Liberty Shoes

i) Details of Managerial Remuneration:
 
 Payment and provision for remuneration to:   31/03/2008    31/03/2007
 
 -   Executive Director(s)                     24,00,000     24,00,000
 -   Director (Law & Taxation)                  9,00,000      9,00,000
 
 During the year, no remuneration has been paid to Non-Executive
 Directors except for the sitting fees of Rs. 80,000/- (Previous Year
 Rs. 85,000/-). As, no commission was paid/payable to the Executive
 Director(s)/Director (Law & Taxation) during the year, the computation
 of net profit under Section 198 of the Companies Act, 1956 has not been
 given.
 
 ii) In the opinion of the Board and to the best of its knowledge, the
 value of realization of current assets, loans and advances in the
 ordinary course of business would not be less than the amount at which
 they have been stated in the Balance Sheet.
 
 iii) The assessment of the Company in respect of Income Tax & Wealth
 Tax is completed up to Assessment Year 2007-08.
 
 iv) The Company in 2003, entered into an agreement with Liberty
 Enterprises and Liberty Group Marketing Division for taking over their
 footwear business on franchise basis and with Liberty Footwear Co. for
 use of Liberty trademark on exclusive basis. The footwear business as
 defined in the agreement includes Fixed Assets, intellectual
 Properties, Know-how and Distribution Network etc. of the two
 Partnership Firms. Under the terms of the agreements, no ownership of
 assets, tangible or intangible, has been transferred to the Company.
 During the year, in terms of the agreements and in conformity with the
 requisite approvals of the Central Government, the Company has made the
 payments (including provisions) to Liberty Enterprises, Liberty Group
 Marketing Division & Liberty Footwear Co.  amounting to Rs.
 6,00,00,000/- (Previous year Rs. 6,00,00,000/-), Rs. 7,00,00,000/-
 (Previous year Rs. 7,00,00,000/-) and Rs. 3,42,49,100/- (Previous year
 Rs. 3,37,50,000/-) respectively.  The dispute between the partners of
 Liberty Enterprise as regard to the aforesaid Agreement is pending with
 an Arbitrator for adjudicaation. The Company has been made party to the
 arbitrational proceedings but as per the legal opinion available, the
 Companys rights under the aforesaid agreement are well protected.
 
 v) Interest to others include Rs. 1,18,04,236/- (Previous year Rs.
 2,49,09,238/-) against short term loan @ 12% p.a. from M/s Geofin
 Investments Private Ltd.
 
 vi) During the year, the Company has capitalized the borrowing cost of
 Rs. Nil (Previous year Rs. 4,61,440/-) as part of the cost of the
 qualifying assets.
 
 vii) The Company has paid the excise duty amounting to Rs.
 10,04,27,026/- (Previous year Rs. 1.5,39,92,692/-) against the sales
 executed during the year.
 
 The Company has also made the provision of excise duty of Rs.
 1,94,80,596/- (Previous-Year Rs. 2,38,42,940/-) against finished goods
 lying in stocks as on 31st March, 2008 and the difference of two has
 been recognised separately in the Profit & Loss Account.
 
 viii) Fixed Deposit Receipts (including accrued interest) for value of
 Rs. 3,29,41,143/- (Previous year Rs. 3,07,47,860/-) are under lien with
 Banks for issuance of bank guarantees/ letters of credit.
 
 ix) Under the Focus Product Scheme of Director General of Foreign
 Trade, Government of India, during the year, the Company has received
 an incentive of Rs. 91,53,457/- (Previous year Nil) for foreign
 exchange realized against exports made during the financial years
 2006-07 & 2007-08 and the profits of the Company for the year are
 higher to that extent.
 
 x) The activities of the Rubber Division have been discontinued since
 2004 and the Company has obtained members approval under section 293(1)
 (a) to sell/dispose off the fixed assets of this division. In terms of
 said approval, during the year, the Company has disposed off the fixed
 assets of this division for Rs. 646.88 Lacs at a gain of Rs. 254.99
 Lacs.
 
 xi) The building of the Company at Libertypuram was constructed on
 leasehold land comprising 42.29 acres, belonging to promoters, with
 validity till 12th December 2008. Out of the aforesaid leasehold land,
 till the date of balance sheet, the Company has purchased 31.36 acres
 of land including 11.73 acres of land purchased during the year for Rs.
 544.28 Lacs. The registration of the land purchased during the year is
 pending in the name of the Company.
 
