City of Joburg Property Company SOC Ltd Integrated Annual Report
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City of Joburg Property Company SOC Ltd Integrated Annual Report 2015/2016 Registration No: 2000/017147/07 About this Report The City of Joburg Property Company SOC Ltd (JPC) is pleased to present its annual report for the year 1 July 2015 – 30 June 2016. JPC was established in 2000 as a private company, wholly owned by the City of Johannesburg Metropolitan Municipality (CoJ), and it converted into a State-Owned Company after the implementation of the Companies Act of South Africa, 2008 (Act No 71 of 2008). As such, it complies with the Companies Act and as Municipal Entity, the Company is also subject to the Municipal Finance Management Act, 2003 (Act No 56 of 2003) (MFMA), Municipal Systems and its applicable regulations. Further entrenching its commitment to high standards of corporate governance JPC ensures it strives for compliance with the King Report on Corporate Governance for South Africa 2009 (the King III report), code and principles. (For more details and an overview of the Company governance structure, please refer to chapter 2 of this report.) Management aims to adopt the guidelines outlined in the International Integrated Reporting Council’s Framework as appropriate in future years. Materiality has been applied in determining the content and disclosure in the report. Company Information Registration number: 2000/017147/07 Registered address: 1st Floor | Forum II | Braam Park | 33 Hoofd Street | Braamfontein Postal address: PO Box 31565 | Braamfontein | 2017 Telephone number: +27 010 219 9000 Fax number: +27 010 219 9400 Website: www.jhbproperty.co.za Bankers: Standard Bank South Africa Auditors: Auditor-General of South Africa City of Joburg Property Company SOC Ltd | Integrated Annual Report | 2015/2016 I Vision Our vision is to provide Property Management, Property Development and Property Asset Management services in order to maximise the social, economic and financial benefit to the City of Johannesburg (CoJ), as well as support the delivery objectives on a cost-competitive basis. Mission JPC is the manager of the property assets of the City of Johannesburg (CoJ), responsible for maximising the social, economic and financial value of the CoJ’s total property portfolio and enhancing the efficiency of its use. JPC provides Asset Management, Property Management and Property Development services, as well as interacts with the general public in respect of the property portfolio. JPC supports the achievement of the CoJ’s strategic priorities, including economic and social development and the service delivery of the CoJ. Values Our Company values provide an ethical foundation and are fundamental to our success. • Professionalism • Customer Service • Accountability • Trust • Responsibility The iconic and award winning Soweto Theatre City of Joburg Property Company SOC Ltd | Integrated Annual Report | 2015/2016 II Acronyms and Abbreviations Acronym/ Acronym/ abbreviation Name/phrase abbreviation Name/phrase AFS Annual Financial Statements LLF Local Labour Forum AOPO Audit of Predetermined Objectives MEs Municipal Entities ATR Annual Training Report MFMA Municipal Finance Management Act, 2003 BEE Black Economic Empowerment MMC Member of the Mayoral Committee B-BBEE Broad-Based Black Economic Empowerment MOE Municipal-Owned Entity CAPEX Capital Expenditure MSA Municipal Systems Act CBD Central Business District MTC Metropolitan Trading Company CBO Community-based Organisation NGO Non-Governmental Organisation OCM Organisational Change Management CoJ City of Johannesburg Metropolitan Municipality OD Organisational Design Facilities Management and FMM Maintenance OHASA Occupational Health and Safety Act GCSS CoJ: Group Corporate Shared Services OPCAR Operation Clean Audit Register GDS 2040 Growth and Development Strategy 2040 OPEX Operational Expenditure Government Immovable Asset Management Act GIAMA OSO Office Space Optimisation GIS Geographic Information System Property Information PIMS Management System Generally Recognised GRAP Accounting Practice POWA People Opposing Women Abuse GRI Global Reporting Initiative Remuneration and Human REMCO Resources Committee ICT Information and Communications Technology RFP Request for Proposal IDP Integrated Development Plan SAMWU South African Municipal Workers’ Union IAS International Accounting Standards South African Property SAPOA IT Information Technology Owners Association Independent Municipal and Allied SCM Supply Chain Management IMATU Trade Union SDA Service Delivery Agreement JMPD Johannesburg Metro Police Department SDM Service Delivery Model JoshCo Johannesburg Social Housing Company SMME Small, Medium and Micro-Enterprises City of Joburg Property Company JPC SOC Ltd SOC State Owned Company JRA Joburg Roads Agency UNGC United Nations Global Compact LIS Land Information System WSP Workplace Skills Plan PANEL OF AF van Wyk Attorneys, Bibi Rikhotso Attorneys, Bowman Gilfillian, Brink Cohen Le Roux, Collin Nciki Inc, Edward Nathan ATTORNEYS Sonnenberg Inc, Koikanyang Inc, Kunene Ramaphala Botha, Lennon Moleele & Partners Inc, Madlanga and Partners Inc, Malebye Motaung Mtembu, Mchunu Attorneys, Mdlulwa Nkhuhlu, Mkhabela Huntley Adekeye Inc, Mncedisi Ndlovu and Sedumedi Attorneys, Mogaswa Attorneys, Mojela Hlazo, Moodie and Robertson, Norton Rose Fulbright, Nozuko Nxusani, Padi Inc, Poswa Inc, Prince Mudau and Associates, Ramushu Mashile Twala Inc, Ranamane Mokalane Inc, Salijee Du Plessis Van der Merwe, SM Nkadimeng, Webber Wentzel and WerkmansNingiza Horner Inc ,Padi Inc, Rahman, C.Ngubane and Associates Seleka Attorneys,Lennon Moleele and Partners,Makamela Attorneys,Nchupetsang Attorneys, Phungo Inc, Wakaba and Partners, Popela Maake Madhlopa Inc Mahlaola Inc,Dlamini Attorneys, Denga Inc,Mathipane Tsebane Attorneys,Mohamed Randera and Associates,Tshiqi Zebediela,Koikanyang Inc,,Prince Mudau and Associates,Phambane Mokone Inc,Moloko Phooko Attorneys,Nandi Bulabula,Medupi Lehong,Molefi Dlepu Inc,KG Tserkezis,Ramatshila Mugeri Attorneys,Derrocks Attorneys,Twala Attorneys,Dali Matlana,Ismail Dahya,Selebogo Inc,TP Khoza Attorneys,Madlanga and Partners,BM Kolosi,Hugo Ngwenya Medium,Malebye Motaung Mthembu,Whalley and Van Der Lith Prinsloo Inc,Kunene Ramapala Inc, Nothemba George Attorneys,Mothle Jooma Sabdia Inc,Kgokong Nameng Tumagole Inc, Madiba Motsia Masitenyane & Girithi Attorneys Large,Bowens Gildenhuys, Malatji Inc ENS Africa,Cheadle Thompson and Hayson,DLA Cliffe Dekker, Hogan Lovell Bowman Gilfillan, City of Joburg Property Company SOC Ltd | Integrated Annual Report | 2015/2016 III Contents CHAPTER ONE IV CORPORATE PROFILE AND OVERVIEW 1 Highlights 2 Corporate Profile 2 Strategic Objectives 4 JPC’s High-Level Organisational Structure 5 Foreword by Member of the Mayoral Committee 6 Chairperson’s Review 7 Chief Executive Officer’s Review 8 Chief Financial Officer’s Review 9 Company Secretary’s Certification 10 Statement of Responsibility CHAPTER TWO 12 GOVERNANCE 13 Corporate Governance Statement 14 Board of Directors 18 Board Committees 20 Directors’ Remuneration 22 Executive and Senior Management 25 Company Secretarial Function 25 Risk Management and Internal Controls 26 Internal Audit Function 27 Corporate Ethics and Organisational Integrity 27 Sustainability Report 30 Anti-Corruption and Fraud 30 ICT Governance 31 Supply Chain Management and Black Economic Empowerment CHAPTER THREE 32 SERVICE DELIVERY PERFORMANCE 33 Core Business 33 Day-to-day Operations 33 Highlights and Achievements 34 Portfolio Profile 70 Financial Performance 71 Capital Projects 72 Performance Monitoring Against the Scorecard 76 Assessment of Arrears on Municipal Taxes and Service Charges CHAPTER FOUR 78 HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT 79 Human Capital Management 82 Employment Equity 85 Disciplinary Matters and Outcomes 87 Employee Wellness 91 Occupational Health & Safety Programmes CHAPTER FIVE 94 FINANCIAL PERFORMANCE 95 Annual Financial Statements CHAPTER SIX 135 AUDITOR-GENERAL’S AUDIT FINDINGS 136 Auditor-General’s Report for the current year 136 Audit Findings and Remedial Action 137 Commitment by the Board of Directors 140 General Information City of Joburg Property Company SOC Ltd | Integrated Annual Report | 2015/2016 IV | CHAPTER 1 | Corporate Profile and Overview 1 Highlights 2 Corporate Profile 3 Strategic Objectives 4 JPC’s High-Level Organisational Structure 5 Foreword by Member of the Mayoral Committee 6 Chairperson’s Review 7 Chief Executive Officer’s Review 8 Chief Financial Officers’ Review 9 Company Secretary’s Certification 10 Statement of Responsibility The new Council Chamber Circulation Stoa City of Joburg Property Company SOC Ltd | Integrated Annual Report | 2015/2016 | CHAPTER 1 | 1 Highlights JPC achieved 92% against performance scorecard. Social • During the 2015/16 financial year, 4 130 SMME’s were supported by the JPC. • In the 2015/2016 financial year, a total of 4 240 jobs opportunities were created. • JPC’s Land Regularisation Programme, together with Mayor Parks Tau, managed to deliver 630 Tittle deeds in regions C, D and F. Operational • Office Space optimisation –Completion of the Council Chamber Superstructure and interior designs; • Corridors of Freedom - 22 Properties acquired along the Transit Oriented Development against a target of 26. • Ablution facilities 100 % planned and completed for repairs and maintenance. Financial • Rental income from leases and servitudes sales, servitudes, and acquisition was R131m, exceeding the target by R21m. • Third party investments in COJ property transaction/ investments in construction was R423m,