GAMMON INDIA LIMITED

As the revenue structure for the SPVs under such agreements is set over the life of the relevant agreement
(and may be subject to fluctuation in accordance with the built-in adjustment mechanisms contained in the
relevant agreement), the SPVs‘ profitability is largely dependent on how effectively they are able to manage
their costs during the terms of such agreements, while adhering to the expected schedule of implementation.
If we are unable to effectively manage our costs or complete the relevant projects on time, our business,
financial condition and results of operations may be adversely affected.
While we believe that we have successfully managed the implementation risks we have faced in the past,
there can be no assurance that we will be able to continue to effectively manage any current or future
implementation risks, which may or may not be of a nature familiar to us. Our results of operations may be
adversely affected if we are unable to effectively manage the implementation risks we face.
We rely substantially on Government-owned and Government-controlled entities for our revenues from
our infrastructure development business. Political or financial pressures could cause these entities to
force us to renegotiate our agreements and could also adversely affect their ability to pay us.
A significant number of our infrastructure development projects have been awarded by Government-owned
or Government-controlled entities and, therefore, may be subject to political or financial pressures that may
lead to such agreements being restructured or renegotiated by these entities, which could adversely affect
our business and results of operations.
Additionally, some of our projects, being Government-owned or Government-controlled projects, may often
be subject to delays on account of various factors such as a change in the central and/or state Government,
changes in policies impacting the public at large, scaling back of Government policies or initiatives,
changes in governmental or external budgetary allocation, or insufficiency of funds, which can significantly
and adversely affect our business, financial condition and results of operations.
Our infrastructure development business is capital intensive in nature and we may not be able to raise
the required capital on favorable terms, or at all, for future projects which may have an adverse effect on
our business and results of operations.
Infrastructure development projects are typically capital intensive and may require high levels of financing,
including debt financing. If we decide to meet our capital requirements through debt financing, our interest
obligations will increase and we may be subject to additional restrictive covenants. If we decide to raise
additional funds through the issuance of equity or equity-linked instruments, the interests of our existing
shareholders will be diluted.
The restrictive covenants under our financing agreements include maintenance of certain financial ratios
and restrictions on issuance of equity shares or change in capital structure, such covenants may restrict our
ability to raise finances on acceptable terms or at all.
We cannot assure you that market conditions and other factors would permit us to obtain future financing
on terms acceptable to us, or at all. Our ability to arrange financing on a substantially non-recourse basis
and the costs of capital of such financing are dependant on numerous factors, including general economic
and capital market conditions, credit availability from banks, investor confidence, the continued success of
our current projects and other laws that are conducive to our raising capital in this manner. The recent
changes in the global and Indian credit and financial markets have significantly diminished the availability
of credit and led to an increase in the cost of financing. In many cases, the markets have exerted downward
pressure on the availability of liquidity and credit capacity. Our attempts to obtain future financings on
favorable terms may not be successful. In addition, our ability to raise funds, either through equity or debt,
is limited by certain restrictions imposed under Indian law.
We cannot assure you that we will be able to raise adequate capital in a timely manner and on acceptable
terms or at all. This may result in an adverse effect on our results of operations and financial condition.
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