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Notes to the consolidated financial statements 1. General information 2. Summary of significant accounting policies 3. Financial risk management 4. Critical account estimates and judgments 5. Segment information 6. Property, plant and equipment 7. Intangible assets 8. Investment in associates 9. Investment in joint ventures 10. Investment in subsidiaries 11. Future fuel supplies 12. Loans receivable 13. Deferred income tax 14. Financial instruments 15. Trade and other receivables 16. Inventories 17. Share capital 18. Assets and liabilities classified as held-for-sale 19. Deferred income 20. Retirement benefit obligations 21. Provisions 22. Trade and other payables 23. Revenue 24. Other net gains 25. Work performed by the entity and capitalised 26. Employee benefit expense 27. Depreciation and amortisation expense 28. Net impairment loss reversed/(impairment loss) 29. Other expenses 30. Interest expense 31. Other operations 32. Cash generated from operations 33. Guarantees and contingent liabilities 34. Commitments 35. Business combinations 36. Related party transactions 37. Events after the balance sheet date 38. Share-based payments 39. Restatement of comparatives

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Notes to the financial statements

For the 12-month period ended 31 March 2006

6.	PROPERTY, PLANT AND EQUIPMENT
	Group         Company         Cost     Accumu-      Carrying     Cost     Accumu-      Carrying            lated     value        lated     value            depre-             depre-                 ciation             ciation             Rm    Rm     Rm    Rm    Rm     Rm  March 2006                           Land     295    –     295    258    –     258  Buildings and facilities     2 926    (1 228)    1 698    2 761    (1 193)    1 568  Plant – Generation     51 265    (24 879)    26 386    51 265    (24 879)    26 386    – Transmission     11 993    (4 791)    7 202    11 993    (4 791)    7 202    – Distribution     32 373    (12 708)    19 665    32 373    (12 708)    19 665          Regular distribution     21 239    (7 402)    13 837    21 239    (7 402)    13 837          Electrification     11 134    (5 306)    5 828    11 134    (5 306)    5 828    – Test, telecommunication                                and other plant     2 604    (1 573)    1 031    447    (277)    170  Equipment and vehicles     5 382    (3 261)    2 121    4 245    (2 495)    1 750  Total in commission     106 838    (48 440)    58 398    103 342    (46 343)    56 999  Plant at mothballed power stations     446    (446)    –    446    (446)    –  Works under construction     6 440    –     6 440    6 513    –     6 513  Construction materials     195    –     195    195    –     195        113 919    (48 886)    65 033    110 496    (46 789)    63 707                              March 2005                           Land     301    –     301    265    –     265  Buildings and facilities     2 829    (1 208)    1 621    2 696    (1 179)    1 517  Plant – Generation     48 308    (22 914)    25 394    48 308    (22 914)    25 394    – Transmission     10 733    (4 380)    6 353    10 733    (4 380)    6 353    – Distribution     29 334    (11 355)    17 979    29 334    (11 355)    17 979          Regular distribution     18 832    (6 618)    12 214    18 832    (6 618)    12 214          Electrification     10 502    (4 737)    5 765    10 502    (4 737)    5 765    – Test, telecommunication                                and other plant     2 501    (1 463)    1 038    448    (262)    186  Equipment and vehicles     4 102    (2 386)    1 716    3 664    (2 133)    1 531  Total in commission     98 108    (43 706)    54 402    95 448    (42 223)    53 225  Plant at mothballed power stations     586    (556)    30    586    (556)    30  Works under construction     4 569    –     4 569    4 511    –     4 511  Construction materials     186    –     186    186    –     186        103 449    (44 262)    59 187    100 731    (42 779)    57 952                              Reconciliation of Carrying   Additions    Disposals     Impair-    Reversal    Depre-     Carrying  movements value   and        ment    of impair-    ciation     value end    beginning   transfers        losses    ment        of period    of period               losses            Rm   Rm    Rm     Rm     Rm    Rm     Rm  PROPERTY, PLANT                           AND EQUIPMENT                           March 2006                           Group                           Land 301   4    (10)    –    –    –     295  Buildings and facilities 1 621   138    (16)    –    12    (57)    1 698  Plant 50 764   7 469    (82)    (8)   30    (3 889)    54 284  Equipment and vehicles 1 716   1 072    (58)    –    –    (609)    2 121  Plant at mothballed                           power stations 30   11    (43)    –    –    2     –  Works under                           construction 4 569   1 886    (15)    –    –    –     6 440  Construction materials 186   9    –     –    –    –     195    59 187   10 589    (224)    (8)   42    (4 553)     65 033  Company                           Land 265   3    (10)    –    –    –     258  Buildings and facilities 1 517   108    (16)    –    12    (53)    1 568  Plant 49 912   7 303    (63)    (8)   3    (3 724)    53 423  Equipment and vehicles 1 531   800    (78)    –    –    (503)    1 750  Plant at mothballed                           power stations 30   11    (43)    –    –    2     –  Works under                           construction 4 511   2 002    –     –    –    –     6 513  Construction materials 186   9    –     –    –    –     195    57 952   10 236    (210)    (8)   15    (4 278)    63 707
	Group Company     March  March  March  March      2006  2005  2006  2005      Rm  Rm  Rm  Rm  Borrowing costs are capitalised at a weighted average rate of 14,00% (2005: 13,67%).                       Details of land and buildings are available for examination at the registered offices of the respective businesses.                       Included in generation plant are assets leased to an international party and leased back under cross-border lease agreements with a book value of   3 546  3 649  3 546  3 649              The cross-border lease transactions comprise primary lease terms of 17,8 and 21 years as well as renewal lease terms of 14,8 and 12 years respectively.The renewal leases will be at specified rentals on terms similar to the primary leases. Options at the end of the primary lease terms are either to purchase the rights of the lessor over the assets at a predetermined fixed price or to return the assets to the lessor at no cost but on condition that the lessor may require that the renewal lease be exercised. At the end of the renewal leases the assets will return to Eskom.                       The present value of lease and leaseback obligations was settled in full at commencement of the transactions.                       Lease rentals relating to the lease of property, plant and equipment included in other expenses in the income statement amounted to   99  69  79  44              Depreciation of property, plant and equipment included in depreciation and amortisation expense in the income statement amounted to   4 553  5 096  4 278  4 828

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