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A n n u a l R e p o r t 2 0 0 8 / 9
Water & Sewerage Authority
Contents
Vision and Mision Statement 2Board of Directors 3Senior and Middle Management 4Corporate Profile 6Chairperson’s Statement 8Chief Executive’s Review 10Strategic Planning and Human Resources 12Engineering, Planning and Development 16Operations and Maintenance 22Finance 26Financial Statements 32
WASA in Lesotho
1
Vision
Mission Statement
We provide our valued customers in all designated urbanareas with high quality potable water and environmentallysensitive wastewater disposal services through efficient andinnovative processes; and highly motivated, competent, and
professional staff.
We strive to be a world-class provider of adequate potablewater and safe wastewater disposal services to all stakeholders
in the urban centres of Lesotho.
2
3
Board of Directors
Mr. Bataung LelekaChairman
Mrs. Refiloe TlaliChief Executive
Mr. Lebohang MofammereMrs. ‘Mamonaheng Ramonaheng
Mr. Ntahli MateteMrs. ‘Mammako MolapoDr. Percy Mangoaela
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SENIOR MANAGEMENT
MMrrss.. RReeffiillooee TTllaalliiChief Executive CA (Lesotho)
MMrrss.. ’’MMaammoottˇssooaannee ’’MMuussaaDirector of Finance a.i.CA (Lesotho)
MMrr.. FFaallllaa SSeebbookkoo Director of Operations &Maintenance Civil Eng (Hons)
MMrr.. LLiirraa MMoohhoosshhoo Director of Engineering BEng. Civil Eng.
MMrr.. MMoorraatthhaannee MMoonnyyaammaannee Director of Strategic Services andHuman Resources MSc. Human Resource andTraining
MIDDLE MANAGEMENT
MMrr BBrreeyy GGoooollaamm Manager ContractsAdministration MSc. Water Res. Tech
MMrr.. KKhhoottssoo LLeettssaattssii Public Relations ManagerMA Mass Comm. CPRP
MMrr.. PPhheeeelllloo MMaassooaabbiiLegal Affairs ManagerLLB
MMss.. PPuusseelleettssoo RRaannggooaakkooManager Human Resources BA. Public Admin.
MMrrss.. ’’MMaalleetthhoollee MMaasseennyyeettssee Manager Engineering DesignsCivil Eng. (Hons)
MMss.. TTsseellaannee MMoohhaappiiStores Accounting ManagerGeneral Accountant (Lesotho)
MMrr.. LLeettllaammaa JJoobboo Manager SewerageBSc. Civil Eng.
MMrrss.. LLeerraattoo MMookkuuooaannee Financial Model ManagerCA (Lesotho)
MMrrss.. PPoonnttˇssoo TTaauu Network Manager Civil Eng. (Hons.)
MMrr.. JJoosseepphh OObbiiaahhuu Chief Internal Auditor CA, CIA
MMrr.. SSeekkhhoonnyyaannaa SSeekkhhoonnyyaannaa Manager Strategic PlanningAnalysisMSc. Economics
MMrr.. MMaakkhhaakkhhee MMaalliieehhee Marketing ManagerMCom (Marketing)
MMss.. ’’MMaappaasseekkaa MMaakkhhaabbaa Laboratory Manager BSc.
MMss.. MMeerriiaamm RRaattˇssiiuu Credit Controller BCom. (Accounting)
MMrr.. MMoottssaammaaii SSooootthhoo Strategic Planning and ChangeManagement ConsultantMBA
MMrr.. TTˇsseelliissoo SSiibboollllaa Administration Stores AccountantBCom (Accounting)
Senior and Middle Management
5
MMrrss ‘‘MMaakkuueennaa NNyyaabbeellaa Revenue Accountant General Accountant (Lesotho)
MMss.. RReelleebboohhiillee PPoouulloo SSU AccountantBCom (Accounting)
MMrrss.. LLiinneeoo MMooqqaassaa Public Relations OfficerMA - CCMS
MMrr.. LLeeffuu MMookkaaooaanneeManagement AccountantCA (Lesotho)
MMss.. PPaalleessaa MMoonnoonnggooaahhaa Project Manager - MWWPMSc. Environmental Eng.
MMrrss.. ’’MMaammaakkuullaa FFoouullooFinancial Accounting ManagerBCom (Hons.) Accounting
MMrr.. SSeehhlloohhoo SSeeffeeaannee Health and Safety Officer Degree Environmental Health
MMrrss.. MMaahhaallii LLeejjaahhaa Credit Control AccountantGeneral Accountant (Lesotho)
MMrr.. MMoohhaappii JJeessssiiee Manager Water Production BSc. Civil Eng.
MMrr.. LLeebboohhaanngg BBuullaannee ICT Manager BSc (Hons.)
MMrr.. TThheelleejjaannee TThheelleejjaanneeManager Projects, Planning &StudiesBSc (Hons.) Hydrogeology
MMrr.. CChhaabbeellii MMaacchhaakkee Metering Manager BCom (Hons.)
MMrrss.. MMaattˇsseeppoo KKootteellooCredit Control AccountantBCom (Management)
MMrrss.. NNttssooaakkii MMaatthhaahhaa Regional Accountant - SouthBCom (Accounting)
MMrr.. LLeehhlloohhoonnoolloo MMaakkhhooaalliiProject Manager (WSIP) a.i. MBA
MMrrss.. SSeellllooaannee LLeettssuunnyyaannee Financial Model OfficerBA Econ
MMrr.. TTˇssuukkuulluu PPhhaaffoolliiShared Services ManagerM.A. HR Management &Development Planning
MMrr.. TTaannkkiissoo NNtteessoo Recruitment and Staffing OfficerM.A. Human Resources
MMss.. PPuullaannee PPiittssooSenior Internal AuditorB.A. Economics & Accounting
MMrrss.. ‘‘MMaalleecchheessaa MMaahhaaooProcurement OfficerBCom. Accounting
MMrr.. MMaakkaalloo NNttss’’aassaaCorporate Performance AnalystMSc. Economics
MMrr.. SSooaaii SSooaaii Projects Accountant Registered Accountant
MMrrss.. MMpphhoo MMoohhllaappiissoo ICT Programmer BSc. Computer Science & Statistics
MMrr.. MMaajjoorroo RRaalliieennggooaannee Internal Auditor Postgrad. Diploma in Finance,Banking & InvestmentManagement
MMrrss.. KKeekkeelleettssoo SSeekkhhaammaanneeSenior Purchasing Officer BA.Ed, MDP
MMrr.. JJoohhnnssoonn KKoolluubbaahh Credit Control Accountant BCom
MMrr.. NNttssaannee RRaammoonnaattee Towns Manager BTech Mechanical Engineering
MMrrss.. ‘‘MMaammaatthhee MMaakkhhaaoollaa Manager Water Distribution BEng. Civil Engineering
MMrrss..‘‘MMaasseemmeellaa EElliiaassMetering AccountantBCom Management
6
Water and Sewerage Authority (WASA) serves over300 000 people in the urban centres with potablewater. The Authority provides safe drinking water toover 50 000 post paid connections, plus approxi-mately 400 public standpipes. There are also morethan 2 500 domestic prepaid connections, and morethan 2 200 communal pre-paid card holders. TheAuthority also serves the many industries andcommercial premises, particularly in Maseru whichuse about 40% of the water produced.
WASA has over 5 000 customers who are connectedto the sewerage system. Over and above the saidconnections, the Authority operates a tanker servicewhich serves more than 8 000 registered customersin all the urban centres of the country. The emptyingservice is provided to households and businesses inareas that have a reticulated water supply but donot have access to piped sewerage. The tankers areused to empty septic and conservancy tanksincluding VIP toilets.
On average, water production for the city of Maseruis 40 mega litres per day. Maseru residential andindustrial customers obtain their water mainly fromthe Caledon (Mohokare) river, which is supple-mented by water from the Maqalika dam when riverlevels are low and when there is high turbidity in theriver.
Districts In the remaining 14 town centres (districts), rawwater is abstracted from rivers, (surface water) andwell points. Some of these towns obtain theirsupplies from springs and boreholes (groundwater).
Domestic Water ConsumptionIt is estimated that where there is internal plumbingand a sewer connection, the average consumptionis about 120 litres per capita per day (l/c/d). Wherethe supply is to an outside tap, the averageconsumption is about 80l/c/d and this reducesfurther the supply from the house. On averagepeople obtaining water from standpipes consume40l/c/d. The minimum target set by Government is30l/c/d.
Corporate ValuesIn cognisance of the fact that WASA's ability tomeet the above mission and vision wouldrequire specific kinds of behaviours by itsmanagement and staff, the following corporatevalues have been adopted.
• Integrity; • Loyalty; • Commitment and dedication to customer
service and professionalism; • Commitment to safety and environmental
protection; • Respect for other people; • Self-confidence and staff suitability; • Teamwork and co-operation; • Commitment to a quality product and
continuous improvement; and • Financial sustainability.
To ensure consistency of understanding and interpre-tation, we have grouped the above corporate valuesinto six broad categories, namely; ethics, customerservice and professionalism , safety and environment,human resources, product, and sustainability. Underthese six broad categories, this is how we understandand interpret the above corporate values.
Corporate Profile
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8
It is my pleasure and honour as Waterand Sewerage Authority (WASA)Chairman of the Board to present toyou this report on behalf of the Boardof Directors of the Authority. Thereport highlights a brief overview ofthe performance during the2008/2009 Financial Year (FY) andthe challenges experienced in thereporting period as well as those thatlie ahead of us.
The Authority is in its second phase ofthe Performance Agreement (PA)signed with the Government ofLesotho since 2005. The mainobjective of the PA is to improve WASA’s delivery ofservices to its customers through developing newprogrammes and projects, as well as improving theexisting ones. To this end the Authority has managedto meet most of the targets set in the PA. This is apositive step in the Authority’s transition into acommercial entity.
One notes with satisfaction the implementation of the
Performance Management System. Theinitiative is intended to assist in theculture transformation into a highperformance culture. It is to ensure thatstaff account for their performance andconsequently the entire organisationalperformance is improved.
Pursuant to the MillenniumChallenge Development Goals ofhalving the number of peoplewithout proper sanitation and accessto potable water by 2015, theAuthority is engaged in a number ofprojects. They include; the MaseruWastewater Project (MWWP), the
Mazenod Water Supply Project and the ThreeTowns Water Supply and Sanitation Project thatcovers the towns of Teyateyaneng, Maputsoe andRoma. The purpose of the Three Towns Project is toenhance both the security of safe and reliable watersupplies as well as to extend access to clean waterand provide improved sanitation to new domesticand commercial users in the medium terms of thethree towns.
Chairperson’s Statement
Mr. Bataung Leleka
9
Another major project currently underway is theMaseru Peri-urban Water Supply Project Phase IIwhich will further increase the Authority’s customerbase in Maseru. It is our hope that customers in theNorth East and South West of Maseru City will beconnected to water supply in the next financial yearonce the project has been completed.
Despite all these efforts to increase the water supply,the challenge that lies ahead of the Authority is anincreasing demand for water for domestic and indus-trial consumption in designated urban centres. Thischallenge is envisaged to pose serious problems ineconomic development as well as public health.
One of the steps taken by the Government ofLesotho to address the problem is to fast track theconstruction of the long-awaited Metolong DamProject aimed at augmenting water supply to MaseruCity and the neighbouring towns of Roma,Teyateyaneng, Morija and Mazenod.
May I conclude this statement by extending mygratitude by acknowledging cooperation by theWASA Board of Directors, Management, Staff and
Development Partners in keeping the Authorityfocused on its legislative mandate.
My appreciation is also extended to our customers,stakeholders and communities for their continuedsupport. We will continue to show our commitmentby meeting your needs through service excellence.
A water tank supplied by WASA to Jeke Community
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It is with great pleasure to present the2008/2009 Financial Year Report. TheAuthority is in its second phase of thePerformance Agreement signed withthe Government of Lesotho. I ampleased to point out that IndependentTechnical Auditors commended WASAon its performance after completingtheir audit on targets set by theGovernment of Lesotho as an initiativeto transform the Authority into acommercial entity. It is worth notingthat despite the global economicdownturn, the Authority’s financialprofits have slightly improved.
Other measures implemented to enhance theAuthority’s operation include the implementation ofEDAMS Billing System and Customer InformationSystem. As highlighted in the 2007/2008 FY reportthat the Authority is challenged by skills shortage inareas of Engineering and Operations, a GraduateDevelopment Programme and a Technical Trainingprogramme were implemented to build and retaincritical skills base. The Authority is also looking forwardto the implementation of Management DevelopmentProgramme (MDP) in the FY 2009/2010. Theinitiative is to assist managers to approach business ina world class fashion thereby building a businessleadership and brand within the company.
Public Relations
The section is entrusted with the overall commu-nication of the Authority. However, resultsreflected in the 2006 and 2007 Customer Surveyshow that customers are concerned with inade-quate information dissemination.
In view of the above the section has vigorouslyinitiated the development of a CommunicationPlan. The strategy is therefore intended to be aroad map for communication activities that areaimed at building and maintaining positiverelations with targeted members of the public to
support WASA’s policies and goals inan effort to retain its reputation,profitability and even its continuedexistence.
The Authority has made tremendousdevelopment in ensuring thecompany’s brand succeeds throughour Corporate Social ResponsibilityProgramme, despite very limitedresources.
We continue to educate and dissem-inate information to our customersand stakeholders through a number
of channels such as a weekly Radio programme, anexternal quarterly newsletter, a website andthrough public gatherings.
Marketing and Customer Service
The introduction of the new Billing and CustomerSystem (EDAMS) brought with it a number ofteething challenges. The challenges were predomi-nantly caused by the following internal issues:
• Difficulty to quickly adopt new ways of doingtasks in line with system-aligned workflows orbusiness processes.
• Unwritten policies to support quicker decisionmaking.
• Data that was not fully cleansed whenmigrated from the old system.
• Lack of access to the system by all the sectionsinvolved in workflows. This has resulted in thesystem not being optimally used.
The Financial Year 2008-2009 saw Marketing andCustomer Service devoting a large chunk of theirtime on activities geared towards optimising thebenefits that could be gained from proper use ofthe new Billing and Customer system (EDAMS). Wemainly focussed on:
• Supporting the customer-facing staff by providingclose supervision to minimise mistakes.
Chief Executive’s Review
Mrs. Refiloe Tlali
11
• Organising a refresher training to improve theskills of customer-facing and other users.
• Providing feedback to management in relation tothe system and advice on how to improve thesystem.
• Developing a structured effort to clean the data.
On the Marketing front we continued to pursue theobjectives of WASA by promoting the services onoffer through radio and print advertising. Thechannels of choice to publicise our services continueto be flyers, brochures and posters. Again in theFinancial Year 2008-2009, through these efforts, wewere able to generate enough demand for newwater and sewer connections and surpassed theannual target of connecting three thousand (3000)new customers by generating more than fivethousand connections (5 000).
The rate of new sewer connections is still very lowand promotional efforts to generate demand havenot produced significant results. This has forcedWASA to explore the possibility of creating a rotatingfund to assist prospects in reticulated areas byfinancing the installation of internal plumbing,which is the major obstacle for most people whowish to connect to the sewer lines.
The Right Honourable Prime Minister Mr. Pakalitha Mosisili with Honourable ministers Mr. Semano Sekatle and Dr. ‘Matumelo Sekatle during Public Service Day celebrations
Chief Executive Mrs. Refiloe Tlali with Khabele Molefe,a student Chief Executive
Mr. Morathane Monyamane DSSHR presents a cheque toMs. Limakatso Khonthu of Lesedi Community School
Graduate developmentprogramme and studentattachments
WASA has established its traininginitiatives as a way of fulfiling itsmandate on social responsibility,where a helping hand is extendedto Basotho tertiary students andgraduates alike.
The year 2008 was the first time everthat the Programme was introduced atWASA. The Programme went so wellthat out of 5 graduates who partici-pated in the Programme, 3 of themwere ultimately employed in the areasof Information Communications andTechnology, Human Resources andLegal Affairs.
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Strategic Planning and Human Resources Division
WASA staff celebrating African Child’s Day
Mr. Morathane Monyamane
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Ten diploma and degree students were attachedto the Authority in different disciplines. In its firstyear, the programme has been a success and allthe attaches’ have successfully completed theiracademic programmes.
Performance management system
The implementation of the Performance ManagementSystem went ahead as planned and rollouts weredone throughout the organisation, after whichperformance contracts were signed by all staff.Performance reviews were completed onschedule and for the first time, bonuses were paidbased on performance in December 2008.
European Union funded training
The European Union funded a technical trainingprogramme which was meant to equip Operationsand Maintenance staff with advanced skills in theareas of leak detection, water network, maintenancerepair and water processing. The programme kickedoff in February 2008, and is expected to end inNovember 2009.
The performance agreement
The second phase of the Performance Agreementthat was signed between the Government ofLesotho and the Water and Sewerage Authority inJune 2008 followed the first phase that coveredthe period from 2004 to 2007.
The Agreement, whose purpose is to direct thedevelopment of WASA within the new institutionalarrangements towards achieving a financially self-sustaining status whilst aiming to meet mandatorylevels of service, has the following key objectives:
• Establishment of the key financial parameters,tariffs and levels of service necessary to achievethe agreed level of financial sustainability bythe end of the Agreement period.
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• Identification and registration of all WASA assetsand their state of condition.
• Establishment of the water and wastewaterlevels of service that WASA is obliged to providetogether with systems and procedures for theirmeasurement.
• Improvement of a mechanism for the periodicreview of tariffs necessary for WASA’s long-termsustainability.
This year, the Agreement was assessed forperformance on 26 service areas by anindependent Technical Auditor. The report highlightscommendable achievements on 22 out of 26 serviceareas. Specifically, (on a scale of 1 to 5 where 1denotes excellent performance and 5 very poorperformance) WASA scored a 1 in all categories underthe Human Resources Management and OperationsOptimisation. On Financial Management, theAuthority obtained a score of 1 in all areas except inthe category of Operating Margin, where the scorewas a 5. This low score came about as a result of achange that was made in the interpretation of theratio.
Under the Water Resources Management, categoriesof Capital Investment Programming and Financialmodelling, and Leakage Control received scores of 5and 3 respectively. Customer Service did compara-tively well with most of performance criterionreceiving scores of 1 except for Customer Perceptionand Customer Strategy which received scores of 4and 5 respectively.
Daily water service levels were achieved by reducing5 150 customers who are served for less than 18hours per day compared to the set target at 5 000customers. This important milestone was achievedby extending services to densely populated localitieswithin Maseru
Improvement of service delivery and efficiency wasthrough engagement of private contractors whowere engaged to install new water connections,and this resulted in over 5 300 connections, whichsurpassed the annual target of 3 000 connections,leading to an increase in the number of peoplewith access to potable water.
Tertiary students of Industrial Training
Mrs. ‘Mamots’oane ‘Musa (Finance Director a.i.) presents acertificate of appreciation to the retiring Mrs. ‘Mathuso Fobo
Strategic Services and Human Resources staff with ResolveWork Place consultants during Management Development
Programme
WASA staff celebrate World AIDS Day
Strategic Planning and Human Resources
Division
15
PPeerrffoorrmmaannccee ccrriitteerriioonn PPeerrffoorrmmaannccee WWeeiigghhttiinngg WWeeiigghhtteedd ssccoorree ppeerrffoorrmmaannccee
ggaaiinneedd ssccoorree
11..00 CCuussttoommeerr SSeerrvviiccee1.1 Customer Service System: Category 1 0.05 0.05
Customers service-billing and collection system
1.2 Levels of Service Improvement Plan: Category 1 0.04 0.04Domestic customers supplied for less than 18 hours per day
1.3 Levels of Service Improvement Plan: Category 1 0.02 0.02Service coverage – WaterService coverage – Sewerage Category 1 0.02 0.02
1.4 Customer Perception – Category 4 0.04 0.16% Improvement in customer satisfaction
1.5 Customer Strategy – Category 5 0.04 0.2Number of sewerage connections
1.6 Customer Strategy – Category 1 0.04 0.04Number of water connections
22..00 WWaatteerr RReessoouurrcceess MMaannaaggeemmeenntt2.1 Capital investment programming (CIP) Category 5 0.05 0.25
and financial modelling
2.2 Leakage Control: Category 3 0.05 0.15District metering scheme
2.3 Leakage Control: Category 1 0.05 0.05Unaccounted for water
33..00 HHuummaann RReessoouurrcceess MMaannaaggeemmeenntt3.1 Manpower Plan Category 1 0.05 0.05
3.2 System Performance Management Category 1 0.05 0.05
44..00 OOppeerraattiioonnss OOppttiimmiissaattiioonn4.1 Planned Preventative Category 1 0.02 0.02
Maintenance System (PPM)
4.2 Geographical Information System (GIS) Category 1 0.02 0.02
4.3 Quality Control: Category 1 0.03 0.03% Biological samples failing
4.4 Quality Control: Category 1 0.03 0.03% Chlorine samples outside tolerance
4.5 Quality Control: Category 1 0.05 0.05% Effluent samples failing
4.6 Energy Plan: Category 1 0.05 0.05% Reduction in energy per m3 supplied
4.7 Energy Plan: % Reduction in energy per m3 Category 1 0.05 0.05effluent treated
55..00 FFiinnaanncciiaall MMaannaaggeemmeenntt5.1 Cash Collection: % Current collection Category 1 0.06 0.06
% Debt collection Category 1 0.03 0.03
5.2 Debt Management: Reduction in debt age Category 1 0.03 0.03
5.3 Financial Performance: % Debts covered Category 1 0.05 0.05
5.4 Financial Performance: Operating margin Category 2 0.02 0.04
Works for the construction of a reservoir at Maputsoe,Three Towns Water Supply and Sanitation Project
16
Engineering, Planning and Development Division
Water and Sewerage Authority isfaced with many challenges of watersupply and sewerage collection anddisposal. These challenges includedevelopment of water sources, watercoverage, improvement of servicelevel and increase of seweragecoverage. Engineering, Planning andDevelopment Division developsCapital Investment Programme whichaddresses the challenges mentionedabove. The Annual Report for2008/2009 covers the projects thatwere at different levels of implemen-tation by the end of the year.
Completed Projects
RReeppllaacceemmeenntt ooff tthhee PPuummppiinnggMMaaiinn ffrroomm LLiitt ˇssooeenneenngg BBoooosstteerrSSttaattiioonn ttoo tthhee 11000000 ccuubbiiccmmeettrree RReesseerrvvooiirr iinn TToowwnn..
The project was completed duringthis reporting period and the relia-bility of water supply to the townshipwas improved. The reduction ofwater losses due to this interventionis still under review.
Mr. Lira Mohosho
17
SSeewweerr EExxtteennssiioonn iinn BBuutthhaa--BBuutthhee,, LLeerriibbeeaanndd MMaaffeetteenngg.
The sewer extensions for the towns of Butha-Buthe,Leribe and Mafeteng were completed during thesecond quarter of 2008/2009.
The response due to this intervention was realisedin Mafeteng while in Leribe and Butha-Buthe noconnections were made.
Construction of Office Building inRoma
The construction of office building together withguard house and fencing of the whole site werecompleted this financial which really contributed tothe improvement of the image of the Authority.
On-going Projects
MMaasseerruu PPeerrii--UUrrbbaann WWaatteerr SSuuppppllyy PPhhaassee II II
The project covers the North-East and South-Westof Maseru.
This includes the following areas:
Khubetsoana KoalabataTsenola Lancer’s GapMajoe-a-Litsoene SekamanengMabote Ha ThetsaneHa Tsolo Ha Tikoe
The project is at a very advanced stage. It comprisesa total length of 280 kilometres of pipeline rangingfrom 32mm to 315mm diameters. About 90% ofthese pipelines have been laid and pressure tested.
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About 60% of value chambers have been constructed.One 3.6 Megalitre reservoir at Lancer’s Gap is 50%complete while the 250 cubic metre reservoir at HaThetsane is 100% complete. The booster stationspumping water to these reservoirs are almost 60%complete.
When completed, almost 5 000 households will haveaccess to potable water supply.
Tikoe Thetsane Industrial Water Supply
The project is intended to serve potable water to theproposed Tikoe Industrial area near SouthPhuthiatsana River.
The project comprises an Intake in the Caledon River, atreatment plant, rising and distribution mains and a 10Megalitre reservoir located at Ha Tsolo. The compo-nents of the project are at different levels of implemen-tation with the pipelines almost 80% complete whilethe river intake has not yet started.
TThhrreeee TToowwnnss WWaatteerr SSuuppppllyy aanndd SSaanniittaattiioonnPP rroojjeecctt:: (Maputsoe, Teyateyaneng and Roma)
The project covers generally drilling and equipping ofboreholes, laying of pipelines, construction of reser-voirs and rehabilitation of the existing sewage pondsin the three towns and construction of maturationponds in Maputsoe.
Drilling of boreholes is about 80% complete and pipelaying is 40% complete. The construction of reser-voirs in the three towns has not yet started.
Rehabilitation of sewage ponds in Roma has beencompleted while the work in Maputsoe andTeyateyaneng has just started.
The project will be completed in August, 2010 andwater coverage in all three towns will increase toabout 80%.
Mazenod Water Supply
The project comprises a gravity main fromLithabaneng reservoir (High South reservoir) to theone Megalitre reservoir at Mazenod and distributionpipelines. All the components of the project arealmost 60% complete. The project is to supply waterto Mazenod and all its peri-urban areas including theMoshoeshoe I International Airport when completedbefore the end of 2009.
Trench digging for pipe laying at Ha Maqele in Maputsoeunder Three Towns Water Supply and Sanitation Project
Engineering, Planning and Development Division
Maqalika Raw Water Pumping Station
The project comprises the Intake at the CaledonRiver, the 900mm diameter ductile pumping mainand the discharge structure near Maqalika reservoir.
The pumps at river intake will deliver 1.5 cubicmetres per second into Maqalika during high flowsin rainy seasons and during drought when water isreleased from the Lesotho Highland Water Project.
When completed in November, 2009, the projectwill reduce the duration of water releases fromLesotho Highland Water Project which will thenreduce the cost because more water will bepumped to fill Maqalika in a shorter time than it ispossible now.
Maseru Wastewater Project
The project has been divided into three compo-nents i.e.
a) Technical Assistance
b) Immediate Works
c) Medium Term Works
Technical Assistance
The Technical Assistant who is advising the ProjectManager for Maseru Wastewater Project and herProject Management Unit is already in place andthe project implementation is going at a faster ratethan any other in WASA.
Immediate Works
The Immediate Works Component comprisespurchase of eight vacuum tankers for both septicand ventilated improved pits (VIP), and replacementof electro-mechanical equipment at RatjomoseWastewater Treatment Plant and existing twelvesewage pumping station within Maseru.
The project also comprises the rehabilitation ofMaseru West Industrial ponds and repair of facul-tative pond at Ratjomose.
Procurement of vacuum tankers has beencompleted, refurbishment of existing pump stationhas also been completed and rehabilitation of theponds is about 80% complete.
Medium Term Works
The Medium Term Works comprise Environmentand Social Impact Assessment, Design andSupervision Consultancy and Construction Works.
19
Construction of a reservoir at Ha Ratjomose – Maseru Peri-Urban Phase II Project
An office, reservoir and chlorination house – Mazenod Water Supply Project
Construction of Maqalika Raw Water Pump Station
ii )) EEnnvvii rroonnmmeenntt aanndd SSoocciiaall IImmppaaccttAAsssseessssmmeenntt
The study has already been completed andapproved by National Environmental Secretariat
ii ii )) DDeessiiggnn aanndd SSuuppeerrvviissiioonn CCoonnssuullttaannccyy
The consultant for design and supervision isalready in place. The designs for sewer networkand Wastewater Treatment Plant have alreadybeen completed and all contract documentscompiled and approved by European InvestmentBank and Water and Sewerage Authority.
ii ii ii )) CCoonnssttrruuccttiioonn WWoorrkkss
Short listing of interested companies hasalready been completed and submission oftenders will be in the next financial year.
When completed, the project will extend the sewernetwork to Maqalika, Khubetsoana, Mabote,Tˇsenola, Motimposo and to the proposed ReferralHospital at Lepereng. All the institutions aroundthe area including Makoanyane Barracks willbenefit from this project.
CCoommmmuunniittyy WWaatteerr SSuuppppllyy aanndd SSaanniittaattiioonnPP rroojjeecctt ((LLoott II II)) ffoorr SShheellii llee,, PPeennaa--PPeennaa,,KKhhuubbeelluu aanndd LLiikkoottssii ..
The consultant for this project has already finalisedall the contract documents. The documents havealready been approved by both the World Bank andWASA. Construction will start in the next financialyear.
When completed, the project will install pre-paidmeters to the above villages and the communitywill buy water at cheaper rates than the rates fromthe present water vendors.
WWaatteerr SSuuppppllyy aanndd SSeewweerraaggee TTrreeaattmmeennttFFaaccii ll iitt iieess ttoo MMeettoolloonngg DDaamm aanndd AAssssoocciiaatteeddIInnffrraassttrruuccttuurree
The project comprises a package water treatmentplant and all its components, the construction ofVIP’s to nine villages within the catchment ofMetolong Dam and the improvement of theirwater supply.The package water treatment plantwith all its necessaries is about 40% completewhile the construction of VIP’s in the 9 villages isonly 30% complete. The water supply is 20%complete.
The water from the package treatment plant willsupply the proposed camp during construction ofMetelong Dam and supervision staff.
20
Tour of Three Towns Water Supply and Sanitation Project in TY by EU delegation, NAO,WASA and Community representatives
Engineering, Planning and Development Division
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Package Treatment for Quthing
The package treatment plant for Quthing whichproduces about 1 500 cubic meters per day is about90% complete and when completed it will improvethe quality of water for Quthing and the supply willbe more reliable.
Millennium Challenge Co-operation
The project comprises:
a) Rehabilitation of the existing water supply infra-structure for Qacha’s Nek, Quthing, Mafeteng,Maseru, Leribe, Butha-Buthe, Mokhotlong andMohale’s Hoek.
b) Extension of Reticulation Network for Mazenod
c) New water supply system for Semonkong.
The Project Implementation Unit for this project isalready in place and the Terms of Reference forDesign and Supervisions have already been draftedfor approval by both Millennium Challenge Account-Lesotho and Millennium Challenge Co-operation inWashington.
Geographical Information System (GIS)
The software has been procured but the programcannot be fully utilised this financial year becausethere is a need for training, purchase of additionaldesktops and servers. In addition the system hasintegrated the Hydraulic Model and the process forobtaining services of a Consultant for design andsupervision are under review by the World Bank.
Installation of Pre-paid Meters
Water and Sewerage Authority continues to installpre-paid meters in Maseru. Pre-paid meters wereinstalled at Maseru East and the next areas areMohalalitoe, Lower Thetsane and Thetsane West.Meters for all government houses and public stand-pipes in Leribe have been purchased and instal-lation will be completed in the next year.
Proposed Projects for 2010/2011a) Installation of pre-paid meters for residents of
Qoaling
b) Construction of transmission main from theMaseru Treatment Plant to Medium NorthReservoir at Naleli
c) Upgrading of Feasibility Study for Mapoteng
c) Conceptual Design for Semonkong.
Construction of a pump house at TY,Three Towns Water Supply and Sanitation Project
Tour of Three Towns Water Supply and Sanitation Projectin TY by Community representatives
22
OOppeerraattiioonnss aanndd MMaaiinntteennaannccee DDiivviissiioonn
OOppeerraattiioonnss aanndd MMaaiinntteennaannccee DDiivviissiioonn ccoommpprriisseess ooff tthhee ffooll lloowwiinngg sseeccttiioonnss..
• Maseru Water Production – (Production & transmission of potablewater)
• Maseru Water Distribution – (Reticulation maintenance management)
• 14 Towns – (Management of designated urban centres)
• Network – (Leakage control management)
• Central Laboratory – (Water quality management)
• Maseru Sewerage – (Wastewater management)
• Central Workshop – (Electromechanical repairs management)
The mandate of Operations and Maintenance Division is to produce and distribute potable water and tosafely dispose of wastewater to the environment; in 15 designated urban centres of Lesotho.
Maseru Water Treatment Plant
Mr. Falla Seboko
23
24
WATER PRODUCTION
This year, we managed to produce 15 million m2 ofpotable water against the target of 18 million m2.The short fall of 3 million m2 was as a result of thefollowing reasons:-
• Closing down of some textile industries inMaseru & Maputsoe.
• Scaling down of some textile industries due tothe economic recession (melt down).
• Recycling of waste water by other industries.However on average the demand for all theurban centres was successfully met.
WATER SUPPLY
In order to improve our service delivery level, the2008/2009 financial year has been a remarkableone indeed.
• We managed to implement a Computerisedmaintenance system (PPM) which enables us torespond quickly to reported bursts and leakages.
• A call centre facility operating for 24 hours wasalso commissioned so as to enable an effectiveand efficient use of the Computerised mainte-nance system (PPM). Asbestos cement pipeswere replaced by UPVC pipes in some areaswithin the Maseru City.
Operations and Maintenance Division
Water treatment display during Public Service Day celebrations
Handover of sewage treatment plant at TY by UNIKConstruction and Engineering
25
• We also managed to install stand-by generatorsto ensure continuous water supply in order toaddress power outages which result in watersupply disruptions.
• Non-revenue water for this year was 29%. Therewere initiatives that were kick started so as tolower this figure. They include:
– Leak detection programmes under the super-vision of network management and
– Installation of District Metering Areas (DMA)which is still in progress
WATER QUALITY & WASTEWATER QUALITY
The target set for the 2008/09 Financial Year forpotable water quality was a failure of 4% for bothmicrobiological quality and available chlorine. Thewater samples met the microbiological quality and99% of the samples met the prescribed chlorinecriteria. In order to improve on our waste watereffluent quality 2 wastewater pump stations wererehabilitated. Furthermore Ratjomose wastewatertreatment plant was also rehabilitated and stabili-sation ponds at Roma, Mohale’s Hoek, TY,Maputsoe and Mapoteng were de-sludged.
Financial Performance
The Financial performance for thefinancial year 2008/09, as regardsprofitability, has slightly improved.The Authority has ended up with asurplus on ordinary activitiesamounting to M3.13m comparedto deficit amounting to M2.89m inthe last financial year. The overallnet profit after taxation and prioryear adjustment amounted toM0.711m as compared to net lossamounting to M2.97m in the lastfinancial year 2007/08.
The overall turnover has increasedfrom a figure of M77.67m in2007/08 to a figure of M108.25m in the year2008/2009 and there is a growth of 39.4%. Thisgrowth is across all designated urban centres. Themajor portion of income is from Water andSewerage services as these services are at the coreof the business.
Factors which contributed to this growth includeamong others the tariff review on water and
sewerage services, which waseffective in April 2008. Incomegenerated from water and sewerageincreased by 48% to M97.77m in2008/2009 compared with M66.04min 2007/2008. As far as new serviceconnections are concerned, there wasa growth of 3.6% with an incomefigure of M8m for 2008/2009 ascompared to the figure of M7.73m forthe previous year. This growth rate hasbeen facilitated by the completion ofMaseru Peri-Urban Phase I Project.The project was expected to add 3000new water connections during thefinancial year 2008/09, and the actualnumber of connections ended up
being 5120.
The Textile Industries contributed around 36% ofMaseru Water Billing. Due to global economicdownturn, the Industries demonstrated negativeconsumption pattern since September 2008. Theconsumption has not met expectations as it hasslightly decreased by around 8000 kiloliters whencompared to the previous period. The major
26
Finance Division
Sewage treatment plant at TY
Mrs. ‘Mamots’oane ‘Musa
impact was also due to recycling of waste waterthat is being put in place by some of the wet indus-tries. Other recognisable contributors to revenueare the Domestic Sector, the Government ofLesotho and Businesses/Commercials whichrespectively accounted for 25%, 16% and 17% ofthe total sales during the year ended March 2009.6% is for other categories such as Schools andReligious Institutions.
CONSUMPTION AS PER CATEGORY
As far as operating profit is concerned, there was anotable increase when compared to the previousyear. The operating costs for the year ended March2009 stood at M107.19m, resulting in anoperating profit of M1.07m compared to operatingloss of M7.11m in the previous year. Operatingexpenses were slightly under control particularlyduring this recession period whereby overall costshave been increasing at an alarming rate andoperating income has been decreasing. The majorportion of the operating expenses relate to Power,Chemicals, Reticulation & Plant Maintenance, NewConnections costs, depreciation and manpowercosts, as could be expected in this type of business.
Finance expense for the year was M3.54mcompared with M2.88m in 2007/2008. Theincrease is primarily related to the execution ofMaseru Peri-Urban Phase II Project financed byloans from BADEA and OPEC.
COMMERCIALS (17%)
GOVERNMENT(16%)
27
2008/2009WATER
CONSUMPTION(%)
INDUSTRIES (36%)
OTHERS (6%) DOMESTIC
(25%)
28
Financial Position
FFiixxeedd AAsssseettss
There has been a transfer of completed projectsamounting to M2.895m to fixed assets during theyear ended March 2009. The additions are largelyattributable to assets in construction throughout alldesignated urban centres. There are also someadditions on Plant and Machinery, Vehicles, andoffice Furniture and Equipment
There are on-going projects which have increasedthe Work-In-Progress (WIP) figure to M270.53m.The bulk of the WIP figure is in respect of fiveprojects, and can be summarised as follows:
• Maseru Peri-Urban Project Phase II (M48.35m),financed by BADEA, OPEC and GOL.
• Three Towns Water Supply and SanitationProject (M73.99m), financed by EuropeanUnion.
• Water Sector Improvement Project (M24.02m),financed by World Bank and GOL
• Tikoe-Thetsane Industrialisation Project II(M35.84m) financed by GOL
• Pre-paid Meters Project (M4.14m) financed bythe Standard Lesotho Bank Ltd.
Net Current Assets
The Net Current Asset position of the Authority haspositively moved to a figure of M71.31m at the endof the reporting period, with the current assetfigure of M116.83m against the current liabilities ofM45.51m. Current Liabilities increased at a higherrate than Current Assets when compared to the lastfinancial year 2007/2008. This increase patternresulted in decrease on Current Ratio from 3.36times for 2007/2008 to 2.57 times for 2008/2009.However, the reported net current asset of theAuthority is still in a comfortable liquidity position.There were a number of challenges facing theAuthority in terms of income generated asmentioned above which affected cash collection aswell. The Authority is putting in place controlmeasures to overcome these challenges, such as,empowering legal office for debt collection as wellas disconnection of overdue accounts. However
disconnected accounts still pose a problem as amajor portion of the debtors do not repay theirdebts and do not subsequently officially arrangefor the services to be reinstated. Concerted effortswere made to follow up on the disconnectedcustomers and to encourage them to pay theoutstanding debts. Conversion of post paid standpipes to prepaid stand pipes as well as installationof prepaid meters to some parts of Maserudomestic consumers has also somewhat positivelycontributed to the improved collection becauseconsumers pay for their consumption in advanceinstead of the Authority awaiting for a month oreven more to collect cash for the service alreadyprovided.
Cash Flow
Cash generated from continuing operating activ-ities increased to M4.923m in 2008/2009compared to M0.384m in 2007/2008. The majorportion is cash collected from water and sewerageservices. Overall collection rate stood at 99% ofwater and sewerage billed and the target was 95%as per Performance Agreement. Net cash has beenincreased to M1.382m after taking into consider-ation interest charged on loans.
Net cash utilised in investing activities increased toM174.24m in 2008/2009 compared to M25.21min 2007/2008. This amount consists of completedprojects transferred to fixed assets of M2.895m andadditions such as plant and machinery, officefurniture and equipment, vehicles as well as assetsin construction of M189.936m.
Net cash from financing activities increased toM182.87m in 2008/2009 compared to M23.21min 2007/2008. Government of Lesotho contribu-tions and grants contributed more towards theincrease. The funding was from Governmentcounterpart financing projects such as Maseru Peri-Urban Water Supply, Lesotho Water SectorImprovement Project Phase I, Three Towns WaterSupply and Sanitation, Maseru Waste Water Projectand others.
Overall net movement for the year increased toM10.014m from adverse movement of M4.49m in2007/2008.
Finance Division
29
Investments
The Authority continues to invest in short terminvestments such as Money Markets and Treasurybills, which yield higher returns than otherinvestment instruments available in the localfinancial markets. This is part of a strategy to buildreserves that will become available for capitalexpenditure programme.
Customer Service
CCuussttoommeerrss,, bbiill ll iinngg aanndd ddeebbtt ccoolllleeccttiioonn
The Authority places great importance on customerrelations. It manages the sales, billing, cashcollection and debt management activities andsystems for approximately 50 000 domestic andbusiness customers in Lesotho and has responsibilityfor improving the quality of service and the range ofservices provided to these customers. The Authority’saim is to continually improve the existing level ofcustomer satisfaction, and to create value from itscustomer relationships. At present, the Authority billsare around 11.54 million kiloliters of water per year ofwhich 32% is from domestic customers while 38% isfrom Industries. Its activities include treatment of waterand wastewater and advice on controlling leakages aswell as advising customers’ about monitoring ofleakages at their premises. It also has responsibility formanaging ongoing relationships with these customersand for growing the customer base.
PP rree--ppaaiidd MMeetteerriinngg SSyysstteemm
The domestic pre-paid meters have impactedpositively in enabling WASA’s customers to monitortheir consumption of water and also to identifyleakages as the system has the features to detectusage of water throughout on a 24 hour basis. Allstand pipes in Maseru have been converted frompost paid to pre-paid metering system. Customerscan purchase water from WASA head office Maseru.There are also two additional pay-points for prepaidsystem in Maseru, these are, Engine Filling Station atLake Side and Engine Filling Station near ShopriteLNDC Centre. The initial preparation to convert allthe public standpipes in Hlotse to pre-paid startedduring 2008/2009, as an attempt to minimise theincidence of non-payment of debts by some selectedcommunities which have been operating post-paidstandpipes and for Government Houses at Hlotse.The actual installation will be carried out duringfinancial year 2009/2010.
Financial Accounting System
Another improvement worth to mention isupgrading of Financial Accounting system. Theupgrading was done to facilitate interface withother information systems such as ComputerisedMaintenance Management system, Billing andcollection system and Geographical Informationsystem; in order to ease flow of information as wellas accuracy.
Analysis of Water Sales
VVoolluummee ooff wwaatteerr bbii ll lleedd iinn kkii llooll iitteerrss iinn22000077//0088 aanndd 22000088//0099
DO
MES
TIC
IND
UST
RIE
S
CO
MM
ERC
IALS
GO
VER
NM
ENT
OTH
ERS
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
DO
MES
TIC
IND
UST
RIE
S
CO
MM
ERC
IALS
GO
VER
NM
ENT
OTH
ERS
0
5000000
10000000
15000000
20000000
25000000
AAmmoouunntt ooff WWaatteerr SSaalleess iinn MMaalloottii ffoorr22000077//0088 aanndd 22000088//0099
2007/20082008/2009
2007/20082008/2009
30
REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF WATER AND SEWERAGE AUTHORITY
FOR THE YEAR ENDED 31 MARCH 2009
Moteane, Quashie and Associates Chartered Accountants, under Section 15(1) of the Audit Act 1973, haveaudited the accompanying financial statements of Water and Sewerage Authority which comprise thebalance sheet as at 31 March 2009 and the income statement, statement of changes in equity and cashflow statement for the year then ended, and a summary of significant accounting policies and otherexplanatory notes as set out on pages 32 to 44.
Director's Responsibility for the Financial Statements
Directors are responsible for the preparation and fair presentation of these financial statements in accordancewith International Financial Reporting Standards. This responsibility includes: designing, implementing andmaintaining internal control relevant to the preparation and fair presentation of financial statements that arefree from material misstatement, whether due to fraud or error; selecting and applying appropriateaccounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. The audit hasbeen conducted in accordance with International Standards on Auditing. Those standards require auditorsto comply with ethical requirements and plan and perform the audit to obtain reasonable assurancewhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor's judgement, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments; the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec-tiveness of the entity's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and reasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.
I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion.
Opinion
In my opinion, the financial statements present fairly, in all material respects, the financial position of theauthority at 31 March 2009 and of its financial performance and its cash flow for the year then ended inaccordance with International Financial Reporting Standards and in the manner required by the LesothoWater and Sewerage Order, 1991 as amended.
Emphasis of Matter
Without qualifying my opinion, I draw attention to the non-inclusion of the financial affairs of SanitationServices Unit in the financial statements of the authority even though the Sanitation Services Unit is underthe management of Water and Sewerage Authority.
LLuuccyy.. LL.. LLiipphhaaffaa ((MMrrss)) Auditor General
20 January 2010
Office of the Auditor GeneralP.O. Box 502, Maseru 100, Lesotho
4th Floor * Finance House * High Court Road * Maseru * LesothoTelephone (+266) 22323904/2231427 * Fax (+266) 22310366
E-mail : [email protected]
31
DIRECTORS STATEMENT OF RESPONSILITY AND APPROVAL
The Board of Directors is required to maintain adequate accounting records and is responsible for the contentand integrity of the financial statements and related financial information included in this report. It is itsresponsibility to ensure that the financial statements fairly present the state of affairs of the organisation atthe end of the financial year and the results of its operations and cash flows for the year ended, and inconformity with International Financial Reporting Standards. The external auditors are engaged to expressan independent opinion on the financial statements.
The financial statements are prepared in accordance with International Financial Reporting Standards andare based upon appropriate accounting policies consistently applied and supported by reasonable andprudent judgments and estimates.
The Board of Directors acknowledges that it is ultimately responsible for the system of internal financialcontrol established by Water and Sewerage Authority (WASA) and places considerable importance onmaintaining a strong control environment. To enable it to meet these responsibilities, the Board of Directorssets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. Thestandards include the proper delegation of responsibilities within a clearly defined framework, effectiveaccounting procedures and adequate segregation of duties to ensure an acceptable level of risk. Thesecontrols are monitored throughout WASA and all employees are required to maintain the highest ethicalstandards in ensuring WASA's business is conducted in a manner that in all reasonable circumstances is abovereproach. The focus of risk management in WASA is on identifying, assessing, managing and monitoring allknown forms of risk across WASA. While operating risk cannot be fully eliminated, WASA endeavors tominimize it by ensuring that appropriate infrastructure, controls, systems and ethical behavior are appliedand managed within predetermined procedures and constraints.
The Board of Directors is of the opinion that the system of internal control provides reasonable assurance thatthe financial records may be relied on for the presentation of the financial statements. However, any systemof internal financial control can provide only reasonable assurance and not absolute assurance againstmaterial misstatement or loss.
The Board of Directors has reviewed WASA's cash flow forecast and budgets for the year to 31 March 2009,and is satisfied that WASA has, or has access to adequate resources to continue in operational existence forthe foreseeable future.
The external auditors are responsible for independently reviewing and reporting on WASA's financialstatements. The financial statements have been examined by WASA's external auditors and their reportis given on page 30.
These Financial Statements set out on pages 32 to 44 were approved by the Board, and signed on its behalf by:-
CChhaaiirrmmaann ooff tthhee BBooaarrdd CChhiieeff EExxeeccuuttiivvee OOffffiicceerr
DDaattee DDaattee
Statement of Board of Directors
32
IINNCCOOMMEE 22000099 22000088
NNootteess MM''000000 MM''000000
Operating Profit/(Loss) 16 11 006655 (7 110)
Net interest received/(charged) 22 006611 4 216
Interest received 1155 116622 10 802
Provision for impaired debts ((99 556600)) (3 706)
Interest charged ((33 554411)) (2 880)
Net profit before taxation 33 112266 (2 894)
Taxation 2.3 –– –
33 112266 (2 894)
Prior year adjustment 15 ((22 441155)) (76)
PP rrooffiitt//((LLoossss)) aatt eenndd ooff yyeeaarr 771111 (2 970)
Income and Expenditure StatementFor the year ended 31 March 2009
33
22000099 22000088
NNootteess MM''000000 MM''000000
AASSSSEETTSS
NNoonn--ccuurrrreenntt aasssseettss
Property, plant and equipment 3 554488 552211 369 770
CCuurrrreenntt aasssseettss 111166 882255 90 917
Inventory 4 66 994466 4 887
Accounts receivable 5 5599 007722 46 348
Short-term investments 6 3322 559955 22 071
Bank and cash 7 1188 221122 17 611
TTOOTTAALL AASSSSEETTSS 666655 334477 460 687
CCAAPP IITTAALL AANNDD LL IIAABBIILL IITT IIEESS
CCaappiittaall aanndd RReesseerrvveess 660066 771166 424 212
GOL funding 8 334499 005544 339 369
GOL grant 9 330099 222211 137 113
Accumulated funds 10 ((4422 668833)) (43 394)
Reserves 11 ((88 887766)) (8 876)
NNoonn--ccuurrrreenntt ll iiaabbii ll ii tt iieess 1133 111188 9 431
Provisions for severance pay 12 88 667711 6 062
Long-term loans 13 44 444477 3 369
CCuurrrreenntt LLiiaabbii ll ii tt iieess 4455 551133 27 043
Bank 44 446633 3 351
Accounts payable 14 4411 005500 23 692
TTOOTTAALL CCAAPPIITTAALL AANNDD LL IIAABBIILL IITT IIEESS 666655 334477 460 687
Balance SheetFor the year ended 31 March 2009
34
AAccccuummuullaatteedd
eexxcceessss
GGOOLL GGOOLL eexxppeennddiittuurree
oovveerr
RReesseerrvveess iinnccoommee TToottaall
MM MM MM
BBaallaannccee aatt 11 AApprrii ll 22000088 339 369 137 113 (8 876) (43 394) 424 212
Net profit for the year – – – 711 711
Corrections of deposits wrongly
Deposited in GOL funding A/C –
GOL funding 9 685 173 373 – – 183 058
Grant amortised – (1 265) – – (1 265)
Revaluation Reserve – – –
BBaallaannccee aatt 3311 MMaarrcchh 22000099 334499 005544 330099 222211 ((88 887766)) ((4422 668833)) 660066 771166
Statement of Changes in Capital and ReservesFor the year ended 31 March 2009
35
22000099 22000088MM''000000 MM''000000
CCAASSHH GGEENNEERRAATTEEDD FFRROOMM OOPPEERRAATTIINNGG AACCTTIIVVIITTIIEESS
Net Profit before interest charges 66 666677 (14)
AAddjjuussttmmeenntt ffoorr:: Depreciation/provision for reticulation assets maintenance 1100 331111 9 771 Depreciation of disposed asset 333300 – (Profit)/Loss on fixed assets disposal 66 (225)Provision for severance pay 22 660099 59 Write offs & adjustments ((00 )) 17 Prior year adjustment ((22 441155)) (76)Interest income ((1155 116622)) (10 802)
22 334477 (1 270)CChhaannggeess iinn wwoorrkkiinngg ccaappiittaall:: Decrease/(Increase) in inventory ((22 005599)) (713)Decrease/(Increase) in receivables ((1122 772244)) (1 380)Decrease)/Increase in payables 1177 335588 3 747
Cash generated from operations 44 992222 384 Interest paid ((33 554411)) (2 880)
11 338800 (2 496)
CCAASSHH UUTTIILLIISSEEDD IINN IINNVVEESSTTIINNGG AACCTTIIVVIITTIIEESS
Purchase of tangible fixed assets ((118899 993377)) (36 233)Disposal of Asset 554422 – Proceeds from sale of fixed assets ((66)) 225 Interest received 1155 116622 10 802
((117744 223399)) (25 206)
CCAASSHH FFRROOMM FFIINNAANNCCIINNGG AACCTTIIVVIITTIIEESS
Increase in GOL contribution/grant 118811 779933 22 250 Increase/(Decrease) in long term liabilities 11 007788 960
118822 887711 23 210
NNEETT MMOOVVEEMMEENNTT FFOORR TTHHEE YYEEAARR 1100 001144 (4 492)
CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS AATT BBEEGGIINNNNIINNGG OOFF YYEEAARR 3366 333300 40 822
CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS AATT EENNDD OOFF YYEEAARR 4466 334444 36 330
Cash Flow StatementFor the year ended 31 March 2009
1. BACKGROUND
The Lesotho Water Sewerage and Authority (WASA) was established under the Lesotho Water and
Sewerage Authority Order No.29 of 1991(as amended). Under this Order WASA acquired all fixed
assets and functions operated by the former Water and Sewerage Branch of the Ministry of Water,
Energy and Mining, with effect from 1 April 1992.
2. STATEMENT OF ACCOUNTING POLICIES
2.1 Basis of Accounting
The financial statements have been prepared on the historic cost basis with the exception of fixed
assets acquired prior to September 1991.
2.2 Turnover
Turnover represents amounts invoiced to customers for services provided.
2.3 Taxation
The Water and Sewerage was granted autonomous status on ! April 1992 and as such is liable for
Corporation Tax at the applicable rate, on its assessed taxable profit.
It is expected that no liability to taxation will arise for the year based on the reported results of the
previous years.
2.4 Depreciation and valuation of assets
22..44..11 RReevvaalluuaattiioonn ooff ff iixxeedd aasssseettss
The fixed assets comprising of Land and Buildings,Structures Plant and Machinery other assets were
revalued by Lesotho Lands and Property Consultants towards the financial year ended March 2008.
The revaluations have been incorporated into the Authority's accounts.
22..44..22 RReett iiccuullaatt iioonn
– The underground network of water supply mains and sewers are treated as specialised structures
for accounting purposes.
– Expenditure on reticulation assets which relate to increases in capacity or enhancements of the
network are shown as additions and entered at cost.
– Expenditure on maintaining the operating capacity of the network is charged as an operating cost.
– The transfer value for reticulation assets shown in the fixed assets statement is the valuation deter-
mined on the basis of depreciation replacement cost by Quantum Consultants (Lesotho) (Pty) in
August 1991.
– Depreciation is provided on a straight line basis over the estimated useful/economic life of the
reticulation assets, which has been estimated at 50 years.
36
Statement of accounting Policies
37
2.4 Depreciation and valuation of assets (continued)
22..44..33 OOtthheerr aasssseettss
– Other assets, which include buildings, operational structures, plant and equipment are shown ateither the valuation determined on the basis of depreciated replacement cost by QuantumConsultants in August 1991, or at cost if acquired after August 1991.
– Freehold land is not depreciated.
