Subject to the Companies Act (As Revised) of the Cayman Islands and the Company’s articles of association (the “Articles of Association”), the Company may declare dividends in any currency through a general meeting, but no dividend may be declared in excess of the amount recommended by the board of directors (the “Directors”) of the Company (the “Board”). The Articles of Association provide that no dividend or other distribution shall be paid except out of the realized or unrealized profits of the Company, out of the share premium account of the Company or as otherwise permitted by the law in the Cayman Islands.

In addition, the declaration of dividends is subject to the discretion of the Board, and the amounts of dividends actually declared and paid will also depend on:
• actual and expected results of operations of the Company and its subsidiaries (the “Group”);
• cash flow and financial position of the Group;
• general business conditions and business strategies of the Group;
• expected working capital requirements and future expansion plans of the Group;
• legal, regulatory and other contractual restrictions; and
• any other factors which the Board may deem to be appropriate.

Future dividend payments to the shareholders of the Company will also depend upon the availability of dividends received from the PRC subsidiaries. PRC laws require that dividends be paid out of the net profit calculated according to PRC accounting principles. PRC laws also require PRC enterprises to set aside part of their net profit as statutory reserves before they distribute the net proceeds. These statutory reserves are not available for distribution as cash dividends. In addition, the dividends paid by the PRC subsidiaries are also subject to the withholding tax imposed by the PRC laws.

The Board has absolute discretion in whether to declare any dividend for any year and, if it decides to declare a dividend, how much dividend to declare. There is no assurance that the Company will be able to distribute dividends of any amount each year or in any year. The Company will continue to periodically re-evaluate the dividend policy in light of the financial position and the prevailing economic climate. The determination to pay dividends will be made at the discretion of the Board and will be based upon the earnings, cash flow, financial conditions, capital requirements, statutory fund reserve requirements of the Group and any other conditions that the Directors deem relevant.