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 income:
Particulars FY 2005 FY 2004 FY 2003 FY 2002 FY 2001
Amount % Amount % Amount % Amount % Amount %
Material Consumed
Cost of goods
6680.85 52.43 4935.33 59.95 3791.61 66.85 3253.71 66.70 2836.35 67.93
traded in
Manufacturing
2802.53 22.00 1225.34 14.88 153.82 2.71 165.53 3.39 - -
Expenses 1559.54 12.24 655.00 7.96 610.56 10.77 515.98 10.58 501.34 12.01
Excise Duty 956.57 7.52 831.37 10.10 768.90 13.56 680.18 14.13 601.24 14.40
Personnel Expenses
Administrative &
96.24 0.76 46.48 0.56 49.73 0.88 47.64 0.98 42.95 1.03
Other Exp.
Selling & Distt.
65.59 0.51 56.91 0.69 36.68 0.65 38.91 0.80 38.06 0.91
Expenses 187.53 1.47 209.74 2.55 145.32 2.56 65.02 1.33 61.92 1.48
Financial Expenses 59.32 0.47 34.27 0.42 23.88 0.42 24.36 0.50 28.74 0.69
Depreciation 69.95 0.55 55.7 0.68 51.27 0.90 48.73 1.00 38.02 0.91
Total Expenditure 12478.52 97.94 8050.14 97.78 5631.77 99.30 4849.06 99.40 4148.62 99.36
Total Income 12741.62 100 8232.62 100 5671.67 100 4878.15 100 4175.55 100
Raw Material Consumed
Raw materials consumption as a percentage of total income have come down from 67.93 % in fiscal 2001 to
52.43% 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 gained momentum in forthcoming years. Purchase cost of
goods traded in which accounted for 3.39 % of the total income in 2002 have gone up to 22.00% of the total income
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. In fact, it constituted 87% of the total manufacturing expenses for 2005
fiscal.
Manufacturing expenses as a percentage of total income have more or less remained constant at 10 -12% of the
total income. They have not shown any significant increase due to cost control various measures adopted by the
company. In 2001, they were 12.01% of the total income whereas in 2005 they were 12.24% of the total income.
Excise Duty
Excise duty which constituted 14.40% of the total income in 2001 fiscal has come down to 7.52% of the total income
in 2005 fiscal mainly duty to reduction on excise duties for the companies products from 7.67% of the assessable
value in 2001 to 16% of the assessable value in 2005 as already discussed above.
Personnel Expenses
Personnel expenses consist of salaries, wages, overtime and bonus, contribution to employee benefit schemes,
employee welfare charges and staff recruitment and training. Personnel expenses have come down from 1.03% of
the total income in 2001 fiscal to 0.76% in fiscal 2005. Increased automation and improved production techniques
have led to economies of scale and, consequently, reduced our manpower requirements per ton of output.
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