Atari 2011 Annual Report Download - page 82

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ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
82
Volatility relates to the propensity of an asset's value to fluctuate significantly. The more an asset's value experiences
substantial changes over a short period of time, the higher its volatility. According to IFRS 2, the period over which
historical fluctuations in the price of the underlying shares is taken into consideration to determine volatility must equal
the expected life of the options. Based on the Group’s dividend history, no dividend is anticipated.
The risk-free interest rate corresponds to the interest rate on government bonds (OAT) with a maturity equal to the
estimated life of the options on the various option grant dates.
19.5. GRANTS OF FREE SHARES
In Fiscal Year 2008/2009 and 2007/2008 the Company used the authorizations given at the Shareholders' Meeting of
November 15, 2006 to grant free shares to certain officers and executives.
In order for rights to free shares to vest, their beneficiaries must be part of the Group on the vesting date and grants are
generally contingent on the achievement of certain performance conditions. After the vesting period, shares are subject
to a two-year lock-up period.
The table below shows a summary of transactions relating to free shares in Fiscal Year 2010/2011 and 2009/2010:
The fair value of free shares granted is based on the trading price of the Company’s shares at the grant date. The
weighted fair value of shares granted in Fiscal Year 2008/2009 was €7.96 per share.
The related expense recognized in the years ended March 31, 2011 and 2010 (including the cost of employer social
security contributions) amounted to €0.0 million and €0.5 million respectively.
The fair value recognized is based on the assumption that all performance conditions will be fulfilled.
19.6. OTHER SHARE-BASED PAYMENTS
In the last quarter of Fiscal Year -2008/2009, the Company set up an additional incentive bonus scheme for two of its
executives, based on the Company’s market capitalization. The maximum amount payable under this scheme has been
capped at €35 million. In the event that the Company’s average market capitalization, on a fully-diluted basis, exceeds
€500 million over three successive months before March 31, 2013, each of the two officers would be entitled to an
additional bonus representing 3.75% and 5.0% respectively of the excess between €500 million and €900 million. This
variable compensation may be settled either in cash or in shares at the Company’s discretion and falls within the scope
of IFRS 2.
The related income recognized in the year ended March 31, 2010 amounted to €2.4 million. Since March 31, 2010, the
Company has no longer incentive bonus scheme.
NOTE 20 – NET FINANCIAL INCOME (EXPENSE)
Year ended
March 31, 2011 Year ended
March 31, 2010
Number of free shares outstanding at the beginning of the year 237 731 487 417
Free shares granted during the year - -
Shares cancelled - (249 686)
Shares vested (14 731) -
Number of free shares outstanding at the end of the year 223 000 237 731
(€ million) Year ended
March 31, 2011 Year ended
March 31, 2010
Interest on bond debt (0.5) (0.9)
Interest on bank debt (1.4) (3.2)
Other - (0.3)
Cost of debt (1.9) (4.4)
Foreign-exchange gains and losses (0.2)
Impairment of non-current financial assets 1.0
Other (0.1) (0.2)
Other financial income (expense) 0.7 (0.2)
Total (1.2) (4.6)