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JJOOHHAANNNNEESSBBUURRGG CCIITTYY PPAARRKKSS((AAnn aassssoocciiaattiioonn iinnccoorrppoorraatteedd uunnddeerr SSeeccttiioonn 2211))

Registration No: 2000/028782/08

(In terms of Section 121 of the

Municipal Finance Management Act, 2003 and

Section 46 of the Municipal Systems Act, 2000)

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JOHANNESBURG CITY PARKS

AN ASSOCIATION INCORPORATED UNDER

SECTION 21 OF THE COMPANIES ACT

COMPANY INFORMATION:

Registration number : 2000/028782/08

Registered Address : Johannesburg City Parks

City Parks House

40 De Korte Street

Braamfontein

2017

Postal Address : P O Box 2824

Johannesburg

2000

Telephone number : (011) 712-6600

Fax number : (011) 712-6796

Website : www.jhbcityparks.com

Bankers : ABSA Bank of SA Limited

Auditors : Auditor-General

Vision

To be the leading African green environment

And cemetery management company.

Mission

To develop, maintain and conserve the

green environment and cemeteries

for present and future generations.

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TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION AND CORPORATE PROFILE

Section 1: Corporate Profile and Overview of the entity 4

Section 2: Strategic Objectives 8

Section 3: Foreword by the Member of the Mayoral Committee 10

Section 4: Chairpersons Foreword 12

Section 5: Managing Directors Report 17

CHAPTER TWO: PERFORMANCE HIGHLIGHTS

Section 1: Highlights and Achievements 23

Section 2: Company Four Year Review 25

Section 3: Financial Performance 27

Section 4: Capital Projects 29

Section 5: Performance against IDP and City Scorecard 34

Section 6: Assessment of Arrears on municipal taxes and service charges 38

Section 7: Statement on amounts owed by Government Departments and public entities 41

Section 8: Recommendations and Plans for the next financial year. 42

CHAPTER THREE: DIRECTORS REPORT AND GOVERNANCE

Section 1: Corporate Governance Statement 43

Section 2: Board of Directors 43

Section 3: Board Committees 48Section 4: Directors Remuneration 50

Section 5: Company Secretarial Function 52

Section 6: Risk Management and Internal controls 53

Section 7: Internal Audit Function 56

Section 8: Response to the Auditor-General Report 57

Section 9: Corporate Ethics and Organisational Integrity 61

Section 10: Sustainability Report 62

Section 11: Corporate Social Responsibility Report 63

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CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT

Section 1: Human Resource Management 66

Section 2: Employment Equity 69

Section 3: Skills Development and Training 73

Section 4: Performance Management 76

Section 5: HIV/AIDS in the Workplace 76

Section 6: Employee Benefits 80

Section 7: Supply Chain Management and Black Economic Empowerment 81

CHAPTER FIVE: AUDITED FINANCIAL STATEMENTS AND RELATED INFORMATION

Section 1: Auditor-Generals Report 84

Section 2: Statement of responsibilities and approval 95

Section 3: Directors report 96

Section 4: Statement by company secretary 98

Section 5: Annual financial statement 99

CHAPTER SIX: FUNCTIONAL AREA SERVICE DELIVERY REPORT 144

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CHAPTER ONE: INTRODUCTION AND CORPORATE PROFILE

Section 1: Corporate Profile and Overview of the entity

Johannesburg City Parks (JOHANNESBURG CITY PARKS) is the greening, conservation

and cemetery management entity for the City of Johannesburg (CoJ). It was incorporated

under the seal of the Registrar of Companies on 15 November 2000 as a Section 21 (non-

profit) Company and business commenced on 1 January 2001.

Johannesburg City Parks mandate is to provide and manage the parks, designated open

spaces, environmental conservation services and cemeteries for and on behalf of the City of

Johannesburg.

Accordingly Johannesburg City Parks manages the following assets:

Area of Management Quantity

Number of parks and arterials 2 343

Area of developed parks and arterials 6 603,3 hectares

Area of undeveloped parks 3 591,1 hectares

Nature reserves 1 202,6 hectares

Street verges 7 500 hectares

Street trees 1,3 1,6 million

Number of cemeteries 35

Area of cemeteries 904 hectares

Number of crematoria 2

Number of nurseries 2

Water surfaces 174 hectares

Bird sanctuaries 366,4 hectares

Trails and river trails 107kmEnvironmental & education centres 6

Size of fleet 306 Vehicles; 127 Trailers

Total number of employees as at 30 June 2009: 1 660

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Johannesburg City Parks is committed to the principles of the Joburg 2030 Vision as

encapsulated in the strategy of the City of Johannesburg. The Company aligned its Business

Plan with the Integrated Development Plan and Environmental Sector Plan of the CoJ via its

programmes and projects.

Functional areas

Parks, designated public open space, nature conservation areas and cemetery

maintenance

- Horticultural services

- Arboriculture maintenance

- Infrastructure maintenance

- Nursery operations

Cemeteries management

- Burials

- Cremations

- Archival records

Environmental conservation

- Biodiversity management

- Environmental awareness

- Environmental training, empowerment and capacity building

- Bio-aquatic management

- Botanic research, monitoring & information sharing

- Conservation, rehabilitation, enhancement of ecosystems

- Invader species control

- Open space impact management and provisioning

- Environmental compliance and open space impact management- Ecotourism and conservation business development

Project Management

- Planning

- Design

- Landscaping

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Marketing

- Marketing and market research

- Stakeholder liaison

- Communication

- Media liaison

- Business development

Human Resources

- Human resource management

- Recruitment, selection & retention

- Remuneration management

- Employee relation management

- Quality of work life

- Human resources development

- Organisational development

- Employment equity

- Performance management

Finance

- Business planning

- Budget and forecasting

- Finance controls

- Finance reporting

- Procurement

- Information technology

- Knowledge management

Company Secretary

- Company secretarial & legal compliance

- Legal services

- Corporate administration

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Assuranceservices

- Risk management

- Internal auditing

- Service monitoring & reporting

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Section 2: Strategic Objectives

Johannesburg City Parks has aligned its strategic objectives with the City of Johannesburgs

Mayoral Priorities, strategic plans and five-year programmes as follows:

Improve Service Delivery

Johannesburg City Parks service delivery mainly consists of development, maintenance

and conservation of public open space and the natural environment, greening of the City (i.e.

planting of trees), and securing of burial space for the future.

This strategic objective has been successfully achieved and exceeded in many ways.

Occupational Health, Safety and Security

The design and layout of facilities have been done with safety in mind, and the safety in our

facilities has been improved through our Park Warden monitoring system and the

involvement of other MOEs such as Metro Police. Through compliance to the Occupational

Health and Safety Act, and the SMME safety programmes, safety in the workplace and at

our facilities has been enhanced.

Effective Financial Management

Johannesburg City Parks addressed the Mayoral Priority of a Well Governed and Managed

City with the strategic objectives of Sound Financial Management, Capex Implementation

and the Management of Risks. Corporate Governance and MFMA assessments were also

done as well as regular internal audits.

Economic Development and Job Creation

Johannesburg City Parks continues to contribute to economic development and job creation

through the implementation of the Expanded Public Works Programme. New jobs were

created, people were trained and the extent of SMME procurement contributed to achievingthis Mayoral Priority.

Customer Satisfaction and Responsiveness

Through improved service delivery Johannesburg City Parks has improved customer

satisfaction. Johannesburg City Parks employee satisfaction, sustainability of our service

delivery and service delivery excellence also played a valuable role towards community

development

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HIV and AIDS

Johannesburg City Parks continues to support the prevention of HIV and AIDS initiatives

through the development and education of staff as well as wellness programmes. A Healthy

workforce benefits the organisation and individuals growth. Johannesburg City Parks

complies with the Citys and its own HIV and AIDS policies.

Staff development

To develop staff to its fullest potential

Implementationofenvironmental sector plan projects:

Implementation of sustainable disposal of green waste;

Removal of aquatic invasive plants from water bodies (mainly hyacinth);

Maintenance and control of reeds;

Maintenance of birds sanctuaries river trails and corridors;

Implementation of community based river cleanup programme;

Development and implementation of Ecological master plans for selected nature areas;

Implementation of alien plants control programme;

Nodal developments through PPPs (Muti garden, Entrance/conference precinct, Kids

garden, etc);

Capex projects;

Implement open space master plan (Zoning & rezoning, development, landscaping,

declare open spaces as per OSMP);

Development of Capital projects as determined by CoJ;

Greening of Soweto;

Soweto nursery development;

Environmental education programme - tree planting support programme;

Greening 2010;

Greening of Soweto Project (Plant 62 000 trees);

JCP internal Pre- EIA screening;

Open space input to Gautrain (especially trees, parks, etc); and

GIS /OS Spatial programme continue.

