Shanghai Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (Group) Co., Ltd
Risk assessment report on Shanghai Fosun High Tech Group Finance Co., Ltd
According to the requirements of Shanghai Stock Exchange's self regulatory guidelines for listed companies No. 5 - transactions and related party transactions, Shanghai Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (Group) Co., Ltd. (hereinafter referred to as "the company") checked the financial license, business license and other certificates of Shanghai Fosun High Tech Group Finance Co., Ltd. (hereinafter referred to as "Fosun finance company"), And consulted the audited financial report of Fosun finance company in 2021, and evaluated its business qualification, business and risk status. The specific situation is reported as follows: I. Basic information of Fosun finance company
Fosun Finance Co., Ltd. was established on June 20, 2011 with the approval of Bank Of China Limited(601988) industry supervision and Administration Commission (now Bank Of China Limited(601988) insurance supervision and Administration Commission ", hereinafter referred to as" CBRC "), and completed the industrial and commercial registration in Putuo District, Shanghai on July 7, 2011, and officially opened in December of the same year. As of December 31, 2021, the equity structure of Fosun finance company is as follows:
Unit: RMB 10000
No. full name of shareholder contribution amount contribution proportion
1 Shanghai Fosun high tech (Group) Co., Ltd. 7650051%
2 Shanghai Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (Group) Co., Ltd. 3 Shenzhen Zhongheng Huafa Co.Ltd(000020) %
3 Yu Garden shopping mall (Group) Limited by Share Ltd 3 Shenzhen Zhongheng Huafa Co.Ltd(000020) % Shanghai
4 Nanjing Iron and Steel United Co., Ltd. 135009%
Total 15 Shenzhen Ecobeauty Co.Ltd(000010) 0%
As of December 31, 2021, the business scope of Fosun finance company is: 1) handle financial and financing consulting, credit assurance and related consulting and agency business for member units; 2) Assist member units to realize the receipt and payment of transaction funds; 3) Approved insurance agency business; 4) Provide guarantee to member units; 5) Handle entrusted loans between member units and entrusted investment of member units; 6) Handle bill acceptance and discount for member companies; 7) Handle the internal transfer settlement between member units and the corresponding settlement and clearing scheme design; 8) Absorbing deposits from member units; 9) Handle loans and financial leases for member units; 10) Engage in interbank lending; 11) Securities investment (fixed income); 12) Consumer credit for products of member units.
2、 Basic information of Fosun finance company's internal control
（1） Control environment
Fosun Finance Co., Ltd. has established the board of shareholders, the board of directors and the board of supervisors in accordance with the articles of association of Shanghai Fosun High Tech Group Finance Co., Ltd. (hereinafter referred to as the "articles of association"), clearly defined the responsibilities of the board of directors and directors, the board of supervisors and supervisors and senior managers in internal control, and established that the board of shareholders, the board of directors, the board of supervisors and the management should assume their respective responsibilities, standardize operation Corporate governance structure with mutual checks and balances. As of December 31, 2021, the board of directors of Fosun finance company has set up two special committees, namely risk management committee and audit committee. The senior management team of Fosun finance company is composed of one general manager, one deputy general manager and three general manager assistants; There are 11 functional departments.
Fosun finance company puts the strengthening of department construction, standardized operation, prevention and resolution of financial risks in the first place of all work. Based on cultivating employees with good professional ethics and professional quality and improving employees' risk prevention awareness, Fosun finance company comprehensively improves the internal control system of Fosun finance company by strengthening or improving various systems such as internal audit, training education, assessment and incentive mechanism.
（2） Risk identification and assessment
As of December 31, 2021, Fosun finance has formulated a series of internal control systems and formed a relatively perfect risk management system. Fosun finance company implements the internal audit supervision system, formulates the internal audit work regulations, audits and supervises the compliance, legitimacy and effectiveness of business activities, and evaluates the soundness and effectiveness of its internal control system and risk management. All departments and institutions shall establish risk assessment system and project responsibility management and risk prevention measures within their scope of responsibility. All departments shall separate responsibilities and supervise each other to predict, evaluate and control various risks in business activities.
