Guotai Junan Securities Co.Ltd(601211)
About Shanxi Huaxiang Group Co.Ltd(603112)
Verification opinions on cash management using some idle raised funds of convertible corporate bonds
Guotai Junan Securities Co.Ltd(601211) (hereinafter referred to as ” Guotai Junan Securities Co.Ltd(601211) ” or “recommendation institution”) as a recommendation institution for Shanxi Huaxiang Group Co.Ltd(603112) (hereinafter referred to as ” Shanxi Huaxiang Group Co.Ltd(603112) ” or “company”) to publicly issue convertible corporate bonds, according to the measures for the administration of securities issuance and listing recommendation business The regulatory guidelines for listed companies No. 2 – regulatory requirements for the management and use of raised funds by listed companies (revised in January 2022), the stock listing rules of Shanghai Stock Exchange (revised in January 2022), the measures for the administration of raised funds by listed companies of Shanghai Stock Exchange and other relevant laws, regulations and normative documents, Carefully and prudently checked the cash management of Shanxi Huaxiang Group Co.Ltd(603112) proposed to use part of the temporarily idle raised funds of convertible corporate bonds. The verification results are as follows:
1、 Basic information of raised funds
Approved by the reply on approving Shanxi Huaxiang Group Co.Ltd(603112) public issuance of convertible corporate bonds (zjxk [2021] No. 3088) of China Securities Regulatory Commission, the company is approved to publicly issue convertible corporate bonds with a total face value of no more than 800 million yuan for a period of 6 years. This time, 8 million convertible corporate bonds were actually issued, each with a face value of RMB 100.00. The total issued amount was RMB 800 million. After deducting the issuance expenses of RMB 13489284.90 (excluding value-added tax), the net amount of funds actually raised was RMB 786510715.10. The above funds were in place on December 28, 2021. Tianjian Certified Public Accountants (special general partnership) verified the availability of the raised funds and issued the verification report (tjyz [2021] No. 3-81).
2、 Investment projects committed to raising funds in issuance application documents
According to the Shanxi Huaxiang Group Co.Ltd(603112) prospectus for public issuance of convertible corporate bonds, the raised funds to be used by the company for this raised investment project are as follows:
Unit: 10000 yuan
No. project name total investment to be invested in raised funds
1 machining production expansion and upgrading and parts industry chain extension project 56437.53 52500.00
2. Intelligent upgrading and R & D capacity improvement project of casting production line 7612.80 6500.00
3. Supplementary working capital project 21000.00 21000.00
Total 85050.33 80000.00
3、 Basic information of cash management using some idle raised funds of convertible corporate bonds this time 1. Investment purpose
As the construction of raised investment projects requires a certain period, according to the project implementation plan and construction progress, part of the raised funds will be temporarily idle for a certain period of time. In order to improve the use efficiency of the raised funds, on the premise of ensuring that the safety of the raised funds and the normal progress of the investment plan of the raised funds are not affected, the temporarily idle raised funds are used for cash management to increase the company’s income and obtain more returns for the company and shareholders.
2. Investment varieties
The issuer of the company’s proposed investment products is a financial institution that can provide breakeven commitment. The product varieties are financial products with high security, good liquidity and breakeven agreement, and the investment products shall not be used for pledge.
3. Limit and term
On the premise of not affecting the normal progress of the company’s investment plan of raised funds, the company plans to conduct cash management on the temporarily idle raised funds with a total amount of no more than RMB 500 million (inclusive). Within the above limit, it shall be valid within one year from the date of deliberation and approval by the board of directors of the company. The term of the financial products purchased shall not exceed 12 months and shall not affect the normal progress of the investment plan of the raised funds. Within the above limit, the funds can be used on a rolling basis. 4. Implementation mode
The board of directors of the company authorizes the general manager to exercise the investment decision-making power and sign relevant contract documents within the limit, and the financial department is responsible for handling relevant matters.
