Final Results

ASIAN CITRUS HOLDINGS LIMITED

亞洲果業控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: HKSE: 73; AIM: ACHL)

ANNOUNCEMENT OF THE ANNUAL RESULTS

FoR THE YEAR ENDED 30 JUNE 2011

The board of directors (the "Board") of Asian Citrus Holdings Limited (the "Company" or "Asian Citrus") is pleased to announce the consolidated results of the Company and its subsidiaries (collectively, the "Group") for the year ended 30 June 2011.

Results Highlights

* Conversion at £1 = RMB10.36 and RMB10.16 for the year ended 30 June 2011 and 2010 respectively for reference only

Business Overview

Ÿ Continued to expand our direct sales to 20 supermarket chains with total supply of approximately 68,480 tonnes of oranges (2009/10: 61,157 tonnes), up approximately 12.0%

Ÿ Sold approximately 620,000 self-bred saplings to local farmers offering the Group the first right to purchase their oranges

Ÿ Achieved the annual renewal of the "Organic Products" accreditation by the China Organic Food Certification Center in both Hepu Plantation and Xinfeng Plantation

Ÿ Completed the acquisition of 92.94% equity interest in Beihai Perfuming Juice Co., Ltd ("Beihai BPG") on 30 November 2010

Ÿ Expanding the production capacities of Beihai BPG by constructing a new production facility located in Baise city of the Guangxi Region with annual capacity of approximately 40,000 tonnes. The construction is expected to be substantially completed by the end of 2011 with trial production expected to commence before mid-2012.

Ÿ Continued the construction of the Hunan Plantation with 427,000 summer orange trees planted during the year

Ÿ Completed the share placement of 175,000,000 new ordinary shares in December 2010

Ÿ Recommended the final dividend of RMB0.10 and special dividend of RMB0.03 per share. Together with the interim dividend of RMB0.02 (2010: RMBNil) per share, will make a total of RMB0.15 (2010: RMB0.12) per share for the whole year ended 30 June 2011. This equates to approximately 35.6% of the adjusted earnings excluding fair value gain of biological assets.

Operational Highlights

Hepu Plantation

Ÿ Fully developed with approximately 1.3 million orange trees, of which 1.1 million are fruit-bearing trees

Ÿ Production slightly decreased as expected by approximately 2.5% to 123,711 tonnes (2009/10: 126,919 tonnes) due to the reduction in the number of productive winter orange trees under the replanting programme

Ÿ Replanting programme underway with 63,584 winter trees replaced during the year

Ÿ The first batch of 55,185 summer orange trees replanted in 2007 commenced its first crop yielding approximately 646 tonnes

Xinfeng Plantation

Ÿ Fully planted with 1.6 million winter orange trees, of which all are producing

Ÿ Production increased by approximately 55.3% to 93,181 tonnes (2009/10: 60,019 tonnes) 

Hunan Plantation

Ÿ First batch of 427,000 summer orange trees planted

Ÿ RMB286.7 million invested which mainly represents expenditure for land clearing, land cultivation, planting costs and other farmland infrastructure

Beihai BPG

Ÿ Sold a total of approximately 20,653 tonnes of juice concentrates, 3,616 tonnes of fruit purees and 9,634 tonnes of frozen and dried fruits and vegetables for the seven months ended 30 June 2011

Tony Tong, Chairman, commented:

"During the year, we made very good progress in increasing the volume of direct sales to supermarkets. The acquisition of Beihai BPG is an important step for the Group in moving downstream and provides the Group with better flexibility to meet the changing needs of the consumer market and to explore other opportunities in the agricultural sector. The acquisition of Beihai BPG brought the Group an accretive effect to the earnings per share from operations, thus creating better shareholders' value.

The Group aims to increase its production of high quality citrus fruits through organic growth in production from its existing plantations, the potential acquisition of high quality and sizeable citrus plantations in China and the ongoing saplings program with local farmers which will enable the Group to source high-quality oranges without major capital expenditure. Apart from fresh citrus products, the Group is considering the diversification of its agricultural business into the production of tropical fruits which will enhance the synergy with Beihai BPG, building on the Group's successful track record and expertise in the agricultural industry and extensive distribution network for fresh products.

The outlook for fruit juice consumption in China looks very positive and the acquisition of Beihai BPG provides us with the techniques, processing capacity and distribution network for effective expansion into the concentrated juice market in the PRC. The addition of new production capacity will strengthen the Group's leading position in the juice concentrates market in China."

- ends -

For further information please contact:

Chairman's Statement

I am very pleased to present the annual results of Asian Citrus Holdings Limited (the "Company" or "Asian Citrus") and its subsidiaries (collectively referred to as the "Group") for the year ended 30 June 2011. For the year ended 30 June 2011, the Group's revenue increased by approximately 73.9% from RMB812.5 million to RMB1,412.6 million while the net profit increased by approximately 89.6% from RMB585.5 million to RMB1,110.0 million.

Strategic Overview

During the year ended 30 June 2011, the Group continued to expand our direct sales of oranges to supermarket chains in China. The Group supplied a total of 68,480 tonnes of oranges directly to 20 supermarket chains in most of the major cities and coastal provinces in China. This represented an increase of approximately 12.0% from 61,157 tonnes sold directly to supermarket chains in the previous year. The volume and revenue of sales to supermarkets accounted for approximately 31.6% and 39.0% of the Group's production and revenue from sales of oranges, respectively. We will continue to expand our supermarket sales coverage with increased volume and a wider customer base in the coming year.

The Group continues to mass produce self-bred saplings at both the Hepu Plantation and Hunan Plantation. In addition to supplying these saplings to these plantations under the replanting and the new planting programmes, we sold approximately 620,000 saplings to local farmers during the year. The continuous development of our nursery function along with our sales of self-bred saplings provides the Group with a long-term stable supply of high-quality oranges as there are reciprocal agreements with the farmers which offer the Group the first right to purchase their oranges.

Strict quality control and food safety of our products are always a top priority. During the year, our Hepu and Xinfeng Plantations both successfully achieved their annual renewal of the "Organic Products" accreditation by the China Organic Food Certification Center which evidences the outstanding quality of our products.

The acquisition of our 92.94% equity interest in Beihai Perfuming Garden Juice Co., Ltd. ("Beihai BPG") was completed on 30 November 2010 and this represents a major milestone for the Group to expand into the concentrated juice market in China. In addition to the existing production facilities of approximately 60,000 tonnes annual production capacity located in Beihai city and Hepu county of Guangxi Zhuang Autonomous Region (the "Guangxi Region"), we are currently expanding the production capacities of Beihai BPG by establishing a new production facility in Baise city of the Guangxi Region with an annual output capacity of approximately 40,000 tonnes. We expect to substantially complete the construction of this new juicing plant by the end of 2011 and the trial production is expected to commence before mid-2012.

Operating Review

There are approximately 1.3 million orange trees in the Hepu Plantation of which approximately 1.1 million trees were producing oranges during the year ended 30 June 2011. Production output for the year was approximately 123,711 tonnes, representing a decrease of approximately 2.5% over the previous year's production of 126,919 tonnes. This slight decrease was due mainly to the reduction in the number of productive winter orange trees due to the replanting programme, partially offset by the increase in production from some of the winter orange trees as they become more mature and the first crop from the summer orange trees replanted in 2007.

The Group's replanting programme in the Hepu Plantation is ongoing and so far this year, 63,584 winter trees have been removed and replanted with the same number of the new species of summer orange trees. There are currently approximately 120,000 winter orange trees at the Hepu Plantation, all of which are due to be replaced over the next two years. We are very confident that the replanting programme will deliver long term economic benefits by increasing average yields and achievable revenue per tonne from the improved species of summer oranges trees. The first batch of 55,185 orange trees replanted in 2007 commenced its first crop in the summer of 2011, yielding approximately 646 tonnes of oranges. We expect the later batches of replanted trees to commence their production in the coming few years. As a result, the Hepu Plantation will soon be producing increasing tonnage of summer oranges benefiting from both the commencement of production from the replanting programme and increasing maturity of the replanted summer orange trees.

