KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

The following table shows our various expenses for fiscal years 2001 through 2005 and shows those expenses as
a percentage of total expenses:
Expenditure FY 2005 FY 2004 FY 2003 FY 2002 FY 2001
Amount % Amount % Amount % Amount % Amount %
Material
Consumed 6680.85 53.53 4935.33 61.31 3791.61 67.33 3253.71 67.10 2836.35 68.37
Cost of goods
traded in 2802.53 22.46 1225.34 15.22 153.82 2.73 165.53 3.41 - -
Manufacturing
Expenses 1559.54 12.50 655.00 8.14 610.56 10.84 515.98 10.64 501.34 12.08
Excise Duty 956.97 7.67 831.37 10.33 768.90 13.65 689.18 14.21 601.24 14.49
Personnel
Expenses 96.24 0.77 46.48 0.58 49.73 0.88 47.64 0.98 42.95 1.04
Administrative &
Other Expenses 65.59 0.53 56.91 0.71 36.68 0.65 38.91 0.80 38.06 0.92
Selling & Distt.
Expenses 187.53 1.50 209.74 2.61 145.32 2.58 65.02 1.34 61.92 1.19
Financial Expenses 59.32 0.48 34.27 0.43 23.88 0.42 24.36 0.50 28.74 0.69
Depreciation 69.95 0.59 55.70 0.69 51.27 0.91 48.73 1.00 38.02 0.92
Total 12478.52 100 8050.14 100 5631.77 100 4849.06 100 4148.62 100
Our margins have increased from 0.64% in fiscal 2001 to approximately 2.06% for the fiscal 2005. Although increased
raw material costs put downward pressure on our margins, the cumulative effect of increased sales coupled
with various cost reduction, cost control measures and improved techniques of production adopted by our company
has more than offset the effects of the increased raw material costs and resulted in an increase in our profit margins.
Raw Material Consumed
Raw materials consumption as a percentage of total expenses have come down significantly from 68.37 % in fiscal
2001 to 53.53% in fiscal 2005 i.e by about 15% mainly on account of trading activity undertaken by the company
from the year 2002 and also on account of increase in other expenses as a result of increased business activities of
the company. The consolidation and further strengthening of our marketing brand image in the past coupled with our
increased production, resulting from increased activity and our marketing strategy , has strengthened our negotiating
position with our suppliers and has enabled us to get higher quantity discounts and other favorable terms.
Wastage in production has also decreased due to increased automation and adoption of new technologies and
techniques of production has lead to the decreased raw material costs.
Cost Of Goods Traded In
The company started its trading activities in 2002, which has increased overtime . Cost Of Goods Traded In which
accounted for 3.41 % of the total expenditure in 2002 have gone up to 22.46% of the total expenditure in 2005.
Manufacturing Expenses
Manufacturing expenses consist of power and fuel, consumption of stores and spares and repairs and maintenance
of plant and machinery. The principal manufacturing expense is power and fuel charge, which accounts for a lions
share of the total manufacturing expenses. It constitutes 87% of the total manufacturing expenses for the fiscal
ended 2005.. Other manufacturing expenses include consumption of stores and spares and repairs to plant and
machinery which account for 9.23% and 2.48% of the total manufacturing expenses respectively in 2005.
Manufacturing expenses as a percentage of total expenses have more or less remained constant at 10 -12% of the
total expenses. They have not shown any significant increase due to cost control various measures adopted by the
company
Excise Duty
Excise duty which constituted 14.49% of the total expenses in 2001 fiscal has come down to 7.67% of the total
expenses in 2005 due to the fact that in 2001 fiscal excise duty was 16% whereas in 2005 upto 7th July 2005 the rate
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