Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) : Zhongtai Securities Co.Ltd(600918) verification opinions on Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) using idle raised funds for cash management

About Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864)

Verification opinions on cash management with idle raised funds

Zhongtai Securities Co.Ltd(600918) (hereinafter referred to as " Zhongtai Securities Co.Ltd(600918) " or "sponsor") is the sponsor of initial public offering and listing of Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (hereinafter referred to as " Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) " 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, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 13 - recommendation business, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board and other relevant provisions, Zhongtai Securities Co.Ltd(600918) carefully checked the cash management of Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) using idle raised funds. The details are as follows:

1、 Basic information of raised funds

With the approval of the reply on approving Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) initial public offering of shares (zjxk [2017] No. 1875) issued by the China Securities Regulatory Commission, the company publicly issued 21.67 million RMB ordinary shares (A shares) at an issue price of 10.03 yuan per share, and the total amount of funds raised was 2173500100 yuan. After deducting the issuance expenses, the net amount of funds raised was 184048200 yuan. All the above raised funds have been in place and verified by the capital verification report (xksbz [2017] No. zf10909) issued by Lixin Certified Public Accountants (special general partnership). The company has stored the raised funds in a special account and signed a tripartite supervision agreement on the storage of raised funds in a special account with relevant banks and sponsors.

2、 Reasons and use of idle funds raised

1. Basic information on the use of raised funds

As of March 30, 2022, the company has accumulated 16877436100 yuan of raised funds for projects invested by raising funds, the balance of the company's special account for raised funds (including interest) is 413588772 yuan, and the balance of unexpired bank financial products and special account for raised funds is as follows:

Unit: Yuan

Notes on undue financial management of the balance of raised funds in the bank account of the deposit bank

Bank Of China Limited(601988) Xi'an 10247136841818861.79 - production line expansion project

Taibai community sub branch

Bank Of China Limited(601988) Xi'an 1020713673723114550801054768126 R & D center expansion project

Taibai community sub branch

Bank Of China Limited(601988) Xi'an 1024713685091 Luxshare Precision Industry Co.Ltd(002475) 131964274685 marketing network expansion and information

Taibai community sub branch system upgrading construction project

Bank Of China Limited(601988) Xi'an 102071367418 -- supplementary working capital

Taibai community sub branch

Total 4135887723019042811

Note: the undue financial management refers to the time deposit deposited in Bank Of Xi'An Co.Ltd(600928) unit, and the undue financial management balance in the above table includes interest.

2. Reasons for idle raised funds

During the implementation of the project invested by the company's raised funds, due to the actual needs of the project, it needs to be phased gradually

When the raised funds are invested, there are temporarily idle raised funds.

3、 Previous use of some idle raised funds for cash management

The tenth meeting of the third board of directors and the ninth meeting of the third board of supervisors of the company deliberated and adopted the

In the proposal on the company's use of idle raised funds for cash management, it is agreed that the company's use amount shall not exceed the people's Bank of China

RMB 100 million (inclusive) for timely purchase of low-risk financial products with high security and good liquidity issued by the bank

The investment period of this product shall not exceed 12 months, and the purchase period shall be within 12 months from the date of deliberation and approval by the board of directors.

Within the above quota and period, the funds can be used in a circular and rolling manner, and the management of the company is authorized to handle the temporary use

The Finance Department of the company shall be responsible for the purchase of bank financial products and other related matters with idle raised funds

implementation.

The company used part of the idle raised funds for cash management in the previous time, and the specific conditions of due redemption are as follows:

Below:

Due recovery

Order financial products subscription products expected annual amount of financial products

No. Name issuer type amount value date maturity daily chemical income

(yuan) rate (%) principal return (yuan) (yuan)

"Stable profit and profit" 1 Xi'an unit is set for 2020 and 2021

Bank deposit No.19028875000 00 December 19 January 19 3.859028875000 289676.40