Global Corn Group Limited - Proxy Solicitation & Information Statement 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Global Sweeteners Holdings Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities mentioned herein.

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

MAJOR AND CONNECTED TRANSACTION TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION

REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on page 7 of this circular. A letter from the Independent Board Committee containing its advice and recommendation to the Independent Shareholders is set out on page 23 of this circular. A letter from Partners Capital, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on page 25 of this circular.

A notice convening the EGM to be held at Conference room, 3/F, Nexxus Building, 77 Des Voeux Road Central, Hong Kong at 10:30 a.m. on 17 October 2011 is set out on page 154 of this circular. Whether or not you intend to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

for identification purposes only

26 September 2011

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
S&P Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Effect on Shareholding Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Reasons for and benefits of the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Revision of annual caps for provision of utilities services
under the Utilities Master Supply Agreement . . . . . . . . . . . . . . . . . . . . . . . .	17
Information on the Target Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Background information of the Vendors, the GBT Group and the Group . . . .	21
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . .	23
Letter from Partners Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Appendix I — Financial information of the Group. . . . . . . . . . . . . . . . . . . . .	50
Appendix II — Accountant’s Report of Changchun Jincheng. . . . . . . . . . . . . .	52
Appendix III — Unaudited Pro Forma Financial Information
of the Enlarged Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	94
Appendix IV — Management Discussion and Analysis
of Changchun Jincheng. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	102
Appendix V — Valuation Report of Changchun Jincheng. . . . . . . . . . . . . . . .	113
Appendix VI — General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	143
Notice of EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	154

— i —

DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the context otherwise requires:

“associate(s)” shall have the same meaning as ascribed to it under the Listing Rules
“Board” the board of Directors
“Business Day” any day (other than Saturdays) on which licensed banks in Hong Kong are open for business
“BVI” British Virgin Islands “Changchun Dacheng” 長春大成實業集團有限公司 (Changchun Dacheng Industrial Group Co., Ltd.), a wholly foreign owned enterprise established in the PRC and a wholly owned subsidiary of GBT
“Changchun Dihao” 長春帝豪食品發展有限公司 (Changchun Dihao Foodstuff Development Co., Ltd.), a wholly foreign owned enterprise established in the PRC and a wholly owned subsidiary of the Company
“Changchun Group” the Company and its subsidiaries which have or will have their production facilities established in Changchun, the PRC and which require the supply and provision of the utilities and wastewater treatment services from Dacheng Corn
“Changchun Jincheng” 長春金成玉米開發有限公司 (Changchun Jincheng Corn Development Co., Ltd.), a sino-foreign joint venture enterprise established in the PRC and a wholly owned subsidiary of GBT
“Co-products” steepwater liquid, corn oil, germ cake, corn fibre feed, corn gluten meal, corn gluten feed pellets and/or such other types of products other than corn starch as being the types of coproducts that are to be sold by Changchun Jincheng under the Jincheng Sales Agency Agreement and the Yuancheng Sales Agency Agreement

— 1 —

DEFINITIONS

“Company”	Global Sweeteners Holdings Limited, a company established
	in the Cayman Islands with limited liabilities, the Shares of
	which are listed on the Main Board of the Stock Exchange
“Completion”	completion of the S&P Agreement in accordance with its
	terms
“Completion Date”	the date on which Completion occurs
“connected person(s)”	shall have the meaning as ascribed to it under the Listing
	Rules
“Consideration”	the aggregate consideration for the Transaction
“Consideration Share(s)”	an aggregate of 377,778,000 new Shares to be allotted and
	issued by the Company to the Vendor at the Issue Price per
	Share at Completion credited as fully paid pursuant to the
	S&P Agreement
“Corn Starch Master	the agreement dated 16 April 2009 entered into between the
Purchase Agreement”	GBT Group as supplier and the Group as purchaser relating
	to the purchase of corn starch by the Group from the GBT
	Group for the term commencing from 1 January 2010 to 31
	December 2012 (both days inclusive)
“Dacheng Corn”	長春大成玉米開發有限公司(Changchun Dacheng Corn
	Development Co., Ltd.), a sino-foreign joint venture
	enterprise established in the PRC and a wholly owned
	subsidiary of GBT
“Directors”	the directors of the Company
“EGM”	the extraordinary general meeting of the Company to
	be convened and held at Conference room, 3/F, Nexxus
	Building, 77 Des Voeux Road Central, Hong Kong on 17
	October 2011 at 10:30 a.m., the notice of which is set out
	on pages 154 to 155 of this circular, and any adjournment
	thereof
“Enlarged Group”	the Group as enlarged by the Transaction

— 2 —

DEFINITIONS

“GBT”	Global Bio-chem Technology Group Company Limited, a
	company incorporated in the Cayman Islands and the issued
	shares of which are listed on the Stock Exchange
“GBT Group”	GBT and its subsidiaries which, for the purpose of this
	circular, excludes the Group
“Global Corn”	Global Corn Investments Limited, a company incorporated
	in the BVI and a wholly owned subsidiary of GBT
“Global Corn Bio-chem”	Global Corn Bio-chem Technology Company Limited, a
	company incorporated in the BVI and a wholly owned
	subsidiary of GBT
“Group”	the Company and its subsidiaries
“HK Subsidiary”	Global Starch (Changchun) Investments Limited, a company
	incorporated in Hong Kong and a wholly-owned subsidiary
	of the Target Company
“HK$”	Hong Kong dollars, the lawful currency in Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Board	the independent board committee of the Board comprising
Committee”	Messrs. Chan Yuk Tong, Gao Yunchun and Ho Lic Ki,
	being all the independent non-executive Directors, appointed
	by the Board for the purpose of advising the Independent
	Shareholders in relation to the Transaction and the Revised
	Caps
“Independent Shareholders”	any Shareholder that is not required to abstain from voting
	at a general meeting, if necessary, to approve a connected
	transaction
“Issue Price”	the issue price of HK$1.35 for each Consideration Share

— 3 —

DEFINITIONS

“Jincheng Sales Agency	the sales agency agreement in relation to the distribution
Agreement”	of the Co-products to be entered into between Changchun
	Jincheng and Global Corn at Completion
“Jinzhou Yuancheng”	錦州元成生化科技有限公司(Jinzhou Yuancheng Bio-chem
	Technology Co., Ltd.), a wholly foreign owned enterprise
	established in the PRC and a wholly owned subsidiary of the
	Company
“Latest Practicable Date”	23 September 2011, being the latest practicable date for the
	purpose of ascertaining certain information contained in this
	circular prior to its publication
“Listing Committee”	shall have the same meaning as is in the Listing Rules
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“Long Stop Date”	2 March 2012, which is the date falling six calendar months
	after the date of the S&P Agreement, or such later date as
	the Vendor and the Company may agree
“mtpa”	metric tonnes per annum
“Partners Capital”	Partners Capital International Limited, the independent
	financial adviser appointed by the Board and approved
	by the Independent Board Committee for the purpose
	of advising the Independent Board Committee and the
	Independent Shareholders in relation to the Transaction and
	the Revised Caps
“PRC”	People’s Republic of China
“Reorganisation”	the proposed reorganisation of Changchun Jinchang as
	described in the paragraph headed “Reorganisation” under
	the section headed “Information on the Target Group” in this
	circular

— 4 —

DEFINITIONS

“Revised Caps”	the proposed revised annual caps in respect of the continuing
	connected transactions under the Utilities Master Supply
	Agreement of HK$268 million and HK$324 million for each
	of the two years ending 31 December 2012, respectively
“RMB”	Renminbi, the lawful currency in the PRC
“S&P Agreement”	the agreement in relation to the Transaction dated 2
	September 2011 entered into between the Vendor and the
	Company
“Sale Share”	such number of share(s) of US$1.00 each as shall represent
	the entire issued share capital in the Target Company
	immediately before Completion
“Sale Share Consideration”	the consideration for the purchase of the Sale Share, being
	the sum of approximately HK$510 million
“SFO”	the Securities and Futures Ordinance, Chapter 571 of the
	Laws of Hong Kong
“Share(s)”	ordinary share(s) of HK$0.1 each in the share capital of the
	Company
“Shareholder(s)”	shareholder(s) of the Company
“Shareholder Loans”	such amount as equals to 100% of the face value of all debts
	and liabilities owing by any member of the Target Group to
	the Vendor (whether arising primarily from advances made
	by or on behalf of the Vendor to any member of the Target
	Group or derived from any payment by the Vendor on behalf
	of such member of the Target Group) on Completion, if any
“sq.m.”	square metre(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Company”	Global Starch (BVI) Investments Limited, a company
	incorporated in the BVI with limited liability and wholly-
	owned by the Vendor

— 5 —

DEFINITIONS

“Target Group”	the Target Company, HK Subsidiary and Changchun
	Jinchang, and other subsidiary of the Target Company (if
	any) as of the Completion Date
“Transaction”	the acquisition by the Company and the disposal by the
	Vendor of the entire issued share capital in, and Shareholder
	Loans of, the Target Company pursuant to the S&P
	Agreement
“Trust Deed”	the trust deed dated 16 May 2011 executed by GBT, the
	subsidiary guarantors named therein and The Hongkong and
	Shanghai Banking Corporation Limited (as amended and
	supplemented by the supplemental trust deed to be executed
	by, among others, the Target Company and HK Subsidiary)
“US$”	United States dollars, the lawful currency of the United
	States of America
“Utilities Master Supply	the agreement dated 16 April 2009 entered into between
Agreement”	Dacheng Corn as supplier and Changchun Dihao (for itself
	and as trustee for the benefit of other members of the
	Changchun Group) as customer relating to the supply of
	electricity, water and steam and the provision of wastewater
	treatment services for the term commencing from 1 January
	2010 to 31 December 2012 (both days inclusive)
“Vendor”	Global Corn Investments (HK) Limited, a company
	incorporated in Hong Kong and a wholly owned subsidiary
	of GBT
“Yuancheng Sales Agency	the sales agency agreement dated 10 December 2010 and
Agreement”	entered into between Jinzhou Yuancheng and Global Corn
	in relation to the distribution of the Co-products and corn
	starch for the term commencing from 1 January 2011 to 31
	December 2013 (both days inclusive)

In this circular, RMB has been converted to HK$ at the rate of RMB1 = HK$1.20 for illustration purpose only. No representation is made that any amounts in RMB or HK$ have been, could have been or could be converted at the above rate or at any other rates or at all.

— 6 —

LETTER FROM THE BOARD

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

Executive Directors:

Mr. Kong Zhanpeng Mr. Zhang Fazheng Mr. Xu Zhouwen Mr. Lee Chi Yung

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent non-executive Directors:

Mr. Chan Yuk Tong Mr. Gao Yunchun Mr. Ho Lic Ki

Headquarters and principal place of business in Hong Kong: Unit 2403 Admiralty Centre Tower II 18 Harcourt Road Hong Kong

26 September 2011

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the EGM to approve the S&P Agreement and the Revised Caps.

for identification purposes only

— 7 —

LETTER FROM THE BOARD

S&P AGREEMENT

Date

2 September 2011

Parties

Vendor: Global Corn

Purchaser: the Company

Assets involved

Pursuant to the S&P Agreement, the Company has conditionally agreed to purchase the entire issued share capital in, and Shareholder Loans of, the Target Company.

Under the S&P Agreement, in the event of any debts or liabilities become owing by any member of the Target Group to any third parties (other than the Vendor) as at the Completion Date, the Vendor shall settle such amounts owing by the Target Group in full by payment by the Vendor on behalf of the Target Group to all such third party creditors prior to the Completion Date, and any amount of such payment shall form part of the Shareholder Loans and shall be assigned to the Company upon Completion. The above debts and liabilities shall include such debts and liabilities incurred by Changchun Jincheng after 30 June 2011 and up to the Completion Date but shall not include (i) the debts and liabilities of Changchun Jincheng as disclosed in its audited accounts as at 30 June 2011; (ii) the trade payables incurred by the Target Group in its ordinary and usual course of business including the amount due to members of the GBT Group and GSH Group; and (iii) a special dividend to be declared by Changchun Jincheng after the date of the S&P Agreement and before Completion for an amount not exceeding the retained profit of Changchun Jincheng as at 31 August 2011 which, if declared, paid or made before completion of the Reorganisation, the Vendor shall pay and procure the then shareholder(s) of Changchun Jincheng to pay such special dividend so received thereby to HK Subsidiary within seven Business Days after such receipt. The retained profits of Changchun Jincheng as at 31 August 2011 amounted to approximately RMB204.7 million and Changchun Jincheng has sufficient cash resources to settle the special dividend mentioned above. As the amount of the abovementioned special dividend to be received by the then shareholders of Changchun Jincheng will all be paid by the then shareholders of Changchun Jincheng to the HK Subsidiary within seven Business Days after such receipt, the arrangement in (iii) above will not materially affect the net asset value of the Target Group. For reference

— 8 —

LETTER FROM THE BOARD

purpose only, assuming that the Completion would have taken place on 30 June 2011, the Shareholder Loans as at 30 June 2011 would amount to approximately RMB26.6 million (equivalent to approximately HK$31.9 million).

Conditions

Completion is conditional upon fulfillment of the following conditions:

(1) the Company being satisfied with the results of its due diligence review of the Target Group;
(2) the approval by the Independent Shareholders being obtained in respect of:
(a) the S&P Agreement and the transactions contemplated thereby (including without limitation the issue of the Consideration Shares);
(b) the revision of the annual caps in respect of the Utilities Master Supply Agreement for each of the two years ending 31 December 2012 as disclosed in the announcement of the Company dated 20 April 2009 to such monetary amounts as satisfactory to the Company;
(c) where necessary, the Jincheng Sale Agency Agreement and the transaction contemplated thereunder, and the annual caps in respect thereof for each of the three years ending 31 December 2013 in such amount as satisfactory to the Company;
(3) the approval by the bondholders of GBT being obtained for the release of guarantee to be given by the Target Company and HK Subsidiary under the Trust Deed;
(4) the Company receiving a copy of a PRC legal opinion in respect of Changchun Jincheng, in form and substance reasonably satisfactory to the Company;
(5) the Reorganisation being completed;
(6) the Listing Committee having granted listing of and permission to deal in the Consideration Shares;
(7) all approvals, consents and acts (whether required under laws, codes, regulations, the Listing Rules or otherwise) for the purpose of or in connection with the Completion being obtained and completed or, as the case may be, the relevant waiver from compliance with any of such provisions being obtained from the relevant authority (including without limitation the Stock Exchange);

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LETTER FROM THE BOARD

(8) the warranties given by the Vendor and the Company under the S&P Agreement being true and accurate in all material respects; and
(9) the Company being satisfied that, as at Completion, there has not been any material adverse change in respect of any member of the Target Group since the date of the S&P Agreement.

The Company may (but not obliged to) waive and/or vary any of the conditions (1), (2)(b), (2)(c), (4), (5), (8) and (9) as stated above. All other conditions as set out above may not be waived or varied by any of the parties to the S&P Agreement. If any of the conditions set out above is not fulfilled or, as the case may be, waived or varied by the Company on or before 12:00 noon on the Long Stop Date, then (with prejudice to any other remedies available to the other party) the obligations of the parties shall cease and determine and neither party shall have any claim under the S&P Agreement against the other save in respect of any antecedent breaches.

Although the Company has no intention to waive any of the above conditions at the time of signing of the S&P Agreement and as at the Latest Practicable Date, it was agreed between the parties of the S&P Agreement that some of the conditions which are not mandatory in nature can be waived by the Company so that, if the Directors consider it in the interests of the Company and the Shareholders to waive the strict compliance of any particular condition and to proceed with the Transaction accordingly, the Company will be allowed to exercise its discretion to do so under the S&P Agreement. The Directors consider that it is customary for purchasers in this kind of transactions to retain the rights of waiver. For those conditions which are mandatory in nature, such as the conditions (2)(a), (3), (6) and (7) set out above, they cannot be waived in any event.

As at the Latest Practicable Date, none of the above conditions has been fulfilled.

Consideration

The Sale Share Consideration shall be approximately HK$510 million and shall be settled upon Completion by the Company allotting and issuing, credited as fully paid, the Consideration Shares (being 377,778,000 new Shares) to Global Corn Bio-chem at the issue price of HK$1.35 per Consideration Share at Completion.

The issue price of HK$1.35 per Consideration Share to be issued by the Company represents:

(i) a premium of approximately 5.5% over the closing price of HK$1.280 per Share as quoted on the Stock Exchange on the last trading day of the Shares immediately before the date of the S&P Agreement;

— 10 —

LETTER FROM THE BOARD

(ii) a premium of approximately 4.0% to the average closing price of HK$1.298 per Share as quote on the Stock Exchange for the last five trading days of the Shares immediately before the date of the S&P Agreement;
(iii) a premium of approximately 4.6% to the average closing price of HK$1.291 per Share as quote on the Stock Exchange for the last ten trading days of the Shares immediately before the date of the S&P Agreement;
(iv) a premium of approximately 68.8% over the closing price of HK$0.80 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and
(v) a discount of approximately 34.1% to the net asset value of HK$1.81 per Share as stated in the unaudited consolidated accounts of the Company for the six months ended 30 June 2011.

The Consideration Shares represent approximately 32.9% of the existing issued share capital of the Company and approximately 24.7% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares. The Company will seek the specific mandate from the Independent Shareholders at the EGM for the allotment and issue of the Consideration Shares. The Company has applied to the Listing Committee of the Stock Exchange for the granting of listing of, and permission to deal in, the Consideration Shares on the main board of the Stock Exchange.

There is no restriction which applies to the subsequent sale of the Consideration Shares.

The consideration for the purchase of the Shareholder Loans is a nominal amount of HK$1, which shall be payable in cash on Completion by the Company.

The Consideration was determined after arm’s length negotiations among the parties to the S&P Agreement and with reference to the fair value of Changchun Jincheng of approximately RMB443 million (equivalent to approximately HK$534 million) as at 30 June 2011 as appraised by Greater China Appraisal Limited, which is an independent valuer, using the market approach for the valuation of the entire equity interest of Changchun Jincheng.

The terms of the S&P Agreement have been arrived at after arm’s length negotiations between the parties based on normal commercial terms and are considered by the Directors to be fair and reasonable and in the interests of the Shareholders as a whole.

— 11 —

LETTER FROM THE BOARD

Completion

Completion shall take place on the third Business Day after the fulfillment or, as the case may be, waiver of the abovementioned conditions or such other date as agreed in writing among the parties to the S&P Agreement.

Upon Completion, the Target Company will become an indirect wholly owned subsidiary of the Company and an indirect non-wholly owned subsidiary of GBT.

For illustration purpose, the corporate structures of the Target Group (i) before the Reorganisation and before the Completion; (ii) upon completion of the Reorganisation but before the Completion; and (iii) upon the Completion are set out below:

(a) Before Reorganisation and before the Completion

==> picture [302 x 440] intentionally omitted <==

----- Start of picture text -----

GBT
100%
Global Corn
Bio-chem
100% 52.23%
Global The
Corn Company
100%
Changchun
Vendor
Dacheng
10% 90% 100%
Changchun Target
Jincheng Company
100%
HK
Subsidiary
----- End of picture text -----

— 12 —

LETTER FROM THE BOARD

(b) Upon completion of the Reorganisation but before the Completion

==> picture [212 x 468] intentionally omitted <==

----- Start of picture text -----

GBT
100%
Global Corn
Bio-chem
100% 52.23%
Global The
Corn Company
100%
Vendor
100%
Target
Company
100%
HK
Subsidiary
100%
Changchun
Jincheng
----- End of picture text -----

— 13 —

LETTER FROM THE BOARD

(c) Upon Completion

==> picture [192 x 380] intentionally omitted <==

----- Start of picture text -----

GBT
100%
Global Corn
Bio-chem
100% 64.04%
Global Corn The Company
100% 100%
Target
Vendor
Company
100%
Target HK
SubsidiaryCompany
100%
Changchun
Jincheng
----- End of picture text -----

— 14 —

LETTER FROM THE BOARD

EFFECT ON SHAREHOLDING STRUCTURE

The shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately upon the issue and allotment of the Consideration Shares pursuant to the Completion are as follows:

			Immediately upon the issue	Immediately upon the issue	Immediately upon the issue
			and allotment of the
	As at the Latest	Practicable Date	Consideration Shares
		Approximate %		Approximate %
		of issued share		of issued share
Name of shareholders of		capital of		capital of
the Company	No. of Shares	the Company	No. of Shares	the Company
Substantial shareholders
GBT and Global Corn	600,500,000	52.23%	978,278,000		64.04%
Bio-chem
Connected persons (other than substantial shareholders) and their respective			associates
Kong Zhanpeng	1,984,000	0.17%	1,984,000		0.13%
Other directors of	14,000	0.00%	14,000		0.00%
subsidiaries of the
Company
Public shareholders	547,310,000	47.60%	547,310,000		35.83%
Total:	1,149,808,000	100.00%	1,527,586,000	100.00%

REASONS FOR AND BENEFITS OF THE TRANSACTION

Corn starch is one of the principal production materials for the Group. Currently, the Group has been producing corn starch from the production facilities of Jinzhou Yuancheng, as well as sourcing a substantial amount of corn starch from the GBT Group pursuant to the Corn Starch Master Purchase Agreement.

As disclosed in the annual report of the Company for the year ended 31 December 2010, the Directors expect that the market demand for the products of the Group will remain strong in 2011 and the utilization rate of various production facilities will gradually ramp up and reach full utilization. In view of this, the Group plans to expand its production capacity to cope with the rising market demand.

— 15 —

LETTER FROM THE BOARD

According to the “Notice in relation to the guidelines on promotion of healthy development of corn refinery industry”（關於促進玉米深加工業健康發展的指導意見的通知）issued by the National Development and Reform Commission of the PRC in September 2007, no further new corn refinery projects will be approved by the authorities thereafter in principle. In addition, the construction of those corn refinery projects, which had filed registration to the authorities during the Eleventh Five-Year Plan of the PRC but had not yet commenced construction, had to be halted. The main purpose of the guideline is to reform and adjust the corn refinery industry in the PRC by balancing the supply and demand of various corn refined products and prohibit the construction of low value added corn processing plants. It is therefore currently not feasible for the Group to construct a new corn-processing plant and the acquisition of an existing corn-processing plant remains the only alternative for the Group.

In addition, even if the PRC government re-opens the application for corn-processing license, the Directors estimate that construction of a new corn-processing plant with similar production capacity as Changchun Jincheng will take about 18 months and the construction cost would amount to about RMB800 million. There is also no assurance that the Group will be able to pass the environmental assessment and obtain the requisite cornprocessing licence for the new corn-processing plant.

Financial effect of the Transaction

Upon Completion, the Target Group will become wholly-owned subsidiaries of the Company and the financial results of the Target Group will be fully consolidated into the financial statements of the Group.

— 16 —

LETTER FROM THE BOARD

The unaudited consolidated total assets and total liabilities of the Enlarged Group as at 30 June 2011 will be increased from approximately HK$3,451,638,000 to HK$6,081,166,000 and from approximately HK$1,368,423,000 to HK$3,487,951,000 respectively. Upon Completion, the net asset value and the gearing ratio of the Enlarged Group will be increased by 24.5% and 25.0% from approximately HK$2,083,215,000 and 19.7% to approximately HK$2,593,215,000 and 44.7%, respectively.

In light of the potential prospects of the Target Group, the Directors are of the view that the Transaction will likely to have a positive impact on the earnings of the Enlarged Group.

Listing Rules implications

As the applicable percentage ratios (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Transaction are more than 25% but less than 100%, the Transaction constitutes a major transaction of the Company under Rule 14.06 of the Listing Rules. Besides, as the Vendor is wholly owned by GBT (a controlling shareholder of the Company) and hence is an associate of GBT, the Transaction also constitutes a connected transaction for the Company and is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules.

REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

Background

Pursuant to the Utilities Master Supply Agreement entered into between Dacheng Corn as supplier and Changchun Dihao (for itself and as trustee for the benefit of other members of the Changchun Group) as purchaser, Dacheng Corn agreed to procure the supply of electricity, water and steam and the provision of wastewater treatment services to the Changchun Group on arm’s length basis and with reference to the actual cost incurred by Dacheng Corn for its provision of such services. The fees payable by the Changchun Group are settled on a monthly basis and are payable by the Changchun Group within 90 days after the date of the relevant invoice issued by Dacheng Corn. The Utilities Master Supply Agreement has an initial term expiring on 31 December 2012, with an option by the Changchun Group, but not Dacheng Corn, to renew the term for three years on the expiry of such initial term and on the expiry of every successive period of three years thereafter (subject however to the compliance by the Company and GBT of the applicable Listing Rules), unless terminated earlier by three months’ written notice by the Changchun Group. The Utilities Master Supply Agreement remains in full force and effect as at the Latest Practicable Date.

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LETTER FROM THE BOARD

Upon Completion, Changchun Jincheng will become a member of the Changchun Group and Dacheng Corn will continue to provide electricity, water, steam and wastewater treatment services to Changchun Jincheng under and subject to the terms of the Utilities Master Supply Agreement.

Historical figures and annual caps

The approximate aggregate amount payable by the Changchun Group to Dacheng Corn in respect of the provision of utilities services by Dacheng Corn for the year ended 31 December 2010 and the eight months ended 31 August 2011 and the current applicable annual caps for such supply for each of the three years ending 31 December 2012 as disclosed in the announcement of the Company dated 20 April 2009 are as follows:

	For the	For the	For the
	year ended	year ending	year ending
	31 December	31 December	31 December
	2010	2011	2012
Actual amount	HK$87.7 million	HK$66.2 million	N/A
		(note)
Current annual caps	HK$124.3 million	HK$136.9 million	HK$150.5 million

Note: The figure represents the approximate aggregate amount payable by the Changchun Group to Dacheng Corn in respect of the provision of utilities services by Dacheng Corn for the period commencing from 1 January 2011 up to 31 August 2011 based on the unaudited management accounts of the Changchun Group for the eight months ended 31 August 2011.

As at the Latest Practicable Date, the current annual cap for the year ending 31 December 2011 has not been exceeded.

The Revised Caps

As there will be an expected increase in the fee payable to Dacheng Corn under the Utilities Master Supply Agreement as a result of the provision of utilities service to Changchun Jincheng, the Directors expect that the aggregate amount payable by the Changchun Group to Dacheng Corn under the Utilities Master Supply Agreement will exceed the current annual caps for the years ending 31 December 2011 and 2012. In such regards, the Company proposes to revise the annual caps for the continuing connected transactions under the Utilities Master Supply Agreement for each of the two years ending 31 December 2012.

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LETTER FROM THE BOARD

The Revised Caps for the continuing connected transactions under the Utilities Master Supply Agreement for each of the two years ending 31 December 2012 are set out below:

	For the	For the
	year ending	year ending
	31 December	31 December
	2011	2012
Revised Caps	HK$268 million	HK$324 million

The Revised Caps are determined by the Directors by reference to the historical aggregate amount payable by the Changchun Group for the provision of utilities services by Dacheng Corn and the current utilities cost of Changchun Jincheng. For the year ended 31 December 2010 and the eight months ended 31 August 2011, the utilities cost of Changchun Jincheng amounted to approximately RMB92.1 million (equivalently to approximately HK$110.6 million) and RMB66.5 million (equivalently to approximately HK$79.7 million), respectively.

The Directors are of the view that the Revised Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Listing Rules implications

As at the Latest Practicable Date, Dacheng Corn is wholly owned by GBT and hence an associate of GBT. Therefore, the provision of utilities service to Changchun Jincheng as contemplated under the Utilities Master Supply Agreement will constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules upon Completion.

Since the applicable percentage ratios for the Revised Caps is expected to exceed 5% and the annual consideration payable by the Changchun Group in respect of the continuing connected transactions under the Utilities Master Supply Agreement is expected to exceed HK$10 million, the Revised Caps are subject to the reporting, announcement and the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

INFORMATION ON THE TARGET GROUP

1. Target Company

The Target Company, wholly-owned by the Vendor, is an investment holding company incorporated in the BVI on 8 August 2011 with limited liability.

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LETTER FROM THE BOARD

Based on the management accounts of the Target Company which have been prepared in accordance with generally accepted accounting principles in Hong Kong, the net assets of the Target Company was approximately HK$7.8 as at 31 August 2011. As the Target Company was recently incorporated, no audited or unaudited financial statements for the past two financial years are available. As at the Latest Practicable Date, the Target Company has no major assets or investment other than its holding of the HK Subsidiary.

The original purchase cost of the Vendor regarding the entire issued share capital of the Target Company was US$1, being the subscription price for the allotment of Sale Share at par by the Target Company.

2. HK Subsidiary

HK Subsidiary is a company incorporated in Hong Kong on 23 August 2011 and its entire issued share capital is legally, beneficially and wholly-owned by the Target Company. As at the Latest Practicable Date, HK Subsidiary is an investment holding company and has no major assets or investment. The net asset value of HK Subsidiary was HK$10,000 as at 31 August 2011.

3. Changchun Jincheng

Changchun Jincheng is situated in Changchun Province, the PRC and is a sinoforeign equity joint venture enterprise established on 27 March 2001 under the laws of the PRC with a registered capital of RMB98,700,000.

The principal business of Changchun Jincheng is the manufacture and sales of corn starch and the Co-products. It has a corn starch manufacturing plant, situated on a land with a site area of approximately 296,330 sq. m. in Changchun, the PRC, with a gross floor area of approximately 43,026 sq.m. and the production capacity of approximately 420,000 mtpa of corn starch and 180,000 mtpa of Co-products.

Based on the audited accounts of Changchun Jincheng prepared in accordance with the generally accepted accounting principles of Hong Kong for the year ended 31 December 2010, the net assets value of Changchun Jincheng was approximately RMB247.1 million as at 31 December 2010. Based on the same audited accounts, for each of the two years ended 31 December 2010, the net profit before tax of Changchun Jincheng amounted to approximately RMB43.0 million and approximately RMB41.9 million, respectively and for each of the two years ended 31 December 2010, the net profit after tax attributable to the shareholders of Changchun Jincheng amounted to approximately RMB35.9 million and RMB33.5 million, respectively.

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LETTER FROM THE BOARD

4. Reorganisation

As at the Latest Practicable Date, Changchun Jincheng is an indirect wholly owned subsidiary of GBT, its entire equity interest is owned as to 90% by the Vendor and 10% by Changchun Dacheng.

As one of the conditions of the S&P Agreement, prior to Completion, the Vendor will procure that the Reorganisation be implemented whereby HK Subsidiary will acquire the entire equity interest of Changchun Jincheng and, after such acquisition, Changchun Jincheng will become a wholly owned subsidiary of HK Subsidiary.

BACKGROUND INFORMATION OF THE VENDOR, THE GBT GROUP AND THE GROUP

The Vendor is an indirect wholly owned subsidiary of GBT and is an investment holding company. The GBT Group is principally engaged in the manufacture and sale of corn refined products and corn based biochemical products, categorised into upstream and downstream products.

The Group is principally engaged in the manufacture and sale of corn-based sweetener products.

Each of Mr. Kong Zhanpeng and Mr. Xu Zhouwen, being executive directors of GSH, holds more than 5% of the entire issued share capital in GBT and is therefore regarded as having a material interest in the Transaction and the Revised Caps. Mr. Kong Zhanpeng and Mr. Xu Zhouwen have abstained from voting in the resolutions of the GSH Board approving the Transaction and the Revised Caps.

EGM

Set out on pages 154 to 155 in this circular is a notice convening the EGM which will be held at Conference room, 3/F, Nexxus Building, 77 Des Voeux Road, Central, Hong Kong on 17 October 2011 at 10:30 a.m., at which a resolution will be proposed to approve the Transaction and the Revised Caps. As a connected person having interest in the Transaction and the Revised Caps, GBT, Global Corn Bio-chem and its associates, which in aggregate were interested in and were entitled to exercise control over the voting rights of 600,500,000 Shares, representing approximately 52.23% of the issued share capital of the Company as at the Latest Practicable Date, shall abstain from voting at the ordinary resolution regarding the Transaction and the Revised Caps.

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LETTER FROM THE BOARD

Enclosed is a form of proxy for use at the EGM. If you are not able to attend the EGM, you are requested to complete the proxy form in accordance with the instructions printed thereon and return and deposited the same at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wan Chai, Hong Kong as soon as possible and in any event, not less than 48 hours before the holding of the EGM. Completion and return of proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

RECOMMENDATION

Your attention is drawn to the Letter from the Independent Board Committee set out on pages 23 to 24 of this circular which contains its advice to the Independent Shareholders regarding the Transaction and the Revised Caps and to the Letter from Partners Capital set out on pages 25 to 49 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders regarding the Transaction and the Revised Caps as well as the principal factors and reasons taken into consideration in arriving at its advice.

Taking into account the reasons set out above, the Directors (including the independent non-executive Directors) consider that the terms of the Transaction and the Revised Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and therefore recommend the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the EGM to approve the Transaction and the Revised Caps. You are advised to read the Letter from the Independent Board Committee and the Letter from Partners Capital mentioned above before deciding as to how to vote at EGM.

FURTHER INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

On behalf of the Board of

Global Sweeteners Holdings Limited Kong Zhanpeng Chairman

— 22 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

26 September 2011

To the Independent Shareholders

Dear Sirs or Madams,

MAJOR AND CONNECTED TRANSACTION

TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION

REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

We refer to the circular issued by the Company to its Shareholders dated 26 September 2011 (the “Circular”) of which this letter forms part. Terms defined in the Circular bear the same meanings herein unless the context otherwise requires.

We have been appointed by the Board to consider the terms of the Transaction and the Revised Caps and to advise the Independent Shareholders as to whether, in our opinion, the terms of the Transaction and the Revised Caps are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Partners Capital has been appointed as independent financial adviser to advise us in respect of the Transaction and the Revised Caps. Your attention is drawn to the Letter from Partners Capital in the Circular containing the advice of Partners Capital in such respect.

for identification purposes only

— 23 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RECOMMENDATION

We have considered the principal factors taken into account by Partners Capital in arriving at its opinion in respect of the Transaction and the Revised Caps. We concur with the views of Partners Capital that the terms of the Transaction and the Revised Caps are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions in respect of the Transaction and the Revised Caps at the EGM.

Yours faithfully,

Independent Board Committee

Chan Yuk Tong Gao Yunchun Ho Lic Ki

Independent non-executive Directors

— 24 —

LETTER FROM PARTNERS CAPITAL

The following is the letter of advice from Partners Capital to the Independent Board Committee and the Independent Shareholders, which has been prepared for the purpose of inclusion in this circular.

==> picture [42 x 42] intentionally omitted <==

==> picture [195 x 33] intentionally omitted <==

Partners Capital International Limited Unit 3906, 39/F, COSCO Tower 183 Queen’s Road Central Hong Kong

26 September 2011

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

MAJOR AND CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the S&P Agreement, the Transaction and the Revised Caps, particulars of which are set out in the letter from the Board (the “Letter from the Board”) of this circular to the shareholders (the “Shareholders”) of the Company dated 26 September 2011 (the “Circular”) and in which this letter is reproduced. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as given to them under the definitions section of the Circular.

On 2 September 2011, the Company, entered into the S&P Agreement with the Vendor, being an indirect wholly-owned subsidiary of GBT, for the sale and purchase of the entire equity interests in the Target Company and the Shareholder Loans. Prior to the Reorganisation and the Transaction, Changchun Jincheng was an indirect wholly owned subsidiary of GBT and its entire equity interest was owned as to 90% by the Vendor and 10% by Changchun Dacheng respectively. It is expected that upon completion of the Reorganisation, Changchun Jincheng will be indirect wholly owned by the Target Company. The Target Company is principally engaged in the manufacture and sales of corn starch slurry and other Co-products through its subsidiary, namely Changchun Jincheng, in the PRC. Pursuant to the S&P Agreement, the Vendor has agreed to sell and the Company has agreed to purchase the Sale Share at a consideration of HK$510 million and the

— 25 —

LETTER FROM PARTNERS CAPITAL

Shareholder Loans at a consideration of HK$1. The Sale Shares Consideration shall be satisfied by the Company allotting and issuing to Global Corn Bio-chem the Consideration Shares at an issue price of HK$1.35 per Consideration Share upon Completion. The consideration of the Shareholder Loans shall be payable by the Company in cash on Completion. The Consideration was determined after arm’s length negotiations between the Vendor and the Company by reference to the fair value of the entire equity interest of Changchun Jincheng as at 30 June 2011 as appraised by Greater China Appraisal Limited (the “Appraiser”), an independent valuer.

As the applicable percentage ratios (as calculated in accordance with Rule 14.07 of the Listing Rules) for the Transaction are more than 25% but less than 100%, the Transaction will constitute a major transaction of the Company under Rule 14.06 of the Listing Rules. Besides, as the Vendor is wholly owned by GBT (a controlling Shareholder of the Company) and hence is an associate of GBT, the Transaction also constitutes a connected transaction for the Company and is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules.

On other hand, pursuant to the Utilities Master Supply Agreement, Dacheng Corn has been providing electricity, water, steam and wastewater treatment services to the Changchun Group (the “Continuing Connected Transactions”). Upon Completion, Changchun Jincheng will become a member of the Changchun Group and Dacheng Corn will continue to provide electricity, water, steam and wastewater treatment services to Changchun Jincheng. Such service will be provided under and subject to the terms of the Utilities Master Supply Agreement. Given that Dacheng Corn is wholly owned by GBT and hence an associate of GBT, the transactions contemplated under the Utilities Master Supply Agreement will constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules upon Completion. As there will be an expected increase in the fee payable to Dacheng Corn under the Utilities Master Supply Agreement as a result of the provision of utilities service to Changchun Jincheng, the Directors expect that the aggregate amount payable by the Changchun Group to Dacheng Corn under the Utilities Master Supply Agreement will exceed the current annual caps for the years ending 31 December 2011 and 2012 as disclosed in the announcement of the Company dated 20 April 2009. In this regard, the Company proposes to revise the annual caps for the continuing connected transactions under the Utilities Master Supply Agreement for each of the two years ending 31 December 2012. Since the applicable percentage ratios for the Revised Caps is expected to exceed 5% and the annual consideration payable by the Changchun Group in respect of the continuing connected transactions under the Utilities Master Supply Agreement is expected to exceed HK$10 million, the Revised Caps are subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules.

— 26 —

LETTER FROM PARTNERS CAPITAL

In this connection, the Company will seek the Independent Shareholders’ approval for the Transaction, the S&P Agreement, the Revised Caps and the transactions contemplated therein at the EGM to be conducted by poll. At the EGM, GBT and its associates are required to abstain from voting on the resolution(s) in relation to the Transaction, the S&P Agreement, the Continuing Connected Transactions, the Revised Caps and the transactions contemplated therein. In addition, the Independent Board Committee has been established to advise the Independent Shareholders whether the terms of the Transaction, the S&P Agreement, the Continuing Connected Transactions, the Revised Caps and the transactions contemplated therein are on normal commercial terms and fair and reasonable and whether the Transaction, the S&P Agreement, the Continuing Connected Transactions, the Revised Caps and the transactions contemplated therein are in the interests of the Company and the Independent Shareholders as a whole. In this regard, Partners Capital has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders.

We are not connected with the directors, chief executive and substantial Shareholders of the Company or GBT any of its subsidiaries or their respective associates and are therefore considered suitable to give independent advice to the Independent Board Committee and the Independent Shareholders. Apart from normal professional fees payable to us by the Company in connection with this appointment, no arrangement exists whereby we will receive any fees or benefits from the Company or GBT or the Directors, chief executive and substantial Shareholders of the Company or GBT or any of its subsidiaries or their respective associates.

In formulating our opinion, we have relied on the accuracy of the information and representations contained in the Circular and have assumed that all information and representations made or referred to in the Circular were true at the time they were made and continue to be true as at the date of the Circular. We have also relied on our discussion with the management of the Company regarding the Group, the Transaction and the Continuing Connected Transactions including the information and representations contained in the Circular. We have also assumed that all statements of belief, opinion and intention made by the Directors and the Company in the Circular were reasonably made after due enquiry. We consider that we have reviewed sufficient information to reach an informed view, to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have no reason to suspect that any material facts have been omitted or withheld from the information contained or opinions expressed in the Circular nor to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have not, however, conducted an independent in-depth investigation into the business and affairs of the Group, the GBT Group, the Vendor, Dacheng Corn, the Target Group and their respective associates nor have we carried out any independent verification of the information supplied.

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LETTER FROM PARTNERS CAPITAL

THE TRANSACTION

Principal factors considered

In arriving at our opinion regarding the Transaction and the terms of the S&P Agreement, we have considered the following principal factors and reasons:

1. Background of and reasons for the Transaction

The Group is principally engaged in the production and sale of corn refined products and corn sweeteners, categorised into upstream and downstream products. The Group’s upstream products include corn starch, gluten meal, corn oil and other corn refined products. Corn starch is then refined downstream to produce various corn sweeteners which are classified into two categories: corn syrup (glucose syrup and maltose syrup) and corn syrup solid (crystallised glucose and maltodextrin). The Group is also engaged in retail business through launching of its own branded sweeteners and beef products direct to supermarket chains and end users.

(i) Background of the Target Group

The Target Company, wholly-owned by the Vendor, is an investment holding company incorporated in the BVI with limited liability. Based on the management accounts of the Target Company which have been prepared in accordance with generally accepted accounting principles in Hong Kong, the net asset of the Target Company was approximately HK$7.8 as at 31 August 2011. As the Target Company was recently incorporated, no audited or unaudited financial statements for the past two financial years are available. As at the Latest Practicable Date, the Target Company has no major assets or investment other than its holding of the HK Subsidiary.

HK Subsidiary is a company incorporated in Hong Kong and its entire issued share capital is legally, beneficially and wholly-owned by the Target Company. As at the Latest Practicable Date, HK Subsidiary is an investment holding company and has no major assets or investment. Upon completion, it will hold the entire equity interest in Changchun Jincheng.

As set out in the Letter from the Board, Changchun Jincheng is situated in Changchun, Jilin Province, the PRC and is a wholly-owned foreign enterprise established on 27 March 2001 under the laws of the PRC with a registered capital of RMB98,700,000. The principal business of Changchun

— 28 —

LETTER FROM PARTNERS CAPITAL

Jincheng is manufacture and sales of corn starch and the Co-products. It has a corn starch manufacturing plant, situated on a land with a site area of approximately 296,330 sq. m. in Changchun, the PRC, with a gross floor area of approximately 43,026 sq.m. and the production capacity of approximately 420,000 mtpa of corn starch and 180,000 mtpa of Co-products.

Based on the audited accounts of Changchun Jincheng prepared in accordance with the generally accepted accounting principles of the PRC for the year ended 31 December 2010, the net assets value of Changchun Jincheng was approximately RMB247.1 million as at 31 December 2010. Based on the same audited accounts, for each of the two years ended 31 December 2010, the net profit before tax of Changchun Jincheng amounted to approximately RMB43.0 million and approximately RMB41.9 million, respectively and for each of the two years ended 31 December 2010, the net profit after tax attributable to the shareholders of Changchun Jincheng amounted to approximately RMB35.9 million and RMB33.5 million, respectively.

(ii) Reasons for and benefit of entering into of the S&P Agreement

As set out in the Letter from the Board, corn starch is one of the principal raw materials in production of corn sweeteners for the Group. Currently, the Group has been producing corn starch from the production facilities of Jinzhou Yuancheng, as well as sourcing a substantial amount of corn starch from the GBT Group pursuant to the Corn Starch Master Purchase Agreement.

As further set out in the Letter from the Board, the Directors expect that market demand for the products of the Group will remain strong in 2011 and the utilization rate of various production facilities will gradually ramp up and reach full utilization. As advised by the Company, the utilisation rate of the Group’s production facilities were steady at approximately 96%, 92% and 98% for the two years ended 31 December 2010 and 8 months ended 31 August 2011 respectively. In view of this, the Group plans to expand its production capacity to cope with the rising market demand. Besides, as a result of the PRC government’s priority on stabilising the prices of food by its stringent control over the use of corn kernel as raw material for producing ethanol, the PRC government has suspended the issue of corn-processing license for the time being. It is therefore currently not feasible for the Group to construct a new corn-processing plant and the acquisition of an existing corn-processing plant remains the only alternative for the Group.

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LETTER FROM PARTNERS CAPITAL

The Directors consider that the acquisition of the Target Group is beneficial to the Group as it could secure the supply of corn starch for the corn sweeteners production facilities of the Group in Changchun, and reduces the Group’s reliance on the supply of corn starch from the GBT Group. Besides, the Group will continue to enjoy the saving of processing, packaging, dehumidifying, storage, transportation and other related costs through the supply of corn starch by Changchun Jincheng to the Group’s sweeteners production facility in Changchun in slurry form through a pipeline arrangement. Such vertical integration along the chain of production for the Group also places it in a better position to effectively apply quality control procedures and to monitor and control the production flows of both corn starch and corn sweeteners, thereby minimising the chance of having bottlenecks or inventory pile-up, and related administrative costs. As advised by the Company, the total purchases of corn starch of the Group were approximately 385,000 metric tonnes, 348,000 metric tonnes and 269,000 metric tonnes for the two years ended 31 December 2010 and eight months ended 31 August 2011 respectively. The purchases of corn starch of the Group from Changchun Jincheng were approximately 204,000 metric tonnes, 201,000 metric tonnes and 149,000 metric tonnes for the two years ended 31 December 2010 and eight months ended 31 August 2011 respectively representing approximately 53.0%, 57.8% and 55.4% of the total purchases of corn starch of the Group during the respective period/ year. As further advised by the Company, it is planned that all of corn starch produced by Changchun Jincheng will be consumed by the Group upon the Completion and the annual production capacity of corn starch of Changchun Jincheng of 420,000 mtpa would facilitate the Group to reduce reliance on the GBT Group and satisfy the need of raw materials for the current production of the Group and its expansion plan.

In addition, even if the PRC government re-opens the application for cornprocessing license, the Directors, having considered the procedures required to obtain all necessary government approvals, estimate that construction of a new corn-processing plant will take about 18 months and the construction cost would amount to about RMB800 million. There is also no assurance that the Group will be able to pass the environmental assessment and obtain the requisite corn-processing licence for the new corn-processing plant.

We note from the annual report of the Company for the year ended 31 December 2010 that, the strong consumption sentiments in the PRC have fueled the demand of food, bringing about a strong demand for the raw materials of food and drinks such as corn starch and sweeteners. In addition,

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LETTER FROM PARTNERS CAPITAL

the unstable weather conditions in the PRC have resulted in tightened market supply and increased sugar prices. Besides, the crude oil price has stayed up, imposing a positive impact on the prices of sugar and sweeteners as an alternative source of energy. According to the annual reports of the Company for each of the two years ended 31 December 2010, the turnover of the Group has been on an increasing trend since 2005. As further set out in the annual report of the Company for the year ended 31 December 2010, the Directors expected that the market demand of the Group’s products will remain strong in 2011 and the overall sales volume may further increase.

According to 《關於促進玉米深加工業健康發展的指導意見的通知》 (transliterated as “the notice in relation to the Guidelines on promotion of healthy development of corn refinery industry”) issued by the National Development and Reform Commission in September 2007, no further new corn refinery projects will be approved by the authorities thereafter in principle. In addition, the construction of those corn refinery projects, which had filed registration to the authorities during the Eleventh Five-Year Plan of the PRC but had not yet commenced construction, had to be halted. The main purpose of the guideline is to reform and adjust the corn-refinery industry in the PRC by balancing the supply and demand of various corn refined products and prohibit the construction of low value added corn processing plants. We note that there is no sign of relaxing such restriction from the PRC Government in the near future in view of the current economic conditions. Thus, we concur with the view of the Board that the Transaction can facilitate the instant ownership of an established production plant of corn starch within the proximity of the production plant of the Group at Changchun and the vertical integration along the chain of production for the Group. Moreover, we consider that the Transaction enables the Company to secure a stable supply of a key production material for its production facilities in Changchun and continue to save processing and packaging, dehumidifying, storage, transportation and other related costs.

On the above basis, we consider that there is a strong commercial rationale for the Company to enter into of the S&P Agreement which enables the Company to secure a stable supply of corn starch for its production whilst maintaining significant procurement costs savings and reducing its reliance on the GBT Group.

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LETTER FROM PARTNERS CAPITAL

2. Terms of the S&P Agreement

(i) Consideration

Pursuant to the S&P Agreement, the Company will purchase the entire equity interests in the Target Company at a Consideration of approximately HK$510 million and the Shareholder Loans at a consideration of HK$1. The Sale Shares Consideration shall be satisfied by the Company allotting and issuing to Global Corn Bio-chem the Consideration Shares at an issue price of HK$1.35 per Consideration Share upon Completion. The consideration of the Shareholder Loans shall be payable by the Company in cash on Completion. As set out in the Letter from the Board, the Consideration was determined after arm’s length negotiations among the parties to the S&P Agreement and with reference to the fair value of Changchun Jincheng of approximately RMB443 million (equivalent to approximately HK$534 million) as at 30 June 2011 as appraised by the Appraiser using the market approach for the valuation of the entire equity interest of Changchun Jincheng.

We have interviewed the Appraiser and note that notwithstanding the Company and the Appraiser has had normal business relationship, the Appraiser is a third party independent of (i) the Group and other parties to the Transaction; and (ii) their connected persons. We also note that the Appraiser had conducted valuations for a number of companies listed on the Stock Exchange and the valuers preparing the valuation for the Company have the relevant qualification and experience to conduct the valuation for Changchun Jincheng.

To our best knowledge, we are not aware that the Company or other party to the Transaction has made formal or informal representation to the Appraiser.

We have also reviewed the scope of services provided under the engagement between the Appraiser and the Company and we note that the scope of work is appropriate to the opinion given and there was no limitation on the scope of work. According to the valuation report for Changchun Jincheng prepared and issued by the Appraiser, we note that the Appraiser has also considered three commonly used valuation approaches, namely asset approach, income approach and market approach. However, the Appraiser considers that (i) asset approach is not appropriate as it does not reflect the future economic benefits generated from Changchun Jincheng’s operations; and (ii) income approach is also not appropriate as many assumptions and estimations are required and not all of them can be easily quantified and obtained from the management of

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LETTER FROM PARTNERS CAPITAL

the Company. The Appraiser has adopted the market approach to prepare the valuation of the fair value of Changchun Jincheng as at 30 June 2011 because sufficient numbers of comparable public companies are available to facilitate a meaningful comparison. In particular, the Guideline Public Company Method was applied to determine the fair value of Changchun Jincheng where the enterprise value was computed on a total-company basis by reference to the median of Enterprise Value to Earnings-before-Interest-and-Tax multiple (“EV/EBIT”) of six guideline public companies after relevant adjustments of their respective financial information. Having reviewed the principal business activities of these guideline public companies (where the Company is one of them), we note that they are principally engaged in the manufacture and sales of corn starch and corn starch related products which we consider relevant to the business nature of Changchun Jincheng and therefore suitable to give a fair and reasonable comparison to Changchun Jincheng. We also note that the Appraiser has applied a discount of 15% to the valuation under the Guideline Public Company Method due to relatively small size of Changchun Jincheng and the lack of marketability in public trading. Based on the foregoing, we consider that the valuation methodology adopted by the Appraiser is fair and reasonable and appropriate for determining the fair value of Changchun Jincheng.

Upon comparison, we note that the Consideration of approximately HK$510 million represents a discount of 4.5% to the fair value of Changchun Jincheng of approximately RMB443 million (equivalent to approximately HK$534 million) as appraised by the Appraiser notwithstanding that its represents a premium of 56% to the net asset value of approximately RMB271 million (equivalent to approximately HK$322 million) of Changchun Jincheng as at 30 June 2011. We concur with the Appraiser’s view that the net asset value does not take into account the future economic benefit generated from Changchun Jincheng’s operations and therefore cannot reflect its fair value and give meaningful comparison and we consider the Guideline Public Company Method adopted by the Appraiser is more relevant and appropriate.

Based on the above analysis, we consider that the Consideration is fair and reasonable so far as the Independent Shareholders are concerned.

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(ii) Mode of settlement of the Consideration

Pursuant to the S&P Agreement, the Consideration of HK$510 million shall be satisfied by the allotment and issue of 377,778,000 Consideration Shares to the Vendor upon Completion. The Consideration Shares will be issued at HK$1.35 (the “Issue Price”) each, which represents:

(i) a premium of approximately 5.5% to the closing price of HK$1.28 per Share as quoted on the Stock Exchange on the last trading day before the date of the S&P Agreement (“Last Trading Day”);
(ii) a premium of approximately 4.0% to the average closing price of HK$1.298 per Share for the last five trading days up to and including the Last Trading Day;
(iii) a premium of approximately 4.6% to the average closing price of HK$1.291 per Share for the last ten trading days up to and including the Last Trading Day;
(iv) a discount of approximately 6.7% to the average closing price of about HK$1.447 per Share for the last 30 trading days up to and including the Last Trading Day;
(v) a discount of approximately 16.2% to the average closing price of about HK$1.6112 per Share for the last 90 trading days up to and including the Last Trading Day;
(vi) a discount of approximately 25.4% over the unaudited consolidated net asset value of the Company per Share of about HK$1.81 as at 30 June 2011; and
(vii) a premium of approximately 68.8% to the closing price of HK$0.80 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

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• Share price performance

In view that the 12-month benchmarking period is a commonly used tenure for analysis purpose, we consider that it is relevant to review the closing price level of the Shares traded on the Stock Exchange during the 12 month period from 2 September 2010 to 1 September 2011 (being the Last Trading Day) and further up to the Latest Practicable Date (the “Review Period”) as follows:

==> picture [344 x 195] intentionally omitted <==

----- Start of picture text -----

HK$ Share price performance
2.50
2.00
1.50
Issue Price of
HK$1.35 per Share
1.00
0.50
0.00
Sep-2010 Oct-2010 Nov-2010 Dec-2010 Jan-2011 Feb-2011 Mar-2011 Apr-2011 May-2011 Jun-2011 Jul-2011 Aug-2011Latest Practicable DateSep-2011
----- End of picture text -----

Source: Infocast

During the Review Period, the lowest closing price was HK$0.80 per Share recorded on 23 September 2011 and the highest closing price was HK$2.00 per Share recorded on 21 April 2011. The Issue Price represents a premium of approximately 68.8% over the lowest closing price per Share and a discount of approximately 32.5% to the highest closing price per share during the Review Period. The Shares had been continuously traded above the Issue Price of HK$1.35 per Share during most of the period of the Review Period until mid August 2011. Thereafter, the share price dropped below the Issue Price since 19 August 2011. The Issue Price also represents a premium of approximately 68.8% to the closing price of the Shares of HK$0.80 on the Latest Practicable Date.

• Comparison of Issue Price with comparables in terms of price/earnings multiple

Moreover, as the Group principally engaged in the production and sale of corn refined products and corn sweeteners, reference to price/earnings multiple is the most common approach adopted by the investment

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LETTER FROM PARTNERS CAPITAL

community in valuing such kind of revenue-generating entities. For the purpose of comparison, we have identified, to the best of our knowledge and as far as we are aware of, 6 companies listed on the Main Board of the Stock Exchange which are principally engaged in the manufacture and sales of food additives including starch, sugar and sweeteners produced from corn in the PRC (the “Comparables”) and such list of Comparables represents an exhaustive list and the businesses of the Comparables are closely comparable to that of the Company. The details of the Comparables are set out below:

		Closing share		Latest
		price as at	Approximate	published	Price/
		1 September	Market	earnings per	earnings
Company name (Stock Code)	Year end date	2011	Capitalisation	share	multiple
		(HK$)	(HK$ million)	(HK$)	(times)
				(note1)
China Agri-Industries Holdings	31 December	7.37	29,763	0.426	17.3
Ltd. (0606)
China Corn Oil Co. Ltd. (1006)	31 December	4.53	2,384	0.390	11.6
China Starch Holdings Ltd.	31 December	0.33	1,907	0.040	8.3
(3838)
Fufeng Group Ltd. (0546)	31 December	3.83	6,583	0.771	5.0
Global Bio-chem Technology	31 December	2.39	7,783	0.121	19.8
Group Company Limited
(809)
Xiwang Sugar Holdings	31 December	1.64	1,654	0.301	5.4
Co. Ltd. (2088)
				Mean	11.2
				Median	10.0
The Company	31 December	1.28	1,472	0.079	16.2
Issue Price(HK$)		1.35	N/A	0.079	17.1

Note 1: RMB1 is translated to HK$1.22

Source: www.hkex.com.hk and Infocast

Upon comparison, we note that the price/earnings multiple represented by the Issue Price of 17.1 times lies well above the mean and median of the price/earnings multiples of the Comparables, which were calculated with reference to the respective closing price of the shares of the Comparables as at the Last Trading Day and falls within the range of those of the Comparables ranging from 5.0 times to 19.8 times.

