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Verification opinion of Northeast Securities Co., Ltd. on Jilin Zixin Pharmaceutical Co., Ltd. using a single fund-raised fund t

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Northeast Securities Co., Ltd.

About Jilin Zixin Pharmaceutical Co., Ltd.

Verification of permanent replenishment of working capital using a single fundraising

According to the "Shenzhen Stock Exchange Listing Rules (2012 Revision)", "Shenzhen Stock Exchange SME Board Listed Companies Standard Operation Guidelines" and other relevant documents, as Jilin Zixin Pharmaceutical Co., Ltd. (hereinafter referred to as "Zi Xin" "Pharmacy" or "Company") In 2010, the sponsor of non-public offering of shares, Northeast Securities Co., Ltd. (hereinafter referred to as "the company") on the use of a single surplus of funds raised by Zixin Pharmaceutical to permanently replenish liquidity has been seriously Prudent verification. The verification is as follows:

 

I. The situation of the funds raised by Zixin Pharmaceutical in non-public offering of shares in 2010

Approved by China Securities Regulatory Commission [2000] No. 1815, Zixin Pharmaceutical issued 49,875,311 non-public A shares in 2010, with a par value of RMB 1.00 per share and an issue price of RMB 20.05 per share. As of December 29, 2010, the total amount of funds raised by Zixin Pharmaceutical was 999,999,985.55 yuan, and the net amount of funds actually raised after deducting the issuance expenses was 986,450,110.24 yuan. The above-mentioned fundraising was verified by Zhongzhun Certified Public Accountants Co., Ltd. (hereinafter referred to as “Zhongzhun Certified Public Accountants”), and on December 29, 2010, it was approved by Zhongzheng Zizi [2010] No. 2068 “Capital Verification Report”.

 

Second, the collection and management of raised funds

In order to regulate the management and use of raised funds and protect the rights and interests of investors, the company and its subsidiaries and banks, sponsors, in accordance with the "Company Law", "Shenzhen Stock Exchange Listing Rules", "Special Storage System for Raised Funds", etc. The institutions signed the "Tripartite Supervision Agreement on Raised Funds" and the "Quadruple Supervision Agreement on Raised Funds".

 

As of December 31, 2013, the company's fundraising and balances are as follows:

unit: yuan

 

 

Serial number

Factory area

account name

Bank Account

Amount

1

Tonghua

China Construction Bank Co., Ltd. Tonghua Branch Business Office

22001648638055008958

53,487,725.55

2

Dunhua

China Construction Bank Corporation Dunhua Branch

22001686338055004821

779,264.65

3

Panshi

Agricultural Bank of China Co., Ltd. Liuhe County Branch

07-661001040010371

0.00

4

Yanji

Jilin Bank Yanbian Branch

060101201020003911

25,374,397.09

Total

 

79,641,387.29

 

Third, the use of funds raised by the company's Yanji plant area, savings
 
(1) The use of funds raised by the company's Yanji plant area and the savings
 
As of December 31, 2013, the Yanji plant project has reached the usable state, and has passed the QS certification of beverages, candied fruit, confectionery, tea-containing products and substitute teas, and obtained the drug production. The license, Yanji plant area promised to invest 299.93 million yuan, the cumulative use of raised funds is about 275.852 million yuan, the bank deposit interest income is about 1.296 million yuan, the net savings of raised funds is about 25,374,400 yuan.
 
Unit: 10,000 yuan
 
 

project

Ginseng product serialization project (Yanji factory area)

Committed investment amount

29,993.00

Amount invested at the end of the period

27,585.21

Project savings

2,407.79

Plus: bank interest income

129.65

Net savings from raised funds

2,537.44

 

(II) Reasons for the savings of the company's Yanji plant area
 
1. Interest income is generated during the period of deposit of funds.
 
2. In the process of project construction, the company starts from the actual situation of the project, strictly manages, uses the raised funds in accordance with the principle of economy, rationality and effectiveness, rationally allocates resources, adopts cost control, optimizes production process and other measures, and saves project investment.
 
