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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2016 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, 2016
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	2016
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2015 CNY (¥)
Current assets
Cash	$ 114,650,290	¥ 795,329,065	¥ 495,630,607
Held-to-maturity debt securities (note 4)			107,912,111
Trade accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB nil, ($ nil), as of December 31, 2015 and 2016, respectively (note 5)	59,913,734	415,621,572	515,520,269
Inventories (note 6)	86,871,679	602,628,839	438,841,092
Advance to suppliers (note 7)	35,458,768	245,977,475	344,998,183
Other receivables (note 8)	11,684,563	81,055,814	59,032,438
Prepaid expenses	479,346	3,325,225	3,217,488
Total current assets	309,058,380	2,143,937,990	1,965,152,188
Property, plant and equipment, net (note 9)	126,314,045	876,240,529	988,392,988
Land use rights, net (note 10)	18,806,430	130,460,205	133,292,782
Intangible assets, net (note 11)			1,996,285
Deferred income tax assets (note 16)			1,755,197
Total assets	454,178,855	3,150,638,724	3,090,589,440
Current liabilities
Trade accounts payable	3,408,283	23,643,261	22,292,132
Accrued expenses and other payables (note 12)	6,863,796	47,614,155	80,201,926
Income taxes payable	1,764,792	12,242,364	26,175,329
Short-term borrowings (note 13)	130,484,359	905,170,000	753,200,000
Current portion of long-term borrowings (note 13)			84,000,000
Bonds payable in connection with 2013 Bonds: Outstanding principal amount of RMB320,000,000, bearing fixed annual interest rate of 9.3%, with maturity on April 16, 2016 (less unamortized debt issuance costs based on imputed interest rate of 10.53% of RMB427,908 and RMB nil as of December 31, 2015 and 2016, respectively) (note 14)			319,572,092
Total current liabilities	142,521,230	988,669,780	1,285,441,479
Bonds payable in connection with 2016 Bonds: Outstanding principal amount of RMB300,000,000 ($43,246,360), bearing fixed annual interest rate of 6.5%, with maturity on November 2, 2021 (less unamortized debt issuance costs based on imputed interest rate of 6.75% of RMB nil and RMB6,830,549 ($984,654) as of December 31, 2015 and 2016, respectively) (note 14)	42,261,706	293,169,451	0
Total liabilities	184,782,936	1,281,839,231	1,285,441,479
Commitments and contingencies (note 17)
Shareholders' equity
Ordinary share-par value of RMB0.0068259; 25,725,000 shares authorized, issued and outstanding as of December 31, 2015 and 2016, respectively	25,725	175,596	175,596
Additional paid-in capital	67,483,377	468,132,187	468,132,187
Retained earnings-appropriated (note 2)	22,132,572	153,533,656	147,162,560
Retained earnings-unappropriated	179,835,659	1,247,519,969	1,190,180,107
Accumulated other comprehensive loss	(81,414)	(561,915)	(502,489)
Total shareholders' equity	269,395,919	1,868,799,493	1,805,147,961
Total liabilities and shareholders' equity	$ 454,178,855	¥ 3,150,638,724	¥ 3,090,589,440

CONSOLIDATED BALANCE SHEETS (Parenthetical)	12 Months Ended
CONSOLIDATED BALANCE SHEETS (Parenthetical)	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 CNY (¥) ¥ / shares shares	Dec. 31, 2016 CNY (¥) ¥ / shares shares
Trade accounts receivable, allowance for doubtful accounts	$ 0	¥ 0	¥ 0
Bonds payable-Outstanding principal \| ¥		319,572,092
Bonds payable-Outstanding principal	42,261,706	0	¥ 293,169,451
Amortized issuance cost of bonds (note 15)	$ 96,992	¥ 5,134,902
Ordinary share, par value (in CNY per share) \| ¥ / shares		¥ 0.0068259	¥ 0.0068259
Ordinary share, shares authorized \| shares	25,725,000	25,725,000	25,725,000
Ordinary share, shares issued \| shares	25,725,000	25,725,000	25,725,000
Ordinary share, shares outstanding \| shares	25,725,000	25,725,000	25,725,000
2013 Bonds
Bonds payable-Outstanding principal \| ¥			¥ 320,000,000
Interest rate (as a percent)	9.30%		9.30%
Unamortized debt issuance costs interest rate (as a percentage)		10.53%
Amortized issuance cost of bonds (note 15)	$ 61,685	¥ 5,134,902
Debt issuance costs \| ¥		427,908	¥ 0
2016 Bonds
Bonds payable-Outstanding principal	$ 43,246,360		¥ 300,000,000
Interest rate (as a percent)	6.50%		6.50%
Unamortized debt issuance costs interest rate (as a percentage)	6.75%		6.75%
Amortized issuance cost of bonds (note 15)	$ 35,307	0
Debt issuance costs	$ 984,654	¥ 0	¥ 6,830,549

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME	12 Months Ended
	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2016 CNY (¥) ¥ / shares shares	Dec. 31, 2015 CNY (¥) ¥ / shares shares	Dec. 31, 2014 CNY (¥) ¥ / shares shares
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Revenues	$ 307,435,518	¥ 2,132,680,185	¥ 2,652,043,999	¥ 2,433,820,369
Cost of goods sold	281,189,900	1,950,614,338	2,372,269,654	2,173,381,791
Gross profit	26,245,618	182,065,847	279,774,345	260,438,578
Operating expenses:
Selling	600,361	4,164,703	5,210,530	4,880,386
General and administrative	6,979,061	48,413,749	50,254,277	43,421,610
Impairment losses of property, plant and equipment		0	7,020,788	0
Total operating expenses	7,579,422	52,578,452	62,485,595	48,301,996
Income from operations	18,666,196	129,487,395	217,288,750	212,136,582
Other income (expenses):
Government subsidy			42,630,000
Interest income	582,947	4,043,903	12,694,278	2,707,003
Interest expense	(7,592,549)	(52,669,508)	(100,595,362)	(108,019,874)
Loss on sale of available-for-sale securities				(1,965,765)
Others, net	589,038	4,086,154	(211,468)	756,252
Total other expense, net	(6,420,564)	(44,539,451)	(45,482,552)	(106,522,384)
Income before income tax expenses	12,245,632	84,947,944	171,806,198	105,614,198
Income tax (credit) expenses (note 16)
Current	2,808,388	19,481,789	44,706,746	26,403,549
Deferred	253,020	1,755,197	(1,755,197)
Income tax expenses	3,061,408	21,236,986	42,951,549	26,403,549
Net income attributable to ordinary shareholders	9,184,224	63,710,958	128,854,649	79,210,649
Other comprehensive income (loss), net of tax:
Reclassification adjustment of available-for-sale securities, net of tax				746,137
Foreign currency translation adjustment	(8,567)	(59,426)	(51,245)	(2,831)
Other comprehensive income (loss)	(8,567)	(59,426)	(51,245)	743,306
Total comprehensive income attributable to ordinary shareholders	$ 9,175,657	¥ 63,651,532	¥ 128,803,404	¥ 79,953,955
Earnings per share (note 2):
Basic and Diluted (in CNY or dollars per share) \| (per share)	$ 0.36	¥ 2.48	¥ 5.01	¥ 3.08
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 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, 2013		¥ 175,596		¥ 468,132,187		¥ 126,356,029		¥ 1,002,921,340		¥ (1,194,550)		¥ 1,596,390,602
Beginning Balance (in shares) at Dec. 31, 2013 \| shares	25,725,000	25,725,000
Increase (Decrease) in Stockholders' Equity
Net income for the year								79,210,649				79,210,649
Transfer to statutory reserves						7,921,066		(7,921,066)
Foreign currency translation adjustment										(2,831)		(2,831)
Reclassification adjustment of available-for-sale securities, net of tax										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
Increase (Decrease) in Stockholders' Equity
Net income for the year								128,854,649				128,854,649
Transfer to statutory reserves						12,885,465		(12,885,465)
Foreign currency translation adjustment										(51,245)		(51,245)
Ending Balance at Dec. 31, 2015		¥ 175,596		468,132,187		147,162,560		1,190,180,107		(502,489)		¥ 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
Increase (Decrease) in Stockholders' Equity
Net income for the year								63,710,958			$ 9,184,224	¥ 63,710,958
Transfer to statutory reserves						6,371,096		(6,371,096)
Foreign currency translation adjustment										(59,426)	(8,567)	(59,426)
Ending Balance at Dec. 31, 2016	$ 25,725	¥ 175,596	$ 67,483,377	¥ 468,132,187	$ 22,132,572	¥ 153,533,656	$ 179,835,659	¥ 1,247,519,969	$ (81,414)	¥ (561,915)	$ 269,395,919	¥ 1,868,799,493
Ending Balance (in shares) at Dec. 31, 2016 \| shares	25,725,000	25,725,000									25,725,000	25,725,000

