Bankers. Auditors. Share Transfer Agent

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5 Bankers Auditors 8 th Floor, Birla Building 9/1, R.N. Mukherjee Road Kolkata Phone No : / / Fax No : , CIN: L17119WB1919PLC Website : Axis Bank Ltd. Bank of Baroda DBS Bank Ltd. HDFC Bank Ltd. ICICI Bank Ltd. IndusInd Bank Ltd. Kotak Mahindra Bank Ltd. Karur Vysya Bank Ltd. Punjab National Bank State Bank of Hyderabad State Bank of India Lead Bank Standard Chartered Bank The South Indian Bank Ltd. Union Bank of India YES Bank Ltd. Share Transfer Agent Phone No : Fax No : Members seeking any information on the Annual Report & Accounts are requested to send their queries to the Company at least ten days before the date of the Meeting. Members are also requested to bring their copies of Annual Report to the Meeting. 4

6 CONTENTS Notes 81 5

7 NOTICE TO THE MEMBERS Ninety-seventh Annual General Meeting of KESORAM INDUSTRIES LIMITED will be held at A.M. on Thursday, 28 th General Business: st st 4. RESOLVED THAT RESOLVED THAT ` 8.31 RESOLVED THAT 6

8 Basic Salary & Allowances : Perquisites : Car: business; or attending Meetings of the Boar RESOLVED FURTHER : 9/1, R. N. Mukherjee Road, 25 th May, 2016 Company Secretary Notes: nd th 7

9 5. 6. at st July, 2016, 7. if any, along with address and not to the /Registrar and Share Transfer Agent electronic where shares are Transfer Agent where shares are write to the Investor Education and 8

10 13. Share Transfer Agent. th Affairs. to their registered addresses. at the Annual General Meeting. Meeting the Agent. 9

11 A.M. on Monday, 25 th July, 2016 and ends at 27 th July, i.e. 21 st July, 2016, i.e. record date, attending the Meeting, Shareholder Login. Login. and also when of 10

12 but before the cut-off date at the following toll free No.: the cut-off date. and on the website of NSDL th Floor, Birla Building, 9/1 R N Mukherjee Road, Kolkata st ` the Resolution. interest in the Resolution. 11

13 st st ` and the Board ; th st 12

14 ` None th to : ` ` if any: Nil 13

15 IV. Disclosures: 9/1, R. N. Mukherjee Road, Kolkata th May, 2016 By Order of the Board Gau Company Secretary 14

16 FOR THE YEAR ENDED 31 st MARCH, 2016 st FINANCIAL RESULTS ` / crore ` (Net of transfer from Revaluation Reserve) Loss Carried Forward DIVIDEND ` st ` ` / crore st Add Shares of ` ` ` 15

17 SECURED REDEEMABLE NON-CONVERTIBLE DEBENTURES ` in full on 13 th ` `` `` ` ` `` of ` ` viz st 3. st th 4. 16

18 RISK MANAGEMENT GOING CONCERN STATUS INTERNAL FINANCIAL CONTROL The Board has inter alia of its businesses. NUMBER OF BOARD MEETINGS III AUDIT COMMITTEE st th th st 17

19 st of business. V php#slide_5. st as at 31st th August, 2014, read with Order dated 24 th st VIGIL MECHANISM STATUTORY AUDITORS COST AUDITORS st 18

20 ` ( ` / Lakh) SECRETARIAL AUDITOR belief, states that: ended 31 st 19

21 DIRECTORS th on 31 st 15 th st th th st th st th EXTRACTS FROM ANNUAL RETURN 20

22 I II III IV V AOC -2 VI VII VIII IX during the year. Chairman Whole-time Director & Manjushree Khaitan Executive Vice Chairperson Date: 25 th May, 2016 Company Secretary Directors 21

23 MANAGEMENT DISCUSSION & ANALYSIS ` ANNEXURE - I / crore 1. EBIDTA after tax. st Tyres vis-à-vis 22

24 Rayon Date: 25 th May, 2016 Whole-time Director & Company Secretary Chairman Manjushree Khaitan Executive Vice Chairperson Directors 23

25 ANNEXURE - II BOARD OF DIRECTORS st March, 2016: As on 31 st Directors Designation Category No. of other held * No. of held in Listed As a Shareholding in the 4 None None None Manjushree Khaitan Pesi Kushru Choksey*** 2 None None None None None None None Nil Vinay Sah None None None None Nil Kashi Prasad Khandelwal None Nil 2 2 None None Nil Additional None None None None Nil Lee Seow Chuan None None None None Nil 2 None 2 None Nil * Excluding Kesoram Industries Limited, Private Companies, Companies under Section 8 of the Companies Act, 2013 ( the Act ) and foreign companies. ** Only two Committees viz., the Audit Committee and the Stakeholders Relationship Committee have been considered for this purpose in terms of Clause 49(II)(D) of the Listing Agreement & Regulation 26(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, *** Deceased 26 th December, 2015 and therefore his details are not available. # Resigned effective 8 th June,

26 st th th August, 2015, 12 th th th th th nd th th 12 th No. of Board Meetings Attendance AGM 3 No Manjushree Khaitan 10 Yes Pesi Kushru Choksey 1 No (deceased 26 th December, 2015) 4 No Vinay Sah Yes Kashi Prasad Khandelwal 10 Yes 10 Yes (resigned effective 8 th June, 2015) 0 N.A. Lee Seow Chuan No 10 Yes Sl.No. 1 Board Meetings ` ` 1 2,50,000-2 Manjushree Khaitan ** Pesi Kushru Choksey 75,000 50, ,50,000 5,20,000 5 Vinay Sah*** 5,00,000 5,50,000 Kashi Prasad Khandelwal 8,25,000 8,40, ,25, ,23,594 5,78, ** - - Total 25

27 1 Exclusive of 0.5% Swachh Bharat Tax (chargeable w.e.f ). * Includes non-statutory Committees of the Company as well as Meeting of Independent Directors. ** Sitting fee is not payable to Whole-time Directors. *** Fees paid to Life Insurance Corporation of India ( LIC ). # Inclusive of taxes borne by the Company. ## Resigned effective 8 th June, th st th st st `/lakh Others : Total Manjushree Khaitan th February, 2013 at th st to 4 th `/lakh Nil 7.20 Total vis-a-vis st 26

28 3. AUDIT COMMITTEE As on 31 st Chairman effective ) Pesi Kushru Choksey (Chairman till ) No. of Meetings attended 4 1 Vinay Sah 5 Kashi Prasad Khandelwal 8 8 (from 01/04/2015 to 08/06/2015) 0 Lee Seow Chuan 5 th th August, 2015, 19 th th th nd th th th th

29 As on 31 st th th th th nd (Chairman effective ) 2 Manjushree Khaitan 1 (Ceased to be a Member of the Committee after SEBI (LODR) Regulations,2015 became effective) Pesi Kushru Choksey (Member till ) 0 Kashi Prasad Khandelwal 3 Vinay Sah 3 th 5. At its Meeting held on 29 th th th August, 2015, 12 th 22 nd th Vinay Sah 4 Kashi Prasad Khandelwal 5 28

30 Nature of Grievances Investors directly Stock SEBI R O C received during Total redressed outstanding as on 31 st March, 2016 Warrants/NECs Share / Debenture Share/ Debenture 9 1 Nil Nil Nil 2 Nil Nil Nil 2 2 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil lodged for Rights Issue Reason for Non- in Rights Issue 12 1 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 11 Nil 3 Nil Nil TOTAL Nil Nil Total No. of Shareholders No. of Outstanding Shares lying in Account As on 1 st 4,009 1,53, st 4,000 1,53,507 th th th 29

31 Manjushree Khaitan 2 th 9. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS raison d ètre GENERAL BODY MEETINGS

32 th st thereunder. st th 1 st th thereunder. thereunder. th viz. st July, 2013: 31

33 Date of Result - 3 rd th th st th ` 3. Result : th March, 2016 th th rd ` ` ` ` 32

34 Result : dated 16 th Date of Result - 3 rd May 2016 th th st th ` Result : : 33

35 13. DISCLOSURES 1. th 2. vis-à-vis st th June, 2015 and 30 th 7. As on 31 st 13 th Regulations,

36 MEANS OF COMMUNICATION.: GENERAL SHAREHOLDER INFORMATION AM. Day Date Venue Thursday 28 th st st Date of Book Closure 22 nd th 35

37 BSE NSE KESORAMIND CSE BSE INE087A01019 US : ` / Share Month High Close 27, May, 15 27, June, 15 27, July, August, ,

38 Month NSE Nifty Close High Close 8, May, June, July, 15 8, August, 15 7, , , , ` / Share vis-a-vis vis-a-vis 37

39 g. Registrar and Share Transfer Agent: Phone Nos.: to 54 Fax No.: st March, 2016 Category No. of Share holders Share holders No. of Shares ,80,04,989 Mutual Funds / UTI ,52, ,32, ,18, , , ,18,33,

40 ,53, ,41,875 Total Shares held No. of Share holders Shareholder No. of Shares Shares ,80, , ,25, , ,103 25,37, , ,93,83, Total th Floor, 9/1 R. N. Mukherjee Road, Kolkata st l. Outstanding GDRs st th 39

41 Section Factory Location Run under style of Karnataka : th Phone : Fax: Andhra Pradesh Phone : / th Phone : Fax: Tyres and Tubes 7 th Floor, Birla Building 9/1, R. N. Mukherjee Road Kolkata Birla Tyres P.O. Nayasarai, Rly. Station: Kuntighat, On Howrah-Katwa Route, Dist. Hooghly, West Bengal th Floor Kolkata Phone : Fax: Rayon Foundries Bansberia, Dist. Hooghly West Bengal Kolkata Fax: Foundries under 19, B. T. Road, Khardah, Phone : Kolkata Hindusthan * Undertaking spun off into Cygnet Industries Limited ( Cygnet ) effective close of business 31 st March Cygnet is a wholly owned subsidiary of the Company. ** Disposed of during the year. 40

