Securities code: Shenzhen Sinovatio Technology Co.Ltd(002912) securities abbreviation: Shenzhen Sinovatio Technology Co.Ltd(002912) Announcement No.: 2022018 Shenzhen Sinovatio Technology Co.Ltd(002912)
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.
Shenzhen Sinovatio Technology Co.Ltd(002912) (hereinafter referred to as "the company" or "the company") deliberated and adopted the proposal on carrying out foreign exchange hedging business at the fifth meeting of the third board of directors and the fourth meeting of the third board of supervisors held on March 15, 2022, In order to make full use of foreign exchange hedging tools, reduce the uncertain impact of exchange rate fluctuations on the operating performance of the company and its wholly-owned subsidiaries, reduce exchange losses, control operating risks, improve the use efficiency of foreign exchange funds and reasonably reduce financial expenses, It is agreed that the company and its wholly-owned subsidiaries shall use the total amount of no more than US $50 million to carry out foreign exchange hedging business, and authorize the general manager of the company to exercise the decision-making power of this business, and the relevant departments shall be responsible for specific matters. The above business limit and authorization period shall be effective within 12 months from the date of approval of this board of directors. In accordance with the relevant laws and regulations such as the Shenzhen Stock Exchange Stock Listing Rules (revised in 2022), the Shenzhen Stock Exchange self regulatory guidelines for listed companies No. 1 - standardized operation of listed companies on the main board and the articles of association, the foreign exchange hedging business is implemented after being deliberated and approved by the board of directors and does not need to be submitted to the general meeting of shareholders of the company for deliberation. The relevant matters are hereby announced as follows:
1、 Basic information of foreign exchange hedging business
(I) purpose of foreign exchange hedging business
In view of the current two-way fluctuation of RMB exchange rate and the financial and economic environment of interest rate marketization, in order to prevent and control the risk of foreign exchange rate fluctuation, reduce its uncertain impact on the operating performance of the company and its wholly-owned subsidiaries, improve the use efficiency of foreign exchange funds of the company and its wholly-owned subsidiaries and reasonably reduce financial expenses, The company and its wholly-owned subsidiaries plan to carry out foreign exchange hedging business related to daily operation according to the actual business development needs.
This investment will not affect the development of the main business of the company and its wholly-owned subsidiaries, and the fund use arrangement of the company and its wholly-owned subsidiaries is reasonable.
(II) foreign exchange hedging business
1. Currencies and business types involved in foreign exchange hedging business
The company and its wholly-owned subsidiaries intend to carry out foreign exchange hedging business, and the currencies involved are limited to the main settlement currencies used by the company and its wholly-owned subsidiaries for production and operation, such as US dollar, euro, etc. Foreign exchange hedging, forward swap and other foreign exchange derivative businesses of wholly-owned subsidiaries, but not limited to foreign exchange hedging, forward swap and other foreign exchange derivatives. The foreign exchange hedging business to be carried out by the company and its wholly-owned subsidiaries aims at preventing and controlling foreign exchange rate or interest rate risk, does not carry out foreign exchange and derivatives transactions for the purpose of speculation, and matches with the basic business of the company and its wholly-owned subsidiaries in terms of type, scale, direction and term, so as to comply with the prudent Sound risk management principles.
2. Trading quota of foreign exchange hedging business
According to the asset scale and daily business needs of the company and its wholly-owned subsidiaries, the company and its wholly-owned subsidiaries plan to carry out foreign exchange hedging business. The total transaction amount at any time point within the service life of the quota shall not exceed the equivalent US $50 million, which can be recycled within the validity period.
3. Service life of foreign exchange hedging limit
The validity period of the quota is within 12 months from the date of deliberation and approval by the board of directors of the company.
4. Capital source of foreign exchange hedging business
The source of funds invested by the company and its wholly-owned subsidiaries in carrying out foreign exchange hedging business is its own funds and funds raised by other means permitted by laws and regulations, which does not involve raised funds.
5. Counterparty of foreign exchange hedging business
Banks and other financial institutions with foreign exchange derivatives trading business qualification.
6. Authorization of foreign exchange hedging business
The board of directors of the company authorizes the general manager of the company to exercise the decision-making power of the business within the limit and sign the relevant time limit, which is valid within 12 months from the date of deliberation and approval by the board of directors of the company.
7. Accounting policies and accounting principles to be adopted
The company and its wholly-owned subsidiaries will conduct corresponding accounting and disclosure of foreign exchange hedging business in accordance with relevant provisions and guidelines such as 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.
2、 Feasibility analysis of foreign exchange hedging business
The company and its wholly-owned subsidiaries carry out foreign exchange hedging business in order to make full use of foreign exchange hedging tools to reduce the uncertain impact of exchange rate fluctuations on the operating performance of the company and its wholly-owned subsidiaries, reduce exchange losses, control operating risks, improve the use efficiency of foreign exchange funds and reasonably reduce financial expenses.
The company has formulated the management system of foreign exchange hedging business. By improving relevant internal control systems and implementing targeted risk control measures, the company has formulated specific operating procedures for the company to engage in foreign exchange hedging business. It is feasible for the company and its wholly-owned subsidiaries to carry out foreign exchange hedging business.
