GAMMON INDIA LIMITED

foreign exchange loss of Rs. 11.20 Millions is not adjusted in Fixed Assets and is debited to Profit &
Loss Account due to which the profit before tax of the year is lower by Rs. 11.20 Millions.
16. Cochin Bridge Infrastructure Company Limited (CBICL) depreciates its BOT project assets being the
Bridge over the concession period in its books. However, the depreciation as per the Income Tax Act
does not fully cover the costs over the concession period. The difference in the charge of depreciation
is a permanent difference and hence not recognized in calculation of the deferred tax liability/ asset.
17. Up to the year 2006-07 the Company was following the policy of amortising the goodwill on
consolidation over a period of 5 years. Accordingly in the accounts drawn up to September 30, 2007,
the Company has amortised the goodwill for 6 months. On review of its policy of amortising the
goodwill, extant accounting standards and generally accepted accounting principles followed, the
Company has decided to adopt the policy of not amortising the goodwill but testing the same for
impairment on the said balance sheet date. On account of the change in the method of amortising
goodwill, the goodwill amortisation for the year ended March 31, 2008 of Rs 137.10 Millions has not
been carried out. The management has reviewed any possible impairment and has concluded that there
is no impairment in the goodwill on acquisition of shares. On account of this change the consolidated
profit before tax for the year 2007-08 is higher by Rs 137.10 Millions.
18. During the year 2007-08, the Gammon Infrastructure Projects Ltd. (GIPL) made an Initial Public Offer
(„IPO‟) of 16,550,000 equity shares of Rs 10/- each at a premium of Rs 157 per share. The equity
shares pursuant to the offer were allotted on March 27, 2008.
19. Significant Accounting Policies followed by the Company are attached with the Standalone Financial
Statements. Due to inherent diversities in the legal and regulatory environment governing accounting
principles, the accounting policies would be better understood when referred from the individual
Financial Statements. However, the following are instances of diverse accounting policies followed by
the subsidiaries, which may materially vary with these Consolidated Financial Statements.
a) In respect of new acquisitions in 2008-09, inventory of certain overseas JV‟s and Subsidiaries are
valued at weighted average method as against FIFO method followed by the company and the
other subsidiaries. The inventory of the JV‟s and Subsidiaries constitutes 13.38 % of the total
inventory.
b) In case of SAE the Work-in-progress has been recorded on the basis of the criterion of the
completion or the status of progress; the revenues and the job margin are recognized according to
the progress of the productive activity as against the method of computing the percentage of work
completed as determined by the expenditure incurred on the job till each review date to total
expenditure of the job.
c) In the year 2008-09 in the absence of disclosures made in the accounts of one of the joint venture
regarding effect of acquisition and disposal of subsidiaries, no such disclosure is possible to be
made in the consolidated accounts.
d) Disclosures relating to the employee benefits for the overseas components have not been given in
the absence of data in the required format.
20. Disclosure under AS -29 Year 2008-09
Account Head Opening
Balance
Provision for Risk and
Contingencies
21. Earning Per Share (EPS) :
Provisions
made during
the year
Paid /
Utilized
during the
year
(Rs. In Millions)
Closing
Balance
1532.50 1040.60 358.00 2215.20
Earnings Per Share (EPS) = Net Profit attributable to shareholders / Weighted Number of
Shares Outstanding
F
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