Securities code: Xgd Inc(300130) securities abbreviation: Xgd Inc(300130) Announcement No.: 2022020 Xgd Inc(300130)
Announcement on the company and its subsidiaries carrying out forward foreign exchange settlement and sales business
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: Xgd Inc(300130) (hereinafter referred to as “the company” or ” Xgd Inc(300130) “) and its subsidiaries intend to carry out forward foreign exchange settlement and sales business.
2. Investment amount: it is expected that the amount of forward foreign exchange settlement and sales transactions carried out by the company and its subsidiaries at any time point within 12 months from the date of approval of the plan will not exceed the equivalent of RMB 500 million. The transaction amount can be recycled and used within the above limit range and period, and the extended transaction will not be calculated repeatedly.
3. Special risk warning: the company and its subsidiaries have market risk, operation management risk, and customer default or payment collection risk in carrying out forward foreign exchange settlement and sales. Please pay attention to the investment risk.
The company held the 17th meeting of the 5th board of directors on March 28, 2022, deliberated and passed the proposal on the company and its subsidiaries to carry out long-term foreign exchange settlement and sales business, agreed that the company and its subsidiaries should carry out long-term foreign exchange settlement and sales business due to business development, and the board of directors authorized the management to approve the long-term foreign exchange settlement and sales business and select cooperative banks according to business conditions and actual needs within the scope of deliberation. The relevant matters are hereby announced as follows:
1、 Overview of carrying out forward foreign exchange settlement and sales transactions
1. Transaction purpose: in order to implement the company’s development strategy and reasonably distribute domestic and foreign markets, the company actively carries out and maintains overseas business development. According to the company’s audit report, from 2019 to 2021, the company achieved overseas operating revenue of 212 million yuan, 287 million yuan and 544 million yuan respectively, accounting for 6.99%, 10.89% and 15.07% of the company’s overall operating revenue respectively. With the continuous expansion of the company’s overseas business scale, the volume of foreign exchange settlement business has gradually increased. Therefore, when the exchange rate fluctuates greatly, the exchange gains and losses will have a certain impact on the company’s operating performance. In order to reduce the impact of exchange rate on the company’s operating performance and reduce some exchange gains and losses, the company and its subsidiaries continued to carry out forward foreign exchange settlement and sales business in 2022. The long-term settlement and sales of Foreign Exchange carried out by the company are aimed at locking costs, avoiding and preventing exchange rate risks, and will not affect the company’s main business.
2. Transaction amount: the company and its subsidiaries intend to carry out forward foreign exchange settlement and sales business with commercial banks, and the total amount is expected to not exceed the equivalent of RMB 500 million, which is valid within 12 months from the date of deliberation and approval by the board of directors. The transaction amount can be recycled and rolled within the above limit range and period, and the extended transaction will not be calculated repeatedly.
3. Business types and counterparties: the forward foreign exchange settlement and sales business carried out by the company is limited to the same currencies as the main settlement currencies used by the company for production and operation, including but not limited to US dollars, Hong Kong dollars, euros and Singapore dollars. The counterparties are financial institutions with foreign exchange derivatives trading business qualification approved by the State Administration of foreign exchange and the people’s Bank of China.
4. Transaction period: valid within 12 months from the date of approval of the plan. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended until the termination of the transaction, but the transaction limit will be included in the next approval period.
5. Source of funds: all the funds of the company’s forward foreign exchange settlement and sales transactions are the company’s own funds.
2、 Review procedures for forward foreign exchange sales and settlement
On March 28, 2022, the company held the 17th meeting of the 5th board of directors, deliberated and adopted the proposal on the company and its subsidiaries to carry out long-term foreign exchange settlement and sales business, and the independent directors of the company expressed independent opinions on this matter. This forward foreign exchange settlement and sale belongs to the decision-making authority of the board of directors of the company, does not need to be submitted to the general meeting of shareholders for deliberation, and does not constitute a connected transaction.
