GAMMON INDIA LIMITED

for compulsory dematerialised trading, investors, other than institutional investors, are permitted to trade in physical
shares on transactions outside the stock exchange where there are no requirements for reporting such transactions to
the stock exchange and on transactions on the stock exchange involving lots of less than 500 securities.
Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish
accounts with depository participants registered with the depositories established under the Depositories Act.
Charges for opening an account with a depository participant, transaction charges for each trade and custodian
charges for securities held in each account vary depending upon the practice of each Depository Participant and have
to be borne by the accountholder. Upon delivery, the shares shall be registered in the name of the relevant depository
on the company’s books and this depository shall enter the name of the investor in its records as the beneficial
owner. The transfer of beneficial ownership shall be affected through the records of the depository. The beneficial
owner shall be entitled to all rights and benefits and be subject to all liabilities in respect of his/her securities held by
a depository.
The Companies Act compulsorily provides that Indian companies making any initial public offerings of securities
for or in excess of Rs.100 million should issue the securities in dematerialised form in accordance with the
provisions of the Depositories Act and the regulations made thereunder.
Derivatives (Futures and Options)
Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in February
2000 and derivative contracts were included within the term “securities”, as defined by the SCRA. Trading in
derivatives in India takes place either on separate and independent derivatives exchanges or on a separate segment of
an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self
regulatory organization under the supervision of SEBI. Derivatives products were introduced in phases in India,
starting with futures contracts in June 2000 and index options, stock options and stock futures in June 2001, July
2001 and November 2001, respectively.
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