TABLE OF CONTENTS - National Government · 2015-04-13 · WTW Water Treatment Works PCP...

TABLE OF CONTENTS

Contents

General Information ________________________________________________________________ i

List of Abbreviations ________________________________________________________________ 1

Strategic Overview __________________________________________________________________ 2

Legislative Mandate _________________________________________________________________ 3

Organisational Structure – The Board ___________________________________________________ 4

Organizational Structure - Administration ________________________________________________ 8

Foreword by Chairperson ____________________________________________________________ 9

Chief Executive’s Overview __________________________________________________________ 10

Organisational Background __________________________________________________________ 12

Corporate Social Responsibility _______________________________________________________ 15

Corporate Governance _____________________________________________________________ 17

Risk Management and Fraud Prevention _______________________________________________ 26

Financial Overview _________________________________________________________________ 30

Operations and Maintenance ________________________________________________________ 40

Engineering and Projects ____________________________________________________________ 63

Corporate Support _________________________________________________________________ 69

Human Resource __________________________________________________________________ 78

Annual Financial Statements _________________________________________________________ 82

Report on Performance against the Strategic Plan 2013/14 ________________________________ 133

GENERAL INFORMATION

Bloem Water Annual Report 2013/14 Page i

General Infor mation

REGISTERED NAME: BLOEM WATER

PHYSICAL ADDRESS: 2 Mzuzu Street,

Pellissier

BLOEMFONTEIN

POSTAL ADDRESS: P.O. BOX 30121, 9322

BLOEMFONTEIN

FREE STATE PROVINCE

SOUTH AFRICA

TELEPHONE NUMBER/S: (051) 403-0800

FAX NUMBER: (051) 422-5333

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.bloemwater.co.za

EXTERNAL AUDITORS: KPMG

COMPANY SECRETARY: Ms. Fezeka Ntlemeza

LIST OF ABBREVIATIONS

Bloem Water Annual Report 2013/14 Page 1

List of Abbreviations

BBBEE Broad Based Black Economic Empowerment

CEO Chief Executive Officer

CFO Chief Financial Officer

PFMA Public Finance Management Act

TR Treasury Regulations

WTW Water Treatment Works

PCP Pre-stressed Concrete Pipeline

DWS Department of Water and Sanitation

DHS Department of Human Settlement

SOP Standard Operating Procedures

HCD Human Capital Development

ABET Adult Basic Education and Training

IWA International Water Association

MWIG Municipal Water Infrastructure Grant

STRATEGIC OVERVIEW


Strategic Overview

VISION Assuring sustainable provision of water services, for life.

MISSION

To create a leading, value-driven, effective and responsive Institution using adaptive best practice methods in anticipating tomorrow’s problems today.

VALUES

Bloem Water commits itself to the following values that guide and direct all interactions with internal and external stakeholders:

� Corporate Social Responsibility � Governance � Equality � Responsiveness

STRATEGIC GOALS & OBJECTIVES

� Management financial affairs to meet current and future obligations

� Build, operate and maintain infrastructure

� Ensuring sustainable and equitable water resource management

� Transformation/business processes/research & development

� Engaging in strategic partnerships

LEGISLATIVE MANDATE


Legislative Mandate

Bloem Water is, in terms of the Public Finance Management Act (PFMA), Act 1 of 1999, a Schedule 3B, National Government Business Enterprise, which reports to the Executive Authority, represented by the Department of Water and Sanitation. During 1995 the service area of Bloem Water was extended to include the southern Free State, adding towns such as Bethulie and Philippolis.

Bloem Water is legislated through the following legislation: � Water Services Act. 108 of 1997; � the provisions of the Shareholder Compact; � Public Finance Management Act (No.1 of 1999 as amended by Act 29 of 1999); � National Treasury Regulations; � other regulations, which govern operations � King III; � Protocol on Corporate Governance in the public sector; and � all other applicable laws of the Republic of South Africa.

ORGANISATIONAL STRUCTURE – THE BOARD


Organisational Structure – The Board

Mr TB PHITSANE

APPOINTED: April 2014

Chairperson of the Board

Diploma in Education, BA Economics, MBA, Executive Leadership: University of Stellenbosch, Human Resources Strategy in Singapore.

He is former Chief Executive Officer and the Deputy Secretary (Deputy CEO): Corporate Services of the Free State Legislature, His core skills relate to varied knowledge of the PFMA, MFMA and general Governance Laws, Corporate Governance, Board effectiveness, public administration and Governance, service delivery and budget implementation programming, performance management systems solutions, development, planning and implementation systems as well as policy development and analysis. Mr Phitsane is a member of the Institute of Directors in Southern Africa and the PACC. He is also a member of the Sanlam Board of Trustees.

Ms Puseletso Matete


Deputy Chairperson of the Board

BA Honours (Geography & Environmental Studies), M.A. in Public Administration, Thesis pending for M.A. in Geography and Environmental Studies.

She is Head of Environmental Management at one of the leading infrastructure development companies. She headed an environmental department at steel and cement manufacturing companies. She was a Regional Manager: Environmental Monitor during construction of the Lesotho Highlands Tunnel from Mohale Dam to Katse Dam and before that Matsoku Diversion and Weir. She is a trained NED, has had executive leadership training. She has over the past 15 years acquired vast experience in environmental law and governance and Executive Preparation Programme in mining and water law.

Mr N Mokhesi


Chairperson of the Audit Committee

M Com Financial Management, B Com Hons, B. Compt. (Accounting & Auditing), BCom.

Mr. Mokhesi is a currently the Head of Department in Free State Department of Human Settlement. He started his career as a part-time teacher of Business Economics at the Mncube Senior Secondary School in Soweto.

He joined the Free State Development Corporation in 1986 as Senior Manager: Associate Companies and Joint Ventures. His private sector experience includes serving as Executive Director of Mphatlalatsane Geographical Solutions (Pty) Ltd and as an independent SMME Business Consultant.

He has also gained extensive experience of the financial environment in the local Government sector when he joined the Thabo Mofutsanyana District Municipality as Chief Financial Officer during 2002 and continued to serve in that position until he joined the Maluti-a-Phofung Local Municipality as Chief Financial Officer in 2005. He was appointed as City Manager of the Maluti-a-Phofung Local Municipality in 2007. In 2009, he joined Centlec as Chief Financial Officer. He joined the Department of Police, Roads and Transport in June 2010 as the Chief Financial Officer and also acted as Head of Department and Deputy Director General at various times.



Ms M Maboe


BSc Education, MA (Counseling)

Ms Maboe’s experience ranges from Head of Department: Social Development, Municipal Manager to the Masilonyana Local Municipality, Communications Officer at Thabo Mofutsanyana District Municipality, Acting Registrar and Executive Director: Student Development and Support Service at University of the Free State Qwaqwa Campus. Ms Maboe has a leadership qualification in Executive Municipal Management from the University of the Free State, a MA Degree with a Major in Counselling from the University of Northern IOWA, USA and a BSc Ed Degree from the University of Bophuthatswana.

She is a Psychologist by profession and has served in numerous Boards including the Free State Development Corporation (FDC) and Sedibeng Water.

Ms Maboe has also served on many a forum such as a member of the Executive Committee Forum of African Women Educationist, SA (FAWESA), member of the South Africa Association of Senior Student Affairs Professionals (SAASSAP) and member to the National Association of Student Development Practitioners (NASDEV). She is also a member of Southern African Fundraising Institute (SAIF).

Adv LR Bomela


BPROC, LLM, LLB Degree

Mr Bomela served his articles of clerkship with the Law Society School for Legal Practice, Schutz and De Jager and Lawyers for Human Rights (Karoo Mobile Law Clinic).He served as a Public Prosecutor with the Department of Justice and Constitutional Development and was appointed as an Assistant State Attorney and a Senior Assistant Attorney with the State Attorney, Bloemfontein and Bisho.

He practiced in partnership as a Director in the Law firm du Toit Bomela and later practiced in his own account under the name and style Bomela’s. He later joined the Department of Health, Free State as a Director Legal Services. He left the Department and became a Company Secretary for Centlec (SOC) Limited. While serving as such, he continued practicing for his own account. He has practiced as an Attorney for 14 years and he is currently with the Free State Society as a practicing Advocate.

Mr Bomela is a former Non-Executive Director at Centlec (SOC) Limited, former member of the Free State Law Society Gender Committee, former Secretary (two terms) of the National Association of Democratic Lawyers, Free State, member of the Provincial Disciplinary Committee of the ANC PEC, Free State, member of Peace and Stability Committee of the ANC PEC, Free State, member of the Legal and Constitutional Affairs Committee of the ANC, Motheo Region. Mr Bomela’s current field of specialty is Corporate Governance, Labour Law, Administrative Law and the Law of Contracts. He is also an accredited Arbitrator, Mediator, Negotiator and Facilitator with the Arbitration Foundation of Southern Africa.



Dr J Van der Merwe


Chairperson of the Human Resource Committee

BSc., M. Science in Geology, PHD Geohydrology, Research at University of Arizona, Specialises in Civil Engineering and water management.

Senior Lecturer in Geohydrology: University of the Free State, Affiliated Researcher: Institution of Ground Water Studies, Member of WISA, Vice-Chairperson: Modder-Riet Catchment Management, Honorary Life Membership: Geological Society of South Africa.

He conducted a research at the University of Arizona, USA, specializing in Water Management and Engineering. He was Head of the Department of Civil Engineering at the Technikon of the Free State (now Central University of Technology), joined the Department of Water Affairs and Forestry in 1988 as Deputy Director, Water Quality and Geohydrology in the Free State Regional Office. He retired in 2008 as Deputy Director: Strategic Support from the Department of Water Affairs.

He is an Affiliated Researcher at the Institute of Ground Water Studies at the University of the Free State and is also a member of the Water Institute of Southern Africa as well as a member of the Ground Water Division of the Geological Society of South Africa. As one of the representatives of Bloem Water, he was elected as Vice-Chairperson of the Modder-Riet Catchment Management Forum (an Institutional Committee of the Department of Water Affairs).

Ms Caroline Phetwe


BCom (Accounting and Auditing) from North West , Certified Fraud Examiner from University of Pretoria, Programme in Strategy Alignment from Stellenbosch University, BDFM Online Certificate on Legal, Ethics and Risk Management.

Process Monitor Manager at Momentum, Senior HR & Risk Manager at Transnet Pension Fund Administrators, Internal Auditor at Gobodo Corporate Governance Services and Khula Enterprise Finance Limited. Former member and Chairperson of board HR Committee at Brakpan Bus Company, and Disaster Relief Fund in the Department of Social Development Services.

Ms Phetwe consults in risk management frameworks. She is a member of the Audit Committee of the Department of Women in the Presidency, Audit Committee of West Rand District Municipality, and Chairperson of the Risk Management Committee for Randfontein Local Municipality.

She is a member of other professional bodies; GARP, Institute of Internal Auditors South Africa, and Information Systems and Control Association (ISACA). She has served as a director on various other boards and board committees. She served on the board of Brakpan Bus Company, where she was Chairperson of the Board HR Committee.



Dr MJ Ellman


BSc (Chem Eng) from University of Cape Town; MSc (Chem Eng) from University of Twente, Enschede, The Netherlands; PhD (Chem Eng) (cum laude) from Institute National Polytechnique de Lorraine, Nancy, France; MBA from Wits Business School, University of the Witwatersrand, Johannesburg; Project Finance Modelling, Euromoney, March 2013; Certificate in Sectional Title Bookkeeping (Paddocks/UCT, 2010); Certificate in Marketing & Customer Centricity, University of Johannesburg, 2007.

Managing Director: Thembalethu Engineering Services (Pty) Ltd, 2006 to present (project development and investment in the energy sector – electricity, renewables, gas, petroleum, etc.); Executive Director: Siyadingana Consulting (Pty) Ltd, 2002 to present (management and technical consulting to the energy sector – electricity, gas, petroleum, renewables, etc.); Executive Director: Siyadingana Properties (Pty) Ltd, 2006 to present (investment in, and letting of, property).

Non-Executive Director: Rand Water, 2002 to 2014; Non-Executive Director: Rand Water Services (Pty) Ltd, 2005 to 2008; Non-Executive Director: SABS, 2009 to 2014; Non-Executive Director: International Electrotechnical Commission (IEC), Geneva, Switzerland, 1999 to 2006; General Manager – Market Operations and Monitoring: National Electricity Regulator, 1999 to 2003 (responsible for electricity industry pricing, long-term capacity planning (NIRP), ESI restructuring, electrotechnical standardization, etc.); Corporate Consultant and Integrated Electricity Planning (IEP) Facilitator: Eskom, 1996 to 1999 (responsible for long-term capacity planning (IEP); Manager Production Planning & Economics, later Manager Business Development (strategic planning & marketing): Mossgas, 1988 to 1993.

Mr Z Mkiva


BA Social Science) and Honours Development Studies from University of the Western Cape (UWC), Training in Communications: University of Cape Town, Centre for Arbitration, Conciliation, and Mediation, Finance Managers: UCT Graduate School of Business.

Zolani Mkiva is an international acclaimed heritage practitioner and cultural activist. He is a well-respected policy maker who employs indigenous knowledge systems in carrying out his role. Zolani was born and raised in Dutywa, a rural town of the Eastern Cape Province of South Africa. He comes from a family with a lineage of oral traditional poets and regiments of African Royalty.

Mkiva is also an African renowned producer and director of artistic works that resonate with music, poetry and film. He has produced more than 20 music albums, including international singles for a myriad of countries, namely, Cuba, Cote D’Ivoire, Libya, Venezuela, Swaziland, and Colombia

Zolani Mkiva is an organic intellectual who has authored and published books and papers. In 2008 he was appointed as a Government Advisor on Traditional Affairs, working closely with the National Minister responsible for Cooperative Governance and Traditional Affairs. During his tenure as Government Advisor he managed to turn around a number of areas in the traditional affairs landscape. He was very instrumental in the establishment of the new national department of Traditional Affairs, formulating its strategic plan and structure.

ORGANIZATIONAL STRUCTURE - ADMINISTRATION


Organizational Structure - Administration

The day-to-day management of Bloem Water is the responsibility of the Chief Executive and Executives of the main line functions of the Organisation, namely Finance, Operations and Maintenance, Engineering and Projects, Human Resources, Corporate Services and the Board Secretariat. This team is responsible and accountable for the delivery of value to the shareholders and stakeholders, in line with Bloem Water Vision, Mission, Strategic goals and objectives. Executive leadership of Bloem Water is depicted in the structure below as at 30 June 2014.The Executive: Engineering and Projects resigned at the end of financial year and the position will be filled in the next financial year.

THE BOARD

Dr Limakatso Moorosi Chief Executive Officer

Mr Ockert Stadler Chief Financial Officer

Ms Thandi Kgantsi Executive: Corporate Support

Mr Elton !Gaoseb Executive: Engineering & Projects

Mr Mokutu Kgwale Executive: Operations & Maintenance

Ms Sandra Meyer Executive: Human Resources

FOREWORD BY CHAIRPERSON


Foreword by Chairperson

Mr TB Phitsane Chairperson of the Board

This annual report for the period 1 July 2013 to 30 June 2014 has incorporated the performance of the Board in line with the mandate set in the Business Plan as submitted to the Minister during the year under review. This year demonstrated a radical shift from which the Board used to do its business in the areas of service. In its 22 years of existence, the Board has been servicing the areas that have been gradually losing its tax base due to social and economic challenges. On a positive note, the main client of the Board being Mangaung Metro is contributing significantly to the income of the Board.

The Board therefore had to review its approaches and accommodate water related needs of the communities within the areas of supply. The interventions included continuous technical assistance to Municipalities with regard to water quality management and other water infrastructure augmentation projects. This has improved stakeholder relationships and working together with the Provincial Government. This financial year saw the Board winning two awards for its strong focus on quality, leadership and performance.

Notwithstanding the achievements in complying with its mandate Bloem Water acknowledges that the 2 years of on-going drought in the region had posed challenges on the smooth supply of bulk water. Almost all the natural dams and rivers were running dry threatening the availability of water in the areas of supply. Other obstacles have always been aged infrastructure and high demand due to growing communities.

The Board in an attempt to address these obstacles has adopted short and long term solutions. Included are further exploration of ground water, as well as upgrading and refurbishment of existing infrastructure. Political solutions also resulted in high level bilateral between the Free State Government and the National Department of Water and Sanitation(DWS), led by the Provincial Premier and the then Minister in March 2014. Alternative sources were discussed amongst others the possibility of utilisation of water from Katse and Gariep dams.

The Water Boards have been acknowledged by the Department of Water and Sanitation playing an important role in socio-economic development. Bloem Water has therefore been involved as Implementing Agent in DWS projects mainly in Bucket Eradication Program where Free State Province is mostly affected. The financial position of Bloem Water remains viable despite the challenging economic environment. The Board will continuously strive to guide through its oversight the financial and overall performance of the institution by enforcing principles and codes of corporate practices in King III.

Finally the appointment of the new Board was effected by the Minister in April 2014. This saw the remarkable growth of the Board with regard to the number of directors, pool of expertise and skills. I am excited that this will assist in taking Bloem Water to even higher levels of performance as it has already identified areas of expansion that have been submitted to the Department of Water and Sanitation for consideration.

I would like to express my sincere gratitude to the political direction from both Provincial and National levels and to my colleagues in the Board, administration and business partners for the ongoing commitment and support to this very basic need of humanity.

TB Phitsane

Chairperson of the Board

CHIEF EXECUTIVE’S OVERVIEW


Chief E xe cutive’s Overview

Dr L Moorosi Chief Executive

Bloem Water is pleased to present its annual report for the 2013/14 financial year. This year has been a rather busy year making the entity a moving force in the water related industry. In an attempt to fulfil its strategic mandate, Bloem Water despite adverse climatic conditions performed considerably well on its distribution of bulk portable water in areas of its supply.

Bid Group One awarded Bloem Water with an International Star for Leadership in Quality at the annual Quality Convention held in Paris.A silver award was bestowed on Bloem Water in the category for Water Providing Companies by PMR Africa Golden Award.

Despite its achievements, Bloem Water still needs to confront various difficulties experienced during the year under review. These difficulties are around resource-based economy and overall poverty in areas of its service. Ageing infrastructure that is being continuously refurbished and upgraded will only be completed in the next few years. Currently Bloem Water supplies water to a population in excess of 1.2 million people in the areas of service; whereby the following Water Service Authorities (i.e. Municipalities) are serviced.

� Mangaung Metropolitan Municipality;

� Mantsopa Local Municipality;

� Naledi Local Municipality; and

� Kopanong Local Municipality

Service level agreements have been signed with Kopanong and Mantsopa Municipality and Bloem Water together with the other municipality are in the process of finalising the agreement.

Expansion beyond the service areas has been the one of the main goals during the financial year. The Metro has been the main client and it has therefore been necessary for Bloem Water to identify other areas for expansion of its business. Several areas for expansion have already been identified and submitted to the Department of Water and Sanitation for consideration. This will serve a dual purpose in terms of growing the institution whilst rendering services to previously un-served or under-served areas.

Human Capital development has been a focus in achieving our strategic goals and objectives. A highly skilled workforce has never been so much in demand in the water environment. Issues of quality are gradually having a centre stage in the communities we serve. Therefore training of processed controllers and all artisans in the plants is a priority in skills development. This has been reflected in the high number of old staff retiring, leaving the young ones in need of the experience in the field making the succession plan and mentorship more urgent.

Infrastructure development and maintenance have necessitated partnering with the Shareholder. Several projects that are aimed to augment water supply to areas of service have been successfully completed in 2013/14. These projects were informed by the Greater Bloemfontein Water Reconciliation Strategy Study. Despite continuous maintenance and refurbishment of existing infrastructure, effects of ageing infrastructure were felt when the main pipeline supplying greater Bloemfontein burst in September 2013 threatening infrastructure stability and water supply.

The scenario analysis for future water demand predicts increasing demand which will necessitate that Bloem Water look for alternatives and sustainable supply since the current water sources are fully dependant on rainfall.

CHIEF EXECUTIVE’S OVERVIEW


In the Water Reconciliation Strategy Study, the Department of Water and Sanitation together with Bloem Water identified Gariep Dam pipeline as one of the alternatives. In order to address the rural parts of the service areas, Bloem Water has embarked on ground water exploration.

This is intended to alleviate the high demand on natural resources and ensure sustainable supply. The sustainable water supply will ensure effective implementation of bucket eradication in the areas of service and Province in general. A total of 35 849 buckets is being eradicated in the province.

The organisation has seen a steady increase in a net income. This indicates that the financial position is viable and stable. It is however important to caution that the continuous non-payment by some municipalities will ultimately put Bloem Water at a risk of not fulfilling its important mandate of delivering a basic need.

Finally Bloem Water will continue to have meaningful engagement with stakeholders to ensure continuous improvement in service delivery. Relations with other Boards through twinning programs will enhance the benchmarking process in pursuit of best practices.

I would like to appreciate the endless support and leadership of the Board, the commitment and dedication of all members of staff and unions. It is through your efforts that the organisation continues to excel in its activities. I also would like to acknowledge all the stakeholders, particularly the shareholder and Provincial Government for their willingness to support and engage in issues of joint interest.

DR L MOOROSI

CHIEF EXECUTIVE

ORGANISATIONAL BACKGROUND


Organisational Background

Bloem Water, formerly known as the Bloem Area Water Board, was established in 1991 in terms with the Water Services Act (Act 108 of 1997). The primary aim for establishing the Water Board was to operate the Caledon/Bloemfontein Government Water Scheme, constructed to supply purified water to the Municipal areas of Bloemfontein, Bainsvlei, Bloemspruit, Botshabelo and Dewetsdorp. The name was officially changed from “Bloem Area Water Board” to “Bloem Water” in 1994.

Bloem Water is, in terms of the Public Finance Management Act (PFMA), Act 1 of 1999, a Schedule 3B, National Government Business Enterprise, which reports to the Executive Authority, represented by the Minister of Department of Water and Sanitation.

During 1995 the service area of Bloem Water was extended to include the Southern Free State, adding towns such as Bethulie and Philippolis.

The bottom line for any organisation, barring financial performance and sustainability is constant development from within. The financial well-being of Bloem Water is therefore portrayed in our Financial Statements and Annual Report. Universally, shareholders are now seeking commitment from organisations by demanding sound reporting on not only the organisation’s financial status, but also on its commitment to the environment and social issues. This is a requirement placed on Bloem Water by the shareholder being the Department of Water and Sanitation.

The primary reason for establishing the Water Board was to operate the Caledon/Bloemfontein Government Water Scheme, constructed to supply purified water to the Municipal areas of Bloemfontein, Bainsvlei, Bloemspruit, Botshabelo and Dewetsdorp. During 1995 the service area of Bloem Water was extended to include the southern Free State, adding towns such as Bethulie, Philippolis, Trompsburg, Springfontein, Fauriesmith and Jaggersfontein.

In 1996 the Minister of Water and Environmental Affairs further extended the area of supply to include the Thaba ‘Nchu district, which added the responsibility to supply water directly to the inhabitants of rural areas, in addition to the formal urban areas. More recently the service area has been extended to include parts of the Eastern Free State up to the town of Excelsior.

Today Bloem Water supplies water to a population in excess of 1.2 million people in the areas referred to in Figure 1, whereby services are rendered to the following Water Service Authorities (i.e. Municipalities).

� Mangaung Metropolitan Municipality,

� Mantsopa Local Municipality,

� Naledi Local Municipality, and


Bloem Water has entered into Service Level Agreement with two municipalities, Mantsopa and Kopanong. The process to finalise agreement with other two municipalities is underway.



AREAS OF SERVICE

Figure 1: Bloem Water Area of Service



Figure 2: Greater Bloemfontein Water Supply System

CORPORATE SOCIAL RESPONSIBILITY


Corporate Social Re sponsibility

CORPORATE SOCIAL RESPONSIBILITY


Over the past year Bloem Water participated in various development initiatives aimed at uplifting the livelihood of communities around the areas of service. The admin department has managed to implement corporate social responsibility initiatives in different community sectors. The focus was around the rural areas and those communities that are stricken by poverty in general. The following areas were given preference:

� Hygiene related projects at schools � Upgrading of toilets in commemoration of world toilet day in partnership with several schools from under

developed areas. � Distribution of water tankers and rollers in line with Rain Harvest Programme. � Some schools were donated with school uniforms.

CORPORATE SOCIAL RESPONSIBILITY PROGRAMMES

50 learners from two different schools in Van Standerus have received winter uniform.

Two Voluntary health care givers from Thaba ‘Nchu received health related training and uniform.

25 learners in Jacobsdaal - Phambili Primary School, Rouxville - (2 schools) Naledi Primary and JB Tyu Primary and Feyane Primary in Thaba ‘Nchu.

Work hand in hand with DWS in water related community projects such as water week in Jacobsdal at Naledi Primary and JB Tyu Primary.

School Hygiene programme is ongoing with the participation of 25 schools in Mangaung, Bloemfontein, Free State. The programme is celebrated during the World Toilet Day of which Bloem Water is a member and also in an attempt to improve hygiene in schools.

CORPORATE GOVERNANCE


Corporate Governance

The Board of Bloem Water is responsible for effective leadership based on an ethical foundation. The Board reaffirms its commitment to sound governance and considers the application of sound corporate governance structures, policies and practices as critical to ensuring that Bloem Water is effective, efficient, economical, and creates sustainable value and benefits for its stakeholders.

Corporate governance embodies processes and systems by which Bloem Water is directed, controlled and held to account. In addition to legislative requirements based on a public entity’s enabling legislation, and the Companies Act, corporate governance in Bloem Water is applied through the precepts of the Public Finance Management Act (PFMA) and run in tandem with the principles contained in the King’s Report on Corporate Governance.

THE BOARD The Board operates in terms of a mandate set out as per the Water Services Act, Act 108 of 1997 and various other legislation as well as the King Code on Corporate Governance. The Board provides strategic direction to the organisation via quarterly Board meetings and the effective functioning of its sub-Committees. It reviews and directs the Company’s strategic objectives, annual Budget and Plans as well as guides the overall strategic performance of the Company.

THE BOARD’S MANDATE The Board operates in terms of a mandate set out as per the Water Services Act, Act 108 of 1997 and various other legislation as well as the King Code.

Key functions of the Board include, but are not limited to:

� Determining the strategic direction of Bloem Water.

� Approving Strategic Plans and Programmes.

� Monitoring the implementation of Strategic Plans and Programmes.

� Monitoring the performance of Bloem Water from financial, human resources, environmental and technical performance perspective.

� Annually reassessing the Board Committees’ mandate by reviewing each Committee’s Charter.

� Annually reassessing the strategic direction of the entity by gauging progress in relation to the implementation plans following the set of strategic objectives defined by the Board.

� Delegating to the Chief Executive and Executive Management the authority to manage the Organisation in accordance with the delegated authorities approved.

� Defining levels of materiality and evaluating as well as reporting on the reasons for issuing a going concern statement.