3、 Carry out risk analysis and Countermeasures of forward foreign exchange settlement and sales transactions
The forward foreign exchange settlement and sales business carried out by the company and its subsidiaries follows the principle of locking exchange rate risk and does not engage in speculative and arbitrage trading operations. However, there are still certain risks in the forward foreign exchange settlement and sales operation. Please pay attention to the investment risks. The specific risks are as follows:
1. Market fluctuation risk: when the foreign exchange rate fluctuates greatly, there may be a market risk of exchange loss due to large deviation from the foreign exchange hedging contract.
Countermeasures: ① make it clear that the principle of forward foreign exchange settlement and sale transaction is to avoid and prevent the risk of exchange rate fluctuation, and prohibit any risk speculation; ② Grasp the causes of market fluctuations through professional banking institutions, study and judge the future trend, and select varieties with controllable risk and simple transaction through selection and comparison; ③ In case of wide fluctuation of exchange rate and potential loss of foreign exchange forward settlement and sales, the company will actively seek risk hedging products such as extension to reduce the loss or impact caused by market fluctuation risk.
2. Operational management risk: the forward foreign exchange settlement and sale transaction business is highly professional and complex, which may cause risks due to the professional level of operators or imperfect management mechanism.
Countermeasures: ① the company has formulated the management system for long-term settlement and sales of foreign exchange, which clearly stipulates the internal audit process, decision-making procedures, internal risk reporting system, risk handling procedures, information disclosure, etc. According to the system, the company has established strict authorization and approval authority, defined the responsibilities of various management institutions, and formed a set of relatively perfect derivatives management mechanism; ② Do a good job in counterparty management, fully understand the business qualification, implementation team, involved trading personnel and authorization system of trading financial institutions, and carefully select banks with good credit and long-term business contacts with the company; ③ The company shall continuously monitor the forward foreign exchange settlement and sales contracts held by the company, timely report and formulate response plans in case of severe market fluctuations or increased risks.
3. Customer default risk or collection prediction risk: the customer’s accounts receivable are overdue and the payment cannot be recovered within the predicted collection period, which may cause the risk of loss to the company due to the delivery of unilateral forward foreign exchange settlement contract. Countermeasures: ① reserve a certain payment grace period for customers in advance; ② Communicate with customers and actively collect payment for goods to ensure that the payment for goods is recovered on schedule. If the customer is really unable to pay on schedule, the company will coordinate with other customers to collect the payment and properly arrange the delivery funds; ③ Apply to the bank for postponement of delivery.
4、 Impact of carrying out forward foreign exchange settlement and sales transactions on the company
The forward foreign exchange settlement and sales business of the company and its subsidiaries is carried out around the company’s main business. It is not a forward foreign exchange transaction solely for the purpose of profit, but based on specific business operations, by means of locking the exchange rate, for the purpose of avoiding and preventing the risk of exchange rate fluctuation, and for the purpose of protecting normal operating profits; The company has formulated the management system of long-term foreign exchange settlement and sales, and is equipped with professionals in relevant decision-making, business operation, risk control and so on. The targeted risk control measures taken by the company are effective and feasible. It is necessary and feasible for the company and its subsidiaries to carry out forward foreign exchange settlement and sales business, which can effectively reduce the risk of exchange rate fluctuation.
5、 Opinions of independent directors
After review, we believe that the forward foreign exchange settlement and sales business of the company and its subsidiaries is based on normal operation. The purpose is to improve the company’s ability to deal with foreign exchange risks, prevent the adverse impact of large exchange rate fluctuations on the company’s performance, and meet the needs of the company’s business development. At the same time, the company has formulated the management system for long-term settlement and sales of foreign exchange and improved the relevant business approval process, which is conducive to strengthening the transaction risk management and control. This matter complies with the requirements of relevant laws and regulations, normative documents, articles of association and relevant systems. The review procedure is legal and effective, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. Therefore, we agree to the proposal on the company and its subsidiaries to carry out forward foreign exchange settlement and sales business.
6、 Documents for future reference
1. Xgd Inc(300130) the resolution of the 17th meeting of the 5th board of directors;
2. Xgd Inc(300130) the resolution of the 15th meeting of the 5th board of supervisors; 3. Xgd Inc(300130) independent directors’ independent opinions on 2021 annual report and related matters. It is hereby announced.
Xgd Inc(300130)
Board of directors
March 30, 2022
