Securities code: 002389 securities abbreviation: Aerospace Ch Uav Co.Ltd(002389) Announcement No.: 2022-011 Aerospace Ch Uav Co.Ltd(002389)
Announcement on applying for hedging business to prevent exchange rate fluctuation risk
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.
The company held the 37th meeting of the 5th board of directors and the 26th meeting of the 5th board of supervisors on January 17, 2022, and deliberated and adopted the proposal on applying for hedging business to prevent exchange rate fluctuation risk. In order to effectively avoid and prevent foreign exchange market risks and reduce the impact of exchange rate fluctuations on the company’s main business performance, the company plans to carry out hedging business with a scale of no more than US $200 million, and the extension amount will not be calculated repeatedly. The amount will be effective within one year from the date of deliberation and approval by the board of directors of the company. The relevant matters are hereby announced as follows:
1、 Purpose of hedging business
The military trade business of the company is mainly carried out through the military trade company. The sales contracts signed are priced in US dollars. According to the accounting standards, the company records them at the spot exchange rate on the day of revenue recognition. After receiving the foreign funds, the military trade company converts them into RMB according to the actual settlement exchange rate on the day of foreign exchange settlement, and then settles with the company. If no exchange rate risk management tool is adopted, it shall be converted into RMB at the spot exchange rate of the current day at the end of the reporting period, and the difference shall be included in the current profit and loss. The appreciation of RMB is reflected in exchange loss, otherwise it is exchange gain. Exchange rate fluctuations in the past two years have a great impact on the company’s performance, which is not conducive to maintaining the good image of listed companies. The company carries out hedging business on the basis of normal production and operation, does not carry out foreign exchange transactions solely for profit, relies on specific business operations, does not exceed the specified business scope, strictly abides by the principles of hedging and risk neutrality, and avoids and prevents exchange rate risks.
2、 Overview of hedging business
1. Mainly involving currency and business type: the company carries out hedging business with accounts receivable as the subject, and the currency involved is USD. The types of foreign exchange hedging business conducted by the company are forward foreign exchange settlement and sales and other foreign exchange derivatives, and the trading place is OTC.
2. Capital scale and capital source: according to the company’s assets and business scale, the company’s proposed hedging business scale shall not exceed US $200 million, and the extension amount shall not be calculated repeatedly. The hedging business to be carried out by the company mainly uses the bank credit line or its own funds, and gives priority to the use of the bank credit line. If it uses its own funds, the proportion of the deposit paid is determined according to the specific agreement signed with the bank, and does not involve the raised funds.
3. Authorization and duration:
(1) Authorization: according to the measures for the administration of the company’s currency derivatives business, if the accumulated amount of the company’s currency derivatives business in a single transaction or within 12 consecutive months accounts for less than 50% of the net assets of the audited consolidated statements of the company in the latest fiscal year, it shall be approved by the board of directors; If the amount of the company’s single currency derivative business transaction or accumulated within 12 consecutive months accounts for more than 50% of the net assets of the audited consolidated statements of the company in the latest fiscal year, it shall be reviewed and approved by the board of directors and submitted to the general meeting of shareholders for approval. If it constitutes a connected transaction, the examination and approval procedures for connected transactions shall be performed. The board of directors authorizes the general manager office of the company to examine and approve the scope of transaction authority and the list of personnel according to the business plan.
(2) Term: within 12 months from the date of deliberation and approval by the board of directors of the company.
4. Counterparty: large commercial banks or financial institutions with foreign exchange hedging business qualification.
5. Liquidity arrangement: all foreign exchange capital businesses correspond to normal and reasonable business background, match with the collection contract, and will not affect the liquidity of the company.
3、 Risk analysis of hedging business
In carrying out foreign exchange hedging business, the company follows the principle of prudence, does not carry out foreign exchange transactions for speculation, all foreign exchange hedging business is based on normal production and operation, does not carry out foreign exchange transactions solely for profit, relies on specific business, does not exceed the specified business scope, and strictly abides by the principles of hedging and risk neutrality, Avoid and guard against exchange rate risks, but there will also be some risks in carrying out foreign exchange hedging business:
1. Exchange rate fluctuation risk: in case of significant deviation between the exchange rate trend and the direction of exchange rate fluctuation judged by the company, the cost incurred by the company after locking the exchange rate may exceed the cost incurred when it is not locked, resulting in losses to the company.
2. Internal control risk: foreign exchange hedging business is highly professional and complex, which may cause risks due to imperfect internal control system.
3. Counterparty default risk: there is a default risk that the foreign exchange hedging business cannot be performed when the contract expires.
4. Legal risk: due to the change of relevant laws and regulations or the counterparty’s violation of relevant laws and regulations, the contract may not be executed normally and bring losses to the company.
4、 Risk control measures taken by the company
1. Formulate the management measures for the company’s currency derivatives business. The company will control all links in strict accordance with the system and regulations, strengthen the professional knowledge training of relevant personnel and improve the professional quality of employees.
2. Based on the principle of hedging, avoiding and preventing exchange rate risk, avoid the risk caused by exchange rate fluctuation to the greatest extent, and adjust the strategy in time in combination with market conditions.
3. The company only conducts business with large financial institutions with legal qualifications to avoid possible legal risks.
4. In the process of business operation, strictly abide by the provisions of relevant national laws and regulations, prevent legal risks, and regularly check the standardization of hedging business, the effectiveness of internal control mechanism and the authenticity of information disclosure.
5. The board of supervisors, independent directors and the audit committee of the board of directors of the company have the right to supervise and inspect, and can hire professional institutions to audit when necessary, and the expenses shall be borne by the company.
6. The audit and legal department of the company shall audit and supervise the hedging business carried out by the company.
5、 Accounting policies and accounting principles
The company will carry out corresponding accounting treatment for the foreign exchange hedging business in accordance with the relevant provisions of the accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 24 – hedge accounting, accounting standards for Business Enterprises No. 37 – presentation of financial instruments and other standards and guidelines of the Ministry of finance, And disclose the company’s hedging business in regular financial reports.
6、 Relevant approval procedures and opinions
The company held the 37th meeting of the 5th board of directors and the 26th meeting of the 5th board of supervisors on January 17, 2022, deliberated and adopted the proposal on applying for hedging business to prevent exchange rate fluctuation risk, and agreed that the company should carry out hedging business with a scale of no more than US $200 million, and the extension amount should not be calculated repeatedly, The limit shall be valid within one year from the date of deliberation and approval by the board of directors of the company. The independent directors and the board of supervisors of the company issued clear consent opinions, and the recommendation institution issued verification opinions. (I) opinions of independent directors
The independent directors believe that the company’s hedging business is based on normal production and operation, does not conduct foreign exchange transactions solely for profit, relies on specific business operations, does not exceed the specified business scope, strictly abides by the principles of hedging and risk neutrality, aims to avoid and prevent exchange rate risks, and does not harm the interests of shareholders, especially small and medium-sized shareholders.
The hedging business to be carried out by the company mainly uses the bank credit line or its own funds, and gives priority to the use of the bank credit line. If it uses its own funds, the proportion of the deposit paid is determined according to the specific agreement signed with the bank, and does not involve the raised funds. At the same time, the company has formulated the management measures for the company’s currency derivatives business, and formulated specific operating procedures for the company’s hedging business by strengthening internal control and implementing risk prevention measures. The review procedures comply with relevant national laws and regulations, the articles of association and other relevant provisions. It is agreed that the company shall carry out hedging business with a scale of no more than USD 200 million, and the extension amount shall not be calculated repeatedly. The amount shall be effective within one year from the date of deliberation and approval by the board of directors of the company.
(II) opinions of the board of supervisors
After review, the board of supervisors believes that it is necessary for the company to carry out hedging business in order to make full use of hedging tools to reduce or avoid exchange rate risks caused by exchange rate fluctuations, reduce exchange losses and control business risks. The company has formulated the measures for the management of the company’s currency derivatives business to strictly control the process, strictly abide by the principles of hedging and risk neutrality, and avoid the risks caused by exchange rate fluctuations to the greatest extent. The company’s hedging business is in line with the interests of the company and does not harm the interests of the company and all shareholders, especially minority shareholders. The board of supervisors agrees that the company shall carry out hedging business with a scale of no more than USD 200 million, and the extension amount shall not be calculated repeatedly.
(III) opinions of the recommendation institution
After verification, the recommendation institution believes that the hedging business of the company is based on normal production and operation and aimed at avoiding and preventing exchange rate risk, and there is no situation that damages the interests of shareholders, especially small and medium-sized shareholders. The company has formulated the management measures for the company’s currency derivatives business and taken relatively perfect risk control measures. This matter has been deliberated and adopted at the 37th meeting of the Aerospace Ch Uav Co.Ltd(002389) Fifth Board of directors. The independent directors and the board of supervisors have expressed clear consent to the proposal and fulfilled the necessary legal procedures. At the same time, remind investors to pay attention to the risks of corresponding foreign exchange hedging business. The recommendation institution has no objection to the company’s hedging business.
7、 Documents for future reference
1. Resolutions adopted at the 37th meeting of the 5th board of directors;
2. Resolutions of the 26th meeting of the 5th board of supervisors;
3. Independent opinions of independent directors on matters related to the 37th meeting of the Fifth Board of directors; 4. China Securities Co.Ltd(601066) verification opinions on hedging business in Aerospace Ch Uav Co.Ltd(002389) 2022
5. Feasibility analysis report on the company’s hedging business.
It is hereby announced
Aerospace Ch Uav Co.Ltd(002389) board of directors January 17, 2002
