Annual Financial Report

7 August 2018

Cambium Global Timberland Limited

("Cambium" or the "Company")

Annual Results for the year ended 30 April 2018

Cambium (AIM: TREE) announces its audited results for the year ended 30 April 2018. A copy of the annual report and accounts will be sent to shareholders and is available to view on the Company's website at http://www.cambium.je/.

For further enquiries, please contact:

Cambium Global Timberland Limited

Tony Gardner-Hillman (Chairman) Tel: +44 (0)1534 486 980

WH Ireland Limited (Nomad and Broker)

James Joyce / Chris Viggor Tel: 44 (0)207 220 1666

Praxis Fund Services Limited (Sub-Administrator and Delegate Company Secretary)

Matt Falla / Gemma Woods Tel: 44 (0)1481 737 600

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014). Upon the publication of this announcement via Regulatory Information Service this inside information is now considered to be in the public domain.

Cambium Global Timberland Limited

Annual Report and Audited Consolidated Financial Statements

For the year ended 30 April 2018

Chairman's Statement

Assets and values

The Company's Net Asset Value ("NAV") as of 30 April 2018 is 20.2p per share compared with 19.1p as at 30 April 2017, an increase of 5.7%.

Currency movements accounted for a decrease in the NAV of 15.7%. Net expenditure on forestry and other costs accounted for a further decrease of 7.9%. Reversal of the provision for the liability to Banco da Amazônia S.A. ("BASA") (announced on 21 December 2017) accounted for an increase of 20.4%.

The Board's view on land values remains unchanged from that reflected in the Company's Interim Report. However our view on the value of the wood growing on the land (including coppice re-growth at the 3R plantation in Tocantins State, Brazil) is now more positive, and the remaining 8.9% increase relates to the profit on disposal of the Group's Hawaiian properties and includes the upwards revaluation of the Group's plantations. The Directors consider the revaluation to be appropriate in light of the continuing evidence of market uplift in the region, including interest from prospective purchasers of wood.

The Board continues to see the removal of the BASA mortgages as a positive step towards the eventual disposal of the 3R property, and is now encouraging early stage third party interest in discussing a purchase of the land.

The Board continually monitors the Group's cash position. As at the year-end the Company and its subsidiaries had cash reserves of £3.07 million. The purchaser of the Group's Hawaiian properties continues to make timely payment of lease rental, resulting in corresponding sums being released to the Group from the rental escrow. The Group expects to receive in the region of US$59,500 (£43,200) per quarter until January 2020 and US$21,400 (£15,500) per quarter from April to October 2020. At 3R in Brazil, the purchaser of the harvested wood is required to pay the final 10% by the end of August 2018. In light of the foregoing, the Company expects to have sufficient reserves to meet outgoings for the foreseeable future. In addition, in Minas Gerais the Group is in contract negotiation with prospective purchasers of wood and here too is starting to see tentative indications of interest in buying land.

Costs

Cost curtailment efforts continue. There will be a need though for some expenditure at 3R to protect the value in the coppice re-growth, to protect the crops at Minas Gerais and prevent encroachment on the land.

Administrative expenses are down 21.7% (Note 7).

Forestry expenses as predicted (Notes 8 and 9) show a meaningful fall against the previous year, under every heading, the overall reduction amounting to 48.2%. This in part reflects the August 2017 disposal of Hawaii of course, but nevertheless demonstrates ongoing effort to curtail costs in a way that continues to protect the Group's remaining assets ahead of disposal.

The net result, allowing for the impact of currency fluctuations, is that total costs, including finance costs, for the period in Sterling terms amounted to £1.36 million, as compared with £2.16 million for the prior year.

Return of funds to shareholders

The Board recognises the present lack of liquidity in the market in the Company's shares and is considering a share buy-back programme. That would, however, be conditional on the Takeover Panel first agreeing the terms, to be put to shareholders for approval prior to the Panel waiving the requirements of Rule 9 of the City Code. In the meantime, the board seeks shareholder renewal at the forthcoming AGM of the familiar limited buy-back authority.

Conclusions

Milestones in the year comprise the beginnings of asset value recoveries, and time will tell if this is the start of an upward trend, demonstrable progress in containing costs, completion of the harvest at 3R of the wood sold to Suzano, completion of the sale of the plantations in Hawaii and our exit from that jurisdiction, leaving us with a forestry presence in Brazil only, and the release of the fetter of the lien over the 3R property.

Considerable work to prepare assets for sale has been completed and the last six months have seen a pick-up in prospects in Brazil. The wait continues for all of that to translate into further actual sales to bring the journey to a conclusion.

My unaltered ongoing role is to achieve that conclusion on the best terms sensibly achievable, and in the meantime to continue to keep expenditure down. I am pleased with the events the Company has been able to announce and I look forward to completing the process, and to reporting further in due course.

Antony Gardner-Hillman

Chairman

06 August 2018

Operations Manager's Report

For the year ended 30 April 2018

Total returns for the period covered by these financial statements were a profit of £3.36 million compared to a loss of £2.80 million in the previous year. The portfolio returns were primarily impacted by the disposal of the Hawaiian assets at a profit over book value of £0.62 million, the repayment of the 3R lien at a saving of £3.19 million over the previous provision (note 27), and the improved valuation of the Minas Gerais plantations of £0.69m. The returns also benefitted from reduced costs of administration and management and maintenance of the Company's assets, and the ending of lease payments in Hawaii.

Below is a summary of the results by geographic area.

Brazil

The Brazilian portfolio now represents 100% of the total physical assets and 89% of the overall net assets.

