Core Viewpoint - The company aims to engage in financial derivatives trading to effectively hedge against risks from exchange rate fluctuations, thereby enhancing financial stability and reducing operational impacts [1][2][4]. Summary by Sections 1. Overview of Trading Situation - The company, primarily engaged in the production and sale of textile fabrics and garments, seeks to mitigate risks from exchange rate fluctuations and enhance financial stability through financial derivatives trading [2][4]. - The types of financial derivatives to be traded include futures, options, forwards, and swaps, with underlying assets comprising interest rates, exchange rates, currencies, and commodities [2][3]. 2. Trading Limits, Duration, and Authorization - The maximum contract value to be held on any trading day will not exceed RMB 200 million (or equivalent foreign currency), with a validity period of 12 months from the board's approval [3][4]. - The company’s management is authorized to execute financial derivatives trading within the approved limits, ensuring efficient operations [4]. 3. Funding Sources - The funds for engaging in financial derivatives trading will come from the company's own resources, without involving raised funds [3][4]. 4. Risk Analysis and Control Measures - The company will adhere to principles of legality, prudence, safety, and effectiveness in its trading activities, avoiding purely profit-driven transactions [2][5]. - Risk control measures include clear division of responsibilities, ongoing monitoring of market prices, and strict adherence to internal procedures to mitigate operational risks [5][6]. 5. Impact on the Company and Accounting Treatment - The financial derivatives trading is designed to effectively hedge against exchange rate risks, thereby reducing operational impacts and enhancing financial stability without harming the interests of the company and its shareholders [5][6].

General Principles - The financial derivatives trading management system is established to regulate the trading activities of Shanghai Yaopi Glass Group Co., Ltd. and its subsidiaries, ensuring compliance with relevant laws and regulations [1][2] - Financial derivatives include products such as futures, options, forwards, and swaps, which can be traded on-exchange or off-exchange, and can involve various underlying assets [1] Basic Principles of Trading - The company and its subsidiaries must conduct financial derivatives trading based on legitimate, prudent, safe, and effective principles, primarily for risk hedging rather than speculative profit [2][3] - Trading is restricted to approved financial institutions with foreign exchange derivatives trading qualifications, and the company must use its own funds for such transactions [3] Approval Authority - The board of directors or shareholders' meeting serves as the approval authority for financial derivatives trading, requiring a feasibility analysis report for different asset categories or product types [4] - Specific thresholds for trading activities require additional approval from the shareholders' meeting if they exceed certain financial limits, such as 50% of the latest audited net profit or 50% of the latest audited net assets [4] Management and Workflow - The management is responsible for reviewing and deciding on strategies for managing exchange rate and commodity price risks, including establishing basic principles for financial derivatives business risk management [5][6] - The finance department handles daily operations and management of financial derivatives trading, while the legal department ensures compliance with laws and regulations [6][7] Internal Risk Control Measures - The finance department must analyze significant price fluctuations of underlying assets and report to management to prevent further risk escalation [8][9] - The risk control department supervises the execution of internal risk control measures and ensures compliance with established procedures [10] Information Disclosure - The company must disclose the purpose, types, tools, trading venues, and expected margin requirements for futures and derivatives trading, along with risk warnings [11][12] - Any significant risks or losses must be reported if they meet specific thresholds related to the company's audited net profit [12]