CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three-Month Period Ended March 31,

2015

2014

US$

US$

Revenues

221,926,395

223,580,675

Cost of revenues

(173,284,119)

(176,932,337)

    Gross profit

48,642,276

46,648,338

Selling expenses

(296,820)

(122,328)

General and administrative expenses

(4,964,758)

(3,796,364)

Research and development expenses

(5,813,863)

(8,630,734)

    Total operating expenses

(11,075,441)

(12,549,426)

    Operating income

37,566,835

34,098,912

Interest income

2,428,071

3,035,365

Interest expense

(10,629,353)

(8,579,977)

Foreign currency exchange losses

(90,415)

(479,190)

Gains on foreign currency forward contracts

354,519

-

Government grant

-

1,311,239

Change in fair value of warrant liability

-

(162,739)

    Total non-operating expense, net

(7,937,178)

(4,875,302)

    Income before income taxes

29,629,657

29,223,610

Income tax expense

(4,225,631)

(7,227,559)

    Net income

25,404,026

21,996,051

Earnings per common share:

Basic and diluted

0.39

0.34

Net Income

25,404,026

21,996,051

Other comprehensive loss

Foreign currency translation adjustment, net of nil income taxes

(164,760)

(14,188,735)

Comprehensive income

25,239,266

7,807,316