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Directors Report of IFB Agro Industries Ltd.

Mar 31, 2017

Financial Results & Performance Review

The financial results for the year and for the previous year are summarized below:

FINANCIAL RESULTS (Rs in Lacs)

Year Ended

Year Ended

31.03.2017

31.03.2016

Revenue from Operations

82,931

62,131

Other Income

1,295

672

Total Revenue

84,226

62,803

Profits prior to Finance Charges and Depreciation (EBITDA)

6,229

5,918

Less: Finance Charges

174

136

Depreciation & Amortization

2,033

2,170

Profit Before Tax

4,022

3,612

Less: Provision for Taxation

816

679

Profit After Tax

3,206

2,933

During the year under review your Company has recorded net operational revenue of Rs 82,931 lacs (as against Rs 62,131 lacs in 201516) recording a growth of 33.5%.

Operational profit (EBITDA) has recorded an increase of 5.2% during 2016-17 as compared to the previous year.

Your Company has achieved a higher profit before tax of Rs 4,022 lacs (as against Rs 3,612 lacs in 2015-16) and net profit of Rs 3,206 lacs (as against Rs 2,933 lacsin2015-16).

During the year under review, your company as part of the repayment schedule, has repaid USD 0.9 million out of USD 7.5 million ECB loan availed from HDFC Bank, Bahrain for financing the modernization project at Distillery division.

During the year under review, India Ratings and Research (IND-Ra) has maintained your Company''s Long Term issuer rating to ''IND A ''.

Your Company operates in two segments: (1) Spirit, Liquor and Spirituous Beverages and (2) Marine Products Spirit, Liquor and Spirituous Beverages:

Your Company operates grain-based distilleries in the state of West Bengal. The new state of the art plant, based on “Eco Smart” multi pressure distillation technology operated for the first full year of expanded capacity during the year 2016-17. The Distillers Dried Grain Solubles (DDGS) capacity was also expanded during the year under review.

The grain distilleries along with C02 and DDGS plants operated at optimum capacity during the year under review. Competition in the Distillery space in West Bengal has increased due to the commissioning of a new distillery during the current financial year. The excess spirit production capacity in India continues to put pressure on margins of the distillery business due to import of spirit from other states of India. It may be mentioned that due to “nil” import fees, import from spirit production capacity surplus states like Uttar Pradesh, Punjab etc. puts your Company into unfair competition.

EBITDA margin at the distilleries suffered due to significant increase in input costs. The cost increases could not be passed on fully to the buyer''s due to competition.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments have occurred after the close of the financial year till the date of this report, which affect the financial position of the Company.

DIVIDEND

In order to conserve resources for the proposed geographical expansion and higher working capital requirements, your Directors have decided not to recommend any dividend for the financial year under review.

TRANSFER TO RESERVE

The Company did not propose to transfer any amount to Reserve.

NUMBER OF BOARD MEETINGS

During the year ended 31s* March, 2017, five meetings of the Board were held.

EXTRACTS OFANNUALRETURN

The extracts of the Annual Return for the financial year 2016-17 as stipulated in MGT -9 pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is given in Annexure I which forms part of this Report.

DIRECTORS

Mr. Arup Kumar Banerjee retires by rotation and being eligible, offers himself for re-appointment. The details about his qualification, other directorships etc. as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the explanatory statement under Section 102 of the Companies Act, 2013.

Mr. Arup Kumar Banerjee, an Honours Graduate in Commerce and Diploma in Business Management from IIM Calcutta is having experience of more than 43 years in the industry. Before joining the Company in the year 1995 he worked with IFB Industries Limited in various positions. He was appointed as a Whole-time Director at the Nineteenth Annual General Meeting of the Company held on 31s* August 2001 for a period of three years with effect from 28th July 2001 and thereafter reappointed from time to time. He was appointed as Managing Director on 30th July 2008. Thereafter, he was elevated as Vice Chairman and Managing Director on 23 rd September, 2015. The existing term of Mr. Arup Kumar Banerjee will expire on 29th July, 2017.

The Board of Directors in its meeting held on 17th May, 2017, on the recommendations of the Nomination and Remuneration Committee, reappointed Mr. Arup Kumar Banerjee (subject to the approval of members in the ensuing Annual General Meeting) for a further period of 3 years with effect from 30s1 July, 2017.

