ZINWA Integrated Report 2017 PDF

Contents
WHO IS ZINWA 2
STATEMENTS OF DIRECTION 3
CHAIRMAN’S STATEMENT 5
CHIEF EXECUTIVE OFFICER’S REPORT 9
CORPORATE GOVERNANCE REPORT 17
SUSTAINABILITY REPORT 25
OVERVIEW OF STRATEGIC OBJECTIVES 25
RISK MANAGEMENT 27
HUMAN CAPITAL MANAGEMENT 29
CORPORATE SOCIAL RESPONSIBILITY 31
PROJECTS COMPLETED DURING 2017 33
MAJOR PROJECTS UNDERWAY 35
DROUGHT MITIGATION PROJECTS 35
AUDITED FINANCIAL STATEMENTS 41
INDEPENDENT AUDITOR’S REPORT 42
STATEMENT OF FINANCIAL POSITION 46
STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME 47
STATEMENT OF CHANGES IN EQUITY 48
STATEMENT OF CASH FLOWS 49
NOTES TO THE FINANCIAL STATEMENTS 50
ZINWA INTEGRATED REPORT 2017 | 1

WHO IS ZINWA
The Zimbabwe National Water Authority (ZINWA) is a wholly Government owned entity
formed in 2000 following the promulgation of the ZINWA Act (Chapter 20:25). It falls
under the Ministry of Environment, Water and Climate. Its mandate is derived from
the ZINWA Act (Chapter 20:25) and the Water Act (Chapter 20:24). ZINWA has the
mandate to sustainably and efficiently plan, develop and manage the country’s water
resources. This entails the construction of water storage and conveyance infrastructure,
management of groundwater resources and the equitable distribution of the country’s
surface water held in the various dams around Zimbabwe. In addition, ZINWA also runs
534 water treatment plants that supply potable water to small towns, rural service
centres and growth points.
2 | ZINWA INTEGRATED REPORT 2017

STATEMENTS OF DIRECTION
OUR MISSION
To provide universal and affordable water security
OUR VISION
To sustainably deliver quality water to all our communities (rural and urban) whilst
making strategic water infrastructure investments that facilitate human and economic
development
OUR VALUES
Integrity
We are committed to high ethical and moral standards and honesty
Professionalism
We promise to meet and exceed defined corporate standards
Transparency
Our business stands on open dialogue, based on clear standards and access to
information which clients and stakeholders are entitled to
Innovation
We think outside the box and proffer new solutions
Accountability
We are willing and have an obligation to accept responsibility
Reliability
We pledge to meet our promises
Commitment
We are dedicated to providing efficient service
Team Spirit
We work together as a team to deliver quality service to our clients

ZINWA BOARD CHAIRMAN
Eng. Dr. M.J.
TUMBARE
”
This achievement is coupled with positive
financial performance and a profit of $ 1, 8 million
amidst the prevailing macroeconomic environment
challenges. Cost reduction and prudent resource
management has remained pivotal in ZINWA
”
operations during the year under review.
CHAIRMAN’S STATEMENT
It is my pleasure to present the ZINWA audited Financial Results for the year ended 31
December 2017
Operating Environment
Throughout 2017 the country’s economic performance remained depressed following

low output across various sectors. However, following the political developments in
November 2017 and the coming in of a new government, the economic downturn
that was experienced since 2013 appeared to be reversing and Zimbabwe’s economy
started showing some signs of improvement. In addition, favourable rains received
in the 2016/17 season boosted growth of the agricultural sector in 2017 raising per
capita output. Nonetheless, well-designed policies will be vital to accelerate growth
and sustainability in 2018.
ZINWA’S Performance
As I present the Annual Report and ZINWA’s performance for the year ended 31 December
2017, I congratulate the Authority for achieving its mandate of planning, developing and
managing water resources in Zimbabwe and ensuring equitable distribution of water
to the nation. This achievement is coupled with positive financial performance and a
profit of $1,8 million amidst the prevailing macroeconomic environment challenges.
Cost reduction and prudent resource management has remained pivotal in ZINWA
operations during the year under review.
Significant milestones were achieved in 2017 which include the commissioning of Tugwi
Mukosi Dam in May 2017, rehabilitation of water supply infrastructure, clearing of the
legacy eleven (11) month staff salary backlog and commencement of the rainwater
harvesting community programmes. This involves construction of weirs, repairing
of small community dams, installation of rooftop rainwater harvesting infrastructure
and borehole drilling on behalf of the Ministry of Environment, Water and Climate.
The programme was funded by the Water Fund in terms of the Water Act [Chapter
20:24] and its implementation across the country has increased ZINWA’s visibility and
positive interaction with various stakeholders including traditional leaders, Members of
Parliament and various institutions and communities.
Infrastructure Development and Shareholder Support
The commitment by the Shareholder, the Government of Zimbabwe, to infrastructure

development, through the Public Sector Investment Programme (PSIP) funding to
sustain construction of ongoing dam projects, is highly commended. Work on the Gwayi
– Tshangani Dam resumed in 2017 and reached the milestone of concrete placement
for the foundations. Previously, lack of funding resulted in repeat of excavations after
every rainfall season as the excavated foundations were covered with deposited debris.
Other dam projects that constitute works in progress, and were funded in 2017, include

Causeway, Marovanyati, and Semwa Dams.
Outlook and Appreciation
Going forward, ZINWA’s focus will be driven by improved customer experience and
ensuring that the Authority continues to sustainably deliver quality water to all its
communities whilst making strategic water infrastructure investments that facilitate
human and economic development. The consumers remain at the centre of ZINWA’s
operations and are the reason for ZINWA’s existence as it strives to provide universal
and affordable water security to the nation.
I extend my appreciation to the Government of Zimbabwe, through the Minister of

Environment, Water and Climate for the continued support and the facilitation of
payment of the government debt owed to ZINWA through treasury bills which
significantly improved the operations of the Authority.
I acknowledge the invaluable contribution of fellow Board Members, the dedication of

ZINWA Management and Staff who have raised the performance of the Authority from a
loss making to a profitability position as well as achieving its mandate during the period
under review. The Authority values the support and commitment of its stakeholders; its
customers, suppliers and developmental partners and commits to continue delivering
water in an efficient and equitable manner.
Eng. Dr. M.J. Tumbare, PrEng, CEng

Chairman, ZINWA Board

ZINWA CEO
DR. J.K.
SAKUPWANYA
”
The Authority’s new strategic focus is also hinged
on striving to be a highly customer – centric entity which
is responsive to the needs of its clients and stakeholders.
Structured and systematic engagement of both the policy
makers and customers is improving the public perception
of ZINWA resulting in improved good will and support from
the stakeholders
”
CHIEF EXECUTIVE OFFICER’S REPORT
Introduction
The strategies being implemented by the Authority to achieve financial viability as well
as fulfill its mandate as envisaged at the formation of ZINWA, are bearing positive
results. In terms of section 25 of the ZINWA Act, the Authority is expected to conduct
its operations along sound commercial lines (full cost recovery). The revenue for ZINWA
has been steadily increasing from 2009, with fluctuations arising from variations in
annual rainfall and the effects of droughts and floods on both the availability of the
water and on plant and equipment, especially for clear water supply.
Figure 1: Revenue Trends from 2009 – 2017
The strategic focus for the five year period ending 2018 has been to reverse the loss
making status of the Authority as well as fostering growth. Year 2017 saw the Authority’s
fortunes turning from a loss position to recording a profit amounting to $1.8 million. The
Authority had previously recorded a loss of $2.5 million in the prior year. The Authority
also managed to decrease the net current liability position from $16.7 million in 2016 to
$7.7 million in 2017. The Authority has been on a recovery path from the effects of the
debt write-off of 2013 and is expected to enter into a growth phase hinged on increased
revenue and increased operational efficiency which result in reduced operating costs.
The payment of bills by Government and Local Authorities had a significant impact on
the performance of the Authority.

Figure 2: Annual Profit/Loss from 2009 – 2017
Performance Review
The Authority supplies water to various clients; for socio – economic development in
line with the national objectives as spelt under ZIMASSET and these include agriculture,
mining, industry, local authorities, institutions and households. Below is a summary of
the financial as well as Raw and Clear Water supply performance of the Authority for
2017.
The total revenue generated in 2017 amounts to $67.7 million compared to $55.4 million
recorded in 2016, representing a year-on-year increase of $12.3 million (22%). The
excessive flooding experienced in the 2016/17 rainfall systems affected both Clear and
Raw Water sales. Some of the Authority’s pumping equipment was flooded, especially
Raw Water abstraction works which were washed away in many instances. Stream
crossing pipes were also washed away at some stations resulting in the disruption of
service for prolonged periods thereby reducing the Clear Water sales. Raw Water sales
naturally correspond to the amount of rainfall received. The 2016/17 rainfall season had
excess rainfall which reduced the demand for summer supplementary irrigation, thus
resulting in lower Raw Water sales.
The operating costs for 2017 were US$61.4 million compared to 2016 operating costs
amounting to US$53.4 million. The increase in costs by 15% relates to increased costs
that arose from restoration of flood affected plant and equipment as well as increased
deployment of resources towards maintenance of water supply infrastructure. Price
increases for spares and other inputs in the latter half of the year also contributed to
the increase in operating expenditure.
The liquidity challenges in the recent years have also resulted in a shift in the approach

to revenue collection, with cashless systems being introduced as well as prepayment
of water. The new collection strategies introduced by ZINWA and the positive response
by Government on the payment of bills for its Ministries and Departments, resulted in
collections rising from $32.6 million in 2016 to $72.5 million in 2017. The new collection
strategies introduced in 2017 and constant dialogue with Government will be continued
in 2018.
As at 31 December 2017, ZINWA was owed a total of US$ 112 million in unpaid water bills
by various consumers, compared to US$146 million as at 31 December 2016. A major
challenge in collections still remains with Local Authorities who owed the Authority a
total of US$ 34 million as at 31 December 2017, translating to 30% of the total debtors’
amount. Irrigators owed a total of US$36 million, which translates to 32% of the total
amount owed to ZINWA.
Reduction of Operating Costs was also a major strategic focus for the period under
review. Necessary strategic changes were implemented on the human capital front
through a staff rationalisation exercise as well as the adjustment of the organisational
structure. Human Resource costs for management were significantly reduced in 2017
by adjusting allowances and benefits. Total Human Resources Costs for 2017 amounted
to $28 million, which is a $3 million reduction from the 2016 amount of $31 million.
Following the payment received from Government, ZINWA paid significant amounts
that it owed in salary arrears, pension fund remittances and for various services and
inputs. As at 31 December 2017, the Trade and Sundry creditors amounted to US$78
million compared to US$101 million that it owed as at 31 December in 2016, representing
a decrease of 23%.
Clear Water
Clear Water sales have generally been increasing from 2009, as the Authority invests
more in reticulation extensions while also increasing production to meet demand.
Reduction in power outages has also facilitated more consistent service provision to
consumers. Total Clear Water sales were $35.6 million in 2017 compared to $37.0 million
in 2016 representing a 3.8% decline. The reduction in sales is mainly attributable to
disruption of Clear Water supply services during the floods which affected pumping
equipment in the first quarter of 2017. All the disrupted service infrastructure have now
been successfully restored and sales are expected to increase in 2018.
The obsolete pumping equipment with reduced output and efficiency also affected the
Clear Water supply capacity for the Authority. As a way to mitigate this, a budget of $2
million has been set aside in 2018, for rehabilitation of Clear Water plant and equipment.

Figure 3: Clear Water Sales Trends from 2009 – 2017
Raw Water
Raw Water sales were almost constant from 2016 which recorded revenue amounting
to $11.7 million compared to Raw Water sales revenue of $11.8 million in 2017. The Raw
Water sales in 2016 were limited by the unavailability of water due to the 2015/16 El
Nino induced drought. The 2016/17 rainfall season was, however, a very good rainfall
season, resulting in low demand for supplementary summer irrigation water as well as
low Raw Water sales from Mtshabezi Dam, to the City of Bulawayo.
ZINWA has continued working with the Government’s National Command Farming
Program and has started realising the benefits of coordinating with various structures
and stakeholders under the program, with new Water Agreements being entered by
farmers whose capacity to irrigate has been boosted by the programme. Stop order
payments under the program presented a more efficient way of managing water user
accounts and are to be replicated to other contract farmers in the coming year.
The Authority is also working on strengthening the river inspection function to account
for water releases from ZINWA operated dams to improve utilisation from the Authority’s
water bodies and boost revenue generated from this operation and limit Non-Revenue
Water.

