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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2013 shares
Document and Entity Information
Entity Registrant Name	CHINA NEW BORUN Corp
Entity Central Index Key	0001490366
Document Type	20-F
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	25,725,000
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)
Current assets
Cash (note 2)	$ 85,497,679	¥ 521,270,799	¥ 610,692,645
Restricted cash (2012: note 14 (i), (ii); 2013: note 14 (vi), (vii))	6,895,417	42,040,667	75,000,000
Available-for-sale securities (note 4)	2,752,853	16,783,869
Trade accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB nil, as of December 31, 2012 and 2013, respectively (note 5)	58,794,382	358,463,468	302,779,899
Inventories (note 6)	57,932,084	353,206,120	138,280,880
Advance to suppliers (note 7)	45,309,097	276,245,034	67,828,505
Other receivables (note 8)	9,596,707	58,510,165	34,880,868
Prepaid expenses	619,000	3,773,980	6,039,816
Deferred income tax assets (note 17)	40,793	248,712
Total current assets	267,438,012	1,630,542,814	1,235,502,613
Property, plant and equipment, net (note 9)	187,590,846	1,143,722,628	1,047,934,015
Land use rights, net (note 10)	22,789,328	138,944,251	56,432,887
Intangible assets, net (note 11)	1,582,570	9,648,771	13,475,014
Long-term deferred expenses (note 15)	1,754,615	10,697,712
Other non-current assets (note 12)			89,648,135
Total assets	481,155,371	2,933,556,176	2,442,992,664
Current liabilities
Trade accounts payable	4,801,166	29,272,232	12,605,132
Accrued expenses and other payables (note 13)	17,480,045	106,574,084	63,942,736
Income taxes payable	1,495,720	9,119,258	6,661,771
Short-term borrowings (note 14)	101,723,827	620,200,000	842,200,000
Current portion of long-term borrowings (note 14)	3,936,427	24,000,000
Total current liabilities	129,437,185	789,165,574	925,409,639
Long-term borrowings (note 14)	7,872,853	48,000,000
Bonds payable (note 15)	82,008,890	500,000,000
Total liabilities	219,318,928	1,337,165,574	925,409,639
Commitments and contingencies (note 18)
Shareholders' equity
Ordinary share-par value of RMB 0.0068259; 25,725,000 shares authorized, issued and outstanding as of December 31, 2012 and 2013, respectively	25,725	175,596	175,596
Additional paid-in capital	76,782,002	468,132,187	468,132,187
Retained earnings-appropriated (note 2)	20,724,635	126,356,029	118,401,996
Retained earnings-unappropriated	164,496,931	1,002,921,340	931,347,064
Accumulated other comprehensive loss	(192,850)	(1,194,550)	(473,818)
Total shareholders' equity	261,836,443	1,596,390,602	1,517,583,025
Total liabilities and shareholders' equity	$ 481,155,371	¥ 2,933,556,176	¥ 2,442,992,664

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Dec. 31, 2013 USD ($) shares	Dec. 31, 2013 CNY (¥) ¥ / shares shares	Dec. 31, 2012 CNY (¥) ¥ / shares shares
CONSOLIDATED BALANCE SHEETS
Trade accounts receivable, allowance for doubtful accounts	$ 0	¥ 0	¥ 0
Ordinary share, par value (in CNY per share) \| ¥ / shares		¥ 0.0068259	¥ 0.0068259
Ordinary share, shares authorized	25,725,000	25,725,000	25,725,000
Ordinary share, shares issued	25,725,000	25,725,000	25,725,000
Ordinary share, shares outstanding	25,725,000	25,725,000	25,725,000

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME	12 Months Ended
	Dec. 31, 2013 USD ($) $ / shares shares	Dec. 31, 2013 CNY (¥) ¥ / shares shares	Dec. 31, 2012 CNY (¥) ¥ / shares shares	Dec. 31, 2011 CNY (¥) ¥ / shares shares
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Revenues	$ 369,855,197	¥ 2,254,970,152	¥ 2,587,441,751	¥ 2,685,223,409
Cost of goods sold	329,549,363	2,009,229,511	2,240,600,096	2,175,060,342
Gross profit	40,305,834	245,740,641	346,841,655	510,163,067
Operating expenses:
Selling	846,398	5,160,405	4,566,943	5,281,112
General and administrative	6,830,604	41,645,512	49,845,321	53,779,944
Total operating expenses	7,677,002	46,805,917	54,412,264	59,061,056
Income from operations	32,628,832	198,934,724	292,429,391	451,102,011
Other (income) expenses:
Interest income	(631,513)	(3,850,272)	(1,364,810)	(1,169,183)
Interest expense	14,951,694	91,158,982	42,767,789	34,114,359
Amortized issuance cost of bonds (note 15)	728,614	4,442,288
Others, net	82,892	505,384	157,807	(32,319)
Total other expense, net	15,131,687	92,256,382	41,560,786	32,912,857
Income before income tax expenses	17,497,145	106,678,342	250,868,605	418,189,154
Income tax expenses (note 17)
Current	4,453,088	27,150,033	62,717,151	105,194,680
Deferred	0	0	0	0
Income tax expenses	4,453,088	27,150,033	62,717,151	105,194,680
Net income attributable to ordinary shareholders	13,044,057	79,528,309	188,151,454	312,994,474
Other comprehensive loss, net of tax:
Unrealized holding loss for available-for-sale securities, net of tax effects of RMB nil, RMB nil and RMB248,712 ($40,793) for the years ended December 31, 2011, 2012 and 2013, respectively (note 4)	(122,380)	(746,137)	0	0
Foreign currency translation adjustment	4,166	25,405	(100)	(90,730)
Other comprehensive loss	(118,214)	(720,732)	(100)	(90,730)
Total comprehensive income attributable to ordinary shareholders	$ 12,925,843	¥ 78,807,577	¥ 188,151,354	¥ 312,903,744
Earnings per share (note 2):
Basic and Diluted (in CNY or dollars per share) \| (per share)	$ 0.51	¥ 3.09	¥ 7.31	¥ 12.17
Weighted average ordinary shares outstanding (note 2):
Basic and diluted (in shares)	25,725,000	25,725,000	25,725,000	25,725,000

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical)	12 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)	Dec. 31, 2011 CNY (¥)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Unrealized holding loss for available-for-sale securities, tax effects	$ 40,793	¥ 248,712	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY	USD ($) shares	CNY (¥) shares	Ordinary Share USD ($) shares	Ordinary Share CNY (¥) shares	Additional Paid-in Capital USD ($)	Additional Paid-in Capital CNY (¥)	Retained Earnings-Appropriated USD ($)	Retained Earnings-Appropriated CNY (¥)	Retained Earnings-Unappropriated USD ($)	Retained Earnings-Unappropriated CNY (¥)	Accumulated Other Comprehensive Loss USD ($)	Accumulated Other Comprehensive Loss CNY (¥)
Beginning Balance at Dec. 31, 2010		¥ 1,016,527,927		¥ 175,596		¥ 468,132,187		¥ 67,794,324		¥ 480,808,808		¥ (382,988)
Beginning Balance (in shares) at Dec. 31, 2010 \| shares			25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income		312,994,474								312,994,474
Transfer to statutory reserves		31,792,528						31,792,528		(31,792,528)
Foreign currency translation adjustment		(90,730)										(90,730)
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,793)		0
Ending Balance at Dec. 31, 2011		1,329,431,671		¥ 175,596		468,132,187		99,586,852		762,010,754		(473,718)
Ending Balance (in shares) at Dec. 31, 2011 \| shares			25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income		188,151,454								188,151,454
Transfer to statutory reserves		18,815,144						18,815,144		(18,815,144)
Foreign currency translation adjustment		(100)										(100)
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,793)		0
Ending Balance at Dec. 31, 2012		¥ 1,517,583,025		¥ 175,596		468,132,187		118,401,996		931,347,064		(473,818)
Ending Balance (in shares) at Dec. 31, 2012 \| shares	25,725,000	25,725,000	25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income	$ 13,044,057	¥ 79,528,309								79,528,309
Transfer to statutory reserves	1,304,603	7,954,033						7,954,033		(7,954,033)
Foreign currency translation adjustment	4,166	25,405										25,405
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,793)	(122,380)	(746,137)										(746,137)
Ending Balance at Dec. 31, 2013	$ 261,836,443	¥ 1,596,390,602	$ 25,725	¥ 175,596	$ 76,782,002	¥ 468,132,187	$ 20,724,635	¥ 126,356,029	$ 164,496,931	¥ 1,002,921,340	$ (192,850)	¥ (1,194,550)
Ending Balance (in shares) at Dec. 31, 2013 \| shares	25,725,000	25,725,000	25,725,000	25,725,000

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical)	12 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)	Dec. 31, 2011 CNY (¥)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Unrealized holding loss for available-for-sale securities, tax effects	$ 40,793	¥ 248,712	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS	Dec. 31, 2013 USD ($)	Dec. 31, 2013 CNY (¥)	Dec. 31, 2012 CNY (¥)	Dec. 31, 2011 CNY (¥)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Net income	$ 13,044,057	¥ 79,528,309	¥ 188,151,454	¥ 312,994,474
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	16,873,136	102,873,823	97,416,071	83,808,331
Amortization expense	885,236	5,397,193	4,976,783	4,976,783
Amortized issuance cost of bonds	728,614	4,442,288
Changes in operating assets and liabilities:
Trade accounts receivable	(9,133,095)	(55,683,569)	(2,756,551)	(171,542,845)
Inventories	(35,251,561)	(214,925,240)	(52,075,060)	10,736,967
Prepaid expenses and other current assets	(36,784,724)	(224,272,782)	51,633,164	(79,050,747)
Trade accounts payable	2,733,701	16,667,100	(594,986)	(16,022,516)
Accrued expenses and other payables	5,351,996	32,630,587	7,836,558	14,672,516
Income tax payable	403,072	2,457,487	(27,814,007)	14,767,904
Net cash provided by/(used in) operating activities	(41,149,568)	(250,884,804)	266,773,426	175,340,867
Cash flows from investing activities:
Restricted bank deposits	5,405,916	32,959,333	(75,000,000)
Purchases of property, plant and equipment	(31,847,149)	(194,168,883)	(48,808,296)	(303,083,944)
Payments of land use rights			(89,648,135)
Refund from excess payments of land use rights	912,894	5,565,821
Purchases of available-for-sale securities	(2,916,026)	(17,778,718)
Net cash used in investing activities	(28,444,365)	(173,422,447)	(213,456,431)	(303,083,944)
Cash flows from financing activities:
Proceeds from borrowings	149,453,001	911,200,000	1,009,700,000	525,700,000
Repayments of borrowings	(174,055,668)	(1,061,200,000)	(676,200,000)	(515,000,000)
Proceeds from the issuance of bonds, net of issuance costs paid	79,525,661	484,860,000
Net cash provided by financing activities	54,922,994	334,860,000	333,500,000	10,700,000
Effect of foreign currency exchange translation	4,166	25,405	(100)	(65,787)
Net increase (decrease) in cash	(14,666,773)	(89,421,846)	386,816,895	(117,108,864)
Cash-beginning of year	100,164,452	610,692,645	223,875,750	340,984,614
Cash-end of year	85,497,679	521,270,799	610,692,645	223,875,750
Supplemental disclosure of cash flow information:
Income taxes	4,050,017	24,692,546	90,531,158	90,426,776
Interest	8,420,164	51,336,899	42,767,789	34,114,359
Non-cash investing activities:
Accrued fixed asset purchases	$ 1,836,224	¥ 11,195,275	¥ 6,800,347	¥ 37,639,864

