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Directors’ ReportDirectors’ ReportDirectors’ ReportDirectors’ ReportDirectors’ Report

Dear Shareholders,

Your directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Statement of accountsof the Company for the year ended 31st March, 2008.

FINANCIAL RESULTS :2007-08 2006-07

(Rs. in crores) (Rs. in crores)

Sales and other income 11,075.01 8,648.29

Profit before depreciation and tax 328.47 222.05

Depreciation 74.73 65.61

Profit before taxation 253.74 156.44

Provision for taxation 86.11 54.05

Provision for tax for earlier years 8.40 1.69

Profit after taxation 159.23 100.70

Balance brought forward from previous year 170.30 107.40

Amount available for appropriation 329.53 208.10

APPROPRIATION

General Reserve 25.00 25.00

Debenture Redemption Reserve 0.18 0.44

Proposed dividend - Preference 1.81 1.81

- Equity 9.44 8.75

Tax on dividend 1.91 1.80

Surplus carried to Balance Sheet 291.19 170.30

329.53 208.10

DIVIDEND :

Your directors recommend a dividend of 4% amounting to Rs.1.81 crores (Previous year Rs.1.81 crores) on 45,24,285 RedeemableCumulative Preference Shares of Rs.100/- each.

Your directors also recommend dividend of 25% (Re.0.50 per share on face value of Rs.2/-) on equity capital of Rs.37.76 croresfor the year under review as against 24% (Rs.2.40 per share on face value of Rs.10/-) for the previous year. The total cash outgoon account of dividend and tax thereon amounts to Rs.13.16 crores as against Rs.12.36 crores in the previous year.

OPERATIONS :

During the year under review, the sales and other income of your Company have increased to Rs.11,075.01 crores from Rs.8,648.29crores in the previous year, recording a growth of over 28%. The Company’s Profit before depreciation and tax increased toRs. 328.47 crores from Rs. 222.05 crores in the previous year reflecting a healthy growth of approximately 48%. Profit after tax alsoincreased to Rs.159.23 crores against that of Rs.100.70 crores in previous year, registering a growth of over 58%.

EXPORTS :

The Company registered a growth of over 54% in exports during the financial year as compared to that of previous year. Itexported products of Rs.1,371.93 crores during the year under review as compared to Rs.887.30 crores in the previous year.

FUTURE OUTLOOK :

The Company is focused on backward integration, specifically in Palm Oil Segment. The Company has signed Memorandumof Understandings with the Governments of Andhra Pradesh, Gujarat, Mizoram, Orissa and Tamil Nadu for palm cultivationin high potential areas under contract farming as per the States' policies. The Company is also exploring palm plantationbusiness opportunities outside India. This will help your Company in improving supply chain, customer relationshipmanagement and massive growth on sustainable basis.

Keeping in view the growing soya crop in India, your Company is in the process of setting up/expanding production facilitiesat the new locations/existing processing plants to cater to the growing demand and sustain leadership position. As a part ofour strategy to enlarge our presence in the growing domestic edible oil segment, your Company has begun to increasecapacities of production facilities in mustard oil segment.

The abovementioned initiatives will enable your Company to cater to substantial part of edible oil consumption acrossvarious segments in India with a clear focus on the growing branded segment in future.

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The Company is also exploring avenues in bio-fuel industry and has been allotted lease-hold land in the State ofMadhya Pradesh.

DIRECTORS :

Mr. P.D.Nagar and Mr. Sajeve Deora retire by rotation in accordance with the provisions of Articles of Association of theCompany and being eligible, offer themselves for re-appointment. Mr. P.S. Santhanakrishnan resigned from the Board ofDirectors with effect from 31st March, 2008 due to his advanced age and health concerns. The Board has placed on recordthe valuable contribution made by Mr. P.S. Santhanakrishnan during his tenure with the Company.

The Board of Directors appointed Mr. Prabhu Dayal Dwivedi as an Additional Director during the year under review. In termsof Articles of Association, he holds office upto the forthcoming Annual General Meeting. The Company has received noticefrom a member proposing him as candidate for the office of director in accordance with the provisions of Section 257 of theCompanies Act, 1956.

The Company has also received notice from a member proposing Mr. Ashok Kumar Dhingra as a candidate for the office ofdirector in accordance with the provisions of Section 257 of the Companies Act, 1956.

EMPLOYEES STOCK OPTION SCHEME (ESOS) :

Pursuant to the resolution passed by the members at the Extra-Ordinary General Meeting held on 28th November, 2007, theCompany has introduced Employee Stock Option Scheme 2007 (referred to as "the scheme') to enable the eligible directors/employees of the Company and its subsdiary to participate in the future growth of the Company. The Company has granted12,37,000 options to the eligible directors and employees of the Company and its subsidiary on 1st April, 2008. All optionsvest over 3 years from 1st April, 2008 - 20% on 1st April, 2009, 30% on 1st April, 2010 and 50% on 1st April, 2011.

ISSUE OF WARRANTS :

Pursuant to the resolution passed by the members at the Extra-Ordinary General Meeting held on 28th November, 2007, theBoard of Directors issued 3,53,25,000 warrants, each convertible into one fully paid up equity share of Rs. 2/-, to promoters,their relatives and associates and other persons/entities on preferential basis. During the year, 64,00,000 warrants wereconverted into equity shares.

SUBSIDIARY COMPANY :

The Report of Directors and Statement of Accounts of subsidiary ‘Ruchi Worldwide Limited’ together with the Auditors’Report thereon, are attached. The requisite statement pursuant to Section 212 of the Companies Act, 1956 is also attachedherewith.

CORPORATE GOVERNANCE :

The Company has in practice a comprehensive system of corporate governance. A separate Report on Corporate Governanceforms part of the Annual Report. A certificate of the Company’s Statutory Auditors regarding compliance of the conditions ofCorporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

DIRECTORS’ RESPONSIBILITY STATEMENT :

As stipulated under Section 217 (2AA) of the Companies Act, 1956, your directors subscribed to the “Directors’ ResponsibilityStatement” and confirm as under :

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along withproper explanations relating to material departures;

(ii) that the Directors had selected appropriate accounting policies and applied them consistently, and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the financial year 2007-08 and of the profit of the Company for that period;

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2008 on a ‘going concern’ basis.

PARTICULARS OF EMPLOYEES :Particulars of employees as required to be furnished pursuant to Section 217 (2A) of the Companies Act, 1956, readwith the rules thereunder, form part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of theCompanies Act, 1956, the reports and accounts are being sent to all the shareholders of the Company excluding thestatement of particulars of employees. Any shareholder interested in obtaining a copy may write to the CompanySecretary of the Company.

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ENERGY, TECHNOLOGY & FOREIGN EXCHANGE :Information required under Section 217(1)(e) read with Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 is given in the Annexure forming part of this Report.

FIXED DEPOSITS :The Company has not accepted any deposits from the public during the year under review.

AUDITORS :The Auditors M/s. P.D. Kunte & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and areeligible for re-appointment.

ACKNOWLEDGEMENT :Your directors place on record their gratitude for the valued support and assistance extended to the Company by theShareholders, Banks, Financial Institutions and Government Authorities and look forward to their continued support. Yourdirectors also express their appreciation for the dedicated and sincere services rendered by employees of the Company.

For and on behalf of the Board of Directors

Place : Indore KAILASH SHAHRADate : 30th August, 2008 Chairman

ANNEXURE

Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in theReport of Board of Directors) Rules 1988, and forming part of the Directors’ Report.

I. CONSERVATION OF ENERGY :

The Company has been laying emphasis on the conservation of energy and taking several measures like effectivecontrol on utilisation of energy and regular monitoring of its consumption etc. The adoption of these measures toconserve energy have resulted in saving of the same.

(A) Power and Fuel Consumption

1. Electricity : 2007-08 2006-07

(a) Purchase

Unit 13,73,45,170.00 12,91,27,865.58Total Amount (in Rs.) 62,02,27,805.52 59,54,13,245.29Rate / Unit 4.52 4.61

(b) Own generationThrough Diesel GeneratorUnit (KWH) 56,25,727.24 36,20,564.00Units per litre of Diesel Oil 2.29 3.19Cost/Unit (Rs.) 13.22 9.80

2. Coal :Quantity (Metric ton) 2,66,151.60 2,06,636.43Total Cost (Rs.) 82,15,27,428.83 58,23,15,904.82Average Rate (Rs.) 3,086.69 2,818.07

3. Others (Diesel/SKO) :Qty. (Litre) 24,55,991.06 38,82,183.01Total Amount (Rs.) 7,43,56,794.40 11,80,32,836.55Average Rate (Rs.) 30.28 30.40

(B) Consumption per unit of production :Electricity (Unit) 45.03 49.73Coal (Metric ton) 0.08 0.08Diesel (Litre) 0.77 1.45

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II. TECHNOLOGY ABSORPTION:

(A) Research & Development (R&D):

1. Specific areas in which R&D carried out by the company:

The Company has carried out R&D work for developing new products and for improvement in the quality ofthe existing products of the company.

2. Benefits derived as a result of R&D

The continuous improvement in the process to manufacture different products has helped the Company tomarket the quality products and expand its market. The products have gained consumer affinity.

3. Future plan of action:

The Company will continue to pursue R&D work for textured soya protein, soya snack and to develop newproducts.

4. Expenditure on R&D:

Expenditure incurred on research and development are charged under primary heads of accounts and notallocated separately.

(B) Technology absorption, adaptation & innovation:

1. Efforts in brief made towards technology absorption, adaptation and innovation:

The Company has through its R&D, developed the process of textured soya protein and soya snack which hasalready been absorbed and adapted.

2. Benefits derived as a result of the above efforts:

Product improvement, cost reduction and product development.

III. FOREIGN EXCHANGE EARNINGS & OUTGO:

The Company has already established an export market for its products and has been taking keen interest for developingnew export market for its products and to increase exports.During the year, the foreign exchange earned was Rs.1,846.43 crores (Previous year Rs. 1,406.48 crores) and theforeign exchange outgo was Rs.3,585.06 crores (Previous year Rs.2,305.15 crores).

For and on behalf of the Board of Directors

Place : Indore KAILASH SHAHRADate : 30th August, 2008 Chairman

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Management Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis ReportManagement Discussion and Analysis Report

INDUSTRY STRUCTURE & DEVELOPMENT

The primary business of your Company is Oil-Seed Extraction and Refining of Oil for Edible use. The Company also produces oilmeal, food products from soya and value added products from downstream processing of commodities. The size of Indian edibleoil seed industry is estimated around Rs. 85,000 crore (approx. USD 20 billion). The domestic edible oil consumption has beensteadily growing and is estimated to be over 12.5 million MT in the current year with Palm and soya oil, in which your Companyhas a dominant presence, contributing over 50%. In view of the demand- supply gap, about 35 to 40% of the domestic edible oilconsumption is met by imports, with Palm and Soya accounting for over 95% of the imported volume. The oil meal is essentiallyconsumed as poultry, fish and cattle feed, and a substantial part of soya meal is exported to the Asian region.

Commodity markets in general, and agricultural commodities in particular, have seen an unprecedented price rise during the lastfifteen months on account of various factors, including output constraints due to weather conditions and acceleration in consumption.The ever highest crude oil prices gave rise to demand for alternative and environmentally friendly bio-fuel, which caused diversionof arable land to produce products suitable for bio-fuel. The availability of land continued to be constrained, the aforesaiddiversion of land use caused rise in prices of these commodities globally.

The soya crop of 2007 of 9 million M.T. was the highest ever in India. The farming community reaped benefits of both, largerquantity and higher seed prices. The processing industry too enjoyed benefits on account of increased availability of soya seedsand improved plant capacity utilization.

The vast availability of land in the country (more particularly waste lands / forest lands) and the focus of the Government on, (i)improving rural income, (ii) providing greater development opportunities in rural areas, (iii) generation of employment for largerpopulation living in rural areas, (iv) meeting domestic energy security, (v) addressing issues arising from global warming, and (vi)laying out conducive Government policies for private sector investment in promoting non-edible oil-seeds such as Jatropha,would provide the right kind of fillip to the ongoing efforts to secure the domestic edible-oil and bio-fuel in future. There is anopportunity for large players having solvent extraction plants of scale that have strong relationship with farming community, toforge ahead and reap the benefits.

INDUSTRY OUTLOOK

The Indian edible oil sector is, by and large, a price conscious and price sensitive market, and a substantial part of consumption takesplace at the bottom end. The propensity to consume also changes with the changes in prices of edible oil and availability of disposableincome. With rising incomes, food remains an important item of expenditure to warrant large share of incremental spending. Edible oilis and will remain an important constituent of dietary plan despite varied eating habits and varied methods of cooking across thecountry. Also, the growth of edible oil in packed form has far exceeded the industry wide growth rate. In the foreseeable future, it isbelieved that the overall quantum of edible oil consumption will continue to grow in the packed segment with the pattern of consumptionshifting from bulk to packed form due to factors, amongst others, rising incomes coupled with changes in household demographics,improving health consciousness, growing organized retail improving reach of the products across the country.

Demand for protein rich meal in Asia is growing multi-fold in recent past. India is better placed in the Asian region from the pointof logistics and customer servicing. Also, the Indian soya meal being processed from Non Genetically Modified soya seed, givesa fair price advantage to the products in the international markets.

Buoyed with the gains reaped in the recent past by the farming community, and prevailing high average prices of soya-seed andproducts derived therefrom, the thrust on increasing the acreage under soya continues. The soya crop size for the current year isexpected to be higher than the highest ever crop recorded in the previous season. The current indications augur well for thesolvent extraction industry in the current year from crop availability standpoint.

The whole edible oil industry is in consolidation phase. Enterprises having strong business capabilities, efficiencies in logistics,operations at strategic locations and strong consumer focus that have undertaken expansion of their market share through organicand inorganic route coupled with introduction of new and innovative products – including presence through branded products,will enjoy the gains.

BUSINESS STRATEGY

To meet the challenges amidst growing industry size and the need to consolidate, your Company has initiated several measureson proactive basis, which will allow your Company to build-on its current presence and market share in the edible oil and soyasegment. Your Company will thus also be poised to undertake the business opportunities arising from leadership position in theindustry. Your Company is making inroads at new locations within the country which are otherwise strategic to industry and itsfocus on driving cost efficiencies by use of latest and modern technology confirming to global standards will provide an edge toitself and its business partners and place it at a better pedestal as compared to its peers. Your Company will continue to strengthenitself in areas of sourcing raw materials from points of origin, reducing inefficiencies in supply chain and logistics, capabilities toprocess at multiple locations, improvements in product quality, and increased sales of branded products in retail stores.

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The consumption of edible oils from sources other than soya seed, such as Mustard, Cotton seed and Rice bran has been growing.Your Company sees opportunity to broad base its presence in the domestic market for Mustard oil, and options to acquire existingcapacities and / or expand its own capacity are being explored. Your Company proposes to leverage its existing distributionnetwork and also expand the same in new areas to offer value added products so as to achieve margin improvement and make itsproducts reach the very discerning.

Your Company also sees an opportunity to achieve backward integration of its business in overseas markets and thus give a fillipto the momentum. The direct benefit of the above endeavors, besides strengthening the existing attributes of its business in thedomestic market, will be to de-risk the operations from geographical and product risks, and adds long-term sustainable value tothe business of your Company.

The food division of your Company is evaluating opportunities to expand its product portfolio and will be introducing variousnew products for the health conscious under the ‘Nutrela’ brand, which not only connotes health and nutrition but it has alreadycarved a niche for itself as a market leader in soya foods. The recent launch of a protein fortified drink “N’rich” by your Companyhas met with an encouraging response and new products are proposed to be rolled out with focus on the growing “health andwellness” segment. Your Company may extend its available suite of brands by acquiring the same for reasons, amongst others,including better brand / product positioning, strategic fit with existing brands, value enhancement, etc.

Your Company is strengthening the existing internal business processes, more particularly in the areas of Marketing, Informationtechnology, Human resource systems and Risk management, and is thus gearing-up to meet the challenges ahead.

Your Company is of the view that strategic initiatives in the above described areas will prove beneficial for the Company and thestakeholders in the long term.

INFORMATION TECHNOLOGY

SAP has been implemented in a phased manner covering nine crushing and six refining capacities and more than two hundreddepots across the country, enabling better supply chain and debtors control at operational level. Among other benefits, SAP willprovide real-time data, support in strategy formulations, lead to adoption of uniform and transparent business practices, rendercost optimization and value enhancement.

HUMAN RESOURCES

Management is keen on following the best practices for enhancing human resource capital of the Company. Campus selectionprocess, internal transfers, job rotations and trainings have been inculcated at different levels of organization hierarchy to evolveteam leaders and managers. The Company has also rolled out the employee stock option scheme for seniors and middle levelmanagement. The above-mentioned measures will ensure motivated workforce, promote the ownership and sharing economicgrowth of the Company.

RISKS AND CONCERNS

Your Company is exposed to price fluctuations in its major raw materials and finished goods as bulk of them being agro-basedis subject to market price variations.

Prices of these commodities continue to be linked to both domestic and international prices, which in turn are dependent onvarious domestic / external factors. Prices of the finished products manufactured by your Company fluctuate widely due to a hostof local and international factors. Your Company continues to place a strong emphasis on risk management and has successfullyintroduced and adopted various measures and instruments for hedging the price fluctuations in order to minimize its impact onprofitability. Also, your Company has initiated setting-up of a governance framework to upgrade itself to a robust risk managementsystem.

Government policies play an important role in the businesses of your Company.

The policies announced by the Government have been progressive and are expected to remain likewise in future, and havegenerally taken an equitable view towards various stake holders, including domestic farmers, industry, consumers, etc.

Ocean freight, port congestions, storage infrastructure could contribute to challenges faced by your Company.

As substantial part of the international operations of your Company is within the Asian region, and given the growing import andexport activities of your Company, the element of freight is not likely to cause any adverse effect on the operational performance.Your Company has a proactive information and management system to address the issues arising out of port congestions to themaximum extent possible, and has also made sufficient arrangements for storage infrastructure at the ports.

Domestic availability of oil seeds also depends upon weather and monsoon conditions.

Your Company has processing facilities at major ports and several inland locations, and therefore, the business model of yourCompany is designed to carry-on a majority of its production operations in situations of extreme changes in weather conditions.

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Your Company is exposed to risks arising out of changes in rates of foreign currencies, and the exposures on this accountextends to, products imported for sale in domestic markets, exported to other territories, and foreign currency loans.

Your Company utilizes the hedging instruments available in the markets on an ongoing basis and manages the currency exposuresproactively.

Fuel prices continue to be an area of concern as fuel is widely used in manufacturing and distribution operations and has adirect impact on total costs.

Your Company has taken productivity linked measures aimed at controlling costs and taken further steps to focus on productionof high margin products.

Adverse changes in disposable income may impact consumption pattern.

Your Company has multi processing capabilities to cater to the variances and changing consumer preferences. Also, keeping inview the overall growth of the economy, emerging health consciousness and growing organized retail in India, it is expected thatthe packaged edible oil consumption will continue to outgrow the overall edible oil growth.

RISK MANAGEMENT INITIATIVES

With the increasing volatility in global commodity prices, it has become important for pre-dominantly commodity companies toput in place a robust risk management framework to address financial risks. Your Company recognizes the importance of riskmanagement and has accordingly embarked on a journey to align its risk management practices with global leading practices.Accordingly, organizing the risk management practices within a robust framework has been a key initiative for the current financialyear.

As part of the aforesaid initiative, your Company has put in place a governance framework comprising of a risk managementcommittee. The Committee shall constitute persons from business and risk functions to bring about an equitable balance betweenrisk and reward. Your Company has also embarked on a conscious effort to measure risk-weighted performance, and is alsoplanning to centralize all activities of its management positions to aid in effective management of commodity price risk, forex riskand counter-party risk. Costs resulting from freight and other consumables are also to be managed and controlled centrally. Limitsbased on value at risk shall be put in place to support effective position management.

To stay up-to-date with latest market practices, your Company will upgrade its dealing infrastructure through implementation ofan ERP system and a commodity price risk management system to facilitate improved operational controls, and provide managementwith pre-emptive triggers to manage risk. As a part of the above exercise, your Company is also upgrading its risk policies,reporting framework and operating procedures. The benefits of a robust risk management framework are likely to be reaped byyour Company, more particularly in volatile markets, as enterprises with effective risk management practices and processes willbe better placed to achieve margin protection and improvements, and enhancement of shareholder value.

FINANCIAL REVIEW AND ANALYSIS

(Rs.in crores)

Highlights 2007-08 2006-07 Growth (%)

Sales and other income 11,075.01 8,648.29 28.06

Total Expenditure 10,644.53 8,350.14 27.48

Operating profit (PBDIT) 430.48 298.15 44.38

Depreciation 74.73 65.61 13.90

Interest 102.01 76.10 34.05

Profit before tax 253.74 156.44 62.19

Provision for Tax 64.51 39.65 62.70

Profit before Deferred Tax 189.23 116.80 62.01

Deferred Tax 30.00 16.10 86.34

Profit after Tax 159.23 100.70 58.12

REVENUE

Sales and other income recorded a growth of 28.06% to 11,075.01 crores as compared to Rs.8,648.29 crores in 2006-07. Sales of edible oilssurged by 19.89% to Rs.7,378.53 crores from Rs.6,154.33 crores in the previous year.

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OPERATING PROFIT

In view of the higher capacity utilization of production facilities, increased volumes of branded sales, better sales realization, benefits onaccount of economies of scale etc. the operating profit (PBDIT) has grown by 44.38% to Rs.430.48 crores as compared to Rs.298.15 croresin the previous year.

NET PROFIT

Despite intense competition, higher provision for interest and depreciation and other relevant factors, profit after tax grew by 58.12% toRs.159.23 crores as compared to Rs.100.70 crores in the previous year.

SEGMENT PERFORMANCE

The various segments identified by the Company are as under :

Extractions — All types of Seed extractions, Textured soya protein, Soya flour

Vanaspati & Specified Fat — Vanaspati

Oils — Crude oils, Refined oils

Others — Gram, Wheat, Rice, Maize, Shorgum, Seeds, Coffee, Marine Products, Tuar and Soaps.

The segmentwise performance in detail is given in Schedule 20 to the audited accounts of the Company as available in this Annual Report.

CAUTIONARY STATEMENT

Statements in the “Management Discussion and Analysis” describing the Company’s objectives, expectation or predictions may be forwardlooking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statementdepending on circumstances. Important factors that could influence the Company’s operations include demand and supply conditions inthe market which affect the selling prices of finished goods, input availability and prices, change in government regulations, tax rates, globaland internal economic developments and other factors such as litigation and industrial relations.

Ten years’ Financial Highlights – at a Glance

(Rs.in crores)

2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 1998-99

Sales 11,075.01 8,648.29 7,540.42 3,922.06 3,534.93 3,407.44 2,839.07 2,594.02 1,922.12 1,724.21

EBITDA 430.48 298.15 233.76 107.25 94.94 75.48 70.98 63.25 53.58 51.55

PBT 253.74 156.44 119.64 63.42 55.01 36.11 33.91 28.84 21.32 19.74

PAT 159.23 100.70 82.82 43.59 34.16 27.01 27.33 26.13 19.82 17.74

Equity share capital 37.76 36.47 36.47 21.05 21.05 21.05 19.15 19.15 15.05 14.19

Preference share capital 45.24 45.24 45.24 45.24 30.19 — 5.00 19.50 24.00 24.00

Net worth 1061 843 754 310 272 242 209 207 169 153

Total Borrowings 1187.33 962.06 738.82 413.89 352.78 190.36 130.23 114.22 113.41 94.99

Gross Fixed Assets 1502.43 1307.82 1188.96 525.47 402.17 283.08 215.49 171.57 169.85 159.08

Export turnover 1371.93 887.30 919.53 429.93 179.46 204.15 216.86 293.12 189.85 135.59

Debit-Equity Ratio 1.12 1.14 0.98 1.34 1.29 0.79 0.62 0.55 0.67 0.62

Key Indicators (in Rs.)

Per Equity Share :

— Book value 56.21 231.07 206.75 147.16 129.47 115.12 109.28 108.12 112.60 107.70

— Earnings 8.61 27.02 28.80* 20.05 16.23 13.78* 13.07 14.35* 11.48* 10.34

— Dividend 0.50 2.40 2.20 2.00 1.60 1.60 1.60 1.50 1.40 1.40

— Turnover 584 2365 2067 1863 1679 1619 1483 1355 1277 1215

Notes : 1) Net worth as at 31.3.2002 is net of deferred tax liability for the period upto 31.3.2001 charged during the year 2001-02.2) Total borrowings are net of borrowings backed by fixed deposits with banks.3) The Company has sub-divided each equity share of Rs. 10/- into five equity shares of Rs. 2/- each during the year 2007-08. Therefore,

the key indicators as mentioned above for the year 2007-08 are not comparable with those of earlier years.4) * Earning per share has been computed on weighted average number of equity shares outstanding at the end of the year.5) Previous years’ figures have been regrouped, wherever necessary.

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Corporate Governance - The Philosophy

In order to ensure sustainable returns to all stakeholders of the business, it is imperative to adopt and follow certain policies,procedures and processes which together constitute "Code of corporate governance". It is important that such a code isinstitutionalised to ensure transparency, consistency and uniformity of decision making processes and actions. Ruchi SoyaIndustries Limited (RSIL) has always believed in such a sound code of corporate governance. In RSIL, the Board of Directors,Committees of the Board, the Managing Director and the team of senior executives exert the adherence of Corporate Governancein its widest sense and are committed to follow good corporate governance practices.

BOARD OF DIRECTORS

Composition

Board of Directors of RSIL comprises of seven directors. Mr. Kailash Shahra, Chairman, is non-executive director andMr. Dinesh Shahra is the Managing Director of the Company. Both of them are the promoter directors of the Company.Mr. P.D. Nagar, Mr. Sajeve Deora and Mr. Prabhu Dayal Dwivedi are non-executive and independent directors. Mr. A.B. Rao,Director (Legal) and Mr. S.P. Joshi, Director (Import and Export) are executive directors. Except the Managing Director, all thedirectors are liable to retire by rotation. There is no institutional or nominee or government director on the Board.Mr. Ramesh Mishra, a non-executive and independent director resigned from the Board with effect from 30th April, 2007 dueto his pre-occupations. Mr. P.S. Santhanakrishnan, a non-executive and independent director resigned from the Board due tohis advanced age and health concerns with effect from 31 March, 2008. Mr. Prabhu Dayal Dwivedi was appointed as anAdditional Director with effect from 31st March, 2008.

Mr. P.D. Nagar and Mr. Sajeve Deora retire by rotation in terms of provisions of Section 256 of the Companies Act, 1956.

Mr. P.D. Nagar, being eligible, offers himself for re-appointment. He was born on 2nd February, 1945 and is B.Com., L.L.B. andFCA. He was appointed as a Director on 7th January, 1986 and is non-executive and independent director of the Company.He is a practising Chartered Accountant having expertise in direct and indirect tax matters. He has been actively participatingin strategic planning of the Company. He is also on the Board of Directors of following public limited companies:

Anik Industries Limited

National Steel & Agro Industries Limited

Rajratan Global Wires Limited

Rajratan Thai Wires Limited

He is the Chairman of Audit Committee and Investors' Grievance Committee of Board of Directors of Anik Industries Limited.He is also the member of Audit Committee and Investors' Grievance Committee of the Board of Directors of Rajratan GlobalWires Limited.

Mr. Sajeve Deora, being eligible, offers himself for re-appointment. He was born on 27th December, 1949 and is B. Com. andFCA. He was appointed as a Director on 27th December, 2005. He is a practising Chartered Accountant having expertise inFinancial re-constructions, acquisitions, mergers and corporate re-structuring. He is on the Board of Directors of followingpublic limited companies :

Bholanath International Limited

Vippy Industries Limited

Jai Mata Glass Limited

Jyoti Overseas Limited

He is the chairman of Audit Committees of Board of Directors of the above mentioned companies.

