In 2005, the Company reserved and set aside for issuance a total of 850,000 shares to be allocated to key personnel. At September 30, 2005, a total of 350,000 shares had been allocated to two senior executives. These shares were priced at $4.33 per share, representing the average market price for the five business days before the granting of the options to the two senior executives. A further 400,000 shares were allocated on October 24, 2005 to the new President and CEO of Lantic.These shares were priced at $3.61 per share, representing the average market price for the five business days before the granting of the options to the President and CEO. On December 17, 2009, 100,000 shares were granted to a senior executive. These shares were priced at $4.70 per share representing the average market price for the five business days before the grant of the options. These shares are exercisable to a maximum of twenty percent per year, starting after the first anniversary date of the granting of the options and will expire after a term of ten years. In fiscal 2013, a total of 23,500 shares were exercised while 100,000 shares were exercised in fiscal 2012. Upon termination, resignation, retirement, death or long-term disability, all shares granted under the Share Option Plan not vested are forfeited. Further to the departure of a senior executive in fiscal 2011, a total of 80,000 shares, priced at $4.70, were forfeited while a further 150,000 shares priced at $4.33, were forfeited in fiscal 2008 following the departure of another senior executive. On March 19, 2012, the 230,000 forfeited shares were allocated at a price of $5.61 to certain executives subject to the approval of the shareholders to amend the Share Option Plan eligible person definition to include all senior personnel at the next Annual General Meeting. The approval was obtained on January 30, 2013. 

## CRITICAL ACCOUNTING ESTIMATES 

The preparation of the Company’s audited consolidated financial statements in conformity with IFRS requires us to make estimates and judgements that affect the reported amounts of assets and liabilities, net revenue and expenses, and the related disclosures.We base the estimates on historical experience, knowledge of economics and market factors, and various other assumptions that we believe to be reasonable under the circumstances. 

## Goodwill Valuation 

We test goodwill for possible impairment on an annual basis, and at any other time if events occur or circumstances indicate that the carrying amount of goodwill may not be recoverable. 

The impairment test consists of comparing the carrying amount of each reporting unit to its fair value, which is calculated using the reporting unit’s market capitalization and discounted cash flow. When the fair value exceeds the carrying amount, goodwill is considered not to be impaired. 

There was no impairment in goodwill in fiscal 2013. 

## Deferred Income Taxes 

We regularly assess the likelihood that the deferred tax assets will be realized from recoverable income taxes or recovered from deferred taxable income, and we record a valuation allowance to reduce the deferred income tax assets to the amount that we believe to be more likely than not realizable. 

## Defined Benefit Pension Plans and Employees’ Future Benefits 

The plan obligations and related assets of the defined benefit and medical retirement plans are presented in Note 19 to the audited consolidated financial statements. Plan assets, equity and debt investments are valued using market quotations. Plan obligations and annual pension expenses are determined by independent actuaries and are based in part on a number of assumptions we provide. Key assumptions in measuring the plan obligations include the discount rate, the rate of salary increases, the long-term health care trend rate, mortality rates and the estimated future return on plan assets. 