The Xinfeng Plantation is fully planted with 1.6 million winter orange trees all of which were producing, albeit at different stages of maturity. During the year they yielded approximately 93,181 tonnes of oranges, representing an increase of approximately 55.3% over the previous year's production of 60,019 tonnes. This growth was mainly due to the increased production from the first three batches of 1.2 million winter oranges trees, which are yet to achieve full maturity, together with trial production from the final batch of 400,000 trees.

During the year, the Group continued the construction of the Hunan Plantation with an investment of approximately RMB185.7 million. As at 30 June 2011, approximately RMB286.7 million has been invested in the Hunan Plantation. As of the date of this report, 427,000 summer orange trees have been planted in the Hunan Plantation and we expect the entire Hunan planting programme will be completed by 2013.

Following its acquisition in November 2010, Beihai BPG continues to deliver strong operational and financial results with optimal utilisation of its production facilities. During the seven months ended 30 June 2011, Beihai BPG sold a total of approximately 20,653 tonnes of juice concentrates, 3,616 tonnes of fruit purees and 9,634 tonnes of frozen and dried fruits and vegetables.

Share Placement

In December 2010, 175,000,000 new ordinary shares were placed at HK$8.88 each, raising net proceeds of approximately HK$1,510 million. The proceeds have been used for paying the cash consideration of HK$780 million in relation to the acquisition of Beihai BPG, and will be used for financing the expansion of the production capacity of Beihai BPG; and financing the corresponding additional working capital requirement resulting from the expansion of its production capacity.

Dividends

The Board recommends the payment of a final dividend of RMB0.10 and a special dividend of RMB0.03 per share for the financial year ended 30 June 2011. Together with the interim dividend of RMB0.02 per share, this equates to approximately 35.6% of the adjusted earnings excluding fair value gain of biological assets for the year ended 30 June 2011 which the Board views as an appropriate payout to provide shareholders with an attractive yield while leaving the Group with sufficient capital for further developments. The Company has decided to institute a Scrip Dividend Scheme whereby shareholders will be offered the opportunity to elect to receive the final and special dividend for the year ended 30 June 2011 in the form of shares. A document providing further details of this Scrip Dividend Scheme will be sent to shareholders in due course.

The final and special dividend, if approved at the Annual General Meeting on 8 November 2011 will be paid in sterling or HK Dollars on or before 30 December 2011, to shareholders on the register on 11 November 2011, with an ex-dividend date of 10 November 2011 and 9 November 2011 on The Stock Exchange of Hong Kong Limited and London Stock Exchange PLC, respectively. The actual translation rate for the purpose of dividend payment in sterling or HK Dollars will be determined by reference to the exchange rate on 15 November 2011.

Corporate governance

Following the Company's listing on AIM of the London Stock Exchange in 2005, we have consistently provided a return for our shareholders by way of dividends and the dividend payout ratio has always been 25% or more of the adjusted earnings excluding fair value gain of biological assets for the respective financial year.

In addition to the consistent dividend policy, the Group is committed to protect our shareholders' interest by way of securing proper titles over our major assets. We have properly secured the land use rights for all our plantations by way of leasing contracts in accordance with the PRC Rural Land Contracting Law. The Group is also duly registered as the owners of the orange trees at the Hepu Plantation and Xinfeng Plantation in accordance with the PRC Property Law and the PRC Forestry Law. The Group will register its ownership over the orange trees at the Hunan Plantation once the construction work at the Hunan Plantation is completed.

Outlook

During the year, we made very good progress in increasing the volume of direct sales to supermarkets. The acquisition of Beihai BPG is an important step for the Group in moving downstream and provides the Group with better flexibility to meet the changing needs of the consumer market and to explore other opportunities in the agricultural sector. The acquisition of Beihai BPG brought the Group an accretive effect to the earnings per share from operations, thus creating better shareholders' value.

The Group aims to increase its production of high quality citrus fruits through organic growth in production from its existing plantations, the potential acquisition of high quality and sizeable citrus plantations in China and the ongoing saplings program with local farmers which will enable the Group to source high-quality oranges without major capital expenditure. Apart from fresh citrus products, the Group is considering the diversification of its agricultural business into the production of tropical fruits which will enhance the synergy with Beihai BPG, building on the Group's successful track record and expertise in the agricultural industry and extensive distribution network for fresh products.

