1. Corporate Information:
Kamimata Cold Storage Limited was incorporated as a private limited company on 29th of April, 2011 later on converted into a public limited company w.e.f. 4th December, 2012 under the provisions of the Companies Act, 1956. The company is engaged in cold storage business. It initially set up a cold storage during FY 2011-12, having capacity of 18,000 M.T. in Medinipur district (West Bengal) for preservation of potatoes and during the FY 201314 the capacity was increased by 7,500 M.T. The company came with Initial Public Offering (IPO) of Rs 303.6 Lakhs during the FY 13-14, and was listed on SME Platform BSE Limited on 18th March 2014.
2. Basis of preparation of financial statements:
The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting following generally accepted accounting principles in India (GAAP) and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India & notified under the Companies (Accounting Standards) Rules 2006 as amended and the relevant provisions of the Companies Act, 2013. The financial statements are presented in Indian rupees.
3. Summary of significant accounting policies:
a. Use of estimates: The preparation of the financial statements in the conformity with the GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
b. Fixed Assets: Fixed assets are stated at historical cost of acquisition/construction inclusive of duties, taxes, incidental expenses and erection/commissioning expenses up to the date the asset is ready for intended use.
c. Depreciation and amortization: On fixed assets, depreciation is provided on straight line method. The depreciation has been provided as per schedule II, on the basis of useful life of assets. Useful life of Plant & Machinery (Continuous process plant), and electrical installations as per Schedule II of Companies Act, 2013, is 8 yrs and 10 yrs respectively but it has been taken 25 yrs as per the certificate from technical consultant dated 30.10.2014
d. Impairment of assets: At each Balance Sheet date, management assesses, using external and internal sources, whether there is an indication that an asset may be impaired. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the present value as determined above. Actual results could differ from those estimates.
e. Inventories: Items of inventories are measured at lower of cost or net realizable value.
f. Revenue recognition:
i. Sales: Revenue is recognized to the extent that it is probable the economic benefits will flow to the company and revenue can be reliably measured. Revenue from sale of goods is when all the significant risks & rewards of ownership of the goods have been passed to the recognized buyers, usually on delivery of the goods. The provisions of AS-9 are complied with the extent applicable to the company.
ii. Income and expenditure: Income and Expenditure are accounted for on accrual basis, wherever ascertainable.
g. Employee benefits: Short-term employees’ benefits are recognized as an expense in the Statement of Profit and Loss of the year in which the related service is rendered.
Regarding post employment benefits, the policy under LIC Group Gratuity scheme is in force. Provision for gratuity is made in the accounts on the basis of Actuarial valuation made by LIC and all the eligible employees are covered by Provident Funds and Miscellaneous Provisions Act, 1952.
h. Foreign exchange transactions: Since the company did not have any foreign exchange transactions, the provisions of AS -11 are not applicable to the company
i. Borrowing cost: Borrowing cost that are directly attributable to the acquisition/ construction of the qualifying asset are capitalized until the time all the substantial activities necessary to prepare such assets for the intended use are complete. All other borrowing costs are recognized as expenditure during the period in which they are incurred
j. Government grants: Government Grants related to fixed assets are adjusted with the value of fixed assets/credited to capital reserve.
Govt. Grants related to revenue items are adjusted with the related expenditure/taken as income.
k. Contingencies: Contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise, or is a present obligation that arises from past events but is not recognized because either it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or a reliable estimate of the amount of the obligation cannot be made.
l. Taxation: Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and MAT credit entitlement if any, is adjusted against current tax. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
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