GOVERNMENT NOTICES GOEWERMENTSKENNISGEWINGS

Transcription

1 Telecommunications and Postal Services, Department of/ Telekommunikasie en Posdienste, Departement van 1387 Broad-Based Black Economic Empowerment Act (53/2003) as amended by B-BBEE Act (46/2013): Codes of good practice on broad based black economic empowerment No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 GOVERNMENT NOTICES GOEWERMENTSKENNISGEWINGS DEPARTMENT OF TELECOMMUNICATIONS GENERAL NOTICE AND POSTAL SERVICES NO NOTICE OF NOVEMBER 2016 DEPARTMENT OF TRADE AND INDUSTRY CODES OF GOOD PRACTICE ON BROAD BASED BLACK ECONOMIC EMPOWERMENT L Or Rob Davies, Minister of Trade and Industry, hereby issue the Amended Information and Communication Technology Sector Code (the ICT Sector Coder) in terres of section 9 (1) of the Broad -rased Black Economic Empowerment Act, (Act No 53 of 2003) as amended by. B -BBEE Act 46 of 2013, and determine that these Codes come into effect on the dale of this publication. É Dr Rob Davies, MP Minister of Trade and Industry 3 November 2016

2 STAATSKOERANT, 7 NOVEMBER 2016 No B-BBEE ICT SECTOR COUNCI L AMENDED BROAD-BASED BLACK ECONOMIC EMPOWERMENT (B-BBEE) ICT SECTOR CODE

3 6 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 PREAMBLE I T ICT S B E I T T - L C ICASA B E E C ICT S T N E E S A M S A S A S A ICT T B B B E E A (B-BBEE A ) B-BBEE A A B E E C P T A ICT S C ICT AICT- AMENDED B-BBEE ICT SECTOR CODE PREAMBLE

4 STAATSKOERANT, 7 NOVEMBER 2016 No ICT S R R - ICT T ICT S T B-BBEE A P B-BBEE ICT B ICT S ICT A ICT C S S A P B-BBEE ICT C ICT S C B-BBEE ICT S C A ICT S C C P ICT S S ( ) B-BBEE A B-BBEE ICT S C S B-BBEE A AICT- AMENDED B-BBEE ICT SECTOR CODE PREAMBLE

5 8 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 INDE OR T E AMENDED B-BBEE ICT SECTOR CODE (AICT) I C S C S AICT AICT AICT AICT AICT AICT AICT C T B -B B E E M O E B -B B E E M M C E B -B B E E M S D E B -B B E E M E S D E B -B B E E M S -E D E B - B B E E M S E B -B B E E I S S C S S T N AICT C S AICT S AICT C S AICT S E AICT C S AICT T O AICT C S AICT R S A AICT C S AICT T E E M AICT C S AICT T M C AICT C S AICT T S D AICT C S AICT T E S D AICT C S AICT T S - E D AICT- AMENDED B-BBEE ICT SECTOR CODE PREAMBLE

6 STAATSKOERANT, 7 NOVEMBER 2016 No I S E S N AICT AICT AICT AICT AICT AICT C S S T C S AICT T S E S E M -E C S AICT O S E C S AICT M C S E C S AICT S D S E C S AICT E S D S E C S AICT S -E D S E AICT- AMENDED B-BBEE ICT SECTOR CODE PREAMBLE

7 10 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 AMENDED B-BBEE ICT SECTOR CODE SERIES AICT///: FRAMEWORK FOR MEASURING BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT''': GENERAL PRINCIPLES AND THE SCORECARD Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act OP of &''P as amended. Arrangement of this statement (. Objectives of this statement... & &. Key principles... & P. Application of the Amended B-BBEE ICT Sector Code... P W. The Elements of B-BBEE in terms of the Scorecard... W O. The Amended ICT Sector Scorecard... O ). Enhanced recognition for certain categories of Black People... X X. Framework for Reporting by Measured entities and B-BBEE Verification Professionals... X 5. Adjustment of Thresholds... X *. Amendments and Duration of the Amended B-BBEE ICT Sector Code... X A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' ( - 5

8 STAATSKOERANT, 7 NOVEMBER 2016 No O The objectives of this statement are to: (.( Specify interpretative principles of B-BBEE: (.& (.P (.W (.O Specify the application of the Amended B-BBEE ICT Sector Code and the basis for measurement under the Amended B-BBEE ICT Sector Code Specify the ualifying thresholds for businesses to ualify as E empted Micro-Enterprises (EME) or ualifying Small Enterprises ( SE) Specify the method of measuring Start-up Enterprises Specify the elements of B-BBEE measurable under the Scorecard (.) Specify the Scorecard (.X Specify the basis for determining compliance by entities with the Amended B-BBEE ICT Sector Code (.5 Define the duration for the applicability of the Amended B-BBEE ICT Sector Code. &.( &.& &.P &.W &.O K The fundamental principle for measuring B-BBEE compliance is that substance takes precedence over legal form. In interpreting the provisions of the Amended B-BBEE ICT Sector Code any reasonable interpretation consistent with the objectives of the Act and the B-BBEE Strategy must take precedence. The basis for measuring B-BBEE initiatives under the Amended B-BBEE ICT Sector Code is the B-BBEE compliance of the measured entities at the time of measurement. Any misrepresentation or attempt to misrepresent any enterprise s true B-BBEE Status may lead to the dis ualification of the entire scorecard of that enterprise. Initiatives which split separate or divide enterprises as a means of ensuring eligibility as an E empted Micro-Enterprise a ualifying Small Enterprise or a Start- p Enterprise are a circumvention of the Act and may A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' & - 5

9 12 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 lead to the dis ualification of the entire scorecard of those enterprises concerned. &.) &.X &.5 P.( P.(.( Any representation made by an entity about its B-BBEE compliance must be supported by suitable evidence or documentation. An entity that does not provide evidence or documentation supporting any initiative must not receive any recognition for that initiative. herever a Standard Valuation Method applies to measuring an indicator the same standard should apply as far as reasonably possible consistently in all other applicable calculations in this statement. here the Amended B-BBEE ICT Sector Code is silent on certain provisions the provisions of the Amended Generic Code shall take precedence. A A B-BBEE ICT S C The following entities are measurable under the Amended B-BBEE ICT Sector Code: All persons organisations and entities operating in the ICT Sector in South Africa P.(.& All public entities in terms of the B-BBEE Act OP of &''P as amended including those listed in schedule ( schedule & or schedule P (Parts A B and C) of the Public Finance Management Act that fall within the ICT sector P.(.P Any public entity listed in schedule P (Parts B and D) which are trading entities which undertake any business with any organ of state public entity or any other enterprise that falls within the ICT Sector and P.& The basis for measuring the B-BBEE compliance of an entity in terms of paragraph P.( is- P.&.( Paragraph W of the Amended Codes of Good Practice in the case of an E empted Micro-Enterprise (EME) P.&.& The SE statements in Code Series AICT)'' in the case of a ualifying Small Enterprise ( SE) P.&.P The Generic Scorecard in the case of other enterprises. A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' P - 5

10 STAATSKOERANT, 7 NOVEMBER 2016 No P E S D P The Priority Elements are as follows: P.P.( Ownership The subminimum re uirement for Ownership is W' of Net Value (W' ) of the 5 points) based on the Time Based Graduation factor as provided in Anne ure (''(E) P.P.& Skills Development A Measured Entity must achieve a minimum of W' of the total targets set out in each of paragraphs &.(.( and &.(.& of the Skills Development Element of Code Series AICTP'' Statement AICT P''. Non-compliance with this subminimum re uirement will result in the achieved B-BBEE status level being discounted. P.P.P Enterprise Supplier development A Measured Entity must achieve a minimum of W' of each of the targets set out in &.( (i.e. (' of &O points) &.& (i.e. W of (' points) and &.P (i.e. ) of (O points) e cluding bonus points of the Enterprise and Supplier Development Scorecard Code Series AICTW'' and Statement AICTW''. W.( W.& W.P W.W T E B-BBEE S The Ownership Element as set out in Code Series AICT('' measures the effective ownership of enterprises by Black People. The Management Control Element as set out in Code Series AICT&'' measures the effective control of enterprises by Black People. The Skills Development Element as set out in Code Series AICTP'' measures the e tent to which employers carry out initiatives designed to develop the competencies of Black People. The Enterprise and Supplier Development Element as set out in Code Series AICTW'' measures the e tent to which Enterprises carry out A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' W - 5

11 14 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 initiatives intended to assist and accelerate the development and sustainability of other enterprises that are at least O( Black Owned. W.O The Socio-Economic Development (SED) and Sector Specific Contributions Element as set out in Code Series AICTO'' measures the e tent to which enterprises carry out general and ICT sector specific initiatives that contribute towards SED and that promote access to the economy for black people. All SED spend must be on ICT Sector Specific Initiatives. O.( O.(.( T A ICT S S The following table represents the Amended B-BBEE ICT Sector Scorecard and contains the: Elements of the Scorecard: O.(.& eightings and O.(.P Code Series reference that specify the mechanisms for measurement and calculation of each of the Elements of the Scorecard (Code Series AICT(('' O'')) A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' O - 5

12 STAATSKOERANT, 7 NOVEMBER 2016 No Element eighting points Code series reference Ownership &O AICT('' Management Control &P AICT&'' Skills Development &' AICTP'' Enterprise and Supplier Development AICTW'' Preferential Procurement Supplier Development &O (' Enterprise Development (O Socio-Economic initiatives Development (& AICTO'' O.& Based on the overall performance of a Measured Entity using the Scorecard it receives one of the following B-BBEE Status-: B-BBEE Status ualification B-BBEE recognition level Level One Contributor (&' points on the ICT Scorecard (PO Level Two Contributor ((O but (&' points on the ICT Scorecard (&O Level Three Contributor ((' but ((O on the ICT Scorecard ((' Level Four Contributor ('' but ((' on the ICT Scorecard ('' Level Five Contributor *O but ('' on the ICT Scorecard 5' Level Si Contributor *' but *O on the ICT Scorecard )' Level Seven Contributor XO but *' on the ICT Scorecard O' Level Eight Contributor OO but XO on the ICT Scorecard (' Non-Compliant Contributor OO on the ICT Scorecard ' A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' ) - 5

