Guangzhou Yuexiu Financial Holdings Group Co.Ltd(000987)
Self evaluation report on internal control in 2021
All shareholders of Guangzhou Yuexiu Financial Holding Group Co., Ltd.:
In accordance with the provisions of the basic norms of enterprise internal control and its supporting guidelines and other internal control regulatory requirements (hereinafter referred to as the enterprise internal control standard system), combined with the internal control system and evaluation methods of Guangzhou Yuexiu Financial Holdings Group Co.Ltd(000987) (hereinafter referred to as "the company" or "the company"), on the basis of daily 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
According to the provisions of the enterprise internal control standard system, it is the responsibility of the company's board of directors to establish, improve and effectively implement internal control, evaluate its effectiveness, and truthfully disclose the internal control evaluation report. The board of supervisors supervises the establishment and implementation of internal control by the board of directors, and 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 the 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 requirements of the enterprise's 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) scope of internal control evaluation
According to the risk oriented principle, the company determines the main units, businesses and matters included in the evaluation scope and high-risk areas. The evaluation scope of the company's internal control includes five elements of internal control, such as internal environment, risk assessment, control activities, information and communication, and internal supervision. The design and operation of internal control are comprehensively evaluated from the aspects of system, process, information technology, etc. this year's evaluation covers the group company and its subsidiaries (the holding subsidiaries of subsidiaries are also included in the scope of this evaluation). The proportion of the total assets of the units included in the evaluation scope to the total assets of the company's consolidated financial statements in this year is 100%, and the proportion of the operating income of the units included in the evaluation scope to the operating income of the company's consolidated financial statements is 100%.
Business evaluation focuses on verification: non-performing asset management business, financial leasing business, investment management business, brokerage business of futures companies, asset management business of futures companies, risk management subsidiary business of futures companies, financing guarantee business, finance and reporting, fixed asset management, information system management, compliance management and other high-risk businesses and fields.
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) basic information of internal control evaluation
1. Internal environment
(1) Governance structure
In accordance with the company law and relevant laws and regulations, 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. The rights and responsibilities of the authority, decision-making body, supervision body and the management are clear and the operation is standardized, forming a mechanism of mutual coordination and mutual checks and balances. The operation of the general meeting of shareholders, the board of directors and the board of supervisors of the company is standardized. The convening and convening of relevant meetings comply with the provisions of the company law and the articles of association, and the resolutions are legal and effective.
The company and its controlling shareholders have achieved independent separation in terms of assets, finance, personnel, business and institutions, ensuring the independence of the company's operation.
Through the board of supervisors, the company is responsible for supervising the company's financial activities, the board of directors and its members, the general manager and other senior managers to prevent them from abusing their power and infringing upon the rights and interests of shareholders.
The board of directors has a strategy committee, an audit committee, a nomination committee, a remuneration and assessment committee and a risk and capital management committee to promote and standardize the operation of the company from the aspects of internal control and supervision, risk management and employee performance incentive.
The management structure system established by the company includes strategic management department, capital operation Department, risk management and legal compliance department, customer resource management and coordination department, Financial Research Institute, human resources department, office, financial center, digital technology department, party masses work department, security supervision department, audit center and Discipline Inspection Commission Office.
(2) Development strategy
The company has a strategic management department, which is responsible for the development strategy and dynamic adjustment of the group and its subordinate enterprises. The strategic management department takes the lead in preparing the company's "five-year strategic plan", focusing on the development review of the previous five-year plan, macro and industry development trends, the overall strategy of the five-year plan and the functional strategy of the five-year plan.
At the same time, the strategic management department coordinates and prepares the company's "business plan" according to the "five-year strategic plan", and the company's management publicizes and implements the company's strategic plan and strategic development objectives to employees through various meetings.
