VISION We aspire to be a leader in utility services

MISSION To provide sustainable water and wastewater management services in a cost effective and environmentally friendly manner to the economy.

VALUES Botho Batho Pele Therisanyo Botswerere/Quality Kgetsi ya Tsie /People First /Consultation /Team Work We display a strong We understand and We value open and We provide a high We believe in work ethic and respect exceed expectations free exchange of views quality of products working together to for people by putting the and ideas and service delivery to accomplish more customers first our customers

1 water utilities corporation annual report 2013/14

2013/14 THEME WATER & ENERGY: “Understanding the impact of water and energy on humankind”

60% of Botswana’s population is supplied from ground water 13 potable water treatment plants nationwide, 365KM 2Ml - 92Ml NSCI Water capacity Transfer Scheme

2 dams with a combined capacity of 7416 MCM

2 wastewater treatment plants & several ponds 0VER 330 000 WATER CONNECTIONS NATIONWIDE

3 water utilities corporation annual report 2013/14

Table of contents

Performance Highlights 01

Five Year Performance at a Glance 03

Corporate Profile, Governance 06 Structure & Strategy

Board Chairman Statement 08

Board of Directors 12

Corporate Governance 14

Chief Executive Officer Statement 18

Corporate Management Team 21

Water Sector Reforms Programme 24

Operational Highlights 28

Corporate Social Responsibility 30 and Stakeholder Management

Annual Financial Statements 34

Acronyms 64

4 WaterShare every drop and is save life. the future.

If we all play our part as individuals, our efforts can go a long way and lighten the burden associated with water shortages. Play your part consistently and make water conservation a way of life.

5 water utilities corporation annual report 2013/14

Operational Highlights

in 2014 compared to a NET LOSS P346.6 net loss of P191.1 million million in 2013 FEES FOR NEW POTABLE WATER TOTAL WATER SALES CONNECTIONS REVENUE REVENUE P20.0 P948.1 P915.0 million million million IN 2014 TRANSLATING TO A in 2014, a 19.9% increase IN 2014, AN 18.8% INCREASE 36.5% INCREASE FROM P14.7 from P790.8 million in FROM P770.5 MILLION IN MILLION IN 2013. 2013 2013.

RETURN ON WATER DSC EQUITY QUANTITY COVENANT (4.87) (7%) 5.8% times DETERIORATION IN 2014 DEsecrea IN WATER SALES compared to (1.77) times FROM (4%) IN 2013 QUANTITY FROM 75 600CTM in 2013. IN 2013 TO 71 200CTM IN 2014

6 Five Year Performance at a Glance

2013/14 2012/13 2011/12 2010/11 2009/10 restated restated P’000 P’000 P’000 P’000 P’000

Income, cash flow & value added statements Water sales 914,994 770,471 571,296 571,904 560,337 Total revenue 948,061 790,778 579,685 578,543 561,107 Operating expenses 1,076,400 957,200 947,035 495,494 319,526 Depreciation and amortisation 224,276 184,790 186,558 119,058 86,903 Net Finance charges 33,703 28,111 13,731 14,457 14,682 Net (loss) / surplus (346,559 ) (191,062 ) (541,595 ) 21,809 161,414 Net cash (outflow) / inflow (254,840 ) (302,249 ) (102,647 ) 52,502 154,403

Financial Position Operating assets 5,040,805 4,620,261 4,444,660 3,544,677 2,620,435 Development Expenditure 771,775 625,866 538,249 110,234 115,304 Government equity 4,975,050 4,374,297 4,089,391 2,364,477 1,410,577 Interest subsidy reserve 12,493 10,984 9,213 7,421 - Reserves 448,146 796,214 989,047 1,532,434 1,518,046 Long term borrowings 480,494 515,036 549,212 577,720 599,721 Retirement benefit asset / (obligation) (1,351) (21,611 ) (3, 920 ) 33,045 28,925

Water sales quantities (TCM) 71,200 75 600 66,000 61,672 58,455

Ratios Return on equity -7 % -4 % -16 % 1 % 11 % Return on capital employed -6% -4% -12% 1% 6% Return on net operating assets -7% -4 % -14% 1% 6% Debt service cover (times) -4.87 -1.77 -10.66 0.83 4.14 Debt/Equity Ratio 0.10 0.12 0.18 0.24 0.43

Statistics Annual Inflation (%) (Attribute) 4.40 % 7.30 % 7.20 % 8.50 % 6 % Prime lending rate (attribute) 9 % 11 % 9.50 % 11 % 11.50 %

7 water utilities corporation annual report 2013/14

Corporate Profile

330 000 c ONNECTIONS from 80 000 in 2009 Gaborone Dam

This involved planning, constructing, Following the commencement of the P5.0 billion operating, treating, maintaining and implementation of the Water Sector WORTH OF property, plant and distributing water resources in the Reforms Project, the Corporation’s equipment country’s urban centres and other customer base has grown significantly areas mandated by the Minister from 80 000 at the beginning of the responsible for water, as well as the reforms in 2009 to just over 330 000 supply of bulk water to the Department at 31st March 2014. The Corporation The Water Utilities Corporation of Water Affairs and the various Local presently supplies over 76 million cubic (WUC) is a parastatal organisation, Authorities for distribution to villages metres of potable water annually to its wholly owned by the Botswana and other smaller settlements in the total customer base. country. Government. It was established With a property, plant and equipment in 1970 by an Act of Parliament In the forty four years since its inception, value of over P5.0 billion, the (Laws of Botswana Cap 74:02) the Corporation’s mandate has expanded Corporation’s infrastructure includes to supplying potable water to all urban nine dams, the Gaborone, Nnywane, with a mandate to manage a centres and villages in the country, as Bokaa, Shashe, Letsibogo, Ntimbale, single project for the supply and well as managing wastewater under Dikgatlhong, Thune, Lotsane as well as distribution of water in what the Water Sector Reforms Programme the North South Carrier Scheme which (WSRP). The programme resulted from comprises a 365km long pipeline, water was then called the Shashe a study to rationalise the water sector treatment plants and associated pump Development Area. in Botswana and ensure uniform service stations. levels for all. The implementation of the Water Sector Reforms Project effected in May 2009 and was scheduled for completion in 2014.

8 Governance Structure & Strategy

BOARD

Chief Executive Officer

Corporation Internal Audit Secretary Director

DCE DCE Technical & (Operations) & Support Services Water Resources

Human Technical Regional Regional Resources & Finance Services Operations Operations Infrastructure Administration Director Director Director (S) Director (N) Director Director

In keeping with its vision “We aspire to be a leader in utility services” the Water Utilities Corporation needs to be able to satisfy an increasingly discerning customer and ensure compliance with internationally accepted corporate governance practices. To this end the Water Utilities Corporation identified key strategic objectives to guide its activities, business focus and the allocation of resources for its planning period 2012-2015. These are:

9 water utilities corporation annual report 2013/14

Governance Structure & Strategy [continued]

Strategic Intent: Achieve financial sustainability 1 Strategic themes: • To reduce debt • To identify new product lines to increase revenue • To have a tariff structure that reflects WUC’s operations • To identify areas for cost containment in line with enhancing WUC’s image

Strategic Intent: Strategic Intent: Leadership effectiveness Stakeholder relationship management Strategic themes: Strategic themes: • To improve the performance culture sustain • To increase stakeholder satisfaction vide able of the organisation ro nvironm w • To improve staff morale and p d e ent a To an al te e ly r motivation : iv fr a N ct W ie n 2 fe : e a n d 6 f N d O s w I e O p l t I y in ut i a S s S r i r m l e s o I e it t S c d y a V e I t a n a s w o

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optimisation c Strategic Intent: e Strategic themes: s Infrastructure development • To develop and implement a Rural Water Strategic themes: Supply Services Policy • To develop short, medium and long term • To develop and implement a capital programmes to ensure water business model security • To align existing policies with the operating model

5 Strategic Intent: Water supply and demand management Strategic themes: • To meet water demand • To reduce water losses 4

10 Water Sector Reforms Programme Timeline with milestones

2009 2010 2010 2011 2012 2013 2014

May Phase 1 May Phase 2 October Phase 3 Phase 4 Phase 5 Phase 6

2 villages taken 50 villages taken 100 villages 221 villages The final but 1 Take over of Original over. over. Phase 1 & 2 taken over for taken over for phase of the Maun and Scheduled wastewater both potable both potable and takeover surrounding Project takeover. and wastewater. wastewater. completed. 77 villages on April completion date. villages taken 2 April 2013 over. marking the The project was completion of the ahead of the takeover. scheduled 2014 completion date.

11 water utilities corporation annual report 2013/14

Board Chairman’s Statement 1 088 000KM LENGTH of potable water network IN GABORONE

713 916KM Some Board Members and I assumed office at a time when the Corporation LENGTH OF MAJOR TRANSFER WATER was in the middle of a transformation, SCHEMES following the completion of the takeover of water service delivery services and wastewater management I am pleased to present this, the from the Department of Water Affairs and Local Authorities under the Water th 44 Annual Report of the Water Sector Reforms Programme. (WSRP) Utilities Corporation and my first report as the Water Utilities The initial phase involved the actual Corporation Board Chairman, transfer of the various villages to WUC and the subsequent phases the actual following my appointment in work of leveling service levels in areas January 2014. now all under WUC. The primary aim of the WSRP was to have one authority which had proven itself a reputable water authority take over water services throughout the country in a quest to improve service and ensure comparable service throughout Botswana. WUC was found to be that authority.

12 Operations

This Annual Report covers WUC’s Corporation remained cognisant of the In spite of the unsatisfactory situation performance in line with the objectives role it plays in people’s lives and the of WUC’s water resources for both and targets it set itself in its strategic huge responsibility its mandate places surface and groundwater during the plan covering the years 2012 to 2015. on it and in line with this came up with reporting period, the Corporation was initiatives to ensure the accessibility of able to deliver on its mandate. Through The review period was characterized water to all. To address the widespread relevant water demand initiatives by mixed results. The unsatisfactory lack of land servicing, the Corporation including water restrictions and water performance of the Corporation is increased its standard connection rationing the Corporation was able to testament of the challenges it has been distance from 5m to 50m at a flat rate provide a sustainable water delivery through in the last few years. During of P1 500.00 in serviced areas. Through service, especially in the water stressed the year, it became apparent that the this and other relevant policies WUC areas in the south of the country. It WSRP had taken its toll on the various made strides towards making water was through this ability to manage aspects of the Corporation’s operations, accessible to the people. its operations, carry out regular financially and even the service levels maintenance and optimize its water that WUC was once famed for. The The main objective of the Water Sector treatment plants and other relevant Corporation’s cash reserves went down Reforms Programme was to level systems that the Corporation was able over the years and for the larger part of service for all water users in the country to continue supplying the country with the reporting period this became more through the provision of quality water water despite all the conditions that evident with poor cash flow hampering and wastewater services as has been were plaguing it as a water supplier. the effective and efficient operation of for years in towns and urban centres. the Corporation. The mammoth task However, the water authorities that One of the main challenges was the lack of steering the ship to the familiar WUC took over established tariffs of land servicing in many areas that WUC waters of exceptional and profitable independently hence the various tariffs took over from former water authorities performance intensified during the that WUC inherited from area to area. under the WSRP. Upon takeover various reporting period. Targeted initiatives, Due to these varying tariffs some projects were embarked on in an effort derived from the Corporate Strategic customers pay up to 300% more than to address this backlog. The over one Plan drove the Corporation towards other customers for the same amount hundred projects that the Corporation delivering expected results. of consumption and quality of water. was involved in by the end of the review It is of utmost importance that WUC is period, when complete will turn many The theme of the report “Water and established on a financially sustainable water stressed areas in the country into Energy: Understanding the impact basis but at the same time water water efficient areas. of water and energy on humankind” tariffs should be affordable to all. The encapsulates the operations of the exercise to rationalise tariffs and make To improve the way the Corporation does Corporation’s efforts during the them pro-poor that the corporation business and promote convenience reporting period. Guided by its Corporate undertook during the review was one for the customer, various technologies Strategy, WUC’s energies were of the initiatives towards ensuring this were introduced. These include the use expended on ensuring the availability of accessibility to most. of electronic banking for bill payment, quality water for all. With the takeover of the use of cellphone short messaging villages and rural areas, the Corporation Under the new pro-poor tariffs a system to send bills, amongst others. discovered that some of these areas uniform national tariff of P1.50 or P2.00 This was one of the big achievements were without a water network. The per kilolitre was adopted for the 0 – 5 that the Corporation recorded during kilolitres bracket. For areas which were the review period. paying more than P2.00 the rate was lowered to P2.00 and those paying less than P1.50 it was raised to P1.50.

13 water utilities corporation annual report 2013/14

Board Chairman’s Statement [continued]

Governance

Guided by the Board Charter adopted customers in towns and cities and the financial year under review, no in the previous reporting period, the those in rural areas and villages, who revenue grant was received. The net Board remained committed to its all have unique water supply needs loss resulted in the retained earnings fiduciary duties. To ensure sustainable and expectations. The Rural Water being reduced to P448.1 million in performance and the sound Supply Strategy adopted during the 2013/14 compared to P796.2 million management of the Corporation’s previous reporting period assisted in in the previous financial year. The cash business and associated risks all Board addressing the peculiar circumstances flow situation declined from P428.4 positions were filled during the year. that come with supplying water in rural million in 2012/2013 to P173.6 in the The Board Members have a wide range areas. These circumstances include financial year under review. Debt service of skills and knowledge in the various long distances to traverse pipelines, coverage stood at (4.87):1 in 2014 aspects of the Corporation’s operations scattered homesteads which make compared to (1.77):1 in the previous to ensure a balanced pool of skills. it hard to design a proper network, year. amongst others. To remain relevant to the business By the close of the reporting period and the ever changing operational Financial Performance titles to some of the land and buildings environment, the Board adopted the acquired by the Corporation through the tripple-bottom line sustainability The year under review presents revenue Water Sector Reforms Project had not framework to evaluate its performance amounting to P948.1 million. This is an yet been transferred to the Corporation. and by extension, the Corporation’s increase of P157.3 million or 19.9% from performance. Safety, Health and Risk P790.8 million in 2013. The increase Appreciation issues were emphasized, with policies in revenue for the year is as a result of and Standard Operating Procedures revised tariffs that were implemented Looking back at what the Corporation (SOPs) for the various operations in June 2013 and the increase in the has been through during the past reviewed and enforcement monitored. number of connections following the three years, I am pleased with the An additional Board Committee, the takeover of more villages in the Nhabe progress it made during this reporting Operations and Technical Committee area under the Water Sector Reforms period. I am particularly humbled by the was established to ensure the project. commitment that the Management management and coordination of and staff showed during the year. projects and asset management in the The Corporation recorded total Corporation. operating expenses of P1.3 billion, The Corporation’s biggest support came compared to P1.1 billion in the financial from the customers, who through their With an increased and variegated year 2012/2013. This shows an queries, complaints and other feedback customer base as a result of the increase in total operating expenses we were able to and will be able to WSRP, the Corporation had to of P0.2 billion or 18.2%. Water and continue improving the service we are make sure that it meets or exceeds wastewater treatment and distribution offering them into the future. customer expectations. With these expenses are 57% of the total operating expectations dictated mostly by costs while administration and other For this, and on behalf of the Board, I geographic location, during the year operating costs constitute 25.6% of would like to commend you all. the Corporation had to come up with these costs. relevant strategies and initiatives to address them. Its Stakeholder For the review period the Corporation Engagement Strategy guided in recorded a net loss of P346.6 million, the engagement and management compared to a net loss P191.1 million of the various stakeholder groups in 2012/13. The P155.5 million increase including community leaders, political was mainly attributable to the fact that Matome T. Malema leadership, traditional leadership, unlike in the previous financial year Board Chairman where the Government provided a revenue grant of P200 million, during

14 15 water utilities corporation annual report 2013/14

Board of Directors

Matome T. Malema Dr Obolokile Obakeng Godfrey B. Molefe (Board Chairperson) Qualifications: PhD Hydrology (University of Qualifications: MSc Fiscal Studies (University of Qualifications: MBA (UCT Graduate School of Amsterdam), MSc Water Resources Hydro-geology Bath), BCom Accounting (University of Botswana), Business, RSA) BEng (Hons) Mineral Process (International Institute Aerospace Survey and Earth CIMA (Camborne School of Mines, UK) Sciences), BSc Geology (University of Botswana) Tenure: 2012 - 2016 Tenure: 2014 -2017 Tenure: 2010 - 2014

16 Zuma Chengeta Rachel Nekati Mercia Makgalemele

Qualifications: MSc Strategic Management Qualifications: BCom (University of Botswana), Qualifications: LLB (University of Botswana), Post (University of Derby, UK) BSc Honours Mining Slenderizing Therapist Diploma, Nail Technician, Graduate Certificate in Corporate Law & Securities Geology (Leicester University, UK), Chartered Diploma in Events Management, Wedding Planner. (University of South Africa) Environmentalist (UK) Tenure: 2012 – 2016 Tenure: 2012 – 2016 Tenure: 2012 - 2016

17 water utilities corporation annual report 2013/14

Board of Directors [continued]

John Phatshwe Galeitsiwe Ramokapane Noble Katse

Qualifications: Masters in Environmental Planning Qualifications: BCom Human Resources Qualifications: MBA (University of Botswana) BA (University of Nottingham, UK) Masters of Management & Industrial Relations (Zimbabwe Statistics (University of Botswana) Commerce in Project Management (Cranefield Open University) Diploma in Agriculture (University College, RSA) BA Environmental Science (University of Botswana) Tenure: 2013 -2017 of Botswana) Tenure: 2013 - 2017 Tenure: 2013-2017

18 19 water utilities corporation annual report 2013/14

Chief Executive’s Statement 3 200 EMPLOYEES

The measure of achievement of the 44 raison d’etre of the Water Sector YEARS SINCE WUC WAS ESTABLISHED Reforms Programme (WSRP) would be the Corporation’s ability to give Batswana a uniform water and wastewater service wherever they may be in the country with the traditional History was made during the WUC areas which are towns and review period as the Corporation cities as the benchmark. The reforms completed the takeover phase of have dominated the Corporation’s operations in the previous three villages under the Water Sector reporting periods and hence all Reforms Programme, ahead of resources, financial and otherwise the set project schedule. have, over time been channelled towards the success of these reforms. Management however, remained cognisant of the fact that this was only the beginning of the mammoth task to operationalise the objectives of the programme, to standardise service levels throughout the country.

20 The WSRP reached its peak during the Water Resources Some of the projects completed during reporting period, with the takeover of the year went a long way towards the last batch of villages in the Nhabe The review period commenced with cushioning the effects of the water area. In a quest to deliver successfully the Corporation’s water supply in a scarcity in the various areas. The on this extended mandate as well as satisfactory position with total storage Malwelwe Water Supply Augmentation to protect a reputation it had built over at 69% of full capacity of the seven Scheme, the Serowe Connection to four decades as a supplier of note in dams which the Corporation operated the NSCI, the rehabilitation of the the region and even internationally, the during the year. The Lotsane Dam came Ramotswa and Malotwane wellfields Corporation placed a lot of emphasis on into use during the year, bringing the as well as the rehabilitation of the NSC the reforms dams to seven. The construction of pumps are, but a few of such projects. the other dams, Dikgatlhong and Thune Water Sector Reforms Programme was completed during this period and Wastewater services continued to be a by the close of the review period the burden to the Corporation as they did The WSRP was a litmus test for the dams were yet to be put to use. not generate any revenue but remained Corporation’s dynamism and ability expensive to run. These services were to respond to change so that it can Due to poor rains in the south of the taken over from the former operators remain relevant to the clientele and country, by the close of the year all the without any applicable tariff and the environment under which it operates. dams in the south were below 40%, Corporation continued to operate in the The year under review was the most save for Nnywane Dam which was at same fashion. In a quest to make the challenging as the Corporation’s financial 73% having benefited from flash floods service self-financing, the Corporation resources got depleted after years of in its catchment area. These dam levels set out to develop a cost reflective tariff financing the WSRP. Staff morale hit an were a cause for concern as they did which was still under development by all-time low as staff got burnt out from not portend well for the Corporation’s the close of the reporting period. the long hours, increased workloads operations until the on-set of the and extended areas of jurisdiction that following rainy season, which was also Governance came with the reforms. High customer not guaranteed to be a better one than expectations in the newly taken over the ones preceding it. In keeping with contemporary corporate areas also increased the pressure governance practices, the Corporation under which the Corporation operated. The ground water situation was also emphasised the tripple-bottom line For Management, it became apparent not encouraging owing to the slow into its operations. Stakeholder that there was need to step up change re-charge of boreholes over the past engagement took centre stage as management efforts to facilitate a few years due to the low rains. With various stakeholders were engaged seamless transition. The Investment a large number of boreholes drying in various fora including public in Excellence (IIE) programme which up, the Corporation had to come kgotla meetings, media conferences, Management had gone through during up with initiatives to manage the workshops, open houses, fairs the previous reporting period was available resources. Guided by its five and exhibitions, amongst others. cascaded to the lower levels of staff so year Strategic Plan, the Corporation Environmental management was also as to equip them with the necessary remained cognisant that the future emphasised with Environmental Impact skills and knowledge to manage of conservation lies in Water Demand Assessments done for relevant projects themselves and their contemporaries Management and hence intensified in line with legislative requirements through the transition. In-house IIE its efforts in this area with several in this area. The restoration of the facilitators were trained and by the end campaigns, water rationing environment was done following the of the year three had been accredited. and water restrictions and a robust completion of projects, even small ones Going forward, these facilitators will Stakeholder Engagement programme. such as small pipes bursts. There was take over the delivery of the programme Infrastructure development was also cooperation with the public in the area in the organisation ensuring as many given emphasis, guided by the Water of environmental management as they members of staff go through the Supply Master Plans for the various participated in clean-up campaigns held programme internally. Using internal areas to ensure the country’s water by the Corporation, mostly to clean up facilitators will cut down on the cost of security into the future. Some capital reservoir catchment areas and the dam training. water projects were also carried out perimeters. in response to the obtaining situation.

21 water utilities corporation annual report 2013/14

CEO’s Statement [continued]

The Board’s guidance in managing the With an ever discerning customer base, by eagerness to deliver increased levels Corporation through the transition areas which had never had disinfection of service to all its customers, nationally. brought about by the WSRP remained infrastructure demanded disinfected Robust internal and external customer invaluable. Guided by the Stakeholder water putting the Corporation under engagement programmes to inform, Management Strategy and the Board pressure to avail such in the short space educate, interact and get feedback from Charter, the Board was involved in of time it had been operating in those customers helped in informing future stakeholder engagement efforts areas. These areas included those areas operations that target and address and showed a non-wavering sense whose sources of supply are boreholes. specific stakeholder needs. This of commitment and stewardship In response to this and in its quest to customer-centric shift bears testimony during the review period. The strategic standardise the quality of water in all to the high levels of commitment, direction it set guided the Corporation’s its operational areas, the Corporation dedication and selflessness that is operations towards becoming a installed chlorinators in some of necessary for the Corporation to reach financially viable entity. these areas and by the close of the the “promised land” of providing an reporting period at least one hundred uninterrupted quality water service and Challenges and twenty six chlorinators had been efficient wastewater service: it is this installed around the country. Going shift which will restore the Corporation Having taken over all areas under the forward, all relevant water projects will to its former glory of being a financially WSRP, it was easy for the Corporation to have chlorine dioxide infrastructure stable and well performing organisation. comprehensively assess and appreciate incorporated into them to enable the the complexity of the programme. It disinfection of water. Conclusion became apparent that the challenges associated with supplying water varied Other challenges that had an adverse WUC Management will forever remain from area to area. Some challenges impact on the Corporation’s grateful to the Board under Ms Nozipho however, had a common thread running operations included vandalism of the Mabe who retired during the review through all the newly taken over areas. Corporation’s infrastructure and the period and the Board under Mr Matome The most common of these being the general unwillingness to pay for water Malema who replaced Ms Mabe for dilapidated infrastructure, inadequate by the public. The general perception guiding and supporting the Corporation, storage capacity, absence of clearly by the public that water is not a especially through this period of demarcated and clearly marked streets commodity with a price tag affected transition. Their support was invaluable. which is the norm in villages. All these the Corporation’s efforts to provide an To WUC staff, your unwavering factors affected the Corporation’s uninterrupted water supply service as dedication to your work even under efforts to provide an efficient water it could not collect sufficient revenue the most uncertain conditions is what service. to finance its operations. This saw the kept the organisation going. To all our customers, WUC remains humbled by Failure to implement the funding model Corporation’s debt book grow and by the close of the review period it stood your understanding and tolerance even for the WSRP as had been agreed when we fell short of your expectations with the Corporation’s shareholder at just over P300million. The “Pay in the course of delivering on our resulted in the Corporation’s balance Your Water Bill” campaign, together mandate. sheet going down drastically as it with mass disconnections helped the funded the reforms. This rendered Corporation recover some of the owed Le ka moso bagaetsho. the once financially stable WUC a monies. financially struggling organisation. This poor financial situation had an adverse Looking Forward impact on the Corporation’s operations and affected some water supply The transition that WUC is projects which had been planned as currently undergoing will define the funds originally budgeted for them the new organisation that WUC will were diverted to finance the WSRP. In metamorphose into. Considering Godfrey Mudanga light of this shortage of funds priority the development of events in the Chief Executive Officer was given to emergency water supply Corporation during the reporting period, projects which were aimed at alleviating it will be an organisation characterised severe water scarcity especially in some areas taken over from the former water authorities.

22 ShareWater every drop and is save thelife. future.

If we all play our part as individuals, our efforts can go a long way and lighten the burden associated with water shortages. Play your part consistently and make water conservation a way of life.

23 water utilities corporation annual report 2013/14

1 2 3

4

Corporate Management Team

The role of the Corporate 1. Godfrey Wisiso Mudanga 3. Lillian Mosimaneotsile Management team with the Chief Executive Officer Technical Services Director MSc Urban Engineering (Loughborough BSc (Hons) Civil Engineering (Aberdeen assistance of Section Heads University, UK), BEng (Hons), Civil Engineering University, Scotland) (Plymouth Polytechnic, UK) is to implement the strategic Responsibilities direction and objectives set out Responsibilities • Capacity planning • The overall management of the • Design by the Board within the confines Corporation, development and • Major projects implementation implementation of strategic plans and • Water quality of the corporate vision, mission achievement of the organisational • Information Technology (IT) including and values . mission, vision, business objectives and business systems & Geographical goals established by the Board Information Systems (GIS) • Responsible for the broad policy objectives of the Corporation and general advice to the Board 4. Gaselemogwe Senai Infrastructure Director 2. Nginani Mbayi BSc Chemistry and Environmental Science Deputy Chief Executive (Operations (University of Botswana) and Water Resources) Responsibilities BSc (Hons) Civil Engineering (Aberdeen • Sustainable water resources management University, Scotland), MICE (UK) Chartered • Dams management Engineer • Groundwater management Responsibilities • Bulk water transfers • Water Supply • Maintenance • Wastewater Services • Fleet management • Maintenance • Commercial Services • Customer Services • Fleet Services • Water Resources Management (Dams and Boreholes) 24 5 6 7

8 9 10

5. Harry Pheko 7. Tsholofelo Bogosi 9. Matlhogonolo Mponang Regional Operations Director (South) Internal Audit Director Human Resources and MSc Operations Management and Bachelor of Commerce (Accounting) – Administration Director Manufacturing Systems (Nottingham, UK), (University of the Witwatersrand- RSA), BSc Psychology (University of Pittsburgh, PA, USA) B. Eng Mechanical Engineering (B.I.T Mesra) (ACMA, CGMA) M.S.M.E Responsibilities Responsibilities • Organisational development Responsibilities • Assurance and Consulting • Training • Water supply • Risk Management Evaluation • Staffing • Water distribution • Controls Evaluation • Employee relations • Commercial and customer services • Corporate Governance • Employee wellbeing • Wastewater services • Appraise compliance with Statute, Policies • Administration and Pr ocedures • Payroll 6. Taboka Muke • Whistle blowing, Fraud and Ethics Policies Finance Director 10. Enelys Shamakumba 8. Meshack Balebetse BA Accounting (University of Botswana), FCCA Corporation Secretary Regional Operations Director (North) Responsibilities LLB (University of Botswana) • Statutory financial reporting MBA (Mancosa), BSc Physics and Chemistry • Management accounting (University of Botswana) Responsibilities • Logistics & materials procurement • Budgeting Responsibilities • Legal services • Treasury management • Water supply • Corporate Services • Financial forecasting • Water distribution • Records Management • Sourcing of funding for operations • Commercial and customer services • Asset Management • Management of financial obligations and • Wastewater services covenants • Financial policies & procedures formulation

25 water utilities corporation annual report 2013/14

Corporate Governance 330 000 clients from 80 000 in 2009

Ownership of the Corporation During the year, the Board comprised P5.0 billion a fair balance of skills, knowledge and WORTH OF property, plant and The Corporation is a parastatal body experience to meet this objective. equipment wholly owned by the Botswana Government. The Water Utilities The role of the WUC Board is to Corporation Act defines the raison d’etre determine corporate policy and provide for the Corporation as well as the limits strategic direction. In carrying out this The Water Utilities Corporation within which it can operate, including mandate, it is expected to bring to bear subscribes to and is committed the roles for the Minister of Minerals, the highest standards of ethical conduct Energy and Water Resources, the to the accepted practices of good and good governance in line with Board, and the Executive Management. both statutes and generally accepted governance and international best practice. practice. As an establishment The Board created by statute, the Corporation The Board of the Corporation is is compelled to ensure that its appointed by the Minister of Minerals, Energy and Water Resources. processes and practices comply In appointing the Board members, with the requirements of the the Minister takes into consideration Water Utilities Corporation Act their experience and ability to make meaningful contributions to the (Cap 74:02) of the Laws of business of the Corporation. The Botswana and its amendments composition of the Board at any one and directives. time does not exceed nine members, including the Chairman.

26 During the year under review, the During the year under review, the Board In addition, the Water Utilities following comprised the Board of the convened four ordinary meetings and Corporation has an Internal Audit Water Utilities Corporation: thirteen special meetings. function charged with providing independent assurance to the Audit Matome T. Malema Members’ Declaration of Interest Committee on the existence and Chairman effectiveness of internal controls, Members declare their interest on an the efficiency and effectiveness of Dr Obolokile T. Obakeng annual basis and at every meeting in Governance processes and that the Vice - Chairman relation to the matters before them for Corporation’s goals are being met. their decision. Rachel Nekati The Committee is scheduled to meet Member Board Remuneration at least four times annually, and during Board remuneration rates are the reporting period it satisfied the Z. Chengeta determined by the Government of requirement as it held its four scheduled Member Botswana. Fees for members from meetings and two extra-ordinary Government Departments are paid meetings. Godfrey B. Molefe directly to the Government. The Member applicable rates per sitting during this Tender Committee year were as follows; M. Makgalemela The Tender Committee comprises four members of the Board; Member Chairman P1050 Vice Chairman P 840 J. Phatshwe M. Makgalemele, G. Molefe, Z. Chengeta Member Member P 840 and J. Phatshwe. It is responsible for the implementation of the policies laid G. Ramokapane Chairmen of the Committees were also down for the procurement of works, Member remunerated at P1050 for committee goods and services by the Corporation. meetings. In carrying out this mandate, the N. Katse Committee is expected to ensure that Member Board Committees the principles of economy and efficiency prevail, including the need to encourage Audit & Risk Committee Registered Office and support local businesses in the spirit Water Utilities Corporation Head Office The Audit Committee comprised three of the Government local preference Sedibeng House, Plot 17530, Luthuli members of the Board; G. Molefe, R. policy and citizen empowerment. Road Nekati and N. Katse. Its activities are Industrial Site governed by the Audit Charter which The Committee operates within the limits Gaborone has been approved by the Board. The of the Corporation’s Tender Regulations Charter empowers the Audit Committee and Procurement procedures. These Independent Auditors to provide its oversight responsibilities procedures are revised from time to Deloitte & Touche to the Board for the financial reporting time to align them with best practice. process; the system of internal controls, Board Meetings the audit process and the Corporation’s The Committee is scheduled to meet process for monitoring compliance eight times per year, and in the year The Board meets at least quarterly. with the laws and regulations. The under review it met eight times. It follows a structured approach of Committee also provides advice on delegation, reporting and accountability. Corporate Risk Management. This includes reliance on three Board Committees to carry out delegated duties, namely the Audit, Tender and Permanent Executive Committees.

27 water utilities corporation annual report 2013/14

Corporate Governance [continued]

Permanent Executive Committee

The Permanent Executive Committee comprises four members of the Board, R. Nekati, B. Makgalemele, J. Phatshwe and Z. Chengeta. It deals with policies relating to the management of human resources, including the organisation structure, terms and conditions of service, remuneration, the appointment and dismissal of senior staff other than those appointed by the Board, pensions and any other matters delegated to it by the Board.

The Committee meets at least quarterly. During the year under review it met ten times.

Reporting to the Botswana Government

The Board of the Corporation reports to the Minister of Minerals, Energy Statutory Reporting Requirements Ministerial Directives and Water Resources regularly on proceedings at Board meetings. An The Water Utilities Corporation Act There were no Ministerial Directives update is presented to the Minister requires that all Corporation business during the year. after each Board meeting, in addition be conducted along sound commercial to continuous consultative meetings, lines and that a reasonable return is Executive Management generated on the equity provided by as deemed necessary. Management The management and daily running of also sends quarterly reports on the the Government of Botswana. The Act further requires that the Audited the Corporation is the responsibility Corporation’s progress to the Office of of the Chief Executive Officer with the President. Financial Statements be presented to the Minister by the 30th of September the assistance of the Corporate each year. Management Team (CMT). The role of Going Concern the CMT, with the help of Section Heads, The financial statements for the The Board is satisfied that the is to implement the strategic direction year ending 31st March 2014 have Corporation has complied with this and and objectives as set out by the Board been prepared on a going concern other statutory requirements for the within the confines of the corporate basis. The Board is satisfied with year ended 31st March 2014. vision, mission and values. the available financial resources, future performance projections A statement by the Board members on and the continued support from their responsibility for the maintenance the Government of Botswana. The of adequate accounting records, the Corporation will continue to operate preparation and integrity of the financial into the foreseeable future. statements and related information is detailed on page 50 of this Report.

28 29 water utilities corporation annual report 2013/14

Water Sector Reforms Programme 540 TOTAL NUMBER OF VILLAGES TAKEN OVER UNDER THE WSRP

The takeover of the seventy-seven In addition to this, other initiatives 16 (77) villages in the Nhabe area saw were introduced to cater for these REGIONAL OFFICES WITH FURTHER the total number of villages taken over customers. In addition to customer OUTER STATIONS under the programme rise to 540. service centres which were opened in strategic places to promote accessibility The Rural Water Supply Strategy that by all, the Corporation introduced had been developed in the previous alternative payment methods. These The last area under the Water reporting period was implemented were aimed at easing the process of Sector Reforms Programme, and it assisted in addressing the paying bills for customers. Through the Nhabe area was taken over peculiar needs of the Corporation’s this arrangement bill payment can be rural clientele. The strategy guided the done at Botswana Post Offices, First during the review period. The development of strategic initiatives for National Bank Botswana, Stanbic Bank programme which commenced short, medium and long term solutions and Barclays Bank nationwide as well during the 2009/10 reporting mainly in improving the Corporation’s as electronically. The use of mobile operational efficiency and managing collection was also employed in various period involved the takeover of public expectations in the rural villages. areas to spare the customer long potable water service delivery distances to travel to pay their water and wastewater management bills. All these initiatives took the burden off customers as they had more options services to villages by WUC. of paying their water bills.

30 To manage the transition brought end of the year under review three The assimilation of employees taken about by the Water Sector Reforms facilitators had been accredited. The over under the WSRP also continued Programme the Corporation intensified Investment in Excellence programme through other programmes. Guided by its change management efforts. is a programme which trains one in the Change Management Framework The Investment in Excellence (IIE) self-mastery, mastery of others and developed the previous year, over and programme which had been introduced the inter-relationships necessary for above formal training and inductions, in the previous reporting period for an organization to perform well. The sporting activities and other social Executive Management was cascaded programme equips participants with vehicles were used to bring employees to the lower levels. In-house facilitators the necessary skills and competencies together. A Corporate Anthem was were trained so that they can roll out to steer an organization through a composed and is currently being used to the programme further down to cover transformation such as the one the unite the Corporation through fostering the rest of the Corporation. By the Corporation is currently going through. a sense of belonging together and having a responsibility to the nation.

31 water utilities corporation annual report 2013/14

Operational Highlights 416MCM TOTAL CAPACITY OF THE CORPORATION’S SEVEN DAMS WHICH WERE IN USE Dikgatlhong Dam

By the close of the reporting period, The Corporation continued to draw 900 the total volume of raw water stored water from Molatedi Dam in South boreholes nationwide in all the Corporation’s seven dams Africa under the two countries’ long stood at 285MCM which is 68% of standing agreement. Although the the full capacity of the seven dams Molatedi Dam from which South Africa which were in use compared to supplies Botswana stood below 26%, 240.75MCM representing 69% of full the quota remained at 100% which is Surface Water Supply Situation capacity of the six (6) dams which 20 million litres a day following WUC’s were in use the previous reporting request. The agreement stipulates that st As at 31 March 2014 the period. The insignificant inflows into once the Molatedi Dam level falls below Corporation’s water supply the dams in the south necessitated 26% WUC only gets a half of the agreed sources were not in a satisfactory that the Corporation maintains quota which translates to 10 million state. Although the north of the the Level Two Water Restrictions litres a day. To optimise the benefit of country had received good rains which it had introduced the previous this water the Corporation continued reporting period in response to the pumping it directly into the treatment and six of the seven dams had imminent drought. Over and above plant as it had done the previous year, filled to capacity, the south had the restrictions the Corporation also rather than into Gaborone Dam as had received hardly any rains, with introduced water rationing in the been the practice for the past twenty the Gaborone and Bokaa dams Greater Gaborone area, starting with (20) years. at 15% and 32% respectively. The a one eight hour day shut down for Nnywane Dam had just gone up each area per week. By the end of the year, the rationing frequency had been from 4% to 73% following flash increased to three eight hour days per floods in its catchment area. week for each area.

32 The status of the dams as at 31st March 2014 compared to the same period in the previous reporting period:

DAM GABORONE NNYWANE SHASHE BOKAA LETSIBOGO NTIMBALE LOTSANE F.S.L 141.4 MCM 2.3 MCM 85.3 MCM 18.5 MCM 100 MCM 26.5MCM 42.5MCM F.S.C (998.05 m) (1134.03m) (971.46m) (954.00m) (848.8m) (1103.50m) (853.00M)

Financial Year 13/14 12/13 13/14 12/13 13/14 12/13 13/14 12/13 13/14 12/13 13/14 12/14 13/14 12/13 Cumulative 466.1 138.4 344.8 143 668 401 377 163.9 483 498.7 714 693 500 331 Rainfall (mm) Impoundment 22.2 39.6 1.7 * 84.1 80.3 11.0 5.85 98 89 26.4 26.1 42.0 5.25 (MCM) Percentage 15.7 28 74.3 failed 98.9 94.5 59.7 32 98 89 99.6 98 99.1 12.4 Full (%)

Note : MCM denotes Million Cubic Metres mm denotes millimetres FSL denotes Full Supply LeveL FSC denotes Full Supply Capacity

Bulk Water Transfer North South Incidents of fibre optic vandalism on The Wellfield Monitoring Framework Carrier Scheme I (NSCI) the pipeline’s associated infrastructure developed in the previous reporting were also experienced during this period guided the Corporation in Since the construction of the North period. The Corporation addressed groundwater management to ensure South Carrier Scheme I (NSCI) in 2001, public meetings in the affected areas on sustainable abstraction and utilisation the scheme has been invaluable in the dangers of tampering with the NSCI of underground water resources. augmenting water supply to the as the water flows at high pressure. Greater Gaborone area. With regular The wider implications of damaging the Water Losses droughts having been experienced in pipeline were also emphasised. Over this area over the years, the scheme has and above seeking support to curb the To address the rampant water abuses always come in to save the situation as vandalism from community leadership at public standpipes, the Corporation Gaborone City and surrounding areas and the general public in this aspect, embarked on a project to replace all largely depend on it to bring in water support was also sought from law post-paid public standpipes with pre- from Letsibogo Dam in the north. enforcement agencies. paid standpipes in the country. By the close of the review period, the project During the period under review the NSCI Groundwater was over 80% complete. Some areas had had several downtimes due to pipe been fitted with standpipes and they bursts and equipment failure. However, Due to the reduced amounts of rainfall were operational. However, although of note was that equipment failure generally in recent years resulting in fitted in other areas, the standpipes incidents were greatly reduced following the slow recharge of groundwater, were yet to be commissioned following the assessment and configuration of especially in the south of the country, communication and public education valves by the original pipe supplier KSB boreholes continued to dry up or their on the correct use of the pre-paid the previous year. Unlike in the past, yields significantly reduced. This affected mechanism. Over and above addressing the bursts experienced did not have an water supply in those areas that depend issues of water conservation, the pre- adverse impact on the supply situation on groundwater. The need to mine the paid standpipes will also address issues in the NSCI recipient areas, especially the boreholes due to their low yields resulted of revenue collection as customers go Greater Gaborone area. Water rationing in frequent breakdowns of the boreholes for lengthy periods without paying their played a major role in cushioning the and hence interrupted water supply. To water bills resulting in the Corporation’s effects of the unavailability of the NSCI. mitigate this, the Corporation bowsed to debt book going up. By the close of the the affected areas. review period the debt book stood at P300million.

33 water utilities corporation annual report 2013/14

Operational Highlights Program [continued]

During the year under review, water Wastewater Services competence in performing certain tasks losses as a percentage of system in the operation of its laboratories. input volume went down from 29% in The optimisation of WUC wastewater The accreditation involves the the previous year to 25% on average. treatment facilities to improve assessment of technical competence However the Corporation still found compliance to the BOS: 93 standard of organisations in providing conformity this to be too high. Some initiatives in the preceding review period bore assessment services in its particular which had been started in the previous fruit as the effluent discharged into field. reporting period to reduce the water the environment complied with the losses continued and new ones were standard more often than not. Isolated To address the water quality issues introduced in a quest to reduce the incidents of non-compliance were which had been experienced in losses to the internationally accepted experienced. the previous reporting period, the level of 15% and below. These Corporation continued with routine initiatives included the conversion To control and monitor pollution by water quality monitoring for both of post–paid public standpipes to industries through the indiscriminate potable and wastewater according to a pre-paid standpipes. This was after discharge of trade effluent into the set sampling and analysis programme. the Corporation realised that a large sewer network overloading the Drinking water met the BOS 32:2009 percentage of unaccounted for water treatment facilities with unsuitable for chemical parameters in the old was lost from public standpipes. The effluent, the Corporation engaged the WUC areas. However, in some areas Corporation also developed a Non- relevant industries, work-shopped taken over by WUC under the WSRP, Revenue Water (NRW) framework. them and thereafter entered into Trade water standards remained a challenge Through the framework, the Corporation Effluent Agreements (TEA) with them. as most of these areas did not have was able to classify losses into apparent However, the companies’ response chlorination facilities and for those that and real losses. The framework will also was generally slow, something that had, the facilities were dilapidated and assist the Corporation in driving the is attributable to the fact that they out of use. HTH floaters were installed leakage control strategy and inform the do not meet the set standards for in most areas to boost chlorine levels development of relevant interventions effluent disposal. Some factories at Water Treatment Plants and water to curb the problem. Public education are not efficiently equipped for this tanks. Regular plant inspections were on water conservation and the need and continue to discharge unsuitable maintained in all areas. Regular cleaning to report pipe bursts to WUC timely effluent into the sewer system. of service tanks also helped to improve were the subject of a campaign that ran the quality of water. during the year. During the review period the Corporation embarked on a project to refurbish pump As a sustainable long term solution A high percentage of water losses were stations and incorporate the telemetry of these water quality issues the registered in villages which recorded system to improve the pump stations’ Corporation adopted Chlorine Dioxide high incidences of infrastructure performance and the Corporation’s as its main water disinfectant as it failure due to dilapidated networks, efforts to monitor all parameters as has a longer residual life. In line with unmetered standpipes, inefficient recommended by effluent standards. this move, all relevant projects started meters and physical losses. The project The project will be completed in the during the year and all future projects to convert all public standpipes to pre- next review period. The Corporation will include this component as the paid standpipes in a quest to address will continue to education and create primary method of disinfection. It is the rampant water losses progressed awareness in these industries and expected that this move will increase well. By the end of the year pre-paid regularly monitor their activities. compliance resulting in improved water standpipes had been installed in most quality across the country. Further to areas, some were in use and others Water Quality that, all areas inherited from former were awaiting commissioning. Stuck The Corporation made great strides water authorities with no disinfection meters which also contribute to water in its quest to achieve best water facilities were identified and will be losses were replaced as and when they quality standards. WUC received covered through the installation of were identified. accreditation from the Southern African Chlorine Dioxide disinfection equipment Development Community Accreditation in subsequent reporting periods. By the System (SADCAS) for its Mmamashia end of the year tenders for such work in laboratories. The accreditation is Mochudi, Molepolole, Maun and Ghanzi recognition of an organisation for its were at tendering stage.

34 An alvenius water pipe in Moshupa

Incidents of water being stagnant in been metered. For years the former To address some of these challenges, private storage were reported during water authorities charged these plots WUC, in some instances outsourced the period raising water quality issues. a flat rate of P5.70 per month. WUC water connections to private companies To curb this problem, public education could not maintain this arrangement with the right machinery to carry out in this area continued and will remain as it was not reflective of consumption such. Over and above Customer Service a key feature of the Corporation’s and therefore resulted in a loss. To Centres were opened in various areas to operations into the future. Although rectify this, the Corporation embarked bring WUC services closer to the public. WUC is responsible for water quality on a project to install meters in these up to the customer’s meter, it remains plots and the project was successfully In addition to the Customer service committed to working with the completed during the reporting period. Centres opened in areas taken over customers to address water quality During the year the Corporation found under the reforms programme, to issues even beyond the meter. itself having to adjust to servicing new make WUC services accessible to its areas taken over under the WSRP. The customers, WUC continued to explore Customer Services long distances over difficult terrain that other ways of making their services the pipes traverse to take water to accessible to its customers. Alternative The last of the areas scheduled for the scattered population posed great payment methods were increased from takeover under the WSRP, the Nhabe challenges when it came to carrying out just post offices and a few banks to area was taken over early in the year, water connections as well as providing include electronic transfers and more growing the customer base from adequate offices to service the areas. banks that offer WUC services. Mobile 300 000 to 330 000. The area brought Lack of plot numbers and access to the units also serviced remote areas. These with it peculiar challenges for WUC which various properties also made it difficult initiatives helped reduce queues at WUC needed carefully planned interventions for WUC to successfully carry out its service centres and offered convenience to ensure success in providing it with mandate. to customers. water. Upon the takeover of Maun WUC discovered that 2478 plots had never

35 water utilities corporation annual report 2013/14

Operational Highlights Program [continued]

Billing continued to be a problem during The Corporation’s website and Masama Well-fields the year with the late release of bills and Facebook page kept it in touch with bills posted to the wrong addresses. its stakeholders and promoted The Corporation embarked on a project This was mainly due to wrong or the expeditious dissemination of to equip the Masama Well-fields incomplete customer information on information particularly on water supply and inject the water into the NSCI to the WUC data base. To address this, the interruptions. augment supply to the south of the Corporation continued the verification country. When fully operational, the and updating of customer data through Capital Development Programme well-fields will supply 60Ml /day. By its “Saena Tumalano” campaign. For the end of the review period, the project those customers with email addresses, The dwindling water resources over had just been started and the scheduled the Corporation introduced electronic the years made it necessary for the completion date falls within the next bills. Bills were also sent via the mobile Corporation to put measures in place reporting period. short messaging system (sms) to to mitigate the imminent water those customers who registered by scarcity that is likely to hit the country, Ramotswa Well-fields signing the Saena Tumalano form. Data especially the south, in the near future. These mitigating measures include A project to rehabilitate the Ramotswa integrity is key in ensuring customers’ well-fields which had been lying fallow bills reach the intended recipients various projects in different parts of the country. During the review period, for years following their contamination hence the various avenues WUC used by pit latrines was undertaken. Work to to update and verify customer data. the Corporation engaged in over one hundred (100) various projects to ensure refurbish seven of the nine boreholes and associated infrastructure following During the year under review the the availability of relevant and adequate infrastructure to ensure water security years of vandalism commenced during construction of sewer networks in the review period. By the end of the several areas, including Gaborone’s into the future. Some of the projects are outlined below: year, the project was at an advanced Self Help Housing Areas (SHAA) were stage. When in use, the well-fields will completed and customers started North South Carrier Scheme II (NSCII) supply 8Ml /day and this will augment connecting to the system. Through supply to Lobatse, taking off pressure these projects, the Corporation aims Construction of the over 365km North from the Gaborone Dam. to phase out pit latrines and septic South Carrier Scheme Project II (NSCII) tanks, especially in towns and cities and project progressed well. This is a pipeline Malwelwe Water Supply promote accessibility to good sanitation that will transport water from the newly Augmentation Scheme for all. constructed 400MCM Dikgatlhong Dam in the north to the south of the country The project, to augment supply Guided by its Communication and to augment supply. Construction of the and address long standing water Stakeholder Management Strategy, 78km bulk raw water transfer pipeline shortages in Molepolole, Thamaga WUC stayed in touch with its various from Break Pressure Tank I (BPTI) and the Thebephatswa Airbase stakeholders. The Communication and near Letsibogo Dam to Moralane was commenced during the year. The Stakeholder Management Strategy completed during the review period. project involves the drilling of six ensured that the information provided The next phase of the project which boreholes, construction of associated by WUC was accurate and relevant and involves the construction of the next works, a transmission water pipeline, a that feedback was sought and used 78km from Moralane to Palapye is booster station, a pumping main from to come up with initiatives to address expected to be completed during the the booster station to Gaotlhobogwe any emergent stakeholder concerns. next reporting period. The scheduled Treatment Plant and Telemetry and Stakeholder consultations played a completion date for the project to reach SCADA technology. When complete, pivotal role in WUC’s operations as Gaborone is 2019. the boreholes will have a combined targeted messages employing the most output of 6Ml /day, bringing the total relevant vehicle were communicated to water supply for Molepolole, Thamaga stakeholders and their feedback sought and Thebephatshwa Airbase to 14Ml on the Corporation’s services and /day against a demand of 11Ml /day. products. The project is scheduled for completion early in the next review period.

36 37 water utilities corporation annual report 2013/14

Safety Health Environment (SHE) 3 STAR NOSA RATING ATTAINED Mmamashia Water Treatment Plant

120 SAFETY AND HEALTH STAFF MEMBERS WHO COMPLETED A Incidents SWIMMING COURSE A total of two hundred and seven (207) The range of DIFR is between zero incidents were recorded between April and five. The higher the DIFR figure, 2013 and March 2014, of which ninety- the lower the star rating. The range of The Corporation subscribes to the nine (99) were vehicle related accidents fatality rating is between zero and two. NOSA 5 Star Integrated System, and sixty five (65) occupational safety The higher the fatality figure, the lower incidents. The rest were theft, property the star rating. which aims to reduce employee damage, dog bites, chemical spillages, injury and illnesses, and their near misses and off the job incidents. Internal Audits related costs, including medical The fatality rate for the year was zero (0). There were nineteen (19) disabling Two SHE internal audits and an care, sick leave, disability benefit incidents and thus a Disabling Injury external audit were conducted in all costs and other similar aspects. Frequency Rate (DIFR) of 0.81, which is the Corporation’s operational areas within the Five Star rating according to around the country. Each Management the NOSA SHE system. Centre was audited separately and nine Management Centres attained three star rating, five attained two stars, and one, one star. Overall the Corporation attained three stars.

38 Table 1: Summary of the SHE External Audit Results

2012 2013 2012 2013 2012 2013 MANAGEMENT EFFORT EFFORT (DIFR) (DIFR) NOSA NOSA STAR CENTRES (%) (%) RATING RATING

1. Lobatse 70.66 54.67 1.88 080 3 2 2. kanye Baseline 61.87 0 1.97 Baseline 3 3. Gaborone 70.01 62.93 1.69 2.16 3 3 4. Head office 81.06 73.92 0 1.05 4 3 5. Francistown 68.00 66.71 0 1.06 3 3 6. Masunga 69.18 63.29 0.50 1.34 3 3 7. Mochudi 72.24 60.17 0.70 1.18 3 2 8. Kasane 68.58 71.01 1.23 0.93 3 3 9. Selebi Phikwe 71.99 68.09 0.37 1.10 3 3 10. Palapye 71.32 68.25 0 0.48 3 3 11. Mahalapye 71.61 68.69 2.25 0.88 2 3 12. Serowe Baseline 55.17 0.0 2.23 Baseline 2 13. Letlhakane Baseline 36.87 Not verified 0 Baseline 0 14. Molepolole Baseline 53.87 1.75 0.54 Baseline 2 15. Tsabong Baseline 53.34 0.65 0.0 Baseline 2 16. Ghanzi Baseline 66.88 0.88 3.27 Baseline 1 CORPORATION STAR 71.46 61.67 1.01 1.34 3 Star 3 Star RATING AVERAGE

ENVIRONMENT achieve this, the Corporation has Agreements which bind them to pre- since categorized all action plans into treat their effluent before discharging Wastewater Treated Effluent Discharge immediate interventions, short term it into the Corporation’s sewer system. and those needing long term plans for The Corporation also engaged other The Corporation conducted inspections purposes of funding. The ones needing stakeholders such as the Department on all the wastewater facilities within immediate action were provided with of Environmental Affairs and the its infrastructure. Most of the facilities funding solutions and by the end of Department of Industrial Affairs to did not comply with the wastewater the year were at different stages of lobby them to make it a requirement discharge limits of BOS 93: 2012. It implementation. for businesses to sign Trade Effluent became apparent that, the Corporation Agreements at the time of inception of needs to embark on undertakings such Trade Effluent Agreements (TEA) projects or renewal of trading licenses. as de-sludging of anaerobic ponds and replacement of some pumps to The discharging of non-compliant increase capacity and or efficiency. effluent into the Corporation’s The maintenance of pumps and motor watstewater facilities compromised control panels, lining of some ponds, the Corporation’s compliance to the bush clearing and general up-keep BOS 93:2012 To address this, the of cleanliness on the premises also Corporation engaged the business needed to be done to ensure compliance community through their mother with the BOS 93:2012 Standard. To body, BOCCIM to sign Trade Effluent

39 water utilities corporation annual report 2013/14

Safety Health Environment (SHE) [continued]

Vandalised borehole in Ramotswa

Training Clean of used oils from the service boreholes To give its staff the necessary skills and knowledge to remain relevant to the business of the Corporation, various SHE courses were conducted as follows: The Corporation took over nine hundred (900) service boreholes under the Course Number of WSRP. Most of the boreholes had oil Participants and grease spillages which pose a pollution danger to the water resources Swimming courses 120 in the area. The Corporation engaged SAMTRAC 18 professionals to clean the oil and Introduction to SAMTRAC 20 grease around the boreholes in four Management Centres namely Tsabong, Chlorine Handling 150 Ghanzi, Kanye and Molepolole. The rest Incident investigation 52 of the service boreholes will be cleaned Isometrix usage for incident investigators 100 in the next review period. Hazardous Chemical Substances 71 Hazard Identification Risk Assessment 54 Safety Principles for Engineers 50 SHE Rep Functions 46 Forklift 30 First aiders training 32 Fire marshals training 65 Implementation of ISO 9001 40 TOTAL 840

40 41 water utilities corporation annual report 2013/14

Corporate Social Responsibility and Stakeholder Management 100 SCHOOL ADDRESSES DONE Water Conservation Campaign in schools

During the period under review, and Schools Programme MASCOTS guided by its Communication Strategy FOR WATER AND WASTEWATER USED TO which stratifies stakeholders with The Corporation hosted over 50 schools TEACH CHILDREN clearly defined levels of interaction by under its stakeholder engagement the Board, Executive Management programme. The students were taken and Management and the nature on dam and treatment plant and of information to be disseminated other WUC infrastructure tours, given Stakeholder Management and feedback received, WUC used lectures and allowed to explore the places and interact with staff in the Central to WUC’s core business different platforms to interact with its stakeholders. These range from different professions. The Corporation is targeted stakeholder public Kgotla meetings, workshops, conducted school visits to give water engagement. The segmentation briefing sessions, media conferences, talks, promote water conservation and the need to look after the environment of stakeholders according to publications, open house, social media and infrastructure tours, amongst so as to safeguard our water sources. their needs helps the Corporation others. The ever popular water mascot Thoti manage them better and address was used to educate and entertain small children on these water issues. their unique needs. A dipstick survey carried out during the year indicated a favourable response to conservation issues by young people than by adults.

42 PIC

School children touring a Water-Treatment Plant

Our Employees Corporate Social Responsibility

The Water Sector Reforms Programme The Corporation continued to build Various Corporate Social Responsibility brought together employees from sustainable relationships with its projects were also completed during the various water authorities bringing with stakeholders during the year. For the its year. These include a donation of 150 them different cultures and values customers WUC committed to achieving pairs of shoes to orphans in Letlhakeng, associated with working. Blending the customer service standards, quality a house to a destitute family in Kanye, these employees into one team with standards, stakeholder involvement in a photocopier and printing machine in common values has been a challenge relevant issues. Sefhare, amongst other Initiatives. for the Corporation. During the year, guided by its Communication Strategy, Guided by its Corporate Social The absorption of employees taken over various efforts to achieve this were Responsibility Policy the Corporation under the Water Sector Reforms Project done. Amongst other efforts a WUC implemented projects to assist It remain cotinued during the year, with targeted anthem was composed and the various socially sustainable. The Corporation programmes to manage the transition. area WUC office choirs competed in adopted a culture of non-discrimination, These included staff inductions, performing it and eventually the anthem inclusivity and fairness in all aspects workshops, sporting activities and was recorded. The anthem continues to of its business. The highly subsidised other social events. Management be used as one of the tools to unite staff water connection fees effected In July training, including coaching commenced and promote a seamless integration of 2012, regular stakeholder consultations during the period and will continue into staff from water authorities that were through various fora, the Health and the foreseeable future as the training taken over by WUC. The song is a healing Wellness Employee programme, is cascaded to other cadres in the and uniting tune which promotes the amongst other efforts all strove to Corporation. Corporation’s values with emphasis on realise this. meeting the needs of customers.

43 water utilities corporation annual report 2013/14

Safety Health Environment (SHE) [continued]

Catch them young - Thoti the Mascot teaching water conservation in schools

44 45 water utilities corporation annual report 2013/14

46 47 water utilities corporation annual report 2013/14

Water Utilities Corporation

(Incorporated in Botswana in terms of the Water Utilities Corporation Act of 1970 - Laws of Botswana Chapter 74:02)

BUSINESS The mandate for the Corporation is to provide potable water supply and wastewater services in the whole country. The mandate was expanded in accordance with the 5 year Water Sector Reforms project that was implemented in May 2009 and was completed in April 2013.

MEMBERS OF THE BOARD Matome T. Malema Chairman - Appointed 1 January 2014 Obolokile T. Obakeng Godfrey B. Molefe Rachel Nekati Zuma Chengeta Mercia B. Makgalemele John P. D. Phatshwe Appointed 1 December 2013 Galeitsiwe Ramokopane Appointed 1 December 2013 Noble Katse Appointed 1 December 2013 Nozipho A. Mabe Resigned 31 December 2013 Thari E. Ntshole Resigned 30 September 2013 Pharoah Mosupi Resigned 30 September 2013

EXECUTIVE DIRECTORS (as at 31 March 2014) Godfrey W Mudanga Chief Executive Officer Nginani Mbayi Deputy Chief Executive Officerr Taboka Muke Finance Director Lillian Mosimaneotsile Technical Services Director Harry B. Pheko Regional Operations Director South Matlhogonolo L. Mponang Human Resources and Administration Director Tsholofelo Bogosi Internal Audit Director Gaselemogwe Senai Infrastructure Director Meshack Balebetse Regional Operations Director North Enelys Shamakumba Corporation Secretary

REGISTERED OFFICE Water Utilities Corporation Head Office Sedibeng House Plot 17530, Luthuli Road Industrial Site Gaborone

INDEPENDENT AUDITORS Deloitte & Touche

48 INDEX TO THE Annual Financial Statements for the year ended 31 March 2014

Statement of Independent Auditor’s Statement of 50 Responsibility by the 51 Report 53 Comprehensive Income Members of the Board

Statement of Financial Statement of Changes Statement of Cash 54 Position 55 in Equity 56 Flows

Significant Accounting Notes to the Financial 57 Policies 65 Statements

The following statements are presented in compliance with the requirements of the Water Utilities Corporation Act (Cap. 74.02):-

49 water utilities corporation annual report 2013/14

Statement of Responsibility by the Members of the Board for the year ended 31 March 2014

The members of the Board are responsible for the preparation standards in ensuring the business is conducted in a manner and fair presentation of the annual financial statements of that in all reasonable circumstances is above reproach. The Water Utilities Corporation (“the Corporation”), comprising focus of risk management in the Corporation is on identifying, the statement of financial position as at 31 March 2014, and assessing, managing and monitoring all known forms of risk the statements of comprehensive income, changes in equity across the Corporation. While operating risk cannot be fully and cash flows for the year then ended, and the notes to the eliminated, the members of the Board endeavour to minimise financial statements, which include a summary of significant it by ensuring that appropriate infrastructure, controls, accounting policies and other explanatory notes, in accordance systems and ethical behaviour are applied and managed with International Financial Reporting Standards (“IFRS”) and within predetermined procedures and constraints. in the manner required by the Water Utilities Corporation Act (Chapter 74:02). The directors are of the opinion, based on the information and explanations given by management, that the system The members of the Board are required by the Water Utilities of internal control provides reasonable assurance that the Corporation Act (Chapter 74:02), to maintain adequate financial records may be relied on for the preparation of accounting records and are responsible for the content and the annual financial statements. However, any system of integrity of and related financial information included in this internal financial control can provide only reasonable, and not report. It is their responsibility to ensure that the annual absolute, assurance against material mis statement or loss. financial statements fairly present the state of affairs of the Corporation at the end of the financial year and the results The external auditors are responsible for independently of its operations and cash flows for the year then ended, reviewing and reporting on the Corporation’s financial in conformity with IFRS. The external auditors are engaged statements and their report is presented on pages 51 to 52. to express an independent opinion on the annual financial statements. Going Concern The members of the Board have made an assessment of The members of the Board are responsible for such internal the Corporation’s ability to continue as a going concern and controls as the Board determines is necessary to enable believe that continued support from the Government of the the preparation of financial statements that are free from Republic of Botswana and the revision of tariffs will ensure material misstatement, whether due to fraud or error. that the Corporation continues as a going concern in the future. The annual financial statements are prepared in accordance with IFRS and are based upon appropriate accounting policies Members of the Board’s approval of the annual financial consistently applied and supported by reasonable and statements prudent judgements and estimates. Against this background, the members of the Board accept The responsibilities of the members of the Board also include responsibility for the annual financial statements on pages maintaining adequate accounting records and an effective 53 to 82 which were approved on 24 September 2014 and system of risk management. signed on its behalf by:

The members of the Board acknowledge that they are ultimately responsible for the system of internal financial control established by the Corporation and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the Board Director...... sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the Corporation Director...... and all employees are required to maintain the highest ethical

50 PO Box 778 Deloitte & Touche Gaborone Assurance & Advisory Services Bitswana Chartered Accountants Deloitte House Plot 64518 Fairgrounds Gaborone Botswana

Tel: +267 395 1611 Fax: +267 397 3137 www.deloitte.com Independent Auditor’s Report for the year ended 31 March 2014

TO THE MINISTER OF MINERALS, ENERGY AND WATER to fraud or error. In making those risk assessments, the RESOURCES AND BOARD MEMBERS PURSUANT TO auditor considers internal control relevant to the entity’s SECTION 25 OF THE WATER UTILITIES CORPORATION ACT preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in (CHAPTER 74:02) the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Report on the Financial Statements An audit also includes evaluating the appropriateness of We have audited the accompanying financial statements of accounting policies used and the reasonableness of accounting Water Utilities Corporation, which comprise the statement of estimates made by management, as well as evaluating the financial position as at 31 March 2014, and the statements of overall presentation of the financial statements. comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting We believe that the audit evidence we have obtained is policies and other explanatory notes, as set out on pages 53 sufficient and appropriate to provide a basis for our audit to 82. opinion.

Directors’ Responsibility for the Financial Statements Opinion The Corporation’s directors are responsible for the preparation In our opinion, the financial statements give a true and fair and fair presentation of these financial statements in view of the financial position of Water Utilities Corporation as accordance with International Financial Reporting Standards at 31 March 2014, and its financial performance and its cash and for such internal control as the directors determine is flows for the year then ended in accordance with International necessary to enable the preparation of financial statements Financial Reporting Standards. that are free from material misstatement, whether due to fraud or error. Emphasis of Matters Without qualifying our opinion, we draw attention to the Auditor’s Responsibility following matters: Our responsibility is to express an opinion on these financial statements based on our audit. We conduct our audit in Going concern accordance with International Standards on Auditing. Those The Corporation has incurred a loss for the year of P346 559 standards require that we comply with ethical requirements 000 (2013: P191 062 0000). This condition indicates the and plan and perform the audit to obtain reasonable existence of a material uncertainty that may cast significant assurance about whether the financial statements are free doubt about the Corporation’s ability to continue as a going from material misstatement. concern. As indicated in Note 25 of these financial statements, the Government of the Republic of Botswana has committed An audit involves performing procedures to obtain audit to provide ongoing financial support in the future. evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due

National Executive: LL Bam Chief Executive AE Swiegers Chief Operating Officer GM Pinnock Audit DL Kennedy Risk Advisory NB Kader Tax TP Pillay Consulting K Black Clients & Industries JK Mazzocco Talent & Transformation CR Beukman Finance M Jordan Strategy S Gwala Special Projects TJ Brown Chairman of the Board MJ Comber Deputy Chairman of the Board Resident Partners: M Marinelli Senior Partner FC Els P Naik CV Ramatlapeng M Bardopoulos

A full list of partners and directors is available on request

Member of Deloitte Touche Tohmatsu Limited 51 Independent Auditor’s Report [continued] for the year ended 31 March 2014

Property without title deeds We draw attention to note 4 of the financial statements, which states that title to the land and buildings acquired by the Corporation from the Department of Water Affairs and the Ministry of Local Government under the Water Deloitte & Touche 24 September 2014 Sector Reforms Project has not yet been transferred to the Certified Auditors Gaborone Corporation. The Corporation anticipates the title to the assets to be transferred in the fullness of time. Practicing Member: P. Naik (19900296)

Supplementary information Without qualifying our opinion we report the following:

Report on Other Legal and Regulatory Requirements

In accordance with Section 25 of the Water Utilities Corporation Act (Chapter 74:02), we confirm that:

• The Corporation has kept proper books of account with which the financial statements are in agreement.

• We have received all the information and explanations necessary for the performance of our audit.

• The Corporation has complied with all the financial provisions of the Water Utilities Corporation Act (Chapter 74:02).

52 Statement of Comprehensive Income for the year ended 31 March 2014

Restated Notes 2014 2013 P’000 P’000

Revenue 948 061 790 778

Other income 25,297 10,683 Revenue grant amortisation 13 - 200,000 25,297 210,683

Operating expenses

Water treatment and distribution expenses (740,840 ) (663,569 ) Administration and other expenses (335,560 ) (293,631 ) Depreciation and amortisation (224,276 ) (184,790 ) Total operating expenses (1,300,676 ) (1,141,990 )

Operating deficit 1 (327,318 ) (140,529 )

Finance income 3 16,764 29,664 Finance costs 3 (50,467 ) (57,775 ) Deficit for the year (361,021 ) (168,640 )

Other comprehensive income/(loss)

Items that will not be reclassified subsequently to profit and loss:

Net actuarial gain/(loss) recognised on the defined benefit plan 14,462 (22,422

Total comprehensive loss for the year (346,559 ) (191,062 )



53 water utilities corporation annual report 2013/14

Statement of Financial Position for the year ended 31 March 2014

Notes 2014 2013 P’000 P’000

ASSETS

Non-current assets Property, plant and equipment 4 5 032 246 4 608 857 Intangible assets 5 8 559 11 404 Development expenditure 6 771 755 625 866 5 812 560 5 246 127 Current assets Inventories 7 39 545 33 498 Trade and other receivables 8 265 256 292 805 Cash and cash equivalents 10 173 575 428 415 478 376 754 718

Total assets 6 290 936 6 000 845

EQUITY AND LIABILITIES Capital and reserves Irredeemable capital 11 752 738 752 738 Government contribution - Water Sector Reforms 12 4 109 124 3 621 559 Revenue grant 13 1 188 - Capital grant - Emergency/drought projects 14 112 000 - Interest subsidy reserve 23 12 493 10 984 Retained earnings 448 146 796 214 5 435 689 5 181 495

Non-current liabilities Borrowings 15 480 494 515 036 Consumer deposits 23 163 21 821 Retirement benefit obligation 21 1 351 21 611 505 008 558 468

Current liabilities Borrowings 15 29 954 30 664 Trade and other payables 16 320 285 230 218 Dividend payable 17 - - 350 239 260 882

Total liabilities 855 247 819 350

Total equity and liabilities 6 290 936 6 000 845

54 Statement of Changes in Equity for the year ended 31 March 2014

Irredee- Notes mable Government Revenue Capital interest Retained capital contribution grant grant Reserve earnings Total P’000 P’000 P’000 P’000 P’000 P’000 P’000

Balance at 31 March 2012 752 738 3 336 653 - - 9 213 989 047 5 087 651

Government contributions received 12,13 - 284 906 200 000 - - - 484 906

Revenue grant amortisation 13 - - ( 200 000 ) - - - ( 200 000 )

Total comprehensive loss for the year 28 - - - - - ( 191 062 ) ( 191 062 )

Transfer to interest subsidy reserve 23 - - - - 1 771 ( 1 771 ) -

Balance at 31 March 2013 752 738 3 621 559 - - 10 984 796 214 5 181 495

Government contributions received 12,13,14 - 487 565 1 188 112 000 - - 600 753

Total comprehensive loss for the year - - - - - (346 559 ) (346 559 )

Transfer to interest subsidy reserve 22 - - - - 1 509 (1 509 ) - Balance at 31 March 2014 752 738 4 109 124 1 188 112 000 12 493 448 146 5 435 689

55 water utilities corporation annual report 2013/14

Statement of Cash Flows for the year ended 31 March 2014

Notes 2014 2013 P’000 P’000

Cash flows from/(used in) operating activities 18 21 636 (297 981 )

Cash flows from/(used in) investing activities Development expenditure incurred 6 (260 916 ) (115 692 ) Proceeds on sale of property, plant and equipment 1 596 498 Purchase of property, plant and equipment and intangible assets 4,5 (46 496 ) (51 761 ) Interest received 3 16 764 29 664 Net cash used in investing activities (289 052 ) (137 291 )

Cash flows from/(used in) financing activities Interest paid 3 (50 467 ) (57 775 ) Repayment of long-term borrowings 15 (33 473 ) (31 968 ) Increase in consumer deposits 1 342 888 (Decrease)/increase in retirement benefit liabilty (20 260 ) 17 691 Cash grants received from Government - Revenue grant 13 1 188 200 000 Cash grants received from Government - Capital grant 14 112 000 - Assets transferred in terms of Water Sector Reforms 2 246 4 187 Net cash from financing activities 12 576 133 023

Net decrease in cash and cash equivalents (254 840 ) (302 249 )

Cash and cash equivalents at beginning of the year 428 415 730 664 Cash and cash equivalents at end of the year 10 173 575 428 415

56 Significant Accounting Policies for the year ended 31 March 2014

1. General Information New/Revised International Effective date Financial Reporting Standard The Corporation has been established under the Water Utilities Corporation Act (CAP 74:02). The Corporation IAS 27 - Consolidated and Separate 1 January 2013 provides water supply and waste water services Financial Statements - Reissued as throughout Botswana. In accordance with the 5 year IAS 27 Separate Financial Statements Water Sector Reforms Project which was completed (as amended in 2011) in April 2013, the Corporation took over potable water

supply services and wastewater services in the whole IAS 28 - Investments in Associates 1 January 2013 country. - Reissued as IAS 28 Investments in Associates and Joint Ventures 2. Summary of principal accounting policies (as amended in 2011) The principal accounting policies applied by the Corporation in the preparation of these financial The above new and revised standards were adopted statements are set out below. These policies have been during the year ended 31 March 2014. consistently applied to all the years presented, unless otherwise stated. Adoption of these standards and interpretations have not had any impact on the financial statements of the 2.1 Basis of preparation Corporation, except for IAS 19 - Employees Benefits: Post-Employment and Termination Benefits Projects The financial statements of the Corporation have been (note 28) and additional disclosure requirements of prepared in accordance with the International Financial IFRS 13 - Fair Value Measurement (note 4). Reporting Standards (IFRS) and the requirements of the Water Utilities Corporation Act (CAP 74:02). The b) Standards and interpretations in issue but financial statements have been prepared under the not yet effective historical cost convention with the exception of certain property, plant and equipment and are presented in Pula At the date of authorisation of these financial statements, (P). Historical cost is generally based on the fair value of the following standards and interpretation were issued the consideration given in exchange of the assets. but not yet effective: Adoption of new and revised standards New/Revised International Effective date Financial Reporting Standard a) Standards adopted IFRS 7 - Financial Instruments: 1 January 2015 New/Revised International Effective date Disclosures (Government loans) Financial Reporting Standard

IFRS 7 - Financial Instruments: 1 January 2015 IFRS 10 - Consolidated Financial 1 January 2013 Disclosures (initial application Statements of IFRS 9) IFRS 11 - Joint Arrangements 1 January 2013 IFRS 9 - Financial Instruments : 1 January 2015 IFRS 12 - Disclosure of Interests 1 January 2013 Classification and measurement in Other Entities IFRS 9 - Financial Instruments : 1 January 2015 IFRS 13 - Fair Value Measurement 1 January 2013 Financial liabilities and derecognition

IAS 19 - Employees Benefits: 1 January 2013 Post-Employment and Termination Benefits Projects

57 water utilities corporation annual report 2013/14

Significant Accounting Policies [continued] for the year ended 31 March 2014

2.1 Basis of preparation [continued] b) Standards and interpretations in issue but not yet effective [continued]

New/Revised International Effective date 2.2 Property, plant and equipment Financial Reporting Standard Property, plant and equipment comprises mainly land, dams and buildings, distribution systems, plant IFRS 9 - Financial Instruments : 1 January 2015 and machinery, vehicles and equipment. All property, Disclosure (amendment to transition) plant and equipment purchased by the Corporation is stated at historical cost less depreciation. Historical cost IFRS 10 - Consolidated Financial 1 July 2014 includes expenditure that is directly attributable to the Statements acquisition of the items. IFRS 11 - Joint Arrangements 1 January 2016 Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as IFRS 12 - Disclosure of Interests 1 January 2014 appropriate, only when it is probable that future in other Entities economic benefits associated with the item will flow to the Corporation and the cost of the item can be IFRS 14 - Regulatory Deferral 1 January 2016 measured reliably. The carrying amount of the replaced Accounts part is derecognised. All other repairs and maintenance are charged to the income statement during the IFRS 15 - Revenue from Contracts 1 January 2017 financial period in which they are incurred. with Customers Property plant and equipment transferred to the IAS 16 (amended) - Property, Plant 1 January 2016 Corporation in terms of the Water Sector Reforms and Equipment is accounted for at valuation on the depreciated replacement cost basis. IAS 19 - Defined Benefit Plans: 1 July 2014

Employee Contributions Freehold land is not depreciated and leasehold land is (amendments to IAS 19) depreciated over the lease period. Depreciation on other assets is calculated on the straight-line method to write IAS 32 - Financial Instrument: 1 January 2014 off the depreciable cost (acquisition cost less residual Amendment (offsetting of assets value) of each asset over their estimated useful lives (in and liabilities) years) as follows:

IAS 36 - Recoverable Amount 1 January 2014 Leasehold land, dams and buildings 25-99 Disclosures for Non-Financial Assets Distribution systems, plant and machinery 5-40 Vehicles and equipment 5-15 IAS 39 - Novation of Derivatives 1 January 2014 and Continuation of Hedge Depreciation is recognised in the statement of Accounting comprehensive income. IFRIC 21 - Levies (recognition of 1 January 2014 The assets’ residual values and useful lives are reviewed, liability for levies imposed by a and adjusted as appropriate, at each statement of Government in accordance with financial position date. An asset’s carrying amount is IAS 37 Provisions, Contingent written down immediately to its recoverable amount if Liabilities the asset’s carrying amount is greater than its estimated recoverable amount. An impairment loss is recognised The Corporation will evaluate the effect of all the new for the amount by which the carrying amount of the standards, amendments and interpretations that asset exceeds its recoverable amount which is the are in issue for adoption in the applicable periods. higher of an asset’s net selling price and value in use.

58 Significant Accounting Policies [continued] for the year ended 31 March 2014

2.2 Property, plant and equipment [continued]

For the purposes of assessing impairment, assets Computer software development costs recognised as are grouped at the lowest levels for which there are intangible assets are amortised using the straight-line separately identifiable cash flows. Impairment losses method over their useful lives, not exceeding a period of are recognised immediately in profit or loss. 5 years. Amortisation is recognised in the statement of comprehensive income. Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are 2.4 Impairment of non financial assets recognised within ‘Other Income’ in the statement of Assets that have an indefinite useful life are not subject comprehensive income. to amortisation and are tested annually for impairment. Assets that are subject to amortisation or depreciation Interest costs on borrowings obtained to finance are reviewed for impairment whenever events or the construction of property, plant and equipment changes in circumstances indicate that the carrying are capitalised during the period of time that is amount may not be recoverable. An impairment required to complete and prepare the property for its loss is recognised in profit or loss for the amount by intended use. Other borrowing costs are expensed. which the carrying amount of the asset exceeds its Development expenditure is depreciated from the date recoverable amount. The recoverable amount is the of commissioning. higher of an asset’s fair value less costs to sell and value in use. For purposes of assessing impairment, The amount of the cost of property, plant and assets are grouped at the lowest levels for which there equipment financed by Government is set off against are separately identifiable cash flows (cash generating the advances from government on these projects and units). Non financial assets other than goodwill that depreciation is charged on the net amount. The amount suffered impairment are reviewed for possible reversal of the cost of property, plant and equipment financed by of impairment at each reporting date. private consumers is capitalised and depreciated over the expected useful lives of these assets. The amount Where an impairment loss subsequently reverses, the received from consumers is recognised as deferred carrying amount of the asset (or cash-generating unit) income and amortised over the expected useful life of is increased to the revised estimate of its recoverable the related assets. amount, but so that the increased carrying amount does

not exceed the carrying amount that would have been 2.3 Computer software development costs determined had no impairment loss been recognised Acquired computer software are capitalised on the for the asset (or cash-generating unit) in prior years. A basis of the costs incurred to acquire and bring to use reversal of an impairment loss is recognised immediately the specific software. These costs are amortised over in profit or loss. their estimated useful lives (five years). 2.5 Leases Costs associated with developing or maintaining Leases of property, plant and equipment where the computer software programmes are recognised as an Corporation has substantially all risks and rewards of expense as incurred. ownership are classified as finance leases. Finance lease are capitalised at the inception of the lease at the However, costs that are directly associated with lower of the fair value of the asset or the present value identifiable and unique software products controlled by of the minimum lease payments. Each lease payment the Corporation and have probable economic benefit is allocated between the liability and finance charges exceeding the cost beyond one year, are recognised as so as to achieve a constant rate on the finance balance intangible assets. Direct costs include staff costs of the outstanding. The corresponding rental obligations, software development team and an appropriate portion net of finance charges, are included in other long term of relevant overheads. payables.

59 water utilities corporation annual report 2013/14

Significant Accounting Policies [continued] for the year ended 31 March 2014

2.5 Leases [continued]

The interest element of the finance cost is charged to A provision for impairment of trade receivables is the statement of comprehensive income over the lease established when there is objective evidence that the period so as to produce a constant periodic rate of Corporation will not be able to collect all amounts interest on the remaining balance of the liability for each due according to the original terms of receivables. period. The property, plant and equipment acquired Significant financial difficulties of the debtor, under finance leases are depreciated over the shorter of probability that the debtor will enter bankruptcy or the useful life of the asset or the lease term. financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered Leases in which a significant portion of the risks and indicators that the trade receivable is impaired. rewards of ownership are retained by the lessor are classified as operating leases. Payments under The amount of the provision is the difference operating leases (net of any incentives received from the between the carrying amount and the present value lessor) are charged to the statement of comprehensive of estimated future cash flows, discounted at the income on a straight line basis over the period of the original effective interest rate. The carrying amount of lease. the asset is reduced through the use of an allowable account, and the amount of the loss is recognised in the statement of comprehensive income within 2.6 Dividend distribution ‘administration and other expenses’. When a trade Dividend distribution to the Corporation’s shareholders receivable is uncollectible, it is written off against the is recognised as a liability in the Corporation’s financial allowable account for trade receivables. Subsequent statements in the period in which dividends are recoveries of the amounts previously written off are approved by the Corporation’s shareholders. credited against ‘administration and other expenses’ in the statement of comprehensive income. 2.7 Inventories 2.10 Foreign currency translation Inventories are stated at the lower of cost or net realisable value. Cost is determined using the weighted Functional and presentation currency average method. Cost includes the purchase price and Items included in the financial statements are all of the direct costs incurred in bringing the products to measured using the currency of the primary economic their present location and condition. Provision is made environment in which the entity operates (the for obsolete, slow moving and defective inventories. functional currency). The financial statements are presented in Botswana Pula, which is the Corporation’s 2.8 Revenue recognition functional and presentation currency. Revenue comprises invoiced value of water sales to customers, customers’ new connection and Transactions and Balances reconnection fees net of value added tax. Revenue from Foreign currency transactions are translated into the sale of water is recognised when consumers’ water functional currency using the exchange rates prevailing consumption has been metered and the consumer at the dates of the transactions. Foreign exchange accounts billed on an accrual basis. gains and losses resulting from the settlement of such transactions and from the translation at year- Connection and reconnection fees are recognised when end exchange rates of monetary assets and liabilities service is provided. denominated in foreign currencies are recognised in the statement of comprehensive income, except when Interest income is recognised on a time proportion basis deferred in equity as qualifying cash flow hedges and using the effective interest method. qualifying net investment hedges.

2.9 Trade receivables 2.11 Employee benefits Trade receivables are recognised initially at fair value and Payments to defined contribution retirement benefit plans subsequently measured at amortised cost using the are recognised as an expense when employees have effective interest method, less provision for impairment. rendered service entitling them to the contributions.

60 Significant Accounting Policies [continued] for the year ended 31 March 2014

2.11 Employee benefits [continued]

For defined benefit retirement benefit plans, the cost of borrowings at rates below the ruling market rates are providing benefits is determined using the projected originally recorded at amortised cost, determined based unit credit method, with actuarial valuations being on the effective yield method. Under this method, the carried out at the end of each annual reporting period. fair value of the borrowing is measured as the present Remeasurement, comprising actuarial gains and value of anticipated future cash flows discounted at an losses, the effect of the changes to the asset ceiling applicable interest rate. (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of The difference between the borrowing received and financial position with a charge or credit recognised the amortised cost is recognised as income when the in other comprehensive income in the period in which borrowing is received, and unwinds to interest expense they occur. Remeasurement recognised in other over the period of the loan based on the effective comprehensive income is reflected immediately in interest rate yield curve. retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss 2.13 Assets financed by consumer capital contributions in the period of a plan amendment. Net interest is Contributions by Government in respect of capital works calculated by applying the discount rate at the beginning on extensions to the reticulation systems are set off of the period to the net defined benefit liability or asset. against the related expenditure upon completion of the Defined benefit costs are categorised as follows: work. While such work is in progress, the costs incurred • Service cost (including current service cost, past are carried forward under development expenditure and service cost, as well as gains and losses on the respective contributions from the government are curtailments and settlements). shown as a liability. The contributions by consumers • Net interest expense or income. other than government are classified as deferred • Remeasurement. income and amortised over the expected useful lives of the related assets. The Corporation presents the first two components of defined benefit costs in the statement of comprehensive 2.14 Provisions income in the line item administration and other expenses. Curtailment gains and losses are accounted Provisions are recognised when the Corporation has a for as past service costs. present legal or constructive obligation as a result of past events; it is probable that an outflow of resources The retirement benefit obligation recognised in the will be required to settle the obligation and a reliable statement of financial position represents the actual estimate of the amount can be made. Employee deficit or surplus in the Corporation’s defined benefit entitlements to annual leave and contractual gratuities plans. Any surplus resulting from this calculation is are recognised when they accrue to employees as limited to the present value of any economic benefits a result of services rendered by employees up to the available in the form of refunds from the plans or statement of financial position date. Where there are reductions in future contributions to the plans. A liability a number of similar obligations, the likelihood that an for a termination benefit is recognised at the earlier of outflow will be required in settlement is determined when the Corporation can no longer withdraw the offer by considering the class of obligations as a whole. of the termination benefit and when the Corporation A provision is recognised even if the likelihood of an recognises any related restructuring costs. outflow with respect to any one item included in the same class of obligations may be small. 2.12 Borrowings Provisions are measured at the present value of the Borrowings are recognised initially at proceeds received, expenditures expected to be required to settle the net of transaction costs incurred. Borrowings are obligation using a pre-tax rate that reflects the current subsequently stated at amortised cost using the market assessments of the time value of money and effective yield method. the risks specific to the obligation. The increase in the provision due to passage of time is recognised as an Borrowings obtained from the Debt Participation interest expense. Capital Funding Limited (DPCFL) and Government 61 water utilities corporation annual report 2013/14

Significant Accounting Policies [continued] for the year ended 31 March 2014

2.15 Financial Instruments Initial recognition The Corporation classifies financial instruments, or their For ‘Loans and receivables’ objective evidence of component parts, on initial recognition as a financial impairment could include: asset, a financial liability or an equity instrument in - significant financial difficulty of the issuer or accordance with the substance of the contractual counterparty; or arrangement. - default or delinquency in interest or principal payments; or Financial assets and financial liabilities are recognised on - it becoming probable that the consumer will enter the Corporation’s Statement of Financial Position when bankruptcy or financial re-organisation. the Corporation becomes a party to the contractual provisions of the instrument. For certain categories of loans and receivables, such as trade receivables, assets that are assessed not to (a) Financial assets be impaired individually are subsequently assessed for Loans and receivables impairment on a collective basis. Objective evidence Trade receivables, loans and other receivables that have of impairment for a portfolio of receivables could fixed or determinable payments that are not quoted in include the Corporation’s past experience of collecting an active market are classified as loans and receivables. payments, and increase in the number of delayed Loans and receivables are measured at amortised cost payments in the portfolio past the average credit period using the effective interest method, less any impairment. of 30 days, as well as observable changes in national or Interest income is recognised by applying the effective local economic conditions that correlate with default on interest rate, except for short-term receivables when receivables. the recognition of interest would be immaterial. For financial assets carried at amortised cost, the Cash and cash equivalents amount of the impairment is the difference between Cash and cash equivalents are carried in the statement the asset’s carrying amount and the present value of of financial position at cost. For the purposes of the estimated future cash flows, discounted at the financial cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at current and call asset’s original effective interest. accounts with banks and other short term highly liquid investments net of bank overdrafts. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with Effective interest method the exception of trade receivables, where the carrying The effective interest method is a method of calculating amount is reduced through the use of an allowance the amortised cost of a financial asset and of allocating account. When a trade receivable is considered interest income over the relevant period. The effective uncollectible, it is written off against the allowance interest rate is the rate that exactly discounts estimated account. Subsequent recoveries of amounts previously future cash receipts (including all cash paid or received written off are credited against the allowance account. that form an integral part of the effective interest rate, Changes in the carrying amount of the allowance transaction costs and other premiums or discounts) account are recognised in profit or loss. through the expected life of the financial asset, or, where appropriate, a shorter period. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related Impairment of financial assets objectively to an event occurring after the impairment ‘Loans and receivables’ are assessed for indicator of was recognised, the previously recognised impairment at each statement of financial date. Financial impairment loss is reversed through profit or loss to assets are impaired where there is objective evidence the extent that the carrying amount of the investment that, as a result of one or more events that occurred at the date the impairment is reversed does not exceed after the initial recognition of the financial asset, the what the amortised cost would have been had the estimated future cash flows of the investment have impairment not been recognised. been impacted.

62 Significant Accounting Policies [continued] for the year ended 31 March 2014

2.15 Financial Instruments [continued] (a) Financial assets [continued]

De-recognition of financial assets De-recognition of financial liabilities The Corporation de-recognises a financial asset only The Corporation de-recognises financial liabilities when, when the contractual right to the cash flows from and only when, the Corporation’s obligations are the asset expire; or it transfers the financial asset discharged, cancelled, or they expire. substantially all the risks and rewards of ownership of the asset to another entity. If the Corporation 2.16 Trade payables neither transfers nor retains substantially all the risks Trade payables are recognised initially at fair value and and rewards of ownership and continues to control subsequently measured at amortised cost using the the transferred asset, the Corporation recognises its effective interest method. retained interest in the asset and an associated liability for amounts it may have to pay. If the Corporation retains 2.17 Related party transactions substantially all the risks and rewards of ownership of a Related parties comprise the Government of Botswana, transferred financial asset, the Corporation continues Executive Management and Members of the Board. to recognise the financial asset and also recognises a Transactions with related parties are in the normal collateralised borrowing for the proceeds received. course of business and are conducted on an arm’s length basis. (b) Financial liabilities and equity instruments Classification as debt or equity 2.18 Government grants Debt and equity instruments are classified as either Government grants are not recognised until there is financial liabilities or as equity in accordance with the reasonable assurance that the Corporation will comply substance of the contractual arrangement. with conditions attaching to them and that the grants will be received. Equity instruments An equity instrument is any contract that evidences Government grants whose primary condition is that the a residual interest in the assets of an entity after Corporation should purchase, construct or otherwise deducting all of its liabilities acquire non-current assets are recognised as deferred revenue in the statement of financial position and Cash contribution received from the Government of transferred to profit or loss on a systematic and rational Botswana are recorded at the proceeds received and basis over the useful lives of related assets. assets transferred in terms of the Water Sector Reforms are recorded at fair value at transfer date. The fair value Government grants are recognised as revenue over the of property, plant and equipment is determined on the periods necessary to match them with the costs for depreciated replacement cost basis. which they are intended to compensate, on a systematic basis. Government grants that are receivable as Financial liabilities compensation for expenses or losses already incurred or for the purpose of giving immediate financial support Other financial liabilities to the Corporation with no future related costs are Other financial liabilities, including borrowings, are recognised in profit or loss in the period in which they initially measured at fair value, net of transaction costs. become receivable. Financial liabilities are subsequently measured at amortised cost using the effective interest method, with 2.19 Critical accounting estimates and assumptions interest expense recognised on an effective yield basis. The preparation of financial statements in conformity The effective interest method is a method of calculating with IFRS requires the use of certain critical accounting the amortised cost of a financial liability and of allocating estimates. It also requires management to exercise its interest expense over the relevant period. The effective judgment in the process of applying the Corporation’s interest rate is the rate that exactly discounts estimated accounting policies. These areas involving a higher future cash payments through the expected life of the degree of judgment or complexity, or areas where financial liability, or, where appropriate, a shorter period. assumptions and estimates are significant to the Corporation’s financial statements are disclosed. 63 water utilities corporation annual report 2013/14

Significant Accounting Policies [continued] for the year ended 31 March 2014

Estimates and judgments are continually evaluated e) Fair value of financial instruments based on historical experience and other factors, Fair value is the price that would be received to sell an including expectations of events that are believed to be asset or paid to transfer a liability in an orderly transaction reasonable under the circumstances. between market participants at the measurement date, regardless of whether that price is directly observable a) Determination of useful lives and residual values of or estimated using another valuation technique. In property, plant and equipment estimating the fair value of an asset or a liability, the The Corporation tests annually whether, the useful life Corporation takes into account the characteristics of and residual value estimates are appropriate and in the asset or liability if the market participants would accordance with its accounting policy. take those characteristics into account when pricing that asset or liability at the measurement date. b) Impairment loss on trade receivables Fair value measurement and/or disclosure purposes in The Corporation reviews its debtors to assess these financial statements is determined on such basis, impairment on a monthly basis. In determining whether except for leasing transactions within the scope of IAS an impairment loss should be recorded in the statement 17, and measurements that have some similarities to of comprehensive income, the Corporation makes fair value but are not fair value, such as net realisable judgments as to whether there is any observable value in IAS 2 or value in use in IAS 36. data indicating that there is a measurable decrease in estimated cash flows from a portfolio of debtors. In addition, for financial reporting purposes, fair value Management uses estimates based on historical measurements are categorised into level 1, 2 or 3 loss experience of assets. The assumptions used for based on the degree to which the inputs to the fair estimating the amount and timing of cash flows are value measurements are observable and significance of reviewed regularly to reduce any differences between the inputs to the fair value measurements in its entirety loss estimates and actual loss experience. which are described as follows:

c) Retirement benefit asset Level 1: Inputs are quoted prices (unadjusted) in The amounts recognised in the statement of financial active market for identical assets or liabilities position have been determined based on a valuation that the Corporation can access at the performed at 31 March 2014 by independent actuaries measurement date; using the projected unit credit method. The assumptions Level 2: Inputs are inputs other than quoted prices and methodology used are consistent with IAS 19. The included within level 1 that are observable for pension costs and statement of financial position items the asset or liability, either directly (prices) or are dependent on the assumptions made for future indirectly (that is, derived from prices); and experience. IAS 19 sets out how these assumptions should be set. These assumptions are shown in note 21 Level 3: Inputs for are unobservable inputs for the to the financial statements. asset or liability.

d) Provision for slow moving or obsolete inventory Management’s estimate of slow moving or obsolete inventory is based on the movement of inventory and general condition of inventory items as the Corporation does not hold inventory for resale, but for use in its operations. The provision for obsolescence is based on the physical review of inventory items by management.

64 Notes to the Financial Statements for the year ended 31 March 2014

2014 2013 P’000 P’000

1. Operating deficit The following items have been included in arriving at the operating deficit:

Auditor`s remuneration - current year 2 050 1 950 - prior year 1 045 460 Depreciation of property, plant and equipment (note 4) 221 161 181 581 Amortisation of intangible assets (note 5) 3 115 3 209 Increase in accounts receivable impairment provision 2 948 21 584 Board members’ fees (note 22) 249 216 Operating lease rentals - property 8 018 6 732 Remuneration - executive management 9 670 9 310 Foreign exchange gains (4 241 ) (3 182)

2. Staff Costs Salaries and wages 586 169 547 331 Pension costs - defined benefit scheme (note 21) 1 222 2 671 - defined contribution scheme 40 697 44 883 Terminal benefits 2 766 2 705 Medical aid 32 730 23 813 Other (leave travel concession, recruitment) 2 456 3 775

3. Finance income/costs Finance income Interest on deposits and short term investments 16 764 29 664 Foreign exchange transaction gains - - 16 764 29 664 Finance costs - Government of Botswana loans 7 663 11 454 - DPCFL borrowings 3 417 4 231 - foreign bank loans 2 082 3 462 - bank overdraft 3 6 - DMTN Bond 42 498 42 498 Foreign exchange transaction gains (5 196 ) (3 876) 50 467 57 775

65 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

Land, dams Distribution Vehicles and systems, plant and buildings and machinery equipment Total P’000 P’000 P’000 P’000

4. Property, plant and equipment COST OR VALUATION Balance as at 1 April 2012 1 582 857 3 604 124 205 299 5 392 280 Additions 2 285 6 489 42 003 50 777 Transfer from development expenditure (note 6) 1 993 21 350 4 732 28 075 Acquired in terms of Water Sector Reforms (note 12) 76 419 172 227 32 073 280 719 Disposals - - ( 800 ) (800 ) Balance as at 31 March 2013 1 663 554 3 804 190 283 307 5 751 051 Additions 7 919 4 958 33 349 46 226 Transfer from development expenditure (note 6) 67 429 42 871 4 727 115 027 Acquired in terms of Water Sector Reforms (note 12) 132 604 357 254 7 786 497 644 Grant adjustment - - ( 12 325 ) (12 325 ) Disposals - - ( 3 678 ) (3 678 ) Balance at 31 March 2014 1 871 506 4 209 273 313 166 6 393 945

ACCUMULATED DEPRECIATION Balance at 1 April 2012 245 539 651 729 63 981 961 249 Depreciation charge 56 552 92 399 32 630 181 581 Disposals - - ( 636 ) (636) Balance at 31 March 2013 302 091 744 128 9 5 975 1 142 194 Depreciation charge 63 962 122 091 35 108 221 161 Disposals - - ( 1 656 ) (1 656 ) Balance at 31 March 2014 366 053 866 219 129 427 1 361 699

Carrying amount at 31 March 2013 1 361 463 3 060 062 187 332 4 608 857 Carrying amount at 31 March 2014 1 505 453 3 343 054 183 739 5 032 246

In terms of the Water Sector Reforms the Corporation acquired property, plant and equipment and other assets from the Department of Water Affairs and Ministry of Local Government.

The value of the land, dams, buildings, distribution systems, plant, machinery, vehicles and equipment includes assets relating to Phase I to VI of the Water Sector Reforms transferred to the Corporation between May 2010 and 31 March 2014. These assets were independently valued by professionally qualified valuers namely CB RealReach, who are members of the Real Estate Institute of Botswana.

The fair value of land was determined based on the open market value approach that reflects recent transaction prices of similar transactions. The fair values of dams, buildings, distribution systems, plant, machinery, vehicles and equipmen assets was determined using the replacement cost approach which reflects the cost to the market participant to construct assets of a comparable utility and age, adjusted for obsolescence.

66 Notes to the Financial Statements [continued] for the year ended 31 March 2014

Level 1 Level 2 Level 3 Total P’000 P’000 P’000 P’000

4. Property, plant and equipment [continued] Details of the Corporation’s land, dams, buildings, distribution systems, plant, machinery, vehicles and equipment and information about fair values as at 31 March 2014 is as follows:

Land, dams and buildings - - 1 292 621 1 292 621 Distribution systems, plant and machinery - - 1 852 543 1 852 543 Vehicles and equipment - - 94 565 94 565

The title to all the land and buildings taken over under the Water Sector Reforms has not yet been transferred to the Corporation. The Corporation anticipates the title to the assets to be transferred in the fullness of time.

2014 2013 P’000 P’000

5. Intangible assets Computer software development costs

COST Balance at beginning of the year 26 257 25 273 Additions 270 984 Balance at end of the year 26 527 26 257

AMORTISATION Balance at beginning of the year 14 853 11 644 Amortisation 3 115 3 209 Balance at end of the year 17 968 14 853

Carrying amount at 31 March 2014 8 559 11 404

6. Development expenditure Balance at beginning of the year 625 866 538 249 Contract costs incurred during the year 260 916 115 692 Contract costs capitalised during the year (note 4) (115 027 ) (28 075) Balance at end of the year 771 755 625 866

67 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

7. Inventories Chemicals 431 980 Spares and consumables 40 344 32 928 Provision for obsolete inventories (1 230 ) (410 ) 39 545 33 498

Movement in the provision for obsolete inventories

Balance at beginning of the year 410 279 Allowance made during the year 820 131 Balance at end of the year 1 230 410

8. Trade and other receivables Trade receivables 402 690 426 146 Less provision for impairment of receivables (157 576 ) (151 112 ) 245 114 275 034 Other receivables 20 142 17 771 265 256 292 805

All receivables were reviewed for impairment. As at 31 March 2014, trade receivables of P 164 533 000 (2013: P192 748 000) were past due but not impaired. The age analysis of these trade receivables is as follows:

Up to 3 months 134 228 133 605 3 - 6 months 30 305 59 143 164 533 192 748

As at 31 March 2014, trade receivables of P157 576 000 (2013: P151 112 000) were impaired and provided for. The movements on the provision for impairment of trade receivables are as follows:

Balance at beginning of the year 151 112 124 489 Increase in impairment provision - statement of comprehensive income 2 948 21 584 Net increase in impairment provision - grant account (note 12) 3 516 5 039 Balance at end of the year 157 576 151 112

The raising and release of provision for impaired receivables have been included in the ‘trade receivables –impairment charge for bad and doubtful debts’ in the statement of comprehensive income. Amounts charged to the allowable account are generally written off, when there is no expectation of recovering additional cash.

68 Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

8. Trade and other receivables [continued] The other classes within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Corporation does not hold any collateral as security except for connection deposits.

Except for the total amount owed by the Government of the Republic of Botswana (note 22), there are no individual customers with a balance representing 5% or more of the total receivable balance as at year end.

9. Analysis of financial instruments Financial instruments by category Receivables Trade and other receivables 261 228 292 805 Cash and cash equivalents 173 575 428 415 434 803 721 220 Other financial liabilities Borrowings 510 448 545 700 Trade and other payables 244 596 172 577 755 044 718 277 There were no liabilities at fair value through the profit and loss, derivatives used for hedging, or available-for-sale financial instruments as at year end.

10. Cash and cash equivalents Cash and cash equivalents comprise: Interest rate Current and call accounts 86 235 (4 244)

Short-term investments - Pula 4.50% 51 226 157 604 - Rand 5.40% 21 104 45 133 - US dollar 2.00% 15 010 16 604

Money Market Fund - 213 318 173 575 428 415

69 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

10. Cash and cash equivalents [continued]

Comprising: - Pula 137 461 366 678 - Rand 21 104 45 133 - US dollar 15 010 16 604 173 575 428 415

Cash and cash equivalents includes an amount of P12.5 million (2013: P11.0 million) relating to EIB interest subsidy reserve, the use of which is restricted to “Water Sector Building” projects as set out in note 23.

11. Irredeemable capital Balance at beginning and end of the year 752 738 752 738

12. Government contribution - Water Sector Reforms Balance at beginning of the year 3 621 559 3 336 653

Received during the year: Property, plant and equipment (note 4) 497 644 280 719 Other assets 5 762 9 226 Grant adjustment (12 325 ) - Provision for bad debts (3 516 ) (5 039 ) 487 565 284 906

Balance at end of the year 4 109 124 3 621 559

13. Revenue grant Balance at beginning of the year - - Cash grant received during the year 1 188 200 000 Amortisation - (200 000 ) Balance at end of the year 1 188 -

14. Capital grant - Emergency/drought projects Balance at the beginning of the year - - Received during the year 112 000 - Balance at the end of year 112 000 -

Capital grant - Emergency/drought projects is made up of funds received from the Government of the Republic of Botswana to fund emergency or drought related projects aimed at improving water supply in the country. Revenue from amortisation of the grant will be recognised over the periods necessary to match revenue with the depreciation costs for the constructed assets, on a systematic basis.

70 Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

15. Borrowings Current borrowings

Foreign borrowings 6 832 9 969 Government borrowings 19 713 17 218 DPCFL borrowings 3 409 3 477 29 954 30 664 Non current borrowings

Foreign borrowings 54 585 65 941 Government borrowings 22 571 42 282 DPCFL borrowings 3 338 6 813 DMTN Bond 400 000 400 000 480 494 515 036

Total Borrowings 510 448 545 700

Foreign borrowings are secured by guarantees issued by Government. Government borrowings and Debt Participation and Capital Funding Limited (DPCFL) borrowings are unsecured. The Domestic Medium Term Note (DMTN) Bond is unsecured.

Maturity of non current borrowings

Between 1 and 2 years 13 287 14 145 Between 2 and 5 years 277 487 81 455 Over 5 years 189 720 419 436 480 494 515 036

Foreign borrowings Denomination Loan 38 EIB JPY - 1 422 USD - 289 Loan 45 EIB ZAR 71 716 79 684

71 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

Interest Adjustments Repaid % rates of Period of Balance at unwinding for currency during 31 March Loan interest p.a. repayment 1 April 2013 for the year variations the year 2014 Number P’000 P’000 P’000 P’000 P’000

15. Borrowings [continued]

Foreign Loans direct to the Corporation

38-EIB 3 1998-2013 2 563 - 18 (2 581 ) - 45-EIB 8 -12 2008-2023 73 347 - (5 214) (6 716 ) 61 417 75 910 - (5 196 ) (9 297 ) 61 417

Foreign loans on-lent by Government

42-EIB 8 1997-2022 59 500 2 907 - (20 123 ) 42 284 59 500 2 907 - (20 123 ) 42 284

DPCFL Loans

35 7.5 1992-2014 1 777 98 - (1 240 ) 635 36 8 1993-2015 3 356 192 - (1 390 ) 2 158 37 9.5 1993-2016 5 157 220 - (1 423 ) 3 954 10 290 510 - (4 053 ) 6 747

DMTN Bond

WUC001 10.65 2008-2018 195 000 - - - 195 000 WUC002 10.6 2008-2026 205 000 - - - 205 000 400 000 - - - 400 000

TOTAL LOANS 545 700 3 417 (5 196) (33 473 ) 510 448

72 Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

16. Trade and other payables Trade creditors 164 477 155 873 Interest accrued on borrowings 12 363 12 933 Other payables and accruals 143 445 61 412 320 285 230 218

17. Dividend payable Section 19 of the Water Utilities Corporation Act (Chapter 74:02), requires the Corporation to pay annually, a dividend of 25% of the surplus for the year, excluding revenue grant. No dividend has been declared for the year ended 31 March 2014 (2013: PNil) as the Corporation reported a deficit for the year of P346 559 000 (2013: P191 062 000).

18. Cash flows from/(used in) operating activities

Total loss and total comprehensive loss for the year (346 559 ) (191 062)

Adjustment for non cash items Amortisation of Water Sector Reforms revenue grant (note 13) - (200 000) Depreciation and amortisation 224 276 184 790 Interest received (16 764 ) (29 664 ) Interest paid 50 467 57 775 Loss/(profit) on sale of assets 426 (334 ) Foreign exchange translation profit and interest unwind (1 779 ) 355 (89 933 ) (178 140 ) Changes in working capital (Increase)/decrease in inventories (6 047 ) 3 672 Decrease/(increase) in trade and other receivables 27 549 (141 558) Increase in trade and other payables 90 067 18 045 111 569 (119 841 )

Cash from/(used in) operating activities 21 636 (297 981)

73 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

19. Commitments Operating lease commitments The future minimum lease payments under non-cancellable operating leases are as follows:

Due within one year 9 393 3 429 Due after one year 13 213 11 233 22 606 14 662

Operating leases relate to leases of properties with lease terms between 2 and 5 years with an average yearly rental escalation of 10%. The Corporation does not have an option to purchase the properties at the expiry of the lease periods.

Capital commitments Capital expenditure approved at the statement of financial position date but not recognised in the financial statements is as follows:

Approved and contracted for 817 182 452 458 Approved but not yet contracted for 137 085 744 192 954 267 1 196 650

The commitments are expected to be financed from internally generated funds, external borrowings and funding from the Government of the Republic of Botswana under the Emergency/ Drought projects.

74 Notes to the Financial Statements [continued] for the year ended 31 March 2014

20. Contingent liabilities a) The Corporation has guaranteed the obligations of its employees under the motor vehicle, motor cycle and bicycle guarantee scheme up to a total of P25 million (2013: P25 million). The scheme is operated thr ough Wesbank (a Division of First National Bank of Botswana Limited).

b) The Corporation has guaranteed the obligations of its employees under the residential property and personal loans scheme up to a total of P15 million (2013: P15 million). The schemes are operated thr ough Barclays Bank of Botswana Limited and First National Bank of Botswana Limited respectively.

c) The Corporation has no obligations (2013: PNil) in respect of litigation matters, which existed at the financial year end.

21. Retirement benefit assets The Corporation operates a hybrid pension fund with both defined benefit and defined contribution members. The defined contribution and defined benefit plans are administered by a separate Fund that is legally separated from the Corporation. The board of the pension fund is composed of an equal number of representatives from both employers and (former) employees. The board of the pension fund is required by law and by its articles of association to act in the interest of the fund and of all relevant stakeholders in the scheme, i.e. active employees, inactive employees, retirees, employers. The board of the pension fund is responsible for the investment policy with regard to the assets of the fund.

Defined Contribution Plan The Corporation is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Corporation with respect to the retirement benefit plan is to make the specified contributions. The total expense recognised in profit or loss of P40 697 000 (2013: P44 883 000) represents contributions made to these plans by the Corporation at rates specified in the rules of the plan.

Defined Benefit Plan In accordance with statutory requirements, independent actuaries value the Fund at the end of each financial year. Such valuations are based on the projected unit credit funding method. Under this method, the present value of benefits, which have accrued as a result of service prior to the valuation date, are compared with the value of the plan’s assets. Allowance is made in the valuation of the accrued benefit for estimates of future salary increases, withdrawals and deaths benefits payable.

The most recent actuarial valuation of the defined benefit plan was performed at 31 March 2014 by AON Hewitt South Africa. The information for the comparative periods has been restated as disclosed in Note 28. The results of the valuation are as follows:

2014 2013 P’000 P’000

Amounts recognised in the Statement of Financial Position are determined as follows:

Present value of defined benefit obligation (60 942 ) (79 640 ) Fair value of plan assets 59 591 58 029 Net liability arising from defined benefit obligation (1 351 ) (21 611)

75 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

Amounts recognised in profit or loss in respect of the defined benefit plan are as follows:

Current service cost 2 275 3 619 Gain on settlement (7 500 ) - Interest on obligation 5 947 4 805 Interest income on plan assets (5 298 ) (6 564) (4 576 ) 1 860 Amounts recognised in other comprehensive income in respect of the defined benefit plan are as follows:

Net actuarial (gain)/loss recognised in the year (14 462 ) 22 422

Movement in the present value of the plan assets in the current period was as follows:

Opening defined benefit obligation 79 640 66 102 Current service cost 2 275 3 619 Interest cost 5 947 4 805 Benefits paid (3 538 ) (11 505) Actuarial losses (11 457 ) 16 619 Liabilities extinguished on settlements (11 925 ) - Closing defined benefit obligation 60 942 79 640

Movement in the present value of the plan assets in the current period was as follows:

Fair value of plan assets Opening fair value of plan assets 58 029 62 182 Expected return on assets 5 298 6 564 Contributions 1 222 2 671 Benefits paid (3 538 ) (11 505) Actuarial gains/(losses) 10 505 (1 883) Assets distributed on settlement (11 925 ) - Closing fair value of plan assets 59 591 58 029

Obligation in the statement of financial position (1 351 ) (21 611)

76 Notes to the Financial Statements [continued] for the year ended 31 March 2014

2014 2013 P’000 P’000

21. Retirement benefit assets [continued] Defined Benefit Plan [continued]

The principal actuarial assumptions used are as follows: Discount rate 6.3% 7.0% Expected return on plan assets 6.3% 7.0% Future salary increases 5.9% 6.4% Future pension increases 4.1% 4.8%

The major categories of plan assets, and the expected rate of return at reporting date for each category, are as follows:

Equity 346 645 294 475 Bonds 109 050 91 822 Cash 20 400 24 040 Property 6 387 8 402 Other 6 630 11 666 Net current assets 3 229 (23 761 ) Total assets 492 341 406 644

The assets in respect of the defined benefit portion were estimated by deducting the total liabilities of the defined contribution portion from the total assets of the fund as shown below

Total fund assets as at 31 March 2014 492 341 406 644

Liabilities in respect of defined contribution portion - Active members` fund credits (363 017 ) (293 329 ) - Deferred members` benefits (69 082 ) (51 374 ) - Outstanding benefits (651 ) (3 912 ) Estimated assets in respect of defined benefits portion 59 591 58 029

77 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

22. Related party transactions Related parties comprise the Government of the Republic of Botswana, Key Management and Board members. Transactions with related parties are disclosed in the related notes.

Refer to note 15 for borrowings and the amounts outstanding in loans at 31 March 2014 to the Government of the Republic of Botswana.

Refer to note 17 for dividend matters.

A list of members of the Board is disclosed on the front page of the report. In 2014, the total Director’s fees paid amounted to P249 000 (2013: P216 000) (note 1).

A list of the Executive Management is disclosed on the front page of the report.

The total remuneration of Executive Management was P9.7 million (2013: P9.3 million).

Water sales to the Government of the Republic of Botswana during the year ended 31 March 2014 (included in revenue) amounted to P412 million (2013: P295 million)

Accounts receivable from the Government of Republic of Botswana at 31 March 2014 (included in trade receivables) amounted to P146 million (2013: P94 million).

2014 2013 P’000 P’000

23. Interest subsidy reserve Balance at the 1 April 2013 10 984 9 213 Interest subsidy income - transfer 1 509 1 771 Balance at the 31 March 2014 12 493 10 984

The interest subsidy reserve relates to a subsidy on the European Investment Bank (EIB) loan 45 (Note 15). In accordance with the agreement with the EIB, the Corporation shall pay net interest on the daily balance of the loan balance at the interest rate applicable reduced by an interest rate subsidy of 1.82%, provided that the interest payable shall at no time fall below 3%. The Corporation can use the cash equivalent of the difference between the subsidised interest rate and unsubsidised interest rate (the interest subsidy) for the financing of measures to enhance operational efficiency, capacity building and other ‘’Water Sector Building’’ measures as agreed with the EIB.

78 Notes to the Financial Statements [continued] for the year ended 31 March 2014

24. Taxation The Corporation is exempt from paying tax on income as per Income Tax Act Schedule II – Part 1.

25. Going concern The Corporation has incurred a loss for the year of P346 559 000 (2013: P191 062 000) after taking into account the revenue grant received from the Government of the Republic of Botswana of Pnil (2013: P200 000 000). This condition, indicates the existence of a material uncertainty that may cast significant doubt about the Corporation’s ability to continue as a going concern. The Government of the Republic of Botswana has committed to provide ongoing financial support in the future aimed at sustaining the Corporation in the medium to long term.

26. Events after reporting date There have been no material events between the reporting date and the date of approval of these financial statements that may require adjustment or disclosure in the financial statements.

27. Financial risk management The Corporation’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash and price risk), credit risk and liquidity risk. The Corporation’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Corporation’s financial performance. Risk management is carried out under policies approved by the board. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and non derivative financial instruments, and investment of excess liquidity.

(a) Market risk (i) Foreign exchange risk The Corporation is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the American Dollar (USD) and South African Rand (ZAR). Foreign exchange risk arises from borrowings, investments and other commercial transactions. Management has set up a policy to require the Corporation to manage its foreign exchange risk against functional currency. To manage foreign exchange risk arising from those transactions, the Corporation ensures that it maintains adequate funds in foreign currency in its bank accounts and negotiates terms and conditions in the loan agreements with the lenders. Foreign exchange risk arises when commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

At 31 March 2014, the Corporation’s foreign exchange exposure was to ZAR and USD borrowings and investments. If the Botswana Pula (BWP) had moved 1% against foreign currencies, the effect would have resulted in an exchange loss or gain of P2.2 million (2013: P2.6 million).

This would be as a result of foreign exchange loss or gain on the translation of foreign currency denominated financial assets and liabilities.

79 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

27. Financial risk management [continued] (a) Market risk (continued) (ii) Interest rate risk The Corporation’s interest rate risk arises from long-term borrowings and short-term deposit investments. Borrowings and short-term deposit investments at variable rates expose the Corporation to cash flow interest rate risk. Borrowings and short-term deposit investments issued at variable rates expose the Corporation to fair value interest rate risk. The Corporation maintains its borrowings and short-term deposit investments at variable interest rates agreed with the counterparties. During the 2013/2014 financial year, the Corporation’s borrowings and short- term deposit investments at variable rates were denominated in Pula (BWP), US Dollar (USD) and Rand (ZAR).

A 1% movement in interest rate in foreign currency borrowings and short-term deposit investments would increase/ decrease the Corporation’s net interest charge by P400 000 (2013: P220 000).

ii) Price risk The Corporation does not deal in commodities and therefore there is no exposure to price risk.

(iv) Cash flow and fair value interest rate risk The Corporation manages interest rate risk by ensuring that excess funds are invested in high interest earning bank and investment accounts.

(b) Credit risk Credit risk arises from cash and cash equivalents, and deposits with banks and financial institutions, as well as credit exposures to consumers, including accounts receivable.

Deposits are payable by consumers before water is connected. Accounts receivable are settled in cash, cheques or electronic transfer. Accounts receivable outstanding were reviewed and considered for impairment provision in accordance with IAS 39 - Financial Instruments: Recognition and Measurement.

(c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash, and the availability of funding through an adequate amount of committed credit facilities.

Management monitors rolling forecasts of the Corporation’s liquidity reserves (comprises cash and cash equivalents – note 10) on the basis of expected cash flow. This is generally carried out by management in accordance with practice and limits set by the board.

The table below analyses the Corporation’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

80 Notes to the Financial Statements [continued] for the year ended 31 March 2014

Less than Between Between 3 Over 1 year 1 and 2 years and 5 years 5 years P’000 P’000 P’000 P’000

27. Financial risk management [continued] (c) Liquidity risk [continued]

At 31 March 2014 Borrowings 79 035 77 526 324 618 392 273 Consumer deposits - - - 23 163 Accounts payable 320 285 - - -

At 31 March 2013 Borrowings 82 278 79 035 373 104 421 975 Consumer deposits - - - 21 821 Accounts payable 230 218 - - -

(d) Capital risk

The Corporation is a parastatal established by an Act of Parliament. The Corporation is supported by its shareholder, Government of the republic of Botswana. The Corporation’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Consistent with others in the industry, the Corporation monitors capital on the basis of the debt to equity ratio. This ratio is calculated as long term debt divided by total equity.

2014 2013 P’000 P’000

Total long - term debt (note 15) 510 448 545 700 Total capital and reserves 5 435 689 5 181 495 Debt : Equity Ratio 0.09 0.11

The Corporation considers a debt equity ratio of less than 1 to be acceptable. This is reviewed annually after considering market conditions and the growth goals of the Corporation.

The ratio of interest bearing debt to the net book value of property, plant and equipment is calculated as:

Total interest bearing borrowings (note 15) 510 448 545 700 Property, plant and equipment (note 4) 5 032 246 4 608 857 Ratio of interest bearing debt to property, plant and equipment 10.14% 11.84%

81 water utilities corporation annual report 2013/14

Notes to the Financial Statements [continued] for the year ended 31 March 2014

27. Financial risk management [continued]

(e) Fair value estimates

The fair value of financial instruments that are not traded in an active market is based on quoted bid prices. The Corporation uses a variety of methods and makes assumptions that are based on market conditions existing at each statement of financial position date. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.

The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Corporation for similar financial instruments.

28. Restatement of previously reported amounts In the current year the Corporation adopted the change in the requirements of IAS 19 Employee Benefits. In previous financial years all current service costs, interest on obligations, expected return on plan assets, and actuarial gains and losses arising from the defined benefit plan were recognised in the respective year’s profit or loss. IAS 19 now requires the actuarial gains and losses and the difference between the expected return on plan assets and the interest income on plan assets to be classified as part of other comprehensive income.

2013 P’000

Statement of Comprehensive Income

Deficit and other comprehensive loss Deficit for the year (as previously reported) 191 062 Movement in the defined benefit obligation presented in other comprehensive income (22 422) Deficit for the year - restated 168 640

Other comprehensive loss for the year (as previously reported) - Movement in the defined benefit obligation presented in other comprehensive income 22 422 Other comprehensive loss for the year - restated 22 422

Total comprehensive loss for the year - restated 191 062

82 Tariff Schedules

LA Min 0-5 >5-15 >15-25 >25-40 >40 F’Town, 1 11.20 1.50 4.00 9.00 13.00 18.00 Kweneng, 2 11.20 2.00 8.00 11.00 16.90 20.80 Mochudi, 3 11.20 2.00 6.00 11.00 16.90 18.00 Lobatse, 4 11.20 2.00 6.00 11.00 16.90 18.00 Selebi Phikwe, 5 11.20 1.50 4.00 9.00 13.00 18.00 Ghanzi, 6 11.20 1.50 4.00 7.00 10.00 15.00 Maun, Okavango 11.20 1.50 4.00 7.00 10.00 15.00 Maun, Ngami 11.20 2.00 4.00 9.00 10.00 15.00

DWA DWA supply,1 11.20 1.50 4.00 9.00 13.00 15.00 DWA Maun 11.20 1.50 4.00 9.00 13.00 15.00 WUC supply, 4 11.20 2.00 5.00 9.00 13.00 15.00

‘Old WUC’ Gaborone, 7 11.20 2.00 8.00 11.00 16.90 20.80 Jwaneng, 8 11.20 2.00 5.00 7.00 10.00 15.00 Francistown, 9 11.20 2.00 8.00 11.00 16.90 20.80 Sowa, 10 11.20 2.00 5.00 7.00 10.00 15.00 Selebi Phikwe, 11 11.20 2.00 4.00 7.00 10.00 15.00

GOVERNMENT

LA Min 0-5 >5-15 >15-25 >25-40 >40 All, 12 22.40 6.00 16.00 21.00 33.00 41.00

DWA All, 12 22.40 6.00 16.00 21.00 33.00 41.00

Old WUC Gaborone, 13 22.40 6.00 16.00 21.00 33.00 41.00 Jwaneng, 14 22.40 6.00 16.00 21.00 33.00 41.00 Francistown, 15 22.40 6.00 16.00 21.00 33.00 41.00 Sua, 16 22.40 6.00 16.00 21.00 33.00 41.00 SP, 17 22.40 6.00 16.00 21.00 33.00 41.00

83 water utilities corporation annual report 2013/14

Acronyms

BOBS Botswana Bureau of Standards CMT Corporate Management Team DIFR Disabling Injury Frequency Rate DCS Debt Service Coverage DPCFL Debt Participation Funding Limited EIB European Investment Bank EMS Environmental Management Systems EIA Environmental Impact Assessment ERM Enterprise Wide Risk Management IBC Inside Back Cover IFC Inside Front Cover ISO International Standards Organisation IWRM Integrated Water Resources Management MCM Million Cubic Metres NSC North South Carrier NOSA National Occupational Safety Association PSO Project Support Office PDSF Public Debt Service Fund SADC Southern African Development Community SHE Safety Health and Environment TCM Thousand Cubic Metres USD United States Dollar WAB Water Apportionment Board WDM Water Demand Management WHO World Health Organisation WUC Water Utilities Corporation ZAR South African Rand

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