The Directors have pleasure in presenting the ninety-second Annual
 Report and the Audited Statements of Accounts of the Company for the
 year ended 31st March, 2011.
 
 FINANCIAL RESULTS
 
                                                   (Rupees in Crore)
 
 Particulars                           31st March,        31st March,
                                         2011                2010
 
 Sales/Income from Operations           5,750.72           5,020.63
 
 Less: Excise Duty                        352.84             289.98
 
 Net Sales                              5,397.88           4,730.65
 
 Other Income                             161.62             130.72
 
 Total Income                           5,559.50           4,861.37
 
 Gross Profit                             120.24             648.30
 
 Less: 
 Depreciation (Net of transfer from 
 Revaluation Reserve)                     272.59             172.80
 
 Provision for Income Tax                   --                36.00
 
 Provision for Fringe Benefit Tax written 
 back [charge/(credit)]                    (0.12)             (0.13)
 
 Provision for Deferred Tax [charge/
 (credit)]                                 57.98             202.29
 
                                          330.45             410.96
 
 Net Profit/(Loss)                       (210.21)            237.34
 
 Less:
 
 Debenture Redemption Reserve/(Transfer 
 back)                                    (61.25)            101.25
 
 Surplus/ (Deficit) for the year         (148.96)            136.09
 
 Add: Opening Balance in P&L A/c.       1,126.75           1,044.04
 
 Amount available for appropriation 
 which the  Directors have appropriated 
 as under:                                977.79           1,180.13
 
 (i) Proposed Final Dividend               14.87              14.87
 
 (ii) Tax on Proposed Final Dividend        2.41               2.47
 
 (iii) Interim Dividend                    10.29              10.29
 
 (iv) Income Tax on the Interim Dividend    1.71               1.75
 
 (v) General Reserve                        --                24.00
 
 (vi) Balance carried forward to next year948.51           1,126.75
 
                                          977.79           1,180.13
 
 DEFERRED TAX
 
 In terms of the Accounting Standard on Accounting for Taxes on Income
 (AS-22) a sum of Rs.57.98 crore has been debited to the Profit & Loss
 Account being Deferred Tax Liability for the year under review.
 
 TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
 
 In terms of Sections 205A and 205C of the Companies Act, 1956 read
 together with General Circular no.22/2002 dated 23rd September, 2002
 issued by the Department of Corporate Affairs, the Company deposited
 about Rs. 14.92 lac, being Unclaimed Dividend and interest on Fixed
 Deposits of the Company, during the year under review in the Investor
 Education and Protection Fund created by the Central Government.
 
 DIVIDEND
 
 The Board of Directors in its meeting held on 10* November, 2010
 declared an interim dividend and today has recommended the final
 dividend for the year ended 31st March, 2011 on Ordinary Shares as
 under:
 
                          31st March,      31st March,
                           2011 (Rs.)       2010 (Rs.)
 
 Interim on 4,57,43,318 
 Ordinary Shares of       10,29,22,466     10,29,22,466
 Rs.10 each @ Rs.2.25 per 
 Share (Previous year 
 Rs. 2.25 per Share )
 
 Final on 4,57,43,318 
 Ordinary Shares of       14,86,65,784     14,86,65,784
 Rs. 10 each @ Rs.3.25 
 per Share (Previous year 
 Rs. 3.25 per Share )
 
 Because of loss in the current financial year, the Interim and Final
 dividends are paid/recommended out of accumulated profits of the
 Company. Thus, the total dividend of Rs 5.50 per share, as per detail
 given herein above, has been paid/ recommended by the Board for the
 financial year ended 31.03.2011.
 
 AUDIT REPORT
 
 As regards paragraphs 1 (b) and 2(a) referred to by the Auditors in
 Annexures to Auditors Report, the physical verification of the fixed
 assets (in phased manner) and inventories, as referred in para nos.l(b)
 and 2(a) respectively at the Spun Pipes & Foundries Section of the
 Company, could not be possible because of continued suspension of work
 and barricade in front of the factory gate by a section of workers at
 the said Section. So far as paragraph 9(b) of the said Annexure to the
 Report is concerned, the same is self-explanatory and needs no further
 explanation by the Board.
 
 Regarding the paragraph 4 of the Annexure to Auditors Report, the
 Company is taking necessary steps to rectify the deficiencies in
 relation to information technology general control with regard to the
 Tyre & Cement Sections by getting the existing programme modified to
 meet the required controls.
 
 GENERAL REVIEW
 
 The Companys turnover has increased about 15% to Rs. 5750 crore
 compared to Rs.5020 crore in previous year. The growth is mainly due to
 increase in sales of Tyre Section which standalone registered a growth
 of about 27% from Rs.2850 crore to Rs.3609 crore. Current year was a
 tough period as the Company faced challenges, where Tyre Section went
 through sharp hikes in raw material cost and Cement exhibited a
 sluggish trend for most part of the year.
 
 Cement sales have dropped about 3% due to lower cement prices industry
 wide, especially in southern India. Other Sections of the Company i.e
 Rayon and Chemicals have witnessed about 16% growth in turnover.
 
 The Company could manage the overall volume growth in various business
 segments, but the margins were adversely affected by sharp increase in
 input and distribution costs as well as higher depreciation cost by
 Rs.100 crore and higher interest cost by Rs.130 crore.
 
 Work at Spun Pipe Section and Hindusthan Heavy Chemicals section
 continues to be under suspension.
 
 CEMENT SECTIONS Vasavadatta Cement
 
 Operational performance of this section continues to be good and it has
 achieved highest-ever production of Cement during the year. The
 production figures of this Section are as under:
 
                                        2010-11          2009-10
                                     (Metric Tons)     (Metric Tons)
 
 Clinker                              39,20,723         42,98,390
 
 Cement                               42,77,698         42,03,373
 
 Increase in the production of cement, though marginal, has been
 achieved despite sluggish demand conditions prevailing in the
 construction sector. New capacity additions by other companies have
 created a supply surplus situation, which has depressed the cement
 prices. Substantial increase in the cost of coal and raw materials has
 additionally increased pressure on the profit margins.
 
 Shortage of rail wagons for movement of Cement has also hampered our
 Cement production, due to which clinker stock continued to remain high.
 This Industry considerably depends on railway for movement of its input
 as well as finished products to long-distance market. The shortage of
 wagons coupled with increase in freight charges by railway as well as
 road has increased the distribution cost.
 
 This Section has been able to withstand severe competition coupled with
 depressed demand, due to its consistent quality, strong brand image and
 extensive distribution network.
 
 Captive power generation was 444.33 million kwh during the year under
 review which has catered to about 97% of the total power requirement of
 the section. 71.13 million kwh of power generated from the power plants
 was sold to Gulbarga Electricity Supply Company Ltd., as against last
 years 54.15 million kwh.
 
 As a part of corporate social responsibility, the unit has continued to
 undertake various social welfare and development activities around the
 area of the unit such as Free Health Check up and Treatment Camps, Free
 Eye Camps, Blood Donation Camps, Dental Camps, Pulse Polio Camps,
 Fixing Street Lights, Fixing of Animal Trackers, Tree Plantation, Soil
 Testing & Agriculture Camps and other social activities.
 
 During the year, the Unit has bagged the following prizes:
 
 a) Limestone Mines of this Section bagged two first prizes in Drilling
 & Blasting, Operation & Maintenance of mining machines and three
 second prizes in Overall performance, Loading & Transportation and
 Lighting & Electrical installation from the Director General of Mines
 Safety during Mines Safety Week Celebrations.
 
 b) Under National Safety Awards Scheme-2009, this Section was selected
 for Runners-up prize for Lowest Injury Frequency Rate, which will be
 presented by the Honble President of India.
 
 c) Won five first prizes and three second prizes in various categories
 from Indian Bureau of Mines during the Mines Environment & Mineral
 Conservation Week Celebrations, Gulbarga Zone.
 
 d) Boiler of Unit No. I Captive Thermal Power Plant of this Section has
 been awarded second prize for Safe Industrial Boiler in the State
 Level Competition conducted by Karnataka State Safety Institute &
 Department of Factories & Boilers.
 
 e) Awarded Excellent Water Efficient Unit within the Fence in the 7*
 National Award for Excellence in Water Management 2010 — organised by
 Indian Industries-Godrej Green Business Centre.
 
 Apart from the above, one student of Vasavadatta Vidya Vihar has been
 given Amul Vidyashree Award instituted by Gujarat Co-operative Milk
 Marketing Federation Ltd., for excellence in CBSE examination and also
 16 Scouts and Guides have been awarded the coveted Rajya Puraskar
 Award for the fourth consecutive year by the Honble Governor of
 Karnataka.
 
 Industrial relations during the year were cordial.
 
 Kesoram Cement
 
 Production figures of this Section are as under:
 
                                      2010-11          2009-10
                                   (Metric Tons)     (Metric Tons)
 
 Clinker                            8,93,920          11,61,200
 
 Cement                            11,50,486          13,78,833
 
 Production of Clinker, Cement and Cement despatches were adversely
 affected mainly due to longer stoppage of one Kiln for replacement of
 existing 1978 model Cooler with LNV Cooler and replacement of cracked
 tiers of both the Kilns. In addition, the political agitations in the
 area further suppressed the Cement demand in the region.
 
 Cement prices fluctuated in the market due to demand supply mismatch
 and also substantial increase in the cost of raw materials, coal, power
 and other inputs. Due to these reasons the performance of this Section
 got adversely affected.
 
 Captive Thermal Power Plant of this Section generated 106.59 million
 kwh of Power, out of which 3.3 million kwh were supplied to APTRANSCO
 during shutdown. About 89% of the power requirement of the Cement Plant
 is met from the Captive generation and balance Power was purchased from
 APTRANSCO. This Section is considering feasibility of power generation
 by Waste Heat Recovery System which will give considerable advantage in
 cost of power generation.
 
 The suit challenging the validity of imposition of Electricity Duty on
 captive power generation @ 25 paise per Unit from 17.07.2003 by the
 Government of Andhra Pradesh is still pending before the Honble High
 Court of Andhra Pradesh.
 
 This Section bagged National Award for Mines Safety for the year 2008
 from Ministry of Labour & Employment, Director General of Mines Safety,
 Government of India, which will be presented shortly by the Honble
 President of India.
 
 Basantnagar Limestone Mines of this Section bagged first prize for 
 Environment & Health Management and two second prizes for Heavy Earth
 Moving Machinery and Publicity, Propaganda & Innovations from
 Director General of Mines Safety during Mines Safety Week Celebrations.
 
 The said Mines also got first prize for Waste Dump Management and two
 second prizes for Sub-Grade Mineral and Overall Performance State
 Level from Indian Bureau of Mines during the Mines Environment &
 Mineral Conservation Week celebrations.
 
 As part of corporate social responsibility, the Section is continuing
 the rural and community development activities in nearby villages,
 running of Agricultural Demonstration Farm, Model Dairy Farm,
 Vocational Training Centre for Youth and participating in other social
 welfare activities such as Pulse Polio Programme, Health Camps,
 Farmers Training, Animal Health Camps, Distribution of Agriculture
 Implements to poor farmers and Tricycles & Telephone Booths to
 Handicapped, etc.
 
 Industrial relations were cordial during the year.
 
 BIRLA TYRES SECTIONS
 
 The gross turnover of this Section for the year increased about 27% to
 Rs. 3,609 crores from Rs. 2,850 crores last year. The export sales for
 the year under review amounted to Rs. 320 crore as against Rs. 361
 crore in the previous year.
 
