Interpretations

This section provides a glossary of all relevant and known B-BBEE terms and definitions applicable to this Sector Code. Definitions marked by an asterisk (*), are definitions that have been extracted from the Codes of Good Practice. Where these have been added to for the sake of clarity, the additions have been italicised.
With regard to the definitions extracted from the Codes of Good practice, the following provisions of the code will also apply to these definitions:

When interpreting the provisions of the Code, any reasonable interpretation consistent with the objectives of the Act and the B-BBEE Strategy must take precedence.
Words importing persons shall, where the context so requires or admits, include individuals, firms, partnerships, trusts, corporations, governmental bodies, authorities, agencies, unincorporated bodies of persons or associations and any organisation having legal capacity.
The schedules and annexes to the Codes are an integral part of the Codes and a reference to the Codes includes a reference to the schedules.

‘ABET'* means Adult Based Education and Training as determined by the National Qualifications Authority.
‘Accountancy profession' means, for the purpose of this document, the professional accountancy bodies and their members recorded in figure 1 (and its footnote), but not limited to those. In addition it includes organisations predominantly owned by members of these professional bodies offering accounting, audit, tax, consulting and advisory, internal auditing and other related services.
‘Accreditation Body'* means the South African National Accreditation System or any other Entity appointed by the Minister from time to time for the purpose of -

accrediting of Verification Agencies; and
developing, maintaining and enforcing the Verification Standards.

‘Affiliated entities' mean those incorporated entities, trusts, partnerships and other business forms in the CA sector in which a participant, partner and/or partnership controls in excess of 25% of the voting power and which provide accountancy and related professional services to their clients, which collectively constitute a Measured Entity.
‘Approved Socio-economic Development Contributions'* mean monetary or non-monetary contributions carried out for the benefit of any projects approved for this purpose by any organ of state or sectors including without limitation -

projects focusing on environmental conservation, awareness, education and waste management; and
projects targeting infrastructural development, enterprise creation or reconstruction in underdeveloped areas, rural communities or geographic areas identified in the government's integrated sustainable rural development or urban renewal programmes.

‘Associated Enterprise'* means an Entity with which a Seller has concluded a Qualifying Transaction.
‘B-BBEE'* means Broad-Based Black Economic Empowerment.
‘BEE Controlled Company'* means a juristic person, having share holding or similar members' interest, in which black participants enjoy a right to Exercisable Voting Rights that is more than 50% of the total such rights measured using the Flow Through Principle.
‘BEE Owned Company'* means a juristic person, having share holding or similar members' interest, that is B-BBEE controlled, in which black participants enjoy a right to Economic interest that is more than 50% of the total such rights measured using the Flow Through Principle.
‘BEE Procurement Recognition Level'* means the percentage B-BBEE Procurement Recognition Levels as determined -

for Enterprises that are neither Qualifying Small Enterprises nor Exempted Micro Enterprises, using statement 000;
for Qualifying Small Enterprises, using statement 800; and
for Exempted Micro Enterprises, a deemed B-BBEE Procurement Recognition of 100% and B-BBEE Status of Level 4 Contributor under statement 800.

‘BEE Status'* means the B-BBEE status of a beneficiary of Enterprise Development Contributions as determined under -

statement 800 for Qualifying Small Enterprises and Exempted Micro Enterprises; and
statement 000 for all other Enterprises.

‘Benefit Factor'* means a factor specified in the Benefit Factor Matrix applicable to fixing the monetary value of Enterprise Development and Socio-economic Development Contributions claimable under statements 600, 700, 806 and 807.
‘Benefit Factor Matrix'* means the Benefit Factor Matrix for Enterprise Development and Socio-economic Development Contributions annexed to statements 600, 700, 806 and 807.
‘Black Designated Groups'* mean -

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; as persons between the ages of 14 and 35.
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 Equity Act; In terms of the Employment Equity Act ‘people with disabilities' means people who have a long-term or recurring physical or mental impairment which substantially limits their prospects of entry into, or advancement in, employment.; and
black people living in rural and underdeveloped areas.

‘Black New Entrants'* mean black participants who hold rights of ownership in a Measured Entity and who, before holding the Equity Instrument in the Measured entity, have not held equity instruments in any other Entity which has a total value of more than R20 million, measured using a standard valuation method.
‘Black People'* has the meaning defined in the Act qualified as including only natural persons who are citizens of the Republic of South Africa by birth or descent; or are citizens of the Republic of South Africa by naturalisation -

occurring before the commencement date of the Constitution of the Republic of South Africa Act of 1993; or
occurring after the commencement date of the Constitution of the Republic of South Africa Act of 1993, but who, without the Apartheid policy would have qualified for naturalisation before then.

‘Black Professional Service Provider'* means black individuals who provide services of a professional nature.
‘Certified Learning Programme'* means any Learning Programme for which the Measured Entity has -

any form of independent written certification as referred to in the ‘Learning Achievements' column of the Learning Programmes Matrix, or if it does not have such certification:
an enrolment certificate issued by the independent person responsible for the issue of certification referred to in statement 400 and 804 confirming the employee has -
enrolled for, is attending and is making satisfactory progress in the Learning Programme; or
enrolled for but not attended the Learning; or
attended the Training Programme but has failed an evaluation of their learning progress.

‘Charter Council' means a council established in terms of code 000, statement 010 to fulfil the functions set out in annex 010-A.
‘CA profession' means

anyone who holds or is working towards obtaining the CA(SA) designation inside and outside of public practice,
those persons employed by an accredited CA(SA) education provider who are directly involved in providing such education,
the South African Institute of Chartered Accountants with which holders of the designation CA(SA) are registered, and
organisations registered and practising as CAs(SA) and/or RAs and affiliated entities of all such organisations (to be known as the CA sector for purposes of this Sector Code) and people employed by such organisations.

‘CA Sector Code scorecard' means the scorecard for the measurement of broad-based B-BBEE in terms of this Sector Code.
‘Companies Act'* means the Companies Act 61 of 1973, as amended or substituted.
‘Company Limited by Guarantee'* means a company as referred to in section 19(1)(b) of the Companies Act.
‘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.
‘Core Skills'* mean skills that are -

value-adding to the activities of the Measured Entity in line with its core business;
in areas the Measured Entity cannot outsource; or
within the production / operational part of the Measured Entity's value chain, as opposed to the supply side, services or downstream operations.

‘Critical Skills'* mean those skills to be identified by any SETA.
‘Disabled Employees'* 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.
‘dti' means the Department of Trade and Industry.
‘EAP'* means Economically Active Population as determined and published by Stats SA. The operative EAP for the purposes of any calculation under the Codes will be the most recently published EAP.
‘Economic Interest'* means a claim against an Entity representing a return on ownership of the Entity similar in nature to a dividend right, measured in accordance with the Flow-Through and Modified Flow-Through Principles.
‘EE Act'* means the Employment Equity Act of 1998, as amended.
‘EE Regulations'* mean the regulations under the Employment Equity Act.
‘Elements'* mean the measurable quantitative or qualitative elements of B-BBEE compliance in the generic Scorecard and the Primary Codes.
‘Employee'* bears the meaning as defined in the Labour Relations Act 66 of 1995, as amended.
‘Employee Ownership Scheme'* means a worker or employee scheme.
‘Employment equity' means, in terms of the Employment Equity Act, 1998, that its purpose is to achieve equality in the workplace by -

promoting equal opportunity and fair treatment in employment through the elimination of unfair discrimination; and
Implementing affirmative action measures to redress the disadvantages in employment experienced by black designated groups, in order to ensure their equitable representation in all occupational categories and levels in the workforce.

‘Entity'* means a natural or 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.
‘Enterprise Development Contributions'* mean monetary or non-monetary contributions carried out for the following beneficiaries, with the objective of contributing to the development, sustainability and financial and operational independence of those beneficiaries.

