Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697795289591.pdf (Grenada)
NAWASA annual report 2 1 1 our vision A premier water utility, providing excellent service to all customers, fostering a healthy and productive nation.

our mission To provide customers with a safe, adequate and reliable water supply and safe disposal of waste water, in a viable and efficient manner, that meets and exceeds customer expectations, and ensures the development of our organization, communities and our nation.

NAWASA Corporate Information Bankers RBTT Grenada Limited Grand Anse, St. George Tel.
(473) 444–4919 Grenada Co-operative Bank Limited Church Street, St. George’s Tel.

(473) 440–2111 First Caribbean International Bank Church Street, St. George’s Tel.

(473) 440–3232 Republic Bank Grenada Limited Republic House, Grand Anse, St. George Tel.

(473) 444–2265 Attorneys-at-Law Wilkinson, Wilkinson & Wilkinson Lucas Street, St. George’s Auditors PKF Accounting & Business Advisors Pannell House, Grand Anse, St. George Tel.
(473) 440–2562/3014 Board of Directors Chairman Mr. Terrence P. Smith Deputy Chairman Mrs. Pauline Andrew Director Mr. Andre Worme Director Mr. Trevor Thompson Director Mr. Cecil Harris Mrs. Jocelyn Paul-Thomas Director Director Mr. Nigel John Director Mr. Joseph C. Antoine Director Mr. Lyle Bullen General Manager Mr. Christopher Husbands Registered Office The Carenage, St. George’s Grenada West Indies Tel.
(473) 440–2155 | Fax (473) 440–4107 Email: nawasa@nawasa.gd Sub-Offices Lower Depradine Street Gouyave, St. John Tel.

(473) 437–1606 | Fax (473) 437–1607 Seaton James Street Grenville, St. Andrew Tel.

(473) 442–7417 | Fax (473) 438–4185 Operations & Maintenance Dusty Highway Grand Anse, St. George Tel.

(473) 444–4661 | Fax (473) 444–2080 5 contents corporate information .

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4 board of directors.

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8 chairman’s report .

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10 general manager’s report .

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13 financial statements .

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25 2011 highlights .

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51 AnnuAl RepoRt 2011 | Section Header 6 Board of Directors Mr. Andre Worme Director Mr. Joseph Antoine Director Mrs. Pauline Andrew Director AnnuAl RepoRt 2011 | Board of directors 7 Mrs. Joycelyn Paul–Thomas Director Mr. Trevor Thompson Director Mr. Terrence P. Smith Chairman Mr. Cecil Harris Director Absent from photograph Mr. Nigel John Director Mr. Lyle Bullen Director AnnuAl RepoRt 2011 | Board of directors 8 Senior Management Team AnnuAl RepoRt 2011 | Senior ManageMent teaM 9 Absent from photograph Mr. David Lewis Transmission and Distribution Manager Mr. David Francis Finance Manager Mr. Nigel Lowe Chief Engineer Mr. Allan Neptune Production & Quality Manager (Ag) Mrs. Louisa Yuventi Accountant Mr. Vernon O’Brien Information Systems Manager Christopher Husbands General Manager Ms. Raelene Lazarus Communications Manager Mrs. Ann Primus Administrative Assistant to the General Manager Mr. Lauriston Hosten Planning & Development Manager (Ag) Mrs. Pansy Ventour Human Resources Manager AnnuAl RepoRt 2011 | senior ManageMent teaM 10 Chairman’s Report AnnuAl RepoRt 2011 | Chairman’s report 11 During the year 2011 the National Water & Sewerage Authority (NAWASA) operated in the environment of challenges arising from the global and regional financial and economic crises, including sluggish economic recovery and continued high unemployment.
The Authority focused on consolidation and management of the new tariff structure implemented in mid 2010 including actions to ensure greater compliance of customers; organizational development; increased attention to strategy; and more diligent corporate governance.

Mr. Terrence P. Smith Financial Highlights NAWASA reported a net loss of $3.6 million for the year 2011, representing a reversal from the modest net profit of $0.5 million for the year ended December 31, 2010.
This resulted largely from the write off of $3.4 million in bad debts, and the final allocation of impairment losses of $1.6 million related to NAWASA’s investments held with British American Insurance Company.

The Authority’s revenue for 2011 stood at $29.2 million, a 9.8% increase over the previous year, while the direct cost of providing water and sewerage services increased to $16.4 million – an increase of 7.5% over 2010.
With respect to trade receivables, the water and sewer debtors’ balance at year end was $12.2 million, while total assets were valued at $83.2 million.

Long-term borrowings stood at $3.8 million, down from $5.1 million for the previous year.

Corporate Governance Following adoption of charters for Compensation and Audit Committees in 2010, during the year both Committees functioned consistently.
Particular dedication was shown by the Compensation Committee, whose chairman led the Authority’s negotiating team in collective bargaining with both the Grenada Technical & Allied Workers’ Union (TAWU) and the Grenada Public Workers Union (PWU) for three bargaining units for the periods 2010–2013 and 2009–2012 respectively.

Further, an outstanding agreement with PWU for the period 2003-2009 was concluded in 2011.
The Authority has approached the collective bargaining process using current best practice which promotes information sharing, communication and cooperation to build trust and confidence among the parties, with the intended result of efficiency.

The Authority looks forward to the Unions’ continued commitment in this process.

The Board conducted an evaluation of its performance for 2010 and carried out a performance evaluation of the General Manager for the same period.
The first definitive step toward inclusion of the practice of Enterprise Risk Management (ERM) in the framework of corporate governance was taken in September/ October 2011 with implementation of a two-day workshop on ERM, attended by most Directors and executive management, along with directors and management from several other statutory enterprises.

Corporate Strategy The Board continued to focus on strategic planning in the conduct of our meetings.
The Board and management met in a one–day retreat in July 2011, facilitated by a regional management consultant.

The principal outputs AnnuAl RepoRt 2011 | chairman’s report 12 Statutory Reporting In November the Board re-appointed the firm of PKF Accountants & Business Advisors as the Authority’s Auditors for the ensuing year.
In a strong effort at compliance with the provisions of Part XII of the Public Finance Management Act, the Authority submitted its financial statements and annual report for 2010 to the Director of Audit in April 2011, and submitted its 2012 business plan to the Minister for Public Utilities in October 2011.
Acknowledgements I thank my fellow Directors for their support and oversight of the business of the organization during the year, and the Authority’s management and employees for continued dedication to duty.

Finally, I take the opportunity to thank sincerely NAWASA’s loyal customers and all stakeholders in the water sector.
Terrence P. Smith Chairman of this exercise were a clear understanding of our progress toward implementation of the 2009 – 2014 Strategic Plan, identification of amendments to the Implementation Schedule of the Plan, and an appreciation of the need for enhancing the awareness of all employees towards the Strategic Plan.
The Authority’s most significant strategic achievements for the year 2011 can be summarized as: • Consolidation and management of the new tariff embodied in the Water and Sewerage Rates and Charges Regulations 2010.
• Completion, in June 2011, of the Technical Assistance Project under the European Union-funded Southern Grenada Water Sector Supply Programme, which supported NAWASA’s efforts at improving its overall technical and financial performance; one of the outputs of this project, a new organizational structure, resulted in the recruitment of persons to the newly-created posts of Communications Manager and Information Systems Manager.
• In-house preparatory work for the launch of a Customer Service Charter (CSC); in this regard a CSC Employee Guide and first ever Employee Handbook were launched in a general meeting attended by Directors, management and all employees in July 2011.

