1. PRESENTATION TITLE Presented by: Name Surname Directorate Date Annual report for the 2014/15 financial year Magalies Water

2. Annual report for the 2014/15 financial year Part 1: Overview of financial performance Part 2: Overview of non-financial performance CONTENTS 2

3. PART 1: OVERVIEW OF FINANCIAL PERFORMANCE 3

4. 4 FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2015 Audited Outcome 2014/15 Audited Outcome 2013/14Variance R'000 % Revenue Revenue from exchange transactions411 535331 936 24% Revenue from non-exchange transactions Expenditure Employee benefit costs101 87389 985 13% Operating expenditure241 518210 701 15% Impairment of financial assets Finance cost Depreciation, amortisation and impairment32 98430 998 6% Loss on disposal of fixed assets Surplus/(deficit)from operating activities35 160252 138%

5. 5 STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2015 20152014VARIANCE R'000 % ASSETS Current Assets Cash and cash equivalents17 13039 407-56% Receivables from exchange transactions336 315301 91611% Financial assets193 650453 442-57% inventory22 03715 93838% Non-Current Assets Property, Plant and Equipment1 579 514968 17563% Intangible assets19 3871 801976% Total assets2 168 0331 780 67922% LIABILITIES Current Liabilities Payables from exchange transactions239 781161 39948% Employee benefits Finance lease liability Finacial liabilities: TCTA Non-Current Liabilities Finance lease liability Financial liabilities: Deferred Income735 510487 83251% Total liabilities975 291649 23150% Total net assets1 192 7421 131 4485% NET ASSETS Reserves Accumulated surplus Pumping cost reserve Net assets1 192 7421 131 4485%

6. Ratios Liquidity The current ratio. 1: 2.3 Cash flow from operations. The cash and cash equivalent at the end of the year amounted to R17 million excluding the short term investments. Return on assets The ratio on return on assets is 24%. This illustrates the entity’s effectiveness in using its investment in assets. Debtor days in sales During the period under review, the debtor days’ analysis reflected an improvement from 66 days in 2014 to 62 days in 2015. This is due to enhancement of credit control measures effected by the entity, including restriction of supply of services for defaulting customers. The entity achieved a Return on Equity of 5%. This is as a result of the capital expansion increases and efficiencies in the delivery of water. 6

7. Analysis of current payments 7 Compensation of employees Goods & services

8. Irregular expenditure Analysis: (a)CIDB Regulation not complied with in awarding the contract – R6.8M (Capital expenditure) (b)Non compliance with delegations of authority – R25.4M (Capital expenditure) (c)Non compliance with Preferential Procurement Regulations – R9.5M (SAP implementation) (d)Non compliance with Procurement Policy – R7.7M (Uncertified copies of original BEE certificates and Tax Clearance Certificates) 8

9. Fruitless and Wasteful Expenditure 9 2014/152013/14 R'000 Opening balance5 Fruitless and wasteful expenditure – relating to current year 465 Fruitless and wasteful expenditure awaiting resolution 05 The fruitless and wasteful expenditure relates to legal fees.

10. Commitment analysis (R’000) 10

11. 2014/152014/13 Contingent liabilities Total512 178 Contingent assets Total940 989886 622 Notes Contingent liabilities and assets 11

12. OVERVIEW OF AUDIT REPORT 12

13. Analysis: matters relating the audit report per year 2010/112011/122012/132013/142014/15 Qualified (6)Unqualified 13

14. Number of findings per category 14 Audit of predetermined objectives - 5 Non compliance with SCM policy - 8 Human Resources Management - 2 Information Systems Audit - 8 Administrative Matters - 4

15. PART 2: OVERVIEW OF NON- FINANCIAL PERFORMANCE 15

16. Analysis: achievement of the strategic oriented goals 16 Achieved (100%) Partially achieved (50 – 99%) Not achieved (<50%)