Appropriate resolutions seeking the re-appointment of Directors are appearing in the Notice convening the ensuing Annual General Meeting of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have submitted a declaration that each of them meets the criteria of independence as provided in section 149(6) of the Companies Act, 2013. The declarations were placed and noted by the Board in its meeting held on 17th May, 2017.

KEY MANAGERIAL PERSONNEL

There was no change in the Key Managerial Personnel of your Company.

ANNUAL EVALUATION OF BOARD''S PERFORMANCE

According to Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of the Companies Act, 2013, a meeting of the Independent Directors was held to review the performance of the Non-Independent Directors and the Board as a whole. Accordingly, a meeting of Independent Directors was held on 24th March 2017 wherein the performance of the Non-Independent Directors, Chairman and the Board as a whole was evaluated.

In the Board meeting that followed the meeting of the Independent Directors, the performance of the Board, its committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013, your Directors state that:

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

b. the Directors had 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 period;

c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REMUNERATION POLICY

A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and rules thereto and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating therein the Company''s policy on Directors''/Key Managerial Personnel/other employees appointment and remuneration by the Nomination and Remuneration Committee and approved by the Board of Directors.

The said policy may be referred to, at the Company''s official website at http://www.ifbagro.in.

DEPOSITS

Your Company did not accept any deposit from the public / members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the year.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) /EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is given in Annexure II which forms part of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans, guarantees or made any investments exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more, as prescribed in Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All contracts or arrangements with related parties, entered into or modified during the financial year, were on an arm''s length basis and in the ordinary course of business. All such contracts or arrangements have been reviewed and approved by the Audit Committee. No material contracts or arrangements with related parties were entered into during the year under review. Accordingly, no transactions are being reported in Form No. AOC-2 interms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Your Company''s Policy on Related Party Transactions, as adopted by your Board, can be accessed on the corporate website at http://www.ifbagro.in/ifb-admin/assets/1490251273_Policy%20on%20Related%20Party%20Transactions.pdf

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

As required under Section 134(3) (m) of the Companies Act, 2013, read with rules made there under, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo is given in Annexure III which forms a part of this Report.

SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES

The Company did not have any subsidiary/associate/joint venture Company during this year 2016-17.

HUMAN RESOURCES

For the development of the human resources, number of training programmes were organized during the year. Internal personnel as well outside faculty members conducted these programmes. Your Company plans to organize more such training programmes for the overall development of its people. Total number of employees in the Company stood at 370 as on 31s* March 2017.

WEBSITE OF THE COMPANY

The Company maintains a website www.ifbasro.in where detailed information of the Company and its products are provided.

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the recommendations of the Audit Committee.

VIGIL MECHANISM

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns have been established. The said policy may be referred to, at the Company''s official website at the web link http://www.ifbagro.in/ifb-admin/assets/1490251334_Whistle%20Blower%20Policy.pdf

INTERNAL CONTROL SYSTEMS

Your Company has in place adequate internal control procedures which is commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. Further such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless your Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

LISTING WITH STOCK EXCHANGES

Your Company is listed with the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the Company has paid the Annual listing fee for the year 2017-18 to each of the said Exchanges. The Annual Custody/ Issuer fee for the year 2017-18 has been paid by the Company to NSDL and CDSL.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of Section 135 and Schedule VII of Companies Act, 2013, the Board of Directors of your Company had constituted a CSR Committee. The Committee comprises of Independent Directors and Executive Director. The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiative undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.The said policy may be referred to, at the Company''s official website at http://www. i fbaero.in.

Your Company has identified the activities and accordingly projects mainly relating to a) eradicating hunger, malnutrition and sanitation, b) promoting education and c) promoting healthcare were undertaken in line with the CSR policy. The necessary budget outlay were assigned to the aforesaid projects. However, due to multiyear project and certain procedural delay at the implementation level, the Company could not spend the allocated budget outlay. The Company made an expenditure of Rs. 51.06 lacs against the stipulated amount of Rs. 74.01 lacs.

