Zheng Quan Zhi Xing·2025-08-13 12:19Core Viewpoint - The company intends to conduct foreign exchange derivative trading to mitigate currency and interest rate risks due to increasing foreign exchange inflows and outflows as its business expands [1][2]. Summary by Sections Transaction Overview - The purpose of the transaction is to effectively hedge against exchange rate and interest rate risks, enhancing the company's financial stability [1]. - The total trading limit for foreign exchange derivatives is set at a maximum of $10 million, with a margin and premium cap of $10 million, valid for 12 months from the board's approval [1]. - The funding for these transactions will come from the company's own and borrowed funds, without involving raised capital [2]. - The trading methods include foreign exchange swaps, options, interest rate swaps, and structured forwards, with no offshore derivative trading planned [2]. - The validity of the trading limit is effective for 12 months from the board's approval date [2]. Review Procedures - The company held board and supervisory meetings on August 12, 2025, to approve the foreign exchange derivative trading proposal, which does not require shareholder approval [2]. Risk Analysis and Control Measures - The potential risks include market risk from derivative trading losses, internal control weaknesses, and operational risks due to system failures or improper handling of derivative information [2]. - The company has established clear regulations regarding trading limits, types, approval authority, internal review processes, and risk management to mitigate these risks [2][3]. Impact on the Company and Accounting Treatment - Engaging in foreign exchange derivative trading aims to enhance the company's ability to manage foreign exchange volatility risks, thereby protecting profits and shareholder equity [3]. - The company will account for these transactions in accordance with relevant accounting standards, reflecting the impacts on the balance sheet and income statement [3]. Sponsor's Review Opinion - The sponsor has confirmed that the company has followed necessary approval procedures for the foreign exchange derivative trading business, and there are no adverse effects on the company or its shareholders [3][4].