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Notes to Accounts of IFB Agro Industries Ltd.

Mar 31, 2019

1A Background

IFB Agro Industries Limited is a Company limited by shares, incorporated and domiciled in India. The Company is primarily engaged in the business of manufacturing alcohol, bottling of branded alcoholic beverages as well as processed marine foods both for domestic and export markets. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The registered office of the Company is locatedat Plot No. IND-5, Sector-I, East Kolkata Township, Kolkata-700 107, India.

These financial statements are approved by the Company’s Board of Directors on 27 May 2019.

IB Basis of Preparation

(a) General information and statement of compliance with Indian Accounting Standards

The standalone financial statements comply in all material aspects with Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as the “Act”) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.

(b) Historical cost convention

The standalone financial statements have been prepared on a historical cost basis, except the following:

- certain financial assets and liabilities (including derivative instruments) that are measured at fair value; and

- defined benefit plans - plan assets measured at fair value.

(c) Accounting estimates and judgements

Preparation of financial statements requires the use of judgements, estimates and assumptions in the application of accounting policies that affects the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation of such estimates and judgments are done based on historical experience and other factors, including future expectations that are believed to be reasonable. Revisions to accounting estimates are recognized prospectively.

Details of critical estimates and judgments used which have a significant effect on the carrying amounts of assets and liabilities, are provided in the following notes:

Income tax:

The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Refer note7,16and29.

Useful life of property, plant and equipments:

Refer note 2 (b) for details.

Measurement of defined benefit obligations:

The costs of providing pensions and other post-employment benefits are charged to the statement of profit and loss in accordance with Ind AS 19 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in note 25 and 33.

Impairment of assets:

Refer note 2 (b), (c) and(e) for details.

Classification of leases:

Refer note 2 (m) for details.

Estimation of provisions and contingencies:

Refer note 2 (n), 19 and32(a) for details.

Recognition of deferred tax assets:

Refernote2 (o) for details.

Fair value measurements:

When the fair values of financials assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. Refer note 36 (c) for details.

The Company presents all its assets and liabilities in the balance sheet based on current or non-current classification. Assets and liabilities are classified as current or non-current as per the Company’s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

(d) Recent accounting pronouncements

Ministry of Corporate Affairs vide notification dated 30 March 2019, has notified Ind AS 116 Leases. This will be effective from 1 April 2019 replacing Ind AS 17 Leases for reporting periods beginning on or after 1 April 2019.

Ind AS 116, Leases

Ind AS 116 applies a control-based model for identification of leases, distinguishing between leases and service contracts on the basis of whether there is an identified asset controlled by the customer. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Amendment to Ind AS 12, Income Taxes

On March 30,2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, Income Taxes in connection with accounting for dividend distribution taxes. The amendment clarifies that an entity shall recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. Effective date of application of this amendment is annual period beginning on or after 01 April 2019. The Company does not have any impact on account of this amendment.

Amendment to Ind AS 19, Planned amendment, curtailment and settlement

On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, Employee Benefits in connection with accosting for planned amendments, curtailments and settlement. The amendments require an entity to use updated assumptions to determine current service cost and net interest cost for the remainder of the period after a planned amendment, curtailment or settlement and to recognise in profit or loss as part of the past service cost, or a gain or loss on settlement, any reduction in a surplus even if that surplus is not previously recognised because of the asset ceiling. Effective date of application of this amendment is annual period beginning on or after 01 April 2019. The Company does not have any impact on account of this amendment.

Notes:

i) The Company had adopted the carrying cost as on the date of transition to Ind AS as its deemed cost as at 01 April 2016 and accordingly adjusted its gross block and accumulated depreciation and impairment.

ii) The Company’s marine product processing plant at Kolkata has been erected on land obtained under finance lease of ninety-nine years, valid upto 9 August 2093 through license from Kolkata Metropolitan Development Authority, for which formal lease deed is yet to be executed.

iii) Plant and equipment includes electrical equipment and installations and laboratory equipment.

iv) Land under finance lease represents payments made and costs incurred in connection with acquisition of leasehold rights and are being amortized over the period of lease.

v) The Company, based on technical evaluation, has assessed and concluded that none of the components of property, plant and equipment have an useful life which is different from that of the principal asset.

vi) Term loan from banks (External commercial borrowings) is secured by an exclusive charge on all present and future assets (plant and equipments and civil work) at Noorpur unit and on other plant and equipment of the Company.

Notes:

i) As at the balance sheet date, none of the investments in equity instruments have been impaired.

ii) The investments in equity instruments are for long-term strategic purposes and not held for trading. Under IndAS 109, the Company has chosen to designate these investments as equity instruments at fair value through other comprehensive income as the management believes that this provides a more meaningful presentation for non-current investments than reflecting the changes in fair values immediately in the statement of profit and loss for such period. Based on the aforesaid designation, changes in fair values are accumulated in other equity under the head "equity instruments through other comprehensive income". The Company transfers the accumulated balance from this account to retained earnings when such equity instruments are derecognised.

iii) The Company has measured its investment in subsidiary at cost in accordance with ind AS 27 - Separate Financial Statements.

(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year

There has been no change in equity share capital during the year.

(b) The rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Such holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings, however, no such preferential amounts exists currently. During this financial year the Company has not proposed/declared any dividend. However, if any dividend is proposed by the Board of Directors, it will be subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

(*) SICGIL India Ltd (SICGIL) along with Persons Acting in Concert (PAC) (collectively referred to as SICGIL group) holds 15.76% equity shares in the Company. However, the SICGIL group’s voting rights were restricted to 5% of the equity share Capital of the Company vide National Company Law Tribunal (‘NCLT’) order dated 5 July 2017. In an appeal, the National Company Law Appellate Tribunal (‘NCLAT’) vide its order dated 6th December 2018 set aside the NCLT’s order. The Company has preferred an appeal before the Hon’ble Supreme Court. The Hon’ble Supreme Court has ordered for status quo to be maintained.

(d) No additional shares were allotted as fully paid up by way of bonus shares or pursuant to contract without payment being received in cash during the last five years. Further, none of the shares were bought back by the Company during the last five years.

Nature and purpose of reserves:

Securities premium account

Securities premium is used to record the premium on issue of shares. The reserve can be utilized in accordance with the provisions of Section 52 of the Companies Act, 2013.

General reserve

General reserve has been created out of profits earned by the Company in the previous years. General reserves are free reserves and can be utilised in accordance with the requirements of the Companies Act, 2013.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfer to general reserves, dividends and other distributions made to the shareholders.

Other comprehensive income

The Company has elected to recognize changes in fair value of certain investments in equity instruments and actuarial gains/losses on defined benefit plans in other comprehensive income. The changes are accumulated within "Equity instruments through OCI" and "Others" respectively under other equity. The Company transfers amounts from Equity instruments through OCI to retained earnings when the relevant equity instrument is derecognized.

Foreign currency loan from bank (in nature of external commercial borrowing)

Term loan from bank (originally amounting to USD 75 lacs equivalent to Rs. 4,908.00 lacs) is secured by an exclusive charge on all present and future assets (plant and machinery and civil work) at Noorpur refinanced out of this loan and on other plant and equipment of the Company.

Repayable in 14 stipulated periodic instalments commencing from 31 December 2016 and ending on 31 January 2020 and carries an interest rate of 3 months liborplus 2.25%. Till 31 March 2019,10 installments amounting to USD 46.88 lacs has been repaid.

Vehicle loan from others

Vehicle loan (originally amounting to Rs. 39.90 lacs) is secured by hypothecation of the motor car financed out of this loan.

Repayable in 36 monthly instalments commencing from 03 March 2017. It carries an interest rate of 11.60% p.a. on monthly reducing balance. First 35 EMIs are ofRs. 0.78 lacs each. Company has an option either to pay the 36th EMI ofRs. 23.94 lacs or to surrender the car to the finance company.

(*) Represents an amount obtained as a part of sale and lease back agreement entered into by the Company with Rajasthan State Electricity Board (RSEB) which expired on 28 February 2004. In terms of the said agreement, the residual value of the assets under lease acquired and leasedback to RSEB (under physical possession of RSEB) is required to be adjusted against the corresponding amount of security deposit as mentioned above. Company’s appeal towards certain claims against RSEB is pending before the Hon’ble Jaipur High Court.

2 Leases

(a) Finance lease

The Company has acquired certain lands on finance lease. Such lease arrangements are for a period ranging from 30-99 years and the entire lease rentals has been paid upfront at the time of initiation of the lease. The Company has recognized these lands acquired on finance lease under property, plant and equipment (separately from other owned assets) at an amount equal to the upfront lease payment plus initial direct costs. Such amount is amortized over the period of the lease on a straight line method.

(b) Operating lease

The Company has entered into operating lease arrangements in respect of factory lands, office premises, other buildings and manufacturing facilities which are for a period generally ranging from 11 months to 6 years. All such lease arrangements are cancellable and are usually renewable on mutually agreed terms. Total lease rentals payable during the lease period is recognized in the statement of profit and loss on straight line basis except where the increase in future lease rentals is to compensate for the general inflationary forces.

3 Disclosure in accordance with Ind AS-19 on Employee benefits expense

(a) Post-employment benefits plan:

Retirement benefit plans of the Company comprising of Gratuity, Superannuation and Provident Fund consists of both defined benefit plan and defined contribution plan. Other long term employee benefits includes compensated absences subject to certain limits and rules. Gratuity, Superannuation and compensated absences plans are funded through investments in Life Insurance Corporation of India (LICI). Provident fund for all employees are managed through government administrated funds. Gratuity and Superannuation fund is managed by a Board of Trustees who are responsible for overall management of the fund and acts in accordance with the provisions of the respective trust deeds and rules, and in the best interest of the plan participants. The trustees do a periodic review of the solvency of the fund and play a role in long term investments, risk management and funding strategy.

(b) Defined contribution plans

The Provident Fund and Superannuation Fund has been classified as defined contribution plan as the Company has an obligation to pay a fixed amount to the government administered fund and Life Insurance Corporation of India (LICI) respectively and has no further obligation if the assets of such funds are not enough to meet all the employee obligations provided under such plans.

