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ANNUAL REPORT 2012/13 DEPARTMENT HIGHER EDUCATION AND TRAINING Presentation to the Portfolio Committee on Higher Education and Training 09 October 2013. Presentation Outline. Achievements Background Information Programme Performance on Predetermined Objectives Achievements

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ANNUAL REPORT 2012/13

DEPARTMENT HIGHER EDUCATION AND TRAINING

Presentation to the

Portfolio Committee on

Higher Education and Training

09 October 2013


Presentation Outline

  • Achievements

  • Background Information

  • Programme Performance on Predetermined Objectives

    • Achievements

    • Targets partially and not achieved

    • Current status of targets

    • Programme Performance for the first two quarters of the 2013/14 financial year (Financial and non-financial performance)

  • Financial Statements

    • Audit Report

    • 2012/13 – Allocation versus Expenditure

    • Main Reasons for Under-Expenditure

    • 2014 MTEF Funding Requirements


  • Achievements

    • Further Education and Training student headcount enrolments increased by 90% from 345 566 in 2010 to 657 690 in 2012

    • Student headcount enrolments at universities increased by 14% from 837 779 in in 2010 to 953 375 in 2012

    • The establishment of the two new universities in Mpumalanga and the Northern Cape. Both universities will open their doors in 2014 in selected academic programmes, using existing buildings

    • Demerger of Medunsa Campus from University of Limpopo and establishment of a new university of health sciences

    • Building of 12 new Further Education and Training campuses and refurbishment of 2 campuses

    • Improved HR and financial management in FET College sector


    Achievements

    • NSFAS which is the primary tool to ensure access for poor students to post-school education has assisted 1.4 million students since 1991 with many NSFAS alumni now playing an important role in our economy and society

    • NSFAS student bursary funding at FET Colleges has increased from R318 million in 2010 benefitting 61 703 students to R1.988 billion in 2013 targeting 222 817 students

    • NSFAS student bursary funding at Universities has increased from R2.2 billion in 2010 benefitting 148 387 students to R3.693 billion in 2013 targeting 210 000 students

    • Expansion and strengthening of teacher education for all education sub-sectors, including pre-schooling, schooling and post-schooling has resulted in an increase from just under 6 000 new teacher graduates in 2008 to 12 999 in 2012


    Background Information

    • The 2012/13 Annual Report is the third Annual Report of the Department of Higher Education and Training

    • For the 2012/13 financial year the Department had a total of 107 planned targets:

      • 62 targets were achieved

      • 33 targets were partially achieved

      • 12 targets were not achieved

      • 11 of the partially and not achieved targets have subsequently been achieved post 31 March 2013

      • Implementation of the phasing-in of VCET function shift and other matters


    National Certificate (Vocational) Certification

    • Unlike the traditional matric examination, examinations for FET colleges are conducted seven times a year and twice a year for AET, with candidates being assessed and certificated in each of these nine examination cycles

    • Prior to the establishment of the Department in 2009, certification challenges had already existed in the issuing of NC(V) certificates

    • 322 214 NC(V) Levels 2 to 4 certificates have been issued

    • 16 602 certificates were initially not issued because public FET Colleges owed certification fees to Umalusi. The Department has successfully intervened and ensured that Umalusi lifts this block. Certificates, which are now being processed for release

    • 3 491 certificates have not been issued by Umalusi because of outstanding certification fees owed by private FET Colleges. The Department has contacted each of these institutions to settle outstanding certification debt

    • 18 106 certificates have not been processed due to data anomalies in the candidate’s datasets. This is the actual backlog. The Department is in constant engagement with SITA to address these anomalies. SITA is also in the process of sourcing additional capacity to resolve this matter


    Leakages of FET Examination Papers

    • Leakages affect only the Engineering Studies Trimester examination cycles:

      • November 2012 and April 2013 (24 subjects): Candidates implicated at several centres along with individual candidates at other centres. Leakages reported 2 days ahead of examination

      • August 2013 (16 subjects): Candidates implicated at only one centre and limited to individual candidates per centre at other centres – leakages reported during or after the examination