– For other assets depreciation is provided on a straight line basis over the estimated useful/economic life for each group of assets, which are principally as follows:-
BBuuii llddiinnggss,, ooffff iicceess hhoouusseess
Specialised operational structures 15 - 40 yearsPlant and Machinery 8 - 15 yearsVehicles 5 - 7 yearsOffice equipment, including computers 3 - 6 years
– Depreciation normally commences in the financial year following commissioning, althoughvehicles and other assets with a short useful life are depreciated from the date of acquisition.
22..44..44 MMiinniimmuumm CCaappiittaall iissaattiioonn
Expenditure on capital projects or acquisitions up to M10,000 is charged to the Profit and LossAccount as operating costs with exception of printers.
22..44..55 CCaappiittaall wwoorrkk--iinn--pprrooggrreessss
Expenditure values shown for works in the course of construction comprise materials, labour,transport and attributable overheads. On commissioning the total cost is capitalised and depreciatedover the appropriate useful life.
2.5 Provision
Provisions are recognised when the company has a present legal or constructive obligation as a resultof past events, and it is probable that an outflow of resources embodying economic benefits will berequired to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
2.6 Inventory
Inventory is stated at either cost, or market value if lower, less any provision necessary to recognisedamage or obsolescence.
2.7 Grants
Grants are accounted for and recognised in the income and expenditure account in line with IAS 20.
2.8 Rounding
All items are shown to the nearest one thousand Maloti, therefore a - in the column indicates eitherno transaction or totals of less than five hundred Maloti.
Statement of accounting Policies
38
Notes to the Financial StatementsFor the year ended 31 March 2009
33.. PPRROOPPEERRTT YY,, PPLLAANNTT AANNDD EEQQUUIIPPMMEENNTT
Owned assets
Land and buildings 27 245 1 182 26 063 26 676 561 26 115
Specialised operational structures 121 855 23 425 98 430 120 894 20 407 100 487
Reticulation 204 826 69 905 134 921 203 248 66 494 136 754
Plant and machinary 13 637 2 275 11 363 10 879 1 132 9 747
Motor vehicles 11 468 7 220 4 248 8 779 5 404 3 375
Office equipment and furniture 5 340 2 369 2 971 3 491 1 736 1 755
Assets in construction 270 526 – 270 526 91 537 – 91 537
665544 889988 110066 337777 554488 552211 446655 550044 9955 773344 336699 777700
The carrying amounts of property, plant and equipment can be reconciled as follows:
CCaarrrryyiinngg TTrraannssffeerr CCaarrrryyiinngg
FFOORR TTHHEE aammoouunntt aatt CCoosstt ttoo AAccccuummuullaatteedd aammoouunntt
PPEERRIIOODD EENNDDEEDD bbeeggiinnnniinngg aaddjjuussttmmeennttss ccoommpplleetteedd ddeepprreecciiaattiioonn aatt eenndd
3311 MMAARRCCHH 22000099 ooff ppeerriioodd rreevvaalluuaattiioonn pprroojjeeccttss AAddddiitt iioonnss DDiissppoossaall DDeepprreecciiaattiioonn AAddjjuussttmmeenntt ooff ppeerriioodd
Owned assets
Land and buildings 26 115 – 356 213 – 621 – 26 063
Specialised operational
structures 100 487 – 961 – – 3 018 – 98 430
Reticulation 136 754 – 1 578 – – 3 411 – 134 921
Plant and machinary 9 747 – 2 758 – 1 143 – 11 363
Motor vehicles 3 375 – – 3 232 (542) 1 484 332 4 248
Office equipment
and furniture 1 755 – – 1 849 – 633 – 2 971
Assets in construction 91 537 – (2 895) 181 884 – – – 270 526
336699 777700 –– 00 118899 993366 ((554422)) 1100 331111 333322 554488 552211
39
22000099 22000088MM''000000 MM''000000
44.. IINNVVEENNTTOORRYY
Cost 77 228855 5 271 Provision for obsolete stock ((333399)) (384)
66 994466 4 887
55.. AACCCCOOUUNNTTSS RREECCEEIIVVAA BB LL EE
Trade debtors 7711 558866 49 754 Miscellaneous debtors 44 778899 5 680 Postal Services 224444 466 Cairomatic - Advance 11 116611 1 161 Sanitations Unit 11 880077 744 Shoprite Services 770099 665 Roma drought emergency 331177 317 CEC Advance 22 112255 2 098 Staff debtors 118811 55 Staff housing loan 661122 989 Prepaid Interest - GOL 115588 158 Withholding tax 5588 78 Other debtors 770033 –
8844 444499 62 165 Less: Provision for doubtful debts ((2255 337777)) (15 817)
5599 007722 46 348
66.. SSHHOORRTT--TTEERRMM IINNVVEESSTTMMEENNTTSS
Treasury bills (Central Bank) 66 666644 8 627 Standard Bank Money Markets 2255 993311 13 444
3322 559955 22 071
77.. BBAANNKK AANNDD CCAASSHH
Lesotho Bank Call Accounts 1188 220044 17 598 Cashiers 88 13
Sub-total 1188 221122 17 611 Lesotho Bank Current Account (note.) ((44 446633)) (3 351)
1133 774499 14 260
Note: A sweeping facility has been put in place to ensure that short-term current accounts cash deficits are immediately corrected.
Notes to the Financial StatementsFor the year ended 31 March 2009
40
88.. GGOOVVEERRNNMMEENNTT OOFF LLEESSOOTTHHOO FFUUNNDDIINNGG
Government contribution to WASA representing the valuation of net assets of the formerWater and Sewerage Branch (as specified in the Second Schedule of the Lesotho Water and Sewerage Authority Order of 1991) at 1st April 1992, plus projects under construction,funded by the Government of Lesotho on behalf of WASA.
22000099 22000088MM''000000 MM''000000
Balance brought forward (Re-stated) ((1100 221133)) (13 480)Additions during the year 99 668855 3 267
((552288)) (10 213)
99.. GGOOVVEERRNNMMEENNTT OOFF LLEESSOOTTHHOO GGRRAANNTT
GOL grant represents debt forgiveness by the GOL analyzed as follows:
Balance at 1st April 113377 111133 118 130 Industrialisation loan ––
W-I-P 3399 449922 97 149 Completed projects 9977 662211 20 981
Additions during the year 117733 337733 19 420 Transfer from long-term loans (reallocation) –– – Amortisation: Completed projects ((11 226655)) (437)
Interest forgiveness (note) – –
330099 222211 137 113
Note:The interest on Long-term loans cancelled by Government of Lesotho, was capitalised at the time of cancellation with the intention of amortising it according to the useful life of the financed assets. Due to the difficulty of apportioning the accumulated interest to the variousprojects which the loans financed, the interest was charged to the Income Statement in total at the end of March 2007.
1100.. AACCCCUUMMUULLAATTEEDD DDEEFFIICCIITT
Balance at 1st April ((4433 339944)) (40 424)Net profit/(loss) for the year 33 112266 (2 894)Prior year adjustment (Note 16.) ((22 441155)) (76)
((4422 668833)) (43 394)
1111.. RREESSEERRVVEESS
Revaluation reserve ((99 000055)) (9 083)General reserve 112299 207
((88 887766)) (8 876)
Notes to the Financial StatementsFor the year ended 31 March 2009
41
22000099 22000088MM''000000 MM''000000
1122.. PPRROOVVIISSIIOONN FFOORR SSEEVVEERRAANNCCEE PPAAYY
An amount equal to 90% of the provision for 88 667711 6 062 severance pay has been classified as long -term liabilities. The basis used is the annualstaff turnover. 88 667711 6 062
1133.. LLOONNGG TTEERRMM LLIIAABBIILLIITTIIEESS
1133..11 SSttaannddaarrdd LLeessootthhoo BBaannkk LLooaann 33 448877 2 409
A loan advanced by the Standard Lesotho Bank to financethe Pre-paid system project. The loan is payable over a period thirty six months at an interest rate of 2% per annum. Repayment of the loan will commence upon completion of the project.
1133..22SSttaannddaarrdd LLeessootthhoo BBaannkk LLooaann 996600 960
A loan advanced by the Standard Lesotho Bank to financethe Purchase of two excavators. The loan is payable over a period of sixty months at an interest rate of 2% per annum.
