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Executives

Lee Yip Kun Solomon – Chief Executive Officer

Nils-Erik Sandberg – Independent Director

Koi Ming Yap – Independent Director

Sino Agro Food, Inc. (OTCQB:SIAF) Q4 2012 Earnings Call April 23, 2013 11:00 AM ET

Operator

Welcome to Sino Agro Food 2012 Annual Financial Results Conference Call. During this call Sir. Solomon Lee, the Chief Executive Officer and Chairman of Sino Agro Food will provide shareholders with an overview of results from operations during the year of 2012. Following comments by the CEO, the lines will be opened for a question-and-answer session. All forward-looking disclaimers included in the Company’s fiscal year 2012 audited financial and operating results press release dated April 15, 2013 which is available on the company website www.sinoagrofood.com. Our intercept and incorporated throughout the duration of this call. As an extent of the material discussed and provided by the press release and in the 2012 10-K filing available via the (inaudible).

On this call will be Mr. Solomon Lee, the Chairman and CEO of Sino Agro Food, Incorporated, as well as two independent members of the Board of Directors. Mr.Nils-Erik Sandberg and Mr. George Yap.

I would now like to introduce Mr. Solomon Lee.

Lee Yip Kun Solomon

Good evening everybody and thank you for attending. Thank you everyone who is attending today’s conference call. I’m pleased to report Sino Agro Foods 2012, financial results which has step record for the third consecutive year. The $138.6 million in revenue representing a 167% increase over 2011 and 1169% over 2010 current continuation operations. Net income of $57.5 million, a 268% increase and basic earning per share of $0.70 represent a 63% increase from 2011.

In my opening remarks, I will briefly put this result into statistical perspective. I believe that the maturing of the company along with the pursuing of a listing in Sweden, one such thing will bring new business and financing opportunities. The Company’s five years plan, ambition see majestic modeling of a pre-wholesale and retail activities toward a higher profit margin asset base of $500 million. We are right on track.

I sum up our past and future years activities as follows. Activities in 2011 concentrated on the building out of primary production activities in our feedstock, fertilizer, fishery, and cattle farm businesses leading into the initiation of basic infrastructure developed for our pre-wholesale and wholesale operations.

2012 with characteristic decline in mark expansion and continuation of our primary production activities and the development of the wholesale operations mainly delivering product sales and by the build out of distribution network including import and export as well as the start of the retail level.

Now 2013, we will see not only continuation, expansion and growing sales from the wholesale operation, but also a full twelve months of sale from distribution network in the import export business and a strong increase in the build out and sale from a retail level, from the description of following continuous developments and progresses in the fertilizer, livestock feed, cattle sector at STAP.

Additional revenue are being generated from our newly build concentrated livestock feed factory. We completed the construction of all cattle houses and related facility with a capacity to house up to 2,500 to 3000 cattle at any given month time. This is excluding the cattle that will be groomed by our cooperative growers.

To crop and pasture an additional 1,500 acres of land making a total over 6,000 acres of land will be crop and pasture in 2013, from 2012’s 5,000 acres, whereas all of this land were granted free of rent to us by the local government. We saw an increase of demand in our organic fertilizer this year. As such the fertilizer factory is covering the shift work from the beginning of mid-February targeting to meet the sale of 30,000 metric ton for 2015.

The construction of our abattoir and deboning facility and related packaging facility, in this respect construction were commenced two days ago on April 21. Photograph of each will be uploaded on our website for display within this week. The construction of our enzyme factory is target to start within Q3 in 2013, and the construction of mass case that we shouldn’t, is target to start within Q4 2013.

These are essential supporting activity to recycle our cattle waste to reapply as raw material for the manufacturing of our organic fertilizer, and to further expand our corporate social responsibility to provide free electricity to the regional district within close proximity to our existing complex. Now, all of this is part of SJAP’s only five-year plan commenced since the year 2011.

At HSA, our Hunan fertilizer and cattle operation, at this newly built fertilizer factory, a 100% pure organic mixed fertilizer is generating stable incomes now and revenues aiming to reach its 2013 target of 30,000 metric ton.

Work on the construction and development of the cattle farm has commenced since March 2012. The preparation work in progress being carried out on in its general layout, calculation and planting of crops and pasture on 75 acres situating in the older hill of the fertilizer factory, and hue leveling and cutting within the hue mixed to the fertilizer factory where the cattle houses will be built.

Now at HU Plantation, we are expecting a much improved performance in 2013.

So far so good, we have still revitalization program being carried out in the plantation since early March. Although work is still in progress, but as of last weekend, management issued reporting, seen marked improvement in the field with healthy green everywhere as compared to last year concentration of the yellow color.

In this respect, we will upload corresponding photograph on our website soon to show the effect of this improvement. Coupling this improvement of the HU plants with the extra revenue that will be generated from the Immortal Vegetable being planted now. And the improvement of the HU plant is still, we are optimistic and targeting an increase of at least 25% in revenues in the plantation itself in 2013, excluding farms that will be bought from regional growers.

Construction of the expansion of drying and packaging facility of the HU plantation division will commence sometime in June or early July this year. After we have completed the field revitalization work, these expansion work will be carried out progressively and gradually depending on the availability of the flowers that we show, we’re able to buy from the regional grower this coming year.

On the cattle farm at (inaudible) and related operations, work in progress regarding expansion work on cattle farm 1 and development work on cattle farm 2, are in line with our plan.

Cattle Farm 1 is doing well and on target. The 180 heads of mature beef cattle being started yesterday 22 April to be evenly to be sold to one of the wholesalers specializing in supplying quality beef to top hotels and restaurant chains. Beef cattle’s are looking healthy and ready. In this we expect, we also have photographs to be uploaded on the website soon.

We are currently setting up a cattle station and related facility on a broker land measuring to about 130,000 square meters within the central cattle market and facility of the Beijing city aiming to house aromatic beef cattle as an intermediate house to supply our beefs to some of the top hotels and restaurant chains in the Beijing City.

Now this is part of our industry wholesale and distribution development trend, netted for some of the big city in China and this one in Beijing City, we see that beginning of such plant according to motion. We also completed 10 km of extended growth – extended roads of the two Enping cattle farms during Q1 of 2013 to show our corporate source of responsibility on our regional development in bringing much better moves, servicing the local communities.

On the fishery side we are referring now to the sales of fish and prawns. On the afternoon of yesterday 22 April we placed our first 500,000 (inaudible) prawn fry in Farm 1. And it is a comfort to report that so fast so good.

Hatchery price has been streaming. In this respect, we believe we are creating a historical moment, starting operation in the first indoor, re-circulating aquaculture system prawn farms in the world. Photograph of this historical moment will be uploaded to our website for display also within this week.

In March 2013, Prawn Farm 2 also achieved a proud moment having sold 4 million green prawn fries hatched from our own breeding stock. This is only a very small number. However it is evidencing the mature yield of breeding and our hatching technique and trend concepts of reaching another milestone. Apart from the small production of green prawns, Prawn Farm 2 also increased its production of Mexican White Prawn fries and sold over 60 million fries in March 2013, which is almost 33% better than the previous monthly average of 45 million fries.

