GAMMON INDIA LIMITED

As of March 31, 2009, our contingent liabilities, on a consolidated basis, were Rs.87,347.47 million. If any
of these contingent liabilities materialize, our profitability may be adversely affected. For a more detailed
description of our contingent liabilities, see note B-29 to our audited consolidated financial statements.
Our Promoter will continue to retain majority shareholding in us after this Issue, which will allow them
to exercise significant influence over us. We cannot assure you that our Promoter will always act in our
or your best interest.
As of September 30, 2009, 26.20% of our issued and outstanding Equity Shares are currently beneficially
owned by our Promoter. Upon completion of this Issue, our Promoter will own 28.19 million Equity Shares,
or [●]% of our post-Issue Equity Share capital, assuming full subscription of this Issue. Accordingly, our
Promoter will continue to exercise significant influence over our business policies and affairs and all
matters requiring shareholders‘ approval, including the composition of our Board of Directors, the adoption
of amendments to our certificate of incorporation, the approval of mergers, strategic acquisitions or joint
ventures or the sales of substantially all of our assets, and the policies for dividends, lending, investments
and capital expenditures. This concentration of ownership also may delay, defer or even prevent a change in
control of our Company and may make some transactions more difficult or impossible without the support
of these shareholders. The interests of the Promoter as our controlling shareholders could conflict with our
interests or the interests of our other shareholders. We cannot assure you that our Promoter will act to
resolve any conflicts of interest in our or your favor.
The structure and covenants of our financing arrangements could limit our ability for further
borrowings and we may not be able to service our existing and future debt obligations.
Certain of our loan agreements and other debt arrangements require us to obtain lender consents before,
among other things, issuing debentures or shares; entering into any transaction of merger; consolidation;
reorganization; disposing of assets or changing our management and control. Furthermore, certain financial
covenants such as maintenance of certain financial ratios may limit our ability to raise additional funding or
to grant additional security. There can be no assurance that such consents will be obtained in the future,
which may adversely affect our operations and growth prospects.
The use of borrowings also presents certain additional risks for us. We may be unable to service interest
payments and principal repayments or comply with other requirements of any loans, rendering borrowings
immediately repayable in whole or in part, together with any attendant cost. We may also be forced to sell
some of our assets to meet such obligations, with the risk that borrowings will not be able to be refinanced
or that the terms of such refinancing may be less favorable than the terms of the existing borrowing. In
addition, our borrowings will generally be secured against some or all of our assets and in particular the
assets related to the relevant project. Any event of default would result in the lenders enforcing their
security and taking possession of the underlying assets. Any cross-default provisions could magnify the
effect of an individual default and, if such a provision were exercised, this could result in us suffering a
substantial loss.
We may also guarantee the payment and performance of the obligations of certain of our subsidiaries and
joint venture companies under various contracts and loan agreements. As default by such subsidiary or joint
venture company would require us to fulfill its payment obligations under such guarantees, such default
could have an adverse effect on our cash flows and results of operations.
Our ability to meet existing and future debt service obligations and to repay outstanding borrowings under
our funding arrangements will depend primarily upon the ongoing cash flow generated by our business.
Certain of our borrowings are subject to floating interest rates which may increase the interest payment
obligations in the event of an increase in interest rates. However, our revenue may not increase
correspondingly. We may not generate sufficient cash to enable us to service existing or proposed
borrowings, comply with covenants or fund other liquidity needs.
Further, we will face additional risks if we fail to meet the debt service obligations or financial covenants
required under the terms of our financing documents. In such a scenario, the relevant lenders could declare
us in default under the terms of our borrowings, accelerate the maturity of our obligations, exercise rights of
substitution over the financed project or replace directors on the board. There can be no assurance that in the
event of any such acceleration, we will have sufficient resources to repay these borrowings. Failure to meet
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