Description of Business	12 Months Ended
Description of Business	Dec. 31, 2013
Description of Business
Description of Business	1. Description of Business The accompanying consolidated financial statements include the financial statements of China New Borun Corporation (“New Borun”), Golden Direction Limited (“Golden Direction”), China High Enterprises Limited (“China High”), Weifang Great Chemical, Inc. (“WGC”), Shandong Borun Industrial Co., Ltd. (“Shandong Borun”) and Daqing Borun Biotechnology Co., Ltd (“Daqing Borun”). New Borun, Golden Direction, China High, WGC, Shandong Borun and Daqing Borun are collectively referred to as the “Company”. New Borun, the holding company, was incorporated in Cayman Islands on December 21, 2009. Golden Direction was incorporated in the British Virgin Islands on March 28, 2008. Effective as of March 31, 2010, New Borun consummated a share exchange agreement with Golden Direction whereby New Borun acquired 100% of the voting capital stock of Golden Direction. As of the date of that agreement, (1) Golden Direction became a wholly owned subsidiary of New Borun and (2) Golden Direction held approximately 74.24% of the voting capital stock of China High Enterprises Limited, or China High, our Hong Kong holding company. Effective as of March 31, 2010, New Borun and Golden Direction consummated a share exchange agreement whereby New Borun through Golden Direction acquired the remaining 25.76% equity interest of China High. China High was incorporated in Hong Kong’s Special Administrative Region on July 15, 2008. WGC was established as a limited liability company on March 21, 2001 in China’s Shandong Province under the laws of the People’s Republic of China (“PRC”). For restructuring and reorganization purposes, pursuant to an equity interest acquisition agreement, China High acquired all of the equity interests of WGC on September 30, 2008. In December 2008, China High through WGC acquired a 100% equity interest in Shandong Borun, the operating company. Shandong Borun was the predecessor of the Company and operated all of the business of the Company prior to a restructuring in 2008 (the “Restructuring”). Shandong Borun was set up in the city of Shouguang in China’s Shandong Province by Mr. Jinmiao Wang (“Mr. Wang”) and his family members (collectively the “Wang Family”) on December 1, 2000. The establishment of China High and the acquisition of Shandong Borun through WGC has been accounted for as a recapitalization or reorganization of Shandong Borun since the stockholders consisted of the same majority shareholders (no change in control) and there was no change in management immediately following the completion of the transaction in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805-50-15-6, “Business Combinations”. On July 9, 2008, Shandong Borun acquired all of the equity interests in Daqing Borun, a company formerly called Daqing Anxin Tongwei Alcohol Manufacturing Co., Ltd. (Anxin Tongwei), a limited liability company established under the laws of the PRC on September 20, 2004 in Daqing city, Heilongjiang Province, China. The total purchase price of RMB139,000,000 was allocated based on the estimated fair values of the assets acquired and liabilities assumed at the date of purchase in accordance with FASB ASC Topic 805, “Business Combinations”. Anxin Tongwei began production of edible alcohol in 2005; however, due to operation and financing problems, Anxin Togwei ceased production and applied for bankruptcy on July 26, 2007. On July 1, 2008, the Court made the verdict to approve that certain Acquisition Agreement between Shandong Borun and Anxin Tongwei on June 26, 2008, and on July 9, 2008 the parties completed the acquisition pursuant to which Anxin Tongwei became a wholly owned subsidiary of Shandong Borun. As of the acquisition date, Anxin Tongwei had been idle for more than one year, with no management personnel or production, employees or revenue. Accordingly, under FASB ABC Topic 805, since the acquired set of assets exclude several key items (employees, processes and customers), the Company concluded that the acquired set of assets does not constitute a business and, as a result, accounted for the transaction as an asset acquisition. Subsequent to the acquisition, we spent more than a year and approximately RMB110 million in facility improvements, including improvements to machinery and equipment, in order to replace the previous owner’s “dry” method manufacturing process with our in-house developed Borun Wet Process and we also changed the name of Anxin Tongwei to Daqing Borun Biotechnology Co., Ltd. (since we regard “corn deep-processing” as a part of the biotechnology field, we named it accordingly). The establishment of New Borun on December 21, 2009 and acquisition through share exchange between New Borun, Golden Direction and China High effective as of March 31, 2010 has been accounted for as a recapitalization or reorganization since the stockholders consisted of the same majority shareholders (no change in control) and there was no change in management immediately following the completion of the transaction in accordance with the provision of FASB ASC Topic 805-50-15-6. Accordingly, the transaction is treated as a recapitalization or reorganization of China High and the assets and liabilities and the historical operations that are reflected in the financial statements are those of China High and its subsidiaries and are recorded at the historical cost basis. New Borun, Golden Direction and China High are holding companies. Financial statements and financial information presented for prior years have been retrospectively adjusted to furnish comparative information for periods during which Golden Direction, China High, WGC and Shandong Borun were under common control. On November 15, 2012, WGC merged into Shandong Borun, as a result of the merger WGC is deregistered and China High obtained 100% direct control over Shandong Borun. As WGC has no operating activities for the year ended December 31, 2011 and for the period ended November 15, 2012, the restructuring has no impact on the Company’s consolidated financial statements. By the end of third quarter of 2013, Shandong Borun has completed the construction of plants and production lines for chlorinated polyethylene (“CPE”) and foam insulation businesses. The CPE can be widely used in the application of cables & wires, flame-resistant acrylonitrile butadiene styrene thermoplastic elastomers, rubber products, magnetic rubber stripes, Polyvinyl chloride profiles, etc. The foam insulation can be formed in different shapes for various construction needs, and it offers excellent properties, such as heat insulation, anti-corrosion and oil resistance. The Company has carried out the trial production and sales of CPE and foam insulation products during the fourth quarter of 2013. The Company develops and operates its business through Shandong Borun and Daqing Borun. The Company is principally engaged in manufacture and distribution of edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in the PRC. The Company also produces Distillers Dried Grains with Solubles high-protein feed (“DDGS Feed”), liquid carbon dioxide and crude corn oil as by-products of edible alcohol production and CPE and foam insulation that are widely used in a broad range of industries.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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+ Details

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation and Presentation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the financial statements of the New Borun, Golden Direction, China High, WGC, Shandong Borun and Daqing Borun. All significant inter-company transactions and balances have been eliminated upon consolidation.

Foreign Currency Translation

The Company’s financial statements are presented in Chinese Renminbi (“RMB”), which is the Company’s reporting currency. The functional currency of the Company’s subsidiary in Hong Kong is the U.S. dollar while the functional currency of the Company’s subsidiaries in the PRC is RMB.

In accordance with FASB ASC Topic 830, “Foreign Currency Matters”, the Company translates the assets and liabilities into RMB using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from U.S.dollar into RMB are recorded in shareholders’ equity as part of accumulated other comprehensive income.

Convenience Translation into United States Dollar Amounts

The Company reports its financial statements using the RMB. The Dollar amounts disclosed in the accompanying financial statements are presented solely for the convenience of the reader, and have been converted at the rate of RMB 6.0969 to one Dollar ($), which is published by the People’s Bank of China on December 31, 2013. Such translations should not be construed as representations that the RMB amounts represent, have been, or could be, converted into, $ at that or any other rate.

Use of Estimates

The preparation and presentation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Cash

Cash includes cash on hand, and cash accounts and interest bearing savings accounts in the financial institutions.

Available-for-sale Securities

Available-for-sale securities are investments in debt securities and equity securities that have readily determinable fair values not classified as trading securities or as held-to-maturity securities. All available-for-sale securities are carried at fair value and represent securities that are available to meet liquidity and/or other needs of the Company. Gains and losses are recognized and reported separately in the consolidated statements of income and comprehensive income upon realization or when impairment of values is deemed to be other than temporary. In estimating other-than temporary impairment losses, management considers, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for anticipated recovery in fair value. Gains or losses are recognized using the specific identification method. Unrealized holding gains or losses for available-for-sale securities are excluded from the net income attributable to ordinary shareholders and reported net of taxes in the “other comprehensive loss” in the statement of income and comprehensive income, and accumulated as shareholders’ equity until realized.

Inventories

Inventories are stated at the lower of cost or market determined using the weighted average method which approximates cost and estimated net realizable value. Cost of work in progress and finished goods comprise direct material, direct production costs and an allocated portion of production overhead costs based on normal operating capacity. From November 2013, the Company initiated a “bill and hold” arrangement with the granaries whereby the Company took the possession of the corn upon purchase and storage of the corn by the granaries. Purchased corn are recognized as inventories when the significant risks and rewards of ownership are considered to be transferred to the Company upon full payment of the corn price made to the granaries and the quantity and quality of the purchased corn had been inspected and acknowledged by the Company.

Property, Plant, and Equipment

Property, plant and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Depreciation is calculated using the straight-line method (after taking into account their respective estimated residual value) over the estimated useful lives as follows.

Buildings and improvements		20 to 30 Years
Machinery		10 Years
Office equipment and furnishing		3 to 5 Years
Motor vehicles		4 to 5 Years

Maintenance and repairs are charged directly to expense as incurred, whereas improvements and renewals are generally capitalized in their respective property accounts. When an item is retired or otherwise disposed of, the cost and applicable accumulated depreciation are removed and the resulting gain or loss is recognized and reflected as a line item before income from operations.

Land Use Rights

According to the laws of the PRC, land is owned by the state or rural collective economic organizations in the PRC. Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 years.

Intangible Assets

Intangible assets include production license for use in the production and distribution of edible alcohol and is accounted for under FASB ASC Topic 350-30, “General Intangibles Other Than Goodwill”. The current production license for use in the production and distribution of edible alcohol is renewed in October 2011with an additional five years. The production license renewal is normally subject to inspection and renewed every five years with a small renewal application fee cost. Based on the Company’s historical experience in producing and distributing edible alcohol, the Company does not expect to incur significant cost to renew its production license nor does it expect any material modifications to the existing terms of the production license, or any difficulties in renewing the license. The remaining useful life of the production license is estimated as 3.7 years, starting from the date it is expected to contribute to the future cash flows of the Company to the expiration date of next renewed license. Amortization expense is calculated on a straight-line basis over the useful life of the production license which include additional five-year expected renewal period.

Impairment of Long-Lived Assets

The Company, in accordance with FASB ASC Topic 360, “Property, Plant and Equipment”, reviews for impairment of long-lived assets and certain identifiable intangibles whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability is determined by comparing projected undiscounted cash flows associated with such assets to the related carrying value.

An impairment loss would be recognized when estimated discounted future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. The Company performed impairment of long-lived assets test and no impairment losses were deemed required and as a result, the Company did not record any impairment losses for the years ended December 31, 2011, 2012 and 2013.

Value added tax

All the subsidiaries of the Company in the PRC are subject to value added tax (“VAT”) imposed by the Government of the PRC on its purchase and sales of goods, its purchase of property, plant and equipment and the freight expenses being incurred. The output VAT is charged to customers who purchase goods from the Company and debited to trade accounts receivable and credited to VAT payable — output VAT. As of December 31, 2012 and 2013, the trade accounts receivable included the output VAT charged to customers are RMB41,816,583 and RMB44,646,052 ($7,322,746), respectively. The input VAT is incurred when the Company purchases goods and property, plant and equipment from its vendors and the freight expenses being incurred. The input VAT incurred is debited to VAT recoverable or VAT payable — input VAT and credited to payables accounts or cash and cash equivalent. VAT payable is computed on a monthly basis and payable in the following month based on the difference between the amount of output VAT and input VAT as of month-end, The applicable VAT rate is ranged from 13% to 17% in general, depending on the types of products purchased and sold. If the amount of validated input VAT being aroused by purchasing goods and property, plant, equipment and the freight expenses incurred exceeds that of output VAT for sales of goods during the month, the debit VAT payable balance as of month-end will be carried forward to be creditable against future collection of output VAT in the following months, and will be reclassified as VAT recoverable under other receivables. In addition, input VAT is off-the-price and not included in the cost of inventory.

According to Cai Shui [2012] No. 38 issued by the PRC State Administration of Taxation, since July 2012, the input VAT paid for purchase of corns can only be offset against the output VAT when the required conditions are being fulfilled and validated by the PRC Taxing Authority, otherwise, the input VAT paid will be temporarily recorded as VAT recoverable under other receivables. As of December 31, 2012 and 2013, VAT recoverable consisted of input VAT paid for purchase of corn but not yet validated by the PRC Taxing Authority of RMB14,068,225 and RMB40,761,846 ($6,685,667), respectively.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC Topic 605, “Revenue Recognition”, when persuasive evidence of an arrangement exists, the price is fixed or determinable, collection is reasonably assured and delivery of products has occurred or services have been rendered. Delivery occurs upon receipt of products by the customers at the customers’ warehouse or designated destination, or at the time products are picked up by the customers at the Company’s warehouse.

Revenues presented on the consolidated statements of income and comprehensive income are net of sales taxes and surcharges.

Consumption Tax

The Company is subject to consumption tax imposed by the Government of the PRC on its sales of edible alcohol and the tax rate is 5% to the sales amount of edible alcohol. The amount of consumption tax that is netted against sales revenue for the years ended December 31, 2011, 2012 and 2013 are RMB101,796,398, RMB95,920,874 and RMB 80,054,943 ($13,130,434), respectively. As of December 31, 2012 and 2013, consumption tax payable are included in “VAT and other taxes payable” under “Accrued expenses and other payables” amounted to RMB18,206,743 and RMB 20,351,703 ($3,338,041), respectively.

Cost of Goods Sold

The Company’s cost of goods sold includes product costs, shipping and handling costs, and costs related to inventory adjustments, including write downs for excess and obsolete inventory. Product costs include raw materials, production overhead costs, amortization of production license, and depreciation of property, plant and equipment used directly or indirectly for production.

Research and Development Costs

Research and development costs are expensed as incurred. The Company did not incur any material research and development costs for the years ended December 31, 2011, 2012 and 2013.

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2011, 2012 and 2013.

Shipping and Handling Costs

The Company records all charges to customers for outbound shipping and handling as revenue. All corresponding shipping and handling costs are classified as cost of goods sold for the years ended December 31, 2011, 2012 and 2013.

Allowance for Doubtful Accounts

The Company regularly monitors and assesses the risk of not collecting amounts owed to the Company by customers. This evaluation is based upon a variety of factors including: an analysis of amounts current and past due along with relevant history and facts particular to the customer. Based upon the results of this analysis, the Company did not have an allowance for doubtful accounts for this risk.

Retirement and Other Postretirement Benefits

Full-time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts for the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of FASB ASC Topic 715, “Compensation—Retirement Benefits”.

The total amounts for such employee benefits which were expensed were RMB10,533,795, RMB9,448,608 and RMB9,194,271 ($1,508,024) for the years ended December 31, 2011, 2012 and 2013, respectively.

Income Taxes

The Company follows FASB ASC Topic 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company has adopted FASB ASC Topic 740-10-25 since January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of December 31, 2012 and 2013, the management of the Company considered that the Company had no additional liabilities for uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in the future. There are no estimated interest costs and penalties provided in the Company’s consolidated financial statements for the years ended December 31, 2011, 2012 and 2013, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority.

Comprehensive Income (Loss)

The Company presents comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income”. FASB ASC Topic 220 states that all items that are required to be recognized under accounting standards as components of comprehensive income (loss) be reported net of taxes in the consolidated statements of income and comprehensive income. The components of comprehensive income were the net income for the years, the foreign currency translation adjustments and the unrealized holding gain (loss) for available-for-sales securities.

Appropriated Retained Earnings

The income of the Company’s PRC subsidiaries is distributable to their shareholder after transfer to reserves as required by relevant PRC laws and regulations and the subsidiaries’ Articles of Association. As stipulated by the relevant laws and regulations in the PRC, these PRC subsidiaries are required to maintain reserves which are non-distributable to shareholders. Appropriations to the reserves are approved by the respective boards of directors.

Reserves include statutory surplus reserves and discretionary reserves. Statutory surplus reserves can be used to offset the accumulated losses, if any, and may be converted into capital in proportion to the existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered capital. The appropriation to the statutory surplus reserves must not be less than 10% of net profit after taxation. Such appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital. The annual appropriations of reserves of both Shandong Borun and Daqing Borun is 10% of the net income after income tax expenses. For the years ended December 31, 2011, 2012 and 2013, the Company made the transfers to this reserve fund in the amounts of RMB31,792,528, RMB18,815,144 and RMB7,954,033 ($1,304,603), respectively, separately presented as “Retained earnings—appropriated” in the balance sheets.

Dividends

The Company provides discretionary dividend payments based on the approval of the Company’s Board of Directors. The Board of Directors of the Company had not approved any dividend payment for the year ended December 31, 2011, 2012 and 2013.

Earnings Per Share

Earnings per share is calculated in accordance with FASB ASC Topic 260, “Earnings Per Share”. Basic earnings per share is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method. Diluted earnings per share also reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares.

The following table sets forth the computation of basic and diluted earnings per share for the years indicated:

	Year Ended December 31,
	2011	2012	2013	2013
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	312,994,474	188,151,454	79,528,309	13,044,057

Denominator:
Weighted average number ordinary shares outstanding—basic and diluted	25,725,000	25,725,000	25,725,000	25,725,000

Earnings per share:
Basic and diluted	12.17	7.31	3.09	0.51

Operating Risk

Concentrations of Credit Risk

Trade Accounts Receivable—Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers dispersed across diverse markets and generally short payment terms. Credit is extended based on an evaluation of the customer’s financial condition and collateral generally is not required. The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, the Company will record a specific allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. As of December 31, 2012 and 2013, there was no individual trade accounts receivable amounted over 10% of the total balance.

Revenues—Substantially all of the Company’s revenues are derived from sales of edible alcohol and its by-products, including DDGS Feed, corn germ, liquid carbon dioxide and crude corn oil in PRC. Any significant decline in market acceptance of the Company’s products or in the financial condition of our existing customers could impair our ability to operate effectively. None of the individual customers contributed over 10% of the total revenue for the year ended December 31, 2011, 2012 and 2013.

Interest Rate Risk

Borrowingsand Bonds—The Company’s significant interest-bearing financial liabilities are borrowings and bonds.

Short-term and long-term borrowings are contributed to 90% and 10% to the total borrowings, respectively, as of December 31, 2013. Short-term borrowings will be matured at various dates within the year ending December 31, 2014, which do not expose the Company to interest rate risk. The Company’s interest rate risk arises primarily from long-term borrowings and bonds. During the year ended December 31, 2013, all of the Company’s long-term borrowings issued at variable rates and were denominated in the RMB, which expose the Company to cash flow interest rate risk which is partially offset by cash held at variable rates. The Company’s bonds were issued at fixed rates and expose the Company to fair value and interest rate risk.

The interest rates profile and terms of repayment of the Company’s long-term borrowings and bonds payable at the end of the reporting period are disclosed in note 14 and note 15, respectively, to the consolidated financial statements.

Other than the above, other financial assets and liabilities do not have material interest rate risk.

Liquidity Risk

The Company’s working capital is sufficient to meet our present requirements. The Company may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. In the long-term, the Company intends to rely primarily on cash flows from operations and additional borrowings from the financial institutions in order to meet the Company’s anticipated cash needs. If the anticipated cash flow is insufficient to meet the requirements, the Company’s may also seek to issue additional equity, debt or equity-linked securities.

Country Risk

The Company has significant investments in the PRC. The operating results of the Company may be adversely affected by changes in the political and social conditions in the PRC and by changes in Chinese government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods taxation, pricing and supply of corns and coals, among other things. There can be no assurance; however, those changes in political and other conditions will not result in any adverse impact.

Recently Issued Accounting Pronouncements

In July 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-11, “Income Tax (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists”. This ASU provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward, except as follows. To the extent a net operating loss carry forward, a similar tax loss, or a tax credit carry forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company believes that its adoption of ASU 2013-11 will not have any material impact on its consolidated financial statements.

Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Investment Management Plan

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

FASB ASC Topic 820, “Fair Value Measurements”, defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 it considers assumptions that market participants would use when pricing the asset or liability.

FASB ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. FASB ASC Topic 820 establishes three levels of inputs that may be used to measure fair value:

· Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company holds. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

· Level 2—Valuation based on quoted prices in markets that are not active for which all significant inputs are observable, either directly or indirectly.

· Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company has adopted FASB ASC Topic 820 since January 1, 2008 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). FASB ASC Topic 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The Company has not adopted FASB ASC Topic 820 for nonfinancial assets and nonfinancial liabilities, as these items are not recognized at fair value on a recurring basis.

Disclosures of fair value information about financial instruments (whether or not recognized in the balance sheets), for which it is practicable to estimate that value, are required each reporting periods in addition to any financial instruments carried at fair value on a recurring basis as prescribed by FASB ASC Topic 825, “Financial Instruments”. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.

Fair value measured on a recurring basis

The Company does not have assets and liabilities measured at fair value on a recurring basis as of December 31, 2012.

The Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 only consisted of available-for-sale securities. The available-for-sale securities represent the Company’s investments in an investment management plan managed by a PRC fund house (the “Investment Management Plan”), which is a structured finance product that securitizes a diversified pool of underlying assets and liabilities for risk management purpose. There are two classes of holders in the Investment Management Plan, Class A and Class B, which are representing preferred class and common class, respectively. Class A holders enjoy the higher of capital gain and guaranteed earnings of 7% on their accumulated contribution to the Investment Management Plan at the settlement date (the “Class A’s Earnings”), and Class B holders will share the gain or loss after the distribution of the Class A’s Earnings at the settlement date (i.e., at the date of contractual maturity). The Company is the sole Class B holder of the Investment Management Plan.

The Investment Management Plan itself does not have a quoted market rate. The fair value of the Investment Management Plan was determined by estimating the fair value of its underlying net assets and liabilities, including cash and cash equivalents, investment in equity securities, investment in debt securities, other receivable and other payable. The carrying amounts of cash and cash equivalents, other receivable and other payable under the Investment Management Plan are reasonable approximates of their fair value due to the short-term maturities of these instruments and market rates of interests. Investment in equity securities under the Investment Management Plan include equity securities that are traded in an active exchange market (Level 1). The investment in debt securities under the Investment Management Plan are debt securities with their prices are not quoted in active markets or other inputs that are observable or can be corroborated by observable market data (Level 2). Their fair value were measured based on discounted cash flow methodologies that required the use of significant other observable inputs, including the coupon rates and interest rates in the market.

The following table summarized the fair value hierarchy for the underlying assets and liabilities held by Investment Management Plan as of December 31, 2013:

			Fair value measurements as of December 31, 2013 using			Fair value of
Underlying assets and liabilities held by the Investment Management Plan as of December 31, 2013—	Face value as of December 31, 2013		Quoted price in active markets for identified assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)	the Investment Management Plan as of December 31, 2013
	(RMB)		(RMB)	(RMB)	(RMB)	(RMB)

Cash and cash equivalents	11,426,863		—	—	—	11,426,863
Investment in equity securities	—		11,264,730	—	—	11,264,730
Investment in debt securities	—		—	67,100,000	—	67,100,000
Other receivable	1,525,236		—	—	—	1,525,236
Other payable	(1,164,453	)	—	—	—	(1,164,453	)
	11,787,646		11,264,730	67,100,000	—	90,152,376

($)	1,933,384		1,847,616	11,005,593	—	14,786,593

As of December 31, 2013, the fair value of the Investment Management Plan attributable to Class A holders (investors other than the Company) and sole Class B holder (the Company’s available-for-sale securities) are RMB73,368,507 ($12,033,740) and RMB16,783,869 ($2,752,853) (note 4), respectively.

Fair value measured on a non-recurring basis

The Company does not have assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2012 and 2013.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Available-for-sale Securities

12 Months Ended

Dec. 31, 2013

Available-for-sale Securities

Available-for-sale Securities

4. Available-for-sale Securities

On January 6, 2013, the Company has entered into agreement with a PRC fund house for the Investment Management Plan of RMB17,800,000 ($2,919,516), in which representing 17,800,000 units at the par value of RMB 1.00 each, with contractual maturity after one year.

	As of December 31,
	2012	2013		2013
	(RMB)	(RMB)		($)

Balance at the beginning of the year	—	—		—
Acquired at amortized cost during the year	—	17,778,718		2,916,026
Unrealized holding loss recognized in other comprehensive income during the year	—	(994,849	)	(163,173	)
Other-than-temporary impairment charged during the year	—	—		—
Balance at the end of the year	—	16,783,869		2,752,853

The fair value of available-for-sale securities as measured is discussed in Note 3. Unrealized holding loss net of tax for available-for-sale securities for the year ended December 31, 2011, 2012 and 2013 were RMB nil, RMB nil and RMB746,137 ($122,380), respectively.

The management of the Company reviews the available-for-sale securities at the end of each reporting period to assess whether they are impaired. The Company would record an other-than-temporary impairment charge to the statement of income and comprehensive income when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is significant or prolonged requires judgment. The management of the Company evaluates, among various factors, include the duration and extent to which the fair value of the available-for-sale securities is less than its cost, and the Company’s intent and ability to hold the underlying available-for-sale securities until its estimated recovery of amortized cost.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

Trade Accounts Receivable, Net

12 Months Ended

Dec. 31, 2013

Trade Accounts Receivable, Net

Trade Accounts Receivable, Net

5. Trade Accounts Receivable, Net

Trade receivable consists of receivables resulting from sales of products during the normal course of business. Trade accounts receivable at end of years presented consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Trade accounts receivable	302,779,899	358,463,468	58,794,382
Less: Allowance for doubtful accounts	—	—	—
Total trade accounts receivable, net	302,779,899	358,463,468	58,794,382

As of December 31, 2012 and 2013, no trade accounts receivables were pledged as collateral for borrowings from financial institutions.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Inventories

12 Months Ended

Dec. 31, 2013

Inventories

Inventories

6. Inventories

Inventories consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Raw materials	100,328,496	320,486,533	52,565,490
Work-in-process	4,374,403	3,574,268	586,244
Finished goods	33,577,981	29,145,319	4,780,350
Total inventories	138,280,880	353,206,120	57,932,084

The Company did not have any inventory reserve as of December 31, 2012 and 2013. As of December 31, 2012 and 2013, certain raw materials with an aggregate carrying value of RMB51,516,000 and RMB nil, respectively, were pledged as collateral for borrowings from financial institutions.

Advance to Suppliers

12 Months Ended

Dec. 31, 2013

Advance to Suppliers

Advance to Suppliers

7. Advance to Suppliers

Advances to suppliers consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	67,210,000	276,093,489	45,284,241
Others	618,505	151,545	24,856
Total advance to suppliers	67,828,505	276,245,034	45,309,097

Note (i): Advance to granaries represents corn cost paid but related materials and services have not been provided to the Company.

Other Receivables

12 Months Ended

Dec. 31, 2013

Other Receivables

Other Receivables

8. Other Receivables

Other receivables consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	14,068,225	47,504,624	7,791,603
Deposit for loan guarantee	13,500,000	7,500,000	1,230,133
Due from employees	3,292,234	—	—
Others	4,020,409	3,505,541	574,971
Total other receivables	34,880,868	58,510,165	9,596,707

Note (i): As of December 31, 2012 and 2013, VAT recoverable mainly consisted of input VAT paid for purchase of corns but not yet validated by the PRC Taxing Authority of RMB14,068,225 and RMB 40,761,846 ($6,685,667), respectively.

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment, Net.

Property, Plant and Equipment, Net

9. Property, Plant and Equipment, Net

Property, plant and equipment consisted of the following:

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Buildings and improvements	475,282,500		626,308,198		102,725,680
Machinery	836,323,374		891,911,639		146,289,367
Office equipment and furnishing	1,406,173		1,464,293		240,170
Motor vehicles	4,650,976		4,650,975		762,842
Total cost	1,317,663,023		1,524,335,105		250,018,059
Total accumulated depreciation	(277,738,654	)	(380,612,477	)	(62,427,213	)
Construction in progress	8,009,646		—		—
Total property, plant, and equipment, net	1,047,934,015		1,143,722,628		187,590,846

Certain buildings with an aggregate carrying value of RMB29,815,366 and RMB126,129,992 ($20,687,561), respectively, and certain equipment with an aggregate carrying value of RMB70,739,729 and RMB30,235,089 ($4,959,092), respectively, were pledged as collateral for borrowings from the financial institutions as of December 31, 2012 and 2013. For the years ended December 31, 2011, 2012 and 2013, the interests amounted to RMB nil, RMB nil and RMB4,752,000 ($779,412), respectively, were capitalized as borrowing cost in property, plant and equipment.

The depreciation expenses for the years ended December 31, 2011, 2012 and 2013 were RMB83,808,331, RMB97,416,071 and RMB102,873,823 ($16,873,136), respectively.

Construction in progress refers to mainly the new office buildings, production lines and other production facilities under construction.

Land Use Rights, Net

12 Months Ended

Dec. 31, 2013

Land use rights

Land use rights, net

Land Use Rights, Net

10. Land Use Rights, Net

Land use rights consisted of the following:

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Land use rights	60,630,886		144,713,200		23,735,538
Accumulated amortization	(4,197,999	)	(5,768,949	)	(946,210	)
Total land use rights, net	56,432,887		138,944,251		22,789,328

As of December 31, 2012 and 2013, certain land use rights with an aggregate carrying value of RMB3,674,935 and RMB8,294,630 ($1,360,467), respectively, were pledged as collateral for borrowings from the financial institutions.

The amortization expenses for the years ended December 31, 2011, 2012 and 2013 were RMB1,150,540, RMB1,150,540 and RMB1,570,950 ($257,664), respectively.

Future amortization of land use rights is as follows:

Years Ending December 31,		(RMB) Amount
2014		2,832,302
2015		2,832,302
2016		2,832,302
2017		2,832,302
2019		2,832,302
Thereafter		124,782,741
Total		138,944,251

Intangible Assets, Net

12 Months Ended

Dec. 31, 2013

Production license

Intangible assets, net

Intangible Assets, Net

11. Intangible Assets, Net

Intangible assets consisted of the following:

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Production license	28,779,986		28,779,986		4,720,429
Accumulated amortization	(15,304,972	)	(19,131,215	)	(3,137,859	)
Total intangible assets, net	13,475,014		9,648,771		1,582,570

The amortization expenses for the years ended December 31, 2011, 2012 and 2013 were RMB3,826,243, RMB3,826,243 and RMB3,826,243 ($627,572), respectively. No provision for impairment loss has been charged for the years ended December 31, 2011, 2012 and 2013.