(c) Defined benefit plans

Gratuity plan is a defined benefit plan that provides for lump sum gratuity payment to employees made at the time of their exit by the way of retirement (on superannuation or otherwise), death or disability. The benefits are defined on the basis of their final salary and period of service and such benefits paid under the plan is not subject to the ceiling limit specified in the Payment of Gratuity Act, 1972. Liability as on the balance sheet date is provided based on actuarial valuation done by a certified actuary using projected unit credit method. Board of Trustees administers the contributions made to the gratuity fund and such amounts are solely invested with Life Insurance Corporation of India (LICI).

(d) Other long-term employee benefits

The Company provides for encashment of accumulated leaves standing at the credit of its employees at the time of their exit by way of retirement (on superannuation or otherwise), death or disability, subject to certain limits and rules framed by the Company. Liability is provided based on the number of days of unutilized leave at each balance sheet date based on actuarial valuation done by a certified actuary using projected unit credit method. The Company had funded such plan with Life Insurance Corporation of India (LICI).

The following table summarises the components of defined benefit expense recognized in the statement of profit and loss/other comprehensive income (‘OCI’) and the funded status and amounts recognised in the balance sheet for the respective plans:

(vi) Amounts contributed towards defined contribution plans have been recognized in the statement of profit and loss under "Contribution to provident fund and other funds" in Note 25.

(vii) Major categories of plan assets:

Entire assets of both gratuity and compensated absences plans is maintained with the Life Insurance Corporation of India (LICI).

(viii) Assumptions

With the objective of presenting plan assets and obligations of the defined benefit plans at their fair value at balance sheet date, assumptions used under Ind AS 19 are set by reference to market conditions at the valuation date.

Methods and assumptions used in preparing sensitivity analysis and their limitations:

The sensitivity results above determine their individual impact on the plan’s end of the year defined benefit obligation. In reality, the plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the plan’s sensitivity to such changes can vary over time.

(x) Maturity analysis of the benefit payments:

Weighted average duration of both gratuity plan and compensated absences plan is 7 years. Expected benefits payments for each such plans over the years is given in table below:

Expected employer contribution in Gratuity plan for the period ending 31 March 2020 is Nil (31 March 2019: Rs. 55.72 lacs).

Expected employer contribution in Compensated absences plan for the period ending 31 March 2020 is Nil (31 March 2019: Nil).

(e) Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

4 Segment reporting

(a) Basis of segmentation:

The Company has following business segments, which are its reportable segments. These segments offer different products and services, and are managed separately because they require different technology and production processes. Operating segment disclosures are consistent with the information provided to and reviewed by the chief operating decision maker.

Notes:

(i) These investments are not held for trading. Upon application of Ind AS -109 - Financial Instruments, the Company has chosen to measure these investments in quoted equity instruments at FVTOCI irrevocably as the management believes that presenting fair value gains and losses relating to these investments in the statement of profit andloss may not be indicative of the performance of the Company.

(ii) The management assessed that the fair value of cash and cash equivalents, other bank balances, bank deposits, loans to employees, security deposits, trade receivables, other advances, trade payables and other financial liabilities including security deposits repayable on demand, capital creditors and dues to employees approximate the carrying amount largely due to short-term maturity of these instruments.

(b) Fair value hierarchy

The fair value of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly market between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent in all the years. Fair value of financial instruments referred to in note (a) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable entity specific inputs.

The categories used are as follows:

- Level 1: quoted prices (unadjusted) in active markets for financial instruments.

- Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

- Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(c) Computation of fair values

Investments in mutual funds are short-term investments made in debt or liquid funds whose fair value are considered as the net asset value (NAV) declared by their respective fund houses on a daily basis. Thus the declared NAV is similar to fair market value for these mutual fund investments since transactions between the investor and fund houses will be carried out at such prices.

Investments in equity instruments represents long term strategic investments made in certain listed or unlisted companies. For listed companies, fair value is based on quoted market prices of such instruments as on the balance sheet date on the recognized stock exchange (where traded volume is more during last six months). For investments in unlisted companies, the management has ascertained the fair value by using discounted cash flow (‘DCF’) method (income approach) and net asset value method as appropriate.

(d) Fair value of assets and liabilities measured at cost/amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amount would be significantly different from the values that would be eventually received or settled. Management assessed that fair values of cash and cash equivalents, other bank balances, bank deposits, loans to employees, trade receivables, advance to manufacturing units, trade payables and other financial liabilities approximate their carrying amounts due to the short term maturities of these instruments. For non-current borrowings at fixed/floating rates, management evaluates that their fair value will not be significantly different from the carrying amount.

5 Financial risk management

Company’s business activities are exposed to a variety of financial risks like credit risk, market risks and liquidity risk. Company’s senior management is responsible for establishing and monitoring the risk management framework within its overall risk management objectives and strategies approved by the Board of Directors. Such risk management strategies and objectives are established to identify and analyze potential risks faced by the Company, set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and assess risk management performance. Any change in Company’s risk management objectives and policies need approval of it’s Board of Directors.

(a) Credit risk

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, other balances with banks, loans and other receivables.

(i) Trade receivables

Customer credit risks is managed by each business unit in accordance with the credit policy, procedures and controls relating to credit risk management. Credit quality of each individual customer is assessed based on financial positions, past trends, market reputation, prevailing market and economic conditions, expected business and anticipated regulatory changes. Based on this evaluation, credit limit and credit terms are decided for each individual customer. Exposure to customer credit risk is regularly monitored through credit locks and release. The Company has a low concentration of risk in respect of trade receivables since its customers are widely spread and operates in diversified industries and varying market conditions. Export customers are secured through letter of credit and generally not subject to credit risks.

Impairment of trade receivables is based on expected credit loss model (simplistic approach) depending upon the historical data, present financial conditions of customers and anticipated regulatory changes. Maximum exposure to credit risks at the reporting date is disclosed in Note 10. Company does not hold any collateral in respect of such receivables.

(ii) Other financial instruments

Credit risks from other financial instruments includes mainly cash and cash equivalents and deposits with banks. Such risks is managed by the central treasury department of the Company with accordance with Company’s overall investment policy approved by its Board of Directors. Investments of surplus funds are made in short term debt/liquid mutual funds of rated fund houses having the highest credit rating and in short term time deposits of reputed banks with a very strong financial position. Investment limits are set for each mutual fund and bank deposits. Risk concentration is minimized by investing in a wide range of mutual funds/bank deposits. These investments are reviewed by the Board of Directors on a quarterly basis.

The Company has no exposure to credit risk relating to its cash and cash equivalents. Credit risk for other financial instruments are monitored by the Central treasury department in accordance with its overall risk management policies. Impairment of such assets is computed per expected credit loss model (general approach) assessed on the basis of financial position, detailed analysis and expected business of the counterparty to such financial assets.

(b) Market risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risks comprises of three types - interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risks include long term borrowings, investments in mutual funds or equity instruments and derivative instruments.

(i) Foreign currency risk management

Foreign currency is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to change in foreign currency rates. Company is exposed to foreign currency risks on trade receivables and long term external commercial borrowing, both denominated in USD. Foreign exchange exposures are managed by the central treasury department in accordance with the overall policy parameters approved by the Board of Directors. Trade receivables are hedged by entering into forward contracts (to sell USD) with authorized banks that matches the timings of the forecasted receipts. Company has kept its external commercial borrowing unhedged as it has natural hedging due to export earnings.

Carrying amount of Company’s financial assets and liabilities denominated in foreign currency (USD) as at the Balance Sheet date is as under:

Foreign currency sensitivity analysis

The Company is exposed to US Dollars. Following table provides the sensitivity impact to a 5% strengthening/weakening of INR in respect to US Dollars. Sensitivity analysis is done on net exposure after adjusting the forward contracts. A positive number below indicates an increase in profit/equity when INR appreciates against US Dollars and when the net exposure is a liability.

Note:

Company’s foreign currency risk exposure has reduced over the years due to decrease in outstanding amount of external commercial borrowing, resulting from scheduled repayments.

(ii) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to change in market interest rates. Company has long term borrowings both at fixed and variable interest rates. Such borrowings are measured at amortized costs. The Company is exposed to interest rate risk arising from its external commercial borrowing taken at floating rate of interest (libor plus 225 basis points), while it does not have any interest rate risks arising from other borrowings at fixed interest rates. Company’s central treasury department manages such interest rate risk in accordance with its overall risk policy approved by the Board of Directors. Company has not hedged its long term external commercial borrowing as it does not anticipates any major change in libor which can materially impact its future cash flows.

(iii) Price risk

Price risk is the risk that the fair value or future cash flows will fluctuate due to change in market prices. The Company is exposed to price risk arising from its short term investments in debt or liquid mutual funds. Company’s central treasury department manages such risk in accordance with its overall risk management policy approved by the Board of Directors. The Company mitigates the risk by investing in a large number of rated funds. Investment limit in each fund is specified. All purchase or sale of mutual funds are reviewed by the Board of Directors on a quarterly basis. Company assesses that as returns from shortterm debt or liquid mutual funds are steady and depends on interest rates or market yield, there is very remote chance of any significant fluctuation in their fair values which can materially impact Company’s future cash flows.

Price sensitivity analysis

Following table provides the sensitivity impact to a 1% appreciation/decline in NAV of mutual fund investments as at the Balance Sheet date.

(c) Liquidity risk:

Liquidity risk is the risk that the Company may not be able to meet its contractual obligations associated with its financial liabilities. The central treasury department of the Company manages its liquidity risk by preparing and continuously monitoring business plans or rolling cash flow forecasts which ensures that the funds required for carrying on its business operations and meeting its financial liabilities are available in a timely manner and at an optimal cost. The Company plans to meet the contractual obligations from its internal accruals and also maintains sufficient fund based and non-fund based credit limits with banks. Additionally, surplus funds generated from operations are parked in short term debt or liquid mutual funds and bank deposits which can be readily liquidated when required.

The following table shows the remaining contractual maturities of financial liabilities at the reporting date. The amounts reported are on gross and undiscounted basis and includes contractual interest payments.

