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UP-TP-DATE: Keeping you informed of business today

“South Africa has been ranked 52nd out of 60 economies in Grant Thornton’s new GDI 2013 report (43rd out of 50 in 2012).”

Career Suite – numbers to remember

Number of committees and mentors

Member typeCommittees Mentors Total
Member CA(SA)401959

Number of jobs on site = 205

Number of articles = 196

Number of service providers registered = 9

Number of recruiters = 5 recruiters, including SET

Number of employers who have taken up the bulk posting package = 1

Number of CVs

Member typeCV not searchableCV searchable Total
Member CA(SA)115363478
Associate General Accountant123
Prospective CA(SA)31316

Total visits = 42 484

Unique visitors to the site = 28 978

SA is lacking growth drivers

According to the Grant Thornton Global Dynamism Index (GDI) 2013, South Africa’s main growth drivers have underperformed over the last year, making the country less attractive as a place to do business. Dynamism refers to the changes in an economy which are likely to lead to a faster future growth rate.

South Africa’s overall score was 44.1, down from the 2012 score of 50.0. South Africa has been ranked 52nd out of 60 economies in Grant Thornton’s new GDI 2013 report (43rd out of 50 in 2012).

Even more worrying is the fact that South Africa’s 2013 scores compared to those of last year highlight a stagnant economy with no improvement in any of the performance indicators within the data. South Africa’s slide from 43rd to its 52nd position out of 60 countries therefore reflects a 12% decline.

A complete list of the 60 countries and their rankings can be found at https://globaldynamismindex.com/gdi.html

Partnering for growth for economic success

Intraregional trade in Africa is still very low compared to trade percentages on other continents. Reducing trade barriers alone is not enough for intraregional trade in Africa to become a winning enterprise, is the opinion expressed in The  Economic Development in Africa Report 2013 from the UN Conference on Trade and Development (UNCTAD).

The report argues that African governments need to boost private industry and develop entrepreneurs if businesses in the region are to remain competitive and successful. This means that both the private and public sectors need to establish partnerships if Africa is to achieve economic success.

Another point made in the UNCTAD report is that Africa suffers from a number of deficiencies, including lack of services and infrastructure. In addition to this, the numbers of African companies tend to be very small – making it difficult for them to be competitive and successful. However, if African governments boost their private industries and support their entrepreneurs, they could compete with foreign firms encumbered by trade barriers. The report can be found at http://unctad.org/en/PublicationsLibrary/aldcafrica2013_en.pdf

Smartphone application simplifies payroll

We live in an era where most individuals use their smartphones every day to call, SMS, WhatsApp, Facebook … you name it.

Many experts in the industry believe that global mobile Internet usage is projected to overtake desktop usage by 2014, meaning that, globally, individuals will access the Internet from their smartphones more than from their desktops.

Philip Meyer, technology director at Sage Pastel Payroll & HR, says that the importance of applying mobile technology cannot be overestimated.

According to a South African Network Society project undertaken at the University of the Witwatersrand in 2012, more than  seven out of ten Internet users utilise their mobile phones to go online and more people own Internet-capable phones than computers.

Sage Pastel Payroll & HR developed a hosted, web-based tool enabling employees to manage and maintain their information online, called Self Service.

Self Service enables employees to make online applications for leave, salary advances, loans, bursaries or other financial assistance, no matter where they are in the world, as long as they have an Internet connection. Employees can view their previous months’ payslips (Self Service online only), update personal information, submit their travel claims and more.

For more information, visit http://www.pastelpayroll.co.za/

Professional conduct notice

The SAICA Disciplinary Committee (“Committee’’) is empowered to order publication of details of professional conduct cases in cases where the Committee considers it an appropriate sanction. When making an order of publication, the Committee can order that the name of a member, together with the facts and outcome of the case, should be published. In certain cases the member’s name may be excluded from publication.

In a June 2013 decision, the Committee heard and decided a case against a member and ordered that the facts and outcome, without the member’s name, should be published. The case in question is Case 77/11, which was heard and finalised by the Committee on 21 June 2013. The facts and outcome of the case appear below.


The member was an employee of, and/or consultant to, one or more companies in a company herein referred to as ‘the Group Company’. The member was registered with the Financial Services Board in terms of the Financial Advisory and Intermediary Services Act, 2002 (Act 37 of 2002), the FAIS Act, and was thus subject to the provisions of the FAIS Act.

The member was charged with seven counts of improper and/or unprofessional conduct, which charges arose from professional advice given by the member to clients of the Group Company in relation to their investment choices in financial products offered by the Group Company. 


The Group Company has a policy that prohibits financial advisers from taking investments from clients who seek to take up investments using debt. Despite knowledge of this policy, the member proceeded to advise six different clients to take up investment products. The clients collectively invested an amount of more than R3,9 million and incurred a collective loss of about R2 million. Details of the investments are as follows:

  • Client 1: Total investment R900 000.00, loss incurred R479 112.23;
  • Client 2: Total investment R1 020 000.00, loss incurred R736 235.14;
  • Client 3: Total investment R437 000.00, loss incurred R193 551.11;
  • Client 4: Total investment R780 000.00, loss incurred R236 311.10;
  • Client 5: Total investment R485 000.00, loss incurred R239 810.46; and
  • Client 6: Total investment R290 000.00, loss incurred R138 057.69.

Further, the member was related to the clients and despite this conflict of interest proceeded to advise and make investments on their behalf.

In the seventh charge, the member had concluded a settlement agreement with one of the clients who fell victim to the scheme. Despite this the member failed to comply with the terms of the settlement agreement. The member was charged for improper conduct as a result of his failure to comply with the said settlement agreement.

Decision of the Committee

The Committee found the member guilty on all charges and in that respect ordered that the member’s membership with the Institute be suspended for a period of 18 months from the date of the decision of the Committee. It was further ordered that the member pay 50% of the costs of the hearing, being R25 000.00, and that the details and outcome of the case should be published without publishing the name of the member.

For enquiries email discipline@saica.co.za


Revised Headline Earnings Circular issued

Circular 2/2013 – Headline Earnings, which replaces Circular 3/2012 – Headline Earnings, has been issued. The revisions contained in Circular 2/2013 reflect new International Financial Reporting Standards (IFRS) amendments to IFRS/Interpretations issued from 30 April 2009 to 30 April 2013. Furthermore, changes were introduced to clarify certain aspects, specifically:

  • IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, where there is a change in a plan with regard to an asset or group of assets held for sale.
  • IAS 16 – Property, Plant and Equipment and IAS 38 – Intangible Assets for the subsequent measurement of the compensation receivable.
  • IAS 17 – Leases has been added for completeness.
  • IFRIC 1 – Changes in Existing Decommissioning, Restoration and Similar Liabilities, IFRIC 18 – Transfers of Assets from Customers and SIC 25 – Income Taxes – Changes in the Tax Status of an Entity or its Shareholders have been added for completeness because these interpretations deal with re-measurements not already included in the underlying standard. (Interpretations dealing with disclosure issues alone have not been added to the rule table.)

Circular 2/2013 – Headline Earnings is effective for financial periods (interim and/or annual periods) ending on or after 31 July 2013. 

As the incorporation of Circular 2/2013 – Headline Earnings into the JSE Listings Requirements will constitute an amendment to the Listings Requirements, which will require that the provisions of the Financial Markets Act, 2012 (Act 19 of 2012) be complied with. Until such time that Circular 2/2013 – Headline Earnings is formally incorporated in the JSE Listings Requirements, the circular is released for voluntary early adoption.

Circular 2/2013 – Headline Earnings can be downloaded from the SAICA website.

Minor changes made to Financial Reporting Guide 3

Financial Reporting Guide 3 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction in the South African Pension Fund has been amended for revisions to IAS 19 – Employee Benefits and IFRIC 14 – IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction that were effective for annual periods beginning on or after 1 January 2013. Financial Reporting Guide 3 can be downloaded from the SAICA website.


Auditor Board Recognised as Accrediting Authority

South African Qualifications Authority

The Independent Regulatory Board for Auditors (IRBA) has been approved for recognition by the South African Qualifications Authority (SAQA) as a professional accrediting authority in terms of the National Qualifications Framework Act, 2008 (Act 67 of 2008).

The recognition of Registered Auditor (RA) as a designated title to be accredited by the IRBA in terms of the National Qualifications Framework (NQF) has also been evaluated and approved by the SAQA Board against set policy and criteria.

The complete application document for this professional body and its corresponding designated title is available from SAQA.


Interest-free loans

Where a board authorised a company to provide direct financial assistance to a director of the company, a question relating to the tax consequences often arises. It would typically be that the financial assistance was by way of an interest-free loan. The director also holds shares in the company and is a connected person in relation to the company.

The question that arises is whether a taxable benefit (as envisaged in paragraph 2(f), read with paragraph 11, of the Seventh Schedule) arises, or will it be subject to the dividends tax (under section 4E(4)), or both.