42 o. : 8 th Floor, Birla Building, 9/1, R. N. Mukherjee Road, Kolkata Phone No.: Fax No. : Or Registrar and Share Transfer Agent: Phone Nos.: to 4054 Fax No.: th 9/1 R. N. Mukherjee Road Kolkata Chairman Whole-time Director & Manjushree Khaitan Executive Vice Chairperson Date: 25 th May, 2016 Company Secretary Directors 41

43 DECLARATION Regulations, Dated: 25 th ended on 31 st Kolkata Date: 25 th May,

44 ANNEXURE - III st 1. OBJECTIVE DEFINITIONS 2.1. Act 2.2. Board 2.3. Directors ROLE OF THE COMMITTEE inter alia will be the following: 43

45 CHAIRMAN SECRETARY NOMINATION DUTIES

46 10. REMUNERATION DUTIES Personnel EVALUATION CRITERIA inter alia, 45

47 ANNEXURE - IV ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBIL ITY (CSR) ACTIVITIES ` ` *Dividend income of ` 4.38 crore, ` 5.77 crore and ` Rule 2(f) of the Companies (Corporate Social Responsibility Policy) Rules, Nil 46

48 Sl. No or activity Sector in covered undertaken outlay Direct or through i Date: 25 th May, 2016 Chairperson of CSR Committee 47

49 FORM NO. AOC-2 (Pursuant to 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014) ANNEXURE - V : held for sale. ` Chairman Whole-time Director & Manjushree Khaitan Executive Vice Chairperson Date: 25 th May, 2016 Company Secretary Directors 48

50 KESORAM INDUSTRIES LIMITED Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31 st MARCH, 2016 ANNEXURE - VI [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] TO, THE MEMBERS, KESORAM INDUSTRIES LIMITED I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by KESORAM INDUSTRIES LIMITED ( the Company ). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon. 31 ST MARCH, 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and year ended on 31 ST MARCH, 2016 (v) th th st st th Annual Report & Accounts

51 KESORAM INDUSTRIES LIMITED etc. mentioned above. I further report that carried out in compliance with the provisions of the Act. meeting and for meaningful participation at the meeting. Annexure I. This report should be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report. ANNEXURE - I The List of Various Applicable Laws to the Company 50 Annual Report & Accounts

52 KESORAM INDUSTRIES LIMITED ANNEXURE - A The Members KESORAM INDUSTRIES LIMITED My report of even date is to be read along with this letter. opinion on these secretarial records based on my audit. happening of events etc. with which the management has conducted the affairs of the company. th Annual Report & Accounts

53 ANNEXURE - VII st March, Vinay Sah :1 Kashi Prasad Khandelwal :1 Lee Seow Chuan :1 Directors : Kashi Prasad Khandelwal Lee Seow Chuan reasonable. inter alia, 52

54 ` and ` th June, inter alia the year. 53

55 ANNEXURE - VIII AND EXCHANGE EARNINGS AND OUTGO [Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Account) Rules, 2014] 54 A. CONSERVATION OF ENERGY: Installation of Tyre Rayon

56 Tyre None Rayon None ` Tyre ` ` B. Tyre Rayon Tyre 55

57 Rayon None ` Tyre ` Rayon Nil C. FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars ` / crore 56

58 FORM NO. MGT-9 ANNEXURE - IX EXTRACT OF ANNUAL RETURN as on the year ended on 31 st March, 2016 [Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules,2014] I. REGISTRATION AND OTHER DETAILS: th Fax: Phone: to 4053, Fax: total stated:- services ASSOCIATE : Associates 1 8th Floor, Birla Building, 9/1, R. N. Mukherjee Road, Kolkata

59 as i) Category-wise Share Holding Category of Shareholders No. of Shares held as on 1 st No. of Shares held as on 31 st March, 2016 Total Total shares Total Total shares during the year Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Total shareholding Nil Institution s Non-Institutions shareholders holding ` 1 lakh

60 shareholders holding `1 lakh ` Custodian for GDRs & ADRs (ii) Shareholding of Promoters Sl. Sharehold Shareholding as on 1 st Share holding as on 31 st March, 2016 No. No. of Shares of total Shares of to total shares No. of Shares of total Shares of the / red to total shares ge in share holding during the year Rajashree Birla Jayashree Mohta Manjushree Khaitan Vidula Jalan M/s. Aditya Marketing B.K. Birla Foundation Birla Institute of

61 17 Industries Ltd Total *deceased on 28/03/2015. Shares were transmitted within promoter group. (iii) Change in Promoters Shareholding (please specify, if there is no change) Sl. No. Shareholding as on 1 st Shareholding as on 31 st March, 2016 No. of Shares No. of Shares Manjushree Khaitan *deceased on 28/03/2015. Shares were transmitted within promoter group. (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sl. No. Shareholding as on 1 st Shareholding as on 31 st March, 2016 No. of Shares Shares of the No. of Shares 1 Jhunjhunwala Rekha Rakesh * India Century Enka Ltd Bharat Jayantilal Patel** * EOS Multi Strategy Fund Ltd * Value Fund EM Resurgent Fund

62 13 India Infoline Ltd * the shareholding had ceased and was not part of top 10 shareholders on 31/03/2016. ** was a top ten shareholder on 31/03/2015 but was no more a top ten shareholder on 31/03/2016. *** was a top ten shareholder on 31/03/2016 (v) Shareholding of Directors and Key Managerial Personnel: Sl. No. Shareholding as on 1 st Shareholding as on 31 st March, 2016 No. of Shares No. of Shares V. INDEBTEDNESS Manjushree Khaitan P K Choksey* * deceased on 26/12/2015 ** resigned effective 04 /05/2016 the the st Secured Loans Unsecured Loans ` / not due Total Change in during the Financial Year Addition Net Change the end of the Financial st not due Total 61

63 VI. REMUNERATION OF DIRECTORS AND KEY A and/or Manager: Sl. No. Jain Manjushree Khaitan Total ` u/s Nil salary Nil Nil Nil 2. Nil Nil Nil 3. Sweat Nil Nil Nil 4. - others 5. Others - Nil Nil Nil 18,00,000 1,00,000 7,20,000 Nil 25,20,000 1,00,000 Directors: Choksey (deceased on ) Ghosh Banerjee * Total ` Fees for attending Meetings 1,25,000 8,70,000 14,25,000 Nil Nil Nil Nil Nil Nil Others Nil Nil Nil Nil Nil Nil 1,25,000 16,65,000 62

64 Vinay Sah Steven John Dekrey *(resigned on 08/06/2015) ` Fees for attending Meetings 2,50,000 10,50,000 Nil 13,00,000 Nil Nil Nil Nil Others Nil Nil Nil Nil 2,50,000 10,50,000 Nil 13,00,000 * Includes Income Tax borne by the Company Sl. No. of Key Managerial Chief Business Secretary Chief Financial Total ` 1. 3,55,74,150 35,41,811 1,90,83,032 3,15,08,112 8,72,98,993 1,97,122 44,35,801 Nil Nil Nil Nil Nil 2. Nil Nil Nil Nil Nil 3. Sweat Nil Nil Nil Nil Nil 4. - others Nil Nil Nil Nil Nil 5. Others - PF Nil 5,93,280 19,90,359 Total 9,37,25,153 * resigned effective 04 /05/2016 ** appointed effective 26/02/

65 OFFENCES: SECTION OF BRIEF AUTHORITY [RD/NCLT/COURT] IF ANY Nil B. DIRECTORS Nil C. OTHER OFFICERS IN DEFAULT Nil 64

66 ` / crore 1 NON CURRENT ASSETS a. Net Fixed Assets d. Other Non Current Assets CURRENT ASSETS 1. NON CURRENT LIABILITIES 2. CURRENT LIABILITIES Figures for the previous year(s) have been regrouped / rearranged where considered necessary. 65

67 ` / crore

68 TO THE MEMBERS OF KESORAM INDUSTRIES LIMITED for the year ended on that date. 67

69 Kolkata Date : 25 th Prabal Kr. Sarkar Partner 68

70 69

71 Kolkata Date : 25 th Prabal Kr. Sarkar Partner 70

72 ` ` freehold not arise. 71

73 `/ , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

74 `/ , , to , , , , Andhra Sales Tax High Court Pradesh Andhra Sales Tax , Tribunal Pradesh Sales Tax Bihar VAT VAT Tribunal 73

75 `/ Central Sales Central , Assessing Central Sales Central , , High Court Central Sales Central , , Joint Central Sales Central , , , Joint , , , , Delhi Sales Sales Tax Assessing VAT

76 `/ Jharkhand VAT , Joint Jharkhand VAT Tribunal VAT 2005 Sales Tax Maharashtra VAT Joint Uttarakhand VAT High Court , ACT, 2003 Taxation Tribunal W.B VAT ACT, VAT Assessing Authority

77 `/ WB Sales Tax Sales Tax Additional WB Sales Tax Sales Tax Senior Joint were obtained. ` Kolkata Date : 25th Prabal Kr. Sarkar Partner 76

