Para 12 - Disclosure in the Directors' Report - SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

12. Disclosure in the Directors Report: 12.1 The Board of Directors, shall, inter alia, disclose either in the Directors Report or in the annexure to the Directors Report, the following details of the ESOS: (a) options granted; (b) the pricing formula; (c) options vested; (d) options exercised; (e) the total number of shares arising as a result of exercise of option; (f) options lapsed; (g) variation of terms of options; (h) money realised by exercise of options; (i) total number of options in force; (j) employee wise details of options granted to;- (i) senior managerial personnel; (ii) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year. (iii) identified employees who were granted option, during any 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 exercise of option calculated in accordance with [1] [Accounting Standard (AS) 20 Earnings Per Share ]. [2] [(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 recognized 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. (m) 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 [3] [ ]. (n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information: (i) risk-free interest rate, (ii) expected life, (iii) expected volatility, (iv) expected dividends, and (v) the price of the underlying share in market at the time of option grant.] [4] [12.2 Until all options granted in the three years prior to the IPO have been exercised or have lapsed, disclosures shall be made either in the Directors Report or in an Annexure thereto of the information specified in clause 12.1 in respect of such options also. 12.3 Until all options granted in the three years prior to the IPO have been exercised or have lapsed, disclosure shall be made either in the Directors Report or in an Annexure thereto of the impact on the profits and on the EPS of the company if the company had followed the accounting policies specified in clause 13 in respect of such options.] ******** [1] Substituted for International Accounting Standard (IAS) 33 vide circular no. SEBI/CFD/DIL/ESOP/ 3/2004/22/7 dated July 22, 2004, w. e. f. July 22, 2004. [2] Inserted vide circular no. SEBI/PMD/MBD/ESOP/2/2003/30/06 dated June 30, 2003. Sub- clause (l) shall come into effect for all options granted on or after June 30, 2003 while sub-clauses (m) and (n) shall come into effect from June 30, 2003. [3] The words on the grant date omitted vide circular no. SEBI/CFD/DIL/ESOP/3/2004/22/7 dated July 22, 2004, w. e. f. July 22, 2004. [4] Inserted vide circular no. SEBI/CFD/DIL/ESOP/3/2004/22/7 dated July 22, 2004, for all Directors Reports signed on or after July 22, 2004.