Securities code: Guangdong Baolihua New Energy Stock Co.Ltd(000690) securities abbreviation: Guangdong Baolihua New Energy Stock Co.Ltd(000690) Announcement No.: 2022011 Guangdong Baolihua New Energy Stock Co.Ltd(000690)
Announcement on carrying out forward foreign exchange settlement and sales business and business feasibility analysis
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. Types of investment: placement or subscription of new shares, securities repurchase, investment in stocks and depositary receipts, bond investment, entrusted financial management, investment on the new third board, derivatives trading and other investment activities recognized by Shenzhen Stock Exchange. Among them, entrusted financial management means that the company entrusts banks, trusts, securities, funds, insurance asset management institutions, financial asset investment companies, private fund managers and other professional financial management institutions to invest and manage their properties or purchase relevant financial products; Derivatives transactions include thermal coal futures hedging business and forward foreign exchange settlement and sales business.
2. Investment amount: the total amount of securities investment is idle self owned funds of no more than RMB 2.8 billion, of which the contract value of derivatives trading thermal coal futures hedging business is no more than RMB 2.4 billion, and the maximum balance of margin is no more than RMB 700 million; The cumulative total amount of forward foreign exchange settlement and sales business shall not exceed the equivalent of US $50 million. The above derivatives trading business lines are included in the 2.8 billion limit of securities investment, and the funds within the limit can be used on a rolling basis.
3. Special risk tips: see “IV. risk analysis of forward foreign exchange settlement and sales business” and “v. risk control measures to be taken by the company” in this announcement for details.
Guangdong Baolihua New Energy Stock Co.Ltd(000690) (hereinafter referred to as “the company”) held the fifth meeting of the ninth board of directors on Friday, April 15, 2022, deliberated and adopted the proposal on carrying out long-term foreign exchange settlement and sales business and business feasibility analysis. Now the relevant information is announced as follows:
1、 Overview of securities investment
(I) in order to fully improve the use efficiency and return rate of funds, the company (including subsidiaries within the scope of consolidated statements, the same below) plans to use idle self owned funds of no more than RMB 2.8 billion for securities investment in 2022 after deliberation and approval at the fourth meeting of the ninth board of directors. The scope of investment includes placement or subscription of new shares, securities repurchase, stock and depositary receipts investment, bond investment, entrusted financial management, new third board investment, derivatives trading and other investment activities recognized by Shenzhen Stock Exchange. Among them, the derivatives trading content is the thermal coal futures hedging business, the business contract value does not exceed RMB 2.4 billion, and the maximum balance of margin does not exceed RMB 700 million (this amount is included in the 2.8 billion limit of securities investment, and the funds within the limit can be used on a rolling basis). As of December 31, 2021, the company held a total of 20559553476 yuan of assets within the meaning of “securities investment”. The specific details shall be subject to the information regularly reported by the company.
(II) due to the needs of business development, the company’s coal procurement focuses on China’s and foreign markets, and the payment for overseas procurement is mainly settled in US dollars. In order to reduce the impact of exchange rate fluctuations on the company’s performance and enhance financial stability, under the condition of ensuring the daily working capital demand, the company plans to add “forward foreign exchange settlement and sales business” on the basis of derivatives transactions of securities investment, and the business investment period is from January 1, 2022 to December 31, 2022; It is estimated that the maximum balance of forward foreign exchange settlement and sales business will not exceed the equivalent of US $50 million (the limit is included in the limit of RMB 2.8 billion of securities investment, and the funds within the limit can be used on a rolling basis). Except for the above adjustment of investment scope, other matters remain unchanged.
To sum up, the adjusted securities investment scope of the company includes: placement or subscription of new shares, securities repurchase, investment in stocks and depositary receipts, bond investment, entrusted wealth management, investment on the new third board, derivatives trading and other investment behaviors recognized by Shenzhen Stock Exchange. Among them, entrusted financial management means that the company entrusts banks, trusts, securities, funds, insurance asset management institutions, financial asset investment companies, private fund managers and other professional financial management institutions to invest and manage their properties or purchase relevant financial products; Derivatives transactions include thermal coal futures hedging business and forward foreign exchange settlement and sales business. The total amount of securities investment is idle self owned funds of no more than RMB 2.8 billion, of which the contract value of thermal coal futures hedging business is no more than RMB 2.4 billion, and the maximum balance of margin is no more than RMB 700 million; The maximum balance of forward foreign exchange settlement and sales business shall not exceed the equivalent of US $50 million. The above derivatives trading business lines are included in the 2.8 billion limit of securities investment, and the funds within the limit can be used on a rolling basis. The investment period is from January 1, 2022 to December 31, 2022. Relevant financial accounting shall be handled in accordance with the accounting standards for business enterprises and other accounting policies.
At the same time, the company requests the board of directors to authorize the management of the company (including subsidiaries within the scope of consolidated statements) to specifically implement business related to securities investment and derivatives trading, exercise relevant decision-making power and sign relevant documents within the limit and validity period.
2、 Review procedure
(I) on April 15, 2022, the fifth meeting of the ninth board of directors of the company deliberated and adopted the “on no abstention”. The independent directors of the company have expressed special opinions on this matter.
(II) in accordance with the stock listing rules of the Shenzhen Stock Exchange, the self regulatory guidelines for listed companies No. 1 – standardized operation of listed companies on the main board and the articles of association of the company, the business of long-term foreign exchange settlement and sales and business feasibility analysis are within the decision-making authority of the board of directors of the company and do not need to be submitted to the general meeting of shareholders of the company for deliberation. (III) the forward foreign exchange settlement and sales business does not constitute related party transactions.
3、 Feasibility analysis of long-term foreign exchange settlement and sales business
(I) business background and purpose
In recent years, affected by the national shortage of coal and the high price rise of power coal, the company urgently needs to strengthen cost control, optimize the organization of supply, look at China’s and foreign markets, and explore the diversification of raw material sources; However, at the same time, affected by international political, economic and social uncertainties, the foreign exchange market fluctuates more frequently, and the range of exchange rate fluctuations continues to increase, resulting in an increase in operational uncertainties. The company has overseas procurement in the process of business activities, and the settlement currency is mainly US dollars. When the exchange rate fluctuates greatly, the exchange profit and loss will have a great impact on the company’s operating performance. In order to prevent foreign exchange rate risks and enhance the financial stability of the company, it is necessary for the company to appropriately carry out forward foreign exchange settlement and sales business according to specific conditions.
Forward foreign exchange settlement and sales is a foreign exchange hedging financial product approved by the people’s Bank of China. Its transaction principle is to sign a forward foreign exchange settlement and sales contract with the bank to agree on the foreign exchange currency, amount, exchange rate and time limit for the settlement and sales of foreign exchange in the future. When the foreign exchange income or expenditure occurs on the due date, the settlement business shall be handled according to the prior contract of both parties, so as to lock in the cost of foreign exchange settlement and sales in the current period.
Within the predicted amount of foreign exchange settlement and sales, the company (including subsidiaries) chooses the opportunity to carry out long-term foreign exchange settlement and sales business from the perspective of locking the cost of foreign exchange settlement and sales, which meets the development needs of the company and the risk is controllable.
(II) business type and counterparty
The forward foreign exchange settlement and sales business carried out by the company is limited to the main settlement currency involved in the business is US dollars or other foreign currencies with forward foreign exchange settlement and sales business. Carry out foreign exchange transactions in which the amount of foreign currency shall not exceed the predicted payment or collection amount, and the delivery period is consistent with the predicted payment and collection period.
The counterparties are banks and other financial institutions with foreign exchange derivatives trading business qualification approved by the State Administration of foreign exchange and the people’s Bank of China.
(III) investment period: from January 1, 2022 to December 31, 2022
(IV) source of funds: idle self owned funds of the company.
4、 Risk analysis of forward foreign exchange settlement and sales business
The company’s forward foreign exchange settlement and sales business follows the principle of prudence and does not carry out foreign exchange transactions for the purpose of speculation. All forward foreign exchange settlement and sales business is based on normal production and operation, relying on specific business operations, and aiming at avoiding and preventing exchange rate risks. However, there are certain risks in the forward settlement and sales of foreign exchange:
1. Exchange rate fluctuation risk: when the foreign exchange rate fluctuates greatly, the company judges that the sharp fluctuation direction of the exchange rate is inconsistent with the direction of the forward foreign exchange settlement and sales contract, which will cause exchange losses; If the exchange rate fluctuates in the future, a large deviation from the forward foreign exchange settlement and sales contract will also cause exchange losses.
2. Internal control risk: the long-term foreign exchange settlement and sales business is highly professional and complex, which may cause risks due to the imperfect internal control mechanism.
3. Transaction default risk: if the counterparty of the forward foreign exchange settlement and sales business defaults and fails to pay the company’s profit from the forward foreign exchange settlement and sales transaction as agreed, it is unable to hedge the company’s actual exchange loss, which will cause the company’s loss. 4. Collection and payment forecast risk: the company forecasts collection and payment according to sales orders and purchase orders. In the actual implementation process, customers or suppliers may adjust orders, resulting in inaccurate collection and payment forecasts and delivery risk.
5、 Risk control measures to be taken by the company
1. In order to avoid the risk of sharp fluctuation of exchange rate, the company will strengthen the research and analysis of exchange rate, pay real-time attention to the changes of international market environment, timely adjust business strategy and avoid exchange loss to the greatest extent.
2. The company has formulated the management system of long-term foreign exchange settlement and sales business, established a strict and effective risk management system, and used the risk control measures before, during and after the event to prevent, discover and reduce various risks. The system meets the relevant requirements of the regulatory authorities, meets the needs of practical operation, and the risk control measures formulated are practical and effective. 3. In order to avoid internal control risks, the finance department and the audit and compliance department of the company, as relevant responsible departments, have clear management positioning and responsibilities. Through hierarchical management, a supervision mechanism is formed to eliminate the risk of single person or separate department operation from the system, so as to effectively control the risk and improve the response speed to the risk.
4. In order to control the risk of transaction default, the company only carries out forward foreign exchange settlement and sales business with financial institutions approved by the State Administration of foreign exchange and the people’s Bank of China and qualified for forward foreign exchange settlement and sales and foreign exchange option trading, and pays close attention to relevant policies and regulations at home and abroad to ensure the legitimacy of transaction management.
5. The company’s forward foreign exchange settlement and sales business must be based on the careful prediction of the company’s foreign currency collection (payment). The delivery date of the forward foreign exchange settlement and sales business must match the foreign currency collection, deposit time or foreign currency payment time predicted by the company. The foreign currency amount of the transaction contract shall not exceed the predicted amount of foreign currency collection or foreign currency payment.
6. The company will regularly conduct internal control review on the actual operation, capital use and profit and loss of the long-term foreign exchange settlement and sales business.
6、 Impact on the company
(I) impact on the company’s production and operation
It helps to reduce the impact of exchange rate fluctuations on the company’s performance, enhance financial stability and further improve the company’s overall ability to resist risks.
(II) impact on the company’s financial accounting
The company will conduct corresponding financial accounting and treatment in strict accordance with accounting policies such as 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.
7、 Opinions of independent directors
“In accordance with the guidance on the establishment of independent director system in listed companies issued by China Securities Regulatory Commission, the guidelines for self discipline supervision of listed companies No. 1 – standardized operation of listed companies on the main board issued by Shenzhen Stock Exchange, the stock listing rules and the articles of association of the company, as independent directors of the company, we After reviewing the proposal on carrying out long-term foreign exchange settlement and sales business and business feasibility analysis, consulting relevant materials and asking about relevant information, and after full discussion, the independent opinions on this matter are as follows:
1. On the basis of ensuring normal operation and capital safety, the decision-making and approval procedures for the company’s long-term foreign exchange settlement and sales business comply with relevant laws, regulations and normative documents, and are legal and compliant.
2. The company (including subsidiaries within the scope of consolidated statements) plans to appropriately carry out forward foreign exchange settlement and sales business, which meets the production and operation needs of the company and is conducive to reducing the risk of exchange rate fluctuation and improving financial stability.
3. The company has formulated the management system of long-term foreign exchange settlement and sales business, which has made clear provisions on the organization, operation process, risk control and information isolation of long-term foreign exchange settlement and sales business, which is conducive to strengthening the risk management and control of long-term foreign exchange settlement and sales business.
4. The company’s commodity futures hedging business is in line with the interests of the company and all shareholders, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders.
We agree with the company to carry out forward foreign exchange settlement and sales business. “
8、 Other contents required to be disclosed
The company will continue to track the implementation progress and investment safety of securities investment and derivatives transactions, and timely fulfill the obligation of information disclosure in accordance with relevant regulations.
9、 Documents for future reference
(I) the resolution of the 5th meeting of the 9th board of directors of Guangdong Baolihua New Energy Stock Co.Ltd(000690) the board of directors signed by the attending directors and stamped with the seal of the board of directors;
(II) independent opinions of Guangdong Baolihua New Energy Stock Co.Ltd(000690) independent directors on carrying out forward foreign exchange settlement and sales business;
(III) management system for Guangdong Baolihua New Energy Stock Co.Ltd(000690) forward foreign exchange settlement and sales business.
It is hereby announced.
Guangdong Baolihua New Energy Stock Co.Ltd(000690) board of directors
April 16, 2002
