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Directors Report of IFB Agro Industries Ltd.

Mar 31, 2013

To the Shareholders,

The Directors have pleasure in presenting the 31st Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2013.

1. FINANCIAL RESULTS

(Rs. in lacs)

Year ended Year ended 31.03.2013 31.03.2012

Revenue from Operation 66536.08 61180.00

Profit prior to Finance charges & Depreciation 5071.69 5116.58

Less : Finance charges 38.14 36.12

Depreciation 1123.38 1263.85

Profit before Taxation 3910.17 3816.61

Less: Provision for Taxation:

Current Tax 1461.65 1334.76

Deferred Tax (216.77) (172.83)

Less : Income Tax adjustment for earlier years 45.27 (0.02)

Profit after Tax 2620.02 2654.70



2. DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year under review to conserve the resources for working capital and capital expenditure projects.

3. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Mr Sudip Kumar Mukherji and Mr Hari Ram Agarwal retire by rotation and being eligible, offer themselves for re-appointment.

The details about their qualification, other directorships etc. as per Clause 49 of the Listing Agreement are provided separately and annexed to the notice.

4. CHANGE IN SHARE CAPITAL

During the year, 998000 equity shares of Rs 10/- each were allotted to the promoter group on Preferential allotment basis at a premium of Rs 172/- per share. The allotment was made on 22nd February, 2013 and the shares so issued are under lock-in till February 21, 2016 and will rank pari passu with the existing Ordinary Shares of your Company.

5. DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OFTHE COMPANIESACT, 1956.

The Directors, having ensured through the Officer designated for the purpose, hereby confirm:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the Directors have prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a report on Corporate Governance and the Auditors'' Certificate in this regard form part of this report and are annexed herewith.

7. AUDITORS & AUDITORS'' REPORT

The Auditors of the Company M/s. Walker, Chandiok & Co., Chartered Accountants retire at the ensuing Annual General Meeting have given their consent for appointment and have also confirmed that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Cost Auditors

The Company has appointed M/s N Radhakrishnan & Co., Cost Accountants for conducting Cost Audit for the financial year 2013-14. The Cost Auditors have confirmed that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956.

8. SUBSIDIARY

The Company has no subsidiary as at the end of financial year.

9. HUMAN RESOURCE

The Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and for their co-operation.

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report.

10. ENVIRONMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has in place a system for controlling and monitoring pollutants at all factories in order to comply with environmental standards and legislation. Your Company is committed to ensuring green and pollution free environment as well as clean and safe workplace at all the plant locations.

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant particulars are given in the Annexure to this report.

11. ACKNOWLEDGEMENT

Your Directors express their sincere thanks and place on record their deep appreciation for the patronage extended by the shareholders, valued customers, financial institutions, bankers, government authorities and the investors for their continued support and confidence in the Company.

On behalf of the Board

Bikram Nag A. K. Banerjee

Joint Executive Chairman Managing Director

Kolkata, 30th May, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 30th Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2012.

1. FINANCIAL RESULTS (Rs. in lacs)

Year ended Year ended 31.03.2012 31.03.2011

Sales and Other Income (incl. Excise Duty) 75627.03 58471.24

Profit prior to Finance charges & Depreciation, amortization and impairment 5116.58 3627.58

Less : Finance charges 36.12 184.11

Depreciation 1263.85 820.57

Profit before Taxation 3816.61 2622.90

Less: Provision for Taxation:

Current Tax 1334.74 930.14

Deferred Tax (172.81) (89.76)

Less : Income Tax adjustment for earlier years (0.02) 0.11

Profit after Tax 2654.70 1782.41

Balance carried to Balance Sheet 2654.70 1782.41

2. MANAGEMENT DISCUSSION & ANALYSIS

OVERALL PERFORMANCE

During the year under review your Company has recorded gross turnover of Rs.756.27 crores (as against Rs.584.71 crores in 2010-11) recording a growth of 29.34%.