During the year Suzano, owner of a pulp-mill close to 3R, harvested the pulpwood from 3R under the contract entered into during 2016/17 and 80% paid. The harvesting and removal of the lower value wood for charcoal has proceeded more slowly than anticipated and as at the year end some wood remained on site and the final 10% of the contract payment had not yet been paid. Much of the year was taken up in negotiating the paying off of the bank lien on the property at a significant discount to the value previously provided. The main operations have been the tending of 1,600 hectares of coppice which have regrown well after the harvest and have the potential to produce an economic second rotation crop. In parallel, feasibility studies have been carried out on growing soya beans or rubber on the property to maximise land value. With a clear title and a better view of the potential of the property, low key marketing efforts have been restarted although as yet there appears little activity in the regional market for land or plantations.

The crops in the Minas Gerais properties continue to grow well and have benefited from adequate rainfall. However, they are now mature and growth rates are naturally starting to slow down. Fortunately, timber markets in the region have improved substantially over the year with prices for wood sold to make charcoal for iron smelting improving from around BRL 20 per cubic meter to around BRL 40 per cubic metre with a reasonable level of demand. Negotiations are now underway to sell the wood from two of the company's three properties in the State which should generate cash flow over the next four years and enhance the overall marketability of the properties.

Despite the improved wood prices, property market activity and values are lagging as investors have not yet entered the market in strength. At the same time existing charcoal and iron smelting owners have yet to rebuild their profitability and reserves to be able to make synergistic property purchases. Squatters have been a problem at Forquilha, however a camp was successfully and peacefully removed and extra security and fencing have prevented a recurrence.

Expenditure on security, fire protection and insurance will continue to be required to protect the Company's assets. In addition the exceptionally bureaucratic and litigious regulatory environment requires ongoing expenditure.

United States - Hawaii

The closing of the sale of the Hawaii plantations during the year required landlords' approval. This was only achieved through Cambium leaving an amount in escrow to cover the rents due until the ends of the leases. Amounts are released from the escrows when the new plantation owner pays the rent due. To date this has been happening as scheduled. Cambium records the balance in escrow as an asset which represents 2% of the total net assets. After year end the two holding companies have been wound up.

Conclusion

The focus remains the realisation of the Company's assets and distributions to shareholders. The repayment of the 3R lien has made it more likely that a sale of the property can be achieved if improvements in the Brazilian economy translate into a more active land market. At Minas Gerais there are now options to sell wood at improved prices which will both generate cash and demonstrate to potential investors the value of the properties. The necessary investments needed to maintain the health and vigour of the forests will continue to be made to protect shareholders' interests.

Robert Rickman

Operations Manager

06 August 2018

Consolidated Statement of Comprehensive Income

For the year ended 30 April 2018

All gains and losses from continuing and discontinued operations are attributable to the equity holders of the parent Company. There are no minority interests.

Consolidated Statement of Financial Position

At 30 April 2018

These consolidated financial statements were approved and authorised for issue on 06 August 2018 by the Board of Directors.

Consolidated Statement of Changes in Equity

For the year ended 30 April 2018

Consolidated Statement of Cash Flows

For the year ended 30 April 2018

Notes to the Consolidated Financial Statements

For the year ended 30 April 2018

1. General information

The Company and its subsidiaries (together the "Group") own a portfolio of forestry based properties which are managed on an environmentally and socially sustainable basis. Assets are managed for timber production, with exposure to emerging environmental markets. As at the year end date the Group owned forestry assets located in Brazil.

The Company is a closed-ended company with limited liability, incorporated in Jersey, Channel Islands on 19 January 2007. The address of its registered office is Charter Place, 23/27 Seaton Place, St Helier, Jersey JE1 1JY.

These consolidated financial statements (the "financial statements") were approved and authorised for issue on 06 August 2018 and signed by Roger Lewis and Antony Gardner-Hillman on behalf of the Board.

The Company is listed on AIM, a market of the London Stock Exchange.

2. Basis of preparation

The consolidated financial information included in the financial statements for the year ended 30 April 2018 has been prepared in accordance with International Financial Reporting Standards ("IFRS") issued and adopted by the International Accounting Standards Board ("IASB"). They give a true and fair view and are in compliance with applicable legal and regulatory requirements of the Companies (Jersey) Law 1991.

The financial statements have been prepared in Sterling, which is the presentation currency and functional currency of the Company, and under the historical cost convention, except for investment property, plantations, buildings, assets and liabilities held for sale and certain financial instruments, which are carried either at fair value or fair value less cost to sell.

The preparation of the financial statements in accordance with IFRS requires Directors to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. It also requires management to exercise its judgement in the process of applying accounting policies. The main area of the financial statements where significant estimates are made by the Directors is in determining the fair value of the assets held for sale as disclosed in note 15. The areas involving high degrees of judgement or complexity, or areas where the assumptions and estimates are significant to financial statements are disclosed in note 4.

Going concern and assets and liabilities held for sale

On 30 November 2012, the Directors announced the outcome of the strategic review initiated in June 2012. The Directors proposed and recommended a change of investment policy with a view to implementing an orderly realisation of the Group's investments in a manner which maximises value for shareholders, and returning surplus cash to shareholders over time through ad hoc returns of capital. This proposal was approved by shareholders at an Extraordinary General Meeting ("EGM") on 22 February 2013. There is no set period for the realisation of the portfolio.

Since the EGM, the portfolio has been reviewed by the Directors with a view to an orderly sale of the assets in such a manner as to enable their inherent value to be realised. As part of this process, the Directors plan to sell the remaining assets when acceptable offers are received. As a result, as at 30 April 2018, the portfolio of assets is classified as held for sale (and its transactions for the year as discontinued operations) under IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', as disclosed in note 16.

As at the date of approval of these financial statements, the Directors have no intention to instigate a winding-up of the Company, a course of action that would require the approval of shareholders. As a result, as at 30 April 2018 the assets and liabilities of the Company pertaining to the Jersey operations have not been classified as held for sale and its operations continue to be treated as continuing.

The Directors have reviewed the Group's cash flow forecasts, which cover the period to 30 April 2020 and consider that the Group has sufficient resources available to pay its liabilities as they fall due. On the basis of the above, the Directors believe it is appropriate to prepare the financial statements on a going concern basis.

New, revised and amended standards

At the date of authorisation of these financial statements, the following relevant standards and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

New, revised and amended standards (continued)

In addition, the IASB completed its Annual Improvements 2014-2016 Cycle project in December 2016 and its Annual Improvements 2015-2017 Cycle project in December 2017. These projects have amended certain existing standards and interpretations effective for accounting periods commencing on or after 1 January 2018 or 1 January 2019.

The Directors do not anticipate that the adoption of these standards in future periods will have a material impact on the financial statements of the Group.

New accounting standards effective and adopted

The following amended standards have been applied for the first time in these financial statements.

In addition, the IASB completed its Annual Improvements 2014-2016 Cycle project in December 2016. This project has amended certain existing standards and interpretations effective for accounting periods commencing on or after 1 January 2017.

The adoption of these standards and amendments has had no material impact on the financial statements of the Group.

3. Significant accounting policies

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

Basis of consolidation

The financial statements incorporate the financial statements of the Company and its subsidiaries, including special purpose entities ("SPEs") controlled by the Company, made up to 30 April 2018. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee.

a) Subsidiaries

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

b) Transactions eliminated on consolidation

When necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

c) Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

· represents a separate major line of business or geographical area of operations;

· is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations;

· is a subsidiary acquired exclusively with a view to re-sale.

Classification as a discontinued operation occurs at the earliest of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontinued operation, the comparative statement of comprehensive income and statement of cash flows are re-presented as if the operation had been discontinued from the start of the comparative year.

Revenue and other income

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue can be measured reliably. Revenues are accounted for on an accruals basis.

Revenue comprises:

Sales - harvested timber or right of way

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

Finance income and finance costs

Finance income comprises interest income on funds invested.

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

Finance costs comprise bank charges and interest payable on the loan from a related party.

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

Foreign currencies

a) Functional and presentation currency

Items included in the financial statements of each of the Group entities are measured in the currency of the primary economic environment in which the entity operates (the "functional currency"). The Group has selected Sterling as its presentation currency, as it is the currency in which capital has been raised and dividends paid, and is the functional currency of the Company.

b) Transactions and balances

Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of transactions. At each period end date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing on the period end date. Non-monetary assets and liabilities that are carried at fair value and denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on translation are included in net profit or loss for the period, except for exchange differences arising on non-monetary assets and liabilities where the changes in fair value are recognised in other comprehensive income.

c) Group companies

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

The following exchange rates have been applied in these financial statements to convert foreign currency balances to Sterling:

On consolidation, the exchange differences arising from the translation of the net investment in foreign entities are recognised in other comprehensive income and are taken to the translation reserve.

Expenses

All expenses are accounted for on an accruals basis. Expenses which are incidental to the acquisition of an investment property or plantation are included within the cost of that property and plantation; for example this will include legal fees, due diligence fees and other expenses associated with acquisitions that are capitalised. Expenses incurred in relation to the disposal of an investment property or plantation are included in profit or loss on disposal of that asset.

Provisions

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Impairment

The carrying amounts of the Group's non-financial assets, other than investment property and plantations, buildings and improvements are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists the asset's recoverable amount is estimated. Any impairment loss is recognised in profit or loss of the Statement of Comprehensive Income whenever the carrying amount of an asset exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped together at the lowest levels for which there are separately identifiable cash flows.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount, after the reversal, does not exceed the amount that has been determined, net of applicable depreciation, if no impairment loss had been recognised.

Taxation

The Company is subject to Jersey income tax at a rate of 0%. No charge to Jersey taxation arises on capital gains. The Group is liable to foreign tax arising on activities in the overseas subsidiaries. During the year, the Group has owned subsidiaries incorporated in Brazil, British Virgin Islands and the United States.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit or net loss as reported in the Statement of Comprehensive Income because it excludes items of income and expense that are taxable or deductible in other years or that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted by the reporting date.

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

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

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Investment property and plantations

a) Investment property

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

Investment property is remeasured at fair value, which is the price at which an orderly transaction to sell the investment property would take place between market participants at the measurement date under current market conditions. The fair values are determined by the Directors, with reference to the latest offers received, current wood pricing and independent professional valuations. Gains or losses arising from changes in the fair value of or from disposal of investment property are recognised in profit or loss of the Statement of Comprehensive Income.

b) Plantations

Plantations are recognised as biological assets when the Group controls the asset as a result of past events, it is probable that future economic benefits will flow to the Group and the fair value or cost of the asset can be measured reliably. Plantations are measured on initial recognition and at each reporting date at fair value less cost to sell. The fair values are determined by the Directors, with reference to the latest offers received and independent professional valuations. Gains or losses arising from changes in the fair value of or from disposal of plantations are recognised in profit or loss of the Statement of Comprehensive Income. The Group's plantations are classified as consumable and mature biological assets. Agricultural produce harvested from plantations is classified as harvested timber. Gains or losses arising from changes in the fair value of or from disposal of plantations are recognised in profit or loss of the Statement of Comprehensive Income.

Leased assets

Investment property and plantations held by the Group under leases which transfer to the Group substantially all of the risks and rewards of ownership are classified as finance leases. During the year, the Group disposed of its leasehold assets in Hawaii, and holds no such assets as at 30 April 2018. Assets held under other leases are classified as operating leases and are not recognised in the Group's statement of financial position.

Assets held by the Group for operating leases as a lessor are presented in the Statement of Financial Position according to the nature of the asset.

Assets held for sale

Assets are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. The assets held for sale previously classified as investment property and plantations continue to be measured using the accounting policy applicable before reclassification as set out above. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognised in profit or loss.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. The Group offsets financial assets and financial liabilities if the Group has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis.

Financial assets

The Group's financial assets fall into the categories below, with the allocation depending to an extent on the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity.

Unless otherwise indicated, the carrying amounts of the Group's financial assets are a reasonable approximation of their fair values.

a) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise through deposits on new acquisitions and also incorporate other types of contractual monetary assets. They are included in current assets, except for maturities greater than twelve months after the reporting date which are classified as non-current assets. The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents.

Trade and other receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. The effect of discounting on these financial instruments is not considered to be material.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, such impairments directly reduce the carrying amount of the impaired asset and are recognised against the relevant income category in profit or loss of the Statement of Comprehensive Income.

Cash and cash equivalents are carried at cost and comprise cash in hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

b) De-recognition of financial assets

A financial asset (in whole or in part) is de-recognised either when the Group has transferred substantially all the risks and rewards of ownership; or when it no longer has control over the asset or a portion of the asset; or when the contractual right to receive cash flows from the asset has expired.

Financial liabilities

a) Financial liabilities at amortised cost

Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method. The effect of discounting on these financial instruments is not considered to be material.

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

b) De-recognition of financial liabilities

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

c) Stated capital

Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's shares are classified as equity instruments. For the purposes of the disclosures given in notes 22 and 23 the Group considers all its stated capital and all other reserves as equity. The Company is not subject to any externally imposed capital requirements.

d) Effective interest method

The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and of allocating interest income and expense over relevant periods. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability or where appropriate, a shorter period.

Dividends

A dividend is recognised as a liability in the financial statements in the period in which it becomes an obligation of the Company.

Determination and presentation of operating segments

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

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

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

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

4. Significant accounting judgements and key sources of estimation uncertainty

The Directors make estimates and assumptions concerning the Group's future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Valuation of assets and disposal group held for sale

The Directors determine the fair value of the Group's assets and disposal group held for sale, taking into consideration the valuations performed by its independent professional valuers; the latest offers received for the Group's assets; and using their judgement to determine the highest and best use of the properties and the principal market in which an orderly transaction would take place for the properties. Some of the inputs used in the valuation are based on assumptions. The Directors also make reference to market evidence of transaction prices for similar transactions, where available and appropriate (for details of significant inputs used in the calculation of the valuations see note 15). As well as making reference to the valuations performed by independent valuers, the Directors make their own judgement on the valuations of the Group's assets and disposal groups held for sale and on the estimated costs to sell those assets, with reference to the views of the Operations Manager and other advisors as to the likely realisable values of the assets in the current market.

Going concern

The Directors have determined that it is appropriate for the Group to prepare its financial statements on a going concern basis. Details of the Directors' judgements in making this assessment are contained in note 2.

Classification of assets and disposal group held for sale

The Directors intend to realise value from the sale of the Group's investments in an orderly manner but not within any specific time frame. In previous years, the Directors had undertaken a marketing process and implemented a disposal plan to locate buyers for the remaining assets in Hawaii and Brazil. During the year, the Group disposed of its assets in Hawaii, and harvested and sold almost all of its tree crop in the 3R Tocantins property. The remaining assets are classified as assets or disposal groups held for sale in these financial statements, and the Hawaii and Brazil segments are classified as discontinued operations.

Income and deferred taxes

The Group is subject to income and capital gains taxes in numerous jurisdictions. Significant judgement is required in determining the total provision for income and deferred taxes. There are many transactions and calculations for which the ultimate tax determination and timing of payment are uncertain. The Group recognises liabilities for current and deferred tax based on estimates of whether taxes will be due and at what rates those taxes will be calculated, and based on judgements made in assessing what income may be taxable and what items may be deductible for tax purposes. The Directors have determined that deferred tax assets should not be recognised in these financial statements due to the unpredictability of future taxable profits against which such assets could be used. Where the final tax outcome of these matters is different from the amounts that were initially recorded such differences will impact the income and deferred tax provisions in the period in which the determination is made.

5. Operating segments

The Board of Directors is charged with setting the Company's investment strategy in accordance with the Prospectus. The Board of Directors, as the Chief Operating Decision Maker ("CODM"), had, until 16 October 2014, delegated the day to day implementation of this strategy to its Investment Manager and, with effect from 16 October 2014, to its Operations Manager, but retains responsibility to ensure that adequate resources of the Company are directed in accordance with its decisions. The investment decisions of the Operations Manager have been and are reviewed on a regular basis to ensure compliance with the policies and legal responsibilities of the Board.

Whilst the Operations Manager may make the investment decisions on a day to day basis, any changes to the investment strategy, major allocation decisions or any asset dispositions or material timber contracts have to be approved by the Board, even though they may be proposed by the Operations Manager. The Board therefore retains full responsibility as to the major allocation decisions made on an ongoing basis.

The Operations Manager will always act under the terms of the Prospectus.

As at 30 April 2018, the Group operates in two geographical locations, which the CODM has identified as one non-operating segment, Jersey, and one operating segment, Brazil. Timberlands are located in Brazil. During the year, all segments, apart from Jersey, have been classified as discontinued operations (see note 16).

The accounting policies of each segment are the same as the accounting policies of the Group, therefore no reconciliation has been performed.

As at 30 April 2018 the Group owned four (30 April 2017: six) distinct parcels of land in one (30 April 2017: two) main geographical area.

