Liberty Shoes Ltd Directors Report

Dear Shareholders,

Your Directors are pleased to present the 40th Annual Report of Liberty Shoes Ltd. ("Company" or "Liberty") together with the Audited Financial Statements for the financial year ended 31st March, 2026.

Financial Highlights:

The highlights of the financial statements are as under:-

Particulars	2025-26	2024-25
Revenue from Operations	73,999.11	67,548.06
Add: Other Income	38.91	29.68
Revenue from Operations and Other Income	74,049.07	67,577.64
Profit before Exceptional items and Taxes	1,482.35	2,356.76
Less: Exceptional Items	(14.91)	269.37
Profit before Tax Expense (PBT)	1,497.26	2,087.39
Less: tax Expenses	378.31	731.26
Net Profit for the year (NP)	1,118.95	1,356.13
Other Comprehensive Oncome/ (Loss)- Net of taxes	3.93	(7.31)
Total Comprehensive Income	1,122.88	1,348.82

Financial Reporting and Performance Overview

Your Company has prepared the Financial Statements for the year ended March 31, 2026, in accordance with the applicable provisions of the Companies Act, 2013, including Sections 129 and 133, Schedule III thereto and the Accounting Standards notified thereunder, as applicable. The Financial Statements give a true and fair view of the state of affairs and financial performance of the Company.

During the Financial Year 2025-26, the Company achieved a turnover of Rs.73,999.11 Lakhs, registering a growth of 9.55% over Rs.67,548.06 Lakhs in the previous year. Net Profit stood at Rs.1,118.95 Lakhs, as against Rs.1,407.39 Lakhs in the previous year, representing a decline of 20.49%.

The moderation in profitability, despite revenue growth, was primarily attributable to continued pressure on input and raw material costs, regular increases in minimum wages and the consequent increase in employee benefit costs, along with other operating cost pressures during the year. These cost pressures impacted margins and partly offset the benefit of higher sales.

The GST rationalization on footwear priced up to Rs.2,500 per pair, from 12% to 5% with effect from September 22, 2025, was a positive development for the industry and supported affordability and consumer demand. However, as the benefit became effective only during the latter part of the financial year, its full impact was not available for the entire year. Further, the benefit of GST reduction was substantially aligned with the objective of passing on the tax benefit to consumers and improving value proposition, and therefore did not directly translate into a corresponding increase in the Companys profitability. The positive impact on demand and market volumes is expected to have greater relevance over the medium term.

Notwithstanding the moderation in profitability, the Company maintained growth in revenue of 9.55%, reflecting the resilience of its diversified business model and continued traction across key business segments. The Company remains focused on improving manufacturing and operational efficiencies, optimizing product mix, exercising cost discipline, enhancing productivity and strengthening working capital management to improve margins and deliver sustainable profitable growth.

Cost, Demand Environment and Operational Efficiency

During the year under review, the Companys operating and profitability performance was impacted by moderation in demand in certain quarters amid prevailing economic uncertainties, along with an increase in raw material and other input costs. Employee costs also increased during the year, including the impact of enhanced minimum wages and employee benefit costs arising from changes in the applicable labour framework.

The Company continued to leverage its in-house manufacturing capabilities and manufacturing network to improve productivity, quality and cost competitiveness. Focus remained on process automation, manufacturing efficiencies, sourcing optimization, better capacity utilization and resource management. Calibrated pricing and product- mix initiatives were also undertaken to partially mitigate input cost pressures while maintaining competitiveness and value for customers.

The Company continued to exercise strict cost control, inventory optimization, working capital discipline and improved production planning across its operations. These initiatives are aimed at enhancing operational efficiency, protecting margins and strengthening the Companys cost competitiveness and profitability over the medium term.

GST Rationalization - A Positive Regulatory Development

The Company welcomed the rationalization of GST on footwear priced up to Rs.2,500 per pair, with the applicable rate reduced from 12% to 5% with effect from September 22, 2025, pursuant to the recommendations of the GST Council.

The reduction is a positive development for the footwear industry, particularly for the value and mid-market segments, as it enhances consumer affordability and facilitates wider access to branded footwear. The lower tax incidence is also expected to support formal retail, improve the competitiveness of organized players and stimulate consumption in a price-sensitive market.

For the Company, the reduction provides an opportunity to strengthen its value proposition, expand its addressable consumer base and support demand across its extensive retail and distribution network. The Company continued to focus on passing on the benefit, where appropriate, while strengthening product availability and market reach during the second half of the year.

Product Innovation and Premiumization

In line with the evolving domestic footwear market and increasing consumer preference for sneakers, athleisure and lifestyle footwear, the Company continued to strengthen its product portfolio across performance, casual and lifestyle segments during the year. Greater focus was placed on product design, comfort, functionality, material innovation and new product launches, supported by consumer and market insights.

The Company continued its calibrated premiumization strategy, while maintaining its strong value and mid-market offerings that remain important to its core consumer base. The focus is on offering the right combination of design, quality, comfort and value for money, while improving product mix and realizations.

These initiatives are aimed at strengthening the Companys relevance among younger and aspirational consumers, increasing product differentiation and supporting sustainable growth across both physical and digital channels.

Retail Expansion and Store Modernization

The Company continued its retail expansion during the year, with a focused approach towards tier-II and tier-III cities through a combination of Company-owned, franchised and distribution-led formats, taking its network of exclusive retail outlets beyond 475-plus stores. Alongside expansion, the Company continued to modernize and renovate select legacy stores, with emphasis on customer experience, visual merchandising, product presentation and improved store ambience. The Company also strengthened its focus on customer relationship management and loyalty initiatives

to enhance customer engagement, retention and repeat purchases.

The product assortment was aligned with evolving consumer preferences, with emphasis on quality, comfort, design and value for money. Store performance was increasingly evaluated through key parameters such as footfall, conversion, average transaction value and productivity, enabling focused decisions on expansion, renovation and network optimization.

These initiatives are aimed at strengthening the Companys retail presence, improving customer experience and enhancing the productivity and long-term value of its retail network.

E-commerce and Digital Scale-Up

The e-commerce vertical continued to be an important growth driver for the Company, with sales through its own D2C portal, libertyshoesonline.com, and leading online marketplaces including Amazon, Flipkart, Myntra, AJIO and Coco & Blue. The Company continued to strengthen its digital presence in line with evolving consumer behaviour and the increasing preference for convenience-led shopping.

During the year, the Company enhanced its focus on performance-led digital marketing, content- led brand engagement and digital merchandising, supported by improved product visibility, inventory integration and data-led demand planning. The Company also continued to strengthen its omnichannel capabilities, including marketplace integration, hyperlocal/quick delivery and improved last-mile fulfilment, with a focus on enhancing customer experience and reducing delivery timelines.

The Company is progressively leveraging customer and transaction data to improve product recommendations, assortment planning, pricing and promotional effectiveness, while also focusing on return-rate optimization and inventory productivity. These initiatives, together with closer integration of online and offline channels, are aimed at improving digital conversion, customer retention and overall e-commerce profitability.

The Company remains focused on scaling its digital business in a disciplined and sustainable manner, with emphasis on customer experience, speed, product availability, efficient fulfilment and profitable growth.

Institutional Segment

The Safety Shoes division continued to witness steady demand across institutional, online and distribution channels, supported by requirements from core sectors such as manufacturing, construction and infrastructure. The Company strengthened its relationships with key institutional customers while expanding its reach into new and emerging segments, including housing societies and recreational clubs.

The Company also continued to focus on product quality, safety standards, competitive value propositions and customer-specific requirements, while leveraging its online and distribution network to widen market reach and support sustainable growth in the institutional segment.

Exports - Footwear & Lifestyle Including Perfumes

Footwear exports remained a selective and focused business area for the Company during the year, with steady performance across identified markets. The Perfume and Lifestyle business continued to strengthen its presence in international markets, particularly the USA and Canada, alongside expansion in the domestic market.

Growth was supported by new product introductions, wider market reach and increased availability through modern trade and digital platforms, contributing to steady improvement in both revenue and profitability during the year. The Company remains focused on building the division through targeted market expansion, product innovation and stronger brand visibility.

Brand Visibility Through Campaigns

During the year, the Company continued to strengthen brand visibility through digital-first campaigns, social media, influencer collaborations,regional content and product-led communication. Greater emphasis was placed on engaging younger and aspirational consumers through relevant and localized storytelling, while strengthening the Companys contemporary and proudly Indian brand identity.

The Company also focused on consumer-led product communication, highlighting design, comfort, innovation and value across its footwear portfolio. The increasing use of digital and influencer- led media, supported by targeted campaigns and stronger integration with retail and e-commerce channels, helped enhance brand engagement, consumer reach and store visibility.

The Company remains focused on building stronger consumer connect through data-led marketing, digital content and differentiated brand experiences, while leveraging its longstanding brand equity and Indian heritage.

Outlook

Your Directors believe that the domestic footwear industry remains well positioned for long-term growth, supported by rising formalization, evolving consumer preferences, increasing demand for branded and value- for-money products, and the recent GST rationalization on footwear up to 2,500 per pair.

The Company remains focused on leveraging these opportunities through retail and digital expansion, product innovation and premiumization, stronger customer engagement, manufacturing efficiencies and disciplined cost management. Its diversified product portfolio, established brand presence, inhouse manufacturing capabilities and expanding omnichannel reach provide a strong foundation for sustainable growth.

While near-term challenges may persist from input cost pressures, wage and employee benefit costs and fluctuations in consumer demand, the Company remains committed to improving productivity, optimizing its cost structure and strengthening margins while delivering quality products, enhanced customer experience and value for money to its consumers.

The Company will continue to pursue a calibrated and sustainable growth strategy, with focus on strengthening its market position, improving operational and capital efficiency and creating long-term value for all stakeholders.

Credit Rating:

During FY 2025-26, CARE Ratings Limited reaffirmed its ratings of CARE BBB+ (Triple B Plus, outlook is Stable) for the Companys long-term banking facilities and CARE A2 (A Two) for shortterm banking facilities. The stable outlook reflects continued improvement in the Companys 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.

Appropriations:

Dividend

As the Company does not fall under the top 1000 listed companies by market capitalization as on March 31, 2026, 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 2025-26.

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 1122.88 Lakh (Previous Year 1348.82 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, 2026, 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://www. libertyshoes.com/unpaid-unclaimed-dividend-data

Employees Stock Option Scheme(s)

During the year ended 31st March, 2026, 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 oftheSection178 ofthe 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. https://www.libertyshoes.com/ sites/default/files/2026-01/NOMINATION-AND- REMUNERATION-POLICY.pdf.

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 https://www.libertyshoes.com/ sites/default/files/202510/Liberty-Code-of- Internal-Procedures.pdf. The Code entails the procedures of pre-clearance for dealing in Companys 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 Companys 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 Non-Executive & Independent Directors during the year under consideration are disclosed on the Company website at https://www.libertyshoes. com/sites/default/files/2026-07/Familirisation- program.pdf.

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 Companys website of the Company at https://www. libertyshoes.com/sites/default/files/2025-10/ RiskManagement Policy.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 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, 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. https://www. libertyshoes.com/sites/default/files/2025-10/ Whistle Blower Policy.pdf.

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:

Re-appointment of Directors to retire by rotation

Sh. Ashok Kumar (DIN-06883514) and Sh. Anupam Bansal (DIN-00137419), Directors of the Company who will be retiring by rotation at the 40th Annual General Meeting in pursuance of the provisions of Section 152 of the Companies Act, 2013 and being eligible, have offered themselves for the reappointment at the 40th 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 7th August, 2025, have approved the appointment of Sh. Neeraj Kumar Jindal (DIN: 00054885), as Independent Director of the Company, for a period of 3 years from 28th May 2025 to 27th May 2028;

(b) On the recommendation of Nomination and Remuneration Committee and subject to the approval of shareholders in the forthcoming Annual General Meeting, the Board of Directors, approved the re-appointment of Sh. Piyush Dixit (DIN: 03514223) and Sh. Anand Das Mundhra (DIN: 00167418) for second term of three consecutive years w.e.f. 11th August, 2026 to 10th August, 2029. The Special Resolution(s) to these effect are being placed in the forthcoming Annual General Meeting.

(c) On the recommendation of Nomination and Remuneration Committee and subject to the approval of shareholders in the forthcoming Annual General Meeting, the Board of Directors, approved the appointment of Sh. Raman Bansal (DIN: 00137826) as Executive Director for a period of three years w.e.f. 10th August, 2026 to 9th August, 2029. The Special Resolution to this effect are being placed in the forthcoming Annual General Meeting.

In the opinion of the Board, the Independent Directors/ Executive Director re-appointed/ appointed possess requisite integrity, expertise, experience and proficiency.

Cessation: There was no cessation, resignation, removal or retirement of any Director during the financial year under review. Subsequent to the close of the financial year, Sh. Shammi Bansal (DIN: 00138792) tendered his resignation from the position of Executive Director of the Company with effect from 10th August, 2026, due to personal reasons. The Board took note of his resignation and placed on record its sincere appreciation for the valuable contributions made by Sh. Shammi Bansal during his tenure as Executive Director of the Company.

Key Managerial Personnel

As on March 31, 2026, the following persons were the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 -

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

Committees of the Board

As on March 31, 2026, 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 Board/Committee thereof at their respective meetings held on 13th February, 2026, 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 13th February, 2026 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 https://www. libertyshoes.com/sites/default/files/202601/ NOMINATION-AND-REMUNERATION-POLICY.pdf

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

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. 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 Companys 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, 2026.

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 Directors 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 Companys internal financial controls were adequate and effective during the financial year 2025-26.

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, 2026 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 36^th 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 Companys 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, 2026. 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 auditors report included "Emphasis of Matter" paragraph, without impacting the audit opinion which is as under along with management response and assurance given thereon.

Emphasis on Arrangement with Affiliated Partnership Firms:

We draw attention to Note No. 53 of the accompanying financial statements, which describes the Companys 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, under which it holds rights for usage of certain tangible and intangible assets are set to expire on March 31, 2028. The management has represented that, based on understandings with certain partners, and considering the current status of ongoing arbitration proceedings as described in the said note, the Company expects to either acquire the same or renew the existing arrangements or implement alternative strategies to ensure continuity of operations. Accordingly, no adjustments have been made to the accompanying financial statements in this regard. Our opinion is not modified in respect of this matter.

In reference to above, the Managements Response and Assurance are as under:

• With respect to Auditors remarks, it is clarified that the Company, based on its understanding with some of the partners of the respective firms and its assessment of the ongoing arbitration proceedings, is hopeful of continuing the existing arrangements beyond March 31, 2028 and/or acquiring the related intangible assets over time. Simultaneously, as a prudent measure, the Company is pursuing an alternative strategy towards self-sustainability to mitigate any potential risk and ensure continuity of its business operations. The Board members in their meeting held on 26^th May, 2026 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 Companys operations post-2028.

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 & 179 (3) of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), on the basis of recommendation of Audit Committee and Board of Directors, the members of the Company in their 39th Annual General Meeting held on 24^th September, 2025 had appointed M/s JVS & Associates, New Delhi a Practicing Company Secretaries, a peer reviewed firm (Firm Registration Number: I2011DE848300) for the five consecutive years commencing from financial year 2025-26 till Financial year 2029-30 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, 2026 has been submitted by M/s JVS & Associates and taken on record by the Board of Directors of the Company in their meeting held on 26th May, 2026. The Report of the Secretarial Auditors in Form MR-3 for the financial Year ended 31st March, 2026 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.

Internal Auditors and their Report

Internal Auditors for the Financial Year 2025-26 onwards:-

On the recommendation of Audit Committee, the Board of Directors in their meeting held on 6th August, 2025 had approved the 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 202526 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.

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, 2026 has been submitted by Sh. Rajesh Gupta, Chartered Accountant, Internal Auditor of the Company, 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 in their meeting held on 26th May, 2026. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark made by the Internal Auditor.

Particulars of Loans, Advances, Guarantees and Investments

The Company has not granted any loan, guarantee or made any investments during the year ended 31^st March, 2026 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 53 to 57 of the notes to the Financial Statements for the year ended 31^st March 2026.

In reference to note no. 54 to the Financial Statements for the year ended March 31, 2026, Sh. Adesh Gupta and other shareholders petitioners have preferred an appeal before Honble Supreme Court of India against the Order dated 20.09.2024 passed by Honble NCLAT and the same is pending to be adjudicated by Honble Supreme Court of India.

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 2025-26, 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 2025-26 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 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 Companys website www.libertyshoes.com under the "investor relations section" https://www. libertyshoes.com/sites/default/files/2025-10/ Related party transaction.pdf.

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 2025-26, 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 Companys website i.e. www. libertyshoes.com.

Corporate Social Responsibility (CSR)

Liberty has remained deeply committed to creating a positive and lasting impact through its social initiatives. The Company believes that, as a responsible corporate citizen, it has a fundamental responsibility to contribute meaningfully towards the well-being and development of society. This philosophy is deeply embedded in the Companys values and is reflected in its continued efforts towards education, healthcare, community development, sports, rural development, environmental sustainability and support to communities in times of need.

In furtherance of this commitment and pursuant to the provisions of Section 135 of the Companies Act, 2013, read with Schedule VII thereto and the rules made thereunder, the Company continued to undertake and support CSR initiatives directed towards the welfare and development of communities, particularly the underprivileged and needy sections of society.

