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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2015 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, 2015
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	2015
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS	Dec. 31, 2015 USD ($)	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)
Current assets
Cash	$ 76,326,014	¥ 495,630,607	¥ 830,430,168
Restricted cash (note 14 (vi), (vii))			62,370,000
Held-to-maturity debt securities (note 5)	16,618,226	107,912,111
Trade accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB nil, as of December 31, 2014 and 2015, respectively (note 6)	79,388,978	515,520,269	531,480,981
Inventories (note 7)	67,580,555	438,841,092	496,754,625
Advance to suppliers (note 8)	53,128,955	344,998,183	52,577,513
Other receivables (note 9)	9,090,864	59,032,438	73,593,217
Prepaid expenses	561,383	3,645,396	4,562,333
Total current assets	302,694,975	1,965,580,096	2,051,768,837
Property, plant and equipment, net (note 10)	152,210,328	988,392,988	1,096,055,659
Land use rights, net (note 11)	20,526,793	133,292,782	136,125,360
Intangible assets, net (note 12)	307,423	1,996,285	5,822,528
Long-term deferred expenses (note 15)			5,562,810
Deferred income tax assets (note 17)	270,296	1,755,197
Total assets	476,009,815	3,091,017,348	3,295,335,194
Current liabilities
Trade accounts payable	3,432,938	22,292,132	17,055,679
Accrued expenses and other payables (note 13)	12,350,919	80,201,926	86,729,443
Income taxes payable	4,030,943	26,175,329	6,205,515
Short-term borrowings (note 14)	115,991,130	753,200,000	901,000,000
Current portion of long-term borrowings (note 14)	12,935,814	84,000,000	24,000,000
Bonds payable (note 15)	49,279,290	320,000,000	500,000,000
Total current liabilities	198,021,034	1,285,869,387	1,534,990,637
Long-term borrowings (note 14)			84,000,000
Total liabilities	198,021,034	1,285,869,387	1,618,990,637
Commitments and contingencies (note 18)
Shareholders' equity
Ordinary share-par value of RMB0.0068259; 25,725,000 shares authorized, issued and outstanding as of December 31, 2014 and 2015, respectively	25,725	175,596	175,596
Additional paid-in capital	72,091,319	468,132,187	468,132,187
Retained earnings-appropriated (note 2)	22,662,708	147,162,560	134,277,095
Retained earnings-unappropriated	183,285,097	1,190,180,107	1,074,210,923
Accumulated other comprehensive loss	(76,068)	(502,489)	(451,244)
Total shareholders' equity	277,988,781	1,805,147,961	1,676,344,557
Total liabilities and shareholders' equity	$ 476,009,815	¥ 3,091,017,348	¥ 3,295,335,194

CONSOLIDATED BALANCE SHEETS (Parenthetical) - CNY (¥)	Dec. 31, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Trade accounts receivable, allowance for doubtful accounts	¥ 0	¥ 0
Ordinary share, par value (in CNY per share)	¥ 0.0068259	¥ 0.0068259
Ordinary share, shares authorized	25,725,000	25,725,000
Ordinary share, shares issued	25,725,000	25,725,000
Ordinary share, shares outstanding	25,725,000	25,725,000

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares shares	Dec. 31, 2015 CNY (¥) ¥ / shares shares	Dec. 31, 2014 CNY (¥) ¥ / shares shares	Dec. 31, 2013 CNY (¥) ¥ / shares shares
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Revenues	$ 408,408,895	¥ 2,652,043,999	¥ 2,433,820,369	¥ 2,254,970,152
Cost of goods sold	365,324,266	2,372,269,654	2,173,381,791	2,009,229,511
Gross profit	43,084,629	279,774,345	260,438,578	245,740,641
Operating expenses:
Selling	802,410	5,210,530	4,880,386	5,160,405
General and administrative	7,739,047	50,254,277	43,421,610	41,645,512
Impairment loss of property, plant and equipment	1,081,186	7,020,788	0	0
Total operating expenses	9,622,643	62,485,595	48,301,996	46,805,917
Income from operations	33,461,986	217,288,750	212,136,582	198,934,724
Other income (expenses):
Government subsidy	6,564,925	42,630,000
Interest income	1,954,891	12,694,278	2,707,003	3,850,272
Interest expense	(14,700,699)	(95,460,460)	(102,884,972)	(91,158,982)
Amortized issuance cost of bonds (note 15)	(790,764)	(5,134,902)	(5,134,902)	(4,442,288)
Loss on sale of available-for-sale securities (note 4)		0	(1,965,765)	0
Others, net	(32,565)	(211,468)	756,252	(505,384)
Total other expense, net	(7,004,212)	(45,482,552)	(106,522,384)	(92,256,382)
Income before income tax expenses	26,457,774	171,806,198	105,614,198	106,678,342
Income tax expenses (note 17)
Current	6,884,739	44,706,746	26,403,549	27,150,033
Deferred	(270,296)	(1,755,197)
Income tax expenses	6,614,443	42,951,549	26,403,549	27,150,033
Net income attributable to ordinary shareholders	19,843,331	128,854,649	79,210,649	79,528,309
Other comprehensive loss, net of tax:
Unrealized holding loss for available-for-sale securities, net of tax effects of RMB248,712 for the years ended December 31, 2013		0	0	(746,137)
Reclassification adjustment of available-for-sale securities net of tax effect			746,137
Foreign currency translation adjustment	(7,892)	(51,245)	(2,831)	25,405
Other comprehensive loss	(7,892)	(51,245)	743,306	(720,732)
Total comprehensive income attributable to ordinary shareholders	$ 19,835,439	¥ 128,803,404	¥ 79,953,955	¥ 78,807,577
Earnings per share (note 2):
Basic and Diluted (in CNY or dollars per share) \| (per share)	$ 0.77	¥ 5.01	¥ 3.08	¥ 3.09
Weighted average ordinary shares outstanding (note 2):
Basic and diluted (in shares) \| 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 ($)	CNY (¥)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Unrealized holding loss for available-for-sale securities, tax effects	$ 40,646	¥ 248,712

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY	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 ($)	Accumulated Other Comprehensive Loss CNY (¥)	USD ($) shares	CNY (¥) shares
Beginning Balance at Dec. 31, 2012		¥ 175,596		¥ 468,132,187		¥ 118,401,996		¥ 931,347,064		¥ (473,818)		¥ 1,517,583,025
Beginning Balance (in shares) at Dec. 31, 2012 \| shares	25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income								79,528,309				79,528,309
Transfer to statutory reserves						7,954,033		(7,954,033)
Foreign currency translation adjustment										25,405		25,405
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,646)										(746,137)		(746,137)
Ending Balance at Dec. 31, 2013		¥ 175,596		468,132,187		126,356,029		1,002,921,340		(1,194,550)		1,596,390,602
Ending Balance (in shares) at Dec. 31, 2013 \| shares	25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income								79,210,649				79,210,649
Transfer to statutory reserves						7,921,066		(7,921,066)
Foreign currency translation adjustment										(2,831)		(2,831)
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,646)												0
Reclassification adjustment of available-for-sale securities net of tax effect										746,137		746,137
Ending Balance at Dec. 31, 2014		¥ 175,596		468,132,187		134,277,095		1,074,210,923		(451,244)		¥ 1,676,344,557
Ending Balance (in shares) at Dec. 31, 2014 \| shares	25,725,000	25,725,000									25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income								128,854,649			$ 19,843,331	¥ 128,854,649
Transfer to statutory reserves						12,885,465		(12,885,465)
Foreign currency translation adjustment										(51,245)	(7,892)	(51,245)
Unrealized holding loss for available-for-sale securities, net of tax of RMB248,712 ($40,646)												0
Ending Balance at Dec. 31, 2015	$ 25,725	¥ 175,596	$ 72,091,319	¥ 468,132,187	$ 22,662,708	¥ 147,162,560	$ 183,285,097	¥ 1,190,180,107	$ (76,068)	¥ (502,489)	$ 277,988,781	¥ 1,805,147,961
Ending Balance (in shares) at Dec. 31, 2015 \| 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 + Details

