Home  »  Company  »  Liberty Shoes Li  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Liberty Shoes Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the 29th Annual Report of the Company together with the Audited Annual Accounts for the financial year ended 31st March, 2015.

In addition to the Audited Annual Accounts for the financial year ended 31st March, 2015, 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:-

(Rs. In Lacs) Particulars 2014-15 2013-14

Gross Sales 54,646.16 50,060.20

Less: Excise Duty 2,257.15 1,711.33

Net Sales 52,389.01 48,348.87

Add: Other Income 228.30 75.93

Revenue from Operations and Other Income 52,617.31 48,424.79

Profit before Depreciation, Finance Costs and Tax 4,420.43 4,148.54

Less: Finance Costs 1,606.68 1,607.27

Less: Depreciation & Amortisation 1,242.38 1,106.57

Profit Before Exceptional Items 1,571.37 1,434.71

Less: Exceptional Items 71.34 19.72

Profit Before Tax Expense 1,500.03 1,414.99

Less: Tax Expenses (206.17) 75.54

Net Profit for the year 1,706.20 1,339.45

Proposed Dividend (Including Provision for Corporate Dividend Tax) 307.93 299.04

Review of the operations of the Company:

Your Company, during the year under consideration continuing with its focus on strengthening its front end operations, has achieved Gross Sales of Rs.5,46,46.16 Lacs as against of Rs.50060.20 Lacs in the previous year. Your Company for the year under consideration achieved a Net Profits of Rs.1706.20 Lacs which was 27% higher than the Net Profits of Rs.1339.45 Lacs earned in the previous corresponding year

The domestic sales have increased by over 9% whereas exports have grown by around 8% as compared to their performance in the corresponding previous year. Your Company, in its continuous efforts to better its position in the footwear market has further improved its merchandising range and quality which has resulted in over 9% growth in number of pairs sold by the Company during the year under consideration.

In terms of geographical presence, though North India still contributes a significant portion in Domestic Sales but Sales in South India, where Company has been focusing for last few years, has also witnessed a notable growth in the year under consideration. In future, besides strengthening these two zones, the Company has plans to increase its presence in other potential areas also.

The members are aware that Your Company had arrangements with M/s. Liberty Enterprises (LE) and Liberty Group Marketing Division (LGMD), the two partnership firms of the Group in which few of the directors and their relatives are interested, for the exclusive use of their manufacturing facilities and fixed assets, trademarks & distribution networks valid till March 31, 2015. The members were also informed earlier that considering the enduring benefits of unlocking the shareholders' value by acquiring the said tangible and intangible assets of these two firms, your Company had proposed the acquisition of the assets from the aforesaid firm(s).

In pursuance of the Company's earlier proposal, Your Company has executed a Memorandum of Understanding (MOU) with the above two Partnership firms on March 31, 2015 for acquisition of their respective business of footwear. In terms of the said MOU, the related transactions are to be completed, as per the mode/ structure to be recommended by the consultants, on or before March 31, 2016 but with retrospective effect from April 1, 2015 subject to the approval of the shareholders and the requisite statutory approvals required, if any Your Directors have also pleasure in informing that M/s CARE Ltd., the accredited rating agency has awarded A- (Pronounced as Single A(-) rating to the Company's credit facilities wherein the outlook of the rating has been stated as having adequate degree of safety regarding timely servicing of financial obligation. This has helped Company to avail favorable terms from its bankers for its various banking facilities.

Your Directors, have been mentioning that footwear has a tremendous potential in domestic as well as in the overseas markets because of its inherent strength. Your Directors would continue to strive its efforts to exploit this potential and with improvement in the present economic scenario and new strategies in place, your Directors foresee a better opportunity to increase its foot print and emerge as a stalwart in the growing footwear markets.

Awards and Recognition

Your Directors are pleased to inform that your Company has been awarded with various prestigious awards and recognitions during the year under consideration amongst those, Awards received from "Admired Brand of Asia", Admired Leader of Asia, CII Innovation Award and quality & excellence in IT operations are the prominent one besides receiving of recognitions by leading business and industrial magazines/news papers.

