Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 29

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 29
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 government may
also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control
system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders.

Failure to make adequate contributions to various
employee benefit plans as required by PRC regulations may subject us to penalties.

Xingfa is required under PRC laws and regulations
to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented
payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances,
of its employees up to a maximum amount specified by the local government from time to time at locations where Xingfa operate its businesses.
The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different
levels of economic development in different locations. As of the date of this report, we believe that Xingfa has made employee benefit
payments in material aspects. If Xingfa fails to make adequate payments in the future, it may be required by the social security premium
collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine computed
from the due date at 0.05% per day; where payment is not made within the stipulated period, the relevant administrative authorities
shall impose a fine ranging from one to three times the amount in arrears. If Xingfa is subject to fines in relation to
the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

  22  

Non-compliance with labor-related laws and regulations
of the PRC may have an adverse impact on our financial condition and results of operation.

Xingfa has been subject to stricter regulatory requirements
in entering into labor contracts with its employees and paying various statutory employee benefits, including pensions, housing
fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies
for the benefit of its employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective in January
2008 and was amended in December 2012 and became effective on July 1, 2013, and its implementing rules that became effective in September
2008, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining
the term of