Dear Shareholders,

Your Directors are pleased to present the 39th Annual Report of Liberty Shoes Limited ("Company" or "Liberty") together with the Audited Financial Statements for the financial year ended 31st March, 2025.

Financial Highlights:

The highlights of the financial statements are as under:-

Statutory Compliance with Financial Reporting

Your Company has prepared the Financial Statements for the year ended March 31, 2025, in accordance with Sections 129, 133 and other applicable provisions of the Companies Act, 2013, and Schedule III thereto read with the Rules framed thereunder.

During Financial Year (FY) 2024-25, your Company achieved a turnover of '. 67,465.57 Lakhs, registering a growth of 6% over ' 63,577.14 Lakhs reported in the previous year. Your Company recorded a Profit before exceptional items of ' 2,356.76 Lakh as against ' 2,019.15 Lakh of the previous year, registering a growth of 16.72%. The Net Profit for the year stood at ' 1,356.13 Lakh compared to ' 1,115.75 Lakh in the previous year, registering a growth of 21.54%. The improvement in the profitability margins were mainly on account of consistent cost optimization efforts, furtherance of process automation and working on internal campaign of overall betterment.

Your Directors with their experience and also their understanding of the current status of Footwear industry have decided to mainly concentrate on the domestic front and also agreed to pursue all channels of domestic verticals including but not limited to company's own retail stores, Liberty Exclusive stores, Distribution thru MBO's, e-commerce and the institutional segment.

Retail Expansion and Store Modernization

The Company continued its expansion in tier-II and tier-III cities through a combination of Company-owned, franchised, and distribution-led models, taking the total number of exclusive retail outlets to over 450 across India. Renovation of legacy stores with upgraded retail experience has also boosted footfalls and conversions. This retail expansion strategy has allowed the Company to bring its diverse product range closer to evolving consumer segments and deepen its penetration into underserved geographies.

E-commerce Segment in line with modern trade

The ecommerce vertical delivered strong double-digit growth during the year. Sales through the Company's own portal "libertyshoesonline.com" and established online marketplaces such as Amazon, Flipkart, Myntra, AJIO and also through outright sale to Cocoblu/Retail net saw a significant uptick, reflecting changing consumer behaviour toward digital convenience. Enhanced digital merchandising, real-time inventory mapping, targeted digital campaigns, and seamless user interfaces helped improve traffic and conversions. Investments in enhancing the digital interface, product presentation, and customer experience, coupled with strategic use of digital/ performance marketing, contributed to the increase in online traffic and conversions. Omni channel/Quick commerce initiatives such as click-and-collect, hyperlocal delivery, and improved last-mile logistics have also bolstered the Company's ecommerce performance.

Strategic alliances with leading online and offline players for OEM manufacturing augmented capacity utilization and also helped Company to bench mark its quality and its adherence to the cost estimates and the delivery deadlines.

Institutional Segment

The Safety Shoes division, particularly in the institutional, online, and distribution segments, witnessed a notable upswing during the year. This was primarily driven by rising demand from core sectors such as manufacturing, construction, and infrastructure. The Company continued to foster its longstanding relationships with its key institutional clients besides exploring new customers including housing societies & recreational clubs to further strengthen its position in this segment .

Exports-Footwear & Lifestyle including perfumes

The export front for footwear has not been on the company's priority during the year but despite that this has delivered satisfactory performance.

The newly added perfume Division, in its continued endeavour to establish a global footprint, focused on market penetration in the USA, Canada, and the UK, alongside its domestic expansion. This division recorded moderate yet steady growth in both topline and profitability, driven by strategic new product launches and extended availability through modern trade and digital platforms.

Brand Visibility Through Campaigns

Through focused marketing, seasonal campaigns, influencer collaborations, and social media outreach, Liberty strengthened its brand visibility and appeal among younger and value-conscious consumers. Brand campaigns like "Forever Sneakers" and "Mera Joota Hindustani" resonated strongly with younger and value-conscious consumers. These campaigns, backed by digital-first storytelling and endorsements, have reinforced Liberty's brand identity as a modern, youth-centric, and proudly Indian brand committed to the "Make in India" initiative.

Your Directors believe that the domestic footwear industry is poised for consistent long-term growth and Liberty, with its manufacturing competence, diversified portfolio and growing digital presence, is well positioned to make its position further stronger.

Credit Rating:

During FY 2024-25, CARE Ratings Limited reaffirmed its ratings of CARE BBB+ (Triple B Plus) for the Company's long-term banking facilities and CARE A2 (A Two) for short-term banking facilities. The stable outlook reflects continued improvement in the Company's liquidity and operating metrics.

Subsidiary Companies, their Performance & Consolidated Financial Statement:

As on the date of this Report, the Company does not have any Subsidiary, Associate, or Joint Venture.

Dividend

As the Company does not fall under the top 1000 listed companies by market capitalization as on March 31, 2025, Regulation 43A regarding Dividend Distribution Policy under SEBI (LODR) Regulations remains non-applicable. In view of reinvestment requirements and the long-term growth outlook, the Board has not recommended any dividend for FY 2024-25.

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 ' 1348.82 Lakh (Previous Year ' 1089.87 Lakh) has been proposed to be retained in the Profit & Loss Account of the Company.

Transfer to Investor Education and Protection Fund

During the year under review, there was no unpaid or unclaimed dividend as well as any corresponding shares were liable to be transferred to the Investor Education and Protection Fund, in compliance with provisions of 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.

Further as on March 31, 2025, an amount of ' 5,27,112 is lying as unpaid or unclaimed dividend which would be liable to be transferred in the year 2029. The details of the abovesaid unpaid or unclaimed dividend and any other unpaid or unclaimed dividend pertaining to any previous years which has been already transferred to IEPF can be accessed from the website of the Company i.e. https://investor.libertyshoes.com/

Employees Stock Option Scheme(s)

During the year ended 31st March, 2025, 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

Pursuant to the provisions of the Section 178 of the Act, the Board, on the recommendation of the Nomination and Remuneration Committee ("NRC"), framed and adopted a policy for identifying, recommending, 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 updated 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.

Policies on Prevention of Insider Trading

1. Your Company has adopted a code of internal procedures and conduct for regulating, monitoring and reporting of trading by insiders in accordance with the provisions of Regulation 9 of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code has been adopted 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 entails the procedures of pre-clearance for dealing in Company's shares and prohibits trading in the shares of the Company by the Promoters, Directors, Employees, designated persons and other connected persons while they are in possession of unpublished price sensitive information ("UPSI") and also during the period when the Trading Window remains closed.

2. Your Company has adopted a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information under Regulation 8 of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code aims at preventing the misuse of UPSI within the Organisation and practice of selective disclosure to the public.

Familiarisation Program

To ensure active engagement and informed participation of Independent Directors, the Company conducts familiarisation programmes from time to time. Such familiarisation programme includes detailed presentations by business and functional heads covering key aspects such as operational performance, strategic plans, new product developments, emerging technologies, and industry outlook. Upon their appointment, Non-Executive and Independent Directors undergo familiarisation programme to understand the Company's business environment. The Non executive and 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 familiarisation programs extended to the NonExecutive & 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 corrective steps are taken to minimize such 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 encompassing 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, eliminated, 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, Market Risk and Operational Risks etc. The Board of Directors periodically reviews and evaluates the suitability of 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 https:// investor.libertvshoes.com/doc/statutorv_policies/Risk%20 Management%20Policy.pdf.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Regulations 4(2)(d)(iv) and 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, the Company has not received any complaint under the Policy and 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.

Re-appointment of Directors to retire by rotation

Sh. Adish Kumar Gupta (DIN-00137612) and Sh. Ashok Kumar (DIN-06883514), Directors of the Company who will be retiring by rotation at the 39th 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 39th Annual General Meeting.

Appointment(s)/re-appointments(s) and Cessation of office of Directors

Appointment(s)/re-appointments(s):

(a) On the recommendation of Nomination and Remuneration Committee and Board of Directors, the Members of the Company, through postal ballot process which concluded on 21st June 2024, have approved:-

i. re-appointment of Sh. Sunil Bansal (DIN: 00142121), as the Executive Director of the Company, for a period of 3 years from 1st April, 2024 to 31st March, 2027;

ii. re-appointment of Sh. Shammi Bansal (DIN: 00138792), as the Executive Director of the Company, for a period of 3 years from 1st April, 2024 to 31st March, 2027;

iii. re-appointment of Sh. Adish Kumar Gupta (DIN: 00137612), as the Executive Director of the Company, for a period of 3 years from 1st April, 2024 to 31st March, 2027; and

iv. re-appointment of Sh. Ashok Kumar (DIN: 06883514), as the Executive Director of the Company, for a period of 3 years from 1st April, 2024 to 31 st March, 2027.

(b) On the recommendation of Nomination and Remuneration Committee and Board of Directors, the Members of the Company, through Postal Ballot Process which concluded on 22nd August, 2024, have approved the appointment of Sh. Anupam Bansal (DIN: 00137419) as Executive Director of the Company for a period from May 29, 2024 to March 31, 2027.

(c) The members of the Company in their 38th Annual General Meeting held on 27th September, 2024, have approved the following re-appointments:

i. Sh. Gautam Baid (DIN: 00021400) as an Independent Director of the Company for a term of 3 years effective from September 29, 2024 to September 28, 2027;

ii. Dr. Sujata (DIN: 09289128) as an Independent Director of the Company for a term of 3 years effective from September 29, 2024 to September 28, 2027;

Year

After closure of Financial Year 2024-25, on the recommendation of Nomination and Remuneration

Committee, the Board of Directors, in their meeting held on 28th May, 2025, approved the appointment of Sh. Neeraj Kumar Jindal (DIN: 00054885) as an Additional Director (Independent Category) and also recommended to members of the Company his appointment as Independent Director for a term of 3 consecutive years commencing from 28th May 2025 to 27th May 2028. The Company has sent Notice of Postal Ballot to its Members seeking their approval for the above appointment as Independent Director which is yet to be concluded on 7th August, 2025 i.e. last date for remote e-voting on the Special resolution for appointment of above Director.

In the opinion of the Board, the independent directors re-appointed during the year possess requisite integrity, expertise, experience and proficiency.

Cessation of office of Director:

During the financial year, 2024-25, Sh. Aditya Khemka (DIN: 00514552), who was appointed as Independent Director for a term of five years commencing from 27th September 2019, ceased to be Independent Director of the Company w.e.f. 26th September 2024, due to completion of his 1st tenure.

Further, Sh. Sunil Bansal (DIN: 00142121), tendered his resignation from the position of Executive Director of the Company with effect from 19th December 2024.

The Board of Directors of the Company places on record its appreciation for the contribution made by the above Directors during their respective tenure(s).

After closure of F.Y 2024-25, Sh. Gautam Baid (DIN: 00021400), Independent Director of the Company ceased to be Independent Director of the Company w.e.f. 4th April 2025 due to his sudden and untimely demise.

While appreciating the contribution made by late Sh. Gautam Baid during his tenure, the Board of Directors also places on record their deep condolence for his sudden and untimely demise.

Key Managerial Personnel

As on March 31, 2025, the following persons were the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 -

Committees of the Board

As on March 31, 2025, your Company is having the following Committees in compliance with the Statutory provisions of the Companies Act, 2013 and SEBI (LODR), Regulations, 2015, as amended:-

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

During the year under review, the Board of Directors met 5 (five) times. 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 12th February, 2025, excluding the director being evaluated.

