Model Transformation Scorecard

Indicative AgriQSE SCORECARD

The gazetting of a Transformation Charter in terms of Section 12 of the Act evidences the commitment by all stakeholders to promote BEE in the applicable sector. Section 12 Transformation Charters are not binding upon organs of state or public entities and as such, these entities will apply the Generic Scorecard in their interactions with the agricultural sector until such time as Sector Codes have been gazetted in terms of Section 9 of the B-BBEE Act.

The Indicative AgriBEE Scorecard should be regarded as an indication of what is likely to be included in possible, future Sector Codes for agriculture , but these Codes will be adapted to meet industry needs and to be aligned with the final version of the Generic Codes of Good Practice as published by the Department of Trade and Industry.

Targets contained in the Indicative AgriQSE Scorecard are based on those contained in the final version of Phase I of the Codes of Good Practice and those contained in the draft Phase II Codes of 20 December 2005, as well as on stakeholder inputs, comments and recommendations. Where no substantive reasons for deviation from targets contained in the Codes of Good Practice was put forward by stakeholders, targets have largely remained aligned with those contained in the abovementioned versions of the Codes. However, it should be noted that targets contained in Phase II of the Codes are subject to change, following a public commentary process. In this regard, the AgriBEE charter will align its targets to those contained in the final version of Phase II of the Codes, except where justification for deviation can be adequately provided on the basis of sound economic rationale and/ or sector development needs as part of the sector code development process.

A Qualifying Small Enterprise (‘QSE’) is an Enterprise which qualifies for BEE compliance measurement in terms of the Agricultural Qualifying Small Enterprise Scorecard by nature of the fact that the Enterprise has a 5 year moving average turnover of less than R50 million, but more than R5 million.

An Exempted Micro Enterprise (‘EME’) is an Enterprise which qualifies for BEE compliance exemption by nature of the fact that the Enterprise has a 5 year moving average turnover of less than R5 million and meets the principles of non-circumvention as defined in the Codes of Good Practice Code 1000 Statement 1000. EME’s will enjoy a deemed BEE recognition level of Level 4 (as defined in the Codes of Good Practice), without proof of contribution through BEE verification. However, EME’s are encouraged to contribute to transformation in agriculture, particularly in the areas of skills development and corporate social investment and are therefore incentivised to increase their BEE status, as outlined in the Charter.

Element	QSE Scorecard Weighting	Generic Scorecard Weighting
Ownership	20 points	20 points
Management control	20 points	10 points
Employment equity	20 points	10 points
Skills Development	20 points	20 points
Preferential procurement	20 points	20 points
Enterprise development	20 points	10 points
Residual	20 points	10 points

· A Qualifying Small Enterprise may elect to be measured using five of the seven elements of broad-based black economic empowerment

· Should there be no employees in the employ of the measured enterprise, the enterprise cannot include the employment equity element as one of the elected elements

· Each indicator will have a weighting of 20 percent, resulting in a total of 140 available BEE points

· When electing to be measured using more than five of the seven elements, the BEE Status must be determined using a total of 125 BEE points

· A Qualifying Small Enterprise which elects to include the ownership element in their measurement, will have its ownership score (including bonus points) multiplied by 1.25, provided that the enterprise scores a minimum of 20 points (including bonus points) for ownership, before the application of this multiple.

Measurement Principles:

· A Measured Enterprise’s score for a particular indicator is calculated by dividing the enterprise’s actual contribution (as described by the relevant indicator) by the corresponding target

· The result is multiplied by the corresponding indicator weighting points to obtain a score for that indicator

· Where the enterprise attains a score in excess of the indicator weighting points, the enterprise shall only be entitled to the corresponding weighting points

· The score for an element is the sum of indicator scores under that element

· A measured enterprise’s overall BEE score out of 100 will determine its BEE status and BEE procurement recognition level

ELEMENT	WEIGHTING	CATEGORY	INDICATOR	INDICATOR WEIGHTING POINTS	TARGET
OWNERSHIP	20%	Voting rights	Exercisable Voting Rights in the Enterprise in the hands of black people	5	30%
		Economic interest	Economic interest in the Enterprise to which black people are entitled	7	30%
		Realisation points	Ownership fulfillment	1	Yes
		Realisation points	Net equity interest 10% of the Target (Year 1) 20% of the Target (Year 2) 40% of the Target (Year 3,4) 60% of the Target (Year 5,6) 80% of the Target (Year 7,8) 100% of the Target (Year 9,10)	7	30%
		Bonus points	Involvement in the ownership of the Enterprise of: -Black Women and/or -Broad-based Ownership Schemes	3	15%
		Bonus points	Contibution to achieving 30% land transfer	5	Bonus point per each percentage of land transferred above 30% of total land value
MANAGEMENT CONTROL	20%	Owner-Manager Participation	Black representation at Owner-manager level	20	25.1%
MANAGEMENT CONTROL	20%	Bonus Points	Black women representation at Owner-manager level	2	10%
EMPLOYMENT EQUITY	20%		Black representation at Manager-Controller level	6	40%
			Black women representation at Manager-Controller level	6	20%
			Black employees as percentage of total employees	4	70%
			Black women as percentage of total employees	4	35%
SKILLS DEVELOPMENT	20%		Employee enrollment/ involvement in Recognised Training Programmes	5	Yes
			Skills development spend on black employees in addition to Skills Development Levy (except where the enterprise is exempted from payment of the skills development levy) as a percentage of the Leviable Amount (or as a percentage of total annual payroll, for entities exempted from the skills development levy). (85% of spend focused on core and critical skills as defined by the relevant SETA).	15	1%
		Bonus points	Percentage of employees at ABET level 3	2	70%
PREFERENTIAL PROCUREMENT	20%		BEE procurement spend from suppliers in accordance with the BEE procurement recongnition system contained in section 5.5 of the Charter	20	50%

ENTERPRISE DEVELOPMENT	20%		Cumulative contribution to enterprise development as a percentage of cumulative net profit after tax measured from the Commencement / Inception Date to the date of measurement	20	1%
ENTERPRISE DEVELOPMENT	20%	Bonus points	Lease of 20% land or capital assets on a long term basis to black persons which meets the criteria of a qualifying transaction as outlined in paragraph 5.1.1.3	3	Lease longer than 10 years
RURAL DEVELOPMENT, POVERTY ALLEVIATION AND CORPORATE SOCIAL INVESTMENT	20%	Corporate Social Investment Spend	Cumulative Rand value of corporate social investment contributions as a percentage of net profit after tax over five years and/ or	20	1% (CSI) 10% (land for farm labourers)
	20%	Land available to farm workers¹	Land made available to farm workers measured from the commencement date of this Charter or the Inception Date until the date of measurement.².