B-BBEE — B-BBEE Codes of Good Practice: Amended Codes of Good Practice (GG 38766, 2015) (source: https://www.thedtic.gov.za/wp-content/uploads/BEE38766.pdf)
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Staatskoerant
R EPU B LI C OF S OUT H AF RICA
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Vol. 599 Pretoria, 6
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2015 No. 38766
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CONTENTS • INHOUD
Page Gazette
No.
No. No.
GENERAL NOTICE
Trade and Industry, Department of
General Notice
408 Broad Based Black Economic Empowerment Amendment Act (46/2013): Statement 003: Amended guidelines for
developing and gazetting of sector codes ..................................................................................................................... 3 38766
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STAATSKOERANT, 6 MEI 2015 No. 38766 3
GENERAL NOTICE
NOTICE 408 OF 2015
DEPARTMENT OF TRADE AND INDUSTRY
I, Dr Rob Davies, Minister of Trade and Industry hereby:
(a) Issue the following Codes of Good Practice (the codes) under section 9 (1) of the
Broad Based Black Economic Empowerment Amendment Act (Act No 46 of
2013).
(b) 4rm e that these Codes will come into operation from 1 May 2015.
Dr ROB DAVIS, MP
MINISTER OF TRADE AND INDUSTRY
DATE: 3° / /2015
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4 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
STATEMENT 003: AMENDED GUIDELINES FOR DEVELOPING AND GAZETTING OF
SECTOR CODES
Issued under section 9 of the Broad-Based Black Economic Empowerment Amendment
Act of 2013
Arrangement of this statement
Para Subject Page
1 Objective of this statement 2
2 Procedure for developing and gazetting of Transformation Charters 2
3 Procedure for developing and gazetting of Sector Codes 2
4 Status of Transformation Charters and Sector Codes 4
5 Compliance of a group of Companies 4
6 The Role of Sector Charter Councils 5
7 Variation of indicators in Codes 200 6
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STAATSKOERANT, 6 MEI 2015 No. 38766 5
OBJECTIVE OF THIS STATEMENT
The objectives of this statement are to specify:
1.1 The manner of gazetting Transformation Charters under section 12 of the
Broad Based Black Economic empowerment (B-BBEE) Act;
1.2 the process for developing and gazetting of Sector Codes under section 9
of the B-BBEE Act;
1.3 the status of Transformation Charters and Sector Codes; and
1.4 recommend an approach for drawing up Transformation Charters and
Sector Codes.
2 PROCEDURE FOR DEVELOPING AND GAZETTING OF
TRANSFORMATION CHARTERS
2.1 The relevant sector body together with the relevant Line Ministry of the
sector seeking to gazette a Transformation Charter under section 12 must:
2.1.1 Apply in writing to the Minister of Trade and Industry; and
2.1.2 Provide evidence of compliance with section 12 of the B-BBEE Act as
amended.
2.2 The Minister of Trade and Industry may refuse an application to gazette a
Transformation Charter if the applicant has failed to comply with section 12
of the B-BBEE Act as amended.
2.3 If the Minister of Trade and Industry refuses to grant an application under
paragraph 2.2,
2.3.1 The Minister of Trade and Industry must notify the applicant of that decision
in writing within two months; and
2.3.2 An applicant may re-apply for the gazetting of that Transformation Charter
by revising its submission.
2.4 The Minister of Trade and Industry must gazette that Transformation
Charter as soon as it is reasonably possible following the granting of an
application under paragraph 2.1.
3 PROCEDURE FOR DEVELOPING AND GAZETTING OF SECTOR
CODES
3.1 The following principles apply to developing Sector Codes:
3.1.1 There must be common commercial and other characteristics within the
entities operating in the sector which would make it feasible to formulate a
transformation charter subject to the proposed Sector Code;
3.1.2 the proposed Sector Code must fully address all the Elements in the
Generic Scorecard;
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6 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
3.1.3 the proposed Sector Code must use the same definitions in respect of all
beneficiaries as those used in the Codes;
3.1.4 the proposed Sector Code must use the same calculation methodologies to
measure compliance as those used in the Codes;
3.1.5 the proposed Sector Code may deviate from Targets and Weightings used
in the Codes only where those deviations are justifiable based on sound
economic principles, sectorial characteristics or empirical research;
3.1.6 a sector code developed in terms of this statement must set targets which
are over and above the minimum targets set out in the Generic Codes of
Good Practice .
3.1.7 the proposed Sector Code may deviate from the thresholds set out in the
Generic Codes of Good Practice , only where those deviations are
justifiable based on sound economic principles, sectorial characteristics or
empirical research;
3.1.8 the proposed Sector Code may introduce a new additional Element for
measurement where such addition is justifiable based on sound economic
principles, sectorial characteristics or empirical research;
3.1.9 the proposed Sector Code must clearly define its scope of application;
3.1.10 There must be support by the Line Ministry responsible for the sector and the
Minister of Trade and Industry responsible for the gazette of the Sector Code.
There must have been a clear demonstration that the Line Ministry was part of
the drafting of the Sector Code and a letter of support must be sent to the
Minister of Trade and Industry.
3.1.11 No transitional period shall be provided for the implementation of a sector code.
3.2 The sector body supported by the Line Ministry of a sector seeking to
gazette a Sector Code under section 9 of the Act must:
3.2.1 Apply in writing to the Minister of Trade and Industry;
3.2.2 Indicate the process by which the Sector Code has been developed; and
3.2.3 provide evidence of compliance with section 12 of the B-BBEE Act as
amended.
3.2.4 The Minister of Trade and Industry shall in terms of section 9 (5) of the B-
BBEE Amendment Act issue for 60 days public comments and inputs a
Sector Code as a draft before it is approved and gazetted as a final binding
document.
3.2.5 A committee that consist of the Sector Charter Council, Line Ministry and
the Department of Trade and Industry shall analyse and consider the
incorporation of public comments and inputs from members of the public .
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STAATSKOERANT, 6 MEI 2015 No. 38766 7
3.3 Grounds for refusal to gazette Sector Code:
3.3.1 The fundamental principles of any of the Elements of the Generic
Scorecard are not adequately addressed as per paragraph 3.1.2 above;
3.3.2 If there are deviations in the calculation, methodologies and definitions
applicable in measuring B-BBEE compliance as per paragraph 3.1.3 and
3.1.4 above;
3.3.3 contains inconsistencies in the Targets and Weightings not fully justified as
per paragraph 3.1.5 above ambiguity with regards to sectorial scope of
application as per paragraph 3.1.9. above.
3.4 Sector Codes must align with any key principles changes or amendment to
the Generic Codes as determined by the Minister of Trade and Industry.
3.5 Alignment with other amended provisions of the Codes will be in
accordance with the procedures as outlined in this statement.
4 STATUS OF TRANSFORMATION CHARTERS AND SECTOR CODES
4.1 A section 12 Transformation Charter constitutes a sectoral commitment to
promote B-BBEE. It is not legally binding on the applicable sector, organs
of state or public and private entities.
4.2 Code series 000 to 600 and any statements under those Codes remain
applicable to enterprises in the sector, despite the gazetting of their
Transformation Charter under section 12 of the Act as amended.
4.3 A measured entity in a sector in respect of which the Minister of Trade and
Industry has issued a sector code must be measured in accordance with
that sector code.
4.4 A section 9 (1) Sector Code is legally binding on the applicable sector,
organs of state or public and private entities.
5 COMPLIANCE FOR A GROUP OF COMPANIES
5.1 The determining factor for a Holding Company/ Group of Companies' or
subsidiary compliance with a Sector Code is the scope of application of the
sector code and/or revenue. If a Holding Company/ Group of Companies'
or subsidiary derive over 50% of its revenue from a sector where there is a
Sector Code then such measured entity will be measured in accordance
with the scorecard of that Sector Code.
5.2 Where a Holding Company/ Group of Companies' revenue is equally
distributed amongst its divisions / subsidiaries such that the Holding
Company / Group of Companies' cannot determine under which sector
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code it falls, then the Holding Company/ Group of Companies' will be
measured in accordance with the Generic Codes.
5.3 However, the divisions/subsidiaries of the entity shall be subjected to a
Sector Code if they fall or trade under a sector which has a gazetted
Section 9 (1) Sector Code.
5.4 Despite 5.1,5.2 and 5.3 above, Sector Charter Councils after consulting
with the affected entity and with the approval of the Line Ministry and the
Department of Trade and Industry, may determine that an entity be
subjected to a relevant sector code if that entity is a significant and strategic
player in that sector.
6 THE ROLE OF SECTOR CHARTER COUNCILS
6.1 The main responsibilities of Sector Charter Councils are to develop the
sector codes and to monitor their implementation thereof.
6.2 Sector Charter Councils may or are encouraged to be registered as legal
entities that exist for non-profit making.
6.3 The following represents a recommended model for setting up Sector
Charter Councils:
6.3.1 equitable composition of stakeholders in the members of the Sector Charter
Council;
6.3.2 ensuring application of good corporate governance principles in the Sector
Charter Council.
6.3.3 The Line Ministry has the responsibility to drive the process of establishing
a Sector Charter Council with the Sector.
6.3.4 The appointment of the Sector Charter Council members shall be approved
by the Line Ministry as recommended by the sector stakeholders.
6.4 The functions of the Sector Charter Council may include:
6.4.1 to provide guidance on sector-specific matters effecting B-BBEE in entities
within the sector;
6.4.2 to compile reports on the status of broad-based black economic
empowerment within the sector, and
6.4.3 to share information with sector members, approved accreditation
agencies, B-BBEE Commission, B-BEE Presidential Advisory Council, the
Line Minister and the Minister of Trade and Industry.
6.5 The Sector Charter Councils should report to the Line Ministry, the Minister
of Trade and Industry and to the Advisory Council on progress made by the
sector subject to the relevant Sector Code. Such reports should typically
contain qualitative and quantitative information about sectorial
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STAATSKOERANT, 6 MEI 2015 No. 38766 9
performance, including details about all the elements of the sector's B-
BBEE balanced scorecard.
6.6 Measured Entities that are governed by Sector Codes must submit on an
annual basis their B-BBEE Certificate and relevant B-BBEE verification
reports to the Sector Charter Councils.
6.7 The funding of the operations of Sector Charter Councils is a joint
responsibility between the private sector and the Line Ministry responsible
for that particular sector.
7. VARIATION OF INDICATORS IN CODES 200
7.1 A Sector Code may allow the use of indicators that differ from those
contained in Code 200 as a means of fixing the relevant Measurement
Categories.
7.2 Sectors adopting this approach must:
7.2.1 Consider using indicators that are consistent with the principles contained
in the Employment Equity Regulations;
7.2.2 consider all relevant factors such as seniority, expertise, scarcity of skill-set,
organisational role and responsibility and geographic location;
7.2.3 base the definition of occupational levels on sound and empirical research
undertaken in the sector by a reputable institution; and
7.2.4 If the indicators include salary scales, consider providing for a default cost
of living or inflation adjustment in the salary scales, even if the sector
intends to amend those salary scales annually.
7.3 The gazetting of a Sector Code does not affect any employer's obligations
to comply with the Employment Equity Act and its regulations.
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CODE SERIES 000: FRAMEWORK FOR MEASURING BROAD-BASED BLACK
ECONOMIC EMPOWERMENT
STATEMENT 004: SCORECARDS FOR SPECIALISED ENTERPRISES
Issued under section 9 of the Broad-Based Black Economic Empowerment Amendment
Act of 2013
Arrangement of this statement
Para Subject Page
1 Objective of this Statement 2
2 General Principles 2
3 The Specialised Generic Scorecard. 4
4. Management Control Specialised Scorecard. 5
5 Skills Development Specialised Scorecard. 6
6 Enterprise and Supplier Development Scorecard. 7
7 Socio-Economic Specialised Scorecard. 9
8 Specialised Qualifying Small Enterprise Scorecard. 10
9 Management Control Qualifying Small Enterprise Specialised Scorecard. 11
10 Skills Development Qualifying Small Entperprise Specialised Scorecard. 11
11 Enterprise and Supplier Development Qualifying Small Enterprise Specialised
Scorecard 12
12 Socio-Economic Development Qualifying Small Entperprise Specialised Scorecard 12
13 Important Clarification 13
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1. OBJECTIVE OF THIS STATEMENT
The objectives of this statement are to:
1.1 Provide guidance about the treatment of Ownership for Specialised Enterprises
for Broad Based Black Economic Empowerment (B-BBEE) purposes, of:
1.1.1 Companies limited by guarantee;
1.1.2 Higher Education Institutions;
1.1.3 Non-Profit Companies;
1.1.4 Public entities and other Enterprises exclusively owned by organs of State; and
1.1.5 Public Benefit Schemes or Public Benefit Organisations,
1.2 Specify scorecards applicable to Measured Entities subject to this statement.
2 GENERAL PRINCIPLES
2.1 Every organ of State and public entity must apply any relevant Codes of Good
Practice issued in terms of the B-BBEE Act as amended when:
2.1.1 Determining qualification criteria for the issuing of licences, concessions or other
authorisations in respect of economic activity in terms of any law;
2.1.2 Developing and implementing a preferential procurement policy;
2.1.3 Determining qualification criteria for the sale of state-owned enterprises;
2.1.4 Developing criteria for entering into partnerships with the private sector; and
2.1.5 Determining criteria for the awarding of incentives, grants and investment
schemes in support of B-BBEE.
2.2 Public entities and other enterprises exclusively owned by organs of State are not
capable of evaluation of black ownership under Code series 100.
2.3 Higher Education Institutions are not public entities under the Public Finance
Management Act of 1999. They are incapable of evaluation of black ownership
under Code series 100.
2.4 Companies limited by guarantee and Non-Profit Companies have no shareholding.
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They are not capable of evaluation of black ownership under Code series 100. This
does not imply that companies limited by guarantee and Non-Profit Companies
sharing in the ownership of other enterprises cannot contribute towards black
ownership to such enterprises as provided for in Statement 100.
2.5 Non-Profit Companies and Public Benefit Organisations generally do not have any
beneficial ownership and are incapable of evaluation of black ownership under Code
series 100. This does not imply that Non-Profit Companies and Public Benefit
Organisations sharing in the ownership of other enterprises as broad-based
ownership schemes cannot contribute towards black ownership to such enterprises
as provided for in Statement 100.
2.6 Wherever any of the entities listed in paragraphs one and two require evidence of
their own B-BBEE compliance, they will use the Specialised Generic Scorecard. If
those entities are also Qualifying Small Enterprises, they will use the Specialised
Qualifying Small Enterprises Scorecard.
2.7 Entities that are Exempted Micro Enterprises (EME) under this statement are
deemed to have a B-BBEE status of "level four", having a B-BBEE recognition level
of 100%.
2.8 Enhanced B-BBEE recognition level for an EME:
2.8.1 Despite paragraph 2.7, an EME that has at least 75% black beneficiaries qualifies
for elevation to "Level One Contributor", having a B-BBEE recognition level of 135%;
and
2.8.2 Despite paragraph 2.7 and 2.8.1, an EME that has at least 51% black beneficiaries
qualifies for elevation to "Level Two Contributor", having a B-BBEE recognition level
of 125%.
2.9 An EME is only required to obtain a sworn affidavit annually confirming the following:
2.9.1 Annual Total Revenue/Allocated Budget/Gross Receipts of R10 million or less; and
2.9.2 Level of percentage of black beneficiaries.
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2.10 Any misrepresentation in terms of paragraph 2.9 above constitutes a criminal
offence as set out in the B-BBEE Act as amended.
2.11 Entities that are Qualifying Small Enterprises (QSE) will use the Specialised
Qualifying Small Enterprises Scorecard.
2.12 Despite paragraph 2.11, a QSE that has at least 75% black beneficiaries qualifies
for elevation to "Level One Contributor", having a B-BBEE recognition level of 135%.
2.13 Despite paragraphs 2.11 and 2.12, a QSE that has at least 51% black beneficiaries
qualifies for elevation to "Level Two Contributor", having a B-BBEE recognition level
of 125%.
2.14 A QSE that has at least 51% black beneficiaries is only required to obtain a sworn
affidavit annually confirming the following:
2.14.1Annual Total Revenue/Allocated Budget/Gross Receipts of R50 million or less; and
2.14.2 Level of percentage of black beneficiaries.
2.15 Any misrepresentation in terms of paragraph 2.14 above constitutes a criminal
offence as set out in the B-BBEE Act as amended.
3 THE SPECIALISED GENERIC SCORECARD
3.1 The following table represents the Specialised Generic Scorecard and contains the:
3.1.1 Elements of the scorecard;
3.1.2 Weightings; and
3.1.3 The Code series reference that specify the mechanisms for measurement and
calculation of each of the Elements of the scorecard (Code series 100 - 500).
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3.2 All other terms of statement 000-500 apply to Measured Entities subject to this
statement, mutatis mutandis.
Element Weighting Code series
reference
Management control 20 points 200
Skills development 25 points 300
Enterprise and Supplier 50 points 400
Development
Socio-Economic Development 5 points 500
4. MANAGEMENT CONTROL SPECIALISED SCORECARD
The following table represents the criteria used to derive a score for Management
Control under this statement:
Measurement Category and Criteria Weighting points Compliance targets
4.1 Board participation:
4.1.1 Exercisable voting rights of black board
2 50%
members as a percentage of all board members
4.1.2 Exercisable voting rights of black female
board members as a percentage of all board 1 25%
members
4.1.3 Black executive directors as a percentage
2 50%
of all executive directors
4.1.4 Black female executive directors as a
1 25%
percentage of all executive directors
4.2 Other Executive Management:
4.2.1 Black executive management as a
2 60%
percentage of all executive management
4.2.2 Black female executive management as a
1 30%
percentage of all executive management
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4.3 Senior Management
4.3.1 Black employees in senior management
2 60%
as a percentage of all senior management
4.3.2 Black female employees in senior
management as a percentage of all senior 1 30%
management
4.4 Middle Management
4.4.1 Black employees in middle management
2 75%
as a percentage of all middle management
4.4.2 Black female employees in middle
management as a percentage of all middle 1 38%
management
4.5 Junior Management
4.5.1 Black employees in junior management
2 88%
as a percentage of all junior management
4.5.2 Black female employees in junior
management as a percentage of all junior 1 44%
management
4.6 Employees with disabilities
4.6.1 Black employees with disabilities as a
2 2%
percentage of all employees
4.7 The compliance targets for 4.3, 4.4, and 4.5 of the Management Control scorecard
are based on the overall demographic representation of black people as defined in
the Regulations of Employment Equity Act and Commission on Employment Equity
Report, as amended from time to time.
4.8 In determining a Measured Entity's score, the targets should be broken down into
specific criteria according to the different race sub-groups, within the definition of
black and in accordance with the Employment Equity Act, and weighted accordingly.
5. THE SKILLS DEVELOPMENT ELEMENT SPECIALISED SCORECARD
The following table represents the criteria used to derive a score for Skills
Development under this statement:
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Category Skills Development Element Weighting Compliance
points Target
5.1. Skills Development Expenditure on any programme specified in the Learning
Programme Matrix for black people as a percentage of the Leviable Amount
5.1.1 Skills Development Expenditure on Learning
Programmes specified in the Learning Programme
9 6%
Matrix for black people as a percentage of Leviable
Amount.
5.1.2 Skills Development Expenditure on Learning
Programmes specified in the Learning Programme
4 0.3%
Matrix for black employees with disabilities as a
percentage of Leviable Amount.
5.2 Learnerships, apprenticeships and internships
5.2.1 Number of black people participating in
learnerships, apprenticeships and internships as a
6 2,5%
percentage of total employees
5.2.2 Number of black unemployed people participating
in training specified in the learning programme matrix as 6 2,5%
a percentage of number of employees
Bonus points:
5.3 Number of black people absorbed by the
Measured Entity and Industry at the end of the 5 100%
learnership/ apprenticeship or internship programme
5.4 The compliance targets for 5.1.1, 5.2.1, 5.2.2 of the Management Control
scorecard are based on the overall demographic representation of black people as
defined in the Regulations of Employment Equity Act and Commission on
Employment Equity Report, as amended from time to time.
6. ENTERPRISE AND SUPPLIER DEVELOPMENT SPECIALISED SCORECARD
The following table represents the criteria to derive a score for Enterprise and
Supplier Development under this statement.
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Criteria Weighting Compliance
points targets
6.1 PREFERENTIAL PROCUREMENT
6.1.1 B-BBEE Procurement Spend from all
Empowering Suppliers based on the B-BBEE
Procurement Recognition Levels as a 5 80%
percentage of Total Measured Procurement
Spend
6.1.2 B-BBEE Procurement Spend from all
Empowering Suppliers that are Qualifying
Small Enterprises based on the applicable B-
BBEE Procurement Recognition Levels as a 4 15%
percentage of Total Measured Procurement
Spend
6.1.3 B-BBEE Procurement Spend from all 5 15%
Exempted Micro-Enterprises based on the
applicable B-BBEE Procurement Recognition
Levels as a percentage of Total Measured
Procurement Spend
6.1.4 B-BBEE Procurement Spend from
Empowering Suppliers that are at least 51% 11 40%
black owned based on the applicable B-BBEE
Procurement Recognition Levels as a
percentage of Total Measured Procurement
Spend
6.1.5 B-BBEE Procurement Spend from
Empowering Suppliers that are at least 30% 5 12%
black women owned based on the applicable
B-BBEE Procurement Recognition Levels as
a percentage of Total Measured Procurement
Spend
6.1.6 Bonus points
6.1.6.1 B-BBEE Procurement Spend from 2 2%
Designated Group suppliers that are at least
51% black owned
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6.2 SUPPLIER DEVELOPMENT
6.2.1 Annual value of all Supplier Development 2% of Net
Contributions made by the Measured Entity as 15 Profit After
a percentage of the target Tax
(NPAT) or
0,2%
Annual
Revenue/
Allocated
budget/
Gross
receipts/
Discretional
spend
6.3 ENTERPRISE DEVELOPMENT
6.3.1 Annual value of Enterprise Development 5 1% of
Contributions and Sector Specific Programmes NPAT or
made by the Measured Entity as a percentage 0,1%
of the target. Annual
revenue/
Allocated
budget/
Gross
receipts/
Discretional
spend
6.4 Bonus Points
6.4.1 Bonus point for graduation of one or more 1
Enterprise Development beneficiaries to
graduate to the Supplier Development level.
6.4.2 Bonus point for creating one or more jobs 1
directly as a result of Supplier Development and
Enterprise Development initiatives by the
Measured Entity
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7. SOCIO-ECONOMIC DEVELOPMENT SPECIALISED SCORECARD
The following table represents the criteria to derive a score for Socio-Economic
Development under this statement.
Criteria Weighting Compliance
Points Target
7.1 Annual value of all Socio-Economic Development 5 1% of NPAT
contributions by the Measured Entity as a percentage or 0,1%
of the target. Annual
Revenue/
Allocated
budget/ Gross
receipts/
Discretional
spend
8. THE SPECIALISED QUALIFYING SMALL ENTERPRISES SCORECARD
8.1 The following table represents the Specialised Generic Scorecard and contains
the:
8.1.1 Elements of the scorecard;
8.1.2 Weightings; and
8.1.3 The Code series reference that specify the mechanisms for measurement and
calculation of each of the elements of the scorecard (Code series 602 - 605).
