Condensed Financial Information of New Borun

12 Months Ended

Dec. 31, 2014

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 RMB1,121,746,176 and RMB 1,135,800,419 ($185,618,634)  as of December 31, 2013 and 2014, respectively.

The condensed financial information of the Registrant represents as follows:

CONDENSED BALANCE SHEETS

	As of December 31,
	2013	2014	2014
	(RMB)	(RMB)	($)
ASSETS
Current assets
Cash	128	128	21
Amounts due from subsidiaries	244,532,160	244,532,160	39,962,765
Total current assets	244,532,288	244,532,288	39,962,786
Investments in subsidiaries	1,351,862,978	1,431,816,950	233,995,251
Total assets	1,596,395,266	1,676,349,238	273,958,037
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses and other payables	4,664	4,681	765
Total current liabilities and total liabilities	4,664	4,681	765
Total shareholders’ equity	1,596,390,602	1,676,344,557	273,957,272
Total liabilities and shareholders’ equity	1,596,395,266	1,676,349,238	273,958,037

CONDENSED STATEMENTS OF INCOME

	Year Ended December 31,
	2012	2013		2014	2014
	(RMB)	(RMB)		(RMB)	($)
Operating expenses:
General and administrative	—	(5,188	)	—	—
Loss from operations	—	(5,188	)	—	—
Other income:
Interest income	—	—		—	—
Equity in earnings of subsidiaries	188,151,454	79,533,497		79,210,649	12,945,031
Income before income tax expense	188,151,454	79,528,309		79,210,649	12,945,031
Income tax expense	—	—		—	—
Net income	188,151,454	79,528,309		79,210,649	12,945,031

CONDENSED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2012		2013		2014	2014
	(RMB)		(RMB)		(RMB)	($)
Net cash used in operating activities	(18	)	(5,332	)	—	—
Net cash provided by investing activities	—		—		—	—
Net cash provided by financing activities	—		—		—	—
Effect of exchange rate changes on cash and cash equivalents	18		(34	)	—	—
Net increase (decrease) in cash	—		(5,366	)	—	—
Cash—beginning of year	5,494		5,494		128	21
Cash—end of year	5,494		128		128	21

NOTES TO CONDENSED FINANCIAL STATEMENTS

Basis of Presentation

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

Investments in subsidiaries

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

The Company’s subsidiaries did not incur any dividend to the Registrant for the years ended December 31, 2012, 2013 and 2014.