BOARD CHARTER The Board is guided in its actions by the Board Charter which is reviewed annually. The primary objective of the Board Charter is to set out the role and responsibilities of the Board as well as the requirements for its composition and meetings. The Charter requires that Directors exercise leadership, enterprise, integrity and sound judgment, accountability, responsibility and transparency throughout their term of office. The Board Charter was reviewed and approved by the Board for the 2013/14 Financial Year.

COMPOSITION OF THE BOARD The Board of Directors of Bloem Water’s term of office commenced in April 2009 and expired at the end of April 2014. Bloem Water received appointment of new members in June even though their actual appointment was done in April 2014.

The Board is constituted of 9 Non-Executive Directors, 1 Executive Director (The Chief Executive) and a representative from the Department of Water and Sanitation. The Board is comprised of specialists in various fields and representative of a balanced skill-based Board which include finance, corporate governance, risk management, legal, human resources, water and energy. The table below indicates members of the board and placement in board committees as at 30 June 2014.



Table 1: Board Composition

Board Members Gender Audit Committee Finance Committee Human Resource Committee

1. Mr TB Phitsane Male �

2. Dr J van der Merwe Male � �

3. Mr N Mokhesi Male � �

4. Ms MSS Maboe Female �

5. Mr L Bomela Male � �

6. Dr L Moorosi Female � � �

7. Ms C Phetwe Female ±

8. Mr Z Mkiva Male ±

9. Dr MJ Ellman Male ±

10. Ms. Puseletso Matete Female ±

± New Board Member �In Attendance

BOARD COMMITTEES Committees of the Board assist the Board to efficiently advance the business of the Board. In tandem with the aforesaid, Committees are able to demonstrate that Director Responsibilities are being adequately and properly discharged.

The Board has created procedures and proper written mandates or Charters for its Committee to operate in.

� The Chairpersons Committee is mandated to oversee and ensure Board capacity development, Board performance, integrated planning, stakeholder relations and performance evaluations.

� The Audit Committee is responsible for internal and external audit, materiality, and fraud and risk management.

� The Finance Committee’s mandate is to oversee financial control, policy development, supply chain management, budgeting and the evaluation of all major projects.

� The Human Resources Committee – The primary focus of this Committee is that of developing and implementing a competitive Human Resource Strategy and Plan which can attract, retain and develop the best possible skills to support business performance.

The following structure depicts the Board Composition as at 31 March 2014 before appointment of new Board members. Subsequent to year-end, the Board Committees have been restructured.



BOARD COMMITTEE MEETINGS AND ATTENDANCE The Board meets at least once per quarter and when necessary. During the period under review, Board meetings and a Board Strategy Session was also held to review key strategies of the organisation. All documents submitted to the Board are approved by the Chief Executive Officer to ensure completeness and relevance.

Members of the Executive Committee, Company Secretary and the Chief Risk Officer are regular attendees at Board meetings and report to the Board on their respective operational areas. The attendance record for meetings during the period under review was as follows:

Table 2: Board Meeting Attendance

Board Members

Board Meeting Attendance Board Strategy

2 July

2013

29 July

2013

3 October

2013

21 October

2013

3 December

2013

15 April

2014

6 March

2014

1. Mr TB Phitsane � � � � � � �

2. Dr J van der Merwe ≠ � � � � � �

3. Mr N Mokhesi � � ≠ � � � �

4. Ms MSS Maboe � � � ≠ � � �

5. Mr L Bomela ≠ � � ≠ � � �

6. Dr L Moorosi � � � � � � �

7. Ms C Phetwe †

8. Ms. P Matete †

9. Mr Z Mkiva †

10. Dr MJ Ellman †

�In Attendance † Newly Appointed members ≠ Apology

Acting Chairperson Mr TB Phitsane

Human Resources

Committee Dr J van der Merwe

(Chairperson)

Ms MSS Maboe Mr L Bomela

Finance Committee Mr TB Phitsane (Chairperson)

Ms MSS Maboe Mr N Mokhesi

Audit Committee

Mr N Mokhesi (Chairperson)

Dr J van der Merwe

Dr L Moorosi Mr L Bomela

Chairpersons Committee Mr TB Phitsane(Chairperson)

Dr J van der Merwe

Mr N Mokhesi

Vice-Chairperson (Vacant)



Audit Committee The purpose of the Audit Committee is to assist the Board and Management to effectively and inter alia discharge their Corporate Governance responsibilities. Responsibilities of the Audit Committee included:

a) Ensure improved communication between stakeholders including the shareholders, Board, Management and Auditors.

b) Report and make recommendations to the Board.

c) Report on the effectiveness of internal controls in the Annual Report of Bloem Water.

d) Evaluate the quality of internal control and accounting functions as well as the objectivity and credibility of financial reporting and the adequacy of the risk management system and process.

e) Give guidance to the Board and Management to fulfill their Governance and legal responsibilities.

f) Ensure that there is effective independence and objectivity of the external Auditors as well as the internal audit function.

A summary of attendance of Audit Committee meetings is summarised below.

Table 3: Audit Committee Attendance

Members

Meeting Attendance Percent Attendance Per Member

%

15 August 2013 8 October 2013 4 March 2014 5 June 2014

1. Dr J van der Merwe � � � ≠ 75

2. Mr N Mokhesi � � � � 100

3. Mr L Bomela ≠ � � � 75

4. Dr L Moorosi � � � � 100

Percent Attendance Per Meeting %

75 100 100 75 87.5

≠ Apology� In Attendance

Finance Committee The Finance Committee assisted the Board in fulfilling its oversight role with regards to governance of financial management and financial accounting by reviewing quarterly, financial statements, investment management, and procurement process through meetings which were held at least once a quarter. The Committee monitored

and evaluated the effective and efficient functioning and operation of the Finance, Engineering and Projects and Operations and Maintenance Departments within Bloem Water. A table below summarises attendance by Committee members.

Table 4: Finance Committee

Members

Meeting Attendance Percent Attendance Per Member

% 5 August 2013 8 October 2013 6 February 2014 6 May 2014

1. Mr TB Phitsane � � � � 100

2. Mr N Mokhesi � � � � 100

3. Ms Maboe ≠ � � � 75

4. Dr L Moorosi ≠ � ≠ � 50


50 100 75 100 81.25

≠ Apology � In Attendance



Human Resource Committee The primary objective of the Committee is to develop and implement a competitive Human Resource Strategy and Plan to ensure that Bloem Water is able to attract, retain and develop the best possible skills to support business performance.

For the year under review, the Committee reviewed and recommended Organisational Structure, Reviewed Information Technology Systems within Bloem Water and other activities related to Corporate Support and Human Resource Department. A summary of attendance by Committee members is given below.

Table 5: Human Resource Committee

≠ Apology � In Attendance

REMUNERATION OF BOARD MEMBERS Directors are remunerated in accordance to a set policy formulated by the Department of Water and Sanitation. Director fees paid during the year under review is contained in the annual financial statements.

COMPLIANCE Bloem Water is committed to complying with all applicable legislation. The Bloem Water Board has taken conscious steps to improve governance standards by striving to adhere to the King III Report (Corporate Governance chapter). Bloem Water in a quest to comply created and designated the position of the Compliance Officer to the Chief Risk Officer.

The Compliance Officer responsibilities include among others, development and implementation of the Compliance Policy and Framework. Compliance Policy was developed reviewed by the Audit Committee and will be presented to the Board for review and approval.

SHAREHOLDER COMPACT The Shareholder Compact is an agreement between a Public Entity and the Executive Authority. It entails the key performance measures and indicators that the Public Entity commits to. A Shareholder Compact is concluded in compliance with Regulation 20 of the Treasury Regulations of the PFMA, which stipulate that on an annual basis the Public Entity should conclude a Shareholder Compact in consultation with its Accounting Authority.

Bloem Water has in the year under review concluded a Shareholder Compact with the Minister of Water and Sanitation. Compliance with the Shareholder Compact is reported on a quarterly basis by submission of quarterly performance reports to the Minister. Shareholders Compact for the new financial year awaits approval by the Minister of Department of Water and Sanitation.

Members

Meeting Attendance Percent Attendance

Per Member %

22 August 2013 12 November 2013 20 February 2014 20 May 2014

1. Dr J van der Merwe � � � � 100

2. Mr L Bomela ≠ ≠ � � 50

3. Ms Maboe � � � � 100

4. Dr L Moorosi ≠ � ≠ � 50


50 75 75 100 75



DIRECTORS’ INDUCTION/ORIENTATION Bloem Water’s Induction Programme is designed to provide best practice inducting and supporting new Directors and further, to equip the members with the information and tools they need to become effective and valuable in their role as Director as soon as possible. The focus is more on applicable legislation to make the new Directors understand more their fiduciary roles and responsibilities.

Board induction for the newly appointed members was conducted on 18 June 2014 where Executives presented on their respective departments. Newly appointed members were provided with induction material which included Business Plans, Shareholders Compact, Board Charter, and Board Standing Orders, Board Committee Charters as well as other material on organisation background.

CORPORATE GOVERNANCE PRACTICES ENSURING DIRECTORS’ INTERESTS ANDINDEPENDENCE A Declaration of Interest Register is available for inspection from Bloem Water’s Head Office. A Declaration of Interest insertion is a standing item on each Agenda of every meeting of the Board ensuring that Directors and Executive Management declare any interest they may have as prescribed by the Water Services Act, Act 108 of 1997 and the Companies Act, Act 71 of 2008, and as directed by sound Corporate Governance principles encapsulated within the King Code.

Bloem Water also expects its designated employees to complete disclosure forms of interest on an annual basis. Director independence from an executive perspective is ensured through the separation of the role of the Chief Executive and the Chairperson, the absence of the Chief Executive’s right to vote and the right of Directors to seek independent professional advice on the affairs of Bloem Water at any given time.

LEGISLATIVE RECORD KEEPING As prescribed by legislation, the following statutory records are kept and maintained by the Board Secretariat at Bloem Water’s Head Office and is available for inspection:

� Register of Directors

� Declaration of Interest Register

� Gift Register

� Attendance Registers

� Minute Books

BOARD ASSESSMENTS The Board of Directors underwent a Board evaluation process conducted by the Institute of Directors. The process was welcomed by all participants and proved to be an exercise well worth undertaking. It is axiomatic to assess the Board’s performance in carrying out its responsibilities; therefore the Board must have a firm understanding of just what its responsibilities are and how it has performed. Where areas of improvement were identified, research will be done to enhance this vital process in terms of Governance practices.

EXECUTIVE MANAGEMENT COMMITTEE Bloem Water has established Executive Committee which manages day to day operations of the Company. Executive Committee (EXCO) consists of all executives and the Company Secretary. The Committee meets at least once per month and when circumstances necessitate. Decisions are taken in accordance with Bloem Water’s delegation of authority, which is also informed by materiality and significance framework.

RISK MANAGEMENT The Board has implemented an enterprise wide risk management system, which incorporates continuous risk assessment, evaluation, monitoring and reporting. Bloem Water’s report on its risk management process and systems of internal control is included in the Risk Management Report.



INTERNAL AUDIT Bloem Water internal audit activities were outsourced from Ernst and Young for the year under review. Internal audit reports administratively to the Chief Executive Officer and functionally to the Audit and Risk Committee. Internal audit functions independently of all other business operations and has free and unrestricted access to all areas within the company, including management, personnel, activities, locations and information. Internal Audit Charter was reviewed and approved by the Board.

COMPANY SECRETARY Bloem Water, in compliance with the Companies Act, Act 71 of 2008, created the position of Company Secretary. The key functions of the Company Secretary are to provide support and guidance on governance issues to the Board. Further the Company Secretary, in conjunction with Board Secretariat, provide secretariat services to the Board and its operations by conducting continuous governance updates and legislative notifications pertaining to good governance practices and advising on matters of compliance, thus ensuring and promoting ethical business practices and creating an overall ethical corporate environment.

RISK MANAGEMENT AND FRAUD PREVENTION


Risk Manage ment and Fraud Preventi on

RISK MANAGEMENT The Board is ultimately responsible for risk management and this includes a risk oversight structure and maintaining an appropriate internal control framework through the Audit Committee. The Board has adopted an enterprise wide approach to risk management and this approach is documented in the risk management policy and strategy implemented by management. The Board carries out its risk governance responsibility for Risk Management through the Fraud Prevention and Risk Management Committee. Risk Management function supports implementation of Bloem Water's risk management policy, facilitates and coordinates risk management activities, and prepares quarterly risk reports for executive management, Audit, Finance and Human Resource Committee. The Board oversees risk management process in accordance with the principles of corporate governance. However, risk management is the responsibility of everyone within Bloem Water.

Risk Management Framework The Board and its committees retain an obligation to remain informed not only of the risks to the organisation, but also to the effectiveness of risk management efforts. The Board and the Audit Committee have responsibility to the stakeholders of the organisation to ensure that the risk management framework of the organisation is appropriate to the nature of the organisation and the risks the organisation faces. Bloem Water Risk Management framework consists of the governance structure and risk management process adopted from ISO 31000.

Risk Assessments and Reporting During the period under review, risk assessments were conducted for various departments including Regions (Modder River, Caledon River, and Orange River).

Risk Awareness Risk Awareness sessions are conducted with employees and questionnaires are used to obtain feedback on the impact that sessions had on employees’ attitude and knowledge on risk management. Feedback obtained was used to properly plan risk awareness sessions. Risk Management posters and pamphlets were develop and distributed to employees to improve awareness on Risk Management.

Strategic Risks Strategic risks were identified, reviewed by the Audit Committee and approved by the Board. Departmental Risk Registers are reviewed and progress on implementation of action plans is reported on a quarterly basis to the Audit Committee focusing on risks above tolerance levels. Risk Assessments are conducted in the Regions focusing on catchment, water treatment works and distribution and forms a basis for development of Water Safety Plans.



The following key risks issues were monitored and action plans implemented to manage them to acceptable levels:

Table 6: Significant Risks

RISK DESCRIPTION Inherent Rating

Residual Rating

INTERNAL CONTROLS &REMEDIAL ACTION

Late/No payments by municipalities for services provided

High Moderate � Develop a plan to support and assist municipalities to improve metering and payment system.

� Assist municipalities to identify main water issues and establish intervention programme.

� Maintain four months operational reserves

� Review and update of Service Level Agreements

Reduced tariff approval

High Low � Review Tariff Strategy

� Participate in Tariff Methodology Research

� Planned and phasing out under-recovery

� Tariff Policy

Poor Corporate Governance

High Low � Functional Executive Committee, Board and its Committees

� Annual review, update and approval of policies

� Compliance monitoring

� Internal Audit Plan approved

Reduced yield of water supply in the area of service

Extreme Moderate � Ground water utilisation

� Rain Water harvesting loose

� Rehabilitation of Pre-stressed Concrete Pipeline

� Rehabilitate and establish new boreholes

� Increase storage capacity

� Extend treatment capacity in Bethulie

Water Quality Failure

Extreme Low � Establishment of Scientific Laboratories commenced and the project will be implemented in the next financial year

� Training of Samplers & Process Controllers

� Water Safety Plans developed and approved. Progress on implementation monitored on a quarterly basis

� Continued water testing according to compliance programme.

Deteriorating and ageing water infrastructure

Extreme Moderate � Projects implemented according to the approved CAPEX Plan

� Prioritisation of Projects for refurbishment and replacement of infrastructure.

Labour unrests/Strikes

Extreme Low � Maintained good relationships with employees and Local Labour forums

� Maintain market related remuneration

� Compliance to Labour Relations Act, Employment Equity Act, Basic Conditions of employment act, Skills development act

Adverse climate conditions resulting in droughts and floods

Extreme Moderate � Review and update Incident Management Protocol for water quality

� Development of Business Continuity Policy and Plans

� Approved Water restrictions applied

� Water Demand and Water Conservation Management Plans

� Weather pattern monitoring and notifications by relevant authorities



RISK DESCRIPTION Inherent Rating

Residual Rating

INTERNAL CONTROLS &REMEDIAL ACTION

Inability to acquire and retain relevant skills affecting operations and growth aspirations

Extreme Low � Succession planning

� Retention plan

� Workforce Plan

Loss of data and information

Extreme Moderate � Review and development of an Enterprise Resource Planning(ERP) System

� Information Technology policies were reviewed, updated and approved

Workplace injuries

Extreme Moderate � SHEQ Policy developed and consultation with employees and labour forums 3

� SHEQ Policy awaits approval by the Board

� Appointment of Security guards

� Employee Wellness Program

Legislative/ Regulatory, policy and financial changes

Extreme Low � Anticipate and contribute to relevant changes in legislation and policy

� Participation in DWS Forums

� Board involvement in Stakeholder Management

� Delivery on the Mandate

� Partnership with other Water Boards and Regional institutions

Increase in Non-revenue water

Extreme Moderate � Intranet Water Model monitoring

� Implementation of Water Conservation and Water Demand Management Programme

� Water Re-use

FRAUD PREVENTION Bloem Water takes fraud seriously and is committed to ensuring that its systems and practices reduce the risk of fraud occurring. The Board together with management is committed to establishing and maintaining an honest, open and well intentioned atmosphere within the organisation. For the period under review, Bloem Water developed Anti-Fraud Policy, Strategy and implementation plan and Whistle Blowing procedures based on the Protected Disclosures Act.

These documents were taken for consultation with employees and Local Labour Forums to enable them to give inputs before they can be presented to the Board and its committees for approval which will take place in the next financial year.

FINANCIAL OVERVIEW


Financial Overview

Bloem Water is operating as a bulk water distributor and is rendering services of operation and maintenance, support and managerial services. The water industry is one of the most capital-intensive industries and a significant portion of overall expenditure is for financing infrastructure. The Board of Bloem Water implemented a capital levy and has built up reserves during previous years to fund refurbishment and investing in new infrastructure.

Bloem Water has been involved in refurbishments and upgrading of assets over the recent years. The Organisation revises its CAPEX Programme on a regular basis to ensure that the CAPEX requirements of infrastructure are optimally utilised. It enables Bloem Water to operate optimally and comply within financial directives and guidelines from the Department of Water and Sanitation and National Treasury.

The Organisation is the Implementing Agent for the Department of Human Settlement and Department of Water and Sanitation on various projects in the area. The Finance Department is responsible for the financial, budget and supply chain management sections.

These functions are mainly guided by the following legislative prescripts, directives and regulations in the execution of its duties:

� Water Service Act No. 108 of 1997

� Public Finance Management Act No. 1 of 1999

� Municipal Finance Management Act No. 56 of 2003

� Preferential Procurement Policy Framework, Act No. 5 of 2000

� Supply Chain Management Framework Act No. 5 of 2000

� Relevant directives issued by the Department of Water and Sanitation and National Treasury

The Financial Statements are prepared in a manner required by the Public Finance Management Act 1999, the Water Services Act 1997, and SA Statements of Generally Accepted Accounting Practice and also incorporates responsible disclosures in line with the

accounting practices of Bloem Water. The Financial Statements are based on appropriate accounting policies consistently applied and supported by reasonable, prudent judgements and estimates.

FINANCIAL OPERATING PERFORMANCE Bloem Water achieved steady results for the 2014 financial year in a challenging economic environment. Bloem Water’s positive bottom line performance in the current financial year can be attributed to robust financial control measures and efficient operating expenditure. National Treasury’s cost containment measures have been implemented which assisted in pruning the expense tree.

The comprehensive income generated during 2014 is improving Bloem Water’s liquidity ratio’s which is utilized in Capital Projects to maintain and expand water infrastructure.

This increase in net income is as a result of green innovations, operational efficiencies and reprioritisation of expenditure.

Constant close liaison between the Board and Management contributes to effective cost containment measures, impairment of trade receivables control and a strict budget policy resulted in a surplus of R65,6 million. An amount of R1,334 million was transferred to the Insurance Fund, hence the retained earnings totalled R602,3 million at the end of the financial year.

The total bulk water sales for raw water were lower and treated water higher than the volumes budgeted for.

The Bulk Water Supply Contract between Mangaung Metropolitan Municipality, as the main customer, and Bloem Water regulates water supply to the Bloemfontein area and the raw water supplied was lower than the budgeted volumes, whereas the treated water supplied was higher than budgeted volumes.

FINANCIAL OVERVIEW


The total bulk water sales for raw water were lower and treated water higher than the volumes budgeted for. The Bulk Water Supply Contract between Mangaung Metropolitan Municipality, as the main customer, and Bloem Water regulates water supply to the Bloemfontein area and the raw water supplied was lower than the budgeted volumes, whereas the treated water supplied was higher than budgeted volumes.

The Contracts with other Municipalities similarly regulates the bulk supply volumes.

Bloem Water achieved robust results for the 2014 financial year during a challenging economic environment.

The Financial Statements reflect historical costs where the following were accounted for:

Description % of gross income Amount of gross income(R’000)

Bulk water sales 90,45 418 592

Finance income 5,19 24 035

Other income 4,36 20 178

Description % of gross expenditure Amount of gross expenditure

(R’000)

Operating expenditure 94,7 376 162

Finance cost 5,29 21 009

FINANCIAL OVERVIEW


MAIN COST DRIVERS Input cost increase above CPI such as water, energy, chemicals, staff and specialised equipment have a material impact on the operational cost, budgets and tariff increases.

Water volumes increased although the water charges reduced. It was as a result of reduced price increase determined by government pricing strategy and improved quality of raw water which results in reduced plant water losses. Stringent water loss measures are in place to ensure minimising of water losses.

Figure 3: Water Charges 2013/14 –to 2009/10 comparison

Energy increase is due to volume increase from additional pumping requirements and high tariff increases. Soft starters, turbines projects etc are implemented to assist with cost reduction.

Figure 4: Energy Cost 2013/14 -2009/10 Comparison

190002000021000220002300024000250002600027000

2013/14 2012/13 2011/12 2010/11 2009/10

Water Purchased (R'000)

01000020000300004000050000600007000080000

2013/14 2012/13 2011/12 2010/11 2009/10

Energy Cost (R'000)

FINANCIAL OVERVIEW


Chemical costs increased due to price increase and volume increase as a result of deteriorating of water quality. Effective dosing and innovation are implemented where possible to reduce the cost escalation.

Figure 5: Chemicals 2013/14 to 2009/10 Comparison

Staff cost escalated in line with approved salary increases and filling of a number of vacant positions in line with board’s strategic view.

Figure 6: Staff Costs 2013/14 to 2009/10 Comparison

0

2000

4000

6000

8000

10000

12000

14000

16000

2013/14 2012/13 2011/12 2010/11 2009/10

Chemicals Cost (R'000)

0

20000

40000

60000

80000

100000

120000

2013/14 2012/13 2011/12 2010/11 2009/10

Staff Cost (R'000)

FINANCIAL OVERVIEW


The increase in depreciation is due to the nature of the capital expenditure programmes. It is envisaged to utilise reserves for future infrastructure replacements and to smooth tariff increases. Budgets are proactively realigned when becoming aware of any unforeseen movements in the market place.

The financial position of Bloem Water remains viable, taking into account the considerable amount

payable in interest and capital redemption, as well as the involvement of Bloem Water in areas where services are rendered where operation and maintenance is performed with limited cost-recovery.

BULK WATER SALES ANALYSIS The total volume of treated water sold is in line with budgeted volumes. Bloem Water’s major client is Mangaung Metropolitan Municipality (MMM).

Table 7: Consumer Quantity Treated Water Sold (Kℓ)

2012/2013 2013/2014

Mangaung Metropolitan Municipality 68 498 881 67 767 395

Kopanong Local Municipality 5 359 420 5 250 900

Naledi Local Municipality 1 191 923 1 189 644

Mantsopa Local Municipality 174 610 165 342

Other (Bulk) 1 781 079 1 808 307

TOTAL 77 005 913 76 181 588

Table 8: Consumer Quantity Untreated Sold (Kℓ)

2012/2013 2013/2014

Mangaung Metropolitan Municipality 17 559 520 18 659 478

Other 2 145 8 702

TOTAL 17 601 665 18 668 180

Table 9: Future Water Demand (Sales) - (Million Kℓ per year) 2015 2018 2020

Mangaung Metropolitan Municipality 85,7 91,7 95,4

Naledi Local Municipality 1,9 2,0 2,1

Kopanong Local Municipality 5,3 5,6 5,8

Mantsopa Local Municipality 0,2 0,2 O,2

Other small customers 2,0 2,1 2,1

TOTAL 95,2 101,7 104,7

FINANCIAL OVERVIEW


BULK WATER TARRIFF Bloem Water strives towards full cost recovery by implementing a smoothed line tariff increase over a period. Capital cost is a major volatile component of tariff increases which remains a challenge due to engineering inflation exceeding CPI and the nature and age of our infrastructure.

Systems Tariffs (excluding VAT)

Cents per Kℓ

Bulk consumers

(Bloemfontein, Botshabelo, Bethulie, Dewetsdorp, Edenburg, Excelsior, Fauresmith, Gariep,

Jagersfontein, Phillippolis, Reddersburg, Springfontein, Trompsburg, Wepener and others)

437

Water research levy (Excluding VAT) 4,6

CASH FLOW ANALYSIS Comprehensive income contributed to the increase in cash generated from operating activities which will assist in reducing the cash outflow from finance activities and contribute to current and future capital investing programmes. Surplus cash are being utilized for Capital projects after making provision for an appropriate liquidity buffer.

FINANCIAL OVERVIEW


PERFORMANCE MEASUREMENT ACCORDING TO FINANCIAL RATIOS

Table 10: Financial Ratios

Performance and Measurement

2012/2013 2013/2014

LIQUIDITY

Current ratio 2,25 3,62

Debt-equity 0,43 0.53

SOLVENCY

Debt service/interest cover ratio 5,41 2,98

Debt ratio 0,2 0,35

PROFITABILITY

Current asset turnover 1,14 0,94

Return on assets 0,06 0,05

Asset turnover 0,35 0,34

Gross margin % based on operating profit 16,11% 15,0%

Gross margin % based on gross income 93,1% 94,4%

ACTIVITY/OPERATING

Fixed asset turnover 0,51 0,52

Inventory turnover 1,93 1,03

Debtors collection period 48,3 52,01

Accounts receivable 7,55 5,85

Working ratio 0,84 0,95

Controllable working ratio 0,67 0,73

Weighted Average Cost per Capital 0,07 0,05

SURPLUS RATIOS

Accounting surplus/fixed assets 0,09 0,08

Accounting surplus/revenue 0,17 0,16

BUSINESS CREDIT RISK

EBIT interest coverage 4,25 2,98

EBITDA interest coverage 6,99 5,23

Return on average total capital 0,08 0,11

EBITDA/Sales 0,27 0,26

Internal Financing Ratio 0,24 0,35

Financial leverage or Debt 0,24 0,35

FINANCIAL OVERVIEW


CAPITAL PROJECTS The Board of Bloem Water continued with the Capital Expenditure Programme and approves any amendments required to the existing Programme which affects the financial position of the Board. Comprehensive income, reserves, external borrowings and bulk infrastructure grants are being utilized to finance Capital cost.

RURAL DEVELOPMENT PROJECTS Bloem Water is involved in secondary activities and strives to ensure that future involvement and the risk associated with these operations are mitigated.

