About our Report - Rand Water Reports/2012-2013 Annual...About our Report Rand Water’s Integrated Annual Report for the period 1 July 2012 to 30 June 2013 has progressed in the three

About our Report

Rand Water’s Integrated Annual Report for the period 1 July 2012 to 30 June 2013 has progressed in the three year history of our integrated reporting journey. We have incorporated a number of compliance-related reporting expectations, most notably the King Report on Corporate Governance in SA, 2009 (King III, or ‘the Code’) which became effective as of 2010. Organisations reporting on their annual performance are called upon to ‘apply or explain’ the recommendations or principles outlined within the Code. Whilst the Code does not definitively ‘demand’ compliance, it instead recommends that organisations apply its principles. In this Integrated Annual Report we have attempted to follow the recommendations. Condensed into nine separate chapters, the Code requires organisations like Rand Water to reflect their performance against the following elements:

Ethical leadership and corporate citizenship

Boards and directors

. Audit committees

The governance of risk

The governance of information technology

Compliance with legislation, rules, codes and standards

Internal audit

Governing stakeholder relationships

. Integrated reporting and disclosure

This Integrated Annual Report is our primary report to our Shareholder and stakeholders. It covers our non-financial, financial and operational performance and prospects in relation to our strategic objectives. The Report aims to provide our Shareholder and stakeholders with the measure to assess Rand Water’s ability to create and sustain value in the short, medium and long term. Over-and-above the recommendation of the Code, this Report also includes references to our divisional units and their key functions.

An electronic version of this Integrated Annual Report is available on our website, www.randwater.co.za, or on request from the Rand Water Customer Service Centre on 0860 10 10 60, email: [email protected]

Reporting frameworks

We have throughout this process also remained mindful of the Public Finance Management Act, 1999 (Act 1 of 1999) as amended, and its references to annual reporting. The guidelines and criteria for good reporting, monitoring and evaluation systems, and service delivery indicators recommended by National Treasury have been noted.

Our Integrated Annual Report conforms to the requirements of local and international statutory frameworks. Although not absolutely mentioned within the principles found within King III, the Global Reporting Initiative (GRI) G3 Guidelines remain a recommended source of guidance for sustainability reporting. The Guidelines are referenced not only as an emerging transparency trend throughout the world, but also as a mechanism for identifying data that may be of material benefit for organisations to manage and report on.

A detailed GRI table, providing responses to the appropriate GRI G3 criteria can be found just before our financial statements in this Report.

This Integrated Annual Report has been approved by the Board of Rand Water and has been signed on their behalf by the Chairperson, Adv Mosotho Petlane and the Chief Executive, Mr Percy Sechemane.

1rand water integrated annual report 2012-13

2

Rand Water prides itself on the important role we play in the economic heartland of South Africa. Our current record indicates that we supply more than 12 million people with world-class water. We continue to meet nationally accredited standards on water quality, namely the SANS 241: 2005.

It is this experience and excellence that Rand Water intends to provide to other parts of the country, most notably toward the resolution of the challenges that face local authorities in adjacent provinces. We are acutely aware of the necessity to play an increased role within the water sector. A pivotal part of Rand Water’s Strategy is the pursuit of growth within the mandate given to us by the Water Services Act.

rand water integrated annual report 2012-132

The Portfolio Integrating Committee (PIC)

provides the Board of Rand Water with assurance that it has implemented and monitored the group’s risk management plan

and that this is integrated into day-to-day activities. Management monitors and implements internal controls through various

processes.

Internal Audit

which is overseen by our Group Governance Portfolio, provides an assessment of the effectiveness of Rand Water’s system of

internal controls and risk management.

Our external auditors

Nexia SAB&T, expresses an opinion on the fair presentation of our consolidated annual financial statements.

The Board of Rand Water

is responsible for ensuring that the combined assurance model introduced by the King III Code is applied, to provide a co-

ordinated approach to all assurance activities. The Board is also responsible for ensuring that the combined assurance received,

is appropriate to address all the significant risks facing the organisation and for monitoring the key relationships between Rand

Water and its stakeholders.

Rand Water follows a combined assurance model, which optimises the assurances obtained from Management (PIC), Internal and External Auditors, as well as our Board of Directors.

PIC

External Audit

Internal Audit

Board


“Our Regional Bulk Infrastructure program at municipal level is largely being implemented by the Water Boards on behalf of the department. They also continue to provide assistance for municipalities to comply with the Blue/Green Drop certification thus improving the standard of their drinking water and effluent quality.

Following a cabinet decision in 2012, I appointed RAND WATeR as Implementing Agent for the Sedibeng Regional Sewer Scheme and we are at an advanced stage with the finalisation of the Implementation Protocol. The scheme will cover the Municipalities of Sedibeng, emfuleni, Lesedi, City of Jo’Burg and Mid-Vaal. This project will resolve many of the pollution problems experienced in the Vaal River upstream of the Vaal Barrage. The project is scheduled for

completion by June 2017 at an estimated cost of R2.42 billion.”Minister of Water and environmental Affairs, Hon. edna Molewa, Budget Vote Address, National Assembly, 21 May 2013.

We have the people, the technology, the experience and the ability to grow our business significantly into the future.


Our customer base includes metropolitan municipalities, local municipalities, mines and industries. We have an

internationally acknowledged reputation for supplying water of good quality that ranks among the best in the

world.

Our geographical expansion has seen Rand Water providing water and sanitation services in Mpumalanga,

Free State and the North West provinces. Conscious of the advantage we hold with respect to innovation and

technological leadership, we are now actively pursuing new markets in this arena. Our view is that the bulk

sanitation market requires regional bulk schemes of which Rand Water has experience in establishing and

maintaining.

Our extensive pipeline network, reservoirs and pumping stations can be confidently utilised with regard to water

that is purified from acid mine water. Given the opportunity, we are able to demonstrate our ability to purify acid

mine water. The Brugspruit Plant in Mpumalanga is an example of our ability to turn around a situation which was

a health hazard to surrounding communities.

With respect to expansion on the continent, we are pursuing advantages that exist in new markets in Africa.

We have been closely following the bilateral and regional trade agreements that the South African government

has entered into with other African governments, and we intend to take full advantage of these arrangements by

working closely with national government departments, in particular, the Department of Water Affairs.

Given these growth opportunities it is important that we remain ready to timeously, efficiently and effectively

leverage these new market opportunities. We have the people, the technology, the experience and the ability to

grow our business significantly into the future.

at all times, we remain conscious of the critical role we play in the economic heartland of South Africa


6 rand water integrated annual report 2012-13

01 02introduction strategic

performance

contents

Inside front cover

3. About our Report

4. Assurance

5. Who we Are

8. Chairperson’s Foreword

12. Members of our Board

14. Board profiles

16. Chief Executive’s Review

20. Our Portfolio Integrating Committee

22. Vision, Mission and Strategic Objectives

24. Our Business Model

27. Self Appraisal

29. Our National Presence

30. Our Key Relationships

32. Chief Financial Officer’s Review

References to the year under review, or the financial

year in this Integrated Annual Report refers to the period

1 July 2012 to 30 June 2013. managing our

environmental footprint

page 64

occupational, health, safety and quality

page 58

managing our strategic assets

page 71


growing the water sector

page 125

financial reporting and disclosure

03 04 05corporate governance and risk

operating performance

governing stakeholder relations

prioritising people

page 112

the role of chemicals in our integrated value

chain

page 82

36. Our Top 10 Risks

38. Summarised Corporate Governance Report

49. Group Governance

54. IT Governance

56. Supply Chain Management

58. SHEQ Report

64. Environmental Management Report

71. Managing our Strategic Assetrs

82. Water Quality

97. Sector Growth and Development

112. Strategic Human Capital

125. Rand Water Academy

130. Marketing and Stakeholder Relations

132. Corporate Communications

134. Strategic Partnerships

135. Rand Water Foundation

Consolidated Annual Financial Statements

06

accelerating our growth

page 97


Adv Mosotho Petlane, Chairperson

In this, our third year of integrated reporting, Rand Water is continuing to tell our “own story”

We are mindful that our annual reports need to look ahead as well as back.

We are acutely conscious of our responsibilities to our Shareholder and our obligations to our stakeholders, individually and collectively.

We understand that doing business ethically and in a responsible manner will not only contribute to the short-term profitability of our business, but will also ensure its long-term survival.

adv mosotho petlane


Dear Rand Water Stakeholder

I am pleased to present the foreword for our 2012-13 Integrated Annual Report for another successful

year for Rand Water.

At the end of May 2013, the chairman of the International Integrated Reporting Council, Professor

Mervyn King SC, spoke to an audience of financial officers in Sydney, Australia on why corporate

reporting has to change. King says that whilst it is important for organisations to report on how wealth

is created, it is sometimes compromised by intangible things not contained in the financial reports.

We are mindful that our annual reports need to look ahead as well as back; and that by producing

integrated reports it is altering the thinking of how we produce them – thereby ensuring that all silos

are smashed.

Good Corporate Citizenship

In this, our third year of integrated reporting, Rand Water is continuing to tell our “own story”, herein

detailing those factors that influence our success as well as the areas where our challenges lie.

The premise of King III is that there are expectations for organisations like ourselves to operate as

good corporate citizens, due in part to the influence we have on the lives of our stakeholders and

on the environment. We remain acutely conscious of our responsibilities to our Shareholder and our

obligations to our stakeholders, individually and collectively. The Department of Water Affairs has

continued to afford us the legislative and professional support required to sustain our operations and

for maintaining our licenses to operate.

A Triple Bottom Line approach

Rand Water operates within the broader South African society and its natural environment. What we

can and cannot do, in terms of its strategy, is not only constrained by legislation, government policies

and regulatory requirements, but also by what is considered ethical and in accordance with the

expectations of stakeholder, environmental and societal standards.

This Report indeed shows how our organisational strategy demonstrates a sound understanding of social and environmental responsibility, sustainability, stakeholder engagement and the Triple Bottom Line.

We understand that doing business ethically and in a responsible manner will not only contribute to

the short-term profitability of our business, but will also ensure its long-term survival. The development

of corporate governance over recent years has given prominence to the need for businesses like ours

to behave in a responsible and ethical manner.

Regular readers of our reports would have observed the shift in reporting emphasis from a mainly

operational and financial focus of the past, to a wider and more inclusive approach to our doing

business in the future. This resulted in a shift from the single bottom line (that is, profits only) to a triple

bottom line that embraces the economic, environmental and social aspects of Rand Water’s activities.

This is taken further in our reporting where strategy, risk, performance and sustainability have become

inseparable and have resulted in the requirement for integrated reporting, which deals with our

economic, environmental, social and governance obligations.

110 Year Anniversary

This year, we mark the historic occasion of Rand Water’s 110

year anniversary. Our success over more than a century reflects

the strength of our mission, our people, our values and our

corporate culture.

Our founding fathers would be amazed by how far we have come, and possibly excited about the opportunities that lie ahead.

Nothing is more central to delivering on our mission than Rand

Water’s people. Our Board Members, Executive, managers

and officials all bring our values to life every day as they serve

our Shareholder and stakeholders. We respect individuals,

care for our customers and the communities they serve, and we

strive for excellence in all we do.

We have imprinted our values firmly in our work; Excellence,

Integrity, Spirit of Partnership, Equity, Caring - simple words,

but strong in how they guide us in serving each other and our

stakeholders. Those values also guide our commitment to work

with our Shareholder so that South African communities can live

better. I am proud of how much progress we have made in our

service to South Africa.

Global Water Resource Management

Water is one of the most basic human needs. With impacts

on agriculture, education, energy, health, gender equity and

livelihood, water management underlies the world’s most

basic development challenges. We are aware that water is

under unprecedented pressures as growing populations and

economies demand more of it.

Practically every development challenge of the 21st century – food security, managing rapid urbanisation,

energy security, environmental protection, adapting to climate change – requires urgent attention to water resources management.

Yet already, groundwater is being depleted faster than it is

being replenished and worsening water quality degrades

the environment and adds to costs. The pressures on water

resources are expected to worsen because of climate change.

There is ample evidence that climate change will increase

hydrologic variability, resulting in extreme weather events such

as droughts, floods, and major storms. It will continue to have a

profound impact on economies, health, lives, and livelihoods.

The World Bank has placed Water Resources Management at

the centre of its efforts to help countries adapt to and mitigate

the effects of climate change. It also seeks to ensure that water

issues are effectively addressed in related sectors, such as

agriculture, disaster risk management, energy, and health.

Rand Water must remain conscious of these matters at all times.

South African Water Policy Review

The Honourable Minister Edna Molewa in her budget address

this year announced that South Africa needed to streamline our

policy and legislation both with regard to water services and

water resources management to meet the growing demands

for water and thus achieve the goals of a developmental state.

