GAMMON INDIA LIMITED

Franco Tosi Meccanica S.p.A.
The book value of the cost of development is examined every year for the purpose of the recognition
of potential losses in value, when the activity is not yet available for use, or more frequently in case
there are signals of a possible loss in value within the year.
- Concessions, licenses and trademarks
Concessions, licenses, and trademarks are recognized at cost, net of accumulated amortization and
impairment. Amortization is charged over the length of the contract or the asset’s estimated useful life,
whichever is shorter.
The license purchased during the year 2007 has indefinite life. That’s the reason why it is not subject
to amortisation, but to impairment test.
- Other intangible assets
Other intangible assets refer to the implementation cost of SAP operative system, recognized in
accordance with the expenses borne for the purchase and the start-up, of accumulated amortization and
impairment. Said costs are amortized according to their useful life.
Tangible assets
Tangible assets are measured at purchase or production cost that is to say at their fair value (with
reference to some categories of tangible assets) intended along the same lines as quantifying criteria in
substitution of the purchase price, including directly attributable expenses for the asset’s purchase and
placement in service, net of accumulated depreciation and impairment.
Depreciation starts when the asset is available for use, or when it is potentially able to provide the
economic benefits with which it is associated.
Depreciation is calculated using the starting-line method at rates deemed to represent the asset’s useful
life.
Lands, either to be developed or closed to buildings, having indefinite useful life shall not be
depreciated.
Financial charges on purchasing are posted to income statement unless they are directly attributable to
the purchase, construction, or production cost of a qualifying asset, in which case they are capitalized.
Business assets purchased through financial lease contracts are recognized as tangible assets and are
offset against financial payables; the leasing fee is split into two components with financial charges
recognized in the income statement and repayment of principal entered as a reduction of the financial
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