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - 12 months ended Dec. 31, 2014	USD ($)	CNY (¥)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Reclassification adjustment of 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, 2016 USD ($)	Dec. 31, 2016 CNY (¥)	Dec. 31, 2015 CNY (¥)	Dec. 31, 2014 CNY (¥)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Net income	$ 9,184,224	¥ 63,710,958	¥ 128,854,649	¥ 79,210,649
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of available-for-sale securities				1,965,765
Interest income on held-to-maturity debt securities	(228,902)	(1,587,889)	(9,191,349)
Impairment loss of property, plant and equipment		0	7,020,788	0
(Gain)/loss on disposal of property, plant and equipment	(539,655)	(3,743,590)	242,575	(552,865)
Deferred income taxes	253,020	1,755,197	(1,755,197)
Depreciation	16,685,146	115,744,856	119,717,245	118,209,623
Amortization expense	696,102	4,828,862	6,658,821	6,658,690
Amortized debt issuance costs associated to the bonds	96,992	672,831	5,134,902	5,134,902
Changes in operating assets and liabilities:
Trade accounts receivable	14,400,850	99,898,697	15,960,712	(173,017,513)
Inventories	(23,610,746)	(163,787,747)	57,913,533	(143,548,505)
Prepaid expenses and other current assets	12,637,860	87,668,833	(276,206,763)	208,044,828
Trade accounts payable	194,771	1,351,129	5,236,453	(12,216,553)
Accrued expenses and other payables	(4,706,243)	(32,647,208)	(8,712,481)	(16,160,797)
Income tax payable	(2,008,500)	(13,932,965)	19,969,814	(2,913,743)
Net cash provided by operating activities	23,054,919	159,931,964	70,843,702	70,814,481
Cash flows from investing activities:
Restricted bank deposits			62,370,000	(20,329,333)
Purchases of property, plant and equipment and construction in progress	(517,861)	(3,592,397)	(22,453,760)	(74,569,901)
Purchases of held-to-maturity debt securities			(98,720,762)
Proceeds from disposal of property, plant and equipment	539,655	3,743,590	5,012,504	634,000
Proceeds from sale of available-for-sale securities				15,812,953
Net cash provided by/ (used in) investing activities	21,794	151,193	(53,792,018)	(78,452,281)
Cash flows from financing activities:
Proceeds from borrowings	138,657,921	961,870,000	793,200,000	1,168,000,000
Repayments of borrowings	(128,859,738)	(893,900,000)	(965,000,000)	(851,200,000)
Settlement of bonds	(31,898,405)	(221,279,238)	(180,000,000)
Proceeds from the issuance of bonds, net of debt issuance costs paid	42,226,399	292,924,529
Net cash provided by/(used in) financing activities	20,126,177	139,615,291	(351,800,000)	316,800,000
Effect of foreign currency exchange translation	1	10	(51,245)	(2,831)
Net increase/ (decrease) in cash	43,202,891	299,698,458	(334,799,561)	309,159,369
Cash-beginning of year	71,447,399	495,630,607	830,430,168	521,270,799
Cash-end of year	114,650,290	795,329,065	495,630,607	830,430,168
Supplemental disclosure of cash flow information:
Cash paid for income taxes	4,816,888	33,414,753	24,736,935	29,317,293
Cash paid for interest	11,039,981	76,584,346	65,676,931	102,886,599
Non-cash investing activities:
Accrued fixed asset purchases			¥ 2,121,712	¥ 4,746,821
Offsetting other payables to the debt securities issuer for the principal amounts of held-to-maturity debt securities to be received upon matured	14,231,045	98,720,762
Non-cash financing activities:
Offsetting other receivables from the bonds holder upon the settlement of bonds	$ 14,231,045	¥ 98,720,762

Description of Business	12 Months Ended
Description of Business	Dec. 31, 2016
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”), Shandong Borun Industrial Co., Ltd. (“Shandong Borun”) and Daqing Borun Biotechnology Co., Ltd (“Daqing Borun”). New Borun, Golden Direction, China High, 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. Weifang Great Chemical, Inc. (“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. During the year ended December 31, 2016, the Company has disposed all long-lived assets of foam insulation business segment and exited the business accordingly. The income (loss) before income tax expenses of foam insulation business segment for the years ended December 31, 2014, 2015 and 2016 were RMB1,383,439, RMB(6,891,333) and RMB810,840 ($116,886), respectively, which represented 1%, (4%) and 1% to the Company’s consolidated income before income tax expenses for the years ended December 31, 2014, 2015 and 2016, respectively. The disposal of foam insulation business does not represent a strategic shift that had a major effect on our operations and financial results. As such, the disposal of long-lived assets of foam insulation business segment have not been reported in discontinued operations as required by FASB ASC Topic 205-20, “Presentation of Financial Statements—Discontinued Operations” in the consolidated financial statements for the periods presented. 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”) that are widely used in a broad range of industries.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

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, 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 6.9370 to one Dollar ($), which is published by the People’s Bank of China on December 31, 2016. 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. All available-for-sale securities were sold during the year ended December 31, 2014 and recorded a loss of RMB1,965,765.

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. All held-to-maturity debt securities matured and settled during the year ended December 31, 2016.

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. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. 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 in the consolidated statements of income and comprehensive income.

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 2016 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. 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. The intangible assets have been fully amortized during the year ended December 31, 2016.

Valuation 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 records impairment losses of RMB nil, RMB7,020,788 and RMB nil ($ nil) for the years ended December 31, 2014, 2015 and 2016, respectively. The relevant impaired property, plant and equipment, net of RMB7,020,788 ($1,012,078) was disposed during the year ended December 31, 2016, the net proceeds from the disposal was RMB3,743,590 ($539,655).

