1. and 1st Quarter 2014/5 financial and non-financial performance
CIPC Annual Report 2013/4
and 1st Quarter 2014/5 financial and non-financial performance
A Ludin
19 September 2014

2. Introduction Sustained and rapid transformation since 2011;
Building an aeroplane while flying it
maintaining and improving service delivery while building a new institution;

3. Key achievements for 2013/4
New structure and policies (July–August 2013)
Increased posts from 606 to 640
New remuneration framework
New service delivery model and channels
FNB integrated company registration and account opening (June 2013)
Self-service centre and self-service terminals (January 2014)
ICT stabilisation
New annual return system (August 2013)

4. Companies, CCs and Co-ops

5. Patents, Designs and Trade Marks Applications

6. E-filing uptake and turnaround

7. Business Rescue

8. Investigation and enforcement
156 compliance notices issued
Failure to have accurate and complete accounting records;
Annual financial statements not prepared within 6 months of financial year end
AGMs not held within 15 months of previous AGM and no time extension
Investigations:
Auditor conduct
Unauthorised director or member changes
Governance in State-Owned Enterprises

9. Self-service centre
Self-service terminals offer huge opportunity for service delivery and will be expanded across the country

10. SST services Customer registration; Password reset;
Company registration;
Annual returns;
Address changes;
Financial year end changes;
Disclosure certificates;
Director changes (coming soon)

11. SST company registration
Customer Registration
Company registration
Registration certificate
No paper required!

12. Programme1: Business Regulation and Reputation
Output
Measure/Indicator
Actual achievement 2012/2013
Baseline 2012/2013
Planned Target 2013/2014
Actual Achievement 2013/2014
Deviation from planned targets to actual achievement for 2013/2014
Reason for Variance
STRATEGIC GOAL 1: To improve the competitiveness of the South African economy by enhancing the reputation of South African businesses and the South African environment
STRATEGIC OBJECTIVE 1.1 To encourage the formalisation of small businesses and their identity
Companies registered manually within the published service standard
% of companies registered manually within the published service standard
Not reported
95% of companies registered manually within 25 working days
85% of companies registered manually within 25 working days
92%
Actual achievement was 7% higher than the set target.
Target was set lower to mitigate the risks of challenges such as system slow response time and high volumes. These were well managed and resulted in improved performance.
Companies registered electronically within the published service standard
% of companies registered electronically within the published service standard
95% of companies registered electronically within 3 working days
85% of companies registered electronically within 3 working days
98%
Actual achievement was 13% higher than the set target.
Target was set lower to mitigate the risks of challenges such as system slow response time and high volumes. These were well managed and resulted in improved performance.
Co-operatives registered manually within the published service standard
% of co-operatives registered manually within the published service standard
23% of co-operatives registered manually within 21 working days
85% of co-operatives registered manually within 21 working days
New trade marks applications allocated an official application number within the published service standard
% of new trade marks applications allocated an official application number within the published service standard
90% of new trade marks applications allocated an official application number within 5 working days
85% of new trade marks applications allocated an official application number within 5 working days
96%
Actual achievement was11% higher than the set target.
Target was set to lower to mitigate the risks of challenges such as system slow response time and high volumes. These were well managed and resulted in improved performance. The introduction of e-filing also made a positive contribution.
STRATEGIC OBJECTIVE 1.2 To encourage the maintenance of high standards of corporate governance, transparency and brand protection
Companies that have complied with the filing of annual returns as prescribed
% of companies that have complied with the filing of annual returns as prescribed
70%
75%
52%
Actual achievement was 23% lower than the set target.
Availability and accuracy of and cell phone contact details for companies and close corporations and its respective directors or members makes sending reminders difficult. The deregistration notification process is also very costly and not so effective.
Investigations completed within the published service standard
% of investigations completed within the published service standard
33% of investigations completed within 135 working days
85% of investigations completed within 135 working days
60%
Actual achievement was 25% lower than the set target.
Due to the fact that investigations of most of these cases are dependent on issues outside the control of the CIPC investigators, most cases take long to finalise.

13. Programme 2: Innovation and Creativity Promotion
Output
Measure/Indicator
Actual achievement 2012/2013
Baseline 2012/2013
Planned Target 2013/2014
Actual 2013/2014
Deviation from planned targets to actual achievement for 2013/2014
Reason for Variance
STRATEGIC GOAL 2: To contribute to a knowledge-based economy and competitive local industries by promoting innovation, creativity and indigenous cultural expression and knowledge
STRATEGIC OBJECTIVE 2.1: To promote the protection and commercial exploitation of innovations in key sectors
New patent applications allocated an official application number within the published service standard
% of new patent applications allocated an official application number within the published service standard
Not reported
87% of new patent applications allocated an official application number within 5 working days
85% of new patent applications allocated an official application number within 5 working days
98%
Actual achievement was 12% higher than the set target.
The introduction of e-filing and risk mitigation of challenges such as system slow response time and high volumes resulted in improved performance.
New design applications allocated an official application number within the published service standard
% of new design applications allocated an official application number within the published service standard
98% of new design applications allocated an official application number within 5 working days
85% of new design applications allocated an official application number within 5 working days
97%
STRATEGIC OBJECTIVE 2.2: To protect our cultural heritage and support a strong competitive South African creative industry that provides benefit to local artist
New copyright in film applications allocated an official application number within the published service standard
% of copyright in film applications allocated an official application number within the published service standard
64% of copyright in film applications allocated an official application number within 2 working days
85% of copyright in film applications allocated an official application number within 2 working days
57%
Actual achievement was 28% lower than the set target.
The introduction of e-filing resulted in system challenges that resulted in delays in processing applications.

14. Programme 3: Service Delivery and Access
Output
Measure/Indicator
Actual achievement 2012/2013
Baseline 2012/2013
Planned Target 2013/2014
Actual Achievement 2013/2014
Deviation from planned targets to actual achievement for 2013/2014
Reason for Variance
STRATEGIC GOAL 3: To promote broader economic participation
STRATEGIC OBJECTIVE 3.1: To promote broader formal economic participation by enhancing service delivery and extending the reach of CIPC
Website availability for on-line filings 24/7
% website availability for on-line filings 24/7
Not reported
Not measured
90%
92%
Actual achievement was 2% higher than the set target.
Several ICT stabilisation initiatives resulted in improved performance.
Calls answered during the reporting period
% of calls answered during the reporting period
28%
50%
31%
Actual achievement was 19% lower than the set target.
Although the implementation of the Swedish Model resulted in improved performance from a 30% in Quarter 1 to 42% in Quarter 3, a number of factors contributed to a decline in call taking from December to the end of the financial year. These included operational work pressure, the impact on processing targets and the ability of staff to deal with difficult customers. In addition, it seems that staff were discouraged to take calls by one of the representative trade unions
STRATEGIC OBJECTIVE 3.2: To build an enabling and intelligent work environment anchored in a governed and sustainable organisation
Operating expenditure covered by operating revenue year to date (YTD)
% of operating expenditure covered by operating revenue year to date (YTD)
140%
124%
100%
The target was achieved as set.
N/A

15. Summary of financial performance
2013/2014 Actual income – R 455, 611, 000 (R293, 300, 000 – 52% was derived from Annual Returns.
2013/2014 Actual expenditure – R 309, 868, 000
2013/2014 Q1 – Surplus – R145, 743, 000

16. 2014/5 Q1 Performance 23 performance targets set
2014/2015 Annual target for overall performance = 80%
Quarter 1 target for overall performance = 70% (to allow the organization to strengthen its implementation efforts over time)
Quarter 1 actual performance = 77% (18 targets met)

17. 2014/15 Quarter 1 Actual Performance
Programme1: Business Regulation and Reputation (Strategic Objective 1.1)
Performance Measures
2014/15 Annual Target
2014/15 Quarter 1 Target
2014/15 Quarter 1 Actual Performance
GOAL 1: Improve the competitiveness of the South African business environment
Strategic Objective 1.1 Encourage the formalisation of South African businesses and their identity
% of companies registered manually within 25 working days
85%
83%
% companies registered electronically within 3 working days
98%
% changes in company director details processed manually within 30 working days
91%
% changes in company director details processed electronically within 5 working days
% of co-operatives registered manually within 21 working days
90%
84%
% trade marks applications allocated an official application number within 5 working days
99%

18. 2014/15 Quarter 1 Actual Performance
Programme 1: Business Regulation and Reputation (Strategic Objective 1.2)
Performance Measures
2014/15 Annual Target
2014/15 Quarter 1 Target
2014/15 Quarter 1 Actual Performance
GOAL 1: Improve the competitiveness of the South African business environment
Strategic Objective 1.2 Encourage the maintenance of high standards of corporate governance, transparency and brand protection
% companies with an active business status, that have filed annual returns by the end of the reporting period (year to date)
60%
30%
34%
% complaints received of which a determination to close or refer the matter to another regulatory authority or to be directed in terms of the Act to investigate the matter is made within 30 working days
80%

19. 2014/15 Quarter 1 Actual Performance
Programme 2: Innovation and Creativity Promotion (Strategic Objective 2.1)
Performance Measures
2014/15 Annual Target
2014/15 Quarter 1 Target
2014/15 Quarter 1 Actual Performance
GOAL 2: Promote innovation, creativity and indigenous cultural expression
Strategic Objective 2.1: Promote the protection and commercial exploitation of innovations in key sectors
% of manually and electronic patent applications allocated an official application number within 5 working days
90%
98%
% of manually and electronic design applications allocated an official application number within 5 working days
Strategic Objective 2.2 To protect our cultural heritage and support a strong competitive South African creative industry that provides benefit of local artist
% of manual and electronic copyright in film applications allocated an official application number within 5 working days
100%

20. Programme 3: Service Delivery and Access (Strategic Objective 3.1)
Performance Measures
2014/15 Annual Target
2014/15 Quarter 1 Target
2014/15 Quarter 1 Actual Performance
Goal 3: Promote broader formal economic participation
Strategic Objective 3.1: Provide easy access to credible, reliable and relevant information and advice and secure, value-added services
% of on-line company registrations transactions
90%
60%
89%
% of on-line director changes transactions
30%
82%
% of on-line trade marks applications
91%
% of on-line patents applications
50%
42%
% of on-line designs applications
28%
% of on-line copyright in film applications
100%
% website availability for on-line filings 24/7
95%
98%
% of calls answered that come through the call centre number during the reporting period
60% 
21%
Number of self-service terminals (SSTs) installed and operational 45 13 12

21. 2014/15 Quarter 1 Actual Performance
Programme 3: Service Delivery and Access (Strategic Objective 3.2 & 3.3)
Performance Measures
2014/15 Annual Target
2014/15 Quarter 1 Target
2014/15 Quarter 1 Actual Performance
Goal 3: Promote broader formal economic participation
Strategic Objective 3.2: Build an enabling and intelligent work environment anchored in a governed and sustainable organisation
% of operating expenditure covered by operating revenue year to date (YTD)
100%
% of positions of the approved structure filled
75%
70%
Strategic Objective 3.3: Improve the reputation and organisational performance of CIPC
% of APP targets met
80%
77%

22. Targets not met Performance Measure Reason for underperformance
Planned action/Comments
Company registrations
Delays due to the implementation of the indexing solution.
After the implementation of the indexing solution, normal operations resumed, and staff indicated that they were able to process faster.
Co-operatives registrations
Delays were due to system down times.
The ICT stabilization programme continues to ensure that system downtimes are minimized.
Patent e-filings
Low number e-filings is due to the big firms, Spoor and Fisher and Adams & Adams not utilizing the system yet.
Efforts are in progress to get them to utilize the system.
Call answer rate
Staff is experiencing challenges adjusting and balancing the taking of calls and normal production.
The Query Resolution Team (QRT) chaired by the Commissioner has identified several key areas and specific task teams to address such issues.
SSTs
Thirteen (13) SSTs have been installed. One SST has been installed in Maponya Mall, as part of a partnership with the National Youth Development Agency (NYDA) but it is not operational yet because the Department of Home Affairs (DHA) has reservations about providing access to their database for biometric finger print scanning which is the gateway to all transactions on the SST.
The NYDA have to now on their own accord acquire authorisation from DHA after which the online services at this site can commence.

