Annual Report 2011/12

JOHANNESBURG CITY PARKS NPC

ASSOCIATION INCORPORATED UNDER SECTION 21 OF THE COMPANIES ACT 1973 as amended 2000/028782/08

ANNUAL REPORT 2011/12

(In terms of Section 121 of the Municipal Finance Management Act, 2003 and Section 46 of the Municipal Systems Act, 2000)

JOHANNESBURG CITY PARKS NPC

ASSOCIATION INCORPORATED UNDER SECTION 21 OF THE COMPANIES ACT 1973 as amended 2000/028782/08

COMPANY INFORMATION:

Registration number : 2000/028782/08

Registered Address : Johannesburg City Parks City Parks House 40 De Korte Street Braamfontein 2017

Postal Address : P O Box 2824 Johannesburg 2000

Telephone number : (011) 712-6600 Fax number : (011) 712-6796

Website : www.jhbcityparks.com

Bankers : ABSA Bank of SA Limited

Auditors : Auditor-General

Vision To be a World Class African green environment and cemetery management company.

Mission To develop, maintain and conserve the green environment and cemeteries for present and future generations.

Johannesburg CityParks’ Values

Value What it means

We will at all times render the quickest, responsive and best service to our customers. We Service Excellence will do so in a competent, timely, cost-effective, efficient and professional manner.

We will do our work with care, empathy, respect and consideration for the well being of our staff, Caring our customers and stakeholders while maintaining a safe and healthy work environment.

We will at all times take responsibility for our Accountability actions. We will act with integrity in a transparent, ethical and honest manner.

We will take ownership of our work and act with Ownership enthusiasm, enjoyment, passion, pride and commitment to our work.

We seek to listen and create new approaches to Innovation what we do.

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION AND CORPORATE PROFILE ...... 7 Section 1: Corporate Profile and Overview of the entity ...... 7 Section 2: Strategic Objectives ...... 10 Section 3: Foreword by the Member of the Mayoral Committee for Community Development Portfolio, MMC C. Vondo12 Section 4: Chairperson’s Foreword ...... 14 Section 5: Managing Director’s Report ...... 16 Section 6: Chief Financial Officer’s Report ...... 22 CHAPTER TWO: PERFOMANCE HIGHLIGHTS ...... 30 Section 1: Highlights and Achievements ...... 30 Section 2: Company four-year review ...... 30 Section 3: Capital Projects ...... 32 Section 4: Performance against IDP Scorecard ...... 33 Section 5: Assessment of Arrears on municipal taxes and service charges ...... 42 Section 6: Statement on amounts owed by Government Departments and public entities ...... 45 Section 7: Recommendations and Plans for the next financial year...... 46 CHAPTER THREE: DIRECTOR’S REPORT AND GOVERNANCE ...... 48 Section 1: Corporate Governance Statement ...... 48 Section 2: Board of Directors ...... 48 Section 3: Board Committees ...... 58 Section 4: Directors’ Remuneration ...... 61 Section 5: Company Secretarial Function ...... 62 Section 6: Risk Management and Internal controls ...... 63 Section 6: Risk Management and Internal controls ...... 71 Section 7: Internal Audit Function ...... 77 Section 8: Response to the Auditor-General Report ...... 79 Section 9: Corporate Ethics and Organisational Integrity ...... 85 Section 10: Sustainability Report ...... 85 Section 11: Corporate Social Responsibility Report ...... 86 CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT ...... 89 Section 1: Human Resource Management ...... 89 Section 2: Building a Diverse Workforce (Employment Equity) ...... 91 Section 3: Skills Development and Training ...... 92 Section 4: Organisational Development and Performance Management ...... 97 Section 5: Quality of Work life Strategy...... 98 Section 5.1: HIV and AIDS in the Workplace ...... 98 Section 5.2: Health and Productivity Management...... 99 Section 5.3: Wellness management ...... 99

Section 6: Employee Benefits ...... 100 Section 7: Supply Chain Management and Black Economic Empowerment ...... 102 CHAPTER FIVE: AUDITED FINANCIAL STATEMENTS AND RELATED INFORMATION ...... 103 CHAPTER SIX: FUNCTIONAL AREA SERVICE DELIVERY REPORT ...... 106

CHAPTER ONE: INTRODUCTION AND CORPORATE PROFILE

“Johannesburg City Parks mandate is to continue to address disparities by making the biggest impact, for the most number of people, within its limited budget. My brief to the Chairperson and the Acting MD of Johannesburg City Parks is to interrogate innovative and sustainable solutions to resolve environmental imbalances. ” Councillor Mpho Parks Tau, Executive Mayor of the City of Johannesburg

Section 1: Corporate Profile and Overview of the entity

Johannesburg City Parks (JCP) is Section 21 Company, incorporated under the seal of the Registrar of Companies on 15 November 2000 and is credited for changing the landscape of the City for the better. The greening entity acts as the custodians of the environment on behalf of the City of Joburg and oversees designated open spaces including park development and maintenance; greening; conservation and cemetery management.

Accordingly Johannesburg City Parks manages the following assets: Area of Management Quantity Number of parks and arterials 2 343 Area of developed parks 4 239.5 hectares Area of undeveloped parks 2 080.6 hectares Selected sidewalks 3 593.2 hectares Nature reserves 1 202,6 hectares Street trees 1,4 – 1,7 million Number of cemeteries 36 Area of cemeteries 1 254 hectares Number of crematoria 2 Number of nurseries 4 Water surfaces 174 hectares Bird sanctuaries 366,4 hectares Trails and river trails 107km = 1 587 hectares Environmental & education centres 6 Size of fleet 312 Vehicles; 131 Trailers

Total number of employees as at 30 June 2012 is 1 579

Scope of Annual Report This report summarises the performance and operations for the 2011/12 financial year and is detailed in the body of the following report:

JCP is committed to the principles of the Joburg 2040 Vision as encapsulated in the strategy of the City of Johannesburg. The Company has aligned its Business Plan with the Integrated Development Plan and Environmental Sector Plan of the CoJ via its programmes and projects. This process has led to the restructuring of its operations which has resulted in the realignment of the regions.

Regionalisation to enhance Service Delivery The shift to a ward-based service delivery approach as of 1 March 2011, in line with the City of Johannesburg’s (CoJ) regional boundaries which is based on the current 7 regions and 130 wards within the CoJ. Ward-based service delivery entailed the development of a customer-centred service delivery approach in line with the unique requirements of each ward. This has resulted in ward- specific maintenance and capital development strategies and the equitable distribution of scarce resources. The war- based approach continues to assist JCP in being more responsive in addressing customer needs speedily as communities will have direct access to regional offices. These regional offices are capacitated with the necessary infrastructure and technical skills.

The Rationale:  The creation of a flatter organisational structure to speed up response times and management

 To make management more accessible to our customers;

 To align to the regional boundaries of the CoJ in order to improve overall delivery.

In a nutshell, the aim is to “connect parks and communities” and to improve the quality of life of the citizens of the City as each ward should have at least one flagship park. The outcome is the equitable provision of services across the City which is uniquely developed per ward. The regional offices have been established headed up by a Regional Manager. The Regional Manager is responsible for all activities within the region, including parks, trees, beautification and cemeteries maintenance.

The highly effective ‘Regionalisation Plan’ is headed by the Executive Director of Operations and is the roadmap to service delivery and service excellence in the organisation.

Functional areas:

 Parks and designated public open spaces

 Cemeteries management

 Environmental conservation

 Infrastructure Management

 Company Secretariat

 Marketing and Communications

 Human Resources

 Finance

 Assurance services

 Special projects

Section 2: Strategic Objectives

JOHANNESBURG CITY PARKS IDENTIFIED THE FOLLOWING AS STRATEGIC GOALS:

 FINANCIAL: To Strengthen, Grow and Protect the JCP Financial Resource Base.

Obtain an unqualified audit opinion for both financial and performance information.

Achieve increased levels of financial independence.

Enhance expenditure management.

Facilitate broad based BEE & SMME participation.

 CUSTOMER: To Provide Pro-Active and Innovative Solutions to Create and Enhance Value to all Stakeholders.

Enhance brand equity / loyalty.

Enhance stakeholder relations satisfaction.

Comply with IDP and Sector Plans.

Improve quality and service offering.

 INTERAL PROCESS: To Optimise Service Quality and Operational Effectiveness.

Obtain ISO 14001 certification.

Establish nurseries to meet internal requirements.

Establish time and attendance processes and systems.

Achieve world class processes and maintenance standards for flagship facilities.

Improve and establish productivity, costing and service delivery processes and systems.

Establish knowledge and performance information processes and systems.

Monitor and report on open space service quality.

 INNOVATION, LEARNING & GROWTH: To Build Capabilities and Ensure a Conducive Working Environment.

Establish an efficient and effective organisational structure.

Ensure effective service delivery.

Develop a race, gender, disability and diversity balanced organisation.

Develop high performance teams.

Become an employer of choice.

Section 3: Foreword by the Member of the Mayoral Committee for Community Development Portfolio, MMC C. Vondo

The City of Johannesburg has experienced several highlights during the 2011/12 financial year. A significant milestone in the 2011/12 financial year was the enactment of the Growth and Development Strategy (GDS). The GDS, a 30-year strategic plan towards the Joburg we aspire to live in, in 2040 - was developed following an outreach process to build a collective and shared vision for the future of Johannesburg. The Joburg 2040 vision is a culmination of extensive engagements with thousands of the city’s citizens that have helped shape our shared goal of a Joburg that offers: . An improved quality of life and development-driven resilience to benefit all its citizens; . To provide a resilient, liveable and sustainable urban environment; . An inclusive, job-intensive, resilient and competitive economy; and . A high performing metropolitan government that proactively contributes to and builds a sustainable socially inclusive and locally integrated, globally competitive Gauteng City Region.

Central to the GDS were the following fundamental principles:- . Eradicate poverty; . Build and grow an inclusive economy; . Develop sustainable human settlements; . Ensure resource security and environmental sustainability . Achieve social inclusion through support and enablement, and . Promote good governance.

As a member of the Mayoral Committee for Community Development, I regard the GDS as the blueprint to which all decisions made in my portfolio will be aligned to.

Johannesburg City Parks has aligned its projects in the 2012/13 Business Plan to the sub- programmes of the Human and Social Development Cluster which in turn is aligned to the master programmes of the GDS. The 2012/13 financial year Business Plan forms part of the beginning of a new mayoral term, which commenced in the 2011/12 financial year and ends in 2015/16.

City Parks has started to focus its activities towards achieving the outcomes in the GDS. These include food gardens at Kanana Primary School in Midrand, the extension and re-naming of the

Petros Molefe Eco-Park, the installation of Green Outdoor Gyms in various parks in the city, and the development of the Rose Street Stimulation Park in Lenasia.

The commitment of City Parks to serve the community is illustrated in the acceleration of service delivery through their blitz programmes in the various regions. In the new 2012/13 financial year, City Parks will continue to fast track the execution of the GDS mandate to positively impact on the quality of life of residents.

The projects will include: . Development of Food Gardens and planting of fruit trees; . Environmental Education to contain bylaw contraventions and build civic ownership; . Rollout of additional free-to-use Outdoor Gyms; and the . Development of Public Open Spaces.

City Parks and the Johannesburg Zoo are currently engaged in a merger to combine resources as part of the Institutional Review Process. This process is aimed at streamlining services, reducing duplication and enhancing service outputs to reduce operational costs. More importantly, City Parks and the Zoo will strive to provide residents with the best possible outdoor experience on offer, in the City of Joburg.

Section 4: Chairperson’s Foreword

The 2011/12 financial year will be a year that will be remembered by the Board of Directors and the staff of Johannesburg City Parks (JCP) as a turbulent yet progressive year. The year proved turbulent as a Hawks investigation into maladministration and corruption commenced shortly after the start of the financial year on the 1 September 2011 and was not concluded by the close of the financial year. This resulted in a series of events that had an effect on service delivery and hampered normal business activities. Mr Bryne Maduka was appointed as the Acting Managing Director.

The following initiatives and strategic imperatives demonstrate that the financial year under review was a progressive year. The 2011/2012 financial year kicked-off with a 90-day Accelerated Service Delivery Plan. JCP was able to make a positive impact to this intensive city-wide programme through initiatives on backlog reduction, litter-free parks, tree planting, safety and security in parks, provision of burials, cemeteries maintenance, city-wide clean-up campaigns and other greening and environmental imperatives.

One of the highlights of the 2011/2012 financial year was the introduction of Blitz Wednesdays to improve service delivery, where each Region identified hotspot areas in consultation with the Ward Councillors and concentrated the resources for the region to resolve maintenance backlogs.

Another highlight of the 2011/2012 financial year that demonstrated the resilience and service delivery focus of JCP, was the Mayoral Launch of the outdoor gyms at the Petros Molefe Park in Soweto. This initiative was a welcome innovation by the Pimville community which is funded as part of a private public partnership that is in line with the Joburg Growth and Development Strategy (GDS) 2040 aimed at building healthy lifestyles. Food security also took precedence in the organisation with the development of another two BMW-sponsored vegetable gardens at Kanana Primary and the Midrand Orphanage. This initiative also talks to the GDS as urban agriculture is a key focus area in future community developments.

The Board also established a Special Projects Unit, under the leadership of an Executive the unit is mandated to oversee EPWP, Urban Forestry and Nurseries, Technical Support and Institutional Memory, Special Projects and the JCP Academy. One of the key strategic imperatives and a key strategic project that was assigned to the Special Projects Unit was to ensure that there is a sustainable supply of plantable trees through JCPs internal resources. To this end, tree seedlings

propagation is already advanced in the period under review and a target of 90 000 tree seedlings production per annum was set.

Other highlights in the financial year under review that are worth noting are the Jukskei River clean- up in partnership with the National Department of Environmental Affairs and also the Installation of solar bees in partnership with the CoJs Environment Management Department in Bruma Lake.

The Board established a project team and a Steering Committee in conjunction with the Board of Directors of Joburg Zoo to oversee the merger between the entities. A project plan was put together by the project Committee and presented to the Steering Committee for approval. There has been considerable progress that has been made during the financial year to advance the merger. Certain departments in both entities have started working together. Due diligence has been conducted and the legal requirements for the merger have been met to a large extent.

The most notable event in terms of the Board and Corporate Governance was the Annual General Meeting, which took place in April 2012. The Board Chairperson, Mr Maropeng Bahula was retired from the Board and a new Chairperson, Advocate Brenda Madumise was appointed. Also, new non- executive board members were appointed to the Board and some of the Board members were appointed on both the Joburg Zoo and the Johannesburg City Parks boards to ensure that the merger between both entities is concluded seamlessly and expeditiously. The Board, under the capable leadership of Advocate Madumise, will continue to oversee the merger of both entities and the strategic imperatives of the merged entity.

