Rand Water | Integrated Annual Report 2025

INTEGRATED ANNUAL REPO

HOW WE MANAGE OUR FINANCIAL CAPITAL Rand Water’s financial capital management is guided by a strategy focused on long-term financial health and sustainability. Our approach emphasises productivity, balance sheet optimisation, growth reinvestment, robust funding strategies, and strong risk and control management.

Efficient revenue collection and working capital maintenance

Securing debt for capital expenditure (CAPEX)

Key Financial Management Priorities

Maintaining sound governance and regulatory compliance

Ensuring liquidity

Managing economic, currency, and interest rate risks

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Ensuring Adequate Working Capital In 2025, enhanced credit management and collaboration with government bodies improved debt recovery and collections. Debt Settlement Agreements (DSAs) and the use of Section 216 (Constitution) strengthened cash inflows. Relief measures from the Department of Water and Sanitation further eased pressures from delayed municipal payments. With a committed facility headroom of R1.5 billion and strong cash reserves, we remain well-positioned to support operational and strategic needs. - - Funding Acquisition Our comprehensive funding framework is anchored by a ZAR10 billion Domestic Medium-Term Note (DMTN) Programme, with R6.8 billion in available headroom as of June 30, 2025. We complement this with long-term loans from development finance institutions and commercial banks, ensuring we can finance capital projects and sustain operations despite economic challenges Capital Management Program Our capital management program prioritizes critical infrastructure, including key reservoir and pipeline projects, and initiatives to reduce water losses and automate demand controls. We have exceeded our CAPEX targets, reinforcing operational efficiency and infrastructure integrity, and securing long-term stakeholder value. Governance and Internal Controls Rand Water upholds a strong governance and control environment, ensuring compliance with all legislative and regulatory requirements. Our Group Audit and Risk Committee oversees financial decisions and reporting, reflecting our commitment to transparency and compliance. Funding and Treasury Risk Management We actively manage interest rate, currency, and liquidity risks within robust governance frameworks. Our risk management includes stress testing against economic scenarios, balancing fixed and floating-rate instruments, and monitoring foreign currency exposures to mitigate financial volatility. -

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Rand Water | Integrated Annual Report 2025