Securities code: Fspg Hi-Tech Co.Ltd(000973) securities abbreviation: Fspg Hi-Tech Co.Ltd(000973) Announcement No.: 202211
Announcement on the company's expected foreign exchange trading business in 2022
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.
Important content tips:
1. Type of investment: foreign exchange trading business handled in financial institutions to avoid and prevent exchange rate or interest rate risks, including forward settlement and sales of foreign exchange, foreign exchange swap, foreign exchange option and interest rate swap.
2. Investment amount: the transaction balance at any time point within the specified period shall not exceed the equivalent of RMB 400 million (including this amount).
3. Risk warning:
(1) Market risk: when the trend of exchange rate or interest rate deviates greatly from the company's expectation, the cost incurred by the company after locking the exchange rate or interest rate cost may exceed the cost incurred when it is not locked, resulting in potential losses.
(2) Internal control risk: foreign exchange trading business is highly professional and complex, which may cause risks due to imperfect internal control mechanism.
(3) Default risk of customers or suppliers: the overdue accounts receivable of customers, the failure to recover the payment within the predicted collection period, or the delay of payment to suppliers will affect the cash flow of the company, which may make the actual cash flow unable to fully match the period or amount of foreign exchange trading business that has been operated. (4) Collection and payment forecast risk: the marketing department of the company usually forecasts the payment and collection according to the purchase order, customer order and expected order. However, in the actual implementation process, the supplier or customer may adjust their own order and forecast, resulting in inaccurate collection and payment forecast of the company, resulting in the risk of delayed delivery of the operated foreign exchange trading business.
(5) Legal risk: due to the change of relevant laws or the violation of relevant legal systems by the counterparty, the contract may not be executed normally and bring losses to the company.
Please pay attention to investment risks.
1、 Overview
(I) purpose of foreign exchange transactions
In 2022, the impact of international political factors on the foreign exchange market gradually strengthened, the covid-19 epidemic continued, and the global economic trend was uncertain, which continued to aggravate the fluctuation of foreign currency exchange rate. In order to meet the normal production and operation needs of Fspg Hi-Tech Co.Ltd(000973) (hereinafter referred to as "the company") and its holding subsidiaries, strengthen internal control, prevent and avoid operational risks caused by exchange rate risks, and reduce exchange losses, the company and some holding subsidiaries plan to carry out foreign exchange transactions in 2022.
(II) foreign exchange transaction amount
Based on careful analysis of the company's cross-border financing, goods import and export, capital turnover period and other aspects, it is expected that the transaction balance at any time point will not exceed the equivalent of RMB 40 million (including this amount), which will be recycled within 12 months from the date of deliberation and approval by the board of directors.
(III) foreign exchange transaction mode
According to the import and export business of the company and its holding subsidiaries, the foreign exchange transaction business handled in financial institutions to avoid and prevent exchange rate or interest rate risk, including forward settlement and sales of foreign exchange, foreign exchange swap transaction, foreign exchange option transaction and interest rate swap transaction. The specific contents are as follows:
1. Forward foreign exchange settlement and sales: the company and its holding subsidiaries sign a forward foreign exchange settlement and sales agreement with the bank to agree on the foreign exchange currency, amount, period and exchange rate of future foreign exchange settlement or sales, and handle the foreign exchange settlement and sales business according to the currency, amount and exchange rate specified in the agreement when due.
2. Foreign exchange swap transaction: the company and its holding subsidiaries agree with financial institutions to exchange a certain amount of one currency for another, and conduct reverse currency trading of the same amount at the agreed price on the agreed date in the future.
3. Foreign exchange option transaction: a foreign exchange transaction in which the company and its holding subsidiaries pay a certain option fee to financial institutions and obtain the option to buy and sell a certain amount of foreign exchange at the agreed price on the agreed date in the future.
4. Interest rate swap: a financial contract in which the company, its holding subsidiaries and financial institutions agree to calculate interest and exchange interest according to the agreed principal (nominal principal) and interest rate within a certain period in the future. The product is usually represented by the exchange between fixed interest rate and floating interest rate.
(IV) term of foreign exchange transactions
Valid within 12 months from the date of deliberation and approval by the board of directors.
(V) source of funds
The funds come from the self owned funds of the company and its holding subsidiaries.
2、 Review procedure
On March 24, 2022, the 21st Meeting of the 10th board of directors of the company deliberated and adopted the proposal on the company's expected foreign exchange trading business in 2022. This matter is within the authority of the board of directors of the company and does not need to be submitted to the general meeting of shareholders for deliberation. This item does not involve related party transactions.
3、 Risk analysis and risk control measures of foreign exchange transactions
(I) risk analysis
1. Market risk: in case of significant deviation between the trend of exchange rate or interest rate and the company's expectation, the cost paid by the company after locking the cost of exchange rate or interest rate may exceed the cost paid when it is not locked, resulting in potential losses.