Figure 4: Raw Water Sales Trends from 2009 – 2017
CAPEX Projects
The Tugwi Mukosi Dam was commissioned in May 2017. The dam provides added water
security for the Lowveld sugar irrigators and reduced pressure on the traditional main
supply dam, Lake Mutirikwi, which was allowed to pick up storage during the 2016/17
rainfall season thereby improving water supply security to Masvingo Town.
ZIMREF projects funded through the World Bank under the Zimbabwe National Water
Project commenced at three of the targeted water supply stations, namely, Guruve,
Zimunya and Lupane. The stations are undergoing rehabilitation to improve water
supply service delivery.
A number of dam projects that were on suspension due to resource constraints have
now resumed with significant works having been covered at Gwayi – Shangani Dam. The
other major dam projects that are ongoing include Semwa, Marovanyati and Causeway
Dams.
Human Resources
The Authority appointed three substantive Directors in 2017 who replaced previous
incumbents whose contracts were terminated in 2016. The number of executive
directors was reduced from five to three as part of staff rationalisation. Allowances
for management were reduced to contain operating costs as the Authority progresses
towards achieving the 30:70 percent Salaries to Revenue ratio as stipulated by the
shareholder.

Operating Structure
ZINWA adopted a leaner and more efficient structure. The major change in the structure
at management level was the reduction in the number of executive (directorates) posts
by 2 and reduction in middle management posts by 8.
A revenue department was introduced in the structure to enhance revenue collection.

Personnel dedicated to revenue collection were deployed at all major stations to
increase efficiency on billing and revenue collection. Previously, revenue collection at
water supply stations was being carried out as extra assigned duties to water supply
operators whose primary focus is the treatment and distribution of water to consumers.
To improve efficiency, Catchment operational boundaries were also adjusted to ensure

that consumers are serviced from the nearest Catchment office. This has seen water
supply stations such as Beatrice which was managed by Sanyati Catchment being
transferred to Manyame Catchment.
Achievements In The Year Under Review
Though the operating environment was characterised by several macro – economic

challenges, ZINWA managed to post some major achievements in the year 2017 as
summarised below:
●● The Authority managed to restore water supply services at 57 water supply stations
which had plant and equipment damaged by floods in the first quarter of 2017.
●● Successful engagement of the Ministry of Finance and Economic Development for
payment of outstanding water bills for Government Ministries and Departments
saw the clearing of the related outstanding debt.
●● By December 2017, the Authority had cleared a legacy salary backlog of 11 months
for its employees.
●● Two major infrastructure projects were commissioned in 2017; Tugwi Mukosi Dam
and the new Beitbridge Water Treatment Plant.
●● Establishment of a fully functional Call Centre with toll free numbers.
●● Launch of Borehole Drilling and National Water Harvesting Programmes through-
out the country.
Outlook
Going forward ZINWA had to adopt and implement strategies to bring financial stability
of the Authority as well as to expand the business. These strategies are summarised
below:
●● Consolidation and expansion of reliable service delivery (for both Clear and Raw
Water);
●● Improved revenue collection (for both current and legacy debts);
●● Improved asset management and utilisation;
●● Adoption of cost containment measures;
●● Acquisition and installation of prepaid meters;

●● Reduction of Non-Revenue Water (leaks and piracy);
●● Improved customer relationship managment and stakeholder engagements;
●● Diversification of current business (mini hydro-power generation stations, fisheries,
eco-tourism);
●● Reticulation extension and new water connections;
●● Increasing the capacity of the borehole drilling unit through acquisition of drilling
rigs and related equipment;
●● Continued education and registration of Raw Water users, especially the irrigators
●● Infrastructure rehabilitation and expansion;
●● Developing a funding plan for rehabilitation and expansion incorporating loan
facilities and PPPs; and
●● Building capacity for construction of dams and water supply infrastructure.
The Authority’s new strategic focus is also hinged on striving to be a highly customer-
centric entity which is responsive to the needs of its clients and stakeholders. Structured
and systematic engagement of both the policy makers and customers is improving
the public perception of ZINWA, resulting in improved goodwill and support from the
stakeholders. Implementation of (non-commercial) community projects which improve
livelihoods through improved water security for the communities has resulted in the
improved image of the Authority.
Appreciation
Management and staff would like to acknowledge and appreciate the invaluable guidance
and support received from the Shareholder, the Board and other key stakeholders. Our
appreciation also goes to our valued customers whose support remains the backbone
of the our continued existence.
We thank you all
DR J.K. Sakupwanya
CHIEF EXECUTIVE OFFICER

CORPORATE GOVERNANCE REPORT
The governance of ZINWA remains a high priority for the Board as it guarantees the
achievement of the objectives of the organization. ZINWA adopted the National Code
on Governance and Corporate Governance Framework for State Enterprises and
Parastatals in Zimbabwe and the Board of Directors remain committed to the highest
standards of corporate governance and ensures the implementation of the provisions
of these guiding codes. The Board is aware of the impact good governance practices
have on the Authority’s business and its future.
In the year under review, ZINWA complied with the provisions of the National Code
on Governance in Zimbabwe and the Corporate Governance Framework, save for the
provisions regarding the constitution of Board Committees. The Board Committees
only sat in the first quarter of 2017. This was a result of the expiry of tenure of four board
members and resignation of another during the year under review. These vacancies
were not filled by the Shareholder during the course of 2017.
Introduction of the Board of Directors
The operations of ZINWA are directed and controlled by a ten member Board of
Directors as provided for in the ZINWA Act [Chapter 20:25], appointed by the Minister
of Environment, Water and Climate. The ten members comprise the Chairman, the
Chief Executive Officer and eight other members, four of which are appointed based
on expertise and experience in the development and management of water resources,
business or administration and the other four appointed from a list of persons nominated
by Catchment Councils established in terms of the Water Act [Chapter 20:24].
For the period under review, the ZINWA Board had nine members; eight Non-Executive
Directors with one having resigned from the Board in 2016. The terms of office of
four other Non executive Directors expired in May 2017 and were not replaced by 31
December 2017.
The Board is responsible for the overall strategy of the Authority, policy matters
and approval of major capital expenditure projects and considerations of significant
financing matters.

Profiles of the Board Members
Eng. Dr. Michael James Tumbare (Chairman)
Dr. Tumbare is a professional Engineer with over 40 years of

experience. He is currently the Chairman of the Research
Council of Zimbabwe and is a former president of the Zimbabwe
Institution of Engineers. He served the Zambezi River Authority
for 16 years as its Chief Executive Officer prior to joining
the University of Zimbabwe where he is currently a Senior
Lecturer and Deputy Dean in the Faculty of Engineering. He
has expertise in water resources infrastructure development
and management, hydrology and design of hydraulic structures. Dr Tumbare has vast
knowledge of dam design, and Integrated Water Resources Management as a Gazetted
and Approved Engineer for Large Dams. He is a holder of BSc (Civil Engineering) (Hons.),
1978: University of Rhodesia; Post Graduate Diploma in Hydrology (1981), University of
Padua; MBA, 1996: University of Strathclyde and PhD (Engineering Technology), 2000:
St Georges University.
Mrs Josephine Ncube (Vice Chairperson)
She is a lawyer by profession who holds a Bachelor of Law

degree (1982) and LLB (1988) from University of Zimbabwe and
a Masters in Business Administration from ESAMI, 2012. She has
vast experience in local governance.
Ms Betty Biri
Ms Biri is an Environmentalist and an Agriculturalist appointed

as a representative from Manyame Catchment. She is a holder of
a BSc in Geography and Environmental Studies from Zimbabwe
Open University (2006) and a Diploma in Agriculture from
Chibero College (1987). She is an accomplished environmentalist
with keen interest in water conservation and dam development.

Ms Anna Chuma
She is an Environmentalist appointed as a representative from

Gwayi Catchment who holds a Bachelor of Science (Hons)
Degree in Environmental Science and Health from the National
University of Science and Technology (2006), a Master of
Commerce in Strategic Management & Corporate Governance
(2012) and Diploma in General Management Development
(2014).
Mrs Joyce Malaba
She is an Economist and a holder of a BSc Economics from the

University of Zimbabwe (1983), MSc Economics (1991). She is
an experienced Consultant and Socio-Economic Development
Researcher/Statistician with distinct expertise in development
economics.
Engineer Gilbert Mawere
He is a civil engineer and a holder of BSc Civil Engineering (Hons)

with UZ (1985) MSc Water Resources Engineering (Hydrology)
from the University of Newcastle Tyne, UK (1990) and a certificate
of River and Dam Engineering Course, Tokyo (1988). He is the
Deputy Director, Water Resources Planning and Management in
the Ministry of Environment, Water and Climate.
Mr Robson Nyathi
He is a Marketer by profession and was appointed as a

representative from Runde Catchment and holds a Higher National
Diploma in Marketing Management from Harare Polytechnic
College: 1993 and a Masters in Business Administration from the
Midlands State University (2006).

Engineer Allen Sibanda
He is a holder of a BSc Civil Engineering (Hons) from the University

of Zambia; 1984 with vast experience in water infrastructure
development. He was appointed as a representative from
Mzingwane Catchment
Dr Jefter Kuziwa Sakupwanya (Chief Executive Officer)
He is a water resources management specialist with experience

spanning over 32 years. A holder of a Bachelor of Science in
Geology and Maths from the University of Zimbabwe (1982),
a Master of Science in Hydrogeology from the University of
London (1985) and a Doctor of Philosophy degree in Water
Resources Engineering from the University of Guelph, Ontario,
Canada (1991).
Committees of the Board of Directors
The Board delegated some of its authority to the Board Committees to carry out specific
tasks on its behalf, in order to operate efficiently and give adequate consideration
to relevant matters. The delegation was done in line with the tenets of Corporate
Governance best practice and in accordance to the provisions of the ZINWA Act
which provides for the establishment of Board Committees. Four Committees were
in operation in the first half of the 2017 financial year. Each Committee functions are
outlined in the terms of reference of the respective Board Committees, as approved by
the Board. Each Committee’s overall objectives are as summarised below:
1. The Technical and Operations Committee
The role of the Technical and Operations Committee is to provide oversight and advise to
the Board on all technical and operations issues pertaining to water resources planning,
development and management, water supply and groundwater drilling services.
2. The Finance Committee
The role of the Finance Committee is to assist the Board in discharging its duties
and responsibilities relating to financial planning, monitoring and reporting as well as
overseeing the overall financial performance of the Authority.

3. The Audit and Risk Committee
The role of the Audit and Risk Committee is to assist the Board in discharging its duties
and responsibilities relating to financial, monitoring and reporting, auditing, control,
risk management, corporate governance and other related matters assigned to it by
the Board. The Committee performs the responsibilities assigned thereto by the Public
Finance Management Act (section 84 of the Public Finance Management Act, Chapter
22:19) and the corporate governance responsibilities delegated thereto under its charter
by the Board.
4. The Remuneration and Human Resources Committee
The role of the Remuneration and Human Resources Committee is to assist the Board
in the monitoring of the implementation of human resources policies in line with the
relevant labour laws, performance management of ZINWA as well as monitoring of
human resource matters of the Authority.
While the Board may entrust some of its functions as it considers appropriate to the
Committees, the vesting of any function in a Committee does not divest the Board of
that function, and the Board may amend or rescind any decision of the Committee in
the exercise of that function. The Committees and its membership were as listed below
as at 14 May 2017;
The Technical & Operations Committee The Finance Committee

Eng. A. Sibanda (Chairperson) Ms. A. Chuma (Chairperson)
Ms. B. Biri Mr. R. Nyathi
Mrs. J. Malaba Ms. B. Biri
Eng. G. Mawere
The Audit & Risk Committee The Remuneration & Human Resources
Committee
Mrs. J. Malaba (Chairperson) Mrs. J. Ncube (Chairperson)
Eng. A. Sibanda Ms. B. Biri
Mrs. J. Ncube Ms. A. Chuma
Eng. G. Mawere


Board Meeting Attendance Register
The attendance of Board meetings as at 31 December 2017 are set out in the Table
below
Name Number of meetings held Number attended

1. Eng. Dr. Michael J. Tumbare 5 5
2. Dr. Jefter K. Sakupwanya 5 5
3. Ms. Betty Biri* 5 2
4. Mrs. Joyce A. Malaba * 5 2
5. Ms. Annah Chuma * 5 2
6. Mrs. Josephine Ncube * 5 2
7. Eng. Allen Sibanda 5 5
8. Mr. Robson R. Nyathi 5 5
9. Eng. Gilbert Mawere 5 5
*The term of office of members expired on 14 May 2017 and the renewal process was not concluded
during the year under review
Executive Management Profile
Eng. Taurayi Maurukira

Director, Engineering Services
Holder of BSC (Civil) Engineering from the University of Zimbabwe

(1991). He has 26 years experience in the engineering sector. He
was appointed Director in August 2017 having worked in various
managerial capacities within ZINWA.
Eng. Albert Mare

Director, Water Supplies and Operations
Holder of an MSc in Integrated Water Resources Management

from IHE Delft-Netherlands (1998) and a BSc (Hons) Civil
Engineering from the University of Zimbabwe (1992). He has
25 years experience in the engineering field. He was appointed
Director in August 2017 having worked in various managerial
capacities within ZINWA.