Category A Enterprise Development Contributions involve enterprise Development Contributions to Exempted Micro Enterprises or Qualifying Small Enterprises which are 50% black owned or black woman owned; and
Category B Enterprise Development Contributions involve enterprise Development Contributions to any other Entity that is 50% black owned or black woman owned or 25% black owned or black woman owned with a B-BBEE Status of between Level One and Level Six.

‘Equity Instrument'* means the instrument by which a Participant holds rights of ownership in an enterprise.
‘Executive committee' means, for purposes of direct empowerment in the CA profession, the committee responsible for the design and / or implementation of strategy and the executive or operational management of the organisation.
‘Executive Members of the Board'* mean those members of the Board who are executive directors as defined in the King Report.
‘Exempted Micro Enterprise' means an Entity with an annual turnover of less than R5 million.
‘Exercisable Voting Right'* means a voting right of a participant that is not subject to any limit.
‘GAAP' means either International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board, or Standards of Generally Accepted Accounting Practice (SA GAAP) codified by the Accounting Practices Board and issued by the South African Institute of Chartered Accountants, whichever is applicable to the entity.
‘Global Practice'* means a globally and uniformly 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.
‘Higher Education Institution'* means a Higher Education Institution as defined under the Higher Education Act of 1997.
‘Inception Date'* means a date specified by a Measured Entity as being the date from which its Contributions are measurable before the commencement date of statements 600, 700, 806 and 807.
‘Independent Non-Executive Board Members'* mean those members of the Board that are independent directors as defined in the King Report.
‘Independent Regulatory Board for Auditors' means the Independent Regulatory Board for Auditors established in terms of section 3 of the AP Act, 2005.
‘King Report'* means the King Report on Corporate Governance for South Africa 2009 authored by the King Committee on Corporate Governance of the Institute of Directors in Southern Africa.
‘Learning Programmes'* mean any Learning Programmes set out in the Learning Programmes Matrix.
‘Learning Programmes Matrix'* means the Learning Programmes Matrix annexed as Annexe 400A 804(A) in statement 400 and 804.
‘Leviable Amount'* bears the meaning as defined in the Skills Development Levies Act of 1999 as determined using the Fourth Schedule of the Income Tax Act.
‘Management' typically means those persons who would form the governing body, executive committee or others who take responsibility for managing and implementing significant parts of the strategy. Such other persons would include representatives whose main task consist of -

determining and formulating policy and strategic planning; or
operational implementation which includes the planning, directing and coordination of the policies and activities of the enterprise.

Management, in terms of the definitions to the AP Act, 2005, in relation to an entity which is a company, means the board of directors of the company and, in relation to any other entity, means the body or individual responsible for the management of the business of the entity.
In terms of code series 200, statement 200, management* includes

Senior Top Management, such as the chief executive officer, the chief operating officer, the chief financial officer and other people holding similar positions; and
Other Top Management, such as the chief information officer, the heads of marketing, sales public relations, transformation and human resources as well as other people holding similar positions.

‘Management Fees'* mean the total Economic Interest received by a Broad-Based Ownership Scheme in any year less the amounts distributed or applied to beneficiaries and the amounts reserved for future distribution or application.
‘Measured Entity'* means any Entity as well as any organ of state or public entity subject to measurement under the Codes.
‘50% black owned'* means an Entity in which -

black people hold more than 50% of the Exercisable Voting Rights as determined under Code series 100;
black people hold more than 50% of the economic interest as determined under Code series 100; and
has earned all the points for Net Value under statement 100.

‘50% black woman owned'* means an Entity in which -

black women hold more than 50% of the Exercisable Voting Rights as determined under Code series 100;
black women hold more than 50% of the Economic Interest as determined under Code series 100; and
has earned all the points for Net Value under statement 100.

‘30% black owned'* means an Entity in which -

black women hold more than 30% of the Exercisable Voting Rights as determined under Code series 100;
black women hold more than 30% of the Economic Interest as determined under Code series 100; and
has earned all the points for Net Value under statement 100.

