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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
ANNEXURE B – SHARE-BASED PAYMENT PLANS
CONTINUED
C. ORIGINAL BLACK ECONOMIC EMPOWERMENT (BEE) TRANSACTION
Adcock Ingram entered into a BEE transaction on 9 April 2010 as part of its efforts to achieve the objectives set out in the broad-based Black
Economic Empowerment Codes of Good Practice with the intention to embrace broad-based equity participation as a key transformation
initiative.
BEE PARTICIPANTS
The entities which participated in the transaction were:
•
the strategic partners, who collectively participated through a single investment vehicle, namely Blue Falcon Trading 69 (Pty) Limited
(Blue Falcon); and
•
qualifying employees, who participated through the Mpho ea Bophelo Trust (Bophelo Trust).
Both of these entities held Adcock ordinary shares that were acquired via dividend distributions on their A and B ordinary shares.
During the scheme’s existence, Blue Falcon’s shareholders were as follows:
•
Kagiso Strategic Investments III (Pty) Limited (Kagiso) (62,9%)
•
Kurisani Youth Development Trust (26,6%)
•
Mookodi Pharma Trust (10,5%)
ESTIMATED ECONOMIC COSTS
The total value of the transaction was R1,321 billion, based on the 10-day VWAP of R50,91 per ordinary share on the JSE as at the close of
trade on Thursday, 19 November 2009, being the date when the Memorandum of Understanding was signed.
IFRS 2 sets out the basis for calculating the economic cost shown above and the valuation uses the following key inputs or assumptions:
•
the Black-Scholes model for valuing options;
•
the actual or likely conversion dates attached to the A and B ordinary shares; and
•
using available open-market data, estimated expected future ordinary share prices as determined using option pricing models and an
estimation of the future dividends at given dates.
These calculations derive an expected future cost associated with the transaction that is then discounted to the present.
The following table illustrates the movement in units issued to employees during the year:
Equity-settled
2016
Number
2015
Number
Outstanding at the beginning of the year
4 359 600
4 668 300
Sold
(2 985 635)
–
Forfeited
–
(110 600)
Cancelled
(1 335 465)
–
Paid out
(1)
(38 500)
(198 100)
Outstanding at the end of the year
–
4 359 600
Vested at the end of the year
–
3 368 400
Exercisable at the end of the year
(2)
–
38 500
Available for future distribution to qualifying employees
–
1 335 465
Expense recognised for employee services received during the year (R million)
7,43
9,52
(1)
Paid out options that became exercisable as a result of death, disability, retirement or retrenchment.
(2)
Became exercisable as a result of death, disability, retirement or retrenchment.