Liberty Shoes
BSE: 526596 | NSE: LIBERTSHOE | ISIN: INE557B01019 | Leather Products
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Mar '08 |
The Directors have pleasure in presenting the 22nd Annual Report of
the Company together with the Audited Accounts for the year ended 31 st
March, 2008.
The highlights of the financial statements are as under: -
Financial Highlights:
(Rs. in lacs)
Particulars 2007-08 2006-07
Gross Sales 25789.35 23754.48
Export 4538.31 4816.86
Domestic 21251.04 18937.62
Less: Excise Duty 1004.27 1539.93
Net Sales 24785.08 22214.55
Other Income 507.11 167.28
Profit before Interest and Deprecation 3542.73 3245.01
Interest 1288.09 830.50
Depreciation 637.97 463.35
Profit before taxation 1616.76 1915.16
Provision for Taxation & Deferred tax liability 11.62 249.22
Profit after tax 1605.14 1701.94
Add/(Less): Previous year Adjustment (8.97) 16.38
Net Profit for the year 1596.17 1718.32
Add: Opening Balance 2290.43 1172.11
Profit Available for Appropriation(s) 3886.60 2890.43
Transfer to General Reserve 600.00 600.00
Surplus carried to Balance Sheet 3286.60 2290.43
Review of Companys Operations:
During the year under review, your Company achieved Gross Sales of Rs.
25789.35 Lacs (Previous year Rs. 23754.48 Lacs) and Net Sales of Rs.
24785.08 Lacs (Previous year Rs. 22214.55, Lacs) recording an increase
of 8.57% & 11.57% respectively as compared to the previous year. The
Profit after Tax of the Company stood at Rs. 1605.14 Lacs as compared
to Rs. 1701.94 Lacs in the previous year. This Profit also includes a
profit of Rs. 254.99 Lacs available to the Company on disposal of
assets of its Rubber Division whose activities have already been
dispensed with. The operating profit margins were reduced mainly due to
higher interest costs and the lower utilization of available
capacities. The Company, as indicated in our previous reports, has
expanded its manufacturing capacities in view of its retail
initiatives. However, the retail ventures so far have not performed up
to the Companys expectations Your Directors are concerned with this
situation and are taking appropriate measures to overcome the
shortcomings.
Your Company wishes to dominate the Indian footwear industry with best
available technology, expanded capacities, latest fashionable products
and also by further spreading its existing customer network. The
ongoing economic slowdown and continuously rising inflationary trends
could adversely affect the working of the Company in the short run but
being fully equipped to meet growing demands of the fast changing
fashionable industry, your Directors feel that your Company has a
promising future in the long run.
Brand building and Business Promotion:
Your Company, being fashion conscious has been spending a sizable
amount on its brand building and business promotion activities. Apart
from expending on advertisement through print and visual media, the
Company also sponsored major fashion events. During the year under
consideration, your Company sponsored Pantaloon Femina Miss India 2008
at Mumbai and introduced specialized collection for this event. In
spite of the inexorable pressure from various directions, the brand
promotional activities of your Company have been highly appreciated and
also suitably awarded.
Subsidiaries / Joint Venture
Your Company has two subsidiaries- Liberty Retail Revolutions Ltd.
(LRRL) engaged in footwear retailing and Liberty Foot Fashion Middle
East FZE, Dubai set up for global retailing.
Liberty Retail Revolutions Ltd. (LRRL)
LRRL, during the year under consideration, has further strengthened its
retail presence by increasing its Revolution outlets. LRRL as on 31st
March, 2008 has 33 (Previous year 18) retail stores spread over the
major cities in India. The Company for the financial year ended 31st
March, 2008 has posted Sales of Rs. 1722.62 Lacs (Previous year Rs.
1243.50 Lacs) and recorded a loss of Rs. 460.94 Lacs (Previous year a
net loss of Rs. 91.91 Lacs).
LRRL, during the year, has allotted 6.50 Lacs Equity Shares of Rs. 10/-
each at a premium of Rs. 140/- per share aggregating to Rs. 975 Lacs on
a preferential basis.
Your Companys stake, due to this allotment, in LRRL now stood at
93.86% (Previous year 99.96%).
Liberty Foot Fashion Middle East FZE Dubai (LFF)
Your Directors are of the opinion that overseas operations of the
Company can further be strengthened by enhancing its presence in the
Middle East. Considering the potential available and in view of its
plans for global retailing your Company has set up its Wholly Owned
Subsidiary (WOS) at Middle East in UAE. Your Company till 31st March,
2008 has invested a sum of Rs. 248.62 Lacs (Previous year Rs. 164.06
Lacs) in its WOS. This WOS has not yet commenced its business
activities however it is in the process of establishing the required
infrastructure for the same.
