Securities code: Cansino Biologics Inc(688185) securities abbreviation: Cansino Biologics Inc(688185) Announcement No.: 2022022 Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company
Announcement on carrying out foreign exchange hedging business
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 integrity of its contents according to law.
Important content tips:
Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) company (hereinafter referred to as “the company”) and its subsidiaries intend to carry out foreign exchange hedging product transactions. It is estimated that the amount of hedging product transactions in 2022 will not exceed US $600 million or other equivalent foreign currencies. The source of funds is the company’s own funds, not involving raised funds. It is valid from the deliberation and approval of the 2021 annual general meeting of shareholders to the date of the 2022 annual general meeting of shareholders. Within the above limit, it can be used on a rolling basis.
The company’s foreign exchange hedging business is based on normal production and operation, with the purpose of avoiding and preventing exchange rate risks, and does not carry out speculation and arbitrage transactions solely for the purpose of profit.
This foreign exchange hedging business can only be implemented after being deliberated and approved by the general meeting of shareholders of the company. In order to effectively manage the company’s foreign currency assets and avoid the risk of exchange rate fluctuations in the foreign exchange market, the company held the 8th meeting of the second board of directors and the 11th meeting of the second board of supervisors on March 25, 2022, deliberated and adopted the proposal on developing foreign exchange hedging business, and agreed that the company and its subsidiaries should, according to the actual business development, From the deliberation and approval of the 2021 annual general meeting of shareholders to the date of the 2022 annual general meeting of shareholders, use its own funds of no more than US $600 million or other equivalent foreign currencies to carry out foreign exchange hedging business with relevant financial institutions. Within the above limit, the funds can be recycled. The details are as follows:
1、 Necessity of carrying out foreign exchange hedging business
In order to effectively avoid the risks in the foreign exchange market, prevent the adverse impact of exchange rate fluctuations on the company’s operating performance, improve the use efficiency of foreign exchange funds and reasonably reduce financial expenses, the company and its subsidiaries plan to carry out foreign exchange hedging product transactions. The company’s foreign exchange hedging business is based on normal production and operation, with the purpose of avoiding and preventing exchange rate risks, and does not carry out speculation and arbitrage transactions solely for the purpose of profit.
2、 Overview of foreign exchange hedging business to be carried out
1. Business type and currency
Business categories include but are not limited to: forward foreign exchange settlement and sales business, foreign exchange swap business, interest rate swap business, foreign exchange option business and other foreign exchange derivatives business. The main foreign currencies are US dollar, euro, etc.
2. Business scale and capital source
According to the company’s export revenue, overseas business scale, overseas financing and the practices of Companies in the same industry, the company and its subsidiaries are expected to carry out hedging product transactions in 2022 with a trading quota of no more than US $600 million or other equivalent foreign currencies, which can be used in a rolling manner within the scope of the quota. The source of funds is the company’s own funds, not involving raised funds.
3. Authorization matters
The board of directors requests the general meeting of shareholders to authorize the chairman of the company and his authorized representative to make decisions and sign relevant contracts within the above limit, and jointly negotiate with relevant financial institutions to determine the transaction amount, transaction period, transaction rate and other contents of hedging business within the above limit. Relevant hedging business matters shall be subject to the officially signed documents. 4. Duration
This proposal shall be valid from the deliberation and approval of the 2021 annual general meeting of shareholders to the date of the 2022 annual general meeting of shareholders.
3、 Risk analysis of foreign exchange hedging business
The foreign exchange hedging business carried out by the company and its subsidiaries follows the principle of locking exchange rate and interest rate risk, and does not engage in speculative and arbitrage trading operations, but there are still certain risks in the operation of foreign exchange hedging business: 1. Exchange rate market risk: under the condition of large exchange rate fluctuation, the foreign exchange hedging business carried out may bring large fair value fluctuation; If the market price is better than the locked price during operation, it will cause exchange risk;
2. Internal control risk: foreign exchange hedging business is highly professional and complex, which may cause risks due to imperfect internal control mechanism;
3. Liquidity risk: the risk that the transaction may not be completed due to insufficient market liquidity;
4. Performance risk: there is a risk of default due to failure to perform the contract upon expiration when carrying out foreign exchange hedging business;
5. Legal risk: the risk of loss to the company due to the change of relevant laws or the violation of relevant legal systems by counterparties, which may lead to the failure of normal execution of the contract;
6. Other risks: during the specific business, if the operator fails to accurately, timely and completely record the information of foreign exchange hedging business, it may lead to the loss of foreign exchange hedging business or the loss of trading opportunities.
