Zhejiang Provincial New Energy Investment Group Co.Ltd(600032) report on risk assessment of Zhejiang Energy Group Finance Co., Ltd
In accordance with the requirements of self regulatory guidelines for listed companies on Shanghai Stock Exchange No. 5 – transactions and related party transactions, Zhejiang Provincial New Energy Investment Group Co.Ltd(600032) (hereinafter referred to as “the company”) reviewed the financial statements and relevant data indicators of Zhejiang Energy Finance Co., Ltd. by checking the financial license, business license and other certificates of Zhejiang Energy Finance Co., Ltd. (hereinafter referred to as “zheneng finance company”), After evaluating the business qualification, business and risk status of zheneng finance company, the risk evaluation is reported as follows:
1、 Basic information of zheneng finance company
Zhejiang Energy Group Finance Co., Ltd. was approved by Bank Of China Limited(601988) Industry Regulatory Commission (YJF [2006] No. 250) and obtained the business license of enterprise legal person with the approval of the Administration for Industry and Commerce on August 25, 2006. On December 17, 2021, a new financial license (institution No.: l0046h23 Shanghai Hajime Advanced Material Technology Co.Ltd(301000) 1) was approved and issued by Bank Of China Limited(601988) Insurance Regulatory Commission. In January 2022, apply for the renewal of the new business license of enterprise legal person (Unified Social Credit Code: 91330 Sgis Songshan Co.Ltd(000717) 866688j).
The initial registered capital of zheneng finance company was 801.74 million yuan. After being reviewed and approved by the current Zhejiang regulatory bureau of China Banking and Insurance Regulatory Commission (the former Zhejiang regulatory bureau of China Banking Regulatory Commission), the registered capital was increased twice in September 2012 and December 2021. The current registered capital (paid in capital) of the company (the date of issuance of the report) is 28209596066 yuan. At present, the composition of shareholders and the proportion of capital contribution are as follows:
No. shareholder name contribution amount (yuan) contribution proportion
1 Zhejiang Energy Group Co., Ltd. 193220566603 68494624%
2 Zhejiang Zheneng Electric Power Co.Ltd(600023) 697656,676.91 24731183%
3 Zhejiang zheneng Beilun Power Generation Co., Ltd. 6369908789 2258065%
4 Zhejiang zheneng Jiaxing Power Generation Co., Ltd. 4246605859 1505376%
5 Zhejiang zheneng Zhenhai Power Generation Co., Ltd. 4246605859 1505376%
6 Zhejiang Electric Power Construction Co., Ltd. 4246605859 1505376%
Total 282095960660 100%
Business scope of zheneng finance company: 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 and entrusted investment 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; Issue zheneng finance corporate bonds upon approval; Underwriting corporate bonds of member units; Equity investment in financial institutions; Securities investment; Other businesses stipulated by laws and regulations or approved by the banking and insurance regulatory authority.
2、 Basic information of internal control of zheneng finance company
(I) control environment
Zheneng finance company has established the board of shareholders, the general Party branch, the board of directors, the board of supervisors and senior management in accordance with the articles of association, and has clearly stipulated the responsibilities of the board of directors, directors, supervisors and senior management in risk management; Zheneng financial company has a sound governance structure, and has established an organizational structure with reasonable division of labor, clear responsibilities and clear reporting relationship in accordance with the principle of mutual checks and balances among decision-making system, supervision and feedback system and execution system, which provides necessary preconditions for the effectiveness of internal control. The organization chart of zheneng finance company is as follows:
Shareholders’ meeting
Board of directors and board of supervisors
audit committee
Risk management committee
Management
Investment Review Committee
Credit review committee
Party managers’ risk planning and information society investment and information Finance
Credit planning, asset verification and interest service of gongqunli insurance
Office of discipline, information management and information industry final research, review and safety service
Source inspection, financial accounting, distribution and accounting
Office Department
The board of directors is responsible for ensuring that zheneng finance company establishes and implements an adequate and effective internal control system; Examine and approve the overall business strategy and major policies, and regularly inspect and evaluate the implementation; Be responsible for ensuring that zheneng finance company operates prudently within the framework of relevant laws and policies, clearly setting acceptable risk levels, and ensuring that the senior management takes necessary measures to identify, measure, monitor and control risks; Organization responsible for examination and approval; Be responsible for ensuring that the senior management monitors and evaluates the adequacy and effectiveness of the internal control system.
The board of directors has a risk management committee and an audit committee. The risk management committee is responsible for risk deliberation and decision-making on major matters such as business development, foreign investment and credit of zheneng finance company. The audit committee is responsible for supervising and inspecting the implementation of the internal control system of zheneng finance company.
The board of supervisors is responsible for supervising the board of directors and senior management to improve the internal control system; Be responsible for supervising the board of directors and directors, senior management and senior management to perform internal control duties; Be responsible for requiring directors, chairman and senior managers to correct their behaviors that damage the interests of zheneng finance company and supervise the implementation.
The senior management is responsible for formulating internal control policies and monitoring and evaluating the adequacy and effectiveness of the internal control system; Be responsible for implementing the decisions of the board of directors and implementing the internal control system; Establish procedures and measures for identifying, measuring, monitoring and controlling risks; Be responsible for establishing and improving the internal organization to ensure the effective performance of various responsibilities of internal control.