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LETTER FROM PARTNERS CAPITAL

Comparison of Issue Price with comparables in terms of net asset value

In addition to price/earnings multiple, we also assess the Issue Price by reference to the net asset value as it is also common in the investment community to value a company by reference to its net asset value. However, we consider that Independent Shareholders should focus on the profitability and/or earning potential of a company principally engaged in manufacturing due to its recurring revenue generating nature. Besides, the size of the net asset value may not have direct linkage to the profitability and/or earning potential of such company. Although it may not be most relevant to value a company principally engaged in manufacturing by reference to its net assets in general, we consider that it provides another angle for analysis and we have reviewed and tabulated below the premium/(discounts) of the closing share prices of the Comparables as at 1 September 2011 and the Latest Practicable Date over/(to) their respective net asset value as reported in their latest published financial reports:

Comparison based on closing Share price as at 1 September 2011 (Last Trading Day)

				Premium/
				(discount)
				of the closing
				share price on
				1 September
				2011 over/(to)
		Closing share		the latest
		price as at	Latest published	published
		1 September	net asset value	net asset value
Company name (Stock Code)	Year end date	2011	per share	per share
		(HK$)	(HK$)
			(note 1)
China Agri-Industries Holdings Ltd. (0606)	31 December	7.37	5.82	26.6%
China Corn Oil Co. Ltd. (1006)	31 December	4.53	2.89	56.7%
China Starch Holdings Ltd. (3838)	31 December	0.33	0.33	0%
Fufeng Group Ltd. (0546)	31 December	3.83	2.38	60.9%
Global Bio-chem Technology Group	31 December	2.39	3.29	(27.4%)
Company Limited (809)
Xiwang Sugar Holdings Co. Ltd. (2088)	31 December	1.64	2.51	(34.7%)
			Mean	13.7%
			Median	13.3%
The Company	31 December	1.28	1.81	(29.3)%
Issue Price(HK$)		1.35	1.81	(25.4)%

Note 1: RMB1 is translated to HK$1.22

Source: www.hkex.com.hk and Infocast

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LETTER FROM PARTNERS CAPITAL

Comparison based on closing Share price as at the Latest Practicable Date

				Premium/
				(discount) of
				the closing
				share price
				on the Latest
		Closing share		Practicable Date
		price as at		over/(to) the
		the Latest	Latest published	latest published
		Practicable	net asset value	net asset value
Company name (Stock Code)	Year end date	Date	per share	per share
		(HK$)	(HK$)
			(note 1)
China Agri-Industries Holdings Ltd. (0606)	31 December	4.77	5.82	(18.04%)
China Corn Oil Co. Ltd. (1006)	31 December	3.65	2.89	26.3%
China Starch Holdings Ltd. (3838)	31 December	0.23	0.33	(30.3%)
Fufeng Group Ltd. (0546)	31 December	3.15	2.38	32.35%
Global Bio-chem Technology Group
Company Limited (809)	31 December	1.41	3.29	(57.14%)
Xiwang Sugar Holdings Co. Ltd. (2088)	31 December	1.23	2.51	(51.00%)
			Mean	(16.31%)
			Median	(24.17%)
The Company	31 December	0.80	1.81	(55.80%)
Issue Price (HK$)		1.35	1.81	(25.4%)
Note 1: RMB1 is translated to HK$1.22
Source: www.hkex.com.hk and Infocast

The discount of the closing share prices as at the Last Trading Day to the net asset value per share of the Comparables range from a discount of approximately 34.7% to a premium of approximately 60.9%. We note that the shares of the majority of the Comparables have been trading at premium over their respective net asset value per share.

Given that the recent fluctuations in global economy and capital market, the investment sentiment has been cooled down and shares of some companies listed in Hong Kong (including the six companies on the

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LETTER FROM PARTNERS CAPITAL

above table) have been traded at lower prices as compared to the price on the Last Trading Day. As at the Latest Practicable Date, the largest discount represented by the closing price to the net asset value of the above comparable companies has increased to approximately 57.14% which is significantly larger than the 25.4% represented by the Issue Price and the median of the discount of the closing share prices as at the Latest Practicable Date to the net asset value per share of the Comparables was 16.31%.

Upon comparison, we note that the discount of the Issue Price to the unaudited consolidated net asset value per Share as at 30 June 2011 of approximately 25.4% falls mildly below the mean and median of the Comparables as at the Last Trading Day and the Latest Practicable Date but still lies within the range of the Comparables. In addition, we also note that the discount of the Issue Price to the unaudited consolidated net asset value per Share as at 30 June 2011 is less than the discounts as represented by the closing price of the Shares as at the Last Trading Day and the Latest Practicable Date.

Based on the above analysis and from the sole perspective assessment of the Issue Price with reference to the Comparables in terms of price/earnings multiple and the net asset value as a whole, we consider that the Issue Price is acceptable so far as the Independent Shareholders are concerned.

3. Financial effects of the S&P Agreement on the Group

(i) Earnings

The Target Company and the HK Subsidiary are investment holding companies with no major assets or investments and will become the holding company of Changchun Jincheng upon completion of the Reorganisation. Hence, we focus on analysing the results of Changchun Jincheng. As set out in the Letter from the Board, based on the audited accounts of Changchun Jincheng prepared in accordance with the generally accepted accounting principles of the PRC for each of the two years ended 31 December 2010, the net profit before tax of Changchun Jincheng amounted to approximately RMB43.0 million and approximately RMB41.9 million, respectively and for each of the two years ended 31 December 2010, the net profit after tax attributable to the shareholders of Changchun Jincheng amounted to approximately RMB35.9 million and RMB33.5 million, respectively. According to the annual report of the Company for the year ended 31 December 2010, the total comprehensive income were approximately HK$118.91 million and HK$99.96 million for

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LETTER FROM PARTNERS CAPITAL

each of the two years ended 31 December 2010. Upon completion of the Transaction, the Target Group (which includes Changchun Jincheng) will become indirect wholly owned subsidiaries of the Company and the Group will consolidate the financial results of the Target Group in full. Accordingly, the Company expects that the Transaction would bring positive effect to the Enlarged Group’s earnings if the Target Group continues to be profit-making.

(ii) Cashflow

As the consideration will be satisfied by the allotment and issue of Consideration Shares to the Vendor upon Completion, it is expected that there will not be any negative impact on the cashflow of the Group arising from the Transaction.

(iii) Net Asset Value

According to the interim report of the Company for the six months ended 30 June 2011, the unaudited consolidated net assets attributable to equity holders of the Company and the net asset value per Share were approximately HK$2,074.3 million and approximately HK$1.81 respectively. Upon completion of the Transaction, the Group will consolidate the financial assets and liabilities of the Target Group in full. According to the pro forma statement of assets and liabilities of the Enlarged Group set out in Appendix III to the Circular, the pro forma consolidated net assets attributable to equity holders of the Enlarged Group will increase to approximately HK$2,584.3 million while the net asset value per Share will decrease to approximately HK$1.70 assuming completion of the Transaction took place on 30 June 2011, representing an increase of approximately 24.6% and a decrease of approximately 6.1% respectively.

Based on the above, we consider that the Transaction is expected to have positive effect on the Group’s net assets position and a mild negative impact on net asset value per Share.

(iv) Gearing

According to the interim report of the Company for the six months ended 30 June 2011, the gearing ratio of the Group as at 30 June 2011 was approximately 41.9%, as derived by dividing the total interest-bearing liabilities of the Group as at 30 June 2011 of approximately HK$873.3 million by the total equity of approximately HK$2,083.2 million as at 30 June 2011.

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LETTER FROM PARTNERS CAPITAL

According to the pro forma statement of assets and liabilities of the Enlarged Group set out in Appendix III to the Circular, upon Completion, the total pro forma interest-bearing liabilities of the Enlarged Group will be approximately HK$1,691.8 million and the pro forma total equity of the Enlarged Group will be approximately HK$2,593.2 million. Hence, the pro forma gearing ratio will be worsened to approximately 65.2%.

On such basis, it is expected that there will be positive effect on earnings, net assets and cashflow but modest negative effect on the net asset value per Share and gearing. Accordingly, we are of the view that the Transaction is, on balance, in the interests of the Company and the Shareholders as a whole.

4. Potential dilution effect on the shareholding of the Company

As set out in the table showing the shareholdings changes of the Company under the section headed “Effect on shareholding structure” as contained in the Letter from the Board, the shareholding of the existing public Shareholders as at the Latest Practicable Date was approximately 47.6%. Pursuant to the S&P Agreement, 377,778,000 new Shares, representing approximately 32.9% of the existing share capital of the Company and 24.7% of the share capital of the Company as enlarged by the issue of the Consideration Shares, will be issued to the Global Corn Biochem. On such basis, the shareholdings of the existing public Shareholders will be diluted from approximately 47.6% to 35.8% upon Completion.

We were advised by the Directors that they had considered various financing alternatives for satisfying the Sale Share Consideration. The Directors were of the view that debt financing would adversely affect the gearing of the Company and the interest expenses thereof would inevitably impact the profitability of the Company. In light of the above and in view that the issue of the Consideration Shares will enlarge and strengthen capital base of the Company, the Directors consider that the issue of the Consideration Shares is the best financing alternative available to the Company at the moment to finance the Transaction.

Taking into account the above factors, in particular, the following:

(a) the current financial turmoil and negative market sentiment;
(b) the Issue Price represents a premium over the current market share price and a smaller discount to the net assets per Share as compared to the discount as represented by the current market price;

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LETTER FROM PARTNERS CAPITAL

(c) the issue of the Consideration Shares will enlarge and strengthen the capital base of the Company as well as greatly enhance the net asset position and gearing position of the Group; and
(d) the Directors consider that the issue of Consideration Shares is the best financing alternative available to the Company at the moment to finance the Transaction;

we are of the opinion that the Subscription is an acceptable means of financing the majority portion of the Consideration and the shareholding dilution to the Independent Shareholders is acceptable so far as the Independent Shareholders are concerned.

Recommendation

Having considered the principal factors and reasons, we are of the opinion that the terms of the S&P Agreement are on normal commercial terms, in the ordinary and usual course of business of the Group and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to, and we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM for approving the Transaction.

THE CONTINUING CONNECTED TRANSACTIONS

Principal factors and reasons considered

In arriving at our opinion regarding the terms of the Revised Caps, we have considered the following principal factors and reasons:

1. Background of and reasons for the terms of the Continuing Connected Transactions and the Revised Caps

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by the Changchun Group within 90 days after the date of the relevant invoice issued by Dacheng Corn. The Utilities Master Supply Agreement has an initial term expiring on 31 December 2012, with an option by the Changchun Group, but not Dacheng Corn, to renew the term for three years on the expiry of such initial term and on the expiry of every successive period of three years thereafter (subject however to the compliance by the Company and GBT of the applicable Listing Rules), unless terminated earlier by three months’ written notice by the Changchun Group. The Utilities Master Supply Agreement remains in full force and effect as at the Latest Practicable Date.

As there will be an expected increase in the fee payable to Dacheng Corn under the Utilities Master Supply Agreement as a result of the provision of utilities service to Changchun Jincheng, the Directors expect that the aggregate amount payable by the Changchun Group to Dacheng Corn under the Utilities Master Supply Agreement will exceed the current annual caps for the years ending 31 December 2011 and 2012. In this regards, the Company proposes to revise the annual caps for the continuing connected transactions under the Utilities Master Supply Agreement for each of the two years ending 31 December 2012.

As advised by the Company, Changchun Jincheng is located within the industrial park of the GBT Group at Changchun and such industrial park has equipped its own power plant and wastewater treatment plant. Water is supplied by independent local water company and Dacheng Corn purchases water on a centralised basis (for the GBT Group and on behalf of the Changchun Group). Water is used as a solvent during the production process such as steeping and cleansing and it is also used for producing steam. Steam is used as carrier to provide pressure in the pipeline during the production process of the products of the Changchun Group. Electricity is generated by the power plant of the industrial park using coal and steam is produced as by-product at the same time. The power output of such power plant is insufficient to support the demand for the whole industrial park and the shortfall of electricity is sourced from the independent local power company. In addition, according to the relevant policies of the electricity company, due to the fact that Changchun Jincheng forms part of the industrial park and was indirectly owned by the GBT Group, the electricity company will not consider Changchun Jincheng as a separate entity and install separate meter and power lines at/to Changchun Jincheng. The wastewater

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LETTER FROM PARTNERS CAPITAL

treatment plant was built in 1997 by the GBT Group and it has been providing wastewater treatment services to the GBT Group and the Changchun Group. Moreover, as advised by the Company, there is no wastewater treatment services provider in Changchun and the manufacturing plants establish their own wastewater treatment facilities in order to comply with the relevant regulations. Given that the cost of establishing a new wastewater treatment plant for the Changchun Group would be substantial and there is no vacant land nearby for building such plant, the Changchun Group has to inevitably rely on the GBT Group to provide such wastewater treatment services.

Based on the above, we consider it is fair and reasonable and in the interests of the Company and the Shareholders as a whole for the Group and the GBT Group to carry out the Continuing Connected Transactions to secure a stable service provider at a lower costs.

2. The Revised Caps

	For the	For the	For the
	year ended	year ending	year ending
	31 December	31 December	31 December
	2010	2011	2012
Actual amount (excluding
Changchun Jincheng as it was
owned by the GBT Group)	HK$87.7 million	HK$66.2 million	N/A
		(note)
Current annual caps	HK$124.3 million	HK$136.9 million	HK$150.5 million

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LETTER FROM PARTNERS CAPITAL

The Revised Caps for the continuing connected transactions under the Utilities Master Supply Agreement for each of the two years ending 31 December 2012 are set out below:

For the For the year ending year ending 31 December 2011 31 December 2012 Revised Caps HK$268 million HK$324 million

The Revised Caps are determined by the Directors by reference to (i) the historical aggregate amount payable by the Changchun Group for the provision of utilities services by Dacheng Corn and the utilities cost of Changchun Jincheng for the first half of 2011; and (ii) the projection of these costs for the second half of 2011 and the full year of 2012.

In particular, we were advised by the Company that the Revised Caps under the Utilities Master Supply Agreement can be further broken down into the following categories and we also set out the aggregate of the historical and estimated monetary amounts of the utilities of the Changchung Group together with Changchun Jincheng to mimic the situation after the Completion:

Supply of water Supply of electricity Supply of steam Provision of wastewater treatment services Total Revised Caps	For the year ended 31 December 2009 (Historical) HK$ million 5.9 65.2 111.6 11.2 193.9 N/A	For the year ended 31 December 2010 (Historical) HK$ million 5.3 69.2 108.6 10.4 193.5 N/A	For the year ending 31 December 2011 (Estimate) HK$ million 4.8 90.6 158.4 13.6 267.4 268	For the year ending 31 December 2012 (Estimate) HK$ million 5.7 109.9 191.3 16.4 323.4 324

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LETTER FROM PARTNERS CAPITAL

Pursuant to the Utilities Master Supply Agreement, the supply of utilities and provision of the wastewater treatment services are to be obtained by Changchun Jincheng from Dacheng Corn on cost basis and the fees will be settled on a monthly basis. These fees are calculated with reference to the costs of Dacheng Corn and the actual level of usage of Changchun Jincheng of the relevant utilities and services.

We note that the estimated increase in supply of steam for each of the two years ended 31 December 2011 is approximately 20% per annum and calculated with reference to several factors including (i) the quantity of steam supplied in the preceding period/year, (ii) the estimated market price of steam with a buffer; and (iii) inflation and currency appreciation. We were advised by the Company that a yearon-year increase of approximately 45.9% for the year ended 31 December 2011 is expected mainly due to the larger supply of steam in the first half of 2011 as a result of the increased production.

As advised by the Company, due to the reasons stated above, it is inevitable for the Group to obtain these services from Dacheng Corn immediately after Completion. Water is obtained by Dacheng Corn on a centralized basis and there are individual meters measuring the respective usage of the GBT Group and the Changchun Group. Water is charged by the GBT Group on cost basis with reference to the cost of obtaining water from the independent local water company. Electricity used by the Changchun Group is provided by the power plant owned by the GBT Group and the independent local power company. As advised by the Company, given that electricity and steam will be generated during the power generating process, the effective cost of generating electricity (i.e. the purchase price of the Changchun Group) may sometimes lower than the price charged by the independent local power company. As further advised by the Company, there is no independent steam supplier available in Changchun and it is not cost efficient for the Changchun Group to produce steam on its own by using additional electricity or energy source. Moreover, there is no independent wastewater treatment service provider available in Changchun and it is costly for the Changchun Group to build its own wastewater treatment plant. In view of the special circumstances stated above, we were confirmed by the Company that there were no comparable transactions in respect of the provision of steam and wastewater treatment services from independent third parties available for our comparison. As further advised by the Company, the pricing of the services were determined with reference to relevant costs and expenses and market price of similar services of third party providers in general and it is assumed that the GBT Group will continue to follow the same pricing mechanism after the completion of the Transaction.

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LETTER FROM PARTNERS CAPITAL

As regards the Revised Caps to be sought of the obtaining of services by Changchun Jincheng from the GBT Group for the two financial years ending 31 December 2012 of HK$268 million and HK$324 million respectively, we have obtained from the Directors a list of estimated services summing roughly up to the Revised Caps. We have reviewed the breakdown of actual usage of the Changchun Group of the utilities up to 31 August 2011. We understand from the Directors that such list of estimate was prepared on the basis of multiplying the estimated price per unit of the individual services by the estimated quantity of the corresponding services. The estimated quantity of the corresponding services was arrived at after taking into account the historical usage of the relevant utilities and the future demand of the utilities as derived from the expected production plan. Meanwhile, we note that the estimated price per unit of the utilities adopted in the list of estimate was primarily based on the recent historical transactions. We also note that the actual aggregate expenses on utility of the Changchung Group and Changchun Jincheng for the year ended 31 December 2010 would have surpassed the current annual cap of HK$124.3 million by more than 50%.

Moreover, the level of the historical usage and expected usage of water would remain relatively stable whereas the level of usage of electricity, steam and wastewater treatment services is directly proportional to the level of production. However, we were advised by the Company that there is no fixed relationship between the level of usage of electricity, steam and wastewater treatment services and the level of production. In addition, we have obtained the aggregate utilities cost of the Changchun Group together with Changchun Jincheng for the eight months ended 31 August 2011 of approximately RMB122.8 million (equivalent to approximately HK$147.4 million) which represents approximately 55% of the Revised Cap for the year ending 31 December 2011. Meanwhile, we were advised by the Company that the production scale has been increasing over the last few years and is expected to continue to grow in near future, we are of the view that the magnitude of increment in the level of usage of electricity, steam and wastewater treatment services is acceptable when compared with the growth rate in turnover of the Group over the last few years. We also note that the Company has assumed a 15% annual increase in the market price for each utilities cost to allow buffers between the actual utilities costs and the Revised Caps.

On the above basis, we consider that the bases on which the Revised Caps were determined are fair and reasonable and in the interests of the Shareholders and the Company as a whole.

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LETTER FROM PARTNERS CAPITAL

3. The conditions

As the respective relevant Revised Caps will exceed HK$10 million and the relevant applicable ratios under Rule 14.07 of the Listing Rules exceed 5%, the Revised Caps of the Continuing Connected Transactions are subject to reporting, announcement, and the requirement of seeking approval from the Independent Shareholders under the Listing Rules.

The Company will therefore seek the approval by the Independent Shareholders of the Continuing Connected Transactions and the relevant Revised Caps subject to the following conditions:

The Continuing Connected Transactions will be:
(i) entered into by the Group in the ordinary and usual course of its business;
(ii) conducted on normal commercial terms or, if there are no sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to the Company than terms available to or from independent third parties; and
(iii) entered into in accordance with the terms of the relevant framework agreements and comprehensive services agreement governing the Continuing Connected Transactions that are fair and reasonable and in the interests of the Shareholders of the Company as a whole;
The transacted amount of the transactions under the Continuing Connected Transactions shall not exceed the Revised Caps;
The Company will comply with all other relevant requirements under the Listing Rules.

Taking into account the conditions attached to the Continuing Connected Transactions, in particular (i) the restriction by way of setting the Revised Caps; and (ii) the compliance with all other relevant requirements under the Listing Rules (which include the annual review and/or confirmation by the independent non-executive Directors and auditors of the Company on the actual execution of the Continuing Connected Transactions), we consider that the Company has taken appropriate measures to govern the Group in carrying out the Continuing Connected Transactions, thereby safeguarding the interests of the Shareholders thereunder.

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LETTER FROM PARTNERS CAPITAL

Recommendation

Having considered the above principal factors, we are of the opinion that the terms of the Continuing Connected Transactions and the Revised Caps are on normal commercial terms, in the ordinary course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders, and we advise the Independent Shareholders, to vote in favour of the ordinary resolutions to be proposed at the EGM for approving the terms of the Continuing Connected Transactions and the relevant Revised Caps.

Yours faithfully, For and on behalf of Partners Capital International Limited Alan Fung

Managing Director

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE YEARS FINANCIAL INFORMATION

Financial information of the Group for each of the three years ended 31 December 2010, 2009 and 2008 are disclosed on pages 37 to 102 of annual report 2010 of the Company, pages 39 to 108 of annual report 2009 of the Company and pages 38 to 94 of annual report 2008 of the Company respectively, which are published on the websites of the Stock Exchange (www.hkexnews.hk) and that of the Company (www. global-sweeteners.com).

2. INDEBTEDNESS STATEMENT

At the close of business on 31 July 2011, being the latest practicable date for the purpose of ascertaining certain information relating to this indebtedness statement prior to the printing of this circular, the Enlarged Group had bank borrowings of approximately HK$1,657 million, which were all unsecured short-term bank loans. Save as disclosed above and apart from intra-group liabilities, the Enlarged Group did not have, at the close of business on 31 July 2011, any outstanding debt securities and term loans, other borrowings or indebtedness in the nature of borrowing of the Group including bank overdrafts and liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, mortgages, charges, contingent liabilities or guarantees.

The Directors have confirmed that there has been no material change in the indebtedness and contingent liabilities of the Enlarged Group since 31 July 2011 and up to the Latest Practicable Date.

3. WORKING CAPITAL

Taking into account the internal resources available to the Enlarged Group, the Directors, after due and careful inquiry, are of the opinion that the Enlarged Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the Group’s financial or trading position since 31 December 2010, the date to which the latest published audited consolidated accounts of the Group were made up.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECTS OF THE ENLARGED GROUP

Changchun Jincheng has been the feedstock of the Group’s sweeteners operation in Changchun, supplying corn starch as the raw material of the Group’s production. After the Completion, the production site of the Group in Changchun would benefit from vertical integration. The gross profit margins of the Group’s downstream products will be improved after consolidation of the upstream’s gross profit. The revenue of the Group will also increase as a result of the sales of Co-products. On the other hand, the connected transactions between the Group and the GBT Group will be reduced.

With respect to raw material price fluctuation, the Group will be in a better position to control its raw material cost through the procurement of corn kernels during harvest season, instead of purchasing corn starch slurry at market price.

The acquisition of Changchun Jincheng will enable the Group to have higher flexibility in adjusting the production flow and product mix for its upstream and downstream products in response to market changes.

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ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

APPENDIX II

==> picture [115 x 51] intentionally omitted <==

18/F, Two International Finance Centre 8 Finance Street, Central Hong Kong

26 September 2011

The Directors Global Sweeteners Holdings Limited

Dear Sirs,

We set out below our report on the financial information of Changchun Jincheng Corn Development Co., Ltd. (hereinafter referred to as “Changchun Jincheng”) comprising the statements of comprehensive income, statements of changes in equity and statements of cash flows of Changchun Jincheng for each of the years ended 31 December 2008, 2009, 2010, and the six months ended 30 June 2011 (the “Relevant Periods”), and the statements of financial position of Changchun Jincheng as at 31 December 2008, 2009 and 2010 and 30 June 2011, together with the notes thereto (the “Financial Information”), and the comparative statement of comprehensive income, statement of changes in equity and statement of cash flows of Changchun Jincheng for the six months ended 30 June 2010 (the “Interim Comparative Information”), prepared on the basis of presentation set out in note 2.1 of Section II below, for inclusion in the circular of Global Sweeteners Holdings Limited (the “Company”) dated 26 September 2011 (the “Circular”) in connection with the proposed acquisition of Changchun Jincheng by the Company.

Changchun Jincheng is a foreign invested enterprise established in the People’s Republic of China (the “PRC”) on 27 March 2001 with its principal activity being the manufacture and sale of corn starch. Changchun Jincheng has adopted 31 December as its financial year end for statutory financial reporting purposes.

The audited financial statements of Changchun Jincheng for the Relevant Periods, which were prepared in accordance with accounting principles generally accepted in the PRC, were audited by 吉林聖祥茗達會計師事務有限公司 (Jilin Sheng Xiang Ming Da Certified Public Accountants), certified public accountants registered in the PRC.

For the purpose of this report, the directors of Changchun Jincheng (the “Directors”) have prepared the financial statements of Changchun Jincheng (the “Underlying Financial Statements”) in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”), which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). The Underlying Financial Statements for each of the years ended 31 December 2008, 2009 and 2010,and the six months ended 30 June 2011 were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Financial Information set out in this report has been prepared from the Underlying Financial Statements with no adjustments made thereon.

Directors’ responsibility

The Directors are responsible for the preparation of the Underlying Financial Statements and the Interim Comparative Information that give a true and fair view in accordance with HKFRSs, and for such internal control as the Directors determine is necessary to enable the preparation of the Underlying Financial Statements and the Interim Comparative Information that are free from material misstatement, whether due to fraud or error.

Reporting accountants’ responsibility

It is our responsibility to form an independent opinion and a review conclusion on the Financial Information and the Interim Comparative Information, respectively, and to report our opinion and review conclusion thereon to you.

For the purpose of this report, we have examined the Underlying Financial Statements and have carried out procedures on the Financial Information in accordance with Auditing Guideline 3. 340 Prospectuses and the Reporting Accountant issued by the HKICPA.

We have also performed a review of the Interim Comparative Information in accordance with Hong Kong Standard on Review Engagement 2410 Review of Interim Financial Information performed by the Independent Auditor of the Entity issued by the HKICPA. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets and liabilities and transactions. It is substantially less in scope than an audit and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an opinion on the Interim Comparative Information.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Opinion in respect of the Financial Information

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of Changchun Jincheng as at 31 December 2008, 2009 and 2010 and 30 June 2011 and of the results and cash flows of Changchun Jincheng for each of the Relevant Periods.

