Decision Making

Procedure followed in Decision Making Process

The functions of the Company are carried out by the Managing Director subject to control by the Board of Directors. The Directors of the Company are appointed by the Governor of Kerala. The Board of Directors delegate powers to Managing Director who is responsible for managing the day to day affairs of the Company.

All decisions relating to resource mobilization, loan disbursements, procurement of fixed assets, administrative affairs, corporate planning, project implementation etc are taken by the Managing Director in the light of the powers delegated to him by the Board of Directors and as per the provisions of the Companies Act and Memorandum and Articles of Association. Decisions which require the approval of the Board is taken after convening Board Meeting in compliance with the provisions of the Companies Act. The approval of the shareholders are also taken for items requiring their approval as required under the Companies Act and as per the provisions of the Memorandum and Articles of Association of the Company. The decisions in the Board meeting are taken on the basis of the agenda notes relating to items to be placed in the Board meetings.

The annual borrowing target of the Company is set out in the light of proposals received from Kerala State Electricity Board, who is the main borrower of funds of KSPIFC. The proposals received from KSEB are scrutinized and evaluated in the light of various financial and technical parameters. If the proposal is found feasible after evaluation, a detailed note is prepared and put up to the Board of Directors recommending the proposal for sanction, specifying the loan amount, rate of interest, period of loan, repayment terms, security for the loan etc. Suitable sources for funding these projects are also identified in the light of various factors like amount of loan required, plan of drawal of the loan funds, period for executing the project etc. Once the sanction is accorded by the Board of Directors, a sanction ticket is issued to KSEB. Simultaneously action is also taken for mobilizing funds from the debt market for funding these projects as per the borrowing programme approved by the Board of Directors. The loan is released either in lumpsum or in instalments depending upon the nature of the project after necessary loan agreements are executed in favour of KSPIFC.

KSPIFC also provides short term loans to Firms supplying electrical components to KSEB against supply bills raised in favour of KSEB. The repayment of the loan guaranteed by KSEB. The loan is for a period not exceeding 90 days. A tripartite agreement is executed between KSPIFC, KSEB and the Firm for getting the payments due to suppliers from KSEB, directly to KSPIFC. Loan upto 90% of the bill amount is provided. The loan is released directly to the Firms upon submission of the original bill duly countersigned by the authorized officer of KSEB and after executing necessary loan agreements.

Functionaries in the Company are responsible for carrying out the duties assigned to each one of them and they shall initiate timely action to complete their duties as per schedule according to the rules and procedures of the Company. They are also responsible for keeping the records of the Company in compliance of the Regulatory / Statutory requirements.

Mechanism for enforcing accountability is strengthened through the role and functioning of Internal Auditors, Statutory Auditors and Comptroller and Auditor General of India. The Accounts are prepared with assistance from the Internal Auditors who are Chartered Accountants. The Accounts are approved by the Board before Audit by the Statutory Auditors. Comments of the Comptroller and Auditor General of India on the audited accounts are obtained as required under the Companies Act. The Comments of the Principal Secretary(Finance), Government of Kerala are also obtained on the audited accounts as per the provisions of the Memorandum and Articles of Association of the Company. The Annual accounts along with the Auditors’ Report, Comments of the Comptroller and Auditor General of India, Comments of the Principal Secretary(Finance), Government of Kerala and the Directors’ Report are placed before the Annual General meeting for adoption by the shareholders. The Annual Report is laid before the State legislature in compliance with Section 619 of the Companies Act.