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<ul><li><p>Reviewed condensed group interim financial statements</p><p>for the six months ended 30 September 2016</p></li><li><p>Reviewed condensed group interim financial statements 1</p><p>Contents</p><p>Currency of financial statements 1Approval of the condensed group interim financial statements 2Independent auditors' review report on the condensed group interim financial statements to the Minister of Public Enterprises 3Condensed group statement of financial position 4Condensed group income statement 5Condensed group statement of comprehensive income 5Condensed group statement of changes in equity 6Condensed group statement of cash flows 7Selected notes to the condensed group interim financial statements: Note 1 General information 82 Basis of preparation 83 Significant accounting policies 84 Critical accounting estimates and judgements 95 Segment information 106 Issuances, repurchases and repayments of debt securities and borrowings and share capital 107 Dividend paid 108 Significant events and transactions 119 Seasonality of interim results 1110 Revenue 1111 Primary energy 1112 Employee benefit expense 1113 Finance cost 1114 Income tax 1115 Fair value classification and measurement 1216 Material events subsequent to 30 September 2016 1817 Restatement of comparatives 19</p><p>The reviewed condensed group interim financial statements for the six months ended 30 September 2016 have been prepared under the supervision of the chief financial officer, A Singh CA(SA). These condensed group interim financial statements have been independently reviewed by the group's external auditors and were published on 3 November 2016.</p><p>Currency of financial statements</p><p>The reviewed condensed group interim financial statements are expressed in South African rand (R).</p><p>The following are approximate values of the rand to one unit of the selected currencies:</p><p>Average Reporting date mid-spot rate</p><p>30 September2016</p><p>31 March2016</p><p>30 September2015</p><p>30 September2016</p><p>31 March2016</p><p>30 September2015</p><p>Euro 16.32 15.21 13.93 15.46 16.77 15.52United States dollar (USD) 14.53 13.79 12.55 13.79 14.71 13.87Pound sterling (United Kingdom) 19.99 20.74 19.36 17.91 21.13 21.05Swiss franc 14.93 14.15 13.17 14.21 15.35 14.23Japanese yen 0.14 0.12 0.10 0.14 0.13 0.12</p></li><li><p>Eskom Holdings SOC Ltd2</p><p>Approval of the condensed group interim financial statements</p><p>Basis of preparationThe condensed group interim financial statements from page 4 to page 19 for the six months ended 30 September 2016 have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS), the presentation and disclosure requirements of International Accounting Standards (IAS) 34 Interim Financial Reporting, and in the manner required by the Companies Act.</p><p>Going concern The board of directors (the board) has made an assessment of the ability of the group to continue as a going concern in the foreseeable future.</p><p>The board reviewed the performance for the period ended 30 September 2016 and the cash flow forecast for the 12 months ending 30September 2017.</p><p>The board continues to critically examine the group's activities and costs in order to balance its cash flow requirements. There is continued focus on the Design-to-Cost (DTC) initiative to identify cost saving and efficiency opportunities.</p><p>The board is pursuing funding options to implement the group's borrowing programme. In assessing the ability to raise funds, the current economic climate as well as Eskom's and the sovereign's credit ratings have been taken into account.</p><p>Based on the above, the board is satisfied that Eskom and the group have access to adequate resources and facilities to be able to continue its operations for the foreseeable future. Accordingly the board has continued to adopt the going-concern basis in preparing the financial statements.</p><p>ApprovalIn the opinion of the board, based on the information available to date, the condensed group interim financial statements fairly present the financial position of the group at 30 September 2016 and the results of the operations and cash flow information for the six months then ended. The condensed group interim financial statements have been approved by the board and signed on its behalf by:</p><p> B Ngubane B Molefe A SinghChairman Group chief executive Chief financial officer</p><p>27 October 2016 27 October 2016 27 October 2016</p></li><li><p>Reviewed condensed group interim financial statements 3</p><p>Independent auditors' review report on the condensed group interim financial statements to the Minister of Public Enterprises</p><p>IntroductionWe have reviewed the accompanying condensed group interim financial statements of Eskom Holdings SOC Ltd set out on pages 4 to 19, which comprise the condensed group statement of financial position at 30 September 2016, and the condensed group income statement, statements of comprehensive income, changes in equity and cash flows for the six months then ended and selected explanatory notes.