• Start of development of a Water Supply Master Plan for Carriacou and Petit Martinique, which will facilitate formulation of a phased capital works investment program.

• Commencement of a Job Evaluation and Salary Structure Review exercise for the Authority.
AnnuAl RepoRt 2011 | Chairman’s report 13 General Manager’s Report AnnuAl RepoRt 2011 | chairman’s report 14 Operating Highlights Description FINANCE Expense: Revenue Avg.

Domestic Revenue per Domestic Customer ($ per year) Avg.

Non-Domestic Revenue per Non-Domestic Customer ($ per year) Avg.

Government Revenue per Government Accounts ($ per year) Avg.

Revenue per customer ($ per year) Avg.


Expense per customer ($ per year) Cash Collection: Cash Disbursement % Receivable period (days) HUMAN RESOURCES No.

of Employees /1,000 customer accounts Training hours per employee Total No.

Employees accessing training & development Avg.

No.

Employees in Organization 2011 2010 1.14 565 3,482 6,004 880 1,007 101 158 6.31 35.33 227 227 0.98 469 2,470 3,578 802 789 110 202 5.4 10.3 152 230 Expenditure on training & development.
(including Board) ($) 214,210 108,363 Employee health & Safety severity rate* 507 789 CUSTOMER SERVICE Customer service complaint rate *Lost workdays/100 employees/year 76 78 AnnuAl RepoRt 2011 | General ManaGer’s report 15 The Organization continued its transformation process as it completed the second full year of implementation of the 5 year strategic plan.

(2009–2014).

A number of significant initiatives were completed in accordance with our strategy.
Most notably, the Authority for the first time engaged the services of AON Consulting Group, a firm of Actuaries of international repute, to scientifically estimate the organizations’ pension liability.

The outputs of this actuarial valuation will be used in 2012, to develop an investment strategy to provide for this stream of projected liabilities.

Mr. Christopher Husbands Finance Department Income and Expenditure Revenue for 2011 was $29.2M which represents a 9.8% increase over 2010.
Direct expenditure increased by 7.5% while there was a substantial increase in indirect expenditure of 49% due to Bad Debts written off.

The Authority suffered a net loss of $3.5M for the year 2011.

This net loss was due to two significant one- off charges against expenditure.

For the second time within three (3) years, a review was done of the accounts receivables which resulted in the write off of $3.4M in bad debts for the year 2011.
These write off amounts mostly included accounts with balances which exceeded the 6 years stipulated statute of limitations.

Additionally, the final write-off of $1.6M of the total investments that have been held with British American Insurance Company (BAICO) was completed.

Removing the effects of these one-off charges, it shows that the operating performance of the company during 2011 would have yielded a profit of $0.7M.

Commercial Unit The newly created Commercial Unit showed very positive results.
Continued improvements in Financial Management are indicated in the summary statistics in Operational Highlights.

Most notable among these is the 44 day improvement in receivables collection, an area that has been problematic for years.

Removing the effects of the receivables attributable to the Government of Grenada, this statistic improves to an 88 day reduction in receivables on average.
In addition to improved account management strategies, the creation of the Asset Protection Unit and the use of the legal system for debt collection, both contributed to the improved financial results.

The Asset Protection Unit was quite visible throughout the island investigating allegations of tampering, sealing meters and ensuring that the assets of the Authority are well protected.

This resulted in a total of 1,080 services investigated for suspected tampering, of which 153 or 14% were offenders.
Criminal and financial charges were applied to the offenders according to the provisions of the NAWASA Act.

During the fiscal year, arrears of $809,011 on 472 accounts were pursued through the legal system.

The responses were varied and although there has been a high percentage of success, a number of cases remain pending at different stages within the court system.

Customer Service Unit The restructured CSU included the establishment of the field response teams.
These 2 teams completed 1,895 or 79% of the 2,392 service orders assigned to them.

At year end only 21% of the service orders requiring direct (non-financial) customer contacts remained outstanding.

This is an all-time low.


AnnuAl RepoRt 2011 | General ManaGer’s report 16 Customer care advocates at initiation ceremony Human Resources Department Staffing The staff compliment of 227 employees which included one hundred and sixty-three (163) permanent and sixty – four (64) long term contracted workers has shown a decrease compared to 230 in 2010.

Short term or temporary contracted amounted to 39 workers.
The focus of Staff Training and Development has continued to improve in keeping with one of the organization’s strategic goals and objectives which is: ‘To ensure a sustainable pool of trained and efficient human resources is available for the ongoing functioning of NAWASA.

The 2011 training budget amounted to $249,900 compared to $250,000.00 in 2010 and a total of 8,020 training hours were expended.
As part of a deliberate effort to get industrial agreements with the respective bargaining units current, collective bargaining agreements were signed with the Public Workers Union (PWU) and the Technical and Allied Workers Union (TAWU) for general staff.

The PWU agreement covered a 6 year prior period and the TAWU a thirteen (13) year prior period.
Performance Management System and Job Evaluation The Authority contracted the services of Mr. Benthan Hussey, Labour Market Specialist / Consultant to conduct a job evaluation and salary review exercise for a period of four (4) months.

The main objective of the exercise was to improve efficiency and productivity in the Authority’s operations by ensuring internal and external equity in job definitions, profiles, recognitions and rewards.
AnnuAl RepoRt 2011 | General ManaGer’s report 17 The exercise contained four distinct elements: Health and Safety • Review of existing pay and grade structure • Development and utilisation of a classification structure • The conduct of a salary survey • The formatting of new salary grade structure Job Description A revised job development format has been adapted by the Authority.
The main features of the new format are: Health and Safety continued to be of high priority in the management of injury prevention and other health services.

The total certified sick leave amounted to 1,096 days, and uncertified 55 days.

In an initiative to encourage staff wellness, safety and health, the Authority collaborated with the Technical and Allied Workers’ Union (TAWU) to host a health fair for the workers.

The main focus was on cancer and cardiovascular issues.
• The identification of main responsibilities of a job position • The provision of more details about the responsibilities and duties to be performed • Specific standards or performance indicators for these duties /tasks Retirees for 2011 The following staff members retired after making their contributions to the Authority.

The opportunity is taken to thank them for their years of service and dedication and wish them an enjoyable retirement.
Retirees James Alexander Martin Cadore Roland Medford Jepson Phillip Valentine Chetram Retirees for 2011 Department Date Service Contribution T&D T&D P&D T&D T&D 31/05/2011 20 years and zero months 02/02/2011 17 years and five months 22/11/2011 23 years and nine months 05/08/2011 23 years and three months 01/11/2011 25 years and six months AnnuAl RepoRt 2011 | General ManaGer’s report 18 Engineering Division Transmission and Distribution A total of 18 micro projects were completed by the T&D department at a cost of EC$1,064,400.00.
These projects which generally involve pipeline replacements and upgrades were completed in different areas throughout the island.

Some of the areas are listed below.

During the year a total of 6,560 leaks were repaired, which represents a 4.7% decrease from 2010.

The majority of the repairs were done on half-inch diameter lines as shown in the chart below.

Our customer base continued its growth with 641 new service connections installed during the report period.
A task force was introduced in August 2011 to work after normal working hours to repair leaks, and attend to other customer problems.

In the four months of their operation, they repaired a total of 461 leaks, which, prior to their existence, would have continued to leak at least until the next day.

This continues to underscore the Authority’s commitment to both improved customer service and water conservation.
Due largely to reduced production during the dry season, over 660,000 gals of water were delivered to our customers via trucks at a cost of approx.

$70,000.

Parish St. Georges St Andrews St. John St Mark St. David St Patrick Description Vendomme to Sanco Extension and New Hampshire Upgrading Upper Capital Upgrading and Birchgrove Pipeline Replacement Mt.
Plaisir Pipeline Upgrade and Marigot Upgrading Duquesne Pipeline Upgrade Mahoe/Cafe Upgrading Rose Hill Pipeline Extension and Bathway Replacement Micro Projects completed by T&D department 1% 3% 1% 9% 1% 9% 14% 12% Repairs by size for 2011 50% 1/2 in.

3/4 in.

1 in.

1 1/4 in.

1 1/2 in.

2 in.

3 in.

4 in.

6 in.


AnnuAl RepoRt 2011 | General ManaGer’s report 19 Pipe laying on Barrow–Morne Jaloux New filter inlet and drain pipe work at Mamacanae Production and Quality The Production and Quality department performed creditably over the period under review.
All units, including treatment plant operations, pump and electrical, laboratory, chlorination, and sewerage together with the supporting service of the ground crew played their role in enabling the department to move closer towards fulfilling its strategic objectives and goals.

Improvements were seen in the treatment plants under the Southern Grenada Water Supply Project in terms of instrumentation and equipment geared towards improved water supply, i.e.

quality and quantity.


Much improvement was realized in chlorination on several plants where change over chlorinators and electrical booster pumps were installed.

Several plants including Mardigras, Annandale, and Windsor Forest have undergone complete filter rehabilitation, and thus water quality improvement.

The replacement of some 600 cubic yards of filter media would further strengthen the ability of the requisite plants to achieve improved and sustained water quality.
The table below is a comparative summary of Microbiological sampling for 2011 compared to 2010.

Total Quality Checks 2,166 2,367 2010 2011 Number of Samples taken from NAWASA’s Distribution Number of Positive Samples Microbiological samples for 2011 1,644 1,748 181 157 Notwithstanding several obstacles, all units showed commitment and initiative in overcoming same.
Pump and electrical for example has been exceptional in dealing with the many challenges of the problems encountered with the transitions of the new systems under the SGWP and yet accomplished upgrades and maintenance of all of the Authority’s diverse electromechanical equipment.
AnnuAl RepoRt 2011 | General ManaGer’s report 20 s r e t e m i l l i M 7000 6125 5250 4375 3500 2625 1750 875 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 Comparative Rainfall of 2010 to 2011 Planning & Development During the report period, the Planning and Development Department completed 21 projects.

The improvement works have ensured a better quality and quantity of service in several areas of the country.
Main construction activities under this project concluded in the first quarter of the year.

As expected with a project of this magnitude, a number of “teething problems” were encountered and addressed as the systems were put into operation during the year.

These have all been addressed and the improved benefits of the project are being experienced by customers especially as it relates to regularity, adequacy and water quality within the project area.
evacuation of residents from flood prone areas along this river and other adjacent catchments.

Rainfall data was collected from 18 stations island wide which totalled 46,000 cm of rain fall during 2011.

Above is comparative rainfall data of 2010/2011.

Garage Unit The cost for maintenance of the 57 vehicle fleet was approx.

$225,000.00.
$225,000.00.

Services from the use (internally) of our backhoes and trucks (to NAWASA) were valued at $535,053.57 and $183,695.00 respectively, based on market rates for the time spent on jobs throughout the year.

The department was able to convert information on NAWASA’s water supply and distribution systems from hard copy maps to digital maps throughout the Island.
Welding activities done by the section includes maintenance to vehicles and plants and to NAWASA’S other physical assets, and were valued at $169,420.00 Data collection continued toward the completion of the setting up of a Geographical Information System, to support the Organisations operations.
The P&D Department in conjunction with NADMA has established an early flood warning system in Balthazar which will ensure early A total of four (4) vehicles and one (1) piece of heavy equipment were sold, and nine (9) new vehicles were bought, as part of the continued strategic objective of having adequate and reliable equipment and transportation, to support our activities.
AnnuAl RepoRt 2011 | General ManaGer’s report 21 Information Technology The Information System Unit (ISU) underwent organisational changes in 2011.

The Documentation Centre was added to the original unit and an Information Systems Manager was contracted from 1st September, 2011.

There have been many challenges facing the new Unit, mostly because of the implementation of the new NorthStar CIS in 2010, after several years of using the old AS400 IBM mainframe system.
As the months passed by, there was a distinct improvement in and confidence with the use of the NorthStar CIS, with complaints and fault reports being drastically reduced.

Another notable achievement of the ISU was the relocation of the server room.

The relocation of the servers from the main office on the Carenage to Observatory Road location was done mainly to improve the physical security of the server room, and decrease the risk from data loss during hurricanes, rough seas and/or flooding.
The close proximity of the Carenage to the water front posed a real danger to the servers being damaged during inclement weather conditions.
Communications Unit Significant achievements within the Communications Unit included the first ever observance of World Water Day; visibly increased efforts in advocacy and education on water related matters especially targeted to our youth; emphasis on corporate image building including development of a media kit and the publication of the Authority’s first newsletter – “Droplets”.

The above underscores the Authority’s focus on cultivating positive relationships internally and externally.
In addition, the unit has been further strengthened by the appointment of a Communications Manager.

Efforts at sensitizing the public on issues of water conservation and protection in 2011 were evident through regular school visits, facilitation of student visits at treatment plants and offices, and the support of various school activities which provided the opportunity for continued advocacy through branding, presentations, consultations and other forms of informal engagement.
The Authority’s staff were in high demand as resource persons for the 2011 RBTT Young Leaders projects, guided by the topic, “Water- Beyond the Surface — Sustaining Life Securing our Future.” NAWASA also played an integral role in the 2011 GRENCODA Student Assistance Students of Holy Cross RC make their presentation for World Water Day 2011 AnnuAl RepoRt 2011 | General ManaGer’s report 22 Programme Camp attended by approximately thirty six (36) boys and girls with an age range of between twelve to sixteen years.
The camp was held during the week of August 22–27 at the New Life Organisation’s campus in St. John’s under the theme “Water a critical development resource, seriously challenged”.