Board Procedures

The Board met 12 times during the financial year 2007-08. The dates of board meetings are 30th April, 2007, 14th June, 2007,30th July, 2007, 30th August, 2007, 31st August, 2007, 29th September, 2007, 13th October, 2007, 31st October, 2007,3rd November, 2007, 24th December, 2007, 24th January, 2008 and 31st March, 2008.

Corporate Governance ReportCorporate Governance ReportCorporate Governance ReportCorporate Governance ReportCorporate Governance Report

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Attendance record of directors

Name of directors Category Board Whether No. of other No. of othermeetings attended Boards in committeesattended last which he is in which he

AGM member or is member or(Chairman) (Chairman)

Mr. Kailash Shahra Promoter(Non-executive) 7 No 5 (5) 3 (1)

Mr. Dinesh Shahra Promoter(Executive) 11 Yes 5 (0) 1 (0)

Mr. P.D. Nagar Independent(Non-executive) 4 No 4(0) 4 (2)

*Mr. P.S. Santhanakrishnan Independent(Non-executive) 1 Yes 2 (0) 1 (0)

Mr. A. B. Rao Executive 10 No 1 (0) 0 (0)

Mr. S.P. Joshi Executive 7 Yes 1 (0) 0 (0)

Mr. Sajeve Deora Independent(Non-executive) 5 Yes 4 (0) 4 (4)

*Mr. Ramesh Mishra Independent(Non-executive) — — — —

*Mr. Prabhu Dayal Dwivedi Independent(Non-executive) 1 — 0 (0) 0 (0)

* Mr. Ramesh Mishra resigned with effect from 30th April, 2007.

* Mr. P. S. Santhanakrishnan, resigned with effect from 31st March, 2008.

* Mr. Prabhu Dayal Dwivedi was appointed with effect from 31st March, 2008.

Private limited and Section 25 companies, if any where the directors of the Company are directors, have been excluded for theabove purpose. Further, as per the listing agreement, chairman/membership of audit committees and shareholders’ grievancecommittees are considered for the purpose of committee positions.

Code of Conduct

The Board of Directors has an important role in ensuring good corporate governance and has laid down the Code of Conduct forDirectors and Senior Management of the Company. The Code has also been posted on the website of the Company. All Directorsand Senior Management personnel have affirmed the compliance thereof for the year ended 31st March, 2008. Annual Reportcontains a declaration to this effect signed by the Managing Director, as provided in clause 49 of the Listing Agreement.

AUDIT COMMITTEE

The objective of the Audit Committee is to keep a vigil and oversight on the Management’s financial reporting process with aview to ensure timely and transparent disclosure in the financial statements.

The terms of reference of the Committee are extensive and include all the requirements as mandated in clause 49 of theStandard Listing Agreement read with Section 292A of the Companies Act, 1956. The role of the Committee includes overseeingand monitoring the financial reporting system within the Company and considering un-audited and audited financial results, asmay be applicable, for the relevant quarters and year before being adopted by the Board. The Committee also focused itsattention on topics such as review of internal audit reports, legal compliance reporting system, presentation of segment-wisereporting, review of internal control systems, major accounting policies and practices, compliance with accounting standardsand risk management. The Committee also continued to advice the management on areas where greater internal audit focuswas needed and on new areas to be taken up for audit purpose. The Company Secretary acts as the secretary to the Committee.The Committee meetings were also attended by finance executives and Statutory Auditors of the Company.

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Constitution and composition

The Audit Committee consists of Mr. Sajeve Deora, Mr. Prabhu Dayal Dwivedi and Mr. A.B. Rao. Mr. Sajeve Deora, theChairman of the Committee is an independent, non-executive director and has a strong financial and accounting background.

During the year, Mr. P.S. Santhanakrishnan vacated his office as member of Audit Committee due to resignation from the Boardof Directors of the Company.

Meeting and attendance and terms of reference :

During the financial year 2007-08, the Audit Committee met on 30th April, 2007, 30th July, 2007, 30th August, 2007,31st August, 2007, 31st October, 2007 and 24th January, 2008. The meetings were scheduled in advance. Mr. Sajeve Deora andMr. A.B. Rao attended all the meetings. Mr. Prabhu Dayal Dwivedi was appointed on 31st March, 2008.

COMPENSATION COMMITTEE

The objective of compensation committee is to determine remuneration package for executive directors and senior employeesof the company and to monitor the due compliance of remuneration policies of the company in a transparent manner.

Constitution and composition

The Compensation Committee is chaired by Mr. Sajeve Deora and comprises of following other directors : Mr. Prabhu DayalDwivedi, Mr. Dinesh Shahra, Mr. Kailash Shahra and Mr. P. D. Nagar. The Chairman of the Committee is an independent,non-executive director and has a strong financial and accounting background.

During the year, Mr. P.S. Santhanakrishnan vacated his office as member of compensation committee due to resignation fromthe Board of Directors of the Company.

Meeting and attendance and terms of reference

During the financial year 2007-08, the Compensation Committee met on 3rd November, 2007 and 28th November, 2007.Mr. Kailash Shahra and Mr. Dinesh Shahra attended both the meetings. Mr. P. D. Nagar and Mr. Sajeve Deora attended one meetingeach.

REMUNERATION OF DIRECTORS

Remuneration of the Managing Director :

During the financial year 2007-08, the particulars of remuneration paid to Shri Dinesh Shahra, Managing Director is as under:

Salary : Rs. 91,40,323

Perquisites in cash or kind : Rs. 28,28,865

Remuneration of the whole-time directors :

During the financial year 2007-08, the following remuneration was paid to the whole-time directors :

Mr. A.B. Rao : Salary, allowances and perquisites : Rs. 14,31,099

Mr. S.P. Joshi : Salary, allowances and perquisites : Rs. 8,98,747

Remuneration of non-executive directors :

As approved by the Board of Directors and in accordance with the Articles of Association of the Company, the non-executivedirectors were paid a sitting fee of Rs. 2000/- for every meeting of the board or committee thereof attended by them during thefinancial year 2007-08. Commission of Rs.50,00,000/- is payable to the Chairman for the financial year 2007-08. During theyear, commission of Rs.19,61,946/- for the financial year 2006-07 was paid to him.

The following table shows the amount of sitting fee paid to the non-executive directors for the financial year 2007-08 and theirshareholding as on 31st March, 2008 :

Sr. No. Name of Directors Sitting fees (Rs.) No. & percentage of shares heldas on 31st March, 2008

1. Mr. Kailash Shahra 28,000 1,98,500 (0.11%)

2. Mr. P.S. Santhanakrishnan 2,000 5,500 (0.00%)

3. Mr. P.D. Nagar 10,000 500 (0.00%)

4. Mr. Sajeve Deora 24,000 —

5. Mr. Prabhu Dayal Dwivedi 2,000 —

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MANAGEMENT

Management discussion and analysis

This is given as a separate chapter in this annual report.

Disclosures

A. Transactions with related parties.

The Company has not entered into any transaction of material nature with related parties that may have any potential conflictwith the interest of the Company.

B. Compliance by the Company

The Company has complied with the requirement of the stock Exchange, SEBI and other statutory authorities on matters relatedto capital markets during last three years. No penalties have been imposed on the Company or strictures passed by anyStock Exchange or SEBI or any other authorities relating to capital markets.

SHAREHOLDERS

Communication to shareholders

Quarterly un-audited financial statements prepared in accordance with the Accounting Standards laid down by the Institute ofChartered Accountants of India are generally published in Business Standard, Free Press Journal, Sakal (Mumbai) and NavShakti. Beside this, RSIL has its own website (www.ruchisoya.com) on which important public domain information is posted.Besides being placed on the website, all the financial, vital and price sensitive official news releases are also properlycommunicated to the concerned stock exchanges. The website also contains information on several other matters, such asNetworth history, Turnover and Net profit for preceding years etc.

INVESTORS’ GRIEVANCE COMMITTEE

The Committee has the mandate to look into shareholders’ and investors’ complaints on matters relating to transfer of shares,non-receipt of annual report, non-receipt of dividend etc. In addition, the Committee also looks into matters which can facilitatebetter investor service and relations. Investors’ Grievance Committee of the directors comprises Mr. Kailash Shahra (Chairman),Mr. A.B. Rao and Mr. S.P. Joshi.

During the period under review, 6 meetings of the Committee were held. The Committee met on 17th May, 2007,24th July, 2007, 10th October, 2007, 12th December, 2007, 21st January, 2008 and 28th March, 2008 to review the status ofinvestors service rendered. Mr. Kailash Shahra, Chairman, Mr. A. B. Rao and Mr. S.P. Joshi attended five, three and fourmeetings respectively. Mr. R.L. Gupta, Company Secretary, also attended the meetings. He has been appointed as the ComplianceOfficer in accordance with listing agreements for compliances and investors' services.

During the financial year 2007-08, the Company received 63 complaints for non receipt of shares, 19 complaints for nonreceipt of annual reports, 40 complaints for non-receipt of dividend, 3 complaints related to demat of shares and 9 othercomplaints. As on 31st March, 2008, 10 complaints were pending, which were duly resolved and addressed to the satisfactionof the shareholders in due course. However, no complaint was pending for more than 30 days on 31st March, 2008.

INFORMATION ON GENERAL BODY MEETINGS

Annual General Meetings

The last three Annual General Meetings (AGMs) of the Company were held at Sunville Deluxe Pavilion, Sunville Building, 9,Dr. Annie Besant Road, Worli, Mumbai-400 018. The dates and times of holding of the said AGMs and particulars of Specialresolutions passed thereat are as under:

19th AGM 29th September, 2005 at 10.30 A.M. — Further issue of securities.

— Amendment in Articles of Association for change in Capital Clause.

— Increase in limit of investment by FIIs.

20th AGM 28th December, 2006 at 10.45 A.M. — Amendment in Articles of Association.

— Increase in remuneration under Section314

— Payment of remuneration by way of commission

— Further issue of shares

21st AGM 29th September, 2007 at 3.00 P.M. — Revision of commission payable to Director

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Extra-ordinary General Meeting

During the year under review, an Extra-ordinary General Meeting of the Company was held at Indian Textile Accessories andMachinery Manufactures’ Association, 2nd Floor, Bhogilal Hargovindas Building, 18/20, K. Dubash Marg, Kala Ghoda,Mumbai-400 001 on 28th November, 2007 at 10.30 a.m. Particulars of Special resolutions passed thereat are as under :

— Issue of warrants on preferential basis

— Issue of options to employees/directors of the Company under Employee Stock Option Scheme - 2007

— Issue of options to employees/directors of Subsidiary Company under Employee Stock Option Scheme - 2007

POSTAL BALLOT

During the year ended March 31, 2008, approval of shareholders was obtained through the means of postal ballot for amendmentin the Object clause (Resolution No. 1) and commencement of new business (Resolution No. 2). The postal ballot process wasconducted, as provided under the provisions mentioned under section 192A of the Companies (Amendment) Act, 2000.Mr. Prashant D. Diwan, a Company Secretary in whole-time practice was appointed as scrutinizer to conduct the postal ballotvoting process. The results of postal ballot were declared on 10th December, 2007 and were also posted on the website of theCompany. Both the resolutions were passed as special resolution. Voting pattern of postal ballot forms for the two resolutionswas as under:

Sl. Particulars No. of Postal Ballot No. of Shares voted % of Total VotesNo. Forms received

Resolution 1 Resolution 2 Resolution 1 Resolution 2 Resolution 1 Resolution 2

1. Forms with assent 212 196 4722804 4720913 96.61 96.61

2. Forms with dissent 6 5 520 250 0.01 0.01

3. Invalid Forms (rejected ) 20 20 165005 165005 3.38 3.38

Total 238 221 4888329 4886168 100 100

GENERAL SHAREHOLDERS INFORMATION

Annual General Meeting : Date : 30th September, 2008

Time : 10.30 a.m.

Venue : Sunville Deluxe Pavilion, Sunville Building,9, Dr. Annie Besant Road, worli,Mumbai-400018.

FINANCIAL CALENDAR

Adoption of Quarterly Results of the quarter ended 3rd/4th week of

— June 30, 2008 July, 2008

— September 30, 2008 October, 2008

— December 31, 2008 January, 2009

— March 31, 2009 April, 2009

Book Closure Dates — Monday, the 22nd September, 2008 to Friday, the 26th September, 2008 (both days inclusive)

Dividend Payment Date — On or before 28th October, 2008

LISTING ON STOCK EXCHANGES AND STOCK CODES

The Equity Shares of the Company are listed on the following Stock Exchanges :

Stock Exchange Stock code

a) Bombay Stock Exchange Limited (BSE) 500368

b) National Stock Exchange of India Limited (NSE) RUCHISOYA

c) Delhi Stock Exchange Association Limited (DSE) —

The ISIN of the Company is INE619A01027.

During the year, the GDRs of the Company have got de-listed from Luxembourg Stock Exchange, since all the GDRs wereconverted into equity shares of the Company.

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Market Price Data (Rs.)

The monthly high and low quotations and volume traded at the Bombay Stock Exchange Limited (BSE) during the financial year2007-08 are as follows :

Period High (Rs.) Low (Rs.)

April, 2007 383.65 305.25

May, 2007 433.50 331.40

June, 2007 415.00 365.00

July, 2007 457.00 375.00

August, 2007 460.00 370.00

September, 2007 395.00 349.00

October, 2007 418.00 79.00

November, 2007 132.00 95.00

December, 2007 157.55 102.90

January, 2008 165.25 111.75

February, 2008 121.00 96.05

March, 2008 118.40 73.10

Note : During the year, each equity share of Rs. 10/- was sub-divided into five equity shares of Rs. 2/- each, the record date forwhich was 3rd November, 2007.

Registrars and Transfer Agent

Sarthak Global Limited, 170/10, Film Colony, R. N. T. Marg, Indore-452 001.

SHARE TRANSFER SYSTEM

Shares lodged in physical form with the Company/its Registrars & Share Transfer Agent are processed and generally returned,duly transferred within 30 days, except in case where litigation is involved.

In respect of shares held in dematerialized mode, the transfer takes place instantaneously between the transferor and transfereeat the depository participant(s) through which electronic debit/credit of the accounts are involved.

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Shareholding pattern and Distribution of Shareholding

Shareholding pattern as on 31.03.2008

Category No. of shares held % of holding

A Promoter holding1 Promoters

Indian Promoters 7,09,21,683 37.57

Foreign Promoters — —

2 Persons acting in concert — —

Sub-total 7,09,21,683 37.57

B Non-Promoters Holding1 Institutions

a MFs/ UTI 1,17,34,706 6.21

b Banks/ FIs/Insurance Companies 1,83,071 0.10(Central/State Govt. Institutions/Non-Govt. Institutions)

c FIIs 4,99,73,383 26.47

Sub-total 6,18,91,160 32.78

2 Non Institutions

a Bodies Corporate 3,96,06,861 20.98

b Individuals holding nominal capital upto Rs. 1.00 lac 1,35,95,206 7.20

c Individuals holding nominal capital more than Rs. 1.00 lac 25,86,582 1.37

d Any other (Clearing Members and Trust) 1,88,568 0.10

Sub-total 5,59,77,217 29.65

C Custodian (depository for shares underlying GDRs) — —

GRAND TOTAL 18,87,90,060 100.00

Distribution of shareholding as on 31.03.2008

Range of Shares No. of Shareholders % of Shareholders No. of Share held % of Shareholding

001 — 2500 22,778 95.43 92,62,832 4.91

2501 — 5000 574 2.41 21,35,950 1.13

5001 — 10000 225 0.94 16,79,599 0.89

10001 — 15000 65 0.27 8,16,418 0.43

15001 — 20000 35 0.15 6,50,162 0.34

20001 — 25000 22 0.09 5,02,253 0.27

25001 — 50000 37 0.16 13,85,516 0.73

Over 50000 131 0.55 17,23,57,330 91.30

TOTAL 23,867 100 18,87,90,060 100

Dematerialisation of shares and liquidity

The trading in shares of the Company are under compulsory demat segment. The Company is listed on BSE, NSE and DSE.The Company’s shares are available for trading in the depository systems of both NSDL and CDSL. As on 31st March, 2008,13,81,10,955 equity shares of the Company were in dematerialized form.

Outstanding Convertible Instruments

The Company had allotted 3,53,25,000 warrants on 24th December, 2007, each convertible into one equity share ofRs. 2/-. On 31st March, 2008, 2,89,25,000 warrants were outstanding for conversion.

In March, 2006, the Company had issued 88,74,000 GDRs, each representing one under-lying Equity Share of Rs.10/- each,which were listed with Luxembourg Stock Exchange. On conversion of GDRs into equity shares, the same have been de-listedwith effect from 2nd June, 2008 from Luxembourg Stock Exchange.

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The Company has granted 12,37,000 options to the eligible directors and employees of the Company and its sbusidiary on1st April, 2008. All options vest over 3 years from 1st April, 2008 - 20% on 1st April, 2009, 30% on 1st April, 2010 and 50%on 1st April, 2011.

Plant locations of the Company

— Mangliagaon, A.B.Raod, Indore (M.P.)

— Baikampady Industrial Area, Mangalore (Karnataka)

— Village Esambe, Taluka Khalapur, Distt. Raigad (Maharashtra)

— Bijoyramchak, Ward No. 9, P.O. Durgachak, Haldia (West Bengal)

— Village Butibori, Tehsil Nagpur (Maharashtra)

— Akodia Road, Industrial Area, Shujalpur, Dist. Shajapur (M.P.)

— Village Dobhi, Distt. Mandla (M.P.)

— Village Kamati, Gadarwada, Distt. Narsinghpur (M.P.)

— Gram Mithi Rohar, Taluka Gandhidham, Distt. Bhuj (Gujarat)

— Kannigaiper Village, Uthukottai Taluk, Thiruvallur Distt. (Tamilnadu)

— RIICO Udyog Vihar, Sriganganagar (Rajasthan)

— RIICO Industrial Area, Govindpur Bawari, Post Talera Distt. Bundi (Rajasthan)

— Kusmoda, A.B. Road, Guna (M.P.)

— Kota Road, Baran (Rajasthan)

— Rani Piparia, Dist. Hoshangabad (M.P.)

— SIDCO Industrial Estate, Bari Brahmana, Jammu (J&K)

Address for communication

The shareholders may send their communications, queries, suggestions and grievances to the Compliance Officer at thefollowing address :

Mr. R.L. GuptaCompany Secretary408, Tulsiani Chambers, Nariman Point, Mumbai-400 021email address : rl_gupta@ruchigroup.com

The shareholders may also e-mail their queries, suggestions and grievances at ‘ruchisoyasecretarial@ruchigroup.com’

Certificates by Managing Director and Vice President (Corporate Accounts)

The Board of Directors has received certificates issued by the Managing Director and Vice President (Corporate Accounts) ofthe Company as envisaged under clause 49 (V) of the Listing Agreement.

Report on Corporate Governance

This chapter, read together with the information given in the chapter entitled as 'Management Discussion and Analysis' andShareholders Information, constitutes a detailed compliance report on corporate governance during 2007-08 in terms of clause49 of the Listing Agreement.

Auditor’s certificate on Corporate Governance

The Company has obtained the certificate from the Auditors of the Company regarding compliance with the provisions relatingto corporate governance laid down in clause 49 (VII) of the Listing Agreement with the Stock Exchange. This certificate will besent to Stock Exchanges, along with the annual report to be filed by the Company.

Declaration

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, we affirm that the Board Members and SeniorManagement personnel of the Company have confirmed compliance with the Code of Conduct of the Company for the yearended 31st March, 2008.

For Ruchi Soya Industries Limited

Place : Indore DINESH SHAHRADate : August 30, 2008 Managing Director

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CERTIFICATE

To the Members ofRUCHI SOYA INDUSTRIES LIMITED

We have examined the compliance of conditions of Corporate Governance by Ruchi Soya Industries Limited for the year ended31st March, 2008 as stipulated in Clause 49 of the Standard Listing Agreement of the said Company with Stock Exchanges.

The compliance of condition of Corporate Governance is the responsibility of the management. Our examination has beenlimited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance with theconditions of the certificate of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression ofopinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanation given to us and the representations made bythe Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance asstipulated in Clause 49 of the above mentioned Listing Agreement.

As informed to us, the records relating to investors grievances pending against the Company, if any, is maintained by theRegistrars of the Company, who have certified that as at 31st March, 2008, no grievances were unattended/pending for morethan 30 days.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For P.D. KUNTE & CO. (REGD.)Chartered Accountants

(D.P. SAPRE)Place : Indore PartnerDate : August 30, 2008 Membership No.40740

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Auditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ Report

TO THE MEMBERS OF RUCHI SOYA INDUSTRIES LIMITED

1. We have audited the attached Balance Sheet of Ruchi Soya Industries Limited as at 31st March, 2008 and the Profit andLoss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmis-statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates made bythe management, as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms ofSection 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) above:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessary for the purpose of our audit;

ii. in our opinion, proper books of account, as required by law, have been kept by the Company so far as appears fromour examination of those books and proper returns adequate for the purposes of our audit have been received frombranches not visited by us;

iii. the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreementwith the books of account;

iv. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow statement dealt with by this reportcomply with the Accounting Standards referred to in clause (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors and taken on record by the Board of Directors,we report that none of the directors is disqualified as on March 31, 2008 from being appointed as a director in termsof clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the accounts readtogether with the notes thereon, give the information required by the Companies Act, 1956 in the manner sorequired and give a true and fair view:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2008;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the Cash Flow statement, of the cash flows for the year ended on that date.

For P.D.KUNTE & CO. (REGD.)Chartered Accountants

(D. P. SAPRE)Place : Indore PartnerDate : 30th August, 2008 Membership No. 40740

37

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1. In respect of fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situationof its fixed assets. The updation of fixed assets register in respect of assets vested on amalgamation is in progress.

(b) According to the information and explanations given to us, physical verification of the fixed assets was carried outby the management during the year and no material discrepancies were noticed on comparison with book records.In our opinion, the frequency of verification is at reasonable intervals.

(c) There was no substantial disposal of fixed assets during the year.

2. In respect of its inventories:

(a) We have been informed that the inventories have been physically verified by the management during and /or at theyear-end except for stocks lying with third parties at the year-end, which have been substantially confirmed bythem. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given to us, in our opinion, the procedures of physical verificationof inventories followed by the management are reasonable and adequate in relation to the size of the Company andthe nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained properrecords of inventory. The discrepancies noticed on physical verification of stocks as compared to book records,which have been properly dealt with in the books of account, are in our opinion, not material.

3. (a) The Company has granted loans to 3 companies, firms or other parties covered in the register maintained underSection 301 of the Act. The aggregate amount outstanding from these parties as at 31st March, 2008 is Rs. 76.23 lacs.The maximum balance outstanding at any time during the year in respect of these loans was Rs. 374.22 lacs.

(b) Wherever interest has been stipulated, the rate of interest in respect of the aforesaid loans is prima facie notprejudicial to the interest of the Company. There are no other terms and conditions stipulated in respect of theseloans.

(c) In respect of these loans, there is no stipulation as to the repayment of principal amount and payment of interest.Hence, we have not commented on whether the repayment of principal amount and payment of interest areregular.

(d) There is no overdue amount in respect of the aforesaid loans.

(e) The Company has not taken any loans from companies, firms or other parties covered by Section 301 of theCompanies Act, 1956. As such clauses (e) to (g) of para 3(iii) are not applicable for the year under audit.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedurescommensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assetsand for the sale of goods and services. During the course of audit, no major weakness has been noticed in these internalcontrols.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by themanagement, the transactions that need to be entered into the register maintained under Section 301 of the Acthave been so entered.

(b) These transactions have been made at prices which are reasonable having regard to the prevailing market prices atthe relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted depositsfrom public to which the provisions of sections 58A and 58AA of the Act and Rules framed thereunder apply.

7. The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and thenature of its business.

8. We have broadly reviewed cost records in respect of manufacture of vanaspati, refined vegetable oil and power generationmade and maintained by the Company pursuant to the rules made by the Central Government for the maintenance ofcost records under Section 209(1)(d) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not, however, made a detailed examination of the records with a view

38

to determining whether they are accurate or complete. To the best of our knowledge and according to the informationgiven to us, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of theCompanies Act, 1956 for any other product of the Company.

9. In respect of statutory dues:

(a) The Company, barring certain instances of delay, is generally regular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, WealthTax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it. Except for amountsaggregating to Rs. 424.19 lacs there were no undisputed statutory dues outstanding as at 31st March, 2008 for aperiod of more than six months from the date they became payable.

(b) As at 31st March, 2008, following disputed statutory dues aggregating to Rs. 11,519.09 lacs have not been depositedon account of matters pending before the appropriate authorities :

Name of the statute Nature of dues Forum where Years to which Amountdispute is pending dispute relates disputed

(Rs. in lacs)

Central Sales Tax Act VAT / Sales Tax / High Court 2003-04/2004-05/2005-06 332.21and VAT / Sales Tax Entry TaxAct of various states Tribunal 1995-96/1999-00/2000-01/ 1,925.58including Entry Tax Act 2004-05

Joint Comm. 1997-98/2000-01/2002-03/ 2,434.45

(Appeal) 2004-05/2005-06/ 2007-08

DC (Appeals) 1994-95/2002-03/2004-05/ 946.482005-06/2006-07/ 2007-08

Commissioner 1998-99/2002-03/2003-04/ 2,216.30(Appeals) 2004-05

Assessment 2000-01/2001-02/2002-03/ 10.252003-04/ 2004-05

Central Excise Act. Excise duty High Court 2004-05 265.52

Tribunal 2001-02/2002-03/2003-04/ 1,148.592004-05/2005-06/2006-07

DC (Appeals) 2006-07/2007-08 83.88

Assessment 2006-07 27.01

Service Tax Act Service Tax Commissioner 2002-03/2004-05/2006-07/ 54.67(Appeals) 2007-08

Customs Act Customs Duty Supreme Court — 539.17

High Court — 714.39

Tribunal — 141.54

DC (Appeals) — 302.01

Assessing officer — 369.18

Others Octroi / Electricity High Court 2004-05/2005-06 7.86Duty/ Local Body Tax

39

10. The Company has no accumulated losses at the end of the financial year and the Company has not incurred any cashlosses in the current or in the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has not defaulted in repayment of dues tofinancial institutions, banks or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on thebasis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mututal benefit fund / society. Therefore, the provisions ofclause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities,debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report)Order, 2003 are not applicable to the Company.

15. In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others frombanks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans have been applied for the purpose for whichthey were raised.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of theCompany, we report that short-term funds have not been used for long-term investment.

18. The Company has made preferential allotment of 24,00,000 (Twenty four lacs) equity shares of Rs. 2/- each (on conversionof warrants) at a premium of Rs. 75.50 per share to a party covered by Section 301 of the Companies Act, 1956.According to the explanations given to us, in our opinion, the price at which the aforesaid shares are issued is notprejudicial to the interest of the Company.

19. According to the information and explanations given to us, the Company has created security in respect of debenturesissued.

20. The Company has not raised any money by way of public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, we report that nofraud on or by the Company has been noticed or reported during the course of our audit.

