1. Business Overview
(1) Purpose of the Transaction
Due to the high proportion of the company's foreign sales, the scale of foreign exchange income and expenditure is substantial. To reduce risks arising from foreign exchange rate fluctuations, the company intends to engage in forward foreign exchange settlement and sale business. This business will adhere to a prudent principle and will not involve speculative or profit-driven foreign exchange trading. The aforementioned business is closely related to the company's normal production and operational needs, and the arrangement of funds for transactions is reasonable, aimed at avoiding and preventing exchange rate risks without affecting the development of the company's main business. Engaging in forward foreign exchange settlement and sale business can effectively reduce the impact of exchange rate fluctuations on the company's operations, making it both necessary and feasible.
(2) Transaction Amount
The maximum margin and premium for the forward foreign exchange settlement and sale business that the company intends to engage in (including the value of collateral provided for transactions, the expected credit limit from financial institutions, and the margin reserved for emergency measures) shall not exceed RMB 10 million (or equivalent foreign currency). The maximum contract value held on any trading day (one-sided) shall not exceed RMB 100 million (or equivalent foreign currency). The limit is valid for 12 months from the date of approval by the company's board of directors, and the aforementioned limit can be used in a rolling manner within the approval period. The transaction amount at any point during the period (including amounts related to the reinvestment of the aforementioned transaction profits) shall not exceed the approved limit.