Share Options

The following table discloses movements in the Company’s share options during the six months period ended June 30, 2012:

Share option holders Date of
share options
granted		 Share
option
scheme
category(1)		 Outstanding
at beginning
of the period		 Granted
during the
period		 Exercised
during the
period		 Lapsed
during the
period		 Outstanding
at end of
the period		 Subscription
price		 Exercise period
HKD
Directors
Mr Horst Julius Pudwill 16.11.2009 D 600,000 — — — 600,000 6.770 16.11.2009 – 15.11.2019
26.11.2010 D 600,000 — — — 600,000 8.310 26.11.2010 – 25.11.2020
21.5.2012 D — 570,000 — — 570,000 8.742 21.5.2012 – 20.5.2022
Mr Joseph Galli Jr 6.3.2007 C 1,000,000 — — (1,000,000) — 10.572 6.3.2007 – 5.3.2012
16.11.2009 D 1,000,000 — — — 1,000,000 6.770 16.11.2009 – 15.11.2019
Mr Kin Wah Chan 16.11.2009 D 1,000,000 — — — 1,000,000 6.770 16.11.2009 – 15.11.2019
Mr Chi Chung Chan 16.11.2009 D 1,000,000 — — — 1,000,000 6.770 16.11.2009 – 15.11.2019
Mr Stephan Horst Pudwill 16.11.2009 D 1,000,000 — — — 1,000,000 6.770 16.11.2009 – 15.11.2019
21.5.2012 D — 1,000,000 — — 1,000,000 8.742 21.5.2012 – 20.5.2022
Prof Roy Chi Ping Chung BBS JP 16.11.2009 D 600,000 — — — 600,000 6.770 16.11.2009 – 15.11.2019
Mr Joel Arthur Schleicher 16.11.2009 D 400,000 — — — 400,000 6.770 16.11.2009 – 15.11.2019
23.5.2011 D 200,000 — — — 200,000 9.872 23.5.2011 – 22.5.2021
21.5.2012 D — 250,000 — — 250,000 8.742 21.5.2012 – 20.5.2022
Mr Christopher Patrick Langley OBE 16.11.2009 D 400,000 — — — 400,000 6.770 16.11.2009 -15.11.2019
23.5.2011 D 200,000 — — — 200,000 9.872 23.5.2011 – 22.5.2021
21.5.2012 D — 250,000 — — 250,000 8.742 21.5.2012 – 20.5.2022
Mr Manfred Kuhlmann 16.11.2009 D 400,000 — — — 400,000 6.770 16.11.2009 – 15.11.2019
23.5.2011 D 200,000 — — — 200,000 9.872 23.5.2011 – 22.5.2021
21.5.2012 D — 250,000 — — 250,000 8.742 21.5.2012 – 20.5.2022
Mr Peter David Sullivan 16.11.2009 D 400,000 — — — 400,000 6.770 16.11.2009 – 15.11.2019
23.5.2011 D 200,000 — — — 200,000 9.872 23.5.2011 – 22.5.2021
21.5.2012 D — 250,000 — — 250,000 8.742 21.5.2012 – 20.5.2022
Mr Vincent Ting Kau Cheung 16.11.2009 D 400,000 — — — 400,000 6.770 16.11.2009 – 15.11.2019
23.5.2011 D 200,000 — — — 200,000 9.872 23.5.2011 – 22.5.2021
21.5.2012 D — 250,000 — — 250,000 8.742 21.5.2012 – 20.5.2022
Total for directors 9,800,000 2,820,000 — (1,000,000) 11,620,000
Employees 1.1.2007 C 150,000 — — (150,000) — 10.080 1.1.2007 – 31.12.2011
6.3.2007 C 4,325,000 — — (4,325,000) — 10.572 6.3.2007 – 5.3.2012
20.7.2007 D 200,000 — — — 200,000 10.060 20.7.2007 – 19.7.2017
24.8.2007 D 2,060,000 — (100,000) — 1,960,000 8.390 24.8.2007 – 23.8.2017
16.10.2007 D 75,000 — — — 75,000 8.810 16.10.2007 – 15.10.2017
7.11.2007 D 40,000 — — — 40,000 8.088 7.11.2007 – 6.11.2017
23.11.2007 D 500,000 — — — 500,000 7.578 23.11.2007 – 22.11.2017
14.1.2008 D 970,000 — — (100,000) 870,000 7.566 14.1.2008 – 13.1.2018
17.4.2008 D 1,575,000 — — (300,000) 1,275,000 7.780 17.4.2008 – 16.4.2018
14.5.2008 D 40,000 — — — 40,000 7.500 14.5.2008 – 13.5.2018
30.5.2008 D 490,000 — — (40,000) 450,000 7.546 30.5.2008 – 29.5.2018
1.9.2008 D 150,000 — — — 150,000 7.450 1.9.2008 – 31.8.2018
11.9.2008 D 50,000 — — — 50,000 7.430 11.9.2008 – 10.9.2018
2.10.2008 D 75,000 — — — 75,000 7.068 2.10.2008 – 1.10.2018
1.12.2008 D 100,000 — — — 100,000 2.340 1.12.2008 – 30.11.2018
16.11.2009 D 7,080,000 — (120,000) (50,000) 6,910,000 6.770 16.11.2009 – 15.11.2019
7.12.2009 D 100,000 — — — 100,000 6.790 7.12.2009 – 6.12.2019
21.12.2009 D 225,000 — (25,000) (100,000) 100,000 6.350 21.12.2009 – 20.12.2019
28.12.2009 D 30,000 — — — 30,000 6.390 28.12.2009 – 27.12.2019
13.9.2010 D 1,050,000 — (150,000) — 900,000 7.390 13.9.2010 – 12.9.2020
17.1.2011 D 20,000 — — — 20,000 10.436 17.1.2011 – 16.1.2021
16.12.2011 D 100,000 — — — 100,000 7.530 16.12.2011 – 15.12.2021
Total for employees 19,405,000 — (395,000) (5,065,000) 13,945,000
Total for all categories 29,205,000 2,820,000 (395,000) (6,065,000) 25,565,000
Notes:
(1)

