Huatai United Securities Co., Ltd
About Huarong Chemical Co., Ltd
Verification opinions on permanent replenishment of working capital with some over raised funds
Huatai United Securities Co., Ltd. (hereinafter referred to as “Huatai United Securities” or “sponsor”) is the sponsor of Huarong Chemical Co., Ltd. (hereinafter referred to as “Huarong chemical” or “company” or “listed company”) for initial public offering of shares and listing on the gem (hereinafter referred to as “this offering”), In accordance with the measures for the administration of securities issuance and listing recommendation business, 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 self regulatory guidance for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies and other provisions, Check the company’s use of some over raised funds to permanently supplement working capital. The verification results and verification opinions are as follows:
1、 Basic information of raised funds
Approved by Shenzhen Stock Exchange and registered with China Securities Regulatory Commission (zjxk [2022] No. 252), the company issued 120 million ordinary shares in RMB for the first time, with an issue price of 8.05 yuan per share, a total amount of 96 Shanghai Pudong Development Bank Co.Ltd(600000) 000 yuan of raised funds, and 6457774825 yuan of issuance expenses (excluding tax) deducted, The net amount of funds actually raised was 90142225175 yuan (including 40642225175 yuan of over raised funds). All the above funds were in place on March 16, 2022, which was verified by Sichuan Huaxin (Group) Certified Public Accountants (special general partnership), and the capital verification report (chhyy (2022) No. 0013) was issued on March 16, 2022.
The company has adopted the special account storage management for the raised funds in accordance with the regulations, and signed the tripartite supervision agreement for raised funds with the recommendation institution and the special account supervision bank.
2、 Investment projects with raised funds
According to the information disclosed in the company’s prospectus, the raised funds will be used for the following investment projects:
Unit: 10000 yuan
No. project name total investment amount proposed to use raised capital investment amount
1. Risk reduction and transformation project (phase I) 11427151080000
2. Capacity expansion and technical transformation project of disinfection and sanitary products 11 Ping An Bank Co.Ltd(000001) 050000
3 Smart supply chain and smart factory platform project 13740391350000
4. Supplementary working capital 147 Shahe Industrial Co.Ltd(000014) 70000
Total 50867544950000
The part of the net funds raised by the company that exceeds the investment needs of the above projects is the over raised funds, and the over raised funds are 406422300 yuan. As of the date of this announcement, the company has used 0 yuan of over raised funds.
3、 The necessity of using over raised funds to permanently supplement working capital
On the premise of ensuring that the construction of the projects with raised funds will not be affected, the company uses part of the over raised funds to permanently supplement the working capital, which is conducive to improving the use efficiency of the raised funds, meeting the needs of the company’s business development for working capital, and reducing the company’s financial expenses and capital use costs.
4、 Plan to permanently supplement working capital with over raised funds
According to the relevant 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, the Listing Rules of GEM stocks of Shenzhen Stock Exchange, the guidelines for the self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of GEM listed companies and other relevant provisions, the amount that the company plans to use the over raised funds to permanently supplement the working capital is 120 million yuan.
The purpose of supplementary working capital is: for the company’s main business.
5、 Relevant instructions and commitments of the company on permanent replenishment of working capital with this over raised capital
The use of part of the over raised funds to permanently supplement the working capital will not conflict with the implementation plan of the investment project invested by the raised funds, and there is no situation of changing the investment direction of the raised funds in a disguised manner and damaging the interests of shareholders.
The company promises that: (I) the amount used for permanent replenishment of working capital shall not exceed 30% of the total amount of over raised funds in every 12 months; (II) do not make high-risk investments such as securities investment and derivatives trading and provide financial assistance to objects other than holding subsidiaries within 12 months after replenishing working capital.
6、 Relevant review procedures and verification opinions
(I) deliberations of the board of directors
The company held the 12th meeting of the first board of directors on April 1, 2022, which deliberated and approved the proposal on using part of the over raised funds to permanently supplement the working capital. The board of directors agreed that the company should use the over raised funds of 120 million yuan to permanently supplement the working capital. This matter needs to be submitted to the general meeting of shareholders for deliberation, and can be implemented only after it is deliberated and approved by the general meeting of shareholders.
(II) opinions of the board of supervisors
The company held the seventh meeting of the first board of supervisors on April 1, 2022, and deliberated and adopted the proposal on using some over raised funds to permanently supplement working capital. After deliberation, the board of supervisors held that the company’s use of part of the over raised funds to permanently supplement the working capital does not affect the normal progress of the investment projects of the raised funds, nor does it change the investment direction of the raised funds in a disguised manner and damage the interests of shareholders; Combined with the actual operation of the company, in order to improve the use efficiency of over raised funds and reduce the financial expenses of the company, the board of supervisors unanimously agreed that the company would use 120 million yuan of over raised funds to permanently supplement working capital to meet the daily operation needs of the company.
(III) opinions of independent directors
After review, the independent directors believe that the voting procedures for the company to use part of the over raised funds to permanently supplement working capital are legal and effective, Comply with the relevant provisions of laws and regulations 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 (revised in 2022), the guidelines for the self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on the gem, the Listing Rules of Shenzhen Stock Exchange on the gem (revised in December 2020) and the management system of raised funds of companies; The company’s permanent replenishment of working capital with some over raised funds this time can meet the company’s liquidity needs, will not conflict with the implementation plan of the investment project with raised funds, will not affect the normal progress of the investment project with raised funds, will not change the investment direction of raised funds in a disguised manner, and will not damage the interests of the company and all shareholders, especially the majority of minority shareholders; Therefore, the motion was unanimously agreed.
7、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the plan for the company to use part of the excess raised funds to permanently supplement the working capital has been deliberated and approved by the board of directors and the board of supervisors of the company, the independent directors have expressed their consent and fulfilled the necessary approval procedures, and the matter needs to be submitted to the general meeting of shareholders of the company for deliberation. The use of some over raised funds to permanently supplement working capital this time complies with the provisions of relevant laws and regulations, such as the Shenzhen Stock Exchange gem stock listing rules, the Shenzhen Stock Exchange listed companies’ self regulatory guidelines No. 2 – standardized operation of GEM listed companies, and the listed companies’ regulatory guidelines No. 2 – regulatory requirements for the management and use of raised funds of listed companies. The use of part of the excess raised funds to permanently supplement the working capital does not change the use purpose of the raised funds in a disguised manner, does not affect the normal progress of the company’s investment projects with raised funds, and is in line with the interests of the company and shareholders.
In conclusion, the recommendation institution has no objection to the company’s use of part of the excess raised funds to permanently supplement the working capital.
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(there is no text on this page, which is the signature page of the verification opinions of Huatai United Securities Co., Ltd. on the permanent replenishment of working capital by Huarong Chemical Co., Ltd. using some over raised funds)
Sponsor representative:
GUI Cheng Yi GUI Tao
Huatai United Securities Co., Ltd. mm / DD / 2022