3、 Analysis of foreign exchange hedging risk
Foreign exchange hedging transactions can effectively reduce the uncertain impact of foreign exchange rate fluctuations on the operating performance of the company and its wholly-owned subsidiaries, but there will also be some risks:
1. Exchange rate fluctuation risk: in the case of large changes in the foreign exchange rate, the forward exchange rate quotation of the bank may deviate from the exchange rate of the company and its wholly-owned subsidiaries at the time of actual receipt and payment, resulting in exchange losses, or the cost incurred by the company and its wholly-owned subsidiaries in locking the exchange rate may exceed the income.
2. Forecast risk: the company and its wholly-owned subsidiaries carry out rolling forecast of foreign exchange receipt and payment according to sales orders and purchase orders. There is a delivery risk of operated foreign exchange hedging due to the deviation between the actual amount and the forecast.
3. Counterparty default risk: the counterparties that the company and its wholly-owned subsidiaries intend to carry out foreign exchange hedging are financial risks such as banks with good credit and have established business transactions with the company and its wholly-owned subsidiaries.
4. Other risks: foreign exchange hedging business is highly professional and complex, which may lead to transaction losses or loss of trading opportunities due to imperfect internal control system or operators' failure to fully and accurately understand the contract terms and product information of foreign exchange hedging business.
4、 Risk control measures
1. The company and its wholly-owned subsidiaries clarify the trading principles of foreign exchange hedging products. All foreign exchange hedging businesses are based on normal business activities, for the purpose of preventing and controlling foreign exchange rate risks, and do not engage in foreign exchange and derivatives transactions for the purpose of speculation.
2. The company and its wholly-owned subsidiaries will strengthen the research and analysis of the exchange rate, pay real-time attention to the changes in the international market environment and adjust the business decisions in time. At the same time, the board of directors of the company authorizes the management of the company and its wholly-owned subsidiaries to make decisions on the specific implementation of the business within the limit.
3. In order to control the risk of delayed delivery of foreign exchange hedging, the company and its wholly-owned subsidiaries will strengthen the management of foreign currency funds, attach great importance to the management of foreign currency accounts receivable, and ensure that the locked amount and time of foreign exchange hedging business match the amount and time of foreign currency capital return in principle.
4. When carrying out foreign exchange hedging business, the company and its wholly-owned subsidiaries will carefully select banks and other financial institutions with legal qualifications, strong strength and good credit for cooperation, so as to ensure the legitimacy of the management of foreign exchange derivatives transactions of the company and its wholly-owned subsidiaries.
5. The company has established the management system of foreign exchange hedging business, and clearly stipulated the operation principles, approval authority, business process, risk management and other aspects of the corresponding business. The company has been equipped with professionals in business operation and risk control to be responsible for the specific work of the company, such as exchange rate risk management, market analysis, product research and overall management policy suggestions of the company.
6. The internal audit department of the company is responsible for auditing and supervising the actual operation, capital use and profit and loss of foreign exchange hedging business, and evaluating the possible risks.
7. The independent directors and the board of supervisors of the company have the right to supervise and inspect the use of funds, and can hire professional institutions to audit when necessary.
5、 Opinions of independent directors
The company and its wholly-owned subsidiaries have carried out relevant approval procedures for foreign exchange hedging business, comply with relevant national laws, regulations and the articles of association, and have established internal control system and effective risk control measures for foreign exchange hedging business in accordance with the requirements of relevant laws and regulations. On the premise of complying with national laws and regulations and ensuring that the normal production and operation of the company and its wholly-owned subsidiaries are not affected, the company and its wholly-owned subsidiaries timely carry out foreign exchange hedging business, which is conducive to preventing the risk of interest rate and exchange rate fluctuations, reducing the impact of market fluctuations on the operation and profit and loss of the company and its wholly-owned subsidiaries, and in line with the interests of the company and all shareholders, There is no situation that damages the interests of the company and all shareholders, especially minority shareholders.
Therefore, all independent directors agree that the company and its wholly-owned subsidiaries carry out foreign exchange hedging business according to the needs of business development on the premise of ensuring that it does not affect the capital demand and capital safety of normal operation.
6、 Opinions of the board of supervisors
The board of supervisors of the company believes that the development of foreign exchange hedging business by the company and its wholly-owned subsidiaries is conducive to meeting the needs of normal operation and business, further improving the ability to deal with foreign exchange fluctuation risk, better avoiding and preventing exchange rate fluctuation risk and enhancing financial stability. Therefore, it is agreed that the company and its wholly-owned subsidiaries shall use the total amount of no more than US $50 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 business development.
7、 Documents for future reference
1. Resolutions of the 5th meeting of the 3rd board of directors;
2. Resolutions of the fourth meeting of the third board of supervisors;
3. Independent opinions of independent directors on matters related to the fifth meeting of the third board of directors.
It is hereby announced.
Shenzhen Sinovatio Technology Co.Ltd(002912) board of directors
March 16, 2022
