ENTITY OF MANGAUNG METROPOLITAN MUNICPALITY CENTLEC (SOC) LTD REG. NO: 2003/011612/30

Transcription

1 ENTITY OF MANGAUNG METROPOLITAN MUNICPALITY CENTLEC (SOC) LTD REG. NO: 2003/011612/30

2 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December 2017 Registered name of the public entity CENTLEC (SOC) LTD Company registration number 2003/011612/30 Country of incorporation and domicile Nature of business and principal activities Chief Executive Officer (CEO) Chief Finance Officer (CFO) Chief Operations Officer (COO) Directors Registered office Business address Postal address South Africa Electricity distribution Mr. A.N. Mgoqi Mr. T.J. Ramulondi Mr. L.G. Kritzinger Mr. N. Mokhesi (Chairperson) Ms. D.C. Myeni (Deputy Chairperson) Mr. K.M. Moroka Mr. C.A.K. Choeu Ms. Z.C. Uwah Mr. M.P. Mohale College Square Telkom Building Bloemfontein Nelson Mandela Drive College Square Telkom Building Bloemfontein 9301 Private Bag X14 Brandhof 9324 Contact telephone numbers +27(51) address Website address Controlling entity Bankers Mangaung Metropolitan Municipality ABSA Page 1 of 71

3 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December 2017 Auditors Company Secretary Attorneys Auditor-General of South Africa Mr. D.S.R Nkaiseng EG Cooper Phatshoane Henney Inc. Motaung Attorneys Mthembu & Mahomed Mhlambi Attorneys Ramothello, Raynard & Tsotetsi Inc. Pedzisai Pion Attorneys Page 2 of 71

4 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December 2017 Table of Contents 1 VISION MISSION VALUES EXECUTIVE SUMMARY Company Profile Purpose of the Mid-year report High Level Organisational Structure Political Governance: Board of Directors Duties of directors Statement of Compliance Board Committees Audit and Risk Committee Finance Committee Human Resources and Remuneration Committee Social Responsibility and Ethics Committee Information Technology Governance Committee Engineering Committee Mid-Year Vote / Programme 1: Office Of The Chief Executive Officer Vote / Programme 3: Human Resource Services Vote / Programme 4: Finance Vote / Programme 5: Engineering-Wires Vote / Programme 6: Engineering-Retail Vote / Programme 7: Compliance & Page 3 of 71

5 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December VISION 2 MISSION To provide optimal service delivery as mandated by the Mangaung Metropolitan Municipal Council. To strategically manage our operations in an effective, efficient and financially prudent manner, as measured against relevant indicators. To seek the most cost effective and innovative energy solutions in partnership with relevant stakeholders in order to maximise shareholder value. To train, develop, attract and retain a highly skilled workforce and to promote sound relations with organised labour. To ensure a safe and healthy environment for our workforce and the community. To be a socially responsible corporate citizen that is concerned with improving the lives of the community and the environment in which we operate. 3 VALUES Page 4 of 71

6 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December EXECUTIVE SUMMARY 1.1 COMPANY PROFILE Centlec (State Owned Company) Ltd (Centlec) was established as municipal entity wholly owned by Mangaung Metropolitan Municipality (MMM) in terms of the Municipal Systems Act, 32 of 2000 and the Companies Act, 71 of Centlec as the electricity distribution service provider of the MMM, its core function and responsibility is to purchase, distribute and sell electricity within its geographical footprint. The entity is accountable to provide network services to all its customers, which include: Electricity distribution / Energy services; Construction of electrical networks; Operation, maintenance and extension of networks; and Metering, pre-payment vending and billing services. Page 5 of 71

7 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December Purpose of the Mid-year report Section 88 (1) the accounting officer of a municipal entity must by 20 January of each year-- (a) (b) assess the of the entity during the first half of the financial year taking into account- (i) the monthly statements referred to in section 87 for the first half of the financial year and the targets set in the service delivery, business plan or other agreement with the entity s parent municipality: and (i i ) the entity s annual report for the past year and progress on resolving problems identified in the annual report: and submit a report on such assessment to- (i) the board of directors of the entity: and (i i ) the parent municipality of the entity. Centlec (SOC) Ltd presents its mid-year report (1 July December 2017) which is in line with the 2017/18 SDBIP approved by the Council of Mangaung Metropolitan Municipality (MMM) on the 31 st May This report is divided into the following sections that cover all operational functions of the entity in line with the SDBIP, namely; The Office of the Chief Executive Officer The Office of the Company Secretary The Human Resource Services Finance Engineering Wires Engineering Retail Compliance & Page 6 of 71

8 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December High Level Organisational Structure COO L.G KRITZINGER CFO T.J RAMULONDI CEO A.N MGOQI ACTING EM: ENGINEERING WIRES VACANT BOARD EM: ENGINEERING RETAIL VACANT COMPANY SECRETARY D.S.R NKAISENG EM: HR G.A.S MOLEFE Page 7 of 71

