Friday 10 January 2014

Changes to BEE Codes & Some Key Points For QSE’s

The changes to the BEE Codes were introduced on 11 October 2013. Companies have a one year transition period. However if your BEE Certificate expires before 11 October 2014, companies may elect to use the amended codes or the original codes issued on 9 February 2007.
A QSE is a “Qualifying Small Enterprise”.
Some key points to note relating to a QSE and BEE Codes:
·         The turnover threshold for a QSE was R5-R35 million but with the new codes is R10-R50 million per annum.
·         Scorecard reduced from 7 elements to 5 – Management Control & Employment Equity is
                                                                             merged under “Management Control”
-                   Preferential Procurement & Enterprise Development merged under “Enterprise & Supplier Development”
·         Creation of 3 “Priority Elements” – Ownership; Skills Development and Enterprise & Supplier Development
·         QSE’s must comply, with sub-minima requirement of 40% of target, for Ownership and one other of the “Priority Elements”
·         A QSE that does not meet the sub-minima requirement for Ownership and one other Priority Element will have their B-BBEE status discounted by one level.
·         QSE will only need to produce an annual sworn affidavit confirming revenue and black ownership if they are more than 51% black owned.
·         A QSE with less than 51% black ownership is required to comply with all 5 elements of the scorecard and is subject to the discounting if sub-minima of 40% for Ownership and one other Priority Element, are not met.

These are just some key points worth noting if your business is a QSE in terms of the B-BBEE Codes.  The changes to the Codes impact on EME’s and large companies too. Companies that have not done so already will have until October 2014 to apply themselves to understanding these changes and designing a strategy for the way forward as the creation of the Priority Elements will impact on your BEE level if Ownership was not an element your business was previously scored on.

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