Fish Farm 1; during Q1 it is not so clear rather sad story although production hasn’t fallen, it’s still producing an average of over 80 tons per month. However the prices of sleepy cod went down sharply from its previous average of $25 per kilo to Q1 average just over $16 per kilo, a drop of over 36% due to competition from lower prices of import sleepy cod from Southeast Asia country.

We are enjoying low import duties starting in 2013. What I say to open this also plan to open dam prawns sleepy cod sales. As such we shall see a rather sharp drop in revenues and incomes on both farms in Q1 2013.

In this respect and in mitigating such situation, we are stepping up the expansion program in the research and development station to accommodate for the supply of flower (inaudible) fries to be supplied to Fish Farm 1 and to open dam farm, for those farms to grow this yield into marketable size use, which at present are selling at high prices which brings to a 77 to 78 per kilo. We shall give more detail of this progress within our Q1 2013 call under business description section.

Referring to the engineering and consulting services of the fishery division, we have been working in progress on Fish Farm 2, which we believe previously made a sufficient yield farm, solving it’s water log problem, sub-stack in Q1 2013 we have completed our engineering designs and joined on it’s underground layout and new infrastructure work has commenced work on the construction of underground drainage and filtrational structure. Based on our semi-open and indoor farming concept, covering a total area of about 33,000 square meter and expecting construction work to be intensified by Q3 2013.

In this respect, we believe this semi-open and indoor re-circulating agricultural system farm concept will be the first one introduced in China.

During Q1 2013, small expansion work has been carried out on Prawn Farm 1 with the priority to concentrate firstly on its productivity. We have work in progress for Prawn Farm 2 result in the completion of development of two open dams and related re-circulating agricultural facilities.

Our Phase II development at Prawn Farm 2 as such with total production capacity of fries has increased and the growing of adult prawns will start on Q2, 2013 to bring additional revenue for Prawn Farm 2. Our Prawn Farm 3 at Xining is experiencing delays due to its relocation to a bigger proper land that require approval from the local authority. However, we anticipate that at Q3, we shall be able to get on with the construction of external buildings. Such that remain channel construction will be carried out vital the later months.

With the current work schedule planned for the fishery division, we don’t expect we shall take on any new construction project in our fishery development until Q3 of 2013. On the cockpit development program involving the import and export trading platform, now during the Q1 2013, we briefly laid good progress in the marketing and distribution channel, having sold over fifteen 40 feet sea container, approximate 300 tons of import frozen seafood including prawns, squids, octopus and varieties of fish from Malaysia, Thailand, Norway, and Vietnam to some recordable times in super-market chains, central kitchen’s of restaurant chains, and multiple number of seafood wholesaler markets at some of the popular descendents.

We also discovered in Q1 2013, the potential of sourcing and importing good quality frozen seafood mainly in fish, as well as live seafood including live fallow catching eels, mud crabs and lobsters for market discount. They can provide good profit margins. We have tried a number of sample shipments by air cargos in good successful rates. As such, we have sent our (inaudible) over to Madagascar to our Asian to local suppliers and to investigating the situation a number of times already with the intention to send a permanent team of worker over there to set up our packaging and related facility to explore it’s potential for May 2013.

Now the profit side of the engineering and consulting services, we’re paying progress with the development of the Wholesale Center 1 and 2. Having the operation of Wholesale Center 1 commence during Q1, 2013 which is moving along nicely. Developing [Meraki] of regional times in the Guangzhou City. We anticipated that before the end of April 2013, we sell with our first lot of light sleepy cod been transshipped to the Shanghai central seafood wholesale market from the Wholesale Center 1. Although development work is still in progress on Wholesale Center 2, with the completion of these refrigerating facilities, Wholesale Center 2 has started to import variety of these catches from the Huan-gyuan Province, despite selling into local food catering chains. With the intention to introduce our beef cattle SJAP at a later date. In fact all other developments are progressing on schedule including our own Trading Center, the Leonie chain central kitchen and central bakery that are targeting to be operational within Q2 2013.

The only (inaudible) has been in operation since March 2013 and the construction of the only Restaurant 4 is moving along quickly such that to-date or traditionally more traditionally are appealing for targeting opening in late May or early June 2013. As such, we are seeing the five year plan as envisioned particularly at the wholesale level in the fishery and beef divisions. Economics of scales have been realized and the benefit of vertical integration are being achieved gradually, mostly never been between the wholesale and the distribution level.

These are enhancing the company’s competitive position. We are beginning to see a market fry effect generating upstreaming the above value and actually lay off of profit maturity and operational reliability and enforced by all financial metrics continue to move positively.

The maturation of the company is further moved in corporate covenants, the company is relented with the addition of two independent board members, Mr. Nils Sandberg and Mr. George Yap, both on the call today. Not only will the substantial experience of each benefit the company in the financing and operational directions, but also will be this directions converse status upon the company. As the company matures toward a check of critical mix of stable growth, its attitude toward debt evolves.

As with any reason, the company remains submersed to debt, that does not mean it shrunk it all together, while that is real view extremely low (inaudible) prudent in all cases. Nonetheless these allow a low but increasing debt to equity ratio as the company matures. As a general guideline, we believe that before the company achieve the $100 million in revenue any debt financing at all was independent.

However as the company synergy begin a multiplying effect on revenue to create sustainable value. This company becomes increasingly bankable starting now and in this respect the issue of low, can become a formula as follows, proving that to equity scale from 5% to 10% as the company’s net asset increased from 250 million to 500 million. Assuming that the other measure of financial health and strategy signers that we fully expected our change in it.

In this example, the company can now feel comfortable to keep on 15 million to 20 million of debt. These will still be a ratio to equity ratio of 1 to 18, of those come and do it (inaudible), but we are really for the time, space, operating company.

We believe that the companies continue to a fixed growth brings new opportunity not only for complementary business expansion but also for the alternative needs to finance the goal, particularly show as we materialize the cost listing on NASDAQ OMX. All potential bond offering and private placement become little more or likely, the later was the reason for the S-1 filing. The alternatives are being investigated and the company indents to evade itself of options on an opportunistic basis, striving to employ method that is most accretive to physical health in bottom line.

Of course at this time we cannot guarantee alternative needs to finance 2013 goal. However the worst cases would be using up all $113 million overall share in 2013. We feel taint towards attaining high cost at the net asset value, even now between the combination of bonds, long-term loan debts, debt, private placement and equity financing.

We have announced in previous years 2013 capital development budget of $118 million. These budgets underscore both our business opportunity and our growth rate. This is the last number for company of our size, yet the business has been set in motion and expansion and a chunk of opportunities up there. Of this number $26 million is expected to be raised outside internally generated funds or grants. I will prefer make up to obtain this fund within acceptable bond offer in either Sweden or Hong Kong. Once when these $26 million will be raised, we will have no need to issue more share for financing purposes. In this respect, we are targeting to achieve the raising of the $26 million within 2013.

