Annual Report - Praj Industries - 2009-2010

PRAJ INDUSTRIES LIMITED

ANNUAL REPORT 2009-2010

DIRECTOR'S REPORT

To
The Members of
Praj Industries Limited,

Your Directors are pleased to present the 24th Annual Report and the
Audited Statements of Accounts for the yearended 31st March, 2010, together
with the notice of the Annual General Meeting.



Financial Results:

In the year under review, your Company has recorded a total income of
Rs.6447 million (previous year Rs. 7957 million). While the total income
decreased by 19%, Profit before Tax decreased by 23% to Rs. 1231 million
(previous year Rs. 1608 million). The performance was impacted by adverse
global market conditions, against which your Company's performance can be
considered modest.

(Rs. in million)
2009-10 2008-09

Turnover 6023 7719
Other Income 424 238
Total Income 6447 7957
Total Expenses 5216 6349
PBT 1231 1608
PAT 1139 1298

Dividend:

The Board of Directors had declared an Interim Dividend of Rs.1.44 per
share on Face Value of Rs.2/- per share (72 %) for the financial year 2009-
2010. The Board has decided not to recommend any further dividend for the
Financial Year2009-2010.

Credit Rating:

a. CRISIL has reaffirmed 'Pl+' rating to Company's short term banking
facilities which signifies that the degree of safety regarding timely
payment of instruments is very strong.

b. CRISIL has also upgraded its rating of the Company's long-term
bank facilities to AA/Stable' from AA-/Stable'. The 'AA' rating signifies
high safety with regard to timely payment of long-term financial
obligations.

Subsidiaries:

Pacecon Engineering Projects Ltd. (PEPL), BioCnergy Europa B. V.,
Netherlands, Praj Jaragua Bioenergia S.A., Brazil and Praj Far East Co.
Ltd., Thailand are subsidiaries of your Company and are operating in their
respective areas.

During the year under review, your Company divested its shareholding in
Praj Schneider Inc., USA. Consequently, it ceases to be a subsidiary of
your Company. This decision was taken keeping in mind the need to re-
structure its business in North and South America. This led the Company to
incorporate anew wholly owned subsidiary in Texas,Houston called Praj
Americas Inc.

Your Company has applied to the Central Government for exemption from
attaching the audited accounts of the subsidiaries to the Annual Accounts
of your Company, for the financial year ended 31st March, 2010. The said
application is under process and final approval letter is awaited. A
statement containing brief financial details of the Company's subsidiaries
for the year ended 31st March, 2010 is included in the annual report. The
annual accounts of these subsidiaries will be made available for inspection
to members of the Company/its subsidiaries upon request at the registered
office of the Company.

Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges,
Management Discussion and Analysis Report (Annexure 1), Sustainability
Report (Annexure 2) and Report on Corporate Governance and Compliance
Certificate on Corporate Governance (Annexure3)are annexed to this report.

Directors:

During the year under review, Mr. Rajiv Maliwal has been appointed as
Additional Director with effect from 14th August, 2009. He holds office
upto the date of the ensuing Annual General Meeting. He is eligible for
appointment as Director. Mr. Daljit Mirchandani retired at the 23rd Annual
General Meeting held on 9th July, 2009.

Mr. Berjis Desai and Mr. Kishor Chaukar retire by rotation in terms of
Article 83 of the Articles of Association of the Company and being eligible
offer themselves for re-appointment.

Auditors:

a) Internal Auditors:

The Internal Auditors, M/s. Khare Deshmukh &Co., Chartered Accountants,
Pune, (Formerly known as M/s. Khare & Bhide) have conducted the internal
audits periodically and submitted their reports to Audit Committee. Their
reports have been reviewed by Audit Committee and Statutory Auditors.

b) Statutory Auditors:

The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants,
Mumbai, hold office until the conclusion of the ensuing Annual General
Meeting. The Company has received a letter from them to the effect that
their re-appointment, if made, would be within the prescribed limits under
Section 224 (1B) of the Companies Act,1956.

