Knowledge is earned from years of working experience across sectors and choosing a trusted partner that has their finger on the ever-changing pulse that is the B-BBEE Commission. Here in our QTC Lexicon, we aim to help you and your business better understand the terminology used to help you better navigate this complex corporate terrain.
ABSORPTION
A measure of the Measured Entity’s ability to successfully secure formal permanent or long-term contract employment for the Learner or to assist the Learner’s progress with further education and training.
ACQUISITION DEBT
Is the debt associated with the purchase of an asset. In the context of empowerment, it means the funding extended to a Black participant to purchase shares in a Measured Entity.
ADVISORY
Having the power to make recommendations but not to take action on them.
ANTI ZERO-SUM
Zero-sum describes a situation where for one person to gain, another would incur a matching loss. Quiver Tree Capital’s approach is Anti zero-sum. The opposite of zero-sum is Win-Win.
APPRENTICESHIP
An agreement between an apprentice and an employer for a set period of time during which the apprentice works and receives training in the workplace.
ASSOCIATED ENTITY
An Entity with which a Seller has concluded a Qualifying Transaction.
BEE, BBBEE or B-BEE means Broad Based Black Economic Empowerment as legislated in the BBBEE Act.
Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);
B-BBEE Certification Date:
The date upon which a Measured Entity obtains a B-BBEE certification by a SANAS accredited B-BBEE Verification Agency.
B-BBEE CERTIFICATION DATE
The date upon which a Measured Entity obtains a B-BBEE certification by a SANAS accredited B-BBEE Verification Agency
B-BBEE RECOGNITION LEVEL
The percentage of B-BBEE Recognition Levels as set forth in the Codes.
B-BBEE STATUS
B-BBEE LEGISLATION
BLACK DESIGNATED GROUP
The empowerment of black people.
Is a generic term which means African, Coloureds and Indians:
(a) who are citizens of the Republic of South Africa by birth or decent; or
(b) who became citizens of the Republic of South Africa by naturalisation
(i) before 27 April 1994;
(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date.
CERTIFIED DATE OR CERTIFICATE
Any Learning Programme for which the Measured Entity has:
(a) any form of independent written certificate as referred to in the “Learning Achievements” column of the Learning Programme Matrix; or if it does not have such certification:
(b) an enrolment certificate issued by the independent person responsible for the issue of the certification referred to in statement 300 confirming the employee has:
(i) enrolled for, is attending and is making satisfactory progress in the Learning Programme; or
(ii) enrolled for but not attended the Learning; or
(iii) attended the Training Programme but has failed an evaluation of their learning progress
The Revised Codes of Good Practice.
The Companies Act, No. 71 of 2008 as amended or substituted.
A company as referred in the Companies Act, No. 71 of 2008.
A person who has acquired through training, qualification and experience the knowledge and skills necessary for undertaking any task assigned to them under the codes;
CONSULTANT
Skills that are:
(a) value-adding to the activities of the Measured Entity in line with its core business;
(b) in areas the Measured Entity cannot outsource; or
(c) within the production/operational part of the Measured Entity’s value-chain; as opposed to the supply side; services or downstream operations.
The date of commencement of Statement 100 and the date upon which the transaction undertaken by the measured entity to achieve Black Rights of Ownership became effective and unconditional.
DEBT
A supplier to the Measured Entity that is at least owned by one or more of the following categories of ownership within its structure:
(a) Unemployed ‘Black’ people not attending and not required by law to an educational institution and not awaiting admission to an educational institution.
(b) ‘Black’ people who are youth as defined in the National Youth Commission Act of 1996.
(c) ‘Black’ People who are persons with disabilities as defined in the Code of Good Practice on the employment of people with disabilities issued under the Employment Equity Act.
(d) ‘Black’ people living in rural and underdeveloped areas.
(e) ‘Black’ Military Veterans who qualify to be called a Military Veteran in terms of the Military Veterans Act 18 of 2011.
A method of valuing a company based on a multiple of its earnings.
The measurable quantitative or qualitative elements of B-BBEE compliance in the Generic Scorecard and the Codes.
