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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 2014 | 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '14    « Mar 13
Dear Shareholders,
 
 The Directors have pleasure in presenting the 28th Annual Report of
 the Company together with the Audited Annual Accounts for the financial yearended 31st March, 2014.
 
 In addition to the Audited Annual Accounts forthe financial year ended
 31st March, 2014, your Company has also presented its consolidated
 financial statements after considering the Audited Annual results of
 its 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
 under:- 
 
                                                              In Lacs.
 
 Particulars                             2013-14               2012-13
 
 Gross Sales                           50,060.20             35,272.92
 
 Less: Excise Duty                      1,711.33              1,780.25
 
 Net Sales                             48,348.87             33,492.67
 
 Add: Other Income                         75.93                198.03
 
 Revenue from Operations and 
 Other Income                           48,424.79            33,653.07
 
 Profit before Depreciation, 
 Finance Costs and Tax                   4,148.54             2,759.73
 
 Less: Finance Costs                     1,607.27             1,230.09
 
 Less: Depreciation & Amortisation       1,106.57               805.12
 
 Profit Before Exceptional Items         1,434.71               724.52
 
 Less: Exceptional Items                    19.72                19.49
 
 Profit Before Tax Expense               1,414.99               705.03
 
 Less: Tax Expenses                         75.54              (12.26)
 
 Net Profit for the year                 1,339.45               717.29
 
 Proposed Dividend (Including 
 provision for dividend 
 distribution Tax)                         299.04                    -
 
 Review of the operations of the Company:
 
 Your Directors have pleasure in informing you that your Company''s
 turnover has for first time crossed the landmark figure of Rs.500 Crores.
 Your Company, during the year under consideration, has achieved Gross
 Sales of Rs.50,060.20 Lacs (Previous year Rs.35,272.92 Lacs) and Net Sales
 of Rs.48,348.87 Lacs (Previous year Rs.33,492.67 Lacs) registering a growth
 of 42 % and 44% respectively as against previous year. Your Company,
 for the year under consideration, achieved a net profit of Rs.1,339.45
 Lacs which was 87% higher than the net profit of Rs.717.29 Lacs in the
 corresponding previous year. During the year under review, the domestic
 sales as well as export sales have shown tremendous growth resulting in
 to overall growth for the Company. The total number of pairs sold
 during the year under consideration was 113.10 Lacs as against 85.34
 Lacs in the corresponding previous year showing overwhelming response
 and customers'' satisfaction in Liberty''s products. At the domestic
 front, the north India has contributed around 45% of the sales while
 around 35% of the total domestic sales were contributed by Southern
 India. The sales in southern territories have shown good potential and
 strong momentum ever since the Company has decided to strengthen its
 reach in this part in the last few years.
 
 Your Company as reported earlier has implemented complete turnaround
 strategy, first of its kind in the fashion industry in India, in its
 operations by switching to pull model instead of conventional
 methodology of pushing the sales by adapting flexible production
 batches and faster replenishment by further strengthening its supply
 chain management. The major benefit besides registering a sales growth,
 in value and volume both, is the inventory improvement. Liberty is
 presently working on expanding its reach further and also improving its
 merchandising range, the other constituents of the strategy.
 
 During the year under consideration, M/s. ICRA Ltd. the leading rating
 agency has upgraded the Long Term Credit Rating of the Company to ICRA
 BBB  (pronounced as ICRA triple B plus) wherein the outlook of the
 rating has been stated as stable.
 
 Your Directors are also pleased to inform you that the scheme of
 amalgamation of its wholly owned Retail Subsidiary Company i.e Liberty
 Retail Revolutions Ltd.(LRRL) has been approved by the respective High
 Court(s) of Punjab & Haryana and New Delhi with appointed date 1st
 April, 2013 and Your Company has completed all the statutory
 formalities to give effect this amalgamation. Considering the
 availability of statutory approvals with effect from 1st April, 2013,
 the financial results of the Company for the year has been prepared
 including the financials of its Retail subsidiary also as if it were a
 retail division of the Company. Your Company has achieved around 9%
 growth in its sales because of inclusion of financials of its retail
 division as a result of the above amalgamation.
 
 As informed earlier, the respective arrangements with M/s. Liberty
 Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two
 partnership firms in which few directors are interested, through which
 rights to use their manufacturing facilities and intangible assets of
 the said firms against minimum guaranteed annual fees, are available
 with the Company until 31st March, 2015. Further, considering the
 development in relation to resolution of long pending dispute amongst
 the partners of LE and innumerable benefits of unlocking the
 shareholders value through the acquisition of tangible and intangible
 assets of LE and LGMD, currently available to the Company under
 aforesaid arrangements, your Company has proposed the acquisition of
 the assets from the firms and is presently working on the modalities to
 implement the same.
 
 Your Directors are hopeful that with the new strategies in place as
 also with the improvement in the economic scenario in future, Your
 Company will have more opportunities to grow and emerge as strong
 leader in the growing footwear market.
 
 Awards and Recognition
 
 Your Directors have pleasure and proud in informing that in the latest
 brand equity survey carried by The Economic Times, Liberty has been
 ranked as the 2nd most trusted brand in the footwear category which
 includes many international brands.
 
 Besides this, Your Company has also been awarded for many other
 recognitions including quality and excellence in its IT operations.
 
 Corporate Social Responsibility (CSR):
 
 Liberty has always been a frontrunner in contributing to the society at
 large considering as its responsibility and has identified various
 areas to make the contribution.  CSR committee has been constituted on
 29th May, 2014 to meet the requirements of the new Companies Act, 2013.
 With the implementation of new provisions of Section 135 of the
 Companies Act, 2013, Liberty is committed to further strengthen its
 effort and activities as prescribed under the Act. Liberty has
 constituted a CSR Committee of its Board comprising of Sh. Shammi
 Bansal, Sh. Adeesh Kumar Gupta, Executive Directors and Sh. Raghubar
 Dayal, Sh. Ramesh Chandra Palhan, Independent Directors of the Company
 as its Members to review and look after the activities of CSR including
 identifying the areas of CSR as per the provisions of the Act. The
 Company, as its responsibility, has taken the following activities
 during the year under consideration:
 
 - Providing medical care facilities for the community at large within
 the city of Karnal.
 
 - Uplifting of the persons living below the poverty line by providing
 skill enhancing employment opportunities.
 
 - Helping poor children and supporting education of the workers''
 children.
 
 - Organising tournaments and awards to the sports man to promote
 sports within the area close to Company''s Plants.
 
 - Extending donations for building of temple, school and for food &
 education of poor children.
 
 - Promoting green initiatives through tree plantations at plants of
 the Company.
 
 Subsidiary Company & Consolidated financial statement:
 
 Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned
 Overseas Subsidiary)
 
 The Wholly Owned Overseas Subsidiary of the Company M/s Liberty Foot
 Fashion Middle East FZE [LFF], Dubai has not yet started its operation
 and has incurred nominal routine expenses during the year under
 consideration which has been accounted while consolidating its
 financial statements with the Company.  Your Company till 31st March,
 2014 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.
 
 As required under the Listing Agreements entered into with the Stock
 Exchanges, Consolidated financial statements of the Company and its
 subsidiary Company is attached. The consolidated financial statements
 have been prepared in accordance with the relevant accounting standards
 as prescribed under section 211(3C] of the Companies Act, 1956.
 
 The consolidated financial statements disclose the assets, liabilities,
 income, expenses and other details of the Company and its subsidiary.
 
 Pursuant to the provision of section 212(8) of the Companies Act, 1956,
 the Ministry of Corporate Affairs vide its circular No. 2/2011, dated
 February 8, 2011 has granted general exemption from attaching the
 Balance sheet, statement of profit and loss and other documents of the
 wholly owned subsidiary company with the Balance sheet of the Company.
 
 A statement containing brief financial details of the Company''s wholly
 owned subsidiary for the financial year ended March 31, 2014 is
 included in the annual report. The annual accounts of the wholly owned
 subsidiary and the related information will be made available to any
 member of the Company/its wholly owned subsidiary seeking such
 information and are available for inspection by any member of the
 Company/ its wholly owned subsidiary at the Registered Office of the
 Company.
 
 Appropriations:
 
 Dividend
 
 Your Directors have recommended a dividend of Rs.1.50/- per Equity Share
 on Rs.17,04,00,000 Equity Share Capital (i.e. 15% on equity share of no/-
 each) for the financial year ended 31st March, 2014 for the payment to
 the shareholders subject to the approval of the members at the ensuing
 Annual General Meeting. The total outflow on equity dividend including
 corporate tax on dividend for the year ended 31st March, 2014 will be
 Rs.299.04 Lacs as against Rs.Nil paid last year. The dividend, if approved
 at the ensuing Annual General Meeting of the Company will be payable to
 those shareholders whose names appear on the Company''s register of
 members as at the end of 22nd September, 2014. In respect of shares
 held in dematerialized form, the dividend shall be payable on the basis
 of beneficial ownership as at the end of 22nd September, 2014 as per
 the details furnished by National Securities Depositories Ltd/Central
 Depositories Services (India) Ltd. for the purpose, as on that date.
 
