Soochow Securities Co.Ltd(601555)
About Jiangsu Transimage Technology Co.Ltd(002866)
Verification opinions on carrying out foreign exchange hedging business
Soochow Securities Co.Ltd(601555) joint stock company (hereinafter referred to as " Soochow Securities Co.Ltd(601555) " or "sponsor") as the sponsor of non-public offering of Jiangsu Transimage Technology Co.Ltd(002866) (hereinafter referred to as " Jiangsu Transimage Technology Co.Ltd(002866) " or "company") in 2019, in accordance with the administrative measures for the sponsor business of securities issuance and listing, the self discipline supervision guidelines for listed companies of Shenzhen Stock Exchange No. 13 - sponsor business, and the stock listing rules of Shenzhen Stock Exchange In accordance with the requirements of relevant laws, regulations and normative documents such as the guidelines for self regulatory supervision of listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board, the matters of Jiangsu Transimage Technology Co.Ltd(002866) carrying out foreign exchange hedging business have been verified. The details are as follows:
1、 Overview of foreign exchange hedging business
(I) purpose and business type of foreign exchange hedging business
With the continuous development of the company's business, the scale of foreign exchange revenue and expenditure continues to grow. Based on the increased volatility of the foreign exchange market, in order to effectively prevent the impact of foreign currency 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.
(II) capital scale
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 on a rolling basis within the above limit. (III) authorization and term
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.
(IV) source of funds
The company's foreign exchange hedging business is funded from its own funds and does not involve raised funds.
(V) 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.
2、 Review procedure
On March 17, 2022, the company held the 12th meeting of the third board of directors and the 10th meeting of the third board of supervisors, deliberated and adopted the proposal on the company's foreign exchange hedging business, and agreed that the company and its subsidiaries should choose the opportunity to carry out foreign exchange hedging business, with a scale not exceeding US $500 million (or equivalent foreign currency), which is valid for 12 months from the date of deliberation and approval of the company's 2021 annual general meeting of shareholders, Within the above-mentioned period and amount, the funds can be used on a rolling basis, and the independent directors expressed their consent to the above matters. The above proposals need to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation.
3、 And investment risk control measures
(I) investment risk analysis
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.
(II) measures to be taken against investment risks
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 derivatives transactions including 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. When carrying out foreign exchange hedging business, it 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.
4、 Impact on the company
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.
5、 Accounting policies and accounting principles for foreign exchange hedging business
According to the 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 other relevant provisions and guidelines, the company conducts corresponding accounting and disclosure of foreign exchange hedging business.
6、 Verification opinions of the recommendation institution
After verification, the sponsor Soochow Securities Co.Ltd(601555) believes that the company's foreign exchange hedging business meets the actual business needs of the company, is conducive to avoiding the risks of the foreign exchange market, preventing the adverse impact of large exchange rate fluctuations on the company, improving the use efficiency of foreign exchange funds and reasonably reducing financial expenses.
The company has formulated the foreign exchange hedging business management system and necessary risk control measures in accordance with relevant laws and regulations. The matter has been deliberated and approved by the board of directors and the board of supervisors of the company, and the independent directors have issued independent opinions with explicit consent. The matter still needs to be submitted to the general meeting of shareholders of the company for deliberation, and necessary legal procedures have been performed.
To sum up, the sponsor has no objection to the matters related to the company's foreign exchange hedging business.
(there is no text on this page, which is the signature page of Soochow Securities Co.Ltd(601555) verification opinions on Jiangsu Transimage Technology Co.Ltd(002866) carrying out foreign exchange hedging business)
Sponsor representative:
Wu Min Cai Cheng
Soochow Securities Co.Ltd(601555) mm / DD / yyyy
