(This Public Announcement is in compliance with the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998)

1. THE BUYBACK

   Kesoram Industries Limited ("KIL" or the Company") hereby announces its buyback ("the Buyback’) up to a maximum of 78,42,280 fully paid up Ordinary Shares of the Company, of face value Rs. 10/- each (‘Shares"), from the existing owners of Ordinary Shares of the Company from the open market through Stock Exchange using the electronic trading facilities of the Stock Exchange, Mumbai ("BSE") and the National Stock Exchange ("NSE") (together "the Stock Exchanges") in accordance with section 77A and all other applicable provisions of the Companies Act, 1956 ("the Act") and the Securities and Exchange Board Of India (Buyback of Securities) Regulations, 1998, ("the Regulations") and the relevant provisions of the Memorandum and Articles of Association of the Company at a maximum price not exceeding Rs 40/- ("Maximum Buyback Price"), payable in cash, for an aggregate sum not exceeding Rs. 3136.91 lacs ("Offer Size"). The number of Ordinary Shares represents 15% of the paid up Capital of the Company as on March 31, 2001 and the amount represents 9.98% of paid up Capital and free reserves of the Company as on March 31, 2001 before amalgamation of Bharat General & Textile Industries Ltd., Birla Century Finance Ltd. and Hindustan Heavy Chemicals Ltd. and after amalgamation of the aforestated three Companies the same is 8.56%. The aggregate sum deployed for buyback would depend upon the actual price paid for the Ordinary Shares bought back. Should the average price paid for the buy back be lower than the maximum price of Rs. 40/- , the actual amount deployed for buyback would be lower than Rs. 3136.91 lacs. Hence there is no specific amount that would be deployed for the buy back.

2. AUTHORITY FOR THE BUYBACK

   Pursuant to Section 77A and other applicable provisions of the Act and the Regulations, the Buyback has been duly authorised by:

    

    

   1. A resolution passed by the Board of Directors of the Company ("the Board") at their meeting held on May 4, 2001;

   2. A special resolution passed by Shareholders of the Company at the Annual General Meeting (AGM) of the Company held on June 22, 2001; and

   3. A resolution passed by the Board at their meeting held on July 30, 2001.

3. BRIEF INFORMATION ABOUT THE COMPANY

   1. The Company was incorporated in 1919 and is having interest in Cement, Tyres, Tubes & Flaps, Rayon & Transparent paper, Spun Pipes & Foundries and Refractories etc.

   2. The company has three subsidiaries viz. KICM Investment Limited, Softshree Estates Ltd. and Assam Cotton Mills Limited.

   3. The Units of the company are situated at Balasore (Orissa), Basant Nagar (A.P.), Sedam (Karnataka), Tribeni (W.B.), Bansberia (W.B.) and Kulti (W.B.).

   4. Brief financial information of the Company based on the Audited Accounts of the Company from the last three financial years are given below :

Year ended (March 31)	1999	2000	2001* Pre merger	2001 # Post merger
Total Income	73259.86	72891.87	137919.94**	148531.48**
PAT	474.58	1571.71	4644.98	5433.90
Equity Capital	5228.00	5228.00	5228.00	5274.88
Net Worth (Net off Revaluation Reserve)	31794.34	31409.76	34749.13	39974.62
Total Longterm Debt	34854.66	37009.94	40238.97	41568.51
EPS (Rs, per share)	0.24	2.37	8.58	6.98
Book Value (Rs. per share)	60.81	60.08	66.47	75.78
Debt Equity Ratio (x)	1.18:1	1.19:1	1.28:1	1.13:1

* Pre-merger figures are audited figures.

1. Operation of Tyre factory at Balasore (Orissa) being carried out by the company during the year, and

2. Transfer of Textile Unit to Kesoram Textile Mills Ltd. (KTML) in 1999-2000.

1. NECESSITY FOR BUY BACK

   The Company has substantial reserves and sufficient free cash flow. Its future requirement of funds in relation to its existing ventures can be leveraged through its existing surpluses and / or debts. The Company, therefore proposes to use part of its surplus fund to buy back its own Ordinary Shares, which will provide exit opportunity for those shareholders who so desire, without affecting the prospects of the Company.

