gayatri projects limited - Edelweiss

RISK FACTORSAn investment in equity securities involves a high degree of risk. You should carefully consider all of the informationin this Prospectus, including the risks and uncertainties described below, before making an investment in our EquityShares. Any of the following risks as well as the other risks and uncertainties discussed in this Prospectus couldhave a material adverse effect on our business, financial condition and results of operations and could cause themarket price of our Equity Shares to decline, which could result in the loss of all or part of your investment.Prior to making an investment decision, prospective investors should carefully consider all of the information containedin this Prospectus, including the restated financial statements beginning on Page no. 120. Unless stated otherwise,the financial data in this section is as per our restated financial statements prepared in accordance with Indian GAAP.In this section, any reference to “we”, “us”, “our” or ‘the Company” refers to Gayatri Projects Limited”.Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial orother implications of any of the risks described in this section.INTERNAL RISK FACTORS1. There is one criminal case filed against Gayatri Starchkem Limited, one of our Promoter Group Company.Gayatri Starchkem Limited, one of the promoter group company, has been impleaded in criminal complaintwith the High Court of Andhra Pradesh, Hyderabad, filed by Pact Securities and Financial Service Limited,for non-payment of lease rentals of Rs. 6.54 lakhs. For details, please refer the section “Outstanding Litigation”beginning on page no. 146 of this Prospectus.2. Two of our listed Promoter Group Compnaies viz. Gayatri Starchkem Limited and Gayatri Tissuesand Paper Limited have been suspended from trading in equity shares on account of non-complianceof listing requirements viz. non-payment of listing fee and non-submission of returns.Gayatri Starchkem Limited, which was declared as a Sick Industrial Company by BIFR was suspended byBombay Stock Exchange for trading in equity shares on account of non compliance of listing requirementswith effect from September 10, 2001. The company paid listing fees to BSE in September, 2005 andcomplied with Stock Exchange requirement to get revocation of suspension. However, BSE informed thecompany that they will consider re-listing once the One Time Settlement is completed.Gayatri Tissues and Paper Limited, which is not undertaking any manufacturing activity, has also beensuspended from trading of their Equity Shares by Bombay Stock Exchange Limited on account of noncompliance of the listing requirements with effect from December 21, 2004. The company complied with theStock Exchange requirement to get revocation of suspension, however, BSE infomed the company thatthey will consider re-listing once the company starts commercial operations.Promoters of our Company have undertaken to abide by all listing requirements of Bombay Stock Exchangein future. For details please refer to section “Information of our Promoter Group Companies” on page 79 ofthis Prospectus.3. We are involved in a number of legal proceedings, which may have some financial implications onthe business of our Company.Our company is involved in a number of legal proceedings, which are classified under the various legal heads:Category of Litigations Total No. of Cases Total Financial Implication(here quantifiable) Rs in LakhsFiled against the CompanyCivil 23 1145.70Debt recovery Tribunal 1 1617.26Sales Tax 9 416.81Filed by the CompanyCivil 14 2772.60iii