CONTENTS · 3 Gwen Lane Sandton 2196 7th Floor, Newlands Terraces 8 Boundary Road Newlands 7700...

ANNUAL FINANCIAL STATEMENTS

IN TERMS OF SECTION 15 OF THE PENSION FUNDS ACT NO 24, 1956AS AMENDED (PENSION FUNDS ACT)

NAME OF RETIREMENT FUND: JOHANNESBURG MUNICIPAL PENSION FUND

FINANCIAL SERVICES BOARDREGISTRATION NUMBER: 12/8/390

FOR THE PERIOD: 1 JULY 2016 to 30 JUNE 2017

CONTENTS

Schedule Page Schedule Page

A

B

C

D

E

F

G

Regulatory Information *

Statement of responsibility by theBoard of Fund *

Statement of responsibility by thePrincipal Officer *

Report of the Independent Auditors

Report of the Board of Fund *

Statement of net assets and funds

Statement of changes in net assetsand funds

1 - 5

6

7

8 - 10

11 - 17

18

19

HA

HB

I

IA

IB

Notes to the Annual FinancialStatements

Report of the Valuator *

Report of the Independent Auditorson factual findings to the Board ofFund and registrar of pension funds

Investment schedule pertaining to theAnnual Financial Statements*

Assets held in compliance withRegulation 28

Independent Auditor's report onassets held in compliance withRegulation 28 to the Board of Fund

20 - 34

# - #

37 - 48

49 - 56

57 - 62

63 - 64

* Not subject to any engagement by an auditor

JOHANNESBURG MUNICIPAL PENSION FUND

SCHEDULE AREGULATORY INFORMATIONFOR THE YEAR ENDED 30 JUNE 2017

REGISTERED OFFICE OF THE FUND

Postal address: PO Box 2611Johannesburg2001

Physical address: 2nd Floor, North WingOakhurst Building11-13 St. Andrews RoadParktown2193

FINANCIAL REPORTING PERIODS

Current year: 1 July 2016 to 30 June 2017Prior year: 1 July 2015 to 30 June 2016

BOARD OF FUNDFull name E-mail Address Capacity Date appointed/

reappointedDate resigned

G Luden [email protected] M & C 18 March 2016J Eagle [email protected] M 18 March 2016L de Bruyn [email protected] M 18 March 2016P Louwrens [email protected] M 18 March 2016R Knight [email protected] M,A 18 March 2016M Kruger [email protected] M,A 18 March 2016V Pryke [email protected] M,A 18 March 2016R Mathlo [email protected] M,A 18 March 2016F D R Kinnear [email protected] P 18 March 2016S Verrier [email protected] P 18 March 2016M van der Merwe [email protected] P 18 March 2016 10 November 2017G Mohohlo [email protected] P 18 March 2016M Watson [email protected] P 18 March 2016 24 November 2017G Kyzer [email protected] P 18 March 2016P Brockmann [email protected] P 18 March 2016M Muller [email protected] P 18 March 2016C Wiltshire [email protected] P,A 18 March 2016A Galt [email protected] P,A 18 March 2016M Coetzee [email protected] P,A 18 March 2016F Feig [email protected] P,A 18 March 2016A Pretorius [email protected] P,A 18 March 2016J Laas [email protected] P,A 18 March 2016D Fox [email protected] P,A 18 March 2016Prof B Marx [email protected] I 1 May 2017C Bösenberg [email protected] I 1 May 2017

Prof B Marx and C Bösenberg were appointed as independent trustees on 1 May 2016 and they were re-appointed on 1 May 2017.

- 'M' denotes member elected- 'A' denotes alternate- 'C' denotes chairperson- 'I' denotes independent- 'P' denotes pensioner elected

Governance note: schedule of meetings* held by the Board of Fund in terms of the rules of the FundMeeting date Place of meeting Quorum

(yes/no)23 September 2016 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes21 November 2016 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes17 February 2017 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes12 May 2017 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes26 May 2017 JMPF Boardroom, 2nd Floor, Oakhurst Offices, Parktown Yes* Only meetings held by the Board of Fund and does not include meetings held by the sub-committees

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SCHEDULE AREGULATORY INFORMATION (continued)FOR THE YEAR ENDED 30 JUNE 2017

FUND OFFICERSPrincipal Officer Actuary

Full name: A Pretorius Jeanine SchubachPostal address: PO Box 2611

Johannesburg2001

Private Bag X24 Sandton

2146Physical address: 2nd Floor, North Wing

Oakhurst Building 11-13 St. Andrews Road

Parktown2193

Cadiant Partners Actuarial and Consulting Solutions (Pty) Ltd 2nd Floor

3 Gwen Lane Sandton

2196Telephone number: (011) 551 9540 (011) 783 1620

Email address: [email protected] [email protected]

Auditor Benefit administratorFull name: SizweNtsalubaGobodo Inc. NMG Consultants and Actuaries Administrators

(Pty) LtdPostal address: PO Box 2191

Saxonwold2132

PO Box 1778 Randburg

2125Physical address: 20 Morris Street East

Woodmead2191

411 Main Avenue Randburg

2194Telephone number: (011) 231 0600 (011) 509 3000

Registration no. in terms ofSection 13B: 24/307

SizweNtsalubaGobodo Inc. replaced Ernst & Young with effect from 1 June 2017.

Fund consultant Investment administratorFull name: Cadiant Partners Actuarial and Consulting Solutions

(Pty) LtdTaquanta Asset Managers (Pty) Ltd

Postal address: Private Bag X24 Sandton

2146

PO Box 23540 Claremont

7735Physical address: 2nd Floor

3 Gwen Lane Sandton

2196

7th Floor, Newlands Terraces 8 Boundary Road

Newlands7700

Telephone number: (011) 783 1620 (021) 681 5175FAIS registration no.: 44415 618

Investment administrator Investment administratorFull name: Boutique Collective Investments Allan Gray Investment Services (Pty) Ltd

Postal address: Private Bag X6 Newlands

7725

PO Box 51318 Cape Town

8001Physical address: Catnia Building, Bella Rosa Village

Bella Rosa Street Bellville

Cape Town7530

1 Silo Square V&A Waterfront

Cape Town8001

Date of resignation: 30 June 2017Telephone number: (021) 659 5300 (021) 446 7727

FAIS registration no.: 35113 19896

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SCHEDULE AREGULATORY INFORMATION (continued)FOR THE YEAR ENDED 30 JUNE 2017 PROFESSIONAL SERVICE PROVIDERS (continued)

Investment administrator Investment administratorFull name: Vescore, 1741 Asset Management Ltd Futuregrowth Asset Management (Pty) Ltd

Postal address: Stampfenbachstrasse 114 8006 Zurich

Switzerland

Private Bag X6 Newlands

7725Physical address: Stampfenbachstrasse 114

8006 ZurichSwitzerland

3rd Floor, Great Westerford Building 240 Main Road

Rondebosch Cape Town

7700Date of resignation: 30 June 2017Telephone number: +41 (0)58 702 04 52 (021) 659 5447


Investment administrator Investment administratorFull name: Momentum Asset Management (Pty) Ltd Prescient Investment Management (Pty) Ltd

Postal address: Private Bag 9959 Sandton

2146

PO Box 31142 Tokai

7956Physical address: 268 West Avenue

Centurion0157

Prescient House Westlake Business Park

Otto Close, Cape Town7945


Investment administrator Investment administratorFull name: Ashburton Investor Services (Pty) Ltd Atlantic Asset Management (Pty) Ltd

Postal address: PO Box 653780 Benmore

2010

Suite 152 Private Bag X3

Roggebaai8012

Physical address: 5 Buitengracht Street Portside Tower

Cape Town8001

10th Floor 22 Bree Street

Cape Town8001

Telephone number: (0) 87 335 6900 (021) 418 7801FAIS registration no.: 44341 31756

Investment administrator Investment administratorFull name: Investec Asset Management (Pty) Ltd Inbear Fund Services Ltd (Hosking)

Postal address: PO Box 1655 Cape Town

8000

7 St James`s Terrace, Malahide, Country Dublin

IrelandPhysical address: 36 Hans Strijdom Avenue

Foreshore Cape Town

8001

7 St James`s Terrace, Malahide, Country Dublin

Ireland

Date of resignation: 30 June 2017Telephone number: (021) 416 2000 +35 (3)1 845 8160


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Investment administrator Investment administratorFull name: Russell Investments Ireland Ltd (Old Mutual) Marathon Asset Management LLP

Postal address: Rex House10 Regent StreetLondonSW1Y 4PEUK

Orion House, 5 Upper St. Martin’s Lane, LondonWC2H 9EA 9999

Physical address: Rex House10 Regent StreetLondonSW1Y 4PEUK

Orion House, 5 Upper St. Martin’s Lane, LondonWC2H 9EA9999


Investment administrator Investment administratorFull name: Standard Bank of SA Ltd Satrix Management (Pty) Ltd

Postal address: 30 Baker StreetRosebank2196

PO Box 30Sanlamhof 7532

Physical address: PO Box 6702Johannesburg2000

2 Strand RoadBellville7530

Telephone number: (011) 636 8975 0860 111 401FAIS registration no.: 11287 15658

Investment administrator Investment administratorFull name: Sanlam Investment Management (Pty) Ltd Stanlib Asset Management (Pty) Ltd

Postal address: Private Bag X8Tyger Valley7536

PO Box 202Melrose Arch2076

Physical address: 55 Willie Van Schoor RoadBellville7536

17 Melrose BoulevardMelrose Arch 2196


Investment administrator Investment administratorFull name: ABSA Bank Ltd Visio Capital Management (Pty) Ltd

Postal address: 1st Floor, Block B Barclays Pretoria Campus270 Maggs StrWaltlooPretoria0184

The Place1 Sandton DriveGround Floor, South WingSandton2146

Physical address: 1st Floor, Block B Barclays Pretoria Campus270 Maggs StrWaltlooPretoria0184

The Place1 Sandton DriveGround Floor, South WingSandton2146


Investment advisor Investment advisorFull name: Gray Swan Financial Services (Pty) Ltd Cadiant Partners Consultants and Actuaries (Pty)

LtdPostal address: Private Bag X34

Somerset West 7129

Private Bag X24 Sandton

2146Physical address: Ground Floor, Building 5

299 Pendoring RoadBlackheath2195

2nd Floor 3 Gwen Lane

Sandton2196


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Custodian Bond ManagerFull name: Nedbank Ltd Colourfield Liability Solutions (Pty) Ltd

Postal address: PO Box 1144 Johannesburg

2000

16B 3rd Floor 3 Melrose Boulevard

Melrose Arch 2077

Physical address: 33 Hoofd Street Braampark, Forum 4

3rd Floor, Braamfontein 2001

16B 3rd Floor 3 Melrose Boulevard

Melrose Arch 2077

Telephone number: (011) 667 1210 (011) 883 4692FSP approval no.: 9363

FAIS registration no.: 35113

PARTICIPATING EMPLOYERS

From 1 October 2008 there are no participating employers in the Fund due to the Fund being a closed Fund from the effective date of the new rules.

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Head Office

20 Morris Street East, Woodmead, 2191 P.O. Box 2939, Saxonwold, 2132

Tel: +27 (0) 11 231 0600 Fax: +27 (0) 11 234 0933

Victor Sekese (Chief Executive) A comprehensive list of all Directors is available at the company offices or registered office. SizweNtsalubaGobodo Incorporated. Registration Number: 2005/034639/21

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF FUND OF JOHANNESBURG MUNICIPAL PENSION FUND Report on the Audit of the Financial Statements Opinion We have audited the annual financial statements of Johannesburg Municipal Pension Fund the Fu d set out on pages 18 to 34, which comprise the statement of net assets and funds as at 30 June 2017 and the statement of changes in net assets and funds for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. The financial statements are prepared for the purpose of reporting to the Registrar of Pension Funds. In our opinion, the financial statements of Johannesburg Municipal Pension Fund for the year ended 30 June 2017 are prepared, in all material respects, in accordance with Regulatory Reporting Requirements for Retirement Funds in South Africa. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsi ilities for the Audit of the Finan ial Statements section of our report. We are independent of the Fund in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter – Financial reporting framework and restriction on use We draw attention to note 1.1 which describes the principal accounting policies in which the applicable financial reporting framework is identified, as prescribed by the Registrar. Consequently, the financial statements and related auditor's report may not be suitable for another purpose. Our opinion is not qualified in respect of this matter. Other information The Board of Fund is responsible for the other information. The other information comprises the following schedules as required by the Pension Funds Act: Schedule A – Regulatory information Schedule B – Statement of responsibility by the Board of Fund Schedule C – Statement of responsibility by the Principal Officer Schedule E – Report of the Board of Fund Schedule HB – Report of the Valuator Schedule IA – Investment schedule pertaining to annual financial statements

SCHEDULE D JOHANNESBURG MUNICIPAL PENSION FUND Registration number:12/8/390 Page 9

Other information(continued) Other i for atio does ot i lude the fi a ial state e ts a d our auditor’s report thereo . Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Fund for the Financial Statements The Board of Fund is responsible for the preparation of the financial statements in accordance with the regulatory reporting requirements for retirement funds in South Africa and for such internal control as the Board of Fund determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. I prepari g the fi a ial state e ts, the Board of Fu d is respo si le for assessi g the Fu d’s a ility to o ti ue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Board of Fund either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free fro aterial isstate e t, hether due to fraud or error, a d to issue a auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effe ti e ess of the Fu d’s i ter al o trol.

