GAMMON INDIA LIMITED

5. The financial statements of certain subsidiaries, associates, and jointly controlled entities whose financial statements include
total assets of Rs. 37183.20 Million as at 31st March 2009 [31st March 2008: Rs 342.70 Million , 31 st March 2007 Rs.NIL ],
total revenue of Rs 16591.40 Million as at 31st March 2009 [ 31 st March 2008: Rs NIL, 31 st March 2007: Rs NIL ] and cash
flow amounting to Rs (3056.40) Million as at 31 st March 2009 [ 31 st March 2008: Rs 2.6 Million, 31 st March 2007: Rs NIL]
have been considered on the basis of un-audited financial statements prepared by the management. Out of the above the
group‟s share of such asset being Rs 18591.4 Million as at 31 st March 2009 [ 31 st March 2008: Rs 171.20 Million, 31 st
March 2007: Rs.NIL] , revenue being Rs 8294.60 Million as at 31 st March 2009 [ 31 st March 2008: Rs Nil, 31 st March 2007:
Rs NIL] and cash flow amounts to Rs (1527.80) Million as at 31 st March 2009 [ 31 st March 2008: Rs 1.3 Million, 31 st March
2007: Rs NIL].
6. Of the above figures considered from un-audited financial statements per para 5 one of the overseas Joint Venture Company
whose audited consolidated financial statements as at 31 st December 2008 were not available for reasons stated in para 2(b)
of the notes to accounts, the group‟s share of total assets, revenue and cash flow is Rs. 18308.6 Million, Rs. 8273.9 Million
and Rs. (1543.9) Million
7. The subsidiaries referred in para 4(a) above does not include the standalone financial statements of Gammon Infrastructure
Projects Limited, where the audit has been conducted by us as the joint statutory auditors of the Company.
8. As already covered in our audit reports on the consolidated financial statements of the group for the year ended 31 st March
2009, 2008 and 2007, without qualifying our report, we had draw attention to
a) Note 22(a) to the notes to accounts regarding the Early Completion Bonus accrued by two subsidiary Companies in
earlier years and included in sundry debtors at March 31, 2009, 2008 and 2007. The outcome of the matter cannot be
presently determined and hence no provision for any liability has been made in the financial statements
b) Note no 22(c) to the notes to accounts relating to recognition of contract revenue of Rs. 945.40 Million as at 31 st March
2009 [31 st March 2008: Rs.570.4 Million, 31 st March 2007: Rs NIL] in which the Company has received arbitration
awards/awards from dispute resolution board in its favour in respect of which the client has preferred an appeal for
setting aside the said arbitration awards/ DRB awards. Recoverability of the said amount under sundry debtors is
dependent upon the final outcome of the appeals getting resolved in favour of the Company and inclusion of variation
and escalation claims of certain road projects in work-in progress as at 31 st March 2007.
c) Note no 2(d) to the notes to accounts relating to the investments of Rs. 506.40 Million in the year 2008-2009 in one of
the joint ventures of a wholly owned subsidiary which has applied for creditors‟ protection in a Court in Italy. The final
outcome and the resultant investment would be dependent upon the approval of the courts to the composition scheme
pending which no effects have been taken in these accounts. Pending the availability of the financial statements of the
Joint Venture Company, the investment in the JVC is accounted in accordance with AS 13 – “Accounting for
Investments”.
9. Subject to the matters referred to in paragraphs 2,3,4 and 5 above:
a) We report that the Consolidated Financial Statements have been prepared by the Company‟s management in
accordance with the requirements of Accounting Standard 21-Consolidated Financial Statements, Accounting Standard
23- Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard 27-
Financial Reporting of Interests in Joint Ventures as notified under the Companies (Accounting Standard) Rules, 2006.
b) Based on our audit , our reports on the annual audited consolidated financial statements and on consideration of reports
of other auditors on separate financial statements and on the other financial information of the components, and to the
best of our information and according to the explanations given to us, we are of the opinion that the attached
consolidated financial statements for the year ended March 31, 2009, 2008, 2007 subject to our comments in para 5
above read together with note no 2(b) of the notes to accounts, Note 25(d) regarding non provision for mark to
market losses of Rs 159.30 Million during the year ended 31 st March 2009 on outstanding forward contract
outstanding as on 31st March, 09 which is not in accordance with Accounting Standard - 1 and announcement made by
the ICAI on 29th March, 08, read together with Note No 17 regarding change in the policy of amortization of goodwill
resulting in the profit for the year 2007-08 being higher by Rs 137.10 Million , Note no 12 relating to the change in the
method of charging depreciation on the assets of the Oman branch and its consequent effect resulting in the profits for
the year ended 31 st March 2007 being higher by Rs. 55.30 Million and Note no 36 relating to the joint venture in Oman
and the other notes thereon give a true and fair view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Reformatted Consolidated Balance Sheets, of the state of affairs of the Group as at 31 st
March 2009, 2008 and 2007,
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