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A Oneindia Venture

Nifty 25,966.40 +0.58%

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Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Liberty Shoes Ltd.

Mar 31, 2025

l) Provisions and Contingent Liabilities and
Contingent Assets

The Company recognizes a provision where there
is a present obligation as a result of past event
that probably requires an outflow of resources and
a reliable estimate can be made of the amount of
the obligation and accordingly all known liabilities
wherever material are provided for. These
estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates.

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 however the existence of which will
be confirmed only by the occurrence or nonÂ¬
occurrence of one or more uncertain future events
not wholly within the control of the Company.

A contingent asset is disclosed, where an inflow
of economic benefits is probable. Contingent
assets are not recognised in financial statements
since this may result in the recognition of income
that will never be realised. However, when the
realisation of income is virtually certain, then the
related asset is not a contingent asset and is
recognised.

m) Employee Benefits

(i) Employee benefits like salaries, wages etc.
payable wholly within twelve months of

rendering the service are classified as shortÂ¬
term employee benefits. A liability is
recognised for the amount expected to be
paid when there is a present legal or
constructive obligation to pay this amount
as a result of past service provided by the
employee and the obligation can be
estimated reliably.

(ii) Contribution towards provident fund and
employee state insurance is made to the
regulatory authorities, where the Company
has no further obligations. Such benefits are
classified as defined contribution plans as
the Company does not carry any further
obligations, apart from the contributions made
on a monthly basis. Such contributions are
charged to the statement of profit and
loss for the period of service rendered by the
employees.

(iii) Short-term employee benefits are recognized
as an expense in the Statement of Profit &
Loss of the year in which the related service
is rendered.

(iv) Gratuity liability is defined benefit obligation
and is provided for on the basis of an actuarial
valuation on projected method made at the
end of the financial year. The Company has
created a trust under the Group Gratuity
Scheme with the Life Insurance Corporation
of India (LIC) and amount paid/payable in
respect of the present value of liability for
past services is charged to the Statement
of Profit & Loss every year. The difference, if
any, between the actuarial valuation of the
gratuity of employees at the year end and the
balance of funds with LIC is provided for as
liability in the books.

n) Borrowing Costs

Borrowing costs that are attributable to the
acquisition or construction of qualifying assets
are capitalized as part of the cost of such assets.
All other borrowing costs are charged to revenue
in the period in which they are incurred.

o) Foreign Exchange Transactions

(i) Assets and liabilities relating to foreign
currency transactions remaining unsettled
at the year-end are converted into Indian
rupees at closing rates and any gain or loss
arisen is adjusted in Statement of Profit
and Loss.

(ii) Gains/losses arising out of fluctuations in
foreign exchange rates between the
transaction date and settlement date are
recognized in the Statement of Profit and Loss
under the head "Exchange Rate Fluctuation".

(iii) The difference between the forward rate and
the exchange rate on date of inception of a
forward contract in respect of forward
contracts with underlying assets or liabilities
is recognized as income or expense and is
amortized over the life of the contract.

(iv) Forward exchange contracts entered to hedge
the foreign currency risk are marked to market
as at the year end and the resultant exchange
gain or loss is recognised in the Statement
of Profit & Loss.

(v) Non-monetary foreign currency items are
carried at cost and accordingly the investment
in foreign subsidiary is expressed in Indian
Currency at the exchange rate prevailing at
the date of the transaction.

p) Assessment of risks

The Company follows the process of assessing
the financial risks relating to its business activities.
Its principal financial liabilities comprising
borrowings, trade and other payables etc. are part
of its working capital for the purpose of its business
operations and for the purpose of funding its
principal financial assets including cash and cash
equivalents, trade receivables and security
deposits directly derived from its operations. The
Company is exposed to credit risk, liquidity risk
and market risk summarised as under:

Credit Risk:

Credit risk may arise on not meeting of its financial
obligations by other party, primarily relating to trade

receivables and may lead to financial loss to the
Company. Companyduring the course of its
business operations to reduce the risk with trade
receivables, follows the mechanism of setting
credit limits to respective parties and reviews
their outstanding on time to time basis to access
the likely impairment.

Liquidity Risk:

Liquidity risk may result in not meeting Company''s
financial obligations and to mitigate the same and
meet its financial obligations in timely manner the
Company reviews its Trade Payables and other long
term and short-term financial liabilities on time to
time basis and manages the resources availability
of cash and cash equivalents and credit lines and
borrowing facilities from banks.

Market Risk

Market risk may be the risk of fair value of
Company''s assets and liabilities on account of
change in foreign exchange rates and applicable
rate of interest on borrowings having variable
interest terms. Exposure of the Company to
foreign exchange risk majorly relates to its
operating activities to the extent denominated
in foreign currency and the Company goes for
forward exchange contracts to mitigate the risk.
Similarly to get de-risked to maximum extent from
changes in variable rate of interest, depending upon
its funds utilization plan on time to time basis the
Company further gets the part of related facilities
converted into fixed rate for specific period.

Price Risk:

Key raw materials used in the manufacturing of
footwear are EVA, PU material etc. are subject to
price volatility depending upon the fluctuation in
the price of crude oil and it''s derivatives. To mitigate
the pricerisk the Company takes several measures
including continuous monitoring the price trend of
key materials, value engineering of goods and
passing of the cost on the product wherever
required in timely manner.

q) Fair Value Measurement

The fair value of the assets and liabilities are

assessed at balance sheet date considering normal
circumstances as per the following:

a) Cash and cash equivalents, bank balances
other than cash and cash equivalents, trade
receivables, trade payables, borrowings and
other financial assets and liabilities at their
carrying amount due to their short-term
nature.

b) Financial assets and liabilities with fixed and
variable interest rates are evaluated by the
Company based on parameters such as
interest rates and individual credit worthiness
of the counterparty.

c) Assessment by the Management about the
carrying value of financial assets including
leasehold rights and obligations due to be
amortised.

d) Forward exchange contracts using exchange
rates at the balance sheet date.

r) Provision for Taxation

Provision for taxation is made taking into
consideration the provisions of Income Tax Act,
1961. Adjustment, if any, arising out of the
assessment is made in the year the assessment
is completed. Current tax assets and liabilities
are offset when there is a legally enforceable
right to set-off the recognised amounts and there
is an intention to settle the asset and the liability
on a net basis

Income tax expense represents the sum of current
and deferred tax. Tax expense is recognised in the
statement of profit and loss except to the extent
that it relates to items recognised directly in equity
or other comprehensive income, in such case the
tax expense is also recognised directly in equity or
in other comprehensive income.

Any subsequent change in income tax on
items initially recognised in equity or other
comprehensive income is also recognised in
equity or other comprehensive income, such
change could be for change in tax rate.

s) Provision for Deferred Taxation

Deferred tax is recognised on temporary timing
differences between the carrying amount of assets
and liabilities in the balance sheet and the
corresponding tax bases used in the computation
of taxable profit and are accounted for using the
balance sheet approach.

Deferred tax liabilities are recognised for all taxable
temporary timing differences and deferred tax
assets are recognised for all deductible temporary
timing differences, carry forward tax losses and
allowances to the extent it is probable that future
taxable profits will be available against which those
deductible temporary differences, carry forward tax
losses and allowances can be utilised.

Deferred tax asset and liabilities are measured
at the tax rates that are expected to apply in
the year when the asset is realised or liability is
settled, based on tax rates and tax laws that have
been enacted or substantially enacted at the
reporting date.

The carrying amount of deferred tax asset, if any,
is reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profits will be available against
which the temporary differences can be utilised.

Deferred tax assets and liabilities are offset when
there is legally enforceable right to set-off current
tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority
and no deferred tax asset is recognized as on the
date of reporting.

35. Based on the recommendation of the Nomination and
Remuneration Committee, the Board of Directors
proposed a special incentive of '' 300 lakhs for three
Executive Directors in recognition of their performance
for the financial year ended 31st March 2025. The
proposal was approved by the shareholders through
a postal ballot process concluded on 22nd May 2025.
However, in its meeting held on 28th May 2025, the
Board, after reviewing the financial results for the
said financial year, decided to withhold the
disbursement of the approved incentive, which was
also waived by the concerned Directors. Consequently,
the said incentive has not been recognised as an
expense, nor has any provision been made in the
Statement of Profit and Loss for the year ended
31st March 2025.

36. In the opinion of the Board and to the best of its
knowledge, the value of realization of current assets,
loans and advances in the ordinary course of business
would not be less than the amount at which they
have been stated in the Balance Sheet. However,
confirmation/reconciliation of some customers balance
is pending as on the date of signing of the financial
statement.

37. During the course of its business the Company usually
extends credit terms for more than six months to some
of its customers more particularly to overseas and
institutional customers and during the year ended 31st
March, 2025 the outstanding for more than six months
from customers has increased to '' 2323.85 Lakhs
as against '' 1,884.61 Lakhs as on 31st March, 2024.

38. Against the arbitrary deductions and claims made by the
appropriate authority on account of shortages, delayed
deliveries, etc., an amount of '' 436.57 Lakhs was
withheld while releasing payments '' 2,246.32 during the
financial year 2022-23. These deductions pertained to a
government tender supply executed by the Company
during the financial year 2019-20, with a total invoice
value of '' 2,682.88 Lakhs.

Against the said arbitrary deductions, the Company had
filed a petition before the Hon''ble High Court of Andhra
Pradesh seeking the appointment of an Arbitrator, which
was duly allowed. Pursuant to the arbitration proceedings,
an award has been passed in favour of the Company by
the Learned Arbitrator vide order dated 26th December

2024, granting a claim amount of '' 1,173.74 Lakhs,
including interest. The award also entitles the Company to
further interest @ 8% p.a. from the date of the award
until actual realization.

However, the awarded amount has not been recognized
in the financial statements for the year ended 31st March

2025, and will be accounted for on realization basis, net
of the share attributable to related vendors. As on the
date of signing of the balance sheet, the Company is in
the process of filing an execution petition before the
Hon''ble District Judge, Vijayawada, for enforcement of
the award.

As disclosed in earlier periods, the above said deductions
amounting to '' 436.56 Lakhs had been written off in the
financial year 2022-23 i.e the year of receipt, after
adjusting '' 268.82 Lakhs against outstanding dues
payable to the related vendors. Accordingly, there is no
impact on the profit and loss statement for the financial
year 2024-25 on this account.

40. Provision for doubtful debts:

During the year out of overdue outstanding towards
customers and advances to vendors, the Company
has considered debts/advances aggregating to
'' 782.79 Lakh (Previous year '' 437.12 Lakh) as
doubtful debts/advances/securities and also has
withdrawn '' 40.24 Lakh (Previous year '' Nil Lakh

out of the provisions made in the earlier years for
the same and has written off as bad debts '' 37.54 Lakh
(Previous year '' Nil Lakh). Further the difference of
the provision made and amount withdrawn during
the year, detailed as under, has been charged to
Statement of Profit & Loss for the year and the balance
has been carried in the balance sheet.

43. The Company has taken various retail stores and
warehouses under operating lease arrangements.
The lease agreements generally have an escalation
clause and there are no subleases. These leases are
generally not non-cancellable and are renewable by
mutual consent on mutually agreed terms. There are
no restrictions imposed by lease agreements.

The leasehold rights are depreciated/amortized using
the straight line method from the commencement
date over the shorter of lease term or useful life of
right to use.

44. The Company implemented the Ind-AS-116 with
effect from 1 stApril, 2019 and accordingly is
considering all the persisting leasehold rights having
maturity for more than 12 months including entered
during the year 2024-25 at its present value as

Intangible Rights in Schedule of Fixed Assets and is
amortizing the leasehold rights on year on year basis.
During the year 2024-25 the Company has
capitalized/(adjusted)the present value of leasehold
rights entered during the year (net of terminated)
for '' 2,420.68 Lakhs (Previous year '' 2,446.58 Lakhs)
and has amortized the leasehold rights (net of
terminated) for '' 1936.62 Lakhs (Previous year
'' 2,076.26 Lakhs).

Further while amortizing the leasehold rights for
the year, decrease in leasehold obligations agreed
with the some of the landlords has not been
factored being temporary in nature and the said
decrease in leasehold obligations aggregating to
'' 91.50Lakhs (Previous year '' 186.39 Lakhs) has been
passed on through Profit & Loss account for the year.

54. Contemplating the long-term benefits for unlocking
the shareholders'' value through acquisition of the
tangible and intangible assets including business
rights of two partnership firms, in which few Directors
of the Company are interested as partners, namely
Liberty Enterprises (LE) & Liberty Group Marketing
Division (LGMD), the Company had entered into a
Memorandum of Understanding (MOU) on March 31,
2015, with these two Partnership Firms for acquisition
of their respective business of footwear. Since then,
due to certain technical reasons, this MOU and the
subsequent MOU for the related matter have not
been materialized to the envisaged extent. The
Company, keeping in view the protection of its
shareholders interest and alsoto ensure long term
continuance of the arrangements with these
partnership firms till materialization of the acquisition
of their respective business of footwear has extended
the validity of earlier executed agreements and is
assessing the business rights of the two firms with its
availability till March 2028.

During the year in terms of above referred
arrangements, the Company has paid/provided for
franchise fee of '' 115 Lakh (Previous year '' 115 Lakh)
to LE and '' 750.00Lakh (Previous year '' 756.03 Lakh)
to LGMD and in terms of the renewed agreement
dated April 3, 2013 of the Company with Liberty
Footwear Co. (LFC), another Partnership Firm of the
group and owner of trademarks "LIBERTY", for granting
exclusive rights of usage of the trademark "LIBERTY"
for a period of fifteen years from April 1,2013 onwards,
the Company has paid/provided for trademark license
fee of '' 1,649.93 Lakh (Previous year '' 1,377.43 Lakh)
to LFC.

As disclosed in the previous financial year i.e. 2022-23,
certain partners of Liberty Enterprises (LE), Liberty
Group Marketing Division (LGMD) and Liberty Footwear
Company (LFC) had issued notices to the Company
seeking termination of the ongoing franchise/
trademark license arrangements with effect from
April 1, 2023. The Company has franchise/trademark
license arrangements with LE, LGMD and LFC since
2003 duly renewed from time to time with latest
arrangements dated 29th March, 2018 in case of
LE and LGMD and 3rd April 2013 in case of LFC and

all the said arrangements are valid till 31st March, 2028
subject to renewal on mutually agreed terms on or
before expiry of the existing tenure. The Company, in
response to termination notice of partners of LE, LGMD
and LFC, duly reiterated its contractual rights to
continue the use of tangible and intangible assets of
the said partnership firms until March 31, 2028, as per
the respective agreements in force.

Invoking the arbitration clauses embedded in the
agreements with LGMD and LFC, the Company
initiated legal proceedings and filed petitions under
Section 9 of the Arbitration and Conciliation Act, 1996
before the appropriate court at Karnal. Considering
the Company''s submissions, the Hon''ble Court, vide
its orders dated March 16, 2023 and July 20, 2023
respectively, directed all parties to maintain status
quo until further orders.

Subsequently, the Company also filed applications
under Section 11 of the Arbitration and Conciliation
Act, 1996 before the Hon''ble Punjab and Haryana High
Court seeking appointment of arbitrators, which were
duly allowed. As on the date of signing of these
financial statements:

- The Learned Arbitrator, in the matter of LGMD and
the Company, has passed an award confirming
continuation of the existing arrangement with
LGMD until its validity period.

- The arbitral proceedings in the matter of LFC and
the Company are currently ongoing and is pending
for adjudication before the Learned Arbitrator.

The Company continues to operate under the
framework of the original agreements, and the above
developments have been considered in the preparation
of these financial statements.

Further to ensure the usage of the right available under
these agreements continued beyond 31st March,
2028, the Board of Directors of the Company while
approving the financial statement for the previous year
had also considered for seeking extension of its
existing arrangements of Franchise/ Royalty beyond
31st March 2028 subject to mutual understanding
and the related legal compliance. Though based upon
the understanding had with some of the partners of

respective firms as well as overall assessment of the
above-referred ongoing arbitration proceeding, the
Company is quite hopeful about continuation of the
existing arrangements even beyond 31st March, 2028
and/or acquisition of the related intangible assets of
the respective firms over a period of time, however to
avoid any probable risk in case of non-materialization
of the above understanding well within the reasonable
period, the Board of Directors of the Company are also
contemplating an alternative strategy to ensure the
consistency of its business.

55. During the year, Sh. Adesh Kumar Gupta, the erstwhile
CEO & Executive Director (the Petitioner) along with
few other shareholders (the Petitioners), had filed
a Petition No. CA No. 179/2023 and CP No.
89/Chd/Hry/202 before the Hon''ble National Company
Law Tribunal (NCLT) at Chandigarh u/s 241 & 242 of the
Companies Act, 2013 against his removal initiated in
accordance to the provisions of Section 169 of the
Companies Act 2013 also alleging certain acts of
oppression and mismanagement on the part of the
Company and its management.

The Company contested the same by rebutting all
his allegations duly leveling counter allegations
against him.

The above referred petitions filed by the erstwhile
CEO & Executive Director were dismissed by the
Hon''ble Bench vide its order dated 20/11/2023 on the
technical ground of maintainability being not having
adequate shareholding for filing the petition and the
Petitioners have preferred their appeal before the
Hon''ble National Company Law Appellate Tribunal
(NCLAT) against the order passed by the NCLT,
Chandigarh and have also been dismissed by the
Hon''ble NCLAT. As per the information available with
the Company, the Petitioners have preferred an
appeal before Hon''ble Supreme Court of India.
However, the same is yet to be listed as on the date
of signing of this balance sheet.

56. During the year 2023-24 owing to some reservations
emerged subsequently with the supplies viz.-a.-viz.
billed by few of the Company''s vendors, payments
against their supplies were put on hold for the want
of few more details/supporting required for releasing

the payments. In the meanwhile, due to earlier
availability of multi authorisation with the authorised
signatories the part payment against the these
supplies was released to the vendors by one of the
signatory ignoring the board mandate of the joint
signatures for release of payment through bank. The
cheques issued were not as per the authorisation
matrix approved by the board and also not as per
the bank mandate due to which it got dishonoured
by the bank.

Against such dishonoring the concerned vendors have
filed criminal complaints under Section 138 of the
Negotiable Instrument Act, 1881 against three of the
Executive Directors and the Company as well before
the Judicial Magistrate at Panipat (Haryana). The
related matter with the vendors is yet to be concluded
and meanwhile to protect the interest of the respective
Directors, the Company has preferred a revision before
the Hon''ble High Court infew of the related matters
which is pending before the Hon''ble High Court for
adjudication. The Company is further pursuing for
similar course in rest of matters as well.

Also in the previous year, the erstwhile CEO and
Executive Director Sh. Adesh Kumar Gupta has
incurred unapproved expenses for '' 15.39 Lakhs. The
Company has considered this amount as recoverable
from him. Accordingly the advance recoverable in cash
or kind or for the value to be received and considered
good aggregating to '' 733.14 Lakhs vide Note no. 11 of
financial statements includes the same. Sh. Adesh
Kumar Gupta, in his defamation suit filed before the
Hon''ble Delhi High Court against Sh. Sunil Bansal,
erstwhile Executive Director and Sh. Adish Gupta,
Executive Director, has referred these expenses to
support some contention of the said suit. The same
were vehemently objected by the Company and the
related matter is pending before the Hon''ble Delhi
High Court for adjudication.

57. Out of the total vehicles registered in the name of
the Company few vehicles having current book value
of '' 147.38 Lakhs which are earlier given to the
former employees of the Company are not in the
possession of the Company and the legal proceedings

are being initiated for the recovery of the possession
of its vehicles.

58. During the year 2023-24, there had been a fire incident
in one of the block of Company''s Central Warehouse
(CWH) situated in rented premises in Panipat (Haryana)
on February 07, 2024 due to electric short-circuit which
had resulted in complete damage of stocks of finished
goods and packing materials stored there for the value
aggregating to '' 1763.92 Lakhs. In addition there had
been a complete loss of rented building of particular
block including additions made by the Company on the
superstructure and plant & machinery (including petty
& office equipment) having tentative value of '' 150.79
Lakhs including third party claim for loss of property
estimating to '' 65 Lakhs (net of salvage). Against the
reported loss, claim filed and the management''s
estimated recoverable amount of insurance claim
for '' 1,425 Lakhs, during the year the Company has
received the gross claim for '' 1,353.35 Lakhs wit

no consideration of loss of Input Tax Credit (ITC) against
the goods lost and liability discharged by the Company
aggregating to '' 145.04 Lakhs. Accordingly the
differential of claim estimated and realized amounting

to '' 71.45 Lakhs, amount of GST liability discharged
for '' 145.04 Lakhs and the amount spent on
reconstruction of the particular block of the rented
building over and above the estimated amount of
'' 65 Lakhs i.e. '' 29.03 Lakhs has been charged to Profit
& Loss account for the year under Exceptional Items.

59. During the year the Company, in its exercise to
physically verify and rationalize its gross block, has
further leveled out its fully depreciated Gross Block
of Tangible Assets (Not under Lease) aggregating
to '' 1,278.44 Lakhs (Previous year '' 4,606.95 Lakhs),
detailed hereunder, and the Sale/Adj. during the
year aggregating to '' 1,278.44 Lakhs (Previous year
'' 4,958.65 Lakhs) in Note No. 2-Fixed Assets includes
the same:

61. The assessment of the Company in respect of Income
Tax is completed up to the Assessment Year 2023-24
under faceless scrutiny assessment in accordance
to the provisions of section 143(3) of the Income Tax
Act, 1961 vide order dated 18.03.2025.

62. a) Assessment Year 2020-21

i. Scrutiny Assessment

The Company''s assessment for the Assessment
Year 2020-21 was completed under scrutiny by
the National Faceless Assessment Unit (NFAC)
vide order dated 27.03.2023. The assessed
income was determined at ^4,038.41 lakhs as

against the returned income of ^2,014.05 Lakhs.
The variation primarily arose due to arbitrary
disallowances and additions, particularly by
treating recurring revenue expenditure in the
nature of trademark license fees paid/payable
annually as per long-standing agreements
effective since 2003 and on prevailing terms since
2013 as expenditure of enduring nature. These
disallowances were made by misinterpreting
the agreements, overlooking applicable legal
provisions, ignoring detailed submissions made
during the course of assessment proceedings
(including virtual hearings), and disregarding the
Company''s past 16 years of assessment history.

The Company has preferred an appeal before the
appropriate appellate authority and, based on legal
opinion and existing precedents in Company''s
matter for assessment year 2023-24, is confident
of a favourable outcome.

ii. Grievance petition before Jurisdictional
Local Committee on High-Pitched Scrutiny
Assessment & Related WRIT Proceedings

In addition to the above, considering the high-
pitched and unreasonable nature of the
assessment framed for AY 2020-21, the Company
had filed a grievance petition before the
Jurisdictional Local Committee constituted by
the CBDT, intended as an administrative additional
remedy for such cases under both faceless and
traditional regimes. However, the grievance was
disposed of in a cursory and mechanical manner,
without granting an opportunity of hearing or
considering the substance of the petition.

Aggrieved by this, the Company filed Civil Writ
Petition (CWP No. 6536 of 2024) before the

Hon''ble High Court of Punjab & Haryana. The
petition was dismissed, with liberty granted to
raise all its grounds/argumentswith regard to
challenge the assessment order before the
appellate authority. A subsequent Review Petition
(RA-CW-136-2024) was also dismissed. The
Company then filed a Special Leave Petition (SLP)
before the Hon''ble Supreme Court of India (Diary
No. 26631/2024), which was also disposed of
without interference, while directing the CIT
(Appeals) [NFAC-Appeals] to dispose it of as
expeditiously as possible. A Review Petition
against this order has been filed by the Company
before the Hon''ble Supreme Court on 29.03.2025
(Diary No. 16721/2025).

iii. Revision Proceedings u/s 263 of the Income
Tax Act, 1961

The Income Tax Department has initiated revision
proceedings under Section 263 of the Income Tax
Act, 1961, against the scrutiny assessment order
dated 27.03.2023, vide order dated 28.03.2025.
The Company has challenged this revision order
by filing an appeal before the Hon''ble Income Tax
Appellate Tribunal (ITAT), New Delhi on
02.04.2025, which is presently pending for
adjudication.

b) Assessment Year 2016-17 (Reassessment
u/s 148A)

Further, proceedings were initiated by the Assessing
Officer under Section 148A(d) of the Income Tax
Act, 1961, vide order dated 05.04.2023, alleging
escaped income amounting to '' 1,557.99 lakhs for
Assessment Year 2016-17. The alleged issues pertain
to salary payments of '' 64.07 lakhs, foreign
remittances of '' 1,454.43 lakhs, and export shipping
bills amounting to '' 39.48 lakhs, based on data
uploaded on the Income Tax Department''s Insight
portal. These proceedings have been stayed by the
Hon''ble High Court of Punjab & Haryana in CWP
No. 13252 of 2023 filed by the Company. The next
date of hearing is scheduled for 20.08.2025.

63. For the current year, a Deferred Tax Liability has been
recognized based on cumulative timing differences
amounting to '' 51.25 lakhs (Previous year: '' Nil),
primarily arising due to differences in depreciation
as per the Income Tax Act, 1961 and the Companies
Act, 2013. The recognition of deferred tax is in
accordance with the applicable accounting standards

71. As per Company''s assessment about recoverability
and carrying values of its assets comprising of
receivables, inventories, plant and equipment,
intangible assets, it expects to recover the carrying
amount of these assets.

72. The current year and previous year figures have been
rounded off to the nearest lakh of rupee upto two
decimal places unless stated otherwise.

73. The Company does not hold any benami property and
no proceedings have been initiated or pending against
the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 and the
rules made thereunder.

74. The Company has duly filed Quarterly returns or
statements, Unaudited and Audited as the case may
be, of its current assets with the banks and are in
agreement with its books of accounts.

75. The Company is not declared as willful defaulter by
any bank in accordance with the guidelines on wilful
defaulters issued by the RBI.

76. The Company has not entered into any transactions
with companies struck off under section 248 of the
Companies Act, 2013. This is determined to the
extent of such parties have been identified on the
basis of information available with the Company.

77. The Company has duly registered all the charges or
satisfaction thereof with Registrar of Companies (ROC)
within the statutory period.

78. The number of layers prescribed under clause (87)
section 2 of the Companies Act, 2013 read with
Companies (Restriction on number of Layers) Rules,
2017 is not applicable to the Company

79. During the year, no scheme of arrangements has been
approved by the competent authority in terms of
sections 230 to 237 of the Companies Act, 2013.

80. The Company has not advanced or loaned or invested
funds to any other persons (intermediaries) with the
understanding that the intermediary shall directly or
indirectly lend or invest in other persons or provide
any guarantee in any manner whatsoever on behalf

of the Company (ultimate beneficiary). The Company
has also not received any fund from any persons with
the understanding that the Company shall directly
lend or invest or provide any guarantee to any other
persons on behalf of the funding party.

81. The Company does not have any transactions which
are not recorded in the books of accounts that has
been surrendered or disclosed as income during the
year in the tax assessments under the Income Tax
Act, 1961.

82. During the year, the Company has not traded or invested
in crypto currency or virtual currency.

83. The Company has not revalued its property, plant and
equipment or intangible assets or both during the
current or previous year.

84. Fair Value Measurements

Fair value of financial assets and liabilities is normally
determined by references to the transaction price or
market price and in case of non-reliably determinable,
the Company determines the same using valuation
techniques that are appropriate in the circumstances
and for which sufficient data are available, maximising
the use of relevant observable inputs and minimisin

the use of unobservable inputs as per the following:

a. Foreign exchange forward contracts are valued
using market observable inputs such as foreign
exchange spot rates and forward rates at the
end of the reporting period.

b. Unquoted equity instruments where most recent
information to measure fair value is not
determinable, cost has been considered as best
estimate of fair value.

c. The carrying amount of other financial assets and
financial liabilities measured at amortised cost
in the financial statements are a reasonable
approximation of their fair values since the
Company does not anticipate any significant
difference that the carrying amounts would be
significantly different from the values that would
eventually be received or settled.

Fair Value Hierarchy

To provide an indication about the reliability of the
inputs used in determining fair value, the Company has
classified its financial instruments into the three levels
prescribed as per Ind-AS 113 "Fair Value Measurement":

Mar 31, 2024

12 (b) Terms/Rights attached to Equity Shares: The Company has one class of equity shares having a par value of ? 10/-each. Each shareholder is eligible for one vote per share held in the Company. The dividend proposed by the Board of Directors of the Company, if any, is subject to approval of the members in the ensuing general meeting, except in the case of interim dividend, if declared. In the event of liquidation of the Compnay, equity shareholders shall be entitled to receive the remaining assets, after the distribution to preferred shareholders, if any, in proportionate of their shareholding.

*The general reserve is used from time to time to transfer profit from retained earnings for apportion purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit and loss. Further, under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. Hence, no amount has been transferred to general reserve while declaring and paying the interim dividend during the year."

**The portion of profits not distributed among the shareholders are termed as retained earnings. The Company may utilize the retained earnings for making investments for future growth and expansion plans, for the purpose of generating higher returns for the shareholders or for any other specific purpose, as approved by the Board of Directors of the Company.

35. In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

36. During the course of its business the Company usually extends credit terms for more than six months to some of its customers more particularly to overseas and institutional customers and during the year ended 31 st March, 2024 the outstanding for more than six months from customers has increased to X 1,884.61 Lakhs as against X 1,005.28 Lakhs as on 31st March, 2023.

37. Against the arbitrary deductions/claims done by the appropriate authority, on account of shortages, late deliveries etc., while releasing the payments in the financial year 2022-23 aggregating to X 2,246.32 Lakhs as full & final payment against one of the government tender supplies made by the Company in the financial

year 2019-20 for X 2,682.88 Lakhs Company''s petition before the Hon''ble High Court of Andhra Pradesh for appointment of an Arbitrator has been allowed by the Hon''ble High Court and the Company has also filed its claim statement against the said arbitrary deduction for X 436.56 Lakhs and interest accrued thereon for the period of delay before the Learned Arbitrator by explaining all the arbitrary deductions made and the matter is presently sub-judice before the Learned Arbitrator.

As informed earlier also, the arbitrary deduction for X 436.56 Lakh had been written off after adjusting the outstanding amount of X 268.82 Lakh towards related vendors in the year of receipt of payment i.e. in the financial year 2022-23 and there is no impact of the same on the profit and loss statement for the year under consideration.

39. Provision for doubtful debts:

During the year out of overdue outstanding towards customers and advances to vendors, the Company has considered debts/advancesfor?437.12 Lakh (Previous year ? 366.85 Lakh) as doubtful debts/advances/ securities and also has withdrawn ? Nil Lakh (Previous year ? 22.96 Lakh) out of the provisions made in the

earlier years for the same and has written off as bad debts ? Nil Lakh (Previous year ? 33.92 Lakh). Further the difference of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit & Loss for the year and the balance has been carried in the balance sheet.

40. In accordance to its policy as regards to evaluation of its trade receivables, considering the nonrecoverability of some of the debts/advances, the

Company has written off the debts/advances amount to ^5.83 Lakh (Previous year ^ 51.64 Lakh).

42. The Company has taken various retail stores and warehouses under operating lease arrangements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

The leasehold rights are depreciated/amortized using the straight line method from the commencement date over the shorter of lease term or useful life of right to use.

43. The Company implemented the lnd-AS-116 with effect from 1 stApril, 2019 and accordingly is considering all the persisting leasehold rights having maturity for more than 12 months including entered during the year 2023-24 at its present value as Intangible Rights in Schedule of

Fixed Assets and is amortizing the leasehold rights on year on year basis. During the year 2023-24 the Company has capitalized/(adjusted)the present value of leasehold rights entered during the year (net of terminated) for ? 2,446.58 Lakhs (Previous year ? 3,255.46 Lakhs) and has amortized the leasehold rights (net of terminated) for? 2,076.26 Lakhs (Previous year ? 1,934.24 Lakhs).

Further while amortizing the leasehold rights for the year, decrease in leasehold obligations agreed with the some of the landlords has not been factored being temporary in nature and the said decrease in leasehold obligations aggregating to ? 186.39 Lakhs (Previous year ? 120.46 Lakhs) has been passed on through Profit & Loss account for the year.

45. The Company has maintained separate record of its suppliers as micro & small on the basis of memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development

Act, 2006) claiming their status as on 31st March, 2024 as Micro or Small Enterprise. Disclosure is hereby given in pursuant to requirement of section 22 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006:

50. Detail of Employee Benefits-Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity of 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance

Corporation of India (LIC) in the form of qualifying insurance policy. The following table summarizes the component of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amount recognized in the Balance Sheet for the respective plans:

53. Contemplating the long-term benefits for unlocking the shareholders'' value through acquisition of the tangible and intangible assets including business rights of two partnership firms, in which few Directors of the Company are interested as partners, namely Liberty Enterprises (LE) & Liberty Group Marketing Division (LGMD), the Company had entered into a Memorandum of Understanding (MOU) on March 31, 2015, with these two Partnership Firms for acquisition of their respective business of footwear. Since then, due to certain technical reasons, this MOU and the subsequent MOU for the related matter have not been materialized to the envisaged extent. The Company, keeping in view the protection of its shareholders interest and also to ensure long term continuance of the arrangements with these partnership firms till materialization of the acquisition of their respective business of footwear has extended the validity of earlier executed agreements and is assessing the business rights of the two firms with its availability till March 2028.

During the year in terms of above referred arrangements, the Company has paid/provided for franchise fee of ^ 115 Lakh (Previous year ? 115 Lakh) to LE and X 746.03 Lakh (Previous year X 786 Lakh) to LGMD and in terms of the renewed agreement dated April 3, 2013 of the Company with Liberty Footwear Co. (LFC), another Partnership Firm of the group and owner of trademarks "LIBERTY", for granting exclusive rights of usage of the trademark "LIBERTY" for a period of fifteen years from April 1,2013 onwards, the Company has paid/provided for trademark license fee of X 1,377.43 Lakh (Previous year X 1,263 Lakh) to LFC.

As informed earlier also that during the year 2022-23, few of the partners of LE, LGMD and LFC had served notices to the Company for termination of the ongoing franchise/trade mark license arrangements w.e.f. 01/04/2023 onwards which had been suitably replied by the Company duly reemphasizing its right of usage of tangible and intangible assets of these firms till March 2028 by virtue of the above referred agreements besides invoking the arbitration clause of the respective agreements with LFC & LGMD and has filed petition under Section 9 of The Arbitration and Conciliation Act, 1996 before the appropriate court at Karnal against

these partnership firms and keeping in view the submission, the Hon''ble Court vide its order dated 16/03/2023 and 20/07/2023 respectively has directed both the parties to maintain status-quotill further orders. The Company has also filed applications under Section 11 of The Arbitration and Conciliation Act, 1996 before the Hon''ble High Court of Punjab & Haryana for appointment of the arbitrators and till the date of signing of the financial statement the company''s applications are pending for adjudication.

The Board of Directors of the Company while approving the financial statement for the year under consideration have also considered for seeking extension of its existing arrangements of Franchise/Royalty beyond 31st March 2028 subject to mutual understanding and the related legal compliance.

54. During the year, Sh. Adesh Kumar Gupta, the erstwhile CEO & Executive Director (the Petitioner) along with few other shareholders (the Petitioners), had filed a Petition No. CA No. 179/2023 and CP No. 89/ Chd/Hry/202 before the Hon''ble National Company Law Tribunal (NCLT) at Chandigarh u/s 241 & 242 of the Companies Act, 2013 against his removal initiated in accordance to the provisions of Section 169 of the Companies Act 2013 also alleging certain acts of oppression and mismanagement on the part of the Company and its management.

The Company contested the same by rebutting all his allegations duly leveling counter allegations against him.

The above referred petitions filed by the erstwhile CEO & Executive Director were dismissed by the Hon''ble Bench vide its order dated 20/11/2023 on the technical ground of maintainability being not having adequate shareholding for filing the petition and the Petitioners have preferred their appeal before the Hon''ble National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT, Chandigarh and is pending for adjudication as on the date of signing of this balance sheet.

The Company, in consultation with its legal experts, is appositely contesting this appeal at NCLAT, New Delhi.

55. During the year owing to some reservations emerged subsequently with the supplies viz.-a.-viz. billed by few of the Company''s vendors, payments against their supplies were put on hold for the want of few more

details/supporting required for releasing the payments. In the meanwhile, due to earlier availability of multi authorisation with the authorised signatories the part payment against the disputed supplies was released to the vendors by one of the signatory ignoring the board mandate of the joint signatures for release of payment through bank. The cheques issued were not as per the authorisation matrix approved by the board and also not as per the bank mandate due to which itgot dishonoured by the bank.

The Company is taking appropriate legal remedies in this regard in due consultation with the legal counsels of the Company. Besides this show cause notice has also been served upon the erstwhile signatory questioning the issuance of cheques in disobedience to the board authorisation.

56. During the year under consideration, few Cheques, amounting to Rs. 15.39 Lakh issued by erstwhile CEO and Executive Director Sh. Adesh Kumar Gupta for unapproved expenses, remained pending for consideration in the books of account of the Company. The Company has considered this amount as recoverable from him by debiting to his account and accordingly shown in Note no. 11 of financial statements. Sh. Adesh Kumar Gupta in his suit for defamation filed against Sh. Sunil Bansal & Sh. Adish Gupta, Executive Directors at Delhi High Court has

referred the expenses against these cheques which were vehemently objected by the Company.

57. During the year, there had been a fire incident in one of the block of Company''s Central Warehouse (CWH) situated in rented premises in Panipat (Haryana) on February 07, 2024 due to electric short-circuit which had resulted in complete damage of stocks of finished goods and packing materials stored there for the value aggregating to X 1,763.92 Lakhs. In addition there had been a complete loss of rented building of particular block including additions made by the Company on the superstructure and plant & machinery (including petty & office equipment) having tentative value of X 150.79 Lakhs including third party claim for loss of property estimating to X 65Lakhs (net of salvage). Against the reported loss, the Company in terms of its insurance policy had filed its claim with the insurance company and as per management''s estimates based upon documents/cover note available, the total insurance claim recoverable is expected to be for X 1,425 Lakhs only. Accordingly with reference to the Note No. 32 (b)the differential of loss occurred and claim estimated amounting to X 470.14 Lakhs has been charged to Profit & Loss account for the year under Exceptional Items.

58. During the year the Company, in its exercise to physically verify and rationalize its gross block, has leveled out its fully depreciated Gross Block of Tangible Assets (Not under Lease) aggregating to X 4,606.95 Lakhs, detailed hereunder, and the Sale/Adj. during the year aggregating to X 4,958.65 Lakhs in Note No. 2-Fixed Assets includes the same:

59. Contingent Liabilities (Amount in ? Lakh
Particulars		2023-24	2022-23
1.	Bank Guarantees issued on behalf of the Company submitted with various institutional customers in terms of their orders.	229.71	214.87
II.	Letter of Credits (LCs) issued in favour of the Domestic and Overseas vendors for supply of materials/goods are for ? Nil Lakh (Previous year ? 227.40 Lakh) out of which liabilities for ? Nil LakhfPrevious year ? 137.95 Lakh) have been part of Trade Payables as on 31st March, 2024		89.45
III.	Value Added Tax¹ for the financial year 2005-06,2006-07, 2007-08 & 2008-09 on account of classification of goods at different rate of tax.	55.70	55.70
IV.	Value Added Tax² for the financial year 2016-17 on account of classification of goods at different rate of tax.	45.35	45.35
V.	Service Tax on GTA Services for the period from January 2005 to March 2007	5.29	5.29
VI.	On account of few labour matters pertaining to earlier years which are pending before Hon''ble Labour Commissioner, Chandigarh and have been challenged by the Company being time barred.	210.00	210.00
VII.	Disallowance of certain expenditure on a/c of non-deduction of tax at source³which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company is under appeal. Company has also preferred an appeal against the same before the appropriate authority and is pending for adjudication.	173.36	172.88
VIII.	Disallowance of certain expenditure for the assessment year 2020-21 on a/c of non-allow-ability and terming some as of enduring nature, grossly ignoring the past assessment history of the Company for earlier years, for which Company is under appeal (refer to Note No. 63 & 64). The related demand stands reduced by ? 113.32 Lakhs vide order passed u/s 154 dated 10/05/2023.	851.52	964.84
IX.	On account of litigation initiated by some of the vendors and third parties for disputed claims before respective authorities	350.00	75.00
X.	On account of short deduction of Tax at Source⁴ in the case of erstwhile subsidiary company M/s Liberty Retail Revolutions Limited for the assessment year 2011-12,2012-13,2013-14 & 2014-15, for which Company has filed appeals before the appropriate authority and are pending for adjudication. Out of the same matter relating to assessment year 2011-12 for ? 8.64 Lakhs has been decided by the Hon''ble ITAT, Delhi in favour of the Company and the related demand stands reduced to that extent.	31.38	40.03
XI.	On account of short deduction of Tax at Source for the assessment year 2018-19 which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company has filed appeals before the appropriate authority and are pending for adjudication.	9.76	27.51
XII.	On account of arbitrary additions made for the assessment year 2014-15 against which partly relief has already been granted by the appellate authority in favour of the Company and the department as well as the Company''s appeal before the Hon''ble ITAT for the same have been disposed off in a consolidated order by remanding back the matter to CIT(A) and is yet pending for adjudication however is having neutralized impact due to the tax paid for the year under MAT regime in accordance to the provisions of section 115JB of the Income Tax Act, 1961		161.24
XIII.	On account of reduction of deduction u/s 80IC of Income Tax Act, 1961 for the assessment year 2013-14 due to non-considering part of business income as industrial income, for which Company''s appeal is pending before Hon''ble Punjab & Haryana High Court duly allowing the interim relief as regard to the related matter.	59.14	59.14

(Amount in X Lakh
Particulars		2023-24	2022-23
XIV.	On account of disallowance made in accordance to the provisions of section 14A of the Income Tax Act, 1961 and disallowance of certain legitimate expenses of business for the assessment year 2012-13, which has been decided by the appellate authority in favour of the Company against which the department preferred further appeal before the Hon''ble ITAT, Delhi which has also been dismissed vide order dated 19/07/2023.		70.93
''Including amount deposited under protest? 13.82 Lakh (Previous year? 13.82 Lakh) ²Appeal Fee paid ? 7.10 Lakh (Previous year ? 7.10 Lakh) ³ Amount deposited under protest? 21.25 Lakh (Previous year? 21.25 Lakh) ⁴Amount deposited under protest ? 2.32 Lakh (Previous year ? 2.32 Lakh)

60. The assessment of the Company in respect of Income Tax is completed up to the Assessment Year 2023-24 under summary assessment in accordance to the provisions of section 143(1) of the Income Tax Act, 1961 vide order dated 26/12/2023.

61. The assessment of the Company in respect of Income Tax for the Assessment Year 2020-21 was completed under scrutiny assessment by National Faceless Assessment Unit (NFAC) vide order dated 27.03.2023 with an assessed income for ? 4038.41 Lakhs as against returned income for ? 2014.05 Lakhs on account of arbitrary disallowances and additions majorly due to terming the legitimate revenue expenses on account of trademark license fee, being paid/payable on year on year basis in accordance to the terms of the respective agreementsfor the arrangements in existence since 2003, on prevailing terms since 2013 onwards as expenses of enduring nature completely misinterpreting the respective agreements, grossly ignoring the provisions of the law, submissions made during the course of assessment proceedings as well as virtual hearing and also the past assessment history of the Company for last 16 years. The Company has preferred an appeal before the appropriate authoritiesagainst these arbitrary disallowances/additions and as per the opinion and precedents available will succeed in its contentions.

