Lettall Electronic(SH:603629) Zheng Quan Zhi Xing·2025-07-10 10:11Core Viewpoint - The document outlines the management system for futures and derivatives trading at Jiangsu Litong Electronics Co., Ltd., emphasizing risk management related to foreign exchange rates and commodity price fluctuations while ensuring compliance with relevant laws and regulations [1][2]. Group 1: General Principles - The purpose of the management system is to strengthen the company's futures and derivatives trading operations and effectively mitigate risks associated with foreign currency exchange and commodity price volatility [1]. - Futures trading refers to transactions involving futures contracts or standardized options, while derivatives trading includes swaps, forward contracts, and non-standardized options [1][2]. Group 2: Hedging Activities - The company engages in hedging activities to manage specific risks such as foreign exchange, price, interest rate, and credit risks through futures and derivatives trading [2]. - Hedging activities include selling hedges on existing inventory, hedging fixed-price contracts, hedging floating-price contracts, and hedging anticipated purchases or production [2]. Group 3: Organizational Structure and Responsibilities - A leadership group is established to oversee futures and derivatives trading, consisting of the general manager, relevant vice presidents, and other key personnel [4]. - The leadership group is responsible for comprehensive management of trading activities, approving hedging strategies, and handling emergency risk situations [4]. Group 4: Approval and Authorization - The company must prepare feasibility analysis reports for futures and derivatives trading and submit them for board approval, especially when certain financial thresholds are met [6][7]. - Transactions that do not aim for hedging purposes must be clearly disclosed and cannot be misrepresented as hedging activities [8]. Group 5: Internal Processes - The strategy group is responsible for market analysis and developing specific trading plans, which must be approved by the leadership group [5]. - The trading group executes transactions based on approved plans, while the risk control group monitors compliance and risk management [5][9]. Group 6: Risk Management - The company must establish a risk measurement system to assess financial risks, including margin requirements and potential losses [30]. - A risk reporting mechanism is in place to address significant market fluctuations and potential losses, ensuring timely communication to the leadership group [31][32]. Group 7: Emergency Procedures - The company has protocols for emergency situations, including significant market changes or natural disasters, to mitigate potential losses [38][39]. - In case of operational disruptions, alternative trading methods must be employed to ensure continuity [40]. Group 8: Compliance and Disclosure - Employees involved in futures and derivatives trading must adhere strictly to the established management system, with penalties for violations [42][43]. - The company is required to fulfill information disclosure obligations related to its trading activities [45].