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6 MODERN QUARRYING January - February 2017
Proposed split for Atlas Copco
The Atlas Copco board is proposing a split of the Atlas Copco
Group. The mining and civil engineering dedicated company
will include 12 000 employees, comprising all divisions within
the Mining and Rock Excavation Technique Business Area plus
the division Construction Tools and related service.
The rationale is to ensure that both Atlas Copco and the
new company are provided with best growth opportunities in
their respective market segments. The new company will have
a dedicated board and CEO, which will result in a more agile
company governance and faster response to market require-
ments. Operationally there will not be any changes to the exist-
ing infrastructure, as there already is a solid organisation in
place. The structure will further enable investments in growth
areas like automation, digitalisation and service excellence.
The new company will be listed on the Nasdaq Stockholm
stock exchange from mid-2018 following approval at the Atlas
Copco AGM in April that year.
AROUND THE INDUSTRY
Navigating B-BBEE Codes
“Companies concerned about how the
revised Codes of Good Practice will affect
their scorecard rating and their business,
need not be concerned, as it is feasible
to intelligently increase your company
rating at a negligible cost,” says Yolandie
Botha, head of Innovative BEE Solutions.
There are now only three compul-
sory categories in the Broad Based Black
Economic Empowerment (B-BBEE) Codes.
Two of the three codes make it possible to
earn considerable tax rebates and points
by redirecting mandatory expenditure.
The updated B-BBEE codes came into
effect from May 2015. The revised codes
have much stricter rules when it comes to
the scoring process and harsher implica-
tions for business owners.
“The Department of Labour has
become more aggressive in implement-
ing the Employment Equity Act 2014,
which has far stricter penalties for employ-
ers who don’t comply with the Act. Many
smaller companies without dedicated
resources to manage the B-BBEE pro-
cess have simply thrown up their arms,”
explains Botha. Yet the situation can be
managed in a manner which can cost
them virtually nothing while potentially
improving their competitiveness when
tendering for certain contracts.
The revised codes of Good Practice
will most affect companies that have a
revenue of more than R10-million. The
Code’s categories for compliance have
been condensed from seven to five cat-
egories, three of which are regarded as
compulsory and must be adhered to in
order to be compliant.
Botha identifies the three compul-
sory categories as Ownership, Skills
Development and Enterprise & Supplier
Development. The broad-based BEE lev-
els range from one (the highest) down to
eight or non-compliance.
She outlines two ways in which com-
panies can benefit from the new Codes
at short notice. “If a company registers for
learnerships, they can immediately receive
R40 000 a learner as a tax rebate. This is
provided that the learners find employ-
ment after their learnership, are black
Africans and under the age of 35. In addi-
tion to this rebate at the start of the learn-
ership, companies can receive another
R40 000 at its conclusion. The company
also pays a stipend to the learners, which
similarly gives a tax rebate,” she adds.
“Furthermore, companies are required
to pay 6,0% of their payroll towards exter-
nal training for black South Africans. This
amount can also be claimed back with a
Workplace Skills Plan (WSP) from SETA.”
Another inexpensive means of
improving a company’s B-BBEE rating is
to better structure its enterprise devel-
opment. Botha says that most companies
are typically doing something and incur-
ring expense in this category without
earning the points.
“For instance, companies may occa-
sionally use a contractor, but if that con-
tractor is not a registered company they
earn no scorecard points. On behalf of our
clients, Innovative BEE Solutions will look
at all your legal requirements and imple-
ment the necessary steps to ensure that
your contractors are B-BBEE compliant.
We also provide the assistance needed
to build and grow your business in order
for you to earn maximum points and
bonus points. It is also possible for each
party to provide services to the other for
which no money passes hands, but which
earn points for Code scorecard purposes,”
explains Botha.
The Codes contain a list of such
services which qualify for rand value,
including interest-free loans and pre-
payments for other services. Other ser-
vices commonly bartered in this manner
are the provision of protective cloth-
ing and equipment, and in-house skills
development.
Innovative BEE Solutions’ first step
when consulting with a new client is to
evaluate the company and determine its
current status and degree of participation.
“If a company has an annual turnover of
less than R50-million, it is relatively easy
to increase their rating even in the current
year. However, when the turnover is above
R50-million it is usually necessary to restruc-
ture it more substantially for an improve-
ment in the following year,”says Botha.
“Many business people regard B-BBEE
and labour regulations as onerous on
small and medium sized enterprises –
and they are often surprised to find how
easily it can be used to their advantage,”
concludes Botha.
Two of the three revised Codes of Good Practice
make it possible to earn considerable tax rebates
and points by redirecting mandatory expenditure.