Rand Water | Integrated Annual Report 2025

INTEGRATED ANNUAL REPO

Consolidated Annual Financial Statements for the year ended 30 June 2025

3.2 Property, plant and equipment (continued)

Depreciation

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method. Depreciation commences when the asset is available for its intended use by management. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Land and assets under construction are not depreciated. All other property, plant and equipment, including capitalised leased assets, are depreciated on a straight-line basis over their estimated useful lives or the term of the lease, whichever is shorter to their estimated residual value. Major repairs are depreciated over the remaining useful life of the related asset or to the date of the next major repair, whichever is shorter. The estimated useful lives are as follows: Asset Category Estimated useful life (years) Land Indefinite Buildings Building structures and components 10-80 Plant and Machinery • Plant structures and components 3-80 • Reservoirs 80 • Dams 40 -100 Pipelines • Pipeline structures and components 15-75 Furniture and fixtures 3-30 Motor vehicles 6-20 Office equipment 3-30 Information technology equipment (IT equipment) 3-8 Assets under construction No depreciation The depreciation charge for each period is recognised in profit or loss. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Financial Performance when the asset is derecognised. The low value asset class recognises assets at an initial acquisition value of R10 000 and lower and is depreciated within the financial year of acquisition. This category of assets is deemed to be insignificant in relation to the asset base, but are annually reviewed to determine the cumulative impact on depreciation to quantify the significance thereof. Future adjustments of this threshold is based on the time value of money calculation and adjusted from time to time. 3.3 Intangible assets

Owned

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

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Rand Water | Integrated Annual Report 2025