Bloem Water’s major project is the Bucket Eradication programme where Bloem Water Act as implementing agent on behalf of Department Human Settlement(DHS) and Department of Water and Sanitation(DWS). The main concern which remains is the non-payment of customers in cost-recovery environments.

INVESTMENTS Surplus cash are invested in line with board approved investment policy. Investment performance was sufficient due to realignment of Capital projects expenditure.

FUNDING REQUIREMENTS

Funding requirements are aligned to prioritised CAPEX needs analysis and approved borrowing limits. National Treasury approved borrowing limits for 5 years. The guidelines and set ratios by National Treasury and the Department are affected and insufficient external funding can be sourced during the next few years. The needs will have to be prioritised in line with the availability of financial resources.

DEFINED BENEFIT PENSION PLAN The Defined Benefit Plan is valuated in terms of IAS 19 and is currently in an under-funded position. The board of Trustees is putting various measures in place to move towards a fully funded position. Please refer to note of Annual Financial Statements for further detail.

FINANCIAL RISKS Bloem Water is concerned about the increase in outstanding debt and possible bad debt and has continued with Section 44 MFMA processes. The Board is continuing with negotiations in respect of the remaining arrears accounts.

The outstanding accounts of major local Municipalities deteriorated with the balance at year-end in comparison to the beginning of the year. Various sessions were arranged where the national and provincial offices of Treasury, Auditor-General, Department of Water and Sanitation participated.

The challenges that existed with Kopanong Local Municipality over the last few years were not resolved, although partial payment was received on recent accounts. A format of payment was agreed upon when the Municipality receives the equitable share, although the Municipality made little effort to comply with these conditions and payment has mostly not been made in accordance with the Agreement.

The payment of accounts by Naledi Local Municipality improved with payment of current accounts and agreements reach in terms of arrear accounts with the support of Cooperative Governance and Traditional Affairs (COGTA).

FINANCIAL OVERVIEW


ACCOUNTING POLICIES AND CHANGES IN ESTIMATES The Accounting Standard Board, National Treasury and the Auditor General have been in consultation with Water Boards regarding changing of applicable accounting standards. The following was released and is currently effective: GAAP reporting framework “50. The new Companies Act, 2008 (Act No. 71 of 2008) required a re-evaluation of the continued existence of statements of GAAP and resulted in a decision in March 2012 to withdraw statements of GAAP for financial years commencing on or after 1 December 2012. The withdrawal of statements of GAAP has an impact on schedule 2, 3B and 3D public entities that are required to apply the GAAP reporting framework.

51. In response, the ASB is currently researching and re-evaluating the appropriate reporting framework for schedule2, 3B and 3D public entities. The ASB will in due course determine the appropriate financial reporting framework to be applied by these entities, where after the requirements of legislation and the standards of GRAP will be aligned.

53. In the interim the ASB has approved the following in terms of paragraphs 5 and 6 of the Preface to the Standards of GRAP:

� Entities that previously applied statements of GAAP should continue to apply statements of GAAP as at 1 April 2012

� Entities that previously applied IFRS should continue to apply IFRS

54. The above implies that entities that apply IFRS are required to comply with all the latest IFRS standards and amendments to those standards. This is not the case for entities that apply statements of GAAP; such entities are required to continue to apply the 1 April 2012-version of the GAAP reporting framework.”

The effect changing from GAAP to IFRS as at 30 June 2014 will result in a Defined Benefit movement of R24 million (R20 million asset changing to a R4 million liability).

FUTURE PROSPECTS Bloem Water will contribute towards the water value chain in line with National and Provincial objectives which maintained financial viability. The implementation of projects on behalf of other government entities and investment in water service delivery will assist in making a better life for all.

FINANCIAL OVERVIEW


OPERATIONS AND MAINTENANCE


Operations and Mai ntenance

The continuation of effective service delivery is dependent on an effective drinking water supply system, corrective and preventative measures and operational controls necessary to ensure a safe and reliable drinking water supply. This is the core function of Operations and Maintenance Department, ensuring

an effective and reliable drinking water supply system. Bloem Water operations span three Regions: Modder River, Caledon River and Orange River Region. The following table gives a summary of Water Treatment Works capacity, Sources of water area of service.

Table 11: Bloem Water Regions and Systems

Region Source Pumping System Treatment Storage Area of Service

Orange

River

� Orange River

� Boreholes

� Driefontein

� Volgfontein

� Tolhuis

� Phillipolis

x 1.2 Mℓ/d

� Reservoirs x 2 � Phillipolis

� Gariep Dam � Gariep � Gariep

x 2.8 Mℓ/d

� Reservoirs x 2 � Gariep

� Orange River

� Boreholes

� SAR

� Kleinzuurfontein

� Hennie Steyn

� Brandewijnskuil

� Bethulie

x 12 Mℓ/d

� Reservoirs x 5 � Trompsburg

� Springfontein

� Jagersfontein Mine

� Boreholes

� Kalkfontein

� Lemoenkloof � Jagersfontein

x 2 Mℓ/d

� Reservoirs x 1 � Jagersfontein

� Fauresmith

Caledon

River

� Welbedacht Dam

� Caledon River

� Knellpoort Dam

� Boreholes

� Tienfontein

� Novo

� Reddersburg

� Edenburg

� Dewetsdorp

� Raw and Clear

water

� Welbedacht

x 145 Mℓ/d

� Reservoirs x 7 � Bloemfontein

� Dewetsdorp

� Wepener

� Reddersburg

� Edenburg

Modder

River

� Groothoek Dam

� Rustfontein Dam

� Knellpoort Dam

� Boreholes

� OK

� Groothoek

� Lesaka

� Raw and Clear

Water

� Rustfontein

x 100 Mℓ/d

� Groothoek

x 18 Mℓ/d

� Reservoirs x 6 � Thaba Nchu

� Botshabelo

� Villages



.

Weldam WTW Bethulie WTW

Gariep WTW Philippolis WTW

Groothoek WTW Rustfontein WTW



WATER QUALITY Access to safe drinking water is a basic human right and essential to people’s health. South Africa enshrines the basic right to sufficient water in its Constitution, stating that "Everyone has the right to have access to sufficient food and water”.

Drinking water has to comply with SANS (South African National Standard) 241:2011. The standard specifies the quality of acceptable drinking water defined in terms of microbiological, physical, aesthetic and chemical determinants at the point of delivery.

For the period under review, Bloem Water met the SANS 241:2011 requirements. Purification Plants from which water is distributed for human consumption are situated in three Bloem Water Regions.

To ensure compliance to drinking water standards, Water Quality Monitoring Programmes were

developed and implemented. Water is tested internally at Plant level and externally with the University of the Free State. Water was sampled at the source (before purification) as well as at the distribution points (after purification). Internally, at Plant level, the Monitoring Programme involves testing on a 2-hourly and 8-hourly basis. Externally, through the University of the Free State, bio-monitoring takes place quarterly and chemical monitoring and microbial monitoring takes place weekly, bi-monthly and monthly.

The Drinking Water Quality results (i.e. Microbiology and Chemical quality) for the 2013/14 financial year at the various schemes are uploaded on the DWS Blue Drop System and compliance per system is summarised below:

Table 8.3: Water Quality Compliance SAN 241:2011

Water Treatment

Works Volume(M3)

Percent Compliance with SANS 241:2011

Health Operational Aesthetic

Rustfontein 10 970 622 99.9 % 94.6 % 99.9 %

Groothoek 7 799 844 99.9 % 99.9 % 99.9 %

Welbedacht 48 996 929 99.9 % 99.9% 99.9 %

Bethulie 900 176 99.9 % 99.9 % 99.9 %

Gariep 387 655 99.9 % 99.9 % 99.9 %

Phillipolis 454 880 99.9 % 99.9 % 99.9 %

Jagersfontein 690 566 99.9 % 99.9% 99.9 %



WATER QUALITY FAILURES

Physico-chemical The following water quality failures were reported during 2013/14 Financial Year:

� A failure occurred in Mangaung (Botshabelo) system in September 2013. Nitrates exceeded a limit of 11mg/l at 22.6mg/l. The problem was resolved.

Bacteriological The following water quality failures were report during 2013/14 Financial Year:

� Naledi (Dewetsdorp) system in November 2013 at 75% compliance. 1 colony E.coli and2 colonies faecal coliform. The problem was resolved.

� Kopanong (Jagersfontein) system in January 2014 at 67% compliance. 1 E.coli colony. The problem was resolved.

� Kopanong (Phillipolis) system in August 2014 at 67% compliance. 2 E.coli colonies. The problem was resolved.

Operational drinking Water Quality The following operational water quality failures occurred:

� Welbedacht water plant: 29 total coliform colonies in February 2014. Problem solved.

� Jagersfontein water plant: 31 total coliform colonies in January 2014. Problem was resolved.

� Phillipolis WTW: 19 total coliform in August 2013. The problem was resolved. The limit is ≤ 10col/100ml

Water Quality Interventions The above incidents were attended within 24 hours, furthermore, Bloem Water initiated the project termed “Upgrade and Accreditation of the Bethulie and Rustfontein Laboratories” in 2011. The

accreditation was to be undertaken in line with South African National Accreditation System (SANAS 17025). Laboratory benchmarking and accreditation sessions were conducted by Bloem Water personnel in order to ensure continuation and completion of the project.

To be fully equipped in terms of the instrumentation, laboratory equipment to perform services at a commercial large scale and create additional revenue streams for the organization.

BLUE DROP SYSTEM Bloem Water through its Regional Water Supply Systems, together with Municipalities participated in the Blue Drop assessment which was conducted in March and April 2014. Blue Drop Steering Committee was established to monitor implementation of the system and facilitate engagement with municipalities concerned. Meetings were convened at least quarterly.

The criterion for Blue Drop assessment was based on the following Key Performance Areas:

� Water Safety Planning � DWQ Process Management and Control � Drinking Water Quality Verification � Management Accountability, & Local Regulation � Asset Management

Risk Assessments were conducted for all Regions according to their Systems. This process formed a basis for Water Safety Planning, Compliance and Operational monitoring programmes. Progress on implementation of actions plans in the Water Safety Plan was reported on a quarterly basis and reported to the Fraud Prevention and Risk Management Committee.

Bloem Water will continue to participate in Blue Drop System to enhance internal processes, maintain quality of drinking water and give support to municipalities serviced.



WATER DEMAND The impact of the Dam level as the resource for the abstraction and potable water distribution to the community is illustrated by the water demand graph below from DWS.

Figure 5: Greater Bloemfontein Area: Reconciliation of Supply and Requirement

The prediction for the future scenario has and increasing trend in water demand, that surely is the cause for concern if the current status of the dam will be affected in the future. The scenario analysis by the Department of Water and Sanitation that will be run in mid June 2014 will further shed more accurate information with regards the status of the water in the Greater Bloemfontein Area.

Synopsis of the Greater Bloemfontein Reconciliation study A Water Reconciliation Strategy Study for the Greater Bloemfontein Area was developed in June 2012 by the Department of Water and Sanitation (DWS), in cooperation with Bloem Water (BW), the Mangaung Metropolitan Municipality (MMM) and other stakeholders. The strategy was developed to ensure that there is enough water available to meet the growing water requirements over at least the following 25 years. This was achieved through the identification and scheduling of possible interventions to prevent the risk of water shortage.

Additional water could be abstracted from the Caledon River to meet the short, medium and long term water requirements of the Greater Bloemfontein Area. This would however require that additional infrastructure be implemented as outlined in the table and figure below.

The most favourable interventions, with the lowest URVs, are the interventions related to increasing the capacity of existing infrastructure associated with the Novo Transfer Scheme. Interventions to manage water supply shortages include:

� Construction of pipelines to reservoirs

� Construction of new pipeline from Gariep to Knellpoort Dam

� Drilling of additional Boreholes

� Extension of treatment capacity

� Booster pump station.



No. Intervention Year of Implementation

1 MMM implementation of their WC/WDM plan 2012

2 Increase Tienfontein pumping capacity from 3m3/s to 4m3/s 2013

3 Solving of siltation problems at Welbedacht Dam to ensure that WTP can operate at design capacity of 145Ml/d

2014

4 Novo Transfer Scheme – Construction of the pipeline between Welbedacht Dam and Knellpoort Dam and 2m3/s P/S We Welbedacht pumping to Knellpoort

2017

5 Further increase of Tienfontein from 4m3/s to 7m3/s 2024

6 Re-use of Treated Effluent (generic) 2028

7 Augment Knellpoort Dam from Gariep Dam 2030



Table 12: Water Supply: Intervention Projects

No. Project Name/ Scheme

Project Description Beneficiaries Status

1. Pipeline from Rustfontein WTW to Lesaka Reservoir

15 km 700 mm diameter ductile iron

Botshabelo Thaba Nchu

Design concluded Specifications approved Evaluation of Construction Tenders underway

2. Pipeline from Lesaka Reservoir to OK/Motlatla Reservoirs

10 km pipeline

Botshabelo Thaba Nchu

Pre-feasibility study complete Feasibility underway

3. Gariep to Knellpoort pipeline

180 km 600 mm diameter pipeline

Botshabelo Thaba Nchu Bloemfontein

Pre-feasibility study complete Feasibility underway

4. Novo Transfer (GBRS Intervention no. 1)

New pump to increase output to Rustfontein Dam

Bloemfontein Thaba Nchu Botshabelo

Installation complete. Commissioning underway.

5. Welbedacht WTW to Knellpoort dam (GBRS Intervention no. 3)

Pipe line between Knellpoort Dam and Welbedacht WTW

Bloemfontein Thaba Nchu Botshabelo Wepener Dewetsdorp Reddersburg Edenburg

PSP appointed Pipe route and prelim designs concluded Detailed design underway

6. Additional Boreholes in Thana Nchu

24 solar boreholes North and South of Thaba Nchu villages

Drilling/Exploration underway

7. Extend Treatment capacity at Rustfontein

Increase WTW capacity from 100 Ml/day to 150 Ml/day


Evaluation of PSP tenders underway

8. Parallel Pipeline to PCP (Welbedacht to Bloemfontein pipeline

35 km GRP 1000 mm diameter pipeline from Brandkop to Leeuwkop junction


Detail design completed Environmental approval still pending



CUSTOMER SATISFACTION Bloem Water Customers Bloem Water customer base consists of four municipalities:

� Mangaung Metro Municipality

� Kopanong Municipality

� Mantsopa Municipality

� Naledi Municipality.

Additional to the above municipalities, Bloem Water provides drinking water directly to rural communities through Boreholes in the following towns:

� Thaba ‘Nchu

� Reddersburg,

� Edenburg.

� Philippolis

� Springfontein

� Fauresmith

� Jagersfontein

� Bethulie

Prospective Customers Bloem Water in its endeavour to expand its services to other areas within and outside the Region has identified other municipalities and towns were services can be rendered in the Northern Cape, Free State and Eastern Cape. Engagement with Provincial and National counterparts such as Department of Water and Sanitation, SALGA and COGTA commenced and this strategy will be pursued in the next financial year.

Bloem Water acknowledges the need for support to areas that are currently unserved or inadequately served and will therefore be required to support and engage in initiatives such as:

� water resource and catchment management to protect the raw water resources utilised by Bloem Water;

� taking responsibility for water services in rural and urban areas to improve service delivery at the request of the Water Service Authority;

� Extending infrastructure to allow for increased water supply to Water Service Authorities.

� Review and evaluate any request by DWS to implement a new regional water scheme or project.

Bulk Supply Agreements Bloem Water has signed service level agreements with Kopanong and Mantsopa Municipality. The agreement with Mangaung Metro Municipality was last signed in 2003 and Bloem Water together with this Municipality is in the process of finalising the agreement. Bloem Water will also pursue signing of an agreement with Naledi Municipality.

Customer Satisfaction Survey Customer Services Charter was developed and approved by the Board. Bloem Water customer service charter enables customers to get the most out of Bloem Water’s services. It provides a means for customers to provide feedback and suggest improvements. It also helps them to complain if they are dissatisfied with any aspect of their interaction with the organization. Through this Charter, Bloem Water is able to maintain and improve quality of services.

An annual Regional Customer satisfaction survey was conducted in the beginning of the financial year and it focused on three key issues: overall water service delivery, personnel conduct and value for money for the services offered by Bloem Water. The overall rating of the survey indicated that services offered meet expectations though there are areas highlighted that need improvement.

Bloem Water will continue to leverage the customer satisfaction survey results as a catalyst for continuous improvement.



WATER LOSSES Water losses were managed in all Bloem Water treatment works in an effort to reduce water losses including non-revenue water. All losses are determined via the water model to monitor and calculate water losses on a monthly basis. From a system input of 104 920 008 million m³ for 2013/2014 financial year (as illustrated below), water losses amounted to 9.04% of which 2.01% were apparent losses and 7.03% real losses. A decrease of 2.59% in water losses have been achieved in comparison to the previous year.

This achievement is attributed to the interventions as outlined in the maintenance section below. Despite these achievements, more work is still needed to reduce these losses. Of concern is the amount of losses at the Motlatla and Brandkop reservoirs as well as the Welbedacht/Bloemfontein pre-stressed concrete pipeline. Projects are underway to manage these losses.

The Brandkop reservoir has a design capacity of 136 000 m3, and is registered as a dam, in terms of Dam Safety Legislation of Chapter 12 of the National Water Act (Act No 36 of 1998).

The reservoir has been in use since 1973 and there is deterioration which requires repair and maintenance. The third dam safety inspection for the reservoir was undertaken in October 2012, in terms of the Act. The estimated water losses per day is 3 697 m3.

Motlatla Reservoir is a 5.6 Mℓ/day concrete. The reservoir is located in Thaba Nchu and acts as a buffer for the Tabali (via the Rustfontein WTW) and Blydskap (via the Groothoek) reservoirs. The reservoir is leaking at the base and the estimated water losses per day is approximately 17 280 litres.

Figure 7: Water Losses for the period: 2013/07/01 to 2014/06/30

System Input Authorised Consumption Billed Revenue Water

104,920,008

106,171,126 (101.19%)

94,841,066 (90.39%)

94,841,066 (90.39%)

Unbilled Non Revenue Water

11,330,060 (10.80%)

10,078,942 (9.61%)

Water Losses Apparent Losses

-1,251,118 (-1.19%)

2,324,905 (2.22%)

Real Losses

-3,576,023 (-3.41%)

.



ASSET CONDITION AND MANAGEMENT Risk management is a key component of effective asset management and can be described as achieving the optimal balance between cost, risk and performance. Ageing water infrastructure, together with increased capital costs, energy costs, insufficient capital funds are major risks currently facing Bloem Water. The potential for water supply system deterioration due to age is further compounded by expectations for growth that would further stress existing facilities.

To deal with these issues Bloem Water has adopted a risk based maintenance management approach and has initiated an assets condition assessment program. The program allows Bloem Water to determine assets it owns, their condition, performance, the services they provide, risks related to services, repairs and replacement needs, costs of assets over their life span and identification of future asset needs.

The sections that follow below give an overview of initiatives undertaken to mitigate the potential risks, which includes the following:

� Winter Maintenance Activities

� Condition assessment/leak detection

� Brandkop Reservoir – Dam safety inspection

� Electricity Demand Management

Condition Assessment/ Leak Detection Bloem Water conducted a condition assessment of the Pre-Stressed Concrete Pipeline (PCP) to determine condition of the pipeline and identify leakages. The Caledon/Bloemfontein Pre-stressed Concrete (PCP) Pipeline is more than 40 years old and has surpassed its expected lifespan. This is the main supply line from Welbedacht to Mangaung and any unplanned failure poses the risk of water supply interruptions and unavailability of water to the consumers. Condition Assessment program was previously initiated to conduct a Sahara Leak Detection and location program in three phases between 11 December 2006 and 13 June 2009.

Leaks were detected where previous repairs were done as well as at farmer’s take-offs and scour valves. Entrapped air and malfunctioning gate valves were also detected. The identified leaks were prioritized and repaired and faulty gate valves replaced. New line control valves were ordered to replace the faulty valves and RBX air valves installed. Hydraulic assessment on the Caledon/Bloemfontein pipeline was previously conducted and recommendations from the assessment were implemented. For the year under review, Pre-Stressed Concrete Pipeline (PCP) assessment was once more conducted, using an in line/underflow leak detection mechanism. The Inline leak detection is a very accurate method of leak detection because the acoustic sensor used to identify the sound of the leak is brought directly to the source. Both SmartBall and Sahara Audio-Video inspection technologies were successfully applied. A total length of 103 km between De Hoek reservoir and Brandkop reservoir was inspected. In total, thirty three (33) leaks were identified and classified as either pipeline leaks (i.e. on the pipe barrel itself), component leaks (i.e. at valves, air valves, scour valves, etc.) or off-takes. They were also categorised by size as small, medium and large. The estimated water loss based on indicative leak sizing categories amounts to approximately 1200 kl/day. The findings of the latest leak detection surveys were compared to that of a previous Sahara leak detection inspection project performed in 2007-2009 to establish trends. This information, combined with a first order engineering evaluation of available pipeline design and manufacturing data, the failure history of the pipeline, operating records and the hydraulic behavior of the system were incorporated into a risk assessment model for the pipeline.



The leak detection findings, engineering evaluation and risk assessment were factored into the development of a pipeline specific management strategy. Leaks were detected between:

� De Hoek to Uitkyk Trajectory:

All leaks identified were component leaks and no pipeline leaks were detected. Leaks on this part of the line were attended to and completed at the beginning of annual winter maintenance which commenced in June. The estimated daily water loss was 166Kl/day.

� Uitkyk to Brandkop Trajectory:

The estimated daily water loss through leaks identified between Uitkyk and Brandkop were 1039Kl/day. In total, the daily estimated water loss on the De Hoek/Brandkop line equals 1 205Kl which has a financial loss implication of R 5 265.85 per day and R 157 975.50 per 30 day calendar month.

The proposed GRP parallel pipeline project is planned for this area. Maintenance team has started with closing leaks and this process will be completed during the winter maintenance.

Annual Winter Maintenance Programme The Department commenced with their 2013/14 annual Winter Maintenance programme (i.e. May 14 to August 2014) to perform both corrective and preventative maintenance tasks to ensure strategic infrastructure integrity is enhanced. The programme includes the following activities as outlined below:

� Cleaning of the reservoirs and storage reservoirs;

� The Repair of the Pipe Leakages;

� Replacement and installation of new isolating valves, air valves, and scourer valve;

� Servicing the mini substations and transformers;

� Valve replacements;

� Pump and motor refurbishments;

� Cleaning and maintenance of treatment plant infrastructure i.e. settling tanks, pulsators, filters and balancing reservoirs;

� Sealing of reservoirs where required; and

� Pipeline - repairs of leaking couplings and faulty valve replacements.

WATER RESOURCE MANAGEMENT Bloem Water consists of seven water resource systems, dependent on five rivers, six dams which are owned by Department of Water and Sanitation but mainly managed by Bloem Water.

A table that follows gives an overview of water sources for Bloem Water for 2013/14 financial year and detailed description of each system is also provided.



Table 13: Capacity of Water Resource Systems

System Catchment Impoundment Owner Manager Capacity

Welbedacht Caledon River Welbedacht Dam DWS BW 114 x 106 m3

Knellpoort Dam DWS BW 136 ,151 x 106 m3

136 151 000 m3

Bethulie Orange River N/A DWS DWS N/A

Gariep Orange River Gariep Dam DWS DWS 5 340 x 106 m3

Philippolis Orange River N/A DWS DWS 114 x 106 m3

Jagersfontein RietRivier Kalkfontein dam DWS Water User

Association

114 x 106 m3

Rustfontein Modder River Rustfontein Dam DWS BW 71,32 x 106 m3

Groothoek Kgabanyane River Groothoek Dam DWS BW 11,9 x 106 m3

WATER RESOURCE ADEQUACY The 2013 hydrological challenge in terms of the rainfall pattern during the official rainy season of October2013 to April 2014 had an adverse negative impact on the status of the catchment. The drought that we experienced affected the Dams within the Operation of Bloem Water namely: Groothoek Dam, Rustfontein Dam, Welbedacht Dam, Knellpoort Dam with the exception of Gariep Dam.

The effects of drought on the catchment and the Dams was reported to the Regional Department of Water and Sanitation that culminated with the scenario analysis on the Dams, especially the Rustfontein, Groothoek and Welbedacht and Knellport and compiled a report as the custodian of the Dams in October 2013.The study clearly indicated the challenge in the coming months from October 2013 where the prediction was that the dams will run very low levels if it does not rain significantly from the period of October 2013 to April 2014. (See abstract from the DWS Scenario Analysis Report October 2013)

The report indicated that in the storage levels in Rustfontein and Knellpoort dams are currently very

low, at 33.2% and 43.8% respectively. These are the two major storage dams (92% of storage capacity in the system) used to supply the Greater Bloemfontein area with water. DWS is concerned about the current status of the dams and the possibility that restrictions need to be imposed on the users to protect these dams from running completely empty.

Initial analysis that were carried out on short notice already showed that the existing transfer capacity of the Novo transfer scheme is not sufficient to keep Rustfontein Dam at high enough levels to prevent the dam from the risk of running totally dry. There is a possibility of 1% that Rustfontein can be totally empty by October/November 2014, although there is at least between 35 to 40 million m3 still available in Knellpoort Dam at the time. This water could not be utilized due to the too low transfer capacity.



Knellpoort Dam The Dam was constructed in 1988 with a storage capacity of 137 million cubic meters situated on the Riet Spruit near Wepener. The Dam was constructed to serve as the storage capacity for Welbedacht Dam which has been silted up and had the storage capacity reduced from 115 million cubic meters to just under 16 million cubic meters capacity over the past 20 years. The dam serves has a relatively small catchments area of 798km2 and serves to augment the Welbedacht Dam and Rustfontein Dam during drought. The level of the dam is at 50.8% with a volume of 66.03 million cubic meters. The Dam relies on the Tienfontein Raw water transfer from Caledon River. The Caledon River is the perennial river which has fluctuation flows depending on the upstream inflow from the neighbouring state Lesotho.

The figure below indicates that in the period of October 2012 to April 2013 during a rainfall season the Knellpoort Dam Level has been increasing steadily from 64% up to a high of 68%.

The storage capacity was significantly adequate to cater to the supply of both Welbedacht Dam and the augmentation of Rustfontein Dam during the off rain season. The historic data for the period October 2013 to date indicates that Knellpoort has been stable around the 43-51 % which makes provision for the adequate storage capacity. The Raw water abstraction from Tienfontein Pump station during rainy season November 2013 up to April 2014 had raw water transferred.

