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Gammon Infrastructure Projects Ltd.

BSE: 532959 Sector: Engineering
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OPEN 3.15
VOLUME 242733
52-Week high 5.41
52-Week low 2.66
P/E 17.39
Mkt Cap.(Rs cr) 295
Buy Price 3.13
Buy Qty 446.00
Sell Price 3.14
Sell Qty 1000.00
OPEN 3.15
CLOSE 3.13
VOLUME 242733
52-Week high 5.41
52-Week low 2.66
P/E 17.39
Mkt Cap.(Rs cr) 295
Buy Price 3.13
Buy Qty 446.00
Sell Price 3.14
Sell Qty 1000.00

Gammon Infrastructure Projects Ltd. (GAMMNINFRA) - Director Report

Company director report


The Shareholders of Gammon Infrastructure Projects Limited

Your Directors have pleasure in submitting their fifteenth Annual Report together withthe Audited Accounts of the Company for the eighteen months period from 1st October 2014to 31st March 2016 (‘Period’). The financial year of the Company had beenchanged to align with the provisions of the Companies Act 2013 which prescribe a uniformfinancial year from April to March. The figures for the Period under review for eighteenmonths are therefore not comparable with those of the previous year for nine monthsperiod ended 30th September 2014.


The financial highlights of the Company on stand-alone basis and consolidated basis forthe Period are as under:

As per Consolidated Accounts: Rs.( in Lakhs)
Particulars Period ended March 31 2016 Period ended September 30 2014
(eighteen month period) (nine month period)
Income 137509.79 55168.72
Earnings before interest tax depreciation and amortization 73185.11 31342.68
Financial costs 35804.67 20629.30
Depreciation and amortization 37595.10 16823.75
Tax expenses 2064.61 (2157.15)
Minority interest & share of profit of associates (546.36) 65.70
Net profit / Loss (1693.72) (4025.15)
As per Standalone Accounts: Rs. ( in Lakhs)
Particulars Period ended March 31 2016 Period ended September 30 2014
(eighteen month period) (nine month period)
Income 40847.77 8380.66
Earnings before interest tax depreciation and amortization 7080.26 2333.15
Financial costs 5233.00 5345.15
Depreciation and amortization 331.38 177.15
Exceptional items (4173.74) 3916.16
Tax expenses (125.76) (171.60)
Net profit / Loss 5815.38 (6933.71)


The Board regrets its inability to recommend any dividend for the Period in view of theliquidity constraints.


Your Company had signed a Share Purchase Agreement on 27th August 2015 for divestmentof nine project companies (6 road projects and 3 power projects) to a consortiumcomprising funds managed by Brookfield Asset Management and its affiliates("Brookfield") and Core Infrastructure India Fund Pte Ltd ("CIIF")(collectively the "Consortium") under the name BIF India Holdings Pte Ltd.("BIF").

The total project cost was estimated to be approx. Rs. 6750 crore (` 2935 crore of 6operational projects and Rs. 3815 crore for remaining 3 projects).

The divestment transaction was segregated in two tranches of which the first tranchecomprising six project companies out of the total nine project companies has beensuccessfully completed with BIF India Holdings PTE. Ltd. on 29.02.2016 and divestmentproceed of Rs. 436 crores has been received by your Company. The second tranche of thedivestment transaction is yet to be concluded. Of the six companies which BIF acquiredfive were operational and one was under development.

Post the transaction the consolidated debt of your Company stands reduced from `3947crore to Rs. 2229 crore which is expected to improve the gearing at a consolidated levelfrom more than 4x to around 2x going forward and make your Company net cash surplus.

Brookfield is a leading global alternative asset manager with over $200 billion inassets under management focusing on infrastructure renewable energy private equity andproperty. CIIF is an India focused infrastructure fund managed by the Singapore branch ofKotak Mahindra (UK) Ltd.

Key terms of the divestment transaction were as follows:

The consideration towards equity comprises of cash consideration of approx. Rs. 192crore and a waiver of advances to the Company of Rs. 285 crore;

Repayment of inter corporate deposits of approx. Rs. 371 crore given by your Company tothe divested Project SPVs;

Aggregate cash inflows for your Company on account of divestment would be approx. Rs.563 crore subject to closing adjustments;

Additional cash inflow of upto Rs. 100 crore may be realized by the Company uponcrystallization of certain milestones in future.

Outstanding liabilities to the tune of Rs. 87 crore will stand reduced and 75% of pastcontingent receivable may also be received by the Company when realized.


The Board of Directors of your Company on 27th August 2015 resolved to divest 50%shareholding of Vizag Seaport Private Limited subsidiary of the Company for aconsideration of Rs. 62.50 Crores in favour of Lastin Infrastructure Projects Limitedbeing Affiliate of Lastin Holdings Limited. However the deal is yet to be consummated.


Following the divestment deal for the 5 Operational Projects the Company now has 4active road projects of which one is operational.

The active projects in the Road Sector are:

(a) Toll based projects:

(1) Concession for constructing and operating a four lane bridge across the GodavariRiver together with its approach roads on either side linking Rajahmundry to Kovvur inthe State of Andhra Pradesh. The Company’s subsidiary Rajahmundry Godavari BridgeLtd. is the concessionaire for the project.

(2) Concession for six laning and operating the Vijayawada to Gundugolanu stretch ofNational Highway 5 including a four lane bypass to Vijayawada town in the State ofAndhra Pradesh. The Company’s subsidiary Vijayawada Gundugolanu Road Project Pvt.Ltd. is the concessionaire for the project.

(3) Concession for four laning and operating the Sidhi to Singrauli section of theNational Highway 75E in the State of Madhya Pradesh. The Company’s subsidiary SidhiSingrauli Road Project Ltd. is the concessionaire for the project.

(b) Annuity based projects:

(1) Concession for four laning and operating the Patna to Muzafarpur stretch of theNational Highway 77 including a bypass to the Muzafarpur town in the State of Bihar. TheCompany’s subsidiary Patna Highway Projects Ltd. is the concessionaire for theproject.

Developments in the Road Sector during the Period

Rajahmundry Godavari Bridge Ltd. Provisional Commercial Operation Date (PCOD) has beenachieved on 31 Oct 2015 and tolling operations started w.e.f. 01 Nov 2015.

Sidhi Singrauli Road Project Ltd. has achieved financial closure on September 2012 andupon attaining ‘appointed date’ has started construction activities on September2013. The project has achieved about 52% completion as of 30 June 2016. PCOD is expectedby 31st March 2017 on achieving completion of at least 75% of the total length of theProject Highway.

Patna Highway Projects Ltd. has not been able to complete the entire project stretchdue to non-availability of land but MORTH/ NHAI has now agreed to grant PCOD on completionof one ROB so as to complete the construction of 41 Km out of total length of 63 Km. Thecompany has applied to NHAI for a provisional completion certificate based on the progressof work on the land made available for the project which is under active considerationof NHAI.

The Vijayawada Gundugolanu Road Project Pvt. Ltd. has started tolling operations on theproject stretch with effect from 1st September 2014. Revalidation of the financialclosure is under progress.

Patna Buxar Highways Ltd. the Company’s subsidiary applied to the NationalHighways Authority of India ("NHAI") for mutual termination of the concessionagreement on account of NHAI’s inability to provide right of way over a substantialportion of the project stretch and forest clearance (stage II). However NHAI chose toterminate the concession unilaterally and forfeited the Company’s bid security to theextent of 1% of the total project cost. The Company has invoked Arbitration to recover thelosses suffered by it from NHAI. Arbitration is in progress.

Cochin Bridge Infrastructure Company Ltd. ("CBICL") the Company’ssubsidiary which constructed the New Mattancherry Bridge connecting Fort Kochi withWillingdon Island in the Cochin Port Trust area in the State of Kerala was operating thesame since September 2001. However the Greater Cochin Development Authority has on April27 2014 (on the last day of the original concession period) without compensating CBICLfor freezing the toll rates and in disregard of the Arbitral Tribunal orders chose tounilaterally seal the toll booths of CBICL at the Bridge. CBICL had put the arbitralproceedings on hold pending out of court settlement with the Government of Kerala. CBICLhas invoked legal proceedings for early decision on settlement.