An Exempt Micro Enterprise, which is a business with an annual turnover under R10m.
A worker of Employee Scheme.
EMPLOYEE WITH A DISABILITY
EMPOWERING SUPPLIER
An Empowering Supplier within a context of B-BBEE is a B-BBEE compliant entity, which is a good citizen South African entity, compliant with all regulatory requirements of the country and should meet at least three if it is a large enterprise or one if it is a QSE of the following criteria:
(a) At least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local suppliers in SA, for service industry labour costs are included but capped at 15%;
(b) Job creation – 50% of jobs created are for black people provided that the number of black employees since the immediate prior verified B-BBEE Measurement is maintained;
(c) At least 25% transformation of raw material/beneficiation which includes local manufacturing, production and/or assembly, and/or packaging;
(d) Skills transfer – at least spend 12 days per annum of productivity deployed in assisting black EME’s and QSE’s beneficiaries to increase their operation or financial capacity.
ENTERPRISE DEVELOPMENT CONTRIBUTIONS
Monetary or non-monetary contributions carried out for the following beneficiaries, with the objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries:
(a) Enterprise Development Contributions to Exempted Micro-Enterprises or Qualifying Small Enterprises which are at least 51% Black owned or at least 51% Black women owned.
A legal entity or a natural or a juristic person conducting a business, trade or profession in the Republic of South Africa.
A person who starts and/or operates a business which includes identifying opportunities in the market, taking risks with a view of being rewarded with profits.
EXECUTIVE MEMBER OF BOARD
A transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of BBBEE Act or the implementation of any of the provisions of BBBEE Act, including but not limited to practices in connection with a B-BBEE imitative:
(a) in terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise;
(b) in terms of which the economic benefits received as a result of the broad based black economic empowerment status of an enterprise do not flow to black people in the ratio specified in the relevant legal documentation;
(c) involving the conclusion of a legal relationship with a black person for the purpose of that enterprise achieving a certain level of broad based black economic empowerment compliance without granting that black person the economic benefits that would reasonably be expected to be associated with the status or position held by that black person; or
(d) involving the conclusion of an agreement with another enterprise in order to achieve or enhance broad-based black economic empowerment status in circumstances in which:
(i) there are significant limitations, whether implicit or explicit, on the identity of suppliers, service providers, clients or customers;
(ii) the maintenance of business operations is reasonably considered to be improbable, having regard to the resources available;
(iii) the terms and conditions were not negotiated at arm’s length and on a fair and reasonable basis.
The scorecard used by the DTI to measure the B-BBEE status of a Generic Enterprise.
Under certain conditions, an organisation can still qualify under the 2007 Codes Of Good Practice and receive a Generic B-BBEE Certificate. Under the 2007 Codes Of Good Practice, a Generic Enterprise is an organisation with annual turnover higher than R35 million.
As per the 2013 B-BBEE Codes Of Good Practice, a business with an annual turnover higher than R50 million is measured against the Generic B-BBEE Scorecard.
A good practice is not only a practice that is good, but a practice that has been proven to work well and produce good results.
GRANT CONTRIBUTION
the process of putting a decision or plan into effect
INTERNSHIP
JUNIOR MANAGEMENT
An employee of the Measured Entity who is a member of the occupational category of “Junior Management” as determined using the Employment Equity regulations.
Absorption
Having the power to make recommendations but not to take action on them.
An agreement between an apprentice and an employer for a set period of time during which the apprentice works and receives training in the workplace.
BEE, BBBEE or B-BEE means Broad Based Black Economic Empowerment as legislated in the BBBEE Act.
Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);
B-BBEE Certification Date:
The date upon which a Measured Entity obtains a B-BBEE certification by a SANAS accredited B-BBEE Verification Agency.
B-BBEE Certification Date
The date upon which a Measured Entity obtains a B-BBEE certification by a SANAS accredited B-BBEE Verification Agency
B-BBEE Recognition Level
The percentage of B-BBEE Recognition Levels as set forth in the Codes.
B-BBEE Status
B-BBEE Legislation
Black Designated group
The empowerment of black people.
