What are the new B-BBEE codes?
We reported last year that the new codes provide the basis on which the B-BBEE rating of a company is calculated.
In the report, we highlighted that 'the government hopes that giving established companies incentives and disincentives — through the codes — to pull new black entrants into their supply chains will foster the growth and capacity of black manufacturers.'
So how will this extension by the DTI affect your company?
The extension regarding the commencement of the amended B-BBEE codes will affect your company in the following ways:
Global Business Solutions says the extension by the DTI will have the following implications for businesses:
#1: The site explains that many companies had decided to either bring their verification forward so certificates were issued before 11 October 2014, or were having second verifications performed before that date.
If you're one of these companies, these verifications will now be delayed until March or April 2015.
While this may be the case, Global Business Solutions says the amended codes are significantly more rigorous than the old codes. That's why it's advisable that you bring the second verification forward to take advantage of this extended transition period.
#2: The delay will give the Department of Trade and Industry time to clarify certain interpretation issues. This includes review formulae, which don't give the desired results (such as the formula under Management Control), the anticipated Qualifying Small Enterprise (QSE) scorecard and Technical Guide as well as the question of ownership in multinational corporations.
#3: Sector councils will have an additional six months to align the sector codes with the amended codes.
#4: Global Business Solutions says QSEs that are greater than 51% black owned and all Exempted Micro Enterprises (EMEs) can take advantage of certain beneficial terms under the amended codes and can adopt the new codes early.
The site says such businesses only need to get an affidavit stating their turnover and black ownership. This affidavit will serve as the B-BBEE certificate.
'Remember EMEs are now businesses with turnover less than R10 million and QSEs are those entities with revenues between R10 and R50 million,' says Global Business Solutions.
We'll keep you updated on anything new regarding the amended B-BBEE codes so you can comply.