"Kothari Buildings" No.114/117, Mahatma Gandhi Salai . WKICL Nungambakkam, Chennai - 600 034 Ph ton 44 2833 4565 | Fax: +91 44 2833 4581 E-mail :[email protected] | www.kotharis.in Event

Company at www.kotharis.in on the website of the and on the website CDSL at Www.evotingindia,com,

The above is for your information and record.

Yours Faithfully

For KOTHARI INDUSTRIAL CORPORATION LIMITED ANIL KUMAR ciinaseapiial

PADHIALL 221010

Anil Kumar Padhiali (Company Secretary cum Compliance Officer)

KOTHARI INDUSTRIAL CORPORATION LIMITED CIN L24110TN1970PLC005865 114, Kothari Buildings, Mahatma Gandhi Salai, Nungambakkam High Road, Chennai-600034, Tamil Nadu, India Tel no: 044-28334565, Email id: [email protected], Website: www.kotharis.in

NOTICE OF POSTAL BALLOT

(Pursuant to Section 110 of the Companies Act, 2013 read with Rule 22 of the Companies (Management and Administration) Rules, 2014 and the MCA Circulars (as defined below)

To

The Members,

Notice is hereby given pursuant to the provisions of Section 110 and other applicable provisions of the Companies Act, 2013 (the "Companies Act'), read with the Companies (Management and Administration) Rules, 2014 (the "Rules"), which shall include any statutory modifications, amendments or re-enactments thereto and Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), for seeking approval of the shareholders through postal ballot by way of remote e-voting for the matters as considered in the Resolution appended below ("Postal Ballot').

In terms of the MCA ("Ministry of Corporate Affairs") General Circular Nos. 14/2020 dated April 08, 2020 and 17/2020 dated April 13, 2020,and 22/2020 dated June 15, 2020 and 33/2020 dated September, 28 2020 and 39/2020 dated December 31, 2020 and 10/2021 dated June 23, 2021 ("the MCA Circulars") and in view of the current extraordinary circumstances due to COVID-19 pandemic requiring social distancing, companies are advised to take all decisions requiring members' approval, other than items of ordinary business or business where any person has a right to be heard, through the mechanism of postal ballot / e-voting in accordance with the provisions of the Act and Rules made thereunder, without holding a general meeting that requires physical presence of members at a common venue. The MCA has clarified that the requirements provided in Rule 20 of the Rules, as well as the framework provided in the MCA Circulars, will be applicable mutatis mutandisto companies which are required to provide e-voting facility under the Act up to December 31, 2021 or till further orders, whichever is earlier, while they are transacting any business(es) only by postal ballot. The MCA has also stated that, the company will send postal ballot notice by e-mail to all its members, who have registered their email addresses with the company or depository / depository participants and the communication of assent / dissent of the members will only take place through the remote e-voting system. This Postal Ballot is accordingly being initiated in compliance with the MCA Circulars.

In compliance with the requirements of the MCA Circulars, hard copies of Postal Ballot Notice along with Postal Ballot Forms and pre-paid business envelope will not be sent to the members for this Postal Ballot and members are required to communicate their assent or dissent through the remote e-voting system only.

It is proposed to obtain consent of the members by way of Postal Ballot for mattersset out in the Resolutions appended below. The Explanatory Statement pursuant to Section 102 of the Companies Act pertaining to the Resolution setting out material facts and the reasons for the Resolution is also annexed.

You are requested to peruse the Resolutions along with their respective Explanatory Statement and thereafter record your assent or dissent by means of remote e-voting facility provided by the Company.

The Company has appointed N GANESAN, Chartered Accountant in practice (Membership No-023700) as the Scrutinizer for conducting the meeting through the electronic voting process, in a fair and transparent manner.

The Scrutinizer will submit the report to the Chairman/Company Secretary of the Company,upon completion of scrutiny of thepostal ballot result, i.e. e-Voting and the result will beannounced on or before Saturday, 07" August 2021.

ITEM NO-1

Reduction of Share Capital of the Company:

To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

"RESOLVED THAT pursuant to Section 66 and all other applicable provisions of the Companies Act, (including anystatutory modification or re-enactment thereof) read with the National CompanyLaw Tribunal ("NCLT") (Procedure for Reduction of Share Capital of Company) Rules,2016 and the other applicable rules made thereunder (NCLT Rules'),and pursuant to the relevant provisions of the Memorandum and Articles of Association of the Company and subject to confirmation by the Hon'ble NCLT, Chennai bench ("NCLT Chennai"), and subject to such terms and conditions, as may be prescribed by NCLT Chennai and any other appropriate authorities while granting approvals or confirmation(s) as may be required from them, the approval and consent of the members be and is hereby accorded by way of specialresolution to the scheme of reduction of capital (the "Scheme'") of the Company by way of cancelling and extinguishing 66,27 ,000 (sixty six lakhs twenty seven thousand) fully paid-up equity shares of Rs.5 (Rupees five) each from the total paid-up equity share capital of the Company held by promoter groups of the Company (as more particularly set out herein below), simultaneouslyreducing 66,27,000 shares from the issued and subscribed capital of the Company."

"RESOLVED FURTHER THAT upon confirmation of the Scheme by the NCLT Chennai and becoming effective and operative, the issued, subscribed and paid-up share capital of the Company will be reduced from Rs.9,55,54,425 divided into 1,91,10,885 equity shares of Rs.5 each to Rs.6,24,19,425 divided into 1,24,83,885 equity shares of Rs.5 each."

"RESOLVED FURTHER THAT the Board of Directors of the Company (hereinafter referred to as the'Board", which term shall be deemed to include any committee or any person which the Board has nominated / constituted / authorized or hereafter may constitute / nominate / authorize for exercising its powers, including the power conferred under this Resolution) be and is hereby authorized to take all necessary steps and do all such acts, deeds, matters and things, as they may, in their absolute discretion deem necessary, expedient, usual or proper in the best interest of the Company and the shareholders inconnection with and relating to the capital reductionand the Scheme including issuing any directions for settling any question or doubt or difficulty whatsoever that may arise, for the purpose of giving effect to the reduction of capital or to any modification thereof without being required to seek any further consent or approval of the members or otherwise."

"RESOLVED FURTHER THAT the Board be and is hereby authorized, in its absolute discretion, to bring into effect this Resolution on such other terms and conditions as it may consider appropriate and to accept such other conditions and modifications as may be prescribed by the NCLT Chennai and other appropriate authorities while according their confirmation or consent to this resolution or to suspend, withdraw or revive the proposal for reduction and cancelation of the capital of the Company from time to time as may be specified by any statutory authority or as the Board may suo-moto decide."

"RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things, and to execute allsuch documents, deeds and writings as may be required for all the aforesaid purposes, as it may, inits absolute discretion deem necessary, expedient, usual or proper to give effect to this Resolution includingbut not limited to filing of application with the NCLT Chennai or to carryout such modifications / directions as may be ordered by the NCLT Chennai and any other appropriate and / orrelevant / authorities but without requiring any further approval or consent from the members to implement the Resolution."

"RESOLVED FURTHERTHAT the Board be and is hereby authorised todelegate all or any ofthe powers herein conferredto any committee of directorsor any one or more directorof the Company with power to delegate to anyofficers oftheCompanytodoallsuchacts,deedsandthings,to executeallsuchdocuments, instruments and writings as may be required to give effect to thisResolution."

By Order of the Board of Directors For KOTHARI INDUSTRIAL CORPORATION LIMITED

Date: 30.06.2021 DIN:01315682

PRADIP D KOTHARI Place: Chennai CHAIRMAN

Important Notes:-

• (1) Pursuant to Section 102 of the Companies Act, an Explanatory Statement setting out material facts and reasons for the proposed Special Businesses are appended to the Notice.
• (2) The Notice is being sent electronically to all members of the Company, whose name appears on the Register of members, /List of Beneficials Owners as received from the National Security Depository Limited ("NSDL") / Central Depository Services (India) Limited (""CDSL") on 02"July, 2021 and who have registered their email addresses with the Company and/or with the Depositories. It is however, clarified that all persons who are members of the Company as on 02™ July, 2021 (including those members who may not have received this Notice due to non-registration of their email addresses with the Company or the Depositories) shall be entitled to vote in relation to the Resolution specified in this Notice.
• (3) Members who have not registered their e-mail addresses are requested to register the same with the Company's Registrar and Transfer Agents/Depository Participant(s) for sending future communication(s) in electronic form.
• (4) Members whose names are recorded in the Register of Members of the Company as on 02™ July, 2021 will be entitled to cast their votes. A person who is not a member as on 02™ July, 2021 should treat this Notice for information purpose only.
• (5) In light of the COVID-19 pandemic and in accordance with Section 110 of the Companies Act and Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014 read with the MCA Circulars, physical copies of the Notice will not be circulated and the members may vote through e-voting only.
• (6) In accordance with the provisions of Regulation 44 of the Listing Regulations and Sections 108 and 110 of the Companies Act read with Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014 and the MCA Circulars, the Company has extended e-voting facility for its members to enable them to cast their votes electronically on the Resolution set forth in this Notice. Members are informed that the communication of their assent or dissent can take place through the e-voting facility. The Company has engaged the services of the Central Depository Services (India) Limited("CDSL') as the agency to provide the remote e-voting facility.
• (7) Dispatch of the Notice shall be deemed to be completed on the day on which communication for the postal ballot process by e-mail is delivered to the members of the Company.
• (8) The Resolution, if approved by requisite majority, will be deemed to be passed on 05"August, 2021.
• (9) The Notice is being uploaded on the website of the Company i.e., at www.kotharis.in and on the website of CDSL at www.evotingindia.com and shall also be communicated to the BSE Limited ("BSE") where the Company's equity shares are listed and be made available on its website viz. www.bseindia.com

• (10) The Scrutinizer shall submit his Report, in writing, upon completion of scrutiny of E-Voting data provided by CDSL, in a fair and transparent manner. The result on the resolution proposed to be passed through Postal Ballot/E-Voting shall be announced on or before07" August, 2021, and shall be communicated to BSE Limited, where the equity shares of the Company are listed. The results of the Postal Ballot/E-Voting shall also be displayed on the Company's website at www.kotharis.in and on the website of CDSL.

• 1. PROCESS FOR THOSE SHAREHOLDERS WHOSE EMAIL/MOBILE NO. ARE NOT REGISTERED WITH THE COMPANY/DEPOSITORIES.
• 1. For Physical shareholders- please provide necessary details such as Folio No., name of shareholder, scanned copy of the share certificate (front and back), PAN (self-attested scanned copy of PAN card), AADHAR (self-attested scanned copy of AadharCard) by email to Company/RTA email id.viz:[email protected]/[email protected]
• 1. ForDemat shareholders -, Please update your email id & mobile no. with your respective Depository Participant (DP)
• 1. For Individual Demat shareholders Please update your email id & mobile no. with your respective Depository Participant (DP) which is mandatory while e-Voting through Depository.

