World Waternet Annual report 2020 def.pdf

Annual Report 2020 Making sustainable impact through Water Operator’s Partnerships in water cycle management

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Table of contents

Preface

5

Looking back to 2020

6

This is World Waternet

8

Risk Management

11

Finances 2020

13

Balance sheet as of 31 December 2020

14

Statement of income and costs 2020

15

Notes to the statement of income and costs

16

General information World Waternet

16

Accounting principles

17

Accounting principles balance sheet

19

Accounting principles of the statement of income and costs

20

Notes to the balance sheet

21

Notes to the statement of income and costs 2020

24

Risks in the balance sheet & statement of income and costs

27

Independent Auditor’s Report

29

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4

Preface 2020 was a special year for World Waternet and our partners. Because of the global Covid-19 crisis, our activities were geared towards the most effective interventions within our Water Operators’ Partnerships in Africa, Asia, the Middle East and Latin America. We were able to give people access to better water supplies, protective equipment and digital tools. The Dutch programmes WaterWorX and Blue Deal are an important basis for this. They enable us to support our partners in the long term, also in times of crisis. This is very valuable to us. We are also very proud to continue our cooperation with our local partners in Burkina Faso and Jordan, thanks to new funding from the Dutch government. We welcome SNV as a consortium partner and, as such, are broadening our expertise and support. These and other projects enabled us to expand our project portfolio compared to 2019. As our portfolio has grown, we are pleased with the installation of our Audit and Risk Committee. Financially, the year ended positively and in 2020 we deployed more than 100 Dutch water experts, who shared their knowledge and provided support to fellow water managers across the border. It was very special that, despite the crisis, the employees of Waternet and our alliance partners were highly committed to partner up and work hard for sufficient, clean and safe water for everyone.

The future is dynamic and requires much of our adaptability. We would like to thank the Regional Public Water Authority Amstel, Gooi en Vecht, and the Municipality of Amsterdam for their continued support, and with a diverse team and strong cooperation with our partners, we face the future with confidence. Standing side by side with water operators to make a difference together. I feel proud to present our annual report and I hope you will enjoy reading it.

Frodo van Oostveen CEO World Waternet

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Looking back to 2020

S

ince the beginning of March 2020, our world has

In 2020, we focused entirely on those interventions that had the

changed completely. The global outbreak of Covid-19

most impact for each partnership. In, among others, our Blue

has significant implications for our partners, our work

Deal and WaterWorX programmes, we created room for investing

and the team. Due to the government measures and the risks of

in better local water supplies, purchased 4G networks and Wi-Fi

the new virus, we had to cancel our working visits and the World

hotspots to improve online collaboration, and donated protective

Waternet staff that works abroad had to temporarily return to

equipment to ensure that the work can continue in a safe manner.

the Netherlands. Between August and November, our colleagues

Interventions that were made possible partly thanks to our local

returned to Mali, Kenya and Burkina Faso.

(young) experts.

In 2020, World Waternet also welcomed its new CEO, Frodo

In 2020, we continued our partnership with the Young Expert

van Oostveen. With years of experience in the water sector

Programme. We are currently working with nine Young Experts in

and a strong ambition to connect ideas, people, initiatives and

our partnerships in Kenya, Ethiopia, Tanzania, Mali, Burkina Faso

companies to develop concrete solutions for sustainable water

and the Palestinian Territories. The Young Experts are given the

management, Frodo brings an innovative approach.

opportunity to gain experience in their field and develop their personal skills and knowledge through coaching, training and

2020 was a year of transformation for World Waternet. A year that

master classes. In addition, our partner organisation benefits from

took place almost entirely online. A year in which we learned to

the skills of the highly-educated young professionals. The future

deal with the consequences of the Corona virus, as a team and

generation of water experts!

with our partners. We share our knowledge mostly digitally and we want to make this part of our DNA. We are therefore in the process

Our work in ongoing projects and programmes aimed at peer-to-

of setting up an online academy; a platform for knowledge

peer knowledge exchange and capacity building has continued

exchange.

unabated despite the Covid-19 restrictions. Some nice examples are the joint incorporation of human rights into Burkina Faso’s

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water management, a ‘train-the-trainer’ programme of several

authorities insight into the spread of the virus. The end of 2020

days for LebRelief employees in Lebanon, and the completion

also marks the start of three training programmes funded by

of the project with the municipality of Zhuhai (China), aimed at

Nuffic’s Orange Knowledge Programme. In Kenya, South Africa

making the city climate proof.

and the Palestinian Territories, we are providing support to water companies in collaboration with Dutch and local educational

Simultaneously with the knowledge exchange in our Water

institutions.