Directors' Responsibility Statement:

In accordance with the requirements of Section 217(2AA) of the Companies
Act, 1956, the Board of Directors states that:-

* In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;

* The accounting policies selected have been applied consistently and
judgements and estimates made are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the end of the
financial year 2009-10 and of the profit of the Company for that period;

* Proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;

* The annual accounts have been prepared on a going concern basis.

Employee Stock Option Plan:

* During the year, your Company allotted 1,307,410 equity shares on
exercise of options under the Employee Stock Option Plan 2005 Grant I &II.
Consequent to the above, the Issued, Subscribed and Paid - up Equity Share
Capital of your Company increased from183,431,082 equity shares (Rs.366.862
million) to 184,738,492 equity shares (Rs.369.477 million) as of March 31,
2010.

* During the year, the Company has issued Grant III of Options under the
Employee Stock Option Plan 2005 aggregating 3,029,626 options to its
eligible employees at the rate of Rs.81.75 per option.

* The information to be disclosed as per SEBI (Employees Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to
this Report (Annexure 4).

Particulars of Employees:

The statement of particulars required pursuant to section 217(2A) of the
Companies Act,1956 read with the Companies (Particulars of Employees)
(Amendment) Rules, 2002, forms a part of this Report. However, as permitted
by the Companies Act, 1956, the Report and Accounts are being sent to
Members and other entitled persons excluding the above statement. Those
interested in obtaining a copy of the said statement may write to the
Company Secretary at the Registered Office and the same will be sent by
post. The statement is also available for inspection at the Registered
Office, during working hours upto the date of the Annual General Meeting.

Energy Conservation, Technology Absorption, Adaptation, Innovation:

The technology,plant & equipment offered by your Company adopts
sustainability criterion in terms of energy, water, environment, safety and
social dimensions.

Towards this end, your Company carries out R&D for systems that will
enhance sustainability.

The Company specifically focusses on innovation and has set up a facility
called Praj Matrix - The Innovation Center, which is currently engaged in
development of cellulosic ethanol program.

Your Company has taken an initiative to enhance its commitment to
sustainable practices. A Sustainability Report is separately enclosed.
Towards these initiatives, the Annual Report for the year ended 31st March,
2010 contains only those details that are statutorily required to be
published in the Annual Report along with Abridged Standalone Financial
Statements prepared in compliance with the provisions of Section 219 of the
Companies Act, 1956. The complete and full set of Annual Report is made
available on the Company's web-site at www.praj.net in the Investor's
Lounge Section. The same is also available for inspection at the Registered
Office during working hours upto the date of the Meeting. Any member
interested in obtaining a copy of the full Annual Report may write to the
Company Secretary or email us at investorsfeedback@praj.net

Foreign Exchange Earnings & Outgo Rs. in millions
31/03/2010 31/03/2009

Earnings 2676 3553
Outgo 762 1018
NFE 1914 2535

Acknowledgements:

Your Directors wish to place on record their appreciation towards all
associates including Customers, Collaborators, Government Agencies,
Financial Institutions, Bankers, Suppliers, Shareholders, Employees and
others who have reposed their confidence in the Company.

For and on behalf of the Board of Directors

Shashank Inamdar Sivaramakrishnan lyer
CEO & MD Director

PLACE: PUNE
DATE : 29TH MAY, 2010

Annexure 1

Management Discussion & Analysis

Overall Review:

The real impact of the global meltdown on the capital goods industry became
more pronounced during the FY 2009-10, as investments came under pressure
and many project sponsors re-evaluated their priorities. During this
period, it was considered that the Company should act with prudence and
bide its time for revival of the global economy. It was felt that we should
not lose the edge that we have created for ourselves, in terms of the
market and technology.

While India continues to lead the turnaround, we see signs of revival in
some of our international markets. In some markets the wait could be
longer. We will keep evaluating the markets constantly and intensify our
efforts as markets revive.

Financial Review:

Your Company recorded performance in line with the prevailing market
trends. Inspite of the challenging environment, your Company continues to
post high double digit margin at 20%. Although a drop over the previous
fiscal, the performance can be termed as satisfactory, against the backdrop
of external climate. The Company has a strong cash position which it plans
to deploy towards growth initiatives.

