Huatai United Securities Co., Ltd
About Eastroc Beverage (Group) Co.Ltd(605499) (Group) Co., Ltd
Verification opinions on cash management with idle raised funds in 2022
In accordance with the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shanghai Stock Exchange, the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 1 – standardized operation and other relevant provisions, As a continuous supervision and recommendation institution for the initial public offering of shares by Eastroc Beverage (Group) Co.Ltd(605499) (Group) Co., Ltd. (hereinafter referred to as ” Eastroc Beverage (Group) Co.Ltd(605499) ” or “the company”), Huatai United Securities Co., Ltd. (hereinafter referred to as “Huatai United Securities” or “the recommendation institution”) checked the company’s use of idle raised funds for cash management in 2022, The specific verification conditions and opinions are as follows:
1、 Basic information of raised funds
With the approval of the reply on approving Eastroc Beverage (Group) Co.Ltd(605499) initial public offering of shares (zjxk [2021] No. 1572) issued by China Securities Regulatory Commission, the company issued 40010000 ordinary shares (A shares) in RMB for the initial public offering, and the total amount of funds raised was RMB 185126270000. After deducting the issuance expenses, the net amount of funds raised was RMB 173192675855, The above funds were put in place on May 21, 2021, and the capital verification report (PWC ztyz (2021) No. 0529) was verified and issued by PwC Zhongtian Certified Public Accountants (special general partnership).
2、 Basic information of cash management using idle raised funds this time
(I) purpose of cash management
In order to improve the use efficiency of the raised funds, the company and its wholly-owned subsidiaries reasonably use the temporarily idle raised funds for cash management without affecting the normal progress of the investment plan of the raised funds, so as to increase the company’s income and create more investment income for the company and all shareholders.
(II) source of funds
The funds used in this investment are idle raised funds of the company, which will be implemented on the premise of ensuring that the normal progress of the raised funds investment plan of the company and its wholly-owned subsidiaries will not be affected.
(III) types of financial products
The company’s idle investment products must meet the following risk control conditions:
1. High safety and low risk;
2. Good liquidity, which shall not affect the normal operation of the investment plan of the raised funds;
3. Investment products shall not be used for pledge.
(IV) amount and term of financial products
The company and its wholly-owned subsidiaries intend to use the idle raised funds of no more than 500 million yuan for cash management. The service life of the investment products shall be from the date of deliberation and approval of the general meeting of shareholders to the date of holding the annual general meeting of shareholders in 2022. The service life of the investment products shall not be longer than the above authorized service life and shall not exceed 12 months. Within the above use period and limit, the funds can be used in a circular and rolling manner.
(V) information disclosure
The company will timely disclose the specific situation of the company’s cash management in accordance with the requirements of relevant laws, regulations and normative documents 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, the stock listing rules of Shanghai Stock Exchange and the measures for the management of raised funds by listed companies of Shanghai Stock Exchange (revised in 2013), The purpose of the raised funds will not be changed in disguise.
(VI) income distribution mode
The proceeds obtained from cash management with temporarily idle raised funds shall be owned by the company. The company will manage and use them in strict accordance with the requirements of the CSRC and the Shanghai Stock Exchange on the regulatory measures for raised funds, and the cash will be returned to the special account for raised funds after the expiration of cash management.
3、 Risk control measures
1. Control security risks
The management of the company arranges relevant personnel of the investment department to analyze, evaluate, suggest and track the implementation of financial products, and has established a relatively perfect authorization and control system, which can make prudent decision-making and approval. During the investment period, once the person in charge judges or finds that there are adverse factors, the company will take corresponding preservation measures in time to control the investment risk to the greatest extent and ensure the safety of funds.
2. Guard against liquidity risk
The company will select the appropriate types and duration of financial products according to the use plan of raised funds to ensure that the normal use of raised funds will not be affected. The company’s independent directors, the audit committee of the board of directors, the board of supervisors and the recommendation institution have the right to supervise and inspect the use of the raised funds, and can hire professional institutions to audit when necessary, and the expenses shall be borne by the company. The investment scope of this investment and financial management is financial products with high security, good liquidity and low risk, and the investment products shall not be used for pledge.
4、 Impact on the company
Under the condition of ensuring the normal construction of the investment projects with raised funds, the company uses the temporarily idle raised funds for cash management, which will not affect the normal construction of the investment projects with raised funds, and there is no behavior of changing the purpose of the raised funds in disguise. At the same time, it can improve the efficiency of fund use, increase the income level of the company and obtain better investment return for shareholders.
5、 Risk tips
Although financial products are investment varieties with high security, good liquidity and low risk, the financial market is greatly affected by the macro-economy. The company will intervene timely and appropriately according to the economic situation and changes in the financial market, but it does not rule out that the investment is affected by market fluctuations.
6、 As of the date of issuance of this verification opinion, the company has used idle raised funds for cash management. As of the date of issuance of this verification opinion, the company has not used idle raised funds for cash management. 7、 Implementation of decision-making procedures
This matter has been deliberated and approved at the 13th meeting of the second board of directors and the 12th meeting of the second board of supervisors of the company. The independent directors of the company have expressed clear consent. This matter needs to be submitted to the general meeting of shareholders of the company for deliberation. Within the specified limit, the chairman of the company is authorized to exercise relevant decision-making power and sign relevant documents. His authority includes but is not limited to selecting qualified issuers of financial products, determining financial amount, selecting financial products, signing relevant contracts and agreements, etc. The investment department of the company is responsible for handling relevant matters.
8、 Verification opinions of the recommendation institution
After verification, the sponsor believes that: the company is in good operating condition at present. On the premise of ensuring the fund demand, fund safety and investment risk of the company’s investment projects with raised funds are effectively controlled, the use of idle raised funds for cash management does not change the purpose of raised funds in a disguised manner, which is in line with the interests of the company and all shareholders. The company’s proposal on using idle raised funds for cash management has been deliberated and approved at the 13th meeting of the second board of directors and the 12th meeting of the second board of supervisors, and the independent directors of the company have also expressed explicit consent. The proposal needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
In conclusion, the recommendation institution has no objection to the company’s cash management with idle raised funds in 2022.
