Securities code: 600673 securities abbreviation: Guangdonghectechnologyholdingco.Ltd(600673) No.: Lin 2022-15 bond Code: 163049 bond abbreviation: 19 dongke 02
Guangdonghectechnologyholdingco.Ltd(600673)
Announcement on carrying out futures hedging business
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents. Guangdonghectechnologyholdingco.Ltd(600673) (hereinafter referred to as “the company”) held the 12th meeting of the 11th board of directors on February 14, 2022, deliberated and adopted the proposal on developing futures hedging business. The relevant information is hereby announced as follows:
1、 Purpose of hedging
In order to avoid the operating risks brought by the price fluctuation of raw materials to the company, the company decided to use the hedging function of futures instruments, and the subsidiaries of the company chose the opportunity to carry out futures hedging business, control the company’s production costs, effectively avoid the risk of market price fluctuation, and ensure the steady development of its main business.
2、 Basic information of hedging business
The transaction varieties of this hedging business are limited to the varieties of raw materials related to the production and operation of the company, including but not limited to aluminum ingots. The amount of margin for hedging business shall not exceed RMB 200 million, and the investment period shall be 12 months from the date of deliberation and approval by the board of directors. The above amount can be recycled and rolled during the investment period. The source of funds is the company’s own funds and does not involve raised funds.
3、 Risks faced by hedging
1. Market risk: if there is a systematic risk in the market and the futures price deviates from the trend of spot price, it may cause trading losses.
2. Policy risk: if there is a significant change in the relevant laws and regulations and policies of the futures market, it may lead to the risk that the market will fluctuate violently or cannot be traded.
3. Liquidity risk: if the contract activity is low, the hedging position cannot be traded or cannot be traded at an appropriate price, resulting in a large deviation between the actual transaction result and the scheme design, resulting in transaction losses.
4. Operational risk: futures trading is highly professional and complex, which may lead to risks caused by imperfect internal control system or operational errors.
5. Technical risk: due to uncontrollable and unpredictable system failure, network failure and communication failure, the trading system operates abnormally, causing problems such as delay, interruption or data error of trading instructions, resulting in corresponding risks.
4、 Risk control measures for hedging
1. Strictly implement relevant laws and regulations, establish effective supervision and inspection, risk control and trading stop loss mechanism, and handle the company’s futures hedging business within the authority approved by the board of directors.
2. While formulating the transaction plan, do a good job in fund calculation to ensure sufficient available funds; Strictly control the capital scale of hedging, reasonably plan and use funds, and achieve reasonable stop loss in case of severe market fluctuations, so as to effectively avoid risks.
3. Reasonably set up the company’s futures business organization, establish a post responsibility system, and clarify the responsibilities and authorities of relevant departments and posts. At the same time, improve the professional knowledge of relevant personnel, regularly organize business related job training, strengthen business process learning, increase risk management and prevention awareness, and improve the professional quality of employees.
4. According to business needs, arrange designated personnel in the company’s competent financial department to conduct account processing, fund allocation, track account settlement, report the use of funds to the superior competent leaders, and improve the internal fund supervision mechanism.
5. Follow the principles of locking project profits and hedging, and do not engage in speculative and arbitrage futures trading. Closely track the market changes, pay attention to the price trend, reasonably plan and arrange the use of margin, and reduce the transaction risk as much as possible.
5、 Opinions of independent directors
We believe that under the premise of ensuring normal production and operation, the company’s subsidiaries use their own funds to carry out aluminum futures hedging plan this time, which is conducive to making full use of the hedging function of the futures market, reducing the possible operating risks caused by the price fluctuation of raw materials in the market, and improving the company’s overall ability to resist risks. The futures varieties of this business are related to the production and operation of the company, and there is no damage to the interests of the company and all shareholders. The deliberation and decision-making procedures of this matter comply with the relevant provisions and requirements of the stock listing rules of Shanghai Stock Exchange and the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 5 – transactions and related party transactions; Agree that the company use its own funds to carry out aluminum futures hedging business, and request the company to carry out relevant business in strict accordance with the Guangdonghectechnologyholdingco.Ltd(600673) hedging business management system formulated by the company.
It is hereby announced.
Guangdonghectechnologyholdingco.Ltd(600673) February 15, 2022