13 16 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 E B P Throughout the Amended B-BBEE ICT Sector Code various criteria appear which advance the interests of certain categories of Black People. These include: ).( Black omen who should form between W' and O' of the beneficiaries of all Elements of the Scorecard: and ).& Black People with disabilities Black outh Black People living in rural areas and Black nemployed People who should form between & and P of the beneficiaries of all Elements of the Scorecard. F R M B-BBEE P The verification of B-BBEE compliance is encouraged and to this end the B-BBEE ICT Sector Council will from time to time issue guidelines on the Framework for Reporting by Measured Entities and Verification Professionals. A T The B-BBEE ICT Sector Council may adjust the thresholds in paragraphs W to ) of the Amended B-BBEE ICT Sector Code in consultation with the Line Minister and the Minister of Trade and Industry. A D A B-BBEE ICT S C *.( The Amended B-BBEE ICT Sector Code shall be effective and legally binding from the date of ga ette until amended substituted or repealed under the Act. *.& *.P The process for the amendment of the Amended B-BBEE ICT Sector Code will follow the process set out in the Amended Generic Codes for the development of the Amended B-BBEE ICT Sector Code. Any amendments to the Amended Generic Codes of Good Practice must result in a review of the Amended B-BBEE ICT Sector Code for purposes of harmonisation. The Amended B-BBEE ICT Sector Code is effective from the date of publication in the government ga ette and applies to entities listed under paragraph P above. All verifications in the ICT Sector conducted from the A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' X - 5

14 STAATSKOERANT, 7 NOVEMBER 2016 No date of publication must be done in terms of the Amended ICT Sector Code. Certificates issued in terms of the &'(& ICT Sector Code prior to the publication of this Amended ICT Sector Code are valid for (& months and should be accepted. A ICT- &'()'*'*v&' AMENDED B - BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''' 5-5

15 18 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 AMENDED B-BBEE ICT SECTOR CODE SERIES AICT///: FRAMEWORK FOR MEASURING BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT''5: SCORECARDS FOR SPECIALISED ENTERPRISES Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act OP of &''P as amended. Arrangement of this statement (. Objective of this statement...& & General Principles...& P The Specialised Generic Scorecard Management Control Specialised Scorecard... O O Skills Development Specialised Scorecard... O ) Enterprise and Supplier Development Specialised Scorecard... O 6 Socio-Economic Specialised Scorecard... 6 A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 ( - 6

16 STAATSKOERANT, 7 NOVEMBER 2016 No O The objectives of this statement are to: (.( Provide guidance about the treatment of Ownership for the following Specialised Enterprises for Broad-Based Black Economic Empowerment (B-BBEE) purposes: (.(.( Companies limited b guarantee (.(.& (.(.P igher Education Institutions Non-Profit Companies (.(.5 Public entities and other enterprises e clusivel owned b organs of State and (.(.O (.& &.( &.(.( Public Benefit Schemes or Public Benefit Organisations. Specif scorecards applicable to Measured Entities subject to this statement. G P Ever organ of State and public entit operating in the ICT Sector must appl the Amended B-BBEE ICT Sector Code issued in terms of the B- BBEE Act OP of &''P as amended when: Determining ualification criteria for the issuing of licences concessions or other authorisations in respect of economic activit in terms of an law &.(.& Developing and implementing a preferential procurement polic &.(.P Determining ualification criteria for the sale of state-owned enterprises &.(.5 Developing criteria for entering into partnerships with the private sector and &.(.O Determining criteria for the awarding of incentives grants and investment schemes in support of B-BBEE. &.& Public entities and other enterprises e clusivel owned b organs of State are not capable of evaluation of Black ownership under Code Series AICT(''. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 & - 6

17 20 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 &.P &.5 &.O &.) &.6 &. igher Education Institutions are not public entities under the Public Finance Management Act of (***. The are incapable of evaluation of Black ownership under Code Series AICT(''. Companies limited b guarantee have no shareholding. The are not capable of evaluation of Black ownership under Code Series AICT(''. This does not impl that companies limited b guarantee and sharing in the ownership of other enterprises cannot contribute towards Black ownership to such enterprises as provided for in Statement AICT(''. Non-Profit Companies and Public Benefit Organisations generall do not have an beneficial ownership and are incapable of evaluation of Black ownership under Code Series AICT(''. This does not impl that Non-Profit Companies and Public Benefit Organisations sharing in the ownership of other enterprises as Broad-Based Ownership Schemes cannot contribute towards Black ownership to such enterprises as provided for in Statement AICT(''. herever an of the entities listed in paragraphs ( and & re uire evidence of their own B-BBEE compliance the will use the Scorecard in this Statement. If those entities are also ualif ing Small Enterprises the will use the Specialised ualif ing Small Enterprises Scorecard in this Statement. Entities that are E empted Micro Enterprises (EME) under this Statement are deemed to have a B-BBEE status of level four having a B-BBEE recognition level of (''. Enhanced B-BBEE recognition level for an EME: &..( Despite paragraph &.6 an EME that has at least 6O Black people as beneficiaries ualifies for elevation to Level One Contributor having a B- BBEE recognition level of (PO and &..& Despite paragraph &.6 and &..( an EME that has at least O( Black people as beneficiaries ualifies for elevation to Level Two Contributor having a B-BBEE recognition level of (&O. &.* An EME is onl re uired to obtain a sworn affidavit or CIPC issued certificate annuall confirming the following: &.*.( Annual Total Revenue Allocated Budget Gross Receipts of R(' million or less and A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 P - 6

