Organisational coverage of the Statement of Intent

The SOI is focussed on explaining the Crown entity's operating intentions and performance expectations. It encompasses the whole of the entity's business, including interests in other entities.

Subsidiaries

Where a Crown entity has a controlling interest7 in a subsidiary, the parent includes reporting on the subsidiary in its own SOI, and the subsidiary is not required to prepare a separate SOI or a separate annual report.

A parent and its subsidiaries are defined as a Crown entity group. The Crown entity group includes both Crown entity subsidiaries (as defined in s7(1)(c) of the Act) and any other entity that is a subsidiary for the purpose of any applicable financial reporting standard. For example, if a Crown entity has established a charitable trust which is controlled by the parent the trust will be part of the Crown entity group for the purposes of the SOI.

Multi-parent subsidiaries

Where several Crown entities jointly have a controlling interest in a company, but none of the parent Crown entities has a controlling interest in its own right, the "multi-parent subsidiary" is required to produce its own SOI.

If the Minister of Finance is satisfied that it would be unduly onerous for a multi-parent subsidiary to produce an SOI or Annual Report, s157 of the Act allows him/her to exempt such a multi-parent subsidiary from the requirement to do so8. Such a circumstance might arise, for example, if several Crown entities jointly owned a company that provided them laundry services, or a company that did not actually trade.

The Minister of Finance may set conditions as part of any such exemption, for example that one or more of the parent Crown entities includes information in its own SOI about the subsidiary.

Where a Crown entity jointly controlling a company believes that it may qualify for an exemption, it should contact its monitoring department in the first instance.

7 As defined in s5-8 of the Companies Act 1993

8 But not from the requirement to produce audited financial statements