The outlook for fruit juice consumption in China looks very positive and the acquisition of Beihai BPG provides us with the techniques, processing capacity and distribution network for effective expansion into the concentrated juice market in the PRC. The addition of new production capacity will strengthen the Group's leading position in the juice concentrates market in China.

On behalf of the Board, I would like to express my deepest gratitude to the management and our employees for their dedication and contributions to the growth of Asian Citrus. In addition, I would also like to take this opportunity to thank all our shareholders, business partners and investors for their continuous support and care. We are very excited about our growth in both the agricultural and processing businesses and we are confident that Asian Citrus will continue to deliver value to its shareholders in the context of continuing economic growth in China and the increasing health consciousness of its people.

Tony Tong

Chairman

16 September 2011

Management Discussion and Analysis

OPERATING PERFORMANCE

Revenue

The breakdown of revenue by types is as follows:

The Group's revenue increased by approximately 73.9% from RMB812.5 million to RMB1,412.6 million for the year ended 30 June 2011.

Sale of oranges

Revenue from sale of oranges grew by approximately 23.7% to RMB962.1 million for the year ended 30 June 2011. This was achieved by an increase of approximately 16.0% in the Group's production to 216,892 tonnes combined with an increase in the average selling price of oranges in different plantations of approximately 10.0% year on year.

The production yield from Hepu Plantation decreased by approximately 2.5% to 123,711 tonnes for the year ended 30 June 2011 due to the ongoing replanting programme. In the previous year, 64,194 winter orange trees were removed and replanted with the same number of the summer orange trees. As the orange trees continued to mature and more trees reached orange-bearing age, the production yield from the Xinfeng Plantation increased significantly by 55.3% to 93,181 tonnes for the year ended 30 June 2011 from 60,019 tonnes in the comparable year.

The following table sets out the average selling prices of oranges in different plantations:

All of the Group's oranges were sold domestically. The Group's customers for the sale of oranges can be divided into three categories, namely corporate customers, wholesale customers, and supermarket chains. The breakdown of the types of customers is as follows:

For the year ended 30 June 2011, the production volume and revenue to supermarket chains represented approximately 31.6% and 39.0%, respectively, of the Group, compared to approximately 32.7% and 40.8%, respectively, for the year ended 30 June 2010. For the Hepu Plantation, the production volume and revenue to supermarket chains increased to approximately 37.3% and 47.0%, respectively, (2010: 35.7% and 45.6%). As the Xinfeng Plantation was still at the early stage, the oranges were mainly sold to corporate and wholesale customers, thereby reducing the percentage of sales to supermarket chains.

For the Hepu Plantation and Xinfeng Plantation, the production volume sold to supermarkets was 46,156 tonnes and 22,324 tonnes for the year ended 30 June 2011, increased from 45,298 tonnes and 15,859 tonnes for the year ended 30 June 2010, respectively.

Sale of processed fruits

After the completion of acquisition of 92.94% equity interest of Beihai BPG on 30 November 2010, the results of Beihai BPG have been consolidated into the Group.

For the seven months ended 30 June 2011, the revenue from the sale of processed fruits such as fruit juice concentrates, fruit purees, frozen fruits and vegetables and dried fruits and beverages was approximately RMB417.4 million.

The following table sets out the volume and revenue from the sale of processed fruits:

Beihai BPG processes over 22 different types of tropical fruits, including pineapples, passion fruit, lychees, mangoes and papayas. Only single product accounting for over 10% of the revenue from the sale of processed fruits is shown separately in the table above.

The ultisation rate of two existing processing plants in Beihai and Hepu is approximately 92.7% (2010: 89.9%) and 90.4% (2010: 84.5%) for the year ended 30 June 2011, respectively.

Beihai BPG currently generates most of its sales from the PRC market, with key customers being beverage mixers supplying major beverage groups.

Whilst tropical fruits juice concentrates and purees continue to be its major product, Beihai BPG started to increase the production of orange juice concentrate in December 2010 with revenue and sales volume of RMB4.2 million and 241 tonnes, respectively, for the seven months ended 30 June 2011.

