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Directors Report of Gammon Infrastructure Projects Ltd.

Sep 30, 2014

The Shareholders of

Gammon Infrastructure Projects Limited

The Directors have pleasure in submitting their fourteenth Annual Report together with the Audited Accounts of the Company, for the period 1st January, 2014 to 30th September, 2014 (the "Period"). This report has been prepared in accordance with the Company law prevailing prior to April 01, 2014.

FINANCIAL HIGHLIGHTS

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

As per Consolidated Accounts: (Rs. in lacs) Particulars Period ended Period ended September 30, December 31, 2014 2013 (nine month (nine month period) period)

Income 55168.72 46065.91

Earnings before interest, tax, depreciation and amortization 31342.68 28384.58

Financial costs 20629.30 21902.87

Depreciation and amortization 16823.75 11956.02

Tax expenses (2157.15) 94.85

Minority interest & share of profit of associates 71.93 75.24

Net profit / Loss (4025.15) (5644.39)

As per Standalone Accounts: (Rs. in lacs) Particulars Period ended Period ended September 30, December 31, 2014 2013 (nine month (nine month period) period)

Income 8,380.66 8,449.41

Earnings before interest, tax, depreciation and amortization 2,333.15 3,985.56

Financial costs 5,345.15 5,227.56

Depreciation and amortization 177.15 172.83

Exceptional items 3,916.16 -

Tax expenses (171.60) (30.17)

Net profit / Loss (6,933.71) (1,396.66)

DIVIDEND

The Board regrets its inability to recommend any dividend for the Period in view of the tight cash position of the Company.

COMPANY''S BUSINESS

ROADS SECTOR:

Following the termination of the concession agreement for four laning of the Patna to Buxar stretch of National Highway 30 in the State of Bihar of Patna Buxar Highways Ltd. and unilateral sealing of the toll booths of Cochin Bridge Infrastructure Company Ltd. at the new Mattancherry Bridge at Kochi by the Greater Cochin Development Authority, the Company now has nine active road projects of which five are in operation.

The active projects in the Road Sector are: (a) Toll based projects:

(1) Concession for four laning and operating the Vadape - Gonde stretch of the National Highway 3 between Mumbai and Nashik in the State of Maharashtra. The Company''s subsidiary, Mumbai Nasik Expressway Ltd. has completed construction of the project and has been operating the same since May, 2010;

(2) Concession for constructing and operating a four lane bridge across the Godavari River together with its approach roads on either side, linking Rajahmundry to Kovvur in the State of Andhra Pradesh. The Company''s subsidiary, Rajahmundry Godavari Bridge Ltd. is the concessionaire for the project.

(3) Concession for six laning and operating the Vijayawada to Gundugolanu stretch of National Highway 5, including a four lane bypass to Vijayawada town, in the State of Andhra Pradesh. The Company''s subsidiary, Vijayawada Gundugolanu Road Project Pvt. Ltd., is the concessionaire for the project.

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

(b) Annuity based projects:

(1) Concession for four laning and operating the Rajahmundry - Dharmavaram stretch of National Highway 5 in the State of Andhra Pradesh. The Company''s subsidiary, Rajahmundry Expressway Ltd., has completed construction of the project and has been operating the same since September, 2004.

(2) Concession for four laning and operating the Dharmavaram to Tuni stretch of National Highway 5 in the State of Andhra Pradesh. The Company''s subsidiary, Andhra Expressway Ltd., has completed construction of the project and has been operating the same since October, 2004.

(3) Concession for constructing and operating a four lane bridge across the Kosi River on National Highway 57 in the State of Bihar. The Company''s subsidiary, Kosi Bridge Infrastructure Company Ltd., has completed construction of the project and has been operating the same since February, 2012.

(4) Concession for constructing and operating a four lane bypass to Gorakhpur Town on National Highway 28 in the State of Uttar Pradesh. The Company''s subsidiary, Gorakhpur Infrastructure Company Ltd., has completed construction of the project and has been operating the same since 31st March, 2012.

(5) Concession for four laning and operating the Patna to Muzafarpur stretch of the National Highway 77 including a bypass to the Muzafarpur town in the State of Bihar. The Company''s subsidiary, Patna Highway Projects Ltd., is the concessionaire for the project.

Developments in the Road Sector during the Period

Patna Buxar Highways Ltd., the Company''s subsidiary, applied to the National Highways Authority of India ("NHAI") for mutual termination of the concession agreement on account of NHAI''s inability to provide right of way over a substantial portion of the project stretch. However, NHAI choose to terminate the concession unilaterally and forfeited the Company''s bid security to the extent of 1% of the total project cost. The Company is taking legal recourse to recover the losses sufered by it from NHAI.

Cochin Bridge Infrastructure Company Ltd. ("CBICL"), the Company''s subsidiary, which constructed the New Mattancherry Bridge connecting Fort Kochi with Willingdon Island in the Cochin Port Trust area in the State of Kerala was operating the same since September, 2001. However, the Greater Cochin Development Authority has on April 27, 2014 (on the last day of the original concession period), without compensating CBICL for freezing the toll rates and in disregard of the Arbitral Tribunal orders, chosen to unilaterally seal the toll booths of CBICL at the Bridge. CBICL has put the arbitral proceedings on hold pending settlement talks with the Government of Kerala.

The Sidhi Singrauli Road Projects Ltd. has achieved financial closure and upon attaining ''appointed date'' has started construction activities. The project has achieved about 19% completion as of 1st January, 2015. However, the progress has slowed down due to delay in disbursement of debt from the lenders.

The Vijayawada Gundugolanu Road Project Pvt. Ltd. has started tolling operations on the project stretch with efect from 1st September, 2014. The revalidation of financial closure, required on account of delay in ''appointed date'', is under process.

Rajahmundry Godavari Bridge Ltd., has not been able to complete the Godavari bridge project on account of litigation involving land required for the approach. The project is expected to be completed by 7th April, 2015, within the time extended by the state government authorities.

Patna Highway Projects Ltd. has not been able to complete the entire project stretch due to non-availability of land. However, we have applied to NHAI for a provisional completion certificate based on the progress of work on land made available to us, which under active consideration of NHAI.

PORTS SECTOR:

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 inner harbor of the Visakhapatnam Port, capable of handling upto 9 MTPA. The Company''s subsidiary, Vizag Seaport Pvt. Ltd., has completed construction of both the berths, of which one became operational in July, 2004 and the other in September, 2005.

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

Developments in the Port Sector during the Period

The company is pleased to inform that the long awaited deepening of the inner harbor of Visakhapatnam Port Trust is expected to be achieved soon. The port trust has already completed dredging up to -12.5 m and the balance dredging up to -14 m is expected to be completed shortly. This will come as a significant booster to the VSPL''s business since the fully loaded panamax size vessels can directly enter the inner harbor thereafter, without being partially discharged in the outer harbor. The terminal business is expected to turn around with a sizable increase in the profit margins. Development of the additional land of 30 acres in the EXIM park area is already on, upon completion of which the terminal capacity is expected to go up to 9 MMTPA.

Indira Container Terminal Private Ltd. has been unable to complete the ofshore container berth projects as the Mumbai Port Trust has not completed dredging of the berth front and its approach. The Port Trust has also not filled up and handed over the areas earmarked for stockyard purposes. Besides, the approval of Central Government for equipment suppliers is pending. The company and the port trust authorities are jointly exploring the possibility of gainfully putting to use the already constructed infrastructure pending the completion of the project.

The Company''s subsidiary, Mormugao Terminal Ltd., has instituted appropriate legal proceedings challenging the unilateral termination of the concession for providing mechanized handling facilities for handling coal at one of the berths in the Mormugao Port by the Mormugao Port Trust.

ENERGY SECTOR:

The Company has five projects in the energy sector of which one project is expected to become operational in February, 2015.

(1) Concession for setting up and operating a 30 MW co-generation power project at Pravaranagar in Ahmednagar District of Maharashtra. The Company''s subsidiary, Pravara Renewable Energy Ltd., is the concessionaire for the project. The project is set to be commissioned in February, 2015.

(2) Concession for setting up and operating a 66 MW hydro-electric power project in West Sikkim on the river Rimbhi. The Company''s subsidiary, Sikkim Hydro Power Ventures Ltd., is the concessionaire for the project.

(3) Concession for setting up and operating a 261 MW power project on the river Spiti in the State of Himachal Pradesh. The Company''s subsidiary, Youngthang Power Ventures Ltd., is the concessionaire for the project.

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

(5) A project for setting up and operating a 250 MW thermal power project in Chandrapur district of Maharashtra for which the Company''s subsidiary, Aparna Infraenergy India Pvt. Ltd., has the coal linkage.

Developments in the Energy Sector during the Period

During the Period, the Company decided not to pursue the amalgamation of Pravara Renewable Energy Ltd., the concessionaire for the 30 MW co-generation project at Pravara Nagar at Ahmednagar, with the Company. The Pravara project is set to be commissioned in February, 2015.

Youngthang Power Ventures Ltd. has not been able to proceed with the studies to prepare the Detailed Project Report (DPR) for its project due to opposition of local farmers. The Company has served a notice on the state government for refund of the upfront premium of Rs. 52 Cr with interest and costs. The state government is seeking the opinion of the local administration on action to be taken in the matter.