9 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December Political Governance: Board of Directors The Parent Municipality appointed eight (8) Board of Directors on the 1 st July 2016 which will serve for three (3) years in office. Two board members resigned on the 31 October 2016 and 16 May 2017 respectively. Currently the Board is left with six (six) members. Initials And Surname Designation Race Gender N. Mokhesi Chairperson African Male D.C Myeni Deputy Chairperson African Female K.M Moroka Non-Executive Director African Male C.A.K Choeu Non-Executive Director African Male

10 Initials And Surname Designation Race Gender Z.C Uwah Non-Executive Director Coloured Female M.P Mohale Non-Executive Director African Male The Board has met regularly and retains full control of the company. The Board remains accountable to MMM (the municipal entity s sole shareholder) and its stakeholders, the citizens of Mangaung and the other areas where electricity is distributed. 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 Chief Executive Officer of the company are separated, with responsibilities divided between them. The Chairperson has no executive functions. Members of the Board 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 best corporate practices. The Board or any of its members may, in appropriate circumstances and at the expense of the company, obtain the advice of independent professionals. 4.5 Duties of directors Section 93H of the Municipal System Act, No. 32 of 2000, stipulates that: (1) The Board of Directors of a municipal entity must: (a) Provide effective, transparent, accountable and coherent corporate governance and conduct effective oversight of the affairs of the municipal entity; Page 9 of 71

11 (b) Ensure that the municipal entity comply with all applicable legislation and agreements; (c) Communicate openly and promptly with the parent municipality of the municipal entity; and (d) Deal with the parent municipality of the municipal entity in good faith. 4.6 Statement of Compliance The Board of Directors and executives recognises and are committed to the principles of transparency, integrity and accountability advocated by the King III Code on Corporate Governance. Through this process, the shareholder and other stakeholders are assured that the company is being managed ethically according to prudent risk parameters in compliance with generally accepted corporate practices. The monitoring of the company s compliance with King III forms part of the mandate of the Audit and Risk Committee. The municipal entity has complied with the code in all material respects during the year under review except for cases as reported in the note on the financial statements on non-compliance with legislation. 4.7 Board Committees The Board had the following committees during the period under review: Audit and Risk Committee; Finance Committee; Human Resources and Remuneration Committee; Social Responsibility and Ethics Committee; Information Technology Governance Committee; and Engineering Committee Audit and Risk Committee The committee is responsible for reviewing the effectiveness of the financial reporting process, the system of internal control and management of financial risks, the assurance process, and the entity s process for monitoring compliance with laws and regulations and its own code of business conduct. The term of the audit committee Audit and Risk Committee ended on the 31 July 2016, and it was agreed upon that municipal entity will utilize the services of the parent municipality s audit committee Audit and Risk Committee attendance Page 10 of 71

12 Initials and Surname Designation Race Gender G. Mahlatsi (Chairperson) P. Kaota T. Lebenya N. Mdkala Member African Male Member African Male Member African Female Board Representative African Male Finance Committee The role of the committee is to assist the Board in fulfilling its responsibility of oversight with respect to all governance aspects, financial management and financial accounting, inter alia assisting the Board in fulfilling its responsibility to oversee CENTLEC SOC LTD s financial position, financing plans and programmes, cash management, investment management, employee retirement plans, insurance management and review of financial and procurement policies. Initials and Surname Designation N. Mochochoko # Chairperson Z.C. Uwah Chief Executive Officer Chief Financial Officer Chief Operations Officer Member Invitee Invitee Invitee #N. Mochochoko resigned on the 16 of May Page 11 of 71

13 4.7.3 Human Resources and Remuneration Committee The role of the committee is to assist the Board in ensuring that the company remunerates Directors and executives fairly and responsibly and that the disclosure of Directors and remuneration is accurate, complete and transparent. Initials and Surname Designation C. Choeu Chairperson M. Mohale Member Chief Executive Officer Chief Financial Officer Chief Operations Officer EM: Human Resources EM: Engineering (Retail) Invitee Invitee Invitee Invitee Invitee Social Responsibility and Ethics Committee The role of the committee is to assist the Board with the oversight of social and ethical matters and ensuring that members of the Board of Directors and employees of the entity adhere to the established Code of Conduct in terms of Schedule 1 and 2 of Municipal Systems Act, No. 32 of 2000, as amended, the Municipal Finance Management Act, No. 56 of 2003, any other legislation applicable to the entity as well as good governance principles as outlined in the King IV, report on corporate governance for South Africa 2016 (effective April 2017). Initials and Surname Designation K.M. Moroka Z.C. Uwah Chief Executive Officer Chief Financial Officer Chief Operations Officer Chairperson Member Invitee Invitee Invitee Page 12 of 71

14 4.7.5 Information Technology Governance Committee The role of the committee is to oversee the implementation, monitoring and review of the CENTLEC SOC LTD policies, procedures, practices and guidelines aimed at meeting the Information and Communication Technology (ICT) governance requirements as stipulated in King IV. Initials and Surname Designation M. Mohale Chairperson C. Choeu Member Chief Executive Officer Chief Financial Officer Chief Operations Officer EM: Engineering (Retail) Invitee Invitee Invitee Invitee Engineering Committee The committee is charged with the responsibility to oversee the implementation, monitoring and review of the CENTLEC SOC LTD policies, procedures, practices and guidelines aimed at meeting the requirements as stipulated in the NRS 047 and 048 documents. Initials And Surname Designation D. Myeni Chairperson N. Mochochoko # Member Chief Executive Officer Chief Financial Officer Chief Operations Officer EM: Engineering (Wires) Invitee Invitee Invitee Invitee #N. Mochochoko resigned on the 16 of May Page 13 of 71

15 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December Mid-Year The strategic objectives of the entity as enshrined in the Business Plan are directly linked to the specific developmental needs and objectives which must be measured and give effect to the service delivery and budget implementation plan (SDBIP) targets / goals. The quarterly departmental SDBIP reports are reviewed by the internal audit on a quarterly basis as required by section 41(1) (c) of the Municipal Systems Act, 32 of Challenges: There is a considerable number of valid reasons that prevented us from achieving the set goals outlined on the SDBIP, although Management is working tirelessly to overcome these challenges. The following are the significant challenges that stick out from the list, namely: There is significant number of vacant posts for the critical positions, amongst others is the EM: Engineering Wires, EM: Retail positions, Company Secretary and EM: & Compliance. This impacted negatively on the operations of the entity which resulted in: Utilising Service Providers and Contractors Slow SCM processes Overload of work to current staff, etc.

16 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December 2017 DETAILED PERFORMANCE INFORMATION AGAINST SET TARGETS VOTE / PROGRAMME 1: OFFICE OF THE CHIEF EXECUTIVE OFFICER Section 93J of Municipal Systems Act 32 of Appointment of chief executive officer. The chief executive officer of a municipal entity is accountable to the board of directors for the management of the municipal entity. Office of the CEO is divided into strategic support, safety health risk environment & quality, marketing and communication, legal & contracts, audit & risk management. ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year To capacitate Implement SHERQ Provide safety Number of Safety training Provide safety Not applicable There is no Not required (a) and empower workforce human resources strategies that are able to provide a conducive working environment for training to predetermined SHERQ officials as required by the OHSAS Act 85 of 1993 by 30 June 2018 officials trained as required by the OHSAS Act 85 of 1993 by 30 June 2018 completed during training for twenty (20) officials each for SHERQ Representatives, Fire Fighting, First Aid and for the quarter under review 17 employees for First Aid Training and 28 employees for Evacuation Training. 17 employees for First Aid Training and 28 employees for Evacuation Training. variance.

17 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year employees, skills RCAT by 30 development June 2018 and competency of employees To capacitate Implement SHERQ Conduct bi-monthly Topic and bi- Conduct twenty- There is no Not required, 1-1.1(b) and empower workforce SHERQ strategies that provide conducive and safe working environment safety talks and one (1) annual SHERQ Awareness Campaign to all employees by 30 June 2018 attendance register signed by the attendees monthly safety talks and an annual SHERQ awareness campaign four (24) safety talks per department and one (1) induction SHERQ Awareness Campaign to all employees by 30 Nine (9) bimonthly safety talks were conducted by 30 September Six (6) bimonthly safety talks were conducted for the quarter. Fifteen (15) bimonthly safety talks were conducted for the quarter. variance as both the two quarterly targets were met. because the target has been achieved. June 2018 Page 16 of 71

18 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year To ensure Put in place all Marketing & Development of a Approved Centlec draft Communication Not applicable Not required 1-5.1(a) good governance practices and stakeholder engagement systems and structures that are necessary to facilitate effective and continuous oversight over the Communication Communication policy by 30 June 2018 Communication Policy by 30 June 2018 Communicatio n policy policy approved by 30 June 2018 The communication policy was tabled and Noted in EXCO. Draft communication and social media policies were tabled and approved Draft communication and social media policies were tabled and approved of the entity by designated oversight structures and other stakeholders Page 17 of 71

19 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year To ensure To market Marketing & Four (4) marketing Number of Four (4) Not applicable Not required, good Centlec and Communication initiatives undertaken marketing marketing marketing Five (5) Marketing 1-5.1(b) governance practices and stakeholder engagement promote access to information on institution activities by 30 June 2018 initiatives undertaken by 30 June 2018 initiatives initiatives undertaken by 30 June 2018 One (1) marketing initiative undertaken by 30 September Five (5) Marketing Initiatives were conducted for the quarter Initiatives were conducted for both quarters To ensure Put in place all Internal Audit & Review policies, Revised Review the No target set for No target set There were no set There were no Not required, good systems and Risk charters, plans and documents approved following quarter 1 for quarter 2 targets for both set targets for because there governance structures that strategies relating to submitted to the charters, documents and quarters, therefore both quarters, were no set 1-5.1(c) practices and stakeholder engagement are necessary to facilitate effective and continuous Internal Audit and Risk Management submitted to the Audit and Risk Audit and Risk Committee for approval by 30 June 2018 policies and plans submit for approval to the Audit and Risk Committee by 30 there was no reported. therefore there was no variance. targets for both quarters. oversight over Committee for June 2018: the Page 18 of 71

20 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year of the entity by approval before 30 - Internal Audit designated June 2018 Charter, oversight - Audit and Risk structures and Committee other Charter; stakeholders - Internal Audit Policy and Quality Assurance and Improvement programme; Enterprise Risk Management Policy and Strategy Page 19 of 71

21 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year To ensure Put in place all Internal Audit & Annual risk Annual Risk N/A Conduct annual No target set for No target set There were no set There were no Not required, good systems and Risk assessment Assessment risk assessment quarter 1 for quarter 2 targets for both set targets for because there governance structures that conducted during the report workshop quarters, therefore both quarters, were no set practices and are necessary to 2017/18 financial completed by 30 there was no therefore there targets for both stakeholder facilitate year June 2018 was no quarters. engagement effective and reported. variance. continuous 1-5.1(d) oversight over the of the entity by designated oversight structures and other stakeholders Page 20 of 71

22 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year To ensure Put in place all Internal Audit & Internal Audit Twelve (12) N/A Internal Audit Not required, 1-5.1(e) good governance practices and stakeholder engagement systems and structures that are necessary to facilitate effective and continuous oversight over the of the entity by designated oversight structures and other stakeholders Risk progress report against the 2017/18 Internal Audit plan issued monthly to management and quarterly to the Audit and Risk Committee Monthly reports Four (4) quarterly reports progress reports submitted against the Internal Audit plan for the financial year, monthly to management and quarterly to the Audit and Risk Committee by 30 June 2018 Three (3) monthly reports on the 2017/18 plan were submitted to management within (7) days after month end. Quarter (four) 4 reports were tabled at the Audit and Risk Committee meeting held on Three (3) monthly progress reports to management within seven (7) days after month end One (1) quarterly report (Q 1 of 2017/18) will be submitted to the Office of Six (6) monthly reports were submitted to management. Two (2) quarterly reports was submitted to management. There is no variance as the target has been achieved. because the target has been achieved. Not required. the 29 th of the Company August 2017 Secretary at least five (5) Page 21 of 71

23 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year days prior to Progress Report the Audit and was submitted to Risk management. Committee meeting scheduled for for circulation Quarter (one)1 report was tabled at the Audit and Risk Committee meeting held on 23 rd of October 2017 progress report was submitted Page 22 of 71

24 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year to Management. Page 23 of 71

25 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December 2017 VOTE / PROGRAMME 2: OFFICE OF THE COMPANY SECRETARY Section 88 of Companies Act No 71 of Duties of company secretary. (1) A company s secretary is accountable to the company s board. (2) A company secretary s duties include, but are not restricted to (a) Providing the directors of the company collectively and individually with guidance as to their duties, responsibilities and powers; (b) Making the directors aware of any law relevant to or affecting the company; (c) Reporting to the company s board any failure on the part of the company or a director to Comply with the Memorandum of Incorporation or rules of the company or this Act; (d) Ensuring that minutes of all shareholders meetings, board meetings and the meetings of any committees of the directors, or of the company s audit committee, are properly recorded in accordance with this Act; (e) Certifying in the company s annual financial statements whether the company has filed required returns and notices in terms of this Act, and whether all such returns and notices appear to be true, correct and up to date; (f) Ensuring that a copy of the company s annual financial statements is sent, in accordance with this Act, to every person who is entitled to it; (g) Carrying out the functions of a person designated in terms of section 33 (3).

26 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve To ensure Put in place all N/A Submit the 2017 Date and proof of 2016 Submit the 2017 Not applicable for Not applicable for Not applicable for There is no Not required good systems and Statutory Annual submission of Statutory Statutory Annual the quarter under the quarter under the two quarters variance governance structures that are Return of the 2017 Statutory Annual Return of the review. review. under review. practices and necessary to company to Annual Return of Return company to CIPC stakeholder facilitate effective CIPC as required the company to as required by the engagement and continuous by the CIPC as required Companies Act oversight over the Companies Act by the No. 71 of 2008 by 2-5.1(a) of the entity by No. 71 of 2008 by 24 May 2017 Companies Act No. 71 of May 2017 designated oversight structures and other stakeholders Page 25 of 71

27 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve To ensure Put in place all N/A Ensure that all Number of Ensure that all not not not The CFO is Not applicable good systems and eleven (11) Directors Declaration eleven (11) still on 2-5.2(b) governance practices and stakeholder engagement structures that are necessary to facilitate effective and continuous oversight over the of the entity by designated oversight structures and Directors (executive and non-executive) of the company complete appropriate declaration of interest forms by 30 September 2017 (executive and non-executive) who completed declaration of interest forms by 30 September 2017 s of interest completed Directors (executive and non-executive) of the company complete appropriate declaration of interest forms by 30 September 2017 Only seven (7) Directors of the company completed the declaration of interest forms within. Two (2) directors have resigned and the CFO is still on suspension, only eight directors have completed the declaration of interest forms Two (2) directors have resigned and the CFO is still on suspension, only eight directors have completed the declaration of interest forms suspension and two directors have resigned. other stakeholders Page 26 of 71

28 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve To ensure Put in place all N/A Maintain a Signed register of Quarterly signed- Not applicable Not required 2-5.2(c) good governance practices and stakeholder engagement systems and structures that are necessary to facilitate effective and continuous oversight over the of the entity by designated oversight structures and other stakeholders signed register of retained company records in compliance with Section 24 of the Companies Act No. 71 of 2008 for the period 1 July 2017 to 30 June 2018 retained company records in compliance with Section 24 of the Companies Act No. 71 of 2008 for the period 1 July 2017 to 30 June 2018 Register of company records off register of retained company records in compliance with Section 24 of the Companies Act No. 71 of 2008 for the period 1 July 2017 to 30 June 2018 A signed register of retained company records in compliance with Section 24 of the Companies Act for the period 1 July 2017 to 30 September 2017 was submitted by 30 September A signed register of retained company records in compliance with Section 24 of the Companies Act for the period 1 October 2017 to 31 December 2017 was submitted by 31 December Two signed registers of retained company records in compliance with Section 24 of the Companies Act were submitted. Page 27 of 71

29 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve To ensure Put in place all N/A Oversee the Proof of 2015/16 Oversee the Not applicable for There is no Not required 2-5.2(d) good governance practices and stakeholder engagement systems and structures that are necessary to facilitate effective and continuous oversight over the of the entity by designated oversight structures and other stakeholders submission process of the company s signed-off preaudited annual financial statements to be submitted to the Parent Municipality and the Auditor- General by 31 August 2017 submission of signed copies of the company s signed-off preaudited annual financial statements and draft annual report to the Parent Municipality and the Auditor- General by 31 August 2017 pre-audited Annual Financial statements submission process of the company s signedoff pre-audited annual financial statements to be submitted to the Parent Municipality and the Auditor- General by 31 August 2017 The submission process of the company s signed-off preaudited annual financial statements were submitted to the parent Municipality and the Auditor- General by 31 August the quarter under review. The submission process of the company s signed-off preaudited annual financial statements were submitted to the parent Municipality and the Auditor- General by 31 August 2017 variance, because the target has been achieved. Page 28 of 71

30 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve To ensure Put in place all N/A Ensure that % of executed N/A Register all not partially Not all We should 2-5.2(e) good governance practices and stakeholder engagement systems and structures that are necessary to facilitate effective and continuous oversight over the of the entity by designated oversight structures and 100% requests received from the Board of Directors or individual Directors for advice relating to Corporate Governance and compliance with the Companies requests against those received from the Board of Directors or individual Directors for advice relating to Corporate Governance and compliance with the Companies requests received from the Board of Directors or individual Directors for advice relating to Corporate Governance and compliance with the Companies Act No. 71 of 2008 Monitoring could not be confirmed at this stage, not all requests have been registered, because the Board meeting still has to take place. One (1) board request was received and executed. One (1) board request was received and executed. requests were documented, because the Board meeting did not take place in quarter 1. ensure that all Board meetings take place. other Act No. 71 of Act No. 71 of during the 2017/18 stakeholders 2008 are 2008 are financial year and executed during executed during ensure that 100% of them are Page 29 of 71

31 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year measure taken to improve the 2017/18 the 2017/18 executed by 30 financial year financial year June 2018 Page 30 of 71

32 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December VOTE / PROGRAMME 3: HUMAN RESOURCE SERVICES The Human Resources Department is headed by the Executive Manager Human Resources and is responsible for, inter alia: a) the development of a based culture, custodian of the organizational structure; supportive role to the CEO and other executives,; b) strengthening business structure and applying a range of business goals and overseeing the application of the best practice standards in human resources management, centralized supports; c) effective knowledge/information management and business process systems management; Office of the Human Resource services is divided into Labour Relations, Human Resource Management and Human Resource Development. ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve To Implement human Labour Conduct one (1) Agenda, Number of Conduct one (1) Partially Achieved : The target is In effective Department capacitate resources Relations & workshop per attendance workshops workshop per Achieved : One (1) workshop partially scheduling. will create a 3-1.1(a) and empower strategies that are able to provide a HR Benefits department on collective register & invitation for department on collective One (1) Workshop was was conducted for Medium Voltage achieved as not all of the new schedule to ensure all workforce conducive agreements and agreements and conducted for on the 13 October Engineering Wires the employees working condition of conditions of Regional Offices 2017 employees of each

33 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve environment for service by 30 service by 30 June Botshabelo on attended the set department employees, skills June 2018, for all 2018, for all the the 29 September Two (2) workshop in attend the development and the departments departments as 2017 workshops were quarter one. workshops. competency of as per the per the approved conducted for employees approved organisational both Metering and organisational structure. IT during the structure. month of November A Workshop was scheduled for Revenue protection 22 December 2017, invitees did not honour the invite. Page 32 of 71

34 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve To Implement human Labour Initiate internal Case As per Initiate internal Achieved : Achieved: Not applicable. Not required. capacitate resources Relations disciplinary management Section 6 disciplinary All disciplinary One Disciplinary All reported cases and strategies that are processes for reports three (3) of processes for hearings were Hearing was held of allegations empower able to provide a each allegation collective each allegation of initiated within the during the month misconduct were workforce conducive of misconduct agreement misconduct within set time. of November initiated within 3-1.1(b) working within three (3) on three (3) months 2017 for Q2. three (3) months environment for months of disciplinary of reporting Cases reported: of reporting. employees, skills reporting hearings Four cases of development and misconduct were competency of reported for the employees quarter. To Implement human Human Complete the Appointment 2017/18 Complete the Achieved : To be achieved. Not applicable. Not required (c) capacitate and empower workforce resources strategies that are able to provide a conducive working Resource Management recruitment process within six (6) weeks after the interview process letters Quarterly Human Resource reports recruitment process within six (6) weeks after the interview process has been finalized Department completed recruitment process within interview process The recruitment processes for the advert which was circulated in The recruitment process for Vacancy Bulletin No: 01/2017 Page 33 of 71

35 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve environment for has been for a specific has been October 2017 are (Closed on the 07 employees, skills finalized for a vacancy during finalized and the still unfolding. July 2017) where development and specific vacancy the period 1 July filled in vacancies Processes will be completed within competency of during the period 2017 to 30 June during the period finalised in the six (6) weeks after employees 1 July 2017 to July 2017 to 30 next quarter. the interview June 2018 September 2017 process has been six (6) weeks finalized. after the interview process has been finalized. To Implement human Human Conduct The number of N/A Conduct four (4) Achieved : Achieved: Achieved : Efficient planning Not required. capacitate resources Resource quarterly quarterly quarterly The department Two workshops Five (5) of the workshops. and strategies that are Management workshops on workshops workshops on Conducted three were conducted workshops on 3-1.1(d) empower able to provide a employee conducted on employee benefits (3) quarterly with the Finance employee benefits workforce conducive benefits with staff employee with staff workshops with and Human with staff working members by 30 benefits for staff members of the Resources members were environment for June 2018 various Departments on conducted to the Page 34 of 71

36 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve employees, skills members by 30 departments as & Compliance, Conditions of following development and June 2018 per the approved Office of the CEO Service and Study departments competency of organisational and the office of scheme. during the mid- employees structure by 30 the Company Invite for the year, namely: June 2018 Secretory by 30 workshop, 1. September. attendance & Compliance, register and 2. Office of the workshop CEO, presentation are 3.Office of the attached as Company evidence. Secretory, 4. Finance and; 5. Human Resources. Page 35 of 71

37 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve To Implement human Human Review and Minutes of the Selective HR Review and No target set for No target set for There was no Not applicable. Not required. capacitate resources Resource submit one (1) Board meeting policies submit one (1) the quarter, the quarter, target set for and strategies that are Management HR-related policy with indication of reviewed HR-related policy quarter one (1) empower able to provide a for approval by approval of HR and by 30 June 2018 and quarter two workforce conducive 30 June 2018 policies approved by to the board for (2) hence no 3-1.1(e) working the Board approval environment for reported. employees, skills development and competency of employees To Implement human Human Submission of Proof of Employment Submission of No target set for EEA 2 and EEA 4 Not applicable. Not required (g) capacitate and empower workforce resources strategies that are able to provide for a conducive working Resource Management 2017/18 Employment Equity report to the Office of the submission of Employment Equity report to Equity report 2017/18 Employment Equity report to the Office of the this quarter, reports were submitted to the Department of Labour through the office of the The EEA 2 and EEA 4 reports were submitted to the Department of Page 36 of 71

38 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve environment for CEO by 31 the Office of the CEO by 31 CEO during the Labour through employees, skills December 2017 CEO December 2017 month of the office of the development and November CEO during the competency of month of employees November To Implement human Human Submission of Proof of Submission Submission of Not applicable. Not required. capacitate resources Resource 2018/19 submission of of 2017/ /19 Report was 1. Submission of The quarterly and strategies that are Development Workplace Skills 2018/19 WSP Workplace Workplace Skills submitted, WSP 2017/2018 WSP reports for empower able to provide a Plan (WSP) and and 2017/18 Skills Plan Plan (WSP) to 2018/19 is due in will be applicable Monitoring & workforce conducive submission of quarterly (WSP) to EXCO by 30 April April in April Implementation of 3-1.1(h) working environment for quarterly monitoring and monitoring and implementation EXCO by 30 April and submission of 2. Quarterly reports on the 2017/18 WSP for quarter one (1) employees, skills implementation reports and quarterly Monitoring & and quarter (2) development and reports to EXCO submission monitoring and Implementation have been signed competency of by 30 April 2018 of quarterly implementation for period of and submitted. employees monitoring reports for the October and 2017/18 WSP for December 2017 Page 37 of 71

39 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid-Year the Variances measure taken to improve implementati the period 1 July have been signed on reports 2017 to 30 April and submitted. for the Attached is the 2017/18 monthly WSP for the attendance period 1 July registers for 2017 to 30 apprentices for April 2018 period of October December Page 38 of 71

40 MID-YEAR PERFORMANCE REPORT 01 July 2017 to 31 December VOTE / PROGRAMME 4: FINANCE Section 81 of municipal Finance management Act 56 of 2003; Role of chief financial officer. (1) the chief financial officer of a municipality. (a) Is administratively in charge of the budget and treasury office; (b) Must advise the accounting officer on the exercise of powers and duties assigned to the accounting officer in terms of this Act; (c) Must assist the accounting officer in the administration of the municipality s bank accounts and in the preparation and implementation of the municipality s budget; (d) Must advise senior managers and other senior officials in the exercise of powers and duties assigned to them in terms of section 78 or delegated to them in terms of section 79; and (e) Must perform such budgeting, accounting, analysis, financial reporting, cash management, debt management, supply chain management, financial management, review and other duties as may in terms of section 79 be delegated by the accounting officer to the chief financial officer. The office of the CFO is divided into Revenue Management, Financial Management and Budget & Compliance,

41 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances 4-4.1(a) Ensure financial management practices that enhance financial viability and compliance with the requirements of the MFMA and other relevant legislation Plan, implement, monitor and report financial management activities in accordance with the MFMA, its associated regulations and prescribed accounting norms and standards Revenue Management Debt collection improved by 50% on arrear debt based on figures by 30 June 2018 % of Debt collection improvement on arrear debt based on figures by 30 June 2018 % of Debt collection improvement on current accounts based on 2015/16 figures. Improve debt collection by 50% on arrear debt based on figures by 30 June 2018 Debt collected for the quarter is 20% which is equivalent to R which is higher than the quarterly target of 12.5% (R ) by R Debt collected for the quarter is 16% which is equivalent to R which is higher than the quarterly target of 12.5% (R ) by R Debt collected for mid-term is 36% which is equivalent to R which is higher than the quarterly target of 25% (R ) by R More effort is being put in place to ensure that all debt owed is paid. Not required. Page 40 of 71

42 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances 80% revenue collection on monthly current accounts % of revenue collection on monthly current accounts as per general ledgers % of revenue collection on monthly current accounts as per general ledgers Monthly revenue collection of 80% on current accounts The Bill for the quarter was R and collection amounted to R The Bill for the quarter was R and collection amounted to R The Bill for the quarter was R799,976,592 and collection amounted to More effort is being put in place to ensure that all debt owed is paid. Not required (95%) which is R659,915,829 (74%) which is equivalent to 15% (82%) which is equivalent to 6% higher than the equivalent to lower than the 80% quarterly 2% higher than 80% quarterly target of R 251 the 80% target of R by R 47 quarterly target by R of R by R Page 41 of 71

43 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances 4-4.1(b) Ensure financial management practices that enhance financial viability and compliance with the Plan, implement, monitor and report financial management activities in accordance with the MFMA, its associated regulations and Revenue Management 96% accuracy in the amount billed per month throughout the 2017/18 year % accuracy in the amount billed per month throughout the year accounts billing reports 96% accuracy in the amount billed per month throughout 2017/18 The number of accounts billed for the quarter was on the total number of which is 99%. The number of accounts billed for the quarter was on the total number of which is 96%. The number of accounts billed for the quarter was on the total number of which is 97%. Not applicable. Not required. requirements prescribed of the MFMA accounting norms and other and standards relevant legislation 4-4.1(c) Ensure financial management practices that Plan, implement, monitor and report financial management Financial Management Monthly, quarterly and annual financial reports in terms Twelve (12) signed-off monthly financial reports, four (4) 2017/18 twelve (12) monthly Twelve (12) signed-off monthly financial reports, four (4) All 3 Section 87 Reports have been submitted as legislated to All 3 Section 87 Reports have been submitted as legislated to is partially Quarter one (1) financial reports not submitted to the Parent Municipality The KPI is revised in the SDBIP process in the adjustment Page 42 of 71

44 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances enhance financial viability and compliance activities in accordance with the MFMA, its associated of Sections 87, 88, and 121 of the Municipal Finance signed-off quarterly reports, one (1) Mid-term & Financial Reports signed-off quarterly reports, one (1) Mid-term & the Parent Municipality for the quarter under review. The Draft the Parent Municipality for the quarter under review. The KPI All Section 87 Reports have been submitted as within seven (7) working days after the quarter end. budget pack of with the regulations and Management budget budget Annual Report for is revised in the legislated to requirements prescribed Act, No. 56 of assessment assessment and SDBIP process in the Parent of the MFMA accounting norms 2003, submitted report, one (1) report, one (1) Final Financial the adjustment Municipality for and other and standards to the Parent final draft budget final draft budget statements were budget pack of the mid-term. relevant Municipality for 2018/19, one for 2018/19, one submitted to the The Draft legislation (1) Annual (1) Annual Parent Annual Report Report for Report for Municipality and for and one and one Auditor General and Final (1) Annual (1) Annual by the 31 August Financial Financial Financial 2017 statements Statement for Statement for were submitted to the Parent Municipality and Auditor General by the Page 43 of 71

45 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances 31 August Ensure financial management practices that enhance financial viability and Plan, implement, monitor and report financial management activities in accordance with the MFMA, its Financial Management 0% irregular expenditure incurred due to non-compliance with the company s Supply Chain % of irregular expenditure incurred due to non-compliance with the company s Supply Chain Annual Financial Statements 0% irregular expenditure incurred due to non-compliance with the company s Supply Chain The entity did not incur any Irregular Expenditure for the quarter under The entity did not incur any Irregular Expenditure for the quarter under review The entity did not incur any Irregular Expenditure for the quarter under review Not applicable. Not required (d) compliance associated Management Management Management review. with the regulations and Policy, Supply Policy, Supply Policy, Supply requirements prescribed Chain Chain Chain of the MFMA accounting norms Management Management Management and other and standards Regulations, Regulations, Regulations, relevant 2005, and the 2005, and the 2005, and the legislation MFMA by 30 MFMA by 30 MFMA by 30 June 2018 June 2018 June 2018 Page 44 of 71

46 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances Ensure financial management practices that Plan, implement, monitor and report financial management Budget & Compliance Prepare Annual Financial Statements in accordance with Auditor-General s Management Letters (GRAP Standards, 2015/16 Audited Annual Financial Prepare Annual Financial Statements in accordance with The annual financial The KPI is not applicable for the quarter under review. The annual Not applicable. Not required. enhance activities in the South African Section 122 of statements the South African statements and financial financial accordance with Standards of MFMA) and the and the Standards of audit file that statements viability and compliance the MFMA, its associated Generally Recognised number of audit files submitted 2015/16 audit file Generally Recognised supports the financial and audit file that supports with the regulations and Accounting Accounting statements were the financial requirements prescribed Practices Practices submitted to the statements of the MFMA accounting norms (GRAP) and (GRAP) and AGSA and parent were submitted 4-4.1(e) and other and standards Section 122 of Section 122 of municipality to the AGSA relevant the MFMA along the MFMA along within the and parent legislation with an audit file with an audit file legislated time municipality that supports the that supports the (31 August 2017) within the information that financial and of a quality legislated time supports the statements by 31 that fairly (31 August financial August 2017 represents the 2017) and of a quality that Page 45 of 71

47 ANNUAL PERFORMANCE TARGETS AND FEEDBACK ON ACTUAL PERFORMANCE of Mid- Year the Variances statements by 31 state of affairs of fairly August 2017 the entity. represents the state of affairs of the entity (f) Ensure financial management practices that enhance financial viability and compliance with the requirements of the MFMA and other relevant legislation Plan, implement, monitor and report financial management activities in accordance with the MFMA, its associated regulations and prescribed accounting norms and standards Budget & Compliance Bi-annual assets verification performed and asset registers updated with all asset movements, and report any damaged/missin g items by 30 June Ensure all moveable assets and additions to The number of bi-annual assets verifications performed and asset registers updated with all asset movements, and report any damaged/ missing items by 30 June 2018 The number of moveable assets Asset Registers Two (2) Biannual assets verification performed and asset registers updated with all asset movements, and report any damaged/ missing items by 30 June 2018 Accurately account for all The KPI is not applicable for the quarter under review. One (1) Bi-annual assets verification performed and asset registers updated with all asset movements, and report any damaged/ missing items by 31 December One (1) Biannual assets verification performed and asset registers updated with all asset movements, and report any damaged/ missing items by 31 Not applicable. Not required. infrastructure of and additions to the entity s Page 46 of 71