Annual Report Presentation 10 October 2007 Wawa Damane, CEO

Presentation Overview Background/Introduction seda’s National Footprint Serving the SMME Sector Partnerships Major Events Human Resources Financial Issues Future

Background Consumer spending increasing significantly Small enterprises comprises 95% of all enterprises in SA Contribution of SMMEs in various sectors in 2006 Agriculture 40% Manufacturing 40% Construction (rapidly expanding) Trade (micro enterprise sector largest) 55% Transport and communication 43% Financial and business services 41% Community and Personal Services 62% Consumer spending increasing significantly

Strategic focus for 2006 /7 from expanding the network to effective service delivery through the existing network from central controlled organization to decentralized, flexible and customer-oriented organization from reliance on mono-funded approach to sustainable multi-sourcing of funds.

Our Vision: Our Mission: to be the centre of excellence for small enterprise development in South Africa Our Mission: to develop, support an promote small enterprises to ensure their growth and sustainability

Highlights for 2006 /7 Significant growth by: Assets grew from R95m to R209m Staff complement grew from 351 to 520 Expenditure increased from R172m to R405m National footprint increased from 27 to 39 branches, from 87 to 102 Enterprise Information Centres, and 13 to 23 seda Technology Centres New seda Board of Directors appointed CFO appointed – 01/09/2006 Incorporation of sTP (seda Technology Programme)

Roll-out Summary [PMG Note: photo's have been removed] Geographic spread of seda offices 2006/2007 Province Branches EICs sTP Centres Limpopo 3 11 1 Mpumalanga 5 12 Gauteng 24 6 North West 4 KZN 7 9 Free State Eastern Cape Northern Cape Western Cape 8 Total 39 102 23

Roll-out Summary Geographic spread of seda offices 2006/2007 Target Achieved Provincial Offices 9 8 Branches 39 EICs 102 sTP Centres 23

Serving the SMME sector [PMG Note: photo's have been removed] A total of 140,779 small enterprises assisted through branches and EICs 20,853 entrepreneurs benefited from training programmes 19,314 through branches and EIC’s 1,539 through National Programmes 783 clients assisted through Sector specific programmes on tourism, agribusiness and cooperatives support

Serving the SMME Sector [PMG Note: photo's have been removed] 15,117 clients assisted through the call centre 349,406 unique visits recorded on the seda web-site 98 new SMME’s established through seda Technology Programme

Examples of impact on enterprises Examples of impact on enterprises [PMG Note: photo's have been removed] Mthoko’s Internet Café Principle Plastics The Idea Factory

Sector Programmes [PMG Note: photo's have been removed] Export readiness: ABSA International Trade Bureau (OR Tambo)

Sector Programmes [PMG Note: photo's have been removed] Tourism : Crafters Training Programme

Partnerships Number of international, national and regional partnerships formed in implementing joint projects. International Partnerships (Existing) National Small Business Industries Council (NSIC) Brazilian Micro and Small Business Support Services (SEBRAE) Technonet Africa Finnish Support Programme International Partnerships (New) Belgium Unizo and Voka Jica Japan Israel Agriculture

Partnerships (cont) Local Partnerships Provincial, district and local government partners Public Institutions CIPRO, CSIR, NEF, NML, SBAB, NPI, SUNparks, various SETA’s and Technoserve Financial Institutions FNB, ABSA, Standard Bank, IDC, Khula

Major Events The Tri-nations Summit in August on Small Business between India, South Africa and Brazil [PMG Note: photo's have been removed]

Major Events The International Trade Point Federation Annual General meeting [ PMG Note: photo's have been removed]

“Technology an Economic Driver !” seda Technology Programme sTP = merger 1 April 2006 (Godisa Trust Sch 3A + National Technology Transfer Centre + Technology Advisory Centre) “Technology an Economic Driver !”

The Technology Pipeline A new concept is generated. The new concept is applied to a practical problem. The application or technology is tested, refined & validated. It may be patented or licensed. New tech is incorporated into a new or existing product, process or service. Development $ Commercialization Applied Research Basic Research Results Source: R Goldsmith, San Antonio Technology Accelerator Research: Academia = $25 Billion 8% Feds =$75 Billion 24% Industry =$200 Billion 68%

Challenges for the sTP Low rates of economic growth Weak Low entry rates of SMMEs into manufacturing sector Poor access to facilities for testing & promotion of innovator's ideas High failure rates of start-up SMMEs Poor technology support to SMMEs Outdated technologies employed by SMMEs Low rates of economic growth Weak competitiveness on global markets Insufficient levels of value added in industry Low levels of productivity Insufficient rate of technological innovation High unemployment & poverty particularly amongst previously disadvantaged groups Challenges to be addressed by centres by outcome of activities Challenges to be addressed by longer term impact of programme

STP, through its centres, will therefore seek to address the following issues: Enhancing technological and technical innovation Replacing outdated technology used by many small enterprises Facilitating access to technology and technical support for SMMEs Addressing the low entry rates of small enterprises into the productive, value- added sectors of the economy Facilitating access to facilities for the testing and promotion of innovative, ‘technological’ ideas

Incubation Highlights Centres Increase from 13 to 23 Turnover of SMMEs 162% higher to R 21.58 million Survival rate of SMMEs up 90% Team sTP Integrated & holistic support package for SMMEs from Government Turning 8 in 10 Business Failures into 8 in 10 successes

Economic Impact : Incubation 708 Enterprises created (2002-2007) 2 300 Enterprises Supported 6 223 jobs created 86% Black owned businesses established

Economic Impact: Technology transfer R13.5 million committed in 2006/7 22 Technology transfer interventions supported 100% Black owned businesses supported 66% Women owned businesses supported 100% second economy businesses supported 146 jobs created All provinces supported

Narrow impact vs Broad focus [PMG Note: photo's have been removed]

Financial Review 2007 R’m 2006 R’m Total Revenue 442 200 Total Expenditure 411 172 Total assets 209 95 Total liabilities 121 53

Financial Review Second unqualified audit opinion Building and further enhancing robust systems of financial management, internal control, policies and procedures and risk management. A major systems re-engineering programme is currently underway to address certain key risk areas, focused on improved: Financial management Internal control Efficiency improvements Capacity Building

Human Resources review A total of 248 positions filled during the year Total staff of seda at the end of the year reached 520. 60% female 78% African Training needs assessment done with the assistance from the Finnish Government’s support, training plan to be implemented over the coming years Performance management system developed

Human Resources review Total staff complement - 520

Key challenges Outreach Budgetary constraints Skill levels High expectations Coordination of effort

Future Enhance partnerships for better delivery Enhance the skills and knowledge of our staff to effectively deliver the services Focus on productive capacity building for small enterprises

Building entrepreneurs [PMG Note: photo's have been removed]

Thank you