China Securities Co.Ltd(601066)
About DEA Co., Ltd
Verification opinions on cash management using some idle raised funds and self owned funds
China Securities Co.Ltd(601066) (hereinafter referred to as the “sponsor”) as the sponsor of DEA Co., Ltd. (hereinafter referred to as “DEA Co., Ltd.”, “the company”) for initial public offering of shares and listing on the gem, in accordance with the measures for the administration of securities issuance and listing sponsor business and the guidelines for information disclosure of listed companies of Shenzhen Stock Exchange No. 6 – sponsor business The Listing Rules of Shenzhen Stock Exchange on the gem and the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange have carefully verified the cash management of DEA shares using some idle raised funds and its own funds. The details are as follows:
1、 Basic information of raised funds
The registration was approved by the China Securities Regulatory Commission (hereinafter referred to as “CSRC”) reply on Approving the registration of initial public offering of shares of DEA Co., Ltd. (zjxk [2021] No. 3043), and approved by Shenzhen Stock Exchange. The company issued 40010000 RMB ordinary shares (A shares) in the initial public offering, with a par value of 1.00 yuan per share and an issue price of 116.88 yuan per share. The total amount of funds raised was 4676368800.00 yuan. After deducting the relevant issuance expenses of 232565955.37 yuan (excluding value-added tax), the actual net amount of funds raised was 4443802844.63 yuan. The raised funds were transferred to the company’s special account for raised funds (hereinafter referred to as the “special account”) on December 10, 2021, which was verified by Ernst & Young Huaming Certified Public Accountants (special general partnership) and issued the capital verification report (Ernst & Young Huaming (2021) Yan Zi No. 61403707h01). All the above raised funds have been deposited in the special account for raised funds opened by the company, and the company has signed the tripartite supervision agreement on raised funds with the sponsor and the commercial bank storing the raised funds.
2、 Investment projects with raised funds
According to the prospectus of DEA Co., Ltd. on initial public offering and listing on GEM (hereinafter referred to as the “prospectus”), the funds raised by the company will be used for the following items after deducting the issuance expenses:
No. project name total investment amount raised capital investment amount filing situation EIA reply
1. The channel network construction project 73921.4073921.40 shenluohu FA Gai filing is not applicable (2020) No. 0043
2 information system construction project 11047.4511047.45 shennanshan development and reform filing is not applicable (2020) No. 0369
3 diamond jewelry R & D creativity 5389.935389.93 shenluohu development and reform filing is not applicable to design center construction project (2020) No. 0042
4 supplementary working capital item 38000.0038000.00 n / a n / A
Total 128358.78128358.78–
3、 Basic information of cash management using some idle raised funds and self owned funds this time
(i) Investment purpose
As the project invested with raised funds needs a certain construction period, according to the construction progress of the project invested with raised funds, some of the raised funds (including over raised funds) will be idle in the short term. Without affecting the normal operation of the company and the construction of the project invested with raised funds, The company will make rational use of some idle raised funds (including over raised funds) and its own funds for cash management, so as to improve the use efficiency of raised funds and achieve greater benefits
Protect the interests of the company’s shareholders.
（2） Limit and term
It is proposed to use idle raised funds (including over raised funds) of no more than RMB 350 million and self owned funds of no more than RMB 400 million for cash management. The validity period is 12 months from the date of deliberation and approval by the general meeting of shareholders of the company. The above amount can be used circularly and rollably within the period. After the cash management of idle raised funds (including over raised funds) expires, it will be returned to the special account for raised funds in time.
（3） Types of investment products
1. Varieties of investment products with idle raised funds: the company will strictly control risks in accordance with relevant regulations and plan to purchase
Buy securities issued by commercial banks, securities companies or other financial institutions with high security, good liquidity and a term not exceeding
Investment products over 12 months (including but not limited to structured deposits, time deposits, certificates of deposit, call deposits, fixed income certificates, other financial products, etc.), and such cash management products shall not be used for pledge and guarantee
The special settlement account for insurance products shall not deposit non raised funds or be used for other purposes, and shall not be used for investment for the purpose of securities investment;
2. Varieties of self owned fund investment products: the company will conduct strict evaluation and plans to purchase cash management products with high security and good liquidity through commercial banks, securities companies and other financial institutions. The relevant product varieties do not involve high-risk investments such as securities investment and derivatives trading specified in the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange.
（4） Cash management income distribution
The company uses some idle raised funds for cash management, and the proceeds will be owned by the company, and will be managed and used in strict accordance with the requirements of the CSRC and Shenzhen Stock Exchange on the regulatory measures for raised funds. （5） Specific embodiments
Within the above limit and term, the general meeting of shareholders shall be requested to authorize the management to exercise investment decisions and sign relevant contract documents, including but not limited to: selecting qualified financial institutions, varieties of financial products, clarifying investment amount, investment term, signing agreements, etc; The Finance Department of the company is responsible for the organization, implementation and management.
（6） Information disclosure
The company will timely fulfill the obligation of information disclosure in accordance with relevant requirements such as the Listing Rules of Shenzhen Stock Exchange gem and the guidelines for standardized operation of companies listed on Shenzhen Stock Exchange gem.
（7） Other
The company uses some idle raised funds (including over raised funds) for cash management this time, does not change the purpose of raised funds in a disguised manner, and will not affect the normal implementation of investment projects with raised funds.
4、 Investment risk and risk control measures
(i) Investment risk
The investment products to be purchased by the company belong to short-term low-risk products, but the financial market is greatly affected by the macro-economy. The investment will not be excluded from being affected by market fluctuations. The company will intervene in a timely and appropriate manner according to the economic situation and changes in the financial market. Therefore, it is difficult to reliably predict the actual income of short-term investment.
（2） Risk control measures
1. The company will strictly abide by the principle of prudent investment and select investment products issued by commercial banks and other financial institutions with good reputation, strict risk control measures and ability to ensure capital safety;
2. During the implementation of cash management, the company’s management and financial handling personnel will timely analyze and track the progress of cash investment products. If adverse factors are found or judged, corresponding preservation measures will be taken in time to control investment risks;
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 Audit Department of the company is responsible for auditing and supervising the fund use and custody of investment products, and regularly conducting comprehensive inspection on all investment product projects;
5. The company will timely make relevant information disclosure in accordance with the relevant provisions of Shenzhen Stock Exchange. 5、 Impact on the daily operation of the company
The company uses some idle raised funds (including over raised funds) and its own funds for cash management on the premise of ensuring the safety of funds and not affecting the daily operation of the company and the normal promotion of investment projects with raised funds. There is no situation of changing the purpose of raised funds in a disguised manner and damaging the interests of the company and shareholders, especially minority shareholders. Through appropriate cash management, we can improve the company’s capital use efficiency, obtain certain investment income, and create more investment returns for the company and shareholders.
6、 Review procedures and opinions
On December 30, 2021, the company held the 14th meeting of the first board of directors and the 6th meeting of the first board of supervisors, deliberated and adopted the proposal on cash management with some idle raised funds and self owned funds, and the independent directors of the company expressed their clear agreement on the proposal.
(i) Opinions of the board of directors
The board of directors agrees to use idle raised funds (including over raised funds) of no more than RMB 350 million and self owned funds of no more than RMB 400 million for cash management, which is valid within 12 months from the date of deliberation and approval by the general meeting of shareholders. Within the above quota and period, the funds can be used circularly and on a rolling basis, and the company’s management is authorized to exercise decision-making power and sign relevant documents within the quota, and the company’s financial department is responsible for handling specific relevant matters. After the cash management of idle raised funds (including over raised funds) expires, it will be returned to the special account for raised funds in time.
（2） Opinions of the board of supervisors
After deliberation, the board of supervisors considered that in order to improve the efficiency of fund use, the company agreed to use idle raised funds (including over raised funds) of no more than RMB 350 million and its own funds of no more than RMB 400 million for cash management without affecting the construction of investment projects with raised funds and the normal operation of the company and ensuring the safety of funds, The term shall be valid within 12 months from the date of deliberation and approval by the general meeting of shareholders. Within the above quota and period, the funds can be recycled and used in a rolling manner. The use of some idle raised funds (including over raised funds) and self owned funds for cash management this time is in line with the relevant provisions of the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange, in line with the interests of the company and all shareholders, and there is no situation of changing the purpose of the raised funds in a disguised manner. （3） Opinions of independent directors
After deliberation, the independent directors believe that on the premise of ensuring the safety of funds, the normal operation of the company and not affecting the construction plan of investment projects with raised funds, the company’s rational use of temporarily idle raised funds (including over raised funds) and its own funds for cash management is conducive to improving the use efficiency of funds, and the deliberation procedures are legal and compliant, It complies with the provisions of relevant laws, regulations and normative documents such as the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange, and conforms to the interests of the company and all shareholders. There is no situation that changes the purpose of the raised funds and damages the interests of the company and shareholders in a disguised manner, and will not affect the normal progress of the investment plan of the raised funds. It is agreed that the company will use idle raised funds (including over raised funds) of no more than RMB 350 million and its own funds of no more than RMB 400 million for cash management, and it is agreed to submit this proposal to the general meeting of shareholders for deliberation.
7、 Verification opinions of the recommendation institution
After verification, the proposal of DEA shares on using some idle raised funds (including over raised funds) and its own funds for cash management has been deliberated and approved by the board of directors and the board of supervisors of the company. The independent directors have expressed their independent opinions on the proposal, which need to be submitted to the general meeting of shareholders for deliberation. The above approval procedures comply with the provisions of relevant laws, regulations, normative documents and the articles of association. DEA shares manages some idle raised funds (including over raised funds) and its own funds in cash without affecting the normal progress of investment projects with raised funds, normal production and operation and ensuring fund safety, which is conducive to improving fund use efficiency. The recommendation institution has no objection to the company’s use of some idle raised funds (including over raised funds) and its own funds for cash management.
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(there is no text on this page, which is the signature and seal page of China Securities Co.Ltd(601066) opinions on the verification of DEA Co., Ltd. using some idle raised funds and its own funds for cash management)
Signature of sponsor representative:
Hu Fangxing Fang Yifeng
China Securities Co.Ltd(601066) December 31, 2021
