Senwesbel Consolidated Financial Statements | Page 52

16. EMPLOYEE BENEFITS 16.1 INCENTIVE BONUSES GROUP 2020 R’m 2019 R’m Balance at the beginning of the year 26 47 Increase in provision during the year 24 26 (Over)/under-provision previous year (1) 2 Utilised during the year (25) (49) Balance at the end of the year 24 26 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. 16.1.1 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. 16.2 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 vesting period. The scheme is a forfeitable share award scheme, where shares are forfeited if future service and performance conditions 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 group expense recognised for the year amounts to R17 million (2019: R9 million). The accumulated equity-settled reserve amounts to R47 million (2019: R54 million). Refer to the tabel below for more details. GROUP 2020 R’m 2019 R’m Opening balance 54 53 Vested during the year (24) (8) Expense recognised 17 9 Initial shares granted 5 7 Increase in shares granted/new participants 13 7 Over-provision due to change in vesting conditions - (5) Forfeited during the year (1) - Equity-settled share-based payment expense 47 54 51 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 Senwesbel Limited Reg no: 1996/017629/06