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - 12 months ended Dec. 31, 2013	USD ($)	CNY (¥)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Unrealized holding loss for available-for-sale securities, tax effects	$ 40,646	¥ 248,712

CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS	Dec. 31, 2015 USD ($)	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)	Dec. 31, 2013 CNY (¥)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Net income	$ 19,843,331	¥ 128,854,649	¥ 79,210,649	¥ 79,528,309
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of available-for-sale securities (note 4)		0	1,965,765	0
Interest income on held-to-maturity debt securities	(1,415,448)	(9,191,349)
Impairment loss of property, plant and equipment	1,081,186	7,020,788	0	0
Loss/(gain) on disposal of property, plant and equipment	37,356	242,575	(552,865)
Deferred income taxes	(270,296)	(1,755,197)
Depreciation	18,436,190	119,717,245	118,209,623	102,873,823
Amortization expense	1,025,444	6,658,821	6,658,690	5,397,193
Amortized issuance cost of bonds	790,764	5,134,902	5,134,902	4,442,288
Changes in operating assets and liabilities:
Trade accounts receivable	2,457,914	15,960,712	(173,017,513)	(55,683,569)
Inventories	8,918,556	57,913,533	(143,548,505)	(214,925,240)
Prepaid expenses and other current assets	(42,535,230)	(276,206,763)	208,044,828	(224,272,782)
Trade accounts payable	806,402	5,236,453	(12,216,553)	16,667,100
Accrued expenses and other payables	(1,341,703)	(8,712,481)	(16,160,797)	32,630,587
Income tax payable	3,075,307	19,969,814	(2,913,743)	2,457,487
Net cash provided by/(used in) operating activities	10,909,773	70,843,702	70,814,481	(250,884,804)
Cash flows from investing activities:
Restricted bank deposits	9,604,842	62,370,000	(20,329,333)	32,959,333
Purchases of property, plant and equipment	(3,457,830)	(22,453,760)	(74,569,901)	(194,168,883)
Purchases of available-for-sale securities				(17,778,718)
Purchases of held-to-maturity debt securities	(15,202,778)	(98,720,762)
Proceeds from disposal of property, plant and equipment	771,915	5,012,504	634,000
Proceeds from sale of available-for-sale securities		0	15,812,953	0
Refund from excess payments of land use rights				5,565,821
Net cash used in investing activities	(8,283,851)	(53,792,018)	(78,452,281)	(173,422,447)
Cash flows from financing activities:
Proceeds from borrowings	122,151,041	793,200,000	1,168,000,000	911,200,000
Repayments of borrowings	(148,607,860)	(965,000,000)	(851,200,000)	(1,061,200,000)
Settlement of bonds	(27,719,601)	(180,000,000)
Proceeds from the issuance of bonds, net of issuance costs paid				484,860,000
Net cash provided by/(used in) financing activities	(54,176,420)	(351,800,000)	316,800,000	334,860,000
Effect of foreign currency exchange translation	(7,892)	(51,245)	(2,831)	25,405
Net increase/ (decrease) in cash	(51,558,390)	(334,799,561)	309,159,369	(89,421,846)
Cash-beginning of year	127,884,404	830,430,168	521,270,799	610,692,645
Cash-end of year	76,326,014	495,630,607	830,430,168	521,270,799
Supplemental disclosure of cash flow information:
Cash paid for income taxes	3,809,433	24,736,935	29,317,293	24,692,546
Cash paid for interest net of capitalized interest cost	10,114,102	65,676,931	102,886,599	51,336,899
Non-cash investing activities:
Accrued fixed asset purchases	$ 326,739	¥ 2,121,712	¥ 4,746,821	¥ 11,195,275

Description of Business	12 Months Ended
Description of Business	Dec. 31, 2015
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. 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 chlorinated polyethylene (“CPE”) and foam insulation that are widely used in a broad range of industries.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

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 6.4936 to one Dollar ($), which is published by the People’s Bank of China on December 31, 2015. 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.

Held-to-maturity Debt Securities

A held-to-maturity debt security is a debt security that the Company has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. If it is not a hedged item, a held-to-maturity debt security should be carried at amortized cost subject to other-than-temporary impairment.

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 2011 with 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 0.7 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 determined that the production line of foam insulation was impaired as of December 31,2015. The Company record impairment losses of RMB nil, RMB nil and RMB 7,020,788 ($1,081,186) for the years ended December 31, 2013, 2014 and 2015.

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, 2014 and 2015, the trade accounts receivable included the output VAT charged to customers are RMB49,839,169 and RMB66,205,852 ($10,195,554), 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 0% 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, 2014 and 2015, VAT recoverable consisted of input VAT paid for purchase of corn but not yet validated by the PRC Taxing Authority of RMB57,950,944 and RMB 50,059,386 ($7,709,034 ), 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, 2013, 2014 and 2015 are RMB 80,054,943, RMB 76,564,421 and nil, respectively. As of December 31, 2014 and 2015, consumption tax payable are included in “VAT and other taxes payable” under “Accrued expenses and other payables” amounted to RMB 11,650,764 and nil, respectively. According to Cai Shui [2014] No.93, “Announcement on Adjusting Consumption Tax Policies”, jointed released by the Ministry of Finance and State Administration of Taxation of the PRC on November 25, 2014, the consumption tax on alcohol has been removed since December 1, 2014.

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, 2013, 2014 and 2015.

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2013, 2014 and 2015.

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, 2013, 2014 and 2015.

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 RMB9,194,271, RMB9,808,692 and RMB 10,369,297 ($1,596,849) for the years ended December 31, 2013, 2014 and 2015, respectively.

Borrowing cost

Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which require a substantial period of time to be ready for their intended use or sale, are capitalized as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalized. All other borrowing costs are recognized in interest expenses in the statement of income and comprehensive income in the period in which they are incurred.

Government Subsidies

The Company’s subsidiaries in China receive government subsidies from local Chinese government agencies in accordance with relevant Chinese government policies. In general, the Company presents the government subsidies received as part of other income unless the subsidies received are earmarked to compensate a specific expense, which have been accounted for by offsetting the specific expense, such as research and development expense or interest expenses. Unearned government subsidies received are deferred for recognition until the criteria for such recognition could be met.

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, 2014 and 2015, 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, 2013, 2014 and 2015, 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).

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 appropriation 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, 2013, 2014 and 2015, the Company made the transfers to this reserve fund in the amounts of RMB7,954,033, RMB7,921,066 and RMB12,885,465 ($1,984,333), 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 proposed any dividend payment for the years ended December 31, 2013, 2014 and 2015.

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.

Earnings Per Share (Continued)

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

	Year Ended December 31,
	2013	2014	2015	2015
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,528,309	79,210,649	128,854,649	19,843,331


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	3.09	3.08	5.01	0.77

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, 2014 and 2015, 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, liquid carbon dioxide and crude corn oil and the Company’s new chemical products CPE and foam insulation 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 years ended December 31, 2013, 2014 and 2015.

Interest Rate Risk

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

As of December 31, 2015 all balance of borrowing consists of short-term borrowings and short-term portion of long-term borrowings which will be matured at various dates within the year ending December 31, 2016 and do not expose the Company to interest rate risk. The Company’s interest rate risk arises primarily from long-term borrowings and bonds. The Company’s bonds were issued at fixed rates and expose the Company to fair value and interest rate risk which will be matured at fiscal year 2016.

