The company directors' report for 1998 notes that the soft drinks unit's operations were unsatisfactory owing to the fierce competition from Pepsi and Coca-Cola and "a lack of marketing thrust by Cadbury Schweppes to create a non-cola segment."

IFB Agro, which reported a drop in turnover and net profit for 1997-98, has said, "Operations in this area of business are under close review" and it will formulate an `appropriate strategy' to deal with the situation.

Crush, Canada Dry and Schweppes Limon were launched in eastern India by IFB Agro in 1996-97 and are bottled at its unit near Calcutta. IFB Agro's main business is production of rectified spirit and Indian made foreign liquor (IMFL).

For the year to March 31, 1998, its turnover declined to Rs 98.56 crore from Rs 101.63 crore inthe previous year. Net profit also fell to Rs 4.55 crore from Rs 7.86 crore in the previous year.

The company's statutory auditors have noted that it had advanced loans to associate companies and subsidiaries without any stipulation on repayment of principal and interest. Such loans and advances add up to Rs 3.64 crore.

IFB Agro has slashed its proposed dividend to 17 per cent (Rs 1.70 per Rs 10 share) from 25 per cent (Rs 2.50 per share) in 1996-97. The scrip was quoting at Rs 1.20 on the Calcutta Stock Exchange on September 7. IFB Agro has convened its 17th annual general meeting (AGM) on September 10, to have its accounts approved by its shareholders.

The directors' report notes that margins were eroded by the all round pressure created by a competitive environment, increase in material cost and overheads.

Auditors Maheshwari & Associates, in their report, have commented on the loans advanced by the company. "The Company has granted unsecured loans/ deposits to the companies consisting of companieslisted under section 301 and its subsidiaries. The rate of interest and other terms and conditions other than in certain cases are not prima facie prejudicial to the interest of the company..."

However, it also notes that: "As regards certain loans and advances in the nature of loans as referred to in para 2.08 above and made to others, there is no stipulation towards repayment of principal and interest wherever chargeable and remained due at year-end. As per the management explanation, recovery of the amounts due are being pursued and no provision has been deemed necessary at this stage..."

The notes to the accounts list the loans advanced by the company:

* Rs 3.41 crore advanced to subsidiaries on interest free basis and without any stipulation as to repayment;

* Rs 40.84 lakh was advanced to Haldia Port Trust for acquisition of land for the company's proposed chemical project. The land was initially offered to the Haldia Development Authority which was subsequently refused by them. The freshallotment of land is yet to be obtained;

* Rs 6.29 lakh represents advances against share application which is still to be alloted;

* Rs 16.68 lakh was advanced to private companies in which the directors are interested;

* Rs 18,000 due from an officer of the company;

The auditors have noted that there is an excise duty of Rs 30.01 lakh which has been disputed by the company. The company maintained that it had filed an appeal before the Board of Revenue and the demand was set aside. Subsequently, the excise authorities have preferred a review petition and the issue is now subjudice.

The IFB Agro management has made a Rs 87.40-lakh provision against sundry debtors considered doubtful. It pointed out that the company is conducting "persuasive drives for realisation of the amounts lying at the year-end against sundry debtors, loans and advances."