Somehow SAA has managed to fail to produce its annual report on time – six months after its year-end. Its claiming it needs to address its “immediate financial challenges” before auditors can complete the financial statements.

As a result, Public Enterprises Minister, Malusi Gigaba, was forced to ask Parliament for a postponement of the tabling of the airline’s annual report, and its annual AGM was postponed to an unspecified date.

The airline’s financial year-end is March 31 and, in terms of the Public Finance Management Act, it is required to publish these statements within six months of that date.

But no. Not the beleaguered state-vested airline.

In a letter to the speaker of Parliament yesterday, Mr Gigaba said:

I postponed the AGM, as SAA has not been able to finalise the 2012 annual report in order to meet legislative requirements. To this end, my department is in discussions with the National Treasury to find a resolution to the financial challenges of the airline.

The annual general meeting was supposed to be held on Tuesday.

The Department of Public Enterprises wants the Treasury to inject up to R6 billion into SAA, and to avert questions about its “going concern” status. But if it got a cash injection now, it would only reflect on next year’s financials.

Further to this – surely doubts about its ability to even service current debt will be on the thoughts of most people. Then there’s the liability it may take on when buying the 20 A320 aircraft it plans to acquire over the next five years.

Lenders will not be happy.

It must also be noted that, less than a month ago, Mr Gigaba dismissed the board of South African Express, after the regional carrier was unable to present financial statements for the 2010-11 financial year at its AGM.

This saga also needs to unfold properly and all the department can really say is that any executive who contributed to the accounting chaos at the company would be held accountable.

At least the Treasury is taking its time before deciding to hand out money.

[source: businessday]