Enterprise Development (ED) Code 600:

ED is aimed at helping mainly Black owned entities to move from “survivalist to a level of sustainability and profitability to become viable and sustainable”.

• Code 600 of Codes of Good Practice

Focussed Areas:

• Financial Capacity
• Operational Capacity
• Job Creation

Benefit for the Measured Entity: Recognition of contribution to earn 15 points in the BBBEE scorecard.

Formula: A= B/C X D

B= Value of Contribution

C= 3% of NPAT

D= 15 points

Example:

R300 000/R1.8 m X 15= 0.25

= 0.25 of 15 points = 3 of 15 points

Where Value of Contribution is less than 12 months:

Contribution X Benefit Factor X Average Period

Qualifying Beneficiaries:

• Category A Beneficiaries: QSE and EME that are 50% black-owned or black women owned
• Category B Beneficiaries: Any size company that is 50% black owned; and 25 % black-owned and has a BEE score of level 1-6

Dinoka Approach: Money Well Spent:

A) Value Chain Analysis to identify areas to focus on:

• Core-Business: Manufacturing/Packaging/Sales & Marketing/Distribution
• Support Services: General Administration (Procurement/Canteen/Cleaning) Strategic Partnerships/Legal & Regulatory

B) Recoverable Contributions:

Money spent on ED that yields interest (loans) or profit (dividend from investment)

Forms of Contributions: Benefit Factor

• Seed capital: 100%
• Minority Investment: 100%
• Loans (Interest-Free): 100%
• Loans (Standard): 70%
• Guarantees: 3%
• Lower Interest Rate: 3%
• ED with lower dividend to financier: Dividend Rate of     Ordinary Share – Actual Rate of Contributor

Maximising Contribution Recognition:

• Ideal Category A Beneficiary: Supplier or potential supplier.
• Potential Customer

The procurement code states that an enterprise may multiply its procurement spend by 120% from any of its ED partners.

Benefit for Measured Entity: Procurement + ED points

Value for Money= Money well spent

• Investment rather than expenditure
• Procurement points: potential supplier
• Accessing new markets: potential customer

C) Non-recoverable spend:

Money spent that is not recoverable

Forms of ED Contribution: Benefit Factor

• Discounts: 100%
• Grants: 100%
• Costs (Direct): 100%
• Cost (Overhead): 80%
• Human Resources Capacity (Professional Services at no cost): 80%
• Professional Services at discount: 80%
• Employees time: 80%
• Shorter Payment Periods: 15 days less

Dinoka Contribution:

• Managing the ED process
• Identify Qualifying Beneficiaries
• Needs Analysis of ED Beneficiaries
• Professional Services to increase Financial and Operational Capacity
• Hands on mentoring
• Management Reports of Beneficiaries
• Corporate Governance Documents (Shareholders’ Agreements; Memorandum of Agreements etc)
• Corrective Interventions where necessary
• Manage investment on behalf of client and assist the enterprise to grow (board participation, bookkeeping, marketing, tendering, skills development, find new business opportunities)

Dinoka Professional Services:

• Dinoka Training Institute
• Dinoka Partners

ED Structure: Measured Entity to appoint a person to liaise with Dinoka to manage to ensure delivery of services and objectives are achieved.

Monitoring Mechanism:

• Board Representation at Beneficiaries level
• Management Accounts
• Cash flow and Income Statements
• Training Attendance Register
• Monthly Reports