares since December 1996, (iii) Ivory Coast, where its 51.2% subsidiary, Tropical Rubber Cote d’Ivoire, owns and operates a processing facility of 30,000 metric tons annual capacity and a rubber plantation on a land concession of 1,511 hectares (Anguededou Plantation) since 1995, and (iv) South Kalimantan, Indonesia, where its 51% subsidiary (since April 2007), PT Bumi Jaya, owns and operates a new processing facility of 30,000 metric tons annual capacity.

As a leading producer of high quality natural rubber, it focuses on centrifuged latex and tyre-grade rubber and two supplementary products - block rubbers of latex and skim. With total annual production above 50,000 metric tons, it accounts for approximately 60% and 12% of Cameroon’s and Ivory Coast’s annual rubber exports, respectively. In Ivory Coast, it is the second largest buyer of smallholders’ rubber, a position it has developed since 2006. Its Indonesian operation started production in late August 2007.

Both the Hevecam and Anguededou Plantations were acquired from the respective governments under State privatisation programmes. The State of Cameroon and the State of Cote d’Ivoire remain as a 10% and 20% shareholder in Hevecam and Tropical Rubber Cote d’Ivoire, respectively. PT Bumi Jaya is a 51% joint-venture with local partners in Indonesia.

“GMG is an integrated producer of natural rubber engaged in the planting, growing, tapping, processing, marketing and exporting of natural rubber”

Corporate Profile



Board of Directors

Executive:

Elson Ng Keng KwangPresident & Chief Executive Offi cer

Jeffrey GondobintoroChief Operating Offi cer

Danny Lo Kan YuChief Financial Offi cer

Non-Executive:

Yudson GondobintoroChairman

Ong Kian MinIndependent

Tay Puan SiongIndependent

Audit Committee:

Tay Puan Siong (Chairman)

Ong Kian MinYudson Gondobintoro

Nominating Committee:

Ong Kian Min (Chairman)

Tay Puan SiongYudson Gondobintoro

Remuneration Committee:

Ong Kian Min (Chairman)

Tay Puan SiongYudson Gondobintoro

Company Secretaries:

Yvonne ChooHazel Chia Luang Chew

Registered Offi ce:

55 Market Street#03-01Singapore 048941Tel. No. 6220 8638Fax No. 6323 0737

Share Registrar:

Boardroom Corporate & Advisory Services Pte Ltd3 Church Street #08-01Samsung HubSingapore 049483Tel. No. 6536 5355Fax No. 6536 1360

Auditors

Deloitte & ToucheCertifi ed Public Accountants6 Shenton Way#32-00 DBS Building Tower TwoSingapore 068809

Partner-in-charge:

Mr. Ho Kok Yong(appointed on 22 August 2006)

Corporate Data



Yudson Gondobintoro, 40, Non-Executive Director

Mr. Yudson Gondobintoro has been a Non-Executive Director since 24 July 1999 and was last-elected a Director on 29 April 2005. He was appointed Non-Executive Chairman on 9 September 2003, and is currently a member of the Audit Committee, Nominating Committee and Remuneration Committee. He is also Director of both GMG Holdings Ltd and GMG Investment (S) Pte Ltd as well as a Commissioner of P.T. Bumi Jaya, Indonesia.

Mr. Yudson Gondobintoro graduated from the University of California with a Bachelor’s degree in Science majoring in Physics in 1992.

Elson Ng Keng Kwang, 58, FCIB, FCIS, FCMI, Executive Director

Mr. Ng has been an Executive Director, President & Chief Operating Officer since 23 July 1999 and was last re-elected a Director on 27 April 2007. He was appointed President & Chief Executive Officer on 9 September 2003. Mr. Ng is also Executive Director of GMG Holdings Ltd, Director of GMG International SA, Cameroon, Hevecam SA, Cameroon and Tropical Rubber Cote d’lvoire and a Commissioner of P.T. Bumi Jaya, Indonesia. Mr. Ng joined the Group in January 1998 as President & Chief Operating Officer.

Mr. Ng is a Fellow of the United Kingdom-based Chartered Institute of Bankers (FCIB), Institute of Chartered Secretaries & Administrators (FCIS) and the Chartered Management Institute (FCMI) as well as a graduate of the Pacific Rim Bankers Program, Stanford/NUS Executive Program, University of Hawaii-Advanced Management Program and the University of Michigan-Southeast Asia Business Program.

He worked for over 30 years with various local and foreign banks, and attended executive management training in both Australia and USA. He spent 17 years with Wells Fargo Bank, NA, San Francisco and Bank of Hawaii, Honolulu in general management positions in the region. At Bank of Hawaii, he held positions such as Senior Vice President and Country Manager of the South and Southeast Asia Region (including India), General Manager of the Singapore Offshore Branch, Regional General Manager of its Hong Kong Branch (including China and Taiwan) and Managing Director of Hawaii Financial Corporation (HK) Ltd.

Mr. Ng was appointed to the Board of Trustees of AFRASIA Business Council (a TICAD’s initiative) in April 2005, and serves as the Chairman of its Investments & Trade Commission. Over the last 3 years, Mr. Ng has been on the panel for UNDP/TICAD/INWENT/WORLD BANK’S forums on Africa developments in Mauritius, Cameroon, Paris, Bonn and Tanzania.

Jeffrey Gondobintoro, 37, Executive Director

Mr. Jeffrey Gondobintoro was appointed Executive Director and Chief Operating Officer on 9 September 2003 and was last re-elected a Director on 28 April 2006. He has served as Managing Director of our subsidiary, GMG Investment (S) Pte Ltd since 28 January 1994. Mr. Jeffrey

Board of Directors and Key Management



Gondobintoro is also Chairman and Director of GMG International SA, Cameroon, Director of both Hevecam SA, Cameroon and Tropical Rubber Cote d’lvoire and President Director of P.T. Bumi Jaya, Indonesia.

Mr. Jeffrey Gondobintoro graduated from the University of Denver in USA with a Bachelor’s degree in Business Administration in 1994. Since 1995, he has been involved in the marketing and management of natural rubber plantation and in the setting up and management of natural rubber processing plant of the Group. In 2007, he spearheaded the Indonesian growth strategy, and successfully concluded the Group’s 51% joint-venture in P.T. Bumi Jaya, Indonesia, which began operations in late August 2007.

Danny Lo Kan Yu, 60, Executive Director

Mr. Lo has been an Executive Director and Chief Financial Officer since 23 July 1999 and was last re-elected a Director on 28 April 2006. Mr. Lo is also Executive Director of GMG Holdings Ltd and Director of GMG International SA, Cameroon, Hevecam SA, Cameroon and Tropical Rubber Cote D’lvoire.

Mr. Lo is a member of the Institute of Certifi ed Public Accountants in Singapore and the Institute of Chartered Accountants in England and Wales. He was trained at Deloittes Haskins & Sells in England.

Mr. Lo was the Chief Financial Officer of the Cathay Organisation Group of companies in Singapore from 1984 to 1995, and had provided consultancy services to the GMG Group from 1995 to 1999 through RML Management Consultants.

Mr. Lo is also an independent non-executive director of Creative Master Bermuda Ltd, a company listed on the SGX Mainboard, since 19 December 2003.

Ong Kian Min, 47, Independent Non-Executive Director

Mr. Ong has been an Independent Non-Executive Director since 19 November 1999 and was last re-elected a Director on 29 April 2005. Mr. Ong is the Chairman of both the Nominating Committee and Remuneration Committee and a Member of the Audit Committee.

Mr. Ong is currently an Advocate and Solicitor and practices law as a Consultant with Drew & Napier LLC, a Singapore law firm. He was called to the Bar of England and Wales in 1988 and to the Singapore Bar the following year. Mr. Ong is also an independent director of several other companies listed on the SGX, including Breadtalk Group Ltd, Food Empire Holdings Ltd, OSIM International Ltd and Robinson & Co. Ltd.

Mr. Ong has been an elected Member of Parliament since January 1997 and serves as Vice Chairman of the Government Parliamentary Committee (GPC) for Transport. In 1979, he was awarded the President’s Scholarship and Singapore Police Force Scholarship. He holds a Bachelor of Laws (Honours) external degree from the University of London and a Bachelor of Science (Honours) degree from the Imperial College of Science and Technology in England.



Tay Puan Siong, JP, 59, Independent Non-Executive Director

Mr. Tay has been an Independent Non-Executive Director since19 November 1999 and was last re-elected a Director on 27 April 2007. Mr. Tay is the Chairman of the Audit Committee and a Member of both the Nominating Committee and Remuneration Committee.

Mr. Tay was Executive Vice President of Singapore Bus Service (1978) Ltd (1971 – 1996) and Executive Deputy Chairman of L&M Group Investments Ltd (1996 – 1999). He is currently a Non-Executive Director of three other companies listed on the SGX. At Stamford Tyres Corporation Limited, he is Chairman of the Audit Committee and a Member of the Nominating Committee. At Superior Multi-Packaging Limited, he is a Member of the Audit Committee and the Executive Resource and Compensation Committee. At Times Publishing Limited, he is Chairman of the Audit Committee.

Mr. Tay holds a Bachelor of Business Administration degree (1971) from the then University of Singapore, attended the Harvard Business School Program for Management Development in 1984 and is a Member of the Chartered Institute of Logistics and Transport.

Mr. Tay has been a Justice of the Peace since 1994.

Key Management

GMG INVESTMENT (S) PTE LTD

Jeffrey Gondobintoro, 37, Executive Director

Mr. Jeffrey Gondobintoro has been the Managing Director of GMG Investment (S) Pte Ltd since 28 January 1994. He was appointed Chief Operating Officer of GMG Global Ltd on 9 September 2003. He is also Chairman and Director of GMG International SA, Cameroon, Director of both Hevecam SA, Cameroon and Tropical Rubber Cote d’lvoire and President Director of P.T. Bumi Jaya, Indonesia.

Mr. Jeffrey Gondobintoro graduated from the University of Denver in USA with a Bachelor’s degree in Business Administration in 1994. Since 1995, he has been involved in the marketing and management of natural rubber plantation and the setting up and management of natural rubber processing plant of the Group. In 2007, he spearheaded the Indonesian growth strategy, and successfully concluded the Group’s 51% joint-venture in P.T. Bumi Jaya, Indonesia, which began operations in late August 2007.

HEVECAM SA, CAMEROON

Alain T. Young, 55, Director and Chief Executive Offi cer

Mr. Young joined the Group in July 2007, as Director and Chief Executive Offi cer (Director General) of Hevecam SA, Cameroon and Director General of GMG International SA, Cameroon.

Mr. Young holds a Bachelor degree in Finance and Accounting (Concordia University, Montreal – Canada) as well as a professional member of the Certifi ed Management Accountant (CMA) association of Canada.

Board of Directors and Key Management cont’d



He acquired extensive leadership and general management experiences and held various international management positions with multinationals in USA, Canada, Middle East, and Africa – (Ivory Coast, Cameroon and Uganda).

His 28 years of business experiences cover a wide range of business activities, amongst others, petroleum product distribution, oil field equipment maintenance, corrugated box manufacturing, truck assembly, steel mills, electronic high-tech and banking.

Mr. Young also brings with him experience in the African markets having worked in Ivory Coast (1999 – 2001), Cameroon (2001 – 2004) and Uganda (2004 – 2007), where he served respectively as Chief Financial Offi cer, Managing Director and Country Chairman of Chevron Inc., a large USA multinational operating in the Petroleum and Energy Industry.

Jean-Marc Seyman, 61, Director

Mr. Seyman has retired as the Chief Executive Officer (Director-General) of Hevecam SA, Cameroon and Directeur General of GMG International SA, Cameroon in August 2007 after having served 7 years. Mr. Seyman remains as a Director of Hevecam SA, Cameroon and is responsible for the Group future new plantation development project in Cameroon, Africa.

A graduate in Economic Studies from C.N.A.M. (France), he has over 30 years of experience and an established reputation in the natural rubber industry. He spent 20 years with Paris-based Safi c-Alcan and held various executive management positions whilst working in Paris and Kuala Lumpur and served an 8-year stint in Singapore as its Group’s Managing Director for Far East. He last served Safi c-Alcan in Paris as its Vice President & Group Director of rubber/latex operations. He has also held several other positions including Chief Executive Offi cer, Fine Shine Group in USA and Contech Nigeria Ltd in Lagos involving plastic packaging operations, chemical trading, plastic resins distribution and marketing of natural rubber. He has indepth international natural rubber experience both in management and marketing.

Yeo Siang Cher, 49, Chief Financial Offi cer

Mr. Yeo joined the Group in October 2007 as Chief Financial Offi cer of Hevecam SA.

Prior to his appointment to the Group, he has served as Chief Financial Offi cer, Group Financial Controller and Finance Director in Multinational companies spread across the Semiconductor, Precision Engineering, Building & Construction and Financial Industries. Mr. Yeo has been in the industry for more than 25 years and brings with him vast experience having fi rst started as a Cost Accountant to heading the fi nance and IT Departments of these companies. Notable amongst the international multinational are Advanced Micro Devices, Applied Materials and locally listed companies being Chartered Semiconductor and Broadway Industrial Group.

Mr. Yeo is a Fellow member of the Chartered Institute of Management Accountants (CIMA), UK and a member of an Institute of Certifi ed Public Accountants (ICPAS) Singapore.



TROPICAL RUBBER COTE D’IVOIRE

Joseph Desire Biley, 56, Director and Chief Executive Offi cer

Mr. Biley is President Director-General of Tropical Rubber Cote d’lvoire.

He has been a Director of Tropical Rubber Cote d’lvoire since its incorporation in 1995 and joined the Group as President Director-General of Tropical Rubber Cote d’lvoire in 1997. Prior to that he was the Director of Public Affairs in Nestle in-charge of Regional Development. Over the past 23 years, he has held positions such as Assistant to Managing Director, Division Leader, Finance and Administration Deputy Manager, Finance and Control Manager, Operations Director within the Nestle Group in Cote d’lvoire. He is also the President of the Board of Directors of the Ivorian Association for Standardisation, Chairman of the National Federation of Industries and Services of Cote d’lvoire, Vice Chairman of the National Board of Employers in Cote d’lvoire, Rapporteur of the Worldbank’s Task Force on Internal and External competitiveness listed in the who’s who 100 in Cote d’Ivoire. He was recently appointed by the profession (APROMAC) to chair the Ivorian Rubber Development Fund with the initiative to spearheading the development of additional 300,000 hectares of new plantations and plantations access roads in Ivory Coast.

P.T. BUMI JAYA, INDONESIA

Tjahaja Gondosetiawan, 38, Director

Mr. Tjahaja Gondosetiawan has been a Director of P.T. Bumi Jaya since 2005. He remains as a Director following the Group successful acquisition of a 51% stake in P.T. Bumi Jaya in April 2007.

