Nevada
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33-1219070
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State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Nos.)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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ITEM 1. BUSINESS
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3
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ITEM 1A. RISK FACTORS
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46
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ITEM 2. FINANCIAL INFORMATION.
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46
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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46
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ITEM 3. PROPERTIES
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67
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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69
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ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
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71
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ITEM 6. EXECUTIVE COMPENSATION
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72
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
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75
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ITEM 8. LEGAL PROCEEDINGS
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76
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ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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76
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ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
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77
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ITEM 11. DESCRIPTION OF REGISTRANTS’ SECURITIES TO BE REGISTERED
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80
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ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
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80
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ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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81
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ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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81
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ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
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81
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Date
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Description of settlements
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DR.
US$
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CR.
US$
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Balance Due
US$
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|||||||
30.11.2008
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Part Payment made for the acquisition
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4,422.736.00 | 3,577,264.00 | ||||||||
As at 31.12.2009
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Due to the seller
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3,577,264.00 | |||||||||
30.07.2010
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Payments effected by issuance of 975,000 shares @ 0.75 each to a third party
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Adjustment of 1,734.00
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|||||||||
731,250.00 | 2,844,280.00 | ||||||||||
31.08.2010
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Payments effected by issuance of 1,625,000 shares @ 0.75 each to a third party
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1,218,750.00 | 1,625,530.00 | ||||||||
30. 09.2010
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Payments effected by issuance of 1,380,000 shares @ 0.75 each to a third party
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1,035,000.00 | 590,530.00 | ||||||||
31.12.2010
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Payments effected by issuance of 790,855 shares @ 0.75 each to a third party
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590,530.00 | 0 |
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·
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Qinghai Province Sanjiang Group Company Limited (English translation) (“Qinghai Sanjiang”), a PRC government owned company with major business activities in the agriculture industry; and
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·
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Guangzhou City Garwor Company Limited (English translation) (“Garwor”), a private limited company incorporated in the PRC, specializing in sales and marketing.
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3.
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Payment of the Balance of the Purchase Price
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3.1
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The balance of the Purchase Price amounting to RMB199,589,000.00 (equivalent to US$30,240,758.00) only (hereinafter called "the Balance Purchase Price”) shall be paid by the Purchaser in the manner set forth hereunder:-
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(a)
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A sum of RMB25,055,000.00 (equivalent to US$3,796,212.50) (hereinafter called “the Further Payment”) in cash shall be paid by the Purchaser to the Vendor by way of 5 equal instalments of RMB5,011,000.00 (equivalent to US$759,242.50) each, on or before the following dates :-
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(1)
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April 30, 2011 ;
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(2)
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June 30, 2011 ;
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(3)
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August 31, 2011 ;
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(4)
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October 31, 2011; and
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(5)
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December 31, 2011.
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(b)
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The remainder of the Balance Purchase Price in the amount of RMB174,534,000.00 (equivalent to US$26,444,545.00) (hereinafter referred to as “the Final Payment”) shall be settled by the Purchaser by way of cash contribution towards part payment of the Land Price.
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3.2
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The parties hereto hereby acknowledge that despite the fact the respective relevant land authorities of the said Lands (hereinafter collectively referred to as “the said Land Authorities”) have verbally agreed to contribute a combined amount of RMB36,974,996.00 towards the payment of the Land Price, either by way of a grant, discount or otherwise (hereinafter called “the said Rebate”), it shall not be deemed a discharge of the Purchaser’s obligation herein towards payment of the Purchase Price or any part thereof.
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3.3
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The Purchaser hereby further acknowledges and covenants that the Purchaser shall procure:-
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(a)
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the said Rebate of the said Land Authorities ; and
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(b)
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the approval by the said Land Authorities of the transfer of the said Land Use Rights of the said Lands to the Vendor and/or the Vendor’s Associated Companies.
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4.
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Completion
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4.1
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The Completion of this Agreement shall take place upon approval of the granting of the said Land Use Rights of the said Lands by the said Land Authorities to the Vendor being obtained (hereinafter referred to as “the Completion Date”), whereupon the Purchaser shall be entitled to all rights thereafter attaching to the Vendor’s Shares or accruing thereon including without limitation, all bonuses, rights, dividends and other distributions declared, paid or made thereof thereafter free from all liens, assignments, pledges, charges and other encumbrances whatsoever Provided that the Purchaser shall have paid the Purchase Price in full in accordance with the terms as prescribed herein.
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Notwithstanding anything to the contrary herein, the Vendor shall have the right to claim against the Purchaser for the Balance Purchase Price or any part thereof remaining unpaid by the Purchaser pursuant to the terms and conditions set forth in Clause 3.1 hereof.
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Upon the completion of this Agreement, the Vendor shall not be liable for any indebtedness incurred by ZhongXing as from January 1, 2011, and the Purchaser shall indemnify the Vendor and shall keep the Vendor indemnified against any loss claim or liability resulting therefrom.
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·
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The Company and Mr. Sun shall as soon as practicable execute a Cancellation Agreement in respect of the sales and purchase of the ZhongXing shares agreement.
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·
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All payments that have been paid by Mr. Sun under the S & P Agreement to the Company shall be transferred towards the account of such monies to be paid by Mr. Sun to the Company under the new agreement.
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·
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The Parties shall as soon as practicable execute the New Agreement upon the same terms and conditions as contained in the S and P Agreement except for the followings:
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1.
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The Company shall sell and Mr. Sun shall purchase the entire equity of Hang Yu Tai Investmento Limitada (hereinafter called “the Sale Shares”)
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2.
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The Purchase consideration for the Sale Shares shall be for a sum of US$45 million (hereinafter called “ the Purchase Consideration”) to reflect the actual value of ZhongXing as follows:
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Description
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Audited Financial
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Financial used in original contact
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||
US$
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US$
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|||
Total Assets
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62,950,744.15
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45,193,143.92
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Total Liabilities
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5,853,647.74
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4,699,252.69
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Net Assets
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57,097,096.41
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40,493,891.22
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Consideration of the S&P (in round figures)
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45,000,000.00
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31,000,000.00
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Exchange rate US$=
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RMB6.5564
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RMB6.62
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3.
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Mr. Sun shall pay / settle the purchase consideration as follows:
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3.1
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A sum of RMB5,011,000.00 (equivalent to US$759,242.50)only as required to be paid by Mr. Sun to SIAF by way of deposit and part payments towards the Purchase Consideration, shall be deemed paid by way of a transfer of the deposit so paid by Mr Sun under the S & P Agreement as stipulated in Clause 2 hereof.
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3.2
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The balance of the Purchase consideration amounting to RMB287,489,000 (equivalent to US$44,240,757.50) only (hereinafter called “the Balance Purchase Consideration”)shall be paid by Mr. Sun as follows:
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(A)
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April 30, 2011
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(B)
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June 30, 2011
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(C)
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August 31, 2011
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(D)
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October 31, 2011 and
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(E)
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December 31, 2011
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·
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The Purpose of Joint Venture: to strengthen economic cooperation and technological exchanges, and to use appropriate advanced technology and scientific management methods, for the development of a cattle and sheep farm and cultivation of a pasture farm suitable to grow cattle and sheep, using a premium beef cattle breeding and nutritional feed recipe technology named A Power Livestock Feed Technology, for the international and domestic markets, so as to enable the parties to gain economic benefits as well as to generate social benefits to the communities as a whole.
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·
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Scope of business operation : development and operation of cattle and sheep farm (“the Farm”).
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·
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Production Capacity : 2,000 tons of quality beef and mutton per year.
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(1)
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SFJVC shall produce 500 tons of beef and mutton within its first year of operation.
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(2)
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From the second year of operation to the fifth year of operation, the production will be increased gradually to its final annual productivity of 5,000 tons per year, including the development of more than 3 species of cattle and sheep.
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·
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The tenure of the SFJVC shall be in perpetuity. The SFJVC’s Board of Directors may decide to extend the tenure of the SFJVC by applying to the China Business Registration Department (or its related authorized approving authority) within 6 months from day of expiry thereof.
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·
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The total investment capital of the SFJVC shall be US$30 million to be invested over a period of 5 years, whereas the Registered Capital of the SFJVC shall be US$100,000 for the first year and be increased gradually to US$30 million by the fifth year subject to the decision made by the Board of Directors of the SFJVC at the time.
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·
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The parties’ respectively capital contribution in the 5 years are as follows :
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Parties
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Change of equity
interest up to
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Assets that may be
converted
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Maximum % that will
be converted
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|||||||
Party A
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75 | % |
Cash
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10 | % | |||||
Plants and equipment
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25 | % | ||||||||
Properties
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25 | % | ||||||||
Land Use Right
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10 | % | ||||||||
Others
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5 | % | ||||||||
Total contribution of Party A
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75 | % | ||||||||
Party B
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25 | % |
Cash
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25 | % |
Parties
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Change of equity
interest up to
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Assets that may be
converted
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Maximum % that
will
be converted
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|||||||
Party A
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25 | % |
Cash
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2.5 | % | |||||
Plants and equipment
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6.25 | % | ||||||||
Properties
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6.25 | % | ||||||||
Land Use Right
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2.5 | % | ||||||||
Others
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7.5 | % | ||||||||
Total contribution of Party A
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25 | % | ||||||||
Party B
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75 | % |
Cash
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75 | % |
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·
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Schedule of Payment by the Parties of the Registered Capital : In the first year, the Parties hereto shall pay for the US$ 100,000 Registered Capital of the SFJVC in accordance with their respective share of equity interest in the SFJVC within 6 months from date of issuance of the business license of the SFJVC. From the second year onward, the Parties shall pay their respective share of contribution of the Registered capital in the manner as mentioned above and in accordance with the time schedule as set forth by the Board of Directors of the SFJVC as and when it shall be necessary.
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·
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If either of the Parties hereto shall decide to sell all or part of its equity in the SFJVC to any third party, the selling party hereto shall obtain the prior consent of the other party hereto before such sale, and shall grant the first right of refusal to the other party hereto on the like terms for the intended sale.
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·
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The responsibilities of Party A:
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1.
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To pay its share of the Registered Capital on a timely manner.
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2.
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To apply to relevant Chinese Authorities in order to obtain the official approval, registration and business license for the incorporation of the SFJVC.
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3.
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To apply to the Land Authorities of China to obtain official approval of the Land Use Right of the project land.
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4.
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To introduce and to organize all local sub-contractors and contractors to carry out construction work relating to the scopes of civil engineering, designs, building and all other related matters for the SFJVC for the purpose of developing the Farm.
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5.
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To introduce to and to organize all local suppliers and manufacturers for the SFJVC such that the SFJVC will be able to obtain supplies and manufacturing of plants and equipment for the Farm.
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6.
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To apply to the customs authorities and to obtain import clearance for all imported plants and equipment of the Farm and to arrange local transportation for the delivery of the imported plants and equipment to the project site.
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7.
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To introduce to and to organize all local contractors and sub-contractors for the SFJVC such that the SFJVC will be able to construct and to connect all basic infrastructure and utility services needed at the project site of the Farm.
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8.
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To assist the SFJVC in recruiting Chinese management personnel, technical personnel, workers and other workers needed for the Farm.
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9.
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To assist foreign workers and staffs of the SFJVC in their applications for entry visas, work permits and other associated local traveling arrangements.
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10.
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To co-ordinate other general necessities requested by the SFJVC from time to time during the development period of the SFJVC.
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·
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The responsibilities of Party B
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1.
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To pay its share of the Registered Capital on a timely manner.
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2.
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To organize and to arrange supplies, purchases, delivery and related matters of all imported plants and equipment needed by the Farm.
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3.
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To organize and to arrange all transportation and related logistics needed for the importation of imported plants and equipment for delivery to the appropriate sea port in China.
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4.
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To provide qualified technical supervisors, personnel and inspectors for the installation and commissioning of all plants and equipment of the Farm.
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5.
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To provide training to the personnel and workers needed for the operation of the Farm.
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6.
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Being the owner of the A Power Livestock Feed Technology, Party B shall ensure that the performance of the Farm (including but not limiting to the productivity and durability of the Farm) will be reached within the targeted schedule.
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7.
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To assist the SFJVC in other matters related to the Farm’s development works as and when requested by the SFJVC.
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·
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The Board of directors shall consist of 3 members; 1 appointee from Party A and 2 from Party B. The director appointed by Party A shall be made the Chairperson, whereas 1 director appointed by Party B shall be made the Deputy Chairperson. The tenure of the Chairperson and the Deputy Chairperson shall be 3 years, renewable at the discretion of the appointing party.
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·
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Manufacturing and sales of organic fertilizer
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·
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Manufacturing and sales of mixed fertilizer (meaning organic and chemical mixed fertilizer)
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·
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Growing of grass and pasture
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·
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Manufacturing, packaging and sales of livestock feed.
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·
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Rearing of cattle and sheep.
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·
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Sanjiang A Power Agriculture Ltd. = 51%
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·
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Macau EIJI Company Limited = 24%
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·
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DongGuan Sheng Hua Agricultural Product Trading Co. Ltd. China, (HAPTC) = 25%
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1.
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Proposed target of productivities:
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Items of Products
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units
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2011
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2012
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2013
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||||||||||
Organic Fertilizer
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Tons
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0 | 20,000 | 20,000 | ||||||||||
Mixed Fertilizer
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Tons
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30,000 | 70,000 | 70,000 | ||||||||||
Pasture cultivation in
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||||||||||||||
Planted areas
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Mu
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220 | 220 | 220 | ||||||||||
Harvested quantity
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Tons
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5,500 | 5,500 | 11,000 | ||||||||||
Manufacturing of livestock feed
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Tons
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6,600 | 6,600 | 13,200 | ||||||||||
Rearing of
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||||||||||||||
Beef cattle
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Heads
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0 | 0 | 2,000 | ||||||||||
Sheep
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Heads
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0 | 0 | 20,000 |
2.
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Development Schedule: Within 3 years commencing 2011
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·
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On March 25
th
, 2011a Memorandum of Understanding was executed with the Linli Government based on the terms and conditions specified above, as such the SFJVC Linli is being applied with the Business Registration Department of Linli Government, and Sales and Purchase Agreements on the two blocks of land mentioned above were under negotiation.
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·
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Engineering drawings and designs for the lay-out and work flow of the land and the fertilizer factory and related facilities were completed by April 15, 2011.
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·
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On April 5
th
, 2011 the said Lands’ Sales and Purchase Agreements were executed.
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·
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On April 5
th
, 2011an administration office was established at a rented apartment situated at Room 504, Unit 2, Building 3, Anfu New Village, Anfu Town, Linli County, Hunan Province and two office staffs were employed maintaining daily operation temporally until such time the main office building will be built at the project site estimating on or before November 30, 2011.
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·
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On June 24, 2011 Sales and Purchase of the said land were completed as such, application to obtain land use rights will be commenced on or before July 15, 2011.
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Company
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Shareholding
by the group
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Immediate subsidiary
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Equity
Ownership
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Revenues generating activities
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||||
Sino Agro Food, Inc.
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The Ultimate Holding Company
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Service fees will be charged to its operational subsidiaries in China starting in its fiscal year ending June 30, 2011.
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||||||
Capital Award Inc.
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100%
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Fishery development including consulting service fees, technology fees, supply of plants and equipment and other related services and management fees, since 2004
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||||||
Macau Eiji Company Limited
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100%
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Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd.
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75%
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Growing and processing of HU Plants including sales of fresh and dried HU flowers and value added processed HU Flowers.
Revenues generated since 2008.
Additional revenue being generated from April 15, 2011 providing management, consulting, engineering designs services and sales of farm related plants and equipment.
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A Power Agro Agriculture Development (Macau) Limited
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100%
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Qinghai Sanjiang A Power Agriculture Co. Ltd (China). (Operational company)
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45%
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Manufacturing and beef cattle farming, including the sales of bio-organic fertilizer, livestock feed and beef cattle. Revenue has been generated since September 2010.
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||||
Tri-way Industries Limited
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100%
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A newly formed Sino-Foreign Joint Venture Company at Enping County, Guangdong
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From 20%
(as provided in the joint venture agreement)
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Fish Farm operation including the sales of farmed fish and it is anticipated that revenues will be generated from
November 15th 2011.
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Hang Yu Tai Investment Limited
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100%
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ZhongXingNongMu Co. Ltd. [Sold in February 2011]
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78%
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Dairy Farm operation, including sales of fresh liquid milk, dairy products, fertilizer, livestock feed and cattle since 2006. Revenues generated since 2006.
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·
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solid waste filter and separator;
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·
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micro-bio filter for the treatment of soluble wastes;
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·
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oxygen injector; steam generated heating compartment (optional, depending on the species of fish to be grown);
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·
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ultra violet light disinfection chamber;
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·
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air blower configuration;
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·
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designs of the grow-out tanks;
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·
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designs of the quarantine station;
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·
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designs of the nursery station;
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·
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designs of the farm’s fish storage tanks; and
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·
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designs of stock feed processing lay-out plans.
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·
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systems for rotational stocking of fish and rotational harvesting of fish, designed to stock the growing fish tanks with certain variety of fish of certain sizes and age group at pre-determined intervals, to provide constant production of multiple varieties all year round or as and when the markets require;
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·
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quality control systems to keep the quality of the water and production in check;
|
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·
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diseases control and prevention system to enhance better production cycles of the farms;
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·
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maintenance programs to ensure the smooth running of the farms’ equipment; and
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·
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training programs for the workers on standard operating procedures.
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Items of comparison
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APT farms
|
Conventional farms
|
||
Surface area measured for productivity
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25 tons per year per 72 mІ
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0.5 tons per year per 660mІ
|
||
Water capacity measured for productivity
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25 tons per year per 100 mі
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0.5 tons per year per 1320mі
|
||
Labor content
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One worker per 50 tons per year
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One worker per 6 tons per year
|
||
Water usage
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Minimal
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100% Changed every year
|
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Energy requirement
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2.5% cost of production
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No specified records
|
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Quality standard
|
Can be organic or non-organic.
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No consistency
|
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Guaranteed free from chemical and pollution of export standard
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Not of export quality
|
|||
Harvesting
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All year round
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Once or twice annually
|
||
Subjecting to seasonal variation
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No
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Yes
|
||
Subjecting to external predators and diseases
|
No
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Yes
|
||
Usage of antibiotics and chemicals
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No
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Yes
|
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Environmentally friendly
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Yes
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No
|
||
Live span of major plants & equipment
|
25 years or more
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Two years
|
||
Average Gross profit
|
minimum 60% of sales value, depending on the species of fish grown
|
No accurate calculation
|
||
Averaged mortality rate for the Grow-out
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8% or less
|
Above 25%
|
||
Average of feed to fish conversion rate
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2 to 1
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4.5 to 1
|
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·
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All land clearing, leveling and fencing at the development site have been completed.
|
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·
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All soil testing, water quality testing and water in flow rate testing have been done.
|
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·
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Majority of the plants and equipment have been delivered.
|
|
·
|
Construction of the farm buildings has been in progress and within schedule (subsequently the construction of the fish farm was completed on November 26, 2010).
|
|
·
|
Construction of all 16 fish tanks were constructed, fully installed and fitted on December 5, 2010, and since the end of December 2010, the farm underwent a nurturing period to nurture and to grow filtration bacteria needed in the tanks for consumption of bio-mass, and as such we expect that the tanks will be ready for stocking up fingerling to grow-out into marketable size fish on or before the mid-February 2011. We target the first sale of fish to start by July 2011.
|
|
·
|
Contracts on the provision of related services and consultancies needed for the operation of the farm have been organized By December 26, 2010, a new management team for the operation of the farm has been recruited consisting at present of 10 personnel including the farm manager, supervisors, skilled and non-skilled workers.
|
|
·
|
300,000 fingerlings have been ordered for delivery from September 2010 through November 2010. On our last inspection at the supplier’s farm on August 18 2010, the fingerlings were at an average size of 60 mm and growing healthily. In anticipation of a possible colder early winter, we subsequently at the end of November 2010 helped our supplier to install heating systems to cover their outdoor farms where our fingerling were being kept to ensure that our fingerlings would not suffer from any adverse effect arising from severe winter weather. The aforesaid measure was effective and timely as the Southern China is experiencing one of its coldest winter in the early weeks of January 2011,
|
|
¨
|
As at December 31, 2010 the Chinese Businessmen have funded just under US$3.9 Million for the development of the
|
|
¨
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Standby diesel powered generator capable of providing electricity during outages;
|
|
¨
|
All underground and surface drainage, water works and electrical connections;
|
|
¨
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Heating provided by boiler driven heat exchangers capable of heating each tanks water 6° C in 30 minutes
|
|
¨
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Dry storage of approximately 9,000 m²;
|
|
¨
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Guard house, office and staff quarters to handle up to 15 personnel;
|
|
¨
|
Farm building measuring over 4,000 m² housing16 grow-out tanks each with the capacity to hold up to 120,000 liter of water with built-in solid waste and soluble waste filters, ultraviolet and O³ disinfectors, and aerators that will have the capacity to grow-out an average of 25 tons of fish per tank per year;
|
|
¨
|
A nursery facility that has the capacity to grow-out 2 million fingerlings per year from 25mm per piece to 100mm per piece;
|
|
¨
|
Freezing and cool room facilities;
|
|
¨
|
Feed processing facilities and feed preparation rooms;
|
|
¨
|
Landscaping areas covering more than 15,000 m² and all boundary fences of the complex; and
|
|
¨
|
External water holding tanks with total holding capacity of more than 3 million liters of water at any given time, supplied by 4 underground bores of various depth measuring from 80m to 150m.
|
|
·
|
Up to a period of 2 months for trials and testing of plants and equipment and water, nurturing of bacteria, trial growing and recording of sample species of fish to be grown in the farm, etc.; (This was completed as at February 28, 2011)
|
|
·
|
Training of staffs and workers; (It was completed by February 28, 2011)
|
|
·
|
Purchases of operational, feed preparation and office plants and equipment and laboratory instruments, etc. (Completed by February 28, 2011)
|
|
·
|
Up to 8 months of daily administration and operation expenses; (6 more months to completion)
|
|
·
|
Stocking of spare parts and components and feed staffs etc.; (On -going events) and
|
|
·
|
Gradually and rotationally stocking of fingerlings in the farm from February to March 2011 in order to achieve the targeted sales of grown fish from July 2011 onwards. (25,000 Sleepy cod fingerlings and 50,000 prawn fingerlings were stocked on February 15, 2011, and the next batch consisting of 250,000 sleepy cod fingerlings will be stocked on March 15, 2011)
|
|
·
|
As at June 15, 2011, the fish farm is progressing in manner as follows: 12 out of 16 Tanks are in full operation stocking with 120,000 x 60 mm fingerlings, 80,000 x 80 mm small fish and 50,000 x 100 mm sized fish and about 20,000 x 120 mm sized fish that are growing at good pace with mortality rate recorded at about 10% per annual rate so far. At this rate, the first batch of 20,000 x 120mm fish should reach the average of marketable size of about 500 gram / fish on or before October 30, 2011.
|
|
·
|
It is estimated that the construction of the Prawn farm will be completed within a period of 6 months counting from date of the Agreement; subsequently business operation of the Prawn farm will be commence, such that the targeted production of operational year (1) is for 250 tons of prawn.
|
|
·
|
From the second year of operation to the fifth year of operation, the production will be increased gradually to its final annual productivity of 2,000 tons per year, including the development of more than 3 species of fish and prawns.
|
|
First Year : Wei Ds Xing shall contribute US$80,000 in cash, whereas Capital Award shall contribute US$20,000 in cash.
|
|
From the second year onward, Capital Award shall have the option to increase its share of equity interest in the SFJVC, and the parties will contribute their share of equity stake (or to increase part of the SFJVC’s registered capital by means of converting the SFJVC’s assets) in accordance with the guidelines as shown in the Table below:
|
Parties
|
Change of equity
interest up to
|
Assets that may be converted
|
Maximum % that will
be converted
|
|||||||
Wei Ds Xing
|
75 | % |
Cash
|
10 | % | |||||
Plants and equipment
|
25 | % | ||||||||
Properties
|
25 | % | ||||||||
Land Use Right
|
10 | % | ||||||||
Others
|
5 | % | ||||||||
Total contribution of Wei Ds Xing
|
75 | % | ||||||||
Capital Award
|
25 | % |
Cash
|
25 | % |
Parties
|
Change of equity
interest up to
|
Assets that may be converted
|
Maximum % that will
be converted
|
|||||||
Wei Ds Xing
|
25 | % |
Cash
|
2.5 | % | |||||
Plants and equipment
|
6.25 | % | ||||||||
Properties
|
6.25 | % | ||||||||
Land Use Right
|
2.5 | % | ||||||||
Others
|
1.25 | |||||||||
Total contribution of Wei Ds Xing
|
25 | % | ||||||||
Capital Award
|
75 | % |
Cash
|
75 | % |
|
1.
|
To pay its share of the Registered Capital on a timely manner.
|
|
2.
|
To apply to relevant Chinese Authorities in order to obtain the official approval, registration and business license for the incorporation of the SFJVC.
|
|
3.
|
To apply to the Land Authorities of China to obtain official approval of the Land Use Right of the project land.
|
|
4.
|
To introduce and to organize all local sub-contractors and contractors to carry out construction work relating to the scopes of civil engineering, designs, building and all other related matters for the SFJVC for the purpose of developing the fish farm.
|
|
5.
|
To introduce to and to organize all local suppliers and manufacturers for the SFJVC such that the SFJVC will be able to obtain supplies and manufacturing of plants and equipment for the fish farm.
|
|
6.
|
To apply to the customs authorities and to obtain import clearance for all imported plants and equipment of the fish farm and to arrange local transportation for the delivery of the imported plants and equipment to the project site.
|
|
7.
|
To introduce to and to organize all local contractors and sub-contractors for the SFJVC such that the SFJVC will be able to construct and to connect all basic infrastructure and utility services needed at the project site of the fish farm.
|
|
8.
|
To assist the SFJVC in recruiting chinese management personnel, technical personnel, workers and other workers needed for its fish farm.
|
|
9.
|
To assist foreign workers and staffs of the SFJVC in their applications for entry visas, work permits and other associated local traveling arrangements.
|
|
10.
|
To co-ordinate other general necessities requested by the SFJVC from time to time during the development period of the SFJVC.
|
|
1.
|
To pay its share of the Registered Capital on a timely manner.
|
|
2.
|
To organize and to arrange supplies, purchases, delivery and related matters of all imported plants and equipment needed by the Fish Farm.
|
|
3.
|
To organize and to arrange all transportation and related logistics needed for the importation of imported plants and equipment for delivery to the appropriate sea port in China.
|
|
4.
|
To provide qualified technical supervisors, personnel and inspectors for the installation and commissioning of all plants and equipment of the fish farm.
|
|
5.
|
To provide training to the personnel and workers needed for the operation of the fish Farm.
|
|
6.
|
Capital Award shall ensure that the performance of the Fish Farm (including but not limiting to the productivity and durability of the Fish Farm) will be reached within the targeted schedule.
|
|
7.
|
To assist the SFJVC in other matters related to the Fish Farm Development works as and when requested by the SFJVC.
|
|
·
|
Electric supply substation was built and in operation
|
|
·
|
Land clearing and fencing has been completed.
|
|
·
|
All related engineering drawings, designs of tanks and filtration systems, lay-out plans, work-flow plans for external areas and interior of the farm have been completed.
|
|
·
|
On May 23, 2011 building and construction plans have been approved by the local building authorities,
|
|
·
|
On June 18, 2011 construction of the Farm and related facilities started.
|
|
·
|
It is anticipated that the building of the farm and related facilities will be finished on or before September 30, 2011.
|
Date
|
Description of transactions
|
Payments
US$
|
Amounts Due
US$
|
Balance
US$
|
||||||||||
As at 31.07.2007
|
Due to Infinity for the contractual 500 units of APM
|
2,500,000 | 2,500,000 | |||||||||||
20.12.2007
|
Payment made to Infinity under our CR#(08)Infinity20.12.07
|
2,500,000 | ||||||||||||
07. 01. 2008
|
Due to Infinity for an additional 500 units of APM contracted to one of our clients in 2008
|
2,500,000 | 2,500,000 | |||||||||||
18.09. 2009
|
Payments made to Infinity under our CR#001
|
2,500,000 | 0 | |||||||||||
31.12.2010
|
0 |
|
·
|
harvesting the green flowers from the HU Plants before they mature into fruits and sell them as vegetables;
|
|
·
|
drying the green flowers harvested and selling them as dried vegetables for human consumption; and
|
|
·
|
processing and packaging the dried and fresh flowers into salted, pickled and in brine vegetables.
|
|
·
|
Year 1 plants yield only about 10% of green flowers, as compared to the matured plants.
|
|
·
|
Year 2 plants yield about 50% of green flowers, as compared to the matured plants.
|
|
·
|
Year 3 fully matured plants yield an average of 120,000 green flowers per year per mu over the next 25 years, the average production life span of a HU plant.
|
|
·
|
All harvested green flowers will be stored and kept cool in the cool room while waiting to be processed.
|
|
·
|
They will then be steamed in batches at boiling temperature for less than 15 minutes. The naturally dried flowers will require washing and grading. Flavored dried flowers will be aromatically cured after steaming.
|
|
·
|
Thereafter, Celsius for
°
they will be transferred to the drier to be dried at 140 about 3 hours and at gradually decreasing temperature for another 5 hours.
|
|
·
|
Packaging procedures will then follow.
|
|
·
|
They will then be stored and sold through the winter period until next harvest season.
|
|
·
|
easy access to affordable pool of labor in the Enping region, and at the same time creating job opportunities for the local people .
|
|
·
|
our experience in the industry dictates that these traditional systems and methods produce the end products of such quality much preferred by the local markets.
|
|
·
|
These facilities located in the agriculture districts are regarded as temporary agriculture facilities, and as such prior approval of the regional council is not required, as long as the village committee of the County has been duly informed accordingly. In this respect, we have the consent of the village committee for the erection of the facilities.
|
|
·
|
An Asparagus farm for the planting of asparagus as an alternative crop to the HU Flowers and to utilize coordinately the value added processing facilities that HST will develop within Q3 2011for processing of value added HU Flowers’ products. The aim is to develop the HU Plantation into an all yearly operation instead of restricted seasonal operation (i.e. 6 months of a year as it is now).
|
|
·
|
Development of a modern drying factory and a value added processing factory.
|
|
·
|
By June 15
th
, 2011 100 Mu has been cleared and leveled and ploughed in readiness for the planting of asparagus on or before August 31, 2011.
|
|
·
|
Construction work on the drying and value added facilities (the factory) has been started since June 1, 2011 and it is anticipated that the factory will be in operation on or before August 31, 2011.
|
|
·
|
Production and sales of fresh liquid milk;
|
|
·
|
Rearing and sales of beef cattle;
|
|
·
|
Planting of crops for the purpose of further processing into livestock feed;
|
|
·
|
Processing and sales of livestock feed; and
|
|
·
|
Processing and sales of fertilizer.
|
|
·
|
Breeding of cows and cattle; and
|
|
·
|
Veterinary services
|
|
·
|
the most up-to-date feed mixing machines and milking equipment;
|
|
·
|
efficient housing and supporting facilities that can accommodate up to 3,500 cows;
|
|
·
|
in house veterinary facilities and services;
|
|
·
|
a modern and well equipped quarantine station that has the capacity to handle up to 2,000 cows;
|
|
·
|
significant feed and forages storages areas to stock up to 25,000 tons of livestock feed;
|
|
·
|
a crop plantation on more than 1,000 acres of land; and
|
|
·
|
processing factories for the manufacturing of livestock feed and fertilizer.
|
|
·
|
Zhang Zheng Xi (agent of TianJin Mu Dairy Co. Ltd.), (ZZX).
|
|
·
|
Siao Shu Dong (agent of Chengde Huang Yuan Dairy Co. Ltd.) ,(SSD).
|
|
·
|
Wang Cheng Xiang (agent of Mengniu Dairy Group), (WCX).
|
|
·
|
Jun Heng (agent of Yili Dairy Group), (JH).
|
3.
|
Payment of the Balance of the Purchase Price
|
3.1
|
A sum of RMB25,055,000.00 (equivalent to US$3,796,212.50) (hereinafter called “the Further Payment”) in cash shall be paid by the Purchaser to the Vendor by way of 5 equal instalments of RMB5,011,000.00 (equivalent to US$759,242.50) each, on or before the following dates :-
|
|
(1)
|
April 30, 2011 ;
|
|
(2)
|
June 30, 2011 ;
|
|
(3)
|
August 31, 2011 ;
|
|
(4)
|
October 31, 2011; and
|
|
(5)
|
December 31, 2011.
|
3.2
|
The parties hereto hereby acknowledge that despite the fact the respective relevant land authorities of the said Lands (hereinafter collectively referred to as “the said Land Authorities”) have verbally agreed to contribute a combined amount of RMB36,974,996.00 towards the payment of the Land Price, either by way of a grant, discount or otherwise (hereinafter called “the said Rebate”), it shall not be deemed a discharge of the Purchaser’s obligation herein towards payment of the Purchase Price or any part thereof.
|
3.3
|
The Purchaser hereby further acknowledges and covenants that the Purchaser shall procure:-
|
|
(c)
|
the said Rebate of the said Land Authorities ; and
|
|
(d)
|
the approval by the said Land Authorities of the transfer of the said Land Use Rights of the said Lands to the Vendor and/or the Vendor’s Associated Companies.
|
4.
|
Completion
|
4.1
|
The Completion of this Agreement shall take place upon approval of the granting of the said Land Use Rights of the said Lands by the said Land Authorities to the Vendor being obtained (hereinafter referred to as “the Completion Date”), whereupon the Purchaser shall be entitled to all rights thereafter attaching to the Vendor’s Shares or accruing thereon including without limitation, all bonuses, rights, dividends and other distributions declared, paid or made thereof thereafter free from all liens, assignments, pledges, charges and other encumbrances whatsoever Provided that the Purchaser shall have paid the Purchase Price in full in accordance with the terms as prescribed herein.
|
4.2
|
Notwithstanding anything to the contrary herein, the Vendor shall have the right to claim against the Purchaser for the Balance Purchase Price or any part thereof remaining unpaid by the Purchaser pursuant to the terms and conditions set forth in Clause 3.1 hereof.
|
5.
|
Debts and Liabilities
.
Upon the completion of this Agreement, the Vendor shall not be liable for any indebtedness incurred by ZhongXing as from January 1, 2011, and the Purchaser shall indemnify the Vendor and shall keep the Vendor indemnified against any loss claim or liability resulting therefrom.
|
·
|
Qinghai Province Sanjiang Group Company Limited (English translation) (“Qinghai Sanjiang”), a PRC government owned company with major business activities in the agriculture industry; and
|
·
|
(Guangzhou City Garwor Company Limited (English translation) (“Garwor”), a private limited company incorporated in the PRC, specializing in sales and marketing.
|
|
·
|
using environmental friendly technology to recycle agriculture waste for production of organic fertilizer;
|
|
·
|
using environmental friendly technology and bacteria to produce organic feed; and
|
|
·
|
using environmental friendly technology to increase dairy milk production and quality.
|
|
·
|
Organic fertilizer project : US$450,000.00
|
|
·
|
Organic livestock feed: US$950,000.00
|
|
·
|
Organic farm grass: US$600,000.00
|
|
·
|
US$630,000.00 capital contribution;
|
|
·
|
appropriate plots of lands with the related “Land Usage Rights” or convertible old factory suitable for the projects, that is:
|
|
·
|
land and
buildings measuring up to 1,800 mu (about 297 acres) and 9,000 mІ of built-up areas for the development of the demonstration farms for the rearing of cattle and sheep; and
|
·
|
land and buildings measuring up to 480 mu (about 79.2 acres) and 155,040 mІ of b
uilt-up area for the development of the manufacturing plants for bio-organic fertilizer;
|
|
·
|
vehicles for use by Sanjiang A Power during pre-development and the implementation stage;
|
|
·
|
company office and accommodation for personnel from out of town;
|
|
·
|
the necessary facilities for the projects;
|
|
·
|
liaison in procuring governmental financial assistance or other incentives for agriculture projects to meet the needs of the projects;
|
|
·
|
first batch of premium herd of cows and goats for the demonstration farms; and
|
|
·
|
related plants and equipment and facilities for the production factories and laboratories of Sanjiang A Power.
|
|
·
|
US$140,000.00 capital contribution;
|
|
·
|
modern agriculture management system;
|
|
·
|
liaison in procuring financial assistance to raise development capital;
|
|
·
|
expertise in the sales and marketing needs of Sanjiang A Power;
|
|
·
|
international business network;
|
|
·
|
assistance to resolve any misunderstanding between the Chinese and foreign parties resulting from the difference in laws and regulation between the two concerned countries.
|
|
·
|
US$630,000.00 capital contribution;
|
|
·
|
the rights to use the relevant patented technologies and the related trademarks and brands;
|
|
·
|
the rights to use the patented Bacterial and Bio-organic Fertilizer Manufacturing Technology, the Stock Feed Manufacturing Technology;
|
|
·
|
the right to use related conversion techniques associated with the Bio-organic Fertilizer and Livestock Feed Manufacturing;
|
|
·
|
business and sales network and the right to operate and generate financial benefit using the above mentioned technologies, techniques, systems, trademarks and labels; and
|
|
·
|
knowledge and connections for securing financings for its developments.
|
|
·
|
Sanjiang A Power suffers severe financial losses and is not able to continue operation as a result;
|
|
·
|
a party hereto fails to fulfill its obligations herein, and Sanjiang A Power is not able to continue operation as a result;
|
|
·
|
force majeure; and
|
|
·
|
Sanjiang A Power fails to achieve its business objectives, and has no prospect of development.
|
|
·
|
The Name of the company shall be Sanjiang A Power Agriculture Co. Ltd. (translation in English)
|
|
·
|
Total Investment Capital : U.S.$2 million
|
|
·
|
Registered Capital: U.S. $1.4 million, out of which US$630,000.00 to be contributed by Qinghai Sanjiang (45%), US$140,000.00 by Garwor (10%) and US$630,000.00 by Pretty Mountains (45%).
|
|
·
|
7 members in the Board of Directors consisting of 3 appointees from Qinghai Sanjiang, 1 from Garwor, and 3 from Pretty Mountains.
|
|
·
|
change its place of business from the City of Xining to the County of Huangyuan;
|
|
·
|
effect the registration of APWAM as a shareholder of Sanjiang A Power, replacing Pretty Mountains; and
|
|
·
|
Investigation and feasibility study of the potential project sites;
|
|
·
|
Investigation and feasibility study of the supplies and production of raw materials;
|
|
·
|
Investigation and feasibility study of the sales and marketing of the products to be produced by Sanjiang A Power;
|
|
·
|
Investigation and feasibility study of the related facilities within the locations;
|
|
·
|
Investigation and feasibility study of applicability of SIAF’s technologies for bio-organic fertilizer and livestock feed under the local conditions; and
|
|
·
|
Investigation and analysis of potential cooperative activities with the regional government and the farmers;
|
|
·
|
Establishing trial facilities to test the production of bio-organic fertilizer and livestock feed, using locally sourced raw materials;
|
|
·
|
Laboratory testing of sample products of fertilizer and livestock feed on their respective standard of qualities; and
|
|
·
|
Financial feasibility studies of all aspects of the business operations.
|
|
·
|
The Huangyuan Government agreed to alloc
ate the site of the old army goods and materials transfer terminal, consisting over 150 mu of land and over 20,000 mІ of built up area (39 buildings, each of approximately 538 mІ) (“Project Site”) to Sanjiang A Power for the purpose of the projects.
|
|
·
|
Sanjiang A Power shall register its place of business in the County of Huangyuan within 6 months of the Development Agreement.
|
|
·
|
Sanjiang A Power’s total investment and development capital for the projects shall be RMB96.2 million (equivalent to about U.S.$14.15 million), of which the fixed assets should amount to RMB50.20 million (equivalent to U.S.$7.382 million, based on the exchange rate of U.S.$1 = RMB6.80).
|
|
·
|
Livestock Feed manufacturing
|
|
·
|
Cattle rearing and fattening stations
|
|
·
|
Manufacturing of bio-organic fertilizer
|
|
·
|
Plantation of pastures and crops as the raw materials for livestock feed.
|
|
·
|
Renovation and building work on staff quarters, capable to house up to 70 workers at a time, and subsequently these were completed before end of March 2010;
|
|
·
|
Renovation and installation of facilities for six beef cattle fattening demonstration yards and buildings, with the capacity to house up to 120 heads of cattle per house, (Subsequently these were completed by November 17, 2010 as such by December 5 2010, two of these cattle houses are housing 240 heads of 6 months old cattle brought by SJAP);
|
|
·
|
Subsequently at June 15, 2011, a total of 8 demonstration cattle houses were completed and in operation that they are now housing a total 860 heads of cattle).
|
|
·
|
Subsequently by June 15, 201,1 waste treatment systems to treat the waste of the cattle houses were being constructed underground adjacent to the cattle houses channeling over 5 kilometer in total length with an aim that all wastes will be channeled to a new Mash Gas station that SJAP anticipates it will build within 2012. And in this respect, Government Development grants are available for the development and construction cost of the said Mash Gas Station covering almost up to 100% of its development cost and we anticipate applying for such grants in the future.
|
|
·
|
Construction of a factory with the capacity to produce up to 20,000 tons of bio-organic fertilizer per year was completed last week of June 2010, and is now in operation producing up to
60
tons per day to fill its first order of 2,500 tons sold regionally, (subsequently by December 15, 2010 SJAP has sold more than 2500 Tons of fertilizer regionally with good responds from the buyers, and at June 15
th
, 2011 the factory is producing an average of 45 Tons of organic fertilizer per day;
|
|
·
|
Construction of a new four storey height head
quarter office building consisting of 2,500mІ was commenced on June 12, 2010 (subsequently as at the end of December 2010, all four floors have been constructed waiting on final installations and fittings such that we are expecting full completion within A
pril Month 2011 as during winter months now it is difficult to carry out construction works); update At June 15, 2011 this new office building is not completed due to the building contractor wanted an increase on the contractual price which we refused that caused the delay, however, we are expecting that negotiation in this respect should be finalized within the month of June 2011 such that the construction work on the office building will be completed on or before 15
th
of September 2011.
|
|
·
|
Invention of a new enzyme (“the Enzyme”) that is capable of allowing fermentation and germination processes in our manufacturing of livestock feed to Celsius within 7 days, which is suitable in the colder
°
take place at 4 northern China climates since it will save much additional heating costs to initiate the fermentation and germination process of the livestock Celsius within 21
°
feed, as compared to the old enzyme performing at 15 days, (subsequently from July 2010 we used this Enzyme to produce our fertilizer and livestock feed successfully). Subsequently by June 15 2011 the design and engineering plans were finalized for the construction of an Enzyme producing factory within the compound at an estimated cost of around US$2 million, of which the HuangYuan Government has verbally agreed to give development grants up to 50% of the said development cost. As such, SJAP is aiming to start construction after Q3 2011.
|
|
·
|
Additional weight gained average per beef cattle was recorded at one extra kilogram per day over their normal weight gains.
|
|
·
|
Additional fresh milk produced per cow was recorded at one and half kilograms of milk per day over and above their normal daily production.
|
|
·
|
All feeds were much easier to digest resulting in much cleaner environment in the cattle yards and houses.
|
|
·
|
No sickness during the period was recorded through the cause of consumption of our feeds, but there was one cow had an early abortion.
|
|
·
|
All cattle preferred to eat our feeds and reluctant to revert back to the consumption of their old feed after they had consumed our feed during the period.
|
|
·
|
Manufacturing of livestock feed to achieve 20,000 tons, to be sold to the regional farmers and 10,000 tons to be consumed by our own cattle on the Project Site; subsequently we manufactured over 5,000 tons of livestock by the end of September 2010 and out of which we sold 2,000 tons to the local farmers and kept the other 3,000 Tons to be used for our own cattle that will be reared in our own cattle facilities.
|
|
·
|
Manufacturing of bio-organic fertilizer to reach 10,000 tons; subsequently we sold 2,500 tons of fertilizer by month of November 2010 with production rate running at 60 tons per day currently and we are producing right through the winter months made possible by our developed Enzyme.
|
|
·
|
Rearing and fattening of beef cattle to reach a minimum of 1,000 heads subsequently as at January 3, 2011 we bought more than 500 heads of young cattle housing in four of our 7 newly constructed cattle houses and expecting to increase the number of cattle to 2,500 heads within 2011. Subsequently at June 15, 2011, there are a total 8 demonstration cattle houses were completed and in operation that they are now housing a total 860 heads of cattle.
|
|
·
|
Subsequently as June 15, 2011 waste treatment systems to treat the waste of the cattle houses were being constructed underground adjacent to the cattle houses channeling over 5 kilometer in total length with an aim that all wastes will be channeled to a new Mash Gas station that SJAP will build within 2012.And in this respect, Government Development grants are available for the development and construction cost of the said Mash Gas Station covering almost up to 100% of its development cost
|
|
·
|
eliminating toxic fat in the soil;
|
|
·
|
eliminating the adversity caused through frequent application of chemicals and antibiotics;
|
|
·
|
increase growth of micro organism in the soil to purify water toxicity;
|
|
·
|
improve the disease resistant ability of the root systems of plants;
|
|
·
|
neutralize the bad affect caused by the toxic mineral;
|
|
·
|
increase soil resistant to salinity ;
|
|
·
|
increase nutrient to the soil;
|
|
·
|
procure nutrient absorbing ability of the soil;
|
|
·
|
increase diseases resistant ability of the growing plants;
|
|
·
|
reduce plant diseases and the developments of insects;
|
|
·
|
multiply the growth of micro-organism and natural bacterial; and
|
|
·
|
reduce the usage of chemical fertilizer and improves the economic benefit of the chemical fertilizer. (In this respect, it is because of the use of bio-organic fertilizer will improve the soil’s overall ability to the absorb nutrients more consistently and easily, such that within a period of six months after the application of the bio-organic fertilizer, the soil in general will start to show the benefit and in the position to use less chemical fertilizer, the exact reduced usage quantity of chemical fertilizer is usually subject to how poorly the soil have been demanded by the pro-long usage of chemical fertilizer in the past, however it is evidenced frequently that the saving could be measured anyway from 30% up to 60% within a year cycle after the application of bio-organic fertilizer.)
|
|
·
|
Our cattle houses (22 of them) will be leased out to the regional farmers who will have the option to lease up to 4 houses at a time, such that they will supply their own young cattle for fattening and they will manage their respective operations.
|
|
·
|
We will provide all associated in-house facilities and services (i.e. veterinary service, utilities, laboratory analysis, ration and nutrient formulated mixing machines, etc.), supply the livestock feed, and marketing of their grown up beef cattle (“the Farmers’ cost”).
|
|
·
|
The breeders will grant us the first option to buy all grown up cattle stocks from them and in the event that they decide to sell to other buyers, such sales will be conducted through our account so that the Farmers’ cost will be deducted from the proceeds of sales.
|
|
·
|
The regional farmers planting wild wheat, wild peas and wild pastures can now increase their yearly yield from 1.25 tons per mu to 4.5 tons per mu by using our organic fertilizer.
|
|
·
|
The regional dairy farmers who were used to get an average of about 1.5 tons (or 1500 kg) of fresh milk from one head of cow per year based on maximum milking day of 180 days per year (due to long winter spell in Qinghai Province) can now get an extra 450 kg of milk per year using our livestock feed to feed right through the winter to maximize the milking days to 300 days per year.
|
|
·
|
1st tranche of U.S.$1,000,000 on or before December 31, 2009, which was paid on December 28, 2009;
|
|
·
|
2nd tranche of U.S.$1,000,000 on or before December 31, 2010; and
|
|
·
|
3rd tranche of U.S.$1,500,000 on or before November 11, 2012.
