KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

affect our operating results. We are required to carry out planned shutdowns of our plants for maintenance,
statutory inspections and testing. We also shut down plants for equipment upgrades. Although we take precautions
to minimize the risk of any significant operational problems at our facilities, our business, financial condition and
results of operations may be adversely affected by any disruption of operations at our facilities, including due to
any of the factors mentioned above.
We are dependent on third-party transportation providers for the supply of raw materials and delivery of
products.
We typically use third-party transportation providers for the supply of most of our raw materials and for deliveries of
our products to our customers. Transportation strikes by members of various Indian truckers’ unions have had in
the past, and could in the future, an adverse effect on our receipt of supplies and our ability to deliver our products.
In addition, transportation costs have been steadily increasing in the past. Any further increases in transportation
costs may have an adverse effect on our business and results of operations.
Our results of operations could be adversely affected by strikes, work stoppages or increased wage
demands by our employees.
As of March 31, 2005, we had 123 full-time employees, including 100 at our factory at Bhiwadi and 23 at our
Registered Office in New Delhi. The number of our employees is likely to increase with our proposed expansion
plans. Currently, employees in our operations are not represented by any labour unions.
While we consider our current labour relations at all our facilities to be good, there can be no assurance that we will
not experience future disruptions to our operations due to disputes or other problems with our work force, which
may adversely affect our business and results of operations.
Our success depends in large part upon our senior management, Directors and key personnel and our
ability to attract and retain them.
We are highly dependent on our senior management, our Directors and our other key personnel. Our future
performance will depend upon the continued services of these persons. Competition for senior management in our
industry is intense, and we may not be able to retain our senior management personnel or attract and retain new
senior management personnel in the future. Although we do maintain key man insurance for some of our Directors,
the loss of any of these Directors or key personnel may adversely affect our business and results of operations.
Our insurance coverage may not adequately protect us against certain operating hazards and this may
have adverse effect on our business.
Our insurance policies consist of a comprehensive coverage for risks relating to physical loss or damage. In addition,
we have obtained separate insurance coverage for personnel related risks, motor vehicle risks and loss of movable
assets risks. For details of our insurance policies see the section titled “Our Business – Insurance” on page ___ of
this Prospectus. While we believe that the insurance coverage we maintain would reasonably be adequate to
cover all normal risks associated with the operation of our business, there can be no assurance that any claim
under the insurance policies maintained by us will be honoured fully, in part or on time. To the extent that we suffer
loss or damage that is not covered by insurance or exceeds our insurance coverage, or the insurance policy
covering such risk is not honoured, our results of operations and cash flow may be adversely affected.
Members of our Promoter group will continue to retain majority control in our Company after the Issue,
which will allow them to influence the outcome of matters submitted to shareholders for approval.
Upon completion of the Issue, members of our Promoter group will beneficially own approximately 50.10% of our
post-Issue equity share capital if Green Shoe option is not exercised and will beneficially own approximately 46.74%
if Green Shoe option is exercised. As a result, the Promoter group will have the ability to exercise significant
influence over all matters requiring shareholders’ approval, including the election of Directors and approval of
significant corporate transactions. As a consequence of its post-issue shareholding, the promoter group will also
have the ability to influence the outcome of any shareholder action or approval requiring a majority vote, except
where they are required by applicable laws to abstain from voting.
(xii)