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

"Absorbed"

means a measure of the Measured Entity’s ability to have successfully secured formal permanent or long-term contract employment for the Learner or to assist the Learner’s proceed with further education and training. Where the Learner was already employed by the Measured Entity when he commenced the Learnership and merely continues with his/her existing employment after the Learnership, it will not qualify as Absorption.

"Acquisition Debt"

means the debts of:

"Act"

means the Broad-Based Black Economic Empowerment Act 53 of 2003 as amended. The terms “B-BBEE Act” has a corresponding meaning.

"Apprenticeship"

means an Entity with which a Seller has concluded a Qualifying Transaction.

"B-BBEE"

means Broad-Based Black Economic Empowerment.

"B-BBEE Compliant Entity"

means a Measured Entity that has achieved at least a Level 1 to Level 8 B-BBEE Status Level as per statement CSC000;

"B-BBEE Controlled Company"

means for Entities measureable in terms of this Construction Sector Code, a juristic person (including a trust), having shareholding or similar members interest, in which black participants enjoy a right to Exercisable Voting Rights that is at least 51% of the total such rights measured using the Flow Through Principle.

"B-BBEE Owned Company"

means for Entities measureable in terms of this Construction Sector Code, a juristic person (including a trust), having shareholding or similar members interest, that is B-BBEE controlled, in which Black participants enjoy a right to Economic Interest that is at least 51% of the total such rights measured using the Flow Through Principle.

"B-BBEE Recognition Level"

means the percentage B-BBEE Recognition Levels as determined:

"B-BBEE Status"

means the B-BBEE status of a Measured Entity as determined under statement CSC000.

"B-BBEE Verification Professional Regulator"

means a body appointed by the Minister for the accreditation of rating agencies or the authorisation of B-BBEEE verification professionals.

"Benefit Factor"

means a factor specified in the Benefit Factor Matrix applicable to fixing the monetary value of Supplier Development and Socio-Economic Development Contributions claimable under statement CSC400 and CSC500.

"Benefit Matrix Factor"

means the Benefit Factor Matrix for Supplier Development and Socio-Economic Development Contributions claimable under statement CSC400 and CSC500.

"BEP"

means Built Environment Professional. These are enterprises that conduct the following activities: Planning, design and costing of construction projects in the built environment. Also, project management and design of a construction value chain including environment, energy, industrial, property, transport and infrastructure. Enterprises typically classified as BEP’s include, but are not limited to, consulting engineering practices, architects, quantity surveyors and town planners.

"Black Designated Groups"

means a person that at the date of acquiring their Rights of Ownership in the relevant entity qualified as:

"Black New Entrants"

means Black Participants who hold rights of ownership in a Measured Entity and who, before holding Equity Instruments in other Entities which has a total value of more than R50 million measured using a Standard Valuation Method.

"Black People"

Is a generic term which means African, Coloureds and Indians

"Broad-Based Ownership Scheme"

means an ownership scheme which meets the rules set out in Annexe CSC100 (B).

"Certified Learning Programme"

means any Learning Programme for which the Measured Entity has:

Attended the Training Programme but has failed an evaluation of their learning progress.

"Charter"

means the Construction Sector Charter as gazetted under section 12 of the Act.

"Codes of Good Practice"

means the Broad-Based Black Economic Empowerment Codes of Good Practice, 11 October 2013 (Gazette nr.32698) as amended. The term ‘General Codes’ or ‘Amended Codes’ has a corresponding meaning.

"Companies Act"

means the Companies Act, No. 71 of 2008 as amended or substituted.

"Competent Person"

means a person who has acquired through training, qualification and experience the knowledge and skills necessary for undertaking any task assigned to them under the codes.

"Construction Material Suppliers"

means enterprises that conduct the following activities: manufacturing, creation or supply of building material and equipment used in construction for example cement, concrete, bricks, electrical equipment and steel. It includes enterprises that provides plant hire for construction related activities.

"Construction Related Articles"

means the activities conducted by Contractors, BEP’s and Construction Material Suppliers

"Construction Sector"

means all enterprises who derive more than 50% of their annual Revenue from Related Activities. For the avoidance of doubt, being registered with any of the following bodies, does not automatically render the enteprise to be part of the Construction Sector:

The key consideration to determine whether a Measured Enterprise falls within the Construction Sector, notwithstanding registration with these bodies, remains whether or not the majority of its annual Revenue is derived from Construction Related Activities.

