Press Release

JCR-VIS Reaffirms Corporate Governance Rating of Pak Oman Investment Company Limited at CGR-9
 

Karachi, November 1, 2016: JCR-VIS Credit Rating Co. Ltd. has reaffirmed the Corporate Governance Rating of Pak Oman Investment Company Limited (POIC) at ‘CGR-9’. The previous rating action was announced on December 1, 2015.

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.

POIC has been established under a Joint Venture Arrangement (JVA) between the Government of Pakistan (GoP) and Sultanate of Oman (SO - rated ‘BBB-/A-3’ by an international rating agency). Given that shareholders of the company have equal representation on the company’s BoD, JVA defines the role of each shareholder.

The rating takes into account continuance of key governance factors relating to the Board, composition of its Board level committees, level of participation in them and external evaluation of Board’s performance. All manuals and policies are regularly reviewed and updated as per best practices. Reporting lines in the company remain consistent with the organizational structure. As per best practices, Head of Internal Audit functionally reports to Board Audit Committee. There has been some turnover at senior management level, which were timely filled. The company has a defined succession plan in place.

Given the structure of JVA companies including POIC, SECP has granted exemption from provisions of Code of Corporate Governance applicable on public sector entities except some. These relate to training of directors, performance evaluation of the Board and audit of financial statements of the companies by Quality Control Review (QCR) rated firms. POIC remains compliant with these provisions of the code.

Level of financial and qualitative disclosures in the public domain is considered satisfactory. Moreover, overall control environment of the institution is considered satisfactory. To further improve controls over systems through technological interface, the company implemented a Dot net Based system in 2016.

For further information on this rating announcement, please contact the undersigned (Ext: 234) or Mr. Mohammed Khalid Ali (Ext: 241) at (021)35311861-71 or fax to (021)35311872-3.

Javed Callea
Advisor

Applicable Rating Criteria: Corporate Governance Ratings (June 2002)
http://jcrvis.com.pk/images/cgr.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited