Tech-Bank Food Co.Ltd(002124) commodity futures hedging business management system
May 2022
Section I General Provisions
Article 1: in order to regulate the commodity futures hedging business of Tech-Bank Food Co.Ltd(002124) (hereinafter referred to as "the company"), lock the product cost and product sales price of the company, and effectively avoid the risks caused by the fluctuation of raw materials, inventory products and commodity prices in production and operation activities, according to the stock listing rules of Shenzhen Stock Exchange, the guidelines for the standardized operation of listed companies, and the administrative measures for information disclosure of listed companies And the articles of association and other relevant provisions, combined with the actual situation of the company, this management system is hereby formulated.
Article 2: this management system is applicable to the futures hedging business of the company and all its holding subsidiaries, but without the consent of the company, all subsidiaries shall not operate this business without authorization.
Article 3: 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 required raw materials and products.
Article 4: the company shall make reasonable arrangements and use of funds to develop the company's main business, and shall not use the raised funds to engage in securities investment and derivatives trading.
Article 5: the company shall revise and improve the management system according to the actual needs to ensure that the system can meet the needs of actual operation and risk control.
Section II Organization
Article 6: the audit committee of the board of directors of the company is responsible for reviewing the necessity and risk control of hedging transactions.
The company sets up a "futures decision-making group" to manage the company's futures and option hedging business.
The members of the "futures decision-making group" include the president of the company, the person in charge of pig futures, the person in charge of supply chain, the person in charge of finance, the person in charge of internal control and the person in charge of legal affairs;
The board of directors authorizes the president to take charge of futures and option hedging business and act as the head of the "futures decision-making group"; The team members are responsible for the approval, supervision and disclosure of hedging schemes and related affairs according to their division of labor.
Article 7: the company sets up a daily working group, whose main responsibilities are as follows:
(I) be responsible for the collection, research and analysis of spot and futures market information of futures hedging products, and formulate corresponding futures hedging trading strategy plans;
(II) formulate the annual hedging plan and submit it to the board of directors for approval;
(III) be responsible for the daily management of futures hedging business, including the daily management of expense account, trading software and quotation software account application, use and setting up account;
(IV) be responsible for the supervision and management of futures trading quota application and quota use, daily business such as futures hedging trading opening and closing position application, review and fund availability, delivery management and real-time monitoring of intraday trading risk;
(V) be responsible for timely adjusting and formulating the transaction implementation plan according to the market changes, and implement it after approval; (VI) maintain effective communication with futures companies, coordinate and deal with major internal and external matters of the company's futures hedging business, and regularly report the company's futures hedging business to the company's management;
(VII) be responsible for the emergency treatment of transaction risks.
Article 8: the company shall set up corresponding posts in the pig futures department, supply chain center,, planning and finance department and internal control department to be responsible for the specific implementation of hedging business, as follows: (I) futures traders: they shall be assumed by special personnel and work under the leadership of the person in charge of pig futures;
(II) risk manager: it is held by special personnel and works under the leadership of the head of the internal control department;
(III) fund allocator: concurrently held by the financial personnel, working under the leadership of the person in charge of finance;
(Ⅳ) Accounting Clerk: accounting clerk shall concurrently work under the leadership of the person in charge of finance;
(V) archivist: the Archivist of EMT office shall concurrently serve as the archivist and work under the leadership of the person in charge of pig futures.
Article 9: the Finance Department of the company is responsible for ensuring the supervision of the fund raising and use approved for futures operation, and supervising the financial results of futures operation on a monthly basis.
Article 10: the audit and supervision department of the company shall be responsible for regularly and irregularly reviewing the actual operation, capital use and profit and loss of futures hedging business.
Section III approval authority and information disclosure
Article 11: when the company is engaged in commodity futures hedging business, the management shall issue a feasibility analysis report on the business and submit it to the board of directors. It can be implemented only after the board of directors deliberates and timely discloses it. The independent directors shall give special opinions.
The related party transactions of hedging business between the company and related parties shall be submitted to the general meeting of shareholders for deliberation and announced after deliberation.
The board of directors authorizes the futures decision-making group to carry out hedging business. All hedging businesses must be strictly limited to the approved hedging plan and shall not operate beyond the scope.
Article 12: if the company engages in futures trading beyond the authority of the board of directors and not for the purpose of hedging, it shall be implemented only after the board of directors has deliberated and approved, the independent directors have issued special opinions, and submitted to the general meeting of shareholders for deliberation and approval.
Before issuing the notice of the general meeting of shareholders, the company shall issue a special analysis report on the necessity and feasibility of futures trading and derivatives risk management measures it intends to engage in by itself or hire a consulting institution, and disclose the analysis conclusions. Article 13: if the impairment of the fair value of the company's traded derivatives and the change in the value of the assets (if any) used for risk hedging add up, resulting in a total loss or floating loss, the company shall disclose in a timely manner whenever the amount reaches 10% of the company's audited net profit attributable to the company's shareholders in the latest year and the absolute amount exceeds 10 million yuan.
Section IV Business Process
Article 14: according to the futures market and inventory of main raw materials and products, the business department shall formulate a hedging plan with the assistance of futures companies and other professional institutions, which can be implemented only after being approved by the futures decision-making group of the company.
Article 15: the futures operators authorized by the company shall conduct hedging operations through the futures brokerage company according to the hedging plan.
Article 16: the business department shall, according to the spot purchase or product sales, provide the futures decision-making group with relevant materials and products, and submit an application for futures hedging; After review, the futures decision-making group puts forward the hedging scheme and gives instructions, and the futures operator shall operate in time according to the instructions; The futures decision-making group shall track the opened futures trading and spot business, and issue the closing order in time, and the futures operator shall carry out the closing operation.
Section V risk management system
Article 17: confidentiality system: the relevant personnel of the company's hedging business and the relevant personnel of cooperative futures brokerage companies and financial institutions shall abide by the company's confidentiality system and shall not disclose the company's hedging plan, trading situation, settlement situation, capital status and other information related to the company's hedging without permission.
Article 18: the approver, applicant, operator and fund manager of hedging business are independent of each other, and the audit and supervision department is responsible for supervision.
Article 19: the company shall clarify and accomplish the following work before carrying out futures hedging business:
1. Strictly abide by national laws and regulations, pay full attention to the risk points of futures hedging business, and formulate practical business plans; Carry out the revenue and expenditure of margin and clearing funds in strict accordance with the specified procedures; Establish position early warning report and trading stop loss mechanism, clarify the stop loss processing business process, and strictly implement the stop loss provisions; Prevent the untruthfulness of financial report information due to the error of capital revenue and expenditure accounting and hedging profit and loss calculation in the process of transaction; Prevent losses caused by major errors, fraud and fraud; Ensure the accurate, timely and orderly recording and transmission of transaction instructions;
2. Fully evaluate and carefully select futures brokerage companies;
3. Reasonably set up futures business organizations and establish post responsibility system.
Article 20: the main responsibilities of the company's risk manager include:
1. Formulate risk management policies and procedures related to futures business;
2. Supervise relevant personnel of futures business to implement risk management policies and risk management procedures;
3. Review the credit status of the brokerage company;
4. Participate in the review of the company's specific hedging scheme;
5. Check whether the trading behavior of traders conforms to the hedging plan and specific trading scheme;
6. Monitor and evaluate the risk status of futures positions to ensure the normal hedging process; 7. Discover, report and handle risk accidents according to procedures;
8. Evaluate, prevent and resolve the legal risks of the company's futures business.
Article 21: the risk manager shall strictly review whether the futures hedging of the company is the hedging of the main products (corn, soybean meal, soybean oil, pig, etc.) required by the company's production. If not, it shall immediately report to the head of futures business of the company.
Article 22: the hedging amount of the current period shall be determined and controlled in strict accordance with the resolutions of the board of directors of the company, and shall not exceed the scope authorized by the board of directors at any time.
Article 23: when the company has confirmed the hedging of physical contracts, the establishment and closing of futures positions shall match the quantity and time of the hedged physical contracts.
