VINCI - 2005 annual report

CONSOLIDATED FINANCIAL STATEMENTS
Information on the fair value of share options granted and recognised under expenses in
accordance with IFRS 2
The expense recognised under share subscription plans only relates to
plans granted after 7 November 2002 of which rights had not vested at
1 January 2005:
31/12/2005 (*) 31/12/2004 (*)
Plan 01/03/2005 17/12/2002 11/09/2003 07/09/2004
Price of the underlying share at the grant date €56.60 €26.60 €30.68 €44.35
Exercise price €49.40 €26.45 €30.70 €41.20
Lifetime of the option (in years) 7 10 10 10
Number of options granted 2,540,568 5,000,000 2,804,000 3,172,000
of which options with performance-related conditions – 860,000 – –
(*) After the two-for-one share split.
The main assumptions used to determine the fair values of the options in
question were:
31/12/2005 (*) 31/12/2004 (*)
Plan 01/03/2005 17/12/2002 11/09/2003 07/09/2004
Expected volatility 23.55% 29.52% 27.12% 25.23%
Lifetime of the option (in years) 7 10 10 10
VINCI expected return 6.30% 7.25% 6.84% 6.66%
Risk-free interest rate 3.17% 4.56% 4.23% 4.06%
Dividend yield 3.52% 4.41% 4.58% 3.33%
Fair value of the option (in euros) 12.10 5.34 (**) 5.60 9.99
(*) After the two-for-one share split.
(**) The fair value of the options subject to performance conditions under the 17 December 2005 plan is estimated at €4.16 (after the two-for-one share split).
These fair values have been calculated at the options’ respective grant dates
by an external actuary using a binomial valuation model with “Monte
Carlo” simulation.
This model takes account of behavioural assumptions based on past
observations.
22.4.2 Group Savings Scheme
In accordance with the authorisations granted to it by the Shareholders
General Meeting, VINCI’s Board of Directors defines the conditions for
subscribing to the Group Savings Scheme.
In this connection, VINCI issues new shares reserved for employees three
times a year with a subscription price that includes a discount against the
stock market price.
The expense recognised in profit or loss amounted to €34.8 million in
2005 against €19.6 million in 2004.
The benefits granted to employees under the Group Savings Scheme are
recognised in profit or loss and are valued in accordance with IFRS 2 on
the basis of the following assumptions:
– length of subscription period: 4 months;
– length of period during which funds are frozen: 5 years from the end
of the subscription period.
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