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INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



Eskom's approach to integrated reporting

This integrated report aligns with best practices in integrated reporting. It includes the principles of integrated reporting contained in the international integrated reporting framework, published by the International Integrated Reporting Council (IIRC) in December 2013, and takes into account other guidelines published in this regard

Integrated reporting brings greater cohesion and efficiency to the reporting process. It encourages integrated thinking to break down internal silos and reduce duplication in content, so improving the quality of information available to key stakeholders.

An integrated report focuses on value creation over the short, medium and long term. It uses the “six capitals” in the framework as a guide to ensure that a company considers all resources and how they interact with each other. The integrated report should indicate how the company’s value creation process is impacted by the company’s internal and external environment.

This report focuses on qualitative and quantitative items that are material to Eskom’s operations and strategic objectives. The question of what is “material” has been determined by the board and executive management through extensive consultation within Eskom as well as with Eskom’s stakeholders, while taking into consideration Eskom’s strategic objectives, risk assessments and the way in which its value chain operates (refer to page 51 for more information regarding the determination of material items).

Eskom’s integrated report steering committee guides the company in compiling this report and ensures alignment with other reporting processes. The finance director chairs this committee and reports on the process to the executive management committee.

The integrated reporting pilot programme

Eskom has been a member of the IIRC’s pilot programme since its inception. More than 100 companies from around the globe have joined the programme’s business network since it was launched in October 2011. These companies interact with the council and each other through regional and sector meetings, through web-based seminars, conferences and through a dedicated pilot programme community website. This wide-ranging interaction provides the opportunity to discuss and challenge technical material, test its application and share knowledge and experiences.

Eskom’s 2012/13 integrated report was well received and was followed by an interim integrated report in December 2013. Reviews of these reports identified a number of ways to improve the report, which have been considered in compiling the 2013/14 report.

Board responsibility and approval statement

The board, assisted by its respective committees, is ultimately responsible for overseeing the integrity and completeness of the integrated report. The board have applied their collective mind to the preparation and presentation of the integrated report and have concluded that it is presented in accordance with the international integrated reporting framework version 1.0 (IIRC framework).

On 29 May 2014, the board approved the 2014 integrated report taking into consideration the completeness of the material items it deals with and the reliability of data and information presented, in line with the combined assurance process followed.

Sustainability

Global Compact LEAD

Eskom was one of the first signatories to the United Nations Global Compact (UNGC) in 1999 and is committed to its principles. Eskom reports on its progress in complying with the UNGC principles on an annual basis. Eskom is also a UNGC LEAD company, recognised for leadership in the sustainability field.

Global Reporting Initiative (GRI)

Eskom continues to use the GRI G3 guidelines, supported by Eskom internally developed guidelines, as a basis for reporting its sustainability information. Eskom is currently assessing the efficacy of transitioning from G3 to G4 as well as the application of the IIRC framework.

Sustainability audit, combined assurance and King III

Selected sustainability KPIs were subject to external assurance. These are marked with an “RA” in appendix A and B on pages 170 to 177. The assurance opinion is on page 180.

Eskom follows a combined assurance approach (refer page 75 for detail). Eskom’s reports are also prepared with due consideration to King III. Refer to www.eskom.co.za/IR2014/03.html for more information on King III.

Reporting boundary

This integrated report reviews Eskom’s performance for the year from 1 April 2013 to 31 March 2014.

This report holistically examines Eskom’s performance in relation to its strategic objectives (refer content items 05 through to 12), taking into account the environment in which the company operates, its long-term goals, the risks that might prevent it from achieving those goals and the measures put in place to mitigate these risks (refer Eskom’s business model on page 31 for more detail on the company’s operations).

Unless otherwise stated, the information in this report refers to the Eskom group, comprising the Eskom business and its major subsidiaries (Eskom Enterprises SOC Limited, Escap SOC Limited, Eskom Finance Company SOC Limited and the Eskom Development Foundation NPC). (Refer page 42 for more detail.)

Structure of the report

This report includes information on Eskom’s business model, its approach to leadership and governance and its operational performance during the year under review. It is structured as follows:

Letter from the chairperson discusses key reflections and provides insight into the shareholder’s vision for the utility
The chief executive’s report provides an executive summary, highlighting key areas in operational performance, Eskom’s progress in achieving its long-term strategic objectives and the main areas that will need to be addressed during the year ahead
The shareholder’s compact details Eskom’s performance against key performance indicators as set by its shareholder, the government of South Africa, represented by the Minister of Public Enterprises
About the Eskom group outlines Eskom’s business model, highlighting the internal and external factors that affect its operations. It details the company’s corporate structure and its purpose, values and strategic objectives and outlines Eskom’s strategic priorities for the year to come and beyond
Defining material items in partnership with stakeholders explains Eskom’s methodology in identifying the material items that have a bearing on performance and the risks relating to these material items. It also provides a reference for where these items are discussed in greater detail in the report
Leadership and corporate governance provides insight into Eskom’s corporate governance framework. It also sets out leadership’s key focus areas for the year under review and details the link between performance and remuneration
Performance on strategic objectives details Eskom’s performance on key performance indicators relevant to its eight strategic objectives. It includes performance targets and actual measurements for key indicators relevant to each objective, as well as commentary on performance. Operating highlights, challenges and future focus areas are also summarised
Summarised group financial results are a summarised version of the full annual financial statements
Appendices consist of:

A table containing the key performance indicators discussed in this report
A table containing other performance indicators
An overview of awards Eskom received in 2013/14
Sustainability assurance statements reflecting Eskom’s sustainability responsibilities, and approval and assurance statements from Eskom and the external assurance provider
A list of abbreviations and acronyms, and a glossary
Eskom’s contact details