10-Q 1 v393120_10q.htm FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

¨	TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________________ to ___________________________

Commission file number: 000-54191

SINO AGRO FOOD, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		33-1219070
(State of Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

Room 3801, Block A, China Shine Plaza No. 9 Lin He Xi Road Tianhe District, Guangzhou City, P.R.C.		510610
(Address of Principal Executive Offices)		(Zip Code)

(860) 20 22057860

(Registrant’s Telephone Number, Including Area Code)

Copies to:

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32^nd Floor

New York, NY10006

Attn: Marc Ross, Esq.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of November 7, 2014, there were 168,128,043 shares of our common stock issued and outstanding.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	56

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	57
SIGNATURES		58

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SINO AGRO FOOD, INC. AND SUBSIDIARIES

QUARTERLY FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Unaudited)

SINO AGRO FOOD, INC. AND SUBSIDIARIES

INDEX TO QUARTERLY FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(Unaudited)

		PAGE

CONSOLIDATED BALANCE SHEETS(Unaudited)		F - 1

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME(Unaudited)		F - 2

CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)		F - 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		F - 4 - F - 41

SINO AGRO FOOD, INC.

CONSOLIDATED BALANCE SHEETS

	Note		September 30, 2014			December 31, 2013
ASSETS				(Unaudited)			(Audited)
Current assets
Cash and cash equivalents		5	$	4,691,157		$	1,327,274
Inventories		6		37,439,892			8,148,203
Cost and estimated earnings in excess of billings on uncompleted contracts		19		1,224,287			663,296
Deposits and prepaid expenses		7		55,610,463			51,291,708
Accounts receivable, net of allowance for doubtful accounts		8		122,773,881			82,057,942
Other receivables		9		16,475,508			3,782,771
Total current assets				238,215,188			147,271,194
Property and equipment
Property and equipment, net of accumulated depreciation		10		61,274,162			46,487,058
Construction in progress		11		69,088,637			59,134,732
Land use rights, net of accumulated amortization		12		58,995,505			60,705,829
Total property and equipment				189,358,304			166,327,619
Other non-current assets
Goodwill		13		724,940			724,940
Proprietary technologies, net of accumulated amortization		14		11,587,564			12,081,470
Temporary deposits paid to entities for investments in future Sino Joint Venture companies		15		41,109,708			41,109,708
License rights		17		-			-
Total other non- current assets				53,422,212			53,916,118
Total assets			$	480,995,704		$	367,514,931
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses			$	16,477,918		$	11,055,194
Other payables		18		11,177,713			10,768,786
Billings in excess of costs and estimated earnings on uncompleted contracts		19		3,373,432			3,146,956
Due to a director				4,244,519			1,793,768
Series F shares mandatory redemption payable		20		3,146,063			-
Bonds payable		22		1,725,000			-
Short term bank loan		21		-			4,100,377
				40,144,645			30,865,081
Non-current liabilities
Series F shares mandatory redemption payable		20		-			3,146,063
Long term debts		21		2,616,610			180,417
Bonds payable		22		-			1,725,000
Convertible note payable		23		6,982,667			-
				9,599,277			5,051,480
Commitments and contingencies		-		-
Stockholders' equity
Preferred stock: $0.001 par value
(10,000,000 shares authorized, 7,000,100 shares issued and outstanding
as of September 30, 2014 and December 31, 2013, respectively)
Series A preferred stock: $0.001 par value		24		-			-
(100 shares designated, 100 shares issued and outstanding
as of September 30, 2014 and December 31, 2013, respectively)
Series B convertible preferred stock: $0.001 par value		24		7,000			7,000
(10,000,000 shares designated, 7,000,000 shares issued and outstanding
as of September 30, 2014 and December 31, 2013, respectively)
Series F Non-convertible preferred stock: $0.001 par value		24
(1,000,000 shares designated, 0 shares issued and outstanding				-			-
as of September 30, 2014 and December 31, 2013, respectively)
Common stock: $0.001 par value		24		168,128			137,602
(170,000,000 shares authorized, 167,128,223 and 137,602,043 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively)
Additional paid - in capital				118,514,375			104,913,676
Retained earnings				249,573,317			181,196,498
Accumulated other comprehensive income				6,244,379			6,260,131
Treasury stock		24		(1,250,000	)		(1,250,000	)
Total Sino Agro Food, Inc. and subsidiaries stockholders' equity				373,257,199			291,264,907
Non - controlling interest				57,994,583			40,333,463
Total stockholders' equity				431,251,782			331,598,370
Total liabilities and stockholders' equity			$	480,995,704		$	367,514,931

The accompanying notes are an integral part of these consolidated financial statements.

F - 1

SINO AGRO FOOD, INC.

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

		Three months ended			Three months ended			Nine months ended			Nine months ended
	Note	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Revenue			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
- Sale of goods		$	82,171,415		$	61,667,275		$	242,800,784		$	140,368,479
- Consulting and service income from development contracts			24,598,641			8,873,865			51,188,141			39,070,677
- Commission income			450,003			166,557			1,191,427			776,621
			107,220,059			70,707,697			295,180,352			180,215,777
Cost of goods sold			(59,121,526	)		(41,315,537	)		(173,035,915	)		(93,418,818	)
Cost of services			(13,601,869	)		(3,269,035	)		(26,790,742	)		(19,760,570	)

Gross profit			34,496,664			26,123,125			95,353,695			67,036,389

General and administrative expenses			(3,594,509	)		(2,026,989	)		(9,544,763	)		(5,840,681	)
Net income from operations			30,902,155			24,096,136			85,808,932			61,195,708

Other income (expenses)

Government grant			57,340			343,481			295,012			423,240

Other income			155,032			41,264			159,555			107,171

Gain on extinguishment of debts	28		33,693			160,997			275,086			1,212,010

Interest expense			(263,664	)		(286,376	)		(483,157	)		(398,386	)

Net income (expenses)			(17,599	)		259,366			246,496			1,344,035

Net income before income taxes			30,884,556			24,355,502			86,055,428			62,539,743

Provision for income taxes	4		-			-			-			-

Net income			30,884,556			24,355,502			86,055,428			62,539,743
Less: Net (income) loss attributable
to non - controlling interest			(6,382,694	)		(5,602,728	)		(17,678,609	)		(13,077,257	)
Net income from continuing operations attributable
to Sino Agro Food, Inc. and subsidiaries			24,501,862			18,752,774			68,376,819			49,462,486
Other comprehensive (loss) income
- Foreign currency translation (loss) income			869,931			822,349			(33,241	)		2,258,890
Comprehensive income			25,371,793			19,575,123			68,343,578			51,721,376
Less: other comprehensive loss (income) attributable to
non - controlling interest			(139,032	)		(165,987	)		17,489			(331,758	)
Comprehensive income attributable to
Sino Agro Food, Inc. and subsidiaries		$	25,232,761		$	19,409,136		$	68,361,067		$	51,389,618

Earnings per share attributable to Sino Agro Food, Inc.
and subsidiaries common stockholders:
Basic	30	$	0.15		$	0.15		$	0.45		$	0.43

Diluted	30	$	0.14		$	0.15		$	0.43		$	0.40
Weighted average number of shares outstanding:

Basic	30		163,046,209			122,057,655			153,109,854			115,580,104

Diluted	30		170,046,206			129,057,655			160,109,854			123,525,159

The accompanying notes are an integral part of these consolidated financial statements.

F - 2

SINO AGRO FOOD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended			Nine months ended
	September 30, 2014			September 30, 2013
	(Unaudited)			(Unaudited)

Cash flows from operating activities
Net income for the period	$	86,055,428		$	62,539,743

Adjustments to reconcile net income for the period to net cash from operations:
Depreciation		1,768,047			995,408
Amortization		1,619,267			1,469,457
Common stock issued for services		255,033			271,800
Gain on extinguishment of debts		(275,086	)		(1,212,010	)
Other amortized cost		229,857			14,152
Changes in operating assets and liabilities:
Increase in inventories		(29,291,689	)		(818,748	)
(Increase) decrease in cost and estimated earnings in excess of billings on uncompleted contacts		(560,991	)		577,059
Increase in deposits and prepaid expenses		(583,670	)		(37,090,703	)
Increase in due to a director		2,450,751			1,640,331
Increase in accounts payable and accrued expenses		5,361,625			2,468,434
Increase in other payables		12,415,301			17,952,791
Increase in accounts receivable		(40,715,939	)		(6,742,274	)
Increase (decrease) in billings in excess of costs and estimated earnings on uncompleted contracts		226,476			(376,629	)
Increase in other receivables		(12,692,737	)		(3,623,402	)
Net cash provided by operating activities		26,261,673			38,065,409
Cash flows from investing activities
Purchases of property and equipment		(3,418,741	)		(4,188,660	)
Payment for construction in progress		(22,227,905	)		(31,494,031	)
Acquisition of land use rights		-			(489,904	)
Net cash used in investing activities		(25,646,646	)		(36,172,595	)
Cash flows from financing activities
Net proceeds from convertible note payable		5,237,000			-
Proceeds from long term debts		2,436,193			-
Short term bank loan repaid		(4,100,377	)		(742,109	)
Net proceeds of bonds payable		-			339,884
Dividends paid		-			(951,308	)
Net cash provided by (used in) financing activities		3,572,816			(1,353,533	)

Effects on exchange rate changes on cash		(823,960	)		624,869
Increase in cash and cash equivalents		3,363,883			1,164,150

Cash and cash equivalents, beginning of period		1,327,274			8,424,265
Cash and cash equivalents, end of period	$	4,691,157		$	9,588,415

Supplementary disclosures of cash flow information:
Cash paid for interest	$	422,058		$	398,386

Cash paid for income taxes	$	-		$	-

Non - cash transactions
Common stock issued for settlement of debts	$	12,006,374		$	13,782,651
Common stock issued for services and compensation	$	2,519,232		$	133,744
Series B convertible preferred stock cancelled	$	-		$	(3,000	)
Transfer construction in progress to property and equipment	$	13,136,410			14,406,643
Transfer deposits and prepaid expenses to property and equipment	$	513,272		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F - 3

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CORPORATE INFORMATION

Sino Agro Food, Inc. (the “Company” or “SIAF”) (formerly known as Volcanic Gold, Inc. and A Power Agro Agriculture Development, Inc.) was incorporated on October 1, 1974 in the State of Nevada.

The Company was engaged in the mining and exploration business but ceased its mining and exploring business on October 14, 2005. On August 24, 2007, the Company entered into a Merger and Acquisition Agreement with Capital Award Inc., a Belize corporation (“CA”) and its subsidiaries Capital Stage Inc. (“CS”) and Capital Hero Inc. (“CH”). Effective the same date, CA completed a reverse merger transaction with SIAF. SIAF acquired all the outstanding common stock of CA from Capital Adventure, a shareholder of CA, for 32,000,000 shares of the Company’s common stock.

On August 24, 2007 the Company changed its name from Volcanic Gold, Inc. to A Power Agro Agriculture Development, Inc. On December 8, 2007, the Company changed its name to Sino Agro Food, Inc.

On September 5, 2007, the Company acquired three existing businesses in the People’s Republic of China (the “P.R.C.”):

(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 P.R.C. corporate Sino-Foreign joint venture. HST was dissolved in 2010.

On November 27, 2007, MEIJI and HST established a corporate Sino - Foreign joint venture, Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd. (“JHST”), a company incorporated in the P.R.C. with MEIJI owning a 75% interest and HST owning a 25% interest and MEIJI withdrew its 25% equity interest in HST.

On November 26, 2008, SIAF established Pretty Mountain Holdings Limited (“PMH”), a company incorporated in Hong Kong with an 80% equity interest. On May 25, 2009, PMH formed a corporate Sino-Foreign joint venture, Qinghai Sanjiang A Power Agriculture Co. Ltd. (“SJAP”), incorporated in the PRC, of which PMH owns a 45% equity interest. At the time, the remaining 55% equity interest in SJAP was owned by the following entities:

•

Qinghai Province Sanjiang Group Company Limited (English translation) (“Qinghai Sanjiang”), a company owned by the P.R.C. with major business activities in the agriculture industry; and

•

Guangzhou City Garwor Company Limited (English translation) (“Garwor”), a private limited company incorporated in the P.R.C., 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, P.R.C.

In September 2009, the Company carried out an internal reorganization of its corporate structure and business, and formed a 100% owned subsidiary, A Power Agro Agriculture Development (Macau) Limited (“APWAM”), which was formed in Macau. APWAM then acquired PMH’s 45% equity interest in SJAP. By virtue of the acquisition, APWAM assumed all obligations and liabilities of PMH under the Sino Foreign Joint Venture Agreement. On May 7, 2010, Qinghai Sanjiang sold and transferred its equity interest in SJAP to Garwor. The State Administration for Industry and Commerce of Xining City Government of the P.R.C. approved the sale and transfer. As a result, APWAM owned 45% of SJAP and Garwor owned the remaining 55%. This remains the case as of the date of this report (the “Report”).

On September 9, 2010, an application was submitted by the Company to the Companies Registry of Hong Kong for deregistration of PMH under Section 291AA of the Hong Kong Companies Ordinance. On January 28, 2011, PMH was dissolved.

On February 15, 2011 and March 29, 2011, the Company entered into an agreement and a memorandum of understanding (an " MOU"), respectively, to sell 100% equity interest in HYT group (including HYT and ZX) to Mr. Xin Ming Sun, a director of ZhongXingNong Nu Co., Ltd for $45,000,000, with effective date of January 1, 2011.

F - 4

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CORPORATE INFORMATION (CONTINUED)

The Company applied to form Enping City Bi Tao A Power Prawn Culture Development Co. Limited (“EBAPCD”), in which the Company would indirectly own a 25% equity interest on February 28, 2011.

On February 28, 2011, TRW applied to form a corporate joint venture, Enping City Bi Tao A Power Fishery Development Co., Limited (“EBAPFD”), incorporated in the PRC. TRW owned a 25% equity interest in EBAPFD. On November 17, 2011, TRW formed Jiang Men City A Power Fishery Development Co., Limited (“JFD”) in which it acquired a 25% equity interest, while withdrawing its 25% equity interest in EBAPFD. As of December 31, 2011, the Company had invested for total cash consideration of $1,258,607 in JFD. JFD operates an indoor fish farm. On January 1, 2012, the Company acquired an additional 25% equity interest in JFD for total cash consideration of $1,662,365. As of January 1, 2012, the Company had consolidated the assets and operations of JFD. On April 1, 2012, the Company acquired an additional 25% equity interest in JFD for the total cash consideration of $1,702,580. These acquisitions were at our option according the terms of the original development agreement. The Company presently owns a 75% equity interest in JFD, representing majority of voting rights and controls its board of directors.

On April 15, 2011, MEIJI applied to form Enping City A Power Cattle Farm Co., Limited (“ECF”), all of which the Company would indirectly own a 25% equity interest in on November 17, 2011. On January 1, 2012, the Company had invested $1,076,489 in ECF and the amount was settled in contra against accounts receivable due from ECF. On September 17, 2012 MEIJI formed Jiang Men City Hang Mei Cattle Farm Development Co., Limited (“JHMC”) and acquired additional 50% equity interest for the total cash consideration of $2,944,176 on September 30, 2012 while withdrawing its 25% equity interest in ECF. This acquisition was at our option according to the terms of the original development agreement. The Company presently owns 75% equity interest in JHMC, representing majority of voting right and controls its board of directors. As of September 30, 2012, the Company had consolidated the assets and operations of JHMC. Up to September 30, 2014, MEIJI further invested in JHMC of $400,000 in JHMC.

On July 18, 2011, the Company formed Hunan Shenghua A Power Agriculture Co., Limited (“HSA”), in which the Company owns a 26% equity interest, and SJAP owns a 50% equity interest with the Chinese partner owning the remaining 24%. Up to September 30, 2014, MEIJI and SJAP total investment in HSA were $857,808 and 629,344, respectively.

On November 12, 2013, the Company acquired a shell company, Goldcup9203 AB, incorporated in Sweden, in which the Company owns a 100% equity interest. Goldcup 9203 AB changed its name to Sino Agro Food Sweden AB (publ) (“SAFS”). Up to September 30, 2014, the Company’s total investment in SAFS was $77,664.

SJAP formed Qinghai Zhong He Meat Products Co., Limited (“QZH”) , with SJAP would owning 100% equity interest. Up to September 30, 2014, the SJAP’s total investment in QZH was $487,805.

The Company’s principal executive office is located at Room 3801, Block A, China Shine Plaza, No. 9 Lin He Xi Road, Tianhe District, Guangzhou City, Guangdong Province, P.R.C., 510610.

The nature of the operations and principal activities of the Company and its subsidiaries are described in Note 2.2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1

FISCAL YEAR

The Company has adopted December 31 as its fiscal year end.

F - 5

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.2

REPORTING ENTITIES

Name of subsidiaries	Place of incorporation	Percentage of interest	Principal activities

Capital Award Inc. ("CA")	Belize	100% (12.31.2013: 100%) directly	Fishery development and holder of A-Power Technology master license.

Capital Stage Inc. ("CS")	Belize	100% (12.31.2013: 100%) indirectly	Dormant

Capital Hero Inc. ("CH")	Belize	100% (12.31.2013: 100%) indirectly	Dormant

Sino Agro Food Sweden ("SAFS")	Sweden	100% (12.31.2013: 100%) directly	Dormant

Tri-way Industries Limited ("TRW")	Hong Kong, P.R.C.	100% (12.31.2013: 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.

Macau Meiji Limited ("MEIJI")	Macau, P.R.C.	100% (12.31.2013: 100%) directly	Investment holding, cattle farm development, beef cattle and beef trading
A Power Agro Agriculture Development (Macau) Limited ("APWAM")	Macau, P.R.C.	100% (12.31.2013: 100%) directly	Investment holding

Jiang Men City Heng Sheng Tai Agriculture Development Co. Ltd ("JHST")	P.R.C.	75% (12.31.2013: 75%) indirectly	Hylocereus Undatus Plantation ("HU Plantation").

Jiang Men City A Power Fishery Development Co., Limited ("JFD")	P.R.C.	75% (12.31.2013: 75%) indirectly	Fish cultivation

Jiang Men City Hang Mei Cattle Farm Development Co., Limited ("JHMC")	P.R.C.	75% (12.31.2013: 75%) indirectly	Beef cattle cultivation

Hunan Shenghua A Power Agriculture Co., Limited ("HSA")	P.R.C.	76% (12.31.2013: 76%) indirectly	Manufacturing of organic fertilizer, livestock feed, and beef cattle and sheep cultivation, and plantation of crops and pastures

Name of variable interest entities	Place of incorporation	Percentage of interest	Principal activities
Qinghai Sanjiang A Power Agriculture Co., Ltd ("SJAP")	P.R.C.	45% (12.31.2013: 45%) indirectly	Manufacturing of organic fertilizer, livestock feed, and beef cattle and plantation of crops and pastures

Qinghai Zhong He Meat Products Co., Limited (“QZH”)	P.R.C.	100% (12.31.2013: 100%) indirectly	Slaughter of cattle

F - 6

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.3

BASIS OF PRESENTATION

The unaudited consolidated financial statements for the nine months ended September 30, 2014 are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

The unaudited quarterly financials for the nine months ended September 30, 2014 results are for the nine months and do not necessarily indicate the results for a full year. The information included in this interim report should be read in conjunction with the information included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013.

2.4

BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of the Company, its subsidiaries CA, CS, CH, TRW, MEIJI, JHST, JFD, JHMC, HSA, APWAM, and SAFS and its variable interest entities SJAP and QZH. All material inter-company transactions and balances have been eliminated in consolidation.

SIAF, CA, CS, CH, TRW, MEIJI, JHST, JFD, JHMC, HSA, APWAM, QZH, SAFS and SJAP are hereafter referred to as (“the Company”).

2.5

BUSINESS COMBINATION

The Company adopted the accounting pronouncements relating to business combination (primarily contained in ASC Topic 805 “Business Combinations”), including assets acquired and liabilities assumed on arising from contingencies. These pronouncements established principles and requirement for how the acquirer of a business recognizes and measures in its financial statements he identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquisition as well as provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. In addition, these pronouncements eliminate the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria and require an acquirer to develop a systematic and rational basis for subsequently measuring and accounting for acquired contingencies depending on their nature. The Company’s adoption of these pronouncements will have an impact on the manner in which it accounts for any future acquisitions.

2.6

NON - CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS

The Company adopted the accounting pronouncement on non-controlling interests in consolidated financial statements, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This guidance is primarily contained in ASC Topic “Consolidation.” It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated financial statements. The adoption of this standard has not had material impact on the Company’s consolidated financial statements.

2.7

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods covered thereby. Actual results could differ from these estimates. Judgments and estimates of uncertainties are required in applying the Company’s accounting policies in certain areas. The following are some of the areas requiring significant judgments and estimates: determinations of the useful lives of assets, estimates of allowances for doubtful accounts, cash flow and valuation assumptions in performing asset impairment tests of long-lived assets, estimates of the realization of deferred tax assets and inventory reserves.

F - 7

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.8

REVENUE RECOGNITION

Government grants are recognized when (i) the Company has substantially accomplished what must be done pursuant to the terms of the grant that are established by the local government; and (ii) the Company receives notification from the local government that the Company has satisfied all of the requirements to receive the government grants; and (iii) the amounts are received.

Multiple-Element Arrangements

To qualify as a separate unit of accounting under ASC 605-25 “Multiple Element Arrangements”, the delivered item must have value to the customer on a standalone basis. The significant deliverables under the Company’s multiple-element arrangements are consulting and service under development contract, commission and management service.

Revenues from the Company's consulting and services under development contracts are performed under fixed-price contracts. Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition (“ASC 605”). Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognizes that profit over the contract term. The percentage of costs incurred determines the amount of revenue to be recognized. Payment terms are generally defined by the installation contract and as a result may not match the timing of the costs incurred by the Company and the related recognition of revenue. Such differences are recorded as either costs or estimated earnings in excess of billings on uncompleted contracts or billings in excess of costs and estimated earnings on uncompleted contracts. The Company determines a customer’s credit worthiness at the time an order is accepted. Sudden and unexpected changes in a customer’s financial condition could put recoverability at risk.

The percentage of completion method requires the ability to estimate several factors, including the ability of the customer to meet its obligations under the contract, including the payment of amounts when due. If the Company determines that collectability is not assured, the Company will defer revenue recognition and use methods of accounting for the contract such as the completed contract method until such time as the Company determines that collectability is reasonably assured or through the completion of the project.

For fixed-price contracts, the Company uses the ratio of costs incurred to date on the contract to management's estimate of the contract's total costs, to determine the percentage of completion on each contract. This method is used as management considers expended costs to be the best available measure of progression of these contracts. Contract costs include all direct material, subcontract and labor costs and those indirect costs related to contract performance, such as supplies, tool repairs and depreciation. The Company accounts for maintenance and repair services under the guidance of ASC 605 as the services provided relate to construction work. Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in job performance, job conditions, and estimated profitability arising from contract penalty, change orders and final contract settlements may result in revisions to the estimated profit ability during the contract. These changes, which include contracts with estimated costs in excess of estimated revenues, are recognized as contract costs in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. At the point the Company anticipates a loss on a contract, the Company estimates the ultimate loss through completion and recognizes that loss in the period in which the loss was identified.

F - 8

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.8

REVENUE RECOGNITION (CONTINUED)

The Company does not provide warranties to customers on a basis customary to the industry, however, customers can claim warranty directly from product manufacturers for defects in equipment or products. Historically, the Company has experienced no warranty claims.

The Company provides various management services to its customers in the P.R.C. based on a negotiated fixed-price contract. The clients usually pay the fees when the services contract is signed and services are rendered. The Company recognizes these services-based revenues from contracts when (i) management services are rendered; (ii) clients recognize the completion of services; and (iii) collectability is reasonably assured. Fees received in advance are recorded as deferred revenue under current liabilities.

2.9

COST OF GOODS SOLD AND COST OF SERVICES

Cost of goods sold consists primarily of direct purchase cost of merchandise goods, and related levies. Cost of services consists primarily direct cost and indirect cost incurred to date for development contracts and provision for anticipated losses for development contracts.

2.10

SHIPPING AND HANDLING

Shipping and handling costs related to cost of goods sold are included in general and administrative expenses, which totaled $1,673, $6,158, $13,490 and $18,640 for the three months and for the nine months ended September 30, 2014 and 2013, respectively.

2.11

ADVERTISING

Advertising costs are included in general and administrative expenses, which totaled $708,049, $195, $1,661,103 and $1,200 for the three months ended and the nine months ended September 30, 2014 and 2013, respectively.

2.12

FOREIGN CURRENCY TRANSLATION AND OTHER COMPREHENSIVE INCOME

The reporting currency of the Company is the U.S. dollars. The functional currency of the Company is the Chinese Renminbi (RMB).

For those entities whose functional currency is other than the U.S. dollars, all assets and liabilities are translated into U.S. dollars at the exchange rate on the balance sheet date; shareholders’ equity is translated at historical rates and items in the statements of income and of cash flows are translated at the average rate for the period. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported in the statements of cash flows will not necessarily agree with changes in the corresponding balances in the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statements of shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of income and other comprehensive income, as incurred.

Accumulated other comprehensive income in the consolidated statement of shareholders’ equity amounted to $6,244,379 as of September 30, 2014 and $6,260,131 as of December 31, 2013. The balance sheet amounts with the exception of equity as of September 30, 2014 and December 31, 2013 were translated using an exchange rate of RMB 6.15 to $1.00 and RMB 6.10 to $1.00, respectively. The average translation rates applied to the statements of income and other comprehensive income and of cash flows for the nine months ended September 30, 2014 and 2013 were RMB 6.15 to $1.00 and RMB 6.21 to $1.00, respectively.

F - 9

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.13

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. Cash and cash equivalents kept with financial institutions in the P.R.C. are not insured or otherwise protected. Should any of those institutions holding the Company’s cash become insolvent, or should the Company become unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution.

2.14

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.

The standard credit period for most of the Company’s clients is three months. The collection period over 1 year is classified as long-term accounts receivable. Management evaluates the collectability of the receivables at least quarterly. Provision for doubtful accounts as of September 30, 2014 and December 31, 2013 are $0.

2.15

INVENTORIES

Inventories are valued at the lower of cost (determined on a weighted average basis) and net realizable value.

Costs incurred in bringing each product to its location and conditions are accounted for as follows:

(a)

raw materials – purchase cost on a weighted average basis;

(b)

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

(c)

retail and wholesale merchandise finished goods – purchase cost on a weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs for completion and the estimated costs necessary to make the sale.

2.16

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Such costs include the cost of replacing parts that are eligible for capitalization when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognized in the carrying amount of the property and equipment as a replacement only if it is eligible for capitalization. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year end.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.

Plant and machinery	5 - 10 years
Structure and leasehold improvements	10 - 20 years
Mature seeds and herbage cultivation	20 years
Furniture and equipment	2.5 - 10 years
Motor vehicles	5 -10 years

An item of property and equipment is removed from the accounts upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated statements of income in the period the item is disposed.

2.17

GOODWILL

Goodwill is an asset representing the fair economic benefits arising from other assets acquired in a business combination that are not individually identified or separately recognized. Goodwill is tested for impairment on an annual basis at the end of the Company’s fiscal year, or when impairment indicators arise. The Company uses a fair-value-based approach to test for impairment at the level of each reporting unit. The Company directly acquired MEIJI, which is the holding company of JHST that operates the Hu Plantation. As a result of this acquisition, the Company recorded goodwill in the amount of $724,940. This goodwill represents the fair value of the assets acquired in these acquisitions over the cost of the assets acquired.

F - 10

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.18

PROPRIETARY TECHNOLOGIES

A master license of stock feed manufacturing technology was acquired and the costs of acquisition are capitalized as proprietary technologies when technological feasibility has been established. Cost of acquisition of stock feed manufacturing technology master license is amortized using the straight-line method over its estimated life of 20 years.

An aromatic cattle-feeding formula was acquired and the costs of acquisition are capitalized as proprietary technologies when technological feasibility has been established. Cost of acquisition on aromatic cattle-feeding formula is amortized using the straight-line method over its estimated life of 25 years.

The cost of sleepy cod breeding technology license is capitalized as proprietary technologies when technological feasibility has been established. Cost of granting sleepy cod breeding technology license is amortized using the straight-line method over its estimated life of 25 years.

Bacterial cellulose technology license and related trade mark are capitalized as proprietary technologies when technological feasibility has been established. Cost of license and related trade mark is amortized using the straight-line method over its estimated life of 20 years.

The Company has determined that technological feasibility is established at the time a working model of products is completed. Proprietary technologies are intangible assets of finite lives. Management evaluates the recoverability of proprietary technologies on an annual basis at the end of the Company’s fiscal year, or when impairment indicators arise. As required by ASC Topic 350 “Intangible – Goodwill and Other”, the Company uses a fair-value-based approach to test for impairment.

2.19

CONSTRUCTION IN PROGRESS

Construction in progress represents direct costs of construction as well as acquisition and design fees incurred. Capitalization of these costs ceases and the construction in progress is transferred to property and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until construction is completed and the asset is ready for its intended use.

2.20

LAND USE RIGHTS

Land use rights represent acquisition of rights to agricultural land from farmers and are amortized on the straight-line basis over their respective lease periods. The lease period of agricultural land is in the range from 10 to 60 years. Land use rights purchase prices were determined in accordance with the P.R.C. Government’s minimum lease payments on agricultural land and mutually agreed to terms between the Company and the vendors.

2.21

CORPORATE JOINT VENTURE

A corporation formed, owned, and operated by two or more businesses as a separate and discrete business or project (venture) for their mutual benefit is considered to be a corporate joint venture. Investee entities, in which the Company can exercise significant influence, but not control, are accounted for under the equity method of accounting. Under the equity method of accounting, the Company’s share of the earnings or losses of these companies is included in net income.

A loss in value of an investment that is other than a temporary decline is recognized as a charge to operations. Evidence of a loss in value might include, but would not necessarily be limited to, the absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.

F - 11

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.22

VARIABLE INTEREST ENTITY

A variable interest entity (“VIE”) is an entity (investee) in which the investor has obtained less than a majority interest, according to the Financial Accounting Standards Board (FASB). A VIE is subject to consolidation if a VIE meets one of the following three criteria as elaborated in ASC Topic 810-10, Consolidation:

(a)

the 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 interests..

If a firm is the primary beneficiary of a VIE, the holdings must be disclosed on the balance sheet. The primary beneficiary is defined as the person or company with the majority of variable interests. A corporation formed, owned, and operated by two or more businesses (ventures) as a separate and discrete business or project (venture) for their mutual benefit is defined as a joint venture.

2.23

TREASURY STOCK

Treasury stock means shares of a corporation’s own stock that have been issued and subsequently reacquired by the corporation. Converting outstanding shares to treasury shares does not reduce the number of shares issued but does reduce the number of shares outstanding. These shares are not eligible to receive dividends. Accounting for excesses and deficiencies on treasury stock transactions is governed by ASC 505-30-30.

State laws and federal agencies closely regulate transactions involving a company’s own capital stock, so the purchase of outstanding shares must have a legitimate purpose. Some of the most common reasons for purchasing outstanding shares are as follows:

(a)

to meet additional stock needs for various reasons, including newly implemented stock option plans, stock for convertible bonds or convertible preferred stock, or a stock dividend.

(b)

to make more shares available for acquisitions of other entities.

The cost method of accounting for treasury shares has been adopted by the Company. The purchase of outstanding shares and thus converting them into treasury shares is treated as a temporary reduction in shareholders’ equity in view of the expectation to reissue the shares instead of retiring them. When the Company reissues the treasury shares, the temporary account is eliminated. The cost of acquiring outstanding shares for converting into treasury shares is charged to a contra account, in this case a contra equity account that reduces the stockholder equity balance.

2.24

INCOME TAXES

The Company accounts for income taxes under the provisions of ASC Topic 740 “Accounting for Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

The provision for income tax is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

F - 12

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.24

INCOME TAXES (CONTINUED)

ASC Topic 740 also prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or for one expected to be taken, in a tax return. ASC Topic 740 also provides guidance related to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to unrecognized tax benefits will be recorded as tax expense.

2.25

POLITICAL AND BUSINESS RISK

The Company's operations are carried out in the P.R.C. Accordingly, the political, economic and legal environment in the P.R.C. may influence the Company’s business, financial condition and results of operations by the general state of the P.R.C.'s economy. The Company's operations in the P.R.C. are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

2.26

CONCENTRATION OF CREDIT RISK

Cash includes cash at banks and demand deposits in accounts maintained with banks within the P.R.C. Total cash in these banks as of September 30, 2014 and December 31, 2013 amounted to $4,575,685 and $1,256,440 respectively, none of which is covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks to its cash in bank accounts.

The Company had 5 major customers (A, B, C, D & E) whose business individually represented the following percentages of the Company’s total revenue for the periods indicated:

	Three months			Three months			Nine months			Nine months
	ended			ended			ended			ended
	September 30,			September 30,			September 30,			September 30,
	2014			2013			2014			2013

Customer A		24.57	%		13.95	%		28.24	%		16.76	%
Customer B		15.78	%		11.38	%		16.70	%		8.24	%
Customer C		14.33	%		-			11.64	%		-
Customer D		8.33	%		13.12	%		7.12	%		8.41	%
Customer E		5.77	%		-			-			3.80	%
Customer F		-			17.99	%		5.39	%		17.21	%
Customer G		-			7.29	%		-			-
		68.78	%		63.73	%		69.09	%		54.42	%

F - 13

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.26

CONCENTRATION OF CREDIT RISK (CONTINUED)

		Percent of
	Segment	revenue			Amount
Customer A	Fishery Development and Corporate and others Divisions		28.24	%	$	83,356,492
Customer B	Organic Fertilizer and Bread Grass Division		16.70	%	$	49,309,009
Customer C	Fishery Development Division		11.64	%	$	34,344,729

Accounts receivable are derived from revenue earned from customers located primarily in the P.R.C. The Company performs ongoing credit evaluations of customers and has not experienced any material losses to date.

The Company had 5 major customers whose accounts receivable balance individually represented the following percentages of the Company’s total accounts receivable:

	September 30, 2014			December 31, 2013

Customer A		19.22	%		8.69	%
Customer B		11.32	%		-
Customer C		6.73	%		12.86	%
Customer D		6.30	%		-
Customer E		-			8.36	%
Customer F		-			10.23	%
Customer G		4.89	%		8.27	%
		48.46	%		48.41	%

As of September 30, 2014, amounts due from customers A, B and C are $23,600,631, $13,901,362 and $8,262,682, respectively. The Company has not experienced any significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties of its major customers.

2.27

IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLE ASSETS

In accordance with ASC Topic 360, “Property, Plant and Equipment,” long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company reviews the carrying amount of its long-lived assets, including intangibles, for impairment, each reporting period. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is considered not recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. As of September 30, 2014 and December 31, 2013, the Company determined no impairment losses were necessary.

F - 14

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.28

EARNINGS PER SHARE

As prescribed in ASC Topic 260 “Earnings per Share,” Basic Earnings per Share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company’s common stock at the average market price during the period.

For the three months ended September 30, 2014 and 2013, basic earnings per share attributable to Sino Agro Food, Inc. and subsidiaries common stockholders amount to $0.15 and $0.15, respectively. For the nine months ended September 30, 2014 and 2013, basic earnings per share attributable to Sino Agro Food, Inc. and subsidiaries common stockholders amount to $0.45 and $0.43, respectively. For the three months ended September 30, 2014 and 2013, diluted earnings per share attributable to Sino Agro Food, Inc. and its subsidiaries’ common stockholders amounted to $0.14 and $0.15, respectively. For the nine months ended September 30, 2014 and 2013, diluted earnings per share attributable to Sino Agro Food, Inc. and its subsidiaries’ common stockholders amounted to $0.43 and $0.40, respectively.

2.29

ACCUMULATED OTHER COMPREHENSIVE INCOME

ASC Topic 220 “Comprehensive Income” establishes standards for reporting and displaying comprehensive income and its components in financial statements. Comprehensive income is defined as the change in stockholders’ equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The comprehensive income for all periods presented includes both the reported net income and net change in cumulative translation adjustments.

2.30

RETIREMENT BENEFIT COSTS

P.R.C. state managed retirement benefit programs are defined contribution plans and the payments to the plans are charged as expenses when employees have rendered service entitling them to the contribution made by the employer.

2.31

STOCK-BASED COMPENSATION

The Company has adopted both ASC Topic 718, “Compensation - Stock Compensation” and ASC Topic 505-50, “Equity-Based Payments to Non- Employees” using the fair value method in which an entity issues its equity instruments to acquire goods and services from employees and non-employees. Stock compensation for stock granted to non-employees has been determined in accordance with this accounting standard and the accounting standard regarding accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling goods or services, as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. This accounting standard allows the “simplified” method to determine the term of employee options when other information is not available. Under ASC Topic 718 and ASC Topic 505-50, stock compensation expenses is measured at the grant date on the value of the option or restricted stock and is recognized as expenses, less expected forfeitures, over the requisite service period, which is generally the vesting period.

F - 15

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.32

FAIR value of financial INSTRUMENTS

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

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.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments. The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value as of September 30, 2014 or December 31, 2013, nor gains or losses are reported in the statements of income and comprehensive income that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the nine months ended September 30, 2014 or 2013.

2.33

NEW ACCOUNTING PRONOUNCEMENTS

The Company does not expect any recent accounting pronouncements to have a material effect on the Company’s financial position, results of operations, or cash flows.

In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of Accumulated Other Comprehensive Income (“AOCI”). This new guidance requires entities to present (either on the face of the income statements or in the notes) the effects on the line items of the income statement for amounts reclassified out of AOCI. The new guidance will be effective for us beginning July 1, 2013. Other than requiring additional disclosures, there is no material impact on the consolidated financial statements upon adoption.

In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent releases any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective for us beginning July 1, 2014. there is no material impact on the consolidated financial statements upon adoption.

In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists". These amendments provide that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except to the extent that a net operating loss carry forward, a similar tax loss, or a tax credit carry forward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU 2013-11 does not expect to have a material impact on the Company's consolidated financial statements.

F - 16

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.33

NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which provides a narrower definition of discontinued operations than under existing U.S. GAAP. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results should be reported in the consolidated financial statements as discontinued operations. ASU 2014-08 also provides guidance on the consolidated financial statement presentations and disclosures of discontinued operations. The new guidance is effective prospectively for the Company to all new disposals of components and new classification as held for sale beginning April 1, 2015. The Company is evaluating the effects, if any, of the adoption of this guidance will have on the consolidated financial position, results of operations or cash flows.

In May 2014, the Financial Accounting Standards Board issued guidance related to revenue from contracts with customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for us in the first quarter of 2017. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." ASU 2014-15 will explicitly require management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. Management is currently evaluating the impact of this pronouncement on our consolidated financial statements

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

F - 17

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION

The Company establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as business segments and major customers in consolidated financial statements. The Company operates in five principal reportable segments: Fishery Development Division, and HU Plantation Division and Organic Fertilizer and Bread Grass Division, Cattle Development Division and Corporate and others. No geographic information is required as all revenue and assets are located in the P.R.C.

	For the three months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Revenue	$	47,780,135	$	5,813,667	$	33,700,137	$	6,814,990	$	13,111,130	$	107,220,059

Net income (loss)	$	13,754,241	$	2,567,126	$	6,994,954	$	641,963	$	543,578	$	24,501,862

Total assets	$	131,700,632	$	55,471,908	$	218,710,852	$	39,995,639	$	35,116,673	$	480,995,704

	For the three months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Revenue	$	26,704,244	$	10,534,960	$	20,434,953	$	4,639,397	$	8,394,143	$	70,707,697

Net income (loss)	$	9,762,014	$	5,322,211	$	1,443,930	$	575,134	$	1,649,485	$	18,752,774

Total assets	$	79,561,093	$	44,908,550	$	131,498,783	$	44,808,248	$	27,027,247	$	327,803,921

F - 18

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

	For the nine months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Revenue		136,968,336	$	9,085,607		95,459,852		21,483,496		32,183,061		295,180,352

Net income (loss)	$	32,002,640	$	3,752,283		25,914,779	$	1,966,526		4,740,591	$	68,376,819

Total assets	$	131,700,632	$	55,471,908	$	218,710,852	$	39,995,639	$	35,116,673	$	480,995,704

	For the nine months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Revenue	$	68,826,877	$	14,089,946	$	52,259,230	$	19,423,115	$	25,616,609	$	180,215,777

Net income (loss)	$	20,815,367	$	7,533,778	$	10,786,509	$	3,945,015	$	6,381,817	$	49,462,486

Total assets	$	79,561,093	$	44,908,550	$	131,498,783	$	44,808,248	$	27,027,247	$	327,803,921

Note

(1)

Operated by Capital Award, Inc. (“CA”). and Jiangmen City A Power Fishery Development Co., Limited (“JFD”).

(2)

Operated by Jiangmen City Heng Sheng Tai Agriculture Development Co., Limited (“JHST”).

(3)

Operated by Qinghai Sanjiang A Power Agriculture Co., Limited (“SJAP”), A Power Agro Agriculture Development (Macau) Limited (“APWAM”) , Qinghai Zhong He Meat Products Co., Limited (“QZH”), A Power Agro Agriculture Development (Macau) Limited (“APWAM”) and Hunan Shenghua A Power Agriculture Co., Limited (“HSA”).

(4)

Operated by Jiangmen City Hang Mei Cattle Farm Development Co. Limited (“JHMC”) and Macau Meiji Limited (“MEIJI”).

(5)

Operated by Sino Agro Food, Inc. (“SIAF”) and Sino Agro Food Sweden AB (publ) (“SAFS”).

F - 19

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of revenue:-

	Three months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Name of entity
Sale of goods
Capital Award, Inc. ("CA")	$	22,731,491	$	-	$	-	$	-	$	-	$	22,731,491
Jiang Men City Heng Sheng Tai Agriculture
Development Co., Limited ("JHST")		-		5,813,667		-		-		-	$	5,813,667
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		5,794,162		-		-	$	5,794,162
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		5,669,050		-		-		5,669,050
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		22,236,925		-		-	$	22,236,925
Macau Eiji Company Limited ("MEIJI")		-		-		-		6,814,990		-	$	6,814,990
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		13,111,130	$	13,111,130
Consulting and service income for development contracts
Capital Award, Inc. ("CA")		24,598,641		-		-		-		-	$	24,598,641
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		-		-
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
Commission and management fee
Capital Award, Inc. ("CA")		450,003		-		-		-		-		450,003
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
	$	47,780,135	$	5,813,667	$	33,700,137	$	6,814,990	$	13,111,130	$	107,220,059

F - 20

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of revenue:-

	Three months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Name of entity
Sale of goods
Capital Award, Inc. ("CA")	$	19,598,282	$	-	$	-	$	-	$	-	$	19,598,282
Jiang Men City Heng Sheng Tai
Agriculture Development Co., Limited ("JHST")		-		10,534,960		-		-		-		10,534,960
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		3,104,578		-		-		3,104,578
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		-		-		-		-
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		17,330,375		-		-		17,330,375
Macau Eiji Company Limited ("MEIJI")		-		-		-		4,639,397		-		4,639,397
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		6,459,683		6,459,683
Consulting and service income for development contracts
Capital Award, Inc. ("CA")		6,939,405		-		-		-		-		6,939,405
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		1,934,460		1,934,460
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
Commission and management fee										-
Capital Award, Inc. ("CA")		166,557		-		-		-		-		166,557
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
	$	26,704,244	$	10,534,960	$	20,434,953	$	4,639,397	$	8,394,143	$	70,707,697

F - 21

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of revenue:

	Nine months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Name of entity
Sale of goods
Capital Award, Inc. ("CA")	$	86,218,455	$	-	$	-	$	-	$	-	$	86,218,455
Jiang Men City Heng Sheng Tai
Agriculture Development Co., Limited ("JHST")		-		9,085,607		-		-		-	$	9,085,607
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		15,750,656		-		-	$	15,750,656
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		7,467,877		-		-		7,467,877
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		72,241,319		-		-	$	72,241,319
Macau Eiji Company Limited ("MEIJI")		-		-		-		21,483,496		-	$	21,483,496
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		30,553,374		30,553,374
Consulting and service income for development contracts
Capital Award, Inc. ("CA")		49,558,454		-		-		-		-	$	49,558,454
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		1,629,687		1,629,687.00
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
Commission and management fee										-
Capital Award, Inc. ("CA")		1,191,427		-		-		-		-		1,191,427
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
	$	136,968,337	$	9,085,607	$	95,459,852	$	21,483,496	$	32,183,061	$	295,180,352

F - 22

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of revenue:

	Nine months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Name of entity
Sale of goods
Capital Award, Inc. ("CA")	$	44,462,877	$	-	$	-	$	-	$	-	$	44,462,877
Jiang Men City Heng Sheng Tai
Agriculture Development Co., Limited ("JHST")		-		14,089,946		-		-		-	$	14,089,946
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		7,827,433		-		-	$	7,827,433
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		-		-		-		-
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		44,431,797		-		-	$	44,431,797
Macau Eiji Company Limited ("MEIJI")		-		-		-		12,309,334		-		12,309,334
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		17,247,092	$	17,247,092
Consulting and service income for development contracts
Capital Award, Inc. ("CA")		23,728,927		-		-		-		-		23,782,927
Macau Eiji Company Limited ("MEIJI")		-		-		-		7,113,781		-	$	7,113,781
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		8,173,969		8,173,969
Commission and management fee
Capital Award, Inc. ("CA")		581,073		-		-		-		-		581,073
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		195,548		195,548
	$	68,826,877	$	14,089,946	$	52,259,230	$	19,423,115	$	25,616,609	$	180,215,777

F - 23

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of cost of goods sold and cost of services (Continued):-

	Three months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Cost of goods sold
Name of entity
Capital Award, Inc. ("CA")	$	15,935,868	$	-	$	-	$	-	$	-	$	15,935,868
Jiang Men City Heng Sheng Tai Agriculture
Development Co., Limited ("JHST")		-		1,704,741		-		-		-		1,704,741
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		4,698,541		-		-		4,698,541
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		3,519,966		-		-		3,519,966
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		15,270,656				-		15,270,656
Macau Eiji Company Limited ("MEIJI")		-		-		-		6,443,072		-		6,443,072
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		11,548,682		11,548,682
	$	15,935,868	$	1,704,741	$	23,489,163	$	6,443,072	$	11,548,682	$	59,121,526

	Three months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Cost of services
Name of entity
Consulting and service income for development contracts
Capital Award, Inc. ("CA")	$	13,601,869	$	-	$	-	$	-	$	-	$	13,601,869
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		-		-
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		-		-
	$	13,601,869	$	-	$	-	$	-	$	-	$	13,601,869

F - 24

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of cost of goods sold and cost of services (Continued):-

	Three months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Cost of goods sold
Name of entity
Capital Award, Inc. ("CA")	$	14,208,181	$	-	$	-	$	-	$	-	$	14,208,181
Jiang Men City Heng Sheng Tai
Agriculture Development Co., Limited ("JHST")		-		4,832,794		-		-		-		4,832,794
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		1,937,860		-		-		1,937,860
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		-		-		-		-
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		10,897,327		-		-		10,897,327
Macau Eiji Company Limited ("MEIJI")		-		-		-		3,974,942		-		3,974,942
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		5,464,433		5,464,433
	$	14,208,181	$	4,832,794	$	12,835,187	$	3,974,942	$	5,464,433	$	41,315,537

	Three months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

COST OF SERVICES
Name of entity
Consulting and service income for development contracts
Capital Award, Inc. ("CA")	$	2,703,461	$	-	$	-	$	-	$	-	$	2,703,461
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		-		-
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		565,574		565,574
	$	2,703,461	$	-	$	-	$	0	$	565,574	$	3,269,035

F - 25

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of cost of goods sold and cost of services (Continued):-

COST OF GOODS SOLD

	Nine months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Cost of goods sold
Name of entity
Capital Award, Inc. ("CA")	$	54,861,550	$	-	$	-	$	-	$	-	$	54,861,550
Jiang Men City Heng Sheng Tai Agriculture
Development Co., Limited ("JHST")		-		2,423,811		-		-		-		2,423,811
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		10,371,555				-		10,371,555
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		4,680,245		-		-		4,680,245
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		48,552,223				-		48,552,223
Macau Eiji Company Limited ("MEIJI")		-		-		-		20,418,345		-		20,418,345
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		31,728,186		31,728,186
	$	54,861,550	$	2,423,811	$	63,604,023	$	20,418,345	$	31,728,186	$	173,035,915

	Nine months ended September 30, 2014
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Cost of services
Name of entity
Consulting and service income for development contracts
Capital Award, Inc. ("CA")	$	25,236,498	$	-	$	-	$	-	$	-	$	25,236,498
Macau Eiji Company Limited ("MEIJI")		-		-		-		-		-		-
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		1,554,244		1,554,244
	$	25,236,498	$	-	$	-	$	-	$	1,554,244	$	26,790,742

F - 26

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT INFORMATION (CONTINUED)

Further analysis of cost of goods sold and cost of services (Continued):-

	Nine months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total
Cost of goods sold
Name of entity
Capital Award, Inc. ("CA")	$	33,460,670	$	-	$	-	$	-	$	-	$	33,460,670
Jiang Men City Heng Sheng Tai
Agriculture Development Co., Limited ("JHST")		-		6,093,751		-		-		-		6,093,751
Hunan Shenghua A Power
Agriculture Co., Limited ("HSA")		-		-		4,830,266		-		-		4,830,266
Qinghai Zhong He Meat Products Co Limited
("QZH")		-		-		-		-		-		-
Qinghai Sanjiang A Power
Agriculture Co., Limited ("SJAP")		-		-		26,770,503		-		-		26,770,503
Macau Eiji Company Limited ("MEIJI")		-		-		-		7,369,379		-		7,369,379
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		14,894,249		14,894,249
	$	33,460,670	$	6,093,751	$	31,600,769	$	7,369,379	$	14,894,249	$	93,418,818

	Nine months ended September 30, 2013
	Fishery Development Division (1)		HU Plantation Division (2)		Organic Fertilizer and Bread Grass Division (3)		Cattle Farm Development Division (4)		Corporate and others (5)		Total

Cost of services
Name of entity
Consulting and service income for development contracts
Capital Award, Inc. ("CA")	$	11,805,864	$	-	$	-	$	-	$	-	$	11,805,864
Macau Eiji Company Limited ("MEIJI")		-		-		-		5,519,294		-		5,519,294
Sino Agro Food, Inc. ("SIAF")		-		-		-		-		2,435,412		2,435,412
	$	11,805,864	$	-	$	-	$	5,519,294	$	2,435,412	$	19,760,570

F - 27

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES

United States of America

The Company was incorporated in the State of Nevada, in the United States of America. The Company has no trading operations in United States of America and no US corporate tax has been provided for in the consolidated financial statements of the Company.

Undistributed Earnings of Foreign Subsidiaries

The Company intends to use the remaining accumulated and future earnings of foreign subsidiaries to expand operations outside the United States of America.and accordingly, undistributed earnings of foreign subsidiaries are considered to be indefinitely reinvested outside the United States and no provision for U.S. Federal and State income tax or applicable dividend distribution tax has been provided thereon.

The Company appointed US tax professionals to assist in filing income tax returns for the years ended December 31, 2007 through December 31, 2012 in compliance with US Treasury Internal Revenue Code and we filed our Tax returns with the Internal Revenue Service (“ IRS”) of USA Government on June 2014.

