THE ROLE AND FUNCTION OF CORPORATION SOLE “Corporate

THE ROLE AND FUNCTION OF CORPORATION SOLE “Corporate Governance Seminar– Promoting Effective State Enterprise Management” Ministry of Finance and the Economy Investments Division 1

OUTLINE THE MINISTER OF FINANCE INCORPORATION ACT POWERs AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY THE ACT POWER AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY OTHER LEGISLATION THE STATE ENTERPRISE SECTOR ROLE AND FUNCTION OF THE INVESTMENTS DIVISION ON BEHALF OF CORPORATION SOLE Ministry of Finance and the Economy Investments Division 2

THE MINISTER OF FINANCE INCORPORATION ACT The Minister of Finance Incorporation Act, act No. 5 of 1973 (chapter 60:03) incorporated the Minister of Finance as Corporation Sole. By virtue of the Act the Minister of Finance holds all property transferred or vested in trust for the State. Ministry of Finance and the Economy Investments Division 3

POWERS AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY THE ACT The Corporation sole has the same characteristics of a corporation that is the separation of the rights and the duties of the corporate body and perpetual succession. Therefore: The benefit of all Deeds, contracts, bonds, securities or things in action is vested in the person appointed to the office of Minister of Finance. The benefits of this office is transferred to and vested in the person appointed to the Ministryoffice. of Finance and the Economy Investments Division 4

POWERS AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY THE ACT To hold property : – vested by the Act – by virtue of any other written law – as may from time to time in any other way be vested in it. To exercise corporate powers in a manner it thinks fit, subject to the special or general directions of the President from time to time. Ministry of Finance and the Economy Investments Division 5

POWERs AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY THE ACT With the permission of the President the Corporation has the power to: –to acquire, purchase, take, hold and enjoy movable and immovable property of every description –to convey, assign, surrender and yield up, mortgage, demise, reassign, transfer or otherwise dispose of, or deal with any movable or immovable property vested in the Corporation upon such terms as to the Corporation seems fit. To accept surrenders, assignments or reconveyances and to exchange any property and enter into contracts. Ministry of Finance and the Economy Investments Division 6

POWERS AND FUNCTIONS OF CORPORATION SOLE AS DEFINED BY OTHER LEGISLATION The relevant Acts include: The Constitution on the Republic of Trinidad and Tobago Section 66 A-D The Exchequer and Audit Act Ministry of Finance and the Economy Investments Division 7

COMPOSITION OF THE STATE ENTERPRISE SECTOR The Minister of Finance (Corporation Sole) is responsible for the State’s portfolio of investments of which the State Enterprise Sector is a major element. At present, the portfolio includes: Forty-seven (47) wholly-owned companies Seven (7) majority-owned companies Five (5) minority-owned (i.e. less than fifty percent holdings); and Twenty - nine (29) companies held indirectly as subsidiaries of wholly-owned companies Ministry of Finance and the Economy Investments Division 8

ROLE AND FUNCTION OF THE INVESTMENTS DIVISION ON BEHALF OF CORPORATION SOLE The Investments Division of the Ministry acts on behalf of the Minister of Finance (Corporation Sole) and carries out corporate functions such as: Monitoring and Evaluation Facilitation Exercises Management Activities Governance Activities Receiver of Revenue Auditing Activities Rationalization of the State Enterprise Sector Divestment Activities Ministry of Finance and the Economy Investments Division 9

MONITORING AND EVALUATION The Investments Division monitors the performance of State Enterprises. The Performance Monitoring Manual outlines the monitoring activities of the Division and reporting requirements of the State Enterprise Sector. These activities include: Collation of information on the indebtedness of the sector Management of the loan repayment portfolio of specific state enterprises Review of board minutes and internal audit reports Review of Annual Financial Statements Ministry of Finance and the Economy Investments Division 10

MONITORING AND EVALUATION Review of Cash Flow Statements Maintenance of a Share Register Classification of State Enterprises, Statutory Bodies and Cabinet Appointed Committees Maintenance of Boards Database The development of policies and procedures appropriate for the management of the risk of State Enterprises Ministry of Finance and the Economy Investments Division 11

FACILITATION EXERCISES The Investments Division of the Ministry acts on behalf of the Minister of Finance (Corporation Sole) and performs corporate functions such as: Appointment of Directors Representing Corporation Sole’s interest at Annual General Meetings Facilitation of subsidy payments, capital injections and deficit financing; Establishing new State Enterprises as directed Ministry of Finance and the Economy Investments Division 12

MANAGEMENT ACTIVITIES Activities in support of the management functions of Corporation Sole include: Appraisal of Government’s Investment portfolio Capital Expenditure Appraisal Preparation of the Supplementary Public Sector Investment Programme (SPSIP) with a view to managing the State Enterprise Sector for the National Budget. Ministry of Finance and the Economy Investments Division 13

GOVERNANCE ACTIVITIES Government’s mandate of effective corporate governance include: Submitting audited accounts to the Public Accounts (Enterprises) Committee (PAEC) Providing recourse for National Insurance complainants through the National Insurance Appeals Tribunal (NIAT) Ministry of Finance and the Economy Investments Division 14

RECEIVER OF REVENUE The Permanent Secretary in the Ministry of Finance (Investments Division) holds the position of Receiver of Revenue and is charged with the responsibility for receiving dividend payments from State Enterprises. In this regard, the Investments Division is guided by the Dividend Policy of the Government of Trinidad and Tobago. Ministry of Finance and the Economy Investments Division 15

AUDITING ACTIVITIES Exchequer and Audit Act The Central Audit Committee – Evaluation of tender procedures and reviewing the award of contracts in respect of all State Enterprises – Conduct of systems and value for money audits of selected State Agencies for compliance with relevant laws, regulations and internal control procedures Ministry of Finance and the Economy Investments Division 16

RATIONALIZATION OF THE STATE ENTERPRISE SECTOR These activities include: Periodic review of the State Enterprises Sector in order to inform divestment proposals Review of the mandate and operations of the State Enterprises Sector to facilitate synergies and more efficient and economic organizations Ministry of Finance and the Economy Investments Division 17

THE END Thank you. Ministry of Finance and the Economy Investments Division 18