Construction Sector Charter Council (CSCC)

An executive authority established consequent to the gazette of the construction sector codes & is responsible for the monoting & oversight in the implementation of these construction sector codes.

"Construction Sector Code"

means this Revised Construction Sector Code issued in terms of section 9(1) of the Act. The abbreviation “CSC” has a corresponding meaning.

"Contractor/s"

means enterprises that conduct construction project activities that include, civil engineering, electrical engineering, power transmission, general building and specialist construction works as per the CIBD grading tables below:

CE Construction work primarily concerned with materials such as steel, concrete, earth and rock (water, sewerage, roads, railways, bridges, dams, cooling towers, grand stand.

EB Electrical engineering works, all electrical work forming an integral part of building including any wiring (installations in buildings, reticulations within a plot of land (erf) or building site.

EP Electrical power generation, transmission, control and distribution equipment and system (power generation, street and area lighting, substations and protection system).

GB Building and ancillary works other than civil engineering works, electrical engineering works, mechanical engineering works, specialist works (air –conditioning and mechanical, Boiler installation and steam distribution, central heating).

SB Asphalts or any other related business.

SC Building excavations, shaft sinking and lateral earth support.

SG Glazing, curtain walls and shop fronts.

SH Landscaping, irrigation and horticultural works.

SI Escalators, travellators and hoisting machinery.

SJ Specialized foundations for buildings and structures.

SL Structural steelwork and scaffolding.

SN The waterproofing of basements, roofs and walls using specialist systems.

"Core Skills"

means skills that are:

"Critical Skills"

means those skills identified as being critical by any SETA.

"Current Equity Interest Date"

means the later of the date of commencement of the old Construction Sector Code (Gazette 32259, 22 May 2009) and the effective date of the transaction being measured. This means that each operative transaction undertaken by the Measured Entity in order to achieve black rights of ownership is determined individually.

(HOWEVER, THE REVISED VERSION OF THIS DEFINITION AND ITS IMPLICATIONS WILL BE ISSUED BY THE CSCC THROUGH A PRACTICE NOTE WITHIN 12 MONTHS OF THE GAZETTE)

"EAP"

the national or provincial, whichever the case may be, Economically Active

Population as determined by Stats SA and annually published in the Commission for Employment Equity Report in terms of the employment Equity Regulations from time to time. The operative EAP for the purposes of any calculation under the Codes will be the annual EAP statistics published in the Commission for Employment Equity Report immediately preceding the Measurement Period being measured.

"Economic Interest"

means a claim against an Entity representing a return on ownership of the Entity similar in nature to a dividend right, measured using the Flow Through and, where applicable, the Modified Through Principles.

"Employment Equity Act"

means the Employment Equity Act No. 55 of 1998, as amended.

"Employment Equity Regulations"

means the regulations under the Employment Equity Act.

"Elements"

means the measurable quantitative or qualitative elements of B-BBEE compliance in the Large Enterprise Scorecard and the Codes.

"Employed Learner"

In terms of section 18(1) of the Skills Development Act it means a learner that was in the employment of the employer party to the learnership agreement concerned when the agreement was concluded. The learner’s contract of employment is therefore not affected by the agreement.

"Employee with a Disability"

has the meaning defined in the Code of Good Practice on Key Aspects of Disability in the Workplace issued under section 54 of the Employment Equity Act; aligned with the Employment Equity Act

"Employee"

bears the meaning as defined in the Employment Equity Act.

"Employee Share Ownership Programme"

means a worker or employee scheme as per Annexe CSC100(C).

"Empowering Supplier"

As defined by the DTi, when applicable

"Entity"

means a legal entity or a natural or a juristic person conducting a business, trade or profession in the Republic of South Africa.

"Entrepreneur"

means a person who starts and/ or operates a business which includes identifying opportunities in the market, taking risks with a view of being rewarded with profits.

"Equity Instrument"

means the instrument by which a Participant holds rights of ownership in an Entity.

"Equivalency Percentage"

means a percentage ownership performance for all the indicators in the Associated Enterprise’s Ownership Scorecard arising from a Qualifying Transaction included in the Ownership Scorecard of the beneficiary entity.

"Exclusion Principle"

is a measurement principle used when calculating the points for the various indicators of the Ownership scorecard that allows for the deduction of a number of rights of ownership (whether it be voting rights or economic interest), from the total of such rights issued by the Measured Entity, before expressing those rights of ownership held by black Participants, as a percentage of all such rights of ownership issued. Code CSC100 and its statements allows, as directed by those statements, for the exclusion of four categories of rights of ownership:

The exclusions of Ownership held through the entities in (a) to (c) above is to be effected before any exclusion in terms of (d) is to be applied.

"Executive Directors"

means those members of the Board who are executive directors as defined in the King III Report, as amended from time to time.

"Exempted Micro Enterprise"

means an Entity with a total annual Revenue of R10 (ten) million or less if it is a Contractor or R6 (six) million or less if it is a BEP.

"Exercisable Voting Rights"

meaning a voting right of a Participant that is not subject to any limit.

"Global Practice"

means a globally and informally applied practice of a Multinational, restricting alienation of equity in or the sale of businesses in its regional operations. The practice must have existed before the promulgation of the Act.

"Grant Contribution"

means the monetary value of Qualifying Contributions made by the Measured Entity to a beneficiary in the form of grants, donations, discounts and other similar quantifiable benefits which are not recoverable by the Measured Entity.

"Group Structure"

means an ownership arrangement whereby one or more Measured Entities that are juristic persons are subsidiaries of another Measured Entity that would qualify as a holding company.

"Higher Education Institution"

means a higher education institution as defined under the higher Education Act of 1997.

"Indicator Percentage"

means the percentage compliance of the Associated Entity for all the indicators of the Associated Enterprises ownership Scorecard. The calculation of indicator Percentages follows the rules in statement CSC100 using the actual percentage compliance for each indicator and not the resulting scores.

"Industry"

Collective term for enterprises that operate within the Construction Sector as outlined in par. 3.1 and 3.2 of CSC000.

"Internship"

means an opportunity to integrate career related experience into an undergraduate education by participating in planned, supervised work.

"Junior Management"

means an employee of the Measured Entity who is a member of the occupational category of “Junior Management” as determined using the Employment Equity Regulations.

"Large Enterprise"

means a Measured Entity with a total annual Revenue equal to or more than R50 million if it is a Contractor or equal to or more that R25 million if it is a BEP.

"Learnership"

means a work-based route to a qualification. It is a workplace education and training programme comprising both structured practical workplace (on-the-job) experience and structured theoretical training.

"Learning Programmes"

means any learning programme set out in the learning Programme Matrix

"Learning Programme Matrix

means the Learning Programme Matrix annexed as Annexe CSC300 (A) in

statement CSC300.

"Leviable Amount"

bears the meaning as defined in the Skills Development Levies Act of 1999 as determined using the Fourth Schedule to the Income Tax Act.

"Management Fees"

means the total Economic Interest received by a Broad-Based Ownership Scheme or Black participants in any year less the amounts distributed or applied to beneficiaries and the amounts reserved for the future distribution or application.

"Mandated Investment"

means any investments made by or through any third party regulated by South African legislation on behalf of the actual owner of the funds, pursuant to a mandate given by the owner to a third party, which mandate is governed by that legislation. Some examples of domestic mandated investments and the portions of those investments subject to the exclusion principle are contained in Annexe CSC100A attached to statement CSC100.

"Measured Entity"

means an Entity as well as an organ of state or public entity subject to measurement under the Codes.

"Measurement Period"

means, subject to the following, the financial period of the Measured Entity:

"Measurement Date"

means the last day of the Measurement Period or such later date agreed upon with the Measured Entity that is as close as practically possible to the commencement of the verification or to the making of the affidavit which ever the case may be. The term ‘Date of Measurement’ has a corresponding meaning.

(The ‘Ownership’ and ‘Management Control’ elements must be measured as at the Measurement Date. For the avoidance of doubt - these two elements may not be measured on different dates.)

"51% Black Owned"

means an Entity in which:

"100% Black Owned"

means an Entity in which:

"51 Black Women Owned"

means an Entity in which:

30% Black Owned

means an Entity in which:

30% Black Women Owned"

means an Entity in which:

"Middle Management"

means an employee of the Measured Entity who is a member of the occupational category of “Middle Management” as determined using the Employment Equity Regulations.

"Multinational Business"

means a Measured Entity with a business in the Republic of South African and elsewhere which maintains its international headquarters outside the Republic.

The term ‘South African Multinational’ has a similar meaning except that it has its international headquarters inside the Republic

"National Skills Development Strategy"

means the national skills development strategy referred to in section 5(1) (a) (ii) of the Skills Development Act.

