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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
SIX
THREE
ONE
FOUR
TWO
2016
2015
Cash-settled
Number
WAOP
Number
WAOP
Outstanding at the beginning of the year
1 885 559
57,05
2 906 072
56,61
Forfeited
(152 865)
51,12
(950 205)
57,29
Exercised
(116 801)
53,16
(70 308)
34,72
Outstanding at the end of the year
1 615 893
57,85
1 885 559
57,05
Vested and exercisable at the end of the year
931 539
59,29
637 226
57,61
2016
2015
Weighted average share price of exercised options:
R53,59
R49,27
Weighted average remaining contractual life for the share options outstanding at reporting date:
1,82 years
2,52 years
Range of offer prices for options outstanding at the end of the year:
R53,52 – R62,29
R51,12 – R62,29
Carrying amount of the liability relating to the cash-settled options at reporting date (R million):
3,12
6,52
Income recognised for employee services received during the year (R million):
3,13
7,09
Share price volatility is based on the historical volatility of the Adcock Ingram share price matching the remaining life of each option. The
valuation is measured at fair value (excluding any non-market vesting conditions) and is the sum of the intrinsic value plus optionality. The
fair value of each option is estimated using an actuarial binomial option pricing model. All options are valued with a single exercise date
at maturity.
B. BLACK MANAGERS SHARE TRUST
In terms of the Tiger Brands Limited BEE transaction implemented on 17 October 2005, 4 381 831 Tiger Brands shares were acquired by the
Tiger Brands Black Managers Share Trust. Allocation of vested rights to these shares was made to black managers. The allocation of vested
rights entitles beneficiaries to receive Tiger Brands and Adcock Ingram shares (after making capital contributions to the Black Managers
Share Trust) at any time after the defined lock-in period, i.e. from 1 January 2015. These vested rights are non-transferable.
2016
2015
Number of shares held by Adcock Ingram employees
Adcock
Ingram
Tiger
Brands
Adcock
Ingram
Tiger
Brands
Outstanding at the beginning of the year
709 963
622 963
1 054 232
1 054 232
Forfeited
(27 604)
(14 335)
(32 669)
(32 669)
Exercised
(149 041)
(104 941)
(311 600)
(398 600)
Outstanding at the end of the year
533 318
503 687
709 963
622 963
Vested and exercisable at the end of the year
456 792
413 648
544 500
461 400
Weighted average exercise price
R47,12
R314,55
R49,35
R361,17
2016
2015
Weighted average remaining contractual life for the share options outstanding at reporting date:
11,25 years
12,25 years
Expense recognised for employee services received during the year (R million):
2,23
5,58
Participation rights were valued using the Monte-Carlo simulation approach to estimate the average, optimal pay-off of the participation
rights using 5 000 permutations. The pay-off of each random path was based on:
•
the projected Tiger Brands/Adcock Ingram share price;
•
outstanding debt projections; and
•
optimal early exercise conditions.