Dongguan Aohai Technology Co.Ltd(002993)
Feasibility analysis report on the company's foreign exchange hedging business
1、 The purpose of the company's foreign exchange hedging business
The foreign exchange hedging business carried out by the company (including consolidated statement subsidiaries) is based on normal import and export business, with the purpose of fixing the cost of foreign exchange exchange, stabilizing and expanding import and export and preventing exchange rate risk. It does not speculate and does not conduct foreign exchange transactions solely for the purpose of profit. In order to prevent the company's foreign exchange risk, further improve the ability to deal with foreign exchange fluctuation risk, better avoid and prevent foreign exchange rate fluctuation risk and enhance financial stability, the company (including consolidated statement subsidiaries) plans to carry out foreign exchange hedging business with banks and other financial institutions approved by relevant government departments and with relevant business operation qualifications.
2、 Basic information of foreign exchange hedging business
1. It mainly involves currency and business types
The foreign exchange hedging business to be carried out by the company (including consolidated statement subsidiaries) is limited to the main settlement currencies used in the actual business of the company, and the main currencies are US dollars, Indian rupees, Indonesian rupiah, etc. The specific methods or products of foreign exchange hedging business to be carried out by the company (including consolidated statement subsidiaries) mainly include forward settlement and sales of foreign exchange, foreign exchange swaps, foreign exchange options and other foreign exchange derivatives.
2. Business scale and source of investment
According to the actual demand, the total amount of foreign exchange hedging business approved by the company (including consolidated statement subsidiaries) this time shall not exceed the equivalent of RMB 1.3 billion. The source of funds is self owned funds and does not involve raised funds.
3. Authorization to carry out foreign exchange hedging business
The board of directors of the company authorizes the chairman of the company to make decisions within the quota and sign contracts and agreements related to foreign exchange hedging business.
4. Foreign exchange hedging business counterparty
Banks and other financial institutions that are not affiliated with the company and have the qualification of foreign exchange hedging business with the approval of relevant government departments.
3、 Feasibility analysis of foreign exchange hedging
The company's foreign exchange hedging business 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, with hedging as a means, for the purpose of avoiding and preventing the risk of exchange rate fluctuation.
The purpose of the company's foreign exchange hedging business is to make full use of foreign exchange hedging tools to reduce or avoid exchange rate risks caused by exchange rate fluctuations, reduce exchange losses and control operational risks.
The company has formulated the management system of foreign exchange hedging business, improved the relevant internal control system, and equipped professionals for foreign exchange hedging business. The targeted risk control measures taken by the company are practical and feasible, and it is feasible to carry out foreign exchange hedging business.
By carrying out foreign exchange hedging business, the company can avoid the risks in the foreign exchange market to a certain extent, prevent the adverse impact of large exchange rate fluctuations on the company, improve the use efficiency of foreign exchange funds and enhance financial stability, without damaging the interests of the company and all shareholders.
4、 Risk control measures taken by the company
1. The company has formulated the foreign exchange hedging business management system, which clearly stipulates the operation regulations, approval authority, information disclosure, management and internal operation process, information confidentiality measures, internal risk control procedures and file management of foreign exchange hedging business.
2. 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 operation and business operation strategies, and avoid exchange loss to the greatest extent. 3. In order to avoid internal control risks, the authorized department of the company is responsible for the unified management of the company's foreign exchange hedging business. All foreign exchange transactions are based on normal production and operation and rely on specific business operations. Speculation and arbitrage transactions are not allowed. Business operations are carried out in strict accordance with the provisions of the management system of foreign exchange hedging business to effectively ensure the implementation of the system.
4. In order to control the risk of transaction default, the company only carries out foreign exchange hedging business with legally qualified large banks and other financial institutions to ensure the legitimacy of the company's management of foreign exchange derivatives transactions.
5、 Conclusion of feasibility analysis on the company's foreign exchange hedging business
The relevant decision-making procedures for the company (including consolidated statement subsidiaries) to carry out foreign exchange hedging business comply with relevant national laws and regulations and the relevant provisions of the articles of association. Based on the needs of normal production and operation and business development scale, the company uses foreign exchange hedging tools to reduce exchange rate risk and financial expenses and control business risks, without damaging the interests of the company and all shareholders, especially small and medium-sized shareholders.
At the same time, the company has established the management system of foreign exchange hedging business, which has formulated specific operation specifications for the company to engage in foreign exchange hedging business by strengthening internal control and implementing risk prevention measures.
To sum up, the risk of the company's foreign exchange hedging business is controllable, and it can avoid and prevent exchange rate risk to a certain extent, and enhance the company's financial stability, which is feasible.
Dongguan Aohai Technology Co.Ltd(002993) board of directors April 20, 2022
