Measurement of Voting Rights:
Formula: A = B / C * D
A = the score
B = the % of exercisable voting rights on the hands of the category of participants who are black people / black women
C = % compliance target
D = weighting points

Measurement of Economic Interest
Formula: A = B / C * D
A = the score
B = the % economic interest attributable to black people / black women
C = % compliance target
D = weighting points

Calculation of Deemed Net Value
Formula: A = (B –C) / D
A = the Deemed Net Value
B = the value of the equity instruments relevant to the calculation, determined on the date of measurement (for Net Value Calculation)
B = the value of the equity instrument relevant to the calculation, determined on the date of sale or loss ( for recognition of ownership after sale or loss of shares by black participants)
C = the carrying value of the acquisition debts of the relevant black participants on the date of measurement (for Net Value Calculation)
C = the carrying value of any acquisition debts of the relevant black participants on the date of sale or loss (for recognition of ownership after sale or loss of shares by black participants)
D = Value of measured entity on date of measurement (for both of the above)
D = for purposes of the exclusion principle is the value of the measurable portion of the measured entity on the date of measurement.

Calculation of Net Value (lowest of the two formulas)
Formula 1:    A = B * ( 1 / (27.5% or 30% * C)) * 6
A = the score
B = Deemed Net Value determined above
C = time-based graduation factor of the economic interest compliance target, depicted as follows:

• 10% for the first year after the current equity interest rate
• 20% for the second year after the current equity interest rate
• 40% for the third and fourth years after the current equity interest rate
• 60% for the fifth and sixth years after the current equity interest rate
• 80% for the seventh and eighth years after the current equity interest rate
• 100% for the ninth and tenth years after the current equity interest rate

Formula 2:     A = B / C * 6
A = the score
B = the % economic interest in the measured entity by black participants
C = % compliance target for economic interest (i.e. 27.5%)

Calculation of the Recognition of Ownership after the Sale or Loss of Shares by Black Participants
Formula: A = B * C * D
A = the % of rights of ownership that survive the sale of an equity instrument by a black participant
B = the % of rights of ownership for each of indicators in the ownership scorecard that were attributable to the black participant immediately before the sale or loss
C = the net value % (above)
D = the most recent BEE recognition level.

EXAMPLE:
MJ Construction (Pty) Ltd (Contractors) has 4 shareholders and each holds 25% equity in the company. The company has been valued at R 1 million, and each shareholder’s stake is valued at R 250 000.00
There is no outstanding debt on the shares. The shareholders are as follows:
     2 white males;
     1 white woman; and
     1 black man.
Calculate the points the company will receive for ownership and incorporate your answers into the ownership scorecard at the top of the page.

The ARG is applied as follows:
Board Participation Formula: A = B / 1.76 + C
Top Management Formula: A = B / 1.62 + C




EXAMPLE:
MJ Construction (Pty) Ltd has the following breakdown of its board and top management:

•     Total voting rights by the board: 100
•      Total members on the board: 10 (10% voting rights each)
•      Total black board members : 4
•      Total black women board members: 1
•      Total no. of people in top management : 5
•      Total no. of black people in top management: 1
•      Total no. of black women in top management: 0

Calculate the points the company will receive for management and incorporate your answers into the scorecard above.

No bonus points are applicable
The ARG is applied as follows:

• Senior and Middle Management; Black disabled employees (both BEPs and Contractors); and Black employees in all management categories (BEPs only) - Formula: A = B / 1.62 + C
• Junior Management - Formula: A = B / 1.66 + C

No sub-minimum imposition is applicable.
Should any Contractor not make a distinction between Middle and Junior Management categories then the only two categories applicable are:

Senior Management : weight 5.25, target as indicated;
Junior Management: weight 4.25, target as indicated.

EXAMPLE:
MJ Construction submitted the above Employment Equity Report. Calculate the points the company will receive for employment equity and incorporate your answers into the scorecard below.

Total employees refer to the average number of employees over the measurement period (and not the total number at a particular point during the measurement period)The ARG is applied as follows:
Skills Spend on black employees - Formula: A = B / 1.2 + C
Skills Spend on black employees in management - Formula: A = B / 1.71 + C
Black learnerships and black people with disabilities on learnerships - Formula: A = B / 1.29 + C
Calculation for skills spend on black employees in management - Formula: A = D / E * W

S = the score applicable to the indicator (black management includes all levels of management)
D = [(the portion of SD spend on black management divided by the portion of SD spend on black people) / 1.71] + (the portion of SD spend on black female management divided by the portion of SD spent on black people). Multiply the result of the calculation with 100 to express as a %.
E = the target for this indicator (25%)
W = the weight of this indicator

