Annual Report 2010-2011 - Gammon India

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April 10 – March 11 April 09 – March 10 ` in Crores ` in Crores ` in Crores ` in Crores SCHEDULE 14A SUNDRY EXPENSES INCLUDED UNDER EXPENDITURE OF CONTRACT Plant Repairs 28.92 34.39 Rent, Rates & Taxes 30.74 17.08 Staff Welfare 25.75 19.16 Travelling Expenses 45.67 39.21 Guarantee Bond Commission and Bank Charges 17.10 17.40 Other Site Expenses * 109.97 98.56 * None of the individual items included in Other Site Expenses exceeds one percent of the total turnover. 258.15 225.80 SCHEDULE 15 ESTABLISHMENT EXPENSES: Electricity Charges 2.61 1.84 Rent 20.02 17.17 Salaries incl. Provision for Commission and Bonus 194.98 158.92 Contribution to Employees Provident Fund, ESIS & Other Funds 42.47 43.79 Contribution to Gratuity Fund 4.57 1.91 Staff welfare expenses 10.87 12.38 Insurance 13.39 13.54 Rates and Taxes 20.16 5.65 Communication Expenses 12.05 11.97 Travelling, Leave Passage and Motor Car Expenses 22.70 15.05 Professional Fees 83.46 89.75 Advertisement and publicity expenses 28.05 17.22 Miscellaneous Expenses 35.10 47.01 Repairs & Maintenance Auditors Remuneration: 14.41 10.15 – Audit Fees including Tax Audit Fees & Consolidation 0.68 0.51 – Limited Review 0.09 0.07 – Certification 0.01 0.07 – Other Services 0.06 0.05 – Reimbursement of Out of Pocket Expenses – 0.84 0.01 0.71 Branch Auditors' Fees 0.45 0.20 Directors Sitting Fees 3.19 5.56 Management Remuneration 9.51 6.32 Write off against Leasehold Land 0.03 0.01 Bad Debts/Interest written off 16.94 11.49 Provision for doubtful debts (Net) 4.32 4.73 Donation 0.60 0.52 Exchange Loss 7.76 50.51 Loss on Sale of Assets 0.13 0.34 Preliminary/Deferred Revenue Expenses 0.97 1.18 Expenses Transferred to Capital WIP (1.89) – Employee Compensation Expense – ESOS 1.32 3.00 549.00 530.92 SCHEDULE 16 FINANCIAL COST INTEREST PAID ON: On Fixed Period Loans 346.95 173.79 Other Loans 108.53 169.10 Provision for Marked to Market Loss (2.36) (3.23) Other Finance Charges 68.74 78.58 Less: INTEREST EARNED ON 521.86 418.24 Fixed Deposits with Banks 2.83 3.71 Others (Refer Note B-14) 445.48 27.65 448.31 31.36 Less: Amount Transferred to Capital WIP 26.45 – 47.10 386.88 A NNUAL R EPORT I 2010/11 123
SCHEDULE 17 : SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A. ACCOUNTING POLICIES: 1. Principles of consolidation The Consolidated Financial Statements comprise the financial statements of GAMMON INDIA LIMITeD (“the Company”) and its Subsidiary companies (the Company and its subsidiaries are hereinafter referred to as ‘the Group’), Associates and Joint Ventures (JV’s) in the form of jointly controlled entities. The Consolidated Financial Statement has been prepared on the following basis: 124 (a) Interests in Subsidiaries • The Financial Statements of the Company and its subsidiary companies have been combined on a line by line basis by adding the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses as per Accounting Standard-21 “Consolidated Financial Statements” issued by Institute of Chartered Accountants of India (‘AS-21’). • The Consolidated Financial Statements have been prepared using uniform policies for like transactions and other events in similar circumstances and are presented to the extent possible in the same manner as the Company’s separate financial statements. • The excess of cost of investments of the Company over its share of equity in the Subsidiary is recognised as goodwill. The excess of share of equity of Subsidiary over the cost of investments is recognised as capital reserve. • The revenue related to construction services in respect of the BOT contracts, which are governed by Service Concession Agreements with government authorities (grantor), is considered as exchanged with the grantor against toll collection rights/annuities receivable, profit from such contracts is considered as realized. Accordingly, BOT contracts awarded where work is subcontracted within the group, the inter group transactions on BOT contracts and the profits arising thereon are taken as realised and not eliminated. (b) Interests in Joint Ventures The Company’s interests in Joint Ventures in the nature of jointly controlled entities are included in these Consolidated Financial Statements using the Proportionate Consolidation Method as per the Accounting Standard–27 “Financial Reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India (‘AS-27’). The group combines its share of each of the assets, liabilities, income and expenses of the joint venture with similar items, on a line by line basis. (c) Investment in Associates Investments in Associate Companies are accounted under the equity method as per the Accounting Standard–23 “Accounting for Investments in Associates in Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India (‘AS -23’). Under the Equity Method, the investment in associates is carried in the balance sheet at cost plus post acquisition changes in the Group’s share of net assets of the associate. The income statement reflects the Group’s share of the results of operations of the associates. The excess of the Company’s cost of investment over its share of net assets in the associate on the date of acquisition of investment is accounted for as goodwill. The excess of the Company’s share of net assets in the associate over the cost of its investment is accounted for as capital reserve. Goodwill/Capital Reserve is included/adjusted in the carrying amount of the investment. 2. Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known. 3. Revenue Recognition (a) On Construction Contracts: Long-term contracts including Joint Ventures are progressively evaluated at the end of each accounting period. On contracts under execution which have reasonably progressed, profit is recognised by evaluation of the percentage of work completed at the end of the accounting period, whereas, foreseeable losses are fully provided for in the respective accounting period. The percentage of work completed is determined by the expenditure incurred on the job till each review date to total expected expenditure of the job. Additional claims (including for escalation), which in the opinion of the management are recoverable on the contract, are recognised at the time of evaluating the job. (b) In case of certain high end boilers the milestones method is used for the measurement of the stage of completion, so as to ensure greater compliance of the valuation in the financial statements with respect to the effective stage of completion of the activities. (c) On supply of materials related to the transmission towers, revenue is recognized upon the delivery of goods to the client in accordance with the terms of contract. Sales include excise duty & other receivable from the customers but exclude VAT, wherever applicable. (d) Revenue from providing services are recognized in income statement at the moment said services are completed. As for works in progress, they are measured based on the status of completion of work. Whenever the results of the agreement cannot be reliably evaluated, revenues are recognized only to the extent that costs are deemed to be recoverable. (e) Insurance claims are accounted for on cash basis. (f) On Infrastructure Development Business: (i) Annuity and Toll Receipts: The toll fees collection from the users is accounted when the amount is due and recovered. A NNUAL R EPORT I 2010/11
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Contents A NNUAL R EPORT I 2010/11
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Gammon House the second largest con
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4 Board of Directors Mr. Peter Gamm
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6 A NNUAL R EPORT I 2010/11 Beas Br
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8 Sohar Jetty, Oman A NNUAL R EPORT
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10 Region-wise Projects as on 31st
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12 Financial Highlights of the deca
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14 A NNUAL R EPORT I 2010/11 Off-Sh
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6000 5000 4000 3000 2000 1000 0 16
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18 Key Projects Chennai Metro Proje
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20 Public Private Partnership Proje
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Pebble Bay at Dollars Colony, Benga
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Your Directors have pleasure in pre
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Option Scheme-2007 of erstwhile ATS
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Considering the continuous scarcity
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Statement showing details of Option
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Name and Designation of Director Mr
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(a) AUDIT COMMITTEE : The Audit Com
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Name, Designation and Address of Co
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(iii) Approval of the Members sough
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6. MEANS OF COMMUNICATION : (a) Fin
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STOCK PERFORMANCE IN COMPARISION TO
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18. Widening & strenghtening of exi
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CEO/CFO CERTIFICATION To The Board
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after USA and China. Indian road ne
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(a) Thermal power: In the present s
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• Growing urbanization has also r
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The Company sees immense opportunit
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The operative margin for financial
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4. Your Company has entered into Jo
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4. Patna Highway Projects Limited (
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VI. NON-FINANCIAL ORGANISATIONAL IN
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A uditors' report to the M e M bers
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A nnexure to the A uditors' report
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Name of the Statute State Nature of
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PROFIT AND LOSS ACCOUNT FOR THE YEA
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SCHEDULES FORMING PART OF BALANCE S
Page 76 and 77: SCHEDULE 5 FIXED ASSETS (` in Crore
Page 78 and 79: Face Value Nos. as on Nos. as on 31
Page 80 and 81: As at 31 st March, 2011 As at 31 st
Page 82 and 83: 2010-2011 2009-2010 ` in Crores ` i
Page 84 and 85: (c) Depreciation on revalued compon
Page 86 and 87: 9.95% - Redeemable Non-Convertible
Page 88 and 89: (b) Sundry Debtors include the foll
Page 90 and 91: 13. In respect of the road projects
Page 92 and 93: 20. Additional information pursuant
Page 94 and 95: 23. The Company is engaged mainly i
Page 96 and 97: 33. The balance with The Freyssinet
Page 98 and 99: (d) Transactions of Oman Branch and
Page 100 and 101: SCHEDULE - 1 Related Party Disclosu
Page 102 and 103: Nature of Transactions/Relationship
Page 104 and 105: Nature of Transactions/Relationship
Page 106 and 107: BALANCE SHEET ABSTRACT OF COMPANY
Page 108 and 109: Metropolitan Infrahousing Private L
Page 110 and 111: Patliputra Highway Limited * Patna
Page 112 and 113: Gammon Holdings B.V. Gammon Interna
Page 114 and 115: Sr. No. Particulars No. of shares/
Page 116 and 117: existing at the date of preparation
Page 118 and 119: CONSOLIDATED PROFIT AND LOSS ACCOUN
Page 120 and 121: C. CASH FLOW FROM FINANCING ACTIVIT
Page 122 and 123: SCHEDULE 4 FIXED ASSETS (` in Crore
Page 124 and 125: As at 31 st March, 2011 As at 31 st
Page 128 and 129: The cash compensation on account of
Page 130 and 131: 10. Investments Investments are cla
Page 132 and 133: When the hedge concerns the fair va
Page 134 and 135: Name of Subsidiaries Country of Inc
Page 136 and 137: (b) In Case of Sofinter the financi
Page 138 and 139: The particulars of Investment in As
Page 140 and 141: K. SOFINTER: The loan envisages the
Page 142 and 143: 12. Retention Bonus for employees:
Page 144 and 145: (b) In respect of the road projects
Page 146 and 147: (b) In respect of currency swap der
Page 148 and 149: VSPL, a subsidiary of the Company,
Page 150 and 151: Annexure I Related party Disclosure
Page 152: vakils
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Annual Report 2010-2011 - Gammon India

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