For P.D.KUNTE & CO. (REGD.)Chartered Accountants

(D. P. SAPRE)Place : Indore PartnerDate : 30th August, 2008 Membership No. 40740

40

Sch. 2007-08 2006-07No. (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

I SOURCES OF FUNDS1 Shareholders' Funds

a) Capital 1 10,541.78 8,171.47

b) Reserves & Surplus 2 1,00,120.67 80,667.61

110,662.45 88,839.08

2 Loan Funds

a) Secured Loans 3 69,851.07 64,244.32

b) Unsecured Loans 4 86,106.84 82,732.44

1,55,957.91 1,46,976.763 Deferred Tax Liability 10,178.15 7,180.00

2,76,798.51 2,42,995.84

II APPLICATION OF FUNDS

1 Fixed Assets 5

a) Gross Block 1,50,243.20 1,30,782.01

b) Less : Depreciation 32,419.57 24,998.31

c) Net Block 1,17,823.63 1,05,783.70

d) Capital Work in Progress 2,337.87 2,013.18

1,20,161.50 1,07,796.88

2 Investments 6 8,191.69 4,245.32

3 Current Assets, Loans & Advances

a) Inventories 7 2,13,822.80 95,787.03

b) Sundry Debtors 8 1,03,770.58 82,692.16

c) Cash & Bank 9 57,890.31 67,116.51

d) Other Current Assets 10 1,072.39 1,117.97

e) Loans & Advances 11 72,581.96 47,045.36

4,49,138.04 2,93,759.03

Less : Current Liabilities & Provisions

a) Current Liabilities 12 2,89,071.98 1,51,376.20

b) Provisions 13 11,642.82 11,453.67

3,00,714.80 1,62,829.87

Net Current Assets 1,48,423.24 1,30,929.16

4 Miscellaneous Expenditure 14 22.08 24.48

2,76,798.51 2,42,995.84

NOTES TO THE ACCOUNTS 20

Balance SheetBalance SheetBalance SheetBalance SheetBalance SheetAS AS AS AS AS AAAAAT 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

41

Sch. 2007-08 2006-07No. (Rs. in lacs) (Rs. in lacs)

INCOME

Sales and Other Income 15 11,07,501.00 8,64,828.60

Increase in stock 16 28,467.49 11,898.49

11,35,968.49 8,76,727.09

EXPENSES

Purchases 2,32,515.92 2,45,881.76

Materials Consumed 17 7,77,044.63 5,34,711.31

Expenses 18 83,359.95 66,319.27

Interest (Net) 19 10,200.85 7,609.53

Depreciation 5 7,472.99 6,560.97

11,10,594.34 8,61,082.84

Profit before taxation 25,374.15 15,644.25

Provision for taxation — Current tax 5,436.00 3,670.00

— Deferred tax 3,000.01 1,610.00

— Fringe benefit tax 175.00 125.00

Provision for tax for earlier years 840.39 169.74

Profit after taxation 15,922.75 10,069.51

Balance brought forward from previous year 17,029.87 10,740.09

Profit available for appropriation 32,952.62 20,809.60

APPROPRIATIONS

General Reserve 2,500.00 2,500.00

Debenture Redemption Reserve 18.20 43.75

Proposed Dividend — Preference 180.97 180.97

— Equity 943.95 875.47

Tax on Dividend 191.18 179.54

Balance carried to Balance Sheet 29,118.32 17,029.87

32,952.62 20,809.60

Earning per share of Rs.2/- each (Previous year Rs. 10/- each)in Rs. (See Note 30 of Schedule 20)

Basic 8.61 27.02

Diluted 8.23 22.24

NOTES TO THE ACCOUNTS 20

Profit & Loss AccountProfit & Loss AccountProfit & Loss AccountProfit & Loss AccountProfit & Loss AccountFOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

42

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008

2007-08 2006-07(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

SCHEDULE 1 : SHARE CAPITAL(See Note nos. 8 & 9 of Schedule 20)

Authorised27,50,00,000 Equity Shares of Rs.2/- each 5,500.00 5,500.00(Previous year 5,50,00,000 Equity Shares of Rs.10/- each)65,00,000 Cumulative Redeemable Preference Shares(Previous year 65,00,000 Preference Shares) of Rs.100/- each 6,500.00 6,500.00

12,000.00 12,000.00

Issued, Subscribed and Paid-upi) 18,87,90,060 Equity Shares of Rs.2/- each (Previous year

3,64,78,012 Equity Shares of Rs.10/- each) (See Note no. 1 below) 3,775.80 3,647.80Less : Calls unpaid — 0.62

3,775.80 3,647.18ii) 45,24,285 4% Cumulative Redeemable Preference

Shares of Rs. 100/- each (See Note no. 2 below) 4,524.29 4,524.29

iii) Warrant application money 2,241.69 —

10,541.78 8,171.47

Notes :1 During the year, the Company has sub-divided each equity share of Rs.10/- into 5 equity shares of Rs.2/- each.2 Out of 45,24,285 preference shares, 30,19,186 preference shares were allotted on 31st March, 2004 & are redeemable at par in three annual instalments at

the end of 8th, 9th & 10th year from the date of allotment with a put and call option at the end of each year i.e. 1st & 2nd instalment of Rs.33/- each perpreference share on completion of 96 months & 108 months respectively & 3rd instalment of Rs.34/- per preference share on completion of 120 months fromdate of allotment. The balance 15,05,099 preference shares were allotted on 30th March, 2005 and are redeemable at par in three annual instalments with aput and call option at the end of 8th, 9th & 10th year from the date of allotment i.e. 1st & 2nd instalments of Rs.33/- each per preference share on completionof 96 months & 108 months respectively and 3rd instalment of Rs. 34/- per preference share on completion of 120 months from date of allotment.

SCHEDULE 2 : RESERVES AND SURPLUS

a) Securities Premium AccountAs per last balance sheet 32,469.30 32,469.30Add : Addition during the year 4,850.01 —

37,319.31 32,469.30b) Debenture Redemption Reserve

As per last balance sheet 156.80 113.05Add : Addition during the year 18.20 43.75

175.00 156.80c) Capital Redemption Reserve

As per last balance sheet 3,400.00 3,400.00

d) General ReserveAs per last balance sheet 27,611.64 25,111.64Less : Additional liability pursuant to AS-15(Revised) (Refer Note no. 18 of Schedule 20) 3.60 —

Add : Addition during the year 2,500.00 2,500.00

30,108.04 27,611.64e) Profit and Loss Account 29,118.32 17,029.87

1,00,120.67 80,667.61

43

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 3 : SECURED LOANS

a) Secured Redeemable Non-convertible Debentures3,50,000 Debentures of Rs.100/- each privately 233.33 350.00placed with Financial Institution (See Note no. 1 below)

b) Loans from Financial Institutions/Banks/Others 51,813.96 44,287.34(See Note nos.2, 3 & 4 below)

c) Borrowings from Banks (Cash/Packing Credit/Working 17,715.97 19,498.79Capital Demand Loans) (See Note nos. 3 & 4 below)

d) Other Loans for specific Vehicles (Exclusive charge) 87.81 108.19(See Note no. 5 below)

69,851.07 64,244.32

Notes :

1 9.75% Secured Redeemable Non-Convertible Debentures of Rs.100/- each privately placed with Financial Institution areredeemable in three equal instalments at the end of 4th, 5th & 6th year from the date of allotment, i.e. 19th September, 2003.

The above debentures are secured by (a) first charge by way of an equitable mortgage of all immovable properties of theCompany including plant & machinery and stores & spares of the Company, wherever situated and (b) a first charge by way ofhypothecation of all movable properties, both present & future (save and except book debts) of the Company.

The first charge by way of equitable mortgage in favour of debentureholders and some lenders rank pari passu each other and issubject to charge on specified properties referred to in Note no. 2.

Amount repayable within 12 months Rs.116.67 lacs (Previous year Rs. 116.67 lacs).

2 (i) Loans from financial institutions, banks and others (other than those vested on amalgamation) are secured by (a) a firstcharge by way of an equitable mortgage over all the immovable properties of the Company at specific locations, (b) a firstcharge by way of hypothecation of movable properties situated at the respective locations and (c) Personal Guarantee ofthe Managing Director.

(ii) Loans from financial institutions and banks vested on amalgamation are secured by (a) a first charge by way of an equitablemortgage over all the immovable properties of the transferor companies at specific locations [including a charge over theassets of a company from whom the Company acquired SVF business by way of slump sale (Refer Note no. 4 of Schedule20)], (b) a second charge by way of equitable mortgage of all the immovable properties at specific locations, (c) a firstcharge by way of hypothecation of the movable properties at the respective locations and (d) Personal Guarantee ofshareholder(s)/promoter(s) in certain cases.

iii) The above charge of various lenders at specified locations referred to in (i) and (ii) above rank pari passu inter se the lendersat each location.

Amount repayable within 12 months Rs. 11,916.39 lacs (Previous year Rs. 28,028.38 lacs).

3 (i) The borrowings availed from consortium banks (other than those vested on amalgamation) are secured/to be secured by(a) a first charge by way of hypothecation of stocks and other current assets ranking pari passu, (b) a charge by way ofhypothecation / equitable mortgage of movable/immovable properties in favour of consortium banks ranking second andsubservient to the charges specified in Note nos.1 and 2 (i) ranking pari passu and (c) personal guarantee of two directorsof the Company.

(ii) The borrowings availed from banks outside consortium are secured /to be secured by (a) exclusive stocks, book debts andother current assets pertaining to the facilities granted by them and (b) personal guarantee of the Managing Director of theCompany.

(iii) The borrowings availed from consortium banks (vested on amalgamation) are secured/to be secured by (a) a first charge byway of hypothecation of stocks and other current assets, (b) a charge by way of hypothecation / equitable mortgage ofmovable/immovable properties on first charge basis ranking pari passu in certain cases and second charge in certain cases[including a charge over the assets of a company from whom the Company acquired SVF business by way of slump sale(Refer Note no. 4 of Schedule 20)] and (c) Personal Guarantee of shareholder(s)/promoter(s) of the Company. The secondcharge referred to in (b) is subservient to the charge specified in Note no.2 (ii).

Amount repayable within 12 months Rs. 17,715.97 lacs (Previous year Rs. 19,498.79 lacs).

4 In terms of the Schemes, the loans vested on amalgamation are subject to existing charges/hypothecation/mortgage subsistingthereon and shall neither extend to the assets of the Company nor operate to enlarge the securities for the said liabilities of thetransferor companies.

5 These loans are secured by hypothecation of vehicles purchased out of the said loans.

Amount repayable within 12 months Rs. 43.01 lacs (Previous year Rs. 81.44 lacs).

44

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 4 : UNSECURED LOANS

Short term advances

From Banks / Financial Institutions (See Note no.10 of Schedule 20) 84,848.49 81,598.21

Other Loans :

Deferred Sales Tax Liability 1,258.35 1,134.23

86,106.84 82,732.44

SCHEDULE 5 : FIXED ASSETS (Rs. in lacs)

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As on Additions Deduction As on Upto For the year Adjustment Upto As on As on1.4.2007 31.3.2008 31.3.2007 31.3.2008 31.3.2008 31.3.2007

FREE HOLD LAND 12,470.52 650.13 16.43 13,104.22 — — — — 13,104.22 12,470.52

LEASE HOLD LAND 1,002.52 197.25 — 1,199.77 410.18 77.33 — 487.51 712.26 592.34

BUILDINGS 27,327.48 1,803.76 — 29,131.24 2,849.40 846.26 — 3,695.66 25,435.58 24,478.08

PLANT & MACHINERY 86,720.64 16,019.72 89.10 1,02,651.26 20,381.26 6,154.83 29.88 26,506.21 76,145.05 66,339.38

FURNITURE & FIXTURES 626.04 214.67 — 840.71 222.75 49.61 — 272.36 568.35 403.29

VEHICLES 1,155.25 235.81 50.89 1,340.17 382.36 116.35 19.63 479.08 861.09 772.89

OFFICE EQUIPMENT 1,141.68 282.92 3.23 1,421.37 685.97 152.71 2.22 836.46 584.91 455.71

SOFTWARE 301.88 216.58 — 518.46 33.69 72.90 — 106.59 411.87 268.19

TRADE MARKS 36.00 — — 36.00 32.70 3.00 — 35.70 0.30 3.30

CAPITAL WORK IN PROGRESS 2,013.18 2,273.62 1,948.93 2,337.87 — — — — 2337.87 2013.18

TOTAL 1,32,795.19 21,894.46 2,108.58 1,52,581.07 24,998.31 7,472.99 51.73 32,419.57 1,20,161.50 1,07,796.88

PREVIOUS YEAR 1,20,653.46 15,142.12 3,000.39 1,32,795.19 18,486.49 6,560.97 49.15 24,998.31 1,07,796.88

Notes :

1. Buildings include Rs.0.02 lac (Previous year Rs.0.02 lac) being cost of shares in Co-operative Societies. Title deeds in respect of shares amounting to Rs.500/- are in the processof transfer.

2. Execution/registration of lease deeds in respect of certain lands acquired on lease amounting to Rs.147.65 lacs (Previous year Rs.26.60 lacs) are pending.

3. Lease hold land includes 30 acres of land taken on lease from The Karnataka Industrial Area Development Board (KIADB) for which the primary lease period of 6 years of landhas expired. The same will be converted to a sale subject to compliance with the terms of allotment.

4. Refer Note nos. 2(h), 15 & 16 of Schedule 20.

45

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 6 : INVESTMENTSI. LONG TERM INVESTMENTS (Other than trade investments) (at cost)

A) SHARESa) Quoted

(Other than in subsidiary companies)i) 17,75,000 Equity Shares (Previous year 17,75,000 shares) of Rs.10/- each 185.00 185.00

fully paid up in Ruchi Strips & Alloys Ltd.ii) 8,83,500 Equity Shares (Previous year 8,83,500 shares) of Rs.10/- each 264.87 264.87

fully paid up in National Steel & Agro Industries Ltd.iii) 4,00,000 Equity Shares (Previous year 4,00,000 shares) of Rs.10/- each 100.00 100.00

fully paid up in Anik Industries Limitediv) 1,19,300 Equity Shares (Previous year 1,19,300 shares) of Rs.10/- each 11.93 11.93

fully paid up in Sarthak Global Limitedv) 7,014 Equity Shares (Previous year 7,014 shares) of Rs.10/- each 1.89 1.89

fully paid up in Dena Bankvi) 1,887 Equity Shares (Previous year 1,887 Equity Shares) of Rs.10/- each 7.41 7.41

fully paid up in Punjab National Bankvii) 35,000 Equity Shares (Previous year 35,000 shares) of Rs.10/- each 3.82 3.82

fully paid up in Sharadraj Tradelink Ltd.viii) 1,80,000 Equity Shares (Previous year 1,80,000 shares) of Rs. 2/- each 17.38 17.38

fully paid up in Blue Chip India Ltd.ix) 21,500 Equity Shares (Previous year 21,500 shares) of Rs.10/- each 11.38 11.38

fully paid up in Hereld Commerce Limitedx) 50,00,000 Equity Shares (Previous year 50,00,000 shares) of Re.1/- each 1,591.43 1,591.43

fully paid up in Ruchi Infrastructure Limitedxi) 159 Equity Shares (Previous year Nil) of Rs.10/- each fully paid up 0.16 —

in Central Bank of IndiaAggregate amount of quoted investments 2,195.27 2,195.11

Aggregate market value of quoted investmentsRs. 2,096.22 lacs (Previous year Rs. 2,123.04 lacs)

b) Right title & interest in Ruchi Soya Industries Ltd. Beneficiary Trust 936.97 936.97(Refer Note no. 4 of Schedule 20)

c) Unquotedi) In subsidiary companies

99,40,700 Equity Shares (Previous year 99,40,700 shares)of Rs.10/- each fully paid in Ruchi Worldwide Ltd. 994.07 994.07

ii) Other than in subsidiary companiesa) 25,000 Equity Shares (Previous year 25,000 shares) 2.50 2.50

of Rs.10/- each fully paid-up in Ruchi Infotech Ltd.b) 6,00,000 Equity Shares (Previous year 6,00,000 shares) 60.00 60.00

of Rs.10/- each fully paid-up in Ruchi Acroni Industries Ltd.c) 35,000 Equity Shares (Previous year 90,000 shares) 3.50 9.00

of Rs.10/- each fully paid-up in E-Ruchi Marketing (P) Ltd.d) Nil Equity Shares (Previous year 3,930 shares) of Rs.10/- each — 0.39

fully paid up in GFL Energy Pvt. Ltd.e) Nil Equity Shares (Previous year 60,000 shares) of Rs.10/- each — 6.00

fully paid up in Southern Port & Terminals Pvt. Ltd.f) 5,00,000 6% Redeemable Cumulative Preference Shares (Previous 500.00 —

year Nil) of Rs.100/- each fully paid up in Sunshine Oleochem Ltd.g) 26,000 Equity Shares (Previous year Nil) of Rs.10/- each fully 2.60 —

paid up in RIFL Energy Private Limited.

iii) Share application money (pending allotment) 3,450.00 —(towards preference shares in Ruchi Realty Holdings Pvt. Ltd.)

46

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

B) GOVERNMENT SECURITIES :National Saving Certificates/Kisan Vikas Patra(deposited with government authorities) 6.93 6.33

Aggregate amount of unquoted investments 5,019.60 1,078.29

TOTAL : (I) 8,151.84 4,210.37

II. CURRENT INVESTMENTS (At lower of cost & market value)MUTUAL FUNDS (Quoted)i) 1,00,000 Units (Previous year 1,00,000 units) of SBI

Magnum Multicap Fund of Rs.10/- each 10.00 10.00

ii) 2,50,000 Units (Previous year 2,50,000 units) of SBIOne India Fund of Rs.10/- each 25.00 25.00

iii) 50,000 Units (Previous year Nil unit) of SBIInfrastructure Fund-I of Rs.10/- each 5.00 —

iv) 1,000 Units (Previous year 1,000 units) of PNBPrincipal Junior Cap Fund of Rs.10/- each 0.10 0.10

40.10 35.10Less : Provision for diminution in value of investments 0.25 0.15

TOTAL : (II) 39.85 34.95

Aggregate market value of current investmentsRs. 46.86 lacs (Previous year Rs.39.61 lacs)

TOTAL : (I+II) 8,191.69 4,245.32

Note : The following investments were purchased and sold during the year :Name of Securities No. of Units Cost (Rs. in lacs)

SBI Premier Liquid Fund 123,69,18,421.65 1,54,020.00

Principal Cash Management Fund 1,00,02,837.42 1,000.00

SCHEDULE 7 : INVENTORIES(As valued and certified by the Management)

Stock-in-trade (At lower of cost and net realisable value exceptrealisable by-products which are valued at net realisable value)

a) Raw Materials (including packing material) 1,33,025.33 44,756.54

b) Work-in-progress 3,063.28 2,032.00

c) Finished goods 71,557.14 44,464.54

d) Realisable by-products 2,060.38 1,716.77

e) Consumables, Stores & Spares 4,116.67 2,817.18

2,13,822.80 95,787.03

SCHEDULE 8 : SUNDRY DEBTORS(Unsecured)

Debts outstanding for period exceeding six months

Considered good 5,126.59 4,758.08

Considered doubtful 329.85 16.17

5,456.44 4,774.25

Other debts (considered good) 98,643.99 77,934.08

1,04,100.43 82,708.33

Less : Provision for doubtful debts 329.85 16.17

1,03,770.58 82,692.16

47

SCHEDULE 9 : CASH AND BANK BALANCE

Cash on hand 339.78 445.07

Bank Balances with Scheduled Banks

i) In Current Accounts 8,270.57 4,722.89

ii) In Deposit Accounts (Refer Note no. 10 of Schedule 20) 49,279.83 61,948.37

Bank Balances with Non-Scheduled Banks(Refer Note no. 11 of Schedule 20)

i) In Current Accounts — 0.05

ii) In Deposit Accounts 0.11 0.11

Post Office Saving Bank [Maximum balance at any time 0.02 0.02during the year Rs.0.02 lac (Previous year Rs.0.02 lac)]

57,890.31 67,116.51

SCHEDULE 10 : OTHER CURRENT ASSETS

Interest accrued

On Investments 4.31 3.74

On Fixed Deposits with Banks 984.01 1,100.55

On Intercorporate & Other deposits 84.07 13.68

1,072.39 1,117.97

SCHEDULE 11 : LOANS AND ADVANCES(Unsecured & considered good)

Intercorporate Deposits 2,396.91 357.04

Other Deposits 2,402.21 1,643.43

Advance for Capital Expenditure 3,415.30 1,819.47

Other advances recoverable in cash or in kind orfor value to be received [including (a) Rs. 1.13 lacs(Previous year Rs. 2.12 lacs) recoverable from Directors/Officers of the Company (b) due from subsidiary companyRs. 206.66 lacs (Previous year Rs. Nil)] 54,993.60 33,537.57

Advance Income Tax including tax deducted at source 9,526.02 9,747.06

72,734.04 47,104.57Less : Provision for doubtful advances 152.08 59.21

72,581.96 47,045.36

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

48

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 12 : CURRENT LIABILITIES

Sundry Creditors [including Rs Nil (Previous year Rs.1181.54 lacs) 2,66,060.73 1,40,480.15due to subsidiary company] (Refer Note nos. 5,6 & 7 of Schedule 20)

Agency & Other Deposits 838.31 624.46

Interest accrued but not due 484.32 626.76

Customers' advances 20,683.89 9,193.51

Other liabilities 1,004.73 451.32

2,89,071.98 1,51,376.20

SCHEDULE 13 : PROVISIONS

Taxation 10,380.28 10,315.89

Proposed dividend 1,124.92 1,056.44

Gratuity 28.11 —

Leave encashment 109.51 81.34

11,642.82 11,453.67

SCHEDULE 14 : MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

Share Issue Expenses 24.48 48.70

Less : Adjusted/Written off 2.40 24.22

22.08 24.48

49

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEARENDED ON 31ST MARCH, 2008 2007-08 2006-07

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)SCHEDULE 15 : SALES AND OTHER INCOME

Sales 10,90,485.13 8,54,776.55Less : Excise duty 2,135.88 1,588.52

10,88,349.25 8,53,188.03Scrap & Other Sales 1,926.60 1,715.74Less : Excise duty 2.91 0.24

1,923.69 1,715.50Export Incentive 6,457.50 164.53VAT/Excise Refund/Remission 5,494.49 4,594.06Processing charges (Gross)[TDS Rs.12.83 lacs 546.83 542.51

(Previous year Rs.17.14 lacs)]Service charges 12.08 21.43Income from power generation (including carbon credits) 874.93 226.09Other operating income 140.52 2,322.14

11,03,799.29 8,62,774.29

Insurance claims received 353.90 350.32Commission, Discount & Rebates 87.24 26.00Dividend [including Rs. Nil (Previous year Rs. 43.18 lacs 51.52 81.27

from subsidiary company)]Profit on sale of investments 61.35 7.15Profit on sale of assets 226.74 125.11Lease Rent (Gross) [TDS Rs 3.61 lacs (Previous year Rs.3.58 lacs)] 15.93 15.93Other Miscellaneous Income (See Note no.13 of Schedule 20) 2,905.03 1,448.53

3,701.71 2,054.31

11,07,501.00 8,64,828.60

SCHEDULE 16: INCREASE/(DECREASE) IN STOCKSa) Finished goods

Opening Stock 46,181.31 34,019.06Closing Stock 73,617.52 46,181.31

27,436.21 12,162.25

b) Semi-finished goodsOpening Stock 2,032.00 2,295.76Closing Stock 3,063.28 2,032.00

1,031.28 (263.76)

28,467.49 11,898.49

SCHEDULE 17 : MATERIAL CONSUMEDa) Raw Material

Opening Stock 40,906.36 44,800.60Add : Purchases 8,41,502.28 5,14,362.24

8,82,408.64 5,59,162.84Less : Closing Stock 1,27,467.26 40,906.36

7,54,941.38 5,18,256.48

b) Packing MaterialOpening Stock 3,850.18 3,379.18Add : Purchases 23,811.14 16,925.83

27,661.32 20,305.01Less : Closing Stock 5,558.07 3,850.18

22,103.25 16,454.83

7,77,044.63 5,34,711.31

50

SCHEDULE 18 : EXPENSESProcessing Charges 715.10 131.92

Power & Fuel (net of recoveries) 15,584.59 13,340.94

Manufacturing Expenses 3,138.43 2,231.94

Consumables 5,932.88 5,700.19

Repairs - Plant & Machinery 3,681.91 3,576.28

Repairs - Buildings 705.14 99.79

Repairs - Others 521.80 413.51

Salary, Wages and Bonus 3,450.31 2,701.19

Contribution to Provident and Other Funds 262.81 145.04

Workmen & Staff Welfare expenses 225.83 158.22

Insurance (net of recoveries) 1,190.38 1,119.65

Rent 2,438.55 1,792.43

Rates & Taxes 1,493.43 946.32

Freight & forwarding (net of recoveries) 23,870.16 17,213.79

Export expenses 3,729.76 3,307.89

Commission and rebate 3,015.67 2,139.64

Advertisement & sales promotion 950.10 773.71

Donation 18.13 37.78

Travelling & Conveyance 1,122.27 863.33

[including Rs. 59.05 lacs (Previous year Rs. 57.44 lacs) for Directors]

Provision / write-off of doubtful/ bad debts and advances 571.35 70.64

Provision for diminution in value of Investment 0.10 0.15

Miscellaneous expenses written off 2.40 24.22

Loss on Sales/Fire of Fixed Assets 5.09 51.06

Loss on sale of investments 5.10 —

Exchange difference (Net) 2,301.75 1,833.62

Bank Commission & Charges 2,720.91 2,261.12

Other expenses (Net of recoveries) (See Note no.14 of Schedule 20) 5,706.00 5,384.90

83,359.95 66,319.27

SCHEDULE 19 : INTEREST (Net)Interest

— Debenture & other fixed loans 4,073.10 2,835.33

— Others 12,089.41 9,447.89

16,162.51 12,283.22Less : Interest received

[Tax deducted at source Rs.1,322.57 lacs (Previous year Rs. 991.22 lacs)] 5,961.66 4,673.69

10,200.85 7,609.53

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

51

SCHEDULE ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008 ANDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON THAT DATE

SCHEDULE NO. 20 NOTES TO THE ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES

a) FIXED ASSETS :

Fixed assets, other than assets given on lease, are valued at cost/revalued amount less depreciation. Cost of fixedassets is arrived at after including therein attributable interest and expenses for bringing the respective assets toworking condition and reducing therefrom Cenvat credit received/ receivable, if any. Fixed assets acquired underHire Purchase Scheme are valued at cash price less depreciation. Fixed assets vested on amalgamation are statedat their fair value based on report of approved valuers less depreciation.

b) DEPRECIATION :

Depreciation is provided on straight line basis at the rates prescribed in Schedule XIV to the CompaniesAct, 1956. Depreciation has been provided on pro-rata basis with reference to the month of addition/ installation/disposal of assets.

c) INVENTORIES :

Inventories, other than realisable by-products, are valued at lower of cost and net realisable value. The cost isarrived at on first-in-first out (FIFO) basis. The cost of manufactured products includes therein direct costs, productionoverheads and depreciation. Realisable by products are valued at net realisable value. Cost of trading itemsincludes therein cost of purchase & other costs of acquisition attributable thereto.

d) RETIREMENT BENEFITS :

(a) Short term employee benefits are recognised as expense in the profit and loss account of the year in whichservice is rendered.

(b) Contribution to defined contribution schemes such as Provident Fund, Family Pension Fund andSuperannuation Fund are charged to the profit and loss account.

(c) The defined benefit obligations in respect of gratuity and leave encashment are recognised on the basis ofvaluation done by an independent actuary applying Project Unit Credit Method. The actuarial gain/lossarising during the year are recognised in the profit and loss account of the year.

e) INVESTMENTS :

Long term investments are valued at cost. No provision is made for diminution in the value of investments wherein the opinion of the Board of Directors such diminution is temporary, while the investments are of long termnature. Current investments are valued at lower of cost and fair value.

f) EXPENSES INCURRED FOR ISSUE OF SHARES, DEBENTURES AND OTHER MISCELLANEOUS EXPENSES :

Preliminary expenses, pre-operative expenses, share issue expenses incurred prior to 1st April, 2003 are writtenoff over a period of 10 years. Share issue expenses incurred after 1st April, 2003 are either charged to profit & lossaccount or securities premium account. Expenses pertaining to issue of debentures are charged to profit & lossaccount in the year in which they are incurred.

g) PREMIUM ON REDEMPTION OF DEBENTURES :

Premium payable, if any, on redemption of debentures is spread over the life of debentures.

h) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currency are accounted at the exchange spot rate prevailing on the date of the transaction.Year end receivables and payables are translated at year end rate of exchange except in case of transactionscovered by forward exchange contracts which are translated at the contracted rate. The difference between thespot rate at the date of transaction & contracted rate is spread over the life of the contract. The difference onaccount of fluctuation in the rate of exchange is recognised in the profit and loss account. In case of sales andpurchases the same are included under the respective heads.

52

i) BORROWING COSTS :

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to theacquisition/construction of qualifying fixed assets are capitalised up to the date when such assets are ready fortheir intended use. Other borrowing costs are charged to the profit & loss account.

j) DEFERRED TAX :

Deferred tax is accounted for by computing the tax effect of timing differences which arise in a year and reversein subsequent periods.

k) IMPAIRMENT OF ASSETS :

An impairment loss is recognised in the profit & loss account whenever the carrying amount of an asset or a cashgenerating unit exceeds its recoverable amount. The recoverable amount is estimated as the higher of its netselling price and its value in use. The carrying amounts are reviewed at each balance sheet date to determinewhether there is any impairment.

l) EXPORT INCENTIVES :

Export incentives, to which the Company is entitled to be based on exports during the year, are recognised asincome in the year of exports.

m) INTANGIBLE ASSETS :

Intangible assets are measured at cost and amortised over a period for which the assets’ economic benefits areexpected to accrue.

Expenditure incurred on software acquired is amortised over a period of five years from the date the expenditure

is incurred.

2. CONTINGENT LIABILITY NOT PROVIDED FOR2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

(a) Claims against the Company not acknowledged as debts. 105.00 120.27

(b) Outstanding bank guarantees. 2,453.49 1,139.91

(c) Outstanding corporate guarantees given on behalf of subsidiary 12,340.51 8,832.00

(d) Income tax/ Sales tax/ Excise/ Octroi /Custom duty/ ESIC /Electricity Duty / demands disputed. 13,089.98 9,675.45

(e) Bills discounted 25,090.19 19,346.62

(f) Estimated amount of contracts remaining to beexecuted on capital account. (Net of advances) 5,538.08 3,868.83

(g) Custom duty liability which may arise if obligation forexports is not fulfilled against import of plant and machinery. — 233.40

(h) In the preceding year, vide agreements dated 24th November, 2006 and 18th January, 2007, the Company hasacquired land, buildings and plant and machinery at Baran (Rajasthan) and Guna (M.P.) respectively. The assetsacquired are subject to charges created by the seller in favour of one of their consortium bankers. The saidconsortium banker has not accepted the Scheme of Arrangement approved in the case of seller by the Hon’bleMadhya Pradesh High Court and has filed a Special Leave Petition before the Hon’ble Supreme Court, which ispending. The seller has set aside funds by way of a fixed deposit in respect of amount due to the said Consortiumbank. Pending the disposal of the Special Leave Petition by the Supreme Court, the registration of the said land infavour of the Company is pending. The additional liability, if any, that may arise on account of the above,however, cannot be ascertained at this stage.

53

3. Managerial Remuneration under Section 198 of the Companies Act, 1956 :2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

(i) Remuneration paid or provided to the Chairman :

Commission 50.00 19.62

(ii) Remuneration paid or provided to the Managing Director :

(a) Salary 91.40 72.53

(b) Perquisites in cash or in kind 28.29 19.67

(iii) Remuneration paid to or provided to Whole time Directors :

(a) Salary and allowances 17.77 10.49

(b) Perquisites in cash or in kind 4.68 3.32

(c) Contribution to Provident & Other Fund 0.85 0.60

(1) The above does not include reimbursement of expenses incurred for the Company.

(2) The amount shown above includes remuneration amounting to Rs. 3.07 lacs (Previous year Rs.0.67 lac)paid to one of the directors, which is subject to approval of shareholders.

(iv) Computation of profits under Sections 198 and 349 of the Companies Act, 1956 :

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

Net Profit before tax as per Profit & Loss Account 25,374.15 15,644.25

Add : (a) Managerial Remuneration 192.99 126.22

(b) Sitting fees to Directors 0.66 0.66

(c) Loss on sale of assets 5.09 51.06

(d) Loss on Sale of Investment 5.10 —

(e) Provision for diminution of investments 0.10 0.15

(f) Wealth Tax 6.67 5.49

Less : (a) Profit on sale of assets 226.74 125.11

(b) Profit on sale of investments 61.35 7.15

Profit for the purpose of computation of commission 25,296.67 15,695.56

Commission at the rate of 0.2% (Previous year 0.5% pro-rata)of profit, subject to limit of Rs. 50 lacs 50.00 19.62

4. In an earlier year, the High Court of judicature at Bombay and Delhi had approved three schemes under Sections 391to 394 of the Companies Act, 1956 providing for (a) Amalgamation of General Foods Ltd., Ruchi Credit CorporationLtd., Param Industries Ltd., Ruchi Health Foods Ltd., Aneja Solvex Ltd. and Ruchi Pvt. Ltd.(after de-merger of its leasingbusiness)(hereinafter referred to as the Transferor companies) with the Company (b) Acquisition of soya processing,vegetables oils and fats and food businesses of Madhya Pradesh Glychem Industries Ltd. by the Company by way ofslump sale; and (c) Re-organisation of the assets of the Company.

Two of the Transferor companies were holding in aggregate 7,42,092 equity shares of the Company. One of the transferorCompany was holding 2,80,000 equity shares in another transferor Company. Further, the Company was holding76,71,426 equity shares in two of the Transferor companies. In terms of the Schemes of Amalgamation / Arrangementsanctioned by the Hon’ble High Courts of Bombay and Delhi, 7,83,931 equity shares of the Company have beenissued to a Trust in lieu of the shares of the Transferor companies held by the Company / Transferor Companies. In termsof the Schemes, all the above shares aggregating to 15,26,023 are to be held by the Trust for the benefit of the Companyor its successors. These shares have been shown under the head ‘investments’ and included in Schedule 6 relating toinvestments at cost in accordance with the accounting policy of the Company. The dividend received by the Trust inrespect of these shares is included under the head ‘dividend’ under ‘Other income’ in Schedule 15.

54

5. Sundry creditors include bills payable for purchase of material Rs.50,397.54 lacs (Previous year Rs. 23,203.68 lacs).

6. Amount due to Micro, Small and Medium Enterprises (to the extent identified by the Company on the basis of informationavailable) along with interest payable under the Interest on Delayed Payments to Micro, Small and Medium EnterprisesDevelopment Act, 2006 is Rs. 73.42 lacs (Previous year payable to Small Scale Industries Rs. 172.52 lacs).

7. Sundry Creditors shown in Schedule 12 includes amount due to Micro, Small and Medium Enterprises (to the extentidentified by the Company on the basis of information available) which is outstanding for more than 30 days as at

31st March, 2008 as under :

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

Pragati Graphics Pvt. Ltd. 0.01 1.30

Aditya Air Products Pvt. Ltd. 0.15 0.04

Kanchratan Packaging Pvt. Ltd. 0.08 3.60

Prime Packaging 0.09 0.21

Worth Peripherals Pvt. Ltd. 0.53 11.77

Kakwani Packaging Industries 0.01 3.44

Royal Kniting Promoters 0.19 —

Gensis Automation Pvt. Ltd. 0.16 —

Vyankatesh Plastics & Packagings Pvt. Ltd. 0.26 —

Universal Refrectories & Allied Cons. Co. 0.05 —

Films & Printers (India) Pvt. Ltd. 0.03 —

Fox Control Pvt. Ltd. 0.03 —

Shivam Poly Plast Pvt. Ltd. 0.27 —

Supersack 0.08 —

8. Pursuant to the approval of the members by way of a special resolution passed at the Extra Ordinary General Meeting,the Company has allotted 3,53,25,000 warrants to promoters and others on preferential basis. Each warrant entitles theholder to subscribe to one equity share of Rs. 2/- each. In terms of the resolution, the said warrants have been issued ata payment of 10% of the total amount. The balance 90% amount is receivable on exercise of the option. During theyear, 64,00,000 equity shares of Rs. 2/- each have been allotted on exercise of option by two of the warrant holderentities of the promotors' group. The proceeds of the issue have been utilised towards working capital.

9. During the year, the Company forfeited 4,047 equity shares of Rs.10/- each. The said shares have been re-issued topersons other than promoters/persons acting in concert with promoters in accordance with preferential issue guidelinesof Securities and Exchange Board of India. The said re-issue of shares is subject to approval of the members at theensuing Annual General Meeting.

10. During the year, the Company has availed buyers' credit. The amount of Rs. 37,224.45 lacs (Previous year Rs. 50,771.15lacs) outstanding on account of buyers' credit as at 31st March, 2008, is guaranteed by the banks against fixed depositsof Rs. 35,107.00 lacs (Previous year Rs. 51,639.00 lacs) placed with them. In the balance sheet, the said amount ofRs. 37,224.45 lacs (Previous year Rs. 50,771.15 lacs) has been included under unsecured loans from banks in ScheduleNo. 4 and the aforesaid fixed deposits are included under bank balances with scheduled banks in deposit account inSchedule No. 9.

11. The Balance with Non Scheduled Banks comprises (a) Balance in Deposit Account with Jila Sahakari Kendriya BankMaryadit Rs.0.11 lac (Previous year Rs. 0.11 lac) [Maximum balance at any time during the year Rs. 0.11 lac] (b) incurrent account with Bhuj Mercantile Co-operative Bank Ltd., Rs. Nil [Maximum balance at any time during the yearRs. 0.05 lac (Previous year Rs. 0.05 lac)].

12. Purchases are net of Rs.1,913.77 lacs (Previous year Rs. 2,200.29 lacs) and sales are net of Rs.1,514.89 lacs (Previousyear inclusive of Rs.694.86 lacs) respectively towards difference arising on account of fluctuation in the rate of exchange.

13. Other income inter alia includes the following :

Gain from transactions on commodity exchange Rs. 907.73 lacs (Previous year Rs. Nil)

14. Other expenses inter alia included the following :

Loss from swaps/derivatives Rs. 38.49 lacs (Previous year Rs. 860.73 lacs)

15. Fixed assets includes assets amounting to Rs. 743.59 lacs (w.d.v. as at 31.3.2008) (Previous year Rs.582.85 lacs)representing plant & machinery & equipment which are not wholly used. The Company is in the process of findingalternate use of such assets or their ultimate disposal.

55

16. Expenditure incurred during construction period has been dealt with as under:2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

Power & fuel 22.17 —

Salaries & wages 11.72 —

Staff welfare 0.37 —

Travelling expenses 1.19 —

Rent 0.07 —

Freight & Forwarding 2.46 —

Rates & Taxes 0.18 —

Repair & Maintenance 1.12 —

Consumables 0.04 —

Conveyance Expenses 0.31 —

Other expenses 33.88 —

73.51 —

Less : Allocated to buildings & plant & machinery & capitalised 72.15 —

Balance pending allocation to be capitalised 1.36 —

17. Advance from customers shown in schedule 12 includes Rs. 49.57 lacs (Previous year Rs.356.46 lacs) in respect ofwhich the company is in the process of identifying the payees.

18. During the year, the Company has adopted revised Accounting Standard 15 (AS-15) Employee Benefits issued by theInstitute of Chartered Accountants of India. Consequently, additional liability amounting to Rs. 3.60 lacs (net of deferredtax of Rs. 1.85 lacs) in respect of gratuity has been debited to the General Reserve.

19. As stated in Note no. 18 above, from the current year, the Company has adopted the revised Accounting Standard onEmployee Benefits. The following disclosures are made as required under AS-15.

Gratuity Leave Encashment(Rs. in lacs) (Rs. in lacs)

Change in obligation during the year ended 31st March 2008

Obligation at the beginning of the year 203.96 81.34

Service cost 28.33 57.37

Interest Cost 17.79 —

Actuarial (Gains)/Losses 32.47 —

Benefits payments (19.92) (29.20)

Obligations at the end of the year 262.63 109.51

Change in the fair value of plan assets

Fair value of plan assets at the beginning of the year 198.51 —

Expected return on plan assets 18.05 —

Contributions 37.11 —

Benefits paid (19.92) —

Actuarial (Gains)/Losses 0.77 —

Fair value of plan assets at the end of the year 234.52 —

Amount recognised in balance sheet

Present value of defined benefit obligation at the end of the year 262.63 —

Fair value of plan assets at the end of the year 234.52 —

Liability recognised in balance sheet (28.11) —

Balance sheet reconciliation

Net liability at the beginning of the year 5.46 81.34

Expenses recognised during the year 59.76 57.37

Contributions during the year 37.11 29.20Net liability as at the end of the year 28.11 109.51

56

Amounts recognised in the profit and loss account

Current service cost 28.33 57.37

Interest cost 17.79 —

Expected return on plan assets for the year (18.05) —

Actuarial (Gains)/Losses 31.69 —

Expenditure recognised in the profit and loss account 59.76 57.37

Actual return on plan assets

Expected return on plan assets for the year 18.05 —

Actuarial (Gains)/Losses 0.78 —

Actual return on plan assets 18.83 —

Percentage of each category of plan assets to fair value of plan assets

Insurer managed funds 234.52 —

Actuarial assumptions

Discount Rate Current 8.00% 8.00%

Salary escalation Current 6.00% 6.00%

Rate of return on plan assets Current 8.00% —

Other disclosures

a) Gratuity is payable to all employees at the rate of 15 days salary for each completed year of service subject to amaximum of Rs. 3.50 lacs.

b) Salary escalation is considered in line with the industry practice considering promotion and demand and supply ofthe employees.

20. In respect of certain advances included under inter-corporate deposits, the Company has charged interest on advancesgiven on net daily products of balances due from/payable to these companies during the year. The Company has beenadvised that this is in compliance with the provisions of Section 372A of the Companies Act, 1956.

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

21. Remuneration to the Statutory Auditors :(a) For audit [incl. Service tax Rs. 2.22 lacs (Previous year Rs. 1.85 lacs)] 20.22 16.85

(b) For tax audit [Incl. Service Tax Rs. 0.62 lac (Previous year Rs. 0.61 lac)] 5.62 5.61

(c) For Company law matters and other services[incl. Service tax Rs. 1.70 lacs (Previous year Rs. 0.73 lac)] 15.46 6.92

(d) Travelling and other out of pocket expenses 4.06 5.17

22. Remuneration to Cost Auditors :

For Cost audit [Incl. Service tax Rs.0.20 lac (Previous year Rs. 0.07 lac)] 1.80 0.67

23. a) DETAILS OF RAW MATERIAL CONSUMED :

2007–2008 2006–2007

ITEM Qty (M.T.) Value Qty. (M.T.) Value

(Rs. in lacs) (Rs. in lacs)

Soya DOC/Flour

(Note i) 372.515 28.70 48.355 5.36

Seeds (Note i & ii) 16,52,700.815 2,82,382.77 13,97,010.692 1,82,823.35

Oil Cake (Note i) 48,482.444 3,595.34 50,916.369 3,135.50

Oils (Notes i & ii) 10,24,472.970 4,54,967.91 8,66,263.927 3,21,987.60

Others — 220.62 — 110.36

Gratuity Leave Encashment(Rs. in lacs) (Rs. in lacs)

57

Notes :

(i) Excludes following out of own production :

Soya DOC/Flour 87,889.364 M.T. (Previous year 93,473.029 M.T.)

Oils 4,14,536.755 M.T. (Previous year 3,26,497.731 M.T.)

Seeds 2,11,970.627 M.T. (Previous year 2,24,706.572 M.T.)

Oil Cake 11,991.969 M.T. (Previous year 16,719.109 M.T.)

(ii) Net of following quantities sold :

Seeds 35,828.177 M.T. (Previous year 15,873.862 MT)

Oils 13,950.970 M.T. (Previous year 23,788.658 MT)

(iii) Value of imported and indigenous raw material consumed & percentage thereof to total consumption.

2007-2008 2006-2007

Value % to the total Value % to the total

(Rs. in lacs) consumption (Rs. in lacs) consumption

Imported 3,96,466.60 52.52 2,31,555.24 44.68

Indigenous 3,58,474.78 47.48 2,86,701.24 55.32

b) DETAILS OF PACKING MATERIAL CONSUMED :

2007-2008 2006-2007

Value % to the total Value % to the total

(Rs. in lacs) consumption (Rs. in lacs) consumption

Imported 347.10 1.57 258.50 1.57

Indigenous 21,756.15 98.43 16,196.33 98.43

c) DETAILS OF STORES & SPARES CONSUMED :

2007-2008 2006-2007

Value % to the total Value % to the total

(Rs. in lacs) consumption (Rs. in lacs) consumption

Imported 115.57 1.58 259.66 6.27Indigenous 7,207.86 98.42 3,880.83 93.73

Note : Including Rs. 4,328.02 lacs (Previous year Rs. 1,443.78 lacs) capitalised.

d) DETAILS OF PURCHASES (Items traded in) :

2007–2008 2006–2007

Qty (M.T.) Value Qty. (M.T.) Value

(Rs. in lacs) (Rs. in lacs)

Textured Soya Proteins 334.440 108.28 683.172 185.60

Realisable by product 2,226.549 687.74 660.510 158.68

Seed Extractions (DOC) 4,00,472.697 54,608.92 4,74,531.866 47,149.05

Oil 4,41,296.701 1,59,962.33 6,17,925.480 1,76,697.84

Vanaspati 7,798.378 4,060.20 2,888.127 1,408.82

Pulses/Grains/Others 1,04,287.378 12,743.71 1,86,709.719 20,281.77

Fruit Juice 100.562 36.60 — —

Fresh fruits bunches 1,263.444 62.93 — —

Seedling (in number of units) 27,798 3.47 — —

Plant & Machinery (Equipment) — 241.74 — —

Note : The consumption figures shown above have been ascertained on the basis of opening stock plus purchases, less

closing stocks. Therefore, it is inclusive of shortages as ascertained on physical count and unusable items, if any.

58

24. DETAILS OF LICENSED AND INSTALLED CAPACITY, PRODUCTION, SALES AND STOCKS2007-08 2006-07

Qty. (M.T.) Qty. (M.T.)a) LICENSED CAPACITY

See note (ii) below

b) INSTALLED CAPACITY

(On three shift basis)

Textured Soya Proteins 1,52,000 1,40,000

Edible Soya Flour (Soya Protein) 60,000 60,000

Soyabean Extraction 23,12,424 21,27,924

Oils (including lecithin) 21,21,000 21,12,000

Vanaspati 4,69,500 4,69,500

Power Generation (in MW) 30.30 9.90

c) PRODUCTION

Textured Soya Proteins 40,004.781 36,727.785

Realisable by-products (See note (i) below) 75,692.952 61,417.857

Seed Extractions (DOC) (See Note (i) below) 14,57,408.785 12,34,677.956

Oils (See Note (i) below) 15,24,770.710 12,89,753.118

Vanaspati 1,52,754.861 1,14,426.445

Power Generation (Number of Units) 2,08,10,157 56,68,322

Seedling (Number of Units) 57,596 —

2007–2008 2006–2007

Qty (M.T.) Value Qty. (M.T.) Value

(Rs. in lacs) (Rs. in lacs)

d) SALES

Textured Soya Proteins 38,948.523 9,651.79 37,662.339 6,981.32

Realisable by-products 76,763.980 15,910.53 57,693.597 9,197.12(See Note (i) below)

Seed Extractions (DOC) 17,38,419.677 2,36,266.63 15,98,639.206 1,56,361.85(See Note (i) below)

Oils 15,34,576.804 7,21,349.13 15,69,723.509 5,95,696.57(See Note (i) below)

Vanaspati 1,53,359.790 78,732.36 1,16,431.594 53,644.09

Pulses/Grains/Others 95,074.321 12,893.93 1,83,099.062 20,730.31

Raw materials 49,779.147 13,116.82 39,662.520 10,576.77

Fruit Juice 17.464 8.36 — —

Fresh fruits bunches 1,263.444 62.87 — —

Seedling (Number of Units) 82,273 38.87 — —

Plant & Machinery (Equipment) — 317.96 — —

e) STOCK (Opening)

Textured Soya Proteins 610.864 173.95 862.246 151.43

Realisable by-products 8,035.897 1,716.77 8,807.536 1,933.87

Seed Extractions (DOC) 86,352.186 8,860.82 69,254.599 5,992.48

Oils 77,377.005 32,397.82 65,919.647 23,897.65

Vanaspati 5,166.034 2,468.85 4,283.056 1,732.21

Pulses/Grains/Others 4,805.059 563.10 1,194.402 311.42

59

2007–2008 2006–2007

Qty (M.T.) Value Qty. (M.T.) Value

(Rs. in lacs) (Rs. in lacs)f) STOCK (Closing)

Textured Soya Proteins 2,001.562 439.69 610.864 173.95

Realisable by-product 7,704.275 2,060.38 8,035.897 1,716.77

Seed Extractions (DOC) 1,05,932.658 12,530.56 86,352.186 8,860.82

Oils 94,330.857 49,758.56 77,377.005 32,397.82

Vanaspati 12,359.483 6,989.44 5,166.034 2,468.85

Pulses/Grains/Others 14,018.116 1,808.12 4,805.059 563.10

Fruit Juice 83.098 30.26 — —

Seedling (Number of Units) 3,121 0.51 — —

Notes:(i) Quantities of production & sales include the following used for captive consumption :

Seed Extractions (DOC) 87,889.364 M.T. (Previous year 93,473.029 M.T.)

Oils 4,14,536.755 M.T. (Previous year 3,26,497.731 M.T.)

By-products 1,487.143 M.T. (Previous year 5,156.409 M.T.)

Oil Cake 11,991.969 M.T. (Previous year 16,719.109 M.T.)

(ii) Being de-licensed, there is no licensed capacity for any of the products. Installed capacities shown under(b) above are as per registrations with Secretariat for Industrial Approvals.

(iii) Installed capacity is as certified by the management and relied by the auditors, being a technical matter.

(iv) Production is exclusive of quantities produced for others on job work basis but includes following items beingproduction done by others for the Company :

ITEM 2007-2008 2006-2007Qty. (M.T.) Qty.(M.T)

Oils 12,149.192 2,484.101

Seed Extraction DOC 50,275.113 10,388.334

(v) Sale includes samples and transit losses but does not include abnormal losses.

(vi) Pulses/Grain/Others include Gram, Wheat, Maize, Gwarseed, Coffee, Soap, Tuar, Barley, Pease & Soyaseed.

25. (a) Value of imports on CIF basis

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

Capital Goods 284.34 289.91

(b) Expenditure in foreign currency (on CIF basis):

1. Purchase of Oil 3,06,074.34 1,74,671.04

2. Purchases for merchandise exports 48,283.59 52,214.15

3. Purchase of Consumables/ packing materials 561.13 333.53

4. Foreign Travel 55.80 24.28

5. Commission and rebate 46.96 50.00

6. Interest on fixed loans 175.06 351.97

7. Interest on other loans 2,429.24 2,331.79

8. Freight & forwarding — 139.14

9. Other expenses 135.90 10.17

60

(c) Net dividend remitted in foreign currency:

For F.Y. 2006-2007Number of Preference Share Holders 3 —

Number of Shares held by them 45,24,285 —

Amount 180.97 —

Number of Equity Share Holders 7 32

Number of Shares held by them 40,88,710 44,92,917

Amount 98.13 98.84

For F.Y. 2005-2006Number of Preference Share Holders 3 —

Number of Shares held by them 45,24,285 —

Amount 180.97 —

(d) Earning in foreign exchange

i) Export of goods on FOB basis 1,36,124.56 87,753.30

ii) Merchandise Trade on FOB basis 48,518.46 52,894.34

26. Prior period income/expenses included under respective heads are as under :

2007-2008 2006-2007Expenditure (Rs. in lacs) (Rs. in lacs)

Repair & Maintenance 45.66 1.08

Rent 21.27 22.09

Brokerage 3.44 0.38

Freight 22.84 13.80

Clearing & Forwarding 10.19 3.57

Interest 0.61 —

Excise Duty 29.72 —

Insurance 8.62 —

Wages (Others) 1.20 —

Stores Consumption 8.68 —

Sundry Packing Material 0.89 —

Power & Fuel 0.24 —

Rates & Taxes 23.84 0.11

Consumable 10.46 —

Claim & Settlement 0.88 —

Depreciation (1.52) —

Other expenses 15.71 47.51

Income

Power & Fuel 264.76 —

Insurance claim received 0.07 —

Other Income 24.08 —

27. (a) Segment information required to be disclosed in accordance with Accounting Standard 17 (AS-17) relating toSegment Reporting is given in Para (c) below.

(b) (i) The Company has disclosed business segment as the primary segment. Segments have been identifiedtaking into account the type of products, the differing risks and returns and the internal reporting system.The various segments identified by the Company comprise as under:Extractions — All types of seed extractions, textured soya protein, soya flour.

Vanaspati — Vanaspati

Oils — Crude oils, refined oilsOthers — Gram, Wheat, Rice, Maize, Seeds, Coffee, Marine Products, Tuar, Peas, Barley, Fruit juices,

Fresh fruits bunches, Seedlings, Plant & Machinery (Equipment) and Soap.

By products related to each segment have been included under the respective segment.

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

61

(ii) Extraction is considered as the primary product resulting from the solvent extraction process and crude oilthe secondary product. While computing segment results, all costs related to solvent extraction process arecharged to the extraction segment and recovery on account of crude oil is credited to the said segment.Credit for recovery of crude oil is taken on the basis of average monthly market price.

(iii) The Company has disclosed geographical segments as the secondary segment. Secondary segments compriseof domestic market & exports.

(iv) Segment revenue, segment results, segment assets and segment liabilities include respective amounts directlyidentified with the segment and also an allocation on reasonable basis of amounts not directly identified.The expenses which are not directly relatable to the business segment, are shown as unallocated corporatecost. Assets and liabilities that can not be allocated between the segments are shown as unallocated corporateassets and liabilities respectively.

(c) Segment Information :

(Rs. in lacs)

Extractions Vanaspati Oils Others Unallocable Total

Revenue 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07

External Revenue

Domestic Sales 74,196.97 43,331.15 92,662.61 60,479.34 7,35,735.80 6,10,749.35 19,142.81 8,562.92 51.53 81.27 9,21,789.72 7,23,204.03

Export Sales 1,79,912.00 1,21,693.25 — — 2,117.14 4,683.65 3,682.14 15,247.67 — — 1,85,711.28 1,41,624.57

Total External Revenue 2,54,108.97 1,65,024.40 92,662.61 60,479.34 7,37,852.94 6,15,433.00 22,824.95 23,810.59 51.53 81.27 11,07,501.00 8,64,828.60

Add: Intersegment Sales 1,40,404.94 1,08,151.61 — — 59,782.66 34,930.60 — — — — 2,00,187.60 1,43,082.21

Total Segment Revenue 3,94,513.91 2,73,176.01 92,662.61 60,479.34 7,97,635.60 6,50,363.60 22,824.95 23,810.59 51.53 81.27 13,07,688.60 10,07,910.81

Segment Results beforeInterest & Tax 11,117.34 5,539.83 1,928.75 863.99 20,879.55 16,048.04 1,597.83 720.65 51.53 81.27 35,575.00 23,253.78

Less : Interest 10,200.85 7,609.53

Profit before taxation 25,374.15 15,644.25

Provision for taxationCurrent tax 5,436.00 3,670.00

Deferred tax 3,000.01 1,610.00

Fringe Benefit tax 175.00 125.00

Short provision

for tax for earlier years 840.39 169.74

Profit after tax 15,922.75 10,069.51

SEGMENT ASSETS 1,49,993.18 84,393.79 33,054.29 24,278.75 2,79,496.58 1,69,217.17 18,569.84 5,240.67 78,681.71 1,08,702.95 5,59,795.60 3,91,833.33

SEGMENT LIABILITIES 76,546.43 29,512.46 20,239.84 3,076.28 1,86,978.97 1,02,123.39 2,108.64 819.34 4,460.64 16,982.51 2,90,334.52 1,52,513.98

Total cost incurred during the

year to acquire segment assets 2,335.87 723.33 432.78 1,214.91 3,466.23 5,906.56 11,864.43 3,803.21 1,846.22 1,088.57 19,945.53 12,736.58

Segment Depreciation 2,204.21 2,035.40 907.32 856.85 3,548.14 3,208.26 309.83 91.46 503.49 369.00 7,472.99 6,560.97

Non-Cash expenses other

than depreciation 0.54 11.50 0.20 1.04 1.61 11.68 0.05 — — — 2.40 24.22

Unallocable segment assets are as follows :

Investments 8,191.69 4,245.32

Advance Income Tax including TDS 9,526.02 9,747.06

Unallocable segment liabilities are as follows :

Secured Loan 69,851.07 64,244.32

Deferred Tax liabilities 10,178.15 7,180.00

Unsecured loans 86,106.84 82,732.44

Provision for taxation 10,380.28 10,315.89

28. a) Disclosure of transactions with related parties as required by Accounting Standard 18(AS-18), relating to RelatedParty Disclosure has been given in para (b) & (c) below. Related parties as defined under clause 3 of the AccountingStandard have been identified on the basis of representation made by key managerial personnel and informationavailable with the Company.

