Lehar Footwears Ltd

Dear Members,

Your directors are pleased to present 31^st Annual Report of the Company on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31^st March, 2025.

FINANCIAL HIGHLIGHTS & PERFORMANCE

Your Company has prepared the Financial Statements for the financialyear ended 31^st March, 2025, in terms of Sections 129, 133 and other applicable provisions, if any, of the Companies Act, 2013 (as amended) (the "Act") and Schedule III thereto read with the Rules framed thereunder.

STATE OF COMPANIES AFFAIRS

During the financial year, the Company has achieved turnover of Rs. 27,721.28 Lakh as compared to Rs. 19,426.04 Lakh in the preceding financial year. Profit after Tax isRs. 1,086.90 Lakh as compared to Rs. 655.81 Lakh in the preceding year.

CHANGE IN NATURE OF BUSINESS, IF ANY

During the financial year, the Company expanded its business beyond footwear into manufacturing and trading of various goods such as bags, socks, uniforms, electrical items, tools, equipment, parts, accessories, and other kits. At its 30^th Annual General Meeting held on 10^th September 2024, the Company amended its main objects clause by adding two new business objects, which were approved by shareholders via Special Resolution and subsequently registered with the Registrar of Companies, Jaipur.

Due to this amendment, CIN of the Company has been changed from "L19201RJ1994PLC008196" to "L15209RJ1994PLC008196" on 17.09.2024.

Further, the Company has received an order from the National Small Industries Corporation Ltd for supply of toolkits of

Rs. 298.0 Crores (Two Hundred Ninety- Eight Crore only) (Excluding GST) to enhance capability and productivity of artisans and crafts people registered under PM Vishwakarma

Scheme.

SHARE CAPITAL

The Authorised Share Capital as on 31^st March, 2025 was

Rs. 20,00,00,000/- (Rupees Twenty Crore), 2,00,00,000

Equity Shares of 10/- and the Paid-Up Capital as on 31^st March, 2025 was Rs. 17,67,87,990/- (Rupees Seventeen Crore Sixty-Seven Lakh Eighty-Seven Thousand Nine Hundred Ninety), 1,76,78,799 Equity Share of 10/-.

DIVIDEND

Final dividend of Rs. 0.30/-paid for the financial year ended 31^st March, 2024.

The Board at its meeting held on 19^th May, 2025 has recommended a final dividend ofRs. 0.50/- per fully paid-up equity share i.e., 5.00% which is subject to the approval of members at the ensuing Annual General Meeting. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members.

The Register of Members and Share Transfer Books of the Company will remain closed for the purpose of payment of dividend for the financial year ended 31 ^st March 2025.

Pursuant to the provisions of Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment of the dividend after necessary deduction of tax at source at the prescribed rates, wherever applicable. For the prescribed rates for various categories, the shareholders are requested to refer to the Income tax Act, 1961 and amendments thereof.

RESERVES AND SURPLUS

During the current financial year, the Company has not transferred any amount to the General Reserve.

POSITIONS OF THE COMPANY

In pursuance to section 134(3) (L) of the Act, no material changes and commitments have occurred after the closure of the financial year to which the financial statements relate affectingtill the dateofthisreport, financial position of the Company.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to 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") there was no dividend which is unclaimed/ unpaid for more than seven years, hence the company is not required to transfer any amount to Investor Education and Protection

Fund.

RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives.

Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The Board monitors and reviews the implementation of various aspects of the Risk Management policy and Company?s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework. The Company follows well established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board.

The Board of Directors of the Company are of the view that currently no significant risk factors are present which may threaten the existence of the Company. that they meet with

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR") is not applicable to our company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Our Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company?s internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides bench marking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the Internal

Control Systems and suggests improvements to strengthen the same.

The Audit Committee of the Board of Directors and the Statutory Auditors are periodically apprised of the internal audit findings and corrective actionstaken.Significantaudit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.

To maintain its objectivity and independence, the Internal Audit function reports to the Statutory Auditor of the Company, Chairman of the audit committee and Board of Directors of the Company.

INTERNAL FINANCIAL CONTROL

The Company has adequate system of internal control/ internal finance control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The report on Internal Financial Control forms part of Independent Audit report.

PERSONNEL Retire by rotation

Mr. Pramod Kumar Agrawal (DIN-00108167), Director retires by rotation and being eligible, offers appointment, in accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company. A Resolution seeking shareholders? approval for his re-appointment along with other required details forms part of the Notice.

Independent Directors

The Company has received the necessary declarations from each of the Independent Directors of the Company under Section 149(7) of the Act and Regulation 25 of the Listing criteria of Regulations, confirming independence as laid down in Section 149(6) of the Act, along with Rules framed thereunder and Regulation 16(1) (b) of the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

None of the Directors disqualifies for appointment/ reappointment under Section 164 of the Companies Act, 2013.

Changes in the composition/position of executive directors:

The board of directors of the Company has restructured the board composition for smooth and efficient management of the Company?s operations. Through postal ballot, position of the directors has been re-designated effective from 07 ^th March, 2025.

Mr. Raj Kumar Agarwal (DIN: 00127215) re-designated as Chairman & Whole Time Director of the Company.

Mr. Pramod Kumar Agarwal (DIN: 00108167) redesignated as Whole Time Director of the Company.

Mr. Naresh Kumar Agarwal (DIN: 00106649) redesignated as Managing Director of the Company.

Changes in the composition of non-executive independent directors:

Tenure of Mrs. Preeti Goyal as non-executive independent woman director has been completed on 25^th March, 2025 and Ms. Rakshanda Jain has been appointed as a non-executive independent woman director in place of Mrs. Preeti Goyal effective from 24 th March, 2025 for the period through postal ballot.

During the financial year 2024-25, the constitution of the Board complies with the requirements of the Act, and the SEBI Listing Regulations. There were no changes in Key Managerial Personnel of your Company during the financial year 2024-25 other than disclosed above.

PRESENT BOARD STRUCTURE OF THE COMPANY AT THE TIME OF SIGNING BOARD REPORT

Raj Kumar Agarwal Chairman & Whole Time Director

BOARD MEETINGS

The Board met Fourteen (14) times during Financial Year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two consecutive meetings was within the period prescribed by the Companies Act, 2013, SEBI (LODR) 2015 and Secretarial Standard-1 (SS-1).

BOARD EVALUATION/PERFORMANCE EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance board committees and individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015. The performance of the Board was evaluated by 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 performance evaluation of the Executive Directors and Non-Executive Directors was carried out by the Independent Directors.

The Board?s functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities,

Board structure and composition, role and accountability, management oversight, risk management, culture and communication, frequency and effectiveness of meetings.

The Board of Directors expressed their satisfaction with the evaluation process.

CREDIT RATINGS

During the financial year 2024-25, on the basis of recent fiveyears development including operational and financial performance of the Company, Credit Rating Agency- CRISIL has reaffirmed rating as follows:

Facilities Ratings

Long Term Bank Facilities CRISIL BBB-/Stable

APPOINTMENT AND REMUNERATION

The criteria for directors? appointment have been set up by the Nomination and Remuneration Committee, which includes criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Sub section (3) of Section 178 of Companies Act, 2013 ("the Act"). The policy on remuneration and other matters provided in Section 178(3) of the Act is available on the Company?s website at https://www.leharfootwear.com/ policies-codes. It is affirmed that the remuneration paid to the directors is as per the terms set out in the Nomination & Remuneration Policy of the Company.

For other details regarding the Nomination and Remuneration Committee, please refer to the Corporate Governance Report, which is a part of this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Vigil Mechanism/ Whistle Blower Policy in conformation with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations to report concerns about unethical behaviour and to deal with instances of fraud and mismanagement, if any. The same has also been displayed on the website at https://www. leharfootwear.com/policies-codes of the Company.

AND SAFETY

During the financial year, the Company had cordial relations with workers, staff and officers. The shop floor management is done through personal touch, using various motivational tools and meeting their training needs requirements. The company has taken initiative for safety of employees and implemented regular safety audit, imparted machine safety training, wearing protective equipment, etc. The Company believes in empowering its employees through greater knowledge, team spirit and developing greater sense of responsibility.

PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy on Gender Equality, Gender Protection, Prevention of Sexual Harassment and Redressal System in line with the requirements of the Sexual Harassment of Women at Workplace Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has also constituted an internal committee to consider and address sexual harassment complaints in accordance with the Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaints pertaining to sexual harassment were received and/or disposed/or pending during FY 2024-25.

PARTICULARS OF EMPLOYEES

The information and disclosure required under Section 197(12) of the Act read with Rule 5(1), 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), in respect of Directors and Employees of your Company is set out in "Annexure I" to this report.

COMMITMENT TO QUALITY AND ENVIRONMENT

Your Company recognizes quality and productivity as a prerequisite for its operations and has implemented ISO 9001, ISO 45001 and ISO 14001.

