Osim FR 050407.indd

Notes to the Financial Statements - 31 December 2006 (cont’d)28. Employee benefits (cont’d)a) OSIM Share Option Scheme (con’t)The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and the movements in, shareoptions during the year:No. WAEP No. WAEP2006 2006 2005 2005‘000 $ ‘000 $Outstanding at beginning of year* 6,815 0.74 8,393 0.76Adjustment as a result of bonusissue during the year 1,125 0.60 – –Lapsed during the year (432) 0.86 (220) 0.77Exercised during the year 1 (2,768) 0.60 (1,358) 0.56Outstanding at end of year 2 4,740 0.62 6,815 0.74Exercisable at end of year 4,740 0.62 6,815 0.74* Included within these balance are equity-settled options that have not been recognised in accordance with FRS 102 asthese equity-settled options were granted on or before 22 November 2002. These options have not been subsequentlymodifi ed and therefore do not need to be accounted for in accordance with FRS 102.1The weighted average share price at the date of exercise for the options exercised was $1.6867 (2005: $1.2600).2The range of exercise prices for options outstanding at the end of the year was $0.178 to $0.917 (2005: $0.213 to$1.100). The weighted average remaining contractual life for these options is 6.11 years (2005: 7.13 years).The fair value of share options as at the date of grant is estimated by an external valuer using a Trinomial option pricingmodel, taking into account the terms and conditions upon which the options were granted. The inputs to the model usedare shown below:2006 and 2005Dividend yield (%) 22.00Expected volatility (%) 34.00Historical volatility (%) 34.00Risk-free interest rate (%) 1.346 to 1.792Expected life of option (years) 2 to 10Weighted average share price ($) 1.34Notes to the Financial Statements 141Annual Report 2006