Sale of self-bred saplings

For the year ended 30 June 2011, approximately RMB6.9 million was recognised from the sale of approximately 620,000 self-bred saplings to local farmers.

Sale of properties

In addition, the transfer of ownership and titles of 49 wholesale units of Phase I of the Xinfeng Development was completed during the year ended 30 June 2011. The Group recognised revenue and corresponding costs (excluding business tax and other relevant taxes and charges that may be levied) of approximately RMB26.2 million and RMB13.7 million, respectively.

Cost of sales

The breakdown of cost of sales of the Group is as follows:

Cost of sale of oranges principally consists of the costs of raw materials such as fertilisers, packaging materials, pesticides and other direct costs such as direct labour, depreciation and production overheads. The production cost of oranges increased by approximately 18.7% from RMB321.5 million to RMB381.7 million. The increase in production costs was mainly due to an increase in raw materials utilised for higher production volume and the trial production of the final batch of 400,000 orange trees in Xinfeng Plantation and the first batch of 55,185 orange trees replanted in Hepu Plantation in 2007.

The unit cost of production in the Hepu Plantation maintained at approximately RMB1.49 per kg for the year ended 30 June 2011 (2010: RMB1.49 per kg).

The unit cost of production in the Xinfeng Plantation decreased by 4.5% to approximately RMB2.12 per kg for the year ended 30 June 2011 (2010: RMB2.22 per kg) as a result of the better economies of scale achieved from the increased maturity of the orange trees.

The combined unit cost of production increased by approximately 2.3% to RMB1.76 per kg from 1.72 per kg in the last year.

Cost of sales of processed fruits mainly includes the cost of fruits and packaging materials and other direct costs such as direct labour, depreciation and production overheads. For the seven months ended 30 June 2011, the cost of sales of processed fruits was approximately RMB275.3 million.

The fruit cost is the most significant part of our cost of processed fruit. For the seven months ended 30 June 2011, the fruit cost accounted for approximately 74.8% of the cost of processed fruit. The packaging material, direct labor and other production overhead accounted for approximately 6.6%, 5.5% and 13.1%, respectively of the cost of processed fruit, for the seven months ended 30 June 2011.

Gross profit

The Group's overall gross profit increased by approximately 57.7% to approximately RMB738.6 million for the year ended 30 June 2011 (2010: RMB468.4 million). The improvement in gross profit was the result of an increase in the production output of orange of approximately 16.0%, an increase in the average selling price of oranges in different plantations year on year and the inclusion of the seven months' gross profit of Beihai BPG of RMB142.1 million.

The following table sets out a breakdown of the Group's gross profit margin by plantation:

The following table sets out a breakdown of the Group's gross profit margin by business:

The gross profit margin of the Hepu Plantation increased to approximately 70.9% (2010: 67.7%) as a result of the higher average selling price achieved but partially offset by the decrease of the production volume of winter oranges as a result of the ongoing replanting programme.

The Xinfeng Plantation, benefiting from trees continuing to mature and an increase in the number of trees reaching orange bearing age, saw the gross profit margin rising to approximately 40.2% for the year ended 30 June 2011 (2010: 31.3%). As a result of the continuous growth in production volume and better economies of scale, we expect the gross profit margin of the Xinfeng Plantation will continue to grow over the medium term.

Combined the above, the overall gross profit margin from sale of oranges slightly increased to approximately 60.3% (2010: 58.7%) for the year ended 30 June 2011.

Beihai BPG processes over 22 different types of fruit with different profit margin. The normalised profit margin of Beihai BPG for the seven months ended 30 June 2011 was 34.0%.

Gain on change in fair value of biological assets

The Group recorded a gain of approximately RMB598.0 million from changes in fair value of biological assets for the year ended 30 June 2011, compared to a gain of RMB306.0 million for the last year. The increase was mainly due to the higher average selling price of the oranges achieved by the Group and the transfer of 455,185 infant trees to orange trees and the increased maturity of orange trees in Xinfeng Plantation during the year.

Selling and distribution expenses

Selling and distribution expenses mainly comprise sales commissions, advertising, salaries and welfare of sales personnel, traveling and transportation expenses. The selling and distribution expenses of the Group increased from approximately RMB45.5 million for the year ended 30 June 2010 to approximately RMB63.3 million for the year ended 30 June 2011, representing an increase of approximately 39.1%, mainly resulting from the increased sale activities in Xinfeng Plantation and Beihai BPG.

Selling and distribution expenses represented 4.5% of the Group's revenue, a decrease of 1.1 percentage points as compared to 5.6% year-on-year, demonstrating that the Group was able to control cost effectively amid rapid business expansion.

General and administrative expenses

General and administrative expenses comprise mainly salary, office administration expenses, depreciation, amortisation, raw material utilised for infant trees and research costs. The general and administrative expenses of the Group were approximately RMB161.6 million for the year ended 30 June 2011 (2010: RMB143.3 million), representing an increase of approximately 12.8%. The increase was mainly due to an increase in share based payment of approximately RMB37.3 million in relation to the employee share option scheme, more raw materials amounting to approximately RMB21.8 million utilised for the infant trees replanted in Hepu Plantation and the first batch of 427,400 infant trees planted in Hunan Plantation during the year and inclusion of the general and administrative expenses amounting to approximately RMB11.1 million of Beihai BPG.

The increase was partially offset by less raw materials amounted to approximately RMB45.9 million being utilised for the infant trees in Xinfeng Plantation as all trees became fruit bearing during the year and there was no one-off listing expenses of approximately RMB16.3 million this year.

General and administrative expenses represented 11.4% of the Group's revenue, a decrease of 6.2 percentage points as compared to 17.6% year-on-year, demonstrating the Group's ability to achieve economies of scale after acquisition of Beihai BPG.

Profit

The profit attributable to shareholders for the year ended 30 June 2011 increased to approximately RMB1,110.0 million, compared to approximately RMB585.5 million for 2010, representing an increase of approximately 89.6%.

The profit attributable to shareholders excluding the biological gain for the year ended 30 June 2011 was approximately RMB512.0 million, compared to approximately RMB279.5 million for 2010, representing an increase of approximately 83.2%.

The increase was mainly attributable to an increase in production volume of oranges, the increase in average selling price of oranges in different plantations year on year, the results of Beihai BPG having been consolidated into the Group after the completion of acquisition of 92.94% equity interest of Beihai BPG by the Group on 30 November 2010 and the net gain on change in fair value of the biological assets.

Final and Special Dividend

The Directors are pleased to recommend that a final dividend of RMB0.10 and a special final of RMB0.03 (2010: RMB0.10, special dividend of RMB0.02) per share. The final and special dividend, together with the interim dividend of RMB0.02 (2010: RMB Nil) per share, will make a total of RMB0.15 (2010: RMB0.12) per share for the whole year ended 30 June 2011. This equates to approximately 35.6% of the adjusted earnings excluding fair value gain of biological assets for the year.

Productivity

The increasing maturity of the oranges trees together with effective managerial planning and production supervision, have led to productivity gains.

The production volume of winter oranges increased to 143,698 tonnes for the year ended 30 June 2011, representing an increase of approximately 25.5%. The production volume of winter oranges in Hepu Plantation decreased by approximately 7.3% from 54,511 tonnes for the year ended 30 June 2010 to 50,517 tonnes for the year ended 30 June 2011 due to the replanting programme. With the increased maturity and more trees becoming fruit bearing during the year, the production volume of winter oranges from Xinfeng Plantation increased significantly by approximately 55.3% to 93,181 tonnes for the year ended 30 June 2011 from 60,019 tonnes in the last year.

The production volume of summer oranges increased slightly to 73,194 tonnes for the year ended 30 June 2011 (2010: 72,408 tonnes).

Capital Structure

As at 30 June 2011, there were 1,215,156,963 shares in issue. Based on the closing price of HK$7.07 as at 30 June 2011, the market capitalisation of the Company was approximately HK$8,591.2 million (GBP688.7 million).

Human Resources

There were a total of 1,730 employees of the Group as at 30 June 2011. The Group aims to attract, retain and motivate high calibre individuals with a competitive remuneration package. Remuneration packages are performance-linked and business performance, market practices and competitive market conditions are all taken into consideration. The Group reviews the employees' remuneration packages on an annual basis. The Group also places heavy emphasis on staff training and development so that employees can reach their maximum potential.

