Sealand Securities Co.Ltd(000750)
Internal control evaluation report in 2021
Sealand Securities Co.Ltd(000750) all shareholders:
According to the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control supervision requirements (hereinafter referred to as the enterprise internal control standard system), combined with Sealand Securities Co.Ltd(000750) (hereinafter referred to as the company) internal control system and evaluation methods, on the basis of daily supervision and special supervision of internal control, We evaluated the effectiveness of the company’s internal control on December 31, 2021 (the benchmark date of the internal control evaluation report).
1、 Important statement
It is the responsibility of the board of directors of the company to establish, improve and effectively implement internal control, evaluate its effectiveness and truthfully disclose the internal control evaluation report in accordance with the provisions of the enterprise’s internal control standard system. The board of supervisors shall supervise the establishment and implementation of internal control by the board of directors. The management is responsible for organizing and leading the daily operation of the enterprise’s internal control. The board of directors, the board of supervisors and the directors, supervisors and senior managers of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this report, and bear individual and joint legal liabilities for the authenticity, accuracy and completeness of the contents of the report.
The objective of the company’s internal control is to reasonably ensure the legal compliance of operation and management, asset safety, authenticity and integrity of financial reports and relevant information, improve operation efficiency and effect, and promote the realization of development strategy. Due to the inherent limitations of internal control, it can only provide reasonable assurance for the realization of the above objectives. In addition, as changes in circumstances may lead to inappropriate internal control or reduced compliance with control policies and procedures, there is a certain risk to speculate the effectiveness of internal control in the future according to the internal control evaluation results.
2、 Internal control evaluation conclusion
According to the identification of major defects in the company’s internal control over financial reporting, there are no major defects in the internal control over financial reporting on the benchmark date of the internal control evaluation report. The board of Directors believes that the company has maintained effective internal control over financial reporting in all major aspects in accordance with the enterprise internal control standard system and relevant regulations.
According to the identification of major defects in the company’s internal control over non-financial reports, the company found no major defects in the company’s internal control over non-financial reports on the benchmark date of the internal control evaluation report.
There are no factors affecting the evaluation conclusion of the effectiveness of internal control from the base date of the internal control evaluation report to the date of issuance of the internal control evaluation report.
3、 Internal control evaluation
(I) evaluation scope of internal control
Focusing on the internal environment, risk assessment, control activities, information and communication, internal supervision and other elements, the company determines the main units, businesses and matters and high-risk fields included in the evaluation scope according to the risk oriented principle.
The main units included in the evaluation scope include: the business departments and management departments of the company’s headquarters, its branches and four subsidiaries (Guohai Franklin fund management Co., Ltd., Guohai Liangshi Futures Co., Ltd., Guohai Innovation Capital Investment Management Co., Ltd. Sealand Securities Co.Ltd(000750) Investment Co., Ltd.). The total assets of the units included in the evaluation scope account for 100% of the total assets in the company’s consolidated financial statements, and the total operating revenue accounts for 100% of the total operating revenue in the company’s consolidated financial statements.
The main businesses included in the evaluation scope include: Retail wealth business, credit business, investment banking business, securities proprietary business, financial market business, asset management business, market making business of share transfer system, research and consulting business, investment consulting business, etc.
The main items included in the evaluation scope include: governance structure, development strategy, human resources, social responsibility, corporate culture, fund management, settlement and custody management, financial accounting and budget management, procurement and fixed assets management, contract and seal management, information technology management, Internet financial management, subsidiary management, connected transactions, information transmission and communication, compliance management, legal affairs management, comprehensive risk management Internal supervision, etc.
The high-risk areas of focus mainly include investment banking, securities proprietary business, financial market business, retail wealth business, asset management business, credit business, risk management, compliance management, finance and settlement management, anti money laundering management and information technology management.
The above units, businesses and matters included in the evaluation scope and high-risk areas cover the main aspects of the company’s operation and management, and there are no major omissions.
(II) internal control evaluation procedures and methods
The company’s internal control evaluation is carried out in strict accordance with the enterprise’s internal control standard system and the company’s internal control system, mainly including: formulating the internal control evaluation work plan, establishing the internal control evaluation working group, organizing self-evaluation and implementing random inspection and evaluation, summarizing the evaluation results, identifying the internal control defects, and preparing the internal control evaluation report.