The Company has also received license under IS 10702:2023 & IS 6721:2023 from the Bureau of Indian Standards (BIS)) for its products respectively: (a) Hawai Chappal, Bottom-Polymer (Others- EVA etc.), Strap-Solid, Size-Adult (1-13),

(b) Hawai Chappal, Bottom-Polymer (Others- EVA etc.), strap-Solid, Size-Children (6-13) (c) Sandal and Slippers.

CORPORATE SOCIAL RESPONSIBILITIES (CSR)

The Company?s CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in "Annexure II" of this report in the format prescribed in the Companies (Corporate Social Responsibility

Policy) Rules, 2014.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. This Policy is available on the Company?s website and can be accessed at https://www.leharfootwear.com/policies-codes.

COMMITTEES OF THE BOARD

As on 31^st March, 2025, the Board had following committees:

• Audit committee,

• Nomination and Remuneration Committee,

• Stakeholders Relationship Committee, and

• Corporate Social Responsibility Committee.

All committees were mixture of executive and non-executive directors and Chairperson of every committee is a non-executive independent director except Corporate Social

Responsibility Committee. During the financial year, all recommendations made by the committees were approved by the Board. A detailed note on the composition of the Board and its committees is provided in the corporate governance report.

Statutory Auditor

M/s A. Bafna & Co. Chartered Accountants (Firm Registration No. 003660C), Jaipur, appointed as the statutory auditors of the Company, in the Annual General Meeting held on

29.09.2022 for a term of five consecutive years, from the conclusion of the twenty-eight Annual General Meeting held in the year 2022 till the conclusion of the thirty-three Annual General Meeting to be held in the year 2027.

There are no qualifications, adverse remarks reservations or disclaimer made by M/s A. Bafna & Co. Statutory Auditors, in their report for the financial year ended 31^st March, 2025. The notes to the Accounts referred to in the Auditor?s Report are self-explanatory and therefore do not call for any further explanation and comments.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies

Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Gaurav Goyal, Practicing Company Secretary, to conduct Secretarial Audit of the Company. Further, during the financial year name of the firmhas been changed from Gaurav Goyal to M/s Gaurav G & Associates. The Report of the Secretarial Audit in Form MR-3 for the financial year ended 31^st March, 2025, is enclosed as "Annexure III" to this

Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report.

The Company has undertaken an Annual Secretarial Compliance Audit for the to Regulation 24A (2) of the SEBI Listing Regulations. The Annual Secretarial Compliance Report for the financial year ended 31^st March 2025 has been submitted to the Stock Exchanges and the said report may be accessed on the Company?s website at www.leharfootwear.com.

Further, as per SEBI Circulation dated 12.12.2024 every listed company shall appoint Secretarial Auditor for the period of five financial years in the Annual General Meeting effective from the 01^st April, 2025.

The Board has recommended the appointment of M/s Gaurav G & Associates Practicing Company Secretary, Jaipur, as the secretarial auditors of the Company, in the board meeting held 19.05.2025 for a term of five consecutive years, from 2025-26 to 2029-30 for approval of shareholders of the Company based on the recommendation of the Audit Committee.

Internal Auditor

The Board has appointed M/s S S Choudhary and Co, Chartered accountants, to conduct the Internal Audit for the financial year 2024-25. The Internal AuditReportfor financial year ended the financial year ended 31^st March, 2025 has submitted by auditor to Board of the Company. The Internal Audit Report does not contain any qualification or reservation or adverse remark or disclaimer.

The Audit Committee of the Board of Directors, Statutory

Auditors and the Key Managerial Personnel are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Statutory Auditor of the Company, Chairman of the audit committee and Board of Directors of the Company.

Cost Records and Cost Audit

Provisions of Section 148 of the Companies Act, 2013 regarding maintenance of cost records and audit thereof is not applicable to your Company.

During the year under review, none of the auditors have reported any instances of fraud committed against the Company as required to be reported under Section 143 (12) of the Act.

LOANS AND INVESTMENTS BY THE COMPANY

The Company has not given any loans, guarantees or securities during the year that would attract the provisions of Section 185 of the Act. The particulars of loans, guarantees and investments of the company as per Section 186 of the

Act by the Company have been disclosed in the financial statements of the company.

ASSOCIATE COMPANIES

The Company does not have any Joint venture or Associate year 2024-25 pursuant Company as on 31^st March, 2025, but the Company has a wholly owned subsidiary company i.e., Lehar Foundation (Section-8) incorporated on 08.11.2023 with the object of CSR activities.

Lehar Foundation is purely incorporated as a not for profit making Company with specific objective to undertake CSR projects. As per Para 10 of AS-21, If the objective of control over such entities is not to obtain economic benefits from their activities, then such entities are not to be considered for the purpose of preparation of consolidated financial statements.

Pursuant to Section 129(3) of the Act, a statement containing the salient features of the financial statement of the subsidiary company is attached to the financial Form AOC-1 as "Annexure-IV". Financial Statements of the Lehar Foundation are not consolidated with Lehar Footwears Limited because it is not for profit organisation.

RELATED PARTY TRANSACTIONS

31 During the ^st March, 2025, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm?s length basis. Your Company does not have a ‘Material Subsidiary? as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the "Listing Regulations").

During the financial year, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of your Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of your Company. Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm?s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company. Necessary disclosures required under the Ind AS 24 have been made in Notes of the Financial Statements for the financial year ended 31^st March, 2025.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption, foreign exchange earnings and outgo, are given in "Annexure-V" and forms an integral part of this Report.

ANNUAL RETURN

As required under Section 92(3) read with section 134(3) (a) of the Companies Act 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 including amendments thereunder, the Annual Return filed with the Ministry of Corporate Affairs (MCA) for the Financial Year 2023-24 is available on the https://www.leharfootwear. com/annual-return and the Annual Return for Financial Year 2024-25 will be made available on the website of the Company once filed with is the MCA.

LISTING

The equity shares of the Company are listed on BSE Ltd. Further, the Annual Listing Fees for the Financial Year 2025-26 have been duly paid by the Company.

Further, there were 1,76,78,799 equity shares of the Company as on 31^st March 2025. All the equity shares were financiallisted with BSE Limited (BSE) and 100% shareholding in demat form.

DEMATERIALISATION OF SHARES

The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid. As on 31^st March, 2025, 100.00% of the share capital stands dematerialized.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, report on the Corporate Governance along with a certificate from Practicing Company Secretary is annexed herewith and marked as "Annexure VI" forming part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In Compliance with Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis as approved by the Board of Directors, forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

As the Company is not among top 500 or 1000 Companies by market capitalisation on Stock Exchanges, the disclosure of Report under of Regulation 34(2) of the Listing Regulations is not applicable to the Company for the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanation obtained by them, in terms of section 134(3) (c) your directors confirm that:

a) in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the Company as at 31^st March, 2025; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the Annual Accounts have been prepared on a going concern basis; e) have been laid down to be internal followed by the company and such internal financial controls are adequate and were operating effectively; f) proper system has been devised to ensure compliance with the provision of all applicable law and that such system was adequate and operating effectively.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company?s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. The said Code is available on the website of the Company at https://www.leharfootwear. com/policies-codes.

A declaration to this effect signed by Mr. Sanjay Kumar Agarwal, Chief Executive Officer of the Company stating that the members of Board of Directors and Senior Management

Personnel have affirmed compliance with the code of conduct of Board of Directors and senior management is annexed as "Annexure b" to the Corporate Governance Report forming part of this Report.

i. The Company has complied with the applicable Secretarial Standards relating to ‘Meetings of the Board of Directors? and ‘General Meetings? during the year.

ii. During the financial year under review, the Company has neither invited nor accepted or renewed any fixed deposit from public, shareholders or employees and no amount of principal or interest on deposits from public is outstanding as at the Balance Sheet date in terms of provisions of section 73 to 76 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

iii. There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

iv. The Company has not made any application nor any proceeding is pending against the company under IBC, 2016.

v. Since the Company has not entered into any One Time Settlement with Banks or Financial Institutions, furnishing details in this regard, is not applicable.

vi. The Company has complied with the provisions relating to the Maternity Benefit Act 1961 .

vii. The Company has complied with all the statutory requirements. The Company ensures compliance of the Companies Act, 2013; SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and various statutory authorities on quarterly basis in the Board Meeting.

CAUTIONARY STATEMENT

Statements in this report, describing the Company?s objectives, expectations and/or anticipations may be forward looking within the meaning of applicable Securities

Law and Regulations. Actual results may differ materially from those stated in the statement. Important factors that could influence the Company?s operations include global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations. The Company assumes no responsibility in respect of the forward-looking statements, which may undergo changes in future on the basis of subsequent developments, information or events.

ACKNOWLEDGEMENT & APPRECIATION

Your directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

Your directors appreciate and value the contribution made by every member of the Lehar family.