Company: DDC
Filing Date: 2025-01-28
Form Type: 20-F
Source: 0001213900-25-007160
Chunk: 65

Company: DDC Enterprise Ltd
Filing Date: 2025-01-28
Form: 20-F
Item: Item 3
Chunk 65
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 strengthened its oversight of the flow and use of Renminbi capital converted from registered
capital in foreign currency of FIEs. The use of such Renminbi capital might not be changed without SAFE approval, and such Renminbi capital
might not in any case be used to repay Renminbi loans if the proceeds of such loans had not been utilized. On July 4, 2014, SAFE
issued the Circular of the SAFE on Relevant Issues Concerning the Pilot Reform in Certain Areas of the Administrative Method of the Conversion
of Foreign Exchange Funds by Foreign-invested Enterprises, or SAFE Circular 36, which launched the pilot reform of administration regarding
conversion of foreign currency registered capitals of FIEs in 16 pilot areas. According to SAFE Circular 36, some of the restrictions
under SAFE Circular 142 would not apply to the settlement of the foreign exchange capitals of an ordinary FIE in the pilot areas, and
such FIE was permitted to use Renminbi converted from its foreign-currency registered capital to make equity investments in the PRC within
and in accordance with the authorized business scope of such FIEs, subject to certain registration and settlement procedure as set forth
in SAFE Circular 36. On March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign
Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19. SAFE Circular 19 took effect as of June 1, 2015
and superseded SAFE Circular 36 and SAFE Circular 142 on the same date. SAFE Circular 19 launched a nationwide reform of the administration
of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion,
but continued to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capitals for (i) expenditure beyond
their business scopes or prohibited by the laws and regulations of the state, (ii) directly or indirectly investing in securities
unless otherwise provided by laws and regulations, (iii) providing entrusted loans in RMB (except where the business scope permits),
repaying loans between non-financial enterprises (including advances from third parties) or repaying RMB loans from bank that have been
transferred to third parties, (iv) paying the related expenses of purchasing real estate not for self-use except for foreign-invested
real estate enterprises. Violations of these Circulars could result in severe monetary or other