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, 2015 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 129 of the Companies Act, 2013.

The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiary

Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's wholly owned subsidiary are given in Annexure I in Form AOC-1 and the same forms part of this report.

Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of wholly owned subsidiary, are available on the website of the Company. 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 Rs.10/- each) for the financial year ended 31st March, 2015 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, 2015 will be Rs.307.93 Lacs as against Rs.299.04 Lacs 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 business hours of Tuesday, 22nd September, 2015. In respect of shares held in dematerialized form, the dividend shall be payable on the basis of beneficial ownership as at the end of business hours of Tuesday, 22nd September, 2015 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.138.94 Lacs (Previous Year Rs.440.41 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, 2015, 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.

Familiarization Program

In order to encourage active participation of Independent Directors and in order to understand the business environment, your Company has been familiarizing the Independent Directors on its Board with detailed presentations by its business functional heads on the Company operations, strategic business plans, new products and technologies, including significant aspects of the Industry and its future outlook. Once appointed, the Non Executive & Independent Directors undergo the familiarization program of the Company. The Non Executive & Independent Directors are also provided with financial results, internal audit findings and other specific documents as sought for from time to time. They are also made aware of the various policies and code of conduct and business ethics adopted by the Board. Details of familiarization program extended to the Non- executive & Independent Directors during the year are disclosed on the Company website viz. www.libertyshoes.com.

Nomination & Remuneration Policy

The Board of Directors of your Company has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for selection, appointment and remuneration of Directors & Senior Management Personnel. The contents of the policy and evaluation criteria are stated in the corporate Governance Report. The above Nomination and Remuneration Policy is set out in Annexure II of this Report. The Policy is also available on the website of the Company

i.e. www.libertyshoes.com.

Risk Management Policy & Risk Management

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. In line with the provisions of Section 134 (3) (n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has developed a Risk Management Policy to build and establish the process and procedure for Identifying, assessing, quantifying, minimized, mitigating and managing the associated risk at early stage. Policy is aimed to develop an approach to make assessment and management of the risks in financial, operational and project based areas in timely manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand value through strategic control and operational policies and to enable compliance with appropriate regulations wherever applicable, through the adoption of best practices. The Board of Directors of the Company assesses several types of risks which include Business Environment Risks, Strategic Business Risks, and Operational Risks etc. The Board of Directors periodically reviews and evaluates the risk management system of the Company so that the management controls the risks through properly defined networks. Head of the Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and Audit Committee. No risks threatening the existence of the organization have been identified. However, there are other risks against which adequate mitigation plans are prepared.

Whistle Blower Policy (Vigil Mechanism)

As per the provisions of Section 177 (9) & (10) of the Companies Act, 2013, Your Company has an effective mechanism of reporting illegal or unethical behaviour. The Company has a Whistle Blower Policy (vigil mechanism) wherein the directors, employees, consultants and contractors are free to report violations of laws, rules and regulations or unethical conducts, actual or suspected fraud or violation of the Company's code of conduct or ethics policy to the nodal officer. The confidentiality of those reporting violations etc. is maintained and they are not subjected to any discriminatory practice. The concern can be reported by sending an e-mail message at the dedicated address viz. ethicscounselllors@libertyshoes.com. Individuals can also raise their concerns directly to the CEO or the Chairman of the Audit Committee of the Company. The Ethics Committee comprises of four members including CEO & Executive Director, CFO & Company Secretary, Internal Auditor and a senior functional head. The committee is authorised by the Board of Directors of the Company for the purpose of receiving all complaints under the policy and in ensuring appropriate action. Any allegation that fall within the scope of the concerns identified are investigated and dealt with appropriately. The ethics counsellors periodically submit the report on complaints received, if any and the action taken to the Audit Committee. During the year under consideration, no Individual was denied access to the Audit Committee. The details of establishment of Vigil mechanism/ Whistle Blower Policy of the Company are available at the website of the Company viz. www.libertyshoes.com.