5. Operating segments (continued)

All of the revenue in the year ended 30 April 2018 arose from other income received in Hawaii (see note 6) (30 April 2017: from subsidies received in Brazil).

The Group's investments will be realised in an orderly manner (that is, with a view to achieving a balance between returning cash to shareholders and maximising value). In light of the realisation strategy, there will be no specific investment restrictions applicable to the Group's portfolio going forward.

This policy will involve a continuing evaluation of the portfolio in order to assess the most appropriate realisation strategy to be pursued in relation to each investment.

The strategy for realising individual investments will be flexible and may need to be altered to reflect changes in the circumstances of a particular investment or in the prevailing market conditions. The Group will, in relation to each investment, seek to create competition amongst a range of interested parties.

The net cash proceeds from realisations of assets will be applied to the payments of tax or other liabilities as the Board thinks fit prior to making payments to shareholders.

6. Revenue

Other income in the year ended 30 April 2018 arose from extension payments received from the purchasers of the Hawaii properties in respect of extending the closing date of the sale of the properties. Income is recognised in the period it relates to on an accruals basis.

7. Administrative expenses

Professional and other fees includes the Company's own secretarial, administration and statutory fees, listing and registrar fees, insurance costs, broker's fees, legal fees and consultancy fees relating to the disposal of the Company's assets.

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

8. Forestry management expenses

9. Other operating forestry expenses

10. Finance income

11. Finance costs

12. Taxation

Taxation on loss on ordinary activities

The Group has incurred no tax charges during the year. A reconciliation of the Group's losses during the year to the zero tax charge is shown below.

The average tax credit rate is a blended rate calculated using the weighted average applicable tax rates of the jurisdictions in which the Group operates. The average of the tax rates in the jurisdictions in which the Group operates in the year was 29.56% (2017: 23.83%). The effective tax rate in the year was 0.00% (2017: 0.00%).

At the year-end date the Group has unused operational and capital losses. No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future taxable profits and capital gains available against which they can be utilised. Tax losses arising in the United States can be carried forward for up to 20 years; those arising in Brazil can be carried forward indefinitely.

Operational tax losses for which deferred tax assets have not been recognised in the consolidated financial statements

Accumulated operating losses at 30 April 2018 and 30 April 2017 in the table above relate entirely to discontinued operations. The value of deferred tax assets not recognised in regard to operational losses amounted to £1,456,321 (2017: £3,260,187), all of which related to discontinued operations.

Accumulated operating losses relating to continuing operations at the year-end date amounted to £27,432,159 (2017: £26,927,979). No deferred tax assets arose in respect of these losses.

At the year end the Group had accumulated capital losses of £1,473,786 (2017: £12,354,140). The accumulated capital losses at 30 April 2018 and 30 April 2017 related entirely to discontinued operations. The value of deferred tax assets not recognised in regard to these capital tax losses amounted to £501,087 (2017: £4,200,408), all of which related to discontinued operations.

Deferred taxation

As at 30 April 2018 and 30 April 2017 the Group had no deferred tax liabilities or recognised deferred tax assets.

13. Basic and diluted earnings/(loss) per share

The calculation of the basic and diluted earnings/(loss) per share in total and for continuing operations is based on the following profit/(loss) attributable to shareholders and weighted average number of shares outstanding.

14. Net asset value

15. Investment property and plantations

The Group's investment property and plantations are classified as disposal group and assets held for sale.

The Group engages external independent professional valuers to estimate the market values of the investment properties and plantations in Brazil on an annual basis, with the Operations Manager providing a desktop update valuation for the purposes of the Group's Interim Financial Statements.

The investment property is carried at its estimated fair value and plantations are carried at their estimated fair values less costs to sell as at 30 April 2018, as determined by the Directors taking into consideration the external independent professional valuers' valuations, the latest offers received for the investment property and plantations and the Directors' assessment of other factors that may influence prospective purchasers. The fair value measurements of investment properties and plantations have been categorised as Level 3 fair values based on the unobservable nature of significant inputs to the valuation techniques used.

Notwithstanding the results of the independent valuations, the Directors make their own judgement on the valuations of the Group's investment property and plantations, with reference to the views of the Operations Manager, other advisors and the latest offers received.

As at 30 April 2018, the estimated fair values of the 3R Tocantins investment properties and the Minas Gerais investment properties and plantations are based on the independent valuer's valuations, adjusted by the Directors as disclosed below.

The independent valuer has valued the investment property held for sale in 3R Tocantins at £7.0 million (BRL 33.7 million) (2017: £8.0 million (BRL 32.8 million)). However the almost complete lack of comparable land sales in the region in recent years has led to the Directors taking a prudent view of the valuer's estimated bare land values, including taking into account the most recent offer for the land in the year ended 30 April 2016, and they have accordingly applied a discount of approximately 48% (BRL 16.2 million (£3.4 million)) (2017: 20% (BRL 6.6 million (£1.6 million)) to the independent valuation, resulting in a carrying value of £3.6 million (BRL 17.5 million) (2017: £6.4 million (BRL 26.2 million)) for the 3R Tocantins land. On a gross basis the valuation of the land has decreased during the year, however this is a reflection of the fact that in previous years the valuation of the 3R Tocantins land was complicated by the presence of the lien on the property in favour of BASA (see note 27). On a net basis, taking into account the amount of the lien against the property, which was cleared during the year, the net 3R Tocantins land value has in fact increased from £1.4 million (BRL 6.2 million) as at 30 April 2017 to £3.6 million (BRL 17.5 million) as at 30 April 2018. This uplift of £2.2 million (BRL 9.3 million) during the year was achieved at a cost of £1.4 million (BRL 6.1 million), the amount of the settlement made to BASA.

