Zhonghong Pulin Medical Products Co.Ltd(300981)
Derivatives investment management system
Chapter I General Provisions
Article 1 in order to regulate the management of Zhonghong Pulin Medical Products Co.Ltd(300981) (hereinafter referred to as “the company”) derivatives investment business for hedging purposes and strengthen risk control, in accordance with the company law, the securities law, the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on GEM and other laws This system is formulated in accordance with the relevant provisions of administrative regulations and the articles of association and in combination with the actual business situation of the company.
The derivatives mentioned in this system include commodity derivatives and foreign exchange derivatives, specifically refers to the products that are traded inside and outside the market or non traded, which are essentially futures, options, forwards, swaps and other products or a combination of the above products. The underlying assets of derivatives can include securities, indexes, interest rates, exchange rates, currencies, commodities and other objects, as well as the combination of the above-mentioned underlying assets; Either physical delivery or cash price difference settlement can be adopted; Either margin, credit line deduction or guarantee and mortgage can be used for leverage transactions, or unsecured and unsecured credit transactions can be used. Article 2 this system is applicable to the derivative investment of the company and its subordinate holding subsidiaries at all levels (hereinafter referred to as “subsidiaries”). Subsidiaries shall not invest in derivatives without the consent of the company. Article 3 the business type, product type, transaction amount and service life of derivatives investment must be within the scope of authorization of the company’s annual general meeting of shareholders and the board of directors.
Article 4 the general manager of the company is the general person in charge of derivatives investment, who shall examine and approve the derivatives investment business within the limit and authorize the specific person in charge of the derivatives investment business of the company and its subsidiaries.
Chapter II Risk Control of Derivative Investment
Article 5 the specific person in charge of the relevant business of the company and its subsidiaries shall submit the “application for annual authorized operation limit” of the next year to the general person in charge of derivative investment at the end of the current year, including but not limited to the “annual capital scale limit” of the proposed derivative investment business, the “annual position scale limit” of each variety and the operation mode.
The board of directors of the company shall review and approve derivatives investment within the scope of authority specified in the articles of association. Derivatives investment beyond its scope of authority shall be submitted to the general meeting of shareholders of the company for review and approval. The board of directors or the general meeting of shareholders of the company shall review and approve the annual estimated derivatives trading limit and disclose it. The balance at any time point (including the relevant amount of reinvestment of the proceeds of the above investment) shall not exceed the derivatives trading limit, the service life of the relevant limit shall not exceed 12 months, and the limit can be used circularly and continuously within the period.
Derivatives transactions between the company and related parties shall be submitted to the general meeting of shareholders for deliberation in addition to the deliberation and approval of the board of directors.
Before the company carries out commodity derivatives business, the internal control audit department is responsible for assessing the business risk of derivatives, analyzing the feasibility and necessity of the business, submitting it to the audit committee of the board of directors for review, and then submitting it to the board of directors or the general meeting of shareholders for review according to the approval authority.
The company implements authorization management for derivatives investment business. The general person in charge of derivatives investment issues a letter of authorization for derivatives investment business of the company and its subsidiaries every year, and achieves the goal of derivatives investment business management through the authorization management of trading, operation and settlement personnel. If the position of the authorized person changes, the authorized person of derivatives related business shall be adjusted in time.
Article 6 the daily management of commodity derivatives investment adopts the management mode of “division of labor and coordination between front and back offices”. The authorized trading order placing personnel accept the orders of the business department and the review of the trading review personnel at the same time. The authorized settlement personnel are responsible for summarizing the daily position trading situation and checking the matching of positions, notifying and handling abnormal positions, and managing the mark to market profit and loss of positions and capital accounts. The implementation and results of the above daily work shall be reported to the relevant functional departments and the general person in charge of derivatives investment.
The management of foreign exchange derivatives investment adopts the management mode of “division of labor and coordination between corner a and corner B”. The fund management department under the finance department is responsible for inquiry trading and tracking the daily position change, actual profit and loss, floating profit and loss and other foreign exchange positions. The finance department is responsible for checking the matching of trading and foreign exchange positions every month, The implementation and results of the above daily work shall be reported to the relevant functional departments and the general person in charge of derivatives investment.
The above-mentioned relevant departments shall reasonably allocate professionals such as investment decision-making, business operation and risk control.
Article 7 the company recognizes the fair value of Derivative Investment in accordance with accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, and lists and discloses derivatives in accordance with accounting standards for Business Enterprises No. 37 – presentation of financial instruments.
Article 8 the company and its subsidiaries shall strictly control the type and scale of derivatives investment business. The futures varieties engaged in hedging business shall be limited to the products related to the company’s production and operation or the raw materials required, and shall not engage in derivatives speculation directly or in a disguised form.
