Business Studies Grade 12 Question Paper

POST TEST MEMO SPRING CLASSES 2017 1. Partnership Success or failure factors of a partnership Criteria Success Failure 1.1 - Partners are actively involved in - Decision making can be time- Manage- management√ and may use the consuming√ as all partners have ment ideas of other partners.√ to be in agreement.√ - Partners have access to - Some management tasks may be expertise of other partners√ when neglected√, as one partner may tough decisions have to be leave it to others to complete.√ made.√ - Not all partners need to be - Partners may disagree on how to actively involved in management√ run the business√, which may and would rather appoint lead to tension between them.√ competent managers.√ - Partners are agents of the partnership√ and bad management decisions may be forced onto other partners.√ - Any other relevant success factor - Any other relevant failure factor on management of a partnership. on management of a partnership. Sub max (4) 1.2 - Partnerships pay VAT only on - High-earning partners pay more Taxation relevant products sold/services tax√, which may discourage other rendered√ which reduces tax partners from joining the administration.√ partnership.√ - The partnership does not pay - Partners may withdraw more income tax√, only the partners in cash to reduce their tax burden√ their personal capacities.√ which may cause cash flow problems for the partnership.√ - Any other relevant success factor - Any other relevant failure factor on taxation of a partnership. on taxation of a partnership. Sub max (4) Max (8) 2. Advantages of ordinary shares - Holding a higher number of shares may result in higher proportional dividends.√√ - Shares of listed companies can be freely transferred/traded on the JSE.√√ - Shareholders’ liability for company debts is limited to the amount invested in shares/Shareholders have limited liability for the debts of the company.√√ - Shareholders have voting rights at the annual general meeting (AGM).√√ - Rate of return on investment (ROI) is linked to the performance of the company.√√

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https://ultradeep.co.za -Ordinary shares are usually cheaper than preference shares on the open market.√√ -Ordinary shareholders can track the value of their investment through published information/different media.√√ - Any other relevant answer related to the advantages of ordinary shares. NOTE: Mark the first THREE (3) only. Max (6) 3. Functions of the JSE -Gives opportunities to financial institutions such as insurance companies√ to invest their funds in shares.√ -Serves as a barometer/indicator√ of economic conditions in South Africa.√ - -- -Keeps investors informed on share prices√ by publishing the share prices daily.√ -Acts as a link√ between investors and public companies.√ -Shares are valued√ and assessed by experts.√ -Small investors are invited to take part in the economy of the country√ through the buying of shares.√ -Venture capital market√ is made possible.√ -Orderly market for securities√ serves as a disciplined market for securities.√ -Encourages√ new investments.√ -Mobilises the funds√ of insurance companies and other institutions.√ -Raises √ primary capital.√ -Regulates market√ for dealing with shares.√ -Plans, researches and advises√ on investment possibilities.√ -Ensures that the market√ operates in a transparent manner.√ -Provides protection√ for investors.√ -Encourages√ short-term investment.√ -Facilitates√ electronic trading of shares/STRATE.√ -Any other relevant answer related to the functions of the Johannesburg Securities Exchange (JSE.) Max (6) QUESTION 4 BUSINESS VENTURES (INSURANCE AND PRESENTATION) 4.1 Introduction - Insurance is extremely beneficial to both businesses and individuals.√ - Insurance provides some source of financial relief to the business.√ - Business needs to know which risks are insurable or non-insurable.√ - Presentation methods should be improved regularly to stay abreast with the latest trends.√ o Any other relevant introduction related to insurance and presentations. Max (2) https://tvetpapers.co.za

https://ultradeep.co.za 4.2 Distinction between compulsory and non-compulsory insurance COMPULSORY INSURANCE NON-COMPULSORY INSURANCE - Is required by law/There are legal - Is voluntary/The insured has a choice√ obligations√ for it to be taken out whether to enter into an insurance and paid for.√ contract.√ - It is regulated by Government√ and - Insured will enter into a legal insurance does not necessarily require contract with the insurer√, who may be insurance contracts/brokers.√ represented by an insurance broker.√ - Payment is in the form of a levy/ - Monthly/Annual payments/premiums contribution paid into a common that must be paid√ in order to be fund√ from which benefits may be covered for a nominated risk/insured claimed under certain conditions.√ event.√ - Any other relevant answer related - Any other relevant answer related to to compulsory insurance. non-compulsory insurance. Sub max (4) Sub max (4) - Examples: - Examples: Unemployment Insurance Fund/ Short term insurance√/Multi-peril/ UIF√, Road Accident Fund/ Comprehensive insurance (theft, fire, RAF/Road Accident Benefit etc.)√ Scheme/RABS√, Compensation Long-term insurance√/Life insurance√ for Occupational Injuries and Diseases /COIDA√ - Any other relevant example of - Any other relevant example of non- compulsory insurance. compulsory insurance. (2 x 1) (2) (2 x 1) (2) NOTE: 1. The answer does not have to be in tabular format. 2. The distinction must be clear. 3. Mark the first TWO (2) examples of each type of insurance. Max (12) https://tvetpapers.co.za

https://ultradeep.co.za 4.3 Importance of insurance to businesses - Transfers the risk from businesses/insured√ to an insurance company/insurer.√ - Transfer of risk is subject to the terms and conditions√ of the insurance contract.√ - Protects businesses against theft/loss of stock/damages√ caused by natural disasters e.g. floods/storm damage√, etc. - Businesses will be compensated√ for insurable losses.√ - Valuable business assets√ e.g. vehicles/equipment/buildings need to be insured against damage and/or theft.√ - Businesses are protected against the loss of earnings√, e.g. strikes by employees which result in losses worth millions.√ - Protects businesses√ against dishonest employees.√ - Life insurance can be taken on the life of partners in a partnership√ to prevent loss of capital.√ - Should the services of key personnel be lost due to accidents/death√, the proceeds of an insurance policy can be paid out to the business.√ - Replacement costs for damaged machinery/equipment are very high√, therefore insurance can reduce/cover such costs.√ - Protects the business against losses√ due to the death of a debtor.√ - Insurance policies can be ceded to financial institutions√ as security/collateral for loans√. - Any other relevant answer related to the importance of insurance to businesses. Max (8) 4.4 Principles of insurance 4.4.1 Security/Certainty√√ - Applies to long-term insurance√ where the insurer undertakes to pay out an agreed upon amount in the event of loss of life.√ - A predetermined amount will be paid out √ when the insured reaches a pre- determined age/or gets injured due to a predetermined event.√ - Aims to provide financial security√ to the insured at retirement/the dependents of the deceased.√ - Any other relevant answer related to security/certainty as a principle of insurance. Principle (2) Explanation (6) Sub max (8) 4.4.2 Indemnification/Indemnity√√ - Usually applies to short term insurance√, as the insured is compensated for specified/proven harm/loss.√ - Insurer agrees to compensate the insured for damages/losses specified in the insurance contract√, in return for premiums paid by the insured to the insurer.√ - Protects the insured against the specified event√ that may occur.√ https://tvetpapers.co.za

https://ultradeep.co.za - Pay-outs from insurance companies/insurer will only be made√, if there is proof that the specified event took place/if the insured can prove the amount of the loss/ damage.√ - The amount of indemnification/compensation is limited to the amount of provable loss/damage√, even if the amount in the policy/insurance contract is higher.√ - The insured must be placed in the same position√ as before the occurrence of the loss/damage√/The insured√ may not profit from insurance.√ - Any other relevant answer related to indemnification/indemnity as a principle of insurance. Principle (2) Explanation(6) Sub max (8) 4.4.3 Insurable interest√√ - Insured must prove that he/she will suffer a financial loss√ if the insured object is damaged/lost/ceases to exist.√ - An insurable interest must be expressed√ in financial terms.√ - Insured must have a legal relationship√ with the insured object in the contract.√ - Any other relevant answer related to insurable interest as a principle of insurance. Principle (2) Explanation (6) Sub max (8) 4.4 Utmost good faith√√ - Insured has to be honest in supplying details√ when entering in an insurance contract.√ - Both parties√ must disclose all relevant facts.√ - Insured must disclose everything√ that may affect the extent of the risk.√ - Details/Information supplied when claiming√ should be accurate/true.√ - Any other relevant answer related to utmost good faith as a principle of insurance. Principle (2) Explanation (6) Sub max (8) NOTE: 1. Mark the first THREE (3) only. 2. Award marks if the example demonstrates understanding of the principles/requirements. Max (16) 4.5 Advice on the improvement of the next presentation - Mr Funa should revise objectives that were not achieved.√√ - Use humour appropriately.√√ - Always be prepared to update/keep the information relevant.√√ - Reflect on any problem/criticism and avoid it in future presentations.√√ https://tvetpapers.co.za

https://ultradeep.co.za - Any information that Mr Funa receives as feedback from a presentation should be analysed and where relevant, incorporated/used to update/amend his presentation.√√ - Reflect on the time/length of the presentation to add/remove content.√√ - Increase/Decrease the use of visual aids or replace/remove aids that do not work well.√√ - Reflect on the logical flow of the format/slides/application of visual aids.√√ - Any other recommendation related to how Mr Funa can improve his next presentation. Max (10) 4.6 Conclusion - Insurance plays an important role in securing the future of any business.√√ - The purpose of insurance is to provide businesses with financial peace of mind.√√ - Effective presentation of business information is one of the key elements of communicating with various stakeholders.√√ - Any other relevant conclusion related to insurance and presentations. Max (2) [40] QUESTION 8: BREAKDOWN OF MARK ALLOCATION DETAILS MAXIMUM TOTAL Introduction 2 Distinction between compulsory and 12 non-compulsory insurance Importance of insurance 8 Max 32 Principles of insurance 16 Improvement on the next 10 presentation Conclusion 2 INSIGHT Layout 2 Analysis/Interpretation 2 8 Synthesis 2 Originality/Examples 2 TOTAL MARKS 40 LASO – For each component: Allocate 2 marks if all requirements are met. Allocate 1 mark if only some of the requirements are met. Allocate 0 marks where requirements are not met at all. https://tvetpapers.co.za