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Liberty Shoes Directors Report, Liberty Shoes Reports by Directors
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Liberty Shoes
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    « Mar 12
Dear Shareholders,
 
 The Directors have pleasure in presenting the 27th Annual Report of
 the Company together with the Audited Annual Accounts for the financial
 year ended 31stMarch, 2013.
 
 In addition to the Audited Annual Accounts for the financial year ended
 1st March, 2013, your Company has also presented its consolidated
 financial statements after considering the Audited Annual results of
 its retail subsidiary Liberty Retail Revolutions Limited and overseas
 wholly owned subsidiary Liberty Foot Fashion Middle East FZE in
 accordance with the requirements of the applicable Accounting Standards
 and provisions of the Listing Agreement with the Stock Exchanges.
 
 Financial Highlights (Standalone):
 
 The highlights of the financial statements are as unden- ts In Lacs
 
 
 Particulars                                    2012-13       2011-12
 
 Gross Sales                                  35,272.92     34,622.82
 
 Less: Excise Duty                             1,520.64      1,394.30
 
 Net Sales                                    33,752.28     33,228.52
 
 Add: Other Income                               182.12        103.84
 
 Revenue from Operations and Other Income     33,934.40     33,332.36
 
 Profit before Depreciation, Finance 
 Costs and Tax                                 2,759.73      2,958.25
 
 Less: Finance Costs                           1,230.09      1,172.60
 
 Less: Depreciation & Amortisation               805.12        738.91
 
 Profit Before Exceptional Items                 724.52      1,046.74
 
 Less: Exceptional Items                          19.49        323.83
 
 Profit Before Tax Expense                       705.03        722.92
 
 Less: Tax Expenses                              (12.26)       (39.72)
 
 Net Profit for the year                         717.29        762.64
 
 Add: Opening Balance                          4,329.91      4,167.27
 
 Profit Available for Appropriation(s)         5,047.20      4,929.91
 
 Less: Transfer to General Reserve               600.00        600.00
 
 Surplus carried to Balance Sheet              4,447.20      4,329.91
 
 
 Review of the operations of the Company:
 
 Your Directors are always of the view that Indian footwear industry has
 huge potential due to its intrinsic strengths and this industry would
 further grow because of change in consumption habits and consumer
 awareness. In its efforts to exploit the available potential, your
 Company has been working to improve its presence in the footwear market
 where it has always been considered as a leader and known for its
 fashion consciousness.
 
 Your Company, during the year under consideration, has achieved Gross
 Sales of Rs.35,272.92 Lacs (Previous year Rs.34,622.82 Lacs) and Net Sales
 of Rs.33,752.28 Lacs (Previous year 33,228.52 Lacs). During the year,
 under review the domestic sales performance has improved as against the
 previous year but on the exports side the sales have declined due to
 global economic slowdown.
 
 Your Company, during the year under review, registered a profit after
 tax of Rs.717.29 Lacs as against Rs.762.64 Lacs in the corresponding
 previous year. The rising input cost has been the concern area for
 which the Company is taking effective steps to control and to suitably
 pass it on to the consumers. The expansion of I reach, frequent
 fashionable launch to attract customers and selective outsourcing of
 footwear with quality compliance are the few steps the Company has
 implemented to improve the overall efficiency of the Company.
 
 Your Directors, in view of the benefits available to the Company and
 after obtaining the requisite approval from the Central Government in
 terms of applicable provisions of the Companies Act, 1956, have
 authorized and approved the agreement(s) entered in to by the Company
 with (i) Liberty Group Marketing Division (LGMD) for use of services of
 Fixed Assets for manufacturing at Karnal (Haryana), registered
 Trademarks and Domestic Sales Network for sale of footwear for a period
 of 2 (two) years (ii) Liberty Enterprises (LE) for use of footwear
 manufacturing facilities at Karnal and export sales network for a
 period of 2 (two) years and (iii) Liberty Footwear Co. (LFC) for use of
 trademark LIBERTY and other marks on exclusive basis for a period of
 15 (Fifteen) years, against payment of minimum guaranteed obligation.
 Your Company, in future, has plans to restructure these arrangements
 with emphasis to unlock shareholders value, the details of which shall
 be placed before the members appropriately.
 
