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
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
- 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
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
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
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.
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.
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.
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
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
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
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.
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
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
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
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
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).
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