Mr. Wirimai Rutsito
Acting Director, Finance (November 2016-August 2017)
Holder of a Masters in Business Leadership (MBL) Bindura

University of Science Education (2012), Associate Member of
Institute of Chartered Secretaries and Administrators in Zimbabwe
(ICSAZ) and a Higher National Diploma in Business Studies
majoring in Accounting (1997). He has 17 years experience in the
financial field.
Mrs. Ellen Chivaviro

Director Finance & Commercial Services (from September 2017)
Holder of a Masters in Business Leadership (MBL) from UNISA

(2008) and Bachelor of Accountancy Honours Degree from the
University of Zimbabwe (1993). She is an associate member of
the institute of Association of Chartered Certified Accountants
(ACCA). She has over 23 years’ experience in both the private
and public sector after having trained with Deloitte. She joined
ZINWA in September 2017.
Ms. Loveness Mundirwa

Corporate Secretary and Legal advisor
Holder of a Master’s in Business Administration (2012) and a

Bachelor of Laws Honours degree (2005) from the University of
Zimbabwe. She has 13 years’ experience practicing law both as a
private practice Legal Practitioner and Counsel in Corporate.
Mr. Martin Takawira Kweza

Human Resources Manager
Holder of a Master’s in Business Administration (2014), Honours

degree in Human Resources Management from the Midlands
State University (2012) and an Institute of People Management
of Zimbabwe Diploma: 2006. He has 26 years’ experience in the
water sector serving in various capacities.

Mrs. Marjorie Munyonga
Corporate Communications and Marketing Manager
Holder of a Master of Science in Strategy Management from

Chinhoyi University (2010), a Bachelor of Commerce degree in
marketing from Zimbabwe Open University (2007), Postgraduate
diploma in Marketing (CIM-UK, 2017), Diploma Professional
Marketing and a National Diploma in Mass Communication
(1998) and is a Zimbabwe Chartered Marketer. She has 18 years’
experience as a marketer.

SUSTAINABILITY REPORT
1. OVERVIEW OF STRATEGIC OBJECTIVES

ZINWA plays a significant role in the attainment of the ZIMASSET objectives under the
Infrastructure and Utilities Cluster and the Food Security and Nutrition Cluster. ZINWA’s
mission relates to strategic infrastructure investments for socio–economic development.
The key priority for ZINWA is financial stability which is necessary for it to achieve its
mandate, strategic objectives and declare a dividend to the shareholder. Below are the
broad key strategic objectives of ZINWA.
Service Delivery Objectives

• To maintain consistent supply of water to all consumers
• Increase water supply service coverage in growing centres
• To reduce water losses
• To minimise downtime through reduced response time to breakdowns
Financial Objectives
●● To reverse the loss-making status of the Authority
●● Increase revenue collection for sustainable management of operations
●● Manage costs through the use of efficient business processes, ICT and internal
controls
●● Grow revenue generation through expansion of existing services and introduction
of new revenue streams (mini – hydro power generation, ecotourism, consultant
services etc)
●● Ensure financial sustainability through increased adaptability to the changing
operating environment and emerging threats such as increased frequency of
droughts and floods
Customer Service Objectives

• To improve two – way communicating with customers by providing feedback
mechanisms and call centre customer support service
• To improve customer experience through sustainable customer friendly service
provision
Human Capital Objectives

• To create a performance - focused culture
• To increase employee and organisational productivity
• To implement result-based performance management
• To attract and retain critical skills
• To promote continuous professional development of employees
Business Model
Below is a simplified schematic showing the business model of ZINWA which is
mandated to plan, develop and manage the Zimbabwe’s water resources.

2. RISK MANAGEMENT
Internal Control
The Board has overall responsibility for the effectiveness of the Authority’s risk
management, control and governance processes. Internal controls are implemented at
each decision making level within the Authority. The Audit and Risk Department assists
in ensuring that controls are working effectively by undertaking regular reviews and
periodically communicating information on the performance of the organisation.
The internal control system and risk management processes are expected to ensure
among other things, the following objectives are met:
●● Reliability and integrity of financial and operational information;
●● Achievement of the Authority’s strategic objectives;
●● Economy in the use of resources;
●● Effectiveness and efficiency of operations;
●● Safeguarding of assets; and
●● Compliance with laws, regulations, policies, procedures and contracts.
The Authority’s risk management process is designed to identify emerging risks and
plan mitigating actions. Each business segment is responsible for managing its risk
exposures and maintaining its risk register. A new risk assessment is conducted at the
beginning of each financial year and business segments risk registers are updated which
are then used to update the risk register for the Authority as a whole.
The Audit and Risk Department carries out risk management training for all the
business segments. Business segments monitor their risks throughout the year with
assessments by the Audit and Risk Department which reports quarterly to the Audit
and Risk Committee of the Board. The Directors consider that the following are the
principal risk factors that could materially and adversely affect the Authority’s financial
position and operating results.
a. Credit risk
Credit risk is the risk that consumers will not pay for services rendered by the Authority.
The Authority continues to face a very high credit risk due to failure by consumers to
pay their bills.
The Authority has put in place a number of measures to manage this risk including
negotiation of payment plans with consumers, engagement of debt collectors and
set-off arrangements with consumers. During the year under review the Board and
Management established a Revenue Collection Department with the aim of improving
collections. The Authority’s net receivables decreased by 25.6% from US$81.8 million in
2016 to US$60.8 million as at 31 December 2017.

b. Liquidity Risk
Liquidity risk is the risk that the Authority may fail to meet obligations as they fall due
or fund increases in assets without incurring unacceptable losses. This may be caused
by the Authority’s inability to liquidate assets or to obtain funding to meet its needs.
The Authority’s liquidity risk management strategies include curtailing expenditure and
agreeing payment plans with service providers. The Authority has also adopted set-off
arrangements as a means to settle obligations with service providers with whom it has
mutual service offerings.
c. Operational Risk
Operational risk is the risk of loss due to inadequate or failed internal control processes,
people, systems or external and legal events.
The Authority manages the risk through internal controls and by monitoring and
responding to potential risks. Controls include effective segregation of duties,
authorisation and reconciliation procedures, assessment processes and review processes
carried out by the Audit and Risk Department.
d. Reputational risk
Reputational risk refers to the risk of damage to the Authority’s image which may affect
its ability to retain and generate business due to perception by the market that the
Authority is not conducting business in a sound manner.
The Authority has put in place measures such as monitoring client service satisfaction
levels as well as processes to resolve client queries and complaints through the Customer
Call Centre and stakeholder engagement.
e. Information Technology (IT) Risk
Information technology risk is the risk that the Authority’s information systems and
technology infrastructure critical to its ability to render efficient service may fail.
Regular backups of critical information are made to safeguard against loss. The IT
Steering Committee in turn ensures alignment of IT with business objectives and helps
to resolve IT risks and challenges to ensure availability of critical IT resources at all
times.

f. Environmental Risk
Environmental risk is the risk of loss due to environmental factors emanating from
climate change, drought, pollution and other factors.
The Authority has put in place systems to monitor and repair key infrastructure such as
dams and water supply stations to ensure continuity of operations. The Authority also
receives and reviews information on environmental risks from various agencies and the
information is used to mitigate the associated risks.
3. HUMAN CAPITAL MANAGEMENT
The Human Capital Department plays an instrumental role in securing the success of
the Zimbabwe National Water Authority (ZINWA). In doing so, the function is guided by
the Authority’s vision and the human capital strategic agenda to create an environment
where employees thrive and are enabled to deliver sustainable organizational
performance. Specifically, three long term key strategic priorities have been identified
for the human capital department, which are:
●● Strategic Compensation;
●● Sustainable organisational development; and
●● Strategic Performance Management.
In 2017, the Human Capital activities were centred on these key priorities and aligned to
the Authority’s 2014-2018 strategy and its execution.
Strategic Compensation
The year under review saw the Authority reducing allowances for managerial employees
to 15% of basic salary. This was in line with management’s efforts to comply with the
shareholder’s requirement which prescribes a 30% salary to revenue ratio and allows

70% to be directed to service delivery. The reduction was implemented in January
2017 and saw managerial employees’ allowances reduced by 84%. In terms of the 2017
budget, the reductions resulted in the salary to revenue ratio reducing to 37% from 57%.
The Authority received payment from one of its biggest debtor, Government, which
resulted, among other things, in the liquidation of 11 months’ salary arrears for staff in
December 2017.
As part of setting the standards for disciplined management of human capital risk, the
Authority started developing incentives and reward structures that reinforce its culture
within a sound governance framework and with due consideration of market factors.
Sustainable Organizational Development
The delivery of human capital services is designed to positively impact the business
bottom line. As part of the Authority’s strategy, the human capital department is
developing workforce management solutions to optimize the balance between supply
and demand of capabilities and manage the staff costs and employee base more
efficiently and effectively in the long term. One of the key aspects is to create an enabling
environment for employees to develop the skills that give the Authority a competitive
advantage. Through the Authority’s staff development policy, several employees were
assisted to go through conventional and block release programs for their first degrees
and post graduate qualifications. These were key staff from various departments.
Strategic Performance Management
As an important pillar of the Authority’s strategy, the human capital made considerable
progress in defining and implementing performance management. All employees were
developed on strategic performance dialogue which led to key staff, that is, senior
executives signing performance contracts in the first phase. The second phase which
will be rolled out in 2018 will see the other managerial staff and employees signing their
performance contracts as well.
ZINWA’S Key Staffing Figures
In 2017 the number of full time employees dropped by 51. These are employees whose
contracts were terminated due to various reasons and through natural attrition.

Full Time Employees (FTE)
2013 2014 2015 2016 2017
Non Managerial Staff 1923 1806 1752 1680 1629
Managerial Staff 89 88 89 92 92
Executives 5 6 5 4 4
Total Establishment 2017 1900 1846 1776 1725
4. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) remains a key component of any organisation’s
success. As such ZINWA continues to treat Corporate Social Responsibility quite highly.
In all the cases where corporate social responsibility programmes were initiated,
ZINWA was guided by the Corporate Social Responsibility Policy which clearly outlines
the areas where Corporate Social Responsibility interventions could be made. These
are areas where ZINWA can derive the optimal value and as part of corporate social
responsibility a number of donations and sponsorships were made for the benefit of
communities. These include amongst others:
Dam Watch
As part of its service to the community ZINWA is sponsoring a programme on ZBC

called Dam Watch. The programme is co-sponsored with Tongaat Hullet and ZBC. In the
last five minutes of the 30-minute programme ZINWA gives an update of the country’s
dam levels.
Lowveld Community Development Awards
ZINWA made a donation towards the holding of the Lowveld Community Development
Awards, an annual event hosted to promote development and excellence in the
Lowveld. The event honours companies and individuals from various categories for their
contributions to development of the region. Among these individuals and organisations
are farmers and estates, who are also ZINWA clients.
University of Zimbabwe Faculty of Engineering
For the sponsorship of T-shirts for ushers during the 2017 University of Zimbabwe
Graduation ceremony. The faculty is a critical partner to ZINWA as it trains engineers
and also sends students for industrial attachment to the organisation.

Mineral Water Donations
A number of mineral water donations were also done to a number of organisations.

These include the Junior Council for the City of Harare, the Zion Christian Church annual
pilgrimage at Defe in Gokwe, Lake Chivero Clean Up and the National Aids Council.
Staff participation in CSR
ZINWA staff participated in the clean-up campaign at Chivero Dam organised by

Kuimba Shiri.
Zimbabwe Institute of Engineers
ZINWA sponsored shirts for the Zimbabwe Institution of Engineers congress held in
September 2017.
Stakeholder’s Report
In terms of stakeholder engagement, a number of stakeholder engagement activities

were held as detailed below;
Parliamentary Portfolio Committee Tour
For the first time in its history, ZINWA successfully conducted a seven-day tour for
the Parliamentary Portfolio Committee on Environment, Water, Tourism and Hospitality
Industry. The tour saw the Committee touring various ZINWA installations and projects,
among them Wenimbi Dam, Osborne Dam, Zimunya Water Treatment Plant, Middle
Sabi, Nyajena Weir, Tugwi Mukosi, Lupane Water Supply, Mtshabezi Pipeline, Gwayi
Shangani Dam site, Semwa Dam Site, Rushinga Water Supply, Magunje Dam and Water
Supply, Sebakwe Dam and Battlefields Water Supply.
The tour was meant to help the lawmakers, as a critical stakeholder, appreciate the
amount of work ZINWA was doing and the various challenges it was facing, especially
in respect of collecting money from Government institutions and individuals. The
committee is now an advocate of ZINWA and defends ZINWA quite well on various
fora. Organisations that owe ZINWA huge sums of money have since appeared before
the committee to explain why they do not pay for water and the tour has started paying
dividends for ZINWA.

Parliamentary Portfolio Committee at Tugwi Mukosi Dam
Tokwane Canals
ZINWA engaged traditional leaders and other stakeholders around Tokwane Canals.
This followed the deaths of people through drowning into the ZINWA operated canals
that are always full due to the continuous release of water from Tugwi Mukosi to the
Lowveld. The meetings were held to get traditional leaders’ support on the creation of
awareness on the dangers of trying to get water from canals.
5. PROJECTS COMPLETED DURING 2017

Tugwi Mukosi
●● The main purpose of the dam is irrigation and hydroelectric power generation, with
a maximum generating capacity of 15 MW.
●● Dam was completed and commissioned in May 2017
●● The water is already benefitting the Sugar estates in the Lowveld, and to date about
100 million cubic metres of water have been released,
●● The dam has become a tourist attraction since its commissioning, and is generating
revenue though the amounts being realized are still small.
Lupane Water Treatment Plant

●● The treatment plant was completed and is functional.
●● Currently the plant is supplying water to Lupane which is the Provincial Capital City
for Matabeleland North at 120m3/hr but has a maximum capacity of 240m3/hr.
●● Some of the water from the Dam will be used for irrigation downstream of the dam
and plans are underway to develop the scheme. The scheme will provide employ-
ment and also ensure food security.

Beitbridge Water Treatment Plant
●● The water treatment plant was completed during the year and commissioned in
August 2017.
●● Beitbridge is the busiest Border Post Towns owns and the provision of clean water
in sufficient quantities is of paramount importance to prevent disease outbreaks
linked to water shortages.
Mutange Dam Project

●● The dam was completed during the year but is still to be commissioned.
●● An area of about 130Ha will be put under irrigation resulting in food self-sufficiency
and employment to the local communities.
Lowveld main canal

Tugwi Mukosi Dam
6. MAJOR PROJECTS UNDERWAY

●● Gwayi Shangani – at 27% completion
●● Causeway Dam – at 38% completion
●● Marovanyati Dam - at 72% completion
●● Victoria Falls Water Supply Uprating
●● Water Supply to the New Parliament Project – at 85% completion
●● Lupane Water Works – at 43% completion
●● Epping Forest Project – at 96% completion
●● Mutange Irrigation Conveyance – at 40% completion
7. DROUGHT MITIGATION PROJECTS

As part of its mandate ZINWA has undertaken projects for drought mitigation. The
following projects are currently underway;
●● Pungwe Pipeline Off-takes
●● Mtshabezi Pipeline- Off-takes
●● De-siltation of dams
●● Construction of weirs

Beitbridge Water Treatment Plant
Gwayi Shangani Dam under construction

Lupane Water Treatment Plant
Marovanyati Dam under construction

Mtshabezi Pipeline Offtake One

ZIMBABWE NATIONAL WATER AUTHORITY
AUDITED
FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2017
GUARANTEEING
WATER
SECURITY

Incorporated in Zimbabwe in January 2000.
BUSINESS:
The Authority is responsible for the planning, development, operation and management of water resources
within Zimbabwe.
DIRECTORS
Non-Executive Directors
1. Dr M.J. Tumbare - Chairperson

2.Mr R. Nyathi
3. Eng. G.Mawere
4. Eng A.Sibanda
5. Mrs J Ncube to 31 May 2018
6. Mrs J Malaba to 31 May 2018
7. Ms B Biri to 31 May 2018
8. Ms A Chuma to 31 May 2018
Executive Director
9. Dr J.K.Sakupwanya - Chief Executive Officer
REGISTERED OFFICE:
Block 4, Celestial Park

Borrowdale Road
HARARE
INDEPENDENT AUDITORS:
AMG Global Chartered Accountants (Zimbabwe)

3 Elcombe Ave
Belgravia
HARARE
BANKERS:
CBZ Bank Limited - Harare
BancABC Limited - Harare
INDEX TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017
Pages
Report of the Independent Auditors 1-4

Statement of financial position 5
Statement of profit or loss and other comprehensive income 6
Statement of changes in equity 7
Statement of cash flows 8
Notes to the financial statements 9-34

REPORT OF THE INDEPENDENT AUDITORS TO THE BOARD OF DIRECTORS OF THE ZIMBABWE
NATIONAL WATER AUTHORITY
Opinion
We have audited the financial statements of the Authority, which comprise:
 The statement of financial position as at 31 December 2017;
 The statement of profit and loss and other comprehensive income, the statement of changes in equity and the
statement of cash flows for the year ended 31 December 2017;
 Notes to the financial statements; and
 A summary of significant accounting policies applied by the Authority during the year.
In our opinion, the financial statements are properly drawn up in conformity with International Financial Reporting
Standards (“IFRSs”) and, in all material respects, give a true and fair view of the financial position of Zimbabwe
National Water Authority (“the Authority”) as at 31 December 2017, and of its financial performance and its
cashflows, for the year then ended.
Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Authority within the meaning of independence in accordance with the
Institute of Chartered Accountants of Zimbabwe (“ICAZ”) Code of Professional Conduct, which is consistent with the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”),
and have fulfilled our other responsibilities under those ethical requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Going concern
We draw attention to note 29 on the financial statements dealing with going concern. The Authority incurred a
comprehensive profit amounting to $1 768 857 (2016: loss of $ 2 533 927) for the year ended 31 December 2017 but
was in a net current liability position of $ 7 714 821 (2016:$ 16 723 380) as at 31 December 2017. These factors
indicate the existence of material uncertainties which may cast significant doubt on the Authority’s ability to continue
operating as a going concern for the foreseeable future. However, as explained in note 29, these financial statements
have been prepared on a going concern basis. Our opinion is, therefore, not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements. Key audit matters are selected from the matters communicated with the Directors, but are not
intended to represent all matters that were discussed with them. Our audit procedures relating to these matters were
designed in the context of our audit of the financial statements as a whole. Our opinion on the financial statements is
not modified with respect to any of the key audit matters described below, and we do not express an opinion on these
individual matters.

Key audit matter How our audit addressed the key audit matter
Valuation of accounts receivables
The Authority’s gross trade receivables amounted We focused our attention on assessing the
to $111 856 871 at year end of which nearly 46% recoverability of trade receivables and our
were past due but not impaired at year end. An procedures included the following:
allowance for credit losses of $60 163 764 was  We circularised significant trade receivables
provided for as at year end. The Zimbabwean balances as at the reporting date;
economy is currently facing liquidity challenges  We assessed the adequacy and
and the recoverability of trade receivables could be appropriateness of the Authority’s policies
doubtful. The valuation of accounts receivables and procedures on providing for credit losses
was therefore considered a key audit matter. and writing off bad debts;
 We assessed the adequacy of the allowances
for credit losses;
 Performed some ratio analysis such as debtor
days, collections to charges etc;
 We assessed the trade receivables
performance post year end and up to the date
of our report; and
 We verified the adequacy of disclosures
relating to trade receivables made in the
financial statements.
Revenue recognition and receipting
The Authority has numerous stations and Our approach focused on testing the design and
catchments from which revenue billings and operating effectiveness of the key controls in place
receipting are managed from. Accordingly, a as well as performing test of details and substantive
number of key controls should be observed at each analytical review procedures in order to confirm the
station or catchment in order to ensure the completeness, accuracy and occurrence of revenue
accuracy, occurrence and completeness of revenue recognised and reported in the financial statements:
and receipts that are reported cumulatively at the
Authority’s level. From our previous experience  We identified and tested key billing and
with the audit of the Authority, we understand that receipting controls which ensure
revenues and receipts may be misstated due to the completeness, accuracy and validity of
following factors, amongst, others: revenue;
 Illegal water connections;  We recomputed raw water revenues based on
 Deficiencies in billings due to lack of working signed customer agreements in place;
water meters;  We performed year on year revenue analysis;
 Inaccurate data capturing; and  We computed the revenue per the mega litres
 Undeclared receipts collected by cashiers consumed in the current year and assessed
when they go on the ground to chase the reasonability of this ratio to prior year;
payments.  We performed cut-off tests for billings and
receipts;
Accordingly, revenue recognition and receipting  We reviewed in detail the cash and bank
were considered key audit matters. reconciliations as at the reporting date;
 We confirmed all the bank balances as at 31
December 2017; and
 We verified the disclosures in respect of
revenues and cash and bank balances in the
financial statements.

Valuation and existence of property, plant and
equipment
PPE is the most significant line item on the Our audit approach was focused on verifying the
Authority’s financial statements. As at 31 existence and valuation of PPE through the following
December 2017 the value of PPE was $2 213 466 procedures, amongst others:
797. In addition, assets of the Authority such as  We reviewed opening balances of assets and
dams and land are not depreciated, neither are they verified whether they were accounted for correctly
considered for impairment. Moreover, the in the accounting records;
Authority’s assets were last revalued on 31  We reviewed and considered the appropriateness
December 2014. As a result, the valuation of PPE of depreciation policies and benchmarked these
was considered a key audit matter. against the international best practices;
 We physically verified the existence and in the
process confirmed the conditions of assets on a
sample basis, by tracing them from the floor to the
registers and vice versa;
 We reviewed the independent valuer’s report that
was issued to the Authority on 31 December 2014
and considered its appropriateness to the reported
carrying amounts as at the reporting date;
 We recomputed depreciation where necessary;
 We verified the disclosures relating to PPE
presented in the annual financial statements of the
Authority.
Directors Responsibility for the Financial Statements
The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with
IFRSs, and for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error. The Directors are responsible for
overseeing the Authority’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the planning and performance of the audit. We also:
 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control;
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control;
3

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors; and
 Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We are required to communicate with the Directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We are also required to provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
In our opinion, the financial statements have been properly drawn up so as to comply, in all material respects, as
required by section 36(5) of the Zimbabwe National Water Authority Act (Chapter 20:25) and by section 82 (3) of the
Public Finance Management Act (Chapter 22:19), we report to you based on the audit, that:
1. All the information and explanations that were necessary for the purpose of the audit were obtained;
2. The Authority has properly kept all accounts and records relating to these financial statements, so far as they
appear from examination of the books of account;
3. The Authority has complied with all provisions of section 36 of the Zimbabwe National Water Authority Act
(Chapter 20:25) and section 82(3) of the Public Finance Management Act (Chapter 22:19); and
4. The Authority’s statement of financial position and statement of profit or loss and other comprehensive
income are in agreement with the books of accounts.
The engagement partner responsible for the audit resulting in this independent auditor’s report is Tariro Mhuka.
AMG Global
Harare
Tariro Mhuka
Engagement Partner
Registered Public Auditor - PAAB Practicing Certificate number 0423
11 May 2018

STATEMENT OF FINANCIAL POSITION

At 31 December 2017
Note 2017 2016

$ $
ASSETS
Non-current assets
Property, plant and equipment 4 2 213 466 797 2 120 457 571
Investment property 5 74 369 76 744
Intangible assets 6 42 001 49 001
Investments 14 759 21 198
_____________ _____________
2 213 597 926 2 120 604 514
_____________ _____________
Current assets
Inventories 7 1 525 481 1 472 055
Trade and other receivables 8 60 814 477 81 750 863
Cash and bank 9 8 170 492 1 267 208
_____________ ____________
70 510 450 84 490 126
_____________ ____________
_____________ ____________
TOTAL ASSETS 2 284 108 376 2 205 094 640
_____________ ____________
EQUITY AND LIABILITES
Equity
Share capital 10 - -
Retained earnings (75 802 079) (77 570 937)
Non distributive reserve 1 421 550 551 1 421 550 551
Revaluation reserve 267 321 488 267 321 488
Government equity contribution 11 516 199 617 421 585 590
World Bank grant 4 319 234 100 000
_____________ _____________
2 133 588 811 2 032 986 692
_____________ _____________
Non-current liabilities
Long term borrowings 12 29 077 640 27 408 749
Retention creditors 4 994 670 3 519 038
_____________ ____________
34 072 310 30 927 787
_____________ ____________
Dam construction liabilities 13 38 221 984 39 966 655

_____________ ____________
Current liabilities
Trade and other payables 14 78 198 777 101 212 933
Bank overdraft 9 26 494 573
_____________ ____________
78 225 271 101 213 506
_____________ ____________
_____________ ____________
TOTAL EQUITY AND LIABILITIES 2 284 108 376 2 205 094 640
_____________ ____________
______________________________
Chairman
11 May 2018
__________________________
Chief Executive Officer
5
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Year ended 31 December 2017
Note 2017 2016

$ $
Income
Clear water sales 35 629 699 37 034 730

Raw water sales 11 738 021 11 794 004
Borehole drilling 331 793 913 356
Sewerage fees 403 712 396 956
Connection fees 173 924 200 904
Net financing income 15 759 629 1 042 325
Other operating income 16 7 414 188 4 021 887
Net movement in allowances for credit losses
and bad debts 20 11 244 262 -
___________ ___________
67 695 228 55 404 162
___________ ___________
Expenditure
Staff costs 17 27 628 057 30 521 226

Repairs and maintenance 2 280 782 2 436 005
Chemicals 678 681 541 568
Clear water purchased for resale 18 3 041 853 3 565 741
Electricity 4 213 923 5 484 424
Other operating expenses 19 23 545 802 6 949 154
Net movement in allowances for credit losses
and bad debts 20 - 3 918 980
___________ ___________
61 389 098 53 417 980
___________ ___________
Operating profit before depreciation and amortisation 6 306 130 1 987 064
Depreciation and amortisation (4 537 272) (4 520 991)

