Report on Risk Continuous Assessment of Financial Services Between the Company and Shanxi Coal Group Finance Company
In accordance with the "Shenzhen Stock Exchange Listed Company Self-Regulatory Supervision Guidelines No. 7 - Transactions and Connected Transactions," the financial services, mainly including deposit, loan, and other financial businesses, between Shanxi Coal Energy Group Co., Ltd. (hereinafter referred to as the "Company" or "this Company") and Shanxi Coal Group Finance Co., Ltd. (hereinafter referred to as the "Finance Company") are connected transactions. The risks of these connected deposit and loan financial services between the Company and the Finance Company are mainly reflected in the safety and liquidity of relevant deposits, which involve the Finance Company's independent business and financial risks.
Based on the relevant information and financial statements provided by the Finance Company, and after investigation and verification by this Company, the relevant risk assessment report is as follows:
I. Basic Information of the Finance Company
(I) Basic Information
Shanxi Coal Group Finance Co., Ltd. was established in December 2009 upon approval by the former China Banking Regulatory Commission to provide financial services to member units within the group. The shareholders of the Finance Company include Shanxi Coal Group Co., Ltd. holding 80% of the shares and Shanxi Coal Energy Group Co., Ltd. holding 20% of the shares. To continuously expand its business scale and better fulfill its functions, the Finance Company's shareholders have increased its capital five times with undistributed profits according to their original shareholding ratio. Currently, the registered capital has reached RMB 3.55 billion. The Finance Company has always operated its business within the scope approved by the regulatory authorities, under the premise of controllable risk.
(II) Organizational Structure
The shareholder meeting of the Finance Company is the highest authority, with a board of directors and a supervisory board. The board of directors has established a risk management committee, a remuneration and assessment committee, and an audit committee. The management team exercises management rights over the company's daily production and operation within the scope of authorization by the board of directors. The management team has established an internal control committee, a credit review committee, an investment and financing review committee, and an asset-liability management committee, as well as nine departments including the settlement management department, fund planning department, credit management department, financial accounting department, information management department, new business department, audit and risk department, comprehensive management department, and bill center.
(III) Business Scope
The business scope of the Finance Company includes: (I) absorbing deposits from member units; (II) handling loans for member units; (III) handling bill discounts for member units; (IV) handling fund settlement and payment for member units; (V) providing entrusted loans, bond underwriting, non-financing guarantees, financial advisory, credit certification, and agency services for member units; (VI) engaging in interbank lending; (VII) handling bill acceptance for member units; (VIII) handling buyer credit and consumer credit for member units' products; (IX) investing in fixed-income securities. (Projects subject to approval according to law can only be carried out after approval by relevant departments).