Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

39. Contingencies (continued)

Rand Water received a summons issued at the High Court of South Africa, Gauteng Local Division. The summons alleges that Rand Water is indebted to the applicant in the amount of R237 million. According to the claim, it is asserted that a settlement agreement was reached on 2 December 2021, wherein Rand Water consented to a monetary settlement of R145 million and to engage in negotiations for a five-year contract pertaining to sludge removal. The applicant contends that while Rand Water has complied with the monetary settlement, it has failed to uphold the subsequent agreement regarding sludge removal, leading to substantial damages.

Other matter

On 4 November 2016, a notice in the Government Gazette to inform all interested and affected parties that a claim of restitution of land rights has been lodged. The claim affects certain Rand Water’s properties as they are situated within the area specified in the notice. Rand Water continues to monitor the progression of the claim.

Guarantees

The Group has contingent liabilities in respect of guarantees given to third parties that amount to R713.6 million (2024: R679.2 million). The Group issued an additional bank guarantee of R30 million relating to Eskom's electricity supply agreement.

40.Irregular, Fruitless and Wasteful Expenditure and Criminal Conduct

Irregular Expenditure and Fruitless and Wasteful Expenditure

Irregular expenditure is defined as expenditure incurred in contravention of, or that is not in accordance with, any legislative requirements notwithstanding that value was received. Fruitless and wasteful expenditure is expenditure which was made in vain and would have been avoided had reasonable care been exercised. Group Rand Water Figures in Rand thousands 2025 2024 2025 2024 Irregular expenditure 1 373 861 741 214 1 373 861 741 214 Irregular expenditure - prior period - 96 601 - 96 601 Fruitless and wasteful expenditure 713 74 713 74 Fruitless and wasteful expenditure - prior period - 284 - 284 Closing balance 1 374 574 838 173 1 374 574 838 173

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Rand Water | Integrated Annual Report 2025