8.2. All other terms of statement 000 -600 apply to Measured Entities subject to this
statement, mutatis mutandis.
Element Weighting Code series
reference
Management control 25 points 602
Skills development 30 points 603
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20 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
Enterprise and Supplier Development 30 points 604
Socio-Economic Development 15 points 605
8.3. A QSE is required to comply with all the applicable elements for purposes of
measurement under the Specialised Qualifying Small Enterprise Scorecard.
9. THE MANAGEMENT CONTROL QUALIFYING SMALL ENTERPRISES
SPECIALISED SCORECARD
The following table represents the indicators and method for calculating a score for
management control under this statement:
Criteria Weighting Compliance Target
points
9.1 Executive Management
9.1.1 Black representation at Executive 8 50%
Management
9.1.2 Black female representation at Executive 3 25%
Management.
9.2 Senior, Middle and Junior Management
9.2.1 Black representation at Senior, Middle 11 60%
and Junior management
9.2.2 Black female representation at Senior, 3 30%
Middle and Junior management
10. SKILLS DEVELOPMENT QUALIFYING SMALL ENTERPRISES
SPECIALISED SCORECARD
The following table represents the indicators and methods for calculating a
score under this statement:
10.1 Skills Development Element Weighting Compliance
points Target
10.1.1 Skills development expenditure on learning 24 3%
programmes specified in the learning programme
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STAATSKOERANT, 6 MEI 2015 No. 38766 21
matrix for black people as a percentage of leviable
amount
10.1.2 Skills development expenditure on learning 6 1%
programmes specified in the learning programme
matrix for black female as a percentage of leviable
amount
11. ENTERPRISE AND SUPPLIER DEVELOPMENT QUALIFYING SMALL
ENTERPRISES SPECIALISED SCORECARD
The following table represents the criteria to devise a score for Enterprise and
Supplier Development under this statement.
Criteria Weighting Compliance targets
points
11.1 PROCUREMENT
11.1.1 B-BBEE Procurement Spend from all 25 60%
Empowering Suppliers based on the B-BBEE
Procurement Recognition Levels as a percentage
of Total Measured Procurement Spend
11.1.2 B-BBEE Procurement Spend from
Empowering Suppliers that are at least 51% black 5 10%
owned based on the applicable B-BBEE
Procurement Recognition Levels as a percentage
of Total Measured Procurement Spend
12. SOCIO-ECONMIC DEVELOPMENT QUALIFYING SMALL ENTERPRISES
SPECIALISED SCORECARD
The following table represents the criteria and method used for deriving a score for
socio-economic development under this statement.
Criteria Weighting Compliance
Points Target
12.1 Annual value of all Socio-Economic Development 15 1% of NPAT or
Contributions and Qualifying Socio-Economic 0,1% Annual
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22 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
Development Contributions made by the Measured Revenue/
Entity as a percentage of the target. Allocated budget/
Gross receipts/
Discretional spend
13. IMPORTANT CLARIFICATION
The status of Socio-Economic Development Contributions made to any of the types of
entities in paragraphs one and two under Code series 500 or 605 is not dependent on
such entity's scorecard result, but rather on the nature of the contribution itself and the
identity of that contribution's beneficiaries.
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STAATSKOERANT, 6 MEI 2015 No. 38766 23
CODE SERIES 100: THE MEASUREMENT OF THE OWNERSHIP ELEMENT OF BROAD-
BASED BLACK ECONOMIC EMPOWERMENT
STATEMENT 102:
RECOGNITION OF THE SALE OF ASSETS, EQUITY INSTRUMENTS, AND OTHER
BUSINESSES
Issued under section 9 of the Broad-Based Black Economic Empowerment Amendment Act of
2013
Arrangement of this statement
Para Subject Page
1 Objectives of this statement 3
2 Application 3
3 Key Principles 3
4 Measurement Principles 4
5 Equivalency Percentages 5
6 Recognition of Sale of Assets, Equity Instruments and Business 5
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24 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
1. OBJECTIVES OF THIS STATEMENT
The objectives of this statement are to:
1.1 Set out the conditions where the Sale of Assets, Equity Instruments and other
Businesses will be recognised.
1.2 Set out how the Ownership points will be determined.
2 APPLICATION
2.1 A qualifying transaction in terms of this Statement may involve the sale of:
2.1.1 an Asset;
2.1.2 a Business; or
2.1.3 Equity Instruments in an Entity.
3 KEY PRINCIPLES
3.1 General Principles:
3.1.1 A Seller that has concluded a transaction involving a sale of Asset, Equity
Instrument or Business of a separately identifiable related business, may claim the
benefits provided for in this statement in its own Ownership scorecard.
3.1.2 Where a Seller has claimed benefits in terms of this Statement under its
Ownership scorecard it may not claim benefits under the Enterprise and Supplier
Development element.
3.2 Qualification Criteria:
3.2.1 For Ownership points to be recognised the transaction:
3.2.1.1 must result in the creation of viable and sustainable businesses or business
opportunities in the hands of Black people; and
3.2.1.2 result in the transfer of critical and specialised skills, managerial skills, and
productive capacity to Black people.
3.2.2 A Sale of Asset, Equity Instrument and Business must involve a separately
identifiable related Business which has:
3.2.2.1 no unreasonable limitations or conditions with regards to its clients or customers;
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STAATSKOERANT, 6 MEI 2015 No. 38766 25
and
3.2.2.2 clients, customers or suppliers other than the Seller.
3.2.2.3 B-BBEE shareholders or their successors if the BEE shareholding is the same or
improved holding the asset for a minimum of three years.
3.2.3 Any operational outsourcing arrangements between the Seller and the separately
identifiable related Business must be negotiated at arms-length on a fair and
reasonable basis.
3.2.4 The transaction should be subject to an independent verification value by an
independent expert.
3.2.5 The following transactions do not constitute Qualifying Transactions:
3.2.5.1 transfers of business rights by way of license, lease or other similar legal
arrangements not conferring unrestricted ownership; and
3.2.5.2 sales of franchises by franchisors to franchisees, but includes sales of franchises
from franchisees to other franchisees or to new franchisees.
3.2.5.3 No Qualifying Transaction could be claimed as BEE ownership if a repurchase
transaction is entered into within a three period after transaction implementation,
even if transaction implementation is deferred post year 3. A seller cannot have any
right to enforce such a repurchase.
3.2.5.4 Ownership points are subject to existing contracts between the parties to remain in
effect on market related terms, subject to market norm service levels.
4 MEASUREMENT PRINCIPLES
4.1 The calculation of the Ownership points in terms of the Ownership scorecard
indicator 2.3 under statement 100 must be based on:
4.1.1 the total value of the transaction.
4.1.2 the value of Equity Instruments held by Black people in the separately identifiable
related Business ;
4.1.3 the carrying value of the Acquisition Debt of Black_people in the separately
identifiable related Business ; and
4.2 All calculations in terms of paragraph 4.1.1 to 4.1.3 must use a Standard Valuation
method.
4.3 The Seller, applying Statement 102 for its full or part Ownership compliance, will
have to comply with the provisions of paragraphs 3.3.1.1 and 3.3.3 under
Statement 000 only to the extent of the transaction involving the separately
identifiable related Business.
4.4 The Seller will have to comply with all other Priority elements as required by
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26 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
paragraph 3.3 under Statement 000.
5 EQUIVALENCY PERCENTAGES
5.1 Apply to the Ownership indicators in paragraphs 2.1 and 2.2 of the Ownership
scorecard.
5.2 The Seller must include the Equivalency Percentages in its Ownership scorecard
as if those percentages arose from a sale of Equity Instruments in the Seller to
Black people.
5.3 The Equivalency Percentages for the indicators in paragraphs 2.1 and 2.2 of the
Ownership scorecard can be calculated in terms of Annexe 102 (A).