CORPORATE GOVERNANCE

Your Company attaches considerable significance to good Corporate Governance as an important step towards building investor confidence, improving investors'' protection and maximizing long-term stakeholders value. The certificate of the Auditors, Walker Chandiok & Co LLP ( Firm Registration No : 001076N/N500013), Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

STATUTORY AUDITORS

The Auditors of the Company Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) have been appointed at the Annual General Meeting on 30th July, 2014 for a term of 3 years. The Company has received consent of the auditors for re-appointment of office for the Second term. Their re-appointment to the office is subject to the approval by the members at 35thAnnual General Meeting.

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

SECRETARIAL AUDITOR

The provisions of Section 204 read with Section 134(3) of the Companies Act, 2013 mandates Secretarial Audit of the Company. The Board in its meeting held on 24th March, 2017, appointed Mr. Jitendra Patnaik, Proprietor of M/s J. Patnaik & Associates , Practicing Company Secretary (Certificate of Practice No. 3102) as the Secretarial Auditor for a term of two years commencing from the financial year 2016-17.

The Secretarial Auditors'' Report for the financial year ending 31s* March 2017 is given in Annexure V, which forms part of this report.

ACKNOWLEDGEMENT

Directors take this opportunity to express their thanks to various departments of the Central and State Government, Bankers, Customers and Stakeholders for their continued support.

The Directors wish to place on record their appreciation for the dedicated efforts put in by the employees of the Company at all levels.

Cautionary Statement: Statement in the Directors'' Report and Management Discussion & Analysis Report describing the Company''s expectations may be forward-looking within the meaning of applicable securities laws & regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operation include global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their costs, changes in government policies and tax laws.

On behalf of the Board

Registered Office: Bikram Nag Arup Kumar Banerjee

PlotNo.IND-5,Sector-l Joint Executive Chairman Vice Chairman and

East Calcutta Township Managing Director

Kolkata - 700 107

CIN: L01409WB1982PLC034590

E-mail: complianceifbagro@ifbglobal.com

Website : www.ifbagro.in

Kolkata, 17th May,2017


Mar 31, 2016

To the Shareholders,

The Directors have pleasure in presenting the Annual Report together with the Audited Financial Statements for the financial year ended 31st March, 2016.

Economic Environment

The year under review (2015-16) was characterized by slow growth across the Globe. The global economy grew at 3.1% in the year 2015, the weakest pace since 2009. Except USA, almost all the developed, developing and emerging economies witnessed degrowth during 2015-16 as compared to 2014-15. The increase in the interest rate by USA resulted in currency depreciation across the globe except in Japan. In the backdrop of the troubled world economies impacted by global slowdown and collapsing commodity prices, India remained a somewhat positive story. India too had its share of woes resulted from poor monsoons but benefitted from softening commodity including crude oil prices and inflation was controlled.

Financial Results & Performance Review

The financial results for the year and for the previous year are summarized below:

FINANCIAL RESULTS

(Rs in Lakhs)

Year Ended

Year Ended

31.03.2016

31.03.2015

Revenue from Operations

61,312

58,425

Other Income

1,492

1,509

Total Revenue

62,804

59,934

Profits prior to finance charges and depreciation

5,928

4,470

Less: Finance Charges

136

17

Depreciation & Amortization

2,170

1,862

Profit Before Tax

3,612

2,591

Less: Provision for Taxation

Current Tax

939

117

Deferred Tax

(143)

820

Income Tax adjustment for earlier years

(117)

96

Profit After Tax

2,933

1,557

During the year under review your Company has recorded net operational revenue of Rs 61,312 lakhs (as against Rs 58,425 lakhs in 2014-15) recording a growth of 4.94%.

Your Company has achieved a higher profit before tax of Rs 3,612 lakhs (as against Rs 2,591 lakhs in 2014-15) and net profit of Rs 2,933 lakhs (as against Rs 1,557 lakhs in 2014-15). Higher depreciation was mainly due to newly commissioned modernization project at Distillery division.

Your Company operates in two segments: (1) Spirit, Liquor and Spirituous Beverages and (2) Marine Products.

Spirit, Liquor and Spirituous Beverages:

There are two divisions under Spirit, Liquor and Spirituous Beverages Segment: (1) Distillery and (2) India Made Indian Liquor.

