3.11 Provision

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a
past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows (when the effect of the time value of money is
material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received
and the amount of the receivable can be measured reliably.

3.12 Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company
or a present obligation that is not recognized because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a
liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a
contingent liability but discloses its existence in the financial statements.

3.13 Segment Reporting

The Company is in the business of manufacturing of leather chemicals which is the only reportable business
segment as per Ind AS 108 'Operating Segments'.

3.14 Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its equity shares.

Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the
weighted average number of common shares outstanding during the period.

Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted
average number of equity shares outstanding, for the effects of all dilutive potential equity shares. For the
purposes of calculating basic EPS, shares allotted to ESOP trust pursuant to employee share based payment
plan are not included in the shares outstanding till the employees have exercised their rights to obtain shares
after fulfilling the requisite vesting conditions. Till such time, the shares are allotted are considered as dilutive
potential equity shares for the purposes of calculating diluted EPS.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease
earning per share from continuing operations. Potential dilutive equity shares are deemed to be converted
as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity
shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average
market value of the outstanding shares). Dilutive potential equity shares are determined independently for
each period presented.

3.15 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets
and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months
for the purpose of classification of its assets and liabilities as current and non-current.

3.16 Financial Instrument

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual

provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of
the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are
recognized immediately in profit or loss.

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the time frame established by regulation or convention in the marketplace.

All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair
value, depending on the classification of the financial assets

Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at
Fair Value Through Profit & Loss (FVTPL).

However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition
or when the continuing involvement approach applies, financial guarantee contracts issued by the Company,
and commitments issued by the Company to provide a loan at below-market interest rate are measured in
accordance with the specific accounting policies set out below.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the
end of each reporting period, the foreign exchange gains and losses are determined based on the amortised
cost of the instruments and are recognized in 'Other income'.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at
FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit
or loss.

Cash and cash equivalents (for the purpose of Cash Flow Statement)

Cash and cash equivalents in Cash Flow Statement comprise cash at bank and in hand and fixed deposits
maturity within 12 month with banks, which are subject to an insignificant risk of changes in value.

which is dealt as under

i) The Company has taken Group gratuity Policy from LIC and the fund value as on 31.03.2025 was Rs.6895.69
- thousands.

ii) The provision for Leave Encashment Rs. Nil (P.Y. Nil) as on 31.03.2025.

iii) Contribution to provident fund are made in accordance with the provisions of Employee Provident Fund &
Misc. Provisions Act, 1952 and charges to revenue every year and this is in conformity as per the requirements
of Ind AS

9) Financial Instruments
i) Capital Management

The Company manages its capital to ensure that the company will be able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net cash & bank balances and total equity of the company.
The company is not subject to any externally imposed capital requirements.

and international financial markets including market risk (including currency risk, interest rate risk and other
price risk), credit risk and liquidity risk.

The Audit & Risk Committee manages the financial risk of the company through internal risk reports which
analyse exposure by magnitude of risk.

Market Risk

The company's activities majorly do not expose to the financial risks of changes in interest rates and foreign
currency exchange rates.

a) Interest rate risk management

The company is not exposed to interest rate risk because company borrow funds only at fixed interest
rates and company also does not have any borrowings except working capital loan.

b) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Company. The company takes due care while extending any credit as per the approval
matrix approved by ECRM.

c) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has
established an appropriate liquidity risk management framework for the management of the company's
short-term, medium-term and long-term funding and liquidity management requirements. The company
manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities. Note given below sets out details of additional undrawn facilities
that the company has at its disposal to further reduce liquidity risk.

The above information regarding dues to Micro and Small Enterprises have been determined to the extent such
parties have been identified on the basis of information available with the Company.

12) Previous year figures

Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year's classification.

13) Dividend

During this FY the Company declare dividend on equity shares @ 10% for the FY 2023-24 for where no provisions
was made in the books of accounts earlier year. As such total amount of dividend Rs.4908.47 (inclusive dividend
tax) has been directly debited to reserve and surplus.

As per our report of even date attached

For S . C. Dewan & Co. For and on behalf of the Board of Directors of

Chartered Accountants HARYANA LEATHER CHEMICALS LIMITED

ICAI FRN: 000934N

CA S.C.Dewan PANKAJ JAIN N.K. JAIN

Partner Managing Director-cum-Vice Chairman Chairman

ICAI MRN: 015678 DIN: 00206564 DIN: 00486730

Place : Gurugram YUGANK SUKANTO CHOUDHARY

Date: 15.05.2025 Company Secretary COO & CFO

Membership No.: 70463