Chapter 1 General Provisions
Article 1 To regulate the foreign exchange hedging activities of CSPC Pharmaceutical Group Limited (hereinafter referred to as the "Company") and its wholly-owned and控股 subsidiaries (hereinafter referred to as "Subsidiaries"), establish an effective risk prevention mechanism, and achieve stable operations, in accordance with the "Company Law of the People's Republic of China," "Shenzhen Stock Exchange Listed Company Self-Regulatory Guidelines No. 7 - Transactions and Connected Transactions," and other relevant laws, administrative regulations, departmental rules, normative documents, stock exchange business rules, and the "Articles of Association of CSPC Pharmaceutical Group Limited" (hereinafter referred to as the "Articles of Association"), and in conjunction with the Company's actual situation, this system is hereby formulated.
Article 2 This system applies to the foreign exchange hedging activities of the Company and its Subsidiaries. Without the approval of the Company's authorized decision-making body, the Company and its Subsidiaries shall not engage in foreign exchange hedging business. The Company and its Subsidiaries shall establish foreign exchange hedging accounts in their own names and shall not use the accounts of others for foreign exchange hedging business.
Article 3 Foreign exchange hedging business as referred to in this system refers to various businesses handled with banks or other financial institutions for the purpose of preventing and controlling foreign exchange rate or interest rate risks based on normal business needs. The types of products mainly include, but are not limited to: forward foreign exchange settlement and sales, foreign exchange swaps, currency swaps, foreign exchange exchanges, interest rate swaps, interest rate options, or other foreign exchange derivative product businesses.
Chapter 2 Basic Management Principles
Article 4 The Company conducts foreign exchange hedging business in accordance with the principles of legality, prudence, safety, and effectiveness. All foreign exchange hedging business shall be based on normal production and operation, matched with the Company's actual business, and used as a means to hedge and prevent exchange rate risks. Speculative foreign exchange investment and arbitrage transactions are prohibited.
Article 5 The Company shall only conduct foreign exchange hedging business with financial institutions that have the operating qualifications for foreign exchange hedging business and shall not conduct transactions with other organizations or individuals outside of the aforementioned financial institutions.
Article 6 The Company shall have its own funds or credit line that matches its foreign exchange hedging business. Raised funds shall not be used directly or indirectly for foreign exchange hedging. The scale of funds shall be strictly controlled in accordance with the approved forward foreign exchange settlement and sales quota, and the Company's normal operations shall not be affected.