The credit review committee is composed of the deputy general manager in charge of risk management business of zheneng finance company and the heads of relevant departments, and is responsible for reviewing the policies, systems, business processes and other provisions related to the credit management of zheneng finance company; Review the annual maximum comprehensive credit scheme and temporary adjustment scheme of customers; Review the trading list of interbank customers, trading ceiling scheme and temporary adjustment scheme; Review the loan extension; Review and determine the text of credit and interbank business contracts and agreements; Review the collection and write off plan of customers’ non-performing assets, and report to the shareholders’ meeting through zheneng finance company; Review major issues such as asset restructuring of credit customers; Consider other matters related to credit and interbank business management. The investment review committee is composed of the general manager of zheneng finance company and the heads of relevant departments, and is responsible for reviewing the annual investment strategy of zheneng finance company; Review the annual white list of counterparties of zheneng finance company; Review the feasibility study report and investment plan of equity investment of financial institutions, form the opinions of zheneng finance company, and zheneng finance company will report to the board of directors and the shareholders’ meeting, and decide on various work of equity investment within the scope of authorization of the board of directors; Within the scope authorized by the board of directors, review the specific operation scheme, specific varieties and investment quota of stocks, bonds, funds, asset management plans and other products within the scope authorized by the board of directors, and determine the specific risk control measures; Review the risk classification of investment assets and assess the loss status; Review the disposal of major assets of the company; Review the first innovative investment business of zheneng finance company; Consider other matters related to investment business.
Zheneng finance company sets up an office, party masses discipline inspection office, human resources department, risk management department, planning and capital department, credit business department, investment and R & D department, accounting and settlement department, audit department, information security department and financial service department.
(II) risk identification and assessment
In accordance with the guidelines for comprehensive risk management of enterprise group finance companies and the group’s comprehensive risk management measures, zheneng finance company has established a risk management committee responsible to the board of directors, which is responsible for formulating risk management policies, supervising and evaluating the overall risk status of zheneng finance company, carrying out risk management activities in an orderly manner, continuously establishing and improving the comprehensive risk management structure and strengthening the construction of internal control, Improve the system management system and standardize the operation process. All departments of the company have formulated corresponding standardized management methods, operation procedures, work guidelines and risk prevention measures, with clear division of responsibilities, separation of responsibilities, mutual supervision and restriction, so as to achieve the goal of predicting, evaluating and controlling various risks in daily operation.
With the implementation of “three lines of defense” as the basis of internal control, zheneng finance company has formed a relatively perfect risk management mechanism covering all relevant internal and external work fields of zheneng finance company. The risk management department is responsible for organizing the formulation of annual risk management strategy, carrying out annual comprehensive risk assessment, and formulating major risk management strategy and response plan; Establish a risk quantitative index system to monitor various risk indicators; Embed the risk audit into the business process, and the risk management department shall conduct compliance audit on credit, investment, interbank and some settlement businesses one by one; Carry out risk classification of credit assets, equity investment, inter-bank assets and other receivables on a quarterly basis to truthfully reflect the status of risk assets and provide basis for the provision for asset losses; Strengthen the construction of internal control system, formulate the company’s system construction plan on an annual basis, and orderly build an internal control system and workflow framework integrated with the comprehensive risk management mechanism.
(III) important control activities
1. Capital business control
In accordance with the rules and regulations of the China Banking and Insurance Regulatory Commission, zheneng finance company has formulated various management methods and business systems on settlement management and deposit management. Each business system has a detailed operation process, which defines each business link, executive role and main business rules of the process, so as to effectively control business risks.
(1) Settlement management
In order to standardize the RMB settlement business, effectively control and prevent settlement risks and ensure the standardized, safe and stable operation of settlement business, zheneng finance company has formulated the measures for the management of member units’ accounts and the operating procedures for the opening, change and cancellation of member units’ accounts in accordance with the payment and settlement measures of the people’s Bank of China and the administrative measures for enterprise group financial companies and other laws and regulations Business management methods and operation processes such as the operating procedures for fund settlement business of member units and the management measures for agency payment control the risk probability of errors through standardized business operations. At the same time, submit budget, filing and payment instructions through the business system to strictly ensure the safety and convenience of settlement. Zheneng finance company formulates a strict reconciliation mechanism. Member companies can realize online reconciliation through the “online banking system” or offline reconciliation by printing account statements in the information system.
(2) Deposit management
In order to strengthen the management of RMB deposits and standardize the company’s RMB deposit business, zheneng finance company has formulated the measures for the management of deposits of member units and the measures for the pricing of interest rates on deposits in accordance with the measures for the management of RMB unit deposits and other laws and regulations, and standardized the relevant operations of RMB deposit business. Zheneng finance company strictly examines the depositors’ expense accounts, strictly manages the reserved seal materials and deposit payment vouchers, and effectively prevents fraud; Zheneng finance company strictly follows the principles of equality, voluntariness, fairness and good faith, and the relevant policies are implemented in strict accordance with the relevant provisions of the CBRC and the people’s Bank of China, so as to fully ensure the capital safety of member units and safeguard the legitimate rights and interests of the parties.
(3) Interbank business
In order to strengthen the interbank business management and standardize the interbank business process, zheneng finance company has formulated the interbank business management measures in accordance with the notice on regulating the interbank business of financial institutions, the measures for the administration of interbank lending, the Interim Measures for the administration of interbank certificates of deposit, the measures for the Administration of bond transactions in the national interbank bond market and other laws and regulations, so as to clarify the division of business responsibilities and processes, Establish and improve the internal control mechanism of front, middle and back offices, strengthen internal supervision and inspection, and ensure that the business activities of peers comply with the law and the risks are effectively controlled. According to the price and actual demand of interbank market and money market, actively manage the position, launch interbank fixed-term and bond reverse repurchase and other businesses according to the capital plan on the premise of ensuring liquidity safety, seize the opportunity and actively negotiate the price of demand deposit and agreed deposit with cooperative banks, so as to effectively improve the capital use efficiency of the company.
(4) Liquidity management
Zheneng finance company adheres to the steady and prudent liquidity management strategy and ensures the company’s liquidity level through the following measures
