AD Engineering participates in safety surveys. We take site safety very seriously, and our accident frequency and severity rates for the ten year and one year periods are well below the average for contractors of the same size doing similar work. A safety director is on staff supervising a comprehensive, management-supported safety program. We are committed to an ongoing, ambitious safety program, involving job meetings, staff inspections, and educational programs for supervisory personnel and strict adherence to government standards.
We have also initiated a safety program designed to educate employees of work site hazards, how to plan activities with the least amount of risk, and how to demand the same of all our subcontractors.
The job site Project Manager has the responsibility and training to implement the program on the job site. Manager resolves any avoidance claim and work on the owner’s behalf for a satisfactory resolution.
OTHER BUSINESS INTEGRATION
Because of the growing demand on industrial commodities which are not available locally, we ventured to integrate our business in the supply of essential industrial components, parts and equipment to cater the mining industries in the country. We established our own resourceful procuring arm in the Philippines, Spain, Italy, Taiwan and Singapore to hasten procurement every time the need arises, typical of which are the sourcing of which are the sourcing of equivalents and substitute between the American and British Standards. We are a partner and product distributor of GLADSTONE COMMERCIAL (Philippines), MIX TELEMATICS (Masters Systems PNG), SEA (ITALY) Gate Automation Products and GEONICA SA (Spain) Earth Sciences Equipment here in the Pacific Region.
ACCOUNTING ASPECTS OF THE BUSINESS
To obtain reasonable assurance to prospective customers, we are manifesting some important accounting practices vital for the betterment and continuous success of the business.
SUMMARY OF THE COMPANY’S SIGNIFICANT ACCOUNTING POLICIES
Revenue and Cost Recognition
Revenues from construction contracts are recognized using the percentage of completion method of accounting measured principally on the basis of the estimated completion of the physical proportion of the contract work. Contracts to be manage, supervise or coordinate the construction activities of others are recognized only to the extent of the contracted fee. Revenues from management services rendered are recognized when the services are performed and billed.
Contract costs principally include direct labor, cost of materials, overhead and subcontracted costs related to contract performance. Expected losses on contracts are recognized immediately when it is probable that the contract cost will exceed the total contract revenues. The amount of such loss is determined irrespective of whether or not work has commenced on the contract; the stage of completion of contract activity; or the amount of profits expected to arise on other contracts which are not treated as a single construction contract. Changes in contract performance, contract margins are recognized in the year in which the changes are determined. Profit incentives are recognized as revenues when their realization is reasonably assured.