RAND WATER ANNUAL REPORT 2023

Consolidated Annual Financial Statements for the year ended 30 June 2023

Board Report 13. Corporate business plan and shareholders compact (Continued) 13.2. Performance information explanations h. Debtors days COVID‑19 continues to impact municipal revenues and their ability to pay for services. Increase in debtor days is mainly caused by customers who did not honour their overdue accounts resulting in the set target not met. i. Repairs and maintenance as a percentage of budget The set target was achieved. Critical work has been accelerated, which had been halted during the various COVID‑19 lockdown periods. j. Staff remuneration as percentage of total operating expenditure The set target was achieved and staff remuneration remains within set parameters. Staff remuneration remains market related. This KPI is particularly useful in benchmarking with other water boards and State‑Owned Entities. 7. B‑BBEE expenditure and awards a. Spend increased and increased new entrants awarded contracts in the financial year Rand Water exceeded its set target in line with continuing efforts in these difficult circumstances. b. Award of work to B‑BBEE compliant entities through the tender systems The set target was exceeded due to close monitoring, demonstrating the entity’s extensive effort over an extended period. 8. Actual expenditure compared with budgeted expenditure The set target was achieved. Cost control measures such as cascaded measurement of controllable expenditure, cost containment efforts and budget reprioritisation processes, enables the business to allocate resources where required most whilst underpinning cost effective and efficient behaviours accross the business. 9. Capital expenditure programme a. Overall project expenditure within R target The target was achieved, and this was attributable to, among others, resolving challenges in aligning to regulations, and commitment to implementing the Integrated Execution Plan for projects. b. Overall project completion dates within targets The organisation continues with its commitment to implementing the Integrated Execution Plan for projects. 10. Year‑on‑year growth in secondary (other activities) This KPI was previously not targeted and thus not applicable for the year under review due to the uncertain financial position of the potential sources of secondary (other) activities, that is local municipalities. Therefore, the KPI was deemed as not within the control of Rand Water. However, on the value‑add advice of the AGSA, this KPI has a target of N/A and is marked as not applicable. 11. Municipalities/Other customers with bulk supply agreements Rand Water continues to achieve the set target as the organisation has long‑standing contracts with customers. 12. New Ministerial directives issued are implemented on time, progress against implementation plan The KPI relates to the implementation of Ministerial directives (actual work done) and report on progress against the implementation plan. The KPI relates to one of those that impacted by the DWS revision. The revision helps to clarify the intention of the Shareholder; and aligns with the with the advice and value‑add of the AGSA. Rand Water met the set target due to continuous monitoring and report back to DWS to ensure alignment with their requirements.

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