At the same time, The Company reviewed its tax position with the assistance US tax professionals and believed that there would be no taxes and no penalties assessed by the IRS in the United States of America.

China

Beginning January 1, 2008, the new Enterprise Income Tax (“EIT”) law replaced the existing laws for Domestic Enterprises (“DE’s”) and Foreign Invested Enterprises (“FIE’s”). The new standard EIT rate of 25% replaced the 33% rate currently applicable to both DE’s and FIE’s. The Company is currently evaluating the impact that the new EIT will have on its financial condition. Beginning January 1, 2008, China unified the corporate income tax rule on foreign invested enterprises and domestic enterprises. The unified corporate income tax rate is 25%.

Under new tax legislation in China beginning in January 2008, the agriculture, dairy and fishery sectors are exempt from enterprise income taxes.

No EIT has been provided in the financial statements since SIAF, CA, JHST, JHMC, JFD, HSA, QZH and SJAP are exempt from EIT for the three months ended September 30, 2014 and 2013 and for the nine months ended September 30, 2014 and 2013 as they are within the agriculture, dairy and fishery sectors.

Belize

CA, CS and CH are international business companies incorporated in Belize, and are exempt from corporate tax in Belize.

Hong Kong

No Hong Kong profits tax has been provided in the consolidated financial statements, since TRW did not earn any assessable profits arising in Hong Kong for the three months ended September 30, 2014 and 2013 and for the nine months ended September 30, 2014 and 2013.

Macau

No Macau Corporate income tax has been provided in the consolidated financial statements since APWAM and MEIJI did not earn any assessable profits for the three months ended September 30, 2014 and 2013 and for the nine months ended September 30, 2014 and 2013.

Sweden

No Swedish Corporate income tax has been provided in the consolidated financial statements since SAFS incurred a tax loss for the three months ended September 30, 2014 and for the nine months ended September 30, 2014 and 2013.

No deferred tax assets and liabilities are of September 30, 2014 and December 31, 2013 since there was no difference between the financial statements carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the period in which the differences are expected to reverse.

F - 28

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES (CONTINUED)

Provision for income taxes is as follows:

Three months ended

Nine months ended

September 30, 2014

September 30, 2013

September 30, 2014

September 30, 2013

SIAF

SAFS

TRW

MEIJI and APWAM

JHST, JFD, JHMC, SJAP, QZH and HSA

The Company did not recognize any interest or penalties related to unrecognized tax benefits for the three months and the nine months ended September 30, 2014 and 2013. The Company had no uncertain positions that would necessitate recording of tax related liability. The Company is subject to examination by the respective tax authorities.

CASH AND CASH EQUIVALENTS

	September 30, 2014		December 31, 2013

Cash and bank balances	$	4,691,157	$	1,327,274

INVENTORIES

As of September 30, 2014, inventories are as follows:

	September 30, 2014		December 31, 2013

Sleepy cods, prawns, eels and marble goble	$	4,935,062	$	1,761,111
Bread grass		3,337,428		580,955
Beef cattle		5,850,305		1,951,962
Organic fertilizer		3,094,379		895,670
Forage for cattle and consumable		3,591,769		684,979
Raw materials for bread grass and organic fertilizer		13,411,046		855,493
Beef and mutton		2,213,890		-
Immature seeds		1,006,013		698,704
Harvested HU plantation		-		719,329
	$	37,439,892	$	8,148,203

F - 29

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DEPOSITS AND PREPAID EXPENSES

	September 30, 2014		December 31, 2013
Deposits for
- purchases of equipment	$	4,372,776	$	4,886,048
- acquisition of land use rights		7,826,508		7,826,508
- inventories purchases and miscellaneous#		7,693,099		9,771,383
- aquaculture contract		9,404,067		-
- building materials		877,598		1,281,935
- proprietary technologies		-		4,404,210
- construction in progress		23,021,316		23,021,316
Shares issued for employee compensation and overseas professional fee		2,415,099		100,308
	$	55,610,463	$	51,291,708

# Miscellaneous represents rental and utility deposits, and deposits for sundries purchases and sundries prepaid expenses.

ACCOUNTS RECEIVABLE

The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivable are reflected as a current asset and no allowance for bad debt has been recorded as of September 30, 2014 and December 31, 2013. Bad debts written off for the three months ended and the nine months ended September 30, 2014 and 2013 are $0.

Aging analysis of accounts receivable is as follows:

	September 30, 2014		December 31, 2013

0 - 30 days	$	64,914,582	$	20,864,404
31 - 90 days		30,367,458		28,960,582
91 - 120 days		16,046,506		23,941,294
over 120 days and less than 1 year		11,445,335		8,291,662
over 1 year		-		-
	$	122,773,881	$	82,057,942

OTHER RECEIVABLES

	September 30, 2014		December 31, 2013

Advanced to employees	$	277,298	$	109,278
Advanced to suppliers		7,552,844		3,673,493
Advanced to subcontractors and suppliers of new prawn project in Zhongshan		8,645,366		-
	$	16,475,508	$	3,782,771

Advanced to employees and suppliers are unsecured, interest free and repayable within two years.

F - 30

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.

PLANT AND EQUIPMENT

	September 30, 2014			December 31, 2013
Plant and machinery	$	5,344,326		$	5,263,933
Structure and leasehold improvements		49,841,748			36,308,860
Mature seeds and herbage cultivation		9,234,439			6,294,372
Furniture and equipment		393,411			391,608
Motor vehicles		765,858			765,858
		65,579,782			49,024,631
Less: Accumulated depreciation		(4,305,620	)		(2,537,573	)
Net carrying amount	$	61,274,162		$	46,487,058

Depreciation expense was $636,774 and $356,737 for the three months ended September 30, 2014 and 2013, respectively. Depreciation expense was $1,768,047 and $995,408 for the nine months ended September 30, 2014 and 2013, respectively.

11.

CONSTRUCTION IN PROGRESS

	September 30, 2014		December 31, 2013
Construction in progress
- Office, warehouse and organic fertilizer plant in HSA	$	16,867,188	$	22,761,164
- Organic fertilizer and bread grass production plant
and office building		18,009,803		8,600,187
- Oven room, road for production of dried flowers		276,288		-
- Rangeland for beef cattle and office building		30,690,295		26,054,582
- Fish pond		1,844,454		1,718,799
- Beef and seafood distribution center		1,400,609		-
	$	69,088,637	$	59,134,732

12.

LAND USE RIGHTS

Private ownership of agricultural land is not permitted in the PRC. Instead, the Company has leased six lots of land. The cost of the first lot of land use rights acquired in 2007 in Guangdong Province was $6,408,289 and consists of 180.23 acres with the lease expiring in 2067. The cost of the second lot of land use rights acquired in 2008 in Guangdong Province was $764,128, which consists of 31.84 acres with the lease expiring in 2068. The cost of the third lot of land use rights acquired in 2011 was $12,040,571, which consists of 93.64 acres in Guangdong Province, with the lease expiring in 2037. The cost of the fourth lot of land use rights acquired in 2011 was $35,405,750 which consisted of 287.21 acres in the Hunan Province, PRC and the leases expire in 2051, 2054 and 2071. The cost of the fifth lot of land use rights acquired in 2012 was $528,240 which consisted of 21.09 acres in Qinghai Province, PRC and the lease expires in 2051. The cost of the sixth lot of land use rights acquired in 2013 was $489,904 which consisted of 6.27 acres in Guangdong Province, the PRC and the lease expires in 2023.

F - 31

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.

LAND USE RIGHTS (CONTINUED)

	September 30, 2014			December 31, 2013

Cost	$	64,637,958		$	65,192,615

Less: Accumulated amortization		(5,642,453	)		(4,486,786	)

Net carrying amount	$	58,995,505		$	60,705,829

	Expiry date	Location	Amount
Balance @1.1.2013			$	58,630,950
Additions:
2013	2023	Enping city, Guangdong Province, the P.R.C.		489,904
2013		Land improvement cost incurred		3,914,275
Exchange difference				2,157,486
Balance @12.31.2013			$	65,192,615
Exchange difference				(554,657	)
Balance @9.30.2014			$	64,637,958

Land use rights are amortized on the straight-line basis over their respective lease periods. The lease period of agriculture land is 10 to 60 years. Amortization of land use rights was $395,633 and $405,361 for the three months ended September 30, 2014 and 2013, respectively. Amortization of land use rights was $1,155,667 and $1,173,698 for the nine months ended September 30, 2014 and 2013, respectively.

13.

GOODWILL

Goodwill represents the fair value of the assets acquired the acquisitions over the cost of the assets acquired. It is stated at cost less accumulated impairment losses. Management tests goodwill for impairment on an annual basis or when impairment indicators arise. In these instances, the Company recognizes an impairment loss when it is probable that the estimated cash flows are less than the carrying value of the assets. To date, no such impairment loss has been recorded.

	September 30, 2014		December 31, 2013

Goodwill from acquisition	$	724,940	$	724,940
Less: Accumulated impairment losses		-		-
Net carrying amount	$	724,940	$	724,940

F - 32

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.

PROPRIETARY TECHNOLOGIES

By an agreement dated November 12, 2008, TRW acquired an enzyme technology master license, registered under a Chinese patent, for the manufacturing of livestock feed and bioorganic fertilizer and its related labels for $8,000,000. On March 6, 2012, MEIJI acquired an aromatic-feed formula technology for the production of aromatic cattle for $1,500,000. On October 1, 2013, SIAF was granted a license to exploit sleepy cod breeding technology license for to grow out sleepy cod for $2,270,968 for 50 years. SJAP booked bacterial cellulose technology license and related trademark for $2,119,075 and amortized expenditures for 25 years starting from January 1, 2014.

	September 30, 2014			December 31, 2013

Cost	$	13,865,862		$	13,896,168
Less: Accumulated amortization		(2,278,298	)		(1,814,698	)
Net carrying amount	$	11,587,564		$	12,081,470

Amortization of proprietary technologies was $166,775 and $87,802 for the three months ended September 30, 2014 and 2013, respectively. Amortization of proprietary technologies was $463,600 and $295,759 for the nine months ended September 30, 2014 and 2013, respectively. No impairment of proprietary technologies has been identified for the three months ended and for the nine months ended September 30, 2014 and 2013.

15.

TEMPORARY DEPOSITS PAID TO ENTITIES FOR EQUITY INVESTMENTS IN FUTURE SINO JOINT VENTURE COMPANIES

Intended
unincorporated	Project
investee	engaged		September 30, 2014		December 31, 2013
A	Trade center	*	$	4,086,941	$	4,086,941
A	Seafood center	*		1,032,914		1,032,914
B	Fish farm 2 Gao Qiqiang Aquaculture	*		6,000,000		6,000,000
C	Prawn farm 1	*		14,554,578		14,554,578
D	Prawn farm 2	*		9,877,218		9,877,218
E	Cattle farm 2	*		5,558,057		5,558,057
			$	41,109,708	$	41,109,708

The Company made temporary deposits paid to entities for equity investments in future Sino Joint Venture companies ("SJVCs") engaged in projects development of trade and seafood centers, fish, prawns and cattle farms. Such temporary deposits represented as deposits of the respective consideration required for the purchase of equity stakes of respective future SJVCs. The amounts were classified as temporary because legal procedures of formation of SJVCs have not yet been completed. As of September 30, 2014, the percentages of equity stakes of SFJVCs A (trade and seafood centers), B ( fish farm 2 Gao Qiqiang Aquaculture Farm ), C (prawn farm 1), D (pawn farm 2) and E (cattle farm 2) are 31%, 23%, 56%, 29% and 35% respectively.

* The above amounts were subject to conversion to an additional equity investment in the investees upon the completion of legal procedures of formation of SJVCs.

16.

VARIABLE INTEREST ENTITY

On September 28, 2009, APWAM acquired the PMH’s 45% equity interest in the Sino-Foreign joint venture company, Qinghai Sanjiang A Power Agriculture Co. Limited (“SJAP”), which was incorporated in the P.R.C. Up to September 30, 2014, the Company invested $2,251,359 in this joint venture. SJAP is engaged in its business of the manufacturing of organic fertilizer, livestock feed, and beef cattle and plantation of crops and pastures.

Continuous assessment of the VIE relationship with SJAP

The Company may also have a controlling financial interest in an entity through an arrangement that does not involve voting interests, such as a VIE. The Company evaluates entities deemed to be VIE’s using a risk and reward model to determine whether to consolidate. A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately fewer voting rights.

F - 33

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.

VARIABLE INTEREST ENTITY (CONTINUED)

The Company also quantitatively and qualitatively examined if SJAP is considered a VIE. Qualitative analyses considered the extent to which the nature of its variable interest exposed the Company to losses. For quantitative analyses, the Company also used internal cash flow models to determine if SJAP was a VIE and, if so, whether the Company was the primary beneficiary. The projection of these cash flows and probabilities thereof requires significant managerial judgment because of the inherent limitations that relate to the use of historical data for the projection of future events. On September 30, 2014, the Company evaluated the above VIE testing results and concluded that the Company is the primary beneficiary of SJAP’s expected losses or residual returns and that SJAP qualifies as a VIE of the Company. As result, the Company has consolidated SJAP as a VIE.

The reasons for the changes are as follows:

•Originally, the board of directors of SJAP consisted of 7 members; 3 appointees from Qinghai Sanjiang (one stockholder), 1 from Garwor (one stockholder), and 3 from the Company, such that the Company did not have majority interest represented on the board of directors of SJAP.

•On May 7, 2010, Qinghai Sanjiang sold and transferred its equity interest in SJAP to Garwor. The State Administration for Industry and Commerce of Xining City Government of the P.R.C. approved the sale and transfer.

Consequently Garwor and the Company agreed that the new board of directors of SJAP would consist of 3 members; 1 appointee from Garwor and 2 appointees from the Company, such that the Company now had a majority interest in the board of directors of SJAP. Also, and in accordance with the Company’s Sino Joint Venture Agreement, the Company’s management appointed the chief financial officer of SJAP. As a result, the financial statements of SJAP were included in the consolidated financial statements of the Company. SJAP formed Qinghai Zhong He Meat Products Co., Limited (“QZH”) , with SJAP owning 100% equity interest. Up to September 30, 2014, the SJAP’s total investment in QZH was $487,805. QZH is engaged in its business of the slaughter of cattle.

Continuous assessment of the VIE relationship with QZH

The Company also quantitatively and qualitatively examined if QZH is considered a VIE. Qualitative analyses considered the extent to which the nature of its variable interest exposed the Company to losses. For quantitative analyses, the Company also used internal cash flow models to determine if QZH was a VIE and, if so, whether the Company was the primary beneficiary. The projection of these cash flows and probabilities thereof requires significant managerial judgment because of the inherent limitations that relate to the use of historical data for the projection of future events. On September 30, 2014, the Company evaluated the above VIE testing results and concluded that the Company is the primary beneficiary of QZH’s expected losses or residual returns and that QZH qualifies as a VIE of the Company. As result, the Company has consolidated QZH as a VIE.

SJAP is sole stockholder of QZH and SJAP appointed sole director of QZH. Consequently, the Company indirectly control directorship of QZH, such that the Company now had a majority interest in the directorship of QZH. Also, and in accordance with the Company’s Sino Joint Venture Agreement, the Company’s management appointed the chief financial officer of QZH. As a result, the financial statements of QZH were included in the consolidated financial statements of the Company.

17.

LICENSE RIGHTS

Pursuant to an agreement dated August 1, 2006 between Infinity Environmental Group Limited (“Infinity”) and the Company, the Company was granted an A Power Technology License with the condition that the Company was required to pay the license fee covering 500 units of APM as performance payment to Infinity on or before July 31, 2008. This license allows the Company to develop service, manage and supply A Power Technology Farms in the P.R.C. using the A Power Technology, but subject to a condition that the Company is required to pay a license fee to Infinity once the Company has sold the license to its customer. Under the said license, the Company has the right to authorize developers and/or joint venture partners to develop A Power Technology Farms in the P.R.C. Infinity is a company incorporated in Australia. An impairment loss made for the three months ended and the nine months ended September 30, 2014 and 2013 are $0 and allowance for accumulated impairment losses has been recorded as of September 30, 2014 and December 31, 2013 are $1.

F - 34

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.

OTHER PAYABLES

	September 30, 2014		December 31, 2013

Due to third parties	$	8,258,819	$	4,715,543
Promissory notes issued to third parties		512,751		3,625,000
Due to local government		2,406,143		2,428,243
	$	11,177,713	$	10,768,786

Due to third parties are unsecured, interest free and have no fixed terms of repayment.

19.

CONSTRUCTION CONTRACT

(i)

Costs and estimated earnings in excess of billings on uncompleted contracts

	September 30, 2014			December 31, 2013

Costs	$	19,505,718		$	3,527,975
Estimated earnings		18,642,769			8,538,930
Less: Billings		(36,924,200	)		(11,403,609	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,224,287		$	663,296

(ii)

Billings in excess of costs and estimated earnings on uncompleted contracts

	September 30, 2014			December 31, 2013

Billings	$	33,739,935		$	8,406,900
Less: Costs		(12,992,409	)		(2,179,410	)
Estimated earnings		(17,374,094	)		(3,080,534	)
Billing in excess of costs and estimated earnings on uncompleted contracts	$	3,373,432		$	3,146,956

(iii)

Overall

	September 30, 2014			December 31, 2013

Billings	$	70,664,135		$	19,810,509
Less: Costs		(32,498,127	)		(5,707,385	)
Estimated earnings		(36,016,863	)		(11,619,464	)
Billing in excess of costs and estimated earnings on uncompleted contracts	$	2,149,145		$	2,483,660

F - 35

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20.

SERIES F SHARES MANDATORY REDEMPTION PAYABLE

On August 13, 2014, the Company filed a Certificate of the Designations, Powers, Preferences and Rights of the Series F Non-Convertible Preferred Stock (the “Certificate”) to its Articles of Incorporation, with the Secretary of State of the State of Nevada, setting forth the terms of its Preferred Stock. On June 10, 2014, the Company amended and restated the Certificate to (i) postpone the payment date of the dividend thereunder to May 30, 2015, (ii) to delete a reference to the redemption or declaration of any cash dividend or distribution on any Junior Securities, and (iii) make certain minor corrections to the Certificate. No share of Series F Non-Convertible Preferred Stock was ever issued. The Company believes it to be in the best interests of its shareholders to delay the cash payment until such time as its financial position would enable it to make the payment without harming its ability to develop its business in accordance with management’s plans.

	September 30, 2014		December 31, 2013
Classified as current liabilities
Series F shares mandatory redemption payable	$	3,146,063	$	-

Classified as non-current liabilities
Series F shares mandatory redemption payable		-		3,146,063
	$	3,146,063	$	3,146,063

21.

BORROWINGS

There are no provisions in the Company’s bank borrowings and long term debts that would accelerate repayment of debt as a result of a change in credit ratings or a material adverse change in the Company’s business. Under certain agreements, the Company has the option to retire debt prior to maturity, either at par or at a premium over par.

Short term bank loan

Interest rate

Term

September 30,
2014

December 31, 2013

Agricultural Development

August 30, 2013 - August 29, 2014

Bank of China

(August 30, 2012 - August 29, 2013)

Huangyuan County Branch,

Xining , Qinghai Province, the P.R.C.

4,100,377

Long term debts

Name of lender	Interest rate	Term	September 30, 2014			December 31, 2013
Gan Guo Village Committee	12.22%	June 2012 - June 2017
Bo Huang Town
Huangyuan County,
Xining City,
Qinghai Province, the P.R.C.			$	178,774		$	180,417

Agricultural Development	6.40%	January 3, 2014 - December 17, 2018
Bank of China
Huangyuan County Branch,
Xining , Qinghai Province, the P.R.C.			$	2,437,836	^*#		-

			$	2,616,610		$	180,417

The above note agreements contained regular provisions requiring timely repayment of principals and accrued interests, payment of default interest in the event of default, and without specific financial covenants. Management of the Company believes the Company is in material compliance with the terms of the loan agreements.

^ personal and corporate guaranteed by third parties.

*secured by land use rights with net carrying amount of $500,712 (12.31.2013: $515,026).

#repayable $325,092, $650,184, $650,184 and $812,376 in 2015, 2016, 2017 and 2018, respectively.

F - 36

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22.

BONDS PAYABLE

On July 1, 2013 , the Company offered a maximum of $21,000,000 of units (“Units”) for an aggregate of 840 Units; each Unit consisting of a $25,000 principal amount promissory note made by the Subscription Agreement and Confidential Private Placement Memorandum with maturity date two years from the Initial Closing Date of the Offering September 30, 2013. The interest rate of 5% is paid annually. Commissions, issue cost and discounts are amortized over 2 years from October 1, 2013.

Terms of the bonds are as follows:

Issue size:			$16,800,000
Number of units offered:			840 units
Number of units issued:			69 units
Principal value per unit:			$25,000 per unit
Net payable value /bond:			$20,000 per unit
Discounted value/bond:			$5,000 paid to bond holder
Maturity date:			2 years (September 30, 2015)
Participating interest:			5% per annum
Effective yield:			11.80% per annum

	September 30, 2014		December 31, 2013
Classified as current liabilities
5% Participating zero coupon bonds repayable on September 30, 2015	$	1,725,000	$	-

Classified as non-current liabilities
5 % Participating zero coupon bonds repayable on September 30, 2015		-		1,725,000
	$	1,725,000	$	1,725,000

The Company calculated professional service compensation of $400,000 in respect of bond issue, and recognized $50,000 and $50,000 for the three months ended September 30, 2014 and 2013 and $150,000 and $50,000 for the nine months ended September 30, 2014 and 2013. As of September 30, 2014, the deferred compensation balance was $150,000 and the deferred compensation balance of $150,000 was to be amortized over 9 months beginning on October 1, 2014.

F - 37

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23.

CONVERTIBLE NOTE PAYABLE

On August 29, 2014, the Company completed the closing of a private placement financing transaction with an accredited investor, which purchased a 10.5% Convertible Note (the “Note”) in the aggregate principal amount of up to $33,300,000. The Company received the initial advance of $6,982,667. The Company shall offer investor a discount equal to 25% of the amount of the principal advanced by the investor.

Interest on the note shall accrue on the outstanding principal balance of this Note from August 29, 2014. Interest shall be payable quarterly on the last day of each of March, June, September and December commencing September 30, 2014. provided, however, that note holder may elect to require the Company to issue to the note holder a promissory note in lieu of cash in satisfaction of any interest due and payable at such time. Any interest payment note shall be subject to the same terms as the note. The note has a maturity date of February 28, 2020.

The note is convertible, at the discretion of the note holder, into shares of the Company’s common stock (i) at any time following an Event of Default, or (ii) for a period of thirty (30) calendar days following October 31, 2015 and each anniversary thereof, at an initial conversion price per share of $1.00, subject to adjustment for stock splits, reverse stock splits, stock dividends and other similar transactions and subject to the terms of the note. As long as the note is outstanding, the Investor shall have a right of first refusal, exercisable for thirty (30) calendar days after notice to the note holder, to purchase securities proposed to be offered and sold by the Company.

	September 30, 2014		December 31, 2013

10.5% convertible note of maturity date February 20, 2020	$	6,982,667	$	-

The Company calculated the fair value of the convertible note and the beneficial conversion feature utilizing the Discounted Cash Flows model at the date of the issuance of promissory note. The relative fair values were allocated to the liability and equity components of the debt. Accordingly, a discount was created on the debt and this discount will be amortized to interest expense over the life of the debt. Debt discount amortization as of September 30, 2014 was $18,758.

As of December 31, 2013, there was $0 principal outstanding and accrued interest in the amount of $0 that was owed under the terms of the promissory notes.

As of September 30, 2014, there was $6,982,667 principal outstanding and accrued interest in the amount of $61,098 that was owed under the terms of the promissory notes.

The above note agreement contained regular provisions requiring timely repayment of principals and accrued interests, payment of default interest in the event of default, default and optional conversion and without specific financial covenants. Management of the Company believe the Company is in material compliance with the terms of the convertible note agreement.

The Company calculated professional service compensation of $1,500,000 in respect of convertible note issue, and recognized $0, $0, $0 and $0 for the three months ended and the nine month ended September 30, 2014 and 2013. As of September 30, 2014, the deferred compensation balance was $1,500,000 and the deferred compensation balance of $1,500,000 was to be amortized over 12 months beginning on October 1, 2014.

F - 38

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

24.

SHAREHOLDERS’ EQUITY

The Company’s share capital as of September 30, 2014 and December 31, 2013 shown on the consolidated balance sheet represents the aggregate nominal value of the share capital of the Company as at that date.

On March 22, 2010, the Company designated 100 shares of Series A preferred stock at a par value per share of $0.001. As of the same date, 100 shares of Series A preferred stock were issued at $1 per share for cash in the amount of $100.

The Series A preferred stock:

(i)

does not pay a dividend;

(ii)

votes 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; and

(iii)

ranks senior to common stockholders, holders of Series B convertible preferred stockholders and any other stockholders on liquidation.

The Company has designated 100 shares of Series A preferred stock with 100 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively

The Series B convertible preferred stock:

On March 22, 2010, the Company designated 7,000,000 shares of Series B convertible preferred stock at a par value per share of $0.001. The Series B convertible preferred stock is redeemable, the stockholders are not entitled to receive any dividend and voting rights but rank senior over common stockholders on liquidation, and can convert to common stock on a one for one basis at any time. On June 26, 2010, 7,000,000 shares of common stock were surrendered for cancellation and the Company issued 7,000,000 shares of Series B convertible preferred stock at $1.00 per share. Pursuant to share exchange agreement made as of December 22, 2012, between the Company and a stockholder, Capital Adventure Inc., a holder of 3,000,000 shares of common shares, with the consent of Board of Directors, to exchange for 3,000,000 shares of Series B convertible preferred stock on one-for-one basis. As of December 23, 2012, 3,000,000 shares of Series B convertible preferred stock were issued to Capital Adventure Inc., for the exchange of its holding of 3,000,000 shares of common stocks. As of December 31, 2012, 3,000,000 shares of common stocks were still not returned to the Company. On March 27, 2013, 3,000,000 shares of Series B convertible preferred stock were cancelled.