(d) Capital management

For the purpose of Company’s capital management, capital includes issued equity share capital, other equity reserves and long term borrowed capital less cash and cash equivalents. The primary objective of capital management is to maintain an efficient capital structure to reduce the cost of capital, support corporate expansion strategies and to maximize shareholder’s value. Company has fund based and non fund based credit facilities with banks from which it borrows during peak seasons to meet its working capital requirements. Company has funded all of its expansion projects from its internal accruals except for the distillery expansion project undertaken in financial year 2015-16 for which the external commercial borrowing was availed.

Following table summarizes the capital structure of the Company.


Mar 31, 2018

1 Background

IFB Agro Industries Limited is a Company limited by shares, incorporated and domiciled in India. The Company is primarily engaged in the business of manufacturing alcohol, bottling of branded alcoholic beverages as well as processed and packed marine foods both for domestic and export markets. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The registered office of the Company is located at Plot No. IND-5, Sector-I, East Calcutta Township, Kolkata-700 107, India.

These financial statements are approved by the Company’s Board of Directors on 30 May 2018.

Basis of Preparation

(a) General information and statement of compliance with Indian Accounting Standards

The standalone financial statements comply in all material aspects with Indian Accounting Standards (IndAS) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as the “Act”) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act. Standalone financial statements up to the year ended 31 March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act (‘Previous GAAP’). These financial statements are the first standalone financial statements of the Company under Ind AS. Note 37 provides for an explanation of how the transition from previous GAAP to Ind AS has impacted the Company’s financial position, financial performance and cash flows. The Company has uniformly applied the accounting policies during the periods presented.

Historical cost convention

The standalone financial statements have been prepared on a historical cost basis, except the following:

- certain financial assets and liabilities (including derivative instruments) that are measured at fair value; and

- defined benefit plans - plan assets measured at fair value.

Accounting estimates and judgements

Preparation of financial statements requires the use of judgements, estimates and assumptions in the application of accounting policies that affects the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation of such estimates and judgments are done based on historical experience and other factors, including future expectations that are believed to be reasonable. Revisions to accounting estimates are recognized prospectively.

Details of critical estimates and judgments used which have a significant effect on the carrying amount of assets and liabilities, are provided in the following notes:

Income tax:

The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Refer note 28.

Useful life of property, plant and equipments:

Refer note 2 (b) for details.

Measurement ofdefined benefit obligations:

The costs of providing pensions and other post-employment benefits are charged to the standalone statement of profit and loss in accordance with IndAS 19 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 24 and 32.

Impairment of assets:

Refer note 2 (b), (c) and (e) for details.

Classification of leases:

Refer note 2 (n) for details.

Estimation of provisions and contingencies:

Refer note 2 (o), 15and31 for details.

Recognition of deferred tax assets:

Refer note 2 (p) for details.

Fair value measurements:

When the fair values of financials assets and financial liabilities recorded in the standalone balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. Refernote35 (c) for details.

The Company presents all its assets and liabilities in the standalone balance sheet based on current or non-current classification. Assets and liabilities are classified as current or non-current as per the Company’s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.

(b) Recent accounting pronouncements

Ministry of Corporate Affairs vide notification dated 28 March 2018, has issued the Companies (Indian Accounting Standards) Amendments Rules, 2018. These amended rules are effective from 1 April 2018.

Ind AS 115, Revenue from contracts with customers (Ind AS 115)

With the notification, of Ind AS 115, Ind AS 18 - Revenue has been withdrawn from the financial year beginning 1 April 2018 onwards and consequential amendments have also been made in other standards.

Ind AS 115 promotes to create a single model for revenue recognition for contracts. It applies to most revenue arrangements. Among other things, it changes the criteria for determining whether revenue is recognised at a point in time or over time. It provides a new contract-based five-step revenue model for revenue recognition and measurement. Ind AS 115 provides more detailed guidance on specific topics where existing revenue standards Ind AS 18 are lacking such as multiple element arrangements, variable consideration, sale with a right to return, licensing arrangements etc. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Appendix B Foreign currency transactions and advance consideration to Ind AS 21

Appendix B is inserted to Ind AS 21 - The effects of changes in foreign exchange rates. This appendix addresses the issue of determining the date of transaction for initial recognition of a foreign currency transactions (or part of it) under Ind AS 21, when an entity recognises a non-monetary asset or a non-monetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income (or part of it). It clarified that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition related asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or a nonmonetary liability arising from the payment or receipt of advance consideration in foreign currency. The Company is evaluating the requirements of the amendment and its impact on the financial statements.

Notes:

i) Represents deemed cost as on the date of transition to Ind AS. Gross block and accumulated depreciation have been netted off.

ii) The Company’s marine product processing plant at Kolkata has been erected on land obtained under finance lease of ninety-nine years, valid upto 9 August 2093 through license from Kolkata Metropolitan Development Authority, for which formal lease deed is yet to be executed.

iii) Plant and equipment includes electrical installation and laboratory equipment.

iv) Land under finance lease represents payments made and costs incurred in connection with acquisition of leasehold rights and are being amortized over the period of lease.

v) The Company, based on technical evaluation, has assessed and concluded that none of the components of property, plant and equipment have an useful life which is different from that of the principal asset.

vi) Term loan from banks (External commercial borrowings) is secured by an exclusive charge on all present and future assets (plant and equipments and civil work) at Noorpur unit and on other plant and equipment of the Company.

Notes:

i) As at the Balance Sheet date, none of the investments in equity instruments have been impaired.

ii) The investments in equity instruments are for long-term strategic purposes and not held for trading. Under IndAS 109, the Company has chosen to designate these investments as equity instruments at fair value through other comprehensive income as the management believes that this provides a more meaningful presentation for long-term investments than reflecting the changes in fair values immediately in the standalone statement of profit and loss for such period. Based on the aforesaid designation, changes in fair values are accumulated in Other Equity under the head "equity instruments through OCI". The Company transfers the accumulated balance from this account to retained earnings when such equity instruments are derecognized.

iii) The Company has measured its investment in subsidiary at cost in accordance with IndAS 27 - Separate Financial Statements.

(b) No additional shares were allotted as fully paid up by way of bonus shares or pursuant to contract without payment being received in cash during the last five years. Further, none of the shares were bought back by the Company during the last five years.

(*) SICGIL India Ltd. (‘SICGIL’) along with Persons Acting in Concert (‘PAC’) (collectively referred to as ‘SICGIL group’) holds 15.76% equity share capital in the Company. As per the order of the Hon’ble National Company Law Tribunal (‘NCLT’), dated 5 July 2017, the SICGIL Group’s voting rights in respect of the equity shares held by them has been restricted to 5% of the total equity share capital of the Company. However, the SICGIL Group has preferred an appeal against the said order before the Appellate Tribunal.

(d) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Such holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings, however, no such preferential amounts exists currently. During this financial year the Company has not proposed/declared any dividend. However, if any dividend is proposed by the Board of Directors, it will be subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend

Nature and purpose of reserves:

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of Section 52 of the Companies Act, 2013.

General reserve

General reserve has been created out of profits earned by the Company in the previous years. General reserves are free reserves and can be utilised in accordance with the requirements of the Companies Act, 2013.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfer to general reserves, dividends and other distributions made to the shareholders.

Other comprehensive income

The Company has elected to recognize changes in fair value of certain investments in equity instruments in other comprehensive income. These changes are accumulated within "Equity instruments through OCI" under other equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity instruments is derecognized.

(i) Foreign currency loan from bank

Term loan from bank (originally amounting to 7.5 million US dollars equivalent to Rs. 4,908.00 lacs) is secured by an exclusive charge on all present and future assets (plant and machinery and civil work) at Noorpur refinanced out of this loan and on other plant and equipments of the Company.

Repayable in 14 stipulated periodic instalments commencing from 31 December 2016 and ending on 31 January 2020 and carries an interest rate of 3 months libor plus 2.25%. Till 31 March 2018,6 installments amounting to USD 2.81 million equivalent to Rs. 1,890.19 lacs (excluding foreign exchange loss) has been repaid.

(ii) Vehicle loan from others

Vehicle loan (originally amounting to Rs. 39.90 lacs) is secured by hypothecation of the motor car financed out of this loan.

Repayable in 36 monthly instalments commencing from 03 March 2017. It carries an interest rate of 11.60% p.a. on monthly reducing balance. First 35 EMIs are ofRs. 0.78 lacs each. Company has an option either to pay the 36th EMI ofRs. 23.94 lacs or to surrender the car to the finance company.

Notes:

Security deposit repayable on demand includes an amount of Rs. 240.02 lacs (31 March 2017: Rs. 240.02 lacs and 1 April 2016: Rs. 240.02 lacs) obtained as a part of sale and lease back agreement entered into by the Company with Rajasthan State Electricity Board (RSEB) which expired on 28 February 2004. In terms of the said agreement, the residual value of the assets under lease acquired and leased back to RSEB (under physical possession of RSEB) is required to be adjusted against the corresponding amount of security deposit as mentioned above. Company’s appeal towards certain claims against RSEB is pending before the Hon’ble Jaipur High Court.

2 Leases

(a) Finance lease

The Company has acquired certain lands on finance lease. Such lease arrangements are for a period ranging from 30-99 years and the entire lease rentals has been paid upfront at the time of initiation of the lease. The Company has recognized these lands acquired on finance lease under property, plant and equipment (separately from other owned assets) at an amount equal to the upfront lease payment plus initial direct costs. Such amount is amortized over the period of the lease on a straight line method.

(b) Operating lease

The Company has entered into operating lease arrangements in respect of factory lands, office premises, other buildings and manufacturing facilities which are for a period generally ranging from 11 months to 6 years. All such lease arrangements are cancellable and are usually renewable on mutually agreed terms. Total lease rentals payable during the lease period is recognized in the standalone statement of profit and loss on straight line basis except where the increase in future lease rentals is to compensate for the general inflationary forces.

