Chapter 1 General Principles
Article 1
To legally regulate the foreign exchange derivative trading business and related information disclosure of Kaile Environmental Technology (Shanghai) Co., Ltd. (hereinafter referred to as "the Company"), strengthen management, prevent investment risks, improve the management mechanism, and ensure asset safety, this system is formulated based on the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Management Measures for Information Disclosure of Listed Companies, the Shenzhen Stock Exchange GEM Listing Rules, and other relevant laws and regulations, as well as the Articles of Association of Kaile Environmental Technology (Shanghai) Co., Ltd. (hereinafter referred to as "the Articles of Association"), combined with the actual situation of the Company.
Article 2
The foreign exchange derivative trading referred to in this system means trading activities that are not futures trading, involving swap contracts, forward contracts, non-standard options contracts, and their combinations, to meet normal production and operational needs. The underlying assets of derivatives can be securities, indices, interest rates, exchange rates, currencies, commodities, etc., or a combination of the above.
Article 3
This system applies to the foreign exchange derivative trading business of the Company and its holding subsidiaries. The foreign exchange derivative trading business conducted by holding subsidiaries is deemed as the Company's foreign exchange derivative trading business and is subject to this system; however, holding subsidiaries may not operate this business without the Company's consent. The Company shall perform relevant approval and information disclosure obligations in accordance with this system.
Chapter 2 Business Operation Principles
Article 4
The Company shall conduct foreign exchange derivative trading business in accordance with the principles of legality, prudence, safety, and effectiveness. All foreign exchange derivative trading activities shall be based on normal production and operations, relying on specific business operations, and aimed at avoiding and preventing exchange rate or interest rate risks.
Article 5
The Company may only conduct foreign exchange derivative trading with financial institutions that have been approved by the State Administration of Foreign Exchange and the People's Bank of China and possess the qualifications for foreign exchange derivative trading. Transactions with other organizations or individuals outside these financial institutions are prohibited.
Article 6
Foreign exchange derivative trading must be based on the Company's foreign currency receipt forecasts under exports and foreign currency payment forecasts under imports, or derived foreign currency bank deposits and borrowings. The foreign currency amount in the derivative trading contract shall not exceed the forecast amounts for foreign currency receipts, deposits, or payments, and the delivery date of the foreign exchange derivative trading business must match the forecasted timing for foreign currency receipts, deposits, or payments, or the repayment period of corresponding foreign currency bank borrowings.
Article 7
The Company and its holding subsidiaries must establish foreign exchange derivative trading accounts in their own names and may not use others' accounts for foreign exchange derivative trading.
Article 8
The Company must have its own funds that match the foreign exchange derivative trading business and may not use raised funds directly or indirectly for foreign exchange derivative trading. It must strictly control the scale of funds according to the approved foreign exchange derivative limits, ensuring it does not affect the Company's normal operations.