1. Purpose of Conducting Foreign Exchange Hedging Business
With the continuous development of Dalian Technology Co., Ltd. (hereinafter referred to as "the Company"), the scale of import and export operations of the Company and its subsidiaries has been expanding, and the volatility of the foreign exchange market has increased. To effectively avoid risks in the foreign exchange market, prevent adverse effects from significant exchange rate fluctuations on the Company, improve the efficiency of foreign exchange fund utilization, reasonably reduce financial costs, and enhance financial stability, the Company and its subsidiaries intend to conduct foreign exchange hedging business with banks and other financial institutions that have relevant business qualifications.
2. Basic Situation of Foreign Exchange Hedging Business
1. Main Currencies and Business Types
The foreign exchange hedging business that the Company and its subsidiaries intend to conduct is limited to currencies that are the same as the main settlement currencies used in production and operations, including but not limited to US dollars and other currencies related to actual business. The foreign exchange hedging business includes but is not limited to forward foreign exchange settlements, foreign exchange swaps, foreign exchange options, interest rate swaps, interest rate swaps, interest rate options, or combinations of the above products.
2. Business Limit
The scale of the foreign exchange hedging business that the Company and its subsidiaries intend to conduct shall not exceed RMB 1 billion or the equivalent in other foreign currencies at any point within the authorization period (including the relevant amounts for re-trading the proceeds from the aforementioned transactions). The maximum margin payment shall not exceed 10% of the highest contract value held on any trading day.
3. Source of Funds
The funds for the foreign exchange hedging business that the Company and its subsidiaries intend to conduct will all come from their own funds and will not involve raised funds or bank credit funds. Apart from paying a certain proportion of margin as per the agreements signed with banks, no other funds are required. The margin will be paid using the Company's own funds or a certain proportion of the bank's credit limit. The margin payment ratio will be determined based on specific agreements signed with different banks.
4. Duration and Authorization
The authorization period for the proposed foreign exchange hedging business will be valid for 12 months from the date of approval by the Board of Directors. The above limit can be used in a rolling manner within the validity period, and the Chairman or their authorized person is authorized to implement the relevant matters of the foreign exchange hedging business within the limit. If the duration of a single transaction exceeds the validity period of the resolution, the validity period of the resolution will automatically extend until the termination of the single transaction.