A graduate in Business Administration from the University of Southern California, Los Angeles, USA, he has served as Director and Managing Director in various Indonesian companies covering various industries such as sugar machinery marketing, forwarding business, cement, hotel, container transportation and logistic industry between 1991 through 2005.

He is currently responsible for managing the daily operations of P.T. Bumi Jaya.

Board of Directors and Key Management cont’d



GMG Holdings Ltd (Singapore)

GMG Investment (S) Pte Ltd (Singapore)

100%

100%

100%

90%

GMG International SA (Cameroon)

Hevecam SA (Cameroon)

Corporate Structure

GMG Global Ltd (Singapore)

Tropical Rubber Cote d’lvoire (Ivory Coast)

P.T. Bumi Jaya(Indonesia)

51.2%51%



GMG Global Ltd

Yudson GondobintoroElson Ng Keng KwangJeffrey GondobintoroDanny Lo Kan YuOng Kian MinTay Puan Siong

GMG Holdings Ltd

Yudson GondobintoroElson Ng Keng KwangDanny Lo Kan Yu

GMG Investment (S) Pte Ltd

Jeffrey GondobintoroYudson GondobintoroMieke Bintati Gondobintoro

GMG International SA, Cameroon

Jeffrey GondobintoroElson Ng Keng KwangDanny Lo Kan Yu

Hevecam SA, Cameroon

Nyokwedi Malonga ElieJeffrey GondobintoroElson Ng Keng KwangDanny Lo Kan YuMieke Bintati GondobintoroAlain T. YoungJean Marc SeymanBiloa GatienZang Martial Valery

Tropical Rubber Cote d’lvoire

Biley Joseph-DesireJeffrey GondobintoroElson Ng Keng KwangDanny Lo Kan YuMieke Bintati GondobintoroYace Come SergeMeite SouleymaneAkue Nicole-RaymondeNiamke JosephKoffi Ahoutou Emmanuel

P.T. Bumi Jaya, Indonesia

Board of Commissioners

Djoko Nirmala LabbaikaYudson GondobintoroElson Ng Keng Kwang

Board of Directors

Jeffrey GondobintoroTjahaja Gondosetiawan

Corporate Directorship



Chairman’s Message

The Group witnessed natural rubber prices hovering around US$2,000 per ton during the fi rst three quarters of FY2007, with prices surging since mid-August to end at US$2,502 for the year.

World consumption continued to increase at an annual rate of 4.3% to 9.65 million tons, driven by stronger demand from Asian markets. The growth in demand outstripped supply.

In FY2007 the Group expanded in Asia, acquiring a 51% stake with management control in P.T. Bumi Jaya, Indonesia, which owns a newly set-up processing facility of 30,000 metric tons annual capacity in Tanjung Area, Tabalong District, South Kalimantan. The Company commenced operations in late August 2007. At Tropical Rubber, which is our operations in Ivory Coast in West Africa, our expansion strategy in external raw material procurements was highly successful, benefi ting the Group with a substantial increase in supply.

Unfortunately, production from the Group’s major asset, Hevecam in Cameroon in Central Africa was affected by lower yields, and lost collection due to very wet and erratic weather conditions throughout the year. As a result, the Group’s internal and external latex supply was reduced sharply.

In line with our growth strategy, the Group attempted to purchase two rubber plantations in Asia and Africa. The proposed acquisitions, however, did not materialize due to price and operational considerations.

The Group’s net profi t attributable to shareholders was S$22,051,721 for FY2007, which was a decrease of S$20,905,613 over FY2006. Our FY2007 performance was adversely affected by lower yields, wet weather, strong euro and United States currencies as well as increased fuel costs.

The Group’s on-going outstanding debt of S$12.6 million, including interests due to the creditors of Electro Magnetics (1992) Ltd, was fi nally discharged in September 2007.

Moving forward, the Group will continue to explore strategic partnerships to propel its growth. The Group will also look to Africa for additional land concessions for its future new developments, as well as other expansion opportunities in Asia. In 2008, the Group will also be preparing to undertake its 2009-2015 replanting programmes covering 5,400 hectares and the inter-related rubber-wood processing and sale.

I am pleased to report that the Board has proposed a fi rst and fi nal one-tier tax exempt dividend payout of 0.25 cents per ordinary share to be paid in respect of the FY2007 performance.

The Board and Management express their deep appreciation to shareholders, customers, business partners and associates, management and staff for their continued commitment, contributions and support in 2007. I also thank the Board of Directors for their leadership and support.

Yudson Gondobintoro

Chairman of the Board



The Board of Directors (the “Board”) is committed to maintaining a high standard of corporate governance within the Company & its subsidiaries (the “Group”) and confi rms that the Company has adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005 (the “Code”).

1. Board Matters

a) Board Composition

Presently, the Board comprises six Directors, one of whom is Non-Executive Director, and two of whom are Independent Non-Executive Directors.

Executive Directors: Mr. Elson Ng Keng Kwang Mr. Jeffrey Gondobintoro Mr. Danny Lo Kan Yu

Non-Executive Directors: Mr. Yudson Gondobintoro Chairman Mr. Ong Kian Min Independent Mr. Tay Puan Siong Independent

The Board is of the view that its current size is appropriate, taking into account the nature and scope of operations of the Group.

As a Group, the Directors bring with them a broad range of expertise and experience in areas such as accounting, fi nance, legal, business and management experience, industry knowledge, strategic planning experience and customer-based experience and knowledge. The diversity of the Directors’ experience allows for the useful exchange of ideas and views. The profi le of all Board members is set out in the section entitled ‘Board of Directors’.

The Non-Executive Directors constructively challenge Management and assist in the development of proposals on strategy.

b) Chairman and Executive Directors

Currently, the roles of the Chairman and Chief Executive Offi cer (CEO) are separated. They each perform separate functions to ensure that there is an appropriate balance of power and authority, and that accountability and independent decision-making are not compromised.

The Chairman who is non-executive manages the business of the Board and in consultation with the Executive Directors, sets Board meetings at appropriate intervals during the year. The Chairman is also responsible for the workings of the Board and ensures the integrity and effectiveness of the governance process of the Board. The Chairman is also responsible for the exercise of control of the quality, quantity and timeliness of information fl ow between the Board and Management.

Corporate Governance



b) Chairman and Executive Directors cont’d

The CEO and Executive Directors manage the Group’s day-to-day operations.

All major decisions made by the CEO and Executive Directors are endorsed by the Board.

c) Role of the Board of Directors The Board sets broad and overall business objectives of the Group,

provides guidance to Management, deals with major transactions that require the Board’s approval and monitors the performance of management. Board’s approval is required for matters likely to have a material impact on the Group’s operations as well as matters other than in the ordinary course of business.

The Board met 3 times in FY2007 and as and when deemed appropriate Management meets regularly to attend to operational matters. The Company’s Articles of Association provide for meetings to be held via telephone or other means of communication (such as video conferencing).

To assist in the execution of its responsibilities, the Board has established the following Board Committees:

Audit Committee Nominating Committee Remuneration Committee

Details of Directors’ attendance at Board and Board committees’ meetings held on FY2007 are summarized in the table below:

Meeting of Board Audit Nominating Remuneration Committee Committee Committee Total held in FY2007 3 3 1 1

Elson Ng Keng Kwang 2 – – –

Jeffrey Gondobintoro 3 – – –

Danny Lo Kan Yu 3 – – –

Yudson Gondobintoro 3 3 1 1

Ong Kian Min 3 3 1 1

Tay Puan Siong 3 3 1 1

All Directors have independent access to the Group’s senior management and the Company Secretary. All Directors are provided with complete and adequate information prior to Board meetings and on an ongoing basis. The Company Secretary provides secretarial support to the Board, ensure adherence to Board procedures and relevant rules and regulations which are applicable to the Company. The Company Secretary or her representative attends all Board meetings.



c) Role of the Board of Directors cont’d

Should Directors, whether as a group or individually, need independent professional advice to fulfi ll their duties, such advice will be obtained from a professional entity of the Director’s choice and the cost of such professional advice will be borne by the Company.

All newly appointed directors would be provided with background information on the Group’s history, business operations and policies to ensure that they are familiar with the Group structure, its business and operations. During the year under review, there were no new appointments to the Board.

The Company relies on Directors to update themselves on new laws, regulations and changing commercial risks.

The Board provides shareholders with a detailed and balanced explanation and analysis of the Company’s performance, position and prospects in the Company’s half-year and full-year fi nancial results.

Management provides the Board with management accounts of the Group’s performance, position and prospects on a regular basis.

d) Board Committees

(i) Audit Committee (“AC”)

The AC comprises three Non-Executive Directors, a majority of whom are Independent Non-Executive Directors. The members of the AC are:

Mr. Tay Puan Siong Chairman Mr. Ong Kian Min Mr. Yudson Gondobintoro

The Board is of the view that the AC members have adequate financial management expertise and experience to discharge the AC’s functions.

The AC met 3 times in FY2007 and as and when deemed appropriate to carry out its functions which are set out in Note 9 of the Report of the Directors.

The AC has ful l access to and the co-operation of Management, has full discretion to invite any Director or Executive Officer to attend its meetings and has been given adequate resources to enable it to discharge its functions.

The AC has reviewed the non-audit services provided by the external auditors, Messrs Deloitte & Touche and is of the opinion that the provision of such services does not affect their independence.

Annually, the AC meets with the external auditors and internal auditor separately, without the presence of Management.

Corporate Governance cont’d



d) Board Committees cont’d

The AC had recommended the re-appointment of Messrs Deloitte & Touche as external auditors at the forthcoming Annual General Meeting.

The Company has in place a whistle-blowing programme where employees may in confidence, report possible improprieties which may cause financial or non financial loss of the Company. The object is to ensure that arrangements are in place, for the independent investigation of such concerns and for appropriate follow-up action.

(ii) Nominating Committee (“NC”)

The NC, regulated by a set of written terms of reference, comprises three members, a majority of whom are Independent Non-Executive, as follows:

Mr. Ong Kian Min Chairman Mr. Tay Puan Siong Mr. Yudson Gondobintoro

The NC is chaired by Mr Ong Kian Min, an Independent Non-Executive Director, not associated with a substantial shareholder.

The NC reviews and makes recommendations to the Board on all nominations for new appointments and re-appointments to the Board, as well as makes recommendations to the Board for the continuation of services of any director who has reached the age of seventy (70) years, where appropriate. The NC also ascertains the independence of Directors under the Code’s defi nition of what constitutes an independent director and evaluates the Board’s performance on an annual basis.

The NC had reviewed the independence of each Director for FY2007 in accordance with the Code’s definition of Independence and is satisfi ed that one-third of the Board comprised Independent Non-Executive Directors.

In accordance with the Company’s Articles of Association, each Director is required to retire at least once in every three years by rotation and all newly appointed Directors will have to retire at the next Annual General Meeting following their appointments. The retiring Directors are eligible to offer themselves for re-election. The NC had recommended the re-appointment of two Directors, namely Mr. Ong Kian Min and Mr. Yudson Gondobintoro at the forthcoming Annual General Meeting. The Board has also accepted the NC’s recommendation and accordingly, the above-mentioned Directors will be offering themselves for re-election.




(iii) Remuneration Committee (“RC”)

The RC, regulated by a set of written terms of reference, comprises three members, a majority of whom are Independent Non-Executive Directors, as follows:

Mr. Ong Kian Min Chairman Mr. Tay Puan Siong Mr. Yudson Gondobintoro

The RC reviews and recommends to the Board (a) the remuneration packages of all Directors and senior executives of the Group, (b) directors’ fees for Non-Executive Directors, which are subject to shareholders’ approval at the Annual General Meeting, and (c) all service contracts of the Executive Directors. The RC also has access to external professional advice on remuneration matters, if required.

The RC had recommended to the Board an amount of S$160,000 as directors’ fees for the year ending December 31, 2008 to be paid quarterly in arrears. The Board will table this at the forthcoming Annual General Meeting for shareholders’ approval.

Other than the Non-Executive Directors’ fees which are set in accordance within a remuneration framework, the Board has decided that the policy on annual remuneration will not be tabled at the forthcoming Annual General Meeting.

The number of Directors of the Company whose remuneration falls within bands of S$250,000 is as follows:

Year ended Year ended 31.12.2007 31.12.2006

$500,000 to $749,999 2 2 $250,000 to $499,999 1 1

Below $250,000 3 3

6 6

Although the Code recommends the disclosure of the names of individual Directors and key executives within the bands of S$250,000, the Board is of the opinion that details of remuneration of individual Directors and key executives are confi dential and hence disclosure of such information would not be in the interest of the Company. With the exception of Mr. Jeffrey Gondobintoro, there is no employee in the Company or the Group who is related to a Director whose remuneration exceeds S$150,000 during the fi nancial year under review.Mr. Jeffrey Gondobintoro is the brother of Mr. Yudson Gondobintoro, Non-Executive Chairman.





The existing service agreements for the Executive Directors, renewed on (1st September 2006), are for a period of 3 years. The service agreement provides for termination by the Executive Directors or the Company upon giving not less than 3 months’ notice in writing.

For the fi nancial year under review, the Company does not have any long-term incentive or share option scheme in place.

2. Internal Audit (“IA”)

The Group has in place an internal auditor to undertake the IA function. The internal auditor reports primarily to the Chairman of the AC. The internal auditor has adopted the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors.

The AC, on an annual basis, will assess the effectiveness of the IA by examining the scope of the IA work and its independence of the areas reviewed, the internal auditor’s report and his relationship with the external auditors.

The AC will also meet the internal auditors without the presence of Management annually.

3. Communication with Shareholders

In line with continuous disclosure obligations, the Company is committed to regular and proactive communication with its shareholders. It is the Board’s policy that the shareholders be informed of all major developments that impact the Group.

Information is communicated to the shareholders on a timely basis through:

(a) SGXNET releases and press releases on major developments of the Group;

(b) fi nancial statements containing a summary of the fi nancial information and affairs of the Group for the half-year and full-year via SGXNET;

(c) annual reports that are sent to all shareholders; and

(d) notices of and explanatory notes for annual general meetings and extraordinary general meetings.

At the Annual General Meeting, shareholders are given opportunities, to voice their views and seek clarifi cations. There are separate resolutions on each substantially separate issue.

The Chairmen of the AC. RC and NC (or in their absences, an alternate member) as well as the external auditors will be present and available at the forthcoming Annual General Meeting to address any queries raised by the shareholders.



4. Securities Transactions

The Group has adopted an internal code of conduct to provide guidance to its offi cers regarding dealings in the Company’s securities. The Directors and officers of the Company and its subsidiaries have been informed not to deal in the Company’s shares whilst in possession of price sensitive information and during the periods commencing at least two weeks before the announcement of the Company’s results for each of the fi rst three quarters of its fi nancial year and one month before the announcement of the Company’s full-year results and ending on the day of the announcement of the relevant results.

5. Interested Person Transactions

The Company has adopted an internal policy governing procedures for the identifi cation, approval and monitoring of interested person transactions. All interested person transactions are subject to review by the AC.

Details of interested person transactions and their aggregate value for the twelve months from January 1, 2007 to December 31, 2007 were as follows:

Name of interested person Aggregate value

GMG Exim USA $ 777,332

Pannindo Land Pte Ltd $ 53,812

PT Asuransi Rama Satria Wibawa $ 110,645

The Company does not have a shareholders’ mandate for the interested person transactions.

6. Material Contracts

There were no material contracts during the fi nancial period as required to be reported under Rule 1207(8).

7. Financial Risk and Management

(a) Financial risk management objectives and policies

The Group has documented risk management policies. These policies set out the group’s overall business strategies and its risk management philosophy. The Group’s overall risk management programme seeks to minimise potential adverse effects of fi nancial performance of the group. Risk management is carried out by the relevant risk offi cers under the policies approved by the Board.

The Group’s activities expose it to a variety of fi nancial risks, including the effects of changes in world rubber prices, foreign currency exchange and interest rates. The Group uses derivative fi nancial instruments such as forward foreign exchange contracts and natural rubber price swaps to reduce certain exposures. The Group does not hold derivative fi nancial instruments for speculative purposes.




7. Financial Risk and Management cont’d

Market risk Market risk arises from the volatility of world rubber prices. From

time to time, the group enters into natural rubber price swaps to manage this risk, restricted to no more than 10% of the annual sales tonnage.

Foreign exchange risk The Group transacts business in various foreign currencies,

including the United States dollar, Euro and CFA Francs, which is pegged to the Euro, and is therefore exposed to foreign exchange risk. The Group uses forward contracts to manage its exposure to foreign currency risk in the local reporting currency.

The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk.

Interest rate risk The primary source of the interest rate risk of the Group and

Company relates to interest bearing bank deposits, bank borrowings, long-term loans and fi nance leases. Interest bearing bank deposits are short-term in nature and with the current interest rate level, any variation in the interest rates will not have a material impact on the net income of the company. The interest rates on bank borrowings, long-term loans and fi nance leases which are fi xed and are disclosed in Notes 14, 17 and 18 to the fi nancial statements.

Credit risk The Goup’s principal financial assets are cash and bank

balances and trade and other receivables.

The credit risk on liquid funds and derivative fi nancial instruments is limited because the counterparties have high credit ratings.

Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identifi ed loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash fl ows.

The Group has signifi cant trade receivables from two outside party customers amounting to $16,453,642 (2006 : $17,870,932) or 70% (2006 : 77%) of total trade receivables balance as at the year end.

Liquidity risk With the exception of the matter described in Note 1 to the

fi nancial statements, the Group maintains suffi cient cash and cash equivalents, and internally generated funds to fi nance its activities.



2007 2006 $ $ Financial Results Turnover 166,398,041 175,932,078

Profi t before tax 31,391,296 55,411,157 Profi t after tax but before minority interests 27,280,926 49,480,094

Profi t after tax and after minority interests 22,051,721 42,957,334

Financial Position Non-current assets 281,359,895 265,979,615 Net current assets / (liabilities) 60,786,809 44,260,646 Non-current liabilities (32,387,906) (25,580,090) Assets employed 309,758,798 284,660,171

Share capital 169,616,006 169,616,006 Share premium – – Reserves 105,873,247 87,317,538 Minority interests 34,269,545 27,726,627 Total funds invested 309,758,798 284,660,171

Per Share Data Earnings before tax (cents) 1.55 2.74 Earnings after tax and minority interests (cents) 1.09 2.13 Gross dividend per share (cents) 0.25 0.5 Net tangible assets (cents) 13.63 12.72

Financial Ratios Return on shareholders’ funds: (a) Before tax (%) 11.39% 21.57% (b) After tax but before minority interests (%) 9.90% 19.26% Debt-equity ratio 1:6.09 1:5.30

Group Financial Highlights



Operations Overview

Turnover recorded for the year ended 31 December 2007 was $166,398,041 with a total of 53,205 tons of rubber sold. In the preceding year turnover was $175,932,078 with 55,659 tons sold.

Productions from our Cameroon plantation had been adversely affected by lower yields and bad weather conditions throughout 2007. The decline in production in Cameroon had been partially offset by increased tonnage processed at our Ivory Coast operations and also the maiden contributions from our new factory in Kalimantan which commenced operations in late August 2007.

Cost of sales and operating expenses totaled $134,191,898 for the year compared with $120,257,818 in the previous year. The rise of the Euro currency had impacted our cost of operations by approximately 5.0%.

At the local operating levels, we have been able to contain our cost of operations.

The weakening of the USD also has an impact to our reporting currency being the Singapore Dollar.

As such, profi t before tax dropped to $31,391,296 from $55,411,157 in the previous year.

HEVECAM SA, CAMEROONHevecam’s fi eld production was adversely affected by very wet weather and a decline in trees yield. This affected the overall tapping, collections, and logistics processes as well as resulting in collection losses via wash-outs of the latex cups. External rubber supplies for processing had been drastically reduced as well. As a result of these major factors, and coupled with lesser inventory carried over from 2006; Hevecam’s 2007 exports only registered 24,762 metric tons versus 35,799 metric tons previously. Despite the lower production yields and external supplies, Hevecam continue to maintain its lead as the major natural rubber exporter in Cameroon.

The unprecedented strong Euro currency, high fuel prices, and increased disruption in power supply further affected the 2007 performance of Hevecam. The other challenges that Hevecam faced are the high domestic transportation/FOB charges and high social services expenses.

In addition, its 2,000 hectares new plantings, which commenced in late 2005 was also affected by the weather conditions, and hence the balance of 700 hectares plantings is expected to carry into 2008. Hevecam plans to commence a 5,000 hectares progressive re-planting programme from late 2009, and to establish its maiden rubber-wood operations. Hevecam is also in the process of establishing additions to its land-bank for future expansions.

TROPICAL RUBBER, COTE d’lVOIRE (TRCI)TRCI saw another successful year in expanding its rubber procurement activities with co-operatives, smallholders and out-growers. Internal fi eld productions also increased due to additional hectares of maturing trees placed in tapping. Total external rubbers sourced during the year totalled 22,989 metric tons and constituted 94% of TRCI 24,366 metric tons of raw material supplies. TRCI exported 24,996 metric tons of rubber for fi nancial year 2007. TRCI continues to hold its position as Ivory Coast’s second largest buyer of smallholders’ rubber, being a committed supporter of smallholders’ training programme.

Moving into 2008, TRCI is in process of investing in another new processing line of 30,000 metric tons to position itself to meet its future expansion needs.

Although civil dispute between the North and the government-controlled South remains a potential problem, the recent co-operation of some forms of power-sharing between the two factions prior to the upcoming general election had somewhat cool down the sentiments of unrest.



P.T. BUMI JAYA, INDONESIAThe Group entered a 51% joint-venture in Bumi Jaya in April 2007. The JV’s processing plant with an annual capacity of 30,000 metric tons began its maiden operations in late August 2007. Though a new entrant in South Kalimantan, the strategy of locating the JV’s processing plant near to smallholders’ sources and routes was advantageous. The momentum of supplies from smallholders over the fi rst four months of its operation had been very promising. A total of 5,255 metric tons of dry rubber supplies had been secured over this period, and a total of 3,447 metric tons had been exported. Currently, all rubber produced in Bumi Jaya are of tyre grade and exported mostly to Asian buyers.

GMG’s investment in P.T. Bumi Jaya marked its fi rst entry into the Indonesian rubber segment, and will serve as its fi rst step towards its ambition and growth strategy in Indonesia, which is the world’s second largest natural rubber producer. Indonesia presents growth opportunities to the Group and serves as the Group’s entry point into the promising Asian market.

Operations Overview cont’d



2007 OVERVIEW OF THE NATURAL RUBBER (NR) PRICESGrowth in demand for natural rubber outstripped supply, with global inventories declining this year. With its fast-growing automobile industry, China saw continued increases in its consumption of rubber. In other parts of Asia, tyre consumption (particularly the passenger car tyre sector) also saw an upward trend whereas the demand from other regions remain largely unchanged.

Total world consumption was estimated at around 9.65 million tons, representing a growth rate of 4.3%. Globally, natural rubber supply only saw an increase in Indonesia, while other major producers such as Thailand, Malaysia and India faced a decline. Generally, the growth in production was affected by bad weather.

Natural rubber prices hover around the US$2,000 per ton throughout the fi rst three quarters of 2007. A sharp price run-up started from mid-August and continued through the end of 2007, with natural rubber prices closing at US$2,502 per ton as at 28th December 2007. This was due to the three key factors 1) short-term supply concerns on the back of strong consumption, 2) rampant oil prices that strongly lifted the non-physical market prices, infl uencing the sentiments in the physical market, 3) the weakening of the US currency.

Despite global economic uncertainties in 2008, lead by the economic turmoil in US, the rubber industry as a whole remains optimistic that there will be continued strong growth in emerging markets, which will continue to provide support for natural rubber prices at attractive levels.

OUTLOOK FOR 2008

Moving into 2008, the Group’s performance is highly dependent on:

• the sustainability of natural rubber prices and production volume which could impact on sales;

• the yields from the plantations;

• the weather conditions that could impact on production both from internal and external supply sources;

• the strength of the Euro currency and United States currency which has a direct impact on the Group’s operating costs and profi tability;

• the stability of the operating cost vis-à-vis to the recent rise in oil prices, and future increases, infl ation and any implementation of new fi scal measures in the Cameroon, Ivory Coast and Indonesia;

• the capability to maintain current raw material supplies from smallholders, co-operatives and out-growers; and

• the political conditions in Ivory Coast and Cameroon

The Directors are of the opinion that while natural rubber prices will be volatile in 2008, the average price level will be maintained at 2007 levels unless global demand for natural rubber reduced signifi cantly due to a major recession in the US.

Barring unforeseen circumstances, the Directors expect the results for the Group performance to be positive for FY2008.



The directors present their report together with the audited consolidated fi nancial statements of the group and balance sheet and statement of changes in equity of the company for the fi nancial year ended December 31, 2007.

1 DIRECTORS

The directors of the company in offi ce at the date of this report are:

Yudson Gondobintoro Elson Ng Keng Kwang Jeffrey Gondobintoro Danny Lo Kan Yu Ong Kian Min Tay Puan Siong

2 CORPORATE GOVERNANCE

The company is committed to maintaining a high standard of corporate governance within the group. Good corporate governance establishes and maintains a legal and ethical environment in the group which strives to preserve the interests of all stakeholders.

3 BOARD OF DIRECTORS

The Board oversees the business affairs of the group, approves the fi nancial objectives and the strategies to be implemented by management and monitors standards of performance and issues of policy, both directly and through its committees.

The Board comprises 6 directors, 3 of whom hold executive positions:

Executive Directors: Elson Ng Keng Kwang (President and Chief Executive Offi cer) Jeffrey Gondobintoro (Chief Operating Offi cer) Danny Lo Kan Yu (Chief Financial Offi cer)

Non-Executive Directors: Yudson Gondobintoro (Non-Executive Chairman) Ong Kian Min Tay Puan Siong

The Board meets at least twice annually and as and when deemed appropriate. The Board approves the group’s strategic plans, key business initiatives, major investments and funding decisions; it reviews the group’s fi nancial performance and evaluates the performance and determines the compensation of senior management. These functions are carried out by the Board directly or through committees of the Board which have been set up to support its work.

4 SECURITIES TRANSACTIONS

The group has issued a Policy on Share Dealings to all employees of the group, setting out the implications of insider trading and the recommendations of the Best Practices Guide issued by the Singapore Exchange Securities Trading Limited. The group has adopted a code of conduct to provide guidance to its offi cers with regard to dealing in the company’s shares.

GMG Global Ltd & Its SubsidiariesReport of The Directors



5 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the fi nancial year nor at any time during the fi nancial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefi ts by means of the acquisition of shares or debentures in the company or any other body corporate.

6 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding offi ce at the end of the fi nancial year had no interests in the share capital 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 except as follows:

Shareholdings Shareholdings in registered in the names which directors are of directors or nominees deemed to have an interest

Names of directors and company in which At beginning At end At beginning At end interests are held of year of year of year of year

GMG Global Ltd Number of ordinary shares

Yudson Gondobintoro 7,320,000 7,320,000 1,226,707,875 1,226,707,875

Jeffrey Gondobintoro 4,600,000 5,380,000 1,226,707,875 1,226,707,875

Danny Lo Kan Yu 1,500,000 1,500,000 – –

Elson Ng Keng Kwang 2,500,000 2,500,000 – –

By virtue of Section 7 of the Singapore Companies Act, Mr Yudson Gondobintoro and Mr Jeffrey Gondobintoro are deemed to have an interest in the ordinary shares of all the subsidiaries held by the company.

The directors’ interests in the shares of the company as at January 21, 2008 were the same as at December 31, 2007.

7 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the fi nancial year, no director has received or become entitled to receive a benefi t which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the company or a related corporation with the director or with a fi rm of which he is a member, or with a company in which he has a substantial fi nancial interest except for salaries, bonuses and other benefi ts as disclosed in the fi nancial statements. One of the company’s directors received remuneration from a subsidiary in his capacity as a director of that subsidiary company.

There were also certain other transactions (shown in the fi nancial statements) with corporations in which certain directors have an interest.



8 SHARE OPTIONS

(a) Options to take up unissued shares

During the fi nancial year, no option to take up unissued shares of the company or any corporation in the group was granted.

(b) Options exercised During the fi nancial year, there were no shares of the company or any corporation in the group

issued by virtue of the exercise of an option to take up unissued shares.

(c) Unissued shares under option

At the end of the fi nancial year, there were no unissued shares of the company or any corporation in the group under option.

9 AUDIT COMMITTEE

The Audit Committee of the company is chaired by Mr Tay Puan Siong, an independent non-executive director, and includes Mr Ong Kian Min, also an independent non-executive director, and Mr Yudson Gondobintoro, a non-executive director. The Audit Committee has met 3 times since the last Annual General Meeting (“AGM”) and has reviewed the following, where relevant, with the executive directors and external and internal auditors of the company:

a) the audit plans and results of the internal auditors’ examination and evaluation of the group’s systems of internal accounting controls;

b) the group’s fi nancial and operating results and accounting policies;

c) the fi nancial statements of the company and the consolidated fi nancial statements of the group before their submission to the directors of the company and external auditors’ report on those fi nancial statements;

d) the half-yearly and annual announcements as well as the related press releases on the results and fi nancial position of the company and the group;

e) the co-operation and assistance given by the management to the group’s external auditors; and

(f) the re-appointment of the external auditors of the group.

The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It also has full discretion to invite any director and executive offi cer to attend its meetings. The external and internal auditors have unrestricted access to the Audit Committee.

The Audit Committee has recommended to the directors the nomination of Deloitte & Touche for re-appointment as external auditors of the group at the forthcoming AGM of the company.