 Your Company, during the year under review, registered consolidated
 turnover of Rs.37,806.65 Lacs as compared to Rs.37,033.59 Lacs in the
 previous year. The net profits on consolidated basis are Rs.538.78 Lacs
 as compared to T438.40 Lacs in the previous year.
 
 Your Directors are constantly making their efforts to improve the
 working of the Company with optimal utilization of available resources
 and have also intended to further consolidate the business including
 amalgamation of its retail subsidiary with the Company.
 
 Corporate Social Responsibility:
 
 Liberty, considering its responsibility, has identified the following
 areas to make its contribution towards society:
 
 - Medical care for the community at large in the areas close to the
 Company''s plants.
 
 - Supporting education of the workers'' children.
 
 - Charitable donations and the maintenance of the public amenities.
 
 k - Green initiatives through tree plantations at plants of the
 Company.
 
 Subsidiary Companies:
 
 Liberty Retail Revolutions Ltd (LRRL), Retail Subsidiary
 
 For the year under consideration, LRRL''s performance has been
 satisfactory and it has recorded a cash profit as against the cash loss
 during the corresponding previous year. During the year under
 consideration, LRRL has achieved turnover of Rs.5,975.73 Lacs (Previous
 year Rs.5,786.51 Lacs).
 
 Your Company, as on 31st March, 2013, holds 1,06,50,000 Equity Shares
 constituting 100% stake in Retail Subsidiary in addition to 5,00,000
 Fully Convertible Debentures of the face value of Rs.100 each aggregating
 to Rs.500 Lacs.
 
 Your Directors, as reported earlier also, have approved the Scheme of
 Amalgamation of M/s Liberty Retail Revolutions Ltd. (LRRL) with the
 Company to be effective from 1st April, 2013 subject to sanction from
 the respective Hon''ble High Court(s) and approval from the Members of
 the Company. The necessary formalities as required to effect the above
 said amalgamation have already been initiated. Your Directors are of a
 view that the scheme is consistent with the objective of consolidating
 the business leading to operational efficiencies.
 
 Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned
 Overseas Subsidiary)
 
 Your Company till 31st March, 2013 has invested a sum of Rs.302.42 Lacs
 (Previous Year Rs.302.42 Lacs) in LFF as its capital contribution. The
 financial results of LFF have been consolidated with the Company in
 compliance with AS-21 of the Accounting Standard issued by the
 Institute of Chartered Accountants of India.
 
 General Approval for not attaching the Annual Accounts of the
 Subsidiary Companies
 
 Your Board of Directors have accorded their consent vide Resolution
 passed in their Meeting held on 29'' May, 2013 for not attaching a copy
 of the Balance Sheet, Statement of Profit & Loss, Reports of Directors
 and Auditors of the Subsidiary Companies with the Audited Annual
 Accounts of the Company pursuant to Section 212 of the Companies Act,
 1956 read with General Circular No. 2/2011 dated February 8, 2011
 issued by Ministry of Corporate Affairs.  Accordingly, the copies of
 Balance Sheet, Statement of Profit & Loss, Reports of Directors and
 Auditors of the two Subsidiary Companies have not been attached with
 the Annual Accounts of the Company.  However, these documents shall be
 made available to the shareholders of the Company and of Subsidiary
 Companies on any working day from 10.00 A.M. till 1.00 RM. The Annual
 Accounts of the Subsidiary Companies are open for inspection by any
 shareholder at the Registered Office of the Company and of the
 Subsidiary Companies. Any shareholder of the Company, who wishes to
 obtain a copy of the said Annual Accounts of the Subsidiary Companies,
 may send a request in writing to the Company Secretary at the
 Registered Office of the Company.
 
 However, a statement containing the brief financial details of the
 subsidiary Companies for the financial year ended 31st March, 2013 is
 included in the financial statements of the Company as required under
 the provisions of Section 212 of the Companies Act, 1956. The aggregate
 amount of a) Capital b) Reserves c) Total Assets d) Total Liabilities
 e) Detail of Investment (except investment in subsidiaries) f) Turnover
 g) Profit Before Taxation h) Provision For Taxation i) Profit After
 Taxation j) Proposed Dividend in respect of two Subsidiary Companies
 are included in the Consolidated Balance sheet of the Company. Further,
 the Consolidated Financial Statements pursuant to the Accounting
 Standard-21 as issued by the Institute of Chartered Accountants of
 India and Clause 32 of the Listing Agreement have been presented by the
 Company elsewhere in this Annual Report including the financial results
 of its subsidiaries.
 
