**Verification Opinions on the Deposit and Use of Raised Funds by Zhengzhou Huajing Diamond Co., Ltd. in 2012**
*Issued by China Merchants Securities Co., Ltd.*
China Merchants Securities Co., Ltd. (hereinafter referred to as “China Merchants Securities†or “the Sponsorâ€) serves as the sponsor institution for Zhengzhou Huajing Diamond Co., Ltd. (hereinafter referred to as “Huajing Diamond†or “the Companyâ€), which was listed on the Growth Enterprise Market (GEM) through an initial public offering (IPO). In accordance with relevant regulations, including the *Administrative Measures for Securities Issuance and Listing Sponsorship*, *Shenzhen Stock Exchange GEM Listing Rules*, and *Shenzhen Stock Exchange GEM Listed Companies Standard Operation Guidelines*, China Merchants Securities conducted a thorough review of the deposit and use of funds raised by the Company in 2012.
### Overview of the Fundraising Process
The Company’s IPO was approved by the China Securities Regulatory Commission (CSRC) under document No. [2010] 267. It issued 38 million shares at a price of RMB 21.32 per share, raising a total of RMB 810,160,000. After deducting underwriting and sponsorship fees of RMB 55,711,200, and other legal expenses such as audit and attorney fees totaling RMB 8,427,000, the net proceeds amounted to RMB 745,021,800. These funds were deposited into a dedicated account managed by the Company.
As of December 31, 2012, the balance in the fundraising account was RMB 76,035,352.21, consisting of RMB 51,035,352.21 in current accounts and RMB 25,000,000.00 in time deposits. The accumulated investment in fundraising projects reached RMB 692,500,675.07, with RMB 188,904,242.80 invested during the year. All figures have been verified by Zhongqin Wanxin Certified Public Accountants Co., Ltd.
### Management of Raised Funds
To ensure proper management, the Company established a dedicated fund management system, which includes strict procedures for fund usage and approval. Special accounts were set up for the raised funds, and tripartite supervision agreements were signed with the bank and the sponsor institution. These agreements clearly outlined the responsibilities of all parties involved, ensuring transparency and compliance.
As of December 31, 2012, the Company had not used any of the raised funds for purposes other than those originally intended. There were no unauthorized transfers or misuses of funds.
### Changes in Fund Usage
In 2012, the Company made adjustments to the location and implementation method of certain fundraising projects. Specifically, it decided to establish Henan Huamao New Material Technology Development Co., Ltd. in Luoyang City due to changes in the local environment and long-term development strategy. This change was approved by the board of directors, independent directors, and the board of supervisors, and was also endorsed by the sponsor institution.
No self-raised funds were used to replace previously funded projects, nor were any idle funds temporarily used for working capital. The Company continued to follow the original plan for the use of raised funds, and no violations were found.
### Verification Process
Throughout 2012, China Merchants Securities conducted on-site inspections, reviewed financial records, and interviewed key personnel to verify the deposit and use of the raised funds. The verification included checking bank statements, contracts, payment vouchers, and related disclosures. The process ensured that all fund-related activities were in line with the Company’s internal policies and regulatory requirements.
### Conclusion
After thorough examination, China Merchants Securities concluded that the deposit and use of the raised funds by Huajing Diamond in 2012 were in full compliance with applicable laws and regulations. The Company maintained proper control over the funds, and there was no evidence of misuse or violation. The sponsor has no objections to the manner in which the funds were managed and utilized.
**Sponsor Representatives:**
Yang Weilin
Yu Guoqing
**China Merchants Securities Co., Ltd.**
March 20, 2013
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