SCHEDULE D JOHANNESBURG MUNICIPAL PENSION FUND Registration number:12/8/390 Page 10

Auditor’s Respo si ilities for the Audit of the Fi a ial State e ts(continued) • Co lude o the appropriate ess of the Board of Fu d’s use of the goi g o er asis of a ou ti g and, based on the audit evidence obtained, whether a material uncertainty exists related to events or

o ditio s that ay ast sig ifi a t dou t o the Fu d’s a ility to o ti ue as a goi g o er . If e conclude that a material uncertainty exists, we are required to draw atte tio i our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate to modify our opinion. • Our o lusio s are ased o the audit e ide e o tai ed up to the date of our auditor’s report. However, future events or conditions may cause the Fund to cease to continue as a going concern. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Fund. Report on the Audit of the Financial Statements We communicate with the Board of Fund regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements The Statement of Responsibility by the Board of Fund describes instances of non-compliance with laws and regulations, including those that determine the reported amounts and disclosures in the financial statements that have come to the attention of the Board of Fund and the corrective action taken by the Board of Fund. There are no additional instances of non-compliance with laws and regulations that came to our attention during the course of our audit of the financial statements.

SizweNtsalubaGobodo Inc. Director: Darshen Govender Chartered Accountant (SA) Registered Auditor Woodmead 05 December 2017


SCHEDULE EREPORT OF THE BOARD OF FUNDFOR THE YEAR ENDED 30 JUNE 2017

1. DESCRIPTION OF THE FUND

1.1. Type of Fund in terms of the Income Tax Act, 1962

In terms of section 1 of the Income Tax Act, 1962 the Fund is classified as a pension fund. The Fund is a defined benefit fund.

1.2. Benefits

In terms of the Rules of the Fund the following definitions were applicable from 1 July 2016 to 30 June 2017:

a. The normal retirement age is 63 years.

b. The pension factor is 2.0108% for each year of pensionable service.

c. A lump sum award is calculated at 7% of final pensionable emoluments for each year of pensionable service. Amember who has attained the age of 55 years and has not less than 10 years' contributory service may elect toreceive on any date the lump sum equal to 7% of his final pensionable emoluments per year of contributory service.

d. Pensions are based on final pensionable emoluments which are:

If he has been a member continuously since 30 June 1984, his pensionable emoluments on 30 September 2008increased annually in July each year thereafter by the percentage increase in the Headline Consumer Price Index forthe twelve month period 31 May to the 31 May preceding the July in which the increase is given, until he becomesentitled to payment of a pension.

If he has not been a member continuously since 30 June 1984, his annual average pensionable emoluments over theyear preceding 1 October 2008 increased annually in July each year thereafter by the percentage increase in theHeadline Consumer Price Index for the twelve month period 31 May to the 31 May preceding the July in which theincrease is given. For the increase as at 1 July 2009, the percentage increase shall be 75% of the increase in CPIand thereafter, 100% of the increase in CPI until he becomes entitled to payment of a pension.

e. In the event of death of a member in service the member's actuarial reserve value at date of death will be transferredto the City of Johannesburg Pension Fund and will be combined with the death benefit payable from the City ofJohannesburg Pension Fund.

f. A member whose employment is terminated due to incapacity will be eligible to an early retirement benefits. This wil be a lump sum benefit equal to his actuarial interest in the Fund or his minimum benefit prescribed by the Act, whichever is the greater. Alternatively, if the member has attained the age of 45 years and has not less than 15 years' contributory service or has attained the age of 55 years and has not less than 10 years' contributing service, he may elect to receive a retirement lump sum and annual pension benefit from the Fund, on a basis such that the total value of the benefits is equal to the members' actuarial interest in the Fund.

g. In lieu of receiving a cash termination benefit, a member who has attained the age of 45 years and has not less than15 years’ contributory service or who has attained the age of 55 years and has not less than 10 years’ contributingservice, may elect to defer payment of such benefit to his pensionable age.

1.2.1. Strategy of the Fund towards unclaimed benefits:

Retirement and withdrawal benefits will become unclaimed after 24 months as per rule 38 as well as the Pension FundsAct. Death benefits are transferred to the City of Johannesburg Pension Fund for distribution.

1.3. Contributions

From 1 October 2008 the fund became a closed fund both in respect of new members and further accruals ofpensionable service. From then on there were no contributions to the Fund.

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SCHEDULE EREPORT OF THE BOARD OF FUND (continued)FOR THE YEAR ENDED 30 JUNE 2017

1.4. Rule Amendments

Ruleamendment

No.Description and motivation

Date ofBoard of Fund

resolution

Effectivedate

Date registered bythe

Financial ServicesBoard

7 To allow the Fund to deduct expenses from aspecific member's benefit when costs areincurred by the Fund on behalf of thatmember as a result of actions taken or nottaken by that member.

22 February 2016 1 April 2016 5 September 2016

All rule amendments are available for inspection at the Fund’s registered office.

1.5. Reserves and specified accounts established in terms of the rules of the Fund

Pensions Funding Account

Expense Reserve Account

Bonus Reserve Account

Solvency Reserve Account

1.5.1. Pensions Funding Account

a.The Pensions Funding Account shall be credited with the actuarial interest of each Pensioner's Pension or amember's deferred Pension, less the actuarial interest of each Pensioner's current or each member's deferred benefitpayable in terms of Rule 30(6), at the effective date.

b. Every payment of an exit benefit, excluding that portion of the benefit paid in respect of benefits payable inaccordance with Rule 30(6), pension or gratuity shall be debited to the Pensions Funding Account. c. At the end of each calendar month an amount equal to the transfer value received in terms of Rule 13, excluding thevalue transferred in respect of benefits payable in accordance with Rule 30(6), shall be credited to the PensionsFunding Account. d. At the end of each month the Pensions Funding Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Pensions Funding Account.

e. Following completion of the annual valuation of the Fund in accordance with Rule 52, the Pensions Funding Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.

Expense Reserve Account

a.The Expense Reserve Account shall be credited with the actuarial interest, as determined by the actuary, of futureanticipated Fund expenses at the effective date.

b. Every expense paid by the Fund shall be debited to the Expense Reserve Account. c. At the end of each month the Expense Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Expense Reserve Account.

d. Following completion of the annual valuation of the Fund in accordance with Rule 52, the Expense Reserve Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.

Solvency Reserve Account

a. The Solvency Reserve Account shall be credited with such amount, as determined by the actuary, at the effective date.

b. At the end of each month the Solvency Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Solvency Reserve Account.

c. Following completion of the annual valuation of the Fund in accordance with Rule 52, the Solvency Reserve Accountshall be debited or credited by the amount credited or debited to the Pensions Funding Account, Bonus ReserveAccount and Expense Reserve Account in respect of experience gains and/or losses determined by the actuary.

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Bonus Reserve Account

a. The Bonus Reserve Account shall be credited with the actuarial interest, as determined by the actuary, of eachPensioner's current or each member's deferred benefit payable in terms of Rule 30(6) at the effective date.

b. Every payment of the capital value of the portion of an exit benefit payable in terms of Rule 30(6) shall be debited tothe Bonus Reserve Account. c. Every payment of a bonus payable in accordance with Rule 30(6) shall be debited to the Bonus Reserve

Account.

d. At the end of each calendar month an amount equal to the portion of the transfer value received in terms of Rule 13in respect of benefits payable in accordance with Rule 30(6), shall be credited to the Bonus Reserve

Account.

e. At the end of each month the Bonus Reserve Account shall be credited with gains (whether positive or negative)calculated on investments allocated to the Bonus Reserve Account.

f. Following completion of the annual valuation of the Fund in accordance with Rule 52, the Bonus Reserve Account shall be debited or credited by such experience gains and/or losses as determined by the actuary.

2. INVESTMENTS

2.1. Investment strategy

Following registration of the Revised Rules effective 1 October 2008, the fund is a closed Fund that has defined benefitliabilities to existing and future pensioners. The Fund has implemented a matched investment strategy relative to itsbasic, 13th cheque and expense liability and has adopted a more discretionary policy for the assets backing theSolvency Reserves of the Fund. Colourfield Liability Solutions (Pty) Ltd has been appointed to manage the core portfolio (matched portfolio) whichcomprises mainly of inflation-linked government bonds and other fixed interest rate assets designed to produce anincome stream to meet the Fund’s liabilities to pensioners and deferred pensioners. Colourfield Liability Solutions (Pty)Ltd is required to produce a monthly report which analyses whether the Fund’s objectives are being achieved. The discretionary portfolio (balanced portfolio) was changed during the last financial year in that assets backing the13th cheque liability were transferred to the matched portfolio. The remaining assets have been invested in acombination of active and passive investment strategies comprising of local equity, offshore equity and property. Thesevarious portfolios are managed by various professional investment managers.

The Fund recognises that it may miss out on investment opportunities within the balanced portfolio given the relativelylong periods of time between meetings and has accordingly appointed GraySwan Investment Consultants (Pty) Ltd asOutsourced Chief Investment Officer. Their role is to make quick, small, tactical investment decisions, includinghedging if required, within certain prescribed limits. Changes outside of these limits continue to be considered andapproved by the Executive Committee and the Board of Fund.

2.1.1. General

The Fund is a closed fund that has not received contribution income after 1 October 2008. Pension payments andbenefit payments in respect of deferred pensioners who exit the Fund prior to retirement are affected by realisation ofcurrent assets as determined by the Fund's matched investment strategy.

The discretionary portfolio (balanced portfolio) investment strategy adopted by the Board of Fund is derived with theuse of Asset Liability Modelling (ALM). The output of the ALM process determines the appropriate strategic assetallocation over time. The current investment strategy of the balanced portfolio is based on the following strategic assetallocation: 35% local equity, 15% local listed property, 35% foreign developed market equity and 15% foreign emergingmarket equity.

2.1.2. Unclaimed benefits

Unclaimed benefits are invested in the bank account.

2.1.3. Reserve accounts

The Pensions Funding Account, Bonus Reserve Account and Expense Reserve Account are invested in the matchedportfolio, with the Solvency Reserve Account invested in the balanced portfolio.

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2.1.4. Derivative Instruments

The Board of Fund utilises derivative instruments as part of their investment strategy. The Board of Fund ensures thatthe following have been complied with:

The exposure of the asset class does not exceed the maximum percentages as prescribed to the underlying asset asset out in Regulation 28. The investment mandate is in place and reviewed by the Board of Fund on a regular basis to ensure compliance withthe requirements as prescribed by Regulation 28 and the relevant Notice.

The investments are monitored for compliance with the provisions of Regulation 28 and adherence to the investment mandate.

2.1.5. Hedge Funds

The Board of Fund can utilise hedge funds as part of their investment strategy. The Board of Fund ensures that thefollowing have been complied with:

The exposure of the asset class does not exceed the maximum percentages as prescribed to the underlying asset asset out in Regulation 28. The investment mandate is in place and reviewed by the Board of Fund on a regular basis to ensure compliance withthe requirements as prescribed by Regulation 28 and the relevant Notice.

The investments are monitored for compliance with the provisions of Regulation 28 and adherence to the investment mandate.

2.1.6. Private Equity Funds

The Board of Fund does not utilise private equity funds as part of their investment strategy.

2.1.7. Securities Lending Transactions

According to the Investment Policy Statement, securities lending may be allowed. In each case, specific guidelines andmandates will be implemented. Such guidelines and mandates will stipulate the types of counterparties to be utilisedas well as the limits relating to the lending of securities.

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2.2. Management of investments

The Fund's investments consist of listed equities, bonds, collective investment schemes, deposit and call accounts andderivative market instruments. Derivative contracts are entered into mainly to hedge against foreign exchangemovements. The investments were selected in accordance with the parameters that are defined in terms of theinvestment policy statement approved by the Board of Fund. The investments of the Fund are safeguarded by theinvestment administrators appointed by the Fund and these assets are registered in the name of the Fund. Overallresponsibility for the investment and performance lies with the Board of Fund. The Board of Fund meet from time totime to conduct the business of the Fund and review the investment performance achieved by the appointed investment

administrators.

