Socio-economic development is the fifth element that an entity is measured on. 

THE SED SCORECARD .

• The Net Profit After Tax (NPAT) or average target applies unless:
  • the company does not make a profit last year or on average over the last five years
  • the net profit margin is less than a quarter of the norm in the industry.
• If the Turnover is to be used, the target will be set at:
  • 1% x Indicative Profit Margin (NPAT/Turnover) x Turnover
  • Indicative profit margin is the profit margin in the last year where the company’s profit margin is at least one quarter of the industry norm.

Socio- Economic Development Contributions:

• Socio-Economic Development Contributions consist of monetary or non-monetary contributions actually initiated and implemented in favour of beneficiaries by a Measured Entity with the specific objective of facilitating income generating activities for targeted beneficiaries.
• The full value of Socio-Economic Development Contributions made to beneficiaries is recognisable if at least 75% of the value directly benefits black people.
• If less than 75% of the full value of Socio-Economic Development Contributions directly benefits black people, the value of the contribution made multiplied by the percentage that benefits black people, is recognisable.
• The following is a non-exhaustive list of Socio-Economic Development Contributions:
  • grant Contributions to beneficiaries of Socio-Economic Development Contributions;
  • guarantees given or security provided for beneficiaries;
  • direct costs incurred by a Measured Entity in assisting beneficiaries;
  • overhead costs of a Measured Entity directly attributable to Socio­ Economic Development Contributions;
  • developmental capital advanced to beneficiary communities;
  • preferential terms granted by a Measured Entity for its supply of goods or services to beneficiary communities;
  • payments made by the Measured Entity to third parties to perform socio-economic development on the Measured Entity’s behalf;

  • subject to paragraph 3.2.5 provision of training or mentoring to beneficiary communities which will assist them to increase their financial capacity; and

  • subject to paragraph 3.2.6 the maintenance by the Measured Entity of a socio-economic development unit _which focuses only on support of beneficiaries and beneficiary communities.

  • providing training or mentoring to beneficiary communities by a Measured Entity. (Such contributions are measurable by quantifying the cost of time (excluding travel or commuting time) spent by staff or management of the Measured Entity in carrying out such initiatives. A clear justification must support any claim for time costs incurred, commensurate with the seniority and expertise of the trainer or mentor).

  • Maintaining a socio-economic development unit by the Measured Entity. (Only that portion of salaries and wages attributable to time spent by the staff in, and the other expenses related to, promoting and implementing socio-economic development constitute contributions.)

  • Payments made by the Measure Entity to third parties to perform socio­ economic development on the Measurement Entity’s behalf.