Dongxing Securities Corporation Limited(601198)
Verification opinions on cash management of Ganzhou Tengyuan cobalt new materials Co., Ltd. using some idle raised funds (including over raised funds) and its own funds
Dongxing Securities Corporation Limited(601198) (hereinafter referred to as ” Dongxing Securities Corporation Limited(601198) ” or “sponsor”) as a sponsor of Ganzhou Tengyuan cobalt industry new materials Co., Ltd. (hereinafter referred to as “Tengyuan cobalt industry” or “company”) for initial public offering and listing on GEM, 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 (revised in 2022), the Listing Rules of GEM stocks of Shenzhen Stock Exchange and 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 company has checked the cash management of some idle raised funds (including over raised funds) and its own funds. The details are as follows:
1、 Basic information of raised funds
With the approval of registration of initial public offering of Ganzhou Tengyuan cobalt new materials Co., Ltd. (zjxk [2021] No. 4042) issued by China Securities Regulatory Commission (hereinafter referred to as “CSRC”), and with the consent of Shenzhen Stock Exchange, the company issued 31486900 ordinary shares (A shares) with a par value of RMB 1.00 per share, The issue price is 173.98 yuan / share, and the total amount of raised funds is 547809086200 yuan. After deducting the relevant issuance expenses (excluding tax) of 274 Jiangsu Lihua Animal Husbandry Co.Ltd(300761) 3 yuan, the actual net amount of raised funds is 520378078588 yuan, including 21980000000 yuan of raised funds for investment projects and Bizconf Telecom Co.Ltd(300578) 078588 yuan of over raised funds. The above raised funds were transferred to the designated account of the company on March 14, 2022, verified by Grant Thornton Certified Public Accountants (special general partnership), and issued the capital verification report (Grant Thornton Yan Zi [2022] No. 351c000126) on March 14, 2022.
The company has stored and managed the above raised funds in a special account in accordance with the regulations. After the raised funds are received, they are all deposited in the special account for raised funds, and signed the tripartite supervision agreement for raised funds with the sponsor and the bank with which the special account is opened.
2、 Project investment of raised funds
According to the prospectus of Ganzhou Tengyuan cobalt new materials Co., Ltd. for initial public offering and listing on the gem, the funds raised by the company’s public offering will be used to invest in the following projects:
Unit: 10000 yuan
No. project name total investment proposed to be invested in the implementation subject of raised funds
Annual output of 20000 tons of cobalt and 10000 tons of nickel and gold
1. Quantity series products: remote intelligent 1698864016980000 Tengyuan cobalt industry
Technical transformation and upgrading and raw and auxiliary materials
Supporting production project (phase II)
2. Supplementary working capital project 5000000 Tengyuan cobalt industry
Total 2198864021980000——
As the construction of the project invested by raised funds needs a certain period, according to the construction progress of the project invested by raised funds, some of the raised funds (including over raised funds) are idle in the short term. On the premise of not affecting the construction of investment projects with raised funds and the normal operation of the company, the company will reasonably use idle raised funds (including over raised funds) for cash management to improve the use efficiency of raised funds.
3、 The use of some idle raised funds (including over raised funds) and self owned funds for cash management this time
(I) investment purpose
In order to improve the use efficiency and income of funds, the company makes rational use of idle raised funds (including over raised funds) and its own funds, and uses temporarily idle raised funds (including over raised funds) with an amount of no more than RMB 3.5 billion without affecting the normal development of the company’s main business, the construction and implementation of raised funds investment projects and ensuring the safety of raised funds Cash management with self owned funds of no more than 1.5 billion yuan (including this amount) is conducive to improving the efficiency of capital use and obtaining more return on investment for the company and shareholders.
(II) investment quota
In combination with the implementation progress and plan of the raised investment project and the current use of the raised funds, the company plans to use the temporarily idle raised funds (including the over raised funds) with a limit of no more than RMB 3.5 billion (including the principal amount) and its own funds with a limit of no more than RMB 1.5 billion (including the principal amount) for cash management. Within the above approval period and authorization limit, the funds can be used circularly and continuously.
