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Net compensated absence cost for the year ended included the following components:
Particulars 31 March 2011
Current service cost 20.96
Interest cost 5.16
Expected return on plan assets (3.25)
Net actuarial (gain)/loss recognised in the year 4.52
Expenses recognised in the income statement 27.39
The movement of the net liability can be reconciled as follows:
Particulars 31 March 2011
Movements in the liability recognised
Opening net liability 44.08
Expense as above 27.39
Contribution paid (26.33)
Closing net liability 45.14
The actuarial assumptions used in accounting for the Compensated absence plan were as follows:
Particulars 31 March 2011
Discount rate 8.00% - 8.30%
Expected return on Plan Assets 8.00% - 9.00%
Current service cost and interest cost are included in employee costs.
NOTE U - SHARE BASED EMPLOYEE REMUNERATION
ESOP 2003
The Group has formulated an Employee Stock Option Plan (‘ESOP’) scheme namely ESOP 2003 under which it has made
grants on various dates from time to time. Each grant has a vesting period which varies from 1-2 years and up to 4-6 years
from the date of grant depending on the terms of the grant. The grants are made at the market price of the equity shares of
the Group on either the date or the closing price of the date prior to day of the grant.
The aggregate share options and weighted average exercise price under all the above mentioned plans are as follows:
Number* Price*(`)
Outstanding at 1 April 2010 2,633,500 34.06 - 356.15
Granted 227,000 275.90 - 281.30
Forfeited/cancelled (488,300) 131.28 - 356.15
Exercised (434,500) 34.06 - 356.15
Outstanding as at 31 March 2011 1,937,700 112.05 - 356.15
* All figures have been accordingly adjusted for
- Split of face value from ` 10 to ` 2 in October 2003
- 1:1 bonus issue in April 2005 and Split of face value from ` 2 to ` 1 in September 2007.
All share based employee remuneration would be settled in equity. The group has no legal or constructive obligation to
repurchase or settle the options.
The fair values of options granted are determined using the Black-Scholes valuation model. Significant inputs into the
calculation are:
Weighted average share price (`)* 34.06 - 356.15
Exercise price (`)* 34.06 - 356.15
Weighted average volatility rate 40% - 60%
Dividend pay outs 40%
Risk free rate 5.15% - 8.78%
Average remaining life
1 - 60 months
* All figures have been accordingly adjusted for
- Split of face value from ` 10 to ` 2 in October 2003
- 1:1 bonus issue in April 2005 and Split of face value from ` 2 to ` 1 in September 2007.
The underlying expected volatility was determined by reference to historical data, adjusted for unusual share price
movements. No special features inherent to the options granted were incorporated into measurement of fair value.
As explained in Note EE.3 of the consolidated financial statements, on transition to IFRS, the Group has recognised an
expense of ` 133.91 in the opening statement of financial position with a corresponding adjustment to retained earnings.
Annual Report 2010-2011 101