In addition to this she stressed the need to address issues of

equity and redistribution in water allocation and other legacy

implications which advantaged certain categories of people

and sectors at the expense of the rest of the population.

South Africa’s water allocation reform programme is geared

towards the achievement of this objective and will be greatly

served by a tightened policy and legislative environment as

we envisage in this regard.

We agree that a review of the country’s water policy will realistically identify what has and what has not worked in the last two decades of our democratic government.


strat

egic

per

form

ance

We must do this so that we are able to take decisions on

what needs to be refined and what needs strengthening in the

policy.The Department also aims to finalise the policy review

process which will inform the process to amend the National

Water Act and Water Services Act and may even lead to the

combination of these two acts with the aim of strengthening

the capacity of the State to deliver on its mandate.

The Minister says that this re-assessment will deal with issues

like removing obstacles for greater equity in water resource

allocation, water governance such as the appointment process

of the governing boards of water institutions, oversight over

the institutions, improved management of our water resources

and new concepts such water off-setting, revised mechanisms

for dealing with appeals and disputes, among others.

Chief Executive

During the year, the Board of Rand Water extended the contract

of Chief Executive Percy Sechemane for another five years, to

September 2018. Under his tenure, Rand Water has consistently

met its target of ensuring that customers get the best quality water

services. Since taking the helm of Africa’s largest water utility on

1 September 2008, Mr Sechemane has overseen significant

expansion at Rand Water. This includes growth in the group’s

nett income generation market, service offering as well as

capital expenditure programme. He has also led a drive towards

greater efficiency and enhanced governance, while maintaining

the utility’s reputation for its exceptional water quality.

Rand Water now offers bulk sanitation services, in line with

the requirements of the Water Services Act and in response

to the need to reduce the contamination of raw water and

support municipalities in their drive to attain Blue Drop water

quality certification.The utility has consistently delivered on

its development mandate by extending services to more and

more people in South Africa, as well as beyond the Republic’s

borders. It now supplies more than 12 million people with

world-class water.

Since taking over as Chief Executive, the group has created

the Rand Water Academy, to provide training within the water

and sanitation sector to develop the skills needed not only by

Rand Water, but by various municipalities. Under his watch,

Rand Water has also launched an extensive capital investment

programme designed to meet demand projections for water

within Rand Water’s area of supply and to replace ageing

infrastructure. To help fund this, in late 2010 the group launched

a R5 billion domestic medium-term note programme. The group

has done well to secure an investment grade rating from major

credit ratings agencies, including Fitch and Standard & Poor’s.

Acknowledgements

I would like to express my appreciation to our Shareholder

for the guidance and strategic direction provided; and to all

our stakeholders for their confidence in Rand Water during

the past year.

On behalf of the Board, I wish to extend my sincere

appreciation and thanks to all the men and women of

Rand Water for their commitment and dedication to the

organisation. Our Minister, the Honourable Edna Molewa

is passionate about the water sector, and is a source of

guidance and inspirational leadership. I acknowledge her

strategic contribution to our work. To the Chief Executive

and his Executive Team, I acknowledge their hard work and

leadership.

Adv Mosotho PetlaneChairperson

rand water integrated annual report 2012-13 11


Mr Percy Sechemane

Chief Executive

Ms Thembisile

Nwedamutswu

Deputy Chairperson

Ms Phumelo

Ndumo

Members of the Board of RAND WATER

Adv Mosotho Petlane Chairperson

Mr Mdibanisi

Tsheke

Ms Noluphumzo

Noxaka

Ms Ferhina

Saloojee


Mr Dawood

Coovadia JP

Mr Lefadi

Makibinyane

Ms Sophie Molokoane-Machika

Dr Michael

Ellman

Prof. Frederick A. O.

Otieno

Ms Noluphumzo

Noxaka

Adv Matshidiso

Hashatse


Ms Thembisile Nwedamutswu Deputy Chairperson

Member of the Board of Rand Water as from: 1 April 2009Academic qualifications: Policy Studies (Masters), Adv Diploma in Accounting, Dip Business Admin, Youth Development Certificate, Training of Trainers Cert, Organ-isation and Strategic Management Certificate

Ms Nwedamutswu is the Chief Executive of the Independent Development Trust. She was previously Deputy Director for Integrated Development and Poverty Relief at the Department of Social Development. She has experience in social development, and has occupied senior positions in the public sector. She is a former member of the Independent Development Trust and the Peoples’ Housing Trust.

Board Profiles

Adv Mosotho Petlane Chairperson

Member of the Board of Rand Water as from: 1 June 2002Academic qualifications: BA, LLB, Postgraduate Diploma in Business Administration, MBA

Adv Petlane is an Executive Director at the Sedibeng District Municipality, and serves as a Commissioner with the General Public Service Sector Bargaining Council (GPSSBC). He is also the Chairperson of the Vaal University of Technology Foundation.

Mr Dawood Coovadia JP

Member of the Board of Rand Water as from: 1 April 2005Academic qualifications: BCompt (Hons), BCompt, CA (SA), MIBA, CMC, FIMC, FIAC,FCIS, FIIASA, GIA (SA), CAT (UK), M Inst D

Mr Coovadia is a Chartered Accountant in private practice under the style, Coovadia Associates. He is also an Internal Auditor, Risk Analyst, Corporate Governance and Management Consultant. Mr Coovadia has over 25 years experience in Finance, Auditing, Taxation and Strategy. Apart from his professional practice he serves on various boards in the public sector in a non-executive role and is the Chairman of several Audit and Risk Committees, also in the public sector.

Mr Percy Sechemane Chief Executive

Member of the Board of Rand Water as from: 1September 2008Academic qualifications: BCom, MBA

Dinizulu Kumalo Percival Sechemane (Percy) is Rand Water’s Chief Executive. He is a former CEO of Landis & Gyr, and a former COO for Red One. He also held senior positions (i.e. General Manager) in Eskom - Regional Manager for Western Region and the City of Cape Town. During his career, Mr Sechemane always operated in the engineering space. He holds a B.Com and MBA degree.

Dr Michael Ellman

Member of the Board of Rand Water as from: 1 June 2002Academic qualifications: BSc, MSc Chemical Engineering, MBA, PhD

Dr Ellman is a Senior Consultant and Managing Member of Siyadingana Consultants CC, with more than 40 years professional and managerial experience in the mining, chemical, oil and gas, electricity, standards development and water sectors. Dr Ellman serves on the Advisory Board of the Department of Chemical Engineering at the University of Pretoria. He is a former president of the South African National Committee of the International Electro-technical Commission (IEC) in Geneva; and is also a former Chairman of the Electro-technical Sector Board of the SABS, Board Member of SABS

Ms Noluphumzo Noxaka

Member of the Board of Rand Water as from: 1 April 2009Academic qualifications: CA (SA), MBA, BAdmin, BCom. Acc Hons, N Dip Financial Markets and Instruments, H Dip Computer Audit

Ms Noxaka CA (SA) is a business woman with primary interests in the Property and Tex-tile sectors. She also practises as a Consultant providing Finance and Business advisory services. She has extensive years’ experience in Senior Management roles in the Financial Services Industry; in IT Audit, Finance and Strategic Consulting. She also had a tenure within the Entertainment Industry with respon-sibility for the Finance, Human Resources, Pension Fund, Facilities and Administration Portfolios. Ms Noxaka has served on a number of public and private sector boards and audit committees. She presently serves on the board of a private investment company and audit committee of the City of Tshwane Metropolitan Municipality.


Ms Sophie Molokoane-Machika

Member of the Board of Rand Water as from: 12 June 2012. Academic qualifications: Certificate Programme in Municipal Development (CPMD) with Wits Business School, Certificate in Public Administration, Housing Management, Community Education, Method and Cost Estimates at Washington Neighborhood Reinvestment Institute USA; Certificate in Strategic Management at Whitehead Morris Seminar, Certificate in Community Management Development, Policy Formulation, Project Management, Research and Interviewing Skill and Statistics at Khanya College, Certificate in Core Councillor Train the Trainer Programme at UNISA, Certificate in Municipal Development (CPMD) with the Wits Business School. Certificate in Transport Management, Diploma in Public Sector Management

Ms Molokoane-Machika is the former Executive Mayor of the Madibeng Local Municipality. She serves on the INVEST North West Board of Directors.

Mr Lefadi Makibinyane

Member of the Board of Rand Water as from: 1April 2009Academic qualifications: MBL (Investment Banking and International Finance), B.Eng (Hons) in Chemical Engineering, MDP (Project Management), Professional Engineer, Chartered Engineer, MIChemE

Mr Makibinyane is currently a Strategic Executive Director at the City of Tshwane Metropolitan Municipality where he heads the Public Works and Infrastructure Development Department (Water and Sanitation and Energy and Electricity). He has extensive Management, Technical/Engineering and Commercial/Financial experience gained with local and international Blue Chip companies over a 21 year working career.

Mr Mdibanisi Tsheke

Member of the Board of Rand Water as from: 1 June 2002Academic qualifications: National Preliminary Certificate in Business Administration

Mr Tsheke is a former Executive Mayor of the Govan Mbeki Local Municipality. He also served on the Executive Committee of the South African Local Government Association, and as an Executive of SANCO.

Ms Ferhina Saloojee Member of the Board of Rand Water as from: 1 June 2002

Ms Saloojee is a former councillor of the Rustenburg Local Municipality. She has served in numerous leadership roles in local government, as well as in private sector institutions. Ms Saloojee holds directorships in a number of companies, including Halotsal (Pty) Ltd, Bergers Filling Station and Salvest Property Investments CC.

Prof. Frederick A. O. Otieno

Member of the Board of Rand Water as from: 1 April 2005Academic qualifications: PhD (Civil), MBA, MSc, BSc (Civil) (Eng) (Hon), PrEng, FSAICE

Professor Otieno is a professional engineer in South Africa and the United Kingdom. A Fellow of the S A Institute of Civil Engineers and the Water Institute of Southern Africa, he is currently a Professor of Civil Engineering and the Deputy Vice Chancellor: Technology, Innovation and Partnerships, at the Durban University of Technology. He has worked as a Consulting Engineer, researcher and entrepreneur in Civil and Water Engineering and Environmental Management. Professor Otieno has served as president of WISA, and is a non-executive director, and a member of numerous organisations.

Ms Phumelo Ndumo

Member of the Board of Rand Water as from: 1 April 2005Academic qualifications: BCom, MBL, Higher Diploma in Computer Auditing

Ms Ndumo has occupied senior positions with three of South Africa’s major banks, and was also an executive manager for corporate finance and strategy at Metropolitan Retirement Administrators. With competencies in finance, auditing, project management and communications; she also serves as a non-executive director for a number of entities. Ms Ndumo is an author, and is the founding Managing Director of Thuthuka SA.

Adv Matshidiso Hashatse

Member of the Board of Rand Water as from: 1April 2009Academic qualifications: BA Journalism, LLB, LLM

Adv Hashatse is the Director of Equity and Institution Culture at Rhodes University. She was previously the Deputy Dean of Students at Rhodes University. Adv Hashatse has over 20 years experience during which time she has worked in, and serviced clients in Telecommunications, Regulation, Automotive, Mining Industry, Fundamental Human Rights and Gender and Development.

We made good strategic progress by continuing to expand our services beyond our traditional core activity

We stepped up our investment in infrastructure by 18% to R1.75 billion.

We grew revenue by 13.3% to R7.75 billion and increased net income by 28.2%.

Rand Water continues to assist municipalities to improve their Blue Drop and Green Drop status.

percy sechemane



Rand Water performed well in the year to 30 June 2013. Led by our clearly defined strategy as well

as our determination to deliver on our development mandate, we recorded many successes in the

sector which faces a number of key challenges and is clearly critical for life.

Among the group’s achievements were maintaining a reliable service to more than 12 million people in Gauteng and parts of the Mpumalanga, Free State and North West provinces, as well as continuing to supply world-class potable water. We ensured sound corporate governance, recorded an improved financial performance through strict cost management, and invested for the future through increased capital expenditure. We made good strategic progress by continuing to expand our services beyond our traditional core activity of bulk water supply and into bulk wastewater treatment.

Yet the year was not without its challenges, among them the deterioration of the quality of raw water,

encroachment on our pipeline servitudes and large-scale wastage in our customers’ networks, to name

but a few. Inadequate long-term supply contracts and cumbersome supply chain management are

among other obstacles the group is addressing following the recent realignment of our supply chain

management policy and procedures.