4、 Risk management measures
1. The company and its subsidiaries carry out foreign exchange hedging business in strict accordance with the principles of legality, prudence, safety and effectiveness, and choose foreign exchange hedging business with strong liquidity and controllable risk.
2. Strictly control the transaction scale of foreign exchange hedging business, and the company and its subsidiaries can only conduct foreign exchange hedging transactions within the authorized limit.
3. The legal qualification of large-scale companies to carry out foreign exchange hedging business and the legal risk avoidance of subordinate companies may be closely related to the laws and regulations of large-scale banks.
4. The financial center of the company is responsible for continuously monitoring the foreign exchange hedging business and reporting to the management of the company on a regular basis. When the market fluctuates violently or the risk increases, or leads to significant floating profit and loss, it shall be reported to the company’s management at the first time to actively respond.
5. Formulate standardized business operation procedures and authorization management system, allocate full-time personnel, clarify post responsibilities, and engage in foreign exchange hedging business within the scope of authorization; At the same time, strengthen the business training and professional ethics of relevant personnel, improve the quality of relevant personnel, and establish a timely reporting system of abnormal conditions to avoid the occurrence of operational risks to the greatest extent.
6. The company has formulated relevant business management systems and risk prevention measures to specify the purchase and decision-making authority of products related to hedging business. Without authorization or approval, other departments and individuals have no right to make decisions on foreign exchange hedging business.
5、 Description of special opinions
(I) opinions of independent directors
The independent directors of the company believe that the foreign exchange hedging business carried out by the company this time will help the company avoid the risks of the foreign exchange market, prevent the adverse impact of exchange rate fluctuations on the company’s operating performance, improve the use efficiency of foreign exchange funds, reasonably reduce financial expenses, and there is no situation damaging the interests of the company and minority shareholders. To sum up, we agree that the company and its subsidiaries carry out foreign exchange hedging business in a timely manner according to the needs of business development and the relevant regulatory regulations of the place where the company is listed and the relevant systems and regulations of the company on the premise of ensuring the normal operation capital demand and capital safety.
(II) opinions of the board of supervisors
The board of supervisors believes that the company’s hedging business is to effectively avoid the risks in the foreign exchange market, prevent the adverse impact of 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 has established relevant approval procedures and risk control system. The procedures for this review are legal and compliant and comply with the provisions of relevant laws and regulations; The company’s Hedging Business complies with relevant regulations and does not harm the interests of listed companies and shareholders; The board of supervisors agrees that the company shall carry out hedging business according to the actual operation.
6、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the foreign exchange hedging business carried out by the company this time will help the company avoid the risks of the foreign exchange market, prevent the adverse impact of exchange rate fluctuations on the company’s operating performance, improve the efficiency of the use of foreign exchange funds, reasonably reduce financial expenses, and there is no harm to the interests of the company and minority shareholders. At the same time, the company’s relevant internal control system is sound and effectively implemented.
The company’s foreign exchange hedging business has been deliberated and approved by the board of directors and the board of supervisors of the company, and the independent directors have expressed their independent opinions with explicit consent. The matter complies with the provisions of relevant laws, regulations, the articles of association and other normative documents, and has performed the necessary approval procedures.
In conclusion, the recommendation institution has no objection to the company’s foreign exchange hedging business this time.
It is hereby announced.
Cansino Biologics Inc(688185) Jinyu Bio-Technology Co.Ltd(600201) board of directors March 28, 2022
