26. |
Share-based payments
The Bidvest Share Incentive Scheme (Scheme) grants options and advances loans to employees of the Group to acquire shares in the Company. Both the share options scheme and share purchase scheme have been classified as equity-settled schemes, and therefore an equity-settled share-based payment reserve has been recognised.
A conditional share plan, which awards employees with a conditional right to receive shares in the Company, free of any cost, is also operated by the Group. As it is anticipated that the participants will receive shares in settlement of their awards, a share-based payment reserve has been recognised.
Share option scheme
The terms and conditions of the options are:
Option holders are only entitled to exercise their options if they are in the employment of the Group in accordance with the terms referred to hereafter, unless otherwise recommended by the board of the Company to the trustees of the Bidvest Share Incentive Trust.
Option holders in the scheme may exercise the options at such times as the option holder deems fit, but not so as to result in the following proportions of the holder’s total number of instruments being purchased prior to: 50% of total number of instruments at the expiry of three years; 75% of total number of instruments at the expiry of four years; and 100% of total number of instruments at the expiry of five years from the date of the holder’s acceptance of an option. All options must be exercised no later than the 10th anniversary on which they were granted unless approval is obtained from the trustees.
The number and weighted average exercise prices of share options are:
| |
2014 |
|
|
2013 |
|
| |
Number |
|
Average
price
R |
|
|
Number |
|
Average
price
R |
|
| Beginning of the year |
10 295 755 |
|
147,00 |
|
|
9 353 410 |
|
118,50 |
|
| Granted |
3 074 660 |
|
232,28 |
|
|
2 575 500 |
|
208,91 |
|
| Lapsed |
(336 207) |
|
154,93 |
|
|
(760 397) |
|
109,84 |
|
| Exercised |
(1 623 663) |
|
107,69 |
|
|
(872 758) |
|
56,63 |
|
| End of the year |
11 410 545 |
|
175,34 |
|
|
10 295 755 |
|
147,00 |
|
| The options outstanding at June 30 2014 have an exercise price in the range of R51,51 to R237,54 (2013: R39,10 to R208,91) and a weighted average contractual life of 0,5 to 9,8 (2013: 0,5 to 9,8) years. The average share price of The Bidvest Group Limited during the year was R265,83 (2013: R221,27). |
|
|
|
|
|
|
|
|
|
| Share options outstanding at June 30 by year of grant are: |
|
|
|
|
|
|
|
|
|
| 2004 |
|
|
|
|
|
488 200 |
|
47,64 |
|
| 2005 |
336 331 |
|
65,82 |
|
|
345 700 |
|
69,47 |
|
| 2006 |
3 500 |
|
88,08 |
|
|
17 000 |
|
87,82 |
|
| 2009 |
11 500 |
|
100,00 |
|
|
31 500 |
|
100,00 |
|
| 2011 |
1 756 149 |
|
134,93 |
|
|
2 933 855 |
|
134,96 |
|
| 2012 |
3 757 500 |
|
135,16 |
|
|
3 904 000 |
|
135,13 |
|
| 2013 |
2 532 000 |
|
208,91 |
|
|
2 575 500 |
|
208,91 |
|
| 2014 |
3 013 565 |
|
233,44 |
|
|
|
|
|
|
| |
11 410 545 |
|
175,34 |
|
|
10 295 755 |
|
147,00 |
|
The fair value of services received in return for shares allotted is measured based on a binomial model. The contractual life of the option is used
as an input into this model.
The fair value of the shares allotted during the current year and the assumptions used are:
| |
2014 |
|
|
2013 |
|
| Fair value at measurement date (Rand) |
80,34 – 83,70 |
|
|
68,05 – 75,65 |
|
| Exercise price (Rand) |
221,40 – 237,54 |
|
|
208,26 – 208,91 |
|
| Expected volatility (%) |
21,88 – 27,9 |
|
|
28,39 – 31,92 |
|
| Option life (years) |
4,00-6,00 |
|
|
4,00 – 6,00 |
|
| Distribution yield (%) |
2,69 – 2,91 |
|
|
2,87 – 2,88 |
|
| Risk-free interest rate (based on national government bonds) (%) |
7,72 – 8,24 |
|
|
5,35 – 6,15 |
|
The volatility is based on the recent historic volatility.
