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

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of the Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn.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

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

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

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

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

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

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

39. Provision for doubtful debts:

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

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

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

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

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

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

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

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

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

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

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

50. Detail of Employee Benefits-Gratuity

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

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

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

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

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

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

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

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

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

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

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

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

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

Against such dishonoring the concerned vendors have filed criminal complaints under Section 138 of the Negotiable Instrument Act, 1881 against three of the Executive Directors and the Company as well before the Judicial Magistrate at Panipat (Haryana).

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

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

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

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

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

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

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

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

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

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

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

on account of depreciation. /Pjt m. f

63. Theassessment/auditof -foyr ^

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

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

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

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

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

67. Related Party Transactions:

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

A) Name of Related Parties and description of relationship:

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

(Amount in ? Lakh)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

83. Fair Value Measurements

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

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

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

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

Fair Value Hierarchy

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