Guangdong Enpack Packaging Co.Ltd(002846)
Feasibility analysis report on carrying out forward foreign exchange settlement and sales business
1、 Purpose of carrying out forward foreign exchange settlement and sales business
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. 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 plan to carry out forward foreign exchange settlement and sales business in 2022.
2、 Type, amount and term of forward foreign exchange settlement and sales business
The company and its subsidiaries intend to carry out forward foreign exchange settlement and sales business with commercial banks, which is limited to the settlement currency used in the company's import and export business, including but not limited to US dollars. The total amount is expected to be no more than US $50 million, which is valid for 12 months from the date of deliberation and approval by the 2021 annual general meeting of shareholders.
The company's own funds shall be used for the long-term foreign exchange settlement and sales business, and the raised funds shall not be used for the long-term foreign exchange settlement and sales business directly or indirectly.
3、 Risks of forward foreign exchange settlement and sales
The forward settlement and sales of Foreign Exchange carried out by the company and its subsidiaries follow the principle of locking exchange rate risk and do not engage in speculative and arbitrage transactions. However, there are still some risks in the forward settlement and sales of foreign exchange. Please pay attention to the investment risks. The specific risks are as follows:
1. Exchange rate fluctuation risk: when the exchange rate changes greatly, if the forward exchange rate agreed in the forward settlement and sales contract is lower than the real-time exchange rate, exchange losses will be caused.
2. Internal control risk: forward foreign exchange settlement and sales transactions are highly professional, which may cause risks due to imperfect internal control system.
3. Customer default risk: the customer's accounts receivable are overdue, the investment transaction is delayed or in default, resulting in the payment cannot be recovered within the payment collection period, and the investment object cannot be delivered on schedule, which will cause the delay of forward foreign exchange settlement and lead to the loss of the company.
4. Collection forecast risk: the company's sales department forecasts the collection according to customer orders and expected orders. In the actual implementation process, customers may adjust their orders, resulting in inaccurate payment collection prediction of the company, resulting in the risk of delayed delivery of forward foreign exchange settlement.
4、 Risk control measures taken by the company
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, information isolation measures, internal risk reporting system, risk handling procedures, information disclosure, etc. According to the system, the company has established strict authorization and approval authority, clarified the responsibilities of various management institutions, and formed a set of relatively perfect derivatives management mechanism.
2. In order to prevent a long gap between the time of forward settlement and sale of foreign exchange and the actual collection and payment, the company attaches great importance to the performance of the contract and tracks the implementation of the contract to avoid a long gap between the time of collection and payment and the time of delivery. 3. Strictly control the capital scale of forward foreign exchange settlement and sales transactions. According to the audit report (xyzh / 2022szaa50134) audited and issued by ShineWing Certified Public Accountants (special general partnership), the company's export revenue in 2021 was 368 million yuan (about 566809 million US dollars). The foreign currency amount of the company's forward settlement and sales of foreign exchange does not exceed US $50 million, does not exceed the company's export revenue in 2021, and there is no major risk.
5、 Conclusion
The company's forward foreign exchange settlement and sales 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, 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. The company's long-term foreign exchange settlement and sales business can effectively reduce the risk of exchange rate fluctuation, which is necessary and feasible.
Guangdong Enpack Packaging Co.Ltd(002846) April 23, 2022
