Shandong Humon Smelting Co.Ltd(002237)
Risk assessment report on Jiangxi Copper Company Limited(600362) Group Finance Co., Ltd
Shandong Humon Smelting Co.Ltd(002237) (hereinafter referred to as "the company") has examined the financial license, business license and other certificates of Jiangxi Copper Company Limited(600362) Group Finance Co., Ltd. (hereinafter referred to as "the finance company"), reviewed the capital verification report of the finance company, and evaluated the business qualification, business and risk status of the finance company. Now the relevant risk assessment is reported as follows:
1、 Basic information
Jiangxi Copper Company Limited(600362) Group Finance Co., Ltd., established on December 8, 2006, is a non bank financial institution approved by Bank Of China Limited(601988) Regulatory Commission.
Enterprise name: Jiangxi Copper Company Limited(600362) Group Finance Co., Ltd
Type: limited liability company
Legal representative: Yu Tong
Registered capital: 2600 million yuan
Date of establishment: December 8, 2006
Registration authority: Nanchang market supervision and Administration Bureau
Address: 1100 fenghezhong Avenue, Honggutan District, Nanchang City, Jiangxi Province Financial Street Holdings Co.Ltd(000402) 5th floor, Tower B office building, Century Center
Business scope: (I) handle financial and financing consulting, credit assurance and related consulting and agency business for member units; (II) assist member units to realize the receipt and payment of transaction funds; (III) approved insurance agency business; (IV) providing guarantee to member units; (V) handling entrusted loans and entrusted investments between member units; (VI) handle bill acceptance and discount for member units; (VII) handle the internal transfer settlement between member units and the corresponding settlement and clearing scheme design; (VIII) absorbing deposits from member units; (IX) handle loans and financial leases for member units; (x) engaging in interbank lending; （11） Issue financial corporate bonds upon approval; （12） Underwriting corporate bonds of member units; （13） Equity investment in financial institutions; （14） Securities investment; （15） Buyer's credit for products of member units (for the above projects that need to be approved according to law, business activities can be carried out only after being approved by relevant departments)
2、 Basic information of internal control of finance company
(I) control environment
The company has a sound corporate governance structure and organization. In accordance with the requirements of the company law on limited liability companies and the relevant requirements of the measures for the administration of financial companies of enterprise groups, the company has established a board of shareholders, a board of directors, a board of supervisors and senior management. Establish a risk management committee and an audit committee under the board of directors; At the same time, a credit review committee and a peer Business Review Committee have been established, which are responsible to the general manager. The responsibilities and authorities, qualifications, rules of procedure, working procedures and terms of office of each special committee are specific and clear. The "three sessions and one layer" and all committees can basically perform their duties within their respective terms of reference. At present, the company has ten departments, namely: corporate business department, capital settlement department, planning and finance department, comprehensive management department, audit department, financial market department, international business department, risk management department, legal compliance department and information technology department.
(II) risk identification and assessment
In accordance with the requirements of the regulatory authorities and the group company, the company further improved the corporate governance system, optimized the construction of business system, deepened information communication and sharing, and effectively identified and managed risks by establishing three lines of defense for risk management.
The first line of defense is the core business department. It is the main body that directly faces and responds to risks. It is responsible for implementing risk management responsibilities and is the owner of risks. The second line of defense includes all supporting functional departments, which are functional departments to assist the core business departments in risk control. The third line of defense is the assurance functional department, mainly including audit, accountability and other functional departments, which is mainly responsible for inspecting and supervising the work of the first and second lines of defense to ensure that the risk control work meets the requirements of the board of directors and senior management of the finance company. In order to ensure objectivity and independence, the third line of defense has no direct control responsibility.
The main risk identification and assessment of each department are as follows:
The capital settlement department and the Department directly responsible for the company's business risk shall be the first to deal with the risk in the process of its business operation
The financial department is mainly responsible for identifying, assessing and dealing with the market
International business department.
The risk management department plans the financial department and information technology department for the specific risk management and control procedures
The second way is to conduct continuous monitoring, including assisting the business department, risk management department and legal department of the first line of defense
The defense department shall formulate various control strategies, implement policies and procedures, collect compliance department and general management department
Relevant information, establish the overall risk control concept at the organizational level, etc.
The supervision department of risk management shall carry out audit, audit, supervision and the third channel
Audit the investigation and accountability work of the audit department to guard against the effectiveness of the whole process of risk management
Conduct inspection and supervision.
(III) control activities
All businesses of the company are established in accordance with relevant laws and regulations such as the measures for the administration of financial companies of enterprise groups and the provisions of approval documents. Since its opening, it has formulated more than 180 systems, covering front, middle and back office business systems such as settlement business, credit business, investment business, foreign exchange business, risk control, information control, emergency preparedness and internal control. All regulatory indicators of the company comply with the provisions of the Interim Measures for the assessment of risk regulatory indicators of enterprise group financial companies. In accordance with the spirit and requirements of the comprehensive risk management of the China Banking and Insurance Regulatory Commission, the company adheres to the business philosophy of "based on the group, serving the group, standardized operation and steady development". Under the severe situation of strong supervision, the company takes risk control as the primary task, actively implements the requirements of the superior supervision department, earnestly performs the responsibility of financial services to the real economy while doing well in traditional businesses such as deposit and loan, and adopts the risk-based business philosophy, We strengthened system revision and internal audit to ensure the smooth operation of various businesses.
(IV) emergency preparedness
The company has established the emergency plan for major financial risks and emergencies, which provides institutional support for the rapid and effective disposal of major financial risks and emergencies and the prevention and reduction of hazards and losses to the greatest extent. The company has also set up a leading group for emergency disposal of major financial risks and emergencies to carry out emergency disposal of emergencies in accordance with the principles of rapid response, decisive response, unified command, hierarchical responsibility, disposal according to law, prudence and meticulous disposal.
The company has also established a corresponding prevention and early warning system to strengthen the tracking and monitoring of the risk information obtained from various channels, evaluate the risk status of relevant objects, and effectively prevent the occurrence of emergencies.
(V) internal control evaluation
The company has established a relatively complete internal control system, prepared relevant internal control manuals, and conducted internal control effectiveness evaluation every year to ensure the effective conduct of business activities, protect the safety and integrity of assets, find and correct errors and prevent fraud, ensure the authenticity, legality and integrity of accounting materials, and promote the achievement of strategic objectives. At present, all businesses and matters included in the evaluation scope of the company can be carried out in strict accordance with relevant internal control systems, all internal control systems can be effectively implemented, the objectives of internal control have been achieved, there are no major defects, and the operation of the company's internal control system is effective.
3、 Operation management and risk management of finance company
(I) operation
As of September 30, 2021, the total assets were 202319704 million yuan, the total liabilities were 166159236 million yuan, and the net assets were 36160467 million yuan. In the third quarter of 2021, the operating income was 409383 million yuan and the net profit was - 607536 million yuan (the above data were not audited).
(II) management
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 banking supervision and administration law of the people's Republic of China, the accounting standards for business enterprises, the measures for the administration of financial companies of enterprise groups, relevant national financial regulations and rules and the articles of association. According to the understanding and evaluation of the risk management of the financial company, no major defects have been found in the risk control system.
(III) regulatory indicators
According to the provisions of the measures for the administration of financial companies of enterprise groups, all regulatory indicators of financial companies are within a reasonable range and there are no major risks.
(IV) deposits and loans of the company
According to the relevant resolutions deliberated and adopted by the board of directors and the general meeting of shareholders and the financial service agreement signed with the finance company, the company carries out deposit and loan and other financial businesses in the finance company. At the same time, the company has formulated a risk disposal plan to further ensure the safety of deposit and loan funds in the finance company, and effectively prevent, timely control and resolve deposit risks. As of December 31, 2021, the balance of deposits of the company and its subsidiaries in the finance company was 320 million yuan, and the balance of loans was 2.376 billion yuan.
4、 Risk assessment opinions
Based on the above analysis and judgment, the company believes that:
(I) the finance company has legal and valid financial license and business license;
(II) it is not found that the financial company violates the provisions of the measures for the administration of enterprise group financial companies issued by the former Bank Of China Limited(601988) Industry Regulatory Commission, and the asset liability ratio of the financial company meets the requirements of the measures; (III) since its establishment, the finance company has operated in strict accordance with the provisions of the measures for the administration of enterprise group finance companies, and there are no major defects in the risk management of the finance company. The risks of related deposit and loan business between the company and the financial company are controllable.
Shandong Humon Smelting Co.Ltd(002237)
Board of directors
March 22, 2022