GMG Global Ltd & Its SubsidiariesReport of The Directors cont’d



10 AUDITORS

The auditors, Deloitte & Touche, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Yudson Gondobintoro

Danny Lo Kan Yu

March 18, 2008



In the opinion of the directors, the consolidated fi nancial statements of the group and the balance sheet and statement of changes in equity of the company as set out on pages 30 to 61 are drawn up so as to give a true and fair view of the state of affairs of the group and of the company as at December 31, 2007, and of the results, changes in equity and cash fl ows of the group and changes in equity of the company for the fi nancial year then ended, and at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts when they fall due.

ON BEHALF OF THE DIRECTORS

Yudson Gondobintoro

Danny Lo Kan Yu

March 18, 2008

GMG Global Ltd & Its SubsidiariesStatement of Directors



We have audited the consolidated fi nancial statements of GMG Global Ltd (the company) and its subsidiaries (the group) which comprise the balance sheets of the group and the company as at December 31, 2007, the profi t and loss statement, statement of changes in equity and cash fl ow statement of the group and the statement of changes in equity of the company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes as set out on pages 30 to 61.

Directors’ ResponsibilityThe company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provision of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion,

a) the consolidated fi nancial statements of the group and the balance sheet and statement of changes in equity of the company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the group and of the company as at December 31, 2007 and of the results, changes in equity and cash fl ows of the group and changes in equity of the company for the year ended on that date; and

b) the accounting and other records required by the Act to be kept by the company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Deloitte and ToucheCertifi ed Public Accountants

Ho Kok YongPartner(Appointed on August 22, 2006)

SingaporeMarch 18, 2008

Independent Auditors’ ReportTo The Members of GMG Global Ltd



Group Company Note 2007 2006 2007 2006 $ $ $ $ ASSETS

Current assets: Cash and bank balances 6 7,505,886 4,305,876 92,929 32,254 Fixed deposits 6 31,596,815 40,344,375 357,048 12,165,396 Trade receivables 7 23,860,020 23,106,548 – – Other receivables and prepayments 8 12,266,027 8,022,816 9,490,619 3,393,127 Derivative fi nancial instruments 9 73,838 211,094 – –

Inventories 10 28,109,284 22,252,533 – – Total current assets 103,411,870 98,243,242 9,940,596 15,590,777

Non-current assets: Investment in subsidiaries 11 – – 184,727,046 183,000,000 Deferred tax assets 19 37,957 – – – Plantation assets 12 257,880,006 251,307,821 – – Property, plant and equipment 13 23,441,932 14,671,794 312,403 157,492 Total non-current assets 281,359,895 265,979,615 185,039,449 183,157,492

Total assets 384,771,765 364,222,857 194,980,045 198,748,269

LIABILITIES AND EQUITY

Current liabilities: Bank borrowings 14 378 7,358,784 – – Trade payables 15 8,381,499 6,871,332 – – Other payables 16 14,338,003 16,004,887 19,831,837 5,690,546 Current portion of long-term loans 17 13,745,791 17,459,253 – 12,600,000 Current portion of fi nance leases 18 129,324 136,924 83,643 83,643 Derivative fi nancial instruments 9 753,800 311,725 – – Income tax payable 5,276,266 5,839,691 2,690 2,690 Total current liabilities 42,625,061 53,982,596 19,918,170 18,376,879

Non-current liabilities: Long-term loans 17 31,098,290 23,211,776 – – Finance leases 18 250,186 317,171 46,138 129,780 Deferred tax liabilities 19 1,039,430 2,051,143 18,990 18,990 Total non-current liabilities 32,387,906 25,580,090 65,128 148,770

Capital, reserves and minority interests: Share capital 20 169,616,006 169,616,006 169,616,006 169,616,006 Capital reserves 9,603,615 5,415,147 – – Currency translation surplus 9,174,164 2,567,151 – – Retained earnings 87,095,468 79,335,240 5,380,741 10,606,614 Equity attributable to equity holders of the company 275,489,253 256,933,544 174,996,747 180,222,620 Minority interests 34,269,545 27,726,627 – – Total equity 309,758,798 284,660,171 174,996,747 180,222,620

Total liabilities and equity 384,771,765 364,222,857 194,980,045 198,748,269

GMG Global Ltd & Its SubsidiariesBalance Sheets December 31, 2007

See accompanying notes to fi nancial statements.



Group Note 2007 2006 $ $

Revenue 21 166,398,041 175,932,078

Cost of sales (107,075,012) (94,698,433)

Gross profi t 59,323,029 81,233,645

Other operating income 22 1,378,919 344,948Administrative expenses (8,878,778) (6,835,318)Distribution costs (6,064,869) (5,904,621)Other operating expenses (8,900,560) (9,737,080)Finance costs 23 (3,272,679) (3,082,366)Foreign currency exchange loss (1,511,985) (1,777,244)Fair value (loss) gain on fi nancial derivatives (681,781) 1,169,193

Profi t before tax 31,391,296 55,411,157

Income tax 24 (4,110,370) (5,931,063)

Profi t for the year 25 27,280,926 49,480,094

Attributable to:

Equity holders of the company 22,051,721 42,957,334Minority interests 5,229,205 6,522,760 27,280,926 49,480,094

Earnings per ordinary share (cents)- Basic and fully diluted 26 1.09 2.13


GMG Global Ltd & Its SubsidiariesConsolidated Profit & Loss Statement Year ended December 31, 2007



Currency Attributable translation to equity Share Share Capital (defi cit) Retained holders of Minority capital premium reserves surplus earnings the company interests Total $ $ $ $ $ $ $ $Group

Balance at January 1, 2006 101,030,247 68,585,759 4,566,603 (117,576) 37,226,450 211,291,483 20,645,261 231,936,744Exchange differences arising on translation of foreign operations – – – 2,684,727 – 2,684,727 558,606 3,243,333Profi t for the year – – – – 42,957,334 42,957,334 6,522,760 49,480,094Total recognised income and expense for the year – – – 2,684,727 42,957,334 45,642,061 7,081,366 52,723,427Transfer from retained earnings to capital reserves (Note A) – – 848,544 – (848,544) – – –Transfer from share premium account (Note B) 68,585,759 (68,585,759) – – – – – –Balance at December 31, 2006 169,616,006 – 5,415,147 2,567,151 79,335,240 256,933,544 27,726,627 284,660,171Exchange differences arising on translation of foreign operations – – – 6,607,013 – 6,607,013 287,772 6,894,785Profi t for the year – – – – 22,051,721 22,051,721 5,229,205 27,280,926Total recognised income and expense for the year – – – 6,607,013 22,051,721 28,658,734 5,516,977 34,175,711Dividends paid (Note 31) – – – – (10,103,025) (10,103,025) (632,448) (10,735,473)Capital contribution by minority interest in subsidiary – – – – – – 1,658,389 1,658,389Transfer from retained earnings to capital reserves (Note A) – – 4,188,468 – (4,188,468) – – –Balance at December 31, 2007 169,616,006 – 9,603,615 9,174,164 87,095,468 275,489,253 34,269,545 309,758,798

Note A: This transfer was made in accordance with the statutory requirements in Cameroon and Ivory Coast, Africa, where certain subsidiaries are required to appropriate at least 10% of the net profi t for the year to constitute a legal reserve with a ceiling of 20% of the respective subsidiary’s share capital. This reserve is not distributable.

Note B: As a result of the Companies (Amendment) Act 2005, the concept of authorised share capital and par value has been abolished. Any amount standing to the credit of the share premium account has been transferred to the company’s share capital account in the fi nancial year ended December 31, 2006.

Share Share Retained (losses) capital premium earnings Total $ $ $ $Company

Balance at January 1, 2006 101,030,247 68,585,759 (3,590,794) 166,025,212

Profi t for the year – – 14,197,408 14,197,408

Transfer from share premium account 68,585,759 (68,585,759) – –

Balance at December 31, 2006 169,616,006 – 10,606,614 180,222,620

Dividends paid (Note 31) – – (10,103,025) (10,103,025)

Profi t for the year – – 4,877,152 4,877,152

Balance at December 31, 2007 169,616,006 – 5,380,741 174,996,747

GMG Global Ltd & Its SubsidiariesStatements of Changes in Equity Year ended December 31, 2007




Group Note 2007 2006 $ $ Operating activities: Profi t before tax 31,391,296 55,411,157 Adjustments for: Depreciation of property, plant and equipment 4,580,440 3,748,715 Depreciation of plantation assets 4,280,372 3,831,451 Loss (Gain) on disposal of property, plant and equipment 54,515 (6,657) Interest expense 3,272,679 3,082,366 Interest Income (1,233,211) (309,979) Allowance for doubtful other receivables 49,271 72,151 Fair value loss (gain) on fi nancial derivatives 681,781 (1,169,193) Property, plant and equipment written off 34,167 – Operating cash fl ows before movements in working capital 43,111,310 64,660,011

Trade receivables (753,472) (7,508,860) Other receivables and prepayments (3,045,005) (4,154,748) Inventories (5,694,159) (1,567,506) Trade payables 1,451,394 863,894 Other payables (1,657,031) 1,771,954 Cash generated from operations 33,413,037 54,064,745

Interest paid (4,639,785) (1,412,894) Interest income 1,233,211 309,979 Income tax paid (5,587,432) (1,003,540) Net cash from operating activities 24,419,031 51,958,290

Investing activities: Proceeds from disposal of property, plant and equipment 211,786 36,822 Purchase of plantation assets and property, plant and equipment A (17,690,041) (7,227,309) Net cash used in investing activities (17,478,255) (7,190,487)

Financing activities: Capital contribution by minority interest in subsidiary 1,658,389 – Dividends paid (10,103,025) – Dividends paid to minority interest of subsidiary (632,448) – Net proceeds from long-term loans 3,374,460 4,801,038 Finance leases (155,263) (96,372) Bills payable (978,093) (10,758,206) Movement in pledged fi xed deposits (414,299) (232,642) Net cash used in fi nancing activities (7,250,279) (6,286,182)

Net (decrease) increase in cash and cash equivalents (309,503) 38,481,621 Cash and cash equivalents (overdrawn) at the beginning of the year 33,748,223 (4,898,096) Net effect of exchange rate changes in consolidating subsidiaries 727,967 164,698 Cash and cash equivalents (Overdrawn) at the end of the year B 34,166,687 33,748,223

A. PLANTATION ASSETS AND PROPERTY, PLANT AND EQUIPMENT During the year, additions were made to plantation assets and property, plant and equipment with an

aggregate cost of $18,575,268 (2006 : $7,283,378) of which $80,678 (2006 : $56,069) was acquired by means of fi nance leases and $804,549 (2006 : $Nil) was acquired by means of acquisition of subsidiary. Cash payments of $17,690,041 (2006 : $7,227,309) were made in respect of the remaining additions to plantation assets and property, plant and equipment.

B. CASH AND CASH EQUIVALENTS CONSIST OF: Group 2007 2006 $ $

Cash and bank balances 7,505,886 4,305,876 Fixed deposits * 26,661,179 35,823,038 Bank overdrafts (Note 14) (378) (6,380,691) 34,166,687 33,748,223

* Excluding fi xed deposits pledged of $4,935,636 (2006 : $4,521,337)


GMG Global Ltd & Its SubsidiariesConsolidated Cash Flow Statement Year ended December 31, 2007



1 GENERAL

The company (Registration No. 199904244E) is incorporated in Singapore with its principal place of business and registered offi ce at 55 Market Street, #03-01, Singapore 048941. The company is listed on the Singapore Exchange Securities Trading Limited. The fi nancial statements are expressed in Singapore dollars.

The principal activity of the company is that of an investment holding company.

The principal activities of the subsidiaries are disclosed in Note 11 to the fi nancial statements.

The consolidated fi nancial statements of the group and balance sheet and statement of changes in equity of the company for the year ended December 31, 2007 were authorised for issue by the Board of Directors on March 18, 2008.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING – The fi nancial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

In the current fi nancial year, the group and company have adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) that are relevant to its operations and effective for annual periods beginning on or after January 1, 2007. The adoption of these new/revised FRSs and INT FRSs has no material effect on the fi nancial statements except as disclosed below and in the notes to the fi nancial statements.

FRS 107 - Financial Instruments: Disclosures and amendments to FRS 1 Presentation of Financial Statements relating to capital disclosures

The group has adopted FRS 107 with effect from annual periods beginning on or after January 1, 2007. The new Standard has resulted in an expansion of the disclosures in these fi nancial statements regarding the group’s fi nancial instruments. The group has also presented information regarding its objectives, policies and processes for managing capital (see Note 4) as required by the amendments to FRS 1 which are effective from annual periods beginning on or after January 1, 2007.

At the date of authorisation of these fi nancial statements, the following FRSs, INT FRSs and amendments to FRS were issued but not effective:

FRS 23 - Borrowing Costs (Revised) FRS 108 - Operating Segments INT FRS 111 - FRS 102 – Group and Treasury Share Transactions INT FRS 112 - Service Concession Arrangements

Consequential amendments were also made to various standards as a result of these new/revised standards.

The directors anticipate that the adoption of the above FRS and INT FRS in future periods will have no material impact on the fi nancial statements of the company and of the group in the period of their initial adoption.

BASIS OF CONSOLIDATION - The consolidated fi nancial statements incorporate the fi nancial statements of the company and entities (including special purpose entities) controlled by the company (its subsidiaries). Control is achieved where the company has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profi t and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the fi nancial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

GMG Global Ltd & Its SubsidiariesNotes To Financial Statements December 31, 2007



2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES cont’d

Minority interests in the net assets of consolidated subsidiaries are identifi ed separately from the group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses.

In the company’s fi nancial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in the profi t and loss statement.

BUSINESS COMBINATIONS - The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the company in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifi able assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classifi ed as held for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and 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 identifi able assets, liabilities and contingent liabilities recognised. If, after reassessment, the group’s interest in the net fair value of the acquiree’s identifi able assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the consolidated profi t and loss statement.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

FINANCIAL INSTRUMENTS - Financial assets and fi nancial liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual provisions of the instrument.

Financial assets

Financial assets are initially measured at fair value, net of transaction costs except for those fi nancial assets classifi ed as at fair value through profi t or loss which are initially measured at fair value.

Financial assets are classifi ed into the following specifi ed categories: fi nancial assets “at fair value through profi t or loss”, “held-to-maturity investments”, “available-for-sale” fi nancial assets and “loans and receivables”. The classifi cation depends on the nature and purpose of fi nancial assets and is determined at the time of initial recognition.

Effective interest method The effective interest method is a method of calculating the amortised cost of a fi nancial instrument and of

allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the fi nancial instrument, or where appropriate, a shorter period. Income is recognised on an effective interest rate basis for debt instruments other than those fi nancial instruments “at fair value through profi t or loss”.

