Dti B-bbee Codes Final

8/6/2019 Dti B-bbee Codes Final

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Section 9(1): Codes of Good Practice

Te Minister of Trade and Industry ereby issues te following Code of Good Practice

under section 9(1) of te Broad-Based Black Economic Empowerment Act 53 of 2003.

REPABOLIKI YA AFERIKA BORWA

REPUBLIEK VAN SUID AFRIKA

BROAD-BASED

BLACK ECONOMIC EMPOWERMENT

CODES OF GOOD PRACTICE


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2 0 0 7 D E P A R T M E N T O F T R A D E A N D I N D U S T R Y

INDEX FOR ThE CODES

Index of Code Series

Code Series Code Title

000 FrameworkformeasuringBroad-BasedBlackEconomicEmpowerment

100 Measurement of the Ownership Element of Broad- Based Black Economic

Empowerment

200 Measurement of the Management Control Element of Broad -Based Black

EconomicEmpowerment

300 MeasurementoftheEmploymentElementofBroad-BasedBlackEconomic

Empowerment

400 Measurement of the Skills Development Element of Broad-Based Black

EconomicEmpowerment

500 MeasurementofthePreferentialProcurementElementofBroad-BasedBlack

EconomicEmpowerment

600 MeasurementoftheEnterpriseDevelopmentElementofBroad-BasedBlack

EconomicEmpowerment

700 MeasurementoftheSocio-EconomicDevelopmentElementofBroad-Based

BlackEconomicEmpowerment

800 MeasurementofQualifyingSmallEnterprisesofBroad-BasedBlackEconomic

Empowerment

Index for generic Statements

Statement Number Code Series and Statement Title

000 Codeseries000- GeneralprinciplesandtheGenericScorecard

003 Codeseries000- Guidelines for the development and gazetting of

TransformationChartersandSectorCodes

004 Codeseries000- Scorecardsforspeciali sedEnterprises

100 Codeseries100- ThegeneralprinciplesformeasuringOwnership

102 Codeseries100- RecognitionoftheSaleofAssets

103 Codeseries100- TherecognitionofEquit yEquivalent sforMultinationals

200 Codeseries200- The general principles for measuring Management

Control

300 Codeseries300- The general principles for measuring Employment

Equity

400 Codeseries400- The general principles for measuring Skills

Development


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500 Codeseries500- The general principles for measuring Preferential

Procurement

600 Codeseries600- The general principles for measuring Enterprise

Development

700 Codeseries700- The general principles for measuring Socio-

EconomicDevelopment

Special Index for Qualifying Small Enterprises

Statement Number Code Series and Statement Title

800 Codeseries800- The Qualifying Small Enterprises Scorecard and

ExemptedMicro-Enterprises

801 Codeseries800- OwnershipforQualifyingSmallEnterprises

802 Codeseries800- Management Control for Qualifying Small

Enterprises

803 Codeseries800- EmploymentEquit yforQualif yingSmallEnterprises

804 Codeseries800- SkillsDevelopmentforQualif yingSmallEnterpri ses

805 Codeseries800- Preferential Procurement for Qualifying Small

Enterprises

806 Codeseries800- Enterprise Development for Qualifying Small

Enterprises

807 Codeseries800- Socio-Economic Development for Qualifying Small

Enterprises


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CODE SERIES 000: FRAMEWORK FOR MEASURING

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

STATEMENT 000: GENERAL PRINCIPLES AND ThE GENERIC SCORECARD

Issued under section 9 of the Broad-Based Black Economic Empowerment Act of 2003

Arrangement of this statement

Para Subject Page

1 Objectivesofthisstatement 2

2 Keyprinciples 2

3 ApplicationoftheCodes 3

4 EligibilityasanExemptedMicro-Enterprise 3

5 EligibilityasaQualifyingSmallEnterprise 3

6 Start-upenterprises 4

7 TheElementsofB-BBEEintermsoftheGenericScorecard 4

8 TheGenericScorecard 5

9 Enhancedrecognitionforcertaincategoriesofblackpeople 5

10 FrameworkfortheAccreditationofBEEVericationAgencies 5

11 Transitionalperiod 6

12 Adjustmentofthresholds 6

13 DurationoftheCodes 6


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1 Objectives of tis statement

Theobjectivesofthisstatementareto:

1.1 specifyinterpretativeprinciplesofB-BBEE;

1.2 specify the application of the Codes and the basis for measurement under the

Codes;

1.3 specify the qualifying thresholds for businesses to qualify as Exempted Micro-

Enterprises(EME)orQualifyingSmallEnterprises(QSE);

1.4 specifythemethodofmeasuringstart-upenterprises;

1.5 specifytheelementsofB-BBEEmeasurableundertheGenericScorecard;

1.6 specifytheGenericScorecard;

1.7 specifythebasisfordeterminingcompliancebyentitieswiththeCodes;

1.8 providefortheTransitionalPeriodbeforethecompulsoryuseoftheGenericScorecard

starts;and

1.9 denethedurationfortheapplicabilityoftheCodes.

2 Key principles

2.1 ThefundamentalprincipleformeasuringB-BBEEcomplianceisthatsubstancetakes

precedenceoverlegalform.

2.2 IninterpretingtheprovisionsoftheCodesanyreasonableinterpretationconsistent

withtheobjectivesoftheActandtheB-BBEEStrategymusttakeprecedence.

2.3 ThebasisformeasuringB-BBEEinitiativesundertheCodesistheB-BBEEcompliance

ofthemeasuredentitiesatthetimeofmeasurement.

2.4 AnymisrepresentationorattempttomisrepresentanyenterprisestrueB-BBEEStatus

mayleadtothedisqualicationoftheentirescorecardofthatenterprise.

2.5 Initiativeswhichsplit,separateordivideenterprisesasameansofensuringeligibility

as an E xempted Micro -Enterpri se, a Qualif ying Small Enterprises or a Star t- Up

EnterpriseareacircumventionoftheActandmayleadtothedisqualicationofthe

entirescorecardofthoseenterprisesconcerned.

2.6 Any representation made by an Entity about its B-BBEE compliance must be

supported by suitable evidence or documentation. An Entitythat does notprovide

evidenceordocumentationsupportinganyinitiative,mustnotreceiveanyrecognition

forthatinitiative.

2.7 WhereveraStandardValuationMethodappliestomeasuringanindicator,thesame

standardshouldapply,asfarasreasonablypossible,consistentlyinallotherapplicable

calculationsinthisstatement.


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3 Application of te Codes

3.1 ThefollowingentitiesaremeasurableundertheCodes:

3.1.1 allpublicentitieslisted in schedule2 or schedule3 (Parts AandC)of the Public FinanceManagementAct;

3.1.2 anypublicentitylistedinschedule3(PartsBandD)whicharetradingentitieswhich

undertakeanybusinesswithanyorganofstate,publicentityoranyotherEnterprise;

and

3.1.3 anyenterprisethatundertakesanybusinesswithanyorganofstateorpublicentity;

3.1.4 anyotherenterprisethatundertakesanybusiness,whetherdirectorindirect,withany

entitythatissubjecttomeasurementunderparagraph3.1.1to3.1.3andwhichis

seekingtoestablishitsownB-BBEEcompliance.

3.2 The basis for measuring the B-BBEE compliance of an entit y in terms of

paragraph3.1is-

3.2.1 paragraph4,inthecaseofanExemptedMicro-Enterprise(EME);

3.2.2 theQSEstatementsinCode800,inthecaseofaQualifyingSmallEnterprise(QSE);

3.2.3 theGenericScorecard,inthecaseofotherenterprises.

3.3 Despite 3.2,a SectorCode published in terms of Statement 003may providethe

basisformeasuringenterpriseswithinthatsector.

4 Eligibility as an Exempted Micro-Enterprise

4.1 AnyenterprisewithanannualTotalRevenueofR 5million or less qualies as an

ExemptedMicro-Enterprises,.

4.2 Exempted Micro-Enterprises are deemed to have B-BBEE Status of Level Four

Contributor having a B-BBEE procurement recognition of 100% under

paragraph6.3.

4.3 Despiteparagraph4.2,anExemptedMicro-Enterprisequaliesforapromotiontoa

B-BBEEStatusofLevelThreeContributorhavingaB-BBEEprocurementrecognition

of110%underparagraph6.3ifitismorethan50%ownedbyblackpeopleorby

blackwomen.

4.4 Exempted Micro-Enterprises are allowed to be measured in terms of the QSE

scorecard should they wish to maximise their points and move to the next procurementrecognitionlevel.

4.5 SufcientevidenceofqualicationasanExemptedMicro-Enterpriseisanauditors

certicateorsimilarcerticateissuedbyanaccountingofcerorvericationagency.

5 Eligibility as a Qualifying Small Enterprise

5.1 AnyenterprisewithanannualTotalRevenueofbetweenR5millionandR35million

qualiesasaQualifyingSmallEnterprise.


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5.2 AQualifyingSmallEnterprisemustselectanyfourofthesevenElementsofB-BBEE

forthepurposes of measurementunderthe QualifyingSmall Enterprise Scorecard

containedinCode800.WhereaQualifyingSmallEnterprisedoesnotmakeaselection,

itsfourbestelementscoreswillbeusedforthepurposesofmeasurement.

6 Start-up enterprises

6.1 Start-upenterprisesmust be measuredas Exempted Micro-Enterprises under this

statementfortherstyearfollowingtheirformationorincorporation.Thisprovision

appliesregardlessoftheexpectedtotalrevenueofthestart-upenterprise.

6.2 Start-upEnterprisesaredeemedtohaveaB-BBEEStatusofLevelFourContributor

havingaB-BBEEprocurementrecognitionof100%underthisparagraph

6.3 InordertoqualifyasaStart-upEnterprise,theenterprisemustprovideanindependent

conrmationofitsstatus.

6.4 Despiteparagraph6.1and6.2,Start-upEnterprisesmustsubmitaQSEScorecard

whentenderingforanycontract,orseekinganyotherbusinesscoveredbysection10

oftheAct,withavaluehigherthanR5millionbutlessthanR35million.Forcontracts

aboveR35milliontheyshouldsubmitthegenericscorecard.Thepreparationofsuch

scorecardsmustuseannuali seddat a.

7 Te Elements of B-BBEE in terms of te Generic Scorecard

7.1 The Ownership Element, as set out in Code series 100, measures the effective

ownershipofenterprisesbyblackpeople.

7.2 The Management Control Element, as set out in Code series 200, measures the

effectivecontrolofenterprisesbyblackpeople.

