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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
196
Tiger Brands Limited Integrated Annual Report
2014
23 Share-based payment plans
continued
23.2
Black managers participation right scheme (equity settled)
continued
The following inputs were used:
Date of grant
Initial strike
price of
participation
rights
(rand)
Expiry
date
Market
price of the
underlying
stock at
grant date
(rand)
Expected
volatility of
the stock
over the
remaining
life of the
participation
right
(%)
Expected
dividend
yield of
the stock
over the
remaining
life of the
participation
right
(%)
31/01/2014
85,84 30/09/2027 266,00
24,7
3,3
31/07/2014
85,87 30/09/2027 308,75
24,7
3,3
The risk-free interest rate was obtained from constructed ZAR swap curves on the valuation dates using
key inputs being South African money-market rates and swap rates as published by Bloomberg.
In terms of the BEE Phase II transaction implemented on 20 October 2009, 2 835 427 Tiger Brands
shares were acquired by the Black Managers Trust II and 1 813 613 shares by Brimstone Investment
Corporation Limited (Brimstone).
23.3
Black Managers Trust II and Brimstone participation right schemes (equity settled)
Brimstone
Brimstone is required to hold their shares via Brim Tiger SPV (Pty) Limited (previously Business Venture
Investments No 1323 (Pty) Limited) (Brimstone SPV). Brimstone and the Brimstone SPV may not sell or
encumber such shares until 31 December 2017 (the end date). The IFRS 2 charge of R61,9 million
relating to Brimstone has been expensed upfront.
At the end date, Tiger Brands will be entitled to repurchase a certain number of shares from Brimstone
at the subscription price of R7,40. The number of shares will be calculated in terms of a repurchase
formula, whose inputs are:
Ϣ
Ϣ
the total discounted value of the shares (being an amount equal to R148,07 per share) less the
initial equity contribution by Brimstone, increased over the transaction term by a hurdle rate (being
85% of the prevailing prime rate);
Ϣ
Ϣ
an amount equal to 85% of the distributions declared by Tiger Brands but not received by Brimstone
SPV as a result of the condition attaching to the issue of the shares increased over the transaction
term by the hurdle rate;
Ϣ
Ϣ
the market value of a Tiger Brands ordinary share at the end date; and
Ϣ
Ϣ
the subscription price of R7,40 per share.