Securities code: 300078 securities abbreviation: Hangzhou Century Co.Ltd(300078) Announcement No.: 2022-008 bond Code: 123096 securities abbreviation: Sichuang convertible bonds
Hangzhou Century Co.Ltd(300078)
Announcement on carrying out foreign exchange hedging business
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Hangzhou Century Co.Ltd(300078) (hereinafter referred to as "the company") held the seventh meeting of the Fifth Board of directors on January 27, 2022, deliberated and adopted the proposal on developing foreign exchange hedging business, and agreed that the company and its subsidiaries should, according to the actual situation of overseas business, within 12 months after the approval of this board of directors, Use its own funds of no more than 270 million yuan to carry out foreign exchange hedging business; Within the above limit, the funds can be recycled. The relevant information is hereby announced as follows:
1、 Purpose of foreign exchange hedging business
Since the company and its subsidiaries need to settle in foreign currency when carrying out overseas business, in order to reduce the impact of exchange rate fluctuations on the company's operating performance, the company and its subsidiaries plan to carry out foreign exchange hedging business with banks and other financial institutions approved by relevant government departments and qualified for foreign exchange hedging business.
2、 Basic information of foreign exchange hedging business
(I) mainly involving currency and business type
The currency involved in the proposed foreign exchange hedging business is the settlement currency used by the company and its subsidiaries in overseas business, and the main foreign currency is US dollar.
The specific methods or products of foreign exchange hedging business to be carried out this time mainly include forward foreign exchange settlement and sales, foreign exchange swap, foreign exchange option, structural forward and other businesses.
(II) business scale and source of investment
According to the actual situation of overseas business of the company and its subsidiaries, it is proposed to use its own funds of no more than RMB 270 million to carry out foreign exchange hedging business within 12 months from the date of deliberation and approval of this board of directors. If the duration of a single transaction exceeds the validity of the resolution, the validity of the resolution shall be automatically extended until the termination of the single transaction. Within the above limit, the funds can be recycled. The funds for foreign exchange hedging business this time do not involve raised funds.
(III) duration and authorization of foreign exchange hedging business
According to the internal control system for forward foreign exchange settlement and sales transactions and other provisions, the board of directors of the company authorizes the chairman to be responsible for the operation and management of foreign exchange hedging business and sign relevant agreements and documents.
The authorization period shall be valid within 12 months from the date of deliberation and approval by the board of directors. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended to the termination of the single transaction.
(IV) counterparty of foreign exchange hedging business
Banks and other financial institutions approved by relevant government departments and qualified for foreign exchange hedging business. 3、 Risk analysis of foreign exchange hedging business
The company does not carry out foreign exchange hedging business for the purpose of speculation, mainly to effectively avoid the impact of exchange rate fluctuations on the company's performance. However, there are also certain risks, mainly including:
1. Exchange rate and interest rate fluctuation risk: when the foreign exchange rate fluctuates greatly, the company judges that the direction of sharp exchange rate fluctuation is inconsistent with the direction of foreign exchange hedging contract, which will cause exchange loss; If the exchange rate fluctuates in the future, a large deviation from the foreign exchange hedging contract will also cause exchange losses.
2. Internal control risk: foreign exchange hedging business is highly professional and complex, and losses may still be caused by imperfect internal control system in the process of handling foreign exchange hedging business.
3. Transaction default risk: when the foreign exchange hedging counterparty defaults, it cannot pay the hedging profit of the company as agreed, so it cannot hedge the actual exchange loss of the company, which will cause the loss of the company.
4. Customer default risk: the overdue of customer accounts receivable and the adjustment of orders by customers will make the actual payment collection inconsistent with the expected payment collection, which may make the actual cash flow unable to fully match the period or amount agreed in the foreign exchange hedging business contract signed by the financial department, resulting in the loss of the company. 4、 Risk control measures taken by the company
1. According to the special management system for high-risk investment business and the internal control system for forward foreign exchange settlement and sales transactions formulated by the company, the Finance Department of the company is the handling department of foreign exchange hedging business, which is responsible for the specific operation of foreign exchange hedging business, and the internal audit department of the company is responsible for reviewing the actual operation, fund use and profit and loss of foreign exchange hedging business.
2. The company and its subsidiaries shall conduct foreign exchange hedging business based on the prudent prediction of the amount of overseas foreign exchange receipts and payments and foreign currency borrowings of the company and its subsidiaries with the principle of conservatism and the purpose of preventing the risk of exchange rate fluctuations. The delivery date of foreign exchange hedging business shall match the foreign currency collection, borrowing period or foreign currency payment time predicted by the company as much as possible.
