A. For the 3 months ended 31st March 2022, the Company's revenues and incomes are
generated from the following businesses activities:
1. Leasing of business activities
2. Investments in investees
Whereas
1. Consolidated revenues are generated from the leasing of following business
activities:
? The Organic fertilizer operation of HSA.
? Cattle farms operation of (MEIJI) & (JHMC)
? Plantation operation of (JHST)
2. Unconsolidated incomes are generated from the investments of following 2
investees:
? 45% equity holding in SJAP
? 36.6% equity holding in Tri-way
B. A summary of each business division and operations is described below:
C. B.1. Division (1) of leasing of operations:
? The Organic fertilizer operation of HSA.
The operation of Hunan Shenghua A Power Agriculture Co. Ltd. ("HSA") is in
manufacturing and sales of organic fertilizer. From 1stOctober 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
leasing contract.
The table (a) below shows HSA's 2022Q1leasing contract's financial results:
US$
RMB equivalent Notes
Leasing revenue 9,410,200 1,481,921
Administration expenses
All HSA's administration charges
and expenses are being billed
Depreciation (4,786,486 ) (753,777 ) directly in SIAF's account
Amortization (1,286,217 ) (202,554 )
Others & miscellaneous (1,971,000 ) (310,394 )
Leasing net incomes 1,366,497 215,196
? The plantation operation of (JHST)
Plantation operation 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), crops of vegetables and immortal
vegetables (dried) are being grown and 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 leasing contract.
7
The table (b) below shows JHST's 2021 leasing contract's financial results:
US$
RMB equivalent Notes
Leasing revenue 4,230,435 666,210
Administration expenses
Depreciation and Amortization
charges are being deduct directly
Depreciation (2,159,054 ) (340,009 ) from JHST's leasing account
Amortization (862,008 ) (135,749 )
Others and miscellaneous expenses
are being billed to SIAF's
Others & miscellaneous (1,290,000 ) (203,150 ) account
Leasing net incomes (80,627 ) (12,697 )
? The cattle farms operation of (MEIJI) & (JHMC)
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 being
grown, fatten and 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 leasing contract.
The table (C) below shows MEIJI's 2021 leasing contract's financial results:
RMB US$ Notes
equivalent
Leasing revenue 3,423,752 539,174
Administration expenses
Depreciation (989,133 ) (155,769 ) Depreciation and Amortization
charges are being deduct
Amortization 0 0 directly from MEIJI's leasing
account
Others & miscellaneous (399,780 ) (62,957 ) Others and miscellaneous
expenses are being billed to
SIAF's account
Leasing net incomes 2,034,839 320,447
The total leasing revenues and gross profits for fiscal year ended 31st March
2022 are $2,687,305 and $1,099,447 respectively representing 100% of the Group's
total consolidated revenue and gross profit comparing to fiscal year ended 31st
March 2021 revenue of $2,633,393 and gross profit of $1,077,390. The differences
of the two years revenues and gross profits are primarily due to the
appreciation of RMB averaging from 2021Q1's US$1 = RMB 6.48 to 2022Q's
US$1=RMB6.35.
Whereas the general expenses and costs of the leasing contracts are recorded in
others and miscellaneous expenses consisting cost items of maintenances,
replacements, security, legal, services, Government levies and taxes and the
group's corporate management of the leasing contracts etc.
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Other divisions
C.1. Division (3) of the Marketing & Trading operation of The Corporate Sector
This division is referring to the trading segment of business operations of the
Group named internally under corporate division of Sino Agro Food, Inc.,
including import/export business, corporate affairs and consulting and service
operations provided to projects that are not included in CA's fishery
development activities. 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 impossible and
unprofitable to continue the imports of live seafood, and the poor political
relationship between China and Australia in 2020 induced high risks on the
imports of Australian beef. 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. Although
in so far the Company achieved minimal financial impacts due mainly to the
adversities caused by the impacts of Covid-19 limiting oversea and domestic
logistic, air flights and shipping services, restricting custom clearing
services, inconstancy of supplies and deliveries and increasing costs and
expenses of sales etc. making it extremely difficult to perform the trading
activity effectively.
Therefore, there was no sales revenue generated in fiscal year 2020, 2021 and up
to 31st March 2022 (Q1 2022) for Division (3).
Nevertheless presently the Company has registered in its book multiple of US$
hundred millions of supplies and sales in locally produced corns (for China
domestic end users), imported sugars from Brazil, rape seed oil from Russia and
coals from Indonesia for sales in China etc. that will be initiated as soon as
the Company will finalize the seed capital needed for the establishment of bank
instruments to generate the sizable trades. Once when these trading will be
started, collectively they will bring in multiple of US$ tens of millions in
gross profit per year to support the Company's cash flows at reasonable high
levels. In this respect, the Company is optimist that the said seed capital will
be materialized within a further reasonable period on or before the end of Q2
2022.
C.2. Division (4) of the Project Development of (CA)
This is referring to the fishery operations of Capital Award Inc. ("Capital
Award" or "CA") covering its engineering, technology and consulting service
management of fishery and agriculture farms, technology transfers and seafood
sales and marketing, where;
Capital Award generated 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:
? 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.
? 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.
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 for fiscal year 2020
and 2021 for Division (4).
CA's Potential project in 2022:
In July 2020 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. Up until the date of this report, stringent traveling restriction
between China and Madagascar has not been relaxed such that we have not been
able to send 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 but to wait until such time the said
traveling restriction can be relaxed before sending staffs to Madagascar
hopefully from June 2022 to start up the trading of cassavas and the development
of cassavas farms etc.
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3. CONSOLIDATED RESULTS OF OPERATIONS
2.1. Part A. Audited Income Statements of Consolidated Results of Operations for
the three months ended March 31,2022, compared to the three months ended
March 31,2021
A (1) Income Statements (unaudited)
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