Securities code: Nuode Investment Co.Ltd(600110) securities abbreviation: Nuode Investment Co.Ltd(600110) Announcement No.: pro 2022057 Nuode Investment Co.Ltd(600110)
Announcement on non ferrous futures hedging business in 2022
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents Nuode Investment Co.Ltd(600110) (hereinafter referred to as "the company") convened the 52nd meeting of the ninth board of directors on April 15, 2022, deliberated and adopted the proposal on the company's non-ferrous metal futures hedging business in 2022, and in accordance with the relevant provisions of the stock listing rules of Shanghai Stock Exchange, the Nuode Investment Co.Ltd(600110) articles of association and the Nuode Investment Co.Ltd(600110) measures for the administration of futures hedging, The company plans to open a special account for futures trading and pay the deposit, and authorize the futures leading group and the hedging management office to handle the implementation and other related matters within the limit. According to the provisions of the articles of association, this matter does not need to be submitted to the general meeting of shareholders for deliberation. The details are as follows:
1、 Purpose of hedging
According to the production, operation and development needs of the company, make full use of the function of the futures market to hedge the risk of sharp fluctuations in raw materials. Lock in operating profits, improve the operating level of the enterprise and ensure the healthy and sustainable operation of the enterprise. The company (including holding subsidiaries) plans to carry out futures hedging business for non-ferrous copper involved in relevant projects.
2、 How to carry out futures hedging
1. Futures: Copper
2. Investment scale: carry out hedging of purchase, marketing and production business, and the total position contract value shall not exceed RMB 1.28 billion or equivalent foreign currency amount. Non ferrous metal hedging business with a margin not exceeding RMB 256million or equivalent foreign currency amount.
3. Implementation subject: the company and its holding subsidiaries
4. Implementation period: the use period of the above quota is valid within 12 months from the date of deliberation and approval by the board of directors of the company in 2021. Within the validity period of the above quota and resolution, it can be recycled and rolled. 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 transaction.
3、 Risk analysis
The company (including its holding subsidiaries) does not carry out futures trading business for the purpose of speculation, mainly to avoid the impact of sharp fluctuations in product prices on the company, but there will also be certain risks:
1. Price fluctuation risk: when the futures market changes greatly, the company may not be able to buy hedging contracts at or below the locked price of materials;
2. Operational risk: non ferrous metal hedging is highly professional and complex, which may cause risks due to imperfect internal control mechanism;
3. Liquidity risk: the risk that the transaction cannot be completed due to insufficient market liquidity;
4. Performance risk: there is a risk of default due to failure to perform the contract upon expiration in carrying out non-ferrous metal hedging business;
5. Legal risk: due to the change of relevant laws or the violation of relevant legal systems by counterparties, the contract may not be executed normally and bring losses to the company.
4、 Risk control measures
1. Clarify the trading principles of non-ferrous metal hedging business: hedging business transactions shall be based on the principle of hedging, and timely adjust the operation strategy in combination with the market situation to improve the hedging effect.
2. System construction: the company has established the Nuode Investment Co.Ltd(600110) futures hedging management measures, which clearly stipulates the authorization scope, approval procedures, risk management and information disclosure of hedging transactions, which can effectively regulate the trading behavior of financial derivatives and control the trading risk of financial derivatives.
3. Product selection: before hedging business transactions, conduct comparative analysis between multiple counterparties and multiple products, and select the hedging tool that is most suitable for the company's business background, strong liquidity and controllable risk.
4. Counterparty Management: carefully select counterparties engaged in non-ferrous metal hedging business. The company only carries out non-ferrous metal hedging trading business with large futures brokerage companies with legal qualifications or financial institutions with legal qualifications to avoid possible legal risks.
5. Specially assigned person: the futures business leading group consists of futures trading department and futures management department. The futures trading department shall set up the post of trader. The futures management department has accounting and risk control posts and fund and finance specialist posts. The personnel of each post shall be separated effectively, and shall not cross or exercise duties beyond their authority, so as to ensure mutual supervision and restriction.
5、 Independent opinion
The independent directors of the company express the following opinions on the company's non-ferrous metal futures hedging business: 1. 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 national laws, regulations and the articles of association, and there is no situation that damages the interests of the company and all shareholders. 2. The company's futures hedging business can reduce the adverse impact of raw material price fluctuations on the company's production and operation through the hedging hedging mechanism, which is in line with the interests of the company and all shareholders.
3. The company has reviewed and approved the measures for the management of Nuode Investment Co.Ltd(600110) futures hedging, formulated specific operating procedures for the company to engage in hedging business, and implemented risk management measures by strengthening internal control.
Therefore, we agree with the company to carry out non-ferrous metal futures hedging business.
It is hereby announced.
Nuode Investment Co.Ltd(600110) board of directors April 19, 2022