7.3 TheEmploymentEquityElement,assetoutinCodeseries300,measuresinitiatives

intended to achieve equity in the workplace under the Act, and the Employment

EquityAct.

7.4 TheSkillsDevelopmentElement,assetoutinCodeseries400,measurestheextent

to whichemployers carry out initiativesdesignedto develop thecompetenciesof

blackemployees.

7.5 The Preferential Procurement Element, as set out in Code series 500, measures

theextenttowhichenterprisesbuygoodsandservicesfromsupplierswithstrongB-

BBEEprocurementrecognitionlevels.

7.6 The Enterprise Development Element, as set out in Code series 600, measures

theextenttowhichEnterprisescarryoutinitiativesintendedtoassistandaccelerate

thedevelopmentandsustainabilityofotherEnterprises.

7.7 TheSocio-EconomicDevelopmentandSectorSpecicContributionsElement,asset

outinCodeseries700,measurestheextenttowhichenterprisescarryoutinitiatives

that contribute towards Socio-Economic Developmentor Sector Specicinitiatives

thatpromoteaccesstotheeconomyforblackpeople.


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8 Te Generic Scorecard

8.1 ThefollowingtablerepresentstheGenericScorecardandcontainsthe:

8.1.1 elementsofthescorecard;

8.1.2 weightings,and

8.1.3 the Code series reference that specify the mechanisms for measurement and

calculationofeachoftheElementsofthescorecard(Codeseries100700).

Element Weighting Codeseriesreference

Ownership 20points 100

Managementcontrol 10points 200

Employmentequity 15points 300

Skillsdevelopment 15points 400

Preferentialprocurement 20points 500

EnterpriseDevelopment 15points 600

Socio-EconomicDevelopmentinitiatives 5points 700

8.2 BasedontheoverallperformanceofaMeasuredEntityusingtheGenericScorecard,

itreceivesoneofthefollowingB-BBEEStatus-:

B-BBEEStatus Qualication B-BBEErecognitionlevel

LevelOneContributor 100pointsontheGenericScorecard 135%

LevelTwoContributor 85but


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11 Transitional period

11.1 Fortherstyearafterthecommencementofthisstatement,ameasuredentitymay

electtouse

11.1.1 theGenericScorecard;or;

11.1.2 thetransitionalscorecard.

11.2 Thereafter, all B-BBEEcompliancemeasurement undertheCodesforMediumand

LargeenterprisesissubjecttotheuseoftheGenericScorecard.

11.3 The transitional scorecard assigns a BEE Status based on the Ownership and

ManagementControloftheentitycalculatedintermsoftheformulabelow:

A = B x 1.92

Where

AistheindicativeBEEStatusduringthetransitionalperiod

BisthetotalscoreachievedunderCodeseries100and200

10.4 Such Accreditation Standards govern the terms and conditions on which the

Accreditation Body may grant, refuse to grant, revoke or suspend an accreditation

of a Verication Agency.

10.5 Those verication agencies wishing to apply for accreditation will do so throughSANAS.

10.6 The dti encourages the establishment of an independent Industry Body that will

provide guidance to the verication industry through the development and

maintenance of high quality and reliable BEE verication services.

10.7 The dti together with the relevant Industry Body will from time to time develop

Verication Methodology and other relevant practices that will be used as standards

by all verication agencies.

10.8 The dti together with the Accreditation Body will implement such mechanisms as

may be necessary to ensure that Verication Certicates are accurate and

reliable.

10.9 The dti will establish a publicly accessible central database containing the

information underlying each verication Certicate

12 Adjustment Of Tresolds12.1 TheMinistermay,bynoticeintheGazette,adjustthethresholdsinparagraphs4to

6.Anysuchchangesapplytocompliancereportspreparedforenterprisesaftera12-

monthperiodfollowingthegazettingoftheadjustment.

13 Duration of te Codes

13.1 ACoderemainsineffectuntilamended,substitutedorrepealedundersection9of

theAct.

13.2 The Ministerwill review the Codesfollowing the end ofthetenth yearfollowing the

commencementdateofthisstatement,despitetheaforementioned,annualreviews

willtakeplacetomonitortheimplementationofB-BBEEthroughouttheeconomy.


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1 Objective of tis statement

Theobjectivesofthisstatementaretospecify:

1.1 themannerofgazettingTransformationChartersundersection12oftheAct;

1.2 theprocessfordevelopingandgazettingofSectorCodesundersection9oftheAct;

1.3 thestatusofTransformationChartersandSectorCodes;

1.4 thestatusofenterpriseB-BBEEplans;and

1.5 recommendanapproachfordrawingupTransformationCharters.

2 Procedure for developing and gazetting of Transformation Carters

2.1 TherepresentativebodyofasectorseekingtogazetteaTransformationCharterunder

section12must:

2.1.1 applyinwritingtotheMinister;and

2.1.2 provideevidenceofcompliancewithsection12oftheAct.

2.2 The Minister may refuse an application to gazette a Transformation Charter ifthe

applicanthasfailedtocomplywithsection12oftheAct.

2.3 IftheMinisterrefusestograntanapplicationunderparagraph2.2,

2.3.1 theMinistermustnotifytheapplicantofthatdecisionin writingwithintwomonths;

and

2.3.2 anapplicantmayreapplyforthegazettingofthatTransformationCharterbyrevising itssubmission.

2.4 TheMinister mustgazettethat TransformationCharter as soonas itisreasonably

possiblefollowingthegrantingofanapplicationunderparagraph2.1.

3 Procedure for developing and gazetting of Sector Codes

3.1 ThefollowingprinciplesapplytodevelopingSectorCodes:

3.1.1 there must be common commercial and other characteristics within the entities

operatinginthesectorwhichwouldmakeitfeasibletoformulatea transformation

chartersubjecttotheproposedSectorCode;

3.1.2 the proposed Sector Code must fully address all the Elements in the Generic

Scorecard;

3.1.3 theproposedSectorCodemustusethesamedenitionsinrespectofallbeneciaries

asthoseusedintheCodes;

3.1.4 theproposedSectorCodemustusethesamecalculationmethodologiestomeasure

complianceasthoseusedintheCodes;


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3.1.5 theproposedSectorCodemaydeviatefromTargetsandWeightingsusedintheCodes

only where those deviations are justiable based on sound economic principles,

sectoralcharacteristicsorempiricalresearch;

3.1.6 theproposedSectorCodemayintroduceanewadditionalElementformeasurement where such addition is justiable based on sound economic principles, sectoral

characteristicsorempiricalresearch;

3.1.7 theproposedSectorCodemustclearlydeneitsscopeofapplication;

3.2 TherepresentativebodyofasectorseekingtogazetteaSectorCodeundersection9

must:

3.2.1 applyinwritingtotheMinister;

3.2.2 indicatetheprocessbywhichtheCharterhasB-BBEEndeveloped;and

3.2.3 provideevidenceofcompliancewithsection12oftheAct.

3.3 The Minister must refuse an application under this paragraph 3 if the proposed

SectorCode:

3.3.1 inadequatelyaddressesanyoftheprinciplesofanyoftheElementsreferredtointhe

GenericScorecardasreferredtoinparagraph3.1.2;

3.3.2 contains deviationsfrom the calculation methodologies applicable inmeasuring B-

BBEEcomplianceasreferredtoinparagraph3.1.4;

3.3.3 contains deviations in the denitions of beneciaries of B-BBEE as referred to in

paragraph3.1.3;

3.3.4 containsinconsistenciesintheTargetsandWeightingsreferredtoinparagraph3.1.5

unlessfullyjustiedunderthatparagraph;or

3.3.5 containsinadequaciesorapotentialforambiguityindeningthescopeofthesector

asreferredtoinparagraph3.1.7.

3.4 Ifonreceivingthedocumentsreferredtoinparagraph3.2,theMinisterdecidesagainst

adoptingthatproposedSectorCode,theMinistermay:

3.4.1 refertheapplicationbacktotherepresentativebodyforthesector;

3.4.2 refer the document s to the Advisor y Council for fur ther consideration or

recommendations.

3.5 The Minister may issue a draft Sector Code for public comment, in terms of

section9(5)oftheAct.

3.6 Afterconsideringthepubliccomment,theMinistermaygazettetheTransformation

CharterasaSectorCodeundersection9oftheAct.

4 Status of Transformation Carters and Sector Codes

4.1 ThegazettingofaTransformationCharterundersection12oftheActisevidenceof

thecommitmenttopromoteB-BBEEintheapplicablesectorandisnotbindingon

organsofstateorpublicentities.


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5.2.2.6 Consultation with Stakeholders:the Steering Committee will communicate the key

elements of the rstdraft of the Transformation Charter, including a draft of its

scorecardtostakeholders.

5.3 RecommendedConsultingProcess,RepresentativesandStakeholderIdentication:

5.3.1 TheconsultationprocessfordevelopingaTransformationcantakeanyofthefollowing

forms:

5.3.1.1 amajorgatheringofthekeystakeholdersinthesector;

5.3.1.2 workshopsaddressingparticularis suesintheTransformationCharter;

5.3.1.3 sector-wideroadshows;or

5.3.1.4 other interactivemechanismsthat would ensure effective communication withand

participationbytherelevantstakeholders.

5.3.2 Therelevantstakeholdersmayinclude:

5.3.2.1 keyenterpriseswithinthesector;

5.3.2.2 industrybodiesforthesectorandtherelevantchamberofcommerce;

5.3.2.3 government,andinparticular,therelevantgovernmentdepartmentshavingjurisdiction

overtheparticularsector;

5.3.2.4 labourbodiesortherelevanttradeunions;

5.3.2.5 industryregulatorsandcivilsociet yorganisations;and

5.3.2.6 anyotherswitharelevantinterestinthesector.

5.3.3 Thesteeringcommitteeshouldhaveequitablerepresentationtoenableparticipation

byallthedifferentstakeholdersintheTransformationCharterformulation.

5.3.4 Implementationofinnovativemechanismsforensuringthatunderresourcedparties

contribute in the key strategic decisions is a keyconsideration, especially in the

followingstages:

5.3.4.1 settingupvariousworkinggroups

5.3.4.2 settingthemandatesoftherespectivechartercommittees;

5.3.4.3 activelytakingpartinthevariouschartercommittees;

5.3.4.4 outlining the key principles and qualitative undertakings of the Transformation

Charter;

5.3.4.5 settingtargets and weightings for the sectoras containedin the balancedB-BBEE

scorecard;

5.3.4.6 providingforimplementation,reportingandmonitoringmechanisms;

5.3.4.7 presentationoftheTransformationChartertotheAdvisoryCouncil,theministryinthe

government responsible for the relevant sector and to the Minister of Trade

andIndustry.


