The Public Finance Management Act requires the directors to ensure that Eskom Holdings Limited (Eskom) and its subsidiaries (the group) keep full and proper records of their financial affairs. The financial statements should fairly present the state of affairs of Eskom and the group, its financial results, cash flows, its performance against predetermined objectives for the year and its financial position at the end of the year in terms of International Financial Reporting Standards.

To enable the directors to meet the above-mentioned responsibilities, the Eskom board of directors sets standards and management implements systems of internal control. The controls are designed to provide cost-effective assurance that assets are safeguarded, and that liabilities and working capital are efficiently managed. Policies, procedures, structures and approval frameworks provide direction, accountability and division of responsibilities, and contain self-monitoring mechanisms. The controls throughout Eskom focus on those critical risk areas identified by operational risk management and confirmed by executive management. Both management and the internal audit department closely monitor the controls, and actions are taken to correct deficiencies as they are identified.

The financial statements are the responsibility of the directors. The external auditors are responsible for independently auditing the financial statements in accordance with International Standards of Auditing and the Public Audit Act.

The directors have made an assessment of the ability of Eskom and the group to continue as going concerns in the foreseeable future and are satisfied that they have access to adequate resources and facilities to be able to continue its operations. Accordingly the board have continued to adopt the going-concern basis in preparing the financial statements.

The financial statements of Eskom and the group have been prepared in terms of International Financial Reporting Standards, and the Companies Act of South Africa, 61 of 1973, as amended, and the Public Finance Management Act, 1 of 1999, as amended. These financial statements are based on appropriate accounting policies, supported by reasonable and prudent judgements and estimates and are prepared on the going-concern basis.

Based on the information and explanations given by management, the internal audit department and discussions held with the independent external auditors, the directors are of the opinion that the internal accounting controls are adequate to ensure that the financial records may be relied upon for preparing the financial statements, and that accountability for assets and liabilities is maintained.

The audit and risk committee has reviewed the effectiveness of Eskom and the group’s internal controls and considers the systems appropriate for the effective operation of Eskom and the group. The committee has evaluated Eskom and the group’s annual financial statements and has recommended their approval to the board. The audit and risk committee’s approval is set out here.

Nothing significant has come to the attention of the directors to indicate that any material breakdown has occurred in the functioning of these controls, procedures and systems during the year under review.

In the opinion of the directors, based on the information available to date, the financial statements fairly present the financial position of Eskom and the group at 31 March 2011 and the results of its operations and cash flow information for the year then ended.

The financial statements of Eskom and the group for the year ended 31 March 2011 have been approved by the board of directors and signed on its behalf on 31 May 2011 by

  

PM Makwana	BA Dames	PS O’Flaherty
Chairman	Chief executive	Finance director
31 May 2011	31 May 2011	31 May 2011