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Section 3: Foreword by the Member of the Mayoral Committee for Environmental andCorporate Services Portfolio, Councillor M Mfikoe,

It is with pleasure that we present this years Annual Report. We are satisfied that the Board

has duly executed its fiduciary duty in completing the work of the entity. We have closed the

past financial year with a number of triumphs and achievements against targets set for the

period under review.

Johannesburg City Parks presents this Annual Report at a time when conservation agencies

in the 21st Century are facing many global challenges that could threaten the integrity and

survival of the systems of protected areas under its jurisdiction. Changes in global climates

continue to pose serious threats to protected areas.

Greening in the City of Johannesburg is high on the service delivery agenda especially for

those areas that have been previously disadvantaged such as the South because in

contrast, the northern parts of Johannesburg when looked at from outer space resemble a

rain forest. The South on the other hand is denuded and dusty.

We are reversing this situation by planting more than 200 000 trees by 2010, greening every

soccer field in every township, building more Regional Parks especially in the South,

establishing nurseries and ensuring that these help to reinforce our greening programme,

cleaning and greening the Klipriver and all its tributaries by 2010, and leveraging private

sector resources and partnering with many organisations to realise the goals that we have

set for ourselves.

Since July 2006, City Parks has already planted about 40 000 trees. We are satisfied that

we have achieved our annual objectives for the 2008/2009 financial year in most areas and

that those few objectives for which targets were not attained were unduly affected by

constraints beyond our control.

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I would like to thank the Board of Directors, Managing Director, Senior Management as well

as all staff of the entity for their contribution in ensuring efficient and effective delivery of the

objectives and programmes against set targets for the year under review. The year under

review has certainly confirmed that this is a department of committed individuals who despite

the many strains and challenges respond to the call of ensuring that we ensure a better life

for all residents of Johannesburg.

Councilor M Mfikoe

Member of the Mayoral Committee

Environment and Corporate Services

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(d) The Audit and Risk Committee whose function in terms of section 166 of the Municipal

Finance Management Act is as to be an independent advisory function to the Board and

is tasked with amongst other things the review of the Annual Financial Statements and

investigate all other matters that it may be tasked with by the Board. This Committee is

chaired by Mr A Carolissen

(e) The Operations and Marketing Committee which is tasked with reviewing and advising

management with the successful implementation of JCP business plans and ensuring

that Johannesburg City Parks customers understand and appreciate the role of

Johannesburg City Parks and that customer issues are adequately dealt with. This

committee is chaired by Mr M Bahula.

Management

Our Executive Team continues to be ably led by our Managing Director (MD) Mr L

Williamson who is supported by our new Chief Financial Officer (CFO) Mr R Clements.

Mr R Clements replaces our previous excellent Chief Financial Officer Mr K van Eck who

resigned during the year to join an international company in the private sector, Mr G Cooke:

Operations Executive: Parks and Cemeteries, Mr P Meyer: Operations Executive:

Environment and Infrastructure, Mr F Fouche: Marketing and Communications Executive,

Ms A BuzoGqoboka: Human Resource Executive, Ms K Molale our General Manager:

Assurance Services and the Company Secretary Mr M Sayed Hassan.

The Board tasked management in the year under review with four key strategic performance

objectives namely; to proactively manage and maximise Johannesburg City Parks capital

base and revenue streams, Create customer value, maximise service quality, and

operational effectiveness and creating and an environment that builds capabilities within the

company.

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As evidenced in the body of this report, Johannesburg City Parks capital base was constant

due to competing priorities in the CoJ. Additional funding was sourced from the City for other

capital projects through the Environment Department in the amount of 800k which was used

for the planting of trees. More than R30m was allocated from this department for the KK

project which proved to be an exciting flagship event for JCP within the current year.

Additional revenues through the work of our External Services Department staff generated

R44m additional revenue to JCP far outstripping their R22, 3m budget. Through the

marketing and events management department, the company raised in excess of R16m

made up of direct and indirect income in their fundraising efforts.

The impact of managements effective pursuit of this objective is that in a difficult economic

climate the company was able to break even and end up with a slight surplus of

approximately R2, 6m for the year under review. As a going concern the company has

generated sufficient retained earnings in the amount of R84, 2m even though our status as a

going concern is backed by the COJ annual guarantees for ongoing funding as a section 21

Company. Our Internal Audit has continued to advise management on critical systems and

performance gaps and has verified existing performance targets. Our Audit report is

testimony to the ongoing effective and efficient manner in which the organisation continues

to be managed.

JCP is proud to announce that major projects were achieved that create customer value.

These are mainly parts of the KK project within time and budget and the meeting of the

Executive Mayors Legacy Project particularly the greening of Soweto. More than 150 000

trees have been planted to date with the past President Mandela planting the 90 999

thousand tree at the Thokoza Park in Soweto and Lionel Ritchie planting a tree at the Zoo

Lake, the greening of Orlando Stadium in collaboration with the Community Development

Department at the COJ.

Our customer surveys have shown a record 81% satisfaction level and an average level of

resolved complaints of 77%. Management continue to look at innovative ways of providing

value at the lowest cost possible and instituted the asset management, fit for purpose

vehicle and contractor model strategies.

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Fountains with a myriad of Water features as well as completing the task of meeting the 200

000 trees target, increasing operational efficiencies and expanding the role of women in the

organisation. Safety in the Parks and in Cemeteries through joint action with JMPD and

SAPS will continue to be enhanced.

We are thankful for the support and co-operation that we continue to receive from the

Department of Environment and from the Shareholder Unit and the motivation that through

challenges that the Executive Mayor and the politicians keep stretching us on.

Greener, Conserved, Yours!!!

Griffith Zabala

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Section 5: Managing Directors Report

Overview

The 2008/09 fiscal year will be remembered as the year of the global economic meltdown,

the soccer Confederations Cup in SA and the year of South Africas fourth general elections.

At Johannesburg City Parks, we will remember this year with the successful execution of the

Kliprivier/ Klipspruit (KK) projects and various innovations, including the successful rollout of

township TV, various extreme makeover developments and the implementation of best

practices in parks development and maintenance.

Staff commitment, passion and enthusiasm ensured the effective management of both

internal and external resources and the achievement of all goals and objectives.

Strategic matters

The report reviews the organisations performance for the year in terms of the imperatives as

defined in the Growth and Development Strategy, Integrated Development Plan and the

Business plan of City Parks. The various strategic objectives around financial, customer,

internal business processes and innovation and learning have been achieved favourably and

contributed to another successful financial year.

Key Performance Areas

Customer Perspective:

The creation of customer value is the strategic objective of this perspective.

The average resolution of logged complaints for the year under review was 77% whichexceeds the set target of 72%. The average of 77% complaints resolved is also in line with

the average of 78% resolved during the previous year. Furthermore, an overall 81%

customer satisfaction rating was achieved via the annual customer satisfaction survey.

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The Media Liaison Section has been actively engaging with community, regional and

national media to ensure that Johannesburg City Parks products and services generate a

high-level of public awareness and buy-in. The positive coverage that is secured is evident

in the growing conscientiousness and ongoing involvement of business, residents and

schools in the planting of trees, river clean-ups and the positive increase in market and

public perception of Johannesburg City Parks as reflected in the various surveys undertaken

by the Research section.

The Mayoral priority and Environmental Sector Plan imperative of a Clean Green City was

further augmented by the planting of 62 155 trees planted for the year and 154 264 trees

planted in total towards the 2010 target of 200 000.

Proudly, the capital development programme for 2008/9 was concluded in the 4 th quarter

with over 30 projects developed. This years projects saw the adoption of various new

products and services, including, universally accessible play equipment, a skate park,

themed road islands, ablution facilities at all medium to large parks, amenities and access

for people with disabilities, an environmental education centre and a nursery in a park

environment. The KK Project was the flagship development and has set a new standard for

parks development at Johannesburg City Parks.

Whilst some of the initiatives around the world class parks programme have been prioritised

or placed on hold due to the cost-cutting exercise, good progress was made in developing

the Johannesburg City Parks service standards booklet, management plans for the 14

selected sites and the development of a site accreditation and grading system named the

Green Leaf Awards. The new financial year will see the finalisation and implementation of

the best practices systems, including site-specific documentation on marketing, events,

maintenance, resource and master plans.

An estimated amount of R9, 4m worth of free editorial coverage had been secured by the

Media Liaison Section during the financial year which includes print, radio, electronic and

television coverage.

