NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2021 40. SHARE OPTION PLAN (continued) The fair value of the share options granted during 2021 and 2020 was approximately US$12,281,408 (US$1.07 each) and US$7,866,504 (US$1.18 each), respectively. The fair value of equity-settled share options granted during the years ended 31 December 2021 and 2020 was estimated as at the date of grant using a binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used: As at 31 December As at 31 December 2021 2020 Dividend yields (%) – – Volatility 25.59 26.18 Risk-free interest rate (%) 1.13 0.71 Expected life of options (year) 10.00 10.00 The expected life of the options is based on the historical data over the past three years and is not necessarily indicative of the exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other feature of the options granted was incorporated into the measurement of fair value. The 4,837,951 share options exercised during the year resulted in the issue of 2,662,626 ordinary shares of the Company and new share capital of US$2,663 (before issue expenses), as further detailed in note 39. At 31 December 2021, the Company had 63,490,000 share options outstanding under the Plans. The exercise in full of the outstanding share options by the conventional exercise method would, under the present capital structure of the Company, result in the issue of 63,490,000 additional ordinary shares of the Company and additional share capital and share premium of US$92,703,000 (before issue expenses). At the date of approval of these financial statements, the Company had 63,490,000 share options outstanding under the Plans, which represented approximately 2.08% of the Company’s shares in issue as at that date. E S R C A Y M A N L I M I T E D A N N U A L R E P O R T 2 0 2 1 223
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