Section 5: Managing Director’s Report

Overview

“What defines a character of a city is its public space, not its private space. What defines the value of the private assets of the space are not the assets by themselves but the common assets. The value of the public good affects the value of the private good. We need to show every day that public spaces are an asset to a city.” -- UN-HABITAT Executive Director Joan Clos i Matheu

Overview Johannesburg City Parks continues to act as springboard to revitalize communities and jumpstart environmental activities in the City of Joburg. The mandate to deliver quality services to as many people as possible, while being cognizant of the need to bridge the green divide and to work within limited resources as defined in the Growth and Development Strategy, Integrated Development Plan and the Business Plan, sets the tone and path for which JCP operates and executes service delivery.

The City is “changing course” and JCPs operations in the period under review has focused on getting the basics right in providing service delivery through the maintenance of all our facilities- particularly in townships, changing our focus to connecting with customers by responding rapidly to their complaints and providing timeous feedback. JCP has further demonstrated that service delivery is vital on our list of priorities and to this end has maintained facilities that are outside of the entity’s core mandate such as informal settlements, provincial roads and national roads. This resulted in positive media coverage and an increase in staff morale. However, it has placed added pressures on JCPs allocated resources.

Strategic interventions were implemented to narrow the gap between the planned and actual maintenance, in particular the implementation of Mega and Mini Blitz activities. Each of the 7 Regions identified hot spot areas in consultation with the Ward Councillors, where resources were redeployed to address the maintenance of backlogs and customer complaints. The Mega Blitz programme was a major success stemming from the participation of other MEs, the community, ward councillors and the media.

Customer complaints teams addressed all customer complaints received. Aptly named as “swat teams”- the focus of these teams was solely to address all customer complaints backlogs.

These interventions gained popularity through social networks such as, twitter and facebook, where customers posted positive remarks. The intention was to get back to basics, connect with the community through visible service delivery at ward-base level, and to change any negative perceptions which may have been created about the organisation. This resulted in a major reduction of customer complaints logged resulting in a 88.7% customer complaints resolution, as opposed to 82% in the comparative period in the 2010/11 financial year. In line with the IDP targets, maintenance of all our flagship facilities were maintained at 100%.

The Annual General Meeting held on 24 April 2012 resulted in the Chairperson of the Board, Mr Bahula being retired together with two Board members namely Mr V Ramsingh and Ms T Johnson. JCP has a new chairperson of the Board, Advocate B Madumise who is supported with two new Board members namely Mr M Simelane and Dr M Diaho. JCP is confident that the newly appointed board directors with their professional skills set, will add value to the organization and drive the organisation to enhance service expecations.

JCP has developed a sound financial status and maintained its high level of financial governance in order to be compliant with the MFMA. As proof of this the Auditor General has done an assessment of our key controls for the third quarter with no findings, which shows commitment to sound financial management and good governance.

A healthy community lifestyle is about both physical and mental wellbeing. JCP offers a unique experience within its parks with the innovative Outdoor Green Gyms launched in Diepsloot Park Region A, and Petrus Molefe Park in Region D. JCP plans to roll out at least twenty Outdoor Green Gyms throughout the City of Joburg in line with the Growth and Development vision of creating healthy communities.

The Food Garden Programme is another focus area in support of the Growth and Development Flagship Programme, “A City where none Go Hungry”. JCP has partnered with Engen, Total SA, BMW, 94.7 Radio Station and the St Johns High School to develop food gardens at the Kanana Primary School in Alexandra, Abram Kriel Orphanage in Emndeni Soweto, Realogile High School in Alexandra and various other schools in impoverished areas. In the next financial year, JCP plans to roll out two food gardens as part of the Capex programme- one in Orange Farm and one in Diepsloot. These food gardens will have an initial estimated food production to feed fifty households.

Job creation and poverty alleviation remain a core focus area. A capacitated and dedicated Expanded Public Works Programme Unit has ensured the utilisation of local labour on all Capital projects together with contracted service providers. Emphasis has been placed on partnering with SMME’s with a view to developing their managerial skills and business acumen.

Job creation through the development of small and micro businesses continues to be a topic of much debate. However, very few sustainable initiatives have been developed and implemented. In support of the COJs initiative with regards to job creation, JCP hopes to secure a partnership with the Gauteng Enterprise Propeller to develop skills, implement an incubator hub and related monitoring mechanisms in order to ensure the sustainability of SMMEs.

In line with the COJ’s institutional review process, JCP together with the Joburg Zoo will merge and become one entity. To this end, both entities have made significant progress in preparation for the merger, including, but not limited to establishing a single Business Plan and Budget for the combined entities which will be effective in the next financial year.

In closing, JCP is a healthy vibrant company that is focused on executing its services par excellence. Despite all the challenges, the goal is to undertake our mandate with diligence and to positively change the lives of the communities we serve.

Key Performance Areas

Customer Perspective: Provide proactive and innovative solutions to create customer value

The Mayoral priority and Environmental Sector Plan imperative of a Clean Green City was further augmented by the planting of 30 242 trees planted for the year versus a target of 30 000. Proudly, the capital development programme for the 2010/11 financial year was concluded in the fourth quarter with over 13 projects developed.

A total of 2 307 new job opportunities were achieved YTD against a target of 2 000

Financial Perspective: The Strategic objective of this perspective is to proactively manage and maximise the Johannesburg City Parks capital base and revenue streams.

The following table reflects the audited results for the year. Refer to applicable sections of this report for detailed explanations: Performance area – R 000’s Actual Budget Variance Revenue 541 002 591 579 (50 577) Expenditure 563 800 591 579 27 779 Surplus/(Deficit) (22 798) 0 (22 798) Cash position 210 251 208 460 1 791 Capital and project expenditure 55 796 54 200 (1 596)

An operating deficit of R22.8 million was incurred primarily due to external services debt impairment of R22.4m and gross profit shortfall of R18.6. The impact of these was reduced by R3.4million bad debts and R0.9 million transfer costs recovered, and savings under water, electricity and fleet cost making the bulk of the favourable variance of R13.4million under general expenses. Total company revenue for the period was R541.0million, which was R50.6million less than budget. Revenue generation from External Services has decreased in this year, with R39.2million invoiced during the year, and contributing R44.3million to the adverse revenue variance of R50.577 million above. The gross profit generated by External Services amounted to R4.2million (10% of sales).

The COJ subsidy for the year amounted to R457.2million.The COJ subsidy for the previous year was R469.6 million. The COJ subsidy for the next year will be R487.6million – an increase of R30.4million.

Revenue from burials generated R19.0million for the year, which is less than budget by R3.5million. The marketing department generated income from events to the value of R1.7 million compared to a budget of R2.1million.

Total company expenditure for the period was R563.8million.This was R27.8million less than budget, of which, cost of sales was underspent by R25.3million, and as expected, was due to lower than budgeted external sales revenue.

Capital expenditure was R1.596million over budget due to leasehold improvements to buildings occupied by the company.

The company has a healthy cash balance of R210.251million. Accumulated surpluses at the end of June 2012 amount to R96.332 million.

Internal Business Process Perspective: This perspective’s strategic objective is to strengthen the operational efficiencies of JCP so as to deliver an environmentally sustainable development content and impact

At the end of the 2011/12 financial year, JCP had no complaints outstanding for 90 days or longer. This can be attributed to JCP’ commitment to service delivery.

Through our supply chain management processes, we achieved 91% for procurement spent on BEE (Opex) and 63% for procurement spent on BEE (Capex).

In accordance with the plan, thirty seven (37) audits were scheduled to be conducted. Thirty four (34) audits were completed and reported on representing 89% implementation of the total annual plan by 30 June 2012. The remaining three were deferred due to the on-going institutional review.

The risk containment measures in place are regularly monitored to ensure that they are within the acceptable residual risk rating. Significant movements noted are reported to management and appropriate committees of the board on a quarterly basis.

Innovation and Learning: This strategic objective is to create the environment and build capabilities within JCP to deliver sustainable and measurable development outcomes.

JCP shifted its focus on HIV/AIDS to a more holistic approach in management of employee wellness. Three areas of operation namely, Health and Wellness, Psychosocial factors and Mental Health and Work life Balance were identified to achieve this strategy. These enable the Company to implement sustainable wellness programmes and further de-stigmatize the function of management of HIV/AIDS within the workplace.

As part of this approach, a number of programmes were undertaken under the banner of Quality of Worklife Balance during this period under review. Topics relevant to worklife balance are presented monthly via the internal news medium.

Conclusion As we close the 2011/2012 financial year, it is critical to note that the year has not been without its own challenges such as budget re-prioritization, the Hawks investigation and the integration process with the Zoo. Despite all these, JCP has endeavored to excel in its service delivery with a view to change the lives of the communities we operate within. Good health to the people through green gyms and food gardens are exciting concepts that JCP is going to drive aggressively to take the service delivery agenda to a higher level.

Appreciation

I would like to thank our Member of the Mayoral Committee, Mr C. Vondo for his political guidance and support, the board for its vision and all JCP’ staff for JCP’ excellent performance. During the 2011/12 financial year, JCP experienced various challenges including the investigations and the effects of it. JCP responded in a positive way by keeping focused, working harder towards service delivery and remain positive to keep the JCP brand alive.

SECTION 6: Chief Financial Officer’s Report

The Company posted a deficit of R 22.8million for the period under review, against a nil budgeted surplus. This deficit is largely attributable to adverse external services gross profit, low level of grave bookings and a low interest on the sweeping account.

6.1.1 Revenue

The Company posted revenue of R 525.3million (excluding interest) for the year, a decrease of 11.3 % from the previous year. The subsidy from the shareholder, the City of Johannesburg Metropolitan Municipality, which amounted to R457.2 million, made up 87% of the total revenue received. Revenue from cemeteries amounted to R 19.0 million decreased by 2.7 %, and external services revenue decreased by 54.9% to R 39.2 million.

6.1.2 Results of Operations

Operational costs decreased by 3.9 % from the previous year to R 563.8, million during this period. The key operational costs that contributed to the decrease were mainly repairs and maintenance and general expenses. Repairs and maintenance expenditure amounting to R16.7million decreased by 15.2%, due to deferral of to be done on buildings, playground equipment, roads and pathways. General expenses amounting to R172.8million was R40.2million lower than last year mainly due to the decrease in cost of sales for external services. This was in line with the decrease in related revenue above.

6.1.3 Cash Flow Statement:

The COJ subsidy to the value of R 457.2million was received during this period which contributed 81.1 % towards the operational costs. Interest earned amounting to R 15.7million (2011: R 15.4 million) contributed 2.8% towards the operational costs. The remainder was from cemetery fees, bad debts recovered and external services. The Company ended the year in a favourable cash position with cash on hand being R 0.08 million.

6.1.4 Statement of Financial Position

Non-current assets decreased by a net value of R 3.6million to R 110.3million. This decrease was due to the depreciation, amortization and disposals of property, plant and equipment and intangible assets in excess of additions. The decrease in employee benefit investment results from payments made against the investment accounts in excess of interest received thereon. Property, plant and equipment decreased by R1.5million while intangible assets and employee benefit investment decreased by R 1.2million and R 0.9million respectively.

The ability of the Company to meet its financial obligations increased slightly with liquidity ratio at 1. 42: 1 (2011 = 1.48: 1).

The decrease of R27.3million in the receivables from exchange transactions at year-end was mainly as a result of better management and collection of receivables. The decrease of R12.5million in payables over the previous year was mainly due to better management and payment of payables.

Executive Team:

Acting Managing Director

Bryne Maduka. Age 37.

Qualifications: LLB, LLM (Wits University). Bryne holds a Masters degree in law and specialized in company law. He has been with the City of Johannesburg for 8 years before joining City Parks in May 2010. Having been involved since inception of most of the Municipal Owned Entities, he brings rich experience in the operations of the City and expertise in corporate governance and legal matters at large.

Geoffrey Cooke. Operations Executive Age 48 Qualifications: MBA (FSAIM) Dip. Co. (GMIT) Geoffrey has a Masters Degree in Business Administration and Diploma in Company Direction with the Graduate Institute of Management & Technology (GMIT). He also has more than 17 years’ experience in various senior management positions. He joined JCP from the private sector as a General Manager. He is currently the Operations Executive and acted in the position of the Managing Director from July 2010 to March 2012. He has extensive knowledge and skills in leadership, contract management, strategic management, Business Management, Operations Management, Facilities Management, financial management as well as people management. He is innovative, strategic and a team player.

Fouch Fouché. Marketing and Communications Executive. Age 58.

Qualifications: Masters in Marketing & Communication Degree - University of North West, Higher National Diploma in Quantity Surveying –Technikon Wits, Advanced Business Management Programme – University of Johannesburg. Fouch has experience in: marketing, communication, income generation, media and stakeholder liaison, transformation, loss control, restructuring, building construction, project and contract management; over and above that he also have more than 20 years’ experience on a senior managerial level in local government. Fouch was also instrumental in various awards and achievements such as the first gold award for a local authority in the country from the National Productivity Institute for productivity and service, the establishment of a 24 hour one-stop building plan approval system and various awards at the International Liveable Communities awards

Rees Clements. Chief Financial Officer. Age 59. Qualifications: Chartered Accountant the Rhodesian Society of Chartered Accountants. Over 35 years business exposure in financial, IT, knowledge and strategic management in the following industry sectors: Packaging and printing, Gaming, Supply chain/FMCG Auditing and Public Finance

Kgomotso Molale. Assurance Services Executive. Age 38. Qualifications: B. Com Accounting. University of North West. Kgomotso has experience in Municipal Finance Management Act, King Code on Corporate Governance, Public Finance Management Act and Professional Standards for the Practice of Internal Auditing and GAAP.

Bukelwa Njingolo. Acting Executive: Conservation and Infrastructure. Age 43.

Qualifications: BA Social Sciences –University Fort Hare Higher Diploma in Education –University Fort Hare Diploma in Project Management – Damelin CAPM (Certified Associate in Project Management) - PM Ideas Masters in Business Leadership – UNISA SBL (Current)

Ms Brenda Dlakavu. Acting Human Resources Executive. Age 38. Qualifications: Bachelor of Arts – University of Fort Hare – 2000. Post Graduate Diploma in Human Resources Management – University of Johannesburg – 2004. Brenda has vast experience in organisational development which includes organisational design, job definition, performance management and job evaluation.

