Independent Auditor's Report on the Company's Fund Raising, Management, and Use for the Year
Dahua Audit [2026] No. 0011002264
To all shareholders of Xuchang Far East Drive Shaft Co., Ltd.:
We have audited the accompanying Special Report on the Storage, Management, and Use of Raised Funds for 2025 of Xuchang Far East Drive Shaft Co., Ltd. (hereinafter referred to as "Far East Drive Shaft") (hereinafter referred to as the "Special Report on Raised Funds").
I. Responsibilities of the Board of Directors
The responsibility of the Board of Directors of Far East Drive Shaft is to prepare the Special Report on Raised Funds in accordance with the "Supervision Regulations on the Management of Raised Funds by Listed Companies" issued by the China Securities Regulatory Commission, the "Code of Corporate Governance for Main Board Companies" issued by the Shenzhen Stock Exchange, and relevant format guidelines, and to ensure that its content is true, accurate, and complete, and does not contain any false records, misleading statements, or material omissions.
II. Responsibilities of the Certified Public Accountants
Our responsibility is to express an opinion on the Special Report on Raised Funds of Far East Drive Shaft based on our assurance engagement. We performed the assurance engagement in accordance with the "Chinese Certified Public Accountants' Other Assurance Services Standards No. 3101—Assurance Engagements Other Than Audits or Reviews of Historical Financial Information." This standard requires us to plan and perform the assurance engagement to obtain reasonable assurance about whether the Special Report on Raised Funds of Far East Drive Shaft is free from material misstatement.
During the assurance engagement, we performed procedures including obtaining an understanding of, inquiring about, inspecting, recalculating, and other procedures that we considered necessary. We believe that our assurance work provides a reasonable basis for our opinion.
III. Assurance Conclusion
We are of the opinion that the Special Report on Raised Funds of Far East Drive Shaft has been prepared, in all material respects, in accordance with the "Supervision Regulations on the Management of Raised Funds by Listed Companies" issued by the China Securities Regulatory Commission, the "Code of Corporate Governance for Main Board Companies" issued by the Shenzhen Stock Exchange, and relevant format guidelines. In all material respects, it fairly reflects the storage, management, and use of raised funds by Far East Drive Shaft for 2025.
IV. Limitation on the Use and Purpose of the Report
This report is intended solely for the purpose of disclosure in the annual report of Far East Drive Shaft and shall not be used for any other purpose. We agree that this report shall be an essential document of the annual report of Far East Drive Shaft, to be submitted and disclosed along with other documents.
Dahua Certified Public Accountants (Special General Partnership)
Certified Public Accountant: [blank] Certified Public Accountant: [blank] Certified Public Accountant: [blank]
March 26, 2026
Special Report on the Storage, Management, and Use of Raised Funds for 2025
Xuchang Far East Drive Shaft Co., Ltd. 2025 Annual Special Report on the Storage, Management, and Use of Raised Funds
I. Basic Situation of Raised Funds
As approved by the China Securities Regulatory Commission's "Approval for Xuchang Far East Drive Shaft Co., Ltd. to Publicly Issue Convertible Corporate Bonds" (Zheng Jian Xu Ke [2019] No. 1492) and with the consent of the Shenzhen Stock Exchange, the Company publicly issued convertible corporate bonds with a face value of RMB 893.7 million and a term of 6 years. As of September 27, 2019, the Company had actually publicly issued 8,937,000 convertible corporate bonds to the public, raising a total of RMB 893,700,000.00. After deducting underwriting and sponsorship fees of RMB 12,171,250.00, the raised funds amounted to RMB 881,528,750.00. These funds were deposited into the Company's special bank account for raised funds by Huachuang Securities Co., Ltd. on September 27, 2019 (of which, RMB 801,528,750.00 was deposited into the Xuchang Branch of China Merchants Bank Co., Ltd., and RMB 80,000,000.00 was deposited into the Laodong Road Branch of China Zhongyuan Bank Co., Ltd.). After deducting other issuance expenses of RMB 3,490,000.00, the net amount of raised funds was RMB 878,038,750.00.