Directors Report of Liberty Shoes Ltd.

Mar 31, 2023

The Directors are presenting the 37th Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2023.

Financial Highlights:

The highlights of the financial statements are as under:-

(Rs.in Lakh)
Particulars	2022-23	2021-22
Gross Sales	65,432.70	48,781.68
Add: Other Income	17.42	28.28
Revenue from Operations and Other Income	65,450.12	48,809.96
Profit before Tax Expense (PBT)	1,785.48	397.95
Less: Tax Expenses	494.35	173.65
Net Profit for the year (NP)	1,291.13	224.29
Other Comprehensive Income/(Loss)	51.47	38.43
Total Comprehensive Income	1,342.60	262.72

Review of the operations of the Company:

During the financial year 2022-23, your Company achieved its highest-ever turnover in its history, with total revenue reaching to '' 65,432.70 Lakh as against '' 48,781.68 Lakh during the previous year. This achievement reflects a 34% increase compared to the previous year. Furthermore, your Company''s profitability also soared, with net profits reaching to '' 1,291.93 Lakh, marking a 476% increase from the previous year of '' 224.29 Lakhs. These financial milestones are purely a demonstration of our dedication, thought out plans and the management commitment for continuous improvement.

The Financial results have to be observed keeping in view the fact that the year under consideration has been the first full year of operations without any disruption of impact of COVID-19 which has impacted company''s operations in the last 2/3 years.

E-commerce ( on line portals) played a pivotal role in our success, contributing 15% of our total revenue during the financial year. This channel''s growth underscores our commitment to digital transformation and meeting customer preferences of the modern trade. We also strengthened our retail footprint by opening of 55 new stores, reaching 425 exclusive showrooms nationwide including COCO stores. The first half of the financial year 2022-23 saw a surge in pent-up demand across our industry wherein opening

of schools, institutions and offices compelled the consumers to revive their need of essential items like footwear and other related products. Your Company responded promptly to meet this demand, adapting our operations and strategies to capitalize on these opportunities. This resilience and adaptability have been helpful for our continuing growth trajectory in 2nd half as well. Our focus on sound financial management resulted in reducing receivables and the efficient utilization of working capital which

contributed to a healthy free cash flow position. This financial strength allows us to explore new growth avenues and also comprehend our investment towards long-term sustainability of the Company.

In line with our commitment to innovation and enhanced customer satisfaction, your Company during the year under consideration has introduced its new range of premium casual footwear with novel identity of LEAP7X which has been very well acknowledged by the consumers. To augment the promotion of this product category, the Company strategically engaged two eminent Bollywood celebrities, Ayushman Khurana and Rakul Preet Singh, as Brand Ambassadors for our athleisure brand, Leap7X. Considering the athleisure-centric nature of the brand, the association with these Bollywood stars perfectly aligns with the message conveyed in Leap7X''s latest campaign, "Sitaare Aise Hi Nahi Bante Mehnat

Karni Padti Hai AM To PM." Their endorsement creates a compelling connection between the brand and the essence of the campaign, reflecting the contemporary and active lifestyle embraced by Leap7X. Their presence and influence bring credibility and appeal to the brand, further enhancing Company''s market position and customer engagement.

During the financial year 2022-23, to enhance our brand presence and customer engagement, we allocated substantial resources to marketing activities and incurred approx. '' 25 Crores as against '' 5 Crores (approx.) during the previous year .The said advertising expenses comprised almost 30% value done through use of non cash mode against clearance of slow moving stocks as part of strategy of promotions and also reduction of stocks. These efforts have yielded positive results, strengthening our market position and customer loyalty.

Liberty ,as members are aware, has always been perceived as Innovative brand and continuing with the same approach has recently introduced new technology of NITPRO to further maintain our competitive edge and staying at the forefront. Your Company during the year also successfully upgraded its proven ERP by implementing the SAP S/4 HANA system, (cloud based) for streamlining its operations and also enhancing efficiency across the organization. This technology upgrade positions us for greater agility and adaptability in the ever-evolving business landscape.

Your Director are of the opinion that Footwear Industry per se has enormous potential to grow in future and Liberty is all set to exploit that potential.

Credit Rating:

During the year under review, CARE Ratings Limited, a leading rating agency, has assigned its Ratings CARE BBB ; (Triple B Plus) in respect of Long Term banking facilities (comprising Term Loan and Working Capital fund based facilities) and CARE "A2" ("A" Two) in respect of Short Term banking facilities (comprising non fund based facilities) sanctioned by the Banks to the Company. According to the rating given based on Company''s improved liquidity position ,the outlook on the Long Term rating has been assigned stable.

Subsidiary Company, their Performance & Consolidated financial statement:

The Wholly Owned Subsidiary (WOS) in the Middle East has already been discontinued by the Company, as previously announced. No financial statements for the year under review were required to be filed and submitted, as required by Section 129 of the Companies Act, 2013, as this WOS ceased to exist as of 2018.

Appropriations:

Dividend

Since your Company is not among top 1000 listed Companies based on market capitalization (calculated as on 31st March, 2023), therefore it is not having dividend distribution policy as provided under Regulation 43 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (as amended) herein after referred as "Listing Regulations" in this report). However, your Company will adopt the same as and when it is applicable on it.

The Board considering the Company''s performance and financial position for the year under review, approved and paid Interim dividend at the rate of 25% (Rs. 2.50 per equity share) on each fully paid-up equity share of Rs. 10/-. The total outflow on account of Interim Dividend from the company''s profits for the financial year that ended on 31st March, 2023 was Rs. 4.26 Cr.(inclusive of applicable T.D.S.). The Interim dividend was paid to the members whose names were listed in the Register of Members as of Friday, September 23, 2022 i.e, which was the Record Date for the purpose of payment of interim dividend.

Transfer to Reserves

Your Directors proposed to transfer '' NIL (Previous Year '' NIL) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of '' 1342.60 Lakh (Previous Year '' 262.72 Lakh) has been proposed to be retained in the Profit & Loss Account of the Company.

Transfer to Investor Education and Protection Fund

In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)

Rules, 2016 ("IEPF Rules") as amended from time to time, a sum of '' 3.48 Lakh for FY 2014-15 (Final Dividend) has been deposited into the specified bank account of the IEPF, Government of India, towards unclaimed/unpaid dividend amount for the financial year ended March 31, 2015.

As per the said Rules, the corresponding equity shares in respect of which Dividend remains unclaimed/ unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, your Company has transferred 30,561 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.

Employees Stock Option Scheme(s)

During the year ended 31st March, 2023, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Nomination and Remuneration Policy

Your Board of Directors, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for identifying and recommending the selection and appointment of Directors and KMPs of the Company and remuneration to Directors, KMPs and other employees. The contents of the Policy and evaluation criteria have been stated in the Corporate Governance Report. The revised Nomination and Remuneration Policy is set out in Annexure-I of this Report. The Policy is also available on the website of the Company i.e. www.libertyshoes.com.

Policy on Prevention of Insider Trading

Your Company has adopted a code of Conduct for Prevention of Insider Trading with a view to regulate trading in Equity Shares of the Company by the Promoters, Directors, Employees, designated persons and other connected persons. The said Code of Conduct is available on the website of the Company at www.libertyshoes.com. The Code requires preclearance for dealing in Company''s shares and prohibits purchase or sale of shares in your Company by the Promoters, Directors, Employees, designated persons and other connected persons while they are in possession of unpublished price sensitive

information and also during the period when the Trading Window remains closed.

Familiarization Program

In order to encourage active participation of Independent Directors and in order to understand the business environment, your Company has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies including significant aspects of the Industry and its future outlook. Once appointed, the Non Executive & independent Directors undergo the familiarization program of the Company. The Non executive & independent Directors are also provided with financial results, internal audit findings and other specific documents as sought by them from time to time. They are also made aware of the various policies and code of conduct and business ethics adopted by the Board. Details of familiarization programs extended to the Non Executive & Independent Directors during the year under consideration are disclosed on the Company website at www.libertyshoes.com.

Risk Management Policy & Risk Management

The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk. In line with the provisions of Section 134 (3) (n) of the Companies Act, 2013, the Company has developed a Risk Management Policy to build and establish the process and procedure for Identifying, assessing, quantifying, minimizing, mitigating and managing the associated risk at early stage. Policy is aimed to develop an approach to make assessment and management of the risks in financial, operational and project based areas in timely manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand value through strategic control and operational policies and to enable compliance with appropriate regulations wherever

applicable, through the adoption of best practices. The Board of Directors of the Company assesses several type of risks which include Business Environment Risks, Strategic Business Risks and Operational Risks etc. The Board of Directors periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through properly defined networks. Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organization have been identified. However there are other risks against which adequate mitigation plans are prepared.

The Risk Management policy is available on the Company''s website of the Company athttp:// investor.libertyshoes.com/doc/Risk_Management_ Policy.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Regulation 22 of Listing Regulations, your Company has an effective mechanism of reporting illegal or unethical behavior. The Company has a Whistle Blower Policy (vigil mechanism) wherein the directors, employees, consultants and contractors are free to report violations of laws, rules and regulations or unethical conducts, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy to the nodal officer. The mechanism followed is appropriately communicated within the Company across all levels and has been posted on the Notice Board of the Company. The confidentiality of those reporting violations etc. is maintained and they are not subjected to any discriminatory practice. The concern can be reported by sending an e-mail message at the dedicated address viz. ethicscounsellors@ libertyshoes.com. Individuals can also raise their concerns directly to the CEO or the Chairman of the Audit Committee of the Company. Any allegation falling within the scope of the concerns are identified, investigated and dealt with appropriately. The Audit Committee periodically reviews the functioning of this mechanism. The Vigil mechanism established in the

Company provides adequate safeguards against victimization of director(s) or employee(s) or any other person who avail the mechanism. During the year, no personnel of the Company was denied access to the Audit Committee. The details of establishment of Vigil mechanism/Whistle Blower Policy of the Company are available at the website of the Company viz. www.libertyshoes.com.

Non-applicability of Maintenance of Cost Records:

The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and Rules made there under with respect to the Company''s nature of business.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

The Company has not accepted/renewed any public deposits and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet.

Board of Directors and Key Managerial Personnel:

Re-appointment of Directors to retire by rotation

Sh. Adish Kumar Gupta & Sh. Ashok Kumar, Directors of the Company will be retiring by rotation at the 37th Annual General Meeting in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible, have offered themselves for the re-appointment at the 37th Annual General Meeting.

Appointment(s) and Cessation of office of Directors

Appointment(s)

(a) The members at the 36th Annual General Meeting held on 30th September, 2022 have approved the appointment of Sh. Gautam Baid (DIN: 00021400) as an Independent Directors of the Company for consecutive term effective from 01st April, 2022 to 28thSeptember, 2024.

(b) On the basis of recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held

on 11th August, 2023 have approved the appointment of Sh. Piyush Dixit (DIN: 03514223) and Sh. Anand Das Mundhra (DIN: 00167418) as Additional Directors as well as Independent Directors of the Company for a first term of 3 years commencing from 11th August, 2023 to 10th August, 2026 subject to the approval of the members in their forthcoming

Annual General Meeting. Accordingly, their candidature(s) along with resolution(s) are being placed in the ensuing Annual General Meeting for appointment as an Independent Director of the Company as above.

Brief Profile of above Directors, nature of their expertise in specific functional areas and names of Companies in which they hold directorship/ chairmanships between directors inter se as stipulated under Companies Act, 2013, Listing Regulations and Secretarial Standards, is provided in the Annexure A to the Notice

Cessation of office of Director:

After closure of financial year, 2022-23, due to pre-occupations, Sh. Arvind Bali Kumar and Sh. Sanjay Bhatia, Independent Directors have tendered resignation from the position of Directorship of the company with effect from 24th May, 2023. Besides above, there were no other reasons for tendering of their resignations. The Board of Directors of the Company in their meeting held on 30th May, 2023 have placed on record appreciation for the contribution made by the above Directors during their respective tenure(s).

Cessation of Chief Executive officer (CEO)

Sh. Adesh Gupta has ceased to be a Chief Executive Officer of the Company w.e.f. 5th September, 2023 as per the decision of the Board of Directors of the Company taken in their meeting held on this date.

Key Managerial Personnel The following persons are the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013-

Sh.Adesh Kumar Gupta	- Executive Director
Sh. Shammi Bansal	- Executive Director
Sh. Sunil Bansal	- Executive Director
Sh. Adish Kumar Gupta	- Executive Director
Sh. Ashok Kumar	- Executive Director
Sh. Munish Kakra	- CFO & Company Secretary

Committees of the Board

The Company''s Board has constituted the following Committees:

1. Audit Committee

2. Management Committee

3. Stakeholders Relationship Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

The detail of terms of reference of the Committees, Committee composition, meetings held during the year and attendance at the meetings of the Committees are provided in the Corporate Governance Report. Number of meetings of the board Six meetings of the board were held during the year. The detail of the composition, board meetings held during the year and attendance at the meetings are provided in Corporate Governance Report. The maximum time gap between two meetings did not exceed 120 days.

Annual Evaluation of Directors and Board as a whole

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board is required to monitor and review the Board evaluation framework. In line with the Corporate Governance Guidelines, the Annual Performance Evaluation is conducted for all members as well as the working of the Board and its Committees. This evaluation is with specific focus on the performance and effective functioning of the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The evaluation process also considers the time spent by each of the Board Members, core competencies, personal characteristics, accomplishment of specific

responsibilities and expertise. In addition, the Chairman is also evaluated on the key aspects of his role. The Board evaluation is conducted through questionnaire having qualitative parameters and feedback based on ratings. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The outcome of the Board evaluation for the financial year under consideration was discussed by the Nomination and Remuneration Committee and Board at their respective meeting held on 13th February, 2023, excluding the director being evaluated.

During the year under review, the Company has complied with all the criteria of Evaluation as evisaged in the SEBI Circular on "Guidance Note on Board Evaluation".

In lines with the provisions of the Companies Act, 2013 and Listing Regulations, separate meeting of the Independent Directors of the Company was held on 30th January, 2023 in the absence of non-independent directors and members of management inter alia to evaluate the performance of the non-Independent Directors, Board as a whole of the Company, its committees, Chairman and to assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

Attributes, Qualifications & Independence of Directors and their appointment

The criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules there under, both in respect of Independent Directors and other Directors as applicable, has earlier been approved by the Nomination and Remuneration Committee during the financial year 2015-16 (amended from time to time). The Policy of the Company also provides that NonExecutive Independent Directors be drawn from amongst eminent professionals with experience in business/finance/law/public administration & enterprises. The Board Diversity Policy of the Company requires the Board to have balance of skills, experience and diversity of perspectives appropriate to the Company. Directors are appointed/re-appointed with the approval of the Members for a shorter period say, two to five years only. All Directors, other than Independent Directors, are liable to retire by rotation and are eligible for re-election in terms of the provisions of Articles of Association. The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribe under section 149 of the Companies, Act, 2013 and Regulation 16 of Listing Regulations.

The Nomination and Remuneration Policy as approved by the Board of Directors of the Company has been attached to this report and also accessible on the website of the Company at www.libertyshoes.com

Material changes and commitments affecting financial position between end of the financial year and date of report

As per the provisions of Section 134(3) (1) of the Companies Act, 2013, no material changes or commitments affecting the financial position have occurred between the end of financial year of the Company to which the financial statements relates to the date of the report.

Change in the nature of Business, if any

There was no change in the nature of business of the Company during the year under review.

Statutory Disclosures

Your Directors state that there being no transactions with respect to following items during the year under review, no disclosure or reporting is required in respect of the same.

1. Deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of your Company under any scheme

4. No settlements have been done with banks or financial institutions.

Internal financial control systems and their adequacy

Liberty''s internal financial controls are adequate and operate effectively and ensure orderly and efficient

conduct of its business including adherence to its policies, safeguard its assets, prevent and detect frauds and errors, maintain accuracy and completeness of its accounting records and further enable it in timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. However, the Company has observed few instances of deviation from the existing Corporate Governance guidelines and immediately coming the same in to information of Board/Management Committee, the necessary remedial measure has been taken including action against the concerned.

The Company has in place a strong and independent Internal Audit Department which is responsible for assessing and improving the effectiveness of internal financial control and governance. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee. The information has been provided in the Management Discussion and Analysis Report in detailed manner.

Declaration by Independent Directors

The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 25(8) of the Listing Regulations and there is no change in the status of their independence and have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair their ability to discharge their duties. The Board of Directors of the Company also confirms that the Independent Directors also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended) and on the basis of declarations submitted by the Independent Directors with the Company the Board of Directors is having positive outlook towards the integrity and expertise of the Independent Directors.

The Independent Directors of the Company had undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs (IICA) in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014 and have registered themselves with the Independent Director''s databank as required under the above provisions. Furthermore, they have also renewed their registration with IICA for applicable tenures. The Independent Directors (other than Independent Directors who have appeared and completed the online proficiency self -assessment test) are yet to appear for the online proficiency self-assessment test and hence, the opinion on the aforesaid would be provided in the next year''s annual report.

Directors'' Responsibility statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors, based on the representations received from the management, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other

irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2022-23.

Audit Committee and their Recommendations/ Observations

Your Board has a duly constituted Audit Committee in terms of Section 177 of the Companies Act, 2013 read with the Rules framed there under and Regulation 18 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015. The term of reference of the Audit Committee has been approved by the Board. The details pertaining to composition of Audit Committee, no. of meetings held during the year under review, brief term of reference and other details have been included in the Corporate Governance Report, which forms part of this report. The recommendations/observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2023 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013, the members at their 36th Annual General Meeting ("AGM") of the Company held on 30th September, 2022 had appointed M/s Pardeep Tayal & Co. Chartered Accountants, Panipat (Firm registration No. 002733N), for a term of 5 (five) consecutive years from the conclusion of 36th Annual General Meeting till the conclusion of 41st Annual General Meeting to be held in the year 2027.

Auditors'' Report:

Your Company''s Directors have examined the Statutory

Auditors'' Report issued by M/s Pardeep Tayal & Co, Chartered Accountants on the Annual Accounts of the Company for the financial year ended 31st March, 2023. There is no reservation, qualification or adverse remark made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report. During the period under consideration, no incident of frauds was reported by the Statutory Auditors pursuant to Section 143 (12) of the Companies Act, 2013.

Secretarial Auditors and their Report

In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board of Directors in their meeting held on 9th August,

2022 appointed M/s JVS & Associates, New Delhi a Practicing Company Secretaries for the financial year 2022-23 for conducting the Audit of secretarial records of the Company and issue their report.

The Secretarial Audit Report in respect of secretarial records of the Company for the Financial Year ended March 31, 2023 has been submitted by M/s JVS & Associates and taken on record by the Board of Directors of the Company. The Report of the Secretarial Auditors in Form MR-3 for the financial Year ended 31st March, 2023 is enclosed to this Report. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Secretarial Auditors except delay in filing of Corporate Governance Report for the Quarter ended 30th June, 2022.

Management Response: The Company has submitted the said Report on Corporate Governance for the Quarter ended 30th June, 2022 and also complied with the stipulations of the Stock Exchanges related to noncompliance.

Internal Auditors and their Report Appointment of Internal Auditors

On the recommendation of Audit Committee, your Board of Directors in their meeting held on 30th May,

2023 had appointed M/s R.C. Kapoor & Co., Chartered Accountants, New Delhi as internal Auditors of the Company, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies

Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2023-24 for conducting the Internal Audit of the books of accounts and reviewing and ensuring the Internal Control system of the Company and to issue their report. The above firm have submitted its consent and also confirmation that they are qualified to act as Internal Auditors of the Company.

Internal Audit Report:

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31, 2023 has been submitted by Sh. Rajesh Gupta, which has been duly considered and requisite actions were taken by Audit Committee and reports thereon were also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Internal Auditors.

Particulars of Loans, Advances, Guarantees and Investments

The Company has not granted any loan, guarantee or made any investments during the year ended 31st March, 2023 under Section 186 of the Companies Act, 2013 and Rules made there under. Pursuant to Section 186 (4) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), disclosure on particulars relating to Loans, advances and investments are provided as part of the financial statements.

Significant and material litigation/orders

(a) During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by/against Liberty Shoes Ltd. under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended), except two applications filed earlier against the Company by its two vendors which were pending for adjudication at National Company Law Tribunal (NCLT), Chandigarh. The Company, in consultation with its legal consultants, has opposed the admission of the above applications before NCLT

and the Hon''ble Tribunal vide its order dated 15th June 2023 have dismissed the said two petitions.

As on date no proceedings are pending for adjudication at NCLT Chandigarh in respect of petitions so filed against the Company.

Sh. Adarsh Gupta, partner of LFC, anticipating the dismissal of IBC petition from Hon''ble NCLT, has approached Hon''ble Delhi High Court at New Delhi and filed a petition under Section 9 of the Arbitration & Conciliation Act, 1996 on behalf of the firm against the Company seeking Ex-parte injunction order against the continuation of Trademark License agreement dated 3rd April 2013 on the similar grounds of its petition at NCLT but further extending the disputes of terms of payment of Royalty and its calculation from financial year 2018-19 to 2022-23 after serving Termination notice on 4th May, 2023. The Company, on the basis of legal opinion available has opposed the petition filed by Sh. Adarsh Gupta, partner of LFC including maintainability thereof before Hon''ble Delhi High Court and the Hon''ble Delhi High Court vide its Order dated 21st August, 2023 has dismissed the above petition being not maintainable.

Since members are aware that the Company has long term arrangements with three firms namely Liberty Group Marketing Division (LGMD), Liberty Enterprises (LE) & Liberty Footwear Co. (LFC), initially executed in 2003 and then last renewed with validity till 31st March 2028 for the exclusive use of complete business of three firms including their IPR & trademarks. Sh. Harish Gupta, one of the partners of LFC and Sh. Arpan Gupta, beneficiary and legal heir of one of the partners of LFC, LE & LGMD have given their termination notice(s) of the Company''s arrangements with above firms. It is pertinent to point out here that Sh. Harish Gupta given his termination notice in respect of Company''s arrangement with LFC and Sh. Arpan Gupta has given his termination notice(s) in respect of Company''s arrangement with three firms i.e. LFC, LE and LGMD and in response to such notice(s), the Company, besides invoking of arbitration clause available under the agreement with LFC, has approached jurisdictional

Court at Karnal under Section 9 of Arbitration & Conciliation Act 1996 and has been granted status quo orders by the Ho''nble Court at Karnal initially against LFC and subsequently against LGMD. Subsequent to that (granting of status quo order against LFC by Karnal Court) the Company has also approached Hon''ble Punjab & Haryana High Court at Chandigarh for appointment of Arbitrator by filing petition against LFC under Section 11 of the said Act. The Company has taken legal opinion form one of the reputed Legal firm in this regard and hopeful of positive proceedings in the matter. Both the petitions filed by the Company against the respective firms under Section 9 and Section 11 of the Arbitration and Conciliation Act, 1996 are pending to be adjudicated by the respective Courts.

Considering the legal opinion available with the Company regarding continuity of arrangements with the above said firms till the end/expiry of the term till 31st March, 2028, the Company does not foresee or assess any pecuniary impact going forward till the time it is settled or otherwise adjudicated by the Hon''ble Court(s) or Arbitrator to be appointed.

(b) During the year under consideration and till the date of this report, there were no other significant and material orders passed by the regulators or courts or tribunals and no litigation was outstanding as on 31st March, 2023, which would impact the going concern status and Company''s operations in future.

Transactions with Related Parties

During the year 2022-23, all transactions entered by the Company with related parties as defined under the Companies Act, 2013, Rules made there under, were in the Ordinary Course of Business and at Arm''s Length basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors on quarterly basis. Your Company does not have a material unlisted subsidiary as defined under Regulation 16 (1) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Directors shall formulate a Policy to determine Material Unlisted Subsidiary as and

when the relevant provisions for the same are applicable on it in future.

There were no materially significant transactions with related parties during the financial year 2022-23 which were in conflict with interest of the Company. Since all the related party transactions entered in to by your Company were in the ordinary course of business and also on an arm''s length basis, therefore details required to be provided in the prescribed Form AOC-2 is not applicable to the Company. However, the Company has been undertaking transactions for last so many years in respect of payment of Royalty/Franchise fees to few of the related parties after obtaining due prior approval of the concerned regulatory authorities and shareholders under the provisions of Companies Act and SEBI Guidelines. All the related party transactions have been disclosed in the Notes to financial statements as required under IND AS-24 of the Accounting Standard.

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board had approved and adopted policies on Related Party Transactions which has been uploaded on the Company''s website www.libertyshoes.com under the "investor relations section".

Particulars of Directors and Employees

The information required under Section 197(12)of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is given in Annexure II and the same forms part of this report.

A statement containing the Information of top ten employees in terms of remuneration drawn as provided under Section 197 (12) of the Companies Act, 2013 read with rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is given in Annexure III and the same forms part of this report. During the financial year 2022-23, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent

amendments thereto.

Extract of Annual Return

In terms of Sections 92(3) and 134(3)(a) of the Act, annual return is available under the ''Investors'' section of the Company''s website i.e. www.libertyshoes.com.

Corporate Social Responsibility (CSR)

Your Company has been involved in social initiatives for last three decades and engaged in various activities in the field of education, primary healthcare, communities, ecology and environment etc. It believes in long lasting impact towards creating a just, equitable, humane and sustainable society. In Liberty, CSR initiatives were being undertaken, long before the provisions of the Companies Act, 2013 and with the implementation of new provisions of Section 135 of the Companies Act, 2013, Liberty is committed to further strengthen its effort and activities by demonstrating care for the community through its focus on education and development of skills, health and wellness including treatment for poor, needy & uninsured people, environment sustainability including promoting of green initiatives and Improvement of the living conditions of inhabitants and support to disaster relief efforts etc. The various CSR initiatives undertaken by your Company during the year under consideration are as under:-

1. Promotion of Quality education in the Schools and Women Empowerment

Liberty, is deeply committed to social responsibility, and this commitment is evident through various initiatives supporting the education and overall development of underprivileged children in the vicinity of its Plants/Offices. Through generous contributions and sponsorships, the company ensures that children from economically disadvantaged backgrounds have access to quality education, healthcare services, and balanced nutrition. Liberty''s vision extends beyond academic excellence; it aims to nurture responsible and compassionate citizens who can positively impact society. By empowering these young minds with education, healthcare, and essential resources, the company strives to create a brighter and more equitable future for the underprivileged.

In addition to its focus on education and development, Liberty understands the financial challenges faced by families. To alleviate this burden, the company provides essential items like books, bags, uniforms, and other necessities to schools free of cost, ensuring that no child is deprived of education due to economic constraints. These comprehensive philanthropic efforts reflect Liberty''s unwavering dedication to making a significant and lasting impact on the lives of these children, enabling them to overcome obstacles and reach their full potential as responsible and empowered individuals.

Liberty is contributing to the promotion of cultural education through their initiative "Har Ghar Tiranga Azadi ka Mahotsav." This endeavor aims to spread awareness and knowledge about the significance of our national flag, promoting a sense of freedom and unity among the people. By actively participating in this celebration, individuals can embrace their cultural heritage and contribute to the noble cause of education and patriotism.

2. Promotion of Fitness & Sports amongst the youth from the community

Liberty contributed for providing training to youth athletes of Karnal, Haryana for preparing them to participate in National Games and Olympics.

Your Company is making significant contributions to the Paralympic Association by sponsoring disabled players from Guwahati. Their support aims to prepare these talented athletes to participate in the Olympics. Through this initiative, Liberty is empowering differently-abled individuals and helping them achieve their dreams on the international sports.

3. Contribution towards Water, Sanitation and Hygiene

Liberty is dedicated to ensuring access to safe drinking water for students in schools across Karnal, Haryana. To achieve this goal, they are actively working on supplying water coolers to the District Child Welfare organization. This initiative will have a positive impact on the health and well-being of students, creating a conducive

learning environment and promoting overall welfare in the region.

The company, in collaboration with the Rotary Foundation of India, remains committed to combating hunger, poverty, and providing aid to the underprivileged during emergencies in New Delhi. Their ongoing efforts are focused on making a positive difference in the lives of those in need, fostering a sense of compassion and support within the community.

The company, in alliance with the Diya Foundation, persistently extends its support to the vulnerable population during emergencies in New Delhi. By maintaining a steadfast commitment, they aim to provide essential aid and assistance to those in dire need, working towards alleviating the impact of crises and fostering a stronger, more compassionate community.

4. Contribution towards COVID 19 (Relief)

Liberty is committed to continuing its support for COVID-19 relief initiatives by providing Infrared Thermometers in Karnal, Haryana. Collaborating with the District Education Officer, their efforts aim to ensure the safety and well-being of students, teachers, and staff by facilitating noncontact temperature measurements and contributing to the overall health management in educational institutions during these challenging times.

5. Contribution for reconstruction of heritage Buildings and development of Public Infrastructure

Liberty has contributed for the reconstruction of building of National heritage Liberty is making substantial contributions to the restoration and reconstruction of national heritage buildings. Through these donations, the company plays a vital role in safeguarding the country''s cultural legacy, ensuring the protection and upkeep of historically significant structures for the benefit of future generations. This commitment underscores Liberty''s deep respect for cultural heritage and its dedication to actively contributing to the preservation and celebration of the nation''s rich

historical legacy, including in the city of Karnal. Sri Guru Ravidas Sabha is among the beneficiaries of Liberty''s commendable support for these endeavors.

6. Other CSR activities and initiatives:

Liberty has contributed for the promotion of religious activities by contributing to

temples/Pooja/various registered Kalyankari

Sabhas and societies.

During the year under consideration the Company has complied with the provisions of Companies Act, 2013 by making the required contribution on the activities as stated in Schedule VII of the Act. The Annual Report on Corporate Social

Responsibility activities as required under Sections 134 and Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) and Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure IV of this report. The CSR policy is available on the website of the Company at www.libertyshoes.com.

Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Liberty''s premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The said Committee has its presence at corporate office as well as at plants.

During the year ended 31st March, 2023 the

Committee did not receive any complaint pertaining to sexual harassment.

Corporate Governance and Ethics

Your Company believes in adopting best practices of corporate governance. Corporate Governance principles are enshrined in the spirit of Liberty, which form the core values of Liberty. These guiding principles are also articulated through the Company''s Code of Conduct, Corporate Governance guidelines, Charter of various Sub-Committees and disclosure policy.

As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from Statutory Auditors M/s Pradeep Tayal & Co., Chartered Accountants, on compliance with corporate governance norms under the Listing Regulations, is given at page no. 88 to page no. 89 of this Annual report.

Management Discussion and Analysis Report

In terms of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis report on your Company''s performance, industry trends and other material changes with respect to your Company, wherever applicable, are presented at page no. 92 to page no. 97 of this Annual report. The Management Disclosure and Analysis Report provides a consolidated prospective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 134 (1) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure V", which forms part of this report.

Compliance with Secretarial Standards:

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of

'' 17,04,00,000/- (Previous Year '' 17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of '' 10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).

Acknowledgments and Appreciation:

Your Directors take this opportunity to place on record their sincere gratitude for the consistent cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors place on record their deep appreciation to the employees at all levels for their hard work and dedication.

---

Mar 31, 2018

Dear Shareholders,

The Directors have pleasure in presenting the 32nd Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2018.

Financial Highlights:

The highlights of the financial statements are as under:-

(Rs. In Lakh)

Particulars
	2017-18	2016-17
Gross Sales	55,030.85	51,890.76
Less: Excise Duty	702.27	2,299.92
Net Sales	54,328.58	49,590.84
Add: Other Income	107.48	195.50
Revenue from Operations and Other Income	54,436.06	49,786.34
Profit before Depreciation, Finance Costs and Tax	4,061.56	3,998.54
Less: Finance Costs	1,560.75	1,581.52
Less: Depreciation & Amortisation	1,345.70	1,359.33
Profit Before Exceptional Items	1,155.11	1,057.69
Less: Exceptional Items	65.45	42.01
Profit Before Tax Expense	1,089.66	1,015.68
Less: Tax Expenses	429.56	361.78
Net Profit for the year (NP)	660.10	653.90
Other Comprehensive Income /(Loss)	-	-
Total Comprehensive Income	660.10	653.90

Review of the operations of the Company:

Your Company has prepared the Financial Statements for the financial year ended March 31, 2018 under Sections 129, 133 and Schedule II of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and has also recast the Financial Statements relating to the previous financial year ended March 31, 2017 in order to make them comparable.

During the financial year ended 31st March 2018, Liberty has recorded a turnover of Rs.55,030.85 Lakhs an increase of 6% over corresponding previous year 2017. The numbers are however not completely comparable consequent to implementation of Goods and Services Tax (GST) w.e.f 1st July, 2017. Your Company has sold 143 Lakh pairs shoes during the year under consideration against 110 Lakh pairs during the previous year which shows the confidence and acceptability of the products amongst the consumers.

The Profit before Depreciation, Interest and Tax stood at Rs.4,061.56 Lakhs as compared to Rs.3,998.54 Lakhs during the corresponding previous year 2016-17. The Profit before Tax expenses stood at Rs.1,089.66 Lakh as compared to Rs.1,015.69 Lakhs during the corresponding previous year 2016-17. The Profit after Tax of your Company, for the year under consideration, has remained at Rs.660.10 Lakhs as against Rs.653.91 Lakhs during the corresponding previous year.

The Company’s Profit margins during the year under consideration have remained at almost same level despite increase in turnover due to implementation of low margin high volume major Institutional order worth Rs.4,800 Lakh (Approx).

Your Company always endevours and understands the consumer needs through intensive market research and launches various new designs and product to fulfill the customers’ aspirations at affordable price to match the changing lifestyle, habits and preferences. During the year under review, inspired by a market feedback that customers are most inclined to buying footwear with pronounced health benefits, your Company has further augmented and added its new product range as “HEALERS” with new concept and design with altogether different concept and price range to tap the premium segment market.

Your Board of Directors, during the year under consideration, has decided to discontinue wholly owned subsidiary (WOS) of the Company M/s Liberty Foot Fashion Middle East FZE, Dubai, by liquidation of its Assets and has already taken the requisite steps to conclude this decision. No diminution in the investment value has been considered by the Company during the year under consideration. As the WOS has not commenced its operations and in view of the Board decision to discontinue this WOS, no consolidated financial statements have been prepared and got Audited by the Company for the year under consideration. The Members’ approval for the above is being sought separately through the Notice of AGM.

As reported earlier also with regard to ongoing franchise arrangements since 2003 with the two partnership firms namely Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), in which few of the Directors are interested as partners, your Company, considering long term benefits available under the said franchise agreements have extended the existing franchise arrangements with LE and LGMD for further period of 10 years commencing from 1st April, 2018.

Your Company, in order to leverage its existing retail presence and also to exploit the potential available in the lifestyle segment, has decided to add to its existing portfolio the faster growing fine fragrance and perfume products. The members approval to suitably amend the objects clause is being sought separately through the notice of AGM.

Credit Rating:

During the year under review, CARE Ratings Limited, a leading rating agency, has re-affirmed its Ratings CARE “A” (-); (single A Minus) in respect of Long Term banking facilities (comprising Term Loan and Working Capital fund based facilities) and CARE “A2” ( ) (“A” Two Plus) in respect of Short Term banking facilities (comprising non fund based facilities) sanctioned by the Banks to the Company. The outlook on the Long Term rating is stable.

Subsidiary Company their Performance & Consolidated financial statement:

Liberty Foot Fashion Middle East FZE (LFF), Dubai (Erstwhile Wholly Owned Overseas Subsidiary)

The Company had one Wholly Owned Overseas Subsidiary M/s Liberty Foot Fashion Middle East FZE (LFF), Dubai and during the year under consideration, the Company has decided to liquidate/ dispose of its Assets without diminution/reduction of investments till date. Your Company till 31st March, 2018 has invested a sum of Rs.302.42 Lakh (Previous Year Rs.302.42 Lakh) in LFF as its capital contribution. As the WOS has not commenced its operations and in view of the winding up/liquidation of the WOS of the Company during the year under consideration no consolidated financial statements have been prepared and got Audited by the Company for the year ended 31st March, 2018.

Since, there is no financial statements available of its subsidiary Company, the same has not been attached and a statement containing salient features of the financial statements of the Company’s wholly owned subsidiary has not been provided as required under Section 129 of the Companies Act, 2013.

Appropriations:

Dividend

Your Directors, considering the financial requirement to the Company, have not recommended any dividend for the financial year ended 31st March 2018.

Transfer to Reserves

Your Directors proposed to transfer Rs.300.00 Lakh (Previous Year Rs.300.00 Lakh) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.360.11 Lakh (Previous Year Rs.353.91 Lakh) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s)

During the year ended 31st March, 2018, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Nomination and Remuneration Policy

Your Board of Directors, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for identifying and recommending the selection and appointment of Directors and KMPs of the Company and remuneration to Directors, KMPs and other employees. The contents of the Policy and evaluation criteria have been stated in the Corporate Governance Report. The above Nomination and Remuneration Policy is set out in Annexure-I of this Report. The Policy is also available on the website of the Company i.e. www.libertyshoes.com.

Policy on Prevention of Insider Trading

Your Company has adopted a code of Conduct for Prevention of Insider Trading with a view to regulate trading in Equity Shares of the Company by the Promoters, Directors, Employees, designated persons and other connected persons. The said Code of Conduct is available on the website of the Company at www.libertyshoes.com. The Code requires pre-clearance for dealing in Company’s shares and prohibits purchase or sale of shares in your Company by the Promoters, Directors, Employees, designated persons and other connected persons while they are in possession of unpublished price sensitive information and also during the period when the Trading Window remains closed.

