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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 March 31, 2012

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):

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 May 7, 2012, the issuer had 36,823,626 shares of common stock outstanding.

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ASIA GREEN AGRICULTURE CORPORATION
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2012

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	25
	Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	34
	Item 4.	CONTROLS AND PROCEDURES	34
PART II —OTHER INFORMATION			35
	Item 1.	LEGAL PROCEEDINGS	35
	Item 1A. .	RISK FACTORS	35
	Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	35
	Item 3.	DEFAULTS UPON SENIOR SECURITIES	35
	Item 4.	MINE SAFETY DISCLOSURES	35
	Item 5.	OTHER INFORMATION	35
	Item 6.	EXHIBITS	35
SIGNATURES			36
EXHIBIT INDEX			37

-i-

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EXPLANATORY NOTE

In this report, unless the context otherwise requires, the terms “AGAC,” “Company,” “we,” “us,” and “our” refer to Asia Green Agriculture Corporation (formerly known as SMSA Palestine Acquisition Corp.), 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.

On January 18, 2011, we filed amended and restated Articles of Incorporation with the Nevada Secretary of State to give effect to (i) a 2.5 for 1 forward stock split and (ii) an increase in our authorized common stock from 100 million shares to 200 million shares and (iii) a name change from SMSA Palestine Acquisition Corporation to Asia Green Agriculture Corporation. The information in this report reflects the stock split, increase in authorized capital and name change.

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 subject to certain uncertainties and other factors that could cause actual results to differ materially from such statements. 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. 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.

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PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

Asia Green Agriculture Corporation
Condensed Consolidated Statements of Income and Comprehensive Income
For the three months ended March 31, 2012 and 2011
(Stated in US Dollars)

		Three months ended March 31
		(Unaudited)
		2012			2011
Sales revenue	$	32,686,030		$	25,938,996
Cost of sales		(22,860,558	)		(18,050,227	)
Gross profit		9,825,472			7,888,769
Operating expenses
Administrative expenses		1,351,246			1,494,344
Selling expenses		547,613			461,295
		1,898,859			1,955,639
Income from operations		7,926,613			5,933,130
Government grant income		177,296			81,615
Other income - net - Note 10		491,084			192,311
Net finance costs - Note 9		(334,591	)		(29,010	)
Income before income taxes		8,260,402			6,178,046
Income taxes - Note 8		(249,039	)		(176,557	)
Net income	$	8,011,363		$	6,001,489
Other comprehensive income
Foreign currency translation adjustments		763,898			375,083
Total comprehensive income	$	8,775,261		$	6,376,572
Earnings per share: basic and diluted - Note 11	$	0.218		$	0.163
Weighted average number of shares outstanding: basic and diluted		36,823,626			36,823,626

See the accompanying notes to condensed consolidated financial statements.

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Asia Green Agriculture Corporation
Condensed Consolidated Balance Sheets
As of March 31, 2012 and December 31, 2011
(Stated in US Dollars)

		March 31,			December 31,
		2012			2011
		(Unaudited)			(Audited)
ASSETS
Current assets
Cash and cash equivalents	$	6,796,749		$	12,832,811
Restricted cash - Note 4		1,018,724			1,753,359
Trade receivables, net - Note 5		30,790,559			24,173,794
Other receivables, prepayments and deposits - Note 6		6,993,047			6,839,970
Inventories - Note 7		31,453,189			20,097,977
Income tax recoverable		-			47,286
Deferred tax assets		258,015			337,884
Total current assets		77,310,283			66,083,081
Property, plant and equipment, net - Note 12		17,804,903			16,550,915
Deposits paid - Note 14		12,823,747			14,403,380
Land use rights - Note 13		26,398,946			21,632,405
TOTAL ASSETS	$	134,337,879		$	118,669,781
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade payables - Note 4	$	11,188,990		$	5,714,594
Bills payable - Note 4		-			1,571,200
Receipts in advance		133,807			31,559
Loans from third parties - Note 18		158,400			157,120
Other payables and accrued expenses - Note 15		4,307,840			5,285,000
Amounts due to related parties - Note 16		1,182,412			364,918
Secured short-term borrowings - Note 17		11,877,019			9,415,291
Income tax payable		42,202			-
Total current liabilities		28,890,670			22,539,682
Deferred tax liabilities		28,154			28,170
TOTAL LIABILITIES		28,918,824			22,567,852
COMMITMENTS AND CONTINGENCIES - Note 22
STOCKHOLDERS’ EQUITY
Preferred stock: par value $0.001 per share; authorized 10,000,000 shares in 2012        and 2011; none issued and outstanding    Common stock: par value $0.001 per share; authorized 200,000,000 shares in 2012        and 2011; 36,823,626 shares issued and outstanding in 2012 and 2011		36,824			36,824
Additional paid-in capital		21,018,023			20,476,158
Statutory reserve - Note 20		7,737,596			7,013,087
Other surplus reserve - Note 20		3,792,069			3,792,069
Accumulated other comprehensive income		5,832,630			5,068,732
Retained earnings		67,001,913			59,715,059
TOTAL STOCKHOLDERS’ EQUITY		105,419,055			96,101,929
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	134,337,879		$	118,669,781

See the accompanying notes to condensed consolidated financial statements

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Asia Green Agriculture Corporation
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
(Stated in US Dollars)

See the accompanying notes to condensed consolidated financial statements.

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Asia Green Agriculture Corporation
Condensed Consolidated Statement of Cash Flows
For the three months ended March 31, 2012 and 2011
(Stated in US Dollars)

		Three months ended March 31,
		(Unaudited)
		2012			2011
Cash flows from operating activities
Net income	$	8,011,363		$	6,001,489
Adjustments to reconcile net income to net cash used in operating activities :-
Depreciation and amortization		329,557			298,886
Deferred taxes		82,584			159,174
Unrealized gain of foreign exchange forward contracts		(567,229	)		(192,296	)
Provision for (reversal of provision for) obsolete inventories		2,694			(6,912	)
Provision for doubtful debts		315			65,410
Share-based compensation		541,865			696,419
Changes in operating assets and liabilities :-
Trade receivables		(6,436,356	)		(4,377,511	)
Other receivables, prepayments and deposits		1,335,615			1,850,592
Inventories		(10,947,183	)		(9,354,797	)
Trade payables		5,441,558			1,966,450
Restricted cash held as collateral for foreign exchange forward contracts		274,410			(182,616	)
Receipts in advance		102,250			43,080
Other payables and accrued expenses		126,223			2,192,642
Income tax payable (recoverable)		90,101			(68,098	)
Net cash flows used in operating activities		(1,612,233	)		(908,088	)
Cash flows from investing activities
Payments to acquire and deposit for acquisition of property, plant and equipment		(1,329,405	)		(429,793	)
Proceeds from disposal of property, plant and equipment		12,257			-
Payment to acquire land use rights		(4,686,552	)		(3,351,515	)
Net cash flows used in investing activities		(6,003,700	)		(3,781,308	)
Cash flows from financing activities
Proceeds from secured borrowings		9,740,096			4,346,261
Repayments of secured borrowings		(7,349,047	)		(3,416,441	)
Decrease in restricted cash held as collateral for bills payable		476,400			264,793
Decrease in bills payable		(1,588,000	)		(882,644	)
Advances from (repayments to) related parties		182,330			(657,191	)
Net cash flows provided by (used in) financing activities		1,461,779			(345,222	)
Effect of foreign currency translation on cash and cash equivalents		118,092			58,607
Net decrease in cash and cash equivalents		(6,036,062	)		(4,976,011	)
Cash and cash equivalents - beginning of period		12,832,811			9,988,422
Cash and cash equivalents – end of period	$	6,796,749		$	5,012,411
Supplemental disclosures for cash flow information
Cash paid for :-
Interest, net of capitalized interest	$	294,716		$	106,172
Income taxes	$	76,354		$	17,383

