JOB CREATION AWARD VISION 2030 - INFRASTRUCTURE TOP EMPLOYER IN PUBLIC SECTOR BEST PROVIDER OF TOP PERFORMING DEVELOPMENT AWARD SERVICES TO EXPORTERS PUBLIC SERVICE COMPANY INTEGRATED ANNUAL REPORT 2016/17 B-BBEE LEVEL 3 CONTRIBUTOR ISO 9001 14001 20001 27001 31000 OHSAS 18001 01 02 03 04 THIS IS COEGA PERFORMANCE ANNUAL FINANCIAL ADMINISTRATION INFORMATION STATEMENTS About the Integrated Report 2016/17 Corporate Performance 56 CFO’s Review 98 Abbreviations & Acronyms 162 Reporting Philosophy 6 Strategic Overview 66 Certificate by Company Secretary 98 Reporting Approach & Changes 6 IDZ Investment Services General Information 100 Scope, Boundaries & Materiality 6 Investment Promotion 68 Statement of Directors’ Assurance & Comparability 7 Infrastructure Development 74 Responsibilities and Approvals 101 Board Statement of Appreciation, Operations Management 78 Independent Auditor’s Report 102 Responsibility & Approval 7 Central Support Services Directors’ Report 108 Chairman’s Statement 8 Broad-Based Black Economic Statement of Financial Position 110 CEO’s Report 10 Empowerment (B-BBEE) 82 Statement of Profit or Loss 111 Corporate Highlights 12 Human Capital Solutions 84 Statement of Changes in Equity 112 About Coega Development, Empowerment Statement of Cash Flows 113 Development Corporation 14 & Transformation 86 Accounting Policies 114 Business Model – How CDC External Services Notes to the Consolidated Annual Creates Value 18 External Programmes 88 Financial Statements 124 Business Model Evolution 18 Sustainability Report 90 Detailed Income Statement 158 Organisational Overview Outlook 94 & Business Model 20 THIS IS COEGA Global Competitiveness 22 Area Profile 24 Ownership & Control 26 Stakeholders 28 Material Issues – Risks & Opportunities 32 Governance 34 Corporate Governance Statement 34 Governance Structure 36 Board of Directors 38 Audit & Risk Committee 42 Human Resources & Remuneration Committee 44 Social & Ethics Committee 45 Executive Management 46 Programme Directors 47 Coega Brand Architecture 48 Social Responsibility 50 Coega Timeline 52 PERFORMANCE INFORMATION PERFORMANCE SECTION 03 SECTION SECTION 04 SECTION ADMINISTRATION 2 COEGA DEVELOPMENT CORPORATION INTEGRATED REPORT 2016/17 3 01 THIS IS COEGA THIS IS COEGA About the Integrated Report Reporting Philosophy 6 Reporting Approach & Changes 6 Scope, Boundaries & Materiality 6 Assurance & Comparability 7 Board Statement of Appreciation, Responsibility & Approval 7 Chairman’s Statement 8 CEO’s Report 10 Corporate Highlights 12 About Coega Development Corporation 14 Business Model – How CDC Creates Value 18 Business Model Evolution 18 Organisational Overview & Business Model 20 Global Competitiveness 22 INFORMATION PERFORMANCE Area Profile 24 Ownership & Control 26 Stakeholders 28 Material Issues – Risks & Opportunities 32 Governance 34 Corporate Governance Statement 34 Governance Structure 36 Board of Directors 38 Audit & Risk Committee 42 Human Resources & Remuneration Committee 44 Social & Ethics Committee 45 Executive Management 46 Programme Directors 47 Coega Brand Architecture 48 03 SECTION Social Responsibility 50 Coega Timeline 52 16 6 697 INVESTORS 9 626 SECTION 04 SECTION PEOPLE TRAINED THROUGH 16 NEW INVESTORS NUMBER OF ADMINISTRATION SKILLS DEVELOPMENT DURING SIGNED DURING THE CONSTRUCTION THE 2016/17 FY 2016/17 FY JOBS CREATED DURING THE 2016/17 FY 4 COEGA DEVELOPMENT CORPORATION INTEGRATED REPORT 2016/17 5 ABOUT THE INTEGRATED REPORT COEGA DEVELOPMENT CORPORATION INTEGRATED REPORT 2016/17 REPORTING PHILOSOPHY In the pages that follow, the reader will discover details of The CDC operates in a dynamic environment. Therefore, Furthermore, the organisation is pursuing certification in the the CDC’s mandate, strategy, business model, governance the organisation adapts in order to respond to meeting the following standards: The International Integrated Reporting Council (IIRC) structure, performance review and future outlook. The report needs and requirements of all stakeholders, including funders, requires Coega Development Corporation (CDC) to compile also illustrates how the CDC is responding to risks and investors, tenants and external services clients. This is reflected • ISO 28000 a fully integrated annual report in terms of the International opportunities in its drive to create sustainable value and to in the report, which highlights the performance of the CDC in • ISO 50001 Integrated Reporting Framework <IR>. Over the four years support the Provincial Government, business and civil society the context of its strategy, including its commercial and project that the CDC has complied with this requirement, the process in the drive to address the socio-economic developmental management services and its management of the Nelson Similarly, the