(3) Human resources
In terms of talent introduction, the company adheres to the selection standard of "openness, equality and merit selection" through diversified channels combining external recruitment and internal competition, and actively introduces professional talents from many aspects to consolidate the foundation of talent development; In terms of personnel training, the company insists on taking practicality as the standard, carries out training in an all-round and multi-level way, establishes corresponding training systems and processes, and standardizes the development of training activities; In terms of employee assessment, the company decomposes key performance indicators layer by layer in accordance with the principle of "fairness, impartiality and openness" and in combination with the responsibility orientation of departments and posts, so as to ensure the smooth achievement of the company's performance; In terms of talent development and exit, the company formulates reasonable and standardized talent promotion, job rotation and exit plans according to the results of employee performance assessment and ability evaluation, so as to form an employment culture in which people can go up and down, enter and leave. The company will strive to achieve efficient and rational human resource management system, so as to fully mobilize the company's human resources and make full use of its human resources.
(4) Internal audit
The audit committee under the board of directors of the company is mainly responsible for the communication, supervision and verification of internal and external audit of the company. The company has set up an audit center to perform supervision and inspection duties, accept the guidance and supervision of the audit committee, and report to the Audit Committee on the construction and implementation of the company's internal control and internal audit.
The audit center determines the focus of the annual internal audit work in combination with the actual situation of the company, and prepares the annual internal audit project plan, which can be implemented after approval.
(5) Corporate culture
The company actively builds a corporate culture in line with the characteristics of non bank financial institutions. In daily work, actively practice the following corporate culture concepts:
Vision: to become a leading and respected diversified financial investment group in China
Mission: repay customers, employees, shareholders and society
Core values: faith, credit, trust and confidence
Enterprise spirit: constantly surpass and become better
Corporate style: sunshine, passion, simplicity and inclusiveness
Management philosophy: steady, professional, collaborative, innovative and based on the struggle
2. Risk assessment
(1) General situation
The company has established a four level internal control organizational structure for risk identification and assessment. The first level is the board of directors, the second level is the risk and capital management committee under the board of directors, the third level is the comprehensive risk management mechanism before, during and after the event led by the risk management and legal compliance department, and the fourth level is the front-line risk control system composed of functional management departments and subordinate companies. The board of directors is mainly responsible for formulating the company's overall risk management policy from the perspective of corporate governance; The risk and capital management committee is mainly responsible for the identification, assessment and disposal of the company's overall risks; The risk management and legal compliance department is responsible for the construction, supervision and inspection of the full-time risk management system, and is responsible for the pre audit, in-process monitoring and post supervision of various business risks of the company; Each business and functional department is responsible for the risk self-control of each unit.
(2) Risk identification and response
The risks affecting the company's business activities mainly include strategic risk, credit risk, market risk, operational risk, liquidity risk and other related risks. The company has sufficient capital and strong ability to resist risks.
① Strategic risk
Strategic risk refers to the risk caused by deviation from the main business, unclear and unfocused main business, inappropriate strategy or changes in the external business environment. The company has established a perfect strategic management system, which runs the strategic risk management through the whole process of strategy formulation, strategy implementation and strategy review. In the company's annual risk policy, determine the classification of main business and other businesses according to regulatory requirements to ensure that the main business is clearly focused; Determine the risk nature of the business according to the risk preference and risk classification, so as to ensure the steady implementation of the strategy, serve the real economy and dynamic self optimization; On this basis, a product line meeting the legal requirements is formed to support the company's efficient operation and obtain and maintain comparative competitive advantage; In addition, in terms of industrial policies, we will effectively support green finance and Inclusive Finance, and in terms of regional policies, we will further focus on core cities such as Guangdong, Hong Kong, Macao, Dawan District, Yangtze River Delta and Chengdu Chongqing urban agglomeration. At the same time, the company pays real-time attention to the changes of national policies and market environment, continuously monitors and analyzes the policy factors, economic factors, social factors and technical factors affecting the development of the company, and identifies and prevents systemic financial risks from the dimensions of time and structure; Combined with the internal resources and capabilities of the company, SWOT and other tools are used to dynamically analyze the advantages and disadvantages, opportunities and threats faced by the company's development, and summarize and refine the core competitiveness and the direction to be strengthened and improved in the next step; Make rolling adjustment to the company's strategic plan and business plan at least every year, and conduct post evaluation on the implementation
② Credit risk
Credit risk refers to the risk of loss caused by the failure of the borrower or counterparty to perform. The company's credit risk mainly comes from the proprietary investment, financial leasing, debt investment, financial guarantee and other businesses of its holding subsidiaries.