Figure 8: Knellpoort Dam: Comparison of Dam Levels during rainy season

Rustfontein Dam The Rustfontein Dam was constructed in 1955 within the Modder River Catchment area with approximately 940km2.The Dam receives water from the Novo Transfer Scheme and provides Treated water to Rustfontein Water Treatment Works and well as release water to Mangaung Metropolitan Municipality to augment the Mockes Dam. The current dam has a

capacity of 70 million cubic meters and the current Dam percentage is 21.47% with a storage capacity of 15.26 million cubic meters. The Rustfontein Dam Water Supply zone supplies treated water to the Mangaung Metropolitan Municipality and Mantsopa local municipality in the Free State Province, South Africa. The water supply area includes the towns of

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2012/13 Vs 2013/14 Knellpoort Dam Level Oct 2012-Apri2013

Oct 2013-April 2014


Bloem Water Annual Report 2013/14 Financial Year Page 53

Botshabelo and Thaba Nchu and Excelsior (Mantsopa LM). Treated water is also currently supplied to the greater Bloemfontein due to the high water demand in the city. Botshabelo is located 55km from Bloemfontein and with a population of approximately 300 000 people, it is the largest township development in the Free State and one of the largest in South Africa. Thaba ‘Nchu, one of the oldest settlements in the Free State is situated below the famous Thaba ‘Nchu Mountain (Place of Execution), 65 km east of Bloemfontein. The neighbouring area Selosesha has grown considerably after the region was declared an industrial growth point in the 1980's. With an estimated urban population of 101 000, Thaba Nchu has a strategic location adjacent to the road between Bloemfontein, Botshabelo, Ladybrand and Maseru (the capital of Lesotho).

Botshabelo, Thaba ‘Nchu and Bloemfontein (supplementation) receive treated water primarily from the Modder River where water is treated at the Rustfontein water treatment works. This works is managed by Bloem Water Board.

The figure below indicates that Rustfontein Dam has been experiencing a steady decline in the levels since the period October 2012 to April 2013.The cause of the decline in water levels is based on the increase in water demand imposed by supply constantly to both front to supply Botshabelo, Thaba Nchu and Bloemfontein.

The Novo raw water transfer scheme to Rustfontein operates at maximum capacity of 1.5m3/s with two pumps operation to supply Rustfontein Dam.

The Rustfontein Water Treatment Works with the capacity of 100Ml/d supplies the Greater Mangaung Metropolitan Municipality on average daily demand in Botshabelo is 39Ml/d, Thaba Nchu 15 Ml/d and Bloemfontein 34Ml/dither total volume of water transferred from Novo into Rustfontein Dam at 1.5m3/s pumping rate does not make much of the impact in raising the level of Rustfontein Dam because the daily average abstraction rate at Rustfontein is 1.2m3/s which is further compounded by the Raw Water releases to Mockes dam as and when required further dropping the dam levels.

Figure 9: Rustfontein: 2012/13 vs 2013/14 Dam Levels during rainy season

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Bloem Water Annual Report 2013/14 Financial Year Page 54

Groothoek Dam Thaba Nchu receives raw water primarily from the Kgabanyane River where water is stored in Groothoek Dam with a capacity of 11 million m3 and treated at the Groothoek water treatment works with a capacity of 18Ml/d. The current Dam level is at 2.92% with a storage capacity of 0.34 million m3 with a small catchment area of 116km2 and the yield of 4.4Ml/d.

The Groothoek Dam Water Supply zone supplies treated water to a section of the Mangaung Metropolitan Municipality in the Free State Province.

The water supply area includes the town of Thaba Nchu Town, 36 rural villages on the northern and southern part of Thaba Nchu. Thaba Nchu, one of the oldest settlements in the Free State is situated below the famous Thaba Nchu Mountain (Place of Execution), 65 km east of Bloemfontein. The neighbouring area Selosesha has grown considerably after the region was declared an industrial growth point in the 1980's. With an estimated urban population of 101 000, Thaba Nchu has a strategic location adjacent to the road between Bloemfontein, Botshabelo, Ladybrand and Maseru.

In the rainfall season of 2012/13 the Groothoek Dam was within the moderate risk level of 27-40% as

indicated in Figure 9.The figure refers to the Groothoek Dam level at 2.92% is at its lowest level in the past 10 years and this had adverse impact on the water supply in Thaba Nchu.

The DWS scenario analysis report had a recommendation to the Minister of Water and Sanitation to consider and approve the 15% Water restrictions in the Greater Bloemfontein Supply areas that includes Bloemfontein, Thaba Nchu and Botshabelo. Water restriction was approved was but not implemented by the Mangaung Metropolitan Municipality. The risk with Thaba ‘Nchu supply area is that the dam will reach very low levels before the next rainfall season starting after October 2014 to April 2015.

There should be an urgent and drastic action that should be taken to mitigate against the possible low water supply in Thaba Nchu.

Bloem Water has begun as from the October 2013 to reduce water abstraction form Groothoek Dam and distributing 12 Ml/d to an average 6Ml/d. In December 2013 the Dam level dropped below the metering gauge plate and the readings was not confirmed till the new gauge plate was installed by DWS in January 2014.

Figure 10: Groethoek Dam - 2012/13 vs 2013/14 during rainy season

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Welbedacht Dam The Welbedacht Dam is a concrete barrage dam in the Caledon River which was designed and constructed by the Department of Water Affairs and Forestry in 1973. The Dam has a catchment area of approximately 15 245 km2. It supplies water to the city of Bloemfontein via a 115 km long Caledon-Bloemfontein pipeline.

The Dam has storage capacity has been greatly reduced from the original capacity of ( 95%)114 million cubic meters in the past 20 years to just less than (6million cubic meters(5%) storage capacity. Though the dam level reading could be interpreted as full supply level, it should be noted that is not a true reading as 95% of the storage

is silted up and for operation reference we have only 5% to consider as the correct level.

The Caledon River carries the largest fine-mud suspended load primarily from the erosion of Karoo sedimentary rock soils. This high sediment load has resulted in reducing the storage capacity of the Welbedacht Dam. The reduction in storage capacity raised concern regarding the reliability of the dam to meet the water demand of the supply areas such as Bloemfontein. Due to this problem, the Knellpoort Dam was built in 1988.

Raw Water Quality Raw water quality in Bloem Water differs according to the source. The table below gives a list of systems and status of the quality of water according to the latest testing results. Bloem Water raw water quality supply has the following potential risks/challenges which are continuously monitored and proactively managed:

Table 7.2: Raw Water Quality

System Catchment Impoundment Raw Water

Quality

Description of Water Quality challenges

Welbedacht Caledon River

Welbedacht

Dam

Moderate Water is turbid, nutrient and heavy metals prominent in August & September due to industrial discharges, sewage from manholes and pump station, Agricultural runoff.

Knellpoort Dam Good Urban development at municipal level has possible impact on water quality.

Bethulie Orange River

N/A Good

Its good quality water, during the raining season the NTU rises.

Gariep Orange

River

Gariep Dam Good Its good quality water, the raining season does not have influence on high NTU

Philippolis Orange River

N/A Good Its good quality water, the raining season does not have influence on high NTU

Jagersfontein RietRivier Kalkfontein dam Good Its good quality water, the raining season does not have influence on high NTU

Rustfontein Modder River

Rustfontein Dam

Good Algae and organics materials

Groethoek Kgabanyane River

Groothoek Good Algae



RESOURCE USAGE AND EFFICIENCIES

Energy In its effort to reduce energy consumption, Bloem Water has also entered into a partnership with ESKOM, to participate in the ESKOM’s Demand Side Management (DSM)/load shifting initiative. The ideal water supply sub-system identified for this initiative was Novo/Rustfontein transfer scheme and the Welbedacht Treatment Plant. The emphasis is to

participate in load shifting when the prevailing plant conditions are favourable to ensure minimal disruptions to operations or supply of water. The energy consumption in these sub-systems and other sub-systems is presented in the table and figure below.

Table 14: Energy Consumption

Sub-System Energy Consumption (MW)

Novo pump station 3.80

Rustfontein Water Treatment Plant 3.66

Welbedacht Water Treatment Plant 10

TOTAL 17.46

Figure 11: Total Consumption (Kw) 2010/11 - 2013/14

0

20000000

40000000

60000000

80000000

100000000

TOTAL CONSUMPTION - ALL SYSTEMS

10/11 Consumption 11/12 Consumption 12/13 Consumption 13/14 Consumption



Figure 12: Total Consumption (Kw) 2010/11 -2013/14

HYDROPOWER Bloem Water in conjunction with the Water Research

Council (WRC) and University of Pretoria (UP) is in the

process of completing a Hydro Power facility which will

supply the Bloemfontein office with renewable energy.

This installation will serve as a pilot plant to possible

large installations in future. The project was for the

installation of an off take system to a turbine room

situated at Brandkop Reservoir in Pellissier. The new

hydro power plant connects to the existing

Welbedacht pipeline at the point where a future

identical reservoir was planned next to the existing

Brandkop Reservoir.

OPERATIONAL PERFORMANCE Prolonged water supply interruptions were

experienced in the Mangaung Metropolitan

Municipality (MMM) during the period 18th to 24th

September 2013, due to major pipe bursts on the PCP.

The last time a similar challenge was experienced was

in 2011, following a major pipe burst on the same

pipeline. More than 50% of pipeline failures

experienced for 2013/14 financial year occurred in

Reddersburg due to various reasons including

corrosion, leaking, ground movement, and compaction

and mostly due to ageing infrastructure. A project to

replace the Reddersburg/Edenburg asbestos concrete

pipeline will be initiated.



MAINTENANCE MANAGEMENT ACTIVITIES The table below gives an overview of the 2013/14 budget allocations and expenditure for undertaking day-to-day

maintenance activities and performance per Region.

Regions Annual Budget

R’ 000

Actual Spent

R’ 000

% Actual

Spent

Caledon 4 931 4 622 94%

Modder 3 772 2 939 78%

Orange 2 976 1 915 64%

Telemetry, PLC. 917 747 81%

Others 3 260 2 212 68%

Total 15 856 12 437 78%

The annual target of 85% has not been achieved on the overall Maintenance expenditure, due the following factors: � Hennie Steyn pump station did not have a lot of

failures due to low Nephelometric Turbidity Units(NTU)’s experienced;

� The upgrade of the Programmable Logic controller (PLC)/Telemetry system make it easy to identify problems in the Pumps Stations;

� Pump failures at Hennie Steyn has been minimized due to the modifications on the pumps set; and

� Some maintenance activities which were perceived to be maintenance in nature were incorporated into the capex program.

DAM SAFETY INSPECTION Bloem Water conducted Dam Safety Inspection for Brandkop Reservoir in terms of Section 118 (3) (b) of the National Water Act. The Brandkop reservoir on the farm Brandkop 702 in the Mangaung Metro Municipality is classified as Category II according to the Dam Safety Regulations of 2012 and is operated

and maintained by Bloem Water. The reservoir is a rectangular reinforced concrete reservoir structure with dimensions 190.3m by 137.3m by 6m divided by a central concrete dividing wall into two equal compartments which may be operated independently. The first safety inspection was undertaken in 1987, the second safety inspection was undertaken in 2003 and the third safety inspection was undertaken in 2012. The findings of the third safety inspection were major leaks in the reservoir.

It was estimated that approximately 3700 kl of water loss was experienced daily at Brandkop. At a current rate of R 4.37 per kl, water worth R 15,725 was lost every day (i.e. approximately R 5 Mil per annum). In its effort to reduce NRW, the department implemented the proposed corrective activities during the month of December 2013, and submitted the report thereof to the Dam Safety Office.



PROVISION OF WATER IN RURAL AREAS There are currently 25 boreholes in total for the North and Southern part of Thaba Nchu. The 7 boreholes are not operational due to drought and low water table levels, thus leaving only 18 Operational. Details of the Boreholes are given in the table on the next page. The proposed intervention is to increase the capacity by 10 more Boreholes in the Southern Part of Thaba Nchu as phase 1(Kommiesdrief 2, Gladstone 2, Woodbridge1.2, Woodbridge2.2, Springfontein 2 and phase 2 additional 24 boreholes in the Northern part of Thaba Nchu. The exploration process started on the 27 June 2014 and drilling started in July. The completion date of the whole project is December 2014. The boreholes to be installed will use the solar energy and will not depend on the ESKOM grid. (See the picture below). The installation is much quicker than the conventional installation of power from ESKOM. The Southern Part of Thaba Nchu Villages is the priority as this is an area that solely relies on Groothoek Dam Supply that is currently running extremely low and is projected to run completely dry in August 2014. The Central and the Northern Part of Thaba Nchu has been supplied by Rustfontein Dam from October 2013 to date, thus relieving Groothoek Dam by abstracting an average of less than 4 ML/d to for treatment and the rest, thus 17ML/d is supplied from Rustfontein into Thaba Nchu via the Table – OK pipeline on daily basis to address the Thaba Nchu daily water demand of 21Ml/d.

Ground Water Exploration The maximum utilisation of the available underground water resources in Thaba ‘Nchu is meant to alleviate the high water demand imposed on Groothoek Dam as the long term strategy. The first phase is to explore and drill boreholes in the Southern Villages of Thaba

Nchu (villages mentioned below). This intervention will ease the supply from Groothoek Dam. The target water volume is between 0.2-0.3 Ml/d, depending of the available yield after exploration and equipping. The second phase will be borehole implementation and possible addition of 2 boreholes per Village making a total of 24 boreholes. Project Timeline: August 2014-December 2014.

Southern Rural Villages in Thaba Nchu These Villages are supplied via the Southern bulk Groothoek main pipeline. The proposed underground water exploration and drilling of possible additional 10 boreholes in Southern Part of Thaba Nchu Villages. The boreholes to be equipped after the aquifer tests have been done and the pump sizes have been indicated according to the test results (we are looking at solar powered pumps to be installed.

� Kommissiedrift – 2 boreholes to be drilled and tested and equipped

� Gladstone – 2 boreholes to be drilled and tested and equipped

� Woodbridge 1-2 boreholes to be drilled and tested and equipped

� Springfontein-2 boreholes to be drilled and tested and equipped

Northern Rural Villages of Thaba Nchu These Villages are supplied via the Northern bulk Ok - Excelsior main pipeline. The second phase will be borehole exploration and possible addition of 2 boreholes per Village a total of 24 boreholes. Project Timeline: August 2014-December 2014. � Potsane, Feloane, Tiger River, Ratabane, Paradys,

Marino, Spitskop, Houtneck

� Moragu,Kgalala, Modutung, Bofulo, Rooibult, Talla, Sediba Scheme, Tabali

The targeted water from the borehole is between 0.4-0.6 Ml/d which is standard depending on the available yield after exploration.



BOREHOLES

Borehole Feb ‘14 Mar ‘14 April ‘14 May ‘14 June ‘14 Comments Bore-Holes( monthly consumption measured in kilolitres (Kl) Northern Villages BH 1A-Moroto (P) 98 0 27 203 265 Operational

BH 1B-Moroto (P) 240 247 23 261 306 Operational

BH 2-Rakhoi (P) 576 455 531 553 822 Operational

BH 3-Middeldeel (P) 1183 564 778 966 861 Operational

BH 4-Thubisi (P) 989 1419 1465 1385 1903 Operational (Borehole pump was stolen in June 2014 and was replaced

BH 5-Klipfontein (P) 435 357 372 275 232 Operational

BH 6A-Balaclava (P) 801 938 827 705 424 Operational

BH 6B-Balaclava (P) Not operational water table too low( supply through one borehole)

BH 6C-Balaclava (P) Not operational water table too low( supply through one borehole)

BH 11-Mariasdal (P) 0 0 44 0 11 Operational

BH 11A-Mariasdal () 251 230 118 172 250 Operational

BH 13A-Longridge (P) 572 353 672 581 696 Operational

BH 13B-Longridge (P) 0 0 3 0 0 Not Operational( not in use water table too low)

BH 16-Sediba (P) 318 130 196 256 67 Operational

Southern Villages BH 7A-Rietfontein (P) 598 363 376 537 446 Operational BH 7B-Rietfontein (P) 206 85 185 111 166 Operational BH 8-Grootdam (P) 415 296 233 216 166 Operational BH 9A-Yoxford (P) 326 0 0 0 0 Not operation water table too

low (supply through bulk pipeline) pump stolen on 15 July 2014 and replaced with new one

BH 9B-Yoxford (P) 89 0 0 0 0 Not operation water table too low( supply through bulk pipeline)

BH 10-Nogaspost (P) 647 425 884 861 829 Operational BH 12A-Springfontein (P) 35 59 68 18 0 Operational BH 12B-Springfontein (P) Not operation water table too

low( supply through one borehole)

BH 12C-Springfontein (P) Not operation water table too low( supply through one borehole)

BH 14-Tweefontein (P) 1667 1346 1945 1691 2650 Operational BH 15-Post (P) 2 2 3 Operational( Borehole pump

stolen on the 23 June 2014 and was replaced



OPERATIONAL OPTIMISATION Bloem Water initiated the project termed “Upgrade and Accreditation of the Bethulie and Rustfontein Laboratories” in 2011. The accreditation was to be undertaken in line with South African National Accreditation System (SANAS 17025). Laboratory benchmarking and accreditation sessions were conducted by Bloem Water personnel in order to ensure continuation and completion of the project.

SYSTEM AUTOMATION Bloem Water implemented an automation system to ensure early warning. Improvement/upgrading of the automation infrastructure within Bloem Water are critical in ensuring real time monitoring and on time response. This will lead reduced turnaround time in responding to emergencies and operational malfunctioning.

The deployment of automation infrastructure has so far resulted in reduction in maintenance cost, especially in the Orange River Region.

The following additional interventions will be implemented by 2016 to improve systems automation in the following:

� Upgrade the necessary systems

� Standardization of systems in all Regions

� Centralize the SCADA systems Modification of control rooms where necessary.

� Training of plant operators on the latest SCADA

BUCKET ERADICATION PROGRAMME Bloem Water was appointed by the Department of Human Settlement and Sanitation as an Implementing Agent to address Water and Sanitation challenges in the Free State Province. This appointment followed the signing of the Implementing Agent Agreement entered into by Bloem Water, Department of Water and Sanitation, Free State Provincial Government and Department of Human Settlement.

The programme’s main objective is to accelerate eradication of the sewer infrastructure backlog (toilets).

A total of 35 849 buckets will be eradicated through this programme and the livelihood of communities in implementation areas will be improved through job creation and better sanitation.

Governance structure for the project is established and agreements with key stakeholders are in place. Bloem Water also entered into agreements with municipalities and memorandum of agreements signed. By June 2014, a total of 9 135 buckets as were eradicated. 4 516 of these buckets were flushing as detailed below:

� Hobhouse – 1 224 buckets eradicated

� Wesselsbron – 2 300 buckets eradicated

� Frankfort – 53 buckets eradicated

� Vrede – 49 buckets eradicated

� Rosendal – 49 buckets eradicated

� Trompsburg – 11 buckets eradicated

� Virginia– 129 buckets eradicated

� Mangaung Metro – 11 buckets eradicated

Total expenditure on the project as at 30 June 2014 amounted to R 242 104 158.

ENGINEERING AND PROJECTS


Engineering and Proje cts

EXTENSION AND REFURBISHMENT PROJECTS In line with the corporate goal “assuring sustainable provision of water quality services for life” the Department had earmarked 83 CAPEX projects in all the Bloem Water regions for implementation in the 2013/14 financial year. The regions which are named as Modder, Caledon, Orange and Bloemfontein have projects at different construction phases which is a major parameter influencing the regional service provision and expenditures.

The Engineering department, driven by the desire to assist Water Services Authorities (WSA) was engaged in the implementation of the Department of Water and Sanitation projects under conditional grant named Municipal Water Infrastructure Grant (MWIG) in the following Municipalities which falls under Xhariep District

� Naledi Local Municipality

o Borehole development project estimated at R813 000

o Water Leakage control in Wepener estimated at R2 000 000

o Dewetsdorp connector pipeline estimated at R1 046 000

� Mohokare Local Municipality

o Upgrading of Vetchkop street estimated at R1 000 000.00


o Upgrading of Phillipolis pump station and 2km pipeline

The above projects were implemented on behalf of the Municipalities to boost their technical capacity, infrastructure, community employment creation and skills development.

In achieving the Bloem Water goal, the Department realized that the infrastructure needs to be interlinked in order to balance the inter-Bloem Water Regional water demand.

The Novo transfer scheme spreads across Caledon and Modder river regions. The water is pumped from Tienfontein pump station to Knellpoort dam which acts as a balancing storage between Caledon River and Rustfontein dams depending on the Rustfontein dam level. In the same scheme, there was identified the need to link Welbedacht and Knellpoort dams with a bi-directional pipeline.

This mini foregoing discussion has been one of the most influential parameters in determining the need for infrastructure upgrade and project implementation.

The expansion of Mangaung Metro Municipality as depicted by exponential infrastructure upgrade and increase in population augmented the need for Bloem Water underscored the need for infrastructure upgrade and replacing of old pipeline. Needless to say, budget and project cash flow which is determined by the project phase dominated the performance of the Engineering Department.



COMPLETED PROJECTS The following table gives a summary of extension projects completed throughout Bloem Water. Details of the project are given in Regional project information that follows.

Region Project Budget (M) Actual Expenditure

Status

Modder River Region

Installation of Chlorine Dioxide Generators

R6.9 R5.7 Completed

Increase Reservoir Capacity at OK R6.8 R5.0 Completed

New Isolating Valves R3 R2.3 Completed

Construction of Single Quarters R2.8 R2.5 Completed

Groothoek Sludge Lagoon R5.8 R5.7 Completed

Refurbishment of Sludge lagoons R10 R7.2 Completed

New Clear Pump R18 R15.4 Completed

Caledon River Region

Construct and Equip Workshop for Pipeline Reaction Team

R8.5 R7 Practically Completed

Construction of Wash Bay R1 R0.6 Practically Completed

Orange River Region

New 2 Ml Reservoir at Springfontein R7 R5.1 Practically Completed

Extension of Water Treatment Works(Bethulie)

R18,3 R17.8 Completed

New Sludge Lagoons for Gariep and Phillipolis

R10,4 R9.4 Completed



MODDER RIVER PROJECTS

Modder River Extension Projects In Modder River region, the water is supplied by two plants namely Groothoek and Rustfontein Treatment plants. The combined output of the plants is 110ML/day. Modder River scheme supplies Bloemfontein, Excelsior, Thaba Nchu and Botshabelo towns. Rustfontein plant feeds treated water to Bloemfontein Brandkop reservoir, subsequently to the Mangaung Local Municipality.

Besides the Bloemfontein, Rustfontein plant delivers water to Lesaka reservoir with a capacity of 52ML/day. This water will be channelled to Tabali reservoirs which feed OK and Botshabelo Mangaung Metro reservoirs and Motlatla. The water will then be distributed to the Thaba Nchu and Excelsior reservoir. The Groothoek scheme supplies water to the Blydskap reservoir for further distribution to Thaba Nchu areas.

To augment the water supply, Bloem Water together with the Department of Water and Sanitation is drilling boreholes in Thaba Nchu rural villages under the National Transfer Programme (NTP).The Modder River water supply system experienced an increased demand of approximately 10ML/day between 2008 and 2011 according to the research on Reconciliation Strategies for Large Bulk Water Supply System, 2012.Significant increases were in Thaba Nchu and Botshabelo.

The following projects are at various stages directly influence the distribution of water from ModderRiver region.

� Construction of Tabali-OK Pipeline � Extension of Treatment Capacity Rustfontein WTP � New Pipeline Rustfontein to Botshabelo � Houtnek Booster Pump Station � Replace Morago Pipeline

The following major projects were completed:

Chlorine Dioxide Generators: Installation of chlorine dioxide plant for Rustfontein Water Treatment Plant was implemented concurrently with the one at Bethulie Water Treatment Plant.

This generator which is completed and functional runs on intermittent basis depending on the quality of the incoming water. Chlorine dioxide is more effective than chlorine where water contains viruses and it easily oxidises floating particles aiding coagulation processes thereby reducing turbidity.

Increase Reservoir Capacity at OK by 2ML/day: This project was to augment the water supply system at the OK reservoir in Thaba Nchu which supplies Houtnek, Motlatla and other reservoirs. In the previous scheme before the projects was implemented, there was a 1.5Ml/day reservoir which could not adequately supply the 5.6Ml/Day Motlatla reservoir. Motlatla reservoir gets water supply from Blydskap reservoir and Ok reservoirs. In cases where Groothoek Dam is below abstraction base level, Motlatla reservoir depends solely on OK reservoir.

Replacement of Morago Pipeline: This pipeline is approximately 9.5 km and 200mm PVC, is replacing the old existing asbestos cement pipe which had numerous bursts. This project buttresses the need to install a booster pump station along the pipeline in such a way that the required pressure head and frictional losses are to feed the Houtnek reservoir is successfully achieved.

Modder River Refurbishment Projects A total of 20 refurbishment projects were planned for the year under review with a budget of R55.3 million of which 70% was spent for the Region.

CALEDON RIVER PROJECTS The Caledon region has two supply schemes namely Tienfontein and Welbedacht Water Treatment Plant. The two schemes, though in the same regions serves different purposes which are vital in the provision of water to the areas of supply. Whilst the Tienfontein scheme abstracts water from the Caledon River and pumps it to the canal which directly feeds the Knellpoort Dam, the Welbedacht Water Treatment Works draws water from the same river and treats before further distribution to areas of demand.



In essence, Tienfontein is an abstraction point which partially diverts a Caledon River course the Knellpoort dam and there is no treatment done along the scheme. The total capacity of the Welbedacht Water Treatment Plant is 145ML/day. This plant supplies treated bulk water to Wepener, Dewetsdorp and Bloemfontein. The Caledon region has two supply schemes namely Tienfontein and Welbedacht Water Treatment Plant.

The two schemes, though in the same regions serves different purposes which are vital in the provision of water to the areas of supply. Whilst the Tienfontein scheme abstracts water from the Caledon River and pumps it to the canal which directly feeds the Knellpoort Dam, the Welbedacht Water Treatment Works draws water from the same river and treats before further distribution to areas of demand. In essence, Tienfontein is an abstraction point which partially diverts a Caledon River course the Knellpoort dam and there is no treatment done along the scheme. The total capacity of the Welbedacht Water Treatment Plant is 145ML/day. This plant supplies treated bulk water to Wepener, Dewetsdorp and Bloemfontein.

The combined estimated demand for Naledi Local Municipality is estimated at 4.5ML/day and the region supply approximately 70% of the overall demand. The balance is augmented by ground water and boreholes. The Knellpoort dam which gets supply from the Tienfontein Pump Station discharges the water into Modder River which supplies Rustfontein dam. The idea behind this scheme is to augment the water supply in the Modder River which subsequently feeds Rustfontein dam.

Extension Projects The following extension projects were implemented and status given:

� Design and Construct GRP bypass line – Tender Stage

� Bi-directional pipeline Knellpoort to Welbedacht Additional pipeline to Dewetsdorp Reservoir Extend Novo Pumping Capacity- Design Stage

� Installation booster pump station Wepener Construct and Equip Workshop for Pipeline Reaction Team - Completed

� Construction of Wash Bay– Completed

Caledon River Major Expansion Projects

The Welbedacht bi-directional pipeline: The purpose of this project is to be balance the water demand between Rustfontein Water Treatment Plant and Welbedacht water treatment plant. Knellpoort dam which is a balancing dam between the two treatment plants will be regulated by this scheme. Depending on the demand, water can be transferred from the dam to Modder River or to Welbedacht Water treatment works. Under limited circumstance water can be pumped from Welbedacht Water Treatment Plant to this balancing dam which subsequently discharges into Modder River. This is a major projects and the philosophy behind this is the unpredictable rain season and prolonged dry weather.