There were 7,000,000 shares of Series B convertible preferred stock issued and outstanding as of September 30, 2014 and December 31, 2013, respectively.

The Series F Non-Convertible preferred stock:

On August 1, 2012, the Company designated 1,000,000 shares of Series F Non-Convertible Preferred Stock with a par value per share of $0.001.

As originally filed, the certificate of designation of the Series F Non-Convertible Preferred Stock stated that:

(i)

it is not redeemable;

(ii)

except for (iv), with respect to dividend rights, rights on liquidation, winding up and dissolution, it shall rank junior and subordinate to (a) all classes of Common Stock, (b) all other classes of Preferred Stock and (c) any class or series of capital securities of the Company.

(iii)

except for (iv), it shall not entitled to receive any dividend; and

(iv)

on May 30, 2014, the holders of record of shares of Series F Non-Convertible Preferred Stock shall be entitled to a coupon payment directly from the Company at the redemption rate of $3.40 per share for every 100 shares of Common Stock. Upon redemption, the Record Holder shall no longer own any shares of Series F that have been redeemed, and all such redeemed shares shall disappear and no longer exist on the books and records of the Company; redeemed shares of Series F which no longer exist upon redemption shall thereafter be counted toward the authorized but unissued “blank check” preferred stock of the Company.

F - 39

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

24.

SHAREHOLDERS’ EQUITY (CONTINUED)

On August 22, 2012, the Company’s Board of Directors declared that the Company’s stockholders were entitled to receive one share of restricted Series F Non-convertible Preferred Stock for every 100 shares of Common Stock owned by the stockholders as of September 28, 2012, with lesser or greater amounts being rounded up to the nearest 100 shares of Common Stock for purpose of the computing the dividend. The transfer agent of the Company recorded 924,180 shares of Series F Non-Convertible preferred stock on the account. But, the Company did not issue physical shares and only issued coupons to notify respective shareholders on that date. The figure 924,180 was based on numbers of shares of Common Stock as of September 28, 2012 of 91,931,287 shares, calculated at one share of Series F Non-Convertible preferred stock for every 100 shares of Common Stock with decimal number of shares being rounded up to one. The recipients of the coupons were originally entitled to a coupon payment directly from the Company at the redemption rate of $3.40 per share and be payable on May 30, 2014, which date was subsequently postponed to May 30, 2015 (the “Coupon Redemption Date”). Upon the Coupon Redemption Date, holders of the coupon shall be entitled to a lump sum cash payment directly from the Company equal to $3.40 for every coupon then held (the “Redemption”). Upon proper Redemption, the Series F Preferred Stock shall terminate and thereafter cease to exist.

As a result, the issued and outstanding shares of Series F Non-Convertible Preferred Stock as of September 30, 2014 and December 31, 2013 is 0.

Common Stock:

On December 5, 2012, the Company obtained stockholders consent for the approval of an amendment to our articles of incorporation to increase our authorized shares of common stock, par value $0.001 per share (the “Common Stock”), from 100,000,000 to 130,000,000. The board of directors believes that the increase in our authorized Common Stock will provide us with greater flexibility with respect to our capital structure for purposes including additional equity financings and stock based acquisitions. The certificate of amendment effectuating the vote by the shareholders was filed with the State of Nevada on January 24, 2013.

On March 28, 2013, the Company filed a registration statement related to a public offering of Common Stock of the Company for maximum aggregate gross proceeds of $26,250,000 within a period not to exceed 180 days from the date of this registration statement. No Common stock was offered to the public under this registration statement.

On October 4, 2013, the Company obtained stockholder consent for the approval of an amendment to our articles of incorporation to increase our authorized shares of Common Stock from 130,000,000 to 170,000,000. The board of directors believes that the increase in our authorized Common Stock will provide us with greater flexibility with respect to our capital structure for purposes including additional equity financings and stock based acquisitions. The certificate of amendment effectuating the vote by the shareholders was filed with the State of Nevada on November 1, 2013.

During the three months ended September 30, 2013, the Company issued 8,092,730 shares of common stock for $3,327,000 at values ranging from $0.36 to $0.45 per share to settle debts due to third parties. The Company executed several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $160,997 and $641,831 has been credited to consolidated statements of income as other income for the three months ended September 30, 2013 and 2012, respectively; and (ii) 297,209 shares of common stock valued to employees at fair value of $0.45 per share for $133,744 for employee compensation. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance of $0.45 per share.

During the nine months ended September 30, 2013, the Company issued 28,261,707 shares of common stock for $13,782,651 at values ranging from $0.36 to $0.527 per share to settle debts due to third parties. The Company executed several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $1,212,010 and $1,459,343 has been credited to consolidated statements of income as other income for the nine months ended September 30, 2013 and 2012, respectively; and (ii) 297,209 shares of common stock valued to employees at fair value of $0.45 per share for $133,744 for employee compensation. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance of $0.45 per share.

During the three months ended September 30, 2014, the Company issued (i) 5,930,179 shares of common stock for $2,431,374 at values ranging from $0.40 to $0.41 per share to settle debts due to third parties. The Company executed several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $11,885 and $160,997 has been credited to consolidated statements of income as other income for the three months ended September 30, 2014 and 2013, respectively; and (ii) 2,000,000 shares of common stock valued to professionals at fair value of $0.75 per share for $1,500,000 for service compensation. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance ranging from $0.75 per share.

F - 40

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

24.

SHAREHOLDERS’ EQUITY (CONTINUED)

During the nine months ended September 30, 2014, the Company issued (i) 20,142,617 shares of common stock for $12,006,374 at values ranging from $0.40 to $0.55 per share to settle debts due to third parties. The Company executed several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $253,278 and $1,212,010 has been credited to consolidated statements of income as other income for the nine months ended September 30, 2014 and 2013, respectively; (ii) 1,292,620 shares of common stock valued to employees at fair value of $0.43 per share for $555,827 for employee compensation. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance of $0.43 per share; and (iii) 3,160,764 shares of common stock valued to professionals at fair value ranging from $0.40 to $0.75 per share for $1,964,306 for service compensation. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance ranging from $0.40 to $0.75 per share.

The Company has common stock of 168,128,223 and 137,602,043 shares issued and 167,128,223 and 137,602,043 outstanding as of September 30, 2014 and December 31, 2013, respectively.

25.

OBLIGATION UNDER OPERATING LEASES

The Company leases (i) 2,178 square feet of agriculture space used for offices for a monthly rent of $634 in Enping City, Guangdong Province, P.R.C., its lease expiring on March 31, 2017; (ii) 5,081 square feet of office space in Guangzhou City, Guangdong Province, P.R.C. for a monthly rent of $12,733, its lease expiring on July 8, 2016; and (iii) 1,555 square feet of staff quarters in Linli District, Hunan Province, P.R.C. for a monthly rent of $163, its lease expiring on May 1, 2016.

Lease expense was $40,591 and $38,002 for the three months ended September 30, 2014 and 2013, respectively. Lease expense was $118,709 and $114,006 for the nine months ended September 30, 2014 and 2013, respectively. The future minimum lease payments as of September 30, 2014, are as follows:

	$

Year ended December 31, 2014		40,591
Year ended December 31, 2015		162,364
Thereafter		86,561
		289,516

26.

STOCK BASED COMPENSATION

On July 2, 2013, the Company issued employees a total of 297,209 shares of common stock valued at fair value of range from $0.45 per share for services rendered to the Company. The fair value of the common stock issued was determined by using the trading price of the Company’s common stock on the date of issuance of $0.45 per share.

On April 25, 2014, the Company issued employees a total of 1,292,620 shares of common stock valued at fair value of range from $0.43 per share for services rendered to the Company. The fair values of the common stock issued were determined by using the trading price of the Company’s common stock on the date of issuance of $0.43 per share.

On June 16, 2014, the Company issued professionals a total of 1,160,764 shares of common stock valued at fair value of range from $0.40 per share for services rendered to the Company. The fair values of the common stock issued were determined by using the trading price of the Company’s common stock on the date of issuance of $0.40 per share.

On September 16, 2014, the Company issued professionals a total of 2,000,000 shares of common stock valued at fair value of range from $0.75 per share for services rendered to the Company. The fair values of the common stock issued were determined by using the trading price of the Company’s common stock on the date of issuance of $0.75 per share.

The Company calculated stock based compensation of $2,653,876 and $405,544, and recognized $288,469, and $90,600, $355,341 and $271,800 for the three months ended September 30, 2014 and 2013 and for the nine months ended September 30, 2014 and 2013.

As of September 30, 2014, the deferred compensation balance for staff was $765,009 and was to be amortized over 9 months beginning on October 30, 2014 and the deferred compensation balance for professional services was $1,500,000 and was to be amortized over 12 months beginning on October 30, 2014.

F - 41

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

27.

CONTINGENCIES

As of September 30, 2014 and December 31, 2013, the Company did not have any pending claims, charges, or litigation that it expects would have a material adverse effect on its consolidated balance sheets, consolidated statements of income and other comprehensive income or cash flows.

28.

GAIN ON EXTINGUISHMENT OF DEBTS

The Company executed several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $33,693 and $160,997 has been credited to consolidated statements of income as other income for the three months ended September 30, 2014 and 2013, respectively. Any excess of the fair value of the shares over the carrying cost of the debt has been reported as a gain on the extinguishment of debts of $275,086 and $1,212,010 has been credited to consolidated statements of income as other income for the nine months ended September 30, 2014 and 2013, respectively.

	Three months ended			Three months ended
	September 30, 2014			September 30, 2013

Total amounts of debts to be settled		2,431,374			3,327,000
Less: Aggregate market fair value of 5,930,179 (2013: 8,092,730) shares of common stock in exchange of the above debts for debts extinguishment		(2,397,681	)		(3,166,003	)
Gain on extinguishment of debts		33,693			160,997

	Nine months ended			Nine months ended
	September 30, 2014			September 30, 2013

Total amounts of debts to be settled		12,006,374			13,782,651
Less: Aggregate market fair value of 20,142,617 (2013: 28,261,707) shares of common stock in exchange of the above debts for debts extinguishment		(11,731,288	)		(12,570,641	)
Gain on extinguishment of debts		275,086			1,212,010

29.

RELATED PARTY TRANSACTIONS

In addition to the transactions and balances as disclosed elsewhere in these consolidated financial statements, during the nine months ended September 30, 2014 and 2013, the Company had the following significant related party transactions:-

Name of related party		Nature of transactions

Mr. Solomon Yip Kun Lee, Chairman		Included in due to a director, due to Mr. Solomon Yip Kun Lee is $4,244,519 and $1,793,768 as of September 30, 2014 and December 31, 2013, respectively. The amounts are unsecured, interest free and have no fixed term of repayment.

F - 42

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflects the potential dilution of securities by including other potential common stock, including convertible preferred stock, stock options and warrants, in the weighted average number of common shares outstanding for the year, if dilutive. The numerators and denominators used in the computations of basic and dilutive earnings per share are presented in the following table:

	Three months ended September 30, 2014		Three months ended September 30, 2013
BASIC
Numerator for basic earnings per share attributable to the Company’s common stockholders:
Net income used in computing basic earnings per share	$	24,501,862	$	18,752,774
Basic earnings per share	$	0.15	$	0.15

Basic weighted average shares outstanding		163,046,209		122,057,655

	Three months ended September 30,2014		Three months ended September 30, 2013

DILUTED
Numerator for basic earnings per share attributable to the Company’s common stockholders:
Net income used in computing basic earnings per share	$	24,501,862	$	18,752,774
Diluted earnings per share	$	0.14	$	0.15

Basic weighted average shares outstanding		163,046,209		122,057,655
Add: weight average Series B Convertible preferred shares outstanding		7,000,000		7,,000,000
Add: weight average Convertible note outstanding		-		-
Diluted weighted average shares outstanding		170,046,209		129,057,655

	Nine months ended September 30, 2014		Nine months ended September 30, 2013
BASIC
Numerator for basic earnings per share attributable to the Company’s common stockholders:
Net income used in computing basic earnings per share	$	68,376,819	$	49,462,486
Basic earnings per share	$	0.45	$	0.43

Basic weighted average shares outstanding		153,109,854		115,580,104

F - 43

SINO AGRO FOOD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Nine months ended September 30,2014		Nine months ended September 30,2013

DILUTED
Numerator for basic earnings per share attributable to the Company’s common stockholders:
Net income used in computing basic earnings per share	$	68,376,819	$	49,462,486
Diluted earnings per share	$	0.43	$	0.40

Basic weighted average shares outstanding		153,109,854		115,580,104
Add: weight average Series B Convertible preferred shares outstanding		7,000,000		7,945,055
Add: weight average Convertible note outstanding		-		-
Diluted weighted average shares outstanding		160,109,854		123,525,159

For the nine months ended September 30, 2014 and 2013, full dilution effect of convertible note of $6,982,667 (12.31.2013: $0), was not taken into account for calculation of the diluted earnings per share because convertible note holder is restricted to exercise shares before October 1, 2015 under terms of convertible note agreement.

31.

SUBSEQUENT EVENTS

Subsequent to the balance sheet date, the board of directors and the holders of a majority of the voting power of our stockholders approved an amendment to our articles of incorporation to increase our authorized shares of Common Stock from 170,000,000 to 225,000,000.

F - 44

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (the “Form 10-Q”) contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Forward-looking statements can be identified by the use of forward-looking terminology, such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,” “intends,” or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties These statements reflect management’s current beliefs and are based on information now available to it. Accordingly, these statements are subject to certain risks, uncertainties and contingencies that could cause the Company’s actual results, performance or achievements in 2014 and beyond to differ materially from those expressed in, or implied by, such statements. Such statements, include, but are not limited to, statements contained in this Form 10-Q relating to the Company’s business, financial performance, business strategy, recently announced transactions and capital outlook. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: a continued decline in general economic conditions nationally and internationally; decreased demand for our products and services; market acceptance of our products; the impact of any litigation or infringement actions brought against us; competition from other providers and products; the inability to raise capital to fund continuing operations; changes in government regulation; the ability to complete customer transactions, and other factors relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Readers of this Form 10-Q should not place undue reliance on any forward-looking statements. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.

You should read the following discussion and analysis of the financial condition and results of operations of the Company together with the financial statements and the related notes presented in Item 1 of this Form 10-Q.

Description and interpretation and clarification of business category on the consolidated results of the operations

The Company’s strategy is to manage and operate its businesses under six (6) business divisions or units on a standalone basis, namely:

Fishery Division;

Plantation Division;

Beef Division;

Cattle Farm Division;

Organic Fertilizer Division; and

Corporate & Others Division

A summary of each business division is described below:

Fishery Division refers to the operations of Capital Award Inc. (sometimes referred to as “CA”) covering its engineering, technology and consulting service management of fishery farms and seafood sales operations and marketing, where;

Capital Award generates revenue as being the sole marketing, sales and distribution agent of the fishery farms (covering both of the fish, prawns and eel farms) developed by Capital Award in China as follows:

(A). Engineering and Technology Services via Consulting and Service Contracts (“CSC’s”) for the development, construction, and supply of plant and equipment, and management of fishery (and prawn or shrimp) farms and related business operations.

(B). Seafood Sales

Capital Award generates revenue as the sole marketing, sales and distribution agent for the fish and prawn farms developed by Capital Award in China as follows:

(1) Sales to Sino Foreign Joint Venture Companies (“SFJVC”) and sales derived from the SFJVC (currently, only the JFD subsidiary is a SFJVC) are being consolidated into Tri-way Industries Ltd. (Hong Kong) (“TRW”) as one entity.

(2) Sales to and sales derived from un-incorporated companies (covering EBAPCD and ZSAPP) are accounted for independently as follows:

CA and EBAPCD: (a) CA purchases prawn fingerling and feed stocks from third party suppliers and resells them to EBAPCD at variable small profit margins and (b) CA purchases matured prawns from EBAPCD and sells them to third parties (wholesale markets)

CA and ZSAPP: (a) CA earns commission from the sale of prawn fingerlings that are sold by ZSAPP to third parties, and in this respect ZSAPP produces its own prawn fingerlings as compared to CA purchasing them for EBAPCD, as described above, and (b) CA purchases matured prawns from ZSAPP and sells to third parties (wholesale markets)

Plantation Division refers to the operations of Jiangmen City Heng Sheng Tai Agriculture Development Co. Ltd. (“JHST”) in the HU Plantation business where dragon fruit flowers (dried and fresh) and immortal vegetables are sold to wholesale and retail markets JHST’s financial statements are consolidated into the financial statements of Macau EIJI Company Ltd. (“MEIJI”) as one entity.

Cattle Farm Division refers to the operations of Cattle farm (1) under Jiangmen City Hang Mei Cattle Farm Development Co. Ltd (“JHMC”) where Cattle are sold live to third party live-stock wholesalers who are selling them mainly in Guangzhou and Beijing live-stock wholesale markets. The financial statements of JHMC are consolidated into MEIJI as one entity along with MEIJI’s operation in the consulting and service for development of other cattle farms (i.e. Cattle Farm 2) or related projects.

Organic Fertilizer Division refers to (i) the operation of SJAP in manufacturing and sales of organic fertilizer, bulk livestock feed, concentrated livestock feed, and the sales of live cattle inclusive (a): Cattle that are not being slaughtered in our own slaughterhouse operated by Qinghai Zhong He Meat Products Co., Limited (“QZH”) are sold live to third party live-stock wholesalers and (b): Cattle that are sold to QZH and being slaughtered and de-boned and packed by QZH; and the sales of meats de-boned and packed by QZH that are sold to various meat distributors, wholesalers and super market chains and our own retail butcher stores. (ii) The operation of Hunan Shenghua A Power Agriculture Co. Ltd. (“HSA”) in manufacturing and sales of organic fertilizer. Also QZH is a fully owned subsidiary of SJAP as such financial statements of these three companies (SJAP, QZH and HSA) are being consolidated into APWAM as one entity.

Corporate &Others Division refers to the business operations of Sino Agro Food, Inc., including import/export business and consulting and service operations provided to projects that are not included in the above categories, and not limited to corporate affairs.

MD & A OF CONSOLIDATED RESULTS OF OPERATIONS

Part A. Unaudited Income Statements of Consolidated Results of Operations for three months ended September 30, 2014 compared to the three months ended September 30, 2013.

A (1) Income Statements (Unaudited)

In $	Three months ended			Three months ended			Difference			Note
	September 30, 2014			September 30, 2013
Revenue		107,220,059			70,707,697			36,512,362			1
Consulting, services, commission and management fee		25,048,644			9,040,422			16,008,222			1.1
Sale of goods		82,171,415			61,667,275			20,504,140			1.2
Cost of goods sold and services		72,723,395			44,584,572			28,138,823			2
Consulting, services, commission and management fee		13,601,869			3,269,035			10,332,834			2.1
Sale of goods		59,121,526			41,315,537			17,805,989			2.2
Gross Profit		34,496,664			26,123,125			8,373,539			3
Consulting, services, commission and management fee		11,446,775			5,771,387			5,675,388			3.1
Sale of goods		23,049,889			20,351,738			2,698,151			3.2
Other income (expenses)		(17,599	)		259,366			(276,965	)
General and administrative expenses		(3,681,580	)		(2,026,989	)		(1,654,591	)		4
Net income		30,884,556			24,355,502			6,529,054
EBITDA		32,347,402			25,491,778			6,855,624
Depreciation and amortization (D&A)		(1,199,182	)		(849,900	)		(349,282	)		5
EBIT		31,148,220			24,641,878			6,506,342
Net Interest		(263,664	)		(286,376	)		22,712
Tax		-			-			-
Net Income		30,884,556			24,355,502			6,529,054
Non - controlling interest		(6,382,694	)		(5,602,728	)		(779,966	)		7
Net income to SIAF and subsidiaries		24,501,862			18,752,774			5,749,088
Weighted average number of shares outstanding
- Basic		163,046,209			122,057,655			40,988,554
- Diluted		170,046,209			129,057,655			40,988,554
Earnings Per Share (EPS)											8
- Basic		0.15			0.15			-
- Diluted		0.14			0.15			-0.01

This Part A discusses and analyzes certain items (marked with notes) that we believe assist stakeholders in obtaining a better understanding on the Company’s results of operations and financial condition:

Notes to Table A.1’s 1, 2 & 3:

(A): Information of Note (1, 2 & 3) Sales, cost of sales and gross profit and analysis:

The Company’s revenues were generated from (A) Sale of Goods and (B) Consulting and Services provided in project and business developments covering engineering, construction, supervision, training, management and technology.

Table (A.2). Below shows segmental break-down figures of Sales, Cost of Goods Sold, and Gross Profits for the three months ended September 30, 2014 (Q3 2014) and the three months ended September 30, 2013 (Q3 2013).

In US$		Sales of goods				Cost of Goods sold				Sales of Goods' Gross profit
		2014Q3		2013Q3		2014Q3		2013Q3		2014Q3		2013Q3

SJAP	Sales of live cattle		17,599,116		8,164,934		12,572,988		6,112,264		5,026,129		2,052,670
	Sales of feedstock
	Bulk Livestock feed		1,101,471		2,835,561		528,982		1,235,016		572,488		1,600,545
	Concentrate livestock feed		3,095,750		3,490,520		1,957,093		2,195,694		1,138,656		1,294,826
	Sales of fertilizer		440,588		2,839,360		211,593		1,354,353		228,995		1,485,007
	SJAP Total		22,236,925		17,330,375		15,270,656		10,897,327		6,966,269		6,433,048
	* QZH’s (Slaughter & Deboning operation)		341,336		-		192,938		-		148,398		-
	** QZH's (Deboning operation)
	on cattle & Lamb locally supplied		3,595,291		-		2,376,128		-		1,219,163		-
	on imported beef and mutton		1,732,423		-		950,900		-		781,523		-
	QZH Total		5,669,050		-		3,519,966		-		2,149,084		-
HSA	Sales of Organic fertilizer		1,095,621		2,187,164		813,487		1,410,019		282,134		777,145
	Sales of Organic Mixed Fertilizer		4,698,541		917,414		3,885,054		527,841		813,487		389,573
	HSA Total		5,794,162		3,104,578		4,698,541		1,937,860		1,095,621		1,166,718
	SJAP's & HSA/Organic fertilizer total		33,700,137		20,434,953		23,489,163		12,835,187		10,210,974		7,599,766
JHST	Sales of Fresh HU Flowers		460,176		1,096,411		149,494.47		387,663		310,682		708,748
	Sales of Dried HU Flowers		4,237,312		9,278,549		1,183,295		4,385,131		3,054,017		4,893,418
	Sales of Dried Immortal vegetables		1,116,179		-		371,951		-		744,227		-
	Sales of Other Value added products		-		160,000		-		60,000		-		100,000
	JHST/Plantation Total		5,813,667		10,534,960		1,704,741		4,832,794		4,108,926		5,702,166
CA	Sales of
	Fish (Sleepy cods)		1,533,699		10,014,364		1,200,856		8,467,372		332,843		1,546,992
	Eels		14,406,907		8,406,475		9,035,340		4,581,674		5,371,568		3,824,801
	Prawns		6,790,885		1,177,443		5,699,673		1,159,135		1,091,213		18,308
	CA/ Fishery total		22,731,491		19,598,282		15,935,868		14,208,181		6,795,623		5,390,101
MEIJI
	Sale of Live cattle (Aromatic)		6,814,990		4,639,397		6,443,072		3,974,942		371,918		664,455
	MEIJI / Cattle farm Total		6,814,990		4,639,397		6,443,072		3,974,942		371,918		664,455
SIAF
	Sales of goods through trading/import/export activities
	on seafood		11,757,113		6,459,683		10,632,839		5,464,433		1,124,274		995,250
	on imported beef and mutton		1,354,017		-		915,843		-		438,174		-
	SIAF/ Others & Corporate total		13,111,130		6,459,683		11,548,682		5,464,433		1,562,448		995,250

Group Total			82,171,415		61,667,275		59,121,526		41,315,537		23,049,889		20,351,738

Table (A.3) below shows the percentage of gross profit the three months ended September 30, 2014 and the three months ended September 30, 2013.

Revenues (sale of goods))

Group’s revenues generated from sale of goods increased by $20,504,140 or 33% from $61,667,275 for Q3 2013 to $82,171,415 for Q3 2014. The increase was primarily due to increase of revenues from fishery, organic fertilizer, cattle farms and corporate sectors collectively.

Fishery: Revenue from fishery increased by $3,133,209 or 16% from $19,598,282 for Q3 2013 to $22,731,491 for Q3 2014. The increase in fishery was primarily due to our increase in productivities and in term increasing the sale of eels and prawns.

Plantation: Revenue from our plantation decreased by $4,721,293 or 45% from $10,534,960 for Q32013 to $5,813,667 for Q3 2014. The decrease was primarily due to this year’s wet season affecting the yields of the regional growers who we collected flowers from in past that we did not buy any fresh flowers from them for drying this quarter thus in term lowering our overall sales of dried flowers.

Organic fertilizer: Revenue from organic fertilizer increased by $13,265,184 or 65% from $20,434,953 for Q3 2013 to $33,700,137 for Q3 2014.The increase was primarily due to the increase of SJAP’s sales of live cattle, HSA’s increase of sales of fertilize and QZH’s increase of sale from slaughter and deboning operation. More details and information are presented in a subsequent section.

Cattle farm: Revenue from cattle farm increased by $2,175,593 or 47% from $4,639,397 for Q3 2013 to $6,814,990 for Q3 2014. The increase was primarily due to the combination of increase of cattle being grown in the farm and increase of number of cattle being fattened by sub-contracted growers. More details and information are presented in a subsequent section.

