Securities code: Shandong Humon Smelting Co.Ltd(002237) securities abbreviation: Shandong Humon Smelting Co.Ltd(002237) Announcement No.: 2022017 Shandong Humon Smelting Co.Ltd(002237)
Announcement on carrying out 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.
Important content tips:
1. Investment type: Shandong Humon Smelting Co.Ltd(002237) (hereinafter referred to as "the company") mainly engaged in commodity hedging business, including delayed delivery business of gold and silver in Shanghai Gold Exchange and gold futures contract, copper futures contract, silver futures contract, lead futures contract, zinc futures contract, gold option and copper option in Shanghai Futures Exchange; Copper futures contract and lead futures contract on the London Metal Exchange, gold futures contract and silver futures contract on the New York Mercantile futures exchange.
2. Investment amount: the company's 2022 futures hedging uses the company's own funds to invest no more than 110 million yuan. The limit can be recycled within 12 months after it is considered and approved by the general meeting of shareholders. If the amount of deposit to be invested exceeds 110 million yuan, it shall be reported to the board of directors, which shall operate in accordance with the company's hedging business management system after approval in accordance with the articles of association and relevant internal control systems.
3. Special risk tips: the company carries out hedging business on the principle of engaging in hedging and not for the purpose of arbitrage and speculation. It is mainly used to avoid risks caused by irregular fluctuations in the prices of gold, silver, copper, lead and other commodities, but there are also certain risks.
On March 21, 2022, the 13th meeting of the ninth board of directors of the company deliberated and approved the proposal on carrying out hedging business in 2022, and agreed that the company's own fund investment for futures hedging in 2022 should not exceed 110 million yuan. The quota can be recycled within one year from the date of deliberation and approval of the company's 2021 annual general meeting of shareholders.
According to the provisions of relevant laws and regulations such as the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies No. 1 - standardized operation of listed companies on the main board, the hedging business and authorized amount shall be submitted to the shareholders' meeting of the company for deliberation and approval before implementation.
1、 Purpose of hedging
Gold, silver, copper and lead are the main products of the company and the main profit source of the company. The main purpose of the company to carry out the hedging business of gold, silver, copper and lead products is to use hedging tools to avoid the business risks brought to the company by market price fluctuations, lock in the expected profits of some products, reduce the losses caused by adverse changes in commodity prices and improve the overall risk resistance of the company, Promote the stable and healthy development of the company.
2、 Types of business carried out
The main types of commodity hedging business of the company are the delayed delivery business of gold and silver of Shanghai Gold Exchange and the gold futures contract, copper futures contract, silver futures contract, lead futures contract, zinc futures contract, gold option and copper option of Shanghai Futures Exchange; Copper futures contract and lead futures contract on the London Metal Exchange, gold futures contract and silver futures contract on the New York Mercantile futures exchange.
3、 Investment and business period
The company's 2022 futures hedging uses the company's own funds to invest no more than 110 million yuan. The limit can be recycled within 12 months after it is considered and approved by the general meeting of shareholders. If the amount of deposit to be invested exceeds 110 million yuan, it shall be reported to the board of directors, which shall operate in accordance with the company's hedging business management system after approval in accordance with the articles of association and relevant internal control systems.
4、 Risk analysis of hedging business
1. Price fluctuation risk: the futures market changes greatly, which may lead to price fluctuation risk and investment loss. 2. Capital risk: futures trading adopts margin and mark to market system. When the market changes sharply, there may be actual losses caused by forced closing positions due to lack of time to supplement margin.
3. Technical risk: there may be technical failures in the quotation system and order system, resulting in failure to obtain the quotation or order.
4. Internal control risk: futures trading is highly professional and complex, which may cause risks due to imperfect internal control system.
5. Credit risk: when the transaction price fluctuates significantly against the counterparty, the counterparty may violate the relevant provisions of the contract, cancel the contract and cause losses to the company.
6. Policy risk: major changes in futures market laws and regulations may cause market fluctuations or inability to trade, resulting in risks.
5、 Risk control measures taken by the company
1. Clarify the trading principle: match the hedging business with the company's production and operation to hedge the risk of price fluctuation to the greatest extent.
2. Clarify the transaction amount: strictly control the capital scale of hedging, reasonably plan and use the margin, issue operation instructions in strict accordance with the authority specified in the company's hedging business management system, and operate only after approval according to the regulations.
3. Clarify the trading system: the company has formulated and improved the hedging business management system, which clearly stipulates the hedging amount, variety, approval authority, organization, responsible department and person in charge, authorization system, business process, risk management system, reporting system, file management, etc.
4. Professional personnel management: in combination with specific business operations, allocate special personnel to be responsible for derivatives transactions, continuously strengthen the professional knowledge training of relevant personnel in daily operation, and improve the professional quality of hedging practitioners. 5. Supporting hardware facilities: set up computer, communication and information service facilities that meet the requirements to ensure the normal operation of the trading system and the normal development of trading work. In case of wrong orders, take corresponding measures in time to reduce losses.
6、 Impact of hedging on the company
The company's hedging business is mainly to lock in the price fluctuation of the company's main products, effectively prevent market risks caused by product price changes, and reduce the impact of price fluctuations on the company's normal operation. The proposed business scale matches the current business situation and actual needs of the company and will not affect the normal business activities of the company. The company will conduct accounting treatment in accordance with the relevant provisions of the Ministry of finance, such as accounting standards for Business Enterprises No. 14 - revenue, 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, etc.
7、 Opinions of independent directors
Through reviewing the proposal on carrying out hedging business in 2022, we believe that the company's hedging business is carried out around the company's business, not solely for the purpose of profit, but on the premise of ensuring normal production and operation, it is necessary to lock in the company's expected profit of products, avoid and control business risks, and improve the company's ability to resist market risks, There is no situation that damages the interests of the company and all shareholders. The relevant approval procedures for the hedging business carried out by the company with its own funds comply with the relevant national laws and regulations and the relevant provisions of the articles of association. The company has established a sound organizational structure, business operation process, approval process and hedging business management system for the conduct of hedging business.
Therefore, we unanimously agree that the company will carry out hedging business in 2022 and agree to submit the proposal to the general meeting of shareholders for deliberation.
8、 Documents for future reference
1. Resolutions of the 13th meeting of the ninth board of directors of the company;
2. Independent opinions of independent directors on matters related to the 13th meeting of the ninth board of directors.
It is hereby announced.
Shandong Humon Smelting Co.Ltd(002237)
Board of directors
March 22, 2022