18 STAATSKOERANT, 7 NOVEMBER 2016 No &.*.& Level of percentage of Black people as beneficiaries. &.(' &.(( &.(& &.(P &.(5 An misrepresentation in terms of paragraph &.* above constitutes a criminal offence as set out in the B-BBEE Act OP of &''P as amended. Entities that are ualif ing Small Enterprises ( SE) will use the Specialised ualif ing Small Enterprises Scorecard. Despite paragraph &.(( a SE that has at least 6O Black people as beneficiaries ualifies for elevation to Level One Contributor having a B- BBEE recognition level of (PO. Despite paragraphs &.(( and &.(& a SE that has at least O( Black people as beneficiaries ualifies for elevation to Level Two Contributor having a B-BBEE recognition level of (&O. A SE that has at least O( Black people as beneficiaries is onl re uired to obtain a sworn affidavit or CIPC issued certificate annuall confirming the following: &.(5.( Annual Total Revenue Allocated Budget Gross Receipts of RO' million or less and &.(5.& Level of percentage of Black people as beneficiaries. &.(O P.( P.& P.P An misrepresentation in terms of paragraph &.(5 above constitutes a criminal offence as set out in the B-BBEE Act OP of &''P as amended. T S G S The following table represents the Specialised Generic Scorecard and contains the: Elements of the scorecard eightings and P.5 The Code Series reference that specif the mechanisms for measurement and calculation of each of the Elements of the scorecard (Code Series AICT('' AICTO''). P.O All other terms of Statement AICT''' - AICTO'' appl to Measured Entities subject to this Statement mutatis mutandis. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 5-6

19 22 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 Element eighting Code Series reference Management control &' points AICT&'' Skills development &O points AICTP'' Enterprise and Supplier Development O' points AICT5'' Socio-Economic Development (& points AICTO'' M C S S The Management Control Scorecard for Specialised Enterprises as contained in Government Ga ette No. P 6)) () Ma &'(O) shall appl to this Statement. S D S S The Skills Development Scorecard for Specialised Enterprises as contained in Government Ga ette No. P 6)) () Ma &'(O) shall appl to this Statement. E S D S S The following table represents the criteria to derive a score for Enterprise and Supplier Development under this Statement. Criteria ).( PREFERENTIAL PROC REMENT ).(.( B-BBEE Procurement Spend from all Empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend eighting points O Compliance targets ' A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 O - 6

20 STAATSKOERANT, 7 NOVEMBER 2016 No ).(.& B-BBEE Procurement Spend from all Empowering Suppliers that are ualif ing Small Enterprises based on the applicable B- BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend ).(.P B-BBEE Procurement Spend from all E empted Micro-Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend ).(.5 B-BBEE Procurement Spend from Empowering Suppliers that are at least O( Black owned based on the applicable B- BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend 5 (O O (O (( 5' ).(.O B-BBEE Procurement Spend from Empowering Suppliers that are at least P' Black omen owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend ).(.) Bonus points O (& ).(.).( B-BBEE Procurement Spend from Designated Group suppliers that are at least O( Black owned ).& S PPLIER DE ELOPMENT ).&.( Annual value of all Supplier Development Contributions made b the Measured Entit as a percentage of the target & (' & & of Net Profit After Ta (NPAT) or '.& Annual Revenue Allocated budget Gross receipts Discretion A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 ) - 6

21 24 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 al spend ).P ENTERPRISE DE ELOPMENT ).P.( Annual value of Enterprise Development Contributions and Sector Specific Programmes made b the Measured Entit as a percentage of the target. (O P of NPAT or '.P Annual revenue Allocated budget Gross receipts Discretional spend ).5 Bonus Points ).5.(Bonus point for graduation of one or more Enterprise Development beneficiaries to the Supplier Development level. ).5.& Bonus point for creating one or more jobs directl as a result of Supplier Development and Enterprise Development initiatives b the Measured Entit ( ( S -E S S Criteria Annual value of all Socio-Economic Development Contributions b the Measured Entit as a percentage of the target eighting Points (& Compliance Target (.O of NPAT A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT''' STTAICT''5 6-6

22 STAATSKOERANT, 7 NOVEMBER 2016 No AMENDED B-BBEE ICT SECTOR CODE SERIES AICT100: MEASUREMENT OF THE OWNERSHIP ELEMENT OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT('': THE GENERAL PRINCIPLES FOR MEASURING OWNERSHIP Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act QR of &''R as amended. Arrangement of this statement (. Objectives of this statement... & &. The Ownership Scorecard... & R. Key Measurement Principles... Y Y. Broad-Based Ownership Schemes and Employee Share Ownership Programmes... Z Q. Private Equity Funds... Z ). Not-for-profit Companies (NPCs) and Companies Limited by Guarantee.. (' \. Trusts... (( Z. Options and Share Warrants... (( *. Equity Instruments carrying Preference Rights... (& Annexure ('' (A) - Examples of Mandated Investments... (& A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( ( - (&

23 26 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 O The objectives of this statement are to: (.( Specify the scorecard for measuring the Ownership Element of Broad- Based Black Economic Empowerment (B-BBEE) (.& (.R (.Y (.Q Define the key measurement principles associated with the Ownership Element of B-BBEE Specify the specific measurement principles applicable to various types of Enterprises Specify the specific measurement principles applicable to various types of Equity Instruments Specify the formula for measuring oting Rights Economic Interest and Realisation Points. T O S The following table represents the indicators and method for calculating a score for ownership under this statement: Category Ownership indicator Weighting points Compliance target &.( oting rights: &.(.( Exercisable oting Rights in the Entity in the hands of Black People Y R' &.(.& Exercisable oting Rights in the Entity in the hands of Black Women & (' &.& Economic Interest: &.&.( Economic Interest in the Entity to which Black People are entitled Y R' &.&.& Economic Interest in the Entity to which Black Women are entitled & (' A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( & - (&

24 STAATSKOERANT, 7 NOVEMBER 2016 No &.&.R Economic Interest of any of the following Black natural persons in the Measured Entity. NOTE: The maximum points that can be achieved by any of the following is limited to R. &.&.R.( Black Designated Groups &.&.R.& Black Participants in Employee Share Ownership Programmes &.&.R.R Black People in Broad-based Ownership Schemes &.&.R.Y Black Participants in Cooperatives R R &.&.Y New Entrants & & &.R Realisation Points: &.R ( Net alue Z Refer to Annexure ('' (E) As amended from time to time A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( R - (&

