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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Sector Codes

Defence Sector Code

16. Elements of the Defence Sector Code: Large Entities Scorecard

16.6 Socio-Economic Development

 

16.6.1 Measured Entities receive recognition for any Socio-Economic Development Contributions that are quantifiable as a monetary value using a Standard Valuation Method.

 

16.6.2 Socio-Economic Development Contributions of any Measured Entity are recognizable annually.

 

16.6.3 No portion of the value of any Socio-Economic Development contribution that is payable to the beneficiary after the date of measurement can form part of any calculation under this statement.

 

16.6.4 Socio-Economic Development Contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries by a Measured Entity with the specific objective of facilitating income generating activities for targeted beneficiaries.

 

16.6.5 The full value of Socio-Economic Development Contributions made to beneficiaries is recognizable if at least 75% of the value directly benefits Black people.

 

16.6.6 If less than 75% (seventy) per cent of the full value of Socio-Economic Development Contributions directly benefits Black people, the value of the contribution made multiplied by the percentage that benefits people are recognizable.

 

16.6.7 The following is a non-exhaustive list of Socio-Economic Development Contributions:
16.6.7.1 grant contributions to beneficiaries of Socio-Economic Development Contributions;
16.6.7.2 guarantees given or security provided for beneficiaries;
16.6.7.3 direct costs incurred by a Measured Entity in assisting beneficiaries;
16.6.7.4 overhead costs of a Measured Entity directly attributable to Socio Economic Development Contributions; developmental capital advanced to beneficiary communities;
16.6.7.5 preferential terms granted by a Measured Entity for its supply of goods or services to beneficiary communities;
16.6.7.6 payments made by the Measured Entity to third parties to perform socio-economic development on the Measured Entity’s behalf;
16.6.7.7 subject to paragraph 16.6.7.6. the maintenance by the Measured Entity of a Socio-Economic development unit which focuses only on support of beneficiaries and beneficiary communities.
16.6.7.8 providing training or mentoring of beneficiary communities by a Measured Entity. Such contributions are measurable by quantifying the cost of time (excluding travel or commuting time) spent by staff or management of the Measured Entity in carrying out such initiatives. A clear justification must support any claim costs incurred, commensurate with the seniority and expertise of the trainer; and
16.6.7.9 maintaining a socio-economic development unit by the Measured Entity. Only that portion of salaries and wage attributable to time spent by the staff in, and the other expenses related to, promoting and implementing socio-economic development constitute contributions.

 

Socio-Economic Development Scorecard

 

Criteria

Weighting Points

 

Compliance Target
1. Annual Value of all Socio-Economic Contributions by the Measured Entity as a percentage of the target

3

0.5% NPAT
2. Annual Value of all Socio-Economic Contributions to Black Military /Veterans by the Measured Entity as a percentage of the target

2

0.5% NPAT

Total

5 Points

 

 

16.6.8 Measurement of Socio-Economic Development Contributions DEVELOPMENT CONTRIBUTIONS

 

Socio- Economic Development Contributions are measured using the formula in the Benefit Factor Matrix set out below.

 

Benefit Factor Matrix

 

Qualifying Contribution type

Contribution Amount

Benefit Factor

Grant and Related Contributions

Grant Contribution

Full Grant Amount

100%

Direct Cost incurred in supporting socio-economic development, sector specific initiative or Qualifying Socio-Economic Development Contributions

Verifiable Cost (including both monetary and non-monetary)

100%

Discounts in addition to normal business practice supporting socio-economic development, sector specific initiative or Qualifying Socio-Economic Development Contributions

Discount Amount (in addition to normal business discount)

100%

Overhead Costs incurred in supporting socio-economic development , sector specific initiative or Qualifying Socio-Economic Contributions

Verifiable Cost (including both monetary and non-monetary)

80%

Contributions made in the form of human resource capacity

Professionals services rendered at no cost supporting socio-economic development, sector specific initiatives or Qualifying Socio-Economic Development Contributions

Commercial hourly rate of professional

80%

Professional Services rendered at a discount supporting socio-economic development, sector specific initiatives or Qualifying Socio-Economic Development Contributions

Value of discount based on commercial hourly rate of professional

80%

Time of employees of Measured Entity productively deployed in assisting beneficiaries and supporting socio-economic development, sector specific or Qualifying Socio-Economic Development Contributions

Monthly Salary divided by 160

80%