Financial
Services Provider
The Hospitality Partners Association of South Africa
is affiliated with one of the country’s
premier fiduciary services provider: The
Exceed Group. Incorporating Tenk Loubser & Associates,
the Exceed Group has served many clients requiring
financial advice, or those simply looking to enlist
the skills of an established financial services provider.
The group was established in 2000 by the brothers
JS and FH Loubser in order to offer clients a wide
variety of fiduciary and financial services.
The Exceed Group’s vision is to be a sustainable,
consistent, reliable and successful fiduciary and
financial services provider and practice. We base
our business practices on integrity and reliability
and carry these elements through into everything we
do. In a business that is all about service, we believe
that our people are the key to success. For us, service
is ultimately about building a relationship; and then
maintaining and nurturing it via our role as your
trusted fiduciary services provider.
Our operations are organised into separate
departments dealing with auditing and accounting,
tax and financial services, asset and risk management,
management consulting services, trust management and
administration, as well as human resource consulting
services. We are constantly submitting interesting
and informative articles about all of the
above to the HPASA Hospitality Business Hub newsletter.
Subscribe
here to make sure you are always kept in the loop.
Feel free to contact
us at the Exceed Group should you have any queries
relating to financial services.
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October 2011
RETENTION
PERIODS FOR ACCOUNTING DOCUMENTS |
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Due to various legislative
requirements, documents
should be retained for
a certain period, depending
on the legislation. It
is important to retain
documents as prescribed
by the relevant legislation
to avoid being guilty
of an offence.
Summary
of Retention Period
To assist you in ascertaining
the relevant retention
periods a summary of the
more important acts relating
to retention periods for
accounting documentation
can be found below.
COMPANIES ACT, NO 71 OF
2008 AND COMPANIES REGULATIONS
2011:
The act provides that
companies should keep
documentation in written
form, or any other form
or manner that allows
the information to be
converted into written
form within a reasonable
time.
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Sunel
Swart
Tenk Loubser & Associates |
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Retention
period for specific documents:
Indefinite:
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Registration
certificate |
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Memorandum
of Incorporation and alterations
or amendments thereto |
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Rules |
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Securities
register and uncertificated
securities register |
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Register
of company secretary and
auditors |
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Register
of disclosures of person
who hold beneficial interest
equal to or in excess
of 5% of the securities
of that class issued in
the case of Regulated
companies (companies to
which chapter 5, part
B, C and Takeover Regulations
apply) |
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October 2011
THE MEMORANDUM
OF INCORPORATION – WHEN
AND HOW? |
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With the Company’s
Act of 2008 having come
into effect on 1 May 2011,
companies are faced with
a number of challenges
regarding compliance with
the numerous new provisions
of the Act. One of these
challenges is certainly
the Memorandum of Incorporation.
Memorandum
and Articles of Association
The 1973 Act prescribed
that a company should
have both a Memorandum
and Articles of Association.
These documents were rather
standard, with the schedules
to the Act even providing
“templates”
of these documents. These
standardised documents
could be adopted by companies
in an unchanged format
or they could be altered
as required (barring certain
limitations, of course).
Not so Forgiving
The 2008 Act is, however,
not so forgiving. There
is no standard template
which can now be adopted
unchanged. Each company
is now required to apply
their minds to prepare
a document, which caters
specifically for the needs
and particular situation
of the company. In a sense,
the Memorandum of Incorporation
is a combination of the
Memorandum of Association,
the Articles of Association
and the Shareholders Agreement. |
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August 2011
NEW FRINGE
BENEFIT FOR EMPLOYEES |
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Jonathan
Coetzee
Tenk Loubser & Associates |
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A
number of Employers have, for
several years, been contributing
towards either an employee death
or an employee disability policy
on behalf of their employees
(long-term insurance policies).
The aforementioned policies
were provided either by means
of ‘approved’ plans
or ‘unapproved’
plans, as defined by the South
African Revenue Service (SARS).