During the year under review, the Company has complied with all the criteria of Evaluation as envisaged 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 31st March, 2025 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 (reviewed and amended from time to time). The Policy of the Company also provides that the Non-Executive 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 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 of the Company and Companies Act, 2013. 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 Regulations 16 read with 25 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, save and except ESOS referred to in this report.

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.

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.

The Statutory Auditors of the Company has audited the financial statements included in this Integrated Annual Report, and as part of their audit, has issued their report on the Company's internal financial controls (as defined in Section 143 of Companies Act, 2013), on the effectiveness of our internal financial controls over the financial statements as at March 31, 2025.

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 Regulations 16 and 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further they have confirmed that there was no change in the status of their independence and 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 have also appeared and completed the online proficiency self -assessment test in compliance with the provisions of Companies Act, 2013 and Rules made thereunder, as amended.

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 2024-25.

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, 2025 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.

Statutory 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, 2025. There was 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. However, the statutory auditor's report included two "Emphasis of Matter" paragraphs, without impacting the audit opinion which is as under along with management response and assurance given thereon.

(i) Emphasis on Arrangement with Affiliated Partnership Firms

"We draw attention to Note No. 54 of the accompanying financial statements, which describes the Company's arrangements with M/s Liberty Footwear Co., M/s Liberty Enterprises, and M/s Liberty Group Marketing Division, partnership firms in which some of the directors are also interested as partners. These arrangements grant the Company usage rights over certain tangible and intangible assets and are scheduled to expire on March 31, 2028. The management has represented that, based on understandings with certain partners and the status of ongoing arbitration proceedings as disclosed in the said note, the Company expects to either acquire such assets, renew the existing arrangements, or adopt alternative strategies to ensure operational continuity. Accordingly, no adjustments have been made to the accompanying financial statements in this regard. Our opinion is not modified in respect of this matter."

(ii) Emphasis on Delayed Payments to MSME Vendors

"We draw attention to Note No. 46 of the accompanying financial statements, which states that the Company experienced delays in making payments to certain Micro and Small Enterprises (MSEs) governed under Section 15 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. As a result, an interest liability of ' 26.21 Lakhs has accrued under Section 16 of the MSMED Act, which has been duly recognized. The delays were attributed to vendors not timely declaring their MSME status, leading to inadvertent breaches of the statutory payment timeline. Management has undertaken steps to strengthen internal controls to ensure timely vendor updates, particularly on UDYAM registration."

In reference to above, the Management's Response and Assurance are as under:

. With respect to the Company's arrangements with M/s Liberty Footwear Co., M/s Liberty Enterprises, and M/s Liberty Group Marketing Division, it is clarified that based on ongoing engagements and understandings with some partners and in light of the current status of arbitration proceedings, the Company is actively exploring options to either acquire the underlying assets, renew the existing agreements, or adopt alternative strategies. This approach is aligned with the Company's long-term strategy to ensure uninterrupted operations and brand ownership consolidation.

. On the MSME matter, it is clarified that the delays were unintentional and stemmed from delayed submissions by vendors regarding their MSME status. These were not wilful defaults, and the interest liability has been accounted for in full. The Company is taking corrective steps by enhancing internal processes and implementing stricter controls to maintain real-time updates on vendor MSME registration, particularly via the UDYAM portal, to ensure strict statutory compliance moving forward.

The Board members in their meeting held on 28th May,

2025 have expressed concern over and noted issues and advised the management to:

. Expedite resolution of pending arbitration matters and finalise strategic actions to safeguard the Company's operations post-2028;

. Strengthen vendor management systems to ensure compliance with MSMED Act provisions; and

. Endeavour to engage with the Statutory Auditors to ensure full alignment with compliance frameworks and reporting requirements.