 Though the Section has recorded commendable sales growth but due to
 sharp increase in raw material prices particularly of natural rubber,
 profitability has been adversely affected.
 
 At Haridwar Plant the operations were suspended for six days due to
 unprecedented floods and the profitability was further impacted due to
 18 days lock-out at Balasore Plant.
 
 Capacity expansion to increase the production of Truck/Bus Radial tyres
 by 85 MT/day at Haridwar (capital ouday: Rs. 350 crores) and Passenger
 Car Radial tyres by 80 MT/day at Balasore (Capital outlay: Rs. 450
 crores) will be completed by 2nd quarter of 2011-12.
 
 The Section continues to have the distinction of being certified for
 ISO-9001, TS-16949, ISO-14001, SA-8000, OSHAS- 18001 andTPM.
 
 Relations with employees have been cordial and conducive to growth.
 
 RAYON & TRANSPARENT PAPER SECTIONS
 
 The year started with the VFY (Viscose Filament Yarn) demand displaying
 signs of weakening with the inventory built up.  The weakness reversed
 during the 2nd Quarter due to increase in prices of other competing
 fibres. Also the VFY production cost in China increased due to limited
 availability of Cotton Linter Pulp and Rayon Grade Wood Pulp. Thus the
 cost of VFY imports also increased. This helped in improved sentiments
 for VFY in indigenous market leading to higher realisations and
 reduction in inventory level. The exports also increased substantially
 from 612 M.T to 895 M.T during the year.
 
 Production of T.P. (Transparent Paper) was marginally higher due to
 improved demand from the Fireworks industry which is the main
 consuming sector of this product. The exports were 332 M.T. against 293
 M.T. of last year.
 
 Chemical business was some how satisfactory. Steep rise in the price of
 Sulphur, Power and Charcoal will now affect the cost of production
 severely. This will put pressure on realisation which may result in
 slackness in demand.
 
 Owing to unprecedented increase in Pulp & Sulphur prices during the
 year under review, the operating margins of the Section suffered. Also
 due to global shortage of Cotton Linter Pulp, the price of Rayon Grade
 Wood Pulp is showing strong trend of increase which coupled with recent
 abnormal increase in coal price may affect the profit of the Section
 adversely during the coming year. The sale prices of VFY & T.P. are
 almost at saturation level and further increase, if any, may spur
 substitution and subsequent fall in demand.
 
 The technical performance of the Unit was satisfactory and relations
 with the employees were cordial during the year.
 
 SPUN PIPES SECTION
 
 Factory is under Suspension of Work on and from 2nd May 2008 because of
 day-to-day low production, quality problems and high rejections
 attributable to workmen. Several Bipartite and Tripartite meetings were
 held during the year. But, due to continued hostile attitude and rigid
 stand taken by a section of the workmen and their unions, the efforts
 made to reach a settlement were not successful. The blockade and
 barricade in front of the factory gate is still continuing. Finished
 goods and other material lying inside the factory could not be removed.
 
 HINDUSTHAN HEAVY CHEMICALS SECTION
 
 The Production figures of the Section were as under:-
 
 Products                   2010-11         2009-10 
 
 Caustic Soda               5,354 MT       11,663 MT
 
 Sulphuric Acid            13,912 MT       19,061 MT
 
 Hydrogen Gas            3,98,446 M3     7,53,453 M3
 
 Production was adversely affected due to restrictions imposed by
 Pollution Control Board on operation of Caustic Chlorine Plant during
 July, 2010 and a fire in Rectifier-Transformer during August, 2010.
 Presently, the Unit is under Suspension of Work with effect from 8th
 December 2010 consequent upon an illegal strike by a section of
 contract workers from 1st December, 2010.
 
 EXCISE DUTY
 
 During the year under review a sum of Rs. 352.84 crores (Rs. 289.98
 crores in 2009-10) was paid on account of Excise Duty on various
 products manufactured and sold by your Company.
 
 INSURANCE
 
 Appropriate Insurance cover has been taken for the properties of the
 Company.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 to the best of their knowledge and belief confirm that:
 
 i.  in the preparation of the Annual Accounts, the applicable
 Accounting Standards have been followed by the Company;
 
 ii.  appropriate Accounting Policies, as mentioned in Schedule 17, have
 been selected and applied consistently and such judgements and
 estimates have been made that are reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company as at 31st
 March, 2011 and of the profit of the Company for the financial year
 ended on that date;
 
 iii. proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956, for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 iv.  the annual accounts have been prepared on a going concern basis.
 
 CORPORATE GOVERNANCE
 
 Adequate steps to ensure compliance of all the mandatory provisions of
 Corporate Governance as amended in the Listing Agreements of the
 Stock Exchanges with which the Companys Shares are listed have been
 taken and your Company has ensured its required compliance.
 
 A separate Report each on Corporate Governance and Management
 Discussion & Analysis are annexed hereto as Annexure A along with
 Auditors Certificate for its due compliance and Annexure B
 respectively as part of Annual Report.
 
 DIRECTORS
 
 Shri G. B. Pande, Nominee Director of Life Insurance Corporation of
 India on the Board of the Company, resigned with effect from 10th
 February, 2011.The Board placed on record, its appreciation for his
 valuable contribution made to the Company during his tenure as a
 Director.
 
 Shri Deepak Tandon, Whole-time Director, also resigned from the Board
 with effect from 15* April, 2011.
 
 Shri K. C. Jain was appointed as Whole-time Director by the Board in
 place of Shri Tandon, effective 15.04.2011.
 
 Shri P K Choksey and Shri Amitabha Ghosh, Directors of your Company,
 retire from the Board by rotation but are eligible for re-election.
 
 AUDITORS
 
 The Company has received a requisite certificate pursuant to Sec. 224
 (IB) of the Companies Act, 1956 and a confirmation that Price
 Waterhouse, the Auditors of your Company, is complying with ongoing
 cycle of peer review process as required by the Statement on Peer
 Review issued by the The Institute of Chartered Accountants of India
 (ICAI) together with a copy of the peer review certificate dated 21st
 September, 2010 issued by the Peer Review Board of ICAI regarding
 their eligibility for re-appointment as Auditors, who retire at the
 ensuing Annual General Meeting and we recommend their re-appointment.
 
 COST AUDITORS
 
 The Company has appointed qualified Cost Auditors, in terms of the
 directives of the Central Government under Section 233B of the
 Companies Act, 1956, to conduct cost audits of the products
 manufactured by the Company.
 
 PARTICULARS OF EMPLOYEES
 
 The particulars as required under section 217(2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975
 form part of this Report and the same is enclosed as Annexure C.
 
 CASH FLOW ANALYSIS
 
 The Cash Flow Statement for the year under reference in terms oŁ Clause
 32 of the Listing agreement with the Stock exchanges is annexed hereto.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 A Statement containing necessary information, as required under the
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988, is annexed hereto as Annexure D
 APPRECIATION
 
 We wish to acknowledge the understanding, support and the services of
 the sincere workers, staff and executives of the Company, which have
 largely contributed to the efficient operations and management of the
 Company. Your Directors also wish to place on record the valuable
 co-operation and support received from the Financial Institutions,
 Banks, the Government of India, the State Governments and the local
 authorities concerned.
 
 We would also like to express sincere thanks to our Shareholders and
 Debenture holders for their confidence and understanding.
 
                                  B. K. Birla        Chairman
 
                                  K. G. Maheshwari
                                  B. P. Bajoria
 
                                  P. K. Choksey
 
                                                    Directors
                                  Amitabha Ghosh
 
                          
 
  S. K. Patodia   K. C. Jain      P. K. Mallik
  Secretary       Whole-time
                  Director        Manjushree Khaitan
 
 Kolkata,
 
 28th April, 2011