The Company has two active projects in the Port Sector of which one is in operation:

(1) Concession for constructing and operating two multipurpose berths in the innerharbor of the Visakhapatnam Port capable of handling upto 9 MTPA. The Company’ssubsidiary VSPL has completed construction of both the berths of which one becameoperational in July 2004 and the other in September 2005.

(2) Concession for constructing and operating two offshore container berths at theMumbai harbor. The project is under construction by Indira Container Terminal Pvt. Ltd.(ICTPL) the special purpose vehicle promoted by the Company for the project.

Developments in the Port Sector during the Period

Visakhapatnam Port Trust ("VPT") has completed dredging of Entrance ChannelTurning Circle and Inner Harbor Berths and has declared EQ-8 and EQ-9 berths of VSPL forhandling fully laden Panamax vessels arriving at a draft of 14.5 Meters from 27.2.2016.Achievement of draft of 14.5 Meters is a major boost to the competitive strength of theproject terminal which is the only multipurpose terminal at Vizag Port to handle fullyladen Panamax vessels. Needless to say it will be the main growth driver henceforth inachieving the planned future growth of the project. VSPL has also requested for allotmentof additional land of 20 Acres. VPT has recommended the proposal to the Government forapproval.

ICTPL a joint venture of the Company could not commence operations on the ScheduleDate of Operations (‘SCOD’) due to Mumbai Port Trust’s (‘MbPT’client) inability to fulfil its obligations as per the terms of the License Agreementexecuted. The continuing failure on the part of MbPT in fulfilling their obligationsresulted in the SCOD being delayed by nearly 6 years which has resulted in the lendersclassifying the account as a Non Performing Asset. However at the initiative of ICTPL aprocess for reviving of the project by restructuring it from a single container cargoterminal to a multiple clean cargo terminal is underway with active participation of MbPTand support from the Ministry of Shipping and the Prime Minister’s Office. In theinterim MbPT has granted permission to ICTPL for handling Roll On Roll Off (RORO) vesselsfrom its completed berths on a revenue share basis. These operations have commenced fromJuly 21 2015 and till date ICTPL has handled 83 vessels and has earned revenue of Rs.628366241.

The Company’s subsidiary Mormugao Terminal Ltd. had instituted appropriate legalproceedings challenging the unilateral termination of the concession for providingmechanized handling facilities for handling coal at one of the berths in the Mormugao Portby the Mormugao Port Trust. Arbitration proceedings completed and the award is expected byend August 2016.


The Energy Sector of the Company has two projects in developing stage and one projecteach in under construction and operations phase.

(1) 30 MW co-generation power project at Pravaranagar in Ahmednagar District ofMaharashtra. The Company’s subsidiary Pravara Renewable Energy Ltd. is the SpecialPurpose Vehicle incorporated for development of project. The project commenced CommercialOperations from 6th November 2015 and started exporting power to Maharashtra StateElectricity Distribution Company Limited and supplying steam and power to Padmashree Dr.Vitthalrao Vikhe Patil Sahakari Sakhar Karkhana Limited.

(2) Concession for setting up and operating a 66 MW hydro-electric power project inWest Sikkim District on the river Rimbhi. The Company’s subsidiary Sikkim HydroPower Ventures Ltd. is the concessionaire for the project.

(3) Concession for setting up and operating a 261 MW power project on the river Spitiin the State of Himachal Pradesh. The Company’s subsidiary Youngthang Power VenturesLtd. is the concessionaire for the project.

(4) Concession for setting up and operating a 60 MW hydro-electric project on theTidong River (tributary of Satluj) in the Kinnaur district of Himachal Pradesh. TidongHydro Power Ltd. a special purpose vehicle promoted by the Company is the concessionairefor the project.

Developments in the Energy Sector during the Period

Sikkim Hydro Power Ventures Ltd. (SHPVL) has restarted the construction of the project.The Company has approached the lenders for drawdown in the third quarter of FY 17 and isexpected to commence the commercial operations within 36 months from the date of firstdrawdown.

Youngthang Power Ventures Ltd. (YPVL) has not been able to proceed with the studies toprepare the Detailed Project Report (DPR) for its project due to opposition of localfarmers. The Company has served a notice to State Government of Himachal Pradesh tointervene in the matter & take immediate necessary steps including seeking ofnecessary consents from Grampanchayat so as to enable YPVL to take up site investigationwork and preparation of DPR. Recently Government of Himachal Pradesh has amended theHydro Policy requiring the Project Promoters to seek clearance from Commissioner insteadof Grampanchayat. The Company is in discussion with Government of Himachal Pradesh forearly resolution of the project issues.

Tidong Hydro Power Ltd (THPL) has undertaken geological studies for preparation of DPR.A request has been made to the State Government of Himachal Pradesh to extend the due datefor preparation & submission of DPR.

Other Business

In addition to undertaking infrastructure development through SPVs the Companyundertakes EPC works of the under construction projects and operation & maintenance ofoperational road projects.


Your Company has undertaken various projects on BOT-PPP basis which were scheduled tobe completed in a period of 2.5 to 3 years.

Due to delay in fulfillment of obligations by the Clients completion of more than halfa dozen projects got delayed by 3 to 4 years (i.e. completion took 5.5 to 7 years).Despite all odds the Company has completed 5 projects and 1 is nearing completion. Oneport project is taken up for reorganization through intervention of Ministry of Shippingand PMO.

Main reasons for delay are land acquisition statutory clearances (Environmental &Forest) Railway Authorities clearances/ permissions for construction of ROBs (Road OverBridge) utility shifting etc. Such delays were not attributable to the Company and werebeyond its control.

In the process Company’s principle capital got locked and also suffered increasedliability of interest during Construction besides delay in realization of revenuestreams.

This posed a major cash flow challenge for the Company and painful process forrealization of the same.

Despite various remedies & reliefs available in the contract agreements/ConcessionAgreements to deal with such circumstances the actual inflows does not realize in thatmanner.

As such your Company is compelled to resort to legal process and various subsidiariesof your Company have lodged dues & claims with respective Clients and initiated legalproceedings/arbitrations which are different stages of determination.

Your Company is expecting to realize substantial part of money from this legal processover a period of next 2 to 5 years.

Large enterprising value of your Company is in the dues & claims. Once these arerealized it will unlock lot of capital and bring value to your Company.


Your Company through its repository of experience in project development and operationsin multiples sector qualifies for largest projects being offered by Project authorities inRoad Port Transmission and Power sector projects.

Your Company as indeed most players in the infrastructure industry has been facing aresource crunch in the last few years. There is a sizable gap between the Company’sinternal accruals and the requirement of funds for capital investment in existing and newprojects and revenue expenditure. The ability of the Company to raise external funds hasalso been affected due to adverse market conditions. To ease the present situation theCompany is actively pushing for realization of its receivables from NHAI and monetizationof its matured assets at the appropriate valuation.

Going forward your Company will focus on selective opportunities which have lower riskand lower investment which will supplement our existing portfolio. The focus will be toget "almost ready" projects commissioned at the earliest and operate theprojects successfully. Your company is confident that these projects once completed willcontribute positively to the bottom line and improve the cash position.


During the Period under review your Company has allotted 3570000 equity shares of`2/- each under the GIPL Employee Stock Option Scheme 2013. Consequently the paid upshare capital of the Company stood at Rs. 188.35 crores as at 31st March 2016 comprisingof 941770724 equity shares of Rs. 2/- each fully paid up.


Your Company’s internal control systems commensurate with the nature and size ofits business operations. Your Company has maintained a proper and adequate system ofinternal controls. This ensures that all Assets are safeguarded and protected against lossfrom unauthorized use or disposition and that the transactions are authorised recordedand reported diligently. The Management continuously reviews the internal control systemsand procedures for the efficient conduct of the Company’s business.


The Company has appointed Kapadia Associates Chartered Accountants Mumbai as itsInternal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliances with operating systems accountingprocedures and policies and reports the same on quarterly basis to the Audit Committee.


Pursuant to section 134(5) of the Companies Act 2013 your Directors based on therepresentations received from the Operating Management and after due enquiry confirmthat:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. the Directors have selected accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the Period and of the profit ofthe Company for the Period;

c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual accounts on a going concern basis;

e. the Directors have laid down adequate Internal Financial Controls to be followed bythe Company and such Internal Financial Controls were operating effectively during thePeriod ended 31st March 2016; and

f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Abhijit Rajan is liable to retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Mr. Himanshu Parikh Director of the Company who was liable to retire by rotation atthe 14th Annual General Meeting of the Company had expressed his intention not to seekre-election as a Director of the Company and accordingly had retired from his directorshipon March 31 2015.

Mr. Parag Parikh Whole Time Director and CFO resigned on November 18 2014.

Independent Directors of the Company have furnished necessary declarations to theCompany under section 149(7) of the Companies Act 2013 confirming that they meet with thecriteria of Independence as prescribed for Independent Directors under section 149(6) ofthe Act and regulation 16(b) of the SEBI Listing Regulations.

Key Managerial Personnel

The Board of Directors had on the recommendation of the Nomination & RemunerationCommittee appointed Mr. Monesh Bhansali as the Chief Financial Officer of the Company witheffect from November 18 2014. Mr. Bhansali resigned with effect from April 22 2016 andMr. Kaushik Chaudhuri has been appointed as the Chief Financial Officer of the Companywith effect from May 30 2016.

Mr. G. Sathis Chandran resigned as Company Secretary with effect from 31st March 2015.

Ms. Renuka Matkari has been appointed as the Company Secretary with effect from 15thMay 2015.

Remuneration Policy and Board Evaluation

In compliance with the provisions of the Companies Act 2013 and Regulation 27 of theSecurities Exchange Board of India (Listing Obligations & Disclosures Requirements)Regulations 2015 (hereinafter "Listing Regulations") the Board of Directors onthe recommendation of the Nomination & Remuneration Committee adopted a Policy onremuneration of Directors and Senior Management. The Remuneration Policy is stated in theCorporate Governance Report.

Performance evaluation of the Board was carried out during the period under review. Thedetails are given in the Corporate Governance Report.

Familiarisation programmes for the Independent Directors

In compliance with the requirements of SEBI Regulations your Company has put in placea familiarisation programme for the Independent Directors to familiarise them with theirrole rights and responsibilities as Directors the working of the Company nature of theindustry in which the Company operates business model etc. It is also available on theCompany website http://


The Board met ten times during the period under review the details of which are givenin the Report on Corporate Governance. The intervening gap between the two consecutivemeetings was within the period prescribed under the Companies Act 2013 and the ListingRegulations.


During the period under review the Board has not granted any options to employeesunder the ‘GIPL Employee Stock Options Scheme - 2013’ (‘Scheme’).Details of the shares issued under the Scheme as also the disclosures in compliance withSEBI (Share Based Employee Benefits) Regulations 2014 read with erstwhile SEBI (EmployeesStock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999 are set out inAnnexure I to this Report.


During the Period under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.


The details of loans guarantee or investment under Section 186 of the Companies Act2013 are given under Notes to Accounts of financial statements.


All related party transactions entered by the Company during the Period were in theordinary course of business and on arm’s length basis. Details of material relatedparty transactions are given in the prescribed Form AOC - 2 which is appended to thisreport as Annexure II.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany’s website and can be accessed at the Web link:


In view of the nature of business activities currently being carried out by theCompany your Directors have nothing to report with respect to Conservation of Energy andTechnology Absorption as required under Section 134(3)(m) read with Rule 8 of theCompanies (Accounts) Rules 2014.

Foreign exchange outgo (actual outflows) : Rs. 275803/- (Eighteen months ended 31.03.2016)
Rs. 425639/- (Nine months ended 30.09.2014)
The foreign exchange earned (actual inflows) : NIL


During the Period under review companies mentioned below have ceased to beCompany’s subsidiaries.

i) Divestment to BIF India Holdings Pte Ltd : Andhra Expressway Limited RajahmundryExpressway Limited Gorakhpur Infrastructure Company Limited Kosi Bridge InfrastructureCompany Limited Mumbai Nasik Expressway Limited and Aparna Infraenergy India Pvt.Limited

ii) 3 other defunct SPVs where the contracts have been terminated by the client(s) weredivested to Mr Hiten Shah. These SPVs are - Patna Buxar Highways Limited PataliputraHighway Limited and Mormugao Terminal Limited.

The Policy for determining material subsidiaries as approved by the Board is uploadedon the Company’s website and can be accessed at the web link

A statement containing salient features of the financial statement of each of thesubsidiaries associates and joint venture companies as required to be provided undersection 129(3) of the Companies Act 2013 is enclosed herewith in Form AOC-1.

Pursuant to the provisions of Section 136 of the Act the financial statements of theCompany consolidated financial statements along with relevant documents and separateaudited accounts in respect of Subsidiaries are available on the website of the Company.


The Board has presently the following committees to assist it in its work:

(i) Audit Committee to inter-alia oversee and review the financial reporting systemand disclosures made in its financial results;

(ii) Stakeholders’ Relationship Committee to inter-alia redress investorcomplaints;

(iii) Nomination and Remuneration Committee to inter-alia approve appointments andremuneration of executive directors and lay down nomination and remuneration policies ofthe Company;

(iv) Compensation Committee to administer ‘employee stock option schemes’;

(v) Project Committee to inter-alia advice the Company on the business opportunitiesthat arise from time to time;

(vi) Projects Review Committee to review implementation and working of projects underdevelopment and operation;

(vii) Corporate Social Responsibility Committee to formulate and implement a‘corporate social responsibility policy’ for the Company; and

(viii) During the period under review in accordance with the provisions of theerstwhile clause 49 of the Listing Agreement the Board had voluntarily constituted theRisk Management Committee to monitor and review the risk management plan for the Company.

The constitution of the various committees its powers and duties have been elaboratedin greater detail in the ‘Corporate Governance Report’ which is annexed to theAnnual Accounts.


Your Company has during the period under review transferred a sum of Rs. 22015 toInvestor Education and Protection Fund in compliance with the provisions of section 125of the Companies Act 2013. The said amount pertains to refund of share application moneywhich remained unclaimed by the members of the Company for a period exceeding 7 years fromits due date of payment.


In terms of section 177(9) & (10) of the Companies Act 2013 a Vigil Mechanism forDirectors and employees to report genuine concerns has been established by the Board alongwith whistle blower policy. The whistle blower policy have been uploaded on the website ofthe Company and the same can be accessed at the link


Since there are no average net profits for the Company during the previous threefinancial years there are no specific funds that are required to be set aside and spentby the Company during the year under review. The Company is yet to formulate the CSRPolicy.


An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure III.


In terms of Regulation 34 of the Listing Regulations a Report on Corporate Governancealong with Compliance Certificate issued by Mr. Veeraraghavan. N Practising CompanySecretary (Certificate of Practice Number 4334) is attached and forms integral part ofthis Report (hereinafter "Corporate Governance Report").


Attention of the members is invited to a separate section titled ‘ManagementDiscussion and Analysis Report’ which is covered in this Annual Accounts.


The Statutory Auditors of the Company M/s. Natvarlal Vepari & Co. CharteredAccountants (Firm Registration No. 106971W) hold office till the conclusion of theensuing Annual General Meeting of the Company and being eligible offer themselves forre-appointment. The Company has received their written consent and a certificate that theysatisfy the criteria provided under Section 141 of the Act and that the appointment ifmade shall be in accordance with the applicable provisions of the Act and rules framedthereunder. The re-appointment proposed is within the time frame for transition under thethird proviso to subsection (2) of Section 139 of the Companies Act 2013.

The Board recommends their reappointment.


