chairpersons quarterly report to the mmc eisd mid-year report … reports/2014-15 mid … · the...

Chairpersons Quarterly Report to the MMC EISD

Mid-Year Report (July to December 2014)

Draft

City Power Mid-Year Report – July to December 2014

2 February Final of 88

Table of Contents

1. CHAIRPERSON’S SUMMARY ................................................................................................................... 4

2. EXECUTIVE SUMMARY ........................................................................................................................... 5

HIGHLIGHTS AND ACHIEVEMENTS ................................................................................................................................... 5 CHALLENGES ............................................................................................................................................................ 6 RISKS AND MITIGATIONS .............................................................................................................................................. 7 GROUP / DIVISION PERFORMANCE OVERVIEW .................................................................................................................. 7

3. PERFORMANCE MONITORING .............................................................................................................. 16

ALIGNMENT TO MAYORAL PRIORITY IMPLEMENTATION PLAN (PIP) AND SERVICE DELIVERY BUDGET IMPLEMENTATION PLAN

(SDBIP) (PERSON RESPONSIBLE: ALL DIRECTORS FOR THE KPA THAT RELATES TO THEM) ....................................................... 16 GROWTH AND DEVELOPMENT STRATEGY-INTEGRATED DEVELOPMENT PLAN REPORT (IDP) (PERSON RESPONSIBLE: ALL DIRECTORS

FOR THE KPA THAT RELATES TO THEM) .......................................................................................................................... 25 BALANCED SCORECARD WITH KEY PERFORMANCE AREAS AND INDICATORS (RESPONSIBLE: ALL DIRECTORS FOR THE KPA THAT

RELATES TO THEM) .................................................................................................................................................... 30

4. SERVICE DELIVERY REPORT ................................................................................................................... 35

ANALYSIS OF THE MASTER CAPITAL PROGRAMME (RESPONSIBLE PERSON DIRECTOR: ENGINEERING SERVICES) ........................... 35 ACTUAL VS PROJECTIONS ........................................................................................................................................... 36 CAPITAL EXPENDITURE DETAILS ................................................................................................................................... 37 INFRASTRUCTURE MAINTENANCE (RESPONSIBLE PERSON DIRECTOR: ENGINEERING OPERATIONS) ............................................ 44 RETAIL SERVICES (RESPONSIBLE PERSON DIRECTOR: RETAIL) .............................................................................................. 47

5. FINANCIAL MANAGEMENT ................................................................................................................... 54

FINANCIAL ASSESSMENT FINANCIAL ASSESSMENT (RESPONSIBLE PERSON: DIRECTOR FINANCE) ................................................ 54 STATEMENT OF FINANCIAL PERFORMANCE ..................................................................................................................... 54 STATEMENT OF FINANCIAL POSITION ............................................................................................................................ 59 CASH MOVEMENT FOR THE PERIOD .............................................................................................................................. 62 SUPPLY CHAIN MANAGEMENT FINANCIAL ASSESSMENT (RESPONSIBLE PERSON: DIRECTOR FINANCE) ....................................... 62 FLEET MANAGEMENT FINANCIAL ASSESSMENT (RESPONSIBLE PERSON: DIRECTOR FINANCE) ................................................... 67 AUDIT FINDINGS 2013/14 ......................................................................................................................................... 68

6. HUMAN RESOURCES MANAGEMENT ................................................................................................... 69

(RESPONSIBLE PERSON: DIRECTOR HUMAN RESOURCES) .................................................................................................. 69 LLF AGREEMENT....................................................................................................................................................... 69 STRUCTURAL RE-ALIGNMENT ....................................................................................................................................... 70 TALENT MANAGEMENT .............................................................................................................................................. 70 SKILLS DEVELOPMENT AND TRAINING............................................................................................................................ 73 REMUNERATION MANAGEMENT ................................................................................................................................... 75 POLICY REVIEW ........................................................................................................................................................ 75 PERFORMANCE MANAGEMENT .................................................................................................................................... 76 CHANGE MANAGEMENT ............................................................................................................................................. 76 ER REPORTING ......................................................................................................................................................... 76

7. RISK, ASSURANCE AND COMPLIANCE ................................................................................................... 77

(RESPONSIBLE PERSON: DIRECTOR RAC) ....................................................................................................................... 77 RISK MANAGEMENT .................................................................................................................................................. 77 REFER TO ANNEXURE – STRATEGIC RISK REGISTER ........................................................................................................... 83

8. GOVERNANCE ...................................................................................................................................... 84

(RESPONSIBLE PERSON: COMPANY SECRETARY) .............................................................................................................. 84



BOARD MEETINGS..................................................................................................................................................... 84 DIRECTORS AND TOP MANAGEMENT REMUNERATION ...................................................................................................... 84 BOARD FUNCTIONING AND FINANCIAL MANAGEMENT ..................................................................................................... 85

1. CHAIRPERSON’S SUMMARY City Power is a municipal entity wholly owned by the City of Johannesburg. The performance targets are agreed with the shareholder and captured in the business plan before the start of the financial year. This report reflects the performance for the mid-year of the 2014/15 financial year. The governance processes of the Board are designed to ensure that the Board and its sub-committees carry out their responsibilities effectively. The attendance at Board and sub-committee meetings is a reflection of the strong commitment of the Members and the Chairperson is pleased with the robust participation of all the Members. The governance report under section 8 of this report describes the meetings held by the Board and its sub-committees for the mid-year. The governance processes of the Board are designed to ensure that the Board and its sub-committees carry out their responsibilities effectively. I would like to draw your attention to two areas of particular concern to the Board; these are Losses and the Company‟s failure to achieve the targeted surplus for the mid-year. The revenue target was not met for the mid-year due to increase in losses. The contributing factors to the increase in non-technical losses are unmetered properties, incorrectly programmed meters and prepaid customers not participating. Revenue Recovery Project was established in an effort to recover current and historical revenue lost, meter reading improvement, billing accuracy and reduction in non-technical losses. City Power plans to recover historical revenue via the revenue recovery project. During the quarter the negative variance on revenue decreased from 17% in quarter 1 to 4% in quarter 2. The YTD shortfall on revenue has decreased from 17% in quarter 1 to 11% in the second quarter YTD. The Board has expressed concern regarding the progress on the revenue as well as the high level of losses and as a result the Board created a special Ad Hoc Committee to exercise oversight over the implementation of projects designed to address revenue recovery and reduction of losses. The Company has achieved some of the targets while others are behind, but management has assured the Board that they are taking the necessary action to ensure the achievement of the annual targets. New KPI‟s will be implemented during the second quarter after Board approval.



2. EXECUTIVE SUMMARY This report presents the performance of City Power for the mid-year starting from July to December 2014. The report is divided into sections that cover all operational functions of the company in line with the strategic objectives. The sections that are covered by the report include the following:

Performance Monitoring

Service Delivery Report

Financial Management

Human Resources Management

Risk, Assurance and Compliance

Governance

Highlights and Achievements

Below are some of the organisations major highlights, achievements and challenges for the quarter.

Programmes to address Revenue Recovery have been implemented.

99% of information received for smart meter changes has been successful processed through

the interface.

Surplus increase from R631m loss in quarter 1 to a profit of R783m for quarter 2.

Six (6) ICT policies and ICT Governance Framework have been submitted to the Audit Committee and approved by the Board.

Appointment of General Manager: ICT and Business Performance Manager within Engineering Services directorate.

Stats meters at 12 substations now visible in the back-end system for verification of units purchased against actual measurements.

ICT strategy has been developed and ready to be submitted to the Audit Committee for consideration.

Long standing hurdle to resume with projects at Dube Hostel, Alexander and Helen Joseph Hostel now resolved and construction teams are back on site.

100% of pre-planned outages conducted during the second quarter were completed within the required 8 hour target.

A business model under the Jozi@Work programme has been developed and is being tested for robustness. The following Jozi@work initiatives have been identified:

o Spotting of lights (No. of Street Lights ~ 1250) o Vegetation management (No. of MV stations - 9) o Vending of prepaid meters (No. of registered households - 5961) o Maintenance of SWHs (No. of SWHs ~ 3000) o Audit of by-passed prepaid meters

The Board approved the following HR Policies on 19 September 2014: o Knowledge Management Policy. o Employment Equity Policy. o Remuneration, Benefits and Recognition Policy.

The Board also approved the Employment Equity Plan on 19 September 2014.

During the months of August 2014 and September 2014, the Company recruited 258 employees.

The newly recruited employees were formally inducted on 4 – 6 August 2014 and 1 - 3 September 2014, respectively.



Good progress has been made with regards to the upgrade of the Training Centre in line with the plan.

Job Profiles for all jobs (437) were written and approved for the job evaluation and grading exercise Company-wide.

There were 15 HV NPR outages which is below the quarterly target of 19 HV NPR outages.

Target for procurement spend from suppliers that are 50% black owned has been exceeded (13.67% vs. 8%).

Target for procurement spend from suppliers that are 30% black women owned has been exceeded (7.08% vs. 5%).

The Board approved the revised Supply Chain policy on 19 September 2014.

Follow up audits on 2012/13 Auditor General findings were conducted and 91.4% of the

findings were concluded as resolved by management.

Follow up audits on 2013/14 Internal Audit findings were conducted and 84.5% of the findings

were concluded as resolved by management.

Challenges

Challenges Intervention

Surplus before tax being less than budget by R272m.

Several revenue turnaround projects have been initiated to resolve matters relating to billing issues, theft of power, corruption and poor metering performance. The impact of these projects cannot yet be determined.

The high rate of theft and vandalism of infrastructure.

A phased approach has been introduced for the installation of modern security measures. City Power is also investigating other security measures to secure its underground cables and overhead systems. Casting of concrete over cable trenches where cables are regularly stolen has begun. Installation of vibration alarms on transmission lines pylons has commenced. Installation of load centre alarms has commenced. Communication and awareness as well as public engagement is on-going.

The high number of MV outages. Root cause analysis of faults that have occurred are investigated to determine what action needs to be taken and to prevent repeat trips.

Increased non-technical losses affecting revenue.

The following projects have been prioritised as agreed on the Board Ad hoc Committee Priority 1: Clearing of Billing exceptions, Billing of Fixed charges, Billing of installation without Business Partners. Investigate Billing of LPU‟s connected in the past 3 years and Audit and normalise the top 500 customers with dropped consumption on actual readings Normalise LPU customers illegally converted to pre-paid



Challenges Intervention

Obtain technical information for billing audited business unbilled stands

Install meter to invoice ESKOM

Auditing and normalisation of unbilled LPU stands

Non-Vending prepaid meters

Debt impairment exceeding the budget

Collection levels are below the target of 96% (95.04%). Receiving of age analysis on time to calculate the debt provision is still a challenge. This result in a major adjustment at year end.

Risks and Mitigations

Risks Mitigations

High number of unread meters due to lack of access, faulty and incorrect data

Replacement of faulty meters timeously

Data Audit

Theft and vandalism Ensure that there is security on all project sites.

Identify hotspots and improve security with technologies such as monitoring systems and alarms

Public safety and fatalities Illegal connections cause a safety hazard and this risk is being managed by Communications department to educate the public and encourage them to report illegal connections and ensure safe connections.

Group / Division Performance Overview

RETAIL SERVICES (Responsible person Director: Retail)

Highlights and Achievement Revenue from the Eskom / Kelvin (back to back Agreement) amounts to R691m.

Payment level for December 2014 quarter was at 101.32% has exceeded target of 96%

Revenue variance has improved as compared to the 1st quarter from negative 17% to

negative 4% in quarter 2.

99% of information received for smart meter changes has been successful processed

through the interface.

Education campaigns were conducted at Riverpark and Vlakfontein.

Attendance in Riverpark was 823 residences and 744 in Vlakfontein

The door-to-door pre-paid campaigns were conducted following the installation and

commissioning of pre-paid meters in Vlakfontein, Devland, Alexandra, Kanana, Tshepisong

and in Tsutsumani. The number of customers visited was 25 022.

Key customer golf day was successfully hosted, and 166 customers attended both players

and for Gala dinner.

Challenges



Challenges Mitigations

Meter Reading Performance Implementation of Revenue Recovery Project to improve meter reading performance. All unread meters will be prioritised for smart meter conversion. Replacement of faulty AMR meters.

Reduction in Revenue and increase in non-technical losses

Implementation of Revenue Recovery Project to investigate billing reversals affecting revenue, clear all unbilled billing orders, populate all missing billing orders and audit prepaid customers not buying. Auditing of all the unbilled stands and unmetered stands.

Outstanding SAP Reports and Reconciliations reports from CoJ

Escalation of the report requests to the RSSC Executive Director

More constraints on Eskom have resulted in more frequent Load Shedding events

Kelvin has sustained an average of 150MW since Winter 2014

Risks and Mitigations Risks Mitigations

AG Audit Risk Resolving of all the unresolved AG findings by June 2015.

Trends

Increase in non-technical losses.

Declining revenue.

Low Call Centre performance.

Increase in escalated queries.

ENGINEERING SERVICES (Responsible person Director: Engineering Services)

Highlights and Achievement The approved Demand and Acquisition Plan Projects are in implementation. A recovery

plan is in motion for non performing projects.

Fault reporting system tool is being utilised to identify poor performing circuits which will reduce the current SAIDI, CAIDI and SAIFI indices.

Back-to-Basics Programme in Lenasia and Randburg depots underway.

Data collection project in Lenasia and Randburg depots underway.

Outage reduction program underway to prevent repeat trips in all areas.

Stabilising the ICT environment and improving performance of ICT in progress - ES is focusing on the following immediate risks.

o Governance, o Infrastructure and o Business Services

Instituting best practices in asset management (ICT Software and Hardware.



A business model under the Jozi@Work programme has been developed and is being tested for robustness. The following Jozi@work initiatives have been identified:

o Spotting of lights (No. of Street Lights ~ 1250) o Vegetation management (No. of MV stations - 9) o Vending of prepaid meters (No. of registered households - 5961) o Maintenance of SWHs (No. of SWHs ~ 3000) o Audit of by-passed prepaid meters

Challenges Item Challenges Mitigation

1 Inadequate market stimulation prior to project implementation causing project delays

Engineering Services to engage Retail on strategies to stimulate the market on time.

2 Poor contract management With Supply chain‟s support, contract expiration dates must be monitored and the necessary steps taken to enable the business to continue performing without interruptions.

3 Electrification of informal settlements

Seek mandate from Mayoral Committee, do budget re-allocation and approach ED: EISD to secure further funding.

Risks and Mitigations Item Risk Description Mitigation

1 Public injuries and fatalities due to unauthorized access to live equipment

Educate the general public on the dangers of live electrical equipment. Improve security measures at high risk sites.

2 Contractor Non-conformance Project Managers have been tasked to look into non-conformance issues from contractors and take action (issue notices) against non-compliant suppliers.

3 Project processes not automated on SAP.

The team is in discussions to automate processes so as to identify bottlenecks and have a clear view on the department‟s progress.

4 High number and frequency of outages

Ring-fence, isolate and expedite projects directed at plant out of service and network stability.

5 Fraud and corruption. Exercise vigilance in investigating and dealing with any suspected acts of fraud and corruption. Monitor expenditure patterns and scope creep on all contractors and consultants.

Trends Theft and vandalism.

Electricity supply constraints.



ENGINEERING OPERATIONS (Responsible person Director: Engineering Operations)

Highlights and Achievement There were 15 HV NPR outages which is below the quarterly target of 19 NPR outages. The

year to date figure stands at 31 HV NPR outages which is also below the mid-year target of 38 NPR outages.

The ABC conversion project continues to improve the LV outages.

Challenges

Challenges Interventions

1 The high rate of theft and vandalism of infrastructure

A phased approach has been introduced for the installation of modern security measures. City Power is also investigating other security measures to secure its underground cables and overhead systems. Casting of concrete over cable trenches where cables are regularly stolen has begun. Installation of vibration alarms on transmission lines pylons has commenced. Installation of load centre alarms has commenced. Communication and awareness as well as public engagement is on-going.

2 The high number of MV outages

Root cause analysis of faults that have occurred are investigated to determine what action needs to be taken and to prevent repeat trips.

3 The limited SCADA coverage A project has been awarded to install remote terminal units to all substations. Site visits of the installations sites have recently been completed . Installation of RTU's is set to commence in January. Additionally a fibre optical cable project has been compiled and is at the Bid evaluation phase. These combined projects shall ultimately yield 100% SCADA coverage. The Master Station infrastructure has been identified as a risk, and therefore there is currently a specification being compiled to replace the existing Master Station.

