1 INTEGRATED REPORT . 31 March 2019. CONTENTS WHO WE ARE. NAVIGATION ICONS. THE YEAR AT A GLANCE IFC. The following navigation icons are used to link ABOUT THIS REPORT 1 our strategy and resources to material matters, strategic risks, key performance indicators and OUR SUITE OF REPORTS 2. performance: LEADERSHIP AND ETHICS 3 VISION AND MISSION. Our finances Chairman's statement 4 FC. (financial capital) Our vision is to drive economic growth by being a financially Ethics and progress on governance clean-up 8 sustainable provider of energy solutions across Africa King IV TM application 15 MC Our infrastructure (manufactured capital) Our mission is threefold Composition of our top leadership 20. OUR BUSINESS AND STRATEGY 24. NC. Our interaction with the environment (natural capital). What we do and our impact 25. How the macro environment affects us 34 Our people HC. Our strategy and outlook 41 (human capital). Drive economic growth in Stakeholder engagement and material matters 44 South Africa in a profitable SRC Our role in communities manner, through the Risks and opportunities, assurance and controls 49 (social and relationship capital) Turn around the provision of reliable and Create a positive social existing business and efficient energy and energy impact on South Africa by OUR GOVERNANCE 61 ensure Eskom's financial driving shared growth and Our know-how solutions and services Governance framework 62.
2 IC sustainability for our customers, first leveraging our footprint (intellectual capital). in South Africa and then Feedback on Board activities 63 across Africa Exco update 70. Information block Additional information E xecutive remuneration and benefits 72 or case study in the INTEGRATED REPORT Our values underpin our vision and guide how we do business FINANCIAL REVIEW 76. Supplementary Information Chief Financial Officer's REPORT 77 information provided available online in a fact sheet Condensed annual financial statements 81. Financial value added 84 A list of abbreviations and glossary of terms are available on pages 157 to 159 Zero Harm Integrity Our finances 85. OPERATING PERFORMANCE 102. Chief Executive's review 103. Throughout this INTEGRATED REPORT , performance Excellence OUR VALUES Innovation Our infrastructure 108 against target is indicated as follows: Our interaction with the environment 120. Actual performance met or exceeded target Our people 130 Customer Sinobuntu Actual performance almost met target satisfaction (caring).
3 Our role in communities 140. (within a 5% threshold). Our know-how 145. Actual performance did not meet target SUPPLEMENTARY INFORMATION 156. Abbreviations and glossary of terms 157. SC. Indicates that a key performance indicator is included in the shareholder compact Independent sustainability assurance REPORT 160. Our leadership brand pillars Leadership qualifications and directorships 164. Board and Exco meeting attendance 167 Our leadership brand pillars support our vision, mission and values. Legitimate and authentic leadership REQUEST FOR FEEDBACK will not be achieved without leaders individually and collectively internalising, articulating, role modelling Statistical tables: technical and non-technical 168 We want to ensure that our REPORT continues and actively living the leadership brand pillars Environmental implications of using electricity 176. to provide relevant information to stakeholders. We welcome your feedback on ways in which we Plant and customer information 177 could improve our REPORT in future.
4 Please send Heart of Learning Good Disciplined your suggestions to a servant organisation governance execution Contact details 184. THE YEAR AT A GLANCE ABOUT THIS REPORT . This INTEGRATED REPORT reviews our financial, operational, environmental, social and governance performance for the year from 1 April 2018 to 31 March 2019, and follows our 2018 INTEGRATED REPORT . It examines our use of and impact on the six capitals, and our performance in relation to our strategy. Strategy review Reporting boundary and frameworks Assurance approach Chief Executive, culminated in Governance The information in this REPORT refers to the performance of the group, which includes the business of Eskom Our combined assurance model relies on several lines of defence, including supervisory oversight, review by CFO and COO turnaround plan clean-up Holdings SOC Ltd, operating in South Africa, and management, as well as internal and external assurance. its major operating subsidiaries, unless otherwise The Audit and Risk Committee and the Board rely on appointed progressing well stated.
5 For a comprehensive overview of our financial performance, the INTEGRATED REPORT should be read in combined assurance in assessing the adequacy of our risk management and internal controls. conjunction with our full set of consolidated annual financial statements. The results of the internal and external assurance of our suite of reports is set out on page 60. Our consolidated annual financial statements are available at Industrial action Our Assurance and Forensic Department provided reasonable assurance on certain aspects of the REPORT . impacted operations Environmental Material events up to the date of approval have been The sustainability KPIs contained in the shareholder included. Unless otherwise indicated, the information compact were subject to external assurance; eight did and finance performance presented is comparable to that of prior years, with no not receive reasonable assurance. deteriorated significant restatements. The independent sustainability assurance REPORT is included from page 160.
