KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

DEPRECIATION
Depreciation on fixed assets has been provided on straight-line method at the rate prescribed under Schedule XIV
of the companies Act.1956 on pro-rata & actual shift working basis. The amount of depreciation on Fixed Assets of
Orrisa Project has been charged to pre-operative expenses.
VALUATION OF INVENTORIES
1. Raw Material, stores &Spares, Packing Material, Fuel, Stock in process are valued at cost
2. Finished goods are valued at cost or realizable value whichever is less.
3. Waste & scrap and Runner &Riser are valued at realizable value.
SALES
Sales are stated net of sales returns.
INVESTMENTS
Investments are valued at cost. Profit &Loss is being accounted for on actual realization.
PROVISION FOR CURRENT AND DEFFERED TAX
Provision for current tax is made after taking into consideration benefits admissible under the provision of income tax
Act, 1961. Deferred tax resulting from “timing difference” between book profit and taxable profit is accounted for
using the tax rates and laws that have been enacted or substantively enacted as on the dare of balance sheet. The
deferred tax liability is recognized and carried forward only to the extent that there is a reasonable certainty that the
same will be realized in future.
MISC. EXPENDITURE
1. Preliminary expenses incurred up to 31.03.1998 are being written off over a period of 10years.
2. Expenses for increasing of authorized share capital incurred after 31.03.1998 are being written off over a period
of 5 years.
3. Pre operative expenses incurred during the year for the new project at Orrisa will be written off/allocated to fixed
assets after commencement of commercial production.
Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the
weighted average number of Equity Shares outstanding during the year.
Diluted earnings per share is calculated by dividing the net profit attributable to the equity shareholders by the
weighted average number of Equity Shares outstanding during the year (adjusted for the effects of dilutive options).
RESULTS OF OPERATIONS
Sale
The increasing demand for construction materials particularly steel and other construction related materials viz.
cement and PoP in the domestic market has been the key reason for our increased sales in recent years. The
company has taken rapid strides, in the recent past, particularly in terms of growth, a fact prominently 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.
Expenses
Our expenses mainly consist of the cost of raw material consumed, cost of goods traded in, manufacturing expenses,
excise duty, personnel expenses, administrative and other expenses, selling and distribution expenses,
financial expenses and depreciation.
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