| Notes to the consolidated financial statements – Note 26 |
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| 26. |
Share-based payments |
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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 option 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 of the Bidvest Share Incentive Trust.
The number and weighted average exercise prices of share options are: |
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2015 |
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2014 |
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Number |
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Average
price
R |
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Beginning of year |
11 410 545 |
|
175,34 |
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10 295 755 |
|
147,00 |
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Granted |
2 253 793 |
|
252,43 |
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|
3 074 660 |
|
232,28 |
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Lapsed |
(226 159) |
|
168,08 |
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(336 207) |
|
154,93 |
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Exercised |
(2 106 413) |
|
128,01 |
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(1 623 663) |
|
107,69 |
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End of year |
11 331 766 |
|
199,62 |
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|
11 410 545 |
|
175,34 |
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The options outstanding at June 30 2015 have an exercise price in the range
of R51,51 to R269,95 (2014: R51,51 to R237,54) and a weighted average
contractual life of 0,5 to 9,4 (2014:0,5 to 9,8) years. The average share price of
The Bidvest Group Limited during the year was R301,96 (2014: R265,83). |
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Share options outstanding at June 30 by year of grant are: |
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2005 |
140 000 |
|
63,21 |
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336 331 |
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65,82 |
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2006 |
3 500 |
|
88,08 |
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|
3 500 |
|
88,08 |
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2009 |
11 500 |
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100,00 |
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|
11 500 |
|
100,00 |
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2011 |
1 046 756 |
|
134,94 |
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|
1 756 149 |
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134,93 |
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2012 |
2 458 250 |
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135,24 |
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3 756 149 |
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135,16 |
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2013 |
2 464 500 |
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208,91 |
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3 757 500 |
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208,91 |
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2014 |
2 962 967 |
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235,11 |
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2 532 000 |
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233,44 |
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2015 |
2 244 293 |
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252,44 |
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3 013 565 |
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|
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|
11 331 766 |
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199,62 |
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|
11 410 545 |
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175,34 |
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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: |
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2014 |
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Fair value at measurement date (Rand) |
82,37 – 92,99 |
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80,34 – 83,70 |
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Exercise price (Rand) |
250,73 – 269,95 |
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221,40 – 237,54 |
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Expected volatility (%) |
21,01 – 24,14 |
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21,88 – 27,90 |
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Option life (years) |
4,00 – 6,00 |
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|
4,00 – 6,00 |
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Distribution yield (%) |
2,78 – 2,70 |
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2,69 – 2,91 |
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Risk-free interest rate (based on national government bonds) (%) |
7,70 – 7,49 |
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7,72 – 8,24 |
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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 of directors.
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: |
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2015 |
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2014 |
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Number |
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Average
price
R |
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Beginning of year |
647 368 |
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99,05 |
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882 371 |
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103,40 |
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SHares taken up by staff |
(105 228) |
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130,30 |
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(235 003) |
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115,39 |
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End of year |
542 140 |
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92,98 |
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647 368 |
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99,05 |
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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 (2014: 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 3 351 632 (2014: 3 312 372) 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
505 809 (2014: 777 883) of the 742 029 (2014: 965 550) shares are expected to vest, taking into account the performance of the Group 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 R253,02 (2014: R217,84) per share.
These awards will vest in the next four years.
44 386 (2014: 36 950) 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 plan scheme are: |
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2014
Number |
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Beginning of year |
965 550 |
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1 002 952 |
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Allotted during the year |
170 000 |
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220 000 |
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Awarded during the year |
(349 135) |
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(220 452) |
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Forfeited during the year |
(44 386) |
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(36 950) |
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End of year |
742 029 |
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965 550 |
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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 can be found at www.bidvest.com.na. |
| Notes to the consolidated financial statements – Note 26 |
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