Is a generic term which means African, Coloureds and Indians:
(a) who are citizens of the Republic of South Africa by birth or decent; or
(b) who became citizens of the Republic of South Africa by naturalisation
(i) before 27 April 1994;
(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date.
Certified Date or certificate
Any Learning Programme for which the Measured Entity has:
(a) any form of independent written certificate as referred to in the “Learning Achievements” column of the Learning Programme Matrix; or if it does not have such certification:
(b) an enrolment certificate issued by the independent person responsible for the issue of the certification referred to in statement 300 confirming the employee has:
(i) enrolled for, is attending and is making satisfactory progress in the Learning Programme; or
(ii) enrolled for but not attended the Learning; or
(iii) attended the Training Programme but has failed an evaluation of their learning progress
The Revised Codes of Good Practice.
The Companies Act, No. 71 of 2008 as amended or substituted.
A company as referred in the Companies Act, No. 71 of 2008.
A person who has acquired through training, qualification and experience the knowledge and skills necessary for undertaking any task assigned to them under the codes;
Consultant
Skills that are:
(a) value-adding to the activities of the Measured Entity in line with its core business;
(b) in areas the Measured Entity cannot outsource; or
(c) within the production/operational part of the Measured Entity’s value-chain; as opposed to the supply side; services or downstream operations.
The date of commencement of Statement 100 and the date upon which the transaction undertaken by the measured entity to achieve Black Rights of Ownership became effective and unconditional.
Debt
A supplier to the Measured Entity that is at least owned by one or more of the following categories of ownership within its structure:
(a) Unemployed ‘Black’ people not attending and not required by law to an educational institution and not awaiting admission to an educational institution.
(b) ‘Black’ people who are youth as defined in the National Youth Commission Act of 1996.
(c) ‘Black’ People who are persons with disabilities as defined in the Code of Good Practice on the employment of people with disabilities issued under the Employment Equity Act.
(d) ‘Black’ people living in rural and underdeveloped areas.
(e) ‘Black’ Military Veterans who qualify to be called a Military Veteran in terms of the Military Veterans Act 18 of 2011.
A method of valuing a company based on a multiple of its earnings.
The measurable quantitative or qualitative elements of B-BBEE compliance in the Generic Scorecard and the Codes.
An Exempt Micro Enterprise, which is a business with an annual turnover under R10m.
A worker of Employee Scheme.
Employee with a Disability
Empowering Supplier
An Empowering Supplier within a context of B-BBEE is a B-BBEE compliant entity, which is a good citizen South African entity, compliant with all regulatory requirements of the country and should meet at least three if it is a large enterprise or one if it is a QSE of the following criteria:
(a) At least 25% of cost of sales excluding labour cost and depreciation must be procured from local producers or local suppliers in SA, for service industry labour costs are included but capped at 15%;
(b) Job creation – 50% of jobs created are for black people provided that the number of black employees since the immediate prior verified B-BBEE Measurement is maintained;
(c) At least 25% transformation of raw material/beneficiation which includes local manufacturing, production and/or assembly, and/or packaging;
(d) Skills transfer – at least spend 12 days per annum of productivity deployed in assisting black EME’s and QSE’s beneficiaries to increase their operation or financial capacity.
Enterprise Development Contributions
Monetary or non-monetary contributions carried out for the following beneficiaries, with the objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries:
(a) Enterprise Development Contributions to Exempted Micro-Enterprises or Qualifying Small Enterprises which are at least 51% Black owned or at least 51% Black women owned.
A legal entity or a natural or a juristic person conducting a business, trade or profession in the Republic of South Africa.
A person who starts and/or operates a business which includes identifying opportunities in the market, taking risks with a view of being rewarded with profits.