(III) investment varieties
The company will strictly control risks and strictly evaluate products in accordance with relevant regulations. The varieties to be invested by idle raised funds (including over raised funds) and self owned funds are cash management products with high safety, good liquidity, low risk and stability with an investment period of no more than 12 months. The relevant products do not involve high-risk investments such as securities investment and derivatives investment specified in the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM.
Investment products shall not be pledged, and the product special settlement account related to raised funds (if applicable) shall not deposit non raised funds or be used for other purposes. If the product special settlement account is opened or cancelled, the company will timely submit it to Shenzhen stock exchange for filing and announcement. (IV) investment period
The authorization of the above idle raised funds (including over raised funds) and self owned funds for cash management shall be valid for one year from the date of deliberation and approval by the general meeting of shareholders of the company, and the investment period of a single financial product shall not exceed 12 months (including).
(V) implementation mode
After the above matters are deliberated and approved by the board of directors and the board of supervisors, they can be implemented only after being deliberated and approved by the general meeting of shareholders. Within the validity period and scope of the quota authorization, the board of directors of the company requests the general meeting of shareholders to authorize the general manager of the company to exercise the investment decision-making power within the quota, and the financial department of the company is responsible for the specific implementation.
(VI) source of funds
Some idle raised funds (including over raised funds) and self owned funds used for cash management this time come from the company’s temporarily idle raised funds and self owned funds, which will not affect the construction of the company’s investment projects with raised funds and the normal use of raised funds.
(VII) information disclosure
The company will comply 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 Listing Rules of GEM stocks of Shenzhen Stock Exchange, and the guidelines for the self discipline supervision of listed companies of Shenzhen Stock Exchange No. 2 – regulatory operation of companies listed on GEM, Fulfill the obligation of information disclosure on the progress of cash management using some idle raised funds (including over raised funds) and self owned funds.
4、 Investment risk analysis and risk control measures
(I) investment risk
1. Although the company will strictly screen the investment objects and the financial products belong to low-risk investment varieties, the financial market is greatly affected by the macro-economy, and it is not ruled out that the investment will be affected by market fluctuations;
2. The company will intervene timely and appropriately according to the economic situation and changes in the financial market, so the actual return of investment is unpredictable;
3. Operational risks of relevant staff.
(II) risk control measures
1. The company will strictly abide by the principle of prudent investment, and the idle raised funds shall not be used for securities investment, derivatives investment and other high-risk investments; When using idle raised funds for cash management, the company will choose investment products with high safety, good liquidity, low risk and stability and a term of no more than 12 months, and clarify the amount, term, investment varieties, rights, obligations and legal liabilities of both parties.
2. The Finance Department of the company shall establish an account to manage the financial products, timely analyze and track the changes in the net value of the financial products, and take corresponding measures to control the investment risk in time if it is found that there are risk factors that may affect the company’s capital safety and profitability.
3. The independent directors and the board of supervisors of the company have the right to supervise and inspect the use of the above idle raised funds, and can hire professional institutions to audit when necessary.
4. The Audit Department of the company is responsible for auditing and supervising the use and custody of the raised funds.
5. The company will perform the obligation of information disclosure on the progress of the company’s cash management with raised funds in accordance with the relevant provisions of Shenzhen Stock Exchange.
5、 Impact on the daily operation of the company
The company’s use of some idle raised funds (including over raised funds) and its own funds for cash management is carried out on the premise of ensuring that it will not affect the normal operation of the company, the normal implementation of the investment plan of raised funds and the safety of raised funds, will not affect the construction of the company’s investment projects with raised funds and the normal development of its main business, and there is no situation of changing the purpose of raised funds in a disguised manner and damaging the interests of shareholders. Using some idle raised funds (including over raised funds) and self owned funds for cash management can improve the use efficiency of the company’s funds, obtain certain investment income and obtain more investment returns for the company and shareholders.