The fair value of the Fund's investments, administered by the investment administrators at the end of the year were:

30 June 2017R

30 June 2016R

Boutique Collective Investments 89 100 077 276 260 107Vescore, 1741 Asset Management Ltd - 204 432 294Taquanta Asset Managers (Pty) Ltd 368 461 887 328 528 154Allan Gray Investment Services (Pty) Ltd - 306 724 751Inbear Fund Services Ltd (Hosking) - 477 038 639Momentum Asset Management (Pty) Ltd 16 103 395 21 719 657Atlantic Asset Management (Pty) Ltd 182 992 484 166 408 805The Bridge Property 319 776 098 321 404 000Prescient Investment Management (Pty) Ltd 98 338 675 137 863 550Futuregrowth Asset Management (Pty) Ltd 68 746 353 62 883 492Investec Asset Management (Pty) Ltd 78 218 795 179 560 210Ashburton Investor Services (Pty) Ltd 470 904 809 431 351 369ABSA Bank Ltd - Current account 1 360 853 1 275 672Nedbank Ltd 93 976 864 62 163 757RSA Bonds 4 828 331 471 5 138 183 504Corporate bonds - Standard Bank of South Africa Ltd - 11 058 167Corporate bonds - Eskom 396 957 670 416 251 996Corporate bonds - African Bank 76 111 803 74 501 124Corporate bonds - Firstrand Bank Ltd 62 732 235 64 541 469Corporate bonds - SA Road Agency 571 914 106 584 190 396Stanlib Asset Management (Pty) Ltd 163 073 324 -Marathon Asset Management LLP 156 625 514 -Satrix Management (Pty) Ltd 18 239 833 -Sanlam Investment Management (Pty) Ltd 84 695 121 -Oakhurst Property 7 200 000 -Standard Bank of SA Ltd 2 585 322 -Russell Investments Ireland Ltd (Old Mutual) 361 585 042 -Visio Capital Management (Pty) Ltd 95 837 835 -

Total value of investments managed 8 613 869 566 9 266 341 113

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3. MEMBERSHIP

Deferredpensioners

Pensioners Unclaimedbenefits

Number at the beginning of year 2 849 7 535 659Adjustments (29) 5 -Additions - 239 5Suspensions & terminations - (264) -Withdrawals (78) - -Retirements (132) - -Deaths (20) (288) -Unclaimed benefits paid - - (134)

Number at the end of the year 2 590 7 227 530

Number at end of year(South African citizen)

2 590 7 126 530

Number at end of year(non-South African citizen)

- 101 -

Adjustments:The adjustments is in respect of deferred members that had nil balances and for pensioners that were not taken intoaccount in the previous period.

4. ACTUARIAL VALUATION

The financial statements summarise the transactions and net assets of the Fund. They do not take account of liabilitiesto pay pensions and other benefits in the future. In accordance with the Rules of the Fund, the statutory actuarialposition of the Fund, which does take account of such liabilities, is examined and reported on by the actuary at intervalsnot exceeding three years. The latest statutory actuarial valuation, which was completed prior to signing thesefinancials, was performed as at 30 June 2014 in which the valuator reported that the Fund was in a sound financialposition. The statutory actuarial valuation was submitted on 31 May 2016 and was approved by the Financial Services

Board on 1 February 2017.

5. SURPLUS APPORTIONMENT OR NIL SCHEME

Nil schemeThe Fund submitted a nil surplus application in relation to the statutory surplus apportionment valuation as at 30 June2002. The Financial Services Board has confirmed that it has recorded this as a nil scheme submission and it has been

approved.

6. HOUSING LOAN FACILITIES

Housing loans are granted to members in terms of the Rules of the Fund and Section 19(5) of the Pension Funds Act in South Africa. No new loans were granted since 2008.

7. INVESTMENTS IN PARTICIPATING EMPLOYERS

The Fund holds no direct investments in the participating employer.

8. SIGNIFICANT MATTERS

No significant matters were noted for the period under review.

- 16 -



9. ADDITIONAL DISCLOSURE

Good governance of the Fund

The Board of Fund acknowledges and applies, where necessary, PF130 and the Principles of Treating Customers Fairlyas prescribed by the Financial Services Board and the King IV Principles of Good Corporate Governance as set out bythe Institute of Directors in Southern Africa.

The Board of Fund has therefore implemented, and review from time to time, the following policies:

- Code of Conduct for the Board of Fund - Communication policy- Investment policy statement - Risk management policy - Board of Funds' gift policy - Board of Funds' training policy - Board of Funds' remuneration policy.

10. SUBSEQUENT EVENTS

No subsequent events have occurred since the financial year end that may materially affect the financial statements.

- 17 -


SCHEDULE FSTATEMENT OF NET ASSETS AND FUNDSAS AT 30 JUNE 2017

Note30 June 2017

R30 June 2016

R

ASSETS

Non-current assets 8 613 886 628 9 266 417 554Investments 2 8 613 869 566 9 266 341 113Housing loans 3 17 062 76 441

Current assets 21 408 733 29 737 819Accounts receivable 4 13 438 114 74 466Arrear contributions 10 - 52 043Cash at bank 7 970 619 29 611 310

Total assets 8 635 295 361 9 296 155 373

FUNDS,SURPLUS AND LIABILITIES

Total reservesReserve accounts 17 8 501 928 583 9 112 678 095

Total funds and reserves 8 501 928 583 9 112 678 095

Non-current liabilitiesUnclaimed benefits 8 68 881 207 83 882 552

Current liabilities 64 485 571 99 594 726Transfers payable 6 9 183 919 2 392 588Benefits payable 7 52 185 124 74 825 167Accounts payable 9 3 116 528 22 376 971

Total funds and liabilities 8 635 295 361 9 296 155 373

- 18 -


SCHEDULE GSTATEMENT OF CHANGES IN NET ASSETS AND FUNDSFOR THE YEAR ENDED 30 JUNE 2017

Accumulated funds Reserve accountsRefer note 17

Current year2017

Previous year2016

Note R R R R

Net investment income 11 - 10 151 630 10 151 630 756 751 344Allocated to unclaimed benefits 8 - (3 173 486) (3 173 486) -Other income 12 - 2 311 894 2 311 894 129 491

Less:Administration expenses 13 - (13 257 058) (13 257 058) (11 695 674)

Net (loss)/income before transfers and benefits - (3 967 020) (3 967 020) 745 185 161

Transfers and benefits - (783 786 337) (783 786 337) (648 598 161)Transfer from other funds 5 - 25 747 701 25 747 701 27 215 939Transfer to other funds 6 - (53 456 509) (53 456 509) (41 497 840)Benefits* 7 - (756 077 529) (756 077 529) (634 316 260)

Net (loss)/income after transfers and benefits - (787 753 357) (787 753 357) 96 587 000

Funds and reservesBalance at the beginning of the year 17 - 9 112 678 095 9 112 678 095 9 035 496 769Prior period adjustments 14 - 6 981 894 6 981 894 (19 405 674)Retirement benefit accrual 17 - 170 021 951 170 021 951 -

Balance at the end of the year - 8 501 928 583 8 501 928 583 9 112 678 095

*Included in the benefits amount is an amount of R 29 890 369 that was written off relating to prior periods.

- 19 -


SCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2017

1. PRINCIPAL ACCOUNTING POLICIES

The following are the principal accounting policies used by the Fund. These policies have been applied consistently to allyears presented, unless otherwise specifically stated.

1.1. PURPOSE AND BASIS OF PREPARATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements are prepared in accordance with the Regulatory Reporting Requirements for RetirementFunds in South Africa, the rules of the Fund and the provisions of the Pension Funds Act.

The annual financial statements are prepared on the historical cost and going concern bases, except where specificallyindicated otherwise in the accounting policies below.

1.2. FINANCIAL INSTRUMENTS

Measurement

A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equityinstrument of any other entity. A financial asset or a financial liability is recognised when its contractual arrangementsbecome binding and is derecognised when the contractual rights to the cash flows of the instrument expire or when suchrights are transferred in a transaction in which substantially all risks and rewards of ownership of the instrument aretransferred.

Financial instruments carried on the statement of net assets and funds include cash and bank balances, investments,housing loans, receivables and accounts payable.

Financial instruments are recognised on acquisition using trade date accounting, which includes transaction costs. Uponinitial recognition financial instruments are designated at fair value through the statement of changes in net assets andfunds as the assets or liabilities are managed, evaluated and reported internally on a fair value basis and/or the designationeliminates or significantly reduces an accounting mismatch which would otherwise arise.

Subsequent to initial recognition, these instruments are measured as set out below.

1.2.1. Investments

Investments are classified at fair value through the statement of changes in net assets and funds and are measured at fairvalue.

Other loans

Other loans are non-derivative financial assets with fixed or determined payments that are not quoted in an active marketand are recognised when the asset is acquired using trade date accounting.

Investment property and owner occupied property

Investment properties are held to earn rental income and appreciate capital value. Owner-occupied properties are held foradministrative purposes. This distinguishes owner-occupied properties from investment properties. Investment propertiesare accounted for by means of the fair value model and are carried at market value determined annually by externalindependent professional valuers. Fair value adjustments are included in the net surplus or deficit for the period. Investmentproperties are not subject to depreciation.

Equities

Property is initially recorded at cost. Land and buildings are subsequently shown at market value, based on triennialvaluations by external independent valuers, less subsequent depreciation. The remaining property and plant is stated athistorical cost less depreciation. Increases in the carrying amount arising on revaluation are credited to the revaluationreserve.

Decreases that offset previous increases of the same asset are charged against the revaluation reserve; all otherdecreases are charged to the income statement. Each period the difference between depreciation based on the revaluedcarrying amount of the assets (the depreciation charged to the Statement of Changes in Net Assets and Funds) anddepreciation based on the asset’s original cost is transferred from the revaluation reserve to accumulated funds.

Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately toits recoverable amount. Impairment losses are recognised.

Gains and losses on disposal of property and land are determined by reference to their carrying amount and are taken intoaccount in determining the net surplus or deficit. Maintenance and repairs, which neither materially add to the value ofassets nor appreciably prolong their useful lives, are charged against income.

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SCHEDULE HANOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 30 JUNE 2017

1.2.1. Investments (continued)

Asset impairmentAsset impairment tests are applied annually to assets whose measurement basis is historic cost or historic cost as adjustedfor revaluations. An impairment loss is recognised when as asset’s carrying value exceeds its recoverable amount.

Impairment losses are initially adjusted against any applicable revaluation reserve then expensed in the statement ofchanges in net assets and funds. If the impairment loss for an asset exceeds the carrying value of the asset the excess isrecognised as a provision.

The recoverable value is the higher of the asset’s fair value less costs to sell and its value in use. Fair value less costs tosell is the amount obtainable from the sale of the asset in an arm’s length transaction between knowledgeable, willingparties, less the cost of disposal. Value in use is the present value of estimated future cash flows expected to flow from thecontinuing use of the asset and from its disposal at the end of its useful life.

If the recoverable amount of an asset subsequently exceeds the carrying value resulting from the application of itsaccounting policy, an impairment reversal is recognised to that extent. The impairment reversal is applied in reverse orderto the impairment loss.

Insurance policies

Linked or market-related policiesIf the policy is unitised, the value is equal to the market value of the underlying units. Other linked or market-related policiesare valued at the market value of the underlying assets for each policy, in line with the insurer’s valuation practices.

Collective investment schemeInvestments in collective investment schemes are valued at fair value which is the quoted unit values, as derived by thecollective investment scheme manager with reference to the rules of each particular collective investment scheme,multiplied by the number of units.

Investment in participating employersInvestments in participating employer(s) comprise loans, investments in listed and unlisted equities and other investments.Refer to respective policies for basis of accounting.

1.2.2. Housing loans

Housing loans are measured at fair value. Housing loans are derecognised when the right to receive cash flows from themember has expired or been transferred and the Fund has also transferred substantially all risks and rewards of ownership.

1.2.3. Accounts receivable

Accounts receivable are financial assets measured initially at fair value and subsequently measured at amortised cost usingthe effective interest rate method, less any allowance for impairment.

1.2.4. Cash and cash equivalents

Cash and equivalents comprise cash in hand, deposits held at call with banks, and other short-term highly liquidinvestments with original maturities of three months or less. Cash and cash equivalents are measured at fair value.

1.2.5. Accounts payable

Accounts payable are financial liabilities measured initially at fair value, net of transaction costs that are directly attributableto the liability and subsequently measured at amortised cost using the effective interest rate method.

1.3. RESERVES

Reserve accounts comprise particular amounts of designated income and expenses as set out in the rules of the Fund andare recognised in the year in which such income and expenses accrue to the Fund.

1.4. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions

Provisions are recognised when the Fund has a present legal or constructive obligation as a result of past events, for whichit is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of theamount of the obligation can be made. Where the effect of discounting to present value is material, provisions are adjustedto reflect the time value of money.

- 21 -



1.5. FOREIGN CURRENCIES

Transactions in foreign currencies are accounted for at the ruling rate of exchange on the transaction date. Assets andliabilities in foreign currencies are converted at the ruling rate of exchange on the statements of net assets and funds date.

Gains and losses on conversion are dealt with in the statement of changes in net assets and funds.

Income and expenditure relating to foreign investments are converted to South African currency at appropriate weightedaverage exchange rates, for the period.

1.6. INVESTMENT INCOME

Investment income comprises of dividends, interest and adjustment to fair value.

Dividends

Dividend income is recognised in the statement of changes in net assets and funds when the right to receive payment isestablished – this is the last date to trade for equity securities. For financial assets designated at fair value through thestatement of changes in net assets and funds, the dividend income forms part of the fair value adjustment.

Interest

Interest income in respect of financial assets held at amortised cost is accounted for in the statement of changes in netassets and funds using the effective interest rate method.

