Stock code: 001217 Stock abbreviation: Huartei Announcement number: 2022-052
Anhui Huartei Chemical Co.
About using part of idle fund-raising and own funds for
Announcement of cash management
The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete, and there are no false records, misleading statements or material omissions.
Ltd. (hereinafter referred to as “the Company”) held the tenth meeting of the fifth session of the Board of Directors and the seventh meeting of the fifth session of the Supervisory Committee on October 25, 2022, and considered and passed the “Proposal on the Use of Part of Idle Funds Raised and Own Funds for Cash Management”, agreeing that the Company should not affect the normal operation of the investment projects of the funds raised and the cash management of the funds raised. On the premise of ensuring the normal implementation of the investment projects of the proceeds and the normal development of the main business of the Company, the Company intends to use idle proceeds up to RMB150,000,000 (including RMB150,000,000) and idle own funds up to RMB70,000,000 (including RMB70,000,000) for cash management to purchase safe, liquid and low-risk investment products (including but not limited to structured products). Products (including but not limited to structured deposits, large certificates of deposit, capital-protected wealth management products, etc.). The use period is 12 months from the date of approval by the board of directors of the company, and the funds can be used on a rolling basis. The company’s management is authorized to exercise the relevant decision-making power and sign relevant legal documents, and the Finance Department is responsible for the specific implementation of the specific matters. The relevant information is announced as follows.
I. Basic information of the funds raised
Approved by the China Securities Regulatory Commission “Approval of Initial Public Offering of Shares of Anhui Huartei Chemical Company Limited” (SFC License [2021] No. 2915) and agreed by Shenzhen Stock Exchange, the Company issued 82,970,000 RMB ordinary shares (A shares) to the public at an issue price of RMB 10.46 per share, raising total funds of RMB 867,866, The actual net proceeds raised after deducting various issuance expenses amounted to RMB760,892,776.03. On September 24, 2021, Rongcheng CPA Firm (Special General Partnership) audited the availability of funds for the Company’s initial public offering and issued an audit letter of Rongcheng.
No. [2021]230Z0214.
The Company has signed the “Tripartite Supervision Agreement for the Funds Raised” with China Construction Bank Corporation, Chihuahua Branch and the sponsor, Hengtai Changcai Securities Company Limited, and has deposited the funds raised in the special account for the funds raised for this issue and managed the funds raised in a dedicated account.
II. Basic information of the investment of the proceeds project
According to the IPO Prospectus and other relevant documents, the investment projects of the Company’s IPO proceeds are as follows.
No. Project Name Total Investment (RMB) Amount of Funds Raised (RMB)
1 Cogeneration project 29,544.00 29,544.00
2 150,000 tons of hydrogen peroxide (Phase II) project 16,000.00 16,000.00
3 R&D center construction project 5,099.00 5,099.00
4 Annual production capacity of 10,000 tons of N-methylmorpholine-morpholine co-production project 13,352.70 13,352.70
5 Supplemental working capital 26,000.00 12,093.58
Total 89,995.70 76,089.28
Prior to the availability of the proceeds from the public offering, the Company will invest the proceeds with its own funds or bank loans according to the actual progress of the proceeds investment projects; after the availability of the proceeds, the proceeds will be used to replace the prior investment.
As of September 30, 2022, the actual use of the proceeds from the issue of investment projects is as follows.
No. Project name Total investment (RMB million) Amount of proceeds (RMB million) Actual use of proceeds (RMB million)
1 Cogeneration project 29,544.00 29,544.00 18,119.27
2 150,000 tons of hydrogen peroxide (Phase II) project 16,000.00 16,000.00 16,000.00
3 R&D center construction project 5,099.00 5,099.00 152.00
4 Annual production capacity of 10,000 tons of N-methylmorpholine-morpholine co-production project 13,352.70 13,352.70 9,316.59
5 Supplemental working capital 26,000.00 12,093.58 12,093.58
Total 89,995.70 76,089.28 55,681.44
As the construction of the investment project of the fund-raising capital requires a certain period, according to the construction progress of the investment project of the fund-raising capital, some of the fund-raising capital is idle in the short term at this stage.
III. Basic information of using part of idle fund-raising and own funds for cash management
(I) Investment purpose
In order to improve the efficiency of the use of funds raised and own funds, rational use of temporary idle funds raised and own funds, to ensure that the normal implementation of the company’s fund-raising investment projects, do not affect the normal production and operation of the company and ensure the safety of funds raised, the company intends to use part of the idle funds raised and own funds for cash management, to obtain more returns for the company and shareholders.
(II) Investment amount and effective period
On the premise of ensuring that the investment plan of the Company’s fund-raising capital and the liquidity required for the daily operation of the Company will not be affected, the Company intends to use part of the idle fund-raising capital up to RMB150,000,000 (inclusive of RMB150,000,000) and idle own funds up to RMB70,000,000 (inclusive of RMB70,000,000) for cash management, for a period of 12 months from the date of approval by the Board of Directors. The period of use shall be valid for 12 months from the date of consideration and approval by the Board of Directors. The above-mentioned amount can be used on a rolling basis during the validity period of the resolution, and the idle fund-raising funds will be returned to the special account in a timely manner upon the expiration of the cash management of idle fund-raising.