Details of our performance against objectives are provided in the board report from page 167 and in

our self-appraisal scorecard on page 27, where we measure our performance in terms of items such

as reliability of supply, customer satisfaction, product quality, health and safety, quality management

systems, occupational safety, health and environment and blue drop certification. Our risk table on

page 36 and 37 provides more on the challenges the business faces, and what we are doing to

mitigate these.

Delivering across the board

In the 2012-13 year, Rand Water supplied an average of 4 106 megalitres (Ml) a day of potable

water to our customers, up from the previous year’s 3 980 Ml and compared to our installed capacity

of over 5 300 ML. Peak day demand was 4 697Ml, compared to 4 677 Ml in 2012. To ensure that

we continue to meet targeted volume growth over the next few years, we have committed capital to

increase our capacity by 600 ML by 2016/17.

We stepped up our investment in infrastructure by 18% to R1.75 billion in the year, using cash generated from operations to fund the bulk of this spending. Among the key projects commissioned in the year was the BG3 raw water pipeline augmentation project to increase the capacity of the raw water supply system from the Vaal Dam to the Zuikerbosch Purification and Pumping Station.

This supplements the BG1 and BG2 pipelines from the Vaal. The project gives us flexibility in the use of the three pipelines, and also increases the capacity of water flowing to Zuikerbosch by 1 200 ML a day.

We grew revenue by 13.3% to R7.75 billion and increased net income by 28.2% to R997 million,

achieving these results by keeping costs tightly in check, and in spite of sharp increases in some key

administered prices.


Expanding our mandate

Our 110th year of operations marked increased levels of

coordination with our Shareholder, the Department of Water

Affairs (DWA), in which we broadened our role to take on

more national responsibilities to assist in the delivery of the

objectives of the government’s National Development Plan.

We will increasingly help municipalities with sanitation, water

demand management and acid mine drainage solutions.

This will be done within the context of the National Water Resource Strategy, the second edition of which was released in June 2013. The Strategy, dubbed NWRS2, aims to ensure that national water resources are protected, used, developed, conserved, managed and controlled in an efficient and sustainable manner in line with South Africa’s development priorities.

The NWRS2 makes clear that South Africa is a water-stressed

country and is facing a number of water challenges, including

security of supply, environmental degradation and resource

pollution, as well as the inefficient use of water. Among

other goals, the strategy submits that water conservation and

demand management should be prioritised.

Findings published by the Water Research Commission in 2013 indicate that water loss in South Africa is at unacceptably high levels: so-called ‘non-revenue’ water for urban supply systems over the past six years have averaged more than a third. It says efforts to address these water losses must be intensified.

Assisting municipalities with water demand management

In this regard, Rand Water has stepped up its work to

assist municipalities to reduce losses as well as with other

water demand management initiatives, including efficiency

campaigns. Given the high level of leakages in our main

customer’s networks, a significant amount of our sales volumes

are going to waste. We need to work in partnership with our

customers to reduce this waste and so reduce demand.

During the year under review, Rand Water received four

Ministerial Directives to become an implementing agent to

various water boards and municipalities. These relate to the

Sedibeng Regional Sewer Scheme south of Johannesburg; the

Botshelo Water Board in the North West province; the Ermelo

Water Supply Emergency Project in Mpumalanga; and, in the

North West, the project to investigate and replace the pipeline

from the Molopo Eye Spring to Mafikeng.

The go-ahead for Rand Water to pursue these projects was

part of the DWA’s decision to disestablish three water boards

in the year, reducing their number to 9 after considering each

one’s financial viability and capacity to deliver.

Ensuring the development of sufficient skills is a key focus for

our group. In the year, the Rand Water Academy continued to

create capacity and capability to deliver specific water-related

training to alleviate the sector’s critical skills gap and ensure

that the expanding Rand Water has the resources it requires.

Establishment of an Innovation Hub

The diagnostic report of the National Planning Commission,

released in 2011 clearly articulates south africa’s achievements

and shortcomings since 1994. The water sector has seen the

policy shift from a focus on infrastructure development to a

more holistic water resource management approach that

addresses both water demand and supply. Key challenges

in terms of protection of water resources, water quality, water

demand management and water reuse can be viewed as

opportunities for Rand Water to develop solutions to address

these challenges.

Given these challenges as well as Rand Water’s expansion

into new markets, the ability to innovate becomes increasingly


Percy Sechemane BCom, MBAChief Executive

important. We will report on our progress with the Innovation

Hub in our next Integrated Annual Report.

Looking ahead and appreciation

Despite the many challenges in the sector, Rand Water is

determined to deliver. In the year ahead we will continue to

meet key water quality standards, provide a continuous and

reliable supply of world-class water and fulfil our clear capex

targets.

As part of the Institutional Reform and Realignment (IRR),

the Minister of Water and Environmental Affairs has issued

a cirective to extend the area of operation of Rand Water

to include the upper Vaal area, parts of Mpumalanga and

directed Rand Water to take over the area of operation of

Bushbuckridge Water. The IRR makes provision for an increase

in scope of service provided beyond bulk water services, and

includes regional water resource management as well. In the

coming year, we will be working with the Shareholder to create

a regional water utility that is envisaged to manage regional

water infrastructure (water resources and water services) and

provide support to municipalities through secondary activities.

Working closely with our Shareholder, we will expand our

geographic footprint to grow our business and further social

and economic development. By forging partnerships with

local municipalities, we will work to resolve the challenges that

many of them face.

The Shareholder has identified 23 district municipalities as part

of the Interim Intermediate Water Programme Strategy which

we believe we can assist and are committed to, and intend to

engage with a targeted number of these in the year ahead.

In line with the NWRS2 strategy, we will investigate and

implement innovative solutions to contribute to more effective

and efficient water management. We will also continue to

work to improve our internal processes and, ultimately, service

delivery. We plan to set up the Rand Water Innovation Hub in

the new financial year.

Acknowledgements

I would like to express my sincere appreciation to the

Chairperson, Members of the Board of Rand Water and the

Director General of the Department of Water Affairs, various

officials of the Department of Water Affairs, for their guidance,

strategic direction and oversight over the year under review.

And a big thank you to my fellow PIC members and staff

for their unquestionable dedication and support in the roll-

out of our strategy on a continuous basis driving improved

performance. Finally, I would like to acknowledge all those

individuals and organisatons who contribute to our success.

Our gratitude goes to Rand Water stakeholders, labour unions,

customers, investors, bond holders, financiers who continue to

partner with us, and have demonstrated their confidence in

Rand Water Board and its management over the years and

continue to do so.

Our strategy is clear, we are implementing it and we expect to see the fruits of this work over the next five years. I thank all the men and women of Rand Water for their unfailing commitment to deliver on our common vision and ensure that we remain Africa’s leading water utility.


Our Portfolio Integrating Committee (PIC)

Mr Sipho Mosai

Mr Percy Sechemane Chief Executive

Ms Wayida

Mohamed

Ms Matshidiso

Nyembe

Mr Vusi Kubheka

Ms Fikile Sithole

Dr Fawcett Ngoatje


Dr Fawcett Ngoatje

Group Shared Services Executive

Portfolio Integrating Committee member as from: 1 July 2008

Responsibilities:

• Risk Advisory Services

• Corporate Communications

• IT and Knowledge Management

• Logistic Services

• Marketing and Stakeholder Relations

• Supply Chain Management

• Strategic Programmes

Mr Sipho Mosai

Chief Operating Officer

Portfolio Integrating Committee member as from: 1 April 2009

Responsibilities:

• Operations

• Scientific Services

• Strategic Asset Management

• Sector Growth and Development

Ms Matshidiso Nyembe

Chief Financial Officer

Portfolio Integrating Committee member as from: 18 May 2009

Responsibilities:

• Funding

• Group Treasury

• RW Medical Scheme

• RW Provident Fund

• Financial Control

• Financial Planning

Ms Wayida Mohamed

Strategic Human Resources Executive

Portfolio Integrating Committee member as from: 20 April 2009

Responsibilities:

• Compensation and Information

• Employee Relations

• Organisational Development and Design

• Talent Management

• Rand Water Academy

Mr Vusi Kubheka

Group Strategy Executive

Portfolio Integrating Committee member as from: 1 July 2012

Responsibilities:

• Corporate Planning

• Corporate Research and Development

• Financial and Economic

Planning

Ms Fikile Sithole

Group Governance Executive

Portfolio Integrating Committee member as from: 1 September 2008

Responsibilities:

• Forensic Audit

• Internal Audit

• Legal Services

• Regulatory Services

• Strategic Projects

Mr Percy Sechemane

Chief Executive

Portfolio Integrating Committee member as from: 1 September 2008



Our VisionTo be a provider of sustainable, universally competitive water and sanitation solutions for Africa.

Our Mission

To deliver and supply world class affordable, reliable, and good quality water and related services to all stakeholders through:

• Safe, efficient transport, sustainable and innovative business practices;

• Empowered employees;

• Mutually beneficial strategic relationships; and

• Legislative compliance and best practice

Our Values

Our Values

Integrity

equity

excellence

Caring

Spirit ofPartnership


Our Strategic Objectives

In order to attain our strategic intent, Rand Water has set the following strategic objectives, which will focus and direct the

business activities of the organisation over the planning period.

Each of the Rand Water strategic objectives are underpinned by specific goals, defined key activities and targets. These are

broadly categorised as follows:

• To promote prudent financial management • To achieve optimal investment portfolio performance • To mitigate all financial risk for the Rand Water Group • To ensure that assets are fully utilised • To ensure that tariff is determined accurately from Rand Water’s environment

Maintain Financial Health and Sustainability

• To ensure that Rand Water infrastructure meets current and future demand • To promote growth through new areas of supply• To promote growth through new product streams

Achieve Growth

• To promote and implement initiatives that have a socio-economic development impact • To reduce legal risk and thereby minimise the financial and reputational impact on Rand Water • To improve awareness of Rand Water with external stakeholders • To respond appropriately to Rand Water’s environment

Positively engage Stakeholder Base

• To build integrity within the organisation • To build employee morale and satisfaction • To build internal skills and capacity • To retain employees through an attractive environment • To transform Rand Water’s employee profile to reflect demographics of area of supply • To provide required assurance at board level • To retain Rand Water’s institutional knowledge

Achieve a High Performance Culture

• To ensure compliance to all statutory and regulatory requirements • To promote safety, health, environment and quality (SHEQ) • To increase protection of Rand Water’s assets and personnel • To ensure continuous supply of water to customers • To ensure the quality and reliability of Rand Water assets • To effectively co-ordinate Rand Water’s information and communication technology and knowledge management • To maintain the quality of water • To improve internal processes within the Rand Water Group

Achieve Operational Integrity and Use Best Fit Technology


OUR INTEGRATED BUSINESS MODEL

The following diagram presents a schematic flow of Rand Water’s preferred treatment regime of the process from abstraction to the end consumer.

Flocs settle by reducing the velocity and the turbulence in specially designed tanks, also engineered to reduce sludge.

Slow mixing of the water to assist the suspended particles to grow, forming heavier visible

particles called floc.

Water passes through the filter houses where the

remaining suspended matter is removed by straining the water through rapid gravity sand filter

beds.

Water flows into the carbonation bays where it is stabilised by bubbling carbon

dioxide gas to reduce the pH of the water.

Addition and rapid mixing of chemicals referred to as

coagulants to form settleable flocs. Conventional treatment employs activated silica and

hydrated lime.

Coagulation Flocculation

SedimentationStabilisation Filtration

Raw Water

Water is abstracted from the Vaal Dam to be purified at the Zuikerbosch and Vereeninging

Purification Stations

1 2 3

4 5 6


The water leaving the primary purification works is disinfected

with chlorine to kill any remaining micro-organisms,

bacteria and viruses.

Water is pumped through a pipeline network to

reservoirs for storage and final distribution to customers.

Addition of sodium hypochlorite at the tertiary plants to prevent

bacterial regrowth in the distribution system and to

maintain good water quality.

After secondary disinfection, water is pumped several

kilometers to the tertiary pumping station for further tertiary

disinfection and pumping.

Water is then pumped from the primary disinfection plants, the

Zuikerbosch and Vereeniging plants, and elevated by approximately

200m to the four booster pumping stations, namely Zwartkopjes,

Mapleton, Eikenhof and Palmiet, situated in the southern foothills

of the Witwatersrand.

Once received at the booster pumping stations, chlorine and ammonia are added to form

monochloramine, which protects the water against

bacterial growth.

PrimaryDisinfection

MainPumping

SecondaryDisinfection

Booster Pumping Tertiary Disinfection Reservoir

7 8 9

10 11 12


Self Appraisal In order to ensure that our strategic growth objectives are achieved and built on the solid foundation of our existing business, it is important for us to do a self appraisal of our successes. Our business and functions will continue to operate sustainably, underpinned by sound governance.

