Overview of Hedging Activities - The company has initiated foreign exchange hedging activities to mitigate risks associated with currency fluctuations impacting its export business, with a maximum trading balance of up to $2.5 billion for 2025 [1] - The company has also approved futures hedging activities for raw materials such as copper, aluminum, silver, tin, and polysilicon, with a maximum margin requirement of RMB 660 million for 2025 [2] Foreign Exchange Hedging Progress and Impact - As of now, the foreign exchange hedging activities have resulted in a total loss of RMB 117.49 million from completed transactions and an unrealized loss of RMB 82.30 million from ongoing transactions, while cumulative gains from these activities amount to RMB 209.50 million [2][3] - The fluctuations in exchange rates have positively impacted the company's overall performance, and these activities are not expected to affect cash flow or normal operations [3] Futures Hedging Progress and Impact - The company has experienced significant price increases in silver, leading to partial hedging of low-priced silver paste inventory to lock in profits, with total losses from futures hedging activities amounting to RMB 33.73 million, including unrealized losses of RMB 49.89 million from open positions [3][4] - Despite the volatility in raw material prices, the company's cash flow and normal operations remain unaffected [4]

Core Viewpoint - The company has established a set of regulations for forward foreign exchange settlement and sales to manage exchange rate risks in international trade, ensuring compliance with relevant laws and internal policies [1][2]. Group 1: General Principles - The company defines "forward foreign exchange settlement" as agreements with banks to handle future foreign exchange transactions based on predetermined terms [1]. - The company will not engage in foreign exchange trading solely for profit but will use it as a hedging tool to mitigate exchange rate risks [1][2]. Group 2: Operational Guidelines - Transactions are only permitted with approved financial institutions that have the qualifications for forward foreign exchange business [2]. - The total amount of forward foreign exchange contracts must not exceed the total foreign exchange income from signed but unpaid export orders [2][3]. - The company must establish its own forward foreign exchange trading accounts and cannot use third-party accounts [2]. Group 3: Organizational Structure and Responsibilities - The board of directors authorizes a forward foreign exchange leadership group to oversee daily management and analysis of forward foreign exchange activities [3]. - The leadership group is responsible for supervising the business, developing annual plans, and submitting reports to the board [3][4]. Group 4: Approval Authority - Approval for forward foreign exchange transactions is tiered based on the amount of unfulfilled contracts relative to export orders, with different thresholds requiring different levels of approval [4][5]. - All decision-making bodies must operate within their authorized limits and approved plans [5]. Group 5: Business Process - The marketing center uses daily bank rates to quote prices to customers and forecasts foreign currency receipts based on customer orders [5]. - The financial center analyzes proposed transactions and submits plans for approval by the leadership group [5][6]. Group 6: Risk Management - The financial center must settle transactions according to the terms of the forward contracts and report any significant risks to the leadership group or board [6]. - If potential losses exceed 2% of the total forward exchange amount, the financial center must submit an analysis and solution for decision-making [6]. Group 7: Confidentiality Measures - All personnel involved in forward foreign exchange activities must adhere to confidentiality protocols regarding transaction details and financial status [7]. - The audit department supervises the independence of operational processes and personnel involved in these transactions [7]. Group 8: Miscellaneous Provisions - Documentation related to foreign exchange transactions must be archived for at least 15 years [8]. - Any matters not covered by these regulations will be governed by relevant national laws and regulations [8].

Core Viewpoint - The document outlines the management measures for forward foreign exchange settlement and sales by Jiangsu Lianrui New Materials Co., Ltd, aiming to regulate operations, mitigate foreign exchange risks, and ensure compliance with relevant laws and regulations [1][2]. Summary by Sections General Principles - The forward foreign exchange settlement and sales business is defined as contracts with banks to agree on future currency exchanges, including currency type, amount, exchange rate, and deadline [1]. - The measures apply to the company and its wholly-owned and controlling subsidiaries [1]. Operational Principles - The company is prohibited from engaging in foreign exchange trading solely for profit; all activities must be based on normal business operations and aimed at risk mitigation [2]. - Transactions can only be conducted with approved financial institutions [2]. Approval Authority and Responsibilities - The finance department is responsible for estimating the scope, amount, and duration of forward foreign exchange transactions and must submit plans for board approval [3]. - Certain transactions require board approval and must be submitted to the shareholders' meeting if they exceed specified thresholds related to net assets or net profits [3]. Business Management and Internal Procedures - The company must establish internal control systems and appoint professionals for investment decisions, operations, and risk management [4]. - The finance department is tasked with executing transactions, while the audit department reviews the operations and reports to the board [4]. Information Disclosure and Record Management - The company must fulfill information disclosure obligations according to relevant regulations, detailing transaction purposes, types, and expected financial impacts [6][7]. - Documentation related to forward foreign exchange transactions must be retained for ten years [8].

Core Viewpoint - The article outlines the management system for forward foreign exchange settlement and sales by Suzhou Hesheng New Materials Co., Ltd, aiming to standardize operations, mitigate foreign exchange risks, and comply with relevant laws and regulations [1][2]. Summary by Sections General Principles - The forward foreign exchange settlement and sales business is defined as agreements with banks to settle or sell foreign currencies at a future date, specifying the currency, amount, exchange rate, and deadline [1]. - The system applies to the company and its subsidiaries, requiring approval for subsidiaries to engage in such transactions [1][2]. - All operations must comply with national laws and the company's internal regulations [1]. Operational Principles - The company will not engage in foreign exchange trading solely for profit; all transactions must be based on normal business operations to hedge against exchange rate risks [2]. - Transactions are only permitted with qualified financial institutions approved by the State Administration of Foreign Exchange and the People's Bank of China [2]. - The foreign currency amount in forward contracts must not exceed 90% of the annual foreign currency payment plan [2]. Approval Authority - The board of directors and shareholders' meeting are the decision-making bodies for forward foreign exchange transactions [3]. - Specific approval thresholds are set, such as requiring board approval for transactions exceeding 10% of the latest audited net assets or 10 million RMB [3][4]. - The board's audit committee is responsible for reviewing the necessity and feasibility of transactions [4]. Management and Internal Processes - The finance department manages daily operations related to forward foreign exchange transactions [5]. - A dedicated team is established to oversee these transactions, including key executives and finance personnel [5]. - The finance department is responsible for transaction execution, risk assessment, and reporting [6]. Risk Management - A strict risk management mechanism is established to prevent and mitigate various risks associated with foreign exchange transactions [7]. - The finance department must monitor and report on the use of funds and transaction outcomes regularly [8]. Information Disclosure - The company must disclose information regarding forward foreign exchange transactions as per regulatory requirements [9]. - Losses exceeding 10% of the latest audited net profit must be disclosed promptly [9]. Miscellaneous - The system will be revised in accordance with future laws and regulations [9].