THE BOARD OF DIRECTORS KESORAM INDUSTRIES LIMITED 9/1, R. N. MUKHERJEE ROAD KOLKATA-700 001
	1.	We have reviewed the accompanying 'Unaudited Financial Result for the quarter and half year ended September 30, 2011' in which are included the results for the quarter ended September 30, 2011 and the statement of assets and liabilities as on that date (the "Statement") of Kesoram Industries Limited, except for the disclosures regarding 'Public Shareholding' and 'Promoter and Promoter Group Shareholding' which have been traced from disclosures made by the Management but have neither been reviewed nor been audited by us. The Statement has been prepared by the Company pursuant to Clause 41 of the Listing Agreement with the Stock Exchanges in India, which has been initialled by us for identification purposes. This Statement is the responsibility of the Company's management and has been approved by the Board of Directors. Our responsibility is to issue a report on the Statement based on our review.
	2.	We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement.
	3.	A review is limited primarily to inquiries of company personnel and analytical procedure applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
	4.	We have only traced the disclosures regarding 'Public Shareholding' and 'Promoter and Promoter Group Shareholding' in the Statement from the disclosures made by the Management and are, therefore, not expressing a review opinion thereon.
	5.	We draw your attention to Note 6 on Notes to Accounts, in relation to the recognition of Rs. 39.09 crores towards compensation from insurance company towards loss of certain items of inventory, loss of profit and certain items of fixed assets due to flood during the quarter, based on the insurance claim lodged by the Company in spite of the awaited approval of the insurance claim and uncertainties as to the amount that may be approved by the insurance company; which does not meet the requirement to consider prudence in selection of accounting policies, as set out in Accounting Standard 1 - "Disclosure of Accounting Policies". Had the aforesaid insurance claim not been recognised in keeping with the consideration of prudence, Exceptional income would have been Rs. NIL instead of the reported amount of Rs. 11.22 crores and Rs. 11.22 crores, consumption of Raw material would have been Rs. 682.13 crores and Rs. 1753.71 crores instead of reported amount of Rs. 667.42 crores and Rs. 1739.00 crores, (Increase) / decrease in stock in trade and work in progress would have been Rs. 129.20 crores and Rs. (32.81) crores instead of reported amount of Rs. 118.90 crores and Rs. (43.11) crores, other expenditure would have been Rs. 208.47 crores and Rs. 401.50 crores instead of reported amount of Rs. 205.61 crores and Rs. 398.64 crores, Loss from ordinary activities before tax would have been Rs. 262.11 crores and Rs. 351.84 crores instead of the reported amount of Rs. 223.02 crores and Rs. 312.75 crores, Loss from ordinary activities after tax would have been Rs. 305.51 crores and Rs. 372.02 crores instead of the reported amount of Rs. 266.42 crores and Rs. 332.93 crores, Earnings per share would have been Rs. (66.79) and Rs. (81.33) instead of reported amount of Rs. (58.24) and Rs. (72.78) for the quarter and half year ended respectively and net current assets as at 30th September, 2011 would have been Rs. 5705.49 crores instead of reported amount of Rs. 5744.58 crores. Further, cost of repairs to damaged fixed assets referred to above have not been provided during the quarter and, therefore, the consequential effects on the results for the quarter and six months ended 30th September 2011 could not be ascertained.
	6.	Based on our review conducted as above, except for our remarks in paragraph 5 above, nothing has come to our attention that causes us to believe that the Statement has not been prepared in all material respects in accordance with the applicable Accounting Standards notified pursuant to the Companies (Accounting Standards) Rules, 2006 as per Section 211(3C) of the Companies Act, 1956 and other recognised accounting practices and policies, and has not disclosed the information required to be disclosed in terms of Clause 41 of the Listing Agreement, including the manner in which it is to be disclosed, or that it contains any material misstatement.
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