Securities code: Guangdong Chaohua Technology Co.Ltd(002288) securities abbreviation: Guangdong Chaohua Technology Co.Ltd(002288) Announcement No.: 2022019 Guangdong Chaohua Technology Co.Ltd(002288)
Announcement on the expected trading quota of financial derivatives
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.
Guangdong Chaohua Technology Co.Ltd(002288) (hereinafter referred to as "the company") deliberated and adopted the proposal on the estimation of the trading quota of financial derivatives at the 10th meeting of the 6th board of directors held on March 29, 2022, and agreed that the company and its subsidiaries within the scope of consolidated statements (hereinafter referred to as "subsidiaries") should carry out financial derivatives business with a quota of no more than 300 million yuan or equivalent foreign currency, And authorize the company's management to implement the above-mentioned financial derivatives trading business within the limit. According to the financial derivatives trading management system of Guangdong Chaohua Technology Co., Ltd., this matter falls within the approval authority of the board of directors and does not need to be submitted to the general meeting of shareholders for deliberation. The relevant information is hereby announced as follows:
1、 It is expected to carry out financial derivatives trading business
In order to meet the business needs of the company and its subsidiaries and within the scope of risk control, the company and its subsidiaries within the scope of consolidated statements intend to prudently carry out financial derivatives business with a total amount of no more than RMB 300 million or equivalent foreign currency, and authorize the company's management to implement the above-mentioned financial derivatives trading business within the scope of the limit. The use period of the above quota is valid within 12 months from the date of deliberation and approval by the board of directors of the company. Within the validity period of the above quota and resolution, it can be recycled and rolled. If the duration of a single transaction exceeds the validity of the resolution, the review procedures and the review amount shall be performed before the expiration of the validity.
2、 Counterparty of this derivatives trading business
The counterparties of the financial derivatives trading business to be carried out by the company are large commercial banks and other financial institutions with sound operation, good credit and legal qualifications, which have no relationship with the company.
3、 Basic information of the proposed derivatives trading business
(I) types of financial derivatives trading business to be carried out
In order to reduce the impact of exchange rate fluctuations and interest rate fluctuations on the company's operating performance, the company and its subsidiaries plan to carry out financial derivatives trading business in combination with the actual business needs. Financial derivatives include but are not limited to forward, options, swaps (swaps), futures and other products or a combination of the above products, and the corresponding underlying assets include interest rate, exchange rate, currency, etc.
(II) amount and term of financial derivatives trading business to be carried out
The company and its subsidiaries intend to carry out financial derivatives business with a quota of no more than RMB 300 million or equivalent foreign currency. The service life of the above quota is valid within 12 months from the date of deliberation and approval by the board of directors of the company. Within the validity of the above quota and resolution, it can be recycled and used. If the duration of a single transaction exceeds the validity of the resolution, the review procedures and the review amount shall be performed before the expiration of the validity.
4、 Purpose, existing risks and impact on the company of carrying out derivatives trading business
(I) purpose of derivatives trading and its impact on the company
In order to meet the business needs of the company and its subsidiaries, within the scope of risk control, the company and its subsidiaries within the scope of consolidated statements plan to carry out financial derivatives business for the purpose of avoiding and preventing exchange rate risk and interest rate risk, which is in line with the prudent and prudent risk management principle of the company.
(II) risks of derivatives trading
1. Price fluctuation risk: the market risk of loss caused by the price change of financial derivatives due to the fluctuation of the underlying interest rate, exchange rate and market price.
2. Internal control risk: financial derivatives trading business is highly professional and complex, which may cause risks due to imperfect internal control mechanism.
3. Liquidity risk: the risk that the transaction cannot be completed due to insufficient market liquidity.
4. Performance risk: there is a risk of breach of contract due to failure to perform the contract when the contract expires.
5. Legal risk: the change of relevant laws or the violation of relevant legal systems by counterparties may cause the contract to be unable to be executed normally and bring losses to the company.
(III) risk response measures
1. Clarify the trading principles of financial derivatives: the trading of financial derivatives is based on the principle of hedging, and adjust the operation strategy in time in combination with the market situation to improve the hedging effect.
2. System construction: the company has established the financial derivatives trading management system, which clearly stipulates the authorization scope, approval procedures, risk management and information disclosure of derivatives trading, which can effectively regulate the trading behavior of financial derivatives and control the trading risk of financial derivatives.
3. Product selection: before financial derivatives trading, conduct comparative analysis between multiple counterparties and multiple products, and select the financial derivatives most suitable for the company's business background, strong liquidity and controllable risk to carry out business.
4. Counterparty Management: carefully select the counterparty engaged in financial derivatives business. The company only carries out financial derivatives trading business with financial institutions such as legally qualified large commercial banks to avoid possible legal risks.
5. Specially assigned person: the company's management representative, the company's financial department, the securities department and other relevant departments shall establish a special working group to be responsible for the risk assessment before the trading of financial derivatives, analyze the feasibility and necessity of the trading, be responsible for the specific operation of the trading, timely report the changes of risk assessment and put forward feasible emergency stop loss measures in case of major changes in the market.
5、 Accounting policies and accounting principles of financial derivatives 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 - hedge accounting and accounting standards for Business Enterprises No. 37 - presentation of financial instruments, the company conducts corresponding accounting treatment for the financial derivatives trading business to be carried out, reflecting the relevant items of the balance sheet and income statement.
6、 Opinions of independent directors
The independent directors of the company expressed their independent opinions on the company's proposed financial derivatives trading business as follows: 1 The company's proposed financial derivatives trading business is closely related to the daily business needs, which is conducive to avoiding the risk of exchange rate, interest rate and other fluctuations, enhancing the company's financial stability and meeting the needs of the company's business development. 2. The company has formulated the financial derivatives trading management system and relevant risk control measures, which is conducive to strengthening the risk management and control of financial derivatives trading, analyzed the feasibility of trading, and formulated the financial derivatives trading feasibility report. Relevant businesses have fulfilled the corresponding decision-making procedures and information disclosure obligations, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders.
To sum up, we agree that the company will carry out financial derivatives trading within the limit approved by the board of directors.
7、 Documents for future reference
1. The resolution of the 10th meeting of the 6th board of directors signed by the participating directors and stamped with the seal of the board of directors; 2. Independent opinions of independent directors on matters related to the 10th meeting of the 6th board of directors.
It is hereby announced.
Guangdong Chaohua Technology Co.Ltd(002288) board of directors March 30, 2002