Fosun finance company classifies credit assets, investment and other risk assets at five levels, truly reflects the status of risk assets, provides a basis for the provision of asset loss, and makes the provision of asset reserves according to the classification results.
（3） Control activities
1. Fund management
Fosun finance company formulates sound business management measures, defines business operation processes and effectively controls business risks in accordance with various rules and regulations of regulatory authorities and relevant national departments.
(1) In terms of fund plan management, Fosun finance company's business operation strictly follows the relevant provisions of the measures for the administration of enterprise group financial companies issued by the China Banking and Insurance Regulatory Commission for asset liability management, and ensures the safety, liquidity and efficiency of Fosun finance company's funds through the formulation and implementation of fund plan management, interbank lending business management and other systems.
(2) In terms of deposit business of member units, Fosun finance company strictly abides by the principles of equality, voluntariness, fairness and good faith, ensures the safety of funds of member units, protects the legitimate rights and interests of all parties, and implements the freedom of access in strict accordance with the relevant provisions of the people's Bank of China.
(3) In terms of centralized fund management and internal transfer settlement business, member units open settlement accounts in Fosun finance company, and realize fund settlement through the settlement platform of Fosun finance company, so as to strictly ensure the safety, quickness and smoothness of settlement, and have high data security.
2. Credit business control
According to the measures for the administration of enterprise group finance companies, the loan objects of Fosun finance company are limited to Shanghai Fosun high tech (Group) Co., Ltd. and its member units, as well as consumer credit customers who buy the products of member units.
In order to prevent credit business risks and standardize business operation processes, Fosun finance company has formulated credit business decision-making mechanisms and rules and regulations around credit policies, credit management, approval authority and asset classification, and formulated specific management methods and internal control manuals for different business varieties according to the characteristics of credit business, so as to effectively control business risks at the institutional level.
At the same time, Fosun financial company has made a strict "pre credit investigation", "loan review" and "post check" system. The loan review and audit procedures and credit risk management system have been perfected and implemented strictly in three years. In the process of specific business development, Fosun finance company abides by the principle of separation of front, middle and back offices, and ensures the effective separation of incompatible posts by establishing an organizational structure with reasonable division of labor and clear responsibilities, including effective separation of loan investigation, loan review and loan issuance, effective separation of transaction, risk and settlement, and effective separation of handling, risk control and finance; It plays the role of clear job responsibilities, mutual restriction and effective checks and balances.
3. Investment business
Fosun finance company makes foreign investment in accordance with regulatory requirements. In order to ensure the standardized implementation of investment business, Fosun finance company has established a decision-making mechanism for investment business, divided the approval authority, and formulated rules and regulations and internal control manual for counterparty management and specific business development, which provides an institutional guarantee for the scientific, efficient, orderly and safe operation of investment business and preventing investment risks.
Fosun finance adheres to the principles of safety, liquidity and profitability in its investment business. Fosun finance company has established a business organization system composed of multiple levels from top to bottom and the examination and approval system of authorized approvers, and implemented the system of separation of investment decision-making, operation, fund management, risk monitoring and audit.
Fosun finance company prudently carries out investment business, sets risk limits according to investment scale and risk tolerance, reasonably sets stop loss points, and continuously strengthens the risk control ability of investment business. The business investment direction is in line with the policy and regulatory guidance.
4. Internal audit control
Fosun finance company implements the internal audit supervision system and establishes an audit department responsible to the board of directors and supervised by the board of supervisors, which is responsible for auditing the adequacy and effectiveness of its internal control, timely reporting the problems found in the audit and supervising the rectification. Fosun finance company employs an accounting firm to carry out annual audit and evaluation every year, and the audit opinions are verified by the audit team.