 Appropriations:
 
 Dividend
 
 Your Directors, in view of financial requirements for the Company, do
 not recommend dividend on Equity Share Capital of the Company to the
 shareholders for the financial year ended 31 March, 2013.
 
 Transfer to Reserves
 
 Your Directors proposed to transfer Rs.600.00 Lacs (Previous Year Rs.600.00
 Lacs) to the General Reserves out of the profits available with the
 Company for appropriations.  Accordingly, an amount of Rs.117.29 Lacs
 (Previous Year Rs.162.64 Lacs) has been proposed to be retained in the
 Profit & Loss Account of the Company.
 
 Employees Stock Option Scheme(s):
 
 During the year ended 31st March, 2013, 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.
 
 Risk Management:
 
 The Management of the Company has formulated and established the
 process and procedure of assessing the risk to control at early stage.
 The Management of the Company has always been consciously reviewing its
 business operations in accordance with set rules and procedure and if
 any deviation or risk is found, remedial and effective steps are being
 taken to minimize the deviation and risk.
 
 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):
 
 In terms of the provisions of Section 58A of the Companies Act, 1956
 read with Companies (Acceptance of Deposit) Rules, 1975, the Company
 has not accepted any public deposits during the year under
 consideration.
 
 Board of Directors:
 
 Retirement by rotation
 
 Sh.  Amitabh Taneja, Sh.  Shammi Bansal, Sh. Vivek Bansal and Sh.
 Adeesh Kumar Gupta, Directors of the Company, retire by rotation in
 pursuance of the provisions of Section 256 of the Companies Act,
 1956 and being eligible offer themselves for the re- i appointment at
 the ensuing Annual I General Meeting.
 
 A brief profile along with the necessary details including a memorandum
 of interest of Directors seeking their appointment/ re-appointment
 thereof has been provided in i Annexure - A of Annexure k to the Notice
 of the Annual i General Meeting as J required under Clause 49 of the
 Listing Agreement entered into with Stock Exchange(s) and the
 provisions of section 302 of the Companies Act, 1956.
 
 Expiry of tenure of Director (Law & Taxation)
 
 The Members of the Company, in their meeting held on 28th September,
 2011 had approved the appointment of Sh. Satish Kumar Goel as Director
 (Law & Taxation)with remuneration w.e.f. 1st April, 2011 for a period
 of two years and accordingly, his appointment as Director (Law &
 Taxation) expired on 31st March, 2013. However, Sh. Satish Kumar Goel
 shall be continuing as Director of the Company subject to retirement by
 rotation pursuant to the provisions of Section 256 of the Companies
 Act, 1956.
 
 Increase in Remuneration of Sh. Adesh Kumar Gupta, CEO & Executive
 Director, Sh. Adarsh Gupta, Sh. Shammi Bansal, Sh. Sunil Bansal and Sh.
 Adeesh Kumar Gupta, Executive Directors of the Company
 
 Sh.  Adesh Kumar Gupta, CEO & Executive Director, Sh. Adarsh Gupta, Sh.
 Shammi Bansal, Sh. Sunil Bansal and Sh. Adeesh Kumar Gupta, Executive
 Directors of the Company have been associated with the Company since
 very long period and devoting their time, experience and efforts in the
 day to day operations and management of the Company.  The respective
 Executive Directors are being paid remuneration of Rs.1,00,000/- p.m.
 which does not commensurate with the services they rendered for the
 Company and remuneration being paid for this position in the similar
 industry.  Your Directors have, therefore, proposed to increase their
 remuneration from Rs.1,00,000/- p.m.  to Rs.4,00,000/- p.m.  including
 perquisites as per Company''s rules w.e.f.  1 April, 2013 subject to
 the approval of the Members of the Company in the forthcoming Annual
 General Meeting.  The remuneration payable to the aforesaid executive
 directors has also been approved by the Remuneration Committee.  The
 enabling resolution(s) with explanatory statement incorporating all the
 requisite details including their tenure are included elsewhere in this
 Annual Report.
 