I will encourage all attending this call to take time if you haven’t done so already to review our operational highlight for 2012, in both of our 10-K files, SEC and it’s company press release. In addition, the corporate website is undergoing transformation and we will soon serve a readily available show for all things of Sino Agro Food. We intended to giving this role within month of May 2013.

Now regarding the First North listing, it is still in progress as of last week I had received confirmation from Delphi Law Firm that the legal due diligence exercise for Sino Agro Food has been completed, and they’re working on the draft of the company description now.

Now originally we plan to use in order to feel free 2012 financial report in our company description for the FM exercise, but this has been changed really since we’re now using the audit 2012 financial report instead. However they are clerical errors when we filed the 10-K(a) on 15 April 2013 of which we’re now waiting for the ordered we sell and firm nature has come to me, once completed we will sell in an except summary credible statement of good health.

Therefore we show how to represent the main financial tool and obtain approval from more satisfied advisor for their amendment 2013 financial report to be used in our company description, and to finalize the company description according. As they are numbers of professional involvement is exercise of listing it First North as such timing of which could not be determined and that distinction although we determine to have it materialized as soon as possible.

Now let me introduce you to our two U.S. member of our Board, Mr. Neil Sandberg and Mr. George Yan. Let’s welcome Nils and George? So we call then in our camp. Nil? George. Yes, you can make your introduction of yourself instead of I read for the last 25 minutes.

Nils-Erik Sandberg

Okay, okay. (Inaudible) most anxious to join the Sino Agro board and then we should like to say a few words about that. When I – first three years ago this company I was impressed by if nowadays so unusual economical organic basic thinking rather than insisting. Also the way of creating the joint venture cooperation was impressing the – as a win-win situation for all and not and not to forget the professionalize I noted on working with the different activities also the close and friendly relationship between the company speaker and the different political representatives and local operators, we then and also later met on whole size and dinners. We had together with an – for this amazing role, when two years later, well in two years I can see my notes from the first (inaudible) was still correct.

To sum up, I must mention it’s been the building the different facilities as well as having three things running, there is something during all my visits, we haven’t sold before. The result on the lost line and for 2012 also tells the same story. I hope this will continue and I believe so.

Unidentified Company Representative

Thank you, Nil. George, you are going to put something on?

Lee Yip Kun Solomon

Yeah, good evening, good morning everybody over there. I’m George and I’m happy to say that I’m very delighted to be invited to join the board as an independent member because being a Chartered Accountant you can imagine how we scrutinized our financial statements in detail. And I have always found that Sino Agro has always performed in a reprogressive manner and linking up facilities of its vertical integration. And over the years I found that food security becomes a big issue as the word economy evolves and nowadays you find governments all over the world very concerned with food and we all know the experiences of all other types of listed companies and technologies and products different from food and we know that China being a big market. I saw the opportunity to actually be a member of the group of highly integrated people working together for a common goal, the local community benefits and the expertise that Sino brings to the deal. I think a lot of people forget that actually the strength of the company is not just also in the building of the integration that the company’s foundation has been build as an engineering and technology company and therefore there lies the strength of the company and then that is the unique part, which everybody tend to overlook and do not realize company has formed within assets, that they are not disclosed in the balance sheet. And I think a lot of people also had some problem that because we are in the food industry, we have not put on the balance sheet uncovering credits. We are in a fantastic current credit footprint, not just accounted for on our balance sheet. And just imagine with the increasing exposure on this, we could be a good beneficiary as well. And also important working very closely with Solomon and his team of executive management and as we like it and probably due to the company as you move towards the bond form and as well as product placement and nearly I admit I worked for this (inaudible). Thank you. Look forward to being you guys to follow on.

Unidentified Company Representative

Thanks, George. So without further delays, I’d like to open the door to you all and our shareholder, who may have question for us to answer.

Question-and-Answer Session

Operator

(Operator Instructions) Caller, please go ahead with your question.

Unidentified Analyst

Good morning. This is John Heron. Solomon, can you hear me?

Lee Yip Kun Solomon

Yeah, I can hear loud and clear John.

Unidentified Analyst

Okay, good, yeah, just a different type of system that involves just far as conference callis concerned. Anyways you’re telling good story, Solomon, and obviously American investors definitely don’t want to get involved with a Chinese company that is fraudulent in anyway whatsoever. So with that said, I want to take you back briefly just to 2010 about the time that you were first doing your audited financials. Put out a press release on March 30th of 2010 that specifically said from you the company’s auditor has completed their onsite visits of operation. Now, on May 24th of 2010, two and a half month later, [FBR] I spoke with your auditor Ted Madsen in Utah, he told me that on April 9, he had just signed and sent an engagement letter to your company. And he also told me that there was no way that he could do an onsite visit before the middle of July, and that there was no way that the audited financials would be done before August 1. Now, I’m looking at four press releases from 2010, basically all say the same thing. So when you said on March 30 that the company’s auditor had completed their onsite visits of operations that was a lie. Now, I’m…

Lee Yip Kun Solomon

You are referring to three years…

Unidentified Analyst

Three years later, because you cost a lot of people a lot of money. We do not appreciate that here in United States of America.

Operator

Sir, do you have any other questions.

Unidentified Analyst

I know that there was a lot of financial years.

Lee Yip Kun Solomon

No, no, I can answer that question. John, I can talk about that. At first we are associated company in Hong Kong. Now, I can ask that company of Ted’s affiliation to verify the audit, the audit process with involving their inspection of the stock and the project site at that particular time. They have sent seven people down here to do that inspection. Now Ted is quite normal, because usually the audit leaders sign only sometime if asked to audit or during the audit. Now on the infantry and the project site inspection are normally done by the Hong Kong affiliated company. Now those company are still here, they are in Hong Kong for many, many years. Now you can verify the important math thoroughly and see whether they have done the verification in the various occasions.

So I don’t know how Ted messed, he personally do not come over. But he has hired the company Hong Kong to do all these prearrangement, which is a truth.

Operator

Okay, now we will go back to our next question. Start with your question please.

Unidentified Analyst

Hello.

Operator

Start with your question please, yes. Yes, we can hear you.

Unidentified Analyst

Yes, I have a question I guess for George, Nils and Solomon. Specifically you all have financial background and initially I have the financial background also. It seems to me with your stocks significantly undervalued, is that a common technique that’s used is to what’s referred to as a stock buyback. So my question would be, if you have the ability and it sounds like you are getting the ability – I would encourage you the best investments you can make at this point is to buyback your own stock by actually securing a bond or debt equity or a debt buying some of our equity stock. I think if you did the math, you would see a powerful increase in your EPS and it would send the powerful message to the marketplace? I wonder if you could comment on that please.

Koi Ming Yap

Well, as we said earlier in my message, we already proceeded late for a alternative for financing. And part of that, it’s already on going, except we cannot afford to pick it up or we will pick up the auction to buy that back within a certain period of time which we do and we are already possessing and also in the past is not just the present, in the past, we surrendered our personal shares 18 billion expecting taking out the system such that the share prices can be stabilized.

Now also this quarter we also used some kind of financing under long-term loan basis, which also we will not see those shares do the feedback in the market anyway. And I think as we grow, as we are more financing capable, all these actions will become more evident.

Unidentified Analyst

And are you familiar with this concept and would you be able to assist Solomon securing the bond and would you be in favor of a buyback for the company?

Koi Ming Yap

Yes, that is right, buyback and stock prices undervalued relative to the net tangible asset management of the company is a good opportunity for the company to do share buyback. And obviously can raise the funds from the market, we will do what is necessary to ensure that our share price is managed, as far as is possible. At this time our primary focus is integrate with six strategy, provide comfort to our shareholders as they are managing the business more than the share expectations.

We like to know the fact that the share price value we believe that with the proposed listing on (inaudible) average use of platform can move the company strategic Atlanta more positive feedback and what will be happening in the past. It’s a good question. And I think it’s a good action to get in the next quarter or so.

Well, I would certainly encourage you to consider something like that. I think the number one investment for the company is actually their own stock. I think it’s – didn’t get more time for your path and phase value. And it looks like, I wish you’ve lost and we need to get the stock price of this obviously under performed and there has been a lot of stockholders that’s been here for a couple of years and have a lot of royalty for the company and we want to see as owners of the company also we want to see a reward for our investment.

Nils-Erik Sandberg

Yes, February the stock price has been already taken we are thinking of writing to complete it to remain some time with rate being available within and we can actually go into the prawn market of Hong Kong a lot easier.

Unidentified Analyst

Okay, that was my question, thank you very much.

Operator

Okay. We will go ahead and turn to next question.

Unidentified Analyst

Hi, this is [Eric] calling, a retail investor from Sweden.

Nils-Erik Sandberg

[Eric], how are you?

Unidentified Analyst

I am fine, thank you. Thanks for a great walk through of the year and the outlook. I also want to comment on the great improvement on the operating cash flow I mean finally the cash is flowing and so hopefully they can help Q2 financing, which is all top to get the enrollments. I am a bit curious about the S-1 filing, and the perspective with a high margin and you mentioned that it will most likely be a private placements and it would not be a debt there or could you just elaborate a bit on that and who are the investors you are founding will basically on speak through shares or like that?

Nils-Erik Sandberg

There are high as far as we find the S-1 registrations payment purely for that purposes because we then have a share. When we do private placement and so on, they don’t have to be restricted. You see, with that and we are already making various of marketing exercise, talking to a number of Chinese investors and so on as well as some investors in Hong Kong by doing some private placement exercise with them. Now is a comfort once when their S-1 is being approved that we can just give them a free share to hold on and then I mean my idea is using this S-1 share if it is when it’s become available, so we can determine a fair value on them. But all this will not happen and it only happen after when we completed our placement exercises to make it more viable.

Unidentified Analyst

Okay, that makes sense. It’s like you issued in your press release, but you would be targeting this share that net tangible assets maybe that’s not a bad idea or that target is a bit more feasible active efforts northerly, I guess it’s quite difficult at the moment looking at the different shares issued, new share issued. Maybe share with this us too?

Nils-Erik Sandberg

You see if don’t apply for the – Eric, we don’t apply for the S-1 and just go for the different exercise by then it will too late that is on that.

Unidentified Analyst

Okay. So I understand also, but I read some of that was 180 days limit on the S-1, does that mean that you have to execute the deals within 180 days or?

Nils-Erik Sandberg

No, no not, but by rules on paper that's what I said, but I think my loyalty gives me a advice being able to come to that we going to share, any how we don't place any, we find out the legal revenues to overcome the problem I suppose.

Unidentified Analyst

Okay. But so I understand you correctly if you are most likely execute this deal around net tangible assets, all right.

Nils-Erik Sandberg

Yes, I’m very hopeful that we should be able to achieve that.

Unidentified Analyst

Okay, great. And thanks for that clarification. And in addition you mentioned a bit about the reasons why you are listing First North Listing exercise and the restatements of some of the financials, if I heard you correctly, could you develop a bit on that and specify the particular parts of it?

Koi Ming Yap

Yes Eric, because you see the last two years is a nightmare to us and as far as filing the financial report on time, because the SEC come out this, it’s one of the [AO] format. Probably, it’s a three step process, every step when we do any amendment, every step of the way they are missing amendments, coming back because they have to carry out pretty complex process and is confusing to us and so even the last one, that was on the 15, there was five, eight in when they the completed the last one and I almost could not even opened my eyes, but we have to try our own time.

So we said okay five, but the mixed state it came out when we read the final report that came on the 15 and it still knew that with the all amendment that has not been done. It is horrifying but it happened to us before in every quarter but a quarter is not so complicated, but this one is very complicated and a lot of typo error, lot of figures that is supposed to be changed and they never got changed and all.

Unidentified Analyst

Okay I understand, so this has been the main obstacle because this has caused the delay in the listing schedule more or less or are there other?

Koi Ming Yap

Yeah more delays, because now amendments look good now. In this last draft coming back from the process. It looks good, only one layer of amendment to be corrected. I don’t think there will be mistake on that latter one, then I got caught with my auditors in all fix. So I think that, I think that we have to wait and see.

Unidentified Analyst

Okay, I understand. And I understand that you can’t give a specific date and nor can your advisors, but are you looking at targeting, for example, the listing post summer or because usually advisors take holiday breaks during the summer, so usually schedule or you want to try to get the listing before this summer or after this summer, do you have any, could you give any guidance on that?

Koi Ming Yap

Well, as I said to you before, that’s confirmed to me last week, they have done the legal duty and agreed that, we’ve also been another data on them, they are putting their company description pieces together now and our aim is to get it done as much as you do.

Unidentified Analyst

Okay.

Koi Ming Yap

But this certainly put pressure more, I have to get permission, I have to get approval from everybody. So I can honestly tell you, I think the earliest, the better or be as a shareholder and for the company it’s very critical, every day cost the company extra dollars.

Unidentified Analyst

Thought about it.

Nils-Erik Sandberg

I am here to introduce to you Eric, one of the best analyst people in Sweden is also working with one of the bigger U.S. banks, his legacy is quite high.

Unidentified Analyst

Okay Nils, what’s the name?

Nils-Erik Sandberg

Eric, you can introduce yourself.

Unidentified Analyst

Yeah, sure. I worked in – I am just calling as a private investor, there is nothing to do with my employer, but I worked for one of the major U.S. bank here at the Stockholm office.

Koi Ming Yap

Okay.

Unidentified Analyst

And to continue on that, I have one more question or actually to talking of the dividend from the 2012 financial results, have you come to any conclusion, it’s there going to do a dividend or if they going to split it into F shares and like you did last year and when do you plan of paying them out, etcetera?

Koi Ming Yap

You see, there is a little bit confusion for everybody and all. On the spend with year-to-year dividend policy, we are paying cash upon additional dividend that we are paying for the current or the past year, when we do allowance like last year, we do give an additional 42 or came into 11 performances in the shares, which will get cash out when recorded in full payment in April.