During the prior year, the Group agreed the sale of the entire standing tree crop at 3R Tocantins to Suzano, a publicly owned Brazilian pulp and paper company. The vast majority of the trees sold had been harvested and paid for at 30 April 2018. Ownership of the trees passed to Suzano upon harvesting and removal from 3R Tocantins' property. The remaining unharvested trees have been valued at 30 April 2018 at their agreed sale price of £0.2 million (30 April 2017: £0.6 million), which amount is payable once all the wood has been removed.

In addition, the independent valuer has valued the regrowth in the plantations at 3R Tocantins since harvesting at £0.3 million (BRL 1.3 million) (30 April 2017: Nil), which the Directors believe represents a reasonable estimation of the fair value of the plantations as at 30 April 2018 before estimated selling costs, due to improvements in the timber market in Brazil during the year.

The independent valuer has valued the investment property held for sale in Minas Gerais at £8.4million (BRL 40.7 million) (2017: £9.6 million (BRL 39.5 million)). However, in view of the continued lack of market activity for bare land in Minas Gerais, the Directors consider it prudent to discount the independent valuation by approximately 35% (BRL 14.2 million (£2.9 million)) (2017: 21% (BRL 9.5 million (£2.0 million)), which takes into account the most recent offer in the year ended 30 April 2015 and the uncertainty of being granted the necessary forestry or agricultural licence required to achieve the level of productivity assumed by the valuer, resulting in a carrying value of £5.5 million (BRL 26.5 million) (2017: £6.4 million (BRL 26.5 million re-presented)) for the Minas Gerais land.

The independent valuer has valued the plantations at Minas Gerais at £5.3 million ((BRL 25.7 million) (2017: £5.1 million (BRL 20.9 million)). As at 30 April 2017, the Directors considered it prudent to discount the independent valuation by approximately 33%, resulting in a carrying value of £3.6 million (BRL 14.7 million re-presented) before estimated selling costs. As at 30 April 2018, however, due to improvements in the timber market in Brazil during the year, the Directors believe that the independent valuation represents a reasonable estimation of the fair value of the plantations before estimated selling costs.

In arriving at the adjusted valuations of the land at 3R Tocantins and Minas Gerais, the Directors have considered the current wood prices prevailing in those regions as an indicator of the economic potential of the land and therefore implicitly of its value. In this context the Directors noted that whilst wood prices have remained fairly stagnant in the period since the land was purchased in 2009 (when there was an active land market in Brazil), the independent valuer's estimations of the value of the land show an increase of approximately 75% over purchase price in Minas Gerais and of approximately 92% in 3R Tocantins. This supports the Directors' view that the independent valuers have been much too optimistic about the economic potential of the Minas Gerais and 3R Tocantins land, and believe that their valuations, which mark the value of the land much more closely to its original purchase price, represent a more realistic view of its fair value in the current market. The Directors have also considered the fact that certain areas of the 3R Tocantins and Minas Gerais properties remain unplantable, and have explored possible alternative uses of these areas to generate value from the land. The Directors believe that these adjusted valuations, after applying estimated selling costs of the plantations of £0.3 million (2017: £0.2 million), provide the best estimates of fair value as at 30 April 2018 and 30 April 2017.

In Hawaii, on 24 December 2015, the Group signed agreements for sale of the Pahala and Pinnacle properties, subject to a number of conditions precedent, and these sales were completed during the year. During the year, the Group agreed to an extension of the closing date of the transaction in return for a non-returnable additional payment to the Group of US$156,000, which is recognised in Revenue in the Statement of Comprehensive Income. For the purposes of the prior year end valuation the Directors took into consideration the agreed terms of this transaction, less estimated costs to sell.

The following tables show the valuation techniques used by the valuers in arriving at their estimates of the market values of the Minas Gerais and 3R Tocantins investment properties and plantations, as well as the significant unobservable inputs used by the valuers and their effects on the estimated market values as at 30 April 2018.

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

Regulatory and environmental risks

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

Supply and demand risk

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

Climate and other risks

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

Certain amounts of timber harvested by Suzano in relation to the sale of the plantations at 3R Tocantins had not yet been removed by Suzano and were held on site at the end of the year and at the end of the prior year. The Group retains certain insured risks relating to the timber until it is removed off site by Suzano.

16. Disposal groups and assets held for sale and discontinued operations

During the year, the Group continued its disposal plan for the remaining assets in Brazil and Hawaii.

The assets in Brazil are more likely to be sold through a disposal of the entities owning the assets. Accordingly, the Group's Brazil segment is presented as a disposal group held for sale.

The Brazil disposal group comprises the following assets and liabilities held for sale:

* The comparative balances of investment property and plantations have been represented to reflect a reclassification between the two categories as at 30 April 2017. This reclassification in relation to the Minas Gerais property only has no net impact on the total valuation of the investment property and plantations, which the directors have represented as £12,802,662 (previously £13,949,365) and £3,956,316 (previously £2,809,713) following a reappraisal of the prior year Minas Gerais value allocation.

A loss of £2,439,214 related to the Brazil disposal group, representing foreign exchange translation of discontinued operations, is included in other comprehensive income (see note 18).

Total assets held for sale in the statement of financial position are as follows:

The fair value measurement of £14,774,260 has been categorised as a Level 3 fair value based on the estimated fair values of the investment property and the estimated fair values of the plantations less costs to sell. These assets were measured using the methods outlined in note 15. The fair value of other assets and liabilities within the disposal group is not significantly different from their carrying amounts.

Net cash flows attributable to the discontinued operations were as follows:

17. Trade and other receivables

The Group's exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in note 25.

