Securities code: 301037 securities abbreviation: Shanghai Baolijia Chemical Co.Ltd(301037) Announcement No.: 2021-047 Shanghai Baolijia Chemical Co.Ltd(301037)
Announcement on carrying out futures hedging business
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 Baolijia Chemical Co.Ltd(301037) (hereinafter referred to as "the company") held the fourth meeting of the third board of directors and the fourth meeting of the third board of supervisors respectively on December 30, 2021, deliberated and adopted the proposal on developing futures hedging business, and agreed that the company and its subsidiaries should carry out styrene, methanol and For the hedging business of polyolefin and other commodity futures, the validity period of the above quota is within 12 months after the deliberation and approval of the general meeting of shareholders, and the quota can be recycled and rolled within the validity period. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended to the termination of the transaction. According to the company's financial derivatives trading business management system, the proposal still needs to be submitted to the company's general meeting for deliberation. The specific contents are as follows: first, the purpose and necessity of hedging
The company's futures hedging business is mainly due to the fact that bulk commodities (styrene, methanol, polyolefin, etc.) are the raw materials required for the production of the company and its subsidiaries. The sharp fluctuation of the prices of styrene, methanol and polyolefin will have a certain impact on the company's raw material procurement cost. Therefore, it is necessary for the company to take active measures to make full use of the hedging function of the futures market, reduce the company's procurement risk, improve the company's overall risk resistance ability and enhance financial stability. 2、 Proposed hedging business
1. Trading varieties: trading varieties are limited to styrene, methanol, polyolefin and other futures varieties listed and traded in domestic futures exchanges related to raw materials required for the production of the company and its subsidiaries.
2. Business quota: the maximum amount of recyclable margin occupied in the development of futures hedging business shall not exceed (i.e. no more than) RMB 60 million at any time point.
3. Use period of the quota: the use period of the quota is within 12 months after it is deliberated and approved by the general meeting of shareholders. Within the validity period, the quota can be recycled and rolled. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended to the termination of the transaction.
4. Authorization and authorization period: in view of the close relationship between the above futures hedging business and the operation of the company, the general meeting of shareholders of the company is requested to authorize the general manager of the company to carry out the above futures hedging business within the above quota scope and quota use period.
5. Source of funds: the company will use its own funds for futures hedging business. 3、 Risk analysis of hedging business
The company's futures hedging business is not for profit, but mainly to improve the company's overall ability to resist risks and enhance financial stability, but there are certain risks at the same time, as follows:
1. Price fluctuation risk: the futures market changes greatly, which may produce price fluctuation risk and cause losses in futures trading.
2. Liquidity risk: there is liquidity risk in the implementation of hedging strategy. If the internal execution cost is very high or the liquidity of futures market is poor, it is difficult to implement hedging strategy, which will form exposure to market risk.
3. Operational risk: futures trading is highly professional and complex, which may lead to improper operation or operation failure due to imperfect internal control system, resulting in corresponding risks.
4. Technical risk: due to uncontrollable and unpredictable system failure, network failure and communication failure, the trading system operates abnormally, resulting in problems such as delay, interruption or data error of trading instructions, resulting in corresponding risks.
5. Policy risk: the risk of drastic changes or inability to trade in the futures market due to changes in national laws, regulations and policies, the revision of trading rules of futures exchanges and the introduction of emergency measures. 4、 Risk control measures taken by the company
1. The company has formulated the financial derivatives trading business management system in accordance with the Shenzhen Stock Exchange gem stock listing rules, Shenzhen Stock Exchange GEM listed companies standardized operation guidelines and other relevant provisions, and in combination with the actual situation of the company, which provides the approval authority, information disclosure and internal operation process of financial derivatives trading business Make clear provisions on risk management and handling procedures. The company will control all links, implement risk prevention measures and operate prudently in strict accordance with the provisions of the financial derivatives trading business management system.
2. The company will follow the principle of locking the price risk of raw materials and hedging, and operate only for the futures trading varieties related to the raw materials required for the production of the company and its subsidiaries, rather than speculative futures trading. 3. The company will strictly control the capital scale of hedging, reasonably plan and use the margin, and will not use the raised funds for futures hedging directly or indirectly.
4. The futures hedging business to be carried out by the company can only be carried out in the on-site market, not in the OTC market.
5. The Audit Department of the company shall regularly and irregularly inspect the hedging transaction business, supervise the hedging transaction business personnel to implement the risk management system and risk management procedures, and timely prevent operational risks in the business. 5、 Accounting policies and accounting principles
The company will conduct corresponding accounting and treatment for the futures hedging business to be carried out 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 - hedge accounting issued by the Ministry of finance of the people's Republic of China. Changes in the fair value of futures products used in futures hedging business will be included in the current profits and losses of the company, so as to increase or decrease the profits of the company. 6、 Relevant review and approval procedures 1. Opinions of the board of directors
The board of Directors believes that the company's futures hedging business is mainly to actively respond to the impact of the sharp fluctuations in the prices of styrene, methanol and polyolefin on the procurement cost of raw materials, which is conducive to reducing the company's procurement risk, improving the company's overall risk resistance ability and enhancing financial stability. Therefore, the board of directors agrees that the company and its subsidiaries shall conduct hedging business of styrene, methanol, polyolefin and other commodity futures within the maximum margin investment amount of no more than 60 million yuan. The validity period of the above quota is within 12 months after it is deliberated and approved by the general meeting of shareholders, and the quota can be recycled and rolled within the validity period. If the duration of a single transaction exceeds the authorization period, the authorization period will be automatically extended to the termination of the transaction. 2. Opinions of the board of supervisors
The board of supervisors believes that the relevant approval procedures for the company to carry out futures hedging business comply with relevant national laws and regulations and the provisions of the company's financial derivatives trading business management system, and corresponding risk control measures have been set, without damaging the interests of the company and all shareholders. 3. Opinions of independent directors
After verification, the independent directors believe that: according to their own business characteristics and the price fluctuation characteristics of raw materials, the company carries out raw material hedging business on the premise of ensuring normal production and operation, which is conducive to reducing the price fluctuation risk of raw materials, locking in the product cost of the company and controlling the business risk, and there is no situation damaging the interests of the company and all shareholders. The company has formulated the financial derivatives trading business management system, which defines the approval authority, information disclosure, internal operation process, risk management and handling procedures and other internal control procedures, so as to effectively control the risk. The relevant approval procedures for the company to use its own funds to carry out futures hedging business comply with the relevant provisions of relevant laws and regulations. Therefore, we unanimously agree that the company uses its own funds to carry out futures hedging business, and agree to submit the proposal to the general meeting of shareholders of the company for deliberation. 4. Verification opinions of the recommendation institution
After verification, the sponsor believes that the company's futures hedging business will help give full play to the futures hedging function, reduce the impact of the market price fluctuation of raw materials related to production and operation on the company's production and operation costs and the price of main products, improve the company's overall risk resistance and enhance financial stability. The deliberation and decision-making procedures of this matter comply with the provisions of relevant laws and regulations such as the Listing Rules of Shenzhen Stock Exchange gem (revised in 2020), the guidelines for the standardized operation of companies listed on Shenzhen Stock Exchange gem (revised in 2020) and the articles of association, and there is no damage to the interests of the company and all shareholders. In conclusion, the recommendation institution has no objection to the company's futures hedging business. 7、 Documents for future reference 1. Resolutions of the fourth meeting of the third board of directors; 2. Resolutions of the fourth meeting of the third board of supervisors;
3. Independent opinions of independent directors on matters related to the fourth meeting of the third board of directors; 4. Feasibility analysis report on carrying out futures hedging business; 5. Guotai Junan Securities Co.Ltd(601211) verification opinions on Shanghai Baolijia Chemical Co.Ltd(301037) carrying out futures hedging business.
It is hereby announced.
Shanghai Baolijia Chemical Co.Ltd(301037) board of directors December 31, 2021
