The Answers to the Questions Are Highlighted in Blue

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September 2007 Self Test Answers

The answers to the questions are highlighted in blue

1. For the purposes of BEE, Black people include:

a) Only African people b) African, Coloured and Asian people c) African, Coloured and Indian people d) African, Coloured, Asian and Oriental people

2. To count as Black under the BEE Act, Black people have to be:

a) Born in South Africa b) Citizens by birth, descent or naturalisation prior to the elections in 1994 c) Citizens by naturalisation provided they were born in Africa d) a or b

3. In terms of the BEE act:

a) African, Coloured and Indian people all have the same recognition b) White women and white disabled people count c) African, Coloured and Indian people have different degrees of recognition d) a and b

4. Who has to comply with the BEE Act?

a) All businesses b) All businesses with a turnover of more than R5 million c) Minister of Trade and Industry and Government d) Only businesses who deal with Government

5. When Government issues a tender:

a) Only BEE compliant companies can tender b) The lowest priced tender will win provided they are BEE compliant

6. Who will want to know your BEE score: a) The Government – they need to make sure all companies are BEE compliant b) The Government - when they purchase goods and services from companies c) Your customers d) b and c

7. A large organisation that is measured against the Generic Codes is defined as: a) An enterprise with more than R35million turnover and more than 100 employees b) An enterprise with more than R25million turnover and more than 35 employees c) An enterprise with more than R35million turnover d) An enterprise with more than R25million turnover

8. A Qualifying Small Enterprise is measured against the QSE Codes is defined as: a) An enterprise with less than R5million turnover b) An enterprise with more than R5million turnover but less than R35million turnover c) An enterprise with more than R5million turnover but less than R25million turnover d) An enterprise with less than R35million turnover and less than 100 employees

9. An Exempt Micro Enterprise is exempt from BEE if: a) The enterprise has 25% + black ownership and has traded for less than 1 year b) The enterprise has 50% + black ownership and does less than R5million turnover p.a. c) The enterprise does less than R5million turnover p.a. d) The enterprise does less that R1million turnover p.a.

10. An Exempt Micro Enterprise is exempt from the BEE Codes and is automatically scored as: a) A Level 4 with 100% procurement recognition b) A Level 3 with 110% procurement recognition c) A Level 4 with 110% procurement recognition d) An 'AA' BEE status with 100% procurement recognition

© 2007 BEESA & Fasset 11. The Balanced Scorecard is measured out of 7 elements. Which elements apply to Generic and Qualifying Small Enterprises? a) Generic enterprises are scored on all 7 elements - QSE are scored on only Ownership, Management, Skills Development and Procurement. b) Generic are scored on 7 elements - QSE are scored on the first 4 elements. c) Generic are scored on all 7 elements - QSE are scored on any 4 elements. d) QSE are scored on all 7 elements – Generic are scored on Ownership, Management, Skills Development and Procurement

12. The adjustment for Gender recognition is calculated as follows:

a) Black Male % / 2 + Black Female % b) Black Overall % / 2 + Black Female % c) Black Male % + 2 x Black Female % d) (Black Male % x Black Female %) / 2

13. The following group is NOT regarded as a “Black Designated Group” for purposes of BEE ownership: a) Black youth b) Black professionals in scarce skills sectors c) Black people living in rural areas d) Black unemployed

14. The “Modified Flow Through” principle allows an enterprise to: a) Exclude white shareholders with less than 50% shares from the calculation of BEE ownership in a complex structure b) Exclude white shareholders with more than 50% shares from the calculation of BEE ownership in a complex structure c) Attribute 100% of the ownership as black ownership where the effective black ownership in a complex structure is less than 50% d) Attribute 100% of the ownership as black ownership where the effective black ownership in a complex structure is more than 50%

15. Which valuation method is not acceptable in terms of the BEE Codes: a) Price earnings ratio b) Discounted cash flow c) Net asset value

16. Which scenario will result in the most points for “Board Member Voting Rights” for the Management section of the Generic Scorecard: a) 50% of the board members are black males b) 40% of the board members are black males and 20% are black females c) 20% of the board members are black males and 30% are black females d) 30% of the board members are black males and 25% are black females

17. A Generic enterprise will only score points for Employment Equity if:

a) a sub-minimum of 40% of the senior management are black b) a sub-minimum of 40% of each target is black c) more than 40% of the entire labour force is black d) a sub-minimum of 40% of all the management are black women

18. A Generic enterprise with a flat management structure that has no middle management or junior management: a) can combine the points scored for middle and junior management and be measured against the junior management targets b) can combine the points scored for middle and junior management and be measured against the middle management targets c) can combine the points scored for middle and junior management and be measured against the senior management targets d) cannot combine the points scored for middle and junior management and will only be measured against senior management targets