|
|
·
|
Engineering designs of the livestock feed manufacturing factories;
|
|
·
|
Engineering designs of the factories’ plants and equipment;
|
|
·
|
Designs of various lay-out plans for the said factories and equipment;
|
|
·
|
Management of the related operation; and
|
|
·
|
Training of personnel of the related operation.
|
|
·
|
Field-cropped grass, corns, or other similar materials are cut and sun cured in the fields;
|
|
·
|
Raw materials are then transported to processing locations for further processing
|
|
·
|
Raw materials are finely cut and mixed together then stored in open concrete yards; or
|
|
·
|
Raw materials are compacted into various sharps and forms such as pellets, cubes, or square blocks, and then stored.
|
|
·
|
Unsafe for consumption due to high count of bad bacteria;
|
|
·
|
Poor to taste due to high content of bad bacterial and rough to feel;
|
|
·
|
Non-uniform quality and generally low in nutrient, low in protein and vitamins with high fiber;
|
|
·
|
Poor digestibility usually evidenced by animal dropping.
|
|
·
|
Type One is a more general application type of livestock feed suitable for beef cattle and sheep; and
|
|
·
|
Type Two is special ration designed for dairy cows that consists of various grades adaptable to various stages in the life of dairy cows from the time of pregnancy, carrying period with calves to three months old, weaning of the calves to they are six months old, and continued milking period of the calves until they reproduce.
|
|
·
|
reduce sickness in animal;
|
|
·
|
increase milking life span of cows;
|
|
·
|
reduce mortality rate of animals;
|
|
·
|
increase birth rate of cattle and sheep;
|
|
·
|
increase milk productivity of the cows;
|
|
·
|
increase weight gain in cattle and sheep; and
|
|
·
|
improve quality of the milk produced by cows.
|
|
¨
|
The parties thereto shall share the indebtedness, risks and losses of the SFJVC as well its profit in accordance with their respective equity interest ratio in the SFJVC.
|
|
¨
|
The tenure of the SFJVC shall be for a period of 50 years. The SFJVC’s Board of Directors may decide to extend the tenure of the SFJVC by applying to the China Business Registration Department (or its related authorized approving authority) within 6 months from day of expiry thereof.
|
|
¨
|
The total investment capital of the SFJVC shall be US$5 million to be invested over a period of 5 years, whereas the Registered Capital of the SFJVC shall be US$100,000 for the first year and be increased gradually to US$5 million by the fifth year subject to the decision made by the Board of Directors of the SJVC at the time.
|
|
¨
|
The parties’ respectively registered capital contribution in the 5 years are as follows :
|
First Year:
|
The Chinese Businessmen shall contribute US$75,000 in cash. However they will be allowed to convert some of the assets of the fish farm they have funded to equity.
|
Parties
|
Change of equity
interest up to
|
Assets that may be converted
|
Maximum % that will
be converted
|
|||||||
Chinese Businessmen
|
75
|
%
|
Cash
|
10
|
%
|
|||||
Plants and equipment
|
25
|
%
|
||||||||
Properties
|
25
|
%
|
||||||||
Land Use Right
|
10
|
%
|
||||||||
Others
|
5
|
%
|
||||||||
Total contribution of Chinese Businessmen
|
75
|
%
|
||||||||
Tri-way
|
25
|
%
|
Cash
|
25
|
%
|
Parties
|
Change of equity
interest up to
|
Assets that may be converted
|
Maximum % that will
be converted
|
|||||||
Chinese Businessmen
|
25
|
%
|
Cash
|
2.5
|
%
|
|||||
Plants and equipment
|
6.25
|
%
|
||||||||
Properties
|
6.25
|
%
|
||||||||
Land Use Right
|
2.5
|
%
|
||||||||
Others
|
1.25
|
|||||||||
Total contribution of Chinese Businessmen
|
25
|
%
|
||||||||
Tri-way
|
75
|
%
|
Cash
|
75
|
%
|
|
¨
|
The responsibilities of the Chinese Businessmen:
|
|
1.
|
To pay their share of the Registered Capital on a timely manner.
|
|
2.
|
To apply to relevant Chinese Authorities in order to obtain the official approval, registration and business license for the incorporation of the SFJVC.
|
|
3.
|
To apply to the Land Authorities of China to obtain official approval of the Land Use Right of the project land.
|
|
4.
|
To introduce and to organize all local sub-contractors and contractors to carry out construction work relating to the scopes of civil engineering, designs, building and all other related matters for the SFJVC for the purpose of developing the fish farm.
|
|
5.
|
To introduce to and to organize all local suppliers and manufacturers for the SFJVC such that the SFJVC will be able to obtain supplies and manufacturing of plants and equipment for the fish farm.
|
|
6.
|
To apply to the customs authorities and to obtain import clearance for all imported plants and equipment of the fish farm and to arrange local transportation for the delivery of the imported plants and equipment to the project site.
|
|
7.
|
To introduce to and to organize all local contractors and sub-contractors for the SFJVC such that the SFJVC will be able to construct and to connect all basic infrastructure and utility services needed at the project site of the fish farm.
|
|
8.
|
To assist the SFJVC in recruiting Chinese management personnel, technical personnel, workers and other workers needed for its fish farm.
|
|
9.
|
To assist foreign workers and staffs of the SFJVC in their applications for entry visas, work permits and other associated local traveling arrangements.
|
|
10.
|
To co-ordinate other general necessities requested by the SFJVC from time to time during the development period of the SFJVC.
|
|
o
|
The responsibilities of Tri-way:
|
|
1.
|
To pay its share of the Registered Capital on a timely manner.
|
|
2.
|
To organize and to arrange supplies, purchases, delivery and related matters of all imported plants and equipment needed by the Fish Farm.
|
|
3.
|
To organize and to arrange all transportation and related logistics needed for the importation of imported plants and equipment for delivery to the appropriate sea port in China.
|
|
4.
|
To provide qualified technical supervisors, personnel and inspectors for the installation and commissioning of all plants and equipment of the fish farm.
|
|
5.
|
To provide training to the personnel and workers needed for the operation of the fish Farm.
|
|
6.
|
Being the Master license holder of the AP Technology, Tri-way shall ensure that the performance of the Fish Farm (including but not limiting to the productivity and durability of the Fish Farm) will be reached within the targeted schedule.
|
|
7.
|
To assist the SFJVC in other matters related to the Fish Farm Development works as and when requested by the SFJVC.
|
|
¨
|
The Board of directors shall consist of 3 members; 1 appointee from Chinese Businessmen and 2 from Tri-way. The director appointed by Chinese Businessmen shall be made the Chairperson, whereas 1 director appointed by Tri-way shall be made the Deputy Chairperson. The tenure of the Chairperson and the Deputy Chairperson shall be 3 years, renewable at the discretion of the appointing party.
|
|
·
|
Solid waste separator and filters to collect all solid waste from the water
|
|
·
|
Un-soluble waste bio-filters to absolve all un-soluble waste
|
|
·
|
Sand based multi-purpose filtration systems for the habitation of prawns
|
|
·
|
Disinfection and antiseptic compartments
|
|
·
|
Diseases eliminators compartments
|
|
·
|
O3 generators compartments
|
|
·
|
O2 injectors chambers
|
|
·
|
Fine screen separators to keep the fingerlings in the tanks.
|
|
·
|
Sun-light penetrators
|
|
·
|
Heat exchangers
|
|
·
|
Gravitation channels for the moving and grading of prawns between tanks.
|
|
·
|
Farm labor (i.e. 150 man hours per ton of production)
|
|
·
|
Power consumption (i.e. US$188. / Ton of production based on rate of US$0.11/Kw)
|
|
·
|
Water Consumption (i.e. Average of 35,000 l of water / Ton of production)
|
|
·
|
Feed Conversion rate (i.e. Average on 1 kg of feed to 1 kg of prawn).
|
|
·
|
Mortality rate: (i.e. for the growing prawns from visible fingerlings at 10%)
|
|
·
|
To produce uniform and high standard of quality “Organic Food” in efficient and economically manner, supported by sustainable markets to meet the middle income population of China as well as other Asian countries.
|
|
·
|
To bring the farmed produce and products directly from farms to the end consumer’s markets, thus providing more efficient services and cost saving benefits to the end consumers as a whole.
|
|
·
|
To bring better economic benefits to the farmers and growers, thus improving their living standard and bringing economic benefits to the communities as a whole.
|
|
·
|
No income tax
|
|
·
|
No value added tax, subsidizes in transportation within the country
|
|
·
|
No import tax on imported plants and equipment
|
|
·
|
Rebate of development capital calculated up to 33% of development assets
|
|
·
|
Advantageous loans with no interest or fixed terms of repayment
|
|
·
|
“Land Usage Rights” being accepted as collateral that can be pledged against bank borrowings
|
|
·
|
Environmental
|
|
·
|
Business Registration
|
|
·
|
Foreign Investment and Trade
|
|
·
|
Foreign Exchange Control
|
|
·
|
Finance
|
|
·
|
Commerce and Business
|
|
·
|
Statistic and Records
|
|
·
|
Customs
|
|
·
|
Land
|
|
·
|
Taxation
|
|
·
|
Town Planning
|
|
·
|
Business and Commerce
|
|
·
|
Land Development
|
|
·
|
Health
|
|
SIAF China
office and
Capital
Award
|
Intermediate
holding
companies
|
HST
|
ZhongXing
[1]
|
SanJiang A
Power
|
Total
|
||||||||||||||||||
Full Time
|
||||||||||||||||||||||||
Administration
|
||||||||||||||||||||||||
Management
|
8 | 2 | 3 | 8 | 8 | 29 | ||||||||||||||||||
Clerical
|
3 | 2 | 2 | 12 | 7 | 26 | ||||||||||||||||||
Sales
|
5 | 0 | 2 | 3 | 5 | 15 | ||||||||||||||||||
Non-Skilled
|
2 | 0 | 3 | 6 | 10 | 21 | ||||||||||||||||||
Operation
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Management
|
3 | 0 | 2 | 6 | 5 | 16 | ||||||||||||||||||
Clerical
|
3 | 0 | 3 | 3 | 3 | 12 | ||||||||||||||||||
Skilled
|
6 | 0 | 3 | 80 | 35 | 124 | ||||||||||||||||||
Non-skilled
|
3 | 0 | 5 | 20 | 25 | 53 | ||||||||||||||||||
Part Time
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Operation
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Skilled harvesting
|
0 | 0 | 100 | 80 | 40 | 220 | ||||||||||||||||||
Non-skilled
|
0 | 0 | 12 | 12 | 8 | 32 | ||||||||||||||||||
Total
|
33 | 4 | 135 | 230 | 146 | 548 |
|
SIAF China
office and
Capital
Award and
Macau EIJI
|
Intermediate
holding
companies
|
HST
|
Enping A P
Cattle
And
Enping A P
Cattle
|
SanJiang A
Power
|
Total
|
||||||||||||||||||
Full Time
|
||||||||||||||||||||||||
Administration
|
||||||||||||||||||||||||
Management (Executives)
|
10 | 2 | 3 | 4 | 8 | 25 | ||||||||||||||||||
Clerical
|
3 | 0 | 2 | 6 | 7 | 18 | ||||||||||||||||||
Sales
|
5 | 0 | 2 | 3 | 5 | 15 | ||||||||||||||||||
Non-Skilled
|
2 | 0 | 3 | 4 | 10 | 19 | ||||||||||||||||||
Operation
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Management (General)
|
6 | 0 | 3 | 0 | 5 | 14 | ||||||||||||||||||
Clerical
|
6 | 0 | 3 | 0 | 3 | 12 | ||||||||||||||||||
Skilled
|
6 | 0 | 3 | 0 | 35 | 44 | ||||||||||||||||||
Non-skilled (Casual)
|
3 | 0 | 5 | 0 | 25 | 33 | ||||||||||||||||||
Part Time
|
0 | 0 | 40 | 0 | 0 | 40 | ||||||||||||||||||
Operation
|
0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Skilled harvesting
|
0 | 0 | 120 | 0 | 40 | 160 | ||||||||||||||||||
Non-skilled
|
0 | 0 | 12 | 0 | 8 | 20 | ||||||||||||||||||
Total
|
41 | 4 | 196 | 17 | 146 | 400 |
|
·
|
The Dairy business, through a combination of Hang Yu Tai Investment Limited and ZhongXingNongMu Co. Ltd. [Sold in February 2011]
|
|
·
|
The Plantation business, through a combination of Macau Eiji Company Limited and Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd.
|
|
·
|
The Fishery business, through a combination of Capital Award Inc. and SIAF.
|
|
·
|
The Beef business , through a combination of Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd. and Qinghai Sanjiang A Power Agriculture Co. Ltd.
|
Category
|
2011
|
2010
|
Difference
|
|||||||||
Fishery
|
$
|
1,559,745
|
$
|
300,000
|
$
|
1,259,745
|
||||||
Dairy
|
-
|
4,111,322
|
(4,111,322
|
)
|
||||||||
Plantation
|
-
|
-
|
-
|
|||||||||
Beef
|
1,561,786
|
-
|
1,561,786
|
|||||||||
Totals
|
$
|
3,121,531
|
$
|
4,411,322
|
$
|
(1,289,791
|
)
|
Category
|
2011
|
2010
|
Difference
|
|||||||||
Fishery
|
$
|
619,931
|
$
|
-
|
$
|
619,931
|
||||||
Dairy
|
-
|
1,824,741
|
(1,824,741
|
)
|
||||||||
Plantation
|
-
|
-
|
-
|
|||||||||
Beef
|
570,684
|
-
|
570,684
|
|||||||||
Totals
|
$
|
1,190,615
|
$
|
1,824,741
|
$
|
(634,126
|
)
|
Three Months Ended March 31,
|
||||||||||||
Category
|
2011
|
2010
|
Difference
|
|||||||||
Fishery
|
939,814
|
300,000
|
639,814
|
|||||||||
Dairy
|
-
|
2,286,581
|
(2,286,581
|
)
|
||||||||
Plantation
|
-
|
-
|
||||||||||
Beef
|
991,102
|
-
|
991,102
|
|||||||||
Total
|
1,930,916
|
2,586,581
|
(655,665
|
)
|
Category
|
2011
|
2010
|
Difference
|
|||||||||
Office and corporate expenses
|
$
|
256,994
|
$
|
199,189
|
$
|
57,805
|
||||||
Wages and Salaries
|
$
|
247,906
|
$
|
196,251
|
$
|
51,655
|
||||||
Traveling and related lodging
|
$
|
24,379
|
$
|
2,598
|
$
|
21,781
|
||||||
Motor vehicles expenses and local transportation
|
$
|
6,545
|
$
|
4,241
|
$
|
2,304
|
||||||
Entertainments and meals
|
$
|
22,929
|
$
|
1,410
|
$
|
21,519
|
||||||
Others and miscellaneous
|
$
|
41,906
|
$
|
6,309
|
$
|
35,597
|
||||||
Depreciation and amortization
|
$
|
89,487
|
$
|
104,338
|
$
|
(14, 851
|
)
|
|||||
Sub-total
|
$
|
690,146
|
$
|
514,336
|
$
|
175,810
|
||||||
Interest expenses
|
$
|
3,172
|
$
|
2,927
|
$
|
245
|
||||||
Total
|
$
|
693,318
|
$
|
517,263
|
$
|
176,055
|
|
(1)
|
Building costs and imported costs of plants and equipment were at their highest in China during 2008 and the early months of 2009.
|
|
(2)
|
It was not until after the first six months of 2009 that we finalized our investigations and tests to enable the manufacture of parts and components for our fishery plants and equipment. By waiting, we were able to experience substantial cost savings while obtaining durable quality standard components as compared to the imports.
|
|
(3)
|
It was not until recently that we were able to develop a management system that will provide enough security in our farm operation to protect our technology from being pirated.
|
Contractual
Obligations
|
Less than
1 year
|
1-3 years
|
3-5
years
|
More
than 5
years
|
Total
|
|||||||||||||||
Long Term Bank Debts
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
2010
|
2009
|
|||||||
$
|
$
|
|||||||
Revenue
|
40,551,066 | 21,725,839 | ||||||
Cost of goods sold
|
18,097,641 | 9,385,442 | ||||||
Gross profit
|
22,453,425 | 12,340,397 | ||||||
General and administrative expenses
|
(3,540,166 | ) | (2,852,084 | ) | ||||
Net income from operations
|
18,913,259 | 9,488,313 | ||||||
Other income (expenses)
|
||||||||
Other income
|
226,586 | 26 | ||||||
Loss on extinguishment of debts
|
(6,088,625 | ) | - | |||||
Interest expense
|
(354,140 | ) | (470,019 | ) | ||||
Net income
(expenses
)
|
(6,216,179 | ) | (469,993 | ) | ||||
Net income
before income taxes
|
12,697,080 | 9,018,320 | ||||||
Provision for income taxes
|
- | - | ||||||
Net income
|
12,697,080 | 9,018,320 | ||||||
Less: Net income attributable to the non - controlling interest
|
(4,196,258 | ) | (2,210,381 | ) | ||||
Net income attributable to the Sino Agro Food, Inc. and subsidiaries
|
8,500,822 | 6,807,939 | ||||||
Other comprehensive income
|
. | |||||||
Foreign currency translation gain
|
2,097,324 | 31,118 | ||||||
Comprehensive income
|
10,598,146 | 6,839,057 | ||||||
Less: other comprehensive income attributable to the non -controlling interest
|
(461,411 | ) | (1,359 | ) | ||||
Comprehensive income attributable to Sino Agro Food, Inc. and subsidiaries
|
10,136,735 | 6,837,698 | ||||||
Earnings per share attributable to Sino Agro Food, Inc.
|
||||||||
and subsidiaries common stockholders:
|
||||||||
Basic
|
$ | 0.16 | $ | 0.13 | ||||
Diluted
|
$ | 0.14 | $ | 0.13 | ||||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
54,223,823 | 52,889,473 | ||||||
Diluted
|
61,223,823 | 52,889,473 |
Year
Ended
December
31
|
||||
2009
|
||||
Fishery
|
$ | 726,702 | ||
Dairy
|
$ | 18,087,972 | ||
Plantation
|
$ | 2,911,165 | ||
Beef
|
- | |||
Total
|
$ | 21,725,839 | ||
2010
|
||||
Fishery
|
$ | 4,163,833 | ||
Dairy
|
$ | 29,632,300 | ||
Plantation
|
$ | 4,774,854 | ||
Beef
|
$ | 1,980,079 | ||
Total
|
$ | 40,511,066 |
|
(1)
|
Building costs and imported costs of plants and equipment were at their highest in China during 2008 and the early months of 2009.
|
|
(2)
|
It was not until after the first six months of 2009 that we finalized our investigations and tests to enable the manufacture of parts and components for our fishery plants and equipment. By waiting, we were able to experience substantial cost savings while obtaining durable quality standard components as compared to the imports.
|
|
(3)
|
It was not until recently that we were able to develop a management system that will provide enough security in our farm operation to protect our technology from being pirated.
|
Year
ended
December 31
|
||||
2009
|
||||
Fishery
|
$
|
-
|
||
Dairy
|
$
|
8,579,738
|
||
Plantation
|
$
|
805,704
|
||
Beef
|
$
|
-
|
||
Total
|
$
|
9,385,442
|
||
2010
|
||||
Fishery
|
$
|
1,055,089
|
||
Dairy
|
$
|
14,366,437
|
||
Plantation
|
$
|
1,828,324
|
||
Beef
|
$
|
847,791
|
||
Total
|
$
|
18,097,641
|
Year
ended
December 31.
|
||||
2009
|
||||
Fishery
|
$
|
726,702
|
||
Dairy
|
$
|
9,508,234
|
||
Plantation
|
$
|
2,105,461
|
||
Beef
|
$
|
-
|
||
Total
|
$
|
12,340,397
|
||
2010
|
||||
Fishery
|
$
|
3,108,744
|
||
Dairy
|
$
|
15,265,863
|
||
Plantation
|
$
|
2,946,530
|
||
Beef
|
$
|
1,132,288
|
||
Total
|
$
|
22,453,425
|
Contractual
Obligations
|
Less than
1 year
|
1-3 years
|
3-5
years
|
More
than
5 years
|
Total
|
||||||||||||
Long Term Bank Debts
|
$
|
-
|
$
|
3,776,435
|
$
|
-
|
$
|
$
|
3,776,435
|
Name of related party:
|
Nature of transaction:
|
|
Mr. Rui Xiong He, director of Enping City Juntang Town Hang Sing Tai Agriculture Development Co Ltd, subsidiary of the Company
|
Included in other payables, due to Mr. Rui Xiong He is $nil and $16,985 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Xiang Jun Fang, director of Enping City Juntang Town Hang Sing Tai Agriculture Development Co Ltd, subsidiary of the Company
|
Included in other receivables, due from Mr. Xiang Jun Fang is $nil and $260,101 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in other payables, due to Mr. Xiang Jun Fang is $nil and $150,057 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Mr. Solomon Yip Kun Lee, Chairman
|
Included in due to directors, due to Mr. Solomon Yip Kun Lee is $926,196 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in due from directors, Mr. Solomon Yip Kun Lee is $nil and $73,164 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Michael Bor Hann Chen, director and
company secretary
|
Included in due from directors, due from Mr. Michael Bor Hann Chen is $nil and $38,228 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Qinghai Sanjiang A Power Agriculture Co., Ltd (“SJAP”), investee
|
Included in other payable, due to SJAP is $nil and $2,494 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
Mr. Xi Ming Sun, director of
ZhongXingNong Nu Co., Ltd
|
Included in other payable, due to Mr. Xi Ming Sun is $213,223 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
|
Mr. YiLin Zhao, director of Qinghai Sanjiang A Power Agriculture Co., Ltd
|
Included in other payable, due to Mr. YiLin Zhao is $19,661 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
Category
|
2010
|
2009
|
Difference
|
|||||||||
Fishery
|
$
|
4,163,833
|
$
|
726,702
|
$
|
3,437,131
|
||||||
Dairy
|
29,632,300
|
18,087,972
|
11,544,328
|
|||||||||
Plantation
|
4,774,854
|
2,911,165
|
1,863,689
|
|||||||||
Beef
|
1,980,079
|
-
|
1,980,079
|
|||||||||
Totals
|
$
|
40,551,066
|
$
|
21,725,839
|
$
|
18,825,227
|
Category
|
2010
|
2009
|
Difference
|
|||||||||
Fishery
|
$
|
1,055,089
|
$
|
-
|
$
|
1,055,089
|
||||||
Dairy
|
14,366,437
|
8,579,738
|
5,786,699
|
|||||||||
Plantation
|
1,828,324
|
805,704
|
1,022,620
|
|||||||||
Beef
|
847,791
|
-
|
847,791
|
|||||||||
Totals
|
$
|
18,097,641
|
$
|
9,385,442
|
$
|
8,712,199
|
|
Years-ended December 31,
|
|||||||
Category
|
2010
|
2009
|
||||||
Fishery
|
3,108,744
|
726,702
|
||||||
(75
|
)%
|
(100
|
)%
|
|||||
Dairy
|
15,265,863
|
9,508,234
|
||||||
(52
|
)%
|
(53
|
)%
|
|||||
Plantation
|
2,946,530
|
2,105,461
|
||||||
(62
|
)%
|
(72
|
)%
|
|||||
Beef
|
1,132,288
|
-
|
||||||
(57
|
)%
|
-
|
Category
|
2010
|
2009
|
Difference
|
|||||||||
Office and corporate expenses
|
$
|
1,660,959
|
$
|
1,468,377
|
$
|
(192,582
|
)
|
|||||
Wages and Salaries
|
$
|
1,403,102
|
$
|
1,018,497
|
$
|
(384,605
|
)
|
|||||
Traveling and related lodging
|
$
|
124,024
|
$
|
76,636
|
$
|
(47,388
|
)
|
|||||
Motor vehicles expenses and local transportation
|
$
|
54,697
|
$
|
9,540
|
$
|
(45,157
|
)
|
|||||
Entertainments and meals
|
$
|
39,090
|
$
|
148,971
|
$
|
109,881
|
||||||
Others and miscellaneous
|
$
|
25,512
|
$
|
28,578
|
$
|
3,066
|
||||||
Depreciation and amortization
|
$
|
244,177
|
$
|
101,485
|
$
|
(142,692
|
)
|
|||||
Sub-total
|
$
|
3,551,561
|
$
|
2,852,084
|
$
|
(699,477
|
)
|
|||||
Interest expenses
|
354,140
|
470,019
|
115,879
|
|||||||||
Total
|
$
|
3,905,701
|
$
|
3,322,103
|
$
|
(583,598
|
)
|
|||||
|
-
|
raw materials – purchase cost on a weighted average basis;
|
|
-
|
manufactured finished goods and work-in-progress – cost of direct materials and labor and a proportion of manufacturing overhead based on normal operation capacity but excluding borrowing costs; and
|
|
-
|
retail and wholesale merchandise finished goods – purchase cost on a weighted average basis.