During the year the Park Rangers had 24 304 facility visits and 47 special operations which

resulted in 12 732 vagrants being removed, 790 arrests being made and 209 spot fines

being issued.

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Financial Perspective:

The Strategic objective of this perspective is to proactively manage and maximise the

Johannesburg City Parks capital base and revenue streams.

Revenue generation (External Services) reached record levels with a year-to-date stretched

target of R47, 1m order book achieved against an annual external stretched income target of

R40m. R44, 8m of external sales has been invoiced for work completed, with R26m money

in bank. Revenue from burials has generated R17, 9m as at the end of the 4th quarter,

which is in line with projections and the actual burials that took place.

The Marketing department generated income to the value of R16, 7 m, an increase of

R6,7m from the previous year. This amount was made up of direct income of R5, 4 m and

indirect income estimated at R11, 3m.

Capex

Against the revised Capex budget of R74 590, 99% of the budget has been spent, as

follows:

Details Budget

R000

Actual

R000

% Expenditure

CoJ 10 750 10 538 98%

MIG 14 964 14 947 99.9%

2010-KK 30 000 29 770 99.2%

Bulk Contributions 8 476 8 537 101%

Operational Capex 10 400 10 018 96%

TOTAL 74 590 73 807 99 %

Towards the end of the year, the companys budget was micro managed in order to

effectively utilise the allocated budget in an environment where the impact of the

international economic crisis was being realised. Cost cutting measures put in place during

the 4th quarter were closely monitored and scrutinised which ensured a surplus for this

financial year, however, with all key service delivery indicators achieved.

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Internal Business Process Perspective:

This perspectives strategic objective is to maximise service quality and operational

effectiveness of the operations department.

Due to the successful outcome of the Resource Management Plan and Johannesburg City

Parks commitment to service delivery, most IDP targets were met or exceeded for the

period under review. The portfolio comprises of 143 674 hectares, against which a portfolio

maintenance coverage of 165 111 hectares was achieved through increased maintenance

cycles.

A total of 30 938 beneficiaries were reached through various Environmental Education

programmes, exceeding last years total of 19 684 by 45%. This was achieved through the

commitment of the environmental education team and the use of community based

educators in the 3rd and 4th quarters. The impact of the various programmes have also been

measured, the details of which are reflected in the report.

In light of Fleet being the 3rd highest cost driver in the organisation, it is critical to effectively

manage the fleet costs, fleet availability and utilization. The de-fleeting of 5 tractors, 6

specialized vehicles and 1 sedan and trailer, in line with the fit-for-purpose and fleet

optimisation strategy, has resulted in the fleet revised budget being achieved, without

affecting availability and utilisation. Accidents and incidents have also been well controlled

resulting in a loss-claim ratio of only 34% with 50 less perils compared to the previous year

at a reduced cost of R150 000.

For this financial year, 26 lost time injuries (8 in quarter 1, 8 in quarter 2, 4 in quarter 3 and 6

in quarter 4) were reported resulting in an LTIFR of 1.44. Compared with the previous

financial year of 42 LTIs and an LTIFR of 2.1, this represents a significant improvement and

can be attributed to the numerous SHE-related initiatives implemented throughout the year.

The 15 facilities identified for energy efficiency retrofitting have been submitted to the CoJ:

Infrastructure and Services Department for incorporation in the city-wide energy saving

initiative, via the Clinton Foundation. Johannesburg City Parks awaits the results of the

water and electricity audit reports. In the interim, Johannesburg City Parks has completed

the electricity and water audits at two sites on its own in preparation for retrofitting in the new

financial year. In relation to waste management, the pilot recycling project at Florida Lake is

in the final stages of implementation.

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In accordance with the approved Internal Audit Plan, thirty one (31) audits were expected to

be conducted for the period under review. We have managed to execute and complete

twenty eight (28) of the audits.

The risk containment measures in place are regularly monitored to ensure that they are

within the acceptable residual risk rating. Significant movements noted are reported to

management and appropriate committees of the board on a quarterly basis.

Innovation and Learning:

This strategic objective is to create the environment and build capabilities within the

department to improve service delivery.

Johannesburg City Parks created a total of 2 348 jobs against the annual plan of 1 200.

Most of these were created through our vigorous EPWP initiatives within operational

activities and the roll-out of the Capex programmes. In the new financial year Johannesburg

City Parks will focus on the creation of sustainable jobs, we will also introduce our

apprenticeship model.

The following process improvement initiatives are making good progress and are beginning

to add value to the organisation:

Johannesburg City Parks Asset Care Centre- pilot in progress at Zoo Lake, full

system rollout scheduled for the latter part of 2009/10.

World class parks draft Johannesburg City Parks service standards manual

completed, management plans taking shape, green leaf awards system in place.

Numerous infrastructure and horticultural upgrades and improvements have resulted

in the sites moving towards achieving world class standards. Further rollout will take

place next year, budget dependent.

Benchmarking program (Yardstick) best practices implementation

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Women Development Programme

The Women Development Programme is aimed at affirming women in the workplace and is

progressing very well. The target group is women at the lower levels in the organization,

specifically machine operators and general workers. The group is divided into two groups

consisting of ten women each. The selection criteria applied was vigorous and included

medical screening and literacy proficiency. During this period under review, these women

were equipped with different skills including but not limited to the following - supervisory,

discipline, numeracy and communication in English.

The programme has entered its third phase and the following results have been achieved.

The ride on mower group has completed their training and is now in the implementation and

monitoring stage. This involves being deployed back to their depots and every two weeks

they practically operate ride on mower machines under the supervision of our managers to

embed their new skills. The women targeted for the truck driver section of the development

project, acquired their drivers licenses during the quarter and are currently training on

driving skills.

Johannesburg City Parks has for the past three financial years phased in the voluntary

counselling and testing (VCT) campaigns in-line with the Company Strategy and Mayoral

priority deliverables.

Appreciation

A special thanks to the Board, Executive team and our Employees for their tireless

commitment and all their efforts of related and unrelated parties, who have contributed to the

excellent performance achieved in the last year. The skills that we have developed over time

will assist us to face the many challenges and create more opportunities in a global and

competitive environment. Our customers, who have continuously shown interest in ourproducts and services, can expect an even greater commitment to service delivery, with the

approach of the 2010 World Cup and beyond. A Heartfelt thanks to our Share member for

their continuous support to the environmental projects and programmes.

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CHAPTER TWO: PERFOMANCE HIGHLIGHTS

Section 1: Highlights and Achievements

2 348 jobs created vs the plan of 1 200;

Greening Orlando Stadium with community development as a partner;

4 000 trees planted within 3 days to achieve 62 105 trees planted vs an annual plan

of 62 000;

Logged complaint resolution of 85% vs a plan of 72%;

9 Township TVs rolled out for Environmental education awareness and towards

2010;

The development of a further 14 ablution facilities, taking the total in operation to 67;

The development/ reinstatement of 26 water features, bringing the total to 94 inservice against the 2010 target of 100;

Learner licensing of all our Women Development learner drivers;

International qualification with the Project Management Institute, for the first time in

the history of Johannesburg City Parks, an employee in Project management at

professional level;

Re-accreditation with AgriSETA as a training provider;

A park was developed for the youth, by the youth, in Protea North. 200 young people

assisted with this project;

Green Flag accreditation of the Kloofendal Nature Reserve hiking trails;

95% survival rate of all trees planted;

Xtreme Park Makeover at Diepkloof won a gold award at the LivCom awards held in

China during November 2008. The project won Johannesburg City Parks two

awards at the CPSIs Public Sector Innovations: competition: one as runner-up in

the category for Public Sector Innovator of the Year and another one as runner-up

in the Innovative Partnership in Service Delivery category. It was also selected as

one of the City of Johannesburgs four innovative projects and was listed as a finalist

for the Vuna Awards;

Johannesburg City Parks won a national Skills Development Good Practices Award;

The Company also received a certificate for outstanding achievement in Productivity

improvement in the category Public Sector at the Productivity SA awards;

Award for the municipality with the best Expanded Public Works Programme (EPWP)

in the country;

Johannesburg City Parks was also a finalist in theMail and Guardians

Greening the

Future competition;

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The Companys Park Rangers section won the award for the best law enforcement

unit in the Johannesburg Metropolitan Police Department (JMPD);

Productivity SA Award for the Public Sector for Productivity Improvement; and

The development of a Stimulation Park for Children with Disabilities, at Orlando

West.

;

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Section 2: Company four-year review

Units 2009 2008 2007 2006

Key financial figures

Total assets Rm 349.9 354.3 344.9 331.2

Total equity Rm 112.3 109.7 113.0 103.7

Total equity and liabilities Rm 349.9 354.3 344.9 331.2

Bank balance Rk 42 32 21 20

Capital expenditure Rm 11.9 23.5 20.8 8.2

External Funding Loans Rm - - - -

MIG Rm 15.0 9.6 3.1 22.3

Revenue Rm 491.1 425.6 368.2 336.5

Grant and Subsidies Rm 423.7 364.1 335.7 308.8

Direct cost (If applicable) Rm - - - -

Employee costs Rm 289.1 271.0 240.9 210.7

Discounting Rm - - - -

Finance income Rm 23.6 26.4 19.8 19.3

Finance costs Rm 8.2 7.1 7.7 7.2

Surplus before tax Rm 2.7 (3.4) 9.7 31.2

Income tax expense-current Rm - - - -

Income tax expense deferred Rm - - - -

Surplus for the year Rm 2.7 (3.4) 9.7 31.2

Cash generated from operations Rm 2.6 (10.4) (9.4) (6)

Net cash from operating activities Rm 18.1 8.9 3.4 6.1

Net cash used in investing activities Rm (10.7) (22.5) (19.3) (9.6)

Net cash from/(used in) financingactivities

Rm (7.4) 13.6 15.9 3.5

Financial ratios

Liquidity % 151 151 167 149

Solvency % 147 145 149 131

Total operating expenditure/revenue % 103 105 101 94

Interest coverage Ratio 1.32 0.52 1.8 5.32

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Units 2009 2008 2007 2006

Other

Employees number 1 660 1 799 1 932 2 067

Employment equity % 97.65% 97.38% 97.56% 97.19%

Gender equity % 14.65% 11.45% 9.94% 9.63%

People with disabilities % 0.36% 0.34% 0.31% 0.29%

Training cost Rm 1.8 0.9 0.7 0.2

Black economic empowerment Rm 280 272 143 99

Corporate social investment Rm - - - -

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Section 3: Financial Performance

3.1.1 Revenue

The Company posted revenue of R 491, 2m for the year, an increase of 15, 4 % over the

previous year. The subsidy from the Shareholder, the City of Johannesburg Metropolitan

Municipality, made up 86,3% of total revenue received, this being an increase of 16,4% over

the previous year. Revenue from cemeteries increased by 16,2 % to R 18 m and external

services revenue increased by 5,9% to R 44, 8 m.

3.1.2 Results of Operations

Operational costs increased by 12, 4 % on the previous year to R 504, 3 m during this period

(2008: R 448, 8 m). The key operational costs that contributed to the increase were mainly

personnel costs, lease premiums and utilities charges. The increase in personnel costs over

the previous period was 6, 7 %, which was due to an average salary increase of 8.3%. The

increase in lease premiums over previous period was 16,7% due to high CPI to which

premiums are linked. The increase in utilities over the previous period was 57, 8% due high

costs of Water and Electricity.

The Company posted a surplus of R 2, 7m for the period under review, against a deficit of R

3, 4m for the previous year. This increase is largely due to an increase in gross profit of R 5,

9 m on cemetery fees and external service.

3.1.3 Cash Flow:

A Council grant to the value of R 423, 8m was received during this period that contributed

84, 0 % of operational costs. Interest income earned of R 23, 6 m (2008: R 26, 4 million)

contributing 4, 8% of operational costs. The remainder was from cemetery fees and external

services. The Company ended the year in a favourable cash position with cash on hand

being R 0.04 m.

3.1.4 Balance Sheet

Fixed assets increased by a net R 3.6m to R 118.6m. This increase was due to the addition

to the following assets in excess of disposals and depreciation. The increase in employee

benefit investment results from actuarial valuation:

Property, plant and equipment - R0, 9m

Software R 0, 5m

Employee Benefit Investment R 2, 2 m

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The ability of the Company to meet its financial obligations remained constant with liquidity

ratio at 1. 51: 1 (2008 = 1.51: 1).

The decrease of R10, 2 m in the Trade and Other Receivables at year-end was as a direct

result of the increased efficiency in the management of receivables. This is evidenced by the

increase of R 5, 4 m in the amount of loan to shareholder which represent amounts swept

from the Companys bank account into that of the shareholder. The decrease of R 3, 2 m in

inventory is a result of tree stock, which was on hand at the end of the previous financial

year being utilised in planting operations. The decrease of R 5, 2 m in Trade Payables over

the previous year is mainly a direct result of implementation of projects from dedicated trust

accounts (R 5, 7 m).

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Section 4: Capital Projects

CAPITAL DEVELOPMENT

The 2008-9 Capex budget comprised of the following funding sources:

R10, 750m CoJ Funding

R14, 964m MIG (Municipal Infrastructure grant)

R 8, 476m Bulk Contributions (Engineering fees)

R30, 000m CoJ 2010 (Klipspruit/ Kliprivier corridor)

R10, 400m Johannesburg City Parks Funding

The Capex programme has ensured the effective implementation of more than 30 projects

around the City from the above-mentioned funding sources.

Summary of the key areas of Capital Expenditure

Details Budget R000 Actual R000 % Expenditure

CoJ 10 750 10 538 98%

MIG 14 964 14 947 99.9%

2010-KK 30 000 29 770 99.2%

Bulk Contributions 8 476 8 537 101%

Operational Capex 10 400 10 018 96%

TOTAL 74 590 73 807 99%

*The table above reflects total Capex expenditure as a % of budget for 2008/9.

Project Status per funding source is as follows:

Practical completion has been achieved on all COJ funded projects and the snag lists

are in the process of being resolved. All projects are covered by a contracted 6 month

maintenance and establishment period prior to final handover.

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All MIG projects were completed at the end of the 3rd quarter, in line with the provincial

fiscal period. Where applicable, the projects are under the contractor maintenance

period and will undergo final snagging prior to handover to Johannesburg City Parks

operations.

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Bulk Contributions allocations were divided into two components, namely, parks/

infrastructure development and city beautification towards 2010. The city beautification

programmes, which focused on the development of town entrances and road islands,

has been 100% completed and handed over to Johannesburg City Parks operations.

Practical completion has been achieved on the parks and infrastructure development

projects, leading into the snagging and maintenance period. Two projects will continue

into the new financial year, i.e. Witkoppen and Vorna Valley, due to EIA requirements.

The projects developed in Mofolo South and Orlando/ Dube as part of the 2010

Kliprivier/ Klipspruit development programme have achieved practical completion as at

end June 2009. By the time final handover takes place in 6 months time, the project

would have set a new standard for parks development at Johannesburg City Parks,

through the adoption of world class best practices.

The KK project did experience a few challenges, as follows:

Project Challenge Intervention

Mofolo South CLO, ward councillor and

labour challenges

Utilise community members

as far as possible and work

overtime to make up for losttime

Orlando/ Dube Illegal Urban Farming Kraal Developed park around the

kraal.

Region D dealing with the

resettlement matter.

Riverbank stabilisation SANBI unable to perform

works within the required time

frame

Storm water management

design and implementation

expanded at Orlando/ Dube

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It has been ensured that the Johannesburg City Parks development programme is aligned to

the Citys Capital Investment Programmes and development initiatives.

Capital Development Project Breakdown 2008/9

Project Name ProjectDescription

BudgetR000

ActualSpendR000

Project Status Region Completion JobsCreated

MIG FUNDING

WatervalCemetery

Roadconstruction

1 200 1 199 PracticalCompletion

A 95% 10

Avalon Cemeteryextension

18 17 FinalCompletion

D 100% 0

Pioneer Park Musical

Fountain

4 520 4 516 Finalised

equipmentdeliveries forinstallation2009/10

F 100% 0

Cosmo CityExt 6

Parkdevelopment


C 95% 15

Cosmo CityExt 9

Parkdevelopment


C 95% 15

Cosmo CityConservationAreas

LapaDevelopmentforEnvironmentalEducation

750 695 PracticalCompletion

C 95% 10

Orange Farm Park upgrade 965 960 PracticalCompletion

G 95% 15

Ivory Park Park upgrade 68 66 FinalCompletion

A 100% 0

Jukskei Park Park upgrade 950 948 FinalCompletion

E 100% 3

Diepsloot Park Park upgrade 29 28 FinalCompletion

A 100% 0

DiepslootCemetery

New Cemeterydevelopment

1 232 1 231 FinalCompletion

A 100% 0

RiverleaCemetery

New Cemeterydevelopment

1 232 1 231 FinalCompletion

B 100% 0

CoJ CAPEX

Beautification Beautification 3 500 3 482 PracticalCompletion

D 95% 15

Avalon Cemeteryextension

1 000 826 PracticalCompletion

D 95% 10

Ebony Park Upgrade 1 000 1 000 PracticalCompletion

A 95% 10

VlakfonteinPark

Upgrade 250 225 FinalCompletion

G 100% 0

BotanicalGardens EE CentreDevelopment 5 000 5 005 PracticalCompletion B 95% 30

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Project Name ProjectDescription

BudgetR000

ActualSpendR000

Project Status Region Completion JobsCreated

2010 - KK Programme

Mofolo SouthPark

Eco-ParkDevelopment


D 95% 149

Orlando/ DubePrecinct

Eco-ParkDevelopment


D 95% 40

EnvironmentStudies

Studies 250 244 Complete D 100% 0

Stormwater StormwaterManagement

Interventions


D 95% 0

Bulk Contributions

Innesfree Park Park Upgrade& 20m WaterFountain


F 95% 19

WitkoppenPark

Park upgrade 2 000 2 098 Complete- EIAto guidefurtherdevelopment

A 100% 10

WeltevredenPark

Park upgrade 1 000 998 FinalCompletion

C 100% 6

Vorna Valley Studies 400 342 EIA done,await ROD

A 95% 0

Ebony Park Upgrade 476 490 PracticalCompletion

A 95% 5

BordeauxRoad Island

Beautification 240 253 FinalCompletion

E 100% 22

Paulshof Beautification 800 555 FinalCompletion

E 100% 9

Sunninghill Beautification 1 960 2 030 FinalCompletion

E 100% 20

*The above table outlines the Capital Development status both in expenditure and development.100%completion achieved once all snags resolved and upon final project handover

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Section 5: Performance against IDP and City Scorecard

Johannesburg City Parks had a very successful year in terms of performance and

achievement. Set out below, is an analysis of Johannesburg City Parks performance

against its KPIs for the 2008/09 financial year as set out in the Citys IDP scorecard. The

report analyses the performance of Johannesburg City Parks in terms of the IDP scorecard,

measuring performance in terms of both Johannesburg City Parks impact and its financial

and resource management.

Targets exceeded

Key Performance Area: Service Delivery

JOHANNESBURG CITY PARKS exceeded the following service delivery targets:

1) The target of 62 000 for the number of mature, indigenous trees to be planted, was

exceeded by the planting of 62 155 trees.

2) The following two targets for maintenance cycles were exceeded due to increased

maintenance in specific areas as a result of a special effort to increase service delivery:

Road island maintenance cycles were improved from 60 days to 37,5 days on

average,

Side walk maintenance cycles were improved from a target of every 120 days to an

average of 100 days,

Developed parks maintenance cycles were improved from 21days to 14 days

average, and

Undeveloped parks maintenance cycles were improved from 60days to 52,5 days

average.

3) The target of 4 developments in parks was exceeded, as 6 developments were done.

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Key Performance Area: Customer Satisfaction and responsiveness

1) The annual customer satisfaction index ratings target of 70% was well exceeded with

an actual rating of 81%.

2) The target of 12 000 beneficiaries reached through environmental education

programmes was exceeded with 31 297 beneficiaries being reached.

3) The target of 5 areas in regions initiated in which parks and open spaces can be

appropriately rezoned, to reserve the land with an actual of 6

Key Performance Area: Staff Development

Percentage Skills training as a percentage of payroll budget: the 1 % target was exceeded

with an actual of 3%

Targets achieved

Johannesburg City Parks achieved the following IDP targets:

Key Performance Area: Service delivery

Maintenance cycles of 7 days for flagship parks were achieved

Maintenance cycles of 14 days for selected main arterials were achieved

Key Performance Area:

Protection of river eco-systems, ware conservation & protection of ecological reserves

The number of eco-plans in Klipriver catchments (2010) designs: the target of 3 was

achieved and 2 developed with funding from the CoJ 2010 office.

Key Performance Area: Service delivery to shareholder

Completion of tourism package (highlighting parks & biodiversity) as part of overall 2010

tourism and marketing): the target of 1 tourism package was achieved.

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Key Performance Area: Effective Financial Management

Reconciliation of inter-company balances with the CoJ: the target of 100% compliance

was achieved and maintained.

Reconciliation of intra-company balances with other Metropolitan Entities: the target of

100% compliance was achieved.

Key Performance Area: Customer Responsiveness

Number of monitoring reports on maintenance of parks: the target of 1 per quarter was

achieved.

The number of conservation areas initiated for r-proclamation as nature reserves : the

target of 2 was achieved

Key Performance Area: HIV and AIDS

100% of the workforce had been exposed to HIV and AIDS awareness programmes.

Targets partially achieved

Key Performance Area: Effective Financial Management

Percentage of MEs Capital budget spent: Johannesburg City Parks spent 99,46% of its

Capital budget against a target of 100%.

Variance against MEs operating budget 6, 07% versus a target of 0% variance. This

was due to extra revenue received that resulted in high input costs and increased

service delivery.

Capex spent on BEE procurement as % of total Capex 57% vesus a target of 75%.

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Section 6: Assessment of Arrears on municipal taxes and service charges

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

Name of Entity Amount Owed

R000

Status Comments

City of

Johannesburg

Metropolitan

Municipality

5 398 Provided for in

Johannesburg

City Parkss

books

Current

City Power

Johannesburg

597 Provided for inJohannesburgCity Parkssbooks

Current

JohannesburgDevelopment

Agency


Current

Johannesburg

Road Agency


Current

Johannesburg

Water

5 150 Provided for inJohannesburgCity Parkssbooks

Current

Pikitup

Johannesburg


Current

The

Johannesburg

Civic Theatre


Current

The

Johannesburg

Zoo


Current

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6.2: Assessment of Directors and senior managers municipal accounts

Name ofDirector/ SeniorManager

Designation Name ofMunicipality

MunicipalAccount Name &Account Number

AccountStatus

Comments

G Zabala Chairperson ofthe Board

Johannesburg G Zabala900706021

In order

L L Williamson ManagingDirector

Johannesburg LL Williamson900104563

In order

HC Kasan Non-ExecutiveDirector

Johannesburg Kasan HC500065574

In order

M Bahula Non-ExecutiveDirector

Johannesburg M BahulaG063

In order GlenvistaVillageComplex

A C Carolissen Non-ExecutiveDirector

Tshwane Carolissen AC &AL20684589002028316835

In order

V Ramsingh Non-ExecutiveDirector

Midvaal VB & GH Ramsing40000786

In order

DR Mokhobo Non-ExecutiveDirector

In Order

V Lennon Non-ExecutiveDirector

In Order

NJ Mpufane Non-ExecutiveDirector

AppointedJanuary 2009and resignedJune 2009

K Venier Non-ExecutiveDirector

Johannesburg No personalmunicipal account

In order ResignedSeptember2008

N Mabaso Non-ExecutiveDirector

Johannesburg Mabaso TM & NN400764321

In order ResignedJanuary 2009

S M B Nyalunga Non-ExecutiveDirector

Tshwane Nyalunga SMB2079410101


T B Nzimakwe Non-ExecutiveDirector

Johannesburg Nzimakwe206922545


A Buzo-Gqoboka

HumanResourcesExecutive

City ofEkuruleni

No personalmunicipal account

In order Sectional Title

R Clements Chief FinancialOfficer

City ofEkuruleni

R Clements26008339665

In order

G Cooke Operations

Executive

Johannesburg Cooke G &VW

206747903

In order

H H Fouche Marketing &Communications

Johannesburg Fouche BN502444401

In order

K Molale GM: AssuranceServices

Newaccount

P Meyer OperationsExecutive:Environment andInfrastructure

Johannesburg Meyer PS & MD302336913

In order

M SayedHassan

CompanySecretary

Johannesburg M Sayed Hassan504120480

In order

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Section 7: Statement on amounts owed by Government Departments and publicentities

Name of entity Amount Owed

R000

Status Comments

NIL NIL NIL NIL

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Section 8: Recommendations and Plans for the next financial year.

Recommendations and plans for 2009/10

Planting of 50 000 trees by December 2009,

Maintaining a 95% survival rate on newly planted trees,

The development of an Xtreme road island,

Implementation of the Green Leaf award,

100% world class parks programme implementation,

100% practical completion of all capex projects by April 2010,

2010 World Cup beautification of the CoJ,

Maintenance and enhancement of main arterials and road islands,

EPWP (job creation),

Women development, and

Youth development

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CHAPTER THREE: DIRECTORS REPORT AND GOVERNANCE

Section 1: Corporate Governance Statement

The Board of Directors and Executives recognise and are committed to the principles of

transparency, integrity and accountability advocated by the King Committees Code of

Corporate Practices and Conduct. Corporate Governance within Johannesburg City Parks is

managed and monitored by a unitary Board of Directors, several Board committees and the

Executives.

The Board is of the opinion that the Company currently complies with the principles

incorporated and enunciated in the Code of Corporate Practices and Conduct, as set out in

the King Reports.

Section 2: Board of Directors

The Board is chaired by a non-executive director, Mr G Zabala, and consists of eight non-

executives and one executive director, the Managing Director, Mr L L Williamson. There

were changes in the directorship of Johannesburg City Parks during the period under

review, which included three appointments due to the rotation of three Non-Executive

Directors within the group as well as two resignations by directors.

The Board remains responsible to the CoJ, the sole member, in the exercise of its duties.

Johannesburg City Parks is accountable to its stakeholders, the Citizens of Johannesburg

and its parent municipality. A Service Delivery Agreement (SDA) concluded in accordance

with the provisions of the Municipal Systems Act governs Johannesburg City Parkss

relationship with the CoJ. The Board provides Monthly, Quarterly, Bi-Annually and Annual

Reports on its performance and service delivery to the parent municipality as prescribed in

the SDA, the MFMA and the MSA.

Non-executive Directors contribute an independent view to matters under consideration and

add to the depth of experience of the Board. The roles of the Chairperson and Managing

Director are separate, with responsibilities divided between them. The Chairperson has no

executive functions.

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Board meetings are held at least quarterly, with additional meetings called where the

circumstances necessitate such.

Members have unlimited access to the Company Secretary, who acts as an advisor to the

Board and its committees on matters including compliance with Company Rules and

Procedures, statutory regulations and sound corporate governance.

The Board or any of its members may, in appropriate circumstances and at the expense of

the Company, obtain the advice of independent professionals.

During the course of the financial year, the Directorship and skills base was used to

determine the appropriate committees of the Board and the membership thereof. These

changes to the committees of the Board resulted in more diligent monitoring of performance

and guided the company strategy.

To this end, the Corporate Strategy was reviewed early in 2008 and a new corporate

strategy was developed. All the Operational areas reviewed their Key Performance Areas

and were aligned to the Corporate Scorecard, which was geared towards accountable

service delivery.

The Audit & Risk Committee which meets regularly comprises of three Independent

Members appointed by the shareholder over and above the two non-executive directors who

sit on the board, continued to emphasize the balance of the portfolio. In addition, specific

attention was drawn to performance as envisaged in the Municipal Finance Management Act

of 2003.

The Strategy, Performance and Remuneration Committee, chaired by the Chairperson of theBoard reviewed matters considered by the committees and advised the Board Agenda. The

Committees membership comprises of the chairpersons of the various committees of the

Board who present on all matters considered and deliberations that took place at committee

level. This provides an opportunity for Non-Executive Directors to be better advised of

company matters prior to Board meetings.

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The following committees had existed during the course of the year, each of which is chaired

by a non-executive director:

Audit and Risk Committee

Remuneration Committee (2008)

Committee of Chairs (2008)

Marketing Committee (2008)

Human Resources Committee

Finance and Operations Committee (2008)

SHEQ Committee (2008)

Strategy Performance and Remuneration (2009) Finance and SHERQ Committee (2009)

Marketing and Operations Committee (2009)

The committee structures were changed in 2009 with the appointment of new directors to

the Board.

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Attendance at meetings held during the year was as follows:

Attendance at meetingsheld during the year wasas follows:

AGM Board AuditandRisk

Remune-ration

Committeeof Chairs

Financeand

Operations

HumanResource

s

No. of meetings held 1 6 6 4 4 4 6 G Zabala#(MA) 1 6 4 4L Williamson(MC) Managing Director 1 5 6 4 4 1 5 A Carolissen(MC) 1 6 1 4 3 N Mabaso(FA) 5 4 4 1 5 SMB Nyalunga(FA) 1 5 1 3 3TB Nzimakwe(MA) 1 6 6 4 2 1 6VB Ramsingh(MI) 1 5 3 4 6 K Venier(FW) 1 5 4 1 1 3H Kasan(MI) 1 5 1 4 M Bahula(MA) 1 6

F Female A African W WhiteM Male C Coloured I Indian

# Chairperson

For details, refer to the previous pages.

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The Board of Directors has adopted the Board Charter, which encapsulates the City of

Johannesburgs Governance Protocol and includes matters of ethics, procedure and the

conduct of committee members. Registers are kept and updated on the disclosure and

declaration of interests of directors and senior management.

The Board and Senior Management ensure that there is full material compliance to all

relevant legislation. The Company Secretary has certified that all statutory returns have

been submitted to the Registrar of Companies

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Human Resources Committee

The Human Resources Committee is chaired by Prof. H Kasan who is an independent

non-executive director of the Company.

The Committee has been established with the goal of considering matters relating to the

conditions of service and employer-employee relationship.

Operations and Marketing Committee

The Operations and Marketing Committee is chaired by Ms M Bahula who is an

independent non-executive director of the Company.

The Committee has been established to develop and manage the companys reputation

and exposure through service delivery strategy, policy development and marketing

initiatives.

The Committee has been established with the goal of considering ad recommending to

the Board on matters relating to the Companys operational activities, policies, service

delivery and Information Technology solutions.

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Section 4: Directors Remuneration

Non- Executive Directors

NON EXECUTIVE DIRECTORS REMUNERATION

Name DesignationMeeting Fee

ROther

RRetainer

RTotal

R

1 G Zabala

Chairperson: Board &Strategy, Performance &

Remuneration Com 143 176.00 - 34 500.00 177 676.00

2 M BahulaChairperson: Operations

& Marketing Com 86 255.00 - 17 250.00 103 505.00

3 A CarolissenChairperson: Audit &

Risk Com 120 755.00 - 17 250.00 138 005.00

4 H Kasan

Chairperson: Finance &SHEQ & Human

Resources Coms 130 244.00 - 17 250.00 147 494.005

3V Lennon Member 31 915.00 - 8 625.00 40 540.00

62N Mabaso Member 37 089.00 - 12 937.50 50 026.50

73D R Mokhobo Member 12 939.00 - - 12 939.00

8 3N J Mpufane Member 7 763.00 - - 7 763.00

92S M B Nyalunga Member 52 614.00 - 12 937.50 65 551.50

10 2T Nzimakwe Member 64 689.00 - 12 937.50 77 626.50

11 V Ramsingh Member 38 816.00 - - 38 816.00

121K Venier Member 8 626.00 - - 8 626.00

TOTAL 734 881.00 - 133 687.50 868 568.50

INDEPENDENT AUDIT COMMITTEE MEMBERS REMUNERATION

Name DesignationMeeting Fee

ROther

RRetainer

RTotal

R

1 C D Kneale Independent Member 21 565.00 - 17 250.00 38 815.00

2 H Moolla Independent Member 30 191.00 - 17 250.00 47 441.00

3 A L Nel Independent Member 30 191.00 - 17 250.00 47 441.00

TOTAL 81 947.00 - 51 750.00 133 697.00

1

Resigned end of August 20082Retired at AGM on 23 January 20093Appointed at AGM on 23 January 2009

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Section 5: Company Secretarial Function

The Company Secretary is responsible for the following areas of Johannesburg City Parks

business:

Corporate Governance

Legislative & Statutory Compliance

Secretarial

Legal Advice

Safety, Health, Environment and Quality (SHEQ)

In terms of protocol arrangements, the MoEs (including Johannesburg City Parks) liaise with

the Office of the City Manager through the SHU on governance and compliance issues and

service delivery matters.

The Company has complied, and is in compliance, with the Companies Act and all other

applicable legislation. The Company simultaneously strives to comply with the King Reports

on Corporate Governance and the new amendments to the Municipal Finance Management

Act (MFMA) and the Municipal Systems Amendments Act.

The Company Secretary has in addition ensured that the Directors of the Company wereadvised of their roles, duties and responsibilities.

The Company registers and related statutory requirements have all been maintained as

required by the Companys Act and best practice.

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Section 6: Risk Management and Internal controls

In line with the Risk Management Framework, effective risk management is integral part of

all decision-making processes with Johannesburg City Parks.

Management is continuously developing and enhancing its risk and control procedures to

improve the mechanisms for identifying, assessing and monitoring risks. Risk management

is addressed in the areas of physical and operational risks, human resource risks,

technology risks, and compliance risks. Key policies and procedures are in place to manage

the organisations governance, operations and information systems with regard to the:

i) reliability and integrity of financial and operational information;

ii) effectiveness and efficiency of operations;

iii) safeguarding of assets; and

iv) compliance with laws, regulations and contracts.