See the accompanying notes to condensed consolidated financial statements

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Asia Green Agriculture Corporation
Notes to Condensed Consolidated Financial Statements
(Stated in US Dollars)

1.	Corporate information and general

	(i)	Asia Green Agriculture Corporation (the “Company”) was organized on May 21, 2008 as a Nevada corporation.
		Following the completion of a reverse takeover transaction (“RTO”) on August 20, 2010, the Company commenced to be engaged in the production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(ii)	Misaky Industrial Limited (“Misaky”) was incorporated in Hong Kong on December 10, 2004 as a limited liability company with authorized capital of HK$10,000, divided into 10,000 common shares of HK$1 par value each, of which 3,001 common shares were issued and paid up. Before the acquisition by Sino Oriental Agriculture Group Limited (“Sino Oriental”) as described in note 2(v), Misaky was wholly owned by Mr. Zhan Youdai (“Mr. Zhan”) through a trust agreement with Mr. Cai Yangbo, (“Mr. Cai”). The sole director of Misaky is Mr. Zhan. The principal business of Misaky is an investment holding and only holds 100% equity interest in Fujian Yada Group Co., Ltd. (“Fujian Yada”).
	(iii)	Sino Oriental Agriculture Group Limited (“Sino Oriental”) was incorporated in the British Virgin Islands (the “BVI”) on January 4, 2010 as a limited liability company with authorized, issued and paid up capital of $50,000, divided into 50,000 common shares of $1 par value each. Prior to the completion of RTO on August 20, 2010, the 50,000 common shares were held by Mr. Zhan through a trust agreement with Mr. Cai and other noncontrolling shareholders. The sole director of Sino Oriental is Mr. Zhan. The principal business of Sino Oriental is an investment holding and only holds 100% equity interest in the Misaky.
	(iv)	Fujian Yada was established in the Peoples Republic of China (the “PRC”) on February 6, 2001 as a limited liability company. The then paid up capital of Renminbi (“RMB”) 30,000,000 was held as to 97% by Mr. Zhan and 3% by Madam Liufeng Zhou, Mr. Zhan’s spouse respectively and was transferred to Misaky on May 26, 2010 as stated in Note 2(iv). On August 26, 2010, Fujian Yada increased its paid up capital to RMB118,000,000. The principal activities of Fujian Yada are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.

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	(v)	Fujian Yaxin Food Co., Ltd. (“Yaxin”) was established in the PRC on April 2, 2007 as a limited liability company. Before its acquisition by Fujian Yada as stated in Note 2(i), the paid up capital of RMB10,000,000 was wholly held by Mr. Zhan. The principal activities of Yaxin are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.
	(vi)	Fujian Shengda Import & Export Trading Co., Ltd. (“Shengda”) was established in the PRC on June 5, 2007 as a limited liability company. Before its acquisition by Fujian Yada as stated in Note 2(ii), the paid up capital of RMB5,000,000 was held as to 90% by Mr. Zhan and 10% by Madam Liufeng Zhou, Mr. Zhan’s spouse. The principal activity of Shengda is trading of the Company’s agricultural products to oversea customers.
	(vii)	Fujian Xinda Food Co., Ltd. (“Xinda”) was established in the PRC on February 5, 2005 as a limited liability company. Before its acquisition by the Company as stated in Note 2(iii), the paid up capital of RMB5,000,000 was held as to 30% by Mr. Zhan and 70% by Madam Liufeng Zhou, Mr. Zhan’s spouse. The principal activities of Xinda are production and marketing of bamboo shoots.
	(viii)	Shanghai Yada Green Food Co., Ltd. (“Shanghai Yada”) was established in the PRC on September 15, 2010 as a limited liability company with registered and paid up capital of RMB2,000,000 and is a wholly owned subsidiary of Fujian Yada. The principal activities of Shanghai Yada are trading and marketing of food products.
	(ix)	Fuzhou Yada Green Food Co., Ltd. (“Fuzhou Yada”) was established in the PRC on October 15, 2010 as a limited liability company with registered and paid up capital of RMB1,000,000 and is a wholly owned subsidiary of Fujian Yada. The principal activities of Fuzhou Yada are trading and marketing of food products.
	(x)	Shixing Yada Forestry Development Co., Ltd. (“Shixing Yada”) was established in the PRC on November 26, 2010 as a limited liability company with registered and paid up capital of RMB3,000,000 and is wholly owned subsidiary of Fujian Yada. The principal activities of Shixing Yada are production and marketing of bamboo related products.
	(xi)	Yudu Yada Forestry Co., Ltd. (“Yudu Yada”) was established in the PRC on November 10, 2010 as a limited liability company with registered and paid up capital of RMB3,000,000 and is wholly owned subsidiary of Fujian Yada. The principal activities of Yudu Yada are production and marketing of bamboo related products.
	(xii)	Jianyang Yaxin Agriculture and Forestry Development Co., Ltd. (“Jianyang Yaxin”) was established in the PRC on October 12, 2010 as a limited liability company with registered and paid up capital of RMB2,000,000 and is wholly owned subsidiary of Fujian Yaxin. The principal activities of Jianyang Yaxin are production and marketing of fresh and processed produce, including bamboos, bamboo shoots, cucumber, corn, mushrooms and other agricultural products.

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2.	Reorganization
	To rationalize the group structure, the Company, Misaky, Sino Oriental, Fujian Yada, Yaxin, Shengda and Xinda reorganized their group structure (the “Reorganization”) as follows :-

	(i)	Fujian Yada entered into two separate agreements with Mr. Zhan to acquire Mr. Zhan’s 90% and 10% equity interest in Yaxin on April 10, 2008 and October 26, 2009 respectively at cash considerations of RMB9,000,000 (equivalent to $1,320,300) and RMB1,000,000 (equivalent to $146,700) respectively, equivalent to the paid up capital of Yaxin.
	(ii)	Fujian Yada entered into two separate agreements with Mr. Zhan and his spouse, Madam Liufeng Zhou to acquire their 100% equity interest in Shengda on April 8, 2008 and October 26, 2009 respectively at cash considerations ofRMB4,500,000 (equivalent to $660,150) and RMB500,000 (equivalent to $73,350), equivalent to the paid up capital of Shengda.
	(iii)	On March 23, 2008, Fujian Yada entered into an agreement with Mr. Zhan and his spouse, Madam Liufeng Zhou to acquire their 95% equity interest of Xinda at a cash consideration of RMB475,000 (equivalent to $69,683), equivalent to the then Xinda’s 95% paid up capital of RMB500,000. On October 26, 2009, the Company acquired their remaining 5% equity interest of Xinda at a cash consideration of RMB250,000 (equivalent to $36,675), equivalent to the then Xinda’s 5% paid up capital of RMB5,000,000.
	(iv)	On April 13, 2010, Mr. Zhan and Madam Zhou Liufeng, Mr. Zhan’s spouse, entered into an agreement with Misaky, a limited liability company incorporated in Hong Kong, pursuant to which Misaky agreed to acquire their 100% equity interest in the Fujian Yada at a cash consideration of RMB31,157,000. The transaction was completed on May 26, 2010.
	(v)	On July 2, 2010, the shareholder of Misaky, Mr. Cai, entered into an agreement with Sino Oriental, pursuant to which Sino Oriental agreed to acquire 100% equity interest in Misaky at a cash consideration of HK$3,001, equivalent to the issued and paid up share capital of Misaky.
	(vi)	On August 20, 2010, the Company entered into a share exchange agreement with the shareholders of Sino Oriental to acquire their 100% of the issued and outstanding common shares in Sino Oriental by issuance of 29,214,043 shares of the Company’s common stock with par value of $0.001 each (as adjusted for a 2.5 for 1 forward stock split on January 18, 2011 (the “Forward Stock Split”)). On the same date, the Company entered into a share cancellation agreement with Yang YongJie (“Mr. Yang”), the shareholder of the Company, pursuant to which Mr. Yang agreed to surrender for cancellation of 9,738,180 shares (as adjusted for the Forward Stock Split) of the Company’s outstanding common stock. On the same date, Mr. Zhan was appointed as a director of the Company and entered into an option agreement with Mr. Cai pursuant to which Mr. Zhan has an option to purchase all the equity interest in the Company held by Mr. Cai at a consideration of $84,981,327 at any time during the two years period commencing on the 180th day following the signing day of this option agreement.

The aggregate cash consideration of $2,306,858 paid to Mr. Zhan and his spouse, Madam Liufeng Zhou stated in Notes 2 (i), (ii) and (iii) was recorded as deemed distributions of $2,050,133 in 2008 and $256,725 in 2009 in connection with these transactions. Upon the completion of Reorganization on August 20, 2010, Fujian Yada, Yaxin, Shengda and Xinda became the wholly owned subsidiaries of the Company.

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3.	Summary of significant accounting policies

Basis of consolidation and presentation

Before and immediately after the completion of the Reorganization, the Company, Misaky, Sino Oriental, Fujian Yada, Yaxin, Shengda and Xinda were under the common control of Mr. Zhan and his spouse, Madam Zhou Liufeng. Accordingly, accounting for recapitalization is adopted for the preparation of the condensed consolidated financial statements to present the combined results of operations and financial position of the Company, Misaky, Sino Oriental, Fujian Yada, Yaxin, Shengda and Xinda as if the current group structure, which means that Misaky, Sino Oriental, Fujian Yada, Yaxin, Shengda and Xinda are wholly owned subsidiaries of the Company, had been in existence at the beginning of the reporting period. The 29,214,043 shares (as adjusted for the Forward Stock Split) of the Company’s common stock issued for the RTO are deemed the opening common stock since January 1, 2009 to reflect the recapitalization.

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, 2011.

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 March 31, 2012 and December 31, 2011, 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 March 31, 2012 and December 31, 2011, 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 three months period ended March 31, 2012 and 2011, the Company did not have sales to any individual customer that represented 10% or more of the Company’s consolidated sales.

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Fair value of financial instruments

The Company follows Topic ASC 820 “Fair Value Measurements and Disclosures”. ASC 820 requires the disclosure of the estimated fair value of financial instruments including those financial instruments for which the 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.

Derivative financial instruments

The Company accounts for derivative financial instruments in accordance with the Topic ASC 815 “Derivatives and Hedging”. The topic requires the Company to recognize the value of derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated as a hedge and qualifies as part of a hedging relationship.

The Company enters into foreign currency forward exchange contracts (“foreign exchange forward contracts”) to manage its exposure to the foreign currency exchange risk related to the trade receivable denominated in Japanese Yen (“JPY”). The Company does not enter into foreign exchange forward contracts for trading or speculative purposes. In accordance with US GAAP, the foreign exchange forward contracts are considered as “derivatives not designated as hedging instruments”. Therefore, the foreign exchange forward contracts are recorded at fair value, with the gain or loss on these transactions recorded in the condensed consolidated statements of income and comprehensive income within “other (loss) income - net” in the period in which they occur. As of March 31, 2012 and December 31, 2011, the Company had outstanding foreign exchange forward contracts to sell totaling JPY518,954,640 and JPY677,000,000 respectively with maturities of less than one year.

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.

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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 2 inputs as of March 31, 2012 and December 31, 2011 :-

			Included in the following items
			of condensed consolidated			Total fair value measurement
			balance sheets			as of
						March			December
						31, 2012			31, 2011
						(Unaudited)			(Audited)
	Derivative financial assets - foreign exchange forward contracts		Other receivables, prepayments and deposits		$	56,805		$	-
	Derivative financial liabilities - foreign exchange forward contracts		Other payables and accrued expenses		$	407,944		$	909,529

			Included in the following
			items of condensed
			consolidated statements of
			income and comprehensive			Three months ended
			income			March 31,
						2012			2011
						(Unaudited)			(Unaudited)
	Realized loss recorded – foreign exchange forward contracts		Other income - net		$	(76,853	)	$	-
	Unrealized gain recorded - foreign exchange forward contracts		Other income - net			567,229			192,296
	Total gain recorded				$	490,376		$	192,296

The Company estimates 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 three months period ended March 31, 2012 and 2011.

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Recently issued accounting pronouncements

In September 2011, the FASB issued ASU 2011-08, “Intangibles - Goodwill and Other (Topic 350)”. The amendments in this update will allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under these amendments, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments include a number of events and circumstances for an entity to consider in conducting the qualitative assessment. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of this ASU update has no material impact on the Company’s condensed consolidated financial statements.

In September 2011, the FASB issued ASU 2011-09, “Compensation - Retirement Benefits - Multiemployer Plans (Subtopic 715 –80)”. The amendments in this update require additional disclosures about an employer's participation in a multiemployer plan. ASU 2011-09 is effective for annual periods for fiscal years ending after December 15, 2011, and early adoption is permitted. ASU 2011-09 should be applied retrospectively for all prior periods presented. The adoption of this ASU update has no material impact on the Company’s condensed consolidated financial statements.

In December 2011, the FASB issued ASU 2011-11, “Balance Sheet (Topic 210)”. The objective of this Update is to provide enhanced disclosures that will enable users of its financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position. This includes the effect or potential effect of rights of setoff associated with an entity’s recognized assets and recognized liabilities within the scope of this Update. The amendments require enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45. An entity is required to apply the amendments retrospectively for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU update has no material impact on the Company’s condensed consolidated financial statements.

In December 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220)”. The amendments in this Update supersede certain pending paragraphs in Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, to effectively defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early application is permitted. The adoption of this ASU update has no material impact on the Company’s condensed consolidated financial statements.

4.	Restricted cash, bills payable and trade payables
	Restricted cash as of March 31, 2012 and December 31, 2011 consisted of the following:-

			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
	Bank deposits held as collateral for foreign exchange forward contracts - Note (a)	$	1,018,724		$	1,281,999
	Bank deposits held as collateral for bills payable - Note (b)		-			471,360
		$	1,018,724		$	1,753,359

	(a)	When the Company enters into foreign exchange forward contracts with the bank, it is required to place deposits with reference to the nominal amount. These deposits will be used to settle loss on the foreign exchange forward contracts or returned to the Company at the earlier of maturity date or exercise date.
	(b)	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 30% - 40% of the bills amount at the time of issuance. These deposits will be used to settle the bills at maturity.
	(c)	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.

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5.	Trade receivables, net

Trade receivables with carrying value of $2,195,035 and $271,185 as of March 31, 2012 and December 31, 2011 were pledged as collateral under certain loan agreements (see Note 17) respectively.

An analysis of the allowance for doubtful accounts for the three months ended March 31, 2012 and 2011 is as follows:

Provision for doubtful debts of $315 and $65,410 were charged to operations during the three months ended March 31, 2012 and 2011 respectively.

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6.	Other receivables, prepayments and deposits

			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
	Prepayments*	$	4,307,654		$	5,461,498
	Deposits		1,686,327			877,673
	Receivable from disposal of land use right - Note 13		906,048			-
	Derivative financial assets - foreign exchange forward contracts - Note 3		56,805			-
	Other receivables		36,213			500,799
		$	6,993,047		$	6,839,970

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

	As of March 31, 2012 and December 31, 2011, the inventories with carrying amount of $867,359 and $617,711 were pledged as collateral under certain loan agreements (see Note 17).
	Provision for (reversal of) obsolete inventories of $2,694 and $(6,912) were charged to operations during the three months ended March 31, 2012 and 2011 respectively.
8.	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 United States federal income taxes has been made as the Company had no taxable income in this jurisdiction for the reporting period.
	BVI
	Sino Oriental is incorporated in the BVI and, under the current laws of the BVI, is not subject to income taxes.
	Hong Kong
	Misaky is incorporated in Hong Kong and subject to profit tax rate of 16.5% on the assessable profits during the year. No provision for Hong Kong profit tax has been made on Misaky as Misaky had no taxable income in this jurisdiction for the reporting period.

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8.	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 and Jiangyang Yaxin are subject to EIT at the statutory rate of 25%. In addition, 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 (previously Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”). 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 operation. 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 March 31, 2012.
9.	Net finance costs
	Details of net finance costs are summarized as follows :-

10.	Other income, net

11.	Earnings per share
	During the reporting periods, potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. 1,359,113 warrants and 3,093,258 share options (as adjusted for the Forward Stock Split) were excluded from the calculation of earnings per share for three months period ended March 31, 2012 as their dilutive effects are immaterial. Accordingly, the basic and diluted earnings per share are the same.
	The per share data reflects the reorganization of stockholders’ equity as if the Reorganization occurred as of the beginning of the first period presented and has been adjusted to reflect the Forward Stock Split effected on January 18, 2011.

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12.	Property, plant and equipment, net

(i)

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

As of March 31, 2012 and December 31, 2011, buildings and plant and machinery with carrying amount of $8,019,353 and $8,030,558 were pledged as collaterals under certain loan and bills payable arrangements, respectively (Note 17).

During the three months ended March 31, 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. During the three months ended March 31, 2011, there was no disposal of property, plant and equipment.

Capitalized interest for the three months ended March 31, 2012 and 2011 was immaterial.

(ii)

Construction in progress:-

Construction in progress is comprised primarily of capital expenditures for construction of the Company’s new offices and factories.

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13.	Land use rights

	(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. As of March 31, 2012 and December 31, 2011, land use rights with carrying amounts of $740,430 and $734,446 were pledged as collateral under certain loan arrangements (Note 17).
	(b)	The Company obtained several rights from the relevant PRC local rural village cooperatives for period ranged from 20-37 years (2011: 20-28 years) to use the land for growing and plantation purpose for producing the Company’s fresh produce.
		On August 30, 2010, Fujian Yada acquired a land use right with a period of 20 years for growing and plantation purpose from a PRC local rural village cooperative (the “Seller”) at a cost of RMB10,400,000. According to the acquisition agreement, the rights and obligations of that land use right was transferred to Fujian Yada on August 30, 2010, which means Fujian Yada is responsible for the costs of maintaining the growing bamboo and is granted a right to harvest the bamboo and bamboo shoots. In addition, the Seller is 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 6, 2012, Fujian Yada entered into a separate agreement with the Seller to i) dispose the land use right at an amount equivalent to the original acquisition cost paid; and ii) lease the land use right, with cancelable lease terms given one year notice from either party, up to August 29, 2030 from the Seller at annual rental of RMB1,040,000 which was retrospectively applied on August 30, 2010. In accordance with the terms of agreement, the consideration is satisfied by i) transferring RMB1,560,000 to rental deposits; ii) transferring RMB3,120,000 to prepayment of rental for 3 years; and iii) cash for the remaining amount of RMB5,720,000 (equivalent to $906,048 as of March 31, 2012) expected to be received by May 31, 2012.
	(c)	During the three months ended March 31, 2012 and 2011, amortization amounted to $134,389 and $163,610 respectively. The estimated amortization for each of the five succeeding years is approximately $922,000 each year.

14.	Deposits paid

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15.	Other payables and accrued expenses

			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
	Interest payable	$	95,700		$	46,490
	Withholding tax payable - Note 15(b)		-			628,480
	Pension payable - Note 15(a)		563,918			559,360
	Derivative financial liabilities - foreign exchange forward contracts - Note 3		407,944			909,529
	VAT payable		1,327,532			1,660,217
	Salaries payable		624,577			308,830
	Accrued audit fee		245,520			219,968
	Liquidated damage payable - Note 22		443,686			443,686
	Other payables		598,963			508,440
		$	4,307,840		$	5,285,000

	(a)	Pension payable represents accrued staff medical, industry injury claims, labor and unemployment insurances 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.
	(b)	On March 21, 2009, Fujian Yada declared a dividend of RMB20,000,000, of which RMB16,000,000 (equivalent to $2,347,200 as of March 21, 2009) was transferred to amounts due to related parties in accordance with a loan agreement entered into between Mr. Zhan, Madam Liufeng Zhou, Mr. Zhan’s spouse, and the Company. The remaining balance of RMB4,000,000 (equivalent to $633,600 as of March 31, 2012), representing withholding tax payable on dividend declared in accordance with PRC Tax Law, was included in other payables and accrued expenses.
		On March 19, 2012, Fujian Yada received a certificate from Songxi State Tax Bureau, that the withholding tax payable on the dividend declared was exempted. Accordingly the remaining balance of RMB4,000,000 (equivalent to $630,040 as of March 19, 2012) was transferred to amounts due to related parties during the three months ended March 31, 2012.

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16.	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.
17.	Secured borrowings

			March 31,			December 31,
			2012			2011
			(Unaudited)			(Audited)
	Secured short-term borrowings	$	11,877,019		$	9,415,291

The weighted-average interest rate on short-term borrowings as of March 31, 2012 and December 31, 2011, were 7.50% and 7.13%, respectively.

The details of the Company’s banking facilities as of March 31, 2012 were as follows:-

						Amount
			Granted			utilized			Unused
	Facilities granted: Secured bank loans	$	11,880,000		$	11,877,019		$	2,981

The secured borrowings were secured by the following:-

(i)

The Company’s assets with following carrying values :-

	(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.

