Annual Report 2009 - Greentown China Holdings Limited

Notes to the Consolidated Financial Statements
For The Year Ended 31 December 2009
35. SHARE-BASED PAYMENT TRANSACTIONS (Continued)
The following table discloses movements of the Company’s share options held by directors and employees
during the year:
Option type
Outstanding
at 1/1/2009
Granted
during year
Exercised
during year
Forfeited
during year 31/12/2009
2009A – 37,356,000 (4,488,500) – 32,867,500
2009B – 10,000,000 – – 10,000,000
2009C – 40,500,000 – (179,000) 40,321,000
2009D – 15,000,000 – – 15,000,000
– 102,856,000 (4,488,500) (179,000) 98,188,500
Exercisable at the end of the year 45,150,000
Weighted average exercise price
HK$2.89
HK$1.00 is payable for each acceptance of grant of share options. In addition, (i) in respect of the 2009A share
options, certain grantees were required to pay an option premium of HK$1.00 per share option up front; and (ii)
in respect of the 2009C share options, certain grantees were required to pay an option premium of HK$3.50 per
share option in three annual instalments. As at 31 December 2009, share option premiums receivable amounting
to RMB60,359,000 and RMB60,359,000 were included in current other receivables and non-current other
receivables respectively according to the payment terms of the share option premiums.
The estimated fair values of the 2009A, 2009B, 2009C and 2009D share options at their respective dates of grant
are RMB39,173,000, RMB30,023,000, RMB168,173,000 and RMB55,132,000 respectively.
The following assumptions were used to calculate the fair values of the share options:
2009A 2009B 2009C 2009D
Grant date share price HK$2.75 HK$7.16 HK$11.00 HK$11.52
Exercise price HK$2.89 HK$7.16 HK$11.00 HK$11.59
Expected life 10 years 10 years 10 years 5.1 years
Expected volatility 58% 59% 59% 57%
Dividend yield 2.81% 2.81% 4.16% 4.16%
Risk-free interest rate 1.450% 2.372% 2.951% 1.79%
The Binomial model has been used to estimate the fair value of the 2009A, 2009B and 2009C share options. The
Black-Scholes pricing model has been used to estimate the fair value of the 2009D share options. The variables
and assumptions used in computing the fair value of the share options are based on the directors’ best estimate.
Changes in variables and assumptions may result in changes in the fair value of the share options.
Expected volatility was determined by using the historical volatility of the share price of comparable listed
companies over the most recent period. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non transferability, exercise restrictions and behavioural
considerations.
Greentown China Holdings Limited Annual Report 2009 175