Future amortization of intangible assets is as follows:

Years Ending December 31,		(RMB) Amount
2014		3,826,243
2015		3,826,243
2016		1,996,285
Total		9,648,771

Other Non-current Assets	12 Months Ended
Other Non-current Assets	Dec. 31, 2013
Other Non-current Assets
Other Non-current Assets	12. Other Non-current Assets As of December 31, 2012, other non-current assets of RMB89,648,135 represent the deposits of total contract amount of land use rights for the Company’s CPE and foam insulation plant. During the year ended December 31, 2013, the Company has obtained the legal ownership title of land use rights, the related deposit paid of RMB84,082,314 ($13,790,994) have been recognized as land use rights, the remaining RMB5,565,821($912,894) was refunded .

Accrued Expenses and Other Payables

12 Months Ended

Dec. 31, 2013

Accrued Expenses and Other Payables

Accrued Expenses and Other Payables

13. Accrued Expenses and Other Payables

Accrued expenses and other payables consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Payroll and welfare payable	17,079,846	16,708,584	2,740,505
VAT and other tax payables	32,659,507	32,284,265	5,295,193
Purchases of fixed assets payables	6,800,347	11,195,275	1,836,224
Other payables and accruals	7,403,036	6,563,877	1,076,593
Accrued bonds’ interest expenses (note 15)		39,822,083	6,531,530
Total accrued expenses and other payables	63,942,736	106,574,084	17,480,045

Borrowings

12 Months Ended

Dec. 31, 2013

Borrowings

Borrowings

14. Borrowings

Borrowings consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Short-term borrowings	842,200,000	620,200,000	101,723,827

Long-term borrowings
Current portion	—	24,000,000	3,936,427
Non-current portion	—	48,000,000	7,872,853
	842,200,000	692,200,000	113,533,107

The borrowings represent the Company’s outstanding loans from various financial institutions at end of the reporting period, and consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	150,000,000	122,000,000	20,010,169
Agricultural Bank of China (note (ii))	273,200,000	103,200,000	16,926,635
Longjiang Bank (note (iii))	94,000,000	25,000,000	4,100,444
China Construction Bank (note (iv))	150,000,000	150,000,000	24,602,667
Agricultural Development Bank of China (note (v))	175,000,000	100,000,000	16,401,778
China CITIC Bank (note (vi))	—	170,000,000	27,883,023
Bank of China (note (vii))	—	22,000,000	3,608,391
Total borrowings	842,200,000	692,200,000	113,533,107

Note (i): During the year ended December 31, 2013, the Industrial & Commercial Bank of China (the “ICBC”) granted the Company two loans of RMB140,000,000 ($22,962,489), in which RMB122,000,000 ($20,010,169) was still outstanding as of December 31, 2013:

· A short-term loan of RMB50,000,000 ($8,200,889)—The interest thereon bear a floating rate that is by the People’s Bank of China for loans with the same or similar terms on the contract date rise 15% (6.90% per annum on December 31, 2013 and adjustable quarterly following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise). As of December 31, 2013, an amount of RMB50,000,000 ($8,200,889) was outstanding, which will be fully repaid on September 9, 2014. Borrowing under the loan agreement is guaranteed by a third party company.

· A long-term loan of RMB72,000,000 ($11,809,280)—The total original loan amount was RMB90,000,000 ($14,761,600). The interest thereon bear at a floating rate that was based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the contract date rise 10% (7.04% per annum on the December 31, 2013, and adjustable yearly following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise). As of December 31, 2013, a total amount of RMB18,000,000 ($2,952,320) was repaid, and RMB72,000,000 ($11,809,280) was still outstanding, and subsequently, the Company need to repay RMB6,000,000 ($984,107) per quarter until October 12, 2016. Borrowings under the loan agreement are guaranteed by a third party company.

During the year ended December 31, 2012, the ICBC granted the Company six loans of RMB150,000,000, which are including:

· A short-term loan of RMB20,000,000—The interest thereon bear at a floating rate that is based on 120% of the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date. As of December 31, 2012, an amount of RMB20,000,000 was outstanding, which has been fully repaid on April 4, 2013. Borrowings under the loan agreement are secured by raw materials of Daqing Borun amounted to RMB38,160,000.

· Three short-term loans of RMB60,000,000—The interest thereon is calculated based on a fixed rate of 6.00% per annum. As of December 31, 2012, an amount of RMB60,000,000 was outstanding, of which RMB15,000,000 has been repaid on October 9, 2013, RMB14,000,000 has been repaid on October 19, 2013, and the remaining RMB31,000,000 has been fully repaid on October 26, 2013. All borrowings under these loan agreements are guaranteed by third party guarantors.

· Two short-term loans of RMB70,000,000—The interest thereon is calculated based on a fixed rate of 5‰ per mensem. As of December 31, 2012, an amount of RMB70,000,000 was outstanding, of which RMB60,000,000 has been repaid on May 15, 2013 and the remaining RMB10,000,000 has been fully repaid on May 18, 2013. Borrowings under the loan agreements are secured by RMB35,000,000 deposit at the bank and guaranteed by a third party company.

Note (ii): During the year ended 2013, the Agricultural Bank of China (the “ABC”) granted the Company four loans of RMB103,200,000 ($16,926,635) which are including:

· Two short-term loans of RMB43,200,000 ($7,085,568)—The interest thereon bear at a fixed rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the contract date rise 10 % (6.60% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB43,200,000 ($7,085,568) was outstanding, of which RMB23,200,000 ($3,805,212) will be fully repaid on January 15, 2014, and RMB20,000,000 ($3,280,356) will be fully repaid on February 5, 2014. All borrowings under these loan agreements are guaranteed by a third party company.

· Two short-term loans of RMB60,000,000 ($9,841,067)—The interest thereon bear at a fixed rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the contract date rise 15% (6.90% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB60,000,000 ($9,841,067) was outstanding, of which RMB40,000,000 ($6,560,711) will be fully repaid on March 4, 2014, and RMB20,000,000 ($3,280,356) will be fully repaid on September 15, 2014. All borrowings under these loan agreements are guaranteed by a third party company.

During the year ended December 31, 2012, the ABC granted the Company nine loans of RMB273,200,000, which are including:

· A short-term loan of RMB80,000,000—The interest thereon is calculated based on a fixed rate of 5‰ per mensem. As of December 31, 2012, an amount of RMB80,000,000 was outstanding, which has been fully repaid on April 28, 2013. Borrowings under the loan agreements are secured by RMB40,000,000 deposit at the bank and jointly guaranteed by a third party guarantor.

· Eight short-term loans of RMB193,200,000—The interest thereon bear at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date. As of December 31, 2012, an amount of RMB193,200,000 was outstanding, these loans has been fully repaid from March to November 2013. All borrowings under the loan agreements are guaranteed by third party guarantors.

Note (iii): During the year ended December 31, 2013, Longjiang Bank granted the Company one loan of RMB25,000,000 ($4,100,444):

· A short-term loan of RMB25,000,000 ($4,100,444)—In December 2013, the Company entered into a loan agreement with Longjiang Commercial Bank of China pursuant to which the Company may borrow up to RMB50,000,000 ($8,200,889). The Company drew down RMB15,000,000 ($2,460,266) on December 19, 2013 and RMB10,000,000 ($1,640,178) on December 23, 2013. As of December 31, 2013, the Company had RMB25,000,000 ($4,100,444) available for borrowing under such loan agreement. All amounts borrowed under the loan agreement bear at a fixed rate of 8.4% per annum, and all amounts will be repaid on December 18, 2014. Borrowings under loan agreements are guaranteed by the subsidiary Shandong Borun.

During the year ended December 31, 2012, Longjiang Bank granted the Company two loans of RMB 94,000,000, which are including:

· A short-term loan of RMB29,000,000—The interest thereon is calculated based on a fixed rate of 8.83% per annum. As of December 31, 2012, an amount of RMB29,000,000 was outstanding, which has been fully repaid on July 16, 2013. Borrowing under the loan agreement is guaranteed by a third party guarantor.

· A short-term loan of RMB65,000,000—The interest thereon is calculated based on a fixed rate of 8.4% per annum. As of December 31, 2012, an amount of RMB65,000,000 was outstanding, which has been fully repaid on November 1, 2013. Borrowing under the loan agreement is guaranteed by Shandong Borun.

Note (iv): During the year ended December 31, 2013, the China Construction Bank (the “CCB”) granted the Company three loans of RMB150, 000, 000 ($24,602,667), which are including:

· A short-term loan of RMB70,000,000 ($11,481,245)—the interest thereon is calculated based on a fixed rate of 6.0% per annum. As of December 31, 2013, an amount of RMB70,000,000 ($11,481,245) was outstanding, which will be repaid on March 6, 2014. Borrowing under the loan agreement is guaranteed by the subsidiary Shandong Borun. The loan contains the following financial covenants: At any time during the loan period, debt-to-asset ratio of Daqing Borun shall not be higher than 70%; the current ratio of Daqing Borun shall be less than 1.0; contingent liabilities of Daqing Borun shall not exceed RMB368,500,000 ($60,440,552), contingent liabilities of Daqing Borun shall not exceed 70% of its total net assets. The Company was in compliance with the above financial covenants as of December 31, 2013.

· A short-term loan of RMB30,000,000 ($4,920,533)—the interest thereon bear at a fixed rate that is based on the benchmark interest rates on the drawdown date to rise 30% (7.80% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB30,000,000 ($4,920,533) was outstanding, which will be repaid on September 16, 2014. Borrowing under the loan agreement is guaranteed by the subsidiary Shandong Borun. The loan contains the following financial covenants: At any time during the loan period, debt-to-asset ratio of Daqing Borun shall not be over 70%; the current ratio of Daqing Borun shall not less than 0.85; contingent liabilities of Daqing Borun shall not exceed RMB279,000,000 ($45,760,961); Daqing Borun’s contingent liabilities shall not exceed 50% of its net assets; and accumulated long-term investment of Daqing Borun shall not exceed 30% of its net assets. The Company was in compliance with the above financial covenants as of December 31, 2013.

· A short-term loan of RMB50,000,000 ($8,200,889)—The interest thereon bear at a fixed rate that is based on the benchmark interest rates on the drawdown date to rise 30% (7.80% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB50,000,000 ($8,200,889) was outstanding, which will be repaid on October 24, 2014. Borrowing under the loan agreement are secured by buildings and land of Daqing Borun with total carrying values of RMB98,355,916 ($16,137,532) and RMB5,741,110 ($941,644), respectively, as of December 31, 2013, and guaranteed by the Chief Executive Officer Mr. Jinmiao Wang (the “CEO”) and his three family members simultaneously. The loan contains the following financial covenants: At any time during the loan period, debt-to-asset ratio of Daqing Borun shall not be higher than 70%; the current ratio of Daqing Borun shall not less than 0.85; contingent liabilities of Daqing Borun shall not exceed RMB279,000,0000 ($45,760,961); Daqing Borun’s contingent liabilities shall not exceed 50% of its net assets; and accumulated long-term investment of Daqing Borun shall not exceed 30% of its net assets. The Company was in compliance with the above financial covenants as of December 31, 2013.

During the year ended December 31, 2012, the CCB granted the Company two loans of RMB150,000,000, which are including:

· A short-term loan of RMB70,000,000—The interest thereon bears at a fixed rate that is based on 108% of the benchmark interest rates on the drawdown date. As of December 31, 2012, an amount of RMB70,000,000 was outstanding, which has been fully repaid on March 27, 2013. Borrowing under the loan agreement is guaranteed by Shandong Borun.

· A short-term loan of RMB80,000,000—The interest thereon is calculated based on a fixed rate of 6% per annum. As of December 31, 2012, an amount of RMB80,000,000 was outstanding, which has been fully repaid on December 24, 2013. Borrowing under the loan agreement is guaranteed by Shandong Borun.

Note (v): During the year ended December 31, 2013, the Agricultural Development Bank of China (the “ADB”) granted the Company three loans of RMB100, 000, 000 ($16,401,778), which are including:

· A short-term loan of RMB50,000,000 ($8,200,889)—The interest thereon bear at a fixed rate of 6.0% per annum. As of December 31, 2013, an amount of RMB50,000,000 ($8,200,889) was outstanding, which will be repaid on November 11, 2014. Borrowing under the loan agreement is guaranteed by third party guarantor and the Company’s CEO simultaneously. Pursuant to the guarantee agreements, the Company granted 100% equity interests of Daqing Borun, and pledged its buildings and land-use rights and property, plant and equipment to the third party guarantor with total carrying values of RMB200,000,000 ($32,803,556); RMB27,774,076 ($4,555,442); RMB2,553,520 ($418,823) and RMB 8,069,012 ($1,323,461), respectively.

· A short-term loans of RMB10,000,000 ($1,640,178)—The interest thereon bear at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date (6% per annum on December 31, 2013 and adjustable immediately following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise), an amount of RMB10,000,000 ($1,640,178) was outstanding, which will be repaid on September 30, 2014. Borrowing under the loan agreement is secured by equipment of Daqing Borun with total carrying value of RMB22,166,077 ($3,635,631) and guaranteed by the Company’s CEO simultaneously.

· A short-term loan of RMB40,000,000 ($6,560,711)—In December 2013, the company entered into a loan agreement with the ADB pursuant to which the Company may borrow up to RMB190,000,000 ($31,163,378). The Company drew down RMB40,000,000 ($6,560,711) on December 2, 2013. As of December 31, 2013, the Company had RMB150,000,000 ($24,602,667) available for the borrowing under such agreement. All amounts borrowed under the loan agreement bear at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date (6% per annum on December 31, 2013 and adjustable immediately following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise), and all amounts will be repaid on September 30, 2014. Borrowings under the loan agreement are guaranteed by the Company’s CEO.

During the year ended December 31, 2012, the ADB granted the Company five loans of RMB175,000,000, which are including:

· A short-term loan of RMB10,000,000—The interest thereon is calculated based on a fixed rate of 5.6% per annum. As of December 31, 2012, an amount of RMB10,000,000 was outstanding, which has been fully repaid on January 17, 2013. Borrowing under the loan agreement is guaranteed by a third party guarantor.

· Two short-term loans of RMB120,000,000—All amounts borrowed under the loan agreement bear interest at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date (6% per annum on December 31, 2012 and adjustable quarterly following the publishing of rate adjustments by the People’s Bank of China during the term of the loan). As of December 31, 2012, an amount of RMB120,000,000 was outstanding, both of the loans have been fully repaid on September 13, 2013. Borrowing under the loan agreement are secured by equity interests of Daqing Borun and jointly guaranteed by third party guarantor and the Company’s CEO, simultaneously. Pursuant to these loan agreements, Daqing Borun granted security interests in its buildings and land-use rights and raw materials to a third party guarantor with total carrying values of RMB29,815,366, RMB3,674,935, and RMB13,356,000, respectively.

· A short-term loan of RMB10,000,000—The interest thereon bear at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date (6% per annum on December 31, 2012 and adjustable immediately following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise). As of December 31, 2012, an amount of RMB10,000,000 was outstanding, which has been fully repaid on September 19, 2013. Borrowing under the loan agreement is secured by equipment of Daqing Borun with total carrying value of RMB70,739,729 and guaranteed by the Company’s CEO.

· A short-term loan of RMB35,000,000—In December 2012, Daqing Borun entered into a loan agreement with Agricultural Development Bank of China pursuant to which Daqing Borun could borrow up to RMB 140,000,000. Daqing Borun drew down RMB10,000,000 on December 11, 2012, RMB20,000,000 on December 17, 2012 and RMB5,000,000 on December 26, 2012. All amounts borrowed under the loan agreement bear interest at a floating rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date (6% per annum on December 31, 2012 and adjustable immediately following the publishing of rate adjustments by the People’s Bank of China during the term of the loan and calculated piecewise) .Borrowing under this loan agreement is guaranteed by the Company’s CEO.

Note (vi): During the year ended December 31, 2013, China CITIC Bank granted the Company four loans of RMB170,000,000 ($27,883,023), which are including:

· A short-term loan was RMB30,000,000 ($4,920,534)—The interest thereon bear at a fixed rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date rise 30% (7.80% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB30,000,000 ($4,920,533) was outstanding, which will be fully repaid on April 27, 2014. Borrowings under loan agreement are guaranteed by Shandong Borun.

· Two short-term loans of RMB100,000,000 ($16,401,778)—The interest thereon bear at a fixed rate that is based on the prime rate published by the People’s Bank of China for loans with the same or similar terms on the drawdown date rise 25% (7.50% per annum on December 31, 2013). As of December 31, 2013, an amount of RMB100,000,000 ($16,401,778) was outstanding, of which RMB49,000,000 ($8,036,871) will be fully repaid on August 18, 2014, and RMB51,000,000 ($8,364,907) will be fully repaid on September 4, 2014. Borrowings under these loan agreements are guaranteed by the subsidary Shandong Borun and the Company’s CEO simultaneously.

· A short-term loan of RMB40,000,000 ($6,560,711)—As of December 31, 2013, an amount of RMB40,000,000 ($6,560,711) was outstanding, which will be repaid on June 16, 2014. The borrowing is secured by RMB20,040,667 ($3,287,026) deposits at the bank and guaranteed by Shandong Borun.

Note (vii): During the year ended 2013, the Bank of China granted the Company two loans of RMB22,000,000 ($3,608,391):

· Two short-term loans of RMB22,000,000 ($3,608,391)—As of December 31, 2013, an amount of RMB22,000,000 ($3,608,391) was outstanding, of which RMB5,000,000 ($820,089) will be repaid on April 24, 2014, and RMB17,000,000 ($2,788,302) will be repaid on May 13, 2014. The loans are secured by RMB22,000,000 ($3,608,391) deposit at the bank and pledged by third party fixed deposit receipt of RMB22,000,000 ($3,608,391).

The weighted average interest rates on the bank loans for the years ended December 31, 2011, 2012 and 2013 were 6.88%, 6.53% and 6.63%, respectively. The interest expenses on the bank loans incurred for the years ended December 31, 2011, 2012 and 2013 were RMB34,114,359, RMB42,767,789 and RMB51,336,899 ($8,420,164), respectively.

These facilities contain no specific renewal terms or any requirement for the maintenance of financial covenants. The Company has traditionally and successfully negotiated the renewal of certain facilities shortly before they mature.

Bonds Payable

12 Months Ended

Dec. 31, 2013

Bonds Payable

Bonds Payable

15. Bonds Payable

On January 29, 2013, the Company’s subsidiary, Shandong Borun has successfully registered its plan to issue private placement bonds with an aggregate principal amount of RMB500,000,000 ($82,008,890) with the Shanghai Stock Exchange, the PRC (the “Registered Plan”). Under the Registered Plan, Shandong Borun would initially issue a three-year fixed-rate private placement bonds with a principle amount of RMB350,000,000 ($57,406,223) on the date of registration, and thereafter, has the option to issue a second tranche of private placement bonds within six months from the date of registration with a principle amount of RMB150,000,000 ($24,602,667).

During the year ended December 31, 2013, Shandong Borun has issued the registered private placement bonds of RMB500,000,000 ($82,008,890) and was outstanding as of December 31, 2013 (the “Bonds”). The proceeds from the issuance of the Bonds were used in the purpose for the Company’s working capital and capital expenditures.

The Bonds were issued at face value of RMB100 ($16) each, bear a fixed annual interest rate of 9.3% with maturity on April 16, 2016. At the end of the second year of the life of the Bonds, Shandong Borun can decide whether to raise interest rate, and the holders of the Bonds have the right to sell back, in whole or in part, at face value. The bonds payable and its accrued interest expenses as of the end of the reporting period as follows:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Current liabilities
Accrued expenses and other payable—Accrued bonds’ interests element (note 13)	—	39,822,083	6,531,530

Non-current liabilities
Bonds payable—Outstanding principals	—	500,000,000	82,008,890

Interests of the Bonds incurred for the year ended December 31, 2011, 2012 and 2013 was RMB nil, RMB nil and RMB39,822,083 ($6,531,530), respectively, which are payable annually.

Cost associated to the issuance of the Bonds of RMB15,140,000 ($2,483,229) represented cost incurred for professional services from the sponsors and other various parties, which was recorded as “Long-term deferred expenses” in the balance sheets. The long-term deferred expenses would be amortized over the life of the Bonds. As of December 31, 2013, outstanding long-term deferred expenses were RMB10,697,712 ($1,754,615). The amortized deferred expenses for the year ended December 31, 2013 were RMB 4,442,288 ($728,614).