During the financial year 2025-26, the Company incurred an aggregate amount of 46.55 lakh towards various CSR initiatives. The major areas of intervention during the year were as follows:

1. Promotion of Quality Education and Skill Development

Liberty continues to demonstrate its commitment towards promoting quality education and supporting the overall development of children from economically weaker and disadvantaged sections of society, particularly those residing in the vicinity of its plants and offices. During the year, the Company supported educational initiatives aimed at improving access to education and providing essential educational resources to children in need. The initiatives included support towards nutritious meals, books, school uniforms, footwear and other educational requirements, thereby helping reduce the financial burden on families and enabling children to continue their education in a conducive environment.

The Companys efforts extend beyond academic education and seek to contribute towards the holistic development of children by supporting their health, well-being and access to basic necessities. Through these initiatives, Liberty endeavours to create opportunities for children from disadvantaged backgrounds to develop into confident, responsible and productive members of society.

2. Promotion of Sports amongst Youth from the Community

Liberty recognises the important role of sports in promoting discipline, physical fitness, teamwork, confidence and a sense of community, particularly amongst young people.

During the year, the Company extended support towards the promotion of sports by contributing uniforms and footwear for aspiring and needy sportspersons. The initiative reflects Libertys continued endeavour to encourage sporting talent and create opportunities for youth development, particularly in communities where such support can have a meaningful impact.

3. Contribution towards Healthcare Initiatives

Access to affordable and quality healthcare is an important component of the Companys

CSR philosophy. During the year, Liberty supported initiatives aimed at improving access to healthcare for economically weaker and disadvantaged sections of society.

The Company contributed towards organising a Blood Donation Drive, encouraging voluntary participation and helping address the continuing need for blood for patients requiring medical treatment and emergency care.

Through these initiatives, Liberty continues to contribute towards improving healthcare access and supporting the health and wellbeing of vulnerable sections of society.

4. Rural Development

Liberty recognises that sustainable social development requires strengthening the infrastructure and quality of life in rural communities. During the year, the Company contributed towards rural development projects aimed at supporting the development and welfare of rural communities.

These initiatives form part of the Companys broader commitment to inclusive development and seek to contribute towards improving living conditions and creating better opportunities for communities in rural areas.

5. Environmental Sustainability

The Company also continued to support initiatives directed towards environmental sustainability and ecological well-being. Liberty recognises the importance of responsible stewardship of natural resources and the need to contribute towards creating a cleaner and more sustainable environment for present and future generations.

During the year, the Company made contributions towards initiatives falling within the area of environmental sustainability, in furtherance of its commitment to responsible and sustainable development.

6. Disaster Management and Relief

In keeping with its commitment to stand with communities during times of crisis, Liberty extended support towards disaster management and flood relief efforts during the year.

The contribution was aimed at supporting relief and assistance measures for people and communities affected by natural calamities and reflects the Companys commitment to providing timely support to vulnerable communities during emergencies.

7. Support for Rescue Operations

As part of its commitment towards community welfare and humanitarian causes, the Company also contributed towards a borewell rescue operation during the year.

The initiative was undertaken as a humanitarian intervention to support rescue efforts and reflects Libertys commitment to extending assistance in situations involving immediate risk to life and the safety and well-being of individuals.

8. Upliftment of Weaker and Needy Sections of Society

Liberty continues to support initiatives aimed at the upliftment and welfare of weaker, economically disadvantaged and needy sections of society.

During the year, the Company made contributions towards initiatives intended to provide support and assistance to persons and communities requiring social and economic assistance. These efforts form an integral part of Libertys broader CSR philosophy of promoting inclusive growth, dignity and equal opportunities for disadvantaged sections of society.

The Companys CSR initiatives during the year reflect its continued endeavour to create a meaningful, inclusive and sustainable social impact. Liberty remains committed to strengthening its CSR efforts and supporting initiatives that contribute to education, healthcare, sports, rural and community development, environmental sustainability, humanitarian assistance and the overall welfare of society.

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 https://www.libertyshoes.com/ sites/default/files/2025-10/CSR-Policy.pdf.

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, 2026 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 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 Pradeep Tayal & Co., Chartered Accountants, on compliance with corporate governance norms under the Listing Regulations, is given at page no. 112 to page no. 113 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. 116 to page no. 122 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 Rs.17,04,00,000/- (Previous Year Rs.17,04,00,000/) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of 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.

	For and on behalf of the
	Board of Directors
	Anupam Bansal
	Chairman of the Meeting
	DIN: 00137419
Place: New Delhi
Dated: Monday, 10th August, 2026