Tidong Hydro Power Ltd is conducting geological studies for preparation of DPR, which has been delayed due to adverse environment conditions and poor condition of roads at site. A request has been made to the state government to extend the due date till December end, 2015.

Aparna Infraenergy India Pvt. Ltd., has the requisite land and coal / water linkages as well as all statutory clearances to proceed with its thermal power project. However, the Company had to petition the Bombay High Court against cancellation of the coal linkage on the issue of alleged management change. The Honorable High court has directed Western Coalfelds Ltd. not to take any coercive action against the company till further orders.

Other Business

In addition to undertaking infrastructure development through SPVs, the Company undertakes operation & maintenance of the five road projects in operation.

The Company has also ventured into construction work at the Sidhi-Singrauli road project through subcontractors. The Company also plans to undertake construction work at the Vijayawada-Gundugolanu road project through subcontractors.

THE FUTURE

The Company and its 100% subsidiary Gammon Road Infrastructure Ltd. ("GRIL"), have qualified to bid for all NHAI projects of an estimated cost not exceeding Rs.3820 crores approx. The Company has applied for an enhancement of the limit up to Rs.4800 crores.

The Company has also been qualified to bid for one project in the Port sector with an estimated total aggregate cost Rs.4000 crores.

The Company, as indeed most players in the infrastructure industry, has been facing a resource crunch in the last few years. There is a sizable gap between the Company''s internal accruals and the requirement of funds for capital investment in existing and new projects and revenue expenditure. The ability of the Company to raise external funds has also been afected due to adverse market conditions. To ease the present situation, the Company is actively pushing for realization of its receivables from NHAI and monetization of its matured assets at the appropriate valuation.

Going forward, the Company will focus on selective opportunities which have lower risk and lower investment, which will supplement our existing portfolio. Our focus will be to get our "almost ready" projects commissioned at the earliest and run the operating projects successfully. We are confdent that these projects, once completed, will contribute positively to our bottom line and improve our cash position.

EMPLOYEE STOCK OPTION SCHEME

The ''employee stock options'' issued by the Company prior to the initial public ofer of equity shares have either lapsed or have been exercised. However, the Company has, with the members'' approval, issued a fresh tranch of ''employee stock options'' to its executive directors and senior employees during previous financial year. Details of the ''employee stock options'' allotted, as required to be stated in this Report in terms of the SEBI Guidelines is annexed as Annexure 1.

A certificate from the Auditors that the Employee Stock Options Scheme has been implemented by the Company in accordance with the SEBI Guidelines is annexed to this Report as Annexure 2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

The requirements of Section 217 (1) (e) of the Companies Act, 1956, read with Rule 2(A) & 2(B) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

The Company did not earn any foreign exchange during the Period. The Company expended foreign exchange equivalent to Rs. 23.45 lacs towards professional services during the period.

SUBSIDIARIES

During the Period, Company has obtained the dissolution of Dohan Renewable Energy Pvt. Ltd., Indori Renewable Energy Pvt. Ltd., Kasavati Renewable Energy Pvt. Ltd., Markanda Renewable Energy Pvt. Ltd., and Sirsa Renewable Energy Pvt. Ltd., subsidiaries of the Company promoted to implement some renewable energy projects in Haryana, which were later cancelled. No other changes in the list of subsidiaries of the Company during the Period.

A statement u/s 212 of the Companies Act, 1956 relating to the subsidiaries is attached to the Balance Sheet of the Company. The Company has not attached the audited accounts of the subsidiaries to the Audited Accounts of the Company. However, the efect of the same has been brought out in the consolidated Audited Accounts of the Company. The annual accounts of the subsidiaries and the related information will be made available to the Company''s and subsidiaries'' investors as and when required by them. These have also been kept for inspection of the investors at the Registered Ofce of the Company and of the concerned subsidiaries.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217(2A) of the Companies Act, 1956 is annexed to this Report as Annexure 3.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a. the applicable accounting Standards along with proper explanation relating to material departures have been followed by the Company in preparation of the Annual Accounts for the Period;

b. the Directors have selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the Company at the end of the Period and of the loss of the Company for the Period;

c. the Directors have taken proper and sufcient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the annual accounts are prepared on a going concern basis.

BOARD OF DIRECTORS

During the Period, Mr. Naresh Chandra, Chairman, had informed the Company that due to his increased involvement with the Company as Chairman he should no longer be treated as an Independent Director of the Company. Mr. Chandra was appointed as an Independent Director as per Section 149 of the Companies Act, 2013 at the 13th Annual General Meeting of the Company held on June 30, 2014. The Company has since then treated him as a director liable to retire by rotation.

Mr. Himanshu Parikh, Vice Chairman, who is liable to retire by rotation, has intimated his desire not to be re- appointed as a director at the ensuing 14th Annual General Meeting.

Accordingly, it is proposed to seek the approval of members at the ensuing 14th Annual General Meeting for changing the designation / appointment of Mr. Naresh Chandra from independent director to a director liable to retire by rotation and for not filling up the vacancy caused by the retirement by rotation of Mr. Himanshu Parikh.

BOARD COMMITTEES

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 system and disclosures made in its financial results;

(ii) Stakeholders'' Relationship Committee to, inter-alia, redress investor complaints;

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

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

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

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

(vii) QIP Committee to oversee raising of financial resources from QIBs in terms of the resolution approved by the members at the Extra Ordinary General Meeting held on July 15, 2014;

(viii) Corporate Social Responsibility Committee to formulate and implement a ''corporate social responsibility policy'' for the Company; and

(ix) Risk 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 elaborated in greater detail in the ''Corporate Governance Report'', which is annexed to the Annual Accounts.

REPORT ON CORPORATE GOVERNANCE

Attention of the members is invited to a separate section titled ''Report on Corporate Governance'' which is annexed to the Annual Accounts. A certificate of compliance issued by Mr. N. Veeraraghavan, a ''practicing company secretary'' on compliance with corporate governance requirements of the Listing Agreement is annexed to this Report as Annexure 4.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the members is also invited to a separate section titled ''Management Discussion and Analysis Report'' which is annexed to the Annual Accounts.

AUDITORS

The Company has received the requisite consent and certificate from M/s. Natvarlal Vepari & Co. under Chapter X of the Companies Act, 2013 for their appointment as Company''s auditors.

The Board recommends their reappointment.

AUDITORS'' REPORT

The Auditors have qualified their report to the members on the issues relating to the uncertainty over the outcome of the legal proceedings initiated by Patna Buxar Highways Ltd. and Mormugao Terminal Ltd. against unilateral termination of their respective concession agreements. The Company''s exposure to these projects is Rs.8745.75 lacs, which has not been provided for.

Further, without qualifying their opinion, the Auditors have emphasized the following matters:

(i) Existence of uncertainty on timing and realization of cash flows as the Company has incurred a net loss after tax of Rs. 6933.71 lacs and its current liabilities exceeded the current assets by Rs.4077.27 lacs.;

(ii) ''going concern assumption'' as regards Indira Container Terminal Pvt. Ltd. due to its net loss during the year and default in payment of debt obligations to lenders;

(iii) not making a provision for exposure towards Cochin Bridge Infrastructure Company Ltd. including investments and loans and advances of Rs. 1,326.05 lacs and Corporate guarantee of Rs. 974.17 lacs in view of the uncertainty over the outcome of legal proceedings initiated by Cochin Bridge against unilateral termination and closure of concession; and

(iv) not making a provision for exposure towards Youngthang Power Ventures Ltd. including investments and loans of Rs. 7,080.37 lacs which has initiated correspondence for closure of the project for reasons beyond its control.

(v) excess remuneration to the extent of Rs. 208.55 lacs paid to managerial persons beyond the limits specified under respective regulations.

The Board is confdent of a favorable outcome on the legal proceedings initiated by Patna Buxar Highways Ltd. and Mormugao Terminal Ltd.

The Board is also confdent of the steps being taken by the management to ease the cash position and narrow the mismatch between current liabilities and current assets.

The Board is aware of and confdent about a positive outcome on the talks and correspondence with the Kerala Government on the Cochin bridge project, and with the Mumbai Port Trust and Ministry of Shipping and project bankers on the Indira Container Terminal project; and with the Himachal Government authorities on the Youngthang Power project.

The Company is in the process of making an application to the Central Govenrment for the approval of excess managerial remuneration.

ACKNOWLEDGEMENTS

The Board wishes to place on record their appreciation of the support received by the Company from its shareholders and employees. The Directors also wish to acknowledge the co-operation and assistance received by the Company from its business partners, bankers, financial 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

Place: Mumbai Date: February, 14, 2015


Dec 31, 2013

To The Shareholders of Gammon Infrastructure Projects Limited

The Directors have pleasure in submitting their thirteenth Annual Report together with the Audited Accounts of the Company, for the period 1st April, 2013 to 31st December, 2013 (the Period). This report has been prepared in accordance with the Company law prevailing prior to April 01, 2014.