25 28 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 R.( K M P General principles: R.(.( An Entity receives points for participation by black people in its rights of ownership using the ownership scorecard in paragraph &. Black people may hold their rights of ownership in a Measured Entity as direct Participants or as Participants through some form of Entity such as: R.(.(.( R.(.(.& R.(.(.R R.(.(.Y R.(.(.Q R.(.(.) R.(.(.\ R.(.(.Z R.& A Company as defined in the Companies Act of &''Z (as amended): A Close Corporation: A Co-operative: Any form of juristic person recognised under South African law: A partnership or other association of natural persons: A Broad-Based Ownership Scheme: An Employee Share Ownership Programme and A Trust. Sub-Minimum Requirement R.&.( A Measured Entity is required to achieve a minimum of Y' on Net alue points (i.e. R.& of Z points) based on Annexure ('' (E). R.&.& Non-compliance with this sub-minimum target as per paragraph R.&.( will result in the achieved B-BBEE status level being discounted in accordance with the discounting principle that is contained in paragraph R.R in Statement ''' of Amended Code Series ''' as published in Government Ga ette No. R)*&Z dated (( October &'(R. R.R The Flow-Through Principle: R.R.( As a general principle when measuring the rights of ownership of any category of black people in a Measured Entity only rights held by natural persons are relevant. If the rights of ownership of black people pass through a juristic person then the rights of ownership of black people in that juristic person are measurable. This principle applies across every tier A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( Y - (&

26 STAATSKOERANT, 7 NOVEMBER 2016 No of ownership in a multi-tiered chain of ownership until that chain ends with a black person holding rights of ownership. R.R.& The method of applying the Flow-Through Principle across one or more intervening juristic persons is as follows: R.R.&.( R.R.&.& Multiply the percentage of the Participant s rights of ownership in the juristic persons through which those rights pass by the percentage rights of ownership of each of those juristic persons successively to the Measured Entity and The result of this calculation represents the percentage of rights of ownership held by the Participant. R.Y Modified Flow-Through Principle: R.Y.( A Measured Entity applying this Modified Flow-Through Principle cannot benefit from the Exclusion Principle R.Y.& The Modified Flow-Through Principle applies to B-BBEE owned or controlled company in the ownership of the Measured Entity. R.Y.R In calculating Exercisable oting Rights under paragraph &.(.(. and Economic Interest under paragraph &.&.( of the Ownership scorecard the following applies: R.Y.R.( Where in the chain of ownership black people have a flow-through level of participation of at least Q( and then only once in the entire ownership structure of the Measured Entity such black participation may be treated as if it were ('' Black. R.Y.Y The Modified Flow-Through Principle may only be applied in the calculation of the indicators in paragraphs &.(.( and &.&.( of the ownership scorecard. In all other instances the Flow-Through Principle applies. R.Q The Exclusion of specified entities when determining ownership: R.Q.( When determining ownership in a Measured Entity ownership held by Organs of State or Public Entities must be excluded. R.Q.& Exclusion of ownership held by Organs of State or Public Entities is to be effected before any other ownership discounting methods are to be applied. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( Q - (&

27 30 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 R.Q.R In calculating their Ownership score Measured Entities must apply the Exclusion Principle to any portion of their Ownership held by Organs of State or Public Entities. R.) B-BBEE Facilitator Status R.).( Despite paragraph R.Q.( and R.Q.R the Minister of Trade and Industry may by notice in the ga ette designate certain Organs of State or Public Entities as B-BBEE Facilitators. In calculating their Ownership score Measured Entities must treat B-BBEE Facilitators as having rights of Ownership held: R.).(.( R.).(.& R.).(.R R.).(.Y R.).(.Q R.\ ('' by Black People: Y' by Black Women: &' by Black Designated Groups Without any acquisition debts and Without any third-party rights. Mandated Investments R.\.( When determining ownership in a Measured Entity rights of ownership of Mandated Investments may be excluded. R.\.& The maximum percentage of the ownership of any Measured Entity that may be so excluded is Y'. R.\.R A Measured Entity electing not to exclude Mandated Investments when it is entitled to do so may either treat all of that ownership as non-black or obtain a competent person s report estimating the extent of black rights of ownership measurable in the Measured Entity and originating from that Mandated Investment. R.\.Y A Measured Entity cannot selectively include or exclude Mandated Investments and therefore an election to exclude one Mandated Investment is an election to exclude all Mandated Investments and vice versa. R.\.Q A Measured Entity applying the Exclusion Principle to Mandated Investments cannot benefit from the Modified Flow-Through Principle. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( ) - (&

28 STAATSKOERANT, 7 NOVEMBER 2016 No R.Z Recognition of ownership after the sale or loss of shares by Black Participants: R.Z.( A Measured Entity is allowed to recognise a portion of Black Ownership after a Black participant has exited through the sale or loss of shares subject to the following criteria: R.Z.(.( R.Z.(.& R.Z.(.R The Black participant has held shares for a minimum period of R years Net alue based on the Time Based Graduation Factor as per Annexure ('' (E) as amended from time to time must have been created in the hands of Black people: Transformation has taken place within the Measured Entity using the B-BBEE Recognition Level from the period of entry of Black participants to the exiting period. R.Z.& Black participation arising from continued recognition of Black ownership cannot contribute more than Y' of the score on the Ownership Scorecard. R.Z.R In the case of a sale or loss of shares by the Black participant the following additional rules apply: R.Z.R.( R.Z.R.& A written tripartite agreement between the Measured Entity the Black participant and a lender must record the loan or security arrangement unless the Measured Entity is the lender and The period over which the continued recognition points are allocated or recognised after the sale or loss of shares will not exceed the period over which the shares were held. R.Z.Y The Ownership points under this paragraph that are attributable to the Measured Entity will be calculated by multiplying the following elements R.Z.Y.( R.Z.Y.& The value created in the hands of Black participants as a percentage of the total value of the Black participants shareholding in the Measured Entity at the date of sale or loss of shares as a percentage of Measured Entity s value The B-BBEE status of the Measured Entity based on the scorecard at the date of measurement and A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( \ - (&

