Securities code: Guangdong Fuxin Technology Co.Ltd(688662) securities abbreviation: Guangdong Fuxin Technology Co.Ltd(688662) Announcement No.: 2022011 Guangdong Fuxin Technology Co.Ltd(688662)
Announcement on carrying out forward foreign exchange settlement and sales business 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 legal responsibility for the authenticity, accuracy and completeness of its contents.
Guangdong Fuxin Technology Co.Ltd(688662) (hereinafter referred to as "the company") held the second meeting of the Fourth Board of directors and the second meeting of the Fourth Board of supervisors on March 25, 2022, deliberated and adopted the proposal on carrying out the business of foreign exchange forward settlement and sales in 2022, and agreed that the company (including subsidiaries, the same below) should carry out the business of foreign exchange forward settlement and sales within 12 months from the date of deliberation and approval of the general meeting of shareholders, The amount of foreign exchange sold and settled in the future shall not exceed the equivalent amount of USD 50 million. The matter still needs to be considered by the general meeting of shareholders. The relevant information is hereby announced as follows:
1、 Purpose of carrying out forward foreign exchange settlement and sales business
In order to effectively avoid foreign exchange market risks, prevent the adverse impact of large exchange rate fluctuations on the company's operating performance, improve the efficiency of the use of foreign exchange funds and reasonably reduce financial expenses, the company plans to carry out foreign exchange forward settlement and sale business with banks in combination with the overseas sales scale in 2022.
The business of foreign exchange forward settlement and sales refers to the business of signing a foreign exchange forward settlement and sales contract with a bank, agreeing on the foreign exchange currency, amount, exchange rate and time limit for the settlement or sales of foreign exchange in the future, and then handling the settlement or sales of foreign exchange according to the currency, amount and exchange rate agreed in the foreign exchange forward settlement and sales contract.
2、 Varieties of foreign exchange forward settlement and sales
The forward foreign exchange settlement and sales business to be carried out by the company is limited to the settlement currency used in the company's production and operation.
3、 Business period and business scale
The board of directors of the company agrees to authorize the management of the company to carry out foreign exchange forward settlement and sales business and sign relevant contract documents within 12 months from the date of deliberation and approval of the general meeting of shareholders. The amount of foreign currency for forward settlement and sales of foreign exchange shall not exceed the equivalent of US $50 million (the funds within the limit can be used in a rolling manner). At the same time, the Finance Department of the company is authorized to handle specific matters within the above period and limit.
4、 Feasibility analysis of carrying out foreign exchange forward settlement and sales business
The company has overseas sales business, so when the exchange rate fluctuates greatly, the exchange gain or loss will have a great impact on the company's operating performance. The company's foreign exchange forward settlement and sales business with banks is considered from the perspective of locking the cost of foreign exchange settlement and sales, which can reduce the impact of exchange rate fluctuations on the company's production and operation, enable the company to maintain a relatively stable profit level, meet the needs of the company's future operation and development, have controllable risks and do not harm the interests of the company and shareholders, especially small and medium-sized shareholders.
5、 Risk of foreign exchange forward settlement and sale and risk control measures
(I) risk of foreign exchange forward settlement and sale
The company's foreign exchange forward settlement and sales business follows the principle of locking exchange rate risk and hedging, and does not engage in speculative and arbitrage transactions. Therefore, strict risk control will be carried out when signing foreign exchange forward settlement and sales contracts.
The operation of foreign exchange forward settlement and sales can reduce the impact of exchange rate fluctuations on the company's performance and enable the company to focus on production and operation. In case of large exchange rate fluctuations, the company can still maintain a stable profit level, but at the same time, there are certain risks in the operation of foreign exchange forward settlement and sales:
1. Exchange rate fluctuation risk: in the case of large changes in the exchange rate market, the bank's forward foreign exchange settlement and sales quotation may be lower than the company's quotation exchange rate to customers, so that the company cannot lock according to the exchange rate quoted to customers, resulting in exchange losses.
2. Internal control risk: forward foreign exchange settlement and sales transactions are highly professional and complex, which may cause risks due to the imperfect internal control system of the company.
3. Customer default risk: if the customer's accounts receivable are overdue and the loan cannot be recovered within the predicted collection period, it will cause the delayed delivery of forward foreign exchange settlement and sales, resulting in the company's exchange loss.