FINANCIAL HIGHLIGHTS

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

As per Consolidated Accounts: (Rs. in lacs)

Particulars December 31, March 31, 2013 2013 (twelve month (nine month period) period)

Income 46,065.90 69,813.92

Earnings before interest, tax, depreciation and amortization 28,384.58 47,512.13

Financial costs 21,902.87 29,683.38

Depreciation and amortization 11,956.02 16,085.22

Tax expenses 94.85 (739.10)

Minority interest & share of profit of associates 75.24 1,010.01

Net Profit / (Loss) (5,644.39) 1,472.63

As per Standalone Accounts: (Rs. in lacs)

Particulars December 31, March 31, 2013 2013 (twelve month (nine month period) period)

Income 8,449.41 14,020.44

Earnings before interest, tax, depreciation and amortization 3,985.56 9,729.77

Financial costs 5,227.56 4,245.90

Depreciation and amortization 172.83 199.27

Tax expenses (30.17) 2,241.93

Net Profit / (Loss) (1,396.66) 3,042.68

DIVIDEND

The infrastructure industry is passing through a tough phase of business cycle and your company is not insulated from this macro-economic scenario. The Board regrets that the Company is not in a position to declare any dividend for the Period in view of the losses made by the Company. However, with three projects getting operational in the near future and with overall improvement of business sentiments, we hope to perform better in the future and reward the members.

COMPANY''S BUSINESS

Your Company has a basket of eleven projects in the Road Sector, three in the Port Sector and five in the Energy Sector, which are at various stages of construction and / or operation and management through project specific special purpose vehicles (SPVs).

The SPVs in the Road Sector are:

(a) Toll based projects:

(1) Cochin Bridge Infrastructure Company Ltd. (CBICL), the concessionaire which constructed the New Mattancherry Bridge connecting Fort Kochi with Willingdon Island in the Cochin Port Trust area in the State of Kerala and has been operating and managing the same since September, 2001.

(2) Mumbai Nasik Expressway Ltd. (MNEL), the concessionaire which four laned the Vadape - Gonde stretch of the National Highway 3 between Mumbai and Nashik in the State of Maharashtra and has been operating and managing the same since May, 2010.

(3) Rajahmundry Godavari Bridge Ltd. (RGBL), the concessionaire for constructing a four lane bridge across the Godavari River, with its approach road on either side, linking Rajahmundry to Kovvur in the State of Andhra Pradesh.

(4) Patna Buxar Highways Ltd. (PBHL), the concessionaire for four laning the Patna to Buxar stretch of National Highway 30 in the State of Bihar.

(5) Vijayawada Gundugolanu Road Project Pvt. Ltd. (VGRPPL), the concessionaire for six laning the Vijayawada to Gundugolanu stretch of National Highway 5, including a four lane bypass to Vijayawada town, in the State of Andhra Pradesh.

(6) Sidhi Singrauli Road Project Ltd. (SSRPL), the concessionaire for four laning the Sidhi to Singrauli section of the National Highway 75E in the State of Madhya Pradesh.

(b) Annuity based projects:

(1) Rajahmundry Expressway Ltd. (REL), the concessionaire which four laned the Rajahmundry - Dharmavaram stretch of National Highway 5 in the State of Andhra Pradesh and has been operating and managing the same since September, 2004.

(2) Andhra Expressway Ltd. (AEL), the concessionaire which four laned the Dharmavaram to Tuni stretch of National Highway 5 in the State of Andhra Pradesh and has been operating and managing the same since October, 2004.

(3) Kosi Bridge Infrastructure Company Ltd. (KBICL), the concessionaire which constructed a four lane bridge across the Kosi River on National Highway 57 in the State of Bihar and has been operating and managing the same since February, 2012.

(4) Gorakhpur Infrastructure Company Ltd. (GICL), the concessionaire which constructed a four lane bypass to Gorakhpur Town on National Highway 28 in the State of Uttar Pradesh and has been operating and managing the same since 31st March, 2012.

(5) Patna Highway Projects Ltd. (PHPL), the concessionaire for four laning the Patna to Muzafarpur stretch of the National Highway 77 including a bypass to the Muzafarpur town in the State of Bihar.

Developments in the Road Sector during the Period

The SPV, Yamunanagar Panchkula Highway Pvt. Ltd. (YPHPL) has entered into an agreement with National Highways Authority of India (NHAI) for cancelling the concession for four laning the Uttar Pradesh/Haryana border to Panchkula stretch of National Highway 73 in the State of Haryana on amicable terms as YPHPL was unable to start construction activities at the project site on account of non-availability of land and certain government approvals. For similar reasons, the SPV, Birmitrapur Barkote Highway Pvt. Ltd. (BBHPL) has entered into an agreement with NHAI for cancelling the concession for the rehabilitation and upgradation of the Birmitrapur – Barkote section of National Highway 23 in the State of Orissa on amicable terms.

SSRPL has achieved financial closure and upon attaining ''appointed date'' has started construction activities.

However, PBHL is in talks with NHAI for terminating the Patna-Buxar concession on amicable terms due to non-availability of land and government approvals.

VGRPPL has not been able to start construction activities at the project due to non-availability of land. Providing required land and other clearances are the responsibility of NHAI and we are in constant touch with them and construction activities shall commence shortly.

RGBL has so far been unable to complete the Godavari bridge project at Rajahmundry on account of unavailability of land due to litigation. Now, these issues have been resolved and we expect to complete the project within six months.

PHPL is in advanced stage of completion but has also not been able to complete the project due to non-availability of land. However, we have applied to NHAI for a completion certificate based on the progress of work on land made available to us and hope to receive the same at the earliest.

The original concession period of CBICL was till April 27, 2014 which was extended by the Government of Kerala (GOK) by six years till April 27, 2020 by its Government Order dated January 24, 2005 because CBICL had not revised the toll rates based on WPI as per the terms of the Concession and other compliance deficiencies on the part of GOK with reference to the Concession Agreement. However, instead of entering into a supplementary agreement to amend the original concession agreement, as promised, the GOK choose to unilaterally cancel its Government Order dated January 24, 2005 by its Government Order dated December 26, 2008. CBICL had referred the issue to arbitration and the Arbitral Tribunal had passed orders permitting CBICL to collect the toll fees as per the Government Order dated January 24, 2005. However, the Greater Cochin Development Authority (GCDA) has on April 27, 2014 (on the last day of the original concession period), without compensating CBICL and in disregard of the Arbitral Tribunal orders, chosen to unilaterally seal the toll booths of CBICL at the Mattancherry Bridge at Kochi. CBICL is exploring all the options including legal and mutual settlement with GOK.

The three SPVs in the Port Sector are:

(1) Vizag Seaport Pvt. Ltd. (VSPL), which constructed two multipurpose berths in the inner harbor of the Visakhapatnam Port, capable of handling upto 9 MTPA, of which the first berth became operational in July, 2004 and the second in September, 2005.

(2) Indira Container Terminal Pvt. Ltd. (ICTPL), the concessionaire for constructing two offshore container berths at the Mumbai harbor.

(3) Mormugao Terminal Ltd. (MTL), the concessionaire for providing mechanized handling facilities for handling coal at one of the berths in the Mormugao Port.

Developments in the Port Sector during the Period

VSPL has been successful in attaining a cargo volume of 4.22 million tons during the nine months period ending December, 2013 despite several operational constraints and severe competition. The dredging of the entrance channel to the inner harbor and the turning circle in the inner harbor by the Port Trust (to -16.10 meters) is expected to be completed by July, 2014. This should enable VSPL to receive Panamax type vessels of higher capacity in its two berths located in the inner harbor by October, 2014 after deepening its berths to the same level. Further, VSPL is increasing its storage capacity by developing the additional land of 30 acres allotted to it by the Port Trust at the EXIM Park. VSPL believes that it can, in the process, enhance its cargo handling capacity to at least 9 million tons per annum.

ICTPL has been unable to complete the offshore container berth projects as the Mumbai Port Trust has not completed dredging of the berth front and its approach. The Port Trust has also not filled up and handed over the areas earmarked for stockyard purposes. Besides, the approval of Central Government for equipment suppliers is pending. The yard filling contract has recently been awarded by the Port Trust.

Certain disputes have arisen between MTL and the Mormugao Port Trust relating to non-compliance of conditions precedents and termination of concession agreement, which have been referred to competent court and your Company, has obtained stay order of termination of the project and invocation of Bank Guarantee.

The five SPVs in the Energy Sector are:

(1) Sikkim Hydro Power Ventures Ltd. (SHPVL), the concessionaire for the 66 MW hydro-electric power project in West Sikkim on the river Rimbhi.

(2) Pravara Renewable Energy Ltd. (PREL), the concessionaire for setting up a 30 MW co-generation power project at Pravaranagar in Ahmednagar District of Maharashtra.

(3) Youngthang Power Ventures Ltd. (YPVL), the concessionaire for setting up a 261 MW power project on the river Spiti in the State of Himachal Pradesh.

(4) Tidong Hydro Power Ltd. (THPL), the concessionaire for setting up a 60 MW hydro-electric project on the Tidong River (tributary of Satluj) in the Kinnaur district of Himachal Pradesh.

(5) Aparna Infraenergy India Pvt. Ltd. (AIIPL) which has the coal linkage for setting up a 250 MW thermal power project in Chandrapur district of Maharashtra.

Developments in the Energy Sector during the Period

Construction activities are in full swing at Pravaranagar and the co-generation power project is scheduled to start trial production by end of August, 2014.The amalgamation petition is pending in the Honorable High Court of Bombay.

YPVL has not been able to proceed with the studies to prepare the Detailed Project Report (DPR) for its project due to opposition of local farmers.

THPL is in the process of conducting geological studies for preparation of DPR. THPL plans to submit the DPR to the Government of Himachal Pradesh for approval by end of December, 2014.