Operators’ Partnerships, we mobilized several infrastructural investments for our partners. In Burkina Faso, with Develop2Build

To remain a leader in the field of water cycle management, we

funding from RVO, a feasibility study is being conducted for

actively work together with leading water companies around the

the repair and preservation of nine large water reservoirs that

world. Waternet is also preparing for the future with a powerful

are managed by our local partners. In Mali, we assisted our

research and innovation programme. In 2020, six new research

partner in obtaining funding from the Dutch Fund for Climate

themes were identified for this purpose: (1) Energy Transition,

and Development to conduct a feasibility study to support the

(2) Climate Adaptation, (3) Data and Sensoring, (4) Water Quality

development of a wastewater treatment plant in Bamako. In

and Technology, (5) Soil Subsidence and (6) Circular Economy.

Laos, we are helping our partner to obtain funding for the eight

This programme offers great opportunities for cooperation and

provincial water organisations. And in Ghana, through one of our

knowledge exchange with foreign partners and will enable us

local partners, we are for the first time helping with a large-scale

to tackle the same challenges together. In 2020, our experts

reforestation project through Trees4All.

exchanged knowledge through webinars on recovering raw materials from wastewater, thermal energy and climate adaptation.

Another important milestone is the start of two new long-term partnerships with water companies in Burkina Faso and Jordan,

We are starting 2021 with new insights, a lot of energy and a

funded by the Dutch government. We have been active in both

solid ambition. We will present and implement our Business

countries for several years. We are therefore very pleased that

Plan 2021-2024 with a clear focus on concrete SDG impact, our

we can intensify – with new resources – our activities in both

Water Operator’s Partnerships and cooperation partners, online

countries. In Burkina Faso, we are working with several local water

knowledge platform, our team of water (cycle) experts and further

boards to protect their scarce water resources. In Jordan, we are

professionalization of our services. Access to sufficient and clean

working to improve the performance of Yarmouk Water Company,

(drinking) water is crucial. Therefore, we will continue to work

one of the three public water companies in the country.

hard to assist and support our international partners, also and especially in times of crisis.

We have also expanded our portfolio with a pilot project in Nairobi to monitor Covid-19 in sewage water. This will give the Kenyan

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This is World Waternet Project Portfolio 2021

HOFOR Kopenhagen

SIAAP Paris

Berliner Wasserbetriebe

New York DEP

Water Operators’ Partnerships Knowledge Partners

Employees WWn/Wn’s FTE in projects

13,2 8

15,9 (Plan)

Alliance partner’s FTE in projects

2,5

5,5 (Plan)

Asia WaterWorX (Laos)* Partners for Water Yangon (Myanmar) Waste and Waste Water Maharashtra (India) Sanitation Bekasi (Indonesia) Middle East WOP Yarmouk Water (Jordan)* Blue Deal (Palestinian Territories)* WaterWorX (Palestinian Territories)* Nuffic (Palestinian Territories) LebRelief (Lebanon) Western Africa WaterWorX SOMAGEP (Mali)* Blue Deal ANSAGEM (Mali)* Nakanbe (Burkina Faso) Blue Deal (Burkina Faso)* East and Southern Africa Blue Deal Abbay (Ethiopia)* FDW Ziway Shalla (Ethiopia) Blue Deal Tana (Kenya)* WaterWorX Nairobi (Kenya)* E-Pivot Nuffic (Kenya)

PUB Singapore

COVID-19 surveillance Nairobi (Kenya) WaterWorX (Tanzania)* Nuffic Cape Town (South-Africa) Latin America Platform AMS-BUE (Argentina) SWM (Suriname) Knowledge partnerships NYC Department (USA) PUB (Singapore) Berlin Wasserbetriebe (Germany) HOFOR Copenhagen (Denmark) SIAAP Paris (France) *Long-term WOPs

Finances Income (in millions)

Overhead

1,61 (1,61 budgeted)

1,83 (4,75 budget)

Municipality of Amsterdam & Regional Public Water Authority AGV

Co-financiers

14% 10% (budgeted) 9

Contribution to the Sustainable Development Goals Number of water authorities supported on:

10

7

24

5

7

2

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Risk Management

R

isks are inherent in the activities of World Waternet. They may hold back achievements and damage the reputation. It is therefore important to identify and manage risks at

an early stage. In the year under review it was therefore decided to intensify the risk management process. So, in 2020, World Waternet established an Audit & Risk Committee. It consists of two board members, the managing director, the financial controller and the legal controller. This committee prepares the risk management and financial policy and initiates audits on behalf of the board. In 2020, a risk register was developed to lay down risks in a structured and uniform way. World Waternet applies ISO 31000, the international risk management standard, and follows Waternet to the extent possible. The principles used for risk management are established by the Board. Risks are

regarding contract types are therefore important elements in managing the risk profile of the commitments we make. In order to minimize financial risks, World Waternet only enters into contracts with a strict obligation of result, if the risks are easily manageable. World Waternet uses the banking services of the Nederlandse Waterschapsbank, which has a Triple A rating. Currently, World Waternet does not use derivatives to hedge exchange rate, interest rate, or other financial risks. There is always a careful separation of functions in the financial work processes, as well as in the assessment of financial reports of projects. Each year, an external auditor issues an audit opinion on the annual accounts and on various individual projects.

