Liberty Shoes Ltd Directors Report.

Dear Shareholders,

Your Directors are presenting the 35th Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31 st March, 2021.

Financial Highlights:

The financial results under consideration have to be seen in the context of outburst of pandemic and its severe aftermath prevailed almost throughout the year under consideraion.

The highlights of the financial statements are as under:-

(Rs. In Lakh)

Particulars 2020-21 2019-20
Gross Sales 45,596.75 64,954.16
Add: Other Income 252.80 296.28
Revenue from Operations and Other Income 45,849.55 65,250.44
Profit before Tax Expense (PBT) 236.19 1,726.84
Less: Tax Expenses 211.06 667.93
Net Profit for the year (NP) 25.13 1,058.90
Other Comprehensive Income/(Loss) (1.42) 40.83
Total Comprehensive Income 23.71 1,099.73

Review of the operations of the Company:

Your Company has prepared the Financial Statements for the financial year ended March 31, 2021 under Sections 129, 133 and Schedule III of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

During the financial year ended 31st March 2021, Liberty has recorded a turnover of 45,596.75 Lakhs as against turnover of previous years 64,954.16 Lakh, a constrained decline of 30% over corresponding previous year 2020 mainly because of inevitable disruption arisen due to outbreak of COVID-19 in early part of the financial year 2020-21 and its impact continued throughout the year under consideration. The PBDIT stood at 5,172.27 Lakh during the year 2020-21 as compared to 6,064.56 Lakhs during the corresponding previous year 201920. The Profit before Tax expenses stood at 236.19 Lakh including exceptional expenses of 53.31 Lakh as compared to 1726.84 Lakhs including Exceptional Income of 442.91 Lakh during the corresponding previous year 2019-20. The Profit after Tax of your Company along with other Comprehensive Income (net of taxes), for the year under consideration, has remained at meager 23.71 Lakhs as against 1,099.73 Lakhs during the corresponding previous year.

During the year under consideration, because of catastrophe, major part of the year was under lock down including educational institutions, shopping malls, high streets and other retail markets etc which has disordered not only Companys business but the entire global economies. The retail and distribution segments, the two main strengths, of the Company were stagnated during these period and your company lost the advantage of its peak customers demand normally engendered during school season, festive season and wedding season as footwear, being non essential items, was slipped further low in consumers preferences. Because of this uncalled-for situation, the operations of Companys business including its channel partners got adversely disrupted resulting to pungent relations even to the extent of instances of bankruptcy, closure, legal disputes. Your Company, besides loser of the perspective business, obligated to the statutory guidelines including its policy with regard to provisioning and writing off the bad debts, has written off debts of 1225 Lakh (Previous year 466.04 Lakh) in addition to making provisions for bad and doubtful debts for 200.89 Lakh (Previous year 106.16 Lakh). Your Company is contemplating to reinforce its retail channel with suitable changes in its sales policies including stringent financial screening of the channel partners. Your Companys institutional and on lines sales segments have registered exceptional performance and made significant contribution to the overall operations of the company during the year under consideration.

Your Directors apprehensive of the situation more particularly because of 2nd wave of Covid-19 has drawn conservative business plan focusing on cost curtailment and further improving of its efficiencies on all fronts. Your Company would continue to expand its reach by focusing on digitalization, Online availability of its footwear through its own website and also through major E-Com Partner like Amazon, Flipkart, Myntra etc.

Credit Rating:

During the year under review, CARE Ratings Limited, a leading rating agency, has re-affirmed its Ratings CARE "A" (-); (single A Minus) in respect of Long Term banking facilities (comprising Term Loan and Working Capital fund based facilities) and CARE "A2" (+) ("A" Two Plus) in respect of Short Term banking facilities (comprising non fund based facilities) sanctioned by the Banks to the Company. The outlook on the Long Term rating, during the lock down period, has been assigned negative due to Companys liquidity position to remain stretched amid loss of income and cash flows due to lockdown.

