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Annual Report 2011-12
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The estimated fair value of each stock options granted on each date was made using the Black-Scholes option pricing
model with the following assumptions:
(` in lacs)
2011-2012 2010-2011
Grant Date
April 1, 2010
Expected Volatility No options have 0%
Life of the options granted (Vesting and exercise period) in years been granted 6 to 9 years
Average risk-free interest rate during the year 7.69% - 8.12%
Expected dividend yield 0%
C. The details of exercise price for stock options outstanding at the end of the current year ended March 31, 2012 are:
Year Range of exercise
prices
Number of options
outstanding
Weighted average
remaining contractual
life of options (in
years)
Weighted average
exercise price (`)
2011-12 `1.35 to `60 250,394 9.58 21.33
2010-11 `1.35 to `60 273,049 10.58 21.22
36.
Options granted are exercisable for a period of 10 years after the scheduled vesting date of last tranche as per the Scheme
The Company has recognized an expense of `102.15 lacs (Previous year `Nil) during the year for intrinsic value charge of
ESOPs issued to it’s employees under this Scheme.
Difference between employee compensation cost (calculated using the intrinsic value of stock options) and the employee
compensation cost (calculated on the fair value of the options) is `27.02 lacs (Previous Year `5.34 lacs).
Had the fair value method been used for accounting in all the schemes above , the profit would have been lower by
`189.57 lacs (Previous year `290.97 lacs) and adjusted basic and diluted EPS would have been `6.71 (Previous year `7.44
per share)
Commitments
Particulars As at
As at
31 March, 2012 31 March, 2011
A. Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not
provided for (net of capital advances)
469.09 534.71
B. Other Commitments
Commitment under EPCG Scheme
The Company has obtained licenses under the Export Promotion Capital Goods (‘EPCG’) Scheme for importing capital goods
at a concessional rate of customs duty against submission of bonds in September 2008.
Under the terms of the respective scheme, the Company is required to export goods or/and services of FOB value equivalent to
eight times the duty saved in respect of licenses within eight years from the date of issuance of license.
Accordingly, the Company is required to export goods and services of FOB value of `20,976.38 lac (Previous year `20,976.38
lacs) by September, 2016.
37. Gratuity (Post Employment Benefit plan)
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a
gratuity on separation at 15 days salary (last drawn salary) for each completed year of service. The Company has formed a
Gratuity Trust to which contribution is made based on actuarial valuation done by independent valuer.
The following table summarizes the components of net benefit expenses recognized in the Profit and Loss Account and the
funded status and amount recognized in the Balance Sheet for respective plans: