Stock Code: Xinjiang Goldwind Science And Technology Co.Ltd(002202) stock abbreviation: Xinjiang Goldwind Science And Technology Co.Ltd(002202) Announcement No.: 2022009 Xinjiang Goldwind Science And Technology Co.Ltd(002202)
Announcement on the hedging business of the company and its subsidiaries
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.
On March 25, 2022, the 25th meeting of the seventh board of directors of Xinjiang Goldwind Science And Technology Co.Ltd(002202) (hereinafter referred to as “the company”) deliberated and approved the proposal on the company and its subsidiaries to carry out hedging business, and agreed that the company and its wholly-owned and holding subsidiaries (hereinafter referred to as “subsidiaries”) to carry out hedging business. The details are as follows:
1、 Overview
With the continuous development of the company’s overseas market and the continuous development and change of exchange rate and interest rate market, the exchange rate and interest rate risk of the company’s foreign currency settlement business and domestic and foreign financing business gradually increases. In order to avoid the adverse effects of exchange rate and interest rate fluctuations on the company’s production, operation and cost control, the company analyzed and predicted the foreign exchange and interest rate hedging business of the company and its subsidiaries according to the business cycle of foreign exchange related import and export business, international project revenue and expenditure and foreign currency capital demand, and followed the principle of prudent prediction, It is proposed to carry out exchange rate and interest rate hedging business from the date of the resolution of the company’s 2021 annual general meeting to the date of the resolution of the company’s 2022 annual general meeting.
2、 Funds to be invested in hedging business and transaction types
1. The company divides hedging business into exchange rate hedging and interest rate hedging. The types of exchange rate hedging transactions include but are not limited to the following scope: foreign exchange forward, foreign exchange option, foreign exchange swap, etc; Interest rate hedging transactions include but are not limited to the following scope: interest rate swap, interest rate swap, etc.
2. Amount of exchange rate hedging: the amount of new business shall not exceed US $2 billion (or other equivalent currencies), accounting for 35.87% of the company’s latest audited net assets.
3. Interest rate hedging limit: the amount of new business shall not exceed US $2 billion (or other equivalent currencies), accounting for 35.87% of the company’s latest audited net assets.
4. Source of funds: the company’s own funds, not involving the use of raised funds or bank credit funds.
5. Counterparties: the counterparties of the company’s hedging business are limited to banks with foreign exchange hedging business qualification approved by relevant government departments of the state.
6. Liquidity arrangement: the foreign exchange hedging transaction is based on the normal foreign exchange revenue and expenditure business, the interest rate hedging transaction is based on the actual loan, and the hedging amount and period are matched with the actual business needs.
This proposal will be submitted to the general meeting of shareholders of the company for deliberation.
3、 Business period
From the date of resolution of the company’s 2021 annual general meeting to the date of resolution of the company’s 2022 annual general meeting.
4、 Risk analysis
1. Price fluctuation risk: it may cause the market risk of loss due to the price change of financial derivatives caused by the market price fluctuation such as the underlying interest rate and exchange rate.
2. Liquidity risk: the risk that the company cannot complete the transaction due to insufficient capital liquidity.
3. Internal control risk: financial derivatives trading business is highly professional and complex, which may cause risks due to imperfect internal control mechanism.
4. Performance risk: there is a risk of default caused by failure to perform the contract when the contract expires.
5. Legal risk: due to changes in relevant laws or counterparties’ violation of relevant laws and regulations, the contract may not be executed normally and bring losses to the company.
5、 Risk control measures
1. For the risk of price fluctuation, the company will strengthen the research and analysis of exchange rate, interest rate risk exposure and relevant markets and policies, pay real-time attention to the changes of market environment, timely adjust business strategies and hedging schemes, and minimize the impact of exchange rate and interest rate changes on the company’s operating performance. At the same time, the company will strictly control the proportion of hedging amount in the total business amount to prevent excessive hedging.
2. For liquidity risk, the hedging business carried out by the company is based on the company’s foreign exchange revenue and expenditure budget and the withdrawal and repayment expectation of financing. The company’s Hedging Business matches the actual revenue and expenditure, and the business background is true. Therefore, it can ensure that there are sufficient funds for liquidation at the time of delivery, which has little impact on the company’s liquid assets.
3. For internal control risks, the company issued the foreign exchange hedging management system (which is also applicable to interest rate hedging business) and the overall plan for foreign exchange and interest rate risk management, and strictly followed the system. The company shall allocate full-time personnel with incompatible post responsibilities to engage in hedging business within the scope of authorization, and keep records of all hedging transactions. Establish a timely reporting system for abnormal conditions to avoid the occurrence of operational risks to the greatest extent.
4. For the performance risk, the company’s derivatives investment counterparties are banks with good credit and have established long-term business relations with the company, and there is basically no performance risk. At the same time, the company will match the amount and time of hedging business with foreign currency collection and payment or financing withdrawal and repayment in strict accordance with the collection and payment plan and financing plan under trade.
5. In view of legal risks, the company conducts hedging business and legally conducts trading operations in accordance with the provisions of relevant laws and regulations and relevant transaction management norms; Sign a legal agreement with the counterparty with accurate and clear terms to avoid possible legal disputes to the greatest extent. 6、 Impact of hedging business on the company
The hedging business carried out by the company is closely related to the company’s business, based on the company’s foreign exchange revenue and expenditure business, foreign exchange assets and liabilities and other real business background. The hedging business of the company and its subsidiaries will follow the principle of locking in risks without speculation and arbitrage transactions, which can further improve the company’s ability to deal with the risk of exchange rate and interest rate fluctuations, enhance the company’s financial stability, avoid affecting the development of the company’s main business and damaging the interests of the company and all shareholders, and reasonably reduce financial expenses.
The company will timely calculate and disclose the hedging business in accordance with the relevant provisions and guidelines of accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 24 – hedging, accounting standards for Business Enterprises No. 37 – presentation of financial instruments, etc.
7、 Opinions of independent directors
It is necessary and feasible for the company and its subsidiaries to carry out foreign exchange and interest rate hedging business, relying on specific business operations and for the purpose of avoiding and preventing exchange rate and interest rate risks, which is conducive to reducing the impact of exchange rate and interest rate fluctuations on the company. There is no damage to the interests of the company and all shareholders, especially small and medium-sized shareholders. The company has carried out relevant decision-making procedures for foreign exchange and interest rate hedging business, which is in line with the relevant provisions of laws and regulations and the articles of association. Therefore, we unanimously agree that the company and its subsidiaries carry out hedging business from the date of the resolution of the 2021 annual general meeting to the date of the resolution of the 2022 annual general meeting, and agree to submit the proposal to the company’s general meeting for deliberation.
It is hereby announced.
Xinjiang Goldwind Science And Technology Co.Ltd(002202) board of directors
March 25, 2022