    

2. BASIS OF ARRIVING AT THE MAXIMUM BUYBACK PRICE

   1. At the Annual General Meeting of the Company held on June 22, 2001, the Shareholders approved the buyback through one or more methods or any combination thereof to be finalised by the Board of Directors/ Committee of Directors at a maximum price of Rs. 40/- per Ordinary Share.

   2. The Board at its meeting held on July 30, 2001, approved the method of buy back of 78,42,280 Ordinary Shares from the open market through Stock Exchanges at a maximum price of Rs. 40/- per share.

   3. The Maximum Buyback Price is arrived at based on share price quotations, return on equity, earnings per share and other relevant factors.

3. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN

   1. The Share Capital of the Company as on March 31, 2001 is given below:

      Rs in Lacs

      Authorised	Pre Merger	Post Merger	Post Merger & Buyback
      50,00,000 Redeemable Preference Shares of Rs. 100 each	5000.00	5000.00	5000.00
      4,00,000 Redeemable Cumulative Preference Shares of Rs. 100 each	400.00	400.00	400.00
      6,60,00,000 Ordinary Shares of Rs.10 each	6600.00	6600.00	6600.00
      	12,000.00	12,000.00	12,000.00
      Issued
      5,22,81,870 Ordinary Shares of Rs. 10 each	5228.00	5274.88	5196.46
      Subscribed and Paid-up
      5,22,81,870 Ordinary Shares of Rs. 10 each	5228.00*	5274.88*#	5196.46

      *Net of Rs 18,360 being Allotment Money receivable on 2,448 Ordinary Shares.

      # Post merger 5,27,48,788 Ordinary Shares of Rs.10/- each.

   2. The Shareholding pattern of the Company as on 30.6.2001, and after the offer (assuming full Buyback) stands as under:

       

      	Pre Buyback		Post Buyback *
      Particulars	No. of Ordinary Shares	% to the existing Ordinary Share Capital	No. of Equity Shares	% to the post buyback Ordinary Share Capital
      Promoters, Persons acting in concert, Directors of the Co.	1,10,67,590.33	21.17	1,10,67,590.33	24.91
      GDR Holders	70,41,875	13.47	3,33,72,000	75.09
      Public Financial Institutions/ FFI/Nationalised Banks & Indian Mutual Funds	1,03,91,318	19.88
      Non- Resident (NRIs + OCBs) Shareholding	20,36,146	3.89
      Indian Public	2,17,44,941	41.59
      Total	5,22,81,870.33	100	4,44,39,590.33	100

      * Assuming that 78,42,280 fully paid up Ordinary Shares of the Company are bought back.

   3. There are no partly paid up Ordinary Shares except 2,448 Ordinary Shares on which a sum of Rs.18,360 is outstanding as allotment money receivable. Further there are no outstanding convertible instruments.

   4. There are no Ordinary Shares under lock in.

   5. The promoters and/or persons acting in concert have purchased an aggregate of 21,41,208 Ordinary Shares on various dates during a period of twelve months preceding the date of Public Announcement, the lowest price paid was Rs.27.89 per Ordinary Share and the maximum price paid was Rs.58.03 per Ordinary Share on 29.11.2000 and 14.2.2001 respectively. Further, they have not sold any Ordinary Shares during the last twelve months of Public Announcement. The promoters/persons acting in concert have not purchased or sold any Ordinary Shares of the Company save & except as stated above.

4. SOURCES OF FUNDS

   1. The maximum amount required for funding this buyback is Rs. 3136.91 lacs.

   2. The funds for the Buyback will be available from the current surplus and/or internal accruals of the Company. The cost of financing the Buyback would therefore be only notional loss of income that the funds used for buyback would have earned had they been deployed in the ordinary course of the Company’s business. Though the Company does not propose raising debt for effecting the Buyback, it may borrow funds in the ordinary course of its business

5. MINIMUM AND MAXIMUM NUMBER OF EQUITY SHARES PROPOSED TO BE BOUGHT BACK

   1. The Company has taken permission vide AGM resolution dated June 22, 2001 to buyback a maximum of 78,42,280 Ordinary Shares of Rs. 10/- each at a Maximum Buyback Price of Rs. 40/- per share.