The company has formulated clear customer and business risk policies and risk pricing access standards, continuously improved the access requirements of customers, businesses and other dimensions, and the access rating of customers of credit business is AA - or above. It continues to strengthen the concentration limit control requirements of industries, regions, customers and businesses of credit business, and reduce the non-performing rate, loan allocation ratio, provision coverage RAROC (risk adjusted rate of return) and other important indicators are included in the annual performance appraisal and continuously monitored. The company has established internal rating system, unified credit system, collateral management system, investigation, review and evaluation system, post lease loan and post guarantee management system to manage the whole process of credit risk business. The company carries out dynamic risk identification, measurement and evaluation for all businesses bearing credit risk, defines credit rating access requirements, and strengthens unified credit management, limit management and pricing access management. The company establishes a credit asset risk classification system, classifies asset risks according to customers' performance ability and willingness, and fully accrues impairment reserves. The company strengthened the construction of risk system and realized the systematic strong control of rating credit, quota and pricing access.
③ Market risk
Market risk refers to the risk of loss of the company's business due to adverse changes in market price, including interest rate risk, equity securities price risk, commodity (collateral) price risk and exchange rate risk. In order to prevent market risks, the company has taken the following measures: first, implement a strict authorization system. Formulate annual risk policies and risk limits, clarify the investment varieties and corresponding risk limits authorized by the board of directors according to the company's risk preference and specific business conditions, and the company's management decomposes and configures the business scale, risk limits and risk pricing within the scope of authorization. Second, establish a multi index risk monitoring and evaluation system. The indicators cover concentration, stop profit and stop loss, sharp ratio, value at risk, Delta and other Greek values and commodity (collateral) valuation, and are evaluated regularly or irregularly through tools such as stress test and sensitivity test. The risk management department carries out real-time dynamic monitoring and risk early warning on the corresponding indicators to control the risk within an acceptable range. Third, continuously improve the market risk management system, realize the prior control of the system risk limit, carry out risk monitoring through the system, and strictly stop profits and losses. Fourth, establish a commodity (collateral) valuation system, and use market method, discount method and other valuation methods to evaluate commodities (collateral) regularly (including trigger). Fifthly, according to the analysis of the future macroeconomic situation and monetary policy, timely and appropriately adjust the structure of assets and liabilities, manage the interest rate risk, and mitigate and avoid the interest rate risk by controlling the maturity and repricing date distribution of interest bearing assets and interest bearing liabilities.
④ Liquidity risk
Liquidity risk refers to the risk that although the company has solvency, it is unable or unable to obtain sufficient funds in time at a reasonable cost to pay its due debts and fulfill other payment obligations.
The company implements a stable liquidity risk preference management strategy, and ensures sufficient liquidity reserves and financing capacity through scientific asset liability management, fund management, liquidity risk index monitoring and early warning and other measures and means to prevent liquidity risks. The company monitors liquidity risk through key risk indicators, stress tests and other tools, and promotes the holding subsidiaries to continuously improve their liquidity risk management level through assessment. Both Guangzhou assets and Yuexiu leasing have established a liquidity risk management framework with liquidity gap as the core index, established a liquidity risk index system including capital leverage, financing concentration, net stable capital ratio and term mismatch, and monitored and controlled the indicators on a daily basis. Secondly, the company continues to expand financing channels, reasonably arrange the asset liability structure, maintain strong solvency, improve the profitability and sustainable development ability of various businesses, and prevent liquidity risks.
⑤ Operational risk
Operational risk refers to the risk of loss caused by imperfect or problematic internal procedures, employees and information systems, as well as external events, such as legal risk.
The company mainly controls operational risks through process design, double operation, cross review, system control, process suspension, etc., and passes the compliance review