The Auditors have qualified their report to the members on the issue relating to theexcess managerial remuneration paid of Rs. 20449402 /- for the previous period. TheCompany had made an application for waiver of refund of the managerial remuneration to theMinistry of Corporate Affairs which has been rejected by the Ministry. The Companyhowever has sought to make an application for review of the rejection and therefore nosteps for recovery have been initiated and no effects have been given for the same. Forthe current period also there is an excess remuneration paid of Rs. 18395890/- to theManaging Director for which the Company is in the process of making an application to theCentral Government for the waiver for recovery for the same.

Further without qualifying their opinion the Auditors have emphasized the followingmatters:

(i) Unilateral termination and closure of concessions of Cochin Bridge Infrastructureproject. The Company’s exposure towards the said project is Rs. 251587013/-.

(ii) Intention to exit Youngthang Power Venture project at Himachal Pradesh and seekinga claim of an amount against the amount spent on the project. The Company’s exposuretowards the said project includes investment and loans and advances of Rs. 713694045/-.

(iii) Investment of Rs. 1277561752/- in joint venture Indira Container TerminalPrivate Limited.

(iv) Monthly toll collections from Rajahmundry Godavari Bridge project are notsufficient to pay the interest.

(v) Company’s current liabilities exceeded current assets despite the sale of someof the SPVs.

The Board is confident about a positive outcome of the arbitration / litigation processin favour of the Cochin Bridge Infrastructure Company Ltd which is in progress againstthe Kerala Government with respect to the unilateral termination and closure of theconcession of the Cochin Bridge project; and with the Himachal Government authorities withrespect to the intention to exit one of the hydro projects Youngthang Power Venture Ltdand of the claim of the amount spent on the project so far.

Based on the performance of the RORO operation which the Mumbai Port Trust haspermitted Indira Container Terminal joint venture project to operate and on the basis ofthe various discussions which the management has had with bankers and officials of theMinistry of Shipping the Board is confident that these are short term in nature and willbe appropriately addressed and regularized in the near future.

There was delay in completion of Rajahmundry Godavari Bridge Project and also shortfallin toll collection. The management is in discussion with various lenders and agencies withthe intention of reducing the interest burden on borrowings by replacing the high costdebts with low cost alternatives and is also exploring the option of availing a RevenueShortfall Loan as per the terms of the concession agreement.

The Board is confident of the steps being taken by the management with respect toadditional mobilization of funds to ease the cash position and narrow the mismatch betweencurrent liabilities and current assets.


Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Veeraraghvan. N Practicing Company Secretary (Certificate of PracticeNumber: 4334) to undertake the Secretarial Audit of the Company.

In terms of provisions of section 204 of the Companies Act 2013 the Company hasannexed to this Board Report as Annexure IV a Secretarial Audit Report given by theSecretarial Auditor.

Observations made by the Secretarial Auditor in their Report are self explanatory anddo not need further clarification except as clarified in the previous paragraph.


Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to this Report in Annexure –V. In termsof the provisions of Section 197(12) of the Act read with sub-rules (2) and (3) of Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of employees drawing remuneration inexcess of the limits set out in the said Rules are provided in the Report.

However having regard to the provisions of the first proviso to Section 136(1) of theAct the details are excluded in the report sent to members. The required information isavailable for inspection at the registered office and the same shall be furnished onrequest.


The Company has constituted a Committee under Section 4 of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year nocomplaint was filed before the said Committee.


No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company’s operations in future.

There were also no material changes and commitments after the closure of the year tillthe date of this report which affect the financial position of the Company.


The Board wishes to place on record their appreciation of the support received by theCompany from its shareholders and employees. The Directors also wish to acknowledge theco-operation and assistance received by the Company from its business partners bankersfinancial institutions and various Government Semi Government and Local Authorities.

For and on behalf of the Board of
Gammon Infrastructure Projects Limited
Naresh Chandra C.C.Dayal K.K.Mohanty
Chairman Audit Committee Chairman Managing Director
DIN: 00015833 DIN: 00178583 DIN: 00080498
Place: Mumbai
Date: August 25 2016