KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

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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. 92
Administrative and Other Expenses With the increased scale of operations of the company, administrative and other expenses have gone up from 38.06 lacs in 2001 to 65.59 lacs in 2005 i.e increase of 73% over the stated period. However, in percentage terms, they have come down from 0.91% of the total income in 2001 to 0.51% of the total income in 2005. Selling and Distribution Expenses Selling and distribution expenses consist largely of transportation costs, commissions paid to our stockists / dealers and advertising costs in electronic and print media. Expressed as a percentage of total income, selling and distribution expenses accounted for 1.48% of the total income in 2001 remained at the same level in 2005 as well. However, in real terms they have increased in direct proportion to sales as discussed above. Financial Charges The financial expenses have come down from 0.69 % of the total income in 2001 to 0.47 % in 2005 fiscal. The reduction in interest and finance charges is partly attributable to general reduction of interest rates in India (the tenyear yield on government debt securities declined from 10.36% on April 2, 2001 to 7.16% on May 17, 2005). We have used structured finance solutions that reduce our financing costs to the minimum. Depreciation Depreciation which was 0.91% of the total income in 2001 has come down to 0.55% of the total income in 2005. However in absolute terms, depreciation charge has gone up from 38.02 lacs in 2001 to 69.95 lacs in 2005 i.e increase of 83.98% due the fact, the “Gross Block” of fixed assets has increased from 575.52lacs in 2001 to 979.61 lacs in 2005. REVIEW OF RESULTS OF OPERATIONS Five-Month Period Ended August 31, 2005 Compared to 2005 Fiscal Period Ended Year Ended August 31, 2005 Fiscal 2005 Sales of Product-Manufactured 5239.22 9702.50 Goods Traded by the Company 330.53 5569.75 2926.60 12629.10 Other income 134.17 116.90 Raw material consumed 3693.13 6680.85 Manufacturing expenses 707.51 1559.54 Excise duty 720.56 956.97 Selling and distribution expenses 58.15 187.53 Personnel expenses 32.97 96.24 Admin. & other operating expenses 36.00 65.59 Interest and finance charges 20.60 59.32 Depreciation 29.12 69.95 Net profit before taxes 132.59 263.10 Taxes 44.63 91.91 Net profit after tax 87.96 171.19 Net Sales : Sales, net of returns , upto August 31 st 2005, as per audited figures were 5569.75 Lacs compared & 12629.10 Lacs for fiscal 2005 showing constant trend. However, we in remaining months of current fiscal, banked by a strong market are confident of achieving a overall increase in sale in 2006 fiscal compared to 2005. Other Income: Other income at Rs.134.17 lacs for the five month period of current fiscal has clocked a 15.38% increase compared to entire 2005 fiscal year . Any increase in other income will contribute directly to our bottomline for fiscal 2006. Raw Material Consumed. : Raw Material consumption for five month period ended 31 st August 2005 has remained stable as 70.49% of the sales of products manufactured by our company. During the five month of current fiscal raw material prices have not shown any undue variation and have remained stable. 93
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KAMDHENU ISPAT LIMITED DRAFT PROSPE
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DEFINITIONS AND ABBREVIATIONS Gener
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Abbreviations Abbreviation Full For
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RISK FACTORS An investment in equit
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mentioned under Class 1 to 42 cover
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(b) Any disruption/ discontinuance
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affect our operating results. We ar
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The central and state tax scheme in
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SUMMARY The following summary is qu
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THE ISSUE Equity Shares offered by
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of the Stabilisation Period allot,
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For the year ended August March Mar
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LEGAL ADVISOR TO THE ISSUE Luthra &
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2. Capital Buildup: The existing sh
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B. Promoter Group 1. Saurabh Agarwa
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Sl. Name of Date of Consid- No. of
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Sl. Name of Date of Consid- No. of
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7. The Pre-issue and Post-issue sha
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(b) Our top ten shareholders and sh
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OBJECTS OF THE ISSUE The proceeds f
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BASIS FOR ISSUE PRICE QUALITATIVE F
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STATEMENT OF TAX BENEFITS The Compa
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loss, such long -term capital loss
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Benefit available to Mutual Funds I
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Restrictions in external trade, bot
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to compete with the likes of China,
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III. Flat Products Flat products in
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· In China and other Asian countri
Page 57 and 58: BUSINESS OVERVIEW Kamdhenu Ispat Li
Page 59 and 60: PROCESS PROCESS FLOW CHART FOR PROD
Page 61 and 62: POWER The Company sources Power fro
Page 63 and 64: The sponge iron is one of the raw m
Page 65 and 66: We help them to get right people to
Page 67 and 68: 23. A.S. CEMENT INDUSTRIES, Patiala
Page 69 and 70: PROPERTY A. Properties owned by the
Page 71 and 72: S No. 6. 7. 8. Date & Tenure Name &
Page 73 and 74: OUR INDEBTEDNESS Sr. No 1 Lender &
Page 75 and 76: Main Objects The main objects of th
Page 77 and 78: OUR MANAGEMENT As per the Articles
Page 79 and 80: C. MR. SUNIL KUMAR AGARWAL Designat
Page 81 and 82: Company Secretary Secretarial & Leg
Page 83 and 84: PROMOTERS OUR PROMOTERS MR. SATISH
Page 85 and 86: 2. and accessories, automobile part
Page 87 and 88: The Board of Directors Kamdhenu Isp
Page 89 and 90: Annexure - II Statement of Assets a
Page 91 and 92: 7 The company is manufacturing CTD/
Page 93 and 94: Annexure - VII Performance Ratios:
Page 95 and 96: Principal Terms of Sanctioned Loans
Page 97 and 98: Financial Statements of Group Compa
Page 99 and 100: The Board of Directors of the Compa
Page 101 and 102: List of Shareholders as on 30.9.200
Page 103 and 104: MANAGEMENT’S DISCUSSION AND ANALY
Page 105 and 106: DEPRECIATION Depreciation on fixed
Page 107: of excise duty was 8% thereafter up
Page 111 and 112: Cost Of Goods Traded In The company
Page 113 and 114: Information required as per clause
Page 115 and 116: SL. NO. 5 6 7 8 9 10 11 12 ASSESSME
Page 117 and 118: 3.2 CENTRAL EXCISE Commissioner of
Page 119 and 120: 4.2 M/s. Kamdhenu Ispat Limited vs.
Page 121 and 122: II Outstanding litigations involvin
Page 123 and 124: Sales Tax ASSESSMENT YEAR PARTICULA
Page 125 and 126: 11. The Company has obtained consen
Page 127 and 128: BEHALF AND TOWARDS THIS PURPOSE, TH
Page 129 and 130: Public Issue expenses are estimated
Page 131 and 132: ISSUE INFORMATION Terms of the Issu
Page 133 and 134: Applications by Hindu Undivided Fam
Page 135 and 136: Payment Instructions 1. Payments sh
Page 137 and 138: 5. Investors can contact the Compli
Page 139 and 140: for public subscription and the bal
Page 141 and 142: POWER TO MODIFY RIGHT 11. (i) If at
Page 143 and 144: without any deduction or allowance
Page 145 and 146: there be no such Chairman or if at
Page 147 and 148: 69. The Director shall not be requi
Page 149 and 150: fit and any such appointment may (i
Page 151 and 152: present and entitled to vote there
Page 153 and 154: MATERIAL CONTRACTS AND DOCUMENTS FO
Page 155: DECLARATION All the relevant provis
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KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

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