5.4 Any portion or whole of the separately identifiable related business sold off to Black
people, towards the fulfilment of the Ownership element of B-BBEE in terms of this
Statement 102, is measurable against the total value of the Seller.
5.5 A standard valuation method must be used to determine the values of both the
Seller and the separately identifiable related Business.
5.6 In calculating their Ownership score, the Seller may recognise the Value of the sale
transaction in the separately identifiable related Business to Black people on the
following basis:
5.6.1 the separately identifiable related Business must form part of the same chain of
ownership and be owned by the Seller;
5.6.2 the percentage of the value of the separately identifiable related Business sold off
or held by Black people to the total value of Seller represents the recognisable
Economic Interest held by Black people; and
5.6.3 the percentage of Exercisable Voting Rights ceded to the new owners of the
separately identifiable related Business of the Equity Instruments in the Associate
Entity represents the recognisable right to Exercisable Voting Rights held by Black
people; and
5.6.4 the rights of Ownership in the Equity Instruments are comparable to rights that
would have accrued had the sale/transaction taken place at Seller level.
6 RECOGNITION OF SALE OF ASSET, EQUITY INSTRUMENTS, AND
BUSINESSES
6.1 A Seller seeking recognition of a Qualifying Transaction in its Ownership scorecard
must determine that recognition under paragraph 4 in compliance with paragraph
2.3 of Statement 000:
6.1.1 for the first three years after the transaction the Seller will recognise Ownership
points on date of measurement based on:
6.1.1.1 the value of the Seller; and
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STAATSKOERANT, 6 MEI 2015 No. 38766 27
6.1.1.2 the value of the separately identifiable related Business.
6.1.2 for each year thereafter the third year, as per paragraph 6.1.1, the Seller will
recognise Ownership points on date of measurement based on:
6.1.2.1 the Ownership indicator percentages achieved at the date of measurement in the
third year after the transaction.
6.2 A Seller seeking recognition of a Qualifying Transaction for the indicators in
paragraphs 2.1 and 2.2 of the Ownership scorecard must obtain a review of the
transaction value by an Independent Expert, who is required to opine on the
fairness of the transaction value. Continued recognition for the indicators in
paragraphs 2.1 and 2.2 of the Ownership scorecard is subject to the opinion by the
Independent Expert supporting the transaction value.
6.3 Net Value points recognition for the Seller will be based on the points achieved,
using the principles outlined in paragraph 4 above, in the third year as per the
provisions of this paragraph
6.4 Net Value points will be measured based on the time based Graduation Factor as
provided for in Statement 100.
6.5 Subject to obtaining an opinion on the Net Value calculation by an Independent
Expert, who will be required to opine on whether the Net value calculation is fair
and whether the Graduation Factor has been applied accurately, for each year after
year 3, the Seller will continue to recognise Net Value Ownership points on the
measurement date equal to the Net Value Ownership Points achieved in year 3.
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Annexe 102 (A)
This formula determines the equivalency percentages for the indicators in paragraph
2.1 and 2.2 of the Ownership Scorecard.
A = .B, x D
Where
A is the Equivalency Percentage for each of the indicators in paragraphs 2. 1 and 2.2 of the
Ownership scorecard
B is the value of the Qualifying Transaction to the separately identifiable related Business
determined using a Standard Valuation method
C is the value of the Seller determined using a Standard Valuation method
D is the Indicator Percentages of the separately identifiable related Business
Definition:
Separately Identifiable Related Business is defined, for the purposes of this Statement, as a
business that is related to the Seller by virtue of being a Subsidiary, Joint Venture, Associate,
Business Division, Business Unit, or any other similar related arrangements within the Ownership
structure of the Seller.
© 2015 Department of Trade and Industry Statement 102-6
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STAATSKOERANT, 6 MEI 2015 No. 38766 29
CODE SERIES 100: THE MEASUREMENT OF THE OWNERSHIP ELEMENT OF
BROAD-BASED BLACK ECONOMIC EMPOWERMENT
STATEMENT 103: THE RECOGNITION OF EQUITY EQUIVALENTS FOR
MULTINATIONALS
Issued under section 9 of the Broad-Based Black Economic Empowerment Amended Act
of 2013
Arrangement of this statement
Para Subject Page
1 Objectives of this statement 2
2 Key measurement principles 2
3 Recognition of equity equivalent programmes 2
4 Measurement of equity equivalent 4
5 EEIP ownership points certificate 4
6 Topping-Up 4
7 Partial contributions 4
8 Investments Periods 5
9. Rules for the Administration of the Programme 5
10 Specific rules on multinationals 6
ANNEXE 103(A) 8
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1 OBJECTIVES OF THIS STATEMENT
The objectives of this statement are to:
1.1 Define the means by which Multinationals may apply for recognition of
Equity Equivalent programmes; and
1.2 Specify how contributing towards the Ownership element of Broad Based
Black Economic Empowerment (B-BBEE) by Multinationals is measurable.
2 KEY MEASUREMENT PRINCIPLES
Any Equity Equivalent contributions towards the Ownership element of B-
BBEE made by Multinationals are measurable against the value of their
operations in the Republic of South Africa.
3 RECOGNITION OF EQUITY EQUIVALENT PROGRAMMES
3.1 The Minister may approve certain Equity Equivalent Investment
Programmes (EEIP) after the Multinational has consulted with the sectoral
Line Ministry, Premiers or other stakeholders in any government
department, provincial government or local government with respect to their
equity equivalent proposal.
3.2 Any Equity Equivalent programme forming part of a Sector Code constitutes
an approved programme. The ownership target of the relevant Sector Code
shall apply.
3.3 Equity Equivalent programmes are preferably Sector Specific, but the
Minister may consider requests for approval of programmes that are not
Sector Specific.
3.4 EquityEquivalent programmes may involve projects that support
Government strategic economic development policies and programmes
such as:
3.4.1 The Industrial Policy Action Plan (IPAP) and the Black Industrialists
Development Programme;
3.4.2 The New Growth Path (NGP);
3.4.3 The National Skills Development Strategy; and
3.4.4 The National Development Plan.
3.4.5 Equity Equivalent programmes must promote and advance the following
critical areas:
3.4.5.1 Enterprise and Supplier Development;
3.4.5.2 Research and Development; and
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STAATSKOERANT, 6 MEI 2015 No. 38766 31
3.4.5.3 Critical and core Skills.
3.4.6 Multinationals may have any of the enterprises or natural persons stipulated
under paragraphs 3.4.7 and 3.4.8 below as beneficiaries of their Equity
Equivalent programmes.
3.4.7 If the beneficiaries of any programme stated under 3.4.6 above are
Enterprises, the following criteria will apply:
3.4.7.1 for Exempted Micro Enterprises, the beneficiary must be a level one B-
BBEE compliant enterprise; and
3.4.7.2 for Qualifying Small Enterprises, the beneficiary must be a level one B-
BBEE compliant enterprise.
3.4.8 If the Beneficiaries of any programme state under 3.4.6 above are Natural
Persons or Designated Groups or Co-Operatives or Communities, the following
criteria will apply:
3.4.8.1 The natural persons who are Black people must be at least 75% of the total
beneficiaries;
3.4.8.2 The Economic Interest/Benefit allocated to the beneficiaries must be at
least 75%.
3.4.8.3 In the event that the Beneficiaries are represented by a Co-Operative then
Black women must own more than 30% of the Co-operative.
3.5 Equity Equivalent programme applications must include:
3.5.1 full description of the programme objectives and projected outcomes;
3.5.2 Qualification criteria for participation in the programme;
3.5.3 Timelines for implementation and delivery with milestones against which
progress is measurable; and
3.5.4 Details about the sponsors of the programme.
3.6 Equity Equivalent programmes are limited to Multinationals subject to a
Global Practice.