These policies
can be structured in the following
ways:
1. The proceeds can be paid
directly to the employees
2. The proceeds can be paid
directly to the employer, with
a side arrangement existing
between
2. the
employer and employee whereby
the employer will pay proceeds
over to the employee
For many years, these contributions
to policies on behalf of employees
were allowed as a deduction
for the employer, with no matching
accounting for a fringe benefit
in the hands of the employee.
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August 2011
FICA INCREASES
RISK ON ESTATE AGENTS |
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The three month compulsory registration
period for Estate Agents to register
with FICA has recently ended on 28
February 2011. Since that date the
requirements of the Financial Intelligence
Centre Act 38 of 2001 is applicable
to all estate agents.
In short The Act prescribes
certain duties to all accountable
institutions (including estate agents).
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June 2011
COMPANIES
ACT 2008 – DIRECTORS’
RESPONSIBILITIES AND LIABILITY
By Willie
Smith, Exceed, in association
with Tenk Loubser & Associates |
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Willie
Smith
Exceed, in association with
Tenk Loubser & Associates |
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Do
you still want to be a director under
the new Companies Act? Directors’
need to know their rights and must
be aware of what is expected of them.
They are subjected to the common law,
as found in court rulings and judgments.
New Companies Act
The new Companies Act 2008 became
effective on the 1st of May, after
numerous changes and delays, 4 days
after the act was published in the
Government Gazette and, will no doubt,
have significant consequences for
all stakeholders and directors of
companies.
Who is a Director?
A director means a member of a board
of a company, as contemplated in section
66, or an alternate director of a
company and includes any person occupying
the position of a director or alternate
director, by whatever name designated.
Accountability and Transparency
While the new Companies Act 2008 aims
to provide a flexible regime that
balances accountability and transparency
with less of a regulatory burden,
one aspect of the new Companies Act
(No 71 of 2008) is that it records
the common law duties and responsibilities
of directors, which provides clarity
in the performance of the obligations. |
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April 2011
BANK LIKE
A BANKER
By Suzette
van Niekerk, Exceed Asset Management |
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| Suzette
van Niekerk, Director: Exceed
Asset Management |
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In
the following paragraph, we’ll
be asking you three questions. For
each of them, answer either ‘yes’
or ‘no’. When you set
out to buy new shoes, do you generally
tend to browse around and compare
the options at different stores before
making a purchase? When you buy a
new car, do you compare the costs
of various models before taking the
plunge? When you order food at a restaurant,
do you check the price of a meal first
before telling the waitress what you
want?
Trick
Question
Now here’s the trick question:
Do you apply the same principles in
terms of banking? Because whether
you answered yes once, twice or three
times in the above paragraph, the
principle stays the same – banking
is part of your monthly expenses and
only by comparing costs and shopping
around for the best deals will you
really be able to save on those nagging
fees.
Here are ten expert
tips to get you started: |
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February 2011
INVESTING
OFFSHORE
By Sonja
Frank, Exceed |
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The
Minister of Finance, Pravin Gordhan,
announced during his Medium Term Budget
speech that the foreign capital allowance
for private individuals (resident
in South Africa) is increased to R4
million per resident per annum. This
allowance is of course subject thereto
that the resident obtains a tax clearance
from the South African Revenue Services
(SARS).
Three Offshore Investment
Options
In this article we will discuss three
offshore investment options available
to South African residents (SA residents)
and the income tax and estate
planning consequences of
each.
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The funds can be invested
in the individual’s own
name offshore. |
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The funds can be
loaned and advanced to an offshore
Trust. |
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The funds
can be donated to an offshore
Trust. |
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February/March 2011
SOUTH AFRICA'S
NEW SKILLS STRATEGY
By Carina
de Swardt, Exceed Human Resource
Consultants |
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The
key driving force of this strategy
is improving the effectiveness
and efficiency of the skills
development system. The emphasis
is particularly on those who
do not have relevant technical
skills or adequate reading,
writing and numeracy skills
to enable them to access employment.
