Investments Division

State Enterprises

The Minister of Finance (Corporation Sole) has responsibility for the State’s entire portfolio of investments of which the State Enterprise Sector is a major element.

At this time, the portfolio includes:

• Forty-seven (47) wholly-owned companies;
• Seven (7) majority-owned companies;
• Five (5) minority-owned (i.e. less than fifty percent holdings); and
• Forty-Nine (49) companies held indirectly as subsidiaries of wholly-owned companies.

Additionally, seventeen (17) non-operational companies are at various stages of liquidation.

The Investments Division of the Ministry acts on behalf of the Minister of Finance (Corporation Sole) and carries out corporate functions such as:

1. Shareholder Function:
   1. Appointment of directors to the Board of Directors of the State Enterprises;
   2. Representing Corporation Sole’s interest at Annual General Meetings;
   3. Submission of the annual audited accounts of the State Enterprises to the Public Accounts (Enterprises) Committee (PAEC) on a yearly basis;
   4. Maintenance of the Share Register of Government shareholdings in the State Enterprise Sector.
2. General Performance Monitoringof the State Enterprise Sector
   1. Financial Monitoring: conducting an analysis of the Enterprises profitability;
   2. Revenue collection from State Enterprises: this includes dividend payments, repayment of loans to Government;
   3. Funding for State Enterprises: such as subsidy payments, deficit financing to fund operating expenses, capital injection, loan repayment;
   4. Monitoring of State Enterprise indebtedness: These include all loans sourced by the State Enterprises.
3. Management of Government’s Investment Portfolio 
   1.    Inform and review Divestment Policy;
   2.    Divestment Proposals;
   3.    Investment Appraisal.
4. Compensation to Boards of Directors
   1. Classification of State Enterprises, Statutory Bodies and Cabinet Appointed Committees for the payment of fees to the Board of Directors.

In addition, as part of its function, the Division prepares a number of reports routinely.

These include:

• State Sector Resources
• State Enterprise Boards of Directors Listing
• State Enterprise Borrowings
• Government Shareholding in Enterprises
• List of State Enterprises
• Companies and Statutory Boards under the purview of the Ministry of Finance
• State Enterprises Performance Monitoring Manual (SEPM)
• State Enterprise Investment Programme (SEIP)

Central Audit Committee

The Central Audit was established by Cabinet Minute #1266 of September 2001.  The Unit became operational in November 2002 and is headed by a Director with supervisory responsibility for six Senior Audit Analysts.

The main function of the unit is to monitor the performance of State Enterprises and to conduct audits if necessary, to ensure that the internal controls exist to maintain the integrity of their assets and their revenue streams.

Another function is to develop the Internal Audit Functions of the State Enterprises to give the necessary assurances to the Board of Directors and ultimately the Minister of Finance that the enterprises are functioning efficiently and adhering to the directives of the line Ministries and the Corporation Sole.

The members of the unit also sit on the Audit Committees of the State Enterprises, thereby obtaining first-hand knowledge of potential issues facing the enterprises.  Thus mitigation strategies could be put in place to neutralise any fallout.  Also the Minister of Finance could be alerted to potential problems and bring his influence to bear to avoid them.

The unit also receives from the State Enterprises monthly award of contracts for review to ensure that the State Enterprises are following established procurement procedures.  After review the unit may select certain contracts for a detailed review.  This highlights any flaws in the procurement procedures of the Enterprises and provides feedback for correction to ensure that there is accountability in the State Enterprises for the issue of contract.