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5.3.4.8 settingthemandateandthepowersoftheCharterCouncil;

5.3.4.9 ensuringapplicationofgoodcorporategovernanceprinciplesintheSteeringCommittee

oranyexecutivebodyreportingtotheCharterCouncil.

5.4 TheRoleofCharterCouncils:

5.4.1 ThefollowingrepresentsarecommendedmodelforsettingupCharterCouncils:

5.4.1.1 equitablecompositionofstakeholdersinthemembersoftheCharterCouncil;

5.4.1.2 ensuringapplicationofgoodcorporategovernanceprinciplesintheCharterCouncil.

5.4.2 ThefunctionsoftheCharterCouncilmayinclude:

5.4.2.1 to provide guidance on sector-specic matters effecting B-BBEE in entities within

thesector;

5.4.2.2 tocompilereportsonthestatusofbroad-basedblackeconomicempowermentwithin

thesector,and

5.4.2.3 to share information with sector members, approved accreditation agencies or

theMinister.

5.4.3 TheCharter Councils should report to theMinister andto theAdvisoryCouncil on

progressmadebythesectorsubjecttotherelevantTransformationCharter. Such

reports should typically contain qualitative and quantitative information about

sectoralperformance,includingdetailsaboutalltheelementsofthesectorsB-BBEE

balancedscorecard.

6 Variation of Indicators in Codes 200 and 300

6.1 ASectorCodemayallowthe useof indicators that differ from thosecontained in

Codes200and300asameansofxingtherelevantMeasurementCategories.

6.2 Sectorsadoptingthisapproachmust:

6.2.1 consider using indicators that are consistent with the principles contained in the

EERegulations;

6.2.2 consider all relevant factors such as seniority, expertise, scarcity of skill-set,

organisationalroleandresponsibilityandgeographiclocation;

6.2.3 basethedenitionofoccupationallevelsonsoundandempiricalresearchundertaken

inthesectorbyareputableinstitution;and

6.2.4 iftheindicatorsincludesalaryscales,considerprovidingfor adefaultcost ofliving

orinationadjustmentinthesalaryscales,evenifthesectorintendstoamendthose

salaryscalesannually.

6.3 ThegazettingofaSectorCodedoesnotaffectanyemployersobligationstocomply

withtheEEActandit sregulations .


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CODE SERIES 000: FRAMEWORK FOR MEASURING


STATEMENT 004: Scorecards for SPECIALISED Enterprises



Para Subject Page

1 Objectiveofthisstatement 2

2 Generalprinciples 2

3 TheAdjustedGenericScorecard 3

4 TheAdjustedQualifyingSmallEnterprisesScorecard 3

5 ImportantClarication 3


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1 Objective of tis statement


1.1 provideguidanceaboutthetreatmentofOwnershipforSpecialisedEnterprises,for B-BBEEpurposes,of:

1.1.1 companieslimitedbyguarantee;

1.1.2 HigherEducationInstitutions;

1.1.3 Non-protOrganisations;

1.1.4 publicentitiesandotherEnterpriseswhollyownedbyorgansofstate;

1.1.5 PublicBenetSchemes;and

1.1.6 section21companies;and

1.2 specifyscorecardsapplicabletoMeasuredEntitiessubjecttothisstatement.

2 General principles

2.1 PublicentitiesandotherEnterpriseswhollyownedbyorgansofstateareincapable

ofevaluationofblackownershipunderCodeseries100.

2.2 Higher Education Institutions are not public entities under the Public Finance

ManagementActof1999.Theyareincapableofevaluationofblackownershipunder

Codeseries100.

2.3 Companieslimitedby guarantee andsection 21companies have no shareholding.

Theyare incapableofevaluationofblackownershipunderCodeseries100.This does not imply that companies limited by guarantee and section 21 companies

sharing in the ownership of other Enterprises cannot contribute towards black

ownershiptosuchEnterprisesasprovidedforinStatement100.

2.4 Non-protOrganisationsandPublicBenetOrganisationsgenerallydonothaveany

benecialownershipandareincapableofevaluationofblackownershipunderCode

series 100. This does not imply that Non-prot Organisations and Public Benet

OrganisationssharingintheownershipofotherEnterprisesasbroad-basedownership

schemescannotcontributetowardsblackownershiptosuchEnterprisesasprovided

forinStatement100.

2.5 Whereveranyoftheentitieslistedinparagraphs1and2requireevidenceoftheir

ownB-BBEEcompliance,theywillusetheAdjustedGenericScorecard.Ifthoseentities are also Qualifying Small Enterprises, they will use the Adjusted Qualifying Small

EnterprisesScorecard.


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3 Te ADJUSTED Generic Scorecard

3.1 ThefollowingtablerepresentstheAdjustedGenericScorecardandcontainsthe:

3.1.1 Elementsofthescorecard;


3.1.3 the Code series reference that specify the mechanisms for measurement and

calculationofeachoftheElementsofthescorecard(Codeseries100700).







Socio-EconomicDevelopment 15points 700

3.2 Allothertermsofstatement000applytoMeasuredEntitiessubjecttothisstatement,

mutatismutandis.

4 Te ADJUSTED Qualifying Small Enterprises Scorecard

4.1 ThefollowingtablerepresentstheAdjustedGenericScorecardandcontainsthe:

4.1.1 Elementsofthescorecard;


4.1.3 the Code series reference that specify the mechanisms for measurement and calculationofeachoftheElementsofthescorecard(Codeseries100700).







Socio-EconomicDevelopment 25points 700

4.2 AMeasuredEntity,subjecttothisstatement,thatisaQualifyingSmallEnterprisemust

chooseanyfourofthesixElementsofB-BBEEagainstwhichtheirB-BBEEcompliance

willbemeasuredundertheAdjustedQualifyingSmallEnterpriseScorecard.

5 ImportantClarication

ThestatusofSocio-EconomicDevelopmentContributionsmadetoanyofthetypesofentities

inparagraphs1and2underCodeseries700isnotdependentonsuchentitysscorecard

result,butratherthenatureofthecontributionitselfandtheidentityofthatcontributions

beneciaries.


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CODE SERIES 100: MEASUREMENT OF ThE

OWNERShIP ELEMENT OF BROAD-BASED BLACK

ECONOMIC EMPOWERMENT

STATEMENT 100: ThE GENERAL PRINCIPLES FOR MEASURING OWNERShIP



Para Subject Page


2 Theownershipscorecard 2

3 Keymeasurementprinciples 3

4 Broad-BasedOwnershipScheme 5

5 PrivateEquityFunds 5

6 Section21companiesandcompanieslimitedbyguarantee 5

7 Trusts 6

8 OptionsandShareWarrants 6

9 EquityInstrumentscarryingpreferentrights 7

10 Realisationpoints 7

11 Thebonuspoints 7

12 Annexe100(A) 8

13 Annexe100(B) 9

14 Annexe100(C) 11


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1 Objectives of tis Statement


1.1 specifythescorecard for measuring the ownership Element of Broad-BasedBlack EconomicEmpowerment(B-BBEE);

1.2 dene the key measurement principles associated with the ownership Element

ofB-BBEE;

1.3 specify the specic measurement principles applicable to various t ypes

ofEnterprises;

1.4 specif y the specic measurement principles applicable to various t ypes of

EquityInstruments;

1.5 specifytheformulaformeasuringVotingRights,EconomicInterest,RealisationPoints

andbonuspoints.

2 Te Ownersip Scorecard

Thefollowingtablerepresentstheindicatorsandmethodforcalculatingascoreforownership

underthisstatement:

Category Ownershipindicator Weightingpoints ComplianceTarget

2.1 Votingrights:

2.1.1 ExercisableVotingRightsintheEnterpriseinthehandsofblackpeople

3 25%+1vote

2.1.2 ExercisableVotingRightsintheEnterpriseinthehandsofblackwomen 2 10%

2.2 EconomicInterest:

2.2.1 EconomicInterestofblackpeopleintheEnterprise

4 25%

2.2.2 EconomicInterestofblackwomenintheEnterprise

2 10%

2.2.3 EconomicInterestofthefollowingblacknaturalpeopleintheEnterprise:

1 2.5%

2.2.3.1 blackdesignatedgroups;2.2.3.2 blackParticipantsinEmployeeOwnershipSchemes;2.2.3.3 blackbeneciariesofBroadbasedOwnershipSchemes;or2.2.3.4 blackParticipantsinCo-operatives

2.3 Realisationpoints:

2.3.1 O wnershipfullment 1 Refer to paragraph10.1

2.3.2 NetValue 7 Refer to Annexe Cparagraph4

2.4 Bonuspoints:

2.4.1 InvolvementintheownershipoftheEnterpriseofblacknewentrants;

2 10%

2.4.2 InvolvementintheownershipoftheEnterpriseofblackParticipants:

1 10%

2.4.2.1 inEmployeeOwnershipSchemes;2.4.2.2 ofBroad-BasedOwnershipSchemes;or2.4.2.3 Co-operatives.


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3 Key Measurement Principles

3.1 Generalprinciples:

3.1.1 AnEnterprisereceivespointsforparticipationbyblackpeopleinitsrightsofownership, usingtheownershipscorecardinparagraph2.Blackpeoplemayholdtheirrightsof

ownershipinaMeasuredEntityasdirectParticipantsorasParticipantsthroughsome

formofbusinesssuchas:

3.1.1.1 acompanywithshares;

3.1.1.2 aclosecorporation;

3.1.1.3 aco-operative;

3.1.1.4 anyformofjuristicpersonrecognisedunderSouthAfricanlaw;

3.1.1.5 apartnershiporotherassociationofnaturalpersons;

3.1.1.6 aBroad-BasedOwnershipScheme;

3.1.1.7 anEmployeeOwnershipScheme;and

3.1.1.8 aTrust.

3.2 TheFlow-ThroughPrinciple:

3.2.1 Asageneralprinciple,whenmeasuringtherightsofownershipofanycategoryofblack

people in aMeasuredEnterprise,only rights heldby natural persons are relevant.

Iftherightsofownershipofblackpeoplepassthroughajuristicperson,thentherights

ofownershipofblackpeopleinthatjuristicpersonaremeasurable. Thisprinciple

appliesacrosseverytierofownershipinamulti-tieredchainofownershipuntilthat

chainendswithablackpersonholdingrightsofownership.

3.2.2 The methodof applyingthe Flow-Through Principle acrossone ormore intervening

juristicpersonsisasfollows:

3.2.2.1 MultiplythepercentageoftheParticipantsrightsofownershipinthejuristicpersons

throughwhichthoserightspassbythepercentagerightsofownershipofeachofthose

juristicpersonssuccessivelytotheMeasuredEnterprise;and

3.2.2.2 theresultofthiscalculationrepresentsthepercentageofrightsofownershipheldby

theParticipant.