Corporate: Revenue from the corporate increased by $6,651,447 or 103% from $6,459,683 to $13,111,130 for Q3 2014. The increase was primarily due to more imported seafood being marketed. More details and information are presented in a subsequent section.

Cost of Goods Sold

Cost of goods sold increased by $17,805,989 or 43% from $41,315,537 for Q3 2013 to $59,121,526 for Q3 2014. The increase was primarily due to increase of cost of goods sold from fishery, organic fertilizer, cattle farms and corporate sectors collectively.

Fishery: Cost of goods sold from fishery increased by $1,727,687 or 12% from $14,208,181 for Q3 2013 to $15,935,868 for Q3 2014.The increase in cost of goods from fishery was primarily due to the increase in productivities and in term cost of production of eels and prawns.

Plantation: Cost of goods sold from plantation decreased by $3,128,053 or 65% from $4,832,794 for Q3 2013 to $1,704,741 for Q3 2014. The decrease was primarily due to the fact that there were no dried flowers processed from fresh flowers brought from and supplied by other regional growers due to short supply caused by the wet-season. More details and information are presented in a subsequent section.

Organic fertilizer: Cost of goods sold from organic fertilizer increased by $10,653,976 or 83% from $12,835,187 for Q3 2013 to $23,489,163 for Q3 2014. The corresponding increase was primarily due to the increase of cost of production in SJAP’s increase of productivities of live cattle, HSA’s increased productivities of fertilizer and QZH’s increase of cost of sales from slaughter and deboning operations.

Cattle farm: Cost of goods sold from cattle farm increased by $2,468,130 or 62% from $3,974,942 for Q3 2013 to $6,443,072 for Q3 2014. The increase was primarily due to the increase of sales of fattened cattle from sub-contracted growers (i.e. trading of cattle). More details and information are presented in a subsequent section.

Corporate: Cost of goods sold from corporate increased by $6,084,249 or 111% from $5,464,433 for Q3 2013 to $11,548,682 for Q3 2014. The increase was primarily due the corresponding increase of sales.

Note (3): Gross Profit (sale of goods)

Gross profit generated from goods sold increased by $2,698,151 or 13% from $20,351,738 for Q3 2013 to $23,049,889 for Q3 2014. The increase was primarily due to increase of gross profit from organic fertilizer by $2,611,208. Gross profit from organic fertilizer of $10,210,974 (Q3 2013: $7,599,766 attributed to 44% (Q3 2013: 37%) of total gross profit of $23,049,888 (Q3 2013: $20,351,738.).

Fishery: Gross profit from fishery increased by $1,405,522 or 26% from $5,390,101 for Q3 2013 to $6,795,623 for Q3 2014. Gross profit derived from sale of eels and prawns were $5,371,568 and $1,091,213 respectively in Q3 2014 compared to $3,824,801 and $18,308 respectively in Q3 2013.

Plantation: Gross profit from our plantation decreased by $1,593,240 from $5,702,166 for the three months ended Sept. 30,2013 to $4,108,926 for the three months ended Sept. 302014. The decrease was primarily due to this year’s wet season affecting the yields of the regional growers who we collected flowers from in past that we didn’t buy any fresh flowers from them for drying this quarter thus in term lowering our overall sales of dried flowers.

Organic fertilizer: Gross profit from organic fertilizer increased by $2,611,208 or 34% from $7,599,766 for Q3 2013 to $10,210,974 for Q3 2014. The increase was primarily due to the increase of SJAP’s sales of live cattle, HSA’s increase of sales of fertilizer QZH’s increase of gross profit from slaughter and deboning operations.

Cattle farm: Gross profit from cattle decreased by $292,537 from $664,455 for Q3 2013 to $371,918 for Q3 2014. The decrease was primarily due to the increase of trading of cattle from contracted growers at Changchun Village committee were at lower margin compared to the cattle grown by own farms.

Corporate: Gross profit from the corporate increased by $567,198 or 57% from $995,250 for Q3 2013 to $1,562,448 for Q3 2014. The increase was primarily due to the more category of seafood being marketed in Q3 2014 and the overall cost saving on air-flights charges, packaging materials and lower mortality of live seafood upon arrival of sales destinations. More details and information are presented in a subsequent section.

Table A.4. : (below) shows the itemized sales of goods and related cost of sales in quantity and unit price for the three months ended September 30, 2014 (Q3 2014) and the three months ended September 30, 2013 (Q3 2013).

Description of items

2014Q3

2013Q3

Cattle Operation

Difference

Production and Sales of live cattle

Head

4,777

2,600

2,177

A.4.1

Average Unit sales price

$/head

3,684

3,140

544

Unit cost price

$/head

2,632

2,351

281

Production and sales of feedstock

Bulk Livestock feed

6,048

18,162

-12,114

A.4.2

Average Unit sales price

$/MT

182

156

Unit cost price

$/MT

Concentrated livestock feed

7,625

8,429

-804

A.4.3

Average Unit sales price

$/MT

406

414

-8

Unit cost price

$/MT

257

260

-4

Production and sales of fertilizer

2,348

16,366

-14,018

A.4.4

Average unit sales price

$/MT

188

173

Unit cost price

$/MT

* QZH (Slaughter & De-boning operation)

Slaughter operation

Slaughter of cattle

Head

845

A.4.5

Service fee

$/Head

Sales of associated products

Pieces

999

Average Unit sales price

$/Piece

335

Unit cost price

$/Piece

193

De-boning & Packaging activities

A. 4.6.

From Cattle supplied locally

De-boned Meats

286

Average Unit sales price

$/MT

12,591

Unit cost price

$/MT

8,321

From imported beef

Average Unit sales price

$/MT

8,722

Unit cost price

$/MT

4,610

From imported lamb

121

Average of sales price

$/MT

8,263

Average of cost price

$/MT

4,659

HSA

Fertilizer and Cattle operation

A. 4.7.

Organic Fertilizer

4,080

6,378

-2,298

Average Unit sales price

$/MT

264

343

-79

Unit cost price

$/MT

198

221

-23

Organic Mixed Fertilizer

10,383

2,200

8,183

A. 4.8.

Average Unit sales price

$/MT

453

417

Unit cost price

$/MT

374

240

134

Retailing packed fertilizer (for super market sales)

A. 4.8.a

Average Unit sales price

$/MT

927

Unit cost price

$/MT

343

Description of items

2014Q3

2013Q3

JHST

Plantation of HU Flowers and Immortal vegetables

Fresh HU Flowers

Pieces

3,045,250

7,309,407

-4,264,157

A.4.9

Average Unit sales price

$/Pieces

0.15

0.00

Unit cost price

$/Pieces

0.05

Dried HU Flowers

307

757

-450

A.4.10

Average Unit sales price

$/MT

13,802

12,257

1,545

Unit cost price

$/MT

3,854

5,793

-1,938

Dried Immortal vegetables

A.4.11

Average Unit sales price

$/MT

74,412

Unit cost price

$/MT

24,797

Other Value added products

Pieces

20,000.00

-20,000

A.4.12

Average Unit sales price

$/Pieces

-8

Unit cost prices

$/Pieces

-3

Production and sale (inclusive of contracted farms) of live

Fish (Sleepy cods)

629

-531

A.4.13

Average Unit sales price

$/MT

15,650

15,921

-271

Unit cost prices

$/MT

12,254

13,462

-1,208

Eels

577

446

131

A.4.14

Average Unit sales price

$/MT

24,958

18,850

6,108

Unit cost price

$/MT

15,652

10,274

5,379

Prawns

483

112

371

A.4.15

Average Unit sales price

$/MT

14,060

10,513

3,547

Unit cost price

$/MT

11,801

10,349

1,451

MEIJI

Production and sale of Live cattle (Aromatic)

Head

2,846

1,500

1,346

A.4.16

Average Unit sales price

$/head

2,395

3,093

-698

Unit cost prices

$/head

2,264

2,650

-386

SIAF

Seafood trading from imports

Mixed seafood

728

450

278

A.4.17

Average of sales price

$/MT

16,150

14,355

1,795

Average of cost prices

$/MT

14,606

12,143

2,462

Beef & Lambs trading from imports

206

Average of sales price

$/MT

6,573

Average of cost price

$/MT

4,446

Notes to Table A.4.

A.4.1: There were 4,777 head of live cattle at an average weight of 727 Kg / head sold in Q3 2014 compared to 2,600 head at an average weight of 650 Kg / head sold in Q3 2013 representing an increase of 2,177 head as SJAP increases its number of cooperative farms from 2013’s 10 to its present number of 22. Unit sales prices of live cattle as an average has increased marginally from RMB29.5 / Kg (or $4.80 / Kg) in Q3 2013 to RMB31 / Kg (or $5.04 / Kg) in Q3 2014.

A.4.2: The decrease in sales of the Bulk livestock feed by 12,114 MT between Q3 2013’s 18,162 MT and Q3 2014’s 6,048 MT was due primarily to the decrease of external sales of Bulk livestock feed to non-cooperative regional farmers due mainly the good season of the Quarter, most of the non-cooperative farmers have plenty of feed.

A.4.3: The decrease in sales of the concentrated livestock feed by 804 MT between Q3 2013’s 8,429 MT and Q3 2014’s 7,625 MT was due primarily to the decrease of external sales to non-cooperative farmers for the similar reason explained above.

A.4.4: The decrease of sales in SJAP’s fertilizer was by 14,108 MT between Q3 2014’s 2,348 MT and Q3 2013’s 16,366 MT due mainly to the fact that SJAP is no longer needed to supply HSA with fertilizer because HSA has established and been operating its second fertilizer process plant in the Quarter.

A.4.5: Qinghai Zhong He Meat Products Co., Limited (QZH) is the fully owned subsidiary of SJAP formed early in the year to operate the Slaughterhouse and De-boning operational division of SJAP. During the quarter, it has slaughtered 845 head of cattle supplied by SJAP’s farm and external non-cooperative farmers collectively, part of which were de-boned, packed and sold (285 MT) of meat at an average price of RMB 77 / Kg (or $12.52 / Kg) with average cost at RMB51 / Kg (or $8.3 / Kg). Relatively, this shows that our locally produced beef are selling and costing at higher prices than the imported beef (see below A.4.6).However, the fact is that the local China domestic markets are willing to pay higher prices for local produced beef. Tesco sales are the evidence of that, as we are selling more SJAP produced beef than imported beef.

A.4.6: Also during the quarter, there were 84 MT of quarter- cut beef imported from Australia that were deboned, packed and sold at an average of RMB54 / Kg (or $8.8 / Kg) with cost at an average of RMB28.65 / Kg (or $4.66 / Kg) excluding import duties, tax and affiliated cost that was averaging 30% of cost, making total cost at RMB 37.25 / Kg (or $6.06 / Kg). At the same time, there were 121 MT of imported Mutton being packed, deboned and sold during the Quarter at an average of RMB50 / Kg (or $ 8.13 / Kg) at CIF cost of RMB28.65 / Kg (or $4.66 / Kg) plus import duties, taxes and associated charges at RMB 8.6 / Kg (or $1.4 / Kg) yielding gross profit margin at 25.5 %, on average. Nevertheless, prices of the imported beef and lamb are more accepted by the catering traders and the wholesalers compared to the domestic retail market’s preference for SJAP’s local produced beef.

A.4.7/8: HSA increased its total sales of fertilizer by 5,885 MT to 14,463 in Q3 2014 compared to the 8,578 MT in Q3 2013.That is a growth of 68.6% having completed and operating its second production and fermentation plants and facilities during the quarter. Sales prices of the Mixed Organic Fertilizer increased marginally by 8.6% whereas related cost of production increased by over 55.8% mainly due to the raw material used to manufacture this fertilizer having been changed mainly to chicken manure that costs much higher than sheep manure, but more effective when the fertilizer is applied in the lakes increasing the growth of microorganisms at each depth level of the water thus providing better growth rates for the fish growing in the lakes.

A.4.9, 10, 11, 12: This season, the Guangdong district experienced a very wet season from April to August with constant rain falling practically every day that affected and delayed the growing of HU Flowers and immortal vegetables. As a result, most of the regional growers could not supply fresh flowers to us during the quarter, and, as such, most of the quarterly sales were from our own farm resulting from our earlier year’s preparation and work to improve the plantation, JHST harvested just under 20 million pieces of flowers and sold over 307 MT of dried HU flowers at an average price of $13,802 / MT. No further harvest is expected during the 4^th quarter like in the previous year after having been affected by the wet-season.

JHST dried and sold over 15 MT of Immortal Vegetables during the Quarter harvested from 70 Mu of plantation at prices same as in last quarter. JHST intends to further develop more land to grow more Immortal Vegetable with the coming Quarter to build up total cultivated area to 100 Mu from its existing 70 Mu.

A.4.13, 14, 15: This Quarter we sold many larger eels at an average of over 2.8 Kg / eel to Q2 2014’s average of 1.3 Kg / eel enhancing better sales price averaging at RMB150 / Kg to Q2 2014’s RMB116 / Kg for smaller eels. (In this respect sales of eels were generated collectively from our own FF(1), unincorporated PF(2) & FF(2) and few other sub-contracted growers).

Whereas, total prawn sales were generated from our FF(1), and unincorporated PF(1), PF(2) and other sub-contracted growers collectively. Effective Gross Profit margin in our own farms and unincorporated farms for eel production is at an average of 60% and for prawns production the margin is being kept at above 75% but varies from other sub-contracted growers. (See more details in later sections)

A.4.16: MEIJI’s sales revenue consists of the combination of trading of cattle from sub-contracted growers and the consolidated revenue from CF1. Since the gross profit margin on trading is low, the overall GP% of MEIJI is reduced, and in this respect, CF1and CF2 are achieving an average above 15% on its cattle rearing operation, which is lower than Q2 2014’s 20% due to the growth rate and the number of Southern Yellow cattle grown this Quarter were lower than the Simmental cattle grown in earlier Quarters.

A.4.17: The Corporate sector’s imported Sales increased from more varieties of seafood being imported from Madagascar in coordination with more markets being developed during the quarter. At the same time, sales are being developed for imported beef and lamb from Australia creating additional revenues. Both items are maintaining Gross Profit margins at an average of 11%.

Notes to Table A (1) Note (1.1, 2.1 and 3.1)

Table (A.5) below shows the revenue, cost of services and gross profit generated from Consulting, services, commission and management fee for three months ended September 30,2014 (Q2 2014) and the three months ended September 30, 2013(Q2 2013).

	2014Q3		2013Q3		Difference		Description of work
Sales Revenues (Consulting and Services)

CA		24,598,641		6,939,405		17,659,236	Primarily on the Zhongshan new prawn project
SIAF		-		1,934,460		-1,934,460	Restaurant (4,5 & 6) and renovation of Restaurant (1 & 2)
Group Total Revenues		24,598,641		8,873,865		15,724,776
Cost of sales						-
CA		13,601,869		2,703,461		10,898,408
SIAF				565,574		-565,574
Group Total Cost of sales		13,601,869		3,269,035		10,332,834
Gross Profit						-
CA		10,996,772		4,235,944		6,760,828
SIAF		-		1,368,886		-1,368,886
Group Total Gross Profit		10,996,772		5,604,830		5,391,942

Revenues: (consulting, service, commission and management fee)

Revenues increased by $15,724,776 or 177% from $8,873,865 for Q3 2013 to $24,598,641 for Q3 2014. The increase was primarily due to an increase in revenue from the construction and development work done on the New Zhongshan Prawn project of $24,598,641, which contributed 100% of the total increase of revenue of $24,598,641.

CA (Fishery): Revenue from fishery increased by $15,724,776 or 177% from $8,873,865 for Q 32013 to $24,598,641 for Q3 2014.

SIAF (Corporate): Revenue from corporate decreased by $1,934,460 or 100% from $1,934,460 for Q3 2013 to $0 for Q3 2014. The reason for the decrease is because the slow work in progress for the construction of restaurant related work during the quarter.

Cost of services (consulting, service, commission and management fee)

Cost of services for consulting, service, commission and management fee increased by $10,332,834 or 316% from $3,269,035 for Q3 2013 to $13 601,869 for Q3 2014.

CA (Fishery): Cost of services from fishery increased by $10,898,408 or 403% from $2,703,461 for Q3 2013 to $13 601,869 for Q3 2014.

SIAF (Corporate): Cost of services from corporate decreased by $565,574 or 100 % from $565,574 for Q3 2013 to $0 for Q3 2014. The reason for the decrease is because the slow progress for the construction of restaurant related work during the quarter.

Gross profit (consulting, service, commission and management fee)

Gross profit of consulting, service, commission and management fees increased by $5,391,942 or 96% from $5,604,830 for Q3 2013 to $10,996,772 for Q3 2014.

CA (Fishery): Gross profit from fishery increased by $6,760,828 or 160% from $4,235,944 for Q3 2013 to $10,996,772 for Q3 2014.

SIAF (Corporate): Gross profit from corporate decreased by $1,368,886 or 100% from $1,368,886 for Q3 2013 to $0 for Q3 2014.The reason for the decrease is because the slow progress for the construction of restaurant related work during the quarter.

Tables(A.6) below highlights on general information of ongoing Consulting and Services provided by Capital Award, MEIJI and SIAF respectively as of September 30 2014:

Name of the
developments

Location of
development

Designed capacity per
year

Land area or
Built up area

Current Phase
& Stage

Commencement
date of
development

(Estimated)
development's
completion date on
or before

Contractual
amount

% of completion as of
30.09.2014

Notes

Fish Farm (1)

Enping City

1,200 MT

9,900 m2

fully operational

July 2010

June 2011

$5.3 million

Fully operational

Prawn Farm (1)

Enping City

2013=400MT 2014=800MT 2015=1200 MT

23,100 m2

2 phases and road work

2 phases and road work and Phase 3 extension of grow-out farm & Phase 4 demonstrated hydroponic farm

Phase 1 on June 2011 Phase (2.1) Phase (2.2) Road work Started Aug. 2012

Phase (1) on December 2012 Phase (2) completed Q1 2013

Phase (1) $11.6 million Phase (2) 6.39 million Road work $2.94 million, Phase 3 US$5.2 million & Phase 4 US$1.6 million

Extension work 90% completed

Fish Farm (2) "The Fish & Eel Farm

Xin Hui District, Jiang Men.

2014=800 MT 2015= 1600 MT 2016=2000MT

165,000 m2

3 Phases

Phase 1 January 15, 2012 Bridge & Road Oct. 2012 Phase (3) 2013 & (4)2014

Phase 1 June 2014 Bridge & Road Dec. 2013 Phase (3) & (4) 2015

Phase (1) $8.73 million Bridge & Road $2.48 Phase (3) $4.38 M Phase (4) $10.63 Million

Phase (1) & Bridge and Road completed Jan. 2013 Phase (3) completed and Phase (4) not started.

Phase 4 work in progress

Prawn Farm (2) The Hatchery & Nursery & Grow-out prawn farm

San Jiao Town, Zhong San City,

2013=1.6 Billion Fingerling and 400MT of prawns increasing yearly and by 2015 = 3.2 billion fingerling and 1200 MT of Prawns

120,000 m2

2 phases

Phase (1) and Phase (2) May 2012 Phase (3) 2014

Phase (1) Dec. 2012 and Phase (2) December 2013.Phase (3) Dec. 2014

Phase (1) $9.26 m and Phase (2) 8.42 Million Phase (3) 11.5 Million

Phase (1) fully operational and Phase (2) in operation and Phase (3) not started

Phase 3 work in progress

Cattle Farm (1)

LiangXi Town, Enping City

165,013 m2

1,500 Head

2 phases

April 2011

December 2011

$3.0 million +$1.17 Million

Fully Operational

Cattle Farm (2)

LiangXi Town, Enping City

230,300 m2

2,500 head

2 Phases

February 2012

March. 2014

$10.6 million

completed

operating

Cattle Farm (1) external road work

LiangXi Town, Enping City

4.5 Km road

One Phase

September 2012

March. 2013

$4.32 million

Completed

Cattle Farm (2) External Road work.

LiangXi Town, Enping City

5.5 Km Road

One Phase

September 2012

March. 2013

$5.28 Million

Completed

WHX Restaurants etc.

Guangzhou City

5,500 seatings in total

Phase (1) Stage (1)

June 2012

December 2015

$17.5 million

Work in progress

Restaurant 5 & 6 in operation

NaWei wholesale Center

Guangzhou City

5,000 m2

One Phase

July 2012

March. 2014

$ 9 million

Completed

Operating

Shanghai City

3,000 m2

Two Phases

Sept. 2014

December. 2014

$5 million

Work in progress

New Zhongshan Prawn Project

Zhongshan City

Phase (1)S(1)= 10,000 MT S(2)= 30,000 MT Phase (2) S(1)=100,000 MT Phase (3) 200,000 MT

3600 MU land & BU area 3.57 million square meter

Phase (1) Stage (1)

Nov. 2013

10 years for 100,000 MT capacity & 20 years for whole integrated project

10 years for US$2.6 billion

minimal

Phase (1) Stage (1)'s farm construction work in progress

Note (4) to Table A 1 Other Income

Table (Note 4.1) below shows the Gain / Loss on extinguishment of debts (or Debt Settlement) representing recent sales of unregistered securities and the issuance of shares for Q3 of 2014

The Company entered into several agreements with third parties to settle debts by issuance of the Company’s common stock. The shares issued by the Company were valued at the trading price of the stock on the date the shares were issued. For the three months ended September 30 2014, the Company issued an aggregate of 7,930,179 shares of Common Stock for (i) in consideration for extinguishment of debt in the aggregate amount of $2,431,374 for the issuance of 5,930,179 shares, reporting gain as income of $33,693 from the extinguishment of debts and (ii) for settlement of consulting and service fee in aggregate amount of $1,500,000 for the issuance of 2,000,000 shares for the services rendered in successfully procuring the private placement note issued on August 29, 2014.

During the last three years, we have issued unregistered securities to Chinese persons none of them residents of the United States. None of these transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The sales of these securities were, except as set forth below, deemed to be exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(a)(2) thereof, and/or Rule 506 of Regulation D promulgated there under, as transactions by an issuer not involving a public offering. The recipients of securities in each transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the certificates issued in such transactions. All purchasers of our securities were accredited or sophisticated persons and had adequate access, through employment, business or other relationships, to information about us.

Date	Shares issued/Bought back		Market Price when issuance		Par value		Additional paid in capital		Consideration received		Income from issuance of shares		Note
As of July 1, 2014		160,198,044						101,547,572.
7/15/2014		2,180,793		0.40		2,181		870,136		894,125.		21,808	Debt settlement
8/12/2014		1,188,410.		0.40		1,188.		474,176		487,249.		11,885.	Debt settlement
8/22/2014		2,560,976.		0.41		2,561		1,047,439.		1,050,000.		-	Debt settlement
9/16/2014		2,000,000.		0.75		2,000.		1,498,000		1,500,0000		-	Professional Services

As of September 30, 2014		168,128,223.				7,930		105,437,323		3,931,374.		33,693

We relied upon Regulation S of the Securities Act of 1933, as amended, for the above issuances, none of which was made to US citizens or residents. We believe that Regulation S was available because:

•

None of these issuances involved underwriters, underwriting discounts or commissions;

•

We placed the requisite Regulation S 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; and

•

No direct selling efforts of the Regulation S offering were made in the United States.

The other income for Q3 2014 amounted to $(17,599) and derived from the combination of (1) Gain on extinguishment of debt $33,693 (Note 4), Government Grant $57,340 and other income $155,032 less interest expenses of $263,664. Whereas the other income for Q3 2013, and derived from the combination of (1) Gain on extinguishment of debt $160,997 (Note 4), Government Grants $343,481 and other income $41,264 less interest expenses of $286,376.

Gain (loss) of extinguishment of debts

Any deficit (excess) of the fair value of the shares over the carrying cost of the debt has been reported as a gain (loss) on the extinguishment of debt of $33,693 and $160,997 has been credited (charged) to operations for the three months ended September 30, 2014 and 2013, respectively.

Note (5 )to Table A 1 General and Administrative Expenses and Interest Expenses

General and administrative and interest expenses (including depreciation and amortization) increased by $1,544,808 or 67% from $2,313,365 for Q3 2013 to $3,858,173 for Q3 2014. The increase was primarily due to increase in office and corporate expenses of $1,303,949 from $657,741 for Q3 2014 for Q3 2013 to $1,961,690 for Q3 2014, and the increase in others and miscellaneous of $185,139 from $259,626 for Q2 2013 to $444,765 for Q3 2014.

Table (to Note 5)

Category	2014 Q3		2013 Q3		Difference
	$		$		$
Office and corporate expenses		1,961,690		657,741		1,303,949
Wages and salaries		486,172		447,717		38,455
Traveling and related lodging		20,647		19,332		1315
Motor vehicles expenses and local transportation		48,635		47,704		931
Entertainments and meals		33,030		34,384		(1,354	)
Others and miscellaneous		444,765		259,626		185,139
Depreciation and amortization		599,570		560,485		39,085
Sub-total		3,594,509		2,026,989		1,567,520
Interest expense		263,664		286,376		(22,712	)

Total		3,858,173		2,313,365		1,544,808

Note (6) to Table A 1 Depreciation and Amortization

Depreciation and amortization increased by $349,282 or 41% to $1,199,182 for Q3 2014 from $849,900 for Q3 2013.The increase was primarily due to the increase of depreciation by $280,037 to $636,774 for Q3 2014 from depreciation of $356,737 for Q3 2013 whereas the decrease of amortization by $69,245 to $562,408 for Q3 2014 from amortization of $493,163 for Q3 2013.

In this respect, total depreciation and amortization amounted to $1,199,182 for Q3 2014, out of which amount $599,570 was reported under general and administration expenses and $599,612 was reported under cost of goods sold; whereas total depreciation and amortization was at $849,900 for Q3 2013 and out of which amount $560,485 was reported under General and Administration expenses and $289,415 was reported under cost of goods sold.