|
Milk cows
|
10 years
|
Plant and machinery
|
5 - 10 years
|
Structure and leasehold improvements
|
10 - 20 years
|
Mature seeds
|
20 years
|
Furniture and equipment
|
2.5 - 10 years
|
Motor vehicles
|
5 -10 years
|
(d)
|
equity-at-risk is not sufficient to support the entity's activities
|
(e)
|
As a group, the equity-at-risk holders cannot control the entity; or
|
(f)
|
The economics do not coincide with the voting interest
|
|
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
|
1.
|
Address: Guangzhou City, Guangdong Province, P.R. China
|
|
2.
|
Address: Huangyuan Town, Qinghai Province, P.R. China
|
|
3.
|
Address: Enping City, Guangzhou
|
|
4.
|
Address: Room 504, Unit 2, Building 3, Anfu New Village, Anfu Town, Linli County, Hunan Province
|
|
1.
|
Address: ZhangMutou,YanE Village, LiangXi Town, Guangdong Province
|
|
2.
|
Address: DongGongPingTang,YanE Village, LiangXi Town, Guangdong Province
|
|
3.
|
Address: Western to ChuLuo,YanE Village, LiangXi Town, Guangdong Province
|
|
4.
|
Address: North to SaoYiMing, YanE Village, LiangXi Town, Guangdong Province
|
|
5.
|
Address: South to PaiZi and ChunZi, YanE Village, LiangXi Town, Guangdong Province
|
|
6.
|
Address: ZhangMutou, Enping City, Guangdong Province
|
|
7.
|
Address: DongChuLu, Enping City, Guangdong Province
|
|
8.
|
Address: Western to SaoYi Lang, Enping City, Guangdong Province
|
|
9.
|
Address: South to XiangZiZhi Zi, Enping City, Guangdong Province
|
|
10.
|
Address: YanE Village LiangXi Town, Guangdong Province
|
|
11.
|
Address: Shanxiang School YanE Village, LiangXi Town, Guangdong Province
|
|
12.
|
Address: NiuyantanDaiwan Village, JunTang Town, Guangdong Province
|
|
13.
|
Address: Yi Dui Sheng Feng Kuang, Huang Bi District, Niu Jiang Town, Guangdong Province.
|
|
14.
|
Address: Er Dui Sheng Feng Kuang, Huang Bi District, Niu Jiang Town, Guangdong Province.
|
|
15.
|
Address: San Dui Sheng Feng Kuang, Huang Bi District, Niu Jiang Town, Guangdong Province.
|
|
16.
|
Address: Lian Dui Sheng Feng Kuang, Huang Bi District, Niu Jiang Town, Guangdong Province.
|
|
1.
|
Location: Guangdong Province, Enping City, Liangxi Town
,
Yane Shang Chong Village, east of the village Namdu village areas (formerly sugar cane farm)
|
|
2.
|
Address: Guangdong Province, Enping City, Liangxi Town
,
Yane Nandu Village (hereinafter called "the Landowner"), east of the village at Tongwali, neigbouring the ponds, Shatiangang, both sides of the road, Chuanyaodeng, Shadu areas (formerly sugar cane farm)
|
|
3.
|
Address: Guangdong Province, Enping City, Liangxi Town
,
Yane Xiaoban Village
|
Shareholders
|
|
Number of
Common
Shares
|
|
|
Percentage
Of Common
Stock
|
|
||
Lee Yip Kun Solomon
|
|
|
13,500,000
|
|
|
|
24.33
|
%
|
Tan Poay Teik
|
|
|
4,500,000
|
|
|
|
8.11
|
%
|
Chen Bor Hann
|
|
|
900,000
|
|
|
|
1.62
|
%
|
All officers and directors as a group [3 persons]
|
|
|
18,900,000
|
|
|
|
34.06
|
%
|
Shareholders
|
|
# of
Preference
Series A
Shares
|
|
|
Percentage
of Series A
Preferred
Stock
|
|
||
Lee Yip Kun Solomon
|
|
|
70
|
|
|
|
70
|
%
|
Tan Poay Teik
|
|
|
25
|
|
|
|
25
|
%
|
Chen Bor Hann
|
|
|
5
|
|
|
|
5
|
%
|
All officers and directors as a group [3 persons]
|
|
|
100
|
|
|
|
100
|
%
|
NAME OF
PRINCIPAL
SHAREHOLDER
|
NUMBER OF
VOTES OF
COMMON
STOCK
|
NUMBER OF
VOTES OF SERIES
A PREFERRED
STOCK
|
COMBINED
NUMBER OF
VOTES
|
PERCENTAGE OF
VOTES FOR
COMBINED
OWNERSHIP
|
||||||||||||
Lee Yip Kun Solomon
|
13,500,000 | 31,065,515 | 44,565,515 | 44.63 | % | |||||||||||
Tan Poay Teik
|
4,500,000 | 11,094,828 | 15,594,828 | 15.62 | % | |||||||||||
Chen Bor Hann
|
900,000 | 2,218,965 | 3,118,965 | 3.12 | % | |||||||||||
All officers and directors as a group [3 persons]
|
18,900,000 | 44,379,308 | 63,279,308 | 63.37 | % |
l
|
Applicable % is based on a total of 99,853,444 votes deriving from the sum of 100 Series A shares consisting 44,379,308 voting rights as at 31
st
December 2010 and 55,474,136 voting rights of the total Common shares fully issued as at December 31, 2010.
|
l
|
Formula for calculating the votes of the Series A shares is as follows:
|
Shareholders
|
|
# of
Preference
Series B
Shares
|
|
|
Percentage
of Series B
Preferred
Stock
|
|
||
Lee Yip Kun Solomon
|
|
|
4,900,000
|
|
|
|
70
|
%
|
Tan Poay Teik
|
|
|
1,750,000
|
|
|
|
25
|
%
|
Chen Bor Hann
|
|
|
350,000
|
|
|
|
5
|
%
|
All officers and directors as a group [3 persons] Held under a company namely Capital Adventure Inc.
|
|
|
7,000,000
|
|
|
|
100
|
%
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Lee Yip Kun Solomon
|
|
61
|
|
C.E.O. and Director
|
Tan Poay Teik
|
|
52
|
|
C.E.O. Marketing
|
Chen Bor Hann
|
|
46
|
|
Company Secretary
|
|
·
|
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time,
|
|
·
|
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses),
|
|
·
|
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities,
|
|
·
|
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
|
·
|
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.
|
|
·
|
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.
|
|
·
|
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
|
Name and Principal Position
|
Fiscal
Year
Ended
|
|
Salary($)
|
|
|
Option
Awards
($)
|
|
|
Total
($)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
Mr. Lee Yip Kun Solomon, Chief Executive Officer
|
2009
|
|
|
336,000
|
|
|
|
0
|
|
|
|
336,000
|
|
|
|
2010
|
|
|
336,000
|
|
|
|
|
|
|
|
336,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Tan Paoy Teik, Chief Marketing Officer
|
2009
|
|
|
174,000
|
|
|
|
0
|
|
|
|
174,000
|
|
|
|
2010
|
|
|
174,000
|
|
|
|
|
|
|
|
174,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Chen Bor Hann, Secretary
|
2009
|
|
|
60,000
|
|
|
|
0
|
|
|
|
60,000
|
|
|
|
2010
|
|
|
60,000
|
|
|
|
|
|
|
|
60,000
|
|
Name
|
|
Number of
securities
underlying
unexercised
options
(#)
Exercisable
|
|
|
Number of
securities
underlying
unexercised
unearned
options(#)
|
|
|
Equity
incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options (#)
|
|
|
Option
exercise
price ($)
|
|
|
Option
expiration
date
|
|
|
Number of
shares or
units of
stock
that have
not
vested (#)
|
|
|
Market
value of
shares or
units of
stock that
have
not vested
($)
|
|
|||||||
Mr. Lee Solomon
Yip Kun
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
Mr. Tan Paoy Teik
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Mr. Chen Bor Hann
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Name and Principal Position
|
|
Salary($)
|
|
Non-Cash
Compensation:
Shares of
Common
Stock
|
||
|
|
|
|
|||
Mr. Lee Yip Kun Solomon, Chief Executive Officer and Chairman
|
|
|
336,000
|
336,000
|
||
|
|
|
|
|
||
Mr. Tan Paoy Teik, Chief Marketing Officer, Director
|
|
|
174,000
|
174,000
|
||
|
|
|
|
|
||
Mr. Chen Bor Hann, Secretary, Director
|
|
|
60,000
|
60,000
|
|
•
|
any outstanding option or other equity-based award repriced or otherwise materially modified (such as by extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined;
|
|
•
|
any waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock incentive plan compensation or payouts;
|
|
•
|
any option or equity grant;
|
|
•
|
any non-equity incentive plan award made to a named executive officer
|
|
•
|
any nonqualified deferred compensation plans including nonqualified defined contribution plans; or
|
|
•
|
any payment for any item to be included under All Other Compensation in the Summary Compensation Table.
|
Name
|
Year end
|
|
Fees or cash
paid ($)
|
|
|
Stock
awards
|
|
|
Total
|
|
||||
Mr. Lee Yip Kun Solomon
|
Dec. 31, 2009
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Mr. Tan Paoy Teik
|
Dec. 31, 2009
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Mr. Chen Bor Hann
|
Dec. 31, 2009
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Name of related party
|
|
Nature of transactions
|
|
|
|
Mr. Rui Xiong He , director of Enping City Juntang Town Hang Sing Tai Agriculture Co. Ltd, subsidiary of the Company
|
|
Included in other payables, due to Mr. Rui Xiong He is $nil and $16,985 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
|
|
Mr. Xiang Jun Fang, director of Enping City Juntang Town Hang Sing Tai Agriculture Co. Ltd, subsidiary of the Company
|
|
Included in other receivables, due from Mr. Xiang Jun Fang is $nil and $260,101 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in other payables, due to Mr. Xiang Jun Fang is $nil and $150,057 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
|
|
Qinghai Sanjiang A Power Agriculture Co., Ltd (“SJAP”), investee
|
|
Included in other payable, due to SJAP is $nil and $2,494 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
|
|
Mr. Solomon Yip Kun Lee, Chairman
|
|
Included in due to directors, due to Mr. Solomon Yip Kun Lee is $926,196 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in due from directors, Mr. Solomon Yip Kun Lee is $nil and $73,164 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
|
|
Mr. Michael Bor Hann Chen, director and company secretary
|
|
Included in due from directors, due from Mr. Michael Bor Hann Chen is $nil and $38,228 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
Mr. Xi Ming Sun, director of ZhongXingNong Nu Co., Ltd
|
|
Included in other payable, due to Mr. Xi Ming Sun is $213,223 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
|
|
|
Mr. Yi Lin Zhao, director of Qinghai Sanjiang A Power Agriculture Co., Ltd
|
|
Included in other payable, due to Mr. Yi Lin Zhao is $19,661 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
Date
|
Name of director account
|
|
DR
$
|
|
|
CR
$
|
|
|
Balance
$
|
|
||||
As of 12/31/2009
|
Due to, Mr. Rui Xiong He,
|
|
|
|
|
|
16,985
|
|
|
|
-16,985
|
|
||
As of 12/31/2010
|
Repayment made to Mr. Rui Xiong He
|
|
|
16,985
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2009
|
Due from Mr. Xiang Jun Fang
|
|
|
260,101.
|
|
|
|
|
|
|
|
260,101
|
|
|
|
Due to Mr. Xiang Jun Fang
|
|
|
|
|
|
|
150,057
|
|
|
|
110,044
|
|
|
As of 12/31/2010
|
Due from Mr. Xiang Jun Fang
|
|
|
0
|
|
|
|
|
|
|
|
0
|
|
|
|
Due to Mr. Xiang Jun Fang
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
As of 01/31/2011
|
Balance of Mr. Xiang Jun Fang
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2009
|
Due to Mr. Solomon Lee
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
Due from Mr. Solomon Lee
|
|
|
73,164
|
|
|
|
|
|
|
|
73,164
|
|
|
As of 12/31/2010
|
Due to Mr. Solomon Lee
|
|
|
|
|
|
|
926,196
|
|
|
|
|
|
|
|
Due from Mr. Solomon Lee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2010
|
Balance due to Mr. Solomon Lee
|
|
|
|
|
|
|
|
|
|
|
-926,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2009
|
Due from Mr. Chen Bor Hann
|
|
|
38,228
|
|
|
|
|
|
|
|
38,228
|
|
|
As of 12/31/2010
|
Due to Mr. Chen Bor Hann
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2010
|
Due to Mr. Xi Ming Sun
|
|
|
|
|
|
|
213,223
|
|
|
|
-213,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of 12/31/2010
|
Due to Mr. Yi Lin Zhao
|
|
|
|
|
|
|
19,661
|
|
|
|
-19,661
|
|
|
High
|
|
|
Low
|
|
|||
October 1 – December 31, 2008
|
|
$
|
0.64
|
|
|
$
|
0.01
|
|
January 1 – March 31, 2009
|
|
$
|
0.16
|
|
|
$
|
0.01
|
|
April 1 – June 30, 2009
|
|
$
|
0.75
|
|
|
$
|
0.1
|
|
July 1 – September 30, 2009
|
|
$
|
1.01
|
|
|
$
|
0.5
|
|
October 1 – December 31, 2009
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
January 1 – March 31, 2010
|
|
$
|
1.88
|
|
|
$
|
1.07
|
|
April 1 – June 30, 2010
|
|
$
|
1.31
|
|
|
$
|
0.44
|
|
July 1 - September 30, 2010
|
|
$
|
1.44
|
|
|
$
|
0.47
|
|
October 1 – December 31, 2010
|
|
$
|
1.80
|
|
|
$
|
1.15
|
|
Date
|
Events
|
|
Shares
issued
|
|
|
Price /
share
|
|
|
Consideration
received
|
|
|
# of Non-USA
Investors
|
|
|
# of
USA
Investors
|
|
||||||
July 24, 2007
|
Issuance of shares for the Merger of CA and VOLG
|
|
|
32,000,000
|
|
|
|
0.617
|
|
|
|
19,739,157
|
|
|
|
62
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 5, 2007
|
Issuance of shares for the acquisition of 100% equity in Macau Eiji Company Limitada
|
|
|
2,000,000
|
|
|
|
1.939
|
|
|
|
3,878,739
|
|
|
|
3
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 5, 2007
|
Issuance of shares for the acquisition of 100% equity in HangYuTai Investmento Limitada
|
|
|
7,000,000
|
|
|
|
2.416
|
|
|
|
16,910,000
|
|
|
|
3
|
|
|
|
0
|
|
|
Sept. 5, 2007
|
Issuance of shares for the acquisition of 100% equity in
Triway Industries Limited
|
|
|
1,000,000
|
|
|
|
2.25
|
|
|
|
2,250,000
|
|
|
|
8
|
|
|
|
0
|
|
|
Total for 2007
|
|
|
|
42,000,000
|
|
|
|
|
|
|
|
42,777,896
|
|
|
|
|
|
|
|
|
|
Date
|
Events
|
|
Shares
issued
|
|
|
Price /
share
|
|
|
Consideration
received
|
|
|
# of Non-USA
Investors
|
|
|
# of USA
Investors
|
|
||||||
Oct. 1, 2009
|
Shares sold
|
|
|
150,000
|
|
|
|
0.35
|
|
|
|
52,500
|
|
|
|
0
|
|
|
|
1
|
|
|
Nov. 25. 2009
|
Shares sold
|
|
|
150,000
|
|
|
|
0.35
|
|
|
|
52,500
|
|
|
|
0
|
|
|
|
1
|
|
|
Dec. 11 & 22 2009
|
Shares sold
|
|
|
315,000
|
|
|
|
0.35
|
|
|
|
110,250
|
|
|
|
0
|
|
|
|
1
|
|
|
Dec. 23, 2009
|
Common shares cancelled (from
Solomon Lee share account)
|
|
|
-875,000
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
Total for 2009
|
|
|
|
-260,000
|
|
|
|
|
|
|
|
215,250
|
|
|
|
|
|
|
|
|
|
Date
2010
|
Events
|
|
Shares
issued
|
|
|
Price /
share
|
|
|
Consideration
received
|
|
# of Non-
USA
Investors
|
|
# of USA
Investors
|
|
||||||||
(i) Issuance of shares in settlement of
debts accrued under Promissory Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Jan.1 to 27
|
|
|
1,342,000
|
1.24
|
1,664,080
|
7
|
0
|
|||||||||||||||
Feb. 10
|
|
|
780,000
|
1.20
|
936,000
|
1
|
0
|
|||||||||||||||
March 12 to 19
|
|
|
2,625,000
|
1.19
|
3,123,750
|
3
|
0
|
|||||||||||||||
April 15 to 27
|
|
|
1,055,000
|
1.10
|
1,160,500
|
4
|
0
|
|||||||||||||||
May 13
|
|
|
800,000
|
0.525
|
420,000
|
2
|
0
|
|||||||||||||||
May 14
|
|
|
350,000
|
0.525
|
183,750
|
2
|
0
|
|||||||||||||||
June 10.
|
|
|
1,000,000
|
0.48
|
480,000
|
5
|
0
|
|||||||||||||||
Total Issuance of shares in settlement of debts
|
|
|
7,952,000
|
7,968,080
|
24
|
0
|
||||||||||||||||
|
|
|
||||||||||||||||||||
(ii) Issuance of shares for employees’ compensation
|
|
|
||||||||||||||||||||
May 4.
|
|
|
497,059
|
1.00
|
497,059
|
30
|
0
|
|||||||||||||||
|
|
|
||||||||||||||||||||
(iii) Shares being retired or voided [1]
|
|
|
||||||||||||||||||||
Jan. 11, 2010 (Voided)
|
|
|
(150,002
|
) |
0
|
0
|
(2
|
) |
0
|
|||||||||||||
March 23, 2010 (Retired)
|
|
|
(2,000,000
|
) |
0
|
0
|
(1
|
) |
0
|
|||||||||||||
May 17, 2010 (Voided)
|
|
|
(40,000
|
) |
0
|
0
|
(2
|
) |
0
|
|||||||||||||
June 26, 2010 (Retired & transferred to Preference Series B shares)
|
|
|
(7,000,000
|
) |
1.00
|
(7,000,000
|
) |
(2
|
) |
0
|
||||||||||||
Total shares being retired or voided
|
|
|
(9,190,002
|
) |
(7,000,000
|
) | ||||||||||||||||
June 26, 2010 issuance of Preference Series A & B
|
|
|
7,000,100
|
1.00
|
7,000,100
|
3
|
0
|
|||||||||||||||
Balanced issuance of shares for 1st half 2010
|
|
|
6,259,157
|
8,465,239
|
||||||||||||||||||
|
|
|
||||||||||||||||||||
(iv) Issuance of shares in settlement of debts accrued under Tri-way Subsidiary
|
|
|
||||||||||||||||||||
|
|
|
||||||||||||||||||||
In July 2010
|
|
|
975,000
|
0.50
|
487,500
|
|||||||||||||||||
In August 2010
|
|
|
1,625,000
|
0.57
|
926,250
|
Collectively
|
||||||||||||||||
In September 2010
|
|
|
1,380,000
|
1.50
|
1,497,300
|
1
|
||||||||||||||||
In October 2010
|
|
|
790,855
|
1.27
|
1,004,386
|
|||||||||||||||||
Total for debt settlements
|
|
|
4,770,855
|
3,915,436
|
||||||||||||||||||
|
|
|
||||||||||||||||||||
(v) Issuance of common shares in settlement of debts due to third parties
|
|
|
||||||||||||||||||||
In October 2010
|
|
|
566,145
|
1.27
|
719,004
|
1
|
||||||||||||||||
In November 2010
|
|
|
1,172,000
|
1.50
|
1,758,000
|
1
|
||||||||||||||||
|
|
|
||||||||||||||||||||
Total for settlement of debts
|
|
|
1,738,145
|
2,477,004
|
||||||||||||||||||
|
|
|
||||||||||||||||||||
(vi) Issuance of shares for workers’ compensation
|
|
|
||||||||||||||||||||
In October 2010
|
|
|
22,500
|
1.50
|
33,750
|
3
|
||||||||||||||||
|
|
|
||||||||||||||||||||
(vii) Shares being retired
|
|
|
||||||||||||||||||||
In October 2010
|
|
|
3,000,000
|
0
|
0
|
|||||||||||||||||
|
|
|
||||||||||||||||||||
Balance as at December 31, 2010
|
|
|
55,474,136
|
50,884,475
|
||||||||||||||||||
June 26, 2010 issuance of Pref. Series B shares
|
|
|
7,000,000
|
1.00
|
7,000,000
|
3
|
||||||||||||||||
June 26, 2010 Issuance of Pref. Series B shares
|
|
|
100
|
1.00
|
100
|
|||||||||||||||||
Total
|
|
|
62,474,236
|
57,884,575
|
136
|
5,123
|
¨
|
Total number of common shares issued = 55,474,136
|
o
|
Total number of Preference Series A shares issued = 100
|
|
¨
|
Total number of Preference Series B shares issued and outstanding = 7,000,000
|
|
¨
|
Total issuance of shares (including preference series A & B) shares = 62,474,236
|
|
¨
|
Total consideration received = $57,884,575
|
|
¨
|
Total number of non-USA investors = 136
|
|
¨
|
Total number of USA investors = 5,123
|
|
¨
|
Total number of shareholders = 5,259
|
|
¨
|
Basic number of shares issued and outstanding = 55,474,136
|
|
¨
|
Fully Diluted number of shares issued and outstanding = 62,474,136
|
|
·
|
None of these issuances involved underwriters, underwriting discounts or commissions.
|
|
·
|
Restrictive legends were and will be placed on all certificates issued as described above.
|
|
·
|
The distribution did not involve general solicitation or advertising.
|
|
·
|
The distributions were made only to investors who were sophisticated enough to evaluate the risks of the investment.
|
|
·
|
None of these issuances involved underwriters, underwriting discounts or commissions;
|
|
·
|
We placed Regulation S required restrictive legends on all certificates issued;
|
|
·
|
No offers or sales of stock under the Regulation S offering were made to persons in the United States;
|
|
·
|
No direct selling efforts of the Regulation S offering were made in the United States.
|
|
·
|
Access to all our books and records.
|
|
·
|
Access to all material contracts and documents relating to our operations.
|
|
·
|
The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.