At issue is whether or not “that debt arose by virtue of any share” or “in respect of the employee’s employment with the employer”. The Seventh Schedule defines the “in respect of employment” part as follows: “… if as a benefit or advantage of, or by virtue of, such employment or as a reward for services rendered or to be rendered by the employee to the employer”. In Stevens v CSARS [2006] SCA 145 (RSA) Judge Howie stated that “there is no material difference between the expressions ‘in respect of’ and ‘by virtue of’ in paragraph (c)” – (paragraph (c) of the definition of gross income). With regard to both, Judge Howie then stated that if there was “an unbroken causal relationship between the employment on the one hand and the receipt on the other” the payment will be “in respect of services rendered”. It is submitted that the same principle will apply for purposes of paragraph 2 of the Seventh Schedule.

It is also submitted that the same logic would apply when the phrase “by virtue of any share” is considered; there must be a causal relationship between the share and the amount transferred. It is important to note that the company will only be deemed to have paid a dividend if the individual is a connected person in relation to the company or a connected person in relation to a connected person in relation to the company.

To decide whether the interest-free loan results in a taxable benefit (and then gross income) or a dividend subject to the dividends tax, one will have to determine the reason (or cause) for the granting of the loan. This will often be stated in the minutes authorising the loan (as envisaged by the Companies Act). It is important to remember that it can only be one form of tax, as the two are essentially mutually exclusive – refer to section 64F(l) – to be read with sections 64FA and 64E(4). The benefit of not paying interest will therefore be subject to either employees’ tax or dividends tax and not to both. 

Leadership corner

Barry Salzberg is the Global CEO of Deloitte Touche Tohmatsu Limited.

Who wants to be a CEO? More people than you’d think. According to a survey by Bentley University of college-educated young professionals, 78% aspire to a leadership role in whatever field they ultimately choose to work. (http://www.bentley.edu/centers/sites/www.bentley.edu.centers/files/centers/cwb/millennials-report.pdf)

“Be yourself, everyone else is taken” – Oscar Wilde

Businesses embrace diverse backgrounds and viewpoints. As you work to develop leadership skills and advance your career, don’t waste time trying to be someone you’re not. Be brave embrace those things that make you different. You’ll not only set yourself apart from the crowd but perhaps, more importantly, inspire those around you.

Fill the pages of your passport

In today’s increasingly globalised world, business leaders need truly international perspectives to be successful. Sign up for an international assignment if your company offers this – or even take a career break to travel. Use this time to understand different cultures and countries, or learn another language. New research suggests this can make you a more rational thinker and a better leader. (http://www.forbes.com/sites/rogerdooley/2012/10/30/foreign-language-effect/)

One employer for life?

Working your way up within a company is just one path to a senior leadership role. This is what happened in my career, although during my journey I had many diverse jobs, roles and assignments. It’s not the right path for everyone. In fact, according to a recent survey, today’s young professionals could have as many as 15 or even 20 jobs over their lifetimes. Consider whether your vision for business and your career is best realised within your existing company or by building your own.


Get a microphone

If I was giving you traditional advice about developing your leadership career, I’d tell you to focus on developing your reputation and personal brand. Work hard to develop expertise in your respective area and then become known for being great at what you do. There are many good books and online resources available on this subject.

Here’s an idea to take it even further: share your expertise and unique point of view with others as widely as possible. Give a talk. Start a blog. Write a book. (But always be mindful, once you put your thoughts out there, what you said and how you said it will be irretrievable.)


EY is the world’s most attractive professional services employer

Based on the preferences of almost 94 000 business students from the world’s top academic institutions, in the largest 12 economies by GDP, EY is now the second most attractive employer globally and the highest ranking choice among leading professional services organisations.

As well as ranking as the leading professional services organisation in six out of the 12 markets, EY also featured as one of the top 15 employers overall in Australia, Canada, France, Germany, India, Italy, Russia, the United Kingdom and the United States.

“We congratulate EY for its great achievement. Being seen by students as an ideal employer is something to be celebrated. As a CEO, I understand the value in being able to attract, recruit and retain the top performers. EY excels in this area and thus has a competitive talent advantage,” said Petter Nylander, CEO of Universum.

“We are delighted and honored to feature as the world’s most attractive professional services employer, and second most attractive employer overall, in the Universum ranking this year,” says Mark Weinberger, EY’s Global chairman and CEO. “At EY we are committed to attracting, developing and inspiring great people and developing future leaders; this is fundamental to our purpose of building a better working world.”

Mike Cullen, EY’s Global Managing Partner, Talent, adds: “I’d like to congratulate all of our 170 000 people who have helped build our reputation as the world’s most attractive professional services employer. Our greatest asset is our high-performing teams throughout the world and we are committed to continuing to develop and strengthen our employer brand by offering exceptional experiences for all our people.”

Standard Bank’s tips for the small business owner

Managing your employees is managing your business

As your business grows, you’ll need to employ more people. Leigh Livanos, head of Start-up Business at Standard Bank, says that learning to manage employees effectively is an essential part of running a successful business.

Keep employees loyal and motivated by treating them with respect and following the laws governing labour practice. Therefore:

  • Read and display in your office the Basic Conditions of Employment Act, the Employment Equity Act, and the Occupational Health and Safety Act.
  • Learn about:
    • Calculating and allocating leave
    • Entitlement to sick leave
    • Notice periods
    • Disciplinary processes
    • Retention of employee information
    • Your UIF and PAYE obligations.

When you’re recruiting, write a detailed job description. This helps you ensure a match between a potential employee’s CV and your requirements. Don’t take a CV at face value: check the references.

Write a letter of employment that specifies the employee’s duties, hours of work, benefits (such as medical aid, pension fund, performance bonuses and leave allocations) and notice period. Clarify overtime. The employee must sign and keep a copy of the letter.

Resignations should be submitted and only be accepted in writing.

For more information on appointing and managing staff visit

The number of rhinos killed in 2013 thus far is 688 – up from 668 in all of 2012 – mostly because of an escalation of the illegal trade in their horns

Bill Gates topped the Forbes list of the richest Americans for 20 years – this year alone his net worth climbed to US$72 billion

Spain’s public debt reached a record-high €942.8 billion in June; that’s roughly 92% of the country’s GDP

Apple news

Apple sold a record-breaking nine million new iPhone 5s and 5c models just three days after the launch of the new iPhones on September 20, sending Apple stock up 5%.

Spoof ads promising users waterproofing through the iOS 7 update led to many phones being ruined by their curious owners.

HIV progress report

The Joint UN Programme on HIV/AIDS (UNAIDS) has announced that more people are living with HIV (35.3 million in 2012) because they are receiving life-saving antiretroviral therapy. Here are three encouraging facts from the report:

  • There was a 33% drop in new cases, to 2.3 million annually, from 3.4 million in 2001.
  • The number of new HIV infections among children showed a 52% decrease from 2001, to 260 000.
  • There was a 30% decline, to 1.6 million, in AIDS-related deaths since the peak of 2.3 million in 2005.



Samsung Galaxy Note 3

Samsung’s latest release in the Galaxy Note family is big and bold but better built than ever. The Galaxy Note 3 features a 5.7” Super AMOLED screen, is only 8.3 mm thick and weighs 168 g. Despite its huge screen, the Galaxy Note 3 is only slightly bigger than last year’s Galaxy Note 2 and features an enhanced S-Pen, which now integrates far more with the phone, and a huge 3200 mAh battery for all-day power.

A 13 MPcamera is included as well as the latest version of Android (4.3), while 3 GB of RAM ensures smooth and fluid performance. The Galaxy Note 3 has more useful features and functions than can be detailed here. A unique and useful two-year, one incident per year, collect and replace accidental damage of any nature guarantee is built in. Experience it at all cellular stores, with various packages available. It will retail for R8 995.

For more information go to http://www.samsung.com/za/

Dell Inspiron 23

This is the latest all-in-one desktop from Dell. The Inspiron 23 is a 23” all-in-one computer with a bright and sensitive full HD touchscreen. The Inspiron 23 can fold from vertical to fully horizontal. Its ultra-slim construction includes an Intel 4th generation core i7, which makes working on the Inspiron 23 as easy as it is to look at. Running the full Windows 8.1, the Inspiron 23 is perfect for home or office. You can specify up to 8 GB of RAM and a 1 terabyte hard drive. The graphics card’s prowess will even allow some casual gaming. A wireless keyboard and mouse complete the package. Available from 1 October 1 at R13 000.

For more information go to http://www.dell.co.za/

Fitbit Flex Health Tracker

Summer is in the air and attempts at getting fit for the holidays are in full swing. Wearable aids such as the Fitbit Flex may just make your journey to greater fitness more organised and structured, not to mention adding much-needed motivation. The FitBit Flex is a wearable sensor which connects to your computer, Apple or Android phone and monitors your daily activity – even your sleep patterns. The mobile and desktop app allows you to track food intake and other key stats. You can share your progress with friends or set goals for yourself. Available locally at all Apple iStores countrywide at R1 295.

For more information go to http://www.fitbit.com