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 29th May, 2024 appointed

M/s JVS & Associates, New Delhi a Practicing Company Secretaries, for the financial year 2024-25 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 31,2025 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, 2025 is enclosed to this Report. The Board members have examined the above said report and observed that there was no reservation, qualification and adverse remark made by the Secretarial Auditors, except the following instance of non-compliance(s):-

(a) Delay in filing of the Corporate Governance Report for the quarter ended June 30, 2024; and

(b) Non-compliance with the required composition of the Board of Directors due to the cessation of one Independent Director Sh. Aditya Khemka on 26th September, 2024.

Management response and assurance in response to above instance of non-compliance(s):-

In respect of instance of non-compliance(s), it is clarified that the Corporate Governance Report was subsequently filed on August 21,2024, and the non-compliance regarding the composition of the Board was rectified on December 19, 2024. The Company has duly complied with all stipulations of the Stock Exchanges, including the payment of fines levied for the aforementioned delays respectively by BSE Limited and National Stock Exchange of India Limited.

The Board Members deliberated upon the above in their meeting held on 28th May, 2025 and advised the management to take all necessary steps to prevent recurrence of such issues in the future.

Further, pursuant to the provisions of the Regulation 24A of the Listing Regulations and Section 204 of the Act read with rules made thereunder, the Board of Directors at its meeting held on 6th August, 2025 based on recommendation of the Audit Committee, had approved the appointment of M/s JVS & Associates, Practicing Company Secretaries, a peer reviewed firm (Firm Registration Number: I2011DE848300) as Secretarial Auditors of the Company for a term of five consecutive years commencing from FY 2025-26 till FY 2029-30, subject to approval of the Shareholders of the Company. An Ordinary Resolution for the appointment of M/s JVS & Associates, Practicing Company Secretaries as Secretarial Auditors of the Company has been set out in the Notice of ensuing AGM for the approval shareholders.

Internal Auditors for the Financial Year 2024-25

On the recommendation of Audit Committee, your Board of Directors in their meeting held on 29th May, 2024 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 Sections 138,179 of the Companies Act, 2013 read with 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 2024-25 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 Auditors had submitted their consent alongwith a 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 31,2025 has been submitted by M/s R.C. Kapoor & Co., Chartered Accountants, which has been duly considered and requisite corrective actions and remedial measures 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.

Appointment of Internal Auditors for Financial Year 2025-26 onwards:

On the recommendation of Audit Committee, the Board of Directors in their meeting held on 6th August, 2025 has approved the ratification of appointment of Sh. Rajesh Gupta, Chartered Accountant, as Internal Auditor, in accordance with terms of the provisions of Sections 138, 179 of the Companies Act, 2013 read with 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 2025-26 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 his report. The Internal Auditor has submitted his consent alongwith a confirmation that he is qualified to act as Internal Auditor of the Company.

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, 2025 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

During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by/against Liberty Shoes Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, the details of the material litigation filed by/against the Company and the order passed therein, if any, have been disclosed in the note no. 54 to 57 of the notes to the Financial Statements for the year ended 31st March 2025.

In reference to note no. 55 to the Financial Statements for the year ended March 31, 2025, Sh. Adesh Gupta and other shareholders petitioners have preferred an appeal before Hon'ble Supreme Court of India against the Order dated 20.09.2024 passed by Hon'ble NCLAT and the same is pending to be adjudicated by Hon'ble Supreme Court of India. The Company, as advised by its legal consultants, has decided to contest the above appeal.

Further, for the details of non-compliances, penalties, strictures by Stock Exchanges/SEBI/Statutory Authorities on any matter related to Capital Markets during the last three years, please refer the Corporate Governance Report which forms integral part of the Annual Report.

