JOHANNESBURG CITY PARKS (An association incorporated under Section 21) 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)

JOHANNESBURG CITY PARKS AN ASSOCIATION INCORPORATED UNDER SECTION 21 OF THE COMPANIES ACT COMPANY INFORMATION: Registration number Registered Address : : 2000/028782/08 Johannesburg City Parks City Parks House 40 De Korte Street Braamfontein 2017 Postal Address : P O Box 2824 Johannesburg 2000 Telephone number Fax number Website : : : (011) 712-6600 (011) 712-6796 www.jhbcityparks.com

Bankers Auditors

: :

ABSA Bank of SA Limited 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 Section 2: Strategic Objectives Section 3: Foreword by Member of the Mayoral Committee Section 4: Chairpersons Report Section 5: Managing Directors Report Section 6: Statement of Responsibility 4 7 9 10 14 24

CHAPTER TWO: PERFORMANCE HIGHLIGHTS Section 1: Highlights and Achievements Section 2: Financial Performance Section 3: Capital Projects Section 4: Performance against IDP and City Scorecard Section 5: Assessment of Arrears on municipal taxes and service charges Section 7: Recommendations and Plans for the next financial year. 25 28 31 38 42 45

Section 6: Statement on amounts owed by Government Departments and public entities 44

CHAPTER THREE: DIRECTORS REPORT AND GOVERNANCE Section 1: Corporate Governance Statement Section 2: Board of Directors Section 3: Board Committees Section 4: Directors Remuneration Section 5: Company Secretarial Function Section 6: Risk Management and Internal controls Section 7: Internal Audit Function Section 8: Response to the Auditor-General Report Section 9: Corporate Ethics and Organisational Integrity Section 10: Sustainability Report Section 11: Corporate Social Responsibility Report 46 46 50 52 54 55 58 59 60 61 62

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CHAPTER FOUR: HUMAN RESOURCES AND ORGANISATIONAL MANAGEMENT Section 1: Human Resource Management Section 2: Employment Equity Section 3: Skills Development and Training Section 4: Performance Management Section 5: HIV/AIDS on the Workplace Section 6: Employee Benefits Section 7: Supply Chain Management and Black Economic Empowerment 64 66 68 69 70 73 74

CHAPTER FIVE: AUDITED STATEMENTS AND RELATED FINANCIAL INFORMATION Report of the Auditor-General General Information Directors Responsibilities and Approval of Statement Directors Report Report of the Company Secretary Statement of Financial Position Statement of Financial Performance Statement of Changes in Net Assets Cash Flow Statement Notes to the Annual Financial Statements Detailed Statement of Financial Performance Annexure E CHAPTER SIX: FUNCTIONAL AREA SERVICE DELIVERY REPORT 76 81 83 85 87 88 89 90 91 92 140 142 141

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CHAPTER ONE: INTRODUCTION AND CORPORATE PROFILE Section 1: Corporate Profile and Overview of the entity Johannesburg City Parks (JCP) 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 Number of Parks and Arterials Area of Developed Parks and Arterials Area of Undeveloped Parks Nature Reserves Street Verges Street Trees Number of Cemeteries Area of Cemeteries Number of Crematoria Number of Nurseries Water surfaces Bird sanctuaries Trails and River Trails Environmental & Education Centres Size of fleet Quantity 2 328 6 587,5 hectares 3 576,5 hectares 1 569 hectares 5 500 hectares 1,3 1,6 million 35 904 hectares 2 2 174 hectares 24,6 hectares 107km 6 321 Vehicles; 136 Trailers

Total number of employees as at 30 June 2008: 1 799

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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

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Project Management Marketing Marketing and Market Research Stakeholder Liaison Communication Media Liaison Business Development Planning Design Landscaping

Training and Education Horticultural and other job related training Training of temporary workers through EPWP, with regard to the required safety standards and task related skills

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Section 2: Strategic Objectives JCP has aligned its strategic objectives with the City of Johannesburgs Mayoral Priorities, strategic plans and five-year programmes as follows: Improve Service Delivery JCPs 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. Effective Financial Management JCP 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. The unqualified audit results proved that JCP has been well governed and managed. A Safe, Clean and Green City By its very nature JCP contributes to the greening of the City with special emphasis on those areas requiring attention in this regard. To safeguard conservation areas JCP initiated areas to be re-proclaimed as nature areas. Also, areas to be rezoned as parks have been identified and advised to the CoJ. 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.

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HIV and AIDS JCP continues to combat HIV and AIDS through the development and education of staff as well as wellness programmes to ensure staff performance. JCP complies with the Citys and its own HIV and AIDS policies. Customer Satisfaction and Responsiveness Through improved service delivery JCP has improved customer satisfaction. JCPs employee satisfaction, sustainability of our service delivery and service delivery excellence also played a valuable role towards community development. Economic Development and Job Creation JCP 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 achieving this Mayoral Priority.

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Section 3: Foreword by Councillor P. Naidoo, Environmental Portfolio member of the Mayoral Committee City Parks has and continues to play a significant role in protecting, maintaining and expanding the City Of Joburgs green and open spaces. The Honourable Mayor, Cllr Amos Masondo, set City Parks the ambitious task of planting 200 000 trees by the year 2010. It is with a great sense of pride that I can categorically state that City Parks is comfortably on track to achieving this difficult task. City Parks has aggressively pursued the objective of developing open spaces in previously disadvantaged townships. They have launched and continuously service parks to the highest quality standards in townships throughout the city. City Parks in partnership with Township TV have turned our parks into spaces of learning and community gatherings. Central to the many achievements by City Parks, is their valued participation in the Klipriver/ Klipspruit Rehabilitation Project. Once again the quality of the development of the environmental nodes along these waterways can be judged by the number of people utilising the facilities City Parks has developed and maintains in the areas along these rivers. Under the leadership of Mr Luther Williamson and its hard working employees, City Parks will leave a legacy of green spaces that will be appreciated by many generations to come.

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Section 4: Chairpersons Report Introduction 2007/2008 started with a challenge for JCP as our Managing Director was seconded to Pikitup and a number of our Board members were serving their first term. In spite of these challenges, I am pleased to report that JCP continued to set high standards and pursued high levels of service delivery. The 96% overall achievement in the scorecard by our Executive Management bears testimony to this. Our Executive management team experienced some changes with the replacement of the Company Secretary and the HR Executive in the third quarter of the year. In spite of these changes at the Executive Management levels, staff have continued to demonstrate their commitment, enthusiasm and innovation in fulfilling JCPs mandate and the CoJs Service Level Agreements with JCP. Mandate The mandate of JCP is to develop, maintain and conserve open spaces. In this financial year, JCP continued to align its business plan to the Mayoral Priorities and to the Environmental Sector Plan in order to meet the expectations of its customers and stakeholders. It is in this context that the performance of JCP must be viewed. Performance Review A key focus of our activities, in addition to the maintenance of our portfolio, has been the 200 000 tree planting campaign. We are pleased that this campaign is gaining ground and trees are now visible, especially in the underserved areas of our population. These areas, through this campaign and the beautification of our side walks and road islands have made our city to look vibrant, green and fresh. Management has championed this project with vigour and aplomb and we want to express our greatest appreciation to the Companies and individuals that have supported this initiative financially and through their donation of trees. Our flagship program, the Extreme Park Makeover, where a park is developed in 24 hours, benefitted the community of Diepkloof in this financial year where 2 hectares of land was converted to one of the most aesthetically pleasing parks in the City of Johannesburg. We are proud to yet again announce another first, the development of a Park for People with Disabilities. This was achieved through a combination of JCP allocations, contributions by Standard Bank and the prize money of 10 000 Pound Sterling that JCP won as part of the LivCom awards.