|
PAGE
|
||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F-2 | |||
CONSOLIDATED BALANCE SHEETS
|
F-3 | |||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
F-4 | |||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
F-5 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
F-6 | |||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
F-7 |
2010
|
2009
|
|||||||
$ | $ | |||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
3,890,026 | 2,360,587 | ||||||
Inventories
|
8,913,127 | 6,099,411 | ||||||
Deposits and prepaid expenses
|
14,229,711 | 10,189,266 | ||||||
Accounts receivable, net of allowance for doubtful accounts
|
12,803,771 | 6,869,505 | ||||||
Other receivables
|
3,967,680 | 1,885,491 | ||||||
Due from directors
|
- | 112,267 | ||||||
Total current assets
|
43,804,315 | 27,516,527 | ||||||
Property and equipment
|
||||||||
Property and equipment, net of accumulated depreciation
|
17,155,782 | 7,564,664 | ||||||
Construction in progress
|
2,231,475 | 5,995,939 | ||||||
Land use rights, net of accumulated amortization
|
16,829,410 | 13,769,496 | ||||||
Total property and equipment
|
36,216,667 | 27,330,099 | ||||||
Other assets
|
||||||||
Goodwill
|
12,000,000 | 12,000,000 | ||||||
Proprietary technologies, net of accumulated amortization
|
7,287,883 | 7,634,635 | ||||||
Long term accounts receivable
|
8,459,044 | 9,338,477 | ||||||
License rights
|
1 | 1 | ||||||
Investment in unconsolidated corporate joint venture
|
- | 242,669 | ||||||
Total other assets
|
27,746,928 | 29,215,782 | ||||||
Total assets
|
107,767,910 | 84,062,408 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued expenses
|
390,846 | 756,209 | ||||||
Due to a director
|
926,196 | - | ||||||
Dividends payable
|
210,262 | - | ||||||
Other payables
|
1,412,290 | 4,536,128 | ||||||
Short term debt
|
- | 2,435,221 | ||||||
Total current liabilities
|
2,939,594 | 7,727,558 | ||||||
Other liabilities
|
||||||||
Long term debt
|
3,776,435 | 4,401,002 | ||||||
Total liabilities
|
6,716,029 | 12,128,560 | ||||||
Commitments and contingencies
|
- | - | ||||||
Stockholders' equity
|
||||||||
Preferred stock: $0.001 par value
|
- | - | ||||||
(10,000,000 shares authorized, 0 share issued and outstanding as of December 31, 2010 and December 31, 2009, respectively)
|
||||||||
Series A preferred stock: $0.001 par value
|
- | - | ||||||
(100 shares authorized, 100 and 0 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively)
|
||||||||
Series B convertible preferred stock: $0.001 par value)
|
7,000 | - | ||||||
(10,000,000 shares authorized, 7,000,000 and 0 shares issued and outstanding) as of December 31, 2010 and December 31, 2009, respectively)
|
||||||||
Common stock: $0.001 par value
|
55,474 | 52,684 | ||||||
(100,000,000 shares authorized, 55,474,136 and 52,683,579 shares issued and oustanding as of December 31, 2010 and December 31, 2009, respectively)
|
||||||||
Additional paid - in capital
|
58,586,362 | 43,704,723 | ||||||
Retained earnings
|
25,019,971 | 17,086,949 | ||||||
Accumulated other comprehensive income
|
3,804,116 | 2,168,203 | ||||||
Total Sino Agro Food, Inc. and subsidiaries stockholders' equity
|
87,472,923 | 63,012,559 | ||||||
Non - controlling interest
|
13,578,958 | 8,921,289 | ||||||
Total stockholders' equity
|
101,051,881 | 71,933,848 | ||||||
Total liabilities and stockholders' equity
|
107,767,910 | 84,062,408 |
2010
|
2009
|
|||||||
$ | $ | |||||||
Revenue
|
40,551,066 | 21,725,839 | ||||||
Cost of goods sold
|
18,097,641 | 9,385,442 | ||||||
Gross profit
|
22,453,425 | 12,340,397 | ||||||
General and administrative expenses
|
(3,551,561 | ) | (2,852,084 | ) | ||||
Net income from operations
|
18,901,864 | 9,488,313 | ||||||
Other income (expenses)
|
||||||||
Other income
|
226,586 | 26 | ||||||
Loss on extinguishment of debts
|
(6,077,230 | ) | - | |||||
Interest expense
|
(354,140 | ) | (470,019 | ) | ||||
Net income (expenses)
|
(6,204,784 | ) | (469,993 | ) | ||||
Net income before income taxes
|
12,697,080 | 9,018,320 | ||||||
Provision for income taxes
|
- | - | ||||||
Net income
|
12,697,080 | 9,018,320 | ||||||
Less: Net income attributable to the non - controlling interest
|
(4,196,258 | ) | (2,210,381 | ) | ||||
Net income attributable to the Sino Agro Food, Inc. and subsidiaries
|
8,500,822 | 6,807,939 | ||||||
Other comprehensive income
|
||||||||
Foreign currency translation gain
|
2,097,324 | 31,118 | ||||||
Comprehensive income
|
10,598,146 | 6,839,057 | ||||||
Less: other comprehensive income attributable to the non - controlling interest
|
(461,411 | ) | (1,359 | ) | ||||
Comprehensive income attributable to Sino Agro Food, Inc. and subsidiaries
|
10,136,735 | 6,837,698 | ||||||
Earnings per share attributable to Sino Agro Food, Inc.
|
||||||||
and subsidiaries common stockholders:
|
||||||||
Basic
|
$ | 0.16 | $ | 0.13 | ||||
Diluted
|
$ | 0.14 | $ | 0.13 | ||||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
54,223,823 | 52,889,473 | ||||||
Diluted
|
61,223,823 | 52,889,473 |
2010
|
2009
|
|||||||
$ | $ | |||||||
Cash flows from operating activities
|
||||||||
Net income for the year
|
12,697,080 | 9,018,320 | ||||||
Adjustments to reconcile net income to net cash from operations:
|
||||||||
Depreciation
|
1,255,551 | 820,193 | ||||||
Amortization
|
956,555 | 865,512 | ||||||
Loss on extinguishment of debts
|
6,077,230 | - | ||||||
Common stock issued for services
|
530,809 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Increase in inventories
|
(2,813,716 | ) | (900,170 | ) | ||||
Increase in deposits and prepaid expenses
|
(4,040,445 | ) | - | |||||
Decrease in due from directors
|
112,267 | 723,286 | ||||||
Increase in due to a director
|
3,403,200 | - | ||||||
Decrease in accounts payable and accrued expenses
|
(365,363 | ) | (274,486 | ) | ||||
Increase (decrease) in other payables
|
2,682,364 | (85,551 | ) | |||||
Increase in accounts receivable
|
(5,054,833 | ) | (4,809,241 | ) | ||||
Increase in other receivables
|
(2,082,189 | ) | (687,874 | ) | ||||
Net cash provided by operating activities
|
13,358,510 | 4,669,989 | ||||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(4,479,880 | ) | (1,414,336 | ) | ||||
Investment in unconsolidated corporate joint venture
|
- | (242,669 | ) | |||||
Acquisition of land use rights
|
(3,223,411 | ) | (858,195 | ) | ||||
Payment for construction in progress
|
(2,984,687 | ) | (1,771,686 | ) | ||||
Net cash used in investing activities
|
(10,687,978 | ) | (4,286,886 | ) | ||||
Cash flows from financing activities
|
||||||||
Series A Preferred stock issued for cash
|
100 | - | ||||||
Common stock issued for cash
|
- | 215,250 | ||||||
Proceeds from debts
|
- | 2,435,221 | ||||||
Dividend paid
|
(357,538 | ) | - | |||||
Repayment of long term and short term debt
|
(3,059,788 | ) | (2,435,221 | ) | ||||
Net cash (used in) provided by financing activities
|
(3,417,226 | ) | 215,250 | |||||
Effects of exchange rate changes on cash
|
2,276,133 | 31,116 | ||||||
Increase in cash and cash equivalents
|
1,529,439 | 629,469 | ||||||
Cash and cash equivalents, beginning of year
|
2,360,587 | 1,731,118 | ||||||
Cash and cash equivalents, end of year
|
3,890,026 | 2,360,587 | ||||||
Supplementary disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
354,140 | 470,019 | ||||||
Cash paid for income taxes
|
- | - | ||||||
Non-cash transactions:
|
||||||||
14,461,000 shares of common stock were issued
|
||||||||
for settlement of debts and proprietary technologies payable
|
14,360,520 | - | ||||||
5,190,002 shares of common stock were cancelled
|
- | - | ||||||
519,559 shares of common stock issued for employee's compensation
|
519,559 | - |
1.
|
CORPORATE INFORMATION
|
|
On September 5, 2007, the Company acquired three existing businesses in the People’s Republic of China (“PRC”):
|
|
a)
|
Hang Yu Tai Investment Limited (“HYT”), a company incorporated in Macau, the owner of a 78% equity interest in ZhongXingNongMu Ltd (“ZX”), a company incorporated in the PRC;
|
|
b)
|
Tri-way Industries Limited (“TRW”), a company incorporated in Hong Kong;
|
|
c)
|
Macau Eiji Company Limited (“MEIJI”), a company incorporated in Macau, the owner of 75% equity interest in Enping City Juntang Town Hang Sing Tai Agriculture Co. Ltd. (“HST”), a PRC corporate Sino-Foreign joint venture.
|
|
·
|
Qinghai Province Sanjiang Group Company Limited (English translation) (“Qinghai Sanjiang”), a company owned by the PRC with major business activities in the agriculture industry; and
|
|
·
|
Guangzhou City Garwor Company Limited (English translation) (“Garwor”), a private limited company incorporated in the PRC, specializing in sales and marketing.
|
|
·
|
SJAP is engaged in the business of manufacturing bio-organic fertilizer, livestock feed and development of other agriculture projects in the County of Huangyuan, in the vicinity of the Xining City, Qinghai Province, PRC.
|
1.
|
CORPORATE INFORMATION (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
Name of subsidiaries
|
Place of incorporation
|
Percentage of ownership interest
|
Principal activities
|
|||
Capital Award Inc. ("CA")
|
Belize
|
100% (2009: 100%) directly
|
Fishery development and holder of A-Power Technology master license.
|
|||
Capital Stage Inc. ("CS")
|
Belize
|
100% (2009: 100%) indirectly
|
Dormant
|
|||
Capital Hero Inc. ("CH")
|
Belize
|
100% (2009: 100%) indirectly
|
Dormant
|
|||
Tri-way Industries Limited ("TRW")
|
Hong Kong, PRC
|
100% (2009: 100%) directly
|
Investment holding, holder of enzyme technology master license for manufacturing of livestock feed and bio-organic fertilizer and has not commenced its planned business of fish farm operations.
|
|||
Pretty Mountain Holdings Limited ("PMH")
|
Hong Kong, PRC
|
80% (2009: 80%) directly
|
Dormant
|
|||
Macau Eiji Company Limited ("MEIJI")
|
Macau, PRC
|
100% (2009: 100%) directly
|
Investment holding
|
|||
Enping City Juntang Town Hang Sing Tai Agriculture Co. Ltd ("HST")
|
PRC
|
Nil% (2009: 75%) indirectly
|
Hylocereus Undatus Plantation ("HU Plantation")
|
|||
Jiang Men City Heng ShengTai Agriculture Development Co. Ltd ("JHST")
|
PRC
|
75% (2009: 75%) directly
|
Hylocereus Undatus Plantation ("HU Plantation"). The Company has not commenced
|
|||
beef business.
|
||||||
Hang Yu Tai Investment Limited ("HYT")
|
Macau, PRC
|
100% (2009: 100%) directly
|
Investment holding
|
|||
ZhongXingNongMu Co. Ltd ("ZX")
|
PRC
|
78% (2009: 78%) indirectly
|
Dairy production and manufacturing of organic fertilizer,livestock feed, and beef cattle and plantation of crops and pasture
|
|||
A Power Agro Agriculture Development (Macau) Limited ("APWAM")
|
Macau, PRC
|
100% (2009: 100%) directly
|
Investment holding
|
Name of variable interest entity/unconsolidated corporate joint venture
|
Place of incorporation
|
Percentage of interest
|
Principal activities
|
|||
Qinghai Sanjiang A Power Agriculture Co., Ltd
|
PRC
|
45% (2009: 45%) indirectly
|
Manufacturing of organic fertilizer,livestock feed, and beef cattle and plantation of crops and pastures
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
·
|
raw materials – purchase cost on a weighted average basis;
|
|
·
|
manufactured finished goods and work-in-progress – cost of direct materials and labor and a proportion of manufacturing overhead based on normal operation capacity but excluding borrowing costs; and
|
|
·
|
retail and wholesale merchandise finished goods – purchase cost on a weighted average basis.
|
Milk cows
|
10 years
|
|
Plant and machinery
|
5 - 10 years
|
|
Structure and leasehold improvements
|
10 -20 years
|
|
Mature seed
|
20 years
|
|
Furniture, fixtures and equipment
|
2.5 - 10 years
|
|
Motor vehicles
|
5 -10 years
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2010
|
2009
|
|||||||
Customer A
|
21.39 | % | 21.20 | % | ||||
Customer B
|
16.80 | % | 22.54 | % | ||||
Customer C
|
12.81 | % | 12.26 | % | ||||
Customer D
|
17.00 | % | 9.62 | % | ||||
Customer E
|
0.33 | % | - | |||||
Customer F
|
- | 9.35 | % | |||||
68.33 | % | 74.97 | % |
2010
|
2009
|
|||||||
Customer A
|
28.37 | % | 35.48 | % | ||||
Customer B
|
16.85 | % | 22.49 | % | ||||
Customer C
|
14.00 | % | 9.17 | % | ||||
Customer D
|
12.55 | % | - | |||||
Customer E
|
7.49 | % | 17.58 | % | ||||
Customer F
|
- | 11.04 | % | |||||
79.26 | % | 95.76 | % |
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
3.
|
SEGMENT INFORMATION
|
2010
|
||||||||||||||||||||||||
Fishery
Development
Division
|
Dairy
Production
Division
|
HU Plantation Division
|
Organic
Fertilizer and
Bread Grass
Division
|
Corporate and
others
|
Total
|
|||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Revenue
|
4,163,833 | 29,632,300 | 4,774,854 | 1,980,079 | - | 40,551,066 | ||||||||||||||||||
Net income (loss)
|
3,605,581 | 10,233,169 | 2,081,642 | 413,900 | (7,833,470 | ) | 8,500,822 | |||||||||||||||||
Total assets
|
17,685,816 | 51,675,685 | 14,804,908 | 4,359,809 | 19,241,692 | 107,767,910 |
2009
|
||||||||||||||||||||||||
Fishery
Development
Division
|
Dairy
Production
Division
|
HU
Plantation
Division
|
Organic
Fertilizer and
Bread Grass
Division
|
Corporate and
others
|
Total
|
|||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Revenue
|
726,702 | 18,084,046 | 2,915,091 | - | - | 21,725,839 | ||||||||||||||||||
Net income (loss)
|
672,583 | 6,108,967 | 1,460,553 | - | (1,434,164 | ) | 6,807,939 | |||||||||||||||||
Total assets
|
13,817,585 | 38,660,534 | 10,981,384 | - | 20,602,905 | 84,062,408 |
4.
|
INCOME TAXES
|
5.
|
DIVIDENDS
|
2010
|
2009
|
|||||||
$ | $ | |||||||
Dividends
|
567,800 | - |
6.
|
CASH AND CASH EQUIVALENTS
|
2010
|
2009
|
|||||||
$ | $ | |||||||
Cash and bank balances
|
3,890,026 | 2,360,587 |
7.
|
INVENTORIES
|
2010
$ |
2009
$ |
|||||||
Bread grass
|
54,096 | - | ||||||
Beef cattle
|
3,338,237 | |||||||
Organic fertilizer
|
56,593 | - | ||||||
Raw materials for bread grass and organic fertilizer
|
141,839 | - | ||||||
Raw materials for HU plantation
|
64,353 | - | ||||||
Immature seeds
|
801,596 | 411,594 | ||||||
Harvested HU plantation
|
199,234 | 53 | ||||||
Unharvested HU plantation
|
29,079 | 89,666 | ||||||
Forage for milk cows and consumable
|
4,228,100 | 5,598,098 | ||||||
8,913,127 | 6,099,411 |
8.
|
DEPOSITS AND PREPAID EXPENSES
|
2010
$ |
2009
$ |
|||||||
Deposits for
|
||||||||
acquisition of land use rights
|
4,453,665 | 4,453,666 | ||||||
inventory purchases
|
648,303 | 219,551 | ||||||
lease agreements
|
2,129 | 2,129 | ||||||
materials used for construction in progress
|
251,329 | 79,607 | ||||||
Prepayments for purchases of milk cows, dairy farm and containers
|
8,874,285 | 5,434,313 | ||||||
14,229,711 | 10,189,266 |
9.
|
ACCOUNTS RECEIVABLE
|
2010
$
|
2009
$
|
|||||||
0 - 30 days
|
5,083,928 | 1,530,838 | ||||||
31 - 90 days
|
175,843 | - | ||||||
91 - 120 days
|
1,093,642 | 5,338,667 | ||||||
over 120 days and less than 1 year
|
6,450,358 | - | ||||||
over 1 year
|
8,459,044 | 9,338,477 | ||||||
21,262,815 | 16,207,982 | |||||||
Less: amounts reclassified as long term accounts receivable
|
(8,459,044 | ) | (9,338,477 | ) | ||||
12,803,771 | 6,869,505 |
10.
|
OTHER RECEIVABLES
|
2010
$
|
2009
$
|
|||||||
Advance to service providers
|
- | 12,983 | ||||||
Due from related parties
|
- | 260,101 | ||||||
Due from employees
|
374,622 | 430,552 | ||||||
Due from third parties
|
2,636,966 | 1,181,855 | ||||||
Temporary payments for potential investment
|
956,092 | - | ||||||
3,967,680 | 1,885,491 |
11.
|
PLANT AND EQUIPMENT
|
2010
$
|
2009
$
|
|||||||
Milk cows
|
7,659,263 | 4,953,669 | ||||||
Plant and machinery
|
11,604,975 | 2,948,148 | ||||||
Structure and leasehold improvements
|
110,801 | 783,491 | ||||||
Mature seeds
|
498,824 | 484,436 | ||||||
Furniture and equipment
|
263,981 | 85,506 | ||||||
Motor vehicles
|
47,568 | 83,493 | ||||||
20,185,412 | 9,338,743 | |||||||
Less: Accumulated depreciation
|
(3,029,630 | ) | (1,774,079 | ) | ||||
Net booking value
|
17,155,782 | 7,564,664 |
12.
|
CONSTRUCTION IN PROGRESS
|
2010
$
|
2009
$
|
|||||||
Construction in progress
|
||||||||
- Rangeland for milk cows
|
- | 5,741,168 | ||||||
- Oven room for production of dried flowers
|
479,559 | 254,771 | ||||||
- Organic fertilizer and bread grass production plant
|
1,751,916 | - | ||||||
2,231,475 | 5,995,939 |
13.
|
LAND USE RIGHTS
|
2010
$
|
2009
$
|
|||||||
Cost
|
18,776,139 | 15,107,879 | ||||||
Less: Accumulated impairment losses
|
(1,946,729 | ) | (1,338,383 | ) | ||||
Net book value
|
16,829,410 | 13,769,496 |
14.
|
PROPRIETARY TECHNOLOGIES
|
2010
$
|
2009
$
|
|||||||
Proprietary technologies
|
8,000,000 | 8,000,000 | ||||||
Less: Accumulated amortization
|
(712,117 | ) | (365,365 | ) | ||||
Net carrying amount
|
7,287,883 | 7,634,635 |
15.
|
GOODWILL
|
2010
$
|
2009
$
|
|||||||
Goodwill from acquisition
|
38,444,099 | 38,444,099 | ||||||
Less: Accumulated impairment losses
|
(26,444,099 | ) | (26,444,099 | ) | ||||
Net carrying amount
|
12,000,000 | 12,000,000 |
16.
|
INVESTMENT IN UNCONSOLIDATED CORPORATE JOINT VENTURE
|
16.
|
INVESTMENT IN UNCONSOLIDATED CORPORATE JOINT VENTURE (CONTINUED)
|
|
·
|
Originally, the board of directors of Sanjiang A Power (SJAP) consisted of 7 members; 3 appointees from Qinghai Sanjiang( one of stockholder), 1 from Garwor (one of stockholder), and 3 from the Company such that the Company did not have majority interest represented in the board of directors of SJAP.
|
|
·
|
On May 7, 2010, Qinghai Sanjiang sold and transferred its equity interest in SJAP to Garwor. The aforesaid sale and transfer was approved by the State Administration for Industry And Commerce of Xining City Government of the People’s Republic of China.
|
16.
|
LICENSE RIGHTS
|
18.
|
OTHER PAYABLES
|
2010
$
|
2009
$
|
|||||||
Proprietary technologies payable
|
- | 3,577,264 | ||||||
Due to third parties
|
1,077,738 | 601,326 | ||||||
Due to related parties
|
223,884 | 169,536 | ||||||
Stamp duty payable
|
- | 4,678 | ||||||
Due to employees and others
|
110,668 | 183,324 | ||||||
1,412,290 | 4,536,128 |
19.
|
SHAREHOLDERS’ EQUITY
.
|
|
(i)
|
are not entitled to receive any dividend;
|
|
(ii)
|
vote together with the shares of Common Stock of the Corporation as a single class and, regardless of the number of shares of Series A Preferred Stock outstanding and as long as at least one of such shares of Series A Preferred Stock is outstanding, shall represent eighty percent (80%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each outstanding share of the Series A Preferred Stock shall represent its proportionate share of the 80% which is allocated to the outstanding shares of Series A Preferred Stock.
|
|
(iii)
|
are entitled to rank senior over common stockholders , other class or Series B convertible preferred stockholders on liquidation. The company has authorized 100 shares of Series A preferred stock with 100 and 0 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively.
|
20.
|
BANK BORROWINGS
|
Amount
|
||||||||||||||||
Name of bank
|
Interest rate
|
Term
|
Security
|
2010
$ |
2009
$ |
|||||||||||
Agricultural Development Bank of China
|
6.84 | % |
1/23/2007- 7/31/2010
|
Corporate guarantee by third party
|
- | 1,408,321 | ||||||||||
Agricultural Development Bank of China
|
6.12 | % |
1/23/2008-7/22/2010
|
Corporate guarantee by third party
|
- | 711,495 | ||||||||||
Agricultural Development Bank of China
|
6.12 | % |
1/23/2008-8/8/2010
|
Corporate guarantee by third party
|
- | 315,405 | ||||||||||
- | 2,435,221 |
Amount
|
||||||||||||||||
Name of bank
|
Interest rate
|
Term
|
Security
|
2010
$ |
2009
$ |
|||||||||||
Agricultural Development Bank of China
|
6.75 | % |
4/29/2007-4/28/2012
|
Corporate guarantee by third party
|
3,776,435 | 4,401,002 |
21.
|
OBLIGATION UNDER OPERATING LEASES
|
2010
$
|
||||
Year ended December 31,2011
|
56,600 | |||
Year ended December 31,2012
|
48,124 | |||
Year ended December 31,2013
|
5,747 | |||
Year ended December 31,2014
|
1,437 | |||
Thereafter
|
- | |||
111,908 |
22.
|
CONTINGENCIES
|
23.
|
STOCK BASED COMPENSATION
|
24.
|
LOSS ON EXTINGUISHMENT OF DEBTS
|
25.
|
RELATED PARTY TRANSACTIONS
|
Name of related party | Nature of transactions | |
Mr. Rui Xiong He, director of Enping City Juntang Town and Hang Sing Tai Agriculture Development Co Ltd, subsidiary of the Company
|
Included in other payables, due to Mr. Rui Xiong He is $nil and $16,985 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Xiang Jun Fang, director of Enping City Juntang Town and Hang Sing Tai Agriculture Development Co Ltd, subsidiary of the Company
|
Included in other receivables, due from Mr. Xiang Jun Fang is $nil and $260,101 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in other payables, due to Mr. Xiang Jun Fang is $nil and $150,057 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Mr. Solomon Yip Kun Lee, Chairman
|
Included in due to directors, due to Mr. Solomon Yip Kun Lee is $926,196 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
Included in due from directors, Mr. Solomon Yip Kun Lee is $nil and $74,039 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Michael Bor Hann Chen, director and
company secretary
|
Included in due from directors, due from Mr. Michael Bor Hann Chen is $nil and $38,228 as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Qinghai Sanjiang A Power Agriculture Co., Ltd (“SJAP”), investee
|
Included in other payable, due to SJAP is $nil and $2,494 as of December, 31, 2010 and December 31, 2009, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
Mr. Xi Ming Sun, director of
ZhongXingNong Nu Co., Ltd
|
Included in other payable, due to Mr. Xi Ming Sun is $213,223 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
Mr. Yi Lin Zhao, director of Qinghai Sanjiang A Power Agriculture Co., Ltd
|
Included in other payable, due to Mr. Yi Lin Zhao is $19,661 and $nil as of December, 31, 2010 and December 31, 2009 respectively. The amount is unsecured, interest free and have no fixed term of repayment.