3 Disclosure in accordance with Ind AS-19 on employee benefits expense

(a) Post-employment benefits plan:

Retirement benefit plans of the Company comprising of gratuity, superannuation and provident fund consists of both defined benefit plan and defined contribution plan. Other long term employee benefits includes compensated absences subject to certain limits and rules. Gratuity, superannuation and compensated absences plans are funded through investments in Life Insurance Corporation of India (LICI). Provident fund for all employees are managed through government administrated funds. Gratuity and superannuation fund is managed by a Board of Trustees who are responsible for overall management of the fund and acts in accordance with the provisions of the respective trust deeds and rules, and in the best interest of the plan participants. The trustees do aperiodic review of the solvency of the fund and play a role in long term investments, risk management and funding strategy.

(b) Defined contribution plans

The provident fund and superannuation fund has been classified as defined contribution plan as the Company has an obligation to pay a fixed amount to the government administered fund and LICI respectively and has to further obligation if the assets of such funds are not enough to meet all the employee obligations provided under such plans.

(c) Defined benefit plans

Gratuity plan is a defined benefit plan that provides for lump sum gratuity payment to employees made at the time of their exit by the way of retirement (on superannuation or otherwise), death or disability. The benefits are defined on the basis of their final salary and period of service and such benefits paid under the plan is not subject to the ceiling limit specified in the Payment of Gratuity Act, 1972. Liability as on the Balance Sheet date is provided based on actuarial valuation done by a certified actuary using projected unit credit method. Board of Trustees administers the contributions made to the gratuity fund and such amounts are solely invested with Life Insurance Corporation of India (LICI).

(d) Other long-term employee benefits

The Company provides for encashment of accumulated leaves standing at the credit of its employees at the time of their exit by way of retirement (on superannuation or otherwise), death or disability, subject to certain limits and rules framed by the Company. Liability is provided based on the number of days of unutilized leave at each balance sheet date based on actuarial valuation done by a certified actuary using projected unit credit method. The Company had funded such plan with LICI.

The following table summarises the components of defined benefit expense recognized in the standalone statement of profit and loss/Other Comprehensive Income (‘OCI’) and the funded status and amounts recognised in the Balance Sheet for the respective plans:

(vi) Amounts contributed towards defined contribution plans have been recognized in the standalone statement of profit and loss under "Contribution to provident fund and other funds" in Note 24.

(vii) Major categories of plan assets:

Entire assets of both gratuity and compensated absences plans is maintained with the LICI.

(viii) Assumptions

With the objective of presenting plan assets and obligations of the defined benefit plans at their fair value at balance sheet date, assumptions used under Ind AS 19 are set by reference to market conditions at the valuation date.

Methods and assumptions used in preparing sensitivity analysis and their limitations:

The sensitivity results above determine their individual impact on the plan’s year end defined benefit obligation. In reality, the plan is subject to multiple external experience items which may move the defined benefit obligation in similar or opposite directions, while the plan’s sensitivity to such changes can vary over time.

(ix) Maturity analysis of the benefits payment:

Weighted average duration of both gratuity plan and compensated absences plan is 7 years. Expected benefit payments for each such plans over the years is given in table below:

Expected employer contribution in gratuity plan for the period ending 31 March 2019 is Rs. 55.72 lacs (31 March, 2018: Rs. 56.13 lacs) Expected employer contribution in compensated absences plan for the period ending 31 March 2019 is Nil (31 March, 2018: Rs. 62.23 lacs)

(e) Aforesaid post-employment benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

4 Related party disclosures

Information on related party transactions as required by Ind AS - 24 - Related Party Disclosures for the year ended 31 March 2018.

(a) List of related parties

(i) Parties where control exists (subsidiary)

(ii) Key management personnel

Name of the person Designation

Bijon Nag Non-Executive Director

Arup Kumar Banerjee Executive Director

Bikram Nag Executive Director

Indranil Goho Executive Directors (upto 18 October 2017)

Dipak Sen Chief Financial Officer (upto 25 November 2017)

Rahul Choudhary Chief Financial Officer (w.e.f. 2 December 2017)

Ritesh Agarwal Company Secretary & Chief Compliance Officer

(iii) Other Key management personnel

Name of the person Designation

Kanak Ghosh Assistant Vice President- Human Resource

Souravi Sinha General Manager - Human Resource

Sayandeep Chowdhury Senior Manager - Finance and Accounts (upto 21 May 2018)

Sudip Das Deputy General Manager - Internal Audit

Janardan Anna Gore President - New Projects

Swapan Kumar Bayen Vice President - Projects and Diversification (Distillery)

Santanu Ghosh CGM - Plant Operations and Safety (Distillery)

Rana Chatterjee Chief Financial Officer (Distillery)

Chinmoy Mishra Deputy General Manager - Plant operations and project

Debojyoti Bandopadhyay Deputy General Manager - Operations (Co2)

Debashish Ghosh Asst. Vice President - Business Head (IMIL)

S.K. Kundu Head - Tie-up manufacturing units (IMIL division)

Dipayan Basu Asst. General Manager - Commercial (IMIL)

Sanjoy Bhattacharya Unit Head - Panagarh plant (IMIL)

Supriyo Bandopadhyay Unit Head - Dankuni Plant (IMIL)

Nishu Jain Manager - Commerial (IMIL)

Soumitra Chakraborty Business Head (Marine Division)

Rajat Purkayastha General Manager - Finance - (Marine Export, Ongole)

Rahul Dev Pathak General Manager - National Sales Head (Marine foods)

Sonjoy Banerjee Deputy General Manager - Finance and Accounts (Marine foods)

Soumen Basu Chowdhury Asst. General Manager (Marine feed)

Nilesh Soni Senior Manager Finance (Marine Export, Kolkata)

Madan Dutta Senior Manager (Marine feed)

(iv) Enterprises over which KMP or relatives of KMP exercise control/significant influence: Name of the entity

Travel Systems Limited IFB Industries Limited

(v) Post employment benefit plans Name of the entity

IFB Agro Industries Limited Employees Gratuity Fund IFBAIL Employees Super annuation Fund

5 Segment reporting

(a) Basis of segmentation:

The Company has following business segments, which are its reportable segments. These segments offer different products and are managed separately because they require different technology and production processes. Operating segment disclosures are consistent with the information provided to andreviewed by the chief operating decision maker.

(i) These investments are not held for trading. Upon application of Ind AS -109 - Financial Instruments, the Company has chosen to measure these investments in quoted equity instruments at FVTOCI irrevocably as the management believes that presenting fair value gains and losses relating to these investments in the standalone statement of profit and loss may not be indicative of the performance of the Company.

(ii) The management assessed that the fair value of cash and cash equivalents, other bank balances, bank deposits, loans to employees, trade receivables, advance to manufacturing units, trade payables and other financial liabilities approximate the carrying amount largely due to shortterm maturity of these instruments.

(b) Fair value hierarchy

The fair value of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly market between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent in all the years. Fair value of financial instruments referred to in note (a) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable entity specific inputs.

The categories used are as follows:

- Level 1: quoted prices (unadjusted) in active markets for financial instruments.

- Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

- Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

For assets and liabilities which are measured at fair value as at balance sheet date, the classification of fair value by category and level on inputs used is givenbelow:

(c) Computation of fair values

Investments in mutual funds are short-term investments made in debt or liquid funds whose fair value are considered as the net asset value (NAV) declared by their respective fund houses on a daily basis. Thus the declared NAV is similar to fair market value for these mutual fund investments since transactions between the investor and fund houses will be carried out at such prices.

Investments in equity instruments represents long term strategic investments made in certain listed or unlisted companies. For listed companies, fair value is based on quoted market prices of such instruments as on the balance sheet date on the recognized stock exchange (where traded volume is more during last six months). For investments in unquoted securities, the management has ascertained the fair value by using discounted cash flow (‘DCF’) method (income approach).

(d) Fair value of assets and liabilities measured at cost/amortized cost

The carrying amount of financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amount would be significantly different from the values that would be eventually received or settled. Management assessed that fair values of cash and cash equivalents, other bank balances, bank deposits, loans to employees, trade receivables, advance to manufacturing units, trade payables and other financial liabilities approximate their carrying amounts due to the short term maturities of these instruments. For long-term borrowings at fixed/floating rates, management evaluates that their fair value will not be significantly different from the carrying amount.

6 Financial risk management

Company’s business activities are exposed to a variety of financial risks like credit risk, market risks and liquidity risk. Company’s senior management is responsible for establishing and monitoring the risk management framework within its overall risk management objectives and strategies approved by the Board of Directors. Such risk management strategies and objectives are established to identify and analyze potential risks faced by the Company, set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and assess risk management performance. Any change in Company’s risk management objectives and policies need approval of it’s Board of Directors.

(a) Credit risk

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, other balances with banks, loans and other receivables.

(i) Trade receivables

Customer credit risks is managed by each business unit in accordance with the credit policy, procedures and controls relating to credit risk management. Credit quality of each individual customer is assessed based on financial positions, past trends, market reputation, prevailing market and economic conditions, expected business and anticipated regulatory changes. Based on this evaluation, credit limit and credit terms are decided for each individual customer. Exposure to customer credit risk is regularly monitored through credit locks and release. The Company has a low concentration of risk in respect of trade receivables since its customers are widely spread and operates in diversified industries and varying market conditions. Export customers are secured through letter of credit and generally not subject to credit risks.

Impairment of trade receivables is based on expected credit loss model (simplistic approach) depending upon the historical data, present financial conditions of customers and anticipated regulatory changes. Maximum exposure to credit risks at the reporting date is disclosed in Note 9. Company does not hold any collateral in respect of such receivables.

(ii) Other financial instruments

Credit risks from other financial instruments includes mainly cash and cash equivalents and deposits with banks. Such risks is managed by the central treasury department of the Company in accordance with Company’s overall investment policy approved by its Board of Directors. Investments of surplus funds are made in short term debt/liquid mutual funds of rated fund houses having the highest credit rating and in short term time deposits of reputed banks with a very strong financial position. Investment limits are set for each mutual fund and bank deposits. Risk concentration is minimized by investing in a wide range of mutual funds/bank deposits. These investments are reviewed by the Board of Directors on a quarterly basis.

The Company has no exposure to credit risk relating to its cash and cash equivalents. Credit risk for other financial instruments are monitored by the central treasury department in accordance with its overall risk management policies. Impairment of such assets is computed per expected credit loss model (general approach) assessed on the basis of financial position, detailed analysis and expected business of the counterparty to such financial assets.