Article 24: the company establishes a risk measurement system as follows:
1. Capital risk: calculate the amount of margin occupied, floating profit and loss, the amount of available margin, the amount of margin required for the proposed position, and the amount of margin prepared by the company for possible additional margin;
2. Risk of price change of hedging position: calculate the margin demand and profit and loss risk of established positions and positions to be established after price change according to the company's hedging scheme.
Article 25: the company shall establish the following internal risk reporting system and risk handling procedures:
1. Internal risk reporting system:
(1) When the market price fluctuates greatly or abnormally, the trader shall immediately report to the supply chain center, the person in charge of pig futures and the risk manager; When the market price fluctuates abnormally, the supply chain center, the person in charge of pig futures and the risk manager shall immediately report to the head of futures business and the chairman of the company.
(2) When the following risks occur, the company shall report to the futures business manager immediately:
① Relevant personnel of futures business violate risk management policies and risk management procedures;
② The credit status of the brokerage company does not meet the requirements of the company;
③ The company's specific hedging plan does not comply with relevant regulations;
④ The trading behavior of the trader does not comply with the hedging scheme;
⑤ The risk status of the company's futures position affects the normal process of hedging;
⑥ There are or will be relevant legal risks in the company's futures business.
2. Risk handling procedures:
(1) The futures business supervisor of the company shall timely organize relevant personnel to participate in the meeting to fully analyze and discuss the risk situation and Countermeasures to be taken;
(2) Clarify the company's futures trading and risk limits, as well as the punishment measures for ultra vires;
(3) Relevant personnel shall implement the company's risk treatment decisions.
Article 26: procedures for handling wrong transaction orders of the company:
1. In case of wrong orders due to the fault of the brokerage company: the trader shall notify the brokerage company, and the brokerage company shall take corresponding wrong order handling measures in time, and then recover the direct losses from the brokerage company;
2. In case of wrong orders due to the fault of the company's traders, the company's reporting system shall be implemented, and then the traders shall take corresponding instructions. The corresponding trading instructions are required to eliminate or minimize the losses caused by wrong orders to the company.
Article 27: the company shall reasonably plan and arrange the use of margin to ensure the normal hedging process. The hedging month should be reasonably selected to avoid market liquidity risk.
Article 28: the company shall strengthen the professional ethics education and professional training of relevant personnel and improve the comprehensive quality of relevant personnel.
Article 29: the company shall set up trading, communication and information service facilities and systems that meet the requirements to ensure the normal operation of the trading system and the normal development of trading work.
Section VI control of emergency response plan
Article 30: when the company executes the futures hedging trading plan, if there are major changes in national policies and the market and other reasons, which will cause a significant increase in risks and may cause major losses, the company shall take the initiative to report in time according to its authority, and close or lock its positions in the shortest time.
Article 31: in case of losses caused by force majeure such as earthquake, flood, fire, typhoon and war, it shall be handled in accordance with the relevant laws and regulations of China's futures industry, futures contracts and relevant contracts.
Article 32: if the transaction cannot be carried out normally due to local power failure, computer and company network failure and other reasons, the company shall timely enable standby wireless network, laptop and other equipment or entrust the futures brokerage company to carry out the transaction by telephone.
Section VII archives management system
Article 33: the company shall keep the original trading data, settlement data and other business files of futures hedging for at least 15 years.
Article 34: the company shall keep the opening documents, authorization documents and other files of futures business for at least 15 years. Section VIII supplementary provisions
Article 35: the company shall, in accordance with the accounting standards for Business Enterprises No. 24 - hedging and other relevant provisions, conduct daily accounting for the hedging business of the company and correctly present it in the financial report.
Article 36: matters not covered in this system shall be implemented in accordance with the provisions of relevant national laws, regulations and other normative documents. If this system conflicts with the provisions of relevant laws, regulations and normative documents issued in the future, it shall be implemented in accordance with the provisions of relevant laws, regulations and normative documents, and shall be revised by the board of directors in time.
Article 37: this system shall come into force after being deliberated and approved by the board of directors of the company, and the same shall apply when it is revised.
Article 38: the right to interpret this system belongs to the board of directors of the company.
May 18, 2002 board of directors
