HOME INTEGRATED REPORT ANNUAL FINANCIAL STATEMENTS SUPPLEMENTARY AND DIVISIONAL REPORT CORPORATE SOCIAL INVESTMENT ESKOM FACTOR INTERIM RESULTS
 

INTEGRATED RESULTS PRESENTATION
KING III APPLICATION
 
   



Eskom Finance Company SOC Limited group

Eskom established the Eskom Finance Company (EFC) in 1990 primarily to enable its employees to have access to home loan finance whilst optimising home ownership costs to both Eskom and its employees. The company is mandated to:

Finance employee home loans at competitive rates
Educate its employees on responsible home ownership and financing
Administer interest rate and rental subsidies on behalf of Eskom
Assist Eskom to develop and implement its housing policy

Operating highlights

Successful refinancing of R597 million securitised debt. Bids of R1.69 billion were received, representing 2.83 times the subscription rate
Lower than expected funding rates resulted in an improved financing margin

Operating challenges

In order to comply with the funding limits set by the ultimate shareholder, the company placed restrictions on granting certain loans. This resulted in the loan growth falling short of the target
There is uncertainty about the future of the company in light of the shareholder’s expectation that Eskom should continue to dispose of EFC in line with the previous Cabinet decision
Controlling reputational and financial risks in light of the liquidity challenges

Future focus areas

Finding and implementing an appropriate disposal solution that will mitigate the impact of the disposal to EFC stakeholders
Managing the liquidity challenges whilst continuing to administer Eskom’s commitment to the employees’ conditions of service

EFC’s shareholder’s compact with Eskom

Indicator and unit Target
2013/14
  Actual
2013/14
  Actual
2012/13
  Actual
2011/12
 
Maximise shareholder value: Optimise home ownership cost to Eskom and its employees in the form of economic value added (EVA), R million 245.0   256.8   199.0   166.2  
Achieve company operational efficiency: Cost-to-income ratio, % 33.2   30.3   32.3   38.1  
Profitability: Finance margin, % 3.00   3.03   3.02   n/a  
Arrears management: Loan loss ratio, % 0.09   0.09   0.08   n/a  
Liquidity management: Treasury debt balance, R billion 7.4   6.5   6.1   n/a  
Maintain discipline: No repeat or overdue audit findings, only housekeeping items on rating scale of 1 to 5 3.0   4.2   3.0   n/a  
Maintain good customer satisfaction: Customer satisfaction rating, % 97.0   97.3   97.3   97.2  
Maintain good macro customer relationship: Macro customer rating on scale of 1 to 5 3.0   4.0   4.3   4.3  
Work allocated to B-BBEE attorneys, % 90.0   99.8   95.0   91.7  
Controllable expenses to B-BBEE suppliers, % 65.0   76.68   82.9   78.0