   2. It is being clarified that the resolution provides for a maximum price of Rs. 40/- does not indicate that the Company will or is obliged to buy or continue to buy Shares so long as the price is below Rs. 40/-. Similarly the fact that the resolution indicates a maximum aggregate purchase price of Rs. 3136.91 lacs does not indicate that the Company will utilise or is obliged to utilise the entire amount of Rs. 3136.91 lacs.

6. STOCK MARKET DATA

   1. The Company’s shares are listed on The Calcutta Stock Exchange Association Limited, The Stock Exchange, Mumbai; The National Stock Exchange of India Limited; and The Delhi Stock Exchange Association Limited.

   2. High and Low market prices for the last three years and monthly high, low and average market prices for six months preceding this announcement and their corresponding volume, on The Stock Exchange, Mumbai where the Company’s shares are frequently traded are as follows:

11. STATUTORY APPROVALS

1. The Company has passed a special resolution authorising the Buyback at the

   AGM held on June 22, 2001

2. Buy back of shares from Non-Resident shareholders will be subject to approval, if

Activity	Date
Board Meeting approving Buyback	04.05.2001
Annual General Meeting	22.06.2001
Board Meeting finalising Price & Process	04.05.2001 & 30.7.2001
Date of opening the Buyback	Not earlier than 5th October, 2001
Acceptance of Shares	Within 15 days of the relevant payout dates of the Stock Exchanges
Extinguishment of Shares	Within 7 days of acceptance as above
Last date for the Buyback	21.6.2002 (or such extended period as may be permitted under the applicable act, rules and regulations or appropriate authorities) or buy back of 78,42,280 Ordinary Shares whichever is earlier or earlier as may be decided by the Board of Directors or committee thereof.

1. The Buyback is open to all Shareholders (registered as well as unregistered)

   / beneficial owners of Shares except the promoters and persons in control of the

   company.

2. The Company proposes to effect the Buyback from the open market through Stock Exchanges with electronic trading facility. The Company proposes to buy back Shares on BSE and NSE.

3. For the Buyback of Shares, the Company has appointed the following brokers ("the Appointed Brokers") through whom the purchases and settlement on account of the buyback of Shares would be made :

    

   (a) SBI Capital Markets Limited (b) Dalmia Securities Limited

   191, Maker Tower ‘F’ Ideal Plaza

   Cuffe Parade 11/1 Sarat Bose Road

   Mumbai – 400 005 Kolkata – 700 020

   (c) ICICI Brokerage Services Ltd.

   41/44, Minoo Desai Marg

   Colaba, Mumbai-400 005.

    

4. The Company, may from time to time, but not earlier than October 5, 2001 place "buy" orders on BSE and or NSE to buy back Shares through the Appointed Brokers, in such quantity and at such prices, not exceeding Rs. 40/- per share, as it may deem fit, depending upon the prevailing quotations of Shares in the secondary market. Intimation about the Company's presence in BSE and or NSE to buyback its own Shares will be made available through the electronic screens of respective Stock Exchanges.

5. Shareholders / beneficial owners, who desire to sell their shares under the Buyback whenever the Company has placed a "buy" order for buyback of Shares, would have to do so through a stock broker, who is a member of either BSE and/ or NSE, by indicating to their broker the details of the Shares they intend to sell. The trade would be executed at the price at which the order matches and that price would be the price for that seller. It may be noted that all Shares bought back by the Company may not be at a uniform price and that there shall be no obligation on the Company to place a "buy" order either on a daily basis or in both the odd lot as well as the normal trading segment of both the Stock Exchanges or otherwise. The Company shall intimate the Stock Exchanges as well as the public through its release in the newspapers regarding quantity of shares purchased and amount utilised for buyback on a daily basis as prescribed by the Buyback Regulations.

6. Shares of the Company are traded in the compulsory demat mode. Shareholders holding shares in physical form can sell their Shares in the odd lot trading segment of BSE only.

7. Nothing contained herein shall confer any right on the part of any Shareholder to offer, or any obligation on the part of the Company or the Board to buy back, any Shares, and or impair any power of the Company or the Board to change the price or terms and conditions of the Scheme of Buyback or to terminate or modify at any time the process in relation to the Buyback, if so permissible by law.

11. METHOD OF SETTLEMENT

15. EXTRACT FROM THE EXPLANATORY STATEMENT TO THE NOTICE SENT TO THE SHAREHOLDERS FOR CONVENING THE ANNUAL GENERAL MEETING HELD ON 22.6.2001

2. In view of substantial reserves and sufficient free Cash Flow, its future requirement of funds in relation to its existing activities could be leveraged through its existing surplus and/or debts. The company, therefore proposes to use a part of its surplus fund to buy back its own ordinary shares. This offers a reasonable attractive exit option to existing shareholders while ensuring a value enhancing to those Shareholders who prefer to retain ownership of their ordinary shares.

3. The buy back as aforesaid shall be implemented by the company through one or more methods prescribed under the Companies Act, 1956 and the SEBI (Buy back of Securities) Regulation, 1998 (including but not restricted to the tender offer method or by way of purchase from the open market through the Stock Exchanges) and as may be determined by the Board of Directors or any Committee thereof constituted for the purpose.

4. The maximum amount required for the buy back and the sources of funds from which the buy back would be financed is about Rs.31.37 Crores. The buy back as proposed is to be effected out of its free reserves and funds as would be available from current surpluses and internal accruals of the company.

5. While fixing the maximum price of Rs.40/- per share for buy-back, the board of directors have taken into account the various factors such as the market prices ruling over the last one year, the current and future earning per share, return on equity, net worth and other relevant factors.

6. The number of shares proposed to be bought back is upto 78,42,280 fully paid Ordinary shares of Rs.10/-each, representing approximately 15% of the Ordinary shares comprised in the paid-up share capital.

7. (a) The aggregate share holding of the promoter and of the directors of the promoters, where the promoter is the company and of persons who are in control of the company as on the date of the notice convening the general meeting is 1,04,80,921.33 shares.

21,41,208 NIL

		Purchase	Date	Sales	Date
A	Maximum Price	Rs. 58.03	14.02.2001	Rs. N.A.	N.A.
B	Minimum Price	Rs. 27.89	29.11.2000	Rs. N.A.	N.A.

8. The promoters and persons in control of the company do not intend to offer their shares for buy- back.

9. There has been no defaults subsisting in repayment of deposits, or interest payable thereon, redemption of the debentures or preference shares or payment of dividends to any shareholders or re-payment of any term loan to any of the institutions or banks.

10. The board of directors has made a full enquiry into the affairs and prospects of the company and it has formed the opinion that –

1. they have enquired into the company’s state of affairs;

2. the amount of the permissible capital payment for the securities in question is in their view properly determined; and

3. the board of directors in their meeting held on 04.05.2001 have formed the opinion as specified in clause 10 above on reasonable grounds and that the company having regard to its state of affairs, will not be rendered insolvent within a period of one-year from that date.

12. The buy back shall be completed within 12 months from the date of passing the special resolution herein and in accordance with the time limits prescribed in the SEBI Regulations for taking various steps under the method of buy-back to be adopted.

13. The ratio of the debt owed by the company to its capital and free reserve as at 31.03.2001 is 1.28:1. After the proposed buy-back, this may change to 1.46:1 which is well below the statutory prescribed ratio of 2:1.

14. The shares bought back by the company will be extinguished and destroyed. Further, the company will not be entitled to make further issue of equity shares within a period of twenty four months from the date of completion of the buy-back, except as provided in sub-section (8) of Section 77A of the Companies Act, 1956.

15. The maximum price for the buy-back is Rs.40/- per Ordinary share and the ‘Special Resolution’ set out in the Notice seeks approval from the shareholders for the Board of Directors to determine subsequently the specific price.

16. The Auditors Report to the Board of Directors of the Company referred to above is available for inspection of shareholders on any working day of the company till the date of the Annual General Meeting between 11.00 a.m. to 04.00 p.m..

11. COMPLIANCE OFFICER

11. INVESTOR SERVICE CENTRE

8^th Floor, Birla Bldg., 9/1, R. N. Mukherjee Road, Kolkata – 700 001

ABC Computers Private Limited

National Council of Education, Bengal

Jadavpur University Campus

JADAVPUR, Kolkata – 700 032.

Kesoram Industries Limited

Date: ………….2001

Place: Kolkata Director Director

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