62

b) Related party relationshipsi) Parties where control exists - Subsidiaries

Ruchi Worldwide Ltd.ii) Key Management Personnel & their relatives

Mr. Dinesh Shahra, Managing DirectorMrs. Abhadevi Shahra, wife of the Managing DirectorMs. Amrita Shahra, Daughter of the Managing DirectorMr. Sarvesh Shahra Son of the Managing DirectorMr. Kailash Shahra, Brother of the Managing DirectorMr. Suresh Shahra, Brother of the Managing DirectorMr. Santosh Shahra, Brother of the Managing DirectorMr. Ashutosh B Rao, Wholetime DirectorMr. S.P.Joshi, Wholetime Director

iii) Entities where Key Management Personnel or relatives ofKey Management Personnel have significant influenceMahadeo Shahra & SonsMahadeo Shahra Sukrut TrustNutrela Marketing Pvt. Ltd.Ruchi Realty Pvt. Ltd.Ruchi Infrastructure Ltd.Shahra Brothers Pvt. Ltd.Sunshine Oleochem Ltd. (Private Limited upto 25.03.2008)RSIL Beneficiary TrustSoyumm Marketing Pvt. Ltd.Ruchi Bio Fuels Pvt. Ltd.Ruchi Marktrade Pvt. Ltd.Shiva Foundation (Trust)

c) Related party transactions (Rs.in lacs) (Rs.in lacs)

Nature of Transaction 2007-08 2006-07

Subsidiaries Purchase of goods 50,724.20 15,975.73Sales of goods — 2,264.91Processing charges received/ receivable — 35.00Guarantees given 12,340.51 8,832.00(Outstanding as at year end)Amounts outstanding as at year endAmount receivable 206.66 —Amount payable — 1,181.54

Key Management Personnel Remuneration including perquisites 240.42 154.28and their relaties Rent paid 1.20 1.20[See Note below] Sitting fees 0.28 0.24

Entites where Purchase of goods 8,319.13 3,202.39Key Management Sales of goods 32,989.70 11,264.35Personnel or relatives of Investment in preference shares 500.00 —Key Management Others 3.20 —Personnels have Interest received/receivable (net) 99.06 —significant influence Rent paid 1.56 4.50

Lease Rent Receivable 3.93 —Donation given 11.30 32.00Storage charges Paid 804.08 879.45Processing charges received/ receivable 186.01 35.71Port hire charges 452.93 412.90Amount outstanding as at year endAmount receivable 5,807.13 2,994.63Amount payable 19.57 185.42Investment 500.00 —

Note : Remuneration paid to Managing Director (Key Management Personnel) excludes expenditure on rent freeaccommodation since rent is paid to relative of key management personnel and the same has been disclosedseparately.

63

29. Disclosures pursuant to Clause 32 of the Listing Agreements :

(a) Loans & advance in the nature of loans to subsidiary : Nil

(b) Loans & advance in the nature of loans to associates : Nil

(c) Loans & advances in the nature of loans where there is norepayment schedule or repayment beyond seven years : Nil

(d) Loans & advances in the nature of loans where there is nointerest or interest below Section 372 A of the Companies Act, 1956 : Nil

(e) Loans or advances in the nature of loans to Companies in which directors are interested :

S. No. Name of Company As at As at Maximum balance31.3.2008 31.3.2007 during the year

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

1. Ruchi Strips & Alloys Ltd. 21.26 19.03 319.24

2. Ruchi Acroni Industries Ltd. 43.96 — 43.96

(f) Investment by the loanee in the shares of the company, when the company has made a loan or advance in thenature of loan.

Name of the loanee No. of shares Amount of loan (Rs. in lacs)

Ruchi Acroni Industries Limited 13,48,475 43.96

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

30. Earnings per share :

a) Basic earnings per share :

i) Profit after tax 15,922.75 10,069.51

Less : Preference dividend including tax thereon 211.73 211.73

Profit attributable to equity shareholders 15,711.02 9,857.78

ii) Weighted average number of equity shares :

Equity shares of Rs. 2/- each (Previous year Rs. 10/- each)as at the beginning of the year 18,23,90,060 2,99,25,905

Add : Adjustment for shares issued during the yearon conversion of warrants 17,534 —

Add : Adjustment for shares allotted pursuant to schemesof amalgamation (Refer Note no. 4 of Schedule 20) — 65,52,107

18,24,07,594 3,64,78,012

Basic earning per share of Rs. 2/- each(Previous year Rs. 10/- each) (in Rs.) 8.61 27.02

b) Diluted earnings per share :

i) Profit attributable to equity shareholders[as per working in (a) (i) above] 15,711.02 9,857.78

Add : Increase in profits on account of dilutive potentialequity shares by way of lower interest (net of tax) — 63.96

15,711.02 9,921.74

ii) Weighted average number of equity shares[As per working in (a) (ii) above] 18,24,07,594 3,64,78,012

Add : Increase in shares on account of dilutive potentialequity shares. 83,92,966 81,25,000

19,08,00,560 4,46,03,012

Diluted earnings per share of Rs. 2/- each(Previous year Rs. 10/- each) (in Rs.) 8.23 22.24

64

31. The break-up of the deferred tax liability up to the year ended 31st March 2008 is as under :

Liability / (Asset) on account of Up to For the year ended Total up to31.03.2007 31.03.2008 31.03.2008

Rs. In lacs Rs. In lacs Rs. in lacs

Depreciation 7,404.05 3,078.18 10,482.23

Provision for doubtful debts & advances (26.00) (138.00) (164.00)

Disallowance under Income Tax Act, 1961 (198.00) 58.00 (140.00)

Diminution in value of investment (0.05) (0.03) (0.08)

Net deferred tax liability (Asset) 7,180.00 2,998.15 10,178.15

32. I. The Company has entered into the following derivative instruments :

a) The Company uses foreign currency/forward contracts to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and forecasted transactions. The Company does not use forward contractsfor speculative purposes.

The following are the outstanding Forward Exchange Contracts entered into by the Company as on 31st March, 2008 :

2007-2008 2006-2007

Particulars No. of US Dollar INR No. of US Dollar INRContracts Equivalent Equivalent Contracts Equivalent Equivalent

(in lacs) (in lacs) (in lacs) (in lacs)

Covers against exports 22 623.52 24,769.17 8 289.04 12,927.72

Amount receivable in foreigncurrency on account ofthe following:

Sale of goods — — — 1 38.96 1,674.75

Amount payable in foreigncurrency on accountof the following

Import of goods and services 55 3,111.12 1,24,397.62 76 14,723.86 65,564.97

Loans and interest payable 29 918.70 36,811.53 44 1,079.04 43,212.58

2007-2008 2006-2007

Particulars No. of JPY INR No. of JPY INRContracts Equivalent Equivalent Contracts Equivalent Equivalent

(in lacs) (in lacs) (in lacs) (in lacs)

Amount payable in foreigncurrency on accountof the following

Loans and interest payable 1 7,058.53 2,425.00 6 11,911.38 4,691.54

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currencyrisk on its capital account. The Company does not use these contracts for speculative purposes.

65

i) Option contracts to hedge against imports:

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 4 355.70 15,504.96

ii) Coupon Rate Swap to hedge against fluctuations in interest rate

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 2 43.20 1,902.05

iii) Currency swaps to hedge against fluctuations in changes in exchange rate and interest rate

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

1 100.00 3,932.00 1 22.96 1,000.00

iv) Options to hedge against exports

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 2 75.00 3,269.25

II. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are givenbelow:

2007-2008 2006-2007

Particulars US Dollar Equivalent INR Equivalent US Dollar Equivalent INR Equivalent(in lacs) (in lacs) (in lacs) (in lacs)

Amount receivable in foreign

currency on account of the following:

Sale of goods — — — —

Merchandise Trade 594.07 23,655.95 419.37 17,983.53

Bank Balance — — — —

Amount payable in foreigncurrency on account of the following

Import of goods and services 1,343.54 53,958.30 127.34 5,563.40

Purchase of Merchandise Exports 581.15 23,051.58 128.61 6,003.50

Loans and interest payable 21.30 855.63 36.77 1,607.31

Customer Advances — — — —

66

2007-2008 2006-2007

Particulars JPY Equivalent INR Equivalent JPY Equivalent INR Equivalent(in lacs) (in lacs) (in lacs) (in lacs)

Amount payable in foreign currencyon account of the following

Loans and interest payable 48.28 19.62 337.15 125.66

33. Previous year’s figures have been regrouped, wherever necessary.

34. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956 is enclosed in the Annexure.

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

67

CASH FLOW STATEMENT ANNEXED TO BALANCE SHEET AS AT 31ST MARCH, 2008

(Rs. in lacs) 2007-2008 (Rs. in lacs) 2006-07A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit as per profit and loss account 25,374.15 15,644.25Adjustment for :Depreciation 7,472.99 6,560.97Interest paid 16,162.51 12,283.22Miscellaneous expenditure written off 2.40 24.22Provision for wealth tax 6.67 5.49Provision for Doubtful debts/Advances 406.54 8.13Interest received (5,961.66) (4,673.69)Dividend received (51.52) (81.27)Provision for Income Tax Written Off — 3.63Provision for Leave encashment / Gratuity 50.82 —Loss on sale of assets 5.09 51.06Loss on sale of Investments 5.10 —Provision for diminution in investments 0.10 —Profit on sale of assets (226.74) (125.11)Profit on sale of investments (61.35) (7.15)

17,810.95 14,049.50

Operating profit before adjusting for thechanges in working capital 43,185.10 29,693.75Adjustments for :Decrease/(increase) in inventories (1,18,035.77) (8,796.49)Decrease/(increase) in debtors (21,392.10) (16,559.95)Decrease/(increase) in other current assetsincluding loans and advances (23,765.07) (14,407.19)Increase /(Decrease) in liabilities 1,37,695.78 5,823.80

(25,497.16) (33,939.83)

Cash flow from operations 17,687.94 (4,246.08)Taxes paid (net of refund) incl. dividend tax (6,363.81) (4,352.04)

NET CASH FROM OPERATING ACTIVITIES 11,324.13 (8,598.12)

B. CASH FLOW FROM INVESTING ACTIVITIESInterest received 5,961.67 4,673.69Purchase of fixed assets (19,945.53) (12,736.58)Sale of fixed assets 329.58 619.75Purchase of investments (1,57,978.36) (26,456.83)Sale of investments 1,54,088.14 24,547.15Dividend received 51.52 81.27

NET CASH USED IN INVESTING ACTIVITIES (17,492.98) (9,271.55)

C. CASH FLOW FROM FINANCING ACTIVITIESAllotment money and premium received 7,220.31 —Increase/(decrease) in secured/unsecured loans 8,981.15 39,340.38Dividend paid (1,056.44) (983.49)Interest paid (16,162.51) (12,283.22)Intercorporate deposits (given/refunded) (2,039.86) 61.61

NET CASH FROM FINANCING ACTIVITIES (3,057.35) 26,135.28

Net increase/(decrease) in cash and cash equivalents (A+B+C) (9,226.20) 8,265.61

Opening balance of cash and cash equivalents 67,116.51 58,850.90Closing balance of cash and cash equivalents 57,890.31 67,116.51

Increase/(decrease) in cash or cash equivalents (9,226.20) 8,265.61

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

68

BALANCE SHEET ABSTRACT AND THE COMPANY’S GENERAL BUSINESS PROFILE

I Registration details :

State code 1 1

Registration Number (CIN) L15140MH1986PLC038536

Balance Sheet Date 3 1 0 3 2 0 0 8Date Month Year

II Capital raised during the year (Rs. in lacs)

Public issue Right issue

N I L N I L

Bonus issue Private placement

N I L 7 2 0 1 . 6 9

III Position of mobilisation and deployment of funds (Rs. in lacs)

Total liabilities Total assets

2 7 6 7 9 8 . 5 1 2 7 6 7 9 8 . 5 1Sources of funds

Paid-up share capital Reserves and surplus

1 0 5 4 1 . 7 8 1 0 0 1 2 0 . 6 7

Secured loans Unsecured loans

6 9 8 5 1 . 0 7 8 6 1 0 6 . 8 4

Deferred tax liability

1 0 1 7 8 . 1 5Application of funds

Net fixed assets Investments

1 2 0 1 6 1 . 5 0 8 1 9 1 . 6 9

Net current assets Misc. expenditure

1 4 8 4 2 3 . 2 4 2 2 . 0 8

IV Performance of the company (Rs. in lacs)

Sales and other Income Total expenditure

1 1 0 7 5 0 1 . 0 0 1 0 8 2 1 2 6 . 8 5

+ - Profit / Loss before tax + - Profit / Loss after tax

+ 2 5 3 7 4 . 1 5 + 1 5 9 2 2 . 7 5

Earning per share in Rs. Dividend rate (%)

8 . 6 1 2 5

V Generic names of three principal products / services of the company (as per monetary terms)

Item code No.: (ITC Code) 1 5 0 7 9 0 0 0 . 1 0

Product description S O Y A B E A N O I L E D I B L E G R A D E

Item code No.: (ITC Code) 2 3 0 4 0 0 . 0 3

Product description M E A L O F S O Y A B E A N

Item code No.: (ITC Code) 1 5 1 8 0 0 . 0 9

Product description O T H E R V E G E T A B L E O I L S & F A T S

For and on behalf of the Board of Directors

KAILASH SHAHRAChairman

Place : Indore R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRADate : August 30, 2008 Company Secretary Vice President (Corporate Accounts) Managing Director

69

ConsolidatedConsolidatedConsolidatedConsolidatedConsolidated

AccountsAccountsAccountsAccountsAccountsAUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS OF RUCHI SOYA INDUSTRIES LIMITED,ITS SUBSIDIARY, ITS ASSOCIATE COMPANY AND A TRUST WHERE THE COMPANY IS A BENEFICIARY

TO THE BOARD OF DIRECTORS OF RUCHI SOYA INDUSTRIES LIMITED

1. We have examined the attached Consolidated Balance Sheet of RUCHI SOYA INDUSTRIES LIMITED (the Company),its subsidiary company, its associate company and a Trust where the Company is a beneficiary as at 31st March2008, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended onthat date annexed thereto, in which are incorporated the accounts of the subsidiary company, its associate companyand the Trust where the Company is a beneficiary audited by other auditors. These financial statements are theresponsibility of the Company management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

2. We have conducted our audit in accordance with generally accepted auditing standards in India. These standardsrequire that we plan and perform the audit to obtain reasonable assurance whether the financial statements areprepared in all material respects, in accordance with an identified financial reporting framework and are free ofmaterial mis-statement. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statements. We believe that our audit provides areasonable basis for our opinion.

3. We did not audit the financial statements of the subsidiary company, its associate company and the Trust where the Companyis a beneficiary, whose financial statements reflect total assets (net) of Rs. 1,867.70 lacs as at 31st March, 2008 (Previous yearRs. 1,520.35 lacs) and total revenues of Rs. 660.27 lacs for the year ended on that date (Previous year Rs. 297.36 lacs). Thesefinancial statements have been audited by other auditors whose reports have been furnished to us and our opinion, in so faras it relates to the amounts included in respect of the subsidiary company, its associate company and the Trust where theCompany is a beneficiary is based solely on the report of the other auditors.

4. We report that the consolidated financial statements have been prepared by the Company in accordance with therequirements of Accounting Standard 21 (AS-21) and Accounting Standard 23 (AS-23) issued by the Institute of CharteredAccountants of India and on the basis of the separate audited financial statements of the Company, its subsidiarycompany, its associate company and the trust included in the consolidated financial statements.

5. On the basis of the information and explanations given to us and on the consideration of the separate audit reports onindividual audited financial statements of the Company, its subsidiary company, its associate company and the Trustwhere the Company is a beneficiary, we are of the opinion that the said consolidated financial statements give a trueand fair view in conformity with the accounting principles generally accepted:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Company, its subsidiary company, itsassociate company and the Trust where the Company is a beneficiary as at 31st March, 2008;

(b) in the case of the Consolidated Profit and Loss Account, of the consolidated results of operations of the Company,its subsidiary company, its associate company and the Trust where the Company is a beneficiary for the yearended on that date; and

(c) in the case of Consolidated Cash Flow Statement, of the cash flows of the Company, its subsidiary company, itsassociate company and the Trust where the Company is a beneficiary for the year ended on that date.

For P.D.Kunte & Co. (Regd.)Chartered Accountants

D. P. SaprePlace : Indore PartnerDate : August 30, 2008 Membership No. 40740

70

Consolidated Balance SheetConsolidated Balance SheetConsolidated Balance SheetConsolidated Balance SheetConsolidated Balance SheetAS AS AS AS AS AAAAAT 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008

Sch. 2007-08 2006-07No. (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

I SOURCES OF FUNDS

1 Shareholders' Funds

a) Capital 1 10,541.78 8,171.47

b) Reserves & Surplus 2 1,01,993.30 82,194.11

1,12,535.08 90,365.582 Loan Funds

a) Secured Loans 3 75,876.57 66,112.49

b) Unsecured Loans 4 1,23,108.47 94,801.70

1,98,985.04 1,60,914.193 Deferred Tax Liability 10,177.67 7,179.87

3,21,697.79 2,58,459.64

II APPLICATION OF FUNDS

1 Fixed Assets 5

a) Gross Block 1,50,264.58 1,30,801.36

b) Less: Depreciation 32,435.17 25,011.74

c) Net Block 1,17,829.41 1,05,789.62

d) Capital Work in Progress 2,337.87 2,013.18

1,20,167.28 1,07,802.80

2 Investments 6 7,195.02 3,251.25

3 Current Assets, Loans & Advances

a) Inventories 7 2,21,858.91 96,862.99

b) Sundry Debtors 8 1,17,984.78 95,491.41

c) Cash & Bank 9 95,947.27 79,913.92

d) Other Current Assets 10 1,072.39 1,117.97

e) Loans & Advances 11 76,832.90 48,465.21

5,13,696.25 3,21,851.50

Less: Current Liabilities & Provisions

a) Current Liabilities 12 3,05,917.07 1,61,675.61

b) Provisions 13 12,250.51 11,900.50

3,18,167.58 1,73,576.11

Net Current Assets 1,95,528.67 1,48,275.39

4 Minority Interest (1,220.19) (900.44)

5 Miscellaneous Expenditure 14 27.01 30.64

3,21,697.79 2,58,459.64

NOTES TO THE ACCOUNTS 20

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

71

Consolidated PrConsolidated PrConsolidated PrConsolidated PrConsolidated Profit & Loss ofit & Loss ofit & Loss ofit & Loss ofit & Loss AccountAccountAccountAccountAccountFOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008

Sch 2007-2008 2006-2007No. (Rs. in lacs) (Rs. in lacs)

INCOME

Sales and Other Income 15 11,72,639.34 9,06,950.77

Increase in stock 16 35,427.63 12,140.59

12,08,066.97 9,19,091.36

EXPENSES

Purchases 3,02,016.51 3,02,406.67

Materials Consumed 17 7,77,044.62 5,19,404.22

Expenses 18 85,157.8366,936.22

Interest (Net) 19 9,981.51 7,672.03

Depreciation 5 7,475.16 6,563.11

11,81,675.63 9,02,982.25

Profit before taxation 26,391.34 16,109.11

Provision for taxation — Current tax 5,781.80 3,830.00

— Deferred tax 2,999.58 1,609.59

— Fringe benefit tax 175.60 125.35

Short provision for tax for earlier years 851.34 177.30

Profit after taxation 16,583.02 10,366.87

Less : Minority Interest 313.78 0.44

Less : Capital Reserve / Goodwill 0.50 1,526.53

Add : Balance brought forward from previous year 17,005.02 11,948.57

Profit available for appropriation 33,273.76 20,788.47

APPROPRIATIONS

General Reserve 2,500.00 2,500.00

Debenture Redemption Reserve 18.20 43.75

Proposed Dividend — Preference 180.97 180.97

— Equity 943.95 875.47

Tax on Dividend 191.18 183.26

Balance carried to Balance Sheet 29,439.46 17,005.02

33,273.76 20,788.47

Earning per share of Rs. 2/- each (Previous year Rs. 10/- each)in Rs. (See Note no. 20 of Schedule 20)

Basic 8.98 27.84

Diluted 8.58 22.91

NOTES TO THE ACCOUNTS 20

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

72

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

SCHEDULE 1 : SHARE CAPITAL(See Note nos. 7 & 8 of Schedule 20)Authorised27,50,00,000 Equity Shares of Rs. 2/- each 5,500.00 5,500.00(Previous year 5,50,00,000 Equity Shares of Rs.10/- each)65,00,000 Cumulative Redeemable Preference Shares(Previous year 65,00,000 Preference Shares) of Rs.100/- each 6,500.00 6,500.00

12,000.00 12,000.00

Issued, Subscribed and Paid-upi) 18,87,90,060 Equity Shares of Rs.2/- each (Previous

year 3,64,78,012 Equity Shares of Rs.10/- each)(See Note no. 1 below) 3,775.80 3,647.80Less : Calls unpaid — 0.62

3,775.80 3,647.18ii) 45,24,285 4% Cumulative Redeemable Preference

Shares of Rs. 100/- each (See Note no. 2 below) 4,524.29 4,524.29

iii) Warrant application money 2,241.69 —

10,541.78 8,171.47

Notes :

1 During the year, the Company has sub-divided its each equity share of Rs.10/- into 5 equity shares of Rs.2/- each.

2 Out of 45,24,285 preference shares, 30,19,186 preference shares were allotted on 31st March, 2004 & are redeemable at par in three annual instalmentsat the end of 8th, 9th & 10th year from the date of allotment with a put and call option at the end of each year i.e. 1st & 2nd instalment of Rs.33/- eachper preference share on completion of 96 months & 108 months respectively & 3rd instalment of Rs.34/- per preference share on completion of 120months from date of allotment. The balance 15,05,099 preference shares were allotted on 30th March, 2005 and are redeemable at par in three annualinstalments with a put and call option at the end of 8th, 9th & 10th year from the date of allotment i.e. 1st & 2nd instalments of Rs.33/- each perpreference share on completion of 96 months & 108 months respectively and 3rd instalment of Rs.34/- per preference share on completion of 120months from date of allotment.

SCHEDULE 2 : RESERVES AND SURPLUS2007-2008 2006-2007

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

a) Capital Reserve 1,526.53 1,526.53b) Securities Premium Account

As per last balance sheet 32,469.30 32,469.30Add : Addition during the year 4,850.01 —

37,319.31 32,469.30c) Debenture Redemption Reserve

As per last balance sheet 156.80 113.05Add : Addition during the year 18.20 43.75

175.00 156.80d) Capital Redemption Reserve

As per last balance sheet 3,400.00 3,400.00e) General Reserve

As per last balance sheet 27,636.46 25,136.46Less : Additional liability pursuant to AS-15 (Revised) 3.60 —Add : Addition during the year 2,500.14 2,500.00

30,133.00 27,636.46f) Profit and Loss Account 29,439.46 17,005.02

1,01,993.30 82,194.11

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008

73

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 3 : SECURED LOANS

a) Secured Redeemable Non-convertible Debentures3,50,000 Debentures of Rs.100/- each privately 233.33 350.00placed with Financial Institution (See Note no. 1 below)

b) Loans from Financial Institutions/Banks/Others 57,839.46 44,287.34(See Note nos. 2, 3 & 4 below)

c) Borrowings from Banks (Cash/Packing Credit/Working Capital 17,715.97 21,366.96Demand Loans) (See Note nos. 3 & 4 below)

d) Other Loans for specific Vehicles (Exclusive charge) 87.81 108.19(See Note no. 5 below)

75,876.57 66,112.49

Notes :

1 9.75% Secured Redeemable Non-Convertible Debentures of Rs.100/- each privately placed with Financial Institution are redeemablein three equal instalments at the end of 4th, 5th & 6th year from the date of allotment, i.e. 19th September, 2003.

The above debentures are secured by (a) first charge by way of an equitable mortgage of all immovable properties of the Companyincluding plant & machinery and stores & spares of the Company, wherever situated and (b) a first charge by way of hypothecationof all movable properties, both present & future (save and except book debts) of the Company.

The first charge by way of equitable mortgage in favour of debentureholders and some lenders rank pari passu each other and issubject to charge on specified properties referred to in Note no. 2.

Amount repayable within 12 months Rs.116.67 lacs (Previous year Rs. 116.67 lacs).

2 (i) Loans from financial institutions, banks and others (other than those vested on amalgamation) are secured by (a) a firstcharge by way of an equitable mortgage over all the immovable properties of the Company at specific locations, (b) a firstcharge by way of hypothecation of movable properties situated at the respective locations and (c) Personal Guarantee ofthe Managing Director.

(ii) Loans from financial institutions and banks vested on amalgamation are secured by (a) a first charge by way of an equitablemortgage over all the immovable properties of the transferor companies at specific locations [including a charge over theassets of a company from whom the Company acquired SVF business by way of slump sale (Refer Note no. 5 of Schedule20)], (b) a second charge by way of equitable mortgage of all the immovable properties at specific locations, (c) a firstcharge by way of hypothecation of the movable properties at the respective locations and (d) Personal Guarantee ofshareholder(s)/promoter(s) in certain cases.

iii) The above charge of various lenders at specified locations referred to in (i) and (ii) above rank pari passu inter se the lendersat each location.

Amount repayable within 12 months Rs. 11,916.39 lacs (Previous year Rs. 28,038.38 lacs).

3 (i) The borrowings availed from consortium banks (other than those vested on amalgamation) are secured/to be secured by(a) a first charge by way of hypothecation of stocks and other current assets ranking pari passu, (b) a charge by way of hypothecation/ equitable mortgage of movable/immovable properties in favour of consortium banks ranking second and subservient to thecharges specified in Note nos.1 and 2 (i) ranking pari passu and (c) personal guarantee of two directors of the Company.

(ii) The borrowings availed from banks outside consortium are secured /to be secured by (a) exclusive stocks, book debts and othercurrent assets pertaining to the facilities granted by them and (b) personal guarantee of the Managing Director of the Company.

(iii) The borrowings availed from consortium banks (vested on amalgamation) are secured/to be secured by (a) a first charge byway of hypothecation of stocks and other current assets, (b) a charge by way of hypothecation / equitable mortgage ofmovable/immovable properties on first charge basis ranking pari passu in certain cases and second charge in certain cases[including a charge over the assets of a company from whom the Company acquired SVF business by way of slump sale(Refer Note no. 5 of Schedule 20)] and (c) Personal Guarantee of shareholder(s)/promoter(s) of the Company. The secondcharge referred to in (b) is subservient to the charge specified in Note no.2 (ii).

iv) Borrowings of the subsidiary company are secured by pari-passu charge by way of hypothecation of stocks and book debtsof the subsidiary company, personal guaranty of its director and corporate guarantee of the holding company.

