Annual Report no. 8 July 2005 – June 2006 Ikangala Water 1/15/2019

Introduction IW appointed KPMG Inc for the year ended 30 June 2006 Independent auditors in terms of: Section 188 of the constitution of RSA Section 4 and 28 of Public Audit Act (Act 25 of 2004) Requirement of Water Services Act Requirement of PFMA Audited report presented 1/15/2019

Audit Report Non compliance by the Board: IW did not have a system of internal audit as required by PFMA A risk management strategy and a fraud prevention plan as required by Treasury Regulations was not implemented IW did not submit its budget to the relevant treasury for approval as required by PFMA IW did not submit its 5yrs (2006-2010) business plan to the Minister of DWAF as required by WSA 1/15/2019

Overview Status of the Board ( 2 Board members) Management (No senior managers) Current staff (4 permanent employees) Current activities (billing of bulk supply) Income (subsidies from DWAF and payment from 1 local municipality & business) 1/15/2019

Water Produced Total water produced 33 376 824 Kl 13 981 063 Kl Bronkhorstspruit 19 395 761 Kl Weltevreden 1 234 320 Kl water loss (3.7%) 1/15/2019

Water Sales Volume (Kl) Amount (R) Kungwini 1 865 080 4 215 081 Thembisile 13 633 174 30 810 973 Dr JS Moroka 13 039 118 29 468 407 Greater Marble Hall 493 687 1 115 733 Elias Motsoaledi 3 111 465 7 031 911 Total 32 142 504 72 642 105 1/15/2019

Income Statement 2006 2005 2004 2003 Water sold (Kl) 32 142 504 30 005 939 30 375 475 36 040 085 Revenues (R) 1 594 883 1 188 440 1 300 559 Operating Expenses 1 459 517 2 999 361 3 570 738 3 357 694 Income 136 366 -1 810 921 -2 270 179 -3 357 694 DWAF Subsidies 2 550 000 2 000 000 Net surplus/ deficit 137 025 768 887 -226 572 -1 296 784 1/15/2019

Balance Sheet Breakdown 1/15/2019

7.1% growth rate in water sold 34.2% growth rate in revenue Financial Indicators 7.1% growth rate in water sold 34.2% growth rate in revenue Lowest operating expenses Positive operating income Positive return for first time since establishment Profit of R137 025 1/15/2019

No long term liabilities Current liabilities R307 547 Financial Indicators No DWAF subsidies in 2005/6 Reserve of R820 374 Current assets R1 063 201 No long term liabilities Current liabilities R307 547 1/15/2019

Being economically independent and financially viable Strategic Objectives Being economically independent and financially viable Improve revenue collection Access to affordable and sustainable water services at acceptable levels Supporting municipal service delivery objectives 1/15/2019

Commitment to economic empowerment of communities Strategic Objectives Raising awareness of value of water, health, sanitation and the environment Commitment to economic empowerment of communities Develop pool of skills for socio-economic growth Partnership with private sector and other WBs 1/15/2019

Appointment of more Board members Appoint senior managers Conclusion Appointment of more Board members Appoint senior managers Transfer of bulk infrastructure to IW with unlimited powers and budget Establish Board committees Finance (Internal audit/risk management/fraud prevention) HR Technical 1/15/2019

Conclusion Align 5 yrs business plan up to 2011 with municipal IDPs/WSDPs and Millennium goal on water and sanitation services Board to appraise its budget and submit for approval by end of April for 2007/2008 Sign water services agreements with municipalities Self-sustained Board = service delivery Efficient and effective service delivery will lead to a better life and contribute to local economic growth 1/15/2019

Thank You Questions? 1/15/2019