During the evaluation process, the evaluation working group analyzed and identified the internal control defects and made a comprehensive and objective evaluation of the company’s internal control design and operation by comprehensively using appropriate methods such as system review, personnel interview, on-site inspection, walk through test, sampling and comparative analysis in accordance with the regulatory requirements and the company’s system, combined with the inspection of regulatory authorities, internal compliance inspection, risk monitoring, self inspection and daily audit of each unit. (III) main businesses and matters included in the scope of evaluation
1. Internal environment
(1) Governance structure
In strict accordance with the requirements of laws, regulations and normative documents such as the company law, the securities law, the regulations on the supervision and administration of securities companies, the standards for the governance of securities companies and the standards for the governance of listed companies, the company has established a corporate governance structure composed of the general meeting of shareholders, the board of directors, the board of supervisors and the management, integrated the leadership of the party into all links of corporate governance, and implemented the legal status of the party organization in the corporate governance structure. The articles of Association defines the responsibilities and authorities, rules of procedure and working procedures of the general meeting of shareholders, the Party committee, the board of directors, the board of supervisors and the management, defines the boundaries of rights and responsibilities, and forms a corporate governance mechanism of performing their respective duties, assuming their respective responsibilities, coordinated operation and effective checks and balances. The board of directors of the company has four special committees: strategy and Investment Committee, remuneration and Nomination Committee, audit committee and risk control committee, and has formulated working rules accordingly, which provides an effective institutional guarantee for the scientific and democratic decision-making of the special committee. In 2021, according to the regulatory provisions and the actual situation of the company, the articles of association, the duty performance assessment and salary management system of directors and supervisors, the rules of procedure of the strategy and Investment Committee of the board of directors, and the working rules of the Secretary of the board of directors were revised to further strengthen the construction of relevant systems of corporate governance and improve the standard level of the operation of the three committees.
(2) Development strategy
The board of directors of the company sets up a strategy and Investment Committee, which is responsible for studying and making suggestions on the medium and long-term development strategy of the company. The strategic management department is responsible for the company’s strategic planning and promotion, tracking and studying the industry dynamics, in-depth analysis of business topics, and providing support for the company’s decision-making. All departments, branches and subsidiaries shall promote the implementation of the company’s strategy within their respective responsibilities. 2021 is the first year of the company’s 14th five year plan. Under the situation of accelerated capital market reform, the company actively explores and creates differentiated competitive advantages, steadily promotes the implementation of strategic planning, and makes every effort to promote the high-quality development of the 14th five year plan to a new level.
In the implementation of the strategy, the company further refined the work in place, defined and quantified the objectives, and implemented the responsibilities to people. At the same time, the company incorporated key strategic measures and corporate culture into the annual unit assessment system, so as to promote the solid implementation of strategic planning and lay a solid foundation for the development of the company. In the first year of the 14th five year plan, the company’s comprehensive strength, customer base, business system and corporate culture have been significantly improved, the brand influence has continued to expand, and the company has won dozens of honors such as “2021 excellent competitive comprehensive securities company”.
(3) Human resources
The company has established a scientific and reasonable human resource management system covering all links such as organization and management, recruitment management, assessment and employment, training, salary and welfare, and actively explored the use of financial technology to help improve the efficiency of human resource management. In terms of organization and management, evaluate the organizational structure, post establishment and job allocation every year according to the strategic needs and business development to ensure that the organizational structure meets the needs of business development. In terms of recruitment management, according to the talent introduction needs of various departments, follow the principles of multiple channels, accurate hunting and selective employment, promote the implementation of personnel recruitment through qualification review, interview and investigation, background investigation and other procedures, strengthen the recruitment of talents for key posts such as investment research and financial technology, and provide effective talent support for business development. In terms of assessment, evaluation and employment, an assessment management system covering all employees and a standardized and clear professional and technical job evaluation and employment system have been established. Employee assessment and job evaluation and employment are organized and implemented every year according to the system, and promotion, demotion and salary adjustment are given according to the results of employee performance assessment. In terms of training, it has established a hierarchical and key talent training and training system, and adopted the combination of “Online + offline, theory + practice, tradition + innovation” to help employees improve their professional ethics, compliance risk control awareness, professional and management ability. In terms of salary and welfare, based on the needs of employees, a perfect and multi-level welfare guarantee mechanism has been established. In addition to legal items such as social insurance and housing provident fund, welfare items such as enterprise annuity, lunch subsidy, housing subsidy for expatriates, travel insurance on business and medical insurance for major diseases have also been established; At the same time, pay timely attention to the market salary dynamics, timely analyze the company’s salary competitiveness and make targeted adjustments.
In 2021, the company evaluated and adjusted the existing rank system, post value and salary system, expanded employee development channels through evaluation and optimization, and promoted the establishment of a salary evaluation mechanism with equal responsibilities and rights, so as to provide impetus for business development. Explore the establishment of training product system around the employee growth cycle; Focus on “Publicizing corporate culture, building a high professional ethics of the team, reducing costs and increasing efficiency, and creating a learning atmosphere”, and continue to train and empower employees and businesses; Provide rich training resources for all employees through Wuxi Online Offline Communication Information Technology Co.Ltd(300959) mode. Incorporate employees’ practice of corporate culture into various human resource management links such as employee recruitment, promotion, assessment and training, so as to form an effective integration of corporate culture and human resource management. Actively promote the digital transformation of human resources, promote the scientific and technological digital operation project of personnel management, continue to increase the application of informatization in human resources, and help reduce costs, increase efficiency and improve employee experience.