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 and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet.

Board of Directors and Key Managerial Personnel:

Retirement by rotation of the Directors

Sh. Shammi Bansal and Sh. Sunil Bansal, 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.

Re-appointement(s) of office of Directors

Sh. Adesh Kumar Gupta, CEO & Executive Director, Sh. Adarsh Gupta and Sh. Shammi Bansal, Executive Director(s), whose period of office has come to an end on 31st March, 2015. The Board of Directors, in their meeting held on 29th May, 2015, have approved their re- appointment for further period of 3 years w.e.f. 1st April, 2015, subject to the approval of the members.

A brief profile along with the necessary details of Directors seeking their 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).

Appointment(s) and Cessation of office of Directors

(a) Appointment of Smt. Lovelena Mody as Women Director

Smt. Lovelena Mody is a renowned Business personality and actively participates in State level CII activities. She is having a vast experience of hospitality sectors. Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013 and SEBI guidelines, the Board of Directors in their meeting held on 23rd January, 2015 appointed Smt. Lovelena Mody as Women Director. Smt. Mody was appointed as additional director in terms of the provisions of Section 161 of the Companies Act, 2013 to hold the office up to the date of this Annual General Meeting. Accordingly, her office is coming to an end on the date of forthcoming Annual General Meeting. Considering her profile, qualification, experience, independent relationship with the management of the Company and in compliance with the above provisions and the rules made there under and the requirements of the above provisions of the Companies Act, 2013 and SEBI guidelines, the Board of Directors in their meeting held on 29th May, 2015 proposed the appointment of Smt. Mody as Independent Director of the Company for a period of 3 (three) years w.e.f. 29th September, 2015 to 28th September, 2018, subject to the approval of the members.

(b) Appointment of Sh. Ashok Kumar as Executive Director

Sh. Ashok Kumar is a Law Graduate and has been advising the Company on various legal matters of the Company for last several years. Sh. Ashok Kumar was appointed as Additional Director of the Company w.e.f. 23rd January, 2015 to hold the office up to the date of this Annual General Meeting. Accordingly, his office is coming to an end on the date of forthcoming Annual General Meeting and the Board of Directors, considering his experience, qualification and valuable contribution in the Company, in their meeting held on 29th May, 2015 proposed his appointment as Director of the Company liable to retire by rotation and further as Executive Director for a period of 3 years w.e.f. 1st June, 2015 to 31st May, 2018, subject to the approval of the members.

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).

c) Cessation of office of Sh. Satish Kumar Goel, Director of the Company due to resignation

Sh. Satish Kumar Goel, Non-Executive Director of the Company due to his pre-occupation has resigned from the position of Directorship of the Company w.e.f. 29th May, 2015. The Board members acknowledged the valuable services rendered by Sh. Satish Kumar Goel during his tenure as Director of the Company and expressed its appreciation and gratitude for the same.

Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 (the Act) and were already in office before the commencement of the Act:-

Sh. Adesh Kumar Gupta - CEO & Executive Director

Sh. Adarsh Gupta - Executive Director

Sh. Shammi Bansal - Executive Director

Sh. Sunil Bansal - Executive Director

Sh. Adeesh Kumar Gupta - Executive Director

Sh. Munish Kakra - Company Secretary

After commencement of the Act, Sh. Munish Kakra was appointed as Chief Financial Officer (CFO) of the Company during the year under consideration.

Subject to the approval of the members, Sh. Ashok Kumar was appointed as Executive Director of the Company w.e.f. 1st June, 2015. None of the above KMPs has resigned during the year under consideration.

Number of meetings of the board

Six meetings of the board were held during the year. Details of the board meetings held during the year, has been given in Corporate Governance Report.

Annual Evaluation of Directors and Board as a whole

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

The performance evaluation as carried out by the Board of Directors, Nomination and Remuneration committee and Independent Directors at their respective meetings were based on Feed-back form received from Directors. Feed-back form carried a structured questionnaire prepared after taking in to consideration various aspects of the Board's functioning and submit their report accordingly.

The basis of the report submitted by the Board of Directors, Nomination and Remuneration committee and Independent Directors in regard to performance evaluation of Independent Directors, Board, Committee and other individual Directors evaluate its own performance and of its committees and of the Independent Directors as per the provisions of Section 134 (3) (p) and Clause VIII of schedule IV of the Companies Act, 2013. The said reports were discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

The Directors expressed their satisfaction with the entire performance of evaluation process.

Events Subsequent to the Date of Financial Statements

As per the provisions of Section 134 (3) (1) of the Companies Act, 2013, no material changes or commitments affecting the financial position have been occured between the end of financial year of the Company to which the financial statements relates to the date of the report.

Change in the nature of Business, if any There was no change in the nature of business of the Company during the year under review.

Internal financial control systems and their adequacy

Liberty's internal financial controls are adequate and operate effectively and ensure orderly and efficient conduct of its business including adherence to its policies, safeguard its assets, prevent and detect frauds and errors, maintain accuracy and completeness of its accounting records and further enable it in timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

The Company has in place a strong and independent Internal Audit Department which is responsible for assessing and improving the effectiveness of internal financial control and governance. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

Declaration by Independent Directors

The Company has received necessary declarations from each independent director under Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Directors' Responsibility statement

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, yours directors, to the best of their knowledge and their belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no 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 profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Audit Committee and their Recommendations/ Observations

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. The recommendations/observations of the Audit Committee placed before the Board during the financial year ended 31st March, 2015 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

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, M/s Pardeep Tayal & Co., Chartered Accountants, were appointed as the Statutory Auditors of the Company from the conclusion of the Twenty Eight (28th) Annual General Meeting held on 29th September, 2014 till the conclusion of the Thirty First (31st) Annual General Meeting of the Company to be held in the year 2017, subject to the ratification of their appointment by the Members of the Company in their every Annual General Meeting.

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.

Secretarial Auditors and their Report

Your Directors have appointed M/s Sanjay Grover & Associates, a Practicing Company Secretaries, in accordance with the provisions of Section 204 read with Section 179 of the Companies Act, 2013 and

rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 for the financial year 2014-15 for conducting the Audit of secretarial records of the Company and issue their report.

The Secretarial Audit Report in respect of secretarial records of the Company for the Financial Year ended March 31, 2015 has been submitted by M/s Sanjay Grover & Associates and taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark was made by the Secretarial Auditors except emphasis on unspent amount on CSR activities as required pursuant to section 135 of the Act and Composition of Board of Directors in terms of clause 49 of the Listing Agreement. The Board of Directors have given reason of unspent amount on CSR activities in the Section "Annul Return on CSR Activities" forming part of this report as Annexure V. As on date of this report, the Requirements of clause 49 of the Listing Agreement with regard to the Composition of Board of Directors have been complied with.

Internal Auditors and their Report

Your Directors have appointed M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants, in accordance with terms of the provisions of Section 138 read with Section 179 of the Companies Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014 and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2014-15 for conducting the Internal Audit of the books of accounts and Internal Control system of the Company and to issue their report.

The Internal Audit Report in respect of books of accounts and Internal Control system of the Company for the Financial Year ended March 31st, 2015 has been submitted by M/s Rakesh Kanwar & Co. Karnal, Haryana, Chartered Accountants which has been duly considered and requisite actions were taken by the Audit Committee and reports thereon also taken on record by the Board of Directors of the Company. The Board members have examined the above said report and observed that there is no reservation, qualification and adverse remark was made by the Internal Auditors.

Particulars of loans, guarantees and investments

As per the provisions of Section 186 (4) read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 Company has not granted any loan, Guarantee or made any investments during the year under review.

