Jiangsu Transimage Technology Co.Ltd(002866)
Feasibility analysis report on carrying out foreign exchange hedging business
1、 Purpose of foreign exchange hedging business
Jiangsu Transimage Technology Co.Ltd(002866) (hereinafter referred to as "the company") is mainly engaged in the design, production and sales of notebook computer touch module, keyboard mechanism, etc. with the continuous development of the company's business, the scale of foreign exchange revenue and expenditure continues to grow. Based on the increase of foreign exchange market volatility, in order to effectively prevent the impact of foreign exchange rate fluctuations on the company's operating performance. The company and its subsidiaries intend to carry out foreign exchange hedging business with banks and other financial institutions, including but not limited to forward foreign exchange settlement and sales, foreign exchange swaps, foreign exchange swaps, foreign exchange options and other foreign exchange derivatives, and actively deal with the risk of foreign exchange rate fluctuations.
2、 Basic information of hedging business
1. It mainly involves currency and business types
The foreign exchange hedging business to be carried out by the company is limited to the main settlement currency used in the business with the company, and the main foreign currency is US dollars. The foreign exchange hedging business to be carried out by the company mainly includes forward settlement and sales of foreign exchange, foreign exchange swap, foreign exchange swap, foreign exchange option business and other foreign exchange derivatives. 2. Business quota, scale and source of investment
According to the asset scale and business demand, the scale of foreign exchange hedging business proposed by the company and its subsidiaries shall not exceed US $500 million (or equivalent in other foreign currencies), and the funds can be used in rolling within the above limit. The company's foreign exchange hedging business is funded from its own funds and does not involve raised funds.
3. Authorization and duration
The validity period of the foreign exchange hedging business quota proposed by the company and its subsidiaries shall be valid within 12 months from the date of deliberation and approval by the company's 2021 annual general meeting of shareholders. At the same time, the board of directors of the company requested the general meeting of shareholders to authorize the management of the company to implement the above foreign exchange hedging business within the above limit.
4. Counterparty
The company and its subsidiaries are limited to trading with financial institutions approved by the State Administration of foreign exchange and the people's Bank of China and qualified for foreign exchange hedging business. 3、 Necessity and feasibility analysis of foreign exchange hedging business
The company's import and export business has formed a certain amount of foreign exchange revenue and expenditure. In recent years, affected by international political and economic uncertainties, the foreign exchange market fluctuates frequently, and the exchange rate loss has a certain potential impact on the company's operating performance. In order to prevent foreign exchange rate risk, it is necessary for the company to appropriately carry out foreign exchange hedging business according to specific conditions.
The foreign exchange hedging business carried out by the company is closely related to the company's business. It is carried out based on the company's foreign exchange assets, liabilities and foreign exchange revenue and expenditure business. It makes full use of foreign exchange hedging tools to reduce or avoid the exchange rate risk caused by exchange rate fluctuation, reduce exchange loss and control operational risk, better avoid and prevent the risk of foreign exchange rate fluctuation faced by the company and enhance financial stability.
4、 Risk analysis of foreign exchange hedging business
The company's foreign exchange hedging business follows the principle of prudence and does not conduct foreign exchange transactions for the purpose of speculation. All foreign exchange hedging business is based on normal production and operation, relying on specific business operations and aiming at avoiding and preventing exchange rate risks. However, there are certain risks in foreign exchange hedging business, mainly including:
1. Exchange rate fluctuation risk
In case of significant deviation between the trend of foreign exchange rate and the judgment of the company, the cost of the company's foreign exchange hedging business may exceed the expectation, resulting in the loss of the company.
2. Internal control risk
The foreign exchange hedging business is highly professional and complex, which may cause losses in the process of handling foreign exchange hedging business due to staff operation errors, faults and other reasons.
3. Transaction default risk
If the foreign exchange hedging counterparty defaults and fails to pay the hedging profit of the company as agreed, so it is unable to hedge the actual exchange loss of the company, which will cause the loss of the company.
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.
5、 Risk control measures to be taken by the company
1. The company adheres to the principles of safety, soundness, moderation and rationality. All foreign exchange hedging businesses need a normal and reasonable business background. Foreign exchange hedging business aims at hedging and eliminates speculative behavior.
2. In accordance with the relevant provisions of the Listing Rules of Shenzhen Stock Exchange and in combination with the actual situation of the company, the company has formulated the management system of foreign exchange hedging business, which clearly stipulates the approval authority, internal operation process, internal risk management, information disclosure and other aspects of the company's foreign exchange hedging business.
3. In order to control the risk of sharp fluctuation of exchange rate, the company will strengthen the research and analysis of exchange rate, pay real-time attention to the changes in the international and Chinese market environment, timely adjust the operation and business operation strategies, and avoid exchange losses to the greatest extent. 4. The Finance Department of the company is responsible for the unified management of the company's foreign exchange hedging business, and will carry out business operations in strict accordance with the provisions of the foreign exchange hedging business management system to effectively ensure the implementation of the system. The specific development of foreign exchange hedging business must be based on the careful prediction of the company's Overseas Collection and payment of foreign exchange and the amount of foreign currency borrowings. The delivery date of foreign exchange hedging business must match the company's predicted foreign currency collection, borrowing period or foreign currency payment time as much as possible.
5. The audit department shall regularly supervise and inspect the foreign exchange hedging business, review the actual operation, capital use and profit and loss of the foreign exchange hedging business every quarter, and report the review to the audit committee of the board of directors.
6. In order to control the risk of transaction default, the company conducts foreign exchange hedging business with large banks and other financial institutions with relevant business operation qualifications to ensure the legitimacy of the company's foreign exchange hedging business.
6、 Accounting policies and accounting principles
The company conducts corresponding accounting treatment and disclosure of foreign exchange hedging business in accordance with relevant provisions and guidelines such as accounting standards for business enterprises Article 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.
7、 Feasibility analysis conclusion of the company's foreign exchange hedging business
The company carries out foreign exchange hedging business on the premise of daily business needs and preventing exchange rate risk, which is conducive to reducing the expected risk caused by large changes in exchange rate, preventing the risk of exchange rate fluctuation, reducing the impact of exchange rate fluctuation on the company's profits, reducing exchange losses and reducing financial expenses. The company has formulated the management system of foreign exchange hedging business and improved the relevant internal control system. The targeted risk control measures taken by the company are practical and feasible, and it is feasible to carry out foreign exchange hedging business. By carrying out foreign exchange hedging business, the company can avoid the fluctuation risk of foreign exchange market to a certain extent, realize asset hedging for the purpose of avoiding risk and enhance financial stability. Therefore, it is necessary and feasible for the company to carry out foreign exchange hedging business Jiangsu Transimage Technology Co.Ltd(002866) March 18, 2022