Note (7) to Table A 1 Non-controlling interests

Table (F) below shows the derivation of non-controlling interest

Names of intermediate holding company subsidiaries	Capital Award Inc. (Belize)	Macau EIJI Company Ltd. (Macau)									A Power Agro Agriculture Development (Macau) Ltd.						Tri-way Industries Ltd.(HK)				Total
Abbreviated names	CA	(MEIJI)									(APWAM)						(TRW)

% of equity holding on below subsidiaries (in China)	NA		75	%		75	%		26	%		45	%					75	%
Name of China subsidiaries	None		Jiangmen City Heng Sheng Tai Agriculture Development Co. Ltd.(China)			Jiangmen City Hang Mei Cattle Farm Development Co. Ltd.(China)						Qinghai Sanjiang A Power Agriculture Co. Ltd. (China)			Qing Hai Zhong He Meat product Co. Ltd (China)			Jiangmen City A Power Fishery Development Co. Ltd. (China)

Abbreviated names			(JHST)			(JHMC)			(HSA)			(SJAP)			(QZH)			(JFD)
									Hunan Shanghua A Power Agriculture Co. Ltd (China			50	%

Net income of the P.R.C. subsidiaries for the period ended 30. Sept. 2014 in $		$	3,418,943		$	687,832		$	1,759,083		$	6,083,044		$	2,123,246		$	1,681,445

Equity % of non-controlling interest			25	%		25	%		24	%		55	%		55	%		25	%

Non-controlling interest's shares of Net incomes in $		$	854,736		$	171,958		$	422,180		$	3,345,674		$	1,167,785		$	420,361		$	6,382,694

The Net Income attributed to non-controlling interest is $6,382,694 shared by (JHST, JHMC, HSA, SJAP, QZH and JFD collectively) for Q3 2014 as shown in Table (F) above.

Note (8) to Table A 1 Earnings per shares (EPS)

Earnings per share increased by $0 (basic) and $-0.01 (diluted) per share from EPS of $0.15 (basic) and 0.14 (diluted) Q3 2013 to EPS of $0.15 (basic) and $0.15 (diluted) for Q3 2014. The reason for the increase is primarily due to the increase of net income attributable to Sino Agro Food, Inc. and subsidiaries by $5.75 million from $18.75 million for Q3 2013 to $24.50 million for Q3 2014.

Part B. MD & A on Unaudited Consolidated Balance Sheet as of September 30, 2014 compared to December 31, 2013 (fiscal year 2013)

Consolidated Balance sheets	September 30, 2014		December 31, 2013		Changes +-		Note
	$		$		$
ASSETS
Current assets
Cash and cash equivalents		4,691,157		1,327,274		3,363,883	B
Inventories		37,439,892		8,148,203		29,291,689	9
Costs and estimated earnings in excess of billings on uncompleted contracts		1,224,287		663,296		560,991
Deposits and prepaid expenses		55,610,463		51,291,708		4,318,755	10
Accounts receivable		122,773,881		82,057,941		40,715,940	11
Other receivables		16,475,508		3,782,772		12,692,736
Total current assets		238,215,188		147,271,194		90,943,994
Property and equipment
Property and equipment, net of accumulated depreciation		61,274,162		46,487,058		14,787,104	12
Construction in progress		69,088,637		59,134,732		9,953,905	13
Land use rights, net of accumulated amortization		58,995,505		60,705,829		-1,710,324	14
Total property and equipment		189,358,304		166,327,619		23,030,685
Other assets
Goodwill		724,940		724,940		-
Proprietary technologies, net of accumulated amortization		11,587,564		12,081,470		-493,906	15
Temporary deposit paid to entities for investments in future Sino Joint Venture companies		41,109,708		41,109,708		-
Total other assets		53,422,212		53,916,118		-493,906
Total assets		480,995,704		367,514,931		113,480,773
Current liabilities							16
Accounts payable and accrued expenses		16,477,918		11,055,194		5,422,724
Billings in excess of costs and estimated earnings on uncompleted contracts		3,373,432		3,146,956		226,476
Due to a director		4,244,519		1,793,768		2,450,751
Series F shares mandatory redemption payable		3,146,063		-		3,146,063
Other payables		11,177,713		10,768,786		408,927

Short term bank loan		-		4,100,377		-4,100,377

Bonds payable		1,725,000		-		1,725,000
Total current liabilities		40,144,645		30,865,081		9,279,564

Non-current liabilities
Series F shares mandatory redemption payable		-		3,146,063		-3,146,063
Bonds payable		-		1,725,000		-1,725,000
Long term debts		2,616,610		180,417		2,436,193
Convertible note payable		6,982,667		-		6,982,667	16D
Total non-current liabilities		9,599,277		5,051,480		4,547,797
Stockholders’ equity
Preferred stock
Series A preferred stock		-		-		-
Series B convertible preferred stock		7,000		7,000		-
Series F Non-convertible preferred stock		-		-		-	17
Common stock		168,128		137,602		30,526
Additional paid-in capital		118,514,375		104,913,676		13,600,699
Retained earnings		249,573,317		181,196,498		68,376,819
Accumulated other comprehensive income		6,244,379		6,260,131		-15,752
Treasury stock		-1,250,000		-1,250,000		-
Total SIAF Inc. and subsidiaries' equity		373,257,199		291,264,907		81,992,292
Non-controlling interest		57,994,583		40,333,463		17,661,120
Total stockholders' equity		431,251,782		331,598,370		99,653,412
Total liabilities and stockholders' equity		480,995,704		367,514,931		113,480,773

This Part B discusses and analyzes certain items (marked with notes) that we believe would assist stakeholders in obtaining a better understanding on the Company’s results of operations and financial condition:

Note (B) Cash and Cash Equivalents

The change in cash and cash equivalent of $3,363,883 derived from cash and cash equivalent of $4,691,157 and $1,327,274 as of September 30, 2014 and December 31, 2013, respectively. In this respect it is a regular situation for cash & cash equivalent to get back into its normal pattern after the irregular pattern incurred due to seasonal impacts at the end of the year.

Note (9) Break down on Inventories

	September 30, 2014		December 31, 2013		Difference
	$		$		$
Sleepy cods, prawns, eels and marble goble		4,935,062		1,761,111		3,173,951
Harvested HU plantation				719,329		-719,329
Bread grass		3,337,428		580,954		2,756,474
Beef cattle		5,850,305		1,951,962		3,898,343
Organic fertilizer		3,094,379		895,670		2,198,709
Forage for cattle and consumable		3,591,769		684,979		2,906,790
Raw materials for bread grass and organic fertilizer		13,411,046		855,493		12,555,553
Beef and mutton		2,213,890		-		2,213,890
Immature seeds		1,003,013		698,704		304,309
		37,436,892		8,148,203		29,288,689

Note (10) Breakdown of Deposits and Prepaid Expenses

Note (10.1)

	September 30, 2014		December 31, 2013		Difference
	$		$		$
Deposits for
- purchases of equipment		4,372,776		4,886,048		-513,272
- acquisition of land use right		7,826,508		7,826,508		0
- inventory purchases		7,693,099		9,776,383		2,083,284
- aquaculture contract		9,404,067		-		9,404,067
- building materials		877,598		1,281,935		-404,337
- proprietary technology		-		4,404,210		4,404,210
- construction in progress		23,021,316		23,021,316		0
Shares issued for employee compensation and oversea professional fee		2,415,099		100,308		2,314,791
Temporary deposits paid to entities for investments in future Sino Foreign Joint Venture companies		41,109,708		41,109,708		0

		96,720,171		92,406,416		4,313,755

Note (10.1) Breakdown of Deposit for- acquisition of Land Use Right:

As of September 30, 2014, we have $77,826,508 for a deposit paid for the acquisition of a Land Use Right (“LUR”) derived from the following transactions:

$3,182,180 (or RMB20,000,000) was full payment made on June 6, 2012 for Land Use Right by HSA comprising a block of land measuring 150 Mu (or 25 acres of prime agriculture land) located at Linli District of Hunan Province within 10 Km of HSA’s complex. The process of application to register the said “Land Use Right” is in progress, and, as such, this payment is recorded as Deposit and Prepaid Expenses pending final authority estimated to be granted on or before September 30, 2014, as the new local ordinances on agriculture land delayed the processing of our application. Due to the delay in approving the LUR of the said block of land, HSA has revised and supplemented the contract of said land by a leasing agreement until such time, the said official approval will be granted, and in the interim, the deposit and pre-payment on said land would be treated as a rent-to-own lease arrangement providing pre-payment toward said land once approval is granted.

$190,930 (or RMB1,200,000) was paid by SJAP as deposit for the acquisition of “Land Use Right” on a block of land measuring 15 Mu (or 2.475 acres) located at Huangyuan district next to SJAP’s complex on October 15, 2012. The process of rezoning this piece of land to residential (at present, agriculture) continues, and once completed will be transferred from the Local Government (Huangyuan County) to SJAP to build new staff quarters.

$4,453,398 (or RMB 27,989,606) was the full payment by Capital Award for the purchase of the Land Use Right on a block of prime agriculture land measuring 235 Mu (or 38.5 acres) located at the Cong Hua District Guangzhou City in late October 2010. This block of land is part of a larger block of land (of some 500 acres) which is under a subdivision application. However in 2011, the Land Law changed such that the said sub-division now requires the approval of the Central Government in Beijing, which means approval process is lengthened. Cong Hua District was rezoned as a suburb of the Guangzhou City in 2010 and within close proximity of the Guangzhou City and Management considers it as a valuable piece of land very suitable for the development of one of our agriculture projects. Our agreement with the Vendor requires that they use best efforts to speed up the said subdivision’s approval on or before June 30 2014, failing which they would replace the said land with another block of land to our satisfaction., In lieu of the land swap arrangement just mentioned, the Company has negotiated with the Vendor to be compensated $1 million since the Central Government approval remains pending as of September 30, 2014, which is scheduled to be paid on or before December 31, 2014.

Note (10.2) Information of “Temporary deposit and pre-payments for investments in future assets and in future Sino Foreign Joint Venture companies”:

Under account of

Segment of

Project name

Estimated total

Estimated time

Current status

Deposit & prepayments

Land Bank

% equivalent

Subsidiary

Asset value

of Acquisition

of Project

made as of September 30, 2014

or Built Up area

to equity paid

SIAF

Corporate

Trade Center

3.5 million

own development

30% completed

4,086,941

5,000

Seafood Center

1,032,914

Fishery

Fish Farm (1)

26.22 Million

2016

2 out 4 phases completed

6,000,000

23,100

Prawn Farm (1)

20.93 Million

2014

in operation

14,554,578

165,000

Prawn Farm (2)

29.18 Million

2014

Part operational Part work in progress

9,877,218

120,000 developed 96,000 m2 undeveloped

MEIJI

Cattle

Cattle Farm (2)

15.88 Million

2014

95% completed

5,558,057

230,300

41,109,708

During this quarter the Company has not paid further deposit and prepayment for investments in future assets and in future Sino Foreign Joint Venture companies; as such, there is no change in this respect.

Note (11): Breakdown of Accounts receivable:

	September 30,2014
	Accounts receivable		0-30 days		31-90 days		91-120 days		over 120 days and less than 1 year
	$		$		$		$		$
Consulting and Service totaling
CA		21,779,206		21,779,206		-		-		-
MEIJI		4,352,293		-		-		-		4,352,293
SIAF		5,653,426		-		5,653,426		-		-

Sales of Live Fish, eels and prawns (from Farms) (CA)		14,532,324		14,532,324		-		-		-

Sales of imported seafood (SIAF)		7,090,129		7,090,129		-		-		-

Sales of Cattle and Beef Meats (from Enping Farm) (MEIJI)		12,472,160		5,479,701		2,254,887		4,737,572		-

Sales of HU Flowers (Fresh & Dried) (JHST)		10,943,896		2,427,678		3,383,155		1,656,844		3,476,220

Sales Fertilizer, Bulk Stock feed and Cattle by (SJAP)		31,051,474		7,333,436		14,455,842		7,940,308		1,321,888

Sales Fertilizer from (HSA)		9,761,599		2,061,234		3,730,104		1,711,178		2,259,084

Sales of Live Fish (JFD)		35,850		-		-		-		35,850
				-		-		-		-
Sales of Beef (QZH)		5,101,524		4,210,875		890,045		604		-

Total		122,773,881		64,914,582		30,367,458		16,046,506		11,445,335

Information on trading terms and provision for diminution in value of accounts receivable:

Our accounts receivable ageing is less than 12 months old. Receivables from revenue derived from consulting and services billed for work completed are within our normal trading terms of 180 days and therefore no diminution in value is required, as the credit quality of receivable is not in doubt.

Fish Sales: Most farmed fish are sold to wholesalers at prevailing daily market prices and ageing is within 90 days trading terms with a small portion at 180 days (for oversized fish, as the sale of oversized fish takes time to sell). We sold $23 million in live fish, eels and prawns (live seafood) to the wholesalers for the three months ended September 30, 2014 and as of September 30, 2013, accounts receivable of $ 0 was over 120 days. These debtors represent credit quality receivables as they are well established wholesalers, profitable and viable businesses with a good track record and therefore provision of diminution in value is not required as collection is not in doubt.

Sales of fertilizer and bulk livestock feed: These comprise sales made to regional farmers contracted by us to grow crops and pastures using and purchasing our fertilizer. We in turn agree to buy their cattle that are fed with our bulk and concentrated cattle feed purchased from us. Under this term of arrangements our accounts receivable are normally carried forward until such time they can be offset against our account payables due to these contracted farmers(that is, the amount owed for the amount of crops and pastures is ultimately offset against the amount of cattle that we have purchased from them, respectively). As these debtors are our contract farmers and operate profitable and viable businesses with us and have a good track record we consider their credit quality to be good and collection from them is not in doubt, thus no diminution in value is required.

Information on Concentration of credit risk of account receivables:

We have 4 major long-term customers (referring to Customer A, B, C and D mentioned in the Financial Statements of this Form 10-Q), who have accounted for 63.01% of our consolidated revenues for Q3 2014 as shown in the table below:

	Three months ended September 30, 2014
	% of total Revenue			$	Total Revenue
Customer A		24.57	%			26,339,173
Customer B		15.78	%			16,914,528
Customer C		14.33	%			15,361,990
Customer D		8.33	%			8,931,618
		63.01	%			67,547,309

Customer A is Guangzhou City A Power NaWei Trading Co. Ltd (“APNW”). In respect of the project for WSC1, CA was the consulting engineer responsible for the construction of this project and development of its business operation via a Consulting and Service Contract granted by APNW. APNW is now one of our main wholesalers, and to which we bill our sales of seafood (including live and frozen seafood). APNW distributes the seafood to other wholesalers in various cities in China. WSC 1 is ideally situated at the center of all interprovincial logistic services. At the same time, APNW has obtained all relevant Import Quotas and Permits by September 30, 2013. As such, SIAF relies on APNW’s import permits for its import and export trades to be carried out in China. Sales effected through WSC 1 contributes 24.57% of our total consolidated revenue, which is equivalent to $26,339,173 out of our total revenue of $107,220,059 derived collectively from the following segments of activities:

Customer A with				Three months ended September 30, 2014
Name of company	Segments	Operation Division	Abbreviation name	% of total consolidated			Amount in
				Revenue			$

CA	Fishery	Sales of fish (from Fish Farm 1)	Wholesale Center (1)		6.02	%		6,457,870
		Sales of fish / eels from Contract Growers			6.31	%		6,770,173


SIAF	Corporate	Trading sales of seafood, beef & mutton			12.23	%		13,111,130

					24.57	%		26,339,173

Customer B is one of our main agents, namely Mr. Li Hongzhen who distributes SJAP’s organic fertilizer, bulk livestock feed and concentrated livestock feed to our cooperative farmers and other regional farmers. During Q3 2014, Mr. Li had transacted 15.78% of our total consolidated revenue (equivalent to $16,914,528 out of our total revenue of $107,220,059 derived from the sale of SJAP’s organic fertile, bulk livestock feed and concentrated livestock feed under the segment of Organic Fertilizer and Bread Grass.

Customer C is one of our main agents, namely Mr. Xian Zhiming (Zhongshan new prawn farm) who we agreed to extend trading terms between 120 days to 180 days in the interim until such time as we assist them to procure a project loan of up to $60 million targeting on or before September 30, 2014.

Customer D is Cattle Wholesale represented by Mr. Zhen Runchi who buys our fattened cattle to sell them in the Guangdong and Beijing cattle markets and at the same time supplies to us with young cattle. During Q3 2014, transactions through Mr. Zhen Runchi generated 8.33 % of our total consolidated revenue (equivalent to $8,931,638 out of our total revenue of $107,220,059.

The Company had 4 major customers whose accounts receivable balance individually represented the following percentages of the Company’s total accounts receivable during Q3 2014:

	September 30, 2014				Total
	% of total Accounts receivables			amount in $	Accounts receivables
Customer A		19.22	%			23,600,631
Customer B		11.32	%			13,901,362
Customer C		6.73	%			8,262,682
Customer D		6.30	%			7,734,588
		43.57	%			53,499,263

Note (12) Property and equipment, net of accumulation depreciation

	September 30, 2014
	$
Plant and machinery		5,344,326
Structure and lease hold improvements		49,841,748
Mature seeds and herbage cultivation		9,234,439
Furniture and equipment		393,411
Motor vehicles		765,858
		65,579,782

Less: Accumulated depreciation		(4,305,620	)
Net carrying amount		61,274,162

Note (13) Construction in progress

	September 30, 2014
	$

Construction in progress
- Oven room, road for production of dried flowers		276,288
- Office, warehouse and organic fertilizer plant in HSA		16,867,188
- Organic fertilizer and bread grass production plant and office building		18,009,803
- Rangeland for beef cattle and office building		30,690,295
- Fish pond		1,844,454
- Beef and seafood distribution center		1,400,609
		69,088,637

Note (14) Land Use Rights, net of accumulated amortization:

								Monthly		2014.09.30		Nature of
				Date				amortization		Balance $		ownership
Item	Owner	Location	Acres	Acquired	Tenure	Expiry dates	Cost $	$

Hunan		Ouchi Village, Fenghuo
lot1	HSA	Town, Linli County	31.92	2011-4-5	43	2054-4-4	242,703		470		222,948		Lease

Hunan		Ouchi Village, Fenghuo	247.05	2011-7-1	60	2071-6-30	36,666,141		50,925		34,680,058		Management
lot2	HSA	Town, Linli County											Right

Hunan		Ouchi Village, Fenghuo											Land Use
lot3	HSA	Town, Linli County	8.24	2011-5-24	40	2051-5-23	378,489		789		346,160		Rights

Guangdong		Yane Village, Liangxi											Management
lot 1	JHST	Town, Enping City	8.23	2007-8-10	60	2067-8-9	1,064,501		1,478		937,352		Right

Guangdong		Nandu Village of Yane											Management
lot 2	JHST	Village, Liangxi Town,	27.78	2007-3-14	60	2067-3-13	1,037,273		1,441		906,173		Right
		Enping City

Guangdong		Nandu Village of Yane											Management
lot 3	JHST	Village, Liangxi Town,	60.72	2007-3-14	60	2067-3-13	2,267,363		3,149		1,980,794		Right
		Enping City

Guangdong		Nandu Village of Yane
lot 4	JHST	Village, Liangxi Town,	54.68	2007-9-12	60	2067-9-11	2,041,949		2,836		1,800,886		Management
		Enping City											Right

Guangdong		Jishilu Village of Dawan											Management
lot 5	JHST	Village, Juntang Town,	28.82	2007-9-12	60	2067-9-11	960,416		1,334		847,034		Right
		Enping City

Guangdong		Liankai Village of											Management
lot 6	JHST	Niujiang Town, Enping	31.84	2008-1-1	60	2068-12-31	821,445		1,141		729,032		Right

		Nandu Village of Yane
Guangdong		Village, Liangxi Town,											Management
lot 7	JHST	Enping City	41.18	2011-1-1	26	2037-12-31	5,716,764		18,323		4,892,231		Right

Guangdong		Shangchong Village of
lot 8	JHST	Yane Village, Liangxi	11.28	2011-1-1	26	2037-12-31	1,566,393		5,020		1,340,471		Management
		Town, Enping City											Right

Guangdong		Xiaoban Village of Yane											Management
lot 9	MEIJI	Village, Liangxi Town,	41.18	2011-4-1	20	2031-3-31	5,082,136		21,176		4,192,762		Right
		Enping City

		No. 498, Bei Da Road,											Land Use
Qinghai		Chengguan Town of											Right &
lot 1	SJAP	Huangyuan	21.09	2011-11-1	40	2051-10-30	527,234		1,098		488,790		Building
		County, Xining City,											ownership
		Qinghai Province

Guangdong		Niu Jiang Town, Liangxi											Management
lot 10	JHST	Town, Enping City	6.27	2013-3-4	10	2023-3-4	489,904		4,083		412,336		Right (lease)

		Land improvement cost
	JHST	Incurred		2013-12-1			3,914,275		6,155		3,852,730

Exchange difference							1,860,972				1,365,748

			620				64,637,958		119,418		58,995,505

Note (15) Other Receivables

	September 30, 2014		Note
	$
Advanced to employees		277,298
Advanced to suppliers		7,552,844		15.A
Advanced to sub-contractors and suppliers working on the Zhongshan New Prawn Projects		8,645,366		15.B
		16,475508

Note 15.A& B: Breakdown of Advances to Suppliers at SJAP’s operations:

At SJAP it is a common practice to make cash advances to our cooperative growers (presently standing at 100 members) who are our suppliers, to carry them through respective growing periods (for cropping or pasturing or cattle growing purposes) before final harvests of produce or sale of their cattle. On average, it works out to less than $2,442 per member, which in our management’s opinion is a normal season to season process deemed fair and equitable. In this respect, as the said average increases it means that the average cooperative farmer is increasing his productivity (whether in the growing of crops or cattle), and in simple terms, it represents good progress indicating that SJAP’s revenue is also increasing.

The sub-contractors and suppliers of the Zhongshan Projects are reputable entities that in management’s opinion are employing their funds in and are working on the Zhongshan Project, such that the project will progress smoothly.

Note (16) Current Liabilities:

	September 30, 2014		Note
Current liabilities
Accounts payable and accruals		16,477,918		16.A
Billings in excess of cost and estimated earnings on uncompleted contracts		3,373,432
Series F shares mandatory redemption payable		3,146,063		16.B
Due to a director		4,244,519
Other payables		11,177,713		16.C
Short term bank loan		-
Bonds payable		1,725,000
		40,144,645

Note 16A: Accounts payables and accrued expenses clarification:

Our current trading environment is limited to a number of suppliers who offer prolonged credit terms means that most purchases are paid for in cash or short credit terms (7 to 10 days), and in a way this allows us better bargaining ability to obtain cash discounts resulting in the low trade account payables balance of $16,477,918 about 15% of total sales of $107 million for the reasons stated below:

Our main Account Payables during Q3 2014 were generated from the following activities:

We supply the following cost elements: our own staff, engineering and technology that enhanced our profit margins and reduced the overall cost of sales. Consulting and services (“C&S”) since inception is the major contributor of income to date and cost of goods sold averaging 47%,and 62%for CA and SIAF, respectively derived from its respective C&S during the fiscal year 2013.

Implementation, supervision, training and associated management work and most of the building sub-contractors worked at fixed costs; consequently, profit margins are contained providing ample opportunity for expanded credit terms. For contracts related to the construction of farms we use plants, equipment, parts and components that were specially manufactured and made as per our own design and engineering by local manufacturers and suppliers (who carry a high amount of initial development costs and inventories for us based on the understanding that we would pay for the deliveries of goods sold within shorter trading terms such that they could afford to carry such costs). We pay promptly in this respect and believe that, as time has passed, our track record has earned our excellent credibility with all of our suppliers and sub-contractors.

Fish sales started gradually in late 2011, and the cost of sales was averaged at 70% for Q3 2014, respectively (the bulk of the cost came from the supplies of baby fingerlings and the live-bait as the main fish feed), and customary trading terms of Chinese suppliers is on a cash on delivery basis, and suppliers who provide short credit terms presently is limited to no more than a select few.

Cattle sales at SJAP’s own cattle stations and from its cooperative farmers started in 2011 at lower profit margins compared to the sales of fish and the cost of sales was averaged at 75% for Q3 2014; it is also customary in China to pay for the young live cattle by cash on delivery. The Enping cattle farm started to buy young cattle in 2011 and started sales of mature cattle in 2012; cost of sales is averaged at 88% for Q3 2014. Most of the young cattle supplies were from small primary producers (local small farmers) who did not have great financial resources; as such we paid for these supplies of young cattle in cash on delivery or short credit term after delivery.

In SJAP, the bulk of our fertilizers were sold to farmers who are growing pastures and crops for us such that their fertilizer sales were kept as book entries that would be offset with the pastures and crops that we would buy back from them. In the case of HSA, which is a developing stage company in fertilizer manufacturing, prolonged credit term facilities have not been established for its purchase of raw materials.

Bulk livestock feed are produced by regional cooperative growers under contract to us and they use our supply of fertilizer and seeds that represented the main cost components enhancing cost of sales, which average is at 51% for Q3 2014. Again, sale of fertilizer is held on credit against crops and pasture grass purchased from them, as well as bulk livestock feed sold to them for cattle rearing, and reconciled once cattle are purchased from them.

