Securities code: 002825 securities abbreviation: Shanghai Nar Industrial Co.Ltd(002825) Announcement No.: 2022-011 Shanghai Nar Industrial Co.Ltd(002825)
Announcement on carrying out futures hedging business in 2022
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.
Shanghai Nar Industrial Co.Ltd(002825) (hereinafter referred to as "the company") held the 18th meeting of the 4th board of directors and the 18th meeting of the 4th board of supervisors on February 22, 2022, deliberated and adopted the proposal on carrying out commodity futures hedging business in 2022 and the feasibility analysis report on carrying out commodity futures hedging business prepared by the company. According to the actual needs of the business, Without affecting the normal operation and legal compliance of operation, it is agreed that the company and its subsidiaries (including wholly-owned subsidiaries, holding subsidiaries and other subsidiaries within the scope of consolidated statements, hereinafter collectively referred to as "subsidiaries") use their own funds to carry out commodity futures hedging business of raw materials and related materials. According to the Listing Rules of Shenzhen Stock Exchange and the articles of association, this matter does not need to be submitted to the general meeting of shareholders for deliberation. The details are hereby announced as follows:
1、 Basic information of commodity futures hedging business
1. Investment purpose
Make full use of the hedging function of the futures market to effectively control market risks, avoid the adverse impact of large-scale fluctuations in raw material prices on the operation of the company and its subsidiaries, reduce losses caused by adverse changes in commodity prices, improve the company's overall ability to resist risks and promote the stable and healthy development of the company.
The commodity futures hedging business to be carried out by the company and its subsidiaries is limited to products related to production and operation, without speculative transactions, which will not affect the normal development of the company's main business.
2. Investment quota and capital source
Within 12 months, the maximum margin of the commodity futures hedging business to be carried out by the company and its subsidiaries shall be RMB 30 million (excluding the physical delivery of the subject matter of the futures). The trading amount at any point in the term (including the relevant amount of reinvestment of the income of the above investment) shall not exceed the securities investment limit and can be recycled within the limited limit. The source of funds is the company's own funds and does not involve raised funds.
The varieties of commodity futures hedging business carried out by the company and its subsidiaries are resin powder directly related to the production and operation of the company.
4. Investment period
Within 12 months from the date of deliberation and approval by the board of directors of the company.
2、 Risk analysis of commodity futures hedging business
Commodity futures hedging can effectively manage the purchase price risk of raw materials, especially reduce the value loss caused by higher inventory when the price of raw materials falls sharply, and reduce the opportunity loss of unable to build a warehouse quickly due to the shortage of market supply when the price of raw materials rises sharply. However, there are certain risks in the development of commodity futures hedging business:
1. Risk of abnormal price fluctuation: theoretically, when all futures trading varieties are close to the delivery period, the futures market price and spot market price will tend to return to the same. However, in a very few irrational market situations, the futures and spot prices may still not return during the delivery period, which will affect the company's hedging operation plan and even cause losses.
2. Capital risk: futures trading adopts margin and mark to market system. When the market changes sharply, it may cause capital liquidity risk, and there may be actual losses caused by forced closing positions due to lack of time to supplement margin.
3. Internal control risk: hedging transactions are highly professional and complex, which may lead to risks caused by imperfect internal control system.
4. Technical risk: technical risk may be caused by incomplete computer system.
5. Policy risk: major changes in futures market laws and regulations and other policies may cause market fluctuations or inability to trade, resulting in risks.
3、 Risk control measures taken by the company
1. The company has formulated the futures hedging business management system, which clearly stipulates the approval authority, operation process, risk control, information disclosure and other aspects of the company's commodity futures hedging business. All measures are practical and effective, can meet the needs of actual operation, and meet the relevant requirements of the regulatory authorities. 2. The company's commodity futures hedging business scale will match the company's business operation to hedge the risk of price fluctuation to the greatest extent. Commodity futures hedging transactions are limited to commodity futures related to the company's production and operation business.
3. The company opens a commodity futures hedging trading account in its own name, uses its own funds, does not vary the fluctuation range, strictly controls the capital scale of commodity futures hedging, reasonably plans and uses the margin, supervises and controls the investment proportion of the margin, continuously pays attention to the risk degree of the futures account during the position holding process, and makes preparations for additional margin, A certain proportion of risk reserve shall be reserved to ensure that the margin is replenished in time in case of losses in the hedging process of the current period, so as to avoid being forced to close the position when the funds in the futures account cannot meet and maintain the hedging position; When the market fluctuates violently, close the position in time to avoid risks.
4. The company will arrange and use professionals in strict accordance with the relevant internal control system, establish a strict authorization and post restraint mechanism, strengthen the professional ethics education and business training of relevant personnel, and improve the comprehensive quality of relevant personnel.
