Verification

Can you imagine being Yuneal and leaving such a legacy

It's overwhelming, Almost rivals bolshie bob. I've included the whole email which is now out of PAJA's reach. At least the infamous and roundly detested Dees' details are there for all to see.

I always found Yuneal to be a decent bloke on the phone. I thought he was largely ineffectual. But I'm not hearing good reports about him. One person saying that he and Dees were a bit of a cabal. This is not verified but neither of the two were liked by their constituents.  Yuneal has now been set upon the private sector, Dees is still trying to build up a smaller fanbase.

Before you look through this email below just consider the following. Here we have the head of the BEE division of SANAS providing an opinion on the industry average calculation and then stating this opinion is applicable, in other words - THIS IS THE ONLY INTERPRETATION. This begs the question, where on earth did Yuneal or SANAS get the authority to provide such codified advice. This is beyond their scope, it's the same as when Yuneal decided that you had to use a financial year to measure your BEE period. Even though there is nothing in any code or verification manual that supports this.

This is not an opinion, it's an amendment. Not that Yuneal cared much at the time. Of course the verification agencies are too shit scared of Dees and SANAS to query this. Where's the dti? They've never returned from their COVID hibernation.

There is no legal backing for this opinion, of course Yuneal tries to legitimise his delusion by saying he's dealt with the dti on this. Why don't the dti send this out? They have no credibility but they have more than SANAS. Even then it is merely an opinion. There is no legal backing for any opinion that SANAS offers and this power remains unchecked.

The email below is absolutely wrong. This is what bolshie's last amendment says

3.2.1 The Net Profit After Tax (NPAT) or average target applies unless:         

3.2.1.1 the company does not make a profit last year or on average  over the last five years        

3.2.1.2 the net profit margin is less than a quarter of the norm in the industry    

3.2.11 talks of two options.

i)    No profit in this year and the year before OR

11)    On average over five years.

If you don't qualify for the first one then go to the second. With the anc having fucked up the economy the way they have profit is a very old friend. The conversation should stop at that point.

But let's say you did make a profit in the last year but it was below the industry average (this comes from STATSSA – a well acclaimed authority, I reckon putin consulted them before he attacked Ukraine. You can imagine the conversation

Vlad – will we receive any resistance when we attack Ukraine

STATSSA – never!!!!!!!!!)

Back to the industry average. There is a calculation that you can use.

But Yuneal (one wonders if he operated alone here) decides to make it more complicated. He also adds in this line

The NPAT-figure used must be the most recent NPAT (not older than 5 years) which is at least 25% of the industry norm


Where did he get this from? It's not in the codes. The codes talk about current NPAT. Not go back five years and use that figure. This is sucked out of  a thumb. I'll give you an example, which is real. The client has made a loss in the last two years (according to the codes we should stop at that point) but three years ago they had a smaller business and they did well, NPAT sat at about 25% of turnover. All the verification agencies are saying you need to go back to 25% and then do the calculation and the indicative NPAT figure amounts to 25% of turnover which in this case came to R820m (yes you read that right – EIGHT HUNDRED AND TWENTY MILLION) . This is in a year where the company made a R150m loss – I'll read that again. ONE HUNDRED AND FIFTY MILLION RAND LOSS.

This is Yuneal's legacy. Great isn't it. He's operated ultra vires. He has amended codes by inflicting his opinions on the verification agencies. Who by the way arrive after the measurement period and penalise the clients.

Yuneal is not done yet, his replacement is apparently also having fun.

What a joy. Read and cry. Next episode is on how I plan to take SANAS down this year through PAJA applications.

From: Yuneal Padayachy <[email protected]>
Sent: 31 July 2020 06:00 PM
Cc: Dees Dhanraj <[email protected]>; Mpho Mukhavhuli <[email protected]>; Irene Kali <[email protected]>; Shirley Dolamo <[email protected]>
Subject: NPAT Calculation
Importance: High

Dear Nominated Representatives and Assessors,

I trust that you are well.

We have received a few queries around the calculation of NPAT in relation to Targets under Enterprise Development, Supplier Development and Socio-Economic Development and in consultation with the Department of Trade, Industry and Competition's (the dtic) Broad-Based Black Economic Empowerment (B-BBEE) Policy Unit, the following is applicable:

As per the General Amended Codes of Good Practice, the following is stated:

  • The Net Profit After Tax (NPAT) or average target applies unless:
    • the company does not make a profit last year or on average over the last five years
    • the net profit margin is less than a quarter of the norm in the industry.
    • If the Turnover is to be used, the target will be set at:
      • 1% (ED),  2% (SD) or 1% (SED) x Indicative Profit Margin (NPAT/Turnover) x Turnover
    • Indicative Profit Margin is the profit margin in the last year where the company's profit margin is at least one quarter of the industry norm.

Unless otherwise stated in a particular B-BBEE Sector Code of Good Practice and in line with B-BBEE verification principles and methodologies, the following is applicable:

Step 1:

Determine whether contribution recognition claimed is for the Measurement Period only or spans multiple Measurement Periods.

Step 2 (1):

If Measurement Period only, compare the NPAT margin to the Industry Norm, found in the latest StatsSA Quarterly Report.

Step 2 (2):

If multiple Measurement Periods, compare the average NPAT margin over the Measurement Periods utilised to the Industry Norm, found in the latest StatsSA Quarterly Report.

Step 3:

If NPAT margin is 25% or more of the industry norm, said NPAT figure to be used.

Step 4:

If NPAT margin is less than 25% of the industry norm, the target now becomes turnover based. Calculate Indicative Profit Margin (NPAT/Turnover). The NPAT-figure used must be the most recent NPAT (not older than 5 years) which is at least 25% of the industry norm.

Step 5.1:

Slot Indicative Profit Margin into formula element target (1% or 2%) x IPM (Actual Figure and not 25% of IPM) x Turnover = New Target

Step 5.2:

If NPAT margin is less than 25% of the industry norm, stretching back longer than 5 years, the target becomes 25% of the latest industry norm.

Thank You

Kind Regards

Yuneal Padayachy


Accreditation Manager: B-BBEE

Tel: +27 (0) 12 740 8517 / Cellphone: 072 596 7777 / E-mail: [email protected] / Website: www.sanas.co.za

Libertas Office Park, Cnr Libertas and Highway Streets, Equestria, Pretoria, 0184

 


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