Reliability of Supply

Customer Satisfaction Survey

Product Quality

Health and Safety

Quality Management Systems

Occupational Safety, Health & environment

Blue Drop Certification

Rand Water’s supply to our customers is based on the Rand Water General Water Supply Conditions. Central to this is our customer satisfaction obligations. We continued to ensure that the organisation’s reputation among our customers is maintained.

We met all our daily peak demands during the year under review, thus abiding by our Bulk Water Supply Contract agreements.

We continued to monitor the quality of our potable water against the national drinking water standard (SANS 241) and benchmark our performance against the World Health Organisation (WHO) non-organic drinking water quality guidelines. During the year under review, we were consistent in maintaining delivery of drinking water meeting the SANS 241 national drinking water standard.

We continued to participate in, and support all the relevant HIV/Aids programs and initiatives of government. Our site HIV/Aids Committees consist of committed staff, under the guidance of our Strategic Human Capital Portfolio.

The successful maintenance of our ISO 9001:2008 certification during the year under review confirms the maturity level of our Quality Management Systems.

The enforcement of Occupational Safety, Health and Environmental legislation has been embedded within our project management processes, from project-initiation to project-handover.

We set very high standards for ourselves with regard to the supply and quality of potable water. In recognition of our work our Blue Drop Certification awards have increased during the year under review. We also received special recognition for helping municipalities achieve their Blue Drop status.




Our National Presence

Mpumalanga

Govan Mbeki Local Municipality

Thembisile Hani Local Municipality

Victor Khanye (Delmas) Local Municipality

North West

Rustenburg Local Municipality

Royal Bafokeng Nation Local Municipality

Madibeng Local Municipality

Gauteng

City of Johannesburg Metropolitan Council

Ekurhuleni Metropolitan Council

Tshwane Metropolitan Municipality

Emfuleni Local Municipality

Mogale City Local Municipality

Midvaal Local Municipality

Merafong City Local Municipality

Randfontein Local Municipality

Westonaria Local Municipality

Lesedi Local Municipality

Kungwini Local Municipality

Sandspruit Water Association

Free State

Ngwathe Local Municipality

Metsimaholo Local Municipality

LIMPOPO PROVINCe

NORTH WeST PROVINCe

FRee STATe

Bloemfontein

MPUMALANGAJohannesburg

GAUTeNG

NORTHeRN CAPe

Upington

Kimberley

KWAZULU NATAL

Richards Bay

Durban

eASTeRN CAPe

east London

Port elizabethWeSTeRN CAPe

Cape Town

LeSOTHO

SWAZILAND

1 2

3

4


Our Key Relationships

Rand Water recognises the significance of our stakeholders towards the sustainability of our business.

These are:

Our Shareholder

Our Board

Our Customers

Our Investors

Our Employees

Provincial Legislators

The Media

Communities and

Civil Society Organisations

Our Vendors and Suppliers Tertiary

Institutions

Auditor General

STAkEhOldER GROuP hOW WE ENGAGE WITh OuR STAkEhOldER GROuP

Our

Sh

areh

olde

r

The Government of the Republic of South Africa, through the Department of Water Affairs, and duly represented by the Minister of Water and Environmental Affairs, is our sole shareholder. The relationship between Rand Water and its Shareholder is governed by the provisions of the Water Services Act No 108 of 1997.

Our

Bo

ard

The Board of Rand Water is appointed by the Minister of Water Affairs and duly represented by the Department of Water and Environmental Affairs, in accordance with the provisions of the Water Services Act No 108 of 1997. We have a unitary board structure, which consists of a majority of non-executive members and an executive member. The positions of the Chairperson (non-executive) and that of the Chief Executive are segregated.

Our

C

usto

mer

s Our customers include municipalities and the industrial and mining sectors. We interface directly with all our customers, notably through our Regional Account Executives and our Water Forums. We regularly solicit their feedback on our product and services.

Our Key Relationships

NationalTreasury


The

Med

ia

We continue to build on the recommendations made by our Board-approved Media Relations Strategy. We co-operate with both the print and electronic media based in South Africa and abroad, on matters related to our product and services, governance, Foundation projects and brand marketing management.

Com

mun

ities

an

d C

ivil

Soci

ety

Org

anis

atio

ns Through our sponsorship policy, the work of the Rand Water Foundation and our Water Wise community based initiatives, we have garnered an incisive view of the needs and interests of the communities in our area of supply.

Vend

ors

and

Supp

liers We promote the objectives of our Commercial Equity policy and have structures in place to ensure that

our supply chain management process remains fair, transparent, equitable and cost effective.

Tert

iary

In

stitu

tions Our work with tertiary institutions remains a priority for us with respect to attracting young professionals

into the water sector. Rand Water supports Research Chairs at the Universities of Johannesburg and Pretoria.

Aud

itor

Gen

eral

/Tr

easu

ry As a public utility, we are accountable to both the Auditor General and National Treasury. We report regularly on our financial and operational performance to both bodies.

Our

In

vest

ors We keep our investors regularly updated on our financial position and other matters related to our

business. We host roadshows with our investors and engage with the South African media on the release of our annual and interim financial results.

Our

Em

ploy

ees Our employees remain central to our success. We communicate with our employees via weekly

electronic newsletters, a quarterly newsletter and the intranet. Plans are being developed to engage our employees more intensively with regard to the sustainable development of our business.

Prov

inci

al

Legi

slat

ors We have built sound relationships with the provincial authorities within our area of supply.

Our relationships have been largely collaborative, and we are in the process of formalising these relationships by signing Memoranda of Understanding between ourselves and the provincial legislatures.

STAkEhOldER GROuP hOW WE ENGAGE WITh OuR STAkEhOldER GROuP


Determined to play an increasingly national role, we are ploughing back our net income generated into upgrading and expanding infrastructure

We made good progress with our capital investment programme which is designed to meet demand projections.

We will also continue to work closely with our Shareholder on the development of the new national water pricing strategy

We will remain focused on improving our processes and limiting expenses, ultimately keeping consumer costs in check.

matshidiso nyembe



Rand Water produced robust financial results for the year to 30 June 2013, helping to build the solid

foundation required for the group to deliver on its development mandate. The stronger performance will

enable us to achieve our goal of securing water supply to large swathes of South Africans, as well as grow

our bulk sanitation services, well into the future.

Determined to play an increasingly national role, we are ploughing back our net income generated into

upgrading and expanding infrastructure to meet growing demand for this scarce and valuable resource.

The group increased the net income for the year by 28.2% to R997 million on higher sales volumes, greater operational cost efficiencies and as our pursuit of new revenue streams in bulk sanitation and water demand management gained traction.

Revenue increased by 13.3% to R7.75 billion, on an increase of approximately 3% in the volume of water sold, as well as an 11.3% rise in the bulk tariff for potable water charged to our customers (largely local municipalities and, to a much lesser extent, mines and industries).

We continued to benefit from our work to further develop new revenue streams, with the revenue contribution from providing these services – mainly wastewater treatment – rising by more than 74% to R435 million in the year.

Net interest income remained steady at 2012’s R43 million. Capitalised borrowing amounted to R98 million

(2012: R73 million) and is expected to increase in line with the group’s capital investment programme.

Containing costs

Rand Water did well to contain costs in the year, limiting the increase in input costs to 8% after an increase

of more than 24% in 2012. Our single largest input cost, that of raw water, is determined by a government

pricing strategy linked to producer price inflation. In 2013, Rand Water spent more than 10% more on raw

water than in 2012. Of this, 3% can be attributed to volume growth and 7% to the average price increase.

The cost of energy – primarily required to pump water – rose more than 16% to R1.33 billion in 2013.

Total staff costs (which include directors’ fees and salaries and contributions to a defined contribution plan,

as well as other staff costs) rose some 15% to R1.46 billion. Employee numbers increased by 2% to 3 214.

In a year marked by widespread labour unrest across South Africa, we awarded a general salary increase

of 7.5%.

Chemical costs declined by 30%, an anomaly resulting from the fact that some of our lime plants were out of commission for scheduled maintenance in the year. In the new financial year, chemical costs are expected to increase, likely stabilising at previous levels as these lime plants come back on stream.

Depreciation and amortisation for the year was R247 million, up from R212 million in 2012. The trend of increasing depreciation charges is expected to continue as we keep investing in new infrastructure over the next five years.

Maintaining stable cash generation from operations

Net cash from operating activities was little changed at R1.18 billion. At year-end, Rand Water had

cash reserves of R863.9 million, down from nearly R1.33 billion in 2012, as we used more cash to fund

investing activities.

Advancing our capital expenditure (“capex”) programme

We made good progress with our capital investment

programme which is designed to meet demand projections

for water within Rand Water’s area of supply and to replace

ageing infrastructure. In the year, we increased capital

expenditure by more than 18% to almost R1.75 billion,

including borrowing costs of R98 million. This was directed to

the augmentation and rehabilitation of infrastructure, and led

to an increase in the value of the group’s property, plant and

equipment to R9.9 billion from R8.4 billion.

It is Rand Water’s policy to fund its capex programme through internal resources, i.e. accumulated profits and cash reserves, after providing for the group’s liquidity requirements. Additional funding requirements are met through the raising of funds in the debt capital market and other external sources. In the year, R1.2 billion of the capex funding was sourced internally, with the rest provided from the debt capital market. Specifically, in June 2012, we raised R506 million in a tap issue of our RW21 bond and another tap issuance of R500 million in June 2013 due 2021, bringing the nominal value of that bond to R1.48 billion.

At year-end, Rand Water’s debt-to-equity level was 22%

(2012: 20%), which is below our target of 50%, reflecting

the significant capacity still available to fund future spending.

After the expiry in the year of the group’s R3.9 billion approved

borrowing limit, we recently received approval from our

Shareholder and the National Treasury of our new funding

plan as well as the required borrowing limit of R6.3 billion for

core business requirements for the five years to 2018.

We are pleased to report that we maintained our investment

grade rating from major credit ratings agencies in the year,

including Fitch and Standard & Poor’s. In April, Standard &

Poor’s Ratings Services reaffirmed Rand Water’s overall rating

of ‘foreign currency BBB/Negative/A-2; local currency A-/

Negative/A-2’. This is the same as that of our Shareholder,

the Republic of South Africa. However, on a stand-alone

basis, S&P’s credit profile for Rand Water was ‘bbb+’, better

than its shareholder.

The Rand Water Provident Fund

The Rand Water Provident Fund is administered in terms

of S13B of the Pension Funds Act of South Africa by Rand

Water providing benefit administration, and AcSis Limited

Strategic Investment provides investment administration

services. Membership to the Fund is restricted to employees.

The Fund is governed by a Board of Trustees to maintain its

independence. In the year under review, the Board of Trustees

held 3 meetings. In addition, 2 (two) audit committee and 2

(two) investment committee meetings were held.

Assets under management by the Fund increased to more

than R1.6 billion in the year from R1 billion a year earlier.

The Fund’s primary investment strategy is inflation plus 3-5%

over the recommended minimum investment period of five

years. This strategy has returned 12.4% per annum over the

last 5 years, outperforming its target of 9.9%. In the 2012-13

financial year, this strategy returned 25.5%.

The inflation plus 5-7% strategy over the recommended

minimum investment period of seven years has returned

12.9% per annum over the last 7 years, outperforming its

target of 11.9%. In the 2012-13 financial year, this strategy

returned 29.0%.

Members within five years of retirement have an option to

use the inflation-matching investment strategy to preserve their

capital. In the 2012-13 financial year, this strategy returned

8.2%, outperforming the inflation benchmark of 5.6%.

The National Treasury plans to make changes to the retirement

fund industry as well as to taxation laws which affect retirement

funds. The Rand Water Provident Fund is keeping abreast

of developments in this regard, and their likely impact on its

members.


The Rand Water Medical Scheme (the “Scheme”)

The Rand Water Medical Scheme is self-administered and

membership is restricted to employees and former retired

employees of Rand Water and their dependents. To maintain its

independence, the Scheme is governed by a Board of Trustees,

comprising of 5 (five) member elected Trustees and 5 (five) Trustees

elected by the Employer. The Scheme takes cognisance of the

Code of Corporate Governence standards as are applicable

to medical schemes and Trustees. In the year under review, the

Board of Trustees held 3 meetings, to address a range of key

issues and ensure that discussions of items of policy, strategy

and performance is critical, informed and constructive. The

Baord of Trustees (BOT) has established two sub-committees to

assit the BOT to discharge of its responsibilities, being the Audit

and Risk Comittee and Pricing and Investment Committees, both

of which have clearly defined Terms of Reference. The Audit

and Risk Committee, as a legislated committee, is led by an

Independent Chairperson.