18. Foreign exchange translation

The translation reserve movement in the year has arisen as follows:

19. Loan payable to related party

During the year, the Group agreed an unsecured loan funding facility with Peter Gyllenhammar AB ('PGAB'), the Company's largest shareholder, for approximately £1.4 million, in order to enable the Group to remove outstanding mortgages over the Group's 3R Tocantins property (see note 27) without depleting existing cash balances.

The interest rate on the loan is 6% for the first 12 months and thereafter 8%. PGAB has agreed not to have recourse against the existing cash balances. There is no specified repayment date (and consequently no default interest rate) and the Company is only required to repay the loan or pay interest out of cash flow from the land and/or timber assets presently held in Brazil which are surplus to requirements. The loan agreement contains borrower covenants requiring lender consent for the Company to return to shareholders in excess of approximately £2,000,000 of the cash presently held, to purchase own shares for more than 12p per share, to declare or pay any dividend, or to make any significant new investment (not including asset maintenance or repair costs).

20. Trade and other payables

The Group's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 25.

21. Investment in Subsidiaries

The financial statements of the Group consolidate the results, assets and liabilities of the subsidiary companies listed below:

Cambium Pahala Inc and Cambium Pinnacle Inc were liquidated during the year and have been dissolved subsequent to the year end. There are no other significant restrictions, any funding requirements or risks associated with the Company's interest in the above subsidiaries other than those already disclosed in these financial statements.

22. Net asset value reconciliation

23. Stated capital

The total authorised share capital of the Company is 250 million shares of no par value. On initial placement 104,350,000 shares were issued at 100 pence each. Shares carry no automatic rights to fixed income but the Company may declare dividends from time to time to which shareholders are entitled. Each share is entitled to one vote at meetings of the Company.

On 22 February 2007 a special resolution was passed by the Company to reduce the stated capital account from £104,350,000 to £2,000,000. Approval was sought from the Royal Court of Jersey and was granted on 29 June 2007. The balance of £102,350,000 was transferred to a distributable reserve on that date.

The Company was granted authority by shareholders on 15 August 2008 to make market purchases of its own shares, an authority which has been renewed annually thereafter, most recently on 28 September 2017.

On 27 January 2015, shareholders approved a resolution to distribute £5,000,000 of cash via a tender offer of 25 pence per share, resulting in the buy-back and cancellation of 20,000,000 shares.

Shares in issue

24. Reserves

The movements in the reserves for the Group are shown in the Statement of Changes in Equity.

Translation reserve

The translation reserve comprises accumulated exchange differences arising on consolidation of the Group's foreign operations (see note 18).

Distributable reserve

In June 2007 the Company reduced its stated capital account and a balance of £102,350,000 was transferred to distributable reserves. This reserve has been utilised by the Company to purchase its own shares (£6,252,140) and for the payment of dividends (£12,508,800), leaving a balance at 30 April 2018 of £83,589,060.

25. Financial instruments risk exposure and management

In common with other businesses, the Group is exposed to risks that arise from use of financial instruments. The notes below describe the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

The Board of Directors and Operations Manager are responsible for overseeing the measurement and control of all aspects of risk management and hold regular meetings in order to do so.

Various risk management models are in place which help to identify and monitor key risks both at individual investment level and at a Group level. The risk management policies apply equally to the Group. Further details regarding these policies are set out below.

Categories of financial assets and financial liabilities

(a) Credit risk

Credit risk is the risk that the counterparty to a financial instrument will fail to meet obligations, causing a loss to the Group.

Cash and cash equivalents represent the majority of the Group's financial assets. The credit risk associated with the holding of cash and cash equivalents is managed under the Group's cash management policy. This policy states that the Group must spread cash between the Group's bankers, each of whom at any given time should hold an approximate maximum of the lower of either £5 million or 10% of the net asset value. The cash management policy will be reviewed on an annual basis by the Board of Directors and the Operations Manager.

The cash held with Investec Bank (Channel islands) Limited is temporarily not in accord with the Group's cash management policy in that it very slightly exceeds 10% of net asset value (approximately 10.03% as at year end date). This was remedied soon after the year end date.

The following table below shows the maximum exposure to risk of the major counterparties at the year-end date.

(a) Credit risk (continued)

The Group is subject to counterparty concentration risk in respect of its holdings of cash with Investec Bank (Channel Islands) Limited and Royal Bank of Scotland International Limited, which together represent 87% of the Group's total cash balance. Bankruptcy or insolvency of either of these counterparties may cause the Group's rights with respect to these cash holdings to be delayed or limited. The Group monitors this risk by monitoring the credit ratings of Investec Bank (Channel Islands) Limited and Royal Bank of Scotland International Limited, which both currently have Fitch short-term credit ratings of F2. During the year Banco Bradesco was downgraded by Fitch from F1+ to B, however the Board noted that this was due to the downgrading of Brazil's sovereign rating, and not due to any specific decline in the creditworthiness of Banco Bradesco itself.

(b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet financial liability obligations as they fall due. The Group's liquidity risk is managed by the Operations Manager in accordance with policies and procedures established by the Board. The Board believes that the Group has sufficient resources to appropriately manage its liquidity risk.

The tables below analyse the Group's financial liabilities, which will be settled on a net basis, into relevant maturity groupings based on the remaining period at the year end to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows including interest payments. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant.

Contractual maturities of financial liabilities

* Repayment of the loan is dependent on the sale of the Brazilian properties, which is estimated to be within 3 years.

(c) Market risk

The sensitivity analyses in this note, relating to interest and exchange rates, are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur and changes in some of the assumptions may be correlated, for example, change in interest rates and change in market values.

(d) Foreign exchange currency risk

The Group is exposed to currency risk through investing in assets held in currencies other than the functional currency. As a result, the Group is exposed to the risk that the exchange rates of Sterling relative to other currencies may fluctuate and have an adverse effect on the Group's performance. The Group operates in various parts of the world and is exposed to foreign exchange risk arising from currency exposure to Brazilian Real and United States Dollar. Foreign exchange risk arises from commercial transactions, recognised monetary assets and liabilities and net investments in foreign operations. The Group does not hedge against currency risk and so bears the risk of currency fluctuation.

The tables below summarise the exposure the Group has to foreign exchange risk in regards to financial assets and financial liabilities.

The Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency with cash generated from their own operations in that currency.

At the reporting date the Group's exposure to foreign currency in regards to all foreign operations, including all assets and liabilities, was as follows (expressed in Sterling):

The Group is subject to concentration risk in relation to its exposure to US Dollars and Brazilian Real. The Group holds 2% (2017: 11%) of its net assets in US Dollars and 91% (2017: 89%) of its net assets in Brazilian Real.

At 30 April 2018, had Sterling strengthened by 15% (2017: 15%) in relation to all currencies, with all other variables held constant, the net asset value would have decreased by the amounts shown below:

A 15% weakening of Sterling against the above currencies would have resulted in an equal but opposite effect on the net asset value, on the basis that all other variables remain constant.

(e) Cash flow and fair value interest rate risk

Interest rate risk arises in the Group predominantly from the holding of cash and cash equivalents. The Board has established a cash management policy to ensure the best return from the Group's bankers and to mitigate interest rate risk arising from the holding of cash. Cash is predominantly held on short-term deposit and the Board reviews interest rates on a quarterly basis. The Group's interest rate profile is shown in the following tables.

For the Group, an increase of 100 basis points in interest yields as at the year end date would decrease the Group's pre-tax loss by £30,719 (2017: £22,720). A decrease of 50 basis points in interest yields (2017: 25 basis points) would have no effect on the Group's pre-tax loss (2017: no effect). The loan payable to related party bears interest at a fixed rate (increasing to 8.00% with effect from 22 December 2018) and is therefore not subject to interest rate risk.

(f) Fair values

The fair values of the Group's financial assets and liabilities carried at amortised cost are not significantly different from their carrying amounts.

(g) Fair value hierarchy

The following table analyses the Group's financial assets and liabilities. The different levels have been defined as follows:

The following tables show the reconciliation of the Group's significant assets held for sale categorised as Level 3 in the fair value hierarchy.

The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred.

26. Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell net assets.

There were no changes to the Group's approach to capital management during the year. Neither the Company nor any of its subsidiaries were subject to any externally imposed capital requirements as at 30 April 2018 or 30 April 2017.

27. Provisions

Until 21 December 2017, there existed a security interest on the property owned by 3R Tocantins Florestais Ltda. ("3R Tocantins") to cover a liability between the previous owners and Banco da Amazonia (BASA), a financial institution which lent money to the previous owners who used the property as collateral. In February 2009, BASA filed a lawsuit against the previous owners of 3R Tocantins aiming to foreclose on its mortgage and collect BRL 5.8 million (£1.4 million). As at 30 April 2017, the estimated total liability was BRL 19.9 million (approximately £4.8 million) after considering 1) a monthly interest rate of 1%, 2) the official monetary restatement of the INPC (Brazilian consumer prices index) (6.58% per annum up to December 2016 and 1.06% per annum thereafter), 3) court penalties (4.73% per annum) and 4) estimated attorney fees of 15% of the value of the claim as of the filing date of the collection lawsuit on 17 December 2009.

3R Tocantins held a security interest on Lizarda, another property of the previous owners, as cover for this potential liability in the event it materialised. A valuation completed in December 2013 valued this property at BRL 7.7 million (£1.9 million), however the security on this property may have been limited to BRL 5.0 million (£1.2 million) and may not have been enforceable.

3R Tocantins also had an outstanding liability due to the previous owners of BRL 1.0 million (£0.2 million) (30 April 2016: BRL 1.0 million (£0.2 million)), approximately 6% of the purchase price of the 3R Tocantins property, which was retained to support any liability associated with the previous owners.

As a result of the above circumstances, as at 30 April 2017, an amount of BRL 18.9 million (£4.6 million) (30 April 2017: BRL 18.9 million (£4.6 million)) had been provided to cover any potential claim. However, during the year, the Board was able to negotiate a settlement with BASA, under which the mortgages were removed at a cost to the Company of BRL 6.1 million (£1.4 million), including fees and legal expenses, and the write back of the net balance of the provision and the outstanding liability, less the settlement cost, amounting to BRL 13.8 million (£3.2 million) has been recognised in the Statement of Comprehensive Income in the year, and no provision has been recognised in the Statement of Financial Position as at 30 April 2018.

At the prior year end, the provision and the outstanding liability to the previous owners formed part of the Brazil disposal group and, were classified in these financial statements as liabilities held for sale (see note 16).

28. Related party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

During the year, in order to provide financial support for the release of the 3R Tocantins mortgages, the Company accepted an unsecured loan from its largest shareholder Peter Gyllenhammar AB ("PGAB") for approximately £1.4m. As at the date of the drawdown of the loan, PGAB held 28.82% of the Company's issued share capita, and therefore the loan constitutes a related party transaction. Please refer to note 19 for further details.

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

At the year end the Directors had the following interests in the shares of the Company:

Other material contracts

Under an agreement effective from 16 October 2014, Robert Rickman, a former Director of the Company, was engaged as Operations Manager to the Company, to be responsible for the management oversight and realisation of the timber assets of the Group. During the year, Mr Rickman has received remuneration of £96,000 (2017: £96,000) in the form of fees from the Company.

29. Events after the year end

There were no significant events after the year end which, in the opinion of the Directors, require disclosure in these financial statements.