YaSheng (HERB) 10-Q 23 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2015shares
Document And Entity Information
Entity Registrant Name	Yasheng Group
Entity Central Index Key	1,123,312
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	157,165,783
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 11,472,807	$ 11,907,242
Accounts receivable, net	123,900,636	112,094,824
Inventories	384,150,524	341,756,253
Prepaid and other current assets	3,787,425	4,070,937
Total current assets	523,311,392	469,829,256
Equity and other investments	201,945	209,941
Property, plant and equipment, net	913,205,753	905,268,722
Construction in progress	7,093,278	6,960,289
Intangible assets, net	1,118,736,935	1,097,762,161
Total assets	2,562,549,303	2,480,030,369
Current liabilities:
Accounts payable and accrued expenses	25,091,757	27,402,889
Short term loans	4,402,762	4,902,762
VAT tax payable	653,570	701,760
Current portion of long term debt	3,039,246	3,560,394
Other current liabilities	561,835	607,853
Total current liabilities	33,749,170	37,175,659
Long term payable	19,370,734	21,073,928
Total liabilities	53,119,904	58,249,586
Stockholders' equity:
Common stock, US$1.00 par value 800,000,000 shares authorized 157,165,783 and 155,097,355 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	157,165,783	155,097,355
Accumulated other comprehensive income	439,877,118	443,988,811
Retained earnings	1,912,386,498	1,822,694,617
Total stockholders' equity	2,509,429,399	2,421,780,783
Total liabilities & stockholders' equity	$ 2,562,549,303	$ 2,480,030,369

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Stockholders' equity:
Common stock par value	$ 1	$ 1
Common stock shares authorized	800,000,000	800,000,000
Common stock shares issued	157,165,783	155,097,355
Common stock shares Outstanding	157,165,783	155,097,355

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net sales	$ 269,797,992	$ 273,143,594	$ 709,636,965	$ 708,579,192
Cost of goods sold	226,685,889	229,635,659	615,492,604	616,356,961
Gross profit	43,112,103	43,507,935	94,144,361	92,222,231
Operating expenses:
Sales and marketing	526,766	544,282	1,281,747	1,295,418
General and administrative	1,310,060	1,353,764	3,048,822	3,084,991
Total operating expenses	1,836,827	1,898,046	4,330,569	4,380,409
Operating profit	41,275,276	41,609,889	89,813,792	87,841,822
Interest expense	(34,444)	(517,671)	589,360	150,397
Other income (expense)	93,370	1,321,294	467,449	1,818,274
Income before income tax expense	41,403,090	43,448,854	89,691,881	89,509,699
Income tax expense	0	0	0	0
Net income	$ 41,403,090	$ 43,448,854	$ 89,691,881	$ 89,509,699
Basic earnings per share	$ 0.26	$ 0.28	$ 0.57	$ 0.58
Weighted average number of shares	157,165,783	155,097,355	157,165,783	155,097,355

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 89,691,881	$ 89,509,699
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,359,800	9,651,955
Allowance for doubtful accounts	1,407,864	505,297
Changes in assets and liabilities:
Accounts receivable	(13,213,676)	(10,126,183)
Inventories	(42,394,271)	(43,873,748)
Prepaid and other current assets	283,512	289,302
Accounts payable	(2,311,132)	(2,594,817)
Tax payables	(48,190)	(51,757)
Accrued expenses and other current liabilities	(46,018)	(57,779)
Net cash provided by operating activities	42,729,770	43,251,969
Cash flows from investing activities:
Purchase of assets	(38,404,594)	(36,905,532)
Investments	0	0
Net cash used in investing activities	(38,404,594)	(36,905,532)
Cash flows from financing activities:
Issuance of common stock	0	0
Dividends paid	0	0
Payment on land lease	(1,703,194)	(2,421,667)
Increase (decrease) in debt	(1,021,148)	(1,657,173)
Net cash used in financing activities	(2,724,342)	(4,078,840)
Effect of exchange rate change on cash and cash equivalents	(2,035,269)	(102,792)
Net increase (decrease) in cash and cash equivalents	(434,435)	2,164,805
Cash and cash equivalents at beginning of period	11,907,242	11,337,958
Cash and cash equivalents at end of period	11,472,807	13,502,763
Supplemental Disclosures:
Cash paid for interest	589,360	150,397
Cash paid for income taxes	$ 0	$ 0

1. Basis of Presentation, Organ

1. Basis of Presentation, Organization and Business	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
1. Basis of Presentation, Organization and Business	The accompanying unaudited condensed consolidated financial statement (“statements”) have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period are not necessarily indicative of the results that may be expected for the full year. These statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Yasheng Group's Form 10-K. Yasheng Group (“The Company”) is a California corporation with primary operations in China. The Company produces and markets high-quality farming and sideline products including livestock and poultry. It also designs, develops and markets new technologies related to agriculture. Product offerings include 30+ major agriculture goods under 6 major product categories which include: field crops: vegetables: fruit trees: specialty crops: seeds: poultry: Yasheng sells its products through an extensive nationwide sales and distribution network covering 18 provinces and over 100 cities in China. Products are also sold directly to food processors as well as processed internally by the company and then resold to supermarkets or other distributors, or further processed for retail food distribution. The Company also sells many of its products fresh within Gansu province as well as nationally to food processors and distributors, or directly to supermarkets. Customers are based primarily in China and include national and international leading companies. Products are also sold as feed for livestock, ingredients for Chinese traditional medicines as well as other important ingredients in the food industry.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
2. Summary of Significant Accounting Policies	(a) Accounting standards The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with accounting principles generally accepted in the United States of America. (b) Fiscal year The Company’s fiscal year ends on the 31st of December of each calendar year. (c) Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated. (d) Use of estimates The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. (e) Revenue recognition We mainly sell food products. We recognize revenue when title and risk of loss are transferred to our customers. This generally happens upon delivery of our products. (f) Shipping and handling costs The Company records outward freight, purchasing and receiving costs in selling expenses; inspection costs and warehousing costs are recorded as general and administrative expenses. (g) Cash and cash equivalents Cash and cash equivalents include cash on hand, demand deposits held by banks, and securities with maturities of three months or less. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents are composed primarily of investments in money market accounts stated at cost, which approximates fair value. (h) Inventories Inventories are recorded using the weighted average method and are valued at the lower of cost or market. (i) Accounts receivable, net The carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its general allowance, including aging analysis, historical bad debt records, customer credit analysis and any specific known troubled accounts. (j) Property, plant and equipment Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is calculated on a straight-line basis over the life of the asset or the term of the lease, whichever is shorter. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are charged to expense as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation related to property and equipment used in production is reported in cost of sales. Property and equipment are depreciated over their estimated useful lives as follows: Buildings and improvements 20 - 40 years Farming facilities 10 years Machinery and equipment 7 years Transportation and other facilities 3 - 15 years Long-term assets of the Company are reviewed annually to assess whether the carrying value has become impaired, according to the guidelines established in FASB ASC 350-10. The Company also evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. No impairment of assets was recorded in the periods reported. 09/30/2015 12/31/2014 Buildings and improvements $ 123,742,066 $ 123,603,446 Farming facilities 113,191,013 113,064,212 Machinery and equipment 14,890,294 14,873,613 Transportation 365,984,467 359,434,553 Windbreak and Sand-break Trees 410,122,674 404,432,178 Total 1,027,930,514 1,015,408,002 Less: Accumulated Depreciation and amortization 122,540,849 110,139,280 Net $ 905,389,666 $ 905,268,722 (k) Intangible assets Intangible assets consist of land use rights and are recorded at cost. Under PRC’s current property rights regime, use rights for specified periods (e.g., 40 to 70 years) can be obtained from the state through the up-front payment of land use fees. The fees are determined by the location, type and density of the proposed development. This separation of land ownership and use rights allows the trading of land use rights while maintaining state ownership of land. The Company has over 300,000 acres of agriculture land that are utilized for grazing, cultivation, and reclamation, of which 65,000 acres are under cultivation using the latest scientific technologies to produce a wide variety of agricultural products. (l) Impairment of long-lived assets The carrying amounts of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. (m) Investments Investments consist primarily of less than 20% equity positions in non-marketable securities and are recorded at lower of cost or market. (n) Foreign currency translation The accompanying financial statements are presented in United States (US) dollars. The functional currency is the Renminbi (“RMB”). The financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighed average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Gains and losses resulting from foreign currency translation are recorded in a separate component of shareholders’ equity. Foreign currency translation adjustments are included in accumulated other comprehensive income in the consolidated statements of shareholders’ equity for the years presented. RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation. (o) Income taxes As an agricultural enterprise, the Company and all of its agricultural subsidiaries are exempted from enterprise income taxes with approval from the Gansu Provincial Bureau of Local Taxation. The only non-agricultural subsidiary, Baiyin Cement Plant, has suffered net loss for the years shown and therefore has no applicable taxable income. Because of the uncertainty of future profits, no deferred tax assets have been set up at this time. (p) Earnings per share Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of common and, if dilutive, potential common shares outstanding during the year. The Company has no potentially dilutive shares for the periods shown. (q) Economic and Political Risks The Company faces a number of risks and challenges as a result of having primary operations and markets in the PRC. Changing political climates in the PRC could have a significant effect on the Company's business. Refer to the December 31, 2014 10-K for descriptions of such risks. (r) Advertising expense The Company records advertising expenses in the period incurred. (s) Comprehensive income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of mainly the cumulative foreign currency translation adjustment. (t) Recently issued accounting standards Recently Adopted Accounting Guidance In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (FASB) issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning in 2018. We are currently evaluating the impact of this at standard on our consolidated financial statements. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. This new guidance will be effective in 2016. We are currently evaluating the impact of this standard on our consolidated financial statements. (u) Value added tax (VAT) Value added tax is a consumption tax levied on value added. While the standard VAT rate in PRC is 17%, the Company's agricultural subsidiaries enjoy a reduced VAT rate of 4%.

