1. THE CODES OF GOOD PRACTICE FOR BROAD – BASED BLACK ECONOMIC EMPOWERMENT QUALIFYING SMALL ENTERPRISE SCORECARD CODE 800 STATEMENT 801 - 807

2. 2 Structure of the Code: The Benefits of the Adopted Structure:  Logical Flow of the Structure: The Code is structured according to the logical flow of BEE scorecard.  Flexibility of the Structure: It enables the Minister and DTI to expand, amend or remove individual statement as and when required, without having to re-issue the entire Code of Good Practice.  Best Practice: The structure is similar to those used by the Generally Accepted Accounting Practice internationally. STRUCTURE OF THE CODES OF GOOD PRACTICE

3. 3 Micro Enterprises (Turnover R 5m and below) Qualifying Small Enterprise (Turnover btw R5m – R35m) Other Companies (Exceed Revenue R35m) Generic Scorecard, with all seven elements Small Enterprise Scorecard, Select four of the seven elements All elements weigh 25% Indicators adapted to small enterprises Micro Exemption, Automatic Level 4 Recognition CODE 800 : MEASUREMENT OF BEE IN SMALL ENTERPRISES

4. 4 Framework for QSE’s – KEY PRINCIPLES Key PrinciplesDescriptionImplication Qualifying Small Entity (Definition) Qualifying small entity that qualifies for measurement under the qualifying small entity scorecard with a turnover of between R5 million and R35 million t The qualification criteria for QSEs differs from the Generic Scorecard Exemption of Micro Enterprises Micro Enterprises with annual revenue below R5 million exempted from the Codes t Automatic Level 4 recognition for Micro-Enterprises t Companies are encouraged to buy from exempted micro enterprises Application of the QSE Scorecard Allows QSEs to apply the entire QSE scorecard QSE scorecard allows company to elect FOUR out of SEVEN BEE factors for BEE scoring purposes. tQSEs can present a BEE score comprising FOUR out of the SEVEN BEE elements tQSEs can also elect to apply entire scorecard (enhanced recognition) tQSEs can potentially score 100 points without BEE ownership

5. 5 Using a system of weightings and targets, small enterprises can express their BEE Contribution as a score out of 100 points Small enterprises need only to choose 4 out of the 7 elements on the scorecard Very small and micro enterprises are exempted from BEE requirements and receive an automatic Level 4 Recognition CODE 800 : THE SMALL ENTERPRISES SCORECARD ElementWeighting Compliance Targets Ownership25 points25%+1 Management25 points50.1% Employment Equity25 points(40% to 70%) Skills Development25 points3% of payroll Preferential Procurement25 points50% Enterprise Development 25 points 2% (NPAT) Socio- Economic Development 25 points1% (NPAT)

6. 6 CODE 801 : THE SMALL ENTERPRISES OWNERSHIP SCORECARD CategoryOwnership indicatorWeighting points Compliance Target Voting rights: Exercisable Voting Rights in the Enterprise in the hands of black people 625%+1 vote Economic Interest: Economic Interest of black people in the Enterprise925% Realisation points: Ownership fulfilment1Refer to the formula in the main codes Net Value9Refer to the formula in the main codes Bonus points: Involvement in the ownership of the Enterprise by black women 210% Involvement in the ownership of the Enterprise by black Participants in Employee Ownership Schemes, Co- operatives or Broad-Based Ownership Schemes 110%

7. 7 CODE 802 : THE SMALL ENTERPRISES MANAGEMENT SCORECARD Management control criteriaWeighting points Compliance Target Black representation at Top- Manager level. 25 50.1% Top- Manager representation. Bonus Points: Black women representation as Top-Managers 225%

8. 8 CODE 803 : THE SMALL ENTERPRISES EMPLOYMENT EQUITY SCORECARD Criteria Weightin g points Compliance targets Years 0 - 5Years 6 -10 Black employees of the Measured Entity who are Management as a percentage of all Management adjusted using the Adjusted Recognition for Gender 1540%60% Black employees of the Measured as a percentage of all employees adjusted using the Adjusted Recognition for Gender 1060%70%

9. 9 CODE 804 : THE SMALL ENTERPRISES SKILLS DEVELOPMENT SCORECARD Skills Development ElementWeighting points Compliance Target Adjusted Skills Development Spend on Learning Programmes for black employees as a percentage of Leviable Amount. 25 2%

10. 10 CODE 805 : THE SMALL ENTERPRISES PREFERENTIAL PROCUREMENT SCORECARD Criteria Weighting points Compliance targets Years 0 - 5 Years 6 - 10 BEE Procurement Spend from all Suppliers based on the BEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend 2540%50%

11. 11 CODE 806 : THE SMALL ENTERPRISES ENTERPRISE DEVELOPMENT SCORECARD Criteria Weighting Points Compliance Target Average Annual value of all Enterprise Development Contributions and Sector Specific Programmes made by the Measured Entity as a percentage of the target 25 2% of NPAT

12. 12 CODE 807 : THE SMALL ENTERPRISES SOCIO- ECONOMIC DEVELOPMENT SCORECARD Criteria Weighting Points Compliance Target Average Annual value of all Socio- Economic Development Contributions by the Measured Entity as a percentage of the target 25 1% of NPAT

13. 13 THANK YOU