|
26.
|
SUBSEQUENT EVENTS
|
March 31, 2011
|
December 31, 2010
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
$
|
$
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
482,916 | 3,890,026 | ||||||
Inventories
|
1,799,040 | 8,913,127 | ||||||
Deposits and prepaid expenses
|
5,346,988 | 14,229,711 | ||||||
Accounts receivable, net of allowance for doubtful accounts
|
8,421,189 | 12,803,771 | ||||||
Other receivables
|
59,253,946 | 3,967,680 | ||||||
Total current assets
|
75,304,079 | 43,804,315 | ||||||
Property and equipment
|
||||||||
Property and equipment, net of accumulated depreciation
|
2,529,149 | 17,155,782 | ||||||
Construction in progress
|
2,618,774 | 2,231,475 | ||||||
Land use rights, net of accumulated amortization
|
14,403,057 | 16,829,410 | ||||||
Total property and equipment
|
19,550,980 | 36,216,667 | ||||||
Other assets
|
||||||||
Goodwill
|
724,940 | 12,000,000 | ||||||
Proprietary technologies, net of accumulated amortization
|
7,198,836 | 7,287,883 | ||||||
Long term accounts receivable
|
8,459,044 | 8,459,044 | ||||||
License rights
|
1 | 1 | ||||||
Total other assets
|
16,382,821 | 27,746,928 | ||||||
Total assets
|
111,237,880 | 107,767,910 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued expenses
|
741,369 | 390,846 | ||||||
Billings in excess of cost and estimated earnings on uncompleted contracts
|
430,767 | - | ||||||
Due to a director
|
788,422 | 926,196 | ||||||
Dividends payable
|
206,356 | 210,262 | ||||||
Other payables
|
6,592,587 | 1,412,290 | ||||||
Total current liabilities
|
8,759,501 | 2,939,594 | ||||||
Other liabilities
|
||||||||
Long term debt
|
- | 3,776,435 | ||||||
Total liabilities
|
8,759,501 | 6,716,029 | ||||||
Commitments and contingencies
|
- | - | ||||||
Stockholders' equity
|
||||||||
Preferred stock: $0.001 par value (10,000,000 shares authorized, 0 share issued and outstanding as of March 31, 2011 and December 31, 2010, respectively)
|
- | - | ||||||
Series A preferred stock: $0.001 par value (100 shares authorized, 100 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively)
|
- | - | ||||||
Series B convertible preferred stock: $0.001 par value) (10,000,000 shares authorized, 7,000,000 shares issued and outstanding) as of March 31, 2011 and December 31, 2010, respectively)
|
7,000 | 7,000 | ||||||
Common stock: $0.001 par value (100,000,000 shares authorized, 56,795,136 and 55,474,136 shares issued and oustanding as of March 31, 2011 and December 31, 2010, respectively)
|
68,684 | 55,474 | ||||||
Additional paid - in capital
|
60,469,302 | 58,586,362 | ||||||
Retained earnings
|
36,134,835 | 25,019,971 | ||||||
Accumulated other comprehensive income
|
1,234,698 | 3,804,116 | ||||||
Total Sino Agro Food, Inc. and subsidiaries stockholders' equity
|
97,914,519 | 87,472,923 | ||||||
Non - controlling interest
|
4,563,860 | 13,578,958 | ||||||
Total stockholders' equity
|
102,478,379 | 101,051,881 | ||||||
Total liabilities and stockholders' equity
|
111,237,880 | 107,767,910 |
Three months ended
|
Three months ended
|
|||||||
March 31, 2011
|
March 31, 2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
|
$
|
$
|
||||||
Continuing operations
|
||||||||
Revenue
|
3,121,531 | 300,000 | ||||||
Cost of goods sold
|
1,190,615 | - | ||||||
Gross profit
|
1,930,916 | 300,000 | ||||||
General and administrative expenses
|
(690,146 | ) | (514,336 | ) | ||||
Net income from operations
|
1,240,770 | (214,336 | ) | |||||
Other income (expenses)
|
||||||||
Other income
|
9,302 | - | ||||||
Gain (loss) of extinguishment of debts
|
92,926 | (4,565,180 | ) | |||||
Interest expense
|
(3,172 | ) | (2,927 | ) | ||||
Net income (expenses)
|
99,056 | (4,568,107 | ) | |||||
Net income before income taxes
|
1,339,826 | (4,782,443 | ) | |||||
. | ||||||||
Provision for income taxes
|
- | - | ||||||
Net income (loss) from continuing operations
|
1,339,826 | (4,782,443 | ) | |||||
Less: Net (income) loss attributable to the non - controlling interest
|
(428,913 | ) | 10,647 | |||||
Net income (loss) from continuing operations attributable to the Sino Agro Food, Inc. and subsidiaries
|
910,913 | (4,771,796 | ) | |||||
Discontinued operations
|
||||||||
Net income from discontinued operations
|
19,941,880 | 2,057,268 | ||||||
Less: Net income attributable to the non - controlling interest
|
(9,737,929 | ) | (452,599 | ) | ||||
Net income from discontinued operations attributable to the Sino Agro Food, Inc. and subsidiaries
|
10,203,951 | 1,604,669 | ||||||
Net income (loss) attributable to the Sino Agro Food, Inc. and subsidiaries
|
11,114,864 | (3,167,127 | ) | |||||
Other comprehensive income (loss)
|
||||||||
Foreign currency translation gain (loss)
|
1,175,674 | (293,090 | ) | |||||
Comprehensive income (loss)
|
12,290,538 | (3,460,217 | ) | |||||
Less: other comprehensive (income) loss attributable to the non - controlling interest
|
(293,918 | ) | 58,618 | |||||
Comprehensive income (loss) attributable to the Sino Agro Food, Inc. and subsidiaries
|
11,996,620 | (3,401,599 | ) | |||||
Earnings (loss) per share attributable to Sino Agro Food, Inc. and subsidiaries common stockholders:
|
||||||||
From continuing and discontinued operations
|
||||||||
Basic
|
$ | 0.20 | $ | (0.06 | ) | |||
Diluted
|
$ | 0.18 | $ | (0.06 | ) | |||
Earnings (loss) per share attributable to Sino Agro Food, Inc. and subsidiaries common stockholders:
|
||||||||
From continuing operations
|
||||||||
Basic
|
$ | 0.02 | $ | (0.09 | ) | |||
Diluted
|
$ | 0.01 | $ | (0.09 | ) | |||
Weighted average number of shares outstanding:
|
||||||||
Basic
|
56,502,325 | 54,088,199 | ||||||
Diluted
|
63,502,325 | 54,088,199 |
Three months ended
|
Three months ended
|
|||||||
March 31, 2011
|
March 31, 2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
$
|
$
|
|||||||
Cash flows from operating activities
|
||||||||
Net income (loss) from continuing operations
|
1,339,826 | (4,782,443 | ) | |||||
Adjustments to reconcile net income (loss) from continuing operations to net cash from operations:
|
||||||||
Depreciation
|
40,353 | 281,991 | ||||||
Amortization
|
189,792 | 710,508 | ||||||
(Gain) loss on extinguishment of debts
|
(92,926 | ) | 4,565,180 | |||||
Changes in operating assets and liabilities:
|
||||||||
Increase in inventories
|
(381,707 | ) | (45,946 | ) | ||||
Decrease(increase) in deposits and prepaid expenses
|
8,438 | 894,116 | ||||||
Increase in due from a director
|
- | (1,194,817 | ) | |||||
Increase in due to a director
|
113,081 | - | ||||||
Increase in accounts payable and accrued expenses
|
372,932 | 24,473 | ||||||
Increase (decrease) in other payables
|
16,347,616 | (994,602 | ) | |||||
(Increase) decrease in accounts receivable
|
(1,662,144 | ) | 321,442 | |||||
Increase in billings in excess of costs and estimated earnings on uncompleted contracts
|
430,767 | - | ||||||
(Increase) decrease in other receivables
|
(13,060,168 | ) | (507,152 | ) | ||||
Net cash provided by operating activities
|
3,645,860 | (727,250 | ) | |||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(6,449 | ) | (266,951 | ) | ||||
Acquisition of land use rights
|
(704,388 | ) | - | |||||
Payment for construction in progress
|
(387,298 | ) | (193,791 | ) | ||||
Net cash used in investing activities
|
(1,098,135 | ) | (460,742 | ) | ||||
Cash flows from financing activities
|
||||||||
Dividends paid
|
(3,905 | ) | - | |||||
Net cash provided by financing activities
|
(3,905 | ) | - | |||||
Net cash provided by continuing operations
|
2,543,820 | (1,187,992 | ) | |||||
Cash flows from discontinued operations
|
||||||||
Net cash provided by operating activities
|
- | 1,866,774 | ||||||
Net cash used in investing activities
|
(2,433,497 | ) | (1,402,084 | ) | ||||
Net cash provided by financing activities
|
- | - | ||||||
Net cash (used in) provided by discontinued operations
|
(2,433,497 | ) | 464,690 | |||||
Effects on exchange rate changes on cash
|
(3,517,433 | ) | 1,213,276 | |||||
(Decrease) increase in cash and cash equivalents
|
(3,407,110 | ) | 489,974 | |||||
Cash and cash equivalents, beginning of period
|
3,890,026 | 2,360,587 | ||||||
Cash and cash equivalents, end of period
|
482,916 | 2,850,561 | ||||||
Less: cash and cash equivalents at the end of the period - discontinued operations
|
(704,388 | ) | (2,471,897 | ) | ||||
Cash and cash equivalents at the end of the period - continuing operations
|
(221,472 | ) | 378,664 | |||||
Supplementary disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
3,172 | 120,999 | ||||||
Cash paid for income taxes
|
- | - | ||||||
Non - cash transactions 1,321,000 (2010: 4,747,000) shares of common stock issued for settlement of debts
|
1,989,000 | 1,158,650 | ||||||
Disposal proceeds receivable of sale of subsidiaries, HYT and ZX
|
44,295,612 | - | ||||||
Land use rights payable due to related parties
|
6,339,493 | - |
1.
|
CORPORATE INFORMATION
|
|
a)
|
Hang Yu Tai Investment Limited (“HYT”), a company incorporated in Macau, the owner of a 78% equity interest in ZhongXingNongMu Ltd (“ZX”), a company incorporated in the PRC;
|
|
b)
|
Tri-way Industries Limited (“TRW”), a company incorporated in Hong Kong;
|
|
c)
|
Macau Eiji Company Limited (“MEIJI”), a company incorporated in Macau, the owner of 75% equity interest in Enping City Juntang Town Hang Sing Tai Agriculture Co. Ltd. (“HST”), a PRC corporate Sino-Foreign joint venture. HST was disposed in 2010.
|
|
•
|
Qinghai Province Sanjiang Group Company Limited (English translation) (“Qinghai Sanjiang”), a company owned by the PRC with major business activities in the agriculture industry; and
|
|
•
|
Guangzhou City Garwor Company Limited (English translation) (“Garwor”), a private limited company incorporated in the PRC, specializing in sales and marketing.
|
|
•
|
SJAP is engaged in the business of manufacturing bio-organic fertilizer, livestock feed and development of other agriculture projects in the County of Huangyuan, in the vicinity of the Xining City, Qinghai Province, PRC.
|
1.
|
CORPORATE INFORMATION (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
2.1
|
FISCAL YEAR
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
2.2
|
REPORTING ENTITY
|
Name of subsidiaries
|
Place of incorporation
|
Percentage of interest
|
Principal activities
|
|||
Capital Award Inc. ("CA")
|
Belize
|
100% (12.31..2010: 100%) directly
|
Fishery development and holder of A-Power Technology master license.
|
|||
Capital Stage Inc. ("CS")
|
Belize
|
100% (12.31.2010: 100%) indirectly
|
Dormant
|
|||
Capital Hero Inc. ("CH")
|
Belize
|
100% (12.31.2010: 100%) indirectly
|
Dormant
|
|||
Tri-way Industries Limited ("TRW")
|
Hong Kong, PRC
|
100% (12.31.2010: 100%) directly
|
Investment holding, holder of enzyme technology master license for manufacturing of livestock feed and bio-organic fertilizer and has not commenced its planned business of fish farm operations.
|
|||
Pretty Mountain Holdings Limited ("PMH")
|
Hong Kong, PRC
|
0% (12.31.2010: 80%) directly
|
Dissolved on January 28, 2011
|
|||
Macau Eiji Company Limited ("MEIJI")
|
Macau, PRC
|
100% (12.31.2010: 100%) directly
|
Disposed on February 15, 2011 (2010: Investment holding
|
|||
Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd ("JHST")
|
PRC
|
75% (12.31.2010: 75%) directly
|
Hylocereus Undatus Plantation ("HU Plantation"). The Company has not commenced beef business.
|
|||
Hang Yu Tai Investment Limited ("HYT")
|
Macau, PRC
|
0% (12.31.2010: 100%) directly
|
Disposed on February 15, 2011 (2010: Investment holding)
|
|||
ZhongXingNongMu Co. Ltd ("ZX")
|
PRC
|
0% (12.31.2010: 78%) indirectly
|
Disposed on February 15, 2011 (2010: Dairy production and manufacturing of organic fertilizer,livestock feed, and beef cattle and plantation of crops and pasture)
|
|||
A Power Agro Agriculture Development (Macau) Limited ("APWAM")
|
Macau, PRC
|
100% (12.31.2010: 100%) directly
|
Investment holding
|
|||
Name of variable interest entity
|
Place of incorporation
|
Percentage of interest
|
Principal activities
|
|||
Qinghai Sanjiang A Power Agriculture Co., Ltd ("SJAP")
|
|
PRC
|
|
45% (12.31.2010: 45%) indirectly
|
|
Manufacturing of organic fertilizer,livestock feed, and beef cattle and plantation of crops and pastures
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
2.3
|
BASIS OF PRESENTATION
|
|
2.4
|
BASIS OF CONSOLIDATION
|
|
2.5
|
BUSINESS COMBINATION
|
|
2.6
|
NON - CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
2.7
|
USE OF ESTIMATES
|
|
2.8
|
REVENUE RECOGNITION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
2.8
|
REVENUE RECOGNITION
|
|
2.9
|
COST OF GOODS SOLD
|
2.10
|
SHIPPING AND HANDLING
|
2.11
|
ADVERTISING
|
2.12
|
FOREIGN CURRENCY TRANSLATION AND OTHER COMPREHENSIVE INCOME
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.13
|
CASH AND CASH EQUIVALENTS
|
2.14
|
ACCOUNTS RECEIVABLE
|
2.15
|
INVENTORIES
|
-
|
raw materials – purchase cost on a weighted average basis;
|
-
|
manufactured finished goods and work-in-progress – cost of direct materials and labor and a proportion of manufacturing overhead based on normal operation capacity but excluding borrowing costs; and
|
-
|
retail and wholesale merchandise finished goods – purchase cost on a weighted average basis.
|
2.16
|
PROPERTY AND EQUIPMENT
|
Milk cows
|
10 years
|
Plant and machinery
|
5 - 10 years
|
Structure and leasehold improvements
|
10 -20 years
|
Mature seed
|
20 years
|
Furniture, fixtures and equipment
|
2.5 - 10 years
|
Motor vehicles
|
5 -10 years
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.16
|
PROPERTY AND EQUIPMENT (CONTINUED)
|
2.17
|
GOODWILL
|
2.18
|
PROPRIETARY TECHNOLOGIES
|
2.19
|
CONSTRUCTION IN PROGRESS
|
2.20
|
LAND USE RIGHTS
|
2.21
|
VARIABLE INTEREST ENTITY
|
(a)
|
equity-at-risk is not sufficient to support the entity's activities
|
(b)
|
As a group, the equity-at-risk holders cannot control the entity; or
|
(c)
|
The economics do not coincide with the voting interest
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.22
|
INCOME TAXES
|
2.23
|
POLITICAL AND BUSINESS RISK
|
2.24
|
CONCENTRATION OF CREDIT RISK
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.24
|
CONCENTRATION OF CREDIT RISK (CONTINUED)
|
Three months
|
Three months
|
|||||||
ended
|
ended
|
|||||||
March 31,
|
March 31,
|
|||||||
2011
|
2010
|
|||||||
Customer A
|
38.99 | % | - | |||||
Customer B
|
17.05 | % | - | |||||
Customer C
|
14.04 | % | - | |||||
Customer D
|
10.97 | % | - | |||||
Customer E
|
9.87 | % | - | |||||
Customer F
|
- | 39.04 | % | |||||
Customer G
|
- | 35.73 | % | |||||
Customer H
|
- | 17.90 | % | |||||
Customer I
|
- | 7.33 | % | |||||
90.92 | % | 100.00 | % |
March 31, 2011
|
December 31, 2010
|
|||||||
Customer A
|
32.01 | % | 28.37 | % | ||||
Customer B
|
18.13 | % | 16.85 | % | ||||
Customer C
|
13.27 | % | 12.55 | % | ||||
Customer D
|
7.36 | % | - | |||||
Customer E
|
6.54 | % | 14.00 | % | ||||
Customer F
|
- | 7.49 | % | |||||
77.31 | % | 79.26 | % |
2.25
|
IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLE ASSETS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.26
|
EARNINGS PER SHARE
|
2.27
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
2.28
|
RETIREMENT BENEFIT COSTS
|
2.29
|
STOCK-BASED COMPENSATION
|
2.30
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.30
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
|
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
2.31
|
NEW ACCOUNTING PRONOUNCEMENTS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.31
|
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
2.31
|
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
|
3.
|
SEGMENT INFORMATION
|
Three months ended March 31, 2011
|
||||||||||||||||||||||||
Continuing operations
|
Discontinued
operations
|
|||||||||||||||||||||||
Fishery
Development
Division
|
HU
Plantation
Division
|
Organic
Fertilizer
and Bread
Grass
Division
|
Corporate and
others
|
Dairy
Production
Division
|
Total
|
|||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
Revenue
|
1,559,745 | - | 1,561,786 | - | - | 3,121,531 | ||||||||||||||||||
Net income (loss)
|
920,798 | (19,799 | ) | 355,681 | (345,767 | ) | 10,203,951 | 11,114,864 | ||||||||||||||||
Total assets
|
19,634,875 | 22,246,476 | 5,403,607 | 63,952,922 | - | 111,237,880 |
For the three months ended March 31, 2010
|
||||||||||||||||||||||||
Continuing operations
|
Discontinued
operations
|
|||||||||||||||||||||||
Fishery
Development
Division
|
HU
Plantation
Division
|
Organic
Fertilizer
and Bread
Grass
Division
|
Corporate and
others
|
Dairy
Production
Division
|
Total
|
|||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
$
|
|||||||||||||||||||
Revenue
|
300,000 | - | - | - | 4,111,322 | 4,411,322 | ||||||||||||||||||
Net income (loss)
|
286,496 | (31,942 | ) | - | (5,026,350 | ) | 1,604,669 | (3,167,127 | ) | |||||||||||||||
Total assets
|
14,097,403 | 10,814,097 | - | 20,565,911 | 40,943,667 | 86,421,078 |
4.
|
INCOME TAXES
|
6.
|
NET INCOME FROM DISCONTINUED OPERATIONS
|
Three months ended
|
Three months ended
|
||||||||
Note
|
March 31, 2011
|
March 31, 2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
||||||||
$ | $ | ||||||||
Revenue
|
- | 4,111,322 | |||||||
Cost of goods sold
|
- | 1,824,741 | |||||||
Gross profit
|
- | 2,286,581 | |||||||
General and administrative expenses
|
- | (111,241 | ) | ||||||
Net income from operations
|
- | 2,175,340 | |||||||
Interest expense
|
- | (118,072 | ) | ||||||
Net income before income taxes
|
- | 2,057,268 | |||||||
Net income from disposal of subsidiaries
|
(a)
|
19,941,880 | - | ||||||
Net income before income taxes
|
19,941,880 | 2,057,268 | |||||||
Provision for income taxes
|
- | - | |||||||
Net income from discontinued operations
|
19,941,880 | 2,057,268 | |||||||
Less: Net income attributable to the non - controlling interest
|
(9,737,929 | ) | (452,599 | ) | |||||
Net income from discontinued operations attributable to Sino Agro Food, Inc. and subsidiaries
|
10,203,951 | 1,604,669 |
6.
|
NET INCOME FROM DISCONTINUED OPERATIONS (CONTINUED)
|
|
(a)
|
Net gain on sale of subsidiaries, HYT and ZX
|
Three months ended
|
|||||||||
Note
|
March 31, 2011
|
||||||||
$
|
$
|
||||||||
Consideration received and receivable
|
(b)
|
45,000,000 | |||||||
Net assets of HYT and ZX group as of December 31, 2010 disposed of
|
(c)
|
47,985,152 | |||||||
Less: Non controlling interest of ZX as of December 31, 2010
|
(9,737,929 | ) | |||||||
38,247,223 | |||||||||
6,752,777 | |||||||||
Cumulative exchange gain in respect of net assets of subsidiares reclassified from other comprehensive income to net gain on sale of subsidiaries
|
3,451,174 | ||||||||
Net gain on sale of subsidiaries, HYT and ZX
|
10,203,951 |
|
(b)
|
Consideration received
|
Three months ended
|
||||
March 31, 2011
|
||||
$
|
||||
Consideration received in cash and cash equivalents
|
704,388 | |||
Deferred sales proceeds
|
44,295,612 | |||
Total consideration proceeds
|
45,000,000 |
6.
|
NET INCOME FROM DISCONTINUED OPERATIONS (CONTINUED)
|
|
(c)
|
Analysis of consolidated assets and liabilities of subsidiaries, HYT and ZX as of December 31, 2010
|
6.
|
NET INCOME FROM DISCONTINUED OPERATIONS (CONTINUED)
|
|
(d)
|
Net cash outflow on sale of subsidiaries, HYT and ZX
|
Three months ended
|
||||
March 31, 2011
|
||||
Consideration received in cash and cash equivalents
|
704,388 | |||
Less: cash and cash equivalents balance disposed of
|
(3,137,885 | ) | ||
Net cash outflow on disposal of subsidiaries, HYT and ZX
|
(2,433,497 | ) |
|
(e)
|
Detailed cash flow from discontinued operations
|
Three months ended
|
Three months ended
|
||||||||
Note
|
March 31, 2011
|
March 31, 2010
|
|||||||
(Unaudited)
|
(Unaudited)
|
||||||||
$
|
$
|
||||||||
Cash flows from operating activities
|
|||||||||
Net income for the period
|
10,203,951 | 2,057,265 | |||||||
Adjustments to reconcile net income to net cash from operations:
|
|||||||||
Depreciation
|
- | 388,896 | |||||||
Amortization
|
- | 390,662 | |||||||
Net gain of sale of subsidiaries, HYT and ZX
|
(10,203,951 | ) | - | ||||||
Changes in operating assets and liabilities:
|
|||||||||
Increase in inventories
|
- | (86,180 | ) | ||||||
Increase in deposits and prepaid expenses
|
- | (2,571,852 | ) | ||||||
Increase in other payables
|
- | 123,320 | |||||||
Decrease in accounts receivable
|
- | 129,985 | |||||||
Decrease in other receivables
|
- | 1,434,678 | |||||||
Net cash provided by operating activities
|
- | 1,866,774 | |||||||
Cash flows from investing activities
|
|||||||||
Net cash outflow on sale of subsidiaries, HYT and ZX
|
6(d)
|
(2,433,497 | ) | - | |||||
Payment for acquisition of land use rights
|
- | (1,157,278 | ) | ||||||
Payment for construction in progress
|
- | (244,806 | ) | ||||||
Net cash used in investing activities
|
(2,433,497 | ) | (1,402,084 | ) | |||||
Cash flows from financing activities
|
|||||||||
Net cash provided by financing activities
|
- | - | |||||||
Effects on exchange rate changes on cash
|
- | (30,742 | ) | ||||||
(Decrease) increase in cash and cash equivalents
|
(2,433,497 | ) | 433,948 | ||||||
Cash and cash equivalents, beginning of period
|
3,137,885 | 2,037,949 | |||||||
Cash and cash equivalents, end of period
|
704,388 | 2,471,897 | |||||||
Supplementary disclosures of cash flow information:
|
|||||||||
Cash paid for interest
|
- | 118,073 | |||||||
Cash paid for income taxes
|
- | - | |||||||
Non - cash transactions
|
|||||||||
Disposal proceeds receivable of sale of subsidiaries, HYT and ZX
|
44,295,612 | - |
7.