The Company has achieved profit before tax of Rs 38.16 crore as against Rs 26.23 crore, and net profit of Rs 26.55 crore as against Rs 17.82 crore in the previous year. During the year, the Durgapur bottling plant of the Company was closed down based on the Government directive to relocate for which the company has incurred Rs 2.85 crore towards Employees Separation scheme. The assets of the molasses distillery have been impaired based on its realizable value and a loss of Rs 3.48 crore has been charged to the accounts.

Better working capital management and ploughing back of profits has reduced the interest cost during the year. The company is almost debts free now.

Earning per equity share is Rs.33.15 as compared to Rs.22.26 per share in previous year.

REVIEW OF DIVISIONAL PERFORMANCES Alcohol and Bottling:

The molasses distillery operated only for few days in the year with small quantity of local molasses available in the State of West Bengal. Pursuant to discontinuation of the molasses transportation cost reimbursement policy by the State Government and operation of the Distillery becoming un-viable, it was planned to convert the molasses distillery into multi feed distillery subject to the approval of the State Government. Pending such approval the machineries are lying idle and un-utilized for more than a year. The assets of the molasses plant which will not be used on conversion have been impaired at its realizable value.

The grain distillery operated at 110% of the capacity and with efficient purchase of raw material and reduction in overhead, the margins improved during the year. Further storage capacity has been built up at Noorpur for storing grains which will reduce the storage cost as well as the wastage. Investment has also been made in the distillery by enhancing the capacity of the turbines to generate more cheap power. The Company could not obtain CDM benefits due to non availability of rice husk within the state.

After abolition of Privilege area by the State Government in the Country Spirit segment, the production capacity was enhanced by setting up a new bottling plant, with two bottling lines, at Panagarh in West Bengal. Further capacity expansion at Panagarh is under process and will be completed in financial year 2012-13. The bottling plant at Durgapur was closed during the year and the workmen were given a separation scheme which costed Rs 2.85 cr to the company.

On IMFL, your Company has suffered due to increase in the duties and taxes in the state of West Bengal, the demand in the regular segment has declined. Margins are declining due to high input cost and unable to increase the prices due to stiff competition. New brands viz., 'Jubilation' Rum, 'Leonov' luxury Vodka in Bengal and "Benjamin' brandy in Orissa was launched but could not achieve the desired volume due to stiff competition. Widespread market promotions are being held to re-build the position in the market.

Marine:

The Marine Division has performed well during the year. To increase export of value added products the Company has modernised its plant with new IQF Machines and other freezing equipment.

The Shrimp Feed trading business has recorded a growth of 26% in value and has a market share of 48% in West Bengal. "Aqua Shops" have been opened by the company for providing one window service to the farmers in terms of supply of feed, medicine, technology, finance, training etc. More such aqua shops are being planned to provide service to the farmers in the State of West Bengal.

"IFB ROYAL" Retail Brand of frozen Marine Products are now available in major METROS in the country, sale recorded a growth of 33% in value. The Company is in the process of developing more value added products for the Retail Consumers in the country.

OPPORTUNITIES & CHALLENGES:

The current accounting year will again be another year of tough challenges. The bumper sugarcane production in Uttar Pradesh will reduce the spirit cost during the year leading to lower margins on sale of spirit from the distillery. Setting up of new distilleries in neighboring states and new bottling plants in West Bengal is likely to bring about stiff challenge in future. The increase in Excise Duty in Country liquor segment is likely to reduce the margins in the current year.

The increased bottling capacity, once becoming fully operational will bring good opportunity to the Company by way of volume growth and market share in the Country Liquor segment.

The Company is continuing its efforts to attain further efficiencies in fermentation and distillation, improve upon its bio-gas generation to reduce fuel cost, and to further improve power generation to reduce the cost of production. The Company is giving continuous emphasis to cut costs on inputs, minimise wastages and make optimal use of human resources on all fronts.

