NOTES TO THE FINANCIAL STATEMENTS - NOTE 5


 

5. Segment information
  Management has determined the reportable segments, as described below, based on the reports regularly provided, reviewed and used by the Exco to make strategic decisions and assess performance of the segments. Exco assesses the performance of the operating segments based on a measure of profit or loss consistent with that of the financial statements. The amounts provided to Exco with respect to total assets and liabilities are measured in terms of IFRS. These assets and liabilities are allocated based on the operation of the segment and the physical location of the assets.

The operations in each of the group’s reportable segments are as follows:

Generation   Consists of the generation and primary energy functions. These functions procure primary energy and generate electricity for sale.
Transmission   Consists of the transmission grids, systems operations and the South African Energy unit (international buyer). These functions operate and maintain the transmission network for transmitting electricity and also sell bulk electricity to international customers.
Distribution   Distribution consists of nine provincial operating units. These units provide, operate and maintain the distribution network for distributing.
Group customer services   Group customer services consists of the customer service and integrated demand management functions and sells electricity to local key large, redistributors, large and small customers.
Group capital   Group capital is responsible for the planning, development and monitoring of all capital projects and the execution of capacity expansion projects.
All other segments   Relates to operating segments which are below the quantitative thresholds for determining a reportable segment in terms of IFRS 8 Operating segments. These include the group’s subsidiaries.
Corporate and other   Relates to all service and strategic functions which do not qualify as a reportable segment in terms of IFRS 8 Operating segments.

The segment information provided to Exco for the reportable segments is as follows:

  Generation Transmission Distribution Group
customer
services
Group
capital
All other
segments
Corporate
and other
Inter-segment
transactions
  Group  
2014 Rm Rm Rm Rm Rm Rm Rm Rm   Rm  
Continuing operations                      
External revenue 6 446 817 131 007 1 236   139 506  
Inter-segment revenue/recoveries 97 303 6 932 20 623 (124 816) 9 184 (9 226)    
Total revenue 97 303 13 378 21 440 6 191 10 420 (9 226)   139 506  
Primary energy (62 716) (6 577) (350) (169)   (69 812)  
Net employee benefit expense (6 597) (1 480) (6 818) (1 407) (784) (3 271) (5 300) 35   (25 622)  
Depreciation and amortisation expense (6 436) (1 205) (2 809) (9) (70) (260) (1 402) 254   (11 937)  
Net impairment loss (12) (18) (7) (1 482) (2) (7) (29)   (1 557)  
Other operating expenses (16 694) (2 498) (8 726) (2 689) 31 (7 578) 6 195 12 782   (19 177)  
Operating profit/(loss) before net fair value gain/(loss) and net finance (cost)/income 4 848 1 600 3 080 254 (994) (696) (536) 3 845   11 401  
Other income 504 354 317 154 96 401 490 (1 354)   962  
Net fair value gain/(loss) on financial instruments, excluding embedded derivatives 691 206 46 (1 885) 126 190 6   (620)  
Net fair value gain on embedded derivatives 2 149   2 149  
Operating profit/(loss) before net finance (cost)/income 6 043 1 954 3 603 2 603 (2 783) (169) 144 2 497   13 892  
Net finance (cost)/income (3 715) (744) (526) 268 (6) (155) 106   (4 772)  
   Finance income 15 54 48 439 353 2 067 (501)   2 475  
   Finance cost (3 730) (798) (574) (171) (6) (508) (1 961) 501   (7 247)  
Share of profit of equity-accounted investees 16 27   43  
Profit/(loss) before tax 2 328 1 210 3 077 2 871 (2 789) (308) 277 2 497   9 163  
Income tax 87 (1 521) (703)   (2 137)  
Profit/(loss) for the year from continuing operations 2 328 1 210 3 077 2 871 (2 789) (221) (1 244) 1 794   7 026  
Discontinued operations                      
Profit for the year from discontinued operations 63   63  
Profit/(loss) for the year 2 328 1 210 3 077 2 871 (2 789) (158) (1 244) 1 794   7 089  
Other information                      
Segment assets 116 066 34 784 65 070 13 658 210 439 26 009 62 249 (23 747)   504 528  
Investment in equity-accounted investees 51 95 172   318  
Non-current assets held-for-sale 147   147  
Total assets 116 066 34 784 65 070 13 658 210 439 26 207 62 344 (23 575)   504 993  
Total liabilities 37 297 2 292 23 081 17 598 15 863 19 365 291 555 (21 842)   385 209  
Capital expenditure (including borrowing costs capitalised) 14 634 6 440 11 596 37 186 455 3 310 (905)   72 716  
2013                      
Continuing operations                      
External revenue 5 999 570 120 773 1 433   128 775  
Inter-segment revenue/recoveries 86 395 4 739 18 703 (109 855) 8 089 (8 071)    
Total revenue 86 395 10 738 19 273 10 918 9 522 (8 071)   128 775  
Primary energy (52 353) (5 011) (3 105) (279)   (60 748)  
Net employee benefit expense (6 302) (1 379) (6 119) (1 344) (699) (2 788) (4 933)   (23 564)  
Depreciation and amortisation expense (5 210) (954) (2 662) (12) (68) (236) (882) 64   (9 960)  
Net impairment (loss)/reversal (3) 2 (1 020) 1 (17) (2)   (1 039)  
Other operating expenses (16 045) (2 317) (7 480) (4 761) 204 (5 766) 5 516 7 610   (23 039)  
Operating profit/(loss) before net fair value (loss)/gain and net finance income/(cost) 6 482 1 077 3 014 676 (841) 715 (301) (397)   10 425  
Other income 387 686 326 162 73 384 618 (1 510)   1 126  
Net fair value (loss)/gain on financial instrument, excluding embedded derivatives (8) (4) 48 (2) (1 535) 22 (176)   (1 655)  
Net fair value loss on embedded derivatives (5 942)   (5 942)  
Operating profit/(loss) before net finance income/(cost) 6 861 1 759 3 388 (5 106) (2 303) 1 121 141 (1 907)   3 954  
Net finance income/(cost) 3 153 569 (464) (46) (30) (147) (32)   3 003  
   Finance income 20 29 50 76 21 340 2 709 (449)   2 796  
   Finance cost 3 133 540 (514) (122) (51) (487) (2 741) 449   207  
Share of profit of equity-accounted investees 9 26   35  
Profit/(loss) before tax 10 014 2 328 2 924 (5 152) (2 333) 983 135 (1 907)   6 992  
Income tax (273) (2 117) 534   (1 856)  
Profit/(loss) for the year from continuing operations 10 014 2 328 2 924 (5 152) (2 333) 710 (1 982) (1 373)   5 136  
Discontinued operations                      
Profit for the year from discontinued operations 47   47  
Profit/(loss) for the year 10 014 2 328 2 924 (5 152) (2 333) 757 (1 982) (1 373)   5 183  
Other information                      
Segment assets 106 798 29 190 56 560 10 261 173 884 22 063 50 527 (17 563)   431 720  
Investment in equity-accounted investees 35 95 166   296  
Non-current assets held-for-sale 8   8  
Total assets 106 798 29 190 56 560 10 261 173 884 22 106 50 622 (17 397)   432 024  
Total segment liabilities 34 247 2 569 21 328 18 373 13 010 15 055 232 148 (13 845)   322 885  
Capital expenditure (including borrowing costs capitalised) 15 290 6 271 9 271 18 28 157 396 2 255 (612)   61 046  

Inter-segment purchases and revenue of electricity are allocated between the Generation, Transmission, Distribution and Group customer services segments based on cost recovery plus a uniform return on assets.

  Group  
  Revenue   Non-current assets  
Geographical information 2014
Rm
  2013
Rm
  2014
Rm
  2013
Rm
 
South Africa 133 495   122 596   416 013   355 228  
Foreign countries 6 011   6 179   114   106  
  139 506   128 775   416 127   355 334  

The group’s reportable segments operate mainly in South Africa, which is Eskom’s country of domicile.

Revenue is allocated based on the country in which the customer is located after eliminating inter-segment transactions. There is no significant revenue derived from a single external customer by any of the reportable segments.

Non-current assets disclosed for geographical information comprise non-current assets other than deferred tax assets and financial instruments.