Core Viewpoint - The document outlines the management system for foreign exchange derivative trading at OFILM Group Co., Ltd., emphasizing the need for risk management, compliance with regulations, and the establishment of a structured operational framework for such trading activities [1][2][3]. Summary by Sections General Principles - The purpose of the system is to standardize foreign exchange derivative trading and related information disclosure, enhance management, prevent investment risks, and ensure asset safety [1]. - Derivatives include forwards, swaps, options, and combinations thereof, with underlying assets being securities, indices, interest rates, exchange rates, currencies, and commodities [1]. Trading Operations Principles - The company does not engage in foreign exchange trading solely for profit; all trading activities are based on normal business operations and aimed at hedging against exchange rate risks [2][3]. - Trading is permitted only with qualified financial institutions approved by the State Administration of Foreign Exchange and the People's Bank of China [2][3]. - The foreign currency amounts in derivative contracts must not exceed the company's prudent forecast of foreign currency receipts and payments [2][3]. Approval Authority - The Board of Directors is responsible for reviewing the necessity and risk control of foreign exchange derivative trading, with overall plans and limits requiring the Chairman's consent before submission for Board approval [3][4]. - A feasibility analysis report must be provided for derivative trading, and certain conditions require submission to the shareholders' meeting for approval [4]. Management and Internal Procedures - The General Manager is authorized to manage foreign exchange derivative trading operations and sign relevant agreements [5]. - The finance department is responsible for daily management and must report on the trading situation and any anomalies [5][6]. Information Disclosure - All foreign exchange derivative trading activities must be disclosed promptly after Board approval, detailing the necessity and rationale for the trades [7][8]. - Significant risks or losses must be disclosed through temporary announcements, and specific details about the trading purpose and expected financial implications must be provided [8][9]. Miscellaneous - The system applies to the company's subsidiaries, which must also comply with these regulations [10]. - The Board of Directors holds the interpretation rights of this system [11].

Group 1 - The People's Bank of China, Henan Branch, reported on the foreign economic development situation in Henan Province for the first half of 2025, emphasizing the importance of financial support for stabilizing foreign trade and investment [4] - The bank has enhanced the convenience of cross-border trade and investment financing, allowing more specialized, small and medium-sized private enterprises, and cross-border e-commerce entities to benefit from foreign exchange policies [4] - In the first half of the year, 410 quality enterprises in the province processed 34,700 trade foreign exchange transactions, totaling $42.7 billion [4] Group 2 - The bank has strengthened services for enterprises to hedge against exchange rate risks, promoting the use of foreign exchange derivatives and holding outreach events for over 200 large private enterprises [5] - In the first half of the year, foreign-related enterprises used foreign exchange derivatives to hedge against risks amounting to $6.4 billion, with a new hedging rate of 22.88%, an increase of 5 percentage points from the previous year [5]

Core Viewpoint - The document outlines the management system for foreign exchange derivative trading at Guangdong Songfa Ceramics Co., Ltd., emphasizing the need for risk prevention, compliance with regulations, and the establishment of a robust management mechanism for the company's foreign exchange derivative trading activities [1][2]. Group 1: General Principles - The foreign exchange derivative trading activities are aimed at mitigating and preventing exchange rate or interest rate risks, based on the company's normal production and operational needs [2]. - The company must conduct foreign exchange derivative transactions with qualified financial institutions and cannot engage with unauthorized organizations or individuals [2][3]. - Transactions must align with the company's foreign currency receivables and payables forecasts, ensuring that the amounts do not exceed these forecasts [2][3]. Group 2: Approval Authority - The Board of Directors is responsible for reviewing the necessity and legality of foreign exchange derivative trading decisions, with disclosures made in relevant announcements or reports [3][4]. - Any overall plan and limits for foreign exchange derivative trading must be approved by the Board of Directors or, if exceeding their authority, by the shareholders' meeting [3][4]. Group 3: Management and Operational Procedures - The Board may authorize the Chairman or designated individuals to manage specific foreign exchange derivative trading operations within the approved scope [4][5]. - The company can estimate the scope, limits, and duration of derivative trading for the next 12 months to streamline operations [4][5]. Group 4: Risk Management - The company must implement measures to prevent funding risks, ensuring that trading does not utilize cash flow beyond normal operations [6][7]. - In cases of significant losses or market changes, the finance department must report to management and the Board, providing a risk analysis report that includes trading positions and risk assessments [7][8]. Group 5: Information Disclosure - The company is required to disclose foreign exchange derivative trading activities as per relevant laws and regulations, ensuring transparency in operations [8]. - All trading documents must be retained for at least 10 years by the finance department [8].