BLACK ECONOMIC EMPOWERMENT

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BLACK ECONOMIC EMPOWERMENT Breakfast
Session SABINET / JUTA Presenter Louis
McLaren (BEE2Business) 012 - 365 3699
Bridging the Economic Divide
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BRIEF OVERVIEW BEE CODES (55 min)
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• THE BEE CODES
• Code 000 BEE Framework
• Code 100 Equity Ownership
• Code 200 Management
• Code 300 Employment Equity
• Code 400 Skills Development
• Code 500 Preferential Procurement
• Code 600 Enterprise Development
• Code 700 Residual Element
• Code 800 Sector Codes
• Code 1000 Qualifying Small Enterprise

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SOME IMPORTANT PRINCIPLES AND STATEMENTS
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FRONTING MISREPRESENTATION
Window-dressing, Benefit Diversion, Opportunistic
Intermediaries
High Risk Indicators Unaware of role or
participation / Paid less than market norm / Only
marketing / Relies on 3rd for core / Not without
3rd contract or lack / Any circumvention Moderat
e Risk Indicators Limited knowledge of
Enterprise / No active B-top management / To a
Related non-BEE Pay management admin fees,
acquire goods or loans or infra structure at
non-market related value or rates
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FRONTING
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SCORECARDS
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BEE PROCUREMENT
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QUICK FLIGHT OVER THE SCORECARDS
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EQUITY OWNERSHIP
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QSE EQUITY OWNERSHIP
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MANAGEMENT CONTROL
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QSE MANAGEMENT CONTROL
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EMPLOYMENT EQUITY
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QSE - EMPLOYMENT EQUITY
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SKILLS DEV ORGANISATIONAL TRANSFORMATION
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SKILLS DEV ORGANISATIONAL TRANSFORMATION
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QSE SKILLS DEV ORG TI
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ENTERPRISE DEVELOPMENT
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QSE - ENTERPRISE DEVELOPMENT
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PREFERENTIAL PROCUREMENT
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QSE - PREFERENTIAL PROCUREMENT
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RESIDUAL
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QSE - RESIDUAL
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CASE STUDY
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• Lilly-white Company
• Distributor of Medical Supplies
• Scorecard Generic
• Annual Turnover R30m
• Valued R16m including inventories
• Base Cost R10,25m
• NP AT R1,065,000 (NP 5 of Sales)
• EBITDA R1,800,000
• Executive Board 3
• Other Executives1
• Snr Managers 2
• Mid Managers 3
• Jnr Managers 5
• Other Occupational Levels 15
• No retrenchments

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• Some Cost Factors Considered
• Professional Fees
• CGT
• Dilution of Interest 10 discount
• Additional Remuneration
• Tax Incentives Available
• Compliance Contributions Required
• BEE Procurement Premium 10
• Family Trust as shareholder

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• Final Remarks
• BEE Score is critical
• BEE should empower AND
• BEE should make business sense
• BEE is a reality
• BEE is an opportunity
• Enterprise Development 280bn p.a
• Gain new share in market
• QSE at the front!

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FACILITY

• About Facility
• Self-assessment tool
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• Access via Sabinet website
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• mail to info_at_bee2business.co.za

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