Cape Town - PUBLIC Enterprises Minister Pravin Gordhan has informed Parliament that the South African Airways (SAA) and the South African Express Airways (SA Express) will not be submitting their annual reports this year.
Gordhan revealed this in a letter addressed to National Assembly Speaker Nosiviwe Mapisa-Nqakula, and National Council of Provinces (NCOP) chairperson Amos Masondo.
In his letter, the minister said he was required to table the annual reports, annual financial statements, and audit reports of the public entities, in Parliament, within six months after the end of the financial year.
Gordhan also said the Public Finance Management Act required the entity’s boards to submit the documents to him five months after the end of the financial year.
“SAA and SA Express will not be able to finalise and submit the annual report to me within the prescribed time-lines,” he said.
Gordhan explained that regarding SAA, the company was placed in a business rescue after it achieved solvency and liquidity status.
“Various accounting entries that relate to business had to be considered and processed, after the business rescue practitioners had exited the business.
“The audit will be finalised once the airline fully recommences operations, and the annual report and annual financial statements will thereafter be tabled,” he said.
Gordhan also said SA Express was placed under provisional liquidation and the liquidator was in the process of finding a buyer for the airline.
“The airline will therefore not prepare the 2020/21 annual report and annual financial statements as the contracts of employees who would have prepared the reports were suspended prior to the year end audit,” he said.
Meanwhile, the minister asked Parliament to grant extension for the submission of annual reports by three other entities - Transnet, Alexkor and Denel.
Gordhan said that the three entities would not be able to finalise and submit their respective annual reports to him by September 30.
Explaining the situation at Transnet, Gordhan said there were delays in finalisation of their financial statements, due to a significant difference of opinion in the accounting treatment of the 10646 locomotive contracts, by Transnet and the Auditor General of South Africa (AGSA).
“The differing views will result in a significant impact on the annual financial statement and would result in significant restatement of prior years’ annual financial statements, should the AGSA be correct in their interpretation, as well as significant reputational damage on many parties, but especially Transnet due to debt listing requirements by various stock exchanges,” said Gordhan
He said the matter was still under discussion between the parties, but Transnet still intended holding its annual general meeting this month.
Gordhan said Alexkor has requested a concession for the late submission and requested approval for their annual general meeting to be held on October 14, before tabling their annual report.
The minister also said Denel was experiencing serious liquidity challenges and was in the process of exploring various options for the future of the company.
“Consequently, they are not able to prepare and submit the 2020/21 annual report and annual financial statements,” said Gordhan.