29 32 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 R.Z.Y.R The Ownership points that was attributable to the Measured Entity on the date of sale or loss of shares. B -B O S E S O P Y.( Y.(.( Black Participants in Broad-Based Ownership Schemes and Employee Share Ownership Programmes holding rights of Ownership in a Measured Entity may contribute: A maximum of Y' of the total points on the Ownership scorecard of the Measured Entity if they meet the qualification criteria set out in Annexure (''(B) and Annexure (''(C) as amended from time to time. Y.(.& ('' of the total points on the Ownership scorecard of the Measured Entity if they meet the additional qualification criteria set out in Annexure (''(B) and Annexure (''(C) as amended from time to time. Q.( P E F A Measured Entity may treat any of its Ownership arising from a Private Equity Fund as if that Ownership were held by Black people where the Private Equity Fund meets the following criteria: Q.(.( At least Q( of any of the Private Equity Manager s Exercisable oting Rights associated with the Equity Instruments through which the Private Equity Fund holds rights of Ownership must be held by black people Q.(.& At least Q( of profits made by the Private Equity Fund Manager after realising any investment made by it must by written agreement accrue to Black people Q.& The term profit in this instance is deemed as profit from the operations of the Private Equity Fund Manager and the carried interest that the Private Equity Fund Manager (and or its associated entities provided that at least Q( of the profits of the associated entities accrue to the Private Equity Fund Manager) receives after realising any investment made by it Q.R The Private Equity Fund Manager must be a B-BBEE Owned Company as defined A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( Z - (&

30 STAATSKOERANT, 7 NOVEMBER 2016 No Q.Y The Private Equity Fund Manager must seek to invest at least Q( of the value of funds under management in companies that have at least a R' direct Black shareholding using the Flow-Through Principle. Q.Q The Private Equity Fund Manager can facilitate direct Black shareholding at the time of entering into the transaction should the target company not meet the requirement of at least R' Black shareholding at the time that the transaction is concluded Q.) This determination will be made at each measurement date and the status given to the Private Equity Fund Manager will be applicable for a period of (& months Q.\ In recognition of the fact that it is currently a challenge for Private Equity Fund Managers to find companies to invest in that already have a significant Black shareholding in practice it should be allowed to achieve the Q( target over a period of time based on the formulation detailed below. (It must be noted that this formulation is in line with that of the Net alue calculation). This rule will apply to all investments made after the effective date of this Amended ICT Sector Code. Q.Z Within one year from the commencement date more than Q of the value of funds invested by the Private Equity Fund must at all times be invested in enterprises that have at least R' direct Black shareholding Q.* Within two years from the commencement date more than (' of the value of funds invested by the Private Equity Fund must at all times be invested in enterprises that have at least R' direct Black shareholding Q.(' From the first day of the third year to the last day of the fourth year from the commencement date more than &' of the value of funds invested by the Private Equity Fund must at all times be invested in enterprises that have at least R' direct Black shareholding Q.(( From the first day of the fifth year to the last day of the sixth year from the commencement date more than R' of the value of the funds invested by the Private Equity Fund must at all times be invested in enterprises that have at least R' direct Black shareholding Q.(& From the first of the seventh year to the last day of the eight year from the commencement date more than Y' of the value of the funds invested by the Private Equity Fund must at all times be invested in the enterprises that have at least R' direct Black shareholding A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( * - (&

31 34 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 Q.(R From the first day of the ninth year and beyond at least Q( of the value of the funds invested by the Private Equity Fund must at all times be invested in enterprises that have at least R' direct Black shareholding Q.(Y It should be noted that the measurement of at least Q( of the value of funds invested by any Private Equity Fund that must be invested in enterprises with at least R' direct Black shareholding is to be measured with reference to the cost of the investment made by the Private Equity Fund Q.(Q In the case of Private Equity Funds that were fully invested prior to the effective date of this Amended ICT Sector Code investments by the fund managers will be considered as being made by Black people if the Private Equity Fund Management entities meet the following criteria: Q.(Q.( At least Q( of any of the Private Equity Fund Manager s Exercisable oting Rights associated with the Equity Instruments through which the Private Equity Fund holds rights of ownership in a Measured Entity must be held by Black people Q.(Q.& At least Q( of the profits accruing to the Private Equity Fund Manager after reali ing any investment made by it must by written agreement accrue to Black people and Q.(Q.R Private Equity Fund Manager must be a B-BBEE owned company. N - - C NPC C L ).( A Measured Entity may elect to include or exclude NPCs or Companies Limited by Guarantee for the purposes of measuring ownership in terms of this statement ).& ).R ).Y An NPC or Company Limited by Guarantee that houses a Broad-Based Ownership Scheme or an Employee Share Ownership Programme is subject to the provisions governing those types of schemes and not to this paragraph. When a Measured Entity elects to exclude such companies it can do so by excluding up to Y' of the level of their ownership completely from the determination of its compliance with the ownership target. A Measured Entity electing not to exclude NPCs or Companies Limited by Guarantee when it is entitled to do so may either treat all of that ownership as non-black or obtain a competent person s report estimating the extent A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( (' - (&

