gayatri projects limited - Edelweiss

GAYATRI PROJECTS LIMITEDthe occurrence of any of these risks may also adversely affect public perception about our operations andthe perception of our suppliers, clients and employees, leading to an adverse effect on our business. Theseliabilities and costs could have a material adverse effect on our business, results of operations and financialcondition.24. The funds raised out of this Offer are not utilized for any specific project other than investment inSPV.We will not receive any proceeds of the Offer for Sale by the Selling Shareholders. We will receive 34.48%of total Offer proceeds and out of which Rs. 2000 lakhs will be invested in SPV for execution of BOT /BOOT project. The income out of this investment will be in the form of dividends only by SPV and anyadverse affect on the SPV will affect us to the extent of non-receipt of dividend from the investments madeby us till that time.25. We have a high working capital requirement. In case there is insufficient cash flow to meet ourrequirement of working capital or pay our debts, there may be adverse effect on the results of ouroperation.Our business demands significant amount of working capital. As payments from clients are linked tocompletion, which are spread out over the execution period of the contract, significant amount of workingcapital would be required to finance the purchase material and performance of the construction projectsbefore the payment is received from the client. Consequently, there could be situations where the totalfunds available may not be sufficient to fulfill our commitments which may effect our financial position andability to pay our debt obligations in time.26. Projects included in our backlog or under construction stage may be delayed or cancelled whichcould materially harm our cash flow position, revenue and earnings.Projects under construction comprise anticipated revenues from the uncompleted portion of existing contracts.The amount of our backlog does not necessarily indicate future earnings related to the performance of thatwork. Projects under construction refer to expected future revenues under awarded contracts and which isconsidered firm, although cancellations or scope adjustments may occur. Due to changes in project scopeand schedule, we cannot predict with certainty when or if project will be completed. In addition, even wherea project proceeds as scheduled, it is possible that contracting parties may default and fail to pay amountowed. Any delay, cancellation or payment default could materially effect our cash flow position, renvuesand / or earnings.27. Our operations are subject to a degree of risk and could expose us to material liabilities, loss inrevenues and increased expenses.Our operations are subject to hazards inherent in providing construction and engineering services, such asrisk of equipment failure, work accidents, fire or explosion, including hazards that may cause injury andloss of life, severe damage to and destruction of property and equipment, and environmental damage.Actual or claimed defects in equipment procured and / or construction quality could give rise to claims,liabilities, cost and expenses, relating to loss of life, personal injury, damage to property, damage to equipmentand facilities, pollution, inefficient operating processes, loss of production or suspension of operations. Ourpolicy of covering these risks through contractual limitations of liability, indemnities and insurance may notalways be effective.28. We depend on forming successful joint ventures to qualify for the bidding process.To bid for certain infrastructure projects, which require higher capital adequacy or technical expertise, wehave to meet certain pre-qualifications pertaining to capital adequacy and technical requirements. In order toxii