|
CASH AND CASH EQUIVALENTS
|
March 31, 2011
|
December 31, 2011
|
|||||||
$
|
$
|
|||||||
Cash and bank balances
|
482,916 | 3,890,026 |
8.
|
INVENTORIES
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Bread grass
|
3,083 | 54,096 | ||||||
Beef cattle
|
172,323 | 3,338,237 | ||||||
Organic fertilizer
|
51,546 | 56,593 | ||||||
Raw materials for bread grass and organic fertilizer
|
279,267 | 141,839 | ||||||
Raw materials for HU plantation
|
- | 64,353 | ||||||
Immature seeds
|
809,372 | 801,596 | ||||||
Harvested HU plantation
|
201,167 | 199,234 | ||||||
Unharvested HU plantation
|
282,282 | 29,079 | ||||||
Forage for milk cows and consumable
|
- | 4,228,100 | ||||||
1,799,040 | 8,913,127 |
9.
|
DEPOSITS AND PREPAID EXPENSES
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Deposits for
|
||||||||
acquisition of land use rights
|
4,453,665 | 4,453,665 | ||||||
inventory purchases
|
374,027 | 648,303 | ||||||
lease agreements
|
519,296 | 2,129 | ||||||
materials used for construction in progress
|
- | 251,329 | ||||||
Prepayments for purchases of milk cows, dairy farm and containers -
|
8,874,285 | |||||||
5,346,988 | 14,229,711 |
10.
|
ACCOUNTS RECEIVABLE
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
0 - 30 days
|
3,285,872 | 5,083,928 | ||||||
31 - 90 days
|
1,588,589 | 175,843 | ||||||
91 - 120 days
|
377,720 | 1,093,642 | ||||||
over 120 days and less than 1 year
|
3,169,008 | 6,450,358 | ||||||
over 1 year
|
8,459,044 | 8,459,044 | ||||||
16,880,233 | 21,262,815 | |||||||
Less: amounts reclassified as long term accounts receivable
|
(8,459,044 | ) | (8,459,044 | ) | ||||
8,421,189 | 12,803,771 |
11.
|
OTHER RECEIVABLES
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Due from employees
|
78,797 | 374,622 | ||||||
Disposal proceeds receivable
|
44,295,612 | - | ||||||
Due from third parties
|
3,488,926 | 2,636,966 | ||||||
Due from HYT
|
10,434,519 | - | ||||||
Temporary payments for potential investment
|
956,092 | 956,092 | ||||||
59,253,946 | 3,967,680 |
|
(i)
|
of which $3,796,215 shall be settled by way of equal installment of $759,243 each on April 30, June 30, August 31, October31 and December 31 of 2011; and
|
|
(ii)
|
the remaining $40,499,397 shall be settled by way of cash contribution toward of land use rights payable as stated in the agreement.
|
12.
|
PLANT AND EQUIPMENT
|
March 31, 2010
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Milk cows
|
- | 7,659,263 | ||||||
Plant and machinery
|
1,700,779 | 11,604,975 | ||||||
Structure and leasehold improvements
|
27,211 | 110,801 | ||||||
Mature seeds
|
503,663 | 498,824 | ||||||
Furniture and equipment
|
706,225 | 263,981 | ||||||
Motor vehicles
|
47,568 | 47,568 | ||||||
2,985,446 | 20,185,412 | |||||||
Less: Accumulated depreciation
|
(456,297 | ) | (3,029,630 | ) | ||||
Net booking value
|
2,529,149 | 17,155,782 |
13.
|
CONSTRUCTION IN PROGRESS
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Construction in progress
|
||||||||
- Oven room for production of dried flowers
|
794,656 | 479,559 | ||||||
- Organic fertilizer and bread grass production plant
|
1,824,118 | 1,751,916 | ||||||
2,618,774 | 2,231,475 |
14.
|
LAND USE RIGHTS
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Cost
|
14,967,663 | 18,776,139 | ||||||
Less: Accumulated amortization
|
(564,606 | ) | (1,946,729 | ) | ||||
Net book value
|
14,403,057 | 16,829,410 |
14.
|
LAND USE RIGHTS (CONTINUED)
|
15.
|
PROPRIETARY TECHNOLOGIES
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Proprietary technologies
|
8,000,000 | 8,000,000 | ||||||
Less: Accumulated amortisation
|
(801,164 | ) | (712,117 | ) | ||||
Net carrying amount
|
7,198,836 | 7,287,883 |
16.
|
GOODWILL
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
Goodwill from acquisition
|
724,940 | 38,444,099 | ||||||
Less: Accumulated impairment losses
|
- | (26,444,099 | ) | |||||
Net carrying amount
|
724,940 | 12,000,000 |
17.
|
VARIABLE INTEREST ENTITY
|
16.
|
VARIABLE INTEREST ENTITY (CONTINUED)
|
|
l
|
Originally, the board of directors of Sanjiang A Power (SJAP) consisted of 7 members; 3 appointees from Qinghai Sanjiang( one of stockholder), 1 from Garwor (one of stockholder), and 3 from the Company such that the Company did not have majority interest represented in the board of directors of SJAP.
|
|
l
|
On May 7, 2010, Qinghai Sanjiang sold and transferred its equity interest in SJAP to Garwor. The aforesaid sale and transfer was approved by the State Administration for Industry And Commerce of Xining City Government of the People’s Republic of China. |
17.
|
LICENSE RIGHTS
|
18.
|
OTHER PAYABLES
|
March 31, 2011
|
December 31, 2010
|
|||||||
$
|
$
|
|||||||
- | ||||||||
Due to third parties
|
195,193 | 1,077,738 | ||||||
Due to related parties
|
6,339,493 | 223,884 | ||||||
Due to employees and others
|
57,901 | 110,668 | ||||||
6,592,587 | 1,412,290 |
19.
|
BILLINGS IN EXCESS OF COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
|
March 31, 2011
|
December 31, 2011
|
|||||||
$
|
$
|
|||||||
Billings
|
1,648,000 | - | ||||||
Less: Costs
|
(477,250 | ) | - | |||||
Estimated earnings
|
(739,983 | ) | - | |||||
Billing in excess of cost and estimated earnings on uncompleted contract
|
430,767 | - |
20.
|
SHAREHOLDERS’ EQUITY
.
|
20.
|
SHAREHOLDERS’ EQUITY
(CONTINUED)
|
|
(i)
|
are not entitled to receive any dividend;
|
|
(ii)
|
vote together with the shares of Common Stock of the Corporation as a single class and, regardless of the number of shares of Series A Preferred Stock outstanding and as long as at least one of such shares of Series A Preferred Stock is outstanding, shall represent eighty percent (80%) of all votes entitled to be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders. Each outstanding share of the Series A Preferred Stock shall represent its proportionate share of the 80% which is allocated to the outstanding shares of Series A Preferred Stock.
|
|
|
(iii)
|
are entitled to rank senior over common stockholders , other class or Series B convertible preferred stockholders on liquidation. The company has authorized 100 shares of Series A preferred stock with 100 and 0 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively.
|
21.
|
BANK BORROWINGS
|
Name of bank
|
Interest rate
|
Term
|
Security
|
Amount
|
||||||||||
March 31, 2011
|
December 31, 2010
|
|||||||||||||
$
|
$
|
|||||||||||||
Agricultural Development Bank of China
|
6.75 | % |
4/29/2007-4/28/2012
|
Corporate guarantee by
third party |
- | 3,776,435 |
22.
|
OBLIGATION UNDER OPERATING LEASES
|
22.
|
OBLIGATION UNDER OPERATING LEASES (CONTINUED)
|
March 31, 2011
|
||||
$
|
||||
Year ended December 31,2011
|
42,273 | |||
Year ended December 31,2012
|
56,364 | |||
Year ended December 31,2013
|
5,160 | |||
Year ended December 31,2014
|
5,160 | |||
Thereafter
|
- | |||
108,957 |
23.
|
CONTINGENCIES
|
24.
|
GAIN (LOSS) ON EXTINGUISHMENT OF DEBTS
|
25.
|
RELATED PARTY TRANSACTIONS
|
Name of related party
|
Nature of transactions
|
|
Mr. Solomon Yip Kun Lee, Chairman
|
Included in due to directors, due to Mr. Solomon Yip Kun Lee is $788,422 and $926,196 as of March 31, 2011 and December 31, 2010 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Mr. Xi Ming Sun, director of ZhongXingNong Nu Co., Ltd
|
During the three months ended March 31, 2011, the Company disposed 100% equity interest in HYT group (including HYT and ZX) for $45,000,000.
|
|
Included in other receivables, due to Mr. Xi Ming Sun is $44,295,612 and $0 as of March 31, 2011 and December 31, 2010 respectively. The amount is unsecured, interest free and has no fixed term of repayment. Of which $3,796,215 shall be settled by way of equal installment of $759,243 each on April 30, June 30, August 31, October31 and December 31 of 2011 and the remaining $40,499,397 shall be settled by way of cash contribution toward of land use rights payable as stated in the agreement.
|
||
Included in other payables, due to Mr. Xi Ming Sun is $nil and $213,223 as of March 31, 2011 and December 31, 2010 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
||
Mr. Yi Lin Zhao, director of Qinghai Sanjiang A Power Agriculture Co., Ltd
|
Included in other payables, due to Mr. Yi Lin Zhao is $nil and $19,661 as of March 31, 2011 and December 31, 2010 respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
|
Mr. Rui Xiong He , director of Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd, subsidiary of the Company
|
During the three months ended March 31, 2011, Mr. Rui Xiong He sold his land use rights to the Company for $7,042,831.
|
|
Included in other payables, due to Mr. Rui Xiong He is $6,339,493 and $ 0 as of March 31, 2011 and December 31, 2010, respectively. The amount is land use rights payable, unsecured, interest free and has no fixed term of repayment.
|
||
Enping Bi Tao A Power Prawn Culture Development Co. Ltd (under application), investee
|
During the three months ended March 31, 2011, the Company entered into a prawn farm contract with Enping Bi Tao A Power Prawn Culture Development Co. Ltd (under application) with a contract value of $1,648,000 and recognized income of $739,983 .
|
|
Billings in excess costs and estimated earnings on uncompleted contract, due to Enping Bi Tao A Power Prawn Culture Development Co. Ltd (under application) is $430,767 and $0 as of March 31, 2011 and December 31, 2010, respectively. The amount is unsecured, interest free and has no fixed term of repayment.
|
25.
|
SUBSEQUENT EVENT
|
SINO AGRO FOOD, INC.
|
|||
|
By: |
/s/ Lee
Yip Kun Solomon
|
|
|
Lee
Yip Kun Solomon
|
||
|
Chairman and Chief Executive Officer
|
Exhibit No.
|
Exhibit Description
|
|
|
||
2.1
|
Stock Purchase Agreement and Share Exchange – Volcanic Gold and Capital Award
|
|
|
||
2.2
|
Acquisition Agreement - Hang Yu Tai Investment Limited
|
|
|
||
2.3
|
Acquisition Agreement - Macau Eiji Company Limited
|
|
|
||
2.4
|
Acquisition Agreement - Tri-way Industries Limited
|
|
|
||
2.5
|
Disposition Agreement - Triway selling equity interest in TianQuan Science
|
|
|
||
2.6
|
Acquisition Agreement - A Power Agro Agriculture Development (Macau) Limited acquired the Pretty Mountains’ 45% equity interest in Sanjiang A Power
|
|
|
||
3.1
|
Articles of Incorporation of Volcanic Gold, Inc.
|
|
|
||
3.2
|
Amendment to Articles of Incorporation – Name Change: Volcanic Gold, Inc. to A Power Agro Agriculture Development, Inc.
|
|
|
||
3.3
|
Certificate of Correction
|
|
|
||
3.4
|
Amendment to Articles of Incorporation – Name Change: A Power Agro Agriculture Development, Inc. to Sino Agro Food, Inc.
|
|
|
||
3.5
|
Bylaws of Volcanic Gold, Inc.
|
|
|
||
3.6
|
Organizational Documents: Capital Award, Inc.
|
|
|
||
3.7
|
Organizational Documents: Hang Yu Tai Investment Limited
|
|
|
||
3.8
|
Organizational Documents: ZhongXingNongMu Co. Ltd.
|
|
|
||
3.9
|
Organizational Documents: Macau Eiji Company Limited
|
|
|
||
3.10
|
Organizational Documents: Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd.
|
|
|
||
3.11
|
Organizational Documents: Tri-way Industries Limited
|
|
|
||
3.12
|
Organizational Documents: A Power Agro Agriculture Development (Macau) Limited
|
|
|
||
4.1
|
Form of common stock Certificate of Sino Agro Foods, Inc.(1)
|
|
|
||
4.2
|
Certificate of Rights and Preferences – Series A Preferred
|
|
|
||
4.3
|
Certificate of Rights and Preferences – Series B Preferred
|
|
|
||
4.4
|
Certificate of Rights and Preferences – Series A Preferred
|
|
|
||
4.5
|
Certificate of Rights and Preferences – Series B Preferred
|
|
|
||
10.1
|
Patented “Intellectual Property” namely “Zhi Wu Jei Gan Si Liao Chan Ye Hua Chan Pin Ji Qi Zhi Bei Fang Fa” registered under the Patent Number “ZL2005 10063039.9” and Certificate number “329722” of China
|
|
10.2
|
Sino Foreign Joint Venture Agreement: Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd.
|
10.3
|
|
Sino Foreign Joint Venture Agreement: Qinghai Sanjiang A Power Agriculture Co. Ltd.
|
|
|
|
10.4
|
|
Deed of Trust - A Power Agro Agriculture Development (Macau) Limited
|
|
|
|
10.5
|
|
Deed of Trust - Macau Eiji Company Limited
|
|
|
|
10.6
|
|
Deed of Trust - Hang Yu Tai Investment Limited
|
|
|
|
10.7
|
|
Master License from Infinity Environmental Group, a Belize corporation.
|
|
|
|
10.8
|
|
Capital Award Consulting Service Agreement
|
|
|
|
10.9
|
|
Tri-Way Joint Venture Agreement
|
|
|
|
(10.10.a)
|
|
Share Sale Agreement of ZHONGXINGNONGMU CO. LTD.
|
10.10.b)
|
MOU SIAF and Mr. Sun Sales and Purchase of shares Hang Yu Tai *
|
|
|
|
|
10.11
|
|
Joint Venture Agreement for Enping City Bi Tao A Power Prawn Culture Development Co., Ltd
|
|
|
|
10.12
|
|
AP Technology Consulting Services Agreement between Capital Award and a Group of China Parties
|
|
|
|
10.13
|
|
Organic Premium Beef Cattle (Fragrant Beef) Breeding and Feed Production Technology Cooperation Agreement
|
|
|
|
10.14
|
|
Organic Premium Beef Cattle (Fragrant Beef) Breeding and Feed Production Technology Sale and Transfer Agreement
|
10.15
|
Employment Agreement – Lee *
|
|
10.16
|
Employment Agreement – Tan *
|
|
10.17
|
Employment Agreement – Chen *
|
|
10.18
|
SJVC Enping Cattle and Sheep Farm Joint Venture Agreement. *
|
1.
|
The Parties hereto hereby agree that the said Company and Mr. SUN shall as soon as practicable execute a Cancellation Agreement in respect of the sale and purchase of the said Shares under the S & P Agreement.
|
2.
|
All payments that have been paid by Mr. SUN under the S & P Agreement to the said Company shall be transferred towards the account of such monies to be paid by Mr. SUN to SIAF under the Fresh Agreement.
|
3.
|
The Parties hereto shall as soon as practicable execute the Fresh Agreement upon upon the same terms and conditions as contained in the S & P Agreement except for the following :
|
|
3.1
|
SIAF shall sell and Mr. SUN shall purchase the entire equity of the said Company (hereinafter called “the Sale Shares”).
|
|
3.2
|
The purchase consideration for the Sale Shares shall be a sum of US$45 million (hereinafter called “the Purchase Consideration”), to reflect the actual value of ZhongXing as follows:
|
description
|
Audited financial
|
Financial used in original contract
|
||||||
US$
|
US$
|
|||||||
Total Assets
|
62,950,744,.15 | 45,193,143.92 | ||||||
Total Liabilities
|
5,853,647.74 | 4,699,252.69 | ||||||
Net Assets
|
57,097,096.41 | 40,493,891.22 | ||||||
Consideration of the S&P (Round Figure)
|
45,000,000.00 | 31,000,000.00 | ||||||
Exchange rate US$ =
|
RMB6.5564
|
RMB6.62
|
|
3.3
|
Mr. SUN shall pay/settle the Purchase Consideration as follows :-
|
|
(i)
|
A sum of RMB5,011,000.00 (equivalent to US$759,242.50)
only as required to be paid by Mr. SUN to SIAF by way of deposit and part payment towards the Purchase Consideration, shall be deemed paid by way of a transfer of the deposit so paid by Mr. SUN under the S & P Agreement as stipulated in Clause 2 hereof.
|
|
(ii)
|
The balance of the Purchase Consideration amounting to 287,489,000 (equivalent to US$44,240,757.50) only (hereinafter called "the Balance Purchase Consideration”) shall be paid by Mr. SUN in the manner set forth hereunder:-
|
(a)
|
A sum of RMB25,055,000.00 (equivalent to US$3,796,212.50) (hereinafter called “the Further Payment”) in cash shall be paid by Mr. SUN to SIAF by way of 5 equal instalments of RMB5,011,000.00 (equivalent to US$759,242.50) each, on or before the following dates :-
|
|
(1)
|
April 30, 2011 ;
|
|
(2)
|
June 30, 2011 ;
|
|
(3)
|
August 31, 2011 ;
|
|
(4)
|
October 31, 2011; and
|
|
(5)
|
December 31, 2011.
|
|
(b)
|
The remainder of the Balance Purchase Consideration in the amount of RMB 262,434,000 (equivalent to US$40,374,461.50) (hereinafter referred to as “the Final Payment”) shall be settled by Mr. SUN by way of cash contribution towards part or full payment of the Land Price as defined in the S & P Agreement.
|
4.
|
The management financial results of the said Company as at 31.12.2010 after correction are detailed as follows
|
Description
|
US$
|
|||
Total Assets
|
80,911,901.27 | |||
Total liabilities
|
80,911,901.27 | |||
Net Assets
|
Nil
|
Signed by
Sino Agro Food Inc.
|
)
|
||
in the presence of
|
)
|
||
)
|
|||
)
|
|
||
)
|
|||
Signed by
SUN Ximin
|
)
|
||
in the presence of
|
)
|
||
)
|
|||
)
|
|
||
)
|
COMPANY:
|
|
SINO AGRO FOOD, INC.
|
|
By: /s/ Lee Yip Kun Solomon
|
|
Name: Mr. Lee Yip Kun Solomon
|
|
Title: Chief Executive Officer and Director
|
|
By: /s/ Tan Paoy Teik
|
|
Name: Mr. Tan Paoy Teik
|
|
Title: Chief Marketing Officer
|
|
By: /s/ Chen Bor Hann
|
|
Name: Mr. Chen Bor Hann
|
|
Title: Secretary
|
|
EXECUTIVE:
|
|
By: /s/ Lee Yip Kun Solomon
|
|
Name: Mr. Lee Yip Kun Solomon
|
COMPANY:
|
|
SINO AGRO FOOD, INC.
|
|
By: /s/ Lee Yip Kun Solomon
|
|
Name: Mr. Lee Yip Kun Solomon
|
|
Title: Chief Executive Officer and
Director
|
|
By: /s/ Tan Paoy Teik
|
|
Name: Mr. Tan Paoy Teik
|
|
Title: Chief Marketing Officer
|
|
By: /s/ Chen Bor Hann
|
|
Name: Mr. Chen Bor Hann
|
|
Title: Secretary
|
EXECUTIVE:
|
|
By: /s/ Tan Paoy Teik
|
|
Name: Mr. Tan Paoy Teik
|
COMPANY:
|
|
SINO AGRO FOOD, INC.
|
|
By: /s/ Lee Yip Kun Solomon
|
|
Name: Mr. Lee Yip Kun Solomon
|
|
Title: Chief Executive Officer and
|
|
Director | |
By: /s/ Tan Paoy Teik
|
|
Name: Mr. Tan Paoy Teik
|
|
Title: Chief Marketing Officer
|
|
By: /s/ Chen Bor Hann
|
|
Name: Mr. Chen Bor Hann
|
|
Title: Secretary
|
|
EXECUTIVE:
|
|
By: /s/ Chen Bor Hann
|
|
Name: Mr. Chen Bor Hann
|
第一条.
|
魏大庆(以下简称甲方)及 澳门美舍有限公司(以下简称乙方),根据《中华人民共和国中外合作经营企业法》及其它有关法规的规定,在平等互利的原则基础上,同意签订本合作合同。
|
|
Article 1
|
Upon basis of fairness and mutual benefit,
Wei Da Xing
(“Party A”), and
Macau EIJI Limited
(“Party B”) hereby agree to enter into this joint venture agreement, in accordance with the laws of Sino Foreign Joint Venture Enterprises of the People’s Republic of China and other relevant regulations.
|
第二条.
|
合作股东各方
|
甲方(中国股东)
:
|
魏大庆 |
中国籍
|
身份证号码:#421022196910250434
|
||
地址:湖南省安乡县安生乡大杨树居委会02073号
|
乙方
(
外方股东
) :
|
澳门美舍有限公司
|
注册国家:中国
.
