NEGACIÓN DE LA MAYOR o Creada por: Llorenç Guilera

(a) Employee share-based payment of the Company

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(i)

On 19 September 2007, the Group completed the acquisition of certain retail subsidiaries. The acquisition was satisfied by way of issuance of 3,799.73 million new ordinary shares of RM1.00 each of the Company at an issue price of RM1.00 per share and RM500 million nominal value 3-year 3.5% redeemable convertible secured loan stocks ("RCSLS") at 100% of its nominal value of RM1.00 each.

The difference between the fair value of the RCSLS of and shares in the Company issued as consideration and the nominal value of the shares acquired has been classified as merger deficit. The merger deficit was subsequently partially set off against capital redemption reserve of RM2,905,831,000 pursuant to a court approval dated 24 September 2007 granted to the Company.

The ESOS of the Company ("Parkson Holdings ESOS") became effective on 7 May 2008.

Pursuant to the Parkson Holdings ESOS, the following share options were granted by the Company to eligible employees, including executive directors of the Group:

On 12 May 2008, a total of 4,716,400 share options were granted to 462 eligible employees at a subscription price of RM6.35 per share; and

On 7 April 2010, a total of 5,373,500 share options were granted to 529 eligible employees at a subscription price of RM5.31 per share.

At each reporting date, the merger deficit will be reduced by transferring the Group's retained profits for the immediate preceding financial year in relation to the entities under common control, after adjusting for proposed/declared dividend as at that date, in accordance with the Group's accounting policy disclosed in Note 2.4(b).

The main features of the Parkson Holdings ESOS are as follows:

Executive directors and confirmed executive employees of the Group who have been employed on a continuous full time basis for a period of not less than six months on the date of offer shall be eligible to participate in the Parkson Holdings ESOS.

(a) Employee share-based payment of the Company (cont'd.) (ii) - - (iii) (iv) (v)

No options shall be granted for less than 100 ordinary shares nor more than the maximum allowable allotment and each grant of options shall be in multiples of 100 ordinary shares.

The subscription price of each ordinary share under the Parkson Holdings ESOS shall be the weighted average market price of the shares for the five market days immediately preceding the date of offer on which the shares were traded with a discount of not more than 10%, or the par value of the shares, whichever is the higher.

The main features of the Parkson Holdings ESOS are as follows: (cont'd.)

not more than 50% of the shares available under the Parkson Holdings ESOS shall be allocated, in aggregate, to executive directors and senior management; and

not more than 10% of the shares available under the Parkson Holdings ESOS shall be allocated to any eligible executive who, either singly or collectively through persons connected with him or her (as defined in paragraph 1.01 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements), holds 20% or more of the issued and paid-up share capital of the Company.

The aggregate number of options exercised and options offered and to be offered under the Parkson Holdings ESOS shall not exceed 15% of the issued and paid- up share capital of the Company at any one time during the duration of the Parkson Holdings ESOS subject to the following being complied with:

The Parkson Holdings ESOS shall continue to be in force for a period of five years and the Company may, if the Board deems fit upon the recommendation of the Option Committee, renew the Parkson Holdings ESOS for a further five years, without further approval of the relevant authorities or shareholders.

The persons to whom the options have been granted have no right to participate, by virtue of the options, in any share issue of any other company.

The Company renewed the Parkson Holdings ESOS which expired on 6 May 2013 for a further period of five years from 7 May 2013 to 6 May 2018 to be implemented in accordance with the bylaws of the Parkson Holdings ESOS.

(a) Employee share-based payment of the Company (cont'd.)

2013

As at As at Exercisable

Grant date 1.7.2012 Granted Exercised Lapsed 30.6.2013 30.6.2013 7 April 2010 70,000 - - - 70,000 70,000 WAEP (RM) 5.31 - - - 5.31 5.31 2012

As at Lapsed/ As at Exercisable

Grant date 1.7.2011 Granted Exercised Terminated 30.6.2012 30.6.2012 12 May 2008 3,745,100 - - (3,745,100) - - 7 April 2010 4,794,600 - (228,800) (4,495,800) 70,000 70,000 8,539,700 - (228,800) (8,240,900) 70,000 70,000 WAEP (RM) 5.77 - 5.31 5.78 5.31 5.31 (i) Share options exercised during the financial years

(ii) Fair value of share options granted

The following tables illustrate the number and weighted average exercise prices ("WAEP") of, and movements in, share options during the financial years:

Number of options Number of options

The related average share price of the Company during the financial year was RM4.58 (2012: RM5.41) per share.

The fair value of the options granted was estimated on the grant date using a Binomial option pricing model, taking into account the terms and conditions upon which the options were granted.

No option was exercised during the financial year ended 30 June 2013. Options exercised during the financial year ended 30 June 2012 resulted in the issuance of 228,800 ordinary shares at RM5.31 per share.

(a) Employee share-based payment of the Company (cont'd.) (ii) Fair value of share options granted (cont'd.)

7.4.2010 12.5.2008