Company: XXC
Filing Date: 2025-11-18
Form Type: 20-F
Source: 0001213900-25-111691
Chunk: 104

Company: XINXU COPPER INDUSTRY TECHNOLOGY Ltd
Filing Date: 2025-11-18
Form: 20-F
Item: Item 19
Chunk 104
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 with the
regulations of the PRC State Administration of Work Safety, the Company’s subsidiary, Anhui Xinxu Ltd. is required to incur
safety production funds, which will be used for enhancement of production safety and improvement of facilities at the rate of: 3% of
the actual sales income for the year below RMB10million; 1.5% of the actual sales income for the year between
RMB10million and RMB100million (included); 0.5% of the actual sales income for the year between RMB100million and
RMB1billion (included); 0.2% of the actual sales income for the year between RMB1billion and RMB5billion
(included); 0.1% of the actual sales income for the year between RMB5billion and RMB10billion (included); 0.05% of the
actual sales income for the year above RMB10billion. Company has an option of not appropriating the safety production funds
after the reserve is equal to5% of the subsidiary’s last fiscal year sales revenue. As of June 30, 2025 and 2024, the
Company appropriated safety production funds, which were included in the special reserve under equity, in the amount of $2,686,899for both years. Under PRC laws and regulations, special reserves are restricted to set off against the cost from enhancement of
production safety and improvement of facilities, and are not distributable in terms of cash dividends, loans or advances except
under liquidation.

Pursuant to Chinese Company
law applicable to foreign investment companies, the Company’s PRC subsidiaries are required to maintain statutory surplus reserves.
The statutory surplus reserves are to be appropriated from net income after taxes and should be at least10% of the after-tax net
income determined in accordance with accounting principles and relevant financial regulations applicable to PRC enterprises (“non-US GAAP”).
The Company has an option of not appropriating the statutory surplus reserve after the statutory surplus reserve is equal to50% of the
subsidiary’s registered capital. Statutory surplus reserves are recorded as a component of shareholders’ equity. Per the PRC
GAAP, the Company’s PRC subsidiaries can also use the statutory surplus reserves, to make up for previous year’s accumulated
deficit. As of June 30, 2025, the Company has statutory surplus reserve of $130,878.