___________ ___________
Profit/(loss) for the year 1 768 858 (2 533 927)
___________ ___________
Other comprehensive income - -
___________ ___________
___________ ___________
Total comprehensive income/(loss) for the year 1 768 858 (2 533 927)
___________ ___________

6
STATEMENT OF CHANGES IN EQUITY
31 December 2017
Non- Government
Share Retained Distributable Revaluation equity World
Capital earnings reserve surplus contribution bank Total
$ $ $ $ $ $ $
Balances as at 1 January 2016 - (75 079 553) 1 421 565 051 267 349 531 352 673 042 - 1 966 508 071
__________ ___________ ____________ ____________ ___________ ________ ____________
Total comprehensive income
Loss for the year - (2 533 927) - - - - (2 533 927)
__________ ___________ ____________ ____________ ___________ _________ ____________
Transactions directly in reserves
Public sector investment programme - - - - 68 912 548 - 68 912 548
World Bank contribution - - - - - 100 000 100 000
Revaluation surplus realised on sale of assets - 42 543 (14 500) (28 043) - - -
__________ ___________ ____________ ____________ ___________ _________ ____________
Total transactions directly in reserves - 42 543 (14 500) (28 043) 68 912 548 100 000 69 012 548
__________ ___________ ____________ ____________ ___________ _________ ____________
__________ ___________ ____________ ____________ ___________ _________ ____________
Balances as at 31 December 2016 - (77 570 937) 1 421 550 551 267 321 488 421 585 590 100 000 2 032 986 692
__________ ___________ ____________ ____________ ___________ _________ ____________

Total comprehensive income
Profit for the year - 1 768 858 - - - - 1 768 858
__________ ___________ ____________ ____________ ___________ _________ ____________
Transaction directly in reserves
Public sector investment programme - - - - 94 614 027 - 94 614 027
World Bank contribution - - - - - 4 219 234 4 219 234
__________ ___________ ____________ ____________ ___________ _________ ____________
Total transactions directly in reserves - - - - 94 614 027 4 219 234 98 833 261
__________ ___________ ____________ ____________ ___________ _________ ____________
__________ ___________ ____________ ____________ ___________ _________ ____________
Balances as at 31 December 2017 - (75 802 079) 1 421 550 551 267 321 488 516 199 617 4 319 234 2 133 588 811
__________ ___________ ____________ ____________ ___________ _________ ____________
7
STATEMENT OF CASH FLOWS

As at 31 December 2017
Note 2017 2016

$ $
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers 72 456 896 32 578 075

Cash paid to suppliers and employees (69 065 260) (33 032 132)
___________ ___________
Cash outflows from operations 21 3 391 636 (454 057)
Net financing income 15 759 629 1 042 325

___________ ___________
Net cash flows from operating activities 4 151 265 588 268
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment 4 (97 563 397) (38 731 025)
Proceeds from sale of investments 8 417 -
Proceeds from disposal of property, plant and equipment 47 965 4 101
___________ ___________
Net cash flows from investing activities (97 507 015) (38 726 924)
___________ ___________
___________ ___________
Net cash flows before financing activities (93 355 750) (38 138 656)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings 1 668 891 1 569 419

Movement in retention creditors 1 475 632 150 522
Increase in World Bank contribution 4 219 234 100 000
Decrease in construction liabilities (1 744 671) (32 605 111)
Government equity contribution 94 614 027 68 912 548
___________ ___________
Net cash flows from financing activities 100 233 113 38 127 378
___________ ___________
___________ ___________
INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 6 877 363 (11 278)
Cash and cash equivalents at the beginning of the year 1 266 635 1 277 913
___________ ___________
CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR 9 8 143 998 1 266 635
___________ ___________
8 ZINWA INTEGRATED REPORT 2017 | 49

NOTES TO THE FINANCIAL STATEMENTS

31 December 2017
1. GENERAL INFORMATION
Zimbabwe National Water Authority was incorporated in Zimbabwe in January 2000. The Authority is responsible
for the planning, development, operation and management of water resources within Zimbabwe. The registered
office of the Authority is Block 4, Celestial Park, Borrowdale Road, Harare.
2. BASIS OF PREPARATION
2.1 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and the Zimbabwe National Water
Authority Act (Chapter 20:25).
2.1.1 New and amended standards
The Authority has adopted the following standards and amendments for the first time in their annual reporting
period commencing 1 January 2017:
 Amendments to IAS 12 ‘Income Taxes’, recognition of deferred tax assets for unrealized losses, effective for
annual periods beginning on or after 1 January 2017; and
 Amendments to IAS 7 ‘Statement of Cash Flows’ disclosure initiative, effective for annual periods beginning
on or after 1 January 2017.
The adoption of these amendments did not have any material impact on the current period and is not likely to affect
future periods.
2.1.2 Standards issued but not yet effective as at the reporting date
The standards listed below were issued but not yet effective as at the date of issuance of the Authority financial
statements but the Authority reasonably expects them to be applicable at a future date and, as such, intends to adopt
them when they become effective.
The Authority expects that the adoption of these standards in most cases will not have a significant impact on the
Authority’s financial position and performance in the period of initial application but additional disclosures will be
required. The impact of these standards on the Authority’s financial statements on adoption in future is not known
and cannot be reasonably estimated as of now.
IFRS 9 Financial Instruments
Sets out the principles for the recognition, derecognition, classification and measurement of financial assets and
financial liabilities together with requirements relating to the impairment of financial assets and hedge accounting.
The standard is applicable for financial periods beginning on or after January 2018.
IFRS 15 Revenue from Contracts with Customers
Establishes when revenue should be recognised, how it should be measured and what disclosures about contracts
with customers are needed. The standard is applicable for financial periods beginning on or after 1 January 2018.
Clarifications to IFRS 15: Revenue from contract with Customers
Clarifies some requirements and provides additional transitional relief to reduce cost and complexity for entities
applying the standard for the first time. Effective beginning on/or after 1 January 2018.

9

31 December 2017
IFRS 16 Leases
Establishes principles for the recognition, measurement, presentation and disclosure of leases for both lessees
and lessors. The standard is applicable for financial periods beginning on or after 1 January 2018.
IFRIC 22 Foreign Currency Transactions and Advance Considerations
Clarifies the accounting for transactions that include the receipt or payment of advance consideration in a
foreign currency. The Interpretation covers foreign currency transactions when an entity recognises a non-
monetary asset or non-monetary liability arising from the payment or receipt of advance consideration before
the entity recognises the related asset, expense or income. The interpretation is applicable for financial periods
beginning on or after 1 January 2018.
IFRIC 23 Uncertainty over Income Tax Treatments
The interpretation is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. The
interpretation is applicable for financial periods beginning on or after 1 January 2019.
2.2 Basis of preparation
The financial statements have been prepared on a historical cost basis except for property, plant and equipment
that are measured at revalued amounts and financial instruments at “fair value through profit or loss” which
are stated their fair values.
2.3 REPORTING AND FUNCTIONAL CURRENCY

These financial statements are presented in United States Dollars (USD) which is the Authority’s functional
and reporting currency.
Determination of the functional currency
The acute shortage of cash and foreign currency in the country saw the emergence of different modes of
payment for goods and services such as settlement via Real time Gross Settlement (RTGS), Point of sale (POS)
and mobile money. In addition:
 products and services were priced differently depending on the mode of payment with the actual USD
(cash) being the cheapest alternative and RTGS the most expensive;
 the significant unavailability of the USD in cash and in Nostro accounts made processing of payments
to foreign suppliers and creditors extremely difficult for businesses;
 new legislation in the form of Statutory Instruments 133 of 2016 and 122a of 2017 which prescribed
bond notes and coins as currency was promulgated.

As a result of these and other factors, management had to make an assessment of whether the use of the United
States dollar as the Authority’s functional currency was still appropriate. In doing this management considered
the following factors:
 the currency that mainly influences sales prices for goods and services;
 the currency of the competitive forces and regulations that mainly determine the sales prices of goods
and services;
 the currency that mainly influences labour, material and other costs of providing goods or services;
 the currency in which funds from financing activities are generated; and
 the currency in which receipts from operating activities are usually retained
10

31 December 2017
The United States dollar remained the primary driver for most of the factors above. Therefore management
concluded that it is still the Authority’s functional currency.
2.4 Critical judgements and estimates made in applying the accounting policies.
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and reported amounts of assets and liabilities, income and
expenses.
The estimates and underlying assumptions are based on historical experience and various other factors,
including making assumptions concerning future events that are believed to be reasonable under the
circumstances. Actual results may differ from these accounting estimates. The estimates and assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are accounted for prospectively.
In the process of applying the accounting policies as set out below, management has made the following
judgements that have a significant risk of causing material adjustment to the amounts recognised in the
financial statements:
a) Useful lives and residual values of property, plant and equipment and investment property
The useful lives and residual values of property, plant and equipment and investment property are reviewed at
each year-end. The useful lives, which are estimated by management, are based on historic analysis and other
available information. The residual values are estimated based on useful lives as well as other available
information.
b) Provisions and contingent liabilities
Various estimates and assumptions have been applied by management in arriving at the carrying value of
provisions that are recognised in terms of the relevant accounting policy.
Management further relies on input from the Authority’s lawyers in assessing the probability of items of a
contingent nature.
c) Fair value estimation
The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date. The fair value of financial instruments that are not traded in an active market is determined by
using valuation techniques. The Authority uses a variety of methods and makes assumptions that are based on
market conditions existing at each reporting date.
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted by the Authority in the preparation of these financial statements are
set out below. These policies are consistent in all material respects with those applied in the previous years,
unless otherwise stated.
3.1 Revenue
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services,
exclusive of value added tax, at declared tariffs arising from the Authority’s normal trading activities.
11


31 December 2017
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Authority and
the revenue can be reliably measured.
3.1.1 Revenue recognition
Revenue is recognised as follows:
Sale of water
Revenue from the sale of water is recognised in the statement of profit or loss and other comprehensive income
when the significant risks and rewards of ownership are transferred to the buyer.
Services rendered
Revenue from services rendered is recognised in the statement of profit or loss and other comprehensive
income in proportion to the related services. When the outcome of a transaction involving the rendering of
services can be estimated reliably, revenue associated with the transaction is recognised by reference to the
stage of completion of the transaction at the reporting date.
When the outcome of the transaction involving the rendering or services cannot be estimated reliably, revenue
is recognised only to the extent of the expenses recognised that are recoverable.
Finance income
Interest income comprises interest received or receivable on loans, trade and other receivables and funds
invested. Interest is recognized in the statement of profit or loss and other comprehensive income when it is
probable that economic benefits associated with the transaction will flow to the Authority using the effective
interest rate method over the period to maturity.
3.2 Finance costs
Finance costs comprise interest expense on borrowings, reductions in the fair value of financial assets at fair
value through profit or loss and impairment losses recognised on financial assets measured at amortised cost.
3.3 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalized as part of the cost of that asset until such time as the asset is ready for its intended use. The
capitalization of borrowing costs commences when expenditures for the asset have occurred, borrowing
costs have been incurred, and activities that are necessary to prepare the asset for its intended use or sale are in
progress. Capitalization is suspended during extended periods in which active development is interrupted.
Capitalization ceases when substantially all the activities necessary to prepare the qualifying asset for its
intended use are complete. All other borrowing costs are recognised as an expense in the period in which they
are incurred.
3.4 Property, plant and equipment
3.4.1 Valuation
Items of property, plant and equipment are initially stated at cost of acquisition or construction and then
subsequently at revalued amounts less accumulated depreciation and accumulated impairment losses. The cost
of self-constructed assets includes the cost of materials, direct labour, the costs of dismantling and removing
the items and restoring the site on which they are located, and an appropriate proportion of production
overheads. Depreciation commences when the asset is available for its intended use by management.
12

31 December 2017
Increases in the carrying amount arising on valuations are credited to the revaluation reserve. Decreases that
offset previous increases of the same assets are charged against the revaluation reserve. All other decreases are
charged to the statement of profit or loss and other comprehensive income.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses on disposals are included in the statement of profit or loss and other comprehensive income.
3.4.2 Subsequent costs
The cost of major renovations is included in the carrying amount of the asset, where it is probable that future
economic benefits in excess of the original standard of performance of the existing asset is expected to flow to
the Authority and the cost of the item can be measured reliably. All other costs are recognised as expenses in
the statement of profit or loss and other comprehensive income during the financial period in which they are
incurred.
3.4.3 Depreciation
Depreciation is charged to the statement of profit or loss and other comprehensive income on a straight-line
basis over the estimated useful lives of each item of property, plant and equipment. Land and assets under
construction are not depreciated.
The estimated useful lives are as follows:-