Executive Member of board
A transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of BBBEE Act or the implementation of any of the provisions of BBBEE Act, including but not limited to practices in connection with a B-BBEE imitative:
(a) in terms of which black persons who are appointed to an enterprise are discouraged or inhibited from substantially participating in the core activities of that enterprise;
(b) in terms of which the economic benefits received as a result of the broad based black economic empowerment status of an enterprise do not flow to black people in the ratio specified in the relevant legal documentation;
(c) involving the conclusion of a legal relationship with a black person for the purpose of that enterprise achieving a certain level of broad based black economic empowerment compliance without granting that black person the economic benefits that would reasonably be expected to be associated with the status or position held by that black person; or
(d) involving the conclusion of an agreement with another enterprise in order to achieve or enhance broad-based black economic empowerment status in circumstances in which:
(i) there are significant limitations, whether implicit or explicit, on the identity of suppliers, service providers, clients or customers;
(ii) the maintenance of business operations is reasonably considered to be improbable, having regard to the resources available;
(iii) the terms and conditions were not negotiated at arm’s length and on a fair and reasonable basis.
The scorecard used by the DTI to measure the B-BBEE status of a Generic Enterprise.
Under certain conditions, an organisation can still qualify under the 2007 Codes Of Good Practice and receive a Generic B-BBEE Certificate. Under the 2007 Codes Of Good Practice, a Generic Enterprise is an organisation with annual turnover higher than R35 million.
As per the 2013 B-BBEE Codes Of Good Practice, a business with an annual turnover higher than R50 million is measured against the Generic B-BBEE Scorecard.
A good practice is not only a practice that is good, but a practice that has been proven to work well and produce good results.
Grant Contribution
the process of putting a decision or plan into effect
Internship
The last day of the Measurement Period or such a date agreed upon with the Measured Entity that is as close as practically possible to the verification date. The term “Date of Measurement” has the corresponding meaning; the Ownership and Management Control elements must be measured as at the Measurement Date. For the avoidance of doubt, these two elements are to be measured on the same date.
Measurement period
The financial period of the Measured Entity, subject to the following:
(a) The period of 12 consecutive calendar months;
(b) Where the Measured Entity amended its financial reporting period from one year to another the financial period may, for that particular year in question, must be 12 consecutive months. In such exceptional cases the Measured Entity may at its discretion elect to be measured for the amended financial period (however many months it may include) or the 12 months ending on the last day of the amended financial period. For the purposes of determining its classification as an EME, QSE or Generic Enterprise the Measured Entity must however, irrespective of the election it exercises above, do so with reference to the 12 months ending on the last day of the amended financial period. In the case where audited financial statements are not available for the Measurement Period, management accounts for the same period will be used.
Is in place to ensure that the objectives of B-BBEE will not be circumvented through complex funding structures. The flow-through principles trace ownership measurement through the chain of ownership to the black natural person(s). The modified flow-through principle allows for the participation of non-B-BBEE funders at one tier of ownership. A measured enterprise can elect to apply the modified flow-through principle at any tier in a chain of ownership, but limited to one tier only.
Net Value
The transfer of unencumbered equity to empowerment partners.
New Enterprise
An early stage business which is similar to a start- up. However, an early stage business is typically 3 years old or less.
Net Profit Before Tax.
The operating profit of a measured entity before tax. It incorporates both the equity/loss figures and abnormal items, but excludes extraordinary items as determined by (GAAP) Generally Accepted Accounting Practices.
old codes
The Codes of Good Practice repealed and replaced by the Revised Codes of Good Practice that came into effect on 1 May 2015.
Means any expenditure incurred in:
(a) procuring the services of or from a labour broker; and
(b) procuring the services of any person who receives any remuneration or to whom any remuneration accrues because of any services rendered by such person to or on behalf of a labour broker.
Ownership
An Entity in which:
(a) Black people hold at least 51% of the exercisable voting rights as determined under Code series 100;
(b) black people hold at least 51% of the economic interest as determined under Code series 100; and
(c) has earned all the points for Net Value under statement 100.
Percentage – 51% Black Woman Owned
An Entity in which:
(a) Black women hold at least 51% of the exercisable voting rights as determined under Code series 100;
(b) black women hold at least 51% of the economic interest as determined under Code series 100; and
(c) has earned all the points for Net Value under statement 100.