This theme was especially propitious with Grenada’s 2009-2010 experience with severe drought conditions, which focused the minds of most nationals on the value of access to potable water.
Undoubtedly, however, the jewel in the crown with regard to education and advocacy for water protection and conservation goes to the 1st Annual Water Conservation March held in observance of World Water Day, Cash prizes were awarded to schools for the largest turn out, best organized school, best banner, best placard, and best march past portrayal.
The event culminated with a grand cultural explosion where students from participating schools presented items relating to water, and a mega performance from the recently formed NAWASA Band.

Focus on Customer Efficiency The Authority made concerted efforts during 2011 at reinforcing positive practices amongst consumers with regard to water use and shifting perceptions regarding the value of water.
To this end, extensive use was made of print and electronic media to inform customers of the authority’s activities including service Students of SJC Grenville marching in observance of World Water Day 2011 March 22nd 2011.

The event was attended by more than two thousand two hundred (2,200) students, from thirty (30) schools on the island, who carried placards and chanted slogans and messages of water conservation to a wide cross section of the general public, led by the NAWASA mascot, “Dewdrop”.
interruption notices, disconnection notices, payment options, cheque box and timely bill payment campaigns, conservation and protection practices even via the Authority’s Christmas message.

A number of programmes were also screened on local TV stations regarding leak detection advancements and asset protection.
In addition, discussions on AnnuAl RepoRt 2011 | General ManaGer’s report 23 • Grenada Amateur Swimming Association • St. George’s University (SGU) Event Management Class fund raiser • The Grenada Red Cross • Roman Catholic Diocese of St. George’s-In-Grenada • Chantimelle Progressive Organization Acknowledgements I wish to place on record my appreciation for the continued support of the public and for their appreciation of the improvements that the Organisation continues to make.
I wish to thank the Board of Directors for their support during the year, and the Management and Staff for their continued support and dedication, and look forward to further improvements in the coming year, as we work together in furtherance of our Mission.

Christopher Husbands General Manager conservation and metering were facilitated both on TV and radio talk shows.
All of the above highlight the efforts made by NAWASA throughout 2011 in promoting the smart use of our water resources through water-saving technologies and the provision of simple steps for customers to follow with the aim of ensuring a reliable water supply today and for future generations.

This is one of the fundamentals of the Authority’s mission.
The Authority’s commitment to yet another pillar of our mission — development of our organisation, communities and nation — is visible in its active support in a number of areas, including sports, education and community initiatives, evidence of which is seen via the following activities: • Independence extravaganza 2011 • NAWASA common entrance awards • Free reconnection program Support was also given to a number of other initiatives such as: • Grenada Athletic Association (GAA) National Track and Field Championship • Mt.
Horne Progressive Organization’s Sporting Meet.
• Her Majesty Prison’s (HMP) 1st Annual Athletic Sporting Meet • The Young Generation Basketball and Sports Club AnnuAl RepoRt 2011 | General ManaGer’s report 24 AnnuAl RepoRt 2011 | Section Header 25 financial statements AnnuAl RepoRt 2011 | Section Header 26 INDEPENDENT AUDITORS’ REPORT TO THE MINISTER RESPONSIBLE FOR WORKS, PHYSICAL DEVELOPMENT AND PUBLIC UTILITIES ON NATIONAL WATER AND SEWERAGE AUTHORITY We have audited the accompanying financial statements of the Authority which comprise the statement of financial position at 31st December, 2011 and the related statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.
Responsibility for the Financial Statements Those charged with governance are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards.
This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing.

Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the accompanying financial statements present fairly in all material respects, the financial position of the Authority as of December 31st, 2011 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
GRENADA: March 30th, 2012 Accountants and business advisers: AnnuAl RepoRt 2011 | Financial reports 27 NATIONAL WATER AND SEWERAGE AUTHORITY STATEMENT OF FINANCIAL POSITION AT 31ST DECEMBER, 2011 ASSETS Non-current assets Property, plant and equipment Current Assets Inventories Trade and other receivables Loans and receivables financial assets Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Capital Retained earnings Notes 2011 2010 62,449,984 62,470,737 5,605,286 11,552,560 400,000 3,162,874 5,872,090 12,435,910 1,609,421 1,983,452 20,720,720 21,900,873 $83,170,704 $84,371,610 17,751,630 44,791,966 17,751,630 48,379,459 TOTAL EQUITY 62,543,596 66,131,089 Non-current liabilities Long term borrowings Deferred income Current Liabilities Trade and other payables Short term borrowings Retirement benefit obligation 10 11 12 10 13 3,768,330 2,222,488 5,106,628 2,186,799 5,990,818 7,293,427 2,699,100 1,016,320 10,920,870 1,769,254 621,900 8,555,940 14,636,290 10,947,094 TOTAL LIABILITIES 20,627,108 18,240,521 TOTAL EQUITY AND LIABILITIES $83,170,704 $84,371,610 The notes on pages 8 to 27 form an integral part of these financial statements Chairman: General Manager: AnnuAl RepoRt 2011 | Financial RepoRts 28 NATIONAL WATER AND SEWERAGE AUTHORITY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER, 2011 Revenue Direct costs Gross profit Other income TOTAL OPERATING INCOME Administrative and general expenses Operating (loss)/profit Impairment of financial assets Finance cost Notes 2011 2010 14 15 16 21 17 18 29,166,819 (16,444,800) 26,560,000 (15,290,690) 12,722,019 11,269,310 604,223 514,635 13,326,242 11,783,945 (14,908,029) (1,581,787) (1,609,421) (396,285) (9,759,939) 2,024,006 (1,126,595) (427,518) (LOSS)/PROFIT FOR THE YEAR $(3,587,493) $469,893 The notes on pages 31 to 50 form an integral part of these financial statements AnnuAl RepoRt 2011 | Financial reports 29 NATIONAL WATER AND SEWERAGE AUTHORITY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST DECEMBER, 2011 Capital
 Retained Earnings Total Balance at 1st January, 2010 17,751,630 47,909,566 65,661,196 Profit for the year – 469,893 469,893 Balance at 31st December, 2010 17,751,630 48,379,459 66,131,089 Loss for the year – Balance at 31st December, 2011 $17,751,630 (3,587,493) $44,791,966 (3,587,493) $62,543,596 The notes on pages 31 to 50 form an integral part of these financial statements AnnuAl RepoRt 2011 | Financial RepoRts 30 NATIONAL WATER AND SEWERAGE AUTHORITY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER, 2011 OPERATING ACTIVITIES (Loss)/profit for the year Adjustments for: Depreciation (Gain)/loss on disposal of property, plant and equipment Amortization of deferred income Cash flow before working capital changes Decrease/(increase) in inventories Decrease/(increase) in trade and other receivables Increase in trade and other payables Increase in retirement benefit obligations Notes 2011 2010 (3,587,493) 469,893 3,648,290 (75,934) 3,316,326 37,813 (100,728) (83,614) (115,865) 3,740,418 (559,021) 266,804 883,350 (1,219,845) 651,934 929,846 2,364,930 378,498 Cash provided by operating activities 4,329,065 2,991,984 INVESTING ACTIVITIES Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment (3,627,543) 75,940 (2,992,285) 9,565 Decrease in loans and receivables financial assets 1,209,421 1,126,595 Cash used in investing activities (2,342,182) (1,856,125) FINANCING ACTIVITIES Net (decrease)/increase in borrowings Increase in deferred income Cash (used in)/provided by financing activities (943,878) 136,417 1,156,203 313,085 (807,461) 1,479,288 Net increase in cash and cash equivalents Cash and cash equivalents – at beginning of the year – at end of the year 8 The notes on pages 31 to 50 form an integral part of these financial statements 1,179,422 2,605,147 (621,695) $3,162,874 $1,983,452 1,983,452 AnnuAl RepoRt 2011 | Financial reports 31 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST
 DECEMBER, 2011 1.
CORPORATE INFORMATION The Authority was created by Act of Parliament No.