(b) Market risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risks comprises of three types - interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risks include long term borrowings, investments in mutual funds or equity instruments and derivative instruments.

(i) Foreign currency risk management

Foreign currency is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to change in foreign currency rates. Company is exposed to foreign currency risks on trade receivables and long term external commercial borrowing, both denominated in USD. Foreign exchange exposures are managed by the central treasury department in accordance with the overall policy parameters approved by the Board of Directors. Trade receivables are hedged by entering into forward contracts (to sell USD) with authorized banks that matches the timings of the forecasted receipts. Company has kept its external commercial borrowing unhedged as it has natural hedging due to export earnings. Carrying amount of Company’s financial assets and liabilities denominated in foreign currency (USD) as at the Balance Sheet date is as under:

Foreign currency sensitivity analysis

The Company is exposed to US Dollars. Following table provides the sensitivity impact to a 5% strengthening/weakening of INR in respect to US Dollars. Sensitivity analysis is done on net exposure after adjusting the forward contracts. A positive number below indicates an increase in profit/equity when INR appreciates against US Dollars and when the net exposure is a liability.

Note:

Company’s foreign currency risk exposure has reduced over the years due to decrease in outstanding amount of external commercial borrowing, resulting from scheduled repayments.

(ii) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to change in market interest rates. Company has long term borrowings both at fixed and variable interest rates. Such borrowings are measured at amortized costs. The Company is exposed to interest rate risk arising from its external commercial borrowing taken at floating rate of interest (libor plus 225 basis points), while it does not have any interest rate risks arising from other borrowings at fixed interest rates. Company’s central treasury department manages such interest rate risk in accordance with its overall risk policy approved by the Board of Directors. Company has not hedged its long term external commercial borrowing as it does not anticipates any major change in libor which can materially impact its future cash flows.

(iii) Price risk

Price risk is the risk that the fair value or future cash flows will fluctuate due to change in market prices. The Company is exposed to price risk arising from its short term investments in debt or liquid mutual funds. Company’s central treasury department manages such risk in accordance with its overall risk management policy approved by the Board of Directors. The Company mitigates the risk by investing in a large number of rated funds. Investment limit in each fund is specified. All purchase or sale of mutual funds are reviewed by the Board of Directors on a quarterly basis. Company assesses that as returns from shortterm debt or liquid mutual funds are steady and depends on interest rates or market yield, there is very remote chance of any significant fluctuation in their fair values which can materially impact Company’s future cash flows.

(c) Liquidity risk:

Liquidity risk is the risk that the Company may not be able to meet its contractual obligations associated with its financial liabilities. The central treasury department of the Company manages its liquidity risk by preparing and continuously monitoring business plans or rolling cash flow forecasts which ensures that the funds required for carrying on its business operations and meeting its financial liabilities are available in a timely manner and at an optimal cost. The Company plans to meet the contractual obligations from its internal accruals and also maintains sufficient fund based and non-fund based credit limits with banks. Additionally, surplus funds generated from operations are parked in short term debt or liquid mutual funds and bank deposits which can be readily liquidated when required.

The following table shows the remaining contractual maturities of financial liabilities at the reporting date. The amounts reported are on gross and undiscounted basis and includes contractual interest payments.

(d) Capital management

For the purpose of Company’s capital management, capital includes issued equity share capital, other equity reserves and long term borrowed capital less cash and cash equivalents. The primary objective of capital management is to maintain an efficient capital structure to reduce the cost of capital, support corporate expansion strategies and to maximize shareholder’s value. Company has fund based and non fund based credit facilities with banks from which it borrows during peak seasons to meet its working capital requirements. However such short term borrowings are generally squared off as on the Balance Sheet date. Company has funded all of its expansion projects from its internal accruals except for the distillery expansion project undertaken in financial year 2015-16 for which the external commercial borrowing was availed.

Following table summarizes the capital structure of the Company.

7 First time adoption of Ind AS

These are the Company’s first standalone financial statements prepared in accordance with Indian Accounting Standards (Ind AS).

The accounting policies set out in Note 2 has been applied consistently in preparing the opening Ind AS Balance Sheet as on 1 April 2016 (the Company’s date of transition), the comparative information presented in these standalone financial statements for the year ended 31 March 2017 and in preparing these standalone financial statements for the year ended 31 March 2018. In preparing its opening Ind As Balance Sheet, the Company has adjusted the amounts reported previously in standalone financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standard Rules), 2006 (as amended) and other relevant provisions of the Act (Indian GAAP). An explanation of how the transition from previous Indian GAAP to Ind AS has impacted the Company’s financial position, financial performance and cash flows is set out in the foot notes to first time adaption.

Ind AS 101 has set out certain mandatory exceptions and optional exemptions to be applied for transition from the existing Indian GAAP to Ind AS. The Company has adopted the following in preparing its opening Ind AS Balance Sheet.

(a) Optional exemptions

(i) Deemed cost - Ind AS 101 allows the first time adopter to measure its property, plant and equipment at its carrying amount per the erstwhile Indian GAAP as on the date of transition. Accordingly, the Company has opted to measure all its classes of property, plant and equipment at their historical costs as on the transition date, i.e. 1 April 2016.

(ii) Designation of previously recognized equity instruments - Ind AS 101 permits the entity to designate its existing equity instruments on the basis of the facts and circumstances existing as on the transition date. The Company has elected to apply this exemption for its long term, strategic investments in equity shares.

(b) Mandatory exceptions

(i) Derecognition of financial assets and liabilities - Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition. Alternatively such first time adopter can apply such de-recognition provisions retrospectively from a date of Company’s choice, if adequate information required to apply Ind AS 109 to financial assets and liabilities de-recognized previous to the date of transition was initially available at the time of such transactions. The Company has elected to apply the de-recognition provision of Ind AS 109 prospectively from the date of transition.

(ii) Classification and measurement of financial assets - Ind AS 101 provides that classification and measurement of financial assets recognized earlier under the previous Indian GAAP should be based upon facts and circumstances existing as on the transition date. The Company has assessed the same accordingly.

(iii) Estimates - An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

(c) Reconciliation between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for the prior periods. The following tables represent the reconciliation from previous Indian GAAP to Ind AS.

(iii) Effect of Ind AS adoption on the Standalone Statement of Cash flow for the year ended 31 March 2017

There are no material differences between the standalone statements of cash flow prepared under previous GAAP and IndAS except pursuant to foot note 1 of Note 37, under the erstwhile Indian GAAP cash flow from tie-up manufacturing units were presented on net basis, while under Ind AS cash flow of tie-up manufacturing units from each individual items are aggregated with their respective line items in the standalone statements of cash flow prepared for the Company. This has resulted in following changes in the standalone statement of cash flow for the year ended 31 March 2017._

(iv) Foot notes to first time adoption:

(1) Tie-up manufacturing arrangements

The Company has entered into arrangements with certain bottling units (tie-up units) for manufacture of Indian Made Indian Liquor (IMIL) under its own brand. The tie-up units has the necessary license and regulatory permits required for such manufacture. Under previous GAAP, the Company has recognized the net surplus from tie-up operations as "other operating income" and assets and liabilities of such tie-up operations were off-settled and disclosed as net working capital advances to tie-up units. However, under Ind AS 18, the Company has grossed such amounts in its standalone statement of profit and loss and balance sheet. Accordingly, the sale from such units is recognised as revenue and expenses incurred are recognised in respective captions. These changes however has no impact on the equity and profits for the year. Sale of spirit and purchase of bottles between the Company and tie-up units recognized as sale and purchase respectively, per previous Indian GAAP, has now been eliminated under Ind AS.

(2) Fair valuation of investments

Under the previous Indian GAAP investments were classified into current and non-current based on the intended holding period and realisability. Investments in non current equity instruments were measured at cost less provision for decline (other than temporary decline) in the value of such investments while short term mutual funds were valued at cost or net realizable value whichever is lower as at each balance sheet date.

Under Ind AS, these investments are required to be measured at fair value. Non-current equity instruments has been designated as fair value through other comprehensive income (FVTOCI) and changes in its fair value as on the transition date is accounted in equity instrument through OCI with an equivalent change in investment value. Subsequent change in fair value for year ended 31 March 2017 is accounted under OCI. This resulted in an increase of Rs. 1,742.50 lacs in investment and an equivalent amount of increase in other equity as on the transition date. For the year ended 31 March 2017 there is a further fair value gain of Rs. 687.59 lacs accounted for under OCI reserves with corresponding increase in investment values.

Short term mutual funds are classified as fair value through profit or loss and measured at its fair value. Fair value change as on the transition date is adjusted in retained earnings with an equivalent increase in investment valuation. Fair value change for the year ended 31 March 2017 is accounted in standalone statement of profit and loss with a corresponding adjustment in investment amount. This resulted in an increase of t 158.68 lacs in investment and an equivalent amount of increase in retained earnings as on the transition date. For the year ended 31 March 2017 there is a fair value loss of Rs. 89.76 lacs accounted in standalone statement of profit and loss with corresponding adjustment in investment values.

(3) Financial instrument - derivative contract

Under the previous Indian GAAP, forward contract cost were accounted for as prescribed under AS 11 "The Effects of Changes in Foreign Exchange Rates" under which the forward premium was amortized over the period of forward contract. Under Ind AS 109, all derivative financial instruments are to be marked to market and any resultant gain or loss on settlement as well as on outstanding contracts as at the balance sheet date is to be charged or credited to the standalone statement of profit and loss.

Accordingly the mark to market gain or loss has been recognized on all derivative contracts and unamortized forward premium balance recognized under aforesaid AS 11 has been reversed. As a result of this adjustments, total equity as on 1 April 2016 is higher by Rs. 0.64 lacs. Profit for the year ended 31 March, 2017, is lower by Rs. 0.64 lacs. The Company does not have any outstanding forward contracts as on 31 March 2017.

(4) Long-term borrowings

Earlier Indian GAAP required transaction costs incurred towards origination of borrowings to be recognized in the standalone statement of profit and loss in the period in which it is incurred. Ind AS 109 requires such transaction costs to be deducted from the carrying amount of such borrowings on initial recognition. This cost is recognized in the standalone statement of profit and loss over the tenure of the borrowing as part of the borrowing costs, using effective rate of interest.