AIIPL has the requisite land and has the water permission as well as all statutory clearances to proceed with its project. However, the coal linkage is now being reviewed by the Coal Ministry for approval of name change. AIIPL expects a positive response from the Ministry in the near future.

Other Sectors

Special Economic Zones

No progress has been achieved in the project to develop the auto-component SEZ over 90 acres of land at Adityapur in the State of Jharkhand. The project has been delayed for want of forest clearance. Your Company is a minority partner in the project.

The Company has decided to withdraw from the multi-purpose ''special economic zone'' project at Tada in Andhra Pradesh in view of the unfavorable business climate for such projects. However, the Company has mutual agreement to receive a total consideration of Rs. 45 crores, out of which we have already received Rs. 16 crores and in the process of receiving the balance amount.

Other Business

In addition to undertaking infrastructure development through SPVs, the Company undertakes operation & maintenance of the five road projects developed by AEL, REL, MNEL, KBICL and GICL.

The Company has also ventured into construction work at the Sidhi-Singrauli project through subcontractors.

THE FUTURE

The Company and its 100% subsidiary Gammon Road Infrastructure Ltd. ("GRIL"), have been qualified to bid for all NHAI projects of an estimated cost not exceeding Rs. 3820 crores approx.

Further, the Company has qualified to bid for five projects in the Ports sector with an estimated total aggregate cost Rs. 5974 crores. It has also qualified for an Energy sector project with an estimated cost of Rs. 1200 crores and an urban infra-project with an estimated cost of Rs. 3235 crores.

There is a gap between the Company''s requirement of funds and its internal accruals. The Company is also facing challenges in its cash position. The ability of the Company to raise external funds has also been affected due to adverse market conditions. However, the Company is actively following up with NHAI for realization of receivables and has also started discussion with potential investors for monetization of its matured assets at the right valuation to ease present and future fund requirements.

Going forward, the Company will focus on selective opportunities which have lower risk and lower investment, which will supplement our existing portfolio. Our focus will be to get our "almost ready" projects commissioned at the earliest and run the operating projects successfully. We are confident that these projects, once completed, will contribute positively to our bottom line and improve our cash position.

EMPLOYEE STOCK OPTION SCHEME

The ''employee stock options'' issued by the Company prior to the initial public offer of equity shares have either lapsed or have been exercised.

However, the Company has, with the members'' approval, issued a fresh tranch of ''employee stock options'' to its executive directors and senior employees during the year. Details of the ''employee stock options'' allotted, as required to be stated in this Report in terms of the SEBI Guidelines is annexed as Annexure 1.

A certificate from the Auditors that the Employee Stock Options Scheme has been implemented by the Company in accordance with the SEBI Guidelines is annexed to this Report as Annexure 2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

The requirements of Section 217 (1) (e) of the Companies Act, 1956, read with Rule 2(A) & 2(B) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

The Company did not earn any foreign exchange during the Period. The Company expended foreign exchange equivalent to Rs. 26,519 on foreign travel during the Period.

SUBSIDIARIES

During the Period, Gammon Renewable Energy Infrastructure Ltd. has changed its name to Gammon Renewable Energy Infrastructure Projects Ltd.

During the Period, Dohan Renewable Energy Pvt. Ltd.(since struck off and dissolved as a defunct company), Ghaggar Renewable Energy Pvt. Ltd., Indori Renewable Energy Pvt. Ltd., Kasavati Renewable Energy Pvt. Ltd. (since struck off and dissolved as a defunct company), Markanda Renewable Energy Pvt. Ltd., Sirsa Renewable Energy Pvt. Ltd., Satluj Renewable Energy Pvt. Ltd., Tangri Renewable Energy Pvt. Ltd. and Yamuna Minor Minerals Pvt. Ltd. have become subsidiaries of the Company following the definition of the term ''subsidiary'' in the Companies Act, 2013 being brought into force, as the Company and its other subsidiaries hold the entire equity stake in these companies.

A statement u/s 212 of the Companies Act, 1956 relating to the subsidiaries is attached to the Balance Sheet of the Company. The Company has not attached the audited accounts of the subsidiaries to the Audited Accounts of the Company. However, the effect of the same has been brought out in the consolidated Audited Accounts of the Company. The annual accounts of the subsidiaries and the related information will be made available to the Company''s and subsidiaries'' investors as and when required by them. These have also been kept for inspection of the investors at the Registered Office of the Company and of the concerned subsidiaries.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217(2A) of the Companies Act, 1956 is annexed to this Report as Annexure 3.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a. the applicable accounting Standards along with proper explanation relating to material departures have been followed by the Company in preparation of the Annual Accounts for the Period;

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

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

d. the annual accounts are prepared on a going concern basis.

BOARD OF DIRECTORS

Mr. Abhijit Rajan, on ceasing to be the Chairman & Managing Director of the Company, is liable to retire by rotation at the 13th Annual General Meeting and has offered himself for re-appointment.

Ms. H. Daruwalla, independent director, is liable to retire by rotation at the 13th Annual General Meeting. It is proposed to appoint her as an independent director of the Company for a consecutive term of five years from the 13th Annual General Meeting of the Company. Ms. Daruwalla has given her consent for her appointment as an independent director of the Company.

BOARD COMMITTEES

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 system and disclosures made in its financial results;

(ii) Shareholders/Investors Grievance Committee to, inter-alia, redress investor complaints;

(iii) Remuneration Committee to approve appointments and remuneration of executive directors;

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

(v) Project Committee to, inter-alia, advice the Company on the business opportunities that arise from time to time; and

(vi) Projects Review Committee to review implementation and working of projects under development and operation.

The constitution of the various committees, its powers and duties have been elaborated in greater detail in the ''Corporate Governance Report'', which is annexed to the Annual Accounts.

REPORT ON CORPORATE GOVERNANCE

Attention of the Shareholders is invited to a separate section titled ''Report on Corporate Governance'' which is annexed to the Annual Accounts. A certificate of compliance issued by Mr. N. Veeraraghavan, a ''practicing company secretary'' on compliance with corporate governance requirements of the Listing Agreement is annexed to this Report as Annexure 4.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the Shareholders is also invited to a separate section titled ''Management Discussion and Analysis Report'' which is annexed to the Annual Accounts.

AUDITORS

The Company''s auditors, M/s. Natvarlal Vepari & Co. and M/s. S. R.Batliboi & Co. LLP retire at the Annual General Meeting and being eligible and willing to be re-appointed as Auditors of the Company, have submitted their certificates to the effect that their re-appointments, if made, will be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

The Board recommends their reappointment.

AUDITORS'' REPORT

The Auditors have in their CARO Report pointed out that the Company has used short term funds to the tune of Rs. 248 crores approx. for investment in long term assets.

The Company proposes to monetize some of its mature assets as well as securitize some of its future receivables and is in active discussions with various lenders for long term debts. The Company will also generate income from internal sources by way of developer fees, contracting income and operation & maintenance income. These funds will be used for achieving an optimal balance between short term funds and long term funds in the business of the Company.

ACKNOWLEDGEMENTS

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



For and on behalf of the Board of,

Gammon Infrastructure Projects Limited



Naresh Chandra Himanshu Parikh K.K.Mohanty

Chairman Vice Chairman Managing Director



Place: Mumbai

Date: May 03, 2014


Mar 31, 2013

To The Shareholders of Gammon Infrastructure Projects Limited

The Directors have pleasure in submitting their twelfth Annual Report together with the Audited Accounts of the Company, for the period 1st April, 2012 to 31st March, 2013 (the "Period").

FINANCIAL HIGHLIGHTS

For a true assessment of your Company''s strength, you are requested to refer to the ‘consolidated accounts'' of the Company as well as the ‘stand-alone accounts''.

As per Consolidated Accounts:

(Rs.in Lakhs) Particulars March 31, 2013 March 31, 2012

Income 69,813.92 42,937.53

Earnings before interest, tax, depreciation and amortisation 47,512.13 22,277.32

Financial costs 29,683.38 15,565.94

Depreciation and amortisation 16,085.22 7,789.92

Tax expenses (739.11) 1,152.56

Minority interest & share of profit of associates 1,010.01 310.71

Net profit 1,472.63 (2,541.81)

As per Standalone Accounts: (Rs. in Lakhs)

Particulars March 31, 2013 March 31, 2012

Income 14,020.44 11,127.97

Earnings before interest, tax, depreciation and amortisation 9,729.77 6,440.29

Financial costs 4,245.90 2,226.51

Depreciation and amortisation 199.27 199.71

Tax expenses 2,241.93 720.06

Net profit 3,042.67 3,294.01

DIVIDEND

With a view to conserve resources for funding the ongoing projects, the Board has not recommended any dividend on equity shares for the Period.

COMPANY''S BUSINESS

Your Company has a basket of thirteen projects in the Road Sector, three in the Port Sector and five in the Energy Sector, which are at various stages of construction and/or operation and management through various SPVs.

The SPVs in the Road Sector are:

(a) Toll based projects:

(1) Cochin Bridge Infrastructure Company Ltd., the SPV which constructed and has been operating and managing the New Mattancherry Bridge connecting Fort Kochi with Willingdon Island in the Cochin Port Trust Area in the State of Kerala since September, 2001.

(2) Mumbai Nasik Expressway Ltd., which four laned and has been operating and managing the Vadape to Gonde stretch of National Highway 3 connecting Mumbai and Nashik in the State of Maharashtra since May, 2010.

