Annual Report 2012, PDF - Axiata Group Berhad - Investor Relations

Axiata Group Berhad (242188-H) Annual Report 201214. EMPLOYEE SHARE OPTION AND SHARE SCHEME (CONTINUED)(b) ESOS of Dialog (continued)The fair values of options granted in which MFRS 2 applies, were determined using the Black-ScholesValuation model. The significant inputs into the model are as follows:Exercise priceslR12Option life (number of days to expiry) 1,826Weighted average share price at grant dateslR12Expected dividend yield 2.1%Risk free interest rates (Yield of treasury bond of Central Bank of Sri Lanka) 10.0%Expected volatility 28.2%The above expected volatility rate was derived after considering the pattern and level of historical volatilityof entities in the same industry since Dialog does not have sufficient information on historical volatility asit was only listed on the Colombo Stock Exchange in July 2005 during the grant date.The volatility measured at the standard deviation of continuously compounded share return is based onstatistical analysis of daily share prices of these entities over the last two (2) years from the grant date.There was no share-based compensation expense recognised during the financial year (2011: Nil).(c) ESOS of XLIn April 2010, the Nomination and Remuneration Committee of XL approved a share-based compensationplan for certain employees under which XL’s shares are to be given as a compensation for services providedby the employees with no cash consideration. Members of the Board of Directors and certain employeesof XL who have been employed during the performance year and met certain criteria are eligible toparticipate in the program.Under the program, on each end of fourth (4 th ) month subsequent to completion of the performance year,XL issues shares to the eligible employees upon XL achieving specific performance target and the employeessatisfying certain performance conditions and remain in the employment at the share issuance date. Sharesissued by XL vest in two (2) equal proportions and will become employees’ rights if the employees remainin employment for two (2) years and three (3) years as of respective share issuance date.The program has been approved in the Extraordinary General Meeting of Shareholders on 14 April 2011. Theexecution of the program covers performance year 2011 up to 2015 with grant cycles divided into six (6)periods.Total share-based compensation expense recognised in the consolidated profit or loss for the financial yearended 31 December 2012 was RM18.8 million (2011: RM14.6 million) as disclosed in Note 7(c) to the financialstatements.231