Accordingly non-current borrowings (including its current maturities) as on 31 March 2017 has increased by Rs. 6.81 lacs (1 April 2016: decrease by Rs. 5.92 lacs) with a corresponding adjustment to retained earnings. For the year ended 31 March 2017 borrowing costs has increased by Rs. 12.73 lacs and foreign exchange gain has increased by Rs. 0.40 lacs due to amortization of transaction costs incurred on initial recognition of such borrowings.

(i) Borrowing costs

Exchange differences arising from foreign currency borrowings to the extent they are regarded as adjustment to interest costs, forms part of the borrowing costs. Under Indian GAAP, while exchange loss incurred during a period was adjusted with borrowing costs, exchange gain arising in any period was recognised in "other income". Ind AS 23 requires that where any unrealised exchange loss incurred in an earlier period has been treated as an adjustment to borrowing costs, any subsequently realised or unrealised exchange gain to the extent of such previously recognised exchange loss, should be recognised as an adjustment to borrowing costs.

Accordingly finance cost for the year ended 31 March 2017 has decreased by Rs. 32.72 lacs (pre-tax) with a corresponding decrease in other income.

(5) Remeasurements of post employment defined benefit plans

Under Ind AS, remeasurement of defined benefit obligation, i.e. actuarial gain or loss and expected return on plan assets (excluding the amount included in net interest on net defined benefit obligation) are recognized in other comprehensive income instead of the standalone statement of profit and loss while net interest expense or income is recognized under finance costs or interest income as may be appropriate. Under Indian GAAP all of these items formed apart of the employee benefit expenses in the standalone statement of profit and loss.

For the year ended 31 March 2017, employee benefits expense has decreased by Rs. 191.92 lacs, interest income increased by Rs. 3.58 lacs and other comprehensive income decreased by Rs. 195.50 lacs (all before tax) due to this change. However there is no change in total equity both as on 1 April 2016 and 31 March 2017.

(6) Deferred tax

Erstwhile Indian GAAP required recognition of deferred tax on timing differences while Ind AS 12 requires deferred tax to be recognized for temporary differences. Accordingly Company has recognized deferred tax on all adjustments made on transition to IndAS with corresponding adjustments in other equity. Company has recognized deferred tax asset on the carrying amount of MAT credit entitlement on 31 March 2017 amounting to Rs. 711.75 lacs (1 April 2016: Rs. 579.93 lacs).

This has resulted in an increase in deferred tax liabilities as on 31 March 2017 by Rs. 458.09 lacs (1 April, 2016 - Rs. 400.46 lacs) with a corresponding decrease in other equity. Consequently, profit for the year ended 31 March 2017 has increased by Rs. 61.88 lacs and other comprehensive income for the sameperiodhas increased by Rs. 465.25 lacs.


Mar 31, 2017

1. There is no movement in the Equity share capital during the current and comparative period.

2. No additional shares were allotted as fully paid up by way of bonus shares or pursuant to contract without payment being received in cash during the last five years. Further, none of the shares were bought back by the Company during the last five years.

3. Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of f 10 per share. Such holder of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings. During this financial year the Company has not proposed/declared any dividend. However, if any dividend is proposed by the Board of Directors, it will be subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

4. Nature of security & terms of repayment for secured borrowings availed from the bank

Nature of security: Term loan from bank (originally amounting to 7.5 million US dollars equivalent to Rs.4,908.00 lacs) is secured by an exclusive charge on all present and future assets (plant and machinery and civil work) at Noorpur refinanced out of this loan and on other plant and machinery of the Company.

Terms of repayment: Repayable in 14 stipulated periodic installments commencing from 31 December 2016 and ending on 31 January 2020 and carries an interest rate of 3 months libor plus 225 basis points. Ason31 March 2017,2 installments amounting to 0.94 million US dollars equivalent to Rs.613.50 lacs (excluding foreign exchange loss ofRs.22.42 lacs) has been repaid.

5. Nature of security and terms of repayment for other secured borrowings

Nature of security: Car loan (originally amounting to Rs.39.90 lacs) is secured by hypothecation of the motor car financed out of this loan.

Terms of repayment: Repayable in 36 monthly installments commencing from 03 March 2017. It carries an interest rate of 11.60% p.a. on monthly reducing balance. First 35 EMIs are ofRs.0.78 lacs each. Company has an option either to pay the 36th EMI ofRs.23.94 lacs or to surrender the car to the finance company.

6. Security deposit includes an amount of Rs.240.02 lacs (Previous Year Rs.240.02 lacs) obtained as a part of sale and lease back agreement entered into by the Company with Rajasthan State Electricity Board (RSEB) which expired on 28 February 2004. In terms of the said agreement, the residual value of the assets under lease acquired and leased back to RSEB (under physical possession of RSEB) is required to be adjusted against the corresponding amount of security deposit as mentioned above. Company’s appeal towards certain claims against RSEB is pending before the Hon''ble Jaipur High Court.

7. Deferred revenue income represents capital subsidy ofRs.50 lacs received by the Company on 30 December 2016 from Ministry of New and Renewable Energy (MNRE), Government of India, in respect of its 2.5 MW co-generative power plant commissioned on 28 March 2014. An amount of Rs.10.13 lacs has been recognized as income for the current year.

8. The Company has identified micro, small and medium enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA) on the basis of information made available by the respective suppliers or vendors of the Company. Based on the information available with the Company and copy of registration certificates received, as at the year end Rs.396.50 lacs is dues to micro, small and medium enterprises (previous year Rs.77.60 lacs). During the year there has been no delay in payment to MSMEDA creditors beyond the period of 30 days and hence no interest is payable on the same.

9. Estimated amount of capital contracts remaining to be executed and not provided for, net of advances Rs.153.03 lacs (Previous year Rs.838.40 lacs).

10. Previous year''s amounts have been regrouped/ rearranged wherever considered necessary to conform with the classification of current year.


Mar 31, 2016

Nature of security & terms of repayment for secured borrowings availed from the bank

Nature of Security: Term loan from bank for 7.5 million US dollars equivalent to Rs, 4,908.00 lacs (excluding adjustment for foreign exchange difference amounting to Rs, 55.14 lacs) is secured by an exclusive charge on all present and future assets (plant and machinery and civil work) at Noorpur refinanced out of this loan and on other plant and machinery of the Company.

Terms of Repayment: Repayable in 14 stipulated periodic installments commencing from 31 December 2016 and ending on 31 January 2020 and carries an interest rate of3 months libor plus 225 basis points.

Note:

Security deposit includes an amount of Rs, 240.02 lacs (Previous Year Rs, 240.02 lacs) obtained as a part of sale and lease back agreement entered into by the Company with Rajasthan State Electricity Board (RSEB) which expired on 28 February, 2004. In terms of the said agreement, the residual value of the assets under lease acquired and leased back to RSEB (under physical possession of RSEB) is required to be adjusted against the corresponding amount of security deposit as mentioned above. Company’s appeal towards certain claims against RSEB is pending before the Hon''ble Jaipur High Court.

Note:

The Company has identified micro, small and medium enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA) on the basis of information made available by the respective suppliers or vendors of the Company. Based on the information available with the Company and copy of registration certificates received, as at the yearend '' 77.60 lacs is dues to micro, small and medium enterprises (previous year '' 42.37 lacs).During the year there has been no delay in payment to MSMEDA creditors beyond the period of 30 days and hence no interest is payable on the same.

a) The factory buildings at Noorpur and Dankuni, West Bengal have been constructed on land taken on lease/rent from related parties.

b) Company’s marine product processing plant at Kolkata has been erected on land obtained under lease for ninety nine years, valid up to 9 August 2093 through license from Kolkata Metropolitan Development Authority, for which formal lease deed is yet to be executed.

c) Plant & machinery includes electrical installation and laboratory equipment.

d) Out of total value of building, Rs, 3,251.03 lacs (previous year Rs, 2,941.62 lacs) has been constructed on leasehold land.

e) Land under lease represents payments made and costs incurred in connection with acquisition of leasehold rights and are being amortized over the period of lease.

f) Modernization project ''50 KLPD Grain Distillery at Noorpur'' has been completed during this year and commercial production has commenced from 14 January 2016.

g) During the year Company recognized an impairment loss of Rs, 429.69 lacs in respect of certain plant and machinery pertaining to Distillery, which has been retired from active use and held for disposal.

h) Freehold land include Rs,46.24 lacs acquired from Nurpur Gases Private Limited for which registration is pending.

i) The Company based on technical evaluation has assessed and concluded that none of the components of fixed assets have an useful life which is different from that of the principle asset, j) Additions to plant & machinery includes ? 4.5 5 lacs being general administrative expenses capitalized along with the cost of asset, (previous year Rs,3.16 lacs)

Notes:

1 The Company''s operations are diversified into two main business segments, namely :

a) Spirit, Liquor and Spirituous Beverages comprising manufacturing of Extra Neutral Alcohol, Rectified Spirit and Indian Made Indian Liquor.

b) Marine, comprising Marine product processing, for sale in export and domestic markets and Marine Feed trading.

2 Inter segment sales involves sale of dry ice by Distillery to Marine division at cost.

35. Related Party Disclosures

As per Accounting Standard-18 issued by the Institute of Chartered Accountants of India, disclosures in respect of “Related Parties” are as follows:-

List of Related Parties:

Key Management Personnel (KMP):

Mr. Bijon Nag, Chairman

Mr. Bikram Nag, Joint Executive Chairman

Mr. Arup Kumar Banerjee, Vice Chairman and Managing Director

Mr. Indranil Goho, Joint Managing Director

Mr. Dipak Sen, Chief Financial Officer

Mr. Ritesh Agarwal, Company secretary & Chief compliance officer

Mr. Kanak Ghosh, AVP-HR

Mr. Sudip Das, AGM-Internal Audit

Mr. Dipayan Basu, Senior Manager- Accounts

Mr. Sayandeep Chowdhury, Manager- Accounts

Dr. J.A. Gore, President (Distillery)

Mr. S.K.Bayen, VP-Projects & Diversification

Mr. Santanu Ghosh, CGM- Plant Operations & Safety

Mr. Rana Chatterjee, Chief Financial Officer (Distillery)

Mr. Supriyo Bandopadhyay, Head- CO2 Operations

Mr. Pratap Mukherjee, Chief Operating Officer (Marine Division)

Mr. Aditya Narayan Kale, G.M.- New Project & Operations Mr. Rajat Purkayastha, G.M.-Finance (Projects-Marine Division)

Mr. Nilesh Soni, Manager-Finance (Marine Division)

Mr. Soumen Basu Chowdhury, AGM-Marine Feed Mr. Rahul Pathak, National Sales Head (Marine Foods)

Mr. Soumitra Chakraborty, AGM- Supply Chain Mr. Madan Dutta, Senior Manager- Marine Feed Mr. D Deb, Head-EXIM Desk Mr. Debashish Ghosh, Business Head - IMIL Division Mr. Debojyoti Bandopadhyay, DGM- (Dankuni Plant)

Mr. S.K. Kundu, DGM (Procurement & Spirit Sales)

Mr. Sanjoy Bhattacharya, AGM (Head Panagarh Plant)

Mr. Debadideb Chandra, Manager (Plant Head)

Mr. Saibal Dutta Chowdhury, Asst. Manager (Production & Q.C.-Panagarh Plant)

Mr. Abhijeet Banerjee, Business Head (Marine Foods) - up to 31 May 2015

Companies that have a member of Key Management Personnel in common

Nurpur Gases Private Limited

Asansol Bottling and Packaging Company Private Limited Travel Systems Limited IFB Industries Limited

Note: Related parties’ relationships as identified by the Company and relied upon by the Auditors.

1. Additional Information

Company has entered into arrangements with bottling units (“tie-up unit”) at Kandi and Purulia for production and marketing of its own IMIL brands. Production in premises of tie-up units in accordance with such arrangements is carried out under close supervision of the Company. The Company is also required to ensure adequate finance to the tie-up units wherever required. Though under this agreement, the production and sales are accounted for in the books of tie-up units, the Company promotes its brands through this arrangement. Accordingly, it is considered appropriate to disclose the following quantitative and value information for the financial year, as furnished by tie-up units.


Mar 31, 2013

1. Background and nature of operations

IFB Agro Industries Limited (the "Company") is engaged in the business of manufacturing alcohol, bottling of branded alcoholic beverages as well as processed and packed marine foods both for domestic and export markets. The Company is listed in BSE and NSE.

2. The Company has discontinued the IMFL bottling business in West Bengal during the year and has entered into an arrangement with a bottling unit ("tie-up unit") in West Bengal for production and marketing of its own IMFL brands. Similar tie up arrangements exist in other states, namely Assam and Orissa .The production in the premises of tie-up units under the said arrangements, wherein each party''s obligations are stipulated, is carried out under close supervision of the Company. The marketing is entirely the responsibility of the Company. The Company is also required to ensure adequate finance to the tie-up units wherever required. Though under the agreements, the production and sale are accounted for by and in the books of the tie-up units, the Company promotes its brands through these arrangements. Accordingly, it is considered appropriate to disclose the following quantitative and value information for the year, as furnished by the tie-up units:

i) Profit from tie-up operations detailed as under is included in ''Other operating revenue''.

3. Related Party Disclosures

As per Accounting Standard-18 issued by the Institute of Chartered Accountants of India, disclosures in respect of "Related Parties" are as follows:- A. List of Related Parties: Associates:

Nurpur Gases Private Limited Travel Systems Limited

IFBAutomotive Private Limited IFB Industries Limited

Asansol Bottling & Packaging Co. Private Limited Special Drinks Private Limited

CPL Industries Limited Zenith Investments Limited CPL Projects Limited

Management Personnel:

Mr. Bijon Nag, Chairman

Mr. Bikram Nag, Joint Executive Chairman

Mr. A.K. Banerjee, Managing Director

Mr. Indroneel Goho, President & COO

Dr. J A. Gore, President - Distillery

Mr. Rahul Choudhary, Vice President Finance & Company Secretary

Mr. Santanu Ghosh, GM Operations - Distillery

Mr. S. K Bayen, AVP- Projects & Diversification- Distillery

Mr. Rana Chaterjee, Chief Financial Officer (Distillery)

Mr. R Purkayastha, GM Finance & Commercial - IMFL Operations

Mr. Dhiman Saha, AVP - IMFL Operations

Mr. A K Palit, GM - IMFL Sales

Mr. Pratap Mukherjee, COO - Marine Business

Mr. D Deb, Sr Manager - Head EXIM Desk

Mr. Abhijit Banerjee, Business Head - Marine Foods

Mr. Soumen Basu Chowdhury, Sr Manager - Marine Feed

Mr. Debojyoti Bandopadhyay, Head-IMFL Operations & Safety-Dankuni Plant

Mr. Debasish Ghosh, Head Bottling Plants (Division 1)

Mr. Saptarshi Bhattacharya, Business Head - Panagarh Plant

Mr. Kanak Ghose, AVP-HR

Tax Act 1956 for 2005-06 and 2007-08 and under West Bengal VAT Act 2003 for the year 2005-06, 2006-07, 2007-08 and 2008-09 for payment of duty including interest and penalty not acknowledged by the Company being not sustainable in the Company''s considered view. Matter pending under appeal with West Bengal Commercial Taxes Appellate and Revisional Board/ Additional Commissioner of Commercial Taxes , West Bengal

4. Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) Rs 1,255 lacs (previous year Rs 14.99 lacs).

5. Previous year''s amounts have been regrouped/rearranged to conform to the classification of the current year, wherever considered necessary.


Mar 31, 2012

1.1 The Company announced a Voluntary Retirement Scheme (VRS) for the employees of one of the units during the year. A sum of Rs. 285.95 Lakh (Previous year Rs. Nil) has been paid under VRS during the year and is included in "Salaries, Wages & Bonus"

Notes:

1. The Company's operations are diversified into two main business segments, namely :

a) Spirit, Liquor and Spirituous Beverages comprising of Rectified Spirit, Country Liquor and Indian Made Foreign Liquor.

b) Marine division comprising of Marine products processing & exports, domestic selling and Marine Feed trading.

2. Segments have been identified and reported in accordance with Accounting Standard 17 Segment Reporting.

3. Segment Revenue in each of the above domestic Business Segments primarily includes sales, processing charges and export incentives in the respective segments.

4. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

2. The Company has entered into arrangements with certain bottling units ("tie -up units") in Assam, Orissa & Bihar for production and marketing of its own IMFL brands. The production in the premises of tie-up units under the said arrangements, wherein each party's obligations are stipulated, is carried out under the Company's close supervision. The marketing is entirely the responsibility of the Company. The Company is also required to ensure adequate finance to the tie-up units, whenever required. Though under the agreements, the production and sale are accounted for by and in the books of the tie-up units, the Company promotes its brands through these arrangements. Accordingly, it is considered appropriate to disclose the following quantitative and value information for the year, as furnished by the tie-up units:

iii) The balance due from tie-up units, of Rs. 572.52 Lacs (31.03.2011: Rs. 402.36 Lacs) is included under "Advances" (Note 18). This is on account of the financing by the company of inventories, debtors and other current assets net of current liabilities on behalf of the units.

3. Contingent Liabilities and Commitments (to the extent not provided for)

(Rs. in Lacs)

31.03.12 31.03.11

Contingent Liabilities:

A) Claims against the company not acknowledged as debts

i) Show Cause Notice issued by Customs Department against the Marine Division 210.53 210.53 of the Company. The Company had filed suitable reply and also faced personal hearing. The adjudication order is still awaited. The Company is of the considered view that the demand is not sustainable.

ii) Demand raised by Excise Department for payment of duty not acknowledged by 10.95 10.95 the company, being not sustainable in the Company's considered view. Matter pending with Commissioner of Excise, Government of West Bengal.

iii) Demand raised by Sales Tax Department under West Bengal Sales Tax Act 1994 2564.88 906.47 for the years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09, Central Sales Tax Act 1956 for 2005-06 and 2007-08 and under West Bengal VAT Act, 2003 for the years 2005-06, 2006-07, 2007-08 and 2008-09 for payment of duty including interest and penalty, not acknowledged by the company being not sustainable in the Company's considered view. Matters pending under appeal with West Bengal Commercial Taxes Appellate and Revisional Board/Additional Commissioner of Commercial Taxes, West Bengal

Total 2,786.36 1,127.95

B) Other moneys for which the company is contingently liable

i) Letters of Credit issued by Bankers 1.60 114.91

ii) ESI liability for the period April 1997 - March 2011, pending renewal - 15.97 of exemption at Noorpur Factory

Total 1.60 130.88

C) Disputed income tax demand outstanding for the Assessment year 2009-10 is Rs. 914.46 Lacs (31.03.2011: Rs. Nil) which is not acknowledged as debt by the Company and the appeal is pending for adjudication before CIT (Appeals). Based on certain decisions of the appellate authorities and the interpretation of the relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

Commitments:

Estimated amount of Capital Contracts remaining to be executed and not provided for (net of advances) Rs. 14.99 Lacs (previous year Rs 770.55 Lacs).

4. Trade Receivables, Advances, Deposits and Trade Payables are subject to confirmation.

5. In terms of Article 76 of the Article of Association of the Company, Mr. Bijon Nag is a permanent Director of the Company. As he does not seeks re-appointment by rotation, the Company is of the opinion that the provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to him.

6. As notified by the Ministry of Corporate Affairs of the Government of India, revised Schedule VI under the Companies Act, 1956 is applicable to all financial statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended 31st March, 2012 are prepared in accordance with the aforesaid revised Schedule VI.

7. Previous year's figures have been regrouped/reclassified to conform to the current year's classification, wherever considered necessary.


Mar 31, 2011

1. Share Capital

a) Out of the Issued and Subscribed Capital, 104,000 Equity Shares of Rs.10 each were issued as fully paid Bonus Shares by capitalisation of Reserves and Surplus in earlier years.