Loans and receivables Trade receivables, loans and other receivables that have fi xed or determinable payments that are not quoted

in an active market are classifi ed as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest rate method, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of fi nancial assets Financial assets, other than those at fair value through profi t or loss, are assessed for indicators of impairment at

each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the fi nancial asset, the estimated future cash fl ows of the investment have been impacted. For fi nancial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the original effective interest rate.




The carrying amount of the fi nancial asset is reduced by the impairment loss directly for all fi nancial assets with the exception of trade and other receivables where the carrying amount is reduced through the use of an allowance account. When a trade and other receivables is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profi t or loss. Changes in the carrying amount of the allowance account are recognised in profi t or loss.

Derecognition of fi nancial assets The group derecognises a fi nancial asset only when the contractual rights to the cash fl ows from the asset expire,

or it transfers the fi nancial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the group neither transfers nor retains substantially all the risk and rewards of ownership and continues to control the transferred asset, the group recognises its retained interest in the assets and an associated liability for amounts it may have to pay. If the group retains substantially all the risks and rewards of ownership of a transferred fi nancial asset, the group continues to recognise the fi nancial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity instruments

Classifi cation as debt or equity Financial liabilities and equity instruments issued by the group are classifi ed according to the substance of the

contractual arrangements entered into and the defi nitions of a fi nancial liability and an equity instrument.

Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting

all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities Financial liabilities are classifi ed as either fi nancial liabilities “at fair value through profi t or loss” or other

fi nancial liabilities.

Financial liabilities at fair value through profi t or loss (FVTPL) Financial liabilities are classifi ed as at FVTPL where the fi nancial liability is either held for trading or it is designated

as at FVTPL.

A fi nancial liability is classifi ed as held for trading if: • it has been incurred principally for the purpose of repurchasing in the near future; or • it is a part of an identifi ed portfolio of fi nancial instruments that the group manages together and has a recent

actual pattern of short-term profi t-taking; or • it is a derivative that is not designated and effective as a hedging instrument.

A fi nancial liability other than a fi nancial liability held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or signifi cantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the fi nancial liability forms part of a group of fi nancial assets or fi nancial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and FRS 39 permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at fair value through profi t or loss are initially measured at fair value and subsequently stated at fair value, with any resultant gain or loss recognised in profi t or loss. The net gain or loss recognised in profi t or loss incorporates any interest paid on the fi nancial liability. Fair value is determined in the manner described in Note 4.

Other fi nancial liabilities Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently

measured at amortised cost, using the effective interest rate method, with interest expense recognised on an effective yield basis.

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs (see below).

Notes To Financial Statements cont’d December 31, 2007




The group’s interest-free loan from the government of Cameroon is initially measured at fair value and subsequently measured at amortised cost, using the effective interest rate method.

The effective interest method is a method of calculating the amortised cost of a fi nancial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the fi nancial liability, or, where appropriate, a shorter period.

Derecognition of fi nancial liabilities The group derecognises fi nancial liabilities when, and only when, the group’s obligations are discharged,

cancelled or they expire.

Derivative fi nancial instruments and hedge accounting The group enters into a variety of derivative fi nancial instruments to manage its exposure to foreign exchange

rate risk and commodity price risk, including foreign exchange forward contracts and natural rubber price swaps. Further details of derivative fi nancial instruments are disclosed in Note 9 to the fi nancial statements.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The resulting gain or loss is recognised in profi t or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profi t or loss depends on the nature of the hedge relationship. The group does not adopt hedge accounting.

Derivatives not designated into an effective hedge relationship are classifi ed as a current asset or a current liability.

CAPITAL RESERVES - Certain subsidiaries are required by laws established in their respective countries of incorporation to set aside certain percentage of its annual profi t after tax as legal reserve until the accumulated reserve has reached certain percentage of the subsidiary’s paid-up capital.

LEASES - Leases are classifi ed as fi nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classifi ed as operating leases.

Assets held under fi nance leases are recognised as assets of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a fi nance lease obligation. Lease payments are apportioned between fi nance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profi t or loss statement, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the group’s general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Rentals payable under operating leases are charged to profi t or loss statement on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefi t of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefi ts from the leased asset are consumed.

INVENTORIES - Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of assets other than construction-in-progress, over their estimated useful lives, using the straight-line method, on the following bases:

Leasehold buildings - 3% to 20% Leasehold improvements - 10% Offi ce equipment, furniture and fi ttings - 10% to 100%




Plant, machinery and equipment - 5% to 331/3% Motor vehicles - 20% to 331/3% Computers - 20%

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under fi nance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in the profi t and loss statement.

PLANTATION ASSETS – Plantation assets comprise land use rights, mature rubber tree plantations and plantation establishment costs. Mature rubber tree plantations and plantation establishment costs, (collectively “biological assets”) are measured at cost less any accumulated depreciation and any impairment losses since market-determined prices or values are not available and alternative estimates of fair value are determined to be unreliable. Depreciation of rubber tree plantations that are in production is provided at the rate of 1.5% to 4.0% per annum.

Plantation establishment costs, consisting of costs directly incurred during the period of plantation development, are not depreciated. Depreciation is only provided on commencement of rubber tapping activities. No depreciation is provided on the land use rights as the directors are of the opinion that the land use rights effectively have a perpetual life (Note 12).

All direct costs incurred for planting and maintenance of the rubber tree nursery are capitalised and included as inventories at the lower of cost and net realisable value.

IMPAIRMENT OF TANGIBLE ASSETS - At each balance sheet date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profi t and loss statement.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profi t and loss statement.

PROVISIONS - Provisions are recognised when the group or the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the group or the company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash fl ows estimated to settle the present obligation, its carrying amount is the present value of those cash fl ows.

. When some or all of the economic benefi ts required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION - Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.





Sale of goods Revenue from the sale of goods is recognised when all the following conditions are satisfi ed; • the group has transferred to the buyer the signifi cant risks and rewards of ownership of the goods; • the group retains neither continuing managerial involvement to the degree usually associated with ownership

nor effective control over the goods sold; • the amount of revenue can be measured reliably; • it is probable that the economic benefi ts associated with the transaction will fl ow to the entity; and • the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest

rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the fi nancial asset to that asset’s net carrying amount.

Dividend Income Dividend income from investments is recognised when the shareholders’ rights to receive payment have

been established.

BORROWING COSTS - Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specifi c borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the profi t and loss statement in the period in which they are incurred.

RETIREMENT BENEFIT COSTS - Payments to defi ned contribution retirement benefi t plans are charged as an expense as they fall due. Payments made to state-managed retirement benefi t schemes, such as the Singapore Central Provident Fund and state schemes in Cameroon and Ivory Coast where the group’s operations are located, are dealt with as payments to defi ned contribution plans where the group’s obligations under the plans are equivalent to those arising in a defi ned contribution retirement benefi t plan.

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.

INCOME TAX - Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profi t for the year. Taxable profi t differs from profi t as reported in the profi t and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the company and subsidiaries operate by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the fi nancial statements and the corresponding tax bases used in the computation of taxable profi t, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profi ts will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profi t nor the accounting profi t.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi ts will be available to allow all or part of the asset to be recovered.




Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profi t or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profi t or loss, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifi able assets, liabilities and contingent liabilities over cost.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - The individual fi nancial statements of each group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated fi nancial statements of the group and the balance sheet and statement of changes in equity of the company are presented in Singapore dollars, which is the functional currency of the company, and the presentation currency for the consolidated fi nancial statements.

In preparing the fi nancial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the profi t and loss statement for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the profi t and loss statement for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated fi nancial statements, the assets and liabilities of the group’s foreign operations (including comparatives) and subsidiaries whose fi nancial statements are denominated in a functional currency other than that used by the company, are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fl uctuated signifi cantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classifi ed as equity and transferred to the group’s translation reserve. Such translation differences are recognised in profi t or loss in the period in which the entity is disposed of.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents comprise cash on hand and demand deposits, bank overdrafts, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignifi cant risk of changes in value.

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgements in applying the entity’s accounting policies

In the application of the group’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.




3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year, are discussed below.

Impairment of plantation assets The group assesses annually whether its plantation assets have any indication of impairment in accordance with

its accounting policy. Such assessment is based on estimates of future rubber prices, exchange rates, operating expenses and sales orders. No provision for impairment is considered necessary at the balance sheet date (2006 : Nil) as no indication of impairment has been identifi ed.

Allowance for impairment in value of spare parts inventories Determining whether an allowance is necessary in the value of spare parts inventories is based on a comparison

of whether the cost of the spare parts inventories is greater than their value to the group, by reference to the plant, machinery and equipment used by the group in the operation of the plantations and manufacture of natural rubber products, and market prices for similar items. In addition, a detailed physical examination and quality tests are also carried out in order to determine their physical condition. Once the carrying value of the spare parts inventories is considered to be lower than their book values, an allowance for impairment in value will be made. An allowance of $323,812 (2006 : $727,838) was made for impairment in the value of spare parts inventories of the group after an exchange difference of $81,461 (2006 : $29,214) in respect of the year ended December 31, 2007 on the above basis. The cumulative allowance as at December 31, 2007 was $1,798,325 (2006 : $1,393,052). The carrying amount of inventories is disclosed in Note 10.

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of fi nancial instruments

The following table sets out the fi nancial instruments as at the balance sheet date:

Group Company 2007 2006 2007 2006 $ $ $ $ Financial Assets

Fair value through profi t or loss (FVTPL): Held for trading 73,838 211,094 – – Loans and receivables (including cash and cash equivalents) 75,161,308 75,623,888 9,919,755 15,572,618

Group Company 2007 2006 2007 2006 $ $ $ $ Financial liabilities

Fair value through profi t or loss (FVTPL): Held for trading 753,800 311,725 – – Amortised cost 67,943,471 71,360,127 19,961,618 18,503,969

(b) Financial risk management policies and objectives

The group has documented risk management policies. These policies set out the group’s overall business strategies and its risk management philosophy. The group’s overall risk management programme seeks to minimise potential adverse effects of fi nancial performance of the group. Risk management is carried out by the relevant risk offi cers under the policies approved by the Board of Directors.

The group’s activities expose it to a variety of fi nancial risks, including the effects of changes in world rubber prices, foreign currency exchange and interest rates. The group uses derivative fi nancial instruments, such as forward foreign exchange contracts and natural rubber price swaps to reduce certain exposures. The group does not hold derivative fi nancial instruments for speculative purposes.



4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT cont’d

There has been no change to the group’s exposure to these fi nancial risks or the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below.

(i) Foreign exchange risk management The group transacts business in various foreign currencies, including the United States dollar, Great Britain pounds,

Euro and CFA Francs, which is pegged to the Euro, and is therefore exposed to foreign exchange risk.

At the reporting date, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the respective group entities’ functional currencies are as follows:

Group Company Liabilites Assets Liabilites Assets 2007 2006 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ $ $

United States dollars 3,490,085 – 395,595 15,393,123 – – 357,048 15,393,123 Euros 248,263 562,213 8,601,491 12,074,525 – – – – Great Britain pounds – – 1,230,245 2,737,547 – – – – Singapore dollars 89,291 201,008 203,689 144,545 – – – –

The group uses forward foreign exchange contracts to manage its exposure to foreign currency risk in the local reporting currency.

The company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk.

Foreign currency sensitivity The following table details the sensitivity to a 10% increase and decrease in the Singapore dollar against the

relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the group where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

If the Singapore dollar strengthens by 10% against the relevant foreign currency, profi t or loss will increase (decrease) by:

US Dollar impact Euro impact GBP impact 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ Group Profi t or (loss) 298,804 (1,212,279) (ii) (852,340) (i) (1,202,647) (i) (123,023) (273,757) Other equity – – – – – –

Company Profi t or (loss) (36,935) (1,212,279) (ii) – – – – Other equity – – – – – –

If the Singapore dollar weakens by 10% against the relevant foreign currency, profi t or loss will increase (decrease) by:

US Dollar impact Euro impact GBP impact 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ Group Profi t or (loss) (298,804) 1,212,279 (ii) 852,340 (i) 1,202,647 (i) 123,023 273,757 Other equity – – – – – –

Company Profi t or (loss) 36,935 1,212,279 (ii) – – – – Other equity – – – – – –





(i) This is mainly attributable to the exposure outstanding on receivables and payables at year end in the group.

(ii) This is mainly attributable to the exposure to US dollar fi xed deposits at the year end.

The group’s sensitivity to foreign currency has decreased during the current year mainly due to decrease in US dollar fi xed deposits and Euro denominated trade receivables.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not refl ect the exposure during the year.

(ii) Interest rate risk management The primary source of the interest rate risk of the group and company relates to interest bearing bank deposits,

bank borrowings, long-term loans and fi nance leases. Interest bearing bank deposits are short-term in nature and with the current interest rate level, any variation in the interest rates will not have a material impact on the net income of the company. The interest rates on bank borrowings, long-term loans and fi nance leases are fi xed and are disclosed in Notes 14, 17 and 18 to the fi nancial statements.

The group’s profi t and loss and equity are not affected by the changes in interest rates as the interest-bearing instruments mainly carry fi xed interest and are measured as amortised cost.

(iii) Credit risk management The group’s principal fi nancial assets are cash and bank balances and trade and other receivables.

The credit risk on liquid funds and derivative fi nancial instruments is limited because the counterparties have high credit ratings.

The group’s credit risk is primarily attributable to its trade and other receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identifi ed loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash fl ows.

The group has signifi cant trade receivables from two outside party customers amounting to $16,453,642 (2006 : $17,870,932) or 70% (2006 : 77%) of total trade receivables balance as at the year end.

The carrying amount of fi nancial assets recorded in the fi nancial statements, grossed up for any allowance for losses, represents the group’s maximum exposure to credit risk.

(iv) Liquidity risk management The group maintains suffi cient cash and cash equivalents, available credit lines and internally generated funds

to fi nance its activities.

Non-derivative fi nancial liabilities The following tables detail the remaining contractual maturity for non-derivative fi nancial liabilities. The tables

have been drawn up based on the undiscounted cash fl ows of fi nancial liabilities based on the earliest date on which the group and company can be required to pay. The table includes both interest and principal cash fl ows. The adjustment column represents the possible future cash fl ows attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the fi nancial liability on the balance sheet.