Operating Environment & Opportunities:

Market conditions continue to be challenging. Biofuels is a relatively new
business paradigm. Improved economic conditions will likely see resumption
of biofuels investments. The bioethanol industry saw 17% increase in
production with existing capacities coming on line, even in the USA, on the
back of improved crush margins. The share of ethanol in global gasoline
fuel use increased from 3.7% to 5.4%.in the Year 2009.

Strategic Focus - Second Generation Field Demo Plant

Praj Matrix - The Innovation Center, the R & D facility of Praj, began
pilot scale trials on second generation, lignocellulosic ethanol plant over
a year ago. The pilot plant,with a capacity of 2 metric tons/day feedstock
(dry basis), involves a thousand fold scale up. The program involves
working with feedstocks like bagasse, corn cobs and wood chips. Within this
period, the pilot plant has made significant headway. Key milestones
include:

* Optimization of Fractionation of streams (C5, C6 and Lignin)

* Novel approach to enzymatic hydrolysis process

* Proprietary C5 mutant micro-organism and C6 micro-organism

* Validation of Energy and Effluent Management System

A patent for the process has been filed.

It is now time to optimize and scale up these findings to the next level.
The Board of your Company has taken a decision to invest into a field demo
plant. Various models of this investment are under exploration. The field
demo plant will provide vital data towards commercialization.

Market Dynamics

Alcohol/Ethanol Industry Review:

Of the total revenues of the Company, revenues from India usually
constitute between 50 and 60%. And, 40-50% of total business comes from
offerings for bioethanol production. While new capacities in USA are
presently on hold, USA presents the largest opportunity for advanced
biofuels at 21 bln gallons per annum till 2022. First generation will
continue to come on line in EU, Latin America and South East Asia where
mandates have been announced but are yet to take effect in terms of
capacity building. Feedstock prices, which were earlier on the upswing, are
also well under control. Starch sources are seeing good supply position as
also adequate capacity for sugar production, which is yet another source of
comfort. Sugar prices having come off, will lead to increased capacity
addition for ethanol production mainly in countries which are producing
ethanol directly from sugarcane.

India is still predominantly a beverage alcohol market with a YOY growth of
12-15%. The Group of Ministers formed to advise the Government on Fuel
Ethanol policy have recommended a purchase price of ethanol, which upon
implementation should spur further interest in augmenting ethanol
capacities.

Your Company has also gained the distinction of becoming the largest
cassava based ethanol plant supplier in the South East Asia region.

Beer Industry Review:

Brewery Plant & Equipment business is a steady stream. Beer Plants account
for 10-12% of our revenue mix. Almost 60% of India's beer flows from plants
supplied by us.

Praj has undertaken steps to enhance its revenue streams from brewery
business and is now pitching for business in overseas markets. We expect
encouraging results in the ensuing years.

Bio-diesel Industry Round-up:

The market for biodiesel has been subdued due to high feedstock prices
which in turn have impacted the Biodiesel Plants business of your Company.
Meanwhile, your Company focused on creating significant differentiators for
its biodiesel offering. A demo plant has been installed at Praj-Matrix to
study contemporary technologies for biodiesel production.

Feedstock continues to be a major challenge as also excess capacity in some
regions. The Company has been working with non-food crops, including
Jatropha and Safflower (non-edible variety) through its agri-division.

Biochemicals Solution:

The biochemicals solutions group supplies bionutrients, additives and
catalysts that act as performance enhancers. Praj supplies a range of
nutrients to the fermentation industry like distilleries and breweries
which is consumed in the course of production. Praj is currently expanding
this range to address processes outside the distillery and brewery line.
This business is seen as adding annuity revenues. Currently, this segment
constitutes a small proportion of total revenues.

Awards, Certifications & Recognition:

Your Company's work continues to be appreciated. We have recently recieved
the Emerging Enterprise Award in Cleantech by Cleantech Forum, a worldwide
organization engaged in bringing cleantech sector on the same platform.

We have also received award for Export Performance for the year 2008-09
from Engineeering Export Promotion Council (EEPC) who has given us the Top
Exports Award - (Medium Enterprise) Gold Trophy. We have received the gold
trophy second year in a row. An award for export performance has been
received from The Ministry of Industry, Government of Maharashtra.

We have received ISO 9001:2008 from TUV during the year. This certifies
that our internal processes are more and more in line with our customers.

For a fourth year in a row, Chairman of your Company has been invited to
lead the agenda of the Bio-fuels Industry as the Chairman of the National
Bio-fuels Committee, CII, (2010-11). The Committee has done some exemplary
work in documenting different aspects of biofuels including carbon
foot printing and realistic price for bio-fuels in India, which have also
been shared with the concerned agencies.

Our Executive Chairman, Pramod Chaudhari, got an opportunity to represent
the country at the COP15 Copenhagen Summit on Climate Change.
Representation at this forum holds tremendous significance, as the business
of the Company concerns itself with the climate change mitigation process.

Business Model:

In order to serve its customers as a single point solution provider for
biofuels, water & wastewater treatment and brewery, your Company has scaled
up its business model to undertake complete EPC*, EPCM** contracts that
would not only improve competitiveness, but also increase revenues per
contract. The Company has made adequate preparations to address different
geographies, in terms of capacity and capabilities. In many of the earlier
projects, your Company has been providing back up for this scope of work.

(* Engineering, Procurement & Construction; ** Engineering, Procurement &
Construction Management)

Resources:

Your Company's resources in terms of manufacturing capacity, human
resources, engineering services, supply chain and customer engagement are
being improved and amalgamated in line with the growth plans and new
offerings.

Business Network:

The Company has adequate coverage in terms of manpower and establishment in
key locations to serve markets globally. Apart from India, the Company has
presence in Thailand, UAE, Africa, South & Central America, North America
and Europe. For South and North America, Praj has recently established a
Company in Houston, Texas.

Human Capital:

The business model of your Company demands high caliber personnel, as each
offering of the Company is customized and needs a deep insight into the
technology and delivery of solutions. This has led the Company to devise
performance management system which takes into account capabilities that
need to be constantly upgraded, whether through training programs or
through other interventions. Recognizing the long term goals, the Company
has launched a middle management leadership program.

Considering the change in business model to EPC, the Company has inducted
talent which would enable the Company to make these offerings competently.

Future Outlook:

Your Company has been working on a long range plan for some time. The plan
examined opportunities in synergistic areas as also new ideas that would
spur growth. Timelines for the same are now being brought forward and two
new business lines have been rolled out. One is Water & Wastewater business
and another is Customized Engineering & Equipment. These businesses derive
strength from our existing business of providing solutions for wastewater
treatment for distilleries and breweries and process equipment fabrication
of high standard.

Water & Wastewater Treatment:

The Company has introduced new business line for water and wastewater
treatment systems for industrial and municipal segments. Availability of
clean water is a growing challenge and technology-driven solutions are the
need of the hour. Praj has been offering these solutions for its existing
business which is now being extended to other segments. The Company has
retained a reputed business consulting firm for enabling quick scale-up.

Starting with domestic market, the Company plans to grow the business
globally. The estimated market size is in the region of Rs. 400 bln over a
span of five years. The Company has already resourced the business group
and has achieved a small breakthrough in this sector. The Company is in
advanced stage of preparation for this business.

Customized Engineering & Manufacturing:

This business line concerns itself with offering process equipment for
industrial applications. Your Company is leveraging its sound reputation
and capabilities in fabrication of high quality equipment and systems.

Through this business line, your Company gets access to general process
industry, opening multiple industry opportunities. The Company is growing
these businesses as it sees a good growth in the general process industry.

Your Company is also working on several other growth related programs.

Risks & Concerns:

Your Company has a well-documented Risk Management Policy. The policy is
reviewed periodically by the Management & Audit Committee and appropriately
modified, as and when necessary. Based on the operations of the Company,
risks are identified and steps are taken to mitigate the same.

Economic situation in key markets of your Company is seen as an essential
risk element. The Company has created a strong presence in emerging
economies which have been relatively unhurt in this crisis which providing
it with a partial hedge. Also, the Company has brought forward its growth
plans in synergistic areas like water and wastewater treatment business.

As 50% of the Company's business comes from overseas markets, the Company
has put in place a forex risk management system.

The Company is also exposed to raw material risk. The price of Stainless
Steel, which is the main raw material for the equipment supplied and
sourced by the Company is, at times, volatile. While the Company hedges
against these fluctuations, the Company is still exposed to this price
risk.

Apart from the above mentioned specific risks, the Company recognizes
various risks inherent in the performance of a contract which may relate to
commercial terms or political and geographical risks. The Company has a
robust policy in place to counter these risks, to the extent possible.

The Company is also exposed to risks on account of the sector it serves.
Biofuels and Brewery business is governed by the legislation of different
geographies served by the Company. The Company has adequate geographical
spread.

Internal Control Systems:

The Company has instituted adequate internal control procedure(s)
commensurate with the nature of its business and the size of its operations
for the smooth conduct of its business.

Internal audit is conducted continually, at all locations and covers the
key areas of operations. It is an independent, objective and assurance
function, responsible for evaluating and improving the effectiveness of
risk management, control and governance processes. The Internal Auditors do
not have any adverse comments on the internal control systems of the
Company.

Forward Looking Statement:

Statements in this report, particularly those which relate to Management
Discussion and Analysis, describing the Company's future plans,
projections, estimates and expectations may constitute 'Forward Looking'
statements within the meaning of applicable laws and regulations. Actual
results might differ materially from those either expressed or implied.

Annexure 2

Sustainability Report:

Incorporating Corporate Social Responsibility and Environmental
Sustainability

Sustainablility can be defined as an ability to endure.

Sustainable activities are those that 'meet present needs without
compromising the ability of future generations to meet their needs'.

The vectors of sustainability include Social, Economic and Environmental
measures inrelation to a 'for-profit' organizations. We do believe that the
long term performance of our Company is an aggregate of our performance as
well as the well-being of the society we operate in and the state of
environment. Having recognized this, your Company is focusing on Corporate
Social Responsibility and Environmental Sustainability as the central
pillars.

Apart from the Company's business activities which focus on clean and green
technologies (as stated in its vision), the Company also performs voluntary
actions that contribute to sustainable living.

The Company undertakes internal and external initiatives which meet the
goals of Sustainability. In addition, Praj is contributing to the corpus of
Praj Foundation, which assists the Company in CSR activities.

Elaborated below are activities undertaken during the FY 2009-10 through
Praj Foundation and Praj's Green Group, which is charged with the
responsibility of sustainable work and living-space.

Environment:

Cleancity:-

Disposal of solid waste is a growing challenge for rapidly developing
municipalties. Recognizing this, your Company is focusing on some aspects
of management of solid waste. Praj foundation and INORA are jointly
implenting a project of Decentralised Biodegradable Waste Management
through nine Satellite centers located in different parts of the city. The
idea is to create awareness and teach the methods involved in
bio-degradation of waste through vermin-composting. This is done through a
series of committee meetings, training sessions and demonstrations.

In last two years more than 83 residential societies/institutions have
installed composting units. The total quantity composted averages 4MT/day.

A competition titled 'Garden from Waste' was organized for citizens who
employ this method and use the compost in their kitchen garden. This also
promotes use of organic nutrients/fertilizers.

Stream of life:

Water is becoming more and more scarce, more so in the rural areas. In the
previous fiscal, Praj Foundation supported the Ecological Society in the
'Nirmal Ganga Abhiyan', a project for ecological restoration of existing
streams in three villages near Pune. These streams are being restored with
the help of school children, teachers &villagers. Participating students
have created loose boulder structures for soil and water conservation and
planted 4350 nos. native species along the banks of the stream.

Praj Silver Jubilee Bio Diversity Park:

This a Public Private Partnership project. An area of 2 acres has been
allotted by Pune Municipal Corporation on BOT basis near the Pashan lake in
the vicinity of the Corporate Head Office of the Company. A tree plantation
drive was initiated on the occasion of 'World Environment Day'. 240 plants
of 25 native species have been planted by dignitaries as well as Praj
employees and their families.

Energy Efficient Work-place:

Praj has initiated an exercise which involves auditing and installing
systems for energy reduction and efficiency at different locations. The
Company has already demonstrated reduction of10% in energy intake
attheCorporateOfficeasalso9% reduction in C02 emission
Praj has also implemented an Energy Monitoring System (EMS).

