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INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



Appendix D: Sustainability responsibilities, approval and assurance statements

Sustainability assurance statements

Sustainability key performance indicators, set out within this report, measure performance on issues material to stakeholders. These key performance indicators have been prepared in accordance with the GRI G3 guidelines, supported by Eskom’s internal reporting guidelines.

The King Code advocates that sustainability reporting and disclosure should be independently assured. KPMG Services Proprietary Limited provided reasonable assurance on selected sustainability key indicators marked with an “RA” in appendices A and B of this 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.

The board believes the integrated report is a fair presentation of the integrated performance of the group and appropriately takes 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.

MC Matjila
Interim chief executive
TBL Molefe
Finance director
29 May 2014 29 May 2014

Independent assurance report on selected sustainability information to the directors of Eskom Holdings SOC Limited

We have undertaken a reasonable assurance engagement on selected sustainability information as described below and presented in the 2014 integrated report (the report) of Eskom Holdings SOC Limited (Eskom) for the year ended 31 March 2014. This engagement was conducted by a multidisciplinary team including health, safety, environmental and assurance specialists with extensive experience in sustainability reporting.

Subject matter

We are required to provide reasonable assurance on the following key performance indicators prepared in accordance with the Global Reporting Initiative (GRI) G3 guidelines, marked with an “RA” and presented in the table in Appendix A (key performance indicators) and Appendix B (other performance indicators):

Technical performance parameters:
- Unplanned capability loss factor (UCLF)
- Unit capability factor (UCF)
- Energy availability factor (EAF)
- Planned capability loss factor (PCLF)
- System minutes lost (<1 minute)
- Total system minutes lost
- Major incidents
- System average interruption frequency index (SAIFI)
- System average interruption duration index (SAIDI)
- Management of the national supply/demand constraints
- OCGT load factor trend
- Energy losses (transmission and distribution)
- Integrated demand management (megawatts)
- Internal energy efficiency (gigawatts).
Environmental performance parameters
- Coal road to rail migration
- Specific water consumption
- Liquid fuel usage (diesel and kerosene)
- Particulate emissions (total tonnages)
- Relative particulate emissions
- Carbon dioxide emissions
- Sulphur dioxide emissions
- Nitrogen oxides emissions
- Low level radioactive waste (generated and disposed)
- Intermediate level radioactive waste (generated and disposed)
- Ash (produced and recycled)
- Environmental legal contraventions in terms of the operational health dashboard
Social performance parameters
- Engineering learners
- Technician learners
- Artisan learners
- Strategic youth development programme
- Broad-based black economic empowerment (B-BBEE) expenditure (company and group – attributable spend and percentage)
- Black women-owned expenditure (company and group – attributable spend and percentage)
- Black-owned expenditure (company and group – attributable spend and percentage)
- Black youth-owned expenditure (company and group – attributable spend and percentage)
- Corporate social investment (committed rand value, spend rand value and number of beneficiaries)
- Total employee and contractor work-related fatalities
- Employee work-related fatalities
- Contractor work-related fatalities
- Employee lost-time incidence rate (LTIR)
- Disabilities (company and group – number and percentage)
- Racial equity in senior management (company and group – percentage of black employees)
- Gender equity in senior management (company and group – percentage of female employees)
- Racial equity in professionals and middle management (company and group – percentage of black employees)
- Gender equity in professionals and middle management (company and group – percentage of female employees)
- Job creation
- Training spend as a percentage of gross employee benefit costs
Economic parameters:
- Generation capacity installed and commissioned
- Transmission lines installed
- Transmission capacity installed and commissioned (MVA)
- Total number of electrification connections
- Maintenance backlog reduction based on Eskom technical governance committee approval
- Generation new build capacity milestones
- Coal purchased stock days
- Cost of electricity (excluding depreciation)
- Capital expenditure (excluding capitalised borrowing costs)
- Debt:equity ratio (company)
- Interest cover (company)
- Free funds from operations (company and group – percentage of total debt))
- Percentage of local content in new-build contracts

Directors’ responsibilities

The directors are responsible for the selection, preparation and presentation of the sustainability information in accordance with the GRI G3 guidelines. This responsibility includes the identification of stakeholders and stakeholder requirements and material issues, for commitments with respect to sustainability performance, and for the design, implementation and maintenance of internal control relevant to the preparation of the report that is free from material misstatement, whether due to fraud or error.