5. The Audit Department of the company shall regularly and irregularly inspect the commodity futures hedging trading business, supervise the commodity futures hedging trading business personnel to implement the risk management system and risk management procedures, and timely prevent the operational risks in the business.
4、 Impact of the proposed commodity futures hedging business on the company
The commodity futures hedging business proposed by the company and its subsidiaries is limited to products related to production and operation. The purpose is to use the price discovery and risk hedging functions of the futures market, use hedging tools to avoid the risk of market price fluctuation, ensure the stability and sustainability of the company's operating performance, and do not engage in speculative transactions, It will not affect the normal development of the company's main business.
The commodity futures hedging trading varieties to be carried out by the company and its subsidiaries are the mainstream varieties in the main futures market, with high market transparency and active transactions. The transaction price and the settlement unit price on that day can fully reflect its fair value. The company determines the fair value of commodity 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, accounting standards for Business Enterprises No. 37 - presentation of financial instruments and accounting standards for business enterprises No. 39 - fair value measurement issued by the Ministry of finance, Conduct corresponding accounting treatment and disclosure for the commodity futures hedging business to be carried out.
5、 Feasibility analysis of carrying out commodity futures hedging business
The company and its subsidiaries carry out commodity futures hedging business to avoid or reduce losses caused by adverse changes in commodity prices, reduce the impact of adverse changes in commodity prices on the normal operation of the company, and do not carry out speculative arbitrage transactions; The company has established a relatively perfect internal control system and risk management mechanism, and has its own funds matching the commodity futures hedging business; Carry out business in strict accordance with relevant laws and regulations, implement risk prevention measures and operate prudently.
Therefore, the company believes that it is feasible to carry out commodity futures hedging business. 6、 Approval procedures and opinions for commodity futures hedging business this time
1. Deliberations of the board of directors
On February 22, 2022, the 18th meeting of the Fourth Board of directors of the company deliberated and approved the proposal on carrying out commodity futures hedging business in 2022, and agreed that the maximum amount of margin for commodity futures hedging business to be carried out by the company and its subsidiaries is RMB 30 million (excluding the physical delivery of futures subject matter), which can be recycled within the limited amount, The term of validity shall be valid within 12 months from the date of deliberation and approval by the board of directors of the company.
2. Opinions of the board of supervisors
Based on normal production and operation, the company carries out commodity futures hedging business on the premise of ensuring normal production and operation, which is conducive to avoiding the adverse impact of sharp fluctuations in raw material prices on the operation of the company and its subsidiaries, reducing losses caused by adverse changes in commodity prices and improving the overall risk resistance of the company, There is no situation that damages the interests of the company and shareholders. The board of supervisors approved the company to carry out commodity futures hedging business in 2022.
3. Opinions of independent directors
The company has established and improved relevant internal control systems, and implemented risk prevention measures to control derivatives investment risks by strengthening internal management; The company's commodity futures hedging business meets the needs of actual operation, can avoid the price fluctuation risk of raw materials to a certain extent, reduce the production and operation risk, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. The decision-making and deliberation procedures of this matter comply with the provisions of relevant laws, regulations and normative documents such as the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 7 - transactions and connected transactions.
The independent directors agreed to the proposal on carrying out commodity futures hedging business in 2022.
4. Opinions of the sponsor
After verification, the recommendation institution believes that it is necessary for the company to carry out commodity futures hedging business on the premise of ensuring normal production and operation, which is conducive to reducing the impact of price fluctuations, better avoiding the risks brought by raw material price fluctuations to the company's operation and reducing the impact of price fluctuations on the company's business performance. The company has formulated the management system of futures hedging business in accordance with the provisions of relevant laws and regulations, and established a relatively perfect internal control and risk management system of commodity futures hedging business. The above matters have been deliberated and approved by the board of directors and the board of supervisors of the company. The independent directors have expressed their explicit consent to the matter and fulfilled the necessary examination and approval procedures, Comply with the provisions of the company law, the Listing Rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 7 - transactions and related party transactions, and the articles of association. In conclusion, Haitong Securities Company Limited(600837) has no objection to the company's commodity futures hedging business in 2022.
7、 Documents for future reference
1. Resolutions of the 18th meeting of the 4th board of directors;
2. Resolutions of the 18th meeting of the 4th board of supervisors;
3. Independent opinions of independent directors on matters related to the 18th meeting of the Fourth Board of directors of the company; 4. Haitong Securities Company Limited(600837) verification opinions on carrying out commodity futures hedging business in Shanghai Nar Industrial Co.Ltd(002825) 2022.
It is hereby announced.
Shanghai Nar Industrial Co.Ltd(002825) board of directors February 22, 2022
