PRESENTATION TO PORTFOLIO COMMITTEE ON LABOUR Labour Mr June Dube Chairperson, TETA Board Mr June Dube Chairperson, TETA Board Dr Johan de Beer Acting CEO, TETA Dr Johan de Beer Acting CEO, TETA Mr Dalpat Naran CFO, TETA Mr Dalpat Naran CFO, TETA

CONTENTS Annual Report 1.Overview 2.Accounting Authority Report. AG: Emphasis of matter 3.GAAP/GRAP. AG: Emphasis of matter 4.Supply Chain Management. AG: Emphasis of matter 5.Performance Information. AG: Emphasis of matter Management letter 1. Special Investigations - Fidentia - KPMG - Other 2.Contractual Obligations New Issues 1.Performance Targets 2.Going Concern Annual Report 1.Overview 2.Accounting Authority Report. AG: Emphasis of matter 3.GAAP/GRAP. AG: Emphasis of matter 4.Supply Chain Management. AG: Emphasis of matter 5.Performance Information. AG: Emphasis of matter Management letter 1. Special Investigations - Fidentia - KPMG - Other 2.Contractual Obligations New Issues 1.Performance Targets 2.Going Concern

Overview: Annual Report 05/06 Dr Johan de Beer Eight Chambers trained people (ATR’s Structured learning) 207 Large firms, 151 Medium firms and 227 Small firms received grants workers achieved ABET level 4 a further workers successfully completed learning programmes (skills programmes) 818 unemployed learners entered programmes Statistical analysis on equity & gender available in the TETA Annual Report Eight Chambers trained people (ATR’s Structured learning) 207 Large firms, 151 Medium firms and 227 Small firms received grants workers achieved ABET level 4 a further workers successfully completed learning programmes (skills programmes) 818 unemployed learners entered programmes Statistical analysis on equity & gender available in the TETA Annual Report Labour

Overview: Annual Report 05/06 Labour ChamberMaleFemaleTotalTotal Disabled AICWAICW Aerospace Forwarding & Clearing Freight Handling Maritime Rail Road Freight Road Passenger Unknown TOTAL

Overview: Annual Report 05/06 Labour Successful TAXI projects in all provinces: learners competent in the Taxi project in Professional Driving; Customer Care; Business Administration Skills learners, 100 in each province to be trained in Professional Driving Skills,  90 Skills development facilitators, or trainers, 10 per province

Overview: Annual Report 05/06  Training of Small Boat Operators in Communication; Numeracy; Business; Life Skills; Legislation; Fishing; Safety and Survival; < 25 Ton Skipper; Engineering; Pre Sea learners trained  Learners were trained in Umtata-169; PE-849; Mosselbay-500; Cape Town-981; Hermanus-1033; Saldanha-349; P/Nolloth-285; Durban-74;  Training of Small Boat Operators in Communication; Numeracy; Business; Life Skills; Legislation; Fishing; Safety and Survival; < 25 Ton Skipper; Engineering; Pre Sea learners trained  Learners were trained in Umtata-169; PE-849; Mosselbay-500; Cape Town-981; Hermanus-1033; Saldanha-349; P/Nolloth-285; Durban-74; Labour

Overview: Annual Report 05/06  913 employees to benefit through the TETA voucher system, plus 110 unemployed learners from small firms on learnerships to acquire the skills necessary to enter the sector  KwaZulu Natal: 50 unemployed disabled learners through the Warehousing & Distribution Employers Association  Eastern Cape: 120 small truck, bus and taxi operators competent in business skills through the Eastern Cape Department of Transport  913 employees to benefit through the TETA voucher system, plus 110 unemployed learners from small firms on learnerships to acquire the skills necessary to enter the sector  KwaZulu Natal: 50 unemployed disabled learners through the Warehousing & Distribution Employers Association  Eastern Cape: 120 small truck, bus and taxi operators competent in business skills through the Eastern Cape Department of Transport Labour

Future Plans for TETA  MOU Finalize with NDoT Directorate Standards in Licensing Standards  K53 Driving License Registered as a Qualification  Testing Officers to be Upgraded to Assessors  Testing Centers become Assessment Centers  Assessment Centers to be Quality Assured  Driving Schools to be Accredited  MOU Finalize with NDoT Directorate Standards in Licensing Standards  K53 Driving License Registered as a Qualification  Testing Officers to be Upgraded to Assessors  Testing Centers become Assessment Centers  Assessment Centers to be Quality Assured  Driving Schools to be Accredited Labour

Future Plans for TETA  Full co-operation with Premiers Offices on PGDS in Gauteng; Western Cape; KZN and Eastern Cape  Enhance support and participation in the other Provinces  TETA allocated resources to each province to ensure effective and efficient interaction and integration of projects and action plans  Full co-operation with Premiers Offices on PGDS in Gauteng; Western Cape; KZN and Eastern Cape  Enhance support and participation in the other Provinces  TETA allocated resources to each province to ensure effective and efficient interaction and integration of projects and action plans Labour

TARGETS NOT ACHIEVED 2005/06  Indicator 4.2 – Workplace Experience Grant learners to gain experience: 392 assisted. Specific project to be reported on in 2007  Indicator 4.3 – New Venture Creation 160 learners to complete NVC learnership: Specific project to be reported on in 2007  Indicator 5.2 – Accredited Providers for New Venture Creation. - 1 institute accredited: Three projects presently running to accredit 6 providers. To be reported on in 2007.

ANNUAL REPORT 05 / 06: AG: Emphasis of matter 1. Accounting Authority Report : Financial Statements submitted did not include report of the accounting authority. Remedial Action: The CFO responsible for ensuring that relevant information is available for the compilation of the report in a timely manner. 2. GAAP/GRAP Compliance : Non - compliance PFMA and Treasury Regulation – Financial statements did not comply with GAAP / GRAP. Evidenced by the number of audit adjustments and disclosure changes. Remedial Action: Template to be revised and to be used for all SETA’s 1. Accounting Authority Report : Financial Statements submitted did not include report of the accounting authority. Remedial Action: The CFO responsible for ensuring that relevant information is available for the compilation of the report in a timely manner. 2. GAAP/GRAP Compliance : Non - compliance PFMA and Treasury Regulation – Financial statements did not comply with GAAP / GRAP. Evidenced by the number of audit adjustments and disclosure changes. Remedial Action: Template to be revised and to be used for all SETA’s

Annual Report: AG: Emphasis of matter 3. Supply Chain Management Treasury regulation 16A tender evaluation system utilised was incorrect. Remedial Action: The Supply chain management policy approved by TETA Board & implemented. Supply chain management practitioner has been employed. SCM processes and procedures compiled & implemented. 4. Performance Information : Public Audit Act, 2004 and Treasury regulation – non submission of the information related to performance against predetermined objectives. Remedial Action: As companies do not report on a quarterly basis, only once annually through the Annual Training Report the actual verifiable performance information cannot be available by the end of May. Issue submitted to the Seta Forum level as well as the Auditor General’s Office for further deliberation. 3. Supply Chain Management Treasury regulation 16A tender evaluation system utilised was incorrect. Remedial Action: The Supply chain management policy approved by TETA Board & implemented. Supply chain management practitioner has been employed. SCM processes and procedures compiled & implemented. 4. Performance Information : Public Audit Act, 2004 and Treasury regulation – non submission of the information related to performance against predetermined objectives. Remedial Action: As companies do not report on a quarterly basis, only once annually through the Annual Training Report the actual verifiable performance information cannot be available by the end of May. Issue submitted to the Seta Forum level as well as the Auditor General’s Office for further deliberation.

SPECIAL INVESTIGATIONS Mr June Dube (Chairman TETA Board) Fidentia Investment : TETA had invested R 188 Million with an authorised financial services provider being FIDENTIA ASSET MANAGEMENT (PTY) LTD (FAM). This financial institution was placed under curator ship by the Cape High Court. The curators investigation is at an early stage but the potential loss to TETA could be the entire investment. Regular updates are received from the Curator on an ongoing basis. KPMG Forensic Audit A special forensic audit was conducted upon instruction of the TETA Board on the Fidentia matter by KPMG. In the interest of good corporate governance, the Chief Executive Officer was suspended, pending the final audit report Fidentia Investment : TETA had invested R 188 Million with an authorised financial services provider being FIDENTIA ASSET MANAGEMENT (PTY) LTD (FAM). This financial institution was placed under curator ship by the Cape High Court. The curators investigation is at an early stage but the potential loss to TETA could be the entire investment. Regular updates are received from the Curator on an ongoing basis. KPMG Forensic Audit A special forensic audit was conducted upon instruction of the TETA Board on the Fidentia matter by KPMG. In the interest of good corporate governance, the Chief Executive Officer was suspended, pending the final audit report

SPECIAL INVESTIGATIONS Mr Dalpat Naran (CFO) Internet Bank Fraud Internet Bank Fraud in respect of R had been experienced. The matter had been dealt with Forensic Auditors and Attorneys; resulting in criminal charges. This Investigation resulted in a recovery of R and the recovery of the balance of R is subject to a legal process. Internet Bank Fraud Internet Bank Fraud in respect of R had been experienced. The matter had been dealt with Forensic Auditors and Attorneys; resulting in criminal charges. This Investigation resulted in a recovery of R and the recovery of the balance of R is subject to a legal process.

SPECIAL INVESTIGATIONS Mr Dalpat Naran (CFO) Board Member Travel Claim : During the year under review an investigation was instituted on claims of Board members. An irregular claim R4 292 by a Board member was discovered. As a result this member was removed from the TETA Board, and the funds were recovered. Board Member Travel Claim : During the year under review an investigation was instituted on claims of Board members. An irregular claim R4 292 by a Board member was discovered. As a result this member was removed from the TETA Board, and the funds were recovered.

EXISTING OBLIGATIONS Dr Johan de Beer With the loss of the Fidentia Investment, concern was expressed with regard to TETA’s ability to continue as a going concern and achieve the targets agreed to in the Service Level Agreement. We can confirm that TETA will honour all existing contractual obligation’s in line with targets set with the NSDS. Effective financial management & cash flow management planning will ensure achievement of both targets and continuation as a going concern. Since Febr ’07 TETA has honoured all its mandatory grant & discretionary commitments as well as administrative expenses With the loss of the Fidentia Investment, concern was expressed with regard to TETA’s ability to continue as a going concern and achieve the targets agreed to in the Service Level Agreement. We can confirm that TETA will honour all existing contractual obligation’s in line with targets set with the NSDS. Effective financial management & cash flow management planning will ensure achievement of both targets and continuation as a going concern. Since Febr ’07 TETA has honoured all its mandatory grant & discretionary commitments as well as administrative expenses

Thank You