Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

BOARD REPORT (CONTINUED)

13.2 Performance information explanations

Explanatory notes to the performance information:

i) Bulk potable water quality compliance

The set target was achieved as Rand Water complied with all SANS 241 requirements because of Rand Water’s commitment to maintaining world-class operations.

ii) Manage avoidable water losses

The set target was achieved as Rand Water continued to undertake its extensive maintenance programme.

iii) Number of days of unplanned supply interrupted

The set target was achieved as Rand Water continued to execute its capital expenditure programme and extensive maintenance programme.

iv) Actual CAPEX spend on expansion related projects as a percentage of budget

The set target was met primarily due to overcoming regulatory alignment challenges and maintaining a strong commitment to executing the Integrated Project Implementation Plan.

v) Annual external audit

Awaiting external audit opinion.

vi) Improve financial ratios

a) Current ratio The set target was achieved. Current liabilities increased at a higher rate than current assets. Cash and cash equivalents increased primarily due to the maturity of longer-dated term deposit investments. b) Gross income margin % (primary activity) The set target was exceeded as revenue outperformed its target. Revenue that was previously not recognised in line with IFRS 15 was recognised as the entity managed to conclude debt settlement agreements.

c) Gross income margin (secondary activity) The set target was met due to certain projects yielding margins above their costing structure.

d) Net income margin (primary activity) The set target was exceeded which is attributable to a solid gross profit performance and further supported by higher net finance income generated from strategic investments. e) Net income margin (secondary activity) The set target was exceeded primarily due to improved net income as a result of long outstanding debt which has been settled with the DWS. f) Debt equity The set target was achieved primarily due to increased income resulting in increased equity, while no new borrowings were issued during the current financial year.

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Rand Water | Integrated Annual Report 2025