Harbin Dongan Auto Engine Co.Ltd(600178)
On the of Ordnance Equipment Group Finance Co., Ltd
Risk assessment report
In accordance with the requirements of the guidelines for information disclosure of listed companies No. 5 – transactions and related party transactions of Shanghai Stock Exchange, Harbin Dongan Auto Engine Co.Ltd(600178) (hereinafter referred to as “the company”) and Ordnance Equipment Group Finance Co., Ltd. (hereinafter referred to as “the finance company”) as related parties, must be fair and reasonable in the relationship between the company and the finance company Regular risk assessment shall be conducted for loans and other related transactions. By checking the financial license, business license of enterprise legal person and other certificates of the financial company, reviewing the relevant financial statements, risk management reports and other business materials of the financial company, the company focuses on the continuous attention and evaluation of the credit risk, market risk, liquidity risk, operational risk and other risk factors and mitigation measures faced by the financial company. The report on the business qualification, legal compliance and risk assessment of the financial company is as follows:
1、 Business qualification of finance company
(I) business qualification
1. Finance company is a non bank financial institution approved by Bank Of China Limited(601988) Insurance Regulatory Commission. Holding the financial license issued by Bank Of China Limited(601988) Insurance Regulatory Commission, Certificate No.: l0019h211 Ping An Bank Co.Ltd(000001) ; It holds the business license issued by Beijing Administration for Industry and commerce, and the unified social credit code is 91110 Berry Genomics Co.Ltd(000710) 9336571.
2. The registered capital of the finance company is 3033 million yuan, including 694.56 million yuan invested by China Ordnance Equipment Corporation, accounting for 22.90% of the registered capital; Nanfang Industrial Asset Management Co., Ltd. contributed 685.46 million yuan, accounting for 22.60% of the registered capital; China Chongqing Changan Automobile Company Limited(000625) Group Co., Ltd. contributed 402.49 million yuan, accounting for 13.27% of the registered capital; The other 27 shareholders contributed RMB 125049 million, accounting for 41.23% of the registered capital. 3. Legal representative of finance company: Cui Yunjiang.
4. Registration and place of business of the financial company: 5 / F, No. 3 scientific research office building, No. 10 courtyard, Lane ditch, Haidian District, Beijing.
(II) business scope
After checking the financial license, business license and other certificates of the finance company, the permitted business scope of the finance company includes: handling financial and financing consulting, credit assurance and relevant consulting and agency business for member units; Assist member units to realize the receipt and payment of transaction funds; Approved insurance agency business; Provide guarantee to member units; Loans between members and entrusted investment units; Handle bill acceptance and discount for member companies; Handle the internal transfer settlement between member units and the corresponding settlement and clearing scheme design; Absorbing deposits from member units; Handle loans and financial leases for member units; Engage in interbank lending; Issue financial corporate bonds upon approval; Underwriting corporate bonds of member units; Equity investment in financial institutions; Securities investment; Consumer credit, buyer’s credit and financial leasing of products of member units. 2、 Internal control of finance company
(I) internal control environment
1. Organizational structure of finance company
The finance company has established the board of shareholders, the board of directors and the board of supervisors in accordance with the company law, the measures for the management of enterprise group financial companies and other relevant provisions and the corporate governance system of the articles of association of Ordnance Equipment Group Finance Co., Ltd., and performed its duties in accordance with the relevant rules of procedure. At the same time, the financial company has set up the company’s organizational structure according to the principle of mutual checks and balances among decision-making system, execution system and supervision and feedback system.
2. Establishment and main responsibilities of the third meeting
(1) Shareholders’ meeting
The shareholders’ meeting of the finance company, which is composed of all shareholders, is the authority of the company and exercises the following functions and powers: deciding on the company’s business policy and investment plan; Elect and replace directors who are not staff representatives, and decide on matters related to the remuneration of directors of the company; Elect and replace supervisors who are not staff representatives, and decide on the remuneration of supervisors of the company; Review and approve the report of the board of directors; Review and approve the report of the board of supervisors; Review and approve the company’s annual financial budget plan and final account plan; Review and approve the company’s profit distribution plan and loss recovery plan; Make resolutions on the increase or decrease of the company’s registered capital; Make resolutions on the issuance of corporate bonds; Make resolutions on the transfer of capital contributions by shareholders to persons other than shareholders; Make resolutions on the merger, division, transfer, change of corporate form, dissolution and liquidation of the company; Amend the articles of association.
(2) Board of directors
The board of directors shall exercise the following functions and powers: be responsible for convening the shareholders’ meeting and reporting to the shareholders’ meeting; Implement the resolutions of the shareholders’ meeting; Decide on the company’s annual business plan and major investment plan, and supervise the implementation; Formulate the company’s annual financial budget plan and final account plan; Formulate the company’s profit distribution plan and loss recovery plan; Formulate plans for the company to increase or reduce its registered capital and issue corporate bonds; Formulate plans for merger, division, change of corporate form, termination, liquidation and dissolution of the company; Formulate the company’s basic management system, supervise the implementation of various rules and regulations, and determine the setting of the company’s internal management organization; Appoint or dismiss the general manager of the company, appoint or dismiss the deputy general manager and financial director of the company according to the nomination of the general manager, and decide on their remuneration; Formulate the amendment plan of the articles of Association; Review and approve the pledge of shares held by shareholders; Other functions and powers as otherwise stipulated in the articles of association or authorized by the shareholders’ meeting.
(3) Board of supervisors
The board of supervisors shall exercise the following functions and powers: inspect the company’s financial affairs; Supervise the acts of directors, general manager and other senior managers in violation of laws, regulations, the articles of association and the resolutions of the shareholders’ meeting when performing their duties of the company, and require the directors, general manager and other senior managers to correct when their acts harm the interests of the company; Propose to convene an extraordinary shareholders’ meeting; Other functions and powers stipulated by laws, regulations and the articles of association.
3. Responsibilities of relevant professional committees
(1) Strategy Committee
The strategy committee of the board of directors is a professional committee under the board of directors, which is mainly responsible for studying and making suggestions on the company’s annual business plan, medium-term or long-term development strategic planning, etc. Main responsibilities and authorities of the strategy committee: study and put forward suggestions on the company’s annual business plan, medium-term or long-term development strategic plan, etc; Study and put forward suggestions on major investment, acquisition, sale, asset restructuring, financing and other schemes that need to be deliberated and decided by the board of directors or the shareholders’ meeting as stipulated in laws, regulations, rules and other normative documents and the articles of Association; Study and put forward suggestions on other major issues affecting the development of the company; Check the implementation of the above matters; Other matters authorized by the board of directors.
(2) Risk control committee
The risk control committee of the board of directors is the working body under the board of directors and the highest decision-making body of the company’s risk management. Main responsibilities and authorities of the risk control committee: organize feasibility risk demonstration of major business operations; Coordinate the handling of major risk problems in the operation and management of the company; Examine and approve the responsibility identification of non-performing assets and the management and disposal plan of non-performing assets; Review the company’s risk management report; Approve the company’s asset classification results; Other risk management decisions.
(3) Audit Committee
The audit committee of the board of directors is a professional committee under the board of directors, which is mainly responsible for the communication, supervision and verification of the company’s internal and external audit. Main responsibilities and authorities of the Audit Committee: supervise the company’s internal audit system and its implementation; Responsible for the communication between internal audit and external audit; Review the company’s financial information and its disclosure; Review the company’s internal control system and audit major related party transactions; Other matters authorized by the board of directors of the company.
(4) Remuneration and assessment committee
The board of directors sets up a professional assessment committee, which is mainly responsible for the assessment of senior executives. Main responsibilities and authorities of the remuneration and assessment committee: responsible for formulating and reviewing the remuneration policies and plans of the company’s senior executives; Formulate salary plans or schemes according to the main scope, responsibilities and importance of senior management positions and the salary level of relevant positions in other relevant enterprises; Salary plans or schemes mainly include but are not limited to performance evaluation standards, procedures and main evaluation systems, and main schemes and systems of rewards and punishments; Review the performance of duties of senior managers of the company and conduct annual performance evaluation; Supervise the implementation of the company’s salary system; Other matters authorized by the board of directors.
4. Responsibilities of the company’s management
(1) Senior management
Main responsibilities of the senior management: responsible for implementing the decisions of the shareholders’ meeting and the board of directors; Be responsible for formulating specific rules, regulations and processes of the company; Establish procedures and measures for identifying, measuring, monitoring and controlling risks; Be responsible for establishing and improving the internal organization and ensuring the effective performance of various responsibilities of internal control.
(2) Loan approval committee
The main responsibilities of the loan approval committee: to make approval decisions on the relevant working systems and procedures of the company’s credit business; Make approval decisions on the credit business and other related businesses declared by the credit business department.
(3) Investment decision making Committee
The main responsibilities of the investment decision-making committee are: to approve and make decisions on the relevant working systems and procedures of the company’s investment business; Examine and approve the investment business and other related businesses declared by the investment business department.
(4) Main business and management department
According to the prudent principle of separating the front, middle and back office, the finance company has front office business departments such as credit business department 1, credit business department 2, auto finance department and investment business department; Legal and risk management department, audit department, planning and finance department, fund settlement department and other middle and back office management departments; And management support departments such as general management department, party masses department, discipline inspection department, strategic research department and information technology department.
(II) internal control activities
In order to effectively control various business risks, the finance company has established whole process risk control measures in various main business links and formulated corresponding risk control systems such as internal control manual. The main control activities are:
1. Internal audit control
The finance company implements the internal audit supervision system, establishes the internal audit department – Audit Department, which is responsible for the board of directors, establishes relatively complete internal audit management methods and operating procedures such as the management measures for internal audit, and strengthens the internal audit and supervision of various operation and management activities of the finance company. The audit department shall supervise and inspect the implementation of internal control, the legality, compliance, safety, accuracy and effectiveness of business and financial activities of the financial company, find the weak links of internal control, imperfect management and various risks caused thereby, and put forward valuable improvement opinions and suggestions to the company.
2. Settlement business control
In accordance with the provisions of the people’s Bank of China, the CBRC and other regulatory authorities, the finance company has formulated business management measures and operation processes such as RMB settlement account management, settlement business management measures and RMB deposit management measures, so as to specify operation norms and control standards in the whole process and effectively control the risks of settlement and capital business. Within the scope of supervision, strictly follow the principles of equality, voluntariness, fairness and good faith for customers’ capital settlement and deposit business, so as to ensure the safety of customers’ funds and safeguard customers’ legitimate rights and interests. Strictly implement the centralized management of funds, and take the powerful information system as the support to strictly ensure the safety, quickness and smoothness of settlement, as well as high data security.
3. Credit business control
The finance company has established the credit management mechanism of “separation of loan approval and graded approval”, the internal control measures of the whole business process, and the identification and investigation system of relevant responsibilities, and formulated various perfect credit business management methods and corresponding operation processes, such as unified credit management measures and RMB loan management measures. According to the business process of “pre credit investigation, loan review and post loan check”, the relevant responsibilities are divided. The investigation team of the business department is responsible for the pre credit investigation, and is responsible for the completeness and accuracy of the investigation. The reviewers of the risk management department are responsible for the review of risks and bear the responsibility of oversight; The loan examination and approval committee shall be responsible for the examination and approval of loan projects and bear the responsibility for errors in examination and approval; Loan granting personnel, post loan management personnel and non-performing asset clearance personnel are respectively responsible for loan granting, post loan inspection, risk disposal and asset clearance, and bear corresponding responsibilities.
4. Information system control
The finance company attaches great importance to information work, has built an efficient and safe information system to support business development and internal control, continues to iteratively upgrade information to improve the level of management ability, and takes the construction of remote disaster recovery center and independent computer room to ensure the security of financial information.
(III) internal control evaluation
The financial company has a sound corporate governance structure, standardized management and operation, and established an organizational structure with reasonable division of labor, clear responsibilities and clear reporting relationship, which provides necessary preconditions for the feasibility, sufficiency and effectiveness of risk management and internal control. At the same time, the establishment of specialized agencies such as the risk control committee, audit committee and Strategy Committee under the board of directors provides the basis for the steady operation and sustainable development of the company. In addition, the finance company attaches great importance to the construction of internal control system and whole business process risk management system, and ensures the effective implementation of internal control system through the principle of effective and prudent separation of front, middle and back office. In terms of management, it adheres to prudent operation and compliance operation, and the risk is controlled at a reasonable level.
3、 Operation of finance company
As of December 31, 2021, the total consolidated assets of the unaudited finance company were 78232942700 yuan, the deposit and customer deposit were 66329154200 yuan, and the net assets were 8501816000 yuan; In 2021, the total consolidated profit of the finance company was 9787168 million yuan and the net profit was 7895492 million yuan.
4、 Risk management of finance company
Since its establishment, the finance company has always adhered to the principle of sound operation, standardized its business behavior and strengthened its internal management in strict accordance with the company law of the people’s Republic of China, the law on banking supervision and administration, the accounting standards for business enterprises, the measures for the administration of financial companies of enterprise groups and other relevant national financial regulations, regulations and the articles of association. According to the internal evaluation of risk management of the finance company, no major defects are found in the risk control systems such as relevant funds, credit, investment, audit and information management.
(I) main regulatory indicators
According to Article 34 of the measures for the administration of financial companies of enterprise groups, as of December 31, 2021, all regulatory indicators of the financial company have met the specified requirements.
1. The capital adequacy ratio shall not be less than 10%
Capital adequacy ratio =