Joint Venture (JV)
The Companys JV for footwear retailing with Pantaloon Retail India
Ltd. (PRIL) has established 25 retail footwear stores (Previous year
16) till 31st March, 2008. During the year, this Joint Venture has
changed its financial year from its earlier period of July-June to
April-March. In the consolidated results given else where in the Annual
Report, its during the year under review the joint venture partner,
with the consent of your Company and the execution of deed of
adherence, has transferred its shareholding to Future Ventures India
Ltd., another Company of their group.
Your Companys stake in JVs Equity is 49% whereas the Pantaloon holds
51% stake. Your Company towards its requisite stake has contributed a
sum of Rs. 785.76 Lacs up to 31st March, 2008. The Company for the
financial year ended 31st March, 2008 has posted Sales of Rs. 2187.91
Lacs (Previous year Rs. 797.04 Lacs), and recorded a loss of Rs.
1242.33 Lacs (Previous year Rs. 668.13 Lacs).
Exemption from including Balance Sheet of the Subsidiaries
Your Company applied to the Central Government under section 212(8) of
the Companies Act, 1956 seeking an exemption from attaching the copy of
Balance Sheet, Profit & Loss Account, Directors Report and Auditors
Report of its retail subsidiary and its wholly owned overseas
subsidiary at Dubai. In terms of approval granted by the Central
Government vide order No: 47/365/2008-CL-III dated 30th May, 2008, copy
of Balance Sheet, Profit & Loss Account, Report of Board of Directors
and the Auditors of the two subsidiaries have not been attached with
the Balance Sheet of the Company. However, the statement required under
Section 212 of the Companies Act, 1956 is attached to the Audited
Accounts. The Company shall also make these documents / details
available upon request by any member of the Company interested in
obtaining the same. The Consolidated Financial Statements pursuant to
Accounting Standard AS 21 issued by the Institute of Chartered
Accountants of India, presented by the Company include the financial
information of its subsidiaries.
Dividend:
Your Directors, considering the financial requirements, do not
recommend dividend on the Equity Share Capital of the Company for the
financial year ended 31st March, 2008. Your Directors feel that ensuing
proposal in the long run will strengthen the financial resources of the
Company.
Disclosure(s):
The Company has so far not issued ESOP to its employees and there are
no such plans envisaged at present in this regard.
The Company has not under taken any exercise of buy back of its Equity
Share either from the shareholders or from the Capital market during
the year under review.
Considering the size and operations of business, the Company has a
suitable frame work of risk assessment and risk mitigation. All types
of business risks are analysed and all corrective measures are taken
wherever needed.
Corporate Governance:
The Corporate Governance Report, as prescribed under the provisions of
the Listing Agreement and as amended by the SEBI from time to time was
adopted by the Board of Directors in their meeting held on Friday, 29th
August, 2008. A separate section on Corporate Governance along with
Statutory Auditors certificate confirming the compliance is annexed and
forms part of this Report. Director(s):
Retirement by Rotation:
Sh. Sunil Bansal, Sh. Surendra Kumar Arya and Sh. Satish Kumar Goel,
Director(s) of the Company retire by rotation as prescribed in Section
256 of the Companies Act, 1956 and being eligible offer themselves for
the re- appointment.
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 of the Company as on 31st
March, 2008, the applicable Accounting Standards have been followed
along with proper explanation relating to material departures;
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 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.
Auditors and their Report: *
M/s. Pardeep Tayal & Co., Chartered Accountants, the retiring Auditors
being eligible to be considered for re- appointment under Section 224(1
B) of the Companies Act, 1956, have offered themselves for
reappointment and have furnished a certificate of their eligibility to
continue in this capacity. The enabling resolution in this respect is
being placed at item no. 5 of the Notice. The Audit Committee and the
Board recommend the re-appointment for the approval of the members.
The Board has examined the Statutory Auditors Report on accounts of
the Company and their clarifications, where ever necessary, have been
included in the Notes to the Accounts section of the Annual Report.
Cost Auditors:
In conformity with the directives of the Central Government, the
Company has appointed M/s. K.L. Jaisingh & Co., Cost Accountants, as
the Cost Auditors of the Company under Section 233 B of the Companies
Act, 1956 for the financial year 2007-08.
Fixed Deposits:
In terms of the provisions of Section 58 A of the Companies Act 1956
read with Companies (Acceptance of Deposit Rules) 1975, the Company has
not accepted any fixed deposit during the year under consideration.
Outstanding Share Capital and its Listing:
Your Company has outstanding Share Capital of Rs. 17,04,00,000/-
consisting of 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) & Bombay Stock Exchange
Ltd. (BSE).
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.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo:
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 regarding conservation
of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo is given in the Annexure forming part of this report.
Acknowledgments:
Your Directors take this opportunity to express their appreciation to
the shareholders, channel partners, employees at all levels, bankers
and various Government departments who have supported the Company
during the year and also look forward for their support in all future
endeavors of the Company.
For and on behalf of
the Board of Directors
Place: Libertypuram, Karnal Adesh Gupta
Dated: Friday, 29th August, 2008 Chairman of the Meeting
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| Source : Religare Technova | |
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