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Notes to Accounts of Liberty Shoes Ltd.

Mar 31, 2023

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

*The general reserve is used from time to time to transfer profit from retained earnings for apportion purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit and loss. FUrther,under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net profit at a specified

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of the Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn.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

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

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

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

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

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

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

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

38. Provision for doubtful debts:

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

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

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

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

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

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

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

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

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

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

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

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

49. Detail of Employee Benefits - Gratuity

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

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

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

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

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

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

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

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

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

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

53. Contingent Liabilities

(Amount in ''Lakh)

Particulars

2022-23

2021-22

I.

Bank Guarantees issued on behalf of the Company submitted with various institutional customers in terms of their orders.

214.87

429.27

II.

Letter of Credits (LCs) issued in favour of the Domestic and Overseas vendors for supply of materials/goods are for '' 227.40 Lakh out of which liabilities for '' 137.95 Lakh have been part of Trade Payables as on 31st March, 2023

89.45

III.

i

Value Added Tax for the financial year 2005-06, 2006-07, 2007-08 & 2008-09 on account of classification of goods at different rate of tax.

55.70

55.70

IV.

Value Added Tax for the financial year 2016-17 on account of classification of goods at different rate of tax.

45.35

45.35

V.

Service Tax on GTA Services for the period from January 2005 to March 2007

5.29

5.29

VI.

On account of compliance relating to obligations under EPCG Licenses

-

10.56

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2023

(Amount in '' Lakh)

Particulars

2022-23

2021-22

VII.

On account of few labour matters pertaining to earlier years which are pending before Hon''ble Labour Commissioner, Chandigarh and have been challenged by the Company being time barred.

210.00

210.00

Vlll.

Disallowance of certain expenditure on a/c of non-deduction of tax at source3 which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company is under appeal. Company has also preferred an appeal against the same before the appropriate authority and is pending for adjudication.

172.88

172.88

lX.

Disallowance of certain expenditure for the assessment year 2020-21 on a/c of non-allow-ability and some of enduring nature, grossly ignoring the past assessment history of the Company for earlier years, for which Company is under appeal. In addition, the Company has filed a petition before the Grievance Committee constituted by CBDT for such a high-pitch assessment framed under faceless mechanism andare yet to be addressed.

964.84

X.

On account of litigation initiated by some of the vendors and third parties for disputed claims before respective authorities

75.00

75.00

Xl.

On account of short deduction of Tax at Source4 in the case of erstwhile subsidiary company M/s Liberty year 2011-12, 2012-13, 2013-14 & 2014-15, for which Company has filed appeals before the appropriate authority and are pending

40.03

40.03

Xll.

On account of short deduction of Tax at Source for the assessment year 2018-19 which otherwise are not liable for deduction in terms of applicable provisions of the law and for which Company has filed appeals before the appropriate authority and are pending for adjudication.

27.51

27.51

Xlll.

On account of arbitrary additions made for the assessment year 2014-15 against which partly relief has already been granted by the appellate authority in favour of the Company and the department as well as the Company are in appeal before the Hon''ble ITAT for the same and are pending for adjudication.

46.84

46.84

XlV.

On account of reduction of deduction u/s 80IC of Income Tax Act, 1961 for the assessment year 2013-14 due to non-considering part of business income as industrial income, for which Company''s appeal is pending before Hon''ble Punjab & Haryana High Court duly allowing the interim relief as regard to the related matter.

59.14

59.14

XV.

On account of disallowance made in accordance to the provisions of section 14A of the Income Tax Act, 1961 and disallowance of certain legitimate expenses of business for the assessment year 2012-13, which has been decided by the appellate authority in favour of the Company and the department has preferred a further appeal before the Hon''ble ITAT, Delhi.

70.93

70.93

XVI.

On account of disallowance made in accordance to the provisions of section 14A of the Income Tax Act, 1961 and disallowance of certain legitimate expenses of business for the assessment year 2014-15, which has been decided by the appellate authority in favour of the Company and the department has preferred a further appeal before the Hon''ble ITAT, Delhi.

114.40

114.40

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I. Packing Materials Consumed has been

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

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

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

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

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

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

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

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

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

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

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

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

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

76. Fair Value Measurements

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

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

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

c. The carrying amount of other financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate any

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

Fair Value Hierarchy

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


Mar 31, 2018

CORPORATE INFORMATION

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

1(a) Terms/Rights attached to Equity Shares

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

*The general reserve is used from time to time to transfer profit from retained earnings for apportion purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit and loss.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

13. The Board of Directors of the Company considers and maintains “Footwear” as the only business segment of the Company.

14. Related Party Transactions

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

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

B) Detail of Related Parties and description of relationship:

i) Subsidiary Company:

Liberty Foot Fashion Middle East FZE

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

iii) Key Management Personnel:

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

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

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

iv) Relatives of Key Management Personnel:

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

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

Smt. Garima Gupta (Wife of Director)

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

15 Detail of Employee Benefits - Gratuity

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

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

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

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

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

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


Mar 31, 2016

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

Detail of Employee Benefits - Gratuity

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

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

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

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

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

Compiled by: Dion Global Solutions Limited

INSTRUCTIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Mar 31, 2015

CORPORATE INFORMATION

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

2.1.1 Terms/Rights attached to Equity Shares

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.1.18 Related Party Transactions

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

Chartered Accountants of India.

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

B) Detail of Related Parties and description of relationship:

i) Subsidiary Company:

Liberty Foot Fashion Middle East FZE

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

Geofin Investments Private Ltd., Liberty

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

Charitable Trust, Liberty Innovative Outfits

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

iii) Key Management Personnel:

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

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

iv) Relatives of Key Management Personnel:

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

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

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

2.1.19 Detail of Employee Benefits - Gratuity

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

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

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

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

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


Mar 31, 2014

CORPORATE INFORMATION

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

1.1.1 Terms/Rights attached to Equity Shares

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



2.2.1 Contingent Liabilities (Amount in Rs.)

Particulars 2013-2014 2012-2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.2.6 Related Party Transactions

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

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

B) Detail of Related Parties and description of relationship:

i) Subsidiary Companies:

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

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

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

iii) Key Management Personnel:

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

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

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

2.2.7 Detail of Employee Benefits - Gratuity

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

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

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

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

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


Mar 31, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.1.14 Basic and Diluted Earning per share:

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

1.1.15 Related Party Transactions

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

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

1.1.16 Detail of Employee Benefits - Gratuity

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

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

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

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

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

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


Mar 31, 2012

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

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

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

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

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

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

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

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

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

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

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

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

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

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

12. Contingent Liabilities

(Amount in Rs.)

2011-12 2010-11

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

17. Related Party Transactions

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

B) Detail of Related Parties and description of relationship:

i) Subsidiary Companies:

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

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

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

iii) Key Management Personnel:

18. Detail of Employee Benefits - Gratuity

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

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

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

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

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


Mar 31, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

xiii) Contingent Liabilities

(Amount in Rs)

Particulars 2009-10 2008-09

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

xviii) Related Party Transactions

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

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

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

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

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