Future amortization of long-term deferred expenses is as follows:

Years Ending December 31,		(RMB) Amount
2014		5,134,902
2015		5,134,902
2016		427,908
Total		10,697,712

Restricted Net Assets	12 Months Ended
Restricted Net Assets	Dec. 31, 2013
Restricted Net Assets
Restricted Net Assets	16. Restricted Net Assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the statements of income and comprehensive income prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, a foreign invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A wholly owned foreign invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. Shandong Borun is a wholly-owned foreign invested enterprise and therefore are subject to the above mandated restrictions on distributable profits. Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide a statutory common reserve of at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide for discretionary surplus reserve, at the discretion of the board of directors, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. Daqing Borun was established as domestic invested enterprises and therefore are subject to the above mandated restrictions on distributable profits. As a result of these PRC laws and regulations that require annual appropriations of 10% of after-tax income to be set aside prior to payment of dividends as general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. Amounts restricted include paid-in capital, capital surplus and statutory reserves of the Company’s PRC subsidiaries as determined pursuant to the PRC accounting standards and regulations, totaling approximately RMB1,069,700,875 and RMB1,121,746,176 ($183,986,317) as of December 31, 2012 and 2013, respectively.

Income Tax Expenses

12 Months Ended

Dec. 31, 2013

Income Tax Expenses

Income Tax Expenses

17. Income Tax Expenses

New Borun incorporated in Cayman Islands and Golden Direction incorporated in the British Virgin Islands are at statutory tax rate of nil, China High was incorporated in Hong Kong Special Administrative Region is at statutory tax rate of 16.5%. Shandong Borun and Daqing Borun are PRC operating companies and are subject to PRC Enterprise Income Tax (“EIT”). Pursuant to the PRC Enterprise Income Tax Law, Enterprise Income Tax is generally imposed at a statutory rate of 25%.

Pursuant to PRC EIT, the PRC subsidiaries of China New Borun is obligated to withhold income tax on dividends paid-out to the U.S. entity, a foreign entity, and non-resident, for earnings retained after January 1, 2008. The applicable tax rate is 5% on the dividends paid-out. As the PRC subsidiaries are wholly or majority owned by the U.S. holding entity, the Company anticipates no cash dividends in the foreseeable futures, and all earnings will be used to re-invest in the PRC subsidiaries. Accordingly, no withholding income tax was accrued.

The income tax expenses consisted of taxes on income from operations plus changes in deferred taxes for the reporting periods presented:

	Year Ended December 31,
	2011	2012	2013	2013
	(RMB)	(RMB)	(RMB)	($)
Current	105,194,680	62,717,151	27,150,033	4,453,088
Deferred	—	—	—	—
Income tax expenses	105,194,680	62,717,151	27,150,033	4,453,088

The principal components of the deferred income tax assets consisted of the following:

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Non-current deferred tax assets:
Change in fair value of available-for-sale securities	—	248,712	40,793

Valuation allowances	—	—	—
Net non-current deferred income tax assets	—	248,712	40,793

The Company did not have any significant temporary differences relating to deferred tax assets or liabilities as of December 31, 2012 and 2013. The Company also did not have net accumulated operating loss and credit carry forwards as of December 31, 2012 and 2013. The Company operates through the PRC entities and the valuation allowance is considered on each individual basis.

Reconciliation between total income tax expenses and the amount computed by applying the statutory income tax rate to income before income tax expenses is for the reporting periods presented as follows:

	Year Ended December 31,
	2011		2012		2013
Statutory rate	25.00	%	25.00	%	25.00	%
Expenses not deductible	0.15	%	—		0.45	%
Effective tax rate	25.15	%	25.00	%	25.45	%

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2013
Commitments and Contingencies.
Commitments and Contingencies	18. Commitments and Contingencies *Commitments* As of December 31, 2012 and 2013, capital commitment for purchase of property, plant and equipment were RMB nil and RMB nil, respectively. The Company did not have any significant lease commitment as of December 31, 2012 and 2013. As of December 31, 2012 and 2013, purchase obligations for corn were RMB427,231,000 and RMB184,800,000 ($30,310,486), respectively. *Guarantees and Indemnities* The Company was a party to enter into contracts to indemnify third parties for certain liabilities, and as of December 31, 2012 and 2013, the Company guaranteed the third parties’ borrowings from the financial institutions amounting to RMB512,440,000 and RMB210,000,000 ($34,443,734), respectively, as a guarantor, thereinto, the Company guaranteed for the granaries for the borrowings amount to RMB412,440,000 and nil, respectively, which is under the normal course of business. In most cases, the Company cannot estimate the potential amount of future payments under these indemnities until events arise that would result in a liability under the indemnities. The Company believes that the liabilities for potential future payments of these guarantees and indemnities are not probable.

Segment Information

12 Months Ended

Dec. 31, 2013

Segment Information

Segment Information

19. Segment Information

The Company operates and manages its business as three reportable segments: “Corn-base edible alcohol and its by-products”, “CPE” and “Foam insulation”. The Company’s reportable segments are strategic business units that require different technology and marketing strategies and offer different products and services. The Company’s chief operating decision maker, the Chief Executive Officer, receives and reviews the results of the operations of each separate segment, assesses and manages their performance and makes decisions. Most of the businesses were established as a unit, and the management at the time of the establishment was retained.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.

Contributions of the major activities, profitability information and asset information of the Company’s reportable segments for the years ended December 31, 2011, 2012 and 2013 are as follows:

	Year ended December 31,
	2011			2012			2013
		Inter-			Inter-			Inter-
	Net	segment	Profit	Net	segment	Profit	Net	segment	Profit
	sales	sales	(loss)	sales	sales	(loss)	sales	sales	(loss)
	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)
Segment:
Corn-base edible alcohol and its by-products	2,685,223,409	—	418,189,154	2,587,441,751	—	250,868,605	2,249,552,806	—	107,849,762
CPE	—	—		—	—		5,004,607	—	(883,268	)
Foam insulation	—	—		—	—		412,739	—	(288,152	)
Segment total	2,685,223,409		418,189,154	2,587,441,751		250,868,605	2,254,970,152		106,678,342

Reconciliation to consolidated totals:
Sales eliminations	—	—	—	—	—	—	—	—	—
Consolidated totals:
Revenues	2,685,223,409	—		2,587,441,751	—		2,254,970,152	—
Revenues ($)							369,855,197	—

Income before income taxes			418,189,154			250,868,605			106,678,342
Income before income taxes ($)									17,497,145

	Year ended December 31,
	2011			2012			2013
	Interest Income	Interest expense	Income tax expense	Interest income	Interest expense	Income tax expense	Interest income	Interest expense	Income tax expense
	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)
Segment:
Corn-base edible alcohol and its by-products	1,169,183	34,114,359	105,194,680	1,364,810	42,767,789	62,717,151	3,850,272	91,158,982	27,150,033
CPE	—	—	—	—	—	—	—	—	—
Foam insulation	—	—	—	—	—	—	—	—	—
Consolidated total	1,169,183	34,114,359	105,194,680	1,364,810	42,767,789	62,717,151	3,850,272	91,158,982	27,150,033

Consolidated total ($)							631,513	14,951,694	4,453,088

	As of and Year ended December 31,
	2011			2012			2013
	Identifiable assets	Capital Expenditure	Depreciation and amortization	Identifiable assets	Capital expenditure	Depreciation and amortization	Identifiable assets	Capital expenditure	Depreciation and amortization
	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)	(RMB)
Segment:
Corn-base edible alcohol and its by-products	1,972,753,262	303,083,944	88,785,114	2,442,992,664	138,456,431	102,392,854	2,627,430,265	12,371,997	111,101,216
CPE	—	—	—	—	—	—	230,307,062	146,075,937	1,208,774
Foam insulation	—	—	—	—	—	—	75,818,849	30,155,128	403,314
Segment totals	1,972,753,262	303,083,944	88,785,114	2,442,992,664	138,456,431	102,392,854	2,933,556,176	188,603,062	112,713,304
Reconciliation to consolidated totals:
Elimination of receivables from intersegments	—	—	—	—	—	—	—	—	—
Consolidated totals	1,972,753,262	303,083,944	88,785,114	2,442,992,664	138,456,431	102,392,854	2,933,556,176	188,603,062	112,713,304

Consolidated totals ($)							481,155,370	30,934,255	18,486,986

As we primarily generate our revenues from customers in the PRC, and all of our sales and all of our identifiable assets are located in the PRC, no geographical segments are presented.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details

Condensed Financial Information of New Borun

12 Months Ended

Dec. 31, 2013

Condensed Financial Information of New Borun

Condensed Financial Information of New Borun

20. Condensed Financial Information of New Borun

The condensed financial statements of New Borun (the “Registrant”) have been prepared in accordance with U.S. GAAP. Under the PRC laws and regulations, the Registrant’s subsidiaries registered in the PRC are restricted in their ability to transfer certain of their net assets to the Registrant in the form of dividend payments, loans or advances. The amounts restricted include paid-in capital, capital surplus and statutory reserves, as determined pursuant to PRC generally accepted accounting principles, totaling RMB1,069,700,875 and RMB1,121,746,176 ($183,986,317) as of December 31, 2012 and 2013, respectively.

The condensed financial information of the Registrant represents as follows:

CONDENSED BALANCE SHEETS

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
ASSETS
Current assets
Cash	5,494	128	21
Amounts due from subsidiaries	244,532,160	244,532,160	40,107,622
Total current assets	244,537,654	244,532,288	40,107,643
Investments in subsidiaries	1,273,050,179	1,351,862,978	221,729,564
Total assets	1,517,587,833	1,596,395,266	261,837,207

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses and other payables	4,808	4,664	764
Total current liabilities and total liabilities	4,808	4,664	764

Total shareholders’ equity	1,517,583,025	1,596,390,602	261,836,443
Total liabilities and shareholders’ equity	1,517,587,833	1,596,395,266	261,837,207

CONDENSED STATEMENTS OF INCOME

	Year Ended December 31,
	2011		2012	2013		2013
	(RMB)		(RMB)	(RMB)		($)
Operating expenses:
General and administrative	(2,584,881	)	—	(5,188	)	(851	)
Loss from operations	(2,584,881	)	—	(5,188	)	(851	)
Other income:
Interest income	164		—	—		—
Equity in earnings of subsidiaries	315,579,191		188,151,454	79,533,497		13,044,908
Income before income tax expense	312,994,474		188,151,454	79,528,309		13,044,057
Income tax expense	—		—	—		—
Net income	312,994,474		188,151,454	79,528,309		13,044,057

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2011		2012		2013		2013
	(RMB)		(RMB)		(RMB)		($)
Net cash used in operating activities	(2,592,878	)	(18	)	(5,332	)	(875	)
Net cash provided by investing activities	—		—		—		—
Net cash provided by financing activities	—		—		—		—
Net increase (decrease) in cash	(2,592,878	)	(18	)	(5,332	)	(875	)
Cash—beginning of year	2,730,413		5,494		5,494		901
Effect of exchange rate changes on cash and cash equivalents	(132,041	)	18		(34	)	(5	)
Cash—end of year	5,494		5,494		128		21

NOTES TO CONDENSED FINANCIAL STATEMENTS

Basis of Presentation

The condensed financial information has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Registrant has used equity method to account for its investments in subsidiaries.