Services

managed at the organisational level and at the project level. The

World Waternet is engaged in projects in cooperation with local

main risk categories are: risks in the areas of security, services,

partners and with funding from third parties. With the receiving

legal, financial, and integrity and reputation.

parties, foreign public water companies, World Waternet makes agreements that are carefully tested against reality. If the

Financial World Waternet can only take financial risks to a limited extent. Due to the project-oriented nature of World Waternet, financial

agreements prove to be infeasible, measures are taken in time. The effectiveness and efficiency of WaterWorX and Blue Deal projects, which make up a large part of the project portfolio, are also tested by external experts.

risks are usually connected to individual projects. Choices

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Legal World Waternet complies with the regulations as they apply to

Organisation) and on information from our local partners and the Dutch embassies.

public organisations. Due to the international character of the activities, foreign legislation may also apply. In order to guarantee that all regulations are observed, World Waternet makes use of the specialist expertise of Waternet and, where necessary, of other organisations. World Waternet strives to limit the risk of legal proceedings and therefore, where possible, uses standard contracts that have been tested in practice. As an organisation

Integrity and reputation As a public organisation, World Waternet is bound by government regulations on sound human resource management, wellorganised privacy and security, and an integrity and corruption policy. Appropriate attention is paid to this by means of, among other things, an external employee satisfaction survey.

governed by public law, World Waternet ensures that the general principles of good governance, the Wet Markt en Overheid (Dutch Act on Government and Free Markets), and regulations and case law regarding prohibited state aid are complied with at all times.

In our cooperation with local partners, we also pay attention to issues such as integrity, the way employees are treated and corruption. Expectations regarding this are laid down in contracts. In case any undesirable situations occur in the field, we will

Security

address these in order to correct the situation. In extreme cases,

The security of the employees of World Waternet is our highest

this may mean that World Waternet has to end the cooperation

priority. Given that the activities of World Waternet mainly take

with the partner in question. In 2020, the subject of integrity was

place internationally, World Waternet has laid down aspects

placed on the agenda. No incidents were reported within World

of security in a ‘Travel Policy’ that is available to all employees

Waternet or its projects.

concerned. In addition, we follow the travel advice of the Dutch Ministry of Foreign Affairs; World Waternet does not work in ‘red areas’; for ‘orange areas’ we require a security training of several days. World Waternet also relies on the international emergency services (International SOS and the International NGO Security

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Finances 2020 13

Balance sheet as of 31 December 2020

Assets in € ‘000

No.

31-DEC-20

31-DEC-19

Fixed Assets Tangible Fixed Assets

0

0

Financial Fixed Assets

0

0

Current Assets Accounts Receivable

1.

82

243

Income to be Received

2.

440

439

Prepaid Expenses

3.

25

25

Other Receivables

4.

131

60

Liquid Assets

5.

3,511

2,320

Total Assets

Liabilities in € ‘000

No.

4,189

3,087

4,189

3,087

31-DEC-20

31-DEC-19

Reserves (equity) General Reserve

6.

Income and costs balance fiscal year

754

786

171

(-32) 925

754

0

0

Provisions Provisions Current Liabilities Prepaid income

7.

1,976

358

Accrued Liabilities

8.

1,276

1,908

Accounts Payable

9.

12

67

Total Liabilities

14

3,264

2,333

4,189

3,087

Statement of income and costs 2020

Amounts in euros (x1,000)

No.

Budget 2020

Realisation 2020

Realisation 2019

Dutch government (WaterWorX, Blue Deal, D2B, FDW, etc.)

3,980

1,610

2,201

International Finance Institutions

500

0

0

Other (EU, etc.)

271

140

140

1,054

1,057

1,033

Regional Public Water Authority AGV

448

447

440

Knowledge Management

104

105

102

6,357

3,359

3,916

1,300

385

916

927

932

683

0

0

123

Travel and accommodation costs

900

173

668

Hiring third parties (yep, project staff)

300

165

79

2,549

1,167

1,115

Office expenses (laptops, medical kits)

100

98

99

Training and representation

53

33

32

Internal supplies Waternet

228

235

233

6,357

3,188

3,948

0

171

(-32)

Income Projects and programmes, financed by:

Founders: Municipality of Amsterdam

Total Income

10.

Costs Deployment of Waternet staff in projects Delegated World Waternet staff Hiring of staff not related to projects Other project costs (excl. FTE deployment):

Other project costs Organisation costs World Waternet:

Total Costs Income and Costs balance

11.

