Home' Trinidad and Tobago Guardian : November 28th 2013 Contents NOVEMBER 2013 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
COVER STORY | BG05
State enterprises in T&T returned
a combined profit of $5.3 billion
in 2012, Minister of Finance and
the Economy Larry Howai said
on Tuesday evening at the Hyatt
in Port of Spain. He did not give the comparative
figure for 2011 to determine if this was an
increase or decrease.
Speaking at the launch of the T&T Corporate
Governance Code 2013, Howai said: "Of the
60 state enterprises, less than 20 per cent have
experienced problems. I suppose it is similar
to our view that all state enterprises lose money
when, in aggregate, the sector is actually prof-
itable, returning a net profit of $5.3 billion in
"Having said that, though, I would emphasize
that we need to make more state enterprises
profitable as we need to ensure that the corporate
governance framework is not flouted by even
one state enterprise."
He continued: "But with the T&T Corporate
Governance Code, I believe that we have gained
partners in the business community for encour-
aging enforcement and monitoring. Here In
Trinidad and Tobago we have tended, in the
past, to take the view that the private sector
cannot be held to the same level of accountability
as the state sector. After all, we think, it is
He said the experience of 2008 where private
sector institutions in the developed world melted
down because of the unacceptable levels of
risk-taking and breaches of corporate gover-
nance, and the local experience of CL Financial
"have taught us differently. We all suffer when
any of us flout the rules of good ethical conduct.
Through this code, T&T can more effectively
achieve the Government's objectives of enhanc-
ing governance and performance in both the
public and private sectors.
He said the code will also strengthen effi-
ciency and transparency in the market place,
and improve the investment culture.
"The government of T&T takes a very strong
view where it comes to the operations of state
and private sector companies," Howai said. "In
21st century T&T, it can no longer be business
as usual. Organisations must adhere to the
highest standards, or risk being responsible for
our country falling short of investor expecta-
Organisations also have an enforceable
responsibility to ensure that every reasonable
precaution is taken to protect the interests of
shareholders and of the population at large, he
"Our vast potential for strength and influence
in the region can only be effectively tapped by
a firm commitment and adherence to globally
benchmarked codes of ethics and guidelines
for transparency," Howai said.
For the success of code, he said, there must
be compliance with the principles that have
been set out. "Therefore, I commit to you and
to the people of T&T that you have a partner
in this Ministry especially with this initiative.
And in moving forward, I expect that the trans-
formation of the domestic environment will
continue towards one that is hallmarked by
integrity, high standards of conduct and trans-
parency," the finance minister said.
Review of corporate governance in state
Earlier in his speech, he told the audience:
"Taking the government's strategies, as well as
the clear principles of the T&T Corporate Gov-
ernance Code, you will be pleased to know that
in my capacity as Corporation Sole, I have ini-
tiated a comprehensive review of the corporate
governance policies in the state enterprise sec-
He then added, however, that the state enter-
prise sector already has a fairly comprehensive
set of guidelines designed to ensure good gov-
One mechanism is the Performance Mon-
itoring System which is the framework for the
oversight of state enterprises by the Corporation
Sole. It outlines the relationship that should
prevail between the shareholder, the directors
and management of the state enterprises.
Within this monitoring system, he said, are
the monitoring agents: line ministries, boards
of directors, the Audit and Investment Com-
mittees, various chief executive officers, and
the Corporation Sole.
Also of significance is the Internal Audit
Manual prepared by the Treasury Division of
the Ministry of Finance and the Economy, he
"Internal Auditors within ministries/depart-
ments and state enterprises must examine the
records to ascertain the extent of compliance
with established policies and procedures as
established by the Treasury Division and, where
applicable, approved by Parliament," he said.
He said the legal provisions which govern
and support the internal audit framework
- The Constitution of the T&T
- The Exchequer and Audit Act and related
financial regulations; and
- The ministry's Comptroller of Accounts
This framework is bolstered by the Auditor
General, the Freedom of Information Act, the
Public Accounts Committee of Parliament the
Prevention of Corruption Act and the Integrity
in Public Life Act, he said.
He said: "Notwithstanding this comprehen-
sive framework, there are instances where the
system breaks down, although I would add that
this happens in the minority of cases."
Howai: All state entities must
comply with new governance code
Treasury Bills Q&A
What are treasury bills?
Treasury bills are short-term, government-issued debt instru-
ments. In Trinidad and Tobago, bills are issued for periods of 3
months or 6 months.
Who can buy treasury bills?
Any individual or company in Trinidad & Tobago can purchase
Where can treasury bills be purchased?
Treasury bills can be bought and sold at the Domestic Market
Operations department of the Central Bank of Trinidad & Tobago.
Additionally, investors are free to trade between themselves or
with brokers at negotiated prices.
What is the total value of treasury bills issued to the public?
At any given point in time there are 11 public issues of Treasury
bills with a total face value of $800 million. There is a treasury
bill maturing almost every week. As bills mature the government
issues new ones. Each treasury bill issue is given a unique number
by which it is identified.
How are tenders submitted?
Application forms are available at the Domestic Market Oper-
ations Department of the Central Bank and also under Treasury
Bill Application Procedures on this website. Individuals must
present one form of valid national picture identification.
What is the minimum value of treasury bill that can be pur-
The minimum denomination is $1000, increasing in multiples
of $1000 thereafter.
Where can I find information on treasury bills?
The Central Bank regularly publishes information on Treasury
bill auctions in the newspapers. Information on buying/selling
discount rates is available at the Domestic Market Operations
How are treasury bills traded?
Treasury bills are traded (bought or sold) on a discount basis.
This means that the price of the bill is equal to its face value
less the amount of the discount. For example, if you make an
investment of $1000 in a 3-month bill at 0.40 per cent, the
transactions are as follows:
You pay -- $999.00
In 3 months you receive - $1000.00
How is the amount of the discount on Treasury bills calcu-
To calculate the discount you need the following information:
• date of purchase
• date of maturity
• discount rate
• amount you wish to purchase
For example, if you wanted to purchase $1000 of Treasury bill
issue number 1293 on November 08, 2010. This issue matures
on January 19, 2011, and the discount rate is 0.35 per cent. The
number of days between the purchase date and the maturity
date is 72.
The discount is calculated as follows:
Discount = Principal x Rate x Time / 100
The price is Face Value - Discount, or in this example:
$1000.00 - $0.69 = $999.31
Source: Central Bank of Trinidad and Tobago
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