Asset Category Years
Buildings 20-40
Motor Vehicles and Tractors 3-10
Pumping Equipment 10-20
Furniture and Fittings 3-10
Computer Equipment 3-10
Tools and Equipment 3-10
Drilling Rigs and Equipment 3-10
Depreciation methods, useful lives and residual values of items of property, plant and equipment are reassessed
at each statement of financial position date. Depreciation is not charged when the carrying amount of an item
of property, plant and equipment becomes equal to or less than the residual value.
3.5 Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost. Investment properties are derecognised either when they
have been disposed of or when they are permanently withdrawn from use and no future economic benefit is
expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the
asset is recognised in the statement of profit or loss and other comprehensive income in the period of
derecognition.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from
investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at
the date of change in use. If owner-occupied property becomes an investment property, the Authority accounts
for such property in accordance with the policy stated under property, plant and equipment up to the date of
change in use.
13


31 December 2017
3.6 Inventories
Inventories are stated at the lower of cost, determined on a weighted average cost, and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated selling
expenses.
3.7 Impairment of assets
The carrying amounts of property, plant and equipment and other non-current assets are reviewed at each
statement of financial position date to assess whether they are recorded in excess of their recoverable amounts
and where carrying values exceed their estimated recoverable amount, assets are written down to their
recoverable amounts. An impairment loss is recognised for the amount by which the carrying amount of the
asset exceeds its recoverable amount, which is the higher of an asset’s fair value less costs of disposal and its
value in use.
3.8 Government equity contribution
Contributions made by the Government of Zimbabwe under the Public Sector Investment Programme are
accounted for on an accrual basis and are credited directly to the Government’s equity in the Authority.
3.9 Employee benefits
3.9.1 Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Authority pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans are recognised as an employee benefit
expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.
Contributions to a defined contribution plan that are due more than 12 months after the end of the period in
which the employees render the service are discounted to their present value.
3.9.2 Termination benefits
Termination benefits are recognised as an expense when the Authority is committed demonstrably, without
realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary
redundancy.
Termination benefits for voluntary redundancies are recognised as an expense if the Authority has made an
offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can
be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are
discounted to their present value.
3.9.3 Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided. A liability is recognised for the amount expected to be paid under short-term cash
bonus if the Authority has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be estimated reliably.
14

31 December 2017
3.10 Provisions
Provisions are recognised when the Authority has a present legal or constructive obligation as a result of past
events and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligations and a reliable estimate of the amount of the obligation can be made.
3.11 Financial instruments
Classification
The Authority classifies financial instruments on initial recognition as a financial asset, a financial liability or
an equity instrument in accordance with the substance of the contractual arrangement. The financial assets and
financial liabilities are classified into the following categories:
 Financial assets at amortised cost;

 Financial assets at fair value through profit or loss;
 Financial liabilities at fair value through profit or loss; and
 Financial liabilities at amortised cost.
Financial assets at amortised cost
A financial asset is classified as “amortised cost” only if both of the following criteria is met: The objective of
the Authority’s business model is to hold the assets to collect the contractual cash flows; and the contractual
terms give rise on specified dates to cash flows that are solely payments by principal and interest on the
principal outstanding.
Trade and other receivables is the only line item on the statement of financial position that is carried at
amortised cost.
Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or loss if it is classified as held for trading or
designated as such upon initial recognition. The Authority has not designated any financial asset as measured
at fair value through profit or loss to eliminate or significantly reduce an accounting mismatch.
Financial liabilities at fair value through profit or loss
A financial liability is classified as “fair value through profit or loss” only if it is evaluated on a fair value
basis, results in an accounting mismatch or it is a certain embedded derivative.
Financial liabilities at amortised cost
If either the three criteria on ‘financial liabilities at fair value through profit or loss” are met, the financial
liability is classified as ‘amortised cost”.
Trade and other payables, and long term borrowings are the line items on the statement of financial position
that are carried at ‘amortised cost”.
15

31 December 2017
Initial recognition and measurement
Financial instruments are recognised initially on trade date at which the Authority becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities at ‘fair value through profit or loss” are recognised initially at fair
value and any directly attributable transaction costs are expensed.
Financial assets at “amortised cost” are recognised initially at fair value plus any directly attributable
transaction costs.
Financial liabilities at “amortised costs” are recognised initially at fair value minus any directly attributable
transaction costs
Subsequent measurement
Financial assets and financial liabilities at amortised cost are subsequently measured at amortised cost using
the effective interest rate method, less accumulated impairment losses.
Financial assets at fair value through profit or loss are subsequently measured at fair value with gains or losses
arising from changes in fair value being included in profit or loss for the period.
Financial liabilities at “fair value through profit or loss” are subsequently measured at fair value, with the gains
or losses related to credit risk being included in other comprehensive income and the remaining gains or losses
being included in profit or loss for the period.
Impairment of financial assets at amortised cost
At each reporting date, the Authority assess all its financial assets “at amortised cost” to determine whether
there is objective evidence that a financial or group of financial assets has been impaired.
For amounts due to the Authority, significant financial difficulties of the debtor, probability that the debtor will
enter bankruptcy and default of payments are all considered indicators of impairment.
Impairment losses are debited in profit or loss and credited to an allowance account. Impairment losses are
reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event
occurring after the impairment was recognised, subject to the restriction that the carrying amount of the
financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would
have been had the impairment not been recognised.
Derecognition
Financial assets are derecognised when the contractual rights to receive cash flows from the asset have expired
or have been transferred and the Authority has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when and only when it is extinguished. That is, when the obligation
specified in the contract is discharged or cancelled or expires.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or
less. Bank overdrafts that are repayable on demand and form an integral part of the Authority’s cash
management are included as a component of cash and cash equivalents for the purpose of the statement of cash
flows.
16


31 December 2017
3.12 Taxation
The Authority is exempted from paying corporate tax by the 3rd Schedule of the Income Tax Act Chapter
(23:06) paragraph 1(j) by it being a statutory corporation.
3.13 Foreign currency
Transactions in foreign currencies are translated to the reporting currency of the Authority at exchange rates
ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the
reporting date are translated to the reporting currency at the exchange rate at that date. Non-monetary assets
and liabilities denominated in foreign currencies that are measured at fair value are translated to the reporting
currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of
the transaction.
3.14 Intangible assets
An intangible asset is recognised when it is probable that the expected future economic benefits that are
attributable to the asset will flow to the Authority and the cost of the asset can be measured reliably.
Intangible assets that are acquired by the Authority are measured at cost less accumulated amortization and
accumulated impairment losses.
Costs associated with researching or maintaining computer software programmes are recognised as an expense
as they are incurred. Costs that are directly associated with the development of identifiable software products
that will probably generate economic benefits beyond one year that can be measured reliably are recognised as
intangible assets.
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual
value. Amortisation is recognised in the statement of profit or loss and other comprehensive income on a
straight-line basis over the estimated useful lives of intangible assets from the date that they are available for
use, since this most closely reflects the expected pattern of consumption of the future economic benefits
embodied in the asset.
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate. The estimated useful life of computer software is seven years.
3.15 Lease payments
Payments made under operating leases are recognised in the statement of profit or loss and other
comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are
recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the
reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so
as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments are recognized as an expense in the periods in which they are incurred.
Determining whether an arrangement contains a lease
At inception of an arrangement, the Authority determines whether such an arrangement is or contains a lease.
An arrangement conveys the right to use the asset if the arrangement conveys to the Authority the right to
control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Authority
17


31 December 2017
separates payments and other considerations required by such an arrangement into those for the lease and those
for other elements on the basis of their relative fair values. If the Authority concludes for a finance lease that it
is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to
the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an
imputed finance charge on the liability is recognised using the Authority’s incremental borrowing rate.
18
31 December 2017
4 PROPERTY, PLANT AND EQUIPMENT
Dams and Land and Motor vehicles Pumping Furniture Computer Tools and Rigs and Work in
canals buildings and tractors equipment and fittings equipment equipment equipment progress Total
$ $ $ $ $ $ $ $ $ $
4.1 COST
Balance as at 1 January 2016 1 643 678 047 34 032 543 3 492 637 44 118 746 505 222 318 964 1 432 494 902 330 361 932 561 2 090 413 544
Additions - 118 893 223 652 99 739 67 195 75 694 356 939 5 38 119 711 39 061 828
Disposals - - (34 000) - - - - - - (34 000)
____________ __________ _________ _________ _________ _________ ___________ __________ ___________ _____________
Balance as at 31 December 2016 1 643 678 047 34 151 436 3 682 289 44 218 485 572 417 394 658 1 789 433 902 335 400 052 272 2 129 441 372
Additions - - 267 757 7 631 47 223 119 256 70 534 - 97 050 996 97 563 397
Disposals - - (33 500) - - - - - - (33 500)
____________ __________ ___________ __________ _________ __________ __________ _________ __________ ____________
____________ __________ ___________ __________ _________ __________ __________ _________ __________ ____________
4.2 DEPRECIATION
Balance as at 1 January 2016 - 1 173 109 852 112 1 884 156 81 254 106 023 172 797 209 883 - 4 479 334
Depreciation for the year - 1 174 334 861 043 1 884 620 80 931 121 278 179 528 209 883 - 4 511 617
Depreciation on disposals - - (7 150) - - - - - - (7 150)
____________ __________ ___________ __________ _________ __________ _________ _________ _________ ____________

Balance as at 31 December 2016 - 2 347 443 1 706 005 3 768 776 162 185 227 301 352 325 419 766 - 8 983 801
Depreciation for the year - 1 188 307 818 053 1 902 341 77 678 118 054 216 762 206 734 - 4 527 929
Depreciation on disposals - - (7 258) - - - - - - (7 258)
____________ __________ ____________ __________ __________ __________ _________ _________ _________ ____________
Balance as at 31 December 2017 - 3 535 750 2 516 800 5 671 117 239 863 345 355 569 087 626 500 - 13 504 472
____________ __________ ____________ __________ __________ __________ _________ _________ _________ ____________
4.3 NET CARRYING AMOUNT
____________ __________ ___________ __________ _________ _________ ________ ________ __________ ____________
____________ __________ ___________ __________ _________ _________ ________ ________ __________ ____________
19
31 December 2017
4.4 Included in dams and canals are dams which the Authority partly owns. Below is the list of these dams and
the percentages that the Authority owns:
Dam Percentage owned
Biri Dam 61%

Darwendale Dam 17%
Lake Chivero 17%
5 INVESTMENT PROPERTY
2017 2016
$ $
5.1 Cost
Balance at 1 January 2017 95 000 95 000

Additions - -
________ _________
Balance at 31 December 2017 95 000 95 000
5.2 Accumulated depreciation and impairment losses
Balance at 1 January 2017 18 256 15 881

Depreciation 2 375 2 375
_________ __________
Balance at 31 December 2017 20 631 18 256
_________ __________
_________ __________
5.3 Carrying amount 74 369 76 744
_________ __________
5.4 Investment property includes guest houses in Runde, Masvingo. Items of investment property are stated at
cost less accumulated depreciation. Depreciation is charged to the statement of profit or loss and other
comprehensive income on a straight line basis over an estimated useful life of 40 years.
20

31 December 2017
2017 2016
$ $
6 INTANGIBLE ASSETS - COMPUTER SOFTWARE
6.1 Analysis
Cost 98 001 98 001
Accumulated amortisation (56 000) (49 000)
________ _________
Carrying value 42 001 49 001
________ _________
6.2 Reconciliation of intangible asset
Carrying amount at beginning of year 49 001 56 001

Amortisation for the year (7 000) (7 000)
_________ ________
Carrying amount at end of the year 42 001 49 001
_________ ________
7 INVENTORIES
Catchment stores 1 225 598 1 360 386

Drilling materials and supplies 247 549 69 388
Fuel and oils 52 334 42 281
_________ _________
1 525 481 1 472 055
_________ _________
8 TRADE AND OTHER RECEIVABLES
Government institutions 6 694 424 42 928 564

Irrigators 35 712 371 34 442 700
Local authorities 34 220 225 34 689 448
Parastatals 6 552 631 6 592 517
Other corporate consumers 12 844 970 13 913 178
Direct private consumers 15 832 240 13 670 789
___________ ___________
111 856 861 146 237 196
Allowance for credit losses (note 24.1) (58 944 757) (72 526 913)
___________ ___________
52 912 104 73 710 283
Other accounts receivable 9 171 380 8 632 265
Allowance for credit losses (1 269 007) (591 685)
___________ ___________
60 814 477 81 750 863
___________ ___________
21

