Securities code: 300017 securities abbreviation: Wangsu Science & Technology Co.Ltd(300017) Announcement No.: 2022-005 Wangsu Science & Technology Co.Ltd(300017)
Announcement on increasing the trading quota of financial derivatives and extending the investment period
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
Wangsu Science & Technology Co.Ltd(300017) (hereinafter referred to as "the company") deliberated and adopted the proposal on matters related to the development of financial derivatives trading business at the eighth meeting of the Fifth Board of directors and the sixth meeting of the Fifth Board of supervisors held on February 22, 2021. After deliberation, it is agreed that the company can carry out financial derivatives trading business within the limit of no more than 500 million yuan or equivalent foreign currency according to the development of overseas business. The above limit is effective within 12 months after the approval of the board of directors and can be recycled and used. For details, see the announcement on carrying out financial derivatives trading business (Announcement No.: 2021-007) disclosed by the company on cninfo.com on February 23, 2021.
In view of the expiration of the previous approval authorization period, combined with the company's overseas business development and the scale of foreign exchange assets held by the company, in order to reduce the risk of exchange rate fluctuation and meet the needs of daily operation and management, the company plans to increase the trading quota of financial derivatives and extend the investment period. The details are announced as follows:
1、 Background and overview of financial derivatives trading business
The investment period of financial derivatives approved by the company's previous board of directors will expire on February 21, 2022. With the expansion of the company's global business, the company still involves a large number of foreign currency businesses and holds a certain amount of foreign exchange assets in its daily business process. In order to effectively avoid and prevent the fluctuation risk of exchange rate and interest rate in the process of the company's overseas business and foreign currency borrowing, and reasonably control the impact of exchange risk on the company's operating performance, combined with the needs of daily operation, the company plans to adjust the trading amount of financial derivatives for hedging and extend the investment period.
On February 21, 2022, the company held the 20th meeting of the Fifth Board of directors, deliberated and adopted the proposal on increasing the trading quota of financial derivatives and extending the investment period. After deliberation, it is agreed to adjust the amount of funds used for financial derivatives trading business from the original no more than 500 million yuan or equivalent foreign currency to no more than 1 billion yuan or equivalent foreign currency. The authorization period is valid within 12 months from the date of deliberation and approval by the board of directors, and the above amount can be recycled and rolled within the authorization period. If the duration of a single transaction exceeds the authorization period of the resolution, the authorization period will be automatically extended until the termination of the transaction. At the same time, the board of directors of the company authorizes the general manager to exercise the approval authority of the financial derivatives trading business within the scope of the balance not exceeding the above limit, and the finance department shall implement the relevant matters of the above derivatives trading business.
According to the relevant provisions of Shenzhen Stock Exchange GEM Listing Rules and the company's financial derivatives trading business management system, the increase of financial derivatives trading quota and the corresponding extension of investment period are within the approval authority of the board of directors and do not need to be submitted to the general meeting of shareholders for deliberation.
2、 Counterparty of this derivatives trading business
The counterparties that the company plans to carry out financial derivatives trading business are banks and other financial institutions with sound operation, good credit and qualified for financial derivatives trading business.
3、 Basic information of financial derivatives trading business
(I) types of financial derivatives trading business to be carried out
In order to reduce the impact of exchange rate and interest rate fluctuations on the company's operating performance, the types of financial derivatives transactions to be carried out by the company include but are not limited to forward foreign exchange settlement and sales, options, forward foreign exchange trading, swaps (including currency swaps and interest rate swaps), currency swap business and the combination of the above products.
(II) business quota and validity period of financial derivatives trading to be carried out
The company plans to carry out financial derivatives trading business for hedging purposes. The amount of funds used for financial derivatives trading business shall not exceed RMB 1 billion or equivalent foreign currency. Within the authorization period, the funds can be recycled. 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 authorized option shall be automatically extended until the termination of the transaction. During the authorization period, the company carries out financial derivatives trading business, and the balance at any time point shall not exceed RMB 1 billion or equivalent foreign currency.
The board of directors of the company authorizes the general manager to exercise the approval authority of the financial derivatives trading business within the scope of the balance not exceeding the above limit, and the finance department shall implement the relevant matters of the above derivatives trading business.
(III) source of funds
The company plans to carry out financial derivatives trading, and the funds come from the company's own funds.
4、 Purpose, existing risks and Countermeasures of carrying out financial derivatives trading business
(I) purpose of financial derivatives trading
With the expansion of global business, the company's daily operation involves a large number of foreign currency businesses and holds a certain amount of foreign exchange assets. In order to effectively avoid the risk of exchange rate and interest rate fluctuations in the process of the company's overseas business and foreign currency borrowing, and prevent the adverse impact of large fluctuations in exchange rate and interest rate on the company, the company plans to carry out financial derivatives trading business.
The company does not conduct financial derivatives transactions solely for profit. All financial derivatives transactions are based on normal production and operation, based on specific business operations, and for the purpose of hedging, avoiding and preventing exchange rate and interest rate risks.
(II) risk of financial derivatives trading
1. Price fluctuation risk: market risk that may cause trading losses due to fluctuations in the underlying interest rate, exchange rate and market price.
2. Liquidity risk: the risk that the transaction cannot be completed due to insufficient market liquidity.
3. Performance risk: there is a risk of default caused by the counterparty's failure to perform when the contract expires when carrying out financial derivatives business.
4. Legal risk: due to the change of relevant laws or the violation of relevant legal systems by counterparties, the contract may not be executed normally and bring losses to the company.
(III) risk response measures
1. Clarify the trading principles of financial derivatives: the purpose of financial derivatives trading is to avoid and prevent exchange rate and interest rate risks, and any risk speculation is prohibited.
2. System construction: the company has formulated the financial derivatives trading business management system, which has made clear provisions on the operation specification, approval authority, management process, information isolation measures, internal risk reporting system, information disclosure and file management of financial derivatives trading business, which can effectively regulate the trading behavior of financial derivatives and control the trading risk of financial derivatives.
3. Product selection: before financial derivatives trading, conduct comparative analysis between multiple counterparties and multiple products, and select the financial derivatives most suitable for the company's business background, strong liquidity and controllable risk to carry out business.
4. Counterparty Management: fully understand the business qualification, implementation team, involved trading personnel and authorization system of financial institutions handling financial derivatives, and carefully select banks and other financial institutions with good credit and long-term business contacts with the company.
If necessary, professional institutions can be hired to analyze and compare the trading modes and counterparties of derivatives.
5. A specially assigned person shall be responsible for: a specially assigned person shall be assigned to continuously monitor the financial derivatives contracts held, timely report to the company's decision-making level and formulate response plans in case of severe market fluctuations or increased risks, or major floating profits and losses.
5、 Accounting policies and accounting standards for financial derivatives business
According to the accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments and
Accounting Standard No. 24 - hedge accounting, accounting standard for Business Enterprises No. 37 - presentation of financial instruments
The relevant provisions and guidelines of the accounting standards for Business Enterprises No. 39 - fair value measurement shall carry out corresponding accounting and accounting treatment for the proposed financial derivatives trading business, and reflect the relevant items of the balance sheet and income statement.
6、 Details of financial derivatives transactions of the company in the first 12 months
Whether the counterparty invests in derivatives, whether the initial investment start date and end date of derivatives are due, and the amount of transaction type funds
China Construction Bank Corporation(601939) no, the forward settlement of foreign exchange is $2.5 million, which is due on December 11, 2020 and December 13, 2021
Shanghai Pudong Development Bank Co.Ltd(600000) no, the forward exchange settlement of US $2 million is due on December 22, 2020 and December 22, 2021
Shanghai Pudong Development Bank Co.Ltd(600000) no, the forward settlement of foreign exchange is US $5 million, which is due on January 27, 2021 and January 27, 2022
Bank Of Shanghai Co.Ltd(601229) no, the forward settlement of foreign exchange is $5 million, which is not due on February 22, 2021 and February 23, 2022
Bank Of Shanghai Co.Ltd(601229) no, the forward settlement of foreign exchange is $3 million, which is not due on March 24, 2021 and March 24, 2022
Bank Of Shanghai Co.Ltd(601229) no, the forward settlement of foreign exchange is $5 million, which is not due on April 9, 2021 and April 7, 2022
Does the Bank of France and Pakistan settle foreign exchange in the future in the amount of US $5 million? It is not due on July 19, 2021 and July 19, 2022
Whether the Bank of France and Pakistan will settle foreign exchange in the future of US $5 million, which will not expire on July 30, 2021 and August 1, 2022
Bank Of Shanghai Co.Ltd(601229) no, the forward settlement of foreign exchange is $4 million, which is not due on August 9, 2021 and August 10, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is $3 million, which is not due on August 20, 2021 and August 22, 2022
Whether the Bank of France and Pakistan will settle foreign exchange in the future in the amount of USD 3 million, which is not due on August 19, 2021 and August 23, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is $4 million, which is not due on September 6, 2021 and September 6, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is US $4 million, which is not due on September 15, 2021 and September 15, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is $5 million, which is not due on October 12, 2021 and October 12, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is US $6 million, which is not due on November 2, 2021 and November 2, 2022
Does the Bank of France and Pakistan settle foreign exchange in the future of US $5 million? It will not expire on November 24, 2021 and November 23, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is US $6 million, which is not due on December 10, 2021 and December 12, 2022
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is $3 million, which is not due on January 5, 2022 and January 5, 2023
Industrial And Commercial Bank Of China Limited(601398) no, the forward settlement of foreign exchange is US $4 million, which is not due on January 20, 2022 and January 19, 2023
Note: the amount of financial derivatives purchased by the company that have not yet expired shall be included in the scope of 1 billion yuan of financial derivatives trading limit approved this time.
7、 Opinions of the board of supervisors and independent directors
(I) review opinions of the board of supervisors
After deliberation, the board of supervisors held that: the company's daily operation involves a large number of foreign currency businesses and holds a certain amount of foreign exchange assets. The company's financial derivatives transactions and increase the transaction amount are adjusted in combination with the actual situation of the company. Carrying out financial derivatives transactions can avoid and prevent the risk of exchange rate and interest rate fluctuations, reasonably control the impact of large fluctuations in exchange rate and interest rate on the company's performance, and meet the company's prudent and prudent risk management principles and the actual needs of production and operation. The company carries out financial derivatives trading with its own funds on the basis of normal operation, which will not affect the normal turnover of daily funds and the normal development of its main business. The relevant decision-making procedures comply with relevant laws and regulations, the articles of association and the company's management system for financial derivatives trading business, and there is no damage to the interests of the company and shareholders. Therefore, the board of supervisors agreed that the company should carry out financial derivatives trading business in accordance with the provisions of relevant systems.
(II) opinions of independent directors
The company carries out financial derivatives transactions and increases the transaction amount, which can avoid and prevent public interest
