Public Enterprises Minister Pravin Gordhan
Eskom will not finalise its annual financial statements by the statutory deadline of 30 September due to "significant key matters" that will take some time to close out with auditors, Public Enterprises Minister Pravin Gordhan has told the Speaker of Parliament.
Two other entities reporting to Gordhan – Denel and Alexkor – will also miss the deadline to finalise and submit their annual financial statements.
In a letter to the Speaker published in Parliament's Announcements, Tablings and Committee Reports (ATC) on Wednesday, Gordhan says he cannot comply with the Public Finance Management Act's requirement that annual financial statements and reports are tabled within six months of the end of the financial year.
In the case of Eskom, Gordhan says he expects the annual report to be finalised by the end of October or the beginning of November. Gordhan writes that as the previous year's audit ended late and Eskom had to change auditors, the audit for 2022 started late.
There are also "outstanding material issues" that are delaying the audit. These include the confirmation of litigation that Eskom is involved in, PFMA compliance and "generation outstanding matters."
Eskom has been unable to service its debt for several years and is dependent on bailouts from the Treasury to remain a going concern. The company is hoping that a solution to transfer some of its debt to the national government will be announced at the October medium-term budget policy statement.
In the case of State-owned arms manufacturer Denel, Gordhan says that a funding application has been made to the Treasury, "which is yet to be deliberated by Cabinet with a definitive outcome". Denel has struggled to pay employees in full for more than two years and finally settled outstanding salaries in August. However, it does not have sufficient working capital to pursue orders or projected revenue to remain a going concern.
The board of state-owned diamond miner Alexkor has completed the annual financial statements, but due to a delay in the appointment of external auditors, the audit has not been completed, he says.
The request for more time for the three companies will not be the first. All state-owned companies must comply with the 30 September deadline or request an extension, but few have done so with the deadline only two days away.