Karachi, December 28, 2020 (PPI-OT): VIS Credit Rating Co. Ltd. has reaffirmed the Corporate Governance Rating of Pakistan Kuwait Investment Company (Private) Limited (PKIC) at ‘CGR-9’. The rating signifies very high level of corporate governance. The previous rating action was announced on January 15, 2020.
Corporate governance ratings are based on evaluation of key governance areas of the rated institution including regulatory compliance; ownership structure; composition and operations of the Board of directors (BoD) and executive management; self-regulation; financial transparency and relationship with stakeholders. Pakistan Kuwait Investment Company (Private) Limited (PKIC) operates as a Development Finance Institution established under a Joint Venture Agreement (JVA) between the Government of Pakistan (GoP) and Government of Kuwait (GoK).
Given the joint venture structure, PKIC is exempted from provisions of the Code of Corporate Governance applicable on DFIs, in accordance with the circular issued by the regulator. Nonetheless, the company has taken measures to adhere to the best governance practices in order to protect the interests of various stakeholders.
The assigned rating takes into account a well-established corporate governance framework at PKIC, which is supplemented by effectively functioning Board, Board level Committees and Management Committees comprising seasoned professionals. No reconstitution of the Board and Board Committees was observed during the period under review. High frequency of the Board meetings, high attendance record and comprehensive discussion on various aspects of the company during the meetings demonstrates active oversight by the Board.
Despite the onset of COVID-19 during the review period, all the Board and Board Committee meetings were held in a timely manner. The rating also incorporates strong financial transparency and sound control environment at the institution. Annual financial statements and official website are the two key mediums utilized by management for communication with external stakeholders. Disclosures available in the public are adequate and made in a timely manner.
Clear reporting lines are defined in the organogram, with each department headed by a qualified and experienced resource. One change was observed in the senior management team during the period under review. Stability in the management team is considered essential from a rating perspective. PKIC has comprehensive Business Continuity Plan (BCP), which was triggered effectively once the lockdown was imposed in the country on account of COVID-19. Employees were provided all the requisite tools for work from home arrangements. The Rapid Portfolio Review of customers was also conducted to undertake effective actions in a timely manner. IT infrastructure was also further strengthened given the additional reliance on remote communication. Overall risk management framework is considered satisfactory.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/
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