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IFB Agro Industries Ltd.

BSE: 507438 Sector: Consumer
BSE 00:00 | 13 Sep 409.00 68.15






NSE 00:00 | 13 Sep 408.80 68.10






OPEN 335.40
VOLUME 10669
52-Week high 708.80
52-Week low 241.05
P/E 15.46
Mkt Cap.(Rs cr) 383
Buy Price 409.00
Buy Qty 6092.00
Sell Price 403.60
Sell Qty 40.00
OPEN 335.40
CLOSE 340.85
VOLUME 10669
52-Week high 708.80
52-Week low 241.05
P/E 15.46
Mkt Cap.(Rs cr) 383
Buy Price 409.00
Buy Qty 6092.00
Sell Price 403.60
Sell Qty 40.00

IFB Agro Industries Ltd. (IFBAGRO) - Director Report

Company director report

Report of the Directors' & Management Discussion and Analysis Report

To the Members

The directors have pleasure in presenting the Annual Report together with the AuditedFinancial Statements for the financial year ended 31 March 2018. The consolidatedperformance of the Company and its subsidiary has been referred wherever required.

Financial Results & Performance Review

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


(Rs in Lacs)


Particulars Year Ended Year Ended Year Ended
31.3.2018 31.3.2017 31.3.2018
Revenue from Operations (Gross) 149967 116760 150345
Less: Excise Duty 61057 32766 61057
Revenue from Operations (Net) 88910 83994 89288
Other Income 977 1176 983
Total Revenue 89887 85170 90271
Profits prior to finance charges and depreciation (EBITDA) 6785 6302 6492
Less: Finance Charges 258 154 258
Depreciation & Amortisation 2143 2033 2145
Profit Before Tax 4384 4115 4089
Less: Provision for Taxation 1227 847 1226
Profit After Tax 3157 3268 2863

The Company has adopted "Ind AS" with effect from 1 April 2017. Financialstatements for the year ended and as at 31 March 2016 have been re-stated to conform toInd AS. Note 37 to the financial statement provides further explanation on the transitionto Ind AS.

During the year under review your Company has recorded net operational revenue of Rs.88910 lacs (as against Rs. 83994 lacs in 2016-17) recording a growth of 6%.

Operational profit (EBITDA) has recorded an increase of 7.66% during 2017-18 ascompared to the previous year.

Your Company has achieved a profit before tax ofRs. 4384 lacs (as against Rs. 4115lacs in 2017-18) and net profit of Rs. 3157 lacs (as against Rs. 3268 lacs in 2016-17).

During the year under review India Ratings and Research (IND-Ra) has maintained yourCompany's Long Term issuer rating to 'INDA+'.

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

The grain based distillery along with C02 and DDGS plants operated at optimum capacityduring the year under review. EBITDA margin at the distilleries suffered due tosignificant increase in input costs. The cost increases could not be passed on fully tothe buyer's due to competition.

The company has invested in capacity expansion in C02 during the year. Thecapacity expansion will be operational during the financial year 2018-19. The Company hasalso spent on various Research and Development activities which will help to makedistillery cost effective and more efficient.

Indian Made Indian Liquor (IMIL) business continues to face competition due to excesscapacity created by the new bottling plants in West Bengal. Inspite of tough competitionthe IMIL business during the FY 2017-18 registered a revenue growth of 34%. Overalldemand has decreased due to hike in excise duty rate resulting into increase in prices.Excess capacity created in the market resulted in high retailer schemes and increasedlogistics costs. To increase its distribution and geographical reach the company isexploring more tie-up operation in other parts of the States.

Bengal State Beverages Corporation (BEVCO) a State Government undertaking wasintroduced by the State Government for the distribution of the liquor in the state of WestBengal from August 2017. Your Company now sells all its IMIL products to BEVCO for onwarddistribution to the retailers.

Marine Products:

Marine exports have registered 4% growth in revenue during the current year. The tie-upplant in Andhra Pradesh performed better during the year. Operating margins improvedduring the year due to increase in export of more value added products including organicshrimps.