 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.440.41 Lacs
 (Previous Year Rs.117.29 Lacs) has been proposed to be retained in the
 Profit & Loss Account of the Company.  Amalgamation
 
 In terms of Scheme of Amalgamation under section 391 to 394 of the
 Companies Act, 1956 sanctioned by the respective Order of Hon''ble
 High Court of judicature at New Delhi and Hon''ble High Court of
 Punjab & Haryana judicature at Chandigarh for the amalgamation of
 Wholly Owned Subsidiary i.e Liberty Retail Revolutions Ltd with the
 Company, the Copy of the said Orders were filed with the Registrar of
 Companies, NCT of Delhi & Haryana within requisite time frame to give
 effect to the said Amalgamation. The said amalgamation was made
 effective from 1st April, 2013 i.e the Appointed date and accordingly,
 the results of the retail subsidiary were also included in the stand
 alone results of the Company. As per approved Scheme of Amalgamation,
 the accounting for the amalgamation was done as per the method of
 Amalgamation in the nature of merger as defined in the Accounting
 Standard (AS)-14 as notified under the Companies Accounting Standard
 Rules, 2006.  Employees Stock Option Scheme(s):
 
 During the year ended 31st March, 2014, 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):
 
 The Company has not accepted/renewed any public deposits during the
 year under consideration.
 
 Board of Directors:
 
 Retirement by rotation
 
 Sh. Adesh Kumar Gupta and Sh. Satish Kumar Goel, Directors of the
 Company, retire by rotation in pursuance of the provisions of Section
 152 of the Companies Act, 2013 and being eligible offer themselves for
 the re- appointment at the ensuing Annual General Meeting.
 
 A brief profile along with the necessary details of Directors seeking
 their appointment/ re-appointment thereof has been provided in the
 Annexure-A of the Annexure to the Notice of the Annual General Meeting
 as required under Clause 49 of the Listing Agreement entered into with
 Stock Exchange(s).
 
 Resignation by the Director of the Company Sh. Premchand Garg,
 Independent Director of the Company since 2005, due to his
 pre-engagements, has resigned from the office of Director w.e.f. 29th
 May, 2014.  The Board has accepted his resignation and put on record
 their appreciation for the valuable services rendered by him as
 Director of the Company.
 
 Directors'' Responsibility Statement:
 
 As required under Section 217 (2AA) of the Companies Act, 1956, your
 Directors to the best of their knowledge and belief confirm that:
 
 I) in preparation of the Annual Accounts as on 31st March 2014, 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 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.
 
 Recommendations / Observations of Audit Committee:
 
 The recommendations / observations of the Audit Committee placed before
 the Board during the financial year ended 31st March, 20U 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. With
 the implementation of New Companies Act, 2013 and applicable provisions
 thereof, the Statutory Auditors of the Company shall be re-appointed
 for next three financial years only commencing from F.Y. 2014-15
 subject to ratification by members of the Company every year on every
 Annual General Meeting. A Certificate from the Auditors has been
 received to the effect that their appointment, if made, would be within
 the limits prescribed under Section 141 (3) (g) of the Companies Act,
 2013 and they are not disqualified 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:
 
 Your Directors have re-appointed M/s K. L. Jaisingh & Co., Cost
 Accountants, as the Cost Auditors of the Company in accordance with
 Section 148 of the Companies Act, 2013 for the financial year 2014-15
 for conducting the audit of cost records of the Company and fixed their
 remuneration. The said appointment and their remuneration shall be
 subject to ratification by the shareholders in the ensuing Annual
 General Meeting.
 
 The compliance report in respect of Cost records for the preceding
 Financial Year ended March 31, 2013 with requisite annexure issued by
 M/s K. L. Jaisingh & Co., Cost Accountants, has been filed with the
 Central Government within the statutory due date as prescribed under
 the applicable provisions of Companies Act, 1956 or any enactment
 thereof.
 
 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(1)(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(s), 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 Annual 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
 Annual Report.
 
 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 no/- 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: Thursday, 29th May, 2014
 
Source : Dion Global Solutions Limited
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