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Notes to the statement of income and costs

W

orld Waternet is a non-profit organisation, dedicated

Supervisory Board

to improving sustainable access to clean, sufficient

World Waternet has an independent Supervisory Board, with

and safe water for all. World Waternet supports public

the majority of the board members and their control being

water organisations through peer-to-peer knowledge exchange

independent of Waternet or its founders the municipality of

in water cycle management. The foundation has long-term Water

Amsterdam and Regional Public Water Authority Amstel, Gooi and

Operators’ Partnerships with water organisations in more than 15

Vecht. The Board, consisting of five members, met four times in

countries to strengthen the capacity, improve the performance

2020:

and enable them to provide a better service to more people. World Waternet was founded by Waternet, the water cycle company of Amsterdam and surroundings. Waternet provides water services to 1.3 million people and is the only water company in the Netherlands that covers the entire water cycle.

• Ms A. P. (Lidi) Remmelzwaal (Chairperson); • Mr R.R. (Roelof) Kruize (Secretary, CEO of Waternet); • Ms C.G. (Carolien) Gehrels (Board member, Director of European Cities at Arcadis);

• Mr M. (Menno) Holterman (Board member, CEO of Nijhuis World Waternet is a public benefit organisation (Algemeen Nut Beogende Instelling, ANBI) according to section 6.33, part b of the

Saur Industries).

• Mr J.A.M (Arnold) Kuijpers (Board member)

Dutch Income Tax Act 2001(Wet inkomstenbelasting 2001). World Waternet will never distribute any operating surplus in any form

The Board determines the policy, sets the financial guidelines,

whatsoever. In the event of liquidation, the liquidation balance

and has the final responsibility for the daily management and

must be spent on the objectives of the organisation in accordance

implementation of the programmes and activities of World

with the articles of association or it must be transferred to another

Waternet. On an annual basis, the Board determines the budget,

ANBI. A certain (limited) reserve amount to compensate for

annual plan and annual accounts and delegates the execution to

setbacks is deemed desirable.

the director, who is an employee of Waternet. Each board member

World Waternet is located in Waternet’s head office, address:

has one vote and decisions are made by majority vote.

World Waternet, Korte Ouderkerkerdijk 7, 1096 AC, Amsterdam, Netherlands. The Chamber of Commerce number is 4271281.

A Management Services Agreement has been drawn up with the board of Waternet. The annual plan and the annual statement of

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accounts are submitted to the board of Waternet for advice. The

or affiliated entities such as foundation Waterproef and Het

board of Waternet can advise on the appointment of the director

Waterlaboratorium.

of World Waternet. Available project positions are published internally at Waternet.

Other positions held by the board members Ms Lidi Remmelzwaal, Chairperson

• Trainer Centre for Political and Diplomatic Studies • Advisor FoodFirst Coalition Mr Roelof Kruize, Secretary

• CEO of Waternet • Chairman Board of Supervisory Directors Aquaminerals • Chairman Aquatech Advisory Committee • Board member International Water Association • Member of the Supervisory Board of De Balie

It is encouraged that a sufficient and diverse team of Waternet employees are assigned to projects.

Standards for Remuneration Act and remuneration policy (Wet Normering Topinkomens) World Waternet does not employ any permanent staff and does not pay its board members any remuneration or allowances for expenses. The top officials are listed below in accordance with ‘Article 5, paragraph 3. Disclosure of information on senior executives’. The

Ms Carolien Gehrels, Board Member

• Director of European Cities at Arcadis • Member of the Supervisory Board of Delft University of Technology

• Member of the Advisory Council of ASN Bank • Member of the Dutch Creative Council, Ministry of Economic

director of World Waternet is employed by Waternet.

Name of Senior Executive

Function

Ms. ir. A. P. (Lidi) Remmelzwaal

Chairperson

Mr. ir. R.R. (Roelof) Kruize

Secretary

Ms. drs. C.G. (Carolien) Gehrels

Member of the Executive Board

Mr. ir. M. (Menno) Holterman

Member of the Executive Board

Mr. drs. A.J.A.M. (Arnold) Kuijpers

Member of the Executive Board

Affairs

• Member of the Board of Platform Urban Renewal Mr Menno Holterman, Board Member

• CEO Nijhuis Industries Holding BV. • CEO and Founder of Naesta Holding BV. • Member of the Board of Netherlands Water Partnership • Member of the Managing Board Amsterdam International Water Week

• Member of the Advisory Board Aquatech Amsterdam Mr Arnold Kuijpers, Board Member

• Member Board of Supervisory Directors Norinchukin Bank Europe

Staff

Accounting Principles

World Waternet does not employ staff. Staff is hired from Waternet and to a limited extent externally. In the spring of 2020, the former CEO of World Waternet, Mr Steven van Rossum, left Waternet. He was succeeded by Mr Frodo van Oostveen.

General The annual statement of accounts has been prepared in

In 2020, approximately ten employees were seconded from

accordance with the reporting requirements of Title 9 Book 2 of

Waternet on a permanent basis. These employees work 20% of

the Dutch Civil Code (BW2). The 2020 financial year runs from 1

their time for Waternet and 80% for World Waternet. Of these,

January 2020 to 31 December 2020 and corresponds to the 2020

one person is stationed in Mali. In 2020, World Waternet also

fiscal year.

worked with nine Young Experts from the Netherlands and our partner countries, as well as with three trainees. The trainees and Young Experts are employed by Waternet or a foreign partner.

Consolidation entity

Throughout 2020, approximately 100 Waternet experts were

World Waternet includes one legal entity and currently does not

assigned to projects and approximately 15 employees were hired

include any other entities that it controls. No consolidation of

from other regional water authorities, drinking water companies

entities takes place.

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Going concern World Waternet is co-financed by the municipality of Amsterdam and Regional Public Water Authority Amstel, Gooi and Vecht. In addition, project funding is obtained from various financiers, such as the Dutch Ministry of Foreign Affairs and the European Union. As yet, Covid-19 has had no impact on the contributions of the main donors. World Waternet has a current account credit from the Nederlandse Waterschapsbank of €750,000. Regional Public Water Authority Amstel, Gooi and Vecht acts as guarantor for the current account credit. There are no loans or debts at financial institutions. This means that World Waternet does not have to meet any bank covenants. As a result, there can be no negative impact on the continuity. As per the end of 2020, World Waternet has liquid assets of €3,510,753 at its disposal. In 2020, the Dutch tax agreement to share joint expenses (Kosten voor Gemene Rekening) was discontinued. The Dutch Tax and Customs Administration concluded that the conditions for the agreement were not met. The Dutch Tax and Customs Administration indicated that Waternet must charge VAT to World Waternet for the period (€0,7 million).

In close consultation with its external tax consultant, Waternet has since informed the Dutch Tax and Customs Administration that the conditions for the application of the Resolution on Development Aid were met during the same period, as well as future years. We expect that the VAT to be received will compensate for the VAT to be paid. The Dutch Tax and Customs Administration has not yet given any formal consent to Waternet’s request to apply the Resolution on Development Aid. Waternet has applied the Resolution on Development Aid for the 2020 financial year.

Affiliated parties All legal entities that can be controlled or that can be significantly influenced are considered affiliated parties. Entities that have control over World Waternet are also considered affiliated parties. In addition, directors under the articles of association, other key management of the foundation or parent companies and close family members are also considered affiliated parties. Waternet, the municipality of Amsterdam and Regional Public Water Authority Amstel, Gooi and Vecht are considered affiliated parties. In 2020, there were no transactions with affiliated parties that were of a non-business nature. The nature, extent and other information will be disclosed if this is necessary to provide the required insight.

Changes in estimation methods, accounting policies and valuation methods The preparation of the annual statement of accounts involves

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the use of assumptions, judgments and estimates that are

figures. The format of the statement of income and costs has

based on historical experiences and factors that, in the opinion

changed compared to 2019, so some figures cannot be traced

of the Management, are acceptable in view of the specific

from the 2019 annual accounts. Also, the VAT rate on hours and

circumstances. Such judgments and estimates (including any

salaries from Waternet has partly changed compared to 2019.

relevant assumptions) affect the valuation and presentation of the reported assets and liabilities as well as the annual result. The actual results may differ from these estimates and assumptions. If necessary in order to give a true and fair representation as required by Section 362, subsection 1, Book 2, the nature of these estimates and this opinion, including any relevant assumptions, are explained in the notes to the annual accounts. The methods of estimation and valuation and the accounting policies have

Accounting principles balance sheet

remained the same as in previous years.

Fixed assets Foreign currency The annual statement of accounts is prepared in euros. This is

Assets are generally valued at their historical cost, manufacturing cost or at their fair value at the time of acquisition. If no specific valuation is stated, it is valued at historical cost.

the functional and reporting currency. Transactions in foreign currencies are accounted for in the annual accounts at the exchange rate of the euro on the transaction date. Monetary assets and liabilities in foreign currencies are converted at the closing rate of the functional currency on the balance sheet date. Conversion differences resulting from settlement and conversion are credited or debited to the income and costs. World Waternet

Accounts receivable Accounts receivable are initially valued at fair value. If any accounts receivable are deemed (partly) uncollectible, provisions to debit the statement of income and costs will be made immediately.

has no derivative positions to hedge exchange rate risks.