Transactions with Related Parties

During the year 2024-25, 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 2024-25 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 Regulations. 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 Policy 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 2024-25, 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)

For the past three decades, Liberty has remained deeply committed to creating a positive and lasting impact through its social initiatives. The belief that, as a responsible corporate citizen, we owe a fundamental duty to contribute meaningfully to the well-being of society is deeply ingrained in our core values. With this in focus, we have carried out a variety of activities in the areas of education, primary healthcare, communities, ecology, and the environment, among others, to make a significant and long-lasting difference in building a society that is fair, just, compassionate, and sustainable. Pursuant to the provisions of Section 135 of the Companies Act, 2013, Liberty is committed to further strengthening its effort and activities by demonstrating care for the community through its focus on education and skill development, health and wellness, including treatment for the impoverished, needy, and uninsured, promotion of Rural Sports, restoration of national heritage, environment sustainability, and support for disaster relief efforts, among other things. Liberty has long engaged in CSR initiatives. The following are the several CSR projects that your company carried out in the year that is being evaluated:

1. Promotion of Quality education in the Schools and Skill development.

Liberty demonstrates a strong commitment to social responsibility by means of a number of programs that help the general upbringing and schooling of impoverished youngsters living close to its plants and offices. The organization guarantees that kids from low-income families have access to good education, health care, and a healthy diet by means of kind donations and sponsorships. Beyond just producing top-notch students, Liberty's mission is to develop kind, responsible adults who can make a constructive contribution to society. The organization aspires to make the future of the impoverished brighter and more equitable by providing these young brains with education, healthcare, and necessary resources.

Apart from emphasizing education and growth, Liberty is cognizant of the fiscal difficulties that households have. In an effort to lessen this load, the company donates free books, backpacks, uniforms, and other requirements to improve infrastructure at schools, guaranteeing that no child is denied an education because of financial difficulties. These extensive charitable endeavours demonstrate Liberty's constant commitment to having a meaningful and long-lasting influence on these kids' lives and helping them to overcome challenges and realize their full potential as capable and independent adults.

2. Promotion of Sports amongst the youth from the community

This year, Liberty extended its support to the promotion of sports by contributing towards the donation of uniforms and footwear for aspiring and needy sportspersons. As part of our ongoing commitment to nurturing talent and encouraging physical wellbeing, we proudly supported the 2nd edition of the Major Dhyan Chand Hockey Tournament held in Jammu & Kashmir organized under the aegis of Indian Army. Organized to commemorate National Sports Day, the tournament serves as a tribute to India's hockey legend while providing a platform for young athletes to showcase their skills. Our contribution to this initiative reflects our belief in the power of sports to inspire discipline, teamwork, and national pride. Liberty remains dedicated to empowering communities through such meaningful engagements, especially in regions where opportunities for youth development can be transformative. Liberty undertook this initiative in collaboration with implementing Agency, Khawaja Gareeb Nawaz Muslim Development and Educational Welfare Society Baramulla Jammu & Kashmir

3. Contribution for Healthcare Initiatives

As part of our CSR initiative, we are proud to have actively contributed towards the well-being of the community through Healthcare initiatives. We contributed towards organizing Blood Donation Drive, encouraging voluntary participation to help save lives and address the ongoing need for blood in medical emergencies. Additionally, we extended support to Bharat Vikash Parishad Maharana Pratap Nyas (Reg.), an esteemed organization committed to delivering essential healthcare services. Our contribution aids their efforts in providing diagnostic services and life-saving dialysis treatments to underprivileged sections of society, reflecting our continued commitment to making a meaningful difference in public health and welfare.

4. Preserving National Heritage

Respecting the cultural fabric of our nation, Liberty also contributed to the restoration and reconstruction of a heritage building, preserving its historical and architectural legacy for future generations.

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, 2025 the Committee did not receive any complaint pertaining to sexual harassment and there is no complaint pending as on the date of beginning of this Financial year and as on the date of the closure of this Financial year. Consequently, there are NIL cases disposed off during the year and NIL cases pending for more than ninety days.

Compliance of the provisions relating to the Maternity Benefit Act 1961

During the year under review, the Company has complied with the provisions relating to the Maternity Benefit Act 1961.

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 SubCommittees 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.86 to page no.87 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.90 to page no.94 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.