GAMMON INDIA LIMITED

Franco Tosi Meccanica S.p.A.
payable. According to the IAS 17 provisions, depreciation on the assets is measured based on their
useful life.
Participations in controlled companies
Participations in other companies are measured at their adjusted cost so as to take into account
possible impairments as a result of appropriate assessment tests. Should the grounds for depreciation
be missing in the following financial years, the original cost is re-established.
Employee benefits obligations
Post-employment benefits, from the “defined benefit plans” (employee severance indemnities), shall
be subject to actuarial assessment in order to express the present value of benefits that are due at the
end of employment or later, but that have been accrued by employees as of the reporting date.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are calculated based on the temporary differences between the
carrying amount of assets and liabilities and their tax base.
Deferred taxes are not discounted and are classified as non-current assets/liabilities.
Deferred tax assets are recognized only if it is probable that taxable profit will be available against
which the deductible temporary difference can be used.
As for receivables, payables, provisions for risk and charges and financial assets and liabilities
classified as non-current, the accounting policies and standards are the same as those described below
for such items classified as current assets and liabilities.
CURRENT ASSETS AND LIABILITIES
Inventories
Inventories consist of raw materials, both ancillary and consumable materials, and of down payments.
Ancillary raw material and consumable materials are recognized at the lower cost and estimated
realizable value at the date of the financial year closing.
The cost for any single homogeneous category of assets is recognized by means of the weighted
average cost of capital method.
Work orders
A work order consists of an agreement, which is specifically entered into for the construction of an
asset.
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