1. Purpose of Conducting Hedging Business
Nanjing Hanrui Cobalt Co., Ltd. (hereinafter referred to as "the Company") aims to conduct hedging business to reduce the impact of price fluctuations of raw materials or products and exchange rate fluctuations on its operations. The Company intends to fully utilize the hedging functions of the futures market to effectively control market risks, improve the efficiency of foreign exchange fund usage, manage financial costs, enhance overall risk resilience, and strengthen the stability and sustainability of its operational performance, aligning with its prudent risk management principles. The commodity futures hedging involves trading varieties related to the raw materials or products required for the Company's operations, such as copper, cobalt, and nickel. The risks hedged in the 2026 hedging transactions include reasonably avoiding price fluctuation risks related to copper, cobalt, and nickel, as well as preventing market risks arising from commodity price changes. The foreign exchange hedging products include forward foreign exchange contracts, foreign exchange swaps, foreign exchange options, currency swaps, interest rate swaps, interest rate options, or combinations of the aforementioned products. The risks hedged in the 2026 foreign exchange hedging transactions include exchange rate risks and interest rate risks.
2. Basic Information on Hedging Business
(1) Commodity Futures Hedging Business
- Transaction Amount: Based on the Company's operational and business needs, the maximum limit for transaction margin and premiums shall not exceed RMB 1 billion or its equivalent in other foreign currencies. The maximum contract value held on any trading day shall not exceed RMB 3.5 billion or its equivalent in other foreign currencies. The above trading limits can be recycled within the trading period, and the transaction amount at any point in time during the trading period (including amounts related to the proceeds from the aforementioned transactions) shall not exceed this trading limit.
- Trading Methods:
- Trading Varieties: Futures varieties related to the raw materials or products required for the Company's operations, such as copper, cobalt, and nickel.
- Trading Venue/Counterparty: Compliant trading venues both domestically and internationally. The primary goal of the related hedging business to be conducted overseas is to reasonably avoid price fluctuation risks related to copper, cobalt, and nickel, as well as to prevent market risks arising from commodity price changes.
- Trading Period: Valid for 12 months from the date of approval by the shareholders' meeting, with the limit being recyclable during the approval period. If the duration of a single transaction exceeds the validity period of the resolution, the validity period of the resolution will automatically extend until the transaction is completed, but no new transactions may be added during this period.
- Source of Funds: The funds for conducting the hedging business will be entirely from the Company's own and self-raised funds, without involving raised funds.