Subsidiary Company their Performance & Consolidated financial statement:

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

The Company has discontinued its Wholly Owned Subsidiary (WOS) at Middle East and its assets are pending for liquidation due to which no financial statements have been prepared of this WOS. Therefore, the same has not been attached and a statement containing salient features of the financial statements of the Companys wholly owned subsidiary has not been provided as required under Section 129 of the Companies Act, 2013.

Appropriations:

Dividend

Your Directors, considering the financial requirement to the Company, have not recommended any dividend for the financial year ended 31st March 2021.

Transfer to Reserves

Your Directors proposed to transfer Rs. NIL (Previous Year 300.00 Lakh) to the General Reserves out of the profits available with the Company for appropriations. Accordingly, an amount of 23.71 Lakh (Previous Year 799.73 Lakh) has been proposed to be retained in the Profit & Loss Account of the Company.

Employees Stock Option Scheme(s)

During the year ended 31st March, 2021, your Company has not floated any scheme in relation to Employees Stock Option(s) and no such further plans have been initiated at present in this regard.

Nomination and Remuneration Policy

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

Policy on Prevention of Insider Trading

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

Familiarization Program

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

Risk Management Policy & Risk Management

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

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

Whistle Blower Policy (Vigil Mechanism)

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

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

Non-applicability of Maintenance of Cost Records:

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

Buy Back of Equity Shares:

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

Public Deposit(s):

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

Board of Directors and Key Managerial Personnel:

 

Retirement by rotation of the Directors

Sh. Adesh Kumar Gupta & Sh. Ashok Kumar, Directors of the Company will be retiring by rotation at the 35th 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 35th Annual General Meeting.

Appointment(s) and Cessation of office of Directors Appointment(s)/Re-appointment(s):

(I) The members at the 34th Annual General Meeting held on 30th September, 2020 have:

(a) Appointed Sh. Arvind Bali Kumar as Independent Director of the Company for a first term of five consecutive years commencing from 12th November, 2019 to 11th November, 2024.

(II) On the basis of recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on 12th February, 2021 have re-appointed Sh. Adesh Kumar Gupta as CEO & Executive Director and Sh. Shammi Bansal, Sh. Sunil Bansal, Sh. Adish Kumar Gupta and Sh. Ashok Kumar as Executive Directors for a further period of 3 years w.e.f. 1 st April, 2021 subject to the approval of members of the Company at the ensuing Annual General Meeting. Further, on the basis of recommendation of Nomination and Remuneration Committee, the Board of Directors in their meeting held on 11th August, 2021 have proposed the appointment of Sh. Sanjay Bhatia, Dr. Sujata and Smt. Nidhi Lal as Independent Directors of the Company for a first term of 3 years w.e.f. 29th September, 2021 to 28th September, 2024. Accordingly, their candidature(s) are being proposed in ensuing Annual General Meeting for appointment as Independent Directors of the Company as above.

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

Cessation of office of Director:

The second tenure of Sh. Raghubar Dayal, Sh. Ramesh Chandra Palhan and Smt. Lovelena Mody, would be completed on 28th September, 2021 and in terms of the provisions of Section 149 and Listing Regulations, their tenure cannot be exceeded after 28th September, 2021. The Board and Management of the Company in its meeting held on 11th August, 2021 has placed on record appreciation for the contribution made by the above Directors during their respective tenure(s).

Key Managerial Personnel

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

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

Committees of the Board

The Companys Board has constituted the following Committees:

1. Audit Committee

2. Management Committee

3. Stakeholders Relationship Committee

4. Nomination and Remuneration Committee

5. Corporate Social Responsibility Committee

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

Number of meetings of the board

Five meetings of the board were held during the year. The detail of the composition, board meetings held during the year and attendance at the meetings are provided in Corporate Governance Report. Considering the severity of the situation, the Ministry of Corporate Affairs vide its General Circular No. 11/ 2020, dated March 24, 2020 and SEBI, vide circular No. SEBI/HO/CFD/CMDl/CIR/P/2020/38 dated March 19, 2020 and Vide Circular No. SEBI/HO/CFD/CMDl/CIR/P/2020/110 dated June 26, 2020, had relaxed the requirement of the maximum stipulated time gap of 120 days between two meetings of the Board and Audit Committees of listed entities, as is required under Section 173 of the Companies Act, 2013 and Regulation 17(2) and 18(2) (a) of SEBI LODR Regulations, 2015.

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, 2021, excluding the director being evaluated.

During the year under review, the Company has complied with all the criteria of Evaluation as evisaged in the SEBI Circular on "Guidance Note on Board Evaluation". Based on the Performance Evaluation process and on the recommendation of the Nomination and Remuneration Committee, your Board of Directors have considered and approved the re-appointment of Sh. Adesh Kumar Gupta as CEO & Executive Director and Sh. Shammi Bansal, Sh. Sunil Bansal, Sh. Adish Kumar Gupta and Sh. Ashok Kumar as Executive Directors subject to the approval of Shareholders by way of Special Resolution respectively.

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 12th February, 2021 in the absence of non-independent directors and members of management inter alia to evaluate the performance of the nonIndependent Directors, Board as a whole of the Company, its committees, Chairman and to assess the quality, quantity and timeliness of flow of information between the Company management and the Board.

Attributes, Qualifications & Independence of Directors and their appointment

The criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules there under, both in respect of Independent Directors and other Directors as applicable, has earlier been approved by the Nomination and Remuneration Committee during the financial year 2015-16 (amended from time to time). The Policy of the Company also provides that 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 shorter period say, two to five years only. All Directors, other than Independent Directors, are liable to retire by rotation and are eligible for re-election in terms of the provisions of Articles of Association. The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under section 149 of the Companies, Act, 2013 and Regulation 16 of Listing Regulations.

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

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

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

Change in the nature of Business, if any

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

Internal financial control systems and their adequacy

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

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

Declaration by Independent Directors

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

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

Directors Responsibility statement

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

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

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

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

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

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

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2020-21.

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, 2021 in respect of matters pertaining to the financial management or any other matter related thereto, were considered and duly accepted by the Board of Directors of the Company.

Statutory Auditors and their Report

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

Auditors Report:

Your Companys Directors have examined the Statutory Auditors Report issued by M/s U. Shanker & Associates, Chartered Accountants on the Annual Accounts of the Company for the financial year ended 31st March, 2021. There is no reservation, qualification or adverse remark made by the Statutory Auditors in their Report and their clarifications, wherever necessary, have been included in the Notes to the Accounts section as mentioned elsewhere in this Annual Report. During the period under consideration, no incident of frauds was reported by the Statutory Auditors pursuant to Section 143 (12) of the Companies Act, 2013.

Secretarial Auditors and their Report

Your Directors have appointed M/s JVS & Associates, a Practicing Company Secretaries, in accordance with the provisions of Section 204 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 for the financial year 202021 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, 2021 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, 2021 is enclosed to this Report. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Secretarial Auditors and while issuing the said report, the Secretarial Auditors have given their comments on the compliance which were duly complied with by the Company.

Internal Auditors and their Report

Your Directors in their meeting held on 25th May, 2017 have appointed Sh. Rajesh Gupta, Chartered Accountant as internal Auditor of the Company, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 201718 onwards for conducting the Internal Audit of the books of accounts and reviewing and ensuring the Internal Control system of the Company and to issue their report.

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31, 2021 has been submitted by Sh. Rajesh Gupta, which has been duly considered and requisite actions were taken by Audit Committee and reports thereon were also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Internal Auditors.