Project income to be received/accrued Value-added tax (VAT)

World Waternet carries out projects that are (partly) financed

In general, World Waternet is not an entrepreneur for VAT purposes.

by third parties. On the basis of a contract, (part of) the costs

This means that the VAT paid on purchases are expenses for

incurred by World Waternet are reimbursed. The incomes are

World Waternet. The amounts reported in the balance sheet

often received after submission of an annual or final report and/or

and statement of income and costs, are standard including VAT,

advance payments are provided. The balance includes the income

and this VAT cannot be recovered from the tax authorities. For

to which World Waternet is contractually entitled minus the

those projects that do meet the requirements for qualifying as

advances already received. Depending on whether it concerns a

an entrepreneur for VAT purposes (explicitly involving a client-

receivable or accrued item, it is entered as an asset or a liability.

contractor relationship), World Waternet is an entrepreneur

Once it has become clear that part of the expected income will

for VAT purposes. In that case, the VAT paid on purchases is

not be realizable, a provision to debit the statement of income and

reclaimed from the tax authorities. The amounts for these projects

costs will be made.

are therefore shown excluding VAT. Any VAT on sales invoices from World Waternet must be paid to the Dutch Tax and Customs Administration. Sales to customers through these VAT invoices are therefore shown excluding VAT.

Liquid assets Liquid assets include withdrawable bank balances, cash and deposits with a term of less than 12 months. The current account

Corporate income tax liability (VPB) for public enterprises

credit of the NWB bank account has a limit of €750,000. If

There are no structural profits from operations, which means that

are valued at nominal value.

a negative balance is reached, the item liquid assets will be recorded under Current Liabilities. Funds and cash equivalents

to date World Waternet is not liable to pay VPB.

Reserves Comparative figures for the previous financial year For reference, the 2019 figures have been added to the 2020

The reserves are at the disposal of World Waternet and serve to compensate for setbacks, so that it can continue its activities. World Waternet will not distribute any operating surplus or

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reserves. The balance sheet therefore shows the balance of income and costs of the current financial year separately under the item reserves.

Provisions Provisions are formed for legally enforceable or actual liabilities that exist on the balance sheet date and for which it is probable that an outflow of resources will be required and a reliable estimate can be made. Provisions are valued at the best estimate of the amount needed to settle the obligation at the balance sheet date. Where obligations are expected to be reimbursed by a third party, such reimbursement is entered as an asset in the balance sheet if it is likely that such reimbursement will be received once the obligation has been settled.

Accounting principles of the statement of income and costs Determination of income The income consists of contributions from the municipality of Amsterdam, Regional Public Water Authority Amstel, Gooi and Vecht (AGV) and third parties. Income is allocated to the relevant period in which it is contractually claimable, regardless of the actual receipt. This is often a percentage of the costs incurred. Subsidies and third-party assignments are recognized as income in the statement of income and costs in the year in which the subsidized costs were incurred, income was lost or a subsidized operating deficit occurred. Income will be entered when it is likely that it will be received. Project incomes are the contractually agreed incomes and incomes from additional work, claims and

Current liabilities At their first entry, current liabilities are valued at fair value. After initial recognition, current liabilities are valued at amortised cost, i.e. the amount received, taking into account discounts, minus transaction costs. This is usually the nominal value.

compensation, if and to the extent that they are realizable and can be reliably determined.

Determination of costs For World Waternet, the costs consist of the secondment and hiring of Waternet staff and other (project) expenditures. Costs are entered in the year to which the costs relate, regardless of whether they have resulted in an expense in the fiscal year. If World Waternet has to pay costs in the future due to an event in the current fiscal year or earlier, the costs will be entered in the current fiscal year if they can be properly estimated and are considered to be likely. Project costs are costs directly related to the project and other costs that are contractually attributable to the client. Project preparation costs may be capitalised if it is probable that they will be reimbursed.

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Notes to the balance sheet The numbers in the balance sheet and the statement of income and costs refer to the notes.

1. Accounts receivable Accounts receivable in € ‘000

31-DEC-20

31-DEC-19

Accounts receivable general

82

243

Minus: Provision

0

0

Total accounts receivable

82

243

The accounts receivable balance consists of invoices recently invoiced to various organisations, of which AGV (€42,000), RVO (€11,000)

and

Surinaamse

Waterleiding

Maatschappij (SWM, €19,000) are the largest. There are no indications that these invoices are irrecoverable.

2. Income to be received Income to be received in € ‘000

31-DEC-20

31-DEC-19

395

192

Fonds Duurzaam Water - Ethiopia

17

0

LebRelief - Lebanon

15

0

Embassy of the Kingdom of the Netherlands Burkina Faso

13

0

NWB Fund - Ethiopia

0

131

GIZ - China

0

77

NWB Fund - Burkina Faso

0

39

440

439

31-DEC-20

31-DEC-19

Prepaid SOS insurance

25

25

Total expenses

25

25

Ministry of Foreign Affairs - Blue Deal

Total contribution to be received

Income to be received is income to which World Waternet is contractually entitled, but which has not yet been received from the funder. The incomes are often received after submission of an annual or final report. The Blue Deal annual report, including an unqualified auditor’s opinion, has been submitted but has yet to be adopted by the Ministry.

