In this article, Elephant Jun will introduce you to the conceptual differences of common subjects in the investment calculation of fundraising and investment projects, including the underlying liquidity and supplementary liquidity in fundraising and investment projects, as well as the basic preparation fee and provisional amount in fundraising and investment projects. Conceptual differences in common subjects in investment estimation of fundraising projectsLaying down liquidity and supplementing liquidity in fundraising and investment projectsIn the process of reviewing the fundraising and investment projects of listed companies, it is often seen that the fundraising and investment projects are now "laying the bottom of the liquidity", and the "supplementary liquidity" is disclosed as a separate fundraising and investment project. In addition, individual projects also involve "basic reserve costs". "Laying the bottom liquidity", "supplementing liquidity" and "basic reserve fee" all appear in the form of funds in fundraising projects, and in this article, Elephant Jun will explain the differences and connections between these three. First, let's take a look at the definitions of "laying out liquidity" and "replenishing liquidity". "Bottom-up liquidity" usually appears in fund-raising projects, which is the liquidity required in the initial stage of the fund-raising project and the necessary liquidity to ensure the trial operation of the relevant fund-raising project after completion. After the company obtains "working capital", it is usually used to purchase raw materials, fuel, pay employee wages and benefits, and other project-related expenses. Liquidity is the capital occupied by current assets in the process of production and operation of an enterprise, which usually has the characteristics of short cycle and changeable form. Enterprises raise funds through the fund-raising project of "replenishing working capital", and use this part of the funds for production and operation, business development, scale expansion and many other aspects, so that enterprises can avoid borrowing to complete the financing of the required funds, and reduce the financial risk of enterprises to a certain extent. So what is the difference and connection between "laying out liquidity" and "supplementing liquidity"? 1. As a component of the investment amount of the fund-raising project, the use of the working capital should occur in the early stage of the construction and commissioning of the fund-raising project, and should be stored in the special account for raising funds before use, and shall not be transferred at will, and it is used to purchase raw materials, fuel, pay wages and other operating expenses in the trial operation stage after the completion of the project, and the working capital required is a planned operating expense. The main body of supplementary liquidity is the listed company, and the corresponding funds can be transferred from the special account for raising funds to their own capital accounts after the funds are raised, and once the transfer is completed, the corresponding raised funds are deemed to have been used, and the enterprise can freely use the part of its own funds. 2. The working capital can be temporarily used to supplement the working capital, but the corresponding procedures need to be performed in accordance with the law, and the corresponding funds need to be returned in time. In the future, when the actual use of the working capital is required for the project, it should be paid through the special account for raising funds. After the implementation of the fundraising project, the company usually uses the remaining working capital to permanently replenish the working capital. It is not uncommon for the remaining liquidity of the project to be permanently replenished. If you want to know more about the difference and connection between "Laying Liquidity" and "Supplemental Liquidity" and the calculation method of supplementing liquidity, please click on the Conceptual Differences of Common Subjects in the Investment Calculation of Fundraising and Investment Projects. The amount of permanent replenishment of liquidity is not unlimited, what are the requirements, review procedures and disclosure points for the use of over-raised funds in each sector for permanent replenishment or loan repayment? Article 10 of the Regulatory Guidelines for Listed Companies No. 2 – Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies (Revised in 2022) stipulates that "the portion of the actual net funds raised by listed companies that exceeds the amount of funds to be raised (hereinafter referred to as the "over-raised funds") can be used to permanently replenish liquidity and repay bank loans, and the cumulative amount shall not exceed 30% of the total over-raised funds in every 12 months. If the over-raised funds are used to permanently replenish liquidity and repay bank loans, they shall be deliberated and approved by the general meeting of shareholders of the listed company, and online voting methods shall be provided, and the independent directors and sponsor institutions shall express their clear consent and disclose them. Listed companies should undertake not to make high-risk investments or provide financial assistance to others within 12 months after replenishing liquidity, and disclose them. "For the requirements and review procedures for the use of over-raised funds in each sector for permanent replenishment or loan repayment, from the perspective of regulations, the requirements for the use of over-raised funds for permanent replenishment or loan repayment are relatively consistent with the requirements of the Shanghai and Shenzhen Main Board, the Science and Technology Innovation Board, the Growth Enterprise Market and the Beijing Stock Exchange, and the specific policies are as follows:Policies related to the use of over-raised funds
Data**: Regulatory Guidelines for Listed Companies No. 2 - Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies (Revised in 2022), Self-Regulatory Guidelines for Listed Companies on Shenzhen ** Stock Exchange No. 1 - Standardized Operation of Listed Companies on the Main Board, Self-Regulatory Guidelines for Listed Companies on Shanghai ** Stock Exchange No. 1 - Standardized Operation, Self-Regulatory Guidelines for Listed Companies on the Science and Technology Innovation Board of Shanghai ** Exchange No. 1 - Standardized Operation, Listing Rules of Beijing ** Exchange ** (Trial), Compiled by the Elephant Research Institute.
If you want to know more about the policies of the Shanghai and Shenzhen Main Board, the Science and Technology Innovation Board, the Growth Enterprise Market and the Beijing Stock Exchange for over-raised funds, please click on the Conceptual Differences of Common Subjects in the Investment Calculation of Fund-raising and Investment Projects to view. After understanding the requirements and review procedures for the use of over-raised funds in each sector for permanent replenishment or loan repayment, Elephant Jun will introduce you to the key points of disclosure of over-raised funds in each sector for permanent replenishment or loan repayment. The listed company shall announce the following contents in a timely manner after the board of directors deliberates: 1) the basic information of the funds raised, including the time of fundraising, the amount of funds raised, the net amount of funds raised, the amount of over-raised funds and the investment plan;2) Use of raised funds;3) The necessity and detailed plan for permanent replenishment or repayment of the loan using the over-raised funds;4) Commitment not to make high-risk investments and provide financial assistance to others within 12 months after replenishing liquidity;5) The impact of using over-raised funds to permanently replenish or repay loans to the company;6) Opinions issued by independent directors, board of supervisors, sponsor institutions (sponsors) or independent financial advisers. The specific policies are as follows:Policies on the timely announcement of the content after the Board of Directors' deliberations
Data**: Self-Regulatory Guidelines for Listed Companies on the Shanghai ** Stock Exchange No. 1 - Standardized Operation", "Self-Regulatory Guidelines for Listed Companies on the Shenzhen ** Stock Exchange No. 1 - Standardized Operation of Listed Companies on the Main Board", compiled by Elephant Research Institute.
If you want to know more about the relevant policies for timely announcements after the board of directors' deliberations, please click Conceptual Differences in Common Subjects in Investment Estimation of Fundraising and Investment Projects to view. Next, let Elephant Jun introduce to you the common use cases of subject funds in fundraising projects. Use cases of laying down working capital for permanent replenishment: Nansenyuan Electric Co., Ltd. Senyuan Electric, 002358SZ) held the 21st meeting of the fifth session of the board of directors on August 19, 2016, deliberated and approved the "Proposal on Withdrawing the Remaining Liquidity and Permanently Replenishing the Liquidity of the Surplus Raised Funds from the Previous Session", and agreed that the company will invest 2,464 remaining working capital in the 2013 non-public offering of raised funds in the project "Rapid On-load Voltage Regulation Reactive Power Compensation Filter Device (TWLB) Industrialization Project".430,000 yuan was transferred out, and the surplus raised funds as of August 18, 2016 were 6,769540,000 yuan and interest to permanently replenish liquidity. According to the "Guidelines for the Standard Operation of Listed Companies on the SME Board of the Shenzhen ** Exchange" and the company's "Management System for Raised Funds" and other relevant regulations, the permanent replenishment of liquidity with the surplus raised funds must be submitted to the general meeting of shareholders for deliberation and approval before it can be implemented. If you want to know more about the common cases of the use of subject funds in fundraising projects and the detailed interpretation of case violations, please click on the Conceptual Differences of Common Subjects in the Investment Calculation of Fundraising and Investment Projects. After comparing "Floor Liquidity" and "Supplementary Liquidity", let's turn our attention to "Basic Reserve Fee" and "Provisional Amount". The basic reserve fee and provisional amount of the fundraising projectThe basic preparation fee is mainly to solve the increase in investment and national policy adjustment approved by the superior in the construction process, as well as the increase in engineering projects and costs due to measures taken to solve accidents, also known as unforeseen engineering construction costs. Generally, it mainly refers to the unforeseen costs of design changes and engineering construction. The provisional amount refers to a sum tentatively determined by the construction unit in the bill of quantities and included in the contract price. It is used for the procurement of materials, equipment and services that have not yet been determined or unforeseen at the time of signing the construction contract, the project changes that may occur during the construction, the adjustment of the project price when the adjustment factors agreed in the contract appear, and the costs of claims and on-site visa confirmation. For detailed definitions and calculation methods of the basic reserve fee and the provisional amount, please click Conceptual Differences of Common Subjects in Investment Calculation of Fundraising and Investment Projects. There are two differences between the "basic reserve fee" and the "provisional amount", that is, the calculation method and the stage they are in. There is a correlation between the two, as the basic reserve costs occur at the stage of the previous budget estimates and are charged for unforeseen costs of the entire project, at which point there is no provision. When the construction project progresses to the construction drawing stage, the unforeseen expenses for the construction and installation project are listed in the form of temporary funds to play a buffering role in the reservoir. Therefore, from the perspective of the spatial scope of the construction project, the reserve fee is the overall unforeseen cost including the provisional payment; Extrapolating from the project timeline, the provisional payment in the construction drawing budget stage is actually another form of reserve fee in different periods, and the role of the two is the same. For ** investment projects, it is necessary to refer to the relevant policies and regulations of the state and industry. For independent investment projects of enterprises, in accordance with the principles of who invests, who makes decisions, who benefits, and who bears risks, it can be referred to, but it does not belong to the scope of compulsory enforcement, and the enterprise can determine the amount of basic reserve fees in combination with the specific conditions of the enterprise and the project. If you want to know the basic reserve fee rate of different industries, please click on the Concept Difference of Common Subjects in the Investment Calculation of Fundraising and Investment Projects. You may want to know about the conceptual differences between common subjects in the investment estimation of fundraising projects:What is the relationship between laying out liquidity and replenishing liquidity in fundraising projects? How to calculate the basic reserve fee and provisional amount in the fundraising project? For more complete content, please click on the Conceptual Differences of Common Subjects in Investment Calculation of Fundraising and Investment Projects. If you are also interested in the key points that need to be paid attention to in the design of fundraising projects, the concepts of common subjects in the investment calculation of fundraising projects, and how to write the feasibility study report of fundraising projects, you can directly click on the practical points of the fundraising planning process to purchase the portfolio content more favorably.