GAMMON INDIA LIMITED
GAMMON INDIA LIMITED
GAMMON INDIA LIMITED
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Compliance with, and changes in, safety, health and environmental and labor laws and regulations may<br />
adversely affect our business, financial condition and results of operations.<br />
Some of our project operations are subject to environmental laws and regulations including the<br />
Environmental Protection Act 1986, the Air (Prevention and Control of Pollution) Act 1981, the Water<br />
(Prevention and Control of Pollution) Act 1974 and other regulations promulgated by the Ministry of<br />
Environment and the Pollution Control Boards (PCBs) of the relevant states. We are also required to<br />
comply with labor laws, such as Workmen Compensation Act, Contract Labor (Regulation and Abolition)<br />
Act, and other related regulations. In addition, some of our operations are subject to risks involving personal<br />
injury, loss of life, environmental damage and severe damage to property.<br />
We believe environmental and labor regulation of industrial activities in India will become more stringent<br />
in the future. The scope and extent of new environmental and labor regulations, including their effect on our<br />
operations, cannot be predicted with certainty. The costs and management time required to comply with<br />
these requirements could be significant. The measures we implement in order to comply with these new<br />
laws and regulations may not be deemed sufficient by governmental authorities and our compliance costs<br />
may significantly exceed our estimates. If we fail to meet environmental and labor requirements, we may<br />
also be subject to administrative, civil and criminal proceedings by governmental authorities, as well as<br />
civil proceedings by environmental groups and other individuals, which could result in substantial fines and<br />
penalties against us as well as orders that could limit or halt our operations.<br />
There can be no assurance that we will not become involved in future litigation or other proceedings or be<br />
held responsible in any such future litigation or proceedings relating to safety, health and environmental and<br />
labor matters in the future, the costs of which could be material. Clean-up and remedial costs, as well as<br />
damages, other liabilities and related litigation, could adversely affect our business, financial condition and<br />
results of operations.<br />
Changes in technology may render our current technologies obsolete or require us to make substantial<br />
capital investments.<br />
Although we attempt to maintain the latest international technology standards, the technology requirements<br />
for businesses in the industries that we operate are subject to continuing change and development. Some of<br />
our existing technologies and processes may become obsolete, performing less efficiently compared to<br />
newer and better technologies and processes in the future. The cost of upgrading or implementing new<br />
technologies, upgrading our existing equipment or expanding our capacity could be significant and could<br />
adversely affect our results of operations.<br />
SEBI has in past prohibited us from accessing the capital markets, directly or indirectly.<br />
SEBI had by its order dated December 21, 2006, prohibited the Company, our chairman and managing<br />
Director and three other companies from accessing the capital markets, directly or indirectly for a period of<br />
one year from the date of the order. Further, in terms of the order, the Company, and two others companies<br />
are also prohibited from divesting, transferring, selling or alienating in any way their shareholding in GIPL<br />
for a period of three years from March 27, 2008.<br />
Further, the restriction on our Company in relation to divestment, transfer or sale of its entire shareholding<br />
in GIPL until March 26, 2011 may restrict our ability to raise financing through a pledge or sale of this<br />
shareholding.<br />
We may not maintain historical dividends in the future.<br />
While we have paid dividends in the past, there can be no assurance as to whether we will pay dividends in<br />
the future and, if so, the level of such future dividends. Our declaration, payment and amount of any future<br />
dividends is subject to the discretion of the Board, and will depend upon, among other factors, our earnings,<br />
financial position, cash requirements and availability of profits, as well as the provisions of relevant laws in<br />
India from time to time.<br />
We have a number of contingent liabilities and our profitability could be adversely affected if any of<br />
these contingent liabilities materializes.<br />
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