Your Directors have pleasure in presenting the 31 Annual Report of the Company togetherwith the Audited Financial Statements for the financial year ended 31 March 2017.
In addition to the Audited Financial Statements for the financial year ended 31 March2017 your Company has also presented its consolidated financial statements afterconsidering the Audited Annual results of its overseas wholly owned subsidiary LibertyFoot Fashion Middle East FZE in accordance with the requirements of the applicableAccounting Standards and provisions of the Listing Regulations with the Stock Exchanges.
Financial Highlights (Standalone and Consolidated):
The highlights of the financial statements (Stand Alone and Consolidated) are asunder:-
|Particulars ||Stand Alone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Gross Sales ||51890.76 ||47065.86 ||51890.76 ||47065.85 |
|Less: Excise Duty ||2299.92 ||1817.75 ||2299.92 ||1817.75 |
|Net Sales ||49590.84 ||45248.11 ||49590.84 ||45248.10 |
|Add: Other Income ||195.50 ||202.62 ||195.50 ||202.62 |
|Revenue from Operations and Other Income ||49786.34 ||45450.73 ||49786.34 ||45450.73 |
|Profit before Depreciation Finance Costs and Tax ||3998.54 ||4344.89 ||3983.66 ||4329.68 |
|Less: Finance Costs ||1581.52 ||1639.21 ||1581.52 ||1639.21 |
|Less: Depreciation & Amortisation ||1359.33 ||1349.79 ||1359.33 ||1349.79 |
|Profit Before Exceptional Items ||1057.69 ||1355.89 ||1042.81 ||1340.68 |
|Less: Exceptional Items ||42.00 ||117.69 ||42.00 ||117.68 |
|Profit Before Tax Expense ||1015.69 ||1238.21 ||1000.81 ||1223.00 |
|Less: Tax Expenses ||361.78 ||217.47 ||361.78 ||217.47 |
|Net Profit for the year (NP) ||653.91 ||1020.74 ||639.03 ||1005.53 |
Review of the operations of the Company:
During the financial year ended 31st March 2017 Liberty has recorded a turnover ofRs.51890.76 Lakhs an increase of 10% over corresponding previous year.
The Profit before Depreciation Interest and Tax stood at Rs.3998.54 Lakhs as comparedto Rs.4344.89 Lakhs during the corresponding previous year 2015-16. The Profit before Taxexpenses stood at Rs.1015.69 Lakh as compared to Rs.1238.21 Lakhs during thecorresponding previous year 2015-16. The Profit after Tax of your Company for the yearunder consideration has declined and remained at Rs.653.91 Lakhs as against Rs. 1020.74Lakhs during the corresponding previous year.
The Company's Profit margins during the year under consideration have adverselyeffected mainly due to increase in manufacturing expenses employees benefits expenses andhigher provisions for Taxations on account of cessation of Tax incentives availableearlier for two Tax free plants of the Company.
Domestic segment consisting of Company Owned and Company Operated exclusive franchisestores multi brand outlets and Institutional business achieved a turnover of Rs.47455.70in Financial year 2017 an increase of 9% over the corresponding previous year 2016. Atexport front where Liberty operates through its own brands and also through leadingprivate labels of Europe posted a turnover of Rs.4435.06 Lakhs a growth of over 23% overthe corresponding previous year 2016.
Your Directors are concerned with the Company's performance in terms of profitabilityand all determined to set up suitable corrective measures and to make use of abundantpotential available for the footwear industry. Your Company has envisaged that with theemergence of cashless economy in India as well as implementation of Goods & ServiceTax (GST) the organized retail where your Company operates will do much better in theyears to come which will in turn help the Company to strengthen its presence in thefootwear market.
Your Company on consolidation basis with its wholly owned subsidiary (WOS) CompanyLiberty Foot Fashion Middle East FZE Dubai recorded a turnover of Rs.51890.76 Lakhs andachieved a Consolidated Net profits of Rs.639.02 Lakhs. The WOS has not yet commenced itsoperations and incurred bare minimum administrative expenses only during the year as aresult of which while consolidating the financial statements of this subsidiary with theCompany the Consolidated profit has declined to the extent of those expenses.
