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Anara Fertilisers limited has issued 2000 Share options to its 10 directors for an exercise price of INR 100. The directors are required to stay with the company for next 3 years. Fair value of the option estimated 130 Expected Directors to vest the option 8 During the year 2, there was a crisis in the company and Management decided to cancel the such scheme immediately, it was estimated further as below- Fair value of option at the time of cancellation was 90 Market price of the share at the cancellation date was 99 There was a compensation which was paid to directors and since only 9 directors were currently in employment. During the date of cancellation of such scheme hence amount of 95 per option has been given to each of 9 directors. How the cancellation would be recorded? Reliance limited hired a maintenance company for its oil fields. The services will be settled by issuing 1,000 shares of Reliance. Period for which the service is to be provided is 1 April 20x1 to de 31 Reliance limited hired a maintenance company for its oil fields. The services will be settled by issuing 1,000 shares of Reliance. Period for which the service is to be provided is 1 April 20x1 to de 31 July 20X1 and fair value of the service was estimated using market value of similar contracts for INR 1,00,000. Nominal value per share is INR 10. 20 Record the transactions? Fair value of services 1,00,000 4 No. of months Monthly expense 25,000 Dr. Repair & Maintenance -31-Apr-20x1 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) Dr. 1-May-20X1 Repair & Maintenance 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) 1 lun 70x1 Renair & Maintenance Dr. 25,000 4 No. of months Monthly expense 25,000 31-Apr-20x1 Repair & Maintenance Dr. 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) 31-May-20X1 Repair & Maintenance Dr. 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) 31-Jun-20x1 Repair & Maintenance Dr. 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) 31-su Dr. 1-Jul-20x1 Repair & Maintenance 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) Share based payment reserve (equity) Dr. 1,00,000 To Equity Shares (1000 x 10) 10,000 To Securities premium (balancing figure) 90,000 The following particulars in respect of stock options granted by a company are available: Grant date April 1, 2006 Number of employees covered 500 Number options granted per employee 100 Fair value of option per share on grant date (Rs.) 25 The vesting period shall be determined as below: if the company earns Rs. 120 crore or above after taxes in 2006-07, the options will vest on 31/03/07. If condition (a) is not satisfied but the company earns Rs. 250 crores or above after taxes in aggregate in 2006-07 and 2007-08, the options will vest on 31/03/08. If conditions (a) and (b) are not satisfied but the company earns Rs. 400 crores or above after taxes in aggregate in 2006-07, 2007-08 and 2008-09, the options will vest on 31/03/09. Position on 31/03/07 (a) The company earned Rs. 115 crore after taxes in 2006-07 (b) The company expects to earn Rs. 140 crores in 2007-08 after taxes (c) Expected vesting date: March 31, 2008 (d) Number of employees expected to be entitled to option = 474 Position on 31/03/08 July 20X1 and fair value of the service was estimated using market value of similar contracts for INR 1,00,000. Nominal value per share is INR 10. 20 Record the transactions? Fair value of services 1,00,000 4 No. of months Monthly expense 25,000 Dr. Repair & Maintenance -31-Apr-20x1 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) Dr. 1-May-20X1 Repair & Maintenance 25,000 To Share based payment reserve (equity) 25,000 (Recognition of Equity settled SBP using fair value of services rendered) 1 lun 70x1 Renair & Maintenance Dr. 25,000 earns Rs. 250 crores or above after taxes in aggregate in 2006-07 and 2007-08, the options will vest on 31/03/08. If conditions (a) and (b) are not satisfied but the company earns Rs. 400 crores or above after taxes in aggregate in 2006-07, 2007-08 and 2008-09, the options will vest on 31/03/09. Position on 31/03/07 (a) The company earned Rs. 115 crore after taxes in 2006-07 (b) The company expects to earn Rs. 140 crores in 2007-08 after taxes (c) Expected vesting date: March 31, 2008 (d) Number of employees expected to be entitled to option = 474 Position on 31/03/08 (a) The company earned Rs. 130 crore after taxes in 2007-08 (b) The company expects to earn Rs. 160 crores in 2008-09 after taxes (c) Expected vesting date: March 31, 2009 (d) Number of employees expected to be entitled to option = 465 Position on 31/03/09 (a) The company earned Rs. 165 crore after taxes in 2008-09 (b) Number of employees on whom the option actually vested = 450 Compute expenses to recognise in each year. The following particulars in respect of stock options granted by a company are available: Grant date April 1,2006 Number of employees covered 525 Number options granted per employee 100 Vesting condition: Continuous employment for 3 years Nominal value per share (Rs.) 100 Exercise price per share (Rs.) 125 Market price per share on grant date (Rs.) 149 Vesting date March 31, 2009 Exercise Date March 31, 2010 Fair value of option per share on grant date (Rs.) 30 Position on 31/03/07 (a) Estimated annual rate of departure 2% (b) Number of employees left = 15 Position on 31/03/08 (a) Estimated annual rate of departure 3% (b) Number of employees left = 10 March 31, 2009 March 31, 2010 30 Exercise Date Fair value of option per share on grant date (Rs.) Position on 31/03/07 (a) Estimated annual rate of departure 2% (b) Number of employees left = 15 Position on 31/03/08 (a) Estimated annual rate of departure 3% (b) Number of employees left = 10 Position on 31/03/09 (a) Number of employees left = 8 (b) Number of employees entitled to exercise option = 492 Position on 31/03/10 (a) Number of employees exercising the option = 480 (b) Number of employees not exercising the option = 12 Compute expenses to recognise in each year by (i) fair value method (ii) intrinsic value method and show important accounts in books of the company by both of the methods