Ownership

Ownership

 

Criteria

Weighting Points

Compliance Target

Voting Rights

 

 

Exercisable Voting Rights in the Entity in the hands of Black people

4

25% + 1 vote

Exercisable Voting Rights in the Entity in the hands of Black women

2

10%

Economic Interest

 

 

Economic Interest in the Entity to which Black people are entitled

4

25%

Economic Interest in the Entity to which Black women are entitled

2

10%

Economic Interest of any of the following Black natural people in the Measured Entity:

·         Black designated groups;

·         Black participants in Employee Share Ownership Programmes;

·         Black people in Broad-Based Ownership Schemes;

·         Black participants in Cooperatives

3

3%

New Entrants

2

2%

Realisation Points

 

 

Net Value

8

Refer to Annexure 100 (E)

 

Key Principles:

Ownership is a priority element and therefore a 40% sub minimum of the Net Value must be achieved in order to avoid the discounting principle. To avoid doubt, that is 3.2 points for Net Value.

  • New entrants and Black natural people are now a requirement as opposed to a bonus point awarded in the Old Codes.

Net Value Calculation deciphered:

There is 2 steps to this calculation:

Step 1: Determine the Deemed Net Value

Deemed Net Value: A = (B-C) / D

A: Deemed Net Value

B: Black shareholding percentage (Economic Interest in the hands of Black people) on measurement date

C: Value of acquisition debt (debt that the black shareholder is still owing on the shares) from Black participants

D: Value of the Entity on measurement date

 

Step 2: Select the lower result of Formula A and Formula B

 

Formula A: A = B x (1/ (25% x C)) x 8

A: Result

B: Deemed Net Value

C: Time based graduation factor:             

10% for the first year after the current equity interest date.

20% for the second year after the current equity interest date.

40% from the first day of the third year after the current equity interest date to the last day of the fourth year after the current equity interest date.

60% from the first day of the fifth year after the current equity interest date to the last day of the sixth year after the current equity interest date.

80% from the first day of the seventh year after the current equity interest date to the last day of the eighth year after the current equity interest date.

100% from the first day of the ninth year after the current equity interest date to the last day of the tenth year after the current equity interest date.

 

Formula B: A = (B/C) x 8

A: Result

B: Black Economic Interest percentage

C: Target for Economic Interest in the Entity to which Black people are entitled (i.e. 25%)

 

After completing the calculation of Formula A and Formula B, the lower of the two results will be the points that will be awarded out of the total 8 points for the Net Value indicator.

Definitions: 

Black Designated Groups – This group includes the following groups of individuals:

  • Unemployed black people not attending and not required by law to attend an educational institution and not awaiting admission to an educational institution.
  • Black people who are youth as defined in the National Youth Commission Act of 1996.
  • Black people who are persons with disabilities as defined in the Code of Good Practice on employment of people with disabilities issued under the employment act.
  • Black people living in rural and under-developed areas. 
  • Black military veterans who qualifies to be called a  military veteran in terms of the Military Veterans Act 18 of 2011.

 

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