Collective investment schemes’ distribution

Distribution from collective investment schemes are recognised when the right to receive payment is established.

Income from policies with insurance companies

Income from investment policies from insurance companies is included in the adjustment to the movement of the financialasset.

Adjustment to fair value

Gains or losses arising from changes in the fair value of financial assets are presented in the statement of changes in netassets and funds in the year in which they arise.

Expenses incurred in managing investments

Expenses in respect of the management of investments are recognised as the service is rendered.

1.7. BENEFITS

Benefits payable and pensions are measured in terms of the rules of the Fund.

Benefit payments and monthly pension payments are recognised as an expense when they are due and payable in terms ofthe rules of the Fund. Any benefits not paid at the end of the reporting year are recognised as a current liability – benefitspayable / due.

Reinsurance proceeds

Reinsurance proceeds are measured at the fair value of the consideration received or receivable and are accrued andrecognised as income at the same time as the recognition of the related claim.

1.8. TRANSFERS TO AND FROM THE FUND

Section 14 and 15B transfers to or from the Fund are recognised on the date of approval of the scheme/arrangement oftransfer of business by the Financial Services Board, as contained in the approval certificate from the Registrar.

Individual transfers (Section 13A(5) transfers) are recognised on the earlier of receipt of the written notice of transfer(Recognition of Transfer) or receipt of the actual transfer value.

All the above transfers are measured at the values as per the section 14 application or the value of the transfer at effectivedate of transfer adjusted for investment return or late payment interest as guided by the application.

- 22 -



1.9. ADMINISTRATION EXPENSES

Expenses incurred in the administration of retirement funds are recognised in the statement of changes in net assets andfunds in the reporting year to which they relate.

In the event that an expense has not been paid at the end of a reporting year, the liability will be reflected in the accountspayable note. If the expense was paid in advance or an overpayment occurred, the applicable amount will be disclosedunder the accounts receivable note.

1.10. RELATED PARTIES

In considering each possible related-party relationship, attention is directed to the substance of the relationship and notmerely the legal form.

If there have been transactions between related parties, the Fund shall disclose the nature of the related party relationshipas well as the following information for each related party relationship:• the amount of the transactions;• the amount of outstanding balances;• their terms and conditions, including whether they are secured, and the nature of the consideration to be provided in

the settlement;• details of guarantees given or received;• provisions for doubtful debts related to the amount of outstanding balances; and• the expense recognised during the year in respect of bad or doubtful debts due from related parties.

1.11. ACCOUNTING POLICIES, CHANGING IN ACCOUNTING ESTIMATES AND ERRORS

The Fund applies adjustments arising from changes in accounting policies and errors prospectively. The adjustment relatingto a change in the accounting policy or error is therefore recognised in the current and future years affected by the change.

- 23 -



2.

2.1.

INVESTMENTS

Investment summary

Note Local

R

Foreign

R

Total currentyear

R

Total previousyear

R

Fair valuecurrent year

RCash 102 877 715 - 102 877 715 78 120 644 102 877 715Commodities 825 561 - 825 561 5 771 180 825 561Debt instruments including Islamic debt instruments 5 937 051 639 - 5 937 051 639 6 292 347 717 5 937 051 639Investment properties and Owner occupied properties 2.2. 331 488 657 - 331 488 657 323 557 834 331 488 657Equities (including demutualisation shares) 66 921 644 - 66 921 644 379 578 388 66 921 644Insurance policies 437 208 241 - 437 208 241 391 411 646 437 208 241Collective investment schemes 1 219 285 553 518 210 556 1 737 496 109 1 795 553 704 1 737 496 109

Total 8 095 659 010 518 210 556 8 613 869 566 9 266 341 113 8 613 869 566

- 24 -



2.2. Investment properties and owner occupied investments

2.2.1. Current year

Instrument AddressValuationmethod

Date of lastvaluation

Pledged asa guarantee

At beginningof year

RAdditions

R

RevaluationReserve

RAt end of

yearR

Investment PropertiesThe Bridge Property 321 404 000 - 2 884 657 324 288 657Oakhurst Property - 7 200 000 - 7 200 000Total of properties 321 404 000 7 200 000 2 884 657 331 488 657

3. HOUSING LOAN FACILITIES

3.1. Housing loans

At beginningyear

Repaid At end of year

R R RLoans granted in terms of the rules of the Fund and section 19(5) of the Pension Funds Act 76 441 (59 379) 17 062

Total 76 441 (59 379) 17 062

The security for the housing loans granted to members is the members' withdrawal benefit. The interest rate charged is 11% and the repayments are made monthly. Overpayments of housing loans of R 91 454 reflects under accounts payable, as these amounts needs to be refunded to the members.

- 25 -



4. ACCOUNTS RECEIVABLE

30 June 2017R

30 June 2016R

Overpaid benefits by NMG - refundable by NMG 1 830 762 -Printing & stationery - 4 349South African Revenue Service - PAYE 453 703 -Insurance - payable by City of Johannesburg Pension Fund - 27 940Rental office space - 42 177Distribution from Growthpoint 11 003 149 -Prepaid - Fidelity Insurance premiums (2016 - 2017 period) 150 500 -

Total 13 438 114 74 466

- 26 -



5. TRANSFERS FROM OTHER FUNDS

Effectivedate

At beginning ofyear

Transfersapproved

Return onTransfers

Assetstransferred

At end ofyear

R R R R RTransfers from City of Johannesburg Pension Fund - Retirements Various - 25 378 273 - (25 378 273) -

Total - 25 378 273 - (25 378 273) -

Transfers approved 25 378 273Return on transfers -

Statement of changes in net assets and funds 25 378 273

6. TRANSFERS TO OTHER FUNDS

Effectivedate

No. ofmembers

At beginning ofyear

Transfersapproved

Return onTransfers

Assetstransferred

At end ofyear

R R R R RIndividual transfers out Various 44 2 392 588 52 744 003 712 506 (46 665 178) 9 183 919

Total 44 2 392 588 52 744 003 712 506 (46 665 178) 9 183 919

Transfers approved 52 744 003Return on transfers 712 506


- 27 -



7. BENEFITS

7.1. Benefits - current members

At beginning ofyear

Benefits forcurrent period

Return allocated Payments Transferred tounclaimed benefits

At end of year

R R R R R RMonthly Pensions 5 321 714 475 715 317 - (472 680 497) - 8 356 534Lump sums on retirements - Full benefit 56 373 422 141 596 006 532 599 (185 394 005) - 13 108 022Lump sums before retirement - Early payment of lumpsum benefit 3 080 457 57 367 575 277 669 (51 812 144) - 8 913 557 - Death benefits 2 231 620 29 537 352 2 003 471 (23 269 443) (2 953 568) 7 549 432 - Withdrawal benefits 7 817 954 47 515 587 1 531 953 (41 062 304) (1 545 611) 14 257 579

Total 74 825 167 751 731 837 4 345 692 (774 218 393) (4 499 179) 52 185 124

Benefits for current year 751 731 837Return allocated 4 345 692


8. UNCLAIMED BENEFITS

30 June 2017R

30 June 2016R

Balance at the beginning of the year 83 882 552 91 670 869Transferred from benefits payable 4 499 179 3 919 017Investment income allocated 3 173 486 1 497 554Less:• Benefits paid (22 674 010) (13 204 888)

Balance at the end of the year 68 881 207 83 882 552

- 28 -



9. ACCOUNTS PAYABLE

30 June 2017R

30 June 2016R

Audit fees 376 200 644 100South African Revenue Service - PAYE/IT88/Provisional tax 1 629 949 828 999Investment consulting fees - Riscura (Pty) Ltd - 3 990Administration fees 72 802 72 807Asset management fees - Colourfield 803 160 789 145Bonus provision 40 000 40 000Contributions overpaid - housing loans 91 454 221 330Overpayment of additional service purchased 25 819 49 570Board of Fund expenses 37 479 -South African Reserve Bank reporting cost 6 276 11 423City of Johannesburg Pension Fund - in respect of Section 14 transfers - 19 715 607Regulation 28 reporting fees 31 920 -Early Payment Lumpsum fee - NMG 1 469 -

Total 3 116 528 22 376 971

10. CONTRIBUTIONS

At beginning ofyear

Contributionsreceived

At end ofyear

R R RAdditional service purchased 52 043 (52 043) -

Total 52 043 (52 043) -

Towards retirement -Towards reinsurance and expenses -

Statement of changes in net assets and funds -

11. NET INVESTMENT INCOME

30 June 2017R

30 June 2016R

Income from investments 177 638 587 151 027 049• Dividends - 13 621 727• Interest 9 822 355 51 877 985• Rentals 26 003 149 26 822 432• Collective investment schemes distribution 101 415 200 58 989 009• Income from insurance policies 40 397 883 (284 104)Interest on bonds 28 652 362 650 608 971Interest received housing loans - 53 500Adjustment to fair value (178 077 052) (28 239 703)

28 213 897 773 449 817Less: Expenses incurred in managing investments (6 360 758) (5 313 522)Less: Interest paid on borrowings (11 701 509) (11 384 951)

Total 10 151 630 756 751 344

- 29 -



12. OTHER INCOME

30 June 2017R

30 June 2016R

Overpaid benefits by NMG - refundable NMG 2 312 542 -Recovery of home loan debt - 115 634Interest received - purchased service (648) -Professional indemnity claim - 13 857

Total 2 311 894 129 491

13. ADMINISTRATION EXPENSES

30 June 2017R

30 June 2016R

Actuarial fees 3 962 025 2 631 050Administration fees 780 781 2 061 774Audit fees - Expenses 299 564 658 817South African Reserve Bank reporting cost 11 987 6 521Investment consulting fees - Riscura (Pty)Ltd - 540 710Housing loan refund 32 955 -Building levies 67 260 -Fidelity Insurance premiums 150 500 150 000Financial Services Board levies 151 602 144 507Other Expenses 5 081 442 3 200 606Bank charges 370 737 226 275Catering 104 587 82 271Cleaning expenses 58 017 44 390Conference expenses 51 041 42 323Communication expenses 110 -Computer equipment 11 176 -Purchased service 63 174 -Fund rebranding 102 600 -Legal fees 2 716 172 731Office expenditure 976 619 256 560Office IT expenses 27 056 -Office insurance premium 8 396 31 003Pensioner administration fees 2 880 238 1 133 848Petty cash 522 -Metro filing expenses 87 790 69 643Postage and telephone 78 116 -Printing and stationery 121 249 159 542Regulation 28 reporting cost 73 872 -Furniture and fittings - 500 388Photocopy rental expenses 63 426 81 323Office rental expenses - 382 478Institute of Retirement Funds - 17 831Municipal expenses 92 595 -Tracing fees 45 063 -Financial Services Board penalties - 900Staff expenses 13.1 1 051 577 1 012 722Board of Fund expenses 13.2 377 593 197 722Principal Officer expenses 13.3 1 152 114 1 090 346

Total 13 257 058 11 695 675

13.1. Staff expenses30 June 2017

R30 June 2016

RRemuneration 1 051 577 1 012 722

Total 1 051 577 1 012 722

- 30 -



13.2. Board of Fund expenses30 June 2017

R30 June 2016

RExpenses 32 147 70 123Remuneration 291 449 108 640Travel & accomodation 53 997 18 959

Total 377 593 197 722

13.3. Principal Officer expenses30 June 2017

R30 June 2016

RPrincipal officer expenses - Remuneration 1 149 481 1 087 838Principal officer expenses - Batseta Annual Subscription 2 633 2 508

Total 1 152 114 1 090 346

14. PRIOR PERIOD ADJUSTMENTS

30 June 2017R

30 June 2016R

City of Johannesburg Pension Fund* - (19 715 607)Prior period adjustment Oakhurst Property** 6 981 894 -Contributions overpaid - Purchased Service*** - 309 933

Total 6 981 894 (19 405 674)

*The prior period adjustment is in respect of Section 14 transfers of City of Johannesburg Pension fund.

**The Oakhurst property was purchased in June 2016 and was not shown on the 2016 financial statements.

***Contributions overpaid - purchased service is in respect of prior years written back as per the Board of Fund and valuatorapproval.

15. RISK MANAGEMENT POLICIES

Risk management framework

The Board of Fund has overall responsibility for the establishment and oversight of the fund’s risk management policies. TheBoard of Fund has established the Risk Management Committee, which is responsible for developing and monitoring the fund’srisk management policies. The committee reports regularly to the Board of Fund on its activities.

The fund’s risk management policies are established to identify and analyse the risks faced by the fund, to set appropriate risklimits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularlyto reflect changes in market conditions and the fund’s activities.

• Solvency risk

Solvency risk is the risk that the investment returns on assets will not be sufficient to meet the Funds contractualobligations to members.

Continuous monitoring by the Board and the fund’s actuary takes place to ensure that appropriate assets are heldwhere the funds obligation to members are dependent upon the performance of specific portfolio assets and that asuitable match of assets exists for all other liabilities.

- 31 -



15. RISK MANAGEMENT POLICIES (continued)

• Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation, and cause theFund to incur a financial loss.