4 Faulty and inaccessible domestic meters

The identified inaccessible meters are being converted to Smart meters by Capital Execution.

Risks and Mitigations Engineering Services is currently replacing obsolete low voltage overhead mains with modern

Aerial Bundled Conductor (ABC) to reduce the number of outages associated with this poorly performing infrastructure as well as continuous theft.

Risks Mitigations

1 Infrastructure theft and vandalism.

Phased installation of modern security systems. Laying of concrete over cable trenches where there has been repeated cable theft.



Engagement of the community. Communication and awareness.

2 Obsolete low voltage overhead mains.

Phased replacement program to install Aerial Bundled Conductors.

3 Energy theft in blocks of flats. Regular audits on blocks of flats to ensure that City Power‟s main metering has not been removed.

Trends

The on-going prevalence of infrastructure theft and vandalism continues and this results in unplanned outages, customer dissatisfaction and unsustainable repair or replacement expenditure.

In areas where illegal connections are removed, it is generally found that the illegal connections are re-established the next day.

Cable theft is on-going, the perpetrators seem to know the patterns and the system well enough to continuously obtain access to the cables.

FINANCE (Responsible person Director: Finance)

Highlights and Achievement

Target for procurement spend from suppliers that are 50% black owned has been exceeded (13.67% vs. 8%).

Target for procurement spend from suppliers that are 30% black women owned has been exceeded (7.08% vs. 5%).

Implementation of Impairment methodology on City Power‟s Assets. All vehicles leased from the City were physically verified.

New 5x 650KVA and 5x 1MV Mobile Generators procured and commissioned.

Appointment of one Senior Buyer for Production Commodity.

Reviewed and approval of SCM Policy and Procedure Manuals.

Cable rationalization – Obsolete stock has been identified and set-aside for disposal.

A new cable store has been established in “F” Block. This will improve storage conditions for cable and working conditions for employees.

A trial on eleven contracts showed a 21% increase in service level (materials availability) while reducing the stock-holding by 23%.

Challenges


1 Unfilled vacant positions due to unavailability of funds. Only three Senior buyers to deal with projects.

Additional budget to be made available for filling of vacancies. Utilise external service providers on critical areas. Use GEP staff for lower level positions.

2 Reduction of Asset under construction account in line with City Power‟s Strategic Business Objectives.

Follow up on monthly basis expenditure trend of projects and report to Engineering Services non-movement of expenditure.

3 Funds are limited to operate only Reuven Warehouse to shift system as staff from other warehouses still need to work overtime.

All stores apart from Reuven opex stores will operate on an 8-5 basis with staff deployed on a call-out basis.

4 Equipment such as busses Busses are old and will have to be replaced or




and generators are old and has become very expensive to maintain.

refurbished.

5 Old forklifts need to be replaced in this financial year

Capex Budget has been approved to procure 8 x 8 tons Forklifts.

6 Numerous materials contracts came to an end in the first half of the financial year and are still in the process of renewal.

Ensure contracts are renewed as a matter of urgency.

7 Numerous stock-outs in all warehouses; across a wide variety of materials.

Ensure contracts are renewed as a matter of urgency.

Risks and Mitigations Risk Mitigation

Integration of SAP Asset Management with City Power‟s business processes.

Capture of location of the current financial year additions of Network Assets.

Extend to Phase 2 the SAP Upload exercise to address any gaps in the integration.

Continuation of the GIS Project to include 2014/15 Network Assets Additions.

Warehouse cannot implement shifts at the depots; therefore service delivery and restoration time compromised.

Process to extend depot stores 6 to 6 Monday to Friday is underway.

Risk of overstocking as a result of overdue reservations. Risk of stocking-out as a result of inaccurate stock levels. Risk of stocking-out as a result of not purchasing in time.

On-going communication with user departments. Frequent stock counts and investigation of stock discrepancies. On-going monitoring of consumption and constant communication with buyers.

HUMAN RESOURCES (Responsible person Director: Human Resources)

Highlights and Achievement The Board approved the following HR Policies on 19 September 2014:

o Knowledge Management Policy. o Employment Equity Policy. o Remuneration, Benefits and Recognition Policy.

The Board also approved the Employment Equity Plan on 19 September 2014.

Pay progression was successfully implemented in October 2014.

During the period July 2014 to December 2014, the Company recruited 258 new employees : o 1 x GM: Internal Audit. o 1 x GM: Information & Communication Technology. o 2 x Manager: Field Services (PP). o 1 x Manager: Oil Lab. o 1 x Manager: Business Performance. o 1 x Manager: Asset Management.



o 1 x Manager : Land & Rights o 6 x Team Leader (Metering). o 72 x Electricians (PP). o 13 x Electricians (Metering). o 2 x Executive Support. o 142 x Trade Assistant (PP). o 14 x Warehouse: Stock Issuer. o 1 x Senior Buyer: Commodity Production.

The newly recruited employees were formally inducted on 4 – 6 August 2014 and 1 - 3 September 2014, respectively. Subsequently a pulse check, for new recruits, was also conducted on 18 November 2014. The purpose of the pulse check is to assess the level of integration of the new recruits into their working environment.

HR facilitated the Long Service Awards on 15 September 2014 whereby 111 employees received long service awards.

The Training Centre has been revamped in line with the plan.

Job Profiles for all jobs (437) were written and approved for the job evaluation and grading exercise Company-wide.

HR hosted a successful Career Open Day on 29 September 2014. The Open Day was attended by 120 Grade 10 to 12 learners plus 8 teachers from Forest High and Denver High Schools.

Successful performance bonus pay-out for the 2013/14 financial year to qualifying employees in December 2014.

Challenges

Challenge Intervention

Number of people appointed to act since December 2012.

Application made in new budget.


Risk Mitigation

High vacancy rate (high number of acting appointments)

To make budget available to fill vacancies.

Inability to adjust packages for employees who are below the minimum of their salary bands

To make budget available.

Risk, Assurance and Compliance (Responsible person Director: RAC)

Highlights and Achievement Maintained the number of reportable Occupational Diseases at zero.

Hosted woman in celebrating the 16 Days of Activism day Campaign.

Celebrated a successful Wellness day and commemorated World Aids Day.

Conducted Stress Management training at all City Power Depots.

Achieved a DIFR of 0.35 below the threshold of <1.

Conducted follow up audits on 2012/13 Auditor General findings and 94% of the findings

were concluded as resolved by management.

Conducted further follow up audits on 2013/14 Internal Audit findings and 84.5% of the findings were concluded as resolved by management.

Through the intelligence strategies implemented, four employees working for different contractors were arrested for incidents related to theft & vandalism and a further two hundred and nineteen (219) suspects arrested relating to cable theft and component theft.



We‟ve been experiencing an increasing number of cable theft incidents in and around the Eikenhof are and had a major breakthroughs relating to cable theft in that area:

o Eight (8) suspects arrested in the southern region – operating in the Eikenhof area. o A scrap metal dealer and accomplices identified and arrested for dealing in stolen

goods, case currently in court.

To curb the increasing number of customer break-in by criminals acting as meter readers, we have registered all our meter reading contractors on the security database.

The draft smart metering processes have been documented to enable the system integration and functional alignment to CoJ billing processes. Metering and billing business rules have been reviewed with CoJ and aligned to the smart metering programme.

Completed 12 643 technical meter audits of as part of the smart metering programme.

Audited and analysed 10 725 pre-paid records and verified and updated 5 197 meter and customer details on SAP as part of the pre-paid data clean-up initiative.

Started automation of the current reports using Microsoft Power Pivot to improve data integrity and governance as business intelligent reporting and enforcing data governance and auditability of the performance data.

Designed an approach to Knowledge Management and Governance Framework. The framework details the KM governance processes, policies, procedures & standards, roles and responsibilities, technologies and strategies that need to be implemented and the approach and methodology to implement these technologies and strategies.

Challenges

Ineffective SHEQ Committee structures due to unavailability of staff attributed to Shift System.

Lack of commitment and support from management for SHEQ related issues such as incident investigation reports etc.

There are still a number of Scrap metal dealers buying stolen goods contravening the 2nd

Hands Goods Act.

Corrected and cleaned data not adequately updated on relevant source systems. The establishment of the metering and meter data committee will keep track and ensure that the appropriate data is updated on the relevant systems.

Refused entry to properties and non-disclosure of data by customers for the data

completeness project which led to the physical audit progress being slow. City Power has

made efforts to communicate the importance and benefits of the project to customers‟ via

media (print and radio), City Power web-site and notices; we have also set-up a dedicated

phone-line and email to respond to customer queries and concerns.


Risks Mitigations

1 Filling of vacant positions Expedite Recruitment process.

2 Contractor related incidents Effective Contractor management programmes.

3 Implementation of SANS 16001

and ISO 31000 due to budget cuts

Finance to make budget available. Meetings held

and Finance request forms have been filled and

submitted, awaiting approval from the Director

Finance.



Risks Mitigations

4 Approval of the BIA profiles by

some Directors to implement the

BCP

Follow-up meeting requests.

5 Increased risk for lifestyle diseases

and cardio-vascular incidents

amongst employees due various

factors i.e. ageing workforce

coupled with new risk profile

(shifts), lifestyle disease

prevalence nationally and at

company level.

Behaviour modification through training,

awareness campaigns and more

prevention strategies focusing on lifestyle

diseases.

Introduction of a health promotion

strategy at the in-house canteen.

Encourage regular physical activity i.e. via

in-house gym.

6 Employee financial management Provision Incidents that are not operation.

or task related tend to be on an increase.

i.e trip and fall.

Lifestyle Diseases – the recent wellness

day report reveal Hypertension as the

most prevalent chronic condition amongst

City Power employees of one on one

consultations and financial management

workshops.

Trends

Incidents that are not operation or task related tend to be on an increase. i.e trip and fall.

Lifestyle Diseases – the recent wellness day report reveal Hypertension as the most prevalent chronic condition amongst City Power employees.

Increased number of network related incidents due to illegal connection and theft of electricity.

Increased number of lifestyle diseases (chronic).

Increased number of contractor network related incidents.

3. PERFORMANCE MONITORING

Alignment to Mayoral Priority Implementation Plan (PIP) and Service Delivery Budget Implementation Plan (SDBIP) (Person responsible: All directors for the KPA that relates to them)

COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible

City Power Initiatives

Status Expected Outcomes

Sustainable Human Settlements Resource Sustainability

Customer Accelerated Visible Service Delivery (Demand Plan)

ES Electrification: 1. Bulk supply programs 2. Number of Households electrified

A year-to-date figure of 1 247 has been attained, against target of 1 250. - Stlwetla not yet started (stakeholder engagement and plan for MV line to be outstanding) - Lawley land purchase challenges have halted the project..

Political intervention is required to resolve challenges for the Electrification projects.


Customer Accelerated Visible Service Delivery (Public Lighting)

ES Provision of Public Lights

A year-to-date figure of 569 has been attained, against target of 4 000. The project teams geared up and aggressively rolled out public lights. Major challenges in this category include: • Wayleave process between JRA and City Power • Outstanding

City Power in process of setting up meeting with Eskom to resolve the supply points issue. Engagement ongoing with GIS on a permanent resolution for way leave delays



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Eskom supply points


Customer Accelerated Visible Service Delivery (Demand Plan)

ES Development of Demand Plan

The Demand Plan has been finalized and approved.

Accelerated Visible Service Delivery (eg.100% compliance to the SLA, electrification, PL). Attaining an Unqualified audit in a sustainable manner. Achieving full compliance to NRS 047 and 048 immediately.


Customer Accelerated Visible Service Delivery (Stakeholder Plan)

RS Development of Stakeholder Plan Operationalisation of Customer Services Charter and the Service Level Agreement

Monthly and weekly Visible Service Delivery Forum and Regional Directors Forums are supported.

Accelerated Visible Service Delivery (eg.100% compliance to the SLA, electrification, PL).



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Active Engaged Citizenry SMME and Entrepreneur Development And Support

Customer Developmental Service Delivery (Co-production)

ES Develop Developmental Service Delivery plan

A business model under the Jozi@Work programme has been developed and is being tested for robustness.

Various initiatives have been identified for Jozi@work and are expected to resume after completion of the robustness test.

Financial Resilience and Sustainability, Smart City Resource Sustainability

Financial Revenue War Plan

ES Improve metering data accuracy and completeness Deployment of statistical and check metering Deployment of smart meters Deployment of prepaid meters, Remote Access Terminal system (RATS) and protective structures Conversion of LPU to AMR

Data Audits completed to date are: 96 480 Of these 19 145 are vacant; 6 411 are pre-paid updated on SAP; 4 000 LPU and 66 924 are domestic conventional meters. Project has been incorporated in the smart meter roll-out. Meter Data Management System has been installed and is currently being used for LPU and domestic smart meter customers. The numbers will increase with the roll-out of meters. Prepaid Meters will also be migrated to MDMS after finalisation of prepaid data standards. 5 442 Protective structures have been installed as per the

Achieve 90% data accuracy by 2015. Attaining an unqualified audit in a sustainable manner. Achieving 100% payment level for key and LPU customer by June 2015. Reduce losses to 10% by 2015. Achieving 98% meter reading by June 2015. (100% Compliance to the by-law).



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



meter policy. Meters are being commissioned as the project progresses.

Resource Sustainability Green Economy

Internal Asset Management (Energy Plan)

RS Development of Energy Plan Introduction of Domestic Time of Use (TOU) and Green Tariffs by 2015 Use of distribution system costs

Energy Plan has been approved, Domestic TOU is in place, PV supporting tariff is under NERSA consideration.

2013/14: Energy Plan

Resource Sustainability Green Economy

Internal Asset Management (Energy Efficiency Programs)

ES Deployment of energy efficient technologies e.g. induction lighting, CFLs, and piloting LEDs Retrofitting of Municipal owned buildings Assessment of privately owned buildings

Energy efficiency lighting project is currently at planning phase. The Building Retrofit project is at tender stage. The Low pressure solar water heater program is currently underway The Landfill Gas, Up market solar water geysers, Conversion of

Reduce losses to 10% by December 2015. Achieving 98% meter reading by June 2015. (100% Compliance to the by-law). Achieving 100% payment level for key and LPU customer by June 2015. Achieving 90% data accuracy by 2015. Installing 110 000 SWH



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Landfill Gas Electricity Generation at Robinson Deep and Goudkoppies Roll out underway focusing on customers consuming less the 1000kWh/ month. Up market solar water geysers program Enhancement of PV System efficiencies Displacement of electric stove Conversion of City Power open cycle gas turbines and Establishment of Co-gen precincts

gas turbine projects and Establishment of Co-generation precincts are all at the feasibility stage.

by December 2016. Achieving full compliance to NRS 047 and 048 immediately. Accelerated Visible Service Delivery (eg.100% compliance to the SLA, electrification, PL). Innovative Product Pricing (Introduction of Domestic Time of Use and Green Tariffs) by 2015.



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Smart City Green Economy Resource Sustainability

Internal Asset Management (Smart Grid)

EO and ES Development of Smart Grid Plan Ripple control and smart meters AMI

The smart grid plan and terms of references were completed and signed off in June.

Reduce losses to 10% by December 2015. Achieving 98% meter reading by June 2015. (100% Compliance to the by-law). Achieving 100% payment level for key and LPU customer by June 2015. Achieving 90% data accuracy by 2015. Achieving full compliance to NRS 047 and 048 immediately. Accelerated Visible Service Delivery (eg.100% compliance to the SLA, electrification, PL).


Internal Asset Management (Data and Process Management)

RAC Improve network data accuracy and completeness Review and implement core and support value chains

Developed a web based tool that will be used to update network data remotely through –out the business. Awaiting ICT to provide the infrastructure to host the tool so that it can be rolled-out to the business. Core value chains developed and value chain owners have been appointed.

Achieve 90% data accuracy by 2015. Accelerated Visible Service Delivery (eg.100% compliance to the SLA, electrification, PL).



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible




Internal Asset Management Plan (Condition Monitoring)

ES Implementation of Condition Monitoring system

The assessment of substation equipment is underway and the next stage will be to assess other network assets such as cables, conductors, transformers, medium voltage switchgear as well as protection and control equipment.

Achieving 90:10 Planned: Unplanned by December 2015.

Resource Sustainability

Internal Risk Management

RAC Review Business Continuity (BCP) and Disaster Recovery Plan (DRM)

Consultants have been appointed to review the current BCP & DRM plans and implement the recommendations- the first draft report will be completed by end of November.

