Announcement on the Use of Part of Idle Raised Funds for Cash Management
Northern Chemical Industry Co., Ltd. and all members of the board guarantee that the content of this information disclosure is true, accurate, and complete, without false records, misleading statements, or major omissions.
According to the regulations of the China Securities Regulatory Commission on the supervision of raised funds by listed companies and the Shenzhen Stock Exchange's self-regulatory guidelines for main board listed companies, Northern Chemical Industry Co., Ltd. (hereinafter referred to as "the Company") held the fourth meeting of the sixth board of directors on April 3, 2026, and approved the proposal on the use of part of idle raised funds for cash management.
To ensure the safety of investment funds and not to affect the construction of raised fund projects and the normal progress of raised fund investment plans, the Company intends to use no more than RMB 26 million of idle raised funds for cash management at securities companies, commercial banks, and other financial institutions. This will be used for short-term investment products (with a term not exceeding 12 months) that have high safety, good liquidity, low risk, and yields significantly higher than the bank deposit rates of the same period, including but not limited to income certificates and structured deposits. The resolution is valid for twelve months from the date of approval by the board of directors, and within the above limit and validity period, the funds can be used in a rolling manner. The board of directors authorizes the general manager to make investment decisions and sign relevant contracts, including but not limited to: selecting qualified financial management institutions, types of financial products, specifying investment amounts, investment periods, and signing contracts or agreements. Idle raised funds from cash management will be promptly returned to the special account for raised funds upon maturity.
I. Basic Situation of Raised Funds
With the approval of the China Securities Regulatory Commission (Document No. [2017] 1417), the Company issued 99,138,233 shares to Shanxi Xinhua Protective Equipment Co., Ltd. (hereinafter referred to as "Xinhua Protection") for the purchase of related assets; a non-public offering of 36,210,025 shares was conducted at a price of RMB 11.57 per share, raising RMB 418,949,989.25. After deducting the underwriting fees (including tax) of RMB 9,000,000.00 and financial advisory fees (including tax) of RMB 5,000,000.00, the net amount raised totals RMB 404,949,989.25. Ruihua Certified Public Accountants (Special General Partnership) conducted a capital verification and issued the "Ruihua Verification Report No. [2018] 01300001." The Company has adopted a special account storage management for the raised funds and signed a tripartite supervision agreement for the special account storage of raised funds with independent financial advisors and the commercial banks holding the raised funds.
II. Usage and Balance of Raised Funds
The raised funds from the major asset restructuring in 2017 amounted to RMB 418,949,989.25. After deducting the underwriting fees (including tax) of RMB 9,000,000.00 and financial advisory fees (including tax) of RMB 5,000,000.00, the net amount is RMB 404,949,989.25. As of December 31, 2025, the remaining net amount of raised funds is RMB 261,631,821.35 (including RMB 256 million for cash management at China Construction Bank) temporarily idle.
III. Reasons for Idle Raised Funds
Some projects intended for the raised funds from the major asset restructuring in 2017 have been terminated due to external market conditions, resulting in temporary idleness of the raised funds.
IV. Basic Situation of Proposed Cash Management of Idle Raised Funds
- Investment Purpose
In line with the principle of maximizing shareholder interests, to improve the efficiency of raised fund usage while ensuring the safety of the Company's funds and not affecting the construction of raised fund projects and the normal progress of raised fund investment plans, the Company intends to manage idle raised funds to obtain certain investment returns, which aligns with the interests of the Company and all shareholders.