(III) Cash management product varieties
The company will strictly control the risk in accordance with the relevant regulations and intends to use part of the idle proceeds and idle own funds to purchase financial products or deposit products with high security, good liquidity and low risk (including but not limited to structured deposits, large certificates of deposit, time deposits, call deposits, etc.); the above investment varieties do not involve securities investment and the idle proceeds shall not be used to invest in stocks, derivative products, securities investment funds and unsecured debentures as investment targets. The above-mentioned investment varieties do not involve securities investment, and idle fund-raising money shall not be used to invest in stocks, derivative products, securities investment funds and bank wealth management or trust products with unsecured debts as the subject of investment, and the distribution of product income shall be determined according to the relevant agreement signed between the company and the product issuer, and idle fund-raising money management products shall not be pledged.
(IV) Implementation and authorization
Within the scope and validity of the above-mentioned investment quota, the Board of Directors of the Company authorizes the management of the Company to exercise the relevant decision-making power and sign relevant legal documents, and the Finance Department of the Company is responsible for the specific implementation of the specific matters.
(V) Resolution validity
The implementation period for the Company to use part of the temporarily idle fund-raising and own funds for cash management shall be valid for 12 months from the date of consideration and approval by the Board of Directors of the Company.
(VI) Information disclosure
The Company will disclose the information in accordance with the “Guidelines for the Supervision of Listed Companies No. 2 – Supervisory Requirements for the Management and Use of Funds Raised by Listed Companies (Revised in 2022)”, “Rules for the Listing of Stocks on Shenzhen Stock Exchange (Revised in 2022)” and “Guidelines for Self-regulation of Listed Companies on Shenzhen Stock Exchange No. 1 – Standardized Operation of Listed Companies on the Main Board (Revised in 2022)”. (Revised 2022)” and other relevant requirements for timely disclosure of specific cash management business details.
(vii) Description of connected relationship
The company intends to invest in products from financial institutions with which there is no connected relationship, and the use of temporarily idle funds and own funds for cash management will not constitute connected transactions.
IV. Investment risks and risk control measures
(I) Investment risk
Although the company’s investment products are low-risk investment varieties, but the financial market is subject to macroeconomic influence, the company will use relevant risk control measures to intervene at the right time and in the right amount according to the economic situation and changes in the financial market, but do not exclude the impact of market fluctuations, resulting in the risk of investment returns not meeting expectations.
(ii) Risk control measures
The cash management method is the financial products or deposit products with high security, good liquidity and low risk, and such investment products are mainly affected by the macroeconomic policies such as monetary policies. The company will intervene at the right time and in the right amount according to the economic situation and changes in the financial market, but does not exclude the impact of the investment by market fluctuations. In response to the possible investment risks, the Company has formulated the following measures.
1, will strictly implement prudent investment principles, the purchase of cash management products for a period of no more than 12 months, shall not be used for investment in securities, and shall not purchase financial products with unsecured bonds as the subject of investment.
2. Relevant personnel of the company’s finance department will analyze and evaluate the investment direction of cash management products and the progress of projects in a timely manner, and if the evaluation reveals any risk factors that may affect the safety of funds, the company will take corresponding measures in a timely manner to control investment risks.
3、Independent directors and supervisory committee have the right to question the use of funds and carry out supervision and inspection, and if necessary, professional third-party institutions can be hired to conduct audits, and once risks affecting the safety of funds are found or judged, corresponding preservation measures will be taken in a timely manner to control investment risks.
4. the company’s supervision and audit department is responsible for auditing and supervising the use and custody of the funds of this cash management financial product, evaluating the possible risks, and verifying and auditing the use of funds on a regular basis.
5. The company will strictly fulfill the relevant information disclosure obligations in a timely, accurate and complete manner in accordance with the relevant regulations of CSRC and Shenzhen Stock Exchange.
V. Impact of using part of idle fund-raising and own funds for cash management on the company’s operation
The company will use the temporarily idle fund-raising and own funds for cash management under the premise of ensuring that the funds required for the company’s fund-raising investment projects will not be affected and the safety of the fund-raising funds will be guaranteed, which will not affect the implementation progress of the fund-raising investment projects and the normal turnover of the company’s daily funds and will not affect the normal development of the company’s main business. There is no disguised change in the use of the proceeds. The temporary idle fund-raising and own funds will be used for low-risk investment and wealth management, time deposit or structured deposit, etc., which is conducive to improving the efficiency of fund utilization and gaining certain investment income, which is conducive to improving the overall performance level of the company and in the interest of all shareholders of the company.
VI. Relevant audit procedures and special opinions
The Company held the tenth meeting of the Fifth Session of the Board of Directors and the seventh meeting of the Fifth Session of the Supervisory Committee on October 25, 2022, and considered and approved the Proposal on the Use of Part of Idle Funds Raised and Own Funds for Cash Management, which is within the scope of consideration of the Board of Directors and need not be submitted to the shareholders’ meeting for consideration. The independent directors of the Company expressed their independent opinion with clear consent to this proposal. The sponsor, Hengtai Changcai Securities Co., Ltd. has issued a verification opinion in this regard.
1. Consideration by the board of directors
The Company held the tenth meeting of the fifth session of the Board of Directors on October 25, 2022, and considered and passed the Proposal on Using Part of Idle Funds Raised and Own Funds for Cash Management, agreeing to carry out cash management of temporarily idle funds raised and own funds on the premise of ensuring that the Company’s investment projects with funds raised are carried out normally and the normal development of the Company’s main business is not affected, and ensuring the safety of funds raised. Cash management, investment varieties are low-risk investment products with high security and good liquidity, including but not limited to structured deposits, large certificates of deposit, capital preservation wealth management products and other varieties. The use period is 12 months from the date of approval by the board of directors of the company, and the funds can be used on a rolling basis. The company’s management is authorized to exercise the relevant decision-making power and sign relevant legal documents, and the Finance Department is responsible for the specific implementation of the specific matters.
2. Deliberations and opinions of the Supervisory Committee
The company held the seventh meeting of the fifth session of the supervisory committee on October 25, 2022, and considered and passed the proposal of using part of the idle fund-raising and own funds for cash management, after examination, the supervisory committee is of the view that: the company uses the temporarily idle fund-raising and own funds for cash management, which does not affect the normal conduct of the company’s fund-raising investment projects and the normal development of the company’s main business, and there is no There is no disguised change in the use of the funds raised. The temporary idle fund-raising and own funds are used for low-risk investment and wealth management, time deposit or structured deposit, etc., which is conducive to improving the efficiency of fund use and gaining certain investment income, which is in line with the interests of all shareholders of the Company.
3、Independent directors’ opinion
After review, we are of the opinion that the use of temporarily idle funds and own funds for cash management is in compliance with the “Guidelines for Supervision of Listed Companies No. 2 – Supervisory Requirements for the Management and Use of Funds Raised by Listed Companies (Revised in 2022)”, “Rules for Listing of Stocks on Shenzhen Stock Exchange (Revised in 2022)”, “Self-regulatory Rules for Listed Companies on Shenzhen Stock Exchange” and “Self-regulatory Rules for Listed Companies on Shenzhen Stock Exchange”. Guidelines No. 1 – Standardized Operation of Listed Companies on the Main Board (Revised 2022)”, “Articles of Association” and other relevant provisions, and the necessary statutory approval procedures have been fulfilled. The use of temporarily idle fund-raising and own funds for cash management under the premise of ensuring the normal implementation of the Company’s fund-raising investment projects and the normal development of the Company’s main business will not be affected is conducive to improving the efficiency of capital use and obtaining investment returns, and there is no disguised change in the direction of investment of fund-raising, and there is no situation that is detrimental to the interests of the Company and all shareholders, especially the small and medium shareholders, and the decision-making procedures are lawful and effective.
In conclusion, we unanimously agree that the Company should use the idle fund raising capital up to RMB150 million (including RMB150 million) and the idle own funds up to RMB70 million (including RMB70 million) for cash management.
4. Verification opinion of the sponsor
After verification, the sponsor is of the opinion that the use of idle fund raising and own funds for cash management has been considered and approved by the board of directors and supervisory committee of the company, and the independent directors have expressed their clear consent, and the above matter is in compliance with the “Supervisory Guidelines for Listed Companies No. 2 – Management and Use of Fund Raising by Listed Companies” and “Shenzhen Securities Trading Co. The above matters are in compliance with the requirements of relevant laws and regulations such as “Supervisory Guidelines for Listed Companies No. 2 – Supervisory Requirements for the Management and Use of Funds Raised by Listed Companies” and “Self-regulatory Guidelines for Listed Companies of Shenzhen Stock Exchange No. 1 – Standardized Operation of Listed Companies on the Main Board”.
In summary, the sponsor has no objection to the use of part of the idle fund-raising and own funds for cash management by the company.
V. Documents for inspection
1、Resolution of the Tenth Meeting of the Fifth Session of the Board of Directors of Anhui Huartei Chemical Co.
2、Resolution of the Seventh Meeting of the Fifth Supervisory Committee of Anhui Huartei Chemical Co.
3. “Independent opinion of independent directors of Anhui Huartei Chemical Company Limited on matters related to the Tenth Meeting of the Fifth Session of the Board of Directors
4. “Verification opinion of Hengtai Changcai Securities Co., Ltd. on the use of part of idle fund-raising and own funds for cash management of Anhui Hualtay Chemical Co.
Hereby announced.
Board of Directors of Anhui Huartei Chemical Co.
October 27, 2022