Significant and material regulatory orders

During the year under consideration, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Transactions with Related Parties

During the year 2014-15, all transactions entered by the Company with Related Parties as defined under the Companies Act, 2013, Rules made thereunder and revised clause 49 of the Listing Agreement with Stock Exchanges, were in the Ordinary Course of Business and at Arm's Length basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. During the year under consideration, the Audit Committee and Board of Directors granted their approval for other transactions not repetitive in nature with the related parties in terms of section 188 of the Companies Act, 2013 and rules made thereunder. Your Company does not have a material unlisted subsidiary. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Your Company did not have any related party transactions which required prior approval of the Shareholders. However, the Company has been doing transactions for last many years in respect of payment of Royalty/ Franchise fees to few of the related parties after obtaining the prior approval of shareholders and Central Government under the provisions of the Companies Act, 1956. All the related party transactions have been disclosed in the Notes to the financial statements as required under AS-18.

The Board had approved and adopted policies on Related Party Transactions which have been uploaded on the Company's website www.libertyshoes.com under the investors relations section. Particulars of Employees

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure III and the same forms part of this report.

During the financial year 2014-15, no employee, whether employed for whole or part of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Extract of Annual Return

As provided under Section 92(3) of the Companies Act, 2013, the extract of annual return is given in Annexure IV in the prescribed Form MGT-9, which forms part of this report.

Corporate Social Responsibility (CSR)

Liberty has always initiated the activities for the development of Society at large to help the needy and poor people like every year. The Company, as its social initiative, has focused on providing the medical facilities to the local community at Karnal, donations for development of roads and footpaths at Karnal, providing skill enhancement training to local people and promoting sports by sponsoring programmes at district level.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under consideration are set out in Annexure V of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is also available on the website of the Company.

Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Liberty's premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The said Committee has its presence at corporate office as well as at plants.

During the year ended 31st March, 2015, the Committee did not receive any complaint pertaining to sexual harassment.

Disclosure requirements

As per Clause 49 of the listing agreements entered into with the stock exchanges, Corporate Governance Report with Auditors' certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

Details of the familiarization program of the Independent Directors are available on the website of the Company (URL: www.libertyshoes.com/investors).

Policy on dealing with related party transactions is available on the website of the Company (URL: www.libertyshoes.com/investors).

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges (URL: www.libertyshoes.com/ investors).

Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 134 (1) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the "Annexure VI", which 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 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: New Delhi Dated: Friday, 29th May, 2015


Mar 31, 2014

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


Mar 31, 2013

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


Mar 31, 2012

The Directors have pleasure in presenting the 26th Annual Report of the Company together with the Audited Annual Accounts for the financial year ended 31s1 March, 2012.

In addition to Audited Annual Accounts for the financial year ended 31st March, 2012, your Company has also presented its consolidated financial statements after considering the Audited Annual 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 2011-12 2010-11

Gross Sales 34622.82 30530.02

Less: Excise Duty 1394.30 835.99

Net Sales 33228.52 29694.03

Add: Other Income 103.84 125.43

Revenue from Operations and Other Income 33332.36 29819.46

Profit before Depreciation, Finance Costs and Tax 2958.25 2516.29

Less: Finance Costs 1172.60 820.89

Less: Depreciation & Amortisation 738.91 680.94

Profit Before Exceptional Items 1046.74 1014.45

Less: Exceptional Items 323.83 6.65

Profit Before Tax Expense 722.92 1007.80

Less: Tax Expenses (39.72) (0.48)

Net Profit for the year 762.64 1008.27

Add: Opening Balance 4167.27 3759.00

Profit Available for Appropriation(s) 4929.91 4767.27

Less: Transfer to General Reserve 600.00 600.00

Surplus carried to Balance Sheet 4329.91 4167.27

Review of the operations of the Company:

Your Company, during the year under review, achieved Gross Sales of Rs.34,622.82 Lacs (Previous year Rs. 30530.02 Lacs) and Net Sales of Rs.33228.52 Lacs (Previous year Rs.29694.03 Lacs) by registering a growth of 13.41% & 11.90% respectively as compared to the previous year. The operating margins of the Company during the year under consideration have improved but the net profit margins are affected due to high interest costs. The net profits are further reduced due to booking of exceptional items on account of payment made to the bank against the corporate Guarantee extended for securing credit facilities to its erstwhile Joint Venture Company.

Your Company, as informed earlier has implemented unique process for getting overall improvement in its operation through expanding its well planned range, reach and strengthening of its replenishment model. Your directors feel that this process would take some more time to fully deliver its expected results.

Your Directors believe that sustained investments in brand would support its business in creating the long term value. Accordingly during the year, your Company has spent out substantially towards celebrity endorsement, leading fashion contests and other promotional means to ensure further enhancement of its brand value.

Your Company, during the year under review, registered consolidated turnover of Rs.37033.59 Lacs as compared to Rs.31826.23 Lacs in the previous year. The net profits on consolidated basis are Rs.438.40 Lacs as compared to Rs.618.31 Lacs in the previous year.

Your directors are closely working and taking appropriate steps for the improvement in the Company including optimum utilisation of assets. Your directors, before the date of signing of the balance sheet, have decided to dispose off some of the idle land & building to improve liquidity in the Company's operations.

Corporate Social Responsibility:

Working towards social responsibilities has always been integral to Your Company's way of performing its business. Few of the corporate social responsibility undertaken by Liberty during the year 2012 are

Support importance to the health and well being and development of all its employees and their families.

- Awarding of scholarship awards to the meritorious students of its labour force and the other students living with them in the neighboring community.

Necessary contribution towards maintenance of roads near to its plants and places of worships and charitable institutions.

- Sponsorship of sports and other cultural events.

- Providing of greenery through plantation of trees at its plants and also focusing on its efforts to reduce fuel consumption wherever possible.

- Free distribution of shoes to the poor and needy children. Subsidiary Companies:

Liberty Retail Revolutions Ltd (LRRL), Retail Venture

During the year under consideration, LRRL has achieved turnover of Rs.5786.81 Lacs (Previous year Rs.4799.73 Lacs) by registering a growth of around 20% as against the previous year. The overall working of LRRL has improved but in view of its conscious decision, has not undertaken aggressive expansion program and augmented its retail reach with limited number of stores.

Presently the retail industry is in process of consolidation because of changing environment and increasing competition. This industry has always been treated as capital intensive with low margin and potential of huge volumes. In order to fully exploit the opportunities in retail and to provide requisite speed with the financial leverage of the parent Company, your Directors have decided to amalgamate LRRL with the Company and has approved in principle proposal of the said amalgamation.

As of now, your Company holds 99,96,150 Equity Shares constituting 93.86% 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. During the year under consideration your Company has also extended loan amounting to Rs.950 Lacs (Previous Year Rs.Nil) to LRRL for meeting out their business requirements. Liberty Foot Fashion Middle East FZE (LFF), Dubai (Wholly Owned Subsidiary)

Your Company till 31st March, 2012 has invested a sum of Rs.302.42 Lacs (Previous Year Rs.294.67 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 11"1 May, 2012 for not attaching a copy of the Balance Sheet, Profit & Loss Account, Reports of Directors and Auditors of the Subsidiary Companies with the Annual Audited 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, Profit & Loss Account, 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 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, 2012 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(s) 21 and 27 as issued by Institute of Chartered Accountants of India and Clause 32 of 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 31st March, 2012.

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.162.64 Lacs (Previous Year Rs.408.27Lacs) 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, 2012, 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 laid down and implemented the proper procedure of assessment of risk and minimization thereof. The Management of the Company has reviewed periodically the operations involving the business risk and wherever required, they have taken effective and suitable steps to minimize the same.