3.3 TheModiedFlow-ThroughPrinciple:

3.3.1 TheModiedFlow-ThroughPrincipleappliestoanyBEEownedorcontrolledcompany

intheownershipoftheMeasuredEnterprise.

3.3.2 IncalculatingExercisableVotingRightsunderparagraph2.1.1,andEconomicInterest

underparagraph2.2.1thefollowingapplies:Whereinthechainofownership,black

peoplehaveaow-throughlevelofparticipationinexcessof50%,thenonlyoncein

thatchainmaysuchblackparticipationbetreatedasifitwere100%black.

3.3.3 The Modied Flow-ThroughPrinciple may only be applied in the calculation of the

indicators in paragraphs 2.1.1and2.2.1. In allotherinstances,the Flow-Through

Principleapplies.


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3.4 TheExclusionofspeciedentitieswhendeterminingownership:

3.4.1 Whendeterminingownershipinameasuredentity,ownershiphelddirectlybyorgans

ofstateorpublicentitiesmustbeexcluded.

3.4.2 IncalculatingtheirOwnershipscore,MeasuredEnterprisesmustapplytheExclusion

PrincipletoanyportionoftheirOwnershipheldbyOrgansofStateorPublicEntities.

3.4.3 Despiteparagraph3.4.1and3.4.2,theMinistermaybynoticeinthegazette,designate

certainPublicEntitiesasBEEFacilitators.IncalculatingtheirOwnershipscore,Measured

EnterprisesmusttreatBEEFacilitatorsashavingrightsofOwnershipheld:

3.4.3.1 100%byBlackPeople;

3.4.3.2 40%byBlackWomen;

3.4.3.3 10%byblackdesignatedgroups;

3.4.3.4 withoutanyacquisitiondebts;and

3.4.3.5 withoutanythird-partyrights.

3.4.4 Whendeterminingownershipina measuredentity,rightsof ownershipofMandated

Investmentsmay beexcluded. Themaximum percentageofthe ownership ofany

measuredentitythatmaybesoexcludedis40%.

3.4.5 AMeasuredEntityelectingnottoexcludeMandatedInvestmentswhenitisentitled

todoso,mayeithertreatallofthatownershipasnon-blackorobtainacompetent

personsreportestimatingtheextentofblackrightsofownershipmeasurableinthe

MeasuredEntityandoriginatingfromthatMandatedInvestment.

3.4.6 A Measured Entity cannot selectively include or exclude Mandated Investments

and anelectionto exclude onemandated investmentis an election to excludeall

MandatedInvestment sandvisavers a.

3.5 Therecognitionofownershipafterthesaleorlossofsharesbyblackparticipants:

3.5.1 AMeasuredEntityisallowedtorecogniseaportionofblackownershipafterablack

participant has exited through the sale or loss of shares subject to the

followingcriteria:

3.5.1.1 theblackparticipanthasheldsharesforaperiodof3years;

3.5.1.2 valuemusthavebeencreatedinthehandsofblackpeople;

3.5.1.3 transformationhastakenplacewithinthemeasuredenterprise.

3.5.2 black participation arising from continued recognition of black ownership cannot

contributemorethan40%ofthescoreontheownershipscorecard.

3.5.3 In the case of a loss of shares by the black investor, the following additional

rulesapply:

3.5.3.1 awrittentripartiteagreementbetweentheMeasuredEnterprise,theblackParticipant

andalendermustrecordtheloanorsecurityarrangement,unlesstheMeasuredEntity

isthelender;and

3.5.3.2 The period overwhich thepoints wereallocated orrecognised will not exceed the

periodoverwhichtheshareswereheld.


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3.5.4 TheownershippointsunderthisparagraphthatareattributabletotheMeasuredEntity

willbecalculatedbymultiplyingthefollowingelements;

3.5.4.1 ThevaluecreatedinblackhandsasapercentageofthevalueoftheMeasuredEntity

atthedateofthelossofsharesasapercentageofMeasuredEntitysvalue;

3.5.4.2 TheB-BBEE statusof theMeasured Entitybasedon thebalancedscorecard atthe

dateofmeasurement;and

3.5.4.3 TheownershippointsthatwereattributabletotheMeasuredEnterpriseonthedateof

saleorloss.

4 Broad-based Ownersip and Employee Ownersip Scemes

4.1 Black Participants in Broad-Based Ownership Schemes and Employee Share

Ownerships Schemes holding rights of ownership in a Measured Entity

maycontribute:

4.1.1 amaximumof40%ofthetotalpointsontheownershipscorecardoftheMeasured

EntityiftheymeetthequalicationcriteriasetoutinAnnexe100(B).

4.1.2 100%ofthetotalpointsontheownershipscorecardoftheMeasuredEntityifthey

meettheadditionalqualicationcriteriasetoutinAnnex100(B).

5 Private Equity Funds

5.1 AMeasuredEntitymaytreatanyofitsownershiparisingfromaPrivateEquityFundas

ifthatownershipwereheldbyblackpeople,wherethePrivateEquityFundmeetsthe

followingcriteria:

5.1.1 morethan50%ofanyExercisableVotingRightsassociatedwiththeEquityInstruments

through which the Private Equit y Fund holds right s of owner ship, be held by

blackpeople;

5.1.2 morethan50%ofprotsmadebythePrivateEquityFundafterrealisinganyinvestment

madebyit,mustbywrittenagreement,accruetoblackpeople;

5.1.3 thePrivateEquityFundmanagermustbeaBEEOwnedCompanyasdened;and

5.1.4 morethan50%ofthevalueoffundsinvestedbyanyPrivateEquityFundmustatall

timesbeinvestedinblackownedenterprisesthatwereatleast25%blackowned

beforetheinvestmentofthePrivateEquityFund.

6 Section 21 Companies and Companies Limited by Guarantee

AMeasuredEntitymayelecttoincludeorexcludeSection21companiesorcompanieslimited

byguaranteeforthepurposesofmeasuringownershipintermsofthisstatement

6.1 ASection21companyorcompanylimitedbyguaranteethathousesaBroad-Based

OwnershipSchemeoranEmployeeOwnershipSchemeissubjecttotheprovisions

governingthosetypesofschemesandnottothisparagraph.

6.2 WhenaMeasuredEntityelectstoexcludesuchcompanies,itcandosobyexcluding

upto40%oftheleveloftheirownershipcompletelyfromthedeterminationofits

compliancewiththeowner shiptarget.


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6.3 AMeasuredEntityelectingnottoexcludesection21companiesorcompanieslimited

byguaranteewhenitisentitledtodoso,mayeithertreatallofthatownershipasnon-

blackorobtainacompetentpersonsreportestimatingtheextentofblackrightsof

ownershipmeasurableintheMeasuredEntityandoriginatingfromthosesection21

companiesorcompanieslimitedbyguarantee.

6.4 BlackParticipantsinaSection21CompanyholdingrightsofownershipinaMeasured

Entitymaycontribute:


EntityiftheymeetthequalicationcriteriaforBroad-BasedOwnershipSchemesset

outinAnnexe100(B).


meettheadditionalqualicationcriteriasetoutforBroad-BasedOwnershipSchemes

inAnnex100(B).

7 Trusts

7.1 Black Participants in a Trust holding rights of ownership in a Measured Entity

maycontribute:


EntityifthetrustmeetsthequalicationcriteriaforTrustssetoutinAnnexe100(B).


meettheadditionalqualicationcriteriasetoutforTrustsinAnnex100(B).

8 Options and sare warrants:

8.1 ExercisablevotingrightsandEconomicinterestwillberecognisedwhereaParticipant

holdsaninstrumentgrantingtheholdertherighttoacquireanEquityInstrumentor

partthereofatafuturedate,ifthefollowingrequirementsaremet:

8.1.1 TheExercisableVotingRightsattachedtothatinstrumentareirrevocablytransferred

totheholderfortheoptionperiodandareexercisablebytheholderbeforeacquiring

theEquityInstrument;

8.1.2 thevalueofanyEconomicInterestisirrevocablytransferredfortheoptionperiodand

paidtotheholderofthatinstrumentbeforetheexerciseofthatright.

8.1.3 ThevalueofaninstrumentmustbedeterminedbyusingaStandardvaluationmethod

forcalculatingtheNetvalue.


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9 Equity Instruments Carrying Preferent Rigts

9.1 AnEquityInstrumentcarryingpreferentrightsismeasurableinthesamemanneras

anordinaryEquityInstrument.

9.2 AnEquityInstrumentcarryingpreferentrightsthathasthecharacteristicsofadebt,

regardlessofwhetherthedebtisthatofanEnterpriseorofaParticipant,isanordinary

loan.IfthedebtisthatofablackParticipant,itmaybesubjecttomeasurementunder

CurrentEquityInterest.

9.3 Inevaluatinganinstrumentthathasahybridnatureincludingthecharacteristicsofa

debt,onlythatportionthatrepresentsadebt,willbemeasuredundercurrentequity

interest.Theremainderismeasurableasanordinaryequityinstrument.

10 Net Value

10.1 OwnershipFullmentoccurs:

10.1.1 onthereleaseofallblackParticipantsinaMeasuredEntityfromallthird-partyrights

arisingfromthenancingtheirtransactionwiththeMeasuredEntity;or

10.1.2 ifallblackParticipantsin theEnterprisehaveneverbeensubjecttoanysuchthird-

partyrights.

10.1.3 A score of 7 points for Net Value is a requirement for awarding the Ownership

Fullmentpoint.

11 Te Bonus Points

11.1 AMeasured Entitywith25%blackEconomicInterest,canreceivea maximum of2 bonuspointsfora10%holdingofEconomicInterestbyblacknewentrants.