Your Company operates a grain-based distillery in West Bengal at Noorpur. The state of the art plant, based on ''multi-pressure-distillation'' process is capable of distilling alcohol from multiple feed stocks.

The Distillery division of the Company completed the modernization project “Conversion of 50 KL per day Molassess Distillery into Grain Distillery” within the stipulated time and cost. The commercial production of the modernized unit started from 14th January, 2016. The operation is yet to stabilize fully. The grain distillery along with CO2 plant operated at optimum capacity during the current year. In September 2015, West Bengal State Excise removed the spirit removal fees which were imposed in 2013. Competition in the Distillery space in West Bengal is set to increase due to the planned commissioning of a new distillery plant during the current financial year. The excess spirit production capacity in India continues to put pressure on the distillery division due to import of cheaper molasses/grain based ENA from other states of India.

India Made Indian Liquor segment (IMIL) continue to face tremendous competition due to excess capacity created by the new bottling plants. During 2015-16, overall growth of IMIL in West Bengal was only 2.5% due to poor monsoon and very low level of Industrial activity resulting in lower disposable income in the hand of consumers. Excess capacity created in the market place resulted in high retailer schemes and increased logistics costs, as a result of door delivery facilities and thus putting pressures on the margins. Increased credit to the vendors is impacting the cash flow. Your Company is trying to maximize the capacity utilization and setting up the plants under contract manufacturing where our market share is low. During the year under review, your Company has commenced a third party bottling facility at Purulia (West Bengal).

Marine:

Marine exports have registered 14 % degrowth in revenue during the year under review. Degrowth is due to the steep fall in shrimp prices. The tie-up arrangement in Andhra Pradesh started in the second quarter of the year under review but due to delay in getting the regulatory approvals from the exporting countries, export volumes were significantly lower as compared to the budget. The operation at Andhra Pradesh reported cash loss in the year under review. During the current year (2016-17), your Company has planned to increase the export volume and focus on improving margin. Exports from Indonesia and Ecuador are posing serious competition to shrimp exporting Indian Companies. Indian Currency has depreciated by 7% during the year under review but this did not give your Company any competitive edge due to the much larger currency depreciation in most of our competition countries. Economic turbulence in many of our exporting countries is also impacting the sales as prawn consumption is considered to be a luxury item.

Marine feed turnover has increased by 11% during the year under review but operating margins reduced due to the inability in passing the higher input cost to the farmers. Risk in the form of unsecured credit continued.

Sales of Marine domestic food business have grown by 12% during the year under review. This business as yet is not cash positive.

During the year under review, your Company has availed 7.5 million US$ ECB loan from HDFC Bank, Bahrain for financing the modernization project at Distillery division.

During the year under review, India Ratings and Research (IND-Ra) has upgraded your Company''s Long Term issuer rating to ''IND A '' from ''IND A''.

OUTLOOK, OPPORTUNITIES, THREATS AND CONCERNS

The current financial year will again be a year of challenges both for exports and domestic businesses. Excess distillery capacity in India will continue to pose serious competition to the Company on account of duty free spirit imports to West Bengal. IMIL segment will continue to have pressure on sales and margin due to stiff competition. Marine exports will continue to have margin pressure due to competition from South East Asian and Latin American countries. The high level of raw material prices and exchange fluctuations will continue to weigh on Marine exports.

The capacity expansion in our distillery division will result in cost optimization and your Company will endeavor to perform better as compared to the previous year. Consolidation in the IMIL space has started and it may create an opportunity for your Company. We expect additional sales volume from our Andhra Pradesh Marine plant during the current year.

In the past your Company has made significant capital expenditures and any shortfall in the planned returns will exert pressures on the Balance Sheet and Cash Flow.

Your company is continuing its efforts to attain further efficiencies by process improvement and reduction of wastages in all the divisions and ensuring optimal use of human resources on all fronts.

RISK MANAGEMENT

The Board has adopted a risk management policy whereby a proper framework is set up to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage.

Your Company has constituted a Risk Management Committee for reviewing the risk management plans and ensuring its effectiveness.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATEANDTHE DATE OF THE REPORT

No material changes and commitments have occurred after the close of the financial year till the date of this report, which affect the financial position of the Company.

