Independent auditors' report to Parliament and the shareholder - Minister of Public Enterprises
Report on the financial statements
We have audited the financial statements of the group and Eskom
Holdings SOC Limited (Eskom), which
comprise the statements of financial position as at 31 March 2014,
income statements, statements of comprehensive income, changes in
equity and cash flows for the year then ended, and the notes,
comprising a summary of significant accounting policies and other
explanatory information to the financial statements.
Directors’ responsibility for the financial statements
The board of directors, which constitutes the accounting authority, is
responsible for the preparation and fair presentation of these financial
statements in accordance with International Financial Reporting
Standards and the requirements of the Public Finance Management
Act of South Africa and the Companies Act of South Africa and for such
internal control as the directors determines is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ responsibility for the financial statements
Our responsibility is to express an opinion on these financial statements
based on our audit. We conducted our audit in accordance with the
Public Audit Act of South Africa, the General Notice issued in terms
thereof and International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors’ judgement, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, these financial statements present fairly, in all material
respects, the consolidated and separate financial position of Eskom
Holdings SOC Limited as at 31 March 2014, and its consolidated and
separate financial performance and consolidated and separate cash
flows for the year then ended in accordance with International Financial
Reporting Standards and the requirements of the Public Finance
Management Act of South Africa and the Companies Act of South Africa.
Other reports required by the Companies Act
As part of our audit of the financial statements for the year ended
31 March 2014, we have read the report of the audit and risk committee,
the statement by the company secretary and the directors’ report for
the purpose of identifying whether there are material inconsistencies
between these reports and the audited financial statements. These
reports are the responsibility of the respective preparers. Based on
reading these reports we have not identified material inconsistencies
between these reports and the audited financial statements. However,
we have not audited these reports and accordingly do not express an
opinion on these reports.
Report on other legal and regulatory requirements
Public Audit Act Requirements
In accordance with the Public Audit Act of South Africa (PAA), and the General Notice issued in terms thereof, we report the following findings
relevant to the reported performance against predetermined objectives,
compliance with laws and regulations as well as internal control. We
performed tests to identify reportable findings as described under each
subheading but not to gather evidence to express assurance on these
matters. Accordingly, we do not express an opinion or conclusion on
these matters.
Predetermined objectives
We performed procedures to obtain evidence about the usefulness and
reliability of the information in the Performance in terms of the
shareholder compact section included in the directors’ report of the financial statements, and reported thereon to the
directors. The procedures performed were limited to the following
selected objectives:
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keep the lights on |
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put customer at the centre |
• |
deliver capital expansion |
• |
ensure financial sustainability |
• |
build strong skills (total pipeline or new enrolments) |
• |
maximising socio-economic contribution |
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The reported performance against predetermined objectives was
evaluated against the overall criteria of usefulness and reliability.
The usefulness of information in the reported performance against
predetermined objectives relates to whether it is presented in
accordance with the National Treasury’s annual reporting principles
and whether the reported performance is consistent with the planned
objectives. The usefulness of information further relates to whether
indicators and targets are well defined, verifiable, specific, measurable
and time bound and relevant as required by the National Treasury Framework for managing programme performance information.
The reliability of the information in the reported performance against
predetermined objectives is assessed to determine whether it is valid,
accurate and complete.
We report that there were no material findings on the Performance in
terms of the shareholder compact section included in the directors’
report concerning the usefulness and reliability of the information for
the selected objectives.
Additional matter
Although no material findings concerning the usefulness and reliability
of the reported performance against predetermined objectives were
identified, we drew attention to the following matter in our report to the
directors:
Achievement of planned targets
Refer to the information in the Performance in terms of the shareholder
compact section included in the directors’ report of the financial statements for information on the
achievement of planned targets for the year.
Compliance with laws and regulations
We performed procedures to obtain evidence that the entity has
complied with applicable laws and regulations regarding financial
matters, financial management and other related matters. We did not
identify any instances of material non-compliance with specific matters
in key applicable laws and regulations as set out in the General Notice issued in terms of the PAA.
Internal control
We considered internal control relevant to our audit of the financial
statements, the Performance in terms of the shareholder compact section included in the directors’ report and compliance with laws and
regulations, but not for the purpose of expressing an opinion on the
effectiveness of internal control. We did not identify any deficiencies in
internal control that we considered sufficiently significant for inclusion
in this report.
Other reports
Investigations in progress and completed
During the financial year under review the group initiated investigations
into alleged irregularities and fraud within the procurement and asset
management environments. No material findings were identified
relating to those investigations completed during the year. At the
reporting date, certain investigations are still ongoing.
Agreed-upon procedure engagement
As requested by Eskom Holdings SOC Limited, the following engagement
was conducted for the period 1 April 2013 to 31 March 2014:
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National Treasury consolidation template |
KPMG Inc
Registered auditor |
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SizweNtsalubaGobodo Inc
Registered auditor |
Per HG Motau
Charted Accountant (SA)
Registered Auditor
Director |
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Per JE Strauss
Charted Accountant (SA)
Registered Auditor
Director |
29 May 2014 |
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29 May 2014 |
85 Empire Road
Parktown
2193 |
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20A Morris Street East
Woodmead
2191 |
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