Presentation on AgriBEE Charter

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Presentation on AgriBEE Charter
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Agenda
Achieving Broad-based BEE Ownership Statement 100
Consolidation of Economic Control through
Management Statement 200
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AgriBEE - Ownership Scorecard
ELEMENT Weighting Indicator Category Indicator Indicator Weighting TARGET
Ownership 20 Voting Rights Exercisable voting rights by black people 3 pnts 30
Ownership 20 Voting Rights Exercisable voting rights by black women 2 pnts 10
Ownership 20 Economic Interest Economic interest in the enterprise to which black people are entitled 3 pnts 30
Ownership 20 Economic Interest Economic interest in the enterprise to which black women are entitled 2 pnts 10
Ownership 20 Economic Interest Economic interest in the enterprise to which black employees and workers are entitled 2 pnts 10
Ownership 20 Realisation Points Ownership fulfilment 1 pnt No Restrictions
Ownership 20   Net Equity Interest Achieved accordingly 10 of the Target (Year 1) 20 of the Target (Year 2) 40 of the Target (Year 3-4) 60 of the Target (Year 5-6) 80 of the Target (Year 7-8) 100 of the Target (Year 9-10) 7 pnts 30
Ownership 20 Bonus Points Involvement in the ownership of the Enterprise of black new entrants black Deemed Participants of Broad-Based Ownership Schemes or black Participants in Co-operatives 3 pnts Bonus per each level of 5
Contribution to achieving more than 30 land transfer 5 pnts Bonus point per each percentage of land transferred above 30
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Agenda
Achieving Broad-based BEE Ownership Statement 100
Consolidation of Economic Control through
Management Statement 200
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Management Scorecard (Same as the BEE Codes)
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Agenda
Structure and Content Phase 2
Human Resources Elements (Statement 300400)
Procurement, Enterprise development and
Residual (Statement 500900)
Additional Statements on Ownership (Statement
102105)
Qualifying Small Enterprises (Statement 10001700)
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Employment Equity Scorecard (Same as BEE Codes)
Criteria Weighting points Compliance targets
Black people with disabilities employed by the Measured Entity as a percentage of all full-time employees 2 4
Black people employed by the Measured Entity at Senior Management level as a percentage of employees at Senior Management level 2 60
Black women employed by the Measured Entity at Senior Management level as a percentage of employees at Senior Management level 2 30
Black people employed by the Measured Entity at Professionally Qualified, Experienced Specialists and Mid-management level as a percentage of employees at Professionally Qualified, Experienced Specialists and Mid-management level 2 75
Black women employed by the Measured Entity at Professionally Qualified, Experienced Specialists and Mid-management level as a percentage of employees at Professionally Qualified, Experienced Specialists and Mid-management level 1 40
Black people employed by the Measured Entity at Skilled Technical and Academically Qualified Workers, Junior Management, Supervisors, Foremen, and Superintendents as a percentage of employees at Skilled Technical and Academically Qualified Workers, Junior Management, Supervisors, Foremen, and Superintendents level 1 80
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Employment Equity Scorecard Allocation
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AgriBEE - Skills Development Scorecard
Category Skills Development Element Weighting points Compliance Target
Skills Development Skills Development
Skills development spend on black employees as a percentage of Leviable Amount. (85 of spend focused on core and critical skills as defined by the relevant SETA). 6 2
Skills development spend on black women as a percentage of Leviable Amount (85 of spend focused on core and critical skills as defined by the relevant SETA). 2 0.93
Spend on black employees with disabilities as a percentage of Leviable Amount 1 0.2
Recognised Training Programmes Recognised Training Programmes
Number of black employees participating in training programmes that lead to recognised qualifications as percentage of total employees. 2 5
Number of black women participating in training programmes that lead to recognised qualifications as percentage of total employees 2 2.5
Number of people who are members of Black Designated Groups participating in training programmes that lead to recognised qualifications as percentage of total employees (The score in this element will be adjusted directly proportionate to the level of absorption of the participants in training programmes in the measured enterprise until a level of 80 absorption is attained) 1 1
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AgriBEE - Skills Development Scorecard (continues)
Category Skills Development Element Weighting points Compliance Target
Organisational Transformational Index Organisational Transformational Index
Existence of a comprehensive Black Economic Empowerment strategy and which is being implemented Yes 1
Employment of a Skills Development Facilitator Yes 1
Existence of a policy on non-discrimination widely published within the Enterprise Yes 1
Compliance with all relevant employment related legislation Yes 1
Implementation of an effective human resource management plan Yes 1
Existence of a program designed to give practical effect to the stated policies and programs Yes 1
Bonus Points Support land reform beneficiaries and Black persons to create sustainable business through the transfer of specialized skills in qualifying mentorship programmes Qualifying mentorship programmes as accredited by relevant SETA authority 5
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Other Skills Development Considerations