DIVIDEND

In order to conserve resources for the proposed capital investments, your Directors have decided not to recommend any dividend for the financial year under review.

TRANSFER TO RESERVE

The company does not propose to transfer any amount to Reserve.

NUMBER OF BOARD MEETINGS

During the year ended 31st March, 2016, six meetings of the Board were held.

EXTRACTS OFANNUALRETURN

The extracts of the Annual Return for the financial year 2015-16 as stipulated in MGT -9 pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is given in Annexure I which forms part of this Report.

DIRECTORS

Mr. Amitabha Kumar Nag retires by rotation and being eligible, offers himself for re-appointment. The details about his qualification, other directorships etc. as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in the explanatory statement under Section 102 of the Companies Act, 2013 separately and annexed to the Notice.

Dr. Lakshmishri Roy was inducted as an Independent Director to the Board of Directors of IFB Agro Industries Limited on 31st March, 2015 for a term of one year expiring on 31st March, 2016.

On 29th March, 2016 the Board of Directors, based on report of performance evaluation approved the continuation of office of the Director by re-appointment of Dr. Lakshmishri Roy as an Independent Director pursuant to Sections 149 and 152, read with Schedule IV and any other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the second term of three years subject to the approval by the members of the Company at the ensuing Annual General Meeting.

Dr. Lakshmishri Roy is a Graduate in Pharmacy from KMIPS, Rourkela, Sambhalpur University in the year 1994. She was awarded Gold Medal by Governor of Orissa for her outstanding performance in B.Pharm. She completed her M.Tech, (Life Sciences and Biotechnology) from Jadavpur University in the year 1998. She obtained her Ph.D from IIT Kharagpur in the field of Agricultural and Food Engineering in the year 2013.

The Company has received a notice in writing from a member of the Company proposing her candidature for the office of Independent Director with requisite deposit.

Mr. Indranil Goho was appointed as an Additional Director of the Company with effect from 23 rd September, 2015. The Board has also appointed him as Joint Managing Director with effect from the same date for a period of three years, subject to the approval by the members at the ensuing Annual General Meeting.

Mr. Indranil Goho is a qualified Chartered Accountant and a Cost Accountant. He has 21 years of experience in finance, accounts, taxation, sales and marketing.

Mr Goho worked as consultant with Singhi Management and Financial Consultants, Mumbai and Ernst & Young, Kolkata during his initial years. Since the year 2003, Mr Goho worked with IFB Industries Limited at senior positions.

Mr Goho joined IFB Agro Industries Limited in April, 2012 as President and Chief Operating Officer.

The Company has received a notice in writing from a member of the Company proposing his candidature for the office of Director with requisite deposit.

Appropriate resolutions seeking the appointment / reappointment of Directors are appearing in the Notice convening the ensuing Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL

The Board appointed. Mr Indranil Goho, as “Joint Managing Director” of the Company with effect from September 23, 2015 on recommendation of Nomination and Remuneration Committee subject to approval by the members in this Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given declaration to the Company stating their independence pursuant to Section 149(6) of the Companies Act, 2013 and the same have been placed and noted by the Board in its meeting held on 14th May, 2016.

ANNUAL EVALUATION OF BOARD''S PERFORMANCE

According to Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of the Companies Act, 2013, a meeting of the Independent Directors was held to review the performance of the Non-Independent Directors and the Board as a whole. Accordingly, a meeting of Independent Directors was held on 29th March, 2016 wherein the performance of the Non-Independent Directors, Chairman and the Board as a whole was evaluated.

Further the same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 , your Directors state that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The Directors had 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 period;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REMUNERATION POLICY

A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and rules thereto and Clause 49 of the Listing Agreement stating therein the Company''s policy on Directors''/Key Managerial Personnel/other employees appointment and remuneration by the Nomination and Remuneration Committee and approved by the Board of Directors.

The said policy may be referred to, at the Company''s official website at http://www.ifbagro.in/pdf/nomination-and-remuneration/policy.pdf.