11.2 AMeasured Entitywith25%blackEconomicInterest,canreceivea maximum of1

bonuspointfora10%holdingofEconomicInterestbyblackParticipantsin:

11.2.1 EmployeeOwnershipSchemes;

11.2.2 Broad-BasedOwnershipSchemes;and

11.2.3 Co-Operatives.


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Description of Investment

Investmentsmade byor fora collective investmentscheme as dened in the Collective InvestmentsSchemeControlActof2002

InvestmentsmadebyorforapensionfundasdenedinthePensionFundActof1956

Investments made by or for a medical scheme asdenedin the Medical SchemesActof 1998out ofmembersfunds

Investments made by or for long-term insurers asdenedintheLong-TermInsuranceActof1998outofpolicyholderfunds

Investments made by or for a friendly society asdenedintheFriendlySocietiesActof1956

InvestmentsmadebyorforabankasdenedintheBanksActof1990outofdepositorfundsasopposed

toownreserves

InvestmentsmadebyorforamutualbankasdenedintheMutualBanksActof1993outofdepositorfundsasopposedtoownreserves

Portion Subject to Exclusion Principle

fullvalue

fullvalue

portionrecordedasmadeoutofmembersfunds

portionrecordedasmadeoutofpolicyholderfunds

fullvalue

dep ositor p ortion determined by app ortioninginvestmentin the ratio that depositor funds toownreserves;

dep ositor p ortion determined by app ortioninginvestmentin the ratio that depositor funds toownreserves;

Annexe100AExamplesofMandatedInvestments


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Annexe100(B)

RULES ON CERTAIN TYPES OF ENTERPRISES

1 Rules for Broad-Based Ownersip Scemes:

1.1 ThefollowingrulesapplytoBroad-BasedOwnershipSchemes:

1.1.1 theManagementFeesoftheschememustnotexceed15%;

1.1.2 theconstitutionoftheschememustrecordtherulesgoverninganyportionofEconomic

Interestreceivedandreservedforfuturedistributionorapplication;

1.1.3 at least 85% of the value of benets allocated by the scheme must accrue to

blackpeople;

1.1.4 atleast50%oftheduciariesoftheschememustbeindependentpersonshavingno employmentwithordirectorindirectbenecialinterestinthescheme;

1.1.5 atleast50%oftheduciariesoftheschememustbeblackpeopleandatleast25%

mustbeblackwomen;

1.1.6 thechairpersonoftheschememustbeindependent;and

1.1.7 onthewinding-uporterminationofthescheme,allaccumulatedEconomicInterest

mustbetransferredtobeneciariesoranentitywithsimilarobjectives.

2 Rules for Employee Sare Ownersip Scemes:

2.1 ThefollowingrulesapplytoEmployeeShareOwnershipSchemes(ESOP);

2.1.1 theschemeconstitutionmustdenetheParticipantsandtheproportionoftheirclaim

toreceivedistributions;

2.1.2 awrittenrecordofthenameoftheParticipantsortheuseofadenedclassofnatural

personsatisestherequirementforidentication;

2.1.3 awrittenrecordofxedpercentagesofclaimortheuseofaformulaforcalculating

claimssatisestheneedfordeningproportionofbenet;and

2.1.4 theduciariesoftheschememusthavenodiscretionontheabovementionedterms;

and

2.2 TheParticipantsmusttakepartin:

2.2.1 appointingatleast50%oftheduciariesofthescheme;

2.2.2 managingtheschemeatalevelsimilartothemanagementroleofshareholdersina

companyhavingshareholding;

2.2.3 the constitution, or other relevant statutory documents, of the scheme must be

available,onrequest,toanyParticipantinanofciallanguageinwhichthatpersonis

familiar;and


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0


2.2.4 AllaccumulatedEconomicInterestoftheschemeispayabletotheParticipantsatthe

earlierofadateoreventspeciedintheschemeconstitutionorontheterminationor

winding-upofthescheme;and

2.2.5 theschemeduciariesmustpresentthenancialreportsoftheschemetoParticipants yearlyatanannualgeneralmeetingofthescheme.

3 Rules for Trusts

3.1 ThequalicationcriteriafortherecognitionofTrustsisasfollows:

3.1.1 Thetrustdeedmustdenethebeneciariesandtheproportionoftheirentitlementto

receivedistributions;

3.1.2 Awrittenrecord of thenamesof the beneciaries or the use of adenedclassof

naturalpersonsatisestherequirementforidentication;

3.1.3 A written record of xed percentages of entitlement or the use of a formula for calculatingentitlementsatisestheneedfordeningproportionofbenet;and

3.1.4 The trustees must have no discretion on the above mentioned terms; and . On

winding-upor terminationof thetrust, all accumulated Economic Interest mustbe

transferred to the beneciaries or to an entity representing the interest of the

par ticipant sorclas sofbeneciaries.

4 Additional Criteria Applicable to Trusts:

4.1 ForaMeasuredEntitytoobtainthemaximumpointsonitsOwnershipscorecardfrom

shareholdingbyaTrust,theMeasuredEntitymustbeinpossessionofacerticate

issuedbyacompetentpersontotheeffect:

4.1.1 Thatthe Trust was createdfora legitimate commercialreason whichmustbe fully

disclosed;and;

4.1.2 ThatthetermsofTrustdonotdirectlyorindirectlyseektocircumventtheprovisionsof

theCodesandtheAct.

5 Additional Criteria Applicable to Broad Based Ownersip Scemes

and Employee Ownersip Scemes:

5.1. ForaMeasuredEntitytoobtainthemaximumpointsonitsownershipscorecard,the

followingadditionalrequirementsmustbemetbyaBroad-BasedSchemeorEmployee ShareOwnershipScheme:

5.1.1 atrack-recordofoperatingasaBroad-BasedOwnershipSchemeorEmployeeShare

OwnershipScheme,orintheabsenceofsuchatrack-recorddemonstrableevidence

of full operational capacity to operate as a Broad-Based Ownership Scheme or

EmployeeShareOwnershipScheme;

5.1.2 Operationalcapacitymustbeevidencedbysuitablyqualiedandexperiencedstaff

insufcientnumber,experiencedprofessionaladvisors,operatingpremisesandall

othernecessaryrequirementsforoperatingabusiness.


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A =B C

D

3 Calculation of Deemed Net Value

IncalculatingtheDeemedNetValuereferredtoinparagraph4below,thefollowingformula

applies:

Where

AistheDeemedNetValue

Bforthepurposesofparagraph4belowisthevalueoftheEquityInstrumentsrelevantto

thecalculation,determinedonthedateofmeasurement

Bforthepurposesofparagraph5belowisthevalueoftheEquityInstrumentsrelevantto

thecalculation,determinedonthedateofsaleorloss

Cforthepurposesofparagraph4belowisthecarryingvalueofanyacquisitiondebtsoftherelevantblackParticipantsonthedateofmeasurement

Cforthepurposesofparagraph5belowisthecarryingvalueofanyacquisitiondebtsof

therelevantblackParticipantsonthedateofsaleorloss

Dforthepurposesofparagraph4and5belowisthevalueoftheMeasuredEntityonthe

dateofmeasurement

Dforthepurposesoftheexclusionprincipleisthevalueofthemeasurableportionofthe

MeasuredEntityonthedateofmeasurement

4 Net Value

4.1 TheNetValuepointsinparagraph2.3.2isthelowerresultofFormulaAandFormula Bbelow:

FormulaA

A =1

25% x CB x x 7

Where

Aisthescoreunderparagraph2.3.2

BistheDeemedNetValueforallblackParticipantsintheMeasuredEntitydetermined

usingFormula3

Cisthetime-basedgraduationfactoroftheEconomicInterestcompliancetargetoutlinedbelow:

10%fortherstyearafterthecurrentequityinterestdate.

20%forthesecondyearafterthecurrentequityinterestdate.

40%fromtherstdayofthethirdyearafterthecurrentequityinterestdatetothelast

dayofthefourthyearafterthecurrentequityinterestdate.

60%fromtherstdayofthefthyearafterthecurrentequityinterestdatetothelast

dayofthesixthyearafterthecurrentequityinterestdate.

80%fromtherstdayoftheseventhyearafterthecurrentequityinterestdatetothe

lastdayoftheeighthyearafterthecurrentequityinterestdate.

100%fromtherstdayoftheninthyearafterthecurrentequityinterestdatetothelast

dayofthetenthyearafterthecurrentequityinterestdate.


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FormulaB

Where

Aisthescoreunderparagraph2.3.2

BisthepercentageEconomicInterestintheMeasuredEntityofblackParticipants

Cisthetargetfortheownershipindicatorinparagraph2.2.1

A =B

Cx 7

4.2 IfanEnterprisegainsascoreinparagraph4.1thatismorethantheWeightingpoints

inparagraph2.3.2,thatEnterprisewillonlyreceivetheWeightingpoints.

4.3 OwnershipFullmentoccurs:

4.3.1 onthereleaseofallblackParticipantsinaMeasuredEntityfromallthird-partyrights;

or

4.3.2 whenblackParticipantshaveneverbeensubjecttoanythird-party.

4.4 Aminimumscoreof7pointsforCurrentEquityInterestisarequirementfortheaward

oftheOwnershipFullmentpoint.

5 Calculation of te Recognition of Ownersip after te Sale or Loss

of Sares by Black Participants:

Thecalculationsinparagraphs3.5.1and3.5.3usethefollowingformula:

Where

AisthepercentageofrightsofownershipthatsurvivethesaleofanEquityInstrumentby

ablackParticipantinparagraph3.5

Bisthepercentageofrightsofownershipforeachofindicatorsintheownershipscorecard

thatwereattributabletotheblackParticipantimmediatelybeforehisorhersaleorloss

CistheNetValuepercentageprovidedforinparagraph3aboveundertakenfortheEquity

InstrumentssoldorlostbytheblackParticipantonthedateofthesaleorloss.Thevalue

oftheEnterprisesismeasurableasatthedateofmeasurement

DisthemostrecentlydeterminedBEERecognitionLeveloftheMeasuredEntity(which

mustbelessthan1-yearold)basedonitsGenericScorecardresultforallElementsother

thanownershipdeterminedusingstatement000

A = B x C x D


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6 Te Bonus Points

6.1 Thecalculationofthebonuspointsusesthefollowingformula:

Where

Aisthebonuspointsawardedinparagraphs2.4.1and2.4.2

B is the percentage that Economic Interest to which Participants who fall within that

categoryofblackpeopleinthatEnterpriseholdstothetotalofallEconomicInterestofthat

Enterprise

CisthepercentagecomplianceTargetforEconomicInterestforthemeasuredownership

indicatorinparagraph2.4

DispercentageoftheEconomicInterestintheMeasuredEntityofblackpeopleuptoa

maximumof25%

E is the Weighting points allocated to the applicable measured ownership indicator in

paragraph2.4

A =B

Cx E

D

25x


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CODE SERIES 100: ThE MEASUREMENT OF ThE

OWNERShIP ELEMENT OF BROAD-BASED


STATEMENT 102: RECOGNITION IN ThE SALE OF ASSETS



Para Subject Page


2 Application 2

3 KeyMeasurementPrinciples 2

4 MeasurementPrinciples 3

5. RecognitionofSaleofAssets,EquityInstrumentsandBusiness 3

5. Annexe102(A) 4


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1.1 Set out the conditions where the Sale of Assets, Equity Instruments and other Businesseswillberecognised.