In IMFL, the Company being a regional player in the industry faces a stiff competition from large Indian as well as multinational companies. Widespread promotion is being planned to make the newly launched brands, successful.

The Company targets to export more value added products and with the favorable currency rates, expects to be a good year for export market. With the overall global economic growth and better demand for frozen sea food it expects to have better demand for its Marine products in the domestic market. The Company plans to focus on aggressive marketing of its products in order to penetrate into householders' as well as retail segment in India.

Human Resources:

For the development of the human resources number of training programmes was organized during the year with outside faculties. Employees were also sent to the renowned technical institutes for continuous update on its knowledge and skill. However, the same is not sufficient considering the complexity of the today's business environment. The Company plans to organize more such training programmes for the overall development of people.. Total number of employees in the Company was 384 as on 31st March 2012 as against 430 as on 31st March 2011.

Internal Control System:

The Company maintains a system of internal control designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, compliance with applicable laws and regulations.

Cautionary Statement:

Statements in the Management's discussion and analysis describing the Company's projections, expectations or predictions may be 'forward - looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Company's operations include raw material prices, changes in government regulations, tax regimes and economic developments within the country and weather patterns.

3. DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year under review to conserve the resources for working capital and some capital expenditure projects.

4. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Mr A K Nag and Mr Nandan Bhattacharya retire by rotation and being eligible, offer themselves for re-appointment.

The details about their qualification, other directorships etc. as per Clause 49 of the Listing Agreement are provided separately and annexed to the notice.

5. DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956.

The Directors, having ensured through the Officer designated for the purpose, hereby confirm:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the Directors have prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and the Auditors' Certificate in this regard form part of this report and are annexed herewith.

7. AUDITORS & AUDITORS' REPORT

The Auditors of the Company M/s Haribhakti & Co., Chartered Accountants retire at the ensuing Annual General Meeting of the Company and have expressed their unwillingness to be re-appointed. M/s Walker, Chandiok & Co., Chartered Accountants has given their consent for appointment and have also confirmed that their appointment, if made, would be within the limits prescribed under Section 224(1)(B) of the Companies Act, 1956.

Observations made in the Auditors Reports have been adequately dealt with in the notes to the financial statements annexed to the Balance Sheet and Profit & Loss Account.

8. SUBSIDIARY

The Company has no subsidiary as at the end of financial year.

9. HUMANRESOURCE

The Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and for their co-operation.

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report.

10. ENVIRONMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has in place a system for controlling and monitoring pollutants at all factories in order to comply with environmental standards and legislation. Your Company is committed to ensuring green and pollution free environment as well as clean and safe workplace at all the plant locations.

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant particulars are given in the Annexure to this report.

11. ACKNOWLEDGEMENT

Your Directors express their sincere thanks and place on record their deep appreciation for the patronage extended by the shareholders, valued customers, financial institutions, bankers, government authorities and the investors for their continued support and confidence in the Company.

On behalf of the Board

Bikram Nag A. K. Banerjee

Joint Executive Chairman Managing Director

Kolkata, 29th May, 2012


Mar 31, 2011

The Directors have pleasure in presenting the 29th Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2011.

1. FINANCIAL RESULTS

Year ended Year ended

31.03.2011 31.03.2010

(Rs.000) (Rs.000)

Sales and Other Income (incl. Excise Duty) 58,47,788 41,95,568

Profit prior to Finance charges & Depreciation 3,62,758 1,73,868

Less : Finance charges 18,411 17,663

Depreciation 82,057 91,225

Profit before Taxation 2,62,290 64,980

Less: Provision for Taxation:

Current Tax 93,014 18,547

Deferred Tax (8,976) 3,160

Less : Income Tax adjustment for earlier years 11 (972)

Profit after Tax 1,78,241 44,245

Balance carried to Balance Sheet 1,78,241 44,245

2. MANAGEMENT DISCUSSION & ANALYSIS

OVERALL PERFORMANCE

During the year under review your Company has recorded gross turnover of Rs.584.78 crores (as against Rs. 419.56 crores in 2009-10) recording a growth of 39%.