GRP pipeline from Lieuwkop to Brandkop reservoir: This project will run parallel to the existing 1170 and 700 diameter pipeline which might eventually be decommissioned due to leaks and age. This project is vital as it will increase supply to the Bloem Water’s Brandkop reservoir which feeds Mangaung Metro Municipality.

Extend of Novo Pump Station: The expansion of the Novo Pumps will increase the water supply feed from the Knellport Dam into Modder River. The water demand for Bloemfontein and Botshabelo areas can be regulated by Rustfontein Water Treatment Plant by apportioning water feed depending on demand.

Additional pipeline to Dewetsdorp: The additional pipeline will be installed in the servitude of the existing 200mm diameter asbestos cement pipeline. Dewetsdorp has a water of approximately 2.2ML/day and the existing scheme is not adequately supplying water to this area. The flow of water in this pipeline will be in such a way that the Municipality reservoir is fed first ahead of the Bloem Water reservoir.

Caledon River Region Refurbishment Project A total of 21 projects were targeted for the period under review. R29 million was budget for these projects and R 19 million spend.



ORANGE RIVER PROJECTS

Orange River Region: Extension Projects The Orange River region regulates and supplies the water to Bethulie, Springfontein, and Trompsburg. Notable projects which have been completed are:

� 2ML/day Springfontein reservoir � Extension of Bethulie Water Treatment Works � Bethulie Gravity line

Implementation of the projects in this region is directly influenced by the reconciliation strategy study which was conducted in 2012.

Orange River Region Refurbishment Project

8 projects with a budget of R2.1 million were planned for the year under review and R100 000 was spend on refurbishment of projects.

Achievements and Targets

Completed projects that have been tabulated on page 62have positively impacted on the need for increased water supply capacities to our clients. The Bloem Water Shareholder’s compact predetermined the alignment, targets and achievements of the Engineering and Projects sections. The set target of achieving less than 25% of the overall expenditure within the target and less than 25% variance in target dates was not met due to the following reason

� Most of the major projects like the GRP pipeline from Lieuwkop to Brandkop reservoir (330 Million), Rustfontein to Lesaka pipeline (94 Million), extension of Rustfontein Treatment Capacity(200 Million), etc., exceeded our predicted budgets and Bloem Water had to delay these projects

� Ultimately the above circumstance affected the % variance of the targeted completion time

Despite the above, Bloem Water participated and contributed immensely on behalf of the Department of Water and Sanitation in MWIG.

HEAD OFFICE EXTENSION PROJECTS The Bloem Water Head Office embarked on the hydropower project with a capacity of 96 KW.

The power generated by Hydropower project will be used for powering Bloem Water Head Offices and surplus power will be put into the grid. The project was in construction stage at 30 June 2014.

Bloem Water is expanding and requires bigger facilities to cater for increase in workforce. A project to extend Bloem Water Head Office is underway and the process was at tender stage at 30 June 2014.

According to the Water Services Act, water boards may perform secondary activities provided primary functions and financial standing are not compromised. A project to establish central laboratory facilities at Bloem Water Head Office has commenced and will add to Bloem Water secondary activities.

DEPARTMENT OF WATER AND SANITATION PROJECTS

Orange River/Kopanong Local Municipality The projects completed like for example the extension of the Bethulie water treatment capacity has tallied well with the expansion drive in Kopanong Local Municipality. Amongst new developments earmarked for future there is a new hospital development and the upgrading of this water treatment will alleviate persistent water problems.

The water network in Poding-tse-Rolo (Philippolis) was designed and constructed around 1994, and the population and economic growth has since increased to very high levels. The current network can only handle 0.7Mℓ per day from a 1.2Mℓ capacity Water Treatment Works.

Caledon/Naledi Local Municipality The MWIG scheme which was and is currently being implemented by Bloem Water will reduce the effects water crisis in Naledi Local Municipality. Notable projects directly linked are the once mentioned earlier under MWIG scheme which are not limited to borehole development.

Limited water sources due to siltation of Caledon River necessitated the need for ground water augmentation through borehole development. The idea is to abstract the water from boreholes and store it in the reservoirs for further distribution.



In this scheme, there is need for power driven pumps with enough head to feed the water into the reservoirs. Limited options of electricity supply favoured solar driven pumps and wind turbines.

Modder River Region There is no MWIG scheme implemented in the Modder river region. However, there are currently completed two projects earmarked to augment the water supply in the Thaba Nchu’s Motlatla and associated northern suburbs. The two projects; installation of Thaba Nchu steel tanks in eight (8) villages and resealing of Motlatla Reservoir; were funded by Bloem Water due to insufficient Department of Water and Sanitation’ National Transfer Programme budget which was to cover the two projects and an additional new 4ML/Day

reservoir at Motlatla. Of these three projects two have been completed and the installation of the 4ML/day reservoir is 90% towards completion.

Challenges In this 2013/14 financial year, the challenges are summarised as below:

� Lengthy design period due to Environmental Impact Assessments and authorisation period.

� Delays in signing of service level agreements

� Delays in securing the funds which may lead to reprioritisation of projects

MAJOR PROJECT: MULTIYEAR The following multiyear projects are envisaged and they will require funding.

Project Estimated Construction Budget

Current Status Implementation Period- Completion Date

Lieuwkop to Brandkop 35 km pipeline

R330 000 000 Design and tender documentation 95% completed

30 June 2017

Knellpoort to Welbedacht bi-

directional Pipeline

R 160 000 000 Design and tender documentation 95% completed

30 November 2015

Dewetsdorp pipeline R 20 900 000 Design and tender documentation 95% completed

30 June 2015

Wepener booster Pump station R 9 500 000 Design and tender documentation 95% completed

31 March 2015

Novo Pump station R 25 000 000 Construction 31 March 2015

Gariep to Knellpoort pipeline – 150 Km

R 1 500 000 000 Planning Stage To be confirmed after planning.

Extension of Rusfontein Water Treatment Works

R 200 000 000 Planning Stage 31 March 2017

Rustfontein to Lesaka Pipeline R 94 000 000 Design and Tender documentation complete

30 November 2016

Total R 2 339 400 000

CORPORATE SUPPORT


Corporate Support

CORPORATE SUPPORT


The objective of Corporate Support function is seen through several categories which are aimed at developing employees, providing advance and resourceful Information Technology services; integrated safety, health, environment and quality (SHEQ) and security of company assets. The department is also inclusive of Human Capital Development, Administration and Twinning Programmes. In addition, the mandate of the Corporate Support department is to develop policies, procedures, frameworks and methodologies in terms of legislative framework and in a manner that fulfils the mission and strategic goals of the institution.

HUMAN CAPITAL DEVELOPMENT

Employee Development and Training Programmes Training is provided within the organisation to support the continued professional and personal growth of all employees in their work. Special training emphasis is made in the areas of service excellence, communication, and effective management. In-service training also includes on-the-job training, training in preparation for job assignment, and continuing Training Programs which are basically job-oriented to equip an individual to properly perform assigned tasks, to develop additional work capabilities, and increase level of competency.

Learnership Programs are extended to both internal and external youth for the development of scarce skills in water, artisanship and engineering functional areas. Bloem Water continues to appoint learners through a Learnership and Internship Program which is aimed at developing a pool of skilled workforce and also to increase the number of employable individuals in different functional areas where there is skills shortage as well as to support the skills development initiatives - both internally and externally.

The in-house class facilitation for Water Treatment learners continues annually of which the learners are trained theoretical and practical. For the current year, the learners will be trained on NQF Level 2 and 3 on Water and Waste Water Treatment. This training contributes to DWS classification of Plants and Process Controllers. Skills Transfer Learning Programs are incorporated into Bloem Water’s Training Plan.

The main focus on skills development is to develop a strategy on how best skills shortage in Bloem Water can be addressed and an approach to provide an overview of some of the current initiatives which are being undertaken that could have a profound influence on the way in which the employees are trained and developed. During the year under review, Bloem Water has advanced in capacitating the employees, focusing in all functional areas. The training has centred on high level courses which are offered by reputable universities and other education institutions.

Management level has benefited from these courses. The middle level skilled personnel have also been advanced in learning in order to meet the demand that is being encountered by the Organisation. This approach has safeguarded implementation of a mandatory skills retention strategy that would enable the Organisation to maintain adequate levels of critical competencies. Bloem Water skills development is resultant from the Workplace Skills Plan (WSP) that is developed and submitted to EWSETA yearly.

Bloem Water continues to work in partnership with the Department of Water and Sanitation regarding identification of the relevant training for the water purification personnel.

CORPORATE SUPPORT


Table 15: Academic Qualifications: Assistance during 2013/14 Financial Year

Occupational Group Band Priority Training / skills needs African Coloured Asian White

M F M F M F M F

Craft and related workers 5 & 6 Technical Skills (Mechanical, electrical and maintenance)

3

Plant machine operators and assemblers

Project Management 1

Water Treatment 1

Administration and related profession

B. Tech: Office Management and Technology

1

National Diploma Office Management 1

Diploma in Financial Management 1

Diploma in Logistics and Supply Chain Management

1

Elementary Occupations Security Management 1

Table 16 Short Courses: Assistance during 2013/14 Financial Year

Occupational Group Band Priority Training /skills needs African Coloured Asian White

M F M F M F M F

Senior Officials and Managers 7 & 8 SHE Accountability for Managers 8 6 14

Bid Committee Training 4 1 2

Handling Disciplinary Hearing 1 1

Case Law Updates 1 2 1

Being a Director - Part 1-3 1 2 1

Water Leaks 2 2

Risk Assessment ISO 5 3 5 2

Interviewing Techniques 1 1

IT Maximo 7.Report Writing 6 3 1

Negotiation Skills 2

Change Management 1 1

IT Corporate Governance 6 4 5 2

Master of International Public

Procurement Training

1

Craft and related workers and

Junior Management

6 Chlorine Handling 18 7 7 1

Dam Management 5 3 3 1 6

Adroit 3 2 2 4

Conveying of Hazardous Goods 8 2 3

Wiring Code 1 1 1

Substation Planning Layout 1

CORPORATE SUPPORT


Occupational Group Band Priority Training /skills needs African Coloured Asian White

M F M F M F M F

Change Management 9 3 1 1 4

HAZMAT Awareness 8 4 3 2 1 5

Plant machine Operators and

assemblers

5 Plant operation N3 6 2 6

Pump station 3

Water Quality Management 8 3 2

Laboratory Systems 7 5 2

Operation of Water and Water

Wastewater treatment Plants

2 2

Process Controller Workshop 1 1 1 3 2

Water Sampling 11 4

Chlorine Training 12 2 2

Administration and related

profession

4 Logistics and Supply Chain Management 1

Internal auditors/ Accountability 1 1

SHEQ Awareness 6 7 1 2 1 4

HIRA 5 6 1 1 3

Hazard Identification and Risk 4 5 7

Advanced Security Course 6 7 2 1 1 4 3

Tax Training 2 1

Supply Chain and Tendering

ABET Training 5 2 1 1

Report Writing Skills 2 7 1 1 3

Asset Procurement and Disposal 2 3 6 1

Supervisory Training 8 2 1 2 2

Essential Labour Law 7 3 2 1

Customer Care 16 7 1 2

Cross Examination and Advocacy Skills

Workshop

6 3 1

IMS Facilitation Training 4 1

Promulgated Construction Regulations 7 8 1 1

Financial Fitness Training 11 6 3

Dangerous Goods Training 1 2

Operational Risk Management 1

Integrated Supply Chain Management 1

HSE Accountability Training for

Supervisors

12

First Aid level 1, 2 ,3 3 5 8

Confined Space Training 11 3

National HR Standards Roll out 1

CORPORATE SUPPORT


Table 17: Literacy Training

Occupational Group Band Priority Training/skills needs African Coloured Asian White

M F M F M F M F

Elementary Occupations 2&3 OHS Awareness 20 5 2 2 0 0 2 3

Fire Fighting 7 8

Lay Counselling 2 8

Crane Training 2

Security Management Training 16 5 1

Table 18: Learnership and Internship Programme for external unemployed youth

Occupational Group Priority Training/skills needs African Coloured Asian White

M F M F M F M F

Plant machine Operators and assemblers Water Care NQF 2 8 4

Craft and related workers

Mechanical Artisanship 6 2

Electrical Artisanship 3 2

Administration and related profession Finance and Administration 1 1

Supply Chain 1

Table 19: Directors

Occupational Group Priority Training/skills needs African Coloured Asian White

M F M F M F M F

Directors Being a Director - Part 1-4 1 1

World Water Week 2 1

Corporate Governance Training 3 2 1

CORPORATE SUPPORT


STRATEGIC PARTNERSHIP PROGRAMMES

Exchange Programme and Twinning Partnership In addition to the skills development initiatives aforementioned, Bloem Water advocates skills transfer through the Fredskorpset Twinning Partnership and other Water Boards which support the Employee Exchange Programme. This partnership contributes towards lasting improvements in the economic, social and political conditions of the population of partner developing countries, with particular emphasis on ensuring that development assistance benefits the poor and promotes a just world based on the recognition of fundamental human rights. The Programme has contributed immensely to promotion of reciprocal learning and critical skills enhancement and has helped participants in integrating their know-how and experience in the overall development of the participatory organisations. The Exchange Programme with other Water Boards has contributed to skills transfer in water quality management and engineering services.

CHANGE MANAGEMENT The employees at Bloem Water were empowered through the change management sessions that were aimed at equipping the newly appointed employees to understand the rationale for the Organisation to undergo a change. The change management process was introduced as an inclusive methodology that would allow employees to fairly participate in the process. The ADKAR (Awareness, Desire, Knowledge, Ability and Reinforcement) Model was adopted as the tool that would be used to drive the change route.

SAFETY, HEALTH, ENVIRONMENT AND QUALITY (SHEQ)

Employee Health Programmes Wellness is an internal Program focusing on developing the holistic well-being of employees and promotes a positive alignment with Bloem Water’s Human Resource Management Strategy in areas of motivation and staff retention. It aims to reduce absenteeism, medical aid expenses and corporate health risk exposure by addressing the need to reduce lifestyle diseases while at the same time increasing employee morale, engagement and productivity. A wellness

voluntary support group has been established within Bloem Water which is dedicated to assist other employees in need of wellness services. Bloem Water has partnered with other Water Boards for benchmark purposes on health issues.

Wellness Interventions Bloem Water continues to implement the wellness interventions as assistance tools to manage the health and wellness of employees in areas of affliction to promote greater employee productivity. Educational sessions are held with the Support Groups regularly in order to equip them to deal with employee questions in health related issues. Employees are involved in involved in wellness activities thereby claiming ownership of the Programme. The Wellness Programme includes HIV/Aids and disease management initiatives. Workshops continue to be conducted by the Wellness Committee to ensure that employees are aware of the Policies and understand the contents of the Policies; that all target groups are reached, discussion and participation is encouraged and the buy-in thereof. Monthly reports are submitted on the utilisation of the services which distinguish the areas where employees are afflicted.

Bloem Water continues to make a contribution towards minimising the social, economic and developmental consequences of the disease and will pursue to form alliances and build partnerships in order to develop a common vision and shared strategy with all stakeholders.

Health and Safety Bloem Water complies with the requirements of the Occupational Health and Safety Act, Act 85 of 1993 and has developed a Safety, Health, Environment and Quality Policy Statement in line with OHSAS 18001, ISO 9001 and ISO 14001 standard requirements. Relevant Committees have been established to ensure that employees are provided with information, instructions, training and supervision as may be necessary to ensure, as far as is reasonably possible, their health and safety whilst on duty. Various Programmes for improved health and safety in the workplace are being undertaken. For the year under

CORPORATE SUPPORT


review, Bloem Water has conducted the Baseline Risk Assessment for all the four regions.

EMPLOYMENT EQUITY, GENDER EQUALITY AND WOMEN IN BLOEM WATER Bloem Water commits itself to the formulation, implementation and monitoring of an Employment Equity Programme as part of the Organisation’s Strategic Plan by providing training and development opportunities for employees. A comprehensive Employment Equity Plan is in place for a five year period ending in 2017. An Employment Equity Report which entails the progress on the implementation of the Plan and achievement of the numerical targets is submitted to the Department of Labour annually. Bloem Water is currently at 80% in achievement of the designated group representation targets in senior management levels.

On women representation programmes, Bloem Water’s main objective is to incorporate a gender-sensitive perspective into all Bloem Water’s programme planning and implementation without being constrained by the fixed or stereotyped environment. The Corporate Support Department is tasked with overseeing the implementation of specific gender-related projects in concert and consultation with all other Departments. Emerging women contractors received preference for executing the internal projects.

Representation on occupational levels Total number of employees (including employees with

disabilities) in each occupational level

Note: A = Africans

B = Coloureds

I = Indians

W = Whites

Table 20: Representation on Occupational Levels

Occupational Levels

Designated Non-designated

Male Female White Male Foreign

Nationals

Total

A C I A C I W W M F

Top Management 3 0 0 2 0 0 1 1 0 0 7

Senior Management 2 0 0 1 0 0 1 3 0 0 7

Professional qualified, experienced Specialists and

mid-Management

16 0 0 3 0 0 2 2 0 0 23

Skilled technical, academically-qualified workers,

junior Management, Supervisors, Foremen and

Superintendents

44 2 1 7 3 1 4 9 0 0 73

Semi-skilled and discretionary decision-making 90 3 0 18 3 0 3 3 0 0 119

Unskilled and defined decision-making 80 4 0 11 0 0 1 3 0 0 99

TOTAL PERMANENT 235 9 1 42 8 1 12 21 0 0 328

Non-permanent employees 21 1 0 5 0 0 0 1 0 0 28

GRAND TOTAL 256 10 1 47 8 1 12 22 0 0 356

CORPORATE SUPPORT


INFORMATION TECHNOLOGY The IT systems at Bloem Water are reviewed on regular basis in order to keep aligned with current technological standards. For the year under review, Bloem Water has embarked on upgrading the IT systems in order to enhance operational performance. This exercise will also equip the users with a custom-made system to ascertain the functional independence. The new upgraded system will ensure that the users are empowered through training which will be commissioned for each departmental unit. The disaster recovery plan is part of the security measures that are to be reviewed.

In an effort to ensure an increased ability to overcome disasters that could lead to computer and data loss, the IT Department is still maintaining the Virtualization of the file servers in the Bloemfontein office through VM Ware. This virtual environment will allow Bloem Water to resume operations within hours after a disaster and with a maximum data loss of 30 minutes. This is so far the most critical emergency plan that is available.

SECURITY This function is mandated to protect Bloem Water assets which are physical, buildings, equipment etc. However the organization experienced a scourge of theft of its vehicles during the year under review. This led to the whole unit to be fully capacitated, and is gradually taking off to be able to fulfil its mandate effectively. Some of the measures included the appointment of additional securities, equipment and 24 hour armed response. The security policy has been developed which is still within internal forums for inputs. The Corporate Support Department, through its activities remains committed to driving values of creating and sharing knowledge. The individual and interactive nature of knowledge development and pathways for building knowledge across multiple performance levels in alignment with strategic objectives of Bloem Water is a sure way to ensure competence in delivery of institutional mandates and stewardship across all levels.

ACHIEVEMENTS AT A GLIMPSE Section Area Achievements

Human Capacity Development

Internships Apprenticeship: Selection of employees for trade test certification training in mechanical and electrical functional areas. Three employees were trained to obtain trade certification on mechanical functional area.

Learnerships Interns are recruitment annually or when need is identified. For the year under review, 4 interns were recruited; 2 in Supply Chain and 2 in IT.

ABET ABET classes are held for a week once a month from level 1-3 for 8 employees.

Training & Development

NQF2 & 3 Water and Waste Water in-house training commenced in July 2014 for both 18.1 and 18.2 learners.

Training: 40 different courses attended to during the current financial year.

Appointment of 25 learners, 23 in core function and 2 in support function.

About 80% of the staff complement has attended development sessions.

Conferences Staff members have presented different papers in either Regional or National water related conferences. 3 Treatment Plant Process Controllers made a presentation on Chemical Optimisation at the 4th Municipal Water Quality Conference in July 2013. The Orange River Regional Manager made a presentation on Water Recycling at the IWA Conference in Windhoek, July 2013. Executive: Corporate Support presented a paper in May 2014 on Human Capacity Development and Training Challenges at WISA Conference.

CORPORATE SUPPORT


Section Area Achievements

Safety, Health, Quality and Environment

Policies & Procedures Policy statement has been developed and approved by the Board.

Audits & Risk Assessments

OHS Audits and risk assessment are implemented on monthly basis. Baseline risk assessment has been completed in three regions, remaining with Bloemfontein office.

Awareness Internal workshops are conducted on quarterly basis for the employees on SHEQ awareness topics.

Wellness Employee Wellness Programme in place. This includes the subsidized transport for employees at head office. This ensured that employees arrive at work safe on time.

Security Policies, Plans & Procedures

A security plan is developed. A security policy has been developed and is still within the relevant forums for inputs SHEQ policy has been developed and recommended by HR Board Committee. About 29 SOPs have been developed and are placed on the intranet.

Armed response security is in the process of negotiations to be finalised before June 2014.

Recruitment of additional security personnel in process of being finalised.

Intruder alarms have been installed in all regions including head office.

Events Participation in SHEQ Calendar Days.

Security Measures Surveillance cameras in Bloemfontein office have been installed.

Fencing in different working has been reinforced.

Information Technology

Policies, Strategies & Plans

Realign the IT Master Plan to the Objectives of the Stakeholders Compact. The IT Master Plan is in the Process of being reviewed to include the New systems. Implement ISO24762 guidelines. Work is progressing towards achieving ISO 27001 guidelines.

Systems IT review systems project in progress to ensure operational efficiency. Regular updates on advanced information technology systems to allow smooth operations.

IT Training Training for the IT users is underway. This training will enable the users from different sections to operate basic functional systems.

Infrastructure Replace aging servers other network infrastructure. Identify regions where bandwidth upgrade is needed.

IT Continuity Disaster Recovery Plan is in the process of being reviewed for inclusion of new systems.

HUMAN RESOURCE


Huma n Resour ce

Integral to the Bloem Water strategy to assuring sustainable provision of quality water services, it must be resourced with talented, energised and passionate employees. Enabling success through recruitment, transformation, talent management and learning and development are key focus areas of the Department.

It is an interesting, exciting and challenging time in Human Resource Management at Bloem Water and the year saw the Department embark on a journey to develop new standards while at the same time enhancing and improving existing areas ever mindful of enabling success.

We reflect on a year of initiatives to build an aligned, engaged and productive workforce aimed at achieving the organisation’s objectives.

ACHIEVEMENTS Bloem Water is proud to have received two prestigious performance awards during the year. Bid Group One awarded Bloem Water with an International Star for Leadership in Quality at the annual Quality Convention held in Paris. Bloem Water was considered for the award based on its total quality management approach as per the following elements:

� A quality-driven organization � A customer-minded approach � Job satisfaction � System efficiency � Technological renewal � Leadership in society � Concentration on the most profitable areas of

business

A silver ward was bestowed on Bloem Water by PMR Africa in the category for Water Providing Companies following a Free State Provincial Survey. Both awards are the culmination of a research process whereby institutions are rated based on respondents’ perceptions with a strong focus on evaluating and measuring quality and performance. The awards were the end result of a research process whereby Bloem Water was nominated and rated by respondents against specific attributes and/or criteria.

HUMAN RIGHTS Bloem Water has always endeavoured to conduct business responsibly and ethically. The South African Constitution is renowned for the spread and depth of human rights enshrined in its Bill of Rights, which also applies to Bloem Water. Bloem Water’s commitment to human rights is fundamental to the way we treat our employees with dignity, fairness and respect and we are guided by our shared values of integrity, collaboration and accountability. BBBEE, Supply Chain Management and employment practices are aligned to standards of quality and integrity.

GOVERNANCE The Human Resource (HR) Committee as outlined in page 19, under Corporate Governance, oversees the activities of the HR Department and its commitment and guidance is vital for good, principled practices. To this end, the HR function is managing related investments to:

� optimize performance of the organization’s human capital assets;

� fulfil fiduciary and financial responsibilities; � mitigate enterprise HR risk; and � align the function’s priorities with those of the

business.

RECRUITMENT AND RETENTION Bloem Water recognizes that it needs to be competitive in recruitment and talent retention efforts. The total compensation package is key to the success of recruitment and retention activities. A solid mix of direct compensation and benefits within a supportive environment is provided to enhance recruitment and retention efforts. Bloem Water advocates a strong internal recruitment focus and capability as part of an integrated approach to employee recognition and talent retention.

The Defined Benefit pension fund is one of the more competitive benefits offered by Bloem Water and is greatly valued by current employees while at the same time serves as an attractive incentive for new employees.

HUMAN RESOURCE


Nevertheless, it is acknowledged that the value of remuneration and benefits is difficult to quantify and should be communicated more fully in a meaningful way to staff.

During the year under review, a total of 85 positions were filled according prioritised vacancies in the technical disciplines. More should however be done to promote gender equality in technical disciplines where appointments were predominantly male. With new technologies being produced daily, Bloem Water is seeking to get the right people on board and apply those particular skills to take the business forward.

Different roles have been condensed into one employee’s responsibility and other employees are multi-tasking various roles at which they excel. This flexibility requires continuous and regular review of job titles and job evaluations but offers more learning and growth opportunities in different areas of the business. This is another effort to enable success, both at individual and institutional level.

FOSTERING A HEALTHY WORKPLACE Bloem Water wishes to move towards a comprehensive approach to creating a healthier workplace. While the HR department has a role to play, a comprehensive approach requires the involvement of many within the Bloem Water community.

A facility to increase physical activity introduced in the year under review is but one element of building a healthier workplace. The Department further offers financial planning sessions facilitated by experts and a number of employees attended sessions on budgeting, saving and financial instruments.

The annual pre-retirement workshop for employees within 5 years of retirement was extended to employees within 10 years of retirement. Two sessions, in English and Sotho respectively, were presented to employees and good feedback was received.

This year a dipstick employee satisfaction survey yielded a satisfaction index of 59% compared to 69% in the previous year. The following dimensions were identified as areas requiring improvement: opportunity for growth, teamwork, culture and work

environment. Insights gained from this survey are used to guide and prioritise employee engagement and human resources initiatives and a series of feedback sessions were conducted in all regions.

PERFORMANCE MANAGEMENT AND DEVELOPMENT Ensuring our workforce has the right skills and abilities is essential to long-term success. Staff development is supported by means of accredited and non-accredited learning opportunities. The performance management system further enhances employee development through quarterly abstracting of training and development needs agreed between employees and supervisors. These needs are then filtered into the workplace skills plan for an integrated approach towards learning and development.

The HR Department hosted workshops during the year under review to provide feedback on a case-study basis to supervisors. The aim of these engagements is to improve and create meaningful discussions when performance assessments are conducted and to increase a mutual understanding of expectations.

SUPPORTING OUR DIVERSE WORKFORCE AND LABOUR RELATIONS As an employer, Bloem Water is committed to removing workplace barriers that negatively affect individuals or groups. The employment equity program, wellness and training programs collectively serve to improve support to the workforce.

The workforce contains a mix of unionized and non-unionized groups and approximately 76.97% of employees are unionized. The South African Municipal Workers Union (SAMWU) and the National Health and Allied Workers Union (NEHAWU) are proportionately represented at the bargaining structure.

The Local Labour Forum (LLF) is fundamental in maintaining a healthy labour environment through active labour-management engagements and at times robust deliberations. Monthly LLF meetings and quarterly policy consultative sessions are held to attend to matters. The Training Policy and Fraud Prevention Policies were presented at the LLF by respective policy custodians.

HUMAN RESOURCE


The forum reviewed the Recruitment, Acting, Grievance, Bereavement and Staff Retention policies during the year.

Wage negotiations for the 2013/14 financial year were successfully concluded at plant level and implemented at the due date compared to previous years’ retrospective implementation.

PLANNING FOR THE FUTURE Going forward Bloem Water seeks to progressively keep abreast with career and workplace trends.

Baby boomers (people born between 1946 and 196, they are achievement-oriented, dedicated and career

focused), are expected to start retiring, changing the demographics and landscape of the workplace. Succession- and mentorship planning, understanding and training the younger generations will be instrumental to convert potential gaps into opportunities. Fostering new ideas, innovation, and workplace flexibility and bringing young people into employment and support those to overcome the employability gap whilst providing bridging programs to enable success.

By understanding the current workforce, we are better equipped to prepare for the future by ensuring the right mix of talent with the right skills to enable success.

Figure 13: Age Analysis

0

5

10

15

20

25

30

35

40

45

<25 26 - 30 31 - 35 36 40 41 - 45 46 - 50 51 - 55 56 - 60 61 - 65Male 12 44 40 42 38 21 20 16 8Female 11 15 15 12 15 4 9 5 1

Num

ber

of e

mpl

oyee

s

Age Analysis

HUMAN RESOURCE


Figure 14: Appointments

Figure 15: Appointments per Gender

33%

58%

9%

Appointments

Admin

Maintenance

Treatment


Annual Financial Statements

Financial statements

for the year ended 30 June 2014


Annual financial statements for the year ended 30 June 2014 Entity information Registered address: 2 Mzuzu Street Pellissier Bloemfontein 9300 Postal address: PO Box 30121 Pellissier Bloemfontein 9322 Auditor: KPMG Incorporated Bankers: First National Bank of Southern Africa Limited ABSA Bank Investec Bank Standard Bank Nedbank Country of incorporation: South Africa Legal form: Schedule 3 B entity Nature of business: The supply of purified and un-purified water Contents Page Statement of responsibilities and approval 84 Report of the Audit Committee 85–86 Independent auditor’s report 87–90 Statement of financial position 91 Statement of comprehensive income 92 Statement of changes in equity 93 Statement of cash flows 94 Notes to the financial statements 95 – 130 Detailed statement of comprehensive income 131 – 132


Statement of responsibilities and approval for the year ended 30 June 2014 The Board is responsible for the maintenance of adequate accounting records and the preparation, fair presentation and integrity of the financial statements and related information. The auditors are responsible to report on the fair presentation of these financial statements. The financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice (SA GAAP) as at 1 April 2012 and in the manner required by the Public Finance Management Act of South Africa, Act No. 1 of 1999 and other enabling legislation. The application of SA GAAP as at1 April 2012 has been mandated by the Accounting Standards Board. A detailed analysis to the application is set out in notes 1.1 and 1.2 to the financial statements. The Board also prepared the other information included in the annual report and is responsible for both its accuracy and its consistency with the financial statements. The Board is also responsible for such internal control as the Board determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. These controls are designed to provide reasonable, but not absolute assurance as to the reliability of the financial statements and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect misstatement and loss. Nothing has come to the attention of the Board to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review. The financial statements have been prepared on the going concern basis since the Board has every reason to believe that Bloem Water has adequate resource in place to continue in operation for the foreseeable future. The independent auditing firm KPMG Incorporated has audited the financial statements. They have been given unrestricted access to all financial records and related data, including minutes of all meetings of the Board and committees of the Board. The Board believes that all representations made to the independent auditors during their audit were valid and appropriate. The audit report is presented as part of the annual financial statements. The financial statements were approved by the Board and signed by the Chief Executive.


Report of the Audit Committee for the year ended 30 June 2014 We are pleased to present our report for the financial year ended on 30 June 2014. Audit Committee Responsibility The Committee reports that it has complied with its responsibilities arising from Section 38(1)(a) of the PFMA and Treasury Regulation 3.1.13. The Committee also reports that it has adopted an appropriate formal Terms of Reference as its Audit Committee Charter, has regulated its affairs in compliance with this Charter and has discharged its responsibilities as contained therein. The effectiveness of internal control The system of internal control is designed to provide cost-effective assurance that assets are safeguarded and that liabilities are efficiently managed. In line with the PFMA and the King III Report on Corporate Governance requirements, internal audit provides the Committee and the Board an assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. Bloem Water operates in a challenging environment, from strategic, business and operational perspectives. From the various reports of the internal Auditors, a number of areas were highlighted that required control improvement. Management has put processes and systems in place to address these issues. Despite these weaknesses, we can report that overall, the systems of internal control during the 2013/2014 financial period were effective and efficient. The Committee, therefore, considers Bloem Water’s internal controls and systems appropriate in all material respects to: � Reduce Bloem Water’s overall risks to an acceptable level � Ensure Bloem Water’s assets are adequately safeguarded � Meet business objectives of Bloem Water. The quality of in-year management and quarterly reports submitted in terms of the PFMA and the Division of Revenue Act. We are satisfied with the content and quality of monthly and quarterly reports prepared and issued by the Organisation during the year under review.


Report of the Audit Committee for the year ended 30 June 2014 (Continued) Evaluation of Financial Statements The Audit Committee has: � Reviewed and discussed with the external Auditors and Management the Annual Financial

Statements (AFS) to be included in the Annual Report; � Reviewed the external Auditors’ Audit Report and Management responses thereto; � Reviewed the accounting policies and practices; � Reviewed significant adjustments resulting from the audit; � Reviewed the Annual Financial Statements prior to publication both for fair presentation and

for conformity with the South African Statements of Generally Accepted Accounting Practices (SA GAAP).

Conclusion The Committee has evaluated the Annual Financial Statements of Bloem Water for the period ending 30 June 2014 and concluded that they comply, in all material aspects, to the requirements of the PFMA No.1 of 1999 (as amended) and the South African Statements of Generally Accepted Accounting Practice (SA GAAP). The Committee also agreed that the adoption of the going concern premise is appropriate in preparing Bloem Water’s Annual Financial Statements. The Committee, therefore, recommended the adoption of the Annual Financial Statements by the Board at its meeting on 18 September 2014. The Committee notes and supports the conclusions of the external Auditors, and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the independent Auditors. The Committee would like to congratulate Management on obtaining an unqualified audit report.

N MOKHESI CHAIRPERSON OF THE AUDIT COMMITTEE


Independent auditor’s report to Parliament and the Executive Authority, the Minister of Water and Sanitation on Bloem Water

Report on the Financial Statements We have audited the financial statements of Bloem Water as set out on pages 91 to 130, which comprise the statement of financial position at 30 June 2014, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and the notes, which include a summary of significant accounting policies and other explanatory information to the financial statements. The Accounting Authority’s responsibility for the financial statements The board of directors which constitutes the accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance with South African Statements of Generally Accepted Accounting Practice and the requirements of the Public Finance Management Act of South Africa, and for such internal control as the Accounting Authority determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Public Audit Act of South Africa, the General Notice issued in terms thereof and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, these financial statements present fairly, in all material respects, the financial position of Bloem Water at 30 June 2014 and its financial performance and cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice and the requirements of the Public Finance Management Act of South Africa.


Independent auditor’s report to Parliament and the Executive Authority, the Minister of Water and Sanitation on Bloem Water (continued) Other matter Supplementary information set out on pages 131 to 132 does not form part of the financial statements and is presented as additional information. We have not audited these schedules and accordingly we do not express an opinion on them. Report on Other Legal and Regulatory Requirements Public Audit Act Requirements In accordance with the Public Audit Act of South Africa (PAA), and the General Notice issued in terms thereof, we report the following findings relevant to the reported performance against predetermined objectives, compliance with laws and regulations as well as internal control. We performed tests to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, we do not express an opinion or conclusion on these matters. Predetermined Objectives We performed procedures to obtain evidence about the usefulness and reliability of the information in the Report on Performance against the strategic plan as set out on pages 133 to 140 of the annual report, and reported thereon to the Accounting Authority. The procedures performed were limited to the following selected objectives: � Water Quality Compliance � Non-revenue water � Reliability of supply � Board member attendance � Effective internal control and risk management � Capital Expenditure (Overall expenditure within the R target) � Capital Expenditure (Overall project completion dates within target) � Increased access to services (Capex spend or number of expansion projects) � Achieve Statutory Reporting compliance � Jobs created (Permanent, temporary and contracted) � Good governance


Independent auditor’s report to Parliament and the Executive Authority, the Minister of Water and Sanitation on Bloem Water (continued) The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the reported performance against predetermined objectives relates to whether it is presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are well defined, verifiable, specific, measurable, time bound and relevant as required by the National Treasury Framework for managing programme performance information. The reliability of the information in the reported performance against predetermined objectives is assessed to determine whether it is valid, accurate and complete. We report that there were no material findings on the Report on Performance against the strategic plan concerning the usefulness and reliability of the information. Additional matter Although no material findings concerning the usefulness and reliability of the reported performance against predetermined objectives were identified, we drew attention to the following matter in our report to the Accounting Authority: Achievement of planned targets Of the total 23 planned targets, only 17 were achieved during the year under review. This represents 26% of total planned targets that were not achieved during the year under review. The directors have presented reasons for variations from planned targets in the Report on Performance against the strategic plan. Compliance with Laws and Regulations We performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financial management and other related matters. We did not identify instances of material non-compliance with specific matters in key applicable laws and regulations as set out in the General Notice issued in terms of the PAA. Internal Control We considered internal control relevant to our audit of the financial statements, Report on Performance against the strategic plan and compliance with laws and regulations, but not for the purpose of expressing an opinion on the effectiveness of internal control. We did not identify any deficiencies in internal control that we considered sufficiently significant for inclusion in this report.


Independent auditor’s report to Parliament and the Executive Authority, the Minister of Water and Sanitation Affairs on Bloem Water (continued)

Other Reports Agreed upon procedures engagements We were engaged by the Accounting Authority to perform agreed upon procedures on the performance contracts of the entity and reported the results thereof on 21 October 2013. Investigations An investigation by the Public Protector to probe alleged non-compliance with supply chain regulations commenced during this financial year. The investigation is still ongoing at the date of this report and the potential impact on the financial statements cannot be determined. Other Matter The matters contained in the Report on Other Legal and Regulatory Requirements are not considered to affect our opinion on the Financial Statements. KPMG Inc. Registered Auditor

Per: O Wentworth Chartered Accountant (SA) Registered Auditor Director 23 September 2014 200 Nelson Mandela Road Bloemfontein


Statement of financial position at 30 June 2014 Note 2014 2013 R’000 R’000 Assets Non-current assets 801 125 740 506 Property, plant and equipment 2 780 313 720 509 Defined benefit asset 16 20 812 19 997 Current assets 443 446 329 318 Inventories 3 12 117 9 424 Trade and other receivables 4 71 583 49 895 Short term investments 5 170 348 176 541 Cash and cash equivalents 6 159 185 93 458 Infrastructure project receivable 22 30 213 - Total assets 1 244 571 1 069 824 Equity and liabilities Capital and reserves 812 934 747 299 Retained earnings 602 276 533 954 Capital replacement fund 87 350 87 350 Capital development fund 70 217 70 217 Insurance fund 9 512 8 178 Asset DWS reserve fund 43 579 43 579 Revaluation reserve - 4 021 Non-current liabilities 309 090 176 470 Interest bearing loans and borrowings 7 221 371 176 470 Deferred income 21 87 719 - Current liabilities 122 547 146 055 Current portion of interest bearing loans and borrowings 7 69 586 70 388 Trade and other payables 8 52 961 75 667 Total equity and liabilities 1 244 571 1 069 824


Statement of comprehensive income for the year ended 30 June 2014 Note 2014 2013 R’000 R’000 Revenue 10 418 593 376 954 Water abstraction costs (23 337) (26 099) Gross income 395 256 350 855 Other income 10.1 20 178 2 224 Chemicals (14 826) (13 828) Depreciation (47 209) (39 292) Distribution cost (14 630) (11 702) Energy cost (75 443) (65 742) Repairs and maintenance (12 437) (9 204) Staff costs (116 553) (97 676) Impairment of trade receivables (15 213) (16 828) Operating expenses (56 516) (38 087) Operating profit 11 62 607 60 720 Finance income 12 24 036 16 706 Finance costs 13 (21 008) (14 303) Profit for the year 65 635 63 123 Total comprehensive income for the year 65 635 63 123


Statement of changes in equity for the year ended 30 June 2014 Note 2014 2013 R’000 R’000 Retained earnings Opening balance 533 954 471 709 Total comprehensive income for the year 65 635 63 123 Transfer from / (to) the insurance fund (1 334) (878) Transfer from revaluation reserve 4 021 - Closing balance 602 276 533 954 Capital replacement fund Opening balance 87 350 87 350 Transfer from / (to) retained earnings - - Closing balance 87 350 87 350 Capital development fund Opening balance 70 217 70 217 Transfer from / (to) retained earnings - - Closing balance 70 217 70 217 Insurance fund Opening balance 8 178 7 301 Transfer from / (to) retained earnings 1 334 878 Closing balance 9 512 8 178 Asset DWS reserve fund Opening balance 43 579 43 579 Transfer from / (to) retained earnings - - Closing balance 43 579 43 579 Revaluation reserve Opening balance 4 021 4 021 Transfer from / (to) retained earnings (4 021) - Closing balance - 4 021


Statement of cash flows for the year ended 30 June 2014 Note 2014 2013 R’000 R’000 Cash flow from operating activities Net cash inflow from operating activities 49 889 166 337 Cash received from customers 381 692 386 039 Cash paid to suppliers and employees (329 386) (215 608) Cash generated from operating activities 14.1 52 306 170 431 Finance income 24 036 16 706 Finance costs (including borrowing cost capitalised) (26 453) (20 800) Cash flow from investing activities Net cash outflow from investing activities (122 173) (146 378)

To expand and refurbish

Additions to property, plant and equipment (102 444) (126 486)

Proceeds on disposal of property, plant and equipment 212 108 Contributions made to defined benefit plan (19 941) (20 000) Cash flow from financing activities Net cash generated in financing activities 131 921 12 052 Deferred income Interest bearing borrowings raised

87 719 106 633

- 41 267

Interest bearing borrowings repaid (62 431) (29 215) Net increase in cash and cash equivalents 59 637 32 011 Cash and cash equivalents at the beginning of the year 269 923 237 912 Cash and cash equivalents at end of the year 14.2 329 560 269 923


Notes to the financial statements for the year ended 30 June 2014 1. Summary of significant accounting policies

The principle accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied, unless otherwise stated.

1.1. Basis of preparation and measurement Basis of measurement The financial statements have been prepared on the historical cost basis except where

otherwise indicated. The financial statements are presented in South African Rand (R) (rounded to the nearest thousand (R’000) except where otherwise indicated), which is the functional and presentation currency.

Statement of compliance The financial statements of Bloem Water have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice (SA GAAP) as at 1 April 2012 (including all amendments to May 2011) and the Public Finance Management Act of South Africa, Act No. 1 of 1999 (PFMA).

1.2 Changes in accounting policies and disclosures The new Companies Act, 2008 (Act No. 71 of 2008) required a re-evaluation of the continued existence of statements of SA GAAP. This resulted in a decision during March 2012 to withdraw statements of SA GAAP for financial years commencing on or after 1 December 2012. The withdrawal of statements of SA GAAP has an impact on schedule 3B public entities (i.e. Bloem Water) that are required to apply the SA GAAP reporting framework. In response, the Accounting Standard Board (ASB) is currently researching and re-evaluating the appropriate reporting framework for schedule 3B public entities. The ASB will in due course determine the appropriate financial reporting framework to be applied by these entities. In the interim, the ASB has approved that public entities that previously applied statements of SA GAAP should continue to apply statements of SA GAAP as at 1 April 2012, including amendments to May 2011. Consequently, Bloem Water will continue to apply SA GAAP as at 1 April 2012 to the financial statements for the year ended 30 June 2014. The financial statements of Bloem Water for the year ending 30 June 2015 will need to be converted to either International Financial Reporting Standards (IFRS) or Generally Recognised Accounting Practice (GRAP) as may be determined by the ASB. In the event of a transition to IFRS, there are new or revised Accounting Standards and Interpretations in issue that are not yet effective. These include the following Standards and Interpretations that are applicable to the business of the entity and will have an impact on future financial statements; these will be adopted in the period that they become mandatory unless otherwise indicated:


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.2 Changes in accounting policies and disclosures

Standard or Interpretation The Board is of the opinion that the impact of the application of the remaining Standards and Interpretations will be as follows:

Effective for the financial year end commencing 1 July 2014 IFRS 13 Fair Value Measurement The standard will be applied prospectively and

comparatives will not be restated. IFRS 13 introduces a single source of guidance on fair value measurement for both financial and non-financial assets and liabilities by defining fair value, establishing a framework for measuring fair value and setting out disclosures requirements for fair value measurements. The key principles in IFRS 13 are as follows: � Fair value is an exit price � Measurement considers characteristics of the asset or

liability and not entity-specific characteristics � Measurement assumes a transaction in the entity’s

principle (or most advantageous) market between market participants

� Price is not adjusted for transaction costs � Measurement maximises the use of relevant observable

inputs and minimises the use of unobservable inputs � The three-level fair value hierarchy is extended to all

fair value measurements The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.2 Changes in accounting policies and disclosures (continued)


Effective for the financial year end commencing 1 July 2014 IAS 19 (amendments) Employee Benefits: Defined Benefit Plans

In terms of the amendments, the following key changes will have an impact on the entity: � Actuarial gains and losses are recognised immediately

in other comprehensive income. The corridor method and the recognition of actuarial gains and losses in profit or loss are no longer permitted.

� Past service costs as well as gains and losses on curtailments / settlements are recognised in profit or loss.

� Expected returns on plan assets are calculated based on the rates used to discount the defined benefit obligation.

� The definitions of short-term and other long-term employee benefits have been amended and the distinction between the two depends on when the entity expects the benefit to be settled.

The impact on the financial statements for Bloem Water is considered to be significant. The unrecognised actuarial losses to be recognised in the statement of comprehensive income is expected to amount to approximately R25 million. Retained earnings and the pension fund asset are expected to decrease with approximately R25 million (i.e. a pension fund liability of approximately R4 million will exist). Additional amendments are of a presentation nature and will not have a significant impact on the entity’s financial statements.

IFRS 1 amendment Government Loans

The amendment provides an additional relief to first-time adopters of IFRS from retrospectively measuring government loans with a below-market rate of interest. The amendments address concerns that the retrospective measurement of these government loans at fair value at their dates of origination could lead to first-time adopters applying hindsight. The impact on the financial statements for Bloem Water is not expected to be material.




Effective for the financial year end commencing 1 July 2014 IFRS 7 (AC 144) amendment Disclosures – Transfer of Financial Assets.

The amendments to IFRS 7 will be adopted by Bloem Water for the first time for its financial reporting period ending 30 June 2015.

In terms of the amendments additional disclosure will be provided regarding transfers of financial assets that are:

� not derecognised in their entirety and � derecognised in their entirety but for which Bloem Water

retains continuing involvement. The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.

IAS 24 ( AC 126) ( Revised) IAS 24 (AC 126) (revised) will be adopted by Bloem Water for the first time for its financial reporting period ending 30 June 2015. The standard will be applied retrospectively.

IAS 24 (AC 126) (revised) addresses the disclosure requirements in respect of related parties, with the main changes relating to the definition of a related party and disclosure requirements by government-related entities.

Under IAS 24 (AC 126) (revised), the definition of a related party has been amended, with the result that a number of new related party relationships have been identified.

Government-related entities

Government-related entities will have to provide the following disclosures: name of the government and nature of the relationship; nature and amount of each individually significant transaction and a qualitative or quantitative indication of the extent of other transactions that are collectively, but not individually, significant.




Effective for the financial year end commencing 1 July 2014 IAS 32 Offsetting Financial Assets and Financial Liabilities

The amendments clarify that an entity currently has a legally enforceable right to set-off if that right is: � not contingent on a future event; and � enforceable both in the normal course of business and

in the event of default, insolvency or bankruptcy of the entity and all counterparties

The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.

IAS 1 amendment Presentation of Financial Statements: Presentation of Items of Other Comprehensive Income

This amendment provides for changes to the presentation of Items of Other Comprehensive Income to existing pronouncements. The impact on the financial statements for Bloem Water is not expected to be material.

Effective for the financial year end commencing 1 July 2015 IAS 19 Defined Benefit Plans: Employee contributions

The amendments introduce relief that will reduce the complexity and burden of accounting for certain contributions from employees or third parties. Such contributions are eligible for practical expedient if they are: � set out in the formal terms of the plan; � linked to service; and � independent of the number of years of service. The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.

Effective for the financial year end commencing 1 July 2017 IFRS 15 Revenue from contracts with customers

This standard replaces IAS 11 Construction contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC 31 Revenue Barter of Transactions Involving Advertising Services. The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.




Effective for the financial year end commencing 1 July 2018 IFRS 9 Financial Instruments IFRS 9 addresses the initial measurement and classification of

financial assets and financial liabilities and will replace the relevant sections of IAS 39. Under IFRS 9 there are two options in respect of classification of financial assets, namely, financial assets measured at amortised cost or at fair value. Financial assets are measured at amortised cost when the business model is to hold assets in order to collect contractual cash flows and when they give rise to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets are measured at fair value. Embedded derivatives are no longer separated from hybrid contracts that have a financial asset host. The classification and measurement requirements of financial liabilities are the same as per IAS 39, except for the following two aspects: � fair value changes for financial liabilities (other than

financial guarantees and loan commitments) designated at fair value through profit or loss, that are attributable to the changes in the credit risk of the liability will be presented in other comprehensive income (OCI). The remaining amount of the fair value change is recognised in profit or loss. However, if this requirement creates or enlarges an accounting mismatch in profit or loss, then the whole fair value change is presented in profit or loss. The determination as to whether such presentation would create or enlarge an accounting mismatch is made on initial recognition and is not subsequently reassessed.

� Derivative liabilities that are linked to and must be settled by delivery of an unquoted equity instrument whose fair value cannot be reliably measured, are measured at fair value.

The standard will be applied retrospectively, subject to transitional provisions. The impact on the financial statements for Bloem Water cannot be reasonably estimated as at 30 June 2014.



Standards and interpretations not expected to have an impact on the entity:

The following Standards and Interpretations are not applicable to the business of the entity and will therefore have no impact on future financial statements.

� IAS 12 amendment Deferred tax: Recovery of Underlying Assets

� IFRS 10 Consolidated Financial Statements

� IFRS 11 Joint Arrangements

� IFRS 12 Disclosure of Interests in Other Entities

� IFRS 14 Regulatory Deferral Accounts

� IAS 27 Separate Financial Statements (2011)

� IAS 28 Investments in Associates and Joint Ventures (2011)

� IAS 36 Recoverable Amount Disclosures for Non-financial Assets

� IAS 39 Novation of Derivatives and Continuation of Hedge Accounting

� IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

� IFRIC 21 Levies

� Amendments to IAS 16 and IAS 38 Clarification of acceptable methods of depreciation and

amortisation

� IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.3 Significant accounting judgments, estimates and assumptions The preparation of the entity’s financial statements in conformity with SA GAAP requires

management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are set out below:

a) Pension and other post-employment benefits

The cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The net pension plan asset at 30 June 2014 is R20 812 058 (2013: R19 996 802). Further details are disclosed in note 16.

b) Trade and other receivables Loans and receivables shall be measured at amortised cost using the effective interest method. If there is objective evidence that an impairment loss on loans and receivables carried at amortised costs has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of the loss shall be recognised in profit or loss.

c) Valuation and depreciation of property, plant and equipment Depreciation is based on the useful lives of the property, plant and equipment. The estimation of useful lives of property, plant and equipment is based on historical performance as well as expectations about future use and therefore require a significant degree of judgement to be applied by management. The depreciation rates and residual values, if any, represent management’s best estimates.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.4 Property, plant and equipment

Land is carried at cost. No depreciation is calculated on land. Furniture and office equipment are stated initially at cost, less accumulated depreciation and accumulated impairment losses in accordance with the provision of IAS 16 (AC 123) – Property, plant and equipment. Plant equipment, roads, buildings and pipelines and reservoirs are stated at cost, less accumulated depreciation and accumulated impairment losses. Cost includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the capitalisation of borrowing costs on qualifying assets (refer to note 1.13). Work in progress are stated at cost which includes cost of material, direct labour and any directly attributable costs incurred in bringing it to its present location and condition. Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. When part of an asset is being replaced, the carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the financial period in which it is incurred. Depreciation is calculated on a straight line basis over the estimated useful lives of the assets to its residual value at the following rates: Vehicles and machinery: 15 years Plant equipment: 30 years Furniture, tools and office equipment: 5 to 25 years Roads: 50 years Pipeline and reservoirs: 35 years Buildings: 60 years The assets’ residual values, useful lives and method of depreciation are reviewed and adjusted, if appropriate, at each financial year-end. When each major inspection is preformed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.5 Funds and reserves

Capital replacement fund Amounts as determined by the Board are transferred to a separate fund to be utilised for the replacement of capital assets. Amounts equal to such transfers are retained and can be utilised at the discretion of the Board. Capital development fund Amounts as determined by the Board are transferred from available funds to a separate fund to be utilised at the discretion of the Board. The fund is utilised to finance development of capital infrastructures. Insurance fund At the discretion of the Board, an amount equal to the estimated external insurance premium may be transferred to the insurance fund. This fund will be utilised for the replacement of certain assets. The funds will be utilised at the discretion of the board. Asset DWS reserve fund An amount equal to the value of property, plant and equipment in the Thaba ‘Nchu region transferred from the Department of Water and Sanitation to Bloem Water was transferred to this fund. The amount constitutes a non-distributable reserve.

