Shenzhen H&T Intelligent Control Co.Ltd(002402)
Feasibility analysis report on carrying out forward foreign exchange trading business
1、 The purpose of the company's forward foreign exchange trading business
The export sales revenue of Shenzhen H&T Intelligent Control Co.Ltd(002402) (hereinafter referred to as "the company") accounts for more than 50% of the total main business revenue, which is mainly settled in US dollars, euros and Hong Kong dollars. Under the background of the floating exchange rate of RMB against foreign currencies, the company faces certain exchange rate fluctuation risks. The company plans to carry out forward foreign exchange trading business and effectively reduce the risk of exchange loss through reasonable RMB forward foreign exchange trading. Through forward foreign exchange transactions, the company can effectively avoid exchange rate risks, lock in the transaction costs or benefits at the future time point, and realize asset preservation for the purpose of avoiding risks.
2、 Overview of forward foreign exchange trading business
The forward foreign exchange trading business to be carried out by the company is the forward foreign exchange settlement and sales business handled in the bank to avoid and prevent exchange rate risk in order to meet the needs of normal production and operation. It refers to signing the forward foreign exchange settlement and sales contract with the bank to agree on the foreign exchange currency, amount, exchange rate and time limit for foreign exchange settlement or sales in the future, and then according to the currency, amount Exchange rate to handle the business of settlement or sale of foreign exchange.
3、 Expected forward foreign exchange transactions
1. Types of forward foreign exchange transactions
The forward foreign exchange trading business to be carried out by the company is limited to the main settlement currencies used in the company's production and operation - US dollars, euros and Hong Kong dollars. The delivery period is consistent with the predicted payment collection period, and the amount matches the predicted payment collection amount.
2. Estimated amount of foreign exchange transactions during the business period and forward
The company expects to carry out forward foreign exchange trading business within 12 months from the date of deliberation and approval by the board of directors, with a total amount of no more than US $250 million (all other foreign currencies are converted into US dollars), and the above amount can be recycled and rolled.
4、 Feasibility analysis of forward foreign exchange trading business
The company's forward foreign exchange trading business is carried out around the company's business. Based on normal production and operation, relying on specific business operations and hedging, it is conducive to avoiding and preventing the risk of exchange rate fluctuations and reducing the impact of exchange rate fluctuations on the company's operating performance. The company has formulated the internal control system for forward foreign exchange trading business and improved relevant internal control processes. The targeted risk control measures taken by the company are feasible and effective; At the same time, the margin of the forward foreign exchange trading business to be carried out by the company will use its own funds, not involving the raised funds. Therefore, it is necessary and feasible for the company to carry out forward foreign exchange trading business, which can effectively reduce the risk of exchange rate fluctuation.
5、 Risk analysis of forward foreign exchange trading business
In carrying out forward foreign exchange transactions, the company follows the principle of locking exchange rate risk and hedging, and does not engage in speculative and arbitrage transactions. When signing the contract, the company conducts transactions in strict accordance with the company's predicted collection period and collection amount, meeting the relevant conditions for the application of hedging accounting methods specified in the accounting standards for business enterprises.
Forward foreign exchange transactions can reduce the impact of exchange rate fluctuations on the company in case of large exchange rate fluctuations, but there may also be some risks:
1. Exchange rate fluctuation risk: in the case of large changes in the exchange rate market, the bank's forward foreign exchange settlement exchange rate quotation may be lower than the company's quotation exchange rate to customers, so that the company cannot lock according to the quotation exchange rate to customers, resulting in exchange losses.
2. Customer default risk: the customer's accounts receivable are overdue, and the payment cannot be recovered within the predicted collection period, which will cause delayed delivery and cause losses to the company.
6、 Risk control measures to be taken by the company
1. The company purchases raw materials directly and pays foreign exchange directly through foreign currency transactions, so as to reduce the amount of foreign exchange settlement and reduce exchange gains and losses.
2. The company uses the bank's forward foreign exchange settlement exchange rate to quote to the customer, so that the company can lock the customer's quotation exchange rate after determining the order; If the exchange rate fluctuates greatly, when the forward foreign exchange settlement exchange rate is far lower than the exchange rate quoted to the customer, the company will put forward requirements and negotiate with the customer to adjust the price.
3. The company has formulated a special internal control system for forward foreign exchange trading business, which clearly stipulates the operation principle, approval authority, responsible department and person in charge, internal operation process, information isolation measures, internal risk reporting system and risk handling procedures, information disclosure, etc. of forward foreign exchange trading business, so as to reduce the internal control risk.
4. In order to prevent the delayed delivery of forward foreign exchange settlement, the company attaches great importance to the management of accounts receivable and actively collects accounts receivable to avoid the overdue phenomenon of accounts receivable.
7、 Feasibility analysis conclusion of forward foreign exchange transactions carried out by the company
The forward foreign exchange transactions carried out by the company are carried out around the actual business of the company, based on the normal business background, with the main purpose of avoiding exchange rate risk, and prohibit speculation and arbitrage transactions, which is out of the urgent need of the company's stable operation. The company has established internal control procedures and long-term transaction management measures, and made clear the internal control procedures and long-term transaction management measures. The company arranges and uses professionals in strict accordance with the regulations, establishes a strict authorization and management system, establishes a timely reporting system for abnormal conditions, and forms an efficient risk handling procedure. The system meets the relevant requirements of the regulatory authorities and the needs of practical operation. The risk control measures formulated are practical and effective. By carrying out forward foreign exchange transactions, the company can avoid and guard against exchange rate risks to a certain extent, and lock the transaction costs and benefits at the future time point according to the company's specific operation and investment business needs; Balance the company's foreign currency assets and liabilities.
February 18, 2002