(3) Rajahmundry Godavari Bridge Ltd., which is constructing a four lane bridge across the Godavari River, together with the approach roads on both sides, linking Rajahmundry to Kovvur in the State of Andhra Pradesh. Construction is in an advanced stage.

(4) Patna Buxar Highways Ltd., which has signed the concession agreement with the National Highways Authority of India ("NHAI") for four laning the Patna to Buxar stretch of National Highway 30 in the State of Bihar. The debt portion of the project cost has been tied up and resource mobilization at the site has been initiated.

(5) Vijayawada Gundugolanu Road Project Pvt. Ltd., which has signed the concession agreement with NHAI for six laning the Vijayawada to Gundugolanu stretch of National Highway 5, including a four lane bypass to Vijayawada town, in the State of Andhra Pradesh. The debt portion of the project cost has been tied up. However, construction at the site has not commenced as the client has not handed over the project site to the SPV.

(6) Yamunanagar Panchkula Highway Pvt. Ltd., which has signed the concession agreement with NHAI for four laning the Uttar Pradesh/Haryana border to Panchkula stretch of National Highway 73 in the State of Haryana. The debt portion of the project cost has been tied up. However, construction at the site has not commenced as the client has not handed over the project site to the SPV.

(7) Birmitrapur Barkote Highway Pvt. Ltd., which has signed the concession agreement with NHAI for undertaking the rehabilitation and upgradation of the Birmitrapur to Barkote section of National Highway 23 in the State of Orissa. The debt portion of the project cost has been tied up. However, construction at the site has not commenced as the client has not handed over the project site to the SPV.

(8) Sidhi Singrauli Road Project Ltd., which has signed the concession agreement with Madhya Pradesh Road Development Corporation for four laning the Sidhi to Singrauli section of the National Highway 75E in the State of Madhya Pradesh. The debt portion of the project cost has been tied up. However, construction at the site has not commenced as the client has not handed over the project site to the SPV.

(b) Annuity based projects:

(1) Rajahmundry Expressway Ltd., which four laned and has been operating and managing the Rajahmundry to Dharmavaram stretch of National Highway 5 in the State of Andhra Pradesh since September, 2004.

(2) Andhra Expressway Ltd., which four laned and has been operating and managing the Dharmavaram to Tuni stretch of National Highway 5 in the State of Andhra Pradesh since October, 2004.

(3) Kosi Bridge Infrastructure Company Ltd., which has constructed a four lane bridge across the Kosi River on National Highway 57 in the State of Bihar, which received the provisional completion certificate on 8th February, 2012. The project has been in operation since then.

(4) Gorakhpur Infrastructure Company Ltd., which has constructed a four lane bypass to Gorakhpur Town on National Highway 28 in the State of Uttar Pradesh. The project received the provisional completion certificate on 31st March, 2012.

(5) Patna Highway Projects Ltd., which has signed the concession agreement with NHAI for four laning the Patna to Muzafarpur stretch of the National Highway 77 together with a bypass to the Muzafarpur town in the State of Bihar. Construction is in an advanced stage.

The three SPVs in the Port Sector are:

(1) Vizag Seaport Pvt. Ltd., which constructed two multipurpose berths in the inner harbor of the Visakhapatnam Port, capable of handling upto 9 MTPA, of which the first berth became operational in July, 2004 and the second in September, 2005.

(2) Indira Container Terminal Pvt. Ltd, which is constructing two offshore container berths at the Mumbai harbor. Construction is in an advanced stage.

(3) Mormugao Terminal Ltd., which signed a Concession Agreement with the Mormugao Port Trust for providing mechanized handling facilities for handling coal at one of the berths in the Mormugao Port.

Further, the Company has decided not to pursue the project to construct an iron ore berth at Paradip Port on account of the Port Trust''s inability to obtain timely environmental and forest clearances.

The five SPVs in the Energy Sector are:

(1) Sikkim Hydro Power Ventures Ltd., which has started construction activities for the 66 MW hydro-electric power project in West Sikkim on the river Rimbhi, a tributary of river Rangit.

(2) Pravara Renewable Energy Ltd., which has started construction activities for a 30 MW cogeneration power project at Pravaranagar in Ahmednagar District of Maharashtra. The financial closure of the project has been achieved. It is proposed to merge this SPV with the Company.

(3) Youngthang Power Ventures Ltd., which has the license to set up a 261 MW power project on the river Spiti in the State of Himachal Pradesh.

(4) Tidong Hydro Power Ltd., which has the license to set up a 60 MW hydro-electric project on the Tidong River (tributary of Satluj) in the Kinnaur district of Himachal Pradesh.

(5) Aparna Infraenergy India Pvt. Ltd. which is in the process of completing the preliminary requirements for setting up a 250 MW thermal power project in Chandrapur district of Maharashtra.

Other Sectors

Special Economic Zones

No progress has been achieved in the project to develop the auto-component SEZ over 90 acres of land at Adityapur in the State of Jharkhand. The project has been delayed for want of forest clearance. Your Company is a minority partner in the project.

The Company has also decided to go slow on the project to set up a multi-purpose ‘special economic zone'' at Tada in Andhra Pradesh in view of the unfavorable business climate for projects of this nature.

Other Business

In addition to undertaking infrastructure development through SPVs, the Company also undertakes operation & maintenance of the five road projects developed by Andhra Expressway Ltd., Rajahmundry Expressway Ltd., Mumbai Nasik Expressway Ltd., Kosi Bridge Infrastructure Company Ltd. and Gorakhpur Infrastructure Company Ltd.

The Company is also undertaking construction work at the Patna-Buxar and Sidhi-Singrauli projects.

THE FUTURE

The Company and its 100% subsidiary Gammon Road Infrastructure Ltd. ("GRIL"), have been shortlisted to bid for 32 projects across sectors such as roads, ports, power including transmission and urban infra collectively having an estimated project cost of over Rs. 31,663.66 Crores.

Further, the Company and GRIL have submitted pre-qualification applications for 49 projects across various sectors, which have an estimated aggregate project cost of over Rs. 51,281.88 Crores. Results are awaited for these pre-qualification applications.

Going forward the Company will focus on selective opportunities which have lower risk, lower investment and which will supplement our existing portfolio.

EQUITY CAPITAL

The paid up capital of the Company has increased from Rs. 1,465,629,736 to Rs.1,476,155,376 during the Period, mainly on account of allotment of bonus shares in the ratio of 1:34 to the existing shareholders of the Company other than the Promoters. The bonus issue was made to comply with SEBI''s stipulation that public holding in listed companies should be at least 25%.

The Company has not been able to make the rights issue of shares in view of the unfavorable investment climate for infrastructure securities.

EMPLOYEE STOCK OPTION SCHEME

Details of the ‘employee stock options'' already issued by the Company, required to be stated in this Report as per SEBI Guidelines is annexed to this Report as Annexure 1. A certificate from the Auditors that the Employee Stock Options Scheme has been implemented by the Company in accordance with the SEBI Guidelines is annexed to this Report as Annexure 2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

The requirements of Section 217 (1) (e) of the Companies Act, 1956, read with Rule 2(A) & 2(B) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

The Company did not earn any foreign exchange during the Period. The Company expended foreign exchange equivalent to just over Rs.10.87 lakhs during the Period.

SUBSIDIARIES

During the Period, the Company incorporated four subsidiaries, namely, Birmitrapur Barkote Highway Pvt. Ltd., Yamunanagar Panchkula Highway Pvt. Ltd., Sidhi Singrauli Road Project Ltd., and Mormugao Terminal Ltd.

A statement u/s 212 of the Companies Act, 1956 relating to the subsidiaries is attached to the Balance Sheet of the Company. The Company has not attached the audited accounts of the subsidiaries to the Audited Accounts of the Company. However, the effect of the same has been brought out in the consolidated Audited Accounts of the Company. The annual accounts of the subsidiaries and the related information will be made available to the Company''s and subsidiaries'' investors as and when required by them. These have also been kept for inspection of the investors at the Registered Office of the Company and of the concerned subsidiaries.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217(2A) of the Companies Act, 1956 is annexed to this Report as Annexure 3.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a. the applicable accounting Standards along with proper explanation relating to material departures have been followed by the Company in preparation of the Annual Accounts for the Period;

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

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

d. the annual accounts are prepared on a going concern basis.

BOARD OF DIRECTORS

As per Article 169 of the Articles of Association of your Company, Mr. Himanshu Parikh and Mr. Parag Parikh are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Mr. Sanjay Sachdev, Mr. Kunal Shroff and Mr. Rajeevkumar Malhotra have resigned from the Board since the last Annual General Meeting.

BOARD COMMITTEES

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 system and disclosures made in its financial results;

(ii) Shareholders/Investors Grievance Committee to, inter-alia, redress investor complaints;

(iii) Remuneration Committee to approve appointments and remuneration of executive directors;

(iv) Compensation Committee to administer the ‘Employee Stock Option Scheme'';

(v) Project Committee to, inter-alia, advice the Company on the business opportunities that arise from time to time; and

(vi) Projects Review Committee to review implementation and working of projects under development and operation.

The constitution of the various committees, its powers and duties have been elaborated in greater detail in the ‘Corporate Governance Report'', which is annexed to the Annual Accounts.