The members are aware that your Company has franchise arrangements since 2003 with thetwo partnership firms namely Liberty Enterprises (LE) and Liberty Group Marketing Division(LGMD) in which few of the Directors are interested as partners and the Company alsokeeping in view the benefits available to its shareholders in the long run expressed itsintent to out rightly acquire the assets available to the Company under the franchisearrangements. Your Company is in discussion with the firms to conclude the term of theacquisition as early as possible subject to the mutual consent of the parties andcompliance of applicable statutory guidelines.
Your Company for the time being period has since renewed the franchise arrangementson the existing terms and conditions for another period of one year.
The members are informed that the Ministry of Corporate Affairs Government of Indiavide its Notification dated February 16 2015 has issued the Companies (Indian AccountingStandards) Rules 2015 which lays down a roadmap of Companies for implementation of IndianAccounting Standards (Ind AS). Every listed Company and their holding and subsidiaryCompanies (other than banking Companies insurance Companies and non-banking financialCompanies) are required to comply with Ind AS in preparation of their financial statementsfor accounting periods beginning on or after April 1 2017 with the comparatives for theperiods ending March 31 2016. The provisions of above Rules will be applicable on yourCompany w.e.f. April 1 2017 considering the Net worth of your Company as on March 312014 was less than Rs.500 Crores which is the criteria for applicability of Ind AS on theCompanies. Your Company will adopt the Ind AS for accounting periods beginning on or afterApril 1 2017 in preparation of its financial statements for the said periods. Furthersince the provisions of said Rules are not applicable on overseas subsidiaries thereforethe overseas wholly owned subsidiary of your Company M/s Liberty Foot Fashion Middle EastFZE in Dubai is not required to comply with Ind AS in preparation of their financialstatements.
During the year under review Care Analysis and Research Limited (CARE) a leadingrating agency has re-affirmed its Ratings CARE A -; (single A Minus) inrespect of Long Term banking facilities (comprising Term Loan and Working Capital fundbased facilities) and CARE A2 (+) (A Two Plus) in respect of ShortTerm banking facilities (comprising non fund based facilities) sanctioned by the Banks tothe Company. The outlook on the Long Term rating is stable.
Subsidiary Company their Performance & Consolidated financial statement:
Liberty Foot Fashion Middle East FZE (LFF) Dubai (Wholly Owned Overseas Subsidiary)
The Company has one Wholly Owned Overseas Subsidiary M/s Liberty Foot Fashion MiddleEast FZE (LFF) Dubai as on March 31 2017. There are no associate Companies or Jointventure Companies within the meaning of Section 2(6) of the Companies Act 2013. TheWholly Owned Subsidiary of the Company has not yet started its operation and has incurrednominal routine expenses during the year under consideration which has been accountedwhile consolidating its financial statements with the Company. Your Company till 31stMarch 2017 has invested a sum of Rs.302.42 Lakh (Previous Year Rs.302.42 Lakh) in LFF asits capital contribution. The financial results of LFF have been consolidated with theCompany in compliance with Accounting Standards-21 of the Accounting Standards issued bythe Institute of Chartered Accountants of India.
In accordance with Section 129 of the Companies Act 2013 consolidated financialstatements of the Company and its subsidiary Company is attached. The consolidatedfinancial statements have been prepared in accordance with the relevant accountingstandards as prescribed under section 129 of the Companies Act 2013.
The consolidated financial statements disclose the assets liabilities incomeexpenses and other details of the Company and its subsidiary.
Pursuant to provisions of first proviso of Section 129(3) of the Companies Act astatement containing salient features of the financial statements of the Company's whollyowned subsidiary are given in Annexure I in Form AOC-1 and the same forms part of thisreport.
Pursuant to the third proviso to Section 136 (1) of the Companies Act 2013 thefinancial Statements of the Company consolidated financial statements along with relevantdocuments and separate audited accounts in respect of wholly owned subsidiary areavailable on the website of the Company at www.libertyshoes.com. The annual accounts ofthe wholly owