Citic Securities Company Limited(600030)
About Wuxi Lead Intelligent Equipment Co.Ltd(300450)
Verification opinions on carrying out forward foreign exchange settlement and sales business
Citic Securities Company Limited(600030) (hereinafter referred to as Citic Securities Company Limited(600030) or recommendation institution) as a recommendation institution for Wuxi Lead Intelligent Equipment Co.Ltd(300450) (hereinafter referred to as Wuxi Lead Intelligent Equipment Co.Ltd(300450) or company) to publicly issue convertible corporate bonds in 2019 and issue shares to specific objects in 2021, in accordance with the administrative measures for securities issuance and listing recommendation business and the Listing Rules of GEM stocks of Shenzhen Stock Exchange In accordance with the provisions of relevant laws, regulations and normative documents such as the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange and the guidelines for the self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 13 – recommendation business, we have carefully verified the long-term settlement and sales of foreign exchange in Wuxi Lead Intelligent Equipment Co.Ltd(300450) . The verification results and opinions are as follows: 1. The purpose of carrying out long-term settlement and sales of foreign exchange
Some overseas businesses of the company and its subsidiaries need to be settled in foreign currency. Therefore, when the exchange rate fluctuates greatly, it will not only affect the normal operation of the company’s business, but also have a great impact on the company’s operating performance. In order to improve the use efficiency of foreign exchange funds, reasonably reduce financial expenses and reduce the impact of exchange rate fluctuations on the company’s operation, the company and its subsidiaries plan to carry out forward foreign exchange settlement and sales business in commercial banks.
The long-term settlement and sales of foreign exchange of the company and its subsidiaries are based on normal business, reasonably arrange the use of funds, aim at fixing the cost of exchange, stabilizing and expanding business and preventing exchange rate risk, do not speculate, do not conduct foreign exchange transactions solely for profit, and do not affect the development of the main business of the company. 2、 Overview of forward foreign exchange settlement and sales business
Forward foreign exchange settlement and sales refers to the signing of a forward foreign exchange settlement and sales contract between the bank and the customer, which stipulates the foreign exchange currency, amount, exchange rate and time limit for the settlement and sales of foreign exchange in the future. When foreign exchange income or expenditure occurs on the due date, the settlement and sales of foreign exchange shall be handled according to the currency, amount and exchange rate agreed in the forward foreign exchange settlement and sales contract.
The forward foreign exchange settlement and sales business to be carried out by the company is limited to the same currency as the main settlement currency used by the company and its subsidiaries in production and operation. The main foreign currency currencies include but are not limited to US dollars, euros, Japanese yen and other currencies related to actual business. 3、 Scale of long-term foreign exchange settlement and sales
In 2022, the amount of forward foreign exchange settlement and sales transactions carried out by the company and its subsidiaries shall not exceed 3 billion yuan or equivalent in other currencies, and the above amount can be recycled and rolled.
According to the relevant provisions of the company’s management system for long-term foreign exchange settlement and sales business, the proposal on carrying out long-term foreign exchange settlement and sales business has been deliberated and adopted at the 10th meeting of the Fourth Board of directors and the 10th meeting of the Fourth Board of supervisors, and needs to be deliberated and approved by the company’s first extraordinary general meeting in 2022. 4、 Risk analysis of long-term settlement and sale of foreign exchange and control measures taken by the company
In carrying out forward foreign exchange settlement and sales business, the company follows the principle of locking exchange rate risk and preserving value, does not engage in speculative and arbitrage trading operations, and strictly carries out transactions in accordance with the company’s predicted collection period and collection amount when signing the contract. Forward foreign exchange transactions can reduce the impact of exchange rate fluctuations on the company in case of large exchange rate fluctuations, but there may also be certain risks: (I) market risk
The difference between the exchange rate of the forward foreign exchange settlement and sale transaction contract and the actual exchange rate on the maturity date will produce transaction profits and losses; During the duration of the transaction contract interest rate, revaluation profit and loss will occur in each accounting period, and the cumulative value of revaluation profit and loss to the maturity date is equal to the transaction profit and loss. In view of this risk, the company will strengthen the research and analysis of exchange rate and timely adjust its business strategy to stabilize its business and avoid exchange losses to the greatest extent. (II) liquidity risk
The forward settlement and sale of foreign exchange shall be based on the company’s foreign exchange assets and liabilities, match with the actual foreign exchange revenue and expenditure, and ensure that sufficient funds are available for liquidation at the time of delivery, so as to reduce the demand for cash flow on the due date. Secondly, due to business changes, market changes and other reasons, it is necessary to close positions or extend financial derivatives in advance, which has the risk of paying the price difference to the bank with its own funds temporarily. In view of this risk, the company will choose the forward foreign exchange settlement and sales business with simple structure, strong liquidity and controllable risk, and strictly control the transaction scale of forward foreign exchange settlement and sales. (III) operational risk
If the operator fails to communicate with banks and other financial institutions in time when the company carries out forward foreign exchange settlement and sales transactions, it may miss better trading opportunities; The operator fails to report and approve according to the specified procedures, or fails to accurately, timely and completely record the business information, which may lead to transaction loss or loss of transaction opportunities. In view of this risk, the company has formulated a standardized business operation process and authorization management system, equipped with full-time personnel, clarified the post responsibilities, and strictly engaged in the business of long-term settlement and sales of foreign exchange within the scope of authorization. At the same time, the company has formulated the management system for long-term foreign exchange settlement and sales, which clearly stipulates the operation principle, approval authority, organization and its responsibilities and implementation process of long-term foreign exchange settlement and sales, and plays a guarantee role in the risk control of long-term foreign exchange settlement and sales. (IV) performance risk
The counterparties of the company’s forward foreign exchange settlement and sales transactions are financial institutions with good credit and have established long-term business contacts with the company, with low performance risk. In order to prevent this risk, the company will strengthen the management of bank accounts and funds, and strictly control the approval procedures for fund allocation and use. (V) legal risks
If the operator fails to fully understand the terms of the financial derivatives trading contract and business information, it will bring legal risks and trading losses to the company. In view of this risk, the company will strengthen the business training and professional ethics of relevant personnel, improve the quality of relevant personnel, and establish a timely reporting system of abnormal conditions to avoid the occurrence of operational risks to the greatest extent. 5、 Accounting principles for carrying out forward foreign exchange settlement and sales business
The company and its subsidiaries conduct corresponding accounting and disclosure of forward foreign exchange settlement and sales business in accordance with the relevant provisions and guidelines of accounting standards for Business Enterprises No. 24 – hedge accounting, accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments and accounting standards for Business Enterprises No. 37 – presentation of financial instruments issued by the Ministry of finance. The final accounting treatment shall be subject to the accounting statements audited and confirmed by the company’s annual audit institution. 6、 Deliberation procedures (I) deliberation procedures of the board of directors and the board of supervisors
The 10th meeting of the 4th board of directors and the 10th meeting of the 4th board of supervisors of the company deliberated and adopted the proposal on carrying out long-term foreign exchange settlement and sales business, and agreed that the company and its subsidiaries should carry out long-term foreign exchange settlement and sales business with banks and other financial institutions in combination with the actual production and operation needs. This proposal needs to be submitted to the general meeting of shareholders for deliberation. (II) opinions of independent directors
The independent directors of the company expressed their independent opinions on the proposed long-term settlement and sales of foreign exchange, Think: “In order to lock in costs, reduce some exchange gains and losses, reduce financial expenses and make the company focus on production and operation, the company and its subsidiaries decided to carry out forward foreign exchange settlement and sales business with banks for exchange hedging, so as to reduce costs and operational risks. This item complies with the requirements of relevant laws and regulations, normative documents, articles of association and relevant systems. The review procedure is legal and effective, and the company has In order to operate the long-term foreign exchange settlement and sales business, we have conducted strict internal evaluation and established corresponding supervision mechanism, which can effectively control risks, which is in line with the interests of the company and all shareholders and conducive to the long-term development of the company. Therefore, the independent directors agreed to the proposal on carrying out long-term foreign exchange settlement and sales business and submitted it to the general meeting of shareholders of the company for deliberation.
”7、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the company’s long-term settlement and sales of foreign exchange has been deliberated and approved by the board of directors and the board of supervisors, and the independent directors have recognized and expressed their consent. It still needs to be submitted to the general meeting of shareholders for deliberation, has fulfilled the necessary approval procedures, and the voting procedures are in compliance with the law. The company has formulated the management system of long-term foreign exchange settlement and sales business according to relevant regulations and actual conditions, and formed a relatively perfect internal control system for the long-term foreign exchange settlement and sales business. The company carries out the long-term foreign exchange settlement and sales business to reduce costs and operational risks, which is in line with the interests of the company and all shareholders and conducive to the long-term development of the company.
In conclusion, the recommendation institution has no objection to the company’s long-term foreign exchange settlement and sales this time.
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(there is no text on this page, which is the signature and seal page of Citic Securities Company Limited(600030) verification opinions on Wuxi Lead Intelligent Equipment Co.Ltd(300450) carrying out forward foreign exchange settlement and sales business) signature of the sponsor representative:
Miao Tao, Xu Jiawei
Citic Securities Company Limited(600030) mm / DD / yy