3. Prepaid Costs Prepaid amounts in € ‘000

The prepaid expenses consist of the prepaid premium for the SOS insurance.

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Notes to the balance sheet The numbers in the balance sheet and the statement of income and costs refer to the notes.

4. Other receivables Other receivables in € ‘000

31-DEC-20

31-DEC-19

8

60

VAT to be received

123

0

Total other receivables

131

60

31-DEC-20

31-DEC-19

Bank account NWB

3,511

2,320

Total liquid assets

3,511

2,320

Purchase invoices to be apportioned

The ‘purchase invoices to be apportioned’ are invoices that have been received and have yet to be processed.

5. Liquid assets Liquid assets in € ‘000

The bank balance of the NWB bank account is €3,511,000 positive at year-end 2020. The bank account has a current account provision which allows for a negative balance of up to €750,000.

6. Reserves (equity) Reserves 31 Dec. 2019 in € ‘000

754

Operating balance 2020

171

Reserves 31 Dec. 2020 in € ‘000

925

The 2020 income and costs balance of €171,000 has been added to the reserves. At year-end 2020, the reserves amount to €925,000.

7. Prepaid income Prepaid income in € ‘000

Prepaid income are advances that financiers

31-DEC-20

31-DEC-19

Ministry of Foreign Affairs - Jordan

1,787

0

European Commission - Burkina Faso

72

217

Ministry of Foreign Affairs - WaterWorX

72

95

including an unqualified auditor’s opinion, has

Netherlands Water Partnership - YEP

45

26

been submitted but has yet to be approved

1,976

358

Total prepaid income

have already paid, but for which World Waternet has not yet performed any work. The largest amount relates to the Dutch Embassy project Jordan Yarmouk. The WaterWorX annual report,

by the Ministry. The advances received for WaterWorX are higher than the subsidy to be received.

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8. Accrued liabilities Accrued liabilities in € ‘000

31-DEC-20

31-DEC-19

Accrued salaries Waternet

932

691

Accrued salaries YEP/Trainees Waternet

165

95

Accrued hours Waternet

136

855

Accrued financial audit Annual report/Blue Deal/WaterWorX 2020

28

20

Hiring of team World Waternet

0

26

Accrued WaterWorX

0

118

Accrued VAT

0

43

Accrued Amsterdam International Water Week

0

30

Accrued Blue Deal

0

22

Other

15

8

1,276

1,908

31-DEC-20

31-DEC-19

Accounts payable

12

67

Total accounts payable

12

67

Total accrued liabilities

Accrued liabilities consist of services or goods that were purchased in 2020, but for which an invoice has not yet been received. The largest items concern Waternet: the salaries of the permanent World Waternet employees (€932,000), the salaries of the Young Experts (€165,000) and the working hours of Waternetters (€136,000). There are also various smaller items, including the accountants’ fees.

9. Accounts payable Accounts payable in € ‘000

At

year-end

2020,

there

remains

an

outstanding amount of €12,000 to be paid to creditors, including for airline tickets.

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Notes to the statement of income and costs 2020

10. Notes on income

Latin America 2% Asia 10%

Other -1% The project-related income is lower than was estimated. This is the result of some delay in

Middle east 13%

the projects due to Covid-19, the later start of the embassy project in Jordan and the cancellation of a planned project in Shimla (India). The figure below shows the breakdown of incomes by region (total is €1.75 million). West Africa 43%

East and Southern Africa 31%

11. Notes on costs The costs are also lower than budgeted in 2020. This is the result

Covid-19, the travel and accommodation costs are considerably

of some delay in the projects due to Covid-19, the later start of

lower than in previous years. Also, because of Covid-19, less

the embassy project in Jordan and the cancellation of a planned

experts were hired from Waternet.

project in Shimla (India). Because travel was very limited due to

Audit costs 2020 In 2020, the Foundation’s auditor (ACAM) received an estimated

addition to an audit opinion, a factual report of findings must be

€28,000 including VAT in fees. Of this, €11,000 was for the audit

provided in which all audit differences, regardless of size, must

of the 2020 annual accounts and €17,000 for the audit of various

be mentioned.

projects. No consultancy assignments have taken place. The audit of the subsidiary accounts, WaterWorX and Blue Deal, took place on the basis of audit protocols established by the Ministry of Foreign Affairs and the Dutch Water Authorities (Unie van Waterschappen). The audit requirements have a lower materiality limit than the audit of the annual accounts and, in

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25

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Risks in the balance sheet & statement of income and costs Discontinuation tax agreement to share joint expenses (Kosten voor Gemene Rekening)

resources would be needed. In the medium term, the pandemic might result in the withdrawal of financiers, but we do not observe this yet.