The Company has achieved profit before tax of Rs 26.22 crore as against Rs 6.50 crores, and net profit of Rs 17.82 crore as against Rs 4.42 crores in the previous year. The release of transport cost reimbursement pertaining to 2008-09 from the West Bengal Government has helped in improving profitability for the year.

There is a marginal increase in Bank finance charges due to export packing credit obtained for export of marine products during the year. The term loan availed for new IMFL bottling plant at Dankuni was prepaid out of the surplus funds generated during the year.

Earning per equity share is Rs.22.26 as compared to Rs.5.53 per share in previous year.

REVIEW OF DIVISIONAL PERFORMANCES

Alcohol and Bottling :

The molasses distillery was operated at a much lower capacity and faced intermittent stoppage due to non availability of sufficient molasses at the economical price which is basic raw material of the Distillery. The discontinuation of the molasses transportation cost reimbursement policy by the State Government effective December 2010 has made the operation of the Distillery un-viable as the landed cost of Rectified Spirit from other States like Uttar Pradesh is cheaper.

With the increased price of grain along with the prices of fuel like husk, coal etc and electricity charges has affected the margins of the Grain Distillery. Due to non-availability of the broken rice in the local areas of West Bengal, the Company has to source the materials from other states which has increased transportation cost. To mitigate the risk of dependency on one grain i.e rice, the distillery during the year used other grains like jawar, bazra, maize etc which has given good results. The Company could not obtain CDM benefits due to non availability of rice husk within the state.

Due to abolition of Privilege area by the State Government from December 2010 onwards in the Country Spirit segment along with formulation of MRP based pricing and introduction of own brands have created market competition among the existing Bottlers to enhance the market share. All the existing bottling plants of the Company are operating at full capacity and do not have space for expansion. In view of the huge potential demand the Company has established a new bottling plant at Panagarh, West Bengal, the operation of which could not be started, though the plant is complete in all respect, due to delay in receipt of necessary license from West Bengal Government. The removal of privilege area concept will lead to new entrants in the industry which is likely to increase competition.

On IMFL, your Company has strengthened its position in West Bengal, Orissa and Assam. During the year, the Company has sold 5.51 lacs cases of IMFL products. The Company has carried out wide promotion for Volga Vodka in West Bengal, Orissa and North East, and is receiving encouraging results from the same. For the future growth and huge potential demand of Rum and Brandy, the Company has launched Jubilation Rum in Bengal and "Benjamin brandy in Orissa. The Division is continuously improving quality of its product and packaging to enhance market share.

Marine :

The Marine Division has performed well during the year. To increase export of value added products the Company has modernised its plant with new IQF Machines and expanded cold room facility.

The Shrimp Feed trading business has recorded a growth of 65% in value and has a market share of 48% in West Bengal. Around 10,000 franchise farmers are benefited from the services provided by Companys Aqua culturists.

"IFB ROYAL" Retail Brand of frozen Marine Products are now available in major Metros in the country, sale recorded a growth of 25% in value. The Company is in the process of developing more value added products for the Retail Consumers in the country.

OPPORTUNITIES & CHALLENGES:

The current accounting year will again be another year of tough challenges. The un-viability of molasses distillery, pressure on margins in the grain distillery and competition in the country liquor segment is likely to bring about stiff challenge in future. Study is being conducted for conversion of the Molasses distillery into Grain distillery to produce Rectified Spirit and ENA.

The increased bottling capacity, once the Panagarh plant becomes operational will bring good opportunity to the Company by way of volume growth and market share in the Country Liquor segment.

The Company is continuing its efforts to attain further efficiencies in fermentation and distillation, improve upon its bio-gas generation to reduce fuel cost, and to further improve power generation to reduce the cost of production. The Company is giving continuous emphasis to cut costs on inputs, minimise wastages and make optimal use of human resources on all fronts.

