Your firm has been asked to provide advice to Pita plc in respect of the establishment of an enterprise management incentive scheme.

Pita plc:
– Is a UK resident company which trades in the UK and is quoted on the UK Stock Exchange.
– Has an issued share capital of 10,000,000 irredeemable £1 ordinary shares.
– Has gross assets of £24,000,000 and 180 employees.

Issues – Pita plc:
– Intends to establish an enterprise management incentive (EMI) scheme for nine key employees.

The EMI scheme:
– The scheme would reward seven full-time and two part-time key employees.
– Each key employee will be granted an option to acquire 10,000 shares at £1·75 per share.
– The options will be exercised in six years’ time when the shares are expected to be worth £5 each.
– An ordinary share in Pita plc is expected to be worth £2 when the options are granted.

Required:
(b) (i) Explain, with reference to the information provided, whether or not Pita plc is a qualifying company for the purpose of the enterprise management incentive (EMI) scheme and if it is able to make the scheme available to just the nine key employees. (4 marks)