Since the foundation of World Waternet in 2007, World Waternet has used the Dutch tax agreement to share joint expenses. This allows World Waternet to deploy staff employed by Waternet without Waternet having to charge World Waternet VAT on these costs. The Dutch Tax and Customs Administration indicated in 2020 that World Waternet did not meet the conditions. Waternet is charged an additional assessment of €0.7 million for the unpaid VAT and the corresponding interest for the period 2015-2019. Waternet will pass this additional assessment on to World Waternet. On the other hand, Waternet has made use of the so-called

Meeting financiers’ requirements Financiers provide funding subject to certain conditions, such as the timely achievement of results, timely delivery of reports, and tender requirements. If these conditions are not met, the financier cannot pay out or recover the funding. If costs have been incurred, this may result in a loss. There is also the possibility that World Waternet may have to complete a project at its own expense. This risk is mitigated by project control and interim (external) audits. There is no indication that any provisions need to be made for projects.

Resolution on Development Aid, as a result of which Waternet can invoice World Waternet with 0% VAT for the deployment of staff abroad. This regulation was applied for the 2020 financial year. As

Events after the balance sheet date

a result, Waternet invoiced approximately €1.2 million for services

After the balance sheet date of 31 December 2020 and the

with a foreign destination with 0% VAT in 2020 that would

preparation of the annual accounts, no events have occurred that

otherwise have had to be invoiced with 21% VAT (approximately

have an effect on the balance sheet position at year-end 2020.

€250,000). This regulation could be applied with retrospective effect over the period 2015-2019, which is expected to be equal to the tax payable. The Dutch Tax and Customs Administration has not yet given its formal consent to Waternet’s request to apply the Resolution on Development Aid.

Contingent liabilities Due to the Covid-19 pandemic, in 2020 the WaterWorX program incurred approximately €0.5 million less costs than budgeted. As a result, World Waternet’s own contribution was approximately €175,000 lower in 2020 and this will need to be compensated in 2021, which is the final year of WaterWorX phase 1.

Covid-19 pandemic The Covid-19 pandemic has had an impact on the number of travel movements and some projects have been delayed as a result. For 2020, this has resulted in less own contributions in some projects (e.g. WaterWorX). Should this continue in the coming years, certain project results might not be achieved. Financially, the impact seems limited, among other things because less own

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Independent Auditors Report To: The Executive Committee of Stichting Wereld Waternet A. Report on the audit of the financial statements 2020 included in the annual report Our opinion We have audited the financial statements 2020 of Stichting Wereld Waternet based in Amsterdam. In our opinion, the accompanying financial statements give a true and fair view ofthe financial position of Stichting Wereld Waternet as at 31December 2020 and of its result for 2020 in accordance with Part 9 of Book 2 of the Dutch Civil Code. The financial statements comprise: 1. the balance sheet as at 31December 2020; 2. the profit and loss account for 2020; and 3. the notes comprising of a summary of the accounting policies and other explanatory information. Basis for our opinion We conducted our audit in accordance with Dutch law, including the Dutch Standards of Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

We are independent of Stichting Wereld Waternet in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have compli ed with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics). We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. The remuneration of a senior official at different institutio ns is not audited In accordance with the protocol for auditing the financial reporting document by the accountant for the year 2020 on compliance with the Wet normering topinkomens (WNT, Standards for the Remuneration Act: Article 1.6a WNT and Article 51 paragraph 1, under j Uitvoeringsregeling WNT), we have not audited whether or not there is an exceeding of the remuneration by a senior official due to possible employment relationships at other institutions subjected to the WNT, as well whether the explanat ion required in this context is correct and complete.

Materiality Based on our professional judgment, the approval tolerance applied in our audit amounts to 1% for errors and 3% for uncertainties of the total expenses including additions to reserves. This is in accordance with the auditing protocol of Stichting Waternet. The reporting tolerance has been set at 0.3%, as well for smaller deviations which in our opinion are relevant for qualitative reasons subjected to the WNT. 29

For the audit of the remuneration information disclosed in the financial statements, we have applied the materiality requirements as defined in the protocol for auditing of the WNT. We also take into account misstatements and/ or possible misstatements that, in our opinion, are material for the users of the financial statements for qualitative reasons. B. Report on the other information included in the annual report In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of: - The management report; - The program accounts for each project; - Other information as required by Part 9 of Book 2 of the Dutch Civil Code. Based on the following procedures performed, we conclude that the other information: - Is consistent with the financial statements and does not contain material misstatements; - Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code. We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720.

The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements. Management is responsible for the preparation of the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code. C. Description of responsibilities regarding the financial statements Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the financial statements, management is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, management should prepare the financial statements using the going concern basis of accounting, unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements. Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

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Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit. 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. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. We have exercised professional judgement and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included, among others: - Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining 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; - Obtaining 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; - Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; - Concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern.

- Evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and - Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Amsterdam, 3 Juni, 2021

D. van Eeden RA Auditdienst ACAM

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www.worldwaternet.com 32