NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 (CURRENCY - SINGAPORE DOLLARS UNLESS OTHERWISE STATED) D4 Share-based payment arrangements (continued) Singapore Technologies Engineering Performance Share Plan (PSP) and Singapore Technologies Engineering Restricted Share Plan (RSP) Group PSP Year of grant RSP Year of grant 2022 2021 2022 2021 Volatility of the Company’s shares (%) 22.28 22.78 10.65 – 22.28 15.14 – 26.67 Risk-free rate (%) 1.72 0.72 1.14 – 1.84 0.47 – 0.83 Share price ($) 4.07 3.86 4.07 3.86 Dividend yield (–Management’s forecast in line with dividend policy–) (–Management’s forecast in line with dividend policy–) The fair value of the performance and restricted shares is determined on grant date using the Monte Carlo simulation model. During the current year, the Group met partially the pre-determined target performance level and hence, 690,408 performance shares were awarded in respect of the grant made in 2019 under PSP2010. In the prior year, 697,113 performance shares were awarded in respect of the grant made in 2018 under PSP2010. Recognition and measurement The Group operates a number of share-based payment plans. A description of each type of share-based payment arrangement that existed at any time during the period is described in the Directors’ Statement. The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 223
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