UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 June 30, 2013

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to __________

Commission file number 000-53343

ASIA GREEN AGRICULTURE CORPORATION
(Exact name of registrant as specified in its charter)

Nevada	26-2809270
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
Shuinan Industrial Area, Songxi County
Fujian Province, China	353500
(Address of principal executive offices)	(Zip Code)

(86) 0599-2335520
(Issuer's telephone number, including area code)

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [   ]

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” 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]
(do not check if a smaller reporting company)

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 August 8, 2013, the issuer had 36,823,626 shares of common stock outstanding.

ASIA GREEN AGRICULTURE CORPORATION

Quarterly Report on Form 10-Q

For the Quarterly Period Ended June 30, 2013

TABLE OF CONTENTS

		Page
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS		ii
PART I —FINANCIAL INFORMATION		1
Item 1.	FINANCIAL STATEMENTS	1
Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	19
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27
Item 4.	CONTROLS AND PROCEDURES	28
PART II —OTHER INFORMATION		29
Item 1.	LEGAL PROCEEDINGS	29
Item 1A.	RISK FACTORS	29
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29
Item 3.	DEFAULTS UPON SENIOR SECURITIES	29
Item 4.	MINE SAFETY DISCLOSURES	29
Item 5.	OTHER INFORMATION	29
Item 6.	EXHIBITS	29
SIGNATURES		30
EXHIBIT INDEX		31

-i-

EXPLANATORY NOTE

In this report, unless the context otherwise requires, the terms “AGAC,” “Company,” “we,” “us,” and “our” refer to Asia Green Agriculture Corporation, a Nevada corporation and/or its subsidiaries, as the case may be. We are a Nevada holding company and conduct substantially all of our business through our operating subsidiary Fujian Yada Group Co., Ltd. in China.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements, which reflect our views with respect to future events and financial performance. These forward-looking statements are identified by, among other things, the words "anticipates", "believes", "estimates", "expects", "plans", "projects", "targets" and similar expressions. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing general optimism about future operating results and the development of our products, are forward-looking statements.

Forward-looking statements are subject to certain events, risks, and uncertainties that may be outside of our control and that could cause actual results to differ materially from such statements. When considering forward-looking statements, you should carefully review the risks, uncertainties and other cautionary statements in this report as they identify certain important factors that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These factors include, among others, the risks described under Item 1A and elsewhere in this report, as well as in the other reports and documents we file with the SEC.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Except to the extent required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

-ii-

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

Asia Green Agriculture Corporation

Condensed Consolidated Statements of Income and Comprehensive Income

For the three and six months ended June 30, 2013 and 2012

(Stated in US Dollars)

		Three months ended						Six months ended
		June 30,						June 30,
		(unaudited)						(unaudited)
		2013			2012			2013			2012
Sales revenue	$	21,742,576		$	24,172,955		$	57,717,905		$	56,858,985
Cost of sales		(14,618,648	)		(15,681,369	)		(39,782,928	)		(38,541,927	)
Gross profit		7,123,928			8,491,586			17,934,977			18,317,058
Operating expenses
Administrative expenses		1,300,839			804,244			2,429,657			2,155,490
Selling expenses		431,349			407,273			777,093			954,886
		1,732,188			1,211,517			3,206,750			3,110,376
Income from operations		5,391,740			7,280,069			14,728,227			15,206,682
Government grant income		39,445			9,211			103,205			186,507
Other income (loss), net – Note 9		16,818			(253,291	)		41,245			237,793
Net finance costs - Note 8		(268,741	)		(385,942	)		(834,790	)		(720,533	)
Income before income taxes and noncontrolling interest		5,179,262			6,650,047			14,037,887			14,910,449
Income taxes - Note 7		(86,665	)		(20,086	)		(279,247	)		(269,125	)
Net income before noncontrolling interest		5,092,597			6,629,961			13,758,640			14,641,324
Net loss attributable to noncontrolling interest		5,122			-			22,007			-
Net income attributable to Company’s common stockholders	$	5,097,719		$	6,629,961		$	13,780,647		$	14,641,324
Net income before noncontrolling interest	$	5,092,597		$	6,629,961		$	13,758,640		$	14,641,324
Other comprehensive income
Foreign currency translation adjustments		2,229,363			65,612			2,995,202			829,510
Total comprehensive income		7,321,960			6,695,573			16,753,842			15,470,834
Comprehensive loss attributable to noncontrolling interest		1,795			-			17,609			-
Total comprehensive income attributable to Company’s common stockholders	$	7,323,755		$	6,695,573		$	16,771,451		$	15,470,834
Earnings per share: basic and diluted attributable to Company’s common stockholders - Note 10	$	0.14		$	0.18		$	0.37		$	0.40
Weighted average number of shares outstanding: basic and diluted		36,823,626			36,823,626			36,823,626			36,823,626

See the accompanying notes to condensed consolidated financial statements

- 1 -

Asia Green Agriculture Corporation

Condensed Consolidated Balance Sheets

As of June 30, 2013 and December 31, 2012

(Stated in US Dollars)

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	6,203,451	$	9,756,103
Restricted cash - Note 3		3,552,147		791,500
Trade receivables, net - Note 4		31,446,468		32,902,687
Held for trading investment - Note 17		-		81,250
Bill receivable		8,080		-
Other receivables, prepayments and deposits - Note 5		11,920,973		5,629,404
Inventories - Note 6		34,952,502		18,309,203
Deferred tax assets		1,354		1,326
Total current assets		88,084,975		67,471,473
Property, plant and equipment, net - Note 11		27,773,155		23,854,437
Deposits paid - Note 13		38,527,208		48,441,027
Land use rights - Note 12		35,905,193		25,711,762
TOTAL ASSETS	$	190,290,531	$	165,478,699
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade payables - Note 3	$	6,783,844	$	7,696,130
Bill payables - Note 3		1,821,232		1,583,000
Receipts in advance		554,459		190,275
Other payables and accrued expenses - Note 14		5,212,570		5,387,349
Amounts due to related parties - Note 15		440,419		345,054
Secured short-term borrowings - Note 16		21,911,344		14,260,908
Income tax payable		499,766		352,586
Total current liabilities		37,223,634		29,815,302
Deferred tax liabilities		27,974		27,403
TOTAL LIABILITIES		37,251,608		29,842,705
COMMITMENTS AND CONTINGENCIES - Note 20
STOCKHOLDERS’ EQUITY
Preferred stock: par value $0.001 per share; authorized 10,000,000 shares in 2013 and         2012; none issued and outstanding
Common stock: par value $0.001 per share; authorized 200,000,000 shares in 2013 and         2012; 36,823,626 shares issued and outstanding in 2013 and 2012		36,824		36,824
Additional paid-in capital		22,265,802		21,854,465
Statutory reserve - Note 19		10,127,590		9,611,614
Other surplus reserve - Note 19		8,308,154		8,308,154
Accumulated other comprehensive income		8,768,247		5,777,443
Retained earnings		103,312,165		90,047,494
TOTAL ASIA GREEN AGRICULTURE CORPORATION STOCKHOLDERS’ EQUITY		152,818,782		135,635,994
NONCONTROLLING INTEREST		220,141		-
TOTAL STOCKHOLDERS’ EQUITY		153,038,923		135,635,994
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	190,290,531	$	165,478,699

See the accompanying notes to condensed consolidated financial statements

- 2 -

Asia Green Agriculture Corporation

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

(Stated in US Dollars)

											Accumulated
					Additional				Other		other
	Common stock				paid-in		Statutory		surplus		comprehensive		Retained			Noncontrolling
	No. of shares		Amount		capital		reserve		reserve		income		earnings			interest			Total
Balance, December 31, 2012	36,823,626	$	36,824	$	21,854,465	$	9,611,614	$	8,308,154	$	5,777,443	$	90,047,494		$	-		$	135,635,994
Foreign currency translation adjustments	-		-		-		-		-		2,990,804		-			4,398			2,995,202
Capital contributions from noncontrolling interest	-		-		-		-		-		-		-			237,750			237,750
Net income (loss)	-		-		-		-		-		-		13,780,647			(22,007	)		13,758,640
Appropriation to statutory reserve	-		-		-		515,976		-		-		(515,976	)		-			-
Share-based compensation - Note 21	-		-		411,337		-		-		-		-			-			411,337
Balance, June 30, 2013	36,823,626	$	36,824	$	22,265,802	$	10,127,590	$	8,308,154	$	8,768,247	$	103,312,165		$	220,141		$	153,038,923

See the accompanying notes to condensed consolidated financial statements

- 3 -

Asia Green Agriculture Corporation

Condensed Consolidated Statement of Cash Flows

For the six months ended June 30, 2013 and 2012

(Stated in US Dollars)

		Six months ended June 30,
		(Unaudited)
		2013			2012
Cash flows from operating activities
Net income before noncontrolling interest	$	13,758,640		$	14,641,324
Adjustments to reconcile net income before noncontrolling interest to net cash (used in) provided by operating activities :-
Depreciation and amortization		961,878			881,333
Deferred taxes		-			(15,845	)
Unrealized gain of forward exchange contracts		-			(358,088	)
Realized gain of held for trading investments		(2,112	)		(195	)
Provision for obsolete inventories		8,083			9,809
Provision for doubtful debts		777			912
Share-based compensation		411,337			851,222
Changes in operating assets and liabilities :-
Trade receivables		2,272,270			(98,414	)
Bill receivable		(7,983	)		-
Other receivables, prepayments and deposits		(6,106,173	)		917,489
Inventories		(16,076,057	)		(10,335,419	)
Trade payables		(1,211,238	)		(697,693	)
Restricted cash held as collateral for forward exchange contracts		-			492,360
Receipts in advance		351,934			256,751
Other payables and accrued expenses		(848,093	)		44,467
Income tax payable		138,117			144,646
Net cash flows (used in) provided by operating activities		(6,348,620	)		6,734,659
Cash flows from investing activities
Payments to acquire and deposit for acquisition of property, plant and equipment		(4,246,423	)		(1,625,025	)
Proceeds from disposal of property, plant and equipment		30,529			12,257
Payments to acquire land use right		-			(12,621,279	)
Payments to acquire held for trading investments		-			(871,915	)
Refund of deposits for acquisition of land use rights		1,676,468			-
Proceeds from disposal of held for trading investments		84,760			792,845
Net cash flows used in investing activities		(2,454,666	)		(14,313,117	)
Cash flows from financing activities
Proceeds from secured borrowings		17,914,490			17,706,972
Repayments of secured borrowings		(10,651,056	)		(10,304,929	)
Decrease in loans from third parties		-			(158,530	)
Increase in restricted cash held as collateral for bill payables		(61,358	)		(1,108,900	)
Increase in restricted cash held as collateral for bank loans		(2,646,040	)		(3,273,645	)
Increase in bill payables		204,470			1,107,010
Advance from (repayments to) related parties		92,799			(615,982	)
Capital contributions from noncontrolling interests		237,750			-
Net cash flows provided by financing activities		5,091,055			3,351,996
Effect of foreign currency translation on cash and cash equivalents		159,579			121,959
Net decrease in cash and cash equivalents		(3,552,652	)		(4,104,503	)
Cash and cash equivalents - beginning of period		9,756,103			12,832,811
Cash and cash equivalents - end of period	$	6,203,451		$	8,728,308
Supplemental disclosures for cash flow information
Cash paid for :-
Interest, net of capitalized interest	$	694,703		$	457,537
Income taxes	$	132,067		$	130,285
Non-cash operating and investing activities:-
Transfer of withholding tax payable to amount due to related parties	$	-		$	630,040

See the accompanying notes to condensed consolidated financial statements

- 4 -

Asia Green Agriculture Corporation

Notes to Condensed Consolidated Financial Statements

(Stated in US Dollars)

1.	Corporate information and general
	Asia Green Agriculture Corporation (the "Company") was organized on May 21, 2008 as a Nevada corporation.
	On August 20, 2010, the Company completed the acquisition of Fujian Yada Co., Ltd. (“Fujian Yada”) and since that time has been engaged in the production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	The Company wholly owns the following subsidiaries and their principal businesses are as follows :-
	(i)	Misaky Industrial Limited ("Misaky") was incorporated in Hong Kong and its principal business is investment holding.
	(ii)	Sino Oriental Agriculture Group Limited ("Sino Oriental") was incorporated in the British Virgin Islands (the "BVI") and its principal business is investment holding.
	(iii)	Fujian Yada was established in the Peoples Republic of China (the "PRC") and its principal businesses are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(iv)	Fujian Yaxin Food Co., Ltd. ("Yaxin") was established in the PRC and its principal businesses are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(v)	Fujian Shengda Import & Export Trading Co., Ltd. ("Shengda") was established in the PRC and its principal business is trading of agricultural products to oversea customers.
	(vi)	Fujian Xinda Food Co., Ltd. ("Xinda") was established in the PRC and its principal businesses are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(vii)	Shanghai Yada Green Food Co., Ltd. ("Shanghai Yada") was established in the PRC and its principal businesses are trading and marketing of food products.
	(viii)	Fuzhou Yada Green Food Co., Ltd. ("Fuzhou Yada") was established in the PRC and its principal businesses are trading and marketing of food products.
	(ix)	Shixing Yada Forestry Development Co., Ltd. ("Shixing Yada") was established in the PRC and its principal businesses are production and marketing of bamboo related products.
	(x)	Yudu Yada Forestry Co., Ltd. ("Yudu Yada") was established in the PRC and its principal businesses are production and marketing of bamboo related products.
	(xi)	Jianyang Yaxin Agriculture and Forestry Development Co., Ltd. ("Jianyang Yaxin") was established in the PRC and its principal businesses are production and marketing of fresh produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(xii)	Fujian Sanda E-business Co., Ltd. ("Sanda E-business") was established in the PRC and its principal business is retailing packaged foods.
	(xiii)	Fujian Yada E-business Co., Ltd. ("Yada E-business") was established in the PRC and its principal business is retailing packaged foods.

- 5 -

2. Summary of significant accounting policies

Basis of consolidation and presentation

The accompanying unaudited condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulation and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2012.

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

Concentration of credit risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other receivables, prepayment and deposits. As of June 30, 2013 and December 31, 2012, substantially all of the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which the management believes are of high credit quality. With respect to trade receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

As of June 30, 2013 and December 31, 2012, the Company did not have any balance of gross trade receivables due from any individual customer that represented 10% or more of the Company’s gross trade receivables.

During the six months ended June 30, 2013 and 2012, the Company did not have sales to any individual customer that represented 10% or more of the Company’s consolidated sales.

Fair value of financial instruments

The Company adopted ASC 820 on January 1, 2008. The adoption of ASC 820 did not materially impact the Company’s financial position, results of operations or cash flows.

ASC 820 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which fair value option was not elected. The carrying amounts of the financial assets and liabilities approximate to their fair values due to short maturities or the applicable interest rates approximate the current market rates.

The fair values of secured borrowings are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Fair value measurements

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The Company uses the following three levels of inputs in determining the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available :-

Level 1 -	Quoted prices in active markets for identical assets or liabilities.
Level 2 -	Observable inputs other than quoted prices in active markets for identical assets or liabilities.
Level 3 -	Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

- 6 -

2.	Summary of significant accounting policies (Cont'd)
	The following items recorded or measured at fair value on a recurring basis in the accompanying condensed consolidated financial statements were based on the use of Level 1 inputs as of June 30, 2013 and December 31, 2012 :-

		Total fair value measurement
		as of
		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Held for trading investment	$	-	$	81,250

	Included in the following
	items of condensed consolidated
	statements of		Three months ended				Six months ended
	income and comprehensive income		June 30,				June 30,
			2013		2012		2013		2012
			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Realized gain recorded - held for trading investments	Other income (loss), net	$	871	$	195	$	2,112	$	195

The Company measures the fair value of held for trading investments by obtaining the quoted price in active markets. There were no changes in valuation techniques during the six months ended June 30, 2013 and 2012.

The Company did not have any financial instruments recorded or measured at fair value on a recurring basis in the accompanying condensed consolidated financial statements that were based on the use of Level 2 inputs as of June 30, 2013 and December 31, 2012.

	Included in the following
	items of condensed consolidated
	statements of		Three months ended					Six months ended
	income and comprehensive income		June 30,					June 30,
			2013		2012			2013		2012
			(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
Realized loss recorded - forward exchange contracts	Other income (loss), net	$	-	$	(44,765	)	$	-	$	(121,618	)
Unrealized (loss) gain recorded - forward exchange contracts	Other income (loss), net		-		(209,141	)		-		358,088
Total (loss) gain recorded		$	-	$	(253,906	)	$	-	$	236,470

The Company estimated the fair value of foreign exchange forward contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. There were no changes in valuation techniques during the six months ended June 30, 2012. The Company did not enter into any foreign exchange forward contracts during the three and six months ended June 30, 2013.

Noncontrolling interest

Noncontrolling interest resulted from the consolidation of a 70% owned subsidiary, Sanda E-business.

Recently issued accounting pronouncements

The Company evaluated all recently issued accounting pronouncements, namely ASU 2011-11, ASU 2011-12, ASU 2012-02, ASU 2012-04, ASU 2013-01, ASU 2013-02, ASU 2013-03, ASU 2013-04, ASU 2013-05, ASU 2013-07, ASU 2013-09 and ASU 2013-11. The Company does not expect these adoptions to have material impacts on the Company’s condensed consolidated financial statements.

- 7 -

3.	Restricted cash, bill payables and trade payables
	Restricted cash as of June 30, 2013 and December 31, 2012 consisted of the following:-

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Bank deposits held as collateral for bank loans - Note 16	$	2,682,560	$	-
Bank deposits held as collateral for bill payables - Note 3(a)		869,587		791,500
	$	3,552,147	$	791,500

Note :-
(a)	When the Company intends or is requested to settle its suppliers by issuance of bills, it is required to place deposits with banks equal to 50% (2012: 50%) of the bills amount at the time of issuance. These deposits will be used to settle the bills at maturity.

Trade payables represent trade creditors on open account. They are interest-free and unsecured. The normal credit term given by these suppliers to the Company ranges from one to three months.

4. Trade receivables, net

		June 30,			December 31,
		2013			2012
		(Unaudited)			(Audited)
Trade receivables	$	31,446,853		$	32,902,687
Less : Allowance for doubtful accounts		(385	)		-
	$	31,446,468		$	32,902,687

Trade receivables with carrying value of $1,773,444 and $1,593,782 as of June 30, 2013 and December 31, 2012 respectively were pledged as collateral under certain loan agreements (Note 16).

An analysis of the allowance for doubtful accounts for the six months ended June 30, 2013 and 2012 is as follows:

		Six months ended June 30,
		(Unaudited)
		2013			2012
Balance at beginning of the period	$	-		$	16
Provision for doubtful debts		777			912
Bad debts written off against trade receivables		(392	)		(153	)
Translation adjustments		-			(1	)
	$	385		$	774

Provision for doubtful debts of $777 and $912 were charged to operations during the six months ended June 30, 2013 and 2012 respectively. During the three months ended June 30, 2013 and 2012, provision for doubtful debts amounted to $385 and $597 respectively.

- 8 -

5. Other receivables, prepayments and deposits

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Prepayments*	$	10,711,400	$	4,465,025
Deposits		1,174,687		1,155,005
Other receivables		34,886		9,374
	$	11,920,973	$	5,629,404

* Represents primarily prepayment for the production of fresh produce which are expected to be recorded as cost of sales upon harvest within one year.

6. Inventories

		June 30,			December 31,
		2013			2012
		(Unaudited)			(Audited)
Raw materials and packaging materials	$	1,340,223		$	720,752
Bamboo and other growing crops		24,057,084			14,775,986
Finished goods		9,568,773			2,817,769
		34,966,080			18,314,507
Less: Provision for obsolete inventories		(13,578	)		(5,304	)
	$	34,952,502		$	18,309,203

	As of June 30, 2013 and December 31, 2012, the inventories with carrying amount of $1,015,452 and $419,743 were pledged as collateral under certain loan agreements (Note 16).
	Provision for obsolete inventories of $8,083 and $9,809 were charged to operations during the six months ended June 30, 2013 and 2012 respectively. During the three months ended June 30, 2013 and 2012, provision for obsolete inventories amounted to $3,169 and $7,115 respectively.
7.	Income taxes
	United States
	Asia Green Agriculture Corporation is subject to the United States of America Tax law at tax rate of 34%. No provision for the US federal income taxes has been made as the Company had no taxable income in this jurisdiction for the reporting periods.
	BVI
	Sino Oriental is incorporated in the BVI and, under the current laws of the BVI, are not subject to income taxes.
	Hong Kong
	Misaky is incorporated in Hong Kong and subject to profit tax at a rate of 16.5% on the assessable profits during the periods. No provision for Hong Kong profit tax has been made on Misaky as Misaky had no taxable income in this jurisdiction for the reporting periods.

- 9 -

7.	Income taxes (Cont'd)
	PRC
	Pursuant to the new PRC’s enterprise income tax (“EIT”) law, Fujian Yada, Yaxin, Xinda, Shengda, Shanghai Yada, Fuzhou Yada, Shixing Yada, Yudu Yada, Jiangyang Yaxin, Sanda E-business and Yada E-business are generally subject to EIT at the statutory rate of 25%. The Company’s profits generated from its fresh produce and certain processed produce, which have been qualified as agriculture product under the EIT law, are exempted from EIT.
	In July 2006, the FASB issued ASC 740-10-25. This interpretation requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The Company adopted this ASC 740-10-25 on January 1, 2007. Under the new EIT Law which became effective on January 1, 2008, the Company may be deemed to be a resident enterprise by the PRC tax authorities. If the Company was deemed to be resident enterprise, the Company may be subject to the EIT at 25% on the worldwide taxable income and dividends paid from PRC subsidiaries to their overseas holding companies may be exempted from 10% PRC withholding tax. Except for certain immaterial interest income from bank deposits placed with financial institutions outside the PRC, all of the Company’s income is generated from the PRC operations. Given the immaterial amount of income generated from outside the PRC and the PRC subsidiaries do not intend to pay dividends for the foreseeable future, the management considers that the impact arising from resident enterprise on the Company’s financial position is not significant. The management evaluated the Company’s overall tax positions and considered that no provision for uncertainty in income taxes is necessary as of June 30, 2013.
8.	Net finance costs
	Details of finance costs are summarized as follows:-

		Three months ended						Six months ended
		June 30,						June 30,
		(Unaudited)						(Unaudited)
		2013			2012			2013			2012
Total interest cost incurred, net of capitalized interest	$	209,622		$	242,655		$	722,938		$	537,371
Less: Interest income		(2,362	)		(5,588	)		(17,396	)		(28,803	)
Net interest cost		207,260			237,067			705,542			508,568
Other finance costs		61,481			148,875			129,248			211,965
	$	268,741		$	385,942		$	834,790		$	720,533

9. Other income (loss), net

		Three months ended					Six months ended
		June 30,					June 30,
		(Unaudited)					(Unaudited)
		2013		2012			2013		2012
Change in fair value of foreign exchange forward contracts	$	-	$	(253,906	)	$	-	$	236,470
Realized gain of held for trading investments		871		195			2,112		195
Other income		15,947		420			39,133		1,128
	$	16,818	$	(253,291	)	$	41,245	$	237,793

- 10 -

10.	Earnings per share
	During the reporting periods, potential dilutive shares were excluded from the computation of earnings per share as their effect is anti-dilutive. The anti-dilutive instruments including 1,359,113 warrants and 2,725,013 share options were excluded from the calculation of earnings per share for the three and six months ended June 30, 2013. Accordingly, the basic and diluted earnings per share are the same.
11.	Property, plant and equipment, net

		June 30,			December 31,
		2013			2012
		(Unaudited)			(Audited)
Costs :
Buildings	$	16,629,192		$	11,187,653
Plant and machinery		4,627,091			3,207,648
Motor vehicles		222,239			217,034
Electronic equipment		290,106			192,907
		21,768,628			14,805,242
Accumulated depreciation		(3,946,720	)		(3,374,254	)
Construction in progress		9,951,247			12,423,449
Net	$	27,773,155		$	23,854,437

(i) During the reporting periods, depreciation charge is included in :-

		Three months ended				Six months ended
		June 30,				June 30,
		(Unaudited)				(Unaudited)
		2013		2012		2013		2012
Cost of sales and overheads of inventories	$	255,123	$	127,197	$	449,003	$	256,027
Selling expenses		919		1,003		1,964		3,074
Administrative expenses		19,470		64,390		48,305		128,657
	$	275,512	$	192,590	$	499,272	$	387,758

As of June 30, 2013 and December 31, 2012, buildings and plant and machinery with carrying amount of $15,891,353 and $7,894,166 were pledged as collaterals under certain loans and bill payables arrangements, respectively (Note 16).

During the six months ended June 30, 2013, property, plant and equipment with net book value of $30,529 were disposed of at a consideration of $30,529, resulting a gain of $Nil. During the six months ended June 30, 2012, property, plant and equipment with net book value of $12,257 were disposed of at a consideration of $12,257, resulting a gain of $Nil.

Capitalized interest for the six months ended June 30, 2013 and 2012 was immaterial.

(ii) Construction in progress:-

Construction in progress mainly comprises capital expenditure for construction of the Company’s new offices.

- 11 -

12. Land use rights

		June 30,			December 31,
		2013			2012
		(Unaudited)			(Audited)
Land use rights :
- for office premises, production facilities and warehouse	$	2,243,275		$	2,197,465
- for growing and plantation		35,928,524			25,277,499
Accumulated amortization		(2,266,606	)		(1,763,202	)
	$	35,905,193		$	25,711,762

(a)	The Company obtained the right from the relevant PRC land authority for a period of 40-50 years to use the land on which the office premises, production facilities and warehouse of the Company are situated.
(b)	The Company obtained several rights from the relevant PRC local rural village cooperatives for periods ranging from 20-37 years (2012: 20-37 years) to use the land for growing and plantation purpose for producing the Company’s fresh produce.
(c)	During the six months ended June 30, 2013 and 2012, amortization amounted to $462,606 and $493,575 respectively. During the three months ended June 30, 2013 and 2012, amortization amounted to $232,457 and $228,891 respectively. The estimated amortization expense for each of the five succeeding years is approximately $1,260,000 each year.
(d)	As of June 30, 2013 and December 31, 2012, land use rights with carrying amounts of $8,953,575 and $3,670,501 were pledged as collateral under certain loan arrangements (Note 16).

13. Deposits paid

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Deposits paid for :
- acquisition of land use rights	$	38,068,694	$	47,363,613
- acquisition of property, plant and equipment		458,514		1,077,414
	$	38,527,208	$	48,441,027

On December 29, 2011, Fujian Yada entered into an agreement to acquire a land use right with a period of 25 years for growing and plantation purposes from a PRC local rural village cooperative (the “Seller”) at a cost of RMB13,125,000 and Fujian Yada paid deposits of RMB10,500,000 in December 2011 which was included in deposits paid for acquisition of land use right as of December 31, 2012. In addition, the Seller was obligated to facilitate the transfer of Forestry Right Certificate to Fujian Yada.

Owing to some administrative difficulties in transferring the Forestry Right Certificate to Fujian Yada, on March 30, 2013, Fujian Yada entered into a separate agreement with the Seller to cancel the transfer agreement dated December 29, 2011. Fujian Yada received partial payments of deposits amounted to RMB8,770,000 in March 2013 and the remaining balance of RMB1,730,000 was received in May 2013.

- 12 -

14. Other payables and accrued expenses

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Interest payable	$	115,889	$	87,655
Pension payable - Note 14(a)		575,310		563,562
VAT payable		1,422,816		2,068,234
Salaries payable		325,556		329,906
Accrued audit fee		26,231		205,790
Liquidated damage payable - Note 20		443,686		443,686
Construction cost payable		7,478		951,270
Payable for acquisition of land use rights		1,538,593		-
Other payables		757,011		737,246
	$	5,212,570	$	5,387,349

Note :-
(a)	Pension payable represents accrued staff medical, industry injury claims, labor and unemployment insurances, all of which are third parties insurance and the insurance premiums are based on certain percentage of salaries. The obligations of the Company are limited to those premiums contributed by the Company.

15.	Amounts due to related parties
	The amounts represent amounts due to Mr. Zhan and Madam Zhou Liufeng, Mr. Zhan’s spouse, and are interest-free, unsecured and repayable on demand.
16.	Secured borrowings

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Secured short-term borrowings	$	21,911,344	$	14,260,908

The weighted-average interest rate on short-term borrowings as of June 30, 2013 and December 31, 2012, were 5.95% and 6.79%, respectively. The details of the Company’s banking facilities as of June 30, 2013 were as follows:-

				Amount
Facilities granted		Granted		utilized		Unused
Secured bank loans	$	21,912,960	$	21,911,344	$	1,616

The secured borrowings were secured as following:-

(i) The Company’s assets with following carrying values :-

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Property, plant and equipment (Note 11)	$	15,891,353	$	7,894,166
Trade receivable (Note 4)		1,773,444		1,593,782
Land use rights (Note 12)		8,953,575		3,670,501
Inventories (Note 6)		1,015,452		419,743
	$	27,633,824	$	13,578,192

(ii)	Guarantees executed by third parties;
(iii)	Guarantees executed by Mr. Zhan and Liufeng Zhou, Mr. Zhan’s spouse; and
(iv)	Guarantees executed by certain staff of the Company.

- 13 -

As of June 30, 2013, Fujian Yada’s secured short-term borrowings of $8,968,800 are subject to the fulfillment of certain financial covenants at any time as follows :-

(i)	To maintain a minimum current ratio of 1.0;
(ii)	To maintain a minimum quick ratio of 0.7; and
(iii)	To maintain a maximum debt to asset ratio of 60%.

As of June 30, 2013, Shixing Yada’s secured short-term borrowings of $3,232,000 are subject to the fulfillment of certain financial covenants at any time as follows :-

(i)	To maintain a maximum debt to asset ratio (excluding inter-group balances) of 50%;
(ii)	To maintain the sales revenue and gross profit which should not be lower than prior year; and
(iii)	To maintain a positive cash flow from operating activities.

If Fujian Yada and Shixing Yada were to breach the covenants, the secured short-term borrowings would become payable on demand. Fujian Yada and Shixing Yada regularly monitor the compliance with these financial covenants.

In the opinion of the Board of Directors, none of the above covenants, relating to secured short-term borrowings had been breached as of June 30, 2013.

17. Held for trading investments

		Total fair value measurement
		as of
		June 30,			December 31,
		2013			2012
		(Unaudited)			(Audited)
Balance at beginning of the period	$	81,250		$	-
Acquisitions of held for trading investments		-			871,915
Disposal of held for trading investment		(81,250	)		(792,650	)
		-			79,265
Unrealized gain of held for trading investments		-			2,100
Effect of foreign currency translation		-			(115	)
	$	-		$	81,250

	Held for trading investments represented the Company’s investments in unit trust offered by a PRC financial institution or a PRC recognized asset management company. The Company could call the redemption of investments and receive the redemption price based on the rate of return as announced by the financial institution and the asset management company.
18.	Defined contribution plan
	The Company has a defined contribution plan for all qualified employees in the PRC. The employer and its employees are each required to make contributions to the plan at the rates specified in the plan. The only obligation of the Company with respect to the retirement scheme is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the condensed consolidated statements of income and comprehensive income. The Company recorded defined contribution plan expenses of $47,251 and $31,254 for the six months ended June 30, 2013 and 2012 respectively.
19.	Statutory reserve and other surplus reserve
	Statutory reserve
	In accordance with the relevant laws and regulations of PRC, the subsidiaries established in the PRC are required to transfer not less than 10% of their net incomes calculated in accordance with accounting principles generally accepted in the PRC (the percentages are upon approval from the board of directors’ meetings), after offsetting any prior years’ losses, to the statutory reserve.
	When the balance of statutory reserve reaches 50% of the registered capital, any further appropriation is optional. Upon approval from the board of directors of the Company, the statutory reserve can mainly be used to offset accumulated losses or increase capital.

- 14 -

19.	Statutory reserve and other surplus reserve (Cont’d)
	Other surplus reserve
	Other surplus reserve represented the voluntarily appropriation of 10% of the PRC subsidiaries’ net income calculated in accordance with accounting principles generally accepted in the PRC, and approved from the board of directors’ meetings. The transfer to other surplus reserve is used to retain certain income for future business expansion.
20.	Commitments and contingencies
	Capital commitment
	As of June 30, 2013 and December 31, 2012, the Company had capital commitments as follows:-

		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Construction of new building facilities	$	592,655	$	2,386,861
Acquisition of land use rights		9,315,173		11,047,662
	$	9,907,828	$	13,434,523

Operating lease commitment

The Company leases certain land use rights under operating leases. As of June 30, 2013 the future minimum lease payments under non-cancelable operating leases were as follows:-

Within 1 year	$	3,715,091
In the second year		3,663,795
In the third year		3,659,486
In the fourth year		3,632,553
In the fifth year		3,621,779
Thereafter		47,312,655
	$	65,605,359

Rental expense for operating leases amounted to $1,859,790 and $1,830,724 for the six months ended June 30, 2013 and 2012, respectively, have been recorded in cost of sales and inventories.

Rental expense for operating leases amounted to $935,053 and $957,100 for the three months ended June 30, 2013 and 2012, respectively, have been recorded in cost of sales and inventories.

Registration payment arrangement

In connection with a private placement of $15.3 million of common stock and warrants that took place on August 20, 2010, the Company agreed to file a registration statement covering the resale of the common stock and common stock underlying the warrants. The Company agreed to use its best efforts to have the registration statement declared effective prior to January 17, 2011. The registration statement was not declared effective until July 15, 2011. Under the terms of the subscription agreement for the offering, the Company was required to pay liquidated damages to the investors in cash in an amount equal to 0.5% per month of the aggregate amount invested, subject to a cap of 6.0%, for each month that the registration statement was delayed. In accordance with ASC 450 “Contingencies”, the Company recorded a liability in the consolidated financial statements for these contingencies when a loss is known or considered probable and the amount can be reasonably estimated. In accordance with FASB ASC 825-20, if the Company determines a registration payment arrangement is probable and can be reasonably estimated, a liability should be recorded. A provision for the liquidated damages was made in an amount of $443,686 as of June 30, 2013. No liquidated damages were charged to administrative expenses for the six months ended June 30, 2013 and 2012.

- 15 -

21.	Share based compensation
	The Company has granted share options and warrants to employees, directors and consultants to reward them for services rendered.
	Stock option plan
	Under the stock option plan adopted by the Company in 2010, 3,093,258 share options with an exercisable period of up to 10 years were granted to management and employees of the Company on February 14, 2011, of which 184,123 share options vested on March 18, 2011 with an exercise price of $3.94, 184,122 share options were vested on March 18, 2012 with an exercise price equal to 125% of the market price of the Company’s common stock on that vesting date (market price as of March 19, 2012 was $1.59), 908,335 share options vested on February 14, 2012 and 1,816,678 share options are vesting in equal amounts on the first day of each quarter during a four year period commencing from February 15, 2012 with an exercise price of $4.00 per share. All the share options granted are subject to the option holders continuing to be management or employees of the Company before the respective vesting dates.
	On September 21, 2012, Mr. Tsang Yin Chiu, Stanley, resigned from the Company as Chief Financial Officer and Corporate Secretary. The stock options previously granted to Mr. Tsang pursuant to the stock option agreement expired on December 21, 2012 which represented the period of three months after the termination date.
	A summary of share option plan activity for the six months ended June 30, 2013 is presented below:

			Weighted average	Remaining		Aggregate
	Number		exercise price per	contractual		intrinsic
	of shares		share	term		value (1)
Outstanding as of January 1, 2013	2,725,013	$	4.00
Granted	-		-
Exercised	-		-
Forfeited	-		-
Cancelled	-		-
Outstanding as of June 30, 2013	2,725,013	$	4.00	7.6 years	$	-
Exercisable as of June 30, 2013	1,476,047	$	4.00	7.6 years	$	-

(1) There was no aggregate intrinsic value as the weighted average exercise price of options of $4.00 is in excess of the estimated value of the Company’s common stock as of June 30, 2013.

The weighted average grant-date fair value of options granted during 2011 was $1.777 per share. The Company recognized compensation expense arising from abovementioned share options granted in the amount of $411,337 and $851,222 for the six months ended June 30, 2013 and 2012 respectively. The compensation expense was allocated to administrative expenses in the amount of $311,282 and $655,184 and selling expense in the amount of $100,055 and $196,038 for the six months ended June 30, 2013 and 2012 respectively.

As of June 30, 2013, there were no other share options granted to employees and directors.

The fair value of the above option awards was estimated on the date of grant using the Binomial Option Valuation Model together with the following assumptions.

Estimated stock price	$4.00
Expected volatility	56.80%
Expected dividends	Nil
Expected life	5.0-7.5 years
Risk-free interest rate	3.69%

As of June 30, 2013, there was unrecognized compensation cost of $918,740 related to the above non-vested share options which are expected to be recognized over approximately 2.6 years.

- 16 -

21.	Share based compensation (Cont'd)
	Warrants
	On February 10, 2011, the Company issued warrants to a service provider in exchange for investor relation services provided to the Company. The warrant holder is entitled to purchase up to 50,000 shares of the Company’s common stock at a price of $4.00 per share. These warrants have exercisable period of 5 years commencing from February 10, 2011.
	At the grant date, the fair value of warrants issued was approximately $2.04 each. No compensation expense arising from the abovementioned warrants was recognized or allocated to administrative expenses for the six months ended June 30, 2013 and 2012.
	The fair value of the above warrants issued was estimated on the date of grant using the Binomial Option Valuation Model together with the following assumptions:-

Stock price and exercise price	$4.00
Expected volatility	57.28%
Expected dividends	Nil
Expected life	2.5 years
Risk-free interest rate	2.41%

As of June 30, 2013, there was no unrecognized compensation cost related to the above warrants.

22.	Segment information
	The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly fresh produce and processed produce and operating results of the Company and, as such, the Company has determined that the Company has two operating segments as defined by ASC 280, “Segments Reporting” : Fresh produce and processed produce.
	The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on reportable operating segments’ gross profit. There were no inter- segment sales or transfers during the three and six months ended June 30, 2013 and 2012. Management does not track segment assets and, therefore, segment assets information is not presented.

		Fresh produce				Processed produce				Total
		Six months ended				Six months ended				Six months ended
		June 30,				June 30,				June 30,
		(Unaudited)				(Unaudited)				(Unaudited)
		2013		2012		2013		2012		2013		2012
Revenue from external customers	$	40,976,424	$	39,174,765	$	16,741,481	$	17,684,220	$	57,717,905	$	56,858,985
Segment profit	$	12,780,454	$	13,651,849	$	5,154,523	$	4,665,209	$	17,934,977	$	18,317,058

		Fresh produce				Processed produce				Total
		Three months ended				Three months ended				Three months ended
		June 30,				June 30,				June 30,
		(Unaudited)				(Unaudited)				(Unaudited)
		2013		2012		2013		2012		2013		2012
Revenue from external customers	$	12,124,329	$	13,286,219	$	9,618,247	$	10,886,736	$	21,742,576	$	24,172,955
Segment profit	$	3,148,917	$	4,704,358	$	3,975,011	$	3,787,228	$	7,123,928	$	8,491,586

- 17 -

22.	Segment information (Cont’d)
	A reconciliation is provided for unallocated amounts relating to corporate operations which is not included in the segment information.

		Three months ended						Six months ended
		June 30,						June 30,
		(Unaudited)						(Unaudited)
		2013			2012			2013			2012
Total consolidated revenue	$	21,742,576		$	24,172,955		$	57,717,905		$	56,858,985
Total profit for reportable segments	$	7,123,928		$	8,491,586		$	17,934,977		$	18,317,058
Unallocated amounts relating to operations :-
Administrative expenses		(1,300,839	)		(804,244	)		(2,429,657	)		(2,155,490	)
Selling expenses		(431,349	)		(407,273	)		(777,093	)		(954,886	)
Government grant income		39,445			9,211			103,205			186,507
Other income (loss), net		16,818			(253,291	)		41,245			237,793
Net finance costs		(268,741	)		(385,942	)		(834,790	)		(720,533	)
Income before income taxes and noncontrolling interest	$	5,179,262		$	6,650,047		$	14,037,887		$	14,910,449

All of the Company’s long-live assets are located in the PRC. Geographic information about the revenues, which are classified based on the customers, is set out as follows:-

		Three months ended				Six months ended
		June 30,				June 30,
		(Unaudited)				(Unaudited)
		2013		2012		2013		2012
PRC	$	20,692,033	$	22,695,384	$	55,400,992	$	53,748,288
Japan		1,050,543		1,477,571		2,316,913		3,110,697
Total	$	21,742,576	$	24,172,955	$	57,717,905	$	56,858,985

	During the reporting periods, no individual customer represented 10% or more of the Company’s consolidated revenue.
23.	Related party transactions
	Apart from the transactions as disclosed in notes 15 and 16 to the condensed consolidated financial statements, the Company had no other material transactions with its related parties during the six months ended June 30, 2013 and 2012.
24.	Subsequent events
	The Company evaluated all events or transactions that occurred after June 30, 2013 through the date the financial statements were issued and has determined that there are no material recognizable nor subsequent events or transactions which would require recognition or disclosure in the condensed consolidated financial statements.

- 18 -

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Statements in the following discussion and throughout this report that are not historical in nature are “forward-looking statements”. You can identify forward-looking statements by the use of words such as “expect,” “anticipate,” “estimate,” “may,” “should,” “intend,” “believe,” and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this report because of numerous factors, many of which are beyond our control. These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes. Please see “Special Note Regarding Forward Looking Statements” at the beginning of this report.

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information appearing elsewhere in this report.

OVERVIEW

We are a green and organic food company with headquarters in Fujian Province, China. We currently provide over 100 kinds of fresh and processed products in three principal categories, bamboo shoot products, fresh vegetables and fruit, and processed vegetables. We also sell mature bamboo wood from our forests for use in manufacturing a variety of bamboo products. Bamboo shoot products accounted for approximately 45% of our revenue in 2012, while fresh vegetables and fruit accounted for approximately 31% of revenue, processed vegetables for 6% of revenue, and bamboo wood for 18% of revenue, respectively. In the six months ended June 30, 2013, bamboo shoot products accounted for approximately 72% of our revenue, while fresh vegetables and fruits accounted for approximately 20%, processed vegetables for 4%, and bamboo wood for 4%.

In addition to our vertically integrated operation (from planting, manufacturing and sales of final products), we also acquire raw materials from outsiders from time to time to meet our continuous sales growth. We can supply most of our requirements for fresh raw materials from our own land. During peak season, we nevertheless purchase raw materials from surrounding bamboo shoot manufacturers for our further processing. We view our integrated operations as key to the quality of our products, as we monitor substantially all of our products from seed to ultimate sale. Accordingly, our ability to grow is partially dependent on the area of lands we control under lease or acquisition, and our processing and storage capacity. We are currently experiencing rapid growth in our business and continually seeking to procure additional lands for planting. We anticipate making capital expenditures over the next 6 to 18 months to increase our bamboo forest capacity, increase and improve our production resources and facilities.

We conduct our operations in China and sell products in 10 provinces and administrative regions in China as well as in the Japanese market. We derived approximately 95% and 5% of our revenue in China and in Japan, respectively, in 2012 and approximately 96% and 4% in China and in Japan, respectively, in the first six months of 2013.

Agricultural products are naturally subject to seasonality tied to their local growing season. For example, our fresh bamboo shoots, an important revenue driver, are only available for sale from approximately December through April. As a result, our revenues in the fourth and first quarter tend to be significantly higher than our revenue in the second and third quarter. We seek to offset the impact of seasonality on our revenues by managing a diversified portfolio of products. In addition to product diversification, we use cold storage facilities to preserve some of our fresh products to extend their season and time market sales to improve gross margin.

We believe that the investments we made in physical facilities and planting bases in 2012 and the first six months of 2013 establish a strong foundation for growth during 2013 and beyond. Our growth strategy is currently centered on the following initiatives:

• Expand our planting bases.
• Further expand our domestic sales and distribution network and enter new markets.
• Continue promotion of internet sales via www.taobao.com (淘寶特色中國武夷館)
• Increase our processing facilities and cold storage capacity.
• Further enhance our brand recognition.

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RECENT DEVELOPMENTS

Net sales for the first six months of 2013 were $57.7 million, an increase of approximately 1.5% over net sales in the first six months of 2012. Net income attributable to Company’s common stockholders for the first six months of 2013 was $13.8 million, a decrease of approximately 5.9%, compared to $14.6 million for the six months ended June 30, 2012.

Our continued growth has been the result of focus on our five core initiatives:

• Expand our planting bases.
• Further expand our domestic sales and distribution network and enter new markets.
• Continue promotion of internet sales via www.taobao.com (淘寶特色中國武夷館).
• Increase our processing facilities and cold storage capacity.
• Further enhance our brand recognition.

We had acquired additional bamboo forest or planting bases during the six months ended June 30, 2013. Furthermore, we anticipate making capital expenditures over the next 6 to 18 months to increase our bamboo forest capacity. The table below summarizes our planting bases as of December 31, 2012 and June 30, 2013.

	December 31, 2012	June 30, 2013
Bamboo forest	53,897 acres	57,076 acres
	(218.11 square kilometers)	(231.00 square kilometers)
Vegetables & Fruits	12,500 acres	12,500 acres
	(50.59 square kilometers)	(50.59 square kilometers)

We currently sell through distributors and members of our own sales force to farmers' markets, supermarkets, food manufacturers, restaurants and retailers in China. The following table shows the number of our internal sales team members, outside sales agents and markets served as of December 31, 2012 and June 30, 2013.

	December 31, 2012	June 30, 2013
Internal Sales Team Members	63	82
Distributors	214	244

During the remainder of 2013, we plan to continue expansion of our sales network domestically. We have no immediate plans to expand our international sales presence beyond Japan.

We had an 11,500 metric ton cold storage facility as of June 30, 2013 for storing fresh and semi-finished products. As of June 30, 2013, our existing construction work related to new logistic, trading and testing center and staff quarters had partially completed. The remaining construction in progress is expected to complete by the end of 2013. The mushroom processing plant (Phase 1) is now under its normal production schedule.

We have been gaining brand recognition in China, especially in Fujian Province. Our brand  was awarded as a “ ” Well Known Trademark of China” in May 2011. As of June 30, 2013, we had expanded our sales network to over 800 supermarket stores. We plan to further enhance our name recognition through establishing branded counters at supermarkets.

CRITICAL ACCOUNTING POLICIES

Our financial statements have been prepared in accordance with the accounting policies which are consistent with policies used in our audited consolidated financial statements for the year ended December 31, 2012. Please refer to the audited consolidated financial statements for the year ended December 31, 2012 for the description of all of the accounting policies.

Management believes that the most critical accounting policies important to understanding our financial statements and financial condition are our policies concerning inventories, revenue recognition, and income taxes and foreign currency translation, discussed in more detail below.

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Inventories

Inventories are stated at the lower of cost or market. Cost is computed using the weighted average cost method for finished goods, raw materials and packaging materials. Finished goods include fresh and processed produce while raw materials and packaging materials consist primarily of purchased fresh and processed produce and containers.

Expenditures on bamboo and other growing crops are valued at the lower of cost or market and are deferred and charged to cost of sales when the related produce is harvested and sold. The deferred growing costs included in inventories in the consolidated balance sheets consist primarily of land rental cost and service costs.

In assessing the ultimate realization of inventories, we make judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase or decrease with our projected demand requirements and market conditions. We estimate the demand requirements based on market conditions, forecasts prepared by our customers, sales contracts, and orders in hand.

In addition, we estimate net realizable value based on intended use, current market value and inventory ageing analyses. We write down the inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and the estimated market value based upon assumptions about future demand and market conditions.

Based on the above assessment, we established a general provision to make a 20% and 100% provision for raw materials, packing materials and finished goods aged between one and two years and over two years respectively.

Revenue recognition

Revenue from sales of our products, including fresh produce and processed produce, is recognized upon customer acceptance, which occurs at the time of delivery to the customer, provided persuasive evidence of an arrangement exists, such as a signed sales contract, the significant risks and rewards of ownership have been transferred to the customer at the time when the products are delivered to our customer with no significant post-delivery obligations on our part, or the sales price is fixed or determinable and collection is reasonably assured. We do not provide our customers with contractual rights of return and post-delivery discount for any of our products, including fresh produce and processed produce. When there is any significant post-delivery performance obligation exists, revenue is recognized only after such obligation is fulfilled. We evaluate the terms of sales agreement with such customer for fresh produce and processed produce in order to determine whether any significant post-delivery performance obligations exists. Currently, the sales under fresh produce and processed produce segments do not include any terms which may impose any significant post-delivery performance obligations.

Revenue from sales of our products represents the invoiced value of goods, net of the value-added tax (“VAT”). Our processed produce products that are sold in the PRC are subject to VAT at a rate of 17 percent of the gross sales price. This VAT may be offset by VAT paid on raw materials, other materials or costs included in the cost of producing our processed produce products.

Income taxes

We use the asset and liability method of accounting for income taxes pursuant to ASC 740 "Income Taxes". Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

We file separate tax returns in the United States and China. Income taxes of our PRC operating subsidiaries are calculated in accordance with taxation principles currently effective in the PRC. For Asia Green Agriculture Corporation, applicable U.S. tax laws are followed. We expect that the tax rate of 25% currently applicable to our Fujian Yada operating subsidiaries will remain unchanged for the remainder of 2013.

In 2007, China passed the EIT Law and its implementing rules, both of which became effective on January 1, 2008. The EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous law. The EIT Law, however, (i) reduces the statutory rate of enterprise income tax from 33% to 25%, (ii) permits companies to continue to enjoy their existing tax incentives, adjusted by certain transitional phase-out rules, and (iii) introduces new tax incentives, subject to various qualification criteria.

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Substantially all of our income may be derived from dividends we receive from our PRC operating subsidiaries. The EIT Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes. We expect that such 10% withholding tax will apply to dividends paid to us by our PRC subsidiaries but this treatment will depend on our status as a non-resident enterprise. For detailed discussion of PRC tax issues related to resident enterprise status, see "Risk Factors — Risks Associated with Doing Business in China — Under the EIT Law, we may be classified as a 'resident enterprise' of China" in our annual report on Form 10-K for the year ended December 31, 2012. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

Foreign currency translation

Our functional currency is the RMB and RMB is not freely convertible into foreign currencies. We maintain our financial statements in our functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, our financial statements that are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders' equity.

Other Accounting Policies and Estimates

Please see Note 3 - Significant Accounting Policies” in our consolidated financial statements for the year ended December 31, 2012 for a more complete discussion of the accounting policies we have identified as the most important to understand our current financial condition and results of operations.

The preparation of financial statements, in conformity with US GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. As the number of variables and assumptions affecting the probable future outcome of the uncertainties increase, these judgments become even more subjective and complex. While such judgments and estimates are made in good faith by management, they may not always prove to be correct.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

The following table sets forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.

(All amounts, other than percentage, in thousands of US dollars)

		For the three months				For the three months
Item		ended				ended
		June 30, 2013				June 30, 2012
(Unaudited)		(As reported)				(As reported)
		In		As a		In		As a
		Thousands		Percentage		Thousands		Percentage
				of				of
				Net Sales				Net Sales
Net sales	$	21,743		100%	$	24,173		100%
Cost of sales		(14,619	)	(67)%		(15,681	)	(65)%
Gross profit		7,124		33%		8,492		35%
Selling and administrative expenses		(1,732	)	(8)%		(1,212	)	(5)%
Operating income		5,392		25%		7,280		30%
Government grant income		39		0%		9		0%
Other income (loss) - net		17		0%		(253	)	(1)%
Net finance costs		(269	)	(1)%		(386	)	(2)%
Income before income taxes and noncontrolling interest		5,179		24%		6,650		27%
Income taxes		(86	)	0%		(20	)	0%
Net income before noncontrolling interest		5,093		24%		6,630		27%
Net loss attributable to noncontrolling interest		5		0%		-		0%
Net income attributable to Company’s common stockholders		5,098		24%		6,630		27%

The functional currency of the Company is RMB; however, our financial information is expressed in US Dollars. The results of operations reported in the table above are based on the exchange rate of RMB 6.2112 to $1.00 for the three months ended June 30, 2013 and the rate of RMB 6.3080 to $1.00 for the three months ended June 30, 2012.

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Net Sales. Our net sales consist of revenue derived from the sale of our products, less discounts and returns. For the three months ended June 30, 2013, our net sales were $21.7 million compared to $24.2 million for the same period of last year, a decrease of $2.5 million or approximately 10%. The decrease was primarily due to decreased sales volume in the second quarter of 2013. Weather conditions resulted in the early harvest of fresh produce, particularly our bamboo forests, shifting some sales into the first quarter of 2013. Of the decrease in net sales, approximately $3.0 million was attributable to decreased sales volume of our products, while approximately $0.2 million due to lower average selling prices of our products and approximately $0.7 million was due to the appreciation of the RMB against the US dollars.

Cost of Sales. Our cost of sales is primarily comprised of the costs of our raw materials, labor, overhead and sales tax. For the three months ended June 30, 2013 our cost of sales were $14.6 million compared to $15.7 million for the same period of last year, a decrease of $1.1 million or approximately 7%. This decrease was primarily due to lower sales volume, as sales decreased by 10% over the prior period. Cost of sales was also impacted by an increase in production costs, including direct labor. As a percentage of net sales, our cost of sales increased slightly to approximately 67% for the three months ended June 30, 2013 from approximately 65% for the three months ended June 30, 2012.

Gross Profit and Gross Margin. Our gross profit is equal to our net revenues less our cost of sales. Our gross profit was $7.1 million for the three months ended June 30, 2013 compared to $8.5 million for the same period of last year, a decrease of $1.4 million or approximately 16%. Gross profit as a percentage of net sales was approximately 33% and 35% for the three months ended June 30, 2013 and 2012, respectively.

Selling and Administrative Expenses. Our selling and administrative expenses increased by $0.5 million, or approximately 42%, to $1.7 million for the three months ended June 30, 2013 from $1.2 million for the three months ended June 30, 2012.

Our selling expenses include sales commissions, the cost of promotional materials, salaries and fringe benefits of sales personnel, transportation costs and other sales related costs. Our selling expenses remained at $0.4 million for both the three months ended June 30, 2013 and 2012. As a percentage of net sales, selling expenses for the three months ended June 30, 2013 were approximately 2% of net sales, comparable to 2% for the three months ended June 30, 2012.

Our administrative expenses primarily include the costs associated with staff and support personnel who manage our business activities, office expense, professional fees paid to third parties, foreign exchange expense, and depreciation of non-production facilities. Our administrative expenses increased by $0.5 million, or approximately 63%, to $1.3 million for the three months ended June 30, 2013 from $0.8 million for the three months ended June 30, 2012. The increase was mainly attributed to an increase in insurance expense of approximately $0.3 million and exchange losses of approximately $0.2 million. As a percentage of net sales, administrative expenses increased to approximately 6% for the three months ended June 30, 2013 from 3% for the three months ended June 30, 2012.

Net Finance Costs. Our net finance costs decreased to approximately $0.3 million for the three months ended June 30, 2013 from approximately $0.4 million for the three months ended June 30, 2012 which was rather comparable in both quarters. As a percentage of net sales, net finance costs decreased to 1% for the three months ended June 30, 2013 from 2% for the three months ended June 30, 2012.

Income Taxes. We had income taxes of approximately $0.09 million for the three months ended June 30, 2013, compared to approximately $0.02 million for the three months ended June 30, 2012 primarily because the more fresh produces were not subject to tax in the second quarter of 2012.

Net Income. Our net income attributable to Company’s common stockholders decreased by $1.5 million or approximately 23%, to $5.1 million for the three months ended June 30, 2013 from $6.6 million for the three months ended June 30, 2012. The main reasons for the decrease of our net income were due to change in our key components of our results of operations discussed above.

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Six months Ended June 30, 2013 Compared to Six months Ended June 30, 2012

The following table sets forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of our net sales.

(All amounts, other than percentage, in thousands of US dollars)

		For the six months				For the six months
Item		ended				ended
		June 30, 2013				June 30, 2012
(Unaudited)		(As reported)				(As reported)
		In		As a		In		As a
		Thousands		Percentage		Thousands		Percentage
				of				of
				Net Sales				Net Sales
Net sales	$	57,718		100%	$	56,859		100%
Cost of sales		(39,783	)	(69)%		(38,542	)	(68)%
Gross profit		17,935		31%		18,317		32%
Selling and administrative expenses		(3,207	)	(6)%		(3,110	)	(5)%
Operating income		14,728		25%		15,207		27%
Government grant income		103		0%		187		0%
Other net income		41		0%		237		0%
Net finance costs		(835	)	(1)%		(721	)	(1)%
Income before income taxes and noncontrolling interest		14,037		24%		14,910		26%
Income taxes		(279	)	0%		(269	)	0%
Net income before noncontrolling interest		13,758		24%		14,641		26%
Net loss attributable to noncontrolling interest		22		0%		-		0%
Net income attributable to Company’s common stockholders		13,780		24%		14,641		26%

The functional currency of the Company is RMB; however, our financial information is expressed in US Dollars. The results of operations reported in the table above is based on the exchange rate of RMB 6.2461 to $1.00 for the six months ended June 30, 2013 and the rate of RMB 6.3028 to $1.00 for the six months ended June 30, 2012.

Net Sales. Our net sales consist of revenue derived from the sale of our products, less discounts and returns. For the six months ended June 30, 2013, our net sales were $57.7 million compared to $56.9 million for the same period of last year, an increase of $0.8 million or approximately 1.4%. The increase was primarily due to increased sales volume resulting from higher production capacity from our expanded planting bases, particularly our bamboo forests. Of such increase, approximately $2.8 million was attributable to increased sales volume of our products, offset by approximately $2.5 million due to lower average selling prices of our products and increased by approximately $0.5 million was due to the appreciation of the RMB against the US dollars.

Cost of Sales. Our cost of sales is primarily comprised of the costs of our raw materials, labor, overhead and sales tax. For the six months ended June 30, 2013 our cost of sales were $39.8 million compared to $38.5 million for the same period of last year, an increase of $1.3 million or approximately 3%. This increase was primarily due to higher sales volume, as sales increased by 1.4% over the prior period. We also experienced an increase in direct costs of processed bamboo shoot products, including direct labor costs. As a percentage of net sales, our cost of sales increased slightly to approximately 69% for the six months ended June 30, 2013 from approximately 68% for the six months ended June 30, 2012.

Gross Profit and Gross Margin. Our gross profit is equal to our net revenues less our cost of sales. Our gross profit was $17.9 million for the six months ended June 30, 2013 compared to $18.3 million for the same period of last year, a decrease of $0.4 million or approximately 2%. Gross profit as a percentage of net sales was approximately 31% and 32% for the six months ended June 30, 2013 and 2012, respectively.

Selling and Administrative Expenses. Our selling and administrative expenses increased slightly by $0.1 million, or approximately 3%, to $3.2 million for the six months ended June 30, 2013 from $3.1 million for the six months ended June 30, 2012.

Our selling expenses include sales commissions, the cost of promotional materials, salaries and fringe benefits of sales personnel, transportation costs and other sales related costs. Our selling expenses decreased to $0.8 million for the six months ended June 30, 2013, from $1.0 million for the six months ended June 30, 2012. This was primarily due to the decrease in non-cash compensation expenses of approximately $0.1 million arising from the grant of employee stock option, and a decrease of transportation charges of $0.1 million as more of our customers preferred to pick up their goods at our factory. As a percentage of net sales, selling expenses for the six months ended June 30, 2013 were approximately 1.3% of net sales, comparable to 1.7% for the six months ended June 30, 2012.

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Our administrative expenses primarily include the costs associated with staff and support personnel who manage our business activities, office expense, professional fees paid to third parties, foreign exchange expense, and depreciation of non-production facilities. Our administrative expenses increased by $0.3 million, or approximately 14%, to $2.4 million for the six months ended June 30, 2013 from $2.1 million for the six months ended June 30, 2012. The increase was mainly attributed to exchange losses incurred. As a percentage of net sales, administrative expenses decreased to approximately 4.2% for the six months ended June 30, 2013 from 3.7% for the six months ended June 30, 2012.

Net Finance Costs. Our net finance costs increased to approximately $0.8 million for the six months ended June 30, 2013 from approximately $0.7 million for the six months ended June 30, 2012. The increase is mainly due to increase in bank borrowings to finance the expansion of our operations. As a percentage of net sales, net finance costs remained at 1% for the six months ended June 30, 2013 and June 30, 2012.

Income Taxes. We had income taxes of approximately $0.3 million for the six months ended June 30, 2013, similar to approximately $0.3 million for the six months ended June 30, 2012 primarily because we had comparable taxable profits for the two periods, after tax exemption on profits from sales of fresh produce.

Net Income. Our net income attributable to Company’s common stockholders decreased by $0.8 million or approximately 5.5%, to $13.8 million for the six months ended June 30, 2013 from $14.6 million for the six months ended June 30, 2012. The main reasons for the decrease of our net income were due to the changes in our other key components of our results of operations discussed above.

Liquidity and Capital Resources

The following table provides detailed information regarding key balance sheet items and other items affecting our liquidity for the financial statement periods presented in this report.

		As of
		June 30,		December 31,
		2013		2012
		(Unaudited)		(Audited)
Cash and cash equivalents	$	6.2 million	$	9.8 million
Accounts receivable		31.4 million		32.9 million
Working capital		50.9 million		37.6 million
Days sales outstanding		99		96

Our account receivables as of June 30, 2013 were $31.4 million, compared to $32.9 million as of December 31, 2012. Our days sales outstanding increased to 99 days as of June 30, 2013, from 96 days as of December 31, 2012. This was mainly due to extended credit term granted to some of the customers.

The following table provides detailed information about our net cash flow for all financial statements periods presented in this report.

Cash Flow
(All amounts in thousands of U.S. dollars)

		Six months Ended
		June 30,
		(Unaudited)
		2013			2012
Net cash (used in) / provided by operating activities	$	(6,349	)	$	6,734
Net cash used in investing activities		(2,455	)		(14,313	)
Net cash provided by financing activities		5,091			3,352
Effect of exchange rate on cash and cash equivalents		160			122
Cash and cash equivalents at the beginning of the period		9,756			12,833
Cash and cash equivalents at the end of the period		6,203			8,728

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Cash Flows from Operating Activities.

Net cash used in operating activities was $6.3 million for six months ended June 30, 2013, compared to net cash provided by operating activities of $6.7 million for six months ended June 30, 2012. The decrease in cash from operations was primarily attributable to an increase in other receivables and prepayments, and inventories, which was partly offset by decrease in trade receivables and additional net income generated in the period.

Cash Flows from Investing Activities.

Net cash used in investing activities for the six months ended June 30, 2013 was $2.5 million compared to $14.3 million for the six months ended June 30, 2012. During the six months ended June 30, 2013, we invested $4.2 million to acquire property, plant and equipment. This amount was offset by a refund of $1.7 million of capital expenditures related to the cancellation of an agreement to acquire bamboo forest. The overall decrease in cash used in investment was primarily related to decreased deposits and payments to acquire land use rights, as we did not acquire any new land use rights during the six months ended June 30, 2013, compared to $12.6 million during the same period in the prior year.

Cash Flows from Financing Activities.

Net cash provided by financing activities was $5.1 million in the six months ended June 30, 2013 compared to $3.4 million used in financing activities for the six months ended June 30, 2012. Net cash provided by financing activities for the six months ended June 30, 2013 was primarily attributable to borrowings under bank credit facilities.

Contractual Obligations and Commitments

Our short term borrowings consist of secured bank loans under a number of credit facilities with commercial banks in China. The weighted-average interest rate on short-term borrowings as of June 30, 2013 and December 31, 2012, were 5.95% and 6.79% respectively. The details of our banking facilities as of June 30, 2013 were as follows: -

				Amount
Facilities granted		Granted		utilized		Unused
Secured bank loans	$	21,912,960	$	21,911,344	$	1,616

For additional details, please refer to Note 16 to our condensed consolidated financial statements for the three and six months ended June 30, 2013 and 2012 on page 13.

Our operating leases relate to payments for land use rights for our facilities, planting bases and bamboo forests. Our rights to our corporate facilities extend until 2053 to 2055. The rights to our planting basis range from 7 to 30 years and the rights to our bamboo forests generally range from 20 to 37 years. As of June 30, 2013 the future minimum lease payments under non-cancelable operating leases were as follows:

Within 1 year	$	3,715,091
In the second year		3,663,795
In the third year		3,659,486
In the fourth year		3,632,553
In the fifth year		3,621,779
Thereafter		47,312,655
	$	65,605,359

For additional details, please refer to Note 20 to our condensed consolidated financial statements for the three and six months ended June 30, 2013 and 2012 on page 15.

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Contingent Liabilities

We have made a provision of approximately $575,000 to cover potential liability with respect to certain unpaid social insurance obligations for full-time employees. We believe that the total potential liabilities include cost of rectifying non-compliance of the social insurance obligations for full-time employees and temporary workers, and the cost of rectifying non-compliance of the housing fund obligations for full-time employees and temporary workers, and may be as much as $3,610,000. See “Risk Factors—We may face claims or administrative penalties for non-execution of labor contracts or non-payment and/or underpayment of the social insurance and housing fund obligations in respect of our temporary workers and full-time employees.” in our annual report on Form 10-K for the year ended December 31, 2012. The provision reflects our good faith estimate of the costs of rectifying our non-compliance with these obligations; actual costs could be lower or higher. If we are required to rectify our non-compliance and the costs of doing so approach or exceed our good faith estimate, it would have a material adverse effect on our liquidity and capital resources.

Capital Expenditures

Our capital expenditures were approximately $4.2 million for the six months ended June 30, 2013. Our capital expenditures were solely used to acquire property, plant and equipment. We currently estimate that our capital expenditures in fiscal year 2013 will be approximately $15 million, which we intend to use primarily for expansion of bamboo forests, and the construction of our new logistic, trading and testing center and staff quarters.

Capital Resources

As of June 30, 2013, we had only a minimal amount of unused credit facility that was available to us. Our cash and cash equivalents decreased by $3.6 million during the six months ended June 30, 2013. Our overall working capital position increased by $13.2 million. Based on our recent operating experience, we anticipate that cash generated from operations together with commercial borrowings will be sufficient to fund our working capital requirements and anticipated growth over the next 12 months.

Our cash from operations could be affected by various risks and uncertainties, including, but not limited to the risks detailed in Part I, Item 1A titled “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2012. In addition, we may, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our production capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. No arrangements or commitments for any such financings are in place at this time, and we cannot give any assurance about the availability or terms of any future financings.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required under this item.

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Item 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to provide reasonable assurances that material information related to our company is recorded, processed, summarized and reported within the time periods specified in the SEC 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. Our Chief Executive Officer and Chief Financial Officer have determined that as of June 30, 2013, our disclosure controls were effective at that “reasonable assurance” level.

Changes in Internal Controls over Financial Reporting.

No material changes were made in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Internal Controls over Financial Reporting.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be 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 our 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 simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. However, in the opinion of our management, there are no legal claims currently pending or threatened against us that would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. RISK FACTORS.

You should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 29, 2013, the occurrence of which could materially affect harm our business, financial position and results of operations, before making an investment decision. Such risk factors are incorporated herein by reference.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

Item 5. OTHER INFORMATION.

None.

Item 6. EXHIBITS.

See the Exhibit Index immediately following the signature page of this report.

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SIGNATURES

Pursuant to the requirements 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.

	ASIA GREEN AGRICULTURE CORPORATION
Date: August 14, 2013	/s/ CHIN HON SIANG ALEX
	Chin Hon Siang Alex, Chief Financial Officer
	(Principal Accounting Officer)

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Exhibit
No.	Document Description	Incorporation by
		Reference
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C, Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith.
101.INS	XBRL Instance	Furnished herewith
101.SCH	XBRL Taxonomy Extension Schema	Furnished herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Furnished herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Furnished herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Furnished herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Furnished herewith

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