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Ruchi Soya Industries Ltd.

BSE: 500368 Sector: Industrials
NSE: RUCHISOYA ISIN Code: INE619A01027
BSE 00:00 | 21 Feb 5.91 0.04
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5.85

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5.95

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5.80

NSE 00:00 | 21 Feb 5.85 0
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OPEN

5.75

HIGH

5.95

LOW

5.75

OPEN 5.85
PREVIOUS CLOSE 5.87
VOLUME 85683
52-Week high 19.40
52-Week low 4.89
P/E
Mkt Cap.(Rs cr) 197
Buy Price 5.85
Buy Qty 51710.00
Sell Price 5.99
Sell Qty 2000.00
OPEN 5.85
CLOSE 5.87
VOLUME 85683
52-Week high 19.40
52-Week low 4.89
P/E
Mkt Cap.(Rs cr) 197
Buy Price 5.85
Buy Qty 51710.00
Sell Price 5.99
Sell Qty 2000.00

Ruchi Soya Industries Ltd. (RUCHISOYA) - Auditors Report

Company auditors report

To the Members of

Ruchi Soya Industries Limited (A Company under corporate insolvencyresolution process vide NCLT order)

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying Standalone financial statements of RuchiSoya Industries Limited (‘the Company') which comprise the Balance Sheet asat 31st March 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information. (hereinafter referred to as "the Standalone FinancialStatements") The Hon'able National Company Law Tribunal ("NCLT")Mumbai Bench admitted petition for initiation of Corporate Insolvency Process("CIRP") u/s 7 of the Insolvency and Bankruptcy Code 2016 ("theCode") filed by financial creditors vide order no. CP1371 &CP1372/I&BP/NCLT/MAH/2017 delivered on 15th December 2017 and appointed anInterim Resolution Professional ("IRP") to manage affairs of the Company inaccordance with the provisions of Code. The Committee of Creditors of the Company in itsmeeting held on 12th January 2018 confirmed the IRP as Resolution Professional("RP") for the Company. In view of pendency of the CIRP the management ofaffairs of the Company and power of Board of Directors are now vested with RP. TheseStandalone Financial Statements have been prepared by the management of the Company andCertified by Mr. Anil Singhal Chief Financial Officer and Mr. R. L. Gupta CompanySecretary and approved by RP.

MANAGEMENT'S AND RESOLUTION PROFESSIONAL'S RESPONSIBILITY FORTHE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (‘the Acf) with respect to thepreparation of these Standalone financial statements that give a true and fair view offinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (‘IndAS') prescribed under Section 133 of the Act read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these Standalonefinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.

We conducted our audit of Standalone financial statement in accordancewith the Standards on Auditing specified under Section 143 (10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether these Standalone financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the Standalone financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Standalone financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlsrelevant to the Company's preparation of the Standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany's Directors/Management/Resolution Professional as well as evaluating theoverall presentation of the Standalone financial statements.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on these Standalone financialstatements.

BASIS FOR QUALIFIED OPINION

(i) As mentioned in Note no. 45 of the Standalone Financial Statementno impairment assessment of tangible and intangible assets in carrying value as at 31stMarch 2018 is made. Therefore we are unable to comment on consequential impairment ifany that is required to be made in carrying value of property plant and equipment andintangible assets.

(ii) Attention is drawn to Note no. 46 of the Standalone FinancialStatement wherein it is stated that trade receivables are higher by Rs 1189.24 Lakh as at31st March 2018 since equivalent amounts offunds remitted by the customer isnot credited by bank in Company' accounts.

(iii) Attention is drawn to Note no. 47 of the Standalone FinancialStatement regarding non-availability of Demat Statement in respect of investmentsamounting to Rs 1417.98 Lakh as at 31st March 2018. Accordingly we areunable to comment on thepossible financial impact presentation and disclosures relatedto those investments.

(iv) As mentioned in Note no. 48 of the Standalone FinancialStatement:-

(a) In respect of Company's borrowings from banks andfinancialinstitutions aggregating Rs 659929.75 Lakh bank (current account and termdeposits) balances aggregating Rs 17882.96 Lakh bank guarantee given by theCompany aggregating to Rs 2947.99 Lakh independent balance confirmations as at 31st March2018 is not received.

