GAMMON INDIA LIMITED

Franco Tosi Meccanica S.p.A.
Government grants for current expenses
Government grants shall be recognized when it is likely that they will be received for sure and that all
the conditions thereof are met.
Cash and Cash equivalents
Cash and cash equivalent are recognized at their nominal value.
Provisions for future risks and expenses
Provisions of future risks and expenses include funds derived from present obligations (legal or
constructive) as a result of a past event, the settlement of which will likely involve an outflow in an
amount that can be reliably estimated.
Financial assets and liabilities
Financial assets and liabilities are initially recognized at fair value, net of the transaction costs which
are directly attributable to the issue of the financial liability.
Afterwards, financial assets and liabilities are measured at their initial cost, net of the capital
reimbursement already executed, rectified (increasing or reducing) based on the amortization (making
use of the effective interest rate method) of potential differences between the initial value and the
value at maturity.
NET EQUITY
Equity transactions costs
Costs directly attributable to capital transactions are treated as a direct reduction in net equity.
REVENUE RECOGNITION
Revenues are recognized at the fair value of the payment received or expected.
The following specific criteria for revenue recognition shall be fulfilled before charging them in the
income statement.
Sale of assets
Revenues are recognized once the company has transferred to the purchaser all the significant risks
and benefits related to the asset ownership.
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