1. Overview of the Charter November 2006

2. WhiteBlackWomen Men 90% 6% 94% 10%

3. WhiteBlackWomen Men 22% 78% 25% 75%

4. Status Quo ELEMENTCONTR.BEC. OWNERSHIP10%-14% SNR MANAGEMENTALL – 6% W - 0% ALL-10% W – 1% MID MANAGEMENTALL -15% W – 1% ALL – 13% W – 2% JUN MANAGEMENT ALL – 56% W - 2% ALL – 37% W – 12%

5. Status Quo Scope All enterprises that are involved in the creation, expansion, and/or maintenance of fixed assets related to residential or non- residential buildings, infrastructure, or any other form of construction works in South Africa 13 National Organisations, Government and Labour Structures – IMC, Technical Teams etc Current Status

6. Legislative Path Broad-Based BEE Act Broad-Based BEE Strategy and Scorecard The Codes of Good Practice (To be finalized) Industry Charters (To be negotiated) Enabling framework for the promotion of BEE Empowers Minister to issue Codes of Good Practice Establishes the BEE Advisory Council Defines Government’s Broad-Based Strategy Provides the generic balanced-scorecard Further interpretation of the BEE Act Determines qualification criteria for licensing Criteria for entering PPP with private sector Outlines industry-specific BEE weightings and targets Establishes the residual elements of the scorecard Standardizes industry BEE initiatives and reporting Section 9 & 12 of Act

7. Scorecard ElementsWeightingTargetCompany Performance Score Ownership25301512.5 Control10 Employment E10 Skills Dev.20 Procurement20 Enterprise Dev10 CSI5 TOTAL (15/30)* 25 = 12.5 Indicators Board (Weight 5) Executive M (Weight 5) Black (3.5) B Women (1.5) All scores add up to 100 Determines level of BEE contribution 100

8. Level 1100% and <135% Level 285% - less 100%125% Level 375% - less 85%110% Level 465% - less 75%100% Level 555% - less 65%80% Level 645% - less 55%60% Level 740% - less 45%50% Level 830% - less 40%10% Level 9<30%0% Public Sector: 80/20 and 90/10 – Score will directly translate to the BEE points allocated within targeted procurement points. Private Sector: Will be measured in accordance with table below: Where any enterprise is in excess of 50% owned by black people, it will qualify to be registered a level higher. Application

9. Application: Size Differentiation SizeAverage Annual TONumber of Employees Contr.BEPContr.BEP Micro<R1m<R300 00052 Small>R1m, <R12m >R300 000, <R3m 6-603-9 Medium>R12m, <R60m >R3m, <R36m 61-30010-100 Large>R60m>R36m>300>100 Current: Micro Enterprise exempt Small Enterprises can select 70 point s and score accordingly

10. The Codes will provide a national standard for BEE verification Rating Agencies will have to be Accredited by the DTI (SANAS) - Has to be member of ABVA - Capacity to verify - Pitfalls Balanced scorecard approach / intrusive auditing process Issue BEE compliance certificate that will be valid for 12 months Listing on the National Empowerment Directory Role of BEE Verification agencies

11. The Verification Process Duties of Company - Preparation of own scorecard - Substantiate with proof – portfolio of proof - Essential documentation Duties of Verification Agency - Independence - Issue of Certificate - Report to DTI / Charter Council - Report Fronting Practices

12. Ownership Weight 25 Target 7 Year Var. Voting RVoting rights in the hands of black people 4 30% Voting rights in the hand of black women 2 10% Economic Interest Economic Interest to which black people are entitled 5 30% Economic interest to which black women are entitled 2 10% Economic interest to which black broad based groups and or black designated groups, specifically employees are entitled 5 10%5% Realisation Points Ownership Fulfillment1 Yes Net Equity Value6 30%

13. Control Weight 10 Target 4/7 Year Var. BoardMembers of the board who are black as % of board 3.5 40% Members of the board who are black women as % of board 1.5 20% Executive Management Executive management who are black people as % of executive management 3.5 25/40% Executive management who are black women as % of executive management 1.5 10/16%

14. Employment Equity W 10 Target 4/7 Year Var. Senior Management Black senior management as % of senior management 2 25/40% Black 30/40% Black women in senior management as % of senior management 1.5 10/16% Middle Management Black middle management as % of middle management 2 30/40% Black women in middle management as % of middle management 1.5 12/16% Junior Management Black junior management as % of junior management 2 65% Black women in junior management as % of junior management 1 27% Women 12/16%

15. Skills Development Weight 15 Target 7 Year Var. 20 Training Cost Direct training cost as % of payroll 2 1.5% % of Above on black people 2 70% % of Spend on black people spent on black women 1 25% % of Spend on black people spent on black management 1 25% % of Spend on black management spent on black women management 0.5 20% Learnership Learnership as % of employees 1 2.5%1.5% Black learnership positions as % of total learnerships 1.5 70% Black women learnerships as % of black learnerships 1 35% Learnerships for black designated groups as % of black learnerships 1 30% Bursaries Bursary Expenditure on black students as % of payroll 2 0.3% Mentorship Implementation of an approved and verified mentorship programme 2 Yes

16. Procurement Weight 20 Target 7 Year Var. ProcurementTotal procurement on BBBEE companies as % of procurement 20 70% Enterprise Development 1510 Enterprise Development Input5 List 5 Total Turnover Ratio5 5% 2.5 Output5 GDP 2.5 Residual 5 Corporate Social Investment as % of payroll 0.25%

17. Way forward Section 9 to DTI year end Circular issued (interim)