IntroductionEmpowerdex (Pty) Ltd was established in 2001, by Vuyo Jack and Chia Chao Wu.Our Mission is to provide support to both the public and private sectors to acceleratethe implementation of broad-based black economic empowerment in SouthAfrica, thereby helping to bridge the gap between the countrys first and secondeconomies.Empowerdex was a pioneer of the rating methodology, having worked closely with theDepartment of Trade and Industry in developing the framework for BEE and involved inthe drafting of the Codes of Good practice.Based in Johannesburg, with offices in JHB, Pretoria, Cape Town, Durban, and reachin all provinces through partnerships with external analysts.Founding member of the Association of BEE Verification Agencies, and accredited bythe South Africa National Accreditation System.
Experience•Our research division has worked in the development of sectorcharters, and with particular industries on the assessment of BEE inthose industries, including: •Produce the Top Empowerment Companies with the Financial Mail annually since 2003. •Were involved in the drafting of the Codes, Tourism Charter , AgriBEE, as well as the Liquor Charter, which is not finalised as yet. •Completed studies for the Department of Energy on the progress of the petroleum industry in implementing BEE, as well as a similar study for the CASA for the state of BEE in the Casino industry.
Some Rated ClientsStandard Bank SA Hollard Ltd Multinationals rated by EmpowerdexAfrican Oxygen Ltd (Afrox) Nampak Ltd Toyota UnileverGijima AST Bidvest Ltd Siemens VolvoMassmart Ltd Barloworld Ltd DHL AccentureOceana Ltd GlenRand MIB Chevron SA AdidasMobile Telephone Network (MTN) FoschiniAdcorp Ltd Omnia LtdAspen Pharmaceuticals African BankSappi Ltd Alexander ForbesLiberty Holdings LtdProfessional Firms rated by Empowerdex Other Rated clients:PriceWaterHouse Coopers JP Morgan South African Airways Astral FoodsErnst and Young Deloitte Tsogo Sun ACSABowman Gilfillan KPMG Shanduka Nashua MobileWerkmens Deneys Reitz Mineworkers Investment Comp. Primedia OutdoorWebber Wentzel RMB Asset Man Rhodes Food Group LandbankCliffe Dekker Hofmeyr Eversheds Group 4 Securicor Mweb Fidelity Security Services McCarthy Butterworths Publishers Bateleur Protea Hotels Southern Sun Eskom Holdings Limited Mweb
Objectives of BEE Equitable Economic Opportunities Emerging black Ownership middle class & And Management investors The Opportunity Barrier Affirmative Enterprise Black Procurement Development entrepreneurs The Business Barrier Skills Black workers, Development & professionals, Employment Equity graduates, school- leavers The Skills Barrier Corporate Employment Equity/Job creation Social Investment Black unemployed & rural poor The Poverty Barrier
INTENTION OF BEE• Increase the level of participation by black people in mainstream Mainstream Economy economy Mainstream Economy• Increase the real market in the SA economy Upliftment BEE• Increase income through resultant economic growth Second Economy More economic participants Second Economy Higher Economic Growth
BEE Recognition Levels BEE Status Qualification BEE procurement recognition levelLevel One Contributor ≥100 points on the Generic 135% ScorecardLevel Two Contributor ≥85 but <100 points on the 125% Generic ScorecardLevel Three Contributor ≥75 but <85 on the Generic 110% ScorecardLevel Four Contributor ≥65 but <75 on the Generic 100% ScorecardLevel Five Contributor ≥55 but <65 on the Generic 80% ScorecardLevel Six Contributor ≥45 but <55 on the Generic 60% ScorecardLevel Seven Contributor ≥40 but <45 on the Generic 50% ScorecardLevel Eight Contributor ≥30 but <40 on the Generic 10% ScorecardNon Compliant Contributor <30 on the Generic Scorecard 0%
Ownership indicator Weighting Compliance points Target OwnershipExercisable Voting Rights in the Enterprise in the handsof black people 3 25%+1 vote Scorecard measures theExercisable Voting Rights in the Enterprise in the handsof black women 2 10% ability of black shareholders to exercise and enforceEconomic Interest of black people in the Enterprise 4 25% their ownership rights toEconomic Interest of black women in the Enterprise 2 10% prevent exploitationEconomic Interest of the following black natural peoplein the Enterprise: Measures Voting Rights,black designated groups;black Participants in Employee Ownership Schemes; Economic Interestblack beneficiaries of Broad-Based Ownership 1 2.5% And Net Equity ValueSchemes; orblack Participants in Co-operatives Specific Target on BlackOwnership fulfilment 1 Dependent on Women and below Designated GroupsNet value 7 10 year targets on Formula A Funding to be repaid overInvolvement in the ownership of the Enterprise of black 2 10% new entrants; ten yearsInvolvement in the ownership of the Enterprise of black Participants in: black Participants in Employee Ownership Schemes; 1 10% black beneficiaries of Broad-Based Ownership Schemes; or black participants in Cooperatives