3. The financial department of the company is responsible for continuous monitoring of foreign exchange hedging business. When the market fluctuates violently or the risk increases, or leads to significant floating profit and loss, it shall be reported to the company's management at the first time to actively respond.
4. In order to control the risk of transaction default, the company carries out foreign exchange hedging business with legally qualified large banks and other financial institutions to ensure the legitimacy of the company's foreign exchange hedging business.
5、 Accounting policies and accounting principles
According to the relevant provisions and guidelines of accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 24 - hedge accounting and accounting standards for Business Enterprises No. 37 - presentation of financial instruments issued by the Ministry of finance, the company conducts corresponding accounting treatment for the proposed foreign exchange hedging business, which is reflected in the relevant items of the balance sheet and income statement.
6、 The approval procedures for the company to carry out foreign exchange hedging business
(I) deliberations of the board of directors
The 7th Meeting of the 5th board of directors of the company deliberated and approved the proposal on developing foreign exchange hedging business, and agreed that the company and its subsidiaries should use their own funds of no more than RMB 270 million to carry out foreign exchange hedging business within 12 months after the deliberation and approval of the board of directors according to the actual situation of overseas business. Within the above limit, the funds can be recycled. If the duration of a single transaction exceeds the validity of the resolution, the validity of the resolution shall be automatically extended to the termination of the single transaction; At the same time, the board of directors authorizes the chairman to be responsible for the operation and management of foreign exchange hedging business and signing relevant agreements and documents.
(II) deliberation of the board of supervisors
The sixth meeting of the 5th board of supervisors of the company deliberated and adopted the proposal on developing foreign exchange hedging business. The board of supervisors believes that this foreign exchange hedging business is based on the needs of the company and its subsidiaries to carry out overseas business, which can improve the ability of the company and its subsidiaries to deal with foreign exchange fluctuation risks and avoid and prevent exchange rate fluctuation risks.
Therefore, it is agreed that the company and its subsidiaries use their own funds of no more than RMB 270 million to carry out foreign exchange hedging and delivery business, and the above amount can be recycled within 12 months after the deliberation and approval of the board of directors.
(III) opinions of independent directors
The independent directors of the company believe that the procedures of the company's deliberation on this matter comply with relevant national laws and regulations and the relevant provisions of the articles of association. This foreign exchange hedging business is related to the overseas business of the company and its subsidiaries. For the purpose of avoiding and preventing exchange rate risk, it follows the principle of prudence and does not damage the interests of the company's shareholders, especially small and medium-sized shareholders. At the same time, the company has formulated the special management system for high-risk investment business and the internal control system for long-term foreign exchange settlement and sales transactions, improved the relevant business approval process, determined reasonable accounting principles and controllable risks. Therefore, it is agreed that the company shall carry out foreign exchange hedging business in accordance with the provisions of relevant systems.
(IV) verification opinions of the recommendation institution
As the sponsor of the company, Citic Securities Company Limited(600030) after verification, it is considered that the company's foreign exchange hedging business has been deliberated and approved by the board of directors and the board of supervisors of the company, and the independent directors have expressed clear consent to the matter. The relevant examination and approval procedures comply with the provisions of the measures for the administration of securities issuance and listing recommendation business and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of companies listed on GEM and other laws and regulations, and there is no harm to the interests of all shareholders. After consulting the calculation materials of overseas business income scale and foreign exchange hedging scale of the company and its subsidiaries, the company's foreign exchange hedging business scale and overseas income scale basically match. The recommendation institution reminds the company to pay attention to the risks of hedging related business and pay attention to the effectiveness of hedging. The recommendation institution agrees to the company's foreign exchange hedging business.
7、 Documents for future reference
1. Hangzhou Century Co.Ltd(300078) resolution of the seventh meeting of the Fifth Board of directors;
2. Hangzhou Century Co.Ltd(300078) independent directors' independent opinions on matters related to the seventh meeting of the Fifth Board of directors;
3. Hangzhou Century Co.Ltd(300078) resolution of the sixth meeting of the Fifth Board of supervisors;
4. Verification opinions of Citic Securities Company Limited(600030) on Hangzhou Century Co.Ltd(300078) carrying out foreign exchange hedging business.
It is hereby announced.
Hangzhou Century Co.Ltd(300078) board of directors
January 28, 2022