</p><p>The board's responsibility for the financial statementsThe board is responsible for the preparation and presentation of these condensed group interim financial statements in accordance with the recognition and measurement requirements of IFRS, the presentation and disclosure requirements of IAS 34 Interim Financial Reporting, the requirements of the Companies Act and for such internal control as the directors determine is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether due to fraud or error.</p><p>Auditors' responsibility for the financial statementsOur responsibility is to express a conclusion on these condensed group interim financial statements based on our review.</p><p>Scope of reviewWe conducted our review in accordance with the International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of the condensed group interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters which might be identified in an audit. Accordingly, we do not express an audit opinion.</p><p>ConclusionBased on our review, nothing has come to our attention that causes us to believe that the accompanying condensed group interim financial statements of Eskom for the six months ended 30 September 2016, are not prepared, in all material respects, in accordance with the recognition and measurement requirements of IFRS, the presentation and disclosure requirements of IAS 34 Interim Financial Reporting and the requirements of the Companies Act.</p><p>A MthimunyeSizweNtsalubaGobodo IncDirectorRegistered auditor</p><p>31 October 2016</p><p>20A Morris Street EastWoodmead2191</p></li><li><p>Eskom Holdings SOC Ltd4</p><p>Condensed group statement of financial positionat 30 September 2016</p><p>Reviewed30 September</p><p>2016Rm</p><p>Audited31 March</p><p>2016Rm</p><p>Reviewed1</p><p>30 September2015</p><p>Rm</p><p>AssetsNon-current assets 589 873 565 475 535 912 </p><p>Property, plant and equipment and intangible assets 554 555 521 174 486 730 Future fuel supplies 8 672 10 502 8 940 Payments made in advance 2 250 2 579 3 266 Derivatives held for risk management 21 800 27 600 24 659 Trade, finance lease, loan and other receivables 605 601 9 285 Investment in securities 1 533 2 485 2 527 Other assets 458 534 505 </p><p>Current assets 90 282 86 268 75 820 </p><p>Inventories 20 540 17 821 17 329 Taxation 93 152 Investment in securities and financial trading assets 15 387 11 585 14 246 Payments made in advance 2 738 3 891 3 342 Derivatives held for risk management 427 2 582 4 705 Trade, finance lease, loan and other receivables 20 879 21 842 23 200 Cash and cash equivalents 30 311 28 454 12 846 </p><p>Non-current assets held-for-sale 8 925 8 942 </p><p>Total assets 689 080 660 685 611 732 </p><p>EquityCapital and reserves 186 581 180 563 171 117 </p><p>LiabilitiesNon-current liabilities 426 776 404 343 370 862 </p><p>Debt securities and borrowings 317 267 306 970 281 616 Embedded derivatives 5 186 5 410 5 590 Derivatives held for risk management 4 544 2 862 840 Deferred tax 23 138 21 000 22 375 Deferred income and payments received in advance 18 660 18 142 16 727 Employee benefit obligations 13 664 12 405 12 277 Provisions 33 381 32 841 30 194 Trade, finance lease and other payables 10 936 4 713 1 243 </p><p>Current liabilities 74 037 73 971 69 753 </p><p>Debt securities and borrowings 15 653 15 688 15 833 Embedded derivatives 1 708 1 615 1 499 Derivatives held for risk management 4 660 2 011 515 Employee benefit obligations 5 607 5 190 4 126 Provisions 8 404 11 415 10 356 Deferred income and payments received in advance 5 838 4 333 4 942 Trade, finance lease and other payables 31 082 32 409 30 820 Taxation 60 Financial trading liabilities 1 085 1 250 1 662 </p><p>Non-current liabilities held-for-sale 1 686 1 808 </p><p>Total liabilities 502 499 480 122 440 615 </p><p>Total equity and liabilities 689 080 660 685 611 732 </p><p>1. Restated. Refer to note 17.</p></li><li><p>Reviewed condensed group interim financial statements 5</p><p>Condensed group income statementfor the six months ended 30 September 2016</p><p>Condensed group statement of comprehensive incomefor the six months ended 30 September 2016</p><p>Reviewedsix months</p><p> ended30 September</p><p>2016</p><p>Reviewed1</p><p>six months ended</p><p>30 September2015</p><p>Auditedyear</p><p>ended31 March</p><p>2016Note Rm Rm Rm</p><p>Revenue 10 97 131 87 876 163 395 Other income 752 1 369 2 390 Primary energy 11 (40 380) (40 999) (84 728)Employee benefit expense 12 (15 758) (13 806) (29 257)Net impairment loss (615) (122) (1 170)Other expenses (9 635) (8 723) (18 663)</p><p>Profit before depreciation and amortisation expense and net fair value (loss)/gain (EBITDA) 31 495 25 595 31 967 Depreciation and amortisation expense (9 998) (7 609) (16 531)Net fair value (loss)/gain on financial instruments (1 875) 3 (455)</p><p>Profit before net finance cost 19 622 17 989 14 981 Net finance cost (6 535) (3 498) (7 919)</p><p>Finance income 2 766 1 542 3 447 Finance cost 13 (9 301) (5 040) (11 366)</p><p>Share of profit of equity-accounted investees, net of