Ping An Securities Co., Ltd
About Hunan Aihua Group Co.Ltd(603989)
Verification opinions on purchasing financial products with some idle raised funds
Ping An Securities Co., Ltd. (hereinafter referred to as “Ping An Securities” or “recommendation institution”) as a continuous supervision and recommendation institution for Hunan Aihua Group Co.Ltd(603989) (hereinafter referred to as ” Hunan Aihua Group Co.Ltd(603989) ” or “company”) to publicly issue convertible corporate bonds, in accordance with the measures for the administration of securities issuance and listing recommendation business, the Listing Rules of Shanghai 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 (revised in 2022), the measures for the management of raised funds by listed companies of Shanghai Stock Exchange (revised in 2013) and other relevant regulations have verified the purchase of financial products by Hunan Aihua Group Co.Ltd(603989) using some idle raised funds, and the verification opinions are as follows: I. Basic information of raised funds
Approved by the reply on approving Hunan Aihua Group Co.Ltd(603989) public issuance of convertible corporate bonds (zjxk [2017] No. 2350) of China Securities Regulatory Commission, the company issued 6910000 convertible corporate bonds (hereinafter referred to as “convertible bonds”) to the public on March 2, 2018, with an issue price of 100 yuan / piece, a total raised capital of 69100000000 yuan and a term of 6 years. After deducting the issuance expenses of 1393028302 yuan, The net amount of funds actually raised by the company was 67706971698 yuan, and all the above raised funds were in place on March 8, 2018. On March 12, 2018, Tianzhi International Certified Public Accountants (special general partnership) verified the availability of the raised funds of the company’s convertible bonds and issued the capital verification report (Tianzhi Zi [2018] No. 8274). 2、 Basic information of using some idle raised funds to purchase financial products this time
(I) investment purpose
In order to further improve the use efficiency of funds, make rational use of idle raised funds, use idle raised funds to purchase financial products with high safety, good liquidity, low risk and meeting the capital preservation requirements, maintain and increase the value of the company’s funds and safeguard the interests of the company’s shareholders without affecting the normal progress of the company’s investment projects and the development of its main business and ensuring the safety of the raised funds.
(II) investment quota
The company plans to conduct cash management on idle raised funds with a total amount of no more than 150 million yuan for the purchase of principal guaranteed financial products. Within the above limit, the funds for purchasing principal guaranteed financial products can be used on a rolling basis.
(III) variety of financial products
In order to control risks, financial products are issued by banks, securities companies, trust companies and other financial institutions that can provide breakeven commitments. The varieties of investment are financial products with high security, good liquidity and principal guarantee, and the agreed period of time shall not exceed 12 months.
(IV) investment period
Valid within 12 months from the date of deliberation and approval by the general meeting of shareholders of the company.
(V) specific implementation mode
Within the scope of the investment quota authorized by the general meeting of shareholders of the company, the chairman shall exercise the investment decision-making power and sign relevant contract documents, which shall be organized and implemented by the person in charge of finance.
The financial products purchased by the company 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 will timely report to Shanghai stock exchange for filing and announcement.
(VI) information disclosure
The company will perform the obligation of information disclosure after each purchase of financial products, including the amount, term and income of the purchase of financial products.
(VII) description of association relationship
The company and the issuer of financial products shall not be associated. 3、 Risk control
The company purchases low-risk and principal guaranteed financial products with a term of no more than 12 months, and the risk is controllable. In accordance with the principle of separating decision-making, implementation and supervision functions, the company establishes and improves the approval and implementation procedures for the purchase of financial products, effectively carries out and standardizes the purchase of financial products, and ensures the safety of financial funds. The specific measures to be taken are as follows:
1. The relevant personnel of the company’s financial department 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 take corresponding measures in time to control financial risks.
2. The Audit Department of the company is responsible for auditing and supervising the use and custody of financial funds.
3. Independent directors and the board of supervisors have the right to supervise and inspect the use of funds, and can hire professional institutions to audit when necessary.
4. The financial department of the company must establish a standing book 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 investment participants of the company have the obligation of confidentiality and shall not disclose relevant information to any third party. The investment participants and other informed personnel of the company shall not invest in the same financial products as the company.
6. Implement post separation operation: Post separation of investment business approval, fund entry and transfer out, Trading (subscription and Redemption).
7. According to the relevant regulations of Shanghai Stock Exchange, the company will disclose the investment of principal guaranteed financial products and the corresponding profits and losses in the periodic report during the reporting period. 4、 Impact on the company
On the premise of ensuring the construction progress and capital safety of the raised investment project, the company carries out principal guaranteed investment and financial management business with idle raised funds. Through principal guaranteed short-term financial management, the company can obtain certain investment income, improve the overall performance level of the company and seek more investment returns for the shareholders of the company. 5、 Verification opinions of the recommendation institution
After verification, the recommendation institution believes that:
1. The company’s purchase of principal guaranteed financial products with some idle raised funds has been deliberated and approved by the board of directors of the company, and the independent directors and the board of supervisors have expressed their explicit consent. It can be implemented only after it is submitted to the general meeting of shareholders for deliberation and approval, which is in line with the measures for the administration of securities issuance and listing recommendation business, the stock listing rules of Shanghai Stock Exchange The provisions of relevant laws and regulations such as the guidelines for the supervision of listed companies No. 2 – regulatory requirements for the management and use of funds raised by listed companies (revised in 2022), the measures for the management of funds raised by listed companies of Shanghai Stock Exchange (revised in 2013);
2. The company’s use of some idle raised funds to purchase principal guaranteed financial products this time does not violate the relevant commitments of the investment projects of raised funds, does not affect the normal progress of the investment projects of raised funds, and does not change the investment projects of raised funds in disguise or damage the interests of shareholders;
3. On the premise of ensuring the normal operation and capital demand of the company and not affecting the normal progress of the investment plan of raised funds, the company uses some idle raised funds to purchase principal guaranteed financial products, which can improve the efficiency of fund use and obtain certain income, which is in line with the interests of the company and all shareholders.
In conclusion, the recommendation institution has no objection to the company’s plan to use some idle raised funds to purchase financial products this time.
Signature of sponsor representative: Ouyang Gang Wang Yao Ping An Securities Co., Ltd. April 6, 2022