Weighted On average demand Within effective or within 2 to After interest rate 1 year 5 years 5 years Adjustment Total % $ $ $ $ $ Group 2007 Non-interest bearing – 22,719,502 – – – 22,719,502 Finance lease liability (fi xed rate) 6.3 151,596 242,947 53,781 (68,814) 379,510 Fixed interest rate instruments 7.7 16,269,737 27,260,257 9,897,804 (8,583,339) 44,844,459

2006 Non-interest bearing – 25,876,219 – – – 25,876,219 Finance lease liability (fi xed rate) 6.3 159,759 357,321 14,654 (77,639) 454,095 Fixed interest rate instruments 9.2 23,520,401 24,129,411 4,833,136 (7,453,135) 45,029,813




Weighted On average demand Within effective or within 2 to After interest rate 1 year 5 years 5 years Adjustment Total % $ $ $ $ $ Company 2007 Non-interest bearing – 19,831,837 – – – 19,831,837 Finance lease liability (fi xed rate) 6.4 97,202 53,426 – (20,847) 129,781

2006 Non-interest bearing – 8,690,546 – – – 8,690,546 Finance lease liability (fi xed rate) 6.4 97,202 150,627 – (34,406) 213,423 Fixed interest rate instruments 4.0 9,811,475 – – (211,475) 9,600,000

Non-derivative fi nancial assets The following table details the expected maturity for non-derivative fi nancial assets. The tables below have

been drawn up based on the undiscounted contractual maturities of the fi nancial assets including interest that will be earned on those assets except where the group and the company anticipates that the cash fl ow will occur in a different period. The adjustment column represents the possible future cash fl ows attributable to the instrument included in the maturity analysis which are not included in the carrying amount of the fi nancial asset on the balance sheet.

Weighted On average demand effective or within interest rate 1 year Adjustment Total % $ $ $ Group 2007 Non-interest bearing – 43,564,493 – 43,564,493 Fixed interest rate instruments 4.2 31,751,364 (154,549) 31,596,815

2006 Non-interest bearing – 35,279,513 – 35,279,513 Fixed interest rate instruments 3.6 40,457,483 (113,108) 40,344,375

Company 2007 Non-interest bearing – 6,439,803 – 6,439,803 Fixed interest rate instruments 4.9 3,637,470 (157,518) 3,479,952

2006 Non-interest bearing – 3,407,222 – 3,407,222 Fixed interest rate instruments 4.9 12,214,948 (49,552) 12,165,396

Derivative fi nancial instruments The following table details the liquidity analysis for derivative fi nancial instruments. The table has been drawn

up based on the undiscounted net cash infl ows/(outfl ows) on the derivative instrument that settle on a net basis and the undiscounted gross infl ows and (outfl ows) on those derivatives that require gross settlement. When the amount payable or receivable is not fi xed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves existing at the reporting date.





On demand or within 1 year $ Group

2007 Gross settled: Foreign exchange forward contracts 73,838

Natural rubber price swaps (753,800) 2006 Gross settled: Foreign exchange forward contracts 211,094

Natural rubber price swaps (311,725)

Fair value of fi nancial assets and fi nancial liabilities The carrying amounts of cash and cash equivalents, trade and other current receivables and payables,

provisions and other liabilities approximate their respective fair values due to the relatively short-term maturity of these fi nancial instruments. The fair values of other classes of fi nancial assets and liabilities are disclosed in the respective notes to fi nancial statements.

The fair values of fi nancial assets and fi nancial liabilities are determined as follows:

(i) the fair value of fi nancial assets and fi nancial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices;

(ii) the fair value of other fi nancial assets and fi nancial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash fl ow analysis; and

(iii) the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash fl ow analysis is used, based on the applicable yield curve of the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

The directors consider that the carrying amounts of fi nancial assets and fi nancial liabilities recorded at amortised cost in the fi nancial statements approximate their fair values.

(c) Capital risk management policies and objectives

The group manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the group consists of debt, which includes the borrowings, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

The group’s risk management committee reviews the capital structure on a semi-annual basis. As a part of this review, the committee considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the committee, the group will balance its overall capital structure through the payment of dividends, new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

The group’s overall strategy remains unchanged from 2006.

5 RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise signifi cant infl uence over the other party in making fi nancial and operating decisions.

Some of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is refl ected in these fi nancial statements.



5 RELATED PARTY TRANSACTIONS cont’d

During the year, the group entities indicated below entered into the following trading transactions and had balances with related parties that are not members of the group:

Marketing Insurance Purchase of goods fee expense Rental expense expense 2007 2006 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ $ $

GMG Global Ltd – – – – 35,256 111,336 – –

Subsidiaries of GMG Global Ltd – 7,695 777,332 857,239 18,556 111,336 110,645 –

Amounts owing by Amounts owing to related parties related parties 2007 2006 2007 2006 $ $ $ $

GMG Global Ltd – – – 512,053

Subsidiaries of GMG Global Ltd – 27,834 3,454,869 29,401

The balances are unsecured, interest-free, repayable on demand and settled in cash unless otherwise stated. No guarantees have been given or received. No expense has been recognised in the period for bad or doubtful debts in respect of the amounts owed by related parties.

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group 2007 2006 $ $

Short-term benefi ts 2,436,601 2,493,341 Post-employment benefi ts 83,383 101,669

The remuneration of directors and key management is determined by the remuneration committee having regard to the performance of individuals.

6 CASH AND BANK BALANCES AND FIXED DEPOSITS

Group Company 2007 2006 2007 2006 $ $ $ $

Cash at bank 6,445,081 4,139,883 92,745 32,084 Cash on hand 1,060,805 165,993 184 170 7,505,886 4,305,876 92,929 32,254

Fixed deposits 26,661,179 35,823,038 357,048 12,165,396 Pledged fi xed deposits 4,935,636 4,521,337 – – 31,596,815 40,344,375 357,048 12,165,396

Cash at bank and on hand comprises cash held by the group and short-term bank deposits (excluding fi xed deposits) with an original maturity of three months or less. The carrying amounts of these assets approximate their fair values.




6 CASH AND BANK BALANCES AND FIXED DEPOSITS cont’d

Fixed deposits amounting to $26,661,179 (2006 : $35,823,038) bear interest at an average rate of 3.91% to 5.40% (2006 : 1.3% to 5.0%) per annum and have a tenure of three months or less (2006 : three months or less).

A fi xed deposit amounting to $4,935,636 (2006 : $4,521,337) has been pledged to a fi nancial institution in respect of banking facilities provided to a subsidiary. This fi xed deposit bears interest at an average rate of 3.54% (2006 : 2.6%) per annum and has a tenure of approximately 360 days (2006 : 360 days).

The group’s cash and bank balances and fi xed deposits that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $

United States dollars 395,595 12,122,793 Singapore dollars 32,102 40,438 Euro 6,454,577 9,076,113

7 TRADE RECEIVABLES Group 2007 2006 $ $

Outside parties 23,860,020 23,106,548

The average credit period on sale of goods is 52 days (2006 : 40 days). No interest is charged on the trade receivables. At the balance sheet date, there are no trade receivables that are past due.

The group’s trade receivables that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $

Singapore dollars 38,117 41,014 Great Britain pounds 1,230,245 2,737,547 Euro 1,959,272 2,950,258

8 OTHER RECEIVABLES AND PREPAYMENTS Group Company 2007 2006 2007 2006 $ $ $ $

Sundry debtors 11,274,673 4,188,053 – – Staff loans and advances 731,534 468,401 – – Prepayments 67,440 155,727 20,841 18,159 Deposits 372,776 200,218 83,901 5,861 Income tax recoverable – 358,199 – – Advance to outside party – 3,270,330 – 3,270,330 Advance to suppliers 825,998 262,368 – – Related parties (Note 5) – 27,834 – – Subsidiary (Note 11) – – 9,385,877 98,777 13,272,421 8,931,130 9,490,619 3,393,127 Less: Allowance for doubtful sundry debtors (1,006,394) (908,314) – – 12,266,027 8,022,816 9,490,619 3,393,127

Movement in the allowance for doubtful sundry debtors



8 OTHER RECEIVABLES AND PREPAYMENTS cont’d

Group 2007 2006 $ $

Balance at beginning of the year 908,314 816,824

Increase in allowance recognised in the profi t and loss statement 49,271 72,151

Exchange adjustment 48,809 19,339

Balance at end of the year 1,006,394 908,314

Sundry debtors comprise mainly of value added tax receivables in the respective tax jurisdiction of the subsidiaries.

In 2006, the advance to outside party was unsecured, interest free and would be settled within the next 12 months.

The allowance for doubtful sundry debtors is determined by reference to past default experiences.

The group’s other receivables that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $

United States dollars – 3,270,330

Singapore dollars 133,470 59,176

Euro 187,643 48,154

9 DERIVATIVE FINANCIAL INSTRUMENTS

Group 2007 2006 Assets Liabilities Assets Liabilities $ $ $ $ Fair value of:

Forward foreign exchange contracts 73,838 – 211,094 –

Natural rubber price swaps – 753,800 – 311,725

Shown as current 73,838 753,800 211,094 311,725 The group utilises forward foreign exchange contracts to manage signifi cant future transactions and cash fl ows

and natural rubber price swaps to manage the fl uctuations in world rubber prices.

At the balance sheet date, the total notional amounts of derivative fi nancial instruments to which the group is committed to are as follows:

Group 2007 2006 $ $

Forward foreign exchange contracts 9,644,138 9,777,338

Natural rubber price swaps 7,176,233 4,858,762

At December 31, 2007, the fair values of the group’s outstanding derivative fi nancial instruments is a net loss of $679,962 (2006 : $100,631). These amounts are based on quoted market prices for equivalent instruments at the balance sheet date.




10 INVENTORIES Group 2007 2006 $ $

Raw materials and spare parts 20,046,224 14,915,073 Rubber plant nursery 45,780 28,876 Finished goods and goods for resale 8,017,280 7,308,584 28,109,284 22,252,533

The cost of inventories recognised as an expense includes $323,812 (2006 : $727,838) in respect of write-downs of inventory to net realisable value.

11 INVESTMENT IN SUBSIDIARIES Company 2007 2006 $ $

Unquoted equity shares, at cost 184,727,046 183,000,000

Details of the company’s subsidiaries at December 31, 2007 are as follows:

Principal activities/ Proportion of Proportion Country of incorporation ownership of voting power Name of company and operations interest power held 2007 2006 2007 2006 % % % %

GMG Holdings Ltd (1) Investment holding/Singapore 100 100 100 100

Electro Magnetics Inactive (under judicial – – – – (1992) Ltd (3) management)/Singapore

P.T. Bumi Jaya (2) Rubber procurement, processing 51 – 51 – and exporters/Indonesia

Subsidiary of GMG Holdings Ltd:

GMG Investment Investment holding, 100 100 100 100 (S) Pte Ltd (1) general importers and exporters/Singapore

Subsidiaries of GMG Investment (S) Pte Ltd:

GMG International S.A. (2) Investment holding/Cameroon 100 100 100 100

Tropical Rubber Cotè Rubber plantation and 51.2 51.2 51.2 51.2 D’Ivoire (2) processing/Cote d’Ivoire

Subsidiary of GMG International S.A:

Hevecam Cameroon S.A. (2) Rubber plantation and 90 90 90 90 processing/Cameroon

(1) Audited by Deloitte & Touche, Singapore.(2) Audited by overseas practices of Deloitte Touche Tohmatsu.(3) Electro Magnetics (1992) Ltd was deconsolidated on July 1, 2000. The company is under judicial management.

In accordance with the terms and conditions of the Investment Agreement pursuant to the voluntary takeover of Electro Magnetics (1992) Ltd by GMG Global Ltd, GMG Global Ltd has no further contractual commitments to Electro Magnetics (1992) Ltd as at December 31, 2007.



12 PLANTATION ASSETS Plantation establishment Plantations costs Total $ $ $ Group

Cost: At January 1, 2006 269,849,442 34,021,992 303,871,434 Additions 367,656 4,443,104 4,810,760 Transfers 11,154,479 (11,154,479) – Exchange adjustment 3,214,433 895,911 4,110,344 At December 31, 2006 284,586,010 28,206,528 312,792,538 Additions 357,070 6,250,911 6,607,981 Transfers 7,844,660 (7,844,660) – Reclass to property, plant and equipment (3,081,516) 2,082,552 (998,964) Exchange adjustment 7,154,224 1,418,260 8,572,484 At December 31, 2007 296,860,448 30,113,591 326,974,039

Accumulated depreciation: At January 1, 2006 56,134,811 – 56,134,811

Depreciation for the year 3,831,451 – 3,831,451 Exchange adjustment 1,518,455 – 1,518,455 At December 31, 2006 61,484,717 – 61,484,717 Depreciation for the year 4,280,372 – 4,280,372 Exchange adjustment 3,328,944 – 3,328,944 At December 31, 2007 69,094,033 – 69,094,033 Carrying amount: At December 31, 2007 227,766,415 30,113,591 257,880,006

At December 31, 2006 223,101,293 28,206,528 251,307,821

The group’s plantation assets comprise 2 plantations located in Niete, Cameroon and Anguededou, Ivory Coast

with a total planted area of around 18,500 hectares. Plantations normally reach full harvest potential during a period of between 11 to 20 years after planting. During the fi nancial year, 23,154 tons (2006 : 27,622 tons) of rubber were harvested from the plantations. Currently, there are no insurance policies in Africa against losses due to uncontrollable and extraordinary weather conditions.

The accumulated interest expense capitalised amounted to $2,212,750 (2006 : $2,102,796) as at the balance sheet date, after allowance for exchange rate differences.

Included in plantation assets is an amount of $147 million which relates to the land use rights on the 40,000 hectares plantation land granted by the State of Cameroon for a period of 50 years plus 50 years, renewable at a nominal value to the group. With the group’s continuing investment in replanting and extension on the plantation land, the directors are of the view that it is not likely that the land use rights will not be renewed at the expiry of its current term and accordingly, the land use rights have a perpetual life and no depreciation has been provided.




13 PROPERTY, PLANT AND EQUIPMENT

Offi ce Plant, equipment, machinery Leasehold Leasehold furniture and Motor Construction- buildings improvements and fi ttings equipment vehicles Computers in-progress Total $ $ $ $ $ $ $ $ Group

Cost:

At January 1, 2006 54,142,135 1,138,166 12,243,218 37,055,582 15,255,143 89,241 – 119,923,485

Additions 445,867 2,133 61,264 820,696 1,142,658 – – 2,472,618

Disposals – (632,595) (734,957) (3,068,579) (186,214) (82,318) – (4,704,663)

Exchange adjustment 1,425,744 (53,765) 228,384 975,797 317,470 (6,923) – 2,886,707

At December 31, 2006 56,013,746 453,939 11,797,909 35,783,496 16,529,057 – – 120,578,147

Additions 4,196,379 513,710 850,879 3,462,501 1,442,986 – 1,500,832 11,967,287

Disposals – – (518) – (665,956) – – (666,474)

Written off – (423,968) – – – – – (423,968)

Transfer 945,336 – 109,478 – – – (1,054,814) –

Reclass from

plantation assets – – – – – – 998,964 998,964

Exchange adjustment 2,928,941 626 592,642 1,871,108 756,367 – 55,850 6,205,534

At December 31, 2007 64,084,402 544,307 13,350,390 41,117,105 18,062,454 – 1,500,832 138,659,490

Accumulated depreciation:

At January 1, 2006 45,803,291 1,000,439 10,201,337 33,864,763 13,310,643 88,828 – 104,269,301

Depreciation for the year 1,626,296 44,395 295,217 1,135,276 647,135 396 – 3,748,715

Disposals – (632,595) (734,957) (3,068,579) (156,049) (82,318) – (4,674,498)

Exchange adjustment 1,223,236 (52,242) 177,992 903,696 317,059 (6,906) – 2,562,835

At December 31, 2006 48,652,823 359,997 9,939,589 32,835,156 14,118,788 – – 105,906,353

Depreciation for the year 1,683,026 96,240 345,825 1,107,104 1,348,245 – – 4,580,440

Disposals – – (418) – (399,755) – – (400,173)

Written off – (389,801) – – – – – (389,801)

Exchange adjustment 2,584,999 (464) 500,309 1,734,170 701,725 – – 5,520,739

At December 31, 2007 52,920,848 65,972 10,785,305 35,676,430 15,769,003 – – 115,217,558

Carrying amount:

At December 31, 2007 11,163,554 478,335 2,565,085 5,440,675 2,293,451 – 1,500,832 23,441,932

At December 31, 2006 7,360,923 93,942 1,858,320 2,948,340 2,410,269 – – 14,671,794

Certain of the group’s motor vehicles and offi ce equipment with net book values of $323,019 and $Nil, respectively, (2006 : $441,561 and $3,261, respectively) are under fi nance lease obligations (Note 18).