 xii) In order to strengthen organized retailing and to promote its own
 retail initiatives, the Company has redefined its marketing policy in
 terms of which the Company has to bear the cost of retail stores on
 account of rent and maintenance charges. The expenses incurred on these
 account have been booked under the respective heads.
 
 xiii) As at the Balance Sheet date, there are no small scale industrial
 undertaking to whom the Company owes a sum exceeding Rs. 1,00,000/-
 which is outstanding for more than 30 days.
 
 xiv) The Company has not received any memorandum (as required to be
 filed by the suppliers with the notified authority under the Micro,
 Small & Medium Enterprise Development Act, 2006) claiming their status
 as on 31st March, 2008 as Micro, Small or Medium Enterprise.
 Consequently, the amount paid/payable to these parties during the year
 is nil.
 
 xv) Contingent Liabilities
 
                                                  (Amount in Rs.)
 Particulars                                2007-2008       2006-2007
 
 I)  Security deposited with Department of 
 Uttar Pradesh Trade Tax                     2,08,800        2,08,800
 in respect of shipment of goods from 
 Uttarakhand
 
 II) Liability on account of imposition of 
 Sales Tax on sale of DEPB                   6,22,522       23,25,477
 Licences for the financial year 2005-06
 (Previous year 2004-05 & 2005-06)
 
 III) Open letter of credits (Imports)      31,19,880       16,71,980
 
 IV)  Bank Guarantees issued on behalf of 
 the Company                              1,62,90,605     1,32,28,513
 
 V)  Excise Duty*                         6,17,56,609     2,78,31,534
 
 VI) Invoice Funding facility             4,89,03,388     3,68,46,515
 
 VII) Counter Guarantees given to banks 
 on behalf of                            10,88,00,000    10,88,00,000
 subsidiary/joint venture Companies
 
 VIII)  Income Tax                          51,44,880
 IX)    Value Added Tax**                   43,59,974
 
 On the basis of indemnifying clause under the agreement with the two
 Partnership Firms whose business has been.  available to the Company on
 franchise basis, the Company has given its undertaking to the Excise
 Department to pay the liabilities, if any arises, relating to the
 period prior to the date of the agreement.  Amount deposited under
 protest.
 
 xvi) Capital commitments not provided for are estimated at Rs. 250 Lacs
 (Previous year Rs. 750 Lacs).
 
 xvii) The Board of Directors of the Company considers and maintains
 Footwear as the only business segment of the Company.
 
 Detial of Related Parties and description of relationship: 
 
 i) Companies / firms / Trust in which Directors are interested as
 Directors /Promoters / Partners / Trustees: Liberty Retail Revolutions
 Ltd., Liberty Foot Fashion Middle East FZE, Foot-Mart Retail India
 Ltd., Ceofin Investments Private Ltd., Liberty Croup Marketing
 Division, Liberty Enterprises, Liberty Footwear Co., Liberty Tanners
 (pending dissolution), Sanjeev Bansal Charitable Trust
 
 ii) Directors:
 
 1) Sh. Adesh Gupta 2) Sh. Adarsh Gupta 3) Sh. Shammi Bansal
 
 4) Sh. Satish Kumar Goel 5) Sh. Sunil Bansal 6) Sh. Amitabh Taneja
 
 7) Sh. Prem Chand Garg 8) Sh. Raghu Dayal 9) Sh. Siddharth Sanghi
 
 10) Sh. Surendra Kumar Arya 11) Sh. Vivek Bansal
 
 iii) Relatives of Directors:
 
 S/Sh. Anupam Bansal, Raman Bansal, Vivek Bansal (Brothers of Directors)
 
 S/Sh. Manan Bansal, Vaibhav Bansal, Ayush Bansal (Sons of Directors)
 
 Note: Receiving the services from Directors and their relatives
 includes rent and land lease charges.
 
 xx) For the current year, Deferred Tax asset and liability has been
 calculated after considering the timing differences of Rs. 64,93,025/-
 (Previous year 93,32,849/-) and Rs. 2,01,800/- (Previous year
 2,01,800/-) respectively on account of depreciation and expenses
 written off.
 
 xxi) Previous year figures have been regrouped/ re-arranged wherever
 necessary. The current year and previous year figures have been rounded
 off to the nearest rupees.
 
 xxii) Additional information pursuant to the provisions of paragraph 3,
 4C and 4D of Part-ll of the Schedule VI of the Companies Act, 1956: