Remuneration

⁽¹⁾ Resigned with effect from 31 January 2019
⁽²⁾ Resigned with effect from 31 July 2018
⁽³⁾ Resigned with effect from 30 November 2018
⁽⁴⁾ Market value of shares on vesting date

Reconciliation of number of shares outstanding under the CUP for executive directors

⁽¹⁾ The unvested shares shown for Mr Nauta include all share allocations granted during his tenure, including prior to becoming an executive director on 5 July 2018

Accounting policy

Long-term benefits – share-based payments

The company operates equity-settled share-based conditional share plans (CUP) for its employees.

The grant date fair value of equity-settled share-based payment arrangements granted to employees is recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

All share-based remuneration is ultimately recognised as an expense in profit or loss, with a corresponding increase in equity. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of shares expected to vest.

The CUP consists of two components – performance shares and retention shares, both of which are settled by the issue of Hyprop shares. The allocation between performance and retention shares is 70%:30% for all participants. Awards under the CUP are made on an annual basis.

Performance shares

The performance conditions for the shares allocated as performance shares are as follows:

Each of the performance conditions is measured over a three-year performance period. Participants must be employed until the end of the vesting period to be eligible for the award.

Retention shares

Retention shares vest after five years, provided the participant is still employed by the group.

Reconciliation of number of shares outstanding under the CUP

Balances and movements

Valuation methodology

The day-one fair value of the awards granted under the CUP is determined based on the 30-day VWAP of Hyprop shares ending on the grant date, as specified in the CUP rules. The fair value of each outstanding tranche of share awards are detailed below:

Tranche 3 of the performance shares vested during the year at a fair value of R88,00 per share.

Tranche 1 of the retention shares vested during the year at a fair value of R105,99 per share.

Accounting policy

Post-employment benefits – defined contribution plan

A defined contribution plan is a post-employment benefit plan under which the company pays contributions to a separate entity. The company has no legal or constructive obligation to pay further amounts if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Company contributions to defined contribution plans are recognised as an employee benefit expense when the related services have been rendered.

Profile

All permanent employees must be members of the Unicover Pension Fund (an umbrella defined contribution fund) (the fund), except those who elect not to be members in terms of section 197 of the Labour Relations Act 66 of 1995 (LRA).

In addition to the post-retirement benefits, the fund provides comprehensive death, disability, funeral and universal education cover for all members.

Retirement benefits – expense