13 PROPERTY, PLANT AND EQUIPMENT cont’d

Offi ce equipment, Leasehold furniture Motor improvements and fi ttings vehicles Total $ $ $ $ Company

Cost: At January 1, 2006 410,024 461,691 837,595 1,709,310 Additions – 6,291 – 6,291 Disposals – (8,790) – (8,790) At December 31, 2006 410,024 459,192 837,595 1,706,811 Additions 319,306 9,715 – 329,021 Written off (410,024) – – (410,024) At December 31, 2007 319,306 468,907 837,595 1,625,808

Accumulated depreciation: At January 1, 2006 297,269 453,023 593,975 1,344,267 Depreciation for the year 41,002 5,323 167,517 213,842 Disposals – (8,790) – (8,790) At December 31, 2006 338,271 449,556 761,492 1,549,319 Depreciation for the year 57,001 6,838 76,103 139,942 Written off (375,857) – – (375,857) At December 31, 2007 19,415 456,394 837,595 1,313,404

Carrying amount: At December 31, 2007 299,891 12,513 – 312,404 At December 31, 2006 71,753 9,636 76,103 157,492

The company’s motor vehicles and offi ce equipment with net book values of $Nil (2006 : $76,103 and $3,261, respectively) are under fi nance lease obligations (Note 18).

14 BANK BORROWINGS Group 2007 2006 $ $

Bank overdrafts (secured) – 6,379,650 Bank overdrafts (unsecured) 378 1,041 Bills payable (secured) – 901,821 Bills payable (unsecured) – 76,272 378 7,358,784 The bank overdrafts are repayable on demand and are secured by a fi xed bank deposit of $4,935,636 (2006

: $4,521,337). The bank overdrafts and bills payable bear interest at rates ranging from 6% to 13% (2006 : 6% to 13%) per annum.

The bills payable are secured on the plant, machinery and equipment and inventories of a subsidiary up to an amount of $2,100,000 (2006 : $2,100,000).

15 TRADE PAYABLES Group 2007 2006 $ $

Outside parties 8,381,499 6,871,332




15 TRADE PAYABLES cont’d

The average credit period on purchases of goods is 26 days (2006 : 25 days). No interest is charged on the trade payables.

Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs.

The group’s trade payables that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $

Euro 248,263 562,213

16 OTHER PAYABLES Group Company 2007 2006 2007 2006 $ $ $ $

Sundry creditors 5,215,725 4,427,087 334,531 235,327 Accrued expenses 8,502,028 8,250,398 795,609 871,362 Interest payable 618,250 2,783,948 – 2,350,290 Directors 2,000 2,000 2,000 2,000 Related parties (Note 5) – 541,454 – 512,053 Subsidiaries (Note 11) – – 18,699,697 1,719,514 14,338,003 16,004,887 19,831,837 5,690,546

Sundry creditors comprise mainly of value added tax payables in the respective tax jurisdiction of the subsidiaries.

The amount payable to directors is unsecured, interest-free and repayable on demand.

The group’s other payables that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $

United States dollars 119,355 – Singapore dollars 89,291 201,008

17 LONG-TERM LOANS Group Company 2007 2006 2007 2006 $ $ $ $ State loan: Unsecured (i) 11,425,552 12,326,063 – –

Bank loans: Secured 13,478,400 8,907,544 – – Unsecured 16,569,399 6,837,422 – –

Loan due to related parties: Unsecured 3,370,730 – – –

Loan due to outside creditors: Unsecured (ii) – 12,600,000 – 12,600,000

Total 44,844,081 40,671,029 – 12,600,000

Less: Current portion Bank loans - unsecured 6,713,157 485,330 – – Loan due to outside creditors - unsecured – 12,600,000 – 12,600,000 State loan - unsecured 7,032,634 4,373,923 – – Total 13,745,791 17,459,253 – 12,600,000

Net 31,098,290 23,211,776 – –



17 LONG-TERM LOANS cont’d

Details of the group’s loans are as follows:

The unsecured state loan amounting to $11,425,552 (2006 : $12,326,063) is repayable in 12 semi-annual instalments till December 2009. The loan is interest-free. The effective interest rate is deemed to be 7.5% (2006 : 7.5%) per annum.

A bank loan amounting to $2,138,400 (2006 : $2,032,140), which is secured by all the assets of a subsidiary, is repayable on December 2011. Interest is charged at 8.55% (2006 : 8.55%) per annum.

A bank loan amounting to $11,340,000 (2006 : $6,875,404), which is secured by all the assets of a subsidiary, is repayable in annual instalments commencing August 2011 till August 2016. Interest is charged at 8% (2006 : 8%) per annum.

An unsecured bank loan amounting to $6,480,000 (2006 : $6,158,000) is repayable in two annual instalments till November 2008. The loan bears interest at 7.5% per annum.

Unsecured bank loans amounting to $156,575 (2006 : $380,390) are repayable in monthly instalments till March 2009. The loans bear an average interest rate of 10% (2006 : 10.8%) per annum.

Unsecured bank loans amounting to $47,664 (2006 : $299,032) are repayable in monthly instalments till February 2008. The loans bear an interest rate of 10% (2006 : 10%) per annum.

Unsecured bank loan amounting to $9,720,000 (2006 : $Nil) is repayable in one instalment on July 2009. The loan bears an average interest rate of 5.75% per annum.

Unsecured bank loans amounting to $165,160 (2006 : $Nil) are repayable in three instalments till June 2010. The loan bears an average interest rate of 6.75% per annum.

In 2007, the loans due to related parties have no repayment terms. The loans are due to the minority shareholders of a subsidiary. The loan bears an average interest rate of 5.03% per annum.

The group’s long term loans that are not denominated in the functional currencies of the respective entities are as follows:

Group 2007 2006 $ $ United States dollars 3,370,730 –

Notes:

(i) The unsecured state loan from the government of Cameroon is carried at amortised cost at the balance sheet date using an effective interest rate of 7.5% (2006 : 7.5%) per annum.

(ii) In 2006, the loan due to outside creditors arose pursuant to an Investment Agreement in connection with the voluntary conditional take-over of Electro Magnetics (1992) Ltd (Note 11). As at December 31, 2007, the group has repaid all amounts owing to the Judicial Manager of Electro Magnetics (1992) Ltd.

The directors are of the opinion that the fair values of the group’s long term borrowings, by discounting their future cash fl ows at market rates, approximate their carrying values as shown in the fi nancial statements.




18 FINANCE LEASES

Group Company Present value Present value Minimum of minimum Minimum of minimum lease payments lease payments lease payments lease payments 2007 2006 2007 2006 2007 2006 2007 2006 $ $ $ $ $ $ $ $

Amounts payable under

fi nance leases:

Within 1 year 151,596 159,759 129,324 136,924 97,202 97,202 83,643 83,643

In the second to fi fth years

inclusive 242,947 357,321 204,782 305,400 53,426 150,627 46,138 129,780

After fi ve years 53,781 14,654 45,404 11,771 – – – –

448,324 531,734 379,510 454,095 150,628 247,829 129,781 213,423

Less: Future fi nance charges (68,814) (77,639) – – (20,847) (34,406) – –

Present value of lease

obligations 379,510 454,095 379,510 454,095 129,781 213,423 129,781 213,423

Less: Amount due for

settlement within

12 months (shown

under current

liabilities) (129,324) (136,924) (83,643) (83,643)

Amount due for settlement

after 12 months 250,186 317,171 46,138 129,780

It is the group’s policy to lease certain of its plant and equipment under finance leases. The average lease term is two years. For the year ended December 31, 2007, the average effective borrowing rate ranges from 4.33% to 8.35% (2006 : 4.33% to 8.35%) per annum and 4.42% to 8.35% (2006 : 4.42% to 8.35%) per annum for the group and company respectively. Interest rates are fixed at the contract date, and thus expose the group to fair value interest rate risk. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

All lease obligations are denominated in the functional currencies of the respective entities.

The fair value of the group’s lease obligations approximates their carrying amount.

The group’s obligations under finance leases are secured by the lessors’ title to the leased assets.



19 DEFERRED INCOME TAX Group Company 2007 2006 2007 2006 $ $ $ $

Balance at beginning of year 2,051,143 1,606,869 18,990 18,990 (Credit) Charge to profi t and loss (Note 24) (913,637) 567,469 – – Exchange adjustment (136,033) (123,195) – – Balance at end of year 1,001,473 2,051,143 18,990 18,990

The balance represents the tax effect of temporary differences on the excess of tax over book depreciation relating to property, plant and equipment.

Certain deferred tax assets and liabilities have been offset in accordance with the group and company’s accounting policy. The following is the analysis of the deferred tax balances (after offset) for balance sheet purposes.

Group Company 2007 2006 2007 2006 $ $ $ $

Deferred tax liabilities 1,039,430 2,051,143 18,990 18,990 Deferred tax assets (37,957) – – – 1,001,473 2,051,143 18,990 18,990

20 SHARE CAPITAL Group and Company 2007 2006 2007 2006 Number of ordinary shares $ $

Issued and fully paid: At the beginning of the year 2,020,604,940 2,020,604,940 169,616,006 101,030,247 Transfer from share premium account – – – 68,585,759 At the end of the year 2,020,604,940 2,020,604,940 169,616,006 169,616,006

The company has one class of ordinary shares which carry no right to fi xed income.

As a result of the Companies (Amendment) Act 2005, the concept of authorised share capital and par value has been abolished. Any amount standing to the credit of the share premium account has been transferred to the company’s share capital account on the effective date in 2006.

21 REVENUE Group 2007 2006 $ $

Sale of goods 166,398,041 175,932,078

22 OTHER OPERATING INCOME Group 2007 2006 $ $

Interest income from non-related companies 1,233,211 309,979 Others 145,708 34,969 Total 1,378,919 344,948




23 FINANCE COSTS Group 2007 2006 $ $

Interest on bank borrowings and loans 2,450,373 2,023,142 Interest on obligations under fi nance leases 23,714 25,409 Deemed interest on long-term state loan from the Cameroon government 798,592 1,033,815 3,272,679 3,082,366

24 INCOME TAX Group 2007 2006 $ $

Current tax – Singapore 1,825,916 2,943,221 – Foreign 3,717,490 2,831,409 Deferred tax (Note 19) (913,637) 567,469 Overprovision in prior year - current (604,800) (411,036) Withholding tax 85,401 – Income tax expense for the year 4,110,370 5,931,063

Domestic income tax is calculated at 18% (2006 : 20%) of the estimated assessable profi t for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

Group 2007 2006 $ $

Tax at the domestic income tax rate of 18% (2006 : 20%) 5,650,434 11,082,231 Non taxable items (3,856,138) (3,078,422) Overprovision in prior year (604,800) (411,036) Tax effect of utilisation of deferred tax benefi ts previously not recognised (1,332,769) (5,096,449) Deferred tax benefi ts not recognised – 100,834 Effect of different tax rates of subsidiaries operating in other jurisdictions 969,631 473,828 Effect on deferred tax balances due to the change

in income tax rate (208,957) – Effect of income tax at concessionary tax rate (279,553) – Withholding tax 85,401 – Foreign taxes paid by overseas operations 3,717,490 2,831,409 Exempt income (28,808) (10,797) Others (1,561) 39,465 Tax expense for the year 4,110,370 5,931,063

A subsidiary in Singapore is accorded a concessionary tax rate of 10% on certain income given that it qualifi es for the Global Trading Programme Incentive Scheme with effect from January 1, 2007 for 5 years.

Subject to agreement with the Comptroller of Income Tax and the tax authorities in the relevant foreign tax jurisdictions in which the group operates and conditions imposed by law, the group has tax loss carryforwards, investment allowances and temporary differences available for offsetting against future taxable income as detailed below. In addition, the Singapore tax loss carryforwards and temporary differences are subject to the retention of majority shareholders as defi ned.



24 INCOME TAX EXPENSE cont’d

Group 2007 2006 $ $ Tax loss carryforwards

- Foreign 4,665,821 3,317,761

Deferred tax benefi t on above unrecorded 1,796,341 638,669

Future tax benefi ts from the foreign tax loss carryforwards have a limited life of four years to offset against future profi ts after which any unutilised amount will be foregone.

Group 2007 2006 $ $ Investment allowances

- Foreign 4,001,400 –

Deferred tax benefi t on above unrecorded 770,270 –

Future tax benefi ts from the foreign investment allowances have a limited life of three years to offset against future profi ts after which any unutilised amount will be foregone.

Group 2007 2006 $ $ Temporary differences

- Foreign 6,729,480 13,153,488

Deferred tax benefi t on above unrecorded 1,295,425 2,532,036

Future tax benefi ts from the foreign temporary differences are available for an unlimited future period.

Deferred tax assets have not been recognised in respect of the tax loss carryforwards, investment allowances and temporary differences because of the uncertainty of future income streams and unstable tax regimes in Cameroon and Ivory Coast where the group operates.

25 PROFIT FOR THE YEAR

In addition to the charges and credits disclosed elsewhere in the notes, this item includes the following charges (credits):

Group 2007 2006 $ $ Depreciation and amortisation:

Depreciation of property, plant and equipment 4,580,440 3,748,715 Depreciation of plantation assets 4,280,372 3,831,451 Total depreciation and amortisation 8,860,812 7,580,166




25 PROFIT FOR THE YEAR cont’d Group 2007 2006 $ $ Directors’ remuneration: - of the company 1,566,394 1,656,304 - of the subsidiaries 953,590 938,706 Total directors’ remuneration 2,519,984 2,595,010 Employee benefi ts expense (including directors’ remuneration):

Defi ned contribution plans 2,230,964 2,072,930 Others 25,058,827 24,832,373 Total employee benefi ts expense 27,289,791 26,905,303

Net foreign exchange losses 1,511,985 1,777,244

Cost of inventories recognised as expenses 107,398,824 95,426,271

Audit fees: - paid to auditors of the company 160,109 109,659 - paid to other auditors 212,829 172,852

Non-audit fees: - paid to auditors of the company 26,745 1,400 - paid to other auditors 11,114 12,748

Loss (Gain) on disposal of property, plant and equipment 54,515 (6,657)

Allowance for doubtful other receivables 49,271 72,151

26 EARNINGS PER SHARE

Basic and fully diluted earnings per ordinary share for the group are based on the consolidated profi ts attributable to shareholders of $22,051,721 (2006 : $42,957,334) divided by 2,020,604,940 (2006 : 2,020,604,940) ordinary shares in issue during the year.