The interest rates profile and terms of repayment of the Company’s short-term portion of long-term borrowings and bonds payable at the end of the reporting period are disclosed in note 13 and note 14, 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 May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”) in August 2015. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption of ASU 2014-09 on the consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. This ASU does not contain any new disclosure requirements. This ASU is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements —Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. Currently, there is no guidance in the U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this ASU provide such guidance and should reduce diversity in the timing and content of footnote disclosures. The amendments in this ASU require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is evaluating the effects, if any, that the adoption of the amendments in this ASU will have on the disclosure of the consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. It eliminates from U.S. GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item. If an event or transaction meets the criteria for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item. The amendment is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect that the adoption of the ASU No. 2015-01 will have a material impact on its consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”). The amendments in this update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We do not expect the adoption of ASU No. 2015-02 to have a material impact on our consolidated financial statements.

In June 2015, the FASB issued ASU No. 2015-10, “Technical Corrections and Improvements” (“ASU 2015-10”). The amendments in ASU 2015-10 cover a wide range of Topics in the Accounting Standards Codification (the “ASC”). The amendments in ASU 2015-10 represent changes to clarify the ASC, correct unintended application of guidance, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments will make the ASC easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the ASC. Transition guidance varies based on the amendments in ASU 2015-10. The amendments in ASU 2015-10 that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of ASU 2015-10. We do not expect the adoption of ASU No. 2015-10 to have a material impact on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11”). The amendments in this update require an entity to measure inventory within the scope of ASU 2015-11 (the amendments in ASU 2015-11 do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost) at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is uncharged for inventory measured using last-in, first-out or the retail inventory method. The amendments in ASU 2015-11 more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of ASU No. 2015-11 to have a material impact on our consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, “Business Combination (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”). The amendments in this update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in ASU 2015-16 should be applied prospectively to adjustments to provisional amounts that occur after the effective date of ASU 2015-16 with earlier application permitted for financial statements that have not been issued. We do not expect the adoption of ASU 2015-16 to have a material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this update eliminate the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public entities. For public business entities, the amendments in ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except for the early application guidance discussed in ASU 2016-01, early adoption of the amendments in this update is not permitted. We do not expect the adoption of ASU 2016-01 to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The main difference between Topic 842 and Topic 840 is the recognition of lease assets and lease liabilities for those leases classified as operating leases under Topic 840. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early application of the amendments in ASU 2016-02 is permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

Fair Value Measurements	12 Months Ended
Fair Value Measurements	Dec. 31, 2015
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 or disclosed on a recurring basis The fair value of financial items of the Company for disclosure purpose including cash and cash equivalents, restricted cash, other receivables, advance to suppliers, accrued expenses and other payables and short-term borrowings, approximate their carrying value due to their short-term nature. The Company’s investment (held-to-maturity debt securities) is disclosed using significant other observable inputs (Level 2), because it does not have regular market pricing. Liabilities of the Company for fair value disclosure purpose within Level 2 include long-term borrowings from financial institutions and bonds payable. Their carrying amounts are reasonable approximates of their fair value at the end of the reporting period due to all the long-term debts carry interest rates which approximate rates currently offered by the financial institutions for similar debt instruments of comparable maturities . The Company did not have any financial instruments measured or disclosed at fair value using Level 3 as of December 31, 2015 and 2014. Fair value measured on a non-recurring basis The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. As a result of the impairment test, it was determined that production line of foam insulation was impaired and written down to the fair value less cost to sell as of December 31, 2015. In determining the fair value, The Company used projections of cash flows directly associated with, and which are expected to arise as a direct result of, the use and eventual disposition of the assets. This approach required significant judgments including the Company’s projected net cash flows, which were derived using the most recent available estimate for the reporting unit containing the assets tested. Several key assumptions included periods of operation, projections of product pricing, production levels, product costs, market supply and demand, and inflation.

- 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
Available-for-sale Securities	Dec. 31, 2015
Available-for-sale Securities
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, in which representing 17,800,000 units at the par value of RMB1.00 each, with contractual maturity after one year. On January 6, 2014, the Investment Management Plan has been matured and was settled at RMB15,812,953. Net proceeds from settlement of available-for-sales securities for the years ended December 31, 2013, 2014 and 2015 were RMB nil RMB15,812,953 and RMB nil, respectively. Net realized losses from settlement of available-for-sales securities for the years ended December 31, 2013, 2014 and 2015 were RMB nil, RMB1,965,765 and RMB nil, respectively The fair value of available-for-sale securities reversed into earnings, upon settlement of available-for-sales securities on January 6, 2014. Unrealized holding loss net of tax for available-for-sale securities that recognized in other comprehensive income for the years ended December 31, 2013, 2014 and 2015 were RMB746,137, RMB nil, and RMB nil, 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 another-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

Held-to-maturity Debt Securities

12 Months Ended

Dec. 31, 2015

Held-to-maturity Debt Securities

Held-to-maturity Debt Securities

Held-to-maturity Debt Securities

5.Held-to-maturity Debt Securities

On January 29, 2015, the Company’s subsidiary, Daqing Borun purchased 1,000,000 units of private placement bonds (each unit with par value of RMB100.00 with nominal annul interest of 9.5%, and hereafter referred as the “Borun bonds”) which was traded in the Shanghai Stock Exchange and issued by Shandong Borun (another subsidiary of the Company) on January 29, 2013, at a cash consideration of RMB98,720,762 ($15,202,778).

The amortized cost, gross unrealized gains, and losses and estimated fair values of securities classified as held to maturity are as follows:

As of December 31, 2015	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
	(RMB)	(RMB)	(RMB)	(RMB)
Debt Securities:
Borun bonds, due January 29, 2016	107,912,111	1,587,889	—	109,500,000

($)	16,618,226	244,531	—	16,862,757

The interest income from the Borun bonds for the years ended December 31, 2013, 2014 and 2015 were RMB nil, RMB nil and RMB9,191,349 ($1,415,448), respectively.

- Definition

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

+ References + Details

Trade Accounts Receivable, Net

12 Months Ended

Dec. 31, 2015

Trade Accounts Receivable, Net

Trade Accounts Receivable, Net

6.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,
	2014	2015	2015
	(RMB)	(RMB)	($)
Trade accounts receivable	531,480,981	515,520,269	79,388,978
Less: Allowance for doubtful accounts	—	—	—

Total trade accounts receivable, net	531,480,981	515,520,269	79,388,978

As of December 31, 2014 and 2015, no trade accounts receivables were pledged as collateral for borrowings from financial institutions.

Inventories

12 Months Ended

Dec. 31, 2015

Inventories

Inventories

7.Inventories

Inventories consisted of the following:

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Raw materials	421,800,272	387,319,932	59,646,411
Work-in-process	3,202,142	5,152,109	793,413
Finished goods	71,752,211	46,369,051	7,140,731

Total inventories	496,754,625	438,841,092	67,580,555

The Company did not set up any inventory reserve as of December 31, 2014 and 2015. As of December 31, 2014 and 2015, certain raw materials with an aggregate carrying value of RMB183,765,570 and RMB nil, respectively, were pledged as collateral for borrowings from financial institutions.

Advance to Suppliers

12 Months Ended

Dec. 31, 2015

Advance to Suppliers

Advance to Suppliers

8.Advance to Suppliers

Advances to suppliers consisted of the following:

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	52,268,983	343,839,565	52,950,530
Others	308,530	1,158,618	178,425

Total advance to suppliers	52,577,513	344,998,183	53,128,955

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, 2015

Other Receivables

Other Receivables

9.Other Receivables

Other receivables consisted of the following:

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	64,888,300	52,829,584	8,135,639
Deposit for loan guarantee	5,400,000	2,900,000	446,594
Others	3,304,917	3,302,854	508,631

Total other receivables	73,593,217	59,032,438	9,090,864

Note (i):As of December 31, 2014 and 2015, VAT recoverable mainly consisted of input VAT paid for purchase of corns but not yet validated by the PRC Taxing Authority of RMB57,950,944 and RMB50,059,386 ($7,709,034), respectively.

