Yingtong Telecommunication Co.Ltd(002861)
Feasibility analysis report on carrying out foreign exchange hedging business
1、 Overview of foreign exchange hedging business
1. Investment purpose: in order to effectively prevent the exchange rate risk faced by Yingtong Telecommunication Co.Ltd(002861) (hereinafter referred to as "the company") and wholly-owned and holding subsidiaries (hereinafter collectively referred to as "the company and its subsidiaries") in the import and export business, and reduce the adverse impact of exchange rate fluctuations on the company's cost control and operating performance, under the condition of ensuring the needs of daily working capital, The company and its subsidiaries will carry out foreign exchange hedging business. This investment will not affect the development of the company's main business, and the fund use arrangement of the company and its subsidiaries is reasonable. According to relevant accounting standards, this investment complies with relevant provisions on hedging.
2. Investment amount: according to the company's asset scale and daily business needs, the company and its subsidiaries plan to carry out foreign exchange hedging business. The transaction amount (including the relevant amount of reinvestment of the income of the above investment) at any point in the quota service life shall not exceed 200 million people's currency, which can be converted into equivalent foreign currency, and can be recycled within the validity period.
3. Investment method: the foreign exchange hedging business of the company and its subsidiaries is limited to the foreign currency in which the actual business occurs. The company and its subsidiaries conduct foreign exchange hedging business, including forward business, swap business (currency swap, interest rate swap), swap business (currency swap, interest rate swap), option business (foreign exchange option, interest rate option) and the combination of the above businesses.
Combined with daily business and investment and financing needs, the products to be developed by the company and its subsidiaries are mainly foreign exchange hedging products, which have a low risk level.
4. Investment period: within 12 months from the date of deliberation and approval at the 16th meeting of the Fourth Board of directors of the company. 5. Source of funds: the company and its subsidiaries use a certain proportion of bank credit line or self owned funds as margin, which does not involve raised funds.
2、 The necessity and feasibility of the company's foreign exchange hedging business
The company and its subsidiaries carry out foreign exchange hedging business in order to make full use of foreign exchange hedging tools to reduce or avoid exchange rate risks caused by exchange rate fluctuations, reduce exchange losses and control operational risks.
The company has formulated the management system of foreign exchange hedging business, which scientifically stipulates the operation specifications, approval authority, internal operation process, letter Phi isolation measures and internal risk management of foreign exchange hedging business, and is equipped with special personnel. The targeted risk control measures taken by the company are practical and feasible, and it is feasible to carry out foreign exchange hedging business.
At the same time, the company stipulates that foreign exchange hedging transactions must be based on the company's foreign exchange revenue and expenditure forecast, and the delivery period of foreign exchange hedging business must match the actual execution period of the company's business.
By carrying out foreign exchange hedging, the company and its subsidiaries can avoid the risk of foreign exchange market to a certain extent, prevent the adverse impact of large exchange rate fluctuations on the company, improve the use efficiency of foreign exchange funds and enhance financial stability.
3、 Risk analysis of foreign exchange hedging business
Foreign exchange hedging business can reduce the impact of exchange rate fluctuations on the company in case of significant exchange rate fluctuations. The company and its subsidiaries conduct foreign exchange hedging business in accordance with the principles of legality, prudence, safety and effectiveness, and do not conduct foreign exchange transactions for the purpose of speculation. All foreign exchange hedging businesses of the company and its subsidiaries are aimed at avoiding and preventing exchange rate risks, based on normal production and operation, matched with the collection and payment time under the background of normal and reasonable business, and will not have a significant adverse impact on the liquidity of the company.
At the same time, foreign exchange hedging business will also have certain risks:
1. Market risk: the difference between the exchange rate and interest rate of foreign exchange derivatives trading contract and the actual exchange rate and interest rate on the maturity date will produce trading profits and losses; During the duration of foreign exchange derivatives, revaluation gains and losses will occur in each accounting period, and the cumulative value of revaluation gains and losses to the maturity date is equal to transaction gains and losses. The foreign exchange derivatives transactions of the company and its subsidiaries will follow the hedging principle and will not engage in speculative arbitrage transactions.
2. Liquidity risk: unreasonable purchase arrangements of foreign exchange derivatives may lead to liquidity risk of the company's funds. Based on the company's foreign exchange assets and liabilities, foreign exchange derivatives are matched with the actual foreign exchange revenue and expenditure. Timely selection of appropriate foreign exchange derivatives and appropriate selection of net delivery of derivative commodities can ensure that there are sufficient funds for clearing at the time of delivery, so as to reduce the demand for cash flow on the maturity date.
3. Performance risk: inappropriate counterparty selection may lead to the performance risk of the company's purchase of foreign exchange derivatives. The counterparties of foreign exchange derivatives carried out by the company and its subsidiaries are financial institutions with good credit and have established long-term business transactions with the company and its subsidiaries, with low performance risk.
4. Other risks: due to the change of relevant laws and regulations or the counterparty's violation of the terms of the contract, the contract may not be executed normally and bring losses to the company.
4、 Risk control measures of the company's foreign exchange hedging business
1. The varieties of foreign exchange derivatives transactions carried out by the company and its subsidiaries are foreign exchange derivatives closely related to the basic business, and these foreign exchange derivatives match with the basic business in terms of variety, scale, direction and term, so as to follow the prudent and prudent risk management principles of the company and its subsidiaries.
2. The company and its subsidiaries are only allowed to conduct transactions with financial institutions approved by the State Administration of foreign exchange and the people's Bank of China and qualified for foreign exchange derivatives trading business, and shall not conduct transactions with other organizations or individuals other than the above-mentioned financial institutions.
3. The company has established the management system of foreign exchange hedging business, and made clear provisions on the operation principles, staffing, approval authority, business process, information isolation, risk management and other aspects of the corresponding business (the subsidiary shall refer to the management system of foreign exchange hedging business of the company when carrying out foreign exchange hedging related business).
5、 Impact of foreign exchange hedging business on the company
The company and its subsidiaries carry out foreign exchange hedging business to avoid and prevent the risk of exchange rate fluctuation, which is in line with the interests of the company and does not damage the interests of the company and all shareholders, especially small and medium-sized shareholders.
The company conducts corresponding accounting and disclosure of foreign exchange hedging business in accordance with 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, accounting standards for Business Enterprises No. 37 - presentation of financial instruments and accounting standards for business Enterprises No. 39 - fair value measurement issued by the Ministry of finance.
6、 Feasibility analysis conclusion of the company's foreign exchange hedging business
The company and its subsidiaries carry out foreign exchange hedging business in order to make full use of foreign exchange hedging tools to reduce or avoid exchange rate risks caused by exchange rate fluctuations, reduce exchange losses and control business risks, which is of sufficient necessity. The company has formulated the management system of foreign exchange hedging business in accordance with the requirements of relevant laws and regulations. By strengthening internal control and implementing risk prevention measures, the company has formulated specific operating procedures for the company and its subsidiaries to engage in foreign exchange hedging business. The company and its subsidiaries carry out foreign exchange hedging business based on specific operating business, It is necessary and feasible to carry out under the premise of ensuring normal production and operation.
Yingtong Telecommunication Co.Ltd(002861) board of directors March 11, 2022