Percentage – 30% Black Woman Owned
An Entity in which:
(a) Black women hold at least 30% of the exercisable voting rights as determined under Code series 100;
(b) black women hold at least 30% of the economic interest as determined under Code series 100; and
(c) has earned all the points for Net Value under statement 100.
The aim of the Preferential Procurement scorecard is to encourage the usage of black owned professional services and entrepreneurs as suppliers while inherently encouraging measured entities to empower themselves on the broad-based principles of B-BBEE.
An empowerment pillar of special importance where 40% of the target has to be achieved to avoid being discounted an empowerment level.
An empowerment pillar of special importance where 40% of the target has to be achieved to avoid being discounted an empowerment level.
A rule or directive made and maintained by an authority.
Socio-Economic Development and measures the extent to which companies undertake social investment initiatives.
Monetary or non-monetary contribution implemented for communities, natural persons or groups of natural persons where at least 75% of the beneficiaries are Black people. The objective of Socio-Economic Development Contributions is the promotion of sustainable access for the beneficiaries to the economy. Socio-Economic Development Contributions commonly take the following forms:
(a) development programmes for women, youth, people with disabilities, people living in rural areas;
(b) support of healthcare and HIV/AIDS programmes;
(c) support for education programmes, resources and materials at primary, secondary and tertiary education level, as well as bursaries and scholarships;
(d) community training; skills development for unemployed people and adult basic education and training; or
(e) support of arts, cultural or sporting development programmes
Monetary or non-monetary contributions carried out for the benefit of any projects approved for this purpose by any organ of state or sectors including without limitation:
(a) projects focusing on environmental conservation, awareness, education and waste management; and
(b) projects targeting infrastructural development or reconstruction in underdeveloped areas; rural communities or geographic areas identified in the government’s integrated sustainable rural development or urban renewal programmes;
(c) New projects promoting beneficiation.
Supplier Development.
Monetary or non-monetary contributions carried out for the benefit of value-adding suppliers to the Measured Entity, with the objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries:
(a) Supplier Development Contributions to suppliers that are Exempted Micro-Enterprises or Qualifying Small Enterprises which are at least 51% black owned or at least 51% black women owned.
One of the pillars of the scorecard and it is a priority element it measures the extent to which companies invest in their Black workers augmenting their skills and competencies.
Monetary or non-monetary contribution implemented for communities, natural persons or groups of natural persons where at least 75% of the beneficiaries are Black people. The objective of Socio-Economic Development Contributions is the promotion of sustainable access for the beneficiaries to the economy. Socio-Economic Development Contributions commonly take the following forms:
Development programmes for women, youth, people with disabilities, people living in rural areas;
Support of healthcare and HIV/AIDS programmes;
Support for educational programmes, resources and materials at primary, secondary and tertiary education level, as well as bursaries and scholarships;
Community training; skills development for unemployed people and adult basic education and training; or
Support of arts, cultural or sporting development programmes;
Development programmes for women, youth, people with disabilities, people living in rural areas;
Support of healthcare and HIV/AIDS programmes;
Support for educational programmes, resources and materials at primary, secondary and tertiary education level, as well as bursaries and scholarships;
Community training; skills development for unemployed people and adult basic education and training; or
Support of arts, cultural or sporting development programmes.
This refers to the Skills Development Act of 1998.
Third party legal or commercial rights that restrict withhold or defer any benefit associated with ownership of any Equity Instrument. Third party rights include only those rights:
(a) created against a black Participant to secure, for a lender, repayment of a loan advanced to that Participant for financing their purchase of their equity instrument in the Measured Entity;
(b) held against a juristic person or trust that is in the chain of ownership between the Measured Entity and that the eventual black Participant serving the same purpose mentioned in (a) above.
Verification
The process and activities conducted by a B-BBEE Verification Professional to assess, verify and validate that the score awarded to a Measured Entity is a result of individual scorecard elements supplied by a Measured Entity, and to evaluate B-BBEE transactions in order to provide an indicative B-BBEE score and Certification based on the principles of the Broad-Based B-BBEE Codes of Good Practice.
Verification Certificate
Verification Date