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, 2015 and 2016, the trade accounts receivable included the output VAT charged to customers are RMB66,205,852 and RMB53,388,567 ($7,696,204), 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, 2015 and 2016, VAT recoverable consisted of input VAT paid for purchase of corn but not yet validated by the PRC Taxing Authority of RMB50,059,386 and RMB74,986,737 ($10,809,678), respectively.

According to Cai Kuai [2013] No. 36, sales taxes and surcharges has been replaced with value-added taxes effective from May 1, 2016.

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.

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, 2014, 2015 and 2016.

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2014, 2015 and 2016.

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, 2014, 2015 and 2016.

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 RMB9,808,692, RMB10,369,297 and RMB10,016,774 ($1,443,963) for the years ended December 31, 2014, 2015 and 2016, 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. For the years ended December 31, 2014, 2015 and 2016, no interests were capitalized as borrowing cost in property, plant and equipment.

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, 2015 and 2016, 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, 2014, 2015 and 2016, 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) or any reclassification adjustment of available-for-sale securities.

Appropriated Retained Earnings

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

Reserves include statutory surplus reserves and discretionary reserves. Statutory surplus reserves can be used to offset the accumulated losses, if any, and may be converted into capital in proportion to the existing equity interests of shareholders, provided that the balance after such conversion is not less than 25% of the registered capital. The appropriation to the statutory surplus reserves must not be less than 10% of net profit after taxation. Such appropriation may cease to apply if the balance of the fund is equal to 50% of the entity’s registered capital. The annual 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, 2014, 2015 and 2016, the Company made the transfers to this reserve fund in the amounts of RMB7,921,066, RMB12,885,465 and RMB6,371,096 ($918,422), 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, 2014, 2015 and 2016.

Earnings Per Share

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

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

	Year Ended December 31,
	2014	2015	2016	2016
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,210,649	128,854,649	63,710,958	9,184,224


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	3.08	5.01	2.48	0.36

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, 2015 and 2016, 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 chemical products CPE 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, 2014, 2015 and 2016.

Interest Rate Risk

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

As of December 31, 2016, all balance of borrowing are short-term borrowings which will be matured at various dates within the year ending December 31, 2017 and do not expose the Company to interest rate risk. The Company’s interest rate risk arises primarily from bonds. The Company’s bonds were issued at fixed rates on November 2, 2016 (the “2016 Bonds”) and expose the Company to fair value and interest rate risk which will be matured at fiscal year 2021.

The interest rates profile and terms of repayment of the Company’s bonds payable at the end of the reporting periods are disclosed in note 14 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 January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which removes Step 2 from the goodwill impairment test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. Public business entity that is a U.S. Securities and Exchange Commission filer should adopt the amendments in this ASU for its annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact of the adoption of ASU 2017-04 on our consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of the adoption of ASU 2016-18 on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact of the adoption of ASU 2016-15 on our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which simplifies several aspects of the accounting for employee share-based payment transactions. The areas for simplification in ASU 2016-09 include the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-09 to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued 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 evaluating the impact of the adoption of ASU 2016-02 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 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 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 2015-11 to have a material impact on our consolidated financial statements.

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. Further to ASU 2014-09 and ASU 2015-14, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”) in March 2016, ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”) in April 2016, ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), respectively. The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, including indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-10 clarifies guideline related to identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. The updates in ASU 2016-10 include targeted improvements based on input the FASB received from the Transition Resource Group for Revenue Recognition and other stakeholders. It seeks to proactively address areas in which diversity in practice potentially could arise, as well as to reduce the cost and complexity of applying certain aspects of the guidance both at implementation and on an ongoing basis. ASU 2016-12 addresses narrow-scope improvements to the guidance on collectability, non-cash consideration, and completed contracts at transition. Additionally, the amendments in this ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The amendments in ASU 2016-20 represents changes to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The effective date and transition requirements for ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 are the same as ASU 2014-09. We are currently evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 on our consolidated financial statements.

Reclassification of Accounts

The amendments in ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), simplifies presentation of debt issuance costs and requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a directly deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and should be applied on a retrospective basis.

Certain prior years’ amounts and disclosures relating to the debt issuance costs associated to the Bonds have been reclassified to conform to current year presentations after ASU 2015-03 was effective in fiscal year 2016. There was no change to previously reported shareholders’ equity or net income attributable to ordinary shareholders. The following is the summary of major prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line items:

Major reclassification of accounts

Effect of the changes on the balance sheet as of December 31, 2015 and the
statements of income for the years ended December 31, 2014 and 2015:

Debt issuance costs related to the Bonds reported in the balance sheet as a direct deduction from the face amount of the Bonds (FASB ASC Topic 835-30-45-1A)

Unamortized debt issuance costs of RMB427,908 associated to 2013 Bonds which were previously recorded as prepaid expenses in current assets, are net off with the Bonds payable in connection with 2013 Bonds as of December 31, 2015. Bonds payable in connection with 2013 Bonds as of December 31, 2015 was changed to RMB319,572,092 accordingly.

Relevant disclosures about unamortized debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

Amortization of debt issuance costs shall be reported as interest expense (FASB ASC Topic 835-30-45-3)

The amortization of debt issuance costs of the Bonds were previously presented as a separated line item in the statements of income. The amortized debt issuance costs of the Bonds of RMB5,134,902 and RMB5,134,902 for the years ended December 31, 2014 and 2015, respectively, were currently included in the interest expense in the statements of income for the periods presented.

Relevant disclosures and presentation about the amortization of debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

Fair Value Measurements

12 Months Ended

Dec. 31, 2016

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, 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 2016.

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. 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

Held-to-maturity Debt Securities	12 Months Ended
Held-to-maturity Debt Securities	Dec. 31, 2016
Held-to-maturity Debt Securities
Held-to-maturity Debt Securities	4. 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 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). Upon the maturity of held-to-maturity debt securities on January 29, 2016, the principal amounts of held-to-maturity debt securities of RMB98,720,762 ($14,231,045) to be received have been offset with other payables of Shandong Borun. The interest income from the Borun Bonds for the years ended December 31, 2014, 2015 and 2016 were RMB nil, RMB9,191,349 and RMB1,587,889 ($228,902), respectively.

- Definition

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

+ References + Details

Trade Accounts Receivable, Net

12 Months Ended

Dec. 31, 2016

Trade Accounts Receivable, Net

Trade Accounts Receivable, Net

5. Trade Accounts Receivable, Net

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

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Trade accounts receivable	515,520,269	415,621,572	59,913,734
Less: Allowance for doubtful accounts	—	—	—

Total trade accounts receivable, net	515,520,269	415,621,572	59,913,734

As of December 31, 2015 and 2016, no trade accounts receivables were pledged as collateral for borrowings from financial institutions.

- Definition

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

+ References + Details

Inventories

12 Months Ended

Dec. 31, 2016

Inventories

Inventories

6. Inventories

Inventories consisted of the following:

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Raw materials	387,319,932	567,751,699	81,843,981
Work-in-process	5,152,109	2,717,584	391,752
Finished goods	46,369,051	32,159,556	4,635,946

Total inventories	438,841,092	602,628,839	86,871,679

The Company did not set up any inventory reserve as of December 31, 2015 and 2016. As of December 31, 2015 and 2016, no raw materials were pledged as collateral for borrowings from financial institutions.