Financial Performance

Liquidity

The current ratio and quick ratio was approximately 41.05 and 37.83, respectively. The liquidity of the Group remained healthy with sufficient reserves for both current operation and future development.

Profitability

The asset turnover of the Group dropped to approximately 0.18 (2010: 0.21) for the year ended 30 June 2011 as we only consolidated seven months' result of Beihai BPG during the year.

Basic earnings per share for the year ended 30 June 2011 was approximately RMB1.06 (2010: RMB0.74).

Basic earnings excluding biological gain per share for the year ended 30 June 2011 increased to approximately RMB0.49 (2010: RMB0.35).

Debt ratio

The net cash positions of the Group were approximately RMB2,232.2 million and RMB975.1 million at 30 June 2011 and 2010, respectively.

Internal cash resource

The Group's major internal cash resource is its cash and cash equivalents. The Group did not have any outstanding bank borrowings as at 30 June 2011.

Charge on assets and contingent liabilities

None of the Group's assets were pledged and the Group did not have any material contingent liabilities as at 30 June 2011.

Capital Commitments

As at 30 June 2011, the Group had capital commitments of approximately RMB149.0 million mainly in relation to the construction of the farmland infrastructure in the Hunan Plantation and the new juicing plant in Baise city.

Foreign exchange risk

The Group is exposed to currency risk primarily through its cash and cash equivalents that are denominated in a currency other than the functional currency of the operation to which they related. The currencies giving rise to this risk are primarily Hong Kong dollars, United States dollars and British pounds.

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuation arise. The Group currently does not use any derivative contracts to hedge against its exposure to currency risk. Management manages its currency risk by closely monitoring the movement of the foreign currency rate and considers hedging significant foreign currency exposure should the need arise.

Plantations

The Group has three orange plantations in the PRC occupying in total approximately 155,000 mu (equivalent to approximately 103.3 sq.km.) of land, with approximately 46,000 mu (equivalent to approximately 30.7 sq.km.) Hepu Plantation located in the Hepu county of the Guangxi Zhuang Autonomous Region, approximately 56,000 mu (equivalent to approximately 37.3 sq.km.) Xinfeng Plantation in the Xinfeng county of the Jiangxi province  and approximately 53,000 mu (equivalent to approximately 35.3 sq.km)  in the Dao county of the Hunan province.

Hepu Plantation

The Hepu Plantation is fully planted and comprises approximately 1.3 million orange trees and in which, approximately 1.1 million trees were producing oranges during the year ended 30 June 2011. During the year, 63,584 winter orange trees were removed and the same number of summer orange trees were replanted due to the ongoing replanting programme.

Xinfeng Plantation

The Xinfeng Plantation is fully planted and comprises 1.6 million winter orange trees and all of which are now producing oranges during the year ended 30 June 2011.

Hunan Plantation

The Hunan Plantation is still under development and 427,400 summer orange trees were planted during the year ended 30 June 2011.

The below table sets out the age profile as at 30 June 2011 and the production volume of the plantations for the year ended 30 June 2011:

Summer Orange Trees

Winter orange trees

The below table sets out the age profile as at 30 June 2010 and the production volume of the plantations for the year ended 30 June 2010:

Summer Orange Trees

Winter orange trees

Valuation Of Bological Assets

The Group has engaged Vigers Appraisal & Consulting Limited ("Vigers"), an independent valuer, to determine the fair value of the orange trees less estimated point-of-sale costs as at 30 June 2011.

The valuations of the Group's orange trees were conducted on the basis of discounted cash flow. The discount rate being applied to the discounted cash flow model is based on Capital Asset Pricing Model. Vigers begins with the appraised value of the Group's orange trees by discounting the future income streams attributable to the Group's orange trees to arrive at a present value and deducts the tangible assets (including plantation related machinery and equipment and land improvements) from the appraised value which are employed in the operation of the Group's plantations.

Vigers conducted inspections of the plantations and performed sample counts on the oranges trees in connection with their valuation exercise of the Group's orange trees.

Major Assumptions

The discounted cash flow method adopted a number of key assumptions, which include the discount rate, market prices of oranges, production yield per tree, related production costs, etc. The values of such variables are determined by Vigers using information supplied by the Group, as well as proprietary and third-party data, as follows:

1) The discount rate applied for the year ended 30 June 2011 was 20.0% (2010: 19.8%). The discount rate reflected the expected market return on the asset and can be affected by the interest rate, market sentiments and risk of the asset versus the general market risk.

2) The yield per tree variables represent the harvest level of the orange trees. The yield of orange trees is affected by the age, species and health of the orange trees, the climate, location, soil conditions, topography and infrastructure. In general, yield per tree increases from age 3 to 10, remains stable for about 22 years, and then decreases until age 35. Vigers' agricultural consultant estimates that the yield per tree based on field inspection of general growth conditions of orange trees and average yield data of typical orange plantations in the PRC.

3) The market prices variables represent the assumed market price for the Summer Oranges and Winter Oranges produced by the Group. Vigers adopted the market sales prices prevailing as of the relevant balance sheet date for each type of orange produced by the Group as the sales price estimate. Such estimation was based on real terms without considering inflationary effect and planned future business activity that may impact the future prices of oranges harvested from the Group's plantations. The selling prices of winter oranges and summer oranges from the Hepu Plantation and winter oranges from the Xinfeng Plantation adopted were RMB3,230 per tonne, RMB5,300 per tonne and RMB3,660 per tonne, respectively, for the year ended 30 June 2011 and RMB2,990 per tonne, RMB4,830 per tonne and RMB3,330 per tonne, respectively, for the year ended 30 June 2010.

4) The direct production cost variables represent the direct costs necessary to bring the oranges to their sales form, which mainly include raw material costs and direct labour costs. The direct production cost variables are determined by reference to actual costs incurred for areas that have been previously harvested and cost information for comparable areas with regards to areas that have not been harvested previously. Vigers applied direct production costs of 34% (2010: 32% to 37%) and 34% to 55% (2010: 32% to 77%) of sale of oranges for the Hepu Plantation and the Xinfeng Plantation, respectively, during the year ended 30 June 2011.

Sensitive Analysis

1) Changes in the discount rate applied result in significant fluctuations in the Group's gain from changes in fair value of orange trees less estimated point-of-sale costs. The following table illustrates the sensitivity of the Group's gain from changes in fair value of orange tree less estimated point-of-sale costs to increases or decreases by 100 basis points in the discount rate of 20.0% applied by Vigers for the year ended 30 June 2011:

2) Changes in the yield per orange tree can also result in significant fluctuations in gain from changes in fair value of orange trees less estimated point-of-sale costs. The following table illustrates that sensitivity of the Group's gain from changes in fair value of orange trees less estimated point-of-sale costs to 5.0% increase or decrease in the yield per tree applied for the year ended 30 June 2011:

3) Changes in assumed market prices of the oranges can also result in significant fluctuations in gain from changes in fair value of orange trees less estimated point-of-sale costs. The following table illustrates the sensitivity of the Group's gain from changes in fair value of orange trees less estimated point-of-sale costs to 5.0% increase or decrease in the assumed market prices of oranges as at 30 June 2011 used to calculate gain from changes in fair value of orange trees less estimated point-of-sale costs for the year ended 30 June 2011:

4) Changes in the assumed direct production costs can also result in significant fluctuations in gain from changes in fair value of orange trees less estimated point-of-sale costs. The following table illustrates the sensitivity of the Group's gain from changes in fair value of orange trees less estimated point-of-sale costs to 5.0% increases or decreases in the Group's assumed direct production costs used to calculate gain from changes in fair value of orange trees less estimated point-of-sale costs for the year ended 30 June 2011:

The above sensitivity analyses are intended for illustrative purposes only, and any variation could exceed the amounts shown above.

Valuation

According to the valuation report of Vigers, the aggregate value of the orange trees in the Hepu Plantation and Xinfeng Plantation as at 30 June 2011 was estimated to be approximately RMB2,045 million (2010: RMB1,443 million).

Consolidated Income Statement

For the year ended 30 June 2011

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2011