Amount repayable within 12 months Rs. 17,715.97 lacs (Previous year Rs. 19,498.79 lacs).

4 In terms of the Schemes, the loans vested on amalgamation are subject to existing charges/hypothecation/mortgage subsistingthereon and shall neither extend to the assets of the Company nor operate to enlarge the securities for the said liabilities of thetransferor companies.

5 These loans are secured by hypothecation of vehicles purchased out of the said loans.

Amount repayable within 12 months Rs. 43.01 lacs (Previous year Rs. 81.44 lacs).

74

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 4 : UNSECURED LOANSShort term advances

From Banks / Financial Institutions (See Note no. 13 of Schedule 20) 1,21,850.12 93,667.47

Other Loans :

Deferred Sales Tax Liability 1,258.35 1,134.23

1,23,108.47 94,801.70

SCHEDULE 5 : FIXED ASSETS (Rs. in lacs)

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

As on Additions Deduction As on Upto For the year Adjustment Upto As on As on1.4.2007 31.3.2008 31.3.2007 31.3.2008 31.3.2008 31.3.2007

FREE HOLD LAND 12,470.52 650.13 16.43 13,104.22 — — — — 13,104.22 12,470.52

LEASE HOLD LAND 1,002.50 197.26 — 1,199.76 410.17 77.34 — 487.51 712.25 592.33

BUILDINGS 27,327.49 1,803.75 — 29,131.24 2,849.39 846.26 — 3,695.65 25,435.59 24,478.10

PLANT & MACHINERY 86,720.64 16,019.72 89.10 1,02,651.26 20,381.26 6,154.84 29.89 26,506.21 76,145.05 66,339.38

FURNITURE & FIXTURES 628.14 214.67 — 842.81 224.06 49.99 — 274.05 568.76 404.08

VEHICLES 1,162.28 235.81 50.89 1,347.20 386.74 117.01 19.62 484.13 863.07 775.54

OFFICE EQUIPMENT 1,151.91 284.94 3.22 1,433.63 693.73 153.82 2.22 845.33 588.30 458.18

SOFTWARE 301.88 216.58 — 518.46 33.69 72.90 — 106.59 411.87 268.19

TRADE MARKS 36.00 — — 36.00 32.70 3.00 — 35.70 0.30 3.30

CAPITAL WORK IN PROGRESS 2,013.18 2,273.62 1,948.93 2,337.87 — — — — 2,337.87 2,013.18

TOTAL 1,32,814.54 21,896.48 2,108.57 1,52,602.45 25,011.74 7,475.16 51.73 32,435.17 1,20,167.28 1,07,802.80

PREVIOUS YEAR 1,20,672.60 15,142.33 3,000.39 1,32,814.54 18,497.78 6,563.11 49.15 25,011.74 1,07,802.80

Notes :

1. Buildings include Rs. 0.02 lac (Previous year Rs. 0.02 lac) being cost of Shares in Co-operative Societies. Title deeds in respect of shares amounting to Rs.500/- are in the processof transfer.

2. Execution/registration of lease deeds in respect of certain lands acquired on lease amounting to Rs.147.65 lacs (Previous year Rs. 26.60 lacs) are pending.

3. Lease hold land includes 30 acres of land taken on lease from The Karnataka Industrial Area Development Board (KIADB) for which the primary lease period of 6 years of landhas expired. The same will be converted to a sale subject to compliance with the terms of allotment.

4. Refer Note no. 3(vii)(b), 12 and 15 of Schedule 20.

75

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 6 : INVESTMENTS (Other than trade investment)LONG TERM INVESTMENTS (At cost)A) SHARES

a) Quoted(Other than in subsidiary companies)i) 17,75,000 Equity Shares (Previous year 17,75,000 shares) of Rs.10/- each 185.00 185.00

fully paid up in Ruchi Strips & Alloys Ltd.ii) 8,83,500 Equity Shares (Previous year 8,83,500 shares) of Rs.10/- each 264.87 264.87

fully paid up in National Steel & Agro Industries Ltd.iii) 4,00,000 Equity Shares (Previous year 4,00,000 shares) of Rs.10/- each 100.00 100.00

fully paid up in Anik Industries Limitediv) 1,19,300 Equity Shares (Previous year 1,19,300 shares) of Rs.10/- each 11.93 11.93

fully paid up in Sarthak Global Limitedv) 7,014 Equity Shares (Previous year 7,014 shares) of Rs.10/- each 1.89 1.89

fully paid up in Dena Bankvi) 1,887 Equity Shares (Previous year 1,887 shares) of Rs.10/- each 7.41 7.41

fully paid up in Punjab National Bankvii) 35,000 Equity Shares (Previous year 35,000 shares) of Rs.10/- each 3.82 3.82

fully paid up in Sharadraj Tradelink Ltd.viii) 1,80,000 Equity Shares (Previous year 1,80,000 shares) of Rs. 2/- each 17.38 17.38

fully paid up in Blue Chip India Ltd.ix) 21,500 Equity Shares (Previous year 21,500 shares) of Rs.10/- each 11.38 11.38

fully paid up in Hereld Commerce Limitedx) 50,00,000 Equity Shares (Previous year 50,00,000 shares) of Re.1/- 1,591.43 1,591.43

each fully paid up in Ruchi Infrastructure Limitedxi) 159 Equity Shares (Previous year Nil) of Rs.10/- each 0.16 —

fully paid up in Central Bank of IndiaAggregate amount of quoted investments 2,195.27 2,195.11

Aggregate market value of quoted investmentsRs. 2,096.22 lacs (Previous year Rs. 2,123.04 lacs)

b) Right title & interest in Ruchi Soya Industries Ltd. Beneficiary Trust 936.97 936.97(Refer Note no. 5 of Schedule 20)

c) Unquotedi) 25,000 Equity Shares (Previous year 25,000 shares) 2.50 2.50

of Rs.10/- each fully paid-up in Ruchi Infotech Ltd.ii) 6,00,000 Equity Shares (Previous year 6,00,000 shares) 60.00 60.00

of Rs.10/- each fully paid-up in Ruchi Acroni Industries Ltd.iii) 35,000 Equity Shares (Previous year 90,000 shares) 3.50 9.00

of Rs.10/- each fully paid-up in E-Ruchi Marketing (P) Ltd.iv) Nil Equity Shares (Previous year 3,930 shares) of Rs.10/- each — 0.39

fully paid up in GFL Energy Pvt. Ltd.v) Nil Equity Shares (Previous year 60,000 shares) of Rs.10/- each — 6.00

fully paid up in Southern Port & Terminals Pvt. Ltd.vi) 5,00,000 6% Redeemable Cumulative Preference Shares (Previous 500.00 —

year Nil) of Rs.100/- each fully paid up in Sunshine Oleochem Ltd.

vii) Share application money pending allotment 3,450.00 —(towards preference shares in Ruchi Realty Holdings Pvt. Ltd.)

B. GOVERNMENT SECURITIES :National Saving Certificates/Kisan Vikas Patra(deposited with government authorities) 6.93 6.33

Aggregate amount of unquoted investments 4,022.93 84.22

TOTAL LONG TERM INVESTMENTS (I) 7,155.17 3,216.30

76

SCHEDULE 7 : INVENTORIES(As valued and certified by the Management)Stock-in-trade (At lower of cost and net realisable value except

realisable by-products which are valued at net realisable value)a) Raw Materials (including packing material) 1,33,025.34 44,756.54b) Work-in-process 3,063.28 2,032.00c) Finished goods 79,593.24 45,540.50d) Realisable by-products 2,060.38 1,716.77e) Consumables, Stores & Spares 4,116.67 2,817.18

2,21,858.91 96,862.99

SCHEDULE 8 : SUNDRY DEBTORS(Unsecured)

Debts outstanding for period exceeding six monthsConsidered good 5,238.95 4,862.57Considered doubtful 329.85 16.17

5,568.80 4,878.74Other debts (considered good) 1,12,745.83 90,628.84

1,18,314.63 95,507.58

Less : Provision for doubtful debts 329.85 16.17

1,17,984.78 95,491.41

SCHEDULE 9 : CASH AND BANK BALANCECash on hand 340.26 446.44Bank Balances with Scheduled Banksi) In Current Accounts 8,553.99 4,871.17ii) In Deposit Accounts (Refer Note no. 13 of Schedule 20) 87,052.89 74,596.13Bank Balances with Non-Scheduled Banks (Refer Note no. 14 of Schedule 20)i) In Current Accounts — 0.05ii) In Deposit Accounts 0.11 0.11Post Office Saving Bank [Maximum balance at any time 0.02 0.02

during the year Rs.0.02 lac (Previous year Rs.0.02 lac)]95,947.27 79,913.92

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

II. CURRENT INVESTMENTS (At lower of Cost & market value)MUTUAL FUNDS (Quoted)

i) 1,00,000 units (Previous year 1,00,000 units) of SBIMagmum Multicap Fund of Rs.10/- each 10.00 10.00

ii) 2,50,000 units (Previous year 2,50,000 unit) of SBIOne India Fund of Rs.10/- each 25.00 25.00

iii) 50,000 units (Previous year Nil unit) of SBIInfrastructure Fund-I of Rs.10/- each 5.00 0.10

iv) 1,000 units (Previous year 1,000 units) of PNBPrincipal Junior Cap Fund of Rs.10/- each 0.10 —

40.10 35.10

Less : Provision for diminution in value of investments 0.25 0.15

TOTAL : (II) 39.85 34.95

Aggregate market value of current investments

Rs 46.86 lacs (Previous year Rs.39.61 lacs)

TOTAL : (I+II) 7,195.02 3,251.25

Note: The following investments were purchased and sold during the year :Name of Securities No. of Units Cost (Rs. in lacs)

SBI Premier Liquid Fund 123,69,18,421.65 1,54,020.00Principal Cash Management Fund 1,00,02,837.42 1,000.00

77

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 10 : OTHER CURRENT ASSETSInterest accrued

On Investments 4.31 3.74

On Fixed Deposits with Banks 984.01 1,100.55

On Intercorporate & Other deposits 84.07 13.68

1,072.39 1,117.97

SCHEDULE 11 : LOANS AND ADVANCES(Unsecured & considered good)

Intercorporate deposits 2,396.91 357.04

Other deposits 2,501.40 1,736.33

Advance for capital expenditure 3,164.91 1,819.42

Other advances recoverable in cash or in kind 58,771.07 34,299.90or for value to be received [including (a) Rs.1.13 lacs (Previous yearRs. 2.12 lacs) recoverable from Directors/Officers of the Company(b) due from subsidiary Rs. 206.66 lacs (Previous year Rs. Nil)]

Advance Income Tax including tax deducted at source 10,150.69 10,311.74

76,984.98 48,524.43Less : Provision for doubtful advances 152.08 59.22

76,832.90 48,465.21

SCHEDULE 12 : CURRENT LIABILITIES

Sundry Creditors [including Rs. Nil (Previous year 2,81,417.59 1,50,413.56Rs.1,181.54 lacs) due to subsidiary company](Refer Note no. 6 of Schedule 20)

Agency & other deposits 838.31 624.46

Interest accrued but not due 484.32 626.76

Customers' advances 20,683.89 9,193.51

Other liabilities 2,492.96 817.32

3,05,917.07 1,61,675.61

SCHEDULE 13 : PROVISIONS

Taxation 10,986.51 10,762.72

Proposed Dividend 1,124.92 1,056.44

Gratuity 29.57 —

Leave encashment 109.51 81.34

12,250.51 11,900.50

SCHEDULE 14 : MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

Share Issue Expenses 30.64 56.39

Less : Adjusted/Written off 3.63 25.75

27.01 30.64

78

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE YEARENDED ON 31ST MARCH, 2008 2007-08 2006-07

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)SCHEDULE 15 : SALES AND OTHER INCOMESales 11,55,619.29 8,96,976.89Less : Excise duty 2,123.95 1,588.52

11,53,495.34 8,95,388.37

Scrap & Other Sales 1,926.60 1,715.74Less : Excise duty 14.84 0.24

1,911.76 1,715.50Export Incentive 6,457.50 164.53VAT/Excise Refund/Remission 5,494.49 4,594.06Processing charges(Gross) [TDS Rs. 12.83 lacs (Previous year Rs.17.14 lacs)] 546.83 507.51Service charges 12.07 21.43Income from power generation (including carbon credits) 874.93 226.10Other operating income 140.52 2,322.15

11,68,933.44 9,04,939.65

Insurance claims received 353.90 350.32Commission, discount & rebates 87.24 26.00Dividend 51.52 38.08Profit on sale of investments 61.35 7.15Profit on sale of Assets 226.74 125.11Lease Rent (Gross) [TDS Rs 3.61 lacs (Previous year Rs.3.58 lacs)] 15.93 15.93Other Miscellaneous Income (See Note no.10 of Schedule 20) 2,909.22 1,448.53

3,705.90 2,011.22

11,72,639.34 9,06,950.77

SCHEDULE 16: INCREASE/(DECREASE) IN STOCKSa) Finished goods

Opening Stock 47,257.27 34,852.92Closing Stock 81,653.62 47,257.27

34,396.35 12,404.35

b) Semi-finished goodsOpening Stock 2,032.00 2,295.76Closing Stock 3,063.28 2,032.00

1,031.28 (263.76)

35,427.63 12,140.59

SCHEDULE 17 : MATERIAL CONSUMEDa) Raw Material

Opening Stock 40,906.36 44,800.60Add : Purchases 8,41,502.28 4,99,055.14

8,82,408.64 5,43,855.74Less : Closing Stock 1,27,467.26 40,906.36

7,54,941.38 5,02,949.38

b) Packing MaterialOpening Stock 3,850.18 3,379.19Add : Purchases 23,811.14 16,925.83

27,661.32 20,305.02Less : Closing Stock 5,558.08 3,850.18

22,103.24 16,454.84

7,77,044.62 5,19,404.22

79

2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

SCHEDULE 18 : EXPENSESProcessing Charges 715.10 131.91Power & Fuel (net of recoveries) 15,584.59 13,340.94Manufacturing Expenses 3,138.43 2,231.94Consumables 5,932.88 5,700.20Repairs - Plant & Machinery 3,681.91 3,576.28Repairs - Buildings 705.14 99.79Repairs - Others 522.03 414.91Salary, Wages and Bonus 3,479.97 2,718.36Contribution to Provident and Other Funds 262.81 145.04Workmen & Staff Welfare expenses 225.83 158.22Insurance (net of recoveries) 1,242.86 1,119.65Rent 2,441.76 1,792.43Rates & Taxes 1,548.20 971.52Freight & forwarding (net of recoveries) 24,839.65 17,400.20Export expenses 3,993.87 3,423.34Commission and rebate 3,074.98 2,139.64Advertisement & sales promotion 950.10 773.71Donation 18.13 37.78Travelling & Conveyance 1,127.29 864.59

[including Rs. 59.05 lacs (Previous year Rs. 57.44 lacs) for Directors]Provision / write-off of doubtful/ bad debts and advances 571.35 70.64Provision for Diminution in value of Investment 0.10 0.15Miscellaneous expenses written off 3.63 25.75Loss on Sales/Fire of Fixed Assets 5.09 51.06Loss on sale of investments 5.10 —Exchange difference (Net) 2,301.75 1,833.62Bank Commission & Charges 2,720.93 2,261.14Other expenses (Net of recoveries) (See Note no. 11 of Schedule 20) 6,064.35 5,653.41

85,157.83 66,936.22

SCHEDULE 19 : INTEREST (Net)Interest— Debenture & other fixed loans 4,073.10 2,835.32— Others 13,068.22 10,217.18

17,141.32 13,052.50Less : Interest received

[Tax deducted at source Rs. 1,322.57 lacs (Previous year Rs. 991.22 lacs)] 7,159.81 5,380.47

9,981.51 7,672.03

80

SCHEDULE ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31STMARCH 2008 AND CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON THAT DATE

SCHEDULE NO. 20 NOTES TO THE ACCOUNTS

1. BASIS OF CONSOLIDATION

a. The consolidated financial statements relate to Ruchi Soya Industries Ltd. (the Company) and its subsidiary andassociates as under

Name of the subsidiary / associate Percentage of shareholding / profit share / Beneficial Interest

As at 31.03.2008 As at 31.03.2007

Ruchi Worldwide Limited (Subsidiary) 52.48 52.48

Ruchi Soya Industries Ltd. Beneficiary Trust 100.00 100.00(Trust where Company is the sole beneficiary)

RIFL Energy Private Limited (Associate) 26.00 —

b. The consolidated financial statements have been prepared in accordance with Accounting Standard 21 (AS-21) andAccounting Standard 23 (AS-23) issued by the Institute of Chartered Accountants of India on the following basis :

i) The financial statements of the Company and its subsidiaries / associate have been combined on a line to linebasis by adding together like items of assets, liabilities, income and expenses.

ii) Intragroup balances, intragroup transactions and resulting unrealised profits / losses have been eliminated infull.

iii) The excess of / shortfall in cost to the Company of its investment in the subsidiaries/associate over the Company’sportion of equity of the subsidiary as at the date of investment is recognised in the consolidated financialstatements as goodwill / capital reserve. The resultant goodwill, if any, is charged to the profit and loss account.

iv) Minority interest in the net assets of subsidiaries has been separately disclosed in the consolidated financialstatements. Minority interest in income for the year has been separately disclosed in the profit and loss account.

2. SIGNIFICANT ACCOUNTING POLICIES

a) FIXED ASSETS:

Fixed assets, other than assets given on lease, are valued at cost/revalued amount less depreciation. Cost of fixedassets is arrived at after including therein attributable interest and expenses for bringing the respective assets toworking condition and reducing there from Cenvat credit received/ receivable, if any. Fixed assets acquired underHire Purchase Scheme are valued at cash price less depreciation. Fixed assets vested on amalgamation are stated attheir fair value based on report of approved valuers less depreciation.

b) DEPRECIATION:

Depreciation is provided on straight-line basis at the rates prescribed in Schedule XIV to the Companies Act, 1956.Depreciation has been provided on pro-rata basis with reference to the month of addition/ installation/ disposal ofassets.

c) INVENTORIES:

Inventories, other than realisable by-products, are valued at lower of cost and net realisable value. The cost isarrived at on First –in-First out (FIFO) basis. The cost of manufactured products includes therein direct costs, productionoverheads and depreciation. Realisable by products are valued at net realisable value. Cost of trading items includestherein cost of purchase & other costs of acquisition attributable thereto.

d) RETIREMENT BENEFITS:

(a) Short term employee benefits are recognized as expense in the profit and loss account of the year in whichservice is rendered.

(b) Contribution to defined contribution schemes such as Provident Fund, Family Pension Fund and SuperannuationFund are charged to the profit and loss account.

(c) The defined benefit obligations in respect of gratuity and leave encashment are recognised on the basis ofvaluation done by an independent actuary applying Project Unit Credit Method. The actuarial gain/loss arisingduring the year are recognized in the profit and loss account of the year.

e) INVESTMENTS:

Long-term investments are valued at cost. No provision is made for diminution in the value of investments where inthe opinion of the Board of Directors such diminution is temporary, while the investments are of long-term nature.Current investments are valued at lower of cost and fair value.

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f) EXPENSES INCURRED FOR ISSUE OF SHARES, DEBENTURES AND OTHER MISCELLANEOUS EXPENSES:

Preliminary expenses, pre-operative expenses, share issue expenses incurred prior to 1st April 2003 are written offover a period of 10 years. Share issue expenses incurred after 1st April 2003 are either charged to profit & lossaccount or securities premium account. Expenses pertaining to issue of debentures are charged to profit & lossaccount in the year in which they are incurred.

g) PREMIUM ON REDEMPTION OF DEBENTURES:

Premium payable, if any, on redemption of debentures is spread over the life of debentures.

h) FOREIGN EXCHANGE TRANSACTIONS:

Transactions in foreign currency are accounted at the exchange spot rate prevailing on the date of the transaction.Year end receivables and payables are translated at year end rate of exchange except in case of transactions coveredby forward exchange contracts which are translated at the contracted rate. The difference between the spot rate atthe date of transaction & contracted rate is spread over the life of the contract. The difference on account of fluctuationin the rate of exchange is recognised in the profit and loss account. In case of sales and purchases the same areincluded under the respective heads.

i) BORROWING COSTS:

Interest and other costs in connection with the borrowing of the funds to the extent related/ attributed to the acquisition/construction of qualifying fixed assets are capitalised up to the date when such assets are ready for their intendeduse. Other borrowing costs are charged to the profit & loss account.

j) DEFERRED TAX:

Deferred tax is accounted for by computing the tax effect of timing differences which arise in a year and reverse insubsequent periods.

k) IMPAIRMENT OF ASSETS:

An impairment loss is recognized in the profit & loss account whenever the carrying amount of an asset or a cashgenerating unit exceeds its recoverable amount. The recoverable amount is estimated as the higher of its net sellingprice and its value in use. The carrying amounts are reviewed at each balance sheet date to determine whether thereis any impairment.

l) EXPORT INCENTIVES:

Export incentives, to which the Company is entitled to based on exports during the year, are recognised as incomein the year of exports.

m) INTANGIBLE ASSETS:

Intangible assets are measured at cost and amortised over a period for which the assets’ economic benefits areexpected to accrue.

Expenditure incurred on software acquired is amortised over a period of five years from the date the expenditure isincurred.

3. Contingent liabilities not provided for

2007-2008 2006-2007

(Rs. in lacs) (Rs. in lacs)

i) Claims not acknowledged as debts 105.00 120.27

ii) Outstanding bank guarantees 2,453.49 1,139.91

iii) Income tax/ Sales tax/ Excise/ Octroi demands disputed 13,089.98 9,675.45

iv) Bills discounted 25,090.19 19,346.62

v) Estimated amount of contracts remaining to be executed on capital account.(Net of advances) 5,538.08 3,868.83

vi) Custom duty liability which may arise if obligation for exports is not fulfilledagainst import of plant and machinery — 233.40

vii) In addition to the above,

a) In the earlier year, in respect of the subsidiary company, the Customs authorities have levied custom duty ofRs.220.00 lacs (Previous year Rs. 220.00 lacs) which the said subsidiary Company has disputed before theChennai High Court. Pending the decision, the High Court has granted interim stay in the matter. No provisionhas been made in respect of the demand in view of the above. The said subsidiary Company is confident thatthe matter will be decided in its favour.

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b) In the preceding year, vide agreements dated 24th November 2006 and 18th January 2007, the Parent Companyhas acquired land, buildings and plant and machinery at Baran ( Rajasthan) and Guna (M.P.) respectively. Theassets acquired are subject to charges created by the seller in favour of one of their consortium bankers. Thesaid consortium banker has not accepted the Scheme of Arrangement approved in the case of seller by theHon’ble Madhya Pradesh High Court and has filed a Special Leave Petition before the Hon’ble Supreme Court,which is pending. The seller has set aside funds by way of a fixed deposit in respect of amount due to the saidConsortium bank. Pending the disposal of the Special Leave Petition by the Supreme Court, the registration ofthe said land in favour of the Company is pending. The additional liability, if any, that may arise on account ofthe above, however, cannot be ascertained at this stage.

4. Managerial Remuneration under section 198 of the Companies Act, 1956 :

(i) Remuneration paid or provided to the Chairman.2007-08 2006-2007

(Rs. in lacs) (Rs. in lacs)

Commission 50.00 19.62

(ii) Remuneration paid or provided to the Managing Director :

(a) Salary 91.40 72.53

(b) Perquisites in cash or in kind 28.29 19.67

(iii) Remuneration paid to or provided to Whole time Directors :

(a) Salary and allowances 17.77 10.49

(b) Perquisites in cash or in kind 4.68 3.32

(c) Contribution to Provident & Other Fund 0.85 0.60

(1) The above does not include reimbursement of expenses incurred for the Company.

(2) The amount shown above includes remuneration amounting to Rs. 3.07 lacs (Previous year Rs. 0.67 lac) whichis subject to approval of shareholders.

5. In an earlier year, the High Court of judicature at Bombay and Delhi had approved three schemes under Sections 391 to394 of the Companies Act, 1956 providing for (a) Amalgamation of General Foods Ltd., Ruchi Credit Corporation Ltd.,Param Industries Ltd., Ruchi Health Foods Ltd., Aneja Solvex Ltd. and Ruchi Pvt. Ltd.(after de-merger of its leasingbusiness)(hereinafter referred to as the Transferor companies) with the Company (b) Acquisition of soya processing,vegetables oils and fats and food businesses of Madhya Pradesh Glychem Industries Ltd. by the Company by way ofslump sale; and (c) Re-organisation of the assets of the Company.

Two of the Transferor companies were holding in aggregate 7,42,092 equity shares of the Company. One of the transferorCompany was holding 2,80,000 equity shares in another transferor Company. Further, the Company was holding 76,71,426equity shares in two of the Transferor companies. In terms of the Schemes of Amalgamation / Arrangement sanctioned bythe Hon’ble High Courts of Bombay and Delhi, 7,83,931 equity shares of the Company have been issued to a Trust in lieuof the shares of the Transferor companies held by the Company / Transferor Companies. In terms of the Schemes, all theabove shares aggregating to 15,26,023 are to be held by the Trust for the benefit of the Company or its successors. Theseshares have been shown under the head ‘investments’ and included in Schedule 6 relating to investments at cost inaccordance with the accounting policy of the Company. The dividend received by the Trust in respect of these shares isincluded under the head ‘dividend’ under ‘Other income’ in Schedule 15.

6. Sundry creditors include bills payable for purchase of material Rs. 50,397.54 lacs (Previous year Rs. 23,203.68 lacs).

7. Pursuant to the approval of the members by way of a special resolution passed at the Extra Ordinary General Meeting, theparent Company has allotted 3,53,25,000 warrants to promoters and others on preferential basis. Each warrant entitlesthe holder to subscribe to one equity share of Rs 2/- each. In terms of the resolution, the said warrants have been issuedat a payment of 10% of the total amount. The balance 90% amount is receivable on exercise of the option. During theyear, 64,00,000 equity shares of Rs. 2/- each have been allotted on exercise of option by two of the warrant holderentities of the promotors' group. The proceeds of the issue have been utilised towards working capital.

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8. During the year, the parent Company forfeited 4,047 equity shares of Rs.10/- each. The said shares have been re-issuedto persons other than promoters/persons acting in concert with promoters in accordance with preferential issue guidelinesof Securities and Exchange Board of India. The said re-issue of shares is subject to approval of the members at theensuing Annual General Meeting.

9. Purchases are net of Rs.1,913.77 lacs (Previous year Rs. 2,200.29 lacs) and sales are net of Rs.1,514.89 lacs (Previousyear inclusive of Rs.694.86 lacs) respectively towards difference arising on account of fluctuation in the rate of exchange.

10. Other income inter alia includes the following:

Gain from transactions on commodity exchange (net) Rs. 907.73 lacs (Previous year Rs. Nil)

11. Other Expenses inter alia include the following:

Loss from Swaps/Derivatives (net) Rs. 38.49 lacs (Previous year Rs. 860.73 lacs)

12. Fixed assets include Rs. 743.59 lacs (written down value as at 31.3.2008) (Previous year Rs. 582.85 lacs) representingplant & machinery & equipment which are not wholly used. The Company is in the process of finding alternate use ofsuch assets or their ultimate disposal.

13. During the year, the Company has availed buyer’s credit. The amount of Rs. 74,226.08 lacs (previous year 62,840.42lacs) outstanding on account of buyer’s credit as at 31st March, 2008 is guaranteed by the banks against fixed deposits ofRs. Rs. 72,857.00 lacs (previous year Rs. 64,249.00 lacs) placed with them. In the balance sheet, the said amount ofRs. 74,226.08 lacs (previous year Rs. 62,840.42 lacs) has been included under unsecured loans from banks and financialinstitutions in Schedule No. 4 and the aforesaid fixed deposits are included under bank balances with scheduled banks indeposit account in Schedule No. 9.

