Financial update : Mr. M NGOBENI

COLLECTION AND DSO TRENDS The trends are a clear indication that most customers are having cash flow challenges High Debtors Days outstanding affects RW’s working capital(cash flow) and credit risk matrix Decreasing trend – an indication that we collect less and less cash every month

Debt management process In terms of late payments, the following measures have been implemented by Rand Water: The dedicated In-house Strategic Customer Partnership Management division is assisting with customer engagement regarding long outstanding debt as well as regular defaulters for late payments. Rand Water always encourages customers to enter into payment arrangement when they foresee a possibility of a default. On a monthly basis, a report of all arrears owed by each municipality together with its aging is submitted to National Treasury and the Department of Water and Sanitation as per Section 41(2) (b) of the MFMA. National Treasury and CoGTA always assist in monitoring payment arrangements from the defaulting Municipalities. The process of limiting or discontinuing water when customers default is being used rigorously as a means of debt collection.

Debt management process (cont.) The Rand Water Credit Management Policy contains provisions relating to: Risk Profiling for all customers including Municipalities: Risk profile is determined on the basis of the credit risk of each customer as well as the default rate per customer Risk Security Form of Security Very High No credit (pre-paid account) High Medium Up to 3 months consumption Cross company surety/Bank guarantee Low risk Cash/Bank guarantee

Finance Shared Services (FSS)

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