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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
148 Independence Group NL
Notes to the consolidated financial statements
30 June 2015
31 Share-based payments
(a) Employee Performance Rights Plan
The Independence Group NL Employee Performance Rights Plan ("PRP") was approved by shareholders at the Annual
General Meeting of the Company in November 2011. Under the PRP, participants are granted share rights which will
only vest if certain performance conditions are met and the employees are still employed by the Group at the end of the
vesting period. Participation in the PRP is at the Board’s discretion and no individual has a contractual right to
participate in the plan or to receive any guaranteed benefits.
2015
2014
Number of
share rights
Weighted
average fair
value
Number of
share rights
Weighted
average fair
value
Outstanding at the beginning of the year
3,255,175
2.99
3,239,280
2.66
Rights issued during the year
509,480
2.65
1,821,215
3.29
Rights vested during the year
(932,668)
3.00
(441,370)
3.93
Rights lapsed during the year
(518,230)
3.23
(1,231,204)
3.62
Rights cancelled during the year
-
-
(132,746)
2.04
Outstanding at the end of the year
2,313,757
2.85
3,255,175
2.99
Fair value of share rights granted
The fair value of the share rights granted under the PRP is estimated at the grant date using a trinomial tree which has
been adopted by the Boyle and Law (1994) node alignment algorithm to improve accuracy.
The following table lists the inputs to the models used.
Grant date
Performance
hurdle
Dividend
yield
Expected
stock
volatility
Expected
peer
group/
index
volatility*
Risk free
rate
Effective
life
Weighted
average
share price at
grant date
Probability
ROE
exceeding
target
% % % % Years
$
%
09/01/2015
TSR
2.17
42
63
2.15
2.5
4.60
-
21/11/2014
TSR
2.40
44
62
2.56
2.6
4.16
-
28/02/2014
TSR
1.45
48
22
2.70
0.3
4.13
-
28/02/2014
TSR
1.45
43
24
2.95
2.3
4.13
-
28/02/2014
ROE
-
-
-
-
-
-
<50
21/11/2012
TSR
0.47
41
24
2.64
2.6
4.29
-
21/11/2012
ROE
-
-
-
-
-
-
<50
28/02/2013
TSR
0.45
40
22
2.67
0.3
4.47
-
28/02/2013
TSR
0.45
40
23
2.72
2.3
4.47
-
28/02/2013
ROE
-
-
-
-
-
-
<50
23/11/2011
TSR
1.07
54
30
3.09
2.6
4.69
-
23/11/2011
ROE
-
-
-
-
-
-
<50
13/03/2012
TSR
0.72
46
29
3.56
0.3
4.17
-
13/03/2012
TSR
0.72
46
29
3.56
2.3
4.17
-
13/03/2012
ROE
-
-
-
-
-
-
<50
1. The peer group volatility is calculated as the average volatility of the 22 peer group companies.
The share-based payments expense included in profit or loss for the year totalled $2,949,000 (2014: $4,632,000).
Independence Group NL
84