Kweichow Moutai Co.Ltd(600519)
Financial risk assessment report of Group Co., Ltd
Kweichow Moutai Co.Ltd(600519) (hereinafter referred to as “the company”) inspected the financial license, business license and other materials of Kweichow Moutai Co.Ltd(600519) Group Finance Co., Ltd. (hereinafter referred to as “Maotai finance company”), the holding subsidiary of the company, and consulted the 2021 financial report of Maotai finance company in accordance with the requirements of self regulatory guidelines for listed companies on Shanghai Stock Exchange No. 5 – transactions and related party transactions, The business qualification, business and risk status of Maotai finance company are comprehensively evaluated. The details are as follows:
1、 Basic information of Maotai finance company
With the approval of the former CBRC, Maotai finance company was established on January 30, 2013 and listed on April 12, 2013. The basic information is as follows:
Legal representative: Wu Zhijun
Registered capital: 2.5 billion yuan
Financial license institution code: l0173h252030001
Unified social credit Code: 9152 Shenzhen Zhenye(Group)Co.Ltd(000006) 3064319m
Business scope: those prohibited by laws, regulations and decisions of the State Council shall not be operated; If the license (examination and approval) is required by laws, regulations and decisions of the State Council, the business shall be operated on the basis of the license (examination and approval) documents after being approved by the examination and approval authority; If the laws, regulations and decisions of the State Council stipulate that there is no need for permission (examination and approval), the market entities shall choose to operate independently. Handle financial and financing consulting, credit assurance and related 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; Underwriting corporate bonds of member units; Fixed income securities investment; Buyer’s credit for products of member units.
Ownership structure of Maotai finance company
Shareholder name shareholding amount shareholding ratio (100 million yuan) (%)
Kweichow Moutai Co.Ltd(600519) 12.75 51
China Kweichow Moutai Co.Ltd(600519) distillery (Group) Co., Ltd. 8.75 35
Kweichow Moutai Co.Ltd(600519) distillery (Group) Technology Development Co., Ltd. 2.25 9
Kweichow Moutai Co.Ltd(600519) distillery (Group) Xijiu Co., Ltd. 1.25 5
Total 25 100%
2、 Basic information of internal control of Maotai finance company
(I) internal control
According to the requirements of the company law of the people’s Republic of China and the standards for corporate governance of banking and insurance institutions, Maotai finance company has established the board of shareholders, the board of directors and the board of supervisors in accordance with the articles of association of Kweichow Moutai Co.Ltd(600519) Group Finance Co., Ltd. (hereinafter referred to as the “articles of association”), and has clearly defined the responsibilities of directors, supervisors and senior management in internal control, and established the board of shareholders, the board of directors A corporate governance structure in which the board of supervisors and senior management assume their respective responsibilities, standardize operation and check and balance each other. The board of directors of Maotai finance company has five professional committees, namely: strategic decision-making committee, related party transaction Committee, nomination and Remuneration Committee, risk management committee and audit committee. The senior management team of Maotai finance company consists of one general manager and two deputy general managers; Maotai finance company has 10 functional departments in the front, middle and back office.
(II) risk identification and assessment
Maotai finance company has formulated a series of internal control and management systems, improved the risk management system, implemented the internal audit supervision system, set up the risk management committee and audit committee responsible for the board of directors, and set up the middle stage risk compliance department and background audit department to control, supervise and audit the business activities of Maotai finance company. Maotai finance company has formulated the comprehensive risk management measures, risk identification and evaluation management procedures and other systems, and established a risk identification and evaluation mechanism, so that the main risks faced by business and operation can be identified, carefully evaluated and effectively monitored in time. Each business department shall formulate corresponding standardized operation procedures, operation standards and risk prevention measures according to each business. Each department shall separate responsibilities and supervise each other, and predict, evaluate and control various risks in business operation.
(III) control activities
1. Fund management
(1) Fund settlement business. In accordance with the rules and regulations of regulatory authorities and relevant national departments, and in accordance with the requirements of laws and regulations such as the measures for the administration of enterprise group financial companies and the payment and settlement system of the people’s Bank of China, Maotai finance company has formulated business management measures such as the Interim Measures for the administration of capital payment and the measures for the administration of settlement business to standardize the operation of settlement business. At the same time, according to the requirements of laws and regulations such as the anti money laundering law, do a good job in the daily management of anti money laundering.
(2) Deposit business of member companies. In strict compliance with the relevant regulations and requirements of the people’s Bank of China and Bank Of China Limited(601988) Insurance Regulatory Commission, the measures for the administration of deposit business and operating procedures have been formulated to standardize the RMB deposit business. Strictly examine the depositor’s expense account, beneficial owner and account data, effectively ensure the capital safety of member units and safeguard the legitimate rights and interests of depositors. 2. Credit management
(1) Credit business management
Maotai finance company has formulated such systems and operating procedures as customer credit rating management measures, comprehensive credit management measures, working capital loan management measures, buyer’s credit business operating procedures, detailed rules for the implementation of credit approval procedures, strictly implemented the “separation of loan approval” system, earnestly performed the duty of Credit Business Review, adhered to the independence in the review, and strictly implemented the post loan inspection. In order to prevent credit business risks and standardize business operation procedures, Maotai finance company has formulated credit business decision-making mechanism and rules and regulations in combination with credit policy, credit management and asset management. At the same time, management measures and operating procedures have been formulated for different business varieties to effectively control business risks at the institutional level.
