Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

INDEPENDENT AUDITOR’S REPORT (CONTINUED)

Consolidated financial statements

Materiality considerations

Separate financial statements

Final materiality amount

R458 million

R458 million

Basis for determining materiality 2% of revenue, as disclosed in note 23 to the financial statements 2% of revenue, as disclosed in note 23 to the financial statements Rationale for benchmark applied Revenue is an appropriate quantitative indicator of materiality as it reflects Rand Water’s core business of selling bulk potable water and its ability to sustain operations. 10. In determining materiality, professional judgement was applied, taking into account that group and public entity’s funds its operations through revenue generated from the sale of water and does not rely on government funding. No adjustment to the selected benchmark was considered necessary. A percentage of 2% of total revenue was applied, as it is consistent with quantitative materiality thresholds commonly used for entities operating in the water sector that are primarily revenue-generating in nature.

Group audit scope

11. I tailored the scope of the audit to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, considering the structure of the group and the accounting processes and controls. 12. The group audit scope included the audit of Rand Water and its subsidiaries, based on their financial significance and risk profiles. Professional judgement was applied in determining the extent of audit work required for each component, focusing on areas with higher assessed risks of material misstatement. The scope was designed to obtain sufficient appropriate audit evidence across all significant components to support the group audit opinion.

Key audit matters

13. Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the consolidated and separate financial statements for the current period. These matters were addressed in the context of my audit of the consolidated and separate financial statements as a whole and in forming my opinion, and I do not provide a separate opinion on these matters. 14. I have determined the matters described below to be the key audit matters to be communicated in my report. In terms of the EAR Rule, I am required to also report the outcome of audit procedures or key observations with respect to the key audit matters, and these are included below:

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Rand Water | Integrated Annual Report 2025