Shanghai Baolijia Chemical Co.Ltd(301037)
Financial derivatives trading business management system
Chapter I General Provisions
Article 1 in order to regulate and manage Shanghai Baolijia Chemical Co.Ltd(301037) (hereinafter referred to as “the company”) and all wholly-owned subsidiaries and holding subsidiaries (hereinafter referred to as “all subsidiaries”) financial derivatives transactions, establish an effective risk prevention mechanism and realize steady operation, In accordance with the securities law of the people’s Republic of China, the Listing Rules of the gem of Shenzhen Stock Exchange, the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange and other laws, regulations and normative documents, as well as the relevant provisions of the articles of association of Shanghai Shanghai Baolijia Chemical Co.Ltd(301037) Chemical Co., Ltd. (hereinafter referred to as the “articles of association”) and in combination with the actual situation of the company, This system is hereby formulated.
Article 2 the term “financial derivatives” as mentioned in this system refers to the products that are traded on and off the market, or non traded, and are essentially futures, options, forwards, swaps and other products or a combination of the above products. The underlying assets of financial 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 or guarantee or mortgage can be used for leveraged transactions, or unsecured and unsecured credit transactions can be used. Article 3 this system is applicable to derivatives transactions of the company and its subsidiaries. Derivatives transactions conducted by subsidiaries shall be deemed as derivatives transactions conducted by the company, and this system shall apply. Without the approval of the company, all subsidiaries of the company shall not operate this business. At the same time, the company shall perform relevant decision-making procedures and information disclosure obligations in accordance with the relevant provisions of the system and corresponding authorization.
Chapter II Basic Management Principles
Article 4 in addition to the provisions of relevant national laws, regulations and normative documents, the company shall also comply with the relevant provisions of this system when engaging in financial derivatives transactions.
Article 5 in the process of financial derivatives transaction management, we should establish a serious awareness of “risk neutrality”, follow the principles of legality, prudence, safety and effectiveness, pay attention to scientific decision-making, control investment risks, pay attention to investment benefits, and prudently use financial derivatives to prevent temptation and misleading.
Article 6 the company shall not conduct financial derivatives transactions solely for the purpose of profit, and all financial derivatives shall be delivered
The purpose of avoiding and preventing exchange rate risk, interest rate risk and price fluctuation risk is to realize cost locking and risk avoidance. The futures varieties of the company engaged in hedging business shall be limited to the products related to the company’s production and operation or the raw materials required.
Article 7 the company shall have its own funds matching the financial derivatives transactions, and shall not use the raised funds to directly or indirectly invest in financial derivatives. The company shall strictly control the capital scale in accordance with the financial derivatives investment quota deliberated and approved by the board of directors or the general meeting of shareholders, and shall not affect the normal operation of the company.
Article 8 the type, scale and direction of financial derivatives contracts shall match the business background and capital flow. In principle, the contract term shall not exceed the period specified in the business contract.
Article 9 the company must establish a financial derivatives trading account in its own name or in the name of each subsidiary, and shall not use the account of others for financial derivatives trading.
Chapter III approval authority
Article 10 the board of directors and the general meeting of shareholders are the decision-making and approval authorities of the company’s financial derivatives trading business. All financial derivatives transactions must be strictly limited to the approved financial derivatives trading scheme, and shall not operate beyond the scope. Specific decision-making and approval authorities are as follows:
（1） When the company intends to carry out financial derivatives trading, it shall provide a feasibility analysis report, submit it to the board of directors for deliberation and timely perform the obligation of information disclosure, and the independent directors shall express special opinions. （2） If the company expects to carry out financial derivatives transactions in a single time or within 12 consecutive months, the cumulative investment amount reaches or exceeds 50% of the company’s latest audited net assets and the absolute amount exceeds 50 million, it shall be reviewed and approved by the company’s board of directors, the independent directors shall give special opinions, and submitted to the company’s general meeting for review; If the relevant approval procedures have been performed and disclosed in accordance with the above provisions, it will not be included in the cumulative calculation scope.
（3） Derivatives transactions between listed companies 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.
When the company conducts derivative transactions, if it is difficult to perform the review procedures and disclosure obligations for each derivative transaction due to transaction frequency and timeliness requirements, it can reasonably predict the scope, amount and duration of derivative transactions in the next 12 months. If the amount of the amount exceeds the authority of the board of directors, it shall also be submitted to the general meeting of shareholders for review. The amount of derivative transactions at any time point during the term (including the income from the above investment)
The relevant amount of reinvestment) shall not exceed the limit amount.
Chapter IV Business Process and management system
Article 11 relevant responsible departments or personnel of the company engaged in financial derivatives trading business:
（1） Procurement department: responsible for analyzing the feasibility and necessity of financial derivatives trading business, tracking the changes of derivatives open market price or fair value, timely assessing the changes of risk exposure of traded derivatives, and submitting to the management and the board of directors, including the implementation of derivatives trading authorization, derivatives trading position, risk assessment results Risk analysis report on the profit and loss of derivatives transactions and the implementation of stop loss limits in the current period.
（2） Audit Committee: responsible for reviewing the necessity, feasibility and risk control of derivative transactions. When necessary, professional institutions can be hired to issue feasibility analysis reports on derivatives transactions.
（3） Financial department: responsible for the collection and payment of financial derivatives trading business, capital account management, accounting treatment, accounting, etc.
