Quarterly report pursuant to Section 13 or 15(d)

Statutory Reserve

v3.19.2
Statutory Reserve
6 Months Ended
Jun. 30, 2019
Statutory Reserve [Abstract]  
STATUTORY RESERVE

NOTE 16 – STATUTORY RESERVE

 

Avalon Shanghai and Beijing GenExosome operate in the PRC, are required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year.

 

The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. The Company did not make any appropriation to statutory reserve for Avalon Shanghai and Beijing GenExosome during the six months ended June 30, 2019 as they incurred net losses in the period.