The Bureau of Energy Efficiency (BEE), an agency of the Government of
India, under the Ministry of Power, has accorded a One star rating to the
Praj Building. Your Company would like to take the efforts further through
adherence to CII Mission and other internal initiatives.

Other initiatives

Your Company is a signatory to the CII Mission on Sustainable Growth
wherein it commits to reduce the impact of its operations on the ecology.
Some key tenets of this document involve, reduction in energy and water
consumption, reduction in waste generation, increase in renewable energy
consumption

Your Company has instituted a Health, Safety and Environment Policy which
is in effect at various locations. Some highlights during the year include:

* Reduction in accidents/Safe operations leading to reduced accidents

* Safety training for staff

* Environmental monitoring at manufacturing centers

* Started preparations for ISO 14001 and OHSAS 18001 at various locations

* Conducted courses on work-place stress, healthy living and health
checkupcamp

Praj has partnered the CII National Bio-fuels Committee and E & Yona study
to arrive at quantum of Carbon Mitigation through use of biofuels. This
first-of-its-kind study has been documented by CII and circulated to
various stakeholders.

Education:

Adoption of Technical Education Institute:

Industrial Training Institutes (ITIs) have been imparting vocational
training throughout the country. In order to improve the employability
quotient of students from rural areas, the Government announced a scheme
wherein Corporates would participate in the upgradation of Government led
institutes through various interventions. Praj has undertaken mentorship of
an ITI at Velhe, near Pune. During the first year of this mentorship, a 3-
months 'hardware networking course' was initiated and completed. This ITI
holds special significance as people from this area have the least access
to educational facilities, leave alone technical education. The first batch
has successfully completed the course. Students have already enrolled for
the second batch .Other courses are also in the offing.

Green Group Employee Engagement:

Employees engage themselves in green group activities, a forum created for
awareness, education and implementation of sustainable living practices.
This includes transportation to and from workplace, travelling for official
purpose; green gardening at home; appreciation of wild-life or simply
donating blood.

Human Capacity Building:

Praj believes that Intrapreneurship (internal entrepreneurship;
www.mahaintrapreneur.com) is an important concept for development of
organizations. In order to promote this trait amongst professionals, Praj
announced the Mahaintrapreneur Award. In the Year 2009, the first
competitive award nominations were called for and announced. Your Company
is happy with the process and the outcome. The Company plans to continue
with these awards.

Learning by Doing:

Praj Foundation is jointly implementing a project of Environment Awareness
& Conservation with a residential school near Pune Girls Sainiki School.
This initiative was undertaken in FY 2008-09 wherein students undertook
bio-composting of kitchen waste which was then applied to the kitchen
garden at the school. Having found it very useful, the activity was
continued during the FY 2009-10. Under the 'One tree One student'
programme, 255 trees planted on the campus, are being nurtured by the
students. A Green Scholarship has been instituted to recognize efforts of
the most environment friendly student.

Sustainability Workshop:

Praj Foundation conducted Sustainability Workshop with a view to create
awareness amongst small and medium scale enterprises in and around the city
of Pune,for adoption of sustainable practices at workplace. Two such
sessions have been concluctedso far.

Health

Awareness:

Praj Foundation is continuing the project of Health Awareness in villages
adjoining Pune City. During the current fiscal 15 Health awareness sessions
were conducted benefiting 706 women and 300 adolescent girls. Three health
camps were organized benefiting 443 women and adolescent girls. For
creating nutritional security, 120 kitchen gardens have been established.

Biomedical Waste Disposal:

Biomedical waste, another solid waste management issue, has been identified
as the key areas of intervention by Praj Foundation (PF). It is important
to treat biomedical waste safely. In the city of Pune itself, 1.2 tons/day
of biomedical waste gets generated. While the treatment is being carried
out scientifically, transportation of this waste requires a specially
designed vehicle. PF donated a Biomedical Waste Disposal Van to Pune
Municipal Corporation to enable safe transportation of Biomedical Waste.
The van is regularly being used to transport the waste to the incinerator
plant.

Annexure - 4

Disclosures pursuant to the provisions of SEBI (ESOS and ESPS) Guidelines,
1999

Sr. Particulars ESOP 2005 Grant I ESOP 2005 Grant II
No. 12th October, 2005 28th December, 2006

1. Details of meeting Annual General Meeting held on 23rd July,
2005.

2. Options Granted 2,759,139 2,311,500
(including impact
of bonus)

3. Pricing Formula At fair market value At fair market value

4. Options vested 2,759,139 1,655,812

5. Options exercised 2,440,486 79,107

6. The total number of 2,440,486 79,107
shares arising as a
result of exercise of
options.

7. Options lapsed/ 264,751 372,034
cancelled

8. Variation of terms Nil Nil
of options

9. Money realised by Rs.609.58 lacs Rs.0.65 lacs
exercise of options

10. Total number of 53,902 1,860,359
options in force

11. Details of options
granted to Senior
Managerial Personnel:

V.A. Datar 60,000 Nil
Berjis Desai 90,000 Nil
S.S. Iyer 120,000 Nil
Ajit Lele 25,000 Nil
R.V. Chaudhari 30,000 Nil
Arun Tengshe 18,000 8,100
Anil Deshpande 18,000 8,100
Balu Sarma Nil Nil

12. Any other employee/
Non-Executive Director
who receives a grant in
any one year of option
amounting to 5% or more
of option granted during
that year:


Berjis Desai 90,000 Nil
S.S. Iyer 120,000 Nil

13. Identified employee N.A. N.A.
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.


Sr. Particulars ESOP 2005 Grant III 9th July, 2009
No.

1. Details of meeting Annual General Meeting held on 23rd July,
2005.

2. Options Granted 3,029,626
(including impact
of bonus)

3. Pricing Formula At fair market value

4. Options vested Nil

5. Options exercised Nil

6. The total number of Nil
shares arising as a
result of exercise of
options.

7. Options lapsed/ 180,750
cancelled

8. Variation of terms Nil
of options

9. Money realised by Nil
exercise of options

10. Total number of 2,848,876
options in force

11. Details of options
granted to Senior
Managerial Personnel:

V.A. Datar Nil
Berjis Desai Nil
S.S. Iyer Nil
Ajit Lele Nil
R.V. Chaudhari Nil
Arun Tengshe Nil
Anil Deshpande Nil
Balu Sarma 15,000

12. Any other employee/
Non-Executive Director
who receives a grant in
any one year of option
amounting to 5% or more
of option granted during
that year:

Berjis Desai Nil
S.S. Iyer Nil

13. Identified employee N.A.
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.

14. Proforma adjusted net
income and earning per
share:

Particulars Rs.

Net income as reported 1138.847
(in millions)

Add: Intrinsic Value Nil
Compensation Cost

Less: Fair Value 54.502
Compensation Cost
(in millions)

Adjusted Proforma Net 1084.345
Income (in millions)

Basic Earning Per Share -

As Reported 6.18

Adjusted Proforma 5.89

Diluted Earning Per Share -

As Reported 6.16

Adjusted Proforma 5.87

15. Assumptions used to estimate the Fair Value of Options using Black-
Scholes option pricing model:

Particulars Date of Grants
12th October, 28th December, 9th July, 2009
2005 2006

1. Risk-free 6.23%-6.54% 7.53%-7.68% 4.09%-5.40%
interest rate

2. Expected Life 2-3 years 2-3 years 2-3 years

3. Expected 60.31% 61.47% 83.45%
Volatility

4. Expected 5.56% 4.07% 0.93%
Dividend
Yield

5. Price of the Rs.93.30 Rs.185.86 Rs.81.75
underlying share
in market at the
time of Options
grants

16.(i) Weighted-
average exercise
price of options
granted:

Sr. Particulars Rs.
No.

1. Exercise price 85.72
equals market price

2. Exercise price is NA
greater than market
price

3. Exercise price is NA
less than market
price

(ii) Weighted-average fair value of options granted during the year:

Sr. Particulars Rs.
No.

1. Exercise price 39.77
equals market price

2. Exercise price is NA
greater than market
price

3. Exercise price is NA
less than market

price