INDUSTRY STRUCTURE & DEVELOPMENTS:
Cold storages in India preserve agricultural produce for a fixed period of time
(varying from one day and extending upto several months) at low temperature. Refrigerated
storage helps in eliminating sprouting, rottage and tuber moth damage and in reducing
weight loss of the agricultural produce.
India is the largest producer of fruits and second largest producer of vegetables in
the world. Fruits & vegetables, being perishable in nature require certain techniques
of preservation for retaining the freshness intact and making them an acceptable item even
after few days of ripening. It also facilitates the farmer to realize a better price
instead of selling the product at a throw away price due to the perish ability. This
necessity as evolved a new concept of storing these items at below or just above sub-zero
temperatures known as cold storage. Introduction of Cold storage/Cold room facility will
help them in removing the risk of distress sale and simultaneously will ensure better
returns. Varied agro climatic conditions and better availability of scientific package of
practices, there is a vast scope for increasing the production.
Cold storages are essential for extending the shelf life, period of marketing, avoiding
glut, reducing transport bottlnecks during peak period of production and maintenance of
quality of produce. The development of cold storage industry has therefore an important
role to play in reducing the wastages of the perishable commodities and thus providing
remunerative prices to the growers.
Cold Storage is also essential in qualitative post-harvest management as well as food
security and food quality by efficiently handling agricultural products upstream &
downstream. Refrigerated storage helps in eliminating sprouting, rottage and tuber moth
damage and in reducing weight loss of the agricultural produce.
We believe that the need for setting up and construction of cold storage facilities is
highly required for the preservation of potatoes which is a cash crop and the same shall
be equally beneficial to both producers and consumers and shall there by strengthen the
rural economy of perishable commodities. Our project envisages perfect backward and
forward linkage of marketing activities as an essential pre-condition. Further it has
become a practice to accommodate necessary finance to hirers of the cold storage against
their stocks stored in the cold storage in order to keep the price or potato steady and
allow the support price to the growers of potato. Providing this seasonal finance is an
important factor in the growth of our business.
OPPORTUNITIES & THREATS:
The cold storage facilities are the prime infrastructural module for such perishable
commodities. Cold storage is the modern method of food preservation over a considerable
period at ambient conditions. The preservation of food due to refrigeration, which
involves the use of low temperature to eliminating or retarding the movement of spoilage
agents. The degree of low temperature required for adequate preservation varies with the
type of product stored and with the length of time the product is to be kept in storage.
The cold storage is initially specified by its application for the preservation time of
the product as short term and long term storage.
The cold storage system is poised to become a game changer for Indias food and
agricultural industry. While ensuring access to food for all, it will play a major role in
boosting Indias economy. Since infrastructure is still at a nascent state, cold storages
could help reduce the burden on farmers and industries in transacting with other
stakeholders. The apparent benefits of cold storages are so high that they could curtail
inflation and reduce dependency on price sensitivity and volatility. A strong interplay of
private players, markets and farmers is required for sustaining and developing the sector.
Investments need to be attracted through right strategies, as the sector has a long-term
effect on the health of the people and the economy of the state. Price control measures
and regulations have to be minimised and eventually stopped to tap the benefits of market
in cultivating fruits and vegetables. The inter linkages developed between them will
define the gross output of fruits and vegetables market in India and its contribution to
the global market. With the advent of technology, it is only a matter of time before the
warehousing systems are revolutionalised with increasing demands and pressure on supply
chain. It is therefore pertinent to have the right strategies in place to support the need
of building an efficient cold storage industry in india..
India has a dynamic and strong in food processing sector playing a major role in
diversifying the agricultural industry, improving opportunities and creating surplus
nourishment for agro produce. Cold storage India has the goal of keeping vegetables and
fruits fresh is to preserve quality, freshness, vitamins, and flavor. The condition of
fruits and vegetables begin to deteriorate as soon as theyre cropped. Wastage of
vegetables and fruits due to poor post-harvest management and lack of availability cold
chain facilities.
India cold chain industry has been marked and recognized as the emerging sector as its
holds a lot of untapped opportunities due to large current infrastructural demand and
supply gap. With the advent of new technologies and demand generated by the major
perishable products, India cold chain market revenue growing rapidly. However the
agriculture sector in India is expected to generate better momentum in the next few years
due to increased investments in agricultural infrastructure such as irrigation facilities,
warehousing and cold storage. The growing use of genetically modified crops will likely
improve the yield for Indian farmers. The Government of India through the Ministry of Food
Processing Industries has formulated a number of policies for extending assistance in the
form of grant, subsidy and soft loan to agro food processing industries. In order to give
impetus to promotion of all Agro Food Processing Industries several incentives and
concessions have been granted.
