Securities code: Chengdu Dahongli Machinery Co.Ltd(300865) securities abbreviation: Chengdu Dahongli Machinery Co.Ltd(300865) Announcement No.: 2022011 Chengdu Dahongli Machinery Co.Ltd(300865) about use
Announcement on temporarily replenishing working capital with some idle raised funds
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Special tips:
With the deliberation and approval of the 26th meeting of the third session of the board of directors, the company plans to use the idle raised funds of no more than 30 million yuan to temporarily supplement the working capital, and the period for supplementing the working capital shall not exceed 12 months from the date of deliberation and approval of the board of directors.
Chengdu Dahongli Machinery Co.Ltd(300865) (hereinafter referred to as “the company”) held the 26th meeting of the third board of directors and the 20th meeting of the third board of supervisors on March 2, 2022, deliberated and adopted the proposal on using some idle raised funds to temporarily supplement working capital, It is agreed that the company will temporarily supplement the working capital with idle raised funds with a maximum amount of no more than 30 million yuan (including this amount) on the premise of ensuring the capital demand for the construction of the raised capital investment project (hereinafter referred to as the “raised capital project”) and the normal progress of the raised capital investment project, and the service life is no more than 12 months from the date of deliberation and approval by the board of directors, Return to the special account for raised funds when due. Relevant matters are hereby announced as follows:
1、 Basic information of raised funds
According to the approval on Approving the registration of Chengdu Dahongli Machinery Co.Ltd(300865) initial public offering of shares (zjxk [2020] No. 1578) issued by China Securities Regulatory Commission, the company issued 23.92 million RMB common shares (A shares) in the form of public offering, with an issue price of 20.20 yuan per share. As of August 13, 2020, the company has actually issued 23.92 million RMB common shares (A shares) to the public, and the total amount of funds raised is 48318400000 yuan. After deducting 5527739472 yuan (excluding tax) of issuance expenses such as underwriting recommendation fee, audit fee, lawyer fee, information disclosure fee and other issuance expenses, the net amount of funds actually raised is 42790660528 yuan. All the above funds have been in place and have been reported by Daxin accounting. The company has opened a special account to store the above raised funds and signed a tripartite supervision agreement.
2、 Use of raised funds
1. Use plan and use of raised funds
According to the investment projects of raised funds disclosed in the prospectus for initial public offering and listing on gem of the company, the raised funds are intended to be invested in the following projects:
Unit: Yuan
Total investment amount of projects invested by raised funds utilization of committed investment amount of raised funds as of February 23, 2022
Crushing and screening (complete set) 286650 China Vanke Co.Ltd(000002) 86650 Shenzhen Zhenye(Group)Co.Ltd(000006) 304089005
Intelligent technical transformation project
Technology center construction project 41050 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 1050 China Vanke Co.Ltd(000002) 590799480
Marketing Service Center project 40290 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 02900 Shenzhen Capstone Industrial Co.Ltd(000038) 3303544
Total 367990 China Baoan Group Co.Ltd(000009) 278192029
As the construction of the project invested by the raised funds needs a certain period, the project funds will be gradually invested in stages and batches according to the actual progress of the project, and the investment direction of the over raised funds has not been determined yet. It is expected that some of the raised funds will remain idle in the short term.
2. Advance investment and replacement of raised investment projects
On November 9, 2020, the company held the 15th meeting of the third board of directors and the 10th meeting of the third board of supervisors respectively. The meeting deliberated and adopted the proposal on using raised funds to replace self raised funds and paid issuance expenses of projects invested in raised funds in advance, It is agreed that the company will use the raised funds to replace the self raised funds invested in the raised investment projects in advance and the self raised funds paid for the issuance expenses, totaling 1271118508 yuan. Daxin Certified Public Accountants (special general partnership) verified the replacement and issued the audit report of Chengdu Chengdu Dahongli Machinery Co.Ltd(300865) Machinery Co., Ltd. replacing the self raised funds and paid issuance expenses invested in the raised funds project with raised funds (Daxin zhuanshen Zi [2020] No. 1400093). The independent directors of the company expressed clear consent to the above proposal, and the sponsor Guodu Securities Co., Ltd. issued verification opinions on agreeing to the replacement. 3. Cash management of idle raised funds
On November 9, 2020, the company held the 15th meeting of the third board of directors and the 10th meeting of the third board of supervisors respectively. The meeting deliberated and adopted the proposal on cash management with idle raised funds, It is agreed that the company will use the idle raised funds with an amount of no more than RMB 380 million to carry out cash management under the condition of ensuring that the construction of investment projects with raised funds and ensuring the safety of funds are not affected. The idle raised funds will be used to purchase low-risk financial products with high security and good liquidity (including but not limited to agreed deposits, structured deposits, time deposits, large certificates of deposit, etc.). Within the above limit, the funds can be used on a rolling basis, and the service life will be effective within 12 months from the date of deliberation and approval at the fourth extraordinary general meeting of shareholders in 2020. The independent directors of the company expressed clear consent to the above proposal, and the sponsor Guodu Securities Co., Ltd. issued verification opinions agreeing to the matter.
The company held the 24th Meeting of the 3rd board of directors and the 18th meeting of the 3rd board of supervisors on November 25, 2021. The meeting deliberated and adopted the proposal on cash management with idle raised funds, It is agreed that the company will use the idle raised funds with a limit of no more than RMB 260 million to carry out cash management without affecting the construction of the investment projects invested by the raised funds and ensuring the safety of the funds. The idle raised funds will be used to purchase low-risk financial products with high security and good liquidity (including but not limited to agreed deposits, structured deposits, time deposits, large certificates of deposit, etc.). Within the above limit, the funds can be used on a rolling basis, and the service life will be effective within 12 months from the date of deliberation and approval by the board of directors. The independent directors of the company expressed clear consent to the above proposal, and the sponsor Guodu Securities Co., Ltd. issued verification opinions agreeing to the matter.
3、 Temporary replenishment of working capital with some idle raised funds this time
1. Amount and term of temporarily replenishing working capital with some idle raised funds
In order to improve the use efficiency of funds, reduce the financial expenses of the company, safeguard the interests of the company and shareholders, and ensure the production and operation of the company, under the premise of ensuring the capital demand and normal progress of the construction of the projects with raised funds, according to the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies According to the guidelines on self discipline supervision of Listed Companies in Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and the company’s management system for raised funds, the company will temporarily supplement working capital with idle raised funds of no more than 30 million yuan, and the service life shall not exceed 12 months from the date of deliberation and approval at the 26th meeting of the third board of directors, It will be returned to the special account for raised funds upon expiration.
2. Reasons for temporarily replenishing working capital with some idle raised funds
With the continuous growth of business scale and operating income, the company’s demand for working capital also expands. The use of some idle raised funds to temporarily supplement working capital is mainly due to the rise in the market price of the company’s main raw materials (steel). In order to ensure the orderly development of its main business and arrange production, the company needs more funds to ensure the necessary raw material reserves, Part of the working capital is used in inventory, tightening the chain of the company’s working capital; Second, the company’s EPC project cycle is long, which leads to the longer return time of sales funds, the increase of prepayment, the rapid growth of net accounts receivable and the pressure of working capital to a certain extent. Therefore, the company’s working capital is tight, and the net amount of accounts receivable increases rapidly, which intensifies the pressure of working capital. The company uses part of the idle raised funds to temporarily supplement the working capital, which does not change the purpose of the raised funds and damage the interests of shareholders, nor will it affect the normal progress of the investment projects of the raised funds. The temporary supplement of working capital is only limited to the production and operation related to the main business.
The company uses some idle raised funds to temporarily supplement working capital, which is expected to save about 1.38 million yuan of financial expenses. If the use progress of the raised funds is accelerated due to the needs of the investment projects with raised funds, the company will return them in advance in time to ensure the normal operation of the investment projects with raised funds.
4、 Relevant commitments to temporarily supplement working capital with some idle raised funds this time
1. The company will temporarily supplement the working capital with the above idle raised funds, which will not affect the normal progress of the investment plan of the raised funds, and will not change the purpose of the raised funds in a disguised form;
2. Before the above idle raised funds are temporarily used to supplement working capital, the company will return the funds to the special account for raised funds in time;
3. The idle raised funds to supplement the working capital temporarily are limited to the production and operation related to the main business, and are not used for the placement and purchase of new shares, or for the trading of stocks and their derivatives, convertible corporate bonds, etc. through direct or indirect arrangements. During the period of using idle raised funds to supplement working capital, the company will not make venture capital investment or provide financial assistance to objects other than holding subsidiaries. The company will use the raised funds in strict accordance with the relevant policies and regulations on the management of raised funds, and disclose them in time after performing the corresponding review procedures.
