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Notice of anticipated publication date of audited annual financial statements and restatement of prior years results
Eskom Holdings SOC Limited
(“Eskom” and, together with its subsidiaries, the “Group”)
(Registration No. 2002/015527/30)
JSE alpha code: BIESKM
NOTICE OF ANTICIPATED PUBLICATION DATE OF AUDITED ANNUAL FINANCIAL STATEMENTS AND
RESTATEMENT OF PRIOR YEARS RESULTS
Further to the announcement released on 29 September 2022, Eskom hereby notifies its debt investors that:
a) Eskom’s expectation is that the Group’s audited Annual Financial Statements for the year ended 31
March 2022 (“2022 AFS”) will be published no later than 31 December 2022; and
b) as previously reported, the financial statements for the prior year ended 31 March 2021 (“FY2021” or
“prior period”) are expected to be restated.
As Eskom has previously reported, the delays in publishing the Group’s 2022 AFS are a consequence of several
factors:
• starting with the delay in the appointment of the new external auditor,
• the new auditors’ extensive process of evaluating the prior period areas of significant judgement and
estimates,
• the need for management to appoint external experts to address complex areas such as derivatives; and
• resolving the numerous findings and control deficiencies emanating from the lack of compliance with
well-documented policies and procedures in areas such as consumables management, contract
management, and general financial record-keeping and reporting controls.
Notwithstanding the above, substantial progress has been made in finalising all outstanding matters, and
Eskom’s management remains firmly committed to publishing the Group’s 2022 AFS no later than 31 December
2022.
Regarding the potential restatements to the FY2021 financial statements, the table below reflects the major
changes for the Eskom Group. This has primarily affected the working capital ratio significantly, from 1.27
reported in the prior period to 0.95 after the restatements and significant losses due to hedge effectiveness
conclusions that were required to be accounted for in profit or loss and not through other comprehensive
income:
Previously
Note reported Adjustments Restated
Rm Rm Rm
Statement of financial position at 31 March
2021
Assets
Non-current 693 355 13 417 706 772
Property, plant and equipment 1 662 569 (875) 661 694
Inventories 2 0 11 001 11 001
Derivatives held for risk management 3 9 968 1 217 11 185
Trade and other receivables 4 0 1 694 1 694
Other 20 818 380 21 198
Current 65 448 (17 086) 48 362
Inventories 2 37 527 (15 046) 22 481
Derivatives held for risk management 3 1 411 (53) 1 358
Trade and other receivables 4 24 413 (1 697) 22 716
Other 2 097 (290) 1 807
Total assets 758 803 (3 669) 755 134
Equity
Capital and reserves 215 836 (800) 215 036
Liabilities
Non-current 54 059 (1 612) 52 447
Derivatives held for risk management 3 3 562 174 3 736
Provisions 5 50 150 (2 815) 47 335
Other 347 1 029 1 376
Current 48 317 (1 257) 47 060
Derivatives held for risk management 3 4 808 (270) 4 538
Provisions 5 6 395 (1 088) 5 307
Other 37 114 101 37 215
Total equity and liabilities 318 212 (3 669) 314 543
Previously
Notes Adjustments Restated
reported
Rm Rm Rm
Income statements for the year ended 31
March 2021
Primary energy 2&5 (115 903) 411 (115 492)
Impairment of financial assets 119 (28) 91
Impairment and writedown of other assets (1 486) (400) (1 886)
Other expenses (24 018) (189) (24 207)
Depreciation and amortisation expense 1 (27 016) 431 (26 585)
Net fair value and foreign exchange gain/(loss) 3 883 (8 932) (8 049)
Finance cost (33 909) 367 (33 542)
Loss before tax (24 758) (8 340) (33 098)
Income tax 5 824 1 989 7 813
Loss for the year (18 934) (6 351) (25 285)
Statement of comprehensive income for the year ended 31
March 2021
Previously
Notes Adjustments Restated
reported
Rm Rm Rm
Loss for the year (18 934) (6 351) (25 285)
Items that may be reclassified subsequently to profit or
loss (6 658) 6 094 (564)
Cash flow hedges
Changes in fair value 3 (9 249) 8 371 (878)
Amortisation of effective portion of terminated cash
flow hedges (276) 276 0
Ineffective portion of cash flow hedges 661 (183) 478
Net amount transferred to initial carrying amount of
hedged items (400) - (400)
Foreign currency translation differences on foreign
operations 12 - 12
Income tax thereon 2 594 (2 370) 224
Items that may not be reclassified subsequently to profit or
loss (640) - (640)
Total comprehensive loss for the year (26 232) (257) (26 489)
Notes:
1. Property plant and equipment
Various adjustments were made to property, plant and equipment which include:
• incorrect useful lives had been used;
• extension of assets’ useful lives not accounted for;
• completed assets under construction not timeously transferred to commercial
operation; and
• write off of aged assets under construction where there are no further expected future
economic benefits.
The adjustments also included the effect of certain of the rehabilitation provision adjustments
(refer note 5).
2. Inventory
A portion of coal inventory held at power stations was reclassified from current to non-current
assets with a related increase in primary energy cost following a review of the quantity and usage
of coal at power stations. It was concluded that a portion of the coal inventory, specifically for
those purchases under “take or pay” contracts, is not expected to be used within the normal
operating cycles. The weighted average price relating to separate stockpiles in excess of required
levels in terms of “take or pay” contracts were separately calculated resulting in a correction of
the coal inventory.
Consumable inventory reduced due to an insufficient provision for obsolescence in prior
periods. There was a further decrease in consumable inventory as certain critical spares were
reclassified to property plant and equipment.
3. Derivatives held for risk management
The fair values of derivatives held for risk management were restated to correct the curve
methodology applied in determining the fair values of the financial instruments, which were
not aligned to market practice.
The cash flow hedge reserve was further restated because of the incorrect application of
certain requirements of IFRS. The correction of these errors resulted in certain hedge
relationships, that were historically considered as effective, no longer meeting the hedge
effectiveness requirements of IFRS, resulting in the immediate unwinding of the cashflow
hedge reserve.
4. Non-current reclassification of trade receivable
A review of payment trends of defaulting municipalities accounted for on a cash basis
indicated that certain trade receivables were not expected to be realised within 12 months
after the reporting period.
5. Provisions
The discount rate used in the valuation of power station-related environmental restoration
and mine-related closure, pollution control and rehabilitation provisions, was corrected to
align to discount rates used in the valuation with the expected timing of the associated cash
flows.
The nuclear plant decommissioning and spent fuel provisions were restated to reflect
assumptions aligned to market information at reporting date. A further overstatement
resulted from the inclusion of a portion of the spent fuel management cost in both the spent
fuel and plant decommissioning.
A coal off-take provision was restated to correct an overprovision, as management incorrectly
determined the contractual termination date of a coal supply agreement.
The financial information in this announcement has not been reviewed nor reported on by the external auditors
and is subject to change as the audit is still in progress.
Johannesburg
22 November 2022
Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 22-11-2022 12:00:00
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