(b) As a part of CIRP creditors were called upon to submit theirclaims. In aggregate claims submitted by the Financial Creditors exceeded the amount asappearing in the books of accounts. Theprocess of submitting claims is still going on andit is also under reconciliations with amount as appearing in the books of accounts.Pending reconciliations andfinal outcome of the CIRP no accounting impact in the books ofaccounts has been made in respect of excess short or non-receipts of claims foroperational and financial creditors. Hence consequential impact if any on theStandalone financial statements is not currently ascertainable.

(v) Attention is drawn to Note No. 49 of Standalone FinancialStatement:-

(a) Regarding non-recognition of interest amounting to Rs 34561.14Lakh subsequent to Insolvency Commencement Date i.e. 15th December 2017 onborrowing from banks and financial institutions customer advances inter corporatedeposits and security deposits received which is not in compliance with requirements ofIndAS - 23 on "Borrowing Cost" read with Ind AS - 109 on "FinancialInstruments".

(b) The Company has not translated foreign currency trade payablescertain trade receivables borrowings and customer advance as at 31st March2018 using closing exchange rate having an impact on exchange difference loss of Rs 1926.86Lakh. The same is not in compliance with Ind AS — 21 on "The Effects of Changesin Foreign Exchange Rates"

(c) Had provision for interest and exchange difference would berecognised finance cost total expenses loss for the year and total comprehensive incomewould have been higher by Rs 36488.00 Lakh having consequential impact on other currentfinancial liability and other equity

(vi) We have been informed by Resolution Professional that certaininformation including the minutes of meetings of the Committee of Creditors and theoutcome of certain procedures carried out as a part of the CIRP are confidential in natureand could not be shared with anyone other than the Committee of Creditors and NCLT.Accordingly we are unable to comment on thepossible financial impact presentation anddisclosures if any that may arise if we have been provided access to those information.

QUALIFIED OPINION

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matter described inParagraphs above "Basis for Qualified Opinion" the aforesaid Standalonefinancial statements give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India including Ind AS specified under Section 133 of the Act of thefinancial position of the Company as at 31st March 2018 and its financialperformance including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

EMPHASIS OF MATTERS

(i) We draw attention to the Note no. 44 of the Standalone FinancialStatement regarding preparation of Standalone financial statements on going concernbasis which states that the Company has incurred cash losses its liabilities exceededtotal assets and its net worth has been fully eroded as on 31st March 2018. Inview of the continuing default in payment of dues certain lenders have sentnotices/letters recalling their loans given and called upon the Company to pay entire duesand other liability receipt of invocation notices of corporate guarantees given by theCompany while also invoking the personal guarantee of promoter director. Few of thelenders also issued willful defaulter notices and filed petition for winding up of theCompany. Capacity utilization of manufacturing processing facilities is very low andCorporate Insolvency Process against the Company is in process. Since the CIRP iscurrently in progress as per the Code it is required that the Company be managed as agoing concern during the CIRP. The Standalone financial Statements is continued to beprepared on going concern basis. However there exists material uncertainty about theCompany's ability to continue as going concern since the same is dependent upon theresolution plan to be formulated and approved by NCLT. The appropriateness of preparationof Standalone Financial Statements on going concern basis is critically dependent uponCIRP as specified in the Code.

(ii) Attention is drawn to Note No. 33 (A) (c) (ii) of the StandaloneFinancial Statement regarding impounding of three plants at Kandla Gujarat i.e. EdibleOil Refinery Oleochem Division and Guargum Division by the Gujarat Commercial TaxDepartment against their VAT claim of Rs 405.19 Crore.

Our Opinion is not modified in respect of the above said matters.

OTHER MATTERS

(i) The standalone financial statement of the Company for the yearended 31st March 2017 were audited by PD. Kunte & Co. Chartered Accountants (Firmregistration no. 105479W) who expressed modified opinion dated 30 May 2017.

