Common use of Financial Affairs and Accounting Clause in Contracts

Financial Affairs and Accounting. 16.1. The JVC shall establish an accounting organization, provide itself with accounting personnel and formulate its accounting system in accordance with the Accounting System of the PRC for Chinese-foreign Equity Joint Ventures and in the light of its own actual circumstances. The accounting system of the JVC must be filed for record with the Shanghai Finance Bureau and Shanghai Taxation Bureau. 16.2. The JVC shall prepare monthly, quarterly and annual financial statements, including a profit and loss statement, cash flow statement, balance sheet, and other forms. The Board of Directors shall engage a PRC qualified and registered public accounting firm as an independent auditor which shall examine and verify the annual financial reports of the JVC in accordance with the PRC laws and by reference to internationally used accounting methods. In addition, the JVC shall allow an internationally or PRC qualified auditor appointed by each Investing Party to examine its records, provided that, the Board of Directors will be given prior notice of such examination and the expenses incurred therefrom will be borne by the Investing Party which requests the examination. The annual financial reports and examination reports shall be delivered to each Director at least seven (7) days before the same are submitted to the Board of Directors for approval. The Annual financial reports and annual audit reports which have been approved by the Board of Directors shall be delivered to the Parties and the relevant governmental authorities for filing according to laws or regulations. 16.3. All expenditure documents of the JVC shall be valid only if signed by the General Manager or a person authorized thereby. The JVC shall use the invoices issued by the tax authority as evidence of receipt and payment. The invoices issued for the oversea (including Hong Kong and Macao) purchase of merchandise such as machinery, equipment, parts and components (where the custom declaration is required) will be deemed valid only if supported by declaration forms with the PRC ports of entry or custom declaration forms with the PRC customs. 16.4. The JVC shall adopt the internationally used accrual basis of accounting and the debit and credit method of keeping accounts in its accounting. All vouchers, books, receipts, statements and other accounting documents shall be written in Chinese. The JVC shall use Renminbi as its standard bookkeeping currency. 16.5. Except for the first year of the establishment of the JVC, the fiscal year of the JVC shall run from January 1 to December 31 of the Gregorian calendar year.

Financial Affairs and Accounting. 16.113.1 The JV Company shall have a CFO. The JVC CFO, under the leadership of the General Manager, shall establish an accounting organization, provide itself with accounting personnel be responsible for the financial management of the JV Company. 13.2 The General Manager and formulate its the CFO shall prepare the JV Company’s accounting system and procedures in accordance with the Enterprise Accounting System in the PRC and other relevant PRC laws and regulations, and shall submit the same to the Board for adoption. Once adopted by the Board, the accounting system and financial accounting procedures shall be filed with the department in charge of the PRC JV Company and with the relevant local department of finance and the tax authorities for Chinese-the record. 13.3 The JV Company shall adopt Renminbi as its bookkeeping base currency, but may also adopt United States Dollars or other foreign Equity Joint Ventures currencies as supplementary bookkeeping currencies. 13.4 All accounting records, vouchers, books and in the light of its own actual circumstances. The accounting system statements of the JVC JV Company must be filed for record made and kept in Chinese. Upon reasonable request, the JV Company shall provide each Party with the Shanghai Finance Bureau full access to its accounting records, vouchers, books and Shanghai Taxation Bureaustatements during normal business hours. 16.2. The JVC shall prepare monthly, quarterly 13.5 For the purpose of preparing the JV Company’s accounts and annual financial statements, including a profit and loss statement, cash flow statement, balance sheetcalculation of profits to be distributed to the Parties, and for any other forms. The purposes where it may be necessary to effect a currency conversion, such conversion shall be made using the median rate for buying and selling for such currency announced by the People’s Bank of China on the date of actual receipt or payment by the JV Company. 13.6 An accountant independent of any Party, who is registered in PRC, shall be engaged by the Board of Directors shall engage a PRC qualified and registered public accounting firm as an independent its auditor which shall to examine and verify the JV Company’s annual financial reports statements and reports. The JV Company shall submit to the Parties an annual statement of final accounts in both Chinese and English not later than sixty five (65) calendar days after the end of the JVC fiscal year in a form consistent with PRC laws and regulations. Upon request of Party B, the JV Company will prepare and submit to Party B quarterly statements within thirty (30) calendar days in a form consistent with PRC laws and regulations. The JV Company shall prepare and submit to the Parties financial statements in accordance with International Accounting Standards subject to an agreement between the Parties as to whether Party B or the JV Company shall bear the cost and expense to be incurred by the JV Company in connection therewith. 