17. Analysis of annual performance 17

18. Analysis of performance-Customer and Stakeholder perspective 18 Performance Objective AlignmentIndicators Target: 2014/15 Actual Performance: 2014/15 Achievement indicator Ministeri al Outcome s DWS Strategic Plan Water quality compliance Outcome 12 SO 3.1 Test results, SANS 241 Acute health- 100% Chronic health- 97% Operational- 95% Aesthetic -95% Acute 1 -99.0% Chronic health - 99.7% Operational - 94.3% Aesthetic – 96.9% Non-revenue water Outcome 10 SO2.1 &2.4 Water lost as a % of total water produced 5%4% Reliability of supply Outcome 6 SO3.1% number of days supply disrupted / total number supply days 1%0.55% Achieved (100%) Achieved (100%) Achieved (100%)

19. Analysis of performance-Customer and Stakeholder perspective 19 Performance Objective AlignmentIndicators Target: 2014/15 Actual Performance: 2014/15 Achievement indicator Ministeri al Outcome s DWS Strategic Plan Capital Expenditure Outcome 6 SO 1.3&2.1 Overall project expenditure within R target 80%50% Overall project completion dates within targets 0%(5%) Increased access to services Outcome 9 SO 1.3&2.1CAPEX spend /projects R1 089 925 /36R550 731/22 Partially achieved (50 – 99%) Partially achieved (50 – 99%) Partially achieved (50 – 99%)

20. Analysis of performance-Finance perspective 20 Performance Objective AlignmentIndicators Target: 2014/15 Actual Performance: 2014/15 Achievement indicator Ministerial Outcomes DWS Strategic Plan Improve financial ratios Outcome 12SO 1.2,1.6&3.3Liquidity2:13:1 Total Income (R’000) R412 703 R415 816 Total Expenses (R’000) R339 800R344 064 Gross Profit Margin (%) 13%18% Net Profit (%)16%15% Return on Assets (%) 3%5% Debtors Days (Number) 60 days62 days Achieved (100%) Achieved (100%) Achieved (100%) Achieved (100%) Partially achieved (50 – 99%) Partially achieved (50 – 99%) Achieved (100%)

21. Analysis of performance-Processes perspective 21 Performance Objective AlignmentIndicatorsTarget: 2014/15 Actual Performance: 2014/15 Achievement indicator Ministeria l Outcome s DWS Strategic Plan Board member attendance Outcome 12 SO 1.6 Actual attendance 100%86% Effective internal controls and risk management Outcome 12 SO 6.5 &6.6 Internal audit reports 0 Repeat findings 0 Unresolved findings Good governance Outcome 12 SO 1.6Breaches of materiality and significance framework 0 breaches of materiality and significance framework Partially achieved (50 – 99%) Achieved (100%) Achieved (100%) Achieved (100%)

22. Analysis of performance-Learning and Growth perspective 22 Performance Objective AlignmentIndicatorsTarget: 2014/15 Actual Performance: 2014/15 Ministeria l Outcome s DWS Strategic Plan Jobs Created Outcome 12 SO 1.3Total Number1668 Outcome 12 SO 1.3Total Number700746 Training and skills development Outcome 12 SO 1.3 Training courses, learner-ships, bursaries Technical skills- 70 Administrative skills-30 Technical skills- 197 Administrative skills-161 Increase BBBEE spend Outcome 12 SO 1.6% of spend30% spent 78% (24% spent on subcontracting on capex to SMME) increased new entrants 023 Achieved (100%) Achieved (100%) Achieved (100%) Achieved (100%) Achieved (100%)

23. Performance Indicators partially achieved 23 Performance Objective Target: 2014/15 Actual Performance: 2014/15 Factors that contributed to partial achievement of performance objectives Water quality compliance Acute health-100% Chronic health-97% Operational-95% Aesthetic -95% Acute 1 -99.0% Chronic health - 99.7% Operational -94.3% Aesthetic – 96.9% Poor raw water quality due to decay of carbon materials and elevation of phosphates Capital Expenditure 80%50% Community unrests contributed to projects not being completed in time in the Walmannsthal and Klipdrfit areas. Bids were unresponsive in implementation of other components of the Pilanesberg Bulk Water Supply Scheme, hence tenders had to be re-advertised. 0%(5%) Increased access to services R1 089 925 /36R550 731/22

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