Annual Report 2010-2011 - Gammon India

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The fair value of the option however has been computed under the Black Scholes method considering the data of the Company as on
the date of grant of option for the purpose of disclosure as required under Guidance note on Employee share based payments detailed
hereunder.
Options granted on 27 th March, 2007:
Vesting Date No. of Options Exercise Period Intrinsic value on the
date of grant of options
A NNUAL R EPORT I 2010/11
Fair value of options
as on date of grant of options
(`) (`)
(1) (2) (3) (4) (5)
28th September, 2008 21,260 28.9.2008 to 27.9.2011 250.00 677.65
28th September, 2009 26,575 28.9.2009 to 27.9.2012 250.00 677.65
28th March, 2010 26,575 28.3.2010 to 27.3.2013 250.00 677.65
28th March, 2011 31,890
106,300
28.3.2011 to 27.3.2014 250.00 677.65
Had the compensation cost been accounted under the Fair value method, the Company’s net profit would have changed as follows:
(` in Crores)
Particulars Year Ended
31 st March, 2011
Year Ended
31 st March, 2010
Net Income as reported 118.45 125.72
Add : ESOP’s compensation cost as accounted on Intrinsic value method 0.20 0.55
Less : ESOP’s compensation cost as accounted on fair value method 1.91 1.59
Net Profit Adjusted 116.74 124.68
Basic earnings per share – as reported 9.16 10.72
Basic earning per share – Adjusted 9.02 10.63
Diluted earning per share – as reported 9.10 10.26
Diluted earning per share – Adjusted 8.97 10.17
The fair value of options accounted pursuant to the scheme of amalgamation was determined as at the date of grant of the options using the
Black Scholes Option Pricing Model with the following assumptions:
a. Risk free interest rate 7.50%
b. Expected Dividend Yield 0.39%
c. Expected life of the option 3 years
d. Expected Volatility of Share Price 52.64%
The status of Employees stock options is as under:
Particulars 2010-2011 2009-2010
Option Shares Outstanding at the beginning of the year 78,035 102,480
Options exercised during the year 25,242 14,261
Option Shares granted during the year — —
Option Shares lapsed during the year 6,560 10,184
Option Shares Outstanding at the end of the year 46,233 78,035
During the year 25,242 (P.Y. 14,261) options were exercised by the employees against which 50,484 equity shares (P.Y. 28,522) were allotted
and 6,560 (P.Y. 10,184) options were lapsed during the year on account of cessation of employment. None of the 46,233 (P.Y. 78,035) options
outstanding have been forfeited during the year.
19. Consumption of Raw Materials:
(` in Crores)
Particulars 2010-11 2009-10
Amount % Amount %
Imported 5.51 1.28 1.08 0.27
Indigenous 425.21 98.72 399.95 99.73
TOTAL 430.72 100.00 401.03 100.00