Annual Report 2006 - Venture Corporation Limited

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notes to financial statements December 31, 2006 22 SHARE-BASED PAYMENTS Equity-settled share option scheme The company has share option schemes for qualifying employees of the company and the group. The schemes are administered by the Remuneration Committee. Options are exercisable at a price determined with reference to market price of shares at the time of grant of the options. The vesting period is 1 year. If the options remain unexercised after a period of 5 years from the date of grant, the options would expire. Options are forfeited if the employee leaves the group. Details of the share options outstanding during the year are as follows: Number of share options The Company and the Group 2006 2005 Weighted average Number exercise of share price options Weighted average exercise price $ $ Outstanding at beginning of the year 14,607,000 15.85 19,927,000 13.63 Granted during the year 2,816,000 14.28 2,291,000 18.29 Forfeited during the year (1,976,000) 17.00 (748,000) 18.68 Exercised during the year (3,191,000) 8.92 (5,893,000) 9.14 Expired during the year (153,000) 12.27 (970,000) 14.60 Outstanding at end of the year 12,103,000 17.16 14,607,000 15.85 Exercisable at end of the year 9,339,000 18.02 12,327,000 15.40 The weighted average share price at the date of exercise for share options exercised during the year was $8.92 (2005: $9.14). The options outstanding at the end of the year have a weighted average remaining contractual life of 2.8 years (2005: 2.8 years). granted in 2006 Options were granted on September 15, 2006, with the estimated fair value of the options granted at $2.72 per option. Under this scheme, values were calculated using the trinomial model with the following inputs: Share price at valuation date $13.20 Exercise price $14.275 (1) $12.562 (2) $11.991 (3) $11.420 (4) Expected volatility 37% Exercise multiple (times) 1.3 Risk free rate 3.08% Expected dividend yield 3.72% (1) if exercised between September 15, 2007 and September 14, 2008 (2) if exercised between September 15, 2008 and September 14, 2009 (3) if exercised between September 15, 2009 and September 14, 2010 (4) if exercised between September 15, 2010 and September 14, 2011 76 venture corporation limited
notes to financial statements December 31, 2006 22 SHARE-BASED PAYMENTS (Cont’d) GRANTED IN 2005 Options were granted on September 1, 2005, with the estimated fair value of the options granted at $2.63 per option. Under this scheme, values were calculated using the trinomial model with the following inputs: Share price at valuation date $14.50 Exercise price $18.288 (5) $16.764 (6) $16.002 (7) Expected volatility 41% Exercise multiple (times) 1.3 Risk free rate 2.596% Expected dividend yield 3.392% (5) if exercised between September 1, 2006 and August 31, 2007 (6) if exercised between September 1, 2007 and August 31, 2008 (7) if exercised between September 1, 2008 and August 31, 2010 The company and the group recognised total expenses, as included in employee benefits expense of $5,560,000 (2005: $5,238,000) related to share-based payment transactions during the year. 23 SHARE CAPITAL AND RESERVES SHARE CAPITAL The Company and the Group 2006 2005 2006 2005 Number of ordinary shares $’000 $’000 ’000 ’000 Issued and fully paid up: At beginning of year 269,473 263,580 67,368 65,895 Transfer from share premium account - - 554,145 - Issued upon exercise of options 3,191 5,893 28,461 1,473 At end of year 272,664 269,473 649,974 67,368 As a result of the Companies (Amendment) Act 2005 which came into effect on January 30, 2006, the concept of authorised share capital and par value has been abolished. Any amount standing to the credit of the share premium account has been transferred to the company’s share capital account on the effective date. During the financial year, the company made the following share issues: i) 649,000 new ordinary shares at a price of $12.27 per ordinary share following the exercise of options by executives of the company granted in conjunction with the Venture Manufacturing (Singapore) Ltd Executives’ Share Option Scheme. ii) iii) 2,536,000 new ordinary shares at a price of $8.05 per ordinary share following the exercise of options by executives of the company granted in conjunction with the Venture Manufacturing (Singapore) Ltd Executives’ Share Option Scheme. 6,000 new ordinary shares at a price of $13.77 per ordinary share following the exercise of options by executives of the company granted in conjunction with the Venture Manufacturing (Singapore) Ltd Executives’ Share Option Scheme. annual report 2006 77
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v e n t u r e c o r p o r a t i o n
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We aim to be the best and most reli
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group of companies SINGAPORE Ventur
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2006 was one of the best years in p
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The Group has high expectations for
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GOH GEOK LING Non-Executive Directo
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corporate information Registered Of
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corporate governance The Company co
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Annual Report 2006 - Venture Corporation Limited

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