Central China Securities Co.Ltd(601375)
About Jiangsu Tongli Risheng Machinery Co.Ltd(605286)
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 Jiangsu Tongli Risheng Machinery Co.Ltd(605286) (hereinafter referred to as ” Jiangsu Tongli Risheng Machinery Co.Ltd(605286) ” or “the company”), Central China Securities Co.Ltd(601375) (hereinafter referred to as ” Central China Securities Co.Ltd(601375) ” or “sponsor”) has verified the company’s cash management with idle raised funds in 2022. The specific verification conditions and opinions are as follows:
1、 Basic information of raised funds
With the approval of the reply on the approval of Jiangsu Tongli Risheng Machinery Co.Ltd(605286) initial public offering of shares (zjxk [2021] No. 88) issued by the China Securities Regulatory Commission, the company issued 42 million ordinary A shares (hereinafter referred to as “this public offering”) to the public for the first time, with an issue price of RMB 15.08 per share and a total raised capital of RMB 633.36 million, After deducting the total issuance expenses of RMB 412057 million (excluding tax), the net amount of funds raised this time is RMB 5921543 million. The above-mentioned capital verification report issued by Tianheng certified public accountants Co., Ltd. on [2021] No. 0001 has been verified.
2、 Basic information of cash management using idle raised funds this time
(I) investment purpose
In order to improve the use efficiency of funds, cash management is carried out under the condition of ensuring that the construction of investment projects with raised funds and the use of raised funds are not affected, and some idle funds are reasonably used for investment and financial management to increase capital income. (II) investment quota and term
The company plans to use idle raised funds with a maximum amount of no more than 200 million yuan for cash management, and the service life is effective within 12 months from the date of deliberation and approval by the board of directors. The above amount is within the validity period of the resolution, and the funds can be used on a rolling basis. The company’s use of idle raised funds for cash management will strictly comply with the relevant provisions of Shanghai Stock Exchange on the management of raised funds of listed companies.
(III) types and safety of investment products for cash management
In order to control risks, the company plans to invest in financial products with high safety and good liquidity.
(IV) implementation mode and authorization
The board of directors authorizes the chairman of the company to exercise the decision-making power within the above validity period and capital limit. The specific matters shall be organized and implemented by the financial department of the company. This authorization shall be valid within 12 months from the date of adoption by the board of directors of the company. (V) information disclosure
After each purchase of financial products, the company will timely perform the obligation of information disclosure, and the announcement content includes the amount, term and expected income of the purchase of financial products.
(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、 Investment risk and risk control measures
(I) investment risk
Although the company plans to invest in financial products with high safety and good liquidity, it does not rule out that the investment income is affected by market fluctuations and there are certain systemic risks.
(II) risk control measures
According to the requirements of relevant laws and regulations, the company has formulated the following internal control measures:
1. The chairman is authorized to exercise the investment decision-making power and sign relevant contracts, and the financial department of the company is responsible for organizing the implementation.
2. The independent directors, the audit committee of the board of directors and the board of supervisors shall supervise and inspect the use of the raised funds for cash management. According to the careful evaluation of the company, the cash management meets the requirements of internal fund management.
4、 Impact on the company
The above cash management will not have a significant impact on the company’s future main business, financial status, operating results and cash flow. The company uses some idle raised funds for cash management on the premise of ensuring that it does not affect the normal production and operation and the construction of investment projects with raised funds, which is conducive to improving the use efficiency of funds and obtaining certain investment income, which is in line with the interests of the company and all 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’s use of 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
On March 17, 2022, the company held the fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors, which respectively deliberated and approved the proposal on cash management with raised funds, and agreed that the company would use idle raised funds with a maximum amount of no more than 200 million yuan to carry out cash management without affecting the construction of investment projects and the use of raised funds, with high investment safety Financial products with good liquidity. Within the above limits, the funds can be used on a rolling basis, and the service life is valid within 12 months from the date of deliberation and approval by the board of directors of the company.
The independent directors of the company agreed that: on the premise of ensuring the safety of the raised funds, the company uses the idle raised funds for cash management for the purchase of financial products with high safety and good liquidity. The decision-making procedures of the above matters comply with the relevant provisions of the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of the raised funds of listed companies, which is conducive to improving the deposit income of the idle raised funds, The company’s use of idle raised funds for cash management does not conflict with the implementation plan of the raised funds investment project, will not affect the construction of the raised funds investment project and the normal use of the raised funds, is in line with the interests of the company and all shareholders, and does not damage the interests of the company and all shareholders, especially minority shareholders.
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 proposal of using idle raised funds for cash management of the company has been deliberated and approved at the fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors, and the independent directors of the company have also expressed explicit consent. The proposal does not need 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.