Key Imperatives
The NSDS (New Skills Development
System) will be guided by, and
measured against, several key
developmental and transformation
imperatives:
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race, |
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class, |
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gender, |
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geographic considerations
and |
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age differences, as
well as |
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disability and the HIV
and AIDS pandemic. |
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December 2010
INTERNAL
AUDIT AND RISK MANAGEMENT SIMPLIFIED
- Part 2
By Louw
van der Merwe, Exceed |
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This is the 2nd part in a series
of articles where our resident specialist,
Louw van der Merwe, explains and clarifies
on a very practical level exactly
what value can be added by Internal
Audit and Risk Management within your
organisation.
The first article, published
in last month’s newsletter (August
201), included information on controls,
the role of internal audit, as well
as typical internal audit reviews.
Internal Audit planning
Internal Audit has to review every
process within the organisation at
least once in a 3 year cycle.
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For areas that
represent a very high risk to
the organisation, more regular
assurance on the continued effectiveness
of key controls might be needed,
however. |
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The question therefore arises
which areas or processes should
be reviewed every year, which
every 2 years, and which only
once in the 3-year audit cycle. |
The answer lies in the results
from the Risk Management process.
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October 2010
FRAUDULENT
FINANCIAL REPORTING
By Tenk
Loubser, Exceed |
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A study
conducted in the USA provided a comprehensive
analysis of fraudulent financial reporting.
Some of the key findings may
also apply to businesses in South
Africa.
These include:
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Medium-size companies engaged
more regularly in financial
statement fraud than big companies.
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In most fraud cases, the
CEO and/or the CFO were involved.
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The most common
fraud techniques were improper
revenue recognition, followed
by the overstatement of existing
assets or capitalisation of
expenses. |
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Relatively few differences
were found in the characteristics
of the Board of Directors of
firms engaging in fraud compared
to similar firms not engaging
in fraud. |
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October 2010
INTERNAL
AUDIT AND RISK MANAGEMENT SIMPLIFIED
By Louw
van der Merwe, Exceed |
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This is the first in a series
of articles where our resident specialist,
Louw van der Merwe, explains and clarifies
on a very practical level exactly
what value can be added by Internal
Audit and Risk Management within your
organisation.
What are Controls?
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At its most basic level, any
organisation converts inputs
into outputs. The one that does
so most effectively and efficiently
would be the most successful.
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Inputs are converted into
outputs via a process, and controls
govern the effectiveness and
efficiency of processes. |
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It therefore
follows that the organisation
with the best controls would
be the most successful. |
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There are many definitions
of internal control. |
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The simplest remains the original
COSO definition, stating that
controls can be classified as
either financial, compliance
or operational. |
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August 2010
RISK MANAGEMENT:
TOOL OR ADMINISTRATIVE NIGHTMARE?
By Louw
van der Merwe at GRA Services |
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“I
have seen many, if not most, risk
management processes fail within the
first year,” declared Louw van
der Merwe, director of GRA Services,
a company that specialises in risk
management services. Here he discusses
the reasons for that.
King Code
The release of the King Code of Corporate
Governance (King 3) last year has
brought the concept of risk management
to the fore again, with most organisations
nowadays attempting to establish a
risk management function.
Many risk management processes
fail for two main reasons... |
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June 2010
CORPORATE GOVERNANCE
WORKSHOPS
By Louw van
der Merwe, Exceed |
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Since November 2009, Exceed
has offered a series of workshops to discuss
the implications of the latest King Report
on Corporate Governance (King 3), which
took effect on 1 March 2010.
International Benchmark
Regarded as an international benchmark,
the Report is applicable to all organisations
regardless of size, nature and form of incorporation.
Necessary Evil Debunked
According to presenter Louw van der Merwe,
“Many participants arrive at the workshops
believing that King is a ‘necessary
evil’”. However, they soon realise
that the underlying philosophy of the report
is sustainability, while its objective is
to ensure a long-term view within businesses.
“These are good, solid business principles,”
Louw said. |
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June 2010
USING A
PRIMARY RESIDENCE FOR BUSINESS
By Sonja
Frank, Exceed |
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Are you considering using a part of
your primary residence for business purposes?
If so, the information contained in the
recently amended paragraph 45 of the Eighth
Schedule of the Income Tax Act 58 of 1962
is relevant to you.
Primary Residence Exclusion
Paragraph 45, which deals with the so-called
Primary Residence Exclusion, provides that
natural persons must disregard the first
R1,5 million capital gain or loss on their
primary residences when these were sold.
Capital Gain or Loss
After its amendment, it now further states
that from 1 March 2009 natural persons may
completely disregard the capital gain or
loss on their primary residences where the
proceeds of the sale do not exceed R2 million.
There are two conditions...
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June 2010
DEPRECIATION
ALLOWANCES
By Sonja
Frank, Exceed |
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In
an interpretation note of November
2009, SARS provided a schedule of
depreciation write-off periods applicable
to all types of machinery and equipment.
Depreciation Allowances
Interpretation Note No 47 (Issue 2),
dated 11 November 2009 contains information
regarding depreciation allowances
as set out in Section 11(e) of the
Income Tax Act.
Assets
The Note is applicable to assets that
have been brought into use during
any year of assessment commencing
on or after 1 March 2009, and prescribes
the write-off periods acceptable to
SARS. |
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June 2010
IGNORANCE
OF THE LAW IS NO EXCUSE
by Louw
van der Merwe, Exceed |
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One of the key risks facing organisations
worldwide is the challenge of adhering to
relevant laws and regulations. In South
Africa with its myriad of sometimes very
complex legislation, this is particularly
relevant.
Corporate Governance
The recently released King Report on Corporate
Governance devotes an entire chapter to
this topic.
Adherence to Laws and Regulations
The report concludes that directors should
see to it that a formal and structured process
is implemented in organisations to ensure
identification of and adherence to applicable
legislation. Adherence to laws and regulations
should be a regular agenda point, while
feedback regarding this process should form
part and parcel of every directors meeting. |
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THE
FIFA WORLD CUP, ACCOMMODATION AND SARS
By Willie Smith at Exceed |
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The 2010 FIFA World Cup
starts in a few months. South Africa has
not hosted an event of this magnitude and
will probable not host such an event again
for a long time. Everybody is looking for
ways to take advantage of various opportunities
that the World Cup will offer.
VAT Implications
Some people/companies have targeted the
letting of accommodation over the World
Cup. Whether the landlord receiving this
rent is a company, CC, trust or individual,
beware of the VAT implications. This caution
comes from Willie Smith, director of Tenk
Loubser Inc.
The VAT Act
divides letting of accommodation into 2
main categories:
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Letting of residential
accommodation (exempt supply for VAT
purposes) |
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Letting of commercial accommodation
(standard rated supply for VAT purposes) |
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SPECIAL
INCOME TAX ALLOWANCE FOR ENERGY EFFICIENCY
SAVINGS
Do you own a property, which is used
in the carrying on of any trade e.g. a Guesthouse
or B&B property? |
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Consider Alternatives
Have you ever considered replacing the electrical
geysers of this property with a more energy
efficient alternative such as solar energy
but have been discouraged from incurring
this substantial capital expenditure due
to the long pay-back period?
The
Good News
In terms of the Taxation Laws Amendment
Act published on 30 September 2009, a new
special allowance for energy efficiency
savings has been gazetted. |
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| DOING
BUSINESS IN SOUTH AFRICA |
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Establishing a private
company or a close corporation are the most
frequent choices for most overseas investors
rather than trading as an individual or
a partnership.
| Key feature
of a Private Company |
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A company is a
separate legal entity and is
registered with CIPRO (Company
and Intellectual Property Registration).
The company’s name ends
with “(Proprietary) Limited”
or (Pty) Ltd”; |
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A company is formed
with share capital which may
consist of ordinary, preference,
redeemable, convertible shares
or a combination thereof. There
is a minimum ordinary share
capital of R1 requirement for
a company; |
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Both natural persons
and juristic persons can hold
shares. There is no requirement
that a shareholder must be a
South African resident; |
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The board of
directors is appointed by the
shareholders. There is no requirement
that a director must be a South
African resident; |
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A company must
appoint an auditor practicing
in South Africa. |
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