25 of 1990 to take over the operations of the former Central Water Commission and with sole jurisdiction in all matters pertaining to the supplying of all potable water and sewerage facilities throughout Grenada.

At the statement of financial position date the Authority employed one hundred and seventy-five (175) permanent workers, sixty-four (64) contracted workers and thirty-nine (29) temporary workers.
(2010: 175, 50 and 26 respectively).

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The financial statements have been prepared under the historical cost convention.

The financial statements are expressed in Eastern Caribbean Dollars.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Authority’s accounting policies.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
(b) New accounting standards, amendments and interpretations (i) There are no new standards, amendments or interpretations that are effective for the first time for the financial year beginning on or after 1 January 2011 that would be expected to have a material impact on the Company.

(ii) New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2011 and not early adopted.
These either do not apply to the activities of the Company or have no material impact on its financial statements.

IAS 1 Presentation of items of other comprehensive income – Effective for annual periods beginning on or after 1st July, 2012 IAS 12 Income taxes on deferred tax – Effective for annual periods beginning on or after 1st January, 2012.
IAS 19 Employee benefits – Effective for annual periods beginning on or after 1st January, 2013 IAS 27 Separate financial statements – Effective for annual periods beginning on or after 1st January, 2013.

IAS 28 Investments in associates and joint ventures – Effective for annual periods beginning on or after 1st January, 2013 AnnuAl RepoRt 2011 | Financial RepoRts 32 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (b) New accounting standards, amendments and interpretations IFRS 1 First-time adoption for International Financial Reporting Standards – Severe hyperinflation and removal of fixed dates for first-time adopters – Effective for annual periods beginning on or after 1st July, 2011.

IFRS 7 Financial instruments: Disclosures – Effective for annual periods beginning on or after 1st July, 2011.
IFRS 9 Financial instruments – Classification and measurement – Effective for annual periods beginning on or after 1st January, 2013.

IFRS 10 Consolidated financial statements- Effective for annual periods beginning on or after 1st January, 2013.

IFRS 11 Joint arrangements- Effective for annual periods beginning on or after 1st January, 2013.

IFRS 12 Disclosure of interest in other entities- Effective for annual periods beginning on or after 1st January, 2013.
IFRS 13 Fair value measurement - Effective for annual periods beginning on or after 1st January, 2013.

(c) Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation.

Subsequent costs are included in the assets carrying amounts or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Authority and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Land is not depreciated.

Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives.
The rates used are as follows: Building and Equipment Office furniture and Equipment Per Annum % 2.5 10 – 15 Miscellaneous tools and Equipment 10 Motor vehicle and Heavy Equipment 10 – 33.33 Production Equipment 2.5 AnnuAl RepoRt 2011 | Financial reports 33 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (c) Property, Plant and Equipment The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the statement of financial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gain and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in the statement of comprehensive income.

(d) Financial instruments Financial instruments are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are recognised on the Authority’s statement of financial position when the Authority becomes a party to the contractual provisions of the instrument.
Financial liabilities are derecognised when they are extinguished that is when the obligation specified in the contract is discharged, cancelled or expired.

The difference between the carrying amount of a financial liability extinguished and the consideration paid is recognised in the statement of comprehensive income.
Recognition and Measurement All regular way purchases and sales of financial assets are recognised or derecognised on the trade date that is the date on which the Authority commits itself to purchase or sell an asset.

A regular way purchase and sale of a financial asset is a purchase or sale of an asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market place concerned.
When financial assets are recognised initially, they are measured at fair value of the consideration given plus transaction costs directly attributable to the acquisition of the asset.

Financial assets are derecognised when the contractual rights to receive the cash flows expire or where the risks and rewards of ownership of the assets have been transferred.

Financial Assets The Authority classifies its financial assets as loans and receivables.
Management determines the appropriate classification of its financial assets at the time of purchase and re-evaluates this designation at every reporting date.

AnnuAl RepoRt 2011 | Financial RepoRts 34 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Financial instruments (continued) Impairment of financial assets The Authority assesses at each date of the statement of financial position whether there is objective evidence that a financial asset or group of financial assets is impaired.
A financial asset or group of financial assets is impaired and impairment losses are incurred if and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
Objective evidence that a financial assets or group of financial assets is impaired includes observable data that comes to the attention of the Authority about the following loss events: (i) Significant financial difficulty of the issuer or obligor.

(ii) A breach of contract, such as default or delinquency in interest or principal payments.

(iii) It is becoming probable that the borrower will enter in bankruptcy or other financial re-organization.
(iv) The disappearance of an active market for that financial asset because of financial difficulties.
(v) Observable data indicating that there is a measurable decrease in the estimated cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with individual financial assets in the group, including adverse changes in the payment status of borrowers in the Authority or national or economic conditions that correlate with defaults on assets in the Authority.
The Authority first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant.

If the Authority determines that no objective evidence of impairment exists for an individually assessed financial asset, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

AnnuAl RepoRt 2011 | Financial reports 35 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Financial instruments (continued) Impairment losses are recorded in an allowance account and are measured and recognised as follows: (i) Financial assets measured at amortized cost The difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial asset’s original effective interest rate is recognised in the statement of comprehensive income.
If, in subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as improvement in the debtor’s credit rating), the previously recognised loss is reversed to the extent that the carrying amount of the financial asset does not exceed what the amortised cost would have been, had the impairment not been recognised at the date that the impairment reversed.
The amount of the reversal is recognised in the statement of comprehensive income.

(ii) Financial assets measured at cost The difference between the asset’s carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the current market’s rate of return for similar financial assets is recognised in the statement of comprehensive income.

These losses are not reversed.


Financial Liabilities When financial liabilities are recognised initially, they are measured at fair value of the consideration given plus transaction costs directly attributable to the acquisition of the liability.

Financial liabilities are re- measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when they are extinguished that is when the obligation specified in the contract is discharged, cancelled or expired.
The difference between the carrying amount of a financial liability extinguished and the consideration paid is recognised in the statement of comprehensive income.

(e) Inventories Inventories are valued at the lower of cost and net realizable value.

