Stock Code: Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) stock abbreviation: Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) Announcement No.: 2022008 Shandong Hongchuang Aluminum Industry Holding Company Limited(002379)
Announcement on the foreign exchange hedging business carried out by the company and its subsidiaries
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.
Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) (hereinafter referred to as "the company") held the 6th meeting of the 5th board of directors on February 25, 2022, deliberated and adopted the proposal on the company and its subsidiaries to carry out foreign exchange hedging business. In order to reduce the risk of exchange rate fluctuation and realize stable operation, It is agreed that the company and its subsidiaries use their own funds to carry out foreign exchange hedging business with a total amount of no more than RMB 80 million (or equivalent in other currencies), and the authorization period is 12 months from the date of deliberation and approval by the board of directors of the company. In accordance with the relevant provisions of the Listing Rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of listed companies on the main board and the articles of association, the above foreign exchange hedging business matters shall be implemented after being deliberated and approved by the board of directors of the company, and need not be submitted to the general meeting of shareholders for deliberation. The details are as follows:
1、 Necessity of carrying out foreign exchange hedging business
The company's export business is mainly settled in US dollars. Therefore, when the exchange rate fluctuates greatly, the exchange profit and loss will have a great impact on the company's operating performance. Therefore, developing foreign exchange hedging business, strengthening the company's exchange rate risk management and reducing the exchange rate risk of enterprises in the foreign currency economic environment have become the urgent and internal needs of enterprises for stable operation. Based on this, the company carries out foreign exchange hedging business to avoid foreign exchange market risks, lock exchange costs to the greatest extent and prevent potential adverse effects of exchange rate fluctuations on the company.
2、 Foreign exchange hedging business
The board of directors of the company authorizes the management of the company and its subsidiaries to carry out foreign exchange hedging business, and operate and manage foreign exchange hedging business in accordance with the relevant provisions and processes of the hedging business management system formulated by the company.
1. Total scale and transaction types of foreign exchange hedging business
The foreign exchange hedging business of the company and its subsidiaries is limited to the main settlement currency used in production and operation. The main foreign currency currency is US dollars. The total holding of foreign exchange hedging to be implemented at any time point does not exceed 80 million yuan or equivalent foreign currency. Within the approval period, the above amount can be used on a rolling basis. The foreign exchange hedging business conducted by the company and its subsidiaries includes but is not limited to forward foreign exchange settlement and sales, foreign exchange swap, foreign exchange option, currency swap, interest rate swap, interest rate option, etc. or a combination of the above products.
2. Source of funds
The source of funds for the foreign exchange hedging business of the company and its subsidiaries is its own funds, which does not involve raised funds. 3. Authorization and business period
The board of directors of the company authorizes the management of the company and its subsidiaries to implement the above matters related to foreign exchange hedging business. The authorization period for the company and its subsidiaries to carry out foreign exchange hedging business shall be valid within 12 months from the date of deliberation and approval by the board of directors.
4. Counterparty
The counterparties of the company and its subsidiaries in foreign exchange hedging business are banks and other financial institutions.
5. Liquidity arrangements
All foreign exchange capital businesses correspond to normal and reasonable business background, match the collection and payment time, and will not have a significant adverse impact on the company's liquidity.
3、 Risk analysis of foreign exchange hedging business
The company and its subsidiaries conduct foreign exchange hedging business in accordance with the principles of legality, prudence, safety and effectiveness, and do not conduct foreign exchange transactions for the purpose of speculation. All foreign exchange hedging business is based on normal production and operation, with the purpose of avoiding and preventing exchange rate risks. Foreign exchange hedging business can reduce the impact of exchange rate fluctuations on the company in case of significant exchange rate fluctuations. At the same time, foreign exchange hedging business will also have certain risks: 1. Exchange rate fluctuation risk: in the case of large changes in the exchange rate market, the quotation of the bank's settlement and sales exchange rate may be quite different from the expected quotation exchange rate of the company, so that the company cannot lock according to the quotation exchange rate, resulting in exchange losses.
2. Internal control risk: foreign exchange hedging business is highly professional and complex, which may cause risks due to imperfect internal control system.
3. Legal risk: the risk of loss to the company due to the change of relevant laws and regulations or the counterparty's violation of relevant laws and regulations.
4、 Risk control measures taken by the company
1. In carrying out foreign exchange hedging business, the company and its subsidiaries will follow the principle of hedging for the purpose of locking exchange rate risk, and will not carry out speculation and arbitrage transactions. All foreign exchange transactions are based on normal production and operation, relying on specific business operations, taking hedging as a means to avoid and prevent exchange rate risk.
2. The company has formulated the hedging business management system, which clearly stipulates the operation principle, approval authority, organization and its responsibilities, decision-making procedures, information isolation measures, internal risk reporting system and risk handling procedures of the company's foreign exchange hedging business. The system meets the relevant requirements of regulatory authorities and meets the needs of practical operation, The risk control measures formulated are practical and effective.
3. In order to avoid the risk of sharp fluctuation of exchange rate, the company will strengthen the research and analysis of exchange rate, pay real-time attention to the changes of international market environment, adjust business strategy in time, and avoid exchange loss to the greatest extent.
4. The internal audit department of the company will regularly and irregularly check the signing and implementation of actual transaction contracts.
5、 Accounting policies and accounting principles
According to 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, the company will conduct corresponding accounting treatment for the foreign exchange hedging business carried out and correctly present it in the financial report.
6、 Opinions of independent directors of the company
The company and its subsidiaries carry out foreign exchange hedging business in order to effectively prevent and resolve the market risks caused by exchange rate changes, reduce the company risks caused by exchange rate price fluctuations, and reduce the impact of exchange rate fluctuations on the normal operation of the company. This is a necessary means to protect the normal operating profits, not just speculation and arbitrage transactions for the purpose of profit. The company has formulated the hedging business management system and improved the relevant internal control processes, and the targeted risk control measures taken by the company are feasible and effective; If the company intends to carry out hedging business with its own funds and its subsidiaries, it will not use its own funds for hedging business at the same time. The foreign exchange hedging business carried out by the company and its subsidiaries will comply with the provisions of relevant laws, regulations, normative documents and relevant systems of the company. We believe that the foreign exchange hedging business carried out by the company and its subsidiaries is in line with the interests of the company and all shareholders, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders. Therefore, we agree that the company and its subsidiaries carry out foreign exchange hedging business.
7、 Filing documents
1. Resolution of the 5th meeting of the board of directors;
2. Independent opinions of independent directors on matters related to the sixth meeting of the Fifth Board of directors of the company. It is hereby announced.
Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) board of directors
February 28, 2002
