FINANCIAL REPORT (cont.) Notes to the Financial Statements (cont.)
12. ISSUED CAPITAL (CONT.) Employee Share Plan The Board has approved and implemented an Employee Share Plan (“ESP”).
Under the ESP, the Group provides interest free loans to employees to acquire shares in Saunders International Limited, at a specified price per share. The loans are secured by the shares acquired by the eligible employees. The shares will vest and the loans will be repaid, upon a specified anniversary of the issue of the shares. If an eligible employee’s employment with the Group is terminated prior to the specified anniversary of the issue of the shares, the shares will be forfeited, and the Group will be entitled to the total amount raised pursuant to the divestment of the shares. The shares are accounted for as in substance options. Each employee share option converts into one ordinary share of Saunders International Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. At balance date, a total of 17 tranches of the ESP have been issued. Tranche 8: Offer of 400,000 shares in January 2016 with all offers accepted. The tranche has been modified, by the Board in February 2020, to vest in February 2022. During the previous financial year, 400,000 shares vested and there was no forfeiture.
Tranche 9: During the previous financial year 65,000 shares vested and there was no forfeiture. Tranche 10: During the previous financial year 145,000 shares vested and there was no forfeiture. Tranche 11: During the previous financial year 95,000 shares vested and there was no forfeiture. Tranche 12: During the previous financial year 165,000 shares vested and 15,000 shares were forfeited. Tranche 13: During the current financial year 185,000 shares vested and 90,000 shares were forfeited.
Tranche 14: During the current financial year 100,000 shares were forfeited. Tranche 15: During the current financial year 120,000 shares were forfeited. Tranche 16: During the current financial year 10,000 shares were forfeited. Tranche 17: During the current financial year 114,015 shares were forfeited.
The fair value of the share options granted during the financial year is included in below table. Options have been valued using the Black-Scholes-Merton pricing model. Expected volatility is based on the historical share price volatility over the past 3 years. One individual employee holds more than 200,000 options under the ESP Details of the fair value assumptions used are as follows:
Tranche 8 Jan 2016
Tranche 9 Tranche 10 Tranche 11 Tranche 12 Tranche 13 Tranche 14 Tranche 15 Tranche 16 Tranche 17
Grant Date Grant Price
Feb 2016
Feb 2017
Oct 2017
Feb 2018
Feb 2019
Feb 2020
Feb 2021
Aug 2021
Feb 2022
$0.58
$0.58
$0.58
$0.50
$0.59
$0.33
$0.38
$0.69
$0.80
$1.02
Opening Volume
400,000
65,000
145,000
95,000
180,000
275,000
397,500
557,500
235,000
485,428
New grants Exercised Forfeitures
-
-
-
-
-
-
-
-
-
-
(400,000)
(65,000)
(145,000)
(95,000)
(165,000) (15,000)
(185,000) (90,000)
- -
- -
- -
- -
(100,000) 297,500
(120,000) 437,500
(10,000) 225,000
(114,015) 371,413
Closing Volume Exercise Price
-
-
$0.58 45%
$0.58 45%
$0.58 45%
$0.50 45%
$0.59 45%
$0.33 45%
$0.38 45%
$0.69 45%
$0.80 45%
$1.02 45%
Expected Volatility Option Life
6 years
6 years
5 years
5 years
4 years
4 years
4 years
4 years
4 years
4 years
Dividend Yield
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Risk Free Interest Rate
2.05% 1.72%
2.00%
2.75%
2.82% 2.82% 2.82% 2.82% 2.82% 2.82%
Grant date fair value
$0.22
$0.21
$0.22
$0.19
$0.23
$0.12
$0.15
$0.27
$0.31
$0.39
There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date.
Annual Report 2023 77
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