(4) Social responsibility
2021 is a milestone year in the history of the party and the country. In the face of the severe and complex situation intertwined with the epidemic situation in the century and the changes in the century, the company has continued to carry forward the great party building spirit in the study and education of party history, absorbed and acted as a result, successfully completed various goals and tasks throughout the year, and achieved a good start in the 14th five year plan. The total assets, net assets and consolidated revenue of the company reached a record high, and the payment of taxes and fees reached the second highest in history.
The company actively implements the ESG (environmental, social and corporate governance) responsibility concept and promotes the mutual promotion of economic value, social value and environmental value. Actively benchmarking the United Nations sustainable development goals, HKEx, gri and other international ESG reporting standards, disclosing ESG information with high standards and strict requirements, promoting management with reports, rectifying and improving against standards, constantly improving ESG work and promoting the high-quality development of the company. The company performs its duties in terms of economic performance, national service strategy, public welfare undertakings, customer service, employment and other aspects, and improves its social contribution. Throughout the year, 37 billion yuan was raised for national enterprises through bonds, IPO, private equity investment and other diversified ways. Liufeng village Party branch, which supports rural revitalization and provides targeted assistance, won the “national advanced collective for poverty alleviation”. Vigorously promote the three major projects of “customer”, “high-quality products” and “ability improvement”, and promote the continuous improvement of professional ability to create value for customers. We will continue to expand social employment, introduce external training and internal training, improve human resource management ability, and build a diversified organization. The characteristics of personnel diversification, youth and specialization are more obvious. Optimize the talent training system, promote the development of employees and provide a broader development stage for talents. The company actively implemented the double carbon strategy and issued the three-year action plan for green finance to raise green finance to the corporate strategy. Implement a number of resource conservation, energy conservation and emission reduction measures, accelerate the green transformation of the company, and achieve a year-on-year decrease in the total per capita greenhouse gas emission, per capita power consumption and per capita natural gas consumption of the company’s headquarters. Give full play to financial advantages, support the development of green industries, achieve leapfrog growth in the scale of green financing, complete multiple first order projects such as the country’s first sustainable development linked corporate bond, Guangxi’s first carbon neutral bond and Guangxi’s largest single green financial bond, and make due efforts to promote green transformation and development.
(5) Corporate culture
In 2021, the company will vigorously promote the strategy of strengthening the enterprise through culture, strengthen the publicity and implementation of corporate culture, enhance the binding and appeal of culture, and accelerate the implementation of corporate culture with national and overseas characteristics. First, pay attention to the integration with Party building. Incorporate the publicity and implementation of corporate culture construction into the key points of the annual work of comprehensively and strictly administering the party as an important part of the theme party day activities of the branch, integrate the core values into the standards of vanguard party members, and convey the connotation of corporate culture in the new era in the activities of Party building brand creation and the theme practice of “creating stars and striving to be the first and Party members’ commitment”. Second, focus on the integration with compliance risk control management. Set up a “compliance integrity day” to hold a series of activities, strengthen the construction of compliance risk control integrity culture, and deeply integrate with the company’s corporate culture, which runs through all businesses and links. Third, pay attention to the integration with human resources. Set the corporate culture Team Office in the human resources department to strengthen the penetration and integration of cultural values into employees’ thoughts and behaviors. Fourth, pay attention to the integration with the brand. Combined with the company’s corporate culture concept in the new era, upgrade the company’s VI identification system and promote the corporate culture of the company’s headquarters and branches on the wall; Complete the digital transformation of the company’s cultural exhibition hall and build a boutique display window of corporate culture and brand image; Strengthen the linkage with external publicity, make short publicity videos, and improve the spread of the company’s corporate culture. In 2021, the company became the benchmark and demonstration base of enterprise culture construction in Guangxi, and won many awards, such as the “first prize of national excellent achievements of enterprise culture” and the “golden bull Award for cultural construction in the securities industry”. 2. Risk assessment
The company strictly implements the requirements of comprehensive risk management and establishes a four-level risk management organization system of “the board of directors and its risk control committee, the board of supervisors – the management and its risk control committee – the risk management department – all business departments, branches and subsidiaries”. In 2021, the board of directors, the board of supervisors, the management, all business departments, branches and subsidiaries can effectively perform the division of responsibilities of comprehensive risk management, The full coverage of risk management is realized through the operation mechanism of multi-level, mutual connection and effective checks and balances.
The company has established and improved a comprehensive risk management system covering all risk types, business lines and subsidiaries. Under the framework of the company’s overall risk appetite determined by the board of directors, the management of the company establishes a unified risk control index system by formulating specific risk appetite, risk tolerance scheme and risk limit indicators, and realizes effective risk control through level-by-level decomposition and implementation. Establish a comprehensive risk management system
