20.

Retained earnings

Appropriated

Pursuant to the relevant PRC laws and regulations, the profits distribution of the Company’s PRC subsidiaries, which are based on their PRC statutory financial statements, rather than the financial statement that was prepared in accordance with U.S. GAAP, are available for distribution in the form of cash dividends after these subsidiaries have paid all relevant PRC tax liabilities, provided for losses in previous years, and made appropriations to statutory surplus at 10%.

When the statutory surplus reserve reaches 50% of the registered capital of a company, additional reserve is no longer required. However, the reserve cannot be distributed to venture partners. Based on the business licenses of the PRC subsidiaries, the registered capital of Henglong, Jiulong, Shenyang, Jielong, Wuhu, Hubei Henglong and Chongqing are $10.0 million, $4.2 million (equivalent to RMB35.0 million), $8.1 million (equivalent to RMB67.5 million), $6.0 million, $3.8 million (equivalent to RMB30.0 million), $39 million and $9.5 million (equivalent to RMB60.0 million), respectively, and the registered capital of USAI is $2.6 million.

The Company’s activities in respect of the amounts of appropriated retained earnings for the nine months ended September 30, 2015 and 2014, and the year ended December 31, 2014 are summarized as follows (figures are in thousands of USD):

					Year Ended
	Nine Months Ended September 30,				December 31,
	2015		2014		2014
Balance at beginning of the period	$	10,178	$	10,048	$	10,048
Appropriation of retained earnings		171		130		130
Balance at end of the period	$	10,349	$	10,178	$	10,178

Unappropriated

The Company’s activities in respect of the amounts of the unappropriated retained earnings for the nine months ended September 30, 2015 and 2014, and the year ended December 31, 2014 are summarized as follows (figures are in thousands of USD):

					Year Ended
	Nine Months Ended September 30,				December 31,
	2015		2014		2014
Balance at beginning of the period	$	179,435	$	146,023	$	146,023
Net income attributable to parent company		20,456		24,514		33,542
Appropriation of retained earnings		(171)		(130)		(130)
Balance at end of the period	$	199,720	$	170,407	$	179,435