During the year under review, the scheme reviewed its

investment strategy, and has decided to pursue an active asset

management pholosophy of the scheme investments, within

regulatory constraints. To date, the counterparty investment

profile has been broadened to enhance the income yield. The

Board of Trustees also reveiwed the contracts of the designated

service providers of the Scheme. The Scheme’s solvency ratio is

about 75%, far exceeding the statutory minimum of 25%, and

the total number of lives covered is about 8 100.

The Rand Water Medical Scheme is closely monitoring

developments relating to the introduction of national health

insurance in South Africa, as well as amendments to the Medical

Scheme’s Bill.

Looking forward

In the year ahead we expect to continue to benefit from the

implementation of our growth strategy, which includes the

provision of more bulk sanitation services and water services

provided beyond our traditional area of supply, in line iwth the

directive issued by the Minister of Water and Environmental

Affairs on Institutional Realignment and Reform.

By implementing the ministerial directives received in the year

under review, we expect revenue streams from these new

services to grow strongly. These new projects are expected to

support our bottom line, but will also require additional capital

investments the scope of which we will investigate thoroughly

before investing. As required by the Water Services Act, these

activities as well as the funding thereof will be ringfenced, and

appropriate project and structured finance solutions will be

employed. The borrowing limit for these activities will have to

be submitted to the Shareholder and Minister of Finance on a

case by case basis for approval.

We will continue to roll out our core capital expenditure

programme, and will again approach the debt capital market,

for funding, as required.

Encouraged by the cost efficiencies obtained in the 2012-

13 financial year, we will remain focused on improving our

processes and limiting expenses, ultimately keeping consumer

costs in check.

We will also continue to work closely with our Shareholder

on the development of the new national water pricing strategy

and funding model for the water sector to ensure predictable

and stable charges for our key resource. It is hoped that the

new raw water pricing strategy as well as the establishment of

an economic regulator in the water sector will be finalised for

implementation in the 2015-16 financial year.

Matshidiso Nyembe CA (SA)

Chief Financial Officer

Glenvista

October 2013



OuR TOP 10 RISkS

The Board of Rand Water continuously considers the strategic risks facing the organisation. These risks are identified through the board approved enterprise Wide Risk Management process. The following are the Strategic Risks which are considered to be requiring focus from Rand Water management and each risk is aligned to the Rand Water strategic objective that it may have an impact on, should it materialise.

RISK No.

RISK NAMe STRATeGIC OBJeCTIVe SOMe OF THe eXISITING CONTROLS

1. Deterioration in raw water quality

Achieve operational integrity and use of best fit technology

1. Identified sampling points are sampled, analysed and reported on monthly (raw water monitoring target set at 95%).

2. Functional Quarterly Catchment Forum meetings to discuss pollution. Raw water quality information disseminated weekly/quarterly and posted to the Reservoir website.

3. Quality Information Management Decision Support System (QIMDSS) in place and complemented by on-line raw water quality monitoring (OBSERVATOR System).

4. Maintenance programme to remove invasive alien plant species in Vaal Barrage Reservoir.

5. Environmental Awareness educational programs developed to educate communities on water practices.

2. encroachment over pipeline servitudes and properties


1. A Rand Water Encroachment Committee has been established to address the encroachment issues.

3. existing long term supply contracts (LT)


1. Conducted due diligences on suppliers to identify alternatives.

2. Conduct robust market research to obtain international goods catalogues.

3. Collaboration with state owned enterprises (information/database sharing).

4. Rotation of buyers to limit collusion.

5. Vetting of suppliers on database (goods supplied on time at reasonable price).

6. Utilisation of service level agreements with vigorous monitoring of performance.

7. Continuous discussion with suppliers and service providers (on-going communication).

Risk Description Root Cause existing Controls


RISK No.

RISK NAMe STRATeGIC OBJeCTIVe SOMe OF THe eXISITING CONTROLS

4. Optimisation of Critical installations


1. A programme to determine the urgency of all critical projects in order to reprioritise projects initiated.

5. Non-revenue water in the municipal system

Maintain financial health and sustainability

1. 5 year capital infrastructure program of R9,9 billion, was designed to meet demand for water within our area of supply.

2. Interdepartmental task team was established to promote water wise education and awareness programs.

3. Credit control applied to non-payment from defaulting municipalities/clients.

4. Usage of unmarked Rand Water vehicles

6. Supply chain management/ process


1. The tender process is a monitoring mechanism which has been averaged to 20 weeks and it’s a score card item for both the Supply Chain and SAM division.

2. Regular audits done by SABS, Internal and External Auditors.

3. Disciplinary processes for transgressors of SCM policies and procedures enforced.

4. Approved and implemented Supply Chain Management Policy.

5. Rotation of buyers.

7. Legal compliance Achieve operational integrity and use of best fit technology

1. Business impact analysis undertaken by Group Legal Services on new and applicable legislation.

8. Capacity to supply / inability to supply potable water to clients


1. A Service level agreement with Eskom specifying demand requirements is in place . All key sites have got premium supplies and/or are on ring feed systems.

2. Submitted a request to DWA to increase the existing raw water allocation.

9. Price volatility Maintain Financial health and Sustainability

1. A predetermined model exists to capture and demonstrate the costs to downstream customers

2. Continuous engagement with stakeholders to sensitize them on the impact of raw water tariffs.

3. Continuous monitoring of cost to reduce cost below CPI.

10. Contractor management


1. Vetting of all contracts is done by Group Legal Services to ensure legal compliance with contracting guidelines.

2. Compliance is being diligently monitored monthly and reports on compliance or non-compliance are submitted to the Chief Operating Officer (COO) monthly

Risk Description Root Cause existing Controls

SUMMARISeD CORPORATe GOVeRNANCe RePORT

Rand Water (“RW”) is a State Owned entity established in terms of Section 84 of the Water Services Act No.108 of 1997 (“the Act”). The Government of the Republic of South Africa, through the Department of Water Affairs (“DWA”), duly represented by the Minister, is the sole Shareholder of RandWater.Rand Water operates in terms of the mandate espoused in the

Act. The main objectives, duties and the powers of the Board

of Rand Water are regulated by the Act.

Rand Water is listed as a schedule 3b entity in terms of

the Public Finance Management Act No. 1 of 1999 (“the

PFMA”), it upholds and promotes the principles of sound

financial management. In addition, Rand Water subscribes to

the highest standard of corporate governance.

RANd WATER GOVERNANCE lANdSCAPE

Rand Water’s governance landscape has evolved through the

years since the introduction of the King Reports I, II and the

current King III Report. The Board of Rand Water ensures that

Rand Water operates within the frame of good governance

whilst pursuing its business objectives within and beyond the

borders of South Africa. The Board is ultimately responsible for

ensuring that governance standards are met and it is assisted

by Executive Management to instil a culture of compliance and

good governance throughout the Rand Water Group. This is

emphasised by sound and visible leadership characterised

by the ethical values of responsibility, accountability, fairness

and transparency. Sound corporate governance structures

and processes are being applied and are considerably

essential to delivering sustainable growth in the interest of all

stakeholders.

kING III APPlICATION

Since the adoption of the King Report on Corporate

Governance (“King III”) by the Board in 2010, Rand Water

had the opportunity to strengthen its governance structures

and it is a continuous effort between management and the

Board to ensure that protocol processes are relevant at all

times. The Board is satisfied that Rand Water has met the

principles contained in King III during the year under review.

As it continually strives to improve its governance standards,

Rand Water annually reviews its governance and compliance

standards with the guiding principles of King III, through the

Governance Assessment Instrument (“GAI”) sourced from the

Institute of Directors Southern Africa (“IODSA”). To this end,

Rand Water has again obtained “AAA” rating which is the

Highest Application standard in terms of GAI as formulated

in accordance with the principles of King III. The assessment

tool assists Rand Water to manage the governance register of

the organisation, to ensure that there are checks and balances

and that the systems, processes and practices are in line with

the applicable standards.

Whilst adherence to King III is paramount, Rand Water is

cognisant of the provisions of the Act which apply to it and

its Subsidiaries. To the extent that there are inconsistencies in

the application of King III and the provisions of the Act, Rand

Water assumes the “Apply or Explain” approach.


kING III APPlICATION REGISTER

Main Category King III Water Services Act No. 108 of 1997 explanation

Term of Board Principle 2.18 (77) – Any term beyond nine (e.g. 3 three-year terms) for an independent non-executive director should be subject to a particularly rigorous review by the Board, of not only the performance of the director, but also the factors that may impair his independence at that time. The review should also take into account the need for refreshing the Board.

Schedule 1

A member of a Water Board is appointed for a period of office determined by the Minister, which may not exceed four years.

1) A member of a Water Board may be reappointed. Reappointment is limited to three consecutive terms of office.

Rand Water was established in terms of the Water Services Act No. 108 of 1997 (“the Act”) and Board members are appointed in line with the provisions of the Act. The King III “apply or explain” approach is applicable.

Appointment of Board Members – Nomination Process

Principle 2.17 (57) – the Chief Executive should not be a member of the Remuneration, Audit or Nominations Committees, but should attend by invitation.

Principle 2.19 (80) - procedures for appointments to the Board should be formal and transparent and should be a matter for the Board as a while, assisted by the Nominations Committee.

Principle 2.18 (75) - the Board, through the Nominations Committee, should recommend eligibility, considering past performance, contribution and objectivity of business judgement calls.

Schedule 1

7) The selection panel must consists of:

a) The Chief Executive of the Board or his or her representative;

b) A person representing every relevant Province, to be nominated by the Province concerned;

c) A person representing the Minister, to be nominated by the Minister; and

d) A person of repute and poor standing, residing within the service area, to be nominated by the Water Board.

Schedule 1 of the Act sets out criteria and stipulates who will be part of the Board selection panel. The King III “explain or apply” approach is applicable.

IT Governance Principle 5.3 – The Board should delegate to Management the responsibility for the implementation of an IT Governance Framework

The Board approved the IT strategy, IT governance framework and IT governance roadmap for implementation in 2011. The Board delegated to Management the responsibility for the implementation of the IT Governance Framework. The implementation of the IT governance roadmap is in progress. The IT governance framework as such was implemented in 2012/13 and is operational.

Compliance Framework

Principle 6.4 – The Board should delegate to management the implementation of an effective compliance framework and process.

The Compliance Framework is captured through a broad range of legislation, policies, rules, standards and guidelines. The development of an integrated compliance framework in underway.


kEy GOVERNANCE hIGhlIGhTS

Since the restructuring of the Rand Water internal

governance structures, a training and development

programme has been developed which is designed to

ensure that good corporate governance is embedded

not only at Board and Executive level, but throughout

the organisation, and most importantly to ensure that

employees who are serving as Committee members

in those internal structures understand their roles as

employees and their fiduciary responsibilities when

serving in those structures.

Rand Water reviewed its Governance Framework

which includes the terms of reference of all Committees,

Board Charter, the Delegation of Authority and the

mandate of some of the Board and management Sub-

Committees.

Rand Water reviewed its Policy Framework to ensure

that it has streamlined processes and procedures

which enable employees to work within the principles

that are aligned to the objectives of the company.

Rand Water conducted an ethics survey measuring

the capacity of the organisation to manage ethics risks

and to promote responsible business conduct. This

survey was conducted through a statistically validated

instrument developed by EthicsSA, the Organisational

Ethics Indicator (“OEI”) to assist Rand Water in

gauging the effectiveness of the ethics management

interventions as well as the prevailing culture in the

organisation.

Rand Water resolved to establish a Social and Ethics

Committee.

EThICS ANd VAluES

Rand Water recognises that effective corporate governance is

about effective ethical leadership. The Board acknowledges

that Ethics is integral to the business and it ensures that it

is reflected through its leadership, board responsibilities in

decision making, in respect of its integration with compliance

and lastly with respect to behaviour of the Board, management

and all employees within the organisation. The Board sets the

tone at the top.

Consistent with Rand Water’s long history of integrity and

good corporate citizenship, the Board and employees

are committed to conducting business in accordance with

the highest ethical standards. Ethics related matters are

communicated to new employees as part of the induction

programme and management strives to continually engage

employees on ethical matters in order to encourage openness,

transparency and to improve ethical culture.

Rand Water has codified its values of equity, caring,

integrity, spirit of partnership and excellence and behavioural

principles within the Code of Ethics policy (“the Code”),

with the objective of fostering and cultivating a culture of

compliance and accountability throughout the organisation.

Rand Water has put in place mechanisms to recognise,

respond to and manage any actual, potential or perceived

conflicts of interest. Board Members are required to disclose

their personal financial interests, and those of persons

related to them, in contracts or other matters in which Rand

Water has a material interest or which are to be considered

at a Board or Committee meeting. Where a potential

conflict of interest exists, Board Members are expected to

recuse themselves from relevant discussions and decisions.