5. Risk control and compliance management
Fosun finance has formulated rules and regulations related to internal control management, risk management and compliance management, and implemented comprehensive risk management, internal control, legal affairs and compliance management. The risk management department of Fosun Finance Co., Ltd. shall supervise, inspect and monitor the implementation of internal control, business safety risk, legitimacy, compliance, risk, accuracy and effectiveness of business and financial activities, analyze and evaluate the weak links of internal control, internal and external major risk information and various risks caused thereby, and be responsible for the organization and liaison of daily and on-site inspection of regulatory authorities, Be responsible for establishing and improving the comprehensive risk control and management system, supervising and organizing the sorting and improvement of the rules and regulations of each department, and reviewing and evaluating the risk of business procedures.
6. Information system control
The informatization construction of Fosun finance company was carried out in an orderly and steady manner. Fosun finance company has built an independent and controllable, safe and stable, collaborative, independent and loosely coupled information management system.
Fosun finance is committed to implementing the requirements of regulatory data governance guidelines, planning the vision of digital construction, building a unified regulatory data submission platform, gradually realizing data centralization and sharing, and providing information support services for business development.
In addition, Fosun finance insists on improving the information technology risk management and control mechanism and strengthening the management and control of various risks caused by natural factors, human factors, technical loopholes, management defects and other reasons in the process of information technology management, information technology application and information system production and operation. At the same time, Fosun finance company clarified the classification standards of it risk events and established a normalized it risk identification, monitoring and control mechanism.
（4） Overall evaluation of internal control
Fosun finance has standardized corporate governance structure, sound internal control system and effective implementation. Fosun finance company can better control the risk of capital flow in terms of capital management; In terms of credit business, corresponding credit business risk control procedures have been established to control the overall risk at a reasonable level; In terms of investment, formulate corresponding internal control mechanism for investment decision-making and carry out investment business prudently. Fosun finance company adheres to prudent operation and compliance operation in management, the implementation of internal control system is effective, and the risk is controlled at a reasonable level.
3、 Operation management and risk management of Fosun finance company
(I) operation
Audited by Ernst & Young Huaming Certified Public Accountants (special general partnership) and issued the audit report with the report number of Ernst & Young Huaming (2022) Shenzi No. 60466878b01, as of December 31, 2021, the asset scale of Fosun finance company was RMB 11.178 billion, and the annual operating income and after tax net profit in 2021 were RMB 276 million and RMB 113 million.
(II) management
Since its establishment, Fosun 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 of the people's Republic of China on banking supervision and administration, the measures for the administration of financial companies of enterprise groups, the accounting standards for business enterprises, relevant national financial laws and regulations and the articles of association.
(III) regulatory indicators
According to the measures for the administration of financial companies of enterprise groups, as of December 31, 2021, various regulatory indicators of Fosun financial company have met the specified requirements:
1. The capital adequacy ratio shall not be less than 10.5%:
At the end of 2021, Fosun finance's capital adequacy ratio was 19.36%, which met the regulatory requirements.
2. The balance of borrowed funds shall not be higher than the total capital:
At the end of 2021, Fosun Finance Co., Ltd. borrowed 0, which met the regulatory requirements.
3. The non-performing loan ratio shall not be higher than 5%:
At the end of 2021, the non-performing loan ratio of Fosun finance company was 0%, meeting the regulatory requirements.
4. The rate of non-performing assets shall not be higher than 4%:
At the end of 2021, the non-performing asset ratio of Fosun finance company was 0%, meeting the regulatory requirements.
4、 Fund income and expenditure during the reporting period
(I) deposit and loan business in Fosun finance company
As of December 31, 2021, the deposit balance (consolidated basis) of the group (the company and its holding subsidiaries / units, the same below) in Fosun finance company was RMB 974576100, accounting for 10.28% of the deposit balance (including interest receivable) of the group; The group's loan balance (consolidated basis) in Fosun finance company is RMB 1161273 million, accounting for 0.59% of the group's loan balance (including interest payable). The deposit and loan business of the group and Fosun finance company is carried out in accordance with the financial service agreement signed by both parties. The price of deposit and loan related transactions is fair, and the transaction amount and balance meet the needs of the operation and development of the group. The group's deposits in Fosun finance company are safe and liquid, and there is no delay in payment due to insufficient cash position. The above deposits and loans in the finance company did not affect the normal production and operation of the group
