WILL YOUR TRUST STAND UP TO SCRUTINY?
January 25, 2016WHY VALUE YOUR BUSINESS?
February 24, 2016
BEE or rather BBBEE (Broad Based Black Economic Empowerment) is entrenched in the South African economy and it is important that all businesses consider the impact of BEE now, and for the future.
The Amended Codes of Good Practice were Gazetted in 2013. The transitional period is now over and year ends after April 2015 require application of the Amended Codes of Good Practice.
We have now reached the stage in BEE where the Amended Codes of Good Practice require implementation in entities. In order to fully prepare Lucro and our clients for this, Liza Wood (CA(SA)) has undertaken a Post Graduate Diploma in BBBEE at the University of Witwatersrand. This has positioned us with in-depth knowledge of the Amended BBBEE Codes of Good Practice, as well as the practicalities involved in rating/verifying entities. Our competitive edge however, is the business experience we have in practically implementing BBBEE strategy. This is due to that fact that we have consulted on all areas of financial management over the past 21 years and really understand the difficulties and practicalities facing business. We have also consulted for the last 10 years on the previous BBBEE codes.
The Amended BBBEE Codes are far more onerous then the old codes, for both those on the Generic and Qualifying Small Enterprise (QSE) Scorecard. There are now 5 elements of BBBEE that all entities have to score under. There are many changes to the calculations and a number of new concepts in the Amended Codes. Not only are the points now a lot more difficult to attain, but the BBBEE Status Levels also require more points than before.
Generic Scorecards must be applied to entities with annual turnover exceeding R50 million and QSE scorecard to entities with annual turnover below R50 million.
The Amended BBBEE codes require planning upfront. It is important to have an understanding on where you currently score and what needs to be done to improve the score. The work that needs to be done will take the better part of a year to implement to the point that the points can be scored.
Lucro Offering:
At Lucro we have been involved in BEE consulting almost since its inception. We are familiar with both the old and new codes and are able to consult on BEE, and present our clients with a BEE solution, rather than to perform the rating only.
AMENDED BBBEE PREPARATION :
1. High level snap shot of the companies BBBEE rating on the new BBBEE codes
You will be asked to complete a template of information that will be used in our assessment.
We will analyse the information presented and prepare an estimated BBBEE scorecard on the Amended BBBEE Codes.
2. A gap analysis
We will consider the Amended Codes together with your estimated scorecard above and identify areas that you have not scored well in.
We will make suggestions of recommended remedies to be implemented.
3. A target BBBBEE scorecard
We will consider our recommendations above and prepare a target scorecard for achievement within 12 months.
FACILITATED BBBEE RATING:
We have historically offered a Facilitated BBBEE Rating process.
It is imperative that the whole review process is well managed and considered before launching into the Rating. The biggest problem we have seen with clients is that they go straight into a Rating Process without developing a proper strategy first and without any idea of what their ultimate BEE Score will be. This results in wasted and costs, and an unsatisfactory rating.
In addition the frustrations of dealing with a BEE Rating agency when you are not familiar with the legislation can cause delays and even lower ratings then could otherwise have been achieved.
The BEE Rating Agency is not permitted to consult to the clients that they rate. The result is a lower rating may be obtained without the assistance of consultant.
Our Facilitated BBBEE Rating Solution consists of the following:
1. Gathering of information
You will be asked to complete a template of information that will be used in our assessment.
Yow will be asked to provide certain documentation and evidence to support the rating.
2. Assess the result
A pre-assessment of the anticipated rating is then performed prior to obtaining the final rating. This is to ensure the expected results are in line with our objectives.
3. Rating
A rating by our affiliated and accredited BEE Rating Agency will then be obtained. We only utilise rating agencies affiliated to our BEE Consulting tool as it streamlines the process considerably. We upload all supporting documentation and perform the rating calculations online. The BEE Rating Agency will log into the system and review the file online and issue the certificate accordingly. The process is smooth, efficient and far quicker than the traditional rating agency model.
We have already utilised this system for a number of clients and it is very effective and highly recommended.
PLEASE CONTACT LIZA WOOD FOR MORE INFORMATION
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)