O V E R B E R G W A T E R

1.AREAS AND MUNICIPALITIES SERVED, ACHIEVEMENTS AND CHALLENGES  Relationship with Municipalities  Non-Financial Performance  Audit Report  Income Statement  Balance Sheet  Financial Indicators & -Ratios  Bulk Water Sales & Revenue  Bulk Water Tariffs  Expenditure (Bulk Provision)  Reserve 2.THE TARIFFS PROPOSED BY THE DEPARTMENT ON BULK WATER  Graphic presentation of tariffs  Principles of tariff structure  Process 2

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 Serious work injuries → zero  Absenteeism → 2,7%  Staff turnover → 9%  Labour unrest → zero  Water quality → Class 1 (SANS 241, 2006)  Water loss → 4,8% 5

 Unqualified Audit  Positive report on systems & procedures  Relevant legislation adhered to 6

 Consolidated Income Statement Income from and expenses financed through  Bulk Water Sales  Retail Water Sales (as secondary activity)  Other Secondary Activities  Reserve 7 Total Income: R25 017Total Expenses: R R’000

8 Net Income: R2 404 INSTALLMENT DWA LOAN R1 203 CONTRIBUTION TO RESERVE R 0 ( R113 ) - shortfall To be financed through reserve R’000 CHANGES IN WORKING CAPITAL R1 088

9 EMPLOYMENT OF CAPITALCAPITAL EMPLOYEDR74 139

10 Indicator / Ratio2008/092007/08 Net Profit % (Net Profit ÷ Sales x 100) 12,07%13,18% Return on Assets (Net Income ÷ Total Assets x 100) 3,24%3,55% Return on Equity (Net Income ÷ Equity x 100) 5,47%6,16% Current Ratio (Current Assets ÷ Current Liabilities) 4,326,18 Debtors Days (Water Consumers) (Debtors ÷ Sales x 365) 73 days65 days Debt to Assets (Total Debt ÷ Total Assets x 100) 41%42% Cost of Capital (Interest paid ÷ Total Debt x 100) 0% Debt to Equity (Total Debt ÷ Total Equity) 69%74% Asset turnover (times / year) (Sales ÷ Total Assets) 0,27 x CAPEX R4 milR3,6 mil

11 BULK WATER SALES : VOLUME BULK WATER SALES : R (2,1%)(0,6%) 4,3% 7,1%

2008/2009 R 2, / /2007 R 2,63 R 2,47 6,5% 7,7%

TOTAL: R R’000 RESERVE FOR INFRASTRUCTURE REFURBISHMENT : R18,8 MILLION 5 YEAR INFRASTRUCTURE REFURBISHMENT PROGRAMME R45 MILLION

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 Graphic presentation of tariffs  Principles of tariff structure  Process 16

17 Availability Fee: Caledon – R / per month VAT excluded Heidelberg/Slangrivier – R / per month Witsand – R / per month PER HOUSEHOLD PER MONTH (VAT excluded)

 Availability fee of 30% of allocation.  Sliding scale tariff – the higher the water use, the higher the unit cost of the tariff.  The use on the sliding scale is based on the number of households as supplied by and agreed with the municipality.  The tariff structure supports WC/DU. A too high choice of allocation by the Municipality will result in a higher unit cost if the consumption is low. The lower the consumption, the lower the unit cost.  The effective cost of water and the water tariff is therefore in the hands of the Municipality – it requires careful and sound planning and management from their side.  At the same time Overberg Water has much more clarity and lower risk. 18

 Prescribed Process  Consultation Process  Response from National Treasury & Salga  Viability as result of tariff proposal  Impact on end users 19