CRITERIA & ASSESSMENT PROCESS


 

PREAMBLE

The Corporate Excellence Awards was instituted by MAP in 1982 with the sole aim to recognize and honor companies showing outstanding performance and demonstrating progress and enlightened management practices.

This Award was earlier applicable to listed companies divided into Industrial and Financial categories.  Now the Award is open to any participant including unlisted public companies and not-for-profit organizations which meets MAP evaluation criteria.

This year onwards, the award in the Industrial category is being named as the Amir S. Chinoy Corporate Excellence Award, to recognize the contributions made by Mr. Amir S. Chinoy towards MAP, being the founding member and the first President of MAP.

The Industrial and Financial category companies which have qualified have been further sub-divided into following sectors/groups based on present classification adopted by Pakistan Stock Exchange:

INDUSTRIAL CATEGORY

Oil & Gas and Utilities Chemicals Forestry (Paper & Board)
General Industrials & Construction Engineering Industrial Transportation
Automobile and Parts Food Producers Personal Goods
Pharma and Bio Tech Fixed Line Telecommunication  


FINANCIAL CATEGORY

Commercial Banks Non-Life Insurance Life Insurance
Financial Services Equity Investment Instruments  


PHASE – 1


Short-Listing On Dividend Payment

The primary qualifying criteria of first short-listing companies is payment of at least aggregate of 45% dividend (Cash and / or Bonus Shares) over the last three years.

PHASE – 2

Detailed Financial Evaluation

Industrial Category

Phase 2 consists of detailed financial evaluation of the companies short-listed on the basis of the primary criteria. This evaluation is done from their annual reports for the last three years by applying following ratios, each having equal points from an aggregate of 50 points.

1. Return on Capital Employed
2. Asset Turnover Ratio
3. Earning Per Share
4. Acid Test /Quick Ratio
5. Ratio of Market Value to Book Value of Share


Financial Category

The Financial Category companies ratios have been established with the assistance of Pakistan Credit Rating Agency (PACRA) and Pakistan Insurance Corporation. These ratios and the points allotted for them are as follows:

S/n

Ratio

Banks

Insurance Companies

(Life +Non-Life)

Financial Services & Equity Investment Instruments

1.

Return on Capital Employed

10

10

10

2.

Asset Turn Ratio

10

10

10

3.

Ratio of Net Impaired lending to Equity

10

10

4.

Ratio of Liquid Assets to (Deposits + Borrowings)

10

5.

Ratio of Total Finance to (Deposits + Borrowings)

10

6.

Premium Solvency Ratio

10

7.

Ratio of Net Investment Income to Premium Earned

10

8.

Combined Ratio

10

9.

Ratio of Liquid Assets to Total Funding

10

10.

Ratio of Total Debts to Equity

10

  Total

50

50

50

 

 

TIME WEIGHTAGE OF RATIOS

The financial evaluation covers the period of preceding three years in order to absorb the effects of fluctuations and also to recognize the impact of long term policies and strategic decisions. The following weightage is assigned to the results of financial evaluation.

Year  n

Year n – 1

Year n – 2

PHASE – 3

Management Practices Appraisal

The next step in the assessment process is appraisal of management practices of the companies qualifying the financial assessment. Top five (5) companies in each PSX sector are required to complete the management appraisal questionnaire.

In order to facilitate marking the questions have been divided into following management areas:

Corporate Governance

160

  Customer & Market Focus

90

Strategic Planning

220

  Human Resource Focus

250

Leadership

60

  Operation Management

80

Social Responsibility

70

  Information Management

70


PHASE – 4

Top Management Meetings

On receipt of the completed questionnaire, two-member MAP team is appointed for site visit and detailed meetings with top management of each short-listed company. The purpose of these meetings is to verify and obtain a vital, face to face view of the responses to questionnaire. During these meetings the MAP team not only discusses their management practices but also witnesses the evidence of claims made in the questionnaires as well as policy documents. After the top management meetings the questionnaires are marked.

PHASE – 5

Final Tabulation of Results

The marks obtained by the companies for Management Practices Appraisal on the basis of 1000 marks are recalculated on the basis of 200 points, 50 for financial evaluation and 200 points for management practices appraisal, thus maintaining the 20:80 weightage for each aspect. The final result is presented to the Corporate Excellence Award sub-committee which forwards the same to the MAP Executive Committee for approval and announcement.

AWARDS

Under the Awards Scheme, there is one circulatory Trophy for the overall winner in each category namely, Industrial Category and Financial Category. In addition, there are trophies for the top companies in the remaining sectors of both categories and not-for-profit organization.


(Click Download) 33rd CEA Questionnaire – 2018

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