File_2012_Document1

76 Jindal Steel & Power Limited Business Leadership Sustainable Operations Excellent Governance Robust FinancialsDirectors’ ReportAnnual Report 2011-1277Annexures to directors’ reportAnnexure - IStatement as at 31st March, 2012, pursuant to Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Schemeand Employee Stock Purchase Scheme) Guidelines, 1999.Sl. DescriptionRemarksNo.A. Options granted During the year 2011-12 no stock options were granted to the employeesand Wholetime Directors of the Company and its subsidiaries.B. Pricing formula As approved by shareholders in their Annual General Meeting held on 25thJuly, 2005, price of shares arising on exercise of Options is equivalent to 75%of the average of the daily closing price of equity shares of the Companyduring 30 trading days preceding the date of grant of Options as quoted onthe BSE Limited, (BSE) or the National Stock Exchange of India Limited (NSE)wherever the trading volume of equity shares in aggregate during the saidperiod is more.C. Options vested 2,40,564 (Part III, Series II) 7,40,625 (Part III, Series III)D. Options exercised 5,64,787E. Total number of Ordinary Shares arising as aresult of exercise of Options2,40,564 equity shares of ` 1/- each allotted on 14th April, 2011; 3,24,223equity shares of ` 1/- each allotted on 12th December, 2011 aggregating to5,64,787 equity shares of ` 1/- each.F. Options lapsed On account of leaving of service, due to resignation, retirement or otherwise,by the employees of the Company and its subsidiary, 4,16,402 stock optionslapsed during the financial year 2011-12.G. Variation of terms of Options NILH. Money realised by exercise of Options ` 2,89,19,035/- (Includes premium of ` 2,83,54,248/- )I. Total number of Options in force NilJ. Details of Options granted toi) Senior managerial personnel NAii) Any other employees who receiveda grant in any one year of Optionsamounting to 5% or more of the Optionsgranted during that year.iii) Identified employees who were grantedOptions during any one year, equal toor exceeding 1% of the issued capital(excluding outstanding warrants andconversions) of the Company at the timeof grant.K. Diluted Earnings per Share (EPS) pursuant toissue of Ordinary Shares on Exercise of Optionscalculated in accordance with AccountingStandard (AS) 20 ‘Earning Per Share.’NANA` 22.58Sl. DescriptionNo.L. i) Method of calculation of employeecompensation costii) Difference between the employeecompensation cost so computed at (i)above and the employee compensationcost that shall have been recognised if ithad used the fair value of the Options.iii) The impact of this difference on Profitsand on EPS of the Company.M. Weighted average exercise price and weightedaverage fair value of Options granted forOptions whose exercise price either equals orexceeds or is less than the market price of thestock.N. A description of the method and significantassumption used during the year to estimatethe fair value of OptionsPlace: New DelhiDated: 27th April, 2012RemarksThe Company has calculated the employee compensation cost usingthe intrinsic value method of accounting to account for stock-basedcompensation cost as per the intrinsic value method for the financial year2011-12.The employee compensation cost would have been increased by ` 0.86crore.The effect of adopting the fair value method on the net income and earningsper share is presented below:(` in crore)Net Income, as reported 2,110.65Add: Intrinsic Value Compensation Cost (0.83)Less: Fair value Compensation Cost (Black Scholes0.03Model)Adjusted Net Income 2,109.79Earning per share Basic (`) Diluted (`)As reported 22.58 22.58As adjusted 22.57 22.57Options granted whose exercise price is less than the market price of thestock (adjusted for stock split):Weighted average Exercise PriceWeighted average fair valueNANAThe fair value of each option estimated using the Black Scholes OptionsPricing Model after applying the following key assumptions:i) Risk free interest rate NAii) Expected life NAiii) Expected volatility NAiv) Expected dividend NAv) The price of the underlying shares inmarket at the time of options grantNAFor and on behalf of the BoardNaveen JindalChairman and Managing Director