78 BALANCE SHEET AS AT 31ST MARCH, 2016 ` / crore Notes 31st March, st March, 2015 I. EQUITY AND LIABILITIES (1) SHAREHOLDERS FUND (a) Share capital (b) Reserves and surplus (22.42) (2) NON CURRENT LIABILITIES (a) Long term borrowings 5 3, , (b) Deferred tax liabilities (net) , , (3) CURRENT LIABILITIES (a) Short term borrowings 7 1, , (b) Trade payables 8 Total outstanding dues of micro enterprises and small enterprises Total outstanding dues of creditors other than micro enterprises and small enterprises (c) Other current liabilities (d) Short term provisions , , TOTAL 6, , II. ASSETS (1) NON CURRENT ASSETS (a) Fixed Assets (i) Tangible Assets 11 1, , (ii) Intangible Assets (iii) Capital work in progress , , (b) Non current investments (c) Long Term loans and advances (d) Other non current assets , , (2) CURRENT ASSETS (a) Current Investments (b) Inventories (c) Trade receivables (d) Cash and bank balances (e) Short term loans and advances 13 2, , (f) Other current assets , , TOTAL 6, , Basant Kumar Birla This is the Balance Sheet referred to in our report of even date For Price Waterhouse Chairman Firm Registration Number E Tridib Kumar Das Manjushree Khaitan Chartered Accountants Whole-time Director & Executive Vice Chairperson Prabal Kr. Sarkar Partner Enrico Malerba Amitabha Ghosh Membership No Kashi Prasad Khandelwal Directors Place: Kolkata Gautam Ganguli Sudip Banerjee Date : 25 th May, 2016 Company Secretary Lee Seow Chuan 77

79 78 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016 `/ crore, except per share data Notes INCOME Revenue from operations (Gross) 18 4, , Less: Excise Duty Revenue from operations (Net) 4, , Other Income Total Revenue (I) 4, , EXPENSES Cost of materials consumed 20 1, , Purchases of stock-in-trade Work-in-progress Other expenses 23 2, , Total Expenses (II) 4, , Depreciation and amortization expenses Finance costs Exceptional item (net) Tax Expenses: Current Tax - - Deferred Tax (34.50) (31.21) Tax expense of discontinued operations - - Discontinuing Operations [Nominal Value per share: ` 10 ( : ` 10)] (a) Basic - ` (33.40) (b) Diluted - ` (33.40) Basant Kumar Birla Chairman This is the referred to in our report of even date For Price Waterhouse Firm Registration Number E Tridib Kumar Das Manjushree Khaitan Chartered Accountants Whole-time Director & Executive Vice Chairperson Prabal Kr. Sarkar Enrico Malerba Partner Amitabha Ghosh Membership No Kashi Prasad Khandelwal Directors Place: Kolkata Gautam Ganguli Sudip Banerjee Date : 25 th May, 2016 Company Secretary Lee Seow Chuan

80 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016 Year ended 31st March, 2016 ` / crore Year ended 31st March,2015 Depreciation and amortisation Provision for bad and doubtful debts Provision for doubtful advances Provision for dimunition in value of investments Finance costs Interest income (3.72) (6.91) Dividend income from long term investment (other than trade) (3.92) (4.38) Taxes paid (net of refunds) Proceeds from sale of Long Term Investments Interest received Income from long term investments (other than trade) Dividends paid (0.47) (0.31) Finance cost paid (678.92) (678.49) Proceeds from Issue of Equity Shares Proceeds from Issue of OCRPS

81 Proceeds from Repayment of Net increase in cash and cash equivalents Cash and Cash Equivalent tranferred to Cygnet Industries Ltd. (25.78) - Cash and Cash Equivalent tranferred to Camden Industries Ltd. (0.02) - Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year st March, st March, 2015 Cash on hand Cheques on hand Others On deposit accounts On unpaid dividend accounts For Price Waterhouse Firm Registration Number E Chartered Accountants Prabal Kr. Sarkar Partner Membership No Place: Kolkata Date : 25 th May, 2016 Tridib Kumar Das Whole-time Director & Enrico Malerba Gautam Ganguli Company Secretary Basant Kumar Birla Chairman Manjushree Khaitan Executive Vice Chairperson Amitabha Ghosh Kashi Prasad Khandelwal Sudip Banerjee Lee Seow Chuan Directors 80

82 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016 Kesoram Industries Limited (the Company) is a public company domiciled and incorporated under the provisions of the Indian multi location company. Cement and automobile tyre business are its core businesses and it also had interest in rayon and cellulose paper, cast iron spun pipes and caustic soda & allied chemicals. Its shares are listed on three stock exchanges in India ( Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange) and its Global Depositary Receipts (GDR) are listed on Luxembourg Stock Exchange. The Company markets its automobile tyres under the brand name "Birla Tyres" and cement is marketed under "Birla Shakti" brand, Rayon yarn and transparent paper are marketed as "Kesoram Rayon" and "Kesophane" respectively. standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation shall continue to apply. sition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating at the then current value. (f) Depreciation is provided on pro-rata basis using straight line method over the estimated useful lives of assets and are same (g) Leasehold land is amortised over the lease period. a straight line basis over a period of three years from the date of capitalisation. Capitalisation costs include license fees and asset is implemented for use. 81

83 necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, Cash generating units assets are assessed for possible impairment at Balance Sheet date based on external and internal sour- 2.6 Investments provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually. materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year change differences arising on reporting of long term foreign currency monetary items (i) relating to acquisition of deprecia- foreign Exchange Rates'. can be reliably measured Other Income Interest: Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend: 82

84 are rendered. recognised as expenses on accrual basis and funded. carry any further obligations, apart from the contributions made on monthly basis. In respect of certain employees, Provident Fund contributions are made to a Trust administered by the Company. The interest tained by the Trust set up by the Company is additionally provided for. expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlements as at the year end. an unconditional right to defer its settlement for 12 months after the reporting date. Contribution to Central Government administered Employees' State Insurance Scheme for eligible employees is recognised 2.13 Taxes on Income Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax that have been enacted or substantially enacted by the Balance Sheet date. recognised to the extent that there are deferred tax liabilities offsetting them Government Grants 83

85 2.16 Lease Such assets acquired are capitalised at fair value of the asset or present value of the minimum lease payments at the inception the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value. historical information on the nature, frequency and average cost of obligations and management estimates regarding possible segment representing a strategic business unit that offers different products and serves different markets. The company op- The company accounts for intersegment sales and transfers at cost

86 3. SHARE CAPITAL ` 31st March, st March, 2015 AUTHORISED 55,00,00,000 Equity Shares of ` 10 each ,50,00,000 Preference Shares of ` 100 each ` 10 each fully paid up Preference Shares of ` 100 each fully paid up st March, st March, 2015 Number of shares outstanding at the beginning of the year 109,768, ,768,650 31st March, st March, 2015 Number of shares outstanding at the beginning of the year - - (b) Rights, preferences and restrictions attached to shares The company has equity shares having a par value of ` holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their shareholdings. The company has during the year issued Optionally Convertible Redeemable Preference Shares ( OCRPS ) shares having a par value of ` 100 per share. OCRPS carry a cumulative dividend of 0.001% per annum per OCRPS. Each OCRPS carry a right of conversion into 10 equity shares of extended time as may be legally permissible based upon such term and conditions and at such price as may be mutually agreed. (c) Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company. Sl. 31st March, st March, Pilani Investments and Industries Corporation Limited 27,338, ,338, Sl. 31st March, st March, IndusInd Bank Ltd. 750, ,

87 4. RESERVES AND SURPLUS ` crore 31st March, st March, Balance at the beginning of the year Balance at the beginning of the year General Reserve (a) Doubtful Debts & Contingencies (b) Share Buy Back Reserve Balance at the begining of the year (16.78) - (15.91) (16.78) Balance at the beginning of the year (588.35) (221.67) Transfer to Debenture Redemption Reserve - - Proposed Dividend - - Tax on Proposed Dividend - - (451.23) (588.35) (22.42) 86

88 ` 31st March, st March, st March, st March, 2015 Debentures Redeemable # Non-Convertible Debentures Indian rupee loan # 2, , Foreign currency loan # From others Indian rupee loan # Finance lease obligation Deposits from selling agents and others other current liabilities (refer Note 9) - - (559.33) (695.84) ties are to be repaid in equal instalments over the period of the respective loans. continue to be hypothecated and mortgaged respectively against the above mentioned loans. The assets of aforesaid subsidiary have subsequently been vacated from such charge 87

89 ` crore 31-Mar Mar % Non Convertible Debentures First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of various units of the company. Repayment at the end of 5 years from Interest payable 10.50% p.a. 31-Mar Mar First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of various units of the company. Repayment in quarterly instalments after a 27 month moratorium period from the manner:(a) First 10 instalments of ` 33 crore each; (b) Next 2 instalments of ` 35 crore each. Interest Payable Base rate plus 1% p.a First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of various units (excluding land at Solapur) of the company. Repayment in 40 unequal quarterly eight instalments of 1.25% each (b) next eight instalments of 1.875% each (c) next 8 instalments of 2.50% each (d) next 8 instalments of 3.125% each (e) next 8 instalments of 3.75% each. Interest payable Base Rate plus 1% p.a First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company Interest is payable base rate plus 1.25% p.a First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company. Repayable by four equal annual instalment commencing from 24 months term premium of 0.15% First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company. Repayable in 20 equal quarterly instalments of ` 5 crore each commencing after the completion of 24 months from the start of commercial operations. Interest payable monthly base rate plus 2.50% p.a Carried Over 88

90 ` 31-Mar Mar First pari passu charge on all movable and future) of various units of the Company. Repayable in 20 equal quarterly instalments commencing from the 27th month from the date of disbursement. Interest is payable base rate assets (non-agricultural land) located at and 42, Garden Reach Road, Kolkata and subservient charge on current assets and Pledge of certain non-current investments. Repayment at the end of 2 years from payable Base rate assets (non-agricultural land) located at and 42, Garden Reach Road, Kolkata and subservient charge on current assets and Pledge of certain non-current investments. Repayment in 12 equal quarterly instalments after moratorium of 24 months. Interest payable Base rate plus 0.25% p.a First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company. instalments starting from June 2012 of ` Crore each and balance four instalments of ` 10 Crore each Interest is payable base rate plus 1.5% p.a. plus term premium First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company. Repayable in four annual instalments ` 100 of ` 200 Crore each). Interest is payable annual reset First pari passu charge on all movable and future) and second pari passu charge on all current assets (both present and future) of the various units of the Company. Carried Over Repayable in 12 quarterly instalments commencing from the quarter ending February, 2014 distributed as 11 instalments of ` Crore each and the last instalment of ` Crore in November, Interest is payable base rate plus 2% p.a. 89

91 ` 31-Mar Mar First pari passu charge on all movable & future) of various units (excluding Repayment in last 3 years in 12 quarterly quarterly instalments of ` Crore beginning Q3 FY Last instalment of ` Crore First pari passu charge on all movable & future) of various units (excluding To be repaid in 28 Quarterly instalment after a moratorium period of one year. Interest is payable base rate First pari passu charge on all movable and future) of various units of the Company. Repayment commencing after a moratorium of 12 months in 6 quarterly instalments of ` 1.5 Crore each, next 4 quarterly instalments of ` 3 Crore each, next 17 quarterly instalments of ` 4.39 Crore each and last instalment of ` 4.37 Crore thereafter. Interest is First pari passu charge on all movable and future) of various units of the Company. Repayment commencing after a moratorium of 12 month in 6 quarterly instalments of ` 0.75 Crore each, next 4 quarterly instalments of ` 1.5 Crore each, next 17 quarterly instalments of ` 2.20 Crore each and last instalment of ` 2.10 Crore thereafter. Interest is First pari passu charge on all movable and future) of various units of the Company. Repayment to be made in 28 quarterly instalments after the initial holiday period of 12 months. (First 6 quarters ` 1.5 Crore each, next 4 quarters ` 3 Crore each, next 17 quarters ` 4.39 Crore each, last quarter ` 4.37 Crore). Interest payable monthly , First pari passu charge on all movable and future) of the various units of the Company. Repayment in 20 equal quarterly instalments of ` 7.50 crore each after moratorium of 24 months from date Base Rate plus 2.50% p.a. 90

92 31-Mar Mar-15 ` assets (non-agricultural land) located at 16 equal quarterly instalments after a moratorium period of 24 months. Interest assets (non-agricultural land) located at and 42, Garden Reach Road, Kolkata and subservient charge on current assets and Pledge of certain non-current investments. Repayment in 12 equal quarterly instalments after moratorium of 24 three 13.71% p.a. For remaining Base rate plus 2.75% p.a Secured against hypothecation of current assets and second charge on movable and future) of various units of the Company. Repayable on different maturity dates varies from libor plus bps. ` 31-Mar Mar-15 HDFC Ltd First pari passu charge on all movable and future) of various units of the Company. Principal repayment shall have a moratorium of 8 calendar quarters from the repayment in 12 equal calendar quarters the end of the moratorium period. Interest payable at the end of calendar IFCI Ltd First pari passu charge on all movable and future) of various units of the Company. The loan shall be repaid in 28 structured quarterly instalments commencing from disbursement. Interest is payable monthly IFCI Ltd First pari passu charge on all moveable present and future) and second pari passu charge on all current assets (both present and future) of various units of the company. Repayment in 19 equal quarterly instalments from 18th month from payable benchmark rate plus 1.80% p.a Carried Over 91

93 ` 31-Mar Mar First pari passu charge on all movable and future) of various units of the Company. Repayable in 28 quarterly instalments ` 3.75 Crore, 4 quarters of ` 7.5 Crore and 18 quarters of ` Crore each. Interest is payable First pari passu charge on all movable & future) and Second pari passu charge on all the current assets (both present & future) of various units of the Company. Repayable in 12 equal quarterly instalments commencing from the disbursement. Interest is payable term lending rate minus 4.50% First pari passu charge on all movable and future) and second charge on all current assets (both present and future) of the various units of the Company and charge of other term lenders. Repayment over a period of 8 years (including 4 quarters of moratorium from over 32 quarters. Interest payable base rate of State Bank of India plus 2.80% p.a

94 `crore 31st March, st March, 2015 Business losses Provision for contingencies Others B (a) During the year the Company has recognised deferred tax assets on business losses to the extent of net deferred tax liability. `crore 31st March, st March, 2015 Term Loan From Bank Packing Credit Loan # Working Capital Loan From Bank Working capital demand loan # # Packing credit loan # 69.84# Term Loan From Bank Indian rupee loan Foreign currency loan Deposits Deposit from others # (a) ecated and mortgaged against the above mentioned loans. The assets of aforesaid subsidiary have subsequently been vacated from such charge.. 93

