I. Background of the Company's Foreign Exchange Derivative Business
With the continuous development of Wuxi Honghuan New Materials Technology Co., Ltd. (hereinafter referred to as "the Company"), the international business has been expanding, primarily using the US dollar, and is influenced by international politics and economic uncertainties. The foreign exchange market volatility has increased. The company plans to develop foreign exchange derivative business to manage risks and meet operational needs.
II. Overview of the Company's Foreign Exchange Derivative Business
(1) Investment Amount
The company plans to invest no more than $500,000 in foreign exchange derivative business, which may be used for hedging purposes.
(2) Investment Methods
The foreign exchange derivative business mainly includes forwards, swaps, options, and combinations thereof. The basic products include interest rates, exchange rates, and commodity prices, which can be traded or settled in cash.
Foreign exchange derivative business may involve various types, including but not limited to foreign exchange spot transactions, foreign exchange forwards, interest rate swaps, and commodity swaps.
(3) Validity Period
The investment validity period shall not exceed thirty-six months. The authorization will be effective until the company’s annual general meeting in 2025, which will review the authorization.
(4) Funding Sources
The funding for the foreign exchange derivative business will come from the company's own funds. The company is not allowed to directly or indirectly use raised funds for this business.