Share purchase scheme
In terms of the share purchase scheme, the scheme advances loans to employees to acquire shares in the Company. Interest is charged on the loans at interest rates determined by the board of directors of the Company, the loans must be settled no later than the 10th anniversary on which the shares were allotted and the shares are held by the scheme as security for the loans.
The employees are entitled to settle the loans at such times as they deem fit, but not so as to result in the following proportions of the employees’ total number of allotted shares being paid for prior to: 50% of total number of allotted shares at the expiry of three years; 75% of total number of allotted shares at the expiry of four years; and 100% of total number of allotted shares at the expiry of five years from the date of the holder’s acceptance of the allotted share, unless otherwise determined by the board.
Distributions arising on the allotted shares are utilised to settle any interest or income tax obligations with any excess being applied to settle the outstanding liability.
The number and weighted average exercise prices of shares allotted in terms of the share purchase scheme are:
| |
2014 |
|
|
2013 |
|
| |
Number |
|
Average
price
R |
|
|
Number |
|
Average
price
R |
|
| Beginning of the year |
882 371 |
|
103,40 |
|
|
1 442 092 |
|
106,65 |
|
| Shares taken up by staff |
(235 003) |
|
115,39 |
|
|
(559 721) |
|
111,77 |
|
| End of year |
647 368 |
|
99,05 |
|
|
882 371 |
|
103,40 |
|
The fair value of services received in return for shares allotted is measured based on a binomial model. The expected contractual life of the loan
obligation is used as an input into this model.
No shares were allotted during the year (2013: Nil).
Conditional share plan
In terms of the conditional share plan scheme, a conditional right to a share is awarded to employees subject to performance and vesting
conditions. The vesting period is as follows: 50% of total number of awards vest at the expiry of three years; 75% of total number of awards vest at
the expiry of four years; and 100% of total number of allotted awards vest at the expiry of five years from the date of the award, unless otherwise
determined by the board. These share awards do not carry voting rights attributable to ordinary shareholders. A total number of 3 312 372 (2013:
3 277 349) conditional share awards are available to be granted to employees in the forthcoming year.
The fair value of services received in return for the conditional share awards has been determined by multiplying the number of conditional share
awards expected to vest by the share price at the date of the award, less discounted by anticipated future distribution flows. A total number
of 777 883 (2013: 846 539) of the 965 550 (2013: 1 002 952) shares are expected to vest, taking into account the performance of the various
operations to date and forecasts to the end of the performance period, against the targets set at the time of the award. The average discounted
share price used in the calculation of the share-based payment charge on the conditional share awards allotted during the year is R217,84
(2013: R159,77) per share. These awards will vest in the next four years.
36 950 (2013: 11 758) conditional share awards were forfeited as a result of performance conditions not being met.
The number of conditional share awards in terms of the conditional share award scheme are:
| |
2014
Number |
|
|
2013
Number |
|
| Beginning of the year |
1 002 952 |
|
|
995 169 |
|
| Allotted during the year |
220 000 |
|
|
240 000 |
|
| Awarded during the year |
(220 452) |
|
|
(220 459) |
|
| Forfeited during the year |
(36 950) |
|
|
(11 758) |
|
| End of the year |
965 550 |
|
|
1 002 952 |
|
Other equity-settled share-based payment schemes
Bidvest Namibia Limited, a subsidiary, also operates its own share option scheme, the expense of which has been included in the consolidated
income statement and the resulting reserve, in the consolidated share-based payment reserve in equity. Details as to how this expense has
been calculated have not been included above, but are published in the integrated annual report of Bidvest Namibia Limited, which is available
on the website www.bidvestnamibia.com.na.
|