IFB has reported a marginal decline in sales to Rs 380.81 crore (Rs 253.87 crore on an annualised basis) in the 18 months to December 31, 1997, from Rs 273.24 crore in the 12 months to June 30, 1996. It reported a loss of Rs 61.58 crore to December 31, 1997, against a profit of Rs 26.59 crore to June 30, 1996.

The auditors have said that the loss would have been higher if IFB had not changed its accounting policies. The company said that, "as a change in accounting policy, certain expenses, benefit of which is spread over a number of years has been treated as deferred revenue expenditure which hitherto was charged to revenue." But for this change in accounting policy, the loss would have been higher by Rs 5.39 crore, the company said.

According to the auditor's note, the company did not make provisions forloss incurred by a subsidiary. The accumulated loss and the aggregate shortfall in investments of a subsidiary was Rs 6.64 crore on December 31, 1997. The schedules to the report show that the cash and bank balances include Rs 3.47 lakh remitted earlier for the operation of an overseas office, which "...does not appear to be repatriable due to certain developments in the host country..." The auditors have pointed this out, noting that it has not been written off and is now before the competent authority for approval.

The balance in certain cases like sundry debtors, loans, advances, deposits, unsecured loans received, sundry creditors are subject to confirmation and reconciliation. This has been noted by the auditors.

The auditors also noted that there has been no reconciliation of certain expenses incurred in connection with various marketing schemes.

Also, the consultancy fees paid to a director is awaiting the approval the shareholders. It was proposed at a board meeting on May 20, 1997, that DPBarua, who was appointed on the IFB board on October 1, 1996, will be paid a monthly consultation fee of Rs 20,000.