GAMMON INDIA LIMITED

a) On Construction Contracts:
Long-term contracts including Joint Ventures Projects are progressively evaluated at the end of
each accounting period. On contracts under execution which have reasonably progressed, profit is
recognised by evaluation of the percentage of work completed at the end of the accounting period,
whereas, foreseeable losses are fully provided for, in the respective accounting period. The
percentage of work completed is determined by the expenditure incurred on the job till each review
date to total expenditure of the job.
Additional claims (including for escalation), which in the opinion of the Management are
recoverable on the contract, are recognised at the time of evaluating the job.
b) On supply of materials, revenue is recognized upon the delivery of goods to the client in
accordance with the terms of contract. Sales include excise duty & other receivable from the
customers but exclude VAT, wherever applicable.
c) Revenues from providing services are recognized in income statement at the moment said services
are completed.
d) Insurance claims are accounted for on cash basis.
e) On Infrastructure Development Business:
(i) Annuity and Toll Receipts:
The toll collection from the users is accounted when the amount is due and recovered.
The Company earns an annuity income from some of its Build, Own, Transfer („BOT‟) projects
which is recognised on a time basis over the period during which the annuity is earned.
Revenues from bonus and other claims are recognised upon acceptance from
customer/counterparty.
(ii) Berth Operations:
Revenue by way of Berth Hire Charges, Dust Suppression Charges, Cargo Handling Charges,
Plot Rent, Wharf Age, Barge Freight, Other Charges etc. are recognized on an accrual basis and
is billed as per the terms of the contract with the customers at the rates approved by Tariff
Authority for Marine Ports (TAMP) as the related services are performed.
Other income is recognized on an accrual basis when the same is due.
f) Cargo freight income is recognized at the time of booking of the consignment and is being
accounted net of rebates, discounts and booking commission.
g) Revenue for design and assemblies are recognized on the basis of work progress reports provided
for each contract.
h) Revenue from the sale of goods and finished products are recognized at the time of transfer to the
customer of the risks and benefits relating to the product sold, normally coinciding with the
shipment of goods to the customers and acceptance by the same; revenue from services are
recognized in the accounting period where the services are rendered.
4. Turnover
Turnover represents work certified as determined by taking into consideration the actual cost incurred
and profit evaluated by adopting the percentage of the work completion method of accounting and once
the company has transferred to the purchaser all the significant risks and benefits related to the asset
ownership.Turnover also includes the revenue from the supply of material in the equipment supply
contracts in accordance with the terms of contract.
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