Part 1: Introduction

State-owned enterprises: Results of the 2012/13 audits.

This report sets out the results from our 2012/13 audits of State-owned enterprises (SOEs) and two listed companies that are majority owned by the Crown (see Appendix 1).1 In this report, we refer to these 18 entities as "the companies".


New Zealand's SOEs generate significant revenue and are responsible for managing major assets and infrastructure. SOEs are established under the State-Owned Enterprises Act 1986, registered as companies, and bound by the provisions of the Companies Act 1993.2

The principal objective of an SOE is to operate as a successful business and to be as profitable and efficient as comparable businesses that are not owned by the Crown. SOEs are also required to be good employers and to show a sense of social responsibility.

The Auditor-General is the statutory auditor of all SOEs and their New Zealand subsidiaries. In this role, she is responsible for the annual audit and other aspects of the Auditor-General's mandate provided for by the Public Audit Act 2001.

As at 30 June 2013, the companies managed combined assets of $52.5 billion (book value) and generated revenue of $16.37 billion. On a group basis, they represented total shareholder equity of $20.2 billion.3

Structure of this report

Part 2 sets out the results from our annual audits of the companies.

Part 3 discusses what the companies' audited financial statements can tell us about their financial health. We do not provide a definitive judgement on the companies' financial health and their vulnerability to uncertainty. Instead, our analysis provides "indicators" that should prompt further questions by the companies, shareholders, and auditors.

Part 4 sets out the results of follow-up work we did to see how Transpower has responded to recommendations we made in 2011. Our 2011 report, Transpower New Zealand Limited: Managing risks to transmission assets, is available at

Part 5 outlines:

  • the Auditor-General's role in the public share offer for Mighty River Power Limited, Genesis Energy Limited, and Meridian Energy Limited; and
  • the public accountability requirements for these companies.

Appendix 1 lists the companies and briefly describes what they do. Appendix 2 provides financial data to supplement the analysis in Part 3.

1: We count Meridian Energy Limited and Genesis Energy Limited as SOEs because they were publicly listed after 30 June 2013.

2: The New Zealand Railways Corporation is a statutory corporation established by the New Zealand Railways Corporation Act 1981. It is an SOE but not a company, so is not bound by the provisions of the Companies Act 1993.

3: In accounting terms, shareholder equity is a company's total assets minus its total liabilities. The remaining interest in the assets is spread between the shareholders of the company. For the companies, shareholder equity includes government and minority interest.