"Net Profit After Tax"

means the operating profit of a measured entity after tax. It incorporates both the equity / loss figures and abnormal items, but excludes extra ordinary items as determined by the International Financial Reporting Standard (IFRIS) as amended from time to time.

"Net Profit Before Tax"

means the operating profit of a measured entity before tax. It incorporates both the equity / loss figures and abnormal items, but excludes extra ordinary items as determined by the International Financial Reporting Standard (IFRIS) as amended from time to time.

"Net Value"

means the points resulting from the application of paragraph 4 of Annexe CSC100(E) of statement CSC100.

"Non-Profit Company"

means a non-profit company as defined by the Companies Act 71 of 2008. The term also includes Section 21 Companies and Companies Limited by Guarantee as per the previous Companies Act.

"Non-Profit Organisation"

means a non-profit organisation registered under the Non-Profit Organisation Act of 1997.

"Original Codes"

means the Construction Sector Code, 12 June 2009 (Gazette no. 32320). The

term ‘Old CSC’ has a corresponding meaning.

"Organ of State"

has the meaning assigned to it in the Preferential Procurement Policy Framework Act 5 of 2000.

"Outsourced Labour Expenditure"

means any expenditure incurred in:

"Participant"

means a natural person holding rights of ownership in a Measured Entity.

"Pivotal Report"

means a report on ‘Professional, Vocational, Technical and Academic Learning’ programmes that meet the critical needs for economic growth and social development, generally combining course work at universities, universities of technology and colleges with structured learning at work.

"Priority Skills"

means Core, Critical and Scarce Skills as well as any skills specifically identified:

"Private Equity Fund"

means a third party fund through which investments are made on behalf of the actual owner of the funds pursuant to a mandate given by that person to the private equity fund.

"Professionally Registered Person" Or "Registered Professional"

A Professional means a suitably qualified practicioner requiring statutory registration with a recognised and authorised Council or Body in the Built Environment of South Africa; that monitors and regulates competency, codes of ethics and continuing professional development. Once registered as a Professional this person is authorised to practice in a field of expertise and is known as a “professionally registered person” or “registered professional”

"Public Entity"

has the meaning assigned to it in the Public Finance Management Act no.1 of 1999.

"Public Benefit Organisation"

means an entity as defined in section 30 of the Income Tax Act of 1962.

"Qualifying Beneficiary Entities"

means recipients of Qualifying Supplier Development Contributions.

"Qualifying Supplier Development Contributions"

means Supplier Development Contributions targeting Entities:

"Qualifying Small Enterprise"

means an Entity that qualifies for measurement under the Qualifying Small

Enterprise scorecard with a total annual Revenue of more than R10 million but less than R50 million if it is a Contractor or more than R6 million but less than R25 million if it is a BEP. The abbreviation ‘QSE’ has a corresponding meaning.

"Qualifying Socio-Economic Contributions"

is a collective term for Socio-Economic Project Contributions, Socio-Economic Development Contributions and Structured SED Projects.

"Qualifying Transaction"

means a sale of business, valuable business assets or shares that results in the creation of specialised skills or productive capacity to Black People.

"Related Enterprise"

means an Entity controlled by a Measured Entity whether directly or indirectly controlled by the natural persons who have direct or indirect control over that Measured Entity or the immediate family of those natural persons.

"Revenue"

has the meaning ascribed to it in the International Financial Reporting Standard (IFRIS, International Accounting Standard 18) as amended from time to time.

"Rights of Ownership"

is a collective term for the right to Economic Interest and the right to Exercisable Voting Rights.

"Scarce Skills"

are those skills identified as being scarce by any SETA, or STATS SA

"Sector Code"

means a code in statement 003 which is applicable to a particular sector.

"Sector Specific Contributions"

Qualifying Socio-Economic Contributions and/or initiatives approved by the Construction Sector Charter Council for the sub-sector in which the Measured Entity operates. Such contributions are extraneous to the Measured Entity’s regular business activities and do not form part of any legal obligation upon the enterprise.

"Seller"

means the Entity or the person concluding a Qualifying Transaction with the Associated Enterprise.

"Senior Management"

means an employee of the Measured Entity who is a member of the occupational category of “Senior Management” as determined using the Employment Equity Regulations.

"Skills Development Expenditure"

comprises the legitimate training expenses that a Measured Entity incurs on skills development. It excludes the skills development levy payable by the Measured Entity under the Skills Development Levies Act.