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On behalf of the Board we wish to congratulate management on benchmarking our work with international norms and winning 8 awards of the International LivCom awards that were held in London. This continues to demonstrate the continued emphasis on innovation and sound business processes that JCP always aspires towards. We are in the process of establishing a cemetery in the South in anticipation of the near full capacity of Avalon cemetery. Approximately 260 hectares of land have been acquired and fenced and the EIA processes are in progress. This initiative will have to be capitalised to the tune of +/-R9m in the financial year 2008/2009 if the City were to be ready to replace the fast filling Avalon Cemetery. Financial Performance The Financial performance of the Company is detailed and outlined in the report of the Chief Financial Officer. Management and the Audit Committee of the Board have worked hard in ensuring that JCP remains accountable for the resources that are allocated to it by the City. In spite of revenue growth and cost containment efforts and strategic cash flow management, we unfortunately have to report a slight deficit in operational expenditure. This was occasioned largely by an increased level of activities that had to be concluded and many of the unfunded mandates that we found ourselves having to perform in an effort to maintain high service delivery standards across the City. The reasons and the extent of the deficit are fully disclosed in the report of the Chief Financial Officer. Corporate Governance The Board is responsible for oversight of the organisation. Management is responsible for running the organisation. In our oversight roles, the Board has done this through the establishment of various committees. These committees include the Committee of Chairs which reviews the strategic inputs of each committee, the Remuneration Committee which reviews the performance of the Executives and considered a number of remuneration matters, the Internal Risk and Audit Committee which provided strategic insight and risk containment measures for the organisation, the Human Resource Committee which reviews on an ongoing basis our human capital requirements and challenges, the Finance and Operations Committee which supports and reviews operational and financial requirements of the organisation and the SHEQ Committee which focuses on Health and Safety issues in the organisation. In this financial year the activities of the board were heightened and a number of policies and mandates were revised. Key amongst these was the SHEQ policy, the Remuneration Policy, Sexual Harassment, Smoking and Acting policies. The board also dedicated its time by reviewing the Companys strategy and formulated a new strategic plan. Scorecards were

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revised for the period 2009-2011, in line with the dictates of the CoJ Integrated Development Plan and the Environmental Sector Plan. To attest to the work of the Board, the Board Assessment results published by Price Waterhouse Coopers under contract with the Share Holder Unit have indicated positive results of the JCP Board. The Internal Audit function performed to expectation and provided assurance to the Board on the effectiveness of internal controls, risk management and governance processes within the Organisation. The safety, health and environmental issues were reviewed and monitored quarterly and reported on as part of risk management. Employment Equity and Black Economic Empowerment. JCP is committed to correcting past imbalances in terms of employment equity. We are however clear that affirmative action is not a recipe for the replacement of skilled labour but an instrument to increase representation of the previously disadvantaged in critical job categories of the organisation. In the current financial year, almost all new appointments were from the previously disadvantaged groups, of which 78% were African Females. In addition management successfully implemented a vigorous Womens Development Program where 12 women were identified and mentored for management advancement in the organisation. The targets set in terms of the equity plan were continuously monitored and managed by the HR committee in a manner that resulted in the set targets being met. The company has continued to ensure that Black owned companies are provided opportunities by exercising the Preferential Procurement Act of 2000. This is illustrated in the amount of work that was allocated to BEE companies including women owned and controlled companies. The target of 85% set for procurement from BEE suppliers was exceeded.

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JCP looking into the future The company is committed to the mandate of the City as well as to the alignment of its business to the Mayoral priorities and the Environmental Sector Plan and will in the next financial year focus on the following areas: The 2010 Soccer World Cup, the Greening of Soweto, the planting of the balance of the 200 000 trees, the rehabilitation of the Kliprivier / Klipspruit Project, the Beautification of the City, Road Island beautification, the development of more water features and the finalisation of a Landscaping Master Plan. It will also place emphasis on regular Park and Cemetery development and review initiatives to enhance Park safety as well as increase its service portfolio and provide added value in Capital projects. Women empowerment, and the Expanded Public Works Programme will continue to be our focus. Acknowledgements My heartfelt congratulations and thanks go to the Management and Employees of JCP whose commitment, loyalty and drive continue to be the cornerstone of these excellent results. Thanks to all our Stakeholders, Customers and Suppliers. The support and encouragement of the Member of the Mayoral Committee (MMC), Councillor Prema Naidoo, the Executive Director for Environment, Ms. Flora Mokgohloa and her staff as well as the City is acknowledged. I am proud to have been part of all the achievements and would like to thank all the Board Members for their contribution yet again.

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Section 5: Managing Directors Report Overview The Global economic turmoil brought on many challenges for our operations, but in spite of these challenges, City Parks produced favourable results. We remained focused on our Key Performance Areas and all objectives that contributed to customer and stakeholder value add were met. The focus for the year under review was to ensure that we provide a service to our communities that is globally competitive, through increased productivity and quality services. There were a number of unique initiatives and innovations that drew a significant amount of interest both globally and nationally and one such example is our Xtreme Park Make Over. Specific attention was placed on ensuring that our customers are part of the number of our Capital projects and programmes that were implemented; this has fundamentally contributed to our sound corporate reputation and increased customer satisfaction rating. The Sound IDP performance scorecard results were influenced by a carefully planned strategy that ensured that we back our operations by effective systems and controls. This is evident under the section: Performance against IDP scorecard. Examples of these areas of performance or initiatives are: the development of another 24 hour Xtreme Park Makeover, planting in excess of 49 000 trees, receiving a number of International Awards for specific projects and the partnering with Township TV to provide educational as well as recreational programmes into the previously disadvantaged areas. Talent management and skills development were some of the critical aspects that contributed to the added investment in our people resources. Human Capital management, training and development, the Expanded Public Works Programme and our Employment Equity Programme was on track with the transformation objectives that were set. The strategic objectives were effectively achieved because of the passion and tenacity of our employees to remain focused on the collectively developed goals and objectives that were set. The Performance Highlights serve to qualify and support the placed emphasis on getting all our people to do extraordinary things. Performance Highlights In this reporting year (2007/8), 49 245 trees were planted compared to 21 653 trees planted in the previous year. The survival level of newly planted trees was maintained at 95%. Street trees enquiries for the year 2007/8 totalled to 8 109, bringing a 10% reduction when compared to the amount of enquiries that was received for the period 2006/7, being 8 920.

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3 New developments in parks were completed including 4 New developments in cemeteries. The customer satisfaction index was 78%. Stakeholder visits increased to 1 668 vs. the previous years 344. External Services revenue increased by 148% to R38 m. BEE Procurement increased from 84% to 87%. 1 049 Employees were trained in the period 2007/8. 100% of Capital projects were completed. 19 684 learners were reached through environmental training programmes. 49 684 Primary Beneficiaries were reached by our Environmental Education awareness programmes.

Emphasis was placed on job creation in that 1 133 jobs were created in 2007/8. In the previous year 963 jobs were created. 93% of appointments effected were from PDI, 59% of that was female, with 84% of that being African Black. Development of the first Xtreme Park Make-Over in Soweto at Immink Road, Diepkloof

Financial Performance This was a challenging year for City Parks due to fuel price increases and the absorption of prior year Capital Projects and projects that were completed during the year that were added to our maintenance portfolio. The increase in sales revenue and the resultant surplus from External Services assisted operations in some degree to maintain and provide services to those areas that were beyond the scope of budgeted activities. The financial results were relatively close to budget and the results are to be read bearing in mind the portfolio growth and the efficiencies that we applied to ensure that the deficit is conservative and is in-keeping with a non profit organisation. Our balance-sheet reflects a very positive cash position and all liabilities are adequately provided for, resulting in a reasonable liquidity position. The performance during the financial year presents a positive outlook for the years to come with an added degree of financial prudency.

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Financial headlines Revenue excluding interest increased in relation to the prior year by R57,1 m and concluded at R425.3 m and the complimentary department to the significant increase in revenue was external services which experienced revenue growth to the tune of R27 m. External Services revenue book concluded at R42 m. Cemeteries revenue (R15.5 m) equally influenced the increase in total revenue in that cemeteries revenue exceeded budget by R1.1 m. Events revenue was slightly under budget in that income realised was R1.2 m against a budget of R1. 5 m Expenditure was budgeted at R429.8 m and closed at an actual of R449.6 m, the increase in expenditure being influenced by the cost of sales relating to the increased order book. The year- end cash position (Share-member sweeping cash debtor balance due to City Parks) R181.2 m. BEE The Broad- based Black Economic Empowerment codes of Good Practice, legislated in 2007, has enabled us to engage with a number of stakeholders who have enabled a number of the Small Medium Enterprises on our database to grow from strength to strength. Black Economic Empowerment increased from 84% in the last financial year to 87% this year. A great emphasis was placed on developing SMMEs and our supplier chain database of black service providers has increased in number, in order to generate a more competitive procurement environment. The EPWP programme works in conjunction with our empowerment programme and SMMEs are enabled to render service by drawing on people who were trained through the EPWP programme. Operations Our flexibility in the face of external and internal challenges contributed to successful service delivery but we have now placed emphasis on improving standards of our facilities so to meet new customer expectations. Operations are mindful of the fact that yesterdays greatness can be tomorrows mediocrity when considering new and divergent customer aspirations and expectations. The emphasis over the past financial year has been on the development of qualitative maintenance standards rather than focusing on the traditional quantitative-based measures. There was a reduction in customer complaints considering the increase in the utilisation of our facilities as a result of the role out of new products in our park like Township TV. 19 684 Learners attended the various environmental programmes and this was complimented by National Arbor Week and the Greening of Soweto.