Particulars of Loans, Advances, Guarantees and Investments

The Company has not granted any loan, guarantee or made any investments during the year ended 31st March, 2021 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 consideration, there are no significant and material orders passed by the regulators or courts or tribunals and no litigation was outstanding as on 31st March, 2021, which would impact the going concern status and Companys operations in future. 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), except two applications filed against the Company by its two vendors and the same is to be adjudicated at National Company Law Tribunal (NCLT), Chandigarh. The said application(s) are not yet been admitted by NCLT. The Company, in consultation to its legal advisor, has decided to oppose the admission of the above applications before NCLT

Transactions with Related Parties

During the year 2020-21, 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 Arms 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 2020-21 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 arms length basis, therefore details required to be provided in the prescribed Form AOC-2 is not applicable to the Company. However, the Company has been undertaking transactions for last so many years in respect of payment of Royalty/ Franchise fees to few of the related parties after obtaining due prior approval of the concerned regulatory authorities and shareholders under the provisions of Companies Act and SEBI Guidelines. All the related party transactions have been disclosed in the Notes to financial statements as required under IND AS-24 of the Accounting Standard.

In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board had approved and adopted policies on Related Party Transactions which has been uploaded on the Companys 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 2020-21, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto.

Extract of Annual Return

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report. The Annual return for the financial year ended 31st March, 2021 is available on the website of the Company www.libertyshoes.com.

Corporate Social Responsibility (CSR)

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

1. Promotion of Quality education in the Schools

Liberty has identified schools and institutions around its Plant/Offices and made contributions/sponsorships for providing education to children who cant afford it. It has sponsored quality education and healthcare, provided balanced nutrition to under privileged children for their holistic development so that they can lead better life and can contribute to the society as responsible citizens etc. In addition to this, it has provided free of cost Books, Bags and Uniform to schools for distribution amongst the children/students who cant afford it.

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

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

3. Setting up of Water Check Dam and Tree Plantation

Liberty has set up Check Dam in villages of Rajasthan which is supposed to provide benefits to approx. 10000 villagers and 20000 Animals within the vicinity of the villages. Liberty is also ensuring environmental sustainability through tree plantation, conservation of natural resources and maintaining of quality of soil, air and water in the places around its Plants/Offices.

4. COVID-19 Initiatives

Considering the severity of COVI-19 pandemic, Liberty has taken initiatives and distributed Food Kits, Hygiene and Sanitation goods amongst the poor, needy and COVID-19 impacted people.

5. Contribution for disaster management activities

Liberty has contributed for providing the food and groceries items to the families affected due to disaster in Chamoli District at Uttrakhand.

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

Liberty has contributed for the reconstruction of building of National heritage and development of various facilities and structures which are available to the general public.

7. Other CSR activities and initiatives:

Liberty has contributed for the promotion of religious activities by contributing to temples/Pooja/various registered Kalyankari Sabhas and societies.

During the year under consideration the Company has complied with the provisions of Companies Act, 2013 by making the required contribution on the activities as stated in Schedule VII of the Act. The Annual Report on Corporate Social Responsibility activities as required under Sections 134 and Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) and Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure V of this report. In order to align the CSR Policy with the amendments in law relating to CSR, based on the recommendation of the CSR Committee, the Board of Directors at its meeting held on August 11, 2021, has revised the CSR Policy and the same was made applicable immediately from the date of Board Meeting i.e. 11th August, 2021. The revised 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 Libertys 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, 2021 the Committee did not receive any complaint pertaining to sexual harassment.

Corporate Governance and Ethics

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

As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from Statutory Auditors M/s U. Shanker & Associates, Chartered Accountants, on compliance with corporate governance norms under the Listing Regulations, is given at page no. 100 to page no. 101 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 Companys performance, industry trends and other material changes with respect to your Company, wherever applicable, are presented at page no. 104 to page no. 108 of this Annual report. The Management Disclosure and Analysis Report provides a consolidated prospective of economic, social and environmental aspects material to our strategy and our ability to create and sustain value to our key stakeholders.

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

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

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, Council for Footwear Leather & Accessories (CFLA) and the Government Authorities.

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

Your Directors and Management would also like to place on record their deepest appreciation for real life warriors who selflessly give themselves to others during the pandemic of COVID-19.

For and on behalf of the Board of Directors

Place: Gurugram, Haryana Adesh Kumar Gupta Chairman of the Meeting
Dated: Wednesday, 11th, August, 2021 DIN: 00143192