The company operates two equity based share option schemes (approved EMI and an unapproved scheme) to certain employees which provides additional remuneration for those employees who are key to the company. The options are granted under an approved EMI option plan, with the exercise price amounting to £0.18 per share. The options expire ten years after the date of the grant. Employees are not entitled to dividends until the shares are exercised. All options granted have performance conditions relating to the relevant employee remaining in the employment of the company at exercise.
A reconciliation of share option movements during the year ended 31 December 2021 is shown below:
Number of options - weighted average exercise price
Outstanding as at 1 January 2021: 125,563 - £411,847
Granted during the year: nil - £nil
Forfeited during the year: 4,636 - £15,206
Exercised during the year: 4,010 - £13,153
Outstanding as at 31 December 2021: 116,917 - £383,488
The company is unable to directly measure the fair value of the share options. Instead the fair value of the share options granted during the year is determined using the Black-Scholes model. The model is internationally recognised as being appropriate to value share option schemes similar to that of the company.
Equity settled schemes - charges arising: £11,722