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 2018 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.

1. Consolidated revenues are generated from business activities as follows:

1.1. The Organic fertilizer of HAS

From 1st October 2019, HSA leased its fertilizer operation to Mr. Lee Ping (the
head of the existing management team) as such HSA’s revenues are derived from
leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from HSA but
leasing and contracting revenue of $2,653,964 representing 51% of the group’s
revenue of $5,242,971 and gross profit of $2,653,964 compares to the group’s
total gross profit of -4,021,315 for six months ended 31.12.2021: whereas
revenue for the six months ended June 30, 2020 was USD 2.73 million or 55.18
percent of the Company’s total sales of goods revenue of USD 4.9 million in the
same period. Gross profit for same division for the six months ended June 30,
2020
was USD2.7million or 72% of the Company’s total gross profit in sales of
goods of USD 3.78 million in the same period.

1.2 Cattle farms (MEIJI) & (JHMC)

From 1st October 2019, MEIJI leased its Cattle farms’ operation to Mr. Fan Xin
June
(the head of the existing management team) as such MEIJI’s revenues are
derived from leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from MEIJI
but leasing and contracting revenue of $1,280,674 representing 24% of the group
total revenue of 5,242,971 and gross profit of $909,434 compares to the group’s
total gross profit of -4,021,315 for six months ended June 30, 2021: whereas
revenue for the six months ended June 30, 2020 was $0.97 million, or 19.69%, of
the Company’s total sales of goods revenue of USD 4.95million in the same
period. Gross profit for the Cattle Farm (MEIJI) division for the six months
ended June 30, 2020 was $0.76 million, or 19.98% percent of the Company’s total
gross profit on sales of goods of $3.78 million in the same period.



 1.3 Plantation of (JHST)



From 1st October 2019, JHST leased its Cattle farms’ operation to Mr. Fan Xin
June
(the head of the existing management team) as such MEIJI’s revenues are
derived from leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from JHST but
leasing and contracting revenue of $1,308,333 representing 28% of the group
total revenue of 5,242,971 and gross profit of $457,917 compares to the group’s
total gross profit of – of -4,021,315 for six months ended June 30, 2021:
whereas revenue for the six months ended June 30, 2020 was $1.24 million, or
25.13%, of t the Company’s total sales of goods revenue of USD 4.95 million in
the same period. Gross profit for the plantation division for t the six months
ended June 30, 2020 was $0.30 million, or 7.88% percent of the Company’s total
gross profit on sales of goods of $3.78 million in the same period.

Note:We are receiving cash flow from these leasing and contracting (L&C)
payments, however there are minimal surplus of net positive cash flows resulted
from the L&C proceeds due primarily to the effect of the Covid-19 Pandemic has
been slowing down their operations and in turn increasing the aging period of
account receivables, the necessary requirements of capital expenditures and
costs to satisfy the permissive operational conditions regulated by various
Government Authorities, the needs of certain capital expenditures to meet
productivities to keep up with the markets’ requirements and changing conditions
and the maintenance and up keeping cost of the whole properties (inclusive
operational and non-operational properties) etc. that are using up most of their
account receivables. Somehow right now it is a sustainable and acceptable
condition because under current financial situation and environment of the
Company, we do not need to fund the said referred expenditures and costs.

1.4 Marketing & Trading operation of The Corporate Sector

$0 and 0 for six ended June 30, 2021, and 2020.

1.5 Project Development of (CA)

The project developments (or Technology engineering consulting and services)
works are carried out by CA on aquaculture related projects and by SIAF and
MEIJI on non-aquaculture and agriculture projects:

$0 and 0 for six ended June 30, 2021, and 2020.



                                       1





                            Back Ground and history

     A summary of each business division and operations is described below:



Businesses Division:



? Fishery Division refers to the operations of Capital Award Inc. (“Capital

Award” or “CA”) covering its engineering, technology and consulting service

management of fishery farms, technology transfers and seafood sales and

   marketing, where;



Capital Award generates revenues from providing engineering consulting services
as turnkey contractors to owners and developers of fishery projects that are
being designed and engineered into turnkey contracts by Capital Award in China
using its A Power Module Technology Systems (“APM”) 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. From January 2020 up to the date of this annual report CA has not
been able to do any fishery project or fishery project development due to the
effects of the Pandemic COVID-19 as such, there was no revenue generated from
January 2020 to May 31st 2021. However, the Company and CA have been exploring
other possible business opportunities during the period and SIAF became the
joint venture partner of the China Africa Joint Chamber of Commerce and
Industries
(CAJCCI) which is a non-profit organization established in
November 2016 by the China and Africa Governments to plan and to implement
agriculture projects and related developments in Africa through development fund
of US$60 Billion every three years provided by and granted by the China
Government to Africa Nations in Agriculture industry projects and developments
etc. In March 2021, development project papers in (i). Development of Trading of
exporting dried cassavas to China and exporting of plant and equipment from
China to Madagascar and developments of cassavas plantations and related value
added processing and drying of cassavas on 100,000 acres of land in Madagascar
and (ii). Development of goat farms and related value added processing in
Madagascar were submitted to CAJCCI and Government of Madagascar; by early
May 2021, both CAJCCI and the Government of Madagascar gave consents to both
projects such that we have obtained official invitation to go to Madagascar to
initiate the Projects subjecting to the Pandemic COVID-19 situation and
conditions will be improved and controlled, we shall have our team members
(including various professionals and professionals from CAJCCI) to assist our
current Madagascar management teams of two members in Madagascar to start up the
Projects.




(B). Seafood Sales from CA's projected farms; became a discontinued segment of
operations from October 5, 2016 when Tri-way was disposed to other third parties
in term Tri-way was reclassified as an unconsolidated equity investee on same
date.



?      Corporate & Others Division refers to the trading segment of business
       operations of the Group named internally under corporate division 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. Over the years up until
       end of fiscal year 2019 the corporate division imported mainly live
       seafood from South Africa countries, Vietnam, Thailand, Russian and other
       nearby countries and frozen beef from Australia and South America
       countries; however it is due to the interruptions and adverse impacts
       caused by the Pandemic COVID-19 made it  unprofitable to continue the
       imports of live seafood.. The Corporate's trading division based on
       standalone figures ended up with  $ 0 as at  30 June 2021. However, over
       the years the Company has built up a strong base of connections and
       customers in China that provides an unique opportunity to the Company to
       develop an additional Trading Platform aiming to generate additional
       revenues, profits and most importantly positive cash flows, so from
       July 2020 onward, the corporate division started to explore the
       opportunities of importing some of the China markets' niche products and
       managed to start to secure sources of supply  for (i).  Frozen chicken
       products for arrival starting August 2021 (that China imports millions of
       metric tons annually) and frozen pork products from Brazil, USA, Argentina
       and other South America countries for arrival starting September 2021.  In
       this respect, China has been in shortage of pork since the pandemic of
       European Swine Diseases occurred in 2018 disrupted the domestic supply of
       pork estimated until year 2026). and (ii). Dried agriculture products
       (i.e. Dried Cassavas that has vast industrial and consumable food
       processing applications, that China has an annual short fall of over 4
       million MT; peanuts, cashew-nuts for arrival starting September 2021 and
       Soybeans that China imports multiples of millions of MT annually, etc.)
       from South Africa Countries (i.e. Madagascar, Ghana, Nigeria and Cote
       D'lovire etc.) and Brazil for arrival at later months (From November) of
       2021 . The Company feels that with time, the trading division will
       prevailed leading the Company into a positive cash rich path targeting
       encourage performances to show starting from the early quarter 1 of fiscal
       year 2022.'




                                       2




Leasing and subcontracting of operations:



  ?      The operation of Hunan Shenghua A Power Agriculture Co. Ltd. ("HSA") is
         in manufacturing and sales of organic fertilizer. From 1st October 2019
         the Company contracted out its manufacturing and sales of organic
         fertilizer to its operational management; as such income of HSA is
         derived mainly from said management contract.




  ?      Plantation Division refers to the operations of Jiangmen City Heng ShengTai Agriculture Development Co. Ltd. ("JHST") in the HU Plantation
         business where dragon fruit flowers (dried and fresh), crops of
         vegetables and immortal vegetables (dried) 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.
         From 1st October 2019 the Company contracted out its plantation operation
         to its operational management; as such income of JHST is derived mainly
         from said management contract.