Investments in subsidiaries

The Registrant records its investments in its subsidiaries under the equity method of accounting as prescribed in FASB ASC Topic 323, “Investment—Equity Method and Joint Ventures”. The Registrant’s investments in subsidiaries are stated at cost plus its equity interest in undistributed earnings of subsidiaries less impairment loss, if any, since inception, and are presented on the Registrant’s balance sheets as “Investments in subsidiaries” and share of the subsidiaries’ income or loss as “Equity in earnings (loss) of subsidiaries”, on the Registrant’s statements of income and comprehensive income.

The Company’s subsidiaries did not incur any dividend to the Registrant for the years ended December 31, 2011, 2012 and 2013.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Principles of Consolidation and Presentation

Principles of Consolidation and Presentation

Foreign Currency Translation

Foreign Currency Translation

Convenience Translation into United States Dollar Amounts

Convenience Translation into United States Dollar Amounts

Use of Estimates

Use of Estimates

Cash

Cash

Cash includes cash on hand, and cash accounts and interest bearing savings accounts in the financial institutions.

Available-for-sale Securities

Available-for-sale Securities

Inventories

Inventories

Property, Plant, and Equipment

Property, Plant, and Equipment

Buildings and improvements		20 to 30 Years
Machinery		10 Years
Office equipment and furnishing		3 to 5 Years
Motor vehicles		4 to 5 Years

Land Use Rights

Land Use Rights

Intangible Assets

Intangible Assets

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Value added tax

Value added tax

Revenue Recognition

Revenue Recognition

Revenues presented on the consolidated statements of income and comprehensive income are net of sales taxes and surcharges.

Consumption Tax

Consumption Tax

Cost of Goods Sold

Cost of Goods Sold

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred. The Company did not incur any material research and development costs for the years ended December 31, 2011, 2012 and 2013.

Advertising Expenses

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2011, 2012 and 2013.

Shipping and Handling Costs

Shipping and Handling Costs

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Retirement and Other Postretirement Benefits

Retirement and Other Postretirement Benefits

The total amounts for such employee benefits which were expensed were RMB10,533,795, RMB9,448,608 and RMB9,194,271 ($1,508,024) for the years ended December 31, 2011, 2012 and 2013, respectively.

Income Taxes

Income Taxes

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Appropriated Retained Earnings

Appropriated Retained Earnings

Dividends

Dividends

Earnings Per Share

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the years indicated:

	Year Ended December 31,
	2011	2012	2013	2013
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	312,994,474	188,151,454	79,528,309	13,044,057

Denominator:
Weighted average number ordinary shares outstanding—basic and diluted	25,725,000	25,725,000	25,725,000	25,725,000

Earnings per share:
Basic and diluted	12.17	7.31	3.09	0.51

Operating Risk

Operating Risk

Concentrations of Credit Risk

Interest Rate Risk

Borrowingsand Bonds—The Company’s significant interest-bearing financial liabilities are borrowings and bonds.

Other than the above, other financial assets and liabilities do not have material interest rate risk.

Liquidity Risk

Country Risk

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Schedule of estimated useful lives for property, plant and equipment

Buildings and improvements		20 to 30 Years
Machinery		10 Years
Office equipment and furnishing		3 to 5 Years
Motor vehicles		4 to 5 Years

Schedule of computation of basic and diluted earnings per share

	Year Ended December 31,
	2011	2012	2013	2013
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	312,994,474	188,151,454	79,528,309	13,044,057

Denominator:
Weighted average number ordinary shares outstanding—basic and diluted	25,725,000	25,725,000	25,725,000	25,725,000

Earnings per share:
Basic and diluted	12.17	7.31	3.09	0.51

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Investment Management Plan

Fair Value Measurements

Summary of the fair value hierarchy for the underlying assets and liabilities held by Investment Management Plan

			Fair value measurements as of December 31, 2013 using			Fair value of
Underlying assets and liabilities held by the Investment Management Plan as of December 31, 2013—	Face value as of December 31, 2013		Quoted price in active markets for identified assets (Level 1)	Significant other observable inputs (Level 2)	Significant unobservable inputs (Level 3)	the Investment Management Plan as of December 31, 2013
	(RMB)		(RMB)	(RMB)	(RMB)	(RMB)

Cash and cash equivalents	11,426,863		—	—	—	11,426,863
Investment in equity securities	—		11,264,730	—	—	11,264,730
Investment in debt securities	—		—	67,100,000	—	67,100,000
Other receivable	1,525,236		—	—	—	1,525,236
Other payable	(1,164,453	)	—	—	—	(1,164,453	)
	11,787,646		11,264,730	67,100,000	—	90,152,376

($)	1,933,384		1,847,616	11,005,593	—	14,786,593

Available-for-sale Securities (Tables)

12 Months Ended

Dec. 31, 2013

Available-for-sale Securities

Schedule of available-for-sale securities

	As of December 31,
	2012	2013		2013
	(RMB)	(RMB)		($)

Balance at the beginning of the year	—	—		—
Acquired at amortized cost during the year	—	17,778,718		2,916,026
Unrealized holding loss recognized in other comprehensive income during the year	—	(994,849	)	(163,173	)
Other-than-temporary impairment charged during the year	—	—		—
Balance at the end of the year	—	16,783,869		2,752,853

Trade Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2013

Trade Accounts Receivable, Net

Schedule of trade accounts receivable

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Trade accounts receivable	302,779,899	358,463,468	58,794,382
Less: Allowance for doubtful accounts	—	—	—
Total trade accounts receivable, net	302,779,899	358,463,468	58,794,382

Inventories (Tables)

12 Months Ended

Dec. 31, 2013

Inventories

Schedule of inventory

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Raw materials	100,328,496	320,486,533	52,565,490
Work-in-process	4,374,403	3,574,268	586,244
Finished goods	33,577,981	29,145,319	4,780,350
Total inventories	138,280,880	353,206,120	57,932,084

Advance to Suppliers (Tables)

12 Months Ended

Dec. 31, 2013

Advance to Suppliers

Schedule of advances to suppliers

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	67,210,000	276,093,489	45,284,241
Others	618,505	151,545	24,856
Total advance to suppliers	67,828,505	276,245,034	45,309,097

Note (i): Advance to granaries represents corn cost paid but related materials and services have not been provided to the Company.

Other Receivables (Tables)

12 Months Ended

Dec. 31, 2013

Other Receivables

Schedule of other receivables

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	14,068,225	47,504,624	7,791,603
Deposit for loan guarantee	13,500,000	7,500,000	1,230,133
Due from employees	3,292,234	—	—
Others	4,020,409	3,505,541	574,971
Total other receivables	34,880,868	58,510,165	9,596,707

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment, Net.

Schedule of property, plant and equipment

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Buildings and improvements	475,282,500		626,308,198		102,725,680
Machinery	836,323,374		891,911,639		146,289,367
Office equipment and furnishing	1,406,173		1,464,293		240,170
Motor vehicles	4,650,976		4,650,975		762,842
Total cost	1,317,663,023		1,524,335,105		250,018,059
Total accumulated depreciation	(277,738,654	)	(380,612,477	)	(62,427,213	)
Construction in progress	8,009,646		—		—
Total property, plant, and equipment, net	1,047,934,015		1,143,722,628		187,590,846

Land Use Rights, Net (Tables) - Land use rights

12 Months Ended

Dec. 31, 2013

Land use rights, net

Summary of land use rights

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Land use rights	60,630,886		144,713,200		23,735,538
Accumulated amortization	(4,197,999	)	(5,768,949	)	(946,210	)
Total land use rights, net	56,432,887		138,944,251		22,789,328

Schedule of future amortization of land use rights

Years Ending December 31,		(RMB) Amount
2014		2,832,302
2015		2,832,302
2016		2,832,302
2017		2,832,302
2019		2,832,302
Thereafter		124,782,741
Total		138,944,251

Intangible Assets, Net (Tables) - Production license

12 Months Ended

Dec. 31, 2013

Intangible assets, net

Summary of intangible assets

	As of December 31,
	2012		2013		2013
	(RMB)		(RMB)		($)
Production license	28,779,986		28,779,986		4,720,429
Accumulated amortization	(15,304,972	)	(19,131,215	)	(3,137,859	)
Total intangible assets, net	13,475,014		9,648,771		1,582,570

Schedule of future amortization of intangible assets

Years Ending December 31,		(RMB) Amount
2014		3,826,243
2015		3,826,243
2016		1,996,285
Total		9,648,771

Accrued Expenses and Other Payables (Tables)

12 Months Ended

Dec. 31, 2013

Accrued Expenses and Other Payables

Summary of accrued expenses and other payables

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Payroll and welfare payable	17,079,846	16,708,584	2,740,505
VAT and other tax payables	32,659,507	32,284,265	5,295,193
Purchases of fixed assets payables	6,800,347	11,195,275	1,836,224
Other payables and accruals	7,403,036	6,563,877	1,076,593
Accrued bonds’ interest expenses (note 15)		39,822,083	6,531,530
Total accrued expenses and other payables	63,942,736	106,574,084	17,480,045

Borrowings (Tables)

12 Months Ended

Dec. 31, 2013

Borrowings

Schedule of borrowings

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Short-term borrowings	842,200,000	620,200,000	101,723,827

Long-term borrowings
Current portion	—	24,000,000	3,936,427
Non-current portion	—	48,000,000	7,872,853
	842,200,000	692,200,000	113,533,107

Schedule of borrowings from various financial institutions at end of the reporting period

	As of December 31,
	2012	2013	2013
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	150,000,000	122,000,000	20,010,169
Agricultural Bank of China (note (ii))	273,200,000	103,200,000	16,926,635
Longjiang Bank (note (iii))	94,000,000	25,000,000	4,100,444
China Construction Bank (note (iv))	150,000,000	150,000,000	24,602,667
Agricultural Development Bank of China (note (v))	175,000,000	100,000,000	16,401,778
China CITIC Bank (note (vi))	—	170,000,000	27,883,023
Bank of China (note (vii))	—	22,000,000	3,608,391
Total borrowings	842,200,000	692,200,000	113,533,107