Jiang Drill: Risk Assessment of Financial Businesses Related to Deposits and Loans

In the first six months of 2013, the average balance of deposits of Jianghan Petroleum Drill Bit Co., Ltd. and its holding subsidiaries and Sinopec Finance Co., Ltd. Wuhan Branch was RMB 8,852,100, and the balance of deposits at the end of June was RMB 7,455,700. The cumulative amount of loans was 525 million yuan, with an average balance of 401 million yuan at the end of the month. The balance at the end of June 2013 was 425 million yuan, and the interest expense for the first six months of 2013 was 9,572,300 yuan. The risks associated with financial transactions such as deposits and loans between the Company and the finance company are mainly reflected in the safety and liquidity of the relevant deposits, which involve the business and financial risks of the financial company's independent operations. According to the relevant information and financial statements provided by the finance company, and after investigation and verification by the company, the relevant risk assessment report is as follows:

First, the basic situation of the financial company

Sinopec Finance Co., Ltd. (hereinafter referred to as “finance company”) is a non-bank financial institution approved by the People's Bank of China and established on July 8, 1988, registered with the State Administration for Industry and Commerce and directly supervised by the China Banking Regulatory Commission. China Petrochemical Corporation invested 51% and China Petroleum & Chemical Corporation contributed 49%.

The current business scope of the financial company: handling financial and financing consultants, credit certificates and related consulting and agency services for member units; assisting member units in realizing the payment and payment of transaction funds; insurance agency business; providing guarantees to member units; handling between member units Entrusted loans and entrusted investments; handling bills acceptance and discounting for member units; handling internal transfer settlement between member units and corresponding settlement and liquidation plan design; absorbing deposits from member units; handling loans and financing leases for member units; Inter-bank lending; approval of issuing financial company bonds; underwriting corporate bonds of member units; equity investment in financial institutions; portfolio investment; consumer credit, buyer credit and financial leasing of member units. In addition, as the first pilot unit of foreign exchange settlement and sales of non-bank financial institutions, the company can handle the settlement and sale of foreign exchange funds and the centralized collection and payment of foreign exchange funds.

Financial company enterprise legal person business license number 100000000008418 (4-2), legal representative Liu Yun, registered capital of 100 million yuan, registered residence, 7th floor, Sinopec Building, 22 Chaoyangmen North Street, Chaoyang District, Beijing, China L0002H111000001.

Second, risk management and internal control

The Finance Company has established the shareholders' meeting, the board of directors and the board of supervisors in accordance with the provisions of the “Articles of the Sinopec Finance Co., Ltd.”, and has clearly defined the responsibilities of the board of directors, directors, board of supervisors and supervisors, managers and senior management in internal control. The regulations establish a corporate governance structure between the shareholders' meeting, the board of directors, the board of supervisors and the managerial level, which are responsible, standardized, and balanced.

Finance companies put the strengthening of internal control mechanism construction, standardizing operations, preventing and defusing financial risks in the first place in all work, in order to cultivate employees with good professional ethics and professional quality and improve employees' risk prevention awareness as the basis, through strengthening or improving internal auditing We will develop various systems such as education, assessment and incentive mechanisms to comprehensively improve the company's internal control system.

(1) Risk management organization structure

The goal of the company's risk management is to realize the comprehensive risk management, timely discover, control and risk, realize the coordination of business development and risk management, and promote the healthy and stable operation of the company.

(2) Credit risk management

The company's various credit businesses are the main source of credit risk. The company's credit risk management has the following main features:

1. Establish a three-in-one credit risk management organization system for the loan review committee, risk control (legal affairs) department and business department;

2. Established a credit operation mechanism of “unified credit, separation of trial and loan, grading approval, and clear division of responsibilities”;

3. Designed and standardized the credit business process, covering the whole process from customer survey, credit management, pre-lending survey, loan approval, loan issuance to post-loan tracking.

In 2013, according to changes in the economic situation, the company adjusted the credit policy and credit capital investment guidelines in a timely manner, strictly controlled credit access, and the overall credit risk of the company's credit assets was controllable and credit assets were excellent.

(3) Internal control activities

1. Fund management

In accordance with the relevant rules and regulations stipulated by the relevant state departments and the People's Bank of China, the finance company has formulated a series of standardized systems and business operation procedures for fund management, which effectively control business risks.

