NOTES TO THE FINANCIAL STATEMENTS - NOTE 46


 

46. Related-party transactions

The group is wholly owned by its shareholder, the government, represented by the DPE.

Eskom (and its subsidiaries) are classified as Schedule 2 public entities in terms of the PFMA.

Eskom’s government related parties include national departments (including the shareholder), constitutional institutions, public entities (schedule 1, 2 and 3) and local government (including municipalities).

Eskom’s transactions with local government (with the exception of municipalities) are not individually significant when compared to the total value of the transactions between Eskom and other government related parties and are therefore not disclosed separately. These include, among others, transactions as a result of services provided to government hospitals and libraries.

Related parties also comprise subsidiaries of Eskom, associates and joint ventures of the group and post-employment benefit plans for the benefit of employees. It also includes key management personnel of Eskom or its shareholder and close family members of these related parties.

The list of public entities in the national sphere of government is provided by National Treasury on its website www.treasury.gov.za. It also provides the names of subsidiaries of public entities.

Key management personnel for Eskom include the group’s board of directors and the Exco. Disclosure of related-party transactions with key management personnel is included in note 49.

The following transactions were carried out with related parties:


      Group     Company  
  Note   2014
Rm
    2013
Rm
    2014
Rm
    2013
Rm
 
Transactions                          
Sales of goods and services1     72 639     67 984     73 950     69 468  
National departments     608     669     599     668  
Local government     64 644     60 956     64 644     60 956  
Public entities     4 689     3 907     4 623     3 836  
Eskom subsidiaries             1 386     1 559  
Joint venture in which Eskom is a partner     2 698     2 452     2 698     2 449  
Government grant funding received for electrification                          
National departments     2 887     2 363     2 887     2 363  
Purchases of goods and services2     12 874     8 336     21 833     15 590  
National departments     1 263     950     1 262     950  
Local government     1 138     882     1 130     882  
Public entities     8 252     4 036     8 173     4 031  
Eskom subsidiaries             9 167     7 360  
Joint venture in which Eskom is a partner     333     160     333     160  
Other related parties 34   1 888     2 308     1 768     2 207  
Finance income     1 371     1 458     1 724     1 784  
National departments     773     740     773     740  
Local government     303     179     303     179  
Public entities     295     539     295     539  
Eskom subsidiaries             353     326  
Finance cost     6 047     6 947     6 168     7 036  
National departments     2 046     3 731     2 046     3 731  
Public entities     3 923     3 183     3 923     3 183  
Eskom subsidiaries             121     89  
Other related parties     78     33     78     33  
Lease income     75     61     78     71  
Public entities     75     61     75     61  
Eskom subsidiaries             3     10  
Lease expenses                          
Eskom subsidiaries                 1  
Finance lease finance cost                          
Eskom subsidiaries             26     34  
Environmental levy                          
Public entities 33   8 530     7 971     8 530     7 971  
1. Goods and services are sold to related parties on an arm’s length basis at market-related prices.
2. Goods and services are bought from related parties on an arm’s length basis at market prices
        Group         Company    
  Note     2014
Rm
    2013
Rm
        2014
Rm
    2013
Rm
   
Outstanding balances (due by related parties)                                  
Receivables and amounts owed by related parties       8 447     6 987         9 569     8 066    
National departments       21     54         19     54    
Local government       6 927     5 142         6 927     5 142    
Public entities       1 181     1 568         1 132     1 529    
Eskom subsidiaries                   1 173     1 118    
Joint venture in which Eskom is a partner       318     223         318     223    
Payments made in advance       30     21         35     105    
Public entities       30     21         30     21    
Eskom subsidiaries                   5     84    
Loan to Eskom subsidiaries1                   6 665     6 223    
Indirect transactions – assets at nominal value                                  
National departments       8 094     10 091         8 094     10 091    
Total due by related parties       16 571     17 099         24 363     24 485    
Cash and cash equivalents                                  
Public entities       7 835     5 944         7 835     5 944    
Outstanding balances (due to related parties)                                  
Payables2 and amounts owed to related parties       62 603     62 193         65 807     65 339    
National departments       60 113     60 071         60 112     60 071    
Subordinated loan from shareholder 24     60 000     60 000         60 000     60 000    
Other       113     71         112     71    
Local government       80     279         79     279    
Public entities       1 955     1 640         1 866     1 639    
Eskom subsidiaries                   3 295     3 147    
Joint venture in which Eskom is a partner       44     10         44     10    
Other related parties       411     193         411     193    
Payments received in advance                                  
National departments       1 531     1 478         1 531     1 478    
Loan from subsidiaries1                   2 453     2 003    
Debt securities and borrowing3       61 867     47 763         61 867     47 763    
Public entities       60 686     46 811         60 686     46 811    
Other related parties       1 181     952         1 181     952    
Indirect transactions – liabilities at nominal value                                  
National departments       805     188         805     188    
Total due to related parties       126 806     111 622         132 463     116 771    
Guarantees                                  
Guarantees received       350 077     350 095         350 077     350 095    
National departments       350 000     350 000         350 000     350 000    
Committed       153 611     153 611         153 611     153 611    
Uncommitted       196 389     196 389         196 389     196 389    
Local government       43     42         43     42    
Public entities4       34     53         34     53    
Guarantees issued       348     350         1 466     1 390    
National departments 44.2     183     183         183     183    
Eskom subsidiaries 44.1                 1 118     1 040    
Joint venture in which Eskom is a partner 44.1     165     167         165     167    
Commitments                                  
Eskom does not have any commitments with its related parties                                  
1. The loans to and from subsidiaries is payable on demand. The effective interest rate on the loans to subsidiaries is 5.91% (2013: 5.29%).
2. Purchase transactions with related parties are at an arm’s length basis with payment terms of 30 days from invoice date.
3. Bonds are bearer instruments and it is therefore unknown if the initial counterparty still holds the bonds.
4. The guarantees from state-owned entities are for future or unpaid electricity consumption accounts.