2. Secured Loans

a) Cash Credit including FCNR loans from Banks are secured by (i) hypothecation charges ranking pari passu inter se on the Companys entire current assets, (ii) second charge ranking pari passu inter se on the Companys fixed assets and (iii) personal guarantee of one director.

b) Export Packing Credits from Banks are secured by (i) hypothecation of exportable stocks (ii) personal guarantee of one director.

4. Fixed Assets

a) The factory buildings at Noorpur and Dankuni, West Bengal have been constructed on land leased/rented by associate concerns.

b) Companys Marine Product Processing Plant, Kolkata has been erected on land amounting to Rs. 7,877 thousand, obtained under lease for ninety nine years valid upto 9th August, 2093 through license from Calcutta Metropolitan Development Authority, for which formal lease deed is yet to be executed.

c) Plant & Machinery includes electrical installation and laboratory equipment.

d) Building worth Rs. 194,072 thousand (Previous Year Rs. 193,454 thousand) has been constructed on leasehold land.

5. The Lease Agreement entered into with Rajasthan State Electricity Board (RSEB) expired on 28th February, 2004. In terms of the said agreement, the residual value of the leased assets acquired from RSEB amounting to Rs.2,40,02 thousand is required to be adjusted against the corresponding amount of interest free security deposit obtained from RSEB. As Companys appeal towards certain claims against RSEB is pending before the Honourable Jaipur High Court, adjustments as mentioned above and further income arising there from, have not yet been considered in these financial statements.

6. Sundry Debtors, Advances, Deposits and Creditors are subject to confirmation.

8. The Company has entered into arrangements with certain bottling units ("tie-up units") in Assam, Orissa & Bihar for production

and marketing of its own IMFL brands. The production in the premises of tie-up units under the said arrangements, wherein each partys obligations are stipulated, is carried out under its close supervision. The marketing is entirely the responsibility of the Company. The Company is also required to ensure adequate finance to the tie-up units wherever required. Though under the agreements, the production and sale are accounted for by and in the books of the tie-up units, the Company promotes its brands through these arrangements. Accordingly, it is considered appropriate to disclose the following quantitative and value information for the year, as furnished by the tie-up units:

iii) The balance due from tie-up units, of Rs. 40,236 thousand (Previous Year Rs. 44,147 thousand) is included under advances recoverable. This is on account of the financing by the company of inventories, debtors and other current assets net of current liabilities on behalf of the units.

9. Pending renewal of exemption of the Employees State Insurance Scheme at its factory at Noorpur since the year 1997-98, no deduction or deposit in respect thereof has been made. {Please also refer to Note No. 11 (e).}

10. No supplier at the year end has intimated the company about its status as a micro, medium or small enterprise or its registration under Micro Small and Medium Enterprises Development Act, 2006.

11. Contingent Liabilities 31.03.2011 31.03.2010

Rs.000 Rs.000 a) Counter Guarantees given to Bankers against 18,400 18,775 Guarantees issued by them.

b) Letters of Credit issued by Bankers 11,491 66,625

c) Corporate Guarantees given in favour of other bodies corporate - 21,700

d) Show Cause Notice issued by Customs Department against the 21,053 21,053 Marine Division of the Company. The Company had filed suitable reply and also faced personal hearing. The adjudication order is still awaited. The Company is of considered view that demand is not sustainable.

e) ESI liability for the period April 1997 – March 2011 1,597 1,557 pending renewal of exemption.

f) Demand raised by Excise Department for payment of 1,095 1,095 duty not acknowledged by the Company being not sustainable. Matter pening with Commissioner of Excise, Government of West Bengal.

g) Demand raised by Sales Tax Department under West Bengal Sales Tax Act 1994 90,647 43,276 for the year 2004-05, 2005-06 and 2006-07, Central Sales Tax Act, 1956 for 2005-06 and under West Bengal VAT Act 2003 for the year 2005-06 & 2006-07 for payment of duty including interest and penalty not acknowledged by the company being not sustainable in the Company’s considered view. Matter pending under appeal with West Bengal Commercial Taxes Appellate and Revisional Board/Additional Commissioner of Commercial Taxes, West Bengal. 144,283 174,081

There is no possibility of any reimbursement in respect of the above.

12. Outstanding Capital Commitments (net of advance) are estimated at Rs.77,055 thousand (Previous Year Rs. Nil).

16. According to the Company and in terms of Article 76 of the Memorandum & Articles of Association of the Company, Mr Bijon Nag is permanent Director on the Board of the Company. As this Director does not seek reappointment by rotation, the provisions of Section 274(1) (g) of the Companies Act, 1956 are not applicable to him.

Notes:

1. The Companys operations are diversified into two main business segments, namely :

a) Spirit, Liquor and Spirituous beverages comprising of rectified spirit, country liquor and Indian made foreign liquor.

b) Marine division comprising of marine products processing & exports, domestic selling and marine feed trading.

2. Segments have been identified and reported taking into account, the nature of products and services, different risks and returns reporting systems.

3. Segment Revenue in each of the above domestic business segments primarily includes sales, processing charges and export incentives in the respective segments.

4. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

18. Related Party Disclosures

As per Accounting Standard-18 issued by the Institute of Chartered Accountants of India, disclosures in respect of "related parties" are as follows :- A. List of related parties:

Associates:

Nurpur Gases Private Limited

IFB Automotive Private Limited

Asansol Bottling & Packaging Co. Private Limited

CPL Industries Limited

CPL Projects Limited

Travel Systems Limited

IFB Industries Limited

Special Drinks Private Limited

Zenith Investments Limited

Key Management Personnel:

Mr. Bikram Nag (Joint Executive Chairman)

Mr. A.K. Banerjee (Managing Director)

Mr. Bijon Nag (Chairman)

Mr. Rahul Choudhary (Vice President - Finance & Company Secretary)

Note: Related parties relationships as identified by the Company and relied upon by the Auditors.

24. Previous years figures have been regrouped and rearranged wherever necessary.


Mar 31, 2010

1. Share Capital (Schedule 1)

a) Out of the Issued and Subscribed Capital, 104,000 Equity Shares of Rs.10 each were issued as fully paid Bonus Shares by capitalisation of Reserves and Surplus in earlier years.

2. Secured Loans (Schedule 3)

a) Term Loan other than short term loan is secured by (i) exclusive first charge on existing entire fixed assets and assets to be created in the project of the Company, and (ii) second charge on the current assets of the Company, (iii) Corporate Guarantee of one Associate Company.

b) Cash Credit including FCNR loans from Banks are secured by (i) hypothecation charges ranking pari passu inter se on the Companys entire current assets, (ii) second charge ranking pari passu inter se on the Companys fixed assets and (iii) Personal Guarantee of one Director.

c) Export Packing Credits from Banks are secured by (i) hypothecation of exportable stocks (ii) Personal Guarantee of one Director.

3. Deferred Tax

The break up of net deferred tax liability as at 31st March 2010 is as under: -

31.03.2010 31.03.2009

Rs.000 Rs.000

Deferred Tax Liabilities :

Timing difference on account of

difference between Book

Depreciation and Depreciation

under

Income Tax Act. 93,948 90,473

Less: Deferred Tax Assets :

Leave Encashment (Tax Effect) 1,693 1,378

Net Deferred Tax Liability 92,255 89,095



4. Fixed Assets (Schedule 4)

a) The factory buildings at Noorpur and Dankuni, West Bengal have been constructed on land leased/rented by associate concerns.

b) Companys Marine Product Processing Plant, Kolkata has been erected on land worth Rs. 7,877 thousand, obtained under lease for ninety nine years valid upto 9th August, 2093 through license from Calcutta Metropolitan Development Authority, for which formal lease deed is yet to be executed.

c) Plant & Machinery includes electrical installation and laboratory equipment.

d) Building worth Rs. 159,499 thousand (previous year Rs. 143,436 thousand) has been constructed on leasehold land.

5. The Lease Agreement entered with Rajasthan State Electricity Board (RSEB) expired on 28th February, 2004. In terms of the said agreement, the residual value of the leased assets acquired from RSEB amounting to Rs. 24,002 thousand is required to be adjusted against the corresponding amount of interest free security deposit obtained from RSEB. As Companys appeal towards certain claims against RSEB is pending before the Jaipur High Court, adjustments as mentioned above and further income arising therefrom, have not yet been considered in these accounts.

6. Sundry Debtors, Advances, Deposits and Creditors are subject to confirmation.

7. Sale of Certified Emission Reduction (CER) has been accounted for on execution of sale contract during the year which hitherto was accounted for on cash basis in earlier years. The surplus of Rs. 36,829 thousand arising due to the fact stated above has been credited in the Profit and Loss Account.

9. The Company had entered into arrangements with distillery tie-up units in Assam, Orissa & Bihar for production and marketing of its own IMFL brands. The production in the premises of tie-up units is carried out under its close supervision. The marketing is entirely the responsibility of the Company. The Company is also required to ensure adequate finance to their tie-up units. Though

10. Pending renewal of exemption of the Employees State Insurance Scheme at its factory at Noorpur since the year 1997-98, no deduction or deposit in respect thereof has been made. (Please also refer to Note No. 13(e)).

11. Compensation received towards higher transportation cost of molasses has been recognized on a consistent basis as per procedure followed by the Government towards granting rebate on excise duty payable on matching concept basis and accounting convention followed by the Company. Accordingly, the Company has recognized and adjusted Rs. 69,761 thousand (Previous Year Rs. 2,16,246 thousand) during the year based on credit adjustment availed.

12. No supplier at the year end has intimated the company about its status as a micro, medium or small enterprise or its registration under Micro Small and Medium Enterprise Development Act, 2006.

13. According to the Company and in terms of Article 76 of the Memorandum & Articles of Association of the Company, Mr Bijon Nag is permanent Director on the Board of the Company. As this Director does not seek reappointment by rotation, the provisions of Section 274(1)(g) of the Companies Act, 1956 are not applicable to him.

1. Segments have been identified and reported taking into account, the nature of products and services, different risks and returns reporting systems.

2. Segment Revenue in each of the above domestic business segments primarily includes sales, processing charges and export incentives in the respective segments.

3. Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

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