19. An enterprise that makes use of a labour broker for all its staff: a) does not have to comply with Employment Equity because it has no employees b) can only claim points for Employment Equity if the labour broker is black empowered c) still gets measured for Employment Equity as if the staff were employed by the enterprise d) still gets measured for Employment Equity only if the staff are employed for more than 3 months

20. Skills Development spending on Black people as a percentage of the leviable amount is: a) 3% for Generic Enterprises and 2% for Qualifying Small Enterprises over and above the 1% Skills Development Levy

© 2007 BEESA & Fasset b) 2% for Generic Enterprises and 3% for Qualifying Small Enterprises over and above the 1% Skills Development Levy c) 3% for Generic Enterprises and 2% for Qualifying Small Enterprises inclusive of the 1% Skills Development Levy d) 2% for Generic Enterprises and 3% for Qualifying Small Enterprises inclusive of the 1% Skills Development Levy

21. True or false: a) An enterprise has to demonstrate that they are compliant with the conditions of the Skills Development Act and Skills Development Levies Act before any points can be claimed under Skills Development even if they employ fewer than 50 employees. TRUE b) Spend on informal, on the job training does not qualify as Skills Development as it is not conducted by certified trainers. FALSE c) The salaries of learners placed on learnerships can be counted as part of the total training expenditure. TRUE d) Any amount spent on ABET training of black or white employees can be multiplied by a factor of 1.25 when calculating the score. FALSE e) Training costs can include the course fee, materials, travel and accommodation, venue costs and the cost of internal trainers. TRUE f) Expenditure on scholarships and bursaries can be included as part of the training spend even if spent on the children of employees. FALSE

22. The following expenditure is EXCLUDED from total measured procurement spend: a) purchases from white-owned businesses b) purchases from a labour broker c) payments to SARS (NOTE: not all payments to SARS are tax payments) d) payments of salaries

23. Imports may be EXCLUDED from preferential procurement if: a) the brand of goods imported cannot be sourced in SA b) the price of goods imported is less than 75% of the local price c) the enterprise's main business is importing (ie: no local purchases) d) the goods imported are used for value adding in SA

24. If a Generic Enterprise buys all its goods and services from 1 supplier – which one will earn more procurement points for the enterprise: a) a Generic Enterprise with a BEE recognition LEVEL 1

25. If an enterprise buys goods and services from a supplier, and wants to claim points for Preferential Procurement it needs to know: a) the Turnover of the supplier b) the BEE Level of the supplier c) the BEE Contribution % of the supplier (not needed - known from b) d) the ownership status of the supplier e) the issue / expiry date of the BEE Certificate f) if it is an Exempt Micro Enterprise (not needed – known from a) g) All of the above h) ( a ) ( b ) ( d ) ( e ) i) ( b ) ( c ) ( e ) ( f ) j) ( b ) ( c ) ( d ) ( e )

26. To qualify to earn point for Enterprise Development, an enterprise must support:

a) entities where more than 75% of the beneficiaries are black people b) entities where more than 50% of the ownership is in black hands – no less than 25% is in black women hands c) entities where more than 25% of the ownership is in black hands – provided it scores between Level 1 and Level 6 on the BEE Scorecard d) entities defined as Exempt Micro Enterprises

27. To earn full points for Enterprise Development a QSE needs to:

a) contribute 2% of its Net Profit before Tax b) contribute 2% of its Net Profit after Tax c) contribute at least R1 if it made a loss d) contribute 3% of its Net Profit after Tax

28. Which of the following does not constitute Enterprise Development?:

a) allowing a beneficiary to use office space for free b) paying the legal costs for the formation of an amateur black soccer club

29. If an entity pays an Enterprise Development beneficiary R100,000 early – which scenario will earn the most points: a) if normal payment terms are 90 days and the entity pays 75 days early b) if normal payment terms are 60 days and the entity pays 45 days early c) if normal payment terms are 30 days and the entity pays 15 days early d) if normal payment terms are 15 days and the entity pays 5 days early

30. Enterprise Development and Socio-economic Development contributions are measured cumulatively from Inception Date, what does this mean? a) If an enterprise does not contribute from 9 February 2007 it will not be able to earn points for these elements b) If an enterprise does not make contributions during the Transition Period (9 Feb 2007 – 8 Feb 2008) it can rely on its Ownership and Management to score full points c) If an enterprise made contributions before 9 February 2007 – they do not count d) If and enterprise only began making contributions from 9 February 2008 – it would have to pay catch-up contributions for 2007 to earn full points

31. The following Sector Charters have equal recognition with the Generic Codes:

a) Financial Sector Charter (gazetted in 2007) b) Construction Charter (gazetted in 2007) c) Mining Charter (gazetted in 2003) d) Petroleum and Liquid Fuels Charter (gazetted in 2003) e) ( a ) and ( b ) f) ( c ) and ( d ) g) None of the above