（4） Audit department: responsible for reviewing and supervising the actual operation of financial derivatives trading business, including fund use, profit and loss, accounting, internal operation implementation, etc.
（5） Legal compliance department: responsible for reviewing the legality and compliance of financial derivatives trading business, relevant contracts and legal documents involved in the business.
（6） Office of the board of directors: in accordance with the relevant provisions of the securities regulatory department, it is responsible for reviewing the legality and compliance of the decision-making procedures for financial derivatives trading business and disclosing information in a timely manner.
Article 12 the internal operation process of financial derivatives trading business is as follows:
（1） The company has established a leading group for financial derivatives trading business, including the general manager, financial department, audit department, procurement department, legal compliance department, board office and other relevant personnel. The general manager of the company is the head of the financial derivatives business leading group. （2） Based on the principle of soundness and for the purpose of preventing price fluctuation risk, the business personnel comprehensively balance the hedging needs of the company according to the business operation needs, relevant interest rates, exchange rates
The change trend of commodity prices and other prices, as well as the quotation information of various financial institutions, put forward the application for derivatives trading business, and submit it for approval according to the approval authority before implementation.
（3） The company’s financial derivatives trading personnel and financial department shall register the financial derivatives trading business, check the transaction records, timely track the transaction change status, properly arrange the delivery funds, and strictly control the occurrence of delivery default risk.
（4） The financial department of the company shall regularly issue financial derivatives trading business statements and submit them to the management of the company. The contents of the statement shall at least include the transaction time, transaction object, amount, profit and loss, etc.
（5） The Audit Department of the company is the daily supervision department of financial derivatives trading business, which is responsible for reviewing and supervising the actual operation, capital use and profit and loss of financial derivatives trading business, urging the financial center to carry out accounting treatment in time and verifying the accounting treatment.
（6） The office of the board of directors of the company shall disclose the information related to the financial derivatives transactions that have been carried out in accordance with the provisions. The fair value impairment of the company’s invested derivatives and the changes in the value of assets (if any) used for risk hedging, such as when the total loss or floating loss reaches 10% of the company’s latest audited net profit attributable to the company’s shareholders and the absolute amount exceeds RMB 10 million, it shall be disclosed in a timely manner in an interim announcement. （7） Independent directors and the board of supervisors have the right to supervise and inspect the use of funds, and may hire professional institutions to audit when necessary.
Chapter V follow up management and information isolation
Article 13 the company shall set appropriate stop loss limits for various financial derivatives or different counterparties according to the characteristics of invested financial derivatives, clarify the stop loss processing business process, and strictly implement the stop loss provisions.
Article 14 all personnel involved in the company’s financial derivatives trading business shall abide by the company’s confidentiality system and shall not disclose the company’s financial derivatives trading scheme, trading situation, settlement situation, capital status and other information related to financial derivatives trading without permission.
Article 15 the operation links of the company’s financial derivatives trading business are independent of each other, and the relevant personnel are independent of each other, which shall be supervised by the Audit Department of the company. The company’s audit department is responsible for the audit of the company’s financial derivatives trading business
Supervise and evaluate risk control policies and procedures.
Article 16 the legal compliance department of the company shall be responsible for keeping the business files, account opening documents, authorization documents, various internal reports, documents issued and approved documents such as the original data and settlement data of financial derivatives transactions for at least 10 years.
Chapter VI internal risk control measures and accounting policies
Article 17 during the operation of financial derivatives business, the finance department shall timely settle with financial institutions according to the amount of underlying assets agreed in the financial derivatives contract signed with financial institutions and the delivery period.
Article 18 when the price of the underlying asset fluctuates violently, the procurement department shall analyze it in time and report the relevant information to the general manager. After careful judgment, the general manager shall issue operation instructions to prevent further expansion of the risk.
Article 19 when there are major abnormalities, major risks or possible major risks in the company’s financial derivatives business, the procurement department shall timely submit analysis reports and solutions to the general manager and report to the Secretary of the board of directors of the company at the same time. The Secretary of the board of directors shall report to the board of directors of the company in accordance with relevant regulations. The company shall convene the board of directors to review the analysis report and solutions in accordance with the provisions of the articles of association. When the major risks that have occurred or may occur meet the disclosure standards stipulated by the China securities regulatory authority, the company shall make a timely announcement in accordance with relevant regulations.
Article 20 the Audit Department of the company shall supervise the actual implementation of the above-mentioned internal risk control system. Article 21 the company’s accounting policies for financial derivatives transactions shall be implemented in accordance with the current national accounting policies.
Chapter VII accountability
Article 22 relevant personnel who conduct derivatives trading in violation of national laws, regulations or internal rules, or neglect management, resulting in heavy losses, will be seriously dealt with in accordance with relevant regulations, and the responsibilities of relevant responsible persons will be investigated according to law.
Article 23 for those who report false information, conceal asset losses, fail to report relevant information in time as required or fail to cooperate with the supervision work in the daily supervision work, the relevant responsible persons will be investigated for responsibility.
Chapter VIII supplementary provisions
Article 24 matters not covered in this system shall be implemented in accordance with national laws, regulations, normative documents and the articles of association. In case of any inconsistency between this system and laws, regulations, other normative documents and the articles of association, the provisions of relevant laws, regulations, other normative documents and the articles of Association shall prevail.
Article 25 this system shall come into force and come into force after being deliberated and approved by the general meeting of shareholders, and the same shall apply when it is revised.
Shanghai Baolijia Chemical Co.Ltd(301037)
