| (1) | The contractor grading designation of a contractor is determined by determining the least of— |
| (a) | the financial capability of the contractor in accordance with subregulation (2); and |
| (b) | the works capability of the contractor in accordance with subregulation (5). |
| (2) | The financial capability of a contractor is determined either in accordance with method A as set out in subregulation (2A) or in accordance with method B as set out in subregulation (2B), but method B may not be applied to an application for registration in grades 2 to 4. |
[Regulation 11(2) inserted by regulation 11(a) of Notice No. R. 1224 dated 14 November 2008]
| (2A) | Method A for determining the financial capability of a contractor comprises establishing whether— |
| (a) | the contractor's best annual turnover over the two financial years immediately preceding the application equals or exceeds the minimum annual turnover in the third column of Table 1 determined in relation to the financial capability designation contemplated in regulation 12(1); |
| (b) | the contractor during the five years immediately preceding the application has completed at least one construction works contract of which the total contract value exceeds the amount in the fourth column of Table 1 of the financial capability referred to in regulation 12(1); and |
| (c) | the contractor has available capital calculated in accordance with subregulation (3), equal to or exceeding a value determined in relation to the financial capability designation as contemplated in regulation 12(1). |
[Regulation 11(2A) inserted by regulation 11(a) of Notice No. R. 1224 dated 14 November 2008]
| (2B) | Method B for determining the financial capability of a contractor comprises establishing whether the contractor has available capital, calculated in accordance with subregulation (3), equal to or exceeding the value determined in relation to the financial capability designation as contemplated in regulation 12(1). |
[Regulation 11(2A) inserted by regulation 11(a) of Notice No. R. 1224 dated 14 November 2008]
| (3) | Available capital is calculated by adding any financial sponsorship to the sum of the net asset value of a contractor as indicated in the contractor's financial statements, and financial sponsorship— |
| (a) | where the sponsor is a registered contractor or owns 50 percent or more of the applicant contractor, may constitute up to 100 percent of the total amount of required available capital; |
| (b) | where the sponsor is not a registered contractor and owns 25 percent or more of the applicant contractor, may not exceed 75 percent of the total amount of the required available capital; and |
| (c) | where the contractor is not a registered contractor and the sponsor owns less than 25 percent of the applicant contractor, may not exceed 50 percent of the total amount of the required available capital; |
[Regulation 11(3) substituted by regulation 11(b) of Notice No. R. 1224 dated 14 November 2008]
| (3A) | Despite anything to the contrary in these Regulations, if an application is made in terms of these Regulations— |
| (i) | in the case of a company, within 6 months from the end of its financial year; and |
| (ii) | in the case of a close corporation, within 4 months from the end of its financial year, |
the financial statements of the two years immediately preceding the last financial year may be taken into account.
[Regulation 11(3A) substituted by regulation 11(c) of Notice No. R. 1224 dated 14 November 2008]
| (4) | For the purpose of determining the contractor grading designation of a contractor, the records of one contractor may be transferred to another contractor and treated as if it were the same entity for the purpose of assessment in the case of— |
| (a) | the first contractor being a sole proprietor, partnership or trust who establishes a company or close corporation in terms of the Companies Act, 1973 or the Close Corporations Act, 1984; |
| (b) | a change of name of a company; |
| (c) | the reconstruction of a company; |
| (d) | the amalgamation of companies; |
| (e) | the takeover of a company; |
| (f) | a scheme of arrangement in terms of sections 311 to 313 of the Companies Act, 1973; |
| (g) | the conversion of a company to a close corporation in terms of section 27 of the Close Corporations Act, 1984; and |
| (h) | a change in membership or members' interests of a close corporation. |
[Regulation 11(4) substituted by regulation 11(d) of Notice No. R. 1224 dated 14 November 2008]
| (5) | The works capability of a contractor must be determined by establishing whether— |
| (a) | in the case of Method A as contemplated in subregulation (2A),— |
| (i) | the contractor employs the requisite number of qualified persons as contemplated in regulation 12(4) in the class of works as indicated in Schedule 3, for which the contractor wishes to register; |
| (ii) | the contractor has satisfied the requirements contemplated in regulation 12(5) or 12(8) in relation to any specific class of construction works; and |
| (iii) | the contractor has during the five years immediately preceding the application completed at least one construction works contract in the category of construction works for which the contractor wishes to register, of which the value exceeds the amount of that works capability designation as contemplated in regulation 12(7); or |
| (b) | in the case of Method B contemplated in subregulation (2B)- |
| (i) | the contractor employs the requisite number of qualified persons as contemplated in regulation 12(4) in the class of works as indicated in Schedule 3, for which the contractor wishes to register; and |
| (ii) | the contractor has satisfied requirements contemplated in regulation 12(5) or 12(8) in relation to any specific class of construction works. |
[Regulation 11(5) substituted by regulation 11(e) of Notice No. R. 1224 dated 14 November 2008]
