KAMDHENU ISPAT LIMITED - Securities and Exchange Board of India

STATEMENT OF TAX BENEFITS
The Company has been adviced by S.Singhal & Co., Auditors of the Company, vide their letter dated September
23,2005 that under the current provisions of the Income Tax Act, 1961 and the existing laws for the time being in
force, the following benefits, interalia, will be available to the Company and the Members. However, an investor is
advised to consider in his own case the tax implications of an investment in the shares from time to time. The
Statement of Tax Benefits certificate from the Tax Auditor of the Company is reproduced below:
To
The Board of Directors
Kamdhenu Ispat Ltd.
5/2, Punjabi Bagh
New Delhi -26
Dear Sir
As Per the existing provisions of the Income Tax Act,1961 and other laws as applicable for the time being in force,
the following tax benefits and deductions are and will, inter-alia be available to M/s KAMDHENU ISPAT LTD and its
shareholders. The benefits discussed below are not exhaustive. The statement is only intended to provide general
information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In
view of the individual nature of the tax consequences, the charging tax laws and each investor is advised to consult
his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue.
We have not express any opinion to provide any assurance as to whether:
(I) the company or its share holders will continue to obtain these benefits in future; or
(ii) the condition prescribed for availing the benefits have been/ would be met with.
(A) BENEFITS TO THE COMPANY UNDER INCOME TAX ACT, 1961:
The Company will be entitled for the following tax benefits in computing the Taxable Income under the Provisions of
the Income Tax Act,1961 (The Act).
1. Under Section 32 of the Act, the Company is entitled to claim depreciation on tangible and intangible assets as
explained in the said section.
2. Subject to compliance of certain conditions laid down in section 35 (1) (iv) of the Act, in respect of any capital
expenditure incurred other than the expenditure incurred on the acquisition of any land, on scientific research
related to the business of the Company, to the extent of expenditure incurred.
3. The Company is eligible for amortization of preliminary expenses being the expenditure on public issue of share
under Section 35D (2) (c) (iv) of the Act, subject to limits specified in sub section (3).
(B). BENEFITS TO THE MEMBERS:
I. UNDER INCOME TAX ACT, 1961:
(a) RESIDENT MEMBERS:
1. Under section 10(34) of the Income tax Act dividend on or after April 2003 is exempted in the hands of individual
and HUF and as per section 115(O) of the Income tax Act any amount declared, distributed or paid by such
company by way of dividend on or after the first day of April 2003 shall be taxed @ 12.5% by the company.
2. In terms of section 10(23D) of the Income Tax Act, all mutual funds setup by public sector bank or public financial
institutions or Mutual Funds registered under the Securities and Exchange Board of India or authorized by the
reserve bank of India, subject to the conditions specified therein are eligible for exemption from Income Tax on
all their income, including income from investments in shares of the company.
3. In accordance with and subject to the conditions and to the extent specified in Section 54 EC of the Income Tax
Act, 1961, the Shareholders would be entitled to exemption from long Term Capital Gains on sale of shares of
the company upto investment made out of long Term Capital Gains arising from the sale of such shares in any
specified Bonds issued by National Bank for Agriculture and Rural Development (NABARD), National Highways
Authority of India (NHAI), Rural Electrification Corporation of India (RECI), Small Industries Development Bank
of India (SIDBI) and National Housing Bank (NHB).
4. In case of shareholder, being an individual or Hindu Undivided Family, in accordance with and subject to the
conditions and to the extent specified in Section 54F of the Income Tax Act, 1961 the shareholders would be
entitled to exemption from Long Term Capital Gains on sale of their shares in the company upon investment of
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