All employees are required to sign an annual declaration

which is a reassurance that they still commit and conform to

the principles espoused in the Code.

STATEMENT OF COMPlIANCE

The Board is fully committed to the highest standards of

compliance, sound business principles and practices and

good governance.

The Rand Water Compliance Framework is largely defined by

a broad range of rules and regulations, standards, legislation,

policies and guidelines. The compliance matrix is outlined in

the following aspects, which are Governance, Compliance

and Audit, Risk Management, and Quality Management.

In accordance with Principle 6.1 of King III, the Board

ensures that the company’s compliance with all applicable


laws, standards, rules and guidelines are proactively and

systematically managed. The Board and management,

through the governance structures, ensure that there is full

compliance with all relevant legislation, codes, policies,

standards, rules and regulations.

The Board is satisfied that, during the year under review,

there was no breach or non-compliance with governance

processes; all legislative requirements from the Shareholder

and National Treasury have been complied with.

ShAREhOldER COMPACT

It is the responsibility of the Shareholder to monitor performance

of Rand Water in order to ensure that obligations, performance

standards and expectations by the Shareholder are met. In

accordance with Regulation 29 of the Treasury Regulations

issued in terms of the PFMA, the Accounting Authority (“Board”)

for a Public Entity listed in Schedule 3b, must, in consultation

with its Executive Authority (“Shareholder”), annually conclude

a Shareholder Compact. The Shareholder Compact between

Rand Water and the Shareholder was concluded accordingly.

The Shareholder Compact outlines the key performance

measures and indicators to be attained by the public entity as

agreed between the Accounting Authority and the Executive

Authority. This is a contractual commitment between the

parties on how performance will be executed and monitored.

On a quarterly basis, Rand Water submits performance

reports to the Shareholder to ensure compliance with the

key performance standards set by the Shareholder and to

report on how it performed on those key performance areas.

This is a process which enables interaction and engagement

between Rand Water and the Shareholder with regard to

the expectations, execution of the mandate and relationship

building.

POlICy FRAMEWORk

The Rand Water Policy Framework is supported by policies

and guidelines issued by the Shareholder and the Government.

The Board and management ensures that in executing the

mandate and pursuing business, Rand Water operates within

regulatory, legislative and corporate governance practices

that are applicable to our business.

Rand Water is managed through the authority delegated to the

Chief Executive by the Board, resolutions of the Board, policies,

standards and guidelines that are approved by the Board.

The Delegation of Authority is the ultimate framework with regard

to all policy matters that defines levels of authority and decision

making powers which are monetary or otherwise. Through the

Policy Review Committee and all other governance structures,

the Board ensures that the company policies are aligned to

the business, regulatory and governance requirements. Notable

policy approvals during the year under review which are part

of the annual review include the Credit Management Policy,

Accounting Policy Manual, Records Management and Archival

Policy, Treasury Policy and the Supply Chain Management

Policy.

ACCESS TO INFORMATION ANd CONFIdENTIAlITy

The Board ensures that through leadership, the governance

structures, processes and procedures, information technology

systems and other monitoring mechanisms, Rand Water

information is protected to ensure confidentiality, integrity

and accessibility. For the period under review, the Records

Management and Archival Policy was reviewed and

approved by the Board.

The Board further acknowledge section 32 of the Constitution

which gives the right to access to information which is effected

in terms of the Promotion of Access to Information Act, No 2

of 2000 (“PAIA”). To that effect, Rand Water developed a

manual in terms of section 14 of PAIA.

ThE BOARd OF RANd WATER

The Board remains the focal point of Rand Water’s corporate

governance and it is ultimately accountable and responsible

for the sustainability, value creation, strategic oversight,

performance and affairs of the company. Individual Board

Members brings independent and objective judgement

when addressing matters before them and discharging their

fiduciary duties. The Board and Sub-Committee meetings

are characterised by robust and constructive debates based

on high quality reporting from the Executive Management.


The Board keeps its performance and core governance

principles under regular review to ensure alignment with the

best practice.

COMPOSITION OF ThE BOARd

In terms of the Act, the Minister has the powers to appoint and

terminate the appointment of Board Members of Rand Water.

During the year under review, there were no appointments

or terminations. As at 30 June 2013, the Board comprises

twelve (12) Independent Non-Executive Members and one (1)

Executive Member being the Chief Executive.

ROlE OF ThE ChIEF EXECuTIVE

The position of the Chairperson and the Chief Executive

are separated and their duties are clearly segregated. The

Chairperson of the Board is an independent Non-Executive

Member and is supported by a Deputy Chairperson who is

also an independent Non-Executive Member. The Board of

Rand Water is a unitary body. The composition of the Board

reflects a good balance of Executive and Non-Executive

Members, of whom the majority are independent.

The Board is satisfied that its current members possess the

required skills and experience to carry out its responsibilities,

to achieve its objectives and create Shareholder value over

the long term.

Board of Rand Water and the Board Sub-committee Members

Members Board Audit Committee Risk Committee Treasury Committee Nominations Committee

Capital Investment Committee

Human Resources and Remuneration Committee

Adv M Petlane √ Chairperson √ Chairperson

Ms P Ndumo √ √ √

Ms N Noxaka √ √ Chairperson √ √ √

Ms T Nwedamutswu √ √ √ Chairperson

Prof FAO Otieno √ √ √ √

Adv M Hashatse √ √ √

Mr M Tsheke √ √ Chairperson √

Mr D Coovadia √ √ √ Chairperson

Dr M Ellman √ √ √ √

Ms F Saloojee √ √ √ √ Chairperson √

Mr DKP Sechemane √ √ √

Mr L Makibinyane √ √ √

Ms S Molokoane- Machika

√ √ √ √

ROlES ANd RESPONSIBIlITIES OF ThE BOARd

The Board of Rand Water is responsible for developing and

overseeing the execution of strategy, managing risk, monitoring

performance and ensuring compliance and sustainability

within the organisation. Its paramount responsibility is to ensure

that Rand Water upholds the highest standard of governance

and also creates value through its positive performance.

BOARd ChARTER

The Board reviewed its Charter during the year under review.

The purpose of the Charter is to provide the parameters within

which the Board will operate and to ensure the application of

the principles of good corporate governance in all dealings

of the Board of Rand Water. The Board Charter also sets out

the specific responsibilities to be discharged by the Members

collectively, as well as the roles and responsibilities incumbent

upon Members as individuals.


The Board is responsible and accountable for the following: -

Fulfilling its role as the focal point of corporate

governance and as such must exercise leadership

and judgment in directing Rand Water so as to

achieve sustainable prosperity for Rand Water and its

stakeholders;

Retaining full and effective control over Rand Water

in a manner based on integrity, transparency,

accountability and responsibility;

Giving strategic direction to Rand Water;

Setting the risk tolerance level in accordance with the

adopted strategy, overseeing the identification and

evaluation of key risks as well as the risk management

process;

Ensuring that information technology governance is

effectively overseen and that adequate information

is provided by management to facilitate effective

decision making;

Taking the necessary steps to ensure that there is a

robust system of internal controls on the effectiveness

of which regular assurance is received through risk

centric internal audits; and

Instituting a robust policy and procedure for the

management of conflicts of interest.

APPOINTMENT OF ThE ChIEF EXECuTIVE

The Board is responsible for the appointment of the Chief

Executive and overseeing the management of Rand Water

by:

Defining levels of materiality, reserving specific

powers to itself and delegating other matters, with the

necessary written authority, to management;

Continually monitoring the exercise of delegated

powers by management through understanding

the key performance areas and key performance

indicators of Rand Water and considering reporting

against these. The Board ensures that delegation of

authority document is reviewed regularly to assist

effective decision making throughout Rand Water;

Monitoring and evaluating the implementation of

strategies, policies, management performance criteria

and business plans having regard to its own reporting

and performance responsibilities to the Executive

Authority;

Safeguarding a comprehensive system of policies and

procedures and appropriate governance structures at

management level;

Exercising objective judgment on the business affairs

of Rand Water, independent from management but

with sufficient management information to enable a

proper and objective assessment to be made;

Promoting a culture that supports entrepreneurship

and innovation by enabling and rewarding such

behaviour;

Instituting a system of executive remuneration that is

equitable, responsible and motivating;

Overseeing that succession planning in respect of

senior executive positions within Rand Water is in

place; and

Establishing the necessary structures to independently

verify and safeguard the integrity of both financial and

non-financial reporting.

dElEGATION OF AuThORITy

The Board has the authority to define the levels of materiality in

relation to the business of Rand Water including the authority

to delegate its powers however the Board can reserve certain

powers.


During the year under review, the Board reviewed the

Delegation of Authority (“the DoA”) to ensure that all delegated

powers and authority are still within the appropriate limits,

aligned to applicable standards and laws, and are conferred

to relevant designates. The Board has delegated specific

duties to Board Sub-Committees and certain powers to the

CE but it has reserved specific powers for its own decision

making. Within the powers vested upon him, the CE ensures

that the DoA is cascaded to the entire business through

the protocol processes and is applied in accordance with

the prescribed limits stipulated therein. As the Accounting

Authority, the Board remains the ultimate decision making

authority within the framework of Governance. The Board is

cognisant that the delegation of its powers and authority does

not in any way absolve it from any responsibility, authority

and duties.

BOARd INduCTION, dEVElOPMENT ANd INFORMATION

The Board has a formal induction programme which ensures

that all newly appointed Board Members are cognisant of

their roles and responsibilities, fiduciary duties, applicable

legislations and regulations.

The Board is committed to the continued development of its

Members so that they may build on their expertise and cultivate

a deeper understanding of the business operations. Different

methods such as site visits, internal workshops, conferences,

seminars and one on one engagement on business activities

of different portfolios, are applied in order to ensure that

broader scope is covered in this process and for enhanced

information sharing platforms.

BOARd EVAluATION

The Board members acknowledges the importance of board

assessment and that it ensures optimal performance through

individual members and the Board collectively. Rand Water

utilises an independent consultants for its evaluation, and

the Board assessment is conducted in accordance with

the performance evaluation guidelines provided by the

Shareholder.

Rand Water is comfortable that the Board and its Sub-

Committees are functioning in accordance with best

governance practices. All areas of development have been

documented in a comprehensive Board development plan.

Members attend and will continue to attend training in line

with the development plan.

BOARd REMuNERATION

The Remuneration of Board members is determined by the

Shareholder, duly represented by the Minister. The Minister

periodically issues a Board Remuneration Policy which

governs the remuneration of the Board members.

BOARd SuB-COMMITTEES

The Sub-Committees were established to assist the Board in

discharging its responsibilities within the specific focus areas.

All the Board Sub-Committees have clearly defined Terms of

Reference which sets out the specific responsibilities delegated

by the Board. The Terms of Reference are periodically

reviewed in order to ensure alignment with the governance

standards and any applicable legislation.

Roles and Responsibilities of the Sub-Committees:

GROuP AudIT COMMITTEE

In 2011 the Board reviewed the Audit Committee structures

as well as the mandate of the said structures within the Rand

Water Group; as a result, the Board resolved to form a Group

Audit Committee and the Audit Committee of the subsidiary

was disestablished. The Terms of reference of the Group

Audit Committee was also reviewed.

The Group Audit Committee consists of seven (7) non-

executive members one (1) of whom is a Board member of

the Rand Water Foundation, a subsidiary of Rand Water.

The Chief Executive, the Chief Financial Officer, the Group

Governance Executive, other executives as well as assurance

providers such as the Internal and External Auditors attend the

Committee meetings but they do not have voting rights.

The Committee was established by the Board of Rand Water


to assist it with meeting its responsibilities in compliance with

Section 51 of PFMA and the National Treasury Regulations.

The Committee has an independent role with accountability

to both the Board and the Shareholder. The Committee serves

as an independent oversight and advisory body responsible,

inter alia, for the financial reporting and financial information,

IT Governance, risk management processes, internal financial

control and compliance thereto, internal and external audit,

performance monitoring and evaluation, ethics, sustainability

and legislative and regulatory compliance.

TREASuRy COMMITTEE

The Committee consists of five (5) non-executive members

who are all independent. The Chief Financial Officer and

other executives attend the Committee meetings without any

voting rights.


to oversee the operations of the Treasury function including,

guiding Treasury Policies, assisting with the overall treasury

strategy and monitoring the risks associated to the treasury

function with the powers and duties assigned to the Committee

which include the following:

To assist, oversee and monitor the Issuance of Rand Water

Stock, New financial instruments, Funding structures and

their tax implications;

Regularly assess Rand Water’s credit worthiness in the

light of changing financial circumstances and ensure

compliance with all legal and regulatory financial

requirements;

Oversee the development and implementation of

investment, funding and liquidity strategies in line with

Treasury Policies approved by Rand Water;

Oversee the development and implementation of policies

and procedures with regard to treasury activities and

transactions;

Review the Funding Strategy, Investment Strategy,

Hedging Strategy as well as the counterparty limits;

Oversee the development of a treasury risk management

policy framework incorporating performance

measurements and benchmarks against which the

performance of the treasury function can be evaluated;

and

Monitor adherence to performance of investment

strategies ensuring proper governance in the investment

process and that investment returns fall within acceptable

limits.

