Securities code: 600132 securities abbreviation: Chongqing Brewery Co.Ltd(600132) Announcement No.: pro 2022-005 Chongqing Brewery Co.Ltd(600132)
Announcement on futures hedging business carried out by subsidiaries
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.
Important content tips:
Carlsberg Chongqing Brewery Co.Ltd(600132) (hereinafter referred to as “the company” or “the company”) holding subsidiary Carlsberg Chongqing Brewery Co.Ltd(600132) Co., Ltd. (hereinafter referred to as “Carlsberg heavy beer”) plans to carry out aluminum futures hedging business, which has been deliberated and adopted at the 23rd Meeting of the ninth board of directors held on February 16, 2022;
Authorize the futures hedging investment committee of the company to use its own funds not exceeding USD 70 million for hedging business, with a validity period of 12 months;
This matter has been deliberated and approved by the board of directors and needs to be submitted to the first extraordinary general meeting of shareholders in 2022 for approval. 1、 Purpose and necessity of hedging business
Aluminum is one of the important packaging materials related to beer production. Due to the continuous sharp fluctuation of aluminum market price, in order to ensure the relative stability of product cost and realize stable operation, Carlsberg heavy beer, a subsidiary of the company, plans to carry out aluminum futures hedging business to hedge the risk of raw material price fluctuation with the help of futures market.
2、 Overview of hedging business
(I) trading varieties: aluminum futures;
(II) scale: authorize the futures hedging investment committee of the company to carry out hedging business within the investment limit of no more than US $70 million;
(III) source of funds: self owned funds;
(IV) duration: the authorization period shall be valid within 12 months from the date of deliberation and approval by the general meeting of shareholders. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended to the termination of the single transaction
Time limit.
3、 Risk analysis of hedging business
The company’s futures hedging business is mainly to lock the price of raw materials in advance and stabilize the production cost. At the same time, there will be certain risks:
(I) market risk
Aluminum prices are highly volatile, and its price trend is not necessarily favorable to the company.
(II) policy risk
If there are significant changes in the relevant laws, regulations and policies of the futures market, there may be the risk of market fluctuation or inability to trade.
(III) performance risk
When the futures price fluctuates unfavourably, the counterparty may violate the contract and cause losses to the company.
(IV) technical risks
There may be uncontrollable or unpredictable system, network and communication failures, resulting in the normal operation of the trading system, resulting in problems such as delay, interruption or data error of trading instructions.
(V) foreign exchange risk
Hedging involves foreign currency settlement, which may cause exchange rate changes due to changes in the foreign exchange market, resulting in the risk of loss.
4、 Risk control measures taken by the company
In order to standardize the hedging business, the company has formulated the Chongqing Brewery Co.Ltd(600132) hedging business management system, and further formulated the implementation rules and work guidelines accordingly to strictly standardize all transactions in the process of hedging operation.
The company will carefully select futures brokerage companies or agencies before carrying out futures hedging business. Priority should be given to futures brokerage companies with strong strength, rich research resources, outstanding service ability and ranking in the forefront of the industry.
A futures hedging investment committee is established within the company to be specifically responsible for matters related to the company’s futures hedging business, and the risk control and internal audit department shall inspect the futures hedging business regularly or irregularly, supervise the futures hedging business personnel to implement risk management policies and risk management procedures, and prevent operational risks in the business in a timely manner. When the market price fluctuates greatly or there are abnormal fluctuations, such as the market value loss of the trading contract is close to or exceeds the stop loss limit, the futures hedging investment committee shall immediately convene a meeting to make a decision to reduce the company’s loss as much as possible.
5、 Accounting policies and accounting principles
The company will conduct corresponding accounting and disclosure of futures hedging business in accordance with the relevant provisions and guidelines of accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, accounting standards for Business Enterprises No. 24 – hedge accounting and accounting standards for Business Enterprises No. 37 – presentation of financial instruments issued by the Ministry of finance.
6、 Opinions of independent directors
The independent directors expressed independent opinions on the company’s subsidiary Carlsberg heavy beer’s plan to carry out aluminum futures hedging business: “In order to maintain the sustainable and steady operation of the company, Carlsberg heavy beer, a subsidiary of the company, will give priority to qualified brokerage companies or agencies according to the actual situation of production and operation, and carry out aluminum futures hedging business at the appropriate trading time and in the appropriate quantity proportion, so as to reduce the fluctuation of product cost caused by the price fluctuation of raw materials, ensure the relative stability of product cost and make progress The shareholders of Dongcai agree that it is not in line with the normal operation of the company’s hedging activities to protect the interests of the company and all shareholders of Dongcai from the fluctuation of the company’s futures market.
It is hereby announced.
Chongqing Brewery Co.Ltd(600132) board of directors
February 17, 2022
