Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Codes of Good Practice on Black Economic Empowerment

Code Series 100: Measurement of the Ownership Element of Broad-Based Black Economic Empowerment

Statement 103 : Recognition of Equity equivalents for multinationals

Annexe 103(A)
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This formula is for determining the Ownership Score under an Equity Equivalent Programme using either of the targets in paragraph 5.2, where the contribution is made upfront on a once off basis.

 

 

A  = B x 20

C

Where:

 

A  is ownership points of the Multinational in any year arising from its equity equivalent contribution.

 

B is the value of contributions made.

 

C is the financial value of the target of 4% of total revenue from its South African operations annually over the period of continued measures.

 

 

This formula is for determining the Ownership Score under an Equity Equivalent Programme using either of the targets in paragraphs 5.2, where the contribution is made on an annual basis towards a ten year target is as follows:

 

 

A  = B  x (     1      ) x 20

C     (25% x D)

Where:

 

A  is ownership points of the Multinational in any year arising from its equity equivalent contribution.

 

B is the value of total contributions made prior to the date of measurement.

 

C is the financial value of the target in paragraph 4.2.1 or the ten year value of contributions to be made over the life of this statement.

 

D is the time-based graduation factor outlined being:

•10% for the first year after the commencement of statement 000;
•20% for the second year after the commencement of statement 000;
•40% from the first day of the third year after the commencement date of statement 000 to the end of the last day at the end of the fourth year after the commencement date of statement 000;
•60% from the first day of the fifty year after the commencement date of statement 000 to the last day at the end of the sixth year after the commencement date of statement 000;
•80% from the first day of the seventh year after the commencement date of statement 000 to the last day at the end of the eighth year after the commencement date of statement 000;
•100% from the ninth year after the commencement date of statement 000 to the last day at the end of the tenth year after the commencement date of statement 000.