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EMPLOYEE BENEFITS | 12 Months Ended
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Jun. 30, 2021
Employee benefits [Abstract] |
Employee benefits | 19 EMPLOYEE BENEFITS ACCOUNTING POLICIES Cash settled share-based payments (“outgoing long-term incentive”) Cash settled share-based payments are measured at fair value and remeasured at each reporting date to reflect the potential outflow of cash resources to settle the liability, with a corresponding adjustment in profit or loss. Vesting assumptions for non- market conditions are reviewed at each reporting date to ensure they reflect current expectations. Equity settled share-based payments (“new long-term incentive”) The grant date fair value of equity settled share-based payment arrangements is recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The 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 vesting date. 19.1 CASH SETTLED LONG-TERM INCENTIVE SCHEME (“outgoing LTI scheme” or “CLTI scheme”) Terms of the November 2015 grant made under the DRDGOLD Group's outgoing LTI scheme are: • The scheme has a finite term of 5 years and thus no top-up awards are made when the shares vest; • The phantom shares are issued at an exercise price of nil and will vest in 3 tranches: 20 %, 30 % and 50 % on the 3 rd, 4 th and 5 th anniversaries respectively, subject to individual service and performance conditions being met; and • The phantom shares will be settled at the 7 day volume weighted average price ("VWAP") of the DRDGOLD share. The last tranche of the November 2015 grant vested and was fully settled on November 5, 2020. The outgoing LTI scheme is replaced by a new equity settled long-term incentive scheme (refer note 19.2). Amounts in R million Note 2021 2020 Movements in the total liability for long-term incentive scheme is as follows: Opening balance 227.6 51.0 Share-based payment (benefit)/expense - CLTI scheme 5.3 (44.3) 218.1 Vested and paid (183.3) (41.5) Liability for CLTI scheme at the end of the year - 227.6 The total liability for long-term incentive scheme is expected to be settled as follows: - 227.6 Within 12 months after reporting date - 227.6 After 12 months after reporting date - - Reconciliation of outstanding phantom shares 2021 2020 Weighted Weighted average average Shares price Shares price Number R per share Number R per share Opening balance 9,845,638 16,157,058 Vested and paid (9,845,638) 18.62 (5,674,252) 7.31 Forfeited - - (637,168) 7.08 Closing balance - 9,845,638 Fair value The fair value of the liability for the long-term incentive scheme is mostly influenced by the DRDGOLD Limited share price. Other inputs influencing the fair value are the forward dividend yield and estimates of staff retention and performance conditions. The inputs most significantly influencing the measurement of the fair values are as follows : 2021 2020 Grant date 7-day VWAP of the DRDGOLD Limited share - 25.14 2.26 Annualised forward dividend yield - 1.0% 4.3% 19.2 EQUITY SETTLED LONG-TERM INCENTIVE SCHEME (“new LTI scheme” or “ELTI scheme”) Amounts in R million 2021 2020 2019 Share-based payment expense - ELTI scheme 16.0 6.0 - On December 2, 2019, the shareholders approved a new equity settled long-term incentive scheme to replace the cash settled long-term incentive scheme established in November 2015. Under the new LTI scheme, qualifying employees are awarded conditional shares on an annual basis, comprising performance shares ( 80 % of the total conditional shares awarded) and retention shares ( 20 % of the total conditional shares awarded). Conditional shares will vest 3 years after grant date and will be settled in the form of DRDGOLD shares at a zero-exercise price. The key conditions of the grants made under the ELTI scheme are: Retention shares: 100 % of the retention shares will vest if the employee remains in the active employ of the Company at vesting date, is not under notice period and individual performance criteria are met. Performance shares: Total shareholder’s return (TSR) measured against a hurdle rate of 15 % referencing DRDGOLD’s Weighted Average Cost of Capital “WACC”: • 50 % of the performance shares are linked to this condition; and • all of these performance shares will vest if DRDGOLD’s TSR exceeds the hurdle rate over the vesting period TSR measured against a peer group of 3 peers (Sibanye-Stillwater, Harmony Limited and Pan-African Resources Limited): • 50 % of the performance shares are linked to this condition; and • The number of performance shares which vest is based on DRDGOLD’s actual TSR performance in relation to percentiles of peer group’s performance as follows: Percentile of peers % of performance shares vesting < 25th percentile 0% 25th to < 50th percentile 25% 50th to < 75th percentile 75% Reconciliation of the number of conditional shares 2021 2020 Opening balance 5,860,760 - Granted December 2, 2019 - 5,860,760 October 22, 2020 1,979,860 - Closing balance 7,840,620 5,860,760 Vesting on 7,840,620 5,860,760 December 2, 2021 2,930,380 2,930,380 December 2, 2022 2,930,380 2,930,380 October 22, 2023 1,979,860 - Fair value The weighted average fair value of the performance and retention shares at grant date were determined using the Monte Carlo simulation pricing model applying the following key inputs: Grant date October 22, 2020 December 2, 2019 Vesting date October 22, 2023 December 2, 2022 December 2, 2021 Weighted average fair value of 80% performance shares 1 10.49 4.12 4.26 Weighted average fair value of 20% retention shares 18.67 5.49 5.69 Expected term (years) 3 3 2 Grant date share price of a DRDGOLD share 19.43 6.15 6.15 Expected dividend yield 1.33% 3.81% 3.86% Expected volatility 2 63.07% 53.80% 53.80% Expected risk free rate 3.82% 6.80% 6.68% 1 The performance conditions are included in the measurement of the grant date fair value as they are classified as market-based performance 2 Expected volatility has been based on an evaluation of the historical volatility of DRDGOLD’s share price, commensurate with the expected term of the options 19.3 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Interests in contracts None of the directors, officers or major shareholders of DRDGOLD or, to the knowledge of DRDGOLD’s management, their families, had any interest, direct or indirect, in any transaction entered into during the year ended June 30, 2021 or the preceding financial years, or in any proposed transaction which has affected or will materially affect DRDGOLD or its subsidiaries other than disclosed in these financial statements. None of the directors or officers of DRDGOLD or any associate of such director or officer is currently or has been at any time during the past financial year materially indebted to DRDGOLD. Key management personnel remuneration Amounts in R million Note 2021 2020 2019 - Board fees paid 7.6 6.2 5.8 - Salaries paid 75.5 67.3 61.7 - Short term incentives relating to this cycle 73.8 63.6 31.5 - Long term incentives paid during the cycle 19.1 183.3 41.5 15.5 - Retrenchments - - 1.6 340.2 178.6 116.1

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