CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three-Month Period Ended March 31,

2015

2014

US$

US$

Cash flows from operating activities:

Net cash provided by operating activities

37,529,772

26,174,417

Cash flows from investing activities:

Purchase of time deposits

(110,597,161)

(162,265,820)

Proceeds from maturity of time deposits

80,026,889

111,155,365

Purchase of and deposits for property, plant and equipment

(86,042,231)

-

Purchases of land use rights

(5,522,219)

(1,020,326)

Net cash used in investing activities

(122,134,722)

(52,130,781)

Cash flows from financing activities:

Proceeds from bank borrowings

203,658,524

176,935,307

Repayment of bank borrowings

(111,397,430)

(215,370,999)

Proceeds from issuance of the Notes

-

148,396,175

Payment of issuance costs of the Notes

-

(3,481,955)

Placement of restricted cash as collateral for bank borrowings

(22,298,692)

(2,786,383)

Net cash provided by financing activities

69,962,402

103,692,145

Effect of foreign currency exchange rate changes on cash and

     cash equivalents

384,182

(2,866,506)

Net increase (decrease) in cash and cash equivalents

(14,258,366)

74,869,275

Cash and cash equivalents at beginning of period

45,456,612

95,545,904

Cash and cash equivalents at end of period

31,198,246

170,415,179

Supplemental disclosure of cash flow information:

Interest paid, net of capitalized interest

14,508,630

5,242,256

Income taxes paid

2,215,158

18,749,381

Non-cash investing and financing activities:

Accrual for issuance costs of the Notes

-

1,439,209

Accrual for purchase of equipment

14,224

155,285