Annual Report 2006-2007 - Gammon India

GAMMON INDIA LIMITED
MNEL:
The Secured Loan together with all upfront fee, interest, further interest, additional interest, liquidated damages, premium on pre
payment, costs, expenses and other monies whatsoever stipulated in the Agreement (‘Secured Obligations’) has been secured by:
(a) A first mortgage and charge on all the Borrower’s immovable properties, both present and future,
(b) A first charge by way of hypothecation of all the Borrower’s moveables, including current and non-current assets, moveable
plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other moveable assets, both
present and future,
(c) A first charge on Borrowers’ Receivables,
(d) A first charge over all bank accounts of the Borrower including without limitation, the Escrow Account, the Retention Accounts
(or any account in substitution thereof) and such Other Bank Accounts that may be opened in terms thereof and of the Project
Documents and in all funds from time to time deposited therein and in all Authorised Investments or other securities representing
all amounts credited thereto,
(e) A first charge on all intangibles of the Borrower including but not limited to goodwill, rights, undertakings and uncalled capital,
present or future.
8. Gammon India Limited (GIL) & Gammon Infrastructure Projects Limited (GIPL) has pledged the following shares in favour of the
lenders to the projects as part of the terms of financial closure of the respective companies:
Company Name No. of Equity shares pledged Rate
31.03.2007 31.03.2006 (Rupees)
Andhra Expressway Limited (AEL) 1,02,25,560 1,47,90,000 10/-
Rajahmundry Expressway Limited (REL) 1,04,29,560 1,47,90,000 10/-
Mumbai Nasik Expressway Limited (MNEL) 1,61,20,000 Nil 10/-
9. Loans and advances include Rs. 50 Crores which are secured by pledge of equity shares of a private Company. The security value
is adequate to recover the amount advanced.
10. Issued Share Capital includes 7,25,800 (Previous Year 7,25,800) Equity Shares of Rs. 2/- each kept in abeyance.
11. Share Forfeited account includes Rs. 0.26 Crores (Previous Year Rs. 0.26 Crores) of Share Premium collected on application in
respect of forfeited shares.
12. The depreciation for the year is net of write back of depreciation of assets in Oman Branch of the Company. Hitherto, the Company
was charging depreciation on the assets lying in Oman as per the rates specified in the Omani laws, which were higher than the
schedule XIV rates. During the year, Oman branch has changed the method of depreciation to bring it in line with the rates and in
the manner specified in the Schedule XIV. The excess depreciation charged during previous years amounting to Rs. 2.68 Crores has
been reversed. The effect of the change in method of depreciation for the year is Rs. 2.85 Crores. On account of this change in the
method of depreciation the profit for the year is higher by Rs. 5.53 Crores.
13. Work in progress includes Rs. 20 Crores pertaining to variation and escalation claims of certain road projects for which the Company
has verdicts of DRB in favour of the Company. These claims however have been disputed by the clients and the clients have
preferred arbitration. The Company contends that based on favourable awards by arbitrator in case of similar claims by other
contractors, favourable verdict is expected to be received in respect of the claims. The Company has however earmarked out of
special contingency reserve an equal amount towards possible awards against the Company following the principles of conservatism
and prudence.
14. Balances in Foreign Bank Accounts are as per ledger.
15. Taxation:
(a) The break up of Deferred Tax liability and Assets are as follows
Particulars Year ended
31st March,
2007
Deferred Tax liability
98
Rs. in Crores
Period ended
31 st March,
2006
– On Account of Depreciation
Deferred Tax Assets
46.83 38.31
– On Account of Gratuity/Leave Encashment Provision 1.29 1.10
– On Account of Interest on NCD 0.21 0.21
– On Account of Unabsorbed Depreciation 0.56 0.84
– On Account of Unabsorbed Losses – –
– On Account of delay in payment of TDS 2.21 0.34
Net Balance 42.56 35.82