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment, Net.

Property, Plant and Equipment, Net

10. Property, Plant and Equipment, Net

Property, plant and equipment consisted of the following:

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Buildings and improvements	641,622,780		642,901,735		99,005,442
Machinery	923,433,082		926,621,646		142,697,678
Office equipment and furnishing	1,468,593		1,468,593		226,160
Motor vehicles	3,632,489		1,715,958		264,254

Total cost	1,570,156,944		1,572,707,932		242,193,534
Total accumulated depreciation	(497,512,176	)	(611,246,250	)	(94,130,567	)
Construction in progress	23,410,891		26,931,306		4,147,361

Total property, plant, and equipment, net	1,096,055,659		988,392,988		152,210,328

Certain buildings with an aggregate carrying value of RMB94,100,997 and RMB89,567,625 ($13,793,216), respectively, and certain equipment with an aggregate carrying value of RMB51,286,059 and RMB133,059,754 ($20,490,907), respectively, were pledged as collateral for borrowings from the financial institutions as of December 31, 2014 and 2015. For the years ended December 31, 2013, 2014 and 2015, the interests amounted to RMB 4,752,000, RMB nil and RMB nil, respectively, were capitalized as borrowing cost in property, plant and equipment.

The depreciation expenses for the years ended December 31, 2013, 2014 and 2015 were RMB102,873,823, RMB118,209,623 and RMB119,717,245 ($18,436,190), respectively.

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

Land Use Rights, Net

12 Months Ended

Dec. 31, 2015

Land use rights

Land use rights, net

Land Use Rights, Net

11.Land Use Rights, Net

Land use rights consisted of the following:

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Land use rights at cost	144,726,756		144,726,756		22,287,600
Accumulated amortization	(8,601,396	)	(11,433,974	)	(1,760,807	)

Total land use rights, net	136,125,360		133,292,782		20,526,793

As of December 31, 2014 and 2015, certain land use rights with an aggregate carrying value of RMB5,712,909 and RMB5,581,879 ($859,597), respectively, were pledged as collateral for borrowings from the financial institutions.

The amortization expenses for the years ended December 31, 2013, 2014 and 2015 were RMB1,570,950, RMB2,832,447 and RMB2,832,578 ($436,211), respectively.

Future amortization of land use rights is as follows:

Years Ending December 31,		(RMB) Amount
2016		2,832,573
2017		2,832,573
2018		2,832,573
2019		2,832,573
2020		2,832,573
Thereafter		119,129,917

Total		133,292,782

Intangible Assets, Net

12 Months Ended

Dec. 31, 2015

Production license

Intangible assets, net

Intangible Assets, Net

12.Intangible Assets, Net

Intangible assets consisted of the following:

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Production license at cost	28,779,986		28,779,986		4,432,054
Accumulated amortization	(22,957,458	)	(26,783,701	)	(4,124,631	)

Total intangible assets, net	5,822,528		1,996,285		307,423

The amortization expenses for the years ended December 31, 2013, 2014 and 2015 were RMB3,826,243, RMB3,826,243 and RMB 3,826,243 ($589,233), respectively. No provision for impairment loss has been charged for the years ended December 31, 2013, 2014 and 2015.

Future amortization of intangible assets is as follows:

Years Ending December 31,		(RMB) Amount
2016		1,996,285

Accrued Expenses and Other Payables

12 Months Ended

Dec. 31, 2015

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,
	2014	2015	2015
	(RMB)	(RMB)	($)
Payroll and welfare payables	17,422,454	19,257,320	2,965,585
VAT and other tax payables	22,288,677	27,340,316	4,210,348
Accrued fixed assets purchases	4,746,821	2,121,712	326,739
Other payables and accruals	2,451,035	4,277,122	658,667
Accrued bonds’ interest expenses (note 15)	39,820,456	27,205,456	4,189,580

Total accrued expenses and other payables	86,729,443	80,201,926	12,350,919

Borrowings

12 Months Ended

Dec. 31, 2015

Borrowings

Borrowings

14.Borrowings

Borrowings consisted of the following:

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Short-term borrowings	901,000,000	753,200,000	115,991,130

Long-term borrowings
Current portion	24,000,000	84,000,000	12,935,814
Non-current portion	84,000,000	—	—

	1,009,000,000	837,200,000	128,926,944

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,
	2014	2015	2015
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	48,000,000	24,000,000	3,695,947
Agricultural Bank of China (note (ii))	190,000,000	383,200,000	59,011,950
China Construction Bank (note (iii))	300,000,000	230,000,000	35,419,490
Agricultural Development Bank of China (note (iv))	260,000,000	60,000,000	9,239,867
China CITIC Bank (note (v)	170,000,000	140,000,000	21,559,690
Bank of China (note (vi))	15,000,000	—	—
Xingye International Trust Co., Ltd (note (vii))	26,000,000	—	—

Total borrowings	1,009,000,000	837,200,000	128,926,944

Note (i):During the year December 31, 2015, one short-term portion of long-term loan of RMB 24,000,000 ($3,695,947) obtained from the Industrial & Commercial Bank of China (the “ICBC”) was still outstanding:

 A long-term loan of RMB24,000,000 ($3,695,947)—The total original loan amount was RMB90,000,000 ($13,859,800). The interest bearing at a floating rate was thereon based on the prime rate published by the People’s Bank of China (the “PBOC”) for loans with the same or similar terms on the contract date rise 10% (6.60% per annum as of the December 31, 2015, and adjustable yearly following the publishing of rate adjustments by the PBOC during the term of the loan and calculated piecewise). As of December 31, 2015, a total amount of RMB66,000,000 ($10,163,853) had been repaid, and RMB24,000,000 ($3,695,947) was still outstanding, and subsequently, the Company need to repay RMB6,000,000 ($923,987) per quarter until October 12, 2016. Borrowings under the loan agreement are guaranteed by a third party company.

During the year ended December 31, 2014, one long-term loan of RMB 48,000,000 obtained from the ICBC was still outstanding:

 A long-term loan of RMB48,000,000—The total original loan amount was RMB90,000,000. The interest bearing at a floating rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 10% (6.60% per annum as of the December 31, 2014, and adjustable yearly following the publishing of rate adjustments by the PBOC during the term of the loan and calculated piecewise). As of December 31, 2014, a total amount of RMB42,000,000 had been repaid, and RMB48,000,000 was still outstanding, and subsequently, the Company need to repay RMB6,000,000 per quarter until October 12, 2016. Borrowings under the loan agreement are guaranteed by a third party company.

Note (ii):During the year ended December 31, 2015, the Agricultural Bank of China (the “ABC”) granted the Company thirteen loans of RMB383,200,000 ($59,011,950) which are including:

 Two short-term loans of RMB70,000,000 ($10,779,844)—The interest bearing at a fixed rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (5.62% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB70,000,000 ($10,779,844) was outstanding, of which RMB40,000,000 ($6,159,911) will be repayable on March 4, 2016 and RMB30,000,000 ($4,619,933) will be repayable on April 12, 2016. All borrowings under these loan agreements are guaranteed by third party companies and the Chief Executive Officer Mr. Jinmiao Wang (the “CEO”) simultaneously. The loans contain the following financial covenants: at any time during the loan period, debt-to-asset ratio of Shandong Borun shall not be higher than 70%; contingent liabilities of Shandong Borun shall not exceed 50% of its total net assets; and net operating cash flow shall not be negative for three consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2015.

 Two short-term loans of RMB43,200,000 ($6,652,706)—The interest bearing at a fixed rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (5.88% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB43,200,000 ($6,652,706) was outstanding, of which RMB23,200,000 ($3,572,750) will be repayable on January 8, 2016 and RMB20,000,000 ($3,079,956) will be repayable on January 15, 2016. All borrowings under these loan agreements are guaranteed by third party companies. The loans contain the following financial covenants: at any time during the loan period, debt-to-asset ratio of Shandong Borun shall not be higher than 70%; contingent liabilities of Shandong Borun shall not exceed 50% of its total net assets; and net operating cash flow shall not be negative for three consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2015.

 Two short-term loans of RMB50,000,000 ($7,699,889)—The interest bearing at a fixed rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (5.09% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB50,000,000 ($7,699,889) was outstanding, of which RMB30,000,000 ($4,619,933) will be repayable on July 1, 2016 and a loan of RMB20,000,000 ($3,079,956) will be repayable on August 1, 2016. All borrowings under these loan agreements are guaranteed by third party companies and the CEO simultaneously. The loans contain the following financial covenants: at any time during the loan period, debt-to-asset ratio of Shandong Borun shall not be higher than 70%; contingent liabilities of Shandong Borun shall not exceed 50% of its total net assets; and net operating cash flow shall not be negative for three consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2015.

 Five short-term loans of RMB140,000,000 ($21,559,689)—The interest bearing at a fixed rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (4.83% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB140,000,000 ($21,559,689) was outstanding, of which RMB20,000,000 ($3,079,956) will be repayable on September 12, 2016, RMB40,000,000 ($6,159,911) will be repayable on September 21, 2016, and three loans of RMB30,000,000 ($4,619,933), RMB 20,000,000 ($3,079,956) and RMB30,000,000 ($4,619,933) will be repayable on October 11, October 13 and October 12, 2016 respectively. All borrowings under these loan agreements are guaranteed by third party companies and the CEO simultaneously. The loans contain the following financial covenants: at any time during the loan period, debt-to-asset ratio of Shandong Borun shall not be higher than 70%; contingent liabilities of Shandong Borun shall not exceed 50% of its total net assets; and net operating cash flow shall not be negative for three consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2015.

 Two short-term loan of RMB80,000,000 ($12,319,822)—The interest bearing at a fixed rate is thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (4.57% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB80,000,000 ($12,319,822) was outstanding of which RMB30,000,000 ($4,619,933) will be repayable on November 3, 2016, RMB50,000,000 ($7,699,889) will be repayable on November 14, 2016 respectively. Borrowing under the loan agreement is guaranteed by third party companies and the CEO simultaneously. The loans contain the following financial covenants: at any time during the loan period, debt-to-asset ratio of Shandong Borun shall not be higher than 70%; contingent liabilities of Shandong Borun shall not exceed 50% of its total net assets; and net operating cash flow shall not be negative for three consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2015.

During the year ended December 31, 2014, the ABC granted the Company seven loans of RMB190,000,000 which are including:

 Six short-term loans of RMB150,000,000 —The interest bearing at a fixed rate was thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (6.30% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB150,000,000 was outstanding, of which RMB20,000,000 has been fully repaid on August 5, 2015, RMB30,000,000 has been fully repaid on October 15, 2015, RMB20,000,000 has been fully repaid on October 16, 2015, RMB30,000,000 has been fully repaid on November 5, 2015, and two loans of RMB50,000,000 has been fully repaid on November 16, 2015. All borrowings under these loan agreements are guaranteed by third party companies.

 A short-term loan of RMB40,000,000 —The interest bearing at a fixed rate is thereon based on the prime rate published by the PBOC for loans with the same or similar terms on the contract date rise 5% (6.30% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB40,000,000 was outstanding, which has been fully repaid on October 7, 2015. Borrowing under the loan agreement is guaranteed by third party companies and the CEO simultaneously.

Note (iii):During the year ended December 31, 2015, the China Construction Bank (the “CCB”) granted the Company six loans of RMB230, 000, 000 ($35,419,490), which are including:

 Two short-term loans of RMB100,000,000 ($15,399,778)—the interest thereon bear at a fixed rate that is based on the loan prime rates plus 122 basis point (6.72% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB100,000,000 ($15,399,778) was outstanding and RMB50,000,000 ($7,699,889) will be repayable on January 16, 2016, RMB50,000,000 ($7,699,889) will be repayable on February 9, 2016. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loans contain 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 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000 ($24,023,654), contingent liabilities of Daqing Borun shall not exceed 50% of its total 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, 2015.

 Two short-term loans of RMB100,000,000 ($15,399,778)—the interest thereon bear at a fixed rate that is based on the loan prime rates plus 133.4 basis point (6.63% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB100,000,000 ($15,399,778) was outstanding and RMB50,000,000 ($7,699,889) will be repayable on March 17, 2016, RMB50,000,000 ($7,699,889) will be repayable on April 21, 2016. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loans contain 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 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000 ($24,023,654), contingent liabilities of Daqing Borun shall not exceed 50% of its total 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, 2015.

 A short-term loan of RMB20,000,000 ($3,097,956)—the interest thereon bear at a fixed rate that is based on the loan prime rates plus 158 basis point (6.63% per annum as of December 31 2015). As of December 31, 2015, an amount of RMB20,000,000 ($3,097,956) was outstanding, which will be repayable on June 16, 2016. Borrowing under the loan agreement is secured by equipments of Daqing Borun with total carrying values of RMB116,370,518 ($17,920,802) as of December 31, 2015, and guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loans contain 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 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000 ($24,023,654); contingent liabilities of Daqing Borun shall not exceed 50% of its total net assets; accumulated long-term investment of Daqing Borun shall not exceed 30% of its net assets; he ownership structure of the Daqing Borun shall not be changed. The Company was in compliance with the above financial covenants as of December 31, 2015.

 A short-term loan of RMB10,000,000 ($1,539,978)—the interest thereon bear at a fixed rate that is based on the loan prime rates plus 92 basis point (5.22% per annum as of December 31 2015). As of December 31, 2015, an amount of RMB10,000,000 ($1,539,978) was outstanding, which will be repayable on December 30, 2016. Borrowing under the loan agreement is secured by buildings and land of Daqing Borun with total carrying values of RMB89,567,625 ($13,793,216) and RMB5,581,879 ($859,597), respectively, as of December 31, 2015, and guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loans contain 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 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000 ($24,023,654), contingent liabilities of Daqing Borun shall not exceed 50% of its total net assets; accumulated long-term investment of Daqing Borun shall not exceed 30% of its net assets; the ownership structure of the Daqing Borun shall not be changed. The Company was in compliance with the above financial covenants as of December 31, 2015.

During the year ended December 31, 2014, the CCB granted the Company five loans of RMB300, 000, 000, which are including:

 Three short-term loans of RMB220,000,000—the interest bearing at a fixed rate is thereon based on the benchmark interest rates on the drawdown date to rise 30% (7.80% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB220,000,000 was outstanding, of which RMB80,000,000 has been fully repaid on January 6, 2015, RMB70,000,000 has been fully repaid on January 19, 2015, and RMB70,000,000 has been fully repaid on March 19, 2015. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loans contain 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 0.85; contingent liabilities of Daqing Borun shall not exceed RMB278,950,000, contingent liabilities of Daqing Borun shall not exceed 50% of its total 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, 2014.

 A short-term loan of RMB30,000,000—the interest thereon bear at a fixed rate that is based on the benchmark interest rates on the drawdown date to rise 10% (6.60% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB30,000,000 was outstanding, which has been fully repaid on September 29, 2015. Borrowing under the loan agreement is guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his two 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 be less than 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000; contingent liabilities of Daqing Borun shall not exceed 50% of its total 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, 2014.

 A short-term loan of RMB50,000,000 —The interest thereon bear at a fixed rate that is based on the loan prime rates plus 110 basis point (6.60% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB50,000,000 was outstanding, which has been fully repaid on December 31, 2015. Borrowing under the loan agreement is secured by buildings and land of Daqing Borun with total carrying values of RMB94,100,997 and RMB5,712,909, respectively, as of December 31, 2014, and guaranteed by the Company’s 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 0.80; contingent liabilities of Daqing Borun shall not exceed RMB156,000,000; 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, 2014.