The Board of Fund monitors receivable balances on an ongoing basis with the result that the Fund’s exposure to baddebts is not significant. An appropriate level of provision is maintained.

Housing loan guarantees granted are secured by the after tax withdrawal benefit of the respective members on whosebehalf the guarantees were granted. The amount of the guarantee may not exceed 60% of the fund credit of therespective members. Housing loan guarantees granted are renewed annually to ensure that the general terms andconditions are still applicable.

The Fund's assets are only invested through investment managers who are Financial Advisory and IntermediaryServices compliant. The Fund's investment mandate stipulates that the investment manager should monitor the risksassociated with the Fund's investments on a regular basis.

Credit risk is managed by the Fund's outsourced investment managers by investing in well-researched institutions andwithin the parameters of the investment mandate. The investment manager must report annually on the steps taken toidentify and manage the credit risk, in terms of the Fund's Risk management policy.

• Legal risk

Legal risk is the risk that the fund will be exposed to contractual obligations which have not been provided for. Legalrepresentatives of the fund monitor the drafting of contracts to ensure that rights and obligations of all parties areclearly set out.

• Cash flow risk

Cash flow risk is the risk that future cash flows associated with monetary financial instrument will fluctuate in amount.In the case of a floating rate debt instrument, for example, such fluctuations result in a change in the effective interestrate of the financial instrument, usually without a corresponding change in its fair value.The Board of Fund monitors cash flows by using monthly cash flow projections.

• Currency risk

Currency risk is the risk that the value of an instrument will fluctuate in Rands owing to changes in foreign exchangerates. The Fund’s exposure to currency risk is mainly in respect of foreign investments made on behalf of members ofthe Fund for the purpose of seeking desirable international diversification of investments. The Board of Fund monitorsthis aspect of the fund’s investments and limits it to 25% of total assets.

The Board of Fund monitors this aspect of the Fund's investments and limits it to South African Reserve Bank limits oftotal assets.

The foreign currency exposure of the Fund is monitored each quarter with the submission of the quarterly assetallocation reports to the South African Reserve Bank. Investment managers invest the Fund's assets according to theinvestment mandate that stipulates the foreign exposure strategy of the Fund.

• Liquidity risk

Liquidity risk is the risk that the fund will encounter difficulty in raising funds to meet commitments associated withfinancial instruments.

The fund’s liabilities are backed by appropriate assets and it has significant liquid resources.

• Market risk

Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices ofmarket interest rates.

- 32 -



15. RISK MANAGEMENT POLICIES (continued)

• Investments

Investments in equities are valued at fair value and therefore susceptible to market fluctuations. Investments aremanaged with the aim of maximising the fund’s returns while limiting risk to acceptable levels within the framework ofstatutory requirements.

Continuous monitoring takes place to ensure that appropriate assets are held where the liabilities are dependent uponthe performance of specific portfolios of assets and that a suitable match of assets exists for all non–market relatedliabilities.

• Price risk

Price risk is the risk that the value and/ or future cash flows of a financial instrument will fluctuate as a result ofchanges in market prices.

• Interest rate risk

Interest rate risk is the risk that the value and /or future cash flows of financial instruments will fluctuate as a result ofchanges in interest rates.

The Board of Fund monitors exposures to interest rate risk by using monthly cash flow projections.

16. RELATED PARTY TRANSACTIONS

The fund has made payments to NMG Consultant's and Actuary's (Pty) Ltd for administration fees amounting to R 780 781.

- 33 -



17. SURPLUS AND RESERVE ACCOUNTS

ReserveAccounts Total

Bonus reserve Solvencyreserve

Pension fundingreserve

Expensereserves

R R R R RAt beginning of year 9 112 678 095 566 841 313 739 806 841 7 591 149 802 214 880 139Prior period adjustment Oakhurst Property** 6 981 894 - - 6 981 894 -Actuarial adjustment - 50 482 119 (231 463 836) 193 176 910 (12 195 193)Net investment income 10 151 630 580 453 872 634 8 530 350 168 193Allocated to unclaimed benefits (3 173 486) - - (3 173 486) -- Overpaid benefits by NMG - refundable NMG 2 311 894 - 2 311 894 - -- Administration costs (13 257 058) - - - (13 257 058)Net income before transfers and benefits 9 115 692 969 617 903 885 511 527 533 7 796 665 470 189 596 081Transfers and benefits (783 786 337) (41 133 216) - (742 653 121) -Transfers from other funds 25 747 701 1 980 592 - 23 767 109 -Transfers to other funds (53 456 509) - - (53 456 509) -Benefits (756 077 529) (43 113 808) - (712 963 721) -Net income after transfers and benefits 8 331 906 632 576 770 669 511 527 533 7 054 012 349 189 596 081Retirement benefits accrual 170 021 951 - - 170 021 951 -

At end of year 8 501 928 583 576 770 669 511 527 533 7 224 034 300 189 596 081

- 34 -


REPORT OF THE VALUATORFOR THE YEAR ENDED 30 JUNE 2017

- 35 -


REPORT OF THE VALUATORFOR THE YEAR ENDED 30 JUNE 2017

- 36 -

Head Office 20 Morris Street East, Woodmead, 2191

P.O. Box 2939, Saxonwold, 2132

Tel: +27 (0) 11 231 0600

Fax: +27 (0) 11 234 0701 Victor Sekese (Chief Executive) A comprehensive list of all Directors is available at the company offices or registered office. SizweNtsalubaGobodo Incorporated. Registration Number: 2005/034639/21

SCHEDULE I JOHANNESBURG MUNICIPAL PENSION FUND REPORT OF THE INDEPENDENT AUDITORS OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS We have performed the procedures agreed with the Registrar of Pe sio Fu ds the Registrar a d set out below with respect to the audited fi a ial state e ts a ual fi a ial state e ts and other information in the general ledger and management information comprising the accounting records of Johannesburg Municipal Pension Fund (the Fu d for the year e ded 30 June 2017. Our engagement was undertaken in accordance with the International Standard on Related Services (ISRS) 4400 Engagements to perform agreed-upon procedures regarding financial information. Our procedures were performed solely to assist the Registrar in evaluating whether any instances of non-compliance with the requirements of the relevant sections of the Pension Funds Act of South Africa (the Act), regulations and rules of the Fund were identified. The responsibility for determining the adequacy or otherwise of the procedures agreed to be performed, is that of the Registrar. Procedures and findings Our procedures performed are set out in the numbered paragraphs (not bold) in the attached table, which forms part of our report, together with our findings thereon. Unless otherwise indicated, all balances, lists, schedules etc. referred to in the table relate to the accounts/balances reflected in the annual financial statements of the Fund for the year ended 30 June 2017. Because the procedures do not constitute an audit, a review or other assurance engagement performed in a orda e ith the IAASB s I ter atio al Sta dards, we do not express any assurance. Had we performed additional procedures, or had we performed an audit, a review, or other assurance engagement, other matters might have come to our attention that would have been reported. Restriction on use and distribution Our report is solely for the purpose set out in the first paragraph of this report and for the information of the Registrar and accordingly may not be suitable for any other purpose and distributed to other parties. This report relates only to the information specified and does not extend to the annual financial statements of the Fund taken as a whole.


SCHEDULE I JOHANNESBURG MUNICIPAL PENSION FUND Page 38

REPORT OF THE INDEPENDENT AUDITORS OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings Our procedures and the corresponding findings thereon are summarised in the table below: Procedures Findings Statement of Net Assets and Funds 1 Investments 1.1 We inspected the list of investment balances reflected in the general ledger of the Fund as at 30 June 2017 for any investments in accordance with the terms of section 19(4) of the Act. We found that the fund does not hold investments prohibited in terms of section 19(4) of the Act. 1.1.1 We agreed details of the written confirmations obtained from the investment managers/insurers to the investment balances reflected in the general ledger. We found that the details of the written confirmations obtained from the investment managers/insurers agreed to the investment balances reflected in the general ledger. 1.1.2 Where investments held in the participating Employer exceed 5% of the total assets as reflected in the financial statements inspected the appropriate approval of the Registrar. We found that the investment held did not exceed the 5% of total assets as reflected in the financial statements. 1.2 We obtained the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandate between the Fund and the investment administrator(s), and performed the following procedures on a sample of 10 mandates (comprising the 3 largest by value of investments at year end and other randomly selected mandates): 1.2.1 We inspected whether the underlying investments are in compliance with the signed investment policy statement and, where applicable, the portfolio management agreement/investment mandates. We found that the underlying investments were in compliance with the signed investment policy statement. 1.2.2 We inspected whether the investment mandate and the investment policy statement provide for securities lending transactions and investments in hedge funds, private equity funds and derivatives, as prescribed. We found that the investment policy statement provides for investments in hedge funds, private equity funds and derivatives, as prescribed. 1.2.3 We inspected whether the collateral and counterparty requirements as prescribed are complied with. Not applicable as the fund did not undertake transactions in securities lending. 1.2.4 For segregated portfolios, we confirmed directly with the investment administrator(s): (a) whether scrip lending took place during the year and, if so, (b) whether there was collateral provided by the counterparty/(ies) for any scrip lending activities and, if so, (c) the percentage exposure covered by the collateral. For segregated portfolio, we confirmed that scrip lending did not take place during the year.


REPORT OF THE INDEPENDENT AUDITORS OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 2 Member individual accounts (defined contributions funds as well as defined contribution section of hybrid funds) 2.1 We obtained a list of member individual accounts as reflected on the Statement of Net Assets and Funds as at 30 June 2017. 2.2 We selected a random sample of 50 members from the list of members and performed the following procedures: 2.2.1 We compared the member and employer contributions received and allocated for the members selected as reflected on the ad i istrator s syste , to i for atio supplied y the participating employers. We found that the Fund is a closed Fund. We found there are no member and employer contributions. 2.2.2 We compared the member and employer contribution rates for the members selected as refle ted o the ad i istrator s syste , to the rules of the Fund. Not applicable. 2.2.3 In respect of unitised investment products, for the three months selected in 2.2.1 and 2.2.2, we calculated the conversion of the contributions at the unit price per the administration system on the dates that the contributions were invested and compared the units recalculated to the administration system units for the selected members. Inspected that the units were added to the existing units for that member. Not applicable as the Fund is not unitised. 2.2.4 In respect of unitised investment products, we calculated the conversion of units at the end of the year, at the year-end unit price per the administration system and agreed the calculated a ou t to the e er s fu d redit a ou t recorded in each member's record. Not applicable as the Fund is not unitised. 2.2.5 In respect of unitised investment products, we compared the unit price(s) as per investment manager at the year-end to the unit prices on the administration system used to calculate each

e er s redits at year-end. Not applicable as the Fund is not unitised.


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THEBOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Statement of Net Assets and Funds (continued) 2.2.6 In respect of non-unitised investment products, we compared the interim and/or final return allocated to each individual member's account in the administrator's records for the year under review to the return approved in accordance with a resolution of the Board of Fund or the rules of the Fund or approved recommendation by the investment consultant/asset manager/fund valuator. Not applicable as the Fund is structured as a defined benefit fund. 2.3 We obtained a list of members who switched investment portfolios during the year from the Fund/administrator, selected a random sample of the lesser of 25 or 10% of members who switched between investment portfolios during the year, and performed the following procedures: 2.3.1 We inspected evidence that the portfolios were switched in accordance with notification of the e er s i stru tio / i est e t strategy (including life stage models) of the Fund and within a timeframe as specified in the service level agreement or client mandate between the administrator and the Fund. Not applicable as there is no member individual choice. 2.3.2 We inquired as to whether any fees relating to switches were deducted, and if so, inspected evidence of the approval by the Board of Fund and/or in terms of a service level agreement or client mandate. Not applicable as there were no member switches. 2.4 For investment products we obtained the Asset Liability Match (ALM) reconciliation per investment portfolio, excluding the reserve accounts, for member individual accounts from the administrator, and we performed the following procedures: 2.4.1 We compared the investments per product on the ALM reconciliation to the investment certificates in total. Not applicable as the Fund is structured as defined benefit fund. 2.4.2 We compared the member individual accounts on the ALM reconciliation per investment portfolio to the administration system and to the total member individual accounts as disclosed in the Statement of Net Assets and Funds. Not applicable. 2.4.3 Inspected whether the total mismatch (in Rand) for all portfolios was within the range as prescribed by the Registrar. Not applicable.


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 3 Accumulated funds (for defined benefit funds as well as defined benefit sections of hybrid funds) 3.1 We selected a sample of members from the list of members provided by the administrator and performed the following procedures for each member selected: 3.1.1 We compared the member contributions received and allocated for the members selected as reflected on the administrator s syste , to information supplied by the participating employers for those members selected, for a randomly selected period of 3 months. Not applicable as the fund is structured as a defined benefit fund. 4 Surplus apportionment scheme 4.1 If a surplus apportionment scheme was approved by the Registrar in the current year or if allocation and/or payments to members were made during the year, we performed the following procedures: 4.1.1 Active members: We selected a random sample of the lesser of 25 or 10% of number of active members to whom surplus has been apportioned in the approved surplus apportionment scheme and performed the following procedures: 4.1.1.1 We agreed the original surplus amount allocated to the selected member to the individual allocation on the member records per the administration system. Not applicable as there were no surplus apportionment in the year under review. 4.1.1.2 We inspected whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Act and allocated to the member records in the administration system. Not applicable as there were no surplus apportionment in the year under review. 4.1.2 Former members and pensioners: We selected a random sample of the lesser of 10% of number of former members and pensioners as defined by the surplus apportionment scheme from the surplus schedules attached to the approved surplus apportionment scheme and performed the following procedures: 4.1.2.1 We agreed the original surplus amount allocated to the selected member and/or pensioner to the individual allocation on the member records per the administration system. Not applicable as there were no surplus apportionment in the year under review.


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Surplus apportionment scheme (continued) 4.1.2.2 We inspected whether the calculation of the relevant investment return from surplus apportionment date to date of allocation was in accordance with the requirements of the Act and allocated to the member records in the administration system. Not applicable to the Fund as no surplus apportionment was approved by the Financial Services Board for the period ended 30 June 2017. 4.1.2.3 We agreed the total of the amount calculated in 4.1.2.1 and 4.1.2.2 to the surplus benefit paid per selected member and to the applicable amount per the administration system and other authorised supporting documentation. Not applicable to the fund as no surplus apportionment was approved by the Financial Services Board for the period ended 30 June 2017. 5 Member and employer surplus accounts 5.1 We obtained the analysis of the transactions in the member and/or employer surplus account per the annual financial statements, and performed the following procedure: 5.1.1 We inspected that the transactions are permitted in terms of the registered rules of the Fund and/or the Act. Not applicable as the Fund does not have member or employer surplus accounts. 6 Reserves 6.1 We obtained the list of reserves and other related accounts (e.g. pensioner accounts) and the movements per the financial statements and/or in the actuarial valuation, and performed the following procedures: 6.1.1 We inspected whether the reserve and other related accounts (e.g. pensioner accounts) held by the Fund and/or reflected in the actuarial valuation are in accordance with the registered rules of the Fund. We found that the reserves held by the Fund and reflected in the actuarial valuation are in accordance with the registered rules of the Fund. 6.1.2 We inspected that the movements in reserves and other related accounts as set out in 6.1 are permitted in terms of the registered rules of the Fund and/or the Act. We inspected the movements in reserves as set out in 6.1 and we found that the movements are permitted in terms of the registered rules of the Fund. 7 Other assets, liabilities and guarantees 7.1 We obtained the list of housing loans granted to members by the Fund in terms of section 19(5) of the Act as at 30 June 2017, and performed the following procedure: 7.1.1 We agreed the total loans on the above list to the corresponding account in the annual financial statements. Not applicable as there were no housing loans granted in the year under review.


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings Other assets, liabilities and guarantees (continued) 7.2 From the list in 7.1, we randomly selected a sample of 10 of the u er of e ers housi g loa s granted and performed the following procedures: 7.2.1 We inspected evidence that the value of the housing loan provided does not exceed the amount permitted by the rules and the home loan agreement. Not applicable as there were no housing loans granted in the year under review. 7.2.2 We inspected evidence that the housing loan has been granted in terms of Section 19(5) (a). We found that housing loans were granted in terms of Section 19(5) (a). 7.2.3 We inspected evidence that repayments are being made in accordance with the housing loan agreement. 7.2.4 We inspected the interest charged on the outstanding housing loan and compared the rate used to the prescribed rate. We found that the interest charged on the outstanding housing loan was in line with the prescribed rate. 7.2.5 If the Fund issued more than 100 housing loans or the total principal debt of all outstanding housing loans exceeded R500 000, we inquired whether the Fund was registered as a credit provider under the National Credit Act, 2005 (the NCA). Not applicable as all outstanding housing loans did not exceed R500 000 or 100 housing loans. 7.3 We obtained the list of housing loan guarantees and selected a sample of housing loan guarantees and performed the following procedures: 7.3.1 For the sample selected, we determined that each selected housing loan guarantee did not exceed the value of the benefit that the member would become entitled to had they withdrawn, as at the year end, in terms of the Act, the loan agreement and/or the rules of the Fund. Not applicable as there were no housing loan guarantee granted in the year under review. 7.3.2 Inspected evidence that the housing loan guarantee has been granted in terms of Section 19(5)(a). Not applicable as there were no housing loan guarantee granted in the year under review. 7.4 We obtained a list of other loans per the general ledger of the Fund as at 30 June 2017 and performed the following procedure:


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 7.4.1 We confirmed that no loans were granted and/or investments made as prohibited in terms of section 19(5)B. Not applicable as there were no other loans that were granted in terms of the requirements of section 19 (5)B. 8 Contributions 8.1 We selected 100% of participating employers from a list of participating employer supplied by the Fund/administrator and performed the following procedures: 8.1.1 We compared, in total, the contributions received by or on behalf of the Fund to the remittance advices from the participating employer/pay-point. We found that the Fund is a paid up Fund. We found there are no member and employer contributions. 8.1.2 We inspected the bank statements for the date on which the cash was received to determine whether the contributions were deposited with a registered bank in accordance with section 13A of the Act and whether late payment interest has been raised in terms of regulation 33, where applicable. Not applicable. 8.2 We selected pay points from the list of participating employers which reflect arrear contributions at year-end from a list supplied by the Fund/administrator and performed the following procedure: 8.2.1 We inspected the accounting records of the Fund to determine whether amounts disclosed as arrear contributions at year-end have been paid to the Fund within the prescribed period in accordance with the requirements of section 13A of the Act. Where the amounts were received after the prescribed period, we reported the date of receipt and where they were not received, indicate as such. We found that the Fund is a paid up Fund. We found there are no member and employer contributions. .


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 9 Benefits 9.1 We obtained a list from the administration system of lump sum benefits reflected as expenses in the

Fu d s State e t of Cha ges i Net Assets a d Funds for the year under review and performed the following procedure: 9.1.1 We compared the list to the respective general ledger benefit expense accounts reconciliation. We found that the list agreed to the respective general ledger benefit expense accounts reconciliation. 9.2 We selected a sample of the lesser of 50 benefits or 10% of the total number of benefits from the list and performed the following procedures: 9.2.1 We compared the benefit per selected member to the administration system and authorised supporting documentation in accordance with the procedures of the Fund. We found that the benefit paid agreed to the Everest system and authorized supporting documentation in accordance with the procedures of the Fund. 9.2.2 For death benefits, where a portion of the benefit had been reinsured by the Fund, we inspected a bank deposit or an accrual raised for the recovery from the insurer. We found that death the benefits were not reinsured. 9.2.3 For a defined contribution fund We agreed the opening fund credit for the member to the opening fund credit report and determined whether contributions were added every month until the date of exit (either by Rand amount or in the case of unitised funds, by units). Agreed the balance paid out to the member (inclusive of late payment interest where applicable) to the fund credit report or administration system as at the date of exit. Not applicable as the Fund is structured as a defined benefit fund.


REPORT OF THE INDEPENDENT AUDITOR OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 9 Benefits (continued) 9.3 We obtained a list of all benefits not yet paid at year-end, selected a sample of benefits from the list and performed the following procedures: 9.3.1 We agreed whether the benefits that are older than the period as set out in the Act or a shorter period defined by the rules are classified as unclaimed benefits. We found that benefits older than the period set out in the Act are classified as unclaimed benefits. 10 Transfers 10.1 We obtained the list of section 14 transfers paid/received and accrued to and from the Fund throughout the year and selected a sample of transfers and performed the following procedures: 10.2 We compared the above list of total section 14 transfers to and from the Fund to the corresponding accounts in the general ledger. We found that the above list of total section transfers from the Fund agreed to the corresponding account in the general ledger. 10.2.1 We agreed the sample of section 14 transfers to and from the Fund to: a) the section 14(1) documentation as approved by the Registrar in respect of each transfer; and/or b) the section 14(8) documentation as prescribed. We found that the section 14 transfers agreed to the section 14(1) documentation as approved by the Registrar in respect of each transfer. 10.2.2 We inspected whether the transfers to and from the Fund were received/paid within 60 days of Registrar approval for section 14(1) transfers and 180 days from the application date for section 14(8) transfers and whether the growth and investment return had been allocated from the effective date of the transfer to the date of final settlement. We found that the transfer were paid within 60 days of Registrar approval. 10.2.3 In respect of unitised funds, we selected a sample of the lesser of 25 or 10% of the number of members transferred from other funds and recalculated the purchase of units for the amount received using the unit price per the administration system on the date of receipt. (Where units were purchased after date of receipt, investment return was added from the date of receipt to the date of purchase). Not applicable as the Fund is not unitised.


REPORT OF THE INDEPENDENT AUDITORS OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 10 Transfers (continued) 10.3 Individual transfers We obtained the list of individual transfers throughout the year ended 30 June 2017, individual transfer, and performed the following procedures: 10.3.1 Agreed the transfers to the approved recognition of transfer documentation. We agreed the transfer to the approved recognition of transfer documentation. 10.3.2 In respect of unitised funds, we recalculated the purchase of units for the amount received using the unit price per the administration system on the date of receipt. (Where units were purchased after date of receipt investment return was added from the date of receipt to the date of purchase). Not applicable as the Fund is not unitised. 11 Pensioners paid 11.1 We obtained a copy of the list of pensioners and amounts paid for the year from the administration system and performed the following procedure: 11.1.1 We agreed the total pensions paid for the year ended 30 June 2017 to the corresponding account in the general ledger balance. We found that the total pensions paid agreed to the corresponding account in the general ledger. 11.2 We selected pensioners from the above list and performed the following procedures: 11.2.1 We inspected the pensioner increases for authorisation by the Board of Fund. We found that the pensioner increases were authorised in terms of Rule 30 of the Rules of the Fund. 11.2.2 We inspected evidence obtained by the administrator/Fund supporting the fact that the pensioners selected exist. We inspected evidence obtained by the administrator and we found that the pensioners selected exist.


REPORT OF THE INDEPENDENT AUDITORS OF JOHANNESBURG MUNICIPAL PENSION FUND OF FACTUAL FINDINGS TO THE BOARD OF FUND AND THE REGISTRAR OF PENSION FUNDS Procedures and Findings (continued) Procedures Findings 11.3 Where the Fund has purchased an annuity in the name of the Fund, we obtained a written confirmation from the annuity provider summarising movements from opening market value to closing market value and performed the following procedures: 11.3.1 We agreed the closing market value of the annuity to the annual financial statements. Not applicable as the Fund did not purchase an annuity. 11.3.2 We agreed the pensioner payment per the confirmation from the insurer to the pensions paid disclosed in the notes to the annual financial statements. Not applicable as the Fund did not purchase an annuity. 12 General 12.1 We i spe ted e ide e that the Fu d s fidelity insurance cover was in place throughout the year ended 30 June 2017 that the Fu d s fidelity insurance cover extends after year-end and report the date to which the subsequent fidelity insurance cover extends. We fou d that the Fu d s fidelity i sura e cover was in place throughout the period. 12.2 We o fir ed ith the Fu d s GLA i surer as to whether the GLA policy has lapsed at year ended 30 June 2017. Not applicable as there was no GLA policy in place. 12.3 We obtained the most recent statutory valuation signed and submitted by the valuator as at 30 June 2016 and performed the following procedures: 12.3.1 We reported the funding status of the Fund per the report (whether the Fund was under-funded or fully funded). We inspected the actuarial valuation as at 30 June 2016 and found that the Fund is in a sound financial condition. 12.3.2 Where the Fund is under-funded, we obtained evidence as to whether a scheme, as required in terms of section 18 of the Act in South Africa, has been approved by the Registrar. Not applicable.


SCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTSAT 30 JUNE 2017

INVESTMENTSNotes Direct

InvestmentsNon-compliant

CollectiveinvestmentschemesNote M1

Non-compliantInsurance

policesNote M2

Total Local Foreign Total Foreign Totalpercentage of

foreignexposure

TOTAL as perRegulation 28(Schedule IB)

R R R R R R R % RCash (including cash atbank)

A 110 848 334 151 110 540 27 973 927 289 932 801 288 617 201 1 315 600 1 315 600 0.45 289 932 801

Commodities B 825 561 - - 825 561 825 561 - - - 825 561Housing loans 17 062 - - 17 062 17 062 - - - 17 062Debt instruments includingIslamic debt Instruments

C 5 937 051 639 758 483 820 407 958 742 7 103 494 201 7 103 494 201 - - - 7 103 494 201

Investment and owneroccupied properties

D 331 488 657 26 303 195 - 357 791 852 357 791 852 - - - 357 791 852

Equities E 66 921 644 801 485 633 1 261 791 869 669 068 508 084 026 361 585 042 361 585 042 41.58 869 669 068Hedge Funds - 112 921 13 781 126 702 126 702 - - - 126 702

Total investments 6 447 152 897 1 737 496 109 437 208 241 8 621 857 247 8 258 956 605 362 900 642 362 900 642 4.21 8 621 857 247

A CASH

Instrument

LocalFair Value

RLocal notes, deposits, money market instruments issued by a South African Bank, margin accounts, settlement accounts with an exchange and Islamicliquidity management financial instruments 110 848 334Notes and coins, any balance or deposit in an account held with a South African bank - exceeding 5% of total assets 110 848 334Nedbank 93 976 864Various 16 871 470

Total 110 848 334

- 49 -


SCHEDULE IA - SCHEDULES PERTAINING TO THE ANNUAL FINANCIAL STATEMENTS (continued)AT 30 JUNE 2017

B COMMODITIES

Instrument Holding number Holding%

Fair valueR

LocalGold (including Kruger Rands)Various - 0.01 825 561

825 561825 561

Total 825 561

- 50 -



C DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT INSTRUMENTS

Instrument Local or foreign Secured/ Unsecured Issued/Guaranteed

Redemptionvalue

R

Fair value

RGovernment debt:Debt instruments issued by an loans to the government of the Republic and anydebt or loan guaranteed by the RepublicNedbank Ltd - RSA Bonds Local Secured 4 828 331 471Corporate Bonds Local Secured 1 107 715 814Total 5 936 047 285

Bank debt :Debt instruments issued or guaranteed by a South African Bank against its balance sheet:-Listed on an exchange with an issuer market capitalisation of R20 billion ormore, or an amount or conditions as prescribedVarious 401 743Total 401 743Listed on an exchange with an issuer market capitalisation of between R2 billionand R20 billion, or an amount or conditions as prescribedVarious 73 965Total 73 965

Corporate debt (excluding debentures):Debt instruments issued or guaranteed by an entity that has equity listed on anexchangeListed on an exchangeVarious 397 731Total 397 731Not listed on an exchangeOtherListed on an exchange:Various 107 653Total 107 653Not listed on an exchangeRedefine Properties Ltd 23 262Total 23 262Total debt instruments including Islamic debt instruments

5 937 051 639

- 51 -



D INVESTMENT AND OWNER OCCUPIED PROPERTIES

Instrument Fair valueR

Owner occupied propertiesOakhurst Property Local 7 200 000

Total of issuer/entity more than 5% of total assets 7 200 000Investment propertiesHammerson Plc Local 1 434 179Redefine International Plc/Isl Local 255 854Intu Properties Plc Local 2 642 668Hospitality Property Fund Ltd Local 179 858The Bridge Property Local 319 776 098

Total of issuer/entity more than 5% of total assets 324 288 657

Total 331 488 657

Instrument

Shares and linked units in property companies, or units in a collectiveinvestment scheme in property, listed on an exchange:

Local/ Foreign Issued shares Holding number Ordinary/Preference

shares

Holding%

Fair valueR

Total 331 488 657

- 52 -



E EQUITIES

Instrument Local/ Foreign Issued shares Ordinary/Preference

shares

Holding number Holdingin issuer/

entity%

Fair valueR

Listed equities

Issuer market capitalisation of R20 billion or more, or an amount orconditions as prescribedVarious Local - Ordinary - 38 663 181Total 38 663 181

Issuer market capitalisation of between R2 billion and R20 billion, oran amount or conditions as prescribedVarious Local - Ordinary - 26 520 526Total 26 520 526

Issuer market capitalisation of less than R2 billion, or an amount orconditions as prescribedVarious Local - Ordinary - 1 737 937Total 1 737 937

Total equities 66 921 644

- 53 -



M REGULATION 28 NON-COMPLIANT INVESTMENTS

M1 NON-COMPLIANT COLLECTIVE INVESTMENT SCHEMESInstrument

Local

Holding%

Fair valueR

Boutique Collective Investments 2.14 184 937 912Ashburton Investor Services (Pty) Ltd 5.46 470 904 809Atlantic Asset Management (Pty) Ltd 2.12 182 992 484Prescient Investment Management (Pty) Ltd 1.14 98 338 675Momentum Asset Management (Pty) Ltd 0.19 16 103 395Stanlib Asset Management 1.89 163 073 324Satrix Management (Pty) Ltd 0.21 18 239 833Sanlam Investment Management (Pty) Ltd 0.98 84 695 121

1 219 285 553

ForeignRussell Investments Ireland Ltd 4.19 361 585 042Marathon Asset Management LLP 1.82 156 625 514

518 210 556

Total Non-compliant collective investment schemes 1 737 496 109

M2 NON- COMPLIANT INSURANCE POLICIESInstrument

Linked policiesLocal

Holding%

Fair valueR

Futuregrowth Asset Management (Pty) Ltd 0.80 68 746 353Taquanta Asset Managers (Pty) Ltd 4.27 368 461 888

437 208 241Total linked policies 437 208 241

Total certified Regulation 28 non-compliant investments 2 174 704 350

- 54 -



O ENTITY / COUNTERPARTY EXPOSURE

Credit / Counterparty riskCounterparty Direct investment

in counterparty

R

Open financialinstruments markto market value

R

Any otherinstrument

R

Total percounterparty

R

Exposure tocounterparty

as a % of the fair value of the

assets of the fund

Banks 103 308 336 - - 103 308 336 1.20%First National Bank 7 970 619 - - 7 970 619 0.09%Nedbank Ltd 93 976 864 - - 93 976 864 1.09%ABSA 1 360 853 - - 1 360 853 0.02%

Asset managers - local 78 218 795 7 922 102 498 - 8 000 321 293 92.65%Boutique Collective Investments - 89 100 077 - 89 100 077 1.03%Taquanta Asset Managers (Pty) Ltd - 368 461 887 - 368 461 887 4.27%Momentum Asset Management (Pty) Ltd - 16 103 395 - 16 103 395 0.19%Atlantic Asset Management (Pty) Ltd - 182 992 484 - 182 992 484 2.12%The Bridge Property - 319 776 098 - 319 776 098 3.70%Prescient Investment Management (Pty) Ltd - 98 338 675 - 98 338 675 1.14%Futuregrowth Asset Management (Pty) Ltd - 68 746 353 - 68 746 353 0.80%Ashburton Investor Services (Pty) Ltd - 470 904 809 - 470 904 809 5.45%RSA Bonds - 4 828 331 471 - 4 828 331 471 55.91%Corporate bonds - Eskom - 396 957 670 - 396 957 670 4.60%Corporate bonds - African Bank - 76 111 803 - 76 111 803 0.88%Corporate bonds - Firstrand Bank Ltd - 62 732 235 - 62 732 235 0.73%Corporate bonds - SA Road Agency - 571 914 106 - 571 914 106 6.62%Stanlib Asset Management - 163 073 324 - 163 073 324 1.89%Satrix Management (Pty) Ltd - 18 239 833 - 18 239 833 0.21%Sanlam Investment Management (Pty) Ltd - 84 695 121 - 84 695 121 0.98%Oakhurst Property - 7 200 000 - 7 200 000 0.08%Standard Bank of SA Ltd - 2 585 322 - 2 585 322 0.03%Investec Asset Management (Pty) Ltd 78 218 795 - - 78 218 795 0.91%Visio Capital Management (Pty) Ltd - 95 837 835 - 95 837 835 1.11%

Asset managers - foreign - 518 210 556 - 518 210 556 6.00%Russell Investments Ireland Ltd (Old Mutual) - 361 585 042 - 361 585 042 4.19%Marathon Asset Management LLP - 156 625 514 - 156 625 514 1.81%

Other funds 17 062 - 13 438 114 13 455 176 0.16%Housing Loan 17 062 - - 17 062 -%Accounts receivable - - 13 438 114 13 438 114 0.16%

181 544 193 8 440 313 054 13 438 114 8 635 295 361 %100.00

- 55 -



P RECONCILIATION BETWEEN THE INVESTMENTS IN SCHEDULE HA AND SCHEDULE IA

Fair valuecurrent period

(as perSchedule HA

2.1)

Amortised costcurrent period

Cash at bank Non-compliantCIS

Non-compliantInsurancePolicies

Total

R R R R R RCash 102 877 715 - 7 970 619 151 110 540 27 973 927 289 932 801Commodities 825 561 - - - - 825 561Housing loans - 17 062 - - - 17 062Debt instruments including Islamic debt instruments 5 937 051 639 - - 758 483 820 407 958 742 7 103 494 201Investment properties and Owner occupied properties 331 488 657 - - 26 303 195 - 357 791 852Equities 66 921 644 - - 801 485 633 1 261 791 869 669 068Hedge funds - - - 112 921 13 781 126 702Collective investment schemes 1 737 496 109 - - (1 737 496 109) - -Insurance policies 437 208 241 - - - (437 208 241) -

Total investments 8 613 869 566 17 062 7 970 619 - - 8 621 857 247

- 56 -


SCHEDULE IB - ASSETS HELD IN COMPLIANCE WITH REGULATION 28AS AT 30 JUNE 2017

Fair valueR

A Total assets (Schedule IA -Total investments) 8 621 857 247

B1 Less: Reg 28 compliant investments(certificate received from issuing entity):-

-

B.1.1 Collective Investment Schemes (Reg 28(8)(b)(i)) -B.1.2 Linked Policies (Reg 28(8)(b)(ii)) -B.1.3 Non-Linked policies (Reg 28(8)(b)(iii)) -B.1.4 Entity regulated by FSB (Reg 28(8)(b)(iv))) -

B2 Less: Reg 28 excluded investmentsB2.1 Insurance Policies ( Reg 28(3)(c)) -

C Less: Investments not disclosed /data not available for disclosure[Refer to schedule IAN]

-

D TOTAL ASSETS FOR REGULATION 28 DISCLOSURE 8 621 857 247

Categories of kinds of assets % Fair valueR

Fair value%

1 CASH 289 932 801 3.36%

1.1 Notes, deposits, money market instruments issued bya South African Bank, margin accounts, settlementaccounts with an exchange and Islamic liquiditymanagement financial instruments

100%

287 546 918 3.34%(a) Notes and coins; any balance or deposit in an account

held with a South African bank; 150 248 142 1.74%Nedbank Ltd 25% 107 603 557 1.25%Other issuers 25% 42 644 585 0.49%

(b) A money market instrument issued by a South Africanbank including an Islamic liquidity management financialinstrument 134 513 923 1.56%Nedbank Ltd 25% 13 491 502 0.16%Other issuers 25% 121 022 421 1.40%

(c) Any positive net balance in a margin account with anexchange 206 160 0.00%

(d) Any positive net balance in a settlement account with anexchange, operated for the buying and selling of assets 2 578 693 0.03%

1.2 Balances or deposits, money market instrumentsissued by a foreign bank including Islamic liquiditymanagement financial instruments

SARBmax.limits 2 385 883 0.03%

(a) Any balance or deposit held with a foreign bank 1 070 288 0.01%(b) Any balance or deposit held with an African bank 416 274 0.00%(c) A money market instrument issued by a foreign bank

including an Islamic liquidity management financialinstrument 899 321 0.01%

2 DEBT INSTRUMENTS INCLUDING ISLAMIC DEBTINSTRUMENTS 7 103 494 201 82.39%

2.1 Inside the Republic 100% 7 103 494 201 82.39%(a) Debt instruments issued by, and loans to, the government

of the Republic, and any debt or loan guaranteed by theRepublic 100% 4 858 016 361 56.35%Goverment bonds 100% 4 828 331 472 56.00%Other issuers 100% 29 684 889 0.34%

(b) Debt instruments issued or guaranteed by the governmentof a foreign country 75% 499 794 0.01%

(c) Debt instruments issued or by a South African bankagainst its balance sheet 75% 239 675 102 2.78%

c(i) Listed on an exchange with an issue market capitalisationof R20 billion or more, or an amount or conditions asprescribed 75% 206 791 856 2.40%Standard Bank of South Africa Limited 25% 72 836 688 0.84%

Carried forward 5 215 615 114 60.48%- 57 -




Fair value%

Brought forward 5 215 615 114 60.48%Other issuers 25% 133 955 168 3.00%

c(ii) Listed on an exchange with an issuer market capitalisationof between R2 billion and R20 billion, or an amount orconditions as prescribed 75% - 0.00%

c(iii) Listed on an exchange with an issuer market capitalisationof less than R2 billion, or an amount or conditions asprescribed 75% 283 369 0.00%African Bank Ltd 10% 283 369 0.00%

c(iv) Not listed on an exchange 25% 32 599 877 0.38%Standard Bank of South Africa Limited 5% 12 878 892 0.15%Other issuers 5% 19 720 985 0.23%

(d) Debt instruments issued or guaranteed by an entity thathas equity listed on an exchange, or debt instrumentsissued or guaranteed by a public entity under the PublicFinance Management Act, 1999 (Act No. 1 of 1999) asprescribed 50% 201 021 613 2.33%

d(i) Listed on an exchange 50% 97 412 323 1.13%Barclays Africa Group Ltd 10% 30 899 663 0.36%Other issuers 10% 66 512 660 0.77%

d(ii) Not listed on an exchange 25% 103 609 290 1.20%Calgro M3 5% 17 802 143 0.21%Other issuers 5% 85 807 147 1.00%

(e) Other debt instruments:- 25% 1 804 281 331 20.93%e(i) Listed on an exchange 25% 1 208 506 553 14.02%

Corporate bonds 5% 1 107 715 814 12.85%Other issuers 5% 100 790 739 1.17%

e(ii) Not listed on an exchange 15% 595 774 778 6.91%SA Taxi Developmeent Finance 5% 38 062 945 0.44%Other issuers 5% 557 711 833 6.47%

2.2 Foreign

SARBmax.limits

- 0.00%(a) Debt instruments issued by, and loans to, the government

of the Republic, and any debt or loan guaranteed by theRepublic

SARBmax.limits

- 0.00%

(b) Debt instruments issued or guaranteed by the governmentof a foreign country

SARBmax.limits

- 0.00%

(c) Debt instruments issued or guaranteed by a South AfricanBank against its balance sheet:-

SARBmax.limits

- 0.00%

c(i) Listed on an exchange with an issuer market capitalisationof R20 billion or more, or an amount or conditions asprescribed

SARBmax.limits - 0.00%

c(ii) Listed on an exchange with an issuer market capitalisationof between R2 billion and R20 billion, or an amount orconditions as prescribed

SARBmax.limits - 0.00%

c(iii) Listed on an exchange with an issuer market capitalisationof less than R2 billion, or an amount or conditions asprescribed

SARBmax.limits

- 0.00%

c(iv) Not listed on an exchange - 0.00%(d) Debt instruments issued or guaranteed by an entity that

has equity listed on an exchangeSARBmax.limits

- 0.00%

d(i) Listed on an exchange SARBmax.limits

- 0.00%

d(ii) Not listed on an exchange 25% - 0.00%(e) Other debt instruments 25% - 0.00%e(i) Listed on an exchange 25% - 0.00%e(ii) Not listed on an exchange 15% - 0.00%

Carried forward 7 387 756 472 87.13%- 58 -




Fair value%

Brought forward 7 387 756 472 87.13%3 EQUITIES 869 669 068 10.09%

3.1 Inside the Republic 75% 508 084 026 5.89%(a) Preference and ordinary shares in companies, excluding

shares in property companies, listed on an exchange:-75%

507 065 478 5.88%a(i) Issuer market capitalisation of R20 billion or more, or an

amount or conditions as prescribed 75% 306 556 558 3.56%Nasionale Pers 15% 16 695 181 0.19%Other issuers 15% 289 861 377 3.36%

a(ii) Issuer market capitalisation of between R2 billion and R20billion, or an amount or conditions as prescribed 75% 198 139 443 2.30%Reunert Ltd 10% 3 148 141 0.04%Other issuers 10% 194 991 302 2.26%

a(iii) Issuer market capitalisation of less than R2 billion, or anamount or conditions as prescribed 15% 2 369 477 0.03%Hulamin Ltd 5% 913 455 0.01%Other issuers 5% 1 456 022 0.02%

(b) Preference and ordinary shares in companies, excludingshares in property companies, not listed on an exchange 15% 1 018 548 0.01%N3 Toll Concession NB CIO approval 2.5% 535 365 0.01%Other issuers 2.5% 483 183 0.01%

3.2 Foreign 361 585 042 4.19%

(a) Preference and ordinary shares in companies, excludingshares in property companies, listed on an exchange:-

SARBmax.limits 361 585 042 4.19%

a(i) Issuer market capitalisation of R20 billion or more, or anamount or conditions as prescribed

SARBmax.limits

- 0.00%

a(ii) Issuer market capitalisation of between R2 billion and R20billion, or an amount or conditions as prescribed

SARBmax.limits

361 585 042 4.19%

Other 10% 361 585 042 4.19%a(iii) Issuer market capitalisation of less than R2 billion, or an

amount or conditions as prescribedSARBmax.limits

- 0.00%

(b) Preference and ordinary shares in companies, excludingshares in property companies, not listed on an exchange

10%- 0.00%

4 IMMOVABLE PROPERTY 357 791 852 4.15%

4.1 Inside the Republic 25% 357 791 852 4.15%(a) Preference shares, ordinary shares and linked units

comprising shares linked to debentures in propertycompanies, or units in a Collective Investment Scheme inProperty, listed on an exchange 25% 357 791 852 4.15%

a(i) Issuer market capitalisation of R10 billion or more, or anamount or conditions as prescribed 25% 11 417 467 0.13%Intu Properties Plc 15% 2 642 668 0.03%Other issuers 15% 8 774 799 0.10%

a(ii) Issuer market capitalisation of between R3 billion and R10billion, or an amount or conditions as prescribed 25% 1 158 454 0.01%Hospitality Property Fund Ltd 10% 179 858 0.00%Other issuers 10% 978 596 0.01%

a(iii) Issuer market capitalisation of less than R3 billion or anamount or conditions as prescribed 25% 345 215 931 4.00%The Bridge Property 5% 326 976 098 3.79%Other 5% 18 239 833 0.21%

(b) Immovable property, preference and ordinary shares inproperty companies, and linked units comprising shareslinked to debentures in property companies, not listed onan exchange 15% - 0.00%

4.2 Foreign 25% - 0.00%

Carried forward 8 615 217 392 101.36%- 59 -




Fair value%

Brought forward 8 615 217 392 101.36%(a) Preference shares, ordinary shares and linked units

comprising shares linked to debentures in propertycompanies, or units in a Collective Investment Scheme inProperty, listed on an exchange 25% - 0.00%

a(i) Issuer market capitalisation of R10 billion or more, or anamount or conditions as prescribed 25% - 0.00%

a(ii) Issuer market capitalisation of between R3 billion and R10billion, or an amount or conditions as prescribed 25% - 0.00%

a(iii) Issuer market capitalisation of less than R3 billion or anamount or conditions as prescribed

25%- 0.00%

(b) Immovable property, preference and ordinary shares inproperty companies, and linked units comprising shareslinked to debentures in property companies, not listed onan exchange 15% - 0.00%

5 COMMODITIES 825 561 0.01%

5.1 Inside the Republic 10% 825 561 0.01%(a) Kruger Rands and other commodities on an exchange,

including exchange traded commodities 10% 825 561 0.01%a(i) Gold (including Kruger Rands) 10% 825 561 0.01%

Newplat Etf 10% 825 561 0.01%a(ii) Other commodities 5% - 0.00%

5.2 Foreign 10% - 0.00%(a) Gold and other commodities on an exchange, including

exchange traded commodities 10% - 0.00%a(i) Gold 10% - 0.00%a(ii) Other commodities 5% - 0.00%

7 HOUSING LOANS GRANTED TO MEMBERS INACCORDANCE WITH THE PROVISIONS OF SECTION19(5)

95% 17 062 0.00%

8 HEDGE FUNDS, PRIVATE EQUITY FUNDS AND ANYOTHER ASSET NOT REFERRED TO IN THISSCHEDULE 126 702 0.00%

8.1 Inside the Republic 15% 126 702 0.00%(a) Hedge fund 10% 126 702 0.00%a(i) Funds of hedge funds 10% 126 702 0.00%

5% 126 702 0.00%a(ii) Hedge funds 10% - 0.00%(b) Private equity funds 10% - 0.00%b(i) Funds of private equity funds 10% - 0.00%b(ii) Private equity funds 10% - 0.00%(c) Other assets not referred to in this schedule and excluding

a hedge fund or private equity fund 2.5% - 0.00%

8.2 Foreign 15% - 0.00%(a) Hedge fund 10% - 0.00%a(i) Funds of hedge funds 10% - 0.00%a(ii) Hedge funds 10% - 0.00%(b) Private equity funds 10% - 0.00%b(i) Funds of private equity funds 10% - 0.00%b(ii) Private equity funds 10.0% - 0.00%(c) Other assets not referred to in this schedule and excluding

a hedge fund or private equity fund 2.5% - 0.00%

TOTAL ASSETS – REGULATION 28 8 621 857 247 100.00%

- 60 -



INVESTMENT SUMMARY (Regulation 28)Local Fair value Foreign

(Excluding Africa)Fair value Africa Fair value Total

R % R % R % R1 Balances or deposits, money market instruments

issued by a bank including Islamic liquiditymanagement financial instruments 287 546 918 3.34 1 969 609 0.02 416 274 - 289 932 801

2 Debt instruments including Islamic debt instruments 7 103 494 201 82.39 - - - - 7 103 494 2013 Equities 508 084 026 5.89 361 585 042 4.19 - - 869 669 0684 Immovable property 357 791 852 4.15 - - - - 357 791 8525 Commodities 825 561 0.01 - - - - 825 5617 Housing loans granted to members - section 19(5) 17 062 - - - - - 17 0628 Hedge Funds, private equity funds and any other

assets not referred to in this schedule 126 702 - - - - - 126 702

TOTAL 8 257 886 322 95.78 363 554 651 4.22 416 274 - 8 621 857 247

- 61 -



BREACHES IN TERMS OF SUB REGULATION 3 OF REGULATION 28

Table 1items

Asset Limits in terms of sub regulation 3(f) Total (Inside &Foreign)

R

Percentage ofFair value

%

Regulation 28limits

2.1(e)(ii) Other debt instruments not listed 595 774 776 6.91 3.1(b) Equities not listed 1 018 548 0.01 8 Hedge funds , Private Equity funds and other assets 920 651 926 10.68

TOTAL 1 517 445 250 17.60 35

Table 1items

Asset Limits in terms of sub regulation 3(g) Fair valueR

Fair value%

Regulation 28limits

3.1(b) Equities not listed 1 018 548 0.01

TOTAL 1 018 548 0.01 15

Table 1items

Asset Limits in terms of sub regulation 3(h) Fair valueR

Fair value%

Regulation 28limits

1.1 Cash and deposits with a South African Bank 194 029 211 2.25 2.1(c) Debt instruments guaranteed by a South African Bank -

Item239 675 104 2.78

TOTAL 433 704 315 5.03 25

- 62 -

Head Office 20 Morris Street East, Woodmead, 2191

P.O. Box 2939, Saxonwold, 2132

Tel: +27 (0) 11 231 0600

Fax: +27 (0) 11 234 0701 Victor Sekese (Chief Executive) A comprehensive list of all Directors is available at the company offices or registered office. SizweNtsalubaGobodo Incorporated. Registration Number: 2005/034639/21

SCHEDULE IB JOHANNESBURG MUNICIPAL PENSION FUND INDEPENDENT AUDITOR’S REPORT ON ASSETS HELD IN COMPLIANCE WITH REGULATION 28 TO THE BOARD OF FUND Opinion We have audited Schedule IB Assets held i o plia e with Regulatio 28 of the Johannesburg Municipal Pension Fund the Fu d at 30 June 2017 the S hedule fo o plia e with the e ui e e ts of Regulatio 28 of the Pe sio Funds Act of South Africa (the Regulation), as set out on pages 57 to 62.Our engagement arises from our appointment as auditor of the Fund and is for the purpose of assisting the Board of Fund to report to the Registrar of Pension Funds (the Regist a . In our opinion, Schedule IB Assets held i o plia e with Regulatio 28 at 30 June 2017 by the Johannesburg Municipal Pension Fund is prepared, in all material respects, in accordance and in compliance with the Regulation. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Schedule section of our report. We are independent of the Fund in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter - Financial reporting framework and restriction on use Without modifying our opinion, we draw attention to the purpose of our report as indicated in the opinion paragraph, and the basis of accounting. Consequently, the S hedule a d ou audito ’s epo t a ot e suita le fo a othe purpose. Our opinion is not further qualified in respect of this matter. Other matter

The i fo atio o tai ed i S hedule IB has ee e t a ted f o the Fu d’s u de l i g a ou ti g e o ds that were the subject of our audit engagement on the annual financial statements and forms the subject matter of this engagement. Our audit of the annual financial statements of the Johannesburg Municipal Pension Fund for the year ended 30 June 2017 was conducted in accordance with International Standards on Auditing and in our report of 30 June 2017 we expressed an unmodified opinion, and therefore the annual financial statements are prepared, in all material respects, with the Regulatory Reporting Requirements for Retirement Funds in South Africa. Other information The Board of Fund is responsible for the other information. The other information comprises the Annual Financial Statements in terms of section 15 of the Pension Funds Act no 24, 1956, but does not include Schedule IB and our audito ’s epo t the eo . Our opinion on Schedule IB does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

SCHEDULE IB JOHANNESBURG MUNICIPAL PENSION FUND Registration number12/8/390 INDEPENDENT AUDITOR’S REPORT ON ASSETS HELD IN COMPLIANCE WITH REGULATION 28 TO THE BOARD OF FUND

Page 64

Other information (continued) In connection with our audit of Schedule IB, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with Schedule IB or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Fund for the Schedule The Board of Fund is responsible for the preparation of the Schedule in compliance with the Regulation, and for such internal control as the Board of Fund determines is necessary to enable the preparation of the Schedule that is free from material misstatement, whether due to fraud or error. Auditor’s Responsi ilities for the Audit of the S hedule Our objectives are to obtain reasonable assurance about whether the Schedule as a whole are free from material isstate e t, whethe due to f aud o e o , a d to issue a audito ’s epo t that i ludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Schedule. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the Schedule, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Fu d’s i te al o t ol. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Fund. We communicate with the Board of Fund regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


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