VISA Steel Limited Annual Report 2010-11

Annual Report 2010 -11
Annexure III
Annexure to the Directors’ Report to the Shareholders
Employee Stock Option Scheme
Statement as at 31 March 2011, pursuant to Clause 12 (Disclosure in the Directors’ Report) of the Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
as amended:
Sl.
No.
Particulars Employee Stock Option Scheme 2010
(a) Total number of Options granted during the year Grant A: 900,000
(b) The pricing formula The options are granted at an exercise price equal to prevailing Market
Price per Equity Share, being latest available closing price, prior to the
date of the meeting of the Remuneration Committee, in which options
are granted, on the stock exchange on which the shares of the Company
are listed. If the shares are listed on more than one stock exchange, then
the stock exchange where there is highest trading volume on the said
date shall be considered.
Accordingly, under Grant A, Options have been granted during the year
at the closing market price of the shares of the Company on NSE on the
day immediately preceeding the date of grant of the options, i.e.
Rs. 46.30 per share.
(c) Options vested (as on 31 March 2011) NIL
(d) Options exercised during the year NIL
(e) The total number of Equity Shares arising as a result of exercise NIL
of option
(f) Options lapsed during the year NIL
(g) Variation of terms of options NIL
(h) Money realised by exercise of options during the year (Rs.) NIL
(i) Total number of options in force 900,000
(j) Employee wise details of options granted to:-
(i) Senior Managerial personnel: Basudeo Prasad Modi 50,000
Prabir Ramendralal Bose 50,000
Manoj Kumar Digga 50,000
(ii) any other employee who received a grant in any one year of NONE
option amounting to 5% or more of options granted during
that year;
(iii) identified employees who were granted option, during any NONE
one year, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the
company at the time of grant
(k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on Rs. 4.67
exercise of Option calculated in accordance with Accounting
Standard (AS) 20 ‘Earnings Per Share’
(l) Where the company has calculated the employee compensation
cost using the intrinsic value of the stock options, the difference
between the employee compensation cost so computed and the
employee compensation cost that shall have been recognised if
it had used the fair value of the options, shall be disclosed. The
impact of this difference on profits and on EPS of the company
shall also be disclosed
If the Company had followed fair value method for accounting the stock
options, compensation cost would have been higher by Rs. 1.4 million
for Financial Year 2010-11. Consequently Profit after tax for Financial
Year 2010-11 would have been lower by Rs. 1.4 million and accordingly
earnings per share would be Rs. 4.66.
(m)
(n)
Weighted-average exercise prices and weighted-average fair
values of options shall be disclosed separately for options whose
exercise price either equals or exceeds or is less than the market
price of the stock
Weighted average exercise price of Options granted during the year
whose:
Exercise price equals market price Rs. 46.30 per option.
Exercise price is greater than market price N.A.
Exercise price is less than market price N.A.
Weighted average fair value of options granted during the year whose:
Exercise price equals market price Rs. 19.56 per option
Exercise price is greater than market price N.A.
Exercise price is less than market price N.A.
A description of the method and significant assumptions used Black Scholes Options Pricing Model
during the year to estimate the fair values of options, including the
following weighted-average information:
(i) risk-free interest rate, 7.93%
(ii) expected life, 4 years
(iii) expected volatility, 55.29%
(iv) expected dividends, and 2.77%
(v) the price of the underlying share in market at the time of
option grant
Rs. 46.30 per share
Based on the above assumptions, the Fair Value per option is Rs. 19.56.
The Company has received a Certificate from the Auditors of the Company that the Scheme has been implemented in accordance with Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the resolution passed by the
Members on 17 August 2010.