1.2 SetouthowtheOwnershippointswillbedetermined.

2 Application

2.1 Atransactionintermsofthisstatementmayinvolvethesaleof:

2.1.1.1 anasset;

2.1.1.2 abusiness;or

2.1.1.3 EquityInstrumentsinanEnterprise.


3.1 Generalprinciples:

3.1.1 ASellerthathasconcludedatransactioninvolvingasaleofasset,EquityInstrument

orbusinesswithanAssociatedEnterprisemayclaimthebenetsprovidedforinthis

statementinitsownOwnershipScorecard.

3.1.2 Where a Seller has claimed benet in terms of the Ownership scorecard for the

Sale of Asset, Equity Instrument or Business it may notclaim benets under the

EnterpriseDevelopmentElement.

3.2 QualicationCriteria:

3.2.1 ForOwnershippointstoberecognisedthetransaction:

3.2.1.1 Mustresultinthecreationofsustainablebusinessesorbusines sopportunitiesinthe

handsofblackpeople;and

3.2.1.2 Resultinthetransferofspecialisedskillsorproductivecapacitytoblackpeople.

3.2.2 ASaleofAsset,EquityInstrumentandBusinessmustinvolveaseparateAssociated

Enterprisewhichhas:

3.2.2.1 nounreasonablelimitationsastoitsclientsorcustomers;and

3.2.2.2 clients,customersorsuppliersotherthantheSeller.

3.2.3 Any operational outsourcing arrangements between the Seller and the Associated

Enterprisemustbenegotiatedatarms-lengthonafairandreasonablebasis.

3.2.4 ThefollowingtransactionsdonotconstituteQualifyingTransactions:

3.2.4.1 transfersofbusinessrightsbywayoflicense,leaseorothersimilarlegalarrangements

notconferringunrestrictedownership;and

3.2.4.2 salesoffranchisesbyfranchisorstofranchisees,butincludessalesoffranchisesfrom

franchiseestootherfranchiseesortonewfranchisees.


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4 Measurement Principles

4.1 Thecalculationoftheownershippointsintermsofparagraph2.3.2.oftheOwnership

scorecardmustbebasedon:

4.1.1 thevalueofthetransaction.

4.1.2 the value of Equity Instruments held by black Participants in the Associated

Enterprise;

4.1.3 the carrying value of the Acquisition Debt of black Participants in the Associated

Enterprise;and

4.2 Allcalculationsintermsofparagraph4.1.1to4.1.3mustuseaStandardvaluation

method.

4.3 TheSellermayclaimthepointforOwnershipFullmentonlyifboththeSellerandthe

AssociatedEnterprisecomplywiththerequirementsfortheawardofthatpoint.

4.4 EquivalencyPercentagesunderthisstatement:

4.4.1 applyonlyto the ownership indicatorsinparagraphs2.1and2.2oftheOwnership

Scorecard;

4.4.2 donotapplytotheownershipindicatorsinparagraphs2.3and2.4oftheOwnership

Scorecard.

4.5 TheSellermustincludetheEquivalencyPercentagesinitsownOwnershipScorecard

asifthosepercentagesarosefromblackownershipofEquityInstrumentsintheSeller.

The EquivalencyPercentagesforthe indicatorsinparagraphs 2.1 and 2.2 ofthe

OwnershipScorecardcanbecalculatedintermsofAnnexe102(A).

5 Recognition Of Sale Of Asset, Equity Instruments And Businesses

5.1 ASellerseekingrecognitionofaTransactioninitsOwnershipScorecardmustdetermine

that recognition under paragraph 4 in compliance with paragraph 2.3 of

statement000:

5.1.1 for the rst three years after the transaction, based on data current on date of

measurement;

5.1.2 foreachyearthereafter,basedon:

5.1.2.1 theIndicatorPercentagesatthedateofmeasurement;and

5.1.2.2 the values of the Qualifying Transaction and benet to the Seller at the date of

measurementinthethirdyearafterthetransaction.


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ANNEXE102(A)

Thisformuladeterminestheequivalencypercentagesfortheindicatorsinparagraph2.1and

2.2oftheOwnershipScorecard.

A =B

Cx D

Where

AistheEquivalencyPercentageforeachoftheindicatorsinparagraphs2.1and2.2oftheOwnershipScorecard

BisthevalueoftheQualifyingTransactiontotheAssociatedEnterprisedeterminedusingaStandardvaluationmethod

CisthevalueoftheSellerdeterminedusingaStandardvaluationmethod

DistheIndicatorPercentagesoftheAssociatedEnterprise


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CODE SERIES 100: ThE MEASUREMENT OF ThE

OWNERShIP ELEMENT OF BROAD-BASED BLACK


STATEMENT 103: ThE RECOGNITION OF EQUITY EQUIVALENTS FOR

MULTINATIONALS



Para Subject Page



3 RecognitionofEquityEquivalentProgrammes 2

4 MeasurementofEquityEquivalentContributionsontheOwnershipScorecard 3

5 TwoSpecicExamplesofEquityEquivalentProgrammes 3

6 SpecicrulesonMultinationals 4

7 Annexe103 5


38/92




1.1 denethemeansbywhichMultinationalsmayapplyforrecognitionofEquityEquivalent Programmes;

1.2 specifyhowcontributingtowardstheOwnershipElementofB-BBEEbyMultinationals

ismeasurable;


Any Equity Equivalent Contributions towards the Ownership Element of B-BBEE made by

MultinationalsaremeasurableagainstthevalueoftheiroperationsintheRepublicofSouth

Africa.

3 Recognition of Equity Equivalent Programmes

3.1 TheMinistermay,approvecertainEquityEquivalentProgrammesaftertheMultinational

hasconsultedwiththesectorallineministry,Premiersorotherstakeholdersinany

governmentdepartment,provincialgovernmentorlocalgovernmentwithrespectto

theirequit yequivalentproposal.

3.2 Any Equity Equivalent Programme forming part of a Sector Code constitutes an

approvedprogramme.

3.3 EquityEquivalent Programmesare preferably SectorSpecic,butthe Ministermay

considerrequestsforapprovalofprogrammesthatarenotSectorSpecic.

3.4 EquityEquivalentProgrammesmayinvolve:

3.4.1 programmesthatsupport:

3.4.1.1 theAcceleratedandSharedGrowthInitiativeforSouthAfrica;

3.4.1.2 theJointInitiativeforPrioritySkills;

3.4.1.3 theNationalSkillsDevelopmentStrategy;

3.4.2 programmesthatpromoteenterprisecreationinrespectofcooperativesthatare:

3.4.2.1 morethan50%ownedbyblackpeople;or

3.4.2.2 morethan30%ownedbyblackwomen;or

3.4.2.3 morethan50%ownedbymembersofblackdesignatedgroups;;

3.4.3 any otherprogrammesthat promoteSocio-Economic advancementor contribute to

theoverallsociodevelopmentoftheRepublicofSouthAfrica.

3.5 EquityEquivalentProgrammesmustinclude:

3.5.1 afulldescriptionofprogrammeobjectivesandprojectedoutcomes;

3.5.2 qualicationcriteriaforparticipationintheprogramme;

3.5.3 timelinesforimplementationanddeliverywithmilestonesagainstwhichprogressis

measurable;and


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3.5.4 detailsaboutthesponsorsoftheprogramme.

3.6 Equity Equivalent Programmes are limited to Multinationals subject to a Global

Practice.

3.7 EquityEquivalentProgrammesmayhaveanyofthefollowingastheirbeneciaries:

3.7.1 enterprisesinwhich:

3.7.1.1 blackpeopleholdmorethan50%oftheexercisablevotingrightsandmorethan50%

oftheeconomicinterest;

3.7.1.2 blackwomenholdmorethan30%oftheexercisablevotingrightsandmorethan30%

oftheeconomicinterest;and

3.7.1.3 BlackDesignated Groups hold more than50% oftheexercisable voting rightsand

morethan50%oftheeconomicinterest;or

3.7.2 communities,naturalpersonsorgroupsofnaturalpersonswhereatleast75%ofthe beneciariesareblackpeopleandthesamepercentageofeconomicvalueisderived

byblackpeople.

4 Measurement of Equity Equivalent Contributions on te Ownersip

Scorecard

4.1 TheownershipscoreofaMultinationalparticipatinginanEquityEquivalentProgramme

is calculated in termsof paragraph4.3. A Multinational participatingin anEquity

EquivalentProgrammecannotreceiveanypointsforownershipunderanystatement

inCodeSeries100otherthanthisstatement.

4.2 ContributionstoEquityEquivalentProgrammesaremeasuredasactualcontributions madeusingthegeneralprinciplesetoutincodeseries600and700againstanyofthe

followingtargets:

4.2.1 25% ofthe valueof the South African operations ofthe Multinational, determined

usingaStandardValuation;or

4.2.2 4% ofTotal Revenuefrom its South African operations annuallyover the period of

continuedmeasurement;

4.3 TheOwnershipScoreunderanEquityEquivalentProgrammeusingeitherofthetargets

inparagraphs4.2mustbecalculatedintermsofAnnexe103(A).

5 Examples of Equity Equivalent Programmes

5.1 Enterprisecreation:

5.1.1 IftheequityequivalentcontributionofaMultinationalinvolvesthecreationofanew

Enterprise:

5.1.1.1 thenewEnterprisemustqualifyasaValue-AddingEnterprise;

5.1.1.2 thecreationofthenewEnterprisemustcomplywiththerequirementsforaQualifying

Transactionasdenedinstatement102;

5.1.1.3 thecreationofthenewEnterprisecannotcontributetotheMultinationalsscoreunder

Codeseries600;and


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5.1.1.4 theequity equivalent contributionmust involvethe provisionof interest freeloans,

No-GainGrantsorHumanCapitalInvestmentstothenewEnterpriseequivalentinvalue

to50%ofthenewEnterprisesprojectedoperationalcostsfortherst3yearsfollowing

itsestablishement.

5.2 Investmentinsocialadvancement:

5.2.1 An equity equivalent contribution of a Multinational that involves enhanced Socio-

EconomicDevelopment.

5.2.1.1 mustcomplyfullywithCodeseries700;and

5.2.1.2 cannotformpartoftheMultinationalsscoreunderCodeseries700.

6 SpecicRulesonMultinationals

6.1 AnycontributionstowardstheownershipElementofB-BB-BBEEmadebyMultinational

BusinessesorSouthAfricanMultinationalsaremeasurableagainstthevalueoftheir operationsintheRepublicofSouthAfrica.

6.2 In calculating their ownership score, Multinational Businesses and South African

MultinationalsmustapplytheExclusionPrincipletoanyportionofthebusinessvalue

oftheirSouthAfricanoperationsgainedfromnon-SouthAfricansources.AStandard

valuation method must be used to determine the value of the South African

operations.

6.3 Incalculatingtheirownershipscore,MultinationalBusinessesmayrecognisesalesof

EquityInstrumentsinnon-SouthAfricanEnterprisestoblackpeople,onthefollowing

basis:

6.3.1 thenon-SouthAfricanEnterprisemustformpartofthechainofownershipbetween theMultinationalBusinessanditseventualholdingcompany;and

6.3.2 thetransactionmustcomplywithSouthAfricanexchangecontrolrequirements;and

6.3.3 the percentage of the value of the Equity Instruments sold to the value of the

MultinationalBusinessrepresentstherecognisableblackclaimtoEconomicInterest;

and

6.3.4 the percentage of Exercisable Voting Rights ceded to the buyers of the Equity

InstrumentsintheMultinationalBusinessrepresentstherecognisableblackrightto

ExercisableVotingRights;and

6.3.5 therightsofownershipintheEquityInstrumentsarecomparabletorightsthatwould

haveaccruedhadtheEquityInstrumentB-BBEEnintheMultinationalBusiness.


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ANNEXE 103(A)

ThisformulaisfordeterminingtheOwnershipScoreunderanEquityEquivalentProgramme

usingeitherofthetargetsinparagraph5.2,wherethecontributionismadeupfrontonaonce

offbasis.

A =B

Cx20

Where

A is ownershippoints ofthe Multinational in anyyear arising from its equityequivalent

contribution

Bisthevalueofcontributionsmade

Cisthenancialvalueofthetargetof4%oftotalrevenuefromitsSouthAfricanoperations

annuallyovertheperiodofcontinuedmeasurement;

ThisformulaisfordeterminingtheOwnershipScoreunderanEquityEquivalentProgramme

usingeitherofthetargetsinparagraphs5.2,wherethecontributionismadeonanannual

basistowardsatenyeartargetisasfollows:

Where

AisownershippointsoftheMultinationalinanyyeararisingfromitsequityequivalent

contribution

Bisthevalueoftotalcontributionsmadepriortothedateofmeasurement

Cisthenancialvalueofthetargetinparagraph4.2.1.orthetenyearvalueofcontributions

tobemadeoverthelifeofthisstatement

Disthetime-basedgraduationfactoroutlinedbelow:

10%fortherstyearafterthecommencementofstatement000.

20%forthesecondyearafterthecommencementofstatement000.

40%fromtherstdayofthethirdyearafterthecommencementdateofstatement

000 tothelastdayattheendof the fourthyear afterthecommencementdateof statement000.

60%fromtherstdayofthefthyearafterthecommencementdateofstatement000to

the last day at the end of the sixth year after the commencement date of

statement000.

80%fromtherstdayoftheseventhyearafterthecommencementdateofstatement

000 tothelastday attheendoftheeighthyear afterthecommencementdateof

statement000.

100%fromtherstdayoftheninthyearafterthecommencementdateofstatement000

to the last day at the end of the tenth year after the commencement date of

statement000.

A =1

25% x Dx x 20

B

C


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MANAGEMENT CONTROL ELEMENT OF BROAD-BASED


STATEMENT 200: ThE GENERAL PRINCIPLES FOR MEASURING

MANAGEMENT CONTROL



Para Subject Page


2 Managementcontrolscorecard 2

3 CommonexamplesofTopManagement 2


5 CalculatingtheAdjustedRecognitionforGender 3

6 Calculatingcompliance 3

7 Annexe200(A) 4


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1.1 thescorecardformeasuringtheManagementControlElementofB-BBEE;

1.2 dene the key measurement principles associated with the Management Control

ElementofB-BBEE;and

1.3 thecalculationsformeasuringcompliance.

2 Management Control Scorecard

ThefollowingtablerepresentstheindicatorsandmethodforcalculatingascoreforManagement

Controlunderthisstatement:

C ategor y ManagementControlindicator Weightingpoint s C omplianceTarget

2.1Boardparticipation::

2.1.1ExercisableVotingRightsofblackBoardmembersusingtheAdjustedRecognitionforGender

3 50%

2.1.2 Black Executive Directors using the AdjustedRecognitionforGender

2 50%

2.2.TopManagement:

2.2.1Black SeniorTopManagement usingthe AdjustedRecognitionforGender

3 40%

2.2.2BlackOtherTopManagementusingtheAdjustedRecognitionforGender

2 40%

2.3Bonuspoints:

BlackIndependentNon-ExecutiveBoardMembers 1 40%

3 Common Examples of top Management

TheinclusionofthefollowingexamplesofTopManagementisforguidancepurposesonly:

3.1 SeniorTopManagementpositionsincludethechiefexecutiveofcer,thechiefoperating

ofcer,thechiefnancialofcerandotherpeopleholdingsimilarpositions.

3.2 Other Top Managementpositionsincludethechief information ofcer,theheadof

marketing,theheadofsales,theheadofpublicrelations,theheadoftransformation,

theheadofhumanresourcesandotherpeopleholdingsimilarpositions.


4.1 AMeasuredEntity receivespoints by meeting thetargets forparticipationofblack

peopleandblackwomenatBoardandTopManagementlevel.

4.2 AMeasuredEntitymustusethedataincalculatingitsscoreundertheManagement

ControlscorecardusedinitsreturnsledwiththeDepartmentofLabourunderthe

EmploymentEquityAct.ThisdoesnotapplytoMeasuredEntitiesexemptfromling

suchreturns.

4.3 AMeasuredEntity thatdoesnotdistinguish betweenTopManagementandSenior

ManagementmayincludeitsSeniorManagementunderthisstatement.IfaMeasured

Entityadoptsthisapproach


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4.3.1 thecorrespondingtargetsforSeniorManagementinCodeseries300willapplytothe

ManagementControlscorecard;

4.3.2 Senior Management included in thi s st atement is not measurable under

statement300.

4.4 IfaMeasuredEntitydoesnotdistinguishbetweenSeniorTopManagementandOther

TopManagement,thenTopManagementismeasurableasasingleindicatorwitha

Weightingof5pointsunderparagraphs2.2.1and2.2.2.

4.5 If Measured Entities do appoint Non-Executive Independent Board Members, they

areencouragedtoappointpersonswhodonotserveinthatcapacityforanyother

MeasuredEntity.

5 Calculating te Adjusted Recognition for Gender

TheAdjustedRecognitionforGenderiscalculatedintermsofformulaAinAnnexe200(A).

6 Calculating Compliance

6.1 TheManagementControlindicatorsprovidedforintheManagementControlScorecard

mustbecalculatedintermsofformulasBandCinAnnexe200(A).

6.2 IfaMeasuredEntitygainsascoreforaManagementControlindicatorthatismore

thanthe relevant weightingpoints, that Enterprise will only receivetheWeighting

points.


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A = B2

+ C

Cislimitedtoamaximumof50%ofthetarget

Where

A istheAdjustedRecognitionforGender

Bisthepercentageofemployeesinthemeasurementcategorythatareblackpeople

Cisthepercentageofemployeesinthemeasurementcategorythatareblackwomen

ANNEXE 200(A)

A: Calculation of te Adjusted Recognition for Gender


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B: Calculating Compliance

Thecalculationofthemanagementindicatorsprovidedforinparagraphs2.1.1,2.1.2.,2.2.1

and2.2.2isasfollows:

A =B

CX D


Where

Aisthescoreformeasuredmanagementindicator

BistheAdjustedRecognitionforGendercalculatedinparagraph5

Cisthetargetforthatmeasurementcategoryasperparagraph2

DistheWeightingformeasuredindicatorasperparagraph2

C: The calculation of the management indicator provided for in paragraph 2.3 is as

follows:

A =B

CX D

Where

A isthescore for the managementindicator inparagraph2.3ofthenumberof blackIndependentNon-ExecutiveBoardMembersoftheMeasuredEntityasapercentageof

thetotalnumberofIndependentNon-ExecutiveBoardMembersoftheMeasuredEntity

CisthetargetforIndependentNon-ExecutiveBoardMembersoftheMeasuredEntityin

paragraph2.3

DistheWeightingpointsinparagraph2.3


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EMPLOYMENT EQUITY ELEMENT OF BROAD-BASED



EMPLOYMENT EQUITY



Para Subject Page


2 EmploymentEquityscorecard 2



5 Measurementoftheemploymentequitycriteria 3

6 Annexe300(A) 4


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1.1 specifythescorecardformeasuringEmploymentEquitycontributionstoB-BBEE;

1.2 dene the key measurement principles for measuring the Employment Equity

contributionstoB-BBEE;and

1.3 denetheformulaforcalculatingthescoreforEmploymentEquity.

2 Employment Equity Scorecard

2.1 ThefollowingtablerepresentsthecriteriausedforderivingascoreforEmployment

Equityunderthisstatement:

MeasurementCategor y&Criteria Weightingpoints Compliancetargets

Years0-5 Years6-10

2.1.1 Black D isabled Emp loyeesas ap ercentage of all employeesusingtheAdjustedRecognitionforGender

2 2% 3%

2.1. 2 Black employees in Senior Management as apercentageofallsuchemployeesusingtheAdjustedRecognitionforGender

5 43% 60%

2.1. 3 Black employees in Middle Management as apercentageofallsuchemployeesusingtheAdjustedRecognitionforGender

4 63% 75%

2.1.4 Black employees in Junior Management as apercentageofallsuchemployeesusingtheAdjustedRecognitionforGender

4 68% 80%

2.1.5 BonuspointformeetingorexceedingtheEAPtargetsineachcategoryunder2.1.1to2.1.4

3

2.2 TheWeightingpointsin theEmploymentEquity scorecardrepresentthemaximum

numberofpointspossibleforeachofthecriteria.


3.1 Whereverpossible,aMeasuredEntitymustusethedatathatitleswiththeDepartment

of L abour under the Employment Equit y Act in calculating it s score under the

employmentequityscorecard.

3.1.1 NoMeasuredEntityshallreceiveanypointsundertheEmploymentEquityScorecard

unlesstheyhaveachievedasub-minimumof40%ofeachofthetargetssetoutonthe

EmploymentEquityScorecardinrespectofthebothveyearperiods.


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3.2 InorderforaMeasuredEntitytoachievebonuspointsataparticularlevel,theentity

needstomeetorexceedtheEAPtargets.

