RAND WATER ANNUAL REPORT 2023

Consolidated Annual Financial Statements for the year ended 30 June 2023 Notes to the Consolidated Annual Financial Statements 19. Provisions (Continued)

Reconciliation of provisions ‑ Rand Water ‑ 2023 Figures in Rand thousand Rand Water

Opening balance

Additions Reversed during the year

Change in discount factor

Total

Environmental rehabilitation

102 908

5 330

-

8 006 116 244

Legal proceedings

5 663

775

(4 624)

-

1 814

108 571

6 105

(4 624)

8 006 118 058

Reconciliation of provisions ‑ Rand Water ‑ 2022 Figures in Rand thousand Rand Water Opening balance

Additions

Utilised during the year

Reversed during the year

Change in discount factor

Total

Environmental rehabilitation

89 163

4 066

-

-

9 679 102 908

Legal proceedings

153 134

-

(145 000)

(2 471)

-

5 663

242 297

4 066 (145 000)

(2 471)

9 679 108 571

Reconciliation of provisions ‑ Rand Water ‑ 2021 Figures in Rand thousand Rand Water Opening

Utilised during the year

Reversed during the year

Change in discount factor

balance Additions

Total

Environmental rehabilitation

83 172

3 410

-

-

2 581

89 163

Legal proceedings

-

-

159 835

(8 700)

1 999 153 134

83 172

3 410 159 835

(8 700)

4 580 242 297

The rehabilitation cost relates to Rand Water’s Panfontein sludge waste disposal site. The Group has an obligation to undertake restoration, rehabilitation and environmental work at the end of the sludge disposal sites useful life. The rehabilitation costs will be funded through the sale of a portion of the Zwartkopjes farmland pledged as security, at the end of its’ useful life. (Refer to Note 4). During the current reporting period, an actual quantification of the rehabilitation provision was calculated based on the adopted rehabilitation approach which included the revision of the estimated useful life of the site. Rand Water recognised an R8 million (2022: R9.7 million and 2021: R2.6 million) estimate based on the actual rehabilitated calculation value. Rand Water is in a process of procuring additional equipment to move some of the existing sludge to sacrificial beds to create additional capacity as an immediate intervention. In the short to medium term, additional space would be created with the construction of 50 hectors additional capacity which will provide another 3 years of life and is expected to be completed by March 2025, as well as implementation of the stockpiling project that will extend the useful life of the plant to November 2027. Management has placed reliance on the work of an expert in determining the value which was based on a combination of phyto‑desiccation and water treatment residue removal approach. Future estimates are determined by using the forecast inflation rate as per projections from the four major banks and the financial information from market news centre (Bloomberg) for a period of three years.

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