Chapter III approval procedures for Derivatives Investment
Article 9 the company and its subsidiaries shall conduct classified approval for derivatives investment business for hedging within the annual authorization of the general person in charge of derivatives investment according to the following procedures:
The purchase department or sales department and other business departments are responsible for the daily management of commodity derivatives business. Daily approval of commodity derivatives: for hedging business and strategic business within the authorization, each business department shall approve them one by one according to the scheme, and submit them to the leader in charge and the general person in charge of derivatives investment for approval after being reviewed by the finance department. The hedging operation plan of future cash combination (including trend) shall include but not limited to: variety, quantity, future cash market analysis, position building plan, position closing standard and stop loss point, etc. Trading bilateral positions are locked in the strategic operation plan of the exchange, mainly including strategy type, variety, quantity, position building cycle, position building point analysis and risk control measures.
The fund management department is responsible for the daily management of foreign exchange derivatives business. Daily approval of foreign exchange derivatives: when the purchase or sales business departments of the company and its subsidiaries operate supporting foreign exchange derivatives, the business department shall initiate the application process. After the approval of the head of the business department, the head of the finance department, the leader in charge of the business department and the chief financial officer, the fund management department can execute the inquiry transaction. If the fund management department needs to operate the foreign exchange derivatives business, it shall be initiated by the fund management department and approved by the head of the finance department and the chief financial officer before executing the transaction. The main contents of the examination and approval include the direction of foreign exchange locking, the variety of foreign exchange locking, the amount of foreign exchange locking, the delivery time, etc. Article 10 the internal control and Audit Department of the company is responsible for conducting regular (at least every half a year) or irregular audits on derivatives investment business, issuing inspection reports and submitting them to the audit committee of the board of directors. The audit committee of the board of directors shall issue written evaluation opinions on the effectiveness of the company’s internal control according to the internal audit reports and relevant materials submitted by the internal control and audit department, And report to the board of directors.
Article 11 the Securities Management Department of the company is responsible for reviewing the legality and compliance of the decision-making procedures of derivatives investment business and implementing necessary information disclosure in accordance with the relevant requirements of the securities regulatory departments such as the CSRC and Shenzhen Stock Exchange.
Chapter IV practical operation and management of derivatives investment
Article 12 all unilateral speculation is strictly prohibited.
Article 13 once all speculation is found, the position shall be closed immediately.
Article 14 the company sets up a crisis management team, which is composed of the chairman of the board of directors, the general manager, the deputy general manager in charge of relevant business departments, the chief financial officer and the head of the finance department. In case of crisis or major matters, the crisis management team can make a decision according to the majority opinion.
Chapter V follow up management and information disclosure of Derivative Investment
Article 15 the relevant departments of the company shall track the changes in the open market price or fair value of derivatives, timely evaluate the changes in the risk exposure of the derivatives investment business, and report to the board of directors of the company within 15 working days after the end of each quarter.
When the sum of the fair value impairment of the company’s investment derivatives and the changes in the value of assets (if any) used for risk hedging leads to the total loss or floating loss, the company shall disclose it in time when the amount reaches 10% of the company’s latest audited net profit attributable to the shareholders of the parent company and the absolute amount exceeds RMB 10 million.
Article 16 for derivative investments that are not subject to Centralized Settlement and clearing on the exchange floor, the company pays close attention to the changes in the credit risk of the counterparty, regularly tracks and evaluates the credit status and performance ability of the counterparty, and adjusts the position of the performance collateral of the counterparty accordingly. Article 17 according to the characteristics of invested derivatives, the company sets appropriate stop loss limits for various derivatives or different counterparties, defines the stop loss processing business process, and strictly implements the stop loss provisions.
Article 18 the financial department of the company shall regularly submit risk analysis reports to the company’s management team and the board of directors, including the implementation of derivatives investment authorization, derivatives trading position, profits and losses of derivatives investment, the implementation of stop loss limit, etc.
Article 19 the company shall formulate feasible emergency response plans according to the characteristics of the derivatives investment business, and respond to major emergencies that may occur in the operation of derivatives investment business in a timely manner.
Article 20 the company shall perform relevant information disclosure obligations in strict accordance with the relevant provisions of the CSRC and Shenzhen Stock Exchange.
Chapter VI archives management and information confidentiality
Article 21 the transaction settlement data, account opening data, various internal authorization documents and other files of derivatives investment business shall be filed and kept by the Archivist of the finance department for a period of not less than 10 years. If others need to access it for official business, it shall be approved by the general head of derivatives. Article 22 relevant personnel shall strictly abide by the company’s confidentiality system, strictly abide by the company’s business secrets, and shall not disclose derivatives investment scheme, transaction settlement, capital and other information without permission. Chapter VII supplementary provisions
Article 23 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the relevant provisions of the articles of association. If the system is inconsistent with relevant laws, regulations, normative documents and the articles of association, the provisions of relevant laws, regulations, normative documents and the articles of association shall prevail.
Article 24 the specific implementation rules for commodity derivatives and foreign exchange derivatives investment shall be formulated separately by the specific administrative department in accordance with the basic policies and principles of this system.
Article 25 the board of directors authorizes the finance department to interpret the system.
Article 26 the system shall come into force on the date when it is deliberated and adopted by the board of directors of the company.
February 23, 2002