Mr Marks Sethaelo. Acting Executive: Special Projects Qualifications: Matriculated in 1977 at the famous Barolong High School in Mafikeng, holds Masters in Business Administration (Mancosa), Diploma in Advanced Management Program, National Diploma in Forestry, Certificate in Community Risk, Certificate in Project Management, Certificate in Municipal Law and Labour Relations.

Marks brings on board Johannesburg City Parks’ Executive panel diverse amounts of experience, knowledge and skills. He has been with JCP since inception as General Manager in Operations. Prior to commencement of services to Johannesburg City Parks, Marks acted as Executive Manager: Environment and Recreation Management in the then Midrand Metropolitan Local Authority and has also worked in a senior position in the City of Mafikeng. With exceptional planning, servant leadership approach, control and transformation skills he plays a pivotal role not only in the operations of the company but community development as well.

He is the former chairperson of the Institute of Environment and Recreation Management – (IERM) for Gauteng Region (2004 -2006), currently, serving as the chairperson for the Greater Midrand Development Centre (GMDC) that focuses mainly on pro poor programmes and SMME development.

CHAPTER TWO: PERFOMANCE HIGHLIGHTS

Section 1: Highlights and Achievements

 Launch of two Outdoor Green Gyms in Petrus Molefe Eco Park and Sarafina Park, Diepsloot.  A total of 2 307 new job opportunities were achieved YTD against a target of 2 000.  Planting of 30 242 trees planted for the year versus a target of 30 000.  Gold AgriSeta award of excellence for a project that employed more than 50% of learners trained- this is recognition for the work being done at JCP’s training academy.  Green-Collar Training Award at the “BHP Billiton Achiever Awards 2011”. This is a national competition to reward companies “for setting the standard in skills development”.  Youth Going Green project in partnership with St John’s College at Realogile High School.

Section 2: Company four-year review

Units 2012 2011 2010 2009 2008

Key financial figures

Total assets Rm 407.4 436.1 393.4 349.9 354.3 Total equity Rm 124.4 147.2 125.8 112.3 109.7 Total equity and liabilities Rm 407.4 436.1 393.4 349.9 354.3 Bank balance Rk 77 54 50 42 32 Capital expenditure Rm 10.1 10.3 8.7 11.9 23.5 MIG Rm 37.0 19.8 12.4 15.0 9.6 Revenue Rm 541 607.8 527.6 491.1 425.6 Grant and Subsidies Rm 457.2 469.6 425.0 423.7 364.1 Employee costs Rm 330.8 338.4 297.2 289.1 271.0 Finance income Rm 15.7 15.4 18.6 23.6 26.4 Finance costs Rm 6.2 7.3 7.1 8.2 7.1

Units 2012 2011 2010 2009 2008

Surplus before tax Rm (22.8) 20.8 11.8 2.7 (3.4) Surplus for the year Rm (22.8) 20.8 11.8 2.7 (3.4) Net cash from operating Rm 9.7 (20.3) 59.1 18.1 8.9 activities Net cash (used)/generated by Rm (10.4) 18.3 (55.8) (10.7) (22.5) in investing activities Net cash from/(used in) Rm 0.7 (2.1) (3.3) (7.4) 13.6 financing activities

Financial ratios

Liquidity % 142 148 148 151 151 Solvency % 144 151 147 147 145 Total operating % 166 99 98 103 105 expenditure/revenue Interest coverage Ratio (2.69) 3.86 2.65 1.32 0.52

Other Employees number 1 579 1 626 1 568 1 660 1 799 Employment equity % 97.65% 98% 97.51 97.65 97.38 Gender equity % 18.93% 17% 13.58 14.65 11.45 People with disabilities % 1.13% 1.04% 0.65% 0.36% 0.34% Training cost Rm 1.4 1.2 1.2 1.8 0.9 Black economic Rm 196 267 227 280 272 empowerment

Section 3: Capital Projects

CAPITAL DEVELOPMENT

Summary of key areas of expenditure Details Budget Actual Exp. % R’000 R’000 Expenditure CoJ Funding 8 700 8 700 100% MIG Funding 37 000 36 962 99.9% Bulk Contributions 1 500 1 476 98.4% Operational Capex 7 000 8 658 123.7% TOTAL PROJECTS 54 200 55 796 102.9%

Project Summary: Capex 2010/11 Project Name Project Description Budget Actual Exp. R’000 R’000

Cosmo City Park New park development 2 000 1 993

Malatsi Park Park Upgrade 2 000 2 000

Dlamini Park New park development 6 000 6 000 (extension) Mandela Park 4 000 4 000

Avalon Cemetery Cemetery Upgrade 4 700 4 700 (Extension) Olifantsvlei Cemetery New Cemetery Development 15 000 15 000 Braamfontein Cemetery Crematorium Upgrade 1 410 2 199

Lenasia Crematorium Crematorium Upgrade 5 590 4 800 Road Island Beautification Road Island Beautification 3 000 2 976

Horticultural Ambiance Horticultural Ambiance 3 500 3 470

Operational Capex Plant, Equipment, Furniture, 7 000 8 658 Office Equipment, IT and Buildings

In as much as budget cuts have been experienced over the past few years, JCP’ focus and vision has not deterred in ensuring provision of qualitative open spaces to communities.

Section 4: Performance against IDP Scorecard

JCP had a successful year in terms of performance and achievement. Set out below, is an analysis of JCP’ performance against its KPI’s for the 2011/12 financial year as set out in the Corporate scorecard. The report analyses the performance of JCP in terms of the corporate scorecard, measuring performance in terms of both JCP’ impact and its financial and resource management.

Variance Report

KPINr Key Target Actual Variance Comments Performance Objective F1 Unqualified Unqualified Unqualified 0% Target audit audit audit Achieved opinion attained Opinion Opinion attained attained F2 Rand Value of R80.m R39.1m Variance: Target not income R40.9m achieved generated from external sources F3 Actual Capex 95% 103% Variance: 8% Target spend vs. budget Exceeded F4 % Overspend on 0% 3% 3% Target Partially Capex Budget achieved F5 % Adverse 5% or better 4.69% Variance: 0.31% Target Partially variance on Favorable achieved Opex Budget F6 % Surplus on 1% or more (3.8)% Variance: 3.8% Target Partially Budget achieved F7 % Opex spend 76% 91% Variance: 15% Target on BEE and Exceeded SMME enterprises F8 % Capex spend 62% 63% Variance: 1% Target on BEE and Exceeded SMME enterprises C1 % Customer >70% 78% Variance: 8% Target satisfaction Exceeded rating C2 Number of 4 parks 9 Parks Variance: 5 Target developed parks Exceeded as per the IDP

KPINr Key Target Actual Variance Comments Performance Objective C3 Number of 22 000 20 757 Variance: Target Partially direct 1 243 achieved. This beneficiaries is a stretched reached on target. The environmental target in the awareness Sector Plan is 18 000 beneficiaries. C4 Stages of Phase 1 Phase 1 Variance: 0 Target development of completed completed Achieved Oilifantsvlei Cemetery C5 % Stakeholder Establish 39% Variance: 0 Target satisfaction baseline Achieved C6 % Compliance to 95% 95% Variance: 0 Target Environmental Achieved sector plan (As per Business Plan) C7 % Compliance to 90% 100% Variance: 10% Target applicable Exceeded legislation P1 Bi-annual ISO Bi-annual ISO Bi-annual Variance: 0 Target 14001 14001 ISO 14001 Achieved Certification Certification Certification P2 Number of 2 2 Variance: 0 Target operational Achieved nurseries P3 % Risk 95% 95% Variance: 0 Target containment Achieved measures addressed as per Risk Register P4 % Of 95% 95% Variance: 0 Target maintenance Achieved activities controlled by Asset Care Centre P5 % Monthly staff 90% 72.5% Variance 17.5% Target partially attendance achieved P6 % Utilisation of 72% 84% Variance: 6% Target knowledge Exceeded

KPINr Key Target Actual Variance Comments Performance Objective management system P7 % Service 68% 62% Variance:6% Target Partially quality rating achieved LG1 Annually Annually N/A N/A Not fully approved approved implemented organisational organisational due to structure structure institutional implemented implemented review process LG2 % Training and 85% 79% Variance:6% Target Partially development achieved initiatives undertaken as per Training and Development Plan LG3 Number of 124 124 Variance: 0 Target people trained at Achieved JCP Academy LG4 % Compliance 90% N/A N/A Not fully with implemented Employment due to Equity Plan institutional review process LG5 % Corporate 94% 100% Variance: 0 Target achievement of Achieved scorecards LG6 Lost Time Injury <1 1 Variance: 0 Target Frequency Rate Achieved (LTIFR) LG7 % Compliance 75% 90% Variance:15% Target with OHS Act Exceeded Checklist LG8 Annually Annually Annually Variance: 0 Target approved approved approved Achieved Employee Employee Employee Wellness Wellness Wellness Programme Programme Programme implemented implemented implemented

JOHANNESBURG CITY PARKS CORPORATE SCORECARD 2011-12

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T Strategic Financial Objective - Strengthen, Grow and Protect the JCP Financial Resource Base Sustain F1 Unqualified Unqualifie N/a N/a N/a Unqualif Unqualifi N/a N/a N/a Unqualifi manageme audit d audit ied audit ed audit ed audit nt control opinion opinion opinion opinion opinion and attained attained attained attained attained performan for 2010- ce 11 Improve F2 Rand Value R80m R39.1 R 5.2m R 6.3m R 10m R 10.6m R 42m R7.3m R 22.8m R14.9m and of income maximise generated return on from investment external sources Maximise F3 Actual 95% 103% 2% 1.7% 20% 32% 50% 47% 95% 103% cost Capex efficiencies spend vs. [Opex & budget Capex] F4 % 0% 3% 0% 0% 0% 0% 0% 0% 0% 3% Overspend on Capex Budget F5 % Adverse 5% 4.69% 5% or 8% 5% or 8.7% 5% or 14.5% 5% or 4.5% variance on or Better Favourab Better Favourabl Better Favourabl Better Favourab Better Favourabl Opex le e e le e Budget F6 % Surplus 1% (3.8)% 1% or 18.7% 1% or 6.3% 1% or (4.2)% 1% or (2.8)% on Budget or More More More More More

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T Optimise F7 % Opex 76% 91% 76% 89% 76% 92% 76% 92% 76% 91% BEE and spend on SMME BEE and spend SMME enterprises F8 % Capex 62% 63% 62% 54% 62% 40% 62% 83% 62% 61% spend on BEE and SMME enterprises Strategic Customer Objective - To Create and Enhance Value to all Stakeholders Innovate C1 % >70% 78% N/a N/a N/a N/a N/a N/a >70% 78% and Customer improve satisfaction quality and rating service offering C2 Number of 4 Parks 9 Parks N/a N/a N/a N/a N/a N/a 4 Parks 9 Parks developed parks as per the IDP C3 Number of 22 000 20 757 5 500 4 920 5 500 5 059 5 500 5 584 5 500 5 194 direct beneficiarie s reached on environmen tal awareness C4 Stages of Phase 1 Phase 1 N/a N/a N/a N/a N/a N/a Complet Phase 1 developme complete ion of completed nt of d Phase Olifantsvlei One Cemetery

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T Improve C5 % Establish 39% N/a N\a N\a N\a N/a N/a Establis 39% Internal Stakeholder baseline h and satisfaction baseline External JCP Stakeholder Relations Comply C6 % 95% 95% 95% 95.3% 95% 95% 95% 89%. 95% 95% with core Compliance delivery to mandate Environme and ntal sector enhance plan (As per service Business delivery to Plan) all C7 % 90% 100% 90% 100% 90% 100% 90% 100% 90% 100% stakeholder Compliance s. to applicable legislation

Strategic Process Objective – 25%: To optimise Internal business systems, processes to enhance operational effectiveness Optimise P1 Bi-annual Bi-annual Bi-annual N\a N/a N/a N/a N\a N\a Bi- Bi-annual internal ISO 14001 ISO 14001 ISO annual ISO 14001 systems Certificatio Certificati 14001 ISO Certificati and n on Certificati 14001 on processes on Certifica tion P2 Number of 2 2 N\a 2 N\a 2 N\a 2 2 2 operational nurseries

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T P3 % Risk 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% containmen t measures addressed as per Risk Register P4 % Of 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% maintenanc e activities controlled by Asset Care Centre P5 % Monthly 90% 72.5% 90% 75% 90% 84% 90% 79.46 90% 69.58% staff attendance

Optimise P6 % 72% 84% 60% 67% 64% 67% 68% 84% 72% 84% performanc Utilisation e of information knowledge and managemen knowledge t system managemen t Monitor P7 % Service 68% 62% 68% 66% 68% 62% 68% 62% 68% 57% and quality Average evaluate rating service quality

Strategic Learning and Growth Objective - To Build HR Capabilities and Ensure a Conducive Working Environment

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T Optimise LG1 Annually Annually Not fully N\a N\a N\a N/a N\a N\a Annuall Not fully organisatio approved approved implemen y implement n structure organisatio structure ted due to approv ed due to to support nal implement institutio ed institution the JCP structure ed nal structur al review delivery implemente review e process strategy. d process implem ented Identify, LG2 % Training 85% 79% 25% 28% 50% 48% 75% 57% 85% 79% develop and and developme enhance nt JCP HR initiatives core undertaken capabilities as per and Training capacity. and Developme nt Plan LG3 Number of 124 124 N\a N\a N\a N\a N\a N\a 124 124 people trained at JCP Academy Value LG4 % 90% Not fully 90% 90% 90% 90% 90% N\a 90% Not fully diversity Compliance implemen implement and with ted due to ed due to improve Employmen institutio institution employme t Equity nal al review nt equity Plan review process process Performan LG5 % 94% 100% N\a N\a 94% 100% N\a N\a 94% 100% ce Manage Corporate Human achievemen Capital t of 40

KPA KPI KPI TARGET YTD Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 COMMEN NO. 2011/12 2011/12 TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TARGE ACTUAL TS T T T T scorecards

Create and LG6 Lost Time <1 1 <1 1,87 <1 1,87 <1 0.02% <1 1 promote a Injury safe and Frequency conducive Rate working (LTIFR) environme LG7 % 75% 90% 75% 75% 75% 75% 75% 87% 75% 90% nt. Compliance with OHS Act Checklist LG8 Annually Annually Annually N\a N\a N\a N\a N\a N\a Annuall Annually approved approved approved y approved Employee Employee Employee approv Employee Wellness Wellness Wellness ed Wellness Programme Programm Program Employ Programm implemente e me ee e d implement implemen Wellnes implement ed ted s ed Progra mme implem ented

