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Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Black Economic Empowerment

Code Series 700 : Measurement of Socio-Economic Development Elements of Broad-Based Black Economic Empowerment

Statement 700 : The General Principles for Measuring the Socio-Economic Development Element

2. The SED Scorecard


2.1) The NPAT or average target applies unless:


2.1.1) the company does not make a profit last year or on average over the last five years;


2.1.2) the net profit margin is less than a quarter of the norm in the industry.


2.2) If the Turnover is to be used, the-target will be set at:


2.2.1) 1% x Indicative Profit Margin (NPAT/Turnover) x Turnover;


2.2.2) 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.


2.3) The following table represents the criteria and method used for deriving a score for Socio- Economic Development under this statement:



Weighting Points

Compliance Target

Average annual value of all Enterprise Development Contributions by the Measured Entity as a percentage of the target


1% of NPAT


2.4) The weighting points in the SED scorecard represent the maximum number of points possible for each of the criteria.