(1) In the aspect of fund plan management, the fund budget management of the whole process is adopted, the total budget is divided into the sub-project budget, and the budget control ideas of the annual budget, monthly plan and daily dispatch are used to ensure the safety and flow of the company funds. Sex and effectiveness.

(2) In terms of deposit business of member units, the Finance Company has established a standard system for deposit management and deposit account management, and strictly guarantees the safety of member funds in accordance with the principles of equality, voluntariness, fairness and good faith, and safeguards the legitimate rights and interests of each party. .

(3) In terms of centralized fund management and internal transfer settlement, the member units open settlement accounts in the finance company, log in to the financial company's online banking settlement platform and submit written instructions to the finance company to complete the fund settlement, and strictly guarantee the safe, fast and smooth settlement.
Strengthen the centralized management of funds, organically integrate the capital business process and internal control process into the fund management information system to ensure the safety of funds.

2. Internal audit control

(1) Improve the construction of the company's institutional system, and promulgate management systems including the “Contract Management Measures” and “Internal Settlement Implementation Rules”, and form a new version of the internal system according to the internal control management requirements of the group company, external regulatory requirements and the needs of the company's operation and management. The Control Management Manual ensures that the internal control is executed in place.

(2) The financial company implements the internal audit supervision system, establishes the audit committee and audit department responsible for the board of directors, establishes internal audit management methods and operational procedures, and conducts internal audit and supervision of the company's various economic activities. The audit department supervises the implementation of the company's internal control, the legality, compliance, risk, accuracy and efficiency of the business and financial activities. Provide valuable suggestions for improvement and suggestions to departments and management on weak links in internal control, management imperfections and the resulting risks.

3. Information system control

Successfully developed the implementation of “credit/customer service management system” on the line, initially realizing the complete reflection of customer information, the credit rating of customers is scientific and reasonable, the whole process of credit business is running without paper, and the daily management level and informationization degree of the company are further improved.

Third, the financial company's operation management and risk management

(1) Business situation

As of December 31, 2012, the finance company's cash and deposits with the central bank amounted to 4.145 billion yuan, and the interbank funds amounted to 7.679 billion yuan. In 2012, the realized interest income was 3.02 billion yuan, the total profit was 1.828 billion yuan, and the net profit after tax was 13.74 yuan. 100 million yuan, the company's operating conditions are good, and steady development.

(2) Management status

Since its inception, the finance company has always adhered to the principle of sound management, strictly in accordance with the "Company Law of the People's Republic of China", "Banking Supervision and Administration Law of the People's Republic of China", "Administrative Measures for Financial Groups of Enterprise Groups", and Administrative Licensing for Non-Bank Financial Institutions. The Measures for the Implementation of the Matters and the relevant national financial regulations, regulations and the company's articles of association regulate operations and strengthen internal management.

Financial companies have never experienced any squeezing of deposits, failure to pay due debts, overdue or guarantee advances in large loans, looting or fraud, directors or senior management involved in serious violations, criminal cases, etc. Major changes in the institutions, equity transactions or business risks of the normal operation of the financial company; they have never been subject to administrative penalties and rectification by the supervision departments of the Bank of China Supervision and Management Commission, and have never brought any security risks to the listed companies.

(III) Deposit and loan of the company

The deposit balance of the company and the company's holding subsidiaries in the finance company did not exceed 30% of the financial company's deposits. At the end of June 2013, the Company had a deposit of RMB 7,455,700 in the Finance Company and a loan of RMB 425 million. The sum of the deposit balances was much lower than that of the financial company, and the deposit risk was small. The company's deposits in the finance company are safe and liquid, and there has never been a delay in payment due to insufficient financial company positions. The company has formulated a deposit risk reporting system and a deposit risk emergency response plan to ensure the safety of deposit funds in the finance company, effectively prevent, timely control and resolve deposit risks.

In summary, in the first half of 2013, the Finance Company strictly operated in accordance with the “Administrative Measures for Enterprise Group Finance Companies” (CBRC [2004] No. 5) of the Banking Regulatory Commission of the People's Bank of China, and its business performance was good. According to the company's understanding of risk management and In the evaluation, there is no significant flaw in the risk management of the financial company. There is no risk problem in the financial services such as deposit and loan that occur between the company and the finance company.

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