On August 22, 2012, the Company’s Board of Directors declared that the Company’s stockholders were entitled to receive one share of restricted Series F Non-convertible Preferred Stock for every 100 shares of Common Stock owned by the stockholders as of September 28, 2012, with lesser or greater amounts being rounded up to the nearest 100 shares of Common Stock for purpose of the computing the dividend. The intended holders of record of shares of Series F Non - Convertible Preferred Stock were to be entitled to a coupon payment directly from the Company at the redemption rate of $3.40 per share and be payable on May 30, 2014. During Q1 2013, the transfer agent of the Company recorded 924,180 shares of Series F Non-Convertible preferred stock on the account. But, the Company did not issue physical shares and only issued coupons to notify respective shareholders on that date. The figure 924,180 was based on the number of shares of Common Stock as of September 28, 2012 of 91,931,287 shares, calculated at one share of Series F Non-Convertible preferred stock for every 100 shares of Common Stock with decimal numbers being rounded up to one. The recipients of the coupons were originally entitled to a coupon payment directly from the Company at the redemption rate of $3.40 per share and be payable on May 30, 2014, which date was subsequently postponed to May 30, 2015 (the “Coupon Redemption Date”). Upon the Coupon Redemption Date, holders of the coupon shall be entitled to a lump sum cash payment directly from the Company equal to $3.40 for every coupon then held (the “Redemption”). Upon proper Redemption, the Series F Preferred Stock shall terminate and thereafter cease to exist

Note (16C): Analysis of Other Payables:

As of September 30, 2014, other payables totaling $11,177,713 was composed of the following:

During Q3 2014, the Company issued Promissory notes amounting to $1,771,418 to unrelated third parties for advances granted by third parties collectively to the Company (and/or to its subsidiaries) that are personally guaranteed by a director, repayable within two (2) years at interest free term. Promissory notes could be repaid either by cash or in shares of the Company or a combination thereof. If shares settled debt amounts, the respective share conversion rates will be determined by both parties at the time of settlement. During Q3 2014 we redeemed $2,431,374 of Promissory Notes for advances granted by third parties in fiscal year 2012 as well as in early months of 2013 by the issuance of shares leaving a balance of $512,751 of Promissory Notes still due and outstanding as of September 30, 2014.

A grant of $2,406,143 was received from the Chinese government to SJAP for the development of a certain project; however if SJAP will not be able to complete the project, it will have to repay the grant to the Government. As of September 30 2014, as work is in progress on the said project but it is not yet completed, the grant is recorded as other payables.

Other advances provided by other unrelated third parties collectively to our subsidiaries with no fixed term of repayment at interest free terms that do not have any promissory note or agreement but verbal understandings. These sums amount to $8,258,819 unpaid and outstanding as of September 30, 2014.

Note (16 D): Convertible Note

On August 29, 2014 the Company executed a Convertible Note with Euro China AB (ECAB) of Stockholm Sweden, whereas ECAB would lend to the Company $25 Million based on following principal terms and conditions:

(i)

Issuing Debt amount of $33,000,000 with a 25% discount netting loan proceeds to the Company of $25,000,000.

(ii)

Disbursement of loan is based on 4 tranches: each tranche of $5 million on or before August 14, 2014,

August 29, 2014, and November 27, 2014 with the last tranche of $18 million on or before February 28, 2015 whereas ECAB can deduct the 25% discount on the principal issuing debt amount upon each tranche of disbursements.

(iii)

Tenure of 5 years

(iv)

Interest Rate is at 8% per annum

(v)

Conversion rate is at $1 / share applicable to both principal loan amount and accrued interest at the option of ECAB.

The said Convertible Note was filed with SEC on September 5, 2014.

As of September 30, 2014, the Company has received net proceeds of $5,237,000 from Convertible Note payable.

Part C. Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013 (presented in summarized Charts below);

Revenue:

Revenues increased by $114,964,575 or 63.8 % to $295,180,352 for the nine months ended September 30, 2013 from $180,215,777 for the nine months ended September 30, 2013. The increase was primarily due to the increase of revenue generated from our fishery, beef, organic fertilizer, and cattle farm and corporate and others operations and the maturity of on-going divisional businesses improving their revenues.

The following chart illustrates the changes by category from the nine months ended September 30, 2014 to September 30, 2013.

Revenue
	2014		2013
Category	Q1- Q3		Q1-Q3		Difference
	$		$		$
Fishery		136,968,336		68,826,877		68,141,459

Plantation		9,085,607		14,089,946		-5,004,339

Beef		60,053,322		22,288,842		37,764,480

Organic fertilizer		35,406,530		29,970,388		5,436,142

Cattle farm		21,483,496		19,423,115		2,060,381

Corporate and others		32,183,061		25,616,609		6,566,452

Total		295,180,352		180,215,777		114,964,575

Cost of goods sold and service

Cost increased by $103,976,930 or 91.9% to $199,826,657 for the nine months ended September 30, 2014 from $113,179,388 for the nine months ended September 30, 2013. The increase was primarily due to the Company increased our fishery, beef, organic fertilizer, cattle farm and corporate and others operations for nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013.

The following chart illustrates the changes by category from the nine months ended September 30, 2014 to September 30, 2013.

Cost
	2014		2013
Category	Q1- Q3		Q1-Q3		Difference
	$		$		$
Fishery		87,742,912		45,266,534		42,476,378

Plantation		2,423,811		6,093,751		-3,669,940

Beef		43,598,633		15,731,438		27,867,195

Organic fertilizer		20,005,390		15,869,331		4,136,059

Cattle farm		20,418,345		12,888,673		7,529,672

Corporate and others		25,637,566		17,329,661		25,637,566

Total		199,826,657		113,179,388		103,976,930

Gross Profit

Gross profit increased by $28,317,306 or 42.24% to $95,353,694 for the nine months ended September 30, 2014 from $67,036,388 for the nine months ended September 30, 2013. The increase was primarily due to the corresponding increase in operation revenues. The increase was primarily due to the corresponding increase in scale of operation of revenues from fishery, beef and organic fertilizer.

The following chart illustrates the changes by category from the nine months ended September 30, 2014 to the nine months ended September 30, 2013.

The gross profit by category is as follows:

Category	Q1- Q3		Q1- Q3		Difference
	$		$		$
Fishery		49,225,424		23,560,343		25,665,081

Plantation		6,661,796		7,996,195		-1,334,399

Beef		16,454,689		6,557,404		9,897,285

Organic fertilizer		15,401,139		14,101,056		1,300,083

Cattle farm		1,065,151		6,534,442		-5,469,291

Corporate and others		6,545,495		8,286,948		-1,741,453

Total		95,353,694		67,036,388		28,317,306

General and Administrative Expenses and Interest Expenses

General and administrative expenses and interest expenses (including depreciation and amortization) increased by $3,788,853 or 61% to $10,027,920 for the nine months ended September 30, 2014 from $6,239,067 for the nine months ended September 30, 2013. The increase was primarily due to (i) increase in wages and salaries payments paid for incentives compensation to our staff by the issuance of shares amounting to $239,264 for the nine months ended September 30, 2014 as compared to $271,800 for the nine months ended September 30, 2013 and (ii) increase in office and corporate expenses paid for overseas professional services of $116,076 for the nine months ended September 30, 2014 from $Nil for the nine months ended September 30, 2013.

Category	2014 Q1-Q3		2013 Q1-Q3		Difference
	$		$		$
Office and corporate expenses		4,915,961		1,986,403		2,929,558
Wages and salaries		1,459,702		1,409,818		49,884
Traveling and related lodging		111,991		54,330		57,661
Motor vehicles expenses and local transportation		140,986		121,597		19,389
Entertainments and meals		107,710		99,234		8,476
Others and miscellaneous		794,347		560,507		233,840
Depreciation and amortization		2,014,066		1,608,792		405,274
Sub-total		9,544,763		5,840,681		3,704,082
Interest expenses		483,157		398,386		84,771
Total		10,027,920		6,239,067		3,788,853

Depreciation and Amortization

Depreciation and amortization increase by $1,453,403 or 58.96% to $3,387,314 for the nine months ended September 30, 2014 from $2,464,865 for the nine months ended September 30, 2013. The increase was primarily due to the increase of depreciation by $772,639 to $1,768,047for the nine months ended September 30, 2014 from depreciation of $995,408 for the nine months ended September 30, 2013, and the increase of amortization by $149,810 to $1,619,267 for nine months ended September 30, 2014 from amortization of $1,469,457 for the nine months ended September 30, 2013.

In this respect, total depreciation and amortization amounted to $3,387,314 for the nine months ended September 30, 2014, out of which amount $2,014,066 was booked under general and administration expenses and $1,373,248 was booked under cost of goods sold; whereas total depreciation and amortization was at $2,464,865 for the nine months ended September 30, 2013 and out of which amount, $1,608,792 was booked under General and Administration expenses and $856,073 was booked under cost of goods sold.

Part D. MD&A on records of historical performances reflecting the Company’s “Free Cash Flow “derivation: (Inclusive of SIAF and subsidiaries in segments containing Non-GAAP derivation)

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		31		88		209		243		571
Consulting income		21		51		52		52		176

Cost of goods sold		17		51		139		173		380
Cost of service		10		18		21		27		76

EBITDA		22		66		98		90		275

Depreciation & amortization		1		2		3		3		8

Non - controlling interest		5		6		20		18		49

Net income attributable to SIAF & subsidiaries		16		57		74		68		216

Total assets		153		242		368		480

Total liabilities		16		26		36		50

Total stockholders’ equity		137		216		332		430

Total Capex		14		34		71		25		144
1. property and equipment		-		18		22		9		49
2. construction in progress		2		13		41		16		72
3. land use right		12		3		4		-		19
4. proprietary technologies		-		-		4		-		4
		-		-		-		-		-
Total increase of working capital		18		47		43		85		193
1. increase in inventories		3		17		-6		29		43
2. increase in receivable or decrease in payable etc.		15		30		49		56		150
										-
Total capex and increase of working capital		32		81		114		110		337
										-
Free Cash Flow (FCF)		-10		-15		-16		-20		-62
										-
Net Debt		-1		-2		-7		-14

	In round figure of million shares
Total authorized common stock		100		130		170		170

Weighted average of total issue outstanding common stocks
Basic		60		82		119		153
Diluted		67		92		126		160

	In $/ share
Earnings per share (or EPS)
Basic		0.26		0.70		0.62		0.45
Diluted		0.23		0.62		0.58		0.43

NTA / share
Basic		2.28		2.63		2.79		2.81
Diluted		2.04		2.34		2.63		2.69

E.2 on APWAM (holding company of SJAP).

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million

Sale of goods		15		21		62		80		178

Cost of goods sold		7		15		38		53		113

EBITDA		8		7		27		25		67

Depreciation & amortization		-		-		-		1		1

Non - controlling interest		4		4		15		13		36

Net income attributable to SIAF & subsidiaries		4		3		12		11		30

Total assets		17		43		88		125

Total liabilities		2		11		15		17

Total stockholders’ equity		15		32		73		108

Total Capex		2		14		38		11		65
1. property and equipment		-		9		12		1		22
2. construction in progress		2		4		24		10		40
3. land use right		-		1		-		-		1
4. proprietary technologies		-		-		2		-		2

Total increase of working capital		7		-6		-12		47		36
1. increase in inventories		3		11		-6		13		21
2. increase in receivable or decrease in payable etc.		4		-17		-6		34		15

Total capex and increase of working capital		9		8		26		58		101

Free Cash Flow (FCF)		-1		-1		1		-33		-34

Net Debt		-1		-2		-5		-2

E.3.SIAF’s Corporate Operational division

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		-		2		22		36		60
Consulting income		-		3		9		2		14

Cost of goods sold		-		1		19		32		52
Cost of service		-		1		3		1.5		6

EBITDA		-		2		6		5		13

Depreciation & amortization		-		-		-		-		-

Non - controlling interest		-		-		-		-		-

Net income attributable to SIAF & subsidiaries		-		2		6		5		13

Total assets		3		10		19		35

Total liabilities		1		7		8		19

Total stockholders’ equity		2		3		11		16

Total Capex		-		-		2		1		3
1. property and equipment		-		-		-		-		-
2. construction in progress		-		-		-		1		1
3. land use right		-		-		-		-		-
4. proprietary technologies		-		-		2		-		2

Total increase of working capital		45		18		25		5		93
1. increase in inventories				-		0		-		-
2. increase in receivable or decrease in payable etc.		45		18		25		5		93

Total capex and increase of working capital		45		18		27		6		96

Free Cash Flow (FCF)		-45		-16		-21		-1		-83

Net Debt		-		-		-2		-9

E.4. CA (Fishery Development Division)

	2011		2012		2013		2014Q1-Q3			Total 4 years
	In rounded figures of $ million
Sale of goods		10		28		47		44			129
Consulting income		17		37		36		50			140
											-
Cost of goods sold		8		14		33		26			81
Cost of service		8		14		13		25			60

EBITDA		8		35		37		39			120

Depreciation & amortization		-		-		-		-			-

Non - controlling interest		-		-		-		-			-

Net income attributable to SIAF & subsidiaries		8		35		37		39			119

Total assets		40		60		81		115

Total liabilities		4		4		7		2

Total stockholders’ equity		36		56		74		113

Total Capex		-		-		3		-			3
1. property and equipment		-		-		-		-			-
2. construction in progress		-		-		3		-			3
3. land use right		-		-		-		-			-
4. proprietary technologies		-		-		-		-			-

Total increase of working capital		12		37		25		13			87
1. increase in inventories
2. increase in receivable or decrease in payable etc.		12		37		25		13			87

Total capex and increase of working capital		12		37		28		13			90

Free Cash Flow (FCF)		-4		-2		9		26	#		30

Net Debt		-		-		-		-

E.5. Tri-way (the holding company of Fish Farm (1))

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		-		16		25		37		78


Cost of sale		-		10		19		29		58


EBITDA		-		5		6		8		19

Depreciation & amortization		-		0		0		0		1

Non - controlling interest				1		1		2		4

Net incomes attributable to SIAF & subsidiaries		-		4		5		6		15

Total assets		8		12		19		27

Total liabilities		-		-		-		-

Total stockholders’ equity		8		12		19		27

Total Capex		-		6		2		1		9
1. property and equipment		-		6		-		1		7
2. construction in progress		-		-		2		-		2
3. land use right		-		-		-		-		-
4. proprietary technologies

Total increase of working capital		-		6		5		6		17
1. increase in inventories		-		5		-		3		8
2. increase in receivable or decrease in payable etc.		-		1		5		3		9

Total capex and increase of working capital		-		12		7		7		26

Free Cash Flow (FCF)		-		-7		-1		1		-7

Net Debt		-		-		-		-

E.6. MEIJI (Cattle Farm Development and holding company of CF(1))

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		-		6		18		21		45
Consulting income		4		11		7		-		22

Cost of goods sold		-		4		13		20		37
Cost of service		2		3		5		-		10

EBITDA		1		9		5		1		17

Depreciation & amortization		-		0		0		0		1

Non - controlling interest		-		-		-		-		-

Net income attributable to SIAF & subsidiaries		1		9		5		1		16

Total assets		7		20		33		40		-

Total liabilities		-		-		2		8		-

Total stockholders’ equity		7		20		31		32		-

Total Capex		5		2		-		-		7
1. property and equipment		-		-		-		-		-
2. construction in progress		-		-		-		-		-
3. land use right		5		2		-		-		7
4. proprietary technologies

Total increase of working capital		-3		1		5		1		4
1. increase in inventories		-		1		-		1		2
2. increase in receivable or decrease in payable etc.		-3		-		5		-		2

Total capex and increase of working capital		2		3		5		1		11

Free Cash Flow (FCF)		-1		6		-		0		6

Net Debt		-		-		-		-		-

E.7. MEIJI and JHST plantation division

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		6		12		23		9		50

Cost of goods sold		2		5		10		2		19

EBITDA		4		6		11		5		27

Depreciation & amortization		0		-		1		1		2

Non - controlling interest		1		1		3		1		6

Net income attributable to SIAF & subsidiaries		3		5		7		3		18

Total assets		28		37		49		53		-

Total liabilities		-		-		-		-		-

Total stockholders’ equity		28		37		49		53		-

Total Capex		-		3		10		-		13
1. property and equipment		-		3		6		-		9
2. construction in progress		-		-		-		-		-
3. land use right		-		-		4		-		4
4. proprietary technologies		-		-		-		-		-

Total increase of working capital		-3		1		6		1		5
1. increase in inventories		-		-		-		-		-
2. increase in receivable or decrease in payable etc.		-3		1		6		1		5

Total capex and increase of working capital		-3		4		16		1		18

Free Cash Flow (FCF)		7		2		-5		4		9

Net Debt		-		-		-		-		-

E.8. HSA (the Hunan fertilizer Operation)

	2011		2012		2013		2014Q1-Q3		Total 4 years
	In rounded figures of $ million
Sale of goods		-		3		12		16		31

Cost of goods sold		-		2		7		10		19

EBITDA		-		0		4		7		12

Depreciation & amortization		0.40		1		1		1		3

Non - controlling interest						1		2		2

Net income attributable to SIAF & subsidiaries		-		-1		2		4		5

Total assets		50		60		79		85

Total liabilities		9		4		4		4

Total stockholders’ equity		41		56		75		81

Total Capex		7		9		16		12		44
1. property and equipment		-		-		4		7		11
2. construction in progress		-		9		12		5		26
3. land use right		7		-		-		-		7
4. proprietary technologies		-		-		-		-		-

Total increase of working capital		-40		-10		-11		12		-49
1. increase in inventories		-		-		-		12		12
2. increase in receivable or decrease in payable etc.		-40		-10		-11		-		-61

Total capex and increase of working capital		-33		-1		5		24		-5

Free Cash Flow (FCF)		33		1		-1		-17		17

Net Debt		-		-		-		-		-

Income Taxes

Undistributed Earnings of Foreign Subsidiaries

No EIT has been provided in the financial statements of SIAF, CA, JHST, JHMC, JFD, HSA, QZH and SJAP since they are exempt from EIT for the nine months ended September 30, 2014 and 2013 as they are within the agriculture, dairy and fishery sectors.

CA, CS and CH are international business companies incorporated in Belize, and are exempt from corporate tax in Belize.

No Hong Kong profits tax has been provided in the consolidated financial statements, since TRW did not earn any assessable profits arising in Hong Kong for the nine months ended September 30, 2014 and 2013.

No Macau corporate income tax has been provided in the consolidated financial statements, since APWAM and MEIJI did not earn any assessable profits in Macau for the nine months ended September 30, 2014 and 2013.

No Swedish corporate income tax has been provided in the consolidated financial statements, since SAFS incurred a tax loss for the nine months ended September 30, 2014.

No deferred tax assets and liabilities are payable as of September 30, 2014 and December 31, 2013 since there was no difference between the financial statements carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to reverse.

Off Balance Sheet Arrangements:

None.

Liquidity and Capital Resources

As of September 30 2014, unrestricted cash and cash equivalents amounted to $4,691,157 (see notes to the consolidated financial statements), and our working capital as of September 30, 2014 was $198,070,543.

Contractual Obligations	Less than 1 year	1-3years	3-5 years	More than 5 years	Total
Short Term Bank Loan	-
Bonds payable	1,725,000

Convertible note payable			6,982,667
Long Term Debts		2,616,610
Promissory Notes	512,751

As of September 30 2014, our total long-term debts are as follows:

Cash provided by operating activities amounted to $26,261,673 for the nine months ended September 30, 2014. This compared with cash provided by operating activities totaled $38,065,409 for the nine months ended September 30, 2013. The decrease in cash flows from operations primarily resulted from the decrease of deposits and prepayments of $(583,670) for the nine months ended September 30, 2014 from $(37,090,703) for the nine months ended September 30, 2013.

Cash used in investing activities totaled $(25,646,646) for the nine months ended September 30, 2014. This compares with cash used in investing activities totaling $(36,172,595) for the nine months ended September 30, 2013. The increase in cash flows used in investing activities primarily resulted from payment for construction of $(22,227,905) for the nine months ended September 30, 2014 from $(31,494,031) for the nine months ended September 30, 2013.

Cash provided by financing activities totaled $3,572,916 for the nine months September 30, 2014. This compares with cash used in financing activities totaling $1,353,533 for the nine months September 30, 2013. The increase in cash provided by financing activities due to net proceeds from convertible note of $5,237,000 for the nine months ended September 30, 2014 from $0 for the nine months September 30, 2013.

Acquisition of SFJVC’s and further acquisition plan:

A SFJVC agreement typically contains an option clause for further investment. Initially, the China Developer of project companies invites us to invest in their venture. If management feels compelled it carries out an in-depth study of the target company including legal due diligence, business plan, budget and projected financial information. The final decision is made through the resolution of the Company’s Board of Directors. If the decision is made to proceed with an investment, there is first formed an SFJVC, within which in turn the Company acquires further equity interest. The acquisition price of such interest is determined in accordance with the book value of the SFJVC as of the acquisition date. Consideration generally consists in part of cash and in part of contract against trade debts owed by the China Developer due to Consulting & Services fees charged to the China Developer by the Company in accordance with the Consulting & Services agreement. Project companies’ record development cost as construction in progress and treat the amount due to us as partial investment in new SFJVC.

The Company’s expenditures as the consulting and service provider providing turnkey services to the China Developer for the development of the project include (i) administrative and operational expenses provided for and incurred in the project (charged and recorded under general and administrative operation expenses), billable to the China Developer, (ii) other development expenditures (inclusive of subcontractors’ and sub-suppliers’ cost plus mark-up) billable to the Developer, as well. Consulting & Services fees are exclusively billed to the 3^rdparty China Developer, and not to the future SFJVC companies.

We plan to acquire further SFJVC’s at the time they will be formed officially after their approval by relevant China

Authorities with details shown in the Table below:

Acquisition
by which
subsidiary

Estimated
time of
SFJVC being
formed

Estimated time of
completion of
acquisition

Estimated Total
consideration

Deposit paid
up to date

Deposit paid
is equivalent
to % of equity

Estimated time of
progress
payments

Enping Prawn PF1

June 2014

August 2014

$20.94m

$14.45 m

56%

Q1 to Q2 2014

Zhongshan Prawn PF2

Phase 3 Work still in progress, targeting completion Q3 2014

August 2015

$26.20 m

$9.88 m

33%

Q4 2013 & all year round 2014

Fish & eel Farm 2

Phase 3 & 4 work are in progress targeting completion Q4 2015

August. 2016

$26.22 m

$6.0 m

23%

Q4 2013 & all year round 2014 & 2015

Cattle Farm 2

MEIJI

Final work is still in progress

August 2014

$15.88 m

$5.58 m

35%

On or before June 30 2014

WXC businesses

SIAF

Work is in progress until end 2015

Not yet determined

Not fully determined

$4.08 m

31%

Partially in 2014.

NaWei wholesale centers

SIAF

Work is in progress until end 2015

Phase (1) March 2014, new Phases are pending

Not fully determined

$1.03 m

31%

Partially in 2014.

In accordance with our contract, prior to the official formation of the SFJVC’s the Company will pay an initial deposit and additional deposits as pre-payments to the developer (or owner) of the project as consideration toward future acquisition of the SFJVC upon its official formation.

The total consideration for each purchase of SFJVC is based on its book value at that time of official formation having injected all of the related project’s development assets and liabilities into the SFJVC.

As such the required acquisition cost is funded partly by cash and partly by the set-off receivable due on the consulting and service fee.

CRITICAL ACCOUNTING POLICIES

BASIS OF PRESENTATION

The unaudited quarterly financials for the nine months ended September 30, 2014 results are for the months and do not necessarily indicate the results for a full year. The information included in this interim report should be read in conjunction with the information included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013.

BASIS OF CONSOLIDATION

The consolidated financial statements include the financial statements of SIAF, its subsidiaries Capital Award, CS, CH, TRW, MEIJI, JHST, JFD, JHMC, HSA, APWAM, SAFS and its variable interest entities SJAP and QZH. All material inter-company transactions and balances have been eliminated in consolidation. The results of companies acquired or disposed of during the year are included in the consolidated Financial Statements from the effective date of acquisition.

BUSINESS COMBINATIONS

The Company adopted the accounting pronouncements relating to business combinations (primarily contained in ASC Topic 805 “Business Combinations”), including assets acquired and liabilities assumed arising from contingencies. These pronouncements established principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquire as well as provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. In addition, these pronouncements eliminate the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria and require an acquirer to develop a systematic and rational basis for subsequently measuring and accounting for acquired contingencies depending on their nature. Our adoption of these pronouncements will have an impact on the manner in which we account for any future acquisitions.

NON - CONTROLLING INTEREST IN CONSOLIDATED FINANCIAL STATEMENTS

The Company adopted the accounting pronouncement on non-controlling interests in consolidated financial statements, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This guidance is primarily contained in ASC Topic “Consolidation”. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated financial statements. The adoption of this standard has not had material impact on our consolidated financial statements.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods covered thereby. Actual results could differ from these estimates. Judgments and estimates of uncertainties are required in applying the Company’s accounting policies in certain areas. The following are some of the areas requiring significant judgments and estimates: determinations of the useful lives of assets, estimates of allowances for doubtful accounts, cash flow and valuation assumptions in performing asset impairment tests of long-lived assets, estimates of the reliability of deferred tax assets and inventory reserves.

REVENUE RECOGNITION

The Company’s revenue recognition policies are in compliance with ASC 605. Sales revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. These criteria are generally satisfied at the time of shipment when risk of loss and title passes to the customer. Service revenue is recognized when services have been rendered to a buyer by reference to the stage of completion. License fee income is recognized on the accrual basis in accordance with the underlying agreements.

Government grants are recognized upon (i) the Company has substantially accomplished what we must be done pursuant to the terms of the policies and terms of the grant that are established by the local government; and (ii) the Company receives notification from the local government that the Company has satisfied all of the requirements to receive the government grants; and or (iii) the amounts are received.

Multiple-Element Arrangements

To qualify as a separate unit of accounting under ASC 605-25“Multiple Element Arrangements”, the delivered item must have value to the customer on a standalone basis. The significant deliverables under the Company’s multiple-element arrangements are consulting and service under development contract, commission and management service.

Revenues from the Company's fishery development services contract are performed under fixed-price contracts. Revenues under long-term contracts are accounted for under the percentage-of-completion method of accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition (“ASC 605”). Under the percentage-of-completion method, the Company estimates profit as the difference between total estimated revenue and total estimated cost of a contract and recognized that profit over the contract term. The percentage of costs incurred determines the amount of revenue to be recognized. Payment terms are generally defined by the installation contract and as a result may not match the timing of the costs incurred by the Company and the related recognition of revenue. Such differences are recorded as either costs or estimated earnings in excess of billings on uncompleted contracts or billings in excess of costs and estimated earnings on uncompleted contracts.

The Company determines a customer’s credit worthiness at the time an order is accepted. Sudden and unexpected changes in a customer’s financial condition could put recoverability at risk.

The percentage of completion method requires the ability to estimate several factors, including the ability of the customer to meet its obligations under the contract, including the payment of amounts when due. If the Company determines that collectability is not assured, we will defer revenue recognition and use methods of accounting for the contract such as the completed contract method until such time as the Company determines that collectability is reasonably assured or through the completion of the project.

For fixed-price contracts, the Company uses the ratio of costs incurred to date on the contract (excluding uninstalled direct materials) to management's estimate of the contract's total costs, to determine the percentage of completion on each contract. This method is used as management considers expended costs to be the best available measure of progression of these contracts. Contract costs included all direct material, subcontract and labor costs and those indirect costs related to contract performance, such as supplies, tool repairs and depreciation. The Company accounts for maintenance and repair services under the guidance of ASC 605 as the services provided relate to construction work. Contract costs incurred to date and expected total contract costs are continuously monitored during the term of the contract. Changes in job performance, job conditions, and estimated profitability arising from contract penalty, change orders and final contract settlements may result in revisions to the estimated profitability during the contract. These changes, which include contracts with estimated costs in excess of estimated revenues, are recognized as contract costs in the period in which the revisions are determined. Profit incentives are included in revenues when their realization is reasonably assured. At the point the Company anticipates a loss on a contract, the Company estimates the ultimate loss through completion and recognizes that loss in the period in which the possible loss was identified.

The Company does not provide warranties to customers on a basis customary to the industry; however, the customers can claim warranty directly from product manufacturers for defects in equipment or products. Historically, the Company has experienced no warranty claims.

The Company’s fishery development consultancy services revenues are recognized when the relevant services are rendered, and are subject to a Chinese business tax at a rate of 0% of the gross fishery development contract service income approved by the Chinese local government.

COST OF GOODS SOLD AND SERVICES

Cost of goods sold consists primarily of direct purchase cost of merchandise goods, and related levies. Cost of services consists primarily of direct cost and indirect cost incurred to date for development contracts and provision for anticipated losses on development contracts.

SHIPPING AND HANDLING

ADVERTISING

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid securities with original maturities of three months or less when acquired to be cash equivalents. Cash and cash equivalents kept with financial institutions in People’s Republic of China (“P.R.C”) are not insured or otherwise protected. Should any of those institutions holding the Company’s cash become insolvent, or the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit on that institution.

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Terms of the sales vary. Reserves are recorded primarily on a specific identification basis.

The standard credit period of the Company’s most of customers is three months. Any amount that has an extended settlement date of over one year is classified as a long term receivable. Management evaluates the collectability of the receivables at least quarterly. There were no bad debts written off for the nine months ended September 30, 2014 or September 30, 2013.

INVENTORIES

Inventories are valued at the lower of cost (determined on a weighted average basis) and net realizable value. Costs incurred in bringing each product to its location and conditions are accounted for as follows:

•

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.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Such costs include the cost of replacing parts that are eligible for capitalization when the cost of replacing the parts is incurred. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at the end of each year.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets.

Milk cows		10 years
Plant and machinery		5 - 10 years
Structure and leasehold improvements		10 -20 years
Mature seed and herbage cultivation		20 years
Furniture, fixtures and equipment		2.5 - 10 years
Motor vehicles		5 -10 years

GOODWILL

Goodwill is an asset representing the fair economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is tested for impairment on an annual basis at the end of the company’s fiscal year, or when impairment indicators arise. The Company uses a fair-value-based approach to test for impairment at the level of each reporting unit. The Company directly acquired MEIJI which is engaged in Hu Plantation. As a result of this acquisition, the Company recorded goodwill in the amount of $724,940. This goodwill represents the fair value of the assets acquired in these acquisitions over the cost of the assets acquired.

PROPRIETARY TECHNOLOGIES

The Company has determined that technological feasibility is established at the time a working model of products is completed. Master license of stock feed manufacturing technology was acquired and the costs of acquisition were capitalized as proprietary technologies when technological feasibility had been established. Proprietary technologies are intangible assets of finite lives. Proprietary technologies are amortized using the straight line method over their estimated lives of 25 years.

Bacterial cellulose technology license and related trademark are capitalized as proprietary technologies when technological feasibility has been established. Cost of license and related trademark is amortized using the straight-line method over its estimated life of 20 years.

Management evaluates the recoverability of proprietary technologies on an annual basis of the end of the company’s fiscal year, or when impairment indicators arise. As required by ASC Topic 350 “Intangible - Goodwill and Other”, the Company uses a fair-value-based approach to test for impairment.

CONSTRUCTION IN PROGRESS

LAND USE RIGHTS

Land use rights represent acquisition of land use right rights of agriculture land from farmers and are amortized on the straight line basis over the respective lease periods. The lease period of agriculture land is in the range from 10 years to 60 years. Land use rights purchase prices were determined in accordance with the P.R.C Government’s minimum lease payments of agriculture land and mutually agreed between the company and the vendors. No independent professional appraiser performed a valuation of land use rights at the balance sheet dates.

CORPORATE JOINT VENTURE

A corporation formed, owned, and operated by two or more businesses (ventures) as a separate and discrete business or project (venture) for their mutual benefit is considered to be a corporate joint venture. Investee entities, in which the company can exercise significant influence, but not control, are accounted for under the equity method of accounting. Under the equity method of accounting, the company’s share of the earnings or losses of these companies is included in net income.

A loss in value of an investment that is other than a temporary decline is recognized as a charge to operations. Evidence of a loss in value might include, but would not necessarily be limited to absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.

VARIABLE INTEREST ENTITY

An entity (investee) in which the investor has obtained less than a majority-owned interest, according to the Financial Accounting Standards Board (FASB). A variable interest entity (VIE) is subject to consolidation if a VIE is an entity meeting one of the following three criteria as elaborated in ASC Topic 810-10, Consolidation.

(a) the 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

If a firm is the primary beneficiary of a VIE, the holdings must be disclosed on the balance sheet. The primary beneficiary is defined as the person or company with the majority of variable interests

TREASURY STOCK

Treasury stock consists of a Company’s own stock which has been issued, but is subsequently reacquired by the Company. Treasury stock does not reduce the number of shares issued but does reduce the number of shares outstanding. These shares are not eligible to receive cash dividends. Accounting for excesses and deficiencies on treasury stock transactions is governed by ASC 505-30-30.

State laws and federal agencies closely regulate transactions involving a company’s own capital stock, so the purchase of outstanding shares and converting them into treasury shares must have a legitimate purpose. Some of the most common reasons for purchasing outstanding shares are as follows:

(i) to meet additional stock needs for various reasons, including newly implemented stock option plans, the issuance stock for convertible bonds or convertible preferred stock, or a stock dividend;

(ii) to eliminate the ownerships interests of a stockholder;

(iii) to increase the market price of the stock that returns capital to shareholders; and

(iv) to potentially increase earnings per share of the stock by decreasing the shares outstanding on the same earnings.

The cost method of accounting for treasury stock shares has been adopted by the Company. The purchase of outstanding shares is treated as a temporary reduction in shareholders’ equity in view of the expectation to reissue the shares instead of retiring them. When the Company reissues the treasury shares, the temporary account is eliminated. The cost of treasury stock shares reacquired is charged to a contra account, in this case a contra equity account that reduces the stockholder equity balance.

INCOME TAXES

The Company accounts for income taxes under the provisions of ASC 740 “Accounting for Income Taxes”. Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

The provision for income tax is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred taxes area accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred income taxes are calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also adjusted in the equity accounts. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. ASC 740 also prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. ASC 740 also provides guidance related to, among other things, classification, accounting for interest and penalties associated with tax positions, and disclosure requirements. Any interest and penalties accrued related to unrecognized tax benefits will be recorded in tax expense.

POLITICAL AND BUSINESS RISK

The Company's operations are carried out in the P.R.C. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the P.R.C., and by the general state of the P.R.C.'s economy. The Company's operations in the P.R.C. are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLE ASSETS

In accordance with ASC 360, “Property, Plant and Equipment”, long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company reviews the carrying amount of its long-lived assets, including intangibles, for impairment, at the end of each fiscal year. An asset is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is considered not recoverable, the asset is adjusted to its fair value. Fair value is generally determined based on discounted future cash flow. As of September 30, 2014 and December 31, 2013, the Company determined no impairment losses were necessary.

EARNINGS PER SHARE

As prescribed in ASC Topic 260 “Earning per Share”, Basic Earnings per Share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company’s common stock at the average market price during the period.

FOREIGN CURRENCY TRANSLATION

The reporting currency of the Company is the U.S. dollars. The functional currency of the Company is the Chinese Renminbi (RMB). For those entities whose functional currency is other than the U.S. dollars, all assets and liabilities are translated into U.S. dollars at the exchange rate on the balance sheet date; shareholder equity is translated at historical rates and items in the statements of income and of cash flows are translated at the average rate for the period.

Because cash flows are translated based on the weighted average translation rate, amounts related to assets and liabilities reported in the statements of cash flows will not necessarily agree with changes in the corresponding balances in the balance sheets. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the consolidated statements of equity.

For the nine months ended September 30, 2013

Translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of income and comprehensive income as incurred. The balance sheet amounts with the exception of equity as of September 30, 2013 and December 31, 2012 were translated at RMB6.15 to $1.00 and RMB6.29 to $1.00, respectively. The average translation rates applied to the consolidated statements of income and comprehensive income and of cash flows for the nine months ended September 30, 2014 and September 30, 2013 were RMB6.21 to $1.00 and RMB6.33 to $1.00, respectively.

For the nine months ended September 30, 2014

Translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of income and comprehensive income as incurred. The balance sheet amounts with the exception of equity as of September 30 2014 and December 31, 2013 were translated at RMB 6.15 to $1.00 and RMB6.15 to $1.00, respectively. The average translation rates applied to the consolidated statements of income and comprehensive income and of cash flows for the nine months ended September 30, 2014 and September 30, 2013 were RMB6.15 to $1.00 and RMB6.2 1to $1.00, respectively.

ACCUMULATED OTHER COMPREHENSIVE INCOME

RETIREMENT BENEFIT COSTS

STOCK-BASED COMPENSATION

The Company adopts both ASC Topic 718, “Compensation - Stock Compensation” and ASC Topic 505-50,”Equity-Based Payments to Non-Employees” using the fair value method in which an entity issues its equity instruments to acquire goods and services from employees and non-employees. Stock compensation for stock granted to non-employees has been determined in accordance with this accounting standard and the accounting standard regarding accounting for equity instruments that are issued to other than employees for acquiring, or in conjunction with selling goods or services, as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured. This accounting standard allows the “simplified” method to determine the term of employee options when other information is not available. Under ASC Topic 718 and ASC Topic 505-50, stock compensation expenses is measured at the grant date on the value of the option or restricted stock and is recognized as expenses, less expected forfeitures, over the requisite service period, which is generally the vesting period.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

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.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity of these instruments.

NEW ACCOUNTING PRONOUNCEMENTS

The Company does not expect any recent accounting pronouncements to have a material effect on the Company’s financial position, results of operations, or cash flows.

In February 2013, the FASB issued guidance on disclosure requirements for items reclassified out of Accumulated Other Comprehensive Income (“AOCI”).This new guidance requires entities to present (either on the face of the income statements or in the notes) the effects on the line items of the income statement for amounts reclassified out of AOCI. The new guidance will be effective for us beginning July 1, 2013. Other than requiring additional disclosures, there is no material impact on the consolidated financial statements upon adoption.

In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent releases any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance was effective for us beginning July 1, 2014. There is no material impact on the consolidated financial statements upon adoption.

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists”. These amendments provide that an unrecognized tax benefit, or a portion thereof, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carry forward, except to the extent that a net operating loss carry forward, a similar tax loss, or a tax credit carry forward is not available at the reporting date to settle any additional income taxes that would result from disallowance of a tax position, or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, then the unrecognized tax benefit should be presented as a liability. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU 2013-11does not have a material impact on the Company’s consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. Management is currently evaluating the impact of this pronouncement on our consolidated financial statements.

PROGRESS REPORTS AND SUBSEQUENT EVENTS.

l Table (PS 1) below shows the progress reports and subsequent events on operational affairs of each subsidiary as at Q3 2014:

Name of
subsidiaries	Operation divisions	Description
SJAP
	Cattle farming & fattening	During this quarter, we sold 1,250 and 3,525 head of cattle from our own farm and the cooperative growers, respectively, totaling 4,775 head of fattened cattle at an average live weight of 727 kg / head with average sales of RMB 30 / kg of live weight or at RMB21,810 / head. At this rate, we are expecting that the cooperative growers generated 19.2% of gross profit from each fattening period of 90 days.

	Fertilizer	This quarter sales of fertilizer decreased to just over 2,100 MT due mainly to (i) there were no intercompany sales to our Hunan operation because Hunan HSA has established its second production plant that is now self-sufficient and (ii) months in this quarter are not the months to apply fertilizer heavily, but rather mainly supplying minor sales to local vegetable and produce growers.

	Bulk livestock feed	The averaged consumption of Bulk Feed is at about 0.5 MT / head / month which is equivalent to 1.5 MT / head / 90 days representing cost of RMB1,540 / head of fattened cattle / 90 days based on our current sales price of RMB1,027 / MT. This quarter there were over 8,200 MT of Bulk Feed being used and sold.

	Concentrated stock feed	Average consumption of "Concentrate Feed" during the fattening period is at 0.7 Kg / head / day representing around 3,500 MT and 4,125 MT were being used by our fattening operation and sold to regional non co-op buyers, respectively.

	Slaughterhouse	There were 845 head of cattle being slaughtered during the quarter, out of which 506 head having been de-boned grossing 285 MT of meat product and just over 28 MT of bones representing a recovery rate of 62%.

	Deboning & processing	Apart from the said 506 head of cattle being deboned, there was an additional 88 MT of imported quarter-cut beef and 126 MT of imported 6-cut mutton from Australia being deboned during the quarter. Collectively, they generated just over $ 5.79 Million in revenue for SJAP from its slaughtering and de-boning activities.

	Others	All grounds surrounding the slaughterhouse compound have been finished as at the end of Q3 2014, however, external access road work is still in progress pending the local Government's work schedule to allow its completion. All other Phase (2) work (i.e. the live cattle yards, cold and dry storages, staff quarters, etc.) are in progress.

		At the end of Q3 2014 there were two concession stores in operation in Tesco stores and at the end of October 2014 there are 3 additional stores opened for business making a total of 5 concession stores at Tesco. All store location addresses are posted on our web-site.

		* Please refer to the pictures below for some of SJAP's development in progress.

HSA
	Fertilizer	HSA completed its expanded fermentation facility during Quarter 3 of 2014, and has produced over 10,000 MT of fertilizer and sold over 13,000 MT of various types of fertilizers for the lake fishermen, grapes and other produce growers and general distributors. At the same time, it produced over 20 MT of specially designed and packaged fertilizer for the domestic markets aiming at distribution into supermarket chains of the City Centers to capitalize on the growing trend of indoor farming by the rising urban middle class.

	Cattle farming	During this Quarter, the Government Authority has approved HSA's application to develop a cattle station at its complex, and as such, anticipates construction of the cattle houses starting sometime in December 2014.

	Crop plantation	The season was good during the Quarter providing HSA a good harvest of over 8,000 MT of yellow grasses, and since HSA's cattle farm development work has been delayed, it is expected that these yellow grasses will be sold to regional cattle farmers during the next few months of the fast approaching winter.

	Others	* Please refer to the pictures below for some of HSA's development in progress.

SJAP: This season’s harvest and baling of the Bulk livestock feed and the latest look of the Slaughterhouse &Deboning facility site.

A mockup of our first meat counters at Tesco

HSA: Commissioning of second newly established fertilizer production plant at Hunan HSA.

l Table (PS 2) below shows the progress reports and subsequent events on operational affairs of each subsidiary (continued)

Subsidiary	Operation division	Description

JHST (HU Plantation)	Immortal Vegetables	During this Quarter, there were 152.5 MT of fresh Immortal vegetables harvested from about 70 Mu of plantation from which about 15 MT of dried plants were processed, packed, and sold to distributors at an average price of RMB450 / Kg enhancing revenue over $1.11 million for JHST.

	HU Flowers	This Quarter, the harvest of just over 18.8 million pieces is likely the end of this year's growing season. During October 2014, there were very little flowers being harvested resulting in a very short season compared to other normal years. In this respect, the Company is seeking the help of agriculture experts aimed at improving the plantation's yield even under extremely wet conditions as experienced this year.

	Drying & Processing	The application to Government authorities to convert 50 Mu of agriculture land into industrial land is pending approval to allow construction of additional drying and production facilities. At this time, there is no further indication as to when the application will be approved.

	Others	JHST has completed its construction of its new storage and office during this Quarter.

		* Please refer to pictures below showing the HU and Immortal Vegetable plantation this season and the new staff quarters.

		* Please visit our website (www.sinoagrofood.com) to see our latest video showing the sale of Immortal Vegetables.

The HU Plantation

The Immortal Vegetable Plantation

Matured Immortal Vegetable plants with flowers

Table (PS 4) below shows the progress reports and subsequent events on operational affairs of each subsidiary: (Continued)

Subsidiary	Operation division	Description

CA (Fishery)	(Existing Projects)

	Fish Farm (1) or (JFD)	By the end of September 2014, FF(1) has increased its prawn growing tanks to 10 along with 4 tanks for eels and 2 tanks for sleepy cods. Most of the prawns are Big Giant Prawn species along with two tanks of Grass Prawns and one tank of Mexican White for further trials and experiments. These two species of prawn require up to a 5% salinity level requiring the use of ocean salt for the mix, but have yet to reach optimal grow-out results. Our interest is to maintain these trials since the growth rate of these two species is far superior to that of the Big Giant Prawn. We are confident that, given more time, we will discover the solution.

	Fish Farm (2)	FF(2) has proven thus far that after its dams had been converted into RAS systems, although in an outdoor environment, it has the ability to grow-out eels, and therefore we are using this farm to grow eels from the fingerling stage to adult eels anywhere up to 1.5 to 1.8 Kg / eel then sending them to FF(1) for further fattening up to 3 Kg / eel. So far, this process is proving successful.

	Prawn Farm (1)	During the Quarter, PF(1) completed its construction of the additional APM tanks and is now working on installation of all filters and equipment, targeting to start production operation within the last quarter of 2014. It will have more than 12 APM tanks and an onset of fingerling prawn tanks improving its growing capacity from its original 4 tanks. If all goes well, the construction of an adjacent Hydroponic farm will be started during Q4 2014, and upon its completion, we shall have the first demonstrated model of commercial Aquaculture cum Hydroponic farm in China, if not the world.

	Prawn Farm (2)	During the Quarter, PF(2) completed 6 semi-enclosed dams and is operating 12 other semi-RAS and outdoor grow-out dams producing prawns, eels and fish having harvested over 30 MT of Mexican white and grass prawns that seem to grow well under such conditions, especially since PF(2) has sources of salt water nearby.

	R & D station	Some of newly developed species of fish by our R&D Station have been grown in open dams at the New Zhongshan project, which has several existing dams that will be employed over the next few years as development allows.

		* Please refer to the pictures below showing the current status of FF(1), PF(1) and PF(2)

Visitors from UK at FF(1)

Prawn Farm (1): lettuce are doing well using the recycled waste from FF(1)

Prawn Farm (1): Pictures showing PF(1) at Enping, the constructed additional showroom, storage and staff quarters

Prawn Farm (1): Finishing work on the Construction on the extension of APM tanks at PF(1)

Prawn Farm (2): Construction of the semi-opened RAS Dams and the harvesting of fish

The big grass prawns (16 weeks old) above (and their 7 days old fingerling below). Both are in high demand.

Table (PS 5) below shows the progress reports and subsequent events on operational affairs of each subsidiary: (Continued)

Subsidiary	Operation division	Description

CA (Fishery)	Zhongshan New Prawn Project (ZSNP)	During the Quarter, ZSNP has completed the construction and building of the complex consisting of offices, staff quarters, conference room, storage, staff canteen and parking areas, as well as landscaping encompassing a total built-up area of over 2,000 m2 at the front entrance of the property to house over 20 personnel and provide working and office space required in Phase (1) of the development.

		Work is now in progress for the construction of Stage (1) of the APM farms that will have the capacity to produce 10,000 MT / year. As all APM tanks are modular such that it is expecting, by the end of March 2015, its first lot of modules to produce 2,000 MT / year collectively will be in operation.

		* Please refer to the pictures below showing the latest developments of the new Zhongshan Prawn project (ZSNP)

Zhongshan New Prawn Farm Project: Finishing the construction of the office, staff quarters, canteen, etc.

Construction of the workers quarter for the construction workers and the first lots of APM farms.

Table (PS 6) below shows the progress reports and subsequent events on operational affairs of each subsidiary: (Continued)

Subsidiary	Operation division	Description

SIAF (Corporate & Trading)	Consulting & Services	The following work was carried out during Q3 2014:

		Works are in progress on the expansion of the Restaurant (4) at Zhongshan City.

		After the renovation and alternation of Restaurant (1) turning it into a Steak House proves to be a success catering in an average over 500 customers per day and each week-end there are always a long line of waiting clients.

		In so far, we have established 5 restaurants with three of them are making profit and two are still losing, and we are aiming to improve their financial performances as soon as possible now that we have established three viable concepts that are receptive by the middle classes.

		The small meat and seafood (semi-wholesale and mainly retail shop) is in operation during the Quarter, and its current activities we are expecting it to be self-sustained even in its early days of operation and targeting that it will be profitable within 3 months of operation.

		A Wholesales and distribution center is being developed and constructed in the Shanghai City. The center is having over 3000 m2 of built-up areas situated in an industrial zoned complex not far from the PoTung District and it will act as a central hub to service the Shanghai wholesale markets, Tesco Chain stores, regional distributors as well as other super market chains in Shanghai with seafood and meats. It is expecting this center will be in operation within December 2014, and is targeting to generate sales up to 12,000 MT of meat and 5,000 MT of seafood per year within the next one to two years through this center.

	Imported goods	In Madagascar, the Company is organizing with a number local businessmen to supply us with processed seafood (i.e., cooked and peeled frozen crayfish and crab meats, frozen groupers and snappers etc.) targeting to complete all arrangements including export permits within the fourth quarter of 2014 to start shipments early next year.

	Others	* Please visit our website for access to videos showing our new Madagascar packaging facility, as well as the collection of crabs and crayfish from that region.

The new steak house with customers waiting out-side of the restaurant each week-end.

The new wholesale and distribution center cum office at PoTung District Shanghai City.

Establishing a corporate office in Stockholm, Sweden

The Company has many Swedish shareholders. As a result, the Company is planning to establish a corporate office that will have professional staffs (inclusive of additional directors) in Stockholm, Sweden to provide proficient and more updated IR, PR and financial information of the Company to our shareholders in Sweden as well as elsewhere and to explore other business and corporate opportunities that may be available to the Company in the Nordic region (e.g., SAFS’ involvement currently in a joint venture to develop a fishery operation in Norway).

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

We have also evaluated our internal controls for financial reporting, and there has been no change in our internal control over financial reporting that occurred during the nine months ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None

ITEM 1A.

RISK FACTORS

Not applicable

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period covered by this quarterly report, we issued an aggregate of 7,930,179 shares of our common stock to 3 Chinese persons and 1 entity in Stockholm Sweden. The shares were issued pursuant to the exemption from registration under the Securities Act provided by its Section 4(a)(2). The shares were issued in consideration for extinguishment of debt in the aggregate amount of $2,431,374, payments for workers entitlement of $0 and payments for professional service consultants for $1,500,000.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

31.1		Section 302 Certification of Principal Executive Officer+
31.2		Section 302 Certification of Principal Financial Officer+
32.1		Section 906 Certification of Principal Executive Officer and Principal Financial Officer *
101.INS		XBRL Instance Document +
101.SCH		XBRL Taxonomy Extension Schema Document +
101.CAL		XBRL Taxonomy Calculation Linkbase Document +
101.LAB		XBRL Taxonomy Labels Linkbase Document +
101.PRE		XBRL Taxonomy Presentation Linkbase Document +
101.DEF		XBRL Definition Linkbase Document +

+filed herewith

* submitted herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SINO AGRO FOOD, INC.

November 13, 2014	By:	/s/ LEE YIP KUN SOLOMON
		Lee Yip Kun Solomon
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

November 13, 2014	By:	/s/ LEE YIP KUN SOLOMON
		Lee Yip Kun Solomon
		Chief Executive Officer, Director
		(Principal Executive Officer)

November 13, 2014	By:	/s/ OLIVIA LAI
		Olivia Lai
		Chief Financial Officer
		(Principal Financial Officer)

November 13, 2014	By:	/s/ TAN POAY TEIK
		Tan Poay Teik
		Chief Marketing Officer and Director

November 13, 2014	By:	/s/ CHEN BOR HANN
		Chen Bor Hann
		Corporate Secretary and Director

November 13, 2014	By:	/s/ YAP KOI MING
		Yap Koi Ming
		Director

November 13, 2014	By:	/s/ NILS ERIK SANDBERG
		Nils Erik Sandberg
		Director

November 13, 2014	By:	/s/ DANIEL RITCHEY
		Daniel Ritchey
		Director

November 13, 2014	By:	/s/ SOH LIM CHANG
		Soh Lim Chang
		Director