In IMFL, the Company visualises ample opportunity for the growth as the demand in the industry is growing at 20%. The Company being a regional player in the industry faces a stiff competition from large Indian as well as multinational companies.

The Company expects better demand for its Marine products in the export as well as domestic market due to overall global economic growth and better demand for frozen sea food. Adverse fluctuation in foreign exchange, the exorbitant increase in the raw material prices, dis-continuation of the export benefits by the Government may put the exports in a challenging situation. In the domestic market, the Company plans to focus on aggressive marketing of its products in order to penetrate into householders as well as retail segment in India.

Human Resources:

For the development of the human resources number of training programmes was organized during the year with outside faculties. Employees were also sent to the renowned technical institutes for continuous update on its knowledge and skill. However, the same is not sufficient considering the complexity of the todays business environment. The Company plans to organize more such training programmes for the overall development of people. Total number of employees in the Company was 430 as on 31st March 2011 as against 449 as on 31st March 2010.

Internal Control System:

The Company maintains a system of internal control designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, compliance with applicable laws and regulations.

Cautionary Statement:

Statements in the Managements discussion and analysis describing the Companys projections, expectations or predictions may be forward - looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companys operations include raw material prices, changes in government regulations, tax regimes and economic developments within the country and weather patterns.

3. DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year under review to conserve the resources for working capital and some capital expenditure projects.

4. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Mr H R Agarwal and Mr M K Vijay retire by rotation and being eligible, offer themselves for re-appointment.

The details about their qualification, other directorships etc. as per Clause 49 of the Listing Agreement are provided separately and annexed to the notice.

5. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956.

The Directors, having ensured through the Officer designated for the purpose, hereby confirm:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the Directors have prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and the Auditors Certificate in this regard form part of this report and are annexed herewith.

7. AUDITORS & AUDITORS REPORT

The Auditors of the Company M/s Haribhakti & Co., Chartered Accountants retire at the ensuing Annual General Meeting have given their consent for appointment and have also confirmed that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956.

Observations made in the Auditors Reports have been adequately dealt with in the notes to the financial statements annexed to the Balance Sheet and Profit & Loss Account.

8. SUBSIDIARY

The Company has no subsidiary as at the end of financial year.

9. HUMAN RESOURCE

The Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and for their co-operation.

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report.

10. ENVIRONMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has in place a system for controlling and monitoring pollutants at all factories in order to comply with environmental standards and legislation. Your Company is committed to ensuring green and pollution free environment as well as clean and safe workplace at all the plant locations.

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant particulars are given in the Annexure to this report.

11. ACKNOWLEDGEMENT

Your Directors express their sincere thanks and place on record their deep appreciation for the patronage extended by the shareholders, valued customers, financial institutions, bankers, government authorities and the investors for their continued support and confidence in the Company.

On behalf of the Board

A K Nag A K Banerjee

Director Managing Director

Kolkata, 26th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 28th Annual Report of the Company and the Audited Financial Statements for the year ended 31st March, 2010.

1. FINANCIAL RESULTS

Year ended Year ended

31.03.2010 31.03.2009

(Rs.000) (Rs.000)

Sales and Other Income (incl. Excise Duty) 41,19,657 38,35,638

Profit prior to Finance charges &

Depreciation 1,73,868 2,84,713

Less : Finance charges 17,663 21,172

Depreciation 91,225 65,995

Profit before Taxation 64,980 1,97,546

Less: Provision for Taxation:

Current Tax 18,547 51,845

Deferred Tax 3,160 13,176

Fringe Benefit Tax - 2,012

Less : Income Tax adjustment for earlier years (972) (18)

Profit after Tax 44,245 1,30,531

Balance carried to Balance Sheet 44,245 1,30,531

2. MANAGEMENT DISCUSSION & ANALYSIS

OVERALL PERFORMANCE

During the year under review your Company has recorded gross turnover of Rs.411.96 crores (as against Rs.383.56 crores in 2008-09) recording a growth of 7%.

The Company has achieved profit before tax of Rs 6.50 crore as against Rs 19.75 crores, and net profit of Rs 4.42 crore as against Rs 13.05 crores in the previous year. The decline in profit is mainly due to loss in molasses distillery due to high prices of molasses during the year as well as due to non-receipt of transport cost reimbursement from the State Government. The profits were also affected due to closure of Marine exports due to delayed receipt of renewed export license from the Statutory Authorities.

The strict control on working capital has helped in reduction on Interest expenses by 17%. The term loans were availed during the year to finance the new IMFL bottling plant set up by the Company. The unsecured Short term loans were borrowed from Bank to meet the short term working capital requirements of the Company.

Earning per equity share is Rs.5.53 as compared to Rs.16.58 per share in previous year due to decline in the profitability during the year.

REVIEW OF DIVISIONAL PERFORMANCES

Alcohol :

The molasses distillery was operated at a much lower capacity due to non-availability of sufficient molasses which is the basic raw materials for the distillery. The Company has to depend on imports from Thailand, Indonesia etc for its molasses requirements. Due to high price of molasses and non-receipt of transportation cost from the Government, Molasses distillery suffered a loss of Rs.19 crores during the financial year. Due to the uncertainty of reimbursement and till realization of claims, further running of molasses distillery is uncertain.

The increase in the grain price in the second half of the year has put the margins of the grain distillery under tremendous pressure. Due to high price of broken grain in the local areas of West Bengal, the Company has to source the materials from other states which has increased the transportation cost.

The margin in the country liquor segment has reduced due to non-revision of bottling charges by the State Government in line with the increase in the input and other manufacturing costs. Due to non-availability of space in the bottling plants and for future expansion, the management is on the look out for new facilities.

IMFL:

On IMFL, your Company has strengthened its position in West Bengal and Orissa. During the year, the Company has sold 5.17 lacs cases of IMFL products in West Bengal, Orissa, Bihar and Assam. The Company has carried out wide promotion for Volga Vodka in West Bengal, Orissa and North East, and is receiving encouraging results from the same. Bihar being a small market for Vodka, the sale has not picked up to the desired extent and the Company has decided to close down the operation in the state and concentrate on its stronghold areas. The Division is continuously improving the standard of its products with better quality spirit produced at its own grain based distillery.

The new state-of-art bottling plant at Dankuni, West Bengal, started its operation during the last quarter of the year. The commencement of the production got delayed almost by a year due to delay in receiving approvals from the State Government. The plant is producing brands of Diageo India (P) Limited and United Spirits Limited.

Marine :

The Marine Process plant could not perform due to shut down of exports during the year. The export license for the marine product which was cancelled/expired got reinstated during the last quarter of the financial year. The exports are expected to start from the current financial year and from the ensuing season. The feed trading business has recorded a growth of 25%.

The domestic business is becoming more challenging and more competitive with new entrants who have done backward integration into prawn cultivation/farming. The Company has to penetrate a lot more into the retail market in order to establish its presence on a pan India basis.

CDM Project :

During the year your Company has been successful in getting the approval from UNFCCC under Kyoto Protocol for its Project, “Avoidance of waste water and onsite energy use emissions and renewal energy generation in distillery unit”. The Company has received approval for issuance of CER for the year 2007 and 2008 for 65,411 ton and 56,418 ton CO2 respectively by UNFCCC, CDM Executive Board.

OPPORTUNITIES & CHALLENGES:

The current accounting year will again be another year of tough challenges. The non-availability of molasses and ban on export by all the sugar producing States is expected to continue and resulting into abnormal increase in the prices of molasses. Secondly, the delay in release of transport cost reimbursement by the State Government has put the Company in a very difficult situation. Due to non-availability of molasses in India, the Company has to depend fully on imports from Thailand, Indonesia and other sugar producing countries. Import of molasses has created a huge pressure on the working capital of the Company.

The sudden increase in prices of grains has increased the raw material prices for grain spirit resulting into lower margins.

The Company is continuing its efforts to attain further efficiencies in fermentation and distillation, improve upon its bio-gas generation to reduce fuel cost, and to further improve power generation to reduce the cost of production and to attain the zero discharge norms. The Company is giving continuous emphasis to cut costs on inputs, minimise wastages and make optimal use of human resources on all fronts.

In IMFL, the Company visualises ample opportunity for the growth as the demand in the industry is growing at 20%. The Company being a regional player in the industry faces a stiff competition from the large Indian houses as well as multinational companies.

The Company expects better demand for its Marine products in the export market due to overall global economic growth and better demand of the frozen sea food. Adverse fluctuation in foreign exchange and the exorbitant increase in the raw material prices have put the exports in a challenging situation. In the domestic market, the Company plans to focus on aggressive marketing its products in order to penetrate into the institutional as well as retail segment in India.

Human Resources:

For the development of the human resources number of training programmes were organized during the year with outside faculties. Employees were also sent to the renowned technical institutes for continuous update on its knowledge and skill. However, the same is not sufficient considering the complexity of the todays business environment. The Company plans to organize more such training programmes for the overall development of our people. Total number of employees in the Company was 449 as on 31st March 2010 as against 421 as on 31st March 2009.

Internal Control System:

The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, compliance with applicable laws and regulations.

Cautionary Statement:

Statements in the Managements discussion and analysis describing the Companys projections, expectations or predictions may be forward - looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the Companys operations include raw material prices, changes in government regulations, tax regimes and economic developments within the country and weather patterns.

3. DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year under review to conserve the resources for working capital and some capital expenditure projects.

4. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 read with Articles of Association of the Company, Mr Nandan Bhattacharya and Mr A K Nag retire by rotation and being eligible, offer themselves for re-appointment.

The details about their qualification, other directorships etc. as per Clause 49 of the Listing Agreement are provided separately and annexed to the notice.

Mr Sudip Kumar Mukherji was appointed as Additional Director on the Board at the Meeting of the Board of Directors of the Company held on 29.10.2009. In terms of section 260 of the Companies Act, 1956, Mr Mukherji will hold office as Director till the date of the forthcoming Annual General Meeting and is eligible for reappointment.

5. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT, 1956.

The Directors, having ensured through the Officer designated for the purpose, hereby confirm:

i. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper

explanation relating to material departures;

ii. That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the Directors have prepared the annual accounts on a going concern basis.

6. CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement, a report on Corporate Governance and the Auditors Certificate in this regard form part of this report and are annexed herewith.

7. AUDITORS & AUDITORS REPORT

The Auditors of the Company M/s Haribhakti & Co., Chartered Accountants retire at the ensuing Annual General Meeting have given their consent for appointment and have also confirmed that their appointment, if made, would be within the limits as prescribed under Section 224(1B) of the Companies Act, 1956.

Observations made in the Auditors’ Reports have been adequately dealt with in the notes to the financial statements annexed to the Balance Sheet and Profit & Loss Account.

8. SUBSIDIARY

The Company has no subsidiary as at the end of the financial year.

9. PERSONNEL

The Directors would like to place on record their appreciation of the dedication and hard work put in by the employees at all levels.

10. HUMAN RESOURCE

The Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and for their co-operation.

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report.

11. ENVIRONMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company has in place a system for controlling and monitoring pollutants at all factories in order to comply with environmental standards and legislation. Your Company is committed to ensuring green and pollution free environment as well as clean and safe workplace at all the plant locations.

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 the relevant particulars are given in the Annexure to this report.

12. ACKNOWLEDGEMENT

Your Directors express their sincere thanks and place on record their deep appreciation for the patronage extended by the shareholders, valued customers, financial institutions, bankers, government authorities and the investors for their continued support and confidence in the Company.



On behalf of the Board

Bikram Nag A K Banerjee

Joint Executive

Chairman Managing Director

Kolkata, 29th May, 2010