tax 18 28 43 </p><p>Profit before tax 13 105 14 519 7 105 Income tax 14 (3 749) (4 172) (2 488)</p><p>Profit for the period2 9 356 10 347 4 617 </p><p>Reviewedsix months</p><p> ended30 September</p><p>2016</p><p>Reviewedsix months </p><p>ended30 September</p><p>2015</p><p>Auditedyear</p><p>ended31 March</p><p>2016Rm Rm Rm</p><p>Profit for the period2 9 356 10 347 4 617 Other comprehensive (loss)/income (3 338) 4 332 6 508 </p><p>Items that may be reclassified subsequently to profit or loss (3 039) 4 076 5 903 </p><p>Available-for-sale financial assets 56 (15) (57)Cash flow hedges (4 262) 5 683 8 226 Foreign currency translation differences on foreign operations (10) (5) 21 Income tax thereon 1 177 (1 587) (2 287)</p><p>Items that may not be reclassified subsequently to profit or loss (299) 256 605 </p><p>Re-measurement of post-employment medical benefits (415) 351 840 </p><p>Income tax thereon 116 (95) (235)</p><p>Total comprehensive income for the period2 6 018 14 679 11 125 </p><p>1. Restated. Refer to note 17.2. A nominal amount is attributable to the non-controlling interest in the group. The remainder is attributable to the owner of the group.</p></li><li><p>Eskom Holdings SOC Ltd6</p><p>Condensed group statement of changes in equityfor the six months ended 30 September 2016</p><p>Share capital</p><p>Equity reserve</p><p>Cash flow hedge </p><p>reserve</p><p>Available-for-sale</p><p> reserve</p><p>Unrealised fair value </p><p>reserve</p><p>Foreign currency</p><p> translation reserve</p><p>Accumulatedprofit</p><p>Total</p><p>Rm Rm Rm Rm Rm Rm Rm Rm</p><p>Balance at 31 March 2015 30 520 5 699 4 (8 854) 18 89 777 117 164 Restated profit for the period 10 347 10 347 Other comprehensive income/(loss), net of tax 4 092 (11) (5) 256 4 332 Share capital issued 10 000 10 000 Conversion of subordinated loan from the shareholder to share capital 60 000 (30 520) (206) 29 274 Transfer between reserves (816) 816 </p><p>Balance at 30 September 2015 70 000 9 791 (7) (9 670) 13 100 990 171 117 Loss for the period (5 730) (5 730)Other comprehensive income/(loss), net of tax 1 831 (30) 26 349 2 176 Share capital issued 13 000 13 000 Transfer between reserves (7 042) 7 042 </p><p>Balance at 31 March 2016 83 000 11 622 (37) (16 712) 39 102 651 180 563 Profit for the period 9 356 9 356 Other comprehensive (loss)/income, net of tax (3 069) 40 (10) (299) (3 338)Transfer between reserves 801 (801) </p><p>Balance at 30 September 2016 83 000 8 553 3 (15 911) 29 110 907 186 581 </p></li><li><p>Reviewed condensed group interim financial statements 7</p><p>Condensed group statement of cash flowsfor the six months ended 30 September 2016</p><p>Reviewedsix months</p><p> ended30 September</p><p>2016</p><p>Reviewedsix months </p><p>ended30 September</p><p>2015</p><p>Auditedyear</p><p>ended31 March</p><p>2016Rm Rm Rm</p><p>Cash flows from operating activitiesProfit before tax 13 105 14 519 7 105 Adjustment for non-cash items 21 583 10 873 29 904 Changes in working capital (2 611) (3 488) (2 201)</p><p>Cash generated from operations 32 077 21 904 34 808 Net cash flows (used in)/from derivatives held for risk management (382) 845 643 Interest received 592 457 2 322 Interest paid (17) (4) (11)Income taxes paid (337) (162) (520)</p><p>Net cash from operating activities 31 933 23 040 37 242 </p><p>Cash flows used in investing activitiesProceeds from disposal of property, plant and equipment and intangible assets 86 320 360 Acquisitions of property, plant and equipment and intangible assets (26 000) (24 149) (54 175)Expenditure on future fuel supplies (304) (270) (1 754)Net cash flows used in investment in securities and financial trading assets (22) (2 041) (1 886)Increase in payments made in advance (118) (101) (274)Expenditure incurred on provisions (4 296) (637) (3 054)Net cash flows from/(used in) derivatives held for risk management 780 (158) 771 Interest received 581 455 1 202 Other cash flows from investing activities 31 63 220 </p><p>Net cash used in investing activities (29 262) (26 518) (58 590)</p><p>Cash flows from financing activitiesDebt securities and borrowings raised 21 910 16 519 41 052 Payments made in advance to secure balances raised (626) (155) (555)Debt securities and borrowings repaid (4 248) (5 594) (11 123)Share capital issued 10 000 23 000 Net cash flows (used in)/from derivatives held for risk management (2 502) 377 11 847 Decrease in finance lease payables (21) (54) (157)Increase in investment in securities and financial trading assets and liabilities (2 755) (3 710) (1 621)Interest received 1 473 550 1 275 Interest paid (14 082) (10 503) (22 791)</p><p>Net cash (used in)/from financing activities (851) 7 430 40 927 </p><p>Net increase in cash and cash equivalents 1 820 3 952 19 579 Cash and cash equivalents at beginning of the period 28 454 8 863 8 863 Foreign currency translation (10) (5) 21 Effect of movements in exchange rates on cash held 22 36 75 Non-current assets held-for-sale 25 (84)</p><p>Cash and cash equivalents at end of the period...</p></li></ul>

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