    • Measures put in place:

      • Changed distribution to daily delivery of question papers during August 2013 examinations, i.e. afternoon before, instead of 1-2 weeks in advance as was happening in previous examination cycles

      • Exploring viability of moving daily delivery to the morning of the examination

      • Collaboration with National Police Commissioner’s office to investigate and detect source of leakages

      • Arrests have been made and disciplinary enquiries are underway with regards to implicated staff and students


    FET College Councils

    • Number of Colleges which currently have council governance structures

    • Sixteen public FET Colleges currently have council governance structures

    • Due date for the appointment of Councils

    • The appointments to the Free State, Eastern Cape, KwaZulu-Natal and Limpopo Councils will be completed within the next two weeks and Gauteng, Northern Cape and North West shortlisting and due diligence have already been completed and appointments will be made during November 2013

    • Mpumalanga and Western CapeCouncils are still in place as they have not yet expired

    • 8 Colleges under administration with their governance structure being fulfilled by the Administrators


    FET College Principal and Deputy Principal Posts

    • Principals:

    • Post advertised: 13

    • Interviews conducted: 11

    • Posts due for short listing: 2

    • Appointments made: 7

    • Due for re-advertisement: 3

    • Interviews done and in process of appointment : 1

    • Deputy Principals:

    • Number appointed: 21

    • Vacant: 11 posts are in the process of being filled


    FET College Turnaround Strategy

    • To support on human resource management aspects, 20 Human Resource generalists have been appointed and deployed to FET colleges

    • South African Institute for Chartered Accountants (SAICA) have been deployed Chartered Accountants in all FET colleges with a view to strengthen financial management capacity

    • A College Improvement Project in the Eastern Cape and Limpopo Province is being implemented

    • Substantive actions are currently being implemented in FET colleges in pursuit of improved student performance which includes the following:

    • - Daily monitoring of student attendance, particularly for bursary recipients where travel and accommodation allowance disbursement is linked to attendance

    • - The administration of the student selection and placement test at the commencement of the academic year

    • - Delivery of academic support programmes


    Programme 1: Administration

    Purpose: To conduct the overall management of the Department and provide centralised support services



    Programme 1: Administration in relation to key indicators

    Achievements:


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators

    • Strategy to deal with under performance in targets in achieved:

    • In dealing with the delayed resolutions of disciplinary cases, the Department intends to provide the Chairpersons with a mandate not to allow/grant unnecessary postponements which results into delays.

    • Compliance with the Human Resource Strategic Planning Framework will improve as:

      • - The HR Plan has now been approved and there is improved capacity

      • - Report on the implementation of the HR Plan has been developed for submission to DPSA

      • - Macro-organisational structure has been approved by the Minister and was submitted to MPSA for consultation

      • - Micro-organisational structure has been approved

      • - Service Delivery Improvement Plan has been approved


    Programme 1: Administration in relation to key indicators

    Quarterly Performance on Predetermined Targets

    &

    Annual Allocation versus Expenditure

    2013/14


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators


    Programme 1: Administration in relation to key indicators

    Annual Allocation versus Expenditure: 2013/14


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination

    Purpose: To provide strategic direction in the development, implementation and monitoring of the Department policies. Coordinate activities in relation to the HRDS for South Africa.



    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination

    Achievements:


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination

    Quarterly Performance on Predetermined Targets

    &

    Annual Allocation versus Expenditure

    2013/14


    Programme 2: in relation to key indicatorsHRD, Planning and Monitoring Coordination


    Programme 2: in relation to key indicatorsHuman Resource Development, Planning and Monitoring Coordination

    Annual Allocation versus Expenditure: 2013/14


    Programme 3: in relation to key indicatorsUniversity Education

    Purpose: To develop and coordinate policy and regulatory frameworks for an effective and efficient university education system. To provide financial support to universities, the National Student Financial Scheme and the National Institute for Higher Education



    Programme 3: in relation to key indicatorsUniversity Education

    Achievements:

    Note 1: The achievement reported as at 31 March 2013 are the 2011 audited figures


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education


    Programme 3: in relation to key indicatorsUniversity Education

    Quarterly Performance on Predetermined Targets

    &

    Annual Allocation versus Expenditure

    2013/14


    Programme 3: in relation to key indicatorsUniversity Education

    • During the quarter under review there were no specific quarterly targets in the Annual Performance Plan to report against.

    • Progress towards ensuring the annual targets are being achieved:

      • The two new universities, Sol Plaatje University in the Northern Cape Province, and the University of Mpumalanga in Mpumalanga Province, were established as legal entities during the quarter.

      • A Government Gazette indicating the Minister’s intention to establish a new health and allied sciences university that will incorporate the Medical University of South Africa (MEDUNSA) Campus of the University of Limpopo was published for comment during the quarter.

      • The unbundling of the MEDUNSA campus from the UL is a parallel process that has also registered progress. The transitional arrangements in the form of a draft protocol have been developed during the quarter.

      • The Administrator of Vaal University of Technology (VUT) completed his term of office during the quarter and submitted his final report. The new Council for VUT was installed and has taken over the governance of the institution.


    Programme 3: in relation to key indicatorsUniversity Education

    • The appointment of the Administrator at Walter Sisulu University (WSU) has been extended for a further six months to allow all aspects to be finalised before the Administrator leaves his office.

    • The investigation into allegations of irregularities at the University of Limpopo has been concluded and a report submitted to the Minister and the public protector. The Minister has written to the Council to attend to the matter.

    • The Report on the Review of Funding of Universities has been edited and ready for approval by the Minister for publishing.

    • A draft Teaching Development Grant Policy was developed and a workshop held with all universities during the quarter.

    • Training of Provincial Evaluators for the evaluation of qualifications for employment of educators in schooling started with the training of 18 Gauteng Provincial evaluators.

    • The Apply Now! campaign was implemented during the quarter. The campaign included three public events including a Launch by the Deputy Minister.

  • Work is progressing well and on track to achieve set targets. This is despite the serious lack of resources, particularly the lack of adequate personnel and funding to exercise sufficient oversight.


  • Programme 3: in relation to key indicatorsUniversity Education

    Annual Allocation versus Expenditure: 2013/14


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training

    • Purpose: To plan, develop, evaluate, monitor and maintain national policy, programmes and systems for vocational and continuing education and training, including further education and training colleges and post-literacy Adult Education



    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training

    Quarterly Performance on Predetermined Targets

    &

    Annual Allocation versus Expenditure

    2013/14


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training


    Programme 4: in relation to key indicatorsVocational and Continuing Education and Training

    Annual Allocation versus Expenditure: 2013/14


    Programme 5: in relation to key indicatorsSkills Development

    Purpose: To promote and monitor the National Skills Development Strategy



    Programme 5: in relation to key indicatorsSkills Development

    Achievements:


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development

    Quarterly Performance on Predetermined Targets

    &

    Annual Allocation versus Expenditure

    2013/14


    Programme 5: in relation to key indicatorsSkills Development


    Programme 5: in relation to key indicatorsSkills Development

    Annual Allocation versus Expenditure: 2013/14


    FINANCIAL INFORMATION in relation to key indicators


    Auditor-General Report in relation to key indicators

    The Department received an unqualified audit opinion

    Key matters raised by the Auditor-General:

    Significant uncertainties

    • As disclosed in disclosure note 20 to the financial statements, the Department is the defendant in law suits. The Department is opposing the claims and the ultimate outcome of these cannot presently be determined.

      Restatement of Corresponding Figures

    • As disclosed in disclosure note 24 to the financial statements, the corresponding figure for lease commitments for the 2011/12 financial year has been restated as a result of a calculation error discovered during March 2013 in the financial statements relating to the year ending 31 March 2012.

    • As disclosed in notes 3, 10, 12 and 15 to the financial statements, the corresponding figures for departmental revenue, cash and cash equivalents, receivables and departmental revenue to be surrendered to the revenue fund for 31 March 2012 has been restated as a result of new classification requirements.

    • Both restatements were accounting related without any impact on the financial status of the Department.


    Auditor-General Report in relation to key indicators

    Compliance with laws and regulations

    • Human resource management and compensation: Verification processes not performed prior to appointments of new officials

    • Annual financial statements: The financial statements submitted for audit purposes did not comply with section 40(1)(a) of the PFMA. The material misstatement identified by the AGSA with regards to cash and cash equivalents, receivables, departmental revenue and NRF receipts to be surrendered to the revenue fund and the employee benefits disclosure note was subsequently corrected

    • Other: The Sector Education and Training Authorities’ revised strategic plans were not approved before the beginning of the financial year by the Minister as required by Treasury Regulation 30.1


    Auditor-General Report in relation to key indicators

    Internal Control

    • Leadership:

      • Management developed action plans to address previously reported root causes resulting from previous year and recurring findings. However some committed action plans are not yet implemented

      • There is inadequate consequence management for action plans not implemented to address previously reported internal control deficiencies by external and internal audits

      • The Department does not have documented policies and procedures at a programme level for collating, recording and verifying of reporting on actual achievement of planned objectives, indicators and targets


    Auditor-General Report in relation to key indicators

    • Financial and performance management

      • The department does not have adequate processes in place to ensure that financial disclosure notes included in financial statements are accurate

    • Governance

      • Appropriate risk management activities were not implemented to manage risks identified from the risk assessment process


    Auditor-General Report in relation to key indicators

    Findings on performance information:

    • Performance targets are not specific

      • Significantly important targets in relation to programme 3 were not specific in clearly identifying the nature and the required level of performance.

    • Performance targets not time bound

      • Significantly important targets in relation to programme 3 were not time bound in specifying a time period or deadline for delivery.

    • Indicators/measures not verifiable

      • Significantly important indicators in relation to programme 4 were not verifiable in that valid processes and systems that produce the information on actual performance did not exist.


    Auditor-General Report in relation to key indicators

    • Reliability of information

      • Programme 3: Significantly important targets were regarded as misstated.

      • Programmes 4 and 5: AG was unable to obtain information and explanations considered necessary to satisfy the AG with regards to the reliability of information presented with respect to significant targets. This was due to limitations placed on the scope of work due to the absence of systems in place to verify the reporting of actual achievements against significant planned objectives, indicators and targets. The current systems did not allow the AG to perform alternative procedures.

    • 39% of total planned targets were not achieved.

      • Mainly due to the fact that indicators and targets were not suitably developed during the strategic planning process.


    Action Plan Audit Findings in relation to key indicators

    • The Department completed action plans regarding audit findings

    • These plans include all areas raised in the Audit Report as well as all other matters identified during the audit that resulted in audit queries

    • Progress on the action plans are being monitored on a bi-weekly basis and will be reported to the Minister, Audit Committee and Senior Management meetings


    2012/13 in relation to key indicatorsAllocation versus Expenditure


    Spending Trends per Economic Classification in relation to key indicators


    Explanations of in relation to key indicatorsVariances

    • Programme 1: Administration

    • (Unspent: R496 000)

      • Under-expenditure mainly due to:

        • Staff attrition and posts not filled as projected

        • Invoices i.r.o. travel and accommodation not received as projected.

    • Programme 2: Planning and Monitoring

    • (Unspent: R416 000)

      • Under-expenditure mainly due to:

        • Staff attrition and posts not filled as projected

        • Invoice i.r.o. the strategic plan not received as projected.

    • Programme 3: University Education

    • (Unspent: R557 000)

      • Under-expenditure mainly due to:

        • Staff attrition and posts not filled as projected

        • Invoices i.r.o. travel and accommodation not received as projected

        • Claims for interest and redemption not received as projected


    Explanations of Variances in relation to key indicators

    • Programme 4: Vocational and Continuing

    • Education and Training

    • (Unspent: R2.211 million)

      • Under-expenditure mainly due to:

        • Examination claims i.r.o. examiners and moderators not received as projected

        • Travel and subsistence claims i.r.o. examiners and moderators not received as projected

        • Invoices for travel and accommodation not received as projected

      • Saving on computer equipment due to revision of replacement period for some of the equipment as a result of budget constraints

    • Programme 5: Skills Development

    • (Unspent: R71 000)

      • Under-expenditure mainly due to:

        • Invoices for goods and services not received as projected.


    Annual in relation to key indicatorsFinancial Statements

    Allocation versus Expenditure

    2013/14



    Spending Trends per Economic Classification in relation to key indicators


    Annual in relation to key indicatorsFinancial Statements

    2014 MTEF Funding Requirements


    Funding Requirements 2014 in relation to key indicatorsMTEF

    • The Department of Higher Education and Training is experiencing serious financial constraints that makes it difficult for the Department to function effectively in order to ensure that we meet the requirements of the current administration and citizens of our country.

    • The Department has to deliver on key Government priorities and programme objectives for the 2014 MTEF period and to reach the targets envisaged for 2030.

    • Since the establishment of the Department on 1 April 2010, the Department is functioning on a constructed baseline and minimum capacity which requires urgent attention.

    • The Department is under pressure to fill vacancies, which is impossible within the current available resources.

    • The establishment of the National Artisan Moderation Body and the numerous challenges with the additional work required for the FET function shift create a further burden on the existing budget.


    Funding Requirements 2014 in relation to key indicatorsMTEF

    • The Department may require close to R500 million per year over the 2014 MTEF to improve current operations. This would address areas such as the staff establishment(including the review of the current organisational structure to strengthen specific areas for improved service delivery and the implementation of the revised structure), legal services, the management of the shifting of functions, provincial/entity monitoring as well as examination services costs.

    • Of critical importance is additional funding required for:

      • Walter Sisulu University (estimated at R3.1 billion over the three years);

      • Increased NSFAS funding to address current shortfalls (R2.5 billion per year);

      • The medical campus for the University of Limpopo (R800 million);

      • The establishment of the new Health University (Medunsa) (R500 million per annum);

      • The central application service (R60 million);

      • Curriculum reviews for the FET College sector (R380 million);


    Funding Requirements 2014 in relation to key indicatorsMTEF

    • The implementation of the National Senior Certificate for Adults (R6 billion); and

    • The ongoing operationalisation of NAMB (R30 million per year from 2015/16)

  • The following needs exist in public entities and would also require assistance:

    • SAQA – funding for verification processes and operations (Estimated at approximately R30 million per year)

    • NSFAS – Possible increased operational costs for the student centred model

  • In addition to the above, various expansion initiatives within the post-school education system are required. This in itself would require substantial additional resources, that also requires consideration.

  • The Department is fully aware of the current pressures on the National Revenue Fund and the budget constraints in Government. The Department did, however, bring the constraints to the attention of the National Treasury.


  • Funding Requirements 2014 in relation to key indicatorsMTEF

    • It should be noted that the MTEF guidelines did not allow Departments to submit requests for additional funding and during recent meetings with National Treasury it was clearly communicated that no additional funds are available.


    Annual in relation to key indicatorsFinancial Statements

    Status of FET Function Shift


    Status of FET Function Shift in relation to key indicators

    • Processes are underway to facilitate the transfer of the FET Colleges function to DHET

    • To manage and administer the FET College function shift funds need to be shifted from the Provincial Equitable Share to DHET

    • DHET calculated and discussed a proposal for an Administrative budget to be shifted with officials from Provincial Education Departments (PEDs), Provincial Treasuries, National Treasury and the Financial and Fiscal Commission

    • National Treasury were requested to lead the process with Provincial Treasuries

    • A Task Team lead by National Treasury has been established and is required to provide feedback by 31 October 2013 in order to meet the timeframe of the 2014 MTEF budget process

    • It is expected that the Minister of Finance will announce on the function shift during the 2013 MTBPS

    • The Department would appreciate the support of the Portfolio Committee to ensure that the process of the function shift is completed by 1 April 2014


    Thank You in relation to key indicators


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