REPORT ON CORPORATE GOVERNANCE

Attention of the Shareholders is invited to a separate section titled ‘Report on Corporate Governance'' which is annexed to the Annual Accounts. A certificate of compliance issued by Mr. N. Veeraraghavan, a ‘practicing company secretary'' on compliance with corporate governance requirements of the Listing Agreement is annexed to this Report as Annexure 4.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the Shareholders is also invited to a separate section titled ‘Management Discussion and Analysis Report'' which is annexed to the Annual Accounts.

PUBLIC DEPOSITS

Your Company has not accepted deposits under Section 58A of the Companies Act, 1956.

AUDITORS

The Company''s auditors, M/s. Natvarlal Vepari & Co. and M/s. S. R.Batliboi & Co. LLP retire at the Annual General Meeting and being eligible and willing to be re-appointed as Auditors of the Company, have submitted their certificates to the effect that their re-appointments, if made, will be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

The Board recommends their reappointment.

AUDITORS'' REPORT

The Auditors have in their CARO Report pointed out that the Company has used short term funds to the tune of Rs. 203 crores approx. for investment in long term assets. This was purely an interim measure as the Company is actively pursuing measures to raise long term resources by way of securitization of cash flows of some of the SPVs and sale, part sale of some of the completed projects.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of,

Gammon Infrastructure Projects Limited

Abhijit Rajan Himanshu Parikh

K.K.Mohanty

Chairman & Managing Director

Vice Chairman Managing Director

Place: Mumbai

Date: August 09, 2013


Mar 31, 2012

To The Shareholders of Gammon Infrastructure Projects Limited

The Directors have pleasure in submitting their eleventh Annual Report together with the Audited Accounts of the Company, for the period April 1, 2011 to March 31, 2012 (the "Period").

FINANCIAL HIGHLIGHTS

For a true assessment of your Company's strength, you are requested to refer to the 'consolidated accounts' of the Company rather than the 'stand alone accounts'; Both of which are contained in this Annual Report.

As per Consolidated Accounts: (Rs. in Lakhs)

Particulars March 31, 2012 March 31, 2011

Income 42,937.53 34,589.89

Earnings before interest, tax, depreciation 22,277.32 21,301.43 and amortisation

Financial costs 15,565.94 10,090.46

Depreciation and amortisation 7,789.92 8,587.93

Tax expenses 1,152.56 462.51

Minority interest & share of profit of 310.71 429.41 associates

Net profit (2,541.81) 1,716.86

As per Standalone Accounts: (Rs. in Lakhs)

Particulars March 31, 2012 March 31, 2011

Income 1,112.79 9,115.83

Earnings before interest, tax, depreciation 6,440.29 5,776.00 and amortisation

Financial costs 2,226.51 985.10

Depreciation and amortisation 199.71 198.40

Tax expenses 720.06 1,019.48

Net profit 3,294.01 3,573.02

DIVIDEND

In view of the net loss at the consolidated level and the unfavorable market conditions for raising long term financial resources to meet the investment needs of the Company in the existing and newer projects, the Directors have decided not to recommend any dividend for the Period.

COMPANY'S BUSINESS

Your Company is an infrastructure developer on public-private participation basis ("PPP Basis"). The business of infrastructure development on PPP Basis generally entails setting up special purpose vehicles ("SPVs") which would construct the infrastructure projects being privatized by the Government or Government / Semi-Government agencies ("Authority") and operate and manage the same during the concession/license period and finally at the end of such period transfer the project to the Authority as a running project.

The Company has a basket of fourteen projects in the Road Sector, three in the Port Sector and five in the Energy Sector, which are at various stages of being constructed, operated and managed through various SPVs.

The SPVs in the Road Sector are: (a) Toll based projects:

(1) Cochin Bridge Infrastructure Company Ltd., the SPV which constructed and been operating the New Mattancherry Bridge connecting Fort Kochi with Willingdon Island in the Cochin Port Trust Area in the State of Kerala since September, 2001.

(2) Mumbai Nasik Expressway Ltd., which four laned and been operating the Vadape to Gonde stretch of National Highway 3 connecting Mumbai and Nashik in the State of Maharashtra since May, 2011.

(3) Rajahmundry Godavari Bridge Ltd., which is constructing a four lane bridge across the Godavari River linking Rajahmundry to Kovvur in the State of Andhra Pradesh. Construction activity is in full swing at the project site.

(4) Patna Buxar Highways Ltd., which is four laning the Patna to Buxar stretch of National Highway 30 in the State of Bihar. The debt portion of the project cost has already been underwritten.

(5) Vijayawada Gundugolanu Road Project Pvt. Ltd., which is six laning (except for the four lane Greenfield Vijayawada Bypass) the Vijayawada to Gundugolanu stretch of National Highway 5 in the State of Andhra Pradesh. The debt portion of the project cost has already been underwritten. The Company has received the approval of National Highways Authority of India ("NHAI") for divesting upto 49% equity in this SPV to Simplex Infrastructures Ltd.

(6) Yamunanagar Panchkula Highway Pvt. Ltd., which is four laning the Uttar Pradesh/Haryana border to Panchkula stretch of National Highway 73 in the State of Haryana.

(7) Birmitrapur Barkote Highway Pvt. Ltd., which is undertaking the rehabilitation and upgradation of the Birmitrapur to Barkote section of National Highway 23 in the State of Orissa.

(8) Sidhi Singrauli Road Project Ltd., which is four laning the Sidhi to Singrauli section of the National Highway 75E in the State of Madhya Pradesh.

(9) Maa Durga Expressways Pvt. Ltd., which is four laning the Mahulia to Kharagpur section of the National Highway 6 in the States of Jharkhand & West Bengal. NHAI has approved 49% equity participation of the Company in this SPV promoted by Simplex Infrastructures Ltd.

(b) Annuity based projects:

(1) Rajahmundry Expressway Ltd., which four laned and been operating the Rajahmundry to Dharmavaram stretch of National Highway 5 in the State of Andhra Pradesh since September, 2004.

(2) Andhra Expressway Ltd., which four laned and been operating the Dharmavaram to Tuni stretch of National Highway 5 in the State of Andhra Pradesh since OCTober, 2004.

(3) Kosi Bridge Infrastructure Company Ltd., which has constructed a four lane bridge across the Kosi River on National Highway 57 in the State of Bihar, which received the provisional completion certificate in February, 2012. The project has been in operation since then.

(4) Gorakhpur Infrastructure Company Ltd., which has constructed a four lane bypass to Gorakhpur Town on National Highway 28 in the State of Uttar Pradesh. The project is expected to receive the provisional completion certificate in the near future.

(5) Patna Highway Projects Ltd., which is four laning the Patna to Muzafarpur stretch of the National Highway 77 and constructing a bypass to the Muzafarpur town in the State of Bihar. Construction is in full swing at the project site.

The three SPVs in the Port Sector are:

(1) Vizag Seaport Pvt. Ltd., which constructed two multipurpose berths in the inner harbor of the Visakhapatnam Port, capable of handling upto 9 MMTPA, of which the first berth became operational in July, 2004 and the second in September, 2005.

(2) Indira Container Terminal Pvt. Ltd, which is constructing two offshore container berths at the Mumbai harbor. Construction is in full swing at the project site.

(3) Blue Water Iron Ore Terminal Pvt. Ltd., which signed a Concession Agreement with the Paradip Port Trust (PPT) for developing a deep draught iron ore berth at Paradip Port. Your Company is a minority partner in the project. The project has suffered inordinate delay on account of late receipt of the requisite forest clearance from the concerned Government department. Your Directors' feel that the project is not viable on the current financial terms and is in touch with PPT on the issue.

The five SPVs in the Energy Sector are:

(1) Sikkim Hydro Power Ventures Ltd., which has started construction activities for the 66 MW hydro electric project in West Sikkim on the river Rimbhikhola, a tributary of river Rangit.

(2) Pravara Renewable Energy Ltd., which has started construction activities for a 30 MW cogeneration power project at Pravaranagar in Ahmednagar District of Maharashtra.

(3) Youngthang Power Ventures Ltd., which is currently in the process of preparing the 'detailed project report' for a 261 MW power project on the river Spiti in the State of Himachal Pradesh.

(4) Tidong Hydro Power Ltd., which has signed an agreement with the State Government of Himachal Pradesh for setting up a 60 MW hydro electric project on the Tidong River (tributary of Satluj) in the Kinnaur district of Himachal Pradesh.

(5) Aparna Infraenergy India Pvt. Ltd. which is in the process of completing the preliminary requirements for setting up a 250 MW thermal power project in Chandrapur district of Maharashtra.

The Board has, however, decided not to pursue the projects to set up seven biomass power projects in Haryana and Punjab with an aggregate capacity to generate 66MW power.

OTHER SECTORS Special Economic Zones The SPVs are:

(1) SEZ Adityapur Ltd., which has entered into an agreement with Adityapur Industrial Area Development Authority for developing an auto-component SEZ over 90 acres of land at Adityapur in the State of Jharkhand. The project has been unduly delayed for want of forest clearance. Your Company is a minority partner in the project.

(2) The Company has, through its subsidiaries and associates, also signed agreements for purchase of 801.76 acres of land at Tada in the State of Andhra Pradesh to set up a multi-purpose 'special economic zone'.