32 STAATSKOERANT, 7 NOVEMBER 2016 No of black rights of ownership measurable in the Measured Entity and originating from those NPCs or Companies Limited by Guarantee. ).Q Black Participants in an NPC holding rights of ownership in a Measured Entity may contribute: ).Q.( a maximum of Y' of the total points on the ownership scorecard of the Measured Entity if they meet the qualification criteria for Broad-Based Ownership Schemes and Employee Share Ownership Programmes as set out in Annexure (''(B) and Annexure (''(C) respectively. ).Q.& ('' of the total points on the Ownership scorecard of the Measured Entity if they meet the additional qualification criteria set out for Broad- Based Ownership Schemes and Employee Share Ownership Programmes as set out in Annexure (''(B) and Annexure (''(C) respectively. T \.( Black Participants in a Trust holding rights of Ownership in a Measured Entity may contribute: \.(.( a maximum of Y' of the total points on the Ownership scorecard of the Measured Entity if the trust meets the qualification criteria for Trusts set out in Annexure ('' (D). \.(.& ('' of the total points on the Ownership scorecard of the Measured Entity if the Trust meets the additional qualification criteria set out for Trusts in Annexure (''(D). Z.( Z.(.( O S W Exercisable oting Rights and Economic Interest will be recognised where a participant holds an instrument granting the holder the right to acquire an Equity Instrument or part thereof at a future date if the following requirements are met: The Exercisable oting Rights attached to that instrument are irrevocably transferred to the holder for the option period and are exercisable by the holder before acquiring the Equity Instrument Z.(.& The value of any Economic Interest is irrevocably transferred to the holder for the option period and paid to the holder of that instrument before the exercise of that right and A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( (( - (&

33 36 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 Z.(.R The value of the instrument must be determined by using a Standard aluation Method for calculating the Net alue. E I P R *.( An Equity Instrument carrying Preferential Rights is measurable in the same manner as an ordinary Equity Instrument. *.& *.R An Equity Instrument carrying Preferential Rights that has the characteristics of a debt regardless of whether the debt is that of an Entity or of a participant must be treated as an ordinary loan. If the debt is that of a Black Participant it may be subject to measurement under Net alue. In evaluating an instrument that has a hybrid nature including the characteristics of a debt only that portion that represents a debt will be measured under current Equity Interest. The remainder is measurable as an ordinary Equity Instrument. For Annexures refer to Government Ga ette No. R)*&Z dated (( October &'(R Annexure ('' (A) - Examples of Mandated Investments Annexure ('' (B) Rules for Broad-Based Ownership Schemes Annexure ('' (C) Rules for Employee Share Ownership Programmes Annexure ('' (D) Rules for Trusts Annexure ('' (E) Measurement and Calculations A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('( (& - (&

34 STAATSKOERANT, 7 NOVEMBER 2016 No AMENDED B-BBEE ICT SECTOR CODE SERIES AICT/00: THE MEASUREMENT OF THE OWNERSHIP ELEMENT OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT('&: RECOGNITION OF OWNERSHIP IN THE SALE OF ASSETS Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act QR of &''R as amended. Arrangement of this statement (. Objectives of this statement...& &. Application...& R. Key measurement principles...& 5. Measurement principles... R Q. Recognition of Sale of Assets, Equity Instruments and Businesses... 5 A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('& ( - 5

35 38 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 / O The objectives of this statement are to: (.( Set out the conditions where the Sale of Assets, Equity Instruments and other Businesses will be recognised. (.& &.( &.(.( Set out how the Ownership points will be determined. A A transaction in terms of this statement may involve the sale of: An asset &.(.& A business or &.(.R Equity Instruments in an Enterprise. R.( R.(.( K General principles: A Seller that has concluded a transaction involving a sale of asset, Equity Instrument or business with an Associated Enterprise may claim the benefits provided for in this statement in its own Ownership Scorecard. R.(.& Where a Seller has claimed benefit in terms of the Ownership scorecard for the Sale of Asset, Equity Instrument or Business it may not claim benefits under the Enterprise and Supplier Development Element. R.& ualification Criteria: R.&.( For Ownership points to be recognised the transaction: R.&.(.( R.&.(.& Must result in the creation of sustainable businesses or business opportunities in the hands of Black people and Result in the transfer of specialised skills or productive capacity to Black people. R.&.& A Sale of Asset, Equity Instrument and Business must involve a separate Associated Enterprise which has: A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('& & - 5

36 STAATSKOERANT, 7 NOVEMBER 2016 No R.&.&.( R.&.&.& No unreasonable limitations as to its clients or customers and Clients, customers or suppliers other than the Seller. R.&.R Any operational outsourcing arrangements between the Seller and the Associated Enterprise must be negotiated at arms-length on a fair and reasonable basis. R.&.5 The following transactions do not constitute ualifying Transactions: R.&.5.( R.&.5.& transfers of business rights by way of license, lease or other similar legal arrangements not conferring unrestricted ownership: and Sales of franchises by franchisors to franchisees, but includes sales of franchises from franchisees to other franchisees or to new franchisees. M 5.( The calculation of the ownership points in terms of paragraph &.R.&. of the Ownership scorecard must be based on: 5.(.( The value of the transaction 5.(.& The value of Equity Instruments held by Black Participants in the Associated Enterprise and 5.(.R The carrying value of the Acquisition Debt of Black Participants in the Associated Enterprise. 5.& All calculations in terms of paragraph 5.(.( to 5.(.R must use a Standard aluation Method. 5.R The Seller may claim the point for Ownership Fulfilment only if both the Seller and the Associated Enterprise comply with the requirements for the award of that point. 5.5 Equivalency Percentages under this statement: 5.5.( Apply only to the Ownership Indicators in paragraphs &.( and &.& of the Ownership Scorecard 5.5.& Do not apply to the Ownership Indicators in paragraph &.R of the Ownership Scorecard. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('& R - 5