Our independence and quality control

We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standard Board for Accountants, which includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

In accordance with International Standard on Quality Control 1, KPMG Services Proprietary Limited maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Our responsibility

Our responsibility is to express an opinion on the selected sustainability information based on the evidence we have obtained. We have conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE 3000), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. That standard requires that we plan and perform our engagement to obtain reasonable assurance about whether the selected sustainability information is free from material misstatement.

A reasonable assurance engagement in accordance with ISAE 3000 involves performing procedures to obtain evidence about the quantification of the selected sustainability information and related disclosures. The nature, timing and extent of procedures selected depend on the practitioner’s judgement, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments we considered internal control relevant to Eskom’s preparation of the selected sustainability information. A reasonable assurance engagement also includes:

Assessing the suitability in the circumstances of Eskom’s use of the criteria, as the basis for preparing the selected sustainability information;
Evaluating the appropriateness of quantification methods and reporting policies used, and the reasonableness of estimates made by Eskom; and
Evaluating the overall presentation of the selected sustainability information and whether the information presented in the report is consistent with our findings, overall knowledge and experience of sustainability management and performance at Eskom.
Our work included the following evidence-gathering procedures:
Interviewing management and senior executives to evaluate the application of the GRI G3 guidelines and to obtain an understanding of the control environment relative to the reported sustainability information.
Inspecting documentation to corroborate the statements of management and senior executives in our interviews.
Testing the processes and systems to generate, collate, aggregate, monitor and report the selected sustainability information.
Inspecting supporting documentation and performing analytical procedures.
Performing site work at the nuclear power station (Koeberg), coal power stations (Majuba, Grootvlei, Lethabo, Kriel, Matla, Hendrina and Kendal), Transmission divisions (Central and Northern), the Distribution divisions (Limpopo, Western Cape and KwaZulu-Natal), Roshcon and Rotek.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, the selected sustainability information for the year ended 31 March 2014 is prepared, in all material respects, in accordance with the GRI G3 guidelines.

Other matters

The report includes the provision of reasonable assurance on the following indicators. We were previously not required to provide assurance on these key performance indicators.

Planned capability loss factor (PCLF)
Black-owned expenditure (company and group – attributable spend and percentage)
Black youth-owned expenditure (company and group – attributable spend and percentage)
Racial equity in senior management (group – percentage of black employees)
Gender equity in senior management (group – percentage of female employees)
Racial equity in professional and middle management (company and group – percentage of black employees)
Gender equity in professional and middle management (company and group – percentage of female employees)
Job creation
Training spend as a percentage of gross employee benefits
Total number of electrification connections
Maintenance backlog reduction based on Eskom technical governance committee approval
Generation new build capacity milestone
Capital expenditure (excluding capitalised borrowing costs)
Free funds from operations (company and group – percentage)

Our report does not extend to any disclosures or assertions relating to future performance plans and/or strategies disclosed in the report.

The maintenance and integrity of Eskom’s website is the responsibility of Eskom’s management. Our procedures did not involve consideration of these matters and, accordingly we accept no responsibility for any changes to either the information in the report or our independent assurance report that may have occurred since the initial date of presentation on the Eskom website.

Restriction of liability

Our work has been undertaken to enable us to express an opinion on the selected sustainability information to the directors of Eskom in accordance with the terms of our engagement, and for no other purpose. We do not accept or assume liability to any party other than Eskom, for our work, for this report, or for the opinion we have reached.

KPMG Services Proprietary Limited

Per PD Naidoo
Director
HG Motau
Director
Johannesburg
29 May 2014
Johannesburg
29 May 2014