Note (iv):During the year ended December 31, 2015, the Agricultural Development Bank of China (the “ADB”) granted the Company a loan of RMB60,000,000 ($9,239,867), including:

 A long-term loan of RMB60,000,000($9,239,867) —In November 2014, the company entered into a loan agreement with the ADB pursuant to which the Company may borrow up to RMB70,000,000($10,779,845). The Company drew down RMB60,000,000($9,239,867) on November 11, 2014. The interest thereon bear at a fixed rate of 6.33% per annum. As of December 31, 2015, an amount of RMB60,000,000 ($9,239,867) was outstanding and will be repayable on November 10, 2016, respectively. Borrowing under the loan agreement is guaranteed by two third party guarantors, another third party company and the Company’s CEO simultaneously. Pursuant to the guarantee agreements, the Company pledged its property, plant and equipment to a third party guarantor with total carrying values of RMB16,689,236 ($2,570,105). Besides, Datong District People’s Government, the subsidiary Shandong Borun, and the Company’s CEO provided counter guarantee to these two third party guarantors 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%; and operating cash flow of Daqing Borun shall not be negative. The Company was in compliance with the above financial covenants as of December 31, 2015.

During the year ended December 31, 2014, the ADB granted the Company four loans of RMB410,000,000, which are including:

 A short-term loan of RMB150,000,000 —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. The Company drew down RMB50,000,000, RMB50,000,000, and RMB50,000,000 on January 7, February 28, and March 21, 2014 respectively. Borrowing under the loan agreement is guaranteed by the Company’s CEO. All borrowings under this loan have been fully repaid as of December 31, 2014.

 A short-term loan of RMB190,000,000 —The interest thereon bear at a fixed rate of 6.00% per annum. As of December 31, 2014, an amount of RMB190,000,000 was outstanding, of which RMB100,000,000, RMB60,000,000, and RMB30,000,000 has been fully repaid on June 30, August 30, and September 30, 2015, respectively. Borrowing under the loan agreement is secured by the corn of 100,328 ton of Daqing Borun with total carrying value of RMB183,765,570 and guaranteed by the Company’s CEO 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%; and operating cash flow of Daqing Borun shall not be negative. The Company was in compliance with the above financial covenants as of December 31, 2014.

 A short-term loan of RMB10,000,000 —The interest thereon bear at a fixed rate of 6.00% per annum. As of December 31, 2014, an amount of RMB10,000,000 was outstanding, which has been fully repaid on September 30, 2015. Borrowing under the loan agreement is secured by equipments of Daqing Borun with total carrying value of RMB30,617,298, secured by the corn of 100,328 ton of Daqing Borun with total carrying value of RMB183,765,570 and guaranteed by the Company’s CEO 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%; and operating cash flow of Daqing Borun shall not be negative. The Company was in compliance with the above financial covenants as of December 31, 2014.

 A long-term loan of RMB60,000,000 —In November 2014, the Company entered into a loan agreement with the ADB pursuant to which the Company may borrow up to RMB70,000,000. The Company drew down RMB60,000,000 on November 11, 2014 and was outstanding at December 31, 2014. The interest thereon bear at a fixed rate of 6.33% per annum. As of December 31, 2014, an amount of RMB60,000,000 was outstanding and will be repayable on November 10, 2016. Borrowing under the loan agreement is guaranteed by two third party guarantors, a third party company and the Company’s CEO simultaneously. Pursuant to the guarantee agreements, the Company pledged its property, plant and equipment to a third party guarantor with total carrying values of RMB20,668,761. Besides, Datong District People’s Government, the subsidiary Shandong Borun, and the Company’s CEO provided counter guarantee to these two third party guarantors 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%; and operating cash flow of Daqing Borun shall not be negative. The Company was in compliance with the above financial covenants as of December 31, 2014.

Note (v):During the year ended December 31, 2015, China CITIC Bank granted the Company six loans of RMB140,000,000 ($21,559,690), which are including:

 A short-term loans of RMB20,000,000 ($3,079,956)—the interest bearing at a fixed rate is thereon based on the prime interest rates on the drawdown date plus 150.5 basis point (6.31% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB20,000,000 ($3,079,956) was outstanding, which will be repayable on July 30, 2016. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

 Two short-term loan of RMB69,000,000 ($10,625,847)—the interest bearing at a fixed rate is thereon based on the prime interest rates on the drawdown date plus 102 basis point (5.82% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB69,000,000 ($10,625,847) was outstanding, of which RMB49,000,000 ($7,545,891) and RMB20,000,000 ($3,079,956) will be repayable on August 4 and August 13, 2016 respectively. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

 Two short-term loan of RMB35,000,000 ($5,389,922)—the interest bearing at a fixed rate is thereon based on the prime interest rates on the drawdown date plus 143 basis point (5.98% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB35,000,000 ($5,389,923) was outstanding, of which RMB20,000,000 ($3,079,956) and RMB15,000,000 ($2,309,966) will be repayable on September 24 and October 21, 2016 respectively. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

 A short-term loan of RMB16,000,000 ($2,463,965)—the interest bearing at a fixed rate is thereon based on the prime interest rates on the drawdown date plus 135.5 basis point (5.66% per annum as of December 31, 2015). As of December 31, 2015 an amount of RMB16,000,000 ($2,463,965) was outstanding, which will be repayable on October 26, 2016. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

During the year ended December 31, 2014, China CITIC Bank granted the Company five loans of RMB170,000,000, which are including:

 Three short-term loans of RMB99,000,000 —The interest thereon bear at a fixed rate that is based on the prime rate published by the PBOC for loans with the same or similar terms on the drawdown date rise 25% (7.50% per annum as of December 31, 2014). As of December 31, 2014, an amount of RMB99,000,000 was outstanding, of which RMB30,000,000, RMB49,000,000, and RMB20,000,000 has been fully repaid on June 24, August 4, and September 28, 2015 respectively. Borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

 A short-term loan of RMB31,000,000—The interest thereon bear at a fixed rate of 6.6% per annum. As of December 31, 2014, an amount of RMB31,000,000 was outstanding, which has been fully repaid on October 29, 2015. Borrowing under the loan agreement is guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

 A short-term loan of RMB40,000,000—As of December 31, 2014, an amount of RMB40,000,000 was outstanding, which has been fully repaid on February 11, 2015. The borrowing is secured by RMB20,000,000 deposits at the bank and guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

Note (vi):During the year ended December 31, 2014, the Bank of China granted the Company five loans of RMB47,000,000:

 Two short-term loans of RMB15,000,000—As of December 31, 2014, an amount of RMB15,000,000 was outstanding, of which RMB10,000,000 has been fully repaid on May 7, 2015, and RMB5,000,000 has been fully repaid on June 15, 2015. The loans are secured by RMB15,000,000 deposit at the bank and pledged by third party fixed deposit receipt of RMB15,000,000.

 Three short-term loans of RMB32,000,000— These loans were secured by RMB32,000,000 deposit at the bank and pledged by third parties fixed deposit receipt of RMB 32,000,000. As of December 31, 2014, all borrowings under these loans have been fully repaid during the year.

Note (vii):During the year ended December 31, 2014, the Xingye International Trust Co., Ltd granted the Company a short-term loan of RMB26,000,000:

 A short-term loans of RMB26,000,000—The interest thereon bear at a fixed rate of 5.23% per annum. As of December 31, 2014, an amount of RMB26,000,000 was outstanding, which has been fully repaid on May 21, 2015. The loan is pledged by RMB27,370,000 term deposit at China CITIC Bank.