(2) Interbank business management
Maotai finance company formulates internal systems and operating procedures in accordance with the measures for the administration of enterprise group finance companies, the notice on regulating the interbank business of financial institutions, the notice on regulating the interbank business governance of commercial banks and other relevant laws and regulations. Carry out credit granting and daily business review of interbank business in strict accordance with the system and regulations.
According to the requirements of the working procedures of the fund trading and pricing decision-making committee, the pricing decision-making mechanism is implemented for the non settlement interbank deposits, interbank lending and other businesses involving fund trading of Maotai finance company. Business departments, pricing departments and risk management departments all participate in many links of interbank business and form a mutual restriction and supervision mechanism. Put forward opinions and suggestions on the credit line, counterparty, deposit period and deposit amount of interbank business in combination with market quotation, capital position, interest rate pricing and other factors. Carry out the five level classification of interbank assets on a quarterly basis and pay close attention to the operation of interbank assets.
3. Investment business management
Maotai finance company makes foreign investment in strict accordance with the regulatory requirements. In order to ensure the standardization of investment business, it has formulated the measures for the administration of securities investment business, the rules of procedure of the investment business review committee and other systems to standardize the decision-making mechanism, approval decision-making, counterparty management and specific business development rules for investment. The investment business of Maotai finance company adheres to the principles of safety, liquidity and profitability, makes investment strategy analysis according to the established risk preference and combined with the market trend, and carries out prudently, and completes post investment supervision and management.
4. Information system control
Maotai finance company has formulated a series of systems such as information system implementation and management measures, information system security management measures and information system operation and maintenance management measures, actively promoted the system construction in combination with the needs of business development, and successively built core business systems and anti money laundering systems. The operation of each information system is stable, and the information construction is carried out in an orderly and steady manner.
5. Internal audit control
Maotai finance company implements the internal audit supervision system, and sets up an audit department responsible for the board of directors and supervised by the board of supervisors, which is responsible for auditing the adequacy and effectiveness of the internal control of Maotai finance company, discovering problems in time and urging rectification. Every year, a third-party organization is hired to carry out the annual internal control evaluation of Maotai finance company, and the audit department shall implement the audit opinions and implement them.
6. Risk control and compliance management
Maotai finance company 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 and compliance department shall supervise and inspect the implementation of internal control, business safety risk, legitimacy, compliance, risk and effectiveness of business development of Maotai finance company, analyze and evaluate the weak links of internal control and major internal and external risk information, and urge and organize all departments to carry out the establishment and revision of rules and regulations. (IV) internal control evaluation
The governance structure of Maotai finance company is standardized, and the internal control system is sound and effectively implemented. Adhere to prudent operation and compliance operation in management; The business operation is legal and compliant, and is carried out in strict accordance with the system and process; All regulatory indicators meet regulatory requirements; The internal control system is implemented effectively and the risk is controlled at a reasonable level.
3、 Operation management and risk management of Maotai finance company
(I) operation
As of December 31, 2021, the total assets of Maotai finance company were 148118 billion yuan and negative
The total debt was 140052 billion yuan and the total owner’s equity was 8.066 billion yuan. In 2021, Maotai finance company realized interest income of 3.274 billion yuan and net profit of 1.204 billion yuan.
(II) management
Since its establishment, Maotai 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, regulations and the articles of association.
(III) regulatory indicators
As of December 31, 2021, all regulatory indicators of Maotai finance company have met the requirements of relevant regulations.
Whether the completion of regulatory indicators meets the regulatory requirements
Capital adequacy ratio ≥ 10.5% 21.40% yes
Proportion of borrowed funds ≤ 100% 0 yes
Non performing asset ratio ≤ 4% 0 yes
NPL ratio ≤ 5% 0 yes
4、 Business description of related parties and Maotai finance company
In 2021, the maximum daily deposit amount of related parties in Maotai finance company was 29.455 billion yuan, the maximum daily loan amount was 3.523 billion yuan, the maximum daily bill acceptance amount was 01 million yuan, and the maximum daily entrusted loan amount was 310 million yuan. The deposit security and liquidity of related parties and their subsidiaries in Maotai finance company are good, and there is no delay in payment due to insufficient liquidity.
5、 Risk assessment opinions
(I) Maotai finance company has legal and valid financial license and business license. (II) it is not found that Maotai finance company violates the provisions of the measures for the administration of enterprise group finance companies, and the asset liability ratio and other indicators of Maotai finance company meet the regulatory requirements.
(III) since its establishment, Maotai finance company has carried out business activities in strict accordance with the provisions of the measures for the administration of enterprise group finance companies. There are no major defects in the risk management of Maotai finance company, and the risks of deposit and loan and other financial businesses are controllable.
Kweichow Moutai Co.Ltd(600519) board of directors March 29, 2022