Revenue from Marine aqua feed business increased by 8% during the year under review butthe operating margins remained at previous year level despite higher input costs andinvestments made in Aquashops (retail venture of feed division). Risk in the form ofunsecured credit continued.

Marine domestic food business could register a revenue growth of 3% during the yearunder review. Ready to eat Thai Meal was launched during the year for test marketing. Wecontinued to invest in this business in terms of manpower marketing and infrastructure.The business as yet is not cash positive.

Your Company incorporated a Wholly Owned Subsidiary in the name and style of IFB AgroMarine(FZE) a limited liability Company in the Sharjah Airport International Free ZoneSharjah United Arab Emirates on 20 April 2017. It was the first year of operation for thecompany. Efforts are being made to strengthen the trading operation in internationalmarket. The company achieved revenue of Rs 378 lacs and incurred a loss of Rs 294 lacsduring the year being the first year of operation. Better results are expected in thecurrent financial year.


The current financial year will be a year of challenges for both the domestic andexport business. The increase in the crude prices will impact the cost of the rawmaterials and the transportation cost which will have a negative impact on the margins.The decline in the shrimp prices in the international market is expected to impact theprofitability ofthe export business.

Entry of new players in the Aqua feed business in West Bengal may affect growth andmargin. The competitive pressures may force us to offer extended credit in the unorganizedmarket. However the addition of more aqua shops in West Bengal to provide one stopsolution to the shrimp farmers will help the company to strengthen its position in theFeed business.

Your Company will focus on margin improvement plans across the verticals through betterprocurement of its key raw materials like broken rice shrimps etc. Consolidation in theIMIL space has started and it may create an opportunity for the company.

During 2018-19 the effort will be to ensure improved margins and better returns oncapital employed.

Your Company is continuing its efforts to attain further efficiencies byprocess/technological improvements reduction of wastages and optimal use of humanresources in all the divisions.


Your Company had adopted Ind AS with effect from 1 April 2017. Your Company haspublished Ind AS Financials for the year ended 31 March 2018 along with comparable as on31 March 2017 and Opening Statement of Assets and Liabilities as on 1 April 2016.

Your Company has shared all four quarters re-stated Ind AS Profit and Loss Statementwith investors along with quarterly results for comparison.


The Goods and Services Tax (GST) is a landmark reform which will have a lasting impacton the economy and on business. Implementation of a well-designed GST model that appliesto the widest possible base at a low rate can provide stimulus to the business andcontribute to the Hon'ble Prime Minister's mission of'Make in India".

Your Company has successfully implemented and migrated to GST with effect from 1 July2017 and change across IT systems Supply Chain and operations have been made keeping inmind the sweeping changes that GST has brought.


The Board has adopted a risk management policy whereby a proper framework is set up toidentify evaluate business risks and threats. This framework seeks to createtransparency minimize adverse impact on the business objectives and enhance the Company'scompetitive advantage.


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


In order to conserve resources for the further expansion and working capitalrequirements your Directors have decided not to recommend any dividend for the financialyear under review.


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


During the year ended 31st March 2018 six meetings of the Board were held.


The extracts of the Annual Return for the financial year 2017-18 as stipulated in MGT-9 pursuant to Section 92 (3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 is given in Annexure I which forms part ofthis Report.


Mr. Bikram Nag Joint Executive Chairman retires by rotation and being eligible offershimself for re-appointment. The details about his qualification other directorships per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areprovided in the explanatory statement under Section 102 of the Companies Act 2013separately and annexed to the notice.

Mr. Bikram Nag was appointed as the Executive Director of the Company at the NineteenthAnnual General Meeting held on 31 August 2001 for a period of three years with effectfrom 27 January 2001 which was further renewed from time to time. He was appointed asJoint Executive Chairman at the Annual General Meeting of the Company held on 26 July 2013and reappointed at the AGM held on 31 July 2015. The existing term of Mr. Nag will expireon 26 January 2019.

The Board of Directors in its meeting held on May 30 2018 considered therecommendations of the Nomination and Remuneration Committee and re-appointed Mr. BikramNag (subject to the approval of members in the ensuing Annual General Meeting) as JointExecutive Chairman for a further period of 3 years with effect from 26 January 2019. He isliable to retire by rotation.

Appropriate resolutions seeking the reappointment of Director is appearing in theNotice convening the ensuing Annual General Meeting of the Company.

Mr. Indranil Goho Joint Managing Director was inducted on the board of IFB AgroIndustries Ltd on 23 September 2015. He resigned from the board of IFB Agro Industries Ltdw.e.f. 18 October 2017. The board sincerely record their appreciation of his associationwith the company and the support he has extended during his tenure.


All the Independent Directors have submitted a declaration that each of them meets thecriteria of independence as provided in section 149(6) of the Companies Act 2013.Thedeclaration was placed and noted by the Board at its meeting held on 30 May 2018.


During the year there were changes in the Key Managerial Personnel of your Company.

Mr. Indranil Goho Joint Managing Director was inducted on the Board of IFB AgroIndustries Ltd on 23 September 2015. He resigned from the Board of IFB Agro Industries Ltdw.e.f. 18 October 2017 as Joint Managing Director of the Company.

Mr. Dipak Sen Chief Financial Officer demised on 25 November 2017. He was inducted asChief Financial Officer ofthe Company on 10 December 2014. The Board expressed theirprofound grief to the sad demise of Mr. Sen and recorded their appreciation that thecompany immensely benefited from his contribution as a Chief Financial Officer oftheCompany.

During the year Board of Directors of your Company has appointed Mr. Rahul Choudhary asChief Financial Officer ofthe Company in compliance with the provisions of section 203 ofCompanies Act 2013 at its meeting held on 2 December 2017.


According to Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Schedule IV of the Companies Act 2013 a meeting of the IndependentDirectors was held to review the performance of the Non-Independent Directors and theBoard as a whole. Accordingly a meeting of Independent Directors was held on 26 March2018 wherein the performance of the Non-Independent Directors Chairman and the Board as awhole was evaluated.

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


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

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

b. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view ofthe state of affairs ofthe Company at the end ofthe financial year and of theprofitofthe Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions ofthis Act for safeguarding theassets ofthe Company and for preventing and detecting fraud and other irregularities;

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

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

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


ANomination and Remuneration Policy has been formulated pursuant to the provisions ofSection 178 and other applicable provisions of the Companies Act 2013 and rules theretoand Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 stating therein the Company's policy on Directors'/Key ManagerialPersonnel/other employee's appointment and remuneration by the Nomination and RemunerationCommittee and approved by the Board of Directors.

The saidpolicy maybe referred to at the Company's official website at .


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


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


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


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

Your Company's Policy on Related Party Transactions as adopted by your Board can beaccessed on the corporate website at


As required under Section 134(3) (m) of the Companies Act 2013 read with rules madethere under the information relating to Conservation of Energy Technology Absorption andForeign Exchange earnings & outgo is given in Annexure III which forms a part of thisReport.


During the year your Company incorporated a Wholly Owned Subsidiary in the name andstyle of IFB Agro Marine(FZE) a limited liability Company in the Sharjah AirportInternational Free Zone Sharjah United Arab Emirates on 20th April 2017. The purpose ofsetting up this entity is to establish a marketing and trading outfit to explore marketsin Middle East countries Eastern Europe CIS countries etc. for marine products.

In accordance with Section 129(3) of the Companies Act 2013 the consolidatedfinancial statements of the company has been prepared which forms part of this AnnualReport. Further the report on the performance and financial position of the subsidiary inthe prescribed form AOC-1 is annexed as Annexure VI to this report.


For the development of the human resources number of training programmes wereorganized during the year. Internal personnel as well outside faculty members undertookthese programmes. Your Company plans to organize more such training programmes for theoverall development of its people. Total number of employees in the Company stood at 405as on 31 March 2018.


In compliance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 the Company had constituted a Prevention of Sexual HarassmentCommittee. The Prevention of Sexual Harassment Policy is available on the company'swebsite. All women employees were made aware of the Policy and the manner in whichcomplaints could be lodged. During the year the Committee has not received any compliant.