95 `crore 31st March, st March, 2015 (a) Total outstanding dues of micro enterprises and small enterprises (Refer Note 37) (b) Total outstanding dues of creditors other than micro enterprises and small enterprises (ii) Others ` 31st March, st March, 2015 Current maturities of long-term debt (Refer note 5) Current maturities of long-term Finance lease (Refer note 5) Interest accrued and due on deposits and others Interest accrued but not due on deposits and others Unpaid dividends Unpaid matured deposits and interest accrued thereon Statutory dues Liability for purchases of capital assets Retention & Earnest deposits Other Payables (a) There are no amount due and outstanding to be credited to Investor Education and Protection Fund as at Balance Sheet Date other than unclaimed dividend of `` 1,34,437) pertaining to cases under litigation regarding 10. SHORT TERM PROVISIONS `crore 31st March, st March, 2015 Provision for gratuity [Refer Note 22 (a)] ` Provision for leave encashment (unfunded) ` Crore ` crore)] Provision for disputed statutory dues Provision for Contingencies

96 11. FIXED ASSETS ` / crore GROSS BLOCK DEPRECIATION AND AMORTIZATION NET BLOCK Particulars As at Additions Deletions Transfer of Discontinuing Adjustments As at As at For the year Depreciation for Transition On Deletions Transfer of Discontinuing As at As at As at 31st Mar during during Undertakings Operation during 31st Mar 31st Mar (excluding the discontinuing Adjustment during the Undertakings Operation 31st Mar, 31st Mar, 31st Mar, 2015 the year the year [Refer Note [Refer Note the year Discontinuing Operation recorded year [Refer Note [Refer Note ] 51] Operation) against 25] 51] surplus balance in Statement of I. Tangible Assets: Land : - Freehold (2.25) Leasehold Buildings Plant and Equipments 2, , , , , , Furniture and Fixtures Vehicles Others: - Livestock Railway Siding Assets taken on Finance Lease - Vehicle (A) 3, (2.25) 3, , , , , II. Intangible Assets: Computer Software Technical Knowhow (B) Total (A+B) 3, (2.25) 3, , , , , Previous Year 5, , (1.47) 3, , , , of componentisation to the extent of ` crore ( : Nil) for continuing operations and ` 0.57 crore ( : Nil) for discontinuing operations `crore `crore - Building Plant and Equipment (iii) Freehold land includes land given on operating lease to third party Freehold Land Buildings Plant and Equipments (d) The title deed of acres of land amounting to ` crore is yet to be executed in favour of the Company. - 95

97 12. INVESTMENTS ` / Share CURRENT INVESTMENT ` Cavendish Industries Limited (Fully paid up) [Refer Note 44] 700,046, NON CURRENT INVESTMENT (valued at cost less provision for other than temporary diminution) Birla Buildings Ltd. 30, Kesoram Insurance Broking Services Ltd. 143, Less : Provision for other than temporary diminution Padmavati Investment Ltd. 7, Vasavadatta Services Ltd. 18, Quoted 233, Less : Provision for other than temporary diminution Less : Provision for other than temporary diminution

98 Non-current Current `crore 31st March, st March, st March, st March, 2015 Capital advances Security Deposits (A) Considered doubtful [Refer Note 44] Less: Provisions for doubtful advances (6.77) (6.77) - - (C) - - 1, , sale of undertaking [Refer Note 51] Considered Good Considered doubtful Less Provision for doubtful advances - - (24.57) (11.66) Security Deposits Prepaid Expenses Loan to employees Loan to other body corporate Non-current Current ` crore 31st March, st March, st March, st March, 2015 Non current bank balance (Refer Note 17) Insurance claim Interest accrued on deposits Unamortised premium on loan restructuring Others Total INVENTORIES `crore 31st March, st March, 2015 `` 8.78 crore)] Work-in-Progress Finished Goods [Includes goods in transit `` 7.19 crore)] Stores and Spare Parts [Includes material in transit `` 0.72 crore)]

99 `crore 31st March, st March, 2015 Outstanding for a period exceeding six months from the date they are due for payment Secured - Considered good Unsecured - Considered good Unsecured - Considered doubtful Less: Provision for doubtful debts Other debts Secured - Considered good Unsecured - Considered good ) `crore Non-current Current 31st March, st March, st March, st March, 2015 Cash on hand Cheques on hand On Current accounts Others 12 months months but less than 12 months On unpaid dividend accounts current assets (Refer Note 14) - (0.48) (a) Other bank balances on deposits accounts includes : ` 0.90 crore and ` 1.37 crore respectively. The restrictions are primarily on account of bank balances held in unclaimed dividends accounts. 98

100 `crore Sale of products 4, , Other operating revenues , , Less: Excise duty Figures for discontinuing operations (Refer Note 51) `crore (a) Interest Income - On bank and other deposits On income tax refund (b) Dividend Income - from long term investments (c) Claims from insurance company Figures for discontinuing operations (Refer Note 51) `crore Opening Stock [Excluding discontnuing operations ` 8.16 Crores ` 4.70 Crores)] Purchases 1, , , , Less : Closing Stock Less : Transfer to Subsidiary , , Figures for discontinuing operations (Refer Note 51) ` / crore Salaries, Wages, Bonus etc Contribution to Provident and other Funds Carried over