Stakeholder Annual Report Presentation 2005/6 Themba Nkabinde Chief Executive

TSHWANE BETHAL CARLETONVILLE JOHANNESBURG VEREENIGING SASOLBURG WINTER VELD RUSTENBURG BRITS HEILBRON Service Area Consumers - 11 million Area - 18 000 sq km Total Pipelines - 3 400 km Total Reservoirs - 54

EXTENDED AREA OF SUPPLY Pipeline from Mamelodi to Western Highveld Cost: R112m RW: R42m DWAF R70m Issue: Shared infrastructure but separate authorities Consumers - 11 million Area - 18 001 sq km Total Pipelines - 3 480 km Total Reservoirs - 54

CUSTOMER SALES PROFILE

SIGNIFICANT EVENTS New Minister & DG Rand Water Services Management restructuring Meredale incident Redemption of R860m debt

Increase in sales volume to 3457 Ml/d AADD Revenue : R3 672 million FINANCIAL PERFORMANCE HIGHLIGHTS Increase in sales volume to 3457 Ml/d AADD Revenue : R3 672 million Net income : R 593 million Net cash from operating activities : R712 million Assets : R5,386 bn 0.9% 6.1% 19.7% 0.9% 5,6%

SALES

RAND WATER PROFITABILITY Net Finance Costs: 176 158 144 122 80

Annual Report 2005/6 RETURN ON TOTAL ASSETS

PERFORMANCE HIGHLIGHTS KPI Unit 2003 2004 2005 2006 Profit Margin % 9,7 12.04 14.29 16.12 Return on Equity 12.3 14.1 15.5 15.7 Interest Cover 2.8 3.7 5.2 8.4 Return on Assets 8.9 10.0 10.8 12.5 Credit Rating (CA Ratings) AA Asset T/O Ratio 1.3 1.2 Current Ratio/Quick Ratio 1.5 1.8 0.9 1.4

CURRENT INFRASTRUCTURE PROJECTS Brakfontein / Hartebeespoort (50 km) pipeline for R310 million. The EIA approved but subject to appeal Projects done in partnership with other stakeholders: Western Highveld Region Project for R112 million of which R42 million is from Rand Water and the rest from DWAF

FUTURE CAPITAL INVESTMENTS A total of R2,9 billion capital investment is planned over the next 5 years: 57% - Augmentation schemes 43% - Renovations and upgrades Of the total, 80% is on distribution network

FUTURE INFRASTRUCTURE PROJECTS Vlakfontein Mamelodi Pipeline - R370 million Weltevreden Resevoir – R60 million BG3 Pipeline – R180 million Zwartkopjes-Forest Hill System – R140 million

ORGANISATIONAL TRANSFORMATION General Management Executive Female Empowerment 23% 28% 50% ACI Empowerment 83% 63% Commercial Equity Spend – 60% 29,1% Training Spend - 8.5% of payroll

ORGANISATIONAL TRANSFORMATION Learnerships 20 PWD (LG&W SETA) PWD 3.9% of total staff Talent Development 86 bursaries awarded at Tertiary Institutions. Sponsored two professorial chairs Apprenticeship 13 apprentices of which 85% are female HIV/Aids Program 1.56% of staff tested positive and are on an “Aid for Aids Program”

EMPLOYEE PRODUCTIVITY RATIOS 2003 2004 2005 2006 No. of Employees 3 108 3 097 3 049 3 006 Ml sold 1,216,343 1,252,828 1,259,927 1,279,939 Ml per employee 391 404 413 425 Revenue R’000 2,884,405 3,258,055 3,460,099 3,672,119

Corporate ISO 9001:2000 quality accredited OTHER PERFORMANCE HIGHLIGHTS Corporate ISO 9001:2000 quality accredited All plants ISO 14001:2004 environmentally accredited All Plants OHSAS 18001 safety accredited ISO 17025 accredited laboratory

CORPORATE SOCIAL RESPONSIBILITY Categories 2006 2005 2004 Externally funded projects R45 770 000 R41 150 000 R14 840 968 Spend on local suppliers R13 105 810 R10 833 198 N/A Spend on Local Labour R8 907 817 R8 290 902 Female Employed 54% 49.7% Jobs created 1 389 1 459 648

Alien Plant Removal - Water Conservation CORPORATE SOCIAL RESPONSIBILITY Water and Sanitation Project Area Value Gender M F Total Staff Winterveldt Pipe Reinforce Winterveldt Areas R5.3m 60% 40% 10 Winterveldt Sanitation Winterveldt (Ward 9,24) R5.5m 64.8% 35.2% 105 R10.8m 115 Alien Plant Removal - Water Conservation Project Area Value Gender M F Total Staff Alien Plant Removal Mogale City R1.3m 54% 46% 52 Elandsfontein R1.5m 53% 47% 60 Kestell & Fouriesburg Bethlehem Eastern FS R2.0m 59% 41% 61 Caledon & Jordaan R6.3m 130 Qwa Qwa Alien Removal Qwa Qwa Eastern FS R2.5m 48% 52% 298 R13.6m 601

CORPORATE SOCIAL RESPONSIBILITY Domestic Leaks Repairs - Water Conservation Project Area Value Gender M F Total Staff Emfuleni Leaks Repairs Emfuleni (Ironsude) R1.9m 29% 71% 35 Tshwane Leaks Phase 2 Mamelodi R1.5m 62% 38% 45 R3.4m 80 Wetland Rehabilitation - Water Conservation Project Area Value Gender M F Total Staff Blesbokspruit Nigel / Springs R1,0m 31% 69% 54 Siluma View Thokoza R370 46% 54% 26 R1.37m 80

RAND WATER SERVICES (Pty) Ltd Ghana involvement Pipeline Integrity Management (C&K Joint Venture) Infrastructure Development Fund

Current Challenges Attract, develop & retain leading edge skills in water services Improve internal performance management Engage meaningfully with government on service delivery Catchment management Delivery on water & sanitation targets NEPAD Initiatives Engage customers on full suite of water services Bulk sanitation Demand management

LOOKING INTO THE FUTURE……. Vision: Industry leader and partner of choice in sustainable water services in Africa by 2011.

Thank You