Chirayuthchai TraisaengsatheanStrategic Finance for Property Development

Delegation of authority at group level

A single approval authority table for payments, loans, guarantees, intercompany transactions and reserved matters

Key takeaways

  • This is the only authority table on the website. Use it to resolve conflicts between multiple documents, such as guarantee authority and intercompany transactions.
  • All limits are examples for a company with annual revenue above THB 2,000 million. Adjust them to the size of the business and the company's articles of association.
  • Related-party transactions, or transactions that bind the whole group, must go to the board even when the amount is small.

Why a single table

When the finance policy, procurement policy and project handbook state different limits, staff will pick whichever version is most convenient, and banks or auditors will raise questions. Set an order of precedence: the articles of association and board resolutions come first, then this table. Other documents should refer to the single table and not copy the figures again.

In preparing this page, the rules were consolidated into a single framework. Bank guarantees are tiered by amount: CFO, CFO with CEO, and the board. Intercompany transactions have three tiers: CFO, CEO with a director, and the board.

Design principles

  • Segregation of duties: the preparer, approver and recorder must be different people.
  • Aggregate approval: do not split a transaction to avoid a limit.
  • Within budget first: limits apply only to items in an approved budget. Anything outside the budget must follow the budget amendment table.
  • Interested parties abstain: a director with an interest in a transaction does not vote on it.
  • Holding and SPV: an SPV needs its own resolution under its articles even if the Holding has approved, and a JV must be checked against the reserved matters in the joint venture agreement.

Payment authority table

This applies to payments already within budget, both general expenses and construction progress payments. A construction progress payment must always have a payment certificate first.

LevelLimit per transaction (THB)Approver
1≤100,000Head of department
2100,001–500,000Department manager
3500,001–2,000,000Treasurer + CFO
42,000,001–10,000,000CFO + CEO
510,000,001–50,000,000CEO + authorised director
6Over 50,000,000Board

Topic-specific table (THB million)

TransactionConditionsApprover
Purchase of new landIn all casesBoard
Launch of a new projectEvery projectBoard
Project budgetInitial budget, and amendments over 10%Board
Budget amendment within contingencyUp to 10%CFO + CEO
Approved bank list and signatoriesIn all casesBoard
Opening/closing accounts within the approved frameworkProject, Escrow, DSRACFO, with a report to the board
New project loans, mortgages and collateralAll amountsBoard
Refinancing within the existing limit and structureIn all casesCFO + CEO
Refinancing with a change of structureIn all casesBoard
Drawdown NoticeWithin the approved limitCFO + CEO
Bank Guarantee / L/C≤20CFO
Bank Guarantee / L/C>20–100CFO + CEO
Bank Guarantee / L/C>100Board
Letter of guarantee for housing estate allocationIn all casesCFO + CEO
Intra-group corporate guaranteeIn all casesBoard
Annual intercompany loan frameworkSet a cap per counterpartyBoard
Transfers within the intercompany framework≤20CFO
Transfers within the intercompany framework>20–50CEO + director
Intercompany transfers over the framework or >50In all casesBoard
Investment in instruments on the approved list≤50 / ≤200 / >200CFO / CEO / board
FX Forward≤50 / ≤100 / >100CFO / CEO / board
Interest Rate SwapIn all casesBoard
Refunds of booking deposits/down payments where the company is not in breach of contractIn all casesCFO and above
Purchases from related companies outside the budget frameworkIn all casesBoard
Variation Order<10 / ≥10Division director / CFO within budget

Matters reserved at group level

TopicCEOBoardShareholders
Establishing or winding up a subsidiaryProposeApprove—
Investment in a JVProposeApprove—
Acquisition or sale of a businessProposeApprove—
Merger, capital increase, capital reductionProposeProposeApprove
Interim dividends—Approve—
Annual dividendsProposeProposeApprove
Amendment of the articles of associationProposeProposeApprove
Personal guarantee by a director or shareholder—AcknowledgeApprove

Shareholder authority must be checked against the law and the articles of association of each company.

Procurement and contracts (THB million)

TransactionManagerDirectorCFO/COOCEOAbove that
PO for goods0.521050Board
PO for services0.31530Board
Single Sourcing0.10.5210Board
Office CAPEX0.11530Board
General contracts—11050Board
Bad debt write-off—0.1110Board

A procurement limit is the approval to incur a commitment, while the payment authority table is the approval to pay. Every transaction must pass both steps, and the same person should not handle all of them.

Putting it into practice

  • Check the table against each company's articles of association and certificate of registration.
  • Check the resolution requirements the bank needs.
  • Set up access rights in e-banking and the ERP to match the table.
  • Review at least once a year, and whenever executives change.
  • Sample-check smaller transactions that may have been split to avoid a limit.