Purpose of Conducting Foreign Exchange Hedging Business
With the continuous expansion of the company's import and export business, the demand for foreign currency settlement has increased, and exchange rate fluctuations may impact the company's operating performance. To effectively avoid and prevent adverse effects from significant exchange rate fluctuations on the company's operations and to enhance financial stability, the company and its subsidiaries plan to conduct foreign exchange hedging business. This hedging activity will not significantly adversely affect the development of the company's main business.
Foreign Exchange Hedging Business Details
1. Main Currencies and Business Types
The foreign exchange hedging business that the company and its subsidiaries plan to conduct is limited to currencies that are the same as the main settlement currencies used in the company's production and operations, including but not limited to US dollars, euros, and other currencies related to actual business. The types of foreign exchange hedging business include but are not limited to forward foreign exchange settlement, foreign exchange swaps, foreign exchange options, interest rate swaps, currency swaps, interest rate swaps, and interest rate options.
2. Business Scale and Funding Sources
The company and its subsidiaries plan to use their own funds to conduct foreign exchange hedging business with a limit not exceeding RMB 150 million (i.e., the hedging balance at any point in time will not exceed RMB 150 million and can be reused).