Our Unit located in the district of Paschim Medinipur of West Bengal, which is
traditional potato growing region and also West Bengal is one of the top three potato
growing states in India and hence we believe that the chances of shortfall in the crop may
not happen in the near future. However there are some threats of crop failure due to the
weak monsoons, lower seed sown by farmers as the price volatility of potatoes in the
earlier year, natural calamities, crop diseases and labor scarcity etc. As your Companys
main revenue is the rental income from storing potatoes and any shortfall in the crop
harvest will affect to achieve the targeted capacity.
SEGMENT REPORTING:
The Company is engaged in the business of providing cold storage facility on rental
basis and providing loans to traders and farmers and as such Accounting Standard 17
regarding Segment-wise Reporting issued by the Institute of Chartered Accountants of India
and notified under the Companies (Accounting Standards) Rules, 2006 doesnt apply to our
Company.
OUTLOOK:
The agriculture and food processing sectors in India have been developing and today
India is a net exporter of food grains. However, lack of proper and adequate food storage,
processing and cold chain logistics remains a serious challenge. The government had
earlier constituted a National Task Force on Cold Chain in 2008. The Government of India
is one of the driving forces in developing the cold chain industry and supports private
participation through various subsidy schemes and grants. Investment in cold chain in
India was also opened under the automatic route for 100% FDI participation. The existing
cold chain in India largely comprised comparatively small private companies with a
regional or local footprint.
Globally cold chains have now become an integral part of supply chain management for
the storage and transportation of temperature-sensitive goods. The focus has now shifted
from increasing production to better cold storages and transportation of food produce. The
utilisation of cold chain logistics includes both cold storages and refrigerated
transportation and is used to increase the shelf life of food produce.
RISKS AND CONCERNS:
The management cautions that the risks outlined below are not exhaustive and are for
information purposes only. Stakeholders are requested to exercise their own judgment in
assessing various risks associated with the industry and the Company.
Cold storage units provide storage facility to agricultural products on rental basis
and your Company providing storage facility of Potatoes. Hence the main revenue of the
Company depends on the potato growing, especially in the Paschim Medinipur area and
adjacent areas of Paschim Medinipur, West Bengal i.e. the prime areas of potato
harvesting. As cold storage industry related to agro products there are several risks
associated with. Failure of potato crop in West Bengal State and specifically in and
around Paschim Medinipur location, variation in potato prices in West Bengal and technical
failures of key utility infrastructure such as power, water, machinery, uncertain climatic
condition etc. And also in West Bengal the rent chargeable by the Company to the farmers
and traders is set and controlled by the State Government. A decrease in rents ordered by
the State Government or a substantial increase in operating costs not accompanied by the
matching increase in rent would adversely affect our results.
RISK MITIGATION
The Company has built excellent relationship over the years with the local farmers and
traders of potatoes. Also there is no other cold storage facility of our size and
capabilities within a radius of approximately 10kms from our storage unit. And your
Management continuously is trying to focus on long term strategies to identify such
locations where there is demand supply mismatch; for future growth and expansion and
mitigating the risk.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has proper and effective internal control systems commensurate with its
nature of business and size of operations to ensure that all controls and procedures
function satisfactorily at all times and all policies are duly complied with as required.
These are considered adequate to reasonably safeguard its assets against loss or
misappropriation through unauthorized or unintended use.
There is adequate and effective internal audit system that employs periodic checks on
on going process. During the year the Company has appointed M/s Kshitiz & Co., 51,
Nalini Sett Road, 5th Floor, Room No- 19, Kolkata- 700007 as the Internal
Auditor of the Company. The Audit Committee of the Board of Directors regularly reviews
the internal audit report and the effectiveness of internal control system in order to
ensure due and proper implementation and due compliance with applicable laws, accounting
standards and regulatory guidelines.
HUMAN RESOURCES
The Company has dedicated team of employees who have been contributing to the progress
and growth of the Company. The manpower requirement of offices of the Company is assessed
continuously and recruitment is conducted accordingly.
Your Company takes pride in the commitment, competence and dedication shown by its
employees in all areas of business. Your Company has developed a comprehensive
"in-house" induction training module to make sure that new employees understand
the basic aspect of the Company in its all operations.
CAUTIONARY STATEMENT
Statement in this Directors Report and Management Discussion and Analysis describing
the Companies objectives, projections, estimates, expectations or predictions may be
"forward looking statements" within the meaning of applicable securities, laws
and regulations. Actual results may differ materially from those either expressed or
implied.
| For and on behalf of the Directors |
Sd/- |
| Date: 30th May 2023 |
Pradip Lodha |
| Place: Paschim Medinipur |
Managing Director |
+91-9892691696
