Vtech 2015 Annual Report Download - page 66

VTech Holdings Limited Annual Report 2015
Notes to the Financial Statements
64
16 Share Capital, Share Options and Share
Purchase Scheme (Continued)
(b) Share Options (Continued)
Share option expenses charged to the consolidated income
statement are determined using the Black-Scholes option pricing
model based on the following assumptions:
Date of grant
9 April 2010
(Note 1)
Fair value of each share option as of
the date of grant
HK$22.12
Closing price at the date of grant HK$85.1
Exercise price HK$85.35
Expected volatility 54.24%
Annual risk-free interest rate 0.99%
Expected average life of options 2.5 years
Expected dividend yield (Note 2) 5.22%
Exercisable period 12 April 2012 to 3 May 2014
Notes:
(1) The volatility measured at the standard deviation of expected share price returns is
based on statistical analysis of daily share prices over the three years immediately
preceding the grant date.
(2) Expected dividend yield is based on historical dividends over one year prior to the
grant date.
(3) Changes in the subjective input assumptions could signicantly aect the fair
value estimate.
(c) Share Purchase Scheme
On the Adoption Date, the Company adopted the Share Purchase
Scheme, which is a share incentive award scheme for the purpose
of incentivising employees and attracting suitable personnel for
the continuous development of the Group. Eligible participants
of the Share Purchase Scheme include Directors, officers and
employees of any member of the Group as the Remuneration
Committee may determine or approve. The Awarded Shares
will be the existing shares, which will be purchased on the Stock
Exchange by the independent trustee with funds provided
by the Company, and will be awarded in such manner as the
Remuneration Committee may determine or approve. The
maximum number of shares that can be held by the trustee under
the Share Purchase Scheme is limited to 3% of the issued share
capital of the Company from time to time (excluding shares which
have already been transferred to employees on vesting). The Share
Purchase Scheme shall be valid and effective for a term of 20 years
from the Adoption Date. The Awarded Shares will be granted to
the eligible participants subject to the applicable conditions and
vesting period as determined by the Remuneration Committee.
On 26 March 2013, the Company further adopted an Addendum to
the Share Purchase Scheme for the French Subplan. The Awarded
Shares will be granted to the eligible French employees pursuant
to the Share Purchase Scheme and the French Subplan. The vesting
period applicable under the French Subplan shall not be less than
2 years following the date of the award and a further 2 years sales
restriction period as calculated from the date of the Awarded
Shares being transferred to the eligible French employees.
On 19 May 2015 (the date of this Annual Report), the Company
further amended and extended the Share Purchase Scheme such
that the Company may furnish the trustee of the Share Purchase
Scheme with cash to subscribe for new shares under the general
mandate of the Company (as approved by the annual general
meeting of the Company from time to time) and hold such new
shares in trust for the selected participants (not being connected
persons of the Company) under the Share Purchase Scheme.
During the year ended 31 March 2015, 130,200 shares (2014:
69,000 shares) were acquired on the Stock Exchange pursuant
to the Share Purchase Scheme. The total amount paid to acquire
the shares during the financial year was US$1.7 million (2014:
US$1.0 million).
Details of the Awarded Shares (including those awarded pursuant
to the French Subplan) which have been granted during the years
ended 31 March 2014 and 31 March 2015 are as follows:
2015 2014
Date of award (Note 1) 12 Jun 2014 7 June 2013
Average purchase cost per Awarded Share HK$106.53 HK$95.17
Number of Awarded Shares granted
(Note 4)
94,600 112,800
Cost of related Awarded Shares US$1.3 million US$1.4 million
Vesting Period 12 June 2014 to
18 June 2014
7 June 2013 to
13 June 2013
Vesting Period for the Awarded Shares
granted under the French Subplan
12 June 2016 to
18 June 2016
7 June 2015 to
13 June 2015
Notes:
(1) The date of award refers to the date on which the Company issued the letter of award
to the eligible participants for the entitlement of the Awarded Shares.
(2) No Awarded Shares were granted to executive Directors or non-executive Directors
during the nancial year.
(3) No Awarded Shares lapsed or were cancelled during the nancial year.
(4) These Awarded Shares included 4,800 (2014: 12,400) Awarded Shares granted under
the French Subplan during the nancial year.
As at 31 March 2015, a total of 74,600 shares (2014: 39,000 shares)
were held in trust by the trustee under the Share Purchase Scheme
and 17,200 shares (2014: 12,400 shares) were held in trust by the
trustee under the French Subplan which were granted to the
eligible French employees and remain unvested. The trustee can
exercise the voting rights of the shares held in trust in any general
meetings as shareholder as it sees fit (and the Company has no
power to influence how the trustee should exercise this discretion).
Dividends derived from the shares held under the trust will be
reinvested to acquire further shares.
During the year ended 31 March 2015, share-based payment
expenses of US$1.3 million (2014: US$1.4 million) in respect
of the Awarded Shares were charged to the consolidated
income statement.
(d) Capital Management
The Group’s primary objectives when managing capital are to
safeguard the Group’s ability to continue as a going concern,
so that it can continue to provide returns for shareholders and
benefits for other stakeholders, by pricing products and services
commensurately with the level of risk and by securing access to
finance at a reasonable cost.
The Group actively and regularly reviews and manages its capital
structure to maintain a balance between the higher shareholder
returns that might be possible with higher levels of borrowings
and the advantages and security afforded by a sound capital
position, and makes adjustments to the capital structure in light of
changes in economic conditions.
The Group has no bank borrowings as at 31 March 2015 (2014:
Nil). Adjusted capital comprises all components of equity less
unaccrued proposed dividends.
In order to monitor its capital structure, the Group may adjust the
amount of dividends to be paid to shareholders, issue new shares,
return capital to shareholders or raise new debt financing.
The adjusted capital at 31 March 2014 and 31 March 2015 is
as follows:
The Group The Company
2015 2014 2015 2014
(Restated)
US$ million US$ million US$ million US$ million
Total equity 540.8 562.4 383.0 402.6
Less: Proposed
dividends (153.2) (160.6) (153.2) (160.6)
387.6 401.8 229.8 242.0
Neither the Company nor any of its subsidiaries are subject to
externally imposed capital requirements.