Review conclusion in respect of the Interim Comparative Information

Based on our review which does not constitute an audit, for the purpose of this report, nothing has come to our attention that causes us to believe that the Interim Comparative Information is not prepared, in all material respects, in accordance with the same basis adopted in respect of the Financial Information.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

I. FINANCIAL INFORMATION

Statements of comprehensive income

Notes REVENUE 6 Cost of sales Gross profit Other income and gains 6 Selling and distribution costs Administrative expenses Other expenses Finance costs 8 PROFIT/(LOSS) BEFORE TAX 7 Income tax expense 11 PROFIT/(LOSS) FOR THE YEAR/PERIOD OTHER COMPREHENSIVE INCOME/(LOSS) Loss on property revaluation Income tax effect TOTAL COMPREHENSIVE INCOME FOR THE YEAR/PERIOD	Year ended 31 December 2008 2009 2010 *RMB’000* *RMB’000* *RMB’000* 1,095,465 1,050,189 1,153,934 (986,437) (922,645) (1,043,873) 109,028 127,544 110,061 6,244 4,656 13,356 (41,262) (25,225) (31,012) (14,825) (11,499) (12,052) 1,825 — — (64,150) (52,513) (38,481) (3,140) 42,963 41,872 (722) (7,030) (8,341) (3,862) 35,933 33,531 — (8,065) — — 2,016 — — (6,049) — (3,862) 29,884 33,531	Six months ended 30 June 2010 2011 *RMB’000* *RMB’000* (unaudited) 512,232 699,101 (458,360) (619,313) 53,872 79,788 10,319 6,019 (12,154) (25,173) (5,142) (5,956) — (3,928) (20,341) (21,190) 26,554 29,560 (5,897) (6,041) 20,657 23,519 — — — — — — 20,657 23,519

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Statements of financial position

Notes NON-CURRENT ASSETS Property, plant and equipment 12 Prepaid land lease payments 13 Deferred tax assets 21 Total non-current assets CURRENT ASSETS Inventories 14 Trade and bills receivables 15 Prepayments, deposits and other receivables 16 Due from fellow subsidiaries 26 Cash and cash equivalents 17 Total current assets CURRENT LIABILITIES Interest-bearing bank borrowings 20 Trade and bills payables 18 Other payables and accruals 19 Tax payable Due to the immediate holding company 26 Due to fellow subsidiaries 26 Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest-bearing bank borrowings 20 Deferred tax liabilities 21 Deferred income 22 Total non-current liabilities Net assets EQUITY Issued capital 23 Reserves 24 Total equity	31 December 2008 2009 *RMB’000* *RMB’000* 337,098 304,345 40,326 39,073 — — 377,424 343,418 193,923 400,527 8,447 19,011 3,753 135,847 1,587,772 1,471,567 268,650 87,063 2,062,545 2,114,015 519,000 678,500 13,215 19,025 16,265 21,027 (2,460) 7,484 105,053 105,053 1,277,024 1,274,965 1,928,097 2,106,054 134,448 7,961 511,872 351,379 318,500 129,000 9,737 8,860 — — 328,237 137,860 183,635 213,519 98,700 98,700 84,935 114,819 183,635 213,519	2010 *RMB’000* 281,777 36,541 1,518 319,836 494,495 36,931 90,919 1,119,909 140,911 1,883,165 459,000 6,516 26,954 11,980 105,053 1,066,887 1,676,390 206,775 526,611 268,500 10,086 975 279,561 247,050 98,700 148,350 247,050	30 June 2011 *RMB’000* 269,755 35,949 1,314
			307,018
			566,825 119,572 15,572 1,039,303 59,063
			1,800,335
			419,000 68,788 11,046 14,494 105,053 938,383
			1,556,764
			243,571
			550,589
			268,500 10,595 925
			280,020
			270,569

			98,700 171,869
			270,569

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Statements of changes in equity

Attributable to equity holders of Changchun Jincheng	Attributable to equity holders of Changchun Jincheng	Attributable to equity holders of Changchun Jincheng	Attributable to equity holders of Changchun Jincheng
Issued capital *RMB’000* 98,700 — — 98,700 — — — 98,700 — 98,700 — 98,700 98,700 — 98,700	Statutory reserve Asset revaluation reserve *RMB’000* *RMB’000* 2,303 13,681 — — — — 2,303 13,681 — — — (6,049) — (6,049) 2,303 7,632 — — 2,303 7,632 — — 2,303 7,632 2,303 7,632 — — 2,303 7,632	Retained profits *RMB’000* 161,702 (3,862) (88,889) 68,951 35,933 — 35,933 104,884 33,531 138,415 23,519 161,934 104,884 20,657 125,541	Total *RMB’000* 276,386 (3,862) (88,889)
			183,635 35,933 (6,049)
			29,884
			213,519 33,531
			247,050 23,519
			270,569

			213,519 20,657
			234,176

These reserve accounts comprise the reserves of Changchun Jincheng of RMB84,935,000, RMB114,819,000, RMB148,350,000 and RMB171,869,000 on the statements of financial position at 31 December 2008, 2009, 2010 and 30 June 2011, respectively.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Statements of cash flows

Notes CASH FLOWS FROM OPERATING ACTIVITIES Profit/(loss) before tax Adjustments for: Finance costs 8 Interest income 6 Depreciation 12 Write-down of inventories to net realisable value Amortisation of prepaid land lease payments 13 Impairment/(reversal of impairment) of trade and bills receivables, net 15 Increase in inventories Decrease/(increase) in trade and bills receivables Decrease/(increase) in prepayments, deposits and other receivables Increase/(decrease) in trade payables Increase/(decrease) in other payables and accruals Decrease/(increase) in amounts due from fellow subsidiaries Increase/(decrease) in amounts due to fellow subsidiaries Cash generated from/(used in) operations Interest received PRC tax received/(paid) Net cash flows from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payment of land premiums Increase/(decrease) in deferred income Purchases of items of property, plant and equipment Proceeds from disposal of items of property, plant and equipment Net cash flows used in investing activities	Year ended 31 December 2008 2009 2010 *RMB’000* *RMB’000* *RMB’000* (3,140) 42,963 41,872 64,150 52,513 38,481 (1,788) (283) (130) 26,946 26,194 25,680 1,252 — 6,325 1,181 1,217 1,200 (1,825) (136) — 86,776 122,468 113,428 (9,657) (206,604) (100,293) 41,440 (10,428) (17,920) 55,758 (132,058) 33,526 (7,529) 5,810 (12,509) (15,712) 4,762 17,312 49,625 60,625 (23,505) (148,606) (55,107) (193,928) 52,095 (210,532) (183,889) 1,788 283 130 (7,409) 4,053 (4,137) 46,474 (206,196) (187,896) (2,869) — — — — 975 (5,261) (1,506) (1,763) 882 — — (7,248) (1,506) (788)	Six months ended 30 June 2010 2011 *RMB’000* *RMB’000* (unaudited) 26,554 29,560 20,341 21,190 (70) (70) 12,777 12,991 3,731 1,548 592 592 — 3,928 63,925 69,739 ( 93,502) (73,878) (54,005) (86,569) 5,426 75,027 (10,543) 62,272 17,624 (15,588) 571,399 (78,004) (337,796) 142,194 162,528 95,193 70 70 (4,137) (2,814) 158,461 92,449 — — — (50) (271) (1,612) — 643 (271) (1,019)	Six months ended 30 June 2010 2011 *RMB’000* *RMB’000* (unaudited) 26,554 29,560 20,341 21,190 (70) (70) 12,777 12,991 3,731 1,548 592 592 — 3,928 63,925 69,739 ( 93,502) (73,878) (54,005) (86,569) 5,426 75,027 (10,543) 62,272 17,624 (15,588) 571,399 (78,004) (337,796) 142,194 162,528 95,193 70 70 (4,137) (2,814) 158,461 92,449 — — — (50) (271) (1,612) — 643 (271) (1,019)
			69,739 (73,878) (86,569) 75,027 62,272 (15,588) (78,004) 142,194
			95,193 70 (2,814)
			92,449
			— (50) (1,612) 643
			(1,019)

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ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

APPENDIX II

CASH FLOWS FROM FINANCING ACTIVITIES Decrease in an amount due to the ultimate holding company Increase/(decrease) in amounts due to fellow subsidiaries Decrease/(increase) in amounts due from fellow subsidiaries New bank borrowings Repayment of bank borrowings Interest paid Dividends paid Net cash flows from/(used in) financing activities NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year/period CASH AND CASH EQUIVALENTS AT END OF YEAR/PERIOD ANALYSIS OF BALANCE OF CASH AND CASH EQUIVALENTS Cash and cash equivalents as stated in the statements of financial position	Year ended 31 December 2008 2009 2010 *RMB’000* *RMB’000* *RMB’000* (3,296) — — 378,016 53,048 (14,150) (334,196) 55,580 375,163 268,500 489,000 598,500 (270,000) (519,000) (678,500) (64,150) (52,513) (38,481) (88,889) — — (114,015) 26,115 242,532 (74,789) (181,587) 53,848 343,439 268,650 87,063 268,650 87,063 140,911 268,650 87,063 140,911	Six months ended 30 June 2010 2011 *RMB’000* *RMB’000* (unaudited) — — 255,020 (270,698) — 158,610 — — (80,000) (40,000) (20,341) (21,190) — — 154,679 (173,278) 312,869 (81,848) 87,063 140,911 399,932 59,063 399,932 59,063

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

II. NOTES TO THE FINANCIAL INFORMATION

1 Corporate information

Changchun Jincheng is a foreign invested enterprise established in the PRC on 27 March 2001 with its principal activity being the manufacture and sale of corn starch. The principal place of operation of Changchun Jincheng is located at No. 1588, Xihuan Road, Economy & Technology Development District, Changchun, Jilin Province, the PRC.

As at the date of this report, the immediate holding company of Changchun Jincheng is Global Corn Investments Limited, a company incorporated in the British Virgin Islands. In the opinion of the directors of Changchun Jincheng, Global Bio-chem Technology Group Company Limited, a company incorporated in the Cayman Islands whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), is the ultimate holding company.

2.1 Basis of preparation

The Financial Information has been prepared in accordance with HKFRSs (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the HKICPA, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange.

The HKICPA has issued a number of new and revised HKFRSs that are effective for the Changchun Jincheng’s annual periods beginning on or after 1 January 2008. For the purpose of preparing and presenting the Financial Information, Changchun Jincheng has early adopted all these new and revised HKFRSs that are relevant to Changchun Jincheng’s operations as at the beginning of the Relevant Periods, except for those new and revised HKFRSs that are not yet effective for any of the Relevant Periods as further explained in note 2.2 below.

The Financial Information has been prepared under the historical cost convention, except for certain property, plant and equipment which have been measured at fair value as further explained below, and is presented in Renminbi (“RMB”) and all values are rounded to the nearest thousand except when otherwise indicated.

2.2 Issued but not yet effective HKFRSs

Changchun Jincheng has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these Financial Information.

HKAS 1 (Revised)	Presentation of Financial Statements	3
HKAS 12 Amendments	Amendments to HKAS 12 Income Taxes — Deferred Tax:
	Recovery of Underlying Assets 2
HKAS 19 (2011)	Employee Benefits 4
HKAS 27 (2011)	Separate Financial Statements 4
HKAS 28 (2011)	Investments in Associates and Joint	Ventures		4
HKFRS 1 Amendments	Amendments to HKFRS 1 First-time Adoption of HKFRSs —
	Severe Hyperinflation and Removal of Fixed Dates for First-time
	Adopters 1
HKFRS 7 Amendments	Amendments to HKFRS 7 Financial	Instruments: Disclosures-
	Transfers of Financial Assets 1
HKFRS 9	Financial Instruments 4
HKFRS 10	Consolidated Financial Statements 4
HKFRS 11	Joint Arrangements 4
HKFRS 12	Disclosure of Interest in Other Entities		4
HKFRS 13	Fair Value Measurement 4

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

1 Effective for annual periods beginning on or after 1 July 2011

2 Effective for annual periods beginning on or after 1 January 2012

3 Effective for annual periods beginning on or after 1 July 2012

4 Effective for annual periods beginning on or after 1 January 2013

Changchun Jincheng is in the process of making an assessment of the impact of these new and revised HKFRSs upon initial application. So far, Changchun Jincheng has concluded that the application of these standards or interpretations will have no material impact on the results and the financial position of the Company.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Impairment of non-financial assets

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than inventories, biological assets, financial assets and goodwill), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs to sell, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

An assessment is made at the end of each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation/amortisation) had no impairment loss been recognised for the asset in prior years. A reversal of such an impairment loss is credited to profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

Related parties

A party is considered to be related to Changchun Jincheng if:

(a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, Changchun Jincheng; (ii) has an interest in Changchun Jincheng that gives it significant influence over Changchun Jincheng; or (iii) has joint control over Changchun Jincheng;
(b) the party is an associate;
(c) the party is a jointly-controlled entity;
(d) the party is a member of the key management personnel of Changchun Jincheng or its holding companies;

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

(e) the party is a close member of the family of any individual referred to in (a) or (d);
(f) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
(g) the party is a post-employment benefit plan for the benefit of the employees of Changchun Jincheng, or of any entity that is a related party of Changchun Jincheng.

Property, plant and equipment and depreciation

Property, plant and equipment, other than construction in progress, are stated at cost or valuation less accumulated depreciation and any impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to profit or loss in the period in which it is incurred. In situations where the recognition criteria are satisfied, the expenditure for a major inspection is capitalised in the carrying amount of the asset as a replacement. Where significant parts of property, plant and equipment are required to be replaced at intervals, Changchun Jincheng recognises such parts as individual assets with specific useful lives and depreciation.

Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Changes in the values of property are dealt with as movements in the asset revaluation reserve. If the total of this reserve is insufficient to cover a deficit, on an individual asset basis, the excess of the deficit is charged to the statement of comprehensive income. Any subsequent revaluation surplus is credited to the statement of comprehensive income to the extent of the deficit previously charged. An annual transfer from the asset revaluation reserve to retained profits is made for the difference between the depreciation based on the revalued carrying amount of an asset and the depreciation based on the asset’s original cost. On disposal of a revalued asset, the relevant portion of the asset revaluation reserve realised in respect of previous valuations is transferred to retained profits as a movement in reserves.

Depreciation is calculated on the straight-line basis to write off the cost or valuation of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows:

Leasehold buildings	2.5%
Plant and machinery	6.7%
Leasehold improvements, furniture, office
equipment and motor vehicles	20%

Where parts of an item of property, plant and equipment have different useful lives, the cost or valuation of that item is allocated on a reasonable basis among the parts and each part is depreciated separately.

Residual values, useful lives and the depreciation method are reviewed, and adjusted if appropriate, at least at each financial year end.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the year the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Construction in progress represents plant under construction, which is stated at cost less any impairment losses, and is not depreciated. Cost comprises the direct costs of construction and capitalised borrowing costs on related borrowed funds during the period of construction. Construction in progress is reclassified to the appropriate category of property, plant and equipment when completed and ready for use.

Operating leases

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where Changchun Jincheng is the lessee, rentals payable under the operating leases are charged to profit or loss on the straight-line basis over the lease terms.

Prepaid land lease payments under operating leases are initially stated at cost and subsequently recognised on the straight-line basis over the lease terms.

Investments and other financial assets

Initial recognition and measurement

Financial assets within the scope of HKAS 39 are classified as loans and receivables and available-for-sale financial assets. Changchun Jincheng determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that Changchun Jincheng commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

Changchun Jincheng’s financial assets include trade and bills receivables, financial assets included in prepayments, deposits and other receivables, amounts due from fellow subsidiaries, and cash and cash equivalents.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortised cost using the effective interest rate method less any allowance for impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance income in profit or loss. The loss arising from impairment is recognised in profit or loss in other operating expenses.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired; or
Changchun Jincheng has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) Changchun Jincheng has transferred substantially all the risks and rewards of the asset, or (b) Changchun Jincheng has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When Changchun Jincheng has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of Changchun Jincheng’s continuing involvement in the asset. In that case, Changchun Jincheng also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Changchun Jincheng has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that Changchun Jincheng could be required to repay.

Impairment of financial assets

Changchun Jincheng assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or Changchun Jincheng of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost

For financial assets carried at amortised cost, Changchun Jincheng first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If Changchun Jincheng determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced either directly or through the use of an allowance account and the amount of the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to Changchun Jincheng.

If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to other operating expenses in profit or loss.

Financial liabilities

Initial recognition and measurement

Financial liabilities within the scope of HKAS 39 are classified as loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. Changchun Jincheng determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs.

Changchun Jincheng’s financial liabilities include interest-bearing bank borrowings, trade and bills payables, financial liabilities included in other payables and accruals, an amount due to the immediate holding company and amounts due to fellow subsidiaries.

Subsequent measurement

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost, using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate method amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit or loss.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognised in profit or loss.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis and, in the case of work in progress and finished goods, comprises direct materials, direct labour and an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less any estimated costs to be incurred to completion and disposal.

Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of Changchun Jincheng’s cash management.

For the purpose of the statement of financial position, cash and cash equivalents comprise cash on hand and at banks, including term deposits, and assets similar in nature to cash, which are not restricted as to use.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in finance costs in profit or loss.

Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognised outside profit or loss is recognised outside profit or loss, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which Changchun Jincheng operates.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

where the deferred tax liability arises from goodwill or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries and joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carryforward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilised, except:

where the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries and joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to profit or loss over the expected useful life of the relevant asset by equal annual installments.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Revenue recognition

Revenue is recognised when it is probable that the economic benefits will flow to Changchun Jincheng and when the revenue can be measured reliably, on the following bases:

(a) from the sale of goods, when the significant risks and rewards of ownership have been transferred to the buyer, provided that Changchun Jincheng maintains neither managerial involvement to the degree usually associated with ownership, nor effective control over the goods sold; and
(b) interest income, on an accrual basis using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Other employee benefits

Pension scheme

The employees of Changchun Jincheng are required to participate in the retirement benefit schemes (the “PRC RB Schemes”) operated by the local municipal government. Changchun Jincheng is required to contribute a certain percentage of their payroll costs to the PRC RB Schemes to fund the benefits. The only obligation of Changchun Jincheng with respect to the PRC RB Schemes is to pay the ongoing required contributions under the PRC RB Schemes. Contributions under the PRC RB Schemes are charged to profit or loss as they become payable in accordance with the rules of the PRC RB Schemes.

Early retirement benefits

Termination benefits are payable whenever an employee’s employment is terminated involuntarily before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for the benefits. Changchun Jincheng recognises the liability for termination benefits when it is demonstrably committed to terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that is, assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. The capitalisation rate is based on the actual cost of the related borrowings. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Dividends

Final dividends proposed by the directors are classified as a separate allocation of retained profits within the equity section of the statement of financial position, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Foreign currencies

The financial statements are presented in RMB, which is Changchun Jincheng’s functional and presentation currency. Foreign currency transactions are initially recorded using the functional currency rates ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rates of exchange ruling at the end of the reporting period. All differences are taken to profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of Changchun Jincheng’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of each reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgements

In the process of applying Changchun Jincheng’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial information:

Tax

Determining income tax provisions requires Changchun Jincheng to make judgements on the future tax treatment of certain transactions. Changchun Jincheng carefully evaluates tax implications of transactions in accordance with prevailing tax regulations and makes tax provisions accordingly. In addition, deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. This requires significant judgement on the tax treatments of certain transactions and also assessment on the probability that adequate future taxable profits will be available for the deferred tax assets to be recovered.

Estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, 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.

Impairment of trade and other receivables

The provision policy for doubtful debts of Changchun Jincheng is based on the ongoing evaluation of the collectability and ageing analysis of the outstanding receivables and on the management’s judgement. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including creditworthiness and the past collection history of each customer. If the financial conditions of the customers of Changchun Jincheng were to deteriorate, resulting in an impairment of their ability to make payments, an additional impairment may be required.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

Estimation of fair value of leasehold buildings

In the absence of the current prices in an active market for similar properties, Changchun Jincheng considers information by reference to the valuation performed by an independent valuer based on the open market value basis.

Provision for obsolete inventories

Management reviews the ageing analysis of inventories of Changchun Jincheng at the end of each reporting period, and makes a provision for obsolete and slow moving inventory items. Management estimates the net realisable value for such inventories based primarily on the latest invoice prices and current market conditions. As at 31 December 2008, 2009 and 2010 and 30 June 2011, the carrying amounts of inventories were approximately RMB193,923,000, RMB400,527,000, RMB494,495,000 and RMB566,825,000 after netting off the allowance for inventories of approximately RMB1,910,000, nil, RMB6,325,000 and RMB1,548,000, respectively.

Impairment of property, plant and equipment

Changchun Jincheng assesses at each reporting date whether there is an indication that property, plant and equipment may be impaired. If any such indication exists, Changchun Jincheng makes an estimate of the recoverable amount of property, plant and equipment. This requires an estimation of the value in use of property, plant and equipment. Estimating the value in use requires Changchun Jincheng to make an estimate of the expected future cash flows from property, plant and equipment and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amounts of property, plant and equipment as at 31 December 2008, 2009 and 2010 and 30 June 2011 were RMB337,098,000, RMB304,345,000, RMB281,777,000 and RMB269,755,000, respectively. Further details are given in note 12.

5. OPERATING SEGMENT INFORMATION

Over 99% of Changchun Jincheng’s operations related to the manufacture and sale of corn starch and relevant by-products and over 85% of Changchun Jincheng’s products are sold to customers based in Mainland China. Accordingly, no segment information has been disclosed.

Information about a major customer

Revenue of approximately RMB732,996,000, RMB710,412,000, RMB721,190,000 for the years ended 31 December 2008, 2009 and 2010, and RMB374,576,000 and RMB385,851,000 for the six months ended 30 June 2010 and 2011, respectively, were derived from sales of corn starch and relevant by-products to group companies of the ultimate holding company.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

6. REVENUE, OTHER INCOME AND GAINS

Revenue, which is also Changchun Jincheng’s turnover, represents the net invoiced value of goods supplied after allowances for returns and trade discounts.

An analysis of revenue and other income and gains is as follows:

Revenue Sales of goods Other income and gains Bank interest income Government grant* Net profit arising from the sales of packing materials and by- products Exchange gain Others	Year ended 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 1,095,465 1,050,189 1,153,934 1,788 283 130 — 489 7,983 4,444 3,847 5,277 — — — 12 37 (34) 6,244 4,656 13,356	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 512,232 699,101 70 70 7,983 — 2,262 1,354 — 4,595 4 — 10,319 6,019	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 512,232 699,101 70 70 7,983 — 2,262 1,354 — 4,595 4 — 10,319 6,019

			70 — 1,354 4,595 —
			6,019

Government grants during the Relevant Periods mainly represented the compensation for use of land owned by Changchun Jincheng.

7. PROFIT/(LOSS) BEFORE TAX

Changchun Jincheng’s profit/(loss) before tax is arrived at after charging/(crediting):

					Six months ended	Six months ended
		Year	ended 31 December		30 June
		2008	2009	2010	2010	2011
	Notes	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
					(unaudited)
Raw materials and
consumables used		831,062	771,517	893,745	389,533	530,815
Write-down of
inventories to net
realisable value #		1,252	—	6,325	3,731	1,548
Depreciation	12	26,946	26,194	25,680	12,777	12,991
Amortisation of prepaid
land lease payments	13	1,181	1,217	1,200	592	592
Impairment (reversal of
impairment) of trade
and bills receivables,
net	15	(1,825)	(136)	—	—	3,928
Auditors’ remuneration		119	300	317	—	—
Employee benefit
expense:
Wages and salaries		7,132	5,061	5,802	2,993	3,455
Pension scheme
contributions		1,412	1,108	1,027	572	600

Included in “Cost of sales” in the statements of comprehensive income.

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APPENDIX II ACCOUNTANTS’ REPORT OF CHANGCHUN JINCHENG

8. FINANCE COSTS

An analysis of finance costs is as follows:

Interest on bank loans Finance costs for discounted bills receivable	Year ended 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 62,023 50,636 37,440 2,127 1,877 1,041 64,150 52,513 38,481	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 20,074 21,190 267 — 20,341 21,190	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 20,074 21,190 267 — 20,341 21,190
			21,190

9. DIRECTORS’ REMUNERATION

No director received any fees or emoluments in respect of their services rendered to the Company during the Relevant Periods and the six months ended 30 June 2010.

10. FIVE HIGHEST PAID EMPLOYEES

None of the five highest paid employees of Changchun Jincheng during the Relevant Periods and the six months ended 30 June 2010 were directors. Details of the remuneration of the five highest paid employees for the Relevant Periods and the six months ended 30 June 2010 are as follows:

Salaries, allowances and benefits in kind Performance-related bonuses Pension scheme contributions	Year ended 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 113 113 130 70 81 91 33 42 48 216 236 269	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 65 67 45 47 24 32 134 146	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 65 67 45 47 24 32 134 146
			146

The remuneration for the year of the non-director, highest paid employees fell within the following bands during the Relevant Periods and the six months ended 30 June 2010 is as follows:

Number of employees

				Six months ended	Six months ended
	Year ended	31 December		30 June
	2008	2009	2010	2010	2011
				(unaudited)
Nil to RMB1,000,000	5	5	5	5	5

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APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

11. INCOME TAX

The 5th Session of the 10th National People’s Congress approved the Corporate Income Tax Law of the PRC (the “New Corporate Income Tax Law”) on 16 March 2007 and the State Council announced the Detailed Implementation Regulations on 26 December 2007, which became effective from 1 January 2008. According to the New Corporate Income Tax Law, the income tax rates for both domestic and foreign investment enterprises were unified at 25% effective from 1 January 2008. However, Changchun Jincheng, a foreign invested enterprise located in the Economic and Technology Development District which began its business before the implementation of the new CIT regulation, is entitled to adopt the new tax rate gradually as follows: 2008, 18%; 2009, 20%; 2010, 22%; 2011, 24%; 2012, 25%.

