What a B-BBEE rollercoaster year this has been! With the generic amended codes becoming effective on 1 May 2015, various clarification notices issued (and revoked) by the Department of Trade and Industry, thought-provoking statements made in Parliament and endless conflicting media reports, I honestly don’t blame many business owners for feeling overwhelmed by now – not knowing how to proceed or even if they should still be thinking of doing anything in terms of enhanced B-BBEE implementation.
The fact, however, is that B-BBEE is here to stay. It has now become, in my opinion, for some sectors a significant business risk which if not addressed urgently, could lead to operational failure. By ‘urgently’ I refer to the time left between now and the company’s 2016 financial year-end. Whether your business will have its next verification done on the ‘old’ or ‘new’ codes is really irrelevant. All companies’ 2016 financial year will be measured at some point in the future in terms of the ‘new’ (amended) codes with its much more stringent criteria. The likelihood of being found non-compliant with the amended codes is very high indeed. Refer to the article ‘A B-BBEE Action Plan’ in the August 2015 issue of Accountancy SA for a roadmap on how to proceed. That article ended by recommending these steps:
- Determine if the business qualifies for a final verification in terms of the ‘old’ codes.
- Perform a year-to-date assessment in terms of the amended codes to identify any gaps that can still be filled.
- Implement as a matter of urgency a strategy based on the above assessment.
- Determine when you really need to have an equity ownership transaction in place and start looking for a suitable partner.
Despite the rollercoaster ride this year, the above steps are still highly recommended. The only difference is that time is now starting to run out. If you have a December year-end, call your B-BBEE advisor tomorrow morning. If you have a February year-end, let him at least enjoy his upcoming holiday and give him some serious work to do in January and February. It’s not too late – yet!
Author: Anton de Wet CA(SA) is Managing Director of Net Value Holdings