Cost is determined on an average cost basis, net realizable value is the price at which stock can be realized in the normal course of business.
AnnuAl RepoRt 2011 | Financial RepoRts 36 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Foreign Currencies Foreign currency transactions during the year were converted into Eastern Caribbean Currency Dollars at the exchange rates prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at the statement of financial position date.

Profits or losses on translation are reflected in the statement of comprehensive income.

There are no foreign currency borrowings.

(g) Pension and Gratuity The Authority’s pension and gratuity plan is a non-contributory plan, for all permanent employees with twenty (20) years of continuous service.
Contributions are charged to the statement of comprehensive income.

(h) Cash and Cash Equivalents Cash and cash equivalents comprise of cash on hand and at bank.

Bank overdraft is included as a component of cash and cash equivalents for the purpose of the cash flow statement.

Bank overdraft is shown within borrowings in current liabilities on the statement of financial position.
(i) Revenue Recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Authority’s activities.

Revenue is recognized as follows: (i) Sales of goods Sales of goods are recognised when the Authority has delivered products to the customer, the customer has accepted the products and collectibility of the related receivables is reasonably assured.
(ii) Sales of services Sales of services are recognised in the accounting period in which the services are rendered.

(iii) Interest income Interest income is recognised on an accrual basis.

(iv) Miscellaneous income All other income is recognised on an accrual basis.

AnnuAl RepoRt 2011 | Financial reports 37 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Trade Receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

If collection is expected in one (1) year or less, they are classified as current assets.

If not, they are presented as non-current assets.


Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the Authority will not be able to collect all amounts due according to the original terms of the receivable.
Significant financial difficulties of the debtor and default or delinquency in payment are considered indicators that the trade receivable is impaired.

(k) Trade Payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities if payment if due within one (1) year or less, if not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortized cost using the effective interest rate method.

(l) Borrowings Borrowings are recognised at fair value net of transaction cost incurred.

Borrowings are subsequently stated at amortized cost: any difference between the proceeds, net of transaction cost, and the redemption value is recognised in the statement of comprehensive income over the period of borrowings.
Borrowings are classified as current liabilities unless the Authority has an unconditional right to defer settlement of the liability for at least twelve (12) months after the statement of financial position date.

(m) Finance Cost Finance cost is recognised in the statement of comprehensive income as an expense in the period in which they are incurred.

(n) Capital Capital contributions by the Government of Grenada are classified as equity.
(o) Taxation The Authority is exempt from the payment of income tax.

AnnuAl RepoRt 2011 | Financial RepoRts 38 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 3.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING ACCOUNTING POLICIES The development of estimates and the exercise of judgment in applying accounting polices may have a material impact on the Authority’s reported assets, liabilities, revenues, benefits and expenses.
The items which may have the most effect on the Authority’s financial statements are set out below: Provision for Bad and Doubtful Debts A general provision for bad and doubtful debts is made based on 40% of water and sewer debtors over two (2) years old.

As debts become uncollectible they are written off against the provision.

Additions to the provision are charged to current operations.

Impairment of Inventory Provision is made for obsolete, slow moving and defective stocks.
Impairment of financial assets Management assesses at each statement of financial position date whether assets are impaired.

An asset is impaired when the carrying value is greater than its recoverable amount and there is objective evidence of impairment.

Recoverable amount is the present value of the future cash flows.

Provisions are made for the excess of the carrying value over its recoverable amount.
Property, plant and equipment Management exercises judgment in determining whether future economic benefits can be derived from expenditures to be capitalized and in estimating the useful lives and residual values of these assets.
AnnuAl RepoRt 2011 | Financial reports 39 , 7 3 7 0 7 4 2 6 $ , 9 9 5 5 3 , , 7 3 7 0 7 4 2 6 , , 7 5 3 1 3 8 2 0 1 , ) , 0 2 6 0 6 3 0 4 , ( , 7 5 1 2 4 8 2 6 $ , , 5 – 8 2 2 9 9 2 , , 7 5 1 2 4 8 2 6 , ) ) 8 7 9 2 8 , ( , 6 2 3 6 1 3 3 , ( , 5 1 5 3 2 1 $ , 0 4 8 0 9 7 $ , 2 2 0 3 3 2 $ , 8 1 7 2 6 6 $ , 5 5 5 0 9 4 5 5 $ , , 7 0 5 1 4 5 5 $ , 5 1 5 3 2 1 , 5 7 8 1 2 4 , ) 3 9 3 2 0 3 , ( ) – – 8 7 3 7 4 , ( 9 1 6 5 9 1 , 9 – 1 6 5 9 1 , , 9 1 6 5 9 1 $ 0 4 8 0 9 7 , 5 – – 8 9 8 8 3 , ) – 9 5 5 4 5 1 , ( , 6 6 2 5 2 0 1 , , 9 1 4 9 9 5 1 , 2 2 0 3 3 2 , 4 – 0 0 5 8 7 , 9 9 5 5 3 , ) ) 0 0 6 5 3 , ( 0 9 4 8 8 2 , ( 5 3 5 9 2 7 , , 2 3 0 4 4 7 3 , 8 1 7 2 6 6 , , 5 5 5 0 9 4 5 5 , , 7 – – 2 6 9 4 1 1 , ) – 1 9 4 8 2 3 , ( , 4 5 8 3 8 4 1 , , 0 2 0 4 8 3 4 , 4 9 7 6 4 2 , 3 – 9 3 2 0 3 , , ) – 6 8 7 4 4 5 2 , ( , 6 5 9 4 9 4 3 5 , , 0 6 7 6 6 3 7 8 , ) 3 5 1 4 7 5 , ( ) , 7 9 4 4 1 0 3 , ( ) , 6 5 1 0 0 9 2 , ( ) , 4 0 8 1 7 8 3 3 , , 7 – – – – – 0 5 1 4 5 5 , , 7 0 5 1 4 5 5 , ( , 7 – 0 5 1 4 5 5 , , 6 6 2 5 2 0 1 $ , , 5 3 5 9 2 7 $ , 4 5 8 3 8 4 1 $ , , 6 5 9 4 9 4 3 5 $ , , 7 0 5 1 4 5 5 $ , l a t o T l a t i p a C n i - ffi O d n a s g n i d l i u B d n a L , 0 5 0 2 2 9 9 9 , ) , 3 9 8 9 7 0 7 3 , ( 5 – 1 5 3 2 1 , , 4 3 4 0 1 2 1 , , 8 2 6 4 9 9 2 , , 3 9 3 4 3 2 3 , ) 4 9 5 9 1 4 , ( ) , 6 0 6 1 6 7 2 , ( ) , 5 7 6 1 7 5 2 , ( ) , 8 1 0 7 2 3 1 3 , , 3 7 5 7 1 8 6 8 , ( , 7 – 0 5 1 4 5 5 , I T N E M P U Q E D N A T N A L P , Y T R E P O R P .
4 0 1 0 2 , / t s o C 0 1 0 2 , / t s o C 0 1 0 2 , ) D E U N I T N O C ( 1 1 0 2 , AnnuAl RepoRt 2011 | Financial RepoRts 40 l a t o T , 7 3 7 0 7 4 2 6 , , 3 – 4 5 7 2 6 3 , ) 6 ( ) , 0 9 2 8 4 6 3 , ( ) – – 4 8 7 8 4 , ( l a t i p a C n i - k r o W s s e r g o r P 9 1 6 5 9 1 , , 5 3 0 0 8 5 1 , , 6 6 2 5 2 0 1 , 0 – – 3 1 2 4 6 , ) 2 7 7 8 1 2 , ( ) 6 ( 5 3 5 9 2 7 , 5 – 2 1 0 5 7 , ) 0 2 5 3 1 5 , ( ) 5 8 2 5 3 3 , ( ) , 3 1 7 0 8 5 2 , ( 5 – – 8 7 0 5 1 , 4 – 8 7 8 4 , 8 6 4 4 0 5 , , 4 5 8 3 8 4 1 , , 6 5 9 4 9 4 3 5 , , 7 – – – – 0 5 1 4 5 5 , , 4 8 9 9 4 4 2 6 , , 0 7 8 6 2 7 1 , , 4 2 6 8 4 4 1 , 4 3 1 6 6 9 , , 4 5 3 9 9 2 1 , , 5 9 4 7 6 4 1 5 , , 7 0 5 1 4 5 5 , , 4 8 0 5 0 9 5 0 1 , ) , 0 0 1 5 5 4 3 4 , ( , 4 8 9 9 4 4 2 6 $ , , 0 – 7 8 6 2 7 1 , , 9 4 5 1 4 2 2 , , 1 4 3 0 4 9 3 , , 5 0 8 4 3 5 4 , , 2 1 0 0 2 9 7 8 , ) 5 2 9 2 9 7 , ( ) , 7 0 2 4 7 9 2 , ( ) , 1 5 4 5 3 2 3 , ( ) , 7 1 5 2 5 4 6 3 , ( , 7 – 0 5 1 4 5 5 , , 0 7 8 6 2 7 1 $ , , 4 2 6 8 4 4 1 $ , , 4 3 1 6 6 9 $ , 4 5 3 9 9 2 1 $ , , 5 9 4 7 6 4 1 5 $ , , 7 0 5 1 4 5 5 $ , 1 1 0 2 , A
/ t s o C 1 1 0 2 , ) D E U N I T N O C ( 1 1 0 2 , ffi ) d e u n i t n o c ( T N E M P U Q E D N A T N A L P I , Y T R E P O R P .
4 .

