KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

External Risk Factors
Environmental regulation imposes additional costs and may affect the results of our operations.
While we believe that our facilities are in compliance in all material respects with applicable environmental laws
and regulations, additional costs and liabilities related to compliance with these laws and regulations are an inherent
part of our business. We, like other steel bar manufacturers , are subject to various central, state and local
environmental, health and safety laws and regulations concerning issues such as damage caused by air emissions,
wastewater discharges, solid and hazardous waste handling and disposal, and the investigation and remediation of
contamination. These laws and regulations are increasingly becoming stringent and may in the future create
substantial environmental compliance or remediation liabilities and costs. These laws can impose liability for noncompliance
with health and safety regulations or clean up liability on generators of hazardous waste and other
substances that are disposed of either on or off-site, regardless of fault or the legality of the disposal activities.
Other laws may require us to investigate and remediate contamination at our properties. While we intend to
comply with applicable environmental legislation and regulatory requirements, it is possible that such compliance
may prove restrictive and onerous.
In addition to potential clean up liability, we may become subject to monetary fines and penalties for violation of
applicable laws, regulations or administrative orders. This may result in the closure or temporary suspension of our
operations or impose adverse restrictions on our operations. We may also, in the future, become involved in
proceedings with various regulatory authorities that may require us to pay fines, comply with more rigorous standards
or other requirements or incur capital and operating expenses for environmental compliance. This could have a
material adverse effect on our results of operations.
Further expansions in the Steel Industry in our segment of operation may result in excess capacity,
which may affect our financial condition.
Our plans for expansion envisages setting up of Stock yards and setting up of Franchisee units for manufacturing
quality products under our brand name. Any additional increase in Capacity or competitors following our strategy of
expansion may adversely affect our business.
This could also result in excess capacity in the market. Although our products have so far been able to compete in
terms of quality and price, in domestic markets, no assurance can be given that we will be able to fully utilise our
increased capacity and sell our increased production on competitive terms / terms acceptable to us or at all.
We face substantial competition in Steel Bars from other Manufacturers, which may hurt our revenues.
The Indian Steel Insdustries and in particular Steel Bar segment in which we operate is highly competitive. We
face competition from low cost producers in various small companies specializing in limited segments of the
market. A number of our competitors are larger than us and have greater financial resources. We also may face
competition from new companies that are emerging, who would then attempt to obtain a share of our existing
markets.
Increased competition could result in price reductions, decreased sales, lower profit margins or losses in market
share, any of which could have a material adverse effect on our business, results of operations and financial
condition. We cannot be certain that we will continue to compete successfully against either current or potential
competitors in the future.
Changes in economic conditions may adversely affect our sales.
We operate Steel Bars segment of Steel Industry which is directly related Construction, Infrastructure
and Housing Building Industry. Demand for our products is sensitive to changes in these Industries, cyclical
changes in regional and global economic conditions and changes in consumer demand.
Due to the above factors, there can be no assurance that sales of our products will continue to improve or be
maintained at current levels. A downturn in any of these market segment can have a significant impact on the
selling prices of our products and on our results of operations.
Taxes and other levies imposed by the Government of India or other state governments, as well as other
financial policies and regulations, may have a material adverse effect on our business, financial condition
and results of operations.
Taxes and other levies imposed by the central or state governments in India that affect our industry include customs
duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or
temporary basis from time to time.
(xiii)