Balance 44 444477 3 369
1144.. AACCCCOOUUNNTTSS PPAAYYAABBLLEE AANNDD AACCCCRRUUAALLSS
Accrued expenses 22 336600 3 000 Customers' deposits 44 554433 4 118 Due to contractors 1144 668866 2 680 Interest payable to the government 1100 882288 7 781 Payment received in advance 224477 247 Provision for severance pay 996644 674 Trade creditors 224466 246 Vat control 113388 197 Gratuity Provision 66 554455 4 506 Unclaimed salaries 11 1 Income Tax Deducted 8855 4 Audit fees -- – Other creditors 440088 238
4411 005500 23 692
Notes to the Financial StatementsFor the year ended 31 March 2009
42
Notes to the Financial StatementsFor the year ended 31 March 2009
22000099 22000088MM''000000 MM''000000
1155.. PPRRIIOORR YYEEAARR AADDJJUUSSTTMMEENNTTSS
Interest payable ((112244)) 124 Provision for gratuity - 2006/07 112277 (127)Accumullated deprciation on vehicles from Prjocets (773) –– Provision for Severance Pay - 2007/2008 ((11 664455)) – Mokhotlong Reh. Exp. Capitalised in error –– – Reversal of incorrect sewer charges –– – Write - off of sewer charges – Interest charged on debtors - March 2006 –– – Write - off of unreconciled Accumulated P & L –– – VAT - March 2006 –– – Reversal of partly paid receipts –– (73)
((22 441155)) (76)
1166.. IINNCCOOMMEE
Water and Sewage charges 9977 776655 66 036 New service connection 88 000033 7 727 Gain on disposal ((66 )) 225 Other income 22 449900 3 678
110088 225511 77 667
EEXXPPEENNDDIITTUURREE
Manpower costs 4499 009944 37 736 Electricity 99 332200 7 766 Reticulation & plant maintenance 77 228800 5 362 Chemicals 44 004444 3 483 Transport 33 661188 2 830 New connections 77 335522 4 674 Telephone, stationery, postage 22 550055 2 052 Rents, Security & Insurance 33 229944 2 964 Training & travel expenses 22 880022 1 696 Directors fees 226622 279 Audit fees 111199 112 Office equipment 11 669944 1 211 Other expenses (including write-offs) 55 220066 4 533 Rates 225566 256 Stock adjustment account 33 00 52 Depreciation 1100 331111 9 771
110077 118866 84 777
OOppeerraattiinngg pprrooffiitt ffoorr tthhee yyeeaarr 11 006655 (7 110)
22000022//0033 22000033//0044 22000044//0055 22000055//0066 22000066//0077 22000077//0088 22000088//0099
WWAASSAA IINNCCOOMMEE SSTTAATTEEMMEENNTT
Turnover 44 196 50 852 61 672 65 706 73 830 77 667 108 252
Less: Operating expenses 43 020 49 247 60 240 64 709 71 714 84 777 107 187
OOppeerraattnngg pprrooffiitt//lloossss 11 117766 11 660055 11 443333 999977 22 111166 ((77 111100)) 11 006655
OOtthheerr iinnccoommee//eexxppeennssee
Add: Interest received 1 159 5 370 5 517 4 144 9 010 10 802 15 162
Interest - Debt forgiveness – 11 932
Provision for doubtfull debt – 4 064 3 706 9 560
NNeett pprrooffiitt bbeeffoorree ffiinnaanncciinngg ccoossttss 22 333355 66 997755 66 995500 1177 007733 77 006622 ((1144)) 66 666677
FFiinnaanncciinngg ccoossttss 44 774477 44 116677 11 556611 22 111166 22 553377 22 888800 33 554411
NNeett pprrooffiitt//lloossss ffoorr tthhee yyeeaarr ((22 441122)) 22 880099 55 338899 1144 995577 44 552255 ((22 889944)) 33 112266
Prior year adjustments (5 241) (1 305) 514 (114) (688) (76) (2 415)
NNeett pprrooffiitt//((lloossss)) aatt eenndd ooff yyeeaarr ((77 665533)) 11 550033 55 990044 1144 884433 33 883377 ((22 997700)) 771111
BBAALLAANNCCEE SSHHEEEETT
AASSSSEETTSS
NNoonn--ccuurrrreenntt aasssseettss
Property, plant and equipment 272 524 292 552 301 544 332 681 352 448 369 770 548 521
CCuurrrreenntt aasssseettss 45 963 47 345 78 518 77 372 93 168 90 917 116 826
Inventory 3 014 3 312 4 023 3 838 4 174 4 887 6 946
Accounts receivable 29 298 29 362 36 162 37 838 44 968 46 348 59 073
Short-term investments 5 466 7 446 15 356 18 465 22 299 22 071 32 595
Bank and cash 8 185 7 225 22 977 17 231 21 727 17 611 18 212
TTOOTTAALL AASSSSEETTSS 331188 448877 333399 889977 338800 006622 441100 005533 444455 661166 446600 668877 666655 334477
CCAAPPIITTAALL AANNDD LLIIAABBIILLIITTIIEESS
CCaappiittaall aanndd rreesseerrvveess 235 198 320 149 357 471 381 567 413 938 424 212 606 716
GOL funding 301 580 305 673 307 530 319 967 336 103 339 369 349 055
GOL grant – 79 355 108 916 105 732 118 130 137 113 309 221
Accumulated funds (66 511) (65 008) (59 104) (44 261) (40 424) (43 394) (42 683)
Reserves 129 129 129 129 129 (8 876) (8 876)
NNoonn--ccuurrrreenntt ll iiaabbiill iittiieess 59 617 4 891 5 425 8 614 8 530 9 431 13 118
Provision for severence pay 4 406 4 891 5 425 5 582 6 121 6 062 8 671
Medium term liabilities (GOL) 6 593 – – – – – –
Long term loans 48 618 – – 3 032 2 409 3 369 4 447
CCuurrrreenntt ll iiaabbiill iittiieess 23 672 14 857 17 166 19 872 23 148 27 044 45 513
Bank 2 232 1 327 1 980 2 499 3 203 3 351 4 463
Accounts payable 20 998 13 088 14 744 17 373 19 945 23 693 41 050
Treasury trading account 442 442 442 – – – –
TTOOTTAALL CCAAPPIITTAALL && LLIIAABBIILLIITTIIEESS 331188 448877 333399 889977 338800 006622 441100 005522 444455 661166 446600 668877 666655 334477
43
Summary of WASA’s performanceffoorr 77 yyeeaarrss ttoo 22000088//22000099
44
22000022//0033 22000033//0044 22000044//0055 22000055//0066 22000066//0077 22000077//0088 22000088//0099
CCAASSHH FFLLOOWW SSTTAATTEEMMEENNTT
CCAASSHH GGEENNEERRAATTEEDD FFRROOMM
OOPPEERRAATTIINNGG AACCTTIIVVIITTIIEESS
Net profit before interest charges 6 976 6 950 5 141 7 062 (14) 6 668
Adjustment for:
Depreciation – 8 531 10 084 9 225 10 678 9 771 10 311
Understated depreciation 330
Amortization of the grant
(Profit)/Loss on fixed assets disposal (185) – (447) (234) (225) 6
Accumulated loss diff. – – –
Write-offs & adjustments 17 –
Provision for severance pay – 485 534 157 539 59 2 610
Prior year adjustment – (1 305) 515 (114) (688) (76) (2 415)
Interest Income (5 370) (5 517) (4 144) (9 010) (10 802) (15 162)
9 131 12 566 9 818 8 347 (1 270) 2 348
CChhaannggeess iinn wwoorrkkiinngg ccaappiittaall::
Decrease/(increase) in inventory (298) (711) 185 (336) (713) (2 059)
Decrease/(increase) in receivables (63) (6 798) (1 676) (7 130) (1 380) (12 724)
(442)
(Decrease)/increase in payables (7 910) 1 656 2 629 2 572 3 747 17 358
CCaasshh ggeenneerraatteedd ffrroomm ooppeerraattiioonnss 885599 66 771111 1100 551144 33 445533 338855 44 992233
Interest paid (4 167) (1 561) (2 116) (2 537) (2 880) (3 541)
(3 308) 5 150 8 398 916 (2 495) 1 382
CCAASSHH UUTTIILLIISSEEDD IINN IINNVVEESSTTIINNGG AACCTTIIVVIITTIIEESS
Purchase of tangible fixed assets (30 595) (19 076) (40 400) (30 520) (36 233) (189 937)
Reticulation assets provision 2 036 – 38 74 – 542
Proceeds from sale of fixed assets 185 – 447 234 225 (6)
Increase in short term investments (1 980)
Interest Received 5 370 5 517 4 144 9 010 10 802 15 162
CCAASSHH UUTTIILLIISSEEDD IINN IINNVVEESSTTIINNGG AACCTTIIVVIITTIIEESS ((2244 998844)) ((1133 555599)) ((3355 777711)) ((2211 220022)) ((2255 220066)) ((117744 223399))
CCAASSHH FFRROOMM FFIINNAANNCCIINNGG AACCTTIIVVIITTIIEESS
Repayment of medium term liabilities (6 593) – – – – –
Increase in GOL contribution/grant 83 448 31 418 21 185 28 534 22 250 181 793
Increase/(Decrease) in long term liabilities (48 618) – 3 032 (623) 960 1 078
CCAASSHH FFRROOMM FFIINNAANNCCIINNGG AACCTTIIVVIITTIIEESS 2288 223377 3311 441188 2244 221177 2277 991111 2233 221100 118822 887711
NNEETT MMOOVVEEMMEENNTT FFOORR TTHHEE YYEEAARR ((5555)) 2233 000099 ((33 115566)) 77 662255 ((44 449922)) 1100 001144
CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS AATT BBEEGGIINNNNIINNGG 55 995533 1133 334444 3366 335533 3333 119988 4400 882222 3366 333300
CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS AATT EENNDD 55 889988 3366 335533 3333 119977 4400 882222 3366 333300 4466 334444
Summary of WASA’s performanceffoorr 77 yyeeaarrss ttoo 22000088//22000099
Water & Sewerage Authority
BR ADVERTISING (+27) 82 577 6059
P O Box 426, Maseru, 100 LesothoTel: +266 22 312 449Fax: +266 22 310 006
24 Hours: +266 22 313 943Tollfree No: 800 22 011
e-mail: [email protected] or [email protected]: www.wasa.co.ls
Photography: Khotso Letsatsi, Lineo Moqasa and Brian Radford
Produced by the Public Relations Office
