Date of Report : OCTOBER 1999

THE KRELLER BUSINESS INFORMATION GROUP, INC.

NANTONG CELLULOSE FIBERS CO., LTD. MARCH 04, 2013 NO. 27, ZHONGXIU EAST ROAD CHONGCHUAN DISTRICT NANTONG CITY JIANGSU PROVINCE, 226008 PR CHINA TEL: 86 (0) 513-83560512 FAX: 86 (0) 513-83577520 WEBSITE: http://www.ncfcinfo.com EMAIL: [email protected]

LEGAL The subject is a Chinese-Foreign Equity Joint Company Venture STRUCTURE & Enterprise that was incorporated on March 20, 1987. HISTORY Registration No.: 320600400000025

Registered Capital: US$ 303,704,000

The web design is professional and the content is well organized. At present the web site is only in Chinese version.

Changes of its registered information are as follows: Date of Item Before the change After the change change Unknown Registration No. 000026 320600400000025

Honors:

“National Excellent Foreign-invested Enterprise” “National Quality and Efficiency of Advanced Enterprise” “Good Standardization Enterprise” “National Quality Award” Etc.

Main Shareholders:

Name % of Shareholding

Celanese Far East Limited (Hong Kong) 30.68

THE KRELLER BUSINESS INFORMATION GROUP, INC.

China National Tobacco Corporation 69.32

China National Tobacco Corporation ======Incorporation date: Dec. 15, 1983 Registration no.: 100000000040848 Registered capital: CNY 57,000,000,000 Legal representative: Jiang Chengkang Legal form: State-owned enterprise Add: No. 55 Yuetan South Street, Xicheng District, Beijing Tel: 86-10-63605000 Web: http://www.tobacco.gov.cn/ E-mail: [email protected]

MANAGEMENT The subject has the following senior company personnel:

Legal Representative and Chairman

Mr. Liu Jingru, ID # 110102195208292775, born in 1952, with university education. He is currently responsible for the overall management of the subject.

Working Experience(s): At present is working in subject as Chairman and Legal Representative.

General Manager

Mr. Sun Guiquan, ID# 320602196401220539, born in 1964, with university education. He is currently responsible for the daily management of the subject.

Working Experience(s): At present is working in subject as General Manager.

THE KRELLER BUSINESS INFORMATION GROUP, INC.

Directors

Zhang Yuxia 张玉霞 ID# 110108550607544 Fan Jianfeng 樊剑峰 ID# 320919196011190470 Wu Jianming 吴建明 ID# 11010219561014333X Sun Guifang 孙桂芳 ID# 110107550814004 Tian Zhigang 田志刚 # 443378159 Josh Cheng 程嘉树 ID# 110105195312060877 Aili Aote (in Chinese Pinyin) 艾里奥特 # 2046599007 Keller Walter # 401107470 Louis Eugene Purvis # 134705770

RELATED The subject has the following affiliated companies: COMPANIES According to the website: http://www.celanese.com.cn

Celanese (China) Investment Co., Ltd. ======Incorporation date: Dec. 29, 2004 Registration no.: 310000400409459 Registered capital: USD 120,000,000 Legal representative: Josh Cheng Legal form: Wholly foreign-owned enterprise Tel: +86 21 3861 9288 Fax: +86 21 3861 9599

Celanese (Nanjing) Chemical Co., Ltd. ======Legal representative: Josh Cheng Tel: + 86 25 57728888 Fax: + 86 25 58395959

Celanese (Nanjing) Diversity Chemical Co., Ltd. ======3

THE KRELLER BUSINESS INFORMATION GROUP, INC.

Legal representative: Josh Cheng Tel: + 86 25 57728888 Fax: + 86 25 58395959

Celanese (Nanjing) Acetyl Derivatives Co., Ltd. ======Legal representative: Josh Cheng Tel: + 86 25 57728888 Fax: + 86 25 58395959

Etc.

ACTIVITIES The subject is mainly engaged in manufacturing and selling cellulose acetate fibers tows and related products.

Main Products: cellulose acetate fibers tows and related products.

The subject sources its materials 40% from domestic market, and 60% from overseas market, mainly America. It sells 99% of its products in domestic market, and 1% to overseas market.

The buying terms of the subject include Check, T/T, L/C and Credit of 30-60 days. The payment terms of the subject include Check, T/T, L/C and Credit of 30-60 days.

Major Supplier: ======Nantong Li’nan Industry & Trade Co., Ltd. Tel: 86 0513 81020509

THE KRELLER BUSINESS INFORMATION GROUP, INC.

Major Client: ======China Tobacco Investment Management Co.

There are a total of 828 employees.

LOCATIONS The subject is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Nantong. Our checks reveal that the subject owns the total premise about 560,000 square meters.

SALES & Balance sheets are attached to the end of this report. FINANCE An interview was conducted with the subject’s accountant Mr. Li on Mar. 4, 2013.

PUBLIC The sources consulted record no detrimental legal or labor court RECORDS information.

PAYMENTS No collections or legal actions were traced against the subject during the course of this investigation. No unfavorable information with regard to the subject's commercial reputation was reported.

Overall payment appraisal: ( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet determined

Trade payment experience: The subject’s supplier declined to make any comment.

THE KRELLER BUSINESS INFORMATION GROUP, INC.

Delinquent payment record: None

No overdue amount owed by the subject was placed for collection within the last 6 years.

The subject is considered large-sized in its line with strong financial conditions. A credit line up to US$ 20,000,000 would appear to be within the subject’s capacities.

Note: The credit recommendation has been raised from US$ 15,000,000 to present amount, due to great increase in its equities and turnover.

BANKING The subject maintains relations with the following banks:

CHINA CONSTRUCTION BANK AC#：8501320016486360506260126

INDUSTRIAL AND COMMERCIAL BANK OF CHINA Nantong Chengnan Sub-branch AC#：1111822109000005668

Relationship: Normal.

It is generally not the policy of local banks to provide credit status information to non-bona fide applications, and interested parties would be advised to consult first with the subject if banker's references are required.

SUMMARY The subject is a Chinese-Foreign Equity Joint Company Venture Enterprise that was incorporated on March 20, 1987. The subject is mainly engaged in manufacturing and selling cellulose acetate fibers tows and related products.

THE KRELLER BUSINESS INFORMATION GROUP, INC.

There are a total of 828 employees. Balance sheets report a sales turnover of CNY 4,441,710,000 in 2012.

No collections or legal actions were traced against the subject during the course of this investigation. No unfavorable information with regard to the subject's commercial reputation was reported.

A credit line up to US$ 20,000,000 would appear to be within the subject’s capacities.

Note: The credit recommendation has been raised from US$ 15,000,000 to present amount, due to great increase in its equities and turnover.

This information is provided at your request. It cannot be guaranteed as accurate in that, The Kreller Business Information Group, Inc., its agents or associates have no practical opportunity to audit or confirm all source data. The Kreller Business Information Group, Inc. will not be held responsible for potential or actual cases that may occur from business decisions made subsequent to the receipt of this report.

THE KRELLER BUSINESS INFORMATION GROUP, INC.

Balance Sheet Unit: CNY’000 Exchange Rate: CNY 6.2229 = US$ 1.00 as of report date

as of Dec. 31, 2011 as of Dec. 31, 2012 Cash & bank 371,160 263,770 Inventory 622,330 571,610 Accounts receivable 76,630 62,790 Advances to supplies 246,940 101,830 Other receivables 119,640 217,830 Other current assets 0 0 ------Current assets 1,436,700 1,217,830 Fixed assets net value 1,202,190 2,284,850 Disposal of fixed assets 0 1,550 Projects under construction 729,430 436,310 Project materials 196,150 13,840 Long-term investments 0 0 Long-term deferred expenses 1,290 250 Intangible assets 177,480 172,160 Other assets 0 0 ------Total assets 3,743,240 4,126,790 ======Short loans 0 165,460 Accounts payable 401,830 281,810 Advances from customers 0 0 Employee pay payable 11,700 11,300 Taxes payable 30,900 68,320 Other accounts payable 119,280 102,130 Other current liabilities 0 0 ------Current liabilities 563,710 629,020 Long term liabilities 0 0 ------Total liabilities 563,710 629,020 Shareholders equities 3,179,530 3,497,770

THE KRELLER BUSINESS INFORMATION GROUP, INC.

------Total liabilities & equities 3,743,240 4,126,790 ======

Income Statement Unit: CNY’000 as of Dec. 31, 2012 Turnover 4,441,710 Cost of goods sold 2,293,120 Taxes and additional of main operation 28,460 Sales expense 51,300 Management expense 375,820 Finance expense 7,690 Non-operating income 4,370 Non-operating expense 8,220 Profit before tax 1,681,470 Less: profit tax 253,420 Profits 1,428,050 Note: The Financial Report for Year 2012 hasn’t been audited.

Important Ratios ======as of Dec. 31, 2011 as of Dec. 31, 2012 *Current ratio 2.55 1.94 *Quick ratio 1.44 1.03 *Liabilities to assets 0.15 0.15 *Net profit margin (%) / 32.15 *Return on total assets (%) / 34.60 *Inventory /Turnover ×365 / 47 days *Accounts receivable/Turnover ×365 / 6 days *Turnover/Total assets / 1.08 * Cost of goods sold/Turnover / 0.52

Profitability: Good  The turnover of subject appears good in its line in 2012.  Subject’s net profit margin is good in 2012.

THE KRELLER BUSINESS INFORMATION GROUP, INC.

 Subject’s return on total assets is good in 2012.  Subject’s cost of goods sold is low in 2012, comparing with its turnover. Liquidity: Average  The current ratio of subject is maintained in a fairly good level in 2011 but normal in 2012.  Subject’s quick ratio is maintained in a normal level in both years.  The inventory of subject appears fairly large in both years.  The accounts receivable of subject is maintained in an average level in both years.  The short-term loan of subject appears average in 2012.  Subject’s turnover is in an average level in 2012, comparing with the size of its total assets.

Leverage: Fairly Good  The debt ratio of subject is low in both years.  The risk for subject to go bankrupt is low.

Overall financial condition of the subject: Strong.