Scheme C is the share option scheme adopted by the Company on March 28, 2002 and has expired on March 27, 2007. The Company adopted Scheme D on May 29, 2007.

(2)
No option was cancelled during the period.
(3)
The weighted average closing price of the Company’s shares immediately before various dates on which the share options were exercised was HKD9.14.
(4)
The following significant assumptions were used to derive the fair values using the Black-Scholes option pricing model:
Date of grant Exercise price Expected life of share options Expected volatility based on historical volatility of share prices Hong Kong Exchange Fund Notes rate Expected annual dividend yield
HKD
For the period ended June 30, 2012
21.5.2012		 8.742 3 years 41% 0.298% 1.5%

The share options are vested in whole or in parts over 3 years from the date of grant.

For the purposes of the calculation of fair value, no adjustment has been made in respect of share options expected to be forfeited due to lack of historical data.

The Black-Scholes option pricing model requires the input of highly subjective assumptions, including the volatility of share price. Because changes in subjective input assumptions can materially affect the fair value estimate, in the directors’ opinion, the existing model does not necessarily provide a reliable single measure of the fair value of the share options.

The closing price of the Company’s shares on the date of grant was HKD8.57 per option.

Expected volatility was determined by using the historical volatility of the Company’s share price over the previous 3 years. The expected life used in the model has been adjusted, based on management’s best estimated, for the effects of non transferability, exercise restrictions and behavioural considerations.

The Group recognised a total expense of USD226,000 for the six months period ended June 30, 2012 in relation to share options granted by the Company.

The fair value of the share options granted in the period was HKD2.11 per option.