Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

REPORT OF THE GROUP AUDIT AND RISK COMMITTEE (CONTINUED)

• reviewed the external auditors' management letter and managements’ response thereto; • reviewed compliance with legal and regulatory provisions; • reviewed significant adjustments resulting from the audit; • reviewed and discussed with the accounting authority, the performance information submitted to the external auditors; and • reviewed and assessed the Johannesburg Stock Exchange (JSE) proactive monitoring report. During the year the Committee met with the external auditors and internal auditors, without management being present, and confirmed that there were no material unresolved issues. Internal controls The internal controls system is designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, safeguarding of assets, prudent management of liabilities and working capital and compliance with laws and regulations. The key components of the internal financial controls architecture include: • A comprehensive and integrated system of financial planning, budgeting, and reporting that enables ongoing monitoring of financial performance; • An approved framework for assessing materiality and significance; • Clearly defined delegations of authority; • A robust and sustainable funding strategy; and • Institutionalised policies and procedures across all areas of business. These controls are monitored throughout the organisation by management and employees, with the necessary delegation of authority and segregation of duties. The Committee is satisfied that the financial and performance reports submitted during the year were of an acceptable quality and enabled informed oversight and decision-making. Based on its review of the various internal audit reports for the current financial year, the Committee noted that there were no material weaknesses in the systems of internal controls. The internal controls were generally adequate and effective except in the procurement of goods and services and Information Communication and Technology (ICT) where significant findings were raised indicating control deficiencies requiring urgent management attention. The Committee maintains close oversight and continues to track management's effort to address and remediate the identified weaknesses. Going concern The consolidated annual financial statements have been prepared on a going concern basis. Based on the quality and timeliness of the information provided as detailed in section 11 of the Board Report, the Committee is satisfied that the Group can continue to operate as a going concern in the foreseeable future. Accordingly, the Committee has recommended the consolidated annual financial statements for approval by the Board. The Committee has reviewed management's assessments of the going concern of the Group and has made recommendations to the Board accordingly. Internal Audit The Group Internal Audit (GIA) function continues to serve as a cornerstone of the governance framework, operating in accordance with the Public Finance Management Act (PFMA), King IV principles, and the newly adopted Global Internal Audit Standards issued by the Institute of Internal Auditors (IIA).

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Rand Water | Integrated Annual Report 2025