23. Electronic transactions growth
Service
% of on-line transactions in 2013/14
% of on-line transactions in 2014/15 Q1
Company Registration
81%
89%
Director changes
Not measured
82%
Trade marks applications
49%
91%
Patent applications 9%
42%
Designs applications 8%
28%
Copyright in film applications
14%
100%

24. Business Rescue Operational BR Proceeding Applications 2011 - 2012
Total
Business Rescue Proceedings Started
313
424
390 84
1211
Invalid filings and Nullity
130 44 40 8
222
Business Rescue Proceedings Ended
143
188
116
447
Terminations of Business Rescue (COR 125.2) 52 76 42
170
Substantial implementation of Business Rescue (COR 125.3) 55 78 36
169
Liquidation 34 27 37 98
CO_Set Aside BR 2 7 1 10
Active
236
274
764

25. Financial Performance

26. Overall operating results
As of June 30, 2014
2014/2015
Description
Total Budget
Pro-rata
Actual
Variance
Var %
Commitment
Available budget
Purchase orders
R'000 %
Income
Revenue
98 361
2 762
(3%)
Other 51 0%
(51)
Interest
43 000
10 750
19 950
9 200
(86%)
23 050
Total Income
12 013
(11%)
Operating Expenditure
73 997
(37 373)
(36%)
67 446
Special Projects - OPEX Allocation
22 043
5 511
183
(630)
5 958
15 902
Total Expenditure
74 179
35 401
32%
73 404
Capital Expenditure
Operational: Capital Expenditure
26 100
6 425
2 901
(2 962)
(46%)
6 486
16 713
Total: Operating and Capital expenditure
77 080
38 925
34%
79 890
Closing Surplus / (Deficit) - OPEX Budget
(14 306)
(6 894)
44 044
50 938
739%
(79 890)
21 540
Retained Earning (To fund special projects) **
5 328
97%

27. Revenue Report

29. ANNUAL RETURN FEES AND PENALTIES

30. Expenditure Report

31. Analysis of financial performance: Expenditure

33. Statement of financial position
Companies and Intellectual Property Commission
Statement of Financial Position
As at June 30, 2014
Note
Jun-2014
Jun-2013
R 000
Assets
Non-current assets 1
42,438
20,359
Property, plant and equipment
31,776
12,349
Intangible assets
10,662
8,010
Current assets
1,411,654
1,269,499
Inventories 2 -
649
Receivables from exchange transactions 3
674
237
Other Receivables
652
1,119
Cash and cash equivalents 4
1,410,328
1,267,922
Non-current assets held for sale 45
Total assets
1,454,092
1,289,858
Equity and liabilities Equity
1,345,155
1,194,636
Accumulated Surplus
Current Liabilities
108,937
95,222
Provisions 5
24,647
20,742
Payables from exchange transactions 6
6,299
10,514
Trade and other payables from non-exchange
transactions
77,991
63,966
Total Equity and Liabilities

34. Statement of Cash Flows
Companies and Intellectual Property Commission
Statement of Cash Flows
for the year ended June 30, 2014
Jun-2014
Jun-2013
R 000
Cash flows from operating activities
127,700
110,557
Revenue from exchange transactions
33,056
50,071
Revenue from non-exchange transactions
74,694
44,677
Interest income
19,950
15,809
Payments
(101,277)
(82,955)
Employee cost
46,528
45,606
Suppliers
(54,749)
(37,349)
Net cash flows from operating activities
26,424
27,602
Cash flows from investing activities
(2,901)
(154)
Acquisition of property, plant and equipment
(2,840)
(25)
Proceeds of diposal of property,plant - 90
Acquisition of Intangible assets
(61)
(219)
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
23,523
27,448
Cash and cash equivalents at beginning of period
1,386,805
1,240,474
Cash and cash equivalents at end of period
1,410,328
1,267,922

35. Going forward The focus for the rest of the year will be on:
Roll out of SSTs
Redesign of website (query resolution system which should reduce the number of calls);
Accessibility and ease of transacting through modern, effective channels to improve the relevance and value to Customers and Stakeholders;
Enforcement and compliance efforts demonstrating improved compliance.
Meeting our targets

36. A paperless back office
Picture 

37. Query Resolution Strategy
proper training of call takers;
conducting a time and motion study regarding staff workload;
addressing the ICT and telephony challenges;
new telephony system (including a work force management system to manage staff performance) and CIPC ownership of such telephony system.

38. New website

39. New e-services

40. JSE service
New dedicated service for listed companies and their subsidiaries:
Share capital changes
Name changes
Other MOI amendments
Dedicated office at the JSE in near future

41. In conclusion
Foundations for new model of public service delivery established
Benchmarks set for world class service
Progressive change with tangible results