The major components of income tax expenses for the Relevant Periods and the six months ended 30 June 2011 are as follows:

Current — Charge for the year/period Overprovision in prior years Deferred_(note 21)_ Total tax charge for the year/period	Year ended 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 — 7,480 8,633 — (1,589) — 722 1,139 (292) 722 7,030 8,341	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 5,842 5,328 — — 55 713 5,897 6,041	Six months ended 30 June 2010 2011 RMB’000 RMB’000 (unaudited) 5,842 5,328 — — 55 713 5,897 6,041
			6,041

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APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

A reconciliation of the income tax charge applicable to profit/(loss) before tax using the statutory rate for the jurisdictions in which Changchun Jincheng is domiciled to the income tax charge at the effective tax rate and a reconciliation of the applicable rates (i.e., the statutory tax rates) to the effective tax rates are as follows:

2008 RMB’000 Profit/(loss) before tax (3,140) Tax at the statutory tax rate (785) Preferential tax rate offered for foreign invested company 220 Adjustments in respect of current tax of previous periods — Income not subject to tax — Expenses not deductible for tax 85 Tax losses not recognised 1,202 Tax charge at the effective rate 722 Profit before tax Tax at the statutory tax rate Preferential tax rate offered for foreign invested company Income not subject to tax Expenses not deductible for tax Tax charge at the effective rate	Year ended 31 December 2009 2010 % RMB’000 % RMB’000 42,963 41,872 25.0 10,741 25.0 10,468 (7.0) (2,148) (5.0) (1,256) — (1,589) (3.7) — — — — (928) (2.7) 26 0.1 57 (38.3) — — — (23.0) 7,030 16.4 8,341 Six months ended 30 June 2010 2011 RMB’000 % RMB’000 (unaudited) 26,554 29,560 6,639 25.0 7,390 (797) (3.0) (296) — — (1,143) 55 0.2 90 5,897 22.2 6,041		% 25.0 (3.0) — (2.2) 0.1 — 19.9 % 25.0 (1.0) (3.9) 0.3 20.4

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APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

12. PROPERTY, PLANT AND EQUIPMENT

31 December 2008 At 1 January 2008: Cost or valuation Accumulated depreciation Net carrying amount At 1 January 2008, net of accumulated depreciation Additions Transfers Disposals Depreciation provided during the year At 31 December 2008, net of accumulated depreciation At 31 December 2008: Cost or valuation Accumulated depreciation Net carrying amount Analysis of cost or valuation: At cost At 31 December 2007 valuation	Leasehold buildings RMB’000 151,267 (18,118) 133,149 133,149 4,772 2,039 — (4,030) 135,930 158,078 (22,148) 135,930 6,811 151,267 158,078	Plant and machinery Leasehold improvements, furniture, office equipment and motor vehicles RMB’000 RMB’000 328,895 5,119 (108,377) (4,084) 220,518 1,035 220,518 1,035 — 489 2,351 — (820) — (21,806) (1,110) 200,243 414 330,426 5,608 (130,183) (5,194) 200,243 414 330,426 5,608 — — 330,426 5,608	Construction in progress RMB’000 4,963 — 4,963 4,963 — (4,390) (62) — 511 511 — 511 511 — 511	Total RMB’000 490,244 (130,579)
				359,665

				359,665 5,261 — (882) (26,946)
				337,098

				494,623 (157,525)
				337,098

				343,356 151,267
				494,623

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ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

APPENDIX II

31 December 2009 At 1 January 2009: Cost or valuation Accumulated depreciation Net carrying amount At 1 January 2009, net of accumulated depreciation Additions Depreciation provided during the year Deficit on revaluation At 31 December 2009, net of accumulated depreciation At 31 December 2009: Cost or valuation Accumulated depreciation Net carrying amount Analysis of cost or valuation: At cost At 31 December 2009 valuation	Leasehold buildings RMB’000 158,078 (22,148) 135,930 135,930 — (3,745) (8,065) 124,120 150,013 (25,893) 124,120 — 150,013 150,013	Plant and machinery Leasehold improvements, furniture, office equipment and motor vehicles RMB’000 RMB’000 330,426 5,608 (130,183) (5,194) 200,243 414 200,243 414 94 10 (22,035) (414) — — 178,302 10 330,520 5,618 (152,218) (5,608) 178,302 10 330,520 5,618 — — 330,520 5,618	Construction in progress RMB’000 511 — 511 511 1,402 — — 1,913 1,913 — 1,913 1,913 — 1,913	Total RMB’000 494,623 (157,525)
				337,098

				337,098 1,506 (26,194) (8,065)
				304,345

				488,064 (183,719)
				304,345

				338,051 150,013
				488,064

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ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

APPENDIX II

31 December 2010 At 1 January 2010: Cost or valuation Accumulated depreciation Net carrying amount At 1 January 2010, net of accumulated depreciation Additions Transfers Depreciation provided during the year At 31 December 2010, net of accumulated depreciation At 31 December 2010: Cost or valuation Accumulated depreciation Net carrying amount Analysis of cost or valuation: At cost At 31 December 2009 valuation	Leasehold buildings RMB’000 150,013 (25,893) 124,120 124,120 1,857 — (3,525) 122,452 151,870 (29,418) 122,452 1,857 150,013 151,870	Plant and machinery Leasehold improvements, furniture, office equipment and motor vehicles RMB’000 RMB’000 330,520 5,618 (152,218) (5,608) 178,302 10 178,302 10 128 963 1,619 — (22,093) (62) 157,956 911 332,267 5,881 (174,311) (4,970) 157,956 911 332,267 5,881 — — 332,267 5,881	Construction in progress RMB’000 1,913 — 1,913 1,913 164 (1,619) — 458 458 — 458 458 — 458	Total RMB’000 488,064 (183,719)
				304,345

				304,345 3,112 — (25,680)
				281,777

				490,476 (208,699)
				281,777

				340,463 150,013
				490,476

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ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

APPENDIX II

30 June 2011 At 1 January 2011 Cost or valuation Accumulated depreciation Net carrying amount At 1 January 2011, net of accumulated depreciation Additions Disposals Depreciation provided during the period At 30 June 2011, net of accumulated depreciation At 30 June 2011: Cost or valuation Accumulated depreciation Net carrying amount Analysis of cost or valuation: At cost At 30 June 2011 valuation	Leasehold buildings RMB’000 151,870 (29,418) 122,452 122,452 — (643) (1,769) 120,040 151,065 (31,025) 120,040 — 151,065 151,065	Plant and machinery Leasehold improvements, furniture, office equipment and motor vehicles RMB’000 RMB’000 332,267 5,881 (174,311) (4,970) 157,956 911 157,956 911 391 24 — — (11,083) (139) 147,264 796 332,658 5,905 (185,394) (5,109) 147,264 796 332,658 5,905 — — 332,658 5,905	Construction in progress RMB’000 458 — 458 458 1,197 — — 1,655 1,655 — 1,655 1,655 — 1,655	Total RMB’000 490,476 (208,699)
				281,777

				281,777 1,612 (643) (12,991)
				269,755

				491,283 (221,528)
				269,755

				340,218 151,065
				491,283

At 31 December 2009, Changchun Jincheng’s leasehold buildings were revalued on an open market value basis by Savills Valuation and Professional Services Limited, independent professionally qualified valuers, at approximately RMB124,120,000. A deficit on revaluation of approximately RMB8,065,809 arising from the 2009 valuation, net of deferred tax liabilities of RMB2,016,453, had been charged to the assets revaluation reserve during the year ended 31 December 2009. At 30 June 2011, Changchun Jincheng’s leasehold buildings were revalued on an open market value basis by Savills Valuation and Professional Services Limited, independent professionally qualified valuers, at approximately RMB120,040,000 and no gain or loss arose from the 2011 valuation.

In the opinion of the directors, there were no material differences between the carrying value and the open market value of Changchun Jincheng’s leasehold buildings as at 31 December 2008 and 31 December 2010 and, accordingly, no revaluation has been performed as at those dates.

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APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Had Changchun Jincheng’s leasehold buildings been carried at historical cost less accumulated depreciation, their carrying amounts would have been approximately RMB119,815,205, RMB116,314,282, RMB114,646,204 and RMB112,233,188, as at 31 December 2008, 2009 and 2010 and 30 June 2011, respectively.

13. PREPAID LAND LEASE PAYMENTS

Carrying amount at beginning of year/period Additions/disposals, at cost Amortisation provided during the year/period Carrying amount at at end of year/period Current portion included in prepayments, deposits and other receivables Non-current portion	31 December 2008 2009 RMB’000 RMB’000 39,819 41,507 2,869 — (1,181) (1,217) 41,507 40,290 (1,181) (1,217) 40,326 39,073	2010 RMB’000 40,290 (1,349) (1,200) 37,741 (1,200) 36,541	30 June 2011 RMB’000 37,741 — (592) 37,149 (1,200) 35,949

The leasehold land is situated in Mainland China and is held under a long term lease.

14. INVENTORIES

Raw materials Work in progress Finished goods _Less:_Inventory provision	31 December 2008 2009 RMB’000 RMB’000 161,169 384,508 6,395 7,917 28,269 8,102 195,833 400,527 (1,910) — 193,923 400,527	2010 RMB’000 455,000 10,914 34,906 500,820 (6,325) 494,495	30 June 2011 RMB’000 515,611 14,375 38,387 568,373 (1,548) 566,825

— 79 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

15. TRADE AND BILLS RECEIVABLES

Trade receivables Bills receivable _Less:_Impairment	31 December 2008 2009 RMB’000 RMB’000 389 15,081 8,194 3,930 8,583 19,011 (136) — 8,447 19,011	2010 RMB’000 36,049 882 36,931 — 36,931	30 June 2011 RMB’000 111,888 11,612
			123,500 (3,928)
			119,572

Bills receivable represent bank acceptance notes of Changchun Jincheng which are issued by major banks in Mainland China.

Changchun Jincheng’s trading terms with its customers are mainly on credit. The credit period is generally for a period of three months. Changchun Jincheng seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned, there is no significant concentration of credit risk. Trade and bills receivables are non-interest-bearing.

An aged analysis of the trade and bills receivables as at the end of each of the Relevant Periods, based on the invoice date and net of provisions, is as follows:

Within one month One to two months Two to three months Over three months	31 December 2008 2009 RMB’000 RMB’000 5,140 7,526 1,700 4,533 815 2,786 792 4,166 8,447 19,011	2010 RMB’000 15,109 3,477 999 17,346 36,931	30 June 2011 RMB’000 51,114 24,142 6,486 37,830
			119,572

The movements in the provision for impairment of trade and bills receivables are as follows:

At beginning of year/period Impairment losses recognised Impairment losses reversed At end of year/period	Year ended 31 December Six months ended 30 June 2008 2009 2010 2011 RMB’000 RMB’000 RMB’000 RMB’000 1,961 136 — — 12 — — 3,928 (1,837) (136) — — 136 — — 3,928	Year ended 31 December Six months ended 30 June 2008 2009 2010 2011 RMB’000 RMB’000 RMB’000 RMB’000 1,961 136 — — 12 — — 3,928 (1,837) (136) — — 136 — — 3,928
		3,928

— 80 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Included in the above provision for impairment of trade receivables is a provision for individually impaired trade receivables of RMB12,000 and RMB3,928,000 with a carrying amount before provision of RMB12,000 and RMB36,680,000 at 31 December 2008 and 30 June 2011, respectively.

The individually impaired trade and bills receivables relate to customers that were in financial difficulties and the receivables are expected to be unrecoverable. Changchun Jincheng does not hold any collateral or other credit enhancements over these balances.

The aged analysis of the trade and bills receivables that are not considered to be impaired is as follows:

Neither past due nor impaired Less than one month past due One to three months past due Over three months past due	31 December 2008 2009 RMB’000 RMB’000 8,447 18,208 — 300 — — — 503 8,447 19,011	2010 RMB’000 19,815 2,652 6,848 7,616 36,931	30 June 2011 RMB’000 76,402 358 643 9,417
			86,820

Receivables that were neither past due nor impaired relate to a large number of diversified customers for whom there was no recent history of default.

Receivables that were past due but not impaired related to a number of independent customers that have a good track record with Changchun Jincheng. Based on past experience, the directors of Changchun Jincheng are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable. Changchun Jincheng does not hold any collateral or other credit enhancements over these balances.

The carrying amounts of the trade and bills receivables approximate to their fair values.

16. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

Prepayments Deposits and other receivables Current portion of prepaid land premium	31 December 2008 2009 RMB’000 RMB’000 1,154 123,622 1,418 11,008 1,181 1,217 3,753 135,847	2010 RMB’000 72,041 17,678 1,200 90,919	30 June 2011 RMB’000 10,211 4,161 1,200
			15,572

None of the above assets is either past due or impaired. The financial assets included in the above balances relate to receivables for which there was no recent history of default.

— 81 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

17. CASH AND CASH EQUIVALENTS

Cash at banks earns interest at floating rates based on daily bank deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default. The carrying amounts of the cash and cash equivalents approximate to their fair values.

18. TRADE AND BILLS PAYABLES

An aged analysis of the trade and bills payables as at the end of each reporting period of the Relevant Periods, based on the invoice date, is as follows:

Within one month One to two months Two to three months Over three months	31 December 2008 2009 RMB’000 RMB’000 6,448 8,011 1,630 2,664 757 1,610 4,380 6,740 13,215 19,025	2010 RMB’000 4,554 597 280 1,085 6,516	30 June 2011 RMB’000 2,553 2,522 2,479 61,234
			68,788

The trade and bills payables are non-interest-bearing and are normally settled on 60 to 90-day terms.

The carrying amounts of the trade and bills payables approximate to their fair values.

19. OTHER PAYABLES AND ACCRUALS

Advances from customers Payables relate to: Transportation Taxes other than CIT Salaries, wages and benefits Others	31 December 2008 2009 RMB’000 RMB’000 15,253 12,499 — 1,252 (252) 4,309 79 408 1,185 2,559 16,265 21,027	2010 RMB’000 20,879 3,626 — 1,999 450 26,954	30 June 2011 RMB’000 3,509 6,246 425 429 437
			11,046

Other payables are non-interest-bearing and have no fixed terms of repayment.

The carrying amounts of financial liabilities included in the above balances approximate to their fair values.

— 82 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

20. INTEREST-BEARING BANK AND OTHER BORROWINGS

	31	December	2008	2008	2008		31	December	2009
	Effective					Effective
	interest					interest
	rate	Maturity					rate	Maturity
	(%)			RMB’000			(%)		RMB’000
Current
Bank loans — unsecured	6.75-7.38	2009			519,000		5.31	2010	360,000
Current portion of long
term bank loans —
unsecured					—	6.3-7.56		2010	318,500
					519,000				678,500
Non-current
Bank loans — unsecured	6.3-7.56	2010			318,500		5.4	2011	129,000
					837,500				807,500

	31	December	2010					30 June 2011
	Effective					Effective
	interest					interest
	rate	Maturity					rate	Maturity
	(%)			RMB’000			(%)		RMB’000
Current
Bank loans — unsecured	5.31-5.56	2011			330,000	5.31-5.56		2011	290,000
Current portion of long
term bank loans —
unsecured	5.4	2011			129,000		5.4	2011	129,000
					459,000				419,000
Non-current
Bank loans — unsecured	5.4	2012			268,500		5.4	2012	268,500
					727,500				687,500

					31 December				30 June
		2008				2009		2010	2011
		RMB’000			RMB’000		RMB’000		RMB’000
Analysed into:
Bank loans repayable:
Within one year or on	demand	519,000			678,500			459,000	419,000
In the second year		318,500			129,000			268,500	268,500
		837,500			807,500			727,500	687,500

— 83 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Changchun Jincheng’s bank loans were term loans secured by corporate guarantees granted by certain fellow subsidiaries of approximately RMB837,500,000, RMB807,500,000, RMB727,500,000 and RMB687,500,000 at 31 December 2008, 2009 and 2010 and 30 June 2011, respectively.

All bank loans are denominated in RMB and most of the bank loans bear interest at floating rates. The carrying amounts of the bank loans approximate to their fair values.

21. DEFERRED TAX

The movements in deferred tax assets and liabilities during the Relevant Periods are as follows:

Deferred tax assets

Deductible temporary differences RMB’000 At 1 January 2008, 31 December 2008, 31 December 2009 and 1 January 2010 — Deferred tax credited to profit or loss during the year_(note 11) 1,518 At 31 December 2010 and 1 January 2011 1,518 Deferred tax charged to profit or loss during the period(note 11)_ (204) At 30 June 2011 1,314	Total RMB’000 — 1,518 1,518 (204) 1,314

— 84 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Deferred tax liabilities

At 1 January 2008 Deferred tax charged to profit or loss during the year_(note 11) At 31 December 2008 and 1 January 2009 Deferred tax charged to profit or loss during the year(note 11) Deferred tax charged to other comprehensive income during the year At 31 December 2009 and 1 January 2010 Deferred tax charged to profit or loss during the year(note 11)_ At 31 December 2010 and 1 January 2011 Deferred tax charged to profit or loss during the period At 30 June 2011 22. DEFERRED INCOME At beginning of year/period Addition/(amortisation) At end of year/period	Depreciation allowance in excess of related depreciation Revaluation of properties RMB’000 RMB’000 4,505 4,510 722 — 5,227 4,510 1,139 — — (2,016) 6,366 2,494 1,226 — 7,592 2,494 509 — 8,101 2,494 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 — — — — — 975 — — 975	Depreciation allowance in excess of related depreciation Revaluation of properties RMB’000 RMB’000 4,505 4,510 722 — 5,227 4,510 1,139 — — (2,016) 6,366 2,494 1,226 — 7,592 2,494 509 — 8,101 2,494 31 December 2008 2009 2010 RMB’000 RMB’000 RMB’000 — — — — — 975 — — 975		Total RMB’000 9,015 722 9,737 1,139 (2,016) 8,860 1,226 10,086 509 10,595 30 June 2011 RMB’000 975 (50) 925






		975

The balance represented the receipt of government grants for the construction of certain equipment, which has been credited as a non-current liability on the statements of financial position. This deferred income is amortised on the straight-line basis to profit or loss over the expected useful lives of the relevant assets acquired.

— 85 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

23. ISSUED CAPITAL

		December		30 June
	2008	2009	2010	2011
	RMB’000	RMB’000	RMB’000	RMB’000
Issued and fully paid:	98,700	98,700	98,700	98,700

At 31 December 2008, 2009 and 2010 and 30 June 2011, the issued capital of Changchun Jincheng was RMB98,700,000 which had been fully paid by shareholders and verified by certified public accountants registered in the PRC. Global Corn Investments Limited and Changchun Dacheng Industrial Group Co., Ltd. (a wholly-owned subsidiary of the ultimate holding company) contributed RMB88,830,000 and RMB9,870,000 accounting for 90% and 10% of equity interests of Changchun Jincheng, respectively.

24. RESERVES

The movements of Changchun Jincheng’s reserves for the Relevant Periods are presented in the statements of changes in equity in Section I.

25. COMMITMENTS

At the end of each reporting period of the Relevant Periods, Changchun Jincheng did not have any significant commitments.

26. RELATED PARTY BALANCES

The balances with the immediate holding company and fellow subsidiaries are unsecured, interest-free and have no fixed terms of repayment. The carrying amounts of the balances with these group companies approximate to their fair values at the end of each reporting period. About RMB271,048,520, RMB210,423,214, RMB233,928,619 and RMB311,933,002 at 31 December 2008, 2009 and 2010 and 30 June 2011, respectively, of balances due from fellow subsidiaries arose from trading activities. About RMB707,027,119, RMB651,919,883, RMB457,991,444, and RMB600,185,651, at 31 December 2008, 2009 and 2010 and 30 June 2011, respectively, of balances due to fellow subsidiaries arose from trading activities. The remaining balances with group companies arose from fund transfers between group companies.

— 86 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

27. RELATED PARTY TRANSACTIONS

(a) Transactions with related parties

In addition to the transactions and balances detailed elsewhere in this accountants’ report, Changchun Jincheng had the following transactions with related parties during the Relevant Periods and the six months ended 30 June 2010.

					Six months ended	Six months ended	Six months ended
		Year	ended 31 December		30	June
		2008	2009	2010	2010		2011
	Notes	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Sales to fellow
subsidiaries
— corn starch	(i)	574,069	591,279	632,197	311,040	350,271
— corn gluten
meal	(i)	90,683	71,472	52,464	34,740	11,383
— feed	(i)	46,824	41,555	30,947	26,220	21,732
— corn slurry	(i)	6,432	6,106	5,582	2,576		2,465
— waxy corn
starch	(i)	14,988	—	—	—		—
Utilities costs
paid to a fellow
subsidiary	(ii)	85,128	89,586	90,695	43,920	50,328
Utilities costs
charged to a
fellow subsidiary	(ii)	13,760	10,277	9,985	4,955		4,438

Notes:

(i) Changchun Jincheng sold finished goods to fellow subsidiaries during the Relevant Periods and the six months ended 30 June 2010. These sales were made at prices mutually agreed between the parties.
(ii) Changchun Jincheng used the utilities facilities provided by a fellow subsidiary and another fellow subsidiary used the utilities facilities provided by Changchun Jincheng. These utilities costs were paid to the fellow subsidiary or charged by Changchun Jincheng based on the actual costs incurred.

— 87 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

28. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant Periods are as follows:

Financial assets

		31 December	31 December	31 December	30 June
	2008		2009	2010	2011
	Loans and	Loans and		Loans and	Loans and
	receivables	receivables		receivables	receivables
	RMB’000		RMB’000	RMB’000	RMB’000
Trade and bills receivables	8,447		19,011	36,931	119,572
Financial assets included in
prepayments, deposits and
other receivables	1,418		11,008	17,678	4,161
Due from fellow subsidiaries	1,587,772		1,471,567	1,119,909	1,039,303
Cash and cash equivalents	268,650		87,063	140,911	59,063
	1,866,287		1,588,649	1,315,429	1,222,099

Financial liabilities
		31 December			30 June
	2008		2009	2010	2011
	Financial		Financial	Financial	Financial
	liabilities at	liabilities at		liabilities at	liabilities at
	amortised		amortised	amortised	amortised
	cost		cost	cost	cost
	RMB’000		RMB’000	RMB’000	RMB’000
Trade and bills payables	13,215		19,025	6,516	68,788
Financial liabilities included in
other payables and accruals	1,012		8,528	6,075	7,537
Interest-bearing bank borrowings	837,500		807,500	727,500	687,500
Due to the immediate holding
company	105,053		105,053	105,053	105,053
Due to fellow subsidiaries	1,277,024		1,274,965	1,066,887	938,383
	2,233,804		2,215,071	1,912,031	1,807,261

— 88 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

29. FAIR VALUE

The carrying amounts and fair values of the Changchun Jincheng’s financial instruments are as follows:

Financial assets Trade and bills receivables Financial assets included in prepayments, deposits and other receivables Due from fellow subsidiaries Cash and cash equivalents Financial liabilities Trade and bills payables Financial liabilities included in other payables and accruals Interest-bearing bank borrowings Due to the immediate holding company Due to fellow subsidiaries	2008 RMB’000 8,447 1,418 1,587,772 268,650 1,866,287 13,215 1,012 837,500 105,053 1,277,024 2,233,804	Carrying amounts 31 December 2009 2010 RMB’000 RMB’000 19,011 36,931 11,008 17,678 1,471,567 1,119,909 87,063 140,911 1,588,649 1,315,429 19,025 6,516 8,528 6,075 807,500 727,500 105,053 105,053 1,274,965 1,066,887 2,215,071 1,912,031	30 June 2011 RMB’000 119,572 4,161 1,039,303 59,063 1,222,099 68,788 7,537 687,500 105,053 938,383 1,807,261	2008 RMB’000 8,447 1,418 1,587,772 268,650 1,866,287 13,215 1,012 837,500 105,053 1,277,024 2,233,804	Fair values 31 December 2009 2010 RMB’000 RMB’000 19,011 36,931 11,008 17,678 1,471,567 1,119,909 87,063 140,911 1,588,649 1,315,429 19,025 6,516 8,528 6,075 807,500 727,500 105,053 105,053 1,274,965 1,066,887 2,215,071 1,912,031	30 June 2011 RMB’000 119,572 4,161 1,039,303 59,063 1,222,099 68,788 7,537 687,500 105,053 938,383 1,807,261

30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Changchun Jincheng’s principal financial instruments comprise interest-bearing bank borrowings, cash and short-term bank deposits. The main purpose of these financial instruments is to raise finance for Changchun Jincheng’s operations. Changchun Jincheng has various other financial assets and liabilities such as trade and bills receivables and trade and bills payables, which arise directly from its operations.

— 89 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

The main risks arising from Changchun Jincheng’s financial instruments are interest rate risk, credit risk and liquidity risk. As Changchun Jincheng’s exposure to these risks is kept to a minimum, Changchun Jincheng has not used any derivatives and other instruments for hedging purposes. Changchun Jincheng does not hold or issue derivative financial instruments for trading purposes. The board of directors reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk

Changchun Jincheng’s exposure to the risk of changes in market interest rates relates primarily to its bank loans.

Changchun Jincheng’s revenue and operating cash flows are substantially independent of changes in market interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of Changchun Jincheng’s profit before tax (through the impact on floating rate borrowings) and the equity.

				Six months
				ended
	Year ended 31 December			30 June
	2008	2009	2010	2011
Increase in basis points_(%)_	1%	1%	1%	1%
Decrease in profits before tax
(RMB’000)	(6,883)	(4,664)	(3,229)	(6,427)

Credit risk

Changchun Jincheng trades only with recognised and creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and Changchun Jincheng’s exposure to bad debts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit, Changchun Jincheng does not offer credit terms without the specific approval of the Head of Credit Control.

The credit risk of Changchun Jincheng’s other financial assets, which comprise cash and cash equivalents, trade and bills receivables, amounts due from fellow subsidiaries and other receivables, arises from default of the counterparty, with a maximum exposure equal to the carrying amounts of these instruments.

Since Changchun Jincheng trades only with recognised and creditworthy third parties, there is no requirement for collateral. Concentrations of credit risk are managed by customer/counterparty, by geographical region and by industry sector. There are no significant concentrations of credit risk within Changchun Jincheng as the customer bases of Changchun Jincheng’s trade and bills receivables are widely dispersed in different sectors and industries.

Further quantitative data in respect of Changchun Jincheng’s exposure to credit risk arising from trade and bills receivables are disclosed in note 15 to the financial statements.

— 90 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Liquidity risk

Changchun Jincheng monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial liabilities and financial assets and projected cash flows from operations.

Changchun Jincheng’s policy is to maintain sufficient cash and cash equivalents or have available funding through an adequate amount of committed annual borrowing facilities from banks to meet its commitments over the following year in accordance with its strategic plan.

The maturity profile of Changchun Jincheng’s financial liabilities at the end of each of the Relevant Periods, based on the contracted undiscounted payments, was as follows:

Year ended 31 December 2008

On demand RMB’000 Trade and bills payables 13,215 Interest-bearing bank borrowings — Due to the immediate holding company 105,053 Due to fellow subsidiaries 1,277,024 Other payables 1,012 1,396,304 Year ended 31 December 2009 On demand RMB’000 Trade and bills payables 19,025 Interest-bearing bank borrowings — Due to the immediate holding company 105,053 Due to fellow subsidiaries 1,274,965 Other payables 8,528 1,407,571	Less than 3 months RMB’000 — 30,510 — — — 30,510 Less than 3 months RMB’000 — 70,650 — — — 70,650	3 to 12 months RMB’000 — 514,199 — — — 514,199 3 to 12 months RMB’000 — 634,284 — — — 634,284	1 to 5 Years RMB’000 — 354,236 — — — 354,236 1 to 5 years RMB’000 — 139,836 — — — 139,836	>5 years RMB’000 — — — — — — >5 years RMB’000 — — — — — —	Total RMB’000 13,215 898,945 105,053 1,277,024 1,012
					2,295,249

					Total RMB’000 19,025 844,770 105,053 1,274,965 8,528
					2,252,341

— 91 —

APPENDIX II

ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Year ended 31 December 2010

On demand RMB’000 Trade and bills payables 6,516 Interest-bearing bank borrowings — Due to the immediate holding company 105,053 Due to fellow subsidiaries 1,066,887 Other payables 6,075 1,184,531 Six months ended 30 June 2011 On demand RMB’000 Trade and bills payables 68,788 Interest-bearing bank borrowings — Due to the immediate holding company 105,053 Due to fellow subsidiaries 938,383 Other payables 7,537 1,119,761	Less than 3 months RMB’000 — — — — — — Less than 3 months RMB’000 — 189,857 — — — 189,857	3 to 12 months RMB’000 — 477,224 — — — 477,224 3 to 12 months RMB’000 — 235,691 — — — 235,691	1 to 5 years RMB’000 — 291,175 — — — 291,175 1 to 5 years RMB’000 — 283,885 — — — 283,885	>5 years RMB’000 — — — — — — >5 years RMB’000 — — — — — —	Total RMB’000 6,516 768,399 105,053 1,066,887 6,075
					1,952,930

					Total RMB’000 68,788 709,433 105,053 938,383 7,537
					1,829,194

Capital management

The primary objectives of Changchun Jincheng’s capital management are to safeguard Changchun Jincheng’s ability to continue as a going concern and to maintain healthy capital ratios in order to support its business and maximise shareholders’ value.

Changchun Jincheng manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, Changchun Jincheng may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes for managing capital during the Relevant Periods.

— 92 —

APPENDIX II ACCOUNTANT’S REPORT OF CHANGCHUN JINCHENG

Changchun Jincheng monitors capital using a gearing ratio, which is net debt divided by equity. Changchun Jincheng’s policy is to maintain the gearing ratio at reasonable levels. Net debt includes interest-bearing bank and other borrowings less cash and cash equivalents, and excludes discontinued operations. The gearing ratios at the end of each of the Relevant Periods were as follows:

Interest-bearing bank borrowings _Less:_cash and cash equivalents Net debt Equity Gearing ratio	31 December 2008 2009 RMB’000 RMB’000 837,500 807,500 (268,650) (87,063) 568,850 720,437 183,635 213,519 310% 337%	2010 RMB’000 727,500 (140,911) 586,589 247,050 237%	30 June 2011 RMB’000 687,500 (59,063) 628,437 270,569 232%

31. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by Changchun Jincheng in respect of any period subsequent to 30 June 2011.

Yours faithfully,

Ernst & Young

Certified Public Accountants Hong Kong

— 93 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is a summary of the unaudited pro forma statement of assets and liabilities of the Enlarged Group for the purpose of illustration only and does not form part of the accountants’ report prepared by the reporting accountants of the Company as set out in Appendix II to the Circular.

The unaudited pro forma statement of assets and liabilities of the Enlarged Group may not give a true picture of the financial position of the Enlarged Group had the Transaction been completed on 30 June 2011 because of its hypothetical nature.

The unaudited pro forma statement of assets and liabilities of the Enlarged Group is prepared based on the unaudited consolidated statement of financial position of the Group as at 30 June 2011 extracted from the interim report of the Company for the six months ended 30 June 2011 and the audited financial information of Changchun Jincheng as at 30 June 2011 extracted from the accountants’ report on Changchun Jincheng as set out in Appendix II to the Circular as if the Transaction had been completed on 30 June 2011.

