The Board of Directors of People’s Leasing & Finance PLC which is primarily responsible for the integrated risk management initiatives has delegated its authority to a Board subcommittee, the Integrated Risk Management Committee (“IRMC” or “Committee”) to review and assess the adequacy and effectiveness of the risk profile of the Company and the Group, In terms of Section 8 (3) of the Finance Companies (Corporate Governance) Direction No. 3 of 2008.
In compliance with the aforementioned Direction, The TOR clearly set out authority/delegations vested with the Committee, composition, responsibilities, meeting frequency and quorum, reporting and other procedures of the Committee.
In January 2019, the Committee reviewed its TOR and the same was subsequently approved by the Board.
The IRMC for the financial year 2018/19 comprised the following members and whose profiles are given on pages 27 to 28:
|Name of the Board subcommittee member||Directorship status||Membership status|
|Mr M P Amirthanayagam||Non-Executive, Independent Deputy Chairman/Senior Independent Director||Chairman|
|Mr Rasitha Gunawardana||Non-Executive, Non-Independent Director||Member|
|Mr M A M Rizwan||Non-Executive, Independent Director||Member|
|Mr A S Ibrahim (Chief Executive Officer/General Manager)||Non-Director||Member|
|Mr Sanjeewa Bandaranayake (SDGM – Operations)||Non-Director||Member|
|Mr Lionel Fernando (SDGM – Operations)||Non-Director||Member|
|Mr Rohan Tennakoon (DGM – Risk and Control)||Non-Director||Member|
|Regular attendees by invitation
Ms Akila Samarasinghe – Deputy Manager – Risk and Control functions as the Secretary to the IRMC.
The Committee held four (4) quarterly meetings during the year under review. The attendance of the members of the Committee was as follows:
|Name||Attended/ eligible to attend|
|Mr M P Amirthanayagam||4/4|
|Mr Rasitha Gunawardana||4/4|
|Mr M A M Rizwan||4/4|
|Mr A S Ibrahim||4/4|
|Mr Sanjeewa Bandaranayake||4/4|
|Mr Lionel Fernando||3/4|
|Mr Rohan Tennakoon||4/4|
Minutes of the Committee which include the deliberations and conclusions reached were submitted to the subsequent IRMC meeting for the confirmation and adoption. All minutes of the meetings were formally approved by the Committee Chairman. Approved Minutes were also submitted to the Board seeking their views, concurrence and/or specific directions.
The IRMC effectively assisted the Board of Directors in performing its oversight role in relation to the internal/external risks faced by the Company in carrying out its business operations. All key risks tracked through Key Risk Indicators (KRIs) on a monthly basis are reviewed by the Committee at its quarterly meetings. The IRMC focused on the following activities during the year under review:
During the period under review, the Integrated Risk Management Operating Committee (IRMOC) was re-established as a management level committee to further strengthen the risk governance structure of the Company and support the Board, Board subcommittees and Corporate Management to manage the risks associated with the business operations of the Company in an integrated manner. The IRMOC is accountable to the IRMC.
– Non-performing loan analysis based on assets and products
– Sector-wise credit concentration
– Compliance with the Single Borrower Limits etc.
During the year under review, in line with the Finance Companies (Corporate Governance) Direction, No. 3 of 2008, Section 8 (3) (b), the following subsidiary companies submitted Risk Dash-board/key risk indicator reports to the IRMC enabling the Committee to review the risk profile of each subsidiary company and the overall risk profile of People’s Leasing Group. Highlights of subsidiary company reviews are given below:
– The Committee reviewed the underwriting quality, investment concentrations together with KRIs of default risk, operational risk, strategic risk, compliance risk on a quarterly basis.
– The Committee reviewed the PI’s Compliance to the Risk-Based Capital Model regulated by the Insurance Regulatory Commission of Sri Lanka (formerly known as Insurance Board of Sri Lanka).
– PML involves in the business of providing micro-lending facilities to ensure financial inclusivity of the under privileged, rural and urban population and operates with a different risk profile.
– The Company’s risk profile was quarterly reviewed by the Committee against set risk tolerance limits.
– IRMC quarterly reviewed the Risk Dash-board reports and Risk Indicator reports submitted by People’s Leasing Fleet Management Limited and People’s Leasing Property Development Limited respectively.
The secretary to the committee coordinated with aforementioned subsidiaries of People’s Leasing.
Respective officers of subsidiary companies who are participating on invitation briefed the Committee with the relevant information through various risk indicators and additional information.
During the year under review, the IRMC extended its support in line with the risk appetite and tolerance framework, in the execution of overall business strategy emphasising the upside and downside risks which can have an impact on the Company.
Integrated Risk Management Committee
13 June 2019