Policies & Operating Procedures of the Holding Company

  1. General Responsibility
    1. It is the responsibility of the directors and management of the parent company to establish and supervise the policies of subsidiaries, either directly or through delegation of authority. Policies should ensure that subsidiaries are not managed for cross purposes and should specify procedures and controls to avoid concentrations of risks on a consolidated basis. The Holding company centralizes the operations of the Group by appointing a Group Managing Director and by:
    1. Approving credit exposures over specified limits and by setting risk-based and absolute limits related to exposure to countries, industries and where applicable, market and foreign currency risk as well as exposure to risk concentrations
    2. Approving all borrowings outside of the Group and all capital expenditure in excess of stipulated limits
    3. Approving all standard policies related to the general conduct of business, personnel and investment strategy and the approval of all contractual arrangements with strategic partners
    4. Placing directors of the parent company, in particular the Group Managing Director, on boards in each of its subsidiaries
    5. Delegating its authority to the Group Managing Director where appropriate for the effective overall management of the Group at the CEO level
    6. Stipulating which central services must be provided (a) by the Holding company and (b) by other specified subsidiaries and which, if any, will be outsourced. Functions and services to be performed by the Holding Company are carried out by Corporate Executive Operations (CXO) for which The Group Managing Director or one of the Executives or a designated Senior Manager is responsible. CXO generally provides Board Services and Company Secretarial services.
    7. Appointing a Group Executive Committee which meets regularly under the Group Managing Director and which is made up solely of the General Managers of major subsidiaries.
  2. Group Executive Committee
    1. The main functions of the Group Executive Committee are to ensure that:
    1. The Group is accurately identifying synergies and that it is implementing plans and utilizing common resources in the best interest of the Group as a whole and that no company in the Group is disadvantaged by transactions with another affiliate or by sharing of resources
    2. Concentrations of risk are properly identified, analysed, monitored and reported regularly for their review
    3. The systems of financial planning (including budgeting) and cash flow management generate accurate and timely information that facilitates centralised Performance Reporting and Treasury Management
    4. Subsidiaries are adequately and promptly carrying out risk management policies and are providing timely reports for Enterprise Risk Management
    5. The Group is effectively carrying out its overall Strategic Plan and that any need for significant adjustment is assessed to determine what action is required
  3. Responsibility for adequate Capitalisation and Liquidity
    1. It is the responsibility of the directors and management of the parent company to ensure that each subsidiary, including the Holding company, is capitalised adequately in terms of regulatory and prudential management requirements, business opportunities and risk. In particular, it is the responsibility of the directors and management of the parent company to ensure that equity investments in subsidiaries are funded responsibly and that debt and preference share obligations of the parent company will be adequately covered by dividends and other income from subsidiaries and that adequate liquidity will be in place to meet such obligations. Debt obligations of the holding company shall include any guarantees net of marketable securities held as collateral by the lenders.
    1. The Net Asset Value of shares owned by the Holding Company in the subsidiaries must not exceed 120% of the Capital and Reserves of the Holding company unless and until the directors have definite assurance that an approved capitalisation plan will reduce the ratio below 100% within six months. In any event, the Net Asset Value of shares invested in the subsidiaries (less minority interests) must not at any time exceed 120% of the Capital and Reserves of the Holding company.
    2. At no time must the Total Debt of the Holding Company exceed 100% of its Capital and Reserves and any debt contracted by the Holding company must be fully capable of being serviced from dividends and other income from the subsidiaries.
    3. The Holding company shall not provide guarantees for the debt or other obligations of any entity other than a subsidiary in which it has more than 75% ownership unless the guarantee is shared with the minority shareholder (s) of adequate financial standing.The directors shall ensure that at all times the Holding Company has adequate liquidity to meet current and future obligations (including provision for contingencies) by maintaining a Liquidity Policy which must be reviewed in the light of needs and market conditions every six months.
  4. Financial Responsibility
    1. It is the responsibility of the directors and management of the parent company to ensure that the Holding company does not incur expenses or take on commitments that are not adequately covered by dividends and other income from subsidiaries taking into account volatility in such expected cash flows.
    1. Prior to the start of each financial year the Board of the Holding company will approve the Expense Budget of the Holding company based on expected cash flows and shall approve all Capital Expenditure. The Expense Budget shall include allowances for the following:
      1. Board fees and expenses and the expenses of Corporate Executive Operations
      2. Group Business Development and expansion activities
      3. Assurance, Business process improvement and Compliance (ABC) expenses
      4. Independent audit of the Holding company and Credit ratings
      5. Management of Caribbean Development Capital Ltd which pays management fees to the Holding Company
  5. Dividend Policies and Financial Planning
    1. It is the responsibility of the directors and management of the parent company to ensure that the dividend policies of each subsidiary provide a fair and regular return to the Holding Company balanced by justified needs for approved expansion plans and that each subsidiary has an approved profit planning model that sets out guidelines for balancing risk and return.
    2. The Parent Company will establish standard dividend policies for each subsidiary including the Holding Company
    3. The Holding Company Board must review and approve the Key elements and the Objectives of the Strategic Plans of each subsidiary every year and must also review and approval annual budgets
  6. General authority of the Board of the DFL Caribbean Holdings Ltd
    1. The Board of DFL Caribbean Holdings Ltd is the ultimate authority in the DFL Caribbean Group and shall have the same authority and responsibilities as had by the Board of the previous parent company (Development Finance Ltd) prior to December 1st 2006 when it became a subsidiary of DFL Caribbean Holdings Ltd.
    2. The Board of DFL Caribbean Holdings Ltd shall from time to time, in addition to the Group Managing Director, appoint when necessary, one other Executive and one Senior Manager on secondment from the subsidiaries to carry out designated functions and activities of the Holding Company but shall not appoint any other staff.
  7. Financial Institutions Act 1993 (to be replaced by the new Banking Act)
    1. It is the responsibility of the Board to require Executive Management to provide opinions from reliable sources regarding action to be taken to comply with the provisions of the New Banking Act (expected in 2007) and new Guidelines issued by the regulatory authority from 2006 onward.

 

 

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