So, for this year, it will travel from south and we will also be cash rather than being paid, but will be paid, but additional one, we have not quite work it out yet, it depends on, depending on our cash flow situation.

Unidentified Analyst

Okay. And Do you see any timing window for deciding on that dividend, is that going to be both summer or?

Koi Ming Yap

That will be like usual, at the latter part of the year or early part of the year, but we will be able to give you some further idea by the later quarter.

Unidentified Analyst

Okay, great. And, there is also various some talks and I mean, there has bee some previous statements looking at the payout ratio, and working up with cash rich company, and talking about 2013 and 2015 beyond, and actually increasing the dividend payout, how do you feel for that, I imagine that’s not decide, where it hasn’t been taken any strategic decisions on that, but is that still on the agenda or are you going to focus on putting all the cash flow into continued growth?

Yap Koi Ming

So on paper we’re intending to upgrade that after 2014, and but of course you also would know and that is subject to the market reception with our share prices and old debt are performing nicely. There is no reason why we can’t upgrade that much earlier.

Unidentified Analyst

And there was also some discussions previously about the spin-off and buy back of the subsidiaries like for example SDAP, is that still something that’s on (inaudible)?

Yap Koi Ming

That train and direction has not changed. I think we should be able to get that into a dragon head industry by the end of this year, as reported by management and I’m still rather confident that they should be in the category of the dragon head industry, with how can it be short or (inaudible) stopping it.

Having said that, that’s my intention, I want to change that into the dragon head industry and we will take it into Hong Kong stock exchange for this first one of scheme of exercise.

Unidentified Analyst

I understand. Okay. Thanks. And then I have one final question for George.

Yap Koi Ming

Yes, go ahead.

Unidentified Analyst

And that is looking at the 10-K and for example, Solomon has a substantial share ownership and also Neil for shares in the open market as far as I understand, but you don’t have any report at holdings, and given that you are financial professional as well if you just look at the current valuation of where we have a trailing key multiple of 0.7, why is that you have invested in the Company.

Yap Koi Ming

Well, I just joined the Board and miss much some action later in the year. Okay.

Unidentified Analyst

Okay, Thanks that was all of my questions.

Yap Koi Ming

Okay, I think most important is that… okay, bye – thanks thank you.

Operator

We’ll move on to our next question.

Unidentified Analyst

Hello, Solomon, hi this is [John Shafer]. How are you?

Lee Yip Kun Solomon

John, how are you? Seven days from this operation time.

Unidentified Analyst

I know, you must be very busy.

Lee Yip Kun Solomon

Where you been in (inaudible) John and Peter.

Unidentified Analyst

I am sorry

Lee Yip Kun Solomon

(Inaudible) John and Peter.

Unidentified Analyst

(Inaudible) sorry, I’m not understanding this.

Lee Yip Kun Solomon

I said, are you John and Peter in Hawaiian.

Unidentified Analyst

I don’t think so, I don’t think so. Anyway welcome Nils, welcome George just a couple of questions, regard to the city card you are competing against from other Asian countries that are coming in, are those certified organic credit card just like yours.

Unidentified Company Representative

No, no, no they are not certified but you see when you talk about organic products in China, it’s a still little bit early……

Unidentified Analyst

Yeah.

Unidentified Company Representative

We are suffering a little bit this year on the safety cause. But they are other alternatives we are working at, soon there we will be addition little bit bring the debt back I assume.

Unidentified Analyst

Yeah, yeah. Do you really – you are competing against kind of generic strategic cost, they are not distinguishing your products and theirs, is that right?

Koi Ming Yap

No, no, they are not.

Unidentified Analyst

Yeah.

Koi Ming Yap

In fact, we are competing with even the local (inaudible), yeah that is for a promotion.

Unidentified Analyst

Yeah, that’s same, but I am sure in time that will be corrected. But I also have a question about Leonie's, I guess it’s kind of lower on your set of priorities at the moment, but it is the run out of the restaurant chain, is it sort of pretended on financing this year or is it going to happen anyway?

Koi Ming Yap

I think I wouldn’t be surprised this year about change of something like Leonie's restaurant being setup before end of this year, but having said that, this restaurant is not all going restaurant, some of these are fast food type of food outlet and some of these are mobile food outlet, and when you put the big one, medium one, small one all together is feasible to get to that number.

Unidentified Analyst

When I was there last I think there was only one Leonie's, now opened two more, what is the reception then to the product?

Koi Ming Yap

Well, so far so good. At the moment, we forever have to do planning the system for the restaurant.

Unidentified Analyst

Right, true.

Lee Yip Kun Solomon

That is mainly on the catering side because I think although we are Chinese, but the strange part here is each district, each place has different clients.

Unidentified Analyst

Right, right. I’m sure. Even with the [Shenghua]

Lee Yip Kun Solomon

Sure. Within Guangzhou we sold (inaudible) and race of different types of clients.

Unidentified Analyst

Yeah.

Lee Yip Kun Solomon

So we are forever elaborating and then working very hard in the system to try, get the food that is suitable and the price is suitable for that particular group of people.

Unidentified Analyst

Exactly.

Lee Yip Kun Solomon

Now this is what we’re experiencing at the moment.

Unidentified Analyst

Right, right, right. Well, I’m sure there’s a formula that goes get down. I hope you’re still serving Italian ice cream.

Lee Yip Kun Solomon

Well, then the Italian ice cream is very good. I would say it’s very good. We have very good report all over.

Unidentified Analyst

Yeah. That’s good. Anyway…

Koi Ming Yap

The ice cream is very good because it’s coming from Australia.

Unidentified Analyst

Yeah.

Koi Ming Yap

Grade of ice cream is excellent I would say.

Unidentified Analyst

Yeah, yeah. Well, Solomon best of luck and I’m really looking forward to seeing what the future brings.

Lee Yip Kun Solomon

Thanks, John. And my visit will come over this year.

Unidentified Analyst

I assume we will.

Lee Yip Kun Solomon

On the organized and next visit too.

Unidentified Analyst

Yes, definitely. Thanks, Solomon.

Lee Yip Kun Solomon

Thanks.

Koi Ming Yap

Thank you, John

Operator

Okay. We’ll go ahead and go onto our next question.

Unidentified Analyst

Yes. Hi, this is Thomas. I have few quick questions. First one, regarding the dilution in the last few months, I realized we gave out shares in the last two years, but what I didn’t get is why did the dilution rate increase in Q4 and in Q1 in the last two Qs at even faster rates than before. Can you give me some reasons for that?

Lee Yip Kun Solomon

Well, say the current month, for instance Q3, we are using that into a different program; you’ll find all of that. You see, I understand out of the 12 million shares, 8 million shares were arranged into a long-term loan from the short loan. Now, you will not see those as we’re inspecting the market for years. And out of that, the terms of the 4 million, we have 2.5 million (inaudible) the Chinese people here. And we have an option to buy them back at 150% of the cost price in 18 months time. And otherwise the 1.5 million is restricted shares. So they will not see the market for that particular one to six months either.

So you see to answer your question boldly, is you see people can see the figures increase, but they’re not getting back in the market. They should not have such an impact in our share prices. Now, having said that conversely, we are not – myself. I have never bought in the market or sold in the market one [affiliate] shares. And in fact we’re just business operator. So I don’t really understand how the market acts and in what way it goes up and done really puzzles me, but having said that we study the market with my team here for quite some time.

Now I think the major reason is not some of these shares affecting the market quickly, but it is the stigma situation of the Chinese company being traded in the state number one, And number two is, it has been boring the older trend, the OTC market is really pushing more at the moment especially to the Chinese contest listed in the state. If you check the OTC market, it is made by 130 the size of these OMX Stockholm market. So I’ve been keep saying that for the past two years, we are only a small company and a small kit company especially a Chinese base company under this kind of most real the US stock market, our share can be easily manipulated by some sectional traders. I can see the patterns consistently. So in other way – that is the major reason. These are major reason I try to find a better market in OMX Stockholm. And I'm sure in times to come our fundamental must win out, being a better senior market like Stockholm.

Unidentified Analyst

Yes that's what we all hope obviously. Do you have a guess – if you would make a guess, if you sell shares to joint-venture partners, how much percentage is getting back into the market, sold into the market – what would be your guess, what's the percentage of the guess?

Koi Ming Yap

I recon this year first quarter is quite safe but the last quarter beyond some, it is we could keep getting some financing from some of these regular clients who has money and who wants US dollars in exchange.

Unidentified Analyst

Yeah

Koi Ming Yap

So, some of these must have some share getting back to the market. I don’t want to say, this can be both. Based on that I would say out of the $17 million that we did last year, most probably 20%, 30% are being invested the market. But we have done so much in generating more new shareholders last year. But unfortunately, we’re not in the position to attract institutional shareholders. So and the normal small shareholders you buy today and he buy yesterday or the day after. It just doesn’t have that impact in completing with these professional traders.

Unidentified Analyst

Yeah, okay. And other thing, I realized you’re looking out for bond financing or private placements, can you tell me what you would prefer. Are you looking for both?

Koi Ming Yap

Well, at the moment honestly I tell you is, as long as I get a combination, I’ll be happy.

Unidentified Analyst

Yeah

Koi Ming Yap

But of course if there is somebody so good give me a straight warm and reasonable weight, I take it.

Unidentified Analyst

Right. And you said that the worst case is we use all the $130 million of the authorized share, is there any possibility in your remind that we will see it.

Koi Ming Yap

Well, I hope not.

Unidentified Analyst

Hello, gentlemen. Hello?

Koi Ming Yap

Yes

Unidentified Analyst

Yes. First of all, I like to congratulate everybody on a great year. And I’d like to point a couple of things out. In the U.S., we are starting to see in various financial publications, a recommendations to take a second look at Chinese companies. In fact, I think in Barron's, this week, we have it is an article called, A Different Approach, and it’s an interview with Jesper Madsen, he is a portfolio manager at Matthews China Dividend Fund. It’s something that I would suggest that everybody take a look at. So in the U.S., we are starting to see people warming up to the Chinese companies, but my question is, since the fishery is a large part of your business, I think it’s around 60% of your revenues, and you mentioned prices coming down from $25 per kilo down to $16 per kilo, and you still beat the numbers. My first question is, where do you see the prices going forward or will they continue to go down? And then secondly, if they go back up to $25, how that would affect your bottom line?

Koi Ming Yap

Well, at the moment, I think the Q1 with the decrease of the sleepy cod prices, we are still holding very well because we are now more than less consolidating, publically integrating and duplicate. So we are no longer depending on just one single product or one single items. You see having said that, you see you also must look at it. The beef prices were not vary tremendous, and this is the business we are in. We are in the commodity that is purely, very, very susceptible to demand and supplies. So luckily we‘re having two very good area, one is beef, one is fishery. If the fish, that particular species going down, doesn't mean the prawn is going down, the prawn prices this year is coming up sky rocket.

Unidentified Analyst

Okay. What percentage of that....

Operator

I do apologize about that. I thought your question was over. (Operator Instructions) Okay and we'll go ahead and move on with that.

Unidentified Analyst

Hello Solomon.

Lee Yip Kun Solomon

Yes.

Unidentified Analyst

One of the items that recently came up with that you had switched to the new Investor Relations firm, could you identify who that inform is at point and what kind of things or what kind of steps that investment relations firm is going to be doing for you?

Lee Yip Kun Solomon

To answer that question, I don't protesting, I'm not talking about in Sweden. In Sweden I'm looking for a different tracks of firms which we have a few potential clients and then do make some decision on showing, but this is purely for the state, should we seen in the past, I’d say little come from it. I’ve used mainly personal type of small company and personal type of small person, I mean dedicated person who can differ our attention a lot of times. Now, the new one we’re changing from is [Peter Grossman] and I believe he is very dedicated and he is very good and so far in April, all our press releases and all our action in that area, including the future transformation of our website is going to be handled by Peter. I think he will do a very efficient job.

Operator

And then we’ll go ahead and move to our next. Please go ahead.

Unidentified Analyst

Okay. Hi. This is Thomas once again, because I got cut off suddenly. Just two quick questions. Can you tell me who is our new Investor Relations team now?

Lee Yip Kun Solomon

Peter Grossman.

Unidentified Analyst

Okay. Are they located in Sweden now or we have the Swedish one now?

Lee Yip Kun Solomon

No, no, no. This has nothing to do with Sweden. As I said, Thomas, Sweden, I’m considering about three different firms. I think in Sweden the firms are needed is different to the person or that small firm are needed in the state.

Unidentified Analyst

Okay, okay. Can you tell me – I didn’t understand it properly if somebody else asked this, but are you considering a higher payout of earnings for the [debate]? Right now it’s like 8% and are you considering going higher in the next few years?

Lee Yip Kun Solomon

Yes, on paper I intent to do that after 2014. My answer to that question before is, it could come earlier, so many. Our market reception is better.

Unidentified Analyst

Okay. One more thing; obviously you have the by far the majority of the voting rights. So can you tell me and also the other Board members, is that a concern for person of listing of any due diligence guides as you have the higher majority of voting rights? And will that be changed in the future?

Koi Ming Yap

It has never come to my mind yet as far as the question is concerned, Thomas. But I suppose everything changes in this world. One day it might have to, I am not so sure.

Unidentified Analyst

Okay. But it’s no obvious concern by anybody, you never heard that?

Koi Ming Yap

No, no, the legal duty has never raised any question on that.

Unidentified Analyst

Okay, I see. Okay, just one more thing. I realized I mean the company is growing so much and so big and ended so cheap. Why is basically nobody interested from Asia, you know to finance the company, the venture capital firms, I mean everybody should lookout for such a company, but why isn’t it happening?

Nils-Erik Sandberg

Well, number one financial arrangement in China so far lagging behind. And number two is being in the OTCBB, we are no different to the state. A lot of security firm or investment house is not allowed to introduce our company in China.