2. The instructions for shareholders e-voting electronically are as under:

• (i) The voting period begins on 07" July, 2021 at 09.00 a.m. and ends on 05" August, 2021 at 05.00 p.m. During this period the shareholders' of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date 02™ July, 2021may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
• (ii) Pursuant to the SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2020/242 dated December 9, 2020, under Regulation 44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, listed entities are required to provide remote e-voting facility to its shareholders, in respect of all shareholders' resolutions. However, it has been observed that the participation by the public noninstitutional shareholders/retail shareholders is at a negligible level.

Currently, there are multiple e-voting service providers ("ESPs") providing e-voting facility to listed entities in India. This necessitates registration on various ESPs and maintenance of multiple user IDs and passwords by the shareholders.

In order to increase the efficiency of the voting process, pursuant to a public consultation, it has been decided to enable e-voting to all the demat account holders, by way of a single login credential, through their demat accounts/ websites of Depositories/ Depository Participants. Demat account holders would be able to cast their vote without having to register again with the ESPs, thereby, not only facilitating seamless authentication but also enhancing ease and convenience of participating in e-voting process.

(iii) In terms of the SEBI Circular no. SEBI/HO/CF D/CMD/CIR/P/2020/242 dated December 9, 2020 on e-voting facility provided by listed companies, individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile number and email addresses in their demat accounts in order to access e-voting facility.

Pursuant to abovesaid SEBI Circular, login method for e-voting for individual shareholders holding securities in dematmode in CDSL/NSDL is given below:

(iv) Login method for e-voting for Physical shareholders and shareholders other than individual, holding in demat mode.

• (1) The shareholders should log on to the e-voting website www.evotingindia.com.
• (2) Click on "Shareholders" module.
• (3) Now enter your User ID
• (a) For CDSL: 16 digits beneficiary ID,
• (b) For NSDL: 8 Character DP ID followed by 8 Digits Client ID,
• (c) Shareholders holding shares in Physical Form should enter Folio Number registered with the Company.
• 4) Next enter the Image Verification as displayed and Click on Login.
• (5) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier e-voting of any company, then your existing password is to be used.
• (6) If you are a first-time user follow the steps given below:

• (v) After entering these details appropriately, click on "SUBMIT" tab.
• (vi) Shareholders holding shares in physical form will then directly reach the Company selection screen. However, shareholders holding shares in demat form will now reach 'Password Creation' menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
• (vil) For shareholders holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.
• (viii) Click on the EVSN for the relevant on which you choose to vote.
• (ix) On the voting page, you will see "RESOLUTION DESCRIPTION' and against the same the option "YES/NO" for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
• (x) Click on the "RESOLUTIONS FILE LINK" if you wish to view the entire Resolution details.
• (xi) After selecting the resolution, you have decided to vote on, click on "SUBMIT". A confirmation box will be displayed. If you wish to confirm your vote, click on "OK", else to change your vote, click on "CANCEL" and accordingly modify your vote.
• (xii) Once you "CONFIRM" your vote on the resolution, you will not be allowed to modify your vote.
• (xiii) You can also take a print of the votes cast by clicking on "Click here to print' option on the Voting page.
• (xiv) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

Additional Facility for Non — Individual Shareholders and Custodians —For Remote Voting only.

• (1) Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodians are required to log on to www.evotingindia.com and register themselves in the "Corporates" module.
• (2) A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
• (3) After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.
• (4) The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
• (5) A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
• (6) Alternatively Non Individual shareholders are required to send the relevant Board Resolution/ Authority letter etc together with attested specimen signature of the duly authorized signatory who are authorized to vote, to the Scrutinizer and to the Company at the email address viz: [email protected], if they have voted from individual tab & not uploaded same in the CDSL e-voting system for the scrutinizer to verify the same.

Explanatory Statement pursuant to the provisions of Section 102 (1) of the Companies Act, 2013:

Item No.1

A. Reduction of Share Capital of the Company:

The proposed reduction of capital is pursuant to Section 66 and all other applicable provisions of the Companies Act read with the NCLT Rules, and pursuant to the relevant provisions of the Memorandum and Articles of Association of the Company and subject to confirmation by the NCLT Chennai and subject to such terms and conditions, as may be prescribed by the NCLT Chennai and any other appropriate authorities.

B. Background:

• (i) The Company was originally incorporated on July 1, 1970 under the Companies Act, 1956 as a public limited company under the name and style "Kothari (Madras) Limited". On April 10, 1984, the Company changed its name from "Kothari (Madras) Limited' to its current name i.e. "Kothari Industrial Corporation Limited" and obtained a fresh certificate of incorporation consequent upon change of name issued by Assistant Registrar of Companies, Tamil Nadu.
• (ii) The registered office of the Company is at Kothari Buildings, 114, Nungambakkam High Road, Chennai, Tamil Nadu 600034.

Cc. Rationale and Purpose of the Reduction

• (i) The equity shares of the Company have been suspended on the BSE since July 18, 2000 due to for non-payment of listing fees, which payment has since been made.
• (ii) In April 2009, the Company made an application to the Hon'ble High Court of Madras under Sections 78, 100 and 101 of the Companies Act, 1956 to reduce its share capital and sub-divide its equity shares into shares of a smaller amount, i.e. from Rs.10 per share to Rs.5 per share.
• (iii) On October 22, 2009, the Board of Directors of the Company approved the issue of 75,26,725 (seventy-five lakh twenty-six thousand seven hundred and twenty five) fully paid-up equity shares of Rs.5 (Rupees five only) each, aggregating to Rs.3,76,33,625 (Rupees three crores seventy-six lakhs thirty-three thousand six hundred and twenty five only) on preferential basis to the Allotees (mentioned in paragraph E to the Explanatory Statement). The issue of the equity shares on a preferential basis was subject to approval from its shareholders and the Hon'ble High Court of Madras to reduce its share capital and sub-divide its shares. At the time of passing the resolution to issue the equity shares on preferential basis, the Company Petition No.191 of 2009 dated April 8, 2009 was pending with the Hon'ble High Court of Madras.
• (iv) On December 12, 2009, the shareholders of the Company approved the issue of the equity shares on preferential basis which were subject to approval of the Hon'ble High Court of Madras to reduce its share capital and sub-divide its shares.
• (v) On August 31, 2010, the Hon'ble High Court of Madras confirmed the sub-division of the equity shares from Rs.10 per share to Rs.5 per share. The Hon'ble High Court of Madras also approved the write-off of an amount of Rs.8,64,53,000 (Rupees eight crores sixty-four lakhs fifty-three thousand only) out of Rs.12,90,06,000 (Rupees twelve crores ninety lakhs six thousand only) from the share premium account of the Company. On write-off of Rs.8,64,53,000 from the share premium account, the paid-up share capital of the Company was reduced from Rs.12,48,38,850 (Rupees twelve crores forty-eight lakhs thirty-eight thousand eight hundred fifty only) to Rs.6,24,19,425 (Rupees six crores twenty-four lakhs nineteen thousand four hundred and twenty-five only).
• (vi) The Company is a listed public company. The equity shares of the Company are listed on the BSE and as such, must comply with the ICDR Regulations (erstwhile DIP Guidelines) and the Listing Regulations (erstwhile Listing Agreement). Ideally, under the ICDR Regulations, the Company should have issued and allotted the aforesaid equity shares within fifteen (15) days of receiving shareholders' approval or within fifteen (15) days of receipt of the last of the regulatory approval (in this case the approval of the Hon'ble High Court of Madras), whichever is later.

• (vil) On August 31, 2010, the Hon'ble High Court of Madras confirmed the sub-division of the Equity Shares from Rs.10 per share to Rs.5 per share and subsequent reduction of share capital of the Company. The Company, however, received a certified copy of the order only on November 1, 2010. Upon receipt of the said order, the Company, on November 25, 2010, made an application to the BSE seeking in-principle approval to issue the equity shares on preferential basis. The Company paid the fee of Rs.55,150 (Rupees fifty-five thousand one hundred fifty) along with the application seeking in-principle approval.

• (viii) Subsequent to making the application for in-principle approval to the BSE, the Company received Rs.3,31,35,000 (Rupees three crores thirty-one lakhs thirty-five thousand only) as advance share subscription monies towards subscription of the equity shares on preferential basis. The Company expected to receive the in-principle approval from the BSE and then appropriate the advance share subscription monies towards issue of the equity shares on preferential basis.

• (ix) The Company has till date not received the in-principle approval from the BSE to issue the aforesaid equity shares. Ideally, the Company should have returned the advance share subscription monies to the Allottees soon thereafter; however, due to lapse of time and oversight and change in the management of the Company, the Company continued to retain the share subscription monies. Since the Company had not allotted the aforesaid equity shares, the Company did not use any part of the share subscription monies then.
• (x) While waiting to receive the BSE in-principle approval, the Company proposed a restructuring plan and was working with its advisors to identify investors to infuse funds into the Company to meet its working capital requirements and to pay its debts.
• (xi) Due to the global slowdown in 2013-14 and 2014-15, the demand for its products decreased over a period of time and the Company faced losses in its operations. Due to this sudden and unprecedented setback in business, the Company faced losses for three continuous financial years ending on 2013, 2014 and 2015. The Company suffered a loss of Rs.16,39,57,000 (Rupees sixteen crores thirty-nine lakhs fifty-seven thousand only) during these three financial years, which resulted in severe cash flow crisis. Although, the Company was taking steps to revive itself and clear its debts, the Company continued to make losses for the financial year ended 2016 to the tune of Rs.5,67,00,000 (Rupees five crores sixty-seven lakh) resulting from the after effects of the global slowdown.
• (xii) With the global slowdown having an adverse effect on business and no investor willing to infuse money into the Company, the Company was in dire need of funds to run its operations. With no other option left, the Company decided to use the share subscription monies but only after issue of the aforesaid equity shares. On March 31, 2016, the Company allotted 66,27,000 (sixty-six lakhs twenty-seven thousand) equity shares ('Fresh Equity Shares") to the Allottees by appropriating the share subscription monies.
• (xiii) Upon allotment of the Fresh Equity Shares, on January 6, 2017, the Company informed the BSE of allotment of the Fresh Equity Shares. The Company informed the BSE that the Fresh Equity Shareswere issued pursuant to the provisions of the amendment notification issued by the Ministry of Corporate Affairs on the Companies (Acceptance of Deposits) Rules, 2014 bearing number GSR 241(E), which mandates that if a company had received any amount by way of subscriptions to any shares before April 1, 2014, against which the allotment is pending, the company shall, either return such amounts to the persons from whom these were received or allot shares or comply with these rules.
• (xiv) In compliance with the SEBI Circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015, the Company, on November 21, 2017, submitted a Uniform Fresh Listing Agreement dated November 16, 2017 to the BSE, executed by the authorised signatory of the Company. The execution of the Uniform Fresh Listing Agreement was approved by the Board of Directors of the Company in their meeting held on February 29, 2016.
• (xv) The Company, prior to and after issue of the Fresh Equity Shares, made several applications to the BSE for revocation of suspension of its shares. In reply thereto, the BSE asked the Company to comply with the norms for revocation of suspension failing which the BSE would initiate delisting of the shares of the Company.
• Oxvi) The Company complied with all norms for revocation of suspension except the explanation for difference between issued and listed capital of the Company. The Company also explained to the BSE that the difference between the issued and listed capital is because the Fresh Equity Shareshave not been listed till date.
• Owvii) The Company acknowledges that it did not comply with certain laws in issue of the Fresh Equity Shareswithout first revoking the BSE suspension order. The Company desires to rectify its non-compliances and is willing to comply with any directions to ratify the Fresh Equity Sharesand revoke the BSE suspension order. In fact, the Company has neither declared dividend on the Fresh Equity Sharesnor counted their votes to approve any resolution. The Fresh Equity Shareshave been kept in abeyance by the Company and the only need to issue the Fresh Equity Shareswas the dire need of funds by the Company due to the global slowdown. These Fresh Equity Sharesare in physical format only and have not yet been dematerialised, which shows that neither the Company nor the Allottees had any intentions to transfer these shares to any other person.

• Oxviii) The Fresh Equity Sharesnow form part of the current equity share capital of the Company. To rectify the issue of the Fresh Equity Shares, the Company is willing to annul the issue and reduce the issued, subscribed and paid-up equity share capital of the Company and revert to the issued, subscribed and paid-up equity share capital prior to issue of the Fresh Equity Shares.

• (xix) The Company proposes to reduce its issued, subscribed and paid-up equity share capital from Rs.9,55,54,425 divided into 1,91,10,885 equity shares of Rs.5 each to Rs.6,24,19,425 divided into 1,24,83,885 equity shares of Rs.5 each by cancelling and extinguishing 66,27 000 equity shares each of Rs.5 each issued and allotted to the persons as set out in Schedule | of this Scheme ("Capital Reduction").

• (xx) This Scheme of Capital Reduction is in the interest of the Company and its public shareholders as by virtue of this Capital Reduction, the shareholding of the public shareholders will increase. The Company has appointed Mr. L K Sivaramankrishnan, Chartered Accountant /Registered valuer for recommending the fair value for the reduction of share capital. As per valuation report dated 28.10.2020 as on 15th October 2020 the value of equity share per share is Zero. Due to the cash flow restraints in the Company, the Board of Directors and the Allottees have mutually agreed that the Company will refund Re.1 (Rupee one) per shares amounting to Rs.66, 27,000 (Rupees sixty six lakhs twenty seven thousand and the Allottees will be waiving off Rs.4 (Rupees four) per share. Therefore, once the Capital Reduction as envisaged in this Scheme is approved, the Company will refund Re.1 per share amounting to Rs.66, 27,000 (Sixty Six Lakhs Twenty Seven Thousand ) to the Allottees, such that the reduced share capital is equal to and matches the listed share capital. The Company will then make an application to the BSE, along with the order for Capital Reduction, requesting the BSE to revoke suspension of its shares.

Objects/ Benefits arising out of the Scheme

• (i) This Scheme, when approved, would enable the Company to comply with the norms for revocation of suspension by rectifying the difference between the issued capital and the listed capital. The revocation of suspension would provide an opportunity to the Company to raise further capital to fund new projects/undertake expansions/diversifications and make acquisitions.
• (ii) The revocation of suspension would also enable the Company to provide its shareholders a trading platform and thus provide ready marketability and liquidity to its shareholders. The Scheme would provide its shareholders the opportunity to realise the value of their investments.
• (ii) The approval of the Scheme and in revocation of suspension from trading will improve the Company's visibility and credibility among financial institutions and investors.
• (iv) The books of the Company would represent its financial position in a proper way and bring it in line with the listed capital of the Company which would help the Company position itself better in the market and undertake business activities efficiently. This would be value accretive to the shareholders as well as their holdings would yield better results.
• (v) The reduction of capital in the manner proposed in this Scheme would enable the Company to have a rational structure which is commensurate with its remaining business and assets.
• (vi) The Scheme, when approved, would provide greater flexibility to the Company in raising funds either from the capital market or from any Bank/ Financial institutions in the form of equity or debt, depending upon the business needs of the Company.
• (vii) The Scheme is merely a reduction in the share capital of the Company prepared in terms of Section 66 of the Act, read with the Rules, and other applicable provisions of the Act (to the extent applicable) and does not envisage transfer, conveyance or vesting of any of the properties and/ or liabilities of the Company to any person or entity.
• (viii) The reduction of share capital does not entail diminution of any liabilities of the Company in respect of any unpaid capital nor entails payment to any shareholder of any paid-up capital, except to the Allottees. Further, the reduction of capital does pursuant to this Scheme does not result in any prejudice to the shareholders, creditors, or any other stakeholders of the Company nor for that matter adversely affect the ordinary operations of the Company or its ability to honour its commitments or to pay its debts in the ordinary course of its business.
• (ix) The consent of the shareholders of the Company to this Scheme of reduction of capital of the Company will be taken through a resolution under the provisions of Section 66 of the Act read with the Rules and other applicable provisions of the Act (to the extent applicable) and any other applicable provisions

E. Others

The Board of the Directors of the Company at its meeting held on October 31, 2020, has considered and approved to cancel/extinguish 66,27,000 equity shares each of Rs.5 each allotted on preferential basis on March 31, 2016to the persons mentioned below against its paid-up capital of the Company, as a result of which the paid-up capital of the Company shall be reduced from Rs.9,55,54,425 divided into 1,91,10,885 equity shares of Rs.5 each to Rs.6,24,19,425 divided into 1,24,83,885 equity shares of Rs.5 each, simultaneously reducing 66,27,000 shares from the issued and subscribed capital,and subject to provisions of Section 66 and other applicable provisions of the Companies Act and the NCLT Rules.

In furtherance to the above, the Board of Directors of the Company at their meeting held on October 31, 2020, after considering the recommendations of the Audit Committee, discussed and granted approval to the Capital Reduction and approved the Scheme under Section 66 and other applicable provisions of the Companies Act read with NCLT Rules. The Scheme is subject to the approval of the shareholders of the Company by way of requisite majority, the NCLT Chennai and other applicable regulatory authorities. The Scheme shall resolve the difference between the issued and listed capital on BSE Limited.

Pursuant to the Scheme coming into effect i.e. upon approval of the Scheme by the shareholders of the Company by way of requisite majority, the NCLT Chennai and other applicable regulatory authorities, the issued, subscribed and paid-up capital of the Company shall be reduced from Rs.9,55,54,425 divided into 1,91,10,885 equity shares of Rs.5 each to Rs.6,24,19,425 divided into 1,24,83,885 equity shares of Rs.5 each.

In terms of the SEBI circulars, the Scheme shall be acted upon only if the requisite majority of the members assent to the Special Resolution. A copy of the Scheme setting out in detail the terms and conditions of the proposed Scheme, which has been duly approved by the Audit Committee, the Board of Directors of the Company at its meetings held on October 31, 2020 and was filed with the BSE, is enclosed as Annexure-1 to this Notice.

The BSE (designated Stock Exchange) had issued an observation letter dated June 10, 2021 to the above proposed Scheme. A copy of the BSE Observation Letter is enclosed as Annexure-2 to this Notice.

As per the terms of the Observation Letter, SEBI has given its 'no adverse objection' to the Scheme and has advised the Company to comply with the provisions of the SEBI Circulars.

Pursuant to the SEBI Circular No.CFD/DIL3/CIR/2017/21 dated March 10, 2017 the Company has filed the following Complaints Report with the BSE on December 29, 2020 and uploaded the same on the website of the Company.

Complaints Report

Shareholding Pattern- Pre and Post reduction of Capital:

General information and disclosures:

• (i) The Articles of Association of the Company provides for reduction of capital of the Company in any manner authorized by applicable law.

• (ii) The reduction of capital will not cause any prejudice to the creditors of the Company.Further, the proposed capital reduction will not have any impact on the operations of the Company or the ability of the Company to honour its commitment or to pay its debts in the ordinary course of business.

• (iii) No inquiry or investigation is pending against the Company under any provisions of Companies Act. All documents referred to in the accompanying Special Resolution and Explanatory Statement annexed thereto are made available on the Company's website at: www.kotharis.in and would also be available for inspection to the members at the Registered Office of the Company on all working days during the office hours till the last date for receipt of the forms from the members. The Board commends the Special Resolution for members' approval.

• (iv) This Scheme is in the interest of the Company and its public shareholders as by virtue of this capital reduction, the shareholding of the public shareholders will increase. Due to the cash flow restraints in the Company, the Allottees have agreed to waive off the whole subscription amount of Rs.5 per share that was paid by them to the Company as share subscription monies towards subscription of the equity shares on a preferential basis such that the reduced share capital is equal to and matches the listed share capital. In other words, the Company will not refund any amount to the Allotteeson reduction of the share capital The Company will then make an application to the BSE, along with the order for capital reduction, requesting the BSE to revoke suspension of its shares.

Other than Mr.Pradip D Kothari, Chairman, None of the other Directors orKey Managerial Personnel of the Company or their relatives are in any way deemed to be interested or concerned in this Resolution.

The Special Resolution, if approved by the members of the Company with requisite majority, will be subject to the confirmation by the NCLT Chennai as per Section 66(3) of the Companies Act read with the NCLT Rules.

By Order of the Board of Directors For KOTHARI INDUSTRIAL CORPORATION LIMITED

Place: Chennai CHAIRMAN Date: 30.06.2021 DIN:01315682

PRADIP D KOTHARI

ANNEXURE- |

SCHEME OF REDUCTION OF CAPITAL

BETWEEN

KOTHARI INDUSTRIAL CORPORATION LIMITED

AND

ITS SHAREHOLDERS

Scheme for reduction of capital of Kothari Industrial Corporation Limited

This Scheme is divided into the following paragraphs:

• (A) Part I - Definitions and Interpretations;
• (B) Part II - Background of Kothari Industrial Corporation Limited (including its capital structure);
• (©) Part III - reduction of share capital of Kothari Industrial Corporation Limited; and
• () Part IV - General Clauses and other Terms and Conditions.

