Huarong Securities Co., Ltd
About Tianjin Yiyi Hygiene Products Co.Ltd(001206)
Verification opinions on using idle self owned funds for cash management
Huarong Securities Co., Ltd. (hereinafter referred to as “Huarong securities” or “sponsor”) is the sponsor of initial public offering and listing of Tianjin Yiyi Hygiene Products Co.Ltd(001206) (hereinafter referred to as ” Tianjin Yiyi Hygiene Products Co.Ltd(001206) ” or “company”), In accordance with the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shenzhen Stock Exchange (revised in January 2022), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 13 – recommendation business, Carefully check the cash management matters of Tianjin Yiyi Hygiene Products Co.Ltd(001206) using idle self owned funds. The specific verification conditions and verification opinions are as follows:
1、 Basic information of cash management using idle self owned funds
(I) investment purpose
In order to further improve the use efficiency of funds and make rational use of idle self owned funds, we can better maintain and increase the value of the company’s funds and protect the interests of the company’s shareholders without affecting the daily production and operation of the company and its wholly-owned subsidiaries and ensuring the safety and liquidity of funds.
(II) investment quota
It is proposed to use idle self owned funds with an amount not exceeding 100 million yuan (including 100 million yuan) for cash management.
(III) investment varieties
Idle self owned funds are intended to purchase financial products with high security, good liquidity, low and medium risk and relatively fixed income through banks, trusts, securities and other financial institutions.
(IV) investment period
The validity period of the quota shall not exceed 12 months (including 12 months) from the date of deliberation and approval by the board of directors. Within the above-mentioned period and limit, the funds can be used on a rolling basis.
Within the scope and validity period of the above investment quota, the board of directors of the company authorizes the operation and management of the company to exercise relevant decision-making power, which shall be implemented by the finance department.
(VI) source of funds
The funds used to purchase financial products are idle self owned funds, and the source of funds is legal and compliant.
(VII) information disclosure
The company will timely disclose the specific situation of specific cash management business in accordance with relevant requirements such as the stock listing rules of Shenzhen Stock Exchange (revised in January 2022) and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board.
(VIII) relationship
There is no relationship between the company and the issuer of financial products.
2、 Investment risk and risk control measures
(I) investment risk
1. If the company uses idle self owned funds to purchase low-risk investment varieties, it does not rule out that the investment is affected by market fluctuations. 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 above investment is affected by market fluctuations.
2. Operational risks of relevant staff.
(II) risk control measures
1. The company will conduct pre audit and risk assessment, pay attention to the situation of investment products in time and control investment risks; Purchase financial products with high security, good liquidity, medium and low risk and relatively fixed income;
2. The relevant departments of the company are responsible for auditing and supervising the use and custody of the funds of the invested products, and reporting to the board of directors;
3. Independent directors and the board of supervisors have the right to supervise and inspect the use of funds, and can hire professional institutions to audit when necessary;
4. The company will timely perform the obligation of information disclosure in strict accordance with the relevant provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange.
3、 Impact on the company’s operation
On the premise of ensuring the daily operation and capital safety of the company and its wholly-owned subsidiaries, using idle self owned funds to purchase qualified financial products is conducive to improving the efficiency of capital use and obtaining good investment return, which is in line with the interests of all shareholders of the company.
4、 Relevant approval procedures and opinions
(I) deliberations of the board of directors
The 24th Meeting of the second board of directors of the company deliberated and approved the proposal on using idle self owned funds for cash management, and agreed to use idle self owned funds with an amount not exceeding 100 million yuan (including 100 million yuan) for cash management without affecting the daily production and operation of the company and its wholly-owned subsidiaries and ensuring the safety and liquidity of funds.
(II) opinions of independent directors
The independent directors carefully considered the proposal on cash management with idle self owned funds. On the premise of not affecting the daily operation of the company and its wholly-owned subsidiaries and ensuring capital liquidity, the company and its wholly-owned subsidiaries use idle self owned funds for cash management, which is conducive to improving the use efficiency of self owned funds, increasing investment income and in line with the interests of the company. The use of idle self owned funds for cash management has gone through the necessary approval procedures, complies with the relevant provisions of laws, regulations and normative guidelines, and does not harm the interests of the company and all shareholders, especially minority shareholders. Therefore, it is agreed that the company will use idle self owned funds with a total amount of no more than 100 million yuan (including 100 million yuan) for cash management.
5、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the company’s use of idle self owned funds for cash management has been deliberated and approved by the board of directors, the independent directors have issued clear consent opinions and fulfilled the necessary legal procedures, The above matters comply with the requirements of relevant laws and regulations such as the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, the stock listing rules of Shenzhen Stock Exchange (revised in January 2022), which is conducive to improving the efficiency of capital use and will not affect the normal operation of the company and its wholly-owned subsidiaries, It is in line with the interests of the company and all shareholders, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders.
To sum up, Huarong securities has no objection to Tianjin Yiyi Hygiene Products Co.Ltd(001206) this use of idle self owned funds for cash management.
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Sponsor representative:
Liang Liqun, Qiao Xude
Huarong Securities Co., Ltd. March 4, 2022