 .

 fi e n e b s a h y t i r o h t u A e h T AnnuAl RepoRt 2011 | Financial reports 41 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 5.
INVENTORIES Balance as at 31st December, 2011 Goods in transit Less: Provision for obsolescence 2011 6,150,946 – (545,660) 2010 6,396,819 27,455 (552,184) $5,605,286 $5,872,090 6.
TRADE AND OTHER RECEIVABLES Water and Sewer debtors Ship debtors 12,159,778 69,732 14,263,322 61,684 Total trade receivables 12,229,510 14,325,006 Less: Provision for doubtful debts (1,576,805) (2,437,595) Net trade receivables Sundry debtors – net Prepayments Staff loans Security deposits Other receivables 10,652,705 11,887,411 4,983 830,538 45,376 16,250 2,708 147,420 330,755 52,902 16,250 1,172 $11,552,560 $12,435,910 Movement in provision for impairment of trade receivables were the following: Balance at 1st January, 2011 Charge for the period Amounts written off 2,437,595 2,607,945 (3,468,735) 2,438,444 – 849) ( Balance at 31st December, 2011 $1,576,805 $2,437,595 AnnuAl RepoRt 2011 | Financial RepoRts 42 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 7.
LOANS AND RECEIVABLES FINANCIAL ASSETS British American Insurance Company Limited – Policy #BGG002711 – Policy #BGG003143 – Policy #BGG003708 Less: Provision for impairment 2011 2010 1,250,964 1,250,964 766,373 766,373 1,201,505 1,201,505 3,218,842 3,218,842 (3,218,842) (1,609,421) Grenada Co–operative Bank Limited – Certificate of deposit 400,000 – 8.
CASH AND CASH EQUIVALENTS RBTT Bank Grenada Limited – Current Account (i) – Current Account (ii) Republic Bank (Grenada) Limited – Current Account Grenada Co–operative Bank Limited – Current Account Bank of Nova Scotia – Current Account First Caribbean International Bank Limited – Current Account Cash in transit Cash floats Petty cash $400,000 $1,609,421 1,199 1,199 1,557,208 202,660 900,035 1,621,653 423,977 22,089 239,864 16,924 1,400 178 56,292 21,780 78,178 – 1,300 390 Cash on hand and at bank $3,162,874 $1,983,452 9.
CAPITAL CONTRIBUTION – GOVERNMENT OF GRENADA Balance at 31st December, 2011 $17,751,630 $17,751,630 AnnuAl RepoRt 2011 | Financial reports 43 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 10.
BORROWINGS Long–term National Insurance Board Less: Current portion Short–term Borrowings: National Insurance Board– Current portion Total borrowings 2011 2010 4,784,650 (1016,320) 5,728,528 (621,900) 3,768,330 5,106,628 1,016,320 621,900 $4,784,650 $5,728,528 National Insurance Scheme: The loan bears interest at the rate of 7.5% per annum and is repayable over a period of eight (8) years by monthly instalments of $111,727.67.

The loan in secured by the guarantee of the Government of Grenada.

11.
11.

DEFERRED INCOME Balance at 1st January, 2011 Grant received during the year Amount transferred to income 2,186,799 136,417 1,957,328 313,085 2,323,216 2,270,413 100,728 83,614 Balance at 31st December, 2011 $2,222,488 $2,186,799 AnnuAl RepoRt 2011 | Financial RepoRts 44 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 11.
DEFERRED INCOME (continued) This relates to grants received as follows: • Government of Grenada • Basic Needs Trust Fund • CARICOM/Spain Technical Co–operation Program These grants were used to develop water distribution and storage facilities and are being credited to income at the rate of 2.5% to 20% per annum, consistent with the rate charged for depreciation on related assets.

12.
12.

TRADE AND OTHER PAYABLES Trade payables Accrued expenses Accrued loan interest 2011 48,545 2,641,707 8,848 2010 72,674 1,687,163 9,417 $2,699,100 $1,769,254 13.

RETIREMENT BENEFIT OBLIGATION This represents provisions in the amount of $2,113,717 and $8,807,154 made for Pension and Gratuity respectively, for all permanent employees and management personnel with over twenty (20) years of continuous service.

This provision was not subject to actuarial valuation.

14.
14.

REVENUE Water rates Sewer rates Service connection Sales to ships Sales from hydrant 25,767,729 2,286,432 859,458 249,808 3,392 23,529,211 2,062,667 683,557 262,563 22,002 $29,166,819 $26,560,000 AnnuAl RepoRt 2011 | Financial reports 45 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 15.