As of March 31, 2012, Fujian Yada’s secured short-term borrowings of $3,801,600 were subject to compliance with certain financial covenants: to maintain a minimum current ratio of 1.0, minimum quick ratio of 0.5 and maximum debt to asset ratio of 60% at any time.

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

As of March 31, 2012, none of the above financial covenants relating to secured short-term borrowings had been breached.

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18.	Loans from third parties

	All the loans from third parties are unsecured and repayable on demand.
19.	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 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 $15,068 and $82,350 for the three months ended March 31, 2012 and 2011 respectively.
20.	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.
	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.

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21.	Make good escrow agreement
	In connection with a private placement completed on August 20, 2010, Mr. Cai, the major shareholder of the Company, entered into a make good escrow agreement (the "Escrow Arrangement") with the investors under the private placement pursuant to which he agreed to place 4,848,525 shares (as adjusted for the Forward Stock Split) of our common stock (the “Make Good Share”) owned by him in an escrow account administrated by an escrow agent. In the event of the Company failed to achieve the earnings per share targets for 2010 and 2011, the escrow agent was authorized distribute the Make Good Share to the investors on a pro rate basis for any shortfall.
	The earnings per share targets for 2010 and 2011 were determined by dividing $18,176,145 and $27,264,218, respectively, by the total number of shares of common stock outstanding (as adjusted for the Forward Stock Split) immediately following the closing of the private placement. As of December 31, 2011 and 2010, the Company achieved the earnings per share targets of 2011 and 2010.
	Since Mr. Cai is only a major stockholder, does not have a management position with the Company and the release or transfer of the Make Good Share is not contingent on the continued employment of Mr. Cai or any other management, in accordance with ASC 718-10-S99-2, the Company determined that the presumption of compensation in this Escrow Arrangement should be overcome and that no compensation charge should be recognized. The Escrow Arrangement should be recorded as an inducement to facilitate the private placement on behalf of the Company. Accordingly, the transaction was recorded as a reduction of proceeds from the private placement in an amount equal to the estimated fair value of the Make Good Share of $1,160,114 on August 20, 2010, the date of the Make Good Escrow Agreement and completion of the private placement, with corresponding credit to additional paid-in capital. The fair value of the Make Good Share was estimated, at the date of the Make Good Escrow Agreement, by reference to the estimated placing price per share of the Company’s common stock in the private placement completed on August 20, 2010 and the probability of any shortfall in earnings per share targets of 2010 and 2011 estimated by the management.
22.	Commitments and contingencies
	Capital commitment
	As of March 31, 2012, and December 31, 2011, the Company had capital commitments as follows:-

Operating lease commitment

The Company leases certain land use rights under operating leases. As of March 31, 2012 the future minimum lease payments under non-cancelable operating leases were as follows:-

Rental expense for operating leases amounted to $873,624 and $829,562 for the three months ended March 31, 2012 and 2011, respectively, have been recorded in cost of sales and inventories.

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Registration payment arrangement

On August 20, 2010, the Company completed a private placement of 4,848,525 shares (as adjusted for the Forward Stock Split) of common stock and warrants in order to purchase up to 969,717 shares (as adjusted for the Forward Stock Split) of common stock at an exercise price of $3.78 per share (as adjusted for the Forward Stock Split). In connection with the private placement, warrants to purchase up to 339,396 shares (as adjusted for the Forward Stock Split) of common stock at an exercise price of $3.78 per share (as adjusted for the Forward Stock Split) were issued to the Placement Agent.

Pursuant to the subscription agreement, the Company was required to file a registration statement (the “Registration Statement”) under the Securities Act of 1933, as amended, (i) registering for resale by the investors 4,848,525 shares (as adjustment for the Forward Stock Split) of common stock and warrants in order to purchase up to 969,717 shares (as adjustment for the Forward Stock Split) of common stock issued to the investors; and (ii) registering for resale for the Placement Agents for the warrants to purchase up to 339,396 shares (as adjustment for the Forward Stock Split) of common stock (all of the foregoing securities being collectively referred herein as the “Registrable Securities”). The Company agreed to use its best efforts to file the Registration Statement within 30 days from the closing date, dated August 20, 2010 (the “Closing Date”), (the “Registration Filing Date”) and to have the Registration Statement declared effective prior to the 150th day following the Closing Date (the “Registration Effective Date”).

In the event that (i) the Registration Statement has not been filed on or prior to the Registration Filing Date or declared effective by the SEC on or before the Registration Effective Date; and (ii) the Registrable Securities included in such Registration Statement are not saleable under Rule 144, the Company shall pay to each investor as liquidated damages, a cash payment equal to 0.5% per month of the aggregated amount invested by such investors in the private placement until the registration statement has been filed and/or declared effective, but the maximum amount of liquidated damages is capped at 6% on aggregated amount invested by such investors. In accordance with ASC 450 Contingencies”, the Company records 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. The Registration Statement was not declared effective until July 15, 2011 and the provision of liquidated damages was made in an amount of $443,686 as of March 31, 2012. Liquidated damages of $Nil and $113,354 were charged to administrative expenses for the three months ended March 31, 2012 and 2011 respectively.

23.	Share based compensation
	The Company 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 exercisable period up to 10 years were granted to the 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 are vesting on March 18, 2012 with an exercise price equal to 125% of the market price (“125% Market Price Share Options”) of the Company’s common stock on that vesting date (market price as of March 18, 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. 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.

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A summary of share option plan activity for the three months ended March 31, 2012 is presented below:

						Weighted average			Remaining			Aggregate
			Number			Exercise price per			contractual			intrinsic
			of shares			share			Term			value (1)
	Outstanding as of January 1, 2012		3,093,258		$	4.13 *
	Granted		-			-
	Exercised		-			-
	Forfeited		-			-
	Cancelled		-			-
	Outstanding as of March 31, 2012		3,093,258		$	3.88*			8.9 years		$	-
	Exercisable as of March 31, 2012		1,276,580		$	3.70			8.9 years		$	-

(1)

There was no aggregate intrinsic value as the weighted average exercise price of options of $4.13 is in excess of the estimated value of the Company’s common stock as of March 31, 2012.

* For the disclosure purpose, the exercise price of 125% Market Price Share Options as of January 1, 2012 was estimated by the management, which is consistent with the assumption on exercise price for estimation of fair value of these share options at the grant date. Since the market price is available as of March 18, 2012, the weighted average exercise price as of March 31, 2012 was adjusted based on actual exercise price accordingly.

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 $541,865 and $594,512 for the three months ended March 31, 2012 and 2011 respectively. The compensation expense was allocated to administrative expenses in the amount of $421,076 and $511,395 and selling expense in the amount of $120,789 and $83,117 for the three months ended March 31, 2012 and 2011 respectively.

As of March 31, 2012, 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.

As of March 31, 2012, there was unrecognized compensation cost of $2,166,520 related to the above non-vested share options which are expected to be recognized over approximately 3.9 years.

Warrants

On February 10, 2011, the Company issued warrants to a service provider 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. in exchange for investor relation services provided to the Company. 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 abovementioned warrants was recognized or allocated to administrative expenses for the three months ended March 31, 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.

As of March 31, 2012, there was no unrecognized compensation cost related to the above warrants.

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24.	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 months ended March 31, 2012 and 2011. Management does not track segment assets and, therefore, segment assets information is not presented.

