The company operates an equity based share option 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 equalling the nominal value of the shares. 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.
The options were granted in 2021 and 2022.
At 30 June 2021, 30 June 2022 and 30 June 2023, the potential share-based payment charge on the vested part of options was considered immaterial to the company's accounts and therefore no share-based payment charges were recorded in previous financial statements. The full share-based payments charge relating to earlier periods is included in the year ended 30 June 2024.
A reconciliation of share option movements during the year ended 30 June 2024 is shown below:
Number of options - weighted average exercise price
Outstanding as at 1 July 2023: 13,911 - £139
Granted during the year: 3,500 - £6,545
Outstanding as at 30 June 2024: 17,411 - £6,684
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: £3,478