Annual Report 2006-2007 - Gammon India

GAMMON INDIA LIMITED
(c) The following Associates have been accounted on one line basis applying the Equity Method in accordance with Accounting
Standard (AS) – 23 “Accounting for Investment in Associates in Consolidated Financial Statements”.
The particulars of Investment in Associates are as under:
Name of the
Company
%
Share
held
Original
Cost of
Investment
Goodwill/
(Capital
Reserve)
Adjusted/
Accumulated
Profit/(Loss)
upto
31-03-2006
96
Dividend/
Prior period
adjustments
Profit for
the period
ended on
31-03-2007
Adjustment
on
Disposal
Rs. in Crores
Carrying
Amount of
Investments
as on
31-03-2007
(1)
The Freyssinet
Prestressed
Concrrete
(2) (3) (4) (5) (6) (7) (8) (9)
(3) + (5) +
(6) + (7) +
(8)
Co. Ltd.
STFA Piling
36.64% 0.44 – 4.78 – 0.71 (5.93) –
(India) Limited
Associated
Transrail
Structures
50.00% 0.22 – (0.22) – – – –
Limited 28.87% 1.69 0.71 7.86 (0.33) 12.94 – 22.16
FIN EST SPA
Eversun Sparkle
Maritime
Services Private
50.00% 19.52 7.57 N.A. – – – 19.52
Limited (*) 27.47% 2.14 0.55 N.A. – (0.66) – 1.48
Total 24.01 8.83 12.42 (0.33) 12.99 (5.93) 43.16
(*) Shareholding is through subsidiary Gammon Infrastructure Projects Ltd.
In respect of FINEST SPA, the accounting of profit as per AS – 23 is carried out on the basis of un-audited accounts prepared
by the management for the period from January’ 06 to December’ 06. No accounting for the profit/loss has been made in the
absence of determination of such profit/loss by the associate.
2. As per original agreement with AEL’s lenders, the sponsors (being the shareholders/joint venture partners of AEL) had contributed
Equity Obligations by way of subscription to equity shares of the Company or by way of advances towards such subscription.
Under the new refinancing done by the lenders, there is no requirement of Equity Obligation. The Group has refunded part of the
Equity Obligation of Rs. 2.02 Crores.
3. As per original agreement with REL’s lenders, the sponsors (being the shareholders/joint venture partners of REL) had contributed
Equity Obligations by way of subscription to equity shares of the Company or by way of advances towards such subscription.
Under the new refinancing done by the lenders, there is no requirement of Equity Obligation. The Group has refunded part of the
Equity Obligation of Rs. 5.01 Crores outstanding as at 31 st March, 2006.
4. CBICL has extended a Term Loan of Rs. 8.00 Crores (Rs. 3.38 Crores proportionate share of the Company in Joint Venture in the form
of jointly controlled entity) to VSPL, which is convertible at par into equity shares of Rs. 10/- each on 1 st April, 2008.
5. Warrant Issued to Investors:
Pursuant to the approval of the members of Cochin Bridge Infrastructure Company Limited (CBICL) at an EGM, a Warrant Subscription
Agreement between CBICL, Gammon India Limited (GIL) and AMIF I Ltd (“the investor”) has been executed on 30 th November 2005.
Based on the agreement CBICL has issued an Optionally Convertible Warrant on a preferential basis which gives the investor an
option to subscribe to 25% of the issued and paid share capital of CBICL on a fully diluted basis, on a preferential allotment basis, at
any time after 1 st January, 2011 but before 31 st March, 2011 by paying CBICL fair value therefor.
6. Provident Fund:
The provisions of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, have been implemented at the work sites
where code numbers have been allotted. In respect of the remaining work sites necessary applications have been made for allotment
of code numbers.
However, a provision of Rs. 0.25 Crores is available to cover any liability arising there from.