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Consolidated group annual financial statements  
   
   
   
   
 
Report of the audit committee    
   
 

Report of the audit committee in terms of regulation 27.1 of the Public Finance Management Act, (1 of 1999), as amended

The audit committee reports that it has adopted appropriate formal terms of reference as its audit committee charter, and has regulated its affairs in compliance with this charter, and has discharged all of its responsibilities contained therein.

In the conduct of its duties, the audit committee has, inter alia, reviewed the following:
  • the effectiveness of the internal control systems
  • the risk areas of the entity’s operations covered in the scope of internal and external audits
  • the adequacy, reliability and accuracy of financial information provided by management and other users of such information
  • accounting and auditing concerns identified as a result of internal and external audits
  • the entity’s compliance with legal and regulatory provisions
  • the effectiveness of the corporate audit department
  • the activities of the corporate audit department, including its annual work programme, co-ordination with the external auditors, the reports of significant investigations and the responses of management to specific recommendations
  • the independence of and objectivity of the external auditors

The audit committee is of the opinion, based on the information and explanations given by management and the corporate audit department and discussions with the independent external auditors on the result of their audits, that the internal accounting controls are adequate to ensure that the financial records may be relied upon for preparing the financial statements, and accountability for assets and liabilities is maintained. Having considered the matters set out in section 270A(5) of the Companies Act as amended by the Company Law Amendment Act, the audit committee is satisfied with the independence and objectivity of the external auditors.

The audit committee notes the possible impact on the internal control environment of the following:
  • tight operating during a period of reduced reserve margin
  • immense pressure to execute the new build programme
  • management of electricity challenges
  • adverse stakeholder perceptions

This has increased the challenges and risks for the internal control environment. This is an area that is receiving attention and monitoring on an ongoing basis.

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

The audit committee has evaluated the financial statements of Eskom Holdings Limited and the group for the year ended 31 March 2008 and, based on the information provided to the audit committee, considers that they comply, in all material respects, with the requirements of the Companies Act, (61 of 1973), as amended, and the Public Finance Management Act, (1 of 1999), as amended, and International Financial Reporting Standards. The audit committee concurs with the board of directors and management that the adoption of the going-concern premise in the preparation of the financial statements is appropriate. The audit committee has therefore, at their meeting held on 25 June 2008, recommended the adoption of the financial statements by the board of directors.

JRD Modise

JRD Modise
Chairman
25 June 2008

   
 
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