CDC undertakes an annual independent project of collecting and collating information and the opportunity it needs of the Eastern Cape. Mandela Bay Logistics Park. management maturity audit based on internationally accepted gives to reflect on both successes and challenges has become a project management standards such as OPM3 and P3M3, welcomed exercise. The activities of investors, tenants and the adjacent Port of which were developed by the Philadelphia, USA-based Project REPORTING APPROACH AND CHANGES Ngqura are addressed only to the extent that they impact upon, Management Institute (PMI). The CDC supports the view of the IIRC that, in a climate of or are serviced or influenced by, the CDC’s execution of its THIS IS COEGA uncertainty and restrained economic performance, there is a In the 2016/17 Integrated Annual Report, the focus of the strategy. In addition, the CDC received six certificates of excellence (or need to develop more meaningful interactions and relations content continues to be on connecting performance more recognition awards) during the period under review. These between investment decisions, corporate behaviour and closely to strategy and material issues in line with the guiding were: Top Performing Public Service Company: Job Creation; reporting in order to promote financial stability and sustainable principles of the <IR> Framework and the King III report on ASSURANCE AND COMPARABILITY 2030 Vision; Legends of Empowerment & Transformation; Top development. corporate governance. Employer in SA: Public Sector; Top 50 companies in the Nelson The CDC employs a rigorous system of internal controls, as Mandela Bay (NMB); and Best Established Black Business According to the IIRC, <IR> helps businesses to think holistically well as external oversight, to assure the quality of its reported The following reporting standards have been applied in the Awards. Two more prestigious awards were received in 2017, about their strategy and plans, make informed decisions and results and its adherence to international standards. these were Vision 2030 - Infrastructure Development award manage key risks to build investor and stakeholder confidence preparation of this report: and Best International Trade Marketing Specialist in Africa and improve future performance. It is shaped by a diverse Wherever possible, the results for the year under review are • <IR> Framework v1.0, International Integrated Reporting award. coalition including business leaders and investors to drive a compared to at least one of the following: global evolution in corporate reporting. Council, December 2013 • Public Finance Management Act (PFMA), Act 1 of 1999 • The previous year This “integrated thinking” breaks down internal silos and • Companies Act, Act 71 of 2008 • Cumulative for the past five years BOARD STATEMENT OF APPRECIATION, reduces duplication while also improving the quality of • International Financial Reporting Standards (IFRS) • And/or cumulative since inception RESPONSIBILITY AND APPROVAL information available, thereby enabling a more efficient and • King Code of Corporate Governance for South Africa (The INFORMATION PERFORMANCE productive allocation of capital. Its focus on value creation, and Institute of Directors in Southern Africa) September 2009 Financial controls and risk management are subject to review There are a number of individuals and organisations whom the the “capitals” used by the business to create value over time, (King III).The King IV report on Corporate Governance through an internal audit process. As a public entity, the CDC’s Board would like to thank for their vital roles in the last year, contributes towards a more financially stable global economy. for South Africa 2016 (King IV) published on 1 November financial statements are independently reviewed and reported including, the chair of the Parliamentary Portfolio Committee 2016 is effective in respect of financial years commencing on by the Auditor-General of South Africa. on Trade and Industry, Ms Joanmariae Fubbs; the Minister of Once again this year, the reporting process has stimulated on or after 1 April 2017. King IV replaces King III in its Trade and Industry, Dr Rob Davies; the Minister of Economic integrated thinking within the CDC. It sharpened the entirety. Therefore, the CDC’s Integrated Annual Report Similarly, non-financial information is subject to internal review Development, Mr Ebrahim Patel and their respective deputy organisation’s focus on first evaluating and understanding the 2017/18 will be based on King IV. and control in accordance with the standards set by the Board ministers and directors general. external environment and stakeholder needs and concerns in and independent external verification that has taken place