Unidentified Analyst

Okay. I am just wondering all the time, because Asia is like a big financing place as well. And then I was just wondering why that seems so little interest all the time in such a small, but?

Koi Ming Yap

We have no difference to the state, no institutional players here, but we have a lot of small player, small shareholders

Unidentified Analyst

Okay. Okay well, that’s it. Thanks.

Operator

Okay. (Operator Instructions) Let’s go on with our next question, please. Go ahead with your question.

Unidentified Analyst

Hello, this is [Johannes] from Sweden, a retail investor. Can you hear me?

Koi Ming Yap

Hello. How are you?

Unidentified Analyst

Hi, great. Yeah, I couldn’t really understand or hear your answers on this ownership, could you mind to elaborate a little more about that?

Nils-Erik Sandberg

I didn’t exactly getting the question.

Unidentified Analyst

Well, you just answered a question about the ownership of company in the company, and I couldn’t really hear the answer.

Nils-Erik Sandberg

Oh I see. George, you answer it?

Koi Ming Yap

I think the question that was asked what why didn’t I have any shares in the company and that is it is because I’ve just joined the company and that just look and we had a lookout as to how I improve my position by according shares in the company and now that’s because with all these proper exercises, I can’t be as a Director, buying shares, everybody else to stabilize and then you can see me on the shareholder list as well.

Unidentified Analyst

Okay, great. Thanks.

Koi Ming Yap

I think a significant point of this is that we are now improving a lot on our corporate governance and if you made in the specializing and so it will be until I settle that area probably for the company, that’s when I will consider buying shares in the company, because I have to make my announcement as a new side event all the credit issues that we are trying to enhance (inaudible) within the company as we go forward.

Unidentified Analyst

Thank you.

Operator

And we will move on for our next question. Caller, please go head.

Unidentified Analyst

Yes, would you have any need or desire sort of the HU Plantation instead of all the equity raises we’re doing currently?

Lee Yip Kun Solomon

No, that’s never come to my mind. What it comes to my mind is how to look it better. Unless that business is really not worth having, we never would even want to dispose in the business that’s still making money. So, in a way, there has never occurred in my mind.

Unidentified Analyst

Okay. Another quick question? On the (inaudible) report, at least 55 million in contingencies and commitments, but it’s not in 10-K, why is that?

Lee Yip Kun Solomon

Well, I can’t really comment on the third parties right out. But you have right to appeal and it’s then arise, will give you an answer.

Unidentified Analyst

Okay. And, one last question of SJAP. How much does Sino of that property?

Lee Yip Kun Solomon

Well big one on paper, we only own 46%, but controlling the Director, Ship and the management of the company and more officially, even open for them. I cannot tell you (inaudible).

Unidentified Analyst

Okay. Thank you.

Operator

The next one, please. Please, go ahead with your question.

Unidentified Analyst

Hi everybody, good results (inaudible) I have a few questions, the first one when do you…

Nils-Erik Sandberg

Who I am speaking to. I can’t hear you the name, sorry.

Unidentified Analyst

[Patrick Logan], a private investor in Sweden.

Nils-Erik Sandberg

Okay.

Unidentified Analyst

But when do you estimate to be cash flow positive?

Lee Yip Kun Solomon

When do I expect our cash flow positive?

Unidentified Analyst

Yeah.

Lee Yip Kun Solomon

We are already cash flow positive. We have made the big improvement from before although we can’t use it in real we have to use it or trying that’s all.

Unidentified Analyst

How about after investments, when you have free cash flow to?

Lee Yip Kun Solomon

Do you mean the cash flow, which position as we always mentioned after the spinoff and things like that, but I think you see the honest position with these once when we raise this shortfall of (inaudible), I don’t need anymore financing.

Unidentified Analyst

It could be when did you say, May or June do you expect this some kind of normal spring in Hong Kong?

Lee Yip Kun Solomon

Yes, working on that.

Unidentified Analyst

Okay, perfect. And one last question here, can you tell us on share right now?

Lee Yip Kun Solomon

I haven’t checked with my transfer agent, but I think it’s pretty close to I mean (inaudible) or something like that.

Unidentified Analyst

Okay, thank you very much guys.

Lee Yip Kun Solomon

Thank you.

Koi Ming Yap

Thank you.

Operator

Next question please? Hello, go ahead with your question please.

Unidentified Analyst

Hello can you hear me.

Operator

Yes we can hear you.

Unidentified Analyst

Hello, okay. Hi this is (inaudible) from the U.S. I have two questions for you; firstly I would like to congratulate management for a great 2012 and the institution as we can fantastic. My two questions, number one; you say that after 2015 the ratios on this revenue to total revenue would have stabilized to the 15% of total revenue. Could you tell us what kind of margin would you expect from that point on. Is it realistic to expect from 2016 on and net margin of 30% or over. What is your view on that?

Nils-Erik Sandberg

I haven’t come back for you, but I can give you an example, I think if you – anyway under half of $500 million and below in turnover, we are targeting anyway up to 25% gross margins. But to be exceeding $500 million and above, I think we are very much into very competitive environment. Now that is why I was saying light to maintain our engineering consultant services beyond that time as we said 15% of our total group revenue. Because we are engineering base company and we make good margin on the engineering services in China.

So having said that but anything from $500 million turnover and upward, I recommend to look at 30% margin was impractical (inaudible) to achieve any way (inaudible) about 18% to 20%.

Unidentified Analyst

Okay, my question number two relates to the H Group, issue of taxation, can you tell me why you don’t want to sell issue of taxation to raise cash instead of issuing those millions of financing shares?

Koi Ming Yap

Yeah, because you see debt foundation we own and we started in 2007, last year wasn’t a very good year, because the plant disease problem so as the year before. Now as a Chinese, I don’t like to sell anything that we own for such a long time number one. And number two, we do can sell that. We must fix the farm up to really prime standard in order to give a much better profit on the sales. For the moment it is the wrong timing to start and I would like to really fix it you see, but looking like it looking good so far.

Unidentified Analyst

Well, from my point of view as a shareholder, it looks like a major distraction we are into the fish and the beef and the restaurant business, you’re building a reputable food chain that’s wonderful, and just my feeling is to issue taxation is very seasonal, it take a lot of your effort while doing only like $7 million and $8 million net profit a year, is that worth it?

Koi Ming Yap

We’ll still a very profitable company although it has its problem, and this year I’m pretty sure we will improve it to better.

Unidentified Analyst

Good. My next question, sorry can I get one more question? Okay, about sale on your restaurant, 51% of the Leonie's chain, can you tell me how much you that cost in that timeframe, that we have pay for the restaurant it’s been going, it’s a lot of capital in pointing that or do we have to just pay a certain amount of dollars to own 51% of the company of the chain.

Nils-Erik Sandberg

Well, that agreement we already announced that then already five, I think it was the two, three in part all these agreement inside it will cash you order, they are on going, what we have to and how we have to do and what kind of performance those restaurants have to do before we commit.

Unidentified Analyst

Okay, but the plan is to build like 50 restaurants, it will end up 2014 and right now 2013 cover how are you going to build for this seven restaurants in the serial like one show in the next one and half years

Nils-Erik Sandberg

Well, you see the contract of the 50 restaurants you mentioned I supposed there is a confirmation of some cost that called Combi restaurant which is costing a lot of capital, that there are medium sized like fast-food restaurants and food outlet we called that medium size and they has more mobile food outlet included in the 50, so as I answer that question before I won’t be at the surprise to see at least half of the (inaudible) ran this year.

Unidentified Analyst

You mean kind of 50 million this year excluding the mobile and fast-food all that…

Nils-Erik Sandberg

Yeah, I wouldn’t be a bit surprised to see that happen and also you must realize this people operating the restaurant obviously is smart, I mean they couldn’t (inaudible) should take they are also merge acquisition to be happen fast.

Unidentified Analyst

Okay, excellent. Thank you.

Operator

Any questions now?

Lee Yip Kun Solomon

Hello.

Operator

Yes, go ahead please.

Nils-Erik Sandberg

Hello

Unidentified Analyst

Yes, this is Brian from the States, how are you?

Nils-Erik Sandberg

How are you?

Unidentified Analyst

Good. The question for George again and I hate to [repeat] the point, but George I would have to say you’ve been a shareholder for five months and you are an executive of the company and you have said in your last statement that you’re waiting for the share price to stabilize before you take an investment in the company. First of all, I can’t think of a better investment with the (inaudible) less than one and the company’s will be the prices almost near low. As a director and as a shareholder I would suspect that this point you should take an investment and I would hope that you would commit to that?

Koi Ming Yap

Yeah, I think in the commitment to buying shares of the company because at the moment because they are doing just few diligence exercise and all that. It should be and has amount of information within myself and the company, constantly we completed exercising in front of corporate and an acquisition at this time.

Unidentified Analyst

So are you prohibited by at this point from buying?

Koi Ming Yap

Yeah, by our governance rules taking more exercise, so I am not for me do you take myself and then buy and then because you didn’t find information, so you are borrowing.

Unidentified Analyst

Okay, well.

Lee Yip Kun Solomon

So, I didn’t say exercise for the company and all the corporate exercises, the S1 the S1 listing has done, and everything is settle then I have to make a declaration to my members, my board of members first before I want do that so that is all above (inaudible).

Unidentified Analyst

I understand and I apologize, I didn't notice your – the window was closed still.

Nils-Erik Sandberg

We did some new rules of our insider trading between broader members and that we doing at corporate exercise like that we have sort of embodied and probably going to meet and go and buy anything and do anything enough.

Unidentified Analyst

Okay. So, a question for your Solomon, with the first quarter now over, do you intent to file the Q1 on time by 2015?

Lee Yip Kun Solomon

Like usual, we mostly decided before – just by the (inaudible).

Unidentified Analyst

And would you have another conference call at the time?

Lee Yip Kun Solomon

Definitely. Every quarter we have one.

Unidentified Analyst

Yes, I understand, so by as far as you know at this point in time I think everything is going on track and as far as getting the financial statements prepared that will have a on time process for every first quarter?

Lee Yip Kun Solomon

Well, we have to make it on time that’s probably days away. Yes, we’re already starting working.

Unidentified Analyst

Do you think you need to make an investment into your accounting, in your finance department to make sure that results are more timely?

Lee Yip Kun Solomon

Yes, because you see we have so many subsidiaries and its spread over pretty (inaudible) the coordination is important and at the same time most of them are Chinese you mustn’t forget. This is our major difficulty, to translate everything.

Unidentified Analyst

I understand that, but there also are other Chinese companies with major subsidiaries that do get their financial debt on time. So maybe you need to…

Lee Yip Kun Solomon

Well, so far we have not failed. So far we have not failed to file on time. Let’s put it this way.

Unidentified Analyst

I understand that, but as the company grows and you want to show integrity and you want to show that you are a first rate company, I think that your accounting and finance department needs to be first grade also.

Lee Yip Kun Solomon

Well, they are trying their best and you see our change here. We have not such a huge team like some of this huge company has and we basically (inaudible) I have to educate all my accounting system, my accountants as well and we also have to [liege] with all the auditors. But in any case every time we have managed to file on time.

Unidentified Analyst

Yes, I understand. Did you have a full-time CFO or do you act as a CFO for the company?

Lee Yip Kun Solomon

Well, we have our Financial Controller here definitely, but he’s a Chinese. So in a way George and I have to check a lot of the English translations. It doesn’t mean they don’t understand English, but the language has a little bit of a barrier. That’s all.

Unidentified Analyst

Do you think it's important at this point in the evolution of the company for you to hire a sophisticated CFO that understands Chinese and English?

Lee Yip Kun Solomon

Well, we have been advertising for once, but so far not the easiest thing.

Unidentified Analyst

And why is that?

Lee Yip Kun Solomon

Well, with the (inaudible) and various region is really, I think to break in English, it’s like your official English in the state.

Unidentified Analyst

I am sorry, didn’t understand that.

Lee Yip Kun Solomon

Well, when you really drive this Great Canyon English easier with the velocity and suppose with constituted and top grade with English honor. But if it in the hierarchy, it is in privilege of the high school graduate in the state.

Unidentified Analyst

Thanks. Well, I think as companies grow and want to get more sophisticated and known as first way shopping…

Lee Yip Kun Solomon

Eventually we will get there, eventually we will do that. I intend when you get to Sweden, we are going to have our CFO for Sweden.

Unidentified Analyst

Well, I hope you still, because I think that would add to your valuation, I think the more that you can share that you have first way is perhaps people maybe somebody from a big core accounting firm that we are major ten firms that understands Chinese and English I think that you will get a higher valuations just based on the sound that you have.

Lee Yip Kun Solomon

Well, we will move to a better position definitely. We are managing okay, but it doesn’t mean we would not focus on this.

Unidentified Analyst

Okay. Well, thank you. Thank you for hearing me.

Operator

And we will move onto our next question.

Unidentified Analyst

Forgive me, if I didn’t hear this previously but is there – have you given the guidance for 2013?

Lee Yip Kun Solomon

On the speech we have given some indication of Q1 of 2013 but the guidance in more detail will come out, I think in the midst Q1 report and at the business sector.

Unidentified Analyst

Okay, thanks.

Operator

Moving to our next question, go ahead please. Harvard go ahead with your question. You might have your phone on mute. Okay, well that was your last question in the queue gentlemen. Do you have any closing remarks?

Lee Yip Kun Solomon

That’s the end of the questions?

Operator

Yes it is. We actually just had – one more pop up, do you have time to take that.

Lee Yip Kun Solomon

Okay, thanks all of you for attending this and I look forward to another call in only one months time for that 2013 first quarter result. I am sure we will have seen a lot of progress on the main items raised in this call. Thank you very much.

Nils-Erik Sandberg

Thank you.

Koi Ming Yap

Thank you.

Operator

Thank you. And we will consider it’s done for the day. No problem. Have a great day.

Lee Yip Kun Solomon

Okay. Thank you.

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