4. Collection forecast risk: the relevant business departments of the company will forecast the collection according to the customer's orders and expected orders, but in the actual implementation process, the customers may adjust their own orders and forecasts, resulting in inaccurate collection forecast of the company and the risk of delayed delivery of forward foreign exchange settlement and sales.
(II) risk control measures
In order to minimize the above risks in the forward foreign exchange settlement and sales business, the company will actively take relevant risk control measures:
1. The company has formulated the foreign exchange hedging business management system, which stipulates that the company's foreign exchange hedging business is based on normal production and operation, based on specific business operations, for the purpose of avoiding and preventing exchange rate risks, shall not affect the company's normal production and operation, and shall not carry out foreign exchange transactions for the purpose of speculation. The system makes clear provisions on the company's hedging limit, approval authority, internal audit process, responsible department and person, information isolation measures, internal risk report and risk handling procedures, which meet the relevant requirements of regulatory authorities and the needs of actual operation. The specified risk control measures are practical and effective.
2. In order to prevent the delayed delivery of forward foreign exchange settlement and sales, the company attaches great importance to the management of accounts receivable, actively collects accounts receivable, avoids the overdue phenomenon of accounts receivable and reduces the risk of customer default.
3. The company's forward foreign exchange settlement and sales transactions must be based on the company's export business income, and the foreign currency amount of the forward foreign exchange settlement and sales contract shall not exceed the prudent prediction of foreign currency receipt (payment).
6、 Opinions of the board of supervisors, independent directors and recommendation institutions
(I) opinions of independent directors
After deliberation, in combination with the export budget of 2022, the company plans to carry out foreign exchange forward settlement and sales business with banks in 2022, and estimates the cumulative amount of foreign exchange forward settlement and sales business, which is an effective measure to prevent foreign exchange market risks and improve the use efficiency of foreign exchange funds. The estimated pricing follows the principle of fair and just market, and there is no situation that damages the interests of the company and shareholders. Therefore, we unanimously agree to the contents of the proposal on carrying out forward foreign exchange settlement and sales business in 2022 and agree to submit the matter to the 2021 annual general meeting of shareholders of the company for deliberation.
(II) opinions of the board of supervisors
The board of supervisors of the company held the second meeting of the fourth session of the board of supervisors on March 25, 2022 and deliberated and adopted the proposal on carrying out forward foreign exchange settlement and sales business in 2022. The board of supervisors believes that the company's plan to carry out foreign exchange forward settlement and sales in 2022 is a positive measure to deal with the risk of foreign exchange fluctuations and ensure that the export business will not produce large uncontrollable exchange losses due to exchange rate changes, which is in line with the articles of association, the rules of procedure of the board of directors and the detailed rules for the management of financial derivatives (forward settlement and sales of foreign exchange) of the company. The review procedure of the company's proposed foreign exchange forward settlement and sales business complies with the provisions of relevant laws and regulations and the company's internal system, and there is no situation that damages the interests of the company and shareholders. Therefore, the board of supervisors of the company agreed to the contents of the proposal on carrying out forward foreign exchange settlement and sales business in 2022.
(III) opinions of the recommendation institution
The company's proposed foreign exchange forward settlement and sales business has been deliberated and approved at the second meeting of the Fourth Board of directors and the second meeting of the Fourth Board of supervisors. The independent directors of the company have expressed clear consent to the above matters. The proposal needs to be submitted to the general meeting of shareholders for deliberation, which complies with the provisions of relevant laws and regulations and has performed necessary legal procedures.
The company has formulated feasible risk response measures according to relevant regulations and actual conditions, and relevant risks can be effectively controlled. The company's foreign exchange forward settlement and sales business meets the needs of the company's actual operation and can reduce the impact of exchange rate fluctuations on the company's performance to a certain extent.
In conclusion, the recommendation institution has no objection to the company's business of foreign exchange forward settlement and sales this time.
7、 Online announcement attachment
(I) independent opinions of Guangdong Fuxin Technology Co.Ltd(688662) independent directors on matters related to the second meeting of the Fourth Board of directors
(II) verification opinions of Zhongtai Securities Co.Ltd(600918) on Guangdong Fuxin Technology Co.Ltd(688662) carrying out foreign exchange forward settlement and sales business.
It is hereby announced.
Guangdong Fuxin Technology Co.Ltd(688662) board of directors March 28, 2022