			Fresh produce						Processed produce						Total
			Three months ended						Three months ended						Three months ended
			March 31						March 31						March 31
			(Unaudited)						(Unaudited)						(Unaudited)
			2012			2011			2012			2011			2012			2011
	Revenue from external customers	$	25,888,546		$	20,378,378		$	6,797,484		$	5,560,618		$	32,686,030		$	25,938,996
	Segment profit	$	8,947,490		$	6,687,325		$	877,982		$	1,201,444		$	9,825,472		$	7,888,769

A reconciliation is provided for unallocated amounts relating to corporate operations which is not included in the segment information.

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

	During the reporting periods, no individual customer represented 10% or more of the Company’s consolidated revenue.
25.	Related party transactions
	Apart from the transactions as disclosed in notes 15, 16, 17, 20 and 21 to the condensed consolidated financial statements, the Company had no other material transactions with its related parties during the three months ended March 31, 2012 and 2011.
26.	Subsequent events
	The Company evaluated all events or transactions that occurred after March 31, 2012 through the date the financial statements were issued and has determined that there is no material recognizable nor subsequent events or transactions which would require recognition or disclosure in the condensed consolidated financial statements.

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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 condensed 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. Bamboo shoot products accounted for approximately 48% of our revenue in 2011, while fresh vegetables and fruit accounted for approximately 29% of revenue, processed vegetables for 8% of revenue, and bamboo wood for 15% of revenue, respectively. In the three months ended March 31, 2012, bamboo shoot products accounted for approximately 81% of our revenue, while fresh vegetables and fruits accounted for approximately 14%, processed vegetables for 3%, and bamboo wood for 2%.

We have a vertically integrated operation consisting of planting, manufacturing and sales of final products. We can supply most of the fresh raw material for our products from our own land. 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 dependent in part on the size of lands we control under lease, and our processing and storage capacity. We are currently experiencing rapid growth in our business and continually seek to procure additional lands for planting. We anticipate making capital expenditures over the next nine to twenty-one months to increase our cold storage capacity, increase planting bases and processing capacity.

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 93% and 7% of our revenue in the PRC and in Japan, respectively, in 2011 and approximately 95% and 5% in the PRC and in Japan, respectively, in the first three months of 2012.

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 fourth and first quarter revenues tend to be significantly higher than our second and third quarter revenues. 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 2011 and the first three months of 2012 established a strong foundation for growth during 2012 and beyond. Our growth strategy is currently centered on the following four initiatives:

•	Expand our planting bases.
•	Further expand our domestic sales and distribution network and enter new markets.
•	Increase our processing facilities and cold storage capacity.
•	Further enhance our brand recognition.

RECENT DEVELOPMENTS

Net sales for the first three months of 2012 were $32.7 million, an increase of approximately 26% over net sales in the first three months of 2011. Net income for the first three months of 2012 was $8.0 million, an increase of approximately 33%, compared to the three months ended March 31, 2011.

Our continued growth has been the result of focus on our four core initiatives. The table below summarizes our planting bases as of December 31, 2011 and March 31, 2012.

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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 and distributors as of December 31, 2011 and March 31, 2012.

During the remainder of 2012, we plan to continue expansion of our sales network domestically. We have no immediate plans to expand our international sales presence beyond China and Japan.

We have a 6,000 metric ton cold storage facility as of March 31, 2012 for storing fresh and semi-finished products. We are adding an additional 5,500 metric ton cold storage facility in order to meet the requirements of our existing products and the anticipated need for storage as a result of our recent new product launches. As of March 31, 2012, the construction work for this additional facility is underway.

We continue to gain brand recognition in China, especially in Fujian Province. Our brand “ ” was designated a “Well Known Trademark” in China in 2011. By March 31, 2012, we had expanded our sales to approximately 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 the audited consolidated financial statements for the year ended December 31, 2011. Please refer to the audited consolidated financial statements for the year ended December 31, 2011 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. Please see Note 3 - Significant Accounting Policies” in our financial statements for a more complete discussion of the accounting policies we have identified as the most important to an understanding of 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.

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, management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally fluctuate 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 record 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.

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Based on the above assessment, we established a general guideline 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 the Company’s 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. When any significant post-delivery performance obligation exists, revenue is recognized only after such obligation is fulfilled. We evaluate the terms of the sales agreement with such customer in order to determine whether any significant post-delivery performance obligations exist. 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 product 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 subsidiary will remain unchanged for the remainder of 2012.

In 2007, China passed the New EIT Law and its implementing rules, both of which became effective on January 1, 2008. The New EIT Law significantly curtails tax incentives granted to foreign-invested enterprises under the previous law. The New 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.

Substantially all of our income may be derived from dividends we receive from our PRC operating subsidiaries. The New 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 a detailed discussion of PRC tax issues related to resident enterprise status, see "Risk Factors — Risks Associated with Doing Business in China — Under the New 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, 2011. 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.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011

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
		March 31, 2012						March 31, 2011
(Unaudited)		(As reported)						(As reported)
		In			As a			In			As a
		Thousands			Percentage			Thousands			Percentage
					of						of
					Net Sales						Net Sales
Net sales	$	32,686			100%			25,939			100%
Cost of sales		(22,861	)		(70)%			(18,050	)		(70)%
Gross profit		9,825			30%			7,889			30%
Selling and administrative expenses		(1,899	)		(6)%			(1,956	)		(7)%
Operating income		7,926			24%			5,933			23%
Government grant income		177			0%			82			0%
Other income - net		491			2%			192			1%
Net finance costs		(334	)		(1)%			(29	)		0%
Income before income taxes		8,260			25%			6,178			24%
Income taxes		(249	)		0%			(177	)		(1)%
Net income		8,011			25%			6,001			23%

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 6.2972 to $1 for the three months ended March 31, 2012 and the rate of RMB 6.5712 to $1 for the three months ended March 31, 2011.

Net Sales. Our net sales consist of revenue derived from the sale of our food products, less discounts and returns. For the three months ended March 31, 2012, our net sales were $32.7 million compared to $25.9 million for the same period last year, an increase of $6.7 million or approximately 26%. The increase was primarily due to increased demand for our products. Of such increase, approximately $4.2 million was attributable to increased sales volume of our products, while approximately $1.4 million was due to higher average selling prices of our products and approximately $1.1 million was due to the appreciation of the RMB against the US dollar.

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 March 31, 2012, our cost of sales were $22.9 million compared to $18.1 million for the same period last year, an increase of $4.8 million or approximately 27%. This increase was primarily due to higher sales volume. As a percentage of net sales, our cost of sales remained at approximately 70% for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011.

Gross Profit and Gross Margin. Our gross profit is equal to our net revenues less our cost of sales. Our gross profit was $9.8 million for the three months ended March 31, 2012 compared to $7.9 million for the same period last year, an increase of $1.9 million or approximately 25%. Gross profit as a percentage of net sales remained unchanged at approximately 30% for the three months ended March 31, 2012 and for the same period in 2011. Our gross margin remained unchanged due to a similar product mix, for the three months ended March 31, 2012 and for the same period in 2011.

Selling and Administrative Expenses. Our selling and administrative expenses decreased by $0.1 million, or approximately 3%, to $1.9 million for the three months ended March 31, 2012 from $2.0 million for the three months ended March 31, 2011.