31 December 2017
2017 2016
$ $
9 CASH AND CASH EQUIVALENTS
9.1 Analysis
Cash and bank 4 670 492 1 267 208

Short term investment (note 9.2) 3 500 000 -
___________ __________
8 170 492 1 267 208
Bank overdraft (26 494) (573)
___________ __________
8 143 998 1 266 635
___________ __________
9.2 Short term investments represent money market investment at Banc ABC.
9.3 In 2016 the Central Bank, through Exchange Control Operational Guide 8 (ECOGAD8), introduced a
prioritisation criterion which has to be followed when making foreign payments. Any foreign payments which
are made from bank balances above are ranked based on the Central Bank prioritisation criteria and paid
subject to the Council’s bankers having adequate funds with their foreign correspondent banks.
Included in cash and cash equivalents are bond notes and coins which are bearer instruments that are pegged
at 1:1 with the United States dollar. USD and bond notes and coins transactions are maintained in the same
bank account.
10 SHARE CAPITAL
10.1 Authorised share capital of the Authority
In terms of Section 21 of the Zimbabwe National Water Authority Act (“the Act”), the authorised share capital
of the Authority shall be such number of shares of such value as the Board of Directors may fix by resolution
with the approval of the Minister and the Minister responsible for finance.
10.2 Issued share capital
The Board shall allot to the State such number of the Authority’s shares, subject to such terms and conditions
as the Minister and the Minister responsible for finance may determine in consultation with the Board.
The Board of Directors shall issue shares to the state in consideration for the assets which were transferred
from both the state and former Regional Water Authority at the Authority’s inception in January 2000.
10.3 The Board had not allotted shares to the State as per the requirements of the Act as at 31 December 2017.
2017 2016
$ $
11 GOVERNMENT EQUITY CONTRIBUTION
11.1 Analysis
Opening balance 421 585 590 352 673 042
Received during the year (PSIP) (note 11.2) 94 614 027 68 912 548
___________ ___________
Balance at end of year 516 199 617 421 585 590
___________ ___________
22
31 December 2017
11.2 This amount represents the Government of Zimbabwe’s contributions to the Authority. The contributions are
made under the Public Sector Investment Programme and are meant for specific capital projects. The principal
components are:
a) Direct capital transfers by the Government of Zimbabwe to the Authority; and
b) Payments made directly to the Authority’s contractors, through the Infrastructure Development Bank of
Zimbabwe (IDBZ).
12 LONG TERM BORROWINGS

Balance at Received during Interest charged Balance at
beginning of year the year during the year year end
$ $ $ $
December 2016
Ministry of Water Resources
Development and Management 365 981 - - 365 981
Ministry of Finance 25 473 349 - 1 569 419 27 042 768
____________ ___________ ___________ ___________
Total 25 839 330 - 1 569 419 27 408 749
____________ ___________ ___________ ___________
December 2017
Ministry of Water Resources
Development and Management 365 981 - - 365 981
Ministry of Finance 27 042 768 - 1 668 891 28 711 659
____________ ____________ ___________ __________
Total 27 408 749 - 1 668 891 29 077 640
____________ ____________ ___________ __________
The terms and conditions of the loan are yet to be agreed.

2017 2016
$ $
13 DAM CONSTRUCTION LIABILITIES
13.1 Analysis
Balance as at 1 January 39 966 655 72 571 766

Certificates drawn during the year 90 839 357 35 592 452
Disbursements done during the year (92 584 028) (68 197 563)
___________ ___________
Balance as at 31 December 38 221 984 39 966 655
___________ ___________
13.2 The balance represents certificates submitted which are yet to be paid to the contractors by the Infrastructural
Development Bank of Zimbabwe (IDBZ) on behalf of the Authority. Contributions by the Ministry of Finance
to settle the amounts will be credited to Government equity contribution.
23

31 December 2017
2017 2016
$ $
14 TRADE AND OTHER PAYABLES
14.1 Analysis
Trade payables 36 383 384 39 604 589

Accrued leave pay 4 126 885 4 116 395
Value added tax and penalties 9 097 827 9 560 131
Pay As You Earn and penalties (ZIMRA) 1 459 305 (1 166 788)
Accrued pensions and penalties 20 645 178 21 032 960
Outstanding net salaries 185 652 14 453 336
Water fund (refer to note 14.2) 2 943 254 4 305 946
Other creditors 3 357 292 9 306 364
___________ ___________
78 198 777 101 212 933
___________ ___________
14.2 Water Fund
The Authority administers a Water Fund, established in terms of Section 39

of the Zimbabwe National Water Authority Act (Chapter 20:25) in
accordance with the directions of the Minister.
Reconciliation of the Water Fund for the year:

Opening balance 4 307 437 3 824 679
Levies invoiced to raw water users during the year 1 044 144 913 609
Less: Payment (1 500 000) -
Statutory functions expenditure for the year (907 621) (430 851)
___________ _________
Closing balance 2 943 960 4 307 437
___________ _________
Represented by:
Debtors (note14.1) 2 943 254 4 305 946
Equipment 706 1 491
___________ _________
2 943 960 4 307 437
___________ _________
15 NET FINANCING INCOME
Interest received 4 211 264 2 099 063

Interest paid (3 451 635) (1 056 738)
__________ __________
759 629 1 042 325
__________ __________
24

31 December 2017
2017 2016
$ $
16 OTHER OPERATING INCOME
Donations - 10 924
Government grant contribution - 1 100 000
Group life assurance reversal - 1 471 557
Profit on disposal of Treasury Bills 3 711 616 -
Profit on disposal of vehicles 21 723 -
Other income 3 680 849 1 439 406
__________ __________
7 414 188 4 021 887
__________ __________
17 STAFF COSTS
Non-executive board members’ fees and emoluments 47 241 73 700

Executive management 884 369 996 369
Management 4 945 138 6 411 598
Other employees’ salaries and staff costs 22 027 962 23 407 346
__________ ___________
27 904 710 30 889 013
Less: Transfers to the water fund (276 653) (367 787)
__________ ___________
27 628 057 30 521 226
__________ ___________
18 CLEAR WATER PURCHASED FOR RESALE
18.1 Analysis
Harare City Council 93 894 178 741

Bulawayo City Council 1 717 294 1 897 941
Zvishavane Municipality 10 115 7 714
Victoria Falls Municipality 235 283 222 229
Gweru City Council 733 373 1 149 253
Chegutu Municipality 137 498 14 436
Masvingo Municipality 114 396 95 427
___________ ___________
3 041 853 3 565 741
___________ ___________
18.2 The Authority purchases clear water from some Local Authorities for resale to customers who are outside of
the Local Authorities’ boundaries. The customers comprise mainly of Government Institutions and
Departments. The Authority charges a mark-up of 35% over and above the cost of water purchased from the
Local Authorities.
25

31 December 2017
2017 2016
$ $
19 OTHER OPERATING EXPENSES
Administrative charges 51 972 39 463
Advertising and promotions 243 694 241 541
Audit fees and expenses 94 300 99 790
Bank charges 159 871 94 604
Communication costs 692 698 702 516
Consultancy fees 1 168 706 58 445
Discount allowed 15 391 420 -
Inputs and services 2 062 410 1 608 198
Legal fees and expenses 102 883 197 152
Penalties 88 028 282 199
Premises costs 892 029 854 614
Transport and travelling expenses 2 597 791 2 770 632
___________ ___________
23 545 802 6 949 154
___________ ___________
20 BAD DEBTS AND MOVEMENT IN ALLOWANCE FOR

CREDIT LOSSES
Bad debts 1 660 572 2 235

(Decrease)/increase in allowance for credit losses (12 904 834) 3 916 745
___________ ___________
(11 244 262) 3 918 980
___________ ___________
The general allowance is based on management’s evaluation of the accounts

receivables’ balances and other exposures in respect of losses which are
known to be present in the accounts receivables balances.
21 RECONCILIATION OF LOSS FOR THE YEAR

TO CASH GENERATED FROM OPERATIONS
Profit/ (loss) for the year 1 768 858 (2 533 927)
Adjustments for:
Depreciation and amortisation 4 537 304 4 520 991
Profit on disposal of fixed assets (21 723) 22 749
Fair value adjustments of investments (1 978) (1 953)
Net financing income (759 629) (1 042 325)
____________ ____________
5 522 832 965 535
Changes in working capital:
Inventories (53 426) 122 989
Trade and other receivables 20 936 386 (17 885 578)
Trade and other payables (23 014 156) 16 342 997
____________ ____________
Cash flows from operations 3 391 636 (454 057)
____________ ____________
26

31 December 2017
22 SEGMENT REPORTING
Information reported to the chief operating decision maker for the purpose of resource allocation and
assessment of segment performance focuses on geographical areas. The Authority reportable segments under
IFRS 8 are as follows:
1 Head Office;
2 Mzingwane Catchment;
3 Gwayi Catchment;
4 Sanyati Catchment;
5 Save Catchment;
6 Runde Catchment;
7 Mazowe Catchment;
8 Manyame Catchment;
9 Groundwater Department;
10 Livewater Borehole (Private) Limited; and
11 Kumakomo Beverages (Private) Limited.
22.1 Segment revenues and results

Segment revenue Segment profit/ (loss)
2017 2016 2017 2016
$ $ $ $
1 Head office 628 - (28 037 172) (7 120 437)

2 Mzingwane Catchment 6 083 838 7 458 891 2 695 320 2 279 944
3 Gwayi Catchment 7 118 350 7 653 550 1 217 452 255 791
4 Sanyati Catchment 7 893 207 7 008 392 8 313 040 1 743 864
5 Save Catchment 4 940 645 5 153 734 5 318 065 409 200
6 Runde Catchment 7 688 262 8 041 845 5 363 453 1 887 984
7 Mazowe Catchment 7 022 472 7 363 280 2 896 732 811 453
8 Manyame Catchment 7 189 800 6 732 546 7 267 079 1 745 295
9 Groundwater 331 794 913 357 (1 538 808) (386 217)
10 Livewater - - (436 974) (202 914)
11 Kumakomo Spring Water 8 153 14 355 (27 572) (4 094)
__________ ___________ ___________ ___________
48 277 149 50 339 950 3 030 615 1 419 869
__________ ___________ ___________ ___________
Segment revenue reported above represents revenue generated from external customers. There were no inter-
segment sales in the current year (2016: Nil).
The accounting policies of the reportable segments are the same as the Authority’s accounting policies
described in note 3.
27


31 December 2017
22.2 Segment assets and liabilities

2017 2016
$ $
Segments assets
1 Head office 503 425 621 425 330 706

2 Mzingwane Catchment 225 354 392 223 664 504
3 Gwayi Catchment 139 569 954 142 366 605
4 Sanyati Catchment 325 724 170 330 508 060
5 Save Catchment 444 380 520 439 831 023
6 Runde Catchment 341 724 631 340 111 339
7 Mazowe Catchment 209 714 367 209 683 009
8 Manyame Catchment 88 081 216 89 497 655
9 Ground water 2 722 434 3 659 467
10 Livewater 33 114 245 494
11 Kumakomo Springwater 74 267 82 731
12 World Bank 3 303 690 114 047
_____________ _____________
2 284 108 376 2 205 094 640
_____________ _____________
Segment liabilities
1 Head office 137 669 808 126 120 287

2 Mzingwane Catchment 6 644 735 7 650 168
3 Gwayi Catchment 1 931 832 5 945 937
4 Sanyati Catchment (5 182 086) 7 997 978
5 Save Catchment 636 968 1 405 534
6 Runde Catchment (5 864 391) (2 114 228)
7 Mazowe Catchment 4 151 423 6 965 982
8 Manyame Catchment 3 374 515 12 109 855
9 Groundwater 4 921 228 4 319 455
10 Livewater 1 469 474 1 244 880
11 Kumakomo Springwater 406 257 387 150
12 World Bank 359 802 74 950
____________ ___________
150 519 565 172 107 948
____________ ___________
23 PENSIONS AND POST RETIREMENT OBLIGATIONS
23.1 The General Government Pension Scheme
All employees who were transferred from the former Department of Water Resources are members of the
General Government Pension Scheme, which is a defined contribution fund. Contributions by the Authority
and employees amount to 15% and 7½% respectively of pensionable emoluments. The Authority’s obligations
under the scheme are limited to the contributions payable that are calculated on the above mentioned basis.
28

31 December 2017
Reconciliation of the outstanding balance included in Trade and Other Payables is as follows:
2017 2016
$ $
Balance at the beginning of the year 2 721 652 1 626 761

Contributions during the year 941 318 1 094 891
__________ ___________
3 662 970 2 721 652
Less remittances for the year (2 266 402) -
__________ __________
Balance at the end of the year 1 396 568 2 721 652
__________ __________
23.2 Zimbabwe National Water Authority Pension Fund
All permanent employees who joined the Authority after 1 January 2000 and all employees transferred from
the former Regional Water Authority are members of a defined contribution scheme administered by Old
Mutual Life Assurance Authority. Contributions by the Authority and employees amount to 15% and 7½%
respectively of pensionable emoluments. The Authority’s obligations under the scheme are limited to the
contributions payable that are calculated on the abovementioned basis.
2017 2016
$ $

Contributions for the year 2 426 496 2 423 741
__________ _________
17 474 177 15 147 483
Less remittances for the year (6 073 025) (99 802)
__________ _________
__________ _________
23.3 National Social Security Authority Scheme
The Authority contributes to the statutory National Social Security Authority Scheme. This is a defined
contribution scheme and was promulgated under the National Social Security Authority Act Chapter 17:04.The
Authority’s obligations under this scheme are limited to specific contributions regulated from time to time. The
Authority’s contributions are charged to the statement of profit or loss and other comprehensive income in the
year to which they relate.
29

