Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

4.

Property, plant and equipment (continued)

Assets pledged as security

As at 30 June 2025 the Group pledged a portion of the Zwartkopjes farm amounting to R100.3 million, as security for the rehabilitation cost of the Panfontein sludge disposal site at end of useful life.

Changes in estimates

During the current reporting period, the Group reassessed the environmental restoration obligation to rehabilitate and decommission costs arising from the sludge disposal site. 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. The Group recognised a reduction of R2.6 million (2024: addition of R8.4 million) in the rehabilitation provision estimate based on the actual rehabilitated calculation value. 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 Bloomberg, a market news centre, for a period of three years. The Group reassesses the estimated useful life ranges of its classes of property, plant and equipment and has identified instances where certain individual assets may operate beyond these typical ranges. Management has assessed these instances and concluded that the impact is not material and does not affect the overall fair presentation of the financial statements.

Group

Rand Water

Figures in Rand thousands

2025

2024

2025

2024

Borrowing costs capitalised Borrowing costs capitalised to qualifying assets Capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation

320 150

376 107

320 150

376 107

10,21 %

10,18 %

10,21 %

10,18 %

Reconciliation to the Statement of Cash Flows Opening balance

(30 844 424) 32 609 227

(29 477 543) 30 844 424

(30 876 634)

(29 510 351)

Closing balance

32 640 876 30 876 634

Subtotal

1 764 803 (320 150) (252 812)

1 366 881 (376 107) (184 365)

1 764 242 (320 150) (252 815)

1 366 283 (376 107) (184 364)

Borrowing costs capitalised

Other adjustments

Depreciation and impairment

702 925 681 499 1 894 766 1 487 346 1 894 766 1 487 311 680 937 703 489

Impairment and reversal of impairment

The carrying amounts of non-financial assets within the scope of IAS 16 are reviewed annually and monitored quarterly and adjusted (if required) and at each reporting date to determine whether there is any indication of impairment. The assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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Rand Water | Integrated Annual Report 2025