UMGENI WATER - Notice of Availability of Annual Report

Notice of Availability of Annual Report

Umgeni Water
Registration number: 1997/007707/07
JSE Alpha code: BIUMWA
(“Umgeni Water” or “the group”)

NOTICE OF AVAILABILITY OF ANNUAL REPORT

Umgeni Water hereby notifies its debt investors that it has publicly released its Annual Report for the
year ended 30 June 2022 (“Annual Report”), incorporating the annual financial statements for the year
ended 30 June 2022 (“AFS”) and the auditor’s report prepared by the Auditor-General of South Africa
(“AGSA”) (“Auditor’s Report”) which is unqualified.

The Annual Report, incorporating the AFS and the Auditor’s Report, are available on the Umgeni Water
website at 2021/2022 Annual Report | Umgeni Water - Amanzi and for inspection at Umgeni Water’s
registered office at 310 Burger Street, Pietermaritzburg, 3201, South Africa.

Restatements

The AFS contain various restatements for the prior year ended 30 June 2021 (“prior period”) as follows:

•    Correction of assets commissioned between asset classes
     During the current year, the group identified assets totalling R242 million in cost classified as capital
     work in progress in 2021 that should have been recognised as assets commissioned under
     buildings and infrastructure. As a result, the commissioning cost in 2021 has been restated
     accordingly to reduce capital work in progress and increase buildings and infrastructure by R242
     million respectively. The net impact to property, plant and equipment was nil.

•    Correction of asset write offs
     During the year costs of R26 million included in capital work in progress that were not directly
     attributable to the construction of the respective assets were identified to be written off. This has
     resulted in a correction to the capital work in progress asset write offs for the prior period with a
     corresponding adjustment to the accumulated profit. Supplier invoices previously accrued for in
     2021 which were subsequently now in 2022 in dispute for payment resulted in the contingent
     liabilities and accruals for the prior period requiring a correction. As a result, the prior period
     contingent liabilities were understated by R17 million, the accruals were over stated by R13 million
     with a corresponding adjustment to accumulated profits.

•    Correction of irregular expenditure
     The prior period error relates to the incorrect inclusion of VAT (R46 million) on the expenditure
     incurred corrections to the amounts incurred.

Emphasis of matter and material irregularities

The Auditor’s Report contains an emphasis of matter relating to material impairments of R451.80 million
raised by Umgeni Water on trade and other receivables due to debtors not being able to settle
outstanding amounts. The AGSA’s opinion has not been modified in respect of this matter.

In addition, the following material irregularities were raised by the AGSA:

1.   payment for consultancy services not received;
2.   invalid payments for security services;
3.   overpayment of lease rentals; and
4.   interest incurred on late payment to a supplier.


30 January 2023
Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 30-01-2023 12:25:00
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