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Street Trees With the Mayor stretching our tree planting targets from 20 000 to 50 000 per annum in December 2007, Johannesburg City Parks planted a total of 49 245 for the financial year. Collectively 90 738 trees have been planted and we are on course to meet the challenge of 200 000 trees by 2010/11. Cemetery Operations The implementation of the resource planning strategy and qualitative maintenance at cemeteries has resulted in the desired maintenance standards being achieved. Burials and cremation records over a five year period have shown a marginal decrease from the number of 21 575 for 2005/06, The total burials and cremations for 2006/07 amounted to 21 173, and 2007/8 saw a total of 21 030. The impact of migrant labourers in urban areas directly contributes to the fluctuation in the number of burials as most return to their areas of family birth. Strategically the burial rate has directed the development of regional cemeteries within areas of need and provided time lines for future roll-out plans. Total Burials- Quarterly Comparison

Burials for this financial year totalled at 17 739, whereas when compared against the 2006/7 period having 18 847 burials there has been a decrease of 6,3% in the total no of burials.

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Cremations per Facility

The graph above highlights the distribution of cremations within our 3 facilities. A total of 2521 cremations for 2007/08 have been recorded. When compared with a total of 2226 in 2006/07, there has been as increase of 13,2%. Pauper and Indigent Burials

Indigent burials have shown a steady increase since the introduction of the Social Policy but have shown a conservative increase. Pauper burials continue to be unpredictable and have increased by 7% when compared to last year. The total for 2007/08 is 916, whereas in 2006/07 it was 856. This could be attributed to cell phones, ID documents, drivers licenses as well as banking details that people carry on them that enhances the likelihood of identification.

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Gender

The average gender ratio throughout South Africa according to Statistics South Africa is 93 males to 100 females whilst the ratio for the CoJ is recorded as close to being equal. During the year, the ratio reflects a 51% female and 49% male burial rate which is line with the CoJ statistics. Natural versus Unnatural Deaths

The above figures are in line with the 6% national average of unnatural deaths.

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Environment The Company aims to protect, manage and restore the integrity of the Sharemembers ecological systems with special concern for biodiversity and natural processes within open spaces. In order to achieve the abovementioned, the Company aligned its Business Plan in terms of the Environmental Sector Plan. The following are examples of projects which have been dealt with in terms of the Environment Sector Plan: A Bio-Aquatics Management Plan has been developed (Zoo lake, Bruma lake, Westdene Dam, Moroka Dam, Dorothy Nyembe Dam, Blue Dam and Florida Lake were maintained). Manage and control of reeds taking into account ecological and social consideration: Dorothy Nyembe wetland, Mofolo South, Dlamini & Lenasia nodes reed control was undertaken. Wetlands were rehabilitated (Mapetla wetland, Baileyspruit SANBI intervention, Florance Bloom & Bosmontspruit wetland). Five (5) Ecological Management Plans were developed for the following areas: KNR, Kloofendaal, Cosmo City, Melville Koppies, Rietfontein and The Wilds.

Expanded Public Works Programme The main objective of the Expanded Public Works Programme (EPWP) is to create jobs, to train and develop workers/contractors with the result of improved service delivery and economic growth. The plan was to create 350 jobs (60 000 man days) and to facilitate 2000 training days of skills development for 2007/08. For the year 2007/2008, 1 133 new jobs were created and 2 152 jobs have been sustained through Opex/ Capex projects. 433 People (2 824 training days) were trained in General horticulture, occupational health & safety, brush cutting & chainsaw handling, pesticide & herbicide application and fire fighting accredited courses. On site on- the- job training related to an additional 714 training days.

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Security in facilities The Company was more visible in terms of the Park Rangers at the various facilities under our control than in the previous year. The total number of facility visits by JCP Park Rangers for the current financial year amounted to 21 252 compared to the 12 710 facility visits of the previous financial year. This contributed significantly to a reduction in incidents at our facilities. The increase in patrols resulted in various positive results such as increased visibility of teams and utilisation of facilities, and a decrease in incidents in cemeteries. During the year, the Park Rangers also participated in 20 special operations in conjunction with the SAPS and JMPD. During the year 339 arrests were made, 76 spot fines were issued and 3 346 vagrants were removed with the assistance of JMPD and SAPS. Risk Management The Board approved the Risk Management framework and also assessed the Companies risk management appetite. Management were tasked with ensuring that the reporting of risks, monitoring, measurement and management cuts across all spheres of operations. At the beginning of the 2007/08 financial year, Risk Assessment workshops were facilitated throughout the Organisation in line with the City of Johannesburgs Risk Framework. This resulted in the compilation and development of Corporate and Operational Risk Registers. Risk interventions and timelines and Risk owners were agreed upon in the respective areas. The implementation of risks identified in both the Corporate and Operational risk registers, were closely monitored during the year. The implementation of the risk interventions resulted in substantial movement on the residual risk exposure of some risks. We are comfortable that the risks identified were managed to the desired level. The emerging risks were also identified and closely monitored for both the Corporate and Operational Risk Registers during the current financial year. The Companys top five risks are being closely monitored in order to bring the residual risks to the desired level.

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Internal Audit The key role of the Internal Audit is to assist the Board and/or its Audit and Risk Committee in discharging its oversight role through the review of systems and processes i.e. to evaluate the adequacy and effectiveness of the internal controls within the Company. Internal Audit and Risk Management Quarterly Reports were presented to the Audit and Risk Committee on a quarterly basis. This enabled the Audit and Risk Committee to form an opinion on the adequacy and effectiveness of the system of internal controls within the Organisation. There were no significantly material internal control issues which came to the attention of Internal Audit during the 2007/2008 financial year. Internal Control weaknesses or areas that require improvement were discussed with management and appropriate recommendations were suggested to mitigate any possible exposures or risks. Human Resources Human resources are a critical ingredient of our operational objectives and a significant emphasis was placed on ensuring that we fully achieve on the skills plan objectives, provide unique training programmes with emphasis being placed on succession planning and retention. Our employment equity targets are on track, training that was planned was achieved and contributed to increased operational performance. The performance management system which applies incorporates all facets of the strategic objectives and these were packaged into the scorecards of all relevant employees. There are various recognition programmes outside of the remuneration option which serve to encourage and motivate employees. Women development was a priority. A number of women were part of a mentorship programme which enabled them to develop under the mentorship of Executive and Senior Management. All training, planned and delivered, for the reporting period was derived from the Workplace Skills plan submitted to the AgriSETA at the beginning of the year. Corporate Wellness phased in an Incapacity Management process to help Managers manage sick leave, abuse thereof and absenteeism. New programmes were identified for Corporate Wellness and the phasing in of the Quality of Work Life strategy will be implemented to ensure organisational effectiveness for the new financial year. The absenteeism management programme was successfully implemented throughout the Organisation. The managers and supervisors were trained across all disciplines in the

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Company. The training assisted managers to understand, interpret and implement the Absenteeism management reporting tool on a monthly basis. Prospects Our emphasis on trying to understand our stakeholders and customers better has enabled us to pay more attention to their dreams and their realities, this is now clearly evident in how we design all our new Parks and Cemeteries. Operating conditions will going forward create more risks but we see an even greater opportunity to work together with our customers and attempt more importantly to deliver on the 200 000 trees Mayoral Priority. In the years ahead we will passionately attempt to pioneer the landscaping master-plan so to demonstrate to the world that the City of Johannesburg has fully embraced it and will be catalytic in its approach to environmental and greening matters. Emphasis will be placed on ensuring that our ecotourism products are re-designed, re-packaged and promoted to an extent that they could significantly influence revenue. 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 our products 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 Sharemember for their continuous support to the environmental projects and programmes.