3. Inventories

3. Inventories	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
3. Inventories	The major classes of inventory: raw materials, packaging materials, products in process, finished goods, stocks, low-value consumable goods, materials in transit as well as others. The following is a breakdown of the major categories of inventories. Inventory Breakdown As of 09/30/2015 As of 12/31/2014 Raw material 68,136,236 69,104,388 Finished goods 186,103,717 179,605,652 Low value consumable goods 47,230,961 46,327,219 Packaging material 30,938,701 30,722,573 Maintenance material 16,216,321 15,996,442 Total 348,625,936 341,756,253

4. China contribution plan

4. China contribution plan	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
4. China contribution plan	The Company’s subsidiaries in China participate in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company’s subsidiaries to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

5. Profit appropriation

5. Profit appropriation	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
5. Profit appropriation	Pursuant to the laws applicable to China’s Foreign Investment Enterprises, each of the Company’s subsidiaries in China allow make appropriations from its after-tax profit to non-distributable reserve funds as determined by the Board of Directors. These reserve funds include a (i) general reserve, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. Payment to the statutory general reserve fund is at the Company discretion. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends.

6. Concentration of risks

6. Concentration of risks	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
6. Concentration of risks	The operations of the Company are substantially located in the PRC and accordingly, investing in the shares of the Company is subject to among others, the PRC’s political, economic and legal risks.

7. Income taxes

7. Income taxes	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
7. Income taxes	The Company and all of its agricultural subsidiaries are exempt from income taxes in the PRC. The Company has not filed an income tax return in the US.

8. Debt

8. Debt	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
8. Debt	The Company obtains secured lending from the banks using two types of arrangements, collateral and guarantee. Collateral are loans secured against the assets of the Yasheng Group, while guarantee are loans provided with the guarantee from a third party.

9. Employee benefit plans

9. Employee benefit plans	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
9. Employee benefit plans	The Company provides the following benefits for all employees: A. Employee Welfare Fund: An amount equal to 14% of payroll is set aside by the Company for standard employee benefits. This fund is managed and controlled by the Company. All required payments current. B. Open Policy Pension: The Company pays to national and community insurance agents an amount equal to 20% of payroll. This insurance continues to cover the employee subsequent to retirement. C. Unemployment Insurance: The Company pays to the national employment administrative entities an amount equal to 1% of payroll. Any dismissed employee thereby receives a specified amount of family-support funds for a designated period. D. Housing Surplus Reserve: The Company pays to the national housing fund administrative entities an amount equal to 10% of payroll for deposit into the employees' future housing allowance accounts. The aforesaid items are for employee's benefits and should be accounted for as the Company's expenses.

10. Operating leases

10. Operating leases	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
10. Operating leases	The Company has no operating leases for the periods shown.

11. Segments

11. Segments	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
11. Segments	In its operation of the business, management, including upper management and the board of director’s, reviews certain information as it relates to the Company as a whole. The information most used and useful is the profitability by subsidiary. Accordingly, these are the segments which are presented in the table below. 9 months ended 9-30-2015 Breakdown by Subsidiary Unit: US Dollar Subsidiaries Net sales ended 09/30/2015 Net sales ended 09/30/2014 Cost of sales ended 09/30/2015 Cost of sales ended 09/30/2014 Gross profit ended 09/30/2015 Gross profit ended 09/30/2014 Gansu Tiaoshan Agricultural-Industrial-Commercial Group Co., Ltd 343,391,851 342,879,997 301,229,743 301,652,769 42,162,108 41,227,,228 Gansu Hongtai Agricultural Technology Co., Ltd. 91,450,850 91,314,535 80,311,387 80,424,171 11,139,463 10,890,364 Gansu Xiaheqing Industrial Co., Ltd. 16,292,708 16,268,423 12,966,222 12,984,431 3,326,486 3,283,992 Gansu Jinta Hengsheng Agricultural Development Co., Ltd. 81,622,311 81,500,646 71,073,403 71,173,214 10,548,908 10,327,432 Gansu Jinta Xingsheng Industrial Co., Ltd. 90,741,344 90,606,086 78,654,499 78,764,956 12,086,845 11,841,130 Gansu Jinta Yongsheng Agricultural Development Company. 85,196,960 85,069,967 70,493,639 70,592,636 14,703,321 14,477,331 Gansu Jinta Yuantai Commercial Trading Co., Ltd. 940,941 939,538 763,711 764,784 177,230 174,794 Totals 709,636,965 708,579,192 615,492,604 616,356,961 94,144,361 92,222,231 Other segments that assist management in its analysis of the company's performance are the segments by product group, namely, agriculture, livestock and biotechnology. The following table contains that breakout of gross profit by product group. 9 months ended 9-30-2015 Net sales ended 09/30/2015 Net sales ended 09/30/2014 Cost of sales ended 09/30/2015 Cost of sales ended 09/30/2014 Gross profit ended 09/30/2015 Gross profit ended 09/30/2014 Gross profit % ended 09/30/2015 Gross profit % ended 09/30/2014 Agriculture 703,527,332 702,478,666 609,617,729 610,473,835 93,909,603 92,004,831 13.35 13.10 Livestock 1,348,624 1,346,614 1,245,425 1,247,174 103,199 99,440 7.65 7.38 Biotechnology 4,761,009 4,753,912 4,629,450 4,635,952 131,559 117,960 2.76 2.48 Total 709,636,965 708,579,192 615,492,604 616,356,961 94,144,361 92,222,231 13.27 13.02

2. Summary of Significant Acc17

2. Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
(a) Accounting standards	The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with accounting principles generally accepted in the United States of America.
(b) Fiscal year	The Company’s fiscal year ends on the 31st of December of each calendar year.
(c) Consolidation	The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated.
(d) Use of estimates	The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
(e) Revenue recognition	We mainly sell food products. We recognize revenue when title and risk of loss are transferred to our customers. This generally happens upon delivery of our products.
(f) Shipping and handling costs	The Company records outward freight, purchasing and receiving costs in selling expenses; inspection costs and warehousing costs are recorded as general and administrative expenses.
(g) Cash and cash equivalents	Cash and cash equivalents include cash on hand, demand deposits held by banks, and securities with maturities of three months or less. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents are composed primarily of investments in money market accounts stated at cost, which approximates fair value.
(h) Inventories	Inventories are recorded using the weighted average method and are valued at the lower of cost or market.
(i) Accounts receivable, net	The carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its general allowance, including aging analysis, historical bad debt records, customer credit analysis and any specific known troubled accounts.
(j) Property, plant and equipment	Property, plant and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is calculated on a straight-line basis over the life of the asset or the term of the lease, whichever is shorter. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are charged to expense as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation related to property and equipment used in production is reported in cost of sales. Property and equipment are depreciated over their estimated useful lives as follows: Buildings and improvements 20 - 40 years Farming facilities 10 years Machinery and equipment 7 years Transportation and other facilities 3 - 15 years Long-term assets of the Company are reviewed annually to assess whether the carrying value has become impaired, according to the guidelines established in FASB ASC 350-10. The Company also evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. No impairment of assets was recorded in the periods reported. 09/30/2015 12/31/2014 Buildings and improvements $ 123,742,066 $ 123,603,446 Farming facilities 113,191,013 113,064,212 Machinery and equipment 14,890,294 14,873,613 Transportation 365,984,467 359,434,553 Windbreak and Sand-break Trees 410,122,674 404,432,178 Total 1,027,930,514 1,015,408,002 Less: Accumulated Depreciation and amortization 122,540,849 110,139,280 Net $ 905,389,666 $ 905,268,722
(k) Intangible assets	Intangible assets consist of land use rights and are recorded at cost. Under PRC’s current property rights regime, use rights for specified periods (e.g., 40 to 70 years) can be obtained from the state through the up-front payment of land use fees. The fees are determined by the location, type and density of the proposed development. This separation of land ownership and use rights allows the trading of land use rights while maintaining state ownership of land. The Company has over 300,000 acres of agriculture land that are utilized for grazing, cultivation, and reclamation, of which 65,000 acres are under cultivation using the latest scientific technologies to produce a wide variety of agricultural products.
(l) Impairment of long-lived assets	The carrying amounts of long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.
(m) Investments	Investments consist primarily of less than 20% equity positions in non-marketable securities and are recorded at lower of cost or market.
(n) Foreign currency translation	The accompanying financial statements are presented in United States (US) dollars. The functional currency is the Renminbi (“RMB”). The financial statements are translated into US dollars from RMB at year-end exchange rates for assets and liabilities, and weighed average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. Gains and losses resulting from foreign currency translation are recorded in a separate component of shareholders’ equity. Foreign currency translation adjustments are included in accumulated other comprehensive income in the consolidated statements of shareholders’ equity for the years presented. RMB is not freely convertible into the currency of other nations. All such exchange transactions must take place through authorized institutions. There is no guarantee the RMB amounts could have been, or could be, converted into US dollars at rates used in translation.
(o) Income taxes	As an agricultural enterprise, the Company and all of its agricultural subsidiaries are exempted from enterprise income taxes with approval from the Gansu Provincial Bureau of Local Taxation. The only non-agricultural subsidiary, Baiyin Cement Plant, has suffered net loss for the years shown and therefore has no applicable taxable income. Because of the uncertainty of future profits, no deferred tax assets have been set up at this time.
(p) Earnings per share	Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of common and, if dilutive, potential common shares outstanding during the year. The Company has no potentially dilutive shares for the periods shown.
(q) Economic and Political Risks	The Company faces a number of risks and challenges as a result of having primary operations and markets in the PRC. Changing political climates in the PRC could have a significant effect on the Company's business. Refer to the December 31, 2014 10-K for descriptions of such risks.
(r) Advertising expense	The Company records advertising expenses in the period incurred.
(s) Comprehensive income	Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income, as presented on the accompanying consolidated balance sheets, consists of mainly the cumulative foreign currency translation adjustment.
(t) Recently issued accounting standards	Recently Adopted Accounting Guidance In May 2014, as part of its ongoing efforts to assist in the convergence of U.S. GAAP and International Financial Reporting Standards, the Financial Accounting Standards Board (FASB) issued a new standard related to revenue recognition. Under the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard will be effective for us beginning in 2018. We are currently evaluating the impact of this at standard on our consolidated financial statements. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This new guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. This new guidance will be effective in 2016. We are currently evaluating the impact of this standard on our consolidated financial statements.
(u) Value added tax (VAT)	Value added tax is a consumption tax levied on value added. While the standard VAT rate in PRC is 17%, the Company's agricultural subsidiaries enjoy a reduced VAT rate of 4%.

2. Summary of Significant Acc18

2. Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Long-term assets	09/30/2015 12/31/2014 Buildings and improvements $ 123,742,066 $ 123,603,446 Farming facilities 113,191,013 113,064,212 Machinery and equipment 14,890,294 14,873,613 Transportation 365,984,467 359,434,553 Windbreak and Sand-break Trees 410,122,674 404,432,178 Total 1,027,930,514 1,015,408,002 Less: Accumulated Depreciation and amortization 122,540,849 110,139,280 Net $ 905,389,666 $ 905,268,722

3. Inventories (Tables)

3. Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Inventory Breakdown	Inventory Breakdown As of 09/30/2015 As of 12/31/2014 Raw material 68,136,236 69,104,388 Finished goods 186,103,717 179,605,652 Low value consumable goods 47,230,961 46,327,219 Packaging material 30,938,701 30,722,573 Maintenance material 16,216,321 15,996,442 Total 348,625,936 341,756,253

11. Segments (Tables)

11. Segments (Tables)	9 Months Ended
	Sep. 30, 2015
Segments Tables
Subsidiaries	Subsidiaries Net sales ended 09/30/2015 Net sales ended 09/30/2014 Cost of sales ended 09/30/2015 Cost of sales ended 09/30/2014 Gross profit ended 09/30/2015 Gross profit ended 09/30/2014 Gansu Tiaoshan Agricultural-Industrial-Commercial Group Co., Ltd 343,391,851 342,879,997 301,229,743 301,652,769 42,162,108 41,227,,228 Gansu Hongtai Agricultural Technology Co., Ltd. 91,450,850 91,314,535 80,311,387 80,424,171 11,139,463 10,890,364 Gansu Xiaheqing Industrial Co., Ltd. 16,292,708 16,268,423 12,966,222 12,984,431 3,326,486 3,283,992 Gansu Jinta Hengsheng Agricultural Development Co., Ltd. 81,622,311 81,500,646 71,073,403 71,173,214 10,548,908 10,327,432 Gansu Jinta Xingsheng Industrial Co., Ltd. 90,741,344 90,606,086 78,654,499 78,764,956 12,086,845 11,841,130 Gansu Jinta Yongsheng Agricultural Development Company. 85,196,960 85,069,967 70,493,639 70,592,636 14,703,321 14,477,331 Gansu Jinta Yuantai Commercial Trading Co., Ltd. 940,941 939,538 763,711 764,784 177,230 174,794 Totals 709,636,965 708,579,192 615,492,604 616,356,961 94,144,361 92,222,231
Other segments	Net sales ended 09/30/2015 Net sales ended 09/30/2014 Cost of sales ended 09/30/2015 Cost of sales ended 09/30/2014 Gross profit ended 09/30/2015 Gross profit ended 09/30/2014 Gross profit % ended 09/30/2015 Gross profit % ended 09/30/2014 Agriculture 703,527,332 702,478,666 609,617,729 610,473,835 93,909,603 92,004,831 13.35 13.10 Livestock 1,348,624 1,346,614 1,245,425 1,247,174 103,199 99,440 7.65 7.38 Biotechnology 4,761,009 4,753,912 4,629,450 4,635,952 131,559 117,960 2.76 2.48 Total 709,636,965 708,579,192 615,492,604 616,356,961 94,144,361 92,222,231 13.27 13.02

2. Summary of Significant Acc21

2. Summary of Significant Accounting Policies (Details 1) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Total	$ 1,027,930,514	$ 1,015,408,002
Less: Accumulated Depreciation and amortization	122,540,849	110,139,280
Net	905,389,666	905,268,722
BuildingAndBuildingImprovements [Member]
Property, Plant and Equipment [Line Items]
Total	123,742,066	123,603,446
Farming Facilities [Member]
Property, Plant and Equipment [Line Items]
Total	113,191,013	113,064,212
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	14,890,294	14,873,613
Transportation Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	365,984,467	359,434,553
Windbreak and Sandbreak Trees [Member]
Property, Plant and Equipment [Line Items]
Total	$ 410,122,674	$ 404,432,178

2. Summary of Significant Acc22

2. Summary of Significant Accounting Policies (Details Narrative)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies Details Narrative
Standard VAT rate	17.00%
Reduced VAT rate	4.00%

3. Inventories (Details)

3. Inventories (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Notes to Financial Statements
Raw material	$ 68,136,236	$ 69,104,388
Finished goods	186,103,717	179,605,652
Low value consumable goods	47,230,961	46,327,219
Packaging material	30,938,701	30,722,573
Maintenance material	16,216,321	15,996,442
Total	$ 384,150,524	$ 341,756,253

5. Profit appropriation (Detail

5. Profit appropriation (Details Narrative)	9 Months Ended
	Sep. 30, 2015
Profit Appropriation Details Narrative
Profit appropriation, Reseve fund description	The general reserve fund requires annual appropriations of 10% of after-tax profit (as determined under PRC GAAP) until these reserves equal 50% of the amount of paid-in capital; the other fund appropriations are at the Company’s discretion. Payment to the statutory general reserve fund is at the Company discretion.

9. Employee benefit plans (Deta

9. Employee benefit plans (Details Narrative)	9 Months Ended
	Sep. 30, 2015
Employee Benefit Plans Details Narrative
Percentage of Payroll set for employee benefits	14.00%
Percentage of Payroll paid to insurance agents	20.00%
Percentage of Payroll for unemployment insurance	1.00%
Percentage of Payroll paid for housing allowance accounts	10.00%

11. Segments (Details)

11. Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Related Party Transaction [Line Items]
Net Sales	$ 269,797,992	$ 273,143,594	$ 709,636,965	$ 708,579,192
Cost of Sales	226,685,889	229,635,659	615,492,604	616,356,961
Gross Profit	$ 43,112,103	$ 43,507,935	94,144,361	92,222,231
Gansu Tiaoshan Agricultural Industrial Commercial Group Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			343,391,851	342,879,997
Cost of Sales			301,229,743	301,652,769
Gross Profit			42,162,108	41,227,228
Gansu Hongtai Agricultural Technology Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			91,450,850	91,314,535
Cost of Sales			80,311,387	80,424,171
Gross Profit			11,139,463	10,890,364
Gansu Xiaheqing Industrial Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			16,292,708	16,268,423
Cost of Sales			12,966,222	12,984,431
Gross Profit			3,326,486	3,283,992
Gansu Jinta Hengsheng Agricultural Development Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			81,622,311	81,500,646
Cost of Sales			71,073,403	71,173,214
Gross Profit			10,548,908	10,327,432
Gansu Jinta Xingsheng Industrial Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			90,741,344	90,606,086
Cost of Sales			78,654,499	78,764,956
Gross Profit			12,086,845	11,841,130
Gansu Jinta Yongsheng Agricultural Development Company [Member]
Related Party Transaction [Line Items]
Net Sales			85,196,960	85,069,967
Cost of Sales			70,493,639	70,592,636
Gross Profit			14,703,321	14,477,331
Gansu Jinta Yuantai Commercial Trading Company Limited [Member]
Related Party Transaction [Line Items]
Net Sales			940,941	939,538
Cost of Sales			763,711	764,784
Gross Profit			$ 177,230	$ 174,794

11. Segments (Details 1)

11. Segments (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Net Sales	$ 269,797,992	$ 273,143,594	$ 709,636,965	$ 708,579,192
Cost of Sales	226,685,889	229,635,659	615,492,604	616,356,961
Gross Profit	$ 43,112,103	$ 43,507,935	$ 94,144,361	$ 92,222,231
Gross Profit %			13.27%	13.02%
Agriculture [Member]
Segment Reporting Information [Line Items]
Net Sales			$ 703,527,332	$ 702,478,666
Cost of Sales			609,617,729	610,473,835
Gross Profit			$ 93,909,603	$ 92,004,831
Gross Profit %			13.35%	13.10%
Livestock [Member]
Segment Reporting Information [Line Items]
Net Sales			$ 1,348,624	$ 1,346,614
Cost of Sales			1,245,425	1,247,174
Gross Profit			$ 103,199	$ 99,440
Gross Profit %			7.65%	7.38%
Biotechnology [Member]
Segment Reporting Information [Line Items]
Net Sales			$ 4,761,009	$ 4,753,912
Cost of Sales			4,629,450	4,635,952
Gross Profit			$ 131,559	$ 117,960
Gross Profit %			2.76%	2.48%