香港
|
注册号码 : 22347 SO | ||
注册住址 : 澳门俾利喇街 51 号至 53 号 B 地下 A 座 | ||
通讯地址 : 广东省广州市天河区林河西路 9 号,耀中广场 3711 室,邮编 51061 | ||
法定代表人: 陳柏翰 职务:董事 国籍:中国香港 |
|
Article 2
|
The Joint Venture Parties
|
|
Party A :
|
WEI DA XING
(Chinese ID number: 42202212196910250434)
|
|
of No. 02073, Da Yang Shu, An Sheng Village, An Xiang County, Hunan Province.
|
|
Party B :
|
MACAU EIJI COMPANY LIMITED
(Company No. 22347 SO), a private limited company incorporated in Macau with its registered address at Building A, First floor, No. 51-53 B Pi La Street, Macau, and its correspondence address at Room 3711, China Shine Plaza, No.9, Lin He Xi Road, Tianhe District, Guangzhou 510610, Guangdong Province.
|
第三条.
|
甲乙双方在平等互利条件下,同意相互合作,在中华人民共和国广东省恩平市君堂镇江州圩江君路江州水闸办公大楼首层1-5号兴办中外合作经营企业,名称为:
恩平市一力畜牧业发展有限公司
(暂定名)。(以下简称合营公司)
|
|
Article 3
|
For mutual benefit, the parties hereto agree to incorporate a sino foreign joint venture company at No. 1-5, 1
st
Floor, Jiangzhou Shui Zha Office Building, No 19, Jiang Jun road Jiangzhou, Juntang Town, Enping City, Guangdong Province of the People’s Republic of China, to be named as
Enping City A Power Cattle Farm Development Co., Ltd
(tentatively named) (“SFJVC”).
|
第四条
.
|
甲乙股东双方以各自出资额占注册资本的比例
,
分享合营公司的利润和分担合营公司的债务、风险及亏损。
|
|
Article 4
|
The parties hereto shall share the indebtedness, risks and losses of the SFJVC as well its profit in accordance with their respective equity interest ratio in the SFJVC.
|
第五条.
|
合营目的:采用A Power优质肉牛(香牛)饲料营养技术及绿色有机品牌优质肉牛(香牛)养殖技术,设立A Power牛、羊畜牧场及培植适宜饲养牛和羊的牧草场,以加强经济合作和技术交流,采用先进而适用的技术和科学的经营管理方法,发展具有国际、国内市场上竞争能力的肉牛羊产品使投资各方获得满意收益, 并为整个社区带来利益。
|
|
Article 5
|
The Purpose of Joint Venture: to strengthen economic cooperation and technological exchanges, and to use appropriate advanced technology and scientific management methods, for the development of a cattle and sheep farm and cultivation of a pasture farm suitable to grow cattle and sheep, using a premium beef cattle breeding and nutritional feed recipe technology named A Power Livestock Feed Technology, for the international and domestic markets, so as to enable the parties to gain economic benefits as well as to generate social benefits to the communities as a whole.
|
第六条.
|
生产经营范围: 开发和经营牛、羊畜牧场(以下简称畜牧场)。
|
|
Article 6
|
Scope of business operation : development and operation of cattle and sheep farm (“the Farm”).
|
第七条.
|
生产规模:
年产值量
2,000
吨牛和羊肉
|
|
(二)第二年起至第五年,生产规模可增加到每年 5,000吨,品种将发展到3多种。
|
|
Article 7
|
Production Capacity : 2,000 tons of quality beef and mutton per year.
|
|
(1)
|
SFJVC shall produce 500 tons of beef and mutton within its first year of operation.
|
|
(2)
|
From the second year of operation to the fifth year of operation, the production will be increased gradually to its final annual productivity of 5,000 tons per year, including the development of more than 3 species of cattle and sheep.
|
第八条.
|
合营公司的期限为为永久性的。合营公司成立日为合营公司营业执照签发之日。 经一方提议,董事会一致通过,可以在合营期满六个月前向中国商务部(或其委托的审批机构)申请延长合营期限。
|
|
Article 8
|
The tenure of the SFJVC shall be in perpetuity. The SFJVC’s Board of Directors may decide to extend the tenure of the SFJVC by applying to the China Business Registration Department (or its related authorized approving authority) within 6 months from day of expiry thereof.
|
|
第九条.
|
合营公司5年内投资总额为3,000万美元,注册资本为 第一年 300万美元, 并依据合营公司的董事会当时之决定逐步增加至第五年的 3,000万美元。
|
|
Article 9
|
The total investment capital of the SFJVC shall be US$30 million to be invested over a period of 5 years, whereas the Registered Capital of the SFJVC shall be US$100,000 for the first year and be increased gradually to US$30 million by the fifth year subject to the decision made by the Board of Directors of the SFJVC at the time.
|
第十条.
|
甲、乙双方五年内出资具体方式:
|
|
Article 10
|
The parties’ respectively capital contribution in the 5 years are as follows :
|
|
,First Year : Party A shall contribute US$75,000 in cash, whereas Party B shall contribute US$25,000. in cash.
|
股东
Parties |
股权变更到至
Change of equity
interest up to
|
可被转换
的
资产
Assets that may be
converted
|
最高可被转换
的数额
Maximum % that
will be converted
|
|||
甲方
Party A
|
75%
|
现金
Cash
|
10%
|
|||
机械设备
Plants and equipment
|
25%
|
|||||
厂房
Properties
|
25%
|
|||||
土地使用权
Land Use Right
|
10%
|
|||||
其他
Others
|
5%
|
|||||
甲方出资总额
Total contribution of Party A
|
75%
|
|||||
乙方
Party B
|
25%
|
现金
Cash
|
25%
|
股东
Parties |
股权变更至
Change of equity
interest up to
|
可被转换
的
资产
Assets that may be
converted
|
最高可被转换
的数额
Maximum % that
will be converted
|
|||
甲方
Party A
|
25%
|
现金
Cash
|
2.5%
|
|||
机械设备
Plants and equipment
|
6.25%
|
|||||
厂房
Properties
|
6.25%
|
|||||
土地使用权
Land Use Right
|
2.5%
|
|||||
其他
Others
|
7.5%
|
|||||
甲方出资总额
Total contribution of Party A
|
25%
|
|||||
乙方
Party B
|
75%
|
现金
Cash
|
75%
|
第十一条.
|
甲、乙双方出资期限: 甲乙双方自合营公司营业执照签发之日起六个月内按各自所占注册资本比例一次全部缴清第一年10万美元注册资本。 从第二年起,甲乙双方按照合营公司董事会在必要时设定的时间表,并依据上述股权变更方法,出资增加合营公司的注册资本。
|
Article 11
|
Schedule of Payment by the Parties of the Registered Capital : In the first year, the Parties hereto shall pay for the US$ 100,000 Registered Capital of the SFJVC in accordance with their respective share of equity interest in the SFJVC within 6 months from date of issuance of the business license of the SFJVC. From the second year onward, the Parties shall pay their respective share of contribution of the Registered capital in the manner as mentioned above and in accordance with the time schedule as set forth by the Board of Directors of the SFJVC as and when it shall be necessary.
|
第十二条
.
|
甲、乙任何一方如向本合同以外第三人转让其全部或部分出资额,须经另一方同意,另一方在同等条件下有优先购买权
|
|
Article 12
|
If either of the Parties hereto shall decide to sell all or part of its equity in the SFJVC to any third party, the selling party hereto shall obtain the prior consent of the other party hereto before such sale, and shall grant the first right of refusal to the other party hereto on the like terms for the intended sale.
|
|
1.
|
按时足额缴纳注册资本;
|
|
2
.
|
办理为设立合营公司向中国有关主管部门申请批准、登记注册、领取营业执照等事宜:
|
|
3
.
|
向土地主管部门办理完善取得土地使用权的手续;
|
|
4
.
|
组织合营公司厂房和其他工程设施的设计、施工;
|
|
5
.
|
协助合营公司在中国境内购置或租赁设备、材料、原料、办公用具、交通工具、通讯设施等;
|
|
6
.
|
办理进口机械设备报关手续和在中国境内的运输;
|
|
7
.
|
协助合营公司联系落实水、电、交通等基础设施;
|
|
8
.
|
协助合营公司招聘当地的中国籍的经营管理人员、技术人员、工人和所需的其他人员;
|
|
9
.
|
协助外籍工作人员办理所需的入境签证、工作许可证和旅行手续等;
|
|
10
.
|
负责办理合营公司委托的其他事宜。
|
|
Article 13
|
The responsibilities of Party A:
|
|
1.
|
To pay its share of the Registered Capital on a timely manner.
|
|
2.
|
To apply to relevant Chinese Authorities in order to obtain the official approval, registration and business license for the incorporation of the SFJVC.
|
|
3.
|
To apply to the Land Authorities of China to obtain official approval of the Land Use Right of the project land.
|
|
4.
|
To introduce and to organize all local sub-contractors and contractors to carry out construction work relating to the scopes of civil engineering, designs, building and all other related matters for the SFJVC for the purpose of developing the Farm.
|
|
5.
|
To introduce to and to organize all local suppliers and manufacturers for the SFJVC such that the SFJVC will be able to obtain supplies and manufacturing of plants and equipment for the Farm.
|
|
6.
|
To apply to the customs authorities and to obtain import clearance for all imported plants and equipment of the Farm and to arrange local transportation for the delivery of the imported plants and equipment to the project site.
|
|
7.
|
To introduce to and to organize all local contractors and sub-contractors for the SFJVC such that the SFJVC will be able to construct and to connect all basic infrastructure and utility services needed at the project site of the Farm.
|
|
8.
|
To assist the SFJVC in recruiting Chinese management personnel, technical personnel, workers and other workers needed for the Farm.
|
|
9.
|
To assist foreign workers and staffs of the SFJVC in their applications for entry visas, work permits and other associated local traveling arrangements.
|
|
10.
|
To co-ordinate other general necessities requested by the SFJVC from time to time during the development period of the SFJVC.
|
|
1
.
|
按时足额缴纳注册资本;
|
|
2.
|
办理合营公司委托在中国境外选购机械设备、材料等有关事宜;;
|
|
3.
|
将机械设备等实物运至中国港口;
|
|
4.
|
提供设备安装、调试以及试生产技术人员、检验人员;
|
|
5.
|
培训合营公司的技术人员和工人;
|
|
6.
|
乙方同时是技术转让方,负责合营公司在规定期限内按设计能力稳定生产合格产品;
|
|
7.
|
负责办理合营公司委托的其他事宜。
|
|
Article 14
|
The responsibilities of Party B
|
|
1.
|
To pay its share of the Registered Capital on a timely manner.
|
|
2.
|
To organize and to arrange supplies, purchases, delivery and related matters of all imported plants and equipment needed by the Farm.
|
|
3.
|
To organize and to arrange all transportation and related logistics needed for the importation of imported plants and equipment for delivery to the appropriate sea port in China.
|
|
4.
|
To provide qualified technical supervisors, personnel and inspectors for the installation and commissioning of all plants and equipment of the Farm.
|
|
5.
|
To provide training to the personnel and workers needed for the operation of the Farm.
|
|
6.
|
Being the owner of the A Power Livestock Feed Technology, Party B shall ensure that the performance of the Farm (including but not limiting to the productivity and durability of the Farm) will be reached within the targeted schedule.
|
|
7.
|
To assist the SFJVC in other matters related to the Farm’s development works as and when requested by the SFJVC.
|
第十五条
.
|
合营公司注册登记之日,为合营公司董事会成立之日。
|
|
Article 15
|
The date of registration of the SFJVC shall be the date whereupon the SJVC shall officially constitute its Board of Directors.
|
第十六条
.
|
董事会由3名董事组成; 甲方委派1名,乙方委派2名。董事长由甲方委派,副董事长由乙方委派。董事长和副董事长任期三年,经委派方继续委派可以连任。
|
|
Article 16
|
The Board of directors shall consist of 3 members; 1 appointee from Party A and 2 from Party B. The director appointed by Party A shall be made the Chairperson, whereas 1 director appointed by Party B shall be made the Deputy Chairperson. The tenure of the Chairperson and the Deputy Chairperson shall be 3 years, renewable at the discretion of the appointing party.
|
第十七条
.
|
董事会是合营公司最高权力机构,决定合营公司一切重大事宜。下列重大事项须由董事会全体董事100% 通过方可作出决议:
|
|
Article 17
|
The highest authority of the SFJVC company shall be its Board of Directors. The following matters shall require unanimous approval of the Board of Directors:
|
|
(1)
|
Amendments made to the Articles of Association of the SFJVC;
|
|
(2)
|
The termination and dissolution of the SFJVC;
|
|
(3)
|
Any Changes made to the Registered Capital of the SFJVC and the assignment or sales of the equity stakes in the SFJVC by any one of the parties.
|
|
(4)
|
Merger of the SFJVC with other business entity.
|
第十八条
.
|
除第十七条以外的其他事项应由出席董事会会议的一半以上董事同意,方可作 出决定。出席董事会的董事不足董事会成员的三分之二时,其通过的决议无效。
|
A
rticle 18
|
Save and except for the matters as stated in Article 17, all other matters of the SFJVC shall only require the majority decision of the Board of Directors. The quorum for any meeting shall be two third of the members of the board.
|
第十九条
.
|
董事长是合营公司法定代表人。董事长因故不能行其职责时,可临时授权副董事长或其他董事为代表。
|
|
Article 19
|
The Chairperson of the board is the legal representative of the SFJVC. If the Chairperson for any reason is not able to carry out his duties, the Deputy Chairperson or any other director may be empowered to represent the SFJVC.
|
第二十条
.
|
董事会会议每年至少召开二次,由董事长召集并主持会议。董事长因故不能召集时,由董事长委托其他董事负责召开并主持董事会会议。经三分之一 以上的董事提议,董事长可召开董事会临时会议。会议记录应归档保存。
|
|
Article 20
|
The Board of Directors shall convene at least twice every year, and meetings shall be called by the Chairperson of the Board of Directors or such other director as directed by the Chairperson. The Chairperson may convene short notice meeting upon his receipt of such requisition from one third or more of the directors. All corresponding minutes of the board meetings shall be recorded on file of the SFJVC.
|
第二十一条
.
|
利润按各方的出资额在注册资本中的比例进行分配,同时双方依此比例承担合营公司的亏损,并以注册资本为承担亏损的限度。
|
|
Article 21
|
Each Party hereto shall share the profit or loss derived from the operation of the SFJVC in accordance with percentage of their respective equity held in the SFJVC.
|
第二十二条
.
|
合营公司设经营管理机构,负责公司日常经营管理工作。经营管理机构设总经理一人,由甲方委派;副总经理 1 人,由乙方委派。总经理、副总经理由董事会聘任方可担任,任期3年,可以连聘连任。
|
|
Article 22
|
The management of the SFJVC shall be responsible for the day to day administration and operation of the company. The management shall consist of 1 General Manager to be nominated by Party A, 1 Deputy General Manager to be nominated by Party B, the employment of same shall be decided by the board of directors, for a tenure of 3 years renewable if the board of directors shall so decide.
|
第二十三条
.
|
总经理的职责是:执行董事会决议,组织领导公司日常经营管理工作。副总经理协助总经理工作,当总经理不在时,代理行使总经理的职责。合营公司的其他高级职员和部门经理由总经理聘任。
|
Article 23
|
The general manager of the SFJVC will be responsible to the Board of Directors of the SJVC and to manage all daily affairs of the SFJVC; the Deputy General Manager will assist the General Manager in managing the daily affairs of the SFJVC, and be the acting General Manager in the absence of the General Manager. All other management personnel and workers will be appointed by the General Manger.
|
第二十四条
.
|
若总经理或副总经理故意、疏忽或有严重过失,而损害公司利益的,经董事会决议可随时撤换。
|
|
Article 24
|
The Board of Directors of the SFJVC shall have the right to terminate the appointment of the General Manager and / or the Deputy General Manager in the event if either or both of them shall act intentionally or negligently causing the SFJVC to suffer loss or damage.
|
第二十五条
.
|
合营公司设监事会,成员3名,甲方委派2名,乙方委派1名,监事会主席由乙方委派,任期三年,可连派连任。
|
|
Article 25
|
The SFJVC shall have an Audit Committee consists of 3 members, of whom Party A shall nominate 2 persons and Party B shall nominate one person. One of the members nominated by Party A shall be made the Chairperson of the Audit Committee. Members of the Audit Committee shall be formally appointed by the Board of Directors of the SFJVC for a minimum term of 3 years.
|
第二十六条
.
|
合营公司职工的招收、招聘、辞退、工资、劳动保险、残疾人基金、防洪基金、生活福利和奖惩等事项,一律按照《中华人民共和国劳动法》及相关劳动法规及其实施办法,经董事会研究制定方案,由合营公司与合营公司的工会组织或个人订立劳动合同加以规定。劳动合同订立后,报当地劳动管理部门备案。
|
|
Article 26
|
All matters of the SFJVC concerning recruitment, dismissal, wages, workers’ insurance, Disabled Fund, Flood Control Fund, welfare of workers and rewards and penalties shall be implemented in accordance with the Regulations of the People s Republic of China on Labor Management and its Implementing Rules, and the policies thereof formulated by the Board of Directors of the SFJVC, and incorporated into the employment contracts.
|
第二十七条
.
|
合营公司按照中国法律法规纳税。
|
|
Article 27
|
The SFJVC shall pay all taxes in accordance with the China’s taxation law and regulations.
|
第二十八条
.
|
合营公司职工依中国税法缴纳税。
|
|
Article 28
|
The staffs and workers of the SFJVC shall pay all taxes accordance with the income tax law of China.
|
第二十九条
.
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合营公司按照《中华人民共和国中外合资经营企业法》的规定提取储备基金、企业发展基金及职工福利奖励基金,每年提取的比例由董事会根据公司经营情况讨论决定。
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Article 29
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The SFJVC shall make provision in Reserved Fund, Expansion Fund and Employees’ Welfare Fund in accordance with the provisions of the Sino Foreign Joint Venture Law of China, the quantum of which shall be decided by the board of directors of the SFJVC according to the prevailing financial capacity of the SFJVC from time to time.
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第三十条
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合营公司的会计年度从公历每年1月31日起至12月31日止,一切记账凭证、单据、报表、账簿,用中文书写,也可同时用英文写。
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Article 30
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The fiscal year of the SFJVC shall be from January 31 of the year to December 31 of the subsequent year. All the accounting vouchers, accounting books and records shall be written in Chinese and in English.
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第三十一条
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合营企业的财务审计聘请中国注册会计师审查、稽核,并将结果报告董事会和总经理。
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Article 31
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The SFJVC shall engage a Chinese auditor for auditing of accounts, and such audited accounts shall be submitted to the board of directors and the General Manager.
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第三十二条
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每一营业年度初始三个月,由总经理组织编制上一年度的资产负债表、损益表和利润分配方案,提交董事会审查通过。
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Article 32
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The General Manager of the SFJVC shall submit the annual financial report for the preceding fiscal year to its Board of Directors within first three months of each fiscal year.
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第三十三条
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合营公司的各项保险由合营公司董事会讨论决定。
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Article 33
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All the insurance coverage of the SFJVC shall be decided by the board of directors.
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第三十四条
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合营期满或提前终止合营,合营公司应依法进行清算,清算后的财产,根据甲乙各方投资比例进行分配。
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Article 34
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Upon expiration or early termination of the SFJVC, the SFJVC shall be liquidated in accordance with the relevant laws of China and the assets of the SFJVC shall be distributed to the parties hereto proportionately according to the percentage of each party’s equity interest in the SFJVC.
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第三十五条
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对本合同及其附件的修改,必须经甲、乙双方签署书面协议,并报原审批机构批准,才能生效。
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Article 35
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Any amendment to this Agreement and its appendices shall require written consent of both parties, and be subject to approval of the relevant authority before taking effect.
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第三十六条
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由于不可抗力,使致合同无法履行,或是由于合营公司连年亏损,无力继续经营,经董事会一致通过,并报原审批机构批准,可以提前终止合营期限和解除合同。
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Article 36
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If this Agreement cannot be implemented due to Force Majeure, or the SFJVC suffers severe financial losses and is not able to continue its operation as a result, then the SFJVC may be dissolved upon the unanimous decision of the Board of Directors and the approval of the relevant approving authority.
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第三十七条
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由于一方不履行合同、章程规定的义务,或严重违反合同、章程规定,造成合营公司无法经营或无法达到本合同规定的经营目的,视作该方违约。守约方除有权向违约方索赔外,并有权按合同规定报原审批机构批准终止合同。双方都违约的,按过错大小承担责任。双方对过错大小不能达成共识的,任何一方有权提交中国国际经济贸易仲裁委员会深圳分会仲裁认定。如甲乙双方同意继续经营,违约方应赔偿合营公司的经济损失。
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Article 37
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Should the joint venture company be unable to continue its operation or achieve its business purpose due to the fact that one of the contracting parties fails to fulfill the obligations prescribed by the contract and articles of association, that party shall be deemed to have unilaterally terminated the contract. The other party shall have the right to terminate the contract in accordance with the provisions of the contract after approval by the original approving authority, and to claim damages from the defaulting party. Should it be the fault of both parties, the parties shall bear their liabilities according to the gravity of fault committed by the parties. If both parties cannot agree on the quantum of liabilities, either party shall have the right to refer the dispute to the Shenzhen branch of the China International Economic and Trade Arbitration Commission for arbitration. If both parties agree to continue operation of the SFJVC, the defaulting party shall compensate the SFJVC its financial losses.
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第三十八条
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由于地震、台风、水灾、火灾、战争以及及合同双方均认可的其它不能预见并且对其发生后果不能防止或避免的不可抗力,致使直接影响合同的履行或者不能按约定的条件履行时,遇有上述不可抗力的一方,应立即通知另一方,并应在15天内,提供不可抗力详情及合同不能履行、或者部分不能履行、或者需要延期履行的理由的有效证明文件,此项证明文件应由不可抗力发生地区的公证机构出具。按其对履行合同影响的程度,由双方协商决定是否解除合同,或者部分免除履行合同的责任,或者延期履行合同。
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Article 38
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Should either of the parties hereto be prevented from executing the contract by force majeure, such as earthquake, typhoon, flood, fire, war or other unforeseen events, and their occurrence and consequences are unpreventable and unavoidable, the prevented party shall notify the other party by telegram without any delay, and within 15 days thereafter provide detailed information of the events and a valid evidential document issued by the relevant public notary organization explaining the reason of its inability to execute or delay the execution of all or part of the contract. Both parties shall, through consultations, decide whether to terminate the contract or to exempt part of the obligations for implementation of the contract or whether to delay the execution of the contract according to the effects of the events on the performance of the contract.
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第三十九条
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甲、乙任何一方未按本合同规定按期如数出资时,从逾期第一个月算起,每逾期一个月,违约一方应缴付出资额的10%的违约金给守约的一方。如逾期三个月仍未提交,违约方除累计缴付应缴出资额的30%的违约金外,守约方有权提前终止合同,并要求违约方赔偿其他损失。
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Article 39
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Should either Party hereto fail to pay on schedule its agreed capital contribution in accordance with the provisions herein, the defaulting party shall pay to the other party hereto liquidated damages equivalent to 10% of its agreed capital contribution every month starting from the date of occurrence of such breach. Should the defaulting party fail to pay after 3 months, liquidated damages equivalent to 30% of its capital contribution shall be paid to the other party, who shall have the right to terminate the contract and to claim damages from the defaulting party.
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第四十条
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本合同的订立、效力、解释、履行和争议的解决均适用中华人民共和国实体法、程序法。
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Article 40
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The formation, validity, interpretation, execution and settlement of disputes in respect of, this contract shall be governed by the relevant laws of the People s Republic of China.
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第四十一条
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凡因履行本合同所发生的一切争议,双方友好协商解决不成,应提交中国国际经济贸易仲裁委员会深圳分会,根据该会的仲裁规则仲裁。仲裁裁决是终局的,对双方都有约束力。
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Article 41
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In the event any dispute arising in the course of carrying into effect this Agreement cannot be settled through friendly consultations between the parties hereto, such dispute shall be referred to the Shenzhen branch of China International Economic and Trade Arbitration Commission for arbitration in accordance with its rules. The arbitral award is final and binding upon all parties.
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第四十二条
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在仲裁过程中,除双方有争议的且正在进行仲裁的部分外,本合同其他条款应继续履行。
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Article 42
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In the arbitration process, the terms of this Agreement, other than the part which is the subject matter of the arbitration, shall remain operational.
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第四十三条
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本合同及其附件,均须经中华人民共和国商务部(或其委托的审批机构)批准,自批准之日起生效。
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Article 43
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This Agreement shall take effect upon the approval thereof by the Ministry of Commerce and Trade of China (or its related authorized approving authority).
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第四十四条
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甲、乙双方相互通信手段,包括但不限于电报、电话、邮寄、传真、电子邮件、MSN、QQ、电传等双方认可的有效手段,凡涉及各方权利、义务的,应随之以书面信件通知。合同中所列甲、乙双方的法定地址即为甲、乙双方的通讯地址。
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Article 44
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The parties hereto may communicate with each other by, but not limited to, the telegraph, telephone, mail, fax, e-mail, MSN, QQ, telex and other effective means agreed by both parties, but any matter concerning the rights and obligations of the parties hereto should be conveyed to the other party in writing. The addresses of Party A and Party B as stated in this Agreement shall be the postal addresses of the parties hereto.
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第四十五条
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本合同各种文字版本不一致的,以中文本为准,由股东各方代表签字后生效。一式6份,甲、乙双方各执
2
份,主管及审批机关各执
1
份,有同等效力。
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Article 45
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This Agreement shall be in the Chinese Language and printed in 6 copies, of which each party shall have 2 copies each, and the relevant approving authorities each shall have 1 copy. All copies shall have the same legal force.
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Date : April 15, 2011
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签约代表:
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