KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

The company has since the last Balance Sheet date entered into memorandum of understanding(s)/agreement(s)
with the different parties at the locations specified for establishing its stockyards there at:
Sl.No. Location Proposed Areas To Be Covered
1. Mandi, Gobindgarh Punjab
2. Ajmer Rajasthan
3. Hosour Tamil Nadu
4. Delhi N C R
5. Gurgaon Haryana
6. Kanpur Eastern UP
In the opinion of our Board of Directors, other than as disclosed in this Prospectus, there have not arisen any
circumstances since August 31st ,2005 which materially and adversely affect, or are likely to materially and adversely
affect, our manufacturing or sales or the profitability of our Company, or the value of our assets, or our ability to pay
our liabilities within the next 12 months.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our financial condition and results of operations are affected by numerous factors including the following:
General economic and business conditions: The demand for our products is dependent on general economic conditions
in India and may affect if there are changes in business conditions in our country.
Demand: The demand for our products viz. Steel, Cement and POP is a derived demand, meaning that it is dependent
upon the state and condition of the infrastructure, construction and housing industry. We have a very well
diversified customer base which obviates dependence on any major Customer. We have further sought to expand
our customer base. The prospects and earnings growth of the customers we serve will have an impact on our ability
to generate sales.
Competition: Selling prices of our products may be affected if competition intensifies, including as a result of increased
capacity of Competitors or our competitors adopt aggressive pricing strategies in order to gain market
share or new competitors enter the markets we serve.
Capacity: Currently, we have the capacity to manufacture 48000 MT of TMT/CTD bars at our Bhiwadi plant in
Rajasthan. We are currently effecting a strategic shift in our marketing policy. To encash on the brand value which
we enjoy in the market, instead of going in for an expansion programme or setting up a new unit, we intend to
purchase TMT/CTD bars from our current franchisees as detailed above and subsequently effect sale under our
own umbrella thereby contributing to our own bottomline in the process.
Raw Material Prices: Raw materials i.e Steel Ingots, Sponge Iron and M.S. Scrap constitute a major portion of our
total expenses. Fluctuations in the cost of these raw materials may alter our cost structure and affect profitability.
Historically, we have been able to pass on increases in raw material costs to our customers but we cannot assure
you that in future also we will be able to do so.
Other Factors: Our results of operations are dependent upon our success in managing our inventories. We have to
schedule out production process and procurements according to delivery schedule of customers. Any change in
schedule may affect our operation in short run.
SIGNIFICANT ACCOUNTING POLICIES
Our significant Accounting Policies are as under :
FIXED ASSETS :
Fixed Assets are stated at cost .Cost includes installations and expenditure during construction period wherever
applicable.
CENVAT (Central Value Added Tax)
Cenvat claimed on Plant & Machinery is reduced from the cost of Plant& Machinery. Cenvat claimed on purchases
of raw materials and other materials reduced from the cost of such materials.
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