1.6 Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the entity and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received/receivable excluding discounts, rebates, and value added tax or duties. The following specific recognition criteria must also be met before revenue is recognised: Sale of water Revenue is recognised when the significant risks and rewards of ownership of the water have passed to the buyer, usually on delivery of the water through the water meters and the revenue can be reliably measured.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.7 Finance income

Finance income comprises interest receivable on trade receivables and finance income from investments and cash and cash equivalents. Finance income is recognised as it accrues in profit and loss, using the effective interest rate method.

1.8 Dividend income Dividend income is recognised when the entity’s right to receive payment is established.

1.9 Inventories

Inventories are valued at the lower of cost or net realisable value. Cost is determined on the weighted average basis. Obsolete, redundant and slow moving inventories are identified and written down to their estimated net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and the estimated cost necessary to make the sale. The cost of water inventory comprises of all costs of water abstraction, costs of conversion and other costs incurred in bringing the inventory to its present location and condition.

1.10 Employee benefits Pension obligations

The policy of Bloem Water is to provide retirement benefits for all its employees. The fund represents a Defined Benefit Plan administered by Jacques Malan Fund Administrators. Obligations for contributions to defined contribution plans are recognised as en expense in the statement of comprehensive income as incurred. The defined benefit asset or liability comprises the present value of the defined benefit plan obligation less past service cost not yet recognised and less the fair value of plan assets out of which the obligations are to be settled directly. The value of any asset is restricted to the sum of any past service cost not yet recognised and the present value of any economic benefits available in the form of refunds from the plan or reduction in the future contributions to the plan. The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit method. In terms of IAS 19 – Employee Benefits, Bloem Water applies the corridor rule to any actuarial gains or losses recognised during the year, meaning that actuarial gains and losses recognised by Bloem Water is the excess over the greater of: a) 10% of the present value of the defined benefit obligation at the end of the previous

reporting period; and b) 10% of the fair value of any plan asset at the same date. As required by the Pension Fund Act 25 of 1956, a qualified actuary performs the valuation. The actuarial valuation was performed by Independent Actuarial Consultants (Pty) Limited at reporting date.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.10 Employee benefits (continued)

Short term employee benefits Short term employee benefits are those that are paid within twelve months after the end of the period in which the services have been rendered. Remuneration to employees is charged to the statement of comprehensive income. Provision is made for accumulated leave, annual bonuses, and other short term employee benefits.

1.11 Finance cost

Finance cost comprises interest payable on borrowings and interest resulting from the unwinding of discount on liabilities. Borrowing costs which are not capitalised (refer to note 1.13) are recognised in profit and loss.

1.12 Financial instruments

Non-derivative financial instruments carried on the statement of financial position comprise of cash and cash equivalents, investments, trade and other receivables, trade and other payables and interest bearing borrowings. Long term receivables are classified as loans and receivables. Financial instruments are initially carried at cost, which includes transaction costs. Subsequently, the instruments are recognised as follows: Investments and other financial assets Financial assets with the scope of IAS 39 (AC 133) – Financial Instruments: Recognition of Measurement are classified as short term investments, cash and cash equivalents, loans and receivables, held-to-maturity investments, or available-for-sale assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus directly attributable transaction costs. Short term investments Cash and cash equivalents that are not accessible within three months are classified as short term investments. Short term investments are non-derivative financial assets with fixed determinable payments that are not quoted in an active market. After initial measurement short term investments are carried at amortised cost using the effective interest rate method less any allowance for impairment. Gains and losses are recognised in profit or loss when the short term investments are derecognised or impaired.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.12 Financial instruments (continued)

Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the entity has the positive intention and ability to hold to maturity. After initial measurement held-to-maturity investments are measured at amortise cost using the effective interest method. Gains and losses are recognised in profit or loss when the investments are derecognised or impaired. Loans and receivables Loans, trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement loans and receivables are carried at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale financial investment Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified in any of the other financial asset categories. After initial measurement, available-for-sale financial assets are measured at fair value with unrealised gains or losses recognised directly in other comprehensive income until the investment is derecognised or determined to be impaired at which time the cumulative gain or loss previously recorded in other comprehensive income is recognised in profit or loss. Impairment of financial assets The entity assess at each reporting date whether a financial asset or group of financial assets is impaired. For loans and other receivables carried at amortised cost, the amount of the impairment loss is measured as the difference between the financial asset’s carrying amount and its present value of estimated future cash flows (excluding future expected credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced by the impairment loss and the loss is recorded in the statement of comprehensive income. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the statement of comprehensive income, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. For assets carried at cost, if there is objective evidence that an impairment loss on an unquoted investment that is not carried at fair value, because its fair value cannot be reliably measured, has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return of a similar asset.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.12 Financial instruments (continued)

Fair value The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument which is substantially the same and discounted cash flow analysis or other valuation modes. Amortised cost Held-to-maturity investments and loans and receivables are measured at amortised cost. This is computed using the effective interest rate method less any allowance for impairment. The calculation takes into account any premium or discount on acquisition and includes transactions costs and fees that are an integral part of the effective interest rate. General risk management principles Risk management is of critical importance to the entity as it understands that changing market conditions make risk unavoidable. Over the years the entity has sought and implemented a comprehensive risk management process to consistently identify, understand and properly manage risk at all times. Risk policies, limits and control procedures are continuously monitored.

1.13 Borrowing costs

Borrowing costs attributable to the constitution of qualifying assets are capitalised as part of the cost of these assets over the period of construction to the extent that the assets are financed by borrowings. The capitalisation rate applied is the weighted average of the borrowing costs applicable to the borrowings unless an asset is financed by a specific loan, in which case the specific rate is used.

1.14 Cash and cash equivalents

Cash and short term deposits in the statement of financial position comprise cash at banks, cash on hand. Short term investments with an original maturity of three months are classified as short term investments. For the purposes of the statement of cash flows, cash and cash equivalents comprise cash at banks, cash on hand and short term investments.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.15 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. Operating leases Leases where substantially all of the risks and rewards of ownership are not transferred to the entity, are classified as operating leases. Operating leases are charged to profit and loss on a straight-line basis over the period of the lease. Finance leases Leases where the entity assumes substantially all the benefits and risks of ownership, are classified as finance leases. Finance leases are capitalised as property, plant and equipment at the lower of fair value or the present value of the minimum lease payments at the inception of the lease with an equivalent amount being stated as a finance lease liability. The capitalised amount is depreciated over the asset’s useful life. Lease payments are allocated between capital repayments and finance expenses using the effective interest rate method.

1.16 Capital and income related grants

Capital grants for infrastructure received by Bloem Water for its own benefit are reflected against deferred income until such time as the asset becomes available for use. On the date that the asset becomes available for use, the capital grant is reflected against property, plant and equipment and is recognised in profit or loss over the remaining useful life of the depreciable asset as a reduced depreciation expense. Capital grants for infrastructure received by Bloem Water as an implementing agent are reflected against a grant liability and any spend on such project is reflected as a deduction in the grant liability. Grants related to income are reflected against deferred income for future expenditure to be incurred by the entity. The income is recognised in the period in which the related expenditure is incurred.


Notes to the financial statements for the year ended 30 June 2014 (continued) 1.17 Interest bearing borrowings

Interest bearing borrowings are recognised initially at fair value less attributable transaction costs. The discount or premium on the issue of loans is amortised over the period from acquisition to maturity so that a constant rate of interest is paid on the loan. The amortised amount is recognised in the statement of comprehensive income. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost, with any difference between cost and redemption value being recognised in the statement of comprehensive income over the period of the borrowings on the effective interest basis.

1.18 Trade and other payables

Trade and other payables are initially recognised at fair value and are subsequently measured at amortised cost.

1.19 Provisions

A provision is recognised in the statement of financial position when Bloem Water has a present legal or constructive obligation as a result of a past event, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are not made for future operating losses. Provisions are determined by discounting the expected future cash flows that reflect current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The increase in the provision due to a passage of time is recognised as finance costs.

1.20 Other income Other income comprises of income that does not arise in the course of ordinary activities of

Bloem Water. These other income items, inter alia, include skills development grant, profit on disposal of assets, employee rent and cost recoupments, implementation agent fee, insurance proceeds, etc.

1.21 Implementation agent income

Implementation agent fees received by Bloem Water for the implementation of infrastructure project on behalf of other entities and the relating contract costs are recognised as soon as the outcome of the transaction can be reliably measured. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: � The amount of revenue can be measured reliably; � It is probable that the economic benefits associated with the transaction will flow to the

entity; � The stage of completion of the transaction at the end of the reporting period can be

measured reliably; and � The costs incurred for the transaction and the costs to complete the transaction can be

measured reliably.


Notes to the financial statements

for the year ended 30 June 2014 (continued) 2. Property, plant and equipment

Vehicles

and machinery

Plant equipment

Furniture and office equipment

Roads

Pipelines

and reservoirs

Land and

buildings

Capital projects

in progress

Other assets

Total R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Book value 30 June 2012

18 061

37 668

8 466

1 575

422 873

59 171

79 697

-

627 510

Cost 24 540 77 624 12 971 2 253 915 011 83 175 79 697 1 289 1 196 561 Accumulated depreciation

(6 478)

(39 956)

(4 505)

(679)

(492 138)

(24 005)

-

(1 289)

(569 050)

Movement 2013 3 257 (311) 1 597 152 6 316 31 175 50 812 - 92 999 Additions and capital projects capitalised

5 989

2 453

3 182

206

36 234

34 093

44 315

-

126 472 Borrowing costs capitalised

-

-

-

-

-

-

6 497

-

6 497

Impairment/disposal - cost

(1 131)

-

(72)

-

-

-

-

-

(1 203)

Impairment/disposal - accumulated depreciation

476

-

49

-

-

-

-

-

525 Depreciation (2 077) (2 764) (1 562) (54) (29 918) (2 918) - - (39 292) Book value 30 June 2013

21 319

37 357

10 062

1 726

429 189

90 346

130 509

-

720 509


(8 079)

(42 720)

(6 018)

(733)

(522 056)

(26 923)

-

(1 289)

(607 817)

Movement 2014 5 359 1 122 1 341 (32) 4 225 55 589 (7 800) - 59 804 Additions and capital projects capitalised

8 642

4 339

3 341

23

38 512

60 833

(13 245)

-

102 445 Borrowing costs capitalised

-

-

-

-

-

-

5 445

-

5 445

Impairment/disposal - cost

(1 023)

(183)

(165)

-

-

-

-

-

(1 371)

Impairment/disposal - accumulated depreciation

226

183

85

-

-

-

-

-

494 Depreciation (2 486) (3 217) (1 920) (55) (34 287) (5 244) - - (47 209) Book value 30 June 2014

26 675

38 479

11 404

1 694

433 414

145 938

122 709

-

780 313


(10 339)

(45 754)

(7 853)

(788)

(556 343)

(32 167)

-

(1 289)

(654 533)


Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 2. Property, plant and equipment (continued) Borrowing costs on general borrowings are capitalised at an

average rate of 9,26% (2013: 8,47%) on qualifying assets. No specific borrowings existed at year end.

Amounts capitalised during the year (refer to note 13) 5 445 6 497 � All assets, except for finance lease assets, are owned assets.

� A register of all land and servitudes held by Bloem Water is available for inspection at the registered office of the entity.

� The cost price of fully depreciated assets amounts to R3 240 343 (2013: R2 045 698).

3. Inventories Inventory comprise of the following: Chemicals 5 260 2 433 Consumables 5 267 5 653 Water 1 590 1 338 12 117 9 424 The amount of inventories written-off to net realisable value

through expenditure is Rnil(2013: Rnil) which is recognised in chemical expenditure.


Notes to the financial statements for the year ended 30 June 2014 (continued)

2014 2013 R’000 R’000 4. Trade and other receivables Trade receivables 59 647 49 196 Total trade receivables 123 904 106 736 Less: Provision for impairment (64 257) (57 540) Personnel loans and advances (3) 22 Other project receivables 953 677 SA Revenue Services – VAT 10 986 - 71 583 49 895 Trade receivables exceeding payment terms are interest

bearing at the prime overdraft rate plus 200 basis points. Payment terms are generally 30 day from statement date. At year-end the prime overdraft rate was 9% (2013: 8,5%). Movements in the provision for impairment of receivables were as follows:

Individually and collectively impaired R’000 Balance at 30 June 2012 40 712 Amount utilised – bad debts written off - Provision raised during the year 16 828 Balance at 30 June 2013 57 540 Balance at 30 June 2013 57 540 Amount utilised – bad debts written off - Provision raised during the year 6 717 Balance at 30 June 2014 64 257


Notes to the financial statements for the year ended 30 June 2014 (continued) 4. Trade and other receivables (continued) Gross Impairment Gross Impairment 2014 2014 2013 2013 R’000 R’000 R’000 R’000

At 30 June 2014, the age analysis for trade receivables is as follows:

Not past due 62 077 2 534 50 229 1 386 Past due 30 to 60 days 4 181 4 077 2 757 2 475 Past due 60 to 90 days 2 503 2 503 2 598 2 528 Past due more than 90 days 55 143 55 143 51 152 51 151

Total 123 904 64 257 106 736 57 540 Based on historical default rates, the entity believes that no additional impairment allowances are necessary in respect of trade receivables. The past due amounts not impaired have been received subsequent to year-end.

2014 2013 R’000 R’000 5. Short term investments ABSA Bank 70 000 70 086 Nedbank 30 004 56 238 Investec 70 344 50 217 170 348 176 541

These investments are held on call deposit accounts, which are all fixed for 3 months or less. The investments are not actively traded and are carried at amortised cost. Interest on these accounts varies between 5% and 6% per annum (2013: between 5% and 6% per annum).

6. Cash and cash equivalents Current account – First National Bank 24 043 4 801 Call account – First National Bank 100 032 55 344 Money Market account – Standard Bank 34 968 33 188 Money Market account – First National Bank 122 105 Petty cash on hand 20 20 159 185 93 458

Interest on the current accounts varies between 0% and 5% per annum (2013: between 0% and 4,9% per annum), interest on the money market accounts varies between 5,19% and 5,7% per annum.


Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 7. Interest bearing loans and borrowings 7.1 Development Bank of South Africa Total amount outstanding 9 666 10 626 Less: Current portion of loan (1 233) (1 170)

8 433 9 456

The loan is unsecured and bears interest at a fixed rate of 8,91% per annum. Average capital repayments of R922 648 are made on a six monthly basis. The agreement came into effect on 31 March 2006 and will continue until 31 March 2021.

7.2 Development Bank of South Africa Total amount outstanding 64 380 86 046 Less: Current portion of loan (24 859) (23 234)

39 521 62 812

The loan is unsecured and bears interest at a fixed rate of 10% per annum. Average capital repayments of R14 510 734 are made on a six-monthly basis. The agreement came into effect on 1 October 2006 and will continue until 30 September 2016.

7.3 Nedbank Total amount outstanding 55 854 60 864 Less: Current portion of loan (5 485) (5 020)

50 369 55 844

The loan is unsecured and bears interest at a fixed rate of 9,12% per annum. Average capital repayments of R5 221 403 are made on a six-monthly basis. The agreement came into effect on 29 December 2006 and will continue until 29 December 2021.

7.4 Sanlam Total amount outstanding 40 697 46 648 Less: Current portion of loan (8 836) (8 274)

31 861 38 374

The loan is unsecured and bears interest at the 6 month JIBAR rate plus 1,45%. Interest varied between 6,8% and 7,78% (2013: 6,73% and 7,31%) per annum. The effective rate at 30 June 2014 was 7,78% (2013: 6,80%). Average capital repayments of R4 326 742 are made on a six-monthly basis. The agreement came into effect on 9 August 2008 and will continue until 8 August 2018.


Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 7. Interest bearing loans and borrowings 7.5 Nedbank Total amount outstanding 120 387 42 596 Less: Current portion of loan (29 200) (32 612) 91 187 9 984 The loan is unsecured and bears interest at a fixed rate of 9,8%

per annum. The loan facility amounts to approximately R270 million and has a draw down arrangement. An additional five drawdowns ranging between R24,1 million and R21,5 million will occur between 1 July 2014 and 1 November 2015. Average capital repayments of approximately R19,3 million are made on a six-monthly basis. The agreement came into effect on 1 March 2013 and will continue until 1 March 2023.

7.6 Corporate credit card Total amount outstanding (27) 76 Less: Current portion of loan 27 (76) Corporate Credit Card account - - The credit card account is unsecured and bears interest at the

prime interest rate. At year-end the prime overdraft rate amounted to 9% (2013: 8,50%) per annum.

7.7 Total loans and borrowings Total amount outstanding 290 957 246 858 Less: Current portion (payable within 12 months) (69 586) (70 388) Total long term interest bearing borrowings 221 371 176 470


Bloem Water Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 8. Trade and other payables

Trade payables 7 488 10 561 Other payables 45 473 65 106

Accruals 30 871 46 792 SA Revenue Services – Value Added Tax - 6 117 Cost recovery project 3 658 2 667 Leave accruals 10 944 9 530

52 961 75 667

Trade and other payables are non-interest bearing and are normally settled on 30-day terms.

9. Taxation

No provision is made for taxation since Bloem Water is exempt from tax in terms of section 10(1)(cA) of the Income Tax Act.

10. Revenue

Water sales 418 593 376 954 10.1 Other income

Other income comprises of income that does not arise in the course of ordinary activities of Bloem Water. These other income items, inter alia, include skills development grant, profit on disposal of assets, employee rent and cost recoupments, implementation agent fee, insurance proceeds, etc.

20 178

2 224

Other income 3 767 2 224 Implementation agent fee 16 411 -

11. Operating profit

The following amounts have been included in operating profit:

Depreciation 47 209 39 292

Internal and external auditors’ remuneration 1 323 1 343

Increase in provision for impairment of trade receivables and doubtful debts written off

15 213 16 828

Employee benefits relating to the pension fund assets and obligations

15 499

10 246

Actuarial losses 1 832 1 340 Interest cost on benefit obligation 13 114 9 995 Current service costs

Expected return on plan assets 10 634

(10 081) 6 938

(8 027) Board member emoluments (refer to note 17) 280 495 Key management emoluments (refer to note 17) 11 729 10 400


Bloem Water

Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 12. Finance income Investment income 12 570 10 188 Interest on trade receivables 6 401 4 018 Interest on cash and cash equivalents 5 065 2 500

24 036 16 706 13. Finance costs Interest on loans and borrowings 26 434 20 798 Borrowing costs capitalised (refer note 2) (5 445) (6 497) Other 19 2

21 008 14 303 14. Notes to the statement of cash flows 14.1 Cash flow from operating activities Operating profit before finance income and costs 62 607 60 720 Adjusted for: 83 627 72 288

Depreciation of property, plant and equipment 47 209 39 292 Increase in leave accrual 1 414 2 513 Increase in provision for impairment of trade receivables

and doubtful debts written off

15 213

16 828 Impairment of property, plant and equipment - - Loss on disposal of property, plant and equipment 665 584 Movement in defined benefit pension asset 19 126 13 071 Movement in working capital (93 928) 37 423

Increase in inventories (2 693) (1 305) (Increase)/decrease in trade and other receivables

Increase in infrastructure project receivables (36 901) (30 213)

9 085 -

(Decrease)/Increase in trade and other payables (24 121) 29 643

52 306 170 431 14.2 Cash and cash equivalents For the purposes of the statement of cash flows, cash and cash

equivalents comprise of cash and cash equivalents and short term investments.

Cash and cash equivalents 159 185 93 458 Short term investments 170 348 176 541 Corporate credit card 27 (76)

329 560 269 923


Bloem Water Notes to the financial statements for the year ended 30 June 2014 (continued) 15. Financial instruments General risk management principles

Risk management is of critical importance to the entity as it understands that changing market conditions make risk unavoidable. Over the years the entity has sought and implemented a comprehensive risk management process to consistently identify, understand and properly manage risk at all times. Risk policies, limits and control procedures are continuously monitored.

Credit risk

Potential concentrations of credit risk mainly consist of short term investments, cash and cash equivalents and trade and other receivables.

The Board of Bloem Water limits the credit risk arising from short term investments and other cash items by dealing only with reputable well-established financial institutions in South Africa. Credit control procedures are in place which includes assessing credit worthiness of potential or existing customers. The financial positions of customers are monitored on an ongoing basis. Provisions are made for impairment allowances where deemed appropriate.

At 30 June 2014, Bloem Water did not identify any significant concentration of credit risk which had not been insured or adequately provided for. The entity is exposed to significant credit risk exposure in terms of certain receivables due to the extensive period it takes to recover accounts receivable.

Concentration of credit risk of trade and other receivables

At year-end, the following concentrations of credit risk existed with reference to trade and other receivables:

2014 2013 R’000 R’000

Mangaung Local Municipality 56 655 45 829 Kopanong Local Municipality 63 114 41 582 Naledi Local Municipality 1 797 16 908 Other 2 338 2 417

123 904 106 736 The carrying amount of financial assets represents the

maximum credit exposure. The following accounts are exposed to credit risk at the reporting date:

Trade and other receivables 60 597 49 896 Short term investments 170 348 176 541 Cash and cash equivalents 159 185 93 458 Infrastructure project receivable 30 213 -

420 343 319 895

A maturity analysis of trade receivables are set out in note 4.


Notes to the financial statements for the year ended 30 June 2014 (continued) 15. Financial instruments (continued) Interest rate risk Interest rate risk arises from aspects of the entities namely, variable rate interest bearing loans

and short term investments. Interest rate fluctuation will directly impact on the results of the entity. The following table identifies those financial instruments that are sensitive to interest rate re-price:

Variable rate interest bearing borrowings Interest rate

per annum 2014

R’000 2013

R’000 Variable rate interest bearing borrowings 6,8% to 7,78% (40 697) (46 648) A change of 100 basis points in interest rates at the reporting date would have increased /

(decreased) profit by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2013.

Increase in interest rate Decrease in interest rate 2014 2013 2014 2013 R’000 R’000 R’000 R’000 Variable rate interest bearing borrowings (407) (466) 407 466 � Loans and borrowings to the value of R250 259 000 (2013: R204 262 000) are fixed

interest rate loans. Therefore a change in interest rate at the reporting date would not affect the profit or loss.

� Short term investments to the value of R170 348 000 (2013: R176 541 000) are fixed interest rate investments. Therefore a change in the interest rate at the reporting date would not affect the profit or loss.

Market risk Market risk is the risk that the value of a financial instrument will fluctuate with changing

market prices whether caused by factors specific to the instrument or to general external market changes. The entity has no financial instruments which are affected by changing market prices.

Liquidity risk Liquidity risk is the risk of the entity defaulting on its financial obligations as a result of

insufficient funding capacity in relation to such obligations. The entity manages this risk through maintaining adequate working capital, planning and continuing re-planning of long term project costs and funding requirements.


Notes to the financial statements for the year ended 30 June 2014 (continued) 15. Financial instruments (continued) Maturity profile of financial assets and liabilities Apart from the long-term loans and borrowings, all the entity’s financial assets and liabilities

are expected to mature within a twelve-month period. The undiscounted contractual cash flows of the long-term liabilities are set out below:

Within 12

months Between

1 to 5 years More than

5 years R’000 R’000 R’000 Nedbank 10 443 41 771 26 107 Nedbank 38 595 154 379 154 379 Development Bank of South Africa 1 845 7 381 3 691 Development Bank of South Africa 29 021 43 548 - Sanlam 10 571 37 003 - Total 90 475 284 082 184 177 The maturity of the contractual cash flows is the

future undiscounted value.

2014 2013 R’000 R’000 Capital management The primary objective of the entity’s capital management is

to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise stakeholder value.

Capital is monitored on the debt-to-adjusted-capital ratio. Total debt 431 637 322 525 Less: Cash and cash equivalents (329 533) (269 999) Net debt 102 104 52 526 Total equity 812 934 747 299 Less: Subordinated debt instruments - - Adjusted capital 812 934 747 299 Debt-to-adjusted-capital ratio 13% 7%


Notes to the financial statements for the year ended 30 June 2014 (continued) 15. Financial instruments (continued) Foreign currency

The entity is not exposed to foreign currency risk as no transactions in foreign currency are entered into.

Fair values

The carrying amounts of the financial assets and financial liabilities approximate their fair values.

Carrying amounts

Set out below are the carrying amounts of all the entity’s financial instruments that are carried in the financial statements:

2014 2013 R’000 R’000 Financial assets

Trade and other receivables 60 597 49 896 Cash and cash equivalents 159 185 93 458 Short term investments 170 348 176 541 Infrastructure project receivable 30 213 -

420 343 319 895

Financial liabilities

Interest bearing loans and borrowings – non-current 221 371 176 470 Trade and other payables 42 017 60 020 Current portion of interest bearing borrowings 69 585 70 388

332 973 306 878

16. Employee benefits

The entity provides retirement benefits for all its permanent employees through a funded defined benefit pension scheme that is subject to the Pension Funds Act, 1956 as amended.

The following tables summarise the components of net benefit expense recognised in the statement of comprehensive income and the funded status and amounts recognised in the statement of financial position for the respective plans:

Net benefit expense

Current service cost (10 634) (6 938) Interest cost on benefit obligation (13 114) (9 995) Expected return on plan assets 10 081 8 028 Net actuarial loss recognised in the year (1 832) (1 340)

(15 499) (10 245)


Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 16. Employee benefits (continued) Present value of the defined benefit obligation (164 556) (163 203) Fair value of plan assets 160 369 124 624 Surplus of plan obligations over plan assets (4 187) (38 579) Actuarial losses not recognised 24 999 58 576 Defined benefit asset 20 812 19 997 The principal actuarial assumptions used were: % %

Discount rate 9,67 8,04 Salary increase rate 8,15 6,81 Expected rate of return on assets 9,67 8,04 Inflation 7,15 5,81 Post-retirement discount rate 2,35 2,10 2014 2013 R’000 R’000 The assets of the fund as at the valuation date were invested

as follows:

Prudential Inflation Plus 45 032 38 348 Coronation Managed 60 958 53 610 Sanlam Absolute Return 44 085 35 924 Cash at bank 3 325 2 455 Sundry debtors 9 506 - Sundry creditors (2 537) (5 713) Total assets 160 369 124 624 Limits of the corridor:

Unrecognised actuarial gains at 1 July 58 576 41 787 Limits of the corridor (16 456) (16 320) Excess loss 8 544 42 256 Average remaining lifetime 25 23 Actuarial loss to be recognised (345) (1 832)


Notes to the financial statements for the year ended 30 June 2014 (continued)

2014 2013 R’000 R’000 16. Employee benefits (continued)

Benefit liability

Present value of the defined benefit obligation at 1 July 163 203 123 744

Interest cost 13 114 9 995 Current service cost 10 634 6 938 Employee cost 3 626 2 826 Benefits paid (18 271) (11 260) Risk premiums - - Actuarial loss not recognised (7 750) 30 960

Defined benefit liability 164 556 163 203

Benefit asset

Fair value of the asset at 1 July 124 624 95 025

Expected return on assets 10 081 8 028 Contributions 19 941 20 000 Benefits paid (18 271) (11 260) Actuarial gains / (losses) not recognised 23 994 12 831

Present value of the asset 160 369 124 624 Sensitivity analysis

Assumed pension fund cost trends rates have a significant effect on the amounts recognised in profit or loss. A one percentage point change in assumed pension fund cost trends rates would have the following effects:

1% Increase

Core assumption

1% Decrease

R’000 R’000 R’000

Effect on service cost 106 10 634 (106) Effect on interest cost 131 13 114 (131) Effect on defined benefit obligation 1 646 164 556 (1 646) 2014 2013 2012 2011 2010 R’000 R’000 R’000 R’000 R’000 Present value of defined benefit

obligation

(164 556)

(163 203)

(123 744)

(113 313)

(97 163) Fair value of plan asset 160 369 124 624 95 025 83 098 72 808

(4 187) (38 579) (28 719) (30 215) (24 355) There have been no experience adjustments made.


