Shanghai Huayi Group Corporation Limited(600623)
About Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd
Continuous risk assessment report
Shanghai Huayi Group Corporation Limited(600623) in accordance with the requirements of self regulatory guidelines for listed companies on Shanghai Stock Exchange No. 5 – transactions and related party transactions, through the inspection of the financial license, business license and other certificate materials of Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd. (hereinafter referred to as “Huayi finance company”), and reviewed the periodic financial reports of Huayi finance company, including balance sheet, income statement, etc, The business qualification, business and risk status of Huayi finance company are evaluated. The specific situation is reported as follows: I. Basic information of Huayi finance company
Historical evolution:
Huayi finance company was officially established in August 2012 with an initial registered capital of 300 million yuan; The first capital increase (the same proportion) was realized in February 2014, and the registered capital increased from RMB 300 million to RMB 600 million (including US $5 million); The increase of registered capital and equity adjustment were implemented in November 2015, and the registered capital increased from RMB 600 million (including US $5 million) to RMB 1 billion (including US $5 million); On December 31, 2016, the shareholder of the company, Shanghai sanaifu new materials Co., Ltd., transferred its 6% equity of the finance company to Shanghai Huayi (Group) company.
After the change is completed, the composition of shareholders of the company is changed to: Shanghai Huayi (Group) company, with a capital contribution of 300 million yuan and a capital contribution ratio of 30% Shanghai Huayi Group Corporation Limited(600623) , with a contribution of 640 million yuan (including US $3 million), accounting for 64% Shanghai Chlor-Alkali Chemical Co.Ltd(600618) , with a contribution of 60 million yuan (including US $2 million), accounting for 6%.
Financial license institution code: l0154h231 Ping An Bank Co.Ltd(000001)
Unified social credit code of business license of enterprise legal person: 9131 Shenzhen Fountain Corporation(000005) 12845410 registered capital: 1 million yuan
Legal representative: Chang Daguang
Registered address: 15 / F, No. 1271, Pudong South Road, China (Shanghai) pilot Free Trade Zone
Postal Code: 200122
Enterprise type: limited liability company (sole proprietorship of legal person invested or controlled by non natural person) business scope: 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; Handle entrusted loans between member 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; Portfolio investment (except stock investment).
2、 Basic information on risk management of Huayi finance company
(I) risk management environment
1. Corporate governance structure
At the beginning of preparation, the company has established a corporate governance structure composed of the board of shareholders, the board of directors, the board of supervisors and senior managers, implemented the general manager responsibility system under the leadership of the board of directors, and formed an operation mechanism with clear rights and responsibilities, standardized operation, mutual coordination and mutual checks and balances among power organs, decision-making organs, supervision institutions and management; Secondly, establish a streamlined and efficient internal organization, staffing and operation authorization management system.
Since the preparation and operation of the company, on the basis of establishing an internal control management mechanism that is compatible with the nature, scale, complexity and risk characteristics of the company’s current business and consistent with the overall business development strategy, management ability, capital strength and overall risk level that can be borne, the company has taken into account the foresight of business development, and incorporated the business system in line with the strategic development direction into the system system in advance, Reflect the principle of “business development, system first”.
2. Risk management structure
The company has a sound risk management structure.
Vertical level: each functional department is the first line of defense; The company’s management and professional committees (credit review committee and investment decision-making committee) are the second layer of defense; The board of directors and special committees of the company are the third layer of defense.
Horizontal arrangement: each business department is the first line of defense for risk prevention and control; Risk management department is the second line of defense for risk prevention; Audit is the third line of defense for risk prevention; Computer information technology security is the fourth line of defense.
This constitutes a crisscross network risk prevention and control system as shown in the figure below. By clarifying the structure and responsibilities, establishing the system and management method system, using specific risk management methods and measures, according to the risk management reporting process, relying on information technology construction and security as the supporting basis, a compliance risk management structure with reasonable division of labor, clear responsibilities at all levels and clear reporting relationship suitable for its own scale has been established.
(II) risk identification, assessment and monitoring
The risks faced by the company in its business activities mainly include the possible losses to the company’s assets due to customer credit risk, market risk and interest rate risk in the process of credit, investment and interbank business.
