Notes to the Consolidated Financial Statements continued

For the year ended 31 March 2023

7. Share based payments continued

During the year, it was determined that call options over shares held by the Employee Benefit Trust would be cash, rather than equity, settled via share buybacks based on the net assets per share as approved, from time to time, by the Board. As a result, a share based payment charge of £1,372,000, that had been expensed to the Statement of Comprehensive Income prior to 1 April 2022, was transferred from equity to liabilities in the Statement of Financial Position. At 31 March 2023, the aggregate liability, including employer’s National Insurance contributions, for these options was £1,561,000.

Options over shares issued in accordance with the Company’s incentive schemes

Certain employees have been granted options over ordinary shares of the Company in accordance with the Company’s incentive schemes. The options provide that shares may be acquired at a fixed price in two equal tranches that vest two and three years after the date of the award and expire five years after the vesting date. If an employee leaves and is considered a good leaver, vested tranches expire one year after leaving and unvested tranches expire one year after the future vesting date. If an employee leaves and is considered a bad leaver, vested and unvested tranches lapse on the leaving date.

Movements in the number of options outstanding and their related weighted average exercise prices are as follows:

It has been determined that options over shares issued in accordance with the Company’s incentive schemes would be cash, rather than equity, settled based on the net assets per share most recently approved by the Board. The liability for cash-settled options assumes an annual leavers rate of 10% and is prorated for the extent to which each option has vested. At 31 March 2023, the aggregate liability, including employer’s National Insurance contributions, for these options was £727,000 (2022: £828,000) and during the year a charge of £5,000 (2022: £346,000) has been recorded.

8. Finance income and costs

9. Income tax

The relationship between the expected tax expense based on the standard corporation tax rate of the Company and the tax expense actually recognised in the income statement is reconciled as follows:

The standard rate of UK Corporation Tax for the year is 19% (2022: 19%) but in 2021 the government enacted legislation to increase the standard rate to 25%, for profits above £250,000, with effect from 1 April 2023. As a result, deferred tax has been calculated at 25% (2022: 25%) in these financial statements (see Note 16).