The weighted average interest rates on the bank loans for the years ended December 31, 2013, 2014 and 2015 were 6.63%, 6.43% and 5.77% respectively. The interest expenses on the bank loans incurred for the years ended December 31, 2013, 2014 and 2015 were RMB51,336,899, RMB56,384,972 and RMB58,997,387 ($9,085,467), respectively.

These facilities contain no specific renewal terms. The Company has historically and successfully negotiated the renewal of certain facilities shortly before they mature.

Bonds Payable

12 Months Ended

Dec. 31, 2015

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 ($76,998,891) 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 ($53,899,224) 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 ($23,099,667).

During the year ended December 31, 2013, Shandong Borun has issued the registered private placement bonds (the “Bonds”) of RMB500,000,000 ($76,998,891). The proceeds from the issuance of the Bonds were used in the purpose for the Company’s working capital and capital expenditures. RMB500,000,000 and RMB320,000,000 ($49,279,290) was outstanding as of December 31, 2014 and 2015, respectively

The Bonds were issued at face value of RMB100 ($15) 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 raised interest rate from 9.3% to 9.5% per annum, and the holders of the Bonds have sold back total of RMB180,000,000 ($27,719,601) of the Bonds at face value during the year ended December 31, 2015. The bonds payable and its accrued interest expenses as of the end of the reporting period as follows:

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Current liabilities
Accrued expenses and other payables—Accrued bonds’ interests element (note 13)	39,820,456	27,205,456	4,189,580
Bonds payable—Outstanding principals	500,000,000	320,000,000	49,279,290

Interests of the Bonds incurred for the year ended December 31, 2013, 2014 and 2015 was RMB 39,822,083, RMB46,500,000 and RMB33,885,000 ($5,218,215), respectively, which are payable annually.

Cost associated to the issuance of the Bonds of RMB15,140,000 ($2,331,526) 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, 2015, outstanding deferred expenses of RMB427,908 ($65,897) were classified as “Prepaid expenses”. The amortized deferred expenses for the year ended December 31, 2013, 2014 and 2015 were RMB4,442,288, RMB5,134,902 and RMB5,134,902 ($790,764), respectively.

Restricted Net Assets	12 Months Ended
Restricted Net Assets	Dec. 31, 2015
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 RMB1,135,800,419 and RMB1,148,685,884 ($176,895,079) as of December 31, 2014 and 2015, respectively.

Income Tax Expenses

12 Months Ended

Dec. 31, 2015

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 non-resident, for earnings retained after January 1, 2008. The applicable tax rate is 5% or 10% 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,
	2013	2014	2015		2015
	(RMB)	(RMB)	(RMB)		($)
Current	27,150,033	26,403,549	44,706,746		6,884,739
Deferred	—	—	(1,755,197	)	(270,296	)

Income tax expenses	27,150,033	26,403,549	42,951,549		6,614,443

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

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Non-current deferred tax assets:
Impairment of property, plant and equipment	—	1,755,197	270,296

Valuation allowances	—	—	—

Net non-current deferred income tax assets	—	1,755,197	270,296

The significant temporary differences relating to deferred tax assets relate to the impairment of property, plant and equipment of foam insulation production line as of December 31 2015.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,
	2013		2014		2015
Statutory rate	25.00	%	25.00	%	25.00	%
Expenses not deductible	0.45	%	—	%	—	%

Effective tax rate	25.45	%	25.00	%	25.00	%

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2015
Commitments and Contingencies.
Commitments and Contingencies	18.Commitments and Contingencies Commitments As of December 31, 2014 and 2015, capital commitment for purchase of property, plant and equipment were RMB 26,939,788 and RMB 5,213,968 ($802,940), respectively. The Company did not have any significant lease commitment as of December 31, 2014 and 2015. As of December 31, 2014 and 2015, purchase obligations for corn were RMB179,400,000 and nil, 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, 2014 and 2015, the Company guaranteed the third parties’ borrowings from the financial institutions amounting to RMB320,000,000 and RMB 425,000,000 ($65,449,058), respectively, as a guarantor. 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, 2015

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, 2013, 2014 and 2015 are as follows:

	Year ended December 31,
	2013				2014				2015
	Net sales	Inter- segment sales	Profit (loss) before tax		Net sales	Inter- segment sales	Profit (loss) before tax		Net sales	Inter- segment sales	Profit (loss) before tax
	(RMB)	(RMB)	(RMB)		(RMB)	(RMB)	(RMB)		(RMB)	(RMB)	(RMB)
Segment:
Corn-base edible alcohol and its by-products	2,249,552,806	—	107,849,762		2,349,479,253	—	106,563,659		2,519,435,448	—	178,935,982
CPE	5,004,607	—	(883,268	)	76,990,402	—	(2,332,900	)	129,753,632	—	(238,451	)
Foam insulation	412,739	—	(288,152	)	7,350,714	—	1,383,439		2,854,919	—	(6,891,333	)

Segment total	2,254,970,152		106,678,342		2,433,820,369		105,614,198		2,652,043,999		171,806,198

Reconciliation to consolidated totals:
Sales eliminations	—	—	—		—	—	—		—	—	—

Consolidated totals:
Revenues	2,254,970,152	—			2,433,820,369	—			2,652,043,999	—

Revenues ($)									408,408,895	—


Income before income taxes			106,678,342				105,614,198				171,806,198

Income before income taxes ($)											26,457,774

	Year ended December 31,
	2013			2014			2015
	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	3,850,272	91,158,982	27,150,033	2,707,003	102,884,972	26,057,689	12,694,278	95,460,460	43,474,307
CPE	—	—	—	—	—	—	—	—	1,232,439
Foam insulation	—	—	—	—	—	345,860	—	—	(1,755,197	)

Consolidated total	3,850,272	91,158,982	27,150,033	2,707,003	102,884,972	26,403,549	12,694,278	95,460,460	42,951,549


Consolidated total ($)							1,954,891	14,700,699	6,614,443

	As of and Year ended December 31,
	2013			2014			2015
	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	2,627,430,265	12,371,997	111,101,216	2,939,857,073	30,906,718	117,798,451	2,761,828,032	15,225,406	116,444,296
CPE	230,307,062	146,075,937	1,208,774	273,931,236	36,760,523	9,620,259	325,950,439	5,521,367	14,245,229
Foam insulation	75,818,849	30,155,128	403,314	81,546,885	2,957,910	2,584,505	3,238,877	—	821,443

Segment totals	2,933,556,176	188,603,062	112,713,304	3,295,335,194	70,625,151	130,003,215	3,091,017,348	20,746,773	131,510,968
Reconciliation to consolidated totals:
Elimination of receivables from intersegments	—	—	—	—	—	—	—	—	—

Consolidated totals	2,933,556,176	188,603,062	112,713,304	3,295,335,194	70,625,151	130,003,215	3,091,017,348	20,746,773	131,510,968


Consolidated totals ($)							476,009,815	3,194,957	20,252,398

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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&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=51669610&loc=d3e8906-108599

+ Details

Condensed Financial Information of New Borun

12 Months Ended

Dec. 31, 2015

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 RMB1,135,800,419 and RMB 1,148,685,884 ($176,895,079) as of December 31, 2014 and 2015, respectively.

The condensed financial information of the Registrant represents as follows:

CONDENSED BALANCE SHEETS

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
ASSETS
Current assets
Cash	128	136	21
Amounts due from subsidiaries	244,532,160	244,532,160	37,657,410

Total current assets	244,532,288	244,532,296	37,657,431
Investments in subsidiaries	1,431,816,950	1,560,620,633	240,332,117

Total assets	1,676,349,238	1,805,152,929	277,989,548


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses and other payables	4,681	4,968	767

Total current liabilities and total liabilities	4,681	4,968	767

Total shareholders’ equity	1,676,344,557	1,805,147,961	277,988,781

Total liabilities and shareholders’ equity	1,676,349,238	1,805,152,929	277,989,548

CONDENSED STATEMENTS OF INCOME

	Year Ended December 31,
	2013		2014	2015	2015
	(RMB)		(RMB)	(RMB)	($)
Operating expenses:
General and administrative	(5,188	)	—	—	—

Loss from operations	(5,188	)	—	—	—
Other income:
Interest income	—		—	—	—
Equity in earnings of subsidiaries	79,533,497		79,210,649	128,854,649	19,843,330

Income before income tax expense	79,528,309		79,210,649	128,854,649	19,843,330
Income tax expense	—		—	—	—

Net income	79,528,309		79,210,649	128,854,649	19,843,330

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2013		2014	2015	2015
	(RMB)		(RMB)	(RMB)	($)
Net cash provided by/(used in) operating activities	(5,332	)	—	8	1
Net cash provided by investing activities	—		—	—	—
Net cash provided by financing activities	—		—	—	—
Effect of exchange rate changes on cash and cash equivalents	(34	)	—	—	—

Net increase/(decrease) in cash	(5,366	)	—	8	1
Cash—beginning of year	5,494		128	128	20

Cash—end of year	128		128	136	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 distribute any dividend to the Registrant for the years ended December 31, 2013, 2014 and 2015.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Summary of Significant Accounting Policies

Principles of Consolidation and Presentation

Foreign Currency Translation

Convenience Translation into United States Dollar Amounts

Use of Estimates

Cash

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

Available-for-sale Securities

Held-to-maturity Debt Securities

Inventories

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

Intangible Assets

Impairment of Long-Lived Assets

Value added tax

Revenue Recognition

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

Consumption Tax

Cost of Goods Sold

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, 2013, 2014 and 2015.

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2013, 2014 and 2015.

Shipping and Handling Costs

Allowance for Doubtful Accounts

Retirement and Other Postretirement Benefits

The total amounts for such employee benefits which were expensed were RMB9,194,271, RMB9,808,692 and RMB 10,369,297 ($1,596,849) for the years ended December 31, 2013, 2014 and 2015, respectively.

Borrowing cost

Government Subsidies

Income Taxes

Comprehensive Income (Loss)

Appropriated Retained Earnings

Dividends

Earnings Per Share

Earnings Per Share (Continued)

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

	Year Ended December 31,
	2013	2014	2015	2015
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,528,309	79,210,649	128,854,649	19,843,331


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	3.09	3.08	5.01	0.77

Operating Risk

Concentrations of Credit Risk

Interest Rate Risk

Borrowings and 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

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

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,
	2013	2014	2015	2015
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,528,309	79,210,649	128,854,649	19,843,331


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	3.09	3.08	5.01	0.77

Held-to-maturity Debt Securities (Tables)

12 Months Ended

Dec. 31, 2015

Held-to-maturity Debt Securities

Schedule of maturity value, amortized cost and approximate fair values of securities classified as held to maturity

As of December 31, 2015	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Estimated Fair Value
	(RMB)	(RMB)	(RMB)	(RMB)
Debt Securities:
Borun bonds, due January 29, 2016	107,912,111	1,587,889	—	109,500,000

($)	16,618,226	244,531	—	16,862,757

- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

+ References + Details

Trade Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2015

Trade Accounts Receivable, Net

Schedule of trade accounts receivable

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Trade accounts receivable	531,480,981	515,520,269	79,388,978
Less: Allowance for doubtful accounts	—	—	—

Total trade accounts receivable, net	531,480,981	515,520,269	79,388,978

Inventories (Tables)

12 Months Ended

Dec. 31, 2015

Inventories

Schedule of inventory

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Raw materials	421,800,272	387,319,932	59,646,411
Work-in-process	3,202,142	5,152,109	793,413
Finished goods	71,752,211	46,369,051	7,140,731

Total inventories	496,754,625	438,841,092	67,580,555

Advance to Suppliers (Tables)

12 Months Ended

Dec. 31, 2015

Advance to Suppliers

Schedule of advances to suppliers

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	52,268,983	343,839,565	52,950,530
Others	308,530	1,158,618	178,425

Total advance to suppliers	52,577,513	344,998,183	53,128,955

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, 2015

Other Receivables

Schedule of other receivables

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	64,888,300	52,829,584	8,135,639
Deposit for loan guarantee	5,400,000	2,900,000	446,594
Others	3,304,917	3,302,854	508,631

Total other receivables	73,593,217	59,032,438	9,090,864

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment, Net.

Schedule of property, plant and equipment

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Buildings and improvements	641,622,780		642,901,735		99,005,442
Machinery	923,433,082		926,621,646		142,697,678
Office equipment and furnishing	1,468,593		1,468,593		226,160
Motor vehicles	3,632,489		1,715,958		264,254

Total cost	1,570,156,944		1,572,707,932		242,193,534
Total accumulated depreciation	(497,512,176	)	(611,246,250	)	(94,130,567	)
Construction in progress	23,410,891		26,931,306		4,147,361

Total property, plant, and equipment, net	1,096,055,659		988,392,988		152,210,328

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

12 Months Ended

Dec. 31, 2015

Land use rights, net

Summary of land use rights

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Land use rights at cost	144,726,756		144,726,756		22,287,600
Accumulated amortization	(8,601,396	)	(11,433,974	)	(1,760,807	)

Total land use rights, net	136,125,360		133,292,782		20,526,793

Schedule of future amortization of land use rights

Years Ending December 31,		(RMB) Amount
2016		2,832,573
2017		2,832,573
2018		2,832,573
2019		2,832,573
2020		2,832,573
Thereafter		119,129,917

Total		133,292,782

Intangible Assets, Net (Tables) - Production license

12 Months Ended

Dec. 31, 2015

Intangible assets, net

Summary of intangible assets

	As of December 31,
	2014		2015		2015
	(RMB)		(RMB)		($)
Production license at cost	28,779,986		28,779,986		4,432,054
Accumulated amortization	(22,957,458	)	(26,783,701	)	(4,124,631	)

Total intangible assets, net	5,822,528		1,996,285		307,423

Schedule of future amortization of intangible assets

Years Ending December 31,		(RMB) Amount
2016		1,996,285

Accrued Expenses and Other Payables (Tables)

12 Months Ended

Dec. 31, 2015

Accrued Expenses and Other Payables

Summary of accrued expenses and other payables

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Payroll and welfare payables	17,422,454	19,257,320	2,965,585
VAT and other tax payables	22,288,677	27,340,316	4,210,348
Accrued fixed assets purchases	4,746,821	2,121,712	326,739
Other payables and accruals	2,451,035	4,277,122	658,667
Accrued bonds’ interest expenses (note 15)	39,820,456	27,205,456	4,189,580

Total accrued expenses and other payables	86,729,443	80,201,926	12,350,919

Borrowings (Tables)

12 Months Ended

Dec. 31, 2015

Borrowings

Schedule of borrowings

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Short-term borrowings	901,000,000	753,200,000	115,991,130

Long-term borrowings
Current portion	24,000,000	84,000,000	12,935,814
Non-current portion	84,000,000	—	—

	1,009,000,000	837,200,000	128,926,944

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

	As of December 31,
	2014	2015	2015
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	48,000,000	24,000,000	3,695,947
Agricultural Bank of China (note (ii))	190,000,000	383,200,000	59,011,950
China Construction Bank (note (iii))	300,000,000	230,000,000	35,419,490
Agricultural Development Bank of China (note (iv))	260,000,000	60,000,000	9,239,867
China CITIC Bank (note (v)	170,000,000	140,000,000	21,559,690
Bank of China (note (vi))	15,000,000	—	—
Xingye International Trust Co., Ltd (note (vii))	26,000,000	—	—

Total borrowings	1,009,000,000	837,200,000	128,926,944