China Industrial Securities Co.Ltd(601377)
Verification opinions on cash management of Profit Cultural & Creative Group Co.Ltd(300640) wholly owned subsidiary using some idle raised funds
China Industrial Securities Co.Ltd(601377) (hereinafter referred to as “recommendation institution” and ” China Industrial Securities Co.Ltd(601377) “) as the recommendation institution in the continuous supervision stage of Profit Cultural & Creative Group Co.Ltd(300640) (hereinafter referred to as ” Profit Cultural & Creative Group Co.Ltd(300640) ” and “the company”), according to the measures for the administration of securities issuance and listing recommendation business Regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, listing rules of GEM stocks of Shenzhen Stock Exchange, guidelines for standardized operation of GEM listed companies of Shenzhen Stock Exchange and other relevant provisions, Fujian Dehong Zhihui Information Technology Co., Ltd. (hereinafter referred to as “Dehong Zhihui”), a wholly-owned subsidiary of Profit Cultural & Creative Group Co.Ltd(300640) company, has carefully verified the matters that it plans to use some idle raised funds for cash management. The specific verification conditions are as follows:
1、 Basic information of raised funds
According to the reply on Approving the registration of Profit Cultural & Creative Group Co.Ltd(300640) issuing shares to specific objects (zjxk [2020] No. 2586) issued by CSRC, the company’s application for registration of issuing shares to specific objects is approved. The company issued 66076254 ordinary shares (A shares) in RMB to 18 specific objects, with a par value of RMB 1.00 per share. The total amount of funds raised was RMB 34227499572. After deducting the expenses related to the issuance (including tax) of RMB 1271715388, the net amount of funds actually raised by the company was RMB 32955784184. The total share capital of the company was changed from 220774000 shares to 286850254 shares. Huaxing Certified Public Accountants (special general partnership) verified the availability of the raised funds and issued the capital verification report (HXYZ [2021] No. 21004310026) on March 16, 2021. All the above raised funds have been deposited in the special account for raised funds.
Since the net amount of funds actually raised from the issuance of shares to specific objects is less than the funds to be invested, in order to ensure the smooth implementation of the investment projects with raised funds, the actual investment and raised funds in the investment projects with raised funds are adjusted in combination with the actual situation of the company, as follows:
Unit: 10000 yuan
Project Name: the total investment plan of the project is planned to be invested. After adjustment, the raised funds of the proposed implementation entity No. will be invested into the raised funds
1 IP products and operation center project 324735028710502743878 Dehong Zhihui
Project Name: the total investment plan of the project is planned to be invested. After adjustment, the raised funds of the proposed implementation entity No. will be invested into the raised funds
2. Construction of big data marketing management platform 4083302517 Kingnet Network Co.Ltd(002517) 00 Dehong Zhihui project
3. Supplementary working capital 30 Fawer Automotive Parts Limited Company(000030) 0000 Profit Cultural & Creative Group Co.Ltd(300640)
Total 395568034227503295578——
Note: the calculation results of the above percentages are rounded. If there is any difference in the mantissa between the sum of the total and each detailed number in the table, it is caused by rounding.
2、 Management and use of raised funds
In order to regulate the management and use of the raised funds of the company and protect the interests of investors, according to the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of the raised funds of listed companies and the guidelines for the self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on the gem According to the relevant provisions of the Shenzhen Stock Exchange GEM Listing Rules and the company’s measures for the administration of raised funds, the proposal on determining the raised funds account and authorizing the signing of the tripartite supervision agreement was deliberated and adopted at the third meeting of the Fourth Board of directors of the company, authorizing the chairman of the board of directors to be fully responsible for signing the tripartite supervision agreement for raised funds with relevant banks and sponsors. The company has opened special accounts for raised funds (hereinafter referred to as “special accounts”) in China Merchants Bank Co.Ltd(600036) Fuzhou Gutian sub branch, Industrial Bank Co.Ltd(601166) Fuzhou Jin’an sub branch and Fuzhou Antai sub branch of Fujian strait bank Co., Ltd. (hereinafter referred to as “deposit bank”). The company and Dehong Zhihui, a wholly-owned subsidiary of the company implementing the raised investment project, have signed the tripartite supervision agreement on raised funds with the deposit bank and the sponsor China Industrial Securities Co.Ltd(601377) (hereinafter referred to as the “sponsor”). The rights and obligations of all parties are clarified. There is no significant difference between the tripartite supervision agreement and the model tripartite supervision agreement of Shenzhen Stock Exchange. When using the raised funds, the company strictly performs the corresponding application and approval procedures, timely notifies the recommendation institution and accepts the supervision of the recommendation representative at any time.
3、 Basic information of cash management using some temporarily idle raised funds this time
(I) investment quota and term
The 2020 annual general meeting of shareholders held by the company on May 18, 2021 deliberated and approved the proposal on increasing the amount of cash management by using some idle raised funds by wholly-owned subsidiaries. After agreeing to increase the amount, Dehong Zhihui accumulated no more than 200 million yuan of idle raised funds for cash management. The service life is 12 months from the date of deliberation and approval by the general meeting of shareholders. Within the validity period of the above amount and resolution, It can be recycled and scrolled.
In view of the expiration of the above quota and resolution, according to the current fund use status of the company, the construction progress of the investment projects with raised funds and considering maintaining sufficient liquidity, in order to improve the fund use efficiency, Dehong Zhihui plans to continue to use the idle raised funds of no more than 200 million yuan for cash management without affecting the construction and normal production and operation of the investment projects with raised funds, Investing in short-term (no more than 12 months) financial products with high safety, good liquidity, low risk and stability shall be valid for 12 months from the date of deliberation and approval by the general meeting of shareholders. Within the validity period of the above quota and resolution, they can be recycled and used.
(II) types of investment products
The company will strictly control risks in accordance with relevant regulations, strictly evaluate financial products, and plan to purchase short-term low-risk financial products with investment income higher than the bank deposit interest rate in the same period (including but not limited to bank certificates of deposit, structured deposits, low-risk financial products, etc.).
The products to be invested by some idle raised funds must meet the following conditions: (1) the product term shall not exceed 12 months; (2) High safety and low risk requirements; (3) Good liquidity, which shall not affect the normal operation of the investment plan of the raised funds; (4) The investment varieties do not include the purchase of financial products with stocks, interest rates, exchange rates and their derivatives as the investment targets from banks and other financial institutions, which does not violate the 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 of the China Securities Regulatory Commission. (III) source of funds
Temporarily idle raised funds.
(IV) implementation mode
Within the investment limit, the company’s operation and management are authorized to approve, organize, implement and sign relevant contract documents for the above specific matters of purchasing financial products, including but not limited to: selecting qualified professional financial institutions as the trustee, specifying the amount and period of entrusted financial management, selecting the variety of entrusted financial products, signing contracts and agreements and other legal documents.
In order to conduct cash management, Dehong Zhihui must purchase investment products through a special account for raising funds, and a special person shall be responsible for the management of the investment and financial management account. The investment products purchased by Dehong Zhihui shall not be used for pledge, and the special settlement account for products shall not be used for non raised funds or other purposes. If the special settlement account for products is opened or cancelled, the company and Dehong Zhihui shall timely report to the exchange for filing and announcement.
(V) information disclosure
The company and Dehong Zhihui will timely fulfill the obligation of information disclosure in accordance with the relevant requirements 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 of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies, the Listing Rules of GEM stocks of Shenzhen Stock Exchange and the measures for the management of raised funds of the company, Timely disclose the specific situation of purchasing financial products, and report to Shenzhen stock exchange for filing and announcement.
(VI) description of association relationship
The company and its wholly-owned subsidiaries have no relationship with the issuer of financial products.
4、 Investment risk analysis, risk control measures and impact on the company
(I) investment risk analysis
1. Although financial products with high short-term security, good liquidity, low risk and stability belong to low-risk investment varieties, the financial market is greatly affected by the macro economy, and it is not excluded that the income is affected by the fluctuation of the macro market.
2. The company will intervene timely and appropriately according to the economic situation and changes in the financial market, so the actual income of short-term investment is unpredictable.
3. Operation and monitoring risks of relevant staff.
4. The scope of financial products purchased this time includes financial products of low-risk securities companies. Although the company will choose products with high liquidity and good safety, there is still a risk of income fluctuation.
(II) risk control measures
1. The relevant personnel of the Finance Department of the company and its subsidiaries will timely analyze and track the investment direction of financial products and the progress of the project. If the evaluation finds that there are risk factors that may affect the safety of the company’s funds, they will timely take corresponding preservation measures to control the investment risk.
2. The internal audit department of the company is responsible for the audit and supervision of the use and custody of investment and wealth management funds.
3. The independent directors and the board of supervisors have the right to supervise and inspect the use of investment and financial management funds. On the basis of verification by the internal audit department of the company, if the board of supervisors and independent directors of the company deem it necessary, they can hire professional institutions to conduct audit. Independent directors shall express relevant independent opinions in their periodic reports.
4. The Finance Department of the company and its subsidiaries must establish accounts to manage the purchased financial products, establish and improve the accounting accounts, and do a good job in the accounting of the use of funds.
5. The company and its subsidiaries will do a good job of relevant information disclosure in accordance with the relevant provisions of Shenzhen Stock Exchange.
(III) impact on the company
1. The company and its subsidiaries adhere to standardized operation, maintain and increase value and prevent risks. Under the condition of ensuring the construction of investment projects with raised funds and the normal operation of the company, Dehong Zhihui uses temporarily idle raised funds to invest in low-risk financial products with high safety, low risk and short term, which will not affect the capital needs of the company’s investment projects with raised funds.
2. Through appropriate low-risk short-term financial management, the company can improve the use efficiency of raised funds, obtain certain investment benefits, further improve the overall performance level of the company, and seek better investment returns for the company and shareholders without damaging the interests of shareholders of the company.
5、 Approval procedures and special opinions for this event
(I) deliberations of the board of directors
On March 18, 2022, the 12th meeting of the Fourth Board of directors of the company considered and approved the proposal on cash management of wholly-owned subsidiaries using some idle raised funds, which was unanimously agreed by all directors after voting.
(II) deliberation and opinions of the board of supervisors
On March 18, 2022, the 10th meeting of the Fourth Board of supervisors of the company considered and approved the proposal on cash management of wholly-owned subsidiaries using some idle raised funds, which was unanimously agreed by all supervisors after voting.
The board of supervisors held that Dehong Zhihui, a wholly-owned subsidiary of the company, used some idle raised funds for cash management and fulfilled the necessary approval procedures. The decision-making and deliberation procedures were legal and compliant. Dehong Zhihui’s cash management with idle raised funds is implemented on the premise of ensuring the construction progress of the raised funds. There is no behavior of changing the purpose of the raised funds in disguise, which is conducive to improving the use efficiency of funds and obtaining certain investment benefits, which is in line with the interests of the company and all shareholders. It is agreed that Dehong Zhihui, a wholly-owned subsidiary, will use idle raised funds of no more than 200 million yuan for cash management.
(III) opinions of independent directors
The independent directors of the company believe that the decision-making procedure of using part of the idle raised funds issued by the company to specific objects for cash management complies with the relevant provisions of the regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds of listed companies and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM, On the basis of ensuring the normal operation and capital safety of the company, some idle raised funds are used for cash management, which does not conflict with the implementation plan of the raised investment project, affect the normal progress of the raised investment project, and do not change the investment direction of the raised funds in a disguised manner and damage the interests of shareholders. The use of idle raised funds by wholly-owned subsidiaries for cash management helps to improve the efficiency of fund use and increase capital income, which is in line with the needs of the development of the company and the interests of all shareholders. Therefore, we agree that Dehong Zhihui, a wholly-owned subsidiary, will use the idle raised funds of no more than 200 million yuan for cash management, and authorize the operating management to exercise the investment decision-making power within the above service life and cumulative transaction limit.
6、 Verification opinions of the recommendation institution
After verification, the recommendation institution believes that:
1. Dehong Zhihui, a wholly-owned subsidiary of Profit Cultural & Creative Group Co.Ltd(300640) Profit Cultural & Creative Group Co.Ltd(300640) , used part of the idle raised funds issued by the company to specific objects for cash management, which has been deliberated and approved by the board of directors and the board of supervisors of the company, and the independent directors have issued independent opinions with explicit consent, which is in line with the guidelines for standardized operation of companies listed on the gem of Shenzhen Stock Exchange The guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the articles of association and other relevant provisions do not change the use of raised funds in a disguised manner
