KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our financial condition and results of operations together with our audited
restated financial statements for the fiscal years ended March 31, 2001, 2002, 2003 and 2004, and 2005 and
for the five month period ended 31st August, 2005 including the significant accounting policies and notes thereto and
reports thereon which appear elsewhere in this Prospectus. These financial statements have been prepared in
accordance with Indian GAAP, the Companies Act and as required under the SEBI Guidelines.
Unless indicated otherwise, the financial data in this section is derived from our restated unconsolidated financial
statements prepared in accordance with Indian GAAP and included in this Prospectus. Our fiscal year ends on
March 31 of each year, so all references to a particular fiscal year are to the 12 month period ended March 31 of that
year. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results
may differ from those projected in the forward-looking statements. Factors that might cause future results to differ
significantly from those projected in the forward-looking statements include, but are not limited to, those discussed
below and elsewhere in this Prospectus, particularly under “Risk Factors” beginning on page —- of this Prospectus.
OVERVIEW
Kamdhenu is a major manufacturer of High Strength Deformed (HSD) )Bars / Cold Twisted Deformed (CTD) bars
and Thermo Mechanically Treated ( TMT) bars used for reinforcement of concrete buildings/structures. Company’s
plant is located at Bhiwadi in NCR at a distance of about 70 Km from New Delhi and is having installed capacity
48000 M/T of per annum. KIL’s products are well established throughout north India and its products are sold under
brand name of “Kamdhenu Saria”. Brand “Kamdhenu Saria” is a well-known brand of construction steel in India and
is owned by KIL.
KIL’s products under the brand name of Kamdhenu have over the years created a niche market in the northern
region of India and demand for its products has been growing at rapid pace due to its focus on producing quality
products, thereby satisfying the customers’ need. Company’s brand “Kamdhenu” is the major leading brand among
the various other Brands available in the country for Steel Bars.
In the recent past, the company has taken rapid strides particularly in terms of growth, a fact well reflected in the
audited accounts of the company. The company’s sales figure which stood at Rs. 53.15 crore for the financial year
2002-03 has shown a quantum and sharp jump to Rs. 126.29 crore for the financial year 2004-05 i.e an increase of
138% in two years. In the coming years, this growth phase of the company is likely to amplify further and the
company will further consolidate its already established position in the industry in the coming years given the
buoyant demand for steel both in the international and domestic markets.
To consolidate its position further in the Indian market and to take advantage of the booming construction sector in
the country, Kamdhenu has taken a conscious decision to develop and enlarge its business operations by adopting
Franchise route. Kamdhenu plans to establish its Stock Yard/Marketing offices at various strategic locations and materials
required for these yards will be sourced from its Franchisees, who are existing manufacturers of Steel TMT/ CTD
Bars. The said Franchise units would be manufacturing the products under Kamdhenu’s strict quality control and would
be manufacturing under brand name of Kamdhenu. Towards this end, the compay has already entered in to franchise
agreement with existing manufacturers located at diverse locations across the country.
MATERIAL DEVELOPMENTS SINCE THE LAST AUDITED BALANCE SHEET DATE
The company has since entered into franchise agreement with following existing manufacturers located at different
places to lift material from them for the purpose of stocking the same at Stock yards:
Sl.No. Name of the Franchise Unit Location State Qty. (MT) to be lifted p.m
1 Aar Kay Industries Mandi, Gobindgarh, Punjab 2000
2 Nalagarh Steel Rolling Mills P Ltd Nalagarh H.P 2500
3 Kali Metals Pvt Ltd Hosour Tamil Nadu 3500
4 Jhelum Industries Jammu J & K 1000
5. Radhey Radhey Ispat (P) Ltd. Kanpur UP 1000
6. Raghuveer Metal Industries Ltd. Ajmer Rajasthan 1000
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