14. The Balance with Non Scheduled Banks comprise (a) in Deposit Account with Jila Sahakari Kendriya Bank MaryaditRs. 0.11 lac (Previous year Rs. 0.11 lac) [Maximum balance at any time during the year Rs. 0.11 lac] (b) in current accountwith Bhuj Mercantile Co-operative Bank Ltd. Rs. Nil [Maximum balance at any time during the year Rs. 0.05 lac (Previousyear Rs. 0.05 lac)].

15. Expenditure incurred during construction period has been dealt with as under:2007-08 2006-2007

(Rs. in lacs) (Rs. in lacs)

Power & fuel 22.17 —

Salaries & wages 11.72 —

Staff welfare 0.37 —

Travelling expenses 1.19 —

Rent 0.07 —

Freight & Forwarding 2.46 —

Rates & Taxes 0.18 —

Repair & Maintenance 1.12 —

Consumables 0.04 —

Conveyance Expenses 0.31 —

Other expenses 33.88 —

73.51 —

Less: Allocated to buildings & plant & machinery & capitalized 72.15 —

Balance pending allocation to be capitalized 1.36 —

16. In respect of certain advances included under inter-corporate deposits, the parent Company has charged interest onadvances given on net daily products of balances due from/payable to these companies during the year. The Companyhas been advised that this is in compliance with the provisions of Section 372A of the Companies Act, 1956.

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17. Prior period income/expenses included under respective heads are as under :

2007-2008 2006-2007Expenditure (Rs. in lacs) (Rs. in lacs)

Repair & Maintenance 45.66 1.08

Rent 21.27 22.09

Brokerage 3.44 0.38

Freight 22.84 13.80

Clearing & Forwarding 10.19 3.57

Interest 0.61 —

Excise Duty 29.72 —

Insurance 8.62 —

Wages (Others) 1.20 —

Stores Consumption 8.68 —

Sundry Packing Material 0.89 —

Power & Fuel 0.24 —

Rates & Taxes 23.84 0.11

Consumable 10.46 —

Claim & Settlement 0.88 —

Depreciation (1.52) —

Other expenses 15.71 47.51

Income

Power & Fuel 264.76 —

Insurance claim received 0.07 —

Other Income 24.08 —

18. a) Segment information required to be disclosed in accordance with Accounting Standard 17 (AS-17) on SegmentReporting is given in para (c) below.

b) i) The Group has disclosed business segment as the primary segment. Segments have been identified taking intoaccount the type of products and the differing risks and returns and internal reporting system. The varioussegments identified by the company comprise as under:

Extractions — All types of seed extractions, textured soya protein, soya flour.

Vanaspati — Vanaspati

Oils — Crude oils, refined oils

Others — Gram, Wheat, Seeds, Sugar, Peas, Moong, Rice, Maize, coffee , Marine product, tuar, Soap,Peas, Barley, Fruit juices, Fresh fruit bunches, seedings, plant & machinery (equipments) andothers.

By products related to each segment have been included under the respective segment.

ii) Extractions are considered as the primary product resulting from the solvent extraction process and crude oil,the secondary product. While computing segment results, all costs related to solvent extraction process arecharged to the extraction segment and recovery on account of crude oil is credited to the said segment. Creditfor recovery of crude oil is taken on the basis of average monthly market price.

iii) The Company has disclosed geographical segments as the secondary segment. Secondary segments compriseof domestic market & export market.

iv) Segment revenue, segment results, segment assets and segment liabilities include respective amounts directlyidentified with the segment and also an allocation on reasonable basis of amounts not directly identified. Theexpenses which are not directly related to business segment, are shown as unallocated corporate cost. Assetsand Liabilities that can not be allocated between the segments are shown as unallocated corporate assets &Liabilities respectively.

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c) Segment Information:

(Rs. in lacs)

Extractions Vanaspati Oils Others Unallocable Total

Revenue 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07 2007-08 2006-07

External Revenue

Domestic Sales 74,196.97 43,331.15 92,662.61 60,479.34 7,72,531.12 6,46,267.01 23,296.14 9,934.08 51.53 38.09 9,62,738.37 7,60,049.67

Export Sales 1,79,912.00 1,21,693.25 — — 3,429.86 4,683.66 26,559.11 20,524.19 — — 2,09,900.97 1,46,901.10

Total External Revenue 2,54,108.97 1,65,024.40 92,662.61 60479.34 7,75,960.98 6,50,950.67 49,855.25 30,458.27 51.53 38.09 11,72,639.34 9,06,950.77

Add : Intersegment Sales 1,40,404.941,08,151.61 — — 59,782.66 34,930.60 — — — — 2,00,187.60 1,43,082.21

Total Segment Revenue 3,94,513.91 2,73,176.01 92,662.61 60479.34 8,35,743.64 6,85,881.27 49,855.25 30,458.27 51.53 38.09 13,72,826.94 10,50,032.98

Segment Results before

Interest & Tax 11,117.34 5,539.83 1,928.75 863.99 20,829.96 16,637.67 2,447.48 764.23 49.32 (24.58) 36,372.85 23,781.14

Less : Interest 9,981.51 7,672.03

Profit before taxation 26,391.34 16,109.11

Provision for taxation

Current tax 5,781.80 3,830.00

Deferred tax 2,999.58 1,609.59

Fringe Benefit tax 175.60 125.35

Short provision

for tax for earlier years 851.34 177.30

Profit after tax 16,583.02 10,366.87

SEGMENT ASSETS 1,49,993.18 84,393.79 33,054.29 24,278.75 3,26,369.73 1,94,372.41 34,711.61 7,102.47 79,611.04 1,09,225.79 6,23,739.85 4,19,373.21

SEGMENT LIABILITIES 76,546.43 29,512.46 20,239.84 3,076.28 1,98,420.56 1,11,733.34 7,501.66 1,421.65 4,472.58 17,069.66 3,07,181.07 1,62,813.39

Total cost incurred during

the year to acquiresegment assets 2,335.87 723.33 432.78 1,214.91 3,466.23 5,906.56 11,864.43 3,803.21 1,848.23 1,088.78 19,947.54 12,736.79

Segment Depreciation 2,204.21 2,035.40 907.32 856.85 3,548.14 3,208.26 309.83 91.46 505.66 371.14 7,475.16 6,563.11

Non-Cash expenses other

than depreciation 0.54 11.50 0.20 1.04 2.55 11.68 0.34 — — 1.53 3.63 25.75

Unallocable segmentassets are as follows :

Investments 7,195.02 3,251.25

Advance Income Tax including TDS 10,150.69 10,311.74

Unallocable segmentliabilities are as follows :

Secured Loan 75,876.57 66,112.49

Deferred Tax liabilities 10,177.67 7,179.87

Unsecured loan 1,23,108.47 94,801.70

Minority Interest (1,220.19) (900.44)

Provision for taxation 10,986.51 10,762.72

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19. a) Disclosure of transactions with related parties, as required by Accounting Standard 18 (AS-18) relating to RelatedParty Disclosures has been given in para (b) & (c) below. Related parties as defined under clause 3 of the AccountingStandard have been identified on the basis of representation made by the key managerial person & informationavailable with the company.

b) Related party relationships :

i) Key Management Personnel & their relativesMr. Dinesh Shahra, Managing DirectorMrs. Abhadevi Shahra, Wife of the Managing DirectorMs. Amrita Shahra, Daughter of the Managing DirectorMr. Sarvesh Shahra, Son of the Managing DirectorMr. Kailash Shahra, Brother of the Managing DirectorMr. Suresh Shahra, Brother of the Managing DirectorMr. Santosh Shahra, Brother of the Managing DirectorMr. A.B. Rao, Whole Time DirectorMr. S.P. Joshi, Whole Time Director

ii) Entities where Key Management Personnel or relatives ofKey Management Personnel have significant influenceMahadeo Shahra & SonsMahadeo Shahra Sukrut TrustNutrela Marketing Pvt. Ltd.Ruchi Realty Pvt. Ltd.Ruchi Infrastructure Ltd.Shahra Brothers Pvt. Ltd.Sunshine Oleochem Ltd. (Private Limited upto 25.03.2008)RSIL Beneficiary TrustSoyumm Marketing Pvt. LtdRuchi Bio Fuels Pvt. Ltd.Ruchi Marktrade Pvt. Ltd.Shiva Foundation (Trust)

c) Related party transactions(Rs. in lacs) (Rs. in lacs)

Nature of Transaction 2007-08 2006-07

Key Management Personnel Remuneration including perquisites 240.42 154.28and their relatives Rent paid 1.20 1.20[See Note below] Sitting fees 0.28 0.24

Entities where Purchase of goods 8,319.13 3,202.39Key Management Sales of goods 32,989.70 11,264.35Personnel or relatives of Others 3.20 —Key Management Investment in preference shares 500.00 —Personnels have Interest received/receivable (net) 99.06 —significant influence Rent paid 1.56 4.50

Lease Rent Receivable 3.93 —Donation given 11.30 32.00Storage charges Paid 804.08 879.45Processing charges received/receivable 186.01 35.71Port hire charges 452.93 412.90Amount outstanding as at year endAmount receivable 5,807.13 2,994.63Amount payable 19.57 185.42Investment 500.00 —

Note : Remuneration paid to Managing Director (Key Management Personnel) excludes expenditure on rent freeaccommodation, since rent is paid to relative of key management personnel and the same has been disclosedseparately.

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20. Earnings per share :

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

a) Basic earnings per share :

i) Profit after tax 16,583.02 10,366.43

Less : Preference dividend including tax thereon 211.73 211.73

Profit attributable to equity shareholders 16,371.29 10,154.70

ii) Weighted average number of equity shares :

Equity shares of Rs. 2/- each (Previous year Rs. 10/- each)as at the beginning of the year 18,23,90,060 2,99,25,905

Add : Adjustment for equity shares issue during the yearon conversion of warrants 17,534 —

Add : Adjustment for share allotted pursuant to schemesof amalgamation (Refer Note no. 5 of Schedule 20) — 65,52,107

18,24,07,594 3,64,78,012

Basic earning per share of Rs. 2/- each(Previous year Rs. 10/- each) (in Rs.) 8.98 27.84

b) Diluted earnings per share :i) Profit attributable to equity shareholders 16,371.29 10,154.70

[as per working in (a)(i) above]

Add : Increase in profits on account of dilutive — 63.96potential equity shares by way of lowerinterest (net of tax)

16,371.29 10,218.66

ii) Weighted average number of equity shares 18,24,07,594 3,64,78,012[as per working in (a)(ii) above]

Add : Increase in shares on account of dilutive 83,92,966 81,25,000potential equity shares

19,08,00,560 4,46,03,012

Diluted earning per share of Rs. 2/- each(Previous year Rs. 10/- each) (in Rs.) 8.58 22.91

21. The break-up of the deferred tax liability up to the year ended 31.03.2008 is as under :(Rs. in lacs)

Liability/ (Asset) on account of For the period For the year Total uptoUpto 31.03.2007 Ended 31.03.2008 31.03.2008

Depreciation 7,403.92 3,077.83 10,481.75

Provision for doubtful debts/advances (26.00) (138.00) (164.00)

Disallowance under the Income Tax Act (198.00) 58.00 (140.00)

Diminution in value of Investment (0.05) (0.03) (0.08)

Net deferred tax liability / (asset) 7,179.87 2,997.80 10,177.67

22. I. The Company has entered into the following derivative instruments :

a) The Company uses foreign currency/forward contracts to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and forecasted transactions. The Company does not use forward contracts forspeculative purposes.

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The following are the outstanding Forward Exchange Contracts entered into by the Company as on 31st March, 2008 :

2007-2008 2006-2007

Particulars No. of US Dollar INR No. of US Dollar INRContracts Equivalent Equivalent Contracts Equivalent Equivalent

(in lacs) (in lacs) (in lacs) (in lacs)

Covers against exports 47 816.15 32,456.41 8 289.04 12,927.72

Amount receivable in foreigncurrency on account of the following:Sale of goods — — — 1 38.96 1,674.75

Amount payable in foreign currencyon account of the following

Import of goods and services 80 4,325.61 1,72,904.38 85 14,887.02 72,768.15Loans and interest payable 29 918.70 36,811.53 57 1,349.21 55,407.03

2007-2008 2006-2007

Particulars No. of JPY INR No. of JPY INRContracts Equivalent Equivalent Contracts Equivalent Equivalent

(in lacs) (in lacs) (in lacs) (in lacs)

Amount payable in foreign currencyon account of the following

Loans and interest payable 1 7,058.53 2,425.00 6 11,911.38 4,691.54

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency riskon its capital account. The Company does not use these contracts for speculative purposes.

i) Option contracts to hedge against imports :

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 4 355.70 15,504.96

ii) Coupon Rate Swap to hedge against fluctuations in interest rate

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 2 43.20 1,902.05

iii) Currency swaps to hedge against fluctuations in changes in exchange rate and interest rate

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

1 100.00 3,932.00 1 22.96 1,000.00

iv) Options to hedge against exports

2007-2008 2006-2007

No. of US Dollar Equivalent INR Equivalent No. of US Dollar Equivalent INR Equivalent

Contracts (in lacs) (in lacs) Contracts (in lacs) (in lacs)

— — — 2 75.00 3,269.25

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As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President Managing DirectorMembership No. 40740 (Corporate Accounts)Indore, August 30, 2008 Indore, August 30, 2008

II. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise aregiven below :

2007-2008 2006-2007

Particulars US Dollar Equivalent INR Equivalent US Dollar Equivalent INR Equivalent(in lacs) (in lacs) (in lacs) (in lacs)

Amount receivable in foreigncurrency on account of the following:

Sale of goods — — — —

Sale of Merchandise 594.07 23,655.95 419.37 17,983.53

Bank Balance — — — —

Amount payable in foreign currency on account of the following

Import of goods and services 1,349.35 54,191.61 175.84 7,682.33

Purchase of Merchandise Exports 581.15 23,051.58 128.61 6,003.50

Loans and interest payable 21.30 855.63 40.29 1,759.97

Customer Advance — — — —

2007-2008 2006-2007

Particulars JPY Equivalent INR Equivalent JPY Equivalent INR Equivalent(in lacs) (in lacs) (in lacs) (in lacs)

Amount payable in foreigncurrency on accountof the following

Loans and interest payable 48.28 19.62 361.15 134.60

23. Figures pertaining to the subsidiary, associate and the trust, where the company is the beneficiary have been reclassifiedto bring them in line with parent Company’s financial statements.

24. Previous year's figures have been regrouped, wherever necessary.

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CASH FLOW STATEMENT ANNEXED TO BALANCE SHEET AS AT 31ST MARCH, 20082007 - 08 2006 - 07

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit as per profit and loss account 26,391.34 16,109.11Adjustment for :Depreciation 7,475.14 6,563.11Interest paid 17,141.32 13,052.50Miscellaneous expenditure written off 3.63 25.75Provision for wealth tax 6.67 5.49Provision for Doubtful debts/Advances 406.54 8.13Goodwill written off (0.50) —Minority interest in Associate 5.96 —Interest received (7,159.81) (5,380.47)Dividend received (51.52) (38.08)Provision for Income Tax Written Off 0.01 3.63Provision for Leave encashment / Gratuity 52.51 —Loss on sale of assets 5.09 51.06Loss on sale of Investments 5.10 —Provision for diminution in investments 0.10 —Profit on sale of assets (226.74) (125.11)Profit on sale of investments (61.35) (7.15)

17,602.15 14,158.86Operating profit before adjusting for the

changes in working capital 43,993.49 30,267.97Adjustments for :Decrease/(increase) in inventories (1,24,995.92) (9,038.59)Decrease/(increase) in debtors (22,807.05) (18,730.99)Decrease/(increase) in other current assets

including loans and advances (26,536.15) (14,994.93)Increase /(Decrease )in liabilities 1,44,241.46 6,601.18

(30,097.66) (36,163.33)

Cash flow from operations 13,895.83 (5,895.36)Taxes paid (net of refund) incl. dividend tax (6,621.77) (4,523.67)

NET CASH FROM OPERATING ACTIVITIES 7,274.06 (10,419.03)

B. CASH FLOW FROM INVESTING ACTIVITIESInterest received 7,159.81 5,380.47Purchase of fixed assets (19,947.54) (12,736.79)Sale of fixed assets 329.58 619.76Purchase of investments (1,57,975.76) (26,156.83)Sale of investments 1,54,088.14 24,547.15Dividend received 51.52 38.08NET CASH USED IN INVESTING ACTIVITIES (16,294.25) (8,308.16)

C. CASH FLOW FROM FINANCING ACTIVITIESAllotment money and premium received 7,220.31 —Issue of Equity Shares — 900.00Increase/(decrease) in secured/unsecured loans 38,070.85 51,192.19Dividend paid (1,056.44) (966.56)Interest paid (17,141.32) (13,052.50)Share Issue expenses — (7.70)Intercorporate deposits (given/refunded) (2,039.86) 61.61NET CASH FROM FINANCING ACTIVITIES 25,053.54 38,127.04

Net increase/(decrease) in cash and cash equivalents (A+B+C) 16,033.35 19,399.85

Opening balance of cash and cash equivalents 79,913.92 60,514.07Closing balance of cash and cash equivalents 95,947.27 79,913.92

Increase/(decrease) in cash or cash equivalents 16,033.35 19,399.85

As per report of even date attached For and on behalf of the Board of DirectorsFor and on behalf ofP.D. KUNTE & CO. (Regd.)Chartered Accountants KAILASH SHAHRA

Chairman

D.P. SAPRE R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRAPartner Company Secretary Vice President (Corporate Accounts) Managing DirectorMembership No. 40740Indore, August 30, 2008 Indore, August 30, 2008

91

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT 1956, RELATING TO THE INTEREST INTHE SUBSIDIARY COMPANY

1. Name of the subsidiary company Ruchi Worldwide Ltd.

2. The Financial year of the subsidiary companyended on 31st March, 2008

3. Date from which it became subsidiary 10th August, 1996

4. (a) No. of shares held by Ruchi Soya Industries Ltd. 99,40,700 Equity Shares of Rs.10/- each(Holding Company) in the subsidiary company. fully paid up

(b) Extent of interest of Holding Company at theend of the financial year of the Subsidiary Company. 52.48%

5. Net aggregate amount, so far as it concerns themembers of Ruchi Soya Industries Limited and is not dealtwith in the Company’s accounts of the subsidiary’s profits:

(a) Profit / (loss) for the Subsidiary’s previous financial year. Rs.660.32 lacs

(b) Profit/(loss) for the previous financial yearsof the subsidiary since it became the Subsidiary ofRuchi Soya Industries Ltd. Rs.1526.62 lacs

6. Net aggregate amount of the Profits of the subsidiaryso far as those Profits are dealt with in Ruchi Soya IndustriesLimited’s accounts.

(a) For the Subsidiary’s financial year. ——

(b) For the previous financial years, since it becamethe Subsidiary of Ruchi Soya Industries Ltd. Rs.343.13 lacs

For and on behalf of the Board of Directors

KAILASH SHAHRAChairman

Place : Indore R.L. GUPTA MAHESH AGRAWAL DINESH SHAHRADate : August 30, 2008 Company Secretary Vice President (Corporate Accounts) Managing Director

92

RUCHI WORLDWIDE LIMITED(A subsidiary company)

TWELFTH ANNUAL REPORT

2007-2008

Board of Directors : Mr. Dinesh Shahra

Mr. Naveen GuptaMr. S.P. Joshi

Registered Office : 408, Tulsiani Chambers,Nariman Point,Mumbai – 400 021

Bankers : ICICI Bank Ltd.

Standard Chartered Bank

Corporation Bank

Yes Bank Ltd.

Oriental Bank of Commerce

Auditors : M.M. Singla & Co.

93

Dear Shareholders,

Your directors have pleasure in presenting the twelfth annual report together with the audited statement of accounts of theCompany for the year ended 31st March, 2008 :

FINANCIAL RESULTS : 2007-08 2006-07(Rs. in lacs) (Rs. in lacs)

Sales and other income 1,15,862.55 60,440.98

Profit before taxation 1,017.25 508.07

Provision for Current Tax 345.80 160.00

Taxation for earlier years 10.96 7.56

Provision for deferred tax (0.43) (0.41)

Provision for fringe benefit tax 0.60 0.35

Profit after taxation 660.32 340.57

Balance brought forward from previous year 1,502.16 1,191.56

Amount available for appropriation 2,162.48 1,532.13

APPROPRIATION

Dividend paid on preference shares — 26.25

Tax on dividend — 3.72

Balance carried to Balance Sheet 2,162.48 1,502.16

2,162.48 1,532.13

DIVIDEND :

Your Directors express their inability to declare dividend on preference shares and equity shares in order to plough back the profit.

OPERATIONS :

During the year under review, the sales and other income of your Company has grown by 91.70% to Rs.1,15,862.55 lacs asagainst Rs.60,440.98 lacs in the previous year due to enlarged products portfolio and higher volume of operations. TheCompany’s net profit after tax for the period under review has also gone up by 93.89% to Rs. 660.32 lacs as againstRs. 340.57 lacs in the previous year.

DIRECTORS :

Mr. Naveen Gupta retires by rotation in accordance with the provisions of Articles of Association of the Company and beingeligible, offers himself for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT :

As stipulated under Section 217(2AA) of the Companies Act, 1956, your directors subscribed to the “Directors’ ResponsibilityStatement” and confirm as under:

(i) that in the preparation of the annual accounts, the applicable Accounting Standards have been followed along withproper explanations relating to material departures;

(ii) that the Directors had selected appropriate accounting policies and applied them consistently, and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the financial year 2007-08 and of the profit of the Company for that period;

Directors’ ReportDirectors’ ReportDirectors’ ReportDirectors’ ReportDirectors’ Report

94

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2008 on a ‘going concern’ basis.

PARTICULARS OF EMPLOYEES :

There being no employee who is in receipt of remuneration in excess of limits prescribed under Section 217 (2A) of theCompanies Act, 1956, the information required under the said Section is not furnished.

FIXED DEPOSITS :

The Company has not accepted any deposit from the public during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO :

Since the Company did not have any manufacturing activity during the year under review, the particulars of conservation ofenergy are not furnished. No research and development or technology absorption was effected by the Company during theyear under review.

During the year, the foreign exchange earned on export was Rs. 24,304.61 lacs (Previous year Rs. 5,165.23 lacs) and theforeign exchange outgo was Rs.55,167.65 lacs (Previous year Rs. 22,418.67 lacs).

AUDITORS :

The Auditors M/s M.M. Singla & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and areeligible for re-appointment.

ACKNOWLEDGEMENT :

Your directors place on record their gratitude for the valued support and assistance extended to the Company by the share-holders, Banks, Financial Institutions and Government Authorities and look forward to their continued support. Your directorsalso express their appreciation for the dedicated and sincere services rendered by employees of the Company.

For and on behalf of the Board of Directors

Place : Mumbai DINESH SHAHRADate : 28th August, 2008 Director

95

Auditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ Report

THE MEMBERS OF RUCHI WORLDWIDE LIMITED

We have audited the attached Balance Sheet of Ruchi Worldwide Ltd. as at 31st March, 2008 and the Profit & Loss Accountand Cash Flow Statement for the year ended on that date annexed thereto. These Financial statements are the responsibilityof the company management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by management as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

2. As required by Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms ofSection 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified inparagraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 above, we report that :

a) We have obtained all the information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears fromour examination of the books.

c) The Balance Sheet, the Profit and Loss Account and Cash Flow Statement referred to in this report are in agreementwith the books of account.

d) In our opinion, the Profit & Loss Account, Balance Sheet and Cash Flow Statement dealt with by this report complywith the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the CompaniesAct, 1956.

e) On the basis of written representations received from the Directors of the Company and taken on record by theBoard of Directors, we report that no Director is disqualified as at 31st March, 2008 from being appointed as adirector in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said BalanceSheet, Profit & Loss Account and Cash Flow Statement read with notes thereon give the information required bythe Companies Act, 1956 in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008;

ii) In the case of Profit & Loss Account, of the profit of the Company for the year ended on that date and;

iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For M.M.Singla & Co.Chartered Accountants

Place : Mumbai (MURLI M.SINGLA)Date : August 28, 2008 Proprietor

(Membership No. 40366)

96

ANNEXURE REFERRED TO IN PARAGRAPH (2) OF THE AUDITORS’ REPORT ON THE ACCOUNTS OF RUCHIWORLDWIDE LTD. FOR THE YEAR ENDED 31ST MARCH, 2008.

1. The Company has maintained proper records showing full particulars including quantitative details and situation of

fixed assets. We are informed that during the year, these assets were physically verified by the management and no

serious discrepancies have been noticed on such verification.

2. As the Company has not disposed off any fixed assets during the year, paragraph 4(i)(c) of the Companies (Auditor’s

Report) Order, 2003 (herein after referred to as “the Order”) is not applicable.

3. We have been informed that the inventories have been physically verified by the management during the year. In our

opinion, the frequency of verification is reasonable, except for stocks lying with third parties at the year end, which has

been confirmed by them.

4. The procedures of physical verification of inventories followed by the management are reasonable and adequate in

relation to the size of the Company and the nature of its business.

5. The discrepancies noticed on physical verification of inventories as compared to the book records which have been

properly dealt with in the books of account, were not material.

6. According to the information and explanations given to us, the Company has neither granted nor taken loan, secured or

unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies

Act, 1956.

7. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the

nature of its business for the purchases of stock in trade and sale of goods. During the course of our audit, no major

weakness has been noticed in the internal control.

8. a. In our opinion and according to the information and explanations given to us, the transactions for the year that

needed to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so

entered.

b. These transactions have been made at prices which are reasonable having regard to the prevailing market prices at

the relevant time.

9. According to the information and explanations given to us, the Company has not accepted any deposit from the public

to which provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules made thereunder apply.

10. The Company has an internal audit system commensurate with its size and nature of its business.

11. The maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 is not applicable to the Company.

12. As informed to us, the provisions of Employees Provident Fund Act, 1952, are not applicable to the Company for the

year under report.

13. a. There are no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty as at

31st March, 2008, which are outstanding for a period of more than six months from the date they became payable.

b. As at 31st March 2008, statutory due (custom duty) of Rs.220 lacs is disputed and has not been deposited by the

Company. The matter is pending before High Court.

14. The Company does not have any accumulated losses and has not incurred any cash loss during the current financial

year and the immediately preceding financial year.

97

15. Based on examination of the books of account and related records and according to the information and explanations

provided to us, the Company has not defaulted in repayment of dues to the banks.

16. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and

other securities.

17. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause

4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

18. The Company does not deal or trade in shares, securities, debentures and other investments.

19. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by

others from bank or Financial Institutions.

20. In our opinion, the working capital loans raised during the year have been applied for the purpose for which they were

raised.

21. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash

Flows of the Company, we report that the Company has not utilized funds raised on short-term basis for long term

investment and vice-versa.

22. The Company has not issued any debentures during the year under review. Accordingly, the provisions of clause 4 (xix)

of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

23. During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the said Order is

not applicable.

24. According to the information and explanations given by the Management, we report that no fraud on or by the Company

has been noticed or reported during the course of our audit for the year ended 31st March, 2008.