In addition against the above referred high-pitched and unreasonable assessment framed for the Assessment Year 2020-21 by the NFAU, during the year the Company also raised its grievance before the Jurisdictional Grievance Committee, constituted by the CBDT as an alternate administrative remedyfor such type of high-pitched/unreasonable assessments

framed under faceless mechanism and non-faceless assessment regime, which was disposed off by it in a cryptic and mechanical manner without considering the grievance petition in its true intent & spirit that too without granting an opportunity of hearing. Being aggrieved with the functioning of Jurisdictional Local Committee the Company preferred a Civil Writ Petition (CWP) before the Hon''ble High Court of Punjab & Haryana vide CWP-6536-2024 which has been dismissed by the Hon''ble Bench leaving it open to raise all the arguments before the appellate authority duly dismissing the review petition bearing RA-CW-136-2024 as well. Against the same the Company is contemplating to prefer a Special Leave Petition (SLP) before the Hon''ble Supreme Court of India.

Further the proceedings initiated by the Assessing Officer vide order dated 05.04.2023 passed u/s 148A (d) of the Income Tax Act, 1961,alleging escaped income aggregating to ? 1,557.99 Lakhs for the Assessment Year 2016-17 and seeking certain clarifications as regards to salaries for X 64.07 Lakhs, receipts of foreign remittances for X 1454.43 Lakhs and shipping bills for exports for X 39.48 Lakhs on the basis of information uploaded on Insight Systems of the Income Tax Department, have been stayed by the Hon''ble High Court of Punjab & Haryana in CWP-13252-2023 filed by the Company and next date of hearing is fixed for 09.07.2024.

62. For the current year. Deferred Tax Liability has been calculated after considering the cumulative timing differences of X Nil (Previous year X Nil) mainly

on account of depreciation. /Pjt m. f

63. Theassessment/auditof -foyr ^

the Company''s Manufacturing Plants, situated in the State of Haryana, Himachal Pradesh and Uttarakhand under respective GSTINs, in accordance to the provisions of GST Law has been completed up to financial year 2018-19.

64. During the year, the Company has capitalized the borrowing cost of ? Nil (Previous year ? Nil) as part of the cost of the qualifying assets.

65. Capital commitments not provided for are estimated at ?50 Lakh (Previous year ?25 Lakh).

66. The Board of Directors of the Company presently considers and maintains "Footwear" as the main business segment of the Company. Further the Company''s Lifestyle division has also formally commenced its operations w.e.f. October 17, 2018, however the same has not been considered

as separate business segment because of its insignificant contribution to revenue during the financial year 2023-24 on account of Sales and Net Profits for t 570.93 Lakhs and t 68.10 Lakhs respectively (Previous year ? 471.82 Lakhs and ? 34.79 Lakhs respectively)

67. Related Party Transactions:

The Company has made the following transactions with related parties as defined under the provisions of lnd-AS-24:

A) Name of Related Parties and description of relationship:

(i) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the Company and Key Management Personnel (KMP):

(Amount in ? Lakh)

''Taking note of the ongoing dispute among the partners of related partnership firms as regards to its business operations, on the request of majority of the partners besides making the statutory payments of the related partnership firms on time to time basis, the Company, in accordance to the terms of respective agreements, had been discharging its contractual liability towards respective partnership firms till September 2022 by making the payment to respective partners in accordance to the details provided by majority of partners. However thereafter due to serving of notices for termination of these Â» arrangements with respective firms by few of the partners, |j the Company has, based upon the legal opinion available, ? stopped following the same practice for want of

fresh mandate of majority of the partnersand ? iUSl accordingly has now been discharging its contractual liability on timely basis

in the name of respective firms only net of statutory and other payments made on behalf of the respective partnership firms and also adjusting of the expenditure incurred by the Company in defending the false and frivolous litigations initiated by one of the partners of M/s Liberty Footwear Co.

²As the liabilities for provident fund, gratuity and compensated absences are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the Directors and KMP are not included above.

³Paid for the period from April-23 to June-23.

⁴As per the section 149(6) of the Companies Act, 2013, Independent Directors are not considered as "Key Managerial Person", however to comply with the disclosure requirements of Ind AS-24 on "Related party transactions" they have been disclosed as "Key Managerial Person".

70. As per Company''s assessment about recoverability and carrying values of its assets comprising of receivables, inventories, plant and equipment, intangible assets, it expects to recover the carrying amount of these assets.

71. The current year and previous year figures have been rounded off to the nearest lakh of rupee upto two decimal places unless stated otherwise.

72. The Company does not hold any benami property and no proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and the rules made thereunder.

73. The Company has duly filed Quarterly returns or statements, Unaudited and Audited as the case may be, of its current assets with the banks and are in agreement with its books of accounts.

74. The Company is not declared as willful defaulter by any bank in accordance with the guidelines on wilful defaulters issued by the RBI.

75. The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013. This is determined to the extent of such parties have been identified on the basis of information available with the Company.

76. The Company has duly registered all the charges or satisfaction thereof with Registrar of Companies (ROC) within the statutory period.

77. The number of layers prescribed under clause (87) section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to the Company

78. During the year, no scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.

79. The Company has not advanced or loaned or invested funds to any other persons (intermediaries) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or provide any guarantee in any manner whatsoever on behalf of the Company (ultimate beneficiary). The Company has also not received any fund from any persons with the understanding that the Company shall directly lend or

invest or provide any guarantee to any other persons on behalf of the funding party.

80. The Company does not have any transactions which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

81. During the year, the Company has not traded or invested in crypto currency or virtual currency.

82. The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.

83. Fair Value Measurements

Fair value of financial assets and liabilities is normally determined by references to the transaction price or market price and in case of non-reliably determinable, the Company determines the same using valuation techniques that are appropriate in the circumstances and for which sufficient data are available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs as per the following:

a. Foreign exchange forward contracts are valued using market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period.

b. Unquoted equity instruments where most recent information to measure fair value is not determinable, cost has been considered as best estimate of fair value.

c. The carrying amount of other financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate any significant difference that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Fair Value Hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three , levels prescribed as per Ind-AS 113 "Fair Value Measurement": ,,/^v

Mar 31, 2023

1. Terms/Rights attached to Equity Shares: The Company has one class of equity shares having a par value of '' 10/- each. Each shareholder is eligible for one vote per share held in the Company. The dividend proposed by the Board of Directors of the Company, if any, is subject to approval of the members in the ensuing general meeting, except in the case of interim dividend, if declared. In the event of liquidation of the Company, equity shareholders shall be entitled to receive the remaining assets, after the distribution to preferred shareholders, if any, in proportionate of their shareholding.

percentage in accordance with applicable regulations. Consequent to the introduction of the Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. Hence, no amount has been transferred to general reserve while declaring and paying the interim dividend during the year."

*Secured against hypothecation of Company''s entire stock of raw materials, stock in process, finished goods, consumables, stores and spares, finished goods in stores, in transit and with shippers at port awaiting shipment for exports, receivables, cheques, bank drafts and all other current assets and 2nd paripassu charge on Plant & Machinery.

During the year under consideration, no remuneration has been paid to Non-Executive Directors except sitting fees of '' 7.50Lakh (Previous year '' 8.25 Lakh) to Independent Directors.

36. During the course of its business the Company usually extends credit terms for more than six months to some of its customers more particularly to overseas customers however there wasan abnormal increase in such outstanding since financial year 2019-20 majorly due to delay in release of payments under one of government tender supplies aggregating to '' 2,682.88 Lakhs on account of procedural compliances/clearances. The Company was in consistent follow up with the concerned authorities and during the year 2022-23 has received the payment aggregating to '' 2,246.32 Lakhs as full & final net of certain arbitrary deductions/claims on a/c of shortages, late delivery etc. The Company has preferred a

representation before the appropriate authority against such arbitrary deductions and is in process of filing a petition before theHon''ble High Court of Andhra Pradesh for appointment of an Arbitrator in this regard. Irrespective of these remedial action, in furtherance to Company''s policy and assuming its non-recoverability in shorter period of time the Company has charged off the remaining outstanding balance of '' 436.56 Lakhs, net of share of respective vendorsto the extent of proportionate supplies made by them to the Company aggregating to '' 268.82 Lakhs, to profit & loss account for the year ended on 31st March, 2023 and Net Profits of the Company for the year are lower to the extent of '' 167.74 Lakhs.

37. Ageing schedule of Trade Receivables: Disclosure on ageing schedule of trade receivables in pursuant to Division II - Ind AS Schedule III to the Companies Act, 2013 is as under:

38. Provision for doubtful debts:

The Company has considered debts for '' 366.85 Lakh (Previous year '' 406.26 Lakh) as doubtful debts/advances/securities and also has withdrawn '' 22.96 Lakh (Previous year '' Nil) out of the provisions made in the earlier years for the

same and written off as bad debts '' 33.92 Lakh (Previous yearNil). Further the difference of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit & Loss for the year and the balance has been carried in the balance sheet.

39. In accordance to its policy as regards to evaluation of its trade receivables, considering the nonrecoverability of some of the debts/advances, the

Company has written off the debts/advances amount to '' 51.64 Lakh(Previous year '' 11.82 Lakh).

41. The Company has taken various retail stores and warehouses under operating lease arrangements. The lease agreements generally have an escalation clause and there are no subleases. These leases

are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

The leasehold rights are depreciated/amortized using the straight line method from the commencement date over the shorter of lease term or useful life of right to use.

42. The Company implemented the Ind-AS-116 with effect from 1stApril, 2019 and accordingly is considering all the persisting leasehold rights having maturity for more than 12 months including entered during the year 2022-23 at its present value as Intangible Rights in Schedule of Fixed Assets and is amortizing the leasehold rightson year on year basis. During the year 2022-23 the Company has capitalized/(adjusted)the present value of leasehold rights entered during the year

(net of terminated) for '' 3,255.46 Lakhs(Previous year '' 366.57 Lakhs) and has amortized the leasehold rights (net of terminated) for '' 1,934.24 Lakhs (Previous year '' 1737.35 Lakhs).

Further while amortizing the leasehold rights for the year, decrease in leasehold obligations agreed with the landlords due to the covid-19 outbreak in the country and resultant lockdown during the year has not been factored being temporary in nature and the said decrease in leasehold obligations aggregating to ^ 120.46 Lakhs (Previous year '' 319.24 Lakhs) has been passed on through Profit & Loss account for the year.

44. The Company has maintained separate record of its suppliers as micro & small on the basis of memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development

Act, 2006) claiming their status as on 31st March, 2023 as Micro or Small Enterprise. Disclosure is hereby given in pursuant to requirement of section 22 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

49. Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity of15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded

with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the component of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amount recognized in the Balance Sheet for the respective plans:

52. Contemplating the long-term benefits for unlocking the shareholders'' value through acquisition of the tangible and intangible assets including business rights of two partnership firms, in which few Directors of the Company are interested as partners, namely Liberty Enterprises (LE) & Liberty Group Marketing Division (LGMD), the Company had entered into a Memorandum of Understanding (MOU) on March 31, 2015, with these two Partnership Firms for acquisition of their respective business of footwear. Since then, due to certain technical reasons, this MOU and the subsequent MOU for the related matter have not been materialized to the envisaged extent. The

Company, keeping in view the protection of its shareholders interest and also to ensure long term continuance of the arrangements with these partnership firms till materialization of the

acquisition of their respective business of footwear have extended the validity of earlier executed agreements and is assessing the business rights of the two firms with its availability till March 2028.

During the year in terms of above referred arrangements, the Company has paid/provided for franchise fee of ''115 Lakh (Previous year ''115 Lakh) to LE and ''786 Lakh (Previous year ''704.60 Lakh) to LGMD and in terms of the renewed agreement dated April 3, 2013 of the Company with Liberty Footwear Co. (LFC), another Partnership Firm of the group and owner of trademarks "LIBERTY", for granting exclusive rights of usage of the trademark "LIBERTY" for a

period of fifteen years from April 1, 2013 onwards, the Company has paid/provided for trademark license fee of ''1263 Lakh (Previous year ''998.54 Lakh) to LFC.

The Company is vehemently contesting the legal disputes raised by few partner(s) before respective authorities/NCLT/courts, challenging either the validity of the arrangements of one of the firm or interpretation of meeting the financial obligation by the Company with regard discharge of its commercial liability towards LGMD & LFC as regards to the referred agreements.In addition, during the year 2022-23, few of the partners of LE, LGMD and LFC have served notices to the Company for termination of the ongoing franchise/trade mark license arrangements w.e.f. 01/04/2023 onwards. The same have been suitably replied by the Company duly reemphasizing its right of usage of tangible and intangible assets of these firms till March 2028 by virtue of the above referred agreements and is also exploring the other legal remedies available to protect its rights.

The Company has also invoked arbitration clause of the agreement with LFC and has filed petition under Section 9 of The Arbitration and Conciliation Act, 1996 before the appropriate court at Karnal against LFC and keeping in view the submission, the Hon''ble court vide its order dated 16/03/2023 has directed both the parties to maintain status-quotill further order.

53. Contingent Liabilities			(Amount in ''Lakh)
	Particulars	2022-23	2021-22
I.	Bank Guarantees issued on behalf of the Company submitted with various institutional customers in terms of their orders.	214.87	429.27
II.	Letter of Credits (LCs) issued in favour of the Domestic and Overseas vendors for supply of materials/goods are for '' 227.40 Lakh out of which liabilities for '' 137.95 Lakh have been part of Trade Payables as on 31st March, 2023	89.45
III.	i Value Added Tax for the financial year 2005-06, 2006-07, 2007-08 & 2008-09 on account of classification of goods at different rate of tax.	55.70	55.70
IV.	Value Added Tax for the financial year 2016-17 on account of classification of goods at different rate of tax.	45.35	45.35
V.	Service Tax on GTA Services for the period from January 2005 to March 2007	5.29	5.29
VI.	On account of compliance relating to obligations under EPCG Licenses	-	10.56

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2023			(Amount in '' Lakh)
	Particulars	2022-23	2021-22
VII.	On account of few labour matters pertaining to earlier years which are pending before Hon''ble Labour Commissioner, Chandigarh and have been challenged by the Company being time barred.	210.00	210.00
Vlll.	Disallowance of certain expenditure on a/c of non-deduction of tax at source³ which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company is under appeal. Company has also preferred an appeal against the same before the appropriate authority and is pending for adjudication.	172.88	172.88
lX.	Disallowance of certain expenditure for the assessment year 2020-21 on a/c of non-allow-ability and some of enduring nature, grossly ignoring the past assessment history of the Company for earlier years, for which Company is under appeal. In addition, the Company has filed a petition before the Grievance Committee constituted by CBDT for such a high-pitch assessment framed under faceless mechanism andare yet to be addressed.	964.84
X.	On account of litigation initiated by some of the vendors and third parties for disputed claims before respective authorities	75.00	75.00
Xl.	On account of short deduction of Tax at Source⁴ in the case of erstwhile subsidiary company M/s Liberty year 2011-12, 2012-13, 2013-14 & 2014-15, for which Company has filed appeals before the appropriate authority and are pending	40.03	40.03
Xll.	On account of short deduction of Tax at Source for the assessment year 2018-19 which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company has filed appeals before the appropriate authority and are pending for adjudication.	27.51	27.51
Xlll.	On account of arbitrary additions made for the assessment year 2014-15 against which partly relief has already been granted by the appellate authority in favour of the Company and the department as well as the Company are in appeal before the Hon''ble ITAT for the same and are pending for adjudication.	46.84	46.84
XlV.	On account of reduction of deduction u/s 80IC of Income Tax Act, 1961 for the assessment year 2013-14 due to non-considering part of business income as industrial income, for which Company''s appeal is pending before Hon''ble Punjab & Haryana High Court duly allowing the interim relief as regard to the related matter.	59.14	59.14
XV.	On account of disallowance made in accordance to the provisions of section 14A of the Income Tax Act, 1961 and disallowance of certain legitimate expenses of business for the assessment year 2012-13, which has been decided by the appellate authority in favour of the Company and the department has preferred a further appeal before the Hon''ble ITAT, Delhi.	70.93	70.93
XVI.	On account of disallowance made in accordance to the provisions of section 14A of the Income Tax Act, 1961 and disallowance of certain legitimate expenses of business for the assessment year 2014-15, which has been decided by the appellate authority in favour of the Company and the department has preferred a further appeal before the Hon''ble ITAT, Delhi.	114.40	114.40

Including amount deposited under protest '' 13.82 Lakh (Previous year '' 14.26 Lakh) ²Appeal Fee paid '' 7.10 Lakh (Previous year '' 7.10 Lakh)

³Amount deposited under protest '' 21.25 Lakh (Previous year '' 21.25 Lakh)

⁴Amount deposited under protest '' 2.32 Lakh (Previous year '' Nil)

54. The assessment of the Company in respect of Income Tax is completed up to the Assessment Year 2020-21vide order dated 27.03.2023 with an assessed income for '' 4038.41 Lakhs as against returned income for '' 2014.05 Lakhs on account of

arbitrary disallowance of certain legitimate expenses and additions made and the Company has preferred an appeal before the appropriate authorities. Further the assessment for the Assessment Year 2016-17 has also been reopened

vide order dated 05.04.2023 for want of certain clarifications alleging escaped income for '' 1557.99 Lakhs on the basis of information uploaded on Insight Systems of the Income Tax Department.

55. For the current year, Deferred Tax Liability has been calculated after considering the cumulative timing differences of '' Nil (Previous year '' Nil) mainly on account of depreciation.

56. During the year, the Company has capitalized the borrowing cost of '' Nil (Previous year '' Nil) as part of the cost of the qualifying assets.

57. Capital commitments not provided for are estimated at '' 25 Lakh (Previous year '' 15 Lakh).

58. The Board of Directors of the Company presently considers and maintains "Footwear" as the main business segment of the Company. Further the Company''s Lifestyle division has also formally commenced its operations w.e.f. October 17, 2018, however the same has not been considered as separate business segment because of its insignificant contribution to revenue during the financial year 2022-23 on account of Sales and Net Profits for '' 471.82 Lakhs and '' 34.79 Lakhs respectively.

Taking note of the ongoing dispute among the partners of related partnership firms as regards to its business operations, on the request of majority of the partners besides making the statutory payments of the related partnership firms on time to time basis, the Company, in accordance to the terms of respective agreements, had been discharging its contractual liability towards respective partnership firms till September 2022 by making the payment to respective partners in accordance to the details provided by majority of

partners. However thereafter due to serving of notices for termination of these arrangements with respective firms by few of the partners, the Company has, based upon the legal opinion available, stopped following the same practice for want of fresh mandate of majority of the partnersand accordingly has now been discharging its contractual liability on timely basis in the name of respective firms only.

²As the liabilities for provident fund, gratuity and compensated absences are provided on an actuarial

basis for the Company as a whole, the amounts pertaining to the Directors and KMP are not included above.

³As per the section 149(6) of the Companies Act, 2013, Independent Directors are not considered as "Key

Managerial Person", however to comply with the disclosure requirements of Ind AS-24 on "Related party transactions" they have been disclosed as "Key Managerial Person".

62. As per Company''s assessment about recoverability and carrying values of its assets comprising of receivables, inventories, plant and equipment, intangible assets, it expects to recover the carrying amount of these assets. However, the Company will continue to monitor any material changes to future economic conditions due to uncertainties linked to COVID -19.

63. The Company has regrouped/reclassified/ rearranged the previous year figures in accordance with the requirements applicable in the current year as well as for appropriate presentation of the accounts detailed as under:

I. Packing Materials Consumed has been

regrouped/ rearranged from Schedule No. 31 (b) to Schedule 26 (b) under the head "Cost of Materials consumed and Finished Goods Purchased" and impact of such regrouping/ rearranging on the Net Profits of the Company is Nil.

64. The current year and previous year figures have been rounded off to the nearest rupee.

65. The Company does not hold any benami property and no proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and the rules made thereunder.

66. The Company has duly filed Quarterly returns or statements, Unaudited and Audited as the case may be, of its current assets with the banks and are in agreement with its books of accounts.

67. The Company is not declared as willful defaulter by any bank in accordance with the guidelines on wilful defaulters issued by the RBI.

68. The Company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013. This is determined to the extent of such parties have been identified on the basis of information available with the Company.

69. The Company has duly registered all the charges or satisfaction thereof with Registrar of Companies (ROC) within the statutory period.

70. The number of layers prescribed under clause (87) section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable to the Company

71. During the year, no scheme of arrangements has been approved by the competent authority in terms of sections 230 to 237 of the Companies Act, 2013.

72. The Company has not advanced or loaned or invested funds to any other persons (intermediaries) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or provide any guarantee in any manner whatsoever on behalf of the Company (ultimate beneficiary). The Company has also not received any fund from any persons with the understanding that the Company shall directly lend or invest or provide any guarantee to any other persons on behalf of the funding party.

73. The Company does not have any transactions which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

74. During the year, the Company has not traded or invested in crypto currency or virtual currency.

75. The Company has not revalued its property, plant and equipment or intangible assets or both during the current or previous year.

76. Fair Value Measurements

Fair value of financial assets and liabilities is normally determined by references to the transaction price or market price and in case of non-reliably determinable, the Company determines the same using valuation techniques that are appropriate in the circumstances and for which sufficient data are available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs as per the following:

a. Foreign exchange forward contracts are valued using market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period.

b. Unquoted equity instruments where most recent information to measure fair value is not determinable, cost has been considered as best estimate of fair value.

significant difference that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Fair Value Hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed as per IndAS 113 "Fair Value Measurement":

Mar 31, 2018

CORPORATE INFORMATION

Liberty Shoes Ltd is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 3rd September, 1986. The shares of the Company are listed on two stock exchanges in India i.e National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network. The Registered Office of the Company is situated at Libertypuram, Karnal, Haryana.

1(a) Terms/Rights attached to Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held in the Company. The dividend proposed by the Board of Directors of the Company, if any, is subject to approval of the members in the ensuing general meeting, except in the case of interim dividend, if declared. In the event of liquidation of the Company, equity shareholders shall be entitled to receive the remaining assets, after the distribution to preferred shareholders, if any, in proportionate of their shareholding.

2. In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

3. The Company has taken various retail stores and warehouses under operating lease arrangements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

The aggregate lease rentals payables are charged as Rent in Note 26.

The future minimum lease payments under non cancellable operating leases are as follows:

4. The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2014-15.

5. In furtherance to the Companyâs earlier communication, considering the long term benefits of unlocking the shareholdersâ value through acquisition of the tangible and intangible assets including business rights of Liberty Enterprises (LE) & Liberty Group Marketing Division (LGMD), on March 31, 2015 the Company had entered into a Memorandum of Understanding (MOU) with these two Partnership firms for acquisition of their respective business of footwear. In terms of the said MOU the related transactions were to be completed, as per the mode/structure to be recommended by the consultants, on or before March 31, 2016 but with retrospective effect from April 1, 2015. In continuation to the said MOU, considering the fact of non formalization of terms and conditions for such takeover by 31st March, 2016 due to certain technical reasons, parties to the above said MOU entered into a fresh agreement for continuing the existing arrangements till further period(s) as may be mutually agreed and accordingly extended the said arrangements initially for further period of 12 months commencing from April 1, 2016 onwards, thereafter for further period of 12 months commencing from April 1, 2017.

Sh. Harish Kumar Gupta, one of the Partners of LE, on his own behalf and on behalf of LE has challenged the above said extension & further renewal of the said arrangements before the Court of ADJ, Karnal on 16/05/2017 and asked for the restraining order on the said arrangements entered by the Company with LE. The Honâble Court at Karnal, vide its order dated December 21, 2017 duly acknowledging the fact that the Company cannot be stopped from doing its lawful business, did not interfere in the said existing arrangements but restrained LE not to enter into fresh contract during the intermittent period from the first date of hearing to next date of hearing(s) and subsequently, vide its order dated March 1, 2018 on the submission of other partners, vacated the said restraining order also.

The Company, to protect the interest of its shareholders and to ensure long term continuance of the arrangements with these partnership firms namely LE & LGMD till materialization of the acquisition of their respective business of footwear in accordance to the above referred MOU, have entered into a fresh agreements with these two partnership firms for further period of 10 years commencing from April 1, 2018.

During the year in terms of the above referred agreements, the Company has paid/provided for franchise fees of Rs.115 Lakh (Previous year Rs.115 Lakh) to LE and Rs.818 Lakhs (Previous year Rs.855 Lakh) to LGMD and in terms of the renewed agreement dated April 3, 2013 of the Company with Liberty Footwear Co. (LFC), another partnership firm of the group and owner of trademark âLIBERTYâ, for granting exclusive rights of usage of the trademark âLIBERTYâ for a period of fifteen years from April 1, 2013 onwards and in conformity with the requisite approvals of the Central Government obtained by the Company in this regard, the Company has paid/provided for trademark license fee of Rs.866 Lakh (Previous year Rs.820 Lakh) to LFC.

The execution of Arbitrator award, with regard to the erstwhile Franchise Agreement dated 31st March 2003, which has been upheld by Court at Karnal vide order 22/12/2017 has, subsequently on the application of other partners and the Company, been stayed by Honâble High Court of Haryana and Punjab at Chandigarh vide its order dated 30/04/2018.

6. Interest to others include Rs.1,03,93,918/- (Previous year Rs.41,08,594/-) against short term loan from M/s Geofin Investments Private Ltd @ 12% p.a.

7. During the year, the Company has capitalized the borrowing cost of Rs.Nil (Previous year Rs.Nil) as part of the cost of the qualifying assets.

8. The Company has paid the excise duty amounting to Rs.7,02,26,830/- (Previous year Rs.22,99,91,952/-) against the sales executed during the year.

Also, post implementation of GST w.e.f. 1st July, 2017 onwards the Company has made the provision of excise duty of Rs.Nil (Previous Year Rs.1,56,33,078/-) against finished goods lying in stocks as on 31st March, 2018 and the difference between the provision of current year and of previous year has been recognized separately in the Statement of Profit & Loss.

9. The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2018 as Micro, Small or Medium Enterprise. Consequently the amount paid/payable to these parties during the year is Nil.

10. Capital commitments not provided for are estimated at Rs.50 Lakh (Previous year Rs.50 Lakh).

11. Provision for doubtful debts: During the year, the Company has considered debts for Rs.Nil/- (Previous year Rs.Nil) as doubtful debts/securities and also has withdrawn Rs.Nil (Previous year Rs.1,43,92,769/-) out of the provisions made in the earlier years for the same and written off as bad debts Rs.Nil (Previous year Rs.1,30,47,705/-). Further the differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit & Loss for the year and the balance has been carried in the balance sheet:

12. During the year, considering the non-recoverability of some of the debts/advances, the Company has written of the debts amounting to Rs.4,13,61,074/- (Previous year Rs.7,26,240/-).

13. The Board of Directors of the Company considers and maintains âFootwearâ as the only business segment of the Company.

14. Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Ind AS-24.

A) Transactions between the Company and related parties and the status of outstanding balances as at 31st March, 2018:

B) Detail of Related Parties and description of relationship:

i) Subsidiary Company:

Liberty Foot Fashion Middle East FZE

ii) Entities where Key Management Personnel/Relative of Key Management Personnel has significant influence: Geofin Investments Private Ltd., Liberty Group Marketing Division, Liberty Enterprises, Liberty Footwear Co., Sanjeev Bansal Charitable Trust, Liberty Innovative Outfits Ltd., Hello Ten Brands Pvt. Ltd., Liberty Fashion Outfit, Little World Constructions Pvt. Ltd.,.

iii) Key Management Personnel:

1) Sh. Adesh Kumar Gupta 2) Sh. Shammi Bansal

3) Sh. Sunil Bansal 4) Sh. Adeesh Kumar Gupta

5) Sh. Ashok Kumar 6) Sh. Munish Kakra

iv) Relatives of Key Management Personnel:

S/Sh. Harish Kumar Gupta, Raman Bansal, Vivek Bansal, Anupam Bansal (Brothers of Directors)

Sh. Ayush Bansal, Sh. Manan Bansal, Sh. Pranav Gupta, Sh. Akshat Gupta (Sons of Directors)

Smt. Garima Gupta (Wife of Director)

Note: Receiving the services from Key Management Personnel and their relatives includes rent and land lease charges.

15 Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans:

16. For the current year, Deferred Tax liability has been calculated after considering the cumulative timing differences of Rs.Nil/- (Previous year Rs.1,92,27,479/-) mainly on account of depreciation.

17. There are no dues payable to the Investor Education and Protection Fund as at 31st March, 2018.

18. In light of Section 135 of the Companies Act, 2013, the Company has incurred expenses on Corporate Social Responsibility (CSR) aggregating to Rs.32.42 Lakh for CSR activities.

19. The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Mar 31, 2016

Note: Receiving the services from Key Management Personnel and their relatives includes rent and land lease charges.

Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

For the current year, Deferred Tax liability has been calculated after considering the cumulative timing differences of Rs.4,42,50,356/- (Previous year Rs.6,38,37,055/-) mainly on account of depreciation. There are no dues payable to the Investor Education and Protection Fund as at 31^st March, 2016.

In accordance with provisions of Section 135 of the Companies Act, 2013, the Company has incurred expenses towards Corporate Social Responsibility (CSR) aggregating to Rs.28.10 Lakh for CSR activities out of which Rs.24.90 Lakh has been considered in donation as mentioned in note no. 2.25 and Rs.3.20 Lakh has been incurred by way of supply of Shoes on complementary basis to needy people.

The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Compiled by: Dion Global Solutions Limited

INSTRUCTIONS

1. This Ballot Form provided for the benefit of members who do not have access to remote e-voting facility, to enable then to send their assent or dissent by post.

2. Shareholder desiring to exercise vote by postal ballot form may complete and sign the ballot form printed overleaf and send it to Mr. Sukesh Gupta, Chartered Accountants, The Scrutinizer, Liberty Shoes Limited, 4/42, Punjabi Bagh, New Delhi-110026 in the attached sealed self-addressed pre-paid envelope. Postage will be borne by the Company. However envelopes containing postal ballot, if sent by any other mode at the expense of the registered shareholder will also be accepted. The Postal Ballot(s) may also be deposited personally.

3. Voting Rights: Shareholders holding equity shares shall have one vote per share as shown against their holding and the shareholders can vote for their entire voting rights as per their discretion.

4. The self addressed pre-paid envelope contains the address of the scrutinizer appointed by the Board of Directors for the above Annual General Meeting.

5. This form should be completed and signed by the shareholder. In case of joint holding, this form should be completed and signed (as per the specimen signature registered with the Company) by the first named shareholder and in his absence, by the next named shareholder.

6. Unsigned Ballot Form or incomplete Ballot Form will be rejected.

7. Duly signed Ballot Form should reach the Scrutinizer not later than the close of working hours of Saturday, 17th September, 2016 at 5.00 p.m. All Ballot Forms received after this date will be strictly treated as if reply from such shareholder has not been received.

8. A shareholder may request for a duplicate Ballot Form, if so required. However, the duly filled in duplicate Ballot Form should reach the Scrutinizer not later than the date specified at item 7 above.

9. Voting rights shall be reckoned on the paid up value of the shares registered. In the name of the shareholder as on the cut-off date i.e. Monday, 12th September, 2016.

10. In case of shares held by Companies, Trusts, Societies etc. the duly filled in Ballot Form should be accompanied by a certified true copy of the appropriate Resolution.

11. In case of the Ballot Form is signed by the holder of power of attorney reference to the power of attorney registration with the Company should be mentioned in the Ballot Form. In case a Ballot Form has been signed by an authorized representative of a body corporate, a certified copy of the relevant authorization to vote on the Resolutions as mentioned in the Notice to the 30^th Annual General Meeting through Ballot Form facility should accompany the Ballot Form. Where the Ballot Form has been signed by a representative of the President of India or of the Governor of a State, a certified copy of the nomination should accompany the Ballot Form.

12. Shareholders are requested not to send any other paper along with the Ballot Form in the enclosed self-addressed postage prepaid envelope in as much as all such envelopes will be sent to the Scrutinizer and any extraneous paper found in such envelope would be destroyed by the Scrutinizer.

13. In compliance with the provisions of Section 108 of the Companies Act, 2013, read with Companies (Management and Administration) Rules,

2014 as substituted by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and such other applicable provisions, if any, the Company is also offers Remote e-voting to all the members. For this purpose, the Company has signed an agreement with CDSL for facilitating Remote e-voting and is pleased to offer Remote e-voting facility for the members to enable them to cast their votes electronically. Members have option to vote either through Remote e-voting or through Ballot Form printed overleaf. If a member has opted for Remote e-voting, then he/she should not vote by Ballot Form also and vice-a-versa. However, in the event member casts his votes through both the processes i.e. Remote e-voting and Ballot Form, the votes in the electronic system would be considered and the Ballot Form would be ignored.

14. The detailed instructions and process for Remote e-voting has been given in the notes to the Notice dated 30^th May, 2016.

15. Members who have registered their e-mail ids for receipt of documents in electronic mode under the Green Initiative of MCA have been sent Ballot Form by e mail and the members who have not registered their e-mail Ids with RTA/Depository Participants or requested for Physical copy of Annual Report have been sent Ballot Form in printed mode. Members who wish to vote through Ballot Form can also obtain the Ballot Form from Registrar and Share Transfer Agent (RTA), M/s. Link In time India Private Limited, 44, Community Centre, Naraina Industrial Area Phase-I, New Delhi-110028 or from the Company at its Registered Office and fill in the details and send the same to the Scrutinizer by Post at the address given at above.

.The Resolutions, if assented by requisite majority, shall be considered as passed on the date of 30^th Annual General Meeting, schedule to be held on Monday, 19^th day of September, 2016.

Mar 31, 2015

CORPORATE INFORMATION

Liberty Shoes Ltd is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 3rd September, 1986. The shares of the Company are listed on two stock exchanges in India i.e National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network. The Registered Office of the Company is situated at Libertypuram, Karnal, Haryana.

2.1.1 Terms/Rights attached to Equity Shares

The Company has one class of equity shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held in the Company. The dividend proposed by the Board of Directors of the Company, if any, is subject to approval of the members in the ensuing general meeting, except in the case of interim dividend, if declared. In the event of liquidation of the Company, equity shareholders shall be entitled to receive the remaining assets, after the distribution to preferred shareholders, if any, in proportionate of their shareholding.

During the year under consideration, no remuneration has been paid to Non-Executive Directors except professional services fees of Rs.21,00,000/- (Previous year Rs.18,00,000/-) to Sh. Satish Kumar Goel and Rs.2,70,000/- (Previous year Nil) to Sh. Ashok Kumar (Since the date of his becoming Director on the Board of the Company) and sitting fees of Rs.2,70,000/- (Previous year Rs.42,500/-) to Independent Directors.

2.1.2 In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

2.1.3 The Company has taken various retail stores and warehouses under operating lease arrangements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rentals payables are charged as Rent in note 2.25.

The future minimum lease payments under non cancellable operating leases are as follows:

2.1.4 The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2012-13.

2.1.5 During the year, in terms of the renewed agreements dated April 3, 2013 with Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms of the group, for further period of two years from April 1st, 2013 onwards, the exclusive use of their manufacturing facilities and fixed assets, trademarks & distribution networks was available with the Company till March 31, 2015. Further, in conformity with the requisite approvals of the Central Government obtained by the Company in this regard, the Company has paid/provided for franchise fees of Rs.115 Lacs (Previous year Rs.115 Lacs) to LE and Rs.881.67 Lacs (Previous year Rs.840 Lacs) to LGMD.

In furtherance to the Company's earlier communication, considering the enduring benefits of unlocking the shareholders' value through acquisition of the tangible and intangible assets including business rights of LE & LGMD, on March 31, 2015 the Company has entered into a Memorandum of Understanding (MOU) with these two Partnership firms for acquisition of their respective business of footwear. In terms of the said MOU, the Company has paid a sum of Rs.10 Lacs & Rs.50 Lacs to LE & LGMD respectively as an advance and the related transactions are to be completed, as per the mode/structure to be recommended by the consultants, on or before March 31, 2016 but with retrospective effect from April 1,2015

Also during the year, in terms of the renewed agreement dated April 3, 2013 with Liberty Footwear Co. (LFC), another partnership firm of the group and owner of trademark "LIBERTY", for granting exclusive rights of use of trademark "LIBERTY" to the Company for further period of fifteen years from April 1, 2013 onwards and in conformity with the requisite approvals of the Central Government obtained by the Company in this regard, the Company has paid/provided for trademark license fee of Rs.855.56 Lacs (Previous year Rs.800 Lacs) to LFC.

2.1.6 Interest to others include Rs.11,93,934/- (Previous year Rs.18,95,666/-) against short term loan from M/s Geofin Investments Private Ltd @ 12% p.a.

2.1.7 During the year the Company has capitalized the borrowing cost of Rs. Nil (Previous year Rs. Nil) as part of the cost of the qualifying assets.

2.1.8 The Company has paid the excise duty amounting to Rs.22,57,15,331/- (Previous year Rs.17,1 1,33,108/-) against the sales executed during the year.

Also, the Company has made the provision of excise duty of Rs.1,24,51,014/- (Previous Year Rs.1,53,04,343/-) against finished goods lying in stocks as on 31st March, 2015 and the difference of two has been recognized separately in the Statement of Profit & Loss.

2.1.9 During the year the registration process of certain portion of land at Libertypuram, Karnal, already in possession with the Company since beginning, has been completed and the said land has duly been registered in the name of the Company in revenue records.

2.1.10 The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2015 as Micro, Small or Medium Enterprise. Consequently the amount paid/payable to these parties during the year is nil.

2.1.11 Contingent Liabilities (Amount in Rs.) Particulars 2014-15 2013-14

I) Bank Guarantees issued on behalf of the Company submitted with various 5,56,22,601 6,74,16,281 institutional customers in terms to their orders.

II) Letter of Credits 11,90,31,607 7,30,36,956

III) On account of disallowance of legitimate credit of CENVAT against Excise Duty/ 3,38,75,448 3,38,75,448

Education Cess1 for the period from November 2004 to June 2005, June 2006, May 2006 to financial year 2002-03 and 2004-05. CESTAT while admitting Company's appeal directed to deposit Rs.39 Lacs under protest & has granted stay

IV) Income Tax claims disputed by the Company relating to TDS (FY 2010-11 ) against which appeal filed by the Company - 3,11,878

V) Value Added Tax2 for the financial year 2005-06, 2006-07, 2007-08 & 2008-09 55,69,829 1,22,03,204 on account of classification of goods at different rate of tax

VI) Service Tax on GTA Services for the period from January 2005 to March 2007 5,28,598 5,28,598

VII) On account of compliance relating to obligations under EPCG licences 4,42,00,783 4,42,00,783

VIII) Third Party claims due to dispute relating to contracts 44,37,479 44,37,479

1 Including amount deposited under protest Rs.39,00,000/- (Previous year Rs.39,00,000/-)

2 Including amount deposited under protest Rs.14,25,815/- (Previous year Rs.48,82,322/-).

2.1.12 Capital commitments not provided for are estimated at Rs.30 Lacs (Previous year Rs.100 Lacs).

2.1.13 Provision for doubtful debts: During the year, the Company has considered debts for Rs.47,09,590/- (Previous year Rs.3,22,29,631/-) as doubtful debts/securities and also has withdrawn Rs.1,83,46,833/- (Previous year Rs.2,67,72,536/-) out of the provisions made in the earlier years for the same and written off as bad debts Rs.61,77,632/- (Previous year Rs.2,36,27,454/-). Further the differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit & Loss for the year and the balance has been carried in the balance sheet:

2.1.14 During the year, considering the non-recoverability of some of the debts, the Company has written of the debts amounting to Rs.45,39,071/- (Previous year Rs.40,78,715/-).

2.1.15 Pursuant to the enactment of the Companies Act 2013, (the 'Act'), the Company has, effective 1st April 2014, reviewed and revised the estimated useful lives of its fixed assets, in accordance to the provisions of Schedule II of the Act and the worked out unabsorbed depreciation, against assets whose useful life has expired till 31st March, 2014, amounting to Rs.6,59,32,277/- has been adjusted with the Surplus in the Statement of Profit & Loss under the head Reserves & Surplus (refer to Note 2.2.4). Further the consequential impact of the same on the depreciation for the year is Rs.44,55,243/- and same has been charged to the Statement of Profit and Loss for the year.

Further, the corresponding effect of the aforesaid unabsorbed depreciation amounting to Rs.6,59,32,277/- has been given in the Note 2.11 under Depreciation - Sales/ Adjustments during the period and break-up of the same is as under: _

2.1.16 The Board of Directors of the Company considers and maintains "Footwear" as the only business segment of the Company.

2.1.17 Basic and Diluted Earning per share: The Basic and diluted earning per share of the Company is as under: -

2.1.18 Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Accounting Standard 18 issued by Institute of

Chartered Accountants of India.

A) Transactions between the Company and related parties and the status of outstanding balances as at 31st March, 2015:

B) Detail of Related Parties and description of relationship:

i) Subsidiary Company:

Liberty Foot Fashion Middle East FZE

ii) Entities where Key Management Personnel/ Relative of Key Management Personnel has significant influence:

Geofin Investments Private Ltd., Liberty

Group Marketing Division, Liberty Enterprises, Liberty Footwear Co., Sanjeev Bansal

Charitable Trust, Liberty Innovative Outfits

Ltd., Little World Constructions Pvt. Ltd.,.

iii) Key Management Personnel:

1) Sh. Adesh Kumar Gupta 2) Sh. Adarsh Gupta 3) Sh. Shammi Bansal 4) Sh. Sunil

Bansal 5) Sh. Adeesh Kumar Gupta 6) Sh. Satish Kumar Goel 7) Sh. Munish Kakra (effective from 29th May, 2014)

iv) Relatives of Key Management Personnel:

S/Sh. Harish Kumar Gupta, Raman Bansal, Vivek Bansal, Anupam Bansal (Brothers of Directors)

Sh. Ayush Bansal, Sh. Manan Bansal, Sh. Pranav Gupta, Sh. Anmol Gupta (Sons of Directors)

Note: Receiving the services from Key Management Personnel and their relatives includes rent and land lease charges.

2.1.19 Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans:

2.1.20 For the current year, Deferred Tax liability has been calculated after considering the cumulative timing differences of Rs.6,38,37,055/- (Previous year Rs.14,27,05,764/-) mainly on account of depreciation.

2.1.21 There are no dues payable to the Investor Education and Protection Fund as at 31st March, 2015.

2.1.22 The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Mar 31, 2014

CORPORATE INFORMATION

Liberty Shoes Ltd is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 3rd September, 1986. The shares of the Company are listed on two stock exchanges in India i.e National Stock Exchange of India [NSE] and BSE Limited (BSE). The Company is engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network.

1.1.1 Terms/Rights attached to Equity Shares

The Company has one class of Equity Shares having a par value of Rs.10/- each. Each shareholder is eligible for one vote per share held in the Company. The dividend proposed by the Board of Directors of the Company, if any, is subject to approval of the members in the ensuing general meeting, except in the case of interim dividend, if declared. In the event of liquidation of the Company, Equity Shareholders shall be entitled to receive the remaining assets, after the distribution to preferred shareholders, if any, in proportion to their shareholding.

1.2.1 In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

1.2.2 The Company has taken various retail stores and warehouses under operating lease arrangements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rentals payables are charged as Rent in note 2.25.

1.2.3 The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2011-12.

1.2.4 During the year, in terms of the renewed agreements dated April 3, 2013 with Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms of the group, for further period of two years from April 1, 2013 onwards, the exclusive use of their manufacturing facilities and fixed assets, trademarks & distribution networks is now available with the Company till March 31, 2015. Further, in conformity with the requisite approvals of the Central Government obtained by the Company in this regard, the Company has paid/provided for franchise fees of Rs.115 Lacs (Previous year Rs.600 Lacs) to LE and Rs.840 Lacs (Previous year Rs.700 Lacs) to LGMD.

Further, considering the development in relation to resolution of long pending dispute amongst the partners of LE and innumerable benefits of unlocking the shareholders value through the acquisition of tangible and intangible assets of LE and LGMD, currently available to the Company under aforesaid arrangements, the Company has proposed the acquisition of the assets from the above firms and is presently working on the modalities to implement the same.

Also, during the year, in terms of the renewed agreement dated April 3, 2013 with Liberty Footwear Co. (LFC), another partnership firm of the group and owner of trademark "LIBERTY", for granting exclusive rights of use of trademark "LIBERTY" to the Company for further period of fifteen years from April 1, 2013 onwards and in conformity with the requisite approvals of the Central Government obtained by the Company in this regard, the Company has paid/provided for trademark license fee of Rs.800 Lacs (Previous year Rs.472.50 Lacs) to LFC.

1.2.5 Interest to others include Rs.18,95,666/- (Previous year Rs.11,50,24-6/-) against short term loan from M/s Geofin Investments Private Ltd @ 12% p.a.

1.2.6 During the year, the Company has capitalized the borrowing cost of Rs.Nil (Previous year Rs.Nil) as part of the cost of the qualifying assets.

1.2.7 The Company has paid the excise duty amounting to Rs.17,11,33,108/- (Previous year Rs.17,80,25,170/-) against the sales executed during the year.

Also, the Company has made the provision of excise duty of Rs.1,53,04,363/- (Previous Year Rs.1,35,31,086/-) against finished goods lying in stocks as on 31st March, 2014 and the difference of two has been recognized separately in the Statement of Profit & Loss.

1.2.9 The registration process of certain portion of land at Libertypuram, Kamal, already in possession with the Company since beginning, is in process of administrative compliances and is expected to be completed shortly.

1.2.10 During the year under consideration, the scheme of amalgamation of M/s Liberty Retail Revolutions Limited, a wholly owned subsidiary of the Company, with the Company has been approved by the Hon''ble High Court of Punjab & Haryana and Hon''ble High Court of Delhi. The Company has completed the necessary formalities to give effect the said amalgamation. Further, in terms of the scheme of amalgamation, the amalgamation has been approved by the Hon''ble High Courts with an appointed date of April 1, 2013, accordingly, the financials presented for the year under consideration includes the financials of the said amalgamated subsidiary as if its operations were under the Company during the year. Accordingly, the previous figures are not comparable to that extent.

As per approved Scheme of Amalgamation, the accounting for the amalgamation has been done as per the method of "Amalgamation in the nature of merger" as defined in the Accounting Standard (AS)-14 as notified under the Companies Accounting Standard Rules, 2006.

1.2.11 The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2014 as Micro, Small or Medium Enterprise. Consequently the amount paid/payable to these parties during the year is nil.

2.2.1 Contingent Liabilities (Amount in Rs.)

Particulars 2013-2014 2012-2013

I) Bank Guarantees issued on behalf of the Company submitted with various 6,74,16,281 4,74,76,991 institutional customers in terms to their orders.

II) Letter of Credits 7,30,36,956 6,49,65,379

III) On account of disallowance of legitimate credit of CENVAT against Excise Duty/ 3,38,75,448 3,38,75,448 Education Cess1 for the period from November 2004 to June 2005, May 2006 to June 2006, financial year 2002-03 and 2004-05. CESTAT, while admitting Company''s appeal, directed to deposit 739 Lacs under protest and has granted stay.

IV) Invoice Funding facility - 2,50,89,315

V) Corporate Guarantee given to bank for securing working capital limits of retail - 10,00,00,000 subsidiary

VI) Income Tax claims disputed by the Company relating to TDS (FY2010-11 ) 3,11,878 - against which appeal filed by the Company

VII) Value Added Tax2 for the financial year 2005-06, 2006-07, 2007-08 & 2008-09 1,22,03,204 1,22,03,204 on account of classification of goods at different rate of tax

VIII) Service Tax on GTA Services for the period from January 2005 to March 2007 5,28,598 5,28,598

IX) On account of compliance relating to EPCG licences. 4,42,00,783 4,42,00,783

X) Third F''arty claims due to dispute relating to contracts 44,37,479 -

1 Including amount deposited under protest 739,00,000/- (Previous year 739,00,000/-) including amount deposited under protest 748,82,322/- (Previous year 748,82,322/-].

2.2.2 Capital commitments not provided for are estimated at 7100 Lacs (Previous year 730 Lacs).

2.2.3 Provision for doubtful debts: During the year, the Company has considered debts for 73,22,29,631/- (Previous year 7Nil) as doubtful debts/securities and also has withdrawn 72,67,72,536/- (Previous year 71,49,64,710/-) out of the provisions made in the earlier years for the same and written off as bad debts 72,36,27,454/- (Previous year 739,27,110/-). Further the differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit 8i Loss for the year and the balance has been carried in the balance sheet:

2.2.4 During the year, considering the non recoverability of some of the debts, the Company has written of the debts amounting to Rs.40,78,715/- (Previous year Rs.22,73,927/-).

2.2.5 Sales/Adjustment in the Gross Block of Fixed Assets amounting to Rs.4,94,68,628/- (Previous year Rs.84,53,380/-) includes sale of surplus Land & Building having book value for Rs.2,07,45,326/- (Previous year Rs.Nil], Machinery/Moulds, on account of replacements, for Rs.93,70,296/- (Previous year Rs.31,74,973/-), Vehicles for Rs.96,99,034/- (Previous year Rs.50,68,826/-), Office Equipments for Rs.4,99,195/- (Previous year Rs.2,09,581] and writing off of the Furniture & Fixtures at few of the retail outlets of the amalgamated Company for Rs.91,54,777/- (Previous year Rs.Nil). The Profit/(Loss) arisen on such sale/adjustments, net of accumulated depreciation, has separately been reflected in Note No. 2.26 as Exceptional Items.

2.2.6 Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Accounting Standard 18 issued by Institute of Chartered Accountants of India.

A) Transactions between the Company and related parties and the status of outstanding balances as at 31s'' March, 20M:

B) Detail of Related Parties and description of relationship:

i) Subsidiary Companies:

Liberty Foot Fashion Middle East FZE, Liberty Retail Revolutions Ltd (Erstwhile)

ii) Entities where Key Management Personnel/ Relative of Key Management Personnel has significant influence:

Geofin Investments Private Ltd., Liberty Group Marketing Division, Liberty Enterprises, Liberty Footwear Co., Sanjeev Bansal Charitable Trust, Liberty Innovative Outfits Ltd., Little World Constructions Pvt. Ltd.,

iii) Key Management Personnel:

1) Sh. Adesh Kumar Gupta 2) Sh. Adarsh Gupta 3) Sh. Shammi Bansal 4) Sh. Sunil Bansal 5) Sh. Adeesh Kumar Gupta 6) Sh. Satish Kumar Goel iv) Relatives of Key Management Personnel: S/Sh. Harish Kumar Gupta, Raman Bansal, Vivek Bansal, Anupam Bansal (Brothers of Directors]

Sh. Ayush Bansal, Sh. Manan Bansal, Sh. Pranav Gupta, Sh. Anmol Gupta (Sons of Directors)

Note: Receiving the services from Key Management Personnel and their relatives includes rent and land lease charges.

2.2.7 Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans:

2.2.8 For the current year, Deferred Tax liability has been calculated after considering the cumulative timing differences of Rs.14,27,05,764/- (Previous year Rs.15,73,09,015/-) mainly on account of depreciation.

2.2.9 There are no dues payable to the Investor Education and Protection Fund as at 31st March, 20U.

2.2.10 During the year ended March 31, 2014, preparation and presentation of financial statements have been made as per the Revised Schedule VI notified under the Companies Act 1956. The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Mar 31, 2013

1.1.1 In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

1.1.2 The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2010-11.

1.1.3 Liberty Enterprises (LE) & Liberty Group Marketing Division (LGMD), the two partnerships firms, having established footwear business, consisting of fixed assets, personnel, trademarks, technical knowhow & distribution network, made available their business exclusively to the Company on franchise basis for the period of 10 years, against payment of the annual franchise fees vide respective agreements dated 31st March, 2003. Liberty Footwear Co. (LFC), another partnership firm and owner of the Trademark "LIBERTY", licensed exclusive rights to the Company for use of the Trademark "LIBERTY" on payment of Annual License Fees vide agreement dated 31s* March, 2003. The aforesaid agreements have since expired on 31st March, 2013. Few of the Directors of the Company were interested as Partners in the said Partnership Firm.

The Company, after analyzing the benefits and its requirements for the arrangements, has entered into agreement(s) with LGMD for use of their fixed assets for manufacturing of footwear, registered Trademarks and domestic sales network for sale of footwear for a period of 2 (two) years and with LE for use of their fixed assets and export sales network for further period of 2 (Two) years and with LFC for use of trademark "LIBERTY" on exclusive basis for further period of 15 (Fifteen) years effective from 1st April, 2013 against payment of minimum guaranteed obligation with requisite approval from the Central Government in terms of the applicable provisions of the Companies Act, 1956. The approval stipulates that the Company should seek post facto approval of the shareholders of the Company in General Meeting and therefore, the enabling resolutions seeking their approval with explanatory statements have been placed in the notice of the ensuing Annual General Meeting.

With regard to the dispute amongst the partners of LE relating to the earlier agreement, the Company has obtained expert legal opinion confirming the validity of the above arrangements executed by the Company.

During the year under consideration, in terms of the agreements and in conformity with the requisite approvals of the Central Government, the Company has made the payments (including provisions), after adjustments of the securities paid to the respective firms, amounting to X6,00,00,000/- (Previous year Rs.6,00,00,000/-), Rs.7,00,00,000/- (Previous year Rs.7,00,00,000/-) and Rs.4,72,50,000/- (Previous year Rs.4,72,50,000/-) respectively.

1.1.4 Interest to others include Rs.11,50,246/- (Previous year Rs.20,30,788/-) against short term loan @ 12% p.a. from M/s Geofin Investments Private Ltd.

1.1.5 During the year, the Company has capitalized the borrowing cost of Rs.Nil (Previous year XH\) as part of the cost of the qualifying assets.

1.1.6 The Company has paid the excise duty amounting to Rs.15,20,64,170/- (Previous year Rs.13,94,30,990/-) against the sales executed during the year.

Also, the Company has made the provision of excise duty of Rs.1,35,31,086/- (Previous Year Rs.1,80,55,539/-) against finished goods lying in stocks as on 31st March, 2013 and the difference of two has been recognized separately in the Statement of Profit & Loss.

1.1.7 The registration relating to certain portion of land at Libertypuram, Karnal are still in process because of some administrative compliance but the possession of the same is with the Company since beginning. Further the sellers have also given their confirmation ratifying the earlier sale process.

1.1.8 During the year under consideration, the Company has increased its stake to 100% (previous year 93.86%) in Liberty Retail Revolutions Ltd (LRRL), its retail subsidiary, by investing Rs.980.77 Lacs (Previous year Rs.NIL). As reported earlier also and in pursuance of the decision taken to amalgamate LRRL with the Company, the Board of Directors have approved the scheme of Amalgamation of its Wholly Owned Retail Subsidiary LRRL with the Company to be effective from 1st April, 2013 subject to sanction from the respective Hon''ble High Court(s) and approval from the Members of the Company. The necessaries formalities as required to effect the above said amalgamation have already been initiated by the Company. The Scheme is consistent with the objective of consolidating the business leading to operational synergies and efficiencies.

1.1.9 The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2013 as Micro, Small or Medium Enterprise. Consequently the amount paid/payable to these parties during the year is nil.

1.1.10 Capital commitments not provided for are estimated at Rs.30 Lacs (Previous year Rs.20 Lacs).

1.1.11 Provision for doubtful debts: During the year, the Company has considered debts for Rs.Nil (Previous year Rs.3,13,51,083/-) as doubtful debts/securities and also has withdrawn Rs.72,75,172/- (Previous year Rs.3,24,29,334/-) out of the provisions made in the earlier years for the same and written off as bad debts Rs.39,27,110/- (Previous year Rs.3,24,29,334/-). Further the differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to Statement of Profit & Loss for the year and the balance has been carried in the balance sheet:

1.1.12 During the year, considering the non recoverability of some of the debts, the Company has written of the debts amounting to Rs.22,73,927/- (Previous year Rs.47,27,466/-).

1.1.13 The Board of Directors of the Company considers and maintains "Footwear" as the only business segment of the Company.

1.1.14 Basic and Diluted Earning per share:

The Basic and diluted earning per share of the Company is as under: -

1.1.15 Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Accounting Standard 18 issued by the Institute of Chartered Accountants of India.

A) Transactions between the Company and related parties and the status of outstanding balances as at 31" March, 2013:

1.1.16 Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with Life Insurance

Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans:

1.1.17 For the current year Deferred Tax liability has been calculated after considering the cumulative timing differences of Rs.1 5,73,09,015/- (Previous year Rs.15,56,62,180/-) on account of depreciation.

1.1.18 There are no dues payable to the '' Investor Education and Protection Fund asat3rMarch, 2013.

1.1.19 During the year ended March 31, 2013, preparation and presentation of financial statements have been made as per the Revised Schedule VI notified under the Companies Act 1956. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Mar 31, 2012

1. In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

2. The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2009-2010.

3. The Company in the year 2003, entered into an agreement with Liberty Enterprises and Liberty Group Marketing Division for taking over their footwear business on franchise basis and with Liberty Footwear Co. for use of "Liberty" trademark on exclusive basis for an initial period of 7 years. In terms of the agreements, the same have been automatically renewed for further period of 3 years. The footwear business as defined in the agreement include Fixed Assets, intellectual Properties, Know-how and Distribution Network etc. of the two Partnership Firms. Under the terms of the agreements, no ownership of assets, tangible or intangible, has been transferred to the Company. During the year, in terms of the agreements and in conformity with the requisite approvals of the Central Govt, the Company has made the payments (including provisions) amounting to Rs.6,00,00,000/- (Previous year Rs.6,00,00,000), Rs.7,00,00,000/- (Previous year Rs.7,00,00,000/-) and Rs.4,72,50,000/- (Previous year Rs.3,90,00,000/-) respectively. In terms of the respective agreements, the same have been renewed for the further period of 3 years.

The learned arbitrator while deciding the dispute amongst the Partners of Liberty Enterprises as regards to the aforesaid franchise agreement, corroborated the Company's stand by holding that the arbitrational verdict will not be having any impact on the Company as regards to such arrangements, being not a party to the dispute. However, the Company, to avoid any legal consequence at any point of time and keep its rights further protected, has filed its objections against the arbitrational award and the same is pending for adjudication with the Courts at Karnal.

Also the Company, in conformity of the respective agreement(s), has fulfilled its entire obligation including financial obligations. In view of the enduring benefits and duly considering the current periodicity of the ongoing agreements, the parties are exploring the option of renewal of the agreements on such terms and conditions as may be agreed subject to the necessary compliances.

4. Interest to others include, Rs.20,30,788/- (Previous year Rs.56,46,544/-) against short term loan @ 12% p.a. tram M/s Geofin Investments Pvt. Ltd.

5. The Company in the year 2006 has executed Corporate Guarantee of Rs.600 Lacs tor securing the credit facilities to its Joint Venture set up for the footwear retailing. During the year, due to the inability of the Joint Venture, the Company, to sustain its credit worthiness & protect its standing, has settled the bank outstanding by paying Rs. 319.46 Lacs for release of the said Corporate Guarantee. This amount paid has been charged to statement of Profit & Loss for the year, considering it as an exceptional item.

6. During the year, the Company has capitalized the borrowing cost of Rs.Nil (Previous year Rs.Nil) as part of the cost of the qualifying assets.

7. The Company has paid the excise duty amounting to Rs.13,94,30,990/- (Previous year Rs.8,35,99,748/-) against the sales executed during the year.

Also, the Company has made the provision of excise duty of n ,80,55,539/- (Previous year n,26,42,294/-) against finished goods lying in stocks as on 31st March, 2012 and the difference of two has been recognized separately in the Profit & Loss Account.

8. Under the Focus Product Scheme of Director General of Foreign Trade, Government of India, during the year, the Company has received an incentive of Rs.75,58,831/- (Previous year Rs.32,53,942/-) for foreign exchange realized against exports made during the financial years 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11. Further, due to change in its accounting policy, the Company has accrued an incentive for Rs.67,30,072/- (Previous year Nil) under the said scheme and the profits for the year are higher to that extent.

9. The Company is in process of getting the registration, relating to the portion of the land situated at Liberty puram measuring 4.34 acres, done for which the other formalities have already been completed including taking the possession of the said land.

10. The Board of directors has approved in principle the Company's proposal to amalgamate Liberty Retail Revolutions Ltd. (LRRL), a retail subsidiary, with the Company.

11. The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2012 as Micro, Small or Medium Enterprise. Consequently, the amount paid/payable to these parties during the year is nil.

12. Contingent Liabilities

(Amount in Rs.)

2011-12 2010-11

I) Bank Guarantees issued on behalf of the Company submitted with various 3,34,78,945 7,50,53,061 institutional customers in terms to their orders.

II) Letter of Credits for Import of Materials 4,51,02,780 -

III) On account of disallowance of legitimate credit of CENVAT against Excise Duty/ 3,70,27,048 3,55,81,366 Education Cess1 for the period from November 2004 to June 2005, May 2006 to June 2006, Financial year 2002-03 and 2004-05. CESTAT while admitting Company's appeal directed to deposit Rs.39 Lacs under protest and has granted stay.

IV) Invoice Funding facility 2,50,27,539

V) Corporate Guarantees given to banks for securing working capital limits of retail 10,00,00,000 16,00,00,000 subsidiary and joint venture company2

VI) Income Tax on account of routine assessment for the assessment year the 35,03,426 35,03,426 assessment years 1998-99 & 2003-04

VII) Value Added Tax3 for the financial year 2005-06, 2006-07, 2007-08, 82,81,568 1,48,69,568 2008-09 & 2009-10 on account of classification of goods at different rate of tax

VIII) Service Tax on GTA Services for the period from January 2005 to March 2007 5,28,598 5,28,598

IX) On Account of some administrative compliance relating to EPCG licences. 4,42,00,783 4,42,00,783

' Including amount deposited under protest Rs.39,00,000/- (Previous year Rs.39,00,000/-)

2 Includes the corporate guarantee for Rs.Nil (Previous year Rs.6,00,00,000/-) given on behalf of erstwhile joint venture company.

3 Including amount deposited under protest Rs.41,37,554/- (Previous year Rs.1,07,25,554/-).

13. Capital commitments not provided for are estimated at Rs.20 Lacs (Previous year Rs.l50 Lacs).

14. Provision for doubtful debts: During the year, the Company has considered debts for Rs.3,13,51,083/- (Previous year Rs.Nil) as doubtful debts/securities and also has withdrawn Rs.3,24,29,334/- (Previous year Rs.Nil) out of the provisions made in the earlier years for the same and written off as bad debts (Previous year Rs.Nil). Further, the differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to the Statement of Profit & Loss for the year and the balance has been carried in the balance sheet:

15. During the year, considering the non-recoverability of some of the debts, the Company has written of the debts amounting to Rs.47,27,466/- (Previous year Rs.2,90,21,708/-).

16. The Board of Directors of the Company considers and maintains "Footwear" as the only business segment of the Company.

17. Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Accounting Standard 18 issued by the Institute of Chartered Accountants of India. A) Transactions between the Company and related parties and the status of outstanding balances as at 31st March, 2012:

B) Detail of Related Parties and description of relationship:

i) Subsidiary Companies:

Liberty Retail Revolutions Limited, Liberty Foot Fashion Middle East FZE ii) Entities where Key Management Personnel/Relative of Key Management Personnel has significant influence:

Geofin Investments Private Ltd., Liberty Group Marketing Division, Liberty Enterprises, Liberty

Footwear Co., Sanjeev Bansal Charitable Trust, Liberty Innovative Outfits Ltd.

iii) Key Management Personnel:

18. Detail of Employee Benefits - Gratuity

The Company has a defined gratuity plan (Defined Benefit). Every employee, on completion of continuous service of five years or more with the Company, is entitled to get the gratuity on 15 days salary, on the basis of last drawn salary, for each completed year of service. The scheme is funded with the Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy.

The following table summarizes the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet for the respective plans:

19. For the current year, Deferred Tax liability (Previous year Deferred Tax asset) has been calculated after considering the cumulative timing differences of Rs.15,56,62,180/- (Previous year Rs.16,28,92,724/-) on account of depreciation.

20. There are no dues payable to the Investor Education and Protection Fund as at 31st March, 2012.

21. During the year ended March 31, 2012, the Revised Schedule VI notified under the Companies Act 1956 has become applicable for preparation and presentation of financial statements. The preparation of financial statements based on the Revised Schedule VI does not impact the recognition and measurement principles followed for preparation of the financial statements. However, it has significant impact on the presentation and disclosures made in the financial statements. The Company has regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year. The current year and previous year figures have been rounded off to the nearest rupees.

Mar 31, 2010

During the year no remuneration has been paid to Non-Executive Directors except for the sitting fees of Rs 45,000/- (Previous Year Rs 52,500/-).

ii) In the opinion of the Board and to the best of its knowledge, the value of realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they have been stated in the Balance Sheet.

iii) The assessment of the Company in respect of Income Tax & Wealth Tax is completed up to Assessment Year 2007-2008.

iv) The Company in the year 2003, entered into an agreement with Liberty Enterprises and Liberty Group Marketing Division for taking over their footwear business on franchise basis and with Liberty Footwear Co. for use of "Liberty" trademark on exclusive basis for an initial period of 7 years with automatic extension for further period of 3 years/with mutual consent of the parties respectively. The footwear business as defined in the agreement include Fixed Assets, intellectual Properties, Know-how and Distribution Network etc. of the two Partnership Firms. Under the terms of the agreements, no ownership of assets, tangible or intangible, has been transferred to the Company. During the year, in terms of the agreements and in conformity with the requisite approvals of the Central Govt, the Company has made the payments (including provisions) amounting to Rs 6,00,00,000/- (Previous year Rs 6,00,00,000), Rs 7,00,00,000/- (Previous year Rs 7,00,00,000/-) and Rs 3,37,50,000/- (Previous year Rs 3,22,50,000/-) respectively. In terms of the respective agreements, the same have been renewed for the further period of 3 years. Further while deciding on the dispute amongst the Partners of Liberty Enterprises as regards to the aforesaid franchise agreement, the learned arbitrator confirmed the Companys stand by holding that the arbitrational verdict will not be having any impact on the Company as regards to such arrangements being not a party to the dispute. Moreover Liberty Enterprises in addition to their confirmation to the agreement has also informed that on certain legal issues its affected partners are filing their objections before the appropriate authority and seeking order for setting aside of such award. Considering the same, the Company is also contemplating legal opinion for taking appropriate action, if required.

v) Interest to others include, Rs 93,14,647/- (Previous year Rs 1,01,22,198/-) against short term loan @ 12% p.a. from M/s Geofin Investments Pvt. Ltd.

vi) During the year the Company has capitalized the borrowing cost of Rs Nil (Previous year Rs Nil) as part of the cost of the qualifying assets.

vii) The Company has paid the excise duty amounting to Rs 5,44,61,762/- (Previous year Rs 7,08,28,579/-) against the sales executed during the year.

Also the Company has made the provision of excise duty of Rs 1,22,50,886/- (Previous Year Rs 1,02,48,087/-) against finished goods lying in stocks as on 31st March, 2010 and the difference

of two has been recognised separately in the Profit & Loss Account.

viii) Fixed Deposit receipts (including accrued interest) for value of Rs 3,07,37,476/- (Previous year Rs 4,03,82,573/-), appearing under head Cash & Bank Balances, are under lien with Banks/ respective authorities for issuance of bank guarantees/ letters of credits and as earnest money.

ix) Under the Focus Product Scheme of Director General of Foreign Trade, Government of India, during the year, the Company has received an incentive of Rs 51,99,800/- (Previous year Rs 46,42,225/-) for foreign exchange realized against exports made during the financial years 2007-08, 2008-09 & 2009-10 and the profits of the Company for the year are higher to that extent.

x) Till date the Company, out of the leasehold land comprising 42.29 acres with validity till 12th December 2008, has purchased 31.36 acres of land at Libertypuram. Out of the purchased land, 27.02 acres of land have been got registered in the name of the Company and the Company is in process of getting the necessary compliances done for the balance. The validity of the lease deed for 0.75 acres of land, belonging to promoter, has been got extended for mutually agreed terms.

xi) To further strengthen the organized retailing and to promote its own retail initiatives directly and through its Subsidiary Company M/s Liberty Retail Revolutions Ltd., during the year, the Company under its retail sales promotion policy has borne the cost of retail stores on account of rental and maintenance charges by suitably reducing the retailers margins against its sales. The same have been booked under the account head Sales Promotion Expenses.

xii) The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the Micro, Small & Medium Enterprise Development Act, 2006) claiming their status as on 31st March, 2010 as Micro, Small or Medium Enterprise. Consequently the amount paid/payable to these parties during the year is nil.

xiii) Contingent Liabilities

(Amount in Rs)

Particulars 2009-10 2008-09

I) Bank Guarantees issued on behalf of the Company submitted with various 2,31,68,160 1,96,86,114 institutional customers in terms of their orders.

II) Excise Duty1 for the financial year 1994-95 &1995-96. CESTAT has decided this 2,78,31,534 2,78,31,534 particular matter in favour of the Company but the department has preferred their appeal with the Honble Supreme Court.

III) On account of disallowance of legitimate credit of CENVAT against Excise Duty/ 3,55,81,366 3,55,06,657 Education Cess for the period from November 2004 to June 2005, May 2006 to June 2006, Financial year 2002-03 and 2004-05. CESTAT while admitting Companys appeal directed to deposit Rs 39.00 Lacs under protest and has granted stay.

IV) Service Tax for Financial year 2002-03 on service received from outside India prior to 1,24,536 - the applicability of the related law.

V) Invoice Funding facility. 4,43,63,581 -

VI) Counter Guarantee given to banks for securing working capital limits of retail 10,88,00,000 14,80,00,000 subsidiary and joint venture Company2.

VII) Income Tax on account of routine assessment for the assessment 35,03,426 55,68,874 years 1998-99,2003-04.

VIII) Income Tax for the assessment year 2002-03, 2003-04 and 2004-05 on account of 17,86,599 17,86,599 reduction in amount of deduction u/s 80HHC in terms of Taxation Law Amendment Bill, 2005.

IX) Value Added Tax3 for the financial year 2005-06, 2006-07 and 2007-08 on account 2,96,02,499 2,96,02,499 of classification of goods at different rate of tax.

X) Service Tax4 penalty for non- payment of service tax on commission paid against - 1,36,446 exports for the period for which the Company was not legally liable to pay under the provisions of the applicable law.

XI) Due to some administrative compliance relating to EPCG licenses for which 4,42,00,783 4,42,00,783 the Company has fulfilled its export obligation.

On the basis of indemnifying clause under the agreement with the two Partnership Firms whose business has been available to the Company on franchise basis, the Company has given its undertaking to the Excise Department to pay the liabilities, if any arises, relating to the period prior to the date of the agreement.

includes the corporate guarantee for Rs 5,88,00,000/- (Previous year Rs9,80,00,000/-) given on behalf of joint venture company. However, the Company is in process of getting the same vacated.

3Including amount deposited under protest Rs60,90,487/- (Previous year Rs 55,90,487/-).

Including amount deposited under protest Rs Nil (Previous year Rs 1,36,446/-)

xiv) Capital commitments not provided for are estimated at Rs Nil (Previous year Rs 50/- Lacs).

xv) Provision for doubtful debts: During the year the Company has considered debts for Rs 3,15,58,132/- (Previous year Rs3,55,20,855/-) as doubtful debts and made the provision accordingly. Also during the year considering the un-recoverability of some of the doubtful debts, the Company has withdrawn Rs 3,03,37,030/- (Previous year Nil) out of the provisions made in the earlier years for the same and written off the bad debts (net) for Rs 2,96,31,364/-. Differential of the provision made and amount withdrawn during the year, detailed as under, has been charged to Profit & Loss Account for the year and the balance has been carried in the balance sheet:

xvi) The Board of Directors of the Company considers and maintains "Footwear" as the only business segment of the Company.

xviii) Related Party Transactions

The Company has made the following transactions with related parties as defined under the provisions of Accounting Standard 18 issued by Institute of Chartered Accountants of India. A) Transactions between the Company and related parties and the status of outstanding balances as at 31st March, 2010:

xx) For the current year Deferred Tax asset and liability has been calculated after considering the timing differences of Rs 1,66,38,968/- (Previous year Rs1,66,36,198/-) and Rs Nil (Previous year Rs 2,01,800/-) respectively on account of depreciation and expenses written off.

xxi) There are no dues payable to the Investor Education and Protection Fund as at 31 st March, 2010.

xxii) Previous year figures have been regrouped/ re-arranged wherever necessary. The current year and previous year figures have been rounded off to the nearest rupees.

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