Business Continuity and Disaster Recovery Plan .


Learning & Growth

LLF Agreement

HR Allowances (Travel, Cellphone, Data Card, Hot Skills)

Travel / Cellphone / Data Card Allowance – HR developed the qualifying criteria and communicated to the business to ensure common understanding Hot skills Allowance was discontinued on 1 June 2013 in line with the LLF Agreement

Standardized and uniform benefits.



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Structural Re-Alignment

All structures - related deliverables were achieved as mapped in the HR Journey Map.

Re-aligned organisational structures which are open / available to all staff and the public.

Acting Allowance An addendum to the acting provisions, clarifying the qualifying periods, was signed by all parties in February 2014

Revised and updated acting provisions.

50th Percentile / Pay

Progression Pay Progression was successfully implemented in October 2014.

To give financial acknowledgement to staff for performance, years of service and qualification improvement.

Essential Services / Rules of Engagement

A decision was taken at the LLF and HR Steercom that the Rules of Engagement and the Essential Services Agreement be signed in tandem. An Agreement has been drafted and all parties are in agreement with the context. The only outstanding matter is around the agreement on essential services numbers.

To have essential service staff available in event of labour unrest.



COJ Key Priorities

BSC Perspective

Intervention Name

Group Responsible



Shift Policy / Overtime

A 2 x 12 shift system was implemented on 1 February 2014.

Achieving full compliance to NRS 047 and 048 immediately.

Annual Leave Leave plans are drawn up by all Groups for employees with accumulated leave.

Full compliance with our Conditions of Service, depletion of accumulated leave and minimal encashment of refused leave due to the hard drive for employees to take their leave.

Gratuity / Performance Management

The Integrated Performance Management Policy (IPMP) was approved by the Board on 24 February 2014

Growth and Development Strategy-Integrated Development Plan Report (IDP) (Person responsible: All directors for the KPA that relates to them)

Restoration Time Actual Performance – Quarter 2

Actual Performance - YTD NERSA Target

Within 1,5 hours 10.2% 15.0% 30%

Within 3,5 hours 45.2% 48.1% 60%

Within 7,5 hours 80.8% 80.4% 90%

Within 24 hours 95.7% 95.9% 98%

In the second quarter reporting period City Power failed to meet any of the outage restoration standards specified in NRS 048. These refer to the percentage of customers whose power should be restored in the four specified periods of 1.5, 3.5, 7.5 and 24 hours. The first category of 30% customers restored within a 1.5 hour window has consistently remained a challenge due to the electrical networks being predominantly of an underground design and, also, the traffic volumes, in an urban environment, making travel to fault locations for repair crews difficult. However, the attainment of the other three categories has generally been achieved in the past but this has now been made a more serious challenge with the recent return of load shedding. Faults which occur during periods of load shedding are often attributed incorrectly to the

Target Actual Target Actual Target Actual

Improve

Network

performance

and quality of

supply

Improved

restoration

times, reduction

in unplanned

Outages,

improved

network health

CAIDI Minutes 280.00 70.00 355.42 70.00 370.69 280.00 363.29

CAIFI Number 9.89 5.650 2.22 5.65 1.99 5.65 3.09

SAIDI Minutes 1 337 334.00 417.55 334 463.21 1 337 881.23

SAIFI Number 5 1.20 1.17 1 1.25 5 2.43

Planned: Unplanned

Maintenance% 70.00 70.00 72.78 70.00 68.75 70.00 69.51

HV Outages: NPR Number 39.00 19.50 16.00 19.50 15.00 39.00 31.00

Maintain High Quality

of Service Levels

(NRS 047 Index %)

% 86.05 86.05 59.67 86.05 57.15 86.05 57.49

Maintain High Quality

of Supply Levels

(NRS 048 Index %)

% 33.32 95.00 98.34 95.00 98.89 95.00 98.33

PIPImpact on

CommunityKPI Unit

CP IDP

ProgrammeTotal Target

Sustainable

Human

Settlements

Smart City

Resource

Sustainability

Investment

attraction,

retention and

expansion

Green

Economy

Quarter 1 Quarter 2 YTD



mandatory supply interruption and are not immediately dispatched. Only when power is restored at the end of the load shedding period, and certain consumers still remain off, is the fault detected and resources dispatched. This causes undue delays in the restoration process and increased restoration times. In addition a significant number of technical resources, normally assigned to attending to outages, have been temporarily seconded to the Revenue Recovery Project aimed at improving the company‟s metering performance. This has also contributed to increased restoration times due to a lack of experienced operators and repair crews to attend to supply interruptions. In future it is hoped that the seconded staff will be gradually returned to their normal duties and restoration times will improve. Improvements to the dispatching process are also to be introduced shortly in the form of MDT technology which will optimise the communication of, and reporting on, fault data – again aimed at improving outage restoration performance.

Query Management There is non-compliance with NRS 047 on query resolution. The total number of queries received as between July and December ‟14 was 12 777 and only 3 717 was resolved. CP will continue with the engagements with RSSC to improve the performance. Call Centre Requirement Retail Services will continue with the call centre performance forum i.e. RSSC, Call Centre Management, and Dispatch to address other issues that may contribute to the non-compliance. Call Centre standards have not been met due to

• High volume of calls • Planned and unplanned outages that went beyond the turnaround times • Service tickets not being dispatched by City Power, mostly the Randburg and the Hursthill areas in the first quarter • Abandonment rate target not achieved due to customers dropping calls after listening to IVR message recording

Planned vs. unplanned maintenance target was just met with a performance of 69.5% against a target of 70%.



A total of 569 public lights were commissioned to date, 439 we completed in the second quarter. The mid-year target for public lights is 1 500. The Solar Water Heater programme has seen vast improvement in the second quarter. 5 433 Solar water heating units were installed against mid-year target of 3 500. A total of 1 247 connections against a mid-year target of 1 250 have been completed during the reporting period.

Overall meter reading performance has increased from 66.39% in the 1

st quarter to 71.12% in the 2

nd quarter%

Different metering categories movements are as follows from July to December 2014:


Refurbishment

of ageing

infrastructure

Improved

restoration

times, reduction

in unplanned

Outages,

improved

network health

Average age of

infrastructure (HV)Years 39 39 39 39 31 39 31

Electrification Number 2 000 500 650 750 597 1 250 1 247

Provision of public

LightsNumber 1 500 500 130 1 000 439 1 500 569

Improve After Diversity

Maximum DemandKvA 0.3 0.3 0.0 0.3 0.0 0.3 0.0

Improve Energy Mix

(MW)% Proj Proj 0.00 Proj 0.00 Proj 0.00

Solar Water Heaters

Installed Number 3 500 500 208 3 000 5 225 3 500 5 433

Reduction in Green

House Gases% - - 0.00 - 0.00 - 0.00

Quarter 1 Quarter 2 YTD KPI

Sustainable

Human

Settlements

Smart City

Resource

Sustainability

Investment

attraction,

retention and

expansion

Green

Economy

Unit Total Target

Expansion and

Strengthening

of Network

More people

with access to

electricity,

Demand Side

Management

Climate Change

& Energy

Diversification

Impact on

CommunityPIP

CP IDP

Programme


Payment Levels % 96.00 96.00 89.62 96.00 101.32 96.00 95.04

Meter Reading

performance% 95.75 96.00 66.39 96.00 71.12 96.00 71.12

Meter Roll Out Number 110 000 25 000 4 447 25 000 11 349 50 000 15 796

Losses (Technical/ &

Non-Technical)% 30.73 12.12 36.74 17.30 19.07 13.50 28.78

% of ESP customers

with FBE provided % 97.00 97.00 49.81 97.00 100.00 97.00 100.00

Revenue step

change

programme

Relief in Tariffs,

Smart City,

reduction in

accounted for

electricity

PIPCP IDP

Programme

Impact on

CommunityTotal Target

Quarter 1 Quarter 2 YTD KPI Unit

Sustainable

Human

Settlements

Active

engaged

citizenry

Resource

Sustainability



LPU AMR from 69.27% to 68.88%

Domestic AMR from 43.39% to 77.16%

Manually read Domestic from 61.79% to 70.20%

Manually LPU reads from 48.08% to 54.28% Losses

Prepaid customers that have not bought electricity are 115 727 in the last in six months. o Facilitate the resolution of Low consumption report.

Connected customers not billed and installations illegally converted to prepaid. o Implementation of Revenue Recovery project. o Finalise the revenue audit bid.

Under metering on LPU customers, especially Key Customers. o Use the customer reading to estimate consumption. o Investigate installations and correct metering as part of Revenue Recovery Project. o Calculate revenue accrual on accounts which did not complete billing. o Investigate system changes resulting to high revenue decline, i.e. tariff changes, billing factors, etc.

Declining numbers of accounts invoiced. o Analyse the population and action the variance. o Investigate meters removed with no new meter installed. o Investigate missing meter reading orders.

YTD

Variance

Sept 2014

Plan (YTD)

Dec 2014

Actual

(YTD)

Dec 2014

Q2

Plan

Q2

Actual

Q2

Variance

LOSSES -24.58% 13.50% 28.78% 13.50% 19.07% -5.57%

Technical 9.00% 9.00% 9.00% 9.00% 9.00% 0.00%

Non-Technical -15.58% 4.50% 19.78% 4.50% 10.07% -5.57%



The Satisfaction performance is based on the last financial years Survey; new Customer Satisfaction Survey will be conducted in the last quarter.


EPWP Number 1 500 750 601 750 463 1 500 1 064

50% black owned

companies% 5.00 8.00 13.13 8.00 14.57 8.00 13.67

30% black woman

owned company% 8.00 5.00 6.84 5.00 7.50 5.00 7.08

Customer / stakeholder

satisfaction index% 65.00 65.00 66.00 65.00 66.00 65.00 66.00

Filling of vacancies

aligned to agreed

Affirmative Action (AA)

targets

% 85.00 85.00 90.80 85.00 90.87 85.00 90.87


aligned to agreed

Gender Equity (GE)

targets

% 24.00 24.00 25.45 24.00 25.45 24.00 25.45


aligned to agreed

People with Disabilities

(PWD) targets

% 2.00 2.00 2.46 2.00 2.36 2.00 2.36

DIFR Ratio 1.00 1.00 0.54 1.00 0.35 1.00 0.35

ISO accreditation Audit report3 = Unqualif ied Audit

report

3 = Unqualif ied

Audit reportNot Started

3 =

Unqualif ied

Audit report

Not Started

3 =

Unqualif ied

Audit report

Not Started

Unqualified Audit Audit report 3 3

3 =

Unqualif ied

audit w ith

matters of

emphasis

3

3 =

Unqualif ied

audit w ith

matters of

emphasis

3

3 =

Unqualif ied

audit w ith

matters of

emphasis

YTD Total Target

Quarter 1 Quarter 2PIP

CP IDP

Programme

Impact on

CommunityKPI Unit

Financial

resilience and

sustainability

Smart City

Resource

Sustainability

Improve

Customer

Centricity and

people

development

Development

Service Delivery

Improved

services

Continuous

Improvement of

the business

Improved

services



Balanced Scorecard with Key Performance Areas and Indicators (Responsible: All directors for the KPA that relates to them)

The City Power Board will be reviewing the company stretch targets in October 2014 and this will impact the second quarter report. Financial Perspective

The gross profit (loss) margin of 25.29% is below the target of 33.55%, as a result of the increase in bulk purchases, debt impairment and general

expenses as well as a decrease in revenue. Service charges for the quarter are less than budget by R124m and R779m less than budget for YTD due to increase in losses.

Revenue Target not met. o Investigate billing reversals affecting revenue, o Clear all unbilled billing orders, o Populate all missing billing orders

2013/14

Actual Baseline Target Actual Target Actual Target Actual

Optimise Profit

Margin

Gross Profit %:

Sales/Cost of

Sales

Gross Profit %:

Sales/Cost of Sales % 29.01 27.10 7.01 41.74 45.38 33.55 25.29

Sustainable Value

Creation

Improve Net

Cash Generated

from Operating

Activities

Improve Net Cash

Generated from

Operating Activities

Rbn 2.24 2.50 0.51 2.33 1.55 2.29 1.55

Reduce Losses Total Losses %Reduce Total

Losses% 30.73 12.12 36.74 17.30 19.07 13.50 28.78

Optimise Capex

Spend

Total Capex

Spend as % of

Targeted Capex

Spend

Total Capex Spend

as % of Targeted

Capex Spend

% 100.00 25 90.97 49.98 97.39 50 95.03

PIP Align-ment Value Propositions Key Performance

Area

Unit

Financial

Resilience and

Sustainability

Key Performance

Indicator

Quarter 1 Quarter 2 Year to Date



o Audit prepaid customers not buying. o Auditing of all the unbilled stands and unmetered stands. o Investigate system changes resulting to high revenue decline, i.e. tariff changes, billing factors, etc.

Declining numbers of accounts invoiced. o Analyse the population and action the variance. o Investigate meters removed with no new meter installed.



Budget Actual Variance Budget Actual Variance

Units purchased A 6 451 560 609 6 482 240 157 30 679 548

Less: Standard Technical losses 9.00% 580 640 455 583 401 614 2 761 159 9.00% 9.00% 0.00%

Less: Standard Non-technical losses 4.50% 290 320 227 291 700 807 1 380 580 4.50% 4.50% 0.00%

Less: Street lights and free basic electricity 0.00% - 85 760 818 85 760 818 0.00% 1.32% -1.32%

Less: Total Standard losses 13.50% 870 960 682 960 863 239 89 902 557 13.50% 14.82% -1.32%

Available for sale B 5 580 599 927 5 521 376 918 -59 223 009

Less: Non-standard non-technical losses C - 905 047 529 905 047 529 0.00% 13.96% -13.96%

Unit sales D 5 580 599 927 4 616 329 389 -964 270 538 13.50% 28.78% -15.28%

Budget Actual Variance

Service charge revenue E 6 936 119 820 6 156 849 250 -779 270 570

Unit sales price per Kilowatt Hour F 1.24 1.33

Purchase Cost G 4 932 992 329 4 995 378 739 -62 386 410

Unit purchase price per Kilowatt Hour H 0.76 0.77

Gross margin I 28.88% 18.86%

REVENUE

Increase in purchases 28 085 146

Increase in standard technical losses -2 527 663

Increase in standard non-technical losses -1 263 832

Streetpole lights and free basic not budgetted -106 178 718

Increase in standard losses -109 970 213

Additional non-technical losses -1 121 774 202

Volume loss -1 203 659 269

Price gain 424 388 699

Total revenue variance -779 270 570

COST OF SALES

Volume variance -23 458 196

Price variance -38 928 213

Total cost of sales variance -62 386 410

Kilowatt Hours

FINANCE VARIANCE ANALYSIS

Rands

CITY POWER

REVENUE VARIANCE ANALYSES

MONTH

December 2014

KILOWATT HOUR VARIANCE ANALYSIS Total year to date losses %Total - year to date

Total - year to date



Customer Perspective

2013/14


Active Engaged

Citizenry

Improved Customer

/ Stakeholder

Experience

Improve

Customer /

Stakeholder

Satisfaction

Satisfaction Index

%% 72.50 73.70 72.82 73.70 74.30 73.70 73.56

Maintain High

Quality of Service

Levels

(NRS 047 Index %)

% 80.69 86.05 59.67 86.05 57.15 86.05 57.49

Maintain High

Quality of Supply

Levels

(NRS 048 Index %)

% 151.14 95.00 98.34 95.00 98.89 95.00 98.33

Value Propositions Key Performance

Area

Quarter 1 Quarter 2UnitPIP Align-ment Year to DateKey Performance

Indicator

Maintain High

Quality of Service

Levels

Quality Supply and

Availability

Sustainable

Human

Settlements



Internal Perspective

Learning and Growth

On 19 September 2014, the Board approved the Employment Equity Plan. This plan will ensure that the filling of vacancies is aligned to the agreed Employment Equity (Affirmative Action, Gender Equity and People with Disabilities) targets.

To ensure alignment to performance management, relevant training interventions were facilitated by internal HR staff.

2013/14


Resource

Sustainability

Manage Core Value

Chains

Monitor and

Improve

Compliance and

Assurance

Compliance and

Assurance Index Status 1.5 3.0 2.0 3.0 2.0 3.0 2.0

Year to DateQuarter 1 Quarter 2Key Performance

Indicator


Area

PIP Align-ment Unit

2013/14


Resource

Sustainability

High Performing

Teams

Improve Team

Performance

High Performance

Team Index% 58.5 65.5 80.4 65.5 55.2 65.5 66.1

Year to DateQuarter 1 Quarter 2Key Performance

Indicator


Area

PIP Align-ment Unit



4. SERVICE DELIVERY REPORT

Analysis of the Master Capital Programme (Responsible person Director: Engineering Services)

The original approved City Power Capital budget for the 2014/15 financial year is R2,2bn. This approved budget is inclusive of R891m worth of loans, R761m own funding, R338m DSM funding, and the remaining R232m is made up of grants and public contributions. The year to date expenditure as at Quarter 2 is as shown in the table below: :

Project Detail Original

Annual Budget Budget for Quarter 2

Actual for Quarter 2

Revised Budget to date

Expenditure to date

Variance to date

Full year Variance

Plant and Machinery 7,250 2,852 466 4,503 280 6,970 186

Telecommunication 15,000 5,901 0 9,317 15,000 -

Fire & Security 30,000 11,801 2,132 18,634 2,132 27,868 -

Scada 10,000 3,934 7,003 6,211 7,003 2,997 -

Protection 27,000 10,621 111 16,770 143 26,857 -32

Network Development 8,000 3,147 5,953 4,969 6,352 1,648 -399

Computer Software 42,392 16,676 24,944 26,331 28,290 14,102 -3,346

Public Lighting 30,000 11,801 9,320 18,634 11,803 18,197 -2,483

Service Connections 157,115 61,806 16,243 97,589 31,346 125,769 -15,103

Refurbish of Bulk Infrastructure 823,226 323,842 125,946 511,329 209,534 613,692

-83,588

Electrification 121,000 47,599 5,925 75,157 22,033 98,967 -16,108

Furniture 888 349 726 551 889 -1 -163

Building Alterations/ Construction 10,085 3,967 2,196 6,264 4,127 5,958

-1,931

Meters 741,473 291,682 111,820 460,550 322,302 419,171 -210,482

Tools and Loose Gear 4,744 1,866 1,595 2,947 3,251 1,493 -1,656

Upgrading of Electrical Network 191,556 75,356 26,048 118,981 146,548 45,008

-120,500

Office Equipment/Computers 2,034 800 745 1,263 4,232 -2,199

-3,487

Load Management 0 0 0 0 0 -

Insurance 0 0 2,746 0 3,956 -3,956 -1,210

-257,000 -257,000

TOTAL (R’s) 2,221,762 874,000 343,919 1,380,000 547,222 1,674,540 -460,303



The expenditure for the quarter amounted to R344m compared to the quarterly budget of R874m. The

year to date expenditure amounted to R547m compared to the year to date budget of R1,4bn. The first

month and half of the first quarter was mainly taken up by finalising the project implementation plans for

all new projects, compiling the acquisition plan for sourcing of all project services and materials as well

as commencing with procurement processes for some of the projects. The benefits of the planning and

preparations that were undertaken in the first quarter and the second quarter will be realised in the third

quarter and beyond.

The continuous weekly monitoring of the programme implementation will result in prompt action in

addressing any delays and implementing a project recovery plan where resource will be reassigned or

reallocated to fast track all projects activities. Project Managers have been tasked with the assessment

of all projects from planning to execution. A comprehensive report will be submitted for each project on

15th January 2015 to enable the department to strategize in order to reach set targets.

The graph below further illustrates progress of CAPEX performance by project category:

Actual vs Projections

All projects have forecasts for expenditure and progress. These will be used to report and track

progress in order to ensure successful execution of the capital programme. The graph below depicts

the recovery path in expenditure. The figures shown are based on individual projects which are then



rolled up to categories. The graph below indicates budget loaded, actual spend against the base

projections and the variance between Actual and Budget:

Performance against Projections

Capital Expenditure Details

CONTROLLABLE AND NON-CONTROLLABLE CAPEX The expenditure for the second quarter on Controllable capital projects, which are projects funded from COJ loans, DSM levy, Grant funding, Own cash and Adopt a light funding amounted to R319m compared to the quarterly budget of R823m which is R505m below the target as a result of the execution plans and acquisition plans being finalised while some of the projects had to go out on tender to start the procurement process. A noticeable expenditure recovery will be realised in the third quarter. The non-controllable capital projects are projects which are funded by public contributions. The expenditure for the quarter amounted to R25m compared to the quarterly budget of R50m and this reflects a negative variance of R25m as a result of low levels of service connection applications.



Controllable and non-controllable spend are jointly funding two common categories – Public Lighting and Refurbishment of Bulk Infrastructure.

92%

8%

Expenditure to date as % of Controllable vs non-controllable spend

Controllable

Non-controllable

92% 8%

Non-Controllable Expenditure to Date Breakdown

Non - Controllable

Capex CategoriesYTD Actual

Electrification R -

Public Lighting R 753

Electrical Infrastructure R -

Service Connections R 31,346

Township Reticulation R 394

Refurbish of Bulk Infrastructure R 5,481

Insurance R 3,956

TOTAL R 41,930



As shown below, the Public Lighting spend is split as 93.62% and 6.38% between controllable & non-controllable funding sources respectively:

Total

Budget

Actual

Spend

Actual

Spend -

Controllable

Portion

Actual

Spend - Non

Controllable

Portion

Controllable Non

Controllable

Public Lighting R 30,000 R 11,803 R 11,050 R 753 93.62% 6.38%

As shown below, the Refurbishment of Bulk Infrastructure spend is split as 97.38% and 2.62% between controllable & non-controllable funding sources respectively:

Total

Budget

Actual

Spend

Actual

Spend -

Controllable

Portion

Actual

Spend - Non

Controllable

Portion

Controllable Non

Controllable

Refurb of Bulk

Infrastructure R 823,226 R 209,535 R 204,054 R 5,481 97.38% 2.62%

TOTAL BUDGET (Rands) 30,000R

YTD SPEND (Rands) 11,803R

CAPEX FUNDING SPLIT 93.62% 6.38%

PUBLIC LIGHTING

TOTAL BUDGET (Rands) 823,226R

YTD SPEND (Rands) 209,535R

CAPEX FUNDING SPLIT97.38% 2.62%

REFURB OF BULK INFRASTRUCTURE



OVERVIEW OF CAPEX INITIATIVES

Project Category Description

Information Technology Stabilizing the ICT environment and improving performance of ICT in progress - ES is focusing on the following immediate risks o Governance, o Infrastructure and o Business Services

Capital Execution Pisys This tool has been developed to assist with the monitoring and control of the Engineering Services capital projects from initiation to completion. It is functional and used on a daily to monitor performance of the capital programmes. Benefits are realized because an overall view of financials, physicals are visible to management as and when required. Capital Performance As a result of falling behind on the capital expenditure for the 2014/15 FY, Capital performance is reviewed on weekly basis with major focus on the recovery plan. This will enable and assist the department to catch up on the delays experienced in the first term. This is done with emphasis on the quality of work done and realizing value for money. Streamlining with SCM Continuous engagements are taking place with supply chain personnel to address and accelerate all the outstanding procurement challenges that have direct impact on current budget's performance. This incorporates closing out bids, evaluation, adjudication and finalization of internal auditing process thus enabling start of project execution.

Technology Technology has set up a forum where suppliers and City Power engage on specific challenges. So far one engagement forum discussing theft and vandalism has taken place. Solutions to be derived from these forums are long term therefore forums should be held once every six months to ensure that issues raised are given the consideration required.

Plant Conditioning Monitoring (PCM)

Condition based maintenance is effective and prevents expensive equipment failures where CAPEX budget would be required to replace the failed equipment. It is cheaper to prevent a failure than to replace the equipment after a failure as extensive damage could be caused. The quality of supply to customers is also improved as outages are reduced when failures are prevented. Plant Condition Monitoring department is responsible to produce the maintenance plans for City Power, these plans have previously only been time based. The new maintenance plans are now condition based. The department now performs regular online diagnostic site tests to find partial discharge. When partial discharge is found corrective work orders are created, the root cause is then identify and repairs are done as planned maintenance. This ensures that we don‟t have a failure and unplanned maintenance.



Funding claims

Project Detail (By

Project) Quarter 1 Quarter 2 TOTAL

R'000 R'000 R'000

Electrification

1,931

1,123

3,054

Meters loans

8,451

11,547

19,998

Refurbish of bulk

infrastructure -

loans

-

1,406

1,406

Upgrade of network

loans

1,445

355

1,800

TOTAL

11,827

14,431

26,258

Capex claims are claims done on the loans granted by COJ to City Power as we spend on the loan funding. The Capex claims for the second quarter amounted to R14 million. The tables below indicate some of the major projects undertaken during the first half of the year under review.

Bulk Infrastructure

Expanded Public Works Programme (EPWP)

One of the City Power strategies in addressing unemployment and ensuring maximization of job creation has always been to minimize the use of excavating machinery and only use manual labour on all our CAPEX (Capital Expenditure) projects. During project implementation phase, City Power approaches the political heads (Councillors) in the area or political wards where these projects are being implemented.

Project description

Start date

Completion

/completed

date

Capex

budget

Capex

actual

%

completion

88/11kV Cydna Substation

(Double Busbar) January 2013 March 2015 65 000 000 805 339 8%

132/11kV Longlake Substation,

132kV Lines and Cable August 2013 June 2015 54 200 000 - 2%

88kV Lufhereng Substation September

2013 June 2015 49 620 000 - 1%

88/11kV Sentraal Transformer September

2013

December

2013 150 000 - 1%



A list of candidates is therefore submitted to City Power‟s contractors as part of employment and selection process. The successful candidates are then temporarily employed by the contractors who give on job training and report on monthly basis as part of City Power‟s EPWP contribution. Report on the Expanded Public Works Programme To date a total of 1 064 jobs were created, 463 jobs were created in the second quarter. Indicated below per project;

Description

Men Women Disable Men &

Women

Total no of people

18-35 Yrs 36-older

18-35 Yrs

36-older

18-35 Yrs 36-older

Tshepisong Metering 18 18 16 20 0 0 72

TshepisongElectrification 6 28 6 4 0 0 44

Smart meters 172 0 44 0 0 0 216

Dube 83 20 27 15 0 0 145

Fairmount 36 6 0 0 0 0 42

Orange grove 10 6 0 0 0 0 16

Vlakfontein 35 20 25 10 0 0 90

Leratong 8 2 6 4 0 0 20

Obsertory Substation 12 6 0 0 0 0 18

Lufhereng substation 20 50 20 5 0 0 95

Elias Motsoaledi 6 6 2 0 0 0 14

R 558 42 30 9 12 0 0 93

Sundowner 43 29 7 14 0 0 93

SWH 30 8 3 4 0 0 45

Nirvana substation 36 3 2 7 0 0 48

Radio Kop 11 1 1 0 0 0 13

1 064

Revenue Recovery Project The Mayoral Committee has given City Power a fixed time line to eradicate the performance issues pertaining to revenue, recovery of revenue, reduction of losses, recovery of losses and meter reading performance. City Power has created a special ADHOC Committee - Revenue Recovery Project (RRP), to focus on the resolution of these issues. Three senior staff members, namely, the Director Engineering Services, Director Retail and the Strategic Executive in the Office of the MD have been appointed to the project for 6 months ending 10 July 2015.



The project has been mandated to achieve the following goals:

Meter Reading Performance

o LPU

95% meter reading by 28 Feb 2015

98% meter reading by 30 June 2015

o Domestic

90% meter reading by 28 Feb 2015

95% meter reading by 30 June 2015

Revenue Improvement

o Achieve the 2014/15 budget’s revenue target

Revenue Recovery

o Achieve a recovery of at least 70% of historical (last 3 years) lost revenue by 30 June

2015

o Identify the losses incurred in the last 3 years

o Create month to month targets to recover the above

Reduction of Distribution Losses

o Reduce distribution losses to 13.5% by 30 June 2015 (Non-technical losses to 4.5%)

Accurate Billing

o LPU

95% accurate billing by 28 Feb 2015

98% accurate billing by 30 June 2015

o Domestic

90% accurate billing by 28 Feb 2015

Revenue Recovery

• Variance decrease from R655m in quarter to R124m in quarter 2.

• LPU variance decreased with R468m, from negative variance of R447m to R21m positive in

the second quarter

• Based on the LPU corrected to date Revenue Recovery Projected is R436m in the third quarter

• Fourth Quarter revenue projections will be finalised after Revenue figures for January 2015 are

received on meters actioned in January 2015,

YTD Variance

Sept 2014

('000)

Q2

Budget ('000)

Q2

Actual ('000)

Q2

Variance

('000)

YTD Variance

Dec 2014 ('000)

REVENUE

Prepaid -1 491 152 834 162 451 9 617 8 126

Domestic -133 069 947 572 846 861 -100 711 -233 780

Business -73 860 305 669 251 108 -54 560 -128 420

LPU -447 075 1 650 704 1 672 158 21 454 -425 621

Advertising signs 0 0 424 424 424

-655 494 3 056 779 2 933 003 -123 777 -779 271



Meter reading performance

Improvement in Domestic AMR & Manual meter readings is due to system updates done in

October and November 2014

o Variance decrease from 34.95% to 27.67% for Domestic AMR

o Variance decrease from 32.74% to 24.2% for Domestic manual readings

Interventions addressing meter readings will be started late February 2015

Project – Domestic AMR

Itron Smart Meters (33 130) - Meter Reading Performance

o Improved from 80% in September to 88,28% in December 2014

Rubbytad Automated Meters (11 641) - Meter Reading Performance

o Performance in stagnant from 48,56% to 50,26 in September and December

2014,

Hefcom Automated Meters (718) – Meter Reading Performance

o Performance is stagnant from 0,19% to 0% in September and December 2014

YTD Variance

Sept 2014

Plan (YTD)

Dec 2014

Actual (YTD)

Dec 2014

Q2

Plan

Q2

Actual

Q2

Variance

LPU

- AMR -29.31% 99% 69.70% 99% 69.71% -29.29%

- MANUAL -46.50% 99% 52.67% 99% 53.15% -45.85%

DOMESTIC

- AMR -34.95% 95% 65.42% 95% 67.33% -27.67%

- MANUAL -32.74% 95% 64.79% 95% 70.80% -24.20%



Unread meters

Total meters not read dropped by 17 102

o System updates of 22 029 over the second quarter

Faulty and Inaccessible meters contributes 69,77% of the unread meters in the second quarter which is an increase from 58,39% in the first quarter.

o Project targets for February is to address faulty meters, inaccessible and system updates.

Of the 67 009, there are 39 419 meters which failed the by-law of which 3 642 are part of the meters not read for more than 18 months and are part of last FY AG report, 8 652 meters were not part of the September 2014 baseline for the Project RRP.

System Update – Interface



To date 51,484 meters have been updated on SAP

Meter update tracking from installation to SAP system update can still not be done.

Development in place to upgrade the system

There are approximately 9000 meters being confirmed as changed in the field not on the interface.

Infrastructure Maintenance (Responsible person Director: Engineering Operations)

Power Outage Management

An outage is defined as a complete loss of electricity supply and arises due to a variety of reasons some of which are outlined below:

Network performance related (NPR) e.g. overloading, cable faults, equipment failure etc.

External causes which are mainly due to third party activities e.g. tampering, theft, damage by civil contractors etc.

The duration and frequency of outages impact customers differently depending on the type of consumer (domestic, commercial, industrial), therefore, interruptions need to be properly managed as they are an inconvenience and sometimes lead to huge financial losses to customers. As a result, the provision of electricity within the City is closely monitored to ensure that the quality of supply (QoS) provided meets acceptable standards. In terms of reporting outages are classed as HV (High Voltage) or MV (Medium Voltage). Only outages which are network performance related (see definition above) are reported on in terms of this document.

High Voltage (Bulk) This KPI shows the number of outages experienced on the high voltage network (HV) which is at voltages above 33kV. Outages on these networks generally affect large areas and as a result the maintenance of these networks and capital investment into these networks are always prioritized as to ensure that interruptions are kept to a minimum Total number of HV NPR outages during the second quarter: 15. This was below the quarterly target of 19 NPR outages. The year to date figure stands at 31 HV NPR outages which is also below the mid-year target of 38 NPR outages.

Medium Voltage

This KPI refers to the outages experienced on the medium voltage network (MV) which is at voltages between 1kV and 33kV. Outages on this network are more localized and, therefore, generally affect smaller areas and as a result are less severe than HV outages. However, due to the size and extent of the network, higher number of customers connected to the MV network normally experience more outages. Total number of NPR outages recorded during the second quarter: 269. This is just below the quarterly target of 270 NPR outages. The year to date figure stands at 623 MV NPR outages which is above the mid-year target of 540 NPR outages. The mitigating actions in place to reduce these outages relate mainly to security and measures to reduce theft and vandalism. Equipment failure and insulation failure are as a result of aging cables. Public Lighting Maintenance



Public lights are proactively maintained by a “Spotting and repair” schedule where suburbs and main roads are patrolled to identify defective street lights. The public lighting maintenance KPI shows the percentage of public lights maintained. The actual performance was 79.3% for the second quarter and 83.8% for year-to-date against a target of 85%. The second quarter performance on public lighting repair turnaround time was 7.5 days against a target of 2 days.

Retail Services (Responsible person Director: Retail)

Pricing & Tariff

In terms of the tariff plan, we continue to work on the tariff rationalization in order to achieve more

competitive, NERSA aligned tariffs in terms of benchmarks etc. through the following:

The introduction of Network access as well as Maximum Demand charges.

Normalization of Cross-subsidies (Commercial / Business contributing the most).

Alignment of TOU tariffs to Demand tariffs.

Introduction of a Reseller tariff.

Introduction of a tariff to that supports Photovoltaic installations, etc.

The 13/14 Tariff Proposal was the first in which NERSA approved our structuring as proposed without

any amendments, with the exception of the High Voltage TOU energy rates (where there are currently

no customers in). The other two areas where NERSA declines didn‟t give an approval was with;

The Embedded Generation tariff: Reason – NERSA intends issuing a Consultation Paper early

in 2015 around the same. Only upon the conclusion of a Framework that would be compiled

thereafter will they advise on our tariff proposal.

The tariff for Non Profit organizations: NERSA regarded this as a form of a discount and as

such could not approve or decline, but rather left the implementation of such at the prerogative

of the City as such approval would amount to outing more burden to other customer

categories.



Cost of Sales

Mid-term volumes are 0.48% above the budgeted number

Year on Year volumes are at -0.39% by December 2014

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunTOTA

L

Budget 1,213 1,226 1,072 1,006 990 944 6,452

Actual 1,261 1,217 1,088 989 1,015 913 6,482

% Var 3.9% -0.7% 1.5% -1.7% 2.5% -3.3% 0.48%

-100100300500700900

1,1001,3001,500

14/15FY Purchases - GWh

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun TOTAL

13/14FY 1,225 1,238 1,083 1,018 1,006 936 6,508

14/15FY 1,261 1,217 1,088 989 1,015 913 6,482

% Var 3% -2% 0% -3% 1% -3% -0.39%

-100100300500700900

1,1001,3001,500

Year on Year - GWh



Revenue Performance In comparison with the Mid-term of the previous financial year, revenue rand value is above by

5.29%.

Decrease in total losses when compared to 1st quarter at 36.74% against budget of 12.12% to

19.07% against budget of 17.30%, the gap has decreased in the 2nd

quarter.

Prepaid customers not vending 115 727 – estimated expected purchases of R447m for period July to December 2014.

Meter Reading Performance Overall Meter Reading performance as at 31st December 2014 is at 71.12%. The performance

has improved by 4.76% from 66.39% in June 2014 to 71.12%% in December 2014.

By-Law domestic customers‟ performance is at 74.34%, this has decreased by 1.24% compared to last quarter which was at 75.58%. LPU meter reading performance has increased to 69.70% compared to the previous quarter performance of 69.32%. Meter reading performance per customer category is as follows:

Plan Actual Plan Actual Plan Actual Plan Actual Plan Actual Variance

July'14 99% 48.08% 99% 69.27% 95% 61.79% 95% 43.39% 96% 60.55% -35.45%

Aug'14 99% 53.45% 99% 68.96% 95% 60.97% 95% 68.85% 96% 62.97% -33.03%

Sep'14 99% 55.07% 99% 70.84% 95% 64.01% 95% 67.91% 96% 65.39% -30.61%

Oct'14 99% 53.15% 99% 68.14% 95% 64.85% 95% 66.54% 96% 65.46% -30.54%

Nov'14 99% 52.01% 99% 72.10% 95% 66.96% 95% 68.70% 96% 67.84% -28.16%

Dec'14 99% 54.28% 99% 68.88% 95% 70.20% 95% 77.16% 96% 71.17% -24.83%

Month

LPU Meters Domestic MetersOverall performance

Manual Read AMR Manual Read AMR

Timeline

Bill all fixed charges 2015/02/04

December month had low support staff

and working days and this resulted to

low perfomance

Engage with CoJ to provide

report and clear any outstanding .

Variance Explanation Mitigation



The overall monthly performance is still below the set target by 24.83%. Based on the table below it

was identified that a total of 44,518 domestic meters that have failed By-Law compliance due to various

reasons indicated below:

Exceptions July August September October November December%Contribution to

unread meters

Faulty Meters 30 659 25 945 26 752 31 034 29 720 27 980 41.76%

Inacc 24 074 21 749 22 359 19 010 20 771 18 770 28.01%

Sys Up 38 610 37 398 31 174 27 123 20 698 15 122 22.57%

Bypass 2 132 3 937 2 694 4 011 3 129 2 948 4.40%

Addre 1 223 1 353 1 132 1 984 1 741 2 189 3.27%

Total 96 698 90 382 84 111 83 162 76 059 67 009 100.00%

Monthly decrease -6 316 -6 271 -949 -7 103 -9 050

There has been a positive decrease of 29,689 meters on unread meters exception from July to

December.

Challenges Mitigation

System Updates contribute 22.57% of unread meters. This exception has drastically decreased from 44% reported in June 2014 but still remains a challenge, due to smart meters that have been changed in the field, but job card information has not been received, thus updating of CoJ SAP ISU is delayed.

Engagements with Engineering Services are on-going, to ensure all meter changes information is loaded on the Interface.

Faulty meters: LPU AMR faulty meters are logged and works orders are created on SAP PM for field inspection so that they can be read remotely. All domestic faulty meters are logged on the interface as part of the smart meters to be changed.

LPU AMR faulty meters are logged and works orders are created on SAP PM for field inspection so that they can be read remotely. All domestic faulty meters are logged on the interface as part of the smart meters to be changed.

Tabled below is the breakdown on faulty meters as at 31st December 2014 per customer category as

well as interventions to address them:

Customer Category Faulty Intervention

LPU Manual read 390 Change the meter convert to AMR meter

Domestic AMR 10,391 Fix the Master and Slave routers

Domestic manual read 6,360 Replace meters with AMI Smart meters

LPU AMR 10,839 Change the meter or modem or SIM card

27,980



Inaccessible meters: LPU AMR faulty meters are logged and works orders are created on SAP PM for

field inspection so that they can be read remotely. All domestic faulty meters are logged on the

interface as part of the smart meters to be changed. The short term solution is to disconnect all

inaccessible meters outside the By-Law.

Energy Management Plan Progress

A draft Plan has been developed and is undergoing further consultation. The intent of the plan is to highlight to the City Power business areas of leverage that the business has in ensuring the provision of sustainable electricity as well as the reduction of Johannesburg‟s carbon footprint in a cost effective and efficient manner. The first round of consultation took place on 24 October 2013. This was the first opportunity to get all

the relevant stakeholders to stimulate their thoughts so they can shape this document by positively

influencing it all the way to its approval. It also includes Key milestones as well as targets upon which

the success of the plan will be benchmarked against.

The intent is now to consolidate final inputs within the business with a view to taking this plan a step further in terms of our governance towards formalizing it. Revenue Management

Payment Levels

Financial Year 2014/15 Jul'14 Aug'14 Sept'14 Oct'14 Nov'14 Dec'14 YTD

Actual Collections 80.28% 104.60% 83% 116.70% 84.76% 104.86% 95.04%

Budget Collections 96% 96% 96% 96% 96% 96% 96%

Disconnections – CCMS still not functioning optimally o RSSC is issuing manual disconnections outside the system.

Post office Strike affection delivery of statements and payment made through the post office. o Advice RSSC to proactively communicate with customers on alternative ways to pay and

access their statements.

Increase in customer queries. o Query resolution taking longer than anticipated

Debtors Age Analysis

Month 30 Days 60 Days 90 days

Above 90

days Total

Debtors

movement %

Nov-14 967 670 309 004 183 299 3 043 344 4 503 317 -23 830 -0.53%

Oct -14 852 597 265 515 262 322 3 099 053 4 479 487 27 396 0.61%

Sep-14 844 287 359 705 223 506 3 079 385 4 506 883 -30 058 0.67%

Aug-14 1 144 885 258 949 276 135 2 856 867 4 536 836 -56 777 -1.25%

Jul-14 1 159 213 262 190 279 590 2 892 620 4 593 613 316 675 6.89%

Compliance with NRS 047 Metering Requirements



Overall Meter Reading performance as at 31st December 2014 is at 71.12%. The performance has

improved by 4.76% from 66.39% in June 2014 to 71.12%% in December 2014.

By-Law domestic customers‟ performance is at 74.34%, this has decreased by 1.24% compared to last

quarter which was at 75.58%. LPU meter reading performance has increased to 69.70% compared to

the previous quarter performance of 69.32%. Although there is improvement from the previous quarter

on meter reading rate, the minimum compliance standard is still not achieved

December 2014 By-Law

Customer Category Download Monthly Reading

By-law Compliance

Total Read Reading %

Manual Domestic 163 192 105 822 11 823 117 645 72.09%

Domestic AMR 45 482 35 098 2 375 37 473 82.39%

Total 208 674 140 920 14 198 155 118 74.34%

Query Management There is non-compliance with NRS 047 on query resolution. The total number of queries received as between July and December 2014 was 12 777 and only 3 717 was resolved. CP will continue with the engagements with RSSC to improve the performance.

Electricity related queries

Month Logged Unresolved Resolved Resolution %

Jul 2014 3 468 3 054 414 11.94%

Aug 2014 3 687 3 291 396 10.74%

Sep 2014 127 1 126 99.21%

Oct 2014 2 972 791 2 181 73.38%

Nov 2014 2 443 1 860 583 23.86%

Dec 2014 80 63 17 21.25%

Total 12 777 9 060 3 717 40.06%

Call Centre Requirement Retail Services will continue with the call centre performance forum i.e. RSSC, Call Centre Management, and Dispatch to address other issues that may contribute to the non-compliance. Call Centre standards have not been met due to

• High volume of calls • Planned and unplanned outages that went beyond the turnaround times • Service tickets not being dispatched by City Power, mostly the Randburg and the Hursthill

areas in the first quarter • Abandonment rate target not achieved due to customers dropping calls after listening to IVR

message recording.



Received Calls

Answered Calls

Answered Calls

Percentage Lost Calls

Lost Calls

%

30 Sec Answered

Calls

30 Sec Answered Calls

%

Average Talk time

- Call duration

Average Answering

Speed - wait time

Quarter 1 205 978 112 360 54.55% 93 649 45.47% 65 430 31.77% 03:42 02:44

Quarter 2 223 078 125 535 56.27% 97 877 43.88% 73 439 32.92% 03:37 02:18

429 056 237 895 55.45% 191 526 44.64% 138 869 32.37% 03:39 02:31



5. FINANCIAL MANAGEMENT

Financial Assessment Financial Assessment (Responsible person: Director Finance)

Statement of Financial Performance

As at 31 December 2014

Figures in Rand thousand Variance Variance Variance Variance Variance

Actual Budget % Actual Budget % Forecast Budget %

Revenue 3 339 628 3 254 099 85 529 3% 7 052 079 7 324 941 -272 862 -4% 14 319 101 14 463 483 -1%

Service charges 2 933 003 3 056 779 -123 776 -4% 6 156 849 6 936 120 -779 271 -11% 12 048 629 13 573 620 -11%

Sales to Eskom 299 939 0 299 939 N/A 690 896 0 690 896 N/A 1 755 243 -

Other income 44 124 135 889 -91 765 -68% 89 761 267 410 -177 649 -66% 198 205 590 479 -66%

Government grants 37 266 18 876 18 390 97% 53 466 33 517 19 949 60% 193 018 121 000 60%

Interest revenue 23 710 37 991 -14 281 -38% 54 397 78 767 -24 370 -31% 110 587 160 131 -31%

Fees earned 595 3 650 -3 055 -84% 4 573 7 299 -2 726 -37% 9 146 14 599 -37%

Rental income 62 88 -25 100% 125 175 -50 -28% 250 350 -28%

Canteen revenue 928 826 102 12% 2 011 1 652 359 22% 4 022 3 304 22%

Expenditure 2 557 025 2 716 135 -159 109 -6% 6 900 744 6 730 963 169 781 3% 12 988 532 12 678 677 2%

Bulk purchases Eskom 1 601 910 1 780 845 -178 935 -10% 4 599 621 4 608 881 -9 259 0% 8 585 746 8 603 030 0%

Bulk purchases Kelvin 95 240 65 651 29 589 45% 395 758 324 112 71 646 22% 637 158 521 810 22%

Debt impairment 13 364 113 136 -99 772 -88% 285 491 226 271 59 220 26% 570 982 452 542 26%

General expenses 297 219 205 120 92 099 45% 519 449 467 979 51 470 11% 982 818 885 434 11%

Personnel costs 213 793 204 310 9 483 5% 416 177 408 621 7 556 2% 832 354 817 242 2%

Finance costs 78 667 115 595 -36 928 -32% 159 835 231 076 -71 241 -31% 320 613 463 515 -31%

Repairs & maintenance 149 961 127 969 21 992 17% 301 753 255 938 45 815 18% 603 507 511 877 18%

Administration 21 907 35 655 -13 748 -39% 56 725 74 061 -17 336 -23% 111 343 145 371 -23%

Depreciation & amortisation 84 964 67 854 17 111 25% 165 934 134 025 31 910 24% 344 011 277 856 24%

Surplus before taxation 782 603 537 964 244 639 45% 151 335 593 978 -442 643 -75% 1 330 569 1 784 806 -25%

Taxation 0 125 689 -125 689 0% 0 171 135 -171 135 0% 372 559 499 741 -25%

Surplus 782 603 412 275 370 328 90% 151 335 422 843 -271 508 -64% 958 010 1 285 065 -25%

Quarter 2 YTD Jun '15



N. B. The information in the report is correct to the best of our knowledge, based on the information we received from CoJ. Overall Financial Performance

Surplus The surplus translates a positive variance of R370m for the quarter and negative variance of R272m against the budget for YTD. However there is a big improvement on the performance of the second quarter against the first quarter. During the first quarter the variance against the surplus was a negative 6073%, while the positive variance in the second quarter is 90%. The reasons for the variances are set out below:

Service Charges Service charges for the quarter and YTD are less than budget by R125m and R780m respectively due to a decrease in volumes, unbilled customers, and bypasses prepaid meters. Unbilled customers have been identified and engagements with R&CRM to clear billing exceptions for unbilled customers.

• Variance decrease from R655m in quarter to R124m in quarter 2. • LPU variance decreased with R468m, from negative variance of R447m to R21m positive

The following is the action to recover on revenue: City Power has identified the following items to be actions

Investigate properties not on billing system City Power has done a data comparison and found that there were stands in the City of Johannesburg that are not billed on electricity. City Power has prioritised 7 000 commercial properties that will be audited and billed with in the current financial year. The investigation started in September 2014 with recoveries expected to be seen from October. City Power is also investigating accounts whose consumption has reduced. The plan is to check the validity of the reduction and recover where reduction cannot be justified. These include LPU converted to Prepaid, Meter Removed no meter installed, change tariffs, etc.

YTD Variance

Sept 2014

('000)

Q2

Budget ('000)

Q2

Actual ('000)

Q2

Variance

('000)

YTD Variance

Dec 2014 ('000)

REVENUE

Prepaid -1 491 152 834 162 451 9 617 8 126

Domestic -133 069 947 572 846 861 -100 711 -233 780

Business -73 860 305 669 251 108 -54 560 -128 420

LPU -447 075 1 650 704 1 672 158 21 454 -425 621

Advertising signs 0 0 424 424 424

-655 494 3 056 779 2 933 003 -123 777 -779 271



Sales to Eskom Sales to Eskom are more than budget by R300m and R691for the quarter and YTD respectively. During the budget process there was no contract in place with Eskom, however Eskom signed a new contract after the budget process resulting in the variance. This has been corrected during the revised budget process.

Other Income Other Income for the quarter and YTD is R92m and R178m less than budget respectively, due to the following:

DSM Levy is less than R68m and R136m against the budget for the quarter and YTD respectively. DSM levy is calculated based on the units sold. The units sold are less than budget. The DSM Levy was reviewed from 2c/kWh to 1c/kWh in the financial year 2013/2014 and the review will be done during mid-term budget review.

Engineering Contributions are less than R19m and R35m against the budget for the quarter and YTD respectively, as fewer requests for new developments has been received. There were fewer requests for development site connections than estimated/budgeted for.

This was partially offset by:

New Connections exceed the budget by R2m and R8m for the quarter and YTD respectively due to the increases in request by customers for new connections and upgrades. New connections are a non-controllable budget item as the number of new applications or upgrades cannot be determined during the budget process and is based on the prior year requests.

Government Grants Grants are more than the budget by R18m and R20m for the quarter and YTD respectively as more grants were received for the period July to December than budgeted. Interest revenue is less than the budget by R14m and R24m for the quarter and YTD respectively. This is mainly due to the decrease in interest on the bank account, as the cash balance is less than the budgeted cash balance by R775m. OPERATING OVERHEADS: FOR THE MID-YEAR ARE MORE THAN BUDGET BY R170m The reasons for the variances are set out below:

Service Charges: 2013/14 and 2014/15 comparative performance (R'000)

Description Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 YTD

Actual 1 145 433 1 151 532 926 881 1 051 659 917 097 964 248 6 156 849

Budget 1 240 629 1 521 603 1 117 109 1 035 667 1 018 022 1 003 091 6 936 120


Actual 952 107 1 090 052 978 332 930 894 899 955 996 156 5 847 495

Budget 1 213 529 1 488 240 1 092 615 1 012 959 995 700 981 096 6 784 139

Sales to Eskom: 2013/14 and 2014/15 comparative performance (R'000)


Actual 110 832 146 916 133 209 106 643 72 644 120 652 690 896

Budget - - - - - - -


Actual 66 600 106 260 70 690 87 145 89 964 88 356 509 015

Budget 51 914 63 672 46 746 43 338 42 599 41 975 290 243



Bulk Purchases Bulk purchases from Eskom is R179m less than budget for the quarter and only marginally less than the YTD budget, however Kelvin are R30m and R72m more than the budget for the quarter and YTD

Debt Impairment Debt Impairment is less than the budget for the quarter by R100m however it exceeds the budget by R59m for the year. The current budget for debt impairment was reduced during the budget process, as the City expected a better collection level and therefore it is not in line with the current level of debt. The saving during the quarter is a result of the implementation of the policy that was approved. General Expenses are R92m and R51m more than the budget for the quarter and YTD respectively mainly due to the following:

Fleet costs exceed the budget by R8m and R16m for the quarter and YTD respectively due to an increase in additional vehicles utilised and additional vehicles (generators) that were needed.

Commission paid exceeds the budget by R10m and R6m for the quarter and YTD respectively due to the increase in transactions by customers utilising vending machines and other third parties for payments at the Post Office & Pick & Pay as a result of the Post Office strike.

Professional fees are more than the budget by R8m and R25m for the quarter and YTD respectively. There were more consultants utilized during the first quarter of the financial year.

Kelvin Lease Cost exceeds the budget by R77m and R50m for the quarter and YTD respectively due to the agreement with Eskom.

Security is R11m and R15m more than the budget due to the increase in theft and vandalism that resulted in additional security that had to be arranged to protect infrastructure.

Stores and materials are R25m more than budget for YTD due the installation of solar water heaters during the period.

Meter reading exceeds the budget by R4m and R9m for the quarter and YTD respectively due to Project on the Go 7000. .

This was been partially offset by:

Demand side management is less than budget by R12m and R25m for the quarter and YTD respectively as a result of the slow progress on projects.

Eskom Purchases: 2013/14 and 2014/15 comparative performance (R'000)


Actual 1 202 030 1 062 070 733 611 520 492 577 685 503 732 4 599 621

Budget 1 052 032 1 090 994 685 009 620 072 581 178 579 595 4 608 881


Actual 1 037 357 1 072 994 647 042 522 317 533 044 490 068 4 302 823

Budget 1 135 730 1 150 806 726 932 542 145 573 975 541 104 4 670 692

Kelvin Purchases: 2013/14 and 2014/15 comparative performance (R'000)


Actual 126 377 94 660 79 481 66 847 6 570 21 822 395 758

Budget 98 979 102 644 56 838 22 120 21 411 22 120 324 112


Actual 97 048 59 556 38 354 54 848 49 032 41 173 340 010

Budget 25 601 37 450 36 585 52 964 42 077 35 737 230 414



Final check readings are less than budget by R5m and R8m for the quarter and YTD respectively. Fewer check readings were done to date.

Finance Cost Finance cost is less than the budget by R37m and R71m for the quarter and YTD respectively due to interest payable on Capex loans which is less than budget. This was predominately due to the outstanding Capex claims and therefore a lower loan balance. Interest on loans is only payable when the funds are deposited into the bank account. Repairs and Maintenance Repairs and Maintenance is more than the budget by R22m and R46m for the quarter and YTD respectively due to excessive theft and vandalism. Emergency capital work was done on Repairs and Maintenance budget and needs to be journalised to CAPEX. Administration Administration costs are less than budget by R22m and R17m for the month and YTD respectively due to COJ fleet lease costs and admin fee being less than the budget. Depreciation & amortisation Depreciation has increased during the quarter due to the capitalization of the additional assets of R257m that was not included in the budget.



Statement of Financial Position

Figures in Rand thousand Jun '14 YTD Jun '14

Actual Actual Budget Budget

Current assets 5 023 034 4 031 732 4 709 515 4 685 193

Inventories 78 717 183 512 173 558 153 558

Loan to shareholder - 99 258 46 453 75 367

Trade and other receivables 595 473 216 002 112 133 115 138

Consumer receivables 2 107 621 1 979 571 2 048 523 2 048 523

Cash and cash equivalents 2 241 223 1 553 389 2 328 848 2 292 608

Non-current assets 9 883 668 10 266 351 9 958 674 11 422 719

Property, plant and equipment 9 677 310 10 068 761 9 777 274 11 256 907

Intangible assets 206 358 197 590 181 399 165 811

Total Assets 14 906 702 14 298 083 14 668 189 16 107 912

Current liabilities 3 638 757 3 097 185 2 259 954 3 009 490

Loans from shareholders (ST) 430 853 753 969 464 768 464 768

Trade and other payables 2 977 253 2 070 359 1 311 349 2 073 211

VAT payable 181 316 167 400 360 375 371 392

Provisions 49 335 105 457 123 462 100 118

Non-current liabilities 4 046 848 3 832 756 4 292 936 4 120 899

Loans from shareholders 2 237 931 2 027 129 2 789 159 2 561 186

Retirement benefit obligation 24 463 24 463 39 518 68 473

Deferred income 38 916 36 979 0 -

Deferred tax 1 473 447 1 472 094 1 115 601 1 115 601

Consumer deposits 272 091 272 091 348 658 375 639

Total Liabililties 7 685 605 6 929 941 6 552 890 7 130 389

Share capital and premium 112 466 112 466 112 466 112 466

Accumulated surplus 7 108 631 7 255 677 8 002 833 8 865 057

Total Net Assets 7 221 097 7 368 143 8 115 299 8 977 523

Total Liabilities and Net Assets 14 906 702 14 298 083 14 668 189 16 107 912

RATIOS Jun '14 Dec '14 Dec '14 Jun '15

Actual Actual Budget Budget Benchmark

Current ratio (times) 1.38 1.30 2.08 1.54 1.00

Solvency ratio (times) 1.94 2.06 2.24 2.26 2.00

Debt:Revenue (%) 24% 24% 24% 24% 45%

Remuneration:Expenditure (%) 20% 20% 20% 20% 30%

Maintenance:Net assets (%) 5% 3% 3% 5% 8%

Interest:Expenditure (%) 3% 2% 3% 4% 7%

Net operating margin (%) 10% 2% 6% 10% 10%

Cash cover (days) 90 86 134 70 45

Creditors days 25 10 30 30 30

Debt impairment as % of revenue (%) 6.0% 4.2% 3.3% 4% 3.5%

Debtors days (days) 60 106 108 60 55



Inventories Inventories are less than budget due to items being out of stock as a result of the increase in Repairs and maintenance cost. Loans to Shareholder Loans to shareholder are more than the budget due to the following:

The amount for post-retirement benefits exceeds the budget due to actuarial valuation being more than the budget.

Trade and other receivables Trade and other receivables exceed the budget by R336m predominately due to the contract with Eskom. Cash and Cash Equivalents Less cash was received during the period under review as the payment levels are below budget.

Loans from Shareholders (Short term) The amount is more than budget due to capital claims not yet received and an amount of R323m owed to COJ as a result of over payment of customer receipts. The budget assumed that no capital claims would be outstanding. The short term portion of loans from the shareholder is only calculated based on actual loan funding received. Trade and other payables are more than budget due to more supplier invoices being outstanding than budgeted. Accrual for Eskom and Kelvin are more than budget due to the increase in demand and unit price. Vat Payable Due to the decrease in revenue vat payable is less than budget. City Power pays VAT on a cash basis; therefore VAT is only paid over to SARS if the cash is actually received from the customers. Provisions Provisions are less than the budget due to a decrease in the leave liability provision. Loans from Shareholders (Long term) The decrease is due to a delay in loan repayments from the City. Deferred income Deferred income relates to connection fees received. The fees are recognised as deferred income until such time as the connection is made, at which stage the income is recognised in the statement of financial performance. The budget is based on the principle that all connections have been completed at period end.

Cash: 2013/14 and 2014/15 comparative performance (R'000)


Actual 1 913 848 1 316 537 512 551 1 075 229 1 420 122 1 553 389 1 553 389

Budget 2 835 639 3 096 145 2 502 732 2 395 255 2 519 177 2 328 848 2 328 848


Actual 2 673 068 2 399 196 1 803 672 2 201 495 2 169 414 2 381 246 2 381 246

Budget 2 213 882 2 543 120 2 031 288 2 056 258 2 214 540 2 098 041 2 098 041



Deferred Tax The increase in deferred tax is due to an increase in the temporary differences on fixed assets and the provision for bad debts.



Cash Movement for the period

Increase in Loan to shareholder An amount of R84m is owned by the City regarding Post retirement benefits Reducing trade creditors Increase in bulk purchases from Eskom and additional payment to suppliers. Increase in loans from shareholder Due to the increase in regarding cash collections from customers.

Supply Chain Management Financial Assessment (Responsible person: Director Finance)

Procurement Policies and Practices

Accreditation of Black Economic Empowerment in respect to both the supplier and contractor

.Accreditation of suppliers and contractors is done on an on-going basis by the BEE unit and

reviewed regularly to ensure validity and correctness of information on the database. Supply

Chain Management Policy is in line with COJ Integrated Supply Chain Management Policy.

Sources of application

Surplus 151 338

Plus Depreciation 165 934

317 272

Increase in shareholder loans 323 116

Increase in provisions 56 122

Decrease in intangible assets 8 768

Decrease in consumer receivable 123 125

Decrease in trade receivables 107 181

Decrease in cash 687 834

1 623 418

Application

Increase in fixed assets 557 385

Increase in inventory 104 795

Increase in loan to shareholder 99 258

Decrease in deferred income 1 937

Decrease loan from shareholder 210 802

Decrease in deferred tax -

Decrease in trade payables 635 321

Decrease in VAT payable 13 920

1 623 418



Procurement/BEE Spend per Quarter

Contract Management in the Quarter

Contracts are monitored on a regular basis by both the end user and supply chain in order to ensure that there is full compliance with the scope of work and that spend is within the approved budget. This ensures that supplier performance is closely monitored in order to identify areas of poor performance or non-performance so that corrective measures can be put in place and implemented as early as possible.

Enforced penalties on contractors

None for the quarter.

Reports on unsatisfactory work

None reported for the quarter.

Quarter 1 Quarter 2

Procurement spend from suppliers

that are 50% black ownedR000's 683 674 452 309

% Spend % 13.1 14.6

Procurement spend from suppliers

that are 30% black women ownedR000's 355 969 232 835

% Spend % 6.8 7.5



Bids advertised during the quarter

No. Bid description Closing date

1. ICT Strategic Partners 04/07/2014

2. Supply & Delivery of Pole and Ground Mounted Distribution Transformers for City Power Johannesburg (SOC) LTD

15/07/2014

3. Supply & Delivery of Free Standing 11kV Metal Enclosed Ring Main Units for City Power Johannesburg (SOC) LTD

14/07/2014

4. Supply and delivery of ICT Hardware 15/08/2014

5. Procurement of PR & Marketing Service for City

Power

15/08/2014

6. Supply, Installation and Commissioning of Digital

Multiplexer

01/08/2014

7. Repairs of vandalized Transmission Towers 08/08/2014

8. Construction of new Heriotdale Substation 05/09/2014

9. Tshepisong SWS 05/09/2014

10. Upgrading of existing Nancefield Substation 05/09/2014

11. Upgrading of existing Eldorado Park Substation 05/09/2014

12. Upgrading of Mulbarton Substation 12/09/2014

13. Upgrading of Mondeor Substation and line

alterations

12/09/2014

14. Upgrading of existing Cleveland Substation 12/09/2014

15. Upgrading of existing Wilro Park Substation 12/09/2014

16. Upgrading of Kloofendal Substation 12/09/2014

17. Upgrading of Pennyville Switching Station and

line alterations

12/09/2014

18. Upgrading of existing 6.6 kV Distribution Networks

to 11kV

27/08/2014

19. Upgrading of HV Networks under “Live line”

conditions

26/08/2014

20. Turnkey Solution for Electrification Projects 29/08/2014

21. Design, Supply and Project Management on

replacement of Bare overhead lines with Aerial

Bundle Conductor

28/08/2014

22. Supply and delivery of concrete poles 10/10/2014

23. Removal of illegal connections, Disconnections &

Recons

17/10/2014

24. Third Party Vending 03/12/2014

25. Supply and delivery of cleaning detergents 17/12/2014

26. Supply and delivery of protective PVC sleeves

and fibre optic

21/11/2014

27. Supply and delivery of stationery 19/12/2014

28. Supply and delivery of master padlocks, cylinder 21/11/2014



Bids/Contracts approved in the quarter

Tender Number

Contractor Name Description Period Budget Vote R’000

Award Value R’000

2008S Ongoti Technologies Wandie‟s Technical

Secondary Plant

Maintenance Contract

3 Years R30 000 R30 000

2040S J & B Consulting Aurecon SA High Voltage systems Engineers PSW & Nyeleti JV Royal Haskoning DHV Zimisele Logistics & Power Projects Isivuvu Technical Solutions and Deltron JV Bounomano Capital Construction cc Lyon & Vennote Partners EON Consulting CPV Engineering and E Square Engineering Lebohang Consulting Engineers Tladi Consulting Hamsa Fevertree Consulting and Impulse Motla Consulting Engineers Norconsult Iyanda

Appointment of Various

Strategic Partner

Consultants to assist

City Power (SOC) LTD

with Turnkey Projects

and Green technology

3 Years

R1 200 000

R1 200 000

1988GS Aptronics Upgrade of the Virtual

Infrastructure and

3 Years R25 100 R25 100

and keys

29. Supply and delivery of PVC Adhesive tapes 21/12/2014

30. Supply and delivery of Paints and brushes 21/12/2014

31. Supply and delivery of PPE 19/12/2014

32. Pole Yard Project 19/12/2014

33. Supply and delivery of single and three phase

pre - payment meters

19/12/14

34. Relay Replacement 30/01/15

35. Soweto Substation (11kV incomer circuit

breaker)

30/01/15

36. Oil spill and Rehabilitation 30/01/15

37. Hopefield Substation 19/12/14

38. Wemmer Substation 05/12/14

39. Waterval Substation 19/12/14

40. Supply and delivery of Current Transformers 12/12/14



Tender Number

Contractor Name Description Period Budget Vote R’000

Award Value R’000

Storage Environment

2045S Dimension Data Data Centre Maintenance

3 Years R3 000 R2 778

2043S Level X Inter Trading cc Tetra Base Station Maintenance

3 Years

R2 800

R2 747

2025S The Contact Centre School

Contact Centre to support metering project

18 Months R5 000 R5 000

2030G Active Lifestyle Supply and Commissioning of Gym Equipment

Once - Off R500 R358

2034G African Oxygen Limited Supply and Delivery of Various Gas Products

3 Years R2 000 R2 000

2018 Icon Business Furniture Furniture for Basic Training Centre

2 Months R1 400 R1 207

2013GS ABB Supply, Installation and Commissioning of Digital Multiplexer Equipment

3 Years R38 000 R38 000

2041GS Mogotsigoitsimang Repairs of Vandalised Transmission Towers

3 Years R20 000 R20 000

2048G Mokhurane Technologies Supply, Delivery and Maintenance of ICT Hardware

3 Years R13 000 R13 000

Deviation/exception procurement for the quarter

Item Procurement Type

Date Description Amount

1 Emergency Procurement

21/07/2014 Emergency Maintenance work performed on the Data Centre and Disaster Recovery Site.