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


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


In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for Directors and employees to report genuine concerns have beenestablished. The said policy may be referred to at the Company's official website at theweblink


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


The Equity shares of the Company is listed with the Bombay Stock Exchange Limited andNational Stock Exchange of India Limited and the Company has paid the Annual listing feefor the year 2018-19 to each of the said Exchanges. The Annual Custody/ issuer fee for theyear 2018-19 has been paid by the Company to NSDL and CDSL.


In terms of Section 135 and Schedule VII of Companies Act 2013 the Board of Directorsof your Company have constituted a CSR Committee. The Committee comprises of IndependentDirectors and Executive Directors. The brief outline of the corporate socialresponsibility (CSR) policy of the Company and the initiative undertaken by the Company onCSR activities during the year are set out in Annexure IV of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. The saidpolicy may be referred to at the Company's official website at the weblink ifb- admin/assets/1491801369 volicv%20on%20corvorate%20social%20resvonsibilitv.vdf.

Your Company has identified the activities and accordingly projects mainly relating toa) eradicating hunger malnutrition and sanitation

b) promoting education and livelihood enhancement and c) Promoting Healthcare wereundertaken in line with the CSR policy. The necessary budget outlay was assigned to theaforesaid projects. However due to multiyear project and certain procedural delay at theimplementation level the Company could not spend the allocated budget outlay. The Companymade an expenditure of Rs. 56.44 lacs against the stipulated amount of Rs. 73.96 lacs.


Your Company attaches considerable significance to good Corporate Governance as animportant step towards building investor confidence improving investors' protection andmaximizing long-term stakeholders value. The certificate of the Auditors M/s WalkerChandiok & Co LLP (Firm registration No: 001076N/N500013) Chartered Accountantsconfirming compliance of conditions of Corporate Governance as stipulated under Regulation25 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 forms partof this Annual Report.


The Auditors of the Company M/s. Walker Chandiok & Co LLP Chartered Accountants(Firm Registration No 001076N/N500013) have been appointed at the Annual General Meetingon 28 July 2017 to hold office till the conclusion of 37th Annual General Meeting. Interms of the first proviso to section 139 of the Companies Act 2013 the appointment ofthe Auditor's shall be placed for ratification at every Annual general Meeting. Howeverthe Companies Amendment Act 2017 has come into force on 7 May 2018 and the requirement ofratification of appointment of Auditors in every Annual General Meeting has been omitted.Hence M/s Walker Chandiok & Co LLP (ICAI Firm Registration No. 001076N/N500013)Chartered Accountants will hold office till the conclusion of 37th Annual general Meeting.TheNotes on Financial Statements referred to in the Auditors' Report are self-explanatoryand do not call for any further comments.


The provisions of Section 204 read with Section 134(3) of the Companies Act 2013mandates Secretarial Audit of the Company. The Board in its meeting held on 24 March 17appointed Mr. Jitendra Patnaik Proprietor of M/s J. Patnaik & Associates PractisingCompany Secretary (Certificate of Practice No. 3102) as the Secretarial Auditor for atermoftwo years i.e. 2016-17 & 2017-18.

The Secretarial Auditors' Report for the financial year ending 31 March 2018 is givenin Annexure V which forms part of this report. The enclosed Secretarial Auditors' Reportconfirms compliance of applicable Secretarial Standards.


Directors take this opportunity to express their thanks to various departments of theCentral and State Government Bankers Customers and Stakeholders for their continuedsupport.

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

Cautionary Statement: Statement in the Directors' Report and Management Discussion& Analysis Report describing the Company's expectations may be forward-looking withinthe meaning of applicable securities laws & regulations. Actual results may differmaterially from those expressed in the statement. Importantfactors that could influencethe Company's operation include global and domestic demand and supply conditions affectingselling prices new capacity additions availability of critical materials and theircosts changes in government policies and tax laws.

On behalf of the Board

Registered Office: Bikram Nag Arup Kumar Banerjee
Plot No. IND-5 Sector - 1 Joint Executive Chairman Vice Chairman and
East Calcutta Township (DIN: 00827155) Managing Director
Kolkata - 700 107 (DIN:00336225)
CIN: L01409WB1982PLC034590
Website :
Kolkata 30 May 2018