Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) : Announcement on the company’s use of idle raised funds for cash management

Securities code: Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) securities abbreviation: Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) Announcement No.: 2022023

Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864)

Announcement on the company’s use of idle raised funds for cash management

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.

Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (hereinafter referred to as “the company” or ” Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) “) held the 21st Meeting of the third board of directors and the 18th meeting of the third board of supervisors on March 31, 2022, and deliberated and adopted the proposal on the company’s use of idle raised funds for cash management. The company plans to purchase low-risk financial products with high security and good liquidity issued by the bank in a timely manner with an amount of no more than RMB 40 million, and the investment period of a single product shall not exceed 12 months. The purchase period is 12 months from December 16, 2021. Within the above quota and period, the funds can be recycled and used on a rolling basis, and the management of the company is authorized to handle matters related to the use of temporarily idle IPO raised funds to purchase bank financial products. The specific matters shall be organized and implemented by the financial department of the company, and the idle raised funds shall be returned to the special account for raised funds after the cash management expires.

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 China Securities Regulatory Commission, the company publicly issued 21.67 million RMB common shares (A shares), and the total amount of funds raised was 21735010000 yuan. After deducting the issuance expenses of 3330188679 yuan, the net amount of funds raised was 18404821321 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、 Use of raised funds and idle reasons

(I) basic information

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.

(II) reasons for idle raised funds

During the implementation of the company’s investment project with raised funds, due to the actual needs of the project, the raised funds need to be invested gradually by stages, and there are temporarily idle raised funds.

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

At the 10th meeting of the 3rd board of directors and the 9th meeting of the 3rd board of supervisors, the proposal on the company’s use of idle raised funds for cash management was deliberated and adopted, and it was agreed that the company should use the amount of no more than RMB 100 million (inclusive) to timely purchase low-risk financial products with high safety and good liquidity issued by banks, and the investment period of single products should not exceed 12 months, The purchase period is 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 matters related to the use of temporarily idle raised funds to purchase bank financial products. The specific matters shall be organized and implemented by the Finance Department of the company.

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:

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