5. Income distribution
The company’s cash management income shall be preferentially used to make up the insufficient investment amount of the raised investment project and the working capital required for daily operation, and shall be in strict accordance with the special account of China Securities Regulatory Commission and Shanghai Stock Exchange.
6. Information disclosure
The company will timely fulfill the obligation of information disclosure according to the progress of using idle raised funds to purchase low-risk short-term financial products in accordance with the relevant requirements such as 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 January 2022).
4、 Investment risk and risk control measures
1. Investment risk
The financial products purchased by the company with some idle raised funds of convertible corporate bonds will be strictly evaluated and screened, but the income is affected by the macro-economy, and the investment is affected by market fluctuations. Subscription risk, policy risk, market risk, liquidity risk, information transmission risk, raising failure risk, reinvestment / early termination risk and other force majeure risks prompted by the issuer of other products.
2. Risk control measures
Strictly select investment objects and select products with good liquidity and short term issued by units with good reputation, large scale, ability to ensure capital safety, good operating efficiency and strong capital operation ability. The company will timely track and analyze the investment direction and project progress of various financial products. Once adverse factors are found or judged, the company will timely take corresponding preservation measures to control investment risks. The company’s 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. The company will fulfill the obligation of information disclosure in accordance with the relevant provisions of Shanghai Stock Exchange.
5、 Impact on the daily operation of the company
On the premise of complying with relevant laws and regulations and ensuring that the normal progress of the company’s investment projects with raised funds and the safety of raised funds are not affected, the company’s use of some idle raised funds of convertible corporate bonds to purchase principal guaranteed financial products will not affect the normal development of the company’s investment projects with raised funds. By using some idle raised funds of convertible corporate bonds to purchase principal guaranteed financial products, we can improve the use efficiency of raised funds, obtain certain investment income and seek more investment returns for the company’s shareholders.
6、 Review procedures for implementation
On January 20, 2022, the company held the 18th meeting of the second board of directors and the 13th meeting of the second board of supervisors, deliberated and adopted the proposal on cash management using the funds raised by some idle convertible bonds, and the independent directors issued clear consent opinions.
1. Opinions of the board of supervisors
The use of some idle funds of convertible corporate bonds for cash management is conducive to the company to improve the use efficiency of idle funds, increase the company’s investment income, and will not affect the normal development of the company’s main business. The examination and approval procedures for this matter are legal and compliant, comply with the relevant provisions of the company, and there is no situation damaging the interests of the company and all shareholders. The board of supervisors of the company agrees that the company will use the funds raised by idle convertible bonds for cash management this time. 2. Opinions of independent directors
On the premise of ensuring the normal implementation of the use plan of raised funds, the company uses some idle convertible bonds to raise funds for cash management, which will not affect the normal development of the company’s investment projects with raised funds and the company’s normal production and operation, improve the fund use efficiency, obtain a certain investment income and further improve the overall performance level of the company, In line with the rights and interests of the company and all shareholders. The contents and decision-making procedures of this matter comply with the stock 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, and the guidelines for the self discipline supervision of listed companies of Shanghai Stock Exchange No. 1 – standardized operation.
Therefore, we unanimously agree that the company will use the idle convertible bond raised funds of no more than 500 million yuan for cash management.
7、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the company’s use of part of the idle raised funds of convertible corporate bonds for cash management has been deliberated and approved by the board of directors and the board of supervisors of the company, the independent directors have issued clear consent opinions, comply with relevant laws and regulations and perform necessary legal procedures. The above matters comply with 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 (revised in January 2022) and the measures for the management of raised funds by listed companies of Shanghai Stock Exchange. There is no change in the use of raised funds in a disguised manner and will not affect the normal progress of the investment plan of raised funds. The recommendation institution has no objection to Shanxi Huaxiang Group Co.Ltd(603112) using the idle raised funds of convertible corporate bonds of no more than 500 million yuan for cash management.
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Sponsor representative:
Dong Shuai, Zhang Xinran
Guotai Junan Securities Co.Ltd(601211)
specific date