Section 5: Assessment of Arrears on municipal taxes and service charges

5.1 Assessment of Municipal Taxes and Service Charges owed by Johannesburg City Parks

Name of Entity Amount Owed Status Comments R’000 City of 78 602 Provided for Current Johannesburg in Metropolitan Johannesburg Municipality City Parks’ books City Power 188 Provided for Current Johannesburg in Johannesburg City Parks’ books Johannesburg 1 383 Provided for Current Road Agency in Johannesburg City Parks’ books The 63 Provided for Current Johannesburg in Civic Theatre Johannesburg City Parks’ books The 30 Provided for Current Johannesburg in Zoo Johannesburg City Parks’ books

5.2 Amounts owed to Johannesburg City parks for service charges

Name of Entity Amount Owed Status Comments R’000 City of 78 602 Provided for in CJMM’s Current Johannesburg books Metropolitan Municipality City Power 6 438 Provided for in City Current Johannesburg Power Johannesburg’s books Johannesburg 121 Provided for in Current Road Agency Johannesburg Road agency’s books City of 111 Provided for in City of Current Johannesburg Johannesburg Property Property Company’s books. Company Johannesburg 404 Provided for in Current Water Johannesburg Water’s Books Pikitup 67 Provided for in Current Johannesburg Pikitup’s books

5.2: Assessment of Director’s and senior managers’ municipal accounts

Name of Designation Name of Municipal Account Comments Director/ Municipality Account Name Status Senior & Account Manager Number M Madumise Chairperson of the Johannesburg Account holder Appointed Board in dispute with CoJ. D Westgate Non-Executive Johannesburg D Westgate In-order Director 202282069 Adv R Rawat Non-Executive Johannesburg 403339798 In-order Director M Dolamo Non-Executive Johannesburg Dolamo A M In order Director 403193013 Dr G Karim Non-Executive Johannesburg Karim G H In order

Name of Designation Name of Municipal Account Comments Director/ Municipality Account Name Status Senior & Account Manager Number Director 402859579 S Bogatsu Non-Executive Johannesburg Setshego R B In order Director 303442142 DR Mokhobo Non-Executive Johannesburg Mokhobo DR & In order Director BR 400847673 M Diaho Non-Executive Director M Simelane Non-Executive Tshwane Simelane M.J. In order Director 3307693793 Directors that have since retired P Johnson Non-Executive Johannesburg Sparrow PL In order Sparrow Director 202222312

V Ramsingh Non-Executive Midvaal VB & GH In order Director Ramsingh 40000786 M Bahula Chairperson of the Johannesburg M Bahula In order Board 505507674 Executive Management B Maduka Acting Managing Johannesburg B Maduka In order Director/Company 900879881 Secretary G Cooke Operations Johannesburg Cooke G &VW In order Executive 206747903 R Clements Chief Financial Ekurhuleni R Clements In order Officer 26008339665 H H Fouche Marketing & Johannesburg Fouche BN In order Communications 502487003

Section6: Statement on amounts owed by Government Departments and public entities

Name of entity Amount Owed Status Comments R’000 Gauteng Provincial 30 780 Previous Effort is made to Government collect the money

Section 7: Recommendations and Plans for the next financial year.

Recommendations and plans for 2012/13

 Merger of Johannesburg City Parks and Johannesburg Zoo  Development of open space through capital development projects - 10 Developments  Tree planting in deprived areas - 10 000 Trees  Environmental education programme - 9 000 Learners  Education on food production programme -9 000 Learners  Development of two food gardens in deprived areas  The primarily focus for the entity is on tree production as opposed to the procurement of trees from external providers.  A key focus area for 2012-13, will be the roll out of at least twenty Green Outdoor Gyms throughout the City of Johannesburg.  All future park developments will be designed to incorporate the history, heritage and theme that resonate with the geographic environment. Noteworthy is that the future designs of the parks will include walking trails and cycling trails aimed at creating networks that link communities, business centres, schools and other recreational facilities for ease of access by the communities.

CHAPTER THREE: DIRECTOR’S REPORT AND GOVERNANCE

Section 1: Corporate Governance Statement

The directors are committed to business integrity, transparency and professionalism in all activities. As part of this commitment, the Directors support the highest standards of corporate governance and the ongoing development of best practices.

Johannesburg City Parks confirms and acknowledges its responsibility to total compliance with the Code of Corporate Practices and Conduct laid out in the King III Report on Corporate Governance for South Africa.

The Directors discuss the responsibilities of management in this respect at the Board Meetings and monitor the entity’s compliance with the code on a quarterly basis.

The roles of the Chairperson and managing Director are separate, with responsibilities divided between them so that no individual has unfettered powers of discretion.

The disclosure of Interest registers were kept updated and signed accordingly by those who were in attendance at all Board and Committee Meetings as well as Management Committees.

Of significance in April 2012 was the seating of the Annual General Meeting (AGM) which brought about changes to the composition of the Board.

Section 2: Board of Directors

At the AGM it was resolved and subsequently ratified and confirmed appointments, resignations and retirements of directors of JCP as follows:  The retirement of Mr V Ramsingh was noted, accepted and confirmed.  The retirement of Ms P Johnson Sparrow was noted, accepted and confirmed.  The retirement of Mr M Bahula was noted, accepted and confirmed.  The appointment Adv. M Madumise as a Director and as the Chairperson of the Board was noted, accepted confirmed.  The appointment of Ms M Diaho as a Director of the Company was noted, accepted and confirmed.

 The appointment of Mr M Simelane as a Director of the Company was noted, accepted and confirmed.  The retirement of Mr G Cooke as a Director of the Company was noted, accepted and confirmed.

The following Directors were confirmed as members of the Board of Directors for JCP: 1. Advocate M Madumise 2. Mr K Mokhobo 3. Advocate R Rawat 4. Mr D Westgate 5. Dr G Karim 6. Ms M Dolamo 7. Ms S Bogatsu 8. Dr M Diaho 9. Mr M Simelane

The following independent committee members were confirmed as members of the Audit Committee:

 Mr. A. Kanana  Mr. G. Dunnington  Mr. K. Govender

The induction of Directors was conducted through a formal process. The orientation programme included an introduction programme regarding Johannesburg City Parks and its operations. The Sharemember also provided an induction for the newly appointed directors regarding its operations

The non-executive directors as a collective provide a wide range of experience and professional skills to the board. The non-executive directors further contribute an independent view to matters under consideration. The roles of the Chairperson and Acting Managing Director are separate, with responsibilities divided between them. Board meetings are held quarterly. Additional meetings are convened when necessary to address specific issues.

Members of the Board

Advocate M Madumise, Chairperson of the Board (Appointed 24 April 2012)

Advocate Motsehoa Brenda Madumise is a business woman, running a woman led investment company and is also a legal consultant with over 25 years’ experience in strategic planning, commercialisation, restructuring, transformation and capacity and resource building in both public and private organizations. She has gained valuable business and financial acumen from the Hospitality Industry, ICT, Mining, Health, Public Transport, Financial Services, Agriculture and PPP projects.

Brenda has served as a member of the Minerals and Petroleum’s Development Board and has written numerous legal opinions on behalf of the Board in as far as the interpretation and implementation of the Act were concerned. She has also presented papers on the mining charter in various fora abroad regarding the implications of BEE to the mining industry. Her experience with governance issues also extend to serving on the Appeals board for Medical Schemes where she was appointed chair for two terms, chairing the Johannesburg Hospital Board and as a member of the audit committee at ESETA.

She is an admitted and non- practising advocate, who holds a B.Proc; LLB and Graduate Diploma in International Trade law from the University of the Witwatersrand and an MBA from Bond University. Her career began at the University of the Witwatersrand as an assistant on the street law project, where she gained extensive experience in teaching law, stakeholder relations and policy formulation.

Brenda has edited two books, namely, the situation analysis of South African women, and sexual harassment in the work place. She was a visiting fellow at the United Nation Human Rights Commission. She was chosen to undergo a study tour of the UK, researching their administration of justice framework and Canada’s telecommunications’ Industry.

Currently, she is the chairman of the CATHSSETA board and also serves on the boards of Hospitality Fund (JSE Listed), Transaction Capital, Railway Safety Regulator and SALT Employee Benefits, Heart

and Igagasi FM and Iziko Museums, She is the Vice President of Business Unity South Africa (BUSA). She is an avid reader, a patriot and driven individual.

Mr Maropeng Stephens Bahula Former Chairperson of the Board (Retired 24 April 2012) Qualifications: BSc Chemistry (Wits), MBL (Unisa)

Maropeng is a results oriented executive with an extensive background in building and managing end- to-end integrated value chain operations; incorporating planning, sourcing/procurement, manufacturing, SHEQ, inventory management, capital projects, budgeting, P&L management, logistics/distribution and customer services with direct supplier and customer interfaces and labour relations in highly unionised environments. He mentors and motivates large, diverse groups in national and global environments. He has a successful track record in operations strategy, execution delivery and developing and leveraging human assets in multiple settings and a variety of industries.

He is a change agent that has transformed operations through coaching, recruiting, hiring and process implementation, as well as creating strategies and solutions with solid leadership. He has solid board and corporate governance skills with particular focus on strategy formulation and execution.

Mr Ramakhathela David Mokhobo, Audit Committee Chairperson

Qualifications: BCom (Unibo), BAcc (Wits), CA (SA), ACMA (UK) Ramakhathela has skills and experience in business development, management consulting, and forensic accounting and is a Chartered accountant.

Areas of expertise: Acquisition of business, company startups, hotel and casino industry and implementation of strategic decisions.

Mr Victor Barry Ramsingh, Human Resources Committee Member (Retired 24 April 2012)

Qualifications: MBA, Executive Development Programme, SLC Diploma in Strategy, Leadership and change management, LLB and BA.

Victor is a Human Resources Practitioner by profession.

Mr David Andrew Westgate, Operations Committee

Qualifications: Microsoft Certified Systems Engineer (MCSE), Cisco Certified Network Administration (CCNA), Cisco Certified Professional and Creston Essentials & Intermediate Training.

David is an entrepreneur at heart and has experience in business management, strategy development and is results driven. He has leadership abilities, and enjoys getting involved in all aspects of business.

Adv Rehana Rawat. Social and Ethics Committee Chairperson and Human Resources Committee Member

Qualifications: BA (LLB)

Rehana is an Advocate & Labour Law Specialist of 25 years standing, who has a proliferate number of reported decisions, which emanates from high level ground rating matters which she has adjudicated.

Dr. Gulam Karim. Operations Committee Chairperson

Qualifications: L.R.C. P. L.R.C.S. M.Dip. Ireland - Royal College of Surgeons and Physicians Public &Development Management - Wits Business School, Oliver Tambo Fellowship in Health Management & Economics - University of Cape Town.

Dr. Karim has experience in organisational and change management, financial and human resource management, health management & health economics, procurement and supply management.

He has held the following positions: Private Medical Practitioner from 1974 to 1994, Head of Department of Health in the Provincial Government of Mpumalanga 1994 to 2001, Head of Department of Safety & Security in the Provincial Government of Mpumalanga 2001-2004, KPMG S.A. 2005-2007, and currently Independent Health Consultant for KPMG, Director at Pholela Health

Logistics and GHK Management Services. Board Member of the Gauteng Provincial Community Police Forum Board since 2005 to date.

Ms Modi Dolamo. Audit Committee Member and Social & Ethics Committee Member

Qualifications: B.Compt (Honours); CA (SA)

Ms Dolamo is a qualified Chartered Accountant presently employed by University of Johannesburg as a Senior Lecture in the Finance and Investments Department. Ms Dolamo has spent most of her career life working in Financial Institution and majority of these years was spent in Development Finance Institutions such the Development Bank of South Africa (DBSA) as well as National Empowerment Fund.

Ms Patricia Johnson. Age: 57, Operations Committee Member (Retired 24 April 2012)

Qualifications: Prof. post-grad Corporate Governance.3rd yr. MBA.

Patricia has experience in strategy and risk management, treasury and finance.

Ms Setshego Bogatsu. Human Resources Chairperson

Qualifications: B Com, MBA.

Setshego has experience in finance, procurement and business management.

Mr Musa Joshua Simelane. Operations Committee Member

Qualifications: BSc. Prod Eng.; MSc. in Ind. Tech. (Western Carolina University); FTC (Mech. Eng.)

Work experience:  1981-1987 : Lecturer (Thermodynamics) @ Swaziland College of Technology.  1987-1989 : Vice Principal @ Swaziland College of Technology  1989-1998 : Director @ Skillshare International (a British Development Agency) for the Swaziland office.  1994-1997 : Part Time Lecturer (in Operations Management) @ University of Swaziland  1998-2001 : Regional Projects Manager @ Skillshare International  2009-2012 :NED @ Johannesburg Roads Agency  2001-todate :Director/owner @ Qualipros Management Development Systems.

Dr Mothomang Diaho. Operations Committee member

Founder and Managing Director: Diaho Social Technologies Mothomang is a qualified medical doctor and has worked as a public Heath practitioner for more than 25 years. She developed this interest soon after qualifying at the University of Adelaide, Australia.

The daily challenges faced by communities to access good healthcare are what drives Mothomang. She initially practiced as a medical officer in various clinics and hospitals in Lesotho, Swaziland and South Africa. She subsequently augmented her medical training with postgraduate programmes in public Health and a Masters programme in Business administration at the University of the Witwatersrand, WITS and a programme in Management development at the Harvard Business School.

Three years ago, Mothomang took a decision to support the work she does in Public Health training and development with a post graduate qualification from the Gestalt Institute of Cleveland.

She has worked over these years on issues of HIV/AIDS, Leadership and broader developmental and social justice issues and is a strong advocate for health and wellness.

This interest developed during her leadership roles that include; senior consultant at Health and Development Africa, Abt Associates Inc.; Head of the Accelerated Leadership Programme at SASOL; head of an HIV/AIDS programme at the UNDP and recently, as Head of the Dialogue Programme at the Nelson Mandela Foundation, a position she held since 2006.

She is a guest Lecturer at the Wits School of Public Health for the Masters in Public Health Programme. She has edited and published numerous booklets and papers on matters of leadership, dialogue, and health. Her work in health and wellness reasserts the believe that we have an inherent capacity within ourselves to take charge of our lives.

Mothomang is CEO and co-founder of TEACH South Africa and serves on the boards and committees of various business, Education, health and development-related organisations, including a stint as the first female chair of the St Stithian’s Boys College PTA, board member at JHPIEGO, HRDI and Tshikululu.

Section 3: Board Committees

These committees assist the board in carrying out its responsibilities. The committees provide the board with recommendations and reports which ensure transparency and full disclosure of committee activities. An independent non- executive director serves as a chairperson in each committee.