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Section 6: Statement of Responsibility The directors are responsible for the preparation, integrity and fair presentation of the financial statements of JCP. The financial statements presented in Section 5 of this report has been prepared in accordance with SA GAAP and includes amounts based on judgement and estimates made by management. The directors are responsible for the preparation of the other information in the annual report and are responsible for both its accuracy and its consistency with the financial statements. The going concern basis has been adopted in preparing the financial statements and based on the forecast and available cash resources the directors have no reason to believe that the entity will not be a going concern in the foreseeable future. The Auditor-General, who was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors and committees of the Board, has audited the financial statements. The directors believe that all The financial representations made to the Auditor-General during their audit are valid and appropriate. The Auditor-Generals unqualified audit report is presented on page 76 to 79. statements were approved by the Audit and Risk Committee on 27 August 2008 and signed by the Managing Director Mr L.L. Williamson and the Chairperson of the Audit and Risk Committee Mr T.B. Nzimakwe.

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CHAPTER TWO: PERFOMANCE HIGHLIGHTS Section 1: Highlights and Achievements LivCom awards 8 Awards were won in the International greening LivCom (Living Communities) competition, of which 4 were gold. Trees planted The focus this year was on tree planting in order to achieve the Mayors target of 200 000 trees to be planted by 2010. This year 49 245 trees were planted vs the initial annual plan of 20 000 per annum. In December 2007 the Mayor raised the target for annual trees to be planted from 20 000 to 50 000. The number of trees planted during Arbor Week in the next financial year, will contribute towards the attainment of the annual target. Collectively 90 738 trees have been planted vs the 2010 target of 200 000. The survival rate of newly planted trees is 95%. My Dream Park competition Three My Dream Park facilities were handed over to schools. External Services An order book of R38 m was achieved vs an annual plan of R18 m. Customer Complaints 89% Of customer complaints were resolved vs a target of 72%. EPWP and job creation 1 133 EPWP jobs were created for the year vs an annual plan of 350 jobs. Xtreme Park in previously disadvantaged areas. Development of the first Xtreme Park Makeover in Soweto at Immink Road, Diepkloof. Water fountains There are now 68 functional water features in the City of Johannesburg, which exceeds the annual target of 40.

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Beautification projects The target of 30 Beautification Projects was exceeded by 9.

Plant availability Plant availability was 100% vs a plan of 95%.

Fleet availability Fleet availability was 99% vs a plan of 95%.

Beneficiaries reached through environmental education For the period under review, 19 684 beneficiaries attended various environmental programmes, which exceeded the IDP target of 10 000 by 96%. An additional 30 214 households were reached during the tree survey as part of the greening of Soweto project.

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Environmental Highlights Water Week Celebrations City Parks, Paulshof Residents and Ratepayers Association and Toyota jointly conducted clean up campaign sections of the Sandspruit and Braamfontein Spruit as part of the Water Week celebrations Environment and Conservation Development and the Marketing Department received an invitation to exhibit and conduct interactive learners' activities during the Joburg Water Festival held at Elka Stadium Soweto. Tree planting Tree planting took place in Meadowlands as part of the Mayoral Legacy Project for 2010. Environmental theme days Environmental theme days such as Water Week, Bird Week and National Environmental Week were celebrated. Tree planting survey, and tree education The Braamfischerville and Dobsonville Tree Planting Survey Report was completed, as well as the Tree Education & Awareness Programme and draft After Care Programme. Greening of the workforce programme The Greening the Workforce Programme was implemented with the theme Alien Invasive in our Facilities.

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Section 2: Financial Performance The South African economic environment entered a year of instability with inflation breaching the Reserve Banks range of 3-6% for much of the year and interest rates rising steadily throughout the year. This was compounded by dramatic increases in fuel prices. The Company was resilient and able to deliver an improved level of service to the community. 2.1.1 REVENUE

The Company posted revenue excluding interest of R426 m (2007: R368 m) for the year, an increase of 15,8% over the previous year. The grant from the sharemember, the City of Johannesburg Metropolitan Municipality, made up 85% (2007:91%) of total revenue received, with an increase of 8,5% over the previous year. Revenue from cemeteries remain stable at R15.5 m. External Services revenue resulting from grass cutting and tree pruning activities with related parties grew by 179% to R42.3 m. 2.1.2 RESULTS OF OPERATIONS

Operational costs increased for the year by 16,8% to R415 m for the period (2007: R356 m). The key contributing factor to this was the positive impact of the increased revenue streams from External Services supporting the Mayoral 2010 Greening project of 200 000 trees. The Company posted a deficit of R4.1 m for the period under review, against a surplus of R9.6 m (restated) for the previous year. The contributing factors to the current deficit are as reflected in the table on the following page.

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Contributing factors to the current deficit: R000 Income: External cemeteries Other Income Increased income 827 Services and Increased sales activities 15,692 14,865

Cost of Sales

Increased sales activities

( 10,027)

Expenditure: Payroll Fleet Consulting Fees General Expenses Depreciation and Amortisation Repairs and maintenance Investment Income Prior year adjustments Increased interest rates and fuel prices Increased activities Tree Planting FV Increased activity Interest FV and Interest Paid

( 7,389) ( 1,810) ( 2,606) (275) ( 3,043) 345 ( 2,321) ( 81) ( 4,126)

2.1.3

CASH FLOW

The Company ended the year in a favourable cash position and through effective cash flow management and the previous year surplus, ended the year with cash on hand of R181 m (2007 = R189 m). The decrease over the previous year was due to an investment of R11.3 m in a new Head Office in Braamfontein.

29

2.1.4

STATEMENT OF FINANCIAL POSITION

Property, Plant and Equipment increased by a net R21.8 m to R59.2 m at cost. The increase is due to the replacement of aging and obsolete operational equipment, and the refurbishment of the Head Office. The ability of the Company to meet its financial obligations remains stable with the current ratio test remaining steady at 1, 51: 1 (2007 = 1, 67: 1).The decrease is largely due to the investment in property, plant and equipment. During the year, actuarial valuation of all employee benefits was undertaken. A company specific valuation was done on some of the employee benefits, and the liability taken to the Statement of Financial Position. The City of Johannesburg Metropolitan Municipality in the Sale of Business Agreement agreed to accept all liabilities relating to these employee benefits prior to January 2001. The value of this asset has been accounted for in the Statement of Financial Position. The valuation of the defined benefit pension funds was undertaken at member level and the City of Johannesburg Metropolitan Municipality has accepted liability for all funding deficits up to and including 30 June 2007. The Company will be liable for any further deficits that may arise post 30 June 2008 when a company specific valuation is undertaken.

30

Section 3: Capital Projects The Capex budget for 2007/8 is made up of R12.5 m CoJ Capex, R10 m MIG, R6 m Bulk Contribution, R12.5 m Bulk Contribution for Beautification and R11.6 m for 2010. resulted in a R52.5 m Capex allocation for this financial year. All the projects for 2007/08 have reached practical completion. Reflected expenditure is inclusive of Retention and maintenance fees. Job opportunities of about 667 (Capex only) have been created through the EPWP Programme that forms part of the projects execution. Summary of the key areas of expenditure and funding source Details Original Budget R000 Capex MIG 2010-KK Bulk Contributions Beautification (Bulk Contribution) TOTAL 10 200 10 000 0 6 000 4 084 30 284 Revised Budget R000 12 500 10 000 11 600 6 000 12 584 52 684 Actual Expenditure R000 12 288 10 000 11 930 6 562 12 056 52 836 This

The table above reflects total Capex expenditure.

31

PROJECT/ INFRASTRUCTURE REPORT Analysis of the Master Capital Programmes PROGRAMME PROJECT

PROJECT PERIODStart Date Cemeteries and Crematoria Avalon Avalon 2 Diepsloot Lenasia New Park Developments Diepkloof Memorial Diepkloof Extension Chiawelo TOTAL July-07 July-07 July-07 1 1 1 2 000 1 500 700 12 500 D D D July-07 July-07 July-07 July-07 1 1 1 1 2 000 2 300 2 000 2 000 D D A G Duration Yrs Capex R'000 Community Region No

COMPLETION DATE

June 2008 June 2008 June 2008 June 2008

June 2008 June 2008 June 2008

The above table indicates the Capex Masterplan as agreed with the COJ in the business plan.UAC programmes shows alignment with the overall Citys Capital Investment Programmes and it has been ensured that City Parks programmes are aligned. This excludes 2010 projects.

32

NUMBER OF PROJECTS APPROVED PER AREA OF DEVELOPMENT Project Category Approved Cancelled / Deferred Balance

New Park Development Park Upgrades Cemetery Upgrades KK Programme Bulk Contributions TOTAL

4 4 3 5 7 23

0 0 0 0 0 0

4 4 3 5 7 23

The table above emphasises the number of projects to be executed in this financial year as per the Business Plan.

JCP CAPEX 2007/8 SUMMARY Project Name Project Description Original Budget R000 Revised Budget R000 Actual Exp. R000 Project Status Zone Jobs Created

Cemeteries and Crematoria Avalon Avalon 2 Diepsloot Lenasia Cemetery Upgrade Cemetery Upgrade Cemetery Upgrade Cemetery Upgrade Park Upgrade Park Upgrade Park Upgrade Park Upgrade Park Upgrade 2000 2300 2000 2000 2000 2300 2000 2000 1 997 2 197 1 933 1 957 Complete Complete Complete Complete 3 3 4 3 20 0 16 15

Park Upgrades Diepkloof Memorial Park Diepkloof Park 1284 Chiawelo Park Mapetla Park Pioneer Park 2000 750 700 5000 2550 2000 *1500 700 5000 2550 1 999 1 506 699 5000 2550 Maintenance Phase Construction Phase Maintenance Phase Maintenance Phase Complete 3 3 3 3 4 29 29 39 217 86

33

Project Name

Project Description

Original Budget R000

Revised Budget R000

Actual Exp. R000

Project Status

Zone

Jobs Created

New Park Developments Cosmo City Parks New Park Development 2450 2450 2450 Maintenance Phase 2 19

2010- KK Programme Open Space Dev. Spatial Layout and Studies Dorothy Nyembe Nursery TOTAL Mofolo & Mapetla Parks Rehabilitation EIA & Designs Construction of a Nursery in Soweto 0 0 0 7300 3500 800 7 320 3 613 997 Practical completion Complete Practical completion 34 218 3 Various 3 191 0 6

21 750

34 100

667

The table above summarises the Capex for 2007/8.

34

BULK CONTRIBUTIONS PROJECTSPROJECT NAME WARD BUDGET R000 500 1000 2270 SCOPE STATUS COMMITTED FUNDS R000 499 979 2 270 AMOUNT PAID R000 473 979 2 269

Weltevreden Park Midrand Cemetery Rietfontein NR

89 94 94

Landscaping Entrance gate & admin block Refurbishment of office building & building of multi purpose hall Park development Park development Construction of the Entrance Building structure for ashes

Complete Practical completion Complete

Witkoppen Park Innisfree Park Botanical Gardens Panorama Cemetery TOTAL

94 103 88 97

1000 1000 1191 155 7 116

Practical completion Practical completion Complete Practical completion

1000 572 1 259 154 6 733

1000 572 1 115 154 6 562

This table shows the projects funded by Bulk Contributions that have been implemented in the current fiscal year 2007/ 08.

35

Beautification and road island development projectsNO Project Name Region Zone Completion Date 2007-8 1st Quarter 1st Quarter 1st Quarter Size of Project 300m 300 trees 2500m2 Work Description Project Cost (Rands) 136 000 Funding Source JCP Street Trees 250 000 Total SA

1 2 3

Golf Driving Range at Alexandra Planting of trees at Alex Driving Range Makhoarane Primary School

E E D

1 1 3

Development of tee box, putting green & target greens Planting of 300 trees 1st Prize My Dream Park Competition- water feature, paving, grass, trees, playground equipment & landscaping 2nd Prize My Dream Park Competitionpaving, grass, trees, playground equipment & landscaping 3rd Prize My Dream Park Competitionplayground equipment & lanscaping Planting of lawn, roses & general infrastructure & horticultural development Planting of 500 trees- Greening of Soweto Landscaping, trees, ornamental pots, lawn, pebbles, jumbo rocks & irrigation

4

Skeen Primary School

E

4

1st Quarter

1000m2

150 000

Total SA

5 6 7 8

Ikaneng Primary School Rose Ave Park, Lenasia Planting of trees in Noordgesig Christiaan de Wet development of road island at Clearwater Mall

D G C C

3 3 2 2

1st Quarter 1st Quarter 1st Quarter 2nd Quarter

1000m2 10000m2 500 trees 850m

100 000 161 000

Total SA JCP JCP

832 998

BULK

9 10 11

Development of Olievenhout street, Randpark Ridge Development of intersectionChristiaan de Wet/ Ontdekkers Development of Linksfield Town Entrance Development of Katherine Street, Sandton Planting of trees, Marie Street Parkmore Kliprivier Road Pruning of Trees between Booysens & Rifle Range Road Development of Glenvista Town Entrance Development of Road Islands on Bellairs Drive, Glenvista Extreme Park MakeoverDiepkloof Cedar Road - Fourways

C C E

2 2 1

2nd Quarter 2nd Quarter 2nd Quarter

1100m 120m2 7500m2

Water Feature, lawn, roses, ground covers, palm trees, bollards, irrigation Planting of aloes & installing jumbo rocks Development of water feature, landscaping, planting of lawn, palm trees & plants. Planting of roses, repairs to irrigation system, cover with bark chips Planting of 60 trees on road islands Pruning of trees

709 103 71 994 520 363

BULK BULK JCP

12 13 14

B E F

4 4 1

2nd Quarter 2nd Quarter 3rd Quarter

570m 60 trees 3km

170 000

BULK JCP JCP

15 16 17

F F D

3 3 3

3rd Quarter 3rd Quarter 4th Quarter

1500m2 2.5km 19000m2

Horticultural development, water feature Planting of trees on road islands and basic horticultural development Full Park Development- hard and soft landscaping, water feature, TV screen, etc. Beautification of road islands-planting of trees and flower beds, paving and hardscape work Beautification of road islands-planting of trees and flower beds, paving and hardscape work Beautification of road islands- planting of trees and flower beds, paving and hardscape work Beautification of road islands-planting of trees and flower beds, paving and hardscape work Extension of road island development, planting of roses Beautification of road islands-planting of trees and flower beds, paving and hardscape work Beautification of road islands- development of flowerbeds Beautification of road islands-development of flowerbeds Beautification of road islands-planting of trees and flower beds, paving and hardscape work Another venue to be identified by Zone Manager, Coubrough Road is not suitable for development Development new Road Islands and planting additional plants in existing Islands Refurbishment of the Middle Road Islands, planting of additional plants Development of Garden Outside the Court, including the installation of a Waterfeature Development of a Park with a Waterfeature Development of a Park with a Waterfeature Development of a Park with a Waterfeature Development of a Park with a Waterfeature Development of a Park with a Waterfeature Developoment of circle plus a Waterfeature Developoment of Town Entrance with a Waterfeature Development of Road Island plus a Waterfeature Development of Road Island plus a Waterfeature

198 098

BULK BULK

4 600 000

Capex/ Sponsor Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Bulk Contribution Region A

18

C

2

4th Quarter

250 m

299 484

19

Cedar Road - Witkoppen

C

2

4th Quarter

350 m

388 878

20

New Road - Midrand

A

4

4th Quarter

1044 m

725 704

21

Rivonia Road

B

4

4th Quarter

450 m

500 000

22 23

Katherine Street William Nicol Road

B C

4 4

4th Quarter 4th Quarter

300 m 500 m

151 000 892 466

24 25 26

Sandton CBD Area, Rivonia Road Main Road South Road, Wendywood

B B A

4 4 4

4th Quarter 4th Quarter 4th Quarter

330 m 300 m 1200 m2

317 935 236 386 163 536

27

Six Street, Midrand

A

4

4th Quarter

200 m

434 960

28

Church Str, Midrand

A

4

4th Quarter

420 m

172 927

29 30

Old Pta Road, Midrand Midrand Court

A A

4 4

4th Quarter 4th Quarter

3 km 500 m2

156 604 169 814

Region A Region A

31 32 33 34 35 36 37 38 39

Bungalore Park, Lenasia Devland Park, Soweto Naledi Park, Soweto Meadowlands Park, Soweto Bram Fischer Park, Soweto Traffic Circle, Main Reef Road Krugersdorp / JHB Town Entrance Road Island, Main Reef / Corlett Road Road Island, Main Reef / Highgate

