gayatri projects limited - Edelweiss

however, we are not paying any rent for using the registered office. Further, we have taken our Corporateoffice from Deep Corporation Private Limited, one of our Promoter Group Company, for which there hasbeen no formal leave and license agreement entered into between us. Gayatri Capital Limited or DeepEnterprises Private Limited or any other lessor who has leased to us any of our offices may require us tovacate the premises with or without sufficient notice, which may adversely affect our business.42. Trade name “Gayatri” is not registered in name of our Company.The name ‘Gayatri’ has been adopted by our Company as well as our Group Companies as part of ourcorporate name/tradename. However the name ‘Gayatri’ has not been registered either by our Company orour Group Companies with the Register of Trade Marks under the Trade Marks Act, 1956 (as modified byTrade Marks Act, 1999) and in the event of any infringement claims by a third party against the Company(or group companies), it shall be necessary for the Company (or group companies) to establish its/theirentitlement to the exclusive use of the mark ‘Gayatri’ and consequently it may adversely affect the operationsof the Company.43. We have Contingent liabilities, which may affect our financial positionThe details of contingent liabilities as on March 31, 2006 are as under:Particulars March 31, 2006Amount (Rs. in lacs)1. Guarantees given by Banks towards performance & contractualcommitments:a) To the company in the normal course of Business. 15633.06b) Guarantees given to related parties 23365.442. Corporate guarantees given to Group companies 12909.003. Letter of Credits taken 1345.684. Disputed Sales/Entry Tax Liability 416.82In the event such contingent liability materializes it may have an adverse affect on our financial performance.44. We are subject to restrictive covenants in certain long- term debt facilities provided to us by ourlenders and Debenture holdersThe covenants in borrowings from banks and debenture holder among other things, require us to obtain theapproval of these institutions, namely for, issuing new securities (debt or equity), change in management,change in the capital structure at any time while the loans or any debt facility is still subsisting.45. Some of the companies in the Promoter Group Companies are in the same line of activity andconsequently the interest of these companies, may conflict with our interest.The objects clause of memorandum of association of promoter group companies viz. Indira ConstructionPrivate Ltd., Aparna Engineering Co. Private Ltd., Mallikarjuna Constructions Private Ltd., T.Gayatri EngineeringCompany Private Ltd., Sandeep Builders Private Ltd., Sarita Constructions Private Ltd., ParameswariConstructions Private Ltd., Sivaganga Engineering Company Private Ltd., Sivadevi Engineering CompanyPrivate Ltd., T.Anirudh Reddy Builders and Developers Private Ltd., T.Rajeev Reddy Real Estate DevelopersPrivate Ltd., Shankari Engineering Private Ltd. and Deep Corporation Private Ltd., authorizes them to carryon the activities relating to construction business. However, potential conflict of interest in future may notbe ruled out which may affect business operations of our Company.xv