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 amounted to $0.5 million for the three months ended March 31, 2012, similar to $0.5 million for the three months ended March 31, 2011. As a percentage of net sales, selling expenses for the three months ended March 31, 2012 were approximately 2% of net sales, similar to 2% for the three months ended March 31, 2011.

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 decreased by $0.1 million, or approximately 10%, to $1.4 million for the three months ended March 31, 2012 from $1.5 million for the three months ended March 31, 2011. The decrease is mainly attributed to a decrease in non-cash compensation expense of approximately $0.2 million arising from the grant of employee stock options and warrants to an investor relations firm. As a percentage of net sales, administrative expenses decreased to approximately 4% for the three months ended March 31, 2012 from 6% for the three months ended March 31, 2011.

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Net Finance Costs. Our net finance costs increased to approximately $0.3 million for the three months ended March 31, 2012 from approximately $29,000 for the three months ended March 31, 2011. The increase is mainly due to an increase in average bank loan balance.

Income Taxes. We had income tax expense of approximately $0.2 million for the three months ended March 31, 2012, similar to approximately $0.2 million for the three months ended March 31, 2011 primarily because we had comparable taxable income for the two periods.

Net Income. Our net income increased by $2.0 million or approximately 33%, to $8.0 million for the three months ended March 31, 2012. The main reason for the growth of our net income was due to the increase in revenues discussed above.

Liquidity and Capital Resources

As of March 31, 2012, we had cash and cash equivalents of approximately $6.8 million, compared to approximately $12.8 million as of December 31, 2011. Our accounts receivable at March 31, 2012 were $30.8 million, compared to $24.2 million at December 31, 2011. Our days’ sales outstanding decreased slightly to 86 days at March 31, 2012, from 88 days at December 31, 2011. We finished the first quarter with net working capital of $48.4 million, compared to $43.5 million at December 31, 2011.

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)

		Three months Ended						Year Ended
		March 31,						December 31,
		(Unaudited)						(Audited)
		2012			2011			2011			2010
Net cash (used in) provided by operating activities	$	(1,612	)	$	(908	)	$	24,593		$	15,409
Net cash used in investing activities		(6,004	)		(3,781	)		(24,913	)		(15,299	)
Net cash provided by (used in) financing activities		1,462			(345	)		2,899			9,043
Effect of exchange rate on cash and cash equivalents		118			58			266			414
Cash and cash equivalents at the beginning of the period		12,833			9,988			9,988			421
Cash and cash equivalents at the end of the period		6,797			5,012			12,833			9,988

Cash Flows from Operating Activities.

Net cash used in operating activities was $1.6 million for the three months ended March 31, 2012, compared to $0.9 million used in operating activities for the three months ended March 31, 2011. The change was primarily attributable to an increase in trade receivables and inventories.

Cash Flows from Investing Activities.

Net cash used in investing activities for the three months ended March 31, 2012 was $6.0 million compared to $3.8 million for the three months ended March 31, 2011. The increase of net cash used in investing activities was primarily attributable to capital expenditure for the expansion of planting bases and production facilities. During the three months ended March 31, 2012, we invested $1.3 million to acquire property, plant and equipment and made an additional $4.7 million in payments to acquire land use rights.

Cash Flows from Financing Activities.

Net cash provided by financing activities was $1.5 million in the three months ended March 31, 2012 compared to $0.3 million used in financing activities for the three months ended March 31, 2011. Net cash provided by financing activities for the three months ended March 31, 2012 was primarily attributable to borrowings under bank credit facilities.

As of March 31, 2012, the Company's banking facilities were composed of the following: (All amounts, other than percentages, in thousands of U.S. dollars)

We had the following financing arrangements as of March 31, 2012, including those with third parties:

•

Fujian Yada Group Co., Ltd and Industrial and Commercial Bank of China Limited Jianyang Sub-branch entered into a Maximum Amount Guarantee Contract on June 28, 2010 to guarantee a maximum of RMB20,000,000, or $3,044,001 for debts within the period from June 28, 2010 to June 27, 2013 owed to the Industrial and Commercial Bank of China Limited Jianyang Sub-branch by Fujian Yaxin Food Group Co., Ltd.

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•	Fujian Yaxin Food Co., Ltd. entered into a Small Business Loan Agreement on April 6, 2011 to borrow from Industrial and Commercial Bank of China Limited Jianyang Sub-branch an amount of RMB5,000,000, or $773,503 for purpose of purchasing financial resources and materials, and the annual interest rate of the loan shall be 6.941%. The term of the Small Business Loan Agreement shall be from April 6, 2011 to April 5, 2012.
•	Fujian Yaxin Food Co., Ltd. entered into a Maximum Amount Liquid Fund Loan Contract on May 5, 2011 to borrow from Jianyang City Rural Credit Cooperative Union Business Department an amount of RMB2,000,000, or $309,401 for purpose of purchasing financial resources and materials, and the monthly interest rate of the loan shall be 10.908 ‰. The term of the Agreement shall be from May 5, 2011 to May 4, 2012.
•	Fujian Yada Group Co., Ltd. entered into a RMB Fund Loan Contract on November 28, 2011 to borrow from Songxi Sub-branch of Construction Bank of Co., Ltd. an amount of RMB8,000,000, or $1,256,953 for purpose of purchasing corn, mushrooms and fresh radishes. The annual interest rate of the loan is the benchmark interest rate announced by the People’s Bank of China as of the value date. The term of such RMB Fund Loan Contract is from November 28, 2011 to November 28, 2012.
•	Fujian Yada Group Co., Ltd and Songxi Sub-branch of Construction Bank of Co., Ltd. entered into a Maximum Amount Mortgage Contract on November 28, 2011 to provide a mortgage of land use rights for a maximum amount of RMB13,860,000, or $1,256,953 for debts within the period from 2011 to 2014 owed to the Songxi Sub-branch of Construction Bank of Co., Ltd. by Fujian Yada Group Co., Ltd.
•	Fujian Yaxin Food Co., Ltd. entered into a Domestic Factoring Contract on February 1, 2012 to borrow from Jianyang Branch of Industrial and Commercial Bank of China Limited an amount of RMB3,000,000, or $475,202 for purpose of purchasing raw materials. The annual interest rate of the loan is the benchmark interest rate announced by the People’s Bank of China as of the issuing date raised by 5%. The term of such Domestic Factoring Contract is from February 1, 2012 to the date when Fujian Yaxin Food Co., Ltd. fulfills the obligations under the Domestic Factoring Contract.
•	Fujian Yaxin Food Co., Ltd. entered into a Comprehensive Credit Agreement to borrow from Fuzhou Branch of China Everbright Bank Co., Ltd. a maximum amount of RMB17,000,000, or $2,692,813 within the period from February 1, 2012 to January 31, 2013.
•	Fujian Yada Group Co., Ltd. and Fuzhou Branch of China Everbright Bank Co., Ltd. entered into a Maximum Amount Guarantee Contract on February 1, 2012 to guarantee a maximum amount of RMB17,000,000, or $2,692,813 for debts owned to the Fuzhou Branch of China Everbright Bank Co., Ltd. from February 1, 2012 to the expiration of each debt issued pursuant to the Comprehensive Credit Agreement.
•	Zhan Youdai and Fuzhou Branch of China Everbright Bank Co., Ltd. entered into a Maximum Amount Guarantee Contract (Natural Person Guarantee) on February 1, 2012 to guarantee a maximum amount of RMB17,000,000, or $2,692,813 for debts owned to Fuzhou Branch of China Everbright Bank Co., Ltd. from February 1, 2012 to the expiration of each debt issued pursuant to the Comprehensive Credit Agreement.
•	Fujian Yaxin Food Co., Ltd. entered into a Fluid Capital Loan Agreement to borrow from Fuzhou Branch of China Everbright Bank Co., Ltd. an amount of RMB7,000,000, or $1,108,805 for purpose of purchasing organic bamboos. The annual interest rate is 8.528%. The term of such Fluid Capital Loan Agreement is from February 7, 2012 to February 6, 2013.
•	Fujian Yada Group Co., Ltd. entered into a RMB Fluid Capital Loan Agreement to borrow from Songxi Sub-branch of Construction Bank of China Co., Ltd. an amount of RMB4,500,000, or $712,804 for purpose of operation turnover. The annual interest rate is the interest of the value date raised by 15%. The term of the RMB Fluid Capital Loan Agreement is from February 14, 2012 to February 14, 2013.
•	Zhan Youdai, Zhou Liufeng and Songxi Sub-branch of Construction Bank of China Co., Ltd. entered into a Guarantee Contract (Natural Person Guarantee) on February 14, 2012 to secure an amount of RMB4,500,000, or $712,804 owned to Songxi Sub-branch of Construction Bank of China Co., Ltd. from February 14, 2012 to February 14, 2013.
•	Fujian Yada Group Co., Ltd. and Songxi Sub-branch of Construction Bank of China Co., Ltd. entered into a Maximum Amount Mortgage Guarantee Contract on February 22, 2012 to guarantee a maximum amount of RMB14,190,000, or $1,425,607 for debts owned to the Songxi Sub-branch of Construction Bank of China Co., Ltd. from February 22, 2012 to February 22, 2015.