— 94 —

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The Group as at 30 June 2011 (Unaudited) HK$’000 NON-CURRENT ASSETS Property, plant and equipment 1,168,189 Prepaid land premiums 107,552 Deposits paid for acquisition of property, plant and equipment and land premiums 15,956 Goodwill 183,538 Deferred tax assets 1,052 Breeding biological assets 9,003 Investments in jointly controlled entities 100,297 Total non-current assets 1,585,587 CURRENT ASSETS Inventories 583,853 Trade and bills receivables 488,556 Prepayments, deposits and other receivables 68,201 Trading biological assets 2,162 Due from jointly controlled entities 4,635 Due from the immediate holding company 21,086 Due from fellow subsidiaries 234,376 Cash and cash equivalents 463,182 Total current assets 1,866,051	Changchun Jincheng as at 30 June 2011 (Audited) HK$’000 321,137 42,796 — — 1,565 — 365,498 674,792 142,348 18,538 — — — 1,237,265 70,313 2,143,256	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 1,489,326 1,489,326 150,348 150,348 15,956 15,956 183,538 187,894 (iii) 371,432 2,617 2,617 9,003 9,003 100,297 100,297 1,951,085 2,138,979 1,258,645 1,258,645 630,904 630,904 86,739 86,739 2,162 2,162 4,635 4,635 21,086 21,086 1,471,641 (67,120) (iv) 1,404,521 533,495 533,495 4,009,307 3,942,187	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 1,489,326 1,489,326 150,348 150,348 15,956 15,956 183,538 187,894 (iii) 371,432 2,617 2,617 9,003 9,003 100,297 100,297 1,951,085 2,138,979 1,258,645 1,258,645 630,904 630,904 86,739 86,739 2,162 2,162 4,635 4,635 21,086 21,086 1,471,641 (67,120) (iv) 1,404,521 533,495 533,495 4,009,307 3,942,187
			2,138,979
			1,258,645 630,904 86,739 2,162 4,635 21,086 1,404,521 533,495
			3,942,187

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The Group as at 30 June 2011 (Unaudited) HK$’000 CURRENT LIABILITIES Trade payables 61,347 Other payables and accruals 164,002 Interest-bearing bank borrowings 873,333 Due to fellow subsidiaries 194,402 Due to the ultimate holding company 3,259 Due to immediate holding company — Tax payable 9,875 Total current liabilities 1,306,218 NET CURRENT ASSETS 559,833 TOTAL ASSETS LESS CURRENT LIABILITIES 2,145,420 NON-CURRENT LIABILITIES Interest-bearing bank borrowings — Deferred tax liabilities 62,205 Deferred income — Total non-current liabilities 62,205 Net assets 2,083,215	Changchun Jincheng as at 30 June 2011 (Audited) HK$’000 81,890 13,150 498,810 1,117,123 — 125,063 17,255 1,853,291 289,965 655,463 319,643 12,613 1,101 333,357 322,106	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 143,237 143,237 177,152 177,152 1,372,143 1,372,143 1,311,525 (67,120) (iv) 1,244,405 3,259 3,259 125,063 125,063 27,130 27,130 3,159,509 3,092,389 849,798 849,798 2,800,883 2,988,777 319,643 319,643 74,818 74,818 1,101 1,101 395,562 395,562 2,405,321 2,593,215	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 143,237 143,237 177,152 177,152 1,372,143 1,372,143 1,311,525 (67,120) (iv) 1,244,405 3,259 3,259 125,063 125,063 27,130 27,130 3,159,509 3,092,389 849,798 849,798 2,800,883 2,988,777 319,643 319,643 74,818 74,818 1,101 1,101 395,562 395,562 2,405,321 2,593,215
			3,092,389
			849,798
			2,988,777
			319,643 74,818 1,101
			395,562
			2,593,215

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

The Group as at 30 June 2011 (Unaudited) HK$’000 EQUITY Equity attributable to equity holders of the parent Issued capital 114,981 Reserves 1,959,342 2,074,323 Non-controlling interests 8,892 Total equity 2,083,215	Changchun Jincheng as at 30 June 2011 (Audited) HK$’000 117,500 204,606 322,106 — 322,106	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 37,778 (i) 232,481 (117,500) (iii) 152,759 472,222 (i) 2,163,948 (204,606) (iii) 2,431,564 2,396,429 2,584,323 8,892 8,892 2,405,321 2,593,215	Total Pro forma Adjustments (Unaudited) Pro forma Enlarged Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 37,778 (i) 232,481 (117,500) (iii) 152,759 472,222 (i) 2,163,948 (204,606) (iii) 2,431,564 2,396,429 2,584,323 8,892 8,892 2,405,321 2,593,215
			2,584,323 8,892
			2,593,215

Notes:

(i) The Transaction is assumed to have been completed on 30 June 2011 and thus the issuance of 377,778,000 new Shares by the Company to Global Corn Bio-chem and the relevant surplus are included as a pro forma adjustment. In the opinion the Directors and as announced, the Transaction will be settled by allotting and issuing to Global Corn Bio-chem of 377,778,000 new Shares of HK$0.1 each by the Company at an issue price of HK$1.35 per Consideration Share, which is equivalent to a total consideration of approximately HK$510 million.
(ii) As the Group has previously selected to adopt the purchase method in the acquisition of another subsidiary under common control, to be consistent, the Group will apply the purchase method to account for the Transaction. In applying the purchase method, the identifiable assets, liabilities and contingent liabilities of Changchun Jincheng will be recorded on the unaudited pro forma consolidated statement of financial position of the Enlarged Group at their fair values at the date of the Completion Date, and all the capital and reserves of Changchun Jincheng upon Completion will be eliminated as the pre-acquisition reserves of the Enlarged Group. Any goodwill arising from the Transaction will be determined as the excess of the purchase consideration deemed to be incurred by the Group over the Group’s interests in the net fair value of the identifiable assets, liabilities and contingent liabilities of Changchun Jincheng at the Completion Date.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

For the purpose of preparing the unaudited pro forma statement of financial position of the Enlarged Group after the Transaction, the net book value of the identifiable assets, liabilities and contingent liabilities of Changchun Jincheng as at 30 June 2011, as extracted from the accountants’ report on Changchun Jincheng set out in this Circular, is applied in the calculation of the estimated goodwill arising from the Transaction. The actual goodwill arising at the Completion Date may be different from the estimated goodwill as shown below and the calculation on the basis as set out above because the fair value of the assets, liabilities and contingent liabilities of Changchun Jincheng may be substantially different from their book value used in the preparation of the unaudited pro forma financial information.

(iii) The pro forma adjustments reflect: 1) elimination of the Group’s entire equity interests in Changchun Jincheng after the Completion; and 2) the recognition of estimated goodwill arising from the Transaction (see (ii) above) on the basis that no impairment charges concerning the above estimated goodwill is considered necessary as calculated below:

Fair value of Consideration Shares _Less:_Net assets of Changchun Jincheng acquired Goodwill arising from the Transaction	HK$’000 510,000 (322,106) 187,894

(iv) The pro forma adjustment reflects the elimination of the amounts due from subsidiaries of the Company by Changchun Jincheng as at 30 June 2011.

— 98 —

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following is the text of a report, received from the independent reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong, prepared for the sole purpose of incorporation in this circulars, in respect of the unaudited pro forma financial information of the Enlarged Group immediately after acquisition of the Target Group.

B. ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

==> picture [116 x 51] intentionally omitted <==

18/F, Two International Finance Centre 8 Finance Street, Central Hong Kong

26 September 2011

The Directors

Global Sweeteners Holdings Limited

Dear Sirs,

We report on the unaudited pro forma financial information (the “Unaudited Pro Forma Financial Information”) of Global Sweeteners Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), and Changchun Jincheng Corn Development Co., Ltd. (together with the Group hereinafter collectively referred to as the “Enlarged Group”), which has been prepared by the directors of the Company (the “Directors”) for illustrative purposes only, to provide information about how the acquisition of Changchun Jincheng Corn Development Co., Ltd. by the Company might have affected the financial information presented, for inclusion in Appendix III to the circular of the Company dated 26 September 2011 (the “Circular”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out in Appendix III to the Circular.

Respective Responsibilities of the Directors and Reporting Accountants

It is the responsibility solely of the Directors to prepare the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX III

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of Opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments, and discussing the Unaudited Pro Forma Financial Information with the Directors. This engagement did not involve independent examination of any of the underlying financial information.

Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the Unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

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APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the Directors, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 30 June 2011 or any future dates.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,

Ernst & Young

Certified Public Accountants Hong Kong

— 101 —

APPENDIX IV MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

Set out below is the management discussion and analysis of the results of Changchun Jincheng, which should be read in conjunction with the Accountants’ Report of Changchun Jincheng set out in Appendix II to this circular.

YEAR ENDED 31 DECEMBER 2008 AND 2009

Business and financial review

Revenue

Corn Starch: RMB746 million (2008: RMB731 million) Other corn refined products: RMB304 million (2008: RMB364 million)

For the year ended 31 December 2009, revenue of Changchun Jincheng decreased by approximately 4.1% or RMB45 million to RMB1,050 million (2008: RMB1,095 million), due to decrease in average selling price and sales volume of other corn refined products by approximately 15.1% and 1.6% respectively. Revenue generated from sales of corn starch increased by approximately 2.0% or RMB15 million to RMB746 million was mainly due to the increase in sales volume by approximately 3.2%.

The production capacity of Changchun Jincheng was 600,000 metric tonnes per annum during the years ended 31 December 2008 and 2009. The plant was running at full capacity during the years ended 31 December 2008 and 2009 and the production volumes were 614,000 MT and 610,000 MT respectively. During the years ended 31 December 2008 and 2009, Changchun Jincheng sold approximately 202,000 MT and 204,000 MT of corn starch to the Group respectively.

Cost of sales

For the year ended 31 December 2009, cost of sales decreased by approximately 6.5% or RMB64 million to RMB923 million (2008: RMB987 million) mainly due to the decrease in purchasing cost of raw material — corn kernels by approximately 1.4%.

Gross profit

Corn Starch: RMB116 million (2008: RMB80 million) Other corn refined products: RMB12 million (2008: RMB29 million)

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MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

For the year ended 31 December 2009, gross profit of corn starch increased by approximately 44.1% or RMB36 million to RMB116 million (2008: RMB80 million) as a result of increase in average selling price and decrease in cost of sales. The gross profit of other corn refined products decreased by approximately 59.7% or RMB17 million to RMB12 million mainly due to decrease in average selling price and sales volume.

Other income

For the year ended 31 December 2009, other income decreased by approximately 25.4% or RMB1 million to RMB5 million (2008: RMB6 million) mainly due to decrease in interest income by RMB1 million.

Selling and distribution costs

For the year ended 31 December 2009, selling and distribution costs decreased by approximately 38.9% or RMB16 million to RMB25 million (2008: RMB41 million) was mainly attributable to decrease in transportation expenses amounted to RMB15 million as a certain amount of transportation cost was borne by customers due to change in shipment terms.

Administrative expenses and other expenses

For the year ended 31 December 2009, administrative expenses decreased by approximately 11.5% or RMB2 million to RMB11 million (2008: RMB13 million) due to stringent control over operating costs of Changchun Jincheng.

Finance costs

For the year ended 31 December 2009, finance costs decreased by approximately 18.1% or RMB11 million to RMB53 million (2008: RMB64 million) due to decrease in interest rate and bank borrowings amounted to approximately RMB30 million.

Profit for the year

For the year ended 31 December 2009, Changchun Jincheng recorded a net profit of RMB36 million (2008: net loss RMB4 million) due to the increase in gross profit, stringent control in operating costs and the enhancement in operating efficiency.

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MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Liquidity, financial resources and capital structure

For the year ended 31 December 2008 and 2009, Changchun Jincheng obtained funding by bank borrowings. The funding were mainly utilized for working capital.

As at 31 December 2009, net current assets of Changchun Jincheng decreased by approximately RMB126 million to RMB8 million (31 December 2008: RMB134 million) mainly due to reclassification of certain long term bank borrowings to short term amounted to RMB190 million.

As at 31 December 2009, the gearing ratio of Changchun Jincheng in terms of bank borrowings to total assets was approximately 32.9% (31 December 2008: 34.3%). The gearing ratio improved as a result of decrease in bank borrowings amounted to approximately RMB30 million.

As at 31 December 2008 and 2009, the registered capital of Changchun Jincheng was RMB98,700,000 which had been fully paid. As at 31 December 2008 and 2009, all cash and cash equivalents are denominated in Renminbi.

Structure of interest bearing borrowings

As at 31 December 2009, bank borrowings of Changchun Jincheng amounted to RMB808 million (31 December 2008: RMB838 million), of which 100% (31 December 2008: 100%) was denominated in Renminbi.

The percentage of interest bearing borrowings wholly repayable within one year and in the second to the fifth years were approximately 84.0% (31 December 2008: 62.0%) and 16.0% (31 December 2008: 38.0%) respectively. There was no other committed borrowing facilities as at 31 December 2009 (31 December 2008: nil).

Significant investments held and material acquisitions and disposal of subsidiaries and associated companies

There was no significant investment held nor any material acquisition or disposal of subsidiaries and associated companies during the years ended 31 December 2008 and 2009.

Exposure to fluctuations in exchange rates

Since most of the operations of Changchun Jincheng were carried out in the PRC in which transactions were denominated in Renminbi, any exchange rate changes of Renminbi against other currencies will not have material adverse effect on its operation. As such, Changchun Jincheng has not entered into any hedging activities.

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MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Charges on assets

As at 31 December 2008 and 2009, Changchun Jincheng did not pledge any of its assets.

Contingent liabilities

As at 31 December 2008 and 2009, Changchun Jincheng had no material contingent liabilities.

Employee and remuneration policy

As at 31 December 2009, Changchun Jincheng had approximately 232 employees (31 December 2008: 313) with total staff costs for the year amounting to RMB5 million (2008: RMB7 million). Employees were remunerated on the basis of their performance, experience and prevailing industrial practice. Remuneration packages comprised salary and year-end discretionary bonus based on market conditions and individual performance. The directors of Changchun Jincheng continued to review employees’ contribution and to provide them with incentives and flexibility for their better commitment and performance.

YEAR ENDED 31 DECEMBER 2009 AND 2010

Business and financial review

Revenue

Corn Starch: RMB866 million (2009: RMB746 million) Other corn refined products: RMB288 million (2009: RMB304 million)

For the year ended 31 December 2010, revenue of Changchun Jincheng increased by approximately 9.9% or RMB104 million to RMB1,154 million (2009: RMB1,050 million), due to increase in average selling price of corn starch by approximately 25.6%. Revenue generated from sales of other corn refined products decreased by approximately 5.4% or RMB16 million to RMB288 million was mainly due to the decrease in average selling price and sales volume by approximately 3.5% and 2.0% respectively.

The production capacity of Changchun Jincheng was 600,000 metric tonnes per annum during the years ended 31 December 2009 and 2010. The plant was running at full capacity during the years ended 31 December 2009 and 2010 and the production volumes were 610,000 MT and 600,000 MT respectively. During the years ended 31 December 2009 and 2010, Changchun Jincheng sold approximately 204,000 MT and 201,000 MT of corn starch to the Group respectively.

— 105 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Cost of sales

For the year ended 31 December 2010, cost of sales increased by approximately 13.1% or RMB121 million to RMB1,044 million (2009: RMB923 million) mainly due to the increase in purchasing cost of raw material — corn kernels by approximately 28.8%.

Gross profit

Corn Starch: RMB147 million (2009: RMB116 million)

Other corn refined products: gross loss RMB37 million (2009: gross profit RMB12 million)

For the year ended 31 December 2010, gross profit of corn starch increased by approximately 26.7% or RMB31 million to RMB147 million (2009: RMB116 million) was mainly attributable to increase in average selling price of corn starch. Other corn refined products recorded a gross loss of RMB37 million (2009: gross profit RMB12 million) mainly due to decrease in average selling price and sales volume.

Other income

For the year ended 31 December 2010, other income increased by approximately 186.9% or RMB8 million to RMB13 million (2009: RMB5 million) mainly due to compensation for use of land amounted to RMB9 million.

Selling and distribution costs

For the year ended 31 December 2010, selling and distribution costs increased by approximately 22.9% or RMB6 million to RMB31 million (2009: RMB25 million) was mainly attributable to increase in transportation expenses amounted to RMB6 million as a result of the rise of petroleum price.

Administrative expenses and other expenses

For the year ended 31 December 2010, administrative expenses increased by approximately 4.8% or RMB1 million to RMB12 million (2009: RMB11 million) which in line with the increase of its revenue.

Finance costs

For the year ended 31 December 2010, finance costs decreased by approximately 26.7% or RMB15 million to RMB38 million (2009: RMB53 million) due to decrease in interest rate and bank borrowings amounted to approximately RMB80 million.

— 106 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Profit for the year

For the year ended 31 December 2010, the net profit of Changchun Jincheng decreased by approximately 6.7% or RMB2 million to RMB34 million (2009: RMB36 million) mainly due to the decrease in gross profit and increase in tax provided for the year by RMB1 million to RMB8 million (2009: RMB7 million).

Liquidity, financial resources and capital structure

For the year ended 31 December 2009 and 2010, Changchun Jincheng obtained funding by bank borrowings. The funding were mainly utilized for working capital.

As at 31 December 2010, net current assets of Changchun Jincheng increased by approximately RMB199 million to RMB207 million (31 December 2009: RMB8 million) mainly due to reclassification of certain short term bank borrowings to long term amounted to RMB220 million.

As at 31 December 2010, the gearing ratio of Changchun Jincheng in terms of bank borrowings to total assets was remained at approximately 33.0% (31 December 2009: 32.9%).

As at 31 December 2009 and 2010, the registered capital of Changchun Jincheng was RMB98,700,000 which had been fully paid. As at 31 December 2009 and 2010, all cash and cash equivalents are denominated in Renminbi.

Structure of interest bearing borrowings

As at 31 December 2010, bank borrowings of Changchun Jincheng amounted to RMB728 million (31 December 2009: RMB808 million), of which 100% (31 December 2009: 100%) was denominated in Renminbi.

The percentage of interest bearing borrowings wholly repayable within one year and in the second to the fifth years were approximately 63.1% (31 December 2009: 84.0%) and 36.9% (31 December 2009: 16.0%) respectively. There was no other committed borrowing facilities as at 31 December 2010 (31 December 2009: nil).

— 107 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Significant investments held and material acquisitions and disposal of subsidiaries and associated companies

There is no significant investment held nor any material acquisition or disposal of subsidiaries and associated companies during the years ended 31 December 2009 and 2010.

Exposure to fluctuations in exchange rates

Charges on assets

As at 31 December 2009 and 2010, Changchun Jincheng did not pledge any of its assets.

Contingent liabilities

As at 31 December 2009 and 2010, Changchun Jincheng had no material contingent liabilities.

Employee and remuneration policy

As at 31 December 2010, Changchun Jincheng had approximately 238 employees (31 December 2009: 232) with total staff costs for the year amounting to RMB6 million (2009: RMB5 million). Employees were remunerated on the basis of their performance, experience and prevailing industrial practice. Remuneration packages comprised salary and year-end discretionary bonus based on market conditions and individual performance. The directors of Changchun Jincheng continued to review employees’ contribution and to provide them with incentives and flexibility for their better commitment and performance.

— 108 —

APPENDIX IV MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

SIX MONTHS ENDED 30 JUNE 2010 AND 2011

Business and financial review

Revenue

Corn Starch: RMB526 million (six months ended 30 June 2010: RMB388 million) Other corn refined products: RMB173 million (six months ended 30 June 2010: RMB124 million)

For the six months ended 30 June 2011, revenue of Changchun Jincheng increased by approximately 36.5% or RMB187 million to RMB699 million (six months ended 30 June 2010: RMB512 million), mainly due to increase in average selling price and sales volume of corn starch by approximately 24.2% and 9.3% respectively. Revenue generated from sales of other corn refined products increased by approximately 39.0% or RMB49 million to RMB173 million (six months ended 30 June 2010: RMB124 million) was mainly due to the increase in average selling price and sales volume by approximately 23.7% and 12.3% respectively.

The production capacity of Changchun Jincheng was 600,000 metric tonnes per annum for the six months ended 30 June 2010 and 2011. The plant was running at full capacity during the six months ended 30 June 2010 and 2011 and the production volumes were 286,000 MT and 303,000 MT respectively. During the six months ended 30 June 2010 and 2011, Changchun Jincheng sold approximately 104,000 MT and 115,000 MT of corn starch to the Group respectively.

Cost of sales

For the six months ended 30 June 2011, cost of sales increased by approximately 35.1% or RMB161 million to RMB619 million (six months ended 30 June 2010: RMB458 million) mainly due to the increase in purchasing cost of raw material — corn kernels by approximately 6.7%.

Gross profit

Corn Starch: RMB105 million (six months ended 30 June 2010: RMB62 million) Other corn refined products: gross loss RMB25 million (six months ended 30 June 2010: gross loss RMB8 million)

— 109 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

For the six months ended 30 June 2011, gross profit of corn starch increased by approximately 70.3% or RMB43 million to RMB105 million (six months ended 30 June 2010: RMB62 million) was mainly attributable to increase in average selling price of corn starch and sales volume. Other corn refined products recorded a gross loss of RMB25 million (six months ended 30 June 2010: gross loss RMB8 million) mainly due to the increase in average unit cost was greater than the increase in average selling price.

Other income

For the six months ended 30 June 2011, other income decreased by approximately 41.7% or RMB4 million to RMB6 million (six months ended 30 June 2010: RMB10 million) mainly due to compensation for use of land amounted to RMB9 million has been included for the six months ended 30 June 2010.

Selling and distribution costs

For the six months ended 30 June 2011, selling and distribution costs increased by approximately 107.1% or RMB13 million to RMB25 million (six months ended 30 June 2010: RMB12 million) was mainly attributable to increase in transportation expenses amounted to RMB13 million as a result of the rise of petroleum price.

Administrative expenses and other expenses

For the six months ended 30 June 2011, administrative expenses increased by approximately 92.2% or RMB5 million to RMB10 million (six months ended 30 June 2010: RMB5 million) as provision of doubtful debt on trade receivable amounted to approximately RMB4 million has been provided.

Finance costs

For the six months ended 30 June 2011, finance costs increased by approximately 4.2% or RMB1 million to RMB21 million (six months ended 30 June 2010: RMB20 million) due to increase in bank borrowings amounted to approximately RMB91 million.

Profit for the period

For the six months ended 30 June 2011, the net profit of Changchun Jincheng increased by approximately 13.9% or RMB3 million to RMB24 million (six months ended 30 June 2010: RMB21 million) mainly due to the increase in gross profit and sales volume.

— 110 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Liquidity, financial resources and capital structure

For the six months ended 30 June 2011, Changchun Jincheng obtained funding by bank borrowings. The funding were mainly utilized for working capital.

As at 30 June 2011, net current assets of Changchun Jincheng increased by approximately RMB37 million to RMB244 million (31 December 2010: RMB207 million) mainly due to the repayment of certain short term bank borrowings amounted to approximately RMB40 million.

As at 30 June 2011, the gearing ratio of Changchun Jincheng in terms of bank borrowings to total assets was remained at approximately 32.6% (31 December 2010: 33.0%).

As at 30 June 2011, the registered capital of Changchun Jincheng was RMB98,700,000 which had been fully paid. As at 30 June 2011, all cash and cash equivalents are denominated in Renminbi.

Structure of interest bearing borrowings

As at 30 June 2011, bank borrowings of Changchun Jincheng amounted to RMB688 million, of which 100% was denominated in Renminbi.

The percentage of interest bearing borrowings wholly repayable within one year and in the second to the fifth years were approximately 60.9% and 39.1% respectively. There was no other committed borrowing facilities as at 30 June 2011.

Significant investments held and material acquisitions and disposal of subsidiaries and associated companies

There is no significant investment held nor any material acquisition or disposal of subsidiaries and associated companies during the six months ended 30 June 2010 and 2011.

Exposure to fluctuations in exchange rates

— 111 —

MANAGEMENT DISCUSSION AND ANALYSIS OF CHANGCHUN JINCHENG

APPENDIX IV

Charges on assets

As at 31 December 2010 and 30 June 2011, Changchun Jincheng did not pledge any of its assets.

Contingent liabilities

As at 31 December 2010 and 30 June 2011, Changchun Jincheng had no material contingent liabilities.

Employee and remuneration policy

As at 30 June 2011, Changchun Jincheng had approximately 230 employees with total staff costs for the period amounting to RMB3 million. Employees were remunerated on the basis of their performance, experience and prevailing industrial practice. Remuneration packages comprised salary and year-end discretionary bonus based on market conditions and individual performance. The directors of Changchun Jincheng continued to review employees’ contribution and to provide them with incentives and flexibility for their better commitment and performance.

— 112 —

APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

The following is the text of a valuation report, prepared for the purpose of incorporation in this circular received from Greater China Appraisal Limited,, an independent valuer, in connection with its valuation as at 30 June 2011 of the fair value of 100% equity interest of Changchun Jincheng.

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26 September 2011

The Board of Directors Global Sweeteners Holdings Limited Unit 2403 Admiralty Centre, Tower II No. 18 Harcourt Road Hong Kong

Dear Sirs/Madams,

Re: Business Valuation of Changchun Jincheng Corn Development Co., Ltd.

At your request, we were engaged to assist you in the valuation analysis pertaining to the fair value of 100% equity interest of Changchun Jincheng Corn Development Co., Ltd. (“Changchun Jincheng”) as of 30 June 2011 (the “Valuation Date”).

It is our understanding that our analysis will be used by the management of Global Sweeteners Holdings Limited (“GSH”) for investment purpose only, details of which are set out in the circular dated 26 September 2011 issued by GSH to the shareholders (the “Circular”), of which this valuation report forms part. Unless otherwise stated, terms used in this valuation report have the same meanings as those defined in the Circular. Our analysis was conducted for the above mentioned purpose only and this report should be used for no other purposes. The standard of value is fair value; while the premise of value is going concern.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

The approaches and methodologies used in our work did not comprise an examination in accordance with generally accepted accounting principles, the objective of which is an expression of an opinion regarding the fair presentation of financial statements or other financial information, whether historical or prospective, presented in accordance with generally accepted accounting principles.

We express no opinion and accept no responsibility for the accuracy and completeness of the financial information or other data provided to us by others. We assume that the financial and other information provided to us is accurate and complete, and we have relied upon this information in performing our valuation.

PURPOSE OF ENGAGEMENT

As aforementioned, the purpose of this particular engagement is to provide the management of GSH a reference for investment purpose only in determination of the 100% equity interest of Changchun Jincheng as of the Valuation Date.

The premise of value is Going Concern, defined as:

“an ongoing and operating business enterprise”

Going Concern value is defined as:

“the value of a business enterprise that is expected to operate into the future. The intangible elements of Going Concern Value result from factors such as having a trained workforce, an operational plant, and the necessary licenses, systems, and procedures in place”.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

BASIS OF VALUATION

We have valued the equity interest of Changchun Jincheng on the basis of fair value.

Fair Value

According to Hong Kong Financial Reporting Standard, fair value is the amount for which an asset could be exchanged, or a fair value liability settled, between knowledgeable and willing parties in an arm’s length transaction.

For the purpose of this valuation, the term fair value is similar and/or interchangeable with the valuation standards or definitions below and will be used throughout this valuation report.

Market Value

According to The Hong Kong Business Valuation Forum — Business Valuation Standards, market value is defined as the estimated amount for which an asset (a property) should exchange on the date of valuation between a willing buyer and willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

Fair Market Value

The International Valuation Glossary defines fair market value as the amount at which property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of relevant facts.

Our valuation has been prepared in accordance with the HKIS Valuation Standards on Trade-related Business Assets and Business Enterprise (First Edition 2004) published by the Hong Kong Institute of Surveyors and the Business Valuation Standards (First Printed 2005) published by the Hong Kong Business Valuation Forum. Both are generally accepted valuation standards followed by relevant professional practitioners in Hong Kong. These standards contain detailed guidelines on the basis and valuation approaches in valuing assets used in the operation of a trade or business and business enterprises.

