Securities code: Xiamen King Long Motor Group Co.Ltd(600686) securities abbreviation: Xiamen King Long Motor Group Co.Ltd(600686) No.: pro 2022012 Xiamen King Long Motor Group Co.Ltd(600686)
Announcement on forward foreign exchange transactions of the company in 2022
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 individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
As an automobile manufacturer with a large proportion of export business, the company's overseas sales business faces greater risk of exchange rate fluctuation. In order to reduce the impact of exchange rate fluctuations on the company, the company will continue to use forward foreign exchange financial instruments provided by financial institutions to avoid exchange rate risks in 2022, as follows:
1、 Forward foreign exchange transactions
The forward foreign exchange trading business of the company is to meet the needs of export business. It does not carry out foreign exchange transactions solely for profit, nor speculative and arbitrage trading operations. It is limited to the settlement of foreign currencies related to the company's export business. The delivery period of the business is matched with the actual execution period of the company's export business, For the forward foreign exchange trading business whose amount matches the predicted collection amount, the raised funds are not used for forward foreign exchange trading directly or indirectly.
The forward foreign exchange trading business is mainly the forward foreign exchange settlement and sales business, which stipulates the foreign exchange currency, amount, term and exchange rate of the future foreign exchange settlement, and the foreign exchange settlement or sales business handled according to the currency, amount and exchange rate agreed in the contract at the expiration, so as to lock in the current foreign exchange settlement cost. Some forward foreign exchange trading businesses have additional supporting options.
2、 Estimated forward foreign exchange transactions of the company in 2022
No.: estimated contract amount of the company in 2022 (10000 US dollars)
1 Xiamen Jinlong United Automobile Industry Co., Ltd. 2000000
2. Jinlong United Automobile Industry (Suzhou) Co., Ltd. 2700000
3 Xiamen Jinlong station wagon Co., Ltd. 2000000
Total 6700000
The board of directors authorizes the chairman to approve the appropriate adjustment of the forward foreign exchange trading quota of each subsidiary according to the actual situation under the condition that the total amount of forward foreign exchange trading in the year remains unchanged.
3、 Risk analysis of forward foreign exchange transactions
1. Exchange rate fluctuation risk: foreign exchange fluctuation is bidirectional. In the trend of forward exchange rate, the exchange rate locking price of forward foreign exchange transaction may be lower than the bookkeeping exchange rate of the company in the current period of foreign exchange collection, resulting in exchange loss of the company.
2. Internal control risk: forward foreign exchange transactions are highly professional and timely, which may cause risks due to imperfect internal control system.
3. Customer default risk: if the customer's accounts receivable are overdue and the payment cannot be recovered within the predicted collection period, it will cause the delay of forward foreign exchange settlement and delivery, resulting in the loss of the company.
4. Collection forecast risk: the company forecasts the collection according to the customer's order. In the actual implementation process, the customer may adjust his order and expectation, or the collection delay or even bad debt may be caused due to the change of the political environment in the customer's region, resulting in the risk of delayed delivery of forward foreign exchange settlement.
4、 Risk control measures taken by the company
1. The company requires each subsidiary to establish a forward foreign exchange transaction management team to supervise and manage forward foreign exchange transactions, and hire foreign exchange financial experts to provide advice as far as possible. When the exchange rate fluctuates violently and there are or may be major risks in the forward foreign exchange trading business, the forward foreign exchange trading management team shall hold a meeting in time to analyze and discuss the risk situation and Countermeasures to be taken, and immediately report the above situation to the company; 2. The Audit Department of each subsidiary will regularly and irregularly review the actual operation, capital use and profit and loss of forward foreign exchange trading business. The risk management department of the company will conduct special audit on the forward foreign exchange trading business of each subsidiary from time to time;
3. In order to prevent the delayed delivery of forward settlement and sales of foreign exchange, the company attaches great importance to the management of accounts receivable, actively collects accounts receivable, and purchases credit insurance for export loans, so as to reduce the risk of default caused by customers' Arrears of payment and avoid the overdue phenomenon of accounts receivable;
4. The company's forward foreign exchange trading business is based on the company's foreign currency collection and payment forecast. The foreign currency amount of the forward foreign exchange trading business contract does not exceed the amount of foreign exchange revenue and expenditure of import and export business, so as to control the possible risks faced by the company within an acceptable range.
5、 Approval procedures to be performed within the company
This matter has been deliberated and approved at the 12th meeting of the 10th board of directors of the company and needs to be submitted to the general meeting of shareholders of the company for deliberation.
It is hereby announced.
Xiamen King Long Motor Group Co.Ltd(600686) board of directors March 17, 2022