Notes to the financial statements for the year ended 30 June 2014 (continued) 17. Directors and key management emoluments The Board is responsible for, and undertook the following during the year ended 30 June 2014:

- Adoption of strategic plan and monitoring of operation performance and management; - Determination of policy and processes to ensure the integrity of the entity’s risk

management; and internal controls; communication policy and director selection; orientation and evaluation.

Non-executive directors with their remuneration for the financial year are as follows: 2014

Board member Board

activity fees Expense

allowance Total

remuneration R R R Mr TB Phitsane 45 064 1 716 46 780 Mr LR Bomela 36 315 1 622 37 937 Ms MSS Maboe Phike 38 043 1 735 39 778 Mr N Mokhesi 33 155 5 586 38 741 Mr DJC Sides 40 467 1 287 41 754 Dr J van der Merwe 59 022 16 593 75 615 252 066 28 539 280 605 2013

Board member Board

activity fees Expense

allowance Total

remuneration R R R Mr TB Phitsane 120 146 1 592 121 738 Mr LR Bomela 23 220 941 24 161 Ms MSS Maboe Phike 58 671 1 007 59 678 Dr L Moorosi 55 035 2 776 57 811 Mr N Mokhesi 41 668 5 349 47 017 Mr DJC Sides 53 382 1 755 55 137 Dr J van der Merwe 103 134 26 563 129 697 455 256 39 983 495 239


Notes to the financial statements for the year ended 30 June 2014 (continued) 17. Directors and key management emoluments (continued) Key management personnel with their remuneration for the financial year are as follows:

2014 Key management

Short term employee

benefits

Other long term

benefits

Incentive

bonus

Total

remuneration R R R R Dr L Moorosi 1 504 026 181 176 106 121 1 791 323 Mr OJ Stadler 1 124 641 193 800 374 501 1 692 942 Mr MD Kgwale 1 234 135 121 256 383 606 1 738 997 Mr E Gaoseb 1 001 127 202 152 267 879 1 471 158 Ms FKP Ntlemeza 1 190 803 164 588 383 606 1 738 997 Ms SL Meyer 1 195 546 92 707 359 317 1 647 570 Ms TP Kgantsi 1 071 556 216 696 360 639 1 648 891 8 321 834 1 172 375 2 235 669 11 729 878

2013 Key management

Short term employee

benefits

Other long term

benefits

Incentive

bonus

Total

remuneration R R R R Dr B Malakoane 1 120 111 17 215 361 179 1 498 505 Dr L Moorosi 288 437 20 094 - 308 531 Mr OJ Stadler 1 046 573 197 283 307 770 1 551 626 Mr MD Kgwale 1 165 933 102 886 49 384 1 318 203 Mr E Gaoseb 941 028 187 346 222 112 1 350 486 Ms FKP Ntlemeza 1 129 665 143 483 74 076 1 347 224 Ms SL Meyer 1 154 244 70 834 296 303 1 521 381 Ms TP Kgantsi 1 006 187 202 010 296 303 1 504 500 7 852 178 941 151 1 607 127 10 400 456

Board meetings Key management personnel are encouraged to attend board meetings. 7 Board meetings were

held and attended as follows:

2014 Board member

Board meetings attended

Board activities / committee

meetings Mr RL Bomela 5 8 Mr TB Phitsane 7 3 Ms MSS Maboe Phike 6 8 Mr N Mokhesi 6 7 Mr DJC Sides - 12 Dr J van der Merwe 6 12


Notes to the financial statements for the year ended 30 June 2014 (continued) 17. Directors and key management emoluments (continued)

2013 Board member

Board meetings attended

Board activities / committee

meetings Mr RL Bomela 2 7 Mr TB Phitsane 5 8 Ms MSS Maboe Phike 4 8 Dr L Moorosi 5 8 Mr N Mokhesi 5 8 Mr DJC Sides 0 14 Dr J van der Merwe 5 18 17.1 Number of employees According to the payroll system the entity had 327 (2013: 276) permanent employees as at 30

June 2014. 18. Commitments and contingencies 2014 2013 R’000 R’000 Commitments

Estimated capital expenditure 243 252 267 707 Approved and contracted 25 400 94 014 Approved not yet contracted 217 852 173 693 The expenditure is expected to be incurred as follows: 243 252 267 707 Within one year 190 452 201 407 Between one and five years 52 800 66 300 Capital commitments, excluding interest capitalised, include all

projects for which specific Board approval has been obtained up to the reporting date. Projects still under investigation for which specific Board approval has not yet been obtained are excluded.

The expenditure will be financed through general external borrowings, available cash resources and internally generated funds.

Guarantees

Guarantees amounting to R20 000 (2013: R20 000) was issued by First National Bank on behalf of Bloem Water. The guarantee will lapse in 2025. The beneficiary of these guarantees is Eskom.

Guarantees amounting to R80 000 (2013: R80 000) was issued by First National Bank on behalf of Bloem Water. The guarantees will lapse in 2025. The beneficiary of these guarantees is Centlec.


Notes to the financial statements for the year ended 30 June 2014 (continued) 19. Related parties

Bloem Water purchases raw water from the Department of Water and Sanitation (“the Department”). All entities and directorates of the Department are seen as related parties to Bloem Water. Water sales are made to Municipalities in the Free State Province.

The Board members and key management, as identified in note 17, are considered related parties.

The following table provides the total amount of transactions, which have been entered into with related parties for the related financial year:

2014 2013 R’000 R’000 Statement of comprehensive income

Transactions with the Department of Water and Sanitation

Water abstraction cost 19 319 20 956 Water research cost

Catchment management cost 3 872

398 4 440

387

Transactions with other related parties

Electricity cost - Eskom and Centlec 75 443 65 742 Water sales to Municipalities 407 368 365 835

Board members’ and key management emoluments are set out in note 17.

Implementation fee received on infrastructure project with Human Settlements

16 411

-

Statement of financial position

Amounts owed to The Department of Water and Sanitation 17 273 16 474

Amounts owed by Municipalities (refer note 15) 121 566 104 552

Deferred income recognised on Department of Water and Sanitation Grant

87 719

-

Infrastructure project receivable from Department of Human Settlements

30 213

-

20. Operating leases

The entity rents printing equipment under long term non-cancellable operating leases since January 2013.

Minimum future lease payments

Within one year 707 707 Two to five years 1 767 2 474 More than five years - -

2 474 3 181


Notes to the financial statements for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 21. Deferred income

Department of Water and Sanitation 87 719 -

This relates to a grant advanced to Bloem Water by the Department of Water and Sanitation to construct a pipeline between the Rustfontein Treatment Plant and Botshabelo and construction of Tabali – OK pipeline.

22. Infrastructure project receivable

Department of Human Settlements

Funds received from the Department of Human Settlements (Excluding VAT)

(213 868)

-

Funds utilised in respect of the project (Excluding VAT) 227 670 - Implementation agent fee 16 411 -

Funds advanced by Bloem Water in respect of the project 30 213 -

Bloem Water has been appointed as an implementing agent by the Department of Human Settlements for the construction of public toilets and the eradication of the bucket system in the Free State.

Bloem Water is entitled to receive an implementation agent fee amounting to 10% of the construction fee incurred. At year-end, the agent fee amounted to R16,4 million. The agent fee income is included in other income on the statement of comprehensive income.

In terms of the implementation agent agreement, the following funds have been committed.

Funds committed

Initial funds committed by Department of Human Settlements

925 000

-

Funds already received (Including VAT) 243 810 - Funds still to be paid over to Bloem Water (Including VAT) 681 190 -

Funds to be committed as follows: 925 000 -

Funds utilised in respect of the project (Including VAT) 259 544 - Implementing agent fee being 10% of construction cost

Funds still to be utilised in respect of project 16 411

649 045 -

-

Subsequent to year-end, Bloem Water committed and incurred an amount of R61 million on the project. These funds have not yet been refunded to Bloem Water by the Department of Human Settlements.


Notes to the financial statements for the year ended 30 June 2014 (continued) 23. Events after the balance sheet date There were no significant events that have occurred between the reporting date and the date

of signing the financial statements. 24. Fruitless and wasteful expenditure During the period under review no fruitless and wasteful expenditure have been identified. 25. Going concern The financial statements have been prepared on the basis of accounting policies applicable to

a going concern. 26. Contingent liabilities Bloem Water is involved in a number of pending labour arbitration matters. No liability has

been recognised in the financial statements because management is of the view that the existence of the possible obligations will only be confirmed by the occurrence or non-occurrence of uncertain future events not within the control of Bloem Water. The possible financial impact of these matter is estimated at approximately R6,5 million.


Detailed statement of comprehensive income for the year ended 30 June 2014 2014 2013 R’000 R’000 Revenue 418 593 376 954

Bulk water sales 418 593 376 954 Agreements - - Water purchased (23 337) (26 099) Water opening stock 1 338 1 653 Water closing stock (1 590) (1 338) Water resource expenditure 23 589 25 784 Gross income

395 256

350 855

Other operating income 20 178 2 224 Service agreement 1 280 528 Implementation agent fee 16 411 - Other income 2 845 1 974 Rental income 307 306 Profit on sale of assets (665) (584) Expenses Impairment of trade receivables (15 213) (16 828) Chemicals (14 826) (13 828) Depreciation (47 209) (39 292) Distribution costs (14 630) (11 702) Fuel costs (5 392) (4 392) Vehicle and transport costs (9 238) (7 310) Electricity (75 443) (65 742) Repairs and maintenance (12 437) (9 204) Staff costs (116 553) (97 676)

Leave accrual (1 414) (2 513) Medical expenses (4 674) (3 577) Salaries and wages (104 922) (90 001) Training and development (1 074) (1 026) Defined benefit expenses (4 469) (559)

Schedule not covered by audit opinion


Detailed statement of comprehensive income for the year ended 30 June 2014 (continued) 2014 2013 R’000 R’000 Other operating expenses (56 516) (38 087) Advertising 713 952 Audit fees 1 323 1 343 Bank charges 105 82 Bursaries and donations 126 54 Cleaning costs 204 42 Computer and IT expenditure 4 615 3 713 Conference seminars and workshops costs 1 480 1 408 Consulting costs 4 037 1 849 Contractors 279 297 Courier and postage 9 7 General and administration expenses 2 072 4 356 Impairment – property, plant and equipment - - Insurance 1 833 884 Legal and contract costs 2 505 2 734 Marketing costs 1 127 1 873 Printing and stationary 1 548 1 634 Programmes and initiatives 9 764 8 709 Protective clothing and uniforms 703 873 Relocation costs 99 63 Rent paid – heavy duty equipment 6 7 Safety and security 4 423 1 692 Infrastructure project – consultation expenses 14 434 - Service contracts 153 91 Subscriptions licenses and membership fees 315 267 Telephone and fax 1 158 987 Tools and equipment 729 397 Travelling and entertainment 2 756 3 775 Operating profit 62 607 60 720 Finance income 24 036 16 706 Finance expenses (21 008) (14 303) Interest on bank loans and overdrafts (20 989) (14 301) Finance charges payable under finance leases - - Other finance costs (19) (2) Profit for the year 65 635 63 123 Total comprehensive income for the year 65 635 63 123

Schedule not covered by audit opinion

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rate

and

mai

ntai

n in

fras

truc

ture

3.Re

liabi

liy o

f Su

pply

No

unpl

anne

d in

terr

uptio

ns to

su

pply

exc

eedi

ng 2

4 ho

urs

Num

ber o

f day

s su

pply

disr

upte

d di

vide

d by

tota

l nu

mbe

r of p

ossib

le

supp

ly d

ays

%

2%

0% in

terr

uptio

ns

Aver

age

Rese

rvoi

r Le

vels

: M

odde

r Riv

er R

egio

n Ta

bali

=66.

66%

Le

saka

=88

.83%

O

K=61

.23%

Bl

ydsk

ap=7

3.31

%

Mot

latla

=84.

79%

Av

erag

e Re

serv

oirs

Lev

els:

O

rang

e Ri

ver R

egio

n 2M

l = 7

4.66

%

Beth

ulie

TLC

= 8

5.00

%

Sprin

gfon

tein

= 6

8.00

%

Trom

psbu

rg =

29.

90%

Ga

riep

= 72

.13%

Av

erag

e Re

serv

oir L

evel

s:

Cale

don

Rive

r Reg

ion

Ba

l = 8

5.79

%

Deho

ek =

93.

28%

De

wet

sdor

p =

94.5

5%

Uitk

yk =

87.

91%

Re

dder

sbur

g =

70.8

2%

Eden

burg

= 6

1.59

%

Bran

dkop

= 8

6.79

%

√

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

4 Fi

nanc

ial

Repo

rtin

g co

mpl

ianc

e

Unq

ualif

ied

audi

t re

port

An

nual

Ext

erna

l Au

dit

Qua

lifie

d/

unqu

alifi

ed re

port

U

nqua

lifie

d U

nqua

lifie

d √

Tran

sfor

mat

ion/

busi

ness

pr

oces

s/re

sear

ch a

nd

deve

lopm

ent

5. S

taff

Turn

over

O

ptim

al st

aff

rete

ntio

n %

staf

f lea

ving

%

4%

7%

X

1

Bloe

m W

ater

Ann

ual R

epor

t 201

3/14

P

age

135

DRIV

ERS

PERF

ORM

ANCE

O

BJEC

TIVE

O

UTC

OM

ES/

IMPA

CT

INDI

CATO

RS

MEA

SURE

TA

RGET

AC

TUAL

TA

RGET

M

ET(√

)/N

OT

MET

(X)

Tran

sfor

mat

ion/

busi

ness

pr

oces

s/re

sear

ch a

nd

deve

lopm

ent

6. B

oard

mem

ber

mee

ting

atte

ndan

ce

Impr

oved

Gov

erna

nce

Actu

al a

tten

danc

e

%

95%

85

.19%

X

2

Deve

lop,

ope

rate

and

m

aint

ain

infr

astr

uctu

re to

en

sure

sust

aina

ble

wat

er

serv

ice

deliv

ery

7. E

ffect

ive

inte

rnal

co

ntro

ls an

d ris

k m

anag

emen

t

Inte

rnal

Aud

it fin

ding

s de

alt w

ith

Inte

rnal

Aud

it re

port

s #

repe

at

0

5 X3

# un

reso

lved

0

5

Ensu

ring

sust

aina

ble

and

equi

tabl

e w

ater

reso

urce

m

anag

emen

t

8. B

ulk

supp

ly

agre

emen

ts

conc

lude

d w

ith

Mun

icip

aliti

es/o

ther

cu

stom

ers

Stat

utor

y an

d Se

rvic

e le

vel a

gree

men

ts in

pl

ace

Mun

icip

aliti

es/o

ther

cu

stom

ers w

ith b

ulk

supp

ly a

gree

men

ts

%

100%

50

%

X4

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

9. Im

prov

e Fi

nanc

ial

ratio

s Im

prov

ed v

iabi

lity

and

sust

aina

bilit

y

Fina

ncia

l Rat

io’s

Re

fer A

nnex

ure

A

Re

fer A

nnex

ure

A √

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

Tr

ansf

orm

atio

n

10. I

ncre

ased

BBB

EE

Spen

d %

of s

pend

incr

ease

d an

d in

crea

sed

new

en

tran

ts

Qua

rter

ly re

port

s %

incr

ease

12%

679%

√

# ne

w e

ntra

nts

30

130

√

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

11. M

anag

e co

st

with

in th

e ap

prov

ed

budg

et

No

over

ex

pend

iture

/loss

es

Fina

ncia

l rep

orts

%

var

ianc

e 10

%

6%

√

Build

, Ope

rate

and

mai

ntai

n in

fras

truc

ture

En

gagi

ng in

Str

ateg

ic

Part

ners

hips

12. C

apita

l Ex

pend

iture

In

fras

truc

ture

av

aila

ble

to m

eet

dem

ands

Ove

rall

proj

ect

expe

nditu

re w

ithin

R

targ

et

% v

aria

nce

25

%

12

%

√

Ove

rall

proj

ect

com

plet

ion

date

s w

ithin

targ

ets

% v

aria

nce

25%

36

%

X5

Bloe

m W

ater

Ann

ual R

epor

t 201

3/14

P

age

136

DRIV

ERS

PERF

ORM

ANCE

O

BJEC

TIVE

O

UTC

OM

ES/

IMPA

CT

INDI

CATO

RS

MEA

SURE

TA

RGET

AC

TUAL

TA

RGET

M

ET(√

)/N

OT

MET

(X)

Build

, ope

rate

and

mai

ntai

n in

fras

truc

ture

En

gagi

ng in

Str

ateg

ic

Part

ners

hips

13. I

ncre

ased

acc

ess

to se

rvic

es

Cont

ribut

ion

to

natio

nal o

bjec

tives

CA

PEX

spen

d /

proj

ects

CA

PEX

spen

d or

nu

mbe

r of

expa

nsio

n pr

ojec

ts

80%

71

%

X6

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

14. E

ngag

emen

t in

Seco

ndar

y ac

tiviti

es

Exte

nd o

f in

volv

emen

t %

of t

otal

turn

over

%

of t

otal

tu

rnov

er

N/A

N

/A

N/A

Enga

ge in

Str

ateg

ic

Part

ners

hips

15

. Ach

ieve

St

atut

ory

Repo

rtin

g Co

mpl

ianc

e

Repo

rtin

g co

mpl

ianc

e ac

hiev

ed

Stat

utor

y su

bmiss

ions

mad

e on

tim

e

Subm

issio

n da

tes

met

/miss

ed

100%

10

0%

√

Build

, ope

rate

and

mai

ntai

n in

fras

truc

ture

16. J

obs C

reat

ed

Perm

anen

t and

co

ntra

ct (d

irect

)

Tota

l num

ber

N

umbe

r

35

74

√

Tem

pora

ry (i

ndire

ct)

Tota

l num

ber

Num

ber

50

62

√

Enga

ge in

Str

ateg

ic

Part

ners

hips

17

. Cor

pora

te S

ocia

l Re

spon

sibili

ty

Good

cor

pora

te

citiz

ensh

ip

Num

ber o

f in

itiat

ives

N

umbe

r and

R

valu

e 3

R3.5

mill

ion

25

R5 0

29 0

23

√7

Tran

sfor

mat

ion

18. T

rain

ing

and

skill

s dev

elop

men

t Sk

ills a

nd c

apac

ity

build

ing

Trai

ning

Cou

rses

# of

cou

rses

40

46

√8

Lear

ners

hips

# of

Lea

rner

ship

s 18

22

√

Burs

arie

s To

tal n

umbe

r 5

5 √

Man

agin

g fin

anci

al a

ffai

rs to

m

eet c

urre

nt a

nd fu

ture

ob

ligat

ions

19. G

ood

Gove

rnan

ce

Impr

oved

con

trol

s an

d ris

k m

itiga

tion

m

eetin

gs

Brea

ches

of

mat

eria

lity

and

signi

fican

ce

fram

ewor

k

Num

ber

0 0

√


Brief description of targets, including reasons for the non-achievement of the target performance objectives:

1. Staff turnover of 7% is due to 10 retirements, 3 deaths, 1 disability and 9 resignations. 23 Terminations of a total staff complement of 327. The higher than usual retirement rate increased the staff turnover rate for the period under review.

2. Good Governance practices are promoted by the Board of Bloem Water. The actual attendance of 85.19% is higher than reported in the previous period and even though the target of 100% was not achieved, the Board continued to facilitate good oversight.

3. Repeat and unresolved audit findings relate to asset management processes, debtors processes, supply chain management and IT policies which are due to be fully addressed over a multi-year timeframe. The matters are duly pursued by management on an on-going basis.

4. Service Level Agreements for Kopanong Local Municipality and Mantsopa Local Municipality are in place. There is on-going engagement with Naledi Local Municipality and Mangaung Metro to revise old contracts.

5. Project completion dates were affected by reprioritization of projects. The Board maintains due oversight over the progress and a Board committee was accordingly established to support the project management office.

6. The expenditure has been affected by reprioritization of Multi-year projects. Bloem Water was extensively involved in bucket eradication projects as implementing agent of the Department of Water and Sanitation.

7. A number of community initiatives were undertaken in response to Bloem Water’s corporate social responsibility. These projects include school hygiene and sanitation projects across the Free State.

8. Skills and capacity building programs were well managed during the year and the targets were achieved on learnerships, bursaries and number of courses presented across all disciplines in Bloem Water.

Bloe

m W

ater

Ann

ual R

epor

t 201

3/14

P

age

138

ANN

EXU

RE A

RATIO

’S 2

013/

14

RATI

O

TARG

ET

ACTU

AL

TARG

ET M

ET/

NO

T M

ET

NO

TE

Liqu

idity

(cur

rent

ra

tio)

1.25

3.

62

√ Ca

sh a

nd c

ash

equi

vale

nts i

ncre

ased

from

net

cas

h in

flow

from

ope

ratin

g an

d fin

anci

ng

activ

ities

, exc

eedi

ng o

utflo

w fr

om in

vest

ing

activ

ities

.

Gro

ss p

rofit

m

argi

n %

(PA)

93

%

94.4

2%

√ Th

e ne

t effe

ct c

an b

e co

ntrib

uted

to sa

le v

olum

e in

crea

se, r

educ

tion

in w

ater

loss

es a

nd

low

er th

an a

ntic

ipat

ed ta

riff i

ncre

ases

by

the

Depa

rtm

ent o

f Wat

er a

nd S

anita

tion.

Net

pro

fit m

argi

n %

(P

A)

0%

15.6

8%

√ Th

e po

sitiv

e ef

fect

is d

ue to

hig

her s

ale

volu

mes

, str

uctu

ring

of lo

an, i

mpr

oved

raw

wat

er

qual

ity, l

ower

exp

endi

ture

on

oper

atio

ns a

nd m

aint

enan

ce a

nd c

ost c

ontr

ol e

ffici

enci

es.

Debt

/equ

ity ra

tio

0.66

0.

53

√ Th

e in

crea

se in

sale

s vol

umes

and

inco

me

impr

oved

the

prof

it po

sitio

n. L

oan

fund

ing

alig

ned

to re

prio

ritise

d pl

an w

hich

is d

iffer

ent t

han

the

antic

ipat

ed p

lan.

Retu

rn o

n as

sets

%

0.03

%

5.03

%

√ Th

e sa

les v

olum

es a

nd in

com

e in

crea

sed

and

expe

nditu

re lo

wer

than

ant

icip

ated

, whi

ch

resu

lted

in h

ighe

r inc

ome.

CAP

EX fu

nds a

re c

omm

itted

for r

efur

bish

men

t/ex

tens

ion

of

exist

ing

infra

stru

ctur

e an

d w

ill b

e pa

id in

acc

orda

nce

with

the

proj

ect c

ash

flow

s.

Debt

ors d

ays

57.1

2 52

.01

√ Lo

wer

ove

rdue

acc

ount

s by

Kopa

nong

and

Nal

edi L

ocal

Mun

icip

aliti

es. M

anga

ung

Met

ro

Mun

icip

ality

acc

ount

was

cur

rent

at f

inan

cial

yea

r end

.

Bloe

m W

ater

Ann

ual R

epor

t 201

3/14

P

age

139

ANN

EXU

RE B

AC

HIEV

E ST

ATU

TORY

REP

ORT

ING

CO

MPL

IAN

CE

STAT

UTO

RY R

EQU

IREM

ENT

DUE

DATE

TA

RGET

MET

/NO

T M

ET

Annu

al re

port

30

Nov

embe

r 201

3 √

Qua

rter

ly re

port

s

� Q

uart

er 1

� Q

uart

er 2

� Q

uart

er 3

� Q

uart

er 4

15/1

1

15/0

2

15/0

5

15/0

8

√

Busi

ness

Pla

n

31 M

ay 2

014

√

Shar

ehol

ders

Com

pact

31

May

201

4 √

Tarif

fs: M

inist

eria

l App

rova

l 25

Janu

ary

2014

√

Trea

sury

: Con

solid

ated

Fin

anci

al S

tate

men

ts

30 S

epte

mbe

r 201

4 √

Wor

kpla

ce S

kills

Pla

n

30 Ju

ne 2

014

√

Empl

oym

ent E

quity

Pla

n

15 Ja

nuar

y 20

14

√

Tax

retu

rns

� PA

YE

� VA

T

� U

IF

� IR

P 5’

s

Mon

thly

Mon

thly

Mon

thly

May

201

4

√

Com

pens

atio

n Co

mm

issi

oner

: Ret

urn

of e

arni

ngs

31

Mar

ch 2

014

√

Pens

ion

Fund

pay

men

ts

With

in 7

day

s of m

onth

-end

√

ANN

EXU

RE C

Bloe

m W

ater

Ann

ual R

epor

t 201

3/14

P

age

140

RELI

ABIL

ITY

OF

SUPP

LY

Rese

rvoi

r Av

erag

e le

vel

for t

he y

ear

Min

imum

le

vel f

or th

e ye

ar

Max

imum

leve

l fo

r the

yea

r

Taba

le

66.6

6%

53.6

3%

98.2

6%

Lesa

ka

88.8

3%

63.3

8%

99.8

8%

OK

61.2

3%

34.3

8%

90.3

5%

Blyd

skap

73

.31%

60

.19%

93

.57%

Mot

latla

84

.79%

56

.19%

97

.96%

Beth

ulie

2M

l 74

.66%

41

.60%

99

.98%

Beth

ulie

TLC

85

.00%

61

.24%

99

.98%

Sprin

gfon

tein

68

.00%

18

.66%

10

0.00

%

Trom

psbu

rg

29.9

0%

14.9

9%

100.

00%

Garie

p 72

.13%

45

.43%

99

.98%

Wel

beda

cht C

lear

Wat

er B

al

85.7

9%

46.7

6%

100.

00%

Deho

ek

93.2

8%

56.8

4%

100.

00%

Dew

etsd

orp

94.5

5%

45.9

7%

96.1

0%

Uitk

yk

87.9

1%

54.3

1%

99.8

7%

Redd

ersb

urg

70.8

2%

37.9

8%

92.6

4%

Eden

burg

61

.59%

33

.77%

93

.49%

Bran

dkop

86

.79%

32

.41%

10

0.00

%

TABLE OF CONTENTS - National Government · 2015-04-13 · WTW Water Treatment Works PCP...

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