gayatri projects limited - Edelweiss

GAYATRI PROJECTS LIMITEDwere awarded to us towards the end of the year ended March 31, 2005 and during the year 2005. Our ability tocapitalize on our backlog as on December 31, 2005 will be key to our result of our operations.We experienced marginally increase in the average purchase price of steel, cement and other construction materialsin the year ended March 31, 2005 as compared to the year ended March 31, 2004. We experienced significant unanticipated cost escalation on certain projects resulting from contract variations anddelays attributable to our clients. We have raised claims on our clients for such contractual variations; however,these claims have not been recorded as income in our financial statements as they are yet to be finally acceptedby our clients. We expect to record the income on account of these claims in our financial statements in futureperiods on final acceptance of these claims by our clients.IncomeGross Contract ReceiptsOur income marginally decreased by 3.83% from Rs.31356.67 lakhs in the year ended March 31, 2004 to Rs.30125.79 lacsin the year ended March 31, 2005, primarily due to delay in materialization of few contracts.Other IncomeThere is significant reduction in other income from Rs.555.28 lakhs in the year ended 31 st March, 2004 to Rs.205.37 lakhsin the year ended March 31, 2005 primarily due to reduction in the royalty income on SRSP projects which were completed.ExpenditureOur expenditure consists of materials consumed and costs of goods sold, operating and administrative expenses, financialcharges incurred, depreciation and amortization charges and miscellaneous expenditure written off. Total expendituredecreased by 4.27% from Rs.26931.52 lakhs in the year ended 31 st March, 2004 to Rs. 25779.10 lakhs in the year ended31 st March, 2005.Work ExpenditureWork expenditure relating to projects decreased marginally from Rs. 25450.25 lakhs in the year ended March 31, 2004 toRs. 24200.99 lacs in the year ended March 31, 2005 on account of reduction in the cost of steel, cement and work executedby the Sub-contractors.Staff CostThe staff cost which consists of salaries, wages and bonus payment to employees, contribution to provident fund and otherfunds and expenses incurred in connection with workmen and staff welfare has decreased by 3.98% from Rs. 552.18 lacsin the year 31 st March 2004 to Rs. 530.14 lacs in the year 31 st March, 2005 on account of rationalization of manpower.Administration ExpensesOur administration expenses include project related expenses, personnel related expenses and administrative andestablishment expenses. The administration expenses have increased by 12.96% from Rs.642.04 lacs in the year ended31 st March, 2004 to Rs.725.26 lacs in the year ended 31 st March, 2005 on account of increase in the traveling expenses,project consultancy fee, tender expenses and other general administration expenses.Financial chargesExpenditure on account of financial charges comprising of bank/financial charges, paid for letters of credit, and performanceguarantees and other misc. financial transitions have increased by 12.19% from Rs. 287.05 lakhs in the year ended March31, 2004 to Rs. 322.71 lakhs in the year ended March 31, 2005 on account of increase in the bank guarantees and Lettersof Credit.InterestInterest charges increased by 33.43 % from Rs.1699.84 lacs in the year ended March 31, 2004 to Rs.2267.04 lacs in theyear ended March 31, 2005, primarily due to increase in interest payable on working capital facilities, long term loans availedfrom the bank and interest paid in debentures.142