‘Multinational Business'* means a Measured Entity with a business in the Republic of South Africa and elsewhere which maintains its international headquarters outside the Republic.
‘National Skills Development Strategy'* means the National Skills Development Strategy referred to in section 5(1)(a)(ii) of the Skills Development Its mission is to contribute to sustainable development of skills growth, development and equity of skills development institutions by aligning their work and resources to the skills needs for effective delivery and implementation.
‘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 extraordinary items as determined by Generally Accepted Accounting Practices (GAAP) (see the definition of GAAP).
‘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 extraordinary items as determined by Generally Accepted Accounting Practices (GAAP).
‘Net Value'* means the percentage resulting from the formula in Annexe 100(C) of statement 100.
‘Non-profit Organisation'* means a non-profit organisation registered under the Non-profit Organisation Act of 1997.
‘Occupational levels' mean the occupational levels specified in Form EEA9 gazetted as a regulation under the Employment Equity Act.
‘Outsourced Labour Expenditure'* means any expenditure incurred in -

procuring the services of or from a labour broker; and
procuring the services of any person who receives any remuneration or to whom any remuneration accrues because of any services rendered by such person to or on behalf of a labour broker.

‘Ownership Fulfilment'* has the same meaning as referred to in the ownership Scorecard in statement 100.
‘Participant'* means a natural person holding rights of ownership in a Measured Entity.
‘Partners/partnership' means, in addition to partners of a duly constituted partnership, also the following:

Sole practitioners, incorporated practices and, for the purpose of this document, affiliated entities.
Sole practitioners, directors of incorporated entities and directors and individuals who are shareholders of affiliated entities.
Persons in the employ of a partnership who, but for regulatory constraints, would have been partners and who are accorded the same equity interest and status as partners and enjoy rights and benefits commensurate with and equivalent to partners.

‘Population demographics' mean, for the purpose of this document, the South African demographics in terms of race, gender and disability.
‘Priority Skills'* mean Core, Critical and Scarce Skills as well as any skills specifically identified -

in a Sector Skills Plan issued by the Department of Labour of the Republic of South Africa; and
by the Joint Initiative for Priority Skills Acquisition (JIPSA) established as part of the Accelerated and Shared Growth Initiative - South Africa (ASGISA).

‘Public accountant' means any person who is engaged in public practice.
‘Public Benefit Organisation'* means an Entity as defined in section 30 of the Income Tax Act of 1962.
‘Public practice' means the practice of a Registered Auditor who places professional services at the disposal of the public for reward, and ‘practice' has a similar meaning.
‘QSE'* means a Qualifying Small Entity that qualifies for measurement under the Qualifying Small Enterprise Scorecard, with a turnover of between R5 and R35 million. ‘Qualifying Enterprise Development Contributions' is a collective term describing Category A and B Enterprise Development Contributions and in particular Enterprise Development Contributions targeting black-owned EMEs and QSEs, and black youth in rural and underdeveloped areas in statement 600.
‘Realisation Points'* mean the Ownership Fulfilment point added to the Net Value points in the ownership Scorecard.
‘Registered Auditor' means an individual or firm registered as an auditor with the Independent Regulatory Board for Auditors.
‘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.
‘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.
‘Section 21 company'* means an association not for gain incorporated under section 21 of the Companies Act.
‘Sector Code' means a code in statement 003 which is applicable to a particular sector.
‘Sector Specific Programmes' mean Sector Specific Programmes that are recognised on the bases set forth in the Sector Code governing them.
‘Senior Top Management'* means Employees of a Measured Entity who are

members of the occupation category of ‘Top Management' as determined using the EE Regulations as qualified in a Sector Code;
appointed by or upon the authority of the Board to undertake the day-to-day management of that Measured Entity and who
have individual responsibility for the overall management and for the financial management of that Measured Entity; and
actively involved in developing and implementing the Measured Entity's overall strategy.

‘Skills Development' means, for purposes of this document, the following: While there is no definition in the Skills Development Act of ‘skills development', per se, the Skills Development Act (Act 97 of 1998) was enacted to -

provide an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce;
integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Act, 1995;
provide for learnerships that lead to recognised occupational qualifications;
provide for the financing of skills development by means of a levy-financing scheme and a National Skills Fund;
provide for and regulate employment services; and
provide for matters connected therewith.

