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INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



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:
keep the lights on
put customer at the centre
deliver capital expansion
ensure financial sustainability
build strong skills (total pipeline or new enrolments)
maximising socio-economic contribution

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:

National Treasury consolidation template

KPMG Inc
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Per HG Motau
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  Per JE Strauss
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29 May 2014   29 May 2014
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