Defined contribution plans
The Group operates a number of defined contribution pension plans, which include stakeholder pension plans whose assets are held separately from those of the Group, in independently administered funds.
The total expense relating to these plans in the current year was £1.43 million (2012: £1.31m) and represents contributions payable by the Group to the funds.
At the end of the financial year, there were outstanding pensions contributions of £0.09 million (2012: £0.09m), which are included in creditors.
The Group Share Options and Share Matching Plans provide for a grant price equal to the average quoted market price of the Group shares on the date of grant. The vesting period is generally three years. The options expire if they remain unexercised after the exercise period has lapsed. Furthermore, options are forfeited if the employee leaves the Group before the options vest, unless for retirement, redundancy or health reasons. The options are equity settled.
The number and weighted average exercise prices of share options are as follows:
|Options||Weighted Average Exercise Price||Options||Weighted Average Exercise|
|Outstanding at beginning of year||8,976,859||0.13||8,948,751||0.13|
|Granted during the year||525,754||0.35||89,942||0.45|
|Forfeited/lapsed during the year||(185,621)||0.35||(61,834)||0.71|
|Exercised during the year||(1,363,202)||0.17||–||–|
|Outstanding at the end of the year||7,953,790||0.13||8,976,859||0.13|
|Exercisable at the end of the year||6,047,782||0.09||161,592||0.37|
The options outstanding at 31 March 2013 had a weighted average remaining contractual life of 5.2 years (2012: 5.5 years) and exercise prices ranging from £0.085 to £0.825 (2012: £0.085 to £0.825).
The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the services received is measured based on Black Scholes, Binominal lattice and Monte Carlo models. The contractual life of the option is used as an input into this model.
Options granted before September 2004 (with the exception of SAYE) can only be exercised if the Company's growth based on annualised earnings per share in the period or any three consecutive financial years after the grant exceeds RPI plus an average of 2% per annum. Options granted in September 2004 can only be exercisable where the Company's earnings per share growth is at least RPI plus 4% over the three year period from date of grant.
The options granted in September 2009 are exercisable between September 2012 and September 2019 at an exercise price of £0.085 per share. They can only be exercised when the Company's share price has reached a minimum of £0.51, maintained as an average over the three-month period preceding the Notice of Exercise; and the Company has achieved a minimum of 10% ROCE.
The only vesting conditions on all other options are detailed below:
|01/10/2005||7 year SAYE||Binomial||2,042||0.710||0.700||28.81||7.00||7.00||4.33||2.50||0.21|
|01/10/2006||SAYE 7 year||Binomial||2,736||0.600||0.500||39.85||7.00||7.00||4.66||3.00||0.30|
|01/10/2007||SAYE 5 year||Binomial||9,605||0.740||0.750||29.26||5.00||5.00||5.00||3.39||0.17|
|01/10/2007||SAYE 7 year||Binomial||6,091||0.740||0.750||29.26||7.00||7.00||5.06||3.39||0.20|
|01/10/2008||SAYE 5 Year||Binomial||36,888||0.370||0.450||34.02||5.00||5.00||4.17||7.67||0.04|
|01/10/2008||SAYE 7 Year||Binomial||17,836||0.370||0.450||34.02||7.00||7.00||4.31||7.67||0.04|
|30/09/2009||Share Options||Monte Carlo||5,950,000||0.280||0.085||53.54||3.00||3.00||1.94||3.32||0.09|
|01/10/2009||SAYE 3 Year||Binomial||2,135||0.280||0.170||45.44||3.00||3.00||1.83||3.38||0.11|
|01/10/2009||SAYE 5 Year||Binomial||631,141||0.280||0.170||45.44||5.00||5.00||2.58||3.38||0.12|
|01/10/2009||SAYE 7 Year||Binomial||304,327||0.280||0.170||45.44||7.00||7.00||3.09||3.38||0.12|
|01/10/2010||SAYE 3 Year||Black Scholes||210,960||0.370||0.250||47.86||3.00||3.00||1.11||1.36||0.16|
|01/10/2010||SAYE 5 Year||Black Scholes||103,824||0.370||0.250||47.86||5.00||5.00||1.83||1.36||0.18|
|01/10/2010||SAYE 7 Year||Black Scholes||11,682||0.370||0.250||47.86||7.00||7.00||2.43||1.36||0.20|
|01/10/2011||SAYE 3 Year||Black Scholes||61,764||0.410||0.450||53.63||3.00||3.00||0.93||0.00||0.14|
|01/10/2011||SAYE 5 Year||Black Scholes||8,226||0.410||0.450||47.64||5.00||5.00||1.51||0.00||0.17|
|01/10/2011||SAYE 7 Year||Black Scholes||7,920||0.410||0.450||43.20||7.00||7.00||2.18||0.00||0.19|
|01/10/2012||SAYE 3 Year||Black Scholes||418,092||0.460||0.350||53.63||3.00||3.00||0.79||1.09||0.18|
|01/10/2012||SAYE 5 Year||Black Scholes||64,281||0.460||0.350||47.64||5.00||5.00||1.37||1.09||0.21|
|01/10/2012||SAYE 7 Year||Black Scholes||20,240||0.460||0.350||43.20||7.00||7.00||1.93||1.09||0.24|
Expected volatility was determined by calculating the historical volatility of the Group's share price over one, two and three years back from the date of grant. The expected life used in the model has been adjusted, based on management's best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
The Group recognised total charges of £0.09 million and £0.23 million in relation to equity-settled share-based payment transactions in 2013 and 2012 respectively.
As at 31 March 2013, outstanding options to subscribe for ordinary shares of 5p were as follows:
|Grant date/employees entitled||Number of|
|Contractual life of|
|02/07/03 / Executive||37,000||Jul 2006 – Jul 2013|
|27/09/04 / Executive||40,000||Sep 2007 – Sep 2014|
|15/03/05 / Executive||7,000||Mar 2008 – Mar 2015|
|01/10/05 / SAYE||2,042||Oct 2012|
|01/10/06 / SAYE||2,736||Oct 2013|
|01/10/07 / SAYE||15,696||Oct 2012, 2014|
|01/10/08 / SAYE||54,724||Oct 2013, 2015|
|01/10/09 / SAYE||937,603||Oct 2012, 2014, 2016|
|30/09/10 / Executive||5,950,000||Sep 2012 – Sep 2019|
|01/10/10 / SAYE||326,466||Oct 2013, 2015, 2017|
|01/10/11 / SAYE||77,910||Oct 2014, 2016, 2018|
|01/10/12 / SAYE||502,613||Oct 2015, 2017, 2019|
In accordance with IFRS 1, transitional provisions, share option arrangements granted before 7 November 2002 have not been included in the IFRS 2 charge calculated.
All options require continued employment from grant date to the later of vesting date or exercise date.