Advance to Suppliers

12 Months Ended

Dec. 31, 2016

Advance to Suppliers

Advance to Suppliers

7. Advance to Suppliers

Advances to suppliers consisted of the following:

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	343,839,565	245,394,904	35,374,788
Others	1,158,618	582,571	83,980

Total advance to suppliers	344,998,183	245,977,475	35,458,768

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, 2016

Other Receivables

Other Receivables

8. Other Receivables

Other receivables consisted of the following:

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	52,829,584	74,986,737	10,809,678
Deposit for loan guarantee	2,900,000	2,900,000	418,048
Others	3,302,854	3,169,077	456,837

Total other receivables	59,032,438	81,055,814	11,684,563

Note (i): As of December 31, 2015 and 2016, VAT recoverable mainly consisted of input VAT paid for purchase of corns but not yet validated by the PRC Taxing Authority of RMB50,059,386 and RMB74,986,737 ($10,809,678), respectively.

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

9. Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following:

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Buildings and improvements	642,901,735		642,901,735		92,677,200
Machinery	926,621,646		924,995,666		133,342,319
Office equipment and furnishing	1,468,593		1,468,593		211,704
Motor vehicles	1,715,958		1,715,958		247,363

Total cost	1,572,707,932		1,571,081,952		226,478,586
Total accumulated depreciation	(611,246,250	)	(725,365,126	)	(104,564,671	)
Construction in progress	26,931,306		30,523,703		4,400,130

Total property, plant, and equipment, net	988,392,988		876,240,529		126,314,045

Certain buildings with an aggregate carrying value of RMB89,567,625 and RMB115,614,217 ($16,666,314), respectively, and certain equipment with an aggregate carrying value of RMB133,059,754 and RMB152,421,561 ($21,972,259), respectively, were pledged as collateral for borrowings from the financial institutions as of December 31, 2015 and 2016. For the years ended December 31, 2014, 2015 and 2016, no interests were capitalized as borrowing cost in property, plant and equipment.

The depreciation expenses for the years ended December 31, 2014, 2015 and 2016 were RMB118,209,623, RMB119,717,245 and RMB 115,744,856 ($16, 685,146), 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, 2016

Land use rights

Land Use Rights, Net

Land Use Rights, Net

10. Land Use Rights, Net

Land use rights consisted of the following:

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Land use rights at cost	144,726,756		144,726,756		20,863,018
Accumulated amortization	(11,433,974	)	(14,266,551	)	(2,056,588	)

Total land use rights, net	133,292,782		130,460,205		18,806,430

As of December 31, 2015 and 2016, certain land use rights with an aggregate carrying value of RMB5,581,879 and RMB8,904,935 ($1,283,686), respectively, were pledged as collateral for borrowings from the financial institutions.

The amortization expenses for the years ended December 31, 2014, 2015 and 2016 were RMB2,832,447, RMB2,832,578 and RMB2,832,577 ($408,329), respectively. No provision for impairment loss has been charged for the years ended December 31, 2014, 2015 and 2016.

Future amortization of land use rights is as follows:

Years Ending December 31,		(RMB) Amount
2017		2,832,573
2018		2,832,573
2019		2,832,573
2020		2,832,573
2021		2,832,573
Thereafter		116,297,340

Total		130,460,205

Intangible Assets, Net

12 Months Ended

Dec. 31, 2016

Production license

Intangible Assets, Net

Intangible Assets, Net

11. Intangible Assets, Net

Intangible assets consisted of the following:

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Production license at cost	28,779,986		28,779,986		4,148,765
Accumulated amortization	(26,783,701	)	(28,779,986	)	(4,148,765	)

Total intangible assets, net	1,996,285		—		—

The amortization expenses for the years ended December 31, 2014, 2015 and 2016 were RMB3,826,243, RMB3,826,243 and RMB 1,996,285 ($287,773), respectively. No provision for impairment loss has been charged for the years ended December 31, 2014, 2015 and 2016.

Accrued Expenses and Other Payables

12 Months Ended

Dec. 31, 2016

Accrued Expenses and Other Payables

Accrued Expenses and Other Payables

12. Accrued Expenses and Other Payables

Accrued expenses and other payables consisted of the following:

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Payroll and welfare payables	19,257,320	19,056,799	2,747,124
VAT and other tax payables	27,340,316	25,633,805	3,695,229
Accrued fixed assets purchases	2,121,712	—	—
Other payables and accruals	4,277,122	2,923,551	421,443
Accrued bonds’ interest expenses (note 14)	27,205,456	—	—

Total accrued expenses and other payables	80,201,926	47,614,155	6,863,796

Borrowings

12 Months Ended

Dec. 31, 2016

Borrowings

Borrowings

13. Borrowings

Borrowings consisted of the following:

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Short-term borrowings	753,200,000	905,170,000	130,484,359

Long-term borrowings
Current portion	84,000,000	—	—
Non-current portion	—	—	—

	837,200,000	905,170,000	130,484,359

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,
	2015	2016	2016
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	24,000,000	12,000,000	1,729,854
Agricultural Bank of China (note (ii))	383,200,000	353,200,000	50,915,381
China Construction Bank (note (iii))	230,000,000	250,000,000	36,038,633
Agricultural Development Bank of China (note (iv))	60,000,000	50,000,000	7,207,727
China CITIC Bank (note (v))	140,000,000	139,970,000	20,177,311
Daqing Rural Commercial Bank (note (vi))	—	49,000,000	7,063,572
Longjiang Bank (note (vii))	—	51,000,000	7,351,881

Total borrowings	837,200,000	905,170,000	130,484,359

Note (i): During the year ended December 31, 2016, one short-term loan of RMB 12,000,000 ($1,729,854) obtained from the Industrial & Commercial Bank of China (the “ICBC”) was still outstanding:

A short-term loan of RMB12,000,000 ($1,729,854)—The interest bearing at a fixed 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 withdrawing date (5.39% per annum as of the December 31, 2016). As of December 31, 2016, no prepayment was made and RMB12,000,000 ($1,729,854) was still outstanding which will be repayable on October 11, 2017. The borrowing under the loan agreement is guaranteed by a third party company.

During the year ended December 31, 2015, one long-term loan of RMB24,000,000 obtained from the ICBC was still outstanding:

A long-term loan of RMB24,000,000—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 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 had been repaid, and RMB24,000,000 was outstanding. This loan has been fully settled during 2016.

Note (ii): During the year ended December 31, 2016, thirteen short-term loans of RMB353,200,000 ($50,915,381) were obtained from the Agricultural Bank of China (the “ABC”) was outstanding:

Three short-term loans of RMB83,200,000 ($11,993,657)—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% (4.57% per annum as of December 31, 2016). As of December 31, 2016, no prepayment was made, and RMB83,200,000 ($11,993,657) was still outstanding, of which RMB43,200,000 will be repayable on January 12, 2017 and RMB40,000,000 will be repayable on March 10, 2017. All borrowings under the 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, 2016.