OTHER BUSINESS

In addition to undertaking infrastructure development through SPVs, the Company also undertakes operation & maintenance of the five road projects developed by Andhra Expressway Ltd., Rajahmundry Expressway Ltd. Mumbai Nasik Expressway Ltd., Kosi Bridge Infrastructure Company Ltd. and Gorakhpur Infrastructure Company Ltd.

WHAT LIES AHEAD

In view of the difficult investment and credit market conditions, the Company's focus in the immediate future will be on achieving financial closure of the remaining four road projects, the co-generation project in Maharashtra and the hydro-electric project in Sikkim.

The Company and its 100% subsidiary Gammon Road Infrastructure Ltd. ("GRIL"), have been shortlisted to bid for 30 projects across sectors such as roads, ports, power including transmission and urban infra collectively having an estimated project cost of over rupees One Lakh crores.

Further, the Company and GRIL have submitted pre-qualification applications for 52 projects across various sectors, which have an estimated aggregate project cost of over rupees sixty eight thousand crores.

EQUITY CAPITAL

The paid up capital of the Company has increased from Rs. 1,465,582,824 to Rs. 1,465,629,736 during the Period on account of allotment of 23,456 equity shares of the Company to an employee who exercised the right to apply for shares attached to the stock options.

The Company has received the final observation letter of the Securities and Exchange Board of India for its intended rights issue of shares to raise about Rs. 200 crores and shall await a suitable investment climate for coming out with the issue.

EMPLOYEE STOCK OPTION SCHEME

Details of the 'employee stock options' already issued by the Company, required to be stated in this Report as per SEBI Guidelines is annexed to this Report as Annexure

1. Conservation of energy, technology absorption, foreign exchange earnings and outgo.

The requirements of Section 217 (1) (e) of the Companies Act, 1956, read with Rule 2(A) & 2(B) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

The Company did not earn any foreign exchange during the Period. The Company expended foreign exchange equivalent to just over Rs. 9.35 lakhs during the Period.

SUBSIDIARIES

During the Period, the Company incorporated two SPVs, Patna Buxar Highways Ltd. and Vijayawada Gundugolanu Road Project Pvt. Ltd. for implementing two road projects as outlined hereinabove as hundred percent subsidiaries. The Company also registered the partnership firm Aparna Infraenergy India as a limited liability company under chapter ix of the Companies Act, 1956 in the name of Aparna Infraenergy India Pvt. Ltd.

Further, during the Period, the name of Chitoor Infrastructure Projects Pvt. Ltd. (formerly Satyavedu Infra Company Pvt. Ltd.) was changed to Earthlink Infrastructure Projects Pvt. Ltd. and the name of Tada Infrastructure Projects Pvt. Ltd. (formerly Tada SEZ Pvt. Ltd.) was changed to Segue Infrastructure Projects Pvt. Ltd. Haryana Biomass Power Ltd. has become a subsidiary of the Company consequent to the buy-out of the erstwhile partner.

There are no other changes in the subsidiaries of the Company. A statement u/s 212 of the Companies Act, 1956 relating to the subsidiaries is attached to the Balance Sheet of the Company. The Company has not attached the audited accounts of the subsidiaries to the Audited Accounts of the Company. However, the effect of the same has been brought out in the consolidated Audited Accounts of the Company. The annual accounts of the subsidiaries and the related information will be made available to the Company's and subsidiaries' investors as and when required by them. These have also been kept for inspection of the investors at the Registered Office of the Company and of the concerned subsidiaries.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217(2A) of the Companies Act, 1956 is annexed to this Report as Annexure 2.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a. the applicable accounting Standards along with proper explanation relating to material departures have been followed by the Company in preparation of the Annual Accounts for the Period;

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

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

d. the annual accounts are prepared on a going concern basis.

BOARD OF DIRECTORS

As per Article 169 of the Articles of Association of your Company, Mr. C.C.Dayal, Mr. Naresh Chandra and Mr. Sushil Chandra Tripathi are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Ms. Homai A. Daruwalla, joined the Board on November 11, 2011 as an additional director and is due for appointment as a director liable to retire by rotation at the ensuing Annual General Meeting.

BOARD COMMITTEES

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 system and disclosures made in its financial results;

(ii) Shareholders/ Investors Grievance Committee to, inter-alia, redress investor complaints;

(iii) Remuneration Committee to approve appointments and remuneration of executive directors;

(iv) Compensation Committee to administer the 'Employee Stock Option Scheme';

(v) Project Committee to, inter-alia, advice the Company on the business opportunities that arise from time to time; and

(vi) Rights Issue Committee to oversee the rights issue of shares of the Company.

The constitution of the various committees, its powers and duties have been elaborated in greater detail in the 'Corporate Governance Report', which is annexed to the Annual Accounts.

REPORT ON CORPORATE GOVERNANCE

Attention of the Shareholders is invited to a separate section titled 'Report on Corporate Governance' which is annexed to the Annual Accounts. A certificate of compliance issued by Mr. N. Veeraraghavan, a 'practicing company secretary' on compliance with corporate governance requirements of the Listing Agreement is annexed to this Report as Annexure 3.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the Shareholders is also invited to a separate section titled 'Management Discussion and Analysis Report' which is annexed to the Annual Accounts.

PUBLIC DEPOSITS

Your Company has not accepted deposits under Section 58A of the Companies Act, 1956.

AUDITORS

The Company's auditors, M/s. Natvarlal Vepari & Co. and M/s. S. R.Batliboi& Co. retire at the Annual General Meeting and being willing and eligible to be re-appointed as Auditors of the Company, have submitted their certificates to the effect that their re-appointments, if made, will be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956.

The Board recommends their reappointment.

AUDITORS' REPORT

Regarding the Auditors' observation in their report pursuant to the Companies (Auditor's Report) Order (CARO), 2003 that short term funds have been used for long term investments, the Board states that short term funds have been used for meeting equity commitments in the SPVs in line with the progress of the concerned projects as laid down in the concerned concession agreements and term loan agreements and is only an interim measure pending raising of long term resources by way of long term loans, sale of equity stake in one or more of the projects and the proposed right issue of shares for which final observations of SEBI was received recently.

The other observations of the Auditors are self-explanatory or have been clarified and explained in the relevant Notes forming part of the Annual Accounts and do not need further clarifications.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of,

Gammon Infrastructure Projects Limited

Abhijit Rajan

Chairman & Managing Director

Himanshu Parikh

Vice Chairman

K.K.Mohanty

Managing Director

Place : Mumbai

Date : August 10, 2012


Mar 31, 2011

The Shareholders of

Gammon Infrastructure Projects Limited

The Directors have pleasure in submitting their tenth Annual Report together with the Audited Accounts of the Company, for the period April 1, 2010 March 31, 2011 (the "Period").

FINANCIAL HIGHLIGHTS

For a true assessment of your Company's strength, you are requested to refer to the 'consolidated accounts' of the Company rather than the 'stand alone accounts'; both of which are contained in this Annual Report.

As per Consolidated Accounts:

(Rs. in Lakhs)

Particulars March 31, 2011 March 31,2010

Incorne 34.589.89 33,949.78

Profit before Interest, Depreciation / amortisation and Taxation 21,301.43 15,017.53

Financial Costs 10,090.46 5,745.42

Depreciation and Amortisation 8,587.93 5,063.50

Tax Expense 462.51 1,050.63

Prior Period - 166.54

Minority Interest & share of (profit)/ loss from associates 429.41 429.18

Net Profit 1,716.86 2,562.27

Cash Profit (Net Profit Depreciation) 11,978.99 7,625.77

As per Standalone Accounts:

(Rs. in Lakhs)

Particulars March 31, 2011 March 31,2010

Income 9,115.83 12,291.68

Profit before Interest, Depreciation/ amortisation and Taxation 5,885.39 2,357.69

Financial Cost 1,019.55 112.64

Depreciation and Amortisation 198.40 198.91

Tax Expense 1,019.55 645.73

Net Profit 3,573.02 1,400.41

Cash Profit (Net Profits Depreciation) 3,771.42 1,599.32

DIVIDEND

In view of the unfavorable monetary situation for infrastructure companies and with a view to conserve resources for further investments in projects under implementation and new projects, the Directors have decided not to recommend any Dividend for the Period.

COMPANY'S PROJECTS

The Company has a basket of eight projects in the Road Sector, three in the Port Sector and three in the Energy Sector, which are under operation/active development by or through special purpose vehicles ("SPVs").

Of the eight projects in the Road Sector:

(a) Three are toll based projects, namely:

- New Mattancherry Bridge project developed by an SPV, Cochin Bridge Infrastructure Company Ltd., which has been in operation since September, 2001.

- Vadape-Gonde project under development by an SPV, Mumbai Nasik Expressway Ltd., in operation partly since end May, 2010 and has completed the entire highway stretch from Vadape to Gonde by end May, 2011.

- Godavari Bridge project under development by an SPV, Rajahmundry Godavari Bridge Ltd., is presently in construction stage.

(b) Five are annuity based projects, namely:

- Rajahmundry-Dharmavaram road project developed by an SPV, Rajahmundry Expressway Ltd., which achieved commercial operations in September, 2004.

- Dharmavaram-Tuni road project developed by an SPV, Andhra Expressway Ltd., which achieved commercial operations in October, 2004.

- Kosi Bridge project under development by an SPV, Kosi Bridge Infrastructure Company Ltd., is presently in construction stage.

- Gorakhpur Bypass project under development by an SPV, Gorakhpur Infrastructure Company Ltd., is presently in construction stage.

- Patna-Muzafarpur project under development by an SPV, Patna Highway Projects Ltd., is presently in construction stage.

The Company is undertaking operation & maintenance in all the three road projects in operation; viz. the Rajahmundry-Dharmavaram road project, the Dharmavaram-Tuni road project and the Vadape-Gonde road project.

The three projects in the Port Sector are:

- Visakhapatnam Port project, a project to develop two berths at Visakhapatnam Port,

implemented by an SPV, Vizag Seaport Pvt. Ltd., of which the first berth became operational in July, 2004 and the second in September, 2005.

- Mumbai Offshore Container Terminal, under development by an SPV, Indira Container Terminal Pvt. Ltd, is presently in the construction stage.

- Paradip Iron Ore Berth project, under development by an SPV, Blue Water Iron Ore Terminal Pvt. Ltd. The project achieved financial closure recently.

The three projects in the Energy Sector are:

- 66 MW Rangit II hydroelectric power project under development by an SPV, Sikkim Hydro Power Ventures Ltd., which is now in the process of finalizing the construction contractor.

- 30 MW Pravara cogeneration power project under development by an SPV, Pravara Renewable Energy Ltd.

- 261 MW Youngthangkhab hydroelectric project under development by an SPV, Youngthang Power Ventures Ltd.

Recently, after the Period undRs.r report, the Company has sold its 50% stake in the 12MW operational biomass power plant of Punjab Biomass Power Ltd. at Ghanour to its joint venture partner for a cash consideration. Further, the Company has sold its 50% stake in seven other biomass power projects in Punjab to its joint venture partner and has in turn bought an additional 50% stake in six biomass power projects in Haryana and one in Punjab from the joint venture partner. As a result, the Company will have 100% slake in biomass projects to generate 66MW power.

Besides the above named projects under operation/active development, the Company also has two other power projects under its umbrella; |i) the 60 MW Tidong r II hydroelectric power project in Himachal Pradesh, the award of which has recently been upheld by the Supreme Court; and (ii| a 250 MW thermal power project in Chandrapur district of Maharashtra, for which the required land is being acquired.

The other projects

The Company is also participating in the development of two special economic zones [SEZ] in India; (i) an auto-component SEZ over 90 acres of land at Adityapur, Jharkhand, for which forest clearance is pending and (ii) a multi-purpose SEZ at Tada in Andhra Pradesh for which necessary land is being acquired.

We request you to refer to the 'Management Discussion and Analysis Report' annexed to this Report for details of the operational performance of the SPVs.

WHAT LIES AHEAD

The Company expects to achieve financial closure for Pravara co-generation power project and Rangit II hydroelectric power project in the next financial year.

The Company has been shortlisted to bid for 40 Projects across sectors such as roads, ports, power, transmission, urban infra etc. collectively having an estimated project cost Rs. 52,000 crores. In addition to this, the Company has submitted pre-qualification applications for 70 projects, across various sectors, which have an estimated aggregate project cost of Rs. 67,000 crores. The Company is also exploring various opportunities in some other emerging economies to establish its footprint overseas.

EQUITY CAPITAL

The paid up capital of the Company has increased from Rs. 1,448,879,500/- to Rs. 1,457,480,324/- during the Period on account of allotment of equity shares to the employees who exercised their rights attached to stock options.

The Company intends to raise about Rs. 200 crores by way of a rights issue of shares to raise additional resources to fulfill its equity commitment to various projects under implementation.

EMPLOYEE STOCK OPTION SCHEME

Details of the 'employee stock options' already issued by the Company, required to be stated in this Report as per SEBI Guidelines is annexed to this Report as Annexure 1.

PARTICULARS UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988

(A) Conservation of Energy

The disclosure required under the said heading is not applicable to your Company.

(B) Technology Absorption

The disclosure required under the said heading is not applicable to your Company.

(C) Foreign Exchange Earnings & Outgo

The Company did not earn any foreign exchange during the Period. The Company expended foreign exchange equivalent to Rs. 26.7 Lakhs during the Period.

SUBSIDIARIES

Andhra Expressway Ltd., Cochin Bridge Infrastructure Company Ltd., Gammon Logistics Ltd., Gammon Projects Developers Ltd., Gammon Renewable Energy Infrastructure Ltd., Gammon Road Infrastructure Ltd., Gammon Seaport Infrastructure Ltd., Gorakhpur Infrastructure Company Ltd., Jaguar Projects Developers Ltd., Kosi Bridge Infrastructure Company Ltd., Marine Projects Services Ltd., Mumbai Nasik Expressway Ltd., Pataliputra Highway Ltd., Patna Highway Projects Ltd., Pravara

Renewable Energy Ltd., Rajahmundry Expressway Ltd., Rajahmundry Godavari Bridge Ltd., Ras Cities and Townships Pvt. Ltd., Sikkim Hydro Power Ventures Ltd., Tada Infra Development Company Ltd., Tidong Hydro Power Ltd., Vizag Seaport Pvt. Ltd. and Youngthang Power Ventures Ltd. remain subsidiaries of the Company.

Lilac Infraprojects Developers Ltd., Chitoor Infra Company Pvt. Ltd., Chitoor Infrastructure Projects Pvt. Ltd. (formerly Satyavedu Infra Company Pvt. Ltd.) and Tada Infrastructure Projects Pvt. Ltd. (formerlyTatla SEZ Pvt. Ltd.) were incorporated / have become subsidiaries of the Company during the Period.

A statement u/s 212 of the Companies Act, 1956 relating to the subsidiaries is attached to the Balance Sheet of the Company for the Period. The Company has not attached the audited accounts of the subsidiaries to the Audited Accounts of the Company for the Period. However, the effect of the same has been brought out in the consolidated Audited Accounts of the Company. The annual accounts of the subsidiaries and the related information will be made available to the Company's and subsidiaries' investors at any point of time. These have also been kept for inspection of the investors at the Registered Office of the Company and of the concerned subsidiaries.

PARTICULARS OF EMPLOYEES

Particulars of employees required under Section 217(2A) of the Companies Act, 1956 is annexed to this Report as Annexure 2.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

a) The applicable Accounting Standards along with proper explanation relating to material departures have been followed by the Company in preparation of the Annual Accounts for the Period;

b) that the Directors have selected accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Period and of the profits of the Company for the Period;

cj that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) that the annual accounts are prepared on a going concern basis.

BOARD OF DIRECTORS

As per Article 169 of the Articles of Association of your Company, Mr. Himanshu Parikh and Mr. Sanjay Sachdev are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment. Your Directors recommend their re- appointment.

Mr. Rajeevkumar Malhotra joined the Board on February 11, 2011 and has been made a 'Whole-Time Director' of the Company with effect from April 1, 2011. Mr. Kishor Kumar Mohanty joined the Board on April 12, 2011 as Managing Director of the Company. Mr. Kunal Shroff joined the Board on April 12, 2011. Your Directors recommend their appointment on the Board.

BOARD COMMITTEES

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 system and disclosures made in its financial results;

ii] Shareholders/Investors Grievance Committee to, inter-alia, redress investor complaints;

iii] Remuneration Committee to approve appointments and remuneration of Executive Directors;

iv) Compensation Committee to administer the 'Employee Stock Option Scheme';

v) Project Committee to, inter-alia, advice the Company on the business opportunities that arise from time to time; and

vi] Rights Issue Committee to oversee the rights issue of shares of the Company.

The constitution of the various committees, its powers and duties have been elaborated in greater detail in the 'Corporate Governance Report', which is annexed to the Annual Accounts.

REPORT ON CORPORATE GOVERNANCE

Attention of the Shareholders is invited to a separate section titled 'Report on Corporate Governance' which is annexed to the Annual Accounts. A certificate of compliance issued by Mr. N. Veeraraghavan, a 'practicing company secretary' on compliance with corporate governance requirements of the Listing Agreement is annexed to this Report as Annexure 3.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Attention of the Shareholders is also invited to a separate section titled 'Management Discussion and Analysis Report' which is annexed to the Annual Accounts.

PUBLIC DEPOSITS

Your Company has not accepted deposits under Section 58A of the Companies Act, 1956.

AUDITORS

The Company's auditors, M/s. Natvarlal Vepari & Co. and M/s. S. R. Batliboi & Co. retire at the Annual General Meeting and being willing and eligible to be re-appointed as Auditors of the Company, have submitted their certificates to the effect that their re-appointments, if made, would be within the limits prescribed under Section 224 (1B] of the Companies Act, 1956.

The Board recommends their reappointment.

AUDITORS" REPORT

Regardirig the Auditors' observation in their report pursuant to the Companies (Auditor's Report) Order (CARO), 2003 that short term funds amounting to Rs. 5,746.4-8 Lakhs have been used for long term investments, the Board states that short term funds have been used for meeting equity commitments only as an interim measure pending raising of long term resources byway of long term loans, sale of equity stake in one or more of the projects and right issue of shares to shareholders.

The other observations of the Auditors are self explanatory or have been clarified and explained in the relevant Notes forming part of the Annual Accounts and do not need further clarifications.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of,

Gammon Infrastructure Projects Limited

Abhijit Rajan Himanshu Parikh K.K.Mohanty

Chairman & Vice Chairman Managing Director

Managing Director

Place: Mumbai

Date: August 11,2011

 
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