The Generic Scorecard Structure

 

The B-BBEE Codes is legislation that requires practical implementation by measured entities.

 

The Revised B-BBEE Codes were gazetted on 11 October 2013 (GG 36928), with further subsequent Revisions and clarification notices having been subsequently gazetted.

 

As brand new legislation, there is very little precedent as to how many of the provisions will be interpreted. In addition, there are a number of clauses in the Revised Codes and Scorecard which seemingly contain errors, omissions/ and or that require clarification.

 

Accordingly, some of the information and methodology contained in the Helpfiles and Scorecard Software are based on BEE123’s interpretation, using the substance over form principle and inferring our opinion as the DTI’s intention behind the legislation. BEE123 accordingly bears no liability in relation to same. Please check with your verification agency as to their interpretation.

 

Amendments to the B-BBEE Codes were gazetted on 31 May 2019.

 

The following sections have been amended:

• Code Series 000 - Framework for measuring B-BBEE
• Code Series 300 - Skills Development
• Code Series 400 - Enterprise & Supplier Development
• Schedule 1 - Glossary

 

These amendments are not applicable to Sector Codes. However, where matters are silent within B-BBEE Sector Codes of Good Practice, the amended provisions of Code Series 000, Code Series 300, Code Series 400 and Schedule 1 will be applicable for implementation.

 

These amendments will become effective 6 months following their gazetting, but a measured entity can elect early adoption and be rated on the Amended Codes from 31 May 2019.

 

For practical purposes this means:

• Should your BEE audit be prior to 30 November 2019 the current version of the Codes will still apply,
• Should your BEE audit take place after 1 December 2019 this amended version of the Codes will then apply.

 

• are entities with an annual turnover of above R 50 million.
• are measured in accordance with the Generic scorecard as contained in Code Series 100-500.
• must include all 5 of the BEE Elements (detailed below) in order to calculate their overall BEE score.

 

Ownership
Measurement Category & Criteria		Weighting Points	Compliance Target
Voting Rights	Exercisable Voting Rights in the Entity in the hands of Black people.	4	25% + 1 Vote
	Exercisable Voting Rights in the Entity in the hands of Black women.	2	10%
Economic Interest	Economic Interest in the Entity to which Black People are Entitled.	4	25%
	Economic Interest in the Entity to which Black women are entitled.	2	10%
	Economic Interest of any of the following Black Natural People in the Measured Entity: Black Designated groups; Black participants in Employee Share Ownership Programmes; Black people in Broad Based Ownership Schemes; Black Participants in Co-operatives	3	3%
	New Entrants	2	2%
Realisation Points	Net Value	8	Refer to Annexure C
TOTAL		25

 

Management Control
Measurement Category & Criteria		Weighting Points	Compliance Targets
Board Participation	Exercisable voting rights of black board members as a percentage of all board members.	2	50%
	Exercisable voting rights of black female board members as a percentage of all board members.	1	25%
	Black Executive directors as a percentage of all executive directors.	2	50%
	Black female Executive directors as a percentage of all executive directors.	1	25%
Other Executive Management	Black Executive Management as a Percentage of all executive directors.	2	60%
	Black female Executive Management as a percentage of all executive directors.	1	30%
Senior Management	Black employees in Senior Management as a percentage of all senior management.	2	60%
	Black female employees in Senior Management as a percentage of all senior management.	1	30%
Middle Management	Black Employees in Middle Management as a percentage of all middle management.	2	75%
	Black female employees in Middle Management as a percentage of all middle management.	1	38%
Junior Management	Black Employees in Junior Management as a percentage of all junior management.	1	88%
	Black female employees in Junior Management as a percentage of all junior management.	1	44%
Employees with disabilities	Black employees with disabilities as a percentage of all employees.	2	2%
TOTAL		19

 

Skills Development
Measurement Category & Criteria		Weighting points	Compliance Target
Skills Development Expenditure	Skills Development Expenditure on Learning Programmes specified in the Learning Programme Matrix for black people as a percentage of Leviable Amount.	6	3.5%
	Skills Development Expenditure on Bursaries for Black Students at Higher Education Institutions	4	2.5%
	Skills Development Expenditure on Learning Programmes specified in the Learning Programmes Matrix for black employees with disabilities as a percentage of Leviable Amount.	4	0.3%
Learnerships, Apprenticeships and Internships	Number of black people participating in Learnerships, Apprenticeships and Internships as a percentage of total employees.	6	5%
Bonus Points	Number of black people absorbed by the Measured and Industry Entity at the end of the Internship, Learnership and Apprenticeship Programme.	5	100%
TOTAL		20	5 Bonus

 

Enterprise and Supplier Development
Measurement Category & Criteria		Weighting Points	Compliance Targets
Preferential Procurement	B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend.	5	80%
	B-BBEE Procurement Spend from all Empowering Suppliers that are Qualifying Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a Percentage of Total Measured Procurement Spend.	3	15%
	B-BBEE Procurement Spend from all Exempted Micro-Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend.	4	15%
	B-BBEE Procurement Spend from Empowering Suppliers that are at least 51% black owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of total Measured Procurement Spend.	11	50%
	B-BBEE Procurement Spend from Empowering Suppliers that are at least 30% black women owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend.	4	12%
Bonus Points	B-BBEE Procurement Spend from Designated Group Suppliers that are at least 51% Black owned.	2	2%
Supplier Development	Annual value of all Supplier Development Contributions made by the Measured Entity as a percentage of the target.	10	2% of NPAT
Enterprise Development	Annual value of Enterprise Development Contributions and Sector Specific Programmes made by the Measured Entity as a percentage of the target.	5	1% of NPAT
Bonus Points	Bonus point for graduation of one or more Enterprise Development beneficiaries to graduate to the Supplier Development level.	1
	Bonus points for creating one or more jobs directly as a result of Supplier Development and Enterprise Development initiatives by the Measured Entity.	1
TOTAL		42	4 Bonus

 

Socio-Economic Development
Measurement Category & Criteria		Weighting Points	Compliance Target
Bonus Points	Annual value of all Socio-Economic Development Contributions by the Measured Entity as a percentage of the target.	5	1% of NPAT
TOTAL		5

 

GRAND TOTAL

111

9 Bonus

 

The following table explains each tab in the software:

 

Element	Indicator
Ownership	The Ownership element measures the equity held by black people in the entity in terms of voting rights, economic interest and realisation points. The Ownership element is a Priority Element
Management Control	The Management Control element measures black participation at board, executive level and senior, middle and junior management levels and the employment of black disabled staff.
Skills Development	The Skills Development element is designed to improve the skills set of black people and measures skills development expenditure on black people and participation in learnership, internship and apprenticeship programmes. The Skills Development element is a Priority Element.
Enterprise and Supplier Development	The Enterprise and Supplier Development element measures the entity's contributions in relation to the following sub-elements:   Preferential Procurement measures the empowerment levels of the entity's suppliers in terms of the procurement of goods and services.   Enterprise Development and Supplier Development measures the entity’s contribution towards the upliftment, development, sustainability, financial and operational independence of Enterprise and Supplier Development Beneficiaries.   The Enterprise and Supplier Development element is a Priority Element
Socio Economic Development	This Socio Economic Development element measures the entity’s contribution towards initiatives or organisations that enhance the ability of black people who remain non participants in the economic mainstream to be included in participating in the economy in a sustainable manner.
Summary	The Summary provides a consolidated view of the achievements in relation to each of the 5 elements, as well as the cumulative total points achieved and corresponding BEE Status Level.

 

An entity’s BEE status level is determined in accordance with the cumulative score it receives in respect of the aforementioned elements.

 

BEE Status	Qualification	BEE Recognition Level
Level 1 Contributor	≥100 points	135%
Level 2 Contributor	≥95 but <100 points	125%
Level 3 Contributor	≥90 but <95 points	110%
Level 4 Contributor	≥80 but <90 points	100%
Level 5 Contributor	≥75 but <80 points	80%
Level 6 Contributor	≥70 but <75 points	60%
Level 7 Contributor	≥55 but <70 points	50%
Level 8 Contributor	≥40 but <55 points	10%
Non-Compliant Contributor	<40 points	0%

 

The Codes have defined the following elements as the Priority Elements in terms of transformation imperatives:

 

1. Ownership

• 40% subminimum on Net Value points

2. Skills Development

• 40% subminimum on Skills Development element points

3. Enterprise and Supplier Development

• 40% subminimum on Preferential Procurement points
• 40% subminimum on Enterprise Development points
• 40% subminimum on Supplier Development points

 

A Generic Entity is required to achieve the 40% subminimum in relation to all 3 of the above Priority Elements (including all 3 of the 40% subminimum targets under the Enterprise and Supplier Development element).

 

Should a Generic Entity not achieve the required 40% subminimum in relation to all 3 of the above Priority Elements its B-BBEE Status will be discounted by 1 level.

 

Bonus Points are totally excluded from the determination of the sub-minimums targets. In addition, any bonus points earned will not be regarded when determining if the measured entity has met the sub-minimum targets.

 

General

 

• EMEs and QSEs can only use Flow-through for enhanced recognition

 

Skills Development

 

• A new category has been added for bursaries for black students at Higher Education Institutions (4 points, Target =2.5% of leviable amount)

• Stipends and all related costs for Higher Education bursaries are recognised at 100%.

• Reduction for Skills Development Expenditure (6 points, Target =3.5% of leviable amount)

• Unemployed headcount training sub-category removed from the Scorecard

• Unemployed and Employed Learnerships, Apprenticeships and Internships combined into a single category (6 points, Target =5% of total employees).

• The Definition of Absorption has been amended to exclude ‘further education and training’ as absorption. In addition only a ‘long term’ contract will be recognised as absorption (now defined as ‘… until retirement’).

• Limitation for Category F and G training has increased from 15% to 25%.

 

Enterprise and Supplier Development

 

• The target for 51% black owned suppliers has been increased from 40% to 50% and the points increased from 9 to 11 points.

• Procurement from 51% black owned Generic suppliers where there had been historic expenditure whilst such supplier was an EMEs or QSEs, allows for recognition under the EME or QSE category, for a period of up to 5 years.

• Enhanced recognition changes:

• First time black owned suppliers have been removed.

• 51% black owned suppliers (flow through) attract a 1.2 enhanced recognition

• 51% black owned Generic entities (flow through) can qualify as an ESD beneficiary for a period of up to 5 years, if they were previously EMEs or QSEs beneficiaries of the measured entity.

• In the ESD Matrix Guarantees have increased from 3%-50%