5、 Review and approval procedures and relevant opinions
In accordance with the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the articles of association and other relevant provisions, the proposal on using some idle raised funds to temporarily supplement working capital has been deliberated and adopted at the 26th meeting of the third board of directors and the 20th meeting of the third board of supervisors, and has been approved by independent directors.
1. Deliberations of the board of directors
On March 2, 2022, the company held the 26th meeting of the third board of directors, which deliberated and approved the proposal on using some idle raised funds to temporarily supplement working capital, and agreed to use idle raised funds of no more than 30 million yuan to temporarily supplement working capital, The term of use shall not exceed 12 months from the date of deliberation and approval at the 26th meeting of the third board of directors of the company, and will be returned to the special account for raised funds at the expiration of the term.
The board of Directors believes that the use of some idle raised funds to temporarily supplement working capital will help improve the use efficiency of raised funds, protect the production and operation of the company, comply with the interests of the company and shareholders, and comply with the relevant provisions of the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies and the company’s management system of raised funds.
2. Opinions of independent directors
The independent directors of the company believe that the company will temporarily supplement some idle raised funds with working capital, which will help to improve the use efficiency of idle raised funds and reduce the company’s financial expenses, which is in line with the interests of the company and shareholders. The company’s use of some idle raised funds to temporarily supplement working capital meets the relevant provisions of the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the guidelines for the self-discipline supervision of listed companies No. 2 – standardized operation of GEM listed companies of Shenzhen stock exchange, and the company’s management system for raised funds, It has not affected the implementation plan and construction progress of the project invested by the raised funds, and there is no situation damaging the interests of minority shareholders. It is agreed that the company will use the idle raised funds to supplement the working capital temporarily.
2. Opinions of the board of supervisors
On March 2, 2022, the company held the 20th meeting of the third board of supervisors, which deliberated and adopted the proposal on using some idle raised funds to temporarily supplement working capital. The board of supervisors believes that the company will temporarily supplement some idle raised funds with working capital, which will help to improve the use efficiency of raised funds and meet the interests of the company and shareholders. The company’s use of some idle raised funds to temporarily supplement working capital meets the relevant provisions of the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the guidelines for the self-discipline supervision of listed companies No. 2 – standardized operation of GEM listed companies of Shenzhen stock exchange, and the company’s management system for raised funds, It has not affected the implementation plan and construction progress of the project invested by the raised funds, and there is no situation damaging the interests of minority shareholders. It agrees with the company’s proposal to use the idle raised funds to temporarily supplement the working capital.
3. Opinions of the sponsor
The company’s use of some idle raised funds to temporarily supplement working capital has been deliberated and adopted at the 26th meeting of the third board of directors and the 20th meeting of the third board of supervisors; The independent directors expressed their consent and fulfilled the necessary approval procedures, which met the requirements of relevant regulations such as the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, and the guidelines for the self-discipline supervision of listed companies No. 2 – standardized operation of Companies listed on the gem of Shenzhen Stock Exchange. According to the company’s plan to use part of the idle raised funds to temporarily supplement the working capital, the idle raised funds temporarily supplement the working capital, do not change the purpose of the raised funds in a disguised form, do not affect the normal progress of the investment plan of the raised funds, and the idle raised funds are used for the production and operation related to the main business, and the time of single supplement of working capital does not exceed 12 months.
Guodu Securities Co., Ltd. has no objection to the company’s use of some idle raised funds to temporarily supplement working capital.
6、 Documents for future reference
1. Resolutions of the 26th meeting of the third board of directors of the company;
2. Independent opinions of the company’s independent directors on matters related to the 26th meeting of the third board of directors.; 3. Resolutions of the 20th meeting of the third board of directors of the company;
4. Verification opinions on Chengdu Dahongli Machinery Co.Ltd(300865) using some idle raised funds to temporarily supplement working capital issued by Guodu Securities Co., Ltd.
It is hereby announced.