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32 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
4 MEASUREMENT OF EQUITY EQUIVALENT CONTRIBUTIONS ON THE
OWNERSHIP SCORECARD
4.1 The Ownership Score of a Multinational participating in an Equity Equivalent
programme is calculated in terms of paragraph 4.3. A Multinational
participating in an Equity Equivalent programme cannot receive any points
for ownership under any statement in Code Series 100 other than this
statement.
4.2 Contributions to Equity Equivalent programmes are measured as actual
contributions made using the general principle set out in code series 400
and 500 against any of the following targets:
4.2.1 25% of the value of the South African operations of the Multinational,
determined using a Standard Valuation Method; or
4.2.2 4% of Total Revenue from its South African operations annually over the
period of continued measurement.
4.3 The Ownership Score under an Equity Equivalent programme using either
of the targets in paragraph 4.2 must be calculated in terms of Annexe 103
(A).
5 EEIP OWNERSHIP POINTS CERTIFICATE
5.1 The EEIP Ownership Points Certificate awarded in terms of this statement
will be valid for an investment period agreed upon in terms of paragraph 9
below.
6 TOPPING-UP
6.1 If a Multinational wants to retain its EEIP Ownership Points at the date of
expiry of its Certificate in terms of paragraph 5 above, then the Multinational
will have to reinvest and make an additional contribution into a new Equity
Equivalent programme using the Topping-Up principle as illustrated in the
Technical Assistance Guide of the B-BBEE Codes.
7 PARTIAL CONTRIBUTIONS
7.1 Multinationals can make partial contributions to the EEIP on proportional
ratio basis for the recognition of Ownership points. The Ownership points
will be awarded and determined in terms of the provisions of both
Statement 100 and Statement 103.
7.2 The minimum partial contributions that can be made towards EEIP, as
allowed in terms of paragraph 7.1 above, must be at least 40% of the
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STAATSKOERANT, 6 MEI 2015 No. 38766 33
compliance target for the Ownership scorecard.
8 INVESTMENT PERIODS
8.1 Total contributions that are more than R100 million can be considered for
an investment period of up to 10 years;
8.2 Total contributions between R75 million and R100 million can be
considered for an investment period of up to seven years;
8.3 Total contributions between R50 million and R75 million can be considered
for an investment period of up to five years; and
8.4 Total contributions that are less than R50 million can be considered for an
investment period of up to three years.
9 RULES FOR THE ADMINISTRATION OF THE PROGRAMME
9.1 If the administration of the programme is outsourced then the rules stated
below will apply, where applicable:
9.1.1 the economic interest and voting rights of the administrator must be at least
51% Black owned;
9.1.2 the administrator must be B-BBEE compliant and be a superior B-BBEE
contributor;
9.1.3 the administration fee for programme must not exceed 15%;
9.1.4 the administrator must possess the appropriate and necessary skill and
experience;
9.1.5 the programme manager responsible for overseeing the implementation of
the programme by the administrator must be in possession of the B-BBEE
Management Development Programme;
9.1.6 the programme manager must sign off on all reports to the multinational
and/or to Department of Trade and Industry( " the dti");
9.1.7 all goods and services procured for the purposes of implementing this
programme must be sourced and procured from Service Providers that are
B-BBEE compliant with a minimum B-BBEE Level Four; and
9.1.8 the dti reserves the right to request the B-BBEE verification certificate of
both the administrator and the Service Provider(s) of goods and services
procured in terms of paragraph 9.1.7 above.
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9.2 If the administration of the programme is located within the Multinational,
then the rules stated below will apply:
9.2.1 the staff assigned to the administration of the programme must possess the
appropriate and necessary skill and experience;
9.2.2 the programme manager responsible for overseeing the implementation of
the programme must be in possession of the B-BBEE Management
Development Programme;
9.2.3 the administration fee for the programme must not exceed 15%;
9.2.4 all goods and services procured for the purposes of implementing this
programme must be sourced and procured from Service Providers that are
B-BBEE compliant with a minimum B-BBEE Level Four;
9.2.5 the programme manager and the CEO must sign off on all reports to the
dti; and
9.2.6 the dti reserves the right to request the B-BBEE verification certificate of
the Service Provider(s) of goods and services procured in terms of
paragraph 9.2.4 above.
10 SPECIFIC RULES ON MULTINATIONALS
10.1 Any contributions towards the Ownership element of B-BBEE made by
Multinationals, in terms of this Statement, are measurable against the value
of their operations in the Republic of South Africa.
10.2 Incalculating their Ownership score, Multinationals and South African
Multinationals must apply the Exclusion Principle to any portion of the
business value of their South African operations gained from non-South
African sources. A Standard Valuation Method must be used to determine
the value of the South African operations.
10.3 In calculating their Ownership score Multinationals may recognise sales of
Equity Instruments in non-South African companies to Black people on the
following basis:
10.3.1 the non-South African company and the Multinational in South Africa must
form part of the same chain of ownership and be owned by the same
ultimate parent company; and
10.3.2 the transaction must comply with South African exchange control
requirements; and
10.3.3 the percentage of the value of the Equity Instruments (i.e. in the Non-South
African company) sold to or held by South African Black people in the non-
South African company to the value of the Multinational based in South
Africa represents the recognisable Black claim to Economic Interest; and
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10.3.4 the percentage of Exercisable Voting Rights ceded to the buyers of the
Equity Instruments in the Multinational represents the recognisable Black
right to Exercisable Voting Rights; and
10.3.5 The rights of Ownership in the Equity Instruments are comparable to rights
that would have accrued to Black people had the Equity Instrument been
held in the Multinational in South Africa.
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ANNEXE 103(A)
This formula is for determining the Ownership Score under an Equity
Equivalent Programme using either of the targets in paragraph 4.2, where the
contribution is made upfront on a once off basis.
A= Bx25
C
Where
A is Ownership points of the Multinational in any year arising from its equity
equivalent contribution
B is the value of contributions made
C is the financial value of the target of 4% of total revenue from its South African
operations annually over the period of continued measurement;
This formula is for determining the Ownership Score under an Equity
Equivalent Programme using either of the targets in paragraphs 4.2, where the
contribution is made on an annual basis towards a 10 year target is as follows:
))(25
A
C 25%x D
Where
A is Ownership points of the Multinational in any year arising from its equity
equivalent contribution
B is the value of total contributions made as at the date of measurement
C is the financial value of the target in paragraph 4.2.1 or the 10 year value of
contributions to be made over the life of this statement
D is the time-based graduation factor outlined below:
10% for the first year after the commencement of statement 000.
20% for the second year after the commencement of statement 000.
40% from the first day of the third year after the commencement date of
statement 000 to the last day at the end of the fourth year after the
commencement date of statement 000.
60% from the first day of the fifth year after the commencement date of
statement 000 to the last day at the end of the sixth year after the
commencement date of statement 000.
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STAATSKOERANT, 6 MEI 2015 No. 38766 37
80% from the first day of the seventh year after the commencement date of
statement 000 to the last day at the end of the eighth year after the
commencement date of statement 000.
100% from the first day of the ninth year after the commencement date of
statement 000 to the last day at the end of the 10th year after the
commencement date of statement 000.
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CODE SERIES 600: MEASUREMENT FRAMEWORK FOR
QUALIFYING SMALL ENTERPRISES (QSE'S)
Issued under section 9 of the Broad-Based Black Economic Empowerment Amendment Act of 2013
Arrangement of this statement
Para Subject Page
1 Objective of this Statement 2
2 Eligibility as a QSE 2
3 Qualifying Small Enteprise Scorecard 2
5 Statement 601: Ownership for QSE's 4
6 Statement 602: Management Control for QSE's 5
7 Statement 603: Skills Development for QSE's 6
8 Statement 604: Enterprise and Supplier development for QSE's 8
9 Statement 605: Socio-Economic Development for QSE's 11
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STATEMENT 600: THE FRAMEWORK FOR THE QUALIFYING SMALL ENTERPRISE
SCORECARD OBJECTIVES OF THIS STATEMENT
OBJECTIVES OF THIS STATEMENT
1.1 The objectives of this statement are to:
1.1.1 specify the Elements of Broad Based Black Economic Empowerment (B-BBEE)
measurable under the Qualifying Small Enterprise (QSE) Scorecard;
1.1.2 specify the QSE Scorecard;
1.1.3 specify the principles in the Generic Statements (100 - 500) applicable to Qualifying
Small Enterprises.
1.1.4 Specify the scorecard for measuring the Qualifying Small Enterprise (QSE) contributions
to B-BBEE.
1.1.5 The key measurement principles for measuring QSE contribution to B-BBEE are
specified under Statement 000: General Principles and the Generic Scorecard unless
stated in this statement.
2 ELIGIBILITY AS A QSE
2.1 Any enterprise with an annual Total Revenue of between R10 million and R50 million
qualifies as a QSE, if its qualification does not result from circumvention of the codes.
3 THE QUALIFYING SMALL ENTERPRISE SCORECARD
3.1 The following table represents the QSE Scorecard and contains the Elements of the
scorecard and the weightings for each element:
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40 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
Element Weighting Code
Series
Framework 600
Ownership 25 points 601
Management control 15 points 602
Skills Development 25 points 603
Enterprise and 30 points 604
Supplier
Development
Socio-Economic 5 points 605
Development
3.2 The Weighting points in respect of any element in the scorecard represent the maximum
number of points possible for each of the criteria.
3.3 The B-BBEE compliance of a QSE must be determined in accordance with code 000.
3.4 Any matter concerning the application of the QSE scorecard that is not dealt with explicitly in
this scorecard must be dealt with in terms of codes 100-500.
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2. STATEMENT 601: OWNERSHIP FOR QSE
2.1 THE QSE OWNERSHIP SCORECARD
The following table represents the indicators and method for calculating a score for ownership
under this statement:
Category and Ownership Indicator Weighting Compliance
points Target
2.1.1 Voting rights:
2.1.1.1 Exercisable Voting Rights in the Enterprise in the hands of 5 25%+1 vote
black people
2.1.1.2 Exercisable Voting Rights in the Enterprise in the hands of 2 10%
black women
2.1.2 Economic Interest:
2.1.2.1 Economic Interest of black people in the Enterprise 5 25%
2.1.2.2 Economic Interest of black women in the Enterprise 2 10%
2.1.2.3 New Entrants or Black Designated Groups 3 2%
2A.3 Realisation points:
2.1.3.1 Net Value 8 Refer to
Annex 100 (E)
2.2 KEY MEASUREMENT PRINCIPLES AND SUB-MINIMUM REQUIREMENTS
2.2.1 General principles:
2.2.2 Key Measurement Principles and sub-minimum requirements under statement 100 are
applicable to this statement.
2.2.3 Any interpretation or calculation of a QSE score for ownership must be made in accordance
with statement 100.
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3. STATEMENT 602: MANAGEMENT CONTROL FOR QSE
3.1 THE QSE MANAGEMENT CONTROL SCORECARD
3.1.1 The following table represents the indicators and method for calculating a score for management
control under this statement:
Criteria Weighting Compliance Target
points
3.1.1.1 Executive Management
3.1.1.1.1 Black representation at Executive Management 5 50%
3.1.1.1.2 Black female representation at Executive 2 25%
Management.
3.1.1.2 Senior, Middle and Junior Management
3.1.1.2.1 Black representation at Senior, Middle and 6 60%
Junior management
3.1.1.2 .2 Black female representation at Senior, Middle 2 30%
and Junior management
3.2 KEY MEASUREMENT PRINCIPLES
3.2.1 For the purpose of the QSE scorecard, executive management include other executive
management as described under the general principles of statement 200.
3.2.2 The demographic representation of black people as defined in the Regulations of the
Employment Equity Act and Commission on Employment Equity report are not applicable to
the QSE Scorecard.
3.2.3 A measured entity must use the recent payroll data in calculating its score under the
management control scorecard.
ANNEXE 602 ( A)
Calculating compliance
1.1.1 The calculation of the management indicators provided for in paragraph 3.1 is as follows:
A = -B x D
C
Where
A is the score for management indicator in paragraph 3.1
B is the number of the measurable category of black Executive ( or black female Executive) or black
Senior, Middle and Junior Management ( or black female Senior, Middle and Junior Management) as
a percentage of the total number of Executive Management or Senior, Middle and Junior
Management of the Measured Entity
C is the compliance target for the applicable criteria as referred to in the scorecard under statement 602
D is the Weighting points for the applicable criteria as referred to in the scorecard under statement 602
© 2015 Department of Trade and Industry QSE COGP-5
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STAATSKOERANT, 6 MEI 2015 No. 38766 43
4 STATEMENT 603: SKILLS DEVELOPMENT FOR QSE
4.1 THE QSE SKILLS DEVELOPMENT SCORECARD
4.1.1 The following table represents the indicators and methods for calculating a score under this
statement:
41.1.1 Skills Development Element Weighting points Compliance Target
4.1.1.1.1 Skills development expenditure on learning 15 3%
programmes specified in the learning programme
matrix for black people as a percentage of
leviable amount.
4.1.1.1.2 Skills development expenditure on learning 7 1%
programmes specified in the learning programme
matrix for black female as a percentage of leviable
amount.
4.1.1.1.3 Skills development expenditure on learning
programmes specified in the learning programme
matrix for black people with disabilities as a 3 0.15
percentage of leviable amount.
Bonus Points
4.1.1.2 Number of black people absorbed by the 5 100%
measured entity and industry at the end of the
learning programme.
4.2 KEY MEASUREMENT PRINCIPLES AND SUB-MINIMUM REQUIREMENTS
4.2.1 Sub-minimum requirements and Discounting principle under Statement 300 are applicable to
this statement.
4.2.2 The demographic representation of black people as defined in the Regulations of the
Employment Equity Act and the Commission on Employment Equity report are not applicable
to the QSE Scorecard.
4.2.3 Where applicable, the following criteria must be fulfilled in order for the Measured Entity to
receive points on the Skills Development scorecard :
4.2.4 Workplace Skills Plan, an Annual Training Report and Pivotal Report which are SETA
approved; and
4.2.5 Implementation of Priority Skills programme generally, and more specifically for black people.
4.2.6 The learning programme matrix under code series 300 is applicable to this statement.
4.2.7 The learning programme matrix that explains the method of measurement of the criteria under
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44 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
the skills development scorecard must be in accordance with code series 300.
4.2.8 This equation explains the method of measurement of the criteria in the Skills Development
scorecard:
A = -cx D
Where
A is the score for measurement category indicator
B is the percentage of spend in the measurement category that are black people or black
female
C is the target for the applicable criteria as referred to in the scorecard under statement 603
D is the Weighting points for the applicable criteria as referred to in the scorecard under
statement 603
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STAATSKOERANT, 6 MEI 2015 No. 38766 45
5 STATEMENT 604: ENTERPRISE AND SUPPLIER DEVELOPMENT FOR QSE
5.1 THE QSE ENTERPRISE AND SUPPLIER DEVELOPMENT SCORECARD
5.1.1 The following table represents the criteria for deriving a score for Enterprise and Supplier
Development under this statement.
Criteria Weighting Compliance targets
points
5.1.1.1 PREFERENTIAL PROCUREMENT
5.1.1.1.1 B-BBEE Procurement Spend from all Empowering 15 60%
Suppliers based on the B-BBEE Procurement
Recognition Levels as a percentage of Total
Measured Procurement Spend
5.1.1.1.2 B-BBEE Procurement Spend from Empowering
Suppliers that are at least 51% black owned based 5 15%
on the applicable B-BBEE Procurement Recognition
Levels as a percentage of Total Measured
Procurement Spend
5.1.1.2 Bonus Points
B-BBEE Procurement Spend from Designated 1 1%
Group suppliers that are at least 51% black owned
based on the B-BBEE Recognition Level.
5.1.1.3 SUPPLIER DEVELOPMENT
5.1.1.3.1 Annual value of all Supplier Development
5 1% of Net Profit After Tax
Contributions made by the Measured Entity as a
(N PAT)
percentage of the target.
5.1.1.4 ENTERPRISE DEVELOPMENT
5 1%ofN PAT
5.1.1.4.1 Annual value of Enterprise Development
Contributions and Sector Specific Programmes
made by the Measured Entity as a percentage of
the target.
5.1.1.5 Bonus Points
5.1.1.5.1 Bonus point for graduation of one or more
Enterprise Development beneficiaries to graduate to
the Supplier Development level.
5.1.1.5.2 Bonus point for creating one or more jobs directly
as a result of Supplier Development and Enterprise
Development initiatives by the Measured Entity.
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46 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
5.2 KEY MEASUREMENT PRINCIPLES AND SUB-MINIMUM REQUIREMENTS
5.2.1 Key Measurement Principles and sub-minimum requirements under statement 400 are
applicable to this statement.
5.2.2 In calculating the compliance of a measured entity the following Net Profit After Tax
(NPAT) target applies unless:
5.2.2.1 the company does not make a profit in the last year or on average over the last five years.
5.2.2.2 the net profit margin is less than a quarter of the norm in the industry.
5.2.3. If the turnover is to be used, the target will be set at:
5.2.3.1 1% x indicative profit margin (NPAT/turnover) x turnover.
5.2.3.2 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.
5.2.4 Any interpretation or calculation of a QSE's score for Enterprise and Supplier Development
must be made in accordance with statement 400.
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STAATSKOERANT, 6 MEI 2015 No. 38766 47
ANNEXE 606 (A) Benefit Factor Matrix
Qualifying Contribution type Contribution Amount Benefit Factor
Grant and Related Contributions
Grant Contribution Full Grant Amount 100%
Direct Cost incurred in supporting enterprise Verifiable Cost (including both 100%
development monetary and non-monetary)
Discounts in addition to normal business practices Discount Amount (in addition to 100%
supporting enterprise development normal business discount)
Overhead Costs incurred in supporting enterprise Verifiable Costs (including both 80%
development (including people appointed in monetary and non-monetary)
enterprise development)
Loans and Related Contributions
Interest-Free Loan with no security requirements Outstanding Loan Amount 100%
supporting enterprise development
Standard Loan to Black Owned EME and QSEs Outstanding Loan Amount 70%
Standard Loan provided to other Beneficiary Outstanding Loan Amount 60%
Enterprises
Guarantees provided on behalf of a Beneficiary entity Guarantee Amount 3%
Lower Interest Rate Outstanding loan amount Prime Rate - Actual
Rate
Equity Investments and Related Contributions
Minority Investment in Black Owned EME and QSEs Investment Amount 100%
Minority Investment in Other Beneficiary Enterprises Investment Amount 80%
Enterprise Development Investment with lower Investment Amount Dividend Rate of
dividend to financier Ordinary Shareholders -
Actual Dividend Rate of
Contributor
Contributions made in the form of human resource capacity
Professional services rendered at no cost and Commercial hourly rate of 80%
supporting enterprise development professional
Professional services rendered at a discount and Value of discount based on 80%
supporting enterprise development commercial hourly rate of
professional
Time of employees of Measured Entity productively Monthly salary divided by 160 80%
deployed in assisting beneficiaries
Other Contributions
Shorter payment periods for 1.1.2 of this statement Percentage of invoiced amount Percentage being 15
(Supplier Development) multiplied by 15% (being an days less the number of
approximation of the cost of days from invoice to
short term funding) payment
Maximum points that
can be scored 15% of
10points
5.3 THE BENEFIT FACTOR MATRIX
The Minister may from time to time, by notice in the gazette, revise or substitute the Benefit Factor
Matrix. Any changes will only be applicable to Compliance Reports prepared for a Measured Entity in
respect of the first 12-month period following the gazetting of a revision or substitution.
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48 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
6. STATEMENT 605: SOCIO-ECONOMIC DEVELOPMENT CONTRIBUTIONS FOR QSE's
6.1 THE QSE SOCIO-ECONOMIC DEVELOPMENT (SED) SCORECARD
6.1.1 In calculating the compliance of a Measured Entity the following Net Profit After Tax (NPAT) target
applies unless:
6.1.1.1 The NPAT or average target applies unless:
6.1.1.2 the company does not make a profit in the last year or on average over the last five years.
6.1.1.3 the net profit margin is less than a quarter of the norm in the industry.
6.1.2 If the Turnover is to be used, the target will be set at:
6.1.2.1 1% x Indicative Profit Margin (NPAT/Turnover) x Turnover.
6.2 The following table represents the criteria and method used for deriving a score for socio-economic
development under this statement:
Criteria Weighting Compliance
Points Target
1% of NPAT
Annual value of all Socio-Economic Development Contributions
and Qualifying Socio-Economic Development Contributions made
by the Measured Entity as a percentage of the target.
6.3 KEY MEASUREMENT PRINCIPLES
6.3.1 Measured Entities receive recognition for any Qualifying Contributions that are quantifiable as
a monetary value using a Standard Valuation Method.
6.3.2 Socio-Economic Development Qualifying Contributions of any Measured Entity are
recognisable annually;
6.3.3 No portion of the value of any Qualifying Contribution that is payable to the beneficiary after
the date of measurement can form part of any calculation under this statement.
6.3.4 Payments made by the Measured Entity to third parties to perform social development on the
Measured Entity's behalf may constitute a SED Contribution.
6.3.5 The recognition of SED Contributions must be determined in accordance with code 500.
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STAATSKOERANT, 6 MEI 2015 No. 38766 49
ANNEXE 605 (A)
Qualifying Contribution type Contribution Amount Benefit Factor
Grant and Related Contributions
Grant Contribution Full Grant Amount 100%
Direct Cost incurred in supporting Verifiable Cost (including both 100%
socio-economic development or monetary and non-monetary)
sector specific initiatives
Discounts in addition to normal Discount Amount (in addition 100%
business practices supporting socio- to normal business discount)
economic development or sector
specific initiatives
Overhead Costs incurred in Verifiable Costs (including 80%
supporting socio-economic both monetary and non-
development or sector specific monetary)
initiatives
Contributions made in the form of human resource capacity
Professional services rendered at no Commercial hourly rate of 80%
cost supporting socio-economic professional
development or sector specific
initiatives
Professional services rendered at a Value of discount based on 80%
discount supporting socio-economic commercial hourly rate of
development or sector specific professional
initiatives
Time of employees of Measured Total annual cost to company 80%]
Entity productively deployed in of the employee divided 1095
assisting beneficiaries and
supporting socio-economic
development or sector specific
initiatives
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ANNEXE 605 [ (B)
7. MEASUREMENT OF QUALIFYING CONTRIBUTIONS
7.1 Qualifying Contributions are measurable on the following basis:
A = -B x D
C
Where
A is the score achieved in respect of the Qualifying Contributions made by the Measured
Entity
B is the value of all Qualifying Contributions made by the Measured Entity measured from the
commencement or the statement or the Inception Date to the date of measurement
C is compliance target in respect of the Qualifying Contributions as specified in the scorecard
for statement 605
D is the Weighting points allocated to the criteria under the scorecard for statement 605
8. THE BENEFIT FACTOR MATRIX
The Minister may from time to time, by notice in the gazette, revise or substitute the Benefit Factor
Matrix. Any changes will only be applicable to Compliance Reports prepared for a Measured
Entity in respect of the first 12-month period following the gazetting of a revision or substitution.
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56 No. 38766 GOVERNMENT GAZETTE, 6 MAY 2015
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