The company will conduct corresponding accounting treatment for the cash management business of raised funds and self owned funds in accordance with the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 37 – presentation of financial instruments and other relevant provisions, which will be reflected in the relevant subjects of the balance sheet and income statement.
6、 Relevant review procedures and review opinions
(I) deliberation opinions of the board of directors
At the 25th meeting of the second board of directors held on April 20, 2022, the company deliberated and approved the proposal on cash management with some idle raised funds (including over raised funds) and self owned funds, and agreed that the company would ensure the safety of raised funds and the construction progress of investment projects with raised funds without affecting the normal operation of the company, Use temporarily idle raised funds (including over raised funds) with a limit of no more than RMB 3.5 billion (including this amount) and self owned funds with a limit of no more than RMB 1.5 billion (including this amount) for cash management. The service life is effective within 12 months from the date of deliberation and approval by the company’s 2021 annual general meeting of shareholders. Within the validity period of the above quota and resolution, it can be recycled and used. After the cash management of idle raised funds expires, it will be returned to the special account for raised funds in time. The matter still needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
(II) independent opinions of independent directors
After verification, the independent directors believe that the company’s cash management with temporarily idle raised funds (including over raised funds) of no more than RMB 3.5 billion (including principal amount) and its own funds of no more than RMB 1.5 billion (including principal amount) is carried out on the premise of ensuring the construction of investment projects with raised funds and the normal operation of the company, which helps to improve the use efficiency of raised funds and create investment income for the company. Refer to the provisions of Shenzhen Stock Exchange No. 2 self regulatory rules for listed companies listed on the gem and the regulatory procedures for the use of listed companies listed on the Shenzhen Stock Exchange, There is no case of changing the purpose of the raised funds in a disguised form and damaging the interests of the company and all shareholders, especially the interests of minority shareholders.
In conclusion, the independent directors unanimously agreed to the proposal on cash management using some idle raised funds (including over raised funds) and self owned funds, and agreed to submit it to the 2021 annual general meeting of shareholders of the company for deliberation.
(III) opinions of the board of supervisors
At the 15th meeting of the second board of supervisors held on April 20, 2022, the company deliberated and approved the proposal on cash management with some idle raised funds (including over raised funds) and self owned funds, and agreed that the company would ensure the safety of raised funds and the construction progress of investment projects with raised funds without affecting the normal operation of the company, Use temporarily idle raised funds (including over raised funds) with a limit of no more than RMB 3.5 billion (including this amount) and self owned funds with a limit of no more than RMB 1.5 billion (including this amount) for cash management. The service life is effective within 12 months from the date of deliberation and approval by the company’s 2021 annual general meeting of shareholders. Within the validity period of the above quota and resolution, it can be recycled and used. After the cash management of idle raised funds expires, it will be returned to the special account for raised funds in time. The matter still needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
7、 Verification opinions of the recommendation institution
After verification, the sponsor believes that Tengyuan cobalt industry uses some idle raised funds (including over raised funds) and its own funds for cash management on the premise of ensuring the safety of raised funds and the construction progress of investment projects with raised funds and not affecting the normal operation of the company, which is conducive to improving the use efficiency of funds. The matter has been deliberated and approved at the 25th meeting of the second board of directors and the 15th meeting of the second board of supervisors. The independent directors have issued clear independent opinions and fulfilled the necessary approval procedures, which need to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation. This matter complies with the relevant provisions of Shenzhen Stock Exchange GEM Listing Rules, Shenzhen Stock Exchange listed companies self regulatory guidance No. 2 – standardized operation of GEM listed companies, and listed companies regulatory guidance No. 2 – regulatory requirements for the management and use of raised funds by listed companies (revised in 2022). There is no change or disguised change in the purpose of the raised funds and damage to the interests of shareholders, which will not affect the normal progress of the investment project of the raised funds.
In conclusion, the recommendation institution has no objection to the company’s use of some idle raised funds (including over raised funds) and its own funds for cash management.
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Sponsor representative:
Wu Dong