37 40 No GOVERNMENT GAZETTE, 7 NOVEMBER Q The Seller must include the Equivalency Percentages in its own Ownership Scorecard as if those percentages arose from Black Ownership of Equity Instruments in the Seller. The Equivalent Percentages for the indicators in paragraphs &.( and &.& of the Ownership Scorecard can be calculated in terms of Anne ure ('&(A). Q.( Q.(.( R S A E I B A Seller seeking recognition of a Transaction in its Ownership Scorecard must determine that recognition under paragraph 5 is in compliance with paragraph &.R of Statement AICT''': For the first three years after the transaction, based on data current on date of measurement Q.(.& For each year thereafter, based on: Q.(.&.( Q.(.&.& The Indicator Percentages at the date of measurement and The values of the ualifying Transaction and benefit to the Seller at the date of measurement in the third year after the transaction. ANNE RE ('& (A) as contained in Government Ga ette No. R )) dated ) May &'(Q shall apply to this statement. A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('& 5-5

38 STAATSKOERANT, 7 NOVEMBER 2016 No AMENDED B-BBEE ICT SECTOR CODE SERIES AICT/00: THE MEASUREMENT OF THE OWNERSHIP ELEMENT OF BROAD-BASED BLACK ECONOMIC EMPOWERMENT STATEMENT AICT('5: THE RECOGNITION OF EQUITY EQUIVALENTS FOR APPLICANTS Issued under section * (() of the Broad-Based Black Economic Empowerment (B-BBEE) Act T5 of &''5 as amended. Arrangement of this statement (. Objectives of this statement... & &. Key Measurement Principles... & 5. Recognition of Equity Equivalent Investment Programmes (EEIP)... & \. Measurement of Equity Equivalent Contributions on the Ownership Scorecard... & T. EEIP Ownership Points Certificate... 5 ). Topping-Up... 5 ]. Partial Contributions... 5 ^. Investment Periods... 5 *. Rules for the Administration of the Programme... \ ('. Specific Rules on Applicants... T A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('5 ( - )

39 42 No GOVERNMENT GAZETTE, 7 NOVEMBER 2016 / O The objectives of this statement are to: (.( Define the means by which Applicants may apply for recognition of Equity Equivalent Programmes (.& Specify how contributing towards the Ownership Element of B-BBEE by Applicants applying for recognition of equity equivalents is measurable. K M P Any Equity Equivalent Contributions towards the Ownership Element of B- BBEE made by Applicants applying for recognition of equity equivalents are measurable against the value of their operations in the Republic of South Africa. R E E I P EEIP 5.( The Minister of Trade and Industry must in consultation with the ICT Sector Council and the Line Minister approve Equity Equivalent Investment. The process is as follows: 5.(.( Measured Entity to apply to the B-BBBEE ICT Sector Council. 5.(.& B-BBEE ICT Sector Council to recommended to the relevant Line Ministry 5.(.5 The relevant Line Ministry to consider the recommendations and support the application for approval to the dti. M E E C O S \.( The Ownership Score of an Applicant participating in an Equity Equivalent programme is calculated in terms of paragraph \.5. An Applicant participating in an Equity Equivalent programme cannot receive any points for ownership under any statement in Code Series AICT('' other than this statement. \.& Contributions to Equity Equivalent programmes are measured as actual contributions made using the general principle set out in Code Series AICT\'' and AICTT'' against any of the following targets: A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('5 & - )

40 STAATSKOERANT, 7 NOVEMBER 2016 No \.&.( 5' of the value of the South African operations of the Applicant determined using a Standard Valuation Method or \.&.& \ of Total Revenue from its South African operations annually over the period of continued measurement. \.5 The Ownership Score under an Equity Equivalent Programme using either of the targets in paragraph \.& must be calculated in terms of Anne ure ('5 (A). EEIP O P C The EEIP Ownership Points Certificate awarded in terms of this statement will be valid for an investment period agreed upon in terms of paragraph * below. T -U If an Applicant wants to retain its EEIP Ownership Points at the date of e piry of its Certificate in terms of paragraph T above then the Applicant will have to reinvest and make an additional contribution into a new Equity Equivalent Programme using the Topping-Up principle. P C ].( Applicants can make partial contributions to the EEIP on proportional ratio basis for the recognition of Ownership points. The Ownership points will be awarded and determined in terms of the provisions of both Statement ('' and Statement ('5 as amended from time to time. ].& ^.( ^.& The minimum partial contributions that can be made towards EEIP as allowed in terms of paragraph ].( above must be at least \' of the compliance target for the Ownership Scorecard. I P Total contributions that are more than R('' million can be considered for an investment period of up to (' years Total contributions between R]T million and R('' million can be considered for an investment period of up to seven years A ICT- &'()'*'*v&' AMENDED B-BBEE ICT SECTOR CODE SERIES AICT('' STTAICT('5 5 - )