• Direct training costs (which must represent at
  least 50 of all such spend)
• Indirect training costs (allowed but is limited)
• Compliance with the skills development Act is a
  pre-requisite
• Registration with the relevant SETA

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Agenda
Structure and Content Phase 2
Human Resources Elements (Statement 300400)
Procurement, Enterprise development and
Residual (Statement 500700)
Additional Statements on Ownership (Statement
102105)
Qualifying Small Enterprises (Statement 10001700)
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Preferential Procurement Scorecard (Same as BEE
Codes)
Criteria Weighting points Compliance target
BEE Procurement Spend from all suppliers based on the BEE Procurement Recognition Levels, QSE Recognition Levels or the Deemed Micro Enterprise Recognition Levels (as the case may be) as a percentage of Total Measured Procurement Spend 15 70
BEE Procurement Spend from Qualifying Small Enterprises based on the QSE Recognition Levels as a percentage of Total Measured Procurement Spend 4 15
BEE Procurement Spend from Exempted Micro Enterprises based on the Deemed Micro Enterprise Recognition Level as a percentage of Total Measured Procurement Spend 1 5
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Statement 500 Preferential Procurement

• Allowable Exclusions
• Salaries
• Third party costs
• Loans and Donations
• Certain imports
• Rates Taxes, levies
• Post retirement funding
• Medical aid contributions,etc.
• Imports accepted to a maximum
• of 75. (25 local content)

Total Spend
Cost of Sales
Operational Expenditure
Capital Expenditure
TOTAL MEASURED PROCUREMENT SPEND
BEE Spend
Non-BEE spend
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AgriBEE - Enterprise Development Scorecard
Criteria Weighting Points Compliance Target
Cumulative contribution to enterprise development as a percentage of Net Profit After Tax measured from the commencement / Inception Date to the date of measurement 10 2
Bonus Points Contribution towards increased employment 1
Lease of 20 of land or capital assets on a long term basis to black persons 3 Lease longer than 10 years
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AgriBEE Rural Development, Poverty Alleviation
and Corporate Social Investment
Criteria Weighting Points Compliance Target
Cumulative rand value of non-recoverable qualifying corporate social investment contributions as a percentage of net profit after tax over five years measured from the commencement date of this statement or the Inception Date until the date of measurement. 6 1.5
Land1 made available to farm dwellers for the purpose of household use measured from the commencement date of this statement or the Inception Date until the date of measurement2. (Making land available for farm workers shall not trigger the application of the tenure rules for a period of 10 years. However this provision does not affect the ESTA rights of the affected persons who have lawful claims on the land) 4 10
Bonus point for qualifying residual contributions benefiting black people in rural communities or geographic areas identified by government 1
1The land that is made available is the land not
subject to the Land Tenure Act.
2Enterprises that have fully contributed to the
ownership element of the scorecard have an option
of only contributing to the CSI portion of this
element which will then have a corresponding 10
weighting points.
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Agenda
Structure and Content Phase 2
Human Resources Elements (Statement 300400)
Procurement, Enterprise development and
Residual (Statement 500700)
Additional Statements on Ownership (Statement
102105)
Qualifying Small Enterprises (Statement 10001700)
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Framework for Measuring BEE in QSEs
Other Companies (Exceed Revenue or Employee
limits)
Generic Scorecard, with all seven
elements (Statement 000900)
QSEs can elect to implement the entire QSE
scorecard (with enhanced recognition)
QSE Scorecard, Select five of the seven
elements (Statement 10001700)
Qualifying Small Enterprises (As per Statement
1000)
All elements weigh 20
Indicators adapted to QSEs
Micro Enterprises
Micro Exemption, Automatic Level 4 Recognition
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Statement 1000 Framework for QSEs
Key Principles Description Implication
Qualifying Small Enterprises (Definition) Qualifying small enterprises classified according to the National Small Business Act, based on turnover and employee number The qualification criteria for QSEs differs across sector A table provided for classification of QSEs by turnover and employee number
Exemption of Micro Enterprises Micro Enterprises with annual revenue below VAT registration exempted from the Codes AgriBEE Enterprise with an annual turnover less than R1.5m. (To be finalised once research is concluded) Automatic Level 4 recognition for Micro-Enterprises Companies are not penalized for buying from exempted micro enterprises
Application of the QSE Scorecard Allows QSEs to apply the entire QSE scorecard QSE scorecard allows company to elect five out of seven BEE factors for BEE scoring purposes. AgriBEE (To be finalised once research is concluded) less than R20 million in primary agriculture less than R30 million in beneficiation of agricultural products and less than R30 million, service provision to the agricultural sector. QSEs can present a BEE score comprising five out of the seven BEE elements QSEs can also elect to apply entire scorecard (enhanced recognition) QSEs can potentially score 100 points without BEE ownership
Bonus Provisions (Enhanced recognition) Different Bonus provision for QSEs where black ownership exceeds 20 points and where QSEs use all seven elements of the scorecard Provide additional recognition for black owned QSEs Encourage B-BBEE initiatives by QSEs
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QSE Identification and Classification Table
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Ownership and Management for QSEs
BEE Elements Code Ref. Weighting Indicators Indicator Weighting Compliance target
Ownership BEE 1100 20 Exercisable Voting Rights by black people 5 30
Ownership BEE 1100 20 Economic Interest in the Enterprise to which Black people are entitled 7 30
Ownership BEE 1100 20 Ownership Fulfillment 1 No restrictions
Ownership BEE 1100 20 Net Equity Value 7 10 - 100 staggered over a 10 year period
Ownership BEE 1100 20 Bonus Points Involvement in the ownership of the Enterprise of Black Women and/or Black Employees/Workers 3 15
Ownership BEE 1100 20 Contribution to achieving over 30 land transfer 5 Bonus point per each percentage of land transferred above 30
Management Control (Same as BEE Codes) BEE 1200 20 Black representation at Owner-Manager level 20 25,1 Owner-Manager Representation,
Management Control (Same as BEE Codes) BEE 1200 20 Bonus Points Black Women representation at Owner-Manager 2 10
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Employment Equity for QSEs
BEE Elements Code Ref. Weighting Indicators Indicator Weighting Compliance target
Employment Equity (Same as BEE Codes) BEE 1300 20 Black representation at Manager-Controller level 6 40
Employment Equity (Same as BEE Codes) BEE 1300 20 Black women representation at Manager-Controller level 6 20
Employment Equity (Same as BEE Codes) BEE 1300 20 Black employees as a percentage of total employees 4 70
Employment Equity (Same as BEE Codes) BEE 1300 20 Black women as a percentage of total employees 4 35
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AgriBEE - Skills Development for QSEs
BEE Elements Code Ref. Weighting Indicators Indicator Weighting Compliance target
Skills Development BEE 1400 20 Employee enrollment/ involvement in Recognised Training Programmes 5 Yes
Skills Development BEE 1400 20 Skills development spend on black employees in addition to Skills Development Levy (except where the enterprise is exempted from payment of the skills development levy) as a percentage of the Leviable Amount (or as a percentage of total annual payroll, for entities exempted from the skills development levy). 15 1
Skills Development BEE 1400 20 Bonus Points - Support land reform beneficiaries and Black persons to create sustainable business through the transfer of specialized skills in qualifying mentorship programmes 5 Qualifying mentorship programmes as accredited by relevant SETA authority
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Preferential Procurement, Enterprise Development
and Residual for QSEs
BEE Elements Code Ref. Weighting Indicators Indicator Weighting Compliance target
Preferential Procurement (Same as BEE Codes) BEE 1500 20 BEE Procurement Spend from Suppliers based on the BEE Procurement Recognition Levels or Deemed Micro Enterprise Recognition Levels as a percentage of Total Measured Procurement Spend 20 50
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AgriBEE - Enterprise Development and Rural
Development for QSEs
BEE Elements Code Ref. Weighting Indicators Indicator Weighting Compliance target
Enterprise Development BEE 1600 20 Enterprise development contributions made by the Qualifying Small Enterprise as a percentage of Net Profit After Tax 20 2
Enterprise Development BEE 1600 20 Bonus Points - Lease of 20 land or capital assets on a long term basis to black persons 3 Lease longer than 10 years
Rural Development BEE 1700 20 Qualifying residual contributions made by the QSE measured as a percentage of net profit after tax, made to corporate social investments and/or industry specific contributions measured from the commencement date of this statement or the Inception Date until the date of measurement. 12 2
Rural Development BEE 1700 20 1Land made available to farm workers measured from the commencement date of this statement or the Inception Date until the date of measurement2. 8 10
1The land that is made available is the land not
subject to the Land Tenure Act.
2Enterprises that have fully complied with the
ownership scorecard have an option of only
contributing to the CSI portion of this element
which will then have a corresponding 10 weighting
points.
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The Road Ahead
20 Dec 2005 Release of First Draft 2nd Phase
31 March 2006 Deadline for Submissions
March/April 2006 Review of Submissions
May/Sept 2006 Development of Final Draft
November/December 2006 Promulgation of Phases 1
and 2