2. Internal control risk: foreign exchange trading business is highly professional and complex, which may cause risks due to imperfect internal control mechanism.
3. Default risk of customers or suppliers: the overdue accounts receivable of customers, the failure to recover the payment within the predicted collection period, or the delay of payment to suppliers will affect the cash flow of the company, which may make the actual cash flow unable to fully match the period or amount of foreign exchange transactions that have been operated. 4. Forecast risk of collection and payment: the marketing department of the company usually forecasts the payment and collection according to the purchase order, customer order and expected order, but in the actual implementation process, the supplier or customer may adjust their own order and forecast, resulting in inaccurate forecast of collection and payment of the company, resulting in the risk of delayed delivery of the operated foreign exchange trading business.
5. Legal risk: the change of relevant laws or the violation of relevant legal systems by the counterparty may cause the contract to be unable to be executed normally and bring losses to the company.
(II) risk control measures
1. The company formulates the internal control management measures for foreign exchange derivatives business, which stipulates that the company does not conduct foreign exchange trading business for the purpose of speculation, and all foreign exchange trading business is based on the company's import and export business or foreign currency liabilities, so as to avoid and prevent exchange rate or interest rate risks, so as to preserve the value of the company's assets. The measures have made clear provisions on the company's business operation principles, approval authority, audit process, responsible departments and persons, information isolation measures, internal risk reporting system and risk handling procedures, which meet the relevant requirements of regulatory authorities, meet the needs of actual operation, and risk control measures are practical and effective.
2. The amount of foreign exchange transactions of subsidiaries in recent years matches the expected amount of foreign exchange transactions of subsidiaries in 2022. The company formulated risk prevention measures, strengthened the risk control of accounts receivable, and strictly controlled overdue accounts receivable and bad debts.
3. Strictly control the capital scale of foreign exchange trading business, and the amount and term of foreign exchange trading contracts must match the import and export business or foreign currency liabilities of the company and its holding subsidiaries.
The operation instructions shall be issued in strict accordance with the authority specified in the measures for the administration of internal control of foreign exchange derivatives business of the company, and the operation can be carried out only after being approved in accordance with the provisions.
4. The company conducts foreign exchange transactions with legally qualified financial institutions, closely tracks laws and regulations in relevant fields, and avoids possible legal risks.
4、 Impact of foreign exchange transactions on the company
At present, the impact of international political factors on the foreign exchange market is gradually strengthened, the covid-19 epidemic continues, and the global economic trend is uncertain, which continues to aggravate the fluctuation of foreign currency exchange rate. Affected by the normalization of two-way fluctuation of RMB exchange rate, the company will strengthen the establishment of the concept of exchange rate risk neutrality, reasonably avoid the operational risk caused by exchange rate risk and reduce exchange loss by using foreign exchange derivatives to avoid exchange rate risk.
In addition, the company will borrow overseas low-cost funds to repay due debts or supplement working capital according to the financing cost in domestic and foreign markets; In order to avoid the risk of foreign currency exchange rate fluctuation, the company plans to carry out foreign exchange swap, interest rate swap, forward foreign exchange settlement and sales and other operations to lock foreign currency loans.
If there is no change in the fair value of foreign exchange settlement business on the due date, the company can enter the scope of foreign exchange settlement business, that is, if there is no change in the fair value of foreign exchange settlement business on the due date; If there are certain changes in fair value in foreign exchange swap transactions and foreign exchange option transactions, their value will be calculated according to the corresponding fair value change formula.
According to the relevant provisions and guidelines of the accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 24 - hedging and accounting standards for Business Enterprises No. 37 - presentation of financial instruments issued by the Ministry of finance, the company evaluates and accounts the fair value of foreign exchange transactions.
5、 Opinions of independent directors
In order to meet the normal production and operation needs of the company and its holding subsidiaries, strengthen internal control, prevent and avoid the operational risks caused by exchange rate risks and reduce exchange losses, the company plans to carry out foreign exchange trading business in 2022, which can lock the relevant foreign exchange purchase costs in case of exchange rate fluctuations to achieve the purpose of risk control. The company has formulated the management measures for internal control of foreign exchange derivatives business to standardize the operation of the company's foreign exchange trading business, prevent and avoid the risks caused by exchange rate fluctuations in international settlement business, and strengthen the company's risk control. The board of directors of the company has fulfilled relevant approval procedures, and the voting procedures are legal and compliant. Agree to the proposal on the company's expected foreign exchange trading business in 2022.
6、 Documents for future reference
2. Opinions of independent directors 3 Measures for the administration of internal control of foreign exchange derivatives business 4 The contract and agreement on foreign exchange trading business are hereby announced.
Fspg Hi-Tech Co.Ltd(000973) board of directors
March 26, 2002