G D D D C C C C C

3 3 3 3 3 2 2 2 2

4th Quarter 4th Quarter 4th Quarter 4th Quarter 4th Quarter 4th Quarter 4th Quarter 4th Quarter 4th Quarter

7000 m2 7500 m2 2000 m2 9000 m2 1 ha 300 m2 200 m2 100 m2 200 m2

200 000 600 000 500 000 700 000 277 707 40 000 20 000 45 000 25 000

Hort. Dev Region D Region D Region D Region C Bulk Bulk Bulk Bulk

36

The table on the previous page indicates a total of R15 m was spent in this financial year on beautification projects with funding from various sources, including Bulk Contributions, Sponsors, Regions and JCP Capex. Included in the list of projects completed were 24 road island beautification projects and 11 park developments, including the very successful 24-hour Extreme Park Makeover in Diepkloof. Water Features reinstatement and development 2007-8 A total of 40 water features were reinstated / developed during 2007-8 resulting in a total of 68 operational water features in the City of Johannesburg for which the Company is responsible. City Parks is therefore well on track towards achieving the target of 100 water features by 2010, as displayed in the figure below.

JCP Water Features Development & ReinstatementProgress against plan 80 70 60 50 40 30 20 10 0Target Actual Cumulative

68 47 28 10 13 33 54

68

2004-5 2005-6 2006-7 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 0 10 10 0 3 13 15 15 28 5 5 33 8 14 47 13 7 54 14 14 68 5 5 5 5 5 5 5

YTD 07-08 5 40 68

37

Section 4: 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 JCPs performance against its KPIs for the 2007/08 financial year as set out in the Citys IDP scorecard. JCPs impact and its financial and resource management. Targets exceeded Key Performance Area: Service Delivery JCP exceeded the following service delivery targets: 1) The target of 10 000 for the number of mature, indigenous trees to be planted, was exceeded by 39 245 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 40 days on average; a variance of +33%. Side walk maintenance cycles were improved from a target of every 120 days to an average of 100 days; a variance of +16.6%. 3) The target of 3 developments in cemeteries were exceeded, as 4 developments were done. Key Performance Area: Occupational Health, Safety and Security 1) The target of 10 for the number of security interventions by the Park Rangers was exceeded by 21 interventions. The report analyses the performance of JCP in terms of the IDP scorecard, measuring performance in terms of both

38

Key Performance Area: Economic Development and Job Creation 1) In terms of BEE procurement, the Company exceeded both its total expenditure as well as Operating targets: the total BEE expenditure target of 70% was exceeded with an actual of 87% having been achieved and the Capex target of 70% was exceeded with an actual of 84%. 2) JCPs EPWP programme performed well and the annual target of 350 for job creation was exceeded with 1 133 jobs being created. 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 78%. 2) The target of 10 000 beneficiaries reached through environmental education programmes was exceeded with 9 684 beneficiaries being reached. Key Performance Area: Safe, Clean and Green City 1) A target of 2 was set in terms of the number of Conservation Areas initiated for re-proclamation as Nature Reserves. This was well exceeded as a number of 16 applications were initiated. 2) The target of 5 for areas in Regions to be initiated in which parks and open spaces can be appropriately rezoned to reserve the land, was exceeded as 18 areas were initiated. 3) Compliance to OHASA checklist. The percentage compliance with the OHASA checklist: the target of 85% compliance was exceeded with 90% having been achieved.

39

Targets achieved JCP achieved the following IDP targets: Key Performance Area: Service delivery Maintenance cycles of 7 days for flagship parks were achieved Maintenance cycles of 21 days for developed parks were achieved Maintenance cycles of 60 days for undeveloped parks were achieved Maintenance cycles of 14 days for selected main arterials were achieved Target for 3 developments in parks were achieved

Key Performance Area: Occupational Health, Safety and Security Percentage Compliance with Environmental Management System: the target of 90% compliance was achieved. Key Performance Area: Effective Financial Management Fully SA GAAP compliant asset register: the target of 100% compliance was achieved. 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. Percentage attainment of clean Audit Report attained by JCP: the target of 100% was achieved. Key Performance Area: Customer Responsiveness Number of monitoring reports on maintenance of parks: the target of 1 per quarter was achieved.

40

Key Performance Area: HIV and AIDS 100% of the workforce had been exposed to HIV and AIDS awareness programmes.

Key Performance Area: Staff Development Percentage Skills training as a percentage of payroll budget: the 1 % target was achieved.

Targets partially achieved Key Performance Area: Effective Financial Management Percentage of MEs Capital budget spent: JCP spent 100,1% of its Capital budget against a target of 100%. Variance against MEs operating budget 2,3% versus a target of 0% variance. This was due to extra revenue received that resulted in high input costs and increased service delivery.

41

Section 5: Assessment of Arrears on municipal taxes and service charges 5.1 Amounts owed by JCP for service charges Amount Owed R000 2,177 686 4,364 Status Amount provided for in JCPs books Amount provided for in JCPs books Amount provided for in JCPs books Amount provided for in JCPs books Amount provided for in JCPs books Amount provided for in JCPs books Amount provided for in JCPs books Current Current Current plus accounts under dispute relating to transactions from prior years Current Current Current Current Comments

Name of entity City of Johannesburg City Power Joburg Water

Piki Tup Propcom Joburg Zoo Civic Theatre

137 5 16 2

All accounts are current as at 30 June 2008 payable in July 2008, except for Joburg Water, where certain billings are investigated.

42

5.2: Assessment of Directors and senior managers municipal accountsName of Director/ Senior Manager G Zabala L L Williamson HC Kasan K Venier Designation Chairperson of the Board Managing Director Non-Executive Director Non-Executive Director Name of Municipality Johannesburg Johannesburg Johannesburg Johannesburg Municipal Account Name & Account Number G Zabala 900706021 LL Williamson 900104563 Kasan HC 500065574 No personal municipal account Account Status In order In order In order In order The Property Managers Body Imbali Lodge Body Corporate BS Ritchken Ref. nr. 52701 Glenvista Village Complex Comments

V Ramsing M Bahula A C Carolissen

Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Operations Executive Marketing & Communications GM: Assurance Services

Midvaal Johannesburg Tshwane

VB & GH Ramsing 40000786 M Bahula G063 Carolissen AC & AL 2068458900 2028316835 Mabaso TM & NN 400764321 Nyalunga SMB 2079410101 Nzimakwe 206922545 Cooke G &VW 206747903 Fouche BN 502444401 No personal municipal account

In order In order In order

N Mabaso S M B Nyalunga T B Nzimakwe G Cooke H H Fouche L Radzuma

Johannesburg Tshwane Johannesburg Johannesburg Johannesburg Johannesburg

In order In order In order In order In order In order Sectional Title Pipers Brook Body Corporate NL Radzuma 4210/0019

K J van Eck M Sayed Hassan P Meyer

A BuzoGqoboka

Chief Financial Officer Company Secretary Operations Executive: Environment and Infrastructure Human Resources Executive

Johannesburg Johannesburg Johannesburg

K J van Eck 202029210 M Sayed Hassan 504120480 Meyer PS & MD 302336913 No personal municipal account

In order In order In order

City of Ekhuruleni

In order

Sectional Title

43

Section 6: Statement on amounts owed by Government Departments and public entities

Name of entity NIL

Amount Owed R000 NIL

Status NIL

Comments NIL

44

Section 7: Recommendations and Plans for the next financial year. Recommendations and plans for 2008/9 Tree planting plan for 2010 The planting of 200 000 trees by 2010 remains a challenge in terms of financial resources and the availability of trees in the market. Johannesburg City Parks is trying to collaborate with the private sector in an effort to obtain financial resources for trees. Delivery Agenda 2008 The planting of 62 000 trees in 2008/9 as well as the beautification projects for 2010 will take high priority. Environmental Sector Plan As for the Environmental Sector Plan, the management of wetlands, dams and other water bodies inter alia will comprise of the following projects: Removal of aquatic invasive plants from water bodies (mainly hyacinth) Maintenance and control of reeds Maintenance of bird sanctuaries, river trails and corridors.

With regard to the biodiversity protection programme, projects will inter alia include the following: Development and implementation of ecological master plans for selected nature areas Zoning of selected priority open spaces Implementation of open space biodiversity education programmes.

Challenges for 2008/9 A challenge for 2008/9 is the provision of burial space in the South and financial resources for the Klipriver/ Klipspruit Corridor Legacy projects. Also, new Capex developments without Opex for the maintenance thereof remain a challenge.

45

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 openness, 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 Report ll.

Section 2: Board of Directors The Board is chaired by a non-executive director, Mr G Zabala, and consists of nine nonexecutives and one executive director, the Managing Director, Mr L L Williamson. There were no changes in the directorship of Johannesburg City Parks during the period under review. The Board remains responsible to the CoJ, the sole member, in the exercise of its duties. Johannesburg JCP is accountable to its stakeholders, the Johannesburg Citizens and its parent municipality. A Service Delivery Agreement (SDA) concluded in accordance with the provisions of the Municipal Systems Act governs JCPs 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 Chairperson and Managing Director are separate, with responsibilities divided between them. The Chairperson has no executive functions. Board meetings are held at least quarterly, with additional meetings called where circumstances necessitate. 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.

46

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 and has there Independent Non-Executive Directors 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 Committee of Chairs, chaired by the Chairperson of the Board 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 which took place at committee level. This provides an opportunity for members of the Board to be better advised of company matters prior to Board. The following committees had existed at the beginning of the year, each of which is chaired by a non-executive director: Audit and Risk Committee Remuneration Committee Committee of Chairs Marketing Committee Human Resources Committee Finance and Operations Committee SHEQ Committee

At the end of the Year, the Finance and Operations Committee and the SHEQ Committees had been restructured to Finance and SHERQ Committee and Operations Committee.

47

Attendance at meetings held during the year was as follows:Attendance at meetings held during the year was as follows: No. of meetings held G Zabala# (MA) L Williamson (MC) Managing Director A Carolissen (MC) N Mabaso (FA) SMB Nyalunga (FA) TB Nzimakwe (MA) VB Ramsingh (MI) K Venier (FW) H Kasan (MI) M Bahula (MA) F Female M Male # Chairperson AGM Board Audit and Risk 6 Remune -ration Committee of Chairs Finance and Operations 4 Human Resource s 6 Marketing SHEQ

1 1 1 1

6 6 5 6 5

4 4

4 4 4 3 4 3 2 4 1

4

4

6 1

4 4 4 1

1

5

1

1 4

1 3 1

5

4

1 1 1 1 1 1

5 6 5 5 5 6 4 6

4 3 1 1

6 6 4

3 4 3 4 3

A African C Coloured

W White I Indian

For details, refer to the previous pages.

48

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

49

Section 3: Board Committees The following committees have been formed, each of which is chaired by a non-executive director. Audit and Risk Committee The Audit Committee was chaired by Mr T Nzimakwe who is an independent nonexecutive director of the Company. The Committee has been established, in line with the King reports recommendations on Corporate Governance, with the goal of deliberating and taking decisions on matters relating to the Companys Finances, Strategy and policies. Remuneration Committee The Remuneration Committee was chaired by Mr G Zabala, the Chairperson of the Board of Directors and comprises of the Chairpersons of the Committees of the Board, who are all independent non-executive directors of the Company. The Committee has been established, in line with the King reports recommendations on Corporate Governance, with the goal of considering and recommending to the Board of Directors on matters pertaining to the remuneration packages of executives and employees. Committee of Chairs The Committee of Chairs was chaired by Mr G Zabala, the Chairperson of the Board of Directors. The Committee has been established with the goal of maintaining and guiding the strategic direction of the company of reviewing the reports and matters considered by the committees of the Board. To this end, the committee is attended by the Chairpersons of the various committees.

50

Finance and SHERQ Committee The SHEQ Committee was chaired by Mr A Carolissen who is an independent nonexecutive director of the Company. The Committee has been established with the goal of considering matters relating to the Financial affairs of the company as well as the Occupational Health and Safety and Environmental impact of JCPs operational activities.

Human Resources Committee The Human Resources Committee was chaired by Mr V Ramsingh 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.

Marketing Committee The Marketing Committee was chaired by Ms N Mabaso who is an independent nonexecutive director of the Company. The Committee has been established to develop and manage the companys reputation and exposure through policy development and marketing initiatives.

Operations Committee The Operations Committee was chaired by Ms S.M.B Nyalunga who is an independent non-executive director of the Company. 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.

51

Section 4: Directors Remuneration Executive DirectorR000 R000 R000 2008 R000 2007 R000

LL Williamson

Position Managing Director

Salary 1 247

Travel 32

Bonus 255

Total 1 534

Total 981

Non- Executive Directors Name G Zabala A Carolissen M Bahula N Mabaso SMB Nyalunga TB Nzimakwe V Ramsingh K Venier H Kasan Total Directors Fees R000 231 109 85 106 81 158 129 91 89 1 079

52

Senior Management

Position Position G Cooke Operations Executive

R000 Salary 875

R000 Travel 80

R000 Bonus 191

2008 R000 Total 1 146

2007 R000 Total 1 112

HH Fouche

Marketing and Communications Executive Company Secretary (resigned 31 May 2007) Human Resources Executive (resigned 30 April 2007) General Manager: Assurance Services (appointed June 2006) Chief Financial Officer Acting Human Resources Executive (July to November 2007) Human Resources Executive (Appointed 1 December 2007) Acting Company Secretary (appointed 1 September 2007) Operations Executive:Infrastructure (appointed 1 June 2008)

795 -

91 -

177 -

1 063 -

999 999

HG Nel DT Nkosi

861

L Radzuma

591 835

55 120

64 191

710 1 146

561 1 076

KJ van Eck B Andrews

228 454

20 42

51 99

299 595

118 -

A Buzo-Gqoboka M Sayed-Hassan

378

54

90

552

55

P Meyer

65 4 221

7 469

172 1 035

244 5 725

298 6 079

53

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 were advised 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.

54

Section 6: Risk Management and Internal controls Risk Management within Johannesburg City Parks is a process, effected by the Board of directors, management and other personnel, applied in a strategy setting and across the company, designed to identify potential events that may affect the company, and manage risk to be within its risk appetite and to provide reasonable assurance regarding the achievement of the companys objectives. Risk Management Unit The key risks facing Johannesburg City Parks have been classified according to the following nine broad risk categories: strategic, financial, human capital, mayoral priorities, environment, regulatory, reputation, technology and labour. The following risk management activities were undertaken during the year under review: RISK ASSESSMENT Corporate and Operational risk assessments have been completed for all areas within Johannesburg City Parks. Risk registers have been prepared for all departments and are updated on a quarterly basis in terms of any changes and progress made on actions taken to improve management of identified risks. basis. DISASTER MANAGEMENT AND BUSINESS CONTINUITY Disaster Management Plan The current year has noted a significant improvement on the implementation of the disaster management within the organization. The disaster management plan was reviewed and approved by the Board during the second quarter. The status of the risk registers are communicated to The Audit and Risk Committee and Operations Committee on a quarterly

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Business Continuity Plans A highlight for the financial year under review has been the development of business continuity plans for the business functions identified as critical to the continuity of Johannesburg City Parks Operations. The process entailed identifying mission critical activities, conducting risk assessments and selecting the suitable strategies. Possible business disruptions in each department were identified and appropriate continuity plans were also developed. The finalized continuity plans have been submitted to the Executive Committee for consideration and will further be tabled before the Audit and Risk Committee for recommendation to the Board for approval. This process is expected to be finalized in the first quarter of the new financial year. Training The disaster management team members were formally appointed and trained. Training still needs to be conducted at a lower level. Disaster Management and Emergency management Forums Disaster and Emergency Management Forums were formally established. This is line with the Disaster Management Framework. These forums will be used as a platform to deliberate on all Disaster and Emergency Management issues of the Company and to make appropriate recommendations, where necessary. The Disaster Management forum is mainly represented by General Managers and Managers from Operations and other departments, while the Emergency Management Forum comprise of Specialists, Zone managers and SHERQ co-ordinators. The focus in 2008/09 financial year will be on training the Emergency Management Committees in the depots and to roll out the Operational Emergency Management Manual. Disaster Risk Assessments Disaster risk assessments for twenty five (25) sites were conducted and the Emergency Management Manual was developed for the Operations department.