R87,000.00


21/07/2014 Emergency Procurement of a Network Core Switch to replace the over -utilised switch that is causing intermittent network interruptions.

R3,200,000.00


04/09/2014 Emergency replacement of CT's at Multichoice after the switchgear had blown up.

R100,000.00


25/09/2014 Dry ice cleaning of the board for repairs to commence to insure supply is restored to Panorama sws

R12, 920.00




30/09/2014 Emergency procurement for transformer replacement services

R381, 544.00


11/06/2014 Dry ice cleaning of the board for repairs to commence to insure supply is restored to Panorama sws

R50,000.00


22/12/2014 Material for the installation of new meters to facilitate meter readings

R24,845,828.20


29/12/2014 Urgent repairs to the standby 11kV feeder board to allow the standby transformer to be re-commissioned.

R500,000.00

TOTAL R29 177 292.20

Fruitless irregular and wasteful expenditure

An amount of R381 544 for transformer replacement services was identified as irregular expenditure.

This is still currently under investigation.

Fleet Management Financial Assessment (Responsible person: Director Finance)

Fleet availability

Service provider Month Percentage availability

AVIS July 2014 97.33%

AVIS August 2014 99.50%

AVIS September 2014 98.29%

EQSTRA July 2014 93.76%

EQSTRA August 2014 92.35%

EQSTRA September 2014 89.35%

AVIS October 2014 97.75%

AVIS November 2014 98.13%

AVIS December 2014 99.80%

EQSTRA October 2014 89.05%

EQSTRA November 2014 88.28%

EQSTRA December 2014 99.10%

Fraud and theft in respect of fuel

A generator report is done on a weekly basis, recording litres purchased and dispensed. Working together with Risk control on diesel theft.

Annual budget for vehicle related costs

The budget for fleet for the year is R78.2m; actual cost as at end of December is R59m



Highlights for the mid-year

Ten brand new generators were delivered during September and October 2014.

Vacant positions for drivers were advertised

Long term ad-hoc rental vehicles were given back to the service provider to reduce rental costs.

Objectives for the rest of the year

To obtain quotations for the refurbishment of our generators, to eliminate the rental of generators completely (this can result in massive savings)

To look at the possible refurbishment of our busses, or the purchase of new ones

To give all applicable staff training on the new generators

Challenges in Fleet department

The drivers are working much more overtime than allowed by the law.

Audit findings 2013/14



6. HUMAN RESOURCES MANAGEMENT

(Responsible person: Director Human Resources)

LLF Agreement

A thorough analysis of the Company‟s practices, benefits and allowances necessitated a review to ensure consistency and fairness. On 30 May 2013, the Company and Samwu signed a LLF Agreement that comprises of the following items:

Travel Allowance / Cell phone Allowance / Data Card Allowance / Hot Skills Allowance.

Structural Re-Alignment.

Acting Allowance.

50th Percentile / Pay Progression.

Essential Services / Rules of Engagement.

Shift Policy / Overtime.

Annual Leave.

Number of

items to be

resolved

Resolved Unresolved%

Unresolved

Accepted

by Internal

Audit

% Accepted

by Internal

Audit

Supply Chain 4 - 4 100.0% - 0.0%

Management Accounting 5 - 5 100.0% - 0.0%

Financial Accounting 8 - 8 100.0% - 0.0%

Budget and Cost Accounting - - - n/a - n/a

Asset Management 7 - 7 100.0% - 0.0%

Finance 24 - 24 100.0% - 0.0%

Human Resources 8 - 8 100.0% - 0.0%

Retail 1 - 1 100.0% - 0.0%

Engineering Services 1 - 1 100.0% - 0.0%

Engineering Operations - - - n/a - n/a

Information Technology 6 - 6 100.0% - 0.0%

RAC 2 - 2 100.0% - 0.0%

Company Secretary 1 - 1 100.0% - 0.0%

Total AG Findings* 43 - 43 100.0% - 0.0%

Number of

items to be

resolved

Resolved Unresolved%

Unresolved

Accepted

by Internal

Audit

% Accepted

by Internal

Audit

SCM 14 - 14 100.0% - 0.0%

Management Accounting 5 - 5 100.0% - 0.0%

Financial Accounting - - - n/a - n/a

Budget and Cost Accounting - - - n/a - n/a

Asset Management 5 - 5 100.0% - 0.0%

Finance 24 - 24 100.0% - 0.0%

Human Resources 12 - 12 100.0% - 0.0%

Retail 9 - 9 100.0% - 0.0%

Engineering Services 16 - 16 100.0% - 0.0%

Engineering Operations 11 - 11 100.0% - 0.0%

RAC 1 - 1 100.0% - 0.0%

Energy Management 15 - 15 100.0% - 0.0%

Total IA Findings 88 - 88 100.0% - 0.0%

Group

Week ending 10 December 2014 relating to the 1st quarter of 2014/2015

Group

Week ending 10 December 2014 relating to 2013/2014

AG AUDIT FINDINGS

INTERNAL AUDIT FINDINGS AS PER 3RD QUARTER INTERNAL AUDIT ISSUE LOG



Gratuity / Performance Management.

Of the above, the following have been implemented successfully:

Travel Allowance / Cell phone Allowance / Data Card Allowance / Hot Skills Allowance – discontinued.

Structural Re-Alignment.

Acting Allowance.

Annual Leave.

Shift Policy / Overtime.

Gratuity / Performance Management.

50th Percentile / Pay Progression.

The following is still in progress:

Essential Services / Rules of Engagement.

Structural Re-alignment

In order to deliver on the newly crafted Company Strategy, HR facilitated the structural re-alignment process which entailed the review of the following processes :

City Power‟s structure

Job profiles

Grading and Moderation The structural re-alignment process was successfully delivered during the 2

nd quarter of the 2013/14

financial year.

Talent Management

During the period July 2014 to December 2014, the Company recruited 258 new employees : o 1 x GM: Internal Audit. o 1 x GM: Information & Communication Technology. o 2 x Manager: Field Services (PP). o 1 x Manager: Oil Lab. o 1 x Manager: Business Performance. o 1 x Manager: Asset Management. o 1 x Manager: Land & Rights o 6 x Team Leader (Metering). o 72 x Electricians (PP). o 13 x Electricians (Metering). o 2 x Executive Support. o 142 x Trade Assistant (PP). o 14 x Warehouse: Stock Issuer. o 1 x Senior Buyer : Commodity Production



Staff compliment

The staff complements for the reporting period is 1 819 which includes permanent and contract employees. The Company‟s target for Affirmative Action is 85%. The Company achieved 90.87% for all levels and 81.80% for Supervisory and above levels. The Company‟s target for Gender Equity is 25%. The Company achieved 25.45% for all levels and 31.98% for Supervisory and above levels.

African Coloured Indian White African Coloured Indian White

Top Management

(Executives)3 - - 2 5 2 - - - 2 7

Senior Management 15 1 2 4 22 6 - 1 1 8 30

Professionally qualified

and experienced

specialists and mid-

management Managers

and Professionals

167 10 5 65 247 120 3 1 9 133 380

Skilled technical and

academically qualified

workers, junior

management, supervisors

and Technicians

62 16 1 32 111 26 2 2 8 38 149

Artisans (All types) 279 15 3 55 352 47 1 - - 48 400

Administrative 57 1 1 3 62 105 6 - 19 130 192

Semi-skilled and

discretionary decision

making

531 7 - 4 542 57 - - 1 58 600

Elementary positions 15 - - - 15 44 2 - - 46 61

Total (Permanent and

Contract)1,129 50 12 165 1,356 407 14 4 38 463 1,819

Categories Male Male

Total

Female Female

Total

TOTAL



People with Disabilities

The Company‟s target for People with Disabilities is 2%. 43 employees have voluntarily declared their disability. This amounts to 2.36% of the total workforce. This compares favourably to the Government and Private Sector figures of 0.6% and 1% respectively according to the DOL report.

African Coloured Indian White African Coloured Indian White

Top Management

(Executives) 0 0 0 0 0 0 0 0 0

Senior Management 0

Professionally

qualified and

experienced

specialists and mid-

management

Managers and

Professionals 2 1 1 4 0 0 0 1 9

Skilled technical and

academically

qualified workers,

junior management,

supervisors and

Technicians 2 1 0 4 0 0 0 0 7

Artisans (All types) 6 1 0 4 0 0 0 0 11

Administrative 1 0 0 1 3 1 0 1 7

Semi-skilled and

discretionary

decision making 7 1 0 0 0 0 0 0 8

Elementary positions 0 0 0 0 0 1 0 0 1

Total (Permanent and

Contract) 18 4 1 13 3 2 0 2 43

Categories TOTALMale Female



Staff Movements

Skills Development and Training

The on-going development and up-skilling of employees in the workplace is a priority for City Power. Bursars There are currently 24 Bursars enrolled with the Company. Details of the bursars and their courses of study:

No. Gender Race Qualification enrolled for

Study year

Learning Institution

1 Male

African

BSc Electrical Engineering

3

rd

University of the Witwatersrand

2 Male

African

BIng (Electrical & Electronic)

3

rd University of Johannesburg

3 Male

African

BSc Electrical Engineering

3

rd


4 Male

African


3


5 Male

African


3


6 Male

African

National Diploma Electrical Engineering

Completed (now doing practical)

Vaal University of Technology

7 Female African Bachelor of Accounting Sciences

1

st


8 Female African BSc Electrical University of the

Staff

Movement

African Coloured Indian WhiteTOTAL

Male Female Male Female Male Female Male Female

Recruitment 163 66 1 230

Appointments 11 4 15

Promotion 7 7 14

Transfer 11 5 2 3 1 22

Resignation 5 1 1 2 1 10

Early

Retirement 3 3

Retirement 8 2 2 2 14

Retrenchment 0

Medical

Boarding 1 1

Dismissal 1 1

Demotion 0

Deceased 7 1 1 9

Termination of

Contract 9 4 1 1 15

Total

Movements 225 91 4 0 2 0 8 4 334



No. Gender Race Qualification enrolled for

Study year

Learning Institution

Engineering 1st Witwatersrand

9 Male African BEng Electrical Engineering

2

nd University of Pretoria


2

nd University of Johannesburg

11 Female African Advance Diploma in Accounting

4th

University of Johannesburg

12 Female African Advance Diploma Financial Management

3


13 Male African National Diploma Electrical Engineering

S1 University of Pretoria


S4

Tshwane University of Technology


1

st University of Pretoria

16 Female African BCom in Financial Accountancy

2

nd North West University


S4

Tshwane University of Technology


S3 University of Johannesburg

19 Male African BSc Electrical Engineering

1st


20 Male African BSc Electrical Engineering

2

nd University of Johannesburg


S1 University of Johannesburg

22 Female African BCom Accounting 2nd


23 Male Indian

Computer Science and Information Technology Degree

1

st University of Kwazulu Natal

24 Female African BCom Accounting

Completed studies at the end of 2014 University of Johannesburg

Note: HR has received 186 bursary applications for 2015

Learners / Apprentices There are currently three (3) learners / apprentices enrolled with the Company. This total is made up of seven (7) African males and one (1) African female. Details are below:

Name Surname Gender

Appointment

date

Termination

Date

Status to

date

Lifa Lawrence Vilane M No 2013/10/31

Appointed as Technician in training

in January 2014

Sibonelo Ntombela M No 2013/12/31

Completed his ND Electrical in 2013 and

is awaiting appointment



Name Surname Gender

Appointment

date

Termination

Date

Status to

date

Fanie Richard Dlamini M No 2013/09/15

Working in Protection as a Technician in

Training

ABET There are currently no learners registered for ABET training. HR is planning to start the programme again in 2015. Amount spent on training employees An amount of R3 340m was spent on training for the period July 2014 to December 2014. July 2014 R521,414 August 2014 R435,286 September 2014 R616,939 October 2014 R837,062 November 2014 R846,629 December 2014 R82,207 Mentorship-ECSA registration HR has applied to SAIEE South African Institute for Electrical Engineers) and SAICE (South African Institute for Civil Engineers) for a mentorship programme to enable Bursars and Diploma students to become professionally registered with ECSA. Integrated Skills Development Grant HR has submitted a business case to the Department of National Treasury to access their funds to enable us to train interns (already qualified academically) on a full time basis in City Power. The request was for approximately R 3,6 m. City Power received a grant of R1m for 2014/15 which will enable the appointment of 4 candidates in January 2015.

Remuneration management

Pay progression was successfully implemented in October 2014.

Policy Review

The following policies were approved by the Board on 19 September 2014:

Employment Equity Policy.

Knowledge Management Policy.

Remuneration, Benefits and Recognition Policy. This now brings the total to 13 new HR policies approved by the Board since February 2014. It should also be noted that the HR Business Support Process was also approved by Exco on 2 July 2014.



Performance Management

A total of 1 492 employees were eligible for a performance bonus in line with the Board approved Integrated Performance Management Policy.

Change Management

Since inception of the December 2012 structural re-alignment programme, which amongst others led to the approval and implementation of the 30 May 2013 LLF Agreement, a number of change management projects and initiatives were undertaken by HR. During Quarter 1, the following Company-wide communication of changes was undertaken:

Create change awareness post the 30 May 2013 LLF Agreement by reaching out to the employees who also qualify for the identified benefits through their respective Group Directors.

Firm up the change network structures (Agents, Champions, Leaders) from all depots for capacity building and sustainability in relation to the SharePoint project.

Document the answers to frequently asked Questions to ensure consistency in communication and circulate back to Employees after EXCO input in relation to Shift, Pay Progression and SharePoint.

Facilitation for identification of Employees medically certified as unfit to work shifts and confirmation of same with Line Management.

Facilitation of training in relation to Balanced Score Card for Leadership Levels, in support of Individuals‟ Performance Management.

Partnering of Relationship Management Department for communication facilitation on embracing Change through Industrial Theatre.

Facilitation of appointment of Strategic Partners in relation to Job Evaluation and communication of Grades to EXCO and Organised Labour.

Stakeholder Management deliverables in relation to the above (scheduling of sessions, feedback meetings for progress reporting, payment of Providers.

During Quarter 2, HR mainly focused on pay progression and performance management initiatives.

ER Reporting

Disciplinary matters for the period July 2014 to December 2014: Month Written

Warning Final Written Warning

Suspension without pay

Other sanctions

Dismissals Not guilty

Withdrawn Total

July-14

0 1 (Negligence and unbecoming behavior)

0 0 0 0 0 1

Aug-14

0 2 (Negligence)

0 0 0 0 1 due to resignation (False statement, fraud, insubordination, unbecoming behavior)

3

Sept-14

0 0 0 0 1 (Absence)

0 1 case dismissed (Negligence)

2

Oct-14 0 0 0 0 0 0 0 0

Nov-14

0 0 0 0 0 0 0 0



Dec-14

0 0 0 0 0 0 1 due to technicality (Failure to obey lawful instruction)

1

Total 0 3 0 0 1 0 3 7

Suspensions: There are currently five (5) precautionary suspensions: Group Number of

suspensions Remarks

Engineering Operations

2 Both matters are still being investigated.

HR 1 Disciplinary inquiry was set down for 4 December 2014 but was postponed due to both the accused employee and the Presenting Officer falling ill.

Retail Services 2 Suspension 1 - Is still being investigated. Suspension 2 - The disciplinary inquiry has taken place. Awaiting the outcome.

7. Risk, Assurance and Compliance

(Responsible person: Director RAC)

Risk Management

Risk Management Process Enterprise Risk Management (ERM) is the holistic management of all risks. It is a structured, consistent and continuous process across the whole of City Power for risk identification, assessment, decision making and reporting. The Enterprise Risk Management Framework is the set of components for designing, implementing, monitoring, reviewing and continually improving risk management throughout City Power. ERM is a process, effected by City Power‟s Board of Directors, management and other personnel, applied in strategy setting and across the business aimed at identifying potential events that may affect the company and manage risk to be within the approved Risk Appetite and to provide reasonable assurance regarding the achievement of City Power‟s objectives. The Risk Management Policy, Strategy and Methodology were developed and approved by the Board in January 2014. The Policy, Strategy and Methodology are in line with:

Municipal Finance Management Act 56 of 2003;

King III report on Corporate Governance;

Enterprise Risk Management and Control Framework – COSO;

CoJ Risk Management Framework;

COJ Group Governance Framework 2013;

City Power Leadership Charter; and

National Treasury Risk Management Framework.



Risk Management Process

The company has adopted an ISO accredited Risk Management Process of Risk Identification, Monitoring and Review, Communication and Consultation as depicted in the diagram below.

RISK MANAGEMENT PROCESS

Strategic Risk Register The risk management unit on a quarterly basis perform a review on the approved strategic risk register. To date risk response strategies have been received from a number of process and action owners, despite the efforts made by management no significant change in the residual risk score as controls environments are still not operating as intended and/or improvements to control environments are still in progress. In adopting a proactive approach the risk management unit understands that management might be experiencing challenges to get control environments to operate as intended, this formed the basis to develop an additional template to understand their challenges, as only once we understand the challenges management are experiencing, will we be able to provide them with value adding advice and assistance in order to improve the control environments and mitigate the risks even further. Revenue Recovery Project: During Q1 of the 2014/15 financial year, the Managing Directors identified two key priority areas:

1. Improve revenue collection; and 2. Reduce power outages.

These two priority areas formed the basis of the Project Go 7000; the risk management unit assisted the relevant process owners in facilitating the risk assessment for the project. The risk management unit conducted a workshop with the relevant process owners to provide them with an understanding of the ERM Policy, Strategy and Methodology.

Mo

nit

ori

ng

an

d R

evie

w

Co

mm

un

icat

ion

an

d

Co

nsu

ltat

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Risk Treatment

Risk Evaluation

Risk Analysis

Risk Identification

Risk Assessment

Establishing the context



To date no risk response strategies have been received from the relevant process owners, the risk register will be updated as soon as inputs are received. Risk Assessment and Treatment Once risks have been identified, they must then be subjected to a consistent assessment process to ensure that City Power achieves an objective and holistic result that can inform its risk profile. Risk is measured in two ways:

By the likelihood or frequency of the risk occurring.

By the severity / impact on City Power of the risk occurring The developed methodology for has a two-stage assessment process to assess and quantify the identified risks. Stage One – Impact and likelihood The first stage involves an assessment of the potential impact (or severity) of each risk, and then the likelihood of the event actually occurring. Each risk is scored on a scale of one to five. Table below: shows the criteria used to assess the potential Impact / Severity of each risk occurring.

THE CRITERIA USED TO ASSESS THE POTENTIAL IMPACT / SEVERITY OF EACH RISK OCCURRING

Assessment of impact / severity

Rating Financial Reputation Stakeholders Customers

1

No

t s

ign

ific

an

t

Event would have little financial impact on either income or budget

Contained within individual service area. From a regulatory perspective, minor fines or penalties may have been suffered.

Employees may have suffered minor first aid injuries. Event may have resulted in localised staff morale problems.

Customers may have been minimally impacted. Event may impact minimally on achieving a performance target.

2

Min

or

Event would have moderate financial impact (>2% on budget/income or >2%) on either income or budget.

Affects significant number of service areas but with likely short-term impact on public memory. From a regulatory perspective, fines or penalties >R50k may have been suffered. Customers may have been impacted resulting in complaints with media coverage (suburban newspaper).

Employees may have suffered temporary disabling injuries. Event may have resulted in staff loss causing minor to moderate consequences.

Event may impact on achieving a performance target where a major milestone was missed by more than 1 month, impacting on a client segment.

3

Mo

de

rate

Event would have serious financial impact (>4 -6% on budget/income or >4%) on either income or budget.

Regulator inquiry with medium-term impact on public memory. From a regulatory perspective, fines or penalties >R100k may have been suffered. Customers may have been impacted resulting in complaints with media coverage (local newspaper not front page).

Employees may have suffered multiple temporary disabling injuries. Event may have resulted in staff loss, causing serious consequences.

Event may impact on achieving a performance target where a major milestone was missed by more than 3 months and subsequent interruption over several days to customers.



Assessment of impact / severity

Rating Financial Reputation Stakeholders Customers

4

Ma

jor

Event would have very serious financial impact (>8% on budget/ income or >8%) on either income or budget.

Medium-term public impact with minor political implications. From a regulatory perspective, fines or penalties >R150k may have been suffered. Customers may have been impacted resulting in complaints with media coverage (national TV headlines) and loss of service >1 month.

Employees may have suffered multiple permanent disabling injuries. Event may have resulted in staff loss, causing very serious consequences.

Event may impact on achieving a performance target where a major milestone was missed by more than 6 months, resulting in a major customer impact.

5

Ca

tas

tro

ph

ic

Event would have catastrophic financial impact (>15-25% on budget/income or >15%) on either income or budget.

Long-term impact on public memory and major political implications. From a regulatory perspective, fines or penalties >R500k may have been suffered. Customers may have been impacted resulting in complaints with media coverage (national TV headlines) and loss of service >6 months.

Employees may have suffered fatalities. Event may have resulted in staff loss, causing catastrophic consequences.

Event may impact on a performance target, where a major milestone was missed by more than 8 months to over 1 year.

The table below shows the criteria used to assess the likelihood of the risk occurring:

The product of this stage one assessment of impact and likelihood is an "Inherent Risk Score", which can range from a minimum of 1 to a maximum of 25, by multiplying the frequency and impact scores.

Residual Risk

Residual Risk (RR) is the remaining risk after controls are put in place. In order to determine the

Residual Risk Rating, management must rate the effectiveness of their controls in mitigating the

risk.

Rating Likelihood Descriptor

Description Probability

5 Almost Certain Event has occurred within the last year repeatedly.

The event is certain to occur within this financial year.

4 Likely Event has occurred within the last financial year.

The event is likely to occur within this financial year.

3 Possible

The event has a probability of occurring at some time, in the next year.

Event has been recorded within organization as well as within the sector in the last 2 years.

2 Unlikely

Very few recorded or known incidents. Reasonable opportunity to occur or has occurred within other organizations within sector.

The event may occur at some time, within the next 2 years.

1 Rare Event may occur in exceptional circumstances. No recorded incidents or little opportunity for occurrence.

No event recorded in the last 3 years.



CONTROL EFFECTIVENESS ASSESMENT

Qualification Criteria Rating

Excellent

Control addresses risk, is officially documented and in operation

0.20

Good

Control addresses risk, but documentation and / or operation of control could be improved

0.40

Fair

Control addresses risk, at least partly, but documentation and / or operation could be improved

0.75

Poor

At best, control addresses risk, but is not documented or in operation; at worst control does not address risk and is neither documented nor in operation

0.90

Risk Measurement

Inherent risk and residual risk will be measured in term of the table depicted below. MEASUREMENT

Categories of Risks

Risks will be categorized in terms of their Inherent Risk (IR) and Residual Risk (RR) risk score as per the table depicted below. CATEGORISATION

Rating Risk Score Colour

Very High 17-25 Red

High 11-16 Amber

Moderate/ Medium 6-10 Yellow

Low Below 5 Green

Stage two – Development of Risk Drivers and Risk Casual Model Risk drivers are those elements which tend to be the cause of the risk occurring. Risk drivers are a key process in risk management as they provide an in-depth understanding of the risk. Analysis of the drivers‟ lead to the effective monitoring of the risk as well as the development of control measures to mitigate or manage the risk. These will be measured and monitored as per the next phase of this project. The formulation of risk drivers is to assist with the understanding of the risk (i.e. make the risk

Impact X Probability = Inherent Risk

Inherent Risk X Control Effectiveness = Residual Risk



more tangible) and in the formulation of controls, both pre- and post and to manage / minimise the risk drivers, which in turn reduces the overall headline risk. If the drivers are not identified, then the process only provides a snapshot of the risks at a point in time.

Monitoring and Reporting

Continuous monthly, quarterly and annual reporting on progress with status of action items is in place.

Auditing

This process will be audited continuously, with a firm focus on continuous improvement. The diagrams below depict the heat map of the top 10 Strategic risks at both inherent and residual levels.

1

2

3

4

5 6

7 8

9

10

1. non-technical losses 2. theft and vandalism 3. stakeholder perceptions 4. 'clean' audit 5. ineffective maintenance plan 6. interrupted distribution of electricity 7. non-compliance to legislations, regulations and governance, 8. inability of the capital Programme 9. respond to disaster 10. loss of life

Likelihood

Impact



Heatmap Top 10 Risks – Residual

Strategic Risks Report In line the strategic risk review process, we have communicated the approved Enterprise Risk Policy to the entire business, and updating the strategic risk register with updates from the respective risk owners. Furthermore, internally we started the process of determining and setting risk appetite and tolerance levels for all the identified risk categories.

Refer to Annexure – Strategic Risk Register

1

2 3

4

5 6

7

8

9

10

Impact

Likelihood

1. non-technical losses 2. theft and vandalism 3. stakeholder perceptions 4. 'clean' audit 5. ineffective maintenance plan 6. interrupted distribution of electricity 7. non-compliance to legislations, regulations and governance, 8. inability of the capital Programme 9. respond to disaster 10. loss of life



8. GOVERNANCE

(Responsible person: Company Secretary)

Board Meetings

ALL BOARD & COMMITTEE MEETINGS FOR THE MID-YEAR OF THE FINANCIAL YEAR Directors

&

Independent Audit Committee

Members

Board HR Risk,

Assurance

&

Compliance

Social &

Ethics

Quarterly

Review

Audit Ad Hoc

NO OF MEETINGS HELD IN QUARTER 5 3 2 2 2 4 6

Directors

Rev F Chikane 4 - - 2 2 - 1 of 1

Mr N Galawe 5 - 2 2 - - 6

Mr Q Green 5 3 2 2 2 4 4

Ms Z Hlatshwayo 2 - - 2 0 - -

Mr N Hlubi 5 - - - 2 4 -

Ms N Mohlala 5 3 - - 2 - -

Mr K Mokhobo 4 3 - 2 - 3 6

Mr D Naidu 5 3 2 - - - 6

Dr Y Ndema (*resigned 30 Sep 2014) 2 of 2 - 1 of 1 - 1 of 1 - -

Mr T Sithole 2 3 2 - - 3 -

Mr S Xulu 3 2 2 2 2 3 4

Independent Audit Committee

Ms L Fosu - 1

Mr W Hattingh 2 of 2 3

Mr H Moolla 2 of 2 4

DATES OF MEETINGS :

29 Aug „14

19 Sep „14

10 Nov „14

29 Nov „14

09 Dec „14

25 Jul „14

27 Oct „14

09 Dec „14

28 Jul „14

29 Oct „13

11 Aug „14

03 Nov „14

14 Jul „14

13 Oct „14

12 Aug „14

26 Aug „14

21 Oct „14

26 Nov „14

4 Sep „14

16 Sep „14

01 Oct „14

30 Oct „14

07 Nov „14

10 Dec „14

Directors and Top Management remuneration

Report on amounts of expenditure on directors‟ remuneration per director for the mid-year. Executive Director

SURNAME Position Total R’000

Mr S Xulu Managing Director *1 535

Mr Q Green Director: Finance 1 213

2 748

(*Note: The amount includes the late payment of bonus for the 2012/2013 financial year which was paid to the individual in July of this financial year (2014/2015).)



Non-Executive Directors

SURNAME POSITION TOTAL R’000

Rev F Chikane Chairperson 231

Mr N Galawe Board Member 133

Ms Z Hlatshwayo Board Member 67

Mr N Hlubi Board Member 186

Ms N Mohlala Board Member 114

Mr K Mokhobo Board Member 149

Mr D Naidu Board Member 146

Dr Y Ndema Board Member 79

Mr T Sithole Board Member 107

1 212

Independent Audit Committee Members


Ms L Fosu Independent Audit Member 34

Mr W Hattingh Independent Audit Member 60

Mr H Moolla Independent Audit Member 67

161

Executive Committee Members


Ms S Mafora Director: Human Resources *935

Ms F Msiza Director: Risk, Assurance & Compliance 1 060

Mr M Nzimande Director: Engineering Services 916

Mr T Nkgoedi Director: Retail Services *950

Mr L Pieterse Director: Engineering Operations *906

Mr M Smith Company Secretary *682

5 449

(*Note: The amounts include the late payment of bonus for the 2012/2013 financial year which was paid to the individuals in July of this financial year (2014/2015).)

Board Functioning and Financial Management

Any director movements in that quarter including resignations, new appointments, reshuffling of board members in board committees Dr Yondela Ndema resigned from the Board at the end of the 1

st Quarter of the financial year.

Report on any special resolutions passed by the Board in that quarter and whether such have been registered with the Registrar

The Board passed no special resolutions during the quarter under review. Confirmation that no loans or advances have been made to the directors in this quarter It is confirmed that no loans or advances have been made to the directors.



Confirmation that a register of directors’ declarations of conflict of interest is maintained (Entities should provide a report where directors has declared an interest in a contract by the entity). It is confirmed that a register of directors‟ declarations of conflict of interest is maintained. There were no interests declared by any director in any contract with the entity. Report on disposal of capital assets.

There has been no report of any disposal of capital assets.



Abbreviation/ Acronym

Explanation/ Description

AA Affirmative Action

ABC Aerial Bundled Conductor

ADMD After Diversity Maximum Demand

AFS Annual Financial Statement

AG Auditor General

AMR Automated Meter Reading

AMI Automated Meter Infrastructure ( Smart meter)

BBS Behaviour Based Safety

BBBEE Broad Based Black Economic Empowerment

CAIDI Customer Average Interruption Duration Index. The average outage duration that any given customer would experience in a year. Computed as follows: SAIFI /SAIDI

CAIFI Customer Average Interruption Frequency Index. Measures the average number of interruptions per customer interrupted per year. Computed as follows: Total number of customer interruptions/customers experiencing one or more interruptions

Capex Capital Expenditure

CCMA Commission for Conciliation, Mediation and Arbitration

COJ City of Johannesburg

DIFR Disabling Injury Frequency

DoE Department of Energy

DME Department Mineral and Energy

DSM Demand Side Management

EAP Employees Assistant Programme

EPWP Expanded Public Works Programme

EWSETA Energy and Water Sector Education and Training Authority

FBE Free Basic Electricity

FY Financial Year

GDS Growth and Development Strategy

GRAP Generally Recognised Accounting Practice HIV Human Immunodeficiency Virus

HR Human Resources

HV High Voltage

IBT Inclining Block Tariff

IDP Integrated Development Plan

ISO Internal Organisation for Standardization

JMPD Johannesburg Metro Police Department

KPA Key Performance Area

KPI Key Performance Indicator

kWh Kilowatt Hours

LLF Local Labour Forum

LPU Large Power User

MD Managing Director

MDMS Master Data Management System

MOE Municipal Owned Entity

MRQC Meter Reading Quality Control

MV Medium Voltage

MVA Motor vehicle accident

MW Megawatts

MYPD Multi Year Price Determination

NERSA National Energy Regulator of South Africa

NIHL Noise Induced Hearing Loss NRS National Rationalised Standards

NT National Treasury

OPEX Operating Expenditure

PCons Public Contributions

R&CRM Revenue and Customer Relationship Management

RAC Risk Assurance and Compliance Department

RAT Remote Access Terminal



RNC Revenue Nerve Centre

SABS South African Bureau of Standards

SAIDI System Average Interruption Duration Index. Total duration for an interruption for an average customer for the year. Computed as follows: Customer interruptions duration/Total number of customers served

SAIFI System Average Interruption Frequency Index. The average number of times that a system customer experiences an outage during the year. Computed as follows: Customer interruptions/Total number of customers serviced

SANS South Africa National Standards

SAP System Application and Production in Data Processing

SCM Supply Chain Management

SMD Scrap Metal Dealers

STEP Service Delivery, Transformation, Excellence, Performance SHEQ Safety Health Environment and Quality

SLA Service Level Agreement

SWH Solar Water Heating

TAT Turn Around Time

USDG Urban Settlement Development Grant

VDO Vehicle Display Output

YTD Year to Date

chairpersons quarterly report to the mmc eisd mid-year report … reports/2014-15 mid … · the...

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