GAMMON INDIA LIMITED

Employee Retirement Benefits
Retirement benefits in the form of a defined contribution scheme and contributions are charged to the Profit
and Loss Account for the year/period when the contributions are due.
Other retirement benefits being in the nature of a defined benefit obligation is provided on the basis of an
actuarial valuation made at the end of each year/period on projected Unit Credit Method.
Actuarial gains/losses are immediately taken to the Profit and Loss Account and are not deferred.
In case of certain subsidiaries and a joint venture the entitlement of employee’s retirement benefit is based
upon the employee’s final salary and length of service, subject to the completion of a minimum service
period based on the laws of the respective country. The expected costs of these benefits are accrued over the
period of employment. The terminal benefits are paid to employees’ on their termination or leaving
employment. Accordingly, our Company does not expect settlement against terminal benefit obligation in
the near future.
Fixed Assets
Fixed Assets are valued and stated at cost of acquisition less accumulated depreciation thereon. Revalued
assets are stated at the revalued amount. Cost comprises the purchase price and any attributable cost of
bringing the asset to its working condition of its intended use. Borrowing costs relating to acquisition of
fixed assets which take a substantial period of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to be put to use.
Depreciation and Amortization
Indian Operations
Depreciation for the accounting period is provided on:
(a) Straight Line Method, for assets purchased after April 2, 1987, at the rates and in the manner specified
in Schedule XIV to the Companies Act, 1956.
(b) Written Down Value Method, for assets acquired on or prior to April 2, 1987, at the rates as specified
in Schedule XIV to the Companies Act, 1956.
(c) Depreciation on revalued component of the assets is withdrawn from the Revaluation Reserve.
(d) The depreciation on assets used for construction has been treated as period cost.
(e) The Infrastructure Projects Assets are amortized over a period of the rights given under the various
Concession Agreements to which they relate.
(f) Expenses incurred by our Company on periodic maintenance are capitalized on the completion of said
activity. These costs are amortized over the period up to which the next periodic maintenance is due.
The periodic maintenance of 5 th and 10 th year is amortized over a period of 5 years from completion of
the activity. The periodic maintenance of 15 th year is written off over the balance concession period of
1 year.
Overseas Operations
Depreciation is charged on a straight line basis over the useful life of the assets or as prescribed as per the
relevant local laws of such country. Where the asset being depreciated is made up of distinctly identifiable
elements, whose useful life significantly differs from that of the other parts the deprecation is provided
separately in accordance with the component approach. The estimated useful lives of the assets for
calculating depreciation are as follows:-
Intangible Assets
ASSET From To
Building............................... 20 Years 40 Years
Plant & Machinery .............. 3 Years 20 Years
Computer............................. 3 Years 7 Years
Furniture & Fixtures............ 3 Years 10 Years
Office Equipment ................ 3 Years 15 Years
Motor Vehicles ................... 3 Years 8 Years
Temporary Site Office......... 2 Years 8 Years
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