13.7 The JV Company shall separately open foreign exchange accounts and Renminbi accounts at banks within the PRC that have been approved and duly certified by the relevant PRC government authorities. Following approval by the State Administration of Foreign Exchange, the JV Company may also open foreign exchange bank accounts outside of the PRC. The JV Company shall apply for and maintain a Foreign Exchange Registration Certificate in accordance with applicable legal requirements. The JV Company’s foreign exchange transactions shall be handled in accordance with PRC laws and regulations concerning foreign exchange control. 13.8 The JV Company shall be responsible for maintaining a balance in its foreign exchange receipts and expenditures, primarily through the export of JV Products. However, in order to maintain such balance, the JV Company may also purchase foreign exchange from banks in accordance with the relevant laws of the PRC and adopt other methods permitted under the laws of the PRC. All costs incurred in converting Renminbi to foreign exchange in connection with the operating expenses of the JV Company shall be treated as operating expenses of the JV Company. 13.9 The JV Company shall adopt the calendar year as its fiscal year. The JV Company’s first fiscal year shall commence on the Company Establishment Date and shall end on the immediately succeeding December 31. 13.10 After payment of income taxes by reference to internationally used accounting methods. In addition, the JVC shall allow an internationally or PRC qualified auditor appointed by each Investing Party to examine its records, provided thatJV Company in accordance with relevant laws of China, the Board will determine the annual allocations to the Three Funds from the after-tax net profits. 13.11 The distribution of Directors will after-tax profits to the Parties shall be given prior notice handled in accordance with those laws of such examination the PRC that apply to financial administration of foreign-invested enterprises, and shall be carried out as follows: 13.11.1 The Board shall, once every year and by a formally adopted resolution, decide on the amount of after-tax profit of the JV Company (after allocations to the Three Funds) to be retained in the JV Company for expanding its production and operations and the expenses amount to be distributed to the Parties in proportion to their respective actual shares of the JV Company’s registered capital at the time of the Board resolution. 13.11.2 If the JV Company carries losses from the previous years, the profit of the current year shall first be used to cover those losses. No profit shall be distributed unless the deficit from the previous years is made up. The profit retained by the JV Company and carried over from the previous years may be distributed together with the distributable profit of the current year, or after the deficit of the current year is made up therefrom. 13.11.3 The profits available for distribution shall be calculated in Renminbi. After the JV Company has made payments in respect of its foreign exchange obligations, Party B shall be entitled to receive its share of profits in foreign exchange, with translation from Renminbi to United States Dollars for calculation purposes made at the median rate for buying and selling published by the People’s Bank of China on the date on which remittance to Party B is made. All costs incurred therefrom will in converting Renminbi to foreign currency in connection with the distribution of profits to Party B, including the remittance thereof, shall be borne by the Investing Party which requests the examination. The annual financial reports and examination reports shall be delivered to each Director at least seven (7) days before the same are submitted to the Board of Directors for approval. The Annual financial reports and annual audit reports which have been approved by the Board of Directors shall be delivered to the Parties and the relevant governmental authorities for filing according to laws or regulations. 16.3. All expenditure documents of the JVC shall be valid only if signed by the General Manager or a person authorized thereby. The JVC shall use the invoices issued by the tax authority as evidence of receipt and payment. The invoices issued for the oversea (including Hong Kong and Macao) purchase of merchandise such as machinery, equipment, parts and components (where the custom declaration is required) will be deemed valid only if supported by declaration forms with the PRC ports of entry or custom declaration forms with the PRC customs. 16.4. The JVC shall adopt the internationally used accrual basis of accounting and the debit and credit method of keeping accounts in its accounting. All vouchers, books, receipts, statements and other accounting documents shall be written in Chinese. The JVC shall use Renminbi as its standard bookkeeping currency. 16.5. Except for the first year of the establishment of the JVC, the fiscal year of the JVC shall run from January 1 to December 31 of the Gregorian calendar year.B.

Financial Affairs and Accounting. 16.1. The JVC shall establish an accounting organization, provide itself with accounting personnel and formulate its accounting system in accordance with the Accounting System of the PRC People’s Republic of China for Chinese-foreign Equity Joint Ventures and in the light of its own actual circumstancescircumstances and execute the accounting system upon the discussion and approval of the Board of Directors. The accounting system of the JVC must be filed for record with the Shanghai Guangzhou Finance Bureau and Shanghai Guangzhou Taxation Bureau. 16.2. The JVC shall prepare monthly, quarterly and annual financial statements, including a profit and loss statement, cash flow statement, balance sheet, cash flow statement and other forms. [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. The Board of Directors shall engage a PRC PRC-qualified and registered public accounting firm as an the independent auditor which shall to examine and verify the annual financial reports of the JVC in accordance with the PRC laws Laws and by reference to internationally used accounting methods. In addition, the JVC shall allow an internationally permit a qualified international or PRC qualified auditor appointed by each Investing Party to examine its recordsrecords on each behalf, provided that, the Board of Directors will be given prior notice of such examination and the expenses incurred therefrom will be borne by the Investing Party which requests requested the examination. The annual financial reports and examination reports shall be delivered to each Director at least seven (7) days before the same are submitted to the Board of Directors for approval. The Annual financial reports and annual audit reports which have been approved by the Board of Directors shall be delivered distributed to the Parties both Party A and Party B and to the relevant governmental authorities for filing according to laws or regulationsPRC Laws. 16.3. All expenditure documents of the JVC shall be valid only if processed in accordance with the financial accounting system and signed by the General Manager or a person authorized thereby. The JVC shall use the invoices issued by the tax authority as evidence of receipt and payment. The invoices issued for the oversea (including Hong Kong and Macao) purchase of merchandise such as machinery, equipment, parts and components (where the custom declaration is declarations are required) will be deemed valid only if supported by declaration forms with the PRC ports of entry or custom declaration forms with the PRC customs. 16.4. The JVC shall adopt the internationally used accrual basis of accounting and the debit and credit method of keeping accounts in its accounting. All vouchers, books, receipts, statements and other accounting documents shall be written printed in Chinese. The JVC shall use Renminbi as its standard bookkeeping currency. 16.5. Except for the first year of the establishment of the JVC, the The fiscal year of the JVC shall run from January 1 to December 31 of the Gregorian calendar year. The first fiscal year of the JVC shall run from the Closing Date to December 31 of the same year. 16.6. Each year, the JVC shall set aside out of its net profits certain amount for the Three Funds, the total of which shall not exceed ten percent (10%) of the net profits for that year. The specific amounts of the three Funds set aside and their percentages shall be decided by the Board of Directors without violating [**] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. relevant PRC Laws. In the event of the liquidation of the JVC, any unused portion of the reserve fund and expansion fund shall be treated as part of the assets of the JVC. 16.7. The net profits of the JVC after deductions of the Three Funds shall be distributed to the Parties in proportion to their respective contribution to the JVC. The JVC’s targeted profit distribution for each year shall be ranged from thirty to forty percent (30% - 40%) of its net profits. However, the amount of dividend to be distributed shall be determined by the Board of Directors based on the profit level, future cash flows, utilization of cash and the business development of the JVC.

Financial Affairs and Accounting. 16.1ACCOUNTING SYSTEM ----------------- 1) The CFO of the JV Company shall be responsible for the accounting affairs of the JV Company. Subject to Article 8, no expenditure shall be permitted out of the JV Company's accounts without written authorization jointly from (i) the CFO and (ii) either the CEO or the deputy general manager. 2) The JVC CFO shall establish an accounting organization, provide itself with accounting personnel and formulate its prepare the JV Company's accounting system in accordance with the Enterprise Financial and Accounting System of the PRC for Chinese-foreign Equity Joint Ventures and in the light of its own actual circumstances. The accounting system of the JVC must be filed for record with the Shanghai Finance Bureau and Shanghai Taxation Bureau. 16.2. The JVC shall prepare monthly, quarterly and annual financial statements, including a profit and loss statement, cash flow statement, balance sheet, and other forms. The Board of Directors shall engage a PRC qualified and registered public accounting firm as an independent auditor which shall examine and verify the annual financial reports of the JVC in accordance with the relevant PRC laws and by reference to internationally used accounting methods. In additionregulations, the JVC shall allow an internationally or PRC qualified auditor appointed by each Investing Party to examine its records, provided that, the Board of Directors will be given prior notice of and submit such examination and the expenses incurred therefrom will be borne by the Investing Party which requests the examination. The annual financial reports and examination reports shall be delivered to each Director at least seven (7) days before the same are submitted to the Board of Directors for approvaladoption. All relevant documentation relating to the accounting system shall be filed with the relevant government department in charge of the JV Company and with the relevant local department of finance and shall also be delivered to the relevant tax authorities for their records. The Annual CFO shall also maintain the financial reports of the JV Company, prepared in accordance with US GAAP. 3) The JV Company shall adopt Renminbi as its bookkeeping base currency, but upon request of all the Parties, may also adopt US Dollars, Hong Kong Dollars or other foreign currencies as supplementary bookkeeping currencies. 4) All accounting records, vouchers, books and annual statements of the JV Company must be made and kept in Chinese with the exception of the separate accounts to be prepared in accordance with US GAAP which may be kept in English. All financial statements and reports of the JV Company shall be made and kept in both Chinese and English. 5) The exchange rate between any applicable foreign currency and RMB for the purposes of profit and loss accounts shall be the end of the month rate quoted by the People's Bank of China or otherwise required under the Enterprise Financial and Accounting System. The exchange rate for any other financial statements and reports shall be the middle rate quoted by the People's Bank of China on the last date of the relevant accounting period. 6) The exchange rate between any applicable foreign currency and RMB for the purposes of entry of any accounting records, vouchers and books shall be the middle rate quoted by the People's Bank of China on the date of occurrence of the relevant transaction. FISCAL YEAR ----------- The JV Company shall adopt the Gregorian calendar year as its Fiscal Year. The JV Company's first Fiscal Year shall commence on the date of receipt of the Business License and shall end on the immediately succeeding December 31. 1) The Parties shall have full and equal access to the JV Company's accounts, which shall be kept at the legal address of the JV Company. The JV Company shall furnish to each Party unaudited financial reports on a monthly basis (within 20 days after the end of any month) and quarterly basis (within 30 days after the end of any quarter). In addition, each Party, at its own expense and upon advance notice to the JV Company, may appoint an accounting firm registered in the PRC or abroad to audit reports which have been approved the accounts of the JV Company on behalf of such Party. The JV Company shall permit any such accounting firm to examine all of its accounting and financial records and other documents subject to such accounting firm undertaking to maintain the confidentiality of such documents. 2) The JV Company shall engage one of the Specified Accountants to audit its accounts and issue an auditors' report. Drafts of the audited financial statements and report shall be provided to each Party and to the Board of Directors for review within two (2) months after the end of each Fiscal Year, and the final audited financial statements and report shall be completed not later than three (3) months after the end of each Fiscal Year. 3) The activities of the CEO and the CFO shall be reviewed and the related accounts audited by the JV Company on each of the following occasions: a) termination of tenure; b) removal by the Board of Directors shall be delivered to the Parties and the relevant governmental authorities for filing according to laws or regulations. 16.3. All expenditure documents of the JVC shall be valid only if signed by the General Manager or a person authorized thereby. The JVC shall use the invoices issued by the tax authority as evidence of receipt and payment. The invoices issued for the oversea (including Hong Kong and Macao) purchase of merchandise such as machinery, equipment, parts and components (where the custom declaration is required) will be deemed valid only if supported by declaration forms with the PRC ports of entry or custom declaration forms with the PRC customs. 16.4. The JVC shall adopt the internationally used accrual basis of accounting and the debit and credit method of keeping accounts in its accounting. All vouchers, books, receipts, statements and other accounting documents shall be written in Chinese. The JVC shall use Renminbi as its standard bookkeeping currency. 16.5. Except for the first year of the establishment of the JVC, the fiscal year of the JVC shall run from January 1 to December 31 of the Gregorian calendar year.Directors;

Financial Affairs and Accounting. 16.110.1 The JV Company shall have a CFO. The JVC CFO, under the leadership of the General Manager, shall establish an accounting organization, provide itself with accounting personnel be responsible for the financial management of the JV Company. 10.2 The General Manager and formulate its the CFO shall prepare the JV Company’s accounting system and procedures in accordance with the Enterprise Accounting System in the PRC and other relevant PRC laws and regulations, and shall submit the same to the Board for adoption. Once adopted by the Board, the accounting system and financial accounting procedures shall be filed with the department in charge of the PRC JV Company and with the relevant local department of finance and the tax authorities for Chinese-the record. 10.3 The JV Company shall adopt Renminbi as its bookkeeping base currency, but may also adopt United States Dollars or other foreign Equity Joint Ventures currencies as supplementary bookkeeping currencies. 10.4 All accounting records, vouchers, books and in the light of its own actual circumstances. The accounting system statements of the JVC JV Company must be filed for record made and kept in Chinese. Upon reasonable request, the JV Company shall provide each Party with the Shanghai Finance Bureau full access to its accounting records, vouchers, books and Shanghai Taxation Bureaustatements during normal business hours. 16.2. The JVC shall prepare monthly, quarterly 10.5 For the purpose of preparing the JV Company’s accounts and annual financial statements, including a profit and loss statement, cash flow statement, balance sheetcalculation of profits to be distributed to the Parties, and for any other forms. The purposes where it may be necessary to effect a currency conversion, such conversion shall be made using the median rate for buying and selling for such currency announced by the People’s Bank of China on the date of actual receipt or payment by the JV Company. 10.6 An accountant independent of any Party, who is registered in PRC, shall be engaged by the Board of Directors shall engage a PRC qualified and registered public accounting firm as an independent its auditor which shall to examine and verify the JV Company’s annual financial reports statements and reports. The JV Company shall submit to the Parties an annual statement of final accounts in both Chinese and English not later than sixty five (65) calendar days after the end of the JVC fiscal year in a form consistent with PRC laws and regulations. Upon request of Party B, the JV Company will prepare and submit to Party B quarterly statements within thirty (30) calendar days in a form consistent with PRC laws and regulations. The JV Company shall prepare and submit to the Parties financial statements in accordance with International Accounting Standards subject to an agreement between the Parties as to whether Party B or the JV Company shall bear the cost and expense to be incurred by the JV Company in connection therewith. 10.7 The JV Company shall separately open foreign exchange accounts and Renminbi accounts at banks within the PRC that have been approved and duly certified by the relevant PRC government authorities. Following approval by the State Administration of Foreign Exchange, the JV Company may also open foreign exchange bank accounts outside of the PRC. The JV Company shall apply for and maintain a Foreign Exchange Registration Certificate in accordance with applicable legal requirements. The JV Company’s foreign exchange transactions shall be handled in accordance with PRC laws and regulations concerning foreign exchange control. 10.8 The JV Company shall be responsible for maintaining a balance in its foreign exchange receipts and expenditures, primarily through the export of JV Products. However, in order to maintain such balance, the JV Company may also purchase foreign exchange from banks in accordance with the relevant laws of the PRC and adopt other methods permitted under the laws of the PRC. All costs incurred in converting Renminbi to foreign exchange in connection with the operating expenses of the JV Company shall be treated as operating expenses of the JV Company. 10.9 The JV Company shall adopt the calendar year as its fiscal year. The JV Company’s first fiscal year shall commence on the Company Establishment Date and shall end on the immediately succeeding December 31. 10.10 After payment of income taxes by reference to internationally used accounting methods. In addition, the JVC shall allow an internationally or PRC qualified auditor appointed by each Investing Party to examine its records, provided thatJV Company in accordance with relevant laws of China, the Board will determine the annual allocations to the Three Funds from the after-tax net profits. 10.11 The distribution of Directors will after-tax profits to the Parties shall be given prior notice handled in accordance with those laws of such examination the PRC that apply to financial administration of foreign-invested enterprises, and shall be carried out as follows: 10.11.1 The Board shall, once every year and by a formally adopted resolution, decide on the amount of after-tax profit of the JV Company (after allocations to the Three Funds) to be retained in the JV Company for expanding its production and operations and the expenses amount to be distributed to the Parties in proportion to their respective actual shares of the JV Company’s registered capital at the time of the Board resolution. 10.11.2 If the JV Company carries losses from the previous years, the profit of the current year shall first be used to cover those losses. No profit shall be distributed unless the deficit from the previous years is made up. The profit retained by the JV Company and carried over from the previous years may be distributed together with the distributable profit of the current year, or after the deficit of the current year is made up therefrom. 10.11.3 The profits available for distribution shall be calculated in Renminbi. After the JV Company has made payments in respect of its foreign exchange obligations, Party B shall be entitled to receive its share of profits in foreign exchange, with translation from Renminbi to United States Dollars for calculation purposes made at the median rate for buying and selling published by the People’s Bank of China on the date on which remittance to Party B is made. All costs incurred therefrom will in converting Renminbi to foreign currency in connection with the distribution of profits to Party B, including the remittance thereof, shall be borne by the Investing Party which requests the examination. The annual financial reports and examination reports shall be delivered to each Director at least seven (7) days before the same are submitted to the Board of Directors for approval. The Annual financial reports and annual audit reports which have been approved by the Board of Directors shall be delivered to the Parties and the relevant governmental authorities for filing according to laws or regulations. 16.3. All expenditure documents of the JVC shall be valid only if signed by the General Manager or a person authorized thereby. The JVC shall use the invoices issued by the tax authority as evidence of receipt and payment. The invoices issued for the oversea (including Hong Kong and Macao) purchase of merchandise such as machinery, equipment, parts and components (where the custom declaration is required) will be deemed valid only if supported by declaration forms with the PRC ports of entry or custom declaration forms with the PRC customs. 16.4. The JVC shall adopt the internationally used accrual basis of accounting and the debit and credit method of keeping accounts in its accounting. All vouchers, books, receipts, statements and other accounting documents shall be written in Chinese. The JVC shall use Renminbi as its standard bookkeeping currency. 16.5. Except for the first year of the establishment of the JVC, the fiscal year of the JVC shall run from January 1 to December 31 of the Gregorian calendar year.B.