The senior management of the company has a credit review committee and an investment decision-making committee as the company’s permanent collective review body for credit (including interbank) and investment business, which are respectively responsible for the risk review of credit business, interbank credit and investment business.
1. Credit business
In terms of credit business, the company’s customer credit rating management measures and credit business management measures clearly identify and measure customer credit risk from both qualitative and quantitative dimensions. In the actual control of credit business, the company reasonably determines the credit line based on the fluctuation of the chemical industry market, the management ability of the management of member units and the financial operation. In terms of the monitoring of credit business, the company carries out post loan inspection through the combination of on-site and off-site, monitors the purpose and recoverability of loans, tracks and understands the operation and financial status of customers, and regularly classifies the issued credit assets at five levels, so as to realize the post loan management and risk monitoring of credit assets.
2. Interbank business
Interbank business mainly focuses on low-risk interbank deposits, interbank borrowing, interbank certificates of deposit and bill rediscount business. For counterparties engaged in interbank business, interbank credit lines need to be established in our company. According to the company’s net capital and the risk status of counterparties, the company’s interbank customer credit management measures verify and adjust the interbank customer credit to prevent excessive risk concentration.
3. Investment business
In terms of securities investment, the company has formulated the measures for risk management of proprietary securities investment, operating procedures for selection of counterparties for proprietary securities investment and other relevant systems to effectively control the risk of securities investment from the two dimensions of counterparties and investment products, so as to ensure that the credit risk of counterparties involved in investment business can be effectively controlled and the business is prudent and compliant.
For the investment assets held by the company, according to the risk levels of different categories, the company has defined the “three lines” of risk monitoring of post investment observation line, early warning line and stop loss line, monitored the market risk every day, and ensured that the market risk of the company is controllable through appropriate control measures.
By the end of 2021, the investment assets of the company were classified as normal.
(III) control activities
1. Settlement and fund management
In terms of settlement and fund management, Huayi Finance Co., Ltd. has formulated a series of systems and norms, such as the measures for the management of enterprise accounts of Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd., the measures for the management of settlement business of Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd., and the operating procedures for agency enterprise payment of Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd., in accordance with regulatory laws and regulations, so as to effectively control the fund security and settlement risks.
(1) Enterprise account opening and settlement business
Huayi finance company opens a special account in the cooperative bank to collect the funds of enterprises within the group. The company adopts the linkage between internal settlement account and external bank account to carry out corresponding fund settlement and accounting treatment. When the financial company handles internal settlement and external payment, the enterprise submits electronic payment application through the fund management system. When handling external payment business, there must be sufficient funds in the account to ensure payment, and the financial company will not overdraw. The fund management system has set strict access control measures to ensure the fund security and settlement convenience of member units through information system control and sound system control.
(2) Business member deposit
Huayi finance company has formulated the measures for the management of deposit business of member units of Shanghai Shanghai Huayi Group Corporation Limited(600623) Finance Co., Ltd. to strengthen the management of deposits of member units and standardize deposit business. The finance company can absorb the RMB and foreign currency deposits of member enterprises. The company strictly implements the regulatory requirements of the CBRC and the people’s Bank of China to fully ensure the capital safety of member units.
(3) Liquidity management
Huayi finance company has always adhered to the low tolerance policy on liquidity risk. The group and the board of directors and management of the company attach great importance to and are cautious about liquidity risk prevention and control, and the liquidity risk is low.
In terms of daily position management, Huayi finance company continues to optimize the reserve model, and has been able to reasonably estimate the daily position arrangement through the precipitation of many years of historical data; By monitoring the liquidity level and deposit loan ratio indicators on a daily basis, it is ensured that the deposit loan ratio is maintained within a reasonable range, and the liquidity indicators meet the regulatory requirements. In 2021, except that the return of funds from member units at the end of the year led to a significant increase in liquidity indicators, the company’s monthly liquidity indicators changed smoothly, with a small fluctuation range, and the overall liquidity was abundant. The liquidity indicators at the end of the month basically remained above 55%, with an annual average of 61.40%.
(4) Financing
In terms of financing channels, Huayi finance company continues to broaden the interbank counterparties that meet the company’s access standards, expand the interbank credit varieties with counterparties, and strengthen the liquidity management ability.
At present, Huayi finance company has good capital liquidity, and there is no need for large-scale financing to supplement liquidity. The company can conduct interbank lending and bill rediscount business as a temporary management means to supplement capital liquidity.
2. Credit management
Huayi finance company has established a credit management system with clear division of responsibilities, separation of loan review and mutual supervision and restriction between front, middle and back offices. The credit review committee under the board of directors of the company is a deliberative body to review and make decisions on the company’s credit business, credit business and related matters, and provide professional opinions to the general manager. The general manager has the final “one vote veto” on the application approved by the review.
The scope of credit business objects of Huayi finance company shall comply with the provisions of the measures for the administration of enterprise group finance companies. According to the requirements of the regulatory regulations of the CBRC, the company has formulated the measures for the management of working capital loans, the measures for the management of fixed asset loans and the measures for the management of M & A loans for different types of loans to standardize the business development requirements, regularly classify the risk of credit assets according to the relevant provisions of the five-level risk classification of credit assets, and withdraw the provision for loan losses according to the degree of loan losses.
Since the company started its business, the principal and interest of its self operated loans have not been overdue, and there are no non-performing assets. In 2021, the loan provision rate of our company was 2.62%, which met the requirements of the measures for the administration of loan loss provision of commercial banks, and the provision coverage was sufficient.
3. Information system
The information group of the general management department of Huayi finance company is specially responsible for the company’s information technology work. The company’s core business system is the atom system developed by external suppliers, and the system is continuously updated and upgraded according to business needs. The function of the system adapts to the business model of the financial company, can realize the direct connection with the sap fund plan management system of the group company and the finance and Bank of the core bank, and the operating environment of the company’s main system can achieve the security of financial level.
The company has made detailed regulations on the user and authority management of the system, and multi-level approval is set for each key control link to control operational risk. The authorities of incompatible positions such as system managers and business operators are strictly separated; All operations of the core system are traceable, and traces are left for future reference.
4. Compliance risk control
The board of directors of the company is ultimately responsible for compliance and is responsible for approving compliance policies; The board of supervisors of the company is responsible for supervising the implementation and effectiveness of compliance policies, regularly listening to the company’s compliance risk management report and evaluating the effectiveness of risk management; A risk management committee is established under the board of directors to review and guide the compliance policies specifically responsible by the company’s management.
The management of the company is responsible for revising the compliance policies of the whole company in due time according to the compliance risk management status and the changes of laws, rules and standards. The risk management department is responsible for the company’s compliance risk management. It is the management department of the company’s compliance risk and is directly responsible to the management.
The company follows strict authorization management and strictly follows the process approval system for the development of various businesses; The company has also established an abnormal event reporting mechanism for timely reporting of problems found, forming an effective risk early warning system.
5. Audit supervision
As the third line of defense for risk prevention and control, the Audit Department of the company independently carries out compliance supervision and inspection of various businesses. The management must put forward rectification opinions and corrective measures according to the inspection and evaluation results of risk compliance, and urge all institutions to implement them.
According to the unified deployment of the group, the company conducts internal control evaluation every year, gradually expands the audit coverage, and increases the frequency and intensity of business audit. So far, no violations have been found in various inspections.
(IV) overall evaluation of risk management
Huayi finance company has a sound risk management system and effective implementation. In terms of capital management, the capital security risk and liquidity risk are low; In terms of credit business, the company has established corresponding credit business risk control procedures to control credit risk at a low level; In terms of investment business, the investment targets are mainly low-risk monetary funds and high-rated bond funds. The market risk of investment assets is low, and there is an effective risk prevention and control mechanism for investment assets.
3、 Operation management and risk management of Huayi finance company
(I) operation
As of December 31, 2021, Huayi Finance Co., Ltd. had total assets of 194577541 million yuan and owner’s equity of 16191615 million yuan. In 2021, the operating revenue was 4542216 yuan, with a total profit
