Chapter 1 General Provisions
Article 1 To regulate the foreign exchange hedging business and related information disclosure of Zhejiang Huace Film & TV Co., Ltd. (hereinafter referred to as the "Company") and its subsidiaries, strengthen the management of foreign exchange derivative trading business, prevent investment risks, and improve the Company's foreign exchange hedging business management mechanism and ensure the safety of company assets.
In accordance with the "Company Law of the People's Republic of China," "Securities Law of the People's Republic of China," "Information Disclosure Management Measures for Listed Companies," "Shenzhen Stock Exchange GEM Stock Listing Rules," "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 2 - Standardized Operation of GEM Listed Companies," "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 7 - Trading and Connected Transactions," and the "Articles of Association of Zhejiang Huace Film & TV Co., Ltd." (hereinafter referred to as the "Articles of Association"), and in combination with the Company's specific situation, this system is hereby formulated.
Article 2 For the purpose of this system, foreign exchange hedging business refers to activities of futures and derivative transactions that are achieved by engaging with domestic and foreign financial institutions with relevant business qualifications to hedge and prevent exchange rate or interest rate risks, in order to meet normal operating or business needs, based on the foreign currency payment and receipt situation of the Company and its subsidiaries' international businesses. This includes, but is not limited to, forward foreign exchange settlement and sales, currency swaps, currency options, interest rate swaps, currency swaps, interest rate swaps, interest rate options, and combinations of the above derivative product businesses.
Article 3 This system applies to the foreign exchange hedging business carried out by the Company and its subsidiaries. If a subsidiary engages in foreign exchange hedging business, it shall be deemed as the Company engaging in foreign exchange hedging business and shall be subject to this system. The foreign exchange hedging business of subsidiaries shall be uniformly managed by the Company.
Article 4 In addition to complying with the provisions of national laws, regulations, and normative documents, the Company's foreign exchange hedging activities shall also comply with the relevant provisions of this system.
Chapter 2 Operating Principles
Article 5 The Company's foreign exchange hedging business shall adhere to the principles of legality, prudence, safety, and effectiveness. The types and scale of foreign exchange hedging business shall be strictly controlled. The business shall be based on normal production and operation, rely on specific operating businesses, and aim to hedge and prevent exchange rate or interest rate risks. Speculation and illegal arbitrage transactions are prohibited.
Article 6 The Company's foreign exchange hedging business shall only be conducted with financial institutions approved by relevant government departments and possessing foreign exchange hedging business qualifications. Transactions with other organizations or individuals outside of these financial institutions are prohibited.
Article 7 The Company's foreign exchange hedging business must be based on prudent forecasts of the Company's foreign currency receipts (payments). The foreign currency amount of the contract shall not exceed the total actual demand for foreign currency receipts (payments). Concurrently, for foreign currency financing that occurs, the Company shall arrange the amount, type, and timing of foreign exchange hedging in accordance with the above principles to ensure the effectiveness of foreign exchange hedging.
Article 8 The Company shall establish foreign exchange hedging accounts in its own name and shall not use accounts of others to conduct foreign exchange hedging business.