GLOSSARY OF TERMS

ABET

Adult Based Education

the Act

the Broad-Based Economic Empowerment Act, No 53 of 2003

AE

Associated Enterprise: Must be a sustainable business or opportunity; transfer of specialised skills or a productive capacity; no unreasonable limits on customers or clients; not limited to customers, clients or suppliers of seller; outsourcing of services at arm’s length on a fair & reasonable basis; not licence or franchise.

ARG

Adjusted Recognition for Gender, as calculated in terms of Annexe 400(B).

Black New Entrant

Black participants who hold rights of ownership in a ME and who, before holding the EI in the ME, have not held EI’s in any other Entity which has a total value of more than R20 million, measured using a standard valuation method

Black People

Natural persons who are citizens of the RSA by birth or descent; or are citizens of the RSA by naturalisation (a) occurring before the commencement of the constitution of the Republic of South Africa Act of 1993; or (b) occurring after the commencement of the Constitution of South Africa Act of 1993, but who, without the Apartheid policy would have qualified for naturalisation before then.

BBBEE

Broad-Based Black Economic Empowerment

the Codes

the Codes of Good Practice on Black Economic Empowerment published in Government Gazette number 29617 on 9 February 2007

DNV

Deemed Net Value, as calculated in terms of formula 3 of Annexe 100(C)

EI

Equity Instrument; the instrument by which a Participant holds rights of ownership in an enterprise.

Entity

A natural or a juristic person conducting a business, trade or profession in the RSA.

Global Practice

A globally and uniform applied practice of a Multinational, restricting the alienation of equity in or the sale of business in its regional operations, which practice existed before the promulgation of the Act.

INED

Independent Non-executive Director

INPM

Indicative Net Profit Margin, is the profit margin in the last year where the ME’s profit margin is at least 25% of the industry norm.

Leviable Amount

As defined in the Skills Development Levies Act of 1999 and determined using the Forth Schedule to the Income tax Act of 1962.

ME

Measured Entity, being the enterprise that is in the process of being measured

Multinational Business

A ME with its business in the RSA and elsewhere which maintains its international headquarters outside the RSA.

NPAT and NPBT

Net Profit After Tax and Net Profit Before Tax, being the operating profit of a ME after and before tax, as the case may be, incorporating both equity / loss figures and abnormal items, but excludes extra ordinary items as determined by Generally Accepted Accounting Practices

Net Value

The percentage resulting from the formula in Annexe 100(C) of Statement 100.

SED

Socio-Economic Development as per Statement 700.

Standard Valuation Method

A standard valuation method for an asset, and economic interest, or any other instrument or right relevant to measurement under Statement 100, undertaken using normal valuation methods that represent standard

Start-up Enterprise

A recently formed or incorporated enterprise that has been in operation for less than 1 year, but excludes mere continuations of a pre-existing enterprise

Total Labour Cost

The total amount of remuneration paid by a ME to its employees as determined under section 3(4) of the Skills Development Levies Act of 1999 and the Forth Schedule of the Income Tax Act of 1962.

Top Manager

Employees of a ME who hold rights of ownership, serve on the Board, undertake the day-to-day management, have overall responsibility for the overall financial management and are actively involved in developing and implementing the overall strategy of the ME.

Total Revenue

Is the total income of an entity from its operations as determined under South African Generally Accepted Accounting Practice

QSE

A Qualifying Small Enterprise, being any enterprise with an annual Total Revenue of between R5 million and R35 million

QT

Qualifying Transaction, being sale of a business, valuable business assets or shares that results in the creation of sustainable business opportunities and transfer of specialised skills or productive capacity for black people.

Value Adding Enterprise

A registered VAT vendor whose NPBT summed with its Total Labour Cost exceeds 25% of the value of its Total Revenue.