2.15 Provisions and Contingent Liabilities

Provisions: Provisions are recognized when there is a present obligation as result of a
past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and there is a reliable estimate of the amount of the
obligation. Provisions are measured at the best estimate of the expenditure required to
settle the present obligation at the Balance sheet date and are not discounted to its
present value unless the effect of time value of money is material. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance
cost.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible
obligation arising from past events, 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 company or a present obligation that arises from past events where it is
either not probable that an outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made. When there is a possible obligation or a present
obligation in respect of which likelihood of outflow of resources embodying economic
benefits is remote, no provision or disclosure is made.

2.16 Earnings per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period. Earnings considered in ascertaining the Company’s
earnings per share is the net profit for the period after deducting equity dividends and
any attributable tax thereto for the period. The weighted average number of equity shares

outstanding during the period and for all periods presented is adjusted for events, such
as bonus shares, other than the conversion of potential equity shares that have changed
the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the
period attributable to equity shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of all dilutive potential equity
shares.

3. Critical accounting judgments, assumptions and key sources of estimation
uncertainty

The following are the critical judgments, assumptions concerning the future, and key
sources of estimation uncertainty at the end of the reporting period that may have a
significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.

3.1. Useful lives of property, plant and equipment

As described at Note 2.3 above, the charge in respect of periodic depreciation for the year
is derived after determining an estimate of an asset’s expected useful life and the
expected residual value at the end of its life. The useful lives and residual values of
Company’s assets are determined by the management at the time the asset is acquired
and reviewed annually. The lives are based on historical experience with similar assets as
well as anticipation of future events, which may impact their life, such as changes in
technical or commercial obsolescence arising from changes or improvements in
production or from a change in market demand of the product or service output of the
asset.

3.2. Taxation

Significant assumptions and judgments are involved in determining the provision for
tax based on tax enactments, relevant judicial pronouncements and tax expert opinions,
including an estimation of the likely outcome of any open tax assessments / litigations.
Deferred income tax assets are recognized to the extent that it is probable that future
taxable income will be available, based on estimates thereof.

3.3. Provisions and contingencies

Critical judgments are involved in measurement of provisions and contingencies and
estimation of the likelihood of occurrence thereof based on factors such as expert
opinion, past experience etc.

ii) The management has sought balance confirmation from debtors and creditors. The management has
reconciled and passed necessary entries (if any) for any differences for the confirmation received.

iii) Items of revenue/expense amounting to more than 1% of total value has been disclosed separately.

iv) Previous year figures have been regrouped / rearranged / reclassified wherever considered necessary to
confirm to current year classification as per Schedule III of the Companies Act, 2013 and IND-AS
requirements.

Note xi Financial Instruments
A. Capital risk management

The capital structure of the company consists of debt, cash and cash equivalents and equity
attributable to equity shareholders of the company which comprises issued share capital and
accumulated reserves disclosed in the Statement of Changes in Equity.

The company's capital management objective is to achieve an optimal weighted average cost of
capital while continuing to safeguard the company's ability to meet its liquidity requirements
(including its commitments in respect of capital expenditure) and repay loans as they fall due.

B. Financial Risk Management
ii) Interest rate risk

The company is exposed to interest rate risk as the company borrows funds at both fixed and floating
interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed
and floating rate borrowings. The use of interest rate swaps are also entered into, especially to hedge
the floating rate borrowings or to convert the foreign currency floating interest rates to the domestic
currency floating interest rates.

b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk
of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of
investment grade and above.The Group uses other publicly available financial information and its own
trading records to rate its major customers. The Group's exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties.

Trade receivables consist of a large number of customers, concentrated in the automoile industry,
mainly the Original Equipment Manufacturers ("OEM"). Ongoing credit evaluation is performed on the
financial condition of accounts receivable and, where appropriate, security deposits are received from
customers.

At 31 March 2025, the company did not consider there to be any significant concentration of credit risk
which had not been adequately provided for. The carrying amount of the financial assets recorded in
the financial statements, grossed up for any allowances for losses, represents the maximum exposure
to credit risk.

c) Liquidity Risk

The company manages liquidity risk by maintaining adequate reserves and banking facilities, by
continuously monitoring forecast and actual cash flows and by matching the maturity profiles of
financial assets and liabilities for the company. The company has established an appropriate liquidity
risk management framework for it's short term, medium term and long term funding requirement

The Company’s exposure in USD and other foreign currency denominated transactions in connection
with import of cotton, capital goods & spares, besides exports of finished goods in foreign currency, gives
rise to exchange rate fluctuation risk. The Company has following policies to mitigate this risk: Decisions
regarding borrowing in Foreign Currency and hedging thereof, and the quantum of coverage is driven by
the necessity to keep the cost comparable. Foreign Currency loans, imports and exports transactions are
hedged by way of forward contract after taking into consideration the anticipated Foreign exchange
inflows/ outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange
market conditions.

Cash flow and fair value interest rate risk:

Interest rate risk arises from short term borrowings with variable rates which exposed the Company to
cash flow interest rate risk. The Company is exposed to the evolution of interest rates and credit
markets for its future refinancing, which may result in a lower or higher cost of financing, which is
mainly addressed through the management of the fixed/floating ratio of financial liabilities. The
Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to
reduce both the risk of refinancing and large fluctuations of its financing cost.

The Company believes that it can source funds for both short term and long term at a competitive rate
considering its strong fundamentals on its financial position.

xiii) Capital Management

For the purpose of the Company’s capital management, capital includes issued equity share capital
and all other equity reserves attributable to the equity holders of the Company. The primary objective
of the Company’s capital management is to maximize the Shareholders’ wealth. The Company
manages its capital structure and makes adjustments in the light of changes in economic conditions
and the requirements of the financial covenants. The Company monitors capital using a gearing ratio,
which is net debt divided by total capital plus debt._

The Company incurred Rs.49.57 Lakhs for the year ended March 31, 2025 (March 31, 2024-
Rs.56.12 lakhs) towards expenses relating to short-term leases. Lease rent incurred and
recoverable from employees and not falling under the scope of IND AS 116 amounted to ? 0/-
(March 31, 2023 ? 0/-). The total cash outflow for leases is Rs. 49.57 lakhs for the year ended
March 31, 2025 (March 31, 2024 ? 56.12 lakhs, including cash outflow of short-term leases and
lease rent recoverable from employees.

35. Details of Crypto Currency or Virtual Currency:

The Company has not traded or invested in Crypto Currency or Virtual Currency during the
financial year

36. Relationship with Struck off Companies

The company did not had any transactions with companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956,

37. Disclosure in relation to undisclosed income:

There were no transactions relating to previously unrecorded income that have been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of
1961).

38. Title Deeds of immovable properties

The title deeds of all the immovable properties (which are included under the head ‘Property, plant
and equipment’) are held in the name of the Company

39. Disclosures pertaining to corporate social responsibility activities :

The provisions of section 135 of the Companies Act, 2013 pertaining to Corporate Social
Responsibility are not applicable to the company.

40. Preliminary expenditure is being written/off over a period of five years

41. Wilful Defaulter

The Company has not been declared as wilful defaulter by any bank or financial institution or other
lender

42. Registration of charges with ROC:

There are one charges totaling to Rs. 1.46 lakhs created in favour of banks which are pending for
satisfaction. There are no outstanding dues to these banks and satisfaction of these charges are
pending due to technical issues and for which Company will take appropriate action to sort it out.

44. Classification of Assets and Liabilities into current/ Non-current:

All assets and liabilities are presented as Current or Non-Current as per the Company’s normal
operating cycle and other criteria set out in the Schedule III of Companies Act, 2013. Based on the
nature of products and time between the acquisition of assets for processing and their realization,
the Company has ascertained its operating cycle as 12 months for purpose of Current/Non- Current
classification of assets and liabilities

45. Cash and cash equivalents

Cash and cash equivalent for the purpose of cash flow statement includes Cash in Hand, Balances
with Banks and Fixed deposit with banks..

46. Details of Benami Property

The Company does not own any benami property in its name and neither any proceedings are
initiated or pending against the Company under the Prohibition of Benami Property Transactions
Act, 1988.

47. Proposed Dividend

The Board of Directors do not recommend any dividend in view of current year financial performance

48. Revaluation of Plant, Property and Equipment:

There was no revaluation of assets during the year 2024-25

49. Borrowings from Banks & FI

The Company has obtained secured short term/long term loan from banks on the basis of security of
inventories and book debts wherein the quarterly returns as filed with bank is in agreement with the
books

As per our report of even date attached

For Darpan & Associates For and on behalf of the Board of

Directors

Chartered Accountants Euro Leder Fashion Limited

Firm Regn No: 016156S

sd/- sd/-

sd/-

Darpan Kumar RM.Lakshmanan P.Shanmathy

Partner Managing Director Director

Membership No.235817 (DIN-00039603) (DIN-09743522)

Place:Chennai

Date: 28.05.2025 sd/- sd/-

M.Nagendra Ritu Sharma

Chief Financial Officer Company Secretary

Place: Chennai
Date: 28.05.2025