A corporate risk register is maintained and has resulted in management interventions to

address those residual risks exceeding the companys risk appetite.

Risks are reviewed on an annual basis or as often as circumstances warrants. Any

emerging risks are considered by management and the risk register is updated accordingly.

Ownership of each risk remains the responsibility of assigned senior executives, who report

on progress made with agreed action plans and existing internal controls. Good governance

practice is adhered to by ensuring that the necessary emerging strategic risks are reported

to the Audit and Risk Committee. The following emerging risks were incorporated into the

corporate risk register:

Implementation of New Road Safety Regulations (AARTO)

Global warming

Contract management

Land availability for burials especially in the South Western quadrant of the City.

Communicable diseases such as N1H1

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Risk assessments are also conducted at operational level, focusing at all the business units

within the company. The process followed at the business unit level is the same as applied

at the strategic level. All the risk identified and agreed to with the participants, were

evaluated in terms of the probability factor and perceived control effectiveness. This allowed

us to rank the risks in terms of residual nature after taking into consideration the

effectiveness of the controls stated. For purposes of the exercise, operational risks are

defined as the risks from inadequate or failed internal processes, people, systems and

applicable external events. This includes compliance risks but excludes strategic and

reputation risks. The risks are monitored and reported upon quarterly as well.

Disaster Management and Emergency Preparedness

In line with the Disaster Management Act, volunteer employees were been identified and

trained in First Aid and Fire Fighting.

We conducted evacuation drills at several of flagship facilities during the last quarter of the

financial year. The focus was on evacuation drills considering fire prevention. This enabled

us to gauge the readiness of depots and whether our staff employees are conversant and

aware of what would be required of them in case of fire emergencies. The exercise helped

us to identify any gaps with regard to our emergency preparedness and compliance to the

Disaster Management Act.

The following positive outcomes were identified:

Employees response to the emergency well and should be commended for the interest

showed.

There is generally awareness amongst employees on the responses required in case of

evacuation. Employees were aware of important emergency numbers.

Risk Control

Physical risk control inspections were conducted for all critical sites in line with risk control

standards adopted throughout the City. The main purpose of the exercises was to comply

with the standards as well as to identify the risks and exposures associated with each sites

unique circumstances. The following areas of focus were addressed during the

assessments:

Risk management

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Fire defense

Security

Emergency planning

Legal liability in terms of OHS Act

Motor fleet management

The assessments were done in conjunction with the Johannesburg Risk and Audit Services

Department.

We take pride in reporting that majority of the sites assessed were fairly in line with the

minimum requirement of set average of 85% compliance. However, it is imperative to note

that security is still a challenge; management is, however, trying its level best to address the

matter in spite of the financial constraints.

Risk Financing

The company experienced adverse claims losses during the course of the year. The claims

lodged with the insurance brokers amounted to R 8 197 219.13 comprising of both assets

and liabilities. This has had immense impact to the insurance premium payable by the

company. Various factors contributed to the escalation such as global economic meltdown,

recent floods experienced in some parts of the City of Joburg, etc. The premiums for the

year 2008/09 were confirmed at R 2 649 951.45 (Vat Inclusive) as compared to the previous

years, which stood at R 1 497 129.04. This is 77 % premium increase.

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Section 7: Internal Audit Function

The company has an in-house Internal Audit unit, which reports functionally to the Audit and

Risk Committee and administratively to the Managing Director. The purpose, authority and

responsibility of the Internal Audit Unit are formally defined in an Internal Audit Charter,

which is reviewed by the Audit and Risk Committee and approved by the Board on an

annual basis.

A Risk Based Annual Audit Plan was developed, presented and approved by the Audit and

Risk Committee beginning of the financial year. Audits were conducted in line with the plan.

Some of the specialized audits such as Information Technology, Tax, etc were outsourced to

various audit firms due to minimal skills internally.

Internal control

The board of directors is responsible for the companys systems of internal control. These

systems are designed to provide reasonable but not absolute assurance as to the integrity

and reliability of the financial statements and to safeguard, verify and maintain accountability

of its assets and to detect and minimize significant fraud, potential liability, loss and material

misstatement while complying with applicable laws and regulations.

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Section 8: Response to the Auditor-General Report

Responses to 2007-08 findings

No Category Finding (2007-08) Management

Response

Responsible

Executive

1 Employercontributions for seniormanagement personalinsurance

We noted that the employer contributions made onbehalf of senior management to the ProfessionalProvident Society (PPS) are not processed via theVIP payroll system. This contribution is not anallowed company contribution per the Income Taxact, thus it has the effect that the contribution madeon behalf of senior management will not be includedin their respective PAYE calculations as a fringebenefit.

It remains the entity's responsibility to ensure thatthe correct PAYE is paid over to SARS on a monthlybasis. Thus this process of direct payment of thecontributions will result in the under payment ofmonthly PAYE amounts to SARS and the benefit willnot be reflected in the individual's IRP5 certificate.

Resolved HumanresourcesExecutive

2Fixed AssetLabels

The following assets selected for physical verificationhad no asset number allocated to it per theinformation in the fixed asset register as well as nonumber physically attached to it:

Asset Description

Physical

Location Cost

XEROX C123 TX - 3552152505 700-000062 40 745

TELEVISION SET 513-000013 10 525

TELEVISION SET 513-000014 6 578

HPDL380R05 E5345

PERFORMANCE EU SERVER

700-70004 92 450.62

ERICSSON BP250 BUSINESSPHONE

700-70002 157 630.00

DCI INSTALLATION 700-70004 1 031 342.75

S45 CLUSTER (7 WAY) 801-80100 55 540.96

Resolved ChieffinancialOfficer

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Responses to the 2008-09 findings

No. Category Finding ManagementResponse and

corrective action.

Responsibility

1 Income Tax Income taxamounting toR148 770 andinterest thereon ofR21 199.67 is due toSARS for the yearended 30th June 2007

The Company enjoystax exempt status andthe liability raised bySARS is incorrect. Anobjection (ADR1) hasbeen lodged withSARS.

CompanySecretary

2 Income Tax The 2008 IT14(Income Tax return)has not beensubmitted to SARS

JCP is in the process ofmaking the necessarysubmissions.

CompanySecretary

3 Fixed Assets Data points installed(valued atR15 717.08) shouldnot have beenexpensed as repairsand maintenance

The individual datapoints were installed ata cost of less thanR2000.00 and in termsof the JCP Fixed Assetpolicy were notcapitalised.

Chief FinancialOfficer

4 Fixed Assets An external tapedrive purchased(valued atR28 520.00) shouldnot have beenexpensed as repairsand maintenance

The external tape driveshould have beencapitalised. Sufficientcontrols over asset andexpense itemallocations exist and willbe strictly monitoredand adhered to goingforward. In view of themateriality of the valueof the tape drive, it isproposed to capitalisethe tape drive in theyear 2009/10,providedthere are no materialadjustments required to

be processed in theyear under review.

Chief FinancialOfficer

5 Inventories No debit notes areissued for returns tosuppliers

There are strict rules inplace for the receivingof inventory and onlywhen the receiving clerkis 100% sure that theitem is correct will hereceive the item.

OperationsExecutive:Infrastructure andEnvironment

6 Inventories During stock take,stock items were notmarked with a

crayon/chalk/orsticker to indicate that

Stock items are countedby 2 separate teams. Inaddition all stock count

variances areinvestigated. Based on

OperationsExecutive:Infrastructure and

Environment

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the stock wascounted

the above JCP believethat these controls areadequate, but in orderto improve controlsfurther, managementwill during stock count,mark items countedwith a crayon/chalk orsticker

7 Proceduresand controls

Although the entityhas implementedprocedures andcontrols, it was foundthat they are notadequatelydocumented in theprocedure manuals

Management reviewprocedures and controlson a regular basis andwill ensure that relevantprocedures and controlsare updated to take intoaccount the controlfeatures that are being

practised but currentlynot documented.

All Executives

8 Directorsremuneration

PAYE is not beingdeducted from 5non-executiveDirectors

The Directors whoreceive theiremoluments throughcompanies will beplaced on the payrolland PAYE will bededucted from theirremuneration.

CompanySecretary

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Section 9: Corporate Ethics and Organisational Integrity

Johannesburg City Parks places a high premium on sound ethical behaviour and integrity,

which should be beyond reproach. To achieve this, the Board adopted a Code of Conduct

and a Charter encapsulating sound governance and an ethical approach to the way its

directors, officers and employees conduct business internally and externally. This Charter

subscribes to the principles set out in the King Reports ll.

In addition to the above, the organisation is structured in a manner that sees clear and

material observance of the Municipal Structures Act, Municipal Systems Act and Municipal

Financial Management Act, as well as other pertinent legislation including the Companies

Act, Labour Relations Act, Occupational Health and Safety Act and financial/tax legislation.

The Audit and Risk Committee, consisting of independent non-executive directors as

members as well as three additional independent members appointed by the member,

oversees and considers audit matters and risk management issues.

From the outset of the Companys existence, there has been a clear system of delegated

authority in place, which has a set framework for the organisational structure and executive

implementation supported by the appropriate committee structures.

All the above support the regular assessments of governance and legislative compliance

reflecting a positive status in relation to ethics and organisational integrity.

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Section 10: Sustainability Report

Johannesburg City Parks trades in a solvent position and it is not anticipated that this will

change. As is required by the MFMA, Johannesburg City Parks has an approved budget

and receives regular subsidy payments from the CoJ. The Board of Directors, and

specifically the Audit and Risk Committee, have considered on a regular basis the aspects of

trading as a going concern and the Financial Reports of the Company and do not foresee

any risks to the continued sustainability of the organisation.

Human development is a high priority within the organisation and developmental training is

focussed at not only enhancing productivity and service delivery, but also the empowerment

and skilling of employees and community members through the EPWP programmes. The

employees of Johannesburg City Parks are regarded as an extremely valuable asset and

are treated in a caring manner.

By its very nature, Johannesburg City Parks is focused on the social and environmental

issues, which are paramount for the development of a large metropolis and the approval of

its inhabitants wellbeing. The development of parks and nature areas, especially in the

previously disadvantaged areas, receives specific priority. It is acknowledged that the taking

care of ancestors and ensuring a suitable final resting place for them, is especially important

to many of the cultures represented in the community and Johannesburg City Parks is

ensuring that sufficient burial space is provided both in the immediate and long term.

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Section 11: Corporate Social Responsibility Report

The following key initiatives were effected through the use of Sponsors and Donors in an

effort to optimise the potential of our facilities and our involvement in providing benefits to

other needy organisations.

Launch of Township TV in Lenasia

Funded by Township TV, Johannesburg City Parks installed the fourth big-screen TV at

Rose Park, Lenasia with the aim of providing townships with a unique form of

entertainment in a safe and secure environment and also encouraging healthy lifestyles

in parks.

Lauch of Nkanyezi Stimulation Park

Johannesburg City Parks, together with Standard Bank unveiled the completion of the

first phase of the development of Nkanyezi Stimulation Park. The focus here was to

provide a facility furnished with special playground equipment for children with

disabilities. 400 Standard Bank Staff members were involved in the beautification of the

park on the day of the launch. 150 Children from Shomang Primary School, who use

Nkanyezis class rooms were taken to the JHB Zoo for an educational tour.

Toyota River Clean Up Moroka Dam

Toyota and JHB City Parks were involved in the clean up of Moroka Dam. Children from

various schools participated in the clean up in order to create an awareness of clean

water bodies.

Johannesburg City Parks, TOTAL & Gauteng Department of Education

My Dream-Park Primary Schools Competition - Park handover ceremony at Mayibuye

Primary School Ceremonial Park handover aimed at encouraging landscape

architecture as a career, exploring artistic skills as well as educating learners about

urban greening that can help to improve the quality of life.

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Johannesburg City Parks & CELL-C:International Day of the Disabled Person at

Nkanyezi Stimulation Centre, Orlando West

Christmas in the Park made possible by Johannesburg City Parks in partnership with

Cell C. The 2008 event afforded 2 000 children and 500 caregivers the opportunity tocelebrate Christmas in a park with facilities specifically designed to accommodate

intellectual and physical challenges.

World Wetlands Day: Dorothy Nyembe Park in Dobsonville

Celebration of World Wetlands Day and the Launch of Adopt a Wetland Schools

Competition. Seven schools in Regions D & E participated in the lead up to National

Wetlands day with a theme of Wetlands connect us all and a total of 420 learners and

22 educators were reached.

Emmarentia river clean up campaign

A clean-up campaign hosted by City Parks and supported by residents and the media

were held in and around the Johannesburg Botanic Gardens.

Tree planting with G R Harris Primary school & PRISA

Planting of 18 trees by Johannesburg City Parks in partnership with G R Harris Primary

School and PRISA.

Take a girl child to work day

Marking the 7th anniversary of the Take A Girl Child To Work Day campaign,

Johannesburg City Parks once again supported the initiative and the theme for 2009

was changing your world.

World Environment day Paulshof clean up campaign

A clean up campaign led by Johannesburg City Parks and supported by members of the

Paulshof community. The campaign demonstrates City Parks commitment in protecting

the environment and increasing awareness.

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Greening Orlando stadium

In less than seven hours, Johannesburg City Parks in partnership with Community

Development and 300 members of the community transformed the dusty areas in and

around Orlando Stadium into an attractive green lung. The initiative would serve as a

catalyst to offset air pollution and improve the state of the environment for the benefit

and enhancement of the township, its citizens and visitors.

Clean up campaign

Chiawelo Park - Soweto

My Park, My environmentA total 178 members of the community attended the

cleaning campaign, whereby they cleaned the park, irrigated, used own spades,

equipment to cut the grass, collected and bagged. Five members of the community were

elected to police the park and report any irregularities.

Midway clean up campaign

Midway Park near Chiawelo Station

Environmental Right Campaign

A total of 381 elderly members of the community attended the event, whereby a

workshop was conducted to raise awareness on environmental issues and park

safety. The park was cleaned and members were presented with City Parks t-shirts,

water bottles and notebooks.

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CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT

Section 1: Human Resource Management

The year under review marks a significant step forward in identifying the need for, andcreating a more sophisticated human resource management architecture to allow the

organisation to meet the challenges outlined above. Core activities of this function during this

period have included the identification of organizational specific, strategic human resources

goals and the implementation of related performance drivers and enablers which include the

following deliverables:

Ensure organizational design aligns with strategic mandate and prescribed outputs

required for effective delivery.

Create a base human resources document to inform HR processes such as

remuneration, skills development, performance management, employment equity,

succession planning, talent management, leadership development, recruitment and

employee relations.

Define organizational roles to identify performance measures and ensure performance

delivery.

Focus strongly in aligning company strategy and organizational outputs.

Create an accurate, transparent and fair remuneration strategy and system.

Direct and focus development on competence required by the organization to deliver on

its goals.

Set the job standards required for effective and efficient management of the

organization.

Salaries and Expenditure

The table below indicates expenditure on salaries over the last 3 years:

2008/9 2007/8 2006/7

R000 R000 R000

Total expenditure 504 248 415 453 355 660

Total payroll expenditure 291 343 273 040 240 943

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The table below indicates the total payroll expenditure over the last 3 years as a % of the

total budget:

2008/9 2007/8 2006/7

Payroll expenditure as a % of total

budget

60% 66% 68%

Staffing

Age analysis

AGE NO OF

OPERATIONS

EMPLOYEES

OPERATIONS

PERCENTAGE

NO OF

SUPPORT SERV

EMPLOYEES

SUPPORT

SERV

PERCENTAGE

COMPANY

TOTALS

COMPANY

PERCENTAGE

61-70 71 4.71% 1 0.65% 72.00 4.34%

51-60 638 42.34% 36 23.53% 674.00 40.60%

41-50 576 38.22% 40 26.14% 616.00 37.11%

31-40 177 11.75% 51 33.33% 228.00 13.73%

21-30 45 2.99% 25 16.34% 70.00 4.22%

15-20 0 0% 0 0.00% 0.00 0.00%

TOTAL 1507 100.00% 153 100.00% 1660 100.00%

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The majority of the companys workforce is in the age categories 51-60 and 4150. These

two categories represent approximately 77% of the companys workforce. The company is

cognisant of the possible implications of the age profile on productivity and service delivery

challenges, and has investigated alternatives to mitigate this.

NO OF STAFF PER FUNCTION (30.06.2009)

DEPARTMENT DEPOT ACTUAL

COMPLEMENT

Ops:Parks,Cem & S.Trees Parks 869

Ops:Parks,Cem & S.Trees Street Trees 179

Ops:Parks,Cem & S.Trees Cemeteries 141

Ops:Parks,Cem & S.Trees Technical

Training

6

Ops:Parks,Cem & S.Trees External Services 13

Ops:Environ & Infrastructure Ops

Executive:Enviro

n & Infra

2

Ops:Environ & Infrastructure Facilities

Management

135

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