 Directors'' Responsibility Statement:
 
 Pursuant to section 217(2AA) of the Companies Act 1956, the Directors
 to the best of their knowledge and belief confirm that:
 
 i) in preparation of the Annual Accounts as on 31st March 2013, of the
 Company, the applicable Accounting Standards have been followed along
 with the proper explanation relating to material departures;
 
 ii) they have selected such accounting policies and applied them
 consistently and made judgements 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 profits of the
 Company for that period;
 
 iii) they have taken proper and sufficient care for maintenance of
 adequate accounting records with in the provisions of the Companies
 Act, 1956 and for safeguarding the assets of the Company and for
 preventing and detecting frauds and other irregularities;
 
 iv) they have prepared the annual accounts on a going concern basis.
 
 Recommendations / Observations of Audit Committee:
 
 The recommendations / observations of the Audit Committee placed before
 the Board during the financial year ended 31st March, 2013 in respect
 of matters pertaining to the financial management or any other matter
 related thereto, were considered and duly accepted by the Board of
 Directors of the Company.
 
 Statutory Auditors and their Report:
 
 M/s Pardeep Tayal & Co., Chartered Accountants, the Statutory Auditors
 of the Company retire at the conclusion of the ensuing Annual General
 Meeting and have confirmed their eligibility for re- appointment.
 
 Your Company''s Directors have examined the Statutory Auditors'' Report
 on Annual Accounts of the Company and observed that no reservation,
 qualification or adverse remark was 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.
 
 Cost Auditors:
 
 The Central Government vide its Order F. No.  52/26/CAB-2010 dated
 24/01/2012 read with the Companies (Cost Accounting Records) Rules,
 2011 dated 03/06/2011 has made optional the Audit of cost records in
 respect of certain industries including footwear for the financial year
 2012-13.  Under the applicable rules, the Companies not covered for
 mandatory Cost Audit are required to file compliance report in respect
 of Cost records with the Central Government for the financial year
 2012-13.
 
 Your Directors have appointed M/s K. L. Jaisingh & Co., Cost
 Accountants for carrying out due diligence and issuance of the
 requisite compliance report for the financial year 2012-13 in
 compliance with the applicable provisions.
 
 The Cost Audit Report for the preceding Financial Year ended March 31,
 2012 with requisite form(s) duly filled and signed has been filed with
 the Central Government within the statutory due date as prescribed
 under the applicable provisions.
 
 Particulars of Employees:
 
 During the year, no employee, whether employed for the whole or part of
 the year, was drawing remuneration exceeding the limits mentioned under
 Section 217(2A) of the Companies Act, 1956 and rules framed there
 under.
 
 Conservation of Energy and Technology Absorption and Foreign Exchange
 Earnings and outgo:
 
 Information in accordance with the provisions of Section 217(l)(e) of
 the Companies Act, 1956 read with Companies (Disclosure of particulars
 in the Report of Board of Directors) Rules, 1988 in relation to
 conservation of Energy and Technology Absorption and Foreign Exchange
 Earnings and Outgo is given in the Annexure A forming part of this
 report.
 
 Management Discussion and Analysis Report:
 
 In terms of provisions of Clause 49(IV)(F) of the Listing Agreement
 with Stock Exchange, a Management Discussion and Analysis Report,
 stating the required matters in respect of the developments in footwear
 Industry and risks etc., has been attached to this report.
 
 Corporate Governance Report:
 
 In accordance with the provisions under the Clause 49 of Listing
 Agreement and as amended by the SEBI from time to time, the Board of
 Directors have prepared the Corporate Governance Report detailing the
 compliance report of Corporate Governance. Accordingly, a separate
 section on Corporate Governance along with Statutory Auditors''
 certificate confirming the compliance is annexed and forms part of this
 report.
 
 Outstanding Share Capital and its Listing:
 
 Your Company has outstanding Share Capital of 71 7,04,00,000/-(Previous
 Year 71 7,04,00,000/-) consisting of 1,70,40,000 (Previous Year
 1,70,40,000) Equity Shares of Rs.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).
 
 Acknowledgements:
 
 Your Directors place on record their sincere appreciation for the
 cooperation and support received from the shareholders, Bankers,
 Channel Partners and the Government Authorities.
 
 Your Directors also 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
 
 
                                         Adesh Kumar Gupta
 
                                      Chairman of the Meeting
 
 Place: Libertypuram, Karnal 
 
 Dated: Wednesday, 29,th May, 2013
Source : Dion Global Solutions Limited
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