Ownership - QSE Ownership Indicator Weighting Compliance target pointsVoting Rights:•Exercisable Voting Rights in the Enterprise in the hands of Black people 6 25%+1 voteEconomic Interest:•Economic Interest in the Enterprise to which Black people are entitled 9 25%Realisation points:•Ownership fulfilment points 1 Yes/No•Net equity points 9 25%Bonus points:•Involvement of black women 2 10%•Involvement in the ownership of the business by: 1 10%•Black participants in Employee Ownership Schemes•Black participants of Broad-Based ownership schemes•Black participants in co-ops
Management Voting Rights in the hands of black-people using the Adjusted Recognition Bonus point for black independent directors
Management - QSE Management Control Indicator Weighting Compliance target points•Black representation at top manager level 25 50.1% of top manager representation•BONUS: Black women representation as top managers 2 25%
Employment Equity 40% subminimum applied Adjustment for Gender
Employment Equity - QSE Employment Equity Indicator Weighting Compliance target points•Black employees in management, as a percentage of all 15 40%management, adjusted for gender•Black employees, as a percentage of all employees, adjusted for 10 60%gender•BONUS: Meeting or exceeding the EAP (economically active population) 2in each indicator above (unadjusted)
CONCLUSIONSkills Development 2008 2009 Total Points 55.17 71.32 Level contribution 5 4 Expenditure on training of black people This level can be maintained , especially if the work on procurement and skills development is maintained. Black people participating Accredited learning programmes
CONCLUSIONSkills Development - QSE 2008 2009 Total Points Development Indicator Skills 55.17 Weighting 71.32 points Compliance target•AdjustedLevel Development spend on learning programmes for Skills contribution 5 4 25 2%black employees, as a percentage of the leviable amount This level can be maintained , especially if the work on procurement and skills development is maintained.
CONCLUSIONProcurement Compliance targets 2008 Years 0 - Years 6 - 2009 Criteria 5 10 Total Points 55.17 Weighting 71.32 points Level contribution 5 4B-BBEE Procurement Spend 12 50% 70%from all SuppliersB-BBEE Procurement Spend 3 10% 15%from Qualifying Small This level can be maintainedEnterprises or Exempted Micro- , especially if the work on procurementEnterprisesB-BBEE skills development and Procurement Spend is maintained. 5 15% 20%from any of the followingSuppliers: Suppliers that are 50% blackowned Suppliers that are 30% blackwomen owned
CONCLUSION - QSE Procurement 2008 2009 Preferential Procurement Indicator Weighting Compliance target Total Points 55.17 71.32 points•BEE procurement spend from all suppliers, based on BEE 25 40% Level contribution 5recognition levels, as a percentage of total measured spend 4 This level can be maintained , especially if the work on procurement and skills development is maintained.
CONCLUSIONEnterprise Development 2008 2009 Total Points 55.17 71.32 Level contribution 5 4 Criteria Weighting Compliance Points Target Average annual value of all 15 3% of NPAT Qualifying Contributions made by especially if the work on procurement This level can be maintained , the Measured Entity as a and skills development is maintained. percentage of the target.
Enterprise DevelopmentCONCLUSION- QSE 2008 2009 Total Points 55.17 71.32 Level contribution 5 4 Criteria Weighting Compliance Points Target Average annual value of all 25 2% of NPAT Qualifying Contributions made by especially if the work on procurement This level can be maintained , the Measured Entity as a and skills development is maintained. percentage of the target.
Socio-economicCONCLUSIONDevelopment 2008 2009 Total Points 55.17 71.32 Criteria Weighting Compliance Target Level contribution 5 Points 4Average annual value of all Socio- 5% 1% of NPAT Economic Development Contributions and Qualifying This level can be Development , especially Socio-Economic maintained if the work on procurement Contributions made by the and skills development is maintained. Measured Entity as a percentage of the target.
Socio-economic CONCLUSIONDevelopment - QSE 2008 2009 Total Points 55.17 71.32 Criteria Weighting Compliance Target Level contribution 5 Points 4 Average annual value of all Socio- 25 1% of NPAT Economic Development Contributions and Qualifying This level can be Development , especially Socio-Economic maintained if the work on procurement Contributions made by the and skills development is maintained. Measured Entity as a percentage of the target.