PARTI

Definitions

In the Scheme, unless repugnant to the meaning or context thereof, the following expressions shall have the meaning as mentioned herein below:

• 1.1. "Act" shall mean the Companies Act, 2013 and shall include any rules, regulations, orders, statutory modification, amendment or re-enactment thereof from time to time;
• 1.2. "Allottees" shall mean the persons set out in Schedule I to Part IV of this Scheme;
• 1.3. "Board" or "Board of Directors" shall mean Board of Directors of the Company and shall, unless it is repugnant to the context or otherwise, include a committee of directors or any person authorized by the board of directors or such committee of directors;
• 1.4. "BSE" shall mean the BSE Limited;
• 1.5. "Company" shall mean Kothari Industrial Corporation Limited, a company incorporated on July 1, 1970 under the Companies Act, 1956 and having corporate identification number L24110TN1970PLC005865 and its registered office at Kothari

Buildings, 20, Nungambakkam High Road, Chennai, Tamil Nadu 600034.

• 1.6. "DSE" or "Designated Stock Exchange" shall mean a Stock Exchange which is chosen by the Company in accordance with SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"), as amended from time to time, and for the purpose of the Scheme, BSE Limited is the DSE;
• 1.7. "Effective Date" for the Scheme shall mean the date on which certified copies of the order of the NCLT under Section 66 of the Act, read with National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016 and other applicable provisions of the Act (to the extent applicable), are filed with the Registrar of Companies and if the certified copies are filed on different dates, the last of such dates;
• 1.8. "Equity Shares" shall mean fully paid-up equity shares of Rs.5 (Rupees five only) each issued by the Company;
• 1.9, "Fresh Equity Shares" shall have the meaning as defined in clause 5.12 herein below;
• 1.10. "NCLT" shall mean the Hon'ble National Company Law Tribunal, Chennai;
• "RoC" shall mean the Registrar of Companies, Chennai;
• 1.12. "Rules" shall mean the National Company Law Tribunal (Procedure for reduction of share capital of Company), Rules, 2016 as amended from time to time, and other applicable rules;
• "SEBI" shall mean the Securities and Exchange Board of India;
• 1.14. "Shareholder" shall mean a person holding Equity Shares who is registered as a member in the Register of Members of the Company; and

1.15. "this Scheme" or "the Scheme" or "Scheme" shall mean this Scheme of reduction of capital between the Company and its Shareholders in its present form or with such alterations/ modifications as may be approved, imposed or directed by the NCLT of the relevant jurisdiction under applicable laws.

The expressions, which are used in this Scheme and not defined in this Scheme shall, unless repugnant or contrary to the context or meaning hereof, have the same meaning ascribed to them under the Act and other applicable laws, rules, regulations and bye-laws, as the case may be, including any statutory modification or re-enactment thereof, from time to time.

PART II

Details of the Company

2.1. Incorporation of the Company

The Company was originally incorporated on July 1, 1970 under the Companies Act, 1956 as a public limited company under the name and style "Kothari (Madras) Limited". On April 10, 1984, the Company changed its name from "Kothari (Madras) Limited" to its current name i.e. "Kothari Industrial Corporation Limited" and obtained a fresh certificate of incorporation consequent upon change of name issued by Assistant Registrar of Companies, Tamilnadu.

The registered office of the Company is at Kothari Buildings, 114, Nungambakkam High Road, Chennai, Tamil Nadu 600034.

The Company is inter alia engaged in the business of manufacturing and mixing of fertilisers and has a network of distributors in the southern states and has developed a brand value recognised in the market place. The Company has planned to develop a Container Terminal at Ennore.

The Equity Shares are currently listed on the BSE. However, since the year 2000, the Equity Shares are suspended from trading on the BSE for non-payment of listing fees, which payment has since been made.

This Scheme is made in pursuance of Section 66 of the Act read with the Rules and other applicable provisions of the Act (to the extent applicable) and provides for the purpose of reduction of the paid-up share capital pertaining to issue of preferential allotment of equity shares.

2.2. Main Objects of the Company

The Main Objects of the Company, as set out in the Memorandum of Association are as follows:

• 1. To acquire and take over the entire undertakings and assets and liabilities of all or any of the following companies namely:- (i)Blue Mountain Estates and Industries Limited; (ii)Waterfall Estates Limited; (iii)Balmadies Plantations Limited; (iv)Kothari Textiles Limited; and (v)Adoni Spinning & Weaving Company Limited. by schemes of arrangement and amalgamation or otherwise and to carry on the business carried on hitherto by them.
• To acquire by purchase or otherwise and to carry on the business of estate owners, cultivators, planters, growers and manufacturers, of sellers and dealers in tea, coffee, cardamom, pepper, spices, rubber and gutta-percha and gums of every description, com, cocoa, rice, oil copra, coconuts, sugar, plantations, cinchona, grains, paddy, cereals, cotton, vegetable, agricultural and horticultural products hereinafter referred to as plantation, horticultural and agricultural produce and manufacture, dispose of, buy, and deal in the said products.
• To purchase, cultivate, plant, treat, cure, prepare, manipulate, submit to any process of manufacture and render marketable, whether on account of the Company or others, all kinds of plantation, horticultural and agricultural produce including coffee, cardamom, tea, rubber, pepper or other such products or produce and to sell and export

products, articles and things either in a prepared, manufactured or raw state and either wholesale or in retail.

• To carry on the business of agriculturists, horticulturists, planters, and cultivators in all their branches, and the business of coffee curers in all its branches.
• 4(a)] To promote, establish, improve, develop, administer, own and run industries, projects, enterprises, programmes for manufacturer, processing and/or preservation of agricultural produce, improvement and manufacturing of growth medium, soil nutrients, manufactured soil, programmes for processing and preservation of agricultural produce, forest produce, and products of pisciculture, sericulture, apiculture and of animal origin for purposes of increasing quality or availability or otherwise of goods and subsidiary foods in all their forms and variations, either for export or consumption in the country.
• To promote, establish, improve, develop, administer, own and run agro-industries, horticultural — industries, forestry, pisciculture industry, sericulture industry, apiculture industry, poultry farming, projects or enterprises or programmes for manufacture or production of plant, machinery, implements, accessories, tools, materials, substances, goods or things of any description, which in the opinion of the Company will help the growth and modernisation of agriculture, horticulture, forestry, pisciculture, sericulture, apiculture, poultry farming and animal husbandry.
• To carry on the business of cultivators of all kinds of seeds, process the same and carry on all activities connected therewith.
• To manufacture, process, prepare, preserve, can, refine, bottle, buy, sell and deal, whether as wholesalers or retailers or as exporters or importers or as principals or agents, in foods, meats, eggs, poultry, vegetables, canned and tinned and processed goods, protein, health and instant foods of all kinds

including, baby and dietetic foods, cereals, beverages, cordials, tonics restoratives and aerated mineral waters and food-stuffs and consumable provisions of every description for human or animal consumption. To carry on the business in all natural, artificial, synthetic or chemical, edible food colour.

• To carry on the business in all their branches of spinning and weaving mills and of spinners, weavers, bleachers, dyers, printers and finishers of cotton, silk, wool, rayon, natural and synthetic fibres and fibrous substances of all kinds.
• 5(ajl_ To carry on the business of manufacturers, importers and exporters, wholesale and retail dealers of and in men's, women's and children's clothing and wearing apparel of every kind, nature and description including shirts, bush-shirts, pyjama suits, vests, underwear, suits, foundation garments for ladies dresses, brassieres, maternity belts, knee caps, coats, panties, nighties and so on.
• 2 To carry on the business of manufacturers, importers and exporters wholesale and retail dealers of and in hosiery goods of every kind, nature and description, for men, women, and children including vests, underwear, socks, stockings, seaters, laces and so on and of all or anything which is used in hosiery goods.
• 3 To carry on all or any of the business of dealers and manufacturers of all kinds of threads, carpets, durries, mats, rugs, namdas, blankets, shawls, tweeds, linens, flannels and all other articles of woollen and worsted materials and of all articles similar to the foregoing or any of them or connected therewith.
• To purchase or otherwise acquire or take on lease any land or building in India or elsewhere in any part of the world and to work and to construct on such land, buildings houses and sheds, necessary and adapted to the working of spinning and weaving mills, jute mills, and cotton press and ginning factories to provide machinery, engines and apparatus requisite for the construction of such mills and factories and for the due and efficient working thereof, to buy raw cotton, wool, jute, silk and other fibrous substances and to spin, weave and work and to

clean, pack the same and sell the materials so manufactured and to do and perform all such acts and things as may be necessary and conducive to the attainment of the above objects or any of them.

• To carry on the business of manufacture, import, export, purchase, sale and as sales agents in fertilisers of all kinds including chemical and natural fertilisers and mixtures thereof.
• To process, alter, improve, manipulate and prepare for market byproduct or intermediate product arriving from or in the course of any of the manufacturers carried on by the Company or of any product derived from or resulting from carrying on any Plantation, Agricultural or Horticultural activities and to manipulate any goods in which such by-products or intermediate products can be utilised or put to profit.
• To carry on the business of manufacturers, processors, dealers, agents, importers, exporters, merchants, distributors and stockiest of sulphuric acid and super-phosphate and other chemicals of all kinds in all its branches.
• 1. To carry on the business of importers, manufacturers and dealers in chemicals, drugs, insecticides, disinfectants, — pharmaceuticals, industrial and other preparations and things of any kind whatsoever.
• 1. To prepare, manipulate, render marketable any of the products which the Company is authorised to manufacture, deal or produce.
• 1. To take on lease, hire, purchase or on license or otherwise acquire any lands, plantations, rights over or connected with lands, mills, factories, works, vessels, boats, barges, lorries, cars and any other mode of transport, apparatus and stock in trade which may be deemed necessary or convenient for any of the business which the Company is authorised to carry on.
• 1. To carry on the business of manufacture of sugar in all its branches.
• 1. To purchase, manufacture, produce, boil, refine, prepare, import,

export, sell and generally to deal in sugar, sugar-candy, jaggery, sugar-beet, sugar-cane, bagasse, molasses, syrups, malada, alcohol, spirits and all sugar products such as confectionery, glucose, sugarcandy, canned fruit, golden syrup and aerated waters and /or byproducts such as bagasse, boards, paper pulp, paper, butyl alcohol, acetone, carbon-di-oxide, hydrogen, potash, canvas and fertilisers and food products generally, and in connection therewith to acquire, construct, operate factories for the manufacture of sugar or any of its products or by-products and acquire or manufacture machinery for any of the above purposes.

• 1. To cultivate, plant, produce and raise or purchase sugar-cane, sorghum, sugar-beet, sago, dates, palmyra juice and other crops or raw materials and to transact such other work or business as may be proper, necessary or desirable in connection with the above objects or any of them.
• 1. To carry on the business of brewers and maltsters in all its branches, and to carry on the manufacture of yeast and yeast-products, citric acid and all or any products within the use or for the utilisation of any byproducts resulting in the course of manufacture of the same.
• 1. To carry on, in all or any of their branches, all or any of the business, namely, manufacturers of and dealers in all kinds of cotton and synthetic hosiery goods and worsted and woollen goods and goods made of jute, hemp, flax, cellulosic fibres, synthetic polymers, metallic fibres, glass fibres, protein fibres rubber, fibres, rayon and all kinds of man-made and other fibres or fibrous substances, natural or otherwise; manufacturers of and dealers in welding flux and powders, vitriol, bleaching and dyeing materials, resins, chemicals and bichromate plant products; manufacturers of and dealers in all kinds of cloth, fabrics and garments, dyers, finishers and dressers, manufacturers of and dealers in leather and leather goods.
• 1. To carry on in all or any of its branches, the business of manufacturers, processors, dealers, importers and exporters of timber, forest products, coir and composites; plastics and plastic products, P.V.C. pulps and fibres and sell generally all such materials and forest products.
• 1. To carry on in India or elsewhere the business of acting as consultants and advisers in respect of matters relating to technical, operational, industrial know-how, project and/or design engineering, scientific and other research, feasible studies, financial budgetary control, taxation, legal, industrial and labour relations, company promotion formation and registration and all other matters in any way connected or concerned with or relating thereto.
• 1. To carry on the business of electrical engineers, electricians, engineers, contractors, manufacturers, constructors, suppliers of and dealers in electrical and electronic equipment and other appliances, cable wire lines, dry cells, automotive batteries, electric batteries, nickel cadmium cells, photo flash cells and electric cells of all descriptions including train lighting cells, dry and leak proof batteries, air-conditioning apparatus and refrigerating apparatus and appliances in all or any of their details and branches and processes.
• 20-A To carry on the business of manufacturers, assemblers, importers and exporters, dealers and merchants of watches, wrist watches, timepieces, clocks, electronic watches and other instruments for measuring time, chronometers and horological instruments, time- controlled mechanisms including time-fuses, components and spare parts thereof.
• 1. To carry on business as manufacturers of chemicals in all its branches, gas makers, metallurgists, and mechanical engineers, ship-owners and charterers, and carries by land and sea, wharfingers, and warehousement barge-owners, and so far as may be deemed expedient the business of general merchants; and to carry on any other business whether manufacturing or otherwise, which may seem to the Company capable of being conveniently carried on in connection with the above, or calculated directly or indirectly to enhance the value of or render profitable any of the Company's property or rights
• 1. To carry on business as merchants, importers, exporters, dealers and distributors of all kinds of agricultural and horticultural products, manufactured goods, merchandise, and goods of all kinds and to carry on business as sales agents, commission agents, brokers or

intermediaries for the purchase, sale or dealing in any class of goods and to do all kinds of agency business.

• 22-A To undertake, carry out, promote and sponsor rural development programmes, including any programme for promoting the social and economic welfare of or the uplift of the public in any rural area and to incur any expenditure on any programme of rural development and to assist the execution and promotion thereof either directly or through an independent agency or in any other manner. Without prejudice to the generality of the foregoing, "programme of rural development" shall also include any programme for promoting social and economic welfare of or uplift of the public in any rural areas which the Director consider likely to promote and assist rural development, and that the words "rural area" shall include such areas as may be regarded as rural areas under Section 35CC and other applicable provisions, if any, of the Income Tax Act, 1961, or any other law relating to rural development for the time being in force or as may be regarded by the Directors as rural areas and the Directors may at their discretion, in order to implement any of the above mentioned objects or purposes, transfer without consideration or at such fair or concessional value as the Directors may think fit and divest the ownership of any property of the Company to or in favour of any public or local body or authority or central or state government or any public or other institutions of trusts recognized or approved by the central or state government or any authority specified in that behalf by such Government or established under any law for the time being in force as the Directors may approve.
• 22-B To undertake, carry out, promote and sponsor or assist any activity for the promotion and growth of national economy and for discharging what the Directors may consider to be social and moral responsibilities of the Company to the public or any section of the public as also any activity which the Directors consider likely to promote national welfare or social economic or moral uplift of the public or any section of the public and in such manner and by such means as the Directors may think fit and the Directors may without prejudice to the generality of the foregoing undertake, carry out, promote and sponsor any activity for publication through books, literature, newspaper or other similar and allied media including television or for organising lectures or

seminars likely to advance these objects or for giving merit awards, for giving scholarships, loans or any other assistance to deserving students or other scholars or persons to enable them to prosecute their studies or pursuits or researchers and for establishing, conducting or assisting any institution, fund, trust or other body, having any one of the aforesaid objects as one of its objects, by giving donations or otherwise in any other manner and the Directors may at their discretion in order to implement any of the above mentioned objects or purposes transfer without consideration or at such fair or concessional value as the Directors may think fit and divest the ownership of any property of the company to or in favour of any public or Local Body or Authority or Central or State Government or any authority specified in that behalf by such Government or established under any law for the time being in force as the Directors may approve.

Mining

• 22-C.1 To purchase, take on lease or acquire by concession, grant, licence, otherwise acquire any mining rights, mines and lands in India or elsewhere believed to contain metallic, or mineral, saline or chemical substances, major and minor minerals, ores, stone earths together with such rights as may be agreed upon and granted by Government or other rulers or owners thereof and to expend such sums of moneys as may be deemed requisite and advisable in exploration survey and development and exploitation thereof for the benefit of the Company.
• To search for and to purchase or otherwise acquire from any Government state or authority, any licenses, concessions, grants, decrees, rights, powers and privileges whatsoever, for major and minor minerals, stones, granites, earths etc. which may seem to the Company capable of being turned to account and to work, develop, carry out, exercise and turn to account the same.
• 22D To carry on the business of letting on hire or selling under hire purchase or otherwise, on such terms and conditions as may be decided by the Board from time to time all kinds of machinery, ships, barges, automobiles and vehicles of every kind and description, computers, office equipment of every kind, construction machinery, tools, fixtures,

equipment of every kind and machinery of all kinds and description.

• 22E To carry on the business of purchasing and letting on lease in any part of India or abroad all kinds of machinery, plants, tools, jigs and fixtures, agricultural machinery, ships, travelers, vessels, barges, automobiles and vehicles of every kind and description, computers, office equipment of every kind construction machinery of all types and descriptions, air conditioning plants, aircrafts, and electronic equipment of all kinds and descriptions and equipment and machinery of all kinds and description.
• 22F 1 To purchase, sell, develop, take in exchange, or on lease, hire or otherwise acquire, whether for investment or sale, or working the same, any real or personal estate including lands, business, building, factories, mill, houses, cottages, shops, depots, warehouses, machinery, plant, stock in trade, mineral rights, concessions, privileges, licenses, easement or interest in or with respect to any property or interest in or with respect to any property whatsoever for the purpose of the Company in consideration for a gross sum or rent or partly in one way and partly in the other or for any other consideration and to carry on business as proprietors of flats and buildings and to let on lease or otherwise apartments therein and to provide for the conveniences commonly provided in flats, suites and residential and business quarters.
• To provide long term finance to any person or persons or co-operative societies or association of persons or body of individuals either at interest or without and/or with or without any security for construction, purchase, enlarge or repair of any house, flats, raw houses, bungalows, rooms, huts used for residential purposes either in total or part thereof or to purchase any free hold or leasehold lands, estate or interest in any property to be used for residential purposes.
• *23.1 To carry on the business of buy, sell, trade, deal in or distribute, act as commission agents, brokers, facilitators, clearing and forwarding agents, to import/ export natural of minerals, oils or other natural resources, river sand and other allied minerals, M sand and or any other artificially or synthetically manufactured sand fit for

construction, infrastructure projects by whatever name called, civil constructions of all types and or any other allied products including through mining or dredging of canals, seas and other natural places, either in India or outside India and for the purpose to form partnerships or joint ventures with such person/s.

2 To carry on the business of general logistic service provider, to carry on business as general carriers and freight forwarders and to provide passenger carrier services, carrier freight transport, courier, truck, light or heavy haulage and delivery services by land, road, railway, sea, river, canal, water, or air for and in connection with any containers, packages, parcels, mails, goods or bulk commodities and for that purpose to purchase , hire or take on charter any ships, tugs, barges, lorries, vans, trailers and other vessels or vehicles of any description and to carry, collect, store, consign, distribute, transfer and deliver goods, wares, post, merchandise, parcels, packages, baggage, freight, animals, livestock, timber, coal, oil, ores and other minerals and other property of every description by any mode of transportation, and generally for such purposes to build, own, lease, acquire, manage and operate warehouses, bonded warehouses, container freight and terminal stations, cold storage facilities, open stock and dumping yards, yard for segregation of wastes, disposal of wastages and dredging operations act as agents for shippers and consigners, and to issue warehouse warrants and receipts and bills of lading. "

* Inserted vide special resolution passed at EGM held on 26.02.2019

3. Capital Structure of the Company:

The capital structure of the Company as per the audited financial statements as on March 31, 2020 is as follows:

There has been no change in the capital structure of the Company from March 31, 2020 till date.

Compliance with tax laws:

The Scheme has been drawn up to comply with the provisions of the Income Tax Act, 1961, if and to the extent applicable. If any term or provision of the Scheme is found or interpreted to be inconsistent with the provisions of the Act at a later date including resulting from a retrospective amendment of law or for any other reason whatsoever, till the time the Scheme becomes effective, the provisions of the Income Tax Act, 1961 shall prevail and the Scheme shall stand modified to the extent determined necessary to comply with the provisions of the Income Tax Act, 1961.

PART III

Rationale and Purpose of the Reduction

• 5.1. The equity shares of the Company have been suspended on the BSE since July 18, 2000 due to for non-payment of listing fees, which payment has since been made.
• 5.2. In April 2009, the Company made an application to the Hon'ble High Court of Madras under Sections 78, 100 and 101 of the Companies Act, 1956 to reduce its share capital and sub-divide its shares into shares of a smaller amount, i.e. from Rs.10 per share to Rs.5 per share.
• 5.3. On October 22, 2009, the Board of Directors of the Company approved the issue of 75,26,725 (seventy-five lakh twenty-six thousand seven hundred and twenty five) fully paid-up equity shares of Rs.5 (Rupees five only) each, aggregating to Rs.3,76,33,625 (Rupees three crores seventy-six lakhs thirty-three thousand six hundred and twenty five only) on preferential basis to the Allotees. The issue of the aforesaid equity shares on a preferential basis was subject to approval from its

shareholders and the Hon'ble High Court of Madras to reduce its share capital and sub-divide its shares. At the time of passing the resolution to issue the aforesaid equity shares on a preferential basis, the Company Petition No. 191 of 2009 dated April 8, 2009 was pending with the Hon'ble High Court of Madras.

• 5.4. On December 12, 2009, the shareholders of the Company approved the issue of the aforesaid equity shares on preferential basis which were subject to approval of the Hon'ble High Court of Madras to reduce its share capital and sub-divide its shares.
• 5.5. On August 31, 2010, the Hon'ble High Court of Madras confirmed the sub-division of the equity shares from Rs.10 per share to Rs.5 per share. The Hon'ble High Court of Madras also approved the write-off of an amount of Rs.8,64,53,000 (Rupees eight crores sixty-four lakhs fifty-three thousand only) out of Rs.12,90,06,000 (Rupees twelve crores ninety lakhs six thousand only) from the share premium account of the Company. On write-off of Rs.8,64,53,000 from the share premium account, the paid-up share capital of the Company was reduced from Rs. 12,48,38,850 (Rupees twelve crores forty-eight lakhs thirty-eight thousand eight hundred fifty only) to Rs.6,24,19,425 (Rupees six crores twenty-four lakhs nineteen thousand four hundred and twenty-five only).
• 5.6. The Company is a listed public company. The equity shares of the Company are listed on the BSE and as such, must comply with the ICDR Regulations (erstwhile DIP Guidelines) and the Listing Regulations (erstwhile Listing Agreement). Ideally, under the ICDR Regulations, the Company should have issued and allotted the aforesaid equity shares within fifteen (15) days of receiving shareholders' approval or within fifteen (15) days of receipt of the last of the regulatory approval (in this case the approval of the Hon'ble High Court of Madras), whichever is later.
• 5.7. On August 31, 2010, the Hon'ble High Court of Madras confirmed the sub-division of the Equity Shares from Rs.10 per share to Rs.5 per share and subsequent reduction of share capital of the Company. The Company, however, received a certified copy of the order only on

November 1, 2010. Upon receipt of the said order, the Company, on November 25, 2010, made an application to the BSE seeking inprinciple approval to issue the aforesaid equity shares on a preferential basis. The Company paid the fee of Rs.55,150 (Rupees fifty-five thousand one hundred fifty) along with the application seeking inprinciple approval.

• 5.8. Subsequent to making the application for in-principle approval to the BSE, the Company received Rs.3,31,35,000 (Rupees three crores thirty-one lakhs thirty-five thousand only) as advance share subscription monies towards subscription of the aforesaid equity shares on a preferential basis. The Company expected to receive the inprinciple approval from the BSE and then appropriate the advance share subscription monies towards issue of the aforesaid equity shares on a preferential basis.
• 5.9. The Company has till date not received the in-principle approval from the BSE to issue the aforesaid equity shares. Ideally, the Company should have returned the advance share subscription monies to the Allottees soon thereafter; however, due to lapse of time and oversight and change in the management of the Company, the Company continued to retain the share subscription monies. Since the Company had not allotted the aforesaid equity shares, the Company did not use any part of the share subscription monies then.
• 5.10. While waiting to receive the BSE in-principle approval, the Company proposed a restructuring plan and was working with its advisors to identify investors to infuse funds into the Company to meet its working capital requirements and to pay its debts.
• 5.11. Due to the global slowdown in 2013-14 and 2014-15, the demand for its products decreased over a period of time and the Company faced losses in its operations. Due to this sudden and unprecedented setback in business, the Company faced losses for three continuous financial years ending on 2013, 2014 and 2015. The Company suffered a loss of Rs.16,39,57,000 (Rupees sixteen crores thirty-nine lakhs fifty-seven thousand only) during these three financial years, which resulted in severe cash flow crisis. Although, the Company was taking steps to

revive itself and clear its debts, the Company continued to make losses for the financial year ended 2016 to the tune of Rs.5,67,00,000 (Rupees five crores sixty-seven lakh) resulting from the after effects of the global slowdown.

• 5.12. With the global slowdown having an adverse effect on business and no investor willing to infuse money into the Company, the Company was in dire need of funds to run its operations. With no other option left, the Company decided to use the share subscription monies but only after issue of the aforesaid equity shares. On March 31, 2016, the Company allotted 66,27,000 (sixty-six lakhs twenty-seven thousand) equity shares ("Fresh Equity Shares") to the Allottees by appropriating the share subscription monies.
• 5.13. Upon allotment of the Fresh Equity Shares, on January 6, 2017, the Company informed the BSE of allotment of the Fresh Equity Shares. The Company informed the BSE that the Fresh Equity Shares were issued pursuant to the provisions of the amendment notification issued by the Ministry of Corporate Affairs on the Companies (Acceptance of Deposits) Rules, 2014 bearing number GSR 241(E), which mandates that if a company had received any amount by way of subscriptions to any shares before April 1, 2014, against which the allotment is pending, the company shall, either return such amounts to the persons from whom these were received or allot shares or comply with these rules.
• 5.14. In compliance with the SEBI Circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015, the Company, on November 21, 2017, submitted a Uniform Fresh Listing Agreement dated November 16, 2017 to the BSE, executed by the authorised signatory of the Company. The execution of the Uniform Fresh Listing Agreement was approved by the Board of Directors of the Company in their meeting held on February 29, 2016.

• 5.15. The Company, prior to and after issue of the Fresh Equity Shares, made several applications to the BSE for revocation of suspension of its shares. In reply thereto, the BSE asked the Company to comply with the norms for revocation of suspension failing which the BSE would initiate delisting of the shares of the Company.

• 5.16. The Company complied with all norms for revocation of suspension except the explanation for difference between issued and listed capital of the Company. The Company also explained to the BSE that the difference between the issued and listed capital is because the Fresh Equity Shares have not been listed till date.

• 5.17. The Company acknowledges that it did not comply with certain laws in issue of the Fresh Equity Shares without first revoking the BSE suspension order. The Company desires to rectify its non-compliances and is willing to comply with any directions to ratify the Fresh Equity Shares and revoke the BSE suspension order. In fact, the Company has neither declared dividend on the Fresh Equity Shares nor counted their votes to approve any resolution. The Fresh Equity Shares have been kept in abeyance by the Company and the only need to issue the Fresh Equity Shares was the dire need of funds by the Company due to the global slowdown. These Fresh Equity Shares are in physical format only and have not yet been dematerialised, which shows that neither the Company nor the Allottees had any intentions to transfer these shares to any other person.
• 5.18. The Fresh Equity Shares now form part of the current equity share capital of the Company. To rectify the issue of the Fresh Equity Shares, the Company is willing to annul the issue and reduce the issued, subscribed and paid-up equity share capital of the Company and revert to the issued, subscribed and paid-up equity share capital prior to issue of the Fresh Equity Shares.
• 5.19. The Company, proposes to reduce its issued, subscribed and paid-up equity share capital from Rs.9,55,54,425 divided into 1,91,10,885 equity shares of Rs.5 each to Rs.6,24,19,425 divided into 1,24,83,885 equity shares of Rs.5 each by cancelling and extinguishing 66,27,000 equity shares each of Rs.5 each issued and allotted to the persons as set out in Schedule I of this Scheme ("Capital Reduction").
• 5.20. This Scheme of Capital Reduction is in the interest of the Company and its public shareholders as by virtue of this Capital Reduction, the shareholding of the public shareholders will increase. Due to the cash

flow restraints in the Company, the Allottees have agreed to waive off the whole subscription amount of Rs. 5 per share that was paid by them to the Company as share subscription monies towards subscription of the aforesaid equity shares on a preferential basis such that the reduced share capital is equal to and matches the listed share capital. The Company will then make an application to the BSE, along with the order for Capital Reduction, requesting the BSE to revoke suspension of its shares.

Objects/ Benefits arising out of the Scheme

• 6.1. This Scheme, when approved, would enable the Company to comply with the norms for revocation of suspension by rectifying the difference between the issued capital and the listed capital. The revocation of suspension would provide an opportunity to the Company to raise further capital to fund new projects/undertake expansions/diversifications and make acquisitions.
• 6.2. The revocation of suspension would also enable the Company to provide its shareholders a trading platform and thus provide ready marketability and liquidity to its shareholders. The Scheme would provide its shareholders the opportunity to realise the value of their investments.
• 6.3. The approval of the Scheme and in revocation of suspension from trading will improve the Company's visibility and credibility among financial institutions and investors.
• 6.4. The books of the Company would represent its financial position in a proper way and bring it in line with the listed capital of the Company which would help the Company position itself better in the market and undertake business activities efficiently. This would be value accretive to the shareholders as well as their holdings would yield better results.

• 6.5. The reduction of capital in the manner proposed in this Scheme would enable the Company to have a rational structure which is commensurate with its remaining business and assets.

• 6.6. The Scheme, when approved, would provide greater flexibility to the Company in raising funds either from the capital market or from any Bank/ Financial institutions in the form of equity or debt, depending upon the business needs of the Company.

• 6.7. The Scheme is merely a reduction in the share capital of the Company prepared in terms of Section 66 of the Act, read with the Rules, and other applicable provisions of the Act (to the extent applicable) and does not envisage transfer, conveyance or vesting of any of the properties and/ or liabilities of the Company to any person or entity.
• 6.8. The reduction of share capital does not entail diminution of any liabilities of the Company in respect of any unpaid capital nor entails payment to any shareholder of any paid-up capital, except to the Allottees. Further, the reduction of capital does pursuant to this Scheme does not result in any prejudice to the shareholders, creditors, or any other stakeholders of the Company nor for that matter adversely affect the ordinary operations of the Company or its ability to honour its commitments or to pay its debts in the ordinary course of its business.
• 6.9. The consent of the shareholders of the Company to this Scheme of reduction of capital of the Company will be taken through a resolution under the provisions of Section 66 of the Act read with the Rules and other applicable provisions of the Act (to the extent applicable) and any other applicable provisions. Pre-reduction Post-reduction

Effect of the Scheme

7.1. The proposed reduction of capital pursuant to the Scheme, by reducing the share capital of the Company will be reflected in the books of accounts of the Company, on the Effective Date, in following manner:

Capital structure of the Company pre and post the Scheme is reflected in the table below:

• 7.2. The aforesaid reduction is proposed to be effected by nullifying the issue of 6,62,7000 equity shares on March 31, 2016 and bringing the paid-up share capital in line with the share capital of the Company as listed on the BSE.
• 1. Upon approval of the Scheme, the paid-up share capital of the Company will be reduced from Rs.9,55,54,425 (Rupees nine crores fifty five lakh fifty four thousand four hundred and twenty five) divided into 1,91,10,885 (one crore twenty four lakh eighty three thousand eight hundred and eighty five) Equity Shares of Rs.5 each to Rs.6,24,19,425 (Rupees six crores twenty four lakh nineteen thousand four hundred and twenty five) divided into 1,24,83,885 Equity Shares of Rs.5 each.

Authorized Share Capital

8.1. Upon approval of this Scheme, paid-up share capital of the Company will be reduced as set out in the previous paragraph. There will be no change to the authorised share capital of the Company.

PART IV

Conditionality of the Scheme

The Scheme is conditional upon and subject to:

• 9.1. The Scheme being approved and agreed by the respective requisite majority of shareholders of the Company as required under the Act;
• 9.2. Receipt of requisite sanctions and approvals under applicable laws, including but not limited to approvals and sanctions required under the SEBI Circular CFD/DIL3/CIR/2017/21 dated March 10, 2017 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
• 9.3. The Scheme being approved by the NCLT under Section 66 of the Act read with the Rules and other applicable provisions of the Act (to the extent applicable);
• 9.4. The certified copy of the above order of the NCLT sanctioning the Scheme being filed with the Registrar of Companies, Chennai.
• 9.5. Any other sanction or approval of the appropriate authorities concerned, that may be considered necessary and appropriate by the Board of Directors of the Company being obtained and granted in respect of any of the matter for which such sanction or approval is required.

10. Costs, Charges and Expenses

10.1. All past, present and future costs, charges, levies, duties and expenses in relation to or in connection with or incidental to the Scheme and of carrying out and implementing/ complementing thereof shall be borne and paid solely by the Company and all the above costs shall be treated as costs relating to the Scheme.

11. Impact of the Scheme on Employees

The Scheme shall not have any adverse impact on the employees of the Company. All staff, workmen and other employees in the service of the Company immediately before the capital reduction shall stay as staff, workmen and employees of the Company after the capital reduction. Their service shall be continuous and shall not be interrupted by reason of this capital reduction. The terms and conditions of service applicable

to the said staff, workmen or employees after such capital reduction shall not in any way be less favorable to them than those applicable to them immediately before the capital reduction.

11.2. The approval of the Scheme would increase the visibility and improve public perception of the Company, thereby increasing employee value and morale. It may also lead to hiring of new staff and may facilitate stock-based payments such as ESOPs, etc.

12. Impact of the Scheme on Creditors/ Banks/ Financial Institutions

• 12.1. The proposed capital reduction would not in any way adversely affect the ordinary operations of the Company or the ability of the Company to honour its commitments or pay the debts in the ordinary course of business. The above proposal, does not in any manner, alter, vary, or affect the rights of the creditors/ banks/ financial institutions. They would in fact be generally benefitted as the Scheme would provide ready marketability to the shares of the Company which are acceptable to the creditors as collateral for credit facilities. A listed company can also borrow from financial institutions easily as it is rated favourably by creditors.
• 12.2. The proposed capital reduction in any manner whatsoever does not, alter, vary, or affect the payment of any types of dues or outstanding amounts including all or any of the statutory dues payable or outstanding.

13. Contracts, Deeds, Bonds and other Instruments

13.1. Subject to other provisions contained in the Scheme, all contracts, deeds, agreements and other instruments of whatever nature to which the Company is a party subsisting or having effect immediately before the Effective Date shall remain in full force and effect against or in favour of the Company, as the case may be, and shall be enforced as fully and as effectually as before such reduction.

14. Conduct of Business by the Company

14.1. The Scheme would not affect the ability or liquidity of the Company to meet its obligations/ commitments in the normal course of business. Further, this Scheme would also not in any way adversely affect the ordinary operations of the Company during the course or after the approval of reduction of capital.

15. Legal Proceedings

15.1. If any suit, writ petition, appeal, revision or other proceedings of whatever nature by or against the Company are pending, the same shall not abate, be discontinued or be in any way prejudicially affected by the capital reduction, but such proceedings may be continued, prosecuted and enforced by or against the Company in the same manner and to the same extent as it would be or might have been continued, prosecuted and enforced by or against the Company before such capital reduction.

16. Application to the NCLT

16.1. This involves reduction of share capital as contemplated by the Articles of Association of the Company and approvals of the Hon'ble National Company Law Tribunal, Chennai Bench, Tamil Nadu under Section 66 of the Act read with the Rules and other applicable provisions of the Act (to the extent applicable) to be sought as a measure of legal compliance, transparency, prudence and extra caution.

17. Modifications/ Amendments of the Scheme

17.1. The Company, by its Board or such other Committee/ person or persons, as the Board may authorize, may make, or affect or assent to any modification or amendment of the Scheme which the Hon'ble National Company Law Tribunal, Chennai Bench and/or any other authorities under law may deem fit to direct or impose or which may otherwise be considered necessary or desirable by the Board for settling any question or doubt or difficulty that may arise for implementing and/ or carrying out the Scheme or otherwise howsoever arising out of or under or by virtue of the Scheme and/ or any matter concerned or connected herewith, as may be considered by the Board to be in the best interest of the Company and its members including the withdrawal of the Scheme, and do all such acts, deeds and things as may be necessary, desirable or expedient for giving effect to the Scheme.

17.2. For the purpose of giving effect to the Scheme or to any modification thereof, the Board of Directors of the Company, are authorised to give such directions and/or to take such steps as may be necessary or desirable including any directions for settling any question or doubt or difficulty whatsoever that may arise

18. Date of taking effect

18.1. The Scheme set out herein in its present form or with any modification(s) hereto approved or imposed or directed by the Hon'ble National Company Law Tribunal, Chennai Bench will be effective from the Effective Date.

19. Effect of non-receipt of approval/ sanctions

• 19.1. In the event of any aforesaid sanction and approvals not being obtained and/or the resolution not being sanctioned by the Hon'ble National Company Law Tribunal, Chennai Bench and/or the order or orders not being passed as aforesaid, the Scheme shall become null and void and the Company shall bear and pay the costs, charges and expenses for/or in connection therewith.
• 19.2. In the event, any condition or amendment or modification that may be imposed by the Hon'ble National Company Law Tribunal, Chennai Bench or any competent authority, or if the Board of Directors of the Company decides, they shall be at a liberty to withdraw from the Scheme unconditionally.

20. Severability

20.1. If, in the opinion of the Board, any part of the Scheme is found to be unworkable for any reason whatsoever, the same shall not affect the validity or implementation of other parts or provisions of the Scheme. If any part of this Scheme hereof is invalid, ruled illegal by any appropriate authority of competent jurisdiction, or unenforceable under present or future laws, then such part shall be severable from the remainder of the Scheme, and the Scheme shall not be affected thereby, unless the deletion of such part shall cause this Scheme to become materially adverse, in which case the Board shall attempt to bring a suitable modification to the Scheme. The Board shall be entitled to revoke, cancel and declare the Scheme to have no effect, if the Board is of the view that the coming in to effect of the Scheme would have adverse implications on the Company.

21. Designated Stock Exchange

21.1. The Designated Stock Exchange for interaction with SEBI will be the BSE Limited.

22. Accounting Treatment

22.1. The Company shall pass appropriate entries as per the applicable accounting policies and accounting standards (specified is Section 133 or any other provision of the Act) as regards accounting for the reduction of share capital.

23. Cancellation of Shares

Upon this Scheme becoming effective:

23.1. All Allottees to whom the Fresh Equity Shares were issued and the share certificates held by them corresponding to the Fresh Equity Shares will be deemed to have been automatically cancelled and cease to be negotiable and be of no commercial or legal value and shall be non-usable and non-tradable on any stock exchange or otherwise on and from the Effective Date.

23.2. In the case of shares held in dematerialized and electronic form, the required procedure for reflecting the cancellation of Fresh Equity Shares issued to the Allottees, shall be adopted for making necessary alterations in the depository accounts of the Allottees.

24. Listing of Shares

24.1. Notwithstanding the reduction of share capital of the Company in pursuance of the Scheme, the listing benefit of the Company on the Stock Exchanges where the existing Equity Shares are listed shall continue and the Company will comply with the applicable provisions of the LODR and the listing agreement filed with the BSE.

25. Form of Minute under Section 66(5) of the Act

25.1. The form of minute proposed to be registered under Section 66(5) of the Act, is as follows:

"The issued, subscribed and paid up capital of Kothari Industrial Corporation Limited is henceforth Rs.6,24,19,425 (Rupees six crores twenty four lakh nineteen thousand four hundred and twenty five) divided into 1,24,83,885 (one crore twenty four lakh eighty three thousand eight hundred and eighty five) Equity Shares of Rs.5 each."

26. Expenses Connected with the Scheme

26.1. All costs, charges and expenses of the Company respectively in relation to or in connection with the Scheme and of carrying out and implementing/completing the terms and provisions of the Scheme and/or incidental to the completion of the Scheme shall be borne and paid by the Company.

SCHEDULE I

List of Allottees

BSE Limited Registered Office: Floor 25, P J Towers, Dalal Street, Mumbai — 400 001, India T:+91 22 2272 8045/8055 F:+9122 22723457 www.bseindia.com Corporate Identity Number: L67120MH2005PLC155188

DCS/AMALI/JR/R37/1972/2021-22 "E-Letter" June 10, 2021

The Company Secretary, Kothari Industrial Corporation Ltd. 114/117, Kothari Buildings, Mahatma Gandhi Salai, Nungambakkam, Chennai, Tamil Nadu, 600034

Sir,

Sub: Observation letter regarding Draft Scheme of Reduction of Share Capital of Kothari Industrial Corporation Ltd.

We are in receipt of the Draft Scheme of Reduction of Share Capital of Kothari Industrial Corporation Ltd filed as required under SEBI Circular No. CFD/DIL3/CIR/201 7/21 dated March 10, 2017; SEBI vide its letter dated June 10, 2021 has inter alia given the following comment(s) on the draft scheme of Reduction:

• * "Company shall duly comply with various provisions of the Circular."
• * "Company shall ensure that additional information and undertakings, if any, submitted by the Company, after filing the Scheme with the Stock Exchanges, and from the date of receipt of this letter is displayed on the websites of the listed company and the stock exchanges."
• * "Company shall take steps for revocation of suspension of its equity shares."
• "Company is advised that the observations of SEBI/Stock Exchanges shall be incorporated in the petition to be filed before National Company Law Tribunal (NCLT) and the company is obliged to bring the observations to the notice of NCLT."
• * "Itis to be noted that the petitions are filed by the company before NCLT after processing and communication of comments/observations on draft scheme by SEBI/stock exchange. Hence, the company is not required to send notice for representation as mandated under section 230(5) of Companies Act, 2013 to SEBI again for its comments / observations / representations."

Accordingly, based on aforesaid comment offered by SEBI, the company is hereby advised:

• * To provide additional information, if any, (as stated above) along with various documents to the Exchange for further dissemination on Exchange website.
• * To ensure that additional information, if any, (as stated aforesaid) along with various documents are disseminated on their (company) website.
• * To duly comply with various provisions of the circulars.

In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon'ble NCLT.

Further, where applicable in the explanatory statement of the notice to be sent by the company to the shareholders, while seeking approval of the scheme, it shall disclose information about unlisted company involved in the format prescribed for abridged prospectus as specified in the circular dated March 10, 2017.

Kindly note that as required under Regulation 37(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the validity of this Observation Letter shall be six months from the date of this Letter, within which the scheme shall be submitted to the NCLT.

The Exchange reserves its right to withdraw its 'No adverse observation' at any stage if the information submitted to the Exchange is found to be incomplete / incorrect / misleading / false or for any contravention of Rules, Bye-laws and Regulations of the Exchange, Listing Agreement, Guidelines/Regulations issued by statutory authorities.

Please note that the aforesaid observations does not preclude the Company from complying with any other requirements.

Further, it may be noted that with reference to Section 230 (5) of the Companies Act, 2013 (Act), read with Rule 8 of Companies (Compromises, Arrangements and Amalgamations) Rules 2016 (Company Rules) and Section 66 of the Act read with Rule 3 of the Company Rules wherein pursuant to an Order passed by the Hon'ble National Company Law Tribunal, a Notice of the proposed scheme of compromise or arrangement filed under sections 230-232 or Section 66 of the Companies Act 2013 as the case may be is required to be served upon the Exchange seeking representations or objections if any.

In this regard, with a view to have a better transparency in processing the aforesaid notices served upon the Exchange, the Exchange has already introduced an online system of serving such Notice along with the relevant documents of the proposed schemes through the BSE Listing Centre.

Any service of notice under Section 230 (5) or Section 66 of the Companies Act 2013 seeking Exchange's representations or objections if any, would be accepted_and processed through the Listing Centre only and no physical filings would be accepted. You may please refer to circular dated February 26, 2019 issued to the company.

Yours faithfully,

Sd/- Nitinkumar Pujari Senior Manager

October 31, 2020

MCAPL: MUM: 2020-21: 0036

To, Board of Directors Kothari Industrial Corporation Limited Kothari Bldgs, 20, Nungabakkam High Road, Chennai-600 035

Sub : Fairness Opinion Certificate on the Valuation of shares in the matter Reduction of Share Capital of Kothari Industrial Corporation Limited ("KICL")

Dear Sir,

This has reference to the request made by the management of Kothari Industrial Corporation Limited (*KICL"), The Board of Directors of KICL has appointed us on October 29, 2020 and has requested us to issue Fairness Opinion Certificate in connection with the valuation exercise being carried out by Mr. L K Sivaramakrishnan, Chartered Accountant/Registered Valuer (hereinafter referred to as "the Valuer") for recommending the Fair Value for the Reduction of Share Capital of Kothari Industrial Corporation Limited.

1. PURPOSE OF VALUATION

• 1.1 The Board of Directors of have considered Reduction of Share Capital of Kothari Industrial Corporation Limited to the tune of 66,27,000 Equity Shares of the Company which were allotted to the Promoter Group on March 31, 2016 and not yet listed on BSE Limited.
• 1.2 In this regard, Mr. L K Sivaramakrishnan, Chartered Accountant/Registered Valuer were appointed to carry out the valuation of Equity Shares to arrive at the fair value of Equity Shares of KICL in the matter of Reduction of Share Capital.
• 1.3 The information contained herein and our certificate is confidential. It is intended only for the sole use of captioned purpose including for the purpose of obtaining requisite approvals as per SEBI (LODR) Regulations, 2015.

2. SOURCE OF INFORMATION

For the purpose of the valuation, we have relied upon the following source of information provided by the management of the Companies:

• i) Memorandum and Articles of Association;
• ii) Audited Consolidated and Standalone Financial Statements of the Company for the years ended March 31, 2020 and March 31, 2019;
• iii) Provisional Financial Statements of the Company ended October 15, 2020;
• iv) Shareholding pattern of the Company as on 15th October 2020;

CMARK. corPorATe ADVISORS PVT. LTD. Page 1/3 CIN No : U67190MH2008PTC181996 GSTIN/UIN ; 27AAFCM5379J1ZY 044Th eSamnmit Business Bay, Sant Janabai Road, (Service Lane), Off. W. E. Highway, Vile Parle (E), Mumbai - 400 057 Tele : +91 22 2612 3207 Fax: +91 22 2612 3208 Web: www.markcorporateadvisors.com E-mail : [email protected]

• vi) Draft Scheme of Capital Reduction of Kothari Industrial Corporation Ltd and its Shareholders and Creditors.
• vii) Joint Memo of Compromise filed by the Kothari Industrial Corporation Ltd (Corporate Debtor) and Beakae Properties P Ltd (Financial Creditor) filed before National Company Law Tribunal (NCLT), Chennai Bench, Chennai.
• viii) Discussions with the Management and other quantitative and qualitative data

3. EXCLUSIONS AND LIMITATIONS

• 3.1 Conclusions reached by us are dependent on the information provided to us being complete & accurate in all material respects. Our scope of work does not enable us to accept responsibility for the accuracy and completeness of the information provided to us. The scope of our assignment did not involve us performing audit tests for the purpose of expressing an opinion on the fairness or accuracy of any financial or analytical information used during the course of our work. We have not performed any audit, review or examinations of any of the historical or prospective information used and, therefore, do not express any opinion with regard to the same. In addition, we do not take any responsibility for any changes in the information used for any reason, which may occur subsequent to the date of our certificate.
• 3.2 This certificate is prepared with a limited purpose/scope as identified/stated earlier and will be confidential being for use only to whom it is issued. It must not be copied, disclosed or circulated in any correspondence or discussions with any person, except to whom it is issued and to those who are involved in this transaction and for various approvals for this transaction.

4. VALUATION METHODOLOGY ADOPTED BY THE VALUER

In arriving at the Fair Value of Equity Shares of KICL, we have determined the values independently but on arelative basis. We have considered the methods relevant and applicable, which included:

• 1) Asset Approach Book Value Method
• 2) Income Approach
• (a) Discounted Cash Flow Method
• (b) Capitalization of Free Cash Flow Method
• 3) Market Approach
• (a) Comparable Companies Multiple Method
• (b) Comparable Companies Transaction Method
• 1) Asset Approach Book Value Method:

The asset based (net underlying assets) approach is a form of cost approach. The sum of individual asset values represents the total asset value of the enterprise. The enterprise's liabilities related to working capital are deducted to arrive at an indication of value for the invested capital of the business. Because the cost approach does not always reflect the full value of intangible assets, it is often not appropriate to value an operating business. An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.

2) Income Approach:

(a) Discounted Cash Flow Method:

The DCF method values the asset by discounting the cash flows expected to be generated by the asset for the explicit forecast period and also the perpetuity value (or terminal value) in case of assets with an indefinite life. The DCF method is one of the most common methods for valuing (MARK. corPoRATE ADVISORS PVT.LTD. Peoe B/S

CIN No : U67190MH2008PTC181996 GSTIN/UIN : 27AAFCM5379J1ZY

404/1, The Summit Business Bay, Sant Janabai Road, (Service Lane), Off. W. E. Highway, Vile Parle (E), Mumbai - 400 057 Tele : +91 22 2612 3207 Fax: +91 22 2612 3208 Web: www.markcorporateadvisors.com E-mail : [email protected]

various assets such as shares, businesses, real estate projects, debt instruments, etc. The method involves discounting of future cash flows expected to be generated by an asset over its life using an appropriate discount rate to arrive at the present value.

(b) Capitalization of Free Cashflow Method:

The capitalization of free cash flow is an income based approach which is used to value a business based on future estimated free cash flows to equity or free cash flows to the firm generated by the company. The projected free cash flow is capitalized using an appropriate capitalization rate. This method assumes that all the assets, tangible or intangible are indistinguishable parts of the business and does not attempt to separate the values of the two. The capitalization of free cash flow method is a single period method that assumes a stable level of cashflow. The method is not appropriate for valuing companies in which the projected stream of cashflows is expected to vary. In the case of Kothari Industrial Corporation Ltd the free cashflows in last few quarters have varied. Further considering Company's growth plan, there may be variability in free cashflows in coming periods, Therefore, it is considered appropriate not to use capitalization of free cashflows method for aforesaid valuation.

3) Comparable Companies Multiple Method:

Under this method, value of equity shares of a company is arrived at by using multiples derived from the valuations of comparable companies, as manifest through their stock market valuations of listed companies. This valuation is based on the principle that market valuations, taking place between informed buyers and informed sellers, incorporate all factors relevant to the valuation.

5. CONCLUSION

• 5.1. We have reviewed the methodology as mentioned above adopted by the Valuer for arriving at the fair valuation of the equity shares of KICL and also reviewed the working and underlining assumptions adopted to arrive at the values under each of the above approaches, for the purposes of recommending fair value of Equity shares of KICL. The Book value as on Valuation Date i.e. October 15, 2020 has been calculated at %(2.52) per Equity Share. The value of the share of a company cannot be less than Zero. In view of the same the value of share is considered as 'Zero'.
• 5.2. On the basis of the foregoing points, we are of the opinion that fair value of Equity Shares of KICL of Nil made by L K Sivaramakrishnan, Chartered Accountant/Registered Valuer is fair & reasonable for the purpose of Reduction in Share Capital of Kothari Industrial Corporation Limited.

Thanking you,

For Mark Corporate Advisors Private Limited

Rajendra Kanoongo Jt. Managing Director

Place: Mumbai

(MARK. corporate ADVISORS PVT. LTD. CIN No : U67190MH2008PTC181996 GSTIN/UIN : 27AAFCM5379J1ZY 404/1, The Summit Business Bay, Sant Janabai Road, (Service Lane), Off. W. E. Highway, Vile Parle (E), Mumbai - 400 057 Tele : +91 22 2612 3207 Fax: +91 22 2612 3208 Web: www.markcorporateadvisors.com E-mail : [email protected] Page 3|3