 
IV. The plan and commitment of the company's Yanji plant project to save funds
 
In view of the completion of the project construction of Zixin Pharmaceutical Yanji Plant, the company has increased the efficiency of the funds raised by the savings, reduced the company's financial expenses, created greater benefits for the company and shareholders, and the surplus funds raised by the Yanji plant area were permanently replenished with liquidity. Other fundraising projects have any impact on the project area. Therefore, it is planned to use the raised funds of the Yanji plant area to raise funds of approximately RMB 25,734,400 (including interest income) to supplement the daily production and operation activities.
 
 
The company promises that the unpaid items payable for the completed project of Yanji Plant will be paid by the company's own funds when the payment terms are met. The company has not conducted venture capital investment in the past 12 months. At the same time, the company promises not to invest in high-risk investments such as securities investment and provide financial assistance to others within 12 months after the permanent replenishment of working capital.
 
 
V. Company decision-making procedures
 
The 10th meeting of the 5th Board of Directors and the 5th meeting of the 5th Board of Supervisors reviewed and approved the above-mentioned single fund-raising fund for permanent supplementary liquidity plan.
 
The independent directors of the company issued the following independent opinions on the use of the above-mentioned single fund-raising funds to permanently supplement the working capital:
 
“The company's single fund-raising funds will permanently supplement the company's working capital, which can effectively promote the company's development and reduce the company's financial expenses. The surplus fund raised by Yanji Plant's surplus funds will not have any impact on other fund-raising project sites, which is in line with the company's development. The principle of maximizing the interests of shareholders and shareholders. The company's single fund-raising funds for permanent replenishment of working capital are in line with the “Guidelines for the Standardized Operation of SME Board Listed Companies of Shenzhen Stock Exchange” and the Memorandum of Information Disclosure of SME Board No. 29: Use of Raised Funds And the company's "raised fund management system" and other relevant regulations. The company has not carried out venture capital investment in the past 12 months, and at the same time, the company promises not to invest in high-risk investments such as securities investment and other people within 12 months after the permanent replenishment of working capital. Provided financial assistance. Therefore, the company agreed to replenish the liquidity of the ginseng product serialization project (Yanji Plant) with a balance of approximately RMB 25,374,400 (including interest income) and agreed to submit the proposal to the company in 2014. One temporary stock
 
 
Sixth, the main verification procedures of the sponsor institution
 
The sponsor institution will deposit and use the funds raised by Zixin Pharmaceutical and other fund-raising projects by reviewing the use of relevant funds, on-site inspections, field visits, interviews with directors, supervisors, senior management personnel and principals of the construction site. The implementation was verified. The relevant materials reviewed by the Company include, but are not limited to, the documents of the 10th meeting of the 5th Board of Directors, the documents of the 5th meeting of the 5th Board of Supervisors, the opinions of independent directors, the statements issued by the depository bank, and the recruitment of Yanji Project. Capital account journal, project progress description, project construction contract, equipment purchase contract, etc.
 
 
Seven, the advice of the sponsor institution
 
After verification, Northeast Securities believes that:
 
1. Zixin Pharmaceutical plans to serialize the ginseng products (Yanji) project. The proposal for the permanent replenishment of working capital funds has been reviewed and approved at the fifth meeting of the 10th Board of Directors and the 5th Board of Supervisors of the 5th Session of the Board of Directors. A clear consent and fulfilled the necessary decision-making procedures;
 
2. The company promised not to carry out venture capital investment in the past 12 months, and promised not to carry out high-risk investment such as securities investment and provide financial support for others within 12 months after the permanent replenishment of working capital.
 
3. The Company has no objection to the case that Zixin Pharmaceutical will permanently replenish the liquidity of the funds raised by the individual funds, and it can be implemented after being reviewed and approved by the shareholders' meeting.
 
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(This page has no text, which is the signing page of the verification opinion of Northeast Securities Co., Ltd. on the use of a single surplus fund raised by Jilin Zixin Pharmaceutical Co., Ltd. to permanently replenish working capital)