Calculation for black people with disabilities participating in learnerships: Formula: V = Y / Z * X
V = the score applicable
Y = [( the number of black people with disabilities participating in Learnerships and / or Category B, C and D programmes divided by the number of black learnerships and black category B, C or D programme participants that form part or will form part of office based staff) / 1.29] + ( the number of black females with disabilities participating in learnerships and / or Category B, C or D programmes divided by the number of black learnerships that form part or will form part of office based staff). Multiply by 100 to express as a %.
Z = the target for this indicator (5%)
W = the weight of this indicator

Bursary related costs that can be included are limited to students that are currently employed or contractually obliged to work for the measured entity in the future.
An expansion is applicable to the definition of Learnerships, which will include Category A of the Learning Programme Matrix with regards to BEP’s only with reference to 1.2.1, 1.2.2, and 1.2.3. This will include, but is not limited to, engineers, architects, quantity surveyors and CAD draughtsman.

Mentorship -
Measurement:
Compare the company mentor programme with the provided list of criteria. If the programme complies with the list of requirements, it will qualify for recognition in the scorecard.
The verification agent will evaluate the portfolio of evidence for the protégés against the list provided.
The verification agent will randomly sample a few protégés to interview to determine the effectiveness of the program.
The verification agent will then sign off the program as compliant.
Criteria that constitute a mentor program are compliant:

Each company must have one person in the company who is responsible and accountable for mentoring, mentor champion.

Other Criteria:

1. The objectives and desired outcomes of the program;
2. The structure of the program;
3. The resources required and how they will be allocated;
4. Methods on how the protégés and mentors will be selected and matched;
5. The training for the mentors and protégés on their responsibilities toward the mentor relationship, which may include communication skills and conflict handling;
6. The training necessary to support the mentoring;
7. The time frames for the implementation of the program.

    
General Portfolio of evidence should include the following:

1. Monthly report to mentor champion on overall program;
2. CV of mentor champion;
3. Minutes of mentor committee meetings;
4. Plan of mentor program as indicated above.

Individual portfolio of evidence for each protégé to include the following:

1. Minutes of meetings between protégés and their mentors including details of time, location and duration of meetings, topics discussed advice and guidance given and progress review on required development outcomes.
2. Any training provided to support protégé development;
3. Attendance at mentor and protégé training for the program;
4. Individual development plan;
5. Development interventions;
6. Quarterly report on protégé benefits from mentor relationship;
7. Individual progress review on a quarterly basis against individual development plan;
8. Activities undertaken by the protégé including which departments the protégé worked in, details of job assignments and details of activities undertaken.

EXAMPLE
MJ Construction has an annual payroll of R 15 million and has submitted the following breakdown of its skill expenditure:

• Total training spend on all staff : R 250 000.00
• Total training spend on black staff: R 150 000.00
• Total training spend on black female staff: R 52 000.00
• Of the R 150 000 spent on black employees R 35 000 was spent on training a black people in management. Nothing was spent on black women in management.

Position the measured entity in the highest applicable turnover category on the basis of its total annual turnover in the current measurement period according to its Annual Financial Statements.
Apply the following calculation methodology:
A = the number of Dos that participated in an ED program compliant with the requirements over the current measurement period divided by the appropriate target number in Column X.
B = (the sum of the annual turnovers of the Dos counted in A divided by the annual turnover of the measured entity for the current measurement period) x 100 (use the DO’s latest 12 months turnover at the time of DO’s measurement)
C = B / 5 (5% is the turnover ratio requirement in Column Y)
D = A x C
Score = 5 (weighting) x D (the score cannot exceed 5; D cannot be >1)


Process of verification related to the ED program in order to allocate 5 points (points allocated on all or nothing basis).
A verification agent will:

• Ensure that all the pre-requisites for an ED relationship have been met over the period of measurement in order to recognize the ED program.
• Ensure that the ED program complies with the requirements.
• Interview the DO owner and selected staff to verify ED program claims.

Focus on Developing Organisations:
The focus on ED should be on the development of entities in the construction sector and periphery. Examples are as follows (but not limited to):

• Suppliers – suppliers of construction equipment, construction materials, hired plant/ machinery and formwork and the likes e.g. stationery, cleaning materials, electronic equipment etc.
• Professional service providers – auditing and financial service providers, legal services, services in the built environment professionals (architects, environmental consultants, engineering consultants, quantity surveyors, town planners, land surveyors, geologists, material testing laboratories) and other specialist consultants etc.
• Built environment service providers – contractors (building, interior decorators, painting, civil, mechanical, electrical and electronic) specialist sub contractors (geotech, piling, asphalt, landscaping, fencing, road making).

MJ Construction showed a NPAT of R 350 000.00. The company does not have an enterprise development program in place. However, the company provided one of its suppliers with an interest free loan for R 25 000.00. Upon further investigation the supplier is found to have qualified as a Category A enterprise development beneficiary. At the time of measurement the full value of the loan remains outstanding.

Calculate the points the company will achieve for enterprise development and insert in the adjacent table.