"Socio-Economic Development Contributions"

means monetary or non-monetary contribution implemented for communities, natural persons or groups of natural persons that benefit Black People. The objective of Socio-Economic Development Contributions is the promotion of sustainable access for the beneficiaries to the economy. Socio-Economic Development Contributions commonly take the following forms:

"Socio-Economic Project Contributions"

means monetary or non-monetary contributions carried out for the benefit of any projects approved for this purpose by any organ of state or the Construction Sector Charter Council including without limitation:

"South African Operations"

means operations and work executed within South Africa

"Standard Valuation Method"

means a standard valuation method for an asset, an Economic Interest, or any other instrument or right relevant to measurement under Code CSC100, undertaken using normal valuation methods that represent standard market practice.

"Start-up Enterprise"

means a recently formed or incorporated Entity that has been in operation for less than 1 year. An entity that was formed and incorporated some time ago but which has been dormant (non-operational), will qualify as a start-up enterprise for the first year after it commences operations. A start-up enterprise does not include any newly constituted enterprise which is merely a continuation of a pre-existing enterprise.

"Structured SED Projects"

means Socio-Economic Development Contributions or Socio-Economic Project Contributions that are made in accordance with a structured SED plan. This plan should include:

"Subsidiary"

has a meaning defined in section 1(3) of the Companies Act.

"Suitable Evidence or Documentation"

means, notwithstanding any provisions to the contrary in the Verification Manual (Gazetted 31255, 18 July 2008) as amended from time to time, evidence or documentation that includes without limiting the generality of the term:

"Supplier"

means any distributor, supplier, service provider, consultant or Contractor to the broader Construction Industry (i.e not necessarily to the Measured Entity).

"Supplier Development Contributions"

means monetary or non-monetary contributions as per Statement CSC400 read together with Annexe CSC400(B) carried out for the benefit of Suppliers (as defined above), with the objective of contributing to the development, sustainability and financial and operational independence of those Suppliers

"Target"

means the targets for the various Elements in the Large Enterprise and QSE

Scorecard

"the Act"

means the Broad-Based Black Economic Empowerment Act 53 of 2003 as amended.

"the Codes"

means the Codes of Good Practice including all statements as issued under section 9 of the Act.

"the Large Enterprise Scorecard"

means the balanced B-BBEE scorecard for large enterprises as contained in statement CSC000.

"the PFMA"

means the Public Finance Management Act 1 of 1999 as amended.

"the QSE Scorecard"

means the QSE scorecard referred to in statement 000.

"the Skills Development Act"

means the Skills Development Act of 1998.

"the Skills Development Levies Act"

means the Skills Development Levies Act of 1999.

"the Strategy Document

means the document entitled “South Africa’s Economic Transformation – A Strategy for Broad-Based Black Economic Empowerment” published by the Department of Trade and Industry in March 2003 as amended or substituted under section 11 of the Act.

"Third Party Rights"

means third party legal or commercial rights that restrict withhold or defer any benefit associated with ownership of any Equity Instrument. Third party rights include only those rights:

"Total Labour Cost"

means the total amount of remuneration paid by an Entity to its employees determined using section 3(4) of the Skills Development Levies Act of 1999 and the Forth Scheduled of the Income Tax Act of 1962

"Transformation Charters"

means the sectoral transformation charters referred to in section 12 of the Act.

"Total Labour Cost"

means the total amount of remuneration paid by an Entity to its employees determined using section 3(4) of the Skills Development Levies Act of 1999 and the Forth Scheduled of the Income Tax Act of 1962

"Transformation Charters"

means the sectoral transformation charters referred to in section 12 of the Act.

"Unemployed Learner"

means a learner that was not in the employment of the employer party to the Learnership, Apprenticeship or Internship concerned when the Learnership, Apprenticeship or Internship commenced. The employer and learner must therefore enter into a contract of employment. For the avoidance of doubt, the employer is not necessarily the Measured Entity. Refer to the Skills Development Act.

"Unincorporated Joint Venture"

Means a joint venture between two or more Measured Entities affected by

agreement without incorporation of those entities into a single juristic person. It is normally, although not necessarily, formed ad-hoc for a specific project, in which two or more parties share the obligations, risks and rewards.

"Voting Right"

means a voting right attaching to an Equity Instrument owned by or held for a participant measured using the Flow through Principle or the Modified Flow Through Principle.

"Weighting"

means the weightings applied to various Elements in the Large Enterprise Scorecard and QSE Scorecard.

"Workplace Skills Plan"

means the plan of a Measured Entity approved by the relevant SETA.