Mr. Abbey Chikane Executive Chairman Annual Report financial year Portfolio Committee of Human Settlements, Old Assembly 25 October 2016

Transcription

1 Mr. Abbey Chikane Executive Chairman Annual Report financial year Portfolio Committee of Human Settlements, Old Assembly 25 October /24/2016 1

2 Table of Content 1. Organogram 2. NHBRC mandate 3. Strategic Direction 4. Products and services offered 5. Intervention to support delivery 6. Housing consumer protection process 7. Regulation process 8. Governance structure 9. Key focus of NHBRC 10. Valuable Final Products 11. Registrations and renewals 12. Enrolment and late enrolment 13. Complaints and conciliation 10/24/2016 2

3 Table of Content 14. Percentage of complaints resolved 15. Conciliations received and closed between home builder an housing consumer 16. Non subsidy inspection stages and number of houses completed 17. Conciliation received and closed between housing consumer and home builders 18. Remedial works per stage 19. Subsidy sector 20. Subsidy inspection stages 21. Enforcement and compliance 22. Disciplinary hearings 23. Growth rate in suspension 24. Training programmes 25. Employment equity chart 26. Finance 10/24/2016 3

4 Organogram Company Secretary COUNCIL Executive Manager Communications and Stakeholder Chief Audit Executive CHIEF EXECUTIVE OFFICER Communication Manager Strategy & Performance Information Manager Stakeholder Relations Manager Chief Operations Officer Risk Manager Executive Manager Business Services Executive Manager Corporate Services Executive Manager Centre for Research & Housing Innovation Executive Manager Legal Compliance & Enforcement Chief Financial Officer Project Management Office Technical and Inspectorate Service New Division = Customer Services Human Capital Facilities Business Manageme nt Solutions Senior Manage Policy & Development Research & Development Section Training Eric Molobi School of Excellence Enforcement Section Risk Manager Corporate Legal Services Regulatory Compliance Section Finance Manager Fund Manager Supply Chain 10/24/2016 4

5 NHBRC Mandate NHBRC established in terms of the Housing Consumers Protection Measures Act, 1998 (Act No 95 of 1998) (as amended) The objectives of the NHBRC as set out in the Act are to: a) represent the interests of housing consumers by providing warranty protection against defects in new homes; b) regulate the home building industry c) provide protection to housing consumers in respect of the failure of home builders to comply with their obligations in terms of this Act; d) establish and to promote ethical and technical standards in the home building industry; e) improve structural quality in the interests of housing consumers and the home building industry; f) promote housing consumer rights and to provide housing consumer information; g) communicate with and to assist home builders to register in terms of this Act; h) assist home builders, through training and inspection, to achieve and to maintain satisfactory technical standards of home building; i) regulate insurers contemplated in section 23 (9) (a); and j) in particular, to achieve the stated objects of this section in the subsidy housing sector. 10/24/2016 5

6 Strategic Direction Vision A world class home builders warranty organization that ensures the delivery of sustainable quality homes. Mission Strategy Strategic objectives To protect the housing consumer and regulate the home building environment by promoting innovative home building technologies, setting home building standards and improving the capabilities of home builders 1. To improve visibility and accessibility in the market while enhancing interaction with our stakeholders. 2. To position the NHBRC as a leader in knowledge creation, technical and technological building solutions through strategic partnerships. 3. To provide diversified services and products in line with changing building requirements and needs 1. To grow, protect and sustain the NHBRC warranty fund 2. To provide innovative quality funds and services that will delight the customer 3. To strengthen the NHBRC operating processes, systems, and procedures 4. To create a learning environment produce products and services

7 Products and Services Offered Enrolment of new homes; Late Enrolment of homes; Registration of homebuilders; Renewal of Registration of homebuilders; Inspections of homes (subsidy / non subsidy); Forensic engineering investigations and assessment of houses; Training; Home building dispute resolution; Litigation and legal advisory services; and Geo-technical and materials engineering. 10/24/2016 7

8 Interventions by NHBRC to support delivery 1. Engineers provided by NHBRC in all the provincial human settlements departments to speed up the subsidy enrolments. 2. Plans are in place to ensure that subcontractors are registered with NHBRC. 3. NHBRC testing building materials at Eric Molobi testing center for quality control and to reduce the use of substandard materials in the sector. 4. Turnaround for resolving complaints have been improved for 180 days to 30 days. 5. Implementation of the inspection model to ensure that all homes enrolled with NHBRC are inspected and qualify for a warranty.

9 HOUSING CONSUMERS PROTECTION PROCESS 10/24/2016 9

10 Regulation process 10/24/

11 Governance Structure COUNCIL COMMITTEES OF COUNCIL Research and Housing Innovation Committee Industry Advisory Committee Technical Advisory and Claims Committee Audit Committee and Risk Management Committee Human Capital and Remuneration Committee Registration Committee Bid Adjudication Committee Fund and Finance Committee Disciplinary Hearings Committee

12 Governance Structure of NHBRC Committees of Council are as follows: Fund Advisory and Finance Committee Registration committee Audit and Risk Management Committee Technical Claims and Advisory Committee Disciplinary Steering Committee Human Capital and Remuneration Committee Industry Advisory Committee Bid Adjudication Committee (Tender Committee) Research and Housing Innovation Advisory Committee

13 Key focus for NHBRC NHBRC has set itself short-term to medium term plans in order to address a number of short-comings in the execution of the mandate. That is to:- Implementation and full execution of the inspection model Alignment of NHBRC deliverables with the MTSF (Medium Term Strategic Framework) targets for Provide Technical Support at provinces and municipalities to fast track subsidy enrolment Enforcement and Compliance of the industry with provisions of the Housing Consumers Protection Measures Act,1998( Act No.95 of 1998). Implementation of Training Strategy Grow and Sustain the Warranty Fund Operationalization of the Centre for Research and Housing Innovation 10/24/

14 Valuable Final Products VFP Target Perform Variance Varian ance ce % Reason for variance Registration of home builders % Target met Renewal of registration % NHBRC has no control over who comes to renew their registration Enrolment % Target met Late enrolment % Target met Inspection (Subsidy) % Inspection depends on houses that are constructed

15 Valuable Final Products VFP Target Perform ance Variance Variance % Reason for variance Inspection (Non-subsidy) % Target met Training of home % Target met builders Training of youth % Target met Project enrolment % NHBRC receives homes to enrol from the Department Home enrolment % NHBRC receives homes to enrol from the Department Consolidation % NHBRC receives homes to enrol from the Department

16 Registration and Renewal of Registration / / / / / / /16 Registration Renewal Total

17 966 26,903 2,130 31,458 32,424 37, ,651 42,792 1,906 44,698 48,879 1,743 50,622 51,149 1,483 52,632 49, ,640 29,033 Enrolment and Late Enrolment 60,000 50,000 40,000 30,000 20,000 10, / / / / / / /16 Enrolments 26,903 31,458 37,671 42,792 48,879 51,149 49,612 Late Enrolments 2, ,906 1,743 1, Total 29,033 32,424 38,651 44,698 50,622 52,632 50,640

18 Complaints and Conciliations / / / / / / /16 complains lodged complaint closed

19 45% 53% 64% 75% 76% 90% 98% Percentage of complaints resolved 120% 100% 80% 60% 40% 20% 0% 2009/ / / / / / /2016

20 Conciliations received and closed between home builder and housing consumer / / / / / / /16 Conciliations received Conciliations closed

21 Non-Subsidy Inspections Stages and Number of houses inspected 350, , , , , , , , , , , , , , ,000 76,337 62,779 87,932 78,966 50,000-15, / / / / / / /16 Non-subsidy Inspections Non-subsidy houses Inspected

22 Remedial works per stages REMEDIAL STAGES NUMBER OF UNITS RECTIFIED PER STAGE Foundations 6 Substructure 19 Super-structure 48 Roof 3 Drainage 1 Settlement 18 Total Houses 95

23 Subsidy sector

24 Subsidy Inspection Stages Number of subsidy inspections conducted 300, , , , , , , , , ,000 50, / / / / /16 Subsidy Inspections

25 Enforcement and Compliance in the industry NHBRC has stablished a fully fledged division to ensure that: There is an efficient and effective execution of the NHBRC s legislative mandate by ensuring compliance with the applicable legislative framework, enforcement of the Act and provision of cutting edge legal advisory services. Key Focus Areas To ensure compliance with applicable legislative and regulatory framework; To ensure enforcement with the Act through prosecution of defaulters; To implement an efficient contract management system; To ensure prudent litigation management system (including interdicts and recoveries); and To provide cutting edge legal advisory services.

26 Disciplinary Committee hearings Provinces Suspensions Total DC Hearings Not Guilty Verdict Warning Fine Imposed Registration Withdra wn Matters Postpon ed / Struck off the Roll Charges Withdra wn WC KZN GP EC MP LP NW NC FS TOTAL /24/

27 Growth rate in suspension Provinces 2013/ / /2016 TOTAL WC KZN GP EC MP LP NW NC FS TOTAL /24/

28 Training Programmes 2015/16 PERFORMANCE PROGRAMME EC FS GP KZN MP NC LP NW WC YTD PERFOR MANCE Youth Male Female Total Military Veterans Male Female Total Artisans Male Female Total People with Male Disabilities Female Total Women Total GOVERNMENT PROGRAMME S TOTAL Male Female Total /24/

29 Employment Equity Chart % 14 6% 3% 7% 100% 0 African Coloured Indian White Total Number of employees Race % 85% 6% 3% 7% 100% 10/24/

30 Annual Financial Statements Analysis For the year ended 31 March 2016

31 Salient features (Audited results) Warranty Fund profit of R19m (second year of profit) Growth in the investment portfolio amounts to R258m for 2015/16 Net Cash generated from operations amounts to R59m Cash invested amounts to R150m Total income earned of R800m (after actuarial adjustments) Operating profit amounts to R22m against a budget of R 128k Improved risk profile of the Warranty Fund Administrative expenses have increased to R714m in 2015/16 Irregular expenditure has reduced to R 13.6 million in 2015/16 from R53m in 2014/15

32 Income statement 6 years Operating profit amounts to R22m Net profit amounts to R189m NHBRC Income Statement 5 year view R R R R R R Insurance premium revenue Fee revenue Technical services revenue Other income Net income % 0% 79% -50% 101% Insurance claims and loss adjustment expenses Inspections and accreditation expenses Technical services expenditure Adminstration expenses Expenses % 41% 7% -21% 27% Profit/(loss) from operating activities % -434% 241% -147% 312% Net investment income Interest receieved and investment income unrealised profit on sale of financial activities Asset management services Net profit before finance costs Finance costs Surplus for year

33 Revenue Total income earned of R800m (after actuarial adjustments) Premiums received in 2015/16 amounts to R707m Premiums earned in 2015/16 amounts to R700m

34 Operating costs Administrative expenses have increased to R714m in 2015/ to 2014, excludes outsourced inspections Increase in Admin costs is due to insourcing of inspections R R R R R R Staff costs Travelling Marketing Information technology Consulting fees Other administration costs

35 Balance Sheet 6 year view Total assets have grown by R209m after adjusting to fair values Equity has grown by R189m Total liabilities have increased by R20m NHBRC Balance sheet 5 year view R R R R R R ASSETS Non current assets Current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity LIABILITIES Non current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES

36 Cash flow - 6 year view Cash generated from operations amounts to R59m Cash invested amounts to R150m Cash in bank of R84m NHBRC Cash Flow Statement 5 year view R R R R R R Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

37 Investments 5 Years Growth in the investment portfolio amounts to R258m for 2015/16 Growth in investment portfolio over 5 years

38 Investments and operating profit 5 Years Investment income amounts to R167m for 2015/16

39 Liabilities Investment surpluses exceed technical provisions by 284% Risk profile of the Warranty Fund

40 Irregular expenditure Irregular expenditure incurred for the 2015/16 financial year is analysed as follows; Irregular expenditure for the year was R 705k, (2014: R 21 million) Two incidents of non-disclosure by employees amounting to R 524k One case of non-compliance with SCM prescripts amounting to R 180k

41 END THANK YOU Questions