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Risk Control Standards The City Of Johannesburgs Risk Control department introduced Risk Control Standards for all municipal entities. The standards are considered vital in the prevention or minimisation of the daily threats faced by our Operations environment. The standards mainly focus on the following areas: Risk Management, Security, Motor fleet, Legal liability in terms of OHSACT, Fire defence and Emergency planning. A minimum level of 85% compliance is required in each Municipal Entity. The CoJ Risk Control department also conducted site assessments in the selected facilities, with the aim of identifying levels of compliance to the Risk Control Standards in our organization. According to the reports obtained, the safety and risk standards for the three depots (namely, depot 406 & Springfield Facilities Management, Cemeteries & Crematoria) assessed were found to be fairly managed. The CoJ Risk Control department also conducted presentations on the Risk Control standards to the Specialists and SHERQ coordinators. RISK FINANCING There has been a reasonable reduction in losses for the current year based on a quarter per quarter analysis except for the second quarter. The huge variance in the second quarter relates to major event claims resulting from hail storms as well as the theft of cables within various facilities. Majority of the claims were assets claims as a result of damaged and stolen fence, theft of computer equipment, etc. Management is continuously developing and enhancing its risk and control procedures to improve the mechanisms for identifying, evaluating and monitoring risks.

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Section 7: Internal Audit Function The Board has the overall responsibility for the Companys system of internal control. The responsibility has been delegated to the Audit and Risk Committee. The Audit and Risk Committee exercises this oversight role on internal controls through the review of quarterly audit and risk reports. Internal Audit is an integral part of Johannesburg City Parks. It is an independent appraisal function to examine and evaluate the Companys activities. The primary objective of the Internal Audit is to provide assurance on the adequacy and effectiveness of systems of internal controls, risk management and governance processes. In terms of section 165 (1) of the Municipal Finance Management Act (MFMA), each Municipal Entity must have an internal audit unit. It is functionally responsible to the Audit and Risk Committee and reports administratively to the Managing Director in providing reasonable assurance of the effectiveness of the Companys corporate governance, risk management processes and the system of internal control. The Companys internal controls and systems are designed to provide cost effective, reasonable, but not absolute assurance as to the integrity and the reliability of the annual financial statements and that assets are adequately safeguarded against material losses or unauthorized losses and transactions are properly authorized and recorded. Management ensures that internal controls are embedded as part of the daily operational activities. Areas of improvement identified in some of the audits conducted during the course of the year. Management has committed to implement recommendations agreed upon and in our opinion; this will contribute to an improvement of the internal control environment and effective governance processes. Section 165 (2) (a) of the Municipal Finance Management Act (MFMA) specifically states that each municipal entity must prepare a risk-based audit plan for each financial year. Therefore, key risks identified by management during the corporate risk assessment, which could be detrimental to the attainment of strategic objectives were considered in the development of the plan. The plan was approved by the Audit and Risk Committee and successfully implemented. The plan enabled the unit to evaluate the effectiveness of internal controls, risk management and governance processes.

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Section 8: Response to the Auditor-General Report The Auditor General raised the following issues for the year-ended 30 June 2007. The following is the status report as at 30 June 2008.1. Recognising revenue and or expenses based on the stage of completion of the

project The nature of JCPs business is to provide the parks, cemeteries and environmental conservation services for and on behalf of the City of Johannesburg and other Municipal Owned Entities (MOE). Many of these services are rendered on a project basis, as well as contracting in external service providers where JCP has a shortfall in recourses. Thus revenue is earned and project costs incurred on various projects. We have noted that the revenue generated from MOEs, as well as the expenses incurred for external contractor services procured, were not recorded on a stage of completion basis as required by IAS 18: Revenue (refer paragraph 20(c)). This standard requires management to record all revenue earned, as well as the matching expenses incurred on a time basis, reflecting the stage of completion of the project, and not only when amounts are invoiced to the relevant MOE, or when invoices are received from the external contractor. Current Status: This matter has been resolved. 2. Long duration of vacancies When we inspected the vacancy listing for the period 1 July 2006 to 30 June 2007, we identified vacancies that were not filled for longer than the norm of 3 months (65 working days). The following vacancies were open for longer than 65 days (in order: department; position): Finance: Fixed Assets Officer; and Project management: Project Coordinator

Current Status: This matter has been resolved. 3. Fix asset labels The following asset selected for physical verification was found not to have a label: Asset ID 509-000003 Description DIGITAL COPIER 1018 AFICIO Acquisition Cost R 22 869.00 Acquisition date 19/08/2001

It must be noted that we did not perform a full review of the fixed asset register to identify any other such unlabelled assets. Current Status: This matter has been resolved.

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Section 9: Corporate Ethics and Organisational Integrity JCP places a high premium on sound ethical behaviour and integrity, which should be beyond reproach. To achieve this, the Board adopted a Code of Conduct and a Charter encapsulating sound governance and an ethical approach to the way its directors, officers and employees conduct business internally and externally. This Charter subscribes to the principles set out in the King 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, JCP has an approved budget and receives regular subsidy payments from the CoJ. The Board of Directors, and specifically the Audit and Risk Committee, consider the aspect of trading as a going concern and consider the Financial Reports. Human development receives high priority with training a special focus aimed at not only enhancing productivity and service delivery, but also the empowerment and skilling of employees and through the EPWP, community members. The employees of JCP are regarded as an extremely valuable asset and are treated in a caring manner. By its very nature, JCP is focused on the social and environmental issues, which are paramount for the development of a large metropolis and the approval of its inhabitants wellbeing. The development of parks and nature areas, especially in the previously disadvantaged areas, receives specific priority. It is acknowledged that 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 JCP has ensured that sufficient burial space is provided both in the immediate and long term.

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Section 11: Corporate Social Responsibility Projects Ernest W. Hobbs Primary School Tree Planting Johannesburg City Parks donated 6 trees to Ernest W. Hobbs Primary School in Eldorado Park, Extension 2. Learners planted trees in celebration of and highlighting the importance of Arbor Week. My Dream Park Prize Competition The competition is aimed at educating, inspiring and instilling in learners the importance and value of nurturing our public open spaces, while acting as a catalyst to build civic pride. International Day of the Disabled Person Christmas in the Park, the theme of the party held to mark International Day of the Disabled Person and to highlight the plight of disabled people. Johannesburg City Parks and Cell C adopted the initiative as part of a strategic vision to ensure that all outdoor recreation facilities cater for the disabled. Johannesburg City Parks and its private sector partner, Cell C, held an early Christmas party for more than a thousand disabled children. Zola 7 and Lesego Motsepe from Isidingo joined the festivities. World Wetlands Day World Wetlands Day is marked each year around the world on 2 February. The aim of the day is to spread the message of the importance of preserving wetlands and serves to emphasize the value of wetlands on the biodiversity and human wellbeing. 2008's theme focused on the importance of well-functioning wetlands in ensuring human health and wellbeing by managing diseases, creating space for recreation, providing clean water, food and medicine. Diepkloof Xtreme Park The countdown for the Diepkloof Xtreme Park, which poised to become the leading outdoor recreation hub in the Southern quadrant of Johannesburg, began on Thursday, 8 May 2008 at 18:00. The project was designed to act as a catalyst and to ready Joburgs communities for the 2010 FIFA World Cup. In just 24 hours, the inviting green park with a big screen television, sports field and other exciting outdoor facilities was ceremonially opened by the Executive Mayor of Johannesburg.

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Take a Girl Child To Work Day Johannesburg City Parks Head Office and Various Depots A partnership project between Johannesburg City Parks and Cell C with the sole aim of expo