SUBSCRIPTION OF NEW SHARES OF
LUDAO INVESTMENTS HOLDINGS LIMITED

On 14 July 2008,China Flavors and Fragrance Group ,the parent company of Shenzhen Boton Flavors and Fragrance Co.,Ltd, agreed to subscribe for the new shares of Taizhou Ludao which is the largest-scale fog agent manufacturer and one of the members of national packing industry group ,at the consideration of RMB￥26,000,000 (equivalent to approximately USD 3,768,117). Taizhou Ludao represents approximately 10% of the enlarged issued share capital.

The turnover of Taizhou Ludao from 1 January 2008 to 31 March 2008 was RMB3, 262,597(equivalent to approximately USD472, 840). It is forecasted that the turnover of Taizhou Ludao will increased about 20-30% every year after Subscription.

China Flavors and Fragrance Group view that the Subscription is beneficial to the Group.