6 Basis of preparation Our INTEGRATED REPORT is based on the principles The consolidated annual financial statements have contained in the International <IR> Framework, been audited by the group's independent auditors, Plant availability dropped Rotational loadshedding published by the International INTEGRATED Reporting SizweNtsalubaGobodo Grant Thornton Inc, who issued a modified opinion relating to the completeness of below 70% implemented on Council (IIRC). The REPORT seeks to provide a balanced and transparent account of how we create value through amounts disclosed in terms of the PFMA. Except for this 30 days our use of and impact on the various capitals. modification, the consolidated annual financial statements are fairly presented in terms of IFRS. Our value creation process is depicted in our business model on pages 28 to 29 Refer to the annual financial statements for the independent audit opinion Total OCGT expenditure of Generation nine-point This is our primary REPORT to stakeholders, and provides Board responsibility and approval information of interest to all stakeholders.
7 As far as billion to minimise recovery programme possible, we aim to address material matters, both The Board is accountable for the integrity and completeness of the INTEGRATED REPORT and any loadshedding introduced positive and negative, by considering qualitative and quantitative matters material to our operations and supplementary information, and is assisted by the Audit and Risk Committee and the Social, Ethics and strategic objectives, which may influence stakeholders'. Sustainability Committee. decision-making. Our strategic risks are considered as part of this process. The Board has applied its collective mind to the preparation and presentation of the INTEGRATED REPORT Net loss after tax of The determination of material matters is set out on pages 46 to 48, while and has concluded that it is presented in accordance our strategic risks are discussed on pages 52 to 54. billion Government with the International <IR> Framework. Considering the completeness of the material items dealt with and Building on issues covered in the 2018 REPORT , we financial support have endeavoured to provide a comprehensive update the reliability of information presented, based on the combined assurance process followed, the Board approved on governance-related concerns; we always strive to Municipal arrear debt announced improve the conciseness of the REPORT .
8 However, there the 2019 INTEGRATED REPORT , annual financial statements and supplementary information on 18 July 2019. were a number of significant issues which had to be rose to billion addressed, which have negatively impacted conciseness. The content is guided by legal and regulatory requirements, such as the Companies Act, 2008 and the Mr Jabu Ms Sindi Prof. Malegapuru King IV REPORT on Corporate Governance for South Mabuza Mabaso-Koyana Makgoba Africa, 2016 (King IV TM), as well as global best practice. Chairman Audit and Risk Social, Ethics and Committee Sustainability Committee ESKOM HOLDINGS SOC LTD | 1. OUR SUITE OF REPORTS LEADERSHIP AND. ETHICS. Our 2019 suite of reports consists of the following: INTEGRATED REPORT and supplementary information As ethical leadership forms the foundation of effective corporate governance, we continue INTEGRATED REPORT . 31 March 2019. The INTEGRATED REPORT is prepared in accordance with the IIRC's International <IR> Framework, and provides an overview of our governance, strategy and performance.
9 The REPORT has been subject to to re-establish a culture of ethical behaviour and ethical leadership at Eskom to address the combined assurance, with verification by our internal audit function and reasonable assurance on some KPIs provided by our external auditors. Supplementary information, which may be of interest to some governance issues we have faced in the recent past. Integrating sustainability with decision- stakeholders, is available in fact sheets at the back of the REPORT . making remains of the utmost importance. ANNUAL FINANCIAL STATEMENTS. 31 March 2019. Annual financial statements The consolidated annual financial statements of Eskom Holdings SOC Ltd have been prepared in accordance with IFRS as well as the requirements of the Companies Act, 2008 and the Public Finance Management Act, 1999, and were audited by our independent auditors, SizweNtsalubaGobodo Grant Thornton Inc. FOUNDATION REPORT . 31 March 2019. Foundation REPORT The Eskom Development Foundation NPC (the Foundation) coordinates and executes our corporate social investment activities which support certain business imperatives.
10 The REPORT details our CSI. activities during the 2018/19 year. ESKOM FACTOR Eskom Factor The Eskom Factor is a collective term explaining our footprint in South Africa, which was quantified through a comprehensive external assessment of our economic, social and environmental impact on the country, both positive and negative, for the period from 2012 to 2018. All documents are available online at Forward-looking statements Certain statements in this REPORT regarding Eskom's business operations may constitute forward-looking statements. These include all statements other than statements of historical fact, including those regarding the financial position, business strategy, management plans and objectives for future operations. Forward-looking statements constitute our current expectations based on reasonable assumptions, data or methods that may be incorrect or imprecise and that may be incapable of being realised and, as such, are not intended to be a guarantee of future results.