Maxis Berhad | Annual Report 2012

Maxis Berhad // Annual Report 2012 161 FINANCIAL STATEMENTS CORPORATE GOVERNANCE ANALYSIS OF SHAREHOLDINGS OTHER INFORMATION ANNUAL GENERAL MEETING 31 SHARE CAPITAL (CONTINUED) (b) ESOS (continued) The weighted average fair value of share options granted during the financial year determined using a modified Black Scholes model was RM0.28 (2011: RM0.18). The key inputs into the model were: Group and Company 2012 2011 Valuation assumptions: Weighted average share price at date of grant (per share) RM6.41 RM5.45 Exercise price (per share) RM6.41 RM5.45 Expected volatility 9.8% 9.3% Expected share option life 7.2 years 8.2 years Expected dividend yield per annum 5.5% 6.2% Risk-free interest rate per annum 3.5% 4.3% The volatility measured at the standard deviation of continuously compounded share returns is based on statistical analysis of daily share prices since the Company’s Initial Public Offering (“Listing”). Value of employee services received for issue of share options: Group Company 2012 2011 2012 2011 RM’000 RM’000 RM’000 RM’000 Share options granted in 2011 877 668 877 668 Share options granted in 2012 1,550 – 1,550 – Allocation to subsidiaries for share options granted to the employees of the subsidiaries – – (2,427) (668) Total expense recognised as share-based payment 2,427 668 – – 32 RESERVES (a) Merger relief Pursuant to Section 60(4)(a) of the Companies Act, 1965, the premium on the shares issued by the Company as consideration for the acquisition of the subsidiaries is not recorded as share premium. The difference between the issue price and the nominal value of shares issued is classified as merger relief. (b) Reserve arising from reverse acquisition The difference between the issued equity of the Company and issued equity of Maxis Mobile Services Sdn. Bhd. (“MMSSB”) together with the deemed purchase consideration of subsidiaries other than MMSSB and the cash distribution to MCB, is recorded as reserve arising from reverse acquisition.