Singapore Airlines 2008 Annual Report Download - page 120

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Singapore Airlines Annual Report 2007-08
118
14 Share Capital (in $ million) (continued)
Share-based incentive plans (continued)
Fair values of RSP and PSP
SIA RSP and PSP
The fair value of services received in return for shares awarded is measured by reference to the fair value of shares granted
each year under the SIA RSP and PSP. The estimate of the fair value of the services received is measured based on a Monte
Carlo simulation model, which involves projection of future outcomes using statistical distributions of key random variables
including share price and volatility of returns.
The following table lists the inputs to the model used for the August 2007 and July 2006 awards:
August 2007 Award July 2006 Award
RSP PSP RSP PSP
SIA
Expected dividend yield (%) Management’s forecast in line with dividend policy
Expected volatility (%) 18.30 – 19.46 18.30 18.28 – 22.66 19.31
Risk-free interest rate (%) 2.41 – 2.61 2.48 3.06 – 3.29 3.21
Expected term (years) 1.9 – 3.9 2.9 1.7 – 3.7 2.7
Cost of equity (%) N.A. 8.65 N.A. 8.44
Share price at date of grant ($) 18.90 18.90 13.20 13.20
For non-market conditions, achievement factors are determined based on inputs from the Board Compensation & Industrial
Relations Committee for the purpose of accrual for the RSP until the achievement of the targets can be accurately
ascertained.
The details of the shares awarded under the new share plans during the year since commencement of the RSP and PSP are
as follows:
Number of Restricted shares
Balance at
1.4.2007/later Balance at
Date of grant date of grant Adjustment # Cancelled 31.3.2008
RSP
27.7.2006 258,330 6,825 (4,650) 260,505
1.8.2007 513,950 13,855 - 527,805
772,280 20,680 (4,650) 788,310
Number of Performance shares
Balance at
1.4.2007/later Balance at
Date of grant date of grant Adjustment # Cancelled 31.3.2008
PSP
27.7.2006 140,900 3,801 - 144,701
1.8.2007 153,800 4,152 - 157,952
294,700 7,953 - 302,653
# Following approval by the Company’s shareholders of the declaration of a special dividend of $0.50 per share on 31 July 2007, the
Board Compensation & Industrial Relations Committee approved a revision in all restricted shares and performance shares outstanding on
2 August 2007 under the RSP and PSP respectively. The number of outstanding restricted shares and performance shares reflected here
are after such adjustment.
NOTES TO THE FINANCIAL STATEMENTS
31 March 2008