Securities code: Changhong Meiling Co.Ltd(000521) , 200521 securities abbreviation: Changhong Meiling Co.Ltd(000521) , hongmeiling B Announcement No.: 2022019 Changhong Meiling Co.Ltd(000521)
Announcement on the company’s carrying out forward foreign exchange capital trading 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.
According to the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the articles of association, and in combination with the actual needs of Changhong Meiling Co.Ltd(000521) (hereinafter referred to as “the company” or “the company”), the company and its subsidiaries plan to carry out forward foreign exchange capital trading business from July 1, 2022 to June 30, 2023, mainly including forward foreign exchange trading business RMB foreign exchange swap business, RMB foreign exchange option business, forward foreign exchange trading business without principal delivery and other foreign exchange derivatives transactions. The transaction balance does not exceed 825 million US dollars (mainly including US dollars, Australian dollars and euros, and all other foreign currencies are converted into US dollars). The relevant information is explained as follows:
1、 Approval procedure
The company held the 16th meeting of the 10th board of directors on March 29, 2022. The meeting considered and adopted the proposal on the company’s forward foreign exchange trading business with 9 votes in favor, 0 votes against and 0 abstentions.
According to the measures for the administration of information disclosure of listed companies, the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board, the articles of association and other relevant provisions of the CSRC, the proposal needs to be submitted to the general meeting of shareholders of the company for deliberation, and the matter does not involve related party transactions.
2、 Necessity for the company to carry out forward foreign exchange capital trading business
In recent years, the company’s overseas export business has a large scale, and the foreign exchange collection of export business includes US dollars, Australian dollars, euros and other foreign currencies. There is a certain accounting period between the income determined by the company’s overseas export business and the actual settlement and sales of foreign exchange. At the same time, there is also a time difference between the signing of import business contracts and the payment of foreign exchange. Under the background of large fluctuations in the exchange rate between various foreign exchange currencies and RMB, The company’s foreign exchange assets and liabilities will face greater exchange rate risk. In order to lock in the company’s income and cost, avoid and prevent the risk of exchange rate fluctuation, maintain stable operation and ensure the realization of the company’s annual business objectives, it is necessary for the company to carry out foreign exchange capital trading business.
3、 Overview and main terms of the proposed forward foreign exchange trading business
1. Overview of forward foreign exchange capital trading business
In order to meet the needs of normal production and operation, the company and its subsidiaries plan to carry out forward foreign exchange capital trading business and handle forward foreign exchange trading business to avoid and prevent the risk of exchange rate fluctuation in banks, mainly including forward foreign exchange trading business, RMB foreign exchange swap business, RMB foreign exchange option business, non principal delivery forward foreign exchange trading business and other foreign exchange derivatives transactions.
2. Main terms of forward foreign exchange capital trading business
(1) Business period: the business period of forward foreign exchange capital transactions carried out by the company and its subsidiaries is from July 1, 2022 to June 30, 2023.
(2) Contract term: the maximum delivery period of a single transaction of forward foreign exchange capital transactions carried out by the company and its subsidiaries shall not exceed 1 year.
(3) Counterparty: banks (including five major state-owned banks, joint-stock banks such as Everbright, Societe Generale, Minsheng, China Merchants, Shanghai Pudong Development and Huaxia, and foreign banks such as Dahua, overseas Chinese and East Asia).
(4) Liquidity arrangement: all forward foreign exchange capital transactions are based on the real trade background, and scientifically and reasonably estimate the amount and matching time of foreign exchange receipt and payment, which will not affect the liquidity of the company’s funds.
4、 Scale and preparation of forward foreign exchange capital trading business to be carried out
The annual transaction balance of the forward foreign exchange capital trading business to be carried out by the company and its subsidiaries shall not exceed 825 million US dollars (mainly including US dollars, Australian dollars and euros, and all other foreign currencies are converted into US dollars). At the same time, according to the actual business needs of the company and its subsidiaries, carry out business within the amount approved by the board of directors and the general meeting of shareholders. The specific operation plan shall be implemented by the management of the company and its subsidiaries authorized by the board of directors and the general meeting of shareholders. If the company and its subsidiaries need to increase the business quota of forward foreign exchange trading due to the needs of business development, the review procedures shall be performed again in accordance with the articles of association and relevant normative documents.
The company has formulated the Changhong Meiling Co.Ltd(000521) forward foreign exchange fund trading business management system, which defines the organizational framework, operation Department and responsible person of the company’s forward foreign exchange fund trading business. The company’s financial management department is mainly responsible for the operation of this business and is equipped with professionals. Relevant personnel have fully understood the characteristics and risks of the proposed forward foreign exchange fund trading business.
5、 Risk analysis of forward foreign exchange capital transactions
1. Market risk: changes in the economic situation outside China may cause significant fluctuations in the exchange rate, and the forward foreign exchange trading business faces certain market risks. The company’s forward foreign exchange trading business aims at locking the price of foreign exchange settlement or sales and reducing the impact of exchange rate fluctuations on the company’s profits. The company will closely track the change of exchange rate. Based on the target exchange rate determined by the business, through the research and judgment of the trend of foreign exchange rate, combined with the prediction of the company’s collection and payment of foreign exchange and the ability to bear the price change caused by exchange rate fluctuation, the company will determine the plan for signing forward foreign exchange trading contracts, and implement dynamic management of the business to ensure the reasonable profit level of the company.
2. Liquidity risk: all foreign exchange trading businesses of the company are based on the reasonable estimation of the company’s future import and export business to meet the needs of trade authenticity. In addition, forward foreign exchange transactions are operated by bank credit, which will not affect the liquidity of the company’s funds.
3. Bank default risk: if the cooperative bank goes bankrupt and other default situations occur within the contract period, the company will not be able to deliver the original foreign exchange contract at the contract price, and there is a risk of uncertain income. Therefore, the banks selected by the company to carry out foreign exchange capital trading business include five major state-owned banks, joint-stock banks such as Everbright, Societe Generale, Minsheng, China Merchants, Shanghai Pudong Development and Huaxia, and foreign banks such as Dahua, overseas Chinese and East Asia. These banks have strong strength and stable operation, and the risk of bankruptcy that may bring losses to the company is very low.
4. Operational risk: the company’s forward foreign exchange trading business may produce relevant risks due to improper operation of handling personnel. The company has formulated relevant management systems and defined the operation process and responsible person, which is conducive to preventing and controlling risks.
5. Legal risk: the company’s forward foreign exchange trading business may lead to legal disputes due to the signing of relevant trading contracts with banks and unclear agreements. The credit risk of the company will be reviewed and the legal risk control of the company will be strengthened.
6、 Description of risk management strategy
The company adheres to the principle of “safe, moderate and reasonable funds”, and all foreign exchange capital business must have a normal and reasonable business background to eliminate speculation; At the same time, the company implements a hierarchical management system for foreign exchange capital transactions, with clear management positioning and responsibilities at all levels. The functions of foreign exchange capital business demand application, monitoring and actual operation are respectively responsible by different levels, and the responsibilities are assigned to each person. Through hierarchical management, the risks of single person or separate department operation are fundamentally eliminated, and the risks are effectively controlled and prevented.
7、 Risk control measures taken by the company
In 2014, the company formulated the management system of forward foreign exchange capital trading business, which stipulates that the company’s forward foreign exchange capital trading business shall follow the principles of legality, prudence, safety and effectiveness, and shall not conduct foreign exchange transactions solely for the purpose of profit. All forward foreign exchange capital trading business is based on normal production and operation, relying on specific business operations, and for the purpose of avoiding and preventing exchange rate risks. The management system defines the main types, operation principles, approval authority, management and internal operation processes of forward foreign exchange trading business, and puts forward requirements for information isolation measures, internal risk reporting system and risk handling procedures, information disclosure and other matters. This system is conducive to strengthening the management of forward foreign exchange trading business, preventing investment risks, and improving the management mechanism of the company’s forward foreign exchange trading business, Ensure the safety of the company’s assets.
8、 Fair value analysis
The company conducts recognition and measurement in accordance with “measurement of financial instruments” in accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments. The fair value is basically determined according to the price provided or obtained by banks and other pricing service institutions. The company conducts fair value measurement and recognition every month. The final accounting treatment of the company for this business is subject to the opinions of the accounting firm responsible for the audit of the company.
9、 Accounting policies and accounting principles
In accordance with the relevant provisions and guidelines of the 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 issued by the Ministry of finance, the company conducts corresponding accounting treatment for the proposed forward foreign exchange transaction business, reflecting the relevant items of the balance sheet and income statement, The company’s final accounting treatment of the business shall be subject to the opinions of the accounting firm responsible for the audit of the company.
10、 Independent opinions of independent directors
The independent directors of the company express independent opinions on the above matters as follows:
1. The relevant approval procedures for the company to carry out forward foreign exchange capital trading business comply with relevant national laws and regulations and the relevant provisions of the articles of association.
2. The company has formulated Changhong Meiling Co.Ltd(000521) forward foreign exchange capital trading business management system, which has improved and perfected the company’s forward foreign exchange trading business management mechanism.
3. The company follows the principles of legality, prudence, safety and effectiveness in its forward foreign exchange capital trading business, and does not conduct foreign exchange transactions solely for the purpose of profit. All forward foreign exchange capital trading business is based on normal production and operation, based on specific business operations, and for the purpose of avoiding and preventing exchange rate risk, which is conducive to avoiding the exchange rate risk faced by import and export business and meets the needs of the company’s business development, There is no speculative operation and no damage to the interests of the company and all shareholders, especially minority shareholders.
Therefore, we believe that the company’s forward foreign exchange trading is closely related to the company’s daily business needs, and the risk is controllable. The deliberation and decision-making procedures of the proposal comply with the relevant provisions of the company law, the stock listing rules of Shenzhen Stock Exchange, the guidelines for the standardized operation of listed companies and other laws and regulations, as well as the articles of association. We agree that the company will carry out forward foreign exchange trading business from July 1, 2022 to June 30, 2023, and the transaction balance will not exceed 825 million US dollars (mainly including US dollars, Australian dollars and euros, and all other foreign exchange will be converted into US dollars), and agree to submit the proposal to the shareholders’ meeting of the company for deliberation.
11、 Documents for future reference
1. The resolution of the 16th meeting of the 10th board of directors signed by the attending directors and stamped with the seal of the board of directors; 2. Independent opinions of independent directors on relevant proposals of the 16th meeting of the 10th board of directors.
It is hereby announced
Changhong Meiling Co.Ltd(000521) board of directors March 31, 2002