DEPOSITS

Your Company has not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 during the year.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) /EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is given in Annexure II which forms part of this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans, guarantees or made any investments exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more, as prescribed in Section 186 of the Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All contracts or arrangements with related parties, entered into or modified during the financial year, were on an arm''s length basis and in the ordinary course of business. All such contracts or arrangements have been reviewed and approved by the Audit Committee. No material contracts or arrangements with related parties were entered into during the year under review. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Your Company''s Policy on Related Party Transactions, as adopted by your Board, can be accessed on the corporate website at http://www.ifbagro.in/pdf/Policy-on-Related-Party-Transactions.pdf

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

As required under Section 134(3) (m) of the Companies Act, 2013, read with rules made there under, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo is given in Annexure III which forms a part of this Report.

SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES

The Company does not have any subsidiary/associate/joint venture company for the year ended 31st March, 2016.

HUMAN RESOURCES

For the development of the human resources, number of training programmes were organized during the year. Internal personnel as well outside faculty members undertook these programmes. Your Company plans to organize more such training programmes for the overall development of its people. Total number of employees in the Company stood at 376 as on 31st March, 2016 as against 328 as on 31st March, 2015.

WEBSITE OF THE COMPANY

The Company maintains a website www. ifbasro.in where detailed information of the Company and its products are provided.

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee.

VIGIL MECHANISM

In pursuant to the provisions of Sections 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The said policy may be referred to, at the Company''s official website at the we blink http://www.ifbagro.in/pdf/Whistle-Blower-Policy.pdf.

INTERNAL CONTROL SYSTEMS

Your Company has in place adequate internal control procedures which is commensurate with the size and nature of business. Detailed procedural manuals are in place to ensure that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. Further such controls have been tested during the year and no reportable material weakness in the design or operation was observed. Nonetheless your Company recognizes that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

LISTING WITH STOCK EXCHANGES

Your Company is listed with the Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the said Exchanges.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of Section 135 and Schedule VII of Companies Act, 2013, the Board of Directors of your Company have constituted a CSR Committee. The Committee comprises of Independent Directors and Executive Director. The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiative undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.The said policy may be referred to, at the Company''s official website at http://www.ifbagro.in.

Your Company has identified the activities and accordingly projects mainly relating to a) eradicating hunger, malnutrition and sanitation and b) promoting education were undertaken in line with the CSR policy. The necessary budget outlay were assigned to the aforesaid projects. However, due to multiyear project and certain procedural delay at the implementation level, the Company could not spend the allocated budget outlay. The Company made an expenditure of Rs. 21.40 lacs against the stipulated amount of Rs. 71.54 lacs.

CORPORATE GOVERNANCE

Your Company attaches considerable significance to good Corporate Governance as an important step towards building investor confidence, improving investors'' protection and maximizing long-term stakeholders value. The certificate of the Auditors, M/s Walker Chandiok & Co LLP ( Firm registration No. 001076N/N500013), Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

STATUTORY AUDITORS

The Auditors of the Company M/s. Walker, Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) have been appointed at the Annual General Meeting on 30th July, 2014 for a term of 3 years. The Company has received consent of the Auditors for continuation of office for the current year. Their appointment to the office is subject to the ratification by the members at the each Annual General Meeting.

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

The provisions of Section 204 read with Section 134(3) of the Companies Act, 2013 mandates Secretarial Audit of the Company to be done from the financial year commencing on or after 1st April 2014 by a Company Secretary in Practice. The Board in its meeting held on 29th March, 2016, appointed Mr. Jitendra Patnaik, Practicing Company Secretary (Certificate of Practice No. 3102) as the Secretarial Auditor for the financial year ending 31st March, 2016.

The Secretarial Auditors'' Report for the financial year ending 31st March 2016 is given in Annexure V, which forms part of this report.

ACKNOWLEDGEMENT

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

Cautionary Statement: Statement in the Directors'' Report and Management Discussion & Analysis Report describing the Company''s expectations may be forward-looking within the meaning of applicable securities laws & regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operation include global and domestic demand and supply conditions affecting selling prices, new capacity additions, availability of critical materials and their costs, changes in government policies and tax laws.

On behalf of the Board

Bikram Nag Arup Kumar Banerjee

Kolkata, 14th May, 2016 Joint Executive Chairman Vice Chairman and Managing Director


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

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