27 SEGMENT INFORMATION

No information by business segments is presented as the operations and net assets of substantially all the subsidiaries of the company are associated with the rubber plantation and processing business.

Segment revenue based on geographical location of customers is as follows: Group 2007 2006 $ $

United States of America 11,917,983 8,682,744

Europe 140,646,850 163,785,437

Others 13,833,208 3,463,897

Consolidated total 166,398,041 175,932,078

As the group is engaged principally in the rubber plantation and processing business in Africa, no further disclosures by geographical location are presented.



28 ACQUISITION OF SUBSIDIARY

On April 12, 2007, the group acquired 51% equity interest of P.T. Bumi Jaya for a consideration of $1,727,046. This transaction has been accounted for by the purchase method of accounting. As the consideration paid represents the carrying amount and fair value of the net assets acquired, there is no goodwill arising from the acquisition.

The net assets of the subsidiary as at April 12, 2007 are as follows:

Acquiree’s carrying amount Fair value before combination adjustments Fair value $ $ $ 2007

Net assets acquired:

Property, plant and equipment 804,549 – 804,549 Cash and bank balances 440,313 – 440,313 Other receivables and prepayments 2,534,210 – 2,534,210 Inventories 162,592 – 162,592 Trade payables (58,773) – (58,773)

Other payables (2,155,845) – (2,155,845)

1,727,046 – 1,727,046

Goodwill –

Total consideration 1,727,046

Group 2007 2006 $ $ Net cash outfl ow arising on acquisition: Consideration payable (1,727,046) – Cash and cash equivalents acquired 440,313 – Net consideration payable (1,286,733) –

The above net consideration payable was offset against a loan granted by the group to the subsidiary prior to acquisition. Accordingly, there is no cash outfl ow arising on acquisition.

P.T. Bumi Jaya contributed approximately $11 million revenue and a loss of approximately $363,000 to the group’s profi t before tax for the period between the date of acquisition and the balance sheet date. Included in the loss, is a charge for pre-operating expenditure of $448,000. If the acquisition had been completed on January 1, 2007, total group revenue and profi t for the year would have been approximately the same given that the entity only commenced active operations after acquisition.

29 CONTINGENT LIABILITIES

Under a labour collective agreement entered into in November 2002, and which have since expired in November 2007, a clause was included in that agreement which obliged the group’s subsidiary in Cameroon, being Hevecam Cameroon S.A., to pay each employee a sum of money upon their retirement. This benefi t was in addition to the compulsory monthly contributions made for each employee towards the State run retirement pension fund, known as CNPS. The management of the Cameroon subsidiary will soon enter into formal negotiations with the relevant parties for a new collective agreement and shall endeavour to have the clause removed from the labour collective agreement contract.




29 CONTINGENT LIABILITIES cont’d

As at December 31, 2007, an amount of $362,000 has been provided for payments to staff expected to be retiring in Year 2008. With regards to employees retiring after 2008, management will address this accordingly in line with the new collective agreement to be entered into. Based on informal discussions to-date, the directors are of the view that at this point in time pending the outcome of the formal negotiations, no provision needs to be made in respect of employees retiring after 2008 given that they will be covered by the new collective agreement. Certain information required by FRS 37 on “Provisions, Contingent Liabilities and Contingent Assets” has not been disclosed in this note as the directors are of the view that it is in the interest of the group, not to do so given the circumstances detailed above.

30 OPERATING LEASE ARRANGEMENTS Group 2007 2006 $ $ Minimum lease payments under operating leases recognised as an expense in the year 566,255 222,672

At the balance sheet date, the group has outstanding commitments under non-cancellable operating leases which fall due as follows:

Group Company 2007 2006 2007 2006 $ $ $ $ Within one year 634,047 83,502 315,829 – In the second to fi fth years inclusive 875,795 – 437,898 – 1,509,842 83,502 753,727 –

Operating lease payments represent rentals payable by the group for certain of its offi ce premises. Leases are negotiated for an average term of two years and rentals are fi xed for that period.

31 DIVIDENDS

On May 21, 2007, a one-tier tax exempt dividend of 0.5 cents per share (total dividend of $10,103,025) was paid to shareholders.

In respect of the current year, the directors proposed that a one-tier tier tax exempt dividend of 0.25 cents per share to be paid to shareholders between May 23, 2008 to June 3, 2008. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these fi nancial statements. The proposed dividend is payable to all shareholders on the Register of Members on May 12, 2008. The total estimated dividend to be paid is $5,100,000.



Description Location Tenure

Plantations covering land area of 40,000 hectares Niete, 50 years from 1996 plus Cameroon 50 years, renewable

Factory, hospital, workshop buildings and housing Niete, 50 years from 1996 plus complex within the plantation areas Cameroon 50 years, renewable

Plantations covering land area of 1,511 hectares Anguededou, 66 years leasehold from 1995 Ivory Coast

Factory buildings and housing complex within the Anguededou, 66 years leasehold from 1995plantation areas Ivory Coast

Factory buildings and housing complex covering Tanjung 30 years leasehold from 2006land area of 6 hectares Tabalong, South Kalimantan

GMG Global Ltd & Its SubsidiariesMajor Properties As at December 31, 2007



No. of Shares issued : 2,020,604,940 shares

Class of Shares : Ordinary Share

Voting Rights : One vote per share

SHAREHOLDING OF THE SUBSTANTIAL SHAREHOLDERS AS AT 17 MARCH 2008

Name

Jeffrey Gondobintoro 1,080,000 1,231,007,875

Estate of Joseph Gondobintoro,

Deceased 55 1,256,727,875

Yudson Gondobintoro 7,320,000 1,226,707,875

Mieke Bintati Gondobintoro 7,320,000 1,226,707,875

Ineke Gondobintoro – 261,798,811

Panwell (Pte) Ltd 344,911 261,453,900

GMG Holding (HK) Ltd 964,909,064 –

Notes:

1. Estate of Joseph Gondobintoro, Deceased, is deemed interested in all the shares, direct and deemed, held by Jeffrey

Gondobintoro, Yudson Gondobintoro and Mieke Bintati Gondobintoro.

2. Estate of Joseph Gondobintoro, Deceased, also has a benefi cial interest in 10,000,000 shares held by HL Bank Nominees

(S) Pte Ltd.

3. Jeffrey Gondobintoro, Yudson Gondobintoro, Mieke Bintati Gondobintoro and Ineke Gondobintoro are deemed interested in

261,798,811 shares held by Panwell (Pte) Ltd, of which 344,911 shares are direct interest.

4. Jeffrey Gondobintoro, Yudson Gondobintoro and Mieke Bintati Gondobintoro are deemed interested in 964,909,064 shares

held by GMG Holding (HK) Ltd.

5. Jeffrey Gondobintoro also has a benefi cial interest in 4,300,000 shares held by Phillip Securities Pte Ltd.

6. Panwell (Pte) Ltd has a benefi cial interest in 261,453,900 shares held by UOB Kay Hian Pte Ltd.

DISTRIBUTION OF SHAREHOLDINGS AS AT 17 MARCH 2008

Shareholdings in whichsubstantial shareholders

are deemed to have an interest

Registered in the name of substantial

shareholders

Size of Shareholdings

1 - 999

1,000 - 10,000

10,001 - 1,000,000

1,000,001 and above

Total

Number of Shareholders

2,332

6,254

3,012

60

11,658

%

20.00

53.65

25.84

0.51

100.00

Number of Shares

1,481,442

24,772,321

214,233,311

1,780,117,866

2,020,604,940

%

0.07

1.23

10.60

88.10

100.00

GMG Global Ltd (Co. Reg. No. 199904244E) (Incorporated In the Republic of Singapore)

Statistics of Shareholdings As at 17 March 2008



TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares %

1 GMG Holding (HK) Ltd 964,909,064 47.75

2 UOB Kay Hian Pte Ltd 283,826,900 14.05

3 Citibank Nominees S’pore Pte Ltd 84,414,932 4.18

4 HSBC (Singapore) Nominess Pte Ltd 76,262,000 3.77

5 United Overseas Bank Nominees Pte Ltd 38,183,686 1.89

6 DBS Nominees Pte Ltd 27,127,400 1.34

7 Phillip Securities Pte Ltd 24,563,800 1.22

8 Nomura Singapore Limited 24,202,000 1.20

9 DB Nominees (S) Pte Ltd 21,581,000 1.07

10 BNP Paribas Nominees Singapore Pte Ltd 20,197,000 1.00

11 See Yong Hang 18,626,000 0.92

12 Raffl es Nominees Pte Ltd 16,192,800 0.80

13 Oversea-Chinese Bank Nominees Pte Ltd 15,190,200 0.75

14 Hong Leong Finance Nominees Pte Ltd 14,290,000 0.71

15 HL Bank Nominees (S) Pte Ltd 10,832,527 0.54

16 Lim & Tan Securities Pte Ltd 10,644,000 0.53

17 Tan Thuan Cher 10,144,000 0.50

18 Cho Hong Cheen 10,096,000 0.50

19 Chandra Juana or Go To Jen 8,942,000 0.44

20 Mieke Bintati Gondobintoro 7,320,000 0.36

Total : 1,687,545,309 83.52

37.6% of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.

TREASURY SHARES The Company does not hold any Treasury Shares.

Statistics of Shareholdings cont’d As at 17 March 2008



NOTICE IS HEREBY GIVEN that the Annual General Meeting of GMG GLOBAL LTD (the “Company”) will be held at 55 Market Street #03-01 Singapore 048941 on Wednesday, 30 April 2008 at 9.00 am for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December 2007 together with the Auditors’ Report thereon.

(Resolution 1)

2. To declare a fi rst and fi nal one-tier tax exempt dividend of 0.25 cents per ordinary share for the year ended 31 December 2007 (2006: 0.5 cents one-tier tax exempt dividend per ordinary share).

(Resolution 2)

3. To re-elect the following Directors retiring by rotation pursuant to Article 89 of the Company’s Articles of Association:

(i) Mr Ong Kian Min (Resolution 3) (ii) Mr Yudson Gondobintoro (Resolution 4)

Mr Ong Kian Min will, upon re-election as a Director of the Company, remain a member of the Audit Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited. Mr Ong Kian Min will also remain as Chairman of the Nominating and Remuneration Committees.

Mr Yudson Gondobintoro will, upon re-election as a Director of the Company, remain a member of the Audit Committee and will be considered non-independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited. Mr Yudson Gondobintoro will also remain a member of the Nominating and Remuneration Committees.

4. To re-appoint Deloitte & Touche as the Company’s Auditors and to authorise the Directors to fi x their remuneration.

(Resolution 5)

5. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

6. To approve the payment of Directors’ fees of S$160,000 for the year ending 31 December 2008, to be paid quarterly in arrears (2007: S$160,000).

(Resolution 6)

To consider and if thought fi t, to pass the following resolution as Ordinary Resolution, with or without any modifi cations:

7. Authority to allot and issue shares up to 50 per centum (50%) of the total number of issued shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, authority be given to the Directors of the Company to issue shares (“Shares”) whether by way of rights, bonus or otherwise, and/or 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 at any time and upon such terms and conditions and to such persons as the Directors may, in their absolute discretion, deem fi t provided that:

(a) the aggregate number of Shares (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, of which the aggregate number of Shares and convertible securities to be issued other than on a pro rata basis to all shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the Company;

Notice of Annual General Meeting

GMG Global Ltd (Co. Reg. No. 199904244E) (Incorporated In the Republic of Singapore)



(b) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (a) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) of the Company as at the date of the passing of this Resolution, after adjusting for:

(i) new shares arising from the conversion or exercise of convertible securities;

(ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this Resolution is passed; and

(iii) any subsequent bonus issue, consolidation or subdivision of shares;

(c) and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force (i) until the conclusion of the Company’s next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of such convertible securities. [See Explanatory Note]

(Resolution 7) By Order of the Board

Yvonne Choo Hazel Chia Luang Chew Company Secretaries Singapore, 14 April 2008

Explanatory Note:

The Ordinary Resolution 7 proposed in item 7 above, if passed, will empower the Directors from the date of the above Meeting until the date of the next Annual General Meeting, to allot and issue Shares and convertible securities in the Company up to an amount not exceeding fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to twenty per centum (20%) may be issued other than on a pro rata basis.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two (2) proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. If the appointor is a corporation, the instrument appointing a proxy must be executed under seal or the hand of its duly authorised offi cer or attorney.

3. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company

at 55 Market Street #03-01 Singapore 048941 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

Notice of Annual General Meeting cont’d


PROXY FORM(Please see notes below before completing this Form)

I/We, .........................................................................................................................................................................................................

of ..............................................................................................................................................................................................................being a member/members of GMG GLOBAL LTD (the “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, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on Wednesday, 30 April 2008 at 9.00 am and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specifi c 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 [ √ ] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2007

2 Payment of proposed fi rst and fi nal one-tier tax exempt dividend

3 Re-election of Mr Ong Kian Min as a Director

4 Re-election of Mr Yudson Gondobintoro as a Director

5 Re-appointment of Deloitte & Touche as Auditors

6 Approval of Directors’ fees amounting to S$160,000 for the year ending 31 December 2008

7 Authority to allot and issue new shares

* Delete where inapplicable

Dated this day of 2008

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

GMG GLOBAL LTD(Co. Reg. No. 199904244E)(Incorporated In the Republic of Singapore)

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 defi ned

in Section 130A of the Companies Act, Chapter 50 of Singapore), 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 a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifi es the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 55 Market Street #03-01 Singapore 048941 not less than forty-eight (48) hours before the time appointed for the Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

6. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General: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 specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered 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 forty-eight (48) hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.

......................................................................

IMPORTANT:1. For investors who have used their CPF monies to buy GMG Global Ltd’s

shares, this Annual Report is forwarded to them at the 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 vote should contact their CPF Approved Nominees.

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members


FOLD THIS FLAP FOR SEALING

2ND FOLD HERE

3RD FOLD HERE

AFFIXPOSTAGE

STAMPHERE

GMG Global LtdCo. Reg. No. 199904244E55 Market Street #03-01S i n g a p o r e 0 4 8 9 4 1


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GMG Global LimitedRegistered Office: 55 Market Street #03-01 Singapore 048941

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