CAHYA MATA SARAWAK ANNUAL REPORT 2016

www.cmsb .com.my Cahya Mata Sarawak Berhad 174 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 36. EMPLOYEE BENEFITS (CONT'D.) (a) Movement of share options during the financial year (cont'd.) Options exercisable in a particular year but not exercised can be carried forward to the subsequent years provided that no options shall be exercised beyond the date of expiry of the Scheme. The aggregate maximum allocation of share options to executive directors and senior management of the Group and the Company shall not exceed 50%. The actual allocation of share options to executive directors and senior management as at 31 December 2015 was 16.0%. The weighted average fair value of options granted for the first, second and third offers were RM0.93, RM0.55 and RM2.43, respectively. (b) Share options exercised during the financial year 2016 2015 Weighted average share price at the date of exercise of the options exercised (RM) - First offer - 4.96 - Second offer - 4.98 - Third offer - 5.08 Proceeds received on exercise of options over ordinary shares (RM’000) - 43,586 (c) Fair value of share options granted The fair value of the share options granted during the previous financial year was estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the instruments were granted. The following table lists the inputs to the option pricing models: First offer Second offer Third offer Dividend yield (%) 1.51 4.65 1.38 Expected volatility (%) 39.77 35.97 36.29 Risk-free interest rate (% p.a.) 3.30 3.30 3.33 Expected life of option (years) 4.86 2.95 1.25 Weighted average share price (RM) 2.49 2.42 8.68 The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.