Annual Report 2008-2009 - Gammon India

2. DIVIDEND:
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GAMMON INDIA LIMITED
The Board of Directors at its meeting held on 9 th July 2009 has, subject to the shareholder’s approval recommended;
1. Dividend of Rs. 21/- per share on 6 % Optionally Convertible Preference shares for the year 2008-09 *.
2. A final dividend of Rs 0.60 paisa per share of Rs.2/- each (30%) for the year 2009 on the equity shares .The
total dividend pay out for the year under review is Rs. 12.80 Crores. Dividend Distribution Tax aggregates to
Rs. 2.17 Crores.
*(These shares have since become Non- Convertible Redeemable Preference Shares)
3. AMALGAMATION OF ASSOCIATED TRANSRAIL STRUCTURES LIMITED WITH GAMMON INDIA LIMITED:
Vide its order dated June 18, 2009, the Mumbai High Court approved the scheme of amalgamation of Associated
Transrail Structures Limited (ATSL) with Gammon India Limited. Subsequently the Gujarat High Court also vide
its order dated 2 nd July 2009 approved the said scheme. The certified copies of the orders of the Bombay High
Court and Gujarat High Court were filed with the respective Registrar of Companies on 7 th July 2009. Consequently
the scheme has become effective from 7 th July 2009, the appointed date being 1 st April 2008. The Financial
Accounts for the year ended 31 st March 2009 are of the merged entity.
ATSL is amongst the top five leading Indian Players in the business of Power Transmission - Manufacturing and
Erection. The merger had a positive fallout in terms of increasing top line revenue of GIL, improvement in
operating margins of the merged company as also an improvement in the Earnings Per Share.
With this amalgamation the Company now has a foothold in the lucrative and upcoming sector of Power
Transmission and Distribution. The Board is optimistic that the amalgamation of ATSL with Gammon India
Limited will further strengthen the Company‘s business and will open up new avenues for further expansion of its
business in the power sector. A more detailed note on the business of ATSL is included in the Management
Discussion and Analysis Report.
The Board wishes to thank all its shareholders and stakeholders for their support in making this amalgamation
a success.
4. FINANCE:
During the year under review the company did not raise any funds from the capital markets either by way of
issue of equity/ADRs/GDRs. However to meet its working capital requirements and for future expansion plans
and CAPEX requirements, the Company has raised money through the allotment of 1.6 Crore Equity Warrants at
a price of Rs. 90.20/- each, to the companies forming part of the promoter group. The Company has also
obtained financial assistance from its consortium bankers to meet its short term working capital requirements
as well as long term debt by way of issue of Non-Convertible Debentures on private placement basis aggregating
to Rs. 100 Crores. As on 31 st March 2009, total amount outstanding towards issue of Non-Convertible Debentures
on private placement basis to banks and financial institutions stood at Rs 300 Crores. CARE has assigned ‘AA’
rating for the same.
The following credit ratings from CARE continue:
(i) ‘PR1+’ for short-term commercial paper of Rs 400 Crores
(ii) ‘AA’ for Non-Convertible Debentures of Rs 300 Crores
(iii) ‘AA’ for Long Term Bank Facilities and ‘PR1+’ for Short Term Bank Facilities aggregating to Rs. 3700 Crores
The proceeds of debentures were utilized for the purposes for which they were raised.
Capital expenditure on plant and machinery during the year amounted to Rs. 167.56 Crores which was
financed from internal accruals, short term funding and External Commercial Borrowings.