Two short-term loans of RMB30,000,000 ($4,324,636)—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 (4.35% per annum as of December 31, 2016). As of December 31, 2016, no prepayment was made, and RMB30,000,000 ($4,324,636) was still outstanding, of which RMB20,000,000 will be repayable on June 30, 2017 and RMB10,000,000 will be repayable on July 7, 2017. Borrowings under the loan agreements are guaranteed by a third party company. 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, 2016.

Seven short-term loans of RMB190,000,000 ($27,389,361)—The interest bearing at a fixed rate was thereon based on the one year Loan Prime Rate(“LPR”) on the previous working day before withdrawing date rise 0.05% (4.35% per annum as of December 31, 2016). As of December 31, 2016, no prepayment was made, and RMB190,000,000 ($27,389,361) was still outstanding, of which RMB20,000,000 will be repayable on July 31, 2017, RMB20,000,000 will be repayable on September 11, 2017, RMB40,000,000 will be repayable on September 20, 2017, RMB30,000,000 will be repayable on October 10, 2017, RMB30,000,000 will be repayable on October 11, 2017, RMB20,000,000 will be repayable on October 13, 2017 and RMB30,000,000 will be repayable on November 3, 2017. All borrowings under the 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 80% of its total net assets; and net operating cash flow shall not be negative for two consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2016.

One short-term loan of RMB50,000,000 ($7,207,727)—The interest bearing at a fixed rate was thereon based on the one year LPR on the previous working day before withdrawing date rise 0.05% (4.35% per annum as of December 31, 2016). As of December 31, 2016, RMB50,000,000 ($7,207,727) was still outstanding and will be repayable on November 14, 2017. The borrowing under the loan agreement is guaranteed by a third party company. The loan contains 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 two consecutive years. The Company was in compliance with the above financial covenants as of December 31, 2016.

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

Two short-term loans of RMB70,000,000—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% (5.62% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB70,000,000 was outstanding, of which RMB40,000,000 was repaid on March 4, 2016 and RMB30,000,000 was repaid on April 12, 2016. All borrowings under these loan agreements were 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—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 was outstanding, of which RMB23,200,000 was repaid on January 8, 2016 and RMB20,000,000 was repaid on January 15, 2016. All borrowings under these loan agreements were 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—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 was outstanding, of which RMB30,000,000 was repaid on July 1, 2016 and a loan of RMB20,000,000 was repaid on August 1, 2016. All borrowings under these loan agreements were 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—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 was outstanding, of which RMB20,000,000 was repaid on September 12, 2016, RMB40,000,000 was repaid on September 21, 2016, and three loans of RMB30,000,000, RMB 20,000,000 and RMB30,000,000 were repaid on October 11, October 13 and October 12, 2016 respectively. All borrowings under these loan agreements were 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 loans of RMB80,000,000—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% (4.57% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB80,000,000 was outstanding of which RMB30,000,000 was repaid on November 3, 2016, RMB50,000,000 was repaid on November 14, 2016 respectively. All borrowings under the loan agreement were 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.

Note (iii): During the year ended December 31, 2016, the China Construction Bank (the “CCB”) granted the Company ten loans of RMB320,000,000 ($46,129,451), of which RMB70,000,000 ($10,090,818) has been repaid during 2016 and the outstanding balance as of December 31, 2016 was RMB250,000,000 ($36,038,633). Details are as follow:

Nine short-term loans of RMB270,000,000 ($38,921,724)—The interest bearing at a fixed rate was thereon based on LPR plus 92 basis point (5.22% per annum as of December 31, 2016). As of December 31, 2016, an amount of RMB70,000,000 has been repaid during 2016 and RMB200,000,000 ($28,830,906) was still outstanding, of which RMB20,000,000 will be repayable on January 22, 2017, RMB40,000,000 will be repayable on January 29, 2017, RMB20,000,000 will be repayable on March 5, 2017, RMB25,000,000 will be repayable on March 14, 2017, RMB25,000,000 will be repayable on March 21, 2017, RMB25,000,000 will be repayable on April 15, 2017, RMB25,000,000 will be repayable on April 22, 2017 and RMB20,000,000 will be repayable on May 12, 2017. All 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, the credit rating shall not be lower than 10; 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 RMB367,930,734; 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, 2016.

One short-term loan of RMB50,000,000 ($7,207,727)—the interest bearing at a fixed rate was thereon based on LPR plus 92 basis point (4.785% per annum as of December 31, 2016). As of December 31, 2016, an amount of RMB50,000,000 ($7,207,727) was still outstanding and will be repayable on November 2, 2017. The borrowing under the loan agreement is guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and his three family members simultaneously. The loan contains the following financial covenants: at any time during the loan period, the credit rating shall not be lower than 10; 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 RMB367,930,734; 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, 2016.

All the short-term loans of CCB stated above were pledged by property, plant and equipment and land use rights of the Company with total carrying value of RMB183,987,360 ($26,522,612).

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

Two short-term loans of RMB100,000,000—the interest thereon bear at a fixed rate that is based on LPR plus 122 basis point (6.72% per annum as of December 31, 2015). As of December 31, 2015, an amount of RMB100,000,000 was outstanding and RMB50,000,000 was repaid on January 16, 2016, RMB50,000,000 was repaid on February 9, 2016. Borrowings under these loan agreements were 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, 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—the interest thereon bear at a fixed rate that is based on LPR 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 was outstanding and RMB50,000,000 was repaid on March 17, 2016, RMB50,000,000 was repaid on April 21, 2016. Borrowings under these loan agreements were 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, 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 LPR 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 was repaid during 2016. Borrowing under the loan agreement was secured by equipments of Daqing Borun with total carrying values of RMB116,370,518 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; 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—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 was outstanding, which was repaid on December 30, 2016. Borrowing under the loan agreement was secured by buildings and land of Daqing Borun with total carrying values of RMB89,567,625 and RMB5,581,879, 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, 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.

Note (iv): During the year ended December 31, 2016, the Agricultural Development Bank of China (the “ADB”) granted the Company three loans of RMB86,700,000 ($12,498,198), of which RMB36,700,000 ($5,290,471) has been repaid during 2016 and the outstanding balance as of December 31, 2016 was RMB50,000,000 ($7,207,727). Details are as follow:

A short-term loan of RMB6,700,000 ($965,835)—The interest bore at a fixed rate of 4.35% per annum. As of December 31, 2016, the amount of RMB6,700,000 ($965,835) has been repaid during 2016 and no balance was outstanding. Borrowing under the loan agreement is guaranteed by the Company’s CEO and his family member and pledged by property, plant and equipment of the Company. The pledge has been released along with the settlement of the loan.

A short-term loan of RMB30,000,000 ($4,324,636)—The interest bore at a fixed rate of 4.35% per annum. As of December 31, 2016, the amount of RMB30,000,000 ($4,324,636) has been repaid during 2016 and no balance was outstanding. Borrowing under the loan agreement is guaranteed by the Company’s CEO and his family member and pledged by property, plant and equipment of the Company. The pledge has been released along with the settlement of the loan. 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, 2016.

A short-term loan of RMB50,000,000 ($7,207,727)—The interest bore at a fixed rate of 4.35% per annum. As of December 31, 2016, RMB50,000,000 ($7,207,727) was still outstanding and will be repayable on September 29, 2017. The loan is granted under the scope of the Corn Acquisition Loan Guarantee Fund set up by the government of Heilongjiang Province. RMB15,000,000 was paid as a deposit of the loan has been paid subsequently on January 1, 2017.

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

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. The interest thereon bear at a fixed rate of 6.33% per annum. As of December 31, 2015, an amount of RMB60,000,000 was outstanding and was repaid on November 10, 2016. Borrowing under the loan agreement was 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. 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.

Note (v): During the year ended December 31, 2016, China CITIC Bank granted the Company five loans of RMB139,970,000 ($20,177,311), which are including:

Five short-term loans of RMB139,970,000 ($20,177,311)—The interest bearing at a fixed rate was thereon based on the prime rates on the withdrawing date plus 135.5 basis point (5.655% per annum as of December 31, 2016). As of December 31, 2016, an amount of RMB139,970,000 ($20,177,311) was still outstanding, of which RMB39,980,000 will be repayable on September 25, 2017, RMB49,000,000 will be repayable on September 26, 2017, RMB19,990,000 will be repayable on September 28, 2017, RMB15,000,000 will be repayable on October 23, 2017 and RMB16,000,000 will be repayable on October 25, 2017. All borrowings under these loan agreements are guaranteed by the subsidiary Shandong Borun, the Company’s CEO, and a third party company simultaneously.

During the year ended December 31, 2015, China CITIC Bank granted the Company six loans of RMB140,000,000, which are including:

A short-term loans of RMB20,000,000—the interest bearing at a fixed rate is thereon based on the prime 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 was outstanding, which was repaid 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—the interest bearing at a fixed rate is thereon based on the prime 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 was outstanding, of which RMB49,000,000 and RMB20,000,000 were repaid on August 4 and August 13, 2016 respectively. Borrowings under these loan agreements were guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

Two short-term loan of RMB35,000,000—the interest bearing at a fixed rate is thereon based on the prime 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 was outstanding, of which RMB20,000,000 and RMB15,000,000 were repaid September 24 and October 21, 2016 respectively. Borrowings under these loan agreements were guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

A short-term loan of RMB16,000,000—the interest bearing at a fixed rate is thereon based on the prime 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 was outstanding, which was repaid on October 26, 2016. Borrowing under these loan agreements was guaranteed by the subsidiary Shandong Borun and the Company’s CEO simultaneously.

Note (vi): During the year ended December 31, 2016, the Daqing Rural Commercial Bank (the “DRCB”) granted the Company a short-term loan of RMB49,000,000($7,063,572):

A short-term loan of RMB49,000,000 ($7,063,572)—The interest bore at a fixed rate of 3.50% per annum. As of December 31, 2016, an amount of RMB49,000,000 ($7,063,572) was still outstanding, of which RMB14,700,000 will be repayable on July 19, 2017, RMB14,700,000 will be repayable on August 19, 2017 and RMB19,600,000 will be repayable on September 19, 2017. The loan is guaranteed by a third party guarantor, to which the Company pledged its property, plant and equipment and land use rights with total carrying values of RMB92,953,353 ($13,399,647).

Note(vii): During the year ended December 31, 2016, the Longjiang Bank granted the Company a short-term loan of RMB51,000,000($7,351,881) :

A short-term loan of RMB51,000,000 ($7,351,881)—The interest bore at a fixed rate of 5.655% per annum. As of December 31, 2016, an amount of RMB51,000,000 ($7,351,881) was still outstanding, of which RMB15,000,000 will be repayable on September 30, 2017, RMB15,000,000 will be repayable on October 30, 2017, and RMB21,000,000 will be repayable on November 30, 2017. The borrowing under the loan agreement is guaranteed by our CEO and his family member, and a third party guarantor, to which the Company pledged its property, plant and equipment and land use rights with total carrying values of RMB92,953,353 ($13,399,647).

The weighted average interest rates on the bank loans for the years ended December 31, 2014, 2015 and 2016 were 6.43%, 5.77% and 4.83% respectively. The interest expenses on the bank loans incurred for the years ended December 31, 2014, 2015 and 2016 were RMB56,384,972, RMB58,997,387 and RMB46,203,786($6,660,485), 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
Bonds Payable	Dec. 31, 2016
Bonds Payable
Bonds Payable	14. Bonds Payable Bonds issued in 2013 (“2013 Bonds”) 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 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 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. During the year ended December 31, 2013, Shandong Borun has issued the registered private placement bonds (the “2013 Bonds”) of RMB500,000,000. The proceeds from the issuance of the 2013 Bonds were used in the purpose for the Company’s working capital and capital expenditures. The 2013 Bonds were issued at face value of RMB100 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 2013 Bonds, Shandong Borun raised interest rate from 9.3% to 9.5% per annum, and the holders of the 2013 Bonds have sold back total of RMB180,000,000 ($25,947,816) of the 2013 Bonds at face value during the year ended December 31, 2015. RMB320,000,000 was outstanding as of December 31, 2015 and the 2013 Bonds were fully settled during the year ended December 31, 2016. The imputed interest rate in connection with the 2013 Bonds was 10.53%. Interests of the 2013 Bonds charged to the consolidated statement of income for the year ended December 31, 2014, 2015 and 2016 was RMB46,500,000, RMB33,885,000 and RMB3,175,144 ($457,711), respectively. Debt issuance costs associated to the 2013 Bonds represented cost incurred for professional services from the sponsors and other various parties. The amortized debt issuance costs of the 2013 Bonds for the year ended December 31, 2014, 2015 and 2016 were RMB5,134,902, RMB5,134,902 and RMB427,908 ($61,685), respectively. The associated cost was fully amortized during the year ended December 31, 2016. Bonds issued in 2016 (“2016 Bonds”) On November 2, 2016, the Company’s subsidiary, Shandong Borun has issued a private placement bonds (the “2016 Bonds”) with an principal amount of RMB300,000,000 ($43,246,360) that registered with the Shanghai Stock Exchange. The proceeds from the issuance of the 2016 Bonds were used in the purpose for the Company’s working capital and capital expenditures. The 2016 Bonds were issued at face value of RMB100 ($14) each, bear a fixed annual interest rate of 6.5%, with maturity on November 2, 2021, and RMB 100,000,000 ($14,415,453) would be repaid at the end of each of the third, fourth and fifth year life of the 2016 Bonds. The imputed interest rate in connection with the 2016 Bonds was 6.75%. Interests of the 2016 Bonds charged to the consolidated statement of income for the year ended December 31, 2014, 2015 and 2016 was RMB nil, RMB nil and RMB2,865,835 ($413,123), respectively. The Company has prepaid interests of RMB3,000,000 ($432,464) at the time of the issuance of the 2016 Bonds on November 2, 2016. As of December 31, 2015 and 2016, the prepaid interests of RMB nil and RMB134,165 ($19,341), respectively, was outstanding and recorded as prepaid expense under current assets. Debt issuance costs associated to the 2016 Bonds of RMB7,075,472 ($1,019,961) represented cost incurred for professional services from the sponsors and other various parties, which was net of “Bonds payable in connection with 2016 Bonds” in the balance sheets. The amortized debt issuance costs of the 2016 Bonds based on imputed interest rate of 6.75% for the years ended December 31, 2014, 2015 and 2016 were RMB nil, RMB nil and RMB244,923 ($35,307), respectively, which was recorded as “Interest expense” in the statements of income and comprehensive income. As of December 31, 2015 and 2016, unamortized debt issuance costs associated to the 2016 Bonds was RMB nil and RMB6,830,549 ($984,654), respectively. As of December 31, 2015 and 2016, non-current bonds payable less unamortized debt issuance costs was RMB nil and RMB293,169,451 ($42,261,706), respectively.

Restricted Net Assets	12 Months Ended
Restricted Net Assets	Dec. 31, 2016
Restricted Net Assets
Restricted Net Assets	15. 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 RMB1,148,685,884 and RMB1,155,056,979 ($166,506,700) as of December 31, 2015 and 2016, respectively.

Income Tax Expenses

12 Months Ended

Dec. 31, 2016

Income Tax Expenses

Income Tax Expenses

16. 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,
	2014	2015		2016	2016
	(RMB)	(RMB)		(RMB)	($)
Current	26,403,549	44,706,746		19,481,789	2,808,388
Deferred	—	(1,755,197	)	1,755,197	253,020

Income tax expenses	26,403,549	42,951,549		21,236,986	3,061,408

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

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Non-current deferred tax assets:
Impairment of property, plant and equipment	1,755,197	—	—

Valuation allowances	—	—	—

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

Deferred tax asset arising from the impairment of property, plant and equipment of RMB1,755,197 was released during the year ended December 31, 2016, the related impaired assets were disposed during the year. 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,
	2014		2015		2016
Statutory rate	25.00	%	25.00	%	25.00	%
Expenses not deductible	—	%	—	%	—	%

Effective tax rate	25.00	%	25.00	%	25.00	%

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2016
Commitments and Contingencies
Commitments and Contingencies	17. Commitments and Contingencies Commitments As of December 31, 2015 and 2016, capital commitment for purchase of property, plant and equipment were RMB5,213,968 and RMB nil, respectively. The Company did not have any significant lease commitment as of December 31, 2015 and 2016. Guarantees and Indemnities The Company was a party to enter into contracts to indemnify third parties for certain liabilities, and as of December 31, 2015 and 2016, the Company guaranteed the third parties’ borrowings from the financial institutions amounting to RMB425,000,000 and RMB 298,000,000 ($42,958,051), 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, 2016

Segment Information

Segment Information

18. 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, 2014, 2015 and 2016 are as follows:

	Year ended December 31,
	2014				2015				2016
	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	2,349,479,253	—	106,563,659		2,519,435,448	—	178,935,982		2,034,302,643	—	79,446,037
CPE	76,990,402	—	(2,332,900	)	129,753,632	—	(238,451	)	97,439,316	—	4,691,067
Foam insulation	7,350,714	—	1,383,439		2,854,919	—	(6,891,333	)	938,226	—	810,840

Segment total	2,433,820,369		105,614,198		2,652,043,999		171,806,198		2,132,680,185		84,947,944

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

Consolidated totals:
Revenues	2,433,820,369	—			2,652,043,999	—			2,132,680,185	—

Revenues ($)									307,435,518	—


Income before income taxes			105,614,198				171,806,198				84,947,944

Income before income taxes ($)											12,245,632

	Year ended December 31,
	2014			2015				2016
	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	2,707,003	108,019,874	26,057,689	12,694,278	100,595,362	43,474,307		4,043,903	52,669,508	17,524,049
CPE	—	—	—	—	—	1,232,439		—	—	3,520,543
Foam insulation	—	—	345,860	—	—	(1,755,197	)	—	—	192,394

Consolidated total	2,707,003	108,019,874	26,403,549	12,694,278	100,595,362	42,951,549		4,043,903	52,669,508	21,236,986


Consolidated total ($)								582,947	7,592,549	3,061, 408

	As of and Year ended December 31,
	2014			2015			2016
	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	2,939,857,073	30,906,718	112,663,549	2,761,400,124	15,225,406	111,309,394	2,871,332,164	—	105,774,948
CPE	273,931,236	36,760,523	9,620,259	325,950,439	5,521,367	14,245,229	279,306,560	3,592,397	14,798,770
Foam insulation	81,546,885	2,957,910	2,584,505	3,238,877	—	821,443	—	—	—

Segment totals	3,295,335,194	70,625,151	124,868,313	3,090,589,440	20,746,773	126,376,066	3,150,638,724	3,592,397	120,573,718
Reconciliation to consolidated totals:
Elimination of receivables from intersegments	—	—	—	—	—	—	—	—	—

Consolidated totals	3,295,335,194	70,625,151	124,868,313	3,090,589,440	20,746,773	126,376,066	3,150,638,724	3,592,397	120,573,718


Consolidated totals ($)							454,178,855	517,861	17,381,248

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=68060357&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=68060357&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=68060357&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=68060357&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=68060357&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
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
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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=68060357&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 10
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 29
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599

+ Details

Condensed Financial Information of New Borun

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of New Borun

Condensed Financial Information of New Borun

19. 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 RMB1,148,685,884 and RMB1,155,056,979 ($166,506,700) as of December 31, 2015 and 2016, respectively.

The condensed financial information of the Registrant represents as follows:

CONDENSED BALANCE SHEETS

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
ASSETS
Current assets
Cash	136	146	21
Amounts due from subsidiaries	244,532,160	244,532,160	35,250,419

Total current assets	244,532,296	244,532,306	35,250,440
Investments in subsidiaries	1,560,620,633	1,624,272,493	234,146,244

Total assets	1,805,152,929	1,868,804,799	269,396,684


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses and other payables	4,968	5,306	765

Total current liabilities and total liabilities	4,968	5,306	765

Total shareholders’ equity	1,805,147,961	1,868,799,493	269,395,919

Total liabilities and shareholders’ equity	1,805,152,929	1,868,804,799	269,396,684

CONDENSED STATEMENTS OF INCOME

	Year Ended December 31,
	2014	2015	2016	2016
	(RMB)	(RMB)	(RMB)	($)
Operating expenses:
General and administrative	—	—	—	—

Loss from operations	—	—	—	—
Other income:
Interest income	—	—	—	—
Equity in earnings of subsidiaries	79,210,649	128,854,649	63,710,958	9,184,224

Income before income tax expense	79,210,649	128,854,649	63,710,958	9,184,224
Income tax expense	—	—	—	—

Net income	79,210,649	128,854,649	63,710,958	9,184,224

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2014	2015	2016	2016
	(RMB)	(RMB)	(RMB)	($)
Net cash provided by operating activities	—	8	—	—
Net cash provided by investing activities	—	—	—	—
Net cash provided by financing activities	—	—	—	—
Effect of exchange rate changes on cash and cash equivalents	—	—	10	1

Net increase/(decrease) in cash	—	8	10	1
Cash—beginning of year	128	128	136	20

Cash—end of year	128	136	146	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, 2014, 2015 and 2016.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

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

Valuation of Long-Lived Assets

Value added tax

According to Cai Kuai [2013] No. 36, sales taxes and surcharges has been replaced with value-added taxes effective from May 1, 2016.

Revenue Recognition

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

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, 2014, 2015 and 2016.

Advertising Expenses

Costs associated with advertising are expensed as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2014, 2015 and 2016.

