I. Overview of Financial Assistance Matters
(1) Basic Information
Shenzhen Hengdian East Magnetic Co., Ltd. (hereinafter referred to as "the Company") held the fifth meeting of the ninth board of directors and the fifth meeting of the ninth supervisory board on October 19, 2023, and November 7, 2023, respectively, as well as the second extraordinary general meeting of shareholders in 2023. The proposal regarding financial assistance to the controlling subsidiary DMEGC INVESTMENT PTE.LTD. (hereinafter referred to as "Singapore East Magnetic") was approved, allowing the Company to provide financial assistance through its wholly-owned subsidiary Hengdian Group East Magnetic Co., Ltd. Hong Kong (hereinafter referred to as "Hong Kong East Magnetic"). The financial assistance, primarily for investment in the overseas photovoltaic industry chain, totals no more than $80 million, with a term of three years and an annual interest rate of 8%. Specific announcement details can be found in the Company's announcement published on October 20, 2023, in the Securities Times and on the Giant Tide Information Network (www.cninfo.com.cn). On March 11, 2025, and April 15, 2025, the Company held the nineteenth meeting of the ninth board of directors and the thirteenth meeting of the ninth supervisory board, as well as the annual general meeting of shareholders for 2024, where the proposal to provide financial assistance to its controlling subsidiary DM INTERNATIONAL INVESTMENT PTE. LTD. (hereinafter referred to as "DM INVESTMENT") was approved. The financial assistance, primarily for investment in overseas magnetic materials projects, totals no more than RMB 115 million, with a term of three years and an annual interest rate of 5%. Specific announcement details can be found in the Company's announcement published on March 12, 2025, in the Securities Times and on the Giant Tide Information Network (www.cninfo.com.cn). As of October 31, 2025, the balance of financial assistance provided by the Company through Hong Kong East Magnetic to Singapore East Magnetic is $23.4206 million, and the balance of financial assistance provided to DM INVESTMENT is $11.8924 million. Other shareholders of Singapore East Magnetic, SUNDELL PTE.LTD. (hereinafter referred to as "SUNDELL"), and all members of the board of directors guarantee that the information disclosed is true, accurate, and complete, without false records, misleading statements, or significant omissions.
(2) Review Procedures
Since SUNDELL and HG SINGAPORE are also controlled by the Company's controlling shareholder Hengdian Group Holdings Co., Ltd. (hereinafter referred to as "Hengdian Holdings"), according to the relevant provisions of the Shenzhen Stock Exchange Listing Rules, SUNDELL and HG SINGAPORE are related legal entities of the Company. This adjustment of financial assistance interest rates constitutes a related transaction but does not fall under significant asset restructuring. In accordance with the Shenzhen Stock Exchange Listing Rules and the Company's Articles of Association, independent directors held a special meeting to review this adjustment of financial assistance interest rates and related transactions, and all independent directors agreed. The Company's ninth board of directors approved the proposal regarding the adjustment of financial assistance interest rates to subsidiaries and related transactions at its twenty-sixth meeting, with related directors abstaining from voting. This matter still needs to be submitted to the Company's extraordinary general meeting of shareholders for review, and related shareholders should abstain from voting.
II. Adjustment of Interest Rates
To align with the downward trend of market interest rates and reduce the operational burden on subsidiaries, the C