Vtech 2006 Annual Report Download - page 51

Notes to the Financial Statements
VTech Holdings Ltd Annual Report 200648
17 Share Capital, Share Options and Warrants (continued)
Share Options (continued)
As at 31st March 2006, the number of shares issuable under the options granted pursuant to the 2001 Scheme was 7,214,000,
which represented approximately 3.0% of the then issued share capital of the Company. The movements in the number of share
options under the 2001 Scheme during the year were as follows:
Number of Number of Number of Balance in
Balance in share options share options share options issue at
Exercise issue at granted exercised lapsed 31st March
Date of grant price Exercisable period 1st April 2005 during the year during the year during the year 2006
(Note 1) (Note 2) (Note 8)
26th February 2002 to HK$10.2 26th February 2005 to 9,645,000 –(9,321,000) (70,000) 254,000
26th March 2002 25th March 2007 (Note 4)
10th July 2002 to HK$8.71 10th July 2005 to 760,000 –(675,000) –85,000
8th August 2002 7th August 2007 (Note 5)
20th April 2004 to HK$15.0 20th April 2007 to 2,135,000 –(100,000) (70,000) 1,965,000
19th May 2004 19th May 2009 (Note 6)
19th November 2004 HK$11.03 22nd November 2007 to 1,500,000 –– –
1,500,000
21st November 2009
23rd March 2005 to HK$11.41 23rd March 2008 to 1,480,000 –(50,000) (20,000) 1,410,000
22nd April 2005 22nd March 2010 (Note 7)
12th August 2005 HK$19.3 26th August 2008 to –2,000,000 ––
2,000,000
25th August 2010 (Note 3)
15,520,000 2,000,000 (10,146,000) (160,000) 7,214,000
Note 1: Due to the large number of employees participating in the 2001 Scheme, the relevant information can only be shown within a reasonable range in this
Annual Report. For options granted to employees, the options were granted during the underlying periods for acceptance of such options by the
employees concerned.
Note 2: As one of the conditions of grant, the employees concerned agreed with the Company that the options shall not be exercisable within the period of
36 months from the date on which such options were deemed to be granted and accepted and shall not be exercisable after 60 months from the date on
which such options were deemed to be granted and accepted. However, options shall be automatically vested to the grantees when the grantees reach
60 years of age.
Note 3: On 12th August 2005, the Company granted 2,000,000 options to Mr. Allan WONG Chi Yun, a director of the Company and its subsidiaries pursuant to
the 2001 Scheme to subscribe for 2,000,000 ordinary shares of the Company at a price of HK$19.30 per ordinary share. The closing price of the Company’s
shares traded on the Hong Kong Stock Exchange on 11th August 2005, being the date immediately before the date on which options were granted, was
HK$19.50 per share.
Note 4: An aggregate of 9,321,000 share options were exercised at the exercise price of HK$10.20 during the financial year. The weighted average closing prices of
the shares of the Company immediately before the dates on which the options were exercised and at the dates of exercise were HK$18.65 per share and
HK$18.63 per share respectively.
Note 5: An aggregate of 675,000 share options were exercised at the exercise price of HK$8.71 during the financial year. The weighted average closing prices of
the shares of the Company immediately before the dates on which the options were exercised and at the dates of exercise were HK$22.83 per share and
HK$22.88 per share respectively.
Note 6: An aggregate of 100,000 share options were exercised at the exercise price of HK$15.00 during the financial year. The closing prices of the shares of the
Company immediately before the date on which the options were exercised and at the date of exercise were HK$25.65 per share and HK$26.10 per
share respectively.
Note 7: An aggregate of 50,000 share options were exercised at the exercise price of HK$11.41 during the financial year. The closing prices of the shares of the
Company immediately before the date on which the options were exercised and at the dates of exercise were HK$25.65 per share and HK$26.10 per
share respectively.
Note 8: No options were cancelled during the year.
Share option expenses charged to the consolidated income statement are determined with the Black-Scholes model based on the
following assumptions:
Date of grant
20th April 2004 19th November 2004 23rd March 2005 12th August 2005
Fair value of each share option as of the date of grant HK$5.1 HK$2.6 HK$3.1 HK$5.4
Closing price at the date of grant HK$15.0 HK$10.9 HK$11.4 HK$19.3
Exercise price HK$15.0 HK$11.03 HK$11.41 HK$19.3
Expected volatility 50.7% 49.1% 47.5% 48.0%
Annual risk-free interest rate 3.5% 2.8% 4.0% 3.9%
Expected average life of options 3.5 years 3.5 years 3.5 years 3.5 years
Expected dividend yield 2.6% 7.1% 5.5% 5.1%
The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over
the one year immediately preceding the grant date.