31 December 2017
2017 2016
$ $

Contributions for the year 1 770 513 1 090 621
__________ __________
4 328 301 3 528 788
Less remittances made during the year (1 602 230) (971 000)
__________ __________
__________ __________
24 FINANCIAL RISK MANAGEMENT
The Authority has exposure to the following risks from its use of financial instruments:
 Credit risk; and

 Liquidity risk.
24.1 Credit risk management
Credit risk is the risk that a customer or counterparty to a financial instrument will cause a financial loss for
the Authority by failing to discharge an obligation. Credit risks arises primarily through the provision of
water services and treasury activities. The Authority’s main source of income is derived from the sale of raw
water to farmers and estates and the sale of clear water to various types of consumers including individuals
and Local Authorities.
Raw water consumers have entered into Raw Water Agreements with the Authority and are not required to
provide any security.
Clear water consumers have also entered into Supply Agreements with the Authority. As water is considered
a basic human right, no credit limits are set on the accounts. The increasing block tariffs are implemented to
manage demand.
The methods used to encourage timely settlement of accounts include negotiation of payment plans,
disconnections or limitations of water supply and the charging of interest on overdue accounts.
30


31 December 2017
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure that the Authority is exposed
to:
2017 2016
$ $
Financial assets:
At amortised cost:
Trade receivables 111 856 861 146 237 196
Less: Allowance for credit losses (60 213 764) (73 118 598)
___________ ____________
Carrying amount 51 643 097 73 118 598
Other accounts receivables 9 171 380 8 632 265
___________ ____________
60 814 477 81 750 863
At fair value through profit or loss:
Cash and bank 4 670 482 1 267 208

Short term investment 3 500 000 -
___________ ___________
68 984 959 83 018 071
___________ ___________
31

31 December 2017
24.1 Credit risk management (continuation)
Trade receivables
The table below shows the ageing and impairments in respect of trade receivables:
Gross Impairment Gross Impairment

2017 2017 2016 2016
$ $ $ $
Neither past due nor impaired

Current 5 245 023 - 4 909 763 -
Past due but not impaired

Past due 31-60 days 5 295 790 - 4 493 158 -
Past due 61-90 days 4 215 993 - 3 400 769 -
Past due 91-120 days 2 550 512 - 3 062 835 -
Impaired
Past due  121days 94 549 543 (60 213 764) 130 370 671 (72 526 913)
___________ ___________ __________ ___________
111 856 861 (60 213 764) 146 237 196 (72 526 913)
___________ ___________ __________ ___________
The movements in the allowance account for impairment in respect of trade receivables during the financial
year is as follows:
Individually Collectively
impaired impaired Total
$ $ $
Balance at 1 January 2016 33 630 018 33 926 953 67 556 971

Charge for the year 25 669 709 (20 669 767) 4 999 942
__________ __________ __________
Balance at 31 December 2016 59 299 727 13 257 186 72 556 913
Charge for the year (29 095 270) 16 752 121 (12 343 149)
__________ __________ __________
Balance at 31 December 2017 30 204 457 30 009 307 60 213 764
__________ __________ __________
Other accounts receivable
The Authority believes that no impairment allowance is necessary in respect of other accounts receivable past
due as these customers have a good track record.
Cash and Bank balances
The Authority maintains cash and bank balances with various financial institutions and in this regard, it is the
Authority’s policy to limit its exposure to any one financial institution. Deposits are placed only with approved
financial institutions.
32

31 December 2017
24.2 Liquidity risk management
Liquidity risk is the risk that the Authority will encounter difficulties in meeting commitments associated with
financial liabilities, and arises because of the possibility that the Authority could be required to pay its
liabilities earlier than expected.
Exposure to liquidity risk
The carrying amount of financial liabilities represents the maximum liquidity risk that the Authority is exposed
to.
2017 2016
$ $
Financial liabilities
At amortised cost:
 Long term borrowings 29 077 640 27 408 748

 Trade and other payables 78 177 838 101 212 933
At fair value through profit or loss:
 Bank overdraft 26 494 573

___________ ___________
107 281 972 128 622 254
___________ ___________
The repayment terms of the long term loans from the Government are yet to be established.
The Authority’s liquidity management process includes the day-to-day funding and monitoring future cash
flows to ensure that critical funding requirements are met.
25 RELATED PARTY TRANSACTIONS
The Authority has a related party relationship with its parent ministry, The Ministry of Environment, Water
and Climate, the Board members and its executive management. Since the Authority is a state-controlled
entity, it also has a related party relationship with all other state-controlled entities. Unless otherwise
disclosed, all transactions with related parties are on an arm’s length basis at market related prices.
Transactions with key Management Personnel
Key management personnel compensations are included under staff costs. None of the key management
personnel had or has any significant influence with any entity with whom the Authority has had significant
transactions with.
33

31 December 2017
26 COMMITMENTS
Operating leases
The Authority leases a number of office facilities under operating leases. The leases run for a year with an
option to renew. Lease payments are subject to an annual escalation to reflect market rentals.
2017 2016
$ $
Minimum leases payments due
within a year 321 416 320 557
___________ __________
Capital commitments
Contracted but not provided for: Projects 45 000 000 28 000 000
Authorised but not contracted for: Operations 7 341 130 8 686 790
___________ __________
52 341 130 36 686 790
___________ __________
This capital expenditure will be financed from the Ministry of Finance loans, Government equity
contributions and from internal resources.
27 CONTINGENT LIABILITIES
Galaxy Engineering Designs were contracted to design the upgrading of the Victoria Falls Water Supply in
preparation for the hosting of the UNWTO General Assembly. However, they are claiming US$ 6 077 851.53
from the Authority, being the total contract amount including works not carried out.
The Authority’s legal department is of the opinion that the probability of the claim by Galaxy materialising is
very remote. Accordingly, a liability of US$176 411.59 has been recognised in the annual financial statements
as the outstanding amount as per the certified works.
Litigation was instituted against the Authority by the employees in respect of the 50% housing allowance
dispute. The amount of the claim is estimated to be $20.6million.The case is still pending at the Supreme
Court. Changes to the payroll structure with regards to the Housing allowance were implemented in 2017. The
Authority’s lawyers have advised that they believe the Authority has reasonable defences and that the
probability of the loss will be minimal. Accordingly, no provision has been made in the annual financial
statements.
28 EVENTS AFTER THE REPORTING PERIOD
There are no events after the reporting period.
29 GOING CONCERN
The Authority had positive operating cash flows for the year ended 31 December 2017 of $3.4 million (2016:
negative $0.5 million) and during the year under review the Authority managed to settle some of its obligation
like net salaries which had accumulated up to 11 months and some of its creditors. A profit of $1.8 million
(2016: $2.5 million loss) was reported during the year.
34

31 December 2017
Although there was an improvement in its cash flows during the year under review, the Authority is still
operating in a challenging economic environment and operations may continue to be affected for the
foreseeable future by the adverse effects of the liquidity challenges being experienced in the country. These
conditions give rise to a material uncertainty which may cast significant doubt about the Authority’s ability to
continue operating as a going concern and therefore the Authority may be unable to realise its assets or
discharge its liabilities in the normal course of business.
The ability of the Authority to operate as a going concern in such a challenging environment is subject to
continual assessment.
The Board of Directors and Management have reviewed the status of the Authority’s ability to continue to
operate as a going concern and the mitigating activities including reference to matters affecting the Authority
and the water industry as a whole. In their assessment, the Board considered the following:
 The completion of the Tokwe Mukorsi Dam, in the Lowveld where sugar cane is grown, will result in
a significant increase in the Authority`s sales of raw water for irrigation purposes;
 The Authority is carrying out a restructuring exercise which will result in the non-commercial
functions being transferred to the Water Services Regulator which is being formed by the parent
Ministry; and
 The Authority will continue with engagements with Ministry of Finance for the settlement of
Government debt. The engagements had resulted in set-offs of $3.3 million against the Authority’s
tax dues by the end of July 2017 and the payment of $49 million through Treasury Bills in September
2017. The Authority was owed US$6.7 million as at 31 December 2017 (2016: $42.9 million) by
Government Institutions.
Initiatives that are being pursued by the Board of Directors and Management include the following:
 In order to increase revenue, the Authority will expand its activities in the boreholes drilling segment;
the Authority is in the process of procuring 5 new drilling rigs;
 Arrangements whereby the amounts owed by Government institutions will be set-off against some of
the Authority’s statutory creditors will be rigorously pursued;
 The Authority is also engaging Ministry of Finance on the set-off arrangements against Local
Authorities debts amounting to $34.2 million which the Authority was owed as at 31 December 2017
(2016; $34.7 million);
 The Authority has established the Revenue Collection department in order to enhance its debt
collection;
 Aggressive debtors’ collection policies involving debt collectors, litigations and disconnections will
be implemented. Local authorities are being asked to extinguish part of their debts in residential
stands which are then sold to the Authority’s employees;
 Prepaid water meters have been installed for Gwanda and Beitbridge local authorities;
 Prepaid water meters will be installed for all local authorities and other targeted consumers in the year
2018;
 New business ventures will be entered into in the following identified business lines:
- Mini Hydro power stations;

- Eco-tourism; and
- Construction.
 The Authority obtained a Grant from the Zimbabwe Reconstruction Fund (ZIMREF) which is being
administered by the World Bank to the tune of US$20 million which will be applied towards the
rehabilitation of seven Water supply stations. This intervention is expected to result in an increase in
revenue and cash flows; and
35

31 December 2017
 The financial statements have been prepared on a going concern basis. This basis presumes that the
Authority’s plans will be effective and the realization of assets and settlement of liabilities will occur
in the ordinary course of business.
36

ZINWA Integrated Report 2017 PDF

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

ZINWA Integrated Report 2017 PDF

Hochgeladen von

Copyright:

Verfügbare Formate

Contents

CHIEF EXECUTIVE OFFICER’S REPORT 9

CORPORATE GOVERNANCE REPORT 17

OVERVIEW OF STRATEGIC OBJECTIVES 25

HUMAN CAPITAL MANAGEMENT 29

CORPORATE SOCIAL RESPONSIBILITY 31

PROJECTS COMPLETED DURING 2017 33

MAJOR PROJECTS UNDERWAY 35

DROUGHT MITIGATION PROJECTS 35

AUDITED FINANCIAL STATEMENTS 41

INDEPENDENT AUDITOR’S REPORT 42

STATEMENT OF FINANCIAL POSITION 46

STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME 47

STATEMENT OF CHANGES IN EQUITY 48

STATEMENT OF CASH FLOWS 49

NOTES TO THE FINANCIAL STATEMENTS 50

ZINWA INTEGRATED REPORT 2017 | 1

2 | ZINWA INTEGRATED REPORT 2017

ZINWA INTEGRATED REPORT 2017 | 3

Throughout 2017 the country’s economic performance remained depressed following

Infrastructure Development and Shareholder Support

The commitment by the Shareholder, the Government of Zimbabwe, to infrastructure

ZINWA INTEGRATED REPORT 2017 | 5

Outlook and Appreciation

I extend my appreciation to the Government of Zimbabwe, through the Minister of

I acknowledge the invaluable contribution of fellow Board Members, the dedication of

Eng. Dr. M.J. Tumbare, PrEng, CEng

6 | ZINWA INTEGRATED REPORT 2017

Figure 1: Revenue Trends from 2009 – 2017

ZINWA INTEGRATED REPORT 2017 | 9

10 | ZINWA INTEGRATED REPORT 2017

ZINWA INTEGRATED REPORT 2017 | 11

12 | ZINWA INTEGRATED REPORT 2017

ZINWA INTEGRATED REPORT 2017 | 13

A revenue department was introduced in the structure to enhance revenue collection.

To improve efficiency, Catchment operational boundaries were also adjusted to ensure

Achievements In The Year Under Review

Though the operating environment was characterised by several macro – economic

14 | ZINWA INTEGRATED REPORT 2017

We thank you all

ZINWA INTEGRATED REPORT 2017 | 15

Introduction of the Board of Directors

ZINWA INTEGRATED REPORT 2017 | 17

Eng. Dr. Michael James Tumbare (Chairman)

Dr. Tumbare is a professional Engineer with over 40 years of

Mrs Josephine Ncube (Vice Chairperson)

She is a lawyer by profession who holds a Bachelor of Law

Ms Biri is an Environmentalist and an Agriculturalist appointed

18 | ZINWA INTEGRATED REPORT 2017

She is an Environmentalist appointed as a representative from

Mrs Joyce Malaba

She is an Economist and a holder of a BSc Economics from the

Engineer Gilbert Mawere

He is a civil engineer and a holder of BSc Civil Engineering (Hons)

He is a Marketer by profession and was appointed as a

ZINWA INTEGRATED REPORT 2017 | 19

He is a holder of a BSc Civil Engineering (Hons) from the University

Dr Jefter Kuziwa Sakupwanya (Chief Executive Officer)

He is a water resources management specialist with experience

Committees of the Board of Directors

1. The Technical and Operations Committee

2. The Finance Committee