Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

The accompanying unaudited condensed consolidated financial statements of Andatee reflect the principal activities of the following entities. The non-controlling interests represent the minority stockholders’ interest in the Group’s majority owned subsidiaries. All material intercompany transactions have been eliminated.

Name of the entity	Place of Incorporation	Ownership Percentage
Andatee China Marine Fuel Services Corp.	Delaware		Parent
Goodwill Rich International Corp., (“Goodwill Rich”)	Hong Kong		100	%
Dalian Fusheng Petrochemical Company ("Fusheng") (“WOFE”)	Dalian, China		WOFE, 100	%
Dalian Xingyuan Marine Bunker Co., Ltd (“Xingyuan”) (“VIE”)	Dalian, China		VIE,100	%
Shangdong Shengfu Petrochemical Company, Ltd.(“Shandong Shengfu”)	Shandong, China		100	%
Dalian Xifa Petrochemical Company, Ltd.(“Dalian Xifa”),	Dalian, China		100	%
Shandong Xifa Prochemical Company, Ltd. (“Shandong Xifa”)	Shandong, China		100	%
Shenzhen Shengfu Petrochemical Company, Ltd.( “Shenzhen Shengfu”)	Shenzhen, China		100	%
Donggang Xingyuan Marine Fuel Company (“Donggang Xingyuan”),	Donggang, China		100	%
Rongcheng Zhuoda Trading Co (“Zhuoda”)	Shandong, China		100	%
Wujiang Xinlang Petrochemical Company ("Xinglang")	Wujiang, China		90	%
Xiangshan Yongshi Nanlian Petroleum Company (“Nanlian”). (Note A)	Zhejiang, China		63	%
Rongcheng Xinfa Petroleum Company (“Xinfa”)	Shandong, China		90	%
Suzhou Fusheng Petrochemical Company ("Suzhou Fusheng")	Suzhou, China		61	%
Hailong Petrochemical Company (“Hailong”)	Tianjin, China		52	%
Rongcheng Mashan Xingyuan (“Mashan Xingyuan”	Shandong, China		52	%
Shanghai Fusheng Petrochemical Company, Ltd.( “Shanghai Fusheng”)	Shanghai, China		100	%
Lianyungang Fusheng Petrochemical Co., Ltd. (“Lianyungang Fusheng”) (Note B)	Lianyungang, China		100	%
Lianyungang Xingyuan Marine Bunker Co., Ltd. (“Lianyungang Xingyuan”) (Note B)	Lianyungang, China		100	%

Note A: During the quarter ended September 30, 2013, Dalian Xingyuan acquired the remaining 37% capital shares from Xiangshan Nanlian’s minority shareholder Mr. Chen Wenwei for cash consideration of RMB 11.2 million. Xiangshan Nanlian completed the registration change with the local State Administration of Industry and Commerce (the “SAIC”) on July 29, 2013 to reflect the share structure change. After the acquisition, Xiangshan Nanlian became 100% controlled subsidiary of Dalian Xingyuan. The acquisition was treated as a related party transaction because former minority shareholder Mr. Chen Weiwen still serves as the legal representative of Xiangshan Nanlian after the acquisition. See Note 11 “related party transaction”.

Note B:On June 7, 2013, Dalian Fusheng formed a new subsidiary Lianyungang Fusheng Petrochemical Co., Ltd. (“Lianyungang Fusheng”) in the city of Lianyungang under the laws of the PRC with registered capital of $4.69 million (RMB 29,000,000). In addition, on June 7, 2013, Dalian Xingyuan formed a new subsidiary Lianyungang Xingyuan Marine Bunker Co., Ltd. (“Lianyungang Xingyuan”) in the city of Lianyungang under the laws of the PRC with registered capital of $3.4 million (RMB 21,000,000). Both Lianyungang Fusheng and Lianyungang Xingyuan will be engaged in the production, storage, distribution and trading of blended marine fuel oil for cargo and fishing vessels in the PRC.

Schedule Of Translation Adjustment Functional To Reporting Currency

Translation of amounts from RMB into the US dollar has been made at the following exchange rates for the respective years:

	September 30, 2013		December 31, 2012		September 30, 2012
Period end RMB : USD exchange rate		6.1364		6.3011		6.3340
Average RMB : USD exchange rate		6.2132		6.3034		6.3275

Property, Plant and Equipment Estimated Useful Life

Depreciation is provided to recognize the cost of the asset in the results of operations. The Company calculates depreciation using the straight-line method with estimated useful life as follows

Items		Useful Life
Property and buildings		40 years
Marine bunkers		15 years
Equipment		3-12 years
Transportation vehicles		8 years

Amortization of Intangible Assets Estimated Useful Lives

Intangible assets are amortized using the straight-line method with the following estimated useful lives:

Items		Useful Life
Land use rights		50 years
Leasehold right		20 years
Licenses and permits		Contract Terms
Software		5 years