Familiarization Program

In order to encourage active participation of Independent Directors and in order to understand the business environment, your Company has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies including significant aspects of the Industry and its future outlook. Once appointed, the Non Executive & independent Directors undergo the familiarization program of the Company. The Non executive & independent Directors are also provided with financial results, internal audit findings and other specific documents as sought by them from time to time. They are also made aware of the various policies and code of conduct and business ethics adopted by the Board. Details of familiarization programs extended to the Non Executive & Independent Directors during the year under consideration are disclosed on the Company website at www.libertyshoes.com.

Risk Management Policy & Risk Management

The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk. In line with the provisions of Section 134 (3) (n) of the Companies Act, 2013, the Company has developed a Risk Management Policy to build and establish the process and procedure for Identifying, assessing, quantifying, minimizing, mitigating and managing the associated risk at early stage. Policy is aimed to develop an approach to make assessment and management of the risks in financial, operational and project based areas in timely manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand value through strategic control and operational policies and to enable compliance with appropriate regulations wherever applicable, through the adoption of best practices. The Board of Directors of the Company assesses several type of risks which include Business Environment Risks, Strategic Business Risks and Operational Risks etc. The Board of Directors periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through properly defined networks. Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organization have been identified. However there are other risks against which adequate mitigation plans are prepared.

The Risk Management policy is available on the Company’s website of the Company athttp://investor.libertyshoes.com/doc/ Risk_Management_ Policy.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Regulation 22 of Listing Regulations, your Company has an effective mechanism of reporting illegal or unethical behavior. The Company has a Whistle Blower Policy (vigil mechanism) wherein the directors, employees, consultants and contractors are free to report violations of laws, rules and regulations or unethical conducts, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy to the nodal officer. The mechanism followed is appropriately communicated within the Company across all levels and has been posted on the Notice Board of the Company. The confidentiality of those reporting violations etc. is maintained and they are not subjected to any discriminatory practice. The concern can be reported by sending an e-mail message at the dedicated address viz. [email protected]. Individuals can also raise their concerns directly to the CEO or the Chairman of the Audit Committee of the Company. Any allegation falling within the scope of the concerns are identified, investigated and dealt with appropriately. The Audit Committee periodically reviews the functioning of this mechanism. The Vigil mechanism established in the Company provides adequate safeguards against victimization of director(s) or employee(s) or any other person who avail the mechanism. During the year, no personnel of the Company was denied access to the Audit Committee. The details of establishment of Vigil mechanism/ Whistle Blower Policy of the Company are available at the website of the Company viz. www.libertyshoes.com.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

The Company has not accepted/renewed any public deposits and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet.

Board of Directors and Key Managerial Personnel: Retirement by rotation of the Directors Sh. Ashok Kumar & Sh. Adeesh Kumar Gupta, Directors of the Company will retire by rotation at the 32nd Annual General Meeting in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible, have offered themselves for the reappointment at the 32nd Annual General Meeting.

Appointment(s) and Cessation of office of Directors

(a) Appointment /Re-appointment of Directors

During the year under consideration, the Board of Directors, considering the recommendation of the Nomination and Remuneration Committee, expertise, qualification experience and contribution made in the Company, in their meeting held on 19th March, 2018 approved, subject to the members ‘approval, re-appointment of Sh. Adesh Kumar Gupta as CEO & Executive Director and Sh. Shammi Bansal as Executive Director of the Company for further period of 3 years w.e.f. 1st April, 2018 to 31st March, 2021 on the terms and conditions and remuneration as stated in their respective draft service agreements. The draft service agreements to be executed between the Company and Sh. Adesh Kumar Gupta and Sh. Shammi Bansal along with necessary resolutions for their re-appointment are being placed for the approval of the members at the 32nd Annual General Meeting of the Company.

The Board of Directors, considering the recommendation of the Nomination and Remuneration Committee, expertise, qualification, experience and contribution made in the Company, in their meeting held on 26th May, 2018 approved, subject to the members ‘approval, re-appointment of Sh. Ashok Kumar and Sh. Adeesh Kumar Gupta as Executive Directors of the Company for further respective period from 1st June, 2018 to 31st March, 2021 and from 1st October, 2018 to 31st March, 2021 on the terms and conditions and remuneration as stated in their respective draft service agreements. The draft service agreements to be executed between the Company and Sh. Ashok Kumar and Sh. Adeesh Kumar Gupta and the Company along with necessary resolutions for their re-appointment are being placed for the approval of the members at the 32nd Annual General Meeting of the Company.

Further, the Board of Directors, considering the recommendation of the Nomination and Remuneration Committee, expertise, qualification, experience and contribution made in the Company, in their meeting held on 26th May, 2018 recommended to the members of the Company, re-appointment of Smt. Lovelena Mody as an Independent Director of the Company for a second term of 3 consecutive years w.e.f. 29th September, 2018 to 28th September, 2021. The draft letter of appointment and other required documents along with necessary resolution for her re-appointment as Independent Director is being placed for the approval of the members at the 32nd Annual General Meeting of the Company.

A brief profile along with necessary details of above Directors seeking their re-appointment has been provided in Annexure-A to the Notice of the 32nd Annual General Meeting as required under the provisions of Regulation 36 (3) of the Listing Regulations.

(b) Cessation/Resignation of Directors

During the year under consideration, Sh. Vivek Bansal Independent Director of the Company, due to his pre occupation, has resigned from the position of Directorship of the Company w.e.f. 15th July, 2017. The Board members acknowledged the valuable services rendered by Sh. Vivek Bansal during his tenure as an Independent Director of the Company and expressed its appreciation and gratitude for the same. Except this, there is no change in the Board of Directors of the Company during the year under consideration.

Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 -Sh. Adesh Kumar Gupta - CEO & Executive Director Sh. Shammi Bansal - Executive Director

Sh. Sunil Bansal - Executive Director

Sh. Adeesh Kumar Gupta - Executive Director

Sh. Ashok Kumar - Executive Director

Sh. Munish Kakra - CFO & Company Secretary

Committees of the Board

The Company’s Board has constituted the following Committees:

1. Audit Committee

2. Management Committee

3. Stakeholders Relationship Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

The detail of terms of reference of the Committees, Committee composition, meetings held during the year and attendance at the meetings of the Committees are provided in the Corporate Governance Report.

Number of meetings of the board

Five meetings of the board were held during the year. The detail of the composition, board meetings held during the year and attendance at the meetings are provided in Corporate Governance Report. The maximum time gap between two meetings did not exceed 120 days.

Annual Evaluation of Directors and Board as a whole

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board is required to monitor and review the Board evaluation framework. In line with the Corporate Governance Guidelines, the Annual Performance Evaluation is conducted for all members as well as the working of the Board and its Committees. This evaluation is with specific focus on the performance and effective functioning of the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The evaluation process also considers the time spent by each of the Board Members, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise. In addition, the Chairman is also evaluated on the key aspects of his role. The Board evaluation is conducted through questionnaire having qualitative parameters and feedback based on ratings. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The outcome of the Board evaluation for the financial year under consideration was discussed by the Nomination and Remuneration Committee and Board at their respective meetings held on 24th January, 2018, excluding the director being evaluated.

In lines with the provisions of the Companies Act, 2013 and Listing Regulations, separate meeting of the Independent Directors of the Company was held on 24th January, 2018 in the absence of nonindependent directors and members of management inter alia to evaluate the performance of the non-Independent Directors, Board as a whole of the Company, its committees, Chairman and to assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

Attributes, Qualifications & Independence of Directors and their appointment

The criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules there under, both in respect of Independent Directors and other Directors as applicable, has earlier been approved by the Nomination and Remuneration Committee during the financial year 2015-16. The Policy of the Company also provides that Non-Independent Independent Directors be drawn from amongst eminent professionals with experience in business/finance/law/public administration & enterprises. The Board Diversity Policy of the Company requires the Board to have balance of skills, experience and diversity of perspectives appropriate to the Company. Directors are appointed/re-appointed with the approval of the Members for a shorter period say, two to five years only. All Directors, other than Independent Directors, are liable to retire by rotation and are eligible for re-election in terms of the provisions of Articles of Association. The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under section 149 of the Companies, Act, 2013 and Regulation 16 of Listing Regulations.

The Nomination and Remuneration Policy as approved by the Board of Directors of the Company has been attached to this report and also accessible on the website of the Company at www.libertyshoes.com

Material changes and commitments affecting financial position between end of the financial year and date of report

As per the provisions of Section 134(3) (1) of the Companies Act, 2013, no material changes or commitments affecting the financial position have occurred between the end of financial year of the Company to which the financial statements relates to the date of the report.

Change in the nature of Business, if any

There was no change in the nature of business of the Company during the year under review.

Internal financial control systems and their adequacy

Liberty’s internal financial controls are adequate and operate effectively and ensure orderly and efficient conduct of its business including adherence to its policies, safeguard its assets, prevent and detect frauds and errors, maintain accuracy and completeness of its accounting records and further enable it in timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

The Company has in place a strong and independent Internal Audit Department which is responsible for assessing and improving the effectiveness of internal financial control and governance. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Declaration by Independent Directors

The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors’ Responsibility statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors, based on the representations received from the management, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

Audit Committee and their Recommendations/ Observations

Your Board has a duly constituted Audit Committee in terms of Section 177 of the Companies Act, 2013 read with the Rules framed there under and Regulation 18 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015. The term of reference of the Audit Committee has been approved by the Board. The details pertaining to composition of Audit Committee, no. of meetings held during the year under review, brief term of reference and other details have been included in the Corporate Governance Report, which forms part of this report. The recommendations/observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2018 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report

M/s U. Shanker & Associates, Chartered Accountants, New Delhi (Firm registration No. 014497N) were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on 24th August, 2017, for a term of 5(five) consecutive years.

Auditors’ Report:

Your Company’s Directors have examined the Statutory Auditors’ Report issued by M/s U. Shanker & Associates, Chartered Accountants on the Annual Accounts of the Company for the financial year ended 31st March, 2018. There is no reservation, qualification or adverse remark made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report. During the period under consideration, no incident of frauds was reported by the Statutory Auditors pursuant to Section 143(12) of the Companies Act, 2013.

Secretarial Auditors and their Report

Your Directors have appointed M/s Sanjay Grover & Associates, a Practicing Company Secretaries, in accordance with the provisions of Section 204 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 for the financial year 2017-18 for conducting the Audit of secretarial records of the Company and issue their report.

The Secretarial Audit Report in respect of secretarial records of the Company for the Financial Year ended March 31, 2018 has been submitted by M/s Sanjay Grover & Associates and taken on record by the Board of Directors of the Company. The Report of the Secretarial Auditors in Form MR-3 for the financial Year ended 31st March, 2018 is enclosed to this Report. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Secretarial Auditors.

Internal Auditors and their Report

Your Directors in their meeting held on 25th May, 2017 have appointed Sh. Rajesh Gupta as internal Auditor of the Company, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2017-18 onwards for conducting the Internal Audit of the books of accounts and reviewing and ensuring the Internal Control system of the Company and to issue their report.

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31, 2018 has been submitted by Sh. Rajesh Gupta, which has been duly considered and requisite actions were taken by Audit Committee and reports thereon were also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Internal Auditors.

Particulars of Loans, Advances, Guarantees and Investments

The Company has not granted any loan, guarantee or made any investments during the year ended 31st March, 2018 under Section 186 of the Companies Act, 2013 and Rules made there under. Pursuant to Section 186 (4) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), disclosure on particulars relating to Loans, advances and investments are provided as part of the financial statements.

Significant and material orders

During the year under consideration, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Transactions with Related Parties

During the year 2017-18, all transactions entered by the Company with related parties as defined under the Companies Act, 2013, Rules made there under, were in the Ordinary Course of Business and at Arm’s Length basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors on quarterly basis. During the year under consideration, all related party transactions, non repetitive in nature for which no omnibus approval was granted, were placed before the Audit Committee and Board of Directors for their approval. Your Company does not have a material unlisted subsidiary as defined under Regulation 16 (1) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Directors shall formulate a Policy to determine Material Unlisted Subsidiary as and when the relevant provisions for the same are applicable on it in future.

There were no materially significant transactions with related parties during the financial year 2017-18 which were in conflict with interest of the Company. Since all the related party transactions entered in to by your Company were in the ordinary course of business and also on an arm’s length basis, therefore details required to be provided in the prescribed Form AOC-2 is not applicable to the Company. However, the Company has been undertaking transactions for last so many years in respect of payment of Royalty/ Franchise fees to few of the related parties after obtaining the prior approval of shareholders and Central Government under the provisions of erstwhile Companies Act, 1956. All the related party transactions have been disclosed in the Notes to financial statements as required under IND AS-24 of the Accounting Standard.

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board had approved and adopted policies on Related Party Transactions which has been uploaded on the Company’s website www.libertyshoes.com under the “investor relations section”.

Particulars of Directors and Employees

The information required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is given in Annexure II and the same forms part of this report.

A statement containing the Information of top ten employees in terms of remuneration drawn as provided under Section 197 (12) of the Companies Act, 2013 read with rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is given in Annexure III and the same forms part of this report. During the financial year 2017-18, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto. Extract of Annual Return

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report. The Annual return for the financial year ended 31st March, 2018 is available on the website of the Company www.libertyshoes.com.

Corporate Social Responsibility (CSR)

Your Company has been involved in social initiatives for last three decades and engaged in various activities in the field of education, primary healthcare, communities, ecology and environment etc. It believes in long lasting impact towards creating a just, equitable, humane and sustainable society. In Liberty, CSR initiatives were being undertaken, long before the provisions of the Companies Act, 2013 and with the implementation of new provisions of Section 135 of the Companies Act, 2013, Liberty is committed to further strengthen its effort and activities by demonstrating care for the community through its focus on education and development of skills, health and wellness including treatment for poor, needy & uninsured people, environment sustainability including promoting of green initiatives and Improvement of the living conditions of inhabitants and support to disaster relief efforts etc. The various CSR initiatives undertaken by your Company during the year under consideration are as under:-

1. Promoting Education and Skill development

Liberty has identified schools and institutions around its Plant/Offices and made contributions/sponsorships for providing education to children who can’t afford it. It has sponsored quality education and healthcare, providing of balanced nutrition to under privileged children for their holistic development so that they can lead better life and can contribute to the society as responsible citizens etc. In addition to this, it has provided free of cost footwear to various school/institutions for distribution amongst the children/students who can’t afford it.

BETI BACHAO, BETI PADHAO” -CSR initiatives of LIBERTY

Liberty as a responsible corporate, have participated in a noble CSR initiatives BETI BACHAO BETI PADHAO of the Haryana Government and have contributed in its own way to make the Girls attend schools on a regular basis and get better education.

At the CSR event of Liberty Shoes Limited at Karnal, other similar welfare activities were also organized including contribution to the poor and needy women for earning their livelihood with self dependency and uplifting of their lives.

2. Promoting Preventive and other Health Care

Liberty has provided free of cost/ concessional medical aids and testing facilities to the poor and needy people by making its suitable contribution to Hospital etc. at Karnal.

3. Promotion of Sports

Liberty contributed to registered Sports Associations in Karnal for providing training to youth athletes of Haryana for preparing them to participate in National Games and Olympics.

4. Sanitation by Cleanliness

Liberty has organised campaign to clean the public places around its plants/offices in Karnal

5. Environmental sustainability

Liberty is ensuring environmental sustainability through tree plantation, conservation of natural resources and maintaining of quality of soil, air and water in the places around its Plants/Offices.

6. Other CSR activities and initiatives:

Liberty has contributed for the promotion of religious activities by contributing to temples/Pooja/various registered Kalyankari Sabhas and societies and also contributed to the Association incorporated with the objective of development of trade to which your Company belongs.

During the year under consideration the Company has complied with the provisions of Companies Act, 2013 by making the required contribution on the activities as stated in Schedule VII of the Act. The Annual Report on Corporate Social Responsibility activities as required under Sections 134 and Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure V of this report. The policy is also available on the website of the Company at www.libertyshoes.com.

Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Liberty’s premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The said Committee has its presence at corporate office as well as at plants.

During the year ended 31st March, 2018 the Committee did not receive any complaint pertaining to sexual harassment.

Corporate Governance and Ethics

Your Company believes in adopting best practices of corporate governance. Corporate Governance principles are enshrined in the spirit of Liberty, which form the core values of Liberty. These guiding principles are also articulated through the Company’s Code of Conduct, Corporate Governance guidelines, Charter of various Sub-Committees and disclosure policy.

As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from Statutory Auditors M/s U. Shanker & Associates, Chartered Accountants, on compliance with corporate governance norms under the Listing Regulations, is given at page no. 55 to page no 78 of this Annual report.

Management Discussion and Analysis Report

In terms of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis report on your Company’s performance, industry trends and other material changes with respect to your Company and its wholly owned subsidiary, wherever applicable, are presented at page no. 80 to page no. 83 of this Annual report. The Management Disclosure and Analysis Report provides a consolidated prospective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 134 (1) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the “Annexure VI”, which forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs.17,04,00,000/- (Previous Year Rs.17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs.10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).

Acknowledgments and Appreciation:

Your Directors take this opportunity to place on record their sincere gratitude for the consistent cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors also wish to place on record their appreciation for the guidance & support received from Council for Footwear Leather & Accessories (CFLA).

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedication.

For and on behalf of the

Board of Directors

Adesh Kumar Gupta

Chairman of the Meeting

DIN: 00143192

Place: Gurugram, Haryana

Dated: Saturday, 26th May, 2018

---

Mar 31, 2016

Dear Shareholders,

The Directors have pleasure in presenting the 30th Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31^stMarch, 2016. In addition to the Audited Financial Statements for the financial year ended 31^st March, 2016, your Company has also presented its consolidated financial statements after considering the Audited.

-Annual results of its overseas wholly owned subsidiary Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement/Regulations with the Stock Exchanges.

Financial Highlights (Standalone):

The highlights of the financial statements are as under:-

(Rs. In Lakh

Particulars	2015-16	2014-15
Gross Sales	47,065.86	54,646.16
Less: Excise Duty	1,817.75	2,257.15
Net Sales	45,248.11	52,389.01
Add: Other Income	202.62	228.30
Revenue from Operations and Other Income	45,416.53	52,617.31
Profit before Depreciation, Finance Costs and Tax (EBITDA)	4,344.89	4,420.43
Less: Finance Costs	1,639.21	1,606.68
Less: Depreciation & Amortization	1,349.79	1,242.38
Profit Before Exceptional Items (PBT)	1,355.89	1,571.37
Less: Exceptional Items	117.69	71.34
Profit Before Tax Expense	1,238.20	1,500.03
Less: Tax Expenses	217.47	(206.17)
Net Profit for the year (NP)	1,020.73	1,706.20
Proposed Dividend (Including Provision for Corporate Dividend Tax)	-	307.93

Review of the operations of the Company:

During the financial year ended 31st March 2016, your Company has recorded a turnover of Rs.47,066 Lakh as against Rs.54,646 Lakh during the corresponding previous year. The Net Profit of your Company, for the year under consideration, remained at Rs.1, 020.74 Lakh as against Rs.1 and 706.20 Lakh during the corresponding previous year. The Net Profit of your Company for the financial year ended 31 st March, 2016 is after considering effect of Exceptional items of Rs.117.68 Lakh (Previous year Rs.71.35 Lakh) (as per details mentioned in notes note 2.26 of the notes to Financial Statements of the Company attached with this Annual Report).

Your Company, on consolidation basis with its wholly owned subsidiary Company Liberty Foot Fashion Middle East FZE, Dubai, recorded a turnover of Rs.47,066 Lakh and achieved a Consolidated Net profits of Rs.1,005.53 Lakh as the WOS has not yet commenced its operations.

Your Company performance for the current financial year ended 31st March, 2016 in terms of its overall turnover and profitability has witnessed decline as against the previous year but has registered growth of around 20% in Sales at the Company Owned Company Operated (COCO) showrooms, whereas same stores sales, your Company has witnessed around 11% growth. This shows the satisfaction level of the customers in Liberty Brand. Your Company''s institutional Sales segments, being major contributor in sales of the Company, could not succeed in bagging repetitive big institutional orders which has majorly impacted the top line of the Company. For the respective last 2 years, your Company has executed this Institutional orders worth Rs.50 Crores in each year. The exports, due to slow down in global economies & steep fall in oil prices world over, has also impacted your Company''s performance in overseas market and witnessed declining trend during the year under consideration.

The Commodity prices and inflation of India during the year consideration remained under control but due to poor consecutive monsoon and drought in major states of the Country deprived the people living in rural areas from using their available resources for spending on footwear which has adversely affected the Company''s performance on the domestic front.

Your Directors are concerned with the Company''s performance during the year under consideration and believing that this phase would be temporary and with all round measures for efficiency improvements will results in improved performance in future.

Your Company, to regain its earlier position amongst the organized footwear players, has been continuously focusing by improving its collections in categories for Men, Women and Children by providing good quality products with latest and advanced designs at inspirational prices to cater the customers'' value for money products. Your Company, as its pursuit of retail expansion, has been very conservative in opening of new retail stores during the year and kept focusing on same stores growth by improving efficiency in terms of replenishment and feed the stores afresh with latest merchandise. Your Company, in order to expand its retail network, has been focusing on tier -1 and tier-

2 cities of India which will improve its reach to the untapped market and hope that focus on same stores growth with selective expansions will give better results for the Company in the years to come.

As informed earlier, the respective arrangements with M/s. Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms in which few directors are interested, through which rights to use their manufacturing facilities and intangible assets of the said firms against minimum guaranteed annual fees, were available with the Company until 31st March, 2015. Your Company had entered in to Memorandum of Understanding with M/s Liberty Enterprises (LE) & M/s Liberty Group Marketing Division (LGMD) for purchase or otherwise takeover the Footwear Business (including, amongst others, the Sub Brands and Distribution Networks) of the said Firms and were proposed to be completed by 31st March, 2016 subject to the approval of the shareholders and the requisite statutory approvals required, if any. However, due to some technical and legal issues, the same could not be consummated till 31 st march 2016 and considering the enduring benefits and requirements of the business of the Company, the earlier arrangements have been again renewed afresh for further period of 1 year i.e till 31st March, 2017 on the same terms and conditions including fees. Your directors are in talks with the concerned partners/ person for acquisition of the assets of the above partnership firms before the end of the existing arrangements subject to shareholders and statutory approvals wherever required.

Your Directors are pleased to inform you that your Company has been awarded with Make in India awards 2015 for excellence in Leather Footwear during the year under consideration besides receiving of recognitions by leading business and industrial magazines/news papers.

Credit Rating:

During the year under review, Care Analysis and Research Limited (CARE), the leading rating agency has re-affirmed its rating CARE "A" (-) pronounced as CARE "A" Minus for the Long Term banking facilities and CARE "A2" ( ) pronounced as CARE "A" (Two Plus) for Short Term banking facilities sanctioned to the Company.

Subsidiary Company & Consolidated financial statement:

Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Overseas Subsidiary)

The Wholly Owned Overseas Subsidiary of the Company M/s Liberty Foot Fashion Middle East FZE (LFF), Dubai has not yet started its operation and has incurred nominal routine expenses during the year under consideration which has been accounted while consolidating its financial statements with the Company. Your Company till 31st March, 2016 has invested a sum of Rs.302.42 Lakh (Previous Year Rs.302.42 Lakh) in LFF as its capital contribution. The financial results of LFF have been consolidated with the Company in compliance with Accounting Standards-21 of the Accounting Standards issued by the Institute of Chartered Accountants of India.

In accordance with Section 129 of the Companies Act, 2013 consolidated financial statements of the Company and its subsidiary Company is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 129 of the Companies Act, 2013.

The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiary.

Pursuant to provisions of first proviso of Section 129(3) of the Companies Act, a statement containing salient features of the financial statements of the Company''s wholly owned subsidiary are given in Annexure I in Form AOC-1 and the same forms part of this report.

Pursuant to the third proviso to Section 136 (1) of the Companies Act, 2013, the financial Statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of wholly owned subsidiary, are available on the website of the Company at www.libertyshoes.com. The annual accounts of the wholly owned subsidiary and the related information will be made available to any member of the Company/its wholly owned subsidiary seeking such information and are available for inspection by any member of the Company/ its wholly owned subsidiary at the Registered Office of the Company.

Appropriations:

Dividend

Your Directors, considering the financial requirement to the Company, have not recommended any dividend for the financial year ended 31^st March 2016.

Transfer to Reserves

Your Directors proposed to transfer Rs.600.00 Lakh (Previous Year Rs.600.00 Lakh) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.420.74 Lakh (Previous Year Rs.138.94 Lakh) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s)

During the year ended 31 st March, 2016, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Nomination and Remuneration Policy

Your Board of Directors, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for selection, appointment and remuneration of Directors and Senior Management Personnel. The contents of the Policy and evaluation criteria have been stated in the Corporate Governance Report. The above Nomination and Remuneration Policy is set out in Annexure-II of this Report. The Policy is also available on the website of the Company i.e. www.libertyshoes.com.

Policy on Prevention of Insider Trading

Your Company has adopted a code of Conduct for Prevention of Insider Trading with a view to regulate trading in Equity Shares of the Company by the Directors and designated employees of the Company. The said Code of Conduct is available on the website of the Company at www.libertyshoes.com. The Code requires pre-clearance for dealing in Company''s shares and prohibits purchase or sale of shares in your Company by the Directors and designated employees, while they are in possession of unpublished price sensitive information and also during the period when the Trading Window remains closed.

Familiarization Program

In order to encourage active participation of Independent Directors and in order to understand the business environment, your Company has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies, including significant aspects of the Industry and its future outlook. Once appointed, the Non Executive & independent Directors undergo the familiarization program of the Company. The Non executive & independent Directors are also provided with financial results, internal audit findings and other specific documents as sought from time to time. They are also made aware of the various policies and code of conduct and business ethics adopted by the Board. Details of familiarization programs extended to the Non Executive & Independent Directors during the year under consideration are disclosed on the Company website at www.libertyshoes.com.

Risk Management Policy & Risk Management

The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk. In line with the provisions of Section 134 (3) (n) of the Companies Act, 2013, the Company has developed a Risk Management Policy to build and establish the process and procedure for Identifying, assessing, quantifying, minimized, mitigating and managing the associated risk at early stage. Policy is aimed to develop an approach to make assessment and management of the risks in financial, operational and project based areas in timely manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand value through strategic control and operational policies and to enable compliance with appropriate regulations wherever applicable, through the adoption of best practices. The Board of Directors of the Company assesses several types of risks which include Business Environment Risks, Strategic Business Risks, and Operational Risks etc. The Board of Directors periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through properly defined networks. Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organization have been identified. However there are other risks against which adequate mitigation plans are prepared.

The Risk Management policy is available on the Company''s website of the Company at http://investor.libertyshoes.com/doc/Risk_ Management Policy.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Regulation 22 of Listing Regulations, your Company has an effective mechanism of reporting illegal or unethical behavior. The Company has a Whistle Blower Policy (vigil mechanism) wherein the directors, employees, consultants and contractors are free to report violations of laws, rules and regulations or unethical conducts, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy to the nodal officer. The mechanism followed is appropriately communicated within the Company across all levels and has been posted on the Notice Board of the Company. The confidentiality of those reporting violations etc. is maintained and they are not subjected to any discriminatory practice. The concern can be reported by sending an e-mail message at the dedicated address viz.

[email protected] . Individuals can also raise their concerns directly to the CEO or the Chairman of the Audit Committee of the Company. Any allegation falling within the scope of the concerns are identified, investigated and dealt with appropriately. The Audit Committee periodically reviews the functioning of this mechanism. The Vigil mechanism established in the Company provides adequate safeguards against victimization of director(s) or employee(s) or any other person who avail the mechanism. During the year, no personnel of the Company was denied access to the Audit Committee. The details of establishment of Vigil mechanism/ Whistle Blower Policy of the Company are available at the website of the Company viz. www.libertyshoes.com.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

The Company has not accepted/renewed any public deposits and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet.

Board of Directors and Key Managerial Personnel:

Retirement by rotation of the Directors

Sh. Adeesh Kumar Gupta & Sh. Ashok Kumar, Directors of the Company will retire by rotation at the 30^th Annual General Meeting in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible have offered themselves for the re-appointment at the 30^th Annual General Meeting.

Appointment(s) and Cessation of office of Directors

(a) Appointment /Re-appointment of Directors

During the year under consideration, there is no appointment/re appointment of any Director in the Company. Pursuant to the recommendation of Nomination and Remuneration Committee, your Board of Directors, considering experience, qualification and valuable contribution in the Company, in their meeting held on 30^th May, 2016 approved, subject to members'' approval, re appointment of Sh. Adeesh Kumar Gupta as Executive Director of the Company i.e. 1^st October, 2016 for a further period of 2 years on the same terms and conditions including minimum remuneration, payable to him for the position of Executive Director. The previous tenure of 5 years of Sh. Adeesh Kumar Gupta will expire on 30^th September, 2016 which was approved by the members in their 25^th Annual General Meeting held on 28^th September, 2011. Accordingly, necessary resolution is being placed for the approval of the members at the 30^th Annual General Meeting of the Company.

A brief profile along with necessary details of Director seeking their re-appointment has been provided in the Annexure-A of the Annexure to the Notice of the 30^th Annual General Meeting as required under the provisions of Regulation 36 (3) of Listing Regulations.

(b) Cessation of Directors

During the year under consideration, Sh. Adarsh Gupta, Executive Director of the Company, due to his pre-occupation, has resigned from the position of Executive Director of the Company i.e. 18^th August, 2015. The Board members acknowledged the valuable services rendered by Sh. Adarsh Gupta during his tenure as Executive Director of the Company and expressed its appreciation and gratitude for the same. Sh. Adarsh Gupta served the Company for more than 25 years in different capacities with his valuable knowledge and rich experience. He belongs to the promoter group of the Company.

Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMPs) of the

Company as per the provisions of the Companies Act, 2013 -

Sh. Adesh Kumar Gupta - CEO & Executive Director

Sh. Shammi Bansal - Executive Director

Sh. Sunil Bansal - Executive Director

Sh. Adeesh Kumar Gupta - Executive Director

Sh. Ashok Kumar - Executive Director

Sh. Munish Kakra - CFO & Company Secretary

Committees of the Board

The Company''s Board has constituted the following Committees:

1. Audit Committee

2. Management Committee

3. Stakeholders Relationship Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

The detail of terms of reference of the Committees, Committee composition, meetings held during the year and attendance at the meetings of the Committees are provided in the Corporate Governance Report.

Number of meetings of the board

Five meetings of the board were held during the year. The detail of the composition, board meetings held during the year and attendance at the meetings are provided in Corporate Governance Report. The maximum time gap between two meetings did not exceed 120 days.

Annual Evaluation of Directors and Board as a whole

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations the Board is required to monitor and review the Board evaluation framework. In line with the Corporate Governance Guidelines, the Annual Performance Evaluation is conducted for all members as well as the working of the Board and its Committees. This evaluation is with specific focus on the performance and effective functioning of the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The evaluation process also considers the time spent by each of the Board Members, core competencies, personal characteristics, accomplishment of specific responsibilities and expertise. In addition, the Chairman is also evaluated on the key aspects of his role. The Board evaluation is conducted through questionnaire having qualitative parameters and feedback based on ratings. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The outcome of the Board evaluation for the financial year under consideration was discussed by the Nomination and Remuneration

Committee and Board at their meeting held on 31^st March, 2016, excluding the director being evaluated.

In lines with the provisions of Companies Act, 2013 and Listing Regulation, separate meeting of the Independent Directors of the Company was held on 31^st March, 2016 in the absence of no independent director and members of management to evaluate the performance of the non-Independent Directors and Board as a whole of the Company.

Attributes, Qualifications & Independence of Directors and their appointment

The criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules there under, both in respect of Independent Directors and other Directors as applicable, has been approved by the Nomination and Remuneration Committee during the financial year 2014-15. The Policy of the Company also provides that Non-Independent Independent Directors be drawn from amongst eminent professionals with experience in business/finance/ law/public administration & enterprises. The Board Diversity Policy of the Company requires the Board to have balance of skills, experience and diversity of perspectives appropriate to the Company. Directors are appointed/re-appointed with the approval of the Members for a shorter period say, two to five years only. All Directors, other than Independent Directors, are liable to retire by rotation and are eligible for re-election in terms of the provisions of Articles of Association. The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under section 149 of the Companies, Act, 2013 and Regulation 16 of Listing Regulations.

The Nomination and Remuneration Policy as approved by the Board of Directors of the Company has been attached to this report and also accessible on the website of the Company at www.libertyshoes.com

Events Subsequent to the Date of Financial Statements

As per the provisions of Section 134(3) (1) of the Companies Act, 2013, no material changes or commitments affecting the financial position have occurred between the end of financial year of the Company to which the financial statements relates to the date of the report.

The Ministry of Corporate Affairs, Government of India vide its Notification dated February 16, 2015 has issued the Companies (Indian Accounting Standards) Rules, 2015 which lays down a roadmap of Companies for implementation of Indian Accounting Standards (Ind AS). Every listed Company and their holding and subsidiary Companies (other than banking Companies, insurance Companies and non-banking financial Companies) are required to comply with Ind AS in preparation of their financial statements for accounting periods beginning on or after April 1, 2016, with the comparatives for the periods ending March 31, 2016. The provisions of above Rules will be applicable on your Company i.e. April 1, 2017 considering the Net worth of your Company as on March 31, 2014 is less than Rs.500 Crores. Your Company will adopt the In AS for accounting periods beginning on or after April 1, 2017 in preparation of its financial statements for the said periods. Further, since the provisions of said Rules is not applicable on overseas subsidiaries, therefore the overseas wholly owned subsidiary of your Company M/s Liberty Foot Fashion Middle East FZE in Dubai is not required to comply with In AS in preparation of their financial statements.

Change in the nature of Business, if any

There was no change in the nature of business of the Company during the year under review.

Internal financial control systems and their adequacy

Liberty''s internal financial controls are adequate and operate effectively and ensure orderly and efficient conduct of its business including adherence to its policies, safeguard its assets, prevent and detect frauds and errors, maintain accuracy and completeness of its accounting records and further enable it in timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

The Company has in place an independent Internal Audit Department which is responsible for assessing and improving the effectiveness of internal financial control and governance. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Declaration by Independent Directors

The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of th e SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.

Directors'' Responsibility statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, yours Directors, based on the representations received from the management, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2015-16.

Audit Committee and their Recommendations/ Observations

Your Board has a duly constituted Audit Committee in terms of Section 177 of the Companies Act, 2013 read with the Rules framed there under and Regulation 18 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015. The term of reference of the Audit Committee has been approved by the Board. The details pertaining to composition of Audit Committee, no. of meetings held during the year under review, brief term of reference and other details have been included in the Corporate Governance Report, which forms part of this report. The recommendations/observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2016 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed there under, M/s Pardeep Tayal & Co., Chartered Accountants (Registration No. 002733N), were appointed as the Statutory Auditors of the Company from the conclusion of the Twenty Eight (28th) Annual General Meeting held on 29th September, 2014 till the conclusion of the Thirty First (31st) Annual General Meeting of the Company to be held in the year 2017, subject to the ratification of their appointment by the Members of the Company in their every Annual General Meeting. A resolution to that effect forms part of notice of the 30^th Annual General Meeting sent along with this Annual Report.

Auditors'' Report

Your Company''s Directors have examined the Statutory Auditors'' Report on Annual Accounts of the Company for the financial year ended 31^st March, 2016. There are no reservations, qualification or adverse remark made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report.

Secretarial Auditors and their Report

Your Directors have appointed M/s Sanjay Grover & Associates, a Practicing Company Secretaries, in accordance with the provisions of Section 204 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 for the financial year 2015-16 for conducting the Audit of secretarial records of the Company and issue their report.

The Secretarial Audit Report in respect of secretarial records of the Company for the Financial Year ended March 31, 2016 has been submitted by M/s Sanjay Grover & Associates and taken on record by the Board of Directors of the Company. The Report of the Secretarial Audit in Form MR-3 for the financial Year ended 31^st March, 2016 is enclosed to the Report. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Secretarial Auditors.

Internal Auditors and their Report

Your Directors have appointed M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2015-16 for conducting the Audit of the books of accounts and Internal Control system of the Company and to issue their report.

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31, 2016 has been submitted by M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants which has been duly considered and requisite actions were taken by Audit Committee and reports thereon were also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Internal Auditors.

Particulars of Loans, Advances, Guarantees and Investments

The Company has not granted any loan, guarantee or made any investments during the year ended 31^st March, 2016 under Section 186 of the Companies Act, 2013 and Rule made there under. Pursuant to Section 186 (4) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), disclosure on particulars relating to Loans, advances and investments are provided as part of the financial statements.

Significant and material orders

During the year under consideration, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

Transactions with Related Parties

During the year 2015-16, all transactions entered by the Company with related Parties as defined under the Companies Act, 2013, Rules made there under, were in the Ordinary Course of Business and at Arm''s Length basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. During the year under consideration, all related party transactions, non repetitive in nature for which omnibus approval was granted, are placed before the Audit Committee for its approval. Your Company does not have a material unlisted subsidiary as defined under Regulation 16 (1)

(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There were no materially significant transactions with related parties during the financial year 2015-16 which were in conflict with interest of the Company. Your Company during the year, did not have any related party transactions which required prior approval of the Shareholders. However, the Company has been undertaking transactions for last so many years in respect of payment of Royalty/ Franchise fees to few of the related parties after obtaining the prior approval of shareholders and Central Government under the provisions of the Companies Act, 1956. All the related party transactions have been disclosed in the Notes to financial statements as required under AS-18 of Accounting Standard.

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board had approved and adopted policies on Related Party Transactions which has been uploaded on the Company''s website www.libertyshoes.com under the "investor relations section".

Particulars of Employees

The information required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure III and the same forms part of this report.

During the financial year 2015-16, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Extract of Annual Return

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report.

Corporate Social Responsibility (CSR)

Your Company has been involved in social initiatives for last three decades and engaged in various activities in the field of education, primary healthcare, communities, ecology and environment etc. It believes in long lasting impact towards creating a just, equitable, humane and sustainable society. In Liberty, CSR initiatives were being undertaken, long before the provisions of the Companies Act, 2013 and with the implementation of new provisions of Section 135 of the Companies Act, 2013, Liberty is committed to further strengthen its effort and activities by demonstrating care for the community through its focus on education and development of skills, health and wellness including treatment for poor, needy & uninsured people, environment sustainability including promoting of green initiatives and Improvement of the living conditions of inhabitants and support to disaster relief efforts etc. The various CSR initiatives undertaken by your Company during the year under consideration are as under:-

1. Promoting Education and Skill development

Liberty has identified schools and institutions around its Plant/Offices and made contributions/sponsorships for providing education to children who can''t afford it. It has sponsored quality education and healthcare, providing of balanced nutrition to under privileged children for their holistic development so that they can lead better life and can contribute to the society as responsible citizens etc. In addition to this, it has provided free of cost footwear to various school/institutions for distribution amongst the children/students who can''t afford it.

2. Promoting Preventive and other Health Care

Liberty has provided free of cost/ concessional medical aids and testing facilities to the poor and needy people by making its suitable contribution to Hospital etc. at Karnal.

3. Rural Development

With due permission of State Government Liberty has adopted village/rural areas in Karnal for their development and uplifting the life of the villagers residing there by fulfilling the necessary and essential requirements of survival including providing of working conditions and opportunities for gainful, employment of women and skill development. It has also contributed in the Karnal Vikas Nidhi Scheme initiated by State Government for the development of Karnal and its rural areas and villages like "to undertake all work related to improvement of society, promotion of communal and societal harmony and brotherhood, to create awareness and addressing social evils, promotion and progress of agriculture and animal husbandry, promotion of small scale industries, to take up programs in which science and technology have major role, minimizing unemployment among youth of weaker section of society, women empowerment etc."

4. Promoting of Sports

Liberty has made contribution to registered Sports Associations at Karnal which provides training to youth/young athletes of Haryana to prepare and make them ready to participate in National Games/ Olympics.

5. Environmental sustainability

Liberty is ensuring environmental sustainability, conservation of natural resources, animal welfare and maintaining of quality of soil, air and water through plantation and installation of solar plants at our Plants/ Offices. Besides this the Company has also donated free of cost footwear to World Wild life Fund (WWF) for the protection of wild animals in India.

6. Other CSR activities and initiatives:

Liberty has contributed for the promotion of religious activities by contributing to temples/Pooja/various registered Kalyankari Sabhas and societies and also contributed to the Association incorporated with the objective of development of trade to which your Company belongs.

During the year under consideration the Company has complied with the provisions of Companies Act, 2013 by making the required contribution on the activities as stated in Schedule VII of the Act. The annual report on Corporate Social Responsibility activities as required under Sections 134 and Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure V of this report. The policy is also available on the website of the Company at www.libertyshoes.com.

Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Liberty''s premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressed of complaints related to sexual harassment and follows the guidelines provided in the policy. The said Committee has its presence at corporate office as well as at plants.

During the year ended 31st March, 2016 the Committee did not receive any complaint pertaining to sexual harassment.

Corporate Governance and Ethics

Your Company believes in adopting best practices of corporate governance. Corporate Governance principles are enshrined in the spirit of Liberty, which form the core values of Liberty. These guiding principles are also articulated through the Company''s Code of Conduct, Corporate Governance guidelines, Charter of various Sub-Committees and disclosure policy.

As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from Statutory Auditors M/s Pardeep Tayal & Co., Chartered Accountants, on compliance with corporate governance norms under the Listing Regulations, is given at page no. 39 to page no. 57 of this Annual report.

Management Discussion and Analysis Report

In terms of Regulation 34 of the Listing Regulations, the Management Discussion and Analysis report on your Company''s performance, industry trends and other material changes with respect to your Company and its wholly owned subsidiary, wherever applicable, are presented at page no. 59 to page no. 61 of this Annual report. The Management Disclosure and Analysis Report provides a consolidated prospective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 134 (1) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure VI", which forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs.17,04,00,000/ (Previous Year Rs.17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs.10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).

Acknowledgments and Appreciation:

Your Directors take this opportunity to place on record their sincere appreciation for the consistent cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedication.

For and on behalf of the Board of Directors

Adesh Kumar Gupta Chairman of the Meeting DIN: 00143192

Place: Gurugram, Haryana Dated: Monday, 30^th May, 2016

---

Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the 29th Annual Report of the Company together with the Audited Annual Accounts for the financial year ended 31st March, 2015.

In addition to the Audited Annual Accounts for the financial year ended 31st March, 2015, your Company has also presented its consolidated financial statements after considering the Audited Annual results of its overseas wholly owned subsidiary Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement with the Stock Exchanges.

Financial Highlights (Standalone):

The highlights of the financial statements are as under:-

(Rs. In Lacs) Particulars 2014-15 2013-14

Gross Sales 54,646.16 50,060.20

Less: Excise Duty 2,257.15 1,711.33

Net Sales 52,389.01 48,348.87

Add: Other Income 228.30 75.93

Revenue from Operations and Other Income 52,617.31 48,424.79

Profit before Depreciation, Finance Costs and Tax 4,420.43 4,148.54

Less: Finance Costs 1,606.68 1,607.27

Less: Depreciation & Amortisation 1,242.38 1,106.57

Profit Before Exceptional Items 1,571.37 1,434.71

Less: Exceptional Items 71.34 19.72

Profit Before Tax Expense 1,500.03 1,414.99

Less: Tax Expenses (206.17) 75.54

Net Profit for the year 1,706.20 1,339.45

Proposed Dividend (Including Provision for Corporate Dividend Tax) 307.93 299.04

Review of the operations of the Company:

Your Company, during the year under consideration continuing with its focus on strengthening its front end operations, has achieved Gross Sales of Rs.5,46,46.16 Lacs as against of Rs.50060.20 Lacs in the previous year. Your Company for the year under consideration achieved a Net Profits of Rs.1706.20 Lacs which was 27% higher than the Net Profits of Rs.1339.45 Lacs earned in the previous corresponding year

The domestic sales have increased by over 9% whereas exports have grown by around 8% as compared to their performance in the corresponding previous year. Your Company, in its continuous efforts to better its position in the footwear market has further improved its merchandising range and quality which has resulted in over 9% growth in number of pairs sold by the Company during the year under consideration.

In terms of geographical presence, though North India still contributes a significant portion in Domestic Sales but Sales in South India, where Company has been focusing for last few years, has also witnessed a notable growth in the year under consideration. In future, besides strengthening these two zones, the Company has plans to increase its presence in other potential areas also.

The members are aware that Your Company had arrangements with M/s. Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms of the Group in which few of the directors and their relatives are interested, for the exclusive use of their manufacturing facilities and fixed assets, trademarks & distribution networks valid till March 31, 2015. The members were also informed earlier that considering the enduring benefits of unlocking the shareholders' value by acquiring the said tangible and intangible assets of these two firms, your Company had proposed the acquisition of the assets from the aforesaid firm(s).

In pursuance of the Company's earlier proposal, Your Company has executed a Memorandum of Understanding (MOU) with the above two Partnership firms on March 31, 2015 for acquisition of their respective business of footwear. In terms of the said MOU, 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 subject to the approval of the shareholders and the requisite statutory approvals required, if any Your Directors have also pleasure in informing that M/s CARE Ltd., the accredited rating agency has awarded A- (Pronounced as Single A(-) rating to the Company's credit facilities wherein the outlook of the rating has been stated as having adequate degree of safety regarding timely servicing of financial obligation. This has helped Company to avail favorable terms from its bankers for its various banking facilities.

Your Directors, have been mentioning that footwear has a tremendous potential in domestic as well as in the overseas markets because of its inherent strength. Your Directors would continue to strive its efforts to exploit this potential and with improvement in the present economic scenario and new strategies in place, your Directors foresee a better opportunity to increase its foot print and emerge as a stalwart in the growing footwear markets.

Awards and Recognition

Your Directors are pleased to inform that your Company has been awarded with various prestigious awards and recognitions during the year under consideration amongst those, Awards received from "Admired Brand of Asia", Admired Leader of Asia, CII Innovation Award and quality & excellence in IT operations are the prominent one besides receiving of recognitions by leading business and industrial magazines/news papers.

Subsidiary Company & Consolidated financial statement:

Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Overseas Subsidiary)

The Wholly Owned Overseas Subsidiary of the Company M/s Liberty Foot Fashion Middle East FZE (LFF), Dubai has not yet started its operation and has incurred nominal routine expenses during the year under consideration which has been accounted while consolidating its financial statements with the Company. Your Company till 31st March, 2015 has invested a sum of Rs.302.42 Lacs (Previous Year Rs.302.42 Lacs) in LFF as its capital contribution. The financial results of LFF have been consolidated with the Company in compliance with AS-21 of the Accounting Standard issued by the Institute of Chartered Accountants of India.

As required under the Listing Agreements entered into with the Stock Exchanges, Consolidated financial statements of the Company and its subsidiary Company is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 129 of the Companies Act, 2013.

The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiary

Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's wholly owned subsidiary are given in Annexure I in Form AOC-1 and the same forms part of this report.

Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of wholly owned subsidiary, are available on the website of the Company. The annual accounts of the wholly owned subsidiary and the related information will be made available to any member of the Company/its wholly owned subsidiary seeking such information and are available for inspection by any member of the Company/ its wholly owned subsidiary at the Registered Office of the Company.

Appropriations:

Dividend

Your Directors have recommended a dividend of Rs.1.50/- per Equity Share on Rs.17,04,00,000 Equity Share Capital (i.e. 15% on equity share of Rs.10/- each) for the financial year ended 31st March, 2015 for the payment to the shareholders subject to the approval of the members at the ensuing Annual General Meeting. The total outflow on equity dividend including corporate tax on dividend for the year ended 31st March, 2015 will be Rs.307.93 Lacs as against Rs.299.04 Lacs paid last year. The dividend, if approved at the ensuing Annual General Meeting of the Company will be payable to those shareholders whose names appear on the Company's register of members as at the end of business hours of Tuesday, 22nd September, 2015. In respect of shares held in dematerialized form, the dividend shall be payable on the basis of beneficial ownership as at the end of business hours of Tuesday, 22nd September, 2015 as per the details furnished by National Securities Depositories Ltd./Central Depositories Services (India) Ltd. for the purpose, as on that date.

Transfer to Reserves

Your Directors proposed to transfer Rs.600.00 Lacs (Previous Year Rs.600.00 Lacs) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.138.94 Lacs (Previous Year Rs.440.41 Lacs) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s)

During the year ended 31st March, 2015, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Familiarization Program

In order to encourage active participation of Independent Directors and in order to understand the business environment, your Company has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies, including significant aspects of the Industry and its future outlook. Once appointed, the Non Executive & Independent Directors undergo the familiarization program of the Company. The Non Executive & Independent Directors are also provided with financial results, internal audit findings and other specific documents as sought for from time to time. They are also made aware of the various policies and code of conduct and business ethics adopted by the Board. Details of familiarization program extended to the Non- executive & Independent Directors during the year are disclosed on the Company website viz. www.libertyshoes.com.

Nomination & Remuneration Policy

The Board of Directors of your Company has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for selection, appointment and remuneration of Directors & Senior Management Personnel. The contents of the policy and evaluation criteria are stated in the corporate Governance Report. The above Nomination and Remuneration Policy is set out in Annexure II of this Report. The Policy is also available on the website of the Company

i.e. www.libertyshoes.com.

Risk Management Policy & Risk Management

The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk. In line with the provisions of Section 134 (3) (n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has developed a Risk Management Policy to build and establish the process and procedure for Identifying, assessing, quantifying, minimized, mitigating and managing the associated risk at early stage. Policy is aimed to develop an approach to make assessment and management of the risks in financial, operational and project based areas in timely manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand value through strategic control and operational policies and to enable compliance with appropriate regulations wherever applicable, through the adoption of best practices. The Board of Directors of the Company assesses several types of risks which include Business Environment Risks, Strategic Business Risks, and Operational Risks etc. The Board of Directors periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through properly defined networks. Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organization have been identified. However, there are other risks against which adequate mitigation plans are prepared.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013, Your Company has an effective mechanism of reporting illegal or unethical behaviour. The Company has a Whistle Blower Policy (vigil mechanism) wherein the directors, employees, consultants and contractors are free to report violations of laws, rules and regulations or unethical conducts, actual or suspected fraud or violation of the Company's code of conduct or ethics policy to the nodal officer. The confidentiality of those reporting violations etc. is maintained and they are not subjected to any discriminatory practice. The concern can be reported by sending an e-mail message at the dedicated address viz. [email protected]. Individuals can also raise their concerns directly to the CEO or the Chairman of the Audit Committee of the Company. The Ethics Committee comprises of four members including CEO & Executive Director, CFO & Company Secretary, Internal Auditor and a senior functional head. The committee is authorised by the Board of Directors of the Company for the purpose of receiving all complaints under the policy and in ensuring appropriate action. Any allegation that fall within the scope of the concerns identified are investigated and dealt with appropriately. The ethics counsellors periodically submit the report on complaints received, if any and the action taken to the Audit Committee. During the year under consideration, no Individual was denied access to the Audit Committee. The details of establishment of Vigil mechanism/ Whistle Blower Policy of the Company are available at the website of the Company viz. www.libertyshoes.com.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

The Company has not accepted/renewed any public deposits and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet.

Board of Directors and Key Managerial Personnel:

Retirement by rotation of the Directors

Sh. Shammi Bansal and Sh. Sunil Bansal, Directors of the Company,

retire by rotation in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible offer themselves for the re- appointment at the ensuing Annual General Meeting.

Re-appointement(s) of office of Directors

Sh. Adesh Kumar Gupta, CEO & Executive Director, Sh. Adarsh Gupta and Sh. Shammi Bansal, Executive Director(s), whose period of office has come to an end on 31st March, 2015. The Board of Directors, in their meeting held on 29th May, 2015, have approved their re- appointment for further period of 3 years w.e.f. 1st April, 2015, subject to the approval of the members.

A brief profile along with the necessary details of Directors seeking their re-appointment thereof has been provided in the Annexure-A of the Annexure to the Notice of the Annual General Meeting as required under Clause 49 of the Listing Agreement entered into with Stock Exchange(s).

Appointment(s) and Cessation of office of Directors

(a) Appointment of Smt. Lovelena Mody as Women Director

Smt. Lovelena Mody is a renowned Business personality and actively participates in State level CII activities. She is having a vast experience of hospitality sectors. Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013 and SEBI guidelines, the Board of Directors in their meeting held on 23rd January, 2015 appointed Smt. Lovelena Mody as Women Director. Smt. Mody was appointed as additional director in terms of the provisions of Section 161 of the Companies Act, 2013 to hold the office up to the date of this Annual General Meeting. Accordingly, her office is coming to an end on the date of forthcoming Annual General Meeting. Considering her profile, qualification, experience, independent relationship with the management of the Company and in compliance with the above provisions and the rules made there under and the requirements of the above provisions of the Companies Act, 2013 and SEBI guidelines, the Board of Directors in their meeting held on 29th May, 2015 proposed the appointment of Smt. Mody as Independent Director of the Company for a period of 3 (three) years w.e.f. 29th September, 2015 to 28th September, 2018, subject to the approval of the members.

(b) Appointment of Sh. Ashok Kumar as Executive Director

Sh. Ashok Kumar is a Law Graduate and has been advising the Company on various legal matters of the Company for last several years. Sh. Ashok Kumar was appointed as Additional Director of the Company w.e.f. 23rd January, 2015 to hold the office up to the date of this Annual General Meeting. Accordingly, his office is coming to an end on the date of forthcoming Annual General Meeting and the Board of Directors, considering his experience, qualification and valuable contribution in the Company, in their meeting held on 29th May, 2015 proposed his appointment as Director of the Company liable to retire by rotation and further as Executive Director for a period of 3 years w.e.f. 1st June, 2015 to 31st May, 2018, subject to the approval of the members.

A brief profile along with the necessary details of Directors seeking their appointment/ re-appointment thereof has been provided in the Annexure-A of the Annexure to the Notice of the Annual General Meeting as required under Clause 49 of the Listing Agreement entered into with Stock Exchange(s).

c) Cessation of office of Sh. Satish Kumar Goel, Director of the Company due to resignation

Sh. Satish Kumar Goel, Non-Executive Director of the Company due to his pre-occupation has resigned from the position of Directorship of the Company w.e.f. 29th May, 2015. The Board members acknowledged the valuable services rendered by Sh. Satish Kumar Goel during his tenure as Director of the Company and expressed its appreciation and gratitude for the same.

Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 (the Act) and were already in office before the commencement of the Act:-

Sh. Adesh Kumar Gupta - CEO & Executive Director

Sh. Adarsh Gupta - Executive Director

Sh. Shammi Bansal - Executive Director

Sh. Sunil Bansal - Executive Director

Sh. Adeesh Kumar Gupta - Executive Director

Sh. Munish Kakra - Company Secretary

After commencement of the Act, Sh. Munish Kakra was appointed as Chief Financial Officer (CFO) of the Company during the year under consideration.

Subject to the approval of the members, Sh. Ashok Kumar was appointed as Executive Director of the Company w.e.f. 1st June, 2015. None of the above KMPs has resigned during the year under consideration.

Number of meetings of the board

Six meetings of the board were held during the year. Details of the board meetings held during the year, has been given in Corporate Governance Report.

Annual Evaluation of Directors and Board as a whole

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

The performance evaluation as carried out by the Board of Directors, Nomination and Remuneration committee and Independent Directors at their respective meetings were based on Feed-back form received from Directors. Feed-back form carried a structured questionnaire prepared after taking in to consideration various aspects of the Board's functioning and submit their report accordingly.

The basis of the report submitted by the Board of Directors, Nomination and Remuneration committee and Independent Directors in regard to performance evaluation of Independent Directors, Board, Committee and other individual Directors evaluate its own performance and of its committees and of the Independent Directors as per the provisions of Section 134 (3) (p) and Clause VIII of schedule IV of the Companies Act, 2013. The said reports were discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

The Directors expressed their satisfaction with the entire performance of evaluation process.

Events Subsequent to the Date of Financial Statements

As per the provisions of Section 134 (3) (1) of the Companies Act, 2013, no material changes or commitments affecting the financial position have been occured between the end of financial year of the Company to which the financial statements relates to the date of the report.

Change in the nature of Business, if any There was no change in the nature of business of the Company during the year under review.

Internal financial control systems and their adequacy

Liberty's internal financial controls are adequate and operate effectively and ensure orderly and efficient conduct of its business including adherence to its policies, safeguard its assets, prevent and detect frauds and errors, maintain accuracy and completeness of its accounting records and further enable it in timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

The Company has in place a strong and independent Internal Audit Department which is responsible for assessing and improving the effectiveness of internal financial control and governance. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Declaration by Independent Directors

The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Directors' Responsibility statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, yours directors, to the best of their knowledge and their belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Audit Committee and their Recommendations/ Observations

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. The recommendations/observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2015 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, M/s Pardeep Tayal & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company from the conclusion of the Twenty Eight (28th) Annual General Meeting held on 29th September, 2014 till the conclusion of the Thirty First (31st) Annual General Meeting of the Company to be held in the year 2017, subject to the ratification of their appointment by the Members of the Company in their every Annual General Meeting.

Your Company's Directors have examined the Statutory Auditors' Report on Annual Accounts of the Company and observed that no reservation, qualification or adverse remark was made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report.

Secretarial Auditors and their Report

Your Directors have appointed M/s Sanjay Grover & Associates, a Practicing Company Secretaries, in accordance with the provisions of Section 204 read with Section 179 of the Companies Act, 2013 and

rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 for the financial year 2014-15 for conducting the Audit of secretarial records of the Company and issue their report.

The Secretarial Audit Report in respect of secretarial records of the Company for the Financial Year ended March 31, 2015 has been submitted by M/s Sanjay Grover & Associates and taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark was made by the Secretarial Auditors except emphasis on unspent amount on CSR activities as required pursuant to section 135 of the Act and Composition of Board of Directors in terms of clause 49 of the Listing Agreement. The Board of Directors have given reason of unspent amount on CSR activities in the Section "Annul Return on CSR Activities" forming part of this report as Annexure V. As on date of this report, the Requirements of clause 49 of the Listing Agreement with regard to the Composition of Board of Directors have been complied with.

Internal Auditors and their Report

Your Directors have appointed M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2014-15 for conducting the Internal Audit of the books of accounts and Internal Control system of the Company and to issue their report.

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31st, 2015 has been submitted by M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants which has been duly considered and requisite actions were taken by the Audit Committee and reports thereon also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark was made by the Internal Auditors.

Particulars of loans, guarantees and investments

As per the provisions of Section 186 (4) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 Company has not granted any loan, Guarantee or made any investments during the year under review.

Significant and material regulatory orders

During the year under consideration, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Transactions with Related Parties

During the year 2014-15, all transactions entered by the Company with Related Parties as defined under the Companies Act, 2013, Rules made thereunder and revised clause 49 of the Listing Agreement with Stock Exchanges, were in the Ordinary Course of Business and at Arm's Length basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. During the year under consideration, the Audit Committee and Board of Directors granted their approval for other transactions not repetitive in nature with the related parties in terms of section 188 of the Companies Act, 2013 and rules made thereunder. Your Company does not have a material unlisted subsidiary. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Your Company did not have any related party transactions which required prior approval of the Shareholders. However, the Company has been doing transactions for last many years in respect of payment of Royalty/ Franchise fees to few of the related parties after obtaining the prior approval of shareholders and Central Government under the provisions of the Companies Act, 1956. All the related party transactions have been disclosed in the Notes to the financial statements as required under AS-18.

The Board had approved and adopted policies on Related Party Transactions which have been uploaded on the Company's website www.libertyshoes.com under the investors relations section. Particulars of Employees

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure III and the same forms part of this report.

During the financial year 2014-15, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Extract of Annual Return

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report.

Corporate Social Responsibility (CSR)

Liberty has always initiated the activities for the development of Society at large to help the needy and poor people like every year. The Company, as its social initiative, has focused on providing the medical facilities to the local community at Karnal, donations for development of roads and footpaths at Karnal, providing skill enhancement training to local people and promoting sports by sponsoring programmes at district level.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under consideration are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is also available on the website of the Company.

Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Liberty's premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The said Committee has its presence at corporate office as well as at plants.

During the year ended 31st March, 2015, the Committee did not receive any complaint pertaining to sexual harassment.

Disclosure requirements

As per Clause 49 of the listing agreements entered into with the stock exchanges, Corporate Governance Report with Auditors' certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

Details of the familiarization program of the Independent Directors are available on the website of the Company (URL: www.libertyshoes.com/investors).

Policy on dealing with related party transactions is available on the website of the Company (URL: www.libertyshoes.com/investors).

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges (URL: www.libertyshoes.com/ investors).

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 134 (1) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure VI", which forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs.17,04,00,000/- (Previous Year Rs.17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs.10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). Acknowledgements:

Your Directors place on record their sincere appreciation for the cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedication.

For and on behalf of the Board of Directors

Adesh Kumar Gupta Chairman of the Meeting Place: New Delhi Dated: Friday, 29th May, 2015

---

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 28th Annual Report of the Company together with the Audited Annual Accounts for the financial yearended 31st March, 2014.

In addition to the Audited Annual Accounts forthe financial year ended 31st March, 2014, your Company has also presented its consolidated financial statements after considering the Audited Annual results of its overseas wholly owned subsidiary Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement with the Stock Exchanges.

Financial Highlights (Standalone):

The highlights of the financial statements are as under:-

In Lacs.

Particulars 2013-14 2012-13

Gross Sales 50,060.20 35,272.92

Less: Excise Duty 1,711.33 1,780.25

Net Sales 48,348.87 33,492.67

Add: Other Income 75.93 198.03

Revenue from Operations and Other Income 48,424.79 33,653.07

Profit before Depreciation, Finance Costs and Tax 4,148.54 2,759.73

Less: Finance Costs 1,607.27 1,230.09

Less: Depreciation & Amortisation 1,106.57 805.12

Profit Before Exceptional Items 1,434.71 724.52

Less: Exceptional Items 19.72 19.49

Profit Before Tax Expense 1,414.99 705.03

Less: Tax Expenses 75.54 (12.26)

Net Profit for the year 1,339.45 717.29

Proposed Dividend (Including provision for dividend distribution Tax) 299.04 -

Review of the operations of the Company:

Your Directors have pleasure in informing you that your Company''s turnover has for first time crossed the landmark figure of Rs.500 Crores. Your Company, during the year under consideration, has achieved Gross Sales of Rs.50,060.20 Lacs (Previous year Rs.35,272.92 Lacs) and Net Sales of Rs.48,348.87 Lacs (Previous year Rs.33,492.67 Lacs) registering a growth of 42 % and 44% respectively as against previous year. Your Company, for the year under consideration, achieved a net profit of Rs.1,339.45 Lacs which was 87% higher than the net profit of Rs.717.29 Lacs in the corresponding previous year. During the year under review, the domestic sales as well as export sales have shown tremendous growth resulting in to overall growth for the Company. The total number of pairs sold during the year under consideration was 113.10 Lacs as against 85.34 Lacs in the corresponding previous year showing overwhelming response and customers'' satisfaction in Liberty''s products. At the domestic front, the north India has contributed around 45% of the sales while around 35% of the total domestic sales were contributed by Southern India. The sales in southern territories have shown good potential and strong momentum ever since the Company has decided to strengthen its reach in this part in the last few years.

Your Company as reported earlier has implemented complete turnaround strategy, first of its kind in the fashion industry in India, in its operations by switching to pull model instead of conventional methodology of pushing the sales by adapting flexible production batches and faster replenishment by further strengthening its supply chain management. The major benefit besides registering a sales growth, in value and volume both, is the inventory improvement. Liberty is presently working on expanding its reach further and also improving its merchandising range, the other constituents of the strategy.

During the year under consideration, M/s. ICRA Ltd. the leading rating agency has upgraded the Long Term Credit Rating of the Company to ICRA BBB (pronounced as ICRA triple B plus) wherein the outlook of the rating has been stated as stable.

Your Directors are also pleased to inform you that the scheme of amalgamation of its wholly owned Retail Subsidiary Company i.e Liberty Retail Revolutions Ltd.(LRRL) has been approved by the respective High Court(s) of Punjab & Haryana and New Delhi with appointed date 1st April, 2013 and Your Company has completed all the statutory formalities to give effect this amalgamation. Considering the availability of statutory approvals with effect from 1st April, 2013, the financial results of the Company for the year has been prepared including the financials of its Retail subsidiary also as if it were a retail division of the Company. Your Company has achieved around 9% growth in its sales because of inclusion of financials of its retail division as a result of the above amalgamation.

As informed earlier, the respective arrangements with M/s. Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms in which few directors are interested, through which rights to use their manufacturing facilities and intangible assets of the said firms against minimum guaranteed annual fees, are available with the Company until 31st March, 2015. 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, your Company has proposed the acquisition of the assets from the firms and is presently working on the modalities to implement the same.

Your Directors are hopeful that with the new strategies in place as also with the improvement in the economic scenario in future, Your Company will have more opportunities to grow and emerge as strong leader in the growing footwear market.

Awards and Recognition

Your Directors have pleasure and proud in informing that in the latest brand equity survey carried by The Economic Times, Liberty has been ranked as the 2nd most trusted brand in the footwear category which includes many international brands.

Besides this, Your Company has also been awarded for many other recognitions including quality and excellence in its IT operations.

Corporate Social Responsibility (CSR):

Liberty has always been a frontrunner in contributing to the society at large considering as its responsibility and has identified various areas to make the contribution. CSR committee has been constituted on 29th May, 2014 to meet the requirements of the new Companies Act, 2013. With the implementation of new provisions of Section 135 of the Companies Act, 2013, Liberty is committed to further strengthen its effort and activities as prescribed under the Act. Liberty has constituted a CSR Committee of its Board comprising of Sh. Shammi Bansal, Sh. Adeesh Kumar Gupta, Executive Directors and Sh. Raghubar Dayal, Sh. Ramesh Chandra Palhan, Independent Directors of the Company as its Members to review and look after the activities of CSR including identifying the areas of CSR as per the provisions of the Act. The Company, as its responsibility, has taken the following activities during the year under consideration:

- Providing medical care facilities for the community at large within the city of Karnal.

- Uplifting of the persons living below the poverty line by providing skill enhancing employment opportunities.

- Helping poor children and supporting education of the workers'' children.

- Organising tournaments and awards to the sports man to promote sports within the area close to Company''s Plants.

- Extending donations for building of temple, school and for food & education of poor children.

- Promoting green initiatives through tree plantations at plants of the Company.

Subsidiary Company & Consolidated financial statement:

Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Overseas Subsidiary)

The Wholly Owned Overseas Subsidiary of the Company M/s Liberty Foot Fashion Middle East FZE [LFF], Dubai has not yet started its operation and has incurred nominal routine expenses during the year under consideration which has been accounted while consolidating its financial statements with the Company. Your Company till 31st March, 2014 has invested a sum of Rs.302.42 Lacs (Previous Year Rs.302.42 Lacs) in LFF as its capital contribution. The financial results of LFF have been consolidated with the Company in compliance with AS-21 of the Accounting Standard issued by the Institute of Chartered Accountants of India.

As required under the Listing Agreements entered into with the Stock Exchanges, Consolidated financial statements of the Company and its subsidiary Company is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C] of the Companies Act, 1956.

The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiary.

Pursuant to the provision of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its circular No. 2/2011, dated February 8, 2011 has granted general exemption from attaching the Balance sheet, statement of profit and loss and other documents of the wholly owned subsidiary company with the Balance sheet of the Company.

A statement containing brief financial details of the Company''s wholly owned subsidiary for the financial year ended March 31, 2014 is included in the annual report. The annual accounts of the wholly owned subsidiary and the related information will be made available to any member of the Company/its wholly owned subsidiary seeking such information and are available for inspection by any member of the Company/ its wholly owned subsidiary at the Registered Office of the Company.

Appropriations:

Dividend

Your Directors have recommended a dividend of Rs.1.50/- per Equity Share on Rs.17,04,00,000 Equity Share Capital (i.e. 15% on equity share of no/- each) for the financial year ended 31st March, 2014 for the payment to the shareholders subject to the approval of the members at the ensuing Annual General Meeting. The total outflow on equity dividend including corporate tax on dividend for the year ended 31st March, 2014 will be Rs.299.04 Lacs as against Rs.Nil paid last year. The dividend, if approved at the ensuing Annual General Meeting of the Company will be payable to those shareholders whose names appear on the Company''s register of members as at the end of 22nd September, 2014. In respect of shares held in dematerialized form, the dividend shall be payable on the basis of beneficial ownership as at the end of 22nd September, 2014 as per the details furnished by National Securities Depositories Ltd/Central Depositories Services (India) Ltd. for the purpose, as on that date.

Transfer to Reserves

Your Directors proposed to transfer Rs.600.00 Lacs (Previous Year Rs.600.00 Lacs) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.440.41 Lacs (Previous Year Rs.117.29 Lacs) has been proposed to be retained in the Profit & Loss Account of the Company. Amalgamation

In terms of Scheme of Amalgamation under section 391 to 394 of the Companies Act, 1956 sanctioned by the respective Order of Hon''ble High Court of judicature at New Delhi and Hon''ble High Court of Punjab & Haryana judicature at Chandigarh for the amalgamation of Wholly Owned Subsidiary i.e Liberty Retail Revolutions Ltd with the Company, the Copy of the said Orders were filed with the Registrar of Companies, NCT of Delhi & Haryana within requisite time frame to give effect to the said Amalgamation. The said amalgamation was made effective from 1st April, 2013 i.e the Appointed date and accordingly, the results of the retail subsidiary were also included in the stand alone results of the Company. As per approved Scheme of Amalgamation, the accounting for the amalgamation was 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. Employees Stock Option Scheme(s):

During the year ended 31st March, 2014, your Company

has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Risk Management:

The Management of the Company has formulated and established the process and procedure of assessing the risk to control at early stage. The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

The Company has not accepted/renewed any public deposits during the year under consideration.

Board of Directors:

Retirement by rotation

Sh. Adesh Kumar Gupta and Sh. Satish Kumar Goel, Directors of the Company, retire by rotation in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible offer themselves for the re- appointment at the ensuing Annual General Meeting.

A brief profile along with the necessary details of Directors seeking their appointment/ re-appointment thereof has been provided in the Annexure-A of the Annexure to the Notice of the Annual General Meeting as required under Clause 49 of the Listing Agreement entered into with Stock Exchange(s).

Resignation by the Director of the Company Sh. Premchand Garg, Independent Director of the Company since 2005, due to his pre-engagements, has resigned from the office of Director w.e.f. 29th May, 2014. The Board has accepted his resignation and put on record their appreciation for the valuable services rendered by him as Director of the Company.

Directors'' Responsibility Statement:

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors to the best of their knowledge and belief confirm that:

I) in preparation of the Annual Accounts as on 31st March 2014, of the Company, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii] they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

iii] they have taken proper and sufficient care for maintenance of adequate accounting records with in the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

Recommendations / Observations of Audit Committee:

The recommendations / observations of the Audit Committee placed before the Board during the financial year ended 31st March, 20U in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company. Statutory Auditors and their Report:

M/s Pardeep Tayal & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility for re- appointment. With the implementation of New Companies Act, 2013 and applicable provisions thereof, the Statutory Auditors of the Company shall be re-appointed for next three financial years only commencing from F.Y. 2014-15 subject to ratification by members of the Company every year on every Annual General Meeting. A Certificate from the Auditors has been received to the effect that their appointment, if made, would be within the limits prescribed under Section 141 (3) (g) of the Companies Act, 2013 and they are not disqualified for re- appointment.

Your Company''s Directors have examined the Statutory Auditors'' Report on Annual Accounts of the Company and observed that no reservation, qualification or adverse remark was made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report.

Cost Auditors:

Your Directors have re-appointed M/s K. L. Jaisingh & Co., Cost Accountants, as the Cost Auditors of the Company in accordance with Section 148 of the Companies Act, 2013 for the financial year 2014-15 for conducting the audit of cost records of the Company and fixed their remuneration. The said appointment and their remuneration shall be subject to ratification by the shareholders in the ensuing Annual General Meeting.

The compliance report in respect of Cost records for the preceding Financial Year ended March 31, 2013 with requisite annexure issued by M/s K. L. Jaisingh & Co., Cost Accountants, has been filed with the Central Government within the statutory due date as prescribed under the applicable provisions of Companies Act, 1956 or any enactment thereof.

Particulars of Employees:

During the year, no employee, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 217(2A) of the Companies Act, 1956 and rules framed there under. Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors] Rules, 1988 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure A'''' forming part of this report.

Management Discussion and Analysis Report:

In terms of provisions of Clause 49(IV)(F) of the Listing Agreement with Stock Exchange(s), a Management Discussion and Analysis Report, stating the required matters in respect of the developments in footwear Industry and risks etc., has been attached to this Annual Report.

Corporate Governance Report:

In accordance with the provisions under the Clause 49 of Listing Agreement and as amended by the SEBI from time to time, the Board of Directors have prepared the Corporate Governance Report detailing the compliance report of Corporate Governance. Accordingly, a separate section on Corporate Governance along with Statutory Auditors'' certificate confirming the compliance is annexed and forms part of this Annual Report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs.17,04,00,000/-(Previous Year Rs.17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of no/- each and these Equity Shares are presently Listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).

Acknowledgements:

Your Directors place on record their sincere appreciation for the cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedication.

For and on behalf of the Board of Directors

Adesh Kumar Gupta

Chairman of the Meeting

Place: Libertypuram, Karnal Dated: Thursday, 29th May, 2014

---

Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 27th Annual Report of the Company together with the Audited Annual Accounts for the financial year ended 31stMarch, 2013.

In addition to the Audited Annual Accounts for the financial year ended 1st March, 2013, your Company has also presented its consolidated financial statements after considering the Audited Annual results of its retail subsidiary Liberty Retail Revolutions Limited and overseas wholly owned subsidiary Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement with the Stock Exchanges.

Financial Highlights (Standalone):

The highlights of the financial statements are as unden- ts In Lacs

Particulars 2012-13 2011-12

Gross Sales 35,272.92 34,622.82

Less: Excise Duty 1,520.64 1,394.30

Net Sales 33,752.28 33,228.52

Add: Other Income 182.12 103.84

Revenue from Operations and Other Income 33,934.40 33,332.36

Profit before Depreciation, Finance Costs and Tax 2,759.73 2,958.25

Less: Finance Costs 1,230.09 1,172.60

Less: Depreciation & Amortisation 805.12 738.91

Profit Before Exceptional Items 724.52 1,046.74

Less: Exceptional Items 19.49 323.83

Profit Before Tax Expense 705.03 722.92

Less: Tax Expenses (12.26) (39.72)

Net Profit for the year 717.29 762.64

Add: Opening Balance 4,329.91 4,167.27

Profit Available for Appropriation(s) 5,047.20 4,929.91

Less: Transfer to General Reserve 600.00 600.00

Surplus carried to Balance Sheet 4,447.20 4,329.91

Review of the operations of the Company:

Your Directors are always of the view that Indian footwear industry has huge potential due to its intrinsic strengths and this industry would further grow because of change in consumption habits and consumer awareness. In its efforts to exploit the available potential, your Company has been working to improve its presence in the footwear market where it has always been considered as a leader and known for its fashion consciousness.

Your Company, during the year under consideration, has achieved Gross Sales of Rs.35,272.92 Lacs (Previous year Rs.34,622.82 Lacs) and Net Sales of Rs.33,752.28 Lacs (Previous year 33,228.52 Lacs). During the year, under review the domestic sales performance has improved as against the previous year but on the exports side the sales have declined due to global economic slowdown.

Your Company, during the year under review, registered a profit after tax of Rs.717.29 Lacs as against Rs.762.64 Lacs in the corresponding previous year. The rising input cost has been the concern area for which the Company is taking effective steps to control and to suitably pass it on to the consumers. The expansion of I reach, frequent fashionable launch to attract customers and selective outsourcing of footwear with quality compliance are the few steps the Company has implemented to improve the overall efficiency of the Company.

Your Directors, in view of the benefits available to the Company and after obtaining the requisite approval from the Central Government in terms of applicable provisions of the Companies Act, 1956, have authorized and approved the agreement(s) entered in to by the Company with (i) Liberty Group Marketing Division (LGMD) for use of services of Fixed Assets for manufacturing at Karnal (Haryana), registered Trademarks and Domestic Sales Network for sale of footwear for a period of 2 (two) years (ii) Liberty Enterprises (LE) for use of footwear manufacturing facilities at Karnal and export sales network for a period of 2 (two) years and (iii) Liberty Footwear Co. (LFC) for use of trademark "LIBERTY" and other marks on exclusive basis for a period of 15 (Fifteen) years, against payment of minimum guaranteed obligation. Your Company, in future, has plans to restructure these arrangements with emphasis to unlock shareholders value, the details of which shall be placed before the members appropriately.

Your Company, during the year under review, registered consolidated turnover of Rs.37,806.65 Lacs as compared to Rs.37,033.59 Lacs in the previous year. The net profits on consolidated basis are Rs.538.78 Lacs as compared to T438.40 Lacs in the previous year.

Your Directors are constantly making their efforts to improve the working of the Company with optimal utilization of available resources and have also intended to further consolidate the business including amalgamation of its retail subsidiary with the Company.

Corporate Social Responsibility:

Liberty, considering its responsibility, has identified the following areas to make its contribution towards society:

- Medical care for the community at large in the areas close to the Company''s plants.

- Supporting education of the workers'' children.

- Charitable donations and the maintenance of the public amenities.

k - Green initiatives through tree plantations at plants of the Company.

Subsidiary Companies:

Liberty Retail Revolutions Ltd (LRRL), Retail Subsidiary

For the year under consideration, LRRL''s performance has been satisfactory and it has recorded a cash profit as against the cash loss during the corresponding previous year. During the year under consideration, LRRL has achieved turnover of Rs.5,975.73 Lacs (Previous year Rs.5,786.51 Lacs).

Your Company, as on 31st March, 2013, holds 1,06,50,000 Equity Shares constituting 100% stake in Retail Subsidiary in addition to 5,00,000 Fully Convertible Debentures of the face value of Rs.100 each aggregating to Rs.500 Lacs.

Your Directors, as reported earlier also, have approved the Scheme of Amalgamation of M/s Liberty Retail Revolutions Ltd. (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 necessary formalities as required to effect the above said amalgamation have already been initiated. Your Directors are of a view that the scheme is consistent with the objective of consolidating the business leading to operational efficiencies.

Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Overseas Subsidiary)

Your Company till 31st March, 2013 has invested a sum of Rs.302.42 Lacs (Previous Year Rs.302.42 Lacs) in LFF as its capital contribution. The financial results of LFF have been consolidated with the Company in compliance with AS-21 of the Accounting Standard issued by the Institute of Chartered Accountants of India.

General Approval for not attaching the Annual Accounts of the Subsidiary Companies

Your Board of Directors have accorded their consent vide Resolution passed in their Meeting held on 29'' May, 2013 for not attaching a copy of the Balance Sheet, Statement of Profit & Loss, Reports of Directors and Auditors of the Subsidiary Companies with the Audited Annual Accounts of the Company pursuant to Section 212 of the Companies Act, 1956 read with General Circular No. 2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs. Accordingly, the copies of Balance Sheet, Statement of Profit & Loss, Reports of Directors and Auditors of the two Subsidiary Companies have not been attached with the Annual Accounts of the Company. However, these documents shall be made available to the shareholders of the Company and of Subsidiary Companies on any working day from 10.00 A.M. till 1.00 RM. The Annual Accounts of the Subsidiary Companies are open for inspection by any shareholder at the Registered Office of the Company and of the Subsidiary Companies. Any shareholder of the Company, who wishes to obtain a copy of the said Annual Accounts of the Subsidiary Companies, may send a request in writing to the Company Secretary at the Registered Office of the Company.

However, a statement containing the brief financial details of the subsidiary Companies for the financial year ended 31st March, 2013 is included in the financial statements of the Company as required under the provisions of Section 212 of the Companies Act, 1956. The aggregate amount of a) Capital b) Reserves c) Total Assets d) Total Liabilities e) Detail of Investment (except investment in subsidiaries) f) Turnover g) Profit Before Taxation h) Provision For Taxation i) Profit After Taxation j) Proposed Dividend in respect of two Subsidiary Companies are included in the Consolidated Balance sheet of the Company. Further, the Consolidated Financial Statements pursuant to the Accounting Standard-21 as issued by the Institute of Chartered Accountants of India and Clause 32 of the Listing Agreement have been presented by the Company elsewhere in this Annual Report including the financial results of its subsidiaries.

Appropriations:

Dividend

Your Directors, in view of financial requirements for the Company, do not recommend dividend on Equity Share Capital of the Company to the shareholders for the financial year ended 31" March, 2013.

Transfer to Reserves

Your Directors proposed to transfer Rs.600.00 Lacs (Previous Year Rs.600.00 Lacs) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.117.29 Lacs (Previous Year Rs.162.64 Lacs) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s):

During the year ended 31st March, 2013, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Risk Management:

The Management of the Company has formulated and established the process and procedure of assessing the risk to control at early stage. The Management of the Company has always been consciously reviewing its business operations in accordance with set rules and procedure and if any deviation or risk is found, remedial and effective steps are being taken to minimize the deviation and risk.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

In terms of the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975, the Company has not accepted any public deposits during the year under consideration.

Board of Directors:

Retirement by rotation

Sh. Amitabh Taneja, Sh. Shammi Bansal, Sh. Vivek Bansal and Sh. Adeesh Kumar Gupta, Directors of the Company, retire by rotation in pursuance of the provisions of Section 256 of the Companies Act, 1956 and being eligible offer themselves for the re- i appointment at the ensuing Annual I General Meeting.

A brief profile along with the necessary details including a memorandum of interest of Directors seeking their appointment/ re-appointment thereof has been provided in i Annexure - A of Annexure k to the Notice of the Annual i General Meeting as J required under Clause 49 of the Listing Agreement entered into with Stock Exchange(s) and the provisions of section 302 of the Companies Act, 1956.

Expiry of tenure of Director (Law & Taxation)

The Members of the Company, in their meeting held on 28th September, 2011 had approved the appointment of Sh. Satish Kumar Goel as "Director (Law & Taxation)"with remuneration w.e.f. 1st April, 2011 for a period of two years and accordingly, his appointment as "Director (Law & Taxation)" expired on 31st March, 2013. However, Sh. Satish Kumar Goel shall be continuing as Director of the Company subject to retirement by rotation pursuant to the provisions of Section 256 of the Companies Act, 1956.

Increase in Remuneration of Sh. Adesh Kumar Gupta, CEO & Executive Director, Sh. Adarsh Gupta, Sh. Shammi Bansal, Sh. Sunil Bansal and Sh. Adeesh Kumar Gupta, Executive Directors of the Company

Sh. Adesh Kumar Gupta, CEO & Executive Director, Sh. Adarsh Gupta, Sh. Shammi Bansal, Sh. Sunil Bansal and Sh. Adeesh Kumar Gupta, Executive Directors of the Company have been associated with the Company since very long period and devoting their time, experience and efforts in the day to day operations and management of the Company. The respective Executive Directors are being paid remuneration of Rs.1,00,000/- p.m. which does not commensurate with the services they rendered for the Company and remuneration being paid for this position in the similar industry. Your Directors have, therefore, proposed to increase their remuneration from Rs.1,00,000/- p.m. to Rs.4,00,000/- p.m. including perquisites as per Company''s rules w.e.f. 1" April, 2013 subject to the approval of the Members of the Company in the forthcoming Annual General Meeting. The remuneration payable to the aforesaid executive directors has also been approved by the Remuneration Committee. The enabling resolution(s) with explanatory statement incorporating all the requisite details including their tenure are included elsewhere in this Annual Report.

Directors'' Responsibility Statement:

Pursuant to section 217(2AA) of the Companies Act 1956, the Directors to the best of their knowledge and belief confirm that:

i) in preparation of the Annual Accounts as on 31st March 2013, of the Company, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

iii) they have taken proper and sufficient care for maintenance of adequate accounting records with in the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

Recommendations / Observations of Audit Committee:

The recommendations / observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2013 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report:

M/s Pardeep Tayal & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility for re- appointment.

Your Company''s Directors have examined the Statutory Auditors'' Report on Annual Accounts of the Company and observed that no reservation, qualification or adverse remark was made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report.

Cost Auditors:

The Central Government vide its Order F. No. 52/26/CAB-2010 dated 24/01/2012 read with the Companies (Cost Accounting Records) Rules, 2011 dated 03/06/2011 has made optional the Audit of cost records in respect of certain industries including footwear for the financial year 2012-13. Under the applicable rules, the Companies not covered for mandatory Cost Audit are required to file compliance report in respect of Cost records with the Central Government for the financial year 2012-13.

Your Directors have appointed M/s K. L. Jaisingh & Co., Cost Accountants for carrying out due diligence and issuance of the requisite compliance report for the financial year 2012-13 in compliance with the applicable provisions.

The Cost Audit Report for the preceding Financial Year ended March 31, 2012 with requisite form(s) duly filled and signed has been filed with the Central Government within the statutory due date as prescribed under the applicable provisions.

Particulars of Employees:

During the year, no employee, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 217(2A) of the Companies Act, 1956 and rules framed there under.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 217(l)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure A" forming part of this report.

Management Discussion and Analysis Report:

In terms of provisions of Clause 49(IV)(F) of the Listing Agreement with Stock Exchange, a Management Discussion and Analysis Report, stating the required matters in respect of the developments in footwear Industry and risks etc., has been attached to this report.

Corporate Governance Report:

In accordance with the provisions under the Clause 49 of Listing Agreement and as amended by the SEBI from time to time, the Board of Directors have prepared the Corporate Governance Report detailing the compliance report of Corporate Governance. Accordingly, a separate section on Corporate Governance along with Statutory Auditors'' certificate confirming the compliance is annexed and forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of 71 7,04,00,000/-(Previous Year 71 7,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs.10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).

Acknowledgements:

Your Directors place on record their sincere appreciation for the cooperation and support received from the shareholders, Bankers, Channel Partners and the Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedication.



For and on behalf of the Board of Directors

Adesh Kumar Gupta

Chairman of the Meeting

Place: Libertypuram, Karnal

Dated: Wednesday, 29,th May, 2013

---

Mar 31, 2012

The Directors have pleasure in presenting the 26th Annual Report of the Company together with the Audited Annual Accounts for the financial year ended 31s1 March, 2012.

In addition to Audited Annual Accounts for the financial year ended 31st March, 2012, your Company has also presented its consolidated financial statements after considering the Audited Annual results of its subsidiaries namely Liberty Retail Revolutions Ltd. and Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement with the Stock Exchanges.

Financial Highlights:

The highlights of the financial statements are as under:-

(Rs. In Lacs)

Particulars 2011-12 2010-11

Gross Sales 34622.82 30530.02

Less: Excise Duty 1394.30 835.99

Net Sales 33228.52 29694.03

Add: Other Income 103.84 125.43

Revenue from Operations and Other Income 33332.36 29819.46

Profit before Depreciation, Finance Costs and Tax 2958.25 2516.29

Less: Finance Costs 1172.60 820.89

Less: Depreciation & Amortisation 738.91 680.94

Profit Before Exceptional Items 1046.74 1014.45

Less: Exceptional Items 323.83 6.65

Profit Before Tax Expense 722.92 1007.80

Less: Tax Expenses (39.72) (0.48)

Net Profit for the year 762.64 1008.27

Add: Opening Balance 4167.27 3759.00

Profit Available for Appropriation(s) 4929.91 4767.27

Less: Transfer to General Reserve 600.00 600.00

Surplus carried to Balance Sheet 4329.91 4167.27

Review of the operations of the Company:

Your Company, during the year under review, achieved Gross Sales of Rs.34,622.82 Lacs (Previous year Rs. 30530.02 Lacs) and Net Sales of Rs.33228.52 Lacs (Previous year Rs.29694.03 Lacs) by registering a growth of 13.41% & 11.90% respectively as compared to the previous year. The operating margins of the Company during the year under consideration have improved but the net profit margins are affected due to high interest costs. The net profits are further reduced due to booking of exceptional items on account of payment made to the bank against the corporate Guarantee extended for securing credit facilities to its erstwhile Joint Venture Company.

Your Company, as informed earlier has implemented unique process for getting overall improvement in its operation through expanding its well planned range, reach and strengthening of its replenishment model. Your directors feel that this process would take some more time to fully deliver its expected results.

Your Directors believe that sustained investments in brand would support its business in creating the long term value. Accordingly during the year, your Company has spent out substantially towards celebrity endorsement, leading fashion contests and other promotional means to ensure further enhancement of its brand value.

Your Company, during the year under review, registered consolidated turnover of Rs.37033.59 Lacs as compared to Rs.31826.23 Lacs in the previous year. The net profits on consolidated basis are Rs.438.40 Lacs as compared to Rs.618.31 Lacs in the previous year.

Your directors are closely working and taking appropriate steps for the improvement in the Company including optimum utilisation of assets. Your directors, before the date of signing of the balance sheet, have decided to dispose off some of the idle land & building to improve liquidity in the Company's operations.

Corporate Social Responsibility:

Working towards social responsibilities has always been integral to Your Company's way of performing its business. Few of the corporate social responsibility undertaken by Liberty during the year 2012 are

Support importance to the health and well being and development of all its employees and their families.

- Awarding of scholarship awards to the meritorious students of its labour force and the other students living with them in the neighboring community.

Necessary contribution towards maintenance of roads near to its plants and places of worships and charitable institutions.

- Sponsorship of sports and other cultural events.

- Providing of greenery through plantation of trees at its plants and also focusing on its efforts to reduce fuel consumption wherever possible.

- Free distribution of shoes to the poor and needy children. Subsidiary Companies:

Liberty Retail Revolutions Ltd (LRRL), Retail Venture

During the year under consideration, LRRL has achieved turnover of Rs.5786.81 Lacs (Previous year Rs.4799.73 Lacs) by registering a growth of around 20% as against the previous year. The overall working of LRRL has improved but in view of its conscious decision, has not undertaken aggressive expansion program and augmented its retail reach with limited number of stores.

Presently the retail industry is in process of consolidation because of changing environment and increasing competition. This industry has always been treated as capital intensive with low margin and potential of huge volumes. In order to fully exploit the opportunities in retail and to provide requisite speed with the financial leverage of the parent Company, your Directors have decided to amalgamate LRRL with the Company and has approved in principle proposal of the said amalgamation.

As of now, your Company holds 99,96,150 Equity Shares constituting 93.86% stake in Retail Subsidiary in addition to 5,00,000 Fully Convertible Debentures of the face value of Rs.100 each aggregating to Rs.500 Lacs. During the year under consideration your Company has also extended loan amounting to Rs.950 Lacs (Previous Year Rs.Nil) to LRRL for meeting out their business requirements. Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Subsidiary)

Your Company till 31st March, 2012 has invested a sum of Rs.302.42 Lacs (Previous Year Rs.294.67 Lacs) in LFF as its capital contribution. The financial results of LFF have been consolidated with the Company in compliance with AS-21 of the Accounting Standard issued by the Institute of Chartered Accountants of India.

General Approval for not attaching the Annual Accounts of the Subsidiary Companies

Your Board of Directors have accorded their consent vide Resolution passed in their Meeting held on 11"1 May, 2012 for not attaching a copy of the Balance Sheet, Profit & Loss Account, Reports of Directors and Auditors of the Subsidiary Companies with the Annual Audited Accounts of the Company pursuant to Section 212 of the Companies Act, 1956 read with General Circular No. 2/2011 dated February 8, 2011 issued by Ministry of Corporate Affairs. Accordingly, the copies of Balance Sheet, Profit & Loss Account, Reports of Directors and Auditors of the two Subsidiary Companies have not been attached with the Annual Accounts of the Company. However, these documents shall be made available to the shareholders of the Company and of Subsidiary Companies on any working day from 10.00 A.M. till 6.00 PM. The Annual Accounts of the Subsidiary Companies are open for inspection by any investor at the Registered Office of the Company and of the Subsidiary Companies. Any shareholder of the Company, who wishes to obtain a copy of the said Annual Accounts of the Subsidiary Companies, may send a request in writing to the Company Secretary at the Registered Office of the Company so that the needful can be done.

However, a statement containing the brief financial details of the subsidiary Companies for the financial year ended 31st March, 2012 is included in the financial statements of the Company as required under the provisions of Section 212 of the Companies Act, 1956. The aggregate amount of a) Capital b) Reserves c) Total Assets d) Total Liabilities e) Detail of Investment (except investment in subsidiaries) f) Turnover g) Profit Before Taxation h) Provision For Taxation i) Profit After Taxation j) Proposed Dividend in respect of two Subsidiary Companies are included in the Consolidated Balance sheet of the Company. Further, the Consolidated Financial Statements pursuant to the Accounting Standard(s) 21 and 27 as issued by Institute of Chartered Accountants of India and Clause 32 of Listing Agreement have been presented by the Company elsewhere in this Annual Report including the financial results of its subsidiaries.

Appropriations:

Dividend

Your Directors, in view of financial requirements for the Company, do not recommend dividend on Equity Share Capital of the Company to the shareholders for the financial year ended 31st March, 2012.

Transfer to Reserves

Your Directors proposed to transfer Rs.600.00 Lacs (Previous Year Rs.600.00 Lacs) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs.162.64 Lacs (Previous Year Rs.408.27Lacs) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s):

During the year ended 31st March, 2012, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard. Risk Management:

The Management of the Company has laid down and implemented the proper procedure of assessment of risk and minimization thereof. The Management of the Company has reviewed periodically the operations involving the business risk and wherever required, they have taken effective and suitable steps to minimize the same.

Buy Back of Equity Shares:

Your Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

In terms of the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975, the Company has not accepted any public deposits during the year under consideration.

Board of Directors:

Appointment of Sh. Ramesh Chandra Palhan as Director

Sh. Ramesh Chandra Palhan was appointed as an Additional Director of the Company w.e.f. 28th March, 2012. Sh. Palhan was further proposed by a Member of the Company to be appointed as Director of the Company in terms of provisions of Section 257 of the Companies Act, 1956. The Board, considering his past experience and in the interest of the Company and subject to approval of the members in the forthcoming Annual General Meeting of the Company, proposed Sh. Palhan to be appointed as Director of the Company.

Appointment of Sh. Pushpinder Singh Grewal as Director

Sh. Pushpinder Singh Grewal was appointed as an Additional Director of the Company by the Board at their meeting held on 28th August, 2012. Sh. Grewal was further proposed by a Member of the Company to be appointed as Director of the Company in terms of provisions of Section 257 of the Companies Act, 1956. The Board, subject to approval of the members in the forthcoming Annual General Meeting of the Company, proposed Sh. Grewal to be appointed as Director of the Company in the forthcoming Annual General Meeting.

The aforesaid appointments of Sh. Ramesh Chandra Palhan and Sh. Pushpinder Singh Grewal are being proposed by separate Resolution(s) which form part of the Notice of the ensuing Annual General Meeting.

Resignation of Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya, Independent Directors

Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya, Independent Directors of the Company stepped down from the office of directorship w.e.f 31s1 August, 2011 and 22nd February, 2012 respectively due to their pre-occupation. The Board acknowledges and places on record its sincere appreciation for the contributions made by Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya during their tenure as Independent Directors of the Company.

Retirement by rotation

Sh. Satish Kumar Goel, Sh. Raghubar Dayal and Sh. Prem Chand Garg, Directors of the Company retire by rotation in pursuance of the provisions of Section 256 of the Companies Act, 1956 and being eligible offer themselves for the re-appointment at the ensuing Annual General Meeting.

A brief profile along with the necessary details including memorandum of interest of Directors seeking their appointment/re-appointment thereof has been provided Annexure - A of Annexure to the Notice of the Annual General Meeting as required under Clause 49 of the Listing Agreement entered into with Stock Exchange(s) and the provisions of section 302 of the Companies Act, 1956.

Increase in salary of Sh. Satish Kumar Goel, "Director (Law & Taxation)"

Sh. Satish Kumar Goel was re-appointed as "Director (Law & Taxation)" w.e.f 1s1 April, 2011 for a period of 2 years in the 25th Annual General Meeting held on 28th September, 2011 at a monthly salary of Rs.75,000/- per month with perquisites as per the rules of the Company. Your Directors, considering his expertise and requirement of the Company, has entrusted him with certain additional responsibilities and approved an increase in the salary of Sh. Goel from Rs.75,000/- per month to Rs.1,50,000/- per month, w.e.f. 1st October, 2012 subject to approval of the Members of the Company in the forthcoming Annual General Meeting. The salary payable to Sh. Goel has also been approved by the Remuneration Committee at their Meeting held on 28th August, 2012.

Directors' Responsibility Statement:

Pursuant to section 217(2AA) of the Companies Act 1956, the Directors to the best of their knowledge and belief confirm that:

i) in preparation of the Annual Accounts as on 31s1 March 2012, of the Company, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

iii) they have taken proper and sufficient care for maintenance of adequate accounting records with in the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

Recommendations / Observations of Audit Committee:

The recommendations / observations of the Audit Committee placed before the Board during the financial year ended 31s1 March, 2012 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report:

M/s Pardeep Tayal & Co., Chartered Accountants, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility for re- appointment.

Your Company's Directors have examined the Statutory Auditors' Report on Annual Accounts of the Company and observed that no reservation, qualification or adverse remark was made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report.

Cost Auditors:

Pursuant to the directives issued by the Central Government and provisions of Section 233B of the Companies Act, 1956, the Company's cost records for the financial year ended March 31, 2012 are being audited by Cost Auditors, M/s K. L. Jaisingh & Co., Cost Accountants who were appointed by the Board after seeking the approval of the Central Government.

The Cost Audit Report for the preceding Financial Year ended March 31, 2011 with requisite form(s) duly filled and signed has been filed with the Central Government within the statutory due date as prescribed under the applicable provisions. Further, the Cost Audit Report for the financial year ended on March 31, 2012 shall be filed on or before the due date as per the said provisions.

Particulars of Employees:

During the year, no employee, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 217(2A) of the Companies Act, 1956 and rules framed thereunder.

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure A" forming part of this report.

Management Discussion and Analysis Report:

In terms of provisions of Clause 49(IV)(F) of Listing Agreement with Stock Exchange, a Management Discussion and Analysis Report, clearly stating the required matters in respect of the trends and developments in footwear Industry and risks etc., has been attached to this report.

Corporate Governance Report:

In accordance with the provisions under the Clause 49 of Listing Agreement and as amended by the SEBI from time to time, the Board of Directors have prepared the Corporate Governance Report detailing the compliance report of Corporate Governance. Accordingly, a separate section on Corporate Governance along with Statutory Auditors' certificate confirming the compliance is annexed and forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs.17,04,00,000/-(Previous Year Rs.17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs.10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE).

Acknowledgements:

Your Directors wish to place on record its appreciation for the cooperation and support received from the Bankers, Channel Partners and Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedications.

For and on behalf of the Board of Directors

Place: Libertypuram, Karnal Adesh Kumar Gupta

Dated: Tuesday, 28th August, 2012 Chairman of the Meeting

---

Mar 31, 2010

The Directors have pleasure in presenting the 24th Annual Report of theTT Company together with the Audited Annual Accounts for the financial year ended 31st March, 2010.

In addition to Audited Annual Accounts for the financial year ended 31st March, 2010, your Company has also presented its consolidated financial statements after considering the annual audited results of its subsidiaries namely Liberty Retail Revolutions Ltd. and Liberty Foot Fashion Middle East FZE in accordance with the requirements of the applicable Accounting Standards and provisions of the Listing Agreement with the Stock Exchanges.

Financial Highlights:

The highlights of the financial statements are as under:-

(Rs In Lacs)

Particulars 2009-10 2008-09

Gross Sales 26611.48 24752.66

ExporT 3795.46 3751.43

Domestic 22816.02 21001.23

Less: Excise Duty 544.62 708.28

Net Sales 26066.86 24044.37

Other Income 73.46 140.79

Profit before Interest and Depreciation 2464.13 2609.18

Interest 852.71 221.04

Depreciation 679.25 659.46

Profit before taxation 932.15 728.68

Provision for Taxation & Deferred tax liability (35.06) (25.84)

Profit after tax 967.21 754.52

Add / (Less): Previous year Adjustment (46.90) (2.43)

Net Profit for the year 920.31 752.09

Add: Opening Balance 3438.69 3286.60

Profit Available for Appropriation(s) 4359.00 4038.69

Transfer to General Reserve 600.00 600.00

Surplus carried to Balance Sheet 3759.00 3438.69

Review of the operations of the Company:

Your Company, as reported earlier, has been going through with the implementation of a complete turnaround strategy to reinforce and strengthen its marketing segments, its supply chain management and its working capital efficiencies. Your Directors have pleasure in informing that the strategic changes have started showing positive results, which though not completely according to estimates but nevertheless improvement is happening.

Your Company has achieved a turnover of Rs26611.48 Lacs (Previous Year Rs24752.66 Lacs) and registered a growth of 28.19% in its Net Profits of Rs 967.21 for the financial year 2009-10 as against the previous financial years Net Profits of Rs,754.52.

The number of pairs produced and sold during the year under review has increased endorsing Libertys potential and penetration in the growing footwear market. The wholesale & retail segments have been strengthened with the addition of new distributors and new exclusive franchisees to the existing set up. To facilitate and to achieve better customer services, significant improvements have been made in planning & logistics efficiencies as well. The thrust was to improve service levels to ensure availability of Companys products at all points in its supply chain. In order to improve working capital efficiencies, stringent measures have been adopted, which resulted in improved inventories and receivables.

During the year under consideration, your Company has continued its thrust towards delivering best quality and ensuring customers delight. This was supplemented by the Companys qualitative initiatives at different levels. Your Company in order to achieve a competitive advantage has also invested substantially in Information Technology and successfully established a transaction mechanism which would be implemented at all Franchise Stores pan India, and will also be rolled over with all other channel partners of the Company.

In view of the ongoing strategic developments, Your Directors are hopeful of further improvement in the performance of the Company in the years to come.

Awards / Recognition:

Your Company, during the year under consideration, has been conferred with the "Elite Membership" by the World Confederation of Business, Texas, USA in recognition of its distinguished successful business model. This Confederation is a renowned international organization, which encourages business development worldwide and recognizing Companys growth along with business leaders in each country.

During the year, Liberty has also been recognized by Department of Industrial Policy & Promotion, Ministry of Commerce and Industry, Government of India for its initiatives towards technology up gradation and modernization.

Corporate Social Responsibility:

Liberty has always been conscious about its responsibilities towards the society and environment. Whenever any opportunity comes across, Liberty has never hesitated to provide the necessary assistance to the needy. During the year under review, Liberty took pride in associating itself with the Nation for felicitating the winners of National Bravery Awards. Besides, Liberty, considering its duty and commitment to the Nation, has also decided to participate in the relief operations at recent flash flood at Leh by distributing shoes to the affected people.

Liberty, in order to create green and better environment has also made environmental arrangement with an Infrastructural Environment Company for treatment and disposal of hazardous wastes generated at its plants at Haryana.

Subsidiary Companies and Joint Venture:

Liberty Retail Revolutions Ltd. (LRRL), Retail Subsidiary

Despite the competition and low profit margins in the Indian Retail Industry, LRRLs performance during the year under consideration has been satisfactory and noteworthy as it has achieved a turnover of Rs 3513.82 Lacs with a growth of 39% as against the previous year. LRRL is optimistic about the changing trends expected in the retail sector being accompanied by the conception of customers brand consciousness. Poised with strong brand recognition, LRRL has expanded its retail presence to 92 stores as against 49 in the previous year.

LRRL, in order to capitalize the booming Indian Retail Industry potential, has also decided to further expand its existing business network. LRRL has raised Rs500.00 Lacs from your Company during the year 2009-10 by issuing 5,00,000 Zero % Fully Convertible Debentures to the Company.

Your Company holds 99,96,150 Equity Shares constituting 93.86% stake in its Retail Subsidiary.

Liberty Foot Fashion Middle East FIE (LFF), Overseas Subsidiary

Due to unforeseen recession in Dubais economy, LFF has not formalized any sustainable project to commence its business activities in accordance with the plans conceived initially. However, with progressive approach of regulatory bodies, LFF expects to explore the right opportunities in Footwear Industry through UAE for commencing operations shortly.

Your Company till 31st March, 2010 has invested a sum of Rs 250.58 Lacs (Previous Year Rs 248.62 Lacs) in LFF.

Foot Mart Retail India Limited (FMRIL), Joint Venture (JV)

The Members are informed earlier that Liberty was contemplating to divest its stake from the JV besides working on its restructuring. However during the year, both the partners Pantaloon and Liberty could not reformulate any feasible business model for JV. Liberty, as planned earlier, has divested its stake in the JV to Geofin Investments Pvt. Ltd. at its stated value.

At present, Liberty does not hold any stake in the JV and the financial results of JV have not been considered for presenting the consolidated financial statements of the Company for the financial year ended 31st March, 2010.

Exemption from attaching the Annual Accounts of the Subsidiary Companies

The Company has made an application to the Central Government for seeking the exemption under Section 212(8) of the Companies Act, 1956 from attaching a copy of the Balance Sheet, Profit & Loss Account, Reports of Directors and Auditors of the Subsidiary Companies. In terms of approval granted by the Central Government vide its Order No. 47 / 606 / 2010 CL - III dated 18th June, 2010, the copy of Balance Sheet, Profit & Loss Account, Reports of Directors and Auditors of the two Subsidiary Companies have not been attached with the Balance Sheet of the Company. However, these documents shall be made available to the shareholders of the Company and of Subsidiary Companies at any working day from 10.00 A.M. till 6.00 PM. The Annual Accounts of the Subsidiary Companies are open for inspection by any investor at the Registered Office of the Company and of the Subsidiary Companies. Any shareholder of the Company, who wishes to obtain a copy of the said Annual Accounts of the Subsidiary Companies, may send a request in writing to the Company Secretary at the Registered Office of the Company so that the needful can be done.

However, a statement containing the brief financial details of the Subsidiary Companies for the financial year ended 31st March, 2010 are included in the financial statements of the Company as required under the provisions of Section 212 of the Companies Act,1956. Besides, the details of the accounts of Subsidiary Companies are also available on the website of the Company i.e. www.libertyshoes.com. Further, the Consolidated Financial Statements pursuant to the Accounting Standard(s) 21 and 27 as issued by Institute of Chartered Accountants of India and Clause 32 of Listing Agreement, presented by the Company elsewhere in the Annual Report include the financial results of its subsidiaries.

Appropriations:

Dividend

Keeping in consideration the financial requirements and to further consolidate the financial resources, your Directors do not recommend any dividend on Equity Shares Capital of the Company to the shareholders for the financial year ended 31st March, 2010.

Transfer to Reserves

Your Directors proposed to transfer Rs 600.00 Lacs (Previous Year Rs 600.00 Lacs) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of Rs 320.31 Lacs (Previous Year Rs152.10 Lacs) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s):

During the year ended 31st March, 2010, the Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Risk Management:

Proper procedures for risk assessment and minimization thereof have been laid down by the Management of the Company in accordance with the Companys exposure to the all type of business risks involved in the operations of the Company. Moreover, the same were periodically reviewed by the Management of the Company in order to ensure the adequate control over the business risks, if any, faced by the Company.

Buy Back of Equity Shares:

The Company has not undertaken any exercise to buy back its Equity Shares from the shareholders during the year under review.

Public Deposit(s):

In terms of the provisions of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975, the Company has not accepted any public deposits during the year under consideration.

Board of Directors:

Re-appointment of Executive Directors

Having regard to the past contributions of Sh. Adesh Kumar Gupta, Sh. Adarsh Gupta & Sh. Shammi Bansal towards the Company and for further strengthening of its operations, the Board of Directors of the Company have proposed to re-appoint Sh. Adesh Kumar Gupta as Chief Executive Officer and Sh. Adarsh Gupta & Sh. Shammi Bansal as Executive Directors in their Meeting held on 12th August, 2010, subject to the approval of the Members of the Company. The remuneration payable to the Executive Directors has also been approved by the Remuneration Committee of the Board at its Meeting held on 12th August, 2010.

Retirement by rotation

Sh. Shammi Bansal, Executive Director, Sh. Siddharth Sanghi and Sh. Amitabh Taneja, Independent Directors of the Company retire by rotation in pursuance of the provisions of Section 256 of the Companies Act, 1956 and being eligible offer themselves for the re-appointment at the ensuing Annual General Meeting.

A brief profile alongwith the necessary details of Directors seeking appointment / re-appointment thereof has been provided elsewhere in the Annual Report as required under Clause 49 of the Listing Agreement entered into with Stock Exchanges.

Directors Responsibility Statement:

Pursuant to section 217(2AA) of the Companies Act 1956, the Directors to the best of their knowledge and belief confirm that:

i) in preparation of the Annual Accounts as on 31st March 2010, of the Company, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the Company for that period;

iii) they have taken proper and sufficient care for maintenance of adequate accounting records with in the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

Recommendation / Observation of Audit Committee:

All the recommendations / observations of the Audit Committee, which were placed before the Board during the financial year ended 31st March, 2010 in respect of any matter pertaining to the financial management or any other matter related thereto, were duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report:

M/s Pardeep Tayal & Co., Chartered Accountants, the Statutory Auditors of the Company retires at the conclusion of the ensuing Annual General Meeting and has confirmed their eligibility for re- appointment.

The Board has examined the Statutory Auditors Report on Annual Accounts of the Company and observed that no reservation, qualification or adverse remark was made by the Statutory Auditors in their Report and

their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in the Annual Report.

Cost Auditors:

M/s K. L. Jaisingh & Co., Cost Accountants, have been appointed as the Cost Auditors of the Company for conducting the Cost Audit for the financial year 2010-11 as required under Section 233B of the Companies Act, 1956 and the requisite approval of the Central Government has also been obtained in respect of the said appointment.

Particulars of Employees:

During the year, no employee, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 217(2A) of the Companies Act, 1956 and Rules framed there under.

Conservation of Energy and Technology Absorption and Foreign Exchange earnings and outgo:

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 in relation to conservation of energy and technology absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure A" forming part of this report.

Management Discussion and Analysis Report:

In terms of provisions of Clause 49(IV)(F) of Listing Agreement with Stock Exchanges, a Management Discussion and Analysis Report, clearly stating the required matters in respect of the relevant industrial trends, developments, risks etc., have been attached to this report.

Corporate Governance Report:

In accordance with the provisions under the Clause 49 of Listing Agreement and as amended by the SEBI from time to time, the Board of Directors have prepared the Corporate Governance Report detailing the compliance report of Corporate Governance. Accordingly, a separate section on Corporate Governance alognwith Statutory Auditors certificate confirming the compliance is annexed and forms part of this report.

Outstanding Share Capital and its Listing:

Your Company has outstanding Share Capital of Rs 17,04,00,000/- (Previous Year Rs 17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of Rs 10/- each and these Equity Shares are presently listed and available for trading at National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE).

Acknowledgements:

Your Directors would like to express their appreciation and gratitude for the assistance and continuous support provided by the Stakeholders, Bankers, Channel Partners, Govt. Department(s) and all other business constituents.

Your Directors also acknowledge the efforts of its employee at all levels for their hard work, dedication and commitment towards the Company, which has enabled the Company to accomplish its objectives accompanied by full customer satisfaction and enhanced stakeholders value.

For and on behalf of the Board of Directors



Place: New Delhi Adesh Kumar Gupta

Date: Thursday, 12th August, 2010 Chairman of the Meeting