Rand Water | Integrated Annual Report 2025

INTEGRATED ANNUAL REPO

Consolidated Annual Financial Statements for the year ended 30 June 2025

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

35. Secondary activities (continued)

The disclosure note on secondary activities complies with Section 30 of the Water Services Act and that secondary activities, as defined, have been ring fenced for all periods being reported.

The categories are derived based on the categories within the Water Services Act as follows:

Management consulting, training and other support services

Qualifies under: s30(2)(a) Providing management and other support services in order to promote co-operation in the provision of water services.

Non-potable water supply services

Qualifies under: s30(2)(b) & (d) The supply of untreated or non-potable water to end users who do not use the water for household purposes but for industrial use.

Potable water supply services

Qualifies under:

s30(2)(d))(i) Supply of potable water with permission from the water services authority to a customer for industrial use.

s30(2)(d)(iii) with permission from the water services authority to act as a water services provider to customers.

36. Going Concern

The consolidated annual financial statements have been prepared on the basis that the Group will continue as a going concern. Notwithstanding, the current economic climate and the ongoing geopolitical uncertainties, the Board is satisfied that Rand Water remains financially viable in terms of section 34 (2)(a)-(e) of the Water Services Act. The Board is further of the opinion that the Group has adequate resources to meet its liquidity, debt, operational and investment requirements over the next twelve months and into the medium term. Key ratios to establish the going concern basis may decline when compared year on year should the impact from these risks materialise. Management has however undertaken various scenario analysis and stress testing, and based on the outcomes, is satisfied that these ratios are expected to remain sustainable over the short to medium term. Further details are provided in Note 42 of the consolidated annual financial statements. The Group has secured access to funding in line with the approved/gazetted borrowing limits issued by National Treasury. The underlying borrowing plan has been developed to ensure that the Group can successfully finance its capital expenditure programme without breaching the set financial parameters. As at 30 June 2025, the Group has access to ZAR10 billion DMTN with available headroom of R6.8 billion. • The Group implemented a cost reflective tariff R13.31 per kl during the current financial year, which contributed to an increase in revenue. For the 2025/26 financial year, a tariff increase of 15.8% has been approved. • The Group has access to adequate resources in the form of a liquidity buffer of R2.2 billion, which remains critical in the current distressed economic environment. In addition, committed facilities of R1.5 billion have been secured, further strengthening the Group's ability to continue operations into the foreseeable future, under both normal and stressed conditions. The going concern assessment was undertaken, taking into consideration the following: •

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Rand Water | Integrated Annual Report 2025