  ?      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 livestock wholesalers who sell them
         mainly to Guangzhou and Beijing livestock 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 (e.g., Cattle Farm 2) or related
         projects. From 1st October 2019 the Company contracted out its cattle
         operation to its operational management; as such incomes of JHMC are
         derived mainly from said management contract.


                                       3




Investments in equity investees:

SJAP: Up until 1st October 2019, cattle and beef divisional operation of our
partially owned subsidiary Qinghai Sanjiang A Power Agriculture Co., Ltd.
(“SJAP”) in manufacturing and sales of organic fertilizer, bulk livestock feed,
concentrated livestock feed, and the sales of live cattle inclusive of:
(a) cattle that are not being slaughtered in our own slaughter house operated by
Qinghai Zhong He Meat Products Co., Limited (“QZH”) are sold live to third party
livestock wholesalers, and (b) cattle that are sold to QZH and slaughtered and
deboned and packed by QZH; and the sales of meats deboned and packed by QZH that
are sold to various meat distributors, wholesalers and super market chains and
our own retail butcher stores. QZH is a fully owned subsidiary of SJAP; as such,
the financial statements of these three companies (SJAP, QZH and HSA) are
consolidated into our wholly owned subsidiary, A Power Agro Agriculture
Development (Macau) Limited
(“APWAM”), as one entity. SJAP and QZH are both
variable interest entities over which we exercise significant control. As of
December 30, 2017, QZH was derecognized as variable interest entity and its
operating profit and/or loss no longer accretive to the Company’s 41.25% holding
in SJAP, a variable interest entity. On September 30th 2019, Mr. Solomon Lee resigned as the Chairman of SJAP resulting in categorization of SJAP as an
Investor in Associate from a subsidiary status, and SJAP contracted out its
business operations to its existing operational management, as such it is not a
variable interest entity and SJAP was reclassified as an unconsolidated equity
investee and SJAP’s cattle and beef operation is discontinued on same date.



                                       4




TWL: Up until 5th October 2016, our divisional fishery production and sales
operation was with our fully owned subsidiary Tri-way Industries Limited (TWL or
Tri-way, a private company incorporated in Hong Kong ) and our 75% owned
subsidiary Jiangman Fishery Development Co. Ltd. (JFD, a limited liability
company incorporated in China) operating one indoor APM farm in Enping District,
Enping City. On 5th October 2016 we carve out Tri-way that became an
unconsolidated investee of the Company resulted with the Company owning 36.6%
equity interest in Tri-way derived from (i) 23.89% as a result of retained
interest in Tri-way, and (ii) 12.71% acquired in exchange for outstanding debt
owed to the Company at the time.

Somehow, the extremely poor operational performances of its Mega Farm (AFF 4 &
5) and its incomes in 2017 to 2019 were generated mainly from the operations of
AFF 1, 2, 3a & 3b and other sub-contracted farms. Coupling the said poor
performances of the Mega farm, impacts of the COVID-19 Pandemic of 2020 caused a
complete write-off for AFF 1, 2,and 3 as well as to Tri-way’s sub-contracted
farms incurring losses over $77 million for the fiscal year of 2020 causing all
farms to stop work for over 7 months without sufficient workers, feed,
supplementary, medications, transportation and maintenances etc. to keep the
live stocks going and they all died during the period calculating to multiple
million pieces (equivalent to multiple of thousand metric tons). It is estimated
that it will cost over $80 million in Capital Expenditures and Working Capital
and two years to replace said live stocks and to bring the fishery operation of
the said Aqua-farms back to the revenue and income generated in fiscal year
2019. Currently Tri-way is in a very poor financial situation as such it is not
practically possible for Tri-way to revitalize and to rebuild its operations in
a hurry but to reduce its operations and to concentrate its efforts on
rebuilding of brood stocks, the production of fingerling and nursery stocks and
repairing the damages etc. It is anticipating that under current conditions,
Tri-way will take a long period to recovery.




                                       5

© Edgar Online, source Glimpses



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