25. We have given our comments on the clauses which are applicable to the Company.

For M.M. Singla & Co.Chartered Accountants

Place : Mumbai (MURLI M. SINGLA)Date : August 28, 2008 Proprietor

(Membership No. 40366)

98

Balance SheetBalance SheetBalance SheetBalance SheetBalance SheetAS AS AS AS AS AAAAAT 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008T 31ST MARCH, 2008

Sch. 2007-2008 2006-2007No. (Rs. in lacs) (Rs. in lacs)

I. SOURCES OF FUNDS

1. Shareholders' Funds

a. Share Capital 1 1,894.07 1,894.07

b. Reserves & Surplus 2 2,187.44 1,526.98

2. Loan Funds

a. Secured Loans 3 6,025.50 1,868.17

b. Unsecured Loans 4 37,001.63 12,069.26

47,108.64 17,358.48

II. APPLICATION OF FUNDS

1. Fixed Assets 5

a. Gross Block 21.38 19.36

b. Less : Depreciation 15.59 13.44

c. Net Block 5.79 5.92

2. Current Assets, Loans & Advances

a. Sundry Debtors 6 14,214.39 13,980.78

b. Cash & Bank Balances 7 38,048.75 12,797.41

c. Loans and Advances 8 4,457.79 1,419.90

d. Inventories 9 8,036.10 1,075.96

64,757.03 29,274.05

Less : Current Liabilities & Provisions

a. Current Liabilities 10 17,051.89 11,480.95

b. Provisions 11 607.70 446.83

17,659.59 11,927.78

Net Current Assets 47,097.44 17,346.27

3 Net Deferred Tax (Liability) / Asset 0.48 0.13

4. Miscellaneous Expenditure 12 4.93 6.16

(To the extent not written off or adjusted)

47,108.64 17,358.48

NOTES TO THE ACCOUNTS 16

As per our report of even date attached For and on behalf of the Board of Directors

For M. M. SINGLA & CO. DINESH SHAHRAChartered Accountants Director

(MURLI M. SINGLA)Proprietor S.P. JOSHI(Membership No. 40366) DirectorMumbai, 28th August, 2008 Mumbai, 28th August, 2008

99

Profit & Loss AccountProfit & Loss AccountProfit & Loss AccountProfit & Loss AccountProfit & Loss AccountFOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008FOR THE YEAR ENDED 31ST MARCH, 2008

Sch. 2007-2008 2006-2007No. (Rs. in lacs) (Rs. in lacs)

INCOME

Sales & Other Income 115,862.55 60,440.98

Increase In Stock 6,960.14 242.10

122,822.69 60,683.08

EXPENSES

Purchases 120,224.79 58,789.82

Material Consumed 13 — 668.64

Other Expenses 14 1,797.84 616.91

Interest (Net) Paid/(Received) 15 (219.34) 62.50

Processing Charges — 35.00

Depreciation 2.15 2.14

121,805.44 60,175.01

Profit before taxation 1,017.25 508.07

Provision for taxation 345.80 160.00

Provision for taxation for earlier years 10.96 7.56

Provision for deferred tax (0.43) (0.41)

Provision for fringe benefit tax 0.60 0.35

Profit after taxation 660.32 340.57

Balance brought forward from previous year 1,502.16 1,191.56

Profit available for appropriation 2,162.48 1,532.13

APPROPRIATION

Dividend paid on 6% Redeemable Cumulative Preference Shares — 26.25

Tax paid on dividend — 3.72

Balance carried to Balance Sheet 2,162.48 1,502.16

2,162.48 1,532.13

Earning per share (basic and diluted in Rs.)(See Note no. 16 of Schedule 16) 3.49 15.63

NOTES TO THE ACCOUNTS 16

As per our report of even date attached For and on behalf of the Board of Directors

For M. M. SINGLA & CO. DINESH SHAHRAChartered Accountants Director

(MURLI M. SINGLA)Proprietor S.P. JOSHI(Membership No. 40366) DirectorMumbai, 28th August, 2008 Mumbai, 28th August, 2008

100

SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2008 ANDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 1 : SHARE CAPITAL

Authorised

1,90,00,000 Equity Shares (Previous year 1,90,00,000 Equity

Shares) of Rs. 10/- each. 1,900.00 1,900.00

1,900.00 1,900.00

Issued, Subscribed & Paid up

1,89,40,700 Equity Shares (Previous year 1,89,40,700 Equity

Shares) of Rs.10/- each 1,894.07 1,894.07

[99,40,700 Equity shares (Previous year 99,40,700 Equity Shares)of Rs.10/- each held by the Holding Company i.e.Ruchi Soya Industries Ltd. & its nominees]

1,894.07 1,894.07

SCHEDULE 2 : RESERVES & SURPLUS

General Reserve 24.96 24.82

Profit and Loss Account 2,162.48 1,502.16

2,187.44 1,526.98

SCHEDULE 3 : SECURED LOANS

Short term loan from Banks

(Secured by pari-passu charge by way of hypothecation of stocks

and book debts, personal guarantee of a director & corporate 6,025.50 1,868.17

guarantee of holding company) [Repayable within one year

Rs. 6,025.50 lacs (Previous year Rs. 1,868.17 lacs)]

6,025.50 1,868.17

SCHEDULE 4 : UNSECURED LOANS

Short term advances from Banks

(Refer Note no. 12 of Notes to the Accounts) 37,001.63 12,069.26

37,001.63 12,069.26

101

SCHEDULE 5 : FIXED ASSETS (Rs. in lacs)

GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As on As on Upto For the Upto As at As at01.04.2007 Additions 31.03.2008 31.03.2007 year 31.03.2008 31.03.2008 31.03.2007

Office Equipment 10.23 2.02 12.25 7.76 1.10 8.86 3.39 2.47

Furniture & Fixtures 2.10 — 2.10 1.29 0.38 1.67 0.43 0.81

Vehicles 7.03 — 7.03 4.39 0.67 5.06 1.97 2.64

Total 19.36 2.02 21.38 13.44 2.15 15.59 5.79 5.92

Previous Year 19.15 0.21 19.36 11.30 2.14 13.44 5.92 7.85

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 6 : SUNDRY DEBTORS(Debts considered good)

Over six months 112.36 104.48

Other debts 14,102.03 13,876.30[includes amount due from holding company Nil(Previous year Rs. 1,181.54 lacs)]

14,214.39 13,980.78

SCHEDULE 7 : CASH & BANK BALANCESCash in hand 0.48 1.37

Balance with scheduled banks :

i) In Current Accounts 275.20 148.28

ii) In Deposit Accounts 37,773.07 12,647.76(Refer Note no. 12 of Notes to the Accounts)

38,048.75 12,797.41

SCHEDULE 8 : LOANS AND ADVANCESDeposits 99.19 92.91

Advance income tax (Including TDS) 624.66 564.68

Other advances recoverable in cash or in kind 3,733.94 762.31

or for the value to be received4,457.79 1,419.90

SCHEDULE 9 : INVENTORIESStock in trade (Finished Goods) 8,036.10 1,075.96

(at cost or market value whichever is less)8,036.10 1,075.96

SCHEDULE 10 : CURRENT LIABILITIESSundry Creditors 15,563.68 11,114.51

[includes amount due to holding company

Rs.206.66 Lacs (Previous year Nil)]

Other Liablities 1,488.21 366.44

17,051.89 11,480.95

102

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

SCHEDULE 11 : PROVISIONSProvision for Taxation 606.23 446.83

Provision for Gratuity 1.47 —

607.70 446.83

SCHEDULE 12 : MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)

Registration Fees & Stamp Duty 6.16 7.70

Less : Written off 1.23 1.54

4.93 6.16

SCHEDULE 13 : MATERIAL CONSUMEDRaw Material

Opening stock — —

Add : Purchases — 668.64

Less : Closing stock — —

— 668.64

SCHEDULE 14 : OTHER EXPENSESSalary 29.67 17.16

Freight, Clearing & Forwarding expenses 969.50 186.41

Export Expenses 264.11 115.45

Import Expenses 318.51 184.18

Rent 3.20 4.53

Rates and Taxes 54.77 20.66

Travelling & Conveyance Expenses 5.00 1.26

Repairs and Maintenance 0.23 1.39

Legal & Professional Fees 17.08 24.28

Insurance 52.48 25.38

Brokerage 59.32 20.97

Audit Fees 0.75 0.50

Miscellaneous Expenses 20.42 12.31

Registration Fees & Stamp Duty expenses written off 1.23 1.54

Consignment sales expenses — 0.06

Telephone & Postage 1.57 0.83

1,797.84 616.91

SCHEDULE 15 : INTEREST (Net)

Interest 978.81 769.29

Less : Interest received 1,198.15 706.79

[Tax deducted at source Rs. 237.04 lacs (Previous year Rs. 132.57 lacs)](219.34) 62.50

103

SCHEDULE – 16 : NOTES TO THE ACCOUNTS

1. Significant Accounting Policies :

a. Accounting Convention :

The Accounts have been prepared on historical cost basis.

b. Revenue Recognition :

The company follows mercantile system of accounting and recognises income and expenditure on accrual basis.

c. Valuation of inventories :

Finished goods,Raw material & Packing Material are valued at cost or market value whichever is less.

d. Depreciation is provided on straight line basis at the rates prescribed in schedule XIV to the Companies Act, 1956.

Depreciation has been provided on prorata basis with reference to the month of addition/installation/disposal of assets.

e. Foreign Currency Transactions :

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Exchangegain or loss in respect of forward exchange contract is spread over life of the contract. The current assets and currentliabilities not covered by forward exchange contract are translated at year end exchange rates. Any gain / loss onaccount of fluctuation in the rate of exchange is recognised in profit and loss account.

f. In respect of gratuity, the company has taken Group Gratuity cum Life Assurance Policy of Life Insurance Corporationof India to cover its gratuity liability. Accordingly, the premium payable/ paid to Life Insurance Corporation of Indiais charged to the Profit and Loss Account.

g. Provision for tax is made for both current and deferred taxes.Provision for current income tax is made on the current taxrates based on assessable income. The Company provides for deferred tax based on the tax effect of timing differencesresulting from the recognition of items in the financial statements and in estimating its current tax provision. The effecton deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date.

h. Employee benefits are recognised in accordance with revised Accounting Standard 15 as under:

(i) Short term employee benefits are recognized as expense in the profit and loss account of the year in whichservice is rendered.

(ii) Contribution to defined contribution schemes such as Provident Fund, Family Pension Fund and SuperannuationFund are charged to the profit and loss account.

(iii) The defined benefit obligations in respect of gratuity and leave encashment are recognised on the basis ofvaluation done by an independent actuary applying Project Unit Credit Method. The actuarial gain/loss arisingduring the year are recognized in the profit and loss account of the year.

2. Contingent Liabilities not provided for

No Provision has been made for Rs 220 Lacs (Previous Year Rs.220 Lacs) being the amount in respect of which thecompany has received demand notice from custom authorities, which has been disputed by the company. The honourableHigh Court of Chennai has granted a stay order in favour of the company. The company has been advised that thisdemand has been incorrectly raised and is not payable.

3. Details of Raw Material consumed :

2007-2008 2006-2007Qty (M.T.) (Rs. in lacs) Qty (M.T.) (Rs. in lacs)

a. Oil — — 1741.744 668.64

b. Consumption of Imported & Indigenous Raw Material and percentage of each to the consumption.

2007-2008 2006-2007 Value Value Value Value Value % Value %

(Rs. in lacs)(Rs. in lacs)(Rs. in lacs)(Rs. in lacs)(Rs. in lacs) (Rs. in lacs)

Imported — — 668.64 100

Indigenous — — — —

104

4. Details of Licensed and Installed Capacity, Production, Sales, Purchases and Stock.

2007-2008 2006-2007Qty. (M.T.) Qty. (M.T.)

a. Licensed Capacity

Oil N.A. N.A.

b. Installed Capacity

Oil — —

c. Production (done by others for the Company)

Oil — 1,668.869

2007-2008 2006-2007Qty (M.T.) (Rs. in lacs) Qty (M.T.) (Rs. in lacs)

d. OPENING STOCK

Oils — — 1,000.000 236.25

Cotton 1,451.484 775.78 — —

Grains 1,195.017 300.18 4,599.830 597.61

Others — — — —

1,075.96 833.86

e. PURCHASES

Oils 2,67,845.377 88,425.94 1,97,265.435 52,093.92

Cotton 45,500.731 25,678.10 11,195.691 5,584.11

Grains 26,600.003 5,325.28 4,613.125 1,111.79

Others 778.890 795.47 — —

1,20,224.79 58,789.82

f. SALES

Oils 2,67,845.377 88,832.25 1,99,934.304 53,790.49

Cotton 38,662.464 23,434.67 9,744.207 5,276.52

Grains 14,190.220 3,020.02 8,017.938 1,370.28

Others 575.890 571.43 — —

1,15,858.37 60,437.29

g. CLOSING STOCK

Oil — — — —

Cotton 8,289.751 5,034.79 1,451.484 775.78

Grains 13,604.800 2,833.54 1,195.017 300.18

Others 203.000 167.77 — —

8,036.10 1,075.96

Notes :

a. Sales & Purchases quantity include shortages & excess, if any.

b. Other Sales comprise of sale of Coffee amounting to Rs. 571.43 lacs (Previous year Rs.Nil).

105

5. Deferred Tax :

(Asset)/ Liability Deferred tax Current Deferred TaxCharges/(Credit) (Asset)/Liability (Assets)/Liability

As on 01.04.2007 As on 31.03.2008(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

Deferred tax liabilityDifference between book and 0.13 0.42 0.55Income tax depreciationDeferred tax assetsDis-allowance under section 43 B

and other dis-allowances — (0.07) (0.07)Deferred tax Assets (Net) 0.13 0.35 0.48

In accordance with Accounting Standard 22 “Accounting for Taxes on Income“ issued by the Institute of Chartered Accountantsof India, the Company has provided for deferred tax liability during the year. This has resulted in a debit to deferred tax ofRs. 0.42 lac (Previous year Rs. 0.41 lac) for the year and net profit for the year is higher by the same amount.

During the year, the Company has adopted revised Accounting Standard 15 (AS-15) on Employee Benefits issued by theInstitute of Chartered Accountants of India. Consequently, additional liability amounting to Rs. 0.14 lac (net of deferredtax of Rs. 0.07 lac) in respect of gratuity has been credited to the General Reserve.

6. From the current financial year, the Company has adopted the revised Accounting Standard on Employee Benefits. Thefollowing disclosures are made as required under AS-15.

Gratuity(Rs. in lacs)

Change in obligation during the year ended 31st March, 2008

Obligation at the beginning of the year 1.34

Service cost 0.54

Interest Cost 0.14

Actuarial (Gains)/Losses 0.06

Benefits payments (0.31)

Obligations at the end of the year 1.77

Change in the fair value of plan assets

Fair value of plan assets at the beginning of the year 1.56

Expected return on plan assets 0.27

Contributions 2.01

Benefits paid (0.31)

Actuarial (Gains)/Losses (0.07)

Fair value of plan assets at the end of the year 3.46

Amount recognized in balance sheet

Present value of defined benefit obligation at the end of the year 1.77

Fair value of plan assets at the end of the year 3.46

Liability recognized in balance sheet 1.69

Balance sheet reconciliation

Net liability at the beginning of the year (0.22)

Expenses recognized during the year 0.54

Contributions during the year 2.01

Net liability as at the end of the year (1.69)

106

Gratuity(Rs. in lacs)

Amounts recognized in the profit and loss account

Current service cost 0.54

Interest cost 0.14

Expected return on plan assets for the year (0.27)

Actuarial (Gains)/Losses 0.14

Expenditure recognized in the profit and loss account 0.54

Actual return on plan assets

Expected return on plan assets for the year 0.27

Actuarial (Gains)/Losses (0.07)

Actual return on plan assets 0.20

Percentage of each category of plan assets to fair value of plan assets

Insurer managed funds 3.46

Actuarial assumptions

Discount Rate Current 8%

Salary escalation Current 6%

Rate of return on plan assets Current 8%

Other disclosures :

a. Gratuity is payable to all employees at the rate of 15 days salary for each year of service subject to a maximum ofRs. 3.50 lacs.

b. Salary escalation is considered as advised by the company which is in line with the industry practice consideringpromotion and demand and supply of the employees.

7. Audit Fees paid to auditor Rs.0.75 lac (Previous year Rs. 0.50 lac)

8. Balance of Sundry creditors, sundry debtors and advances are partly confirmed.

9. CIF value of imports is Rs.55,167.41 lacs (Previous year Rs. 22,418.56 lacs). Expenditure in foreign currency for exportRs. 0.24 lac (Previous year 0.11 lac).

10. FOB Value of exports is Rs. 24,254.73 lacs (Previous year Rs.5,163.98 lacs). Income in foreign currency for claim &settlement is Rs. 49.88 lacs (Previous year Rs. 1.25 lacs).

11. In the opinion of Board of directors, the current assets, loans and advances have value on realisation in the ordinarycourse of business, at least equal to the amount at which they are stated in the Balance Sheet.

12. During the year, the company has availed buyers’ credit. The amount of Rs. 37,001.63 lacs (Previous year Rs.12,069.26lacs) outstanding on account of buyers’ credit as at 31st March, 2008, is guaranteed by banks against fixed depositsaggregating to Rs.37,750.00 lacs (Previous year Rs.12,610.00 lacs) placed with them. In the balance sheet the saidamount of Rs. 37,001.63 lacs has been included under unsecured loan from banks in Schedule no. 4 and the aforesaidfixed deposits are included under bank balances with scheduled banks in deposit account in Schedule no. 7.

13. Amount due to small scale & ancillary industrial undertaking (to the extent identified by the Company on basis ofinformation available) along with interest payable under the Interest on Delayed Payments to Small Scale & AncillaryUndertaking Act, 1993 is Rs. Nil (Previous year Rs.Nil).

14. The Company is engaged in merchandising activities. No other activity qualifies as a reportable segment in terms ofAS – 17 issued by the Institute of Chartered Accountants of India. Hence, the disclosure requirement of AS – 17 is notapplicable.

107

15. Disclosure of Related party transactions as per AS-18 :

List of Related Parties and relationships

Party Name Relation

1) Holding and Subsidiary CompaniesRuchi Soya Industries Ltd Holding Company

2) Entities where individuals having significant influence over the Company, have significant influence.

Shiva Foundation

Particulars of Transactions with Related Parties : (Rs. in lacs)

Particulars 1 2

2007-08 2006-07 2007-08 2006-07

Purchase of Goods — 2,264.91 — —

Sale of Goods 50,724.20 15,975.73 — —

Guarantee and collaterals — 8,832.00 — —

Processing Charges Paid — 35.00 — —

Amount Receivable — 1,181.54 — —

Amount Payable 206.66 — — —

16. Earning per share 2007-08 2006-07

A) Weighted Average number of equity shares of Rs. 10/- each :Equity shares as at beginning of the year 1,89,40,700 19,40,700Adjustment for shares issued during the year — 46,575Weighted average number of equity shares 1,89,40,700 19,87,275

B) Profit after tax (Rs. in lacs) 660.32 340.57Less : Preference Dividend including tax thereon — 29.97Profit attributable to equity shareholders (Rs. in lacs) 660.32 310.60

C) Basic & diluted earning per share (Rs.) 3.49 15.63

17. I. Information relating to derivative instruments :

The Company uses foreign currency/forward contracts to hedge its risks associated with foreign currency fluctuationsrelating to certain firm commitments and forecasted transactions. The company does not use forward contracts forspeculative purposes.

The following are the outstanding Forward Exchange Contracts entered into by Company as on 31st March, 2008

No. of Contracts USD Equivalent INR Equivalent(in lacs) (in lacs)

2007-2008 2006-2007 2007-2008 2006-2007 2007-2008 2006-2007

Amount Payable in foreign currency

on account of the following :

Import of goods and services 25 9 1214.49 163.16 48506.76 7203.18

Loans and interest payable — 13 — 270.17 — 12194.45

Covers against Exports 25 — 192.63 — 7687.24 —

108

II. Foreign exchange currency exposure not covered by derivative instrument or otherwise are given below :

US Dollar Equivalent INR Equivalent(in lacs) (in lacs)

2007-2008 2006-2007 2007-2008 2006-2007

Amount payable in foreign currency

on account of the following :

Import of goods and services 5.81 48.50 233.31 2118.93

Loans and interest payable — 3.52 — 152.66

Covers against Exports — — — —

JAPANESE YEN Equivalent INR Equivalent(in lacs) (in lacs)

2007-2008 2006-2007 2007-2008 2006-2007

Amount payable in foreign currency

on account of the following :

Import of goods and services — — — —

Loans and interest payable — 24.00 — 8.94

Covers against Exports — — — —

18. Disclosures pursuant to Clause 32 the Listing Agreements :

(a) Loans & advance in the nature of loans to subsidiary : Not applicable

(b) Loans & advance in the nature of loans to associates : Nil

(c) Loans & advances in the nature of loans where there is norepayment schedule or repayment beyond seven years : Nil

(d) Loans & advances in the nature of loans where there is nointerest or interest below Section 372 A of the Companies Act, 1956 : Nil

(e) Loans or advances in the nature of loans to Companies in whichdirectors are interested : Nil

(f) Investment by the loanee in the shares of the company, when thecompany has made a loan or advance in the nature of loan : Nil

19. Previous year's figures have been regrouped wherever necessary.

20. Additional information as required under part IV of schedule VI to the Companies Act, 1956 is attached.

As per our report of even date attached For and on behalf of the Board of Directors

For M. M. SINGLA & CO. DINESH SHAHRAChartered Accountants Director

(MURLI M. SINGLA)Proprietor S.P. JOSHI(Membership No. 40366) DirectorMumbai, 28th August, 2008 Mumbai, 28th August, 2008

109

CASH FLOW STATEMENT ANNEXED TO BALANCE SHEET AS AT 31ST MARCH, 2008

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

A. CASH FLOW FROM OPERATING ACTIVITIESNet profit as per profit and loss account 1,017.25 508.07Adjustment for :Depreciation 2.15 2.14Interest paid 978.81 769.29Provision for gratuity 1.69 —Miscellaneous expenditure written off 1.23 1.54Interest received (1,198.15) (706.79)Provision for Income tax written off 0.01 —

(214.26) 66.18

Operating profit before adjusting for the 802.99 574.25changes in working capital

Adjustments for :Decrease/(increase) in inventories (6,960.14) (242.10)Decrease/(increase) in debtors (233.61) (2,593.89)Decrease/(increase) in other current assetsincluding loans and advances (2,977.90) (593.93)Increase in liabilities 5,570.94 1,200.24

(4,600.71) (2,229.68)

Cash flow from operations (3,797.72) (1,655.43)

Taxes paid (net of refund) (257.96) (167.91)

NET CASH FROM OPERATING ACTIVITIES (4,055.68) (1,823.34)

B. CASH FLOW FROM INVESTING ACTIVITIES

Interest received 1,198.15 706.79Purchase of fixed assets (2.02) (0.21)

NET CASH USED IN INVESTING ACTIVITIES 1,196.13 706.58

C. CASH FLOW FROM FINANCING ACTIVITIESIssue of Equity shares — 1,700.00Issue of Preference shares (net of redemption) — (500.00)

Expenses of issue of Equity Shares — (1.54)

Increase/(decrease) in secured/unsecured loans 29,089.70 11,851.80Dividend paid — (29.97)

Interest paid (978.81) (769.29)NET CASH FROM FINANCING ACTIVITIES 28,110.89 12,251.00

Net increase in cash and cash equivalents (A+B+C) 25,251.34 11,134.24Opening balance of cash and cash equivalents 12,797.41 1,663.17

Closing balance of cash and cash equivalents 38,048.75 12,797.41

Increase in cash or cash equivalents 25,251.34 11,134.24

As per our report of even date attached For and on behalf of the Board of Directors

For M. M. SINGLA & CO. DINESH SHAHRAChartered Accountants Director

(MURLI M. SINGLA)Proprietor S.P. JOSHI(Membership No. 40366) DirectorMumbai, 28th August, 2008 Mumbai, 28th August, 2008

110

BALANCE SHEET ABSTRACT AND THE COMPANY’S GENERAL BUSINESS PROFILE

I. Registration details :State code 1 1

Registration Number (CIN) U15499MH1996PLC100016

Balance Sheet Date 3 1 0 3 2 0 0 8

Date Month YearII. Capital raised during the year (Amount in lacs)

Public Issue Initial & Right Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III. Position of mobilisation and deployment of funds (Amount in lacs)

Total Liabilities Total Assets

4 7 1 0 8 . 6 4 4 7 1 0 8 . 6 4

Sources of FundsPaid-up Capital Reserve and Surplus

1 8 9 4 . 0 7 2 1 8 7 . 4 4

Secured Loans Unsecured Loans

6 0 2 5 . 5 0 3 7 0 0 1 . 6 3

Application of FundsNet Fixed Assets Investments

5 . 7 9 N I L

Net Current Assets Misc. Expenditure

4 7 0 9 7 . 4 4 4 . 9 3

Deferred Tax

0 . 4 8

IV. Performance of the Company (Amount in lacs)

Sales and Other Income Total Expenditure

1 1 5 8 6 2 . 5 5 1 1 4 8 4 5 . 3 0

Profit Before Tax Profit After Tax

1 0 1 7 . 2 5 6 6 0 . 3 2

Earning per share (Rs.) Dividend Rate (%)

3 . 4 9 N I L

V. Generic Names of principal / services of the Company (as per monetary terms)

Item Code No. (ITC Code) Not applicable

Product Description Not applicable

As per our report of even date attached For and on behalf of the Board of Directors

For M. M. SINGLA & CO. DINESH SHAHRAChartered Accountants Director

(MURLI M. SINGLA)Proprietor S.P. JOSHI(Membership No. 40366) Director

Mumbai, 28th August, 2008 Mumbai, 28th August, 2008

ATTENDANCE SLIP

RUCHI SOYA INDUSTRIES LIMITEDRegistered Office : 408, Tulsiani Chambers, Nariman Point, Mumbai - 400 021

(PLEASE COMPLETE THIS SLIP AND HAND IT OVER AT THE ENTRANCE OF MEETING HALL)

TWENTY SECOND ANNUAL GENERAL MEETING

at Sunville Deluxe Pavilion, Sunville Building, 9, Dr. Annie Besant Road, Worli, Mumbai - 400 018 on Tuesday,September 30, 2008 at 10.30 a.m.

Member’s Name (in capital letters) .........................................................................................................................................

Folio No. ................................................................ No. of Shares held...............................................................................

Member’s Signature

Proxy’s Name (in capital letters) ...........................................................................................................................................

Proxy’s Signature

————————————————————————— CUT HERE ——————————————————————

PROXY

RUCHI SOYA INDUSTRIES LIMITEDRegistered Office : 408, Tulsiani Chambers, Nariman Point, Mumbai - 400 021

I/We..................................................................................................................................................................of

........................................................................................................................................................................................................

being a member/s of the Company, hereby appoint .................................................................................................

of ............................................................................... in District of .......................................................................

or failing him.................................................. of ............................................. in the District of ..............................................

or failing him........................................... of ......................................... in the District of ........................................

as my/our Proxy to vote for me / our behalf at the Twenty Second Annual General Meeting of the Company to be held onTuesday, September 30, 2008 and at any adjournment thereof.

My/Our Registered Folio No.is .............................................................................

Signed this ...................................... day of ............................................. 2008.

————————————————————————— CUT HERE ——————————————————————

BANK MANDATE PARTICULARS

RUCHI SOYA INDUSTRIES LIMITEDRegistered Office : 408, Tulsiani Chambers, Nariman Point, Mumbai – 400 021

Dear Shareholders,

The Board of Directors has recommended a dividend of 25% on equity shares for the financial year 2007-2008. Members,holding shares in physical mode, may provide the particulars mentioned below and confirm to avail Electronic ClearanceServices (ECS) for payment of dividend declared, if any.It may be noted that payment of dividend declared, if any to the members holding shares in dematerialised form will bethrough ECS based on their particulars noted with depository participants. Such members need not to provide theunder-mentioned particulars.Please fill in the following particulars and send to the Company or its Registrar and Share Transfer Agent.

I/We opt for payment of dividend declared, if any for the financial year 2007-2008 by way of electronic credit to my/our bankaccount, the particulars of which and my/our shareholding are as under :

1. Folio Number : —————————————————————————

2. Name & Address : —————————————————————————

3. No. of shares held : —————————————————————————

4. Name & Address of Bank : —————————————————————————

5. MICR Code (9 digits code) : —————————————————————————

6. Type and Number of Account :————————————————————————————————————

Member’s Signature

RevenueStamp

✄