GAMMON INDIA LIMITED

applicable to such transactions. The notional marked to market losses is expected to be offset by
the higher realizations from the foreign currency receivables as the project progress. Therefore
the company has not provided marked to market losses on such forward contracts amounting to
Rs. 159.30 Millions as at 31 st March 2009.
e. The breakup of the outstanding derivative position of the overseas subsidiaries is tabulated
hereunder.
(Rs. in Millions)
As at 31 st Dec, 2008
Particulars Assets Liabilities
Derivatives on exchange rates 43.50 22.10
Derivatives on interest rates - 13.90
Total non-current derivatives 43.50 36.00
f. In line with notification of the Companies (Accounting Standards) Amendment Rules 2009
issued by Ministry of Corporate Affairs on March 31, 2009 amending Accounting Standard - 11
(AS - 11) “The Effects of Changes in Foreign Exchange Rates (revised 2003)”, some of the
overseas subsidiaries who have prepared the accounts as per Indian GAAP for the purposes of
consolidation have chosen to exercise the option under para 46 inserted in the standard by the
notification. Accordingly, exchange differences on all long term monetary items, with
retrospective effect from April 01, 2007, are:
i. To the extent such items are used for the acquisition of a depreciable capital asset are added
to / deducted from the cost of the asset and depreciated over the balance life of the asset.
ii. In other cases accumulated in the “Foreign Currency Monetary Item Translation Difference
Account” and amortized to the profit and loss account over the balance life of the long term
monetary item but not beyond March 31, 2011.
26. ESOPS –
As a result of point (a) and (b) above, amortization cost charged to the profit and loss account
during the year 2008-09 was Rs. 312.30 Millions & Rs. 624.70 Millions has been accumulated
in the “Foreign Currency Monetary Item Translation Difference Account”, being the amount
remaining to be amortized as at March 31, 2009. On account of exercise of this option, the profit
after tax for 2008-09 is higher by Rs. 624.70 Millions which would have resulted in the profit
after tax being a loss of Rs. 61.50 Millions.
GIL
Pursuant to the amalgamation of ATSL with the Company, the outstanding options of the employees of
the erstwhile ATSL outstanding as on 1 st April 2008 have been taken up as an obligation by the
Company in accordance with the Scheme approved by the court. Accordingly the company has
accounted for the grant of 1,06,300 options to such employees at an exercise prize of Rs. 80 per share.
The company will issue two equity shares against each option in terms of the scheme of amalgamation
approved by the Courts.
The options vest in a graded manner over the period of four years and are exercisable during a period
of three years from the date of vesting thereof.
Since the assets and liabilities of the erstwhile ATSL have been accounted at the book value, the
accounting effects in the accounts are continued at the same value.
GIPL
GIPL has instituted an ESOP Scheme during the year 2007-08, approved by the shareholders vide their
resolution dated May 4, 2007, as per which the Board of Directors of the Company granted 1,640,000
stock options to its employees pursuant to the ESOP Scheme on July 1, 2007 and October 1, 2007.
Each options entitles an employee to subscribe to 1 equity share of the Company at an exercise price of
Rs 80 per share. Out of the options granted, 75,000 options were forfeited during the year 2007-08.
During the year 2008-09, the Compensation Committee of the Board of the Directors of the Subsidiary
Company GIPL at its meeting held on October 1, 2008, has further granted 1,410,000 options to
eligible employees of the Company at the market price of Rs 63.95 per equity share, prevailing on
September 30, 2008 upon expiry of the respective vesting period which ranges from one to three years.
F
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