(ii) We did not audit the financial statements of two branches ofCompany at Peddapuram and Ampapuram included in the Standalone Financial Statements whichreflect total assets of Rs 40012.81 Lakh as at 31st March 2018 and totalrevenues of Rs 41505.16 Lakh for the year ended on that date and net cash outflows of Rs549.76 Lakh. The financial statements of these branches have been audited by the branchauditors whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of these branches is based solely onthe report of the branch auditors.

Our opinion is not modified in respect of above said matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act ("the Order") and on the basis of such checks of the books and recordsof the Company as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. Further to our comment in the Annexure A as required by Section 143(3) of the Act we report that:

a. We have sought and for matters described in the Basis forQualified Opinion paragraph above have obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b. Except for the possible effects of the matters described in theBasis for Qualified Opinion paragraph above in our opinion proper books of accountas required by law have been kept by the Company so far as it appears from our examinationof those books;

c. The reports on the accounts of the branch offices of the Companyaudited under Section 143(8) of the Act by branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report;

d. The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the Cash Flow Statement and the Statement of Changes in Equitydealt with by this report are in agreement with the books of account and returns receivedfrom branches not visited by us;

e. Except for the possible effects of the matters described in theBasis for Qualified Opinion paragraph above in our opinion the aforesaid Standalonefinancial statements comply with Ind AS prescribed under Section 133 of the Act read withrelevant rules there under;

f. On the basis of the written representations received from thedirectors of the Company as on 31st March 2018 and taken on record in themeeting of RP we report that none of the directors is disqualified as on 31stMarch 2018 from being appointed as a director in terms of Section 164(2) of the Act;

g. The matters described in the Basis for Qualified Opinion paragraphabove and matters described in paragraphs above under the Emphasis of Matters in ouropinion may have an adverse effect on the functioning of the Company;

h. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B";

i. The qualifications relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion paragraphabove;

j. With respect to the other matters to be included in theAuditor's report in accordance with Rule 11 of the Companies (Audit andAuditor's) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us:

i. The Company as detailed in Note no. 33 to the Standalone financialstatements has disclosed the impact of pending litigations on its financial position.

ii. The Company has made provision as required under applicable law oraccounting standard for material foreseeable losses if any on long term contractsincluding derivative contracts.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Vijay Napawaliya
Place: Mumbai Partner
Date: 7th June 2018 Membership No. 109859

"Annexure A" to Independent Auditors' Report

(Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members of the RuchiSoya Industries Limited on the Standalone financial statements for the year ended 31stMarch 2018)

(i) In respect of fixed assets:-

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of the fixed assets.

(b) As explained to us the fixed assets are physically verified by themanagement during / at the end of the year which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such physical verification as compared with the available records.

(c) In our opinion and according to information and explanations givento us and on the basis of our examination of available records of the Company the titledeeds of immovable properties are held in the name of the Company except the following :-

Particulars Leasehold Land Freehold Land Total
No. of cases 1 3 4
Gross Block as on 31st March 2018 71.55 110.05 181.60
Net Block as on 31st March 2018 110.05 110.05

(ii) In respect of its inventories:-

As explained to us inventories have been physically verified duringthe year by the management except goods in transit and stocks with third parties. In ouropinion the frequency of verification is reasonable. Discrepancies noticed on physicalverification of the inventories between the physical inventories and book records were notmaterial having regard to the size of the operations of the Company and the same havebeen properly dealt with.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Therefore the provision ofparagraph 3 (iii) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not made any loan investment and guaranteesto any person specified under section 185 and section 186 of the Companies Act 2013.Therefore the provisions of paragraph 3(iv) of the Order are not applicable to theCompany.

(v) The Company has not accepted any deposits from the public withinthe meaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under tothe extent notified. During the year no order has been passed by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

(vi) Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

(vii) (a) According to the records of the Company and information andexplanations given to us the Company has generally been regular except slight few delaysin few cases in depositing undisputed statutory dues including provident fundemployees' state insurance income tax sales-tax service tax duty of customs dutyof excise value added tax goods and service tax cess and any other statutory dues tothe appropriate authorities as applicable during the year. According to the informationand explanations given to us no undisputed amounts payable in respect of such statutorydues were outstanding as at 31st March 2018 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of income-tax sales-taxservice-tax duty of customs duty of excise value added tax and goods and service taxwhich have not been deposited on account of any dispute except as mentioned below:-

Name of the Statute Nature of Dues Amount Disputed Amount deposited under Protest Period to which Dispute Relates Forum where Dispute is Pending
The Central Sales Tax Act 1956 VAT Act and Local Sales Tax Acts Vat Tax/Sales Tax/ Entry Tax/Sales Tax Demand and penalty as applicable 16220.05 633.63 1999 & 2000-03 2003-2009 2010-11 & 2012-18 High Court
7722.31 606.77 1997981999-2000 2000-012002-2014 Tribunal (CESTAT)

 

Name of the Statute Nature of Dues Amount Disputed Amount deposited under Protest Period to which Dispute Relates Forum where Dispute is Pending
3290.70 751.46 2001 to 2016 Commissioner Appeals
59783.67 917.02 1999 to 2018 DC Appeals / Joint Commissioner (Appeals)
525.68 28.97 2002-2006 Settlement Commission
The Central Excise Act 1944 Excise Duty 454.79 6910.33 14.89 29.55 2004-05 2005-06 2001-02 to 2014-15 High Court Tribunal
144.44 2.58 2005-06 to 2014-15 Commissioner (Appeals)
Service Tax under Finance Act 1994 Service Tax 1168.36 29.14 2002-03 2008-09 to 2012-13 Tribunal
227.23 7.8 2006-07 to 2013-14 2014-15 Commissioner (Appeals)
The Customs Duty Act 1962 Custom Duty 5003.43 108.16 2001-022002-03 2003-04 & 2015-16 Supreme Court
5663.99 92.78 2001-02 to 2004-05 2006-07 2007-08 and 2015-16 High Court
16795.90 18.69 1998-99 2000-2001 2003-04 to 2006-07 and 2012-13 to 2013-14 Tribunal CESTAT
247.91 2.00 2003-04 2005-06 2006-07 2013-14 Commissioner (Appeals)
1738.30 556.31 2001-02 2004-05 & 2009-10 AC Appeals / DC Appeals
The Income Tax Act 1961 Income Tax 1944.03 627.92 2007-08 to 2013-14 Commissioner Appeals
50.32 2007-08 DC Appeals / Joint Commissioner(Appeals)
57.59 2006-07 to 2014-15 Assessment
Total 127949.03 4427.67

(viii) According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank and government as at balancesheet date except as mentioned below. There are no dues to debenture holders as at thebalance sheet date.

A. In respect of Term loans from banks:

Particulars

Amount of continuing default as on 31st March 2018

Principal Interest * Period of Default
TERM LOAN-STATE BANK INDIA. (CORP-IV) 8999.62 1382.29 As per Recall Notice vide dated April 072017
TERM LOAN-STATE BANK INDIA-65CR. G'GUM 2578.66 371.11 As per Recall Notice vide dated April 072017
TERM LOAN-STATE BANK OF INDIA (CTL-V ) 17000.00 2656.78 As per Recall Notice vide dated April 072017
TERM LOAN-STATE BANK OF INDIA-60CR 3531.02 642.43 As per Recall Notice vide dated April 072017
ECB-DBS BANKSINGAPORE (ECB - II & III) 22177.15 2074.55 As per Recall Notice vide dated September 232016
FCCB-STANDARD CHARTERED BANK -SCB 3190.27 295.82 As per Recall Notice vide dated January 252017
Total 57476.72 7422.99

