Integrated Reports Senwesbel Consolidated Financial Statements 2018 - Page 39

13. EMPLOYEE BENEFITS 13.1 INCENTIVE BONUSES GROUP 2017 2018 SHORT-TERM R’m SHORT-TERM R’m LONG-TERM R’m TOTAL R’m Balance at the beginning of the year 14 13 6 19 Increase in provision during the year 45 14 - 14 (12) (13) (6) (19) 47 14 - 14 Utilised during the year Balance at the end of the year The group has a short-term incentive scheme for employees and an equity-settled share-based payment scheme for senior management. It is aligned with the objectives and remuneration philosophy of the group in that a portion of the remuneration is subject to risk. A provision is created in accordance with the rules of the schemes. 13.1.1 Short-term incentive scheme The short-term incentive scheme is paid each year to qualifying employees. The calculation is based on the performance of the group, the division in which the employee is employed as well as an individual evaluation of the performance of the employee. 13.2 EQUITY-SETTLED SHARE-BASED PAYMENT SCHEME Senwes grants shares to its senior management. These shares are acquired and held in a trust for the last three years of the ves- ting period. The scheme will be a forfeitable share award scheme, where shares will be forfeited if future service and performance condi- tions are not met. The fair value of the shares granted are determined by using the market value of the shares on grant date adjusted with the present value of dividends not entitled to. The grant date is the date on which the entity and the participant agree to a share-based payment arrangement. The total expense recognised for the year amounts to R17 million (2017: R10 million). The accumulated equity-settled reserve amounts to R53 million (2017: R41 million). GROUP 2018 R’m 2017 R’m Opening balance 41 31 Vested during the year (5) - Expense recognised 17 10 Initial shares granted 9 10 Increase in shares granted/new participants 8 5 Overprovision due to change in vesting conditions - (2) Forfeited during the year - (3) 53 41 Equity-settled share-based payment expense TRANCHE FAIR VALUE PRICE PER SHARE ON GRANT DATE NUMBER OF SHARES PER TRANCHE GRANTED VESTING DATE 1 - - 30 June 2017 2 1 746 673 9,99 30 June 2018 3 2 322 971 9,55 30 June 2019 4 2 071 191 9,06 30 June 2020 5 1 585 225 8,53 30 June 2021 6 1 585 225 8,05 30 June 2022 Total 9 311 286 The first tranche vested on 30 June 2017. The performance conditions were not met and therefore only 30% of these shares vested for em- ployees still in service on date of vesting. The next vesting will take place on 30 June 2018, subject to performance and other conditions being met. Senwesbel Limited Reg no: 1996/017629/06 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2018 38