The Directors have pleasure in presenting the 24th Annual Report of theTT
Company together with the Audited Annual Accounts for the financial
year ended 31st March, 2010.
In addition to Audited Annual Accounts for the financial year ended
31st March, 2010, your Company has also presented its consolidated
financial statements after considering the annual audited results of its
subsidiaries namely Liberty Retail Revolutions Ltd. and 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:
The highlights of the financial statements are as under:-
(Rs In Lacs)
Particulars 2009-10 2008-09
Gross Sales 26611.48 24752.66
ExporT 3795.46 3751.43
Domestic 22816.02 21001.23
Less: Excise Duty 544.62 708.28
Net Sales 26066.86 24044.37
Other Income 73.46 140.79
Profit before Interest and Depreciation 2464.13 2609.18
Interest 852.71 221.04
Depreciation 679.25 659.46
Profit before taxation 932.15 728.68
Provision for Taxation & Deferred tax
liability (35.06) (25.84)
Profit after tax 967.21 754.52
Add / (Less): Previous year Adjustment (46.90) (2.43)
Net Profit for the year 920.31 752.09
Add: Opening Balance 3438.69 3286.60
Profit Available for Appropriation(s) 4359.00 4038.69
Transfer to General Reserve 600.00 600.00
Surplus carried to Balance Sheet 3759.00 3438.69
Review of the operations of the Company:
Your Company, as reported earlier, has been going through with the
implementation of a complete turnaround strategy to reinforce and
strengthen its marketing segments, its supply chain management and its
working capital efficiencies. Your Directors have pleasure in informing
that the strategic changes have started showing positive results, which
though not completely according to estimates but nevertheless
improvement is happening.
Your Company has achieved a turnover of Rs26611.48 Lacs (Previous Year
Rs24752.66 Lacs) and registered a growth of 28.19% in its Net Profits
of Rs 967.21 for the financial year 2009-10 as against the previous
financial years Net Profits of Rs,754.52.
The number of pairs produced and sold during the year under review has
increased endorsing Libertys potential and penetration in the growing
footwear market. The wholesale & retail segments have been
strengthened with the addition of new distributors and new exclusive
franchisees to the existing set up. To facilitate and to achieve better
customer services, significant improvements have been made in planning
& logistics efficiencies as well. The thrust was to improve service
levels to ensure availability of Companys products at all points in
its supply chain. In order to improve working capital efficiencies,
stringent measures have been adopted, which resulted in improved
inventories and receivables.
During the year under consideration, your Company has continued its
thrust towards delivering best quality and ensuring customers delight.
This was supplemented by the Companys qualitative initiatives at
different levels. Your Company in order to achieve a competitive
advantage has also invested substantially in Information Technology and
successfully established a transaction mechanism which would be
implemented at all Franchise Stores pan India, and will also be rolled
over with all other channel partners of the Company.
In view of the ongoing strategic developments, Your Directors are
hopeful of further improvement in the performance of the Company in the
years to come.
Awards / Recognition:
Your Company, during the year under consideration, has been conferred
with the Elite Membership by the World Confederation of Business,
Texas, USA in recognition of its distinguished successful business
model. This Confederation is a renowned international organization,
which encourages business development worldwide and recognizing
Companys growth along with business leaders in each country.
During the year, Liberty has also been recognized by Department of
Industrial Policy & Promotion, Ministry of Commerce and Industry,
Government of India for its initiatives towards technology up gradation
and modernization.
Corporate Social Responsibility:
Liberty has always been conscious about its responsibilities towards
the society and environment. Whenever any opportunity comes across,
Liberty has never hesitated to provide the necessary assistance to the
needy. During the year under review, Liberty took pride in associating
itself with the Nation for felicitating the winners of National Bravery
Awards. Besides, Liberty, considering its duty and commitment to the
Nation, has also decided to participate in the relief operations at
recent flash flood at Leh by distributing shoes to the affected people.
Liberty, in order to create green and better environment has also made
environmental arrangement with an Infrastructural Environment Company
for treatment and disposal of hazardous wastes generated at its plants
at Haryana.
Subsidiary Companies and Joint Venture:
Liberty Retail Revolutions Ltd. (LRRL), Retail Subsidiary
Despite the competition and low profit margins in the Indian Retail
Industry, LRRLs performance during the year under consideration has
been satisfactory and noteworthy as it has achieved a turnover of Rs
3513.82 Lacs with a growth of 39% as against the previous year. LRRL is
optimistic about the changing trends expected in the retail sector
being accompanied by the conception of customers brand consciousness.
Poised with strong brand recognition, LRRL has expanded its retail
presence to 92 stores as against 49 in the previous year.
LRRL, in order to capitalize the booming Indian Retail Industry
potential, has also decided to further expand its existing business
network. LRRL has raised Rs500.00 Lacs from your Company during the
year 2009-10 by issuing 5,00,000 Zero % Fully Convertible Debentures to
the Company.
Your Company holds 99,96,150 Equity Shares constituting 93.86% stake in
its Retail Subsidiary.
Liberty Foot Fashion Middle East FIE (LFF), Overseas Subsidiary
Due to unforeseen recession in Dubais economy, LFF has not formalized
any sustainable project to commence its business activities in accordance
with the plans conceived initially. However, with progressive approach
of regulatory bodies, LFF expects to explore the right opportunities in
Footwear Industry through UAE for commencing operations shortly.
Your Company till 31st March, 2010 has invested a sum of Rs 250.58 Lacs
(Previous Year Rs 248.62 Lacs) in LFF.
Foot Mart Retail India Limited (FMRIL), Joint Venture (JV)
The Members are informed earlier that Liberty was contemplating to
divest its stake from the JV besides working on its restructuring.
However during the year, both the partners Pantaloon and Liberty could
not reformulate any feasible business model for JV. Liberty, as planned
earlier, has divested its stake in the JV to Geofin Investments Pvt.
Ltd. at its stated value.
At present, Liberty does not hold any stake in the JV and the financial
results of JV have not been considered for presenting the consolidated
financial statements of the Company for the financial year ended 31st
March, 2010.
Exemption from attaching the Annual Accounts of the Subsidiary
Companies
The Company has made an application to the Central Government for
seeking the exemption under Section 212(8) of the Companies Act, 1956
from attaching a copy of the Balance Sheet, Profit & Loss Account,
Reports of Directors and Auditors of the Subsidiary Companies. In terms
of approval granted by the Central Government vide its Order No. 47 /
606 / 2010 CL - III dated 18th June, 2010, the copy of Balance Sheet,
Profit & Loss Account, Reports of Directors and Auditors of the two
Subsidiary Companies have not been attached with the Balance Sheet of
the Company. However, these documents shall be made available to the
shareholders of the Company and of Subsidiary Companies at any working
day from 10.00 A.M. till 6.00 PM. The Annual Accounts of the Subsidiary
Companies are open for inspection by any investor 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 so that the
needful can be done.
However, a statement containing the brief financial details of the
Subsidiary Companies for the financial year ended 31st March, 2010 are
included in the financial statements of the Company as required under
the provisions of Section 212 of the Companies Act,1956. Besides, the
details of the accounts of Subsidiary Companies are also available on
the website of the Company i.e. www.libertyshoes.com. Further, the
Consolidated Financial Statements pursuant to the Accounting
Standard(s) 21 and 27 as issued by Institute of Chartered Accountants
of India and Clause 32 of Listing Agreement, presented by the Company
elsewhere in the Annual Report include the financial results of its
subsidiaries.
Appropriations:
Dividend
Keeping in consideration the financial requirements and to further
consolidate the financial resources, your Directors do not recommend
any dividend on Equity Shares Capital of the Company to the
shareholders for the financial year ended 31st March, 2010.
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 320.31
Lacs (Previous Year Rs152.10 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, 2010, the 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:
Proper procedures for risk assessment and minimization thereof have
been laid down by the Management of the Company in accordance with the
Companys exposure to the all type of business risks involved in the
operations of the Company. Moreover, the same were periodically
reviewed by the Management of the Company in order to ensure the
adequate control over the business risks, if any, faced by the Company.
Buy Back of Equity Shares:
The 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:
Re-appointment of Executive Directors
Having regard to the past contributions of Sh. Adesh Kumar Gupta, Sh.
Adarsh Gupta & Sh. Shammi Bansal towards the Company and for further
strengthening of its operations, the Board of Directors of the Company
have proposed to re-appoint Sh. Adesh Kumar Gupta as Chief Executive
Officer and Sh. Adarsh Gupta & Sh. Shammi Bansal as Executive Directors
in their Meeting held on 12th August, 2010, subject to the approval of
the Members of the Company. The remuneration payable to the Executive
Directors has also been approved by the Remuneration Committee of the
Board at its Meeting held on 12th August, 2010.
Retirement by rotation
Sh. Shammi Bansal, Executive Director, Sh. Siddharth Sanghi and Sh.
Amitabh Taneja, Independent 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-appointment at the
ensuing Annual General Meeting.
A brief profile alongwith the necessary details of Directors seeking
appointment / re-appointment thereof has been provided elsewhere in the
Annual Report as required under Clause 49 of the Listing Agreement
entered into with Stock Exchanges.
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 2010, 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.
Recommendation / Observation of Audit Committee:
All the recommendations / observations of the Audit Committee, which
were placed before the Board during the financial year ended 31st
March, 2010 in respect of any matter pertaining to the financial
management or any other matter related thereto, were 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 retires at the conclusion of the ensuing Annual General
Meeting and has confirmed their eligibility for re- appointment.
The Board has 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 the Annual
Report.
Cost Auditors:
M/s K. L. Jaisingh & Co., Cost Accountants, have been appointed as the
Cost Auditors of the Company for conducting the Cost Audit for the
financial year 2010-11 as required under Section 233B of the Companies
Act, 1956 and the requisite approval of the Central Government has also
been obtained in respect of the said appointment.
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 Listing Agreement with
Stock Exchanges, a Management Discussion and Analysis Report, clearly
stating the required matters in respect of the relevant industrial
trends, developments, risks etc., have 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 alognwith 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 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 Rs 10/- each and these Equity Shares
are presently listed and available for trading at National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE).
Acknowledgements:
Your Directors would like to express their appreciation and gratitude
for the assistance and continuous support provided by the Stakeholders,
Bankers, Channel Partners, Govt. Department(s) and all other business
constituents.
Your Directors also acknowledge the efforts of its employee at all
levels for their hard work, dedication and commitment towards the
Company, which has enabled the Company to accomplish its objectives
accompanied by full customer satisfaction and enhanced stakeholders
value.
For and on behalf of the Board of Directors
Place: New Delhi Adesh Kumar Gupta
Date: Thursday, 12th August, 2010 Chairman of the Meeting
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