| Share-based payments
The 2008 Acquisition Agreement also contemplated an award of a minimum of 20 million AfroCentric shares to certain executives of AHL, to be awarded at the end of the warranty period 30 June 2013. During the course of that period, those executive shares already allocated, have been categorised as share-based payments in terms of IFRS 2 and the actuarially determined “non-cash” costs were provided for in each of the Company’s relevant reporting periods. The Boards of AfroCentric and AHL have approved an allocation of 27 million shares, representing 7 million more shares than that which was originally stipulated in the 2008 Acquisition Agreement.
The issue of the 27 million share executive awards had no effect on the statement of cash flows.
The AfroCentric Investment Corporation Limited Group, of which the AHL Group is a subsidiary, has allocated share-based awards to certain executive directors of the AHL Group as part of their remuneration package. The share awards are at an Afrocentric Investment Corporation Limited Group level. The Group measures the fair value of the share awards or equity instruments granted, in line with the Group’s accounting policy.
The granting of the share awards was based on job level, merit and performance and was entirely at the discretion of executive management acting on the recommendations of the shareholders. Grants were made in November 2013 and additional allocations are made annually, as deemed necessary to both existing and new employees.
Shares will be held by AfroCentric Management Services (Pty) Ltd until such time that the pre-determined conditions have been achieved over the period commencing 1 November 2013 and ending 1 November 2016.
These shares awarded are additional shares allocated to the Executive Directors of AHL Group depending on the rules as set out in the share awards agreement. The share price on 1 November 2013, which is grant date, was used to determine the IFRS 2 charge for 2014. The number of shares awarded, i.e. 2 625 641 multiplied by the share price of R4.10 on grant date resulted in a R10.6 million charge to the statement of comprehensive income. The remaining shares will be awarded up to the period 1 November 2016.
| |
GROUP
June 2014
R’000 |
|
GROUP
June 2013
R'000 |
|
COMPANY
June 2014
R’000 |
|
COMPANY
June 2013
R'000 |
|
| Executive awards |
27 000 |
|
20 000 |
|
805 |
|
4 660 |
|
| Movements in number of instruments: |
|
|
|
|
|
|
|
|
| Outstanding at the beginning of the year |
20 000 |
|
15 250 |
|
4 660 |
|
357 |
|
| Exercised |
(20 000) |
|
– |
|
(4 660) |
|
– |
|
| Awarded |
2 625 |
|
7 800 |
|
198 |
|
4 500 |
|
| Active employees |
2 625 |
|
5 800 |
|
198 |
|
2 500 |
|
| Former employee |
– |
|
2 000 |
|
– |
|
2 000 |
|
| Shares with additional conditions |
– |
|
(3 050) |
|
– |
|
(197) |
|
| Outstanding at the end of the year |
2 625 |
|
20 000 |
|
198 |
|
4 660 |
|
In 2014 there are 2 625 000 outstanding options (2013: 20 000 000 options). In 2014, 20 000 000 options (2013: 0) were exercised. The options exercised in 2014 resulted in 20 000 000 shares (2013: 0 shares) being issued at a weighted average price of R4.10 each. The related weighted average share price at the time of exercise was R4.10 per share.
Share options outstanding at the end of the year have the following expiry date and exercise prices:
| Grant date |
|
Vesting date |
|
Exercise price in rand per share share option |
|
Share options 2014 |
| 1 November 2013 |
|
1 November 2016 |
|
4.10 |
|
7 000 000 |
The 20 million share options that were outstanding at the end of June 2013 have been fully exercised in 2014.
| |
GROUP
June 2014
R’000 |
|
GROUP
June 2013
R'000 |
|
COMPANY
June 2014
R’000 |
|
COMPANY
June 2013
R'000 |
|
| Economic assumptions |
|
|
|
|
|
|
|
|
| Total number of instruments granted |
7 000 |
|
20 000 |
|
– |
|
– |
|
| Weighted average share price |
4.10 |
|
3.90 |
|
– |
|
– |
|
| Weighted average vesting period |
3 |
|
– |
|
– |
|
– |
|
|