CAPITAl INVESTMENT COMMITTEE

The Committee consists of six (6) non-executive members who

are all independent. The Chief Operating Officer, the Chief

Financial Officer, the Group Governance Executive and other

executives attend the Committee meetings without any voting

rights. The Committee was established by the Board of Rand

Water to optimally control the major capital investment that

falls within the scope of the “Primary Activities” and “Other

Activities” as defined in the Act in order to achieve a high level

of confidence of investors in Rand Water’s credit worthiness.

In addition, the Committee assist the Board with the following:

To comply with all directives from the Shareholder with

regard to Integrated Water Resource Management;

Review the Capital expenditure budget for approval of

the Board; and

Approving Capital Investment projects.

huMAN RESOuRCES ANd REMuNERATION COMMITTEE

The Committee consists of four (4) non-executive members

who are all independent. The Chief Executive, the Chief

Financial Officer, the Group Human Resources Executive and

the Group Strategy Executive attend the committee meetings

without any voting rights.




to assist the Board with the following:

Oversee the development of Rand Water’s policy and

guidelines on executive management remuneration and

take the necessary steps to ensure that:

the mix of fixed and variable pay, in cash and other

elements, is aligned with company objectives;

incentives are based on targets that are consistent

with the strategic goals and objectives of Rand

Water and the remuneration policy promotes a

culture that supports enterprise and innovation

with concomitant short- and long-term performance

related rewards that are fair and achievable;

Approve average annual salary increases, incentive

bonuses and ad hoc salary adjustments;

Make other general recommendations to the Board

regarding the remuneration strategy of Rand Water and

its remuneration policy and guidelines;

Oversee the management and administration of the

bursary scheme;

Oversee the establishment and implementation of human

resources policies that promote an equitable, progressive

and legally compliant working environment; and

Provides the Board and the Shareholders with an

authoritative and credible view of the performance of

Rand Water.

GROuP RISk COMMITTEE

The Committee consists of seven (7) non-executive members

,one of whom is a Board member of Rand Water Foundation;

and two (2) executive members, being the Chief Executive

and the Group Shared Services Executive. The non-executive

members are all independent. All senior executives and other

senior managers attend the Committee meetings without any

voting rights.


to assist and support the Board with the following:

Discharge their responsibilities regarding risk management

and internal control;

Approval of an enterprise-wide risk management plan that

meets the requirements of Rand Water’s stated philosophy;

Implementation by management of the approved risk

management process;

Oversight of implementation and effectiveness of risk

management, including obtaining assurance thereon;

Regular review and improvement of the risk management

strategy;

Oversee the development of an enterprise-wide risk

management policy and strategy, and assess whether

it is aligned to strategy and will assist Rand Water in

meeting its business imperatives;

Review the adequacy and effectiveness of the control

framework and governance structures implemented within

the IT environment and ensure that an IT governance

strategic plan has been developed;

Review the arrangements management has implemented

for disaster recovery and business continuity organisation

wide; and

Review the adequacy of controls around the management

of information and the protection of personal information

processed by the company and ensure that it is reviewed

on a regular basis.

NOMINATIONS COMMITTEE

The Committee consists of three (3) non-executive members

and one (01) executive member of whom is the Chief

Executive. The non-executive members are all independent.


to assist the Board with the following:

To recommend nomination of members to the boards of

other entities within RW Group for consideration and

final approval of the Board;

Analysing the composition of other RW entity Boards

to ensure that there is effective skill set and appropriate

composition for it to execute its duties effectively;

Develop selection criteria to assist in ensuring that the

composition of the Board is capable of leading the

RW Group to meet its strategic goals and performance

objectives;

Oversee the development of a formal induction

programme for all new Board and Board committee

members for other RW entities; and

Oversee the development and implementation of

continuing professional development programmes for

Board members.

• Rand Water Board and Sub-committees: Summary of

Meeting Attendance for the Period July 2012 - June 2013


Rand Water Board and Sub-committees: Summary of Meeting Attendance for the Period July 2012 - June 2013

Board Members Board

[9 meetings]

Audit Committee

[8 meetings]

Risk Committee

[4 meetings]

Treasury Committee

[4 meetings]

Nominations committee1

[0 meetings]

Capital Investment Committee

(“CIC”)

[8 meetings]

Human Resources and Remuneration

Committee

[7 meetings]

Adv. M Petlane 8/9 0/0

Ms P Ndumo 8/9 7/8 4/4

Ms N Noxaka 8/9 8/8 4/4 0/0 5/8

Ms T Nwedamutswu 6/9 0/0 7/7

Prof FAO Otieno 7/9 1/4 7/8 5/7

Adv. M Hashatse 8/9 4/8 3/4

Mr M Tsheke 9/9 4/4 6/8

Mr D Coovadia 8/9 8/8 4/4

Dr M ellman 8/9 8/8 4/4 7/8

Ms F Saloojee 8/9 3/4 3/4 6/8 5/7

Mr DKP Sechemane 9/9 1/4 0/0

Mr L Makibinyane 5/9 3/8 2/4

Ms S Molokoane –

Machika 2

9/9 3/4 3/8 7/7

RANd WATER SuBSIdIARIES

Rand Water has two subsidiaries namely Rand Water Services

(Pty) Ltd (“RWS”) and Rand Water Foundation (“RWF”).

RWF was established in 2001 as a Non-Profit Company

(NPC) to carry out the Corporate Social Investment (CSI)

programmes of Rand Water. The RWF is mandated to promote

and support the delivery of water services to communities

within and outside of RW’s areas of supply and to coordinate,

administer and manage RW’s CSI resources by undertaking

community development projects in partnership with various

donors and relevant stakeholders.

RWS was divisionalised into Rand Water in 2010. The

company is existing but not operational. Both subsidiaries are

wholly owned by Rand Water and by virtue of Rand Water

being a schedule 3 (b) entity, as listed in terms of the PFMA,

they are classified as such.

In accordance with Principle 2.24 of King III, RW developed

a Subsidiary Governance Framework which was adopted by

both parties on 14 August 2012. The Subsidiary Governance

Framework regulates the relationship between RW and its

subsidiaries, the reporting lines as well as communication

between the two parties.

RW has also signed a Shareholder Compact with RWF which

is a performance agreement between the parties to measure

and monitor performance of RWF.

RANd WATER EXECuTIVE MANAGEMENT

The Portfolio Integrating Committee (“PIC”) comprises six (6)

executive members who are responsible for the Portfolios

within RW. The Board, through the CE, delegated powers

and authority to the executive members to assist the CE with

the day to day running of the company. PIC was established

by the CE as the Accounting Officer; to assist the CE in

guiding, directing and controlling the overall activities and in

managing the business of Rand Water, subject to the statutory

limits, the Board’s limitations on delegation of authority to the

CE, and the Board approved policies and authority levels

of Rand Water. The PIC is also responsible for monitoring

the business performance and also acts as an interfacing

committee between the business, other RW entities and the

Board within the approved protocol process.

For the period under review PIC held thirty three (33) meetings

which include ordinary meetings, special meetings and

breakaway sessions.


SuCCESSION PlANNING - EXECuTIVE MANAGEMENT

The Board is responsible for succession planning for the

purposes of identifying, developing and advancing the

executives of Rand Water. The Board has an ultimate

authority and power to make decisions on the succession of

the executive members; however, it has assigned this specific

duty to the Human Resource and Remuneration Committee.

Detailed succession plans are presented to the Human

Resources and Remuneration committee for consideration and

to ensure effective continued performance through leadership

continuity and stability.

GROuP COMPANy SECRETARy

Ms Pertunia Mohlabi is the Group Company Secretary of Rand

Water and its entities. The Company Secretary is the central

source of guidance on all governance and ethics matters

within the organisation. In addition to the company secretary’s

statutory and other duties, she provides the board as a whole,

directors individually, and the sub-committees of the board

and management structures, with guidance as to the manner

in which their responsibilities should be discharged in the best

interests of the company. The appointment and removal of

the company secretary is a matter for the board as a whole.

The Board Members have unlimited access to the Group

Company Secretary. Furthermore, the Company Secretary

provides guidance, advisory services and support to the all

internal governance structures of Rand Water on governance,

ethics matters, secretariat activities and administration aligned

to those services.

The Group Company Secretary prepares the Annual Work

Plan of the Board and its Committees in conjunction with the

respective Chairpersons which enables these committees to

operate more effectively. The Company Secretary is also

responsible for the co-ordination of the induction of new

directors and training of board members in line with the

development programme approved by the Board.

The Board of Rand Water is satisfied that the Group Company

Secretary is fit and proper to perform the duties in accordance

with the applicable legislation.

Pertunia Mohlabi was appointed as the Group Company

Secretary on 07 September 2009. She has a BProc, LLB, LLM

(Corporate Law) and a Post Graduate Certificate in Banking

Law and Financial Markets. She is an Admitted Attorney of

the High Court of South Africa and a certified ethics Officer

through ethics SA.

Responsibilities: Governance, Secretariat Services,

ethics Management, Policy and Records Management

•(Footnotes)

1 Note Nominations Committee is a subcommittee of the Board responsible for appointments

at the RW subsidiaries. For the year under review, there were no appointments.

2 Note Appointed to CIC on 29 May 2013


The Group Internal Audit Division of Rand Water is governed by an official charter. This Division reports functionally to the Audit Committee of the Board and administratively to the Group Governance executive.

Furthermore, the Internal Audit Head attends by invitation

the Audit Committee and Executive Committee - Portfolio

Integrating Committee (PIC) meetings of Rand Water.

The Internal Audit Division recently had an External Quality

Assessment Review from an Independent Reviewer accredited

by the Institute of Internal Auditors. Internal Audit function

is required by the Internal Audit Standards to conduct the

external assessment every five years the PFMA requires that

the Internal Audit function complies with the said standards.

The main objective for the review is to:

Assess IAAs conformity to the Institute of Internal Auditors

(IIA’s) International Standards for the Professional Practice

of Internal Auditing (Standards) and Code of Ethics,

Evaluate IAAs efficiency and effectiveness in carrying out

its mission (as set forth in its charter and expressed in

the expectations of Rand Water’s management and Audit

Committee),

Offer advice and recommendations to enhance the

management and work processes of the IAA, as well as

its value to Rand Water, where appropriate and to

Assist the IAA in its pursuit of adding value and

consulting services

The assessment concluded that Rand Water Internal Audit

generally conformed to the standards of the Institute of Internal

Auditors. Recommendations to improve certain areas have

been addressed.

Rand Water`s Internal Audit is considered critical to the

organisation because it focuses on key issues arising from the

strategic direction of the Board and the Portfolio Integrating

Committee. It concentrates primarily on assurance and

advisory services that are linked to key business strategies

and value chains as this will ensure an overall corporate

governance environment conducive for the fulfilment of the

entity`s mandate.

A risk based audit approach is being followed to enable

Rand Water to strengthen governance processes in order

to realise successfully corporate strategic objectives. High

quality professional services are being rendered following a

detailed official internal audit plan that is informed by the

corporate risk tolerance, knowledge about the business,

matters raised by the Board of Directors, the Audit Committee

and the Portfolio Integrating Committee.

The Value Adds Strategy of Internal Audit has always been

to place an emphasis on differentiators rather than qualifiers,

i.e. focusing on innovative ways of providing incremental

value through our services than simply following the usual

audit processes. Thus, Internal Audit`s assurance and advisory

services cover emerging compliance requirements arising

from legislations, King Code and the Office of the Auditor

General. Furthermore, Internal Audit plays a vital role in

advising the entity on how to ensure full compliance with all

relevant statutory requirements.

Highlights and Strategic Initiatives

Implementation of Combined Assurance Model

Establishment of a Combined Assurance Governance Structure

Quality Assessment Review

Implementation of a Special Advisory Model

The Internal Audit activities ensure demonstration of value

add by covering the following:

Focus on client management which includes knowledge sharing and fostering partnerships with line managers and returning ownership of controls to management;

Alignment of the Internal Audit objectives and strategies to the corporate priorities;


Align our plans to the updated risk profile of the entity;

The use of updated technology for computer assisted audit techniques;

Leveraging technology to optimise audit operation;

Combined assurance services with both the internal and external services providers;

Responding to stakeholders’ expectations and priorities;

Identification and elimination of non-value adding audit assignments;

Proactive provision of advisory services to minimise chance of business losses;

Regular review of the internal audit plan to address the cost benefits impact of our services;

Attraction and retention of skilled and competent

personnel.

In addition to the above, the Internal Audit value add is

demonstrated through participation in the improvement of

corporate risk and performance management processes.

A structured reporting approach is being followed to allow

the organisation to obtain assurance per risk covered on the

company`s risk register and to alert about the overall control

maturity level. The Internal Audit endeavours to increase its

relevance to the business by the appointment of technical

specialists in order to provide incremental benefits of assurance

services that it provides on technical aspects of the business.

In order to comply with the requirements of King III, Internal

Audit has embarked on projects that have resulted in the

development of a Combined Assurance Model and the

development of a compliance framework

A review of Rand Water’s system of internal control and risk

management including the design and implementation of

internal financial controls was conducted during the year

under review. Internal Audit concluded that the system of

internal controls is effective.

INTEGRATEd FRAud RISk MANAGEMENT

Situated in the Group Governance Portfolio, Group Forensic

Services (GFS) is an independent Division established by

Rand Water’s Management and Board to develop and

maintain an integrated white collar crime risk management

program in order to manage this risk in the organisation. The

Division reports the outcome of its activities to both the Audit

and Board Risk Committees.

The focus of the GFS program is on pro-active prevention

of white collar crime instances and as a result most of the

initiatives are aimed at the identification of risk areas and

creating a culture of awareness amongst management and

employees.

GFS is also responsible for promoting the Rand Water Code

of Ethics in order to ensure that the organisation maintains

credible corporate citizenship.

Employees are constantly encouraged to report unethical

behaviour and/or irregularities to the Rand Water Hotline

(0800 212 364), that is managed by an external service

provider.

During the year under review GFS successfully developed and

implemented a Fraud Risk register methodology that identifies

and rates crime risk areas and the controls that are in place

to mitigate these risks.

The Group Forensic Services (GFS) Fraud Risk Management

Map illustrates its operations and processes

In order to constantly raise awareness levels, GFS published

articles that highlight specific white collar crime risks and

delivered presentations to employees in respect of crime

statistics, staff responsibilities and the successes achieved by

the unit.

During the year under review, GFS initiated enquiries and

investigations into reported allegations of white collar crime

instances and where merit to the allegations were determined,

GFS recommended disciplinary action against identified

employees and opened criminal cases where required.

GFS also conducted pro-active audits and assessments into

various Rand Water processes and sites as part of the fraud

risk identification process. The proactive approach has been

taken in respect of effectively managing white collar crime risk

has created a culture of awareness amongst employees that

supports the organisations stance of zero tolerance to fraud

and other white collar crime.


hIGhlIGhTS ANd STRATEGIC INITIATIVES

Lifestyle Audits

Development of a Fraud Risk Management Methodology

The Group Forensic Services (GFS) Fraud Risk Management

Map illustrates its operations and processes

Pro–active initiatives include:

Vetting of all staff and vendors

Life style audits on staff members

Screening and rating of customers

Fraud risk assessments

White collar crime risk register

Fraud policy statement –

ZeRO TOLeRANCe

Close Liaison Internal / external

Audit and Risk Management

process

Disciplinary Code and Criminal /

Civil prosecution

GFS investigations

Review and rate Internal

controls

GFS Pro-Active initiatives and plan

GFS Charter and Independence –

RW Hotlinefunction

FPP, Investigations

Policy and Fraud Policy

RW Code of ethics and

Compliance policies

Fraud RiskManagement

The Group Legal Services team is delivering synergised legal strategies and corporate governance through areas of specialisation such as Operations (property related, etc.), Commercial (Commercial and construction contract, etc.) and Strategy (new growth and innovation, finance related activities and water sector related) to provide an integrated assurance for Rand Water’s top risks.To complement the above, Group Legal Services has

developed a Legal Strategy, which is a combination of

policies, legal guidelines and legal procedures. The Legal

Strategy is complimented by a full complement of specialist

areas with knowledgeable and experienced team members

who are business savvy and understand the vision of the

organisation, and assist to achieve its vision within the

applicable legal framework thereby providing assurance.

Group Legal Services has introduced an enterprise wide

Legal Risk Register to address identified legal risks and to

mitigate against these risks with the aim to reduce any loss

or injury arising out of legal risk exposure.

Group Legal Services’ achievements for the year under

review included compiling the Legal Strategy, Legal Risk

Register, Opening up an inclusive Legal Panel of Attorneys

and writing papers to advise business on vehicles that

business may utilise to achieve growth. Group Legal Services

further made presentations to the National Council of

Provinces to ensure that the Vaal River is protected.

Group Legal Services is a member of the Encroachment Task

Team. It ensures that Rand Water’s infrastructure is protected

and at the same time ensures compliance with legislation

relating to removal of encroaching settlements.

Group Legal Services, in compliance with the Promotion of

Administrative Justice Act No. 3 of 2000 (PAJA), compiled a

process for negotiation with landowners to ensure that Rand

Water, during the land acquisition negotiations, complies

with PAJA.

In addition to the land acquisition negotiation process,

Group Legal Services compiled the contract negotiation

process.

This process serves as an assurance to business that the

interest of Rand Water will be optimally protected when

contracting.

hIGhlIGhTS ANd INITIATIVES

Implementation of a new Strategy and Structure

Legal Risk Management Methodology

Review of Encroachment Strategy

Review of the National Water Services Act

Review of the Raw Water Pricing Regulation Work

Strategy


Group Regulatory and Compliance Services

The mandate of Regulatory Services is to ensure that the Rand

Water Group complies with all rules and regulations applicable

to its environment. It further ensures that compliance policies

and procedures are being adhered to. The compliance function

ensures that compliance risks within the organisation are being

appropriately, identified, evaluated, monitored and resolved.

During the year under review Group Regulatory Services the

Portfolio Integrating Committee (PIC) endorsed Portfolio specific

compliance mandates. A Breach Register has also been drafted

where potential areas of compliance vulnerabilities and risks

identified will be recorded.

In terms of combined assurance Group Internal Audit had

conducted assurance reviews relating to regulatory compliance

risks. Group Legal Services and Group Internal Audit also have

processes in place to ensure compliance to changes in the

legislative and regulatory environments.

HIGHLIGHTS AND INITIATIVES

Compliance Framework

Compliance Risk Profile

In the year under review the Portfolio Integrating Committee

endorsed Portfolio Specific Compliance mandates




To this extent an independent assessment was performed, and an Information Technology Governance Framework was defined, an

Information Technology Performance Report was designed and an Information Technology Governance Roadmap was approved in

order to address any gaps in terms of compliance with King III as well as to improve Information Technology governance at Rand Water.

A number of improvements were achieved in 2012 - 13 related to the Information Technology Governance Framework, Value

Delivery and Sustainability.

The Information Technology Governance Framework, as approved by the Board in 2011, was refined via an Information Technology

Charter and the internal Information technology governance-specific structures, including the Information & Communications

Technology Steering, Architecture Review and Change Control Committees, were aligned to the charter by refining their terms of

reference and the membership of the structures. The reconstituted Information Technology governance structures are now operational

as well as aligned with and in support of the Information Technology Governance Framework. COBIT was selected as the

Information Technology Controls and Governance Framework to supplement King III in terms of Information Technology governance.

Information Technology Value Delivery was improved by formalising an Information Technology Value Proposition in line with the

Information Technology Strategy as well as reviewing and refining the Information Technology Balanced Score Card based on the

new Information Technology Value Proposition. Information Technology project management and benefit realization was improved

by establishing formal monitoring of Information Technology projects and the delivered return on investment as well as enforcing the

documentation and retention of lessons learnt from Information Technology projects.

The Information Technology Performance Report, as approved by the Board In 2011, is presented to the Board on a quarterly basis

in order to assist the Board in fulfilling their Information Technology governance accountability in terms of King III.

Our Information Technology sustainability was further improved based on the Green Information Technology plan by ensuring that printer toner cartridges for general office printing and copying are disposed of in an environmental friendly manner.

Further improvements are planned for 2013 - 14, as per the Information Technology Governance Roadmap. These include the

formalisation and / or improvement of Business Continuity, Compliance as well as Information Security and Management related

practices and mechanisms.

The Board of Rand Water elected in 2011 to comply with the recommendations contained in King III in terms of our Information Technology Governance.


Our Supply Chain Management Policy and procedures were re-aligned during the year under review mainly because the Procurement Policy Framework Act (No. 5 of 2000) was exempt to public entities as defined under schedules 2, 3B and 3D of the Public Finance Management Act (No. 1 of 1999).

92

The Revised Preferential Procurement Regulations, number 34350 gazetted on 8 June 2011, seeks uniformity throughout the

public sector procurement system and makes the PPPF applicable to Rand Water (schedule 3B) as of 7 December 2011.

Formally Rand Water and schedule 3B organisations were to comply by 6 December 2012.

Rand Water (as a Schedule 3B Company) was exempted from compliance with the PPPFA in so far as it related to appreciation

of Preferential Procurement Regulations no 502 of 8 June 2011. Rand Water Supply Chain Management (SCM) Policy was

amended to be in compliment with the PPPFA as of 8 December 2012. In terms of the revised SCM Policy approved by the

Board, Rand Water applied the 80/20 and 90/10 Prize evaluation criteria as of 8 December 2012.

As a way of demonstarting commitment to supplier development, tHE Board approved an Enterprise Development Strategy (EDS).

With the amendments, Rand Water will achieve and imbed supply chain management best practices that will result in the

procurement of world class goods and services of the right design (scope), in the right quantity, at the right place and at the right

price. Through effective Demand Planning, Rand Water mitigates interruption in the supply of goods and services.

BROAd BASEd BlACk ECONOMIC EMPOWERMENT

Through the amended Policy, Rand Water will attempt to transform and redress the economic imbalances of the past, by giving

previously disadvantaged communities equal opportunity to compete in an open, fair and transparent Rand Water supply chain

environment.

92 % Bee attained during the year under review




Occupational Health, Safety, environment & Quality (SHeQ)

In striving for excellence and continual improvement in the

Occupational Health, Safety, Environment and Quality field,

the organisation further reduced its Occupational Health

and Safety targets, compliance to environmental legislation

and on increasing the use of improvement reports coupled

with document control. To achieve the above mentioned

results, an increase in SHEQ resources was provided mainly

to all capital projects. Enforcement of SHEQ and legislation

requirement became possible, resulting in significant SHEQ

performance in the capital project environment.

This SHEQ culture is being transferred to the organisations’

suppliers and customers. This is done through the inclusion of

SHEQ requirements in all goods and services specification.

The organisation requires that SHEQ requirements are

incorporated in the project management cycle process,

namely from project initiation phase up to the handover.

ENVIRONMENTAl MANAGEMENT SySTEM (EMS)ISO 14001:2004

Rand Water prides itself in the achievement of environmental

compliance and maintenance of its high standard of

environmental custodianship. To monitor environmental

performance, we adopt and comply with the international

ISO 14001:2004 standard for environmental management

system.

The first international certification obtained by Rand Water

was that of ISO 14001 - 2004 in November 1999.

This system has been continuously maintained and improved.

Once again, in September 2012 after a successful

environmental legal audit undertaken during July 2012 by

the SABS, Rand Water was re-certified for this scheme by

the SABS certification body with expiry in 2015. The ISO

14001 - 2004 certification was also at this point converted

to a multi-listing. That is, all goods, activities and services from

all operations under the umbrella of Rand Water now fall

under this single certification.

South Africa has pressing socio-economic needs for service

delivery, and Rand Water aims to meet these needs in a

sustainable and legally compliant manner through effective

project management which encompasses environmental

requirements. We are currently in a phase of expansive

growth and infrastructure development and maintenance.

The EMS ensures that relevant environmental legislation such

as Environmental Impact Assessment regulations and Water

Use Licensing requirements are adhered to. Legal compliance

of such is verified at planned intervals.

Factors that drive environmental management in the

organisation are the following:

Legal Compliance

International codes/standards

Moral obligations

Risk reduction

Reputational factors

The Environmental Management System implemented at

all operational sites are audited bi-annually by the SABS

to confirm compliance to the ISO 14001:2004 standard.

The last audit conducted in March 2013 once again

confirmed Rand Water’s commitment to compliance with the

standard, resulting in a successful scheduled re-certification as

a corporate umbrella listing in September 2012.

Documents

About our Report - Rand Water Reports/2012-2013 Annual...About our Report Rand Water’s Integrated Annual Report for the period 1 July 2012 to 30 June 2013 has progressed in the three