Shipping and Handling Costs

Allowance for Doubtful Accounts

Retirement and Other Postretirement Benefits

The total amounts for such employee benefits, which were expensed, were RMB9,808,692, RMB10,369,297 and RMB10,016,774 ($1,443,963) for the years ended December 31, 2014, 2015 and 2016, respectively.

Borrowing cost

Government Subsidies

Income Taxes

Comprehensive Income (Loss)

Appropriated Retained Earnings

Dividends

Earnings Per Share

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

	Year Ended December 31,
	2014	2015	2016	2016
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,210,649	128,854,649	63,710,958	9,184,224


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	3.08	5.01	2.48	0.36

Operating Risk

Concentrations of Credit Risk

Interest Rate Risk

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

The interest rates profile and terms of repayment of the Company’s bonds payable at the end of the reporting periods are disclosed in note 14 to the consolidated financial statements.

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

Liquidity Risk

Country Risk

Recently Issued Accounting Pronouncements

Reclassification of Accounts

Major reclassification of accounts

Effect of the changes on the balance sheet as of December 31, 2015 and the
statements of income for the years ended December 31, 2014 and 2015:

Debt issuance costs related to the Bonds reported in the balance sheet as a direct deduction from the face amount of the Bonds (FASB ASC Topic 835-30-45-1A)

Relevant disclosures about unamortized debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

Amortization of debt issuance costs shall be reported as interest expense (FASB ASC Topic 835-30-45-3)

Relevant disclosures and presentation about the amortization of debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

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,
	2014	2015	2016	2016
	(RMB)	(RMB)	(RMB)	($)
Numerator:
Net income, representing undistributed earnings available to ordinary shareholder—basic and diluted	79,210,649	128,854,649	63,710,958	9,184,224


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	3.08	5.01	2.48	0.36

Schedule of major reclassification of accounts and effect of the changes on the balance sheet and statements of statements of income

Major reclassification of accounts

Effect of the changes on the balance sheet as of December 31, 2015 and the
statements of income for the years ended December 31, 2014 and 2015:

Debt issuance costs related to the Bonds reported in the balance sheet as a direct deduction from the face amount of the Bonds (FASB ASC Topic 835-30-45-1A)

Relevant disclosures about unamortized debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

Amortization of debt issuance costs shall be reported as interest expense (FASB ASC Topic 835-30-45-3)

Relevant disclosures and presentation about the amortization of debt issuance costs associated to 2013 Bonds were amended in Note 14 and Note 18 to conform to the current presentation accordingly.

- Definition

Tabular disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22580-107794

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=66092750

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e765-108305

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22499-107794

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=64853466&loc=d3e22583-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=68064558&loc=d3e725-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

+ Details

Trade Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2016

Trade Accounts Receivable, Net

Schedule of trade accounts receivable, net

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Trade accounts receivable	515,520,269	415,621,572	59,913,734
Less: Allowance for doubtful accounts	—	—	—

Total trade accounts receivable, net	515,520,269	415,621,572	59,913,734

Inventories (Tables)

12 Months Ended

Dec. 31, 2016

Inventories

Schedule of inventory

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Raw materials	387,319,932	567,751,699	81,843,981
Work-in-process	5,152,109	2,717,584	391,752
Finished goods	46,369,051	32,159,556	4,635,946

Total inventories	438,841,092	602,628,839	86,871,679

Advance to Suppliers (Tables)

12 Months Ended

Dec. 31, 2016

Advance to Suppliers

Schedule of advances to suppliers

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Advance to granaries (note (i))	343,839,565	245,394,904	35,374,788
Others	1,158,618	582,571	83,980

Total advance to suppliers	344,998,183	245,977,475	35,458,768

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, 2016

Other Receivables

Schedule of other receivables

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
VAT recoverable (note (i))	52,829,584	74,986,737	10,809,678
Deposit for loan guarantee	2,900,000	2,900,000	418,048
Others	3,302,854	3,169,077	456,837

Total other receivables	59,032,438	81,055,814	11,684,563

Property, Plant and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment, Net

Schedule of property, plant and equipment, net

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Buildings and improvements	642,901,735		642,901,735		92,677,200
Machinery	926,621,646		924,995,666		133,342,319
Office equipment and furnishing	1,468,593		1,468,593		211,704
Motor vehicles	1,715,958		1,715,958		247,363

Total cost	1,572,707,932		1,571,081,952		226,478,586
Total accumulated depreciation	(611,246,250	)	(725,365,126	)	(104,564,671	)
Construction in progress	26,931,306		30,523,703		4,400,130

Total property, plant, and equipment, net	988,392,988		876,240,529		126,314,045

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

12 Months Ended

Dec. 31, 2016

Land Use Rights, Net

Summary of land use rights

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Land use rights at cost	144,726,756		144,726,756		20,863,018
Accumulated amortization	(11,433,974	)	(14,266,551	)	(2,056,588	)

Total land use rights, net	133,292,782		130,460,205		18,806,430

Schedule of future amortization of land use rights

Years Ending December 31,		(RMB) Amount
2017		2,832,573
2018		2,832,573
2019		2,832,573
2020		2,832,573
2021		2,832,573
Thereafter		116,297,340

Total		130,460,205

Intangible Assets, Net (Tables)

12 Months Ended

Dec. 31, 2016

Production license

Intangible Assets, Net

Summary of intangible assets

	As of December 31,
	2015		2016		2016
	(RMB)		(RMB)		($)
Production license at cost	28,779,986		28,779,986		4,148,765
Accumulated amortization	(26,783,701	)	(28,779,986	)	(4,148,765	)

Total intangible assets, net	1,996,285		—		—

Accrued Expenses and Other Payables (Tables)

12 Months Ended

Dec. 31, 2016

Accrued Expenses and Other Payables

Summary of accrued expenses and other payables

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Payroll and welfare payables	19,257,320	19,056,799	2,747,124
VAT and other tax payables	27,340,316	25,633,805	3,695,229
Accrued fixed assets purchases	2,121,712	—	—
Other payables and accruals	4,277,122	2,923,551	421,443
Accrued bonds’ interest expenses (note 14)	27,205,456	—	—

Total accrued expenses and other payables	80,201,926	47,614,155	6,863,796

Borrowings (Tables)

12 Months Ended

Dec. 31, 2016

Borrowings

Schedule of borrowings

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Short-term borrowings	753,200,000	905,170,000	130,484,359

Long-term borrowings
Current portion	84,000,000	—	—
Non-current portion	—	—	—

	837,200,000	905,170,000	130,484,359

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

	As of December 31,
	2015	2016	2016
	(RMB)	(RMB)	($)
Industrial & Commercial Bank of China (note (i))	24,000,000	12,000,000	1,729,854
Agricultural Bank of China (note (ii))	383,200,000	353,200,000	50,915,381
China Construction Bank (note (iii))	230,000,000	250,000,000	36,038,633
Agricultural Development Bank of China (note (iv))	60,000,000	50,000,000	7,207,727
China CITIC Bank (note (v))	140,000,000	139,970,000	20,177,311
Daqing Rural Commercial Bank (note (vi))	—	49,000,000	7,063,572
Longjiang Bank (note (vii))	—	51,000,000	7,351,881

Total borrowings	837,200,000	905,170,000	130,484,359