* Interest accrued up to 15th December 2017

B. In respect of Short term loans from various banks:

Particulars

Amount of continuing default as on 31st March 2018

Principal Interest * Period of Default
State Bank of India — Group 129732.69 15275.34 As per Recall Notice vide dated 07.04.2017
Central Bank of India 43114.83 2851.25 As per Recall Notice vide dated 05.09.2016
Punjab National Bank 61749.75 1184.39 Financial Year 2016-17 to 2017-18
Standard Chartered Bank 35152.41 As per Recall Notice vide dated 25.01.2017
Corporation Bank 45020.49 5593.23 As per Recall Notice vide dated 01.07.2017
ICICI Bank Limited 39090.14 15.38 Financial Year 2015-16 to 2017-18
IDBI 46497.00 3529.00 As per Recall Notice vide dated 30.05.2017
Bank of India 30501.39 4825.92 As per Recall Notice vide dated 31.07.2017
UCO Bank 29070.15 5100.41 As per Recall Notice NPA w.e.f.23.09.2016
Union Bank of India 24016.46 5060.88 As per Recall Notice vide dated 11.08.2017
Syndicate Bank 25785.80 3013.11 As per Recall Notice vide dated 08.05.2017
Bank of Maharashtra 23252.67 3102.69 Financial Year 2015-16 to 2017-18
Axis Bank Limited 24131.59 1379.91 As per Recall Notice vide dated 13.11.2017
Bank of Baroda 21683.54 1991.16 As per Recall Notice vide dated 25.09.2017
IDFC - Edelweiss ARC 19303.21 3863.85 As per Recall Notice vide dated 07.05.2016
Dena Bank 18877.01 2672.99 As per Recall Notice NPA w.e.f.31.03.2017
Karur Vysya Bank 8737.75 42.00 Financial Year 2015-16 to 2017-18
HDFC Bank 13501.51 2768.40 Financial Year 2013-14 to 2017-18
Oriental Bank of Commerce 12876.00 1145.00 As per Recall Notice NPA w.e.f.01.06.2016
Rabo Bank 72977.30 4862.68 As per Review Letter vide dated 10.08.2016
DBS Bank — India 2944.74 269.91 As per Recall Notice vide dated 27.09.2016
ANZ** 19005.65 713.79 Financial Year 2015-2016 (As per endorsement)
TOTAL 747022.08 69261.29

* Interest accrued up to 15th December 2017

C. In respect of sales tax deferment:

Particulars Amount of Continuing default as on 31st March 2018 Period of default
IFST Deferral scheme of Government Tamilnadu 56.87 Outstanding since December 2017 — Monthly payment.

(ix) According to the information and explanations given to us theCompany did not raise any moneys by way of initial public offer further public offer(including debt instruments) and no term loans was raised during the year. Therefore theprovisions of Clause 3(ix) of the Order are not applicable to the Company.

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to

us we have neither come across any instance of material fraud by theCompany or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of any such case by the Management/ RP. However we havebeen informed that Company has received communication dated 10th May 2018 fromSerious Fraud Investigation Office Ministry of Corporate Affairs New Delhi regardinginvestigation into the affairs of the Company under section 212 (1) of the Companies Act2013.

(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid or provided managerial remuneration in accordance withthe requisite approvals mandated by the provision of section 197 read with Schedule V tothe Act.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.

(xiii) The Company has entered into transactions with related partiesin compliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedin the Companies (Indian Accounting Standards) Rules 2015 (as amended) under Section 133of the Act.

(xiv) During the year the Comp any has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Therefore the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him. Therefore the provisions of Clause 3(xv) of the Order are not applicable to theCompany.

(xvi) The Company is not required to be registered under section 45-1Aof the Reserve Bank of India Act 1934.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Vijay Napawaliya
Place: Mumbai Partner
Date: 7th June 2018 Membership No. 109859

"Annexure B" to the Independent Auditors' Report

Referred to in paragraph 2(h) under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members of theRuchi Soya Industries Limited on the Standalone financial statements for the year ended 31stMarch 2018.

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")

We have audited the internal financial controls over financialreporting of Ruchi Soya Industries Limited ("the Company') as of 31stMarch 2018 in conjunction with our audit of the Standalone financial statements of theCompany for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing andmaintaining internal financial controls b ased on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management directors and RP of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a materialeffect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

According to the information and explanations given to us and based onthe audit of test of controls except for strengthening of documentation of policiesregarding delegation of authority and access rights to financial records and process ofarchival of records and periodic review which we are informed that is in process in ouropinion the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2018 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Chaturvedi & Shah
Chartered Accountants
Firm Registration No. 101720W
Vijay Napawaliya
Place: Mumbai Partner
Date: 7th June 2018 Membership No. 109859