K Provisions and contingent liabilities

A provision is created when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation at the reporting date. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

The Company does not recognize assets which are of contingent nature until there is virtual certainty of realizability of such assets. However, if it has become virtually certain that an inflow of economic benefits will arise, asset and related income is recognized in the financial statements of the period in which the change occurs

L Impairment of assets

The Company on an annual basis makes an assessment of any indication that may lead to impairment of assets. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount is less than the carrying amount, then the carrying amount is reduced to its recoverable amount by treating the difference as impairment loss and is charged to the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss is no longer valid, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

M Cash and bank balances

Cash and bank balances comprise cash, Current accounts and deposit with banks. The Company has a policy of classifying highly liquid investments which have a tenure of less than three months and are readily convertible into fixed amounts of cash and cash equivalents.

a. Details of security of short-term borrowings

Cash credit facilities and working capital demand loan taken from Kotak Mahindra Bank are secured by first and exclusive charge on all present and future current assets and fixed assets of the borrower, extension of equitable mortgage of the following properties - Residential property number 273 situated at Master Mota Singh Nagar, Jalandhar owned by Iqbal Singh Chatha and Manjit Singh Chatha s/o Sh. Hari Singh; Residential property number 271 situated at Master Mota Singh Nagar, Jalandhar owned by Paramjit Singh Chatha; Commercial property SCF number 305, Motor Market, Manimajra, Chandigarh owned by Gurcharan Singh Gosal; Industrial property khata number 35/124 village Chaudheri, tehsil derabassi owned by the Company, industrial property owned in Kartarpur by Mr. Paramjit Singh Chatha. The cash credit is also secured by personal guarantee of Iqbal Singh Chatha, Gurpreet Singh Chatha, Paramjit Singh Chatha, Gurcharan Singh Gosal, and Manjit Singh Chatha.

b. Terms of repayment and interest rates

Cash credit from Kotak Mahindra bank amounting to ' 363.51 lacs (previous year ' 403.38 lacs) carrying interest rate 3.25% over the Repo rate (previous year 4.25% over the Repo rate).Secured loan from Kotak Mahindra Bank amounting to ' 270 lakhs (previous year ' 270 lacs) carrying interest rate 3.25% over the Repo rate (previous year 8%) repayable in three months.

The quarterly returns/statements, in respect of the working capital limits have been filed by the Company with such banks and statements are in agreement with the books of account of the Company for the respective periods, which were not subject to audit.

Notes:

(i) There is a significant change in Current Assets of the company because of capital introduction via public issue of fresh equity shares of the company during the year resulting in funds availability with the company and are parked in bank increasing the Cash/Bank balance under Current Assets heads. It has significantly changed the Current ratio for this period.

(ii) There is a significant change in Equity of the company because of capital introduction via public issue of fresh equity shares of the company during the year. Simultaneously the debts has been reduced due to repayment of loans by the company. These significant changes have resulted in change of Debt-equity ratio for current period.

(iii) The change in ration is due to increase in profits and Equity of the company and the contributing factors for this change are as given below:(a) The supply chain disruption in RM/PM has settled down and the company was able to source raw material at better prices.(b) The copmany has been able to introduce new customers and segments at better terms.(c) The increase in revenue and has helped to get the benefit of economies of scale contributing to better profits.(d) The Equity of the company has changed because of capital introduction via public issue of fresh equity shares of the company during the year.

(iv) The increase is primarily attributable to the increase in Current Assets of the company because of capital introduction via public issue of fresh equity shares of the company during the year resulting in funds availability with the company and funds available with the company are parked in bank increasing the Cash/Bank balance under Current Assets heads. It has significantly changed the Net Capital turnover ratio for this period.

32 Leases

Operating leases

The Company is a lessee under a cancellable operating lease. Rental expense for operating lease for the years ended 31 March 2024 and 31 March 2023 was ' Nil lacs and ' 13.17 lacs respectively.

33 The Company’s main business is the manufacturing of ready to eat meat products, Vegetarian and vegan foods which as per Accounting Standard - 17 on “Segment Reporting” as prescribed under Section 133 of the Act, read with the Companies (Accounting Standards) Rules, 2021 and other accounting principles generally accepted in India is considered to be the only reportable segment. The Company is primarily operating in India which is considered as a single geographical segment.

34 The Company is primarily engaged in the business of manufacture frozen and ready to eat meat, vegetarian and vegan foods manufacturer and retails an array of ready to eat and frozen meat and vegan products under the brand “Tempter” and “The Field Grill” . The Company is the largest supplier of frozen chicken products to Domino’s, Subway, Cafe Coffee Day and several other leading quick service restaurants in India.and thus, it operates in a single primary segment.The major revenue of company is from one geographical location which is considered to be the only reportable geographical segment. The disclosures as per Accounting Standard (AS) 17 on Segment Reporting are not applicable to the company.

35 The Company does not have any contingent liability at end of the year as indentified by the management.

36 The Code of Social Security, 2020 (‘Code’) relating to employee benefits, during employment and post-employment benefits, has received the Presidential assent in September 2020. This Code has been published in the Gazette of India. However, the effective date from which the changes are applicable is yet to be notified and the rules for quantifying the financial impact are also yet to be issued. The Company will evaluate the impact of the Code and will give appropriate impact in the financial statements in the period in which the Code becomes effective and the related rules are published.

37 Additional regulatory information required by Schedule III :

a) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(b) The Company has not received any funds from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) The title deeds of all the immovable properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

(d) There are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made.

(e) The Company has not been declared a wilful defaulter by any bank or financial institution or government or any government authority.

(f) The company has not incurred any transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 for the year ended as at 31 March 2023 and 31 March 2024.

(g) The Company does not have any charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(h) The Company has no such layers as prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017. Hence, the said clause is not applicable to the Company.

(i) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(j) Money raised by way of term loans were applied for the purposes for which these were obtained.

(k) The Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as at year ended 31 March 2024.

(l) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(m) The Company does not have any advances in the nature of loans during the year.

38 Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.

39 According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company raised money by way of initial public offering and , moneys raised by way of initial public offer during the year, have been, prima facie, applied by the Company for the purposes for which they were raised. However, some portion of the amount raised, which remain unutilised at the year end, have been invested in bank deposits as on March 31, 2024.

For A Bafna & Co, For and on behalf of the Board of Directors of

Chartered Accountants Chatha Foods Limited

Firm's Registration No.:003660C (Formerly Known as Chatha Foods Private Limited)

Vivek Gupta Paramjit Singh Chatha Gurcharan Singh Gosal

Partner Managing Director Director

Membership No. 400543 (DIN No: 01154225) (DIN No: 01389179)

Priyanka Oberoi Vishal Singh Sirmauria

Place: Chandigarh Company Secretary Chief Financial Officer

Date: 28/05/2024 (Membership No: A32400)