The following committees existed during the period under review:

 Audit Committee

The Audit Committee is chaired by Mr D R Mokhobo who is the independent non-executive director of the Company. The Committee met held several meetings during the financial year to review matters necessary to fulfill its role.

The Audit Committee which meets regularly comprises of three Independent Members, A Kanana, G Dunnington and K Govender appointed by the Shareholder in addition to the two non-executive directors who sit on the Board. The non–executive directors continue to emphasize the balance of the portfolio. In addition, specific attention was drawn to performance as envisaged in the MFMA.

The Committee has been established, in line with the King Reports recommendations on Corporate Governance, with the goal of deliberating and taking decisions on matters relating to the Company’s Finances, Strategy and policies.

 Human Resources Committee

The Human Resources Committee is chaired by Ms S Bogatsu who is an independent non- executive director of the Company. The Committee has been established with the goal of considering matters relating to the conditions of service and the employer-employee relationship.

 Operations Committee

The Operations Committee is chaired by Dr Karim who is an independent non-executive director of the Company. The Committee has been established to develop and manage the company’s reputation and exposure through service delivery strategy, policy development, SHEQ matters and marketing initiatives. The Committee is also tasked with the role of considering and recommending to the Board on matters relating to Information Technology and Supply Chain Management matters.

 Social and Ethics Committee

The Companies Act 71 of 2008 became effective on the 1st May 2011. The Act requires companies with a public interest score of more than 500 points to establish a Social and Ethics Committee by 30 April 2012.

The Shareholder Unit did an assessment of the NPCs of the City of Johannesburg and it was apparent that Johannesburg City Parks had to appoint a Social and Ethics Committee.

In line with the above the Board of Directors took a decision at its meeting held on the 11th April 2012 to establish Johannesburg City Parks’ Social and Ethics Committee which comprises of both directors and prescribed officers.

The Social and Ethics Committee is Chaired by Adv Rawat who is an independent non-executive director of the Company.

Name Board Audit Operations Human Social and Meeting Committee Committee Resources Ethics Meeting Meeting Committee Committee Meeting Meeting Total number 10 7 5 5 1 of meetings held.

M Madumise n/a n/a n/a 1 n/a (Chairperson)

MS Bahula 10 n/a n/a n/a n/a (Former Chairperson) DR Mokhobo 4 7 n/a n/a n/a

V Ramsingh 1 n/a n/a 1 n/a

D Westgate 8 n/a 5 n/a n/a

R Rawat 9 n/a n/a 5 1

G Karim 9 n/a 5 n/a n/a

M Dolamo 9 6 n/a n/a 1

P Johnson 5 n/a 2 n/a n/a Sparrow

AM Diaho n/a n/a - n/a n/a

M Simelane n/a n/a 1 n/a n/a

S Bogatsu 10 n/a n/a 5 n/a

G Cooke 3 n/a 1 2 n/a (Acting Managing Director)

Section 4: Directors’ Remuneration

The remuneration of Directors is determined by the controlling entity.

1 Name Amount

M Bahula R367 034.50 2 D R Mokhobo R104 160.00 3 V Ramsingh R13 890.00 4 D Westgate R84 330.00 5 S Bogatsu R151 798.00 6 M Dolamo R139 890.00 7 T Johnson Sparrow R37 700.00 8 K Karim R341 318.00 9 R Rawat R159.750.00 10 M Madumise R39 798.00 11 M Simelane R14 880.00 12. M Diaho R14 880.00

INDEPENDENT AUDIT COMMITTEE MEMBERS REMUNERATION Name Designation Amount 1 A Kanana Independent Member 158 720.00 2 G Dunnington Independent Member 37 720.00 29 760.00 3 K Govender Independent Member

Executive Directors

2011/2012 2011/2012 2011/2012 2011/2012 2010/11 R’000 R’000 R’000 R’000 R’000 R’000 Name Travel & Bonus Total Total Salary/Acting Other allowance LL Williamson - - - - 1 230 G Cooke 507 33 - 540 1508 Total 507 33 - 540 2 738

Senior Management 2011/2012

Position 2011/12 2011/12 2011/12 2011/12 2010/11 Salary Travel & Bonus Total Total R’000 Other R’000 R’000 R’000 R Clements Chief Financial Officer 1 184 48 161 1 393 1 299 A Buzo- Human Resources Executive 1 186 Gqoboka G Cooke Operations Executive: 705 47 170 922 - HH Marketing and Communications 916 91 133 1 140 1 073 Fouche Executive P Meyer Operations Executive: 758 16 153 927 1 237 Infrastructure K Molale Executive Assurance Services 773 45 108 926 871 B Njingolo Acting Conservation & 749 110 96 955 856 Infrastructure Executive B Maduka Company Secretary 878 156 126 1 160 953 B Dlakavu Acting Human Resources 643 42 82 767 - Executive Total 6 606 555 1029 8190 7 475

Section 5: Company Secretarial Function

The Company Secretary is responsible for the following areas of JCP’ business:  Corporate Governance  Legislative and Statutory Compliance,  Secretarial,  Legal Advice,  Business Planning,  Contract Management and  Service Monitoring

All directors have access to the advice and services of the Company Secretary who is responsible for ensuring that the Board complies with all applicable procedures, statutes and regulations. The Company Secretary provides support to the non–executive directors, independent audit members as well as the executives.

As a large organisation, the City of Johannesburg continually assesses its performance against pre- determined objectives. Accordingly, the City has decided to re-organise the way it is structured to meet and achieve its strategy and service delivery mandate.

The Mayoral Committee at its meeting held on the 11th November 2011 tasked the City Manager to initiate a process to evaluate the institutional design of the City. As a result of the institutional review process of the COJ, JCP together with the Johannesburg Zoo report into the Community Development sub-cluster, which is part of the Human and Social Development cluster.Board discussions are underway to develop and integrate JCP and Zoo Strategies

A Hawks investigation was conducted during the year under review and a report was presented to the Board in December 2011. This resulted in the formation of a Special Board Committee which was mandated by the Board to interrogate the allegations contained in the report as well as to gather additional information to substantiate the allegations where necessary and give recommendations to the Board. The Hawks has referred the matter to the Special Unit and the final report has not been received in this regard.

Section 6: Risk Management and Internal controls

JCP regards risk management as an essential element of good corporate governance. The Audit Committee, a subcommittee of the Board, is delegated to oversee the risk management process in the company. The committee assists the Board in reviewing the quality, integrity and reliability of the risk management process and reviewing the significant risks facing the company.

The Risk Management Framework provides for the continual review and monitoring of the company‘s key risks. Key risks and uncertainties identified as part of the risk management process undertaken during the year, together with some of the mitigating actions undertaken, are set out herein below:

1. Financial sustainability and funding to meet desired service delivery levels

The management of the risk has ensured JCP remains a going concern despite obvious consequences as a result of financial constraints facing the company. Stringent financial measures followed, combined with a range of cost cutting measures implemented by Departments across the company have ensured that the risk remains inherently, green from the initial residual rating that was the case at the beginning of the financial year. The merger with the JHB Zoo comes with an additional portfolio and accompanying operational challenges. As a response mechanism, management will still pursue innovative financial solutions to ensure it carries out its service delivery mandate.

2. Environmental degradation and impairment

Internally, JCP has implemented a range of risk mitigation measures such waste management schemes to ensure separation at source, limitations on paper usage amongst all departments, and the creation of department that would specifically focus at the issues of urban forestry and greening with the municipality of Johannesburg. Though not totally eliminating the environmental challenges, the programmes implemented and others as carried out by the company, ensures that the risk remains within the acceptable residual amber rating.

3. Safety and security of JCP facilities.

This risk remains key and high in terms of the company’s risk profile. The vast nature and geographic spread of the company‘s portfolio, comprising of designated open spaces, pavements, cemeteries, nature reserves, koppies and other conservation areas presents the company with a huge challenge of ensuring that the community feels safe and secure within these facilities. As already mentioned, contributing factors such as financial constraints, institutional model of the company and resources availability are real issues that the company is faced with in managing the risk.

Initiatives in place include joint operations with JMPD, the SAPS and in some cases, community based groupings. The abovementioned measures implemented have helped to ensure that the risk remains within the acceptable residual amber rating. This is a quantum leap from the initial red rating that was accorded during the risk assessment at the beginning of the financial year.

4. Inadequate Contracts Management

Measures implemented in response to the risk included:

 The appointment of the appropriate official to manage this portfolio.  A due diligence exercise that was completed to determine the status of all current and existing contracts of the company and implement proposals to ensure such key processes are managed effectively, thereby eliminating gaps that were identified previously.  The development of a Contract Management Policy Framework is in progress and this measure will go a long way in terms of ensuring that internal processes and procedures are effectively aligned to best practice

The abovementioned implemented actions and the accompanying review of the procedures have brought much progress anticipated at the time of the risk assessment. The steps undertaken has ensured that the risk rating is reviewed and set at the residual green rating, considering all of the achievements made in addressing the causal factors cited at the time of the risk assessment.

5. Levels of Employee engagement and satisfaction

The engagement of employees on key organizational processes such as the institutional review, employment conditions and general dissemination of information of information is an on-going process. Relevant platforms such as the Local Labour Forum and internal media such as news letters are used by management to remain in touch and also ensure that there is constant communication with the work force. These current controls have even become more relevant during this institutional change and review period that is happening throughout the city. The risk remains with a residual green rating.

6. Possible institutional changes

As envisaged at the beginning of the financial year, this risk has materialized and it is gratifying there has not been adverse impact on the company itself. The current merger with the Joburg Zoo is currently underway and there has been no drastic interruptions to the running and normal operations of both companies. There is constant engagement with employees led internally, from the Managing Director’ office and institutionally from the City Manager’s office. As already mentioned above, the

engagement processes in the form of circulars, meetings and ad hoc briefings throughout has helped to management challenges that often accompany such organizational changes.

The risk ratings remain green and no landscape causal factors are expected that would take this company into the red. As part of the continuous risk monitoring and reporting on the identified risks, any changes will be noted henceforth.

7. IT's environment failure to meet organizational demands and needs

The implementation of the IT Road map strategy is continuing to deal with challenges facing the company. General improvements with regard to hardware equipment, software and key systems have been implemented. The imminent merger with the Joburg Zoo presents new challenges and appropriate steps are undertaken, to ensure transition and alignment is smooth. Improved turn- around times in resolving customer queries have also contributed in terms of quality of service received from the unit. Challenges still remain with regard to connectivity on some areas. Current controls are still maintained and coupled with improvements from new action plans implemented, has helped to maintain the residual amber rating of the risk.

8. Fraud and corruption

Current controls have been maintained. Several improvements around bidding committees have been implemented to enhance accountability and requisite objectivity in the adjudication process. Key personnel and management have undertaken relevant training and such training will be carried to the rest of company to ensure skills gaps are addressed.

The Anonymous Tip off line is still maintained though the number of calls has reduced considerably. As reported in the previous periods, investigation in allegations of corruption and maladministration are still in progress. The process is duly managed from the Managing Director’ office with a view to manage any adverse risk implications that may arise from the due process. The reduced number of incidents and generally, effective financial management controls have assisted to manage causal factors identified initially, and to maintain within the residual amber rating.

9. Employee wellness (influence on service delivery mandate and performance of the company)

Various wellness programmes, such as the Biggest Looser, Wellness day, Flu vaccinations, etc. have been implemented and are carried out as annual programmes within the company. These programmes have been well received by the employees and this is visible from the numbers utilizing the services. The risk remains with a residual green rating.

10. Compliance to Legislation, policies and procedures

Current controls in the form of a checklist, the legal register, internal self- audits, continuous risk assessments etc. undertaken by management helps to maintain the risk within the residual green rating. No new causes have been noted and all the risk will duly be reviewed during the coming risk assessment in the 2012/13 financial year. The risk remains within the residual green rating.

11. Operational Risks

Key operational risks have been identified across all departments, to identify and assess key issues that could impede them from operating optimally, in achieving annual operational objectives. Tracking and monitoring occurs within the risk management framework and procedures, as an overall company strategy and vision, of embedding risk management as part and parcel of daily routine and management of the company business. There have been no major incidents or occurrences during the period under review that have adversely impacted on the operations of the departments.

12. Emergency Preparedness and Contingency Planning

The JCP Disaster management plan has been reviewed and updated following last year’s gap analysis exercise. Emergency drills have been undertaken and this will be carried into the following financial year to embed emergency readiness and awareness amongst the workforce of the company. This is a critical component of the company’s SHE Policy and demonstrates management commitment in walking the talk in terms of customer and employee safety within our work places. With the pending merger of JCP with Joburg Zoo, we will ascertain that the plan responds to the institutional changes and update it accordingly.

13. Risk Financing

Johannesburg City Parks has experienced improved statistics on losses, both in terms of frequency and severity compared to prior years (Refer to Table 1 below)

The majority of claims still emanate from damage to boundary fences surrounding public facilities managed by the company. Second major perils are related to theft of the palisade fence. These are directly connected to the issue of safe guarding and security of our facilities. As highlighted in terms of our risk control activities, adequate security resources in safe guarding and securing of our facilities remains a daunting challenge for the company. The company is however, undertaking several initiatives involving community based formations and other law enforcement agencies such as the JMPD and SAPS in addressing the abovementioned problems.

The premium paid during the financial year 2011/12 is R2 848 599. This is a slight increase compared to the premium paid in the 2010/11 financial year which amounted to R1, 423 319.37 but far lower than R3, 277, 864 paid in 2009/10.

Table 1: claims experience for the past three years Class Description 1st July 2009 – 30June 1st July 2010 – 30 June 1st July 2011 – 30 June 2010 2011 2012

No Gross Loss No Gross Loss No Gross Loss

Assets 105 R3 814 619.00 104 R2 103 995.00 93 R573 012.00 Commercial Crime 9 R50 709.00 0 0.00 0 R0.00 Group Personal Accident 3 R0.00 0 0.00 0 R0.00

Liability 96 R362005.00 154 R333 779.00 106 R53 086.00

EPL* 5 R0.00 1 0.00 1 R0.00

DOL 0 R0.00 0 0.00 0 R0.00

Totals 218 R4 227 333.00 259 R2 437 774.00 200 R626 774.00

Grand Totals 218 R4 227 333.00 259 R2 437 774.00 200 R626 774.00

Note 1. E.PL. Employment Practices Liability Cover 2. D & O Directors and Officers Liability Cover 3. G.P.A. Group Personal Accident Cover

Fraud Risk Management

The anonymous tip-off line independently managed by Deloitte is still operational and has experienced a huge reduction in terms of calls received in the past year. The company continues to pay attention to the risk of fraud and/or any incidents reported or suspected by ensuring that these are investigated and reported accordingly. The Fraud prevention strategy is reviewed annually to ensure that it remains relevant to changes affecting the company.

Compliance Risk Management

In alignment to the company’s risk management philosophy and framework, the company undertook a risk assessment in respect of the Consumer Protection Act. The purpose of the exercise was to identify any potential legal risks that the Act could pose for JCP and ensure that reasonable mitigation measures are put in place to avoid any adverse impacts.

Section 6: Risk Management and Internal controls

14. Financial sustainability and funding to meet desired service delivery levels

15. Environmental degradation and impairment

External influences arising from a range of causal factors such as littering, vagrancy, illegal dumping in designated open spaces and broadly, environmental conditions such as challenges posed by the reality of acid mine drainage remains realistic challenges facing both JCP as an entity as well as the CoJ as the parent municipality. JCP is also faced with a challenge on the interdependency on other role players such the JMPD; JRA etc. in terms of by-law enforcement. Internally, JCP has implemented a range of risk mitigation measures such waste management schemes to ensure separation at source, limitations on paper usage amongst all departments, and the creation of department that would specifically focus at the issues of urban forestry and greening with the municipality of Johannesburg. Though not totally eliminating the environmental challenges, the programmes implemented and others as carried out by the company, ensures that the risk remains within the acceptable residual amber rating.

16. Safety and security of JCP facilities.

17. Inadequate Contracts Management

Measures implemented in response to the risk included:

18. Levels of Employee engagement and satisfaction

19. Possible institutional changes

20. IT's environment failure to meet organizational demands and needs

Challenges still remain with regard to connectivity on some areas. Current controls are still maintained and coupled with improvements from new action plans implemented, has helped to maintain the residual amber rating of the risk.

21. Fraud and corruption

22. Employee wellness (influence on service delivery mandate and performance of the company)

23. Compliance to Legislation, policies and procedures

24. Operational Risks

25. Emergency Preparedness and Contingency Planning

26. Risk Financing

Johannesburg City Parks has experienced improved statistics on losses, both in terms of frequency and severity compared to prior years (Refer to Table 1 below)

Table 1: claims experience for the past three years Class Description 1st July 2009 – 30June 1st July 2010 – 30 June 1st July 2011 – 30 June 2010 2011 2012

No Gross Loss No Gross Loss No Gross Loss

Assets 105 R3 814 619.00 104 R2 103 995.00 93 R573 012.00 Commercial Crime 9 R50 709.00 0 0.00 0 R0.00 Group Personal Accident 3 R0.00 0 0.00 0 R0.00

Liability 96 R362005.00 154 R333 779.00 106 R53 086.00

EPL* 5 R0.00 1 0.00 1 R0.00

DOL 0 R0.00 0 0.00 0 R0.00

Totals 218 R4 227 333.00 259 R2 437 774.00 200 R626 774.00

Grand Totals 218 R4 227 333.00 259 R2 437 774.00 200 R626 774.00

Note 1. E.PL. Employment Practices Liability Cover 2. D & O Directors and Officers Liability Cover 3. G.P.A. Group Personal Accident Cover

Fraud Risk Management

Compliance Risk Management

Risk Control

During the period under review, over 50 percent of the company’s flagship facilities were surveyed. During the inspections, HIRA approach was adopted which constitutes hazard identification and risks assessment. The common inherent hazards and associated risks included, environmental, disaster, security and occupational health hazards.

Section 7: Internal Audit Function

The role, purpose and responsibility of the internal audit function are stipulated in the Internal Audit Charter which is in line with the requirements of the Institute of Internal Auditors. The function has a dual reporting line, that is, administratively to the Managing Director and functionally to the Audit Committee, thus giving independence to the function.

A risk based internal audit plan was developed, deriving from a formal enterprise – wide risk assessment. The plan was duly approved by the Audit Committee as is required by Section 165 (2) (a) of the Local Government Municipal Finance Management Act, No 56 of 2003. The main purpose of the Plan was to ensure that Internal Audit assisted the company in meeting its objectives by reviewing the high risk areas, systems and processes.

In addition to the implementation of the operational plan, internal audit closely monitored the implementation of management action plans addressing the findings raised in the previous financial year’ Management letter by the Auditor General including internal audit findings. Management has satisfactorily closed the majority of the findings, thus ensuring a sound internal control environment.

Audit Opinion on Internal Control Environment

The overall opinion, based upon, and limited to the work performed during the year, is that an adequate level of assurance can be given that there is a fairly sound system of internal control, designed to meet the Company’s objectives. We therefore consider that reliance can continue to be placed on the internal controls within the company.

Section 8: Response to the Auditor-General Report

Johannesburg City Parks – Summary of AG Management Letter - Year Ended 30 June 2012 Finding No. Description AG Recommendation Management response 1. Non compliance with supply chain regulations Management should enhance the controls in In all cases referred to, reasons for deviating from the competitive place to ensure that all policies and regulations bidding process were recorded and the deviation were tabled at are complied with regards to supply chain Exco and the JCP Board of directors and has also been reflected in management regulations the notes to the AFS of JCP in terms of compliance with section 36 (2) of the JCP SCM policy. 2. Non-compliance with SCM regulation 36 for deviations Management should ensure that deviations are In all cases referred to, reasons for deviating from the competitive guided by the framework that was approved by bidding process were recorded and the deviation were tabled at council for the CJMM group is implemented to Exco and the JCP Board of directors and has also been reflected in guide the decisions of the accounting officer the notes to the AFS of JCP in terms of compliance with section 36 when applying regulation 36 of the supply (2) of the JCP SCM policy. chain regulations 3. The winning provider in service of the state Management should comply with MFMA We agree with the finding. With respect to Ntuma Civil and Supply chain regulation in evaluating tender Solutions cc, management and were under the impression that submissions from suppliers. the exemption in terms of regulation 44, which allowed the award of tenders to employees in the service of the State provided they made a declaration to this effect, was still in force. We hereby advise that all the accredited suppliers listed above have been made inactive on our financial system and no awards to state employees, will be made in future. Management will endeavour to use alternative means to identify possible transgressors. 4. Incorrect calculation of leave Management should apply the current It has always been JCP’s practice to encourage employees to take approved annual leave policy to manage leave their annual leave and there are 561 employees out of a total and record all leave due to its employees at the number of 1546 employees whose accrued leave balance is end of the financial year in accordance with the currently greater than the policy aspiration. policy. In line with the Institutional Review, JCP reviewed its policy with effect from 01 July 2012 to align it with that of the City of Johannesburg which allows an accrual of 48 annual leave days. 79

5. No impairment for long outstanding receivables Management should perform an assessment of Management agrees with the finding and has made an adjustment the recoverability of its accounts receivable to the provision for doubtful debts in respect of the DRT debt and impair amounts that have any indicators of owing. The City of Johannesburg as the parent municipality has impairment in line with its policy. The evidence been notified of the default and efforts are still underway to of this assessment should be recorded and filed recover the monies owing. for record and evidence purposes 6. Assets recognized at Zero cost during their acquisition Management should perform adequate The assets referred to were assets that were acquired in 2001 monitoring and supervision to ensure that staff when the institutional review / re-structuring of the CJMM took involved in financial information preparation place at zero cost. These assets have been consistently and adheres to all applicable laws and regulations consecutively reflected and disclosed as such since inception. and ensure compliance with GRAP in These assets are still listed, reflected and monitored on the fixed preparation of such information. Management asset register as such for control purposes even though they are should record all assets acquired at no cost at appearing as zero balances. The fixed asset controller is fully their fair value as at the date of acquisition as aware of these assets. required by GRAP 17. We hereby advise that all these assets are included and assessed for their residual values annually i.t.o the GRAP standards and are adjusted to reflect as such accordingly. The above clearly indicates that management has fulfilled its responsibilities relative to monitoring and supervision. 7. Depreciation and accumulated depreciation amounts incorrectly calculated Management should investigate the extent of We agree with the finding above. We wish to advise that the the error, make the necessary adjustments and monthly depreciation calculation is automatically calculated by ensure that this system error is corrected. The the Great Plains financial system and is correct. The functionality system used to maintain the fixed asset register of the Great Plains financial system does not allow us the option should support compliance with the standards to select and calculate depreciation from the date that the asset is of GRAP. placed in service. The “full month” option in terms of the GP manual is used for the basis of the depreciation calculation, which means that all assets that are placed in service at any time during the month will begin depreciating on the first day of the following month. This is consistent with our application in terms of depreciation calculations in the past and is applicable to all assets that are appearing on the asset register. Based on the above, we confirm that there is no miscalculation / error of the depreciation calculations and depreciation as reflected in the books of account is correct. This is further supported by the assessment that is conducted on all assets in 80

terms of compliance with GRAP for residual values and impairment adjustments. Management are comfortable that the method of calculating depreciation as per the above does not materially affect the value of assets as shown in the annual financial statements and are reluctant to change the standard non - customised software modules currently in use at JCP. Management will keep track of the possible errors on additions outside of the fixed asset register and make the necessary adjustments to the general ledger. 8. Overspending of the approved capital budget Management should ensure that controls in Management reviews capital and operational expenditure reports place are strengthened to identify any possible on a monthly basis. There was a favourable balance of R3 637 or imminent overspending on the approved 206.62 of the capex budget available at the end of May 2012 and a budget. Any spending that exceeds the copy of the May 2012 capex report has been attached for ease of approved budget should be approved by the reference. relevant official at the City of Johannesburg The favourable balance at the end of May 2012 was nullified due which is the parent municipality. This will to journal entries that were passed in the month of June 2012. ensure compliance with the applicable laws Upon review of the June 2012 general ledger by the Finance and regulations. department, certain invoices were journalised from repairs and maintenance to capital expenditure leasehold improvements. These adjustments were as a result of a misinterpretation by the facilities department between what constitutes capital expenditure versus repairs and maintenance in respect of leasehold improvements. We have stringent controls in place to monitor, review and control the operational and capital expenditure budget limits through the Workplace / Commitment / Order system. No over expenditure is permitted in terms of the controls that are activated within the system. However, the over expenditure that is currently reflected in the books of account was the result of the reallocation journals mentioned above. A report of the over expenditure will be tabled at the mayoral committee in line with SHU timelines. 9. Assets incorrectly classified as repairs and maintenance Management should review all invoices and Bins goods received, apply its policies and the The steel lockable diamond mesh swivel bins are installed in the standards of GRAP to ensure that they are various parks that JCP have been mandated by the CoJ to classified correctly in the financial records. maintain. The parks do not belong to JCP and are the property of 81

CoJ. Bins are subject to continuous vandalism and abuse of the bins takes place in various forms. The life cycle of a bin is directly linked to its location and usually does not exceed 12 months. Various pictures have been attached to highlight the above for ease of reference. Management is of the opinion that expensing the bins above is appropriate given the nature of the business.

10. No evidence of review of the fixed asset policy by the entity Management should ensure that the entity’s Tools fixed asset policy is reviewed and updated for Due to the nature of JCP’s business, the tools referred to above are its appropriateness and effectiveness and used daily and in most cases their life expectancy is limited to a alignment with the standards of GRAP. period of twelve months or less. It is also not cost effective to repair these tools. We would also like to point out that certain tools are assessed by management to be capitalized, are accounted for accordingly. Management is of the opinion that expensing the tools above is appropriate given the nature of the business. Various management controls are in place whereby these jacks, and other tools that are not capitalized, are monitored and controlled in order to reduce the risk of theft / abuse associated thereto. We further wish to advise that assets are continuously monitored and verified by the fixed asset monitoring department, whose primary duties is to verify and account for the entity’s fixed assets. The plant manager performs an independent verification of plant equipment to assess the residual value in terms of the expected useful life of plant equipment. The fixed asset controller and the IT manager conduct a similar exercise for the remaining fixed assets. This includes the assessment of all assets in terms of GRAP 21-Impairments of assets and all other necessary GRAP standards and the necessary accounting and financial adjustments. Generally speaking, JCP policies are updated on a need to change basis. The above accounting treatment in respect of jacks and loose tools is in line with GRAP and the JCP policy. However, to avoid any confusion, the fixed asset policy will be updated to 82

highlight the appropriate treatment of tools and jacks.

11. Poor safeguard of the entity’s assets Management should ensure that existing Management would like to advise that fixed assets are monitored controls regarding the safeguarding of assets and verified on a continuous basis by two officials in the fixed are implemented and enforced to ensure that asset monitoring department, whose sole purpose is to safeguard they operate effectively throughout the period. JCP’s fixed assets. Management is satisfied with the current level In instances where there is evidence of of stringent control and oversight measures that have been employee negligence in loss of assets, implemented and are functional in terms of the safeguarding of management should take steps to recover the entity’s assets. monies lost from the employee concerned. The stewardship of all 11 000 fixed assets at JCP are signed for by the relevant asset custodians as evidenced by asset custody forms. Every asset is bar-coded. Furthermore, there are security guards present at each depot that are employed to safeguard the assets of that depot. However, there are isolated instances where assets are lost or stolen and these instances are rigorously investigated. In these cases the depot manager is responsible to determine, after an initial report, whether there was negligence or not. Where assets are stolen, they are reported to the South African Police and affidavits provided to them. In total there were 77 insurance claims for lost assets during the year, of which a total of 8 (6 referred to above) were repudiated by the insurance company. A re-review of the 8 repudiated claims will be undertaken. 12. Annual leave taken before approval Management should put controls in place to JCP leave policy requires that the senior personnel responsible ensure that leave is approved before it is taken. for approving leave at the relevant department must approve the leave before such leave is taken and controls are in place to ensure compliance with this policy. Five of the leave cases listed above occurred due to personal/domestic/emergency / unforeseen circumstances experienced by the employee, resulting in the employee not being in a position to complete the leave form in advance. Management controls over time and attendance resulted in the identification and rectification instances where the relevant leave did not meet the requirements of the JCP HR policy, as highlighted in 2 of the instances detailed below with the subsequent 83

amendment and approval of the leave form by management. In line with the recommendation above, the leave form will be amended to accommodate the reasons for the post approval of leave taken. 13. Supplier did not meet the minimum specification criteria Management should ensure compliance with The above two suppliers did meet the minimum specification supply chain management regulations when requirements and did provide proof of municipal rates payments evaluating tenders. and the COID registration as per bid invitation documents as reflected in the attached Bid Evaluation Committee report. Management is retrieving the relevant documentation from Metrofile. 14. Non compliance with Grap 13-Leases Management should ensure that the financial We agree with the finding. statements are prepared in accordance with The difference is not significantly material and does not applicable GRAP standards to the entity and materially affect or distort the presentation and disclosure of the review to ensure that there is compliance to finance leases as reflected in the annual financial statements of the standards during the preparation of the JCP. financial statements 15. Overstatement of bad debts written off Management should enhance controls We agree with the finding and the correcting adjustments have surrounding the recognition and reversal of been processed in the AFS. The set up parameters in the financial revenue to ensure that it is accurately system automatically posted the transaction to bad debts written recorded. off instead of the sales account. 16. Employee contracts no submitted Management should ensure that all new The majority of employees on this audit list belong to a category employees sign a contract of employment that of transferred employees. JCP inherited the employees sets out the terms and conditions of transferred from the City of Johannesburg via section 197 of the employment as required by the policy and the Labour Relations Act and in this instance an agreement of sale BCEA. and the original sign-on document signed between the employee and employer were regarded as a binding employment contract. A copy of the original sign-on document has been attached for ease of reference.

Section 9: Corporate Ethics and Organisational Integrity

JCP places a high premium on sound ethical behaviour and integrity, which should be beyond reproach. To achieve this, the Board adopted a Code of Conduct and a Charter encapsulating sound governance and an ethical approach to the way its directors, officers and employees conduct business internally and externally. This Charter subscribes to the principles set out in the King III Report.

In addition to the above, the organisation is structured in a manner that sees clear and material observance of the Municipal Structures Act, Municipal Systems Act and Municipal Financial Management Act, as well as other pertinent legislation including the Companies Act, Labour Relations Act, Occupational Health and Safety Act and financial/tax legislation.

From the outset of the Company’s existence, there has been a system of delegated authority in place, which has a set framework for the organisational structure and executive implementation supported by the appropriate committee structures.

All the above support the regular assessments of governance and legislative compliance reflecting a positive status in relation to ethics and organisational integrity.

Section 10: Sustainability Report

JCP trades in a solvent position and it is not anticipated that this will change. As is required by the MFMA, JCP has an approved budget and receives regular subsidy payments from the CoJ. The Board of Directors, and specifically the Audit and Risk Committee, consider on a regular basis the aspects of trading as a going concern and subject to the regular receipt of the C.O.J subsidy do not foresee any risks to the continued sustainability of the organisation.

Human development is a high priority within the organisation and developmental training is focussed at not only enhancing productivity and service delivery, but also the empowerment and skilling of employees and community members through the EPWP programmes. The employees of JCP are regarded as an extremely valuable asset and are treated in a caring manner.

By its very nature, JCP is focused on the social and environmental issues, which are paramount for the development of a large metropolis and the approval of its inhabitants’ wellbeing. The development of parks and nature areas, especially in the previously disadvantaged areas, receives specific priority. It is acknowledged that taking care of ancestors and ensuring a suitable final resting place for them, is

especially important to many of the cultures represented in the community and JCP is ensuring that sufficient burial space is provided both in the immediate and long term.

Stakeholder Liaison

The Stakeholder Liaison unit had 386 engagements with Councillors for the 2011/12 financial year is an increase on the 278 of the previous year. The internal and external stakeholders include engagements/meetings with Community Based Organisations, Regional Service Delivery Meetings, Section 79 meetings and JCP departments.

Information Technology

The Knowledge Management department continues to make progress along with the IT Department in terms of implementing the IT Strategy approved by the Board in 2008. IT users at JCP continue to experience a high level of service from the IT department. The Knowledge Management department’ focus during the last quarter under review was to assist management to populate their scorecards including capex projects so that the scorecard review process can once again be done electronically. Two successful IT audits were completed during the year. The Board approved strategy is almost fully implemented and an updated strategy incorporating the Zoo will be developed.

Section 11: Corporate Social Responsibility Report

The following key initiatives were effected through the use of sponsors and donors in an effort to optimise the potential of our facilities and our involvement in providing benefits to other needy organisations.

 Launch of Nelson Mandela Day African Rainbow Minerals (ARM) generously donated 250 trees. ARM partnered with Johannesburg City Parks planting the first 100 trees to launch the Nelson Mandela Day Programme at River Park in Alexandra. Learners, teachers and the community of Alexandra joined hands in planting the 100 trees to celebrate Nelson Mandela's birthday.

 Siyakhona Clean-up Campaign in Marlboro, Alexandra Johannesburg City Parks (Region E) partnered with Corporative Governance and Traditional Affairs to clean-up all zoned public open spaces which comprised of the following parks: River Park, Juskei Phase 1, 2 & 3, Vasco Park and also to assist with the clean-up of litter/debris along the Juskei River. The initial clean-up campaign integrated a pest control model, which was also introduced regarding rodent eradication within Alexandra. 86

 Ithuthe Primary School Food Garden Project with 94.7 Stereo City Parks was approached by Bongani Nxumalo from the Rude awakening Show (94.7 Stereo) to assist with trees and the development of a food garden at the Ithute Primary school in Alexandra. Old Mutual contributed R10 thousand in kind towards the initiative.

 Engen Food Garden launch at Cosmos City Primary School JCP developed 15 food gardens in various schools throughout the City. This was sponsored by Engen. JCP hosted a launch event at the Cosmos City Primary School to highlight the importance of caring for the environment and the importance of good eating habits.

 Inkwenkwezi Food Garden sponsored by Coca-Cola and Total City Parks partnered with Total and Coca-Cola in unveiling a food garden at Inkwenkwezi Primary School in Pimville Soweto to develop a food garden. The food gardens will be used to supplement the food programme in the school and also assist in reinforcing environmental education at the school.

 BMW Financial services launches Food gardens in Rabie Ridge Midrand BMW Group in partnership with JCP donates R150 thousand for the development of food gardens at Kanana Primary School and the Kanana Community Centre which forms part of the Midrand Child Welfare

 Youth Going Green: St John’s College & Realogile High School Johannesburg City Parks in partnership with St John’s College in launching the newly revamped Alexandra Childcare Centre and the fruit, vegetable and herb garden makeover in Realogile High School, Alexandra. The project was supported by the Church of Jesus Christ of Latter Day Saints, Vincent Tshabalala Education Trust and JCP Mavimbela Foundation. The aim is to engage learners in highlighting the importance of addressing greening disparities and promoting a clean, safe environment in areas of Johannesburg.

 94.7 Highveld Stereo Launches a Food Garden at the Abraham Kriel Orphanage Home Project initiated by Bongani Nxumalo from 94.7 Highveld Stereo to educate communities on growing their own vegetables. City Parks provided a lawnmower, brush-cutter, promotional material, compost, fruit trees and seedlings for the vegetable garden. The costs for the greening was funded from donations by BMW Finance.

CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT

Every company's unique culture, values, work practices and processes are what transform visions and ideas into reality. And the space in which a company resides is integral to fostering a creative and dynamic culture, and in turn, to attracting talented and committed employees to drive the employer brand. The Human Resources department supported the company in its effort to establish the values, culture and practices in order to make it A world class African green environment and cemetery management company.

Section 1: Human Resource Management

Trends on Personnel Expenditure for the Period 2009 to 2012 The following tables indicate these trends.

Expenditure on salaries over the last 3 years

2011/12 2010/11 2009/10

R’ m R’ m R’ m Total expenditure 556.1 587.5 515.8

Total payroll expenditure 342.6 327.2 297.2

Total payroll expenditure over the last 3 years as a % of the total budget

2011/12 2010/11 2009/10

Payroll expenditure as a % of total 62% 56% 58% budget

Employee Age Analysis

The majority of the Company’s workforce falls in the age categories 51-60 and 41–50. These two categories represent approximately 70% of the Company’s workforce. The Company is cognisant of the possible implications of the age profile on productivity and service delivery challenges, and continues to monitor the impact on the organisation. The following table illustrates the age composition of JCP’ employees.

Age analysis of the total workforce

AGE NO OF OPERATIONS NO OF SUPPORT COMPANY COMPANY OPERATIONS PERCENTAGE SUPPORT SERV SERV TOTALS PERCENTAGE EMPLOYEES EMPLOYEES PERCENTAGE 61-70 87 6.21 8 4.52 95 6.02 51-60 592 42.23 31 17.51 623 39.46 41-50 433 30.88 47 26.55 480 30.40 31-40 150 10.70 56 31.64 206 13.05 21-30 137 9.77 35 19.77 172 10.89 15-20 3 0.00 0 0.00 3 0.19 TOTAL 1 378 100 170 100 1 579 100

Staff Breakdown Number of staff per function as at 30 June 2012

DEPARTMENT DEPOT TOTAL Ops: Parks & Cemeteries Parks Executive 2 Parks Regions A-G 857 Cemeteries 128 Special Projects Head Office 7 Special Projects Technical Training & JCP Academy 96 Urban Forestry & Nurseries 46 Ops:Environ & Infrastructure Ops Executive: Environment and 3 Infrastructure Facilities Management 124 SHEQ & OSIM 11 Project Management & Beautification 39 Environmental Conservation 78 Marketing & Communication Marketing & Communication 74 Human Resources Human Resources 26 Finance Finance (including Cemeteries) 56 Assurance Services Audit & Risk 9 MD Office MD 2 New Business Development External Services 12 Company Secretary Company Secretary 9 TOTAL 1 579

Section 2: Building a Diverse Workforce (Employment Equity)

In line with JCP’ drive to create a diverse workforce which is truly representative of the demographics of Gauteng and one which continues to empower marginal groups in the workplace. The following table reflects the company’ workforce profile as at 30 June 2012:

JCP Workforce Profile

Male Male Male Male Female Female Female Female TOTAL African Coloure India White African Coloure Indian White d n d Top Mgmt 0 0 0 0 0 0 0 0 0 Snr Mgmt 2 0 0 2 1 0 0 0 5 Professional 17 6 2 8 9 1 2 4 49 Skilled/Technic 68 6 4 20 60 8 7 7 180 al Semi Skilled 510 13 2 6 93 5 1 5 635 Unskilled 536 3 1 0 36 1 0 0 577 Permanent 1 183 28 9 36 199 15 10 16 1 446 Non Permanent 63 8 2 1 56 3 0 0 133 (interns & Apprentices) TOTAL 1 196 36 11 37 255 18 10 16 1 579

Employment of People with Disabilities

The organisation prioritized the employment of differently abled persons during this financial year. The percentage of differently abled persons as a percentage of the total workforce has increased from 1.04% to 1.13%.

Section 3: Skills Development and Training

Training planned and delivered during the period under review was aligned to the company’s overall objectives of improved service delivery and stakeholder satisfaction. Training needs were identified through the departmental training needs analysis exercise and implemented according to the Workplace Skills Plan submitted to the Agriculture Sector Education and Training Authority (AgriSETA).

The focus for the period under review was on various training programmes which included Adult Basic Education and Training (ABET), Powerspeaking, Electrical Phase Installation, AARTO Traffic Fine and Financial Literacy Awareness Training. Other training initiatives included training interventions which were not covered during the implementation of 2010/11 Workplace Skills Plan, which were aimed at improving skills such as financial literacy, confidence speaking, electrical and traffic legislative management skills.

Human Resources Development Projects

In contributing towards the reduction of the skills shortage in South Africa, Johannesburg City Parks has introduced the Apprenticeship and Internship Programmes as indicated below.

Apprenticeship Programme

An apprentice plumber had successfully completed his trade test on 11th November 2011 and had been declared and bestowed as an Artisan. This brings the total to three qualified Artisans.

The following table shows successful beneficiaries of the Apprenticeship Programme in various trades and equity categories. Trade Black Coloured Indian White Total Total M F M F M F M F M F Craft & Related Plumbing 1 0 0 0 1 0 0 0 2 0 2 Trade Carpentry 1 0 0 0 0 0 0 0 1 0 1 Non-Permanent 2 0 0 0 1 0 0 0 3 0 3 Total 2 0 0 0 1 0 0 0 3 0 3

All ten (10) apprentices have successfully completed the institutional training on phase two (2) and phase three (3).

The following table shows the beneficiaries of the Apprenticeship Programme in various trades and equity categories who are awaiting for the Trade Test.

Occupational Trade Black Coloured Indian White Total Total Category M F M F M F M F M F

Craft & Related Electrical 1 1 0 0 0 0 0 0 1 1 2 Trade Engineer Welding 1 2 1 0 0 0 0 0 2 2 4 Fitter & Turner 2 2 0 0 0 0 0 0 2 2 4 Non-Permanent 4 5 1 0 0 0 0 0 5 5 10 Total 4 5 1 0 0 0 0 0 5 5 10

Internship Programme

JCP Interns

AgriSETA had once again assisted with funding by means of discretionary grants to implement the Internship Programme in the organisation. This is a unique programme that focuses mainly on imparting the Information, Communication and Technology (ICT) knowledge and skills to the unemployed youth graduates. Five interns completed this programme during the financial year under review.

Compliance to the implementation of the programme was adhered to and among others was site visit meetings conducted by the Learning and Development officials to the user departments, particularly beneficiaries and mentors. The implementation of this programme has had a positive impact by means of efficient and effective services rendered by the Information Technology (IT) unit. The programme served as a good learning platform where knowledge and skills were imparted and most of the Interns were able to work on their own with less or no supervision.

City Of Johannesburg Internship Programme

The City of Johannesburg had mandated various Municipal Owned Entities (MOE’s) and its departments through the Youth Directorate Unit to participate in the Internship Programme in various disciplines for nine months which started on 09 August 2011 to 30 April 2012. As a result, five interns were allocated to JCP from 10th August 2011 to be exposed in various departments namely, Human Resources, Finance, IT and SHERQ. This programme assisted inexperienced and unemployed graduates with the opportunity to gain workplace exposure and experience which will enhance their employment opportunities elsewhere.

Learnership Programme

Employed (18.1) The programme is competency based and learners attended lectures once a week and learners had to compile a portfolio of evidence in order to demonstrate an understanding of each learning outcomes or unit standards. On successful completion of the programme, learners will be issued with a nationally recognised competency certificate.

Below is a breakdown of Horticulture NQF Level 4 beneficiaries in terms of the occupational level, gender and race. Occupation Level Black Coloured Indian White Total Total M F M F M F M F M F

Middle Management 3 1 1 1 0 0 0 0 4 2 6

Junior Management 0 2 0 0 0 1 0 0 0 3 3

Semiskilled 1 0 0 0 0 0 0 0 1 0 1

Unskilled 1 0 0 0 0 0 0 0 1 0 1

Permanent 5 3 1 1 0 1 0 0 6 5 11 Total 5 3 1 1 0 1 0 0 6 5 11

Unemployed (18.2)

We are very proud to report that JCP served as the host employer, lead employer and accredited service provider for the implementation of this non-SETA sponsored Learnership Programme in General Education & Training Certificate: Horticulture, NQF Level 1. Thirty learners completed this programme.

