Mousse Health Sleep Co., Ltd. Report on the Feasibility of the Company and Its Subsidiaries Conducting Foreign Exchange Hedging Business
I. Purpose of Conducting Foreign Exchange Hedging Business
As Mousse Health Sleep Co., Ltd. (hereinafter referred to as the "Company") and its subsidiaries/grand-subsidiaries (collectively referred to as "Subsidiaries" within the consolidated financial statements) continuously expand their overseas operations, their foreign exchange receipts and payments are also growing. Given the impact of global economic and financial environment fluctuations, the uncertainty of global currency exchange rate volatility has increased. To prevent foreign exchange market risks and mitigate the impact of exchange rate fluctuations on the company's operating performance, and to protect the interests of the company and all shareholders, the Company and its Subsidiaries plan to conduct foreign exchange hedging business through foreign exchange derivative transactions based on specific business needs. The foreign exchange hedging business planned by the Company and its Subsidiaries is closely related to daily operations, which can enhance their ability to cope with exchange rate fluctuation risks, better hedge and prevent foreign exchange rate fluctuation risks, strengthen financial stability, and will not affect the development of the Company and its Subsidiaries' main business, with reasonable capital usage arrangements.
The risk exposure expected to be managed by the Company and its Subsidiaries through hedging business is not higher than the total risk exposure related to the Company's business operations arising from foreign exchange and other specific risks. The types of foreign exchange derivatives and the expected managed risk exposure have an economic relationship of mutual hedging of risks. The Company conducts hedging business with financial institutions approved by relevant government departments and possessing corresponding business qualifications, aiming to lock in settlement costs. The contract period matches the underlying transaction period, which can lock in revenue or costs and hedge against exchange rate fluctuation risks, thereby achieving the purpose of hedging.