3.3 AMeasuredEntityexemptfromlingreturnsmustcompileitsdataforcalculatingits

score undertheEmployment Equity Scorecard usingthe guidelines setoutin the EmploymentEquityActanditsEERegulations.

3.4 If the organisational structure of a Measured Entity does not distinguishbetween

MiddleManagementandJuniorManagement,itcanconsolidatethoseMeasurement

CategoriesagainstthetargetsforJuniorManagement.Theweightingpointsforthe

MeasurementCategoriesmustbeadjustedasfollows:

3.4.1 SeniorManagement8points;

3.4.2 JuniorManagement6points.

3.5 Black women employees in each Measurement Category qualify for enhanced

recognitionusingtheAdjustedRecognitionforGender.


TheAdjustedRecognitionforGenderiscalculatedintermsoftheformulasetoutinAnnex

(300A).

5 Measurement of te Employment Equity Criteria

ThecriteriaintheEmploymentEquityscorecardismeasuredintermsoftheformulasetoutin

Annex300(A).


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ANNEX300(A)

A:CALCULATINGTHEADJUSTEDRECOGNITIONFORGENDER

ThecalculationoftheAdjustedRecognitionforGenderisasfollows:

A =B

2+ C


Where

AistheAdjustedRecognitionforGender



B: Measurement of te Employment Equity Criteria

Thisequationexplainsthemethodofmeasurementofthecriteriain theEmploymentEquity

scorecard:

A =B

CX D

Where

Aisthescoreformeasurementcategoryindicator

BistheAdjustedRecognitionforGendercalculatedinparagraph4

Cisthetargetforthatmeasurementcategoryasperparagraph2

DistheWeightingformeasuredindicatorasperparagraph2


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CODE SERIES 400: MEASUREMENT OF ThE SKILLS

DEVELOPMENT ELEMENT OF BROAD-BASED BLACK


STATEMENT 400: ThE GENERAL PRINCIPLES FOR MEASURING SKILLS

DEVELOPMENT



Para Subject Page


2 TheSkillsDevelopmentScorecard 2



5 Measurementofskillsdevelopmentindicators 3

6 TheLearningProgrammeMatrix 3

7 Annexe400(A) 4

8 Annexe400(B) 5


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1.1 thescorecardformeasuringtheSkillsDevelopmentElementofB-BBEE;

1.2 dene the key measurement principles associated with the Skills Development

Element;and

1.3 theformulaformeasuringtheSkillsDevelopmentElementofB-BBEE.

2 Te Skills Development Scorecard

2.1 The following table represents the criteria used for deriving a score for Skills

Developmentunderthisstatement:

Categor y SkillsDevelopmentElement Weightingpoints ComplianceTarget

2.1.1 SkillsDevelopmentExpenditureonanyprogramspeciedintheLearningProgrammesMatrix:

2.1.1.1 Skills Development Expenditure on LearningProgrammes specied in the Learning ProgrammesMatrixforblackemployeesasapercentageofLeviableAmountusingtheAdjustedRecognitionforGender

6 3%

2.1.1.2 Skills Development Expenditure on LearningProgrammesspeciedintheLearningProgrammesMatrixfor black employees with disabilities as a percentageofLeviable Amount using theAdjustedRecognition forGender.r

3 0.3%

2.1. 2 Learner ships

2.1.2.1 Number of black emp loyees p articipatingin Learnerships or Category B, C and D Programmesasa percentageof totalemployeesusing theAdjustedRecognitionforGender

6 5%

2.2 TheWeightingpointsin the SkillsDevelopmentscorecard represent the maximum

numberofpointspossibleforeachofthecriteria.


3.1 MeasuredEntitiesreceivepointsontheSkillsDevelopmentscorecardonlyif:

3.1.1 theyareincompliancewiththerequirementsoftheSkillsDevelopmentActandthe

SkillsDevelopmentLeviesAct;

3.1.2 theyhaveregisteredwiththeapplicableSETA;

3.1.3 theyhavedevelopedaWorkplaceSkillsPlan;and

3.1.4 theyhave implementedprogrammes targetedat developingPrioritySkillsgenerally,

andspecically,forblackemployees.

3.2 Expenses on scholarships and bursaries for employees does not constitute Skills

Development Expenditureif theMeasuredEntity canrecoveranyportionof those

expensesfromtheemployeeorifthegrantofthescholarshiporbursaryisconditional.

Despitetheaforegoing,iftherightofrecoveryortheconditioninvolveseitherofthe

followingobligationsoftheemployee,theexpensesarerecognisable:

3.2.1 theobligationofsuccessfulcompletionintheirstudieswithinthetimeperiodallocated;

or


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3.2.2 theobligationofcontinuedemploymentbytheMeasuredEntityforaperiodfollowing

successfulcompletionoftheirstudiesisnotmorethantheperiodoftheirstudies.

3.3 AnySkillsDevelopmentExpenditurebyaMeasuredEntitythatisanABETprogrammeis

recognisable at amultipleof 1.25to theactual value of such Skills Development Expenditure.

3.4 Skills Development Expenditure includesany legitimate expenses incurred for any

LearningProgrammeofferedbyaMeasuredEntitytoitsemployeesevidencedbyan

invoiceorappropriateinternalaccountingrecord.

3.5 SkillsDevelopmentExpenditurearisingfromUncertiedLearningProgrammesorfrom

Category G Learning Programmes under the Learning Programmes Matrix cannot

representmorethan15%ofthetotalvalueofSkillsDevelopmentExpenditure.

3.6 Legitimatetrainingexpensesincludes:

3.6.1 costsoftrainingmaterials;

3.6.2 costsoftrainers;

3.6.3 costsoftrainingfacilitiesincludingcostsofcatering;

3.6.4 scholarshipsandbursaries;

3.6.5 coursefees;

3.6.6 accommodationandtravel;and

3.6.7 administrationcostssuchastheorganizationoftrainingincluding,whereappropriate,

thecost to theMeasured Entityof employing askills developmentfacilitator ora

trainingmanager.

3.7 Salaries or wages paid to an employee participating as alearner in anyLearning

ProgrammeonlyconstituteSkillsDevelopmentExpenditureiftheLearningProgramme

isaLearnershiporfallswithinCategoryB;C;orDoftheLearningProgrammeMatrix.


The calculation ofthe Adjusted Recognition for Genderis setout informula A inAnnexe

400(B).

5 Measurement of Skills Development Indicators

TheformulathatexplainsthemethodofmeasurementofthecriteriaintheSkillsDevelopment

scorecardisintermsofformulaBinAnnexe400(B).

6 Te Learning Programme Matrix

TheMinistermayfromtimetotime,bynoticeinthegazette,reviseorsubstitutetheLearning

Programme Matrix. Any changes will only be applicable to Compliance Reports prepared

for a MeasuredEntityfor the rst 12-month period following the gazetting ofa revision or

substitution.


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Annexe400A-LearningProgrammeMatrix

C at N ar rat iv eD es cri pti on D eli ver yMod e L ear ningSi te L ear ningAc hi ev ement

A Institution-basedtheoretical

instructionaloneformallyassessedbytheinstitution

Institutional

instruction

Institutionssuch

asuniversitiesandcolleges,

schools,ABET

providers

Recognisedtheoretical

knowledgeresultingintheachievementofadegree,

diplomaorcerticateissued

byanaccreditedorregistered

formalinstitutionoflearning

B Institution-basedtheoretical

instructionaswellassome

practicallearningwithan

employerorinasimulated

workenvironmentformally

assessedthroughthe

institution

Mixedmodedelivery

withinstitutional

instructionaswellas

supervisedlearning

inanappropriate

workplaceor

simulatedwork

environment

Institutionssuch

asuniversities

andcolleges,

schools,ABET

providersand

workplace

Theoreticalknowledgeand

workplaceexperiencewith

setrequirementsresultingin

theachievementofadegree,

diplomaorcerticateissued

byanaccreditedorregistered

formalinstitutionoflearning

C Recognisedorregistered

structuredexperiential

learningintheworkplacethatisrequiredafter

theachievementofa

qualicationformally

assessedbyastatutory

occupationalorprofessional

body

Structuredlearning

intheworkplace

withmentoringorcoaching

Workplace Occupationalorprofessional

knowledgeandexperience

formallyrecognisedthroughregistrationorlicensing

D Occupationally-directed

instructionalandwork-

basedlearningprogramme

thatrequiresaformal

contractformally

assessedbyanaccredited

body

Institutional

instructiontogether

withstructured,

supervised

experientiallearning

intheworkplace

Institutionand

workplace

Theoreticalknowledgeand

workplacelearning,resulting

intheachievementofaSouth

AfricanQualicationsAuthority

registeredqualication,a

certicateorothersimilar

occupationalorprofessional

qualicationissuedbyan

accreditedorregisteredformal

institutionoflearning

E Occupationally-directed

instructionalandwork-

basedlearningprogramme

thatdoesnotrequirea

formalcontractformally

assessedbyanaccredited

body

Structured,

supervised

experientiallearning

intheworkplace

whichmayinclude

someinstitutional

instruction

Workplace

andsome

institutionalas

wellasABET

providers

Creditsawardedforregistered

unitstandards

F Occupationally-directed

informalinstructional

programmes

Structured

informationsharing

ordirectinstruction

involvingworkshops,

seminarsand

conferencesand

shortcourses

Institutions,

conferences

andmeetings

Continuingprofessional

development,attendance

certicatesandcreditsagainst

registeredunitstandards(in

someinstances)

G Work-basedinformalprogrammes

Informaltraining Workplace Increasedunderstandofjoborworkcontextorimproved

performanceorskills


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ANNEXE400(B)

A: Calculating te Adjusted Recognition for Gender

ThecalculationoftheAdjustedRecognitionforGenderisasfollows:

A =B

2+ C


Where

AistheAdjustedRecognitionforGender



B: Measurement of Skills Development Indicators

ThisformulaexplainsthemethodofmeasurementofthecriteriaintheSkillsDevelopment

scorecard:

A =B

Cx D

Where

Aisthescoreforanygivencriteriaasreferredtointhescorecardunderstatement400

BistheAdjustedRecognitionforGendercalculatedunderthecalculationoftheadjusted

recognitionforgender

Cisthetargetfortheapplicablecriteriaasreferredtointhescorecardunderstatement

400

DistheWeightingfortheapplicablecriteriaasreferredinthescorecardunderstatement

400


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PREFERENTIAL PROCUREMENT ELEMENT OF



PREFERENTIAL PROCUREMENT



Para Subject Page


2 Preferenti

Documents

Dti B-bbee Codes Final