DIRECT COST Planning, design and construction Production and quality Sewerage Transmission and distribution 16.
OTHER INCOME Deferred income recognized Gain on sale of property, plant and equipment Miscellaneous income 17.

IMPAIRMENT OF FINANCIAL ASSETS Impairment of British American Company Limited investments 18.
FINANCE COST 2011 1,491,818 6,571,278 688,468 7,693,236 2010 1,379,562 6,124,122 457,309 7,329,697 $16,444,800 $15,290,690 100,709 75,934 427,580 83,614 9,564 421,457 $604,223 $514,635 $1,609,421 $1,126,595 Interest on borrowings $396,285 $427,518 AnnuAl RepoRt 2011 | Financial RepoRts 46 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 19.
FINANCIAL RISK MANAGEMENT The Authority’s activities expose it to the following risk from the use of financial instruments: • Credit risk • Liquidity risk • Currency risk • Interest rate risk • Operational risk Risk management structure The Board of Directors is responsible for the overall risk management approach and for approving the risk strategies, principles, policies and procedures.
Day to day adherence to riskto risk principles is carried out by the management of the Authority in compliance with the policies approved by the Board of Directors.

The Authority’s risk management policies are established to identify and analyse the risk faced by the Authority, to set appropriate risks limits and controls and to monitor risk and adherence to limits.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Authority’s activities.
The Authority through its training and management standards and procedures aims to develop a disciplined and constructive control environment, in which all employees understand their roles and obligations.

Credit risk Credit risk is the risk of financial loss to the Authority if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Authority’s receivables from customers and its loans and receivable financial assets.
Management of credit risk (i) Trade receivables Concentration of credit risk with respect to trade receivables is small as the Authority’s customer base is large and unrelated, with no significant balances arising from a single economic or business sector or single entity or group of entities.

The Authority manages credit risk through the daily monitoring of trade receivables on an individual basis.

Where necessary, customers’ accounts are disconnected in order to reduce credit risk exposure.
AnnuAl RepoRt 2011 | Financial reports 47 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 19.

FINANCIAL RISK MANAGEMENT (continued) Credit risk (continued) (ii) Other financial assets With respect to credit risk arising from the other financial assets of the Authority, which comprise cash and cash equivalents and loans and receivables financial assets, the Authority’s exposure to credit risk arises from default of the counter–party.
The Authority seeks to hold its funds with financial institutions which management regards as sound and the market for investments are monitored regularly to ensure that returns are guaranteed.

Exposure to credit risk The following table shows the maximum exposure to credit risk for the components of the statement of financial position.
Trade and other receivables Loans and receivables financial assets Cash and cash equivalents Maximum Exposure 2011 11,552,560 400,000 3,162,874 2010 12,435,910 1,609,421 1,983,452 $15,115,434 $16,028,783 Analysis of individually impaired financial assets: Carrying Value Provision for Impairment Net Book Value Trade receivables $3,942,011 $1,576,805 2011 $2,365,206 2010 $3,706,016 Sundry debtors and prepayments Loans and receivables financial assets $697,488 $697,488 $ $3,218,842 $3,218,842 $ – – $ – $1,609,421 AnnuAl RepoRt 2011 | Financial RepoRts 48 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 19.
FINANCIAL RISK MANAGEMENT (continued) Liquidity risk Liquidity risk is the risk that the Authority will have difficulty in meeting its obligations from its financial liabilities.

Management of liquidity risk The Authority’s approach to managing liquidity is to ensure, as far as is possible, that it will always have sufficient liquidity to meet is liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.
The Authority monitors its cash flow position on a daily basis and generally monitors its risk to a shortage of funds by considering planned and probable expenditures against projected cash inflows from operations.

Where possible the Authority utilizes surplus internal funds to finance its operations and ongoing projects.

The Authority also utilizes available credit facilities such as loans and overdraft facilities.
Exposure to liquidity risk The table below analyses the Authority’s financial liabilities into relevant groupings based on the remaining period at the statement of financial position date to the contractual maturity date.
Balance at 31st December, 2011 Long-term borrowings Trade and other payables Short-term borrowings Balance at 31st December, 2010 Long-term borrowings Trade and other payables Short-term borrowings < 1 year 1 to 5 years > 5 years Total – 2,699,100 1,016,320 3,768,330 – – – – – 3,768,330 2,699,100 1,016,320 $3,715,420 $3,768,330 $ – $7,483,750 – 1,769,254 621,000 4,234,885 – – 871,443 – – 5,106,328 1,769,254 621,000 $2,390,254 $4,234,885 $871,443 $7,496,582 AnnuAl RepoRt 2011 | Financial reports 49 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 20.
FINANCIAL RISK MANAGEMENT (continued) Interest rate Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Exposure to interest rate risk The Authority is exposed to interest rate risk through the effect of fluctuations in the prevailing levels of interest rates on interest bearing financial assets and liabilities, including loans.
Management of interest rate risk The Authority manages its interest rate exposure by borrowing funds at fixed rates.

Operational risk Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Authority’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements including periodic adjustments of tariffs.
Operational risks arise from all of the Authority’s operations.

The Authority’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Authority’s reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit.
This responsibility is supported by the development of overall standards for the management of operational risk in the following areas: • • Requirements for appropriate segregation of duties, including the independent authorization of transactions Requirements for the reconciliation and monitoring of transactions • Compliance with regulatory and other legal requirements • Documentation of controls and procedures • • Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified Requirements for the reporting of operational losses and proposed remedial action • Development of contingency plans • • • • Training and professional development Ethical and business standards Risk mitigation, including insurance where this is effective Periodic review of the tariff structure AnnuAl RepoRt 2011 | Financial RepoRts 50 NATIONAL WATER AND SEWERAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2011 (CONTINUED) 21.
ADMINISTRATIVE AND OVERHEAD EXPENSES Wages, salaries and allowances National insurance contributions Pensions Staff uniform Staff benefits CWWA conference Entertainment Training Electricity Telephone Advertising and public relation Stationery and postages Subscription Insurance Repairs and maintenance Motor vehicle expenses Professional fees Security Directors’ fees and expenses Office rent Depreciation Miscellaneous Bad debts Audit fees Inte rest and bank charges Commission 2011 2010 4,419,872 410,870 1,489,436 24,438 2,565,854 – $14,908,029 $9,759,939 AnnuAl RepoRt 2011 | Financial reports 51 2011 highlights AnnuAl RepoRt 2011 | Section Header 52 New chemical dosing plant, Mardigras Water Treatment Plant Laying of Pipes at Mon Plaisir, St. John General Manager Christopher Husbands speaks at the Commissioning Ceremony of the Southern Grenada Water Supply Project NAWASA Participants of the Outfit Competition for Independence Extravaganza 2011 AnnuAl RepoRt 2011 | 2011 HigHligHts 53 Employee Junior Morain receives his Customer Advocacy Badge from Chairman of the Board of Directors, Mr. Terrence P. Smith General Manager Christopher Husbands makes medal presentation at Mt.
Horne Progressive Organization Sports Recipients of NAWASA’s Common Entrance Award AnnuAl RepoRt 2011 | 2011 HigHligHts NAWASA .

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