‘Skills Development Act'* means the Skills Development Act of 1998.
‘Skills Development Expenditure'* comprises the money that a Measured Entity spends on skills development. It excludes the skills development levy payable by the Measured Entity under the Skills Development Levies Act.
‘Skills Development Levies Act'* means the Skills Development Levies Act of 1999.
‘Socio-economic Development Programmes'* commonly take the following forms:

development programmes for women, youth, people with disabilities, people living in rural areas;
support for healthcare and HIV/AIDS programmes;
support for education programmes, resources and materials at primary, secondary and tertiary education level, as well as bursaries and scholarships;
community training skills development for unemployed people and adult basic education and training; or
support for arts, cultural or sporting development programmes.

‘Standard Valuation Method'* means a Standard Valuation Method for an asset, an Economic Interest or any other instrument or right relevant to measurement under statement 100, undertaken using normal valuation methods that represent standard market practise.
‘Start-up Enterprise'* means a recently formed or incorporated Entity that has been in operation for less than one year. A start-up enterprise does not include any newly constituted enterprise which is merely a continuation of a pre-existing enterprise.
‘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 in terms of section 11 of the Act.
‘Subsidiary'* has the meaning defined in section 1(3) of the Companies Act.
‘Superior Contributor to B-BBEE'* is a Level One to Level Four Contributor to B-BBEE.
‘Supplier'* means any supplier or service provider to a Measured Entity if any portion of the supply or service provision within the definition of Total Measured Procurement Spend.
‘Target'* means the targets for the various Elements in the Generic, QSE and the CA sector scorecard.
‘The Act'* means the Broad-Based Black Economic Empowerment Act, 2003 (Act 53 of 2003).
‘The Codes'* mean the Codes of Good Practice including all the statements as issued in terms of section 9 of the Act.
‘The Generic Scorecard'* means the balanced B-BBEE scorecard as contained in statement 100.
‘The PFMA'* means the Public Finance Management Act, 1 of 1999, as amended.
‘The QSE Scorecard'* means the QSE scorecard referred to in statement 800.
‘Third Party Rights'* mean 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

created against a black Participant to secure, for a lender, repayment of a loan advanced to that Participant for financing their purchase of their equity instrument in the Measured Entity;
held against a juristic person or trust that is in the chain of ownership between the Measured Entity and that the eventual black Participant serving the same purpose mentioned in (a) above.

‘Top Manager'* means the employees of a Measured Entity who hold rights of ownership, serve on the Board, undertake the day to day management, have overall responsibility for the overall financial management and are actively involved in developing and implementing the overall strategy of the Measured Entity.
‘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 Schedule of the Income Tax Act of 1962.
‘Total Revenue'* means the total income of an Entity from its operations as determined under South African Generally Accepted Accounting Practice.
‘Training Inside Public Practice (TIPP)' means training that takes place at a registered training office in public practice or the office of the Auditor-general that is approved and registered with SAICA as an office where prospective Chartered Accountants may be trained.
‘Training Outside Public Practice (TOPP)' means training that takes place at a training organisation in commerce and industry or public practice or the public sector that is approved and registered with SAICA as an office where prospective Chartered Accountants may be trained.
‘Transformational Charters'* means the sectoral transformation charters referred to in section 12 of the Act.
‘Turnover' means the revenue of the entity which refers only to income that arises in the course of the ordinary activities of the entity and includes fees from rendering services and royalties.
‘Uncertified Learning Programme'* means any Learning Programme of the Measured Entity that is not a certified Learning Programme.
‘Value-adding Enterprise'* means an Entity registered as a vendor under the Value Added Tax of 1991, whose Net Profit Before Tax summed with its Total Labour Cost exceeds 25% of the value of its Total Revenue.
‘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 Control Principle.
‘Weighting'* means the Weightings applied to various Elements in the Generic Scorecard.
‘Workplace Skills Plan'* means the plan of a Measured Entity approved by the relevant SETA.