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:

Appointment of Sh. Ramesh Chandra Palhan as Director

Sh. Ramesh Chandra Palhan was appointed as an Additional Director of the Company w.e.f. 28th March, 2012. Sh. Palhan was further proposed by a Member of the Company to be appointed as Director of the Company in terms of provisions of Section 257 of the Companies Act, 1956. The Board, considering his past experience and in the interest of the Company and subject to approval of the members in the forthcoming Annual General Meeting of the Company, proposed Sh. Palhan to be appointed as Director of the Company.

Appointment of Sh. Pushpinder Singh Grewal as Director

Sh. Pushpinder Singh Grewal was appointed as an Additional Director of the Company by the Board at their meeting held on 28th August, 2012. Sh. Grewal was further proposed by a Member of the Company to be appointed as Director of the Company in terms of provisions of Section 257 of the Companies Act, 1956. The Board, subject to approval of the members in the forthcoming Annual General Meeting of the Company, proposed Sh. Grewal to be appointed as Director of the Company in the forthcoming Annual General Meeting.

The aforesaid appointments of Sh. Ramesh Chandra Palhan and Sh. Pushpinder Singh Grewal are being proposed by separate Resolution(s) which form part of the Notice of the ensuing Annual General Meeting.

Resignation of Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya, Independent Directors

Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya, Independent Directors of the Company stepped down from the office of directorship w.e.f 31s1 August, 2011 and 22nd February, 2012 respectively due to their pre-occupation. The Board acknowledges and places on record its sincere appreciation for the contributions made by Sh. Siddharth Sanghi and Sh. Surendra Kumar Arya during their tenure as Independent Directors of the Company.

Retirement by rotation

Sh. Satish Kumar Goel, Sh. Raghubar Dayal and Sh. Prem Chand Garg, 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 along with the necessary details including memorandum of interest of Directors seeking their appointment/re-appointment thereof has been provided Annexure - A of Annexure to the Notice of the Annual General Meeting as 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.

Increase in salary of Sh. Satish Kumar Goel, "Director (Law & Taxation)"

Sh. Satish Kumar Goel was re-appointed as "Director (Law & Taxation)" w.e.f 1s1 April, 2011 for a period of 2 years in the 25th Annual General Meeting held on 28th September, 2011 at a monthly salary of Rs.75,000/- per month with perquisites as per the rules of the Company. Your Directors, considering his expertise and requirement of the Company, has entrusted him with certain additional responsibilities and approved an increase in the salary of Sh. Goel from Rs.75,000/- per month to Rs.1,50,000/- per month, w.e.f. 1st October, 2012 subject to approval of the Members of the Company in the forthcoming Annual General Meeting. The salary payable to Sh. Goel has also been approved by the Remuneration Committee at their Meeting held on 28th August, 2012.

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 31s1 March 2012, 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 31s1 March, 2012 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:

Pursuant to the directives issued by the Central Government and provisions of Section 233B of the Companies Act, 1956, the Company's cost records for the financial year ended March 31, 2012 are being audited by Cost Auditors, M/s K. L. Jaisingh & Co., Cost Accountants who were appointed by the Board after seeking the approval of the Central Government.

The Cost Audit Report for the preceding Financial Year ended March 31, 2011 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. Further, the Cost Audit Report for the financial year ended on March 31, 2012 shall be filed on or before the due date as per the said 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 thereunder.

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 Exchange, a Management Discussion and Analysis Report, clearly stating the required matters in respect of the trends and 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 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 wish to place on record its appreciation for the cooperation and support received from the Bankers, Channel Partners and Government Authorities.

Your Directors also place on record their deep appreciation to the employees at all levels for their hard work and dedications.

For and on behalf of the Board of Directors

Place: Libertypuram, Karnal Adesh Kumar Gupta

Dated: Tuesday, 28th August, 2012 Chairman of the Meeting


Mar 31, 2010

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

 
Subscribe now to get personal finance updates in your inbox!