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APPENDIX V

LEVELS OF VALUE

Although valuation is a range concept, current valuation theory suggests that there are three basic “levels” of value applicable to a business or business interest. The levels of value are respectively:

Controlling interest: the value of the enterprise as a whole, also known as enterprise value;
As if freely tradable minority interest: the value of a minority interest, lacking control, but enjoying the benefit of market liquidity; and
Non-marketable minority interest: the value of a minority interest, lacking both control and market liquidity.

This valuation is prepared on controlling and non-marketable interest basis.

PREMISE OF VALUE

Premise of value relates to the concept of valuing a subject in the manner in which it would generate the greatest return to the owner of the property, taking into account what is physically possible, financially feasible, and legal. Premises of value include the following:

Going concern: appropriate when the business is expected to continue operating without the intention or threat of liquidation in the foreseeable future;
Orderly liquidation: appropriate for a business that is clearly going to cease operations in the near future and is allowed sufficient time to sell its assets in the open market;
Forced liquidation: appropriate when time or other constraints do not allow an orderly liquidation;
Assembled group of assets: appropriate when all assets of a business are sold in the market piecemeal instead of the entire business itself.

This valuation is prepared on a going concern basis.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

SCOPE OF SERVICES

We were engaged by the management of GSH to assist in their estimate of the fair value of 100% equity interest of Changchun Jincheng as of the Valuation Date.

We understand that management of GSH will use our analysis solely as a reference for investment purpose only.
Our analysis and conclusion of opinion of value on the Changchun Jincheng was based on our discussions with the management of GSH, as well as a review of recent financial information and company records, including:
Audited consolidated financial statements of Changchun Jincheng from the periods ended 31 December 2008 to 31 December 2010;
Consolidated management accounts of Changchun Jincheng for the period from 1 January 2011 to 30 June 2011;
Announcement made by GSH in relation to the acquisition of 100% equity interest of Global Starch (BVI) Investments Limited (“Target Company”) dated 2 September 2011; and
Agreement (“S&P Agreement”) entered into between GSH and Global Corn Investments (HK) Limited (the “Vendor”) for the acquisition of the entire issued shares in, and any shareholder loans to the Target Company dated 2 September 2011.

We also relied upon publicly available information from sources on capital markets, including industry reports, and various databases of publicly traded companies and news.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

COMPANY OVERVIEWS

Global Bio-chem Technology Group Company Limited (“GBT”)

GBT is a company incorporated in Cayman Islands with limited liability. GBT is principally engaged in the business of manufacturing corn refined and corn based biochemical products in China. GBT also researches and develops corn based biochemical products. GBT is listed on the Main Board of the Hong Kong Stock Exchange Limited with stock code 809.HK on March 2001 and as of the Valuation Date, GBT owned 52.23% equity interest of GSH indirectly.

Global Sweeteners Holdings Limited (“GSH”)

GSH is a company incorporated in Cayman Islands with limited liability. GSH is principally engaged in production of corn sweeteners and corn refined products. Based on the audited financial statements of GSH, the net profit before tax of GSH were HK$107 million and HK$125 million for the years ended 31 December 2009 and 31 December 2010, respectively. GSH is listed on the Main Board of the Hong Kong Stock Exchange Limited with stock code 3889.HK on 20 September 2007 and was 52.23% owned by GBT as of the Valuation Date.

Changchun Jincheng Corn Development Co., Ltd. (“Changchun Jincheng”)

Changchun Jincheng is a company incorporated in PRC with limited liability and is indirectly wholly owned by GBT through the Vendor. Changchun Jincheng is principally engaged in the business of production of corn starch, corn gluten meal, corn fiber feed and corn oil.

Global Starch (BVI) Investments Limited (“Target Company”)

Target Company is an investment holding company incorporated in BVI with limited liability and wholly owned by the Vendor. As of the Valuation Date, the Target Company had no major assets or investment other than its holding of Global Starch (Changchun) Investments Limited (“HK Subsidiary”).

Global Starch (Changchun) Investments Limited (“HK Subsidiary”)

HK Subsidiary is a company incorporated in Hong Kong and its entire issued share capital is wholly owned by the Target Company. As of the Valuation Date, HK Subsidiary is an investment holding company and has no major assets or investment.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

TRANSACTION OVERVIEWS

In 2 September 2011, GSH entered into the S&P Agreement with the Vendor for the acquisition of the entire issued capital in, and shareholder’s loan of the Target Company. In accordance with the S&P Agreement, GSH had conditionally agreed to acquire 100% of the issued capital of the Target Company at the consideration of HK$510 million, in which shall be settled by GSH allotting and issuing 377,778,000 new shares of GSH to Global Corn Bio-chem Technology Company Limited which is a wholly owned subsidiary of GBT. The consideration was determined with reference to the fair value of the entire equity interest of Changchun Jincheng as of 30 June 2011.

As at the Valuation Date, Changchun Jincheng is an indirect wholly owned subsidiary of GBT, its entire equity interest is owned as to 90% by the Vendor and 10% by another wholly owned subsidiary of GBT.

In accordance with the conditions of S&P Agreement, prior to completion of the transaction, the Vendor will procure a reorganisation in which HK Subsidiary will acquire the entire equity interest of Changchun Jincheng and, after such acquisition, Changchun Jincheng will become a wholly owned subsidiary of HK Subsidiary.

The chart below shows the corporate structure of Changchun Jincheng upon completion of the transaction:

Global Sweeteners Holdings Limited (Stock Code: 3889.HK) (“GSH”) 100% Global Starch (BVI) Investment Limited (“Target Company”) 100% Global Starch (Changchun) Investments Limited (“HK Subsidiary”) 100% Changchun Jincheng Corn Development Co., Ltd. （長春金成玉米開發有限公司） (“Changchun Jincheng”)

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

ECONOMIC OVERVIEWS OF CHINA

Nominal GDP Growth in China

In 2010, China’s economic growth was sustained by the economic stimulus while the European and North American economies were slowing. The stimulus provided funds for further infrastructure projects and housing developments; some were used to assist local government to lend money to state-owned companies for housing estates, road and bridges developments. According to IMF’s World Economic Outlook as of April 2011, China’s economy has just taken over Japan in mid 2010 and become the second largest in the world after United States (the “U.S.”). It should not be to anyone’s surprise that if China can sustain its current growth rate, it could become the world’s largest economic (by nominal 1 gross domestic product) sometime as early as 2020 .

Table 1 — Worldwide GDP

Country	Country	GDP (Billions of USD)	GDP (Billions of USD)	GDP (Billions of USD)	GDP (Billions of USD)	GDP (Billions of USD)	GDP (Billions of USD)	GDP (Billions of USD)
		2009A	2010A	2011F	2012F	2013F	2014F	2015F
1	The U.S.	14,119	14,658	15,227	15,880	16,522	17,224	17,993
2	China	4,991	5,878	6,516	7,209	8,057	9,016	10,062
3	Japan	5,033	5,459	5,822	5,921	6,058	6,218	6,380
4	Germany	3,339	3,316	3,519	3,600	3,691	3,780	3,857
5	France	2,656	2,583	2,751	2,834	2,923	3,017	3,112
6	United Kingdom	2,182	2,247	2,472	2,602	2,743	2,891	3,051

Source: World Economic Outlook of April 2011, International Monetary Fund

The Chinese economy is one of the world’s current fastest growing economies. According to the National Bureau of Statistics of China, the country recorded an annual gross domestic product (“GDP”) of RMB34,051 billion in 2009, representing a compound annual growth rate (“CAGR”) of approximately 16.32% during the period from 2004 to 2009 when compared to the GDP of RMB15,988 billion in 2004.

Along with the rapid economic growth, disposable income levels have grown significantly. According to the National Bureau of Statistics of China, per capita annual disposable income of urban households in China has increased from RMB9,422 in 2004 to RMB17,175 in 2009, representing a CAGR of approximately 12.76%.

1 Adam, Shamim (14 November 2010). “China to Exceed U.S. by 2020, Standard Chartered Says”. Bloomberg Businessweek

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VALUATION REPORT OF CHANGCHUN JINCHENG

As GDP and personal disposable income continue to grow, consumers will demand for a greater variety of food and will be increasingly conscious about their health and diet, which will in turn increase their demand for nutritious, convenient and hygienic quality food. According to the National Bureau of Statistics of China, household consumption on food in China increased from RMB2.31 trillion in 2004 to RMB3.89 trillion in 2009, representing a CAGR of approximately 10.94%.

The following diagram shows the GDP per capita, annual urban and rural disposal income per capita and household consumption on food per capita from 2004 to 2009.

Figure 1 — China Economic Overview

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(RMB) China Economic Overview
30,000
25,000
20,000
15,000
10,000
5,000
0
2004 2005 2006 2007 2008 2009
GDP per capita 12,299 14,144 16,456 20,117 23,648 25,511
Urban Disposal Income per capita 9,422 10,493 11,760 13,786 15,781 17,175
Rural Disposal Income per capita 2,936 3,255 3,587 4,140 4,761 5,153
Household Consumption on
Food per capita 1,780 1,892 2,013 2,364 2,797 2,913
GDP per capita Urban Disposal Income per capita
Rural Disposal Income per capita Household Consumption on Food per capita
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Source: National Bureau of Statistics of China, China Statistical Yearbook 2010

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VALUATION REPORT OF CHANGCHUN JINCHENG

APPENDIX V

Population Growth

The population of China is almost one fifth of the world’s population. According to the National Bureau of Statistics of China, during the past decade, the population has grown from 1.26 billion to 1.33 billion, representing a CAGR of approximately 0.58%. Increasing population is a significant factor driving overall growth in demand for agricultural products.

Besides, population gains in developing countries along with increased urbanization and expansion of the middle class are particularly important for the projected growth in global food demand. The portion of urban population has increased from 36% in year 2000 to record high of 47% in year 2009, representing a CAGR of approximately 2.84%.

The following diagram shows the population growth and corresponding urban population growth of China from 2000 to 2009:

Figure 2 — Population and Urban Population Portion of China

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(10,000 persons)
Population of China (2000 - 2009)
134,000 0.5
0.45
132,000
0.4
0.35
130,000
0.3
128,000 0.25
0.2
126,000
0.15
0.1
124,000
0.05
122,000 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Population Portion of Urban Population
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Source: National Bureau of Statistics of China, China Statistical Yearbook 2010

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VALUATION REPORT OF CHANGCHUN JINCHENG

APPENDIX V

Currency Appreciation

The value of USD is expecting to keep going weak compared with RMB in the next decade. The appreciation of RMB implies China’s manufacturers can import goods in relatively “cheaper” price which favours the growth of manufacturing industries in China.

Besides, as the global demand recovers and external exports grow, the Chinese government will face increasing pressure from its trading partners, who demand the RMB to be appreciated. Beginning from 21 July 2005, China reformed the RMB exchange rate regime by moving into a managed floating exchange rate system with reference to a basket of currencies, and the exchange rate of RMB was re-valued to 8.11 per USD on 21 July 2005. Effective 21 May 2007, the floating band of RMB against USD is widened f rom ±0.3% to ±0.5% around the central parity published by the People’s Bank of China on each business day. By the end of December 2010, the exchange rate of RMB was 6.5911 per USD compared to 6.7813 at the end of June 2010.

The following diagram shows reference change rate of RMB per USD from 2000 to 2009:

Figure 3 — RMB/USD Exchange Rate

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RMB/USD Exchange Rate
8.5
8
7.5
7
6.5
6
5.5
5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
RMB
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Source: National Bureau of Statistics of China, China Statistical Yearbook 2010

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VALUATION REPORT OF CHANGCHUN JINCHENG

APPENDIX V

Price Inflation

Managing inflation risk is a key issue for the Chinese government from year 2010 onwards. In December 2010, consumer price index (“CPI”) for food industry increased by 9.6% and non-food prices increased by 2.1%, resulting in a 4.6% increase in overall CPI. In 2010, CPI of China increased by 3.3% on average and forecasted to increase by 5.0% in 2011 according to IMF World Economic Outlook, April 2011. Due to the success of the economic stimulus plan and the fear of property bubbles and inflation risk, the central government has tightened regulation in the financial system on banks to curb lending2, and a series of fine tuning measures such as stricter restrictions on mortgage lending, tighter requirement for second and third home purchases, introduction of property tax and further increment of bank’s reserve requirement ratio were implemented.

The chart below shows the historical CPI and CPI for food in China from 2000 to 2010:

Figure 4 — CPI and CPI for Food (Index Value, Preceding Year = 100)

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(%)
CPI and CPI (Food Industry) in China
120
115
110
105
100
95
90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Percentage to Preceeding year
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Source: National Bureau of Statistics of China, China Statistical Yearbook 2010

2 China’s Banks Face Hangover as Lending Slows. Wall Street Journal (Online). 2010 Aug 26 In: ABI/ INFORM Global database on the Internet cited 2010 Sep 7. Available from: http://www.proquest.com/ ; Document ID: 2120196431.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Government Policy on Natural Resource

In line with the improving per capita GDP, the Chinese government is also focusing on managing country’s stable development, following is the summary of China’s policies from 3 website of the World Bank :

In its 11th Five Year Plan (2006-2010) (“11 FYP”), the Chinese government set forth a “people centered” strategy aiming to achieve a “harmonious society” that balances economic growth with distributional and ecological concerns. Under this plan, considerable progress was made in improving basic public services in social protection, education and health, but structural issues remain under the strong momentum of China’s traditional pattern of growth.

The 12th Five Year Plan (2011-2015) (“12 FYP”), recently approved by the National People’s Congress, comes at a time when the need to rebalance toward a more domestic demand-led, service sector-oriented pattern of growth is stronger than before, partly due to the less favorable global outlook. The 12 FYP has set five main objectives:

Maintaining stable and fast economic growth, with a focus on price stabilization, more job creation, improved balance of payment, and higher quality of growth.
Achieving major progress in economic restructuring, with higher share of household consumption and the service sector, further urbanization, more balanced rural-urban development, lower energy intensity and carbon emissions, and better environment.
Increasing people’s incomes, reducing poverty and improving the living standards and quality of life.
Expanding access to basic public services, increasing the educational level of the population, developing a sound legal system, and ensuring a stable and harmonious society.
Deepening the reforms in the fiscal, financial, pricing and other key sectors, changing the role of the state, improving governance and efficiency, and further integrating into the world economy.

3 The World Bank (Online). Available from: http://www.worldbank.org/en/country/china/overview

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

The table below also provides an overview of China’s WTO compliant tariff rate quotas (TRQ) today on food-related commodities:

Table 2 — China’s WTO Compliant Tariff Rate Quotes on Food Commodities


Overview of China’s WTO Compliant Tariff Rate Quotas (TRQ)
Product*	Date of Final TRQ Implementation	Final Quota in Metric Tonnes	State Trading Enterprises Share of Quota	In-Quota Tariff Rates
Wheat and flour, etc.	2004	9,636,000	90%	Grain: 1% Flour, etc: 6%, 9% or 10%
Corn (Maize) and its flour, etc.	2004	7,200,000	60%	Grain: 1% Flour, etc: 9% or 10%
Rice and its flour, etc.	2004	2,660,000	50%	Grain: 1% Flour, etc: 9%
Sugar	2004	1,945,000	70%	15%

Source: China’s official submission to WTO

INDUSTRY OVERVIEWS

Corn Industry in China

Corn is the third largest consuming food in the world. China is the world’s second-largest producer of corn, behind the United States (“U.S.”). Currently, China is self-sufficient in respects to corn kernel consumption. However, according to United States Department of Agriculture (“USDA”), Agriculture Long Term Projection to 2020, China would become a net importer of 8 million tons of corn kernel in year 2020 projection, which is upto 8 times from that of year 2010 figures.

Table 1 — Corn Kernel Import and Export Estimation from 2010 to 2020

		(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)	(Unit: million metric tons)
Year	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Import	1.0	1.2	1.8	2.5	3.2	4.1	4.9	5.8	6.6	7.5	8.0
Export	0.2	0.2	0.2	0.2	0.2	0.2	0.2	0.1	0.1	0.1	0.1

Source: USDA, Agriculture Long Term Projection to 2020

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VALUATION REPORT OF CHANGCHUN JINCHENG

APPENDIX V

Figure 1 — China Corn Production and Consumption Trend (2002-2011)

Million MT

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180
160
140
120
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E
Production Consumption
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Source: J.P. Morgan, USDA

China’s strong demand on corn is mainly driven by its growing livestock and industrial sectors. According to J.P. Morgan’s research on corn industry, the growth rate of corn consumption is of 2.7% CAGR over the past 10 years and is growing at a faster rate of 3.2% CAGR over the past five years. As livestock feed constitutes for 60% of total corn consumption in China, the expansion of livestock sector is contributing to the increase use of corn.

Figure 2 — Corn Use in China

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Food
9%
Industrial
27%
Feed
64%
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Source: J.P. Morgan, NDRC

Corn price would have inflation pressure in long term as supplies are relied on the imports from major foreign corn exporters: Argentina, Former Soviet Region and the U.S.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Figure 3 — Corn Price Movement

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Source: Global Bio-Chem Tech Group Annual Report for Year 2010

Product Segmentation

The key business nature of the Company is manufacturing and selling of corn refined products from corn kernel. The vertical industry is shown below:

Figure 4 — Corn Refinery Vertical Industry

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Source: Global Bio-Chem Tech Group Annual Report for Year 2010

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Upstream and downstream refined products

Corn starch

Corn starch is a major kind of starch which can also be produced from cassava, wheat and potatoes. It has many food and non-food applications. China is the second largest native and modified starch producer in the world, following U.S.

Corn starch (also called cornflour), is the starch of the corn. It is also ground from the endosperm, or white heart, of the corn kernel. During the growing season of corn, the green leaves collect energy from the sun and transports the energy as sugar solution to the starch storage cells. The sugar is then converted to starch in the form of tiny granules occupying most of the cell interior. The conversion of sugar to starch takes place by means 4 of enzymes .

Corn starch is processed and refined from the kernels of corn by using a series of steeping, separation and grinding processes, and is commonly used as a thickening agent in sauces, and making corn syrup and sugars.

In year 2009, corn starch dominated China’s starch production with 17 million tons which consists approximately 93% of starch production in that year5. The major manufacturing plants are concentrated in Shandong, Hebei and Jilin with China’s major markets for corn starch are Guangdong, Jiangsu, Zhejiang and Shanghai. About 70% of corn starch is consumed as a raw material of downstream products namely starch sweetener, amino acids, polyol chemicals (e.g. ethanol) and modified starch and the remaining is consumed in food processing, beer, paper and chemical manufacturing.

The International Starch Institute, http://www.starch.dk

First Shanghai Group, Stock Analysis Report of Global Bio-Chem Tech Group, September 30, 2010

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Figure 5 — Corn Price and Corn Starch Price Trend

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Source: ABC International, www.starchweb.com

Corn Oil

Corn oil (Maize oil) is oil extracted from the germ of corn (maize). Its main use is in cooking, where its high smoke point makes refined corn oil a valuable frying oil. It is also a key ingredient in some margarines.

Corn oil is also a feedstock used for biodiesel. Other industrial uses for corn oil include soap, salve, paint, rustproofing for metal surfaces, inks, textiles, nitroglycerin, and insecticides. It is sometimes used as a carrier for drug molecules in pharmaceutical preparations.

Corn Gluten

Corn gluten meal (often simply called CGM) is a byproduct of corn (maize) processing that has historically been used as an animal feed. It can also be used as an organic herbicide.

Corn Fibre

Corn fibre such as other lignocellulosic materials is a heterogeneous complex of carbohydrate polymers and lignin. It is primarily composed of the outer kernel covering or seed pericarp, along with 10-25% adherent starch.

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Amino Acid (Lysine)

Lysine is produced mainly through further processing of corn starch and is mainly used for the production of animal feed. Larger portion of meat in the diet would drive the demand for amino acid as well.

Alcohol and ethanol

Corn, cassava or molasses can be used as the raw materials in the production of alcohol by fermentation method, and corn-based alcohol production accounts for approximately 50% of the total alcohol production by fermentation method in the China an alternative form of fuel energy.

Corn Sweeteners

Corn Sweeteners is used in foods to soften texture, add volume, prevent crystallization of sugar, and enhance flavor.

Related Regulations

The Chinese government has been imposing various strategies to consolidate players in the industry, stabilize corn price and imposing more strict food safety measures. Starting from December 2006, China’s top economic planning body the National Development and Reform Commission (“NDRC”) issued an industry restructuring plan to halt approval and filing of any new corn refinery projects and construction of new corn-processing plants with an annual capacity of up to 300,000 tons. This is to encourage large corn refinery enterprises to acquire those small and non-profitable counterparts to increase the production efficiency of the whole industry.

The intension of industry consolidation has been intensified recently following the Ministry of Finance waived tax deductions for corn cost paid by starch and biochemicals makers and was effective from 20 April 2011 to 30 June 2011. Besides, domestic financial institutes were asked to suspend providing loan to corn deep-processing manufacturers and traders for purchasing corn and was effective from 20 April 2011 to 30 June 2011 as well.

In order to stabilize food commodities price, which includes corn price, China’s State Council is intended to place measures to suppress rising commodity prices when necessary, according to its website. Price controls like those imposed in 2008 would limit manufacturers to raise prices.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Lastly, according to the “Twelve-Five Year Plan”, the Chinese government is focusing on developing an environmental-friendly country and food safety is a key concern among Chinese consumers in recent years after some disclosure of embarrassing scandals including melamine-tainted milk, recycled edible oil and vegetables contaminated with high level of pesticides and more.

Opportunity

There are several views for industry expansion:

Large corn product manufacturers can utilize their production capacity if they continue to fine-tune its farming, raw materials sourcing and storage, processing, sales and distribution and brand building strategies.
The promotion of renewable biofuel like ethanol fuel is one of the future drivers for increasing demand of corn refinery products. The “green” concept of biofuel is expecting in rising awareness globally in the future.

VALUATION METHODOLOGIES

The valuation of any asset or business can be broadly classified into one of three approaches, namely asset approach, market approach and income approach. In any valuation analysis, all three approaches must be considered, and the approach or approaches deemed most relevant will then be selected for use in the fair value analysis of that asset.

Asset Approach

This is a general way of determining a fair value indication of a business, business ownership interest, security, or intangible asset by using one or more methods based on the value of the assets net of liabilities.

Based on the theory that the value of a business is equal to the sum of its parts, value is established based on the cost of reproducing or replacing the property, less depreciation from physical deterioration and functional and economic obsolescence, if present and measurable.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

We have considered but rejected asset approach for this valuation due to:

The fair value of Changchun Jincheng will not be reflected by the costs of replacement, instead, the fair value is depending on economic benefits generated from their operations. This means that the future economic benefit is more important in valuing Changchun Jincheng than the book value or the cost of replacement.

Income Approach

This is a general way of determining a fair value indication of a business, business ownership interest, security, or intangible asset by using one or more methods that convert anticipated benefits into a present value amount.

In income approach, an economic benefit stream of the asset under analysis is selected, usually based on historical and/or forecasted cash flow. The focus is to determine a benefit stream that is reasonably reflective of the asset’s most likely future benefit stream. This selected benefit stream is then discounted to present value with an appropriate riskadjusted discount rate. Discount rate factors often include general market rates of return at the date of valuation, business risks associated with the industry in which the company operates, and other risks specific to the asset being valued.

We have considered and rejected income approach for this valuation due to:

The income approach involves many assumptions and estimations while not all of them can be easily quantified and obtained from the management of GSH; and
An important implication of income approach assumes that cash flows generated from operation of Changchun Jincheng are reinvested with at least the discount rate. There is uncertainty that this assumption would be realised.

Market Approach

This is a general way of determining a fair value indication of a business, business ownership interest, security, or intangible asset by using one or more methods that compare the subject to similar businesses, business ownership interests, securities, or intangible assets that have been sold.

Value is established based on the principle of substitution. This simply means that if one thing is similar to another and could be used for the other, then they must be equal. Furthermore, the price of two alike and similar items should approximate one another.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

We have considered and accepted market approach for this valuation due to:

Sufficient numbers of comparable public companies are available to facilitate a meaningful comparison.

APPLICATION OF MARKET APPROACH

Comparable Public Companies Method

The premise behind the Guideline Public Company Method is that prices of publicly traded stocks in the same or a similar industry provide objective evidence as to values at which investors are willing to buy and sell interest of companies in that industry.

In applying the Guideline Public Company Method, we compute a valuation multiple for various benefit streams for each guideline public company. The appropriate valuation multiple is determined and adjusted for the unique aspects of the subject company being valued. This multiple is then applied to the subject company being valued to arrive at an estimate of value for the appropriate ownership interest. Since the purpose of the valuation is to determine a controlling interest of Changchun Jincheng, the valuation multiples are based on enterprise value.

A valuation multiple represents a ratio that uses a comparative company’s enterprise value as at the Valuation Date as the numerator and a measure of the company’s operating results (or financial position) as the denominator. In this valuation, we had used Enterprise Value to Earnings-before-Interest-and-Tax multiple (“EV/EBIT”). EV/EBIT is an appropriate valuation multiple for the valuation of the controlling equity interest because it measures the amount of enterprise value can be created by a unit of earning before considering the leveraging effect and taxation effect. It is appropriate because EBIT measures the operating performance of a company and excludes the leveraging effect and taxation effect which are not related to the operating performance of the valuation subject. Thus EBIT provides a closer view of company’s earning ability related to its direct operation.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Once we have selected a number of guideline public companies and make the necessary adjustments to their financial information, the next step is to determine and compute the appropriate valuation multiples, and the calculation method is the same for all selected comparable companies. The process of computing the valuation multiple in this case consists of the following procedures:

Determination of the enterprise value for each comparative company as of the Valuation Date. First, the enterprise value for each comparative company is calculated by multiplying their share prices to the number of shares outstanding as of the Valuation Date in order to obtain the market capitalization of the comparable company. Second, adding back company’s debt, minority interest and preferred equity interest. Finally, subtracting cash and cash equivalent items of the company to obtain the enterprise value.
Determination of the comparison measurement — ie. EBIT for the appropriate time period. This measure represents the denominator of the multiple. In this valuation, we obtained the trailing 12-month EBIT from period of July 2010 to June 2011 in order to eliminate the seasonal effect in any particular period.

The application of this method depends on the selection of publicly traded guideline companies that are similar enough to the underlying business of Changchun Jincheng so as to provide a meaningful comparison. We exercised due care in the selection of guideline public companies by using reasonable criteria in deciding whether or not a particular guideline public company is relevant. When difference is so large such that meaningful comparison cannot be made, we would then question the use of this method.

Selection of Guideline Public Companies

Due care was exercised in the selection of Guideline Public Companies by using reasonable criteria in deciding whether or not a particular company is relevant.

In selecting the Guideline Public Companies, we consider the lines of business, products, market location of business and other criteria of Changchun Jincheng.

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VALUATION REPORT OF CHANGCHUN JINCHENG

APPENDIX V

The following is the list of guideline public companies that we have reviewed in connection with the valuation of Changchun Jincheng:

Guideline Public Companies	Guideline Public Companies	Ticker	Business Activities
1.	Global Sweeteners Holdings Limited	3889 HK	Produces corn sweeteners. Products include corn syrup, corn syrup solid, and sugar alcohol.
2.	China Starch Holdings Limited	3838 HK	Manufactures cornstarch, L-lysine hydrochloride salt and other ancillary corn-refined and corn-base products such as corn slurry, corn germ, corn fiber, corn glutten meal, and agricultural fertilizers.
3.	Global Bio-Chem Technology Group Company Limited	0809 HK	Manufactures corn refined and corn based biochemical products in China. Products include cornstarch, corn gluten, corn oil, feed, modified starch, corn sweeteners, and amino acids.
4.	Xiwang Sugar Holdings Company Limited	2088 HK	Refines natural corn to a variety of sweeteners and corn co-products that are widely applied in food and beverages, animal feed, and many consumer and industrialproducts.
5.	Luzhou Bio-Chem Technology Limited	LUBC SP	Produces corn starch, by-products and a wide range of corn bioproducts. Products include high maltose syrup, glucose, maltose syrup for beer, high fructose syrup, milk essences, meal fibre, and high-protein animal feeds.
6.	Sukhjit Starch & Chemicals Limited	SHSC IN	Manufactures cornstarch and related products. Produces dextrin, oxidized starches, corn gluten, liquid glucose, dextrose monohydrate, and high maltose syrup.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

We believe that the selected listed companies are sufficiently comparable to the operations of Changchun Jincheng and permit a meaningful comparison. These companies were selected as appropriate comparable companies because they all engage in manufacturing corn starch and corn refined products in Asia Pacific region, especially focus in PRC region and such lines of business are comparable to those of Changchun Jincheng under valuation. Details of the calculation of enterprise value multiples for the comparable companies are as follows:

Ticker	Enterprise Value (in millions)	EBIT in FY 2010 (in millions)	EV/EBIT

3889 HK	HK$2,445	HK$178	13.71x
3838 HK	RMB1,543	RMB184	8.38x
0809 HK	HK$15,684	HK$859	18.26x
2088 HK	RMB2,692	RMB306	8.80x
LUBC SP	RMB846	RMB39	21.96x
SHSC IN	INR2,923	INR253	11.54x

Median			12.62x
Mean			13.78x

Source: Bloomberg

The median values are selected for each of the valuation multiples for the valuation of the equity interest of Changchun Jincheng to minimise the effect of possible outliers. Selected multiples for the valuation are listed as below:

Selected Multiple

Median

EV/EBIT

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Premium for Control

Premium for control is generally regarded as the amount in excess of the current traded market price that a buyer is willing to pay to acquire the control of a publicly traded company. A buyer is willing to pay a premium for control when obtaining the controlling advantages they would not receive if only a minority interest was purchased.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Estimating the value of premium for control is necessary when valuing large blocks of shares. The size of the premium for control varies from industry to industry, with the size of the company.

In our valuation analysis, the equity interest acquired indirectly by GSH represents entire issued share capital of Changchun Jincheng. Therefore, GSH obtains the advantage of controlling after the acquisition and it is reasonable to apply a premium for control to reflect this advantage. For this reason, we believe a premium for control of 20% is fair and reasonable for the valuation of equity interest of Changchun Jincheng.

Discount for Lack of Marketability (“DLOM”)

Private companies generally do not have a ready market for their stocks, a discount for lack of marketability/illiquidity is applicable in this valuation. The discount for lack of marketability/illiquidity recognizes the fact that an investment is worth more if the interest is readily marketable, or conversely, worth less if it is not.

In selecting the appropriate discount for lack of marketability/illiquidity, we considered the length of time and effort expended by management necessary to sell a controlling interest in the company. This typically would take at least three to nine months if a transaction could be consummated at all. A controlling interest does enjoy the benefit of controlling the cash flow stream of the company during this time period and we considered this fact as well. Finally, we considered the expenses that are typically incurred to sell a business which are substantial and include legal fees, accounting fees, and intermediary fees.

In our valuation analysis, the equity interest of Changchun Jincheng is not publicly traded nor does an established active market exist for it. Moreover, the size of Changchun Jincheng is relatively small as compared with that of listed and publicly traded companies. After considering that the valuation of the equity interest of Changchun Jincheng is on a controlling and non-marketable interest basis and the above factors mentioned, prudent investors would apply a discount to reflect its lack of marketability/liquidity. For this reason, we believe a DLOM of 15% is fair and reasonable for this valuation.

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

Determination of Value

Based on the investigation and analysis stated above and on the valuation method employed, it is our opinion that the 100% equity interest of Changchun Jincheng is as follows:

Selected Multiple
Subject Financial Performance
(Trailing 12-Month EBIT) for the period
from 1 July 2010 to 30 June 2011
RMB
Implied Enterprise Value
_Less:_Total Debt (Bank Borrowings)
_Add:_Cash and Cash Equivalents
Implied Equity Value before Premium for Control &
Discount for Lack of Marketability
RMB
_Add:_Premium for Control
20%
Implied Equity Value after Premium for Control but
before DLOM
RMB
_Less:_Discount for Lack of Marketability
-15%
Implied Equity Value after Premium for Control &
Discount for Lack of Marketability (rounded)
RMB
Exchange rate of HK$/RMB as at the Valuation Date
1.2042
Fair value of Changchun Jincheng (rounded)
HK$

EV/EBIT
12.62x
84,208,000
1,063,032,000
(687,500,000)
59,063,000
434,595,000
86,919,000
521,514,000
(78,227,000)
443,287,000
533,810,000

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

VALUATION ASSUMPTIONS

Equity value is an economic measure reflecting the fair value of the whole business to the equity owners. Our valuation on equity interest of Changchun Jincheng will be performed by using comparable public company methodology. There are a few assumptions that have to be established in order to sufficiently support our concluded value of equity interest of Changchun Jincheng.

there will be no material changes in the existing political, legal, fiscal, foreign trade and economic conditions in Hong Kong, China and other worldwide places where Changchun Jincheng is carrying on its businesses;
there will be no significant deviation in the industry trends and market conditions from the current market expectation;
there will be no material changes in interest rates or foreign currency exchange rates from those currently prevailing;
there will be no major changes in the current taxation law in Hong Kong, China and countries of origin of our comparable companies;
all relevant legal approvals, business certificates or licenses for the normal course of operation are formally obtained, in good standing and that no additional costs or fees are needed to procure such during the application; and
Changchun Jincheng will retain competent management, key personnel, and technical staff to support the ongoing business operations.

LIMITING CONDITIONS

We have made no investigation of and assumed no responsibility for the title to or any liabilities against Changchun Jincheng.

The opinions expressed in this report have been based on the information supplied to us by GSH and its staff, as well as from various institutes and government bureaus without verification. All information and advice related to this valuation are provided by the

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

management of GSH. Readers of this report may perform due diligence themselves. We have exercised all due care in reviewing the supplied information. Although we have compared key supplied data with expected values, the accuracy of the results and conclusions from the review are reliant on the accuracy of the supplied data. We have relied on this information and have no reason to believe that any material facts have been withheld, or that a more detailed analysis may reveal additional information. We do not accept responsibility for any errors or omissions in the supplied information and do not accept any consequential liability arising from commercial decision or actions resulting from them.

This valuation reflects facts and conditions existing at the Valuation Date. Subsequent events have not been considered, and we have no obligation to update our report for such events and conditions.

SYNTHESIS AND RECONCILIATION

The following comparative data summarizes the various methods that we have accepted or considered and rejected, along with their respective final values. Each method is rated relative to the applicability of the method relative to the facts and circumstances of Changchun Jincheng, and strengths/weaknesses are discussed.

Asset Approach

Replacement, Liquidation or Book Value Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rejected

Income Approach

Discounted Cash Flow Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rejected

Market Approach

Guideline Public Company Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .HK$533,810,000 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accepted

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APPENDIX V VALUATION REPORT OF CHANGCHUN JINCHENG

CONCLUSION OF VALUE

In conclusion, based on the investigation and analysis stated above and on the valuation method employed, it is our opinion that 100% equity interest of Changchun Jincheng Corn Development Co., Ltd. as of 30 June 2011 is as follows:

100% Equity Value

Fair Value

Changchun Jincheng Corn Development Co., Ltd.

HK$533,810,000

The opinion of value was based on generally accepted valuation procedures and practices that rely extensively on the use of numerous assumptions and consideration of many uncertainties, not all of which can be easily quantified or ascertained.

We hereby certify that we have neither present nor prospective interests in the subject under valuation. Moreover, we have neither personal interests nor bias with respect to the parties involved.

This valuation report is issued subject to our general service conditions.

Yours faithfully,

GREATER CHINA APPRAISAL LIMITED

Analyzed and reported by:

Rachel S.K. Au, CVA, CPA

Head of Business Advisory

Ms. Rachel S.K. Au, CPA, Certified Valuation Analyst (CVA) of the International Association of Consultants, Valuators and Analysts (IACVA), is experienced in performing business and intangible asset valuation & advisory for both private and public companies for various purposes, including financial reporting, merger and acquisition, restructuring, disposal, liquidation and litigation. Her experience covers diverse industries, including healthcare, financial services, mining, toll road, information technology, manufacturing and retail.

Kenneth H.M. Ng

Consultant

Mr. Kenneth H.M. Ng has substantial experience in valuation of business and intangible assets including operating licenses, mining licenses, trading contracts, customer bases, tradename and trademark. His experience covers wide range of industries including healthcare, financial services, mining, toll road, information technology, manufacturing and retail.

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GENERAL INFORMATION

APPENDIX VI

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date were as follows:

Authorised: HK$ 100,000,000,000 Shares 10,000,000,000

Issued and fully paid: 1,149,808,000 Shares 114,980,800

3. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of SFO), or are required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or are required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange are as follows:

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GENERAL INFORMATION

APPENDIX VI

				Percentage of
				the relevant
				class of issued
	The Company/		Number and	share capital of
	name of		class of	the Company/
	associated	Capacity/	securities held	associated
Name of Director	corporation	nature of interest	(Note 1)	corporation
				(%)
Kong Zhanpeng	GBT	Beneficial owner	18,256,000	0.56
			ordinary shares of
			HK$0.10 each (L)
	GBT	Interest of	241,920,000	7.43
		a controlled	ordinary shares of
		corporation	HK$0.10 each (L)
			(Note 2)
	The Company	Interest of	1,984,000 Shares (L)	0.17
		a controlled	(Note 2)
		corporation
	The Company	Beneficial owner	6,000,000 Shares (L)	0.52
			(Note 3)
Zhang Fazheng	The Company	Beneficial owner	2,000,000 Shares (L)	0.17
			(Note 4)
Xu Zhouwen	GBT	Beneficial owner	24,155,600	0.74
			ordinary shares of
			HK$0.10 each (L)
	GBT	Interest of	295,456,000	9.07
		a controlled	ordinary shares of
		corporation	HK$0.10 each (L)
			(Note 5)
	The Company	Beneficial owner	6,000,000 Shares (L)	0.52
			(Note 6)

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GENERAL INFORMATION

APPENDIX VI

				Percentage of
				the relevant
				class of issued
	The Company/		Number and	share capital of
	name of		class of	the Company/
	associated	Capacity/	securities held	associated
Name of Director	corporation	nature of interest	(Note 1)	corporation
				(%)
Lee Chi Yung	The Company	Beneficial owner	4,000,000 Shares (L)	0.34
			(Note 7)
Chan Yuk Tong	The Company	Beneficial owner	2,000,000 Shares (L)	0.17
			(Note 8)
Ho Lic Ki	The Company	Beneficial owner	2,000,000 Shares (L)	0.17
			(Note 9)

Notes:

The letter “L” represents the director’s interests in the shares and underlying shares of the Company or its associated corporation.
These shares are held by Hartington Profits Limited, a company incorporated in the BVI, the entire issued share capital of which is beneficially owned by Mr. Kong Zhanpeng. Mr. Kong is the sole director of Hartington Profits Limited.
These shares are underlying shares comprised in the options granted to Mr. Kong Zhanpeng pursuant to the share option scheme of the Company.
These shares are underlying shares comprised in the options granted to Mr. Zhang Fazheng pursuant to the share option scheme of the Company.
These shares are held by Crown Asia Profits Limited, a company incorporated in the BVI, the entire issued share capital of which is beneficially owned by Mr. Xu Zhouwen. Mr. Xu is the sole director of Crown Asia Profits Limited.
These shares are underlying shares comprised in the options granted to Mr. Xu Zhouwen pursuant to the share option scheme of the Company.
These shares are underlying shares comprised in the options granted to Mr. Lee Chi Yung pursuant to the share option scheme of the Company.
These shares are underlying shares comprised in the options granted to Mr. Chan Yuk Tong pursuant to the share option scheme of the Company.
These shares are underlying shares comprised in the options granted to Mr. Ho Lic Ki pursuant to the share option scheme of the Company.

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APPENDIX VI

GENERAL INFORMATION

Saved as disclosed above, as at the Latest Practicable Date, none of the directors and the chief executive of the Company has any interests and short positions in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of SFO), or are required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or are required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

Save for Mr. Kong Zhanpeng and Mr. Xu Zhouwen, two of the executive Directors, were interested in the S&P Agreement by virtue of their interest in the shares of GBT, none of the Directors had any interest, direct or indirect, in any assets which have been since 31 December 2010, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Enlarged Group, or are proposed to be acquired or disposed of by or leased to any member of the Enlarged Group as at the Latest Practicable Date.

As at the Latest Practicable Date, Mr. Kong Zhanpeng and Mr. Xu Zhouwen, two of the executive Directors, were interested in transactions as contemplated under the following agreements with the Enlarged Group by virtue of their interest in the shares of GBT:

(1) the Utilities Master Supply Agreement;
(2) the Corn Starch Master Purchase Agreement;
(3) corn sweeteners master sales agreement dated 16 April 2009 and entered into between the Group as supplier and the GBT Group as purchaser for the supply of corn sweeteners by the Group; and
(4) the Jinzhou Sales Agency Agreement.

Please refer to the announcements of the Company dated 20 April 2009 and 10 December 2010 for further details. Save as the aforesaid, none of the Directors was materially interested in any contract or arrangement subsisting as at the date thereof and which was significant in relation to the business of the Enlarged Group as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX VI

4. SUBSTANTIAL SHAREHOLDERS

At the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons, other than a director or chief executive of the Company, who has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who is, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

	Company/		Number and class of	Approximate
Name of	Name of Group		securities	percentage of
shareholder	member	Capacity	(Note 1)	shareholding
				(%)
Global Corn	The Company	Beneficial owner	600,000,000 Shares	52.18
Bio-chem
GBT	The Company	Interest of a	600,000,000 Shares	52.18
		controlled
		corporation
		(Note 2)
		Beneficial owner	500,000 Shares	0.04
Dalian Economic	Dalian Angus	Beneficial owner	Registered capital	29
Development Zone	Beef Co., Ltd.		for the sum of
Lishida Trading			RMB3,480,000
Co., Ltd.
Vendor	Target Company	Beneficial owner	1 ordinary share of	100
			US$1
Vendor	Changchun	Beneficial owner	Registered capital	90
	Jincheng		for the sum of
			RMB88,830,000
Changchun Dacheng	Changchun	Beneficial owner	Registered capital	10
	Jincheng		for the sum of
			RMB9,870,000

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GENERAL INFORMATION

APPENDIX VI

Notes:

The letter “L” denotes the person’s interest in the share capital of the Company.
These shares are registered in the name of Global Corn Bio-chem, which is a wholly-owned subsidiary of GBT. Therefore, GBT is deemed to be interested in all the shares in which Global Corn Bio-chem is interested according to the SFO. Mr. Xu Zhouwen is a director of GBT.

Saved as disclosed above, no person, other than a director or chief executive of the Company, who has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who is, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

5. SERVICE AGREEMENTS

None of the Directors had entered or proposed to enter into a service contract with any member of the Enlarged Group (other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)) as at the Latest Practicable Date.

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company or any member of the Enlarged Group within the two years preceding the date of this circular and are or may be material:

(a) the S&P Agreement;
(b) a depositary deed dated 4 December 2009 (“First Depositary Deed”) entered into between the Company and First Commercial Bank Co., Ltd. (“First Commercial Bank”) in relation to the appointment of First Commercial Bank as the depositary bank for the Taiwan depositary receipts (“TDR”) representing shares of the Company;
(c) a termination agreement dated 18 March 2010 entered into between the Company and First Commercial Bank in relation to the termination of the First Depositary Deed;

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GENERAL INFORMATION

APPENDIX VI

(d) a depositary deed dated 18 March 2010 entered into between the Company and First Commercial Bank in relation to the appointment of First Commercial Bank as the depositary bank for the TDR;
(e) an agency service agreement dated 1 December 2009 entered into between Horizon Securities Co., Ltd. (“Horizon Securities”), the Company and First Commercial Bank in relation to the appointment of Horizon Securities as the securities service agent for the holders of the TDR; and
(f) an underwriting agreement dated 18 March 2010 entered into between the Company (for itself and as agent for GBT) and Horizon Securities, KGI Securities Co. Ltd. and Grand Cathay Securities Corporation in relation to the underwriting of the TDR.

7. COMPETING INTERESTS

Mr. Kong Zhanpeng and Mr. Xu Zhouwen, two of the executive Directors, are interested in approximately 7.99% and 9.81% of the issued share capital of GBT through their interest as beneficial owners and their respective interest in Hartington Profits Limited and Crown Asia Profits Limited. The GBT Group is engaged in, among other things, the production and sale (the “Excluded Business”) of corn starch and the Co-Products. Pursuant to a non-compete undertaking (“Non-compete Undertaking”) given by GBT and Global Corn Bio-chem dated 3 September 2007 in favour of the Group (as supplemented by a waiver executed by the Company to GBT and Global Corn Bio-chem dated 24 September 2008), the GBT Group is restricted from engaging in any business that may compete with the business of the Group from time to time.

The Group is principally engaged in the manufacture and sale of various corn sweeteners, which are classified into two categories: corn syrup (glucose syrup, maltose syrup and high fructose corn syrup) and corn syrup solid (crystallized glucose and maltodextrin). The production and sale of corn starch and Co-products are not the core business of the Group and the management team of the Group is substantially independent from the management team of the GBT Group. The core business of the Group is not dependent or otherwise rely on the sales of corn starch and/or the Co-products and also given the execution of the Non-compete Undertaking, the Directors consider that the Group is capable of carrying on its own business independently of, and at arm’s length from, the Excluded Business.

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GENERAL INFORMATION

APPENDIX VI

In order to facilitate the Group’s sale of corn starch and Co-Products to its customers at arm’s length from the GBT Group’s Excluded Business and protect the Group from any possible direct and indirect competition from the GBT Group in respect of the Excluded Business, Jinzhou Yuancheng, a wholly-owned subsidiary of the Company, and Global Corn have entered into the Yuancheng Sales Agency Agreement. Under the Yuancheng Sales Agency Agreement, Jinzhou Yuancheng has appointed Global Corn (for itself and on behalf of the GBT Group) as its exclusive agent for the sale of the Co-products and corn starch in excess of its internal consumption from time to time produced by Jinzhou Yuancheng from 1 January 2011 to 31 December 2013, subject to renewal by Jinzhou Yuancheng. Under the Yuancheng Sales Agency Agreement, the GBT Group would use its best endeavours to procure the sale and marketing of the Co-products and corn starch as exclusive agent of Jinzhou Yuancheng, and would sell the Co-products and corn starch produced by Jinzhou Yuancheng in priority to any Co-products and corn starch produced by any members of the GBT Group (other than those goods produced by Global Corn or any member of the GBT Group for sales in Jilin and Heilongjiang Provinces of the PRC). Jinzhou Yuancheng would reimburse the GBT Group’s for its costs for the performance of its obligations under the Yuancheng Sales Agency Agreement, and there would not be any other agency fee payable to the GBT Group for the services rendered.

Upon completion of the S&P Agreement, Changchun Jincheng and Global Corn will enter into the Jincheng Sales Agency Agreement. Under the Jincheng Sales Agency Agreement, Changchun Jincheng will appoint Global Corn (for itself and on behalf of the GBT Group) as its exclusive agent for the sale of the Co-products and corn starch in excess of its internal consumption from time to time produced by Changchun Jincheng from the date of Completion to 31 December 2013. The GBT Group will use its best endeavours to procure the sale and marketing of the Coproducts and corn starch as exclusive agent of Changchun Jincheng, and will sell the Co-products and corn starch produced by Changchun Jincheng in priority to any Co-products and corn starch produced by any members of the GBT Group (other than those goods produced by Global Corn or any member of the GBT Group for sales in Jilin and Heilongjiang Provinces of the PRC). Changchun Jincheng shall reimburse the GBT Group for its costs for the performance of its obligations under the Jincheng Sales Agency Agreement on a semi-annual basis and there will not be any other agency fee being charged by the GBT Group for the services rendered.

As at the Latest Practicable Date, save as disclosed above, none of the Directors and his associates (as would be required to be disclosed under Rule 8.10 of the Listing Rules if any of them were a controlling Shareholder) was interested in any business part from the business of the Group, which competes or is likely to compete, either directly or indirectly, with that of the Group.

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GENERAL INFORMATION

APPENDIX VI

8. LITIGATION

As the Latest Practicable Date, neither the Company nor any members of the Enlarged Group was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance know to the Directors to be pending or threatened by or against either the Company or any of its subsidiaries.

9. QUALIFICATION AND CONSENT OF EXPERT

(a) The following are the qualifications of the expert who has given opinion or, advice contained in this circular:

Name Qualifications

Ernst &Young Certified Public Accountants Partners Capital A corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO

Greater China Appraisal Valuer Limited (“Greater China”)
(b) As at the Latest Practicable Date, each of Ernst & Young, Partners Capital and Greater China did not have any direct or indirect shareholding, direct or indirect, in any member of the Enlarged Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Enlarged Group.
(c) Each of Ernst & Young, Partners Capital and Greater China has respectively given and has not withdrawn their respective written consent to the issue of this circular with the inclusion of their respective letter and references to their respective name in the form and context in which they are included.
(d) Each of Ernst & Young, Partners Capital and Greater China did not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Enlarged Group, or which are proposed to be acquired or disposed of by or leased to any member of the Enlarged Group since 31 December 2010, the date to which the latest published audited financial statements of the Company were made up.

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GENERAL INFORMATION

APPENDIX VI

(e) The letters and report from Ernst & Young, Partners Capital and Greater China are given as of the date of this circular for incorporation herein.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business in Hong Kong of the Company at Unit 2403, Admiralty Centre, Tower II, 18 Harcourt Road, Hong Kong during normal business hours from 26 September 2011 up to and including 17 October 2011:

(a) the memorandum and articles of association of the Company;
(b) the annual report of the Company for the year ended 31 December 2010;
(c) the letter from the Independent Board Committee, the text of which is set out on pages 23 to 24 of this circular;
(d) the letter from Partners Capital, the text of which is set out on pages 25 to 49 of this circular;
(e) the accountants’ report on Changchun Jinchang from Ernst & Young dated 26 September 2011, the text of which is set out on pages 52 to 93 of this circular;
(f) the letter from Ernst & Young setting in respect of the unaudited pro forma financial information of the Enlarged Group, the text of which is set out on pages 94 to 101 of this circular;
(g) the valuation report from Greater China date 26 September 2011, the text of which is set out on pages 113 to 142 of this circular;
(h) the material contracts as referred to in the paragraph 6 of this appendix;
(i) the letter of consent as referred to in paragraph 9 of this appendix;
(j) the S&P Agreement;
(k) the Utilities Master Supply Agreement; and
(l) a copy of this circular.

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GENERAL INFORMATION

APPENDIX VI

11. MISCELLANEOUS

(a) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.
(b) The head office and principal place of business of the Company in Hong Kong is at Unit 2403, Admiralty Centre, Tower II, 18 Harcourt Road, Hong Kong.
(c) The Hong Kong branch share registrar and transfer office of the Company is Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(d) The company secretary of the Company is Mr. Lee Chi Yung. Mr. Lee is the member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants.
(e) The English text of this circular shall prevail over its Chinese text.

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NOTICE OF EGM

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

(incorporated in the Cayman Islands with limited liability)

(Stock code: 03889)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Global Sweeteners Holdings Limited (the “Company”) will be held at Conference room, 3/F, Nexxus Building, 77 Des Voeux Road Central, Hong Kong on 17 October 2011 at 10:30 a.m. for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTIONS

“ THAT the sale and purchase agreement (the “ S&P Agreement ”) dated 2 September 2011 (a copy of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) and entered into between Global Corn Investments (HK) Limited as vendor and the Company as purchaser and the transactions contemplated thereby be and are hereby approved and that the directors of the Company be and are hereby authorised to take any action and sign any document (under seal, if necessary) as they consider necessary, desirable or expedient in connection with the S&P Agreement or the transactions contemplated thereby.”
“ THAT the annual caps of HK$268 million and HK$324 million, being the revised caps (the “ Revised Caps ”) for each of the years ending 31 December 2011 and 2012 in respect of the continuing connected transactions contemplated under the utilities master supply agreement (“ Utilities Master Supply Agreement ”) dated 16 April 2009 (a copy of which has been produced to the meeting marked “B” and signed by the chairman of the meeting for the purpose of identification) and entered into between Changchun Dacheng Corn Development Co., Ltd. and Changchun Dihao Foodstuff Development Co., Ltd., be and are hereby approved and confirmed and that the directors of the Company be and are hereby authorized to take all actions and execute all documents which they deem necessary, desirable or appropriate in order to implement and validate anything related to the continuing connected transaction under the Utilities Master Supply Agreement and the Revised Caps.”

By Order of the Board

Global Sweeteners Holdings Limited Kong Zhangpeng Chairman

Hong Kong, 26 September 2011

for identification purposes only

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NOTICE OF EGM

Notes:

A member of the Company entitled to attend and vote at the meeting above is entitled to appoint in written form one or, if he is the holder of two or more shares (the “Shares”) of the Company, more proxies to attend and vote instead of him. A proxy need not be a member of the Company.
In the case of joint holders of Shares, any one of such joint holders may vote, either in person or by proxy, in respect of such Share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the above meeting, personally or by proxy, that one of the said persons so present whose name stands first in the register in respect of such share shall alone be entitled to vote in respect thereof.
In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney duly authorised, and must be deposited with the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof) not less than 48 hours before the time fixed for holding of the meeting or any adjournment thereof.
Delivery of an instrument appointing a proxy should not preclude a member from attending and voting in person at the above meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

As at the date of this notice, the Board comprises four executive directors, namely Mr. Kong Zhanpeng, Mr. Zhang Fazheng, Mr. Xu Zhouwen and Mr. Lee Chi Yung; and three independent non-executive directors, namely Mr. Chan Yuk Tong, Mr. Gao Yunchun and Mr. Ho Lic Ki.

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AI assistant

Global Corn Group Limited — Proxy Solicitation & Information Statement 2011

50915_rns_2011-09-26_f2ad8b9e-2a71-4cb2-9015-0047852a33b9.pdf

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

MAJOR AND CONNECTED TRANSACTION TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

MAJOR AND CONNECTED TRANSACTION TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

INTRODUCTION

S&P AGREEMENT

Date

Parties

Assets involved

LETTER FROM THE BOARD

Conditions

LETTER FROM THE BOARD

Consideration

LETTER FROM THE BOARD

Completion

(a) Before Reorganisation and before the Completion

(b) Upon completion of the Reorganisation but before the Completion

(c) Upon Completion

LETTER FROM THE BOARD

EFFECT ON SHAREHOLDING STRUCTURE

REASONS FOR AND BENEFITS OF THE TRANSACTION

LETTER FROM THE BOARD

Financial effect of the Transaction

LETTER FROM THE BOARD

Listing Rules implications

REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

Background

LETTER FROM THE BOARD

Historical figures and annual caps

The Revised Caps

LETTER FROM THE BOARD

Listing Rules implications

INFORMATION ON THE TARGET GROUP

1. Target Company

LETTER FROM THE BOARD

2. HK Subsidiary

3. Changchun Jincheng

LETTER FROM THE BOARD

4. Reorganisation

BACKGROUND INFORMATION OF THE VENDOR, THE GBT GROUP AND THE GROUP

EGM

LETTER FROM THE BOARD

RECOMMENDATION

FURTHER INFORMATION

GLOBAL SWEETENERS HOLDINGS LIMITED 大成糖業控股有限公司 *

MAJOR AND CONNECTED TRANSACTION

TRANSACTION IN RELATION TO A CORN REFINERY PLANT

CONTINUING CONNECTED TRANSACTION

REVISION OF ANNUAL CAPS FOR PROVISION OF UTILITIES SERVICES UNDER THE UTILITIES MASTER SUPPLY AGREEMENT

RECOMMENDATION

Independent Board Committee

Chan Yuk Tong Gao Yunchun Ho Lic Ki

LETTER FROM PARTNERS CAPITAL

MAJOR AND CONNECTED TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

LETTER FROM PARTNERS CAPITAL

LETTER FROM PARTNERS CAPITAL

THE TRANSACTION

Principal factors considered

1. Background of and reasons for the Transaction

(i) Background of the Target Group

LETTER FROM PARTNERS CAPITAL

LETTER FROM PARTNERS CAPITAL

LETTER FROM PARTNERS CAPITAL

2. Terms of the S&P Agreement

LETTER FROM PARTNERS CAPITAL

LETTER FROM PARTNERS CAPITAL

• Share price performance

Global Corn Group Limited Proxy Solicitation & Information Statement 2011