Page 82 - Stellar IAR2015

NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)13. EQUITY ATTRIBUTABLE TO THE OWNERS OF THE PARENT(Continued)Forfeitable share planThe Company previously implemented a Forfeitable Share Plan for certain key individuals in the Group on 1 March 2008. The last tranche of shares vested on 1 September 2014. In terms of this scheme forfeitable shares were issued to participants on the terms that they may forfeit the forfeitable shares if they cease to be an employee of an Employer company before the release date which was three years after the award date.The forfeitable reward was subject to the restriction that the forfeitable shares, to which such forfeitable reward relate, may not be disposed of or otherwise encumbered at any time before the release date and are held in escrow by an escrow agent. The fair value of these shares on the respective grant dates was 34 cents and 23 cents per share (pre-share consolidation), being the volume weighted average price at which the Company’s share traded the 5 days prior to the award date.This scheme constituted an equity-settled payment scheme and the cost was amortised over the vesting period with a corresponding increase in equity.As the last tranche of share vested in the previous nancial period, no expense was recognised in the current year (2014: R0.2 million).Preference share capitalOn 30 November 2015, the Company issued 600 convertible redeemable preference shares at R1 million each to raise R600 million in funding. The preference shares were issued at a dividend rate of 95% of Prime and an initial conversion price of R2.78. The redemption date is 31 May 2019. The preference shares are convertible, at the election of the holders, into a maximum of 215 827 338 ordinary shares.Cumulative convertible redeemable preference shares issued by the Group have been treated as compound nancial instruments in accordance with IAS 32 Financial Instruments: Presentation (IAS 32). The liability and equity components of the Preference Shares have been separately classi ed as nancial liabilities at amortised cost in accordance with the e ective interest rate method and equity instruments respectively. The carrying amount of the nancial liability component of the preference shares has been determined with reference to the fair value by discounting the net present value of future cash ows, net of transaction costs, at market rate at inception for a similar instrument without the equity conversion option, being 115% of Prime rate. The carrying amount of the equity component of the compound nancial instrument has been determined by deducting the fair value of the nancial liability component from the fair value of the compound nancial instrument as a whole.78 | STELLAR CAPITAL PARTNERS