Sanyou Corporation Limited(300932)
Feasibility analysis report on carrying out commodity futures hedging business in 2022 I. purpose of carrying out commodity futures hedging business
The company's commodity futures hedging business is mainly to make full use of the hedging function of the futures market, effectively control market risks, reduce the impact of market price fluctuations of raw materials on the company's production and operation costs and the price of main products, improve the company's overall ability to resist risks and enhance financial stability.
2、 Basic information of commodity futures hedging business
1. Mainly related to business varieties
The hedging futures of the company are limited to the raw materials directly related to the production and operation of the company traded in the on-site market, and are limited to electrolytic copper and silver.
2. Business period: March 4, 2022 to March 3, 2023.
3. Business scale and source of investment
The company uses its own funds to carry out commodity futures hedging business with a maximum margin balance of no more than 20 million yuan. Within the above scope, the funds can be recycled. The source of funds is self owned funds and does not involve raised funds. If the duration of a single transaction exceeds the validity of the resolution, the validity of the resolution shall be automatically extended until the termination of the single transaction.
3、 Risk analysis of commodity futures hedging business
The company does not conduct futures hedging business for the purpose of speculation and arbitrage. The main purpose is to effectively avoid the impact of raw material price fluctuations on the company, but there will also be certain risks, as follows:
1. Price fluctuation risk: when the futures market fluctuates sharply, the company may not be able to buy hedging at the price required to be locked or close its position at the predetermined price, resulting in losses.
2. Capital risk: the hedging transaction issues operation instructions according to the authority specified in the company's futures hedging business management system (Revised Version). If the investment amount is too large, it may cause capital liquidity risk. In addition, when the futures price fluctuates greatly, the company may even have the risk of being forced to close its position without timely replenishing the margin, resulting in actual losses.
3. Internal control risk: hedging transactions are highly professional and complex, which may lead to risks caused by imperfect internal control system.
4. Counterparty default risk: when the futures price fluctuates unfavourably, the client's counterparty may violate the relevant provisions of the contract and cause losses to the company.
5. Technical risk: due to uncontrollable or unpredictable system, network and communication failures, the trading system operates abnormally, resulting in problems such as delay, interruption or data error of trading instructions, resulting in corresponding risks. 6. Policy risk: if there are significant changes in the laws, regulations and policies of the country or region where the derivatives market and the hedging transaction business entity are located, the market may fluctuate or cannot be traded, resulting in relevant risks. 4、 Risk control measures taken by the company
In order to cope with the above risks brought by commodity futures hedging business, the company takes the following risk control measures: 1. Match commodity futures hedging business with the company's production and operation, strictly control futures positions, continue to optimize the combination of hedging scale and duration, and hedge the risk of price fluctuation to the greatest extent.
2. Strictly control the capital scale of commodity futures hedging, reasonably plan and use futures margin, issue operation instructions in strict accordance with the provisions of the company's futures hedging business management system (Revised Draft), and conduct corresponding operations according to the approval authority. At the same time, strengthen the internal control of fund management and shall not exceed the margin approved by the board of directors of the company.
3. The company has formulated the futures hedging business management system (Revised Version) as the hedging internal control management system, guided the specific business operation in combination with the actual situation of the company, strengthened the professional knowledge training of relevant personnel and improved the professional quality of hedging practitioners. At the same time, establish a timely reporting system for abnormal conditions and form an efficient risk handling procedure.
4. In the process of business operation, strictly abide by the provisions of relevant laws and regulations, prevent legal risks, and regularly supervise and inspect the standardization of hedging business and the effectiveness of internal control mechanism.
5. The financial department of the company is responsible for reviewing the actual operation, capital use and profit and loss of commodity futures hedging business, and conducting business operations in strict accordance with the provisions of the management system of futures hedging business (Revised Draft), so as to effectively ensure the implementation of the system.
5、 Accounting policies and accounting principles
The relevant accounting policies and accounting principles for the company's futures hedging business will be implemented in strict accordance with the relevant provisions of the accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments and the accounting standards for Business Enterprises No. 24 - hedging issued by the Ministry of finance of the people's Republic of China.
6、 Feasibility analysis
1. The futures management team of the company, which is authorized by the board of directors of the company to organize and establish, as the management department engaged in the futures hedging business of the company, operates in accordance with the relevant provisions and processes of the management system for futures hedging business (Revised Version) of the company.
2. The company's current self owned capital scale can support the total margin of futures hedging business this year. 3. The company has formulated the management system for futures hedging business (Revised Version) as the internal control and risk management system for futures hedging business, which clearly stipulates the amount of margin used in hedging business, the variety and scope of hedging business, the approval authority, the responsible department and person, the internal risk reporting system and risk handling procedures, It can effectively ensure the smooth progress of futures business and effectively control risks. The targeted risk control measures taken by the company are feasible, and it is feasible to carry out futures hedging business. 7、 Feasibility analysis conclusion of the company's futures hedging business
The relevant approval procedures for the futures hedging business carried out by the company with its own funds comply with the relevant provisions of relevant national laws and regulations; The company has established a sound organizational structure for futures hedging transactions, and formulated business operation process, approval process and futures hedging business management system (Revised Draft); On the premise of ensuring normal production and operation, the company uses its own funds to carry out futures hedging trading business, which is conducive to improving the operating efficiency of the company and does not damage the interests of the company and all shareholders.
February, 2002
