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

Industry Charters

Financial Services  Charter

Code Series FS100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 103: The Recognition of Equity Equivalents

Annexe 103(A)

 

This formula is for determining the Ownership Score under an Equity Equivalent Programme using either of the targets in paragraph 4.2.1 or 4.2.2.

 

For Foreign Branches:

 

A =  B/C x 14

 

Where

 

A is ownership points of the entity in any year arising from its Equity Equivalent contribution

 

B is the balance sheet value of contributions made, as at Measurement Date

 

C is the target of 25% of the standard value of its South African operations as at 31 December 2010

 

For Local Measured Entities:

 

A = (B/C x 2) + [(B x 50%) /D x 0.67] + [(B x 50%) /E x 0.33] + (F/G x 1.33)

 

Where

 

A is ownership points of the entity in any year arising from its Equity Equivalent contribution

 

B is the Origination value of contributions made

 

C is the target of 5% (15%/3) of the standard value of its South African operations as at 31 December 2010- relating to paragraphs 2.1 and 2.3 of the Ownership Scorecard

 

D is the target of 2% (6%/3) of the standard value of its South African operations as at 31 December 2010 relating to paragraphs 2.2 and 2.4 of the Ownership Scorecard

 

E is the target of 3.33% (10%/3) of the standard value of its South African operations as at 31 December 2008- relating to paragraph 2.5 of the Ownership Scorecard

 

F is the balance sheet value of contributions made as at Measurement Date

 

G is the target as per Formula A and Formula B

 

This formula is for determining the Ownership Score under an Equity Equivalent Programme using either of the targets in paragraphs 4.2.1 and 4.2.2, where the contribution is made on an annual basis towards a ten year target is as follows:

 

A = B/C x (1/(5% or 25% x D) x 13 or 4.33

 

Where

 

A is ownership points of the entity in any year arising from its equity equivalent contribution

 

B is the value of total contributions made prior to the date of measurement

 

C is the financial value of the target in paragraph 4.2.1 or 4.2.2 or the ten year value of contributions to be made over the life of this statement

 

D is the time-based graduation factor outlined below:

•        10% for the first year after the commencement of statement 000.

•        20% for the second year after the commencement of statement 000.

• 40% from the first day of the third year after the commencement date of statement 000 to the last day at the end of the fourth year after the commencement date of statement 000.
• 60% from the first day of the fifth year after the commencement date of statement 000 to the last day at the end of the sixth year after the commencement date of statement 000.
• 80% from the first day of the seventh year after the commencement date of statement 000 to the last day at the end of the eighth year after the commencement date of statement 000.
• 100% from the first day of the ninth year after the commencement date of statement 000 to the last day at the end of the tenth year after the commencement date of statement 000.