Workplace Experience Learning Programme

Another learning programme known as Workplace Experience was officially introduced for the first time at JCP. This programme is co-funded by JCP and AgriSETA which is aimed at capacitating inexperienced and unemployed graduates with the necessary knowledge and skills. The beneficiaries of this programme have been placed in the Facilities Management department based at the Springfield depot. The implementation of this programme will contribute to the Sector Skills Plan (SSP). Two learners completed this programme.

Adult Basic Education and Training (ABET)

A total of twenty four learners continued from the group that started with ABET classes in the previous financial year.

The following table shows the beneficiaries of the ABET Programme in various equity categories for the current quarter under review.

Examinations took place in November 2012 on various dates and an average pass rate of 56% was achieved in all levels. ABET classes for the 2012 academic year resumed on 06 February 2012 with new and existing learners. A total of forty (40) learners were registered for different levels. This intake was informed by the Workplace Skills Plan 2011/12.

The following table shows the beneficiaries of the ABET Programme in various occupational levels, race, gender and age categories.

The following table shows the beneficiaries of the ABET Programme in various occupational levels, race, gender and age categories. Occupational Black Coloured Indian White Total Age Category Level M F M F M F M F M F <35 35-55 55> Craft & Related 1 0 0 0 0 0 0 0 1 0 0 1 0 Semi-skilled 8 7 0 0 0 0 0 0 8 7 0 11 4 Unskilled 17 7 0 0 0 0 0 0 17 7 0 13 11 Permanent 26 14 0 0 0 0 0 0 26 14 0 25 15 Non- 0 0 0 0 0 0 0 0 0 0 0 0 0 Permanent Total 26 14 0 0 0 0 0 0 26 14 0 25 15

ABET Level Four (4): Communication in English

For the first time Johannesburg City Parks had external examinations for ABET Level 4 learners who wrote in March 2012. ABET Level Four (4) is equivalent to NQF Level 1 (National Qualifications Framework) and is an exit level of ABET Programmes. The ABET Level 4 examinations was assessed, moderated and verified by Independence Examination Board (IEB).

History was made for the first time when 87, 5% pass rate was achieved for the first intake of ABET Level 4: NQF Level 1 (Communication in English Level 4). The examination took place in March 2012 and the official results have been released and confirmed by the Independent Examination Body (IEB).

ABET classes for level one 1 to three 3 as well as new level four (4) intakes continue and will start the final examinations when they are deemed to be ready for the examination. The examination takes place in June /July and November of each year.

Grants Mandatory grants The company received a total amount of R1, 038,314.28 in respect of a mandatory grant for the annual training report 2010/11 and implementation of WSP 2011/12.

Discretionary Grants The consultation process with user departments took place to identify critical training needs for organisational capabilities. This process enabled the Human Resource department to apply for discretionary grants during the current AgriSETA discretionary grants window period. The training needs were received, consolidated and application forms were submitted to the SETA by the end of February 2012. During the discretionary grant window period applications were submitted to AgriSETA and the following applications were approved.

Below is a breakdown of applications made and the approval status quo.

Learning N0. Of Status N0. of Total grant Programme Beneficiaries beneficiaries approved applied approved Adult Basic Education Sixty (60) Approved Twelve (12) R46,320.00 and Training (ABET) Bursaries Eight (8) Approved Three (3) R99,000.00 Apprenticeship Twelve (12) Approved Six (6) R112,860.00 Programme Total of applications Twenty One R258,180.00 (21) Legal contracts of all approved learning programmes have been signed by the Legal Department and submitted to AgriSETA for implementation.

Learning Programme N0. Of Beneficiaries approved Total grant approved Apprenticeship Programme Seven (7) R 263,340.00 Learnership Programme Fifteen (15) R 247,500.00 Bursar 1 R 33,000.00

AgriSETA Ministerial Excellence Awards

During the AgriSETA annual general meeting and conference held on 14-15 September 2011, Johannesburg City Parks scooped a gold award and prize money worth R20, 000.00 in the category of a Project that trained and employed 50% and more learners.

National Treasury Minimum Competence Levels

In compliance with the National Treasury Minimum Competence Regulations, seven (7) unit standards were presented to the designated officials as shown below.

Unit Standard Unit Standards Description N0.of No. officials attended 116353 Participate in the design and implementation of municipal supply 6 chain management 119353 Plan and implement public private partnerships for municipal 6 service delivery 116348 Conduct stakeholder consultation around municipality Financial 1 Programmes. 116339 Apply Risk Management in South African Municipalities 4 116343 Apply the principles of ethics in a Municipality Environment. 2 116361 Interpret SA legislation and policy affecting municipal financial 1 management 119334 Discuss selected legislative regulatory framework governing the 3 public sector management and administrative environment.

Section 4: Organisational Development and Performance Management

Organisational Design

Due to the institutional review process which is currently underway the organizational design and job definition project has been put on hold.

Performance Management

The focus is on performance from the individual employee‘s perspective, both in terms of the individual having their performance managed and also from the perspective of line managers managing the performance of their reportees. JCP monitors organizational performance on a quarterly basis using a balanced scorecard as a measurement tool. This is done in line with the requirements of auditing of performance management information.

Section 5: Quality of Work life Strategy

The Quality of work life programme is a standardised framework to strategically position health and wellness in JCP as a management responsibility with an underlying undertone for every employee to take self-responsibility and ownership for their health and wellness. Very pertinent to note is that employee wellness and health is not managed in isolation of the business but as an integral part of defined organisational and business drivers such as good corporate governance, labour productivity, sick absenteeism and cost-effectiveness of health and related services.

The mounting costs of maintaining unhealthy employees, coupled with the expense and disruption associated with staff turnover, has lead JCP to consider implementing a workplace quality of work life promotion strategy as it believes it to be crucial to its investment in the organization’s long-term success. It is well documented that the workplace environment has a powerful effect on the health of employees and that this directly impacts their level of job satisfaction and the way in which they engage with the company and their job. The Quality of work life programme consists of the following pillars or sub-programmes:

 HIV/AIDS management  Health & productivity management  Wellness management

Section 5.1: HIV and AIDS in the Workplace

The objective of the HIV and AIDS as a sub programme under Quality of work life programmme at JCP is to ensure that the following interventions are maintained:

 Prevention  Treatment, care and support  Human rights and access to justice  Research and monitoring

Section 5.2: Health and Productivity Management

The Health and Productivity Management focus area is an area of converged efforts to promote the general health of employees through awareness campaigns, education, and the provision of support services for managers and employees in order to mitigate the impact of and effect of communicable and non- communicable diseases on the productivity and quality of life of members of staff.

The focus area integrates the data from the disability programme of the Department and the human resource management data available on organisational dynamics such as, increased absenteeism and sick leave utilisation, diminished performance and/or productivity due to physical incapability, increased medical costs for hospitalization, medicine and other healthcare costs.

Health and Productivity Management will comprise the following areas of intervention:  Disease management and chronic illness  Occupational health education and promotion and absenteeism management  Disability management  Health risk assessment and management.

Section 5.3: Wellness management

Wellness Management covers the spectrum of psychosocial stressors in the workplace in order to enhance individual and organizational wellness and ultimately productivity. Wellness management recognizes that the health, safety and wellness of employees directly impact on the productivity of the company. There are personal and workplace factors that influence wellness and employee performance. The aim of this focus area is to assist employees to produce at their optimal level. There are four strategic areas of focus:

 Employee Assistance Programme (which addresses the psycho-social aspects of Individual Wellness)  Individual physical health and wellness  Organisational wellness  Work life balance

Section 6: Employee Benefits

The company currently employs two different types of contract employees, namely, Permanent “cost to company” contracts and permanent employment contracts. Those employed in the latter category are offered the following, structured as “add on” benefits to their base salary:

 Medical Aid, where the company contributes 60% or R3280.50, whichever is the lesser, of the total contribution cost  Membership of one of the Pension Funds outlined below where the employer contributes between 15-22% of base salary per month per member, depending on the Fund of which the employee is a member  13th cheque equal to 1 month’s salary

Employees on this type of contract tend to belong in the Patterson A and B bands. Those employed on fixed term, cost to company contracts are required to fund non salary benefits. In addition, these employees may be paid an annual bonus of up to 14% of their annual cost to company remuneration. Employees on this type of contract tend to fall in the Patterson C to E bands. JCP currently operates six pension funds and five medical aid schemes for employees. Employees on cost to company packages exercise their choices in medical aid membership and retirement funding.

PENSION FUNDS NUMBER OF EMPLOYEES Municipal Employee Pension Fund 40 Municipal Gratuity Pension Fund 171 City of Johannesburg Pension Fund 447 eJoburg 705 Joint Municipal Pension Fund 7

MEDICAL AID NUMBER OF

EMPLOYEES

Bonitas 174

Keyhealth 39

L A Health 36

SAMWUMed 55

Hosmed 101

Day One Health 843

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The Day One Health insurance scheme was introduced for all employees without medical aid. This scheme provides basic benefits and, most importantly, HIV cover with full hospitalisation benefits. The subscription cost is borne by the company and covers the principal member only. Employees may enrol family members at a small additional cost which is for their own account.

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Section 7: Supply Chain Management and Black Economic Empowerment

The Procurement Policy for the Company was reviewed, approved and implemented in October 2010. Its pillars are the various pieces of legislation, such as the Preferential Procurement Policy Framework Act of 2000, the Preferential Procurement Regulations of 2001, the Broad-Based Black Economic Empowerment Act of 2003 and the accompanying Strategy and Draft Codes of Practice, and the Municipal Finance and Management Act (MFMA). A Board Supply Chain Management Framework has been approved by the Executive Committee which incorporates the provisions of Section 111 of the MFMA, the National Treasury: Municipal Supply Chain Management Regulations of 2005, and the Construction Industry Development Act.

The Company has set a BEE procurement target of 76% for opex and 62% for capex for the financial year.

The following table is a summary of the BEE spend for the year.

Item Description BEE Traditional Total BEE % R’000 R’000 BEE R’000 Opex Committed Expenditure 149 152 16 043 165 195 90 Capex Committed Expenditure 47 331 25 205 72 536 65 Total 196 483 41 248 237 731 83

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CHAPTER FIVE: AUDITED FINANCIAL STATEMENTS AND RELATED INFORMATION

See A.F.S.

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CHAPTER SIX: FUNCTIONAL AREA SERVICE DELIVERY REPORT

The table below provides information on the functional area provided by Johannesburg City Parks incorporated as a section 21 Company to maintain and develop parks, cemeteries and conservation areas.

Function: Community and Social Services Sub Function: Johannesburg City Parks Reporting Level Detail Total Johannesburg City Parks (JCP) is the greening, conservation and cemetery Overview: management agency for the City of Johannesburg (CoJ).) JCP is a Section 21 (non-profit) Description of the Company that manages and Activity: maintains the parks, open spaces, environmental services and cemeteries for and on behalf of the CoJ. These services extend to include Municipal parks, - environmental, conservation and cemetery services and exclude similar services on Provincial and National government levels. The strategic objectives of this function are: Service delivery; Customer satisfaction and responsiveness; Occupational Health, Safety and Security; Economic development and Job creation; HIV and AIDS; Safe Clean and Green City; Effective Financial Management Analysis of the Statistical information of JCP Number of facilities: Number of users: Function: Nature and extent of facilities provided:

Parks, cemeteries, nature Parks and arterials: 2 343 The communities conservation areas, public open and residents space Area of developed parks within the and arterials: boundaries of the 4 239.5 hectares City of Johannesburg Area of undeveloped parks: 2 080.6 hectares

Nature Reserves: 1 202,6 hectares

Selected sidewalks: 106

Function: Community and Social Services Sub Function: Johannesburg City Parks 3 593.2 hectares

Area of cemeteries: 1 254 hectares

Water Surfaces: 174 hectares

Street Trees: 1,4 to 1,7million

Cemeteries: 36

Crematoria: 2

Nurseries: 4

Bird Sanctuaries: 366,4 hectares

Trails and River Trails: 107 km = 1 587 ha

Environmental and Educational Centres: 6

Size of fleet: Vehicles: 312 Trailers: 131

Note: the facilities figure should agree with the assets register

Number and cost to employer of 1 579 employees R 340 521 000 personnel associated with JCP: Total operating cost of community R 554 156 000 and social services function (the assumption is that all expenditure is community and social) Key Performance Area

Service Delivery

Maintenance cycles: Number of maintenance cycles (days) undertaken in Parks per category: Performance During the Year, Performance Targets Against Actual Target Actual Achieved and Plans to

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Function: Community and Social Services Sub Function: Johannesburg City Parks Improve Performance 14 Flagship Parks’ Target achieved 7 Days Average 7 Days Average (main parks) Maintenance Developed Parks’ Target achieved 21Days Average 21Days Average maintenance

Undeveloped Target achieved 60 Days Average 60 Days Average Parks’ maintenance

Sidewalks’ Target achieved 120 Days 120 Days maintenance Average Average Road Road Islands’ Target achieved 60 Days 60 Days Average maintenance Average Selected Target achieved 14 Days 14 Days Average main arterials Average Number of new Target achieved 9 developments 4 developments developments in Parks

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Function: Community and Social Services

Sub Function: Johannesburg City Parks Actual Target Number of Target achieved 49 573 trees 30 000 trees mature indigenous trees planted Customer satisfaction % Increase in customer Target achieved 78% 70% satisfaction index Key programmes planned for the 2012/13:

 Merger of Johannesburg City Parks and Johannesburg Zoo  Development of open space through capital development projects - 10 Developments  Tree planting in deprived areas - 10 000 Trees  Environmental education programme - 9 000 Learners  Education on food production programme -9 000 Learners  Development of two food gardens in deprived areas  The primarily focus for the entity is on tree production as opposed to the procurement of trees from external providers.  A key focus area for 2012-13, will be the roll out of at least twenty Green Outdoor Gyms in the City of Johannesburg.  All future park developments and will be designed to incorporate the history, heritage and theme that

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Function: Community and Social Services

Sub Function: Johannesburg City Parks Actual Target resonate with the geographic environment, noteworthy is that the future designs of the parks will include walking trails and cycling trails aimed at creating networks that link communities, business centres, schools and other recreational facilities for ease of access by the communities.

Chairperson: Advocate M Madumise

Signature: …………………………………………

Date: …………………………………………………

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