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•	Fujian Yada Group Co., Ltd. entered into a Mortgage Loan Agreement to borrow from Songxi Rural Credit Cooperative Union Business Department an amount of RMB9,000,000, or $1,821,609 for purpose of purchasing fresh and agricultural products. The monthly interest rate is 0.864%. The term of such Mortgage Loan Agreement is from February 22, 2012 to August 15, 2012.
•	Fujian Yada Group Co., Ltd. entered into a RMB Fluid Capital Loan Agreement to borrow from Songxi Sub-branch of Construction Bank of China Co., Ltd. an amount of RMB11,500,000, or $1,821,609 for purpose of operation turnover. The annual interest rate is the interest rate of the value date raised by 17%. The term of the RMB Fluid Capital Loan Agreement is from February 22, 2012 to February 22, 2013.
•	Zhan Youdai, Zhou Liufeng and Songxi Sub-branch of Construction Bank of China Co., Ltd. entered into a Guarantee Contract (Natural Person Guarantee) on February 22, 2012 to secure a loan at the amount of RMB11,500,000, or $1,821,609 borrowed from Songxi Sub-branch of Construction Bank of China Co., Ltd. The guarantee period is from February 22, 2012 to February 22, 2013.

The following table summarizes key elements of the Company’s outstanding financing arrangements:

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Solely for the convenience of the reader, the above amounts were converted from RMB to U.S. dollars at specified rates, as follows: for any contract entered into during the first quarter of 2012, the conversion rate was 6.3131 RMB to $1; for any contract entered into during the fourth quarter of 2011, the conversion rate was 6.3646 RMB to $1; for any contract entered into in the third quarter of 2011, the conversion rate was 6.3898 RMB to $1; for any contract entered into in the second quarter of 2011, the conversion rate was 6.4641 RMB to $1; for any contract entered into in the first quarter of 2011, the conversion rate was 6.5703 RMB to $1; for any contract entered into in 2010, the conversion rate was 6.6120 RMB to $1; and for any contract entered into in 2009, the conversion rate was 6.6762 RMB to $1.

Many of the financing agreements contain covenants prohibiting us from borrowing “substantial” amounts of money, or leasing or subsequently pledging already pledged assets, without the prior consent of each relevant lender. In addition, we are prohibited from selling a “significant” amount of its assets without prior consent from each relevant lender. The terms “significant” and “substantial” are not defined in the relevant contracts. In assessing our compliance with the financing agreements we have determined that a value exceeding approximately 10% of our total assets, or about $13.5 million as of March 31, 2012, would be significant or substantial and would trigger a requirement to obtain the prior consent of various lenders. However, the lenders may have a different interpretation of the limitation on our ability to borrow money or sell assets, and it may be lower than our understanding of the provisions of the loan agreements. If we were to inadvertently sell assets or borrow money with a value in excess of what our lenders believe is permissible without their consent, they could pursue breach of contract and other claims against us, which could harm our business and reputation.

Contingent Liabilities

We have made a provision of approximately $564,000 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 $2,211,000. 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, 2011. 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 $6.0 million for the three months ended March 31, 2012. Our capital expenditures were used to acquire property, plant and equipment ($1.3 million) and land use rights ($4.7 million). We currently estimate that our capital expenditures in fiscal year 2012 will be approximately $15 million, which we intend to use primarily for expansion of bamboo forests, constructing additional cold storage, processing facilities and staff quarters.

Capital Resources

At March 31, 2012, we have only minimal unused credit facility that was available to us.

We believe that our cash on hand and cash flow from operations will meet our expected capital expenditures and working capital requirements for at least the next 12 months. However, 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, 2011. 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. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information is: (1) gathered and communicated to our management, including our principal executive and financial officers, on a timely basis; and (2) recorded, processed, summarized, reported and filed with the SEC as required under the Securities Exchange Act of 1934, as amended.

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2012.

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, we may be involved in litigation relating to claims arising out of our operations in the normal course of business, including claims of alleged infringement, misuse or misappropriation of intellectual property rights of third parties. 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, 2011 filed with the SEC on March 30, 2012, 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: May 15, 2012	/s/ TSANG YIN CHIU STANLEY
	Tsang Yin Chiu Stanley, Chief Financial Officer
	(Principal Accounting Officer)

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Exhibit
No.	Document Description	Incorporation by Reference
10.1	English Translation of the RMB Fluid Capital Loan Contract dated February 14, 2012 by and between Fujian Yada Group Co., Ltd. and Songxi Sub-branch of Construction Bank of China Co., Ltd.	Filed herewith.
10.2	English Translation of the Natural Person Guarantee Contract dated February 14, 2012 by and among Mr. Zhan Youdai, Ms. Zhou Liufeng and Songxi Sub-branch of Construction Bank of China Co., Ltd.	Filed herewith.
10.3	English Translation of the RMB Fluid Capital Loan Contract dated February 22, 2012 by and between Fujian Yada Group Group Co., Ltd. and Songxi Sub-branch of Construction Bank of China Co., Ltd.	Filed herewith.
10.4	English Translation of the Guarantee Contract (Natural Person Guarantee) dated February 14, 2012 by and among Mr. Zhan Youdai, Ms. Zhou Liufeng and Songxi Sub-branch of Construction Bank of China Co., Ltd.	Filed herewith.
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.	Filed herewith.

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