Securities code: 688020 securities abbreviation: Guangzhou Fangbang Electronics Co.Ltd(688020) Announcement No.: 2022-016
Guangzhou Fangbang Electronics Co.Ltd(688020)
Announcement on the company's foreign exchange hedging business
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Important content tips:
The amount of funds that the company plans to carry out hedging business shall not exceed US $30 million (the funds within the limit can be used on a rolling basis). The source of funds is its own funds and does not involve raised funds. The validity period of the quota is 12 months from the date of deliberation and approval by the board of directors of the company.
The hedging business of the company is based on normal production and operation, with the purpose of avoiding and preventing exchange rate risks, and does not carry out speculation and arbitrage transactions solely for profit.
After the foreign exchange hedging business is reviewed and approved by the board of directors, it is not necessary to submit it to the general meeting of shareholders for review
Discussion.
Guangzhou Fangbang Electronics Co.Ltd(688020) (hereinafter referred to as "the company") deliberated and adopted the proposal on the company's foreign exchange hedging business at the first meeting of the third board of directors and the first meeting of the third board of supervisors on Wednesday, February 16, 2022, and agreed that the company should avoid and prevent exchange rate risks according to the actual business needs, Use its own funds to carry out foreign exchange hedging business with banks and other financial institutions. After the foreign exchange hedging business is deliberated and approved by the board of directors, it is not necessary to submit it to the general meeting of the company for deliberation. The relevant matters are hereby announced as follows:
1、 Necessity of hedging business
The import and export business of the company is mainly settled in foreign currencies such as US dollar and Japanese yen. Therefore, when the exchange rate fluctuates greatly, the exchange profit and loss will have a certain impact on the operating performance of the company. In order to effectively avoid the risks in the foreign exchange market, prevent the adverse impact of large exchange rate fluctuations on the company's operating performance, improve the use efficiency of foreign exchange funds and reasonably reduce financial expenses, the company plans to carry out hedging business with banks and other financial institutions. The hedging business of the company is based on normal production and operation, with the purpose of avoiding and preventing exchange rate risks, and does not carry out speculation and arbitrage transactions solely for profit.
2、 Overview of hedging business to be carried out
(I) business type
The hedging business to be carried out by the company includes forward foreign exchange settlement and sales business, foreign exchange swap business, interest rate swap business, foreign exchange option business and other foreign exchange derivatives business. The currencies involved are the main settlement currencies used by the company for production and operation, such as US dollar and Japanese Yen.
(II) business scale and term
The amount of funds that the company plans to carry out hedging business shall not exceed US $30 million (the funds within the limit can be used on a rolling basis). The source of funds is its own funds and does not involve raised funds. The validity period of the quota is 12 months from the date of deliberation and approval by the board of directors of the company.
(III) decision making and authorization
The company's proposed foreign exchange hedging business has been deliberated and approved at the first meeting of the third board of directors and the first meeting of the third board of supervisors, and does not need to be submitted to the general meeting of shareholders for deliberation.
At the same time, the board of directors of the company authorizes the chairman to exercise the decision-making power and sign relevant legal documents within the scope and validity of the quota, and the specific matters shall be organized and implemented by the financial department of the company.
3、 Risk analysis of hedging business
The company's foreign exchange hedging business follows the principles of legality, prudence, safety and effectiveness, and does not engage in speculative and arbitrage trading operations, but there are still some risks in the operation of foreign exchange hedging business.
1. Market risk: due to the unpredictability of the changes in the economic situation outside China, it may cause significant fluctuations in the exchange rate, and the foreign exchange hedging business faces certain market judgment risks.
2. Operational risk: the hedging business is highly professional and complex, which may cause certain risks due to the operator's failure to timely and fully understand the derivatives information or operate according to the specified procedures.
3. Default risk: for forward foreign exchange transactions, if the bank defaults during the contract period, the company cannot execute the foreign exchange contract at the agreed price, and there is a risk that the risk exposure cannot be effectively hedged.
4、 Risk control measures taken by the company
1. The Finance Department of the company will choose the hedging business with simple transaction structure, strong liquidity and controllable risk within the limit and validity period authorized by the board of directors, preferably large commercial banks with legal qualification and high credit level, carefully select the counterparty and hedging business, and report to the chairman for approval. Without the authorization or approval of the chairman, other departments and individuals have no right to make decisions on hedging business.
2. The company will strictly implement the standardized business operation process and authorization management system, strengthen the management of bank accounts and funds, strictly implement the approval procedures for fund allocation and use, and minimize credit risk.
3. The company continuously optimized the corresponding control system and risk prevention measures, made rational use of intermediary resources such as accounting firms, and strengthened communication and exchange with banks and other relevant professional institutions and experts.
4. The financial department of the company shall pay attention to the market information of hedging business at any time, track the changes of open market price or fair value of hedging business, timely evaluate the risk exposure of traded hedging business, and timely submit risk analysis report for the decision-making of the company's management.
5. The company has formulated relevant systems to clearly specify the approval authority, operation process and risk control of the company's foreign exchange hedging business. The company will effectively implement the system and strictly control business risks.
5、 Opinions of independent directors and board of supervisors
(I) opinions of the board of supervisors
The company's foreign exchange hedging business is mainly to prevent the adverse impact of exchange rate fluctuations and meet the needs of the company's business development. The company has established and improved effective approval procedures and risk control system, and implemented them in strict accordance with the system requirements. The relevant provisions of the company on hedging business do not harm the interests of listed companies and shareholders. In conclusion, the board of supervisors unanimously agreed that the company should carry out hedging business according to the actual operation.
(II) opinions of independent directors
The foreign exchange hedging business to be carried out by the company this time will help the company avoid the risks of the foreign exchange market, prevent the adverse impact of exchange rate fluctuations on the company's operating performance, improve the use efficiency of foreign exchange funds and reasonably reduce financial expenses. There is no situation that damages the interests of the company and minority shareholders. To sum up, we agree that the company will carry out foreign exchange hedging business in a timely manner in accordance with the requirements of business development and the provisions of relevant systems on the premise of ensuring that it does not affect the capital demand and capital safety of normal operation.
6、 Verification opinions of the recommendation institution
Upon verification, Huatai United Securities believes that:
1. The company's foreign exchange hedging business is mainly to prevent the adverse impact of exchange rate fluctuations, meet the needs of the company's business development, improve the efficiency of the use of foreign exchange funds, reasonably reduce financial expenses, and there is no situation that damages the interests of listed companies and shareholders.
2. The company's proposed foreign exchange hedging business has been deliberated and approved at the first meeting of the third board of directors and the first meeting of the third board of supervisors. The independent directors have also issued clear consent opinions, fulfilled the necessary approval procedures and complied with the provisions of relevant laws and regulations.
To sum up, the recommendation institution has no objection to Guangzhou Fangbang Electronics Co.Ltd(688020) the proposed foreign exchange hedging business.
The sponsor draws investors' attention: Although the company has taken corresponding risk control measures for the hedging business, the inherent market risk, operational risk and default risk of the hedging business may have an impact on the company's operating performance.
7、 Online announcement attachment
1. Independent opinions of Guangzhou Fangbang Electronics Co.Ltd(688020) independent directors on matters related to the first meeting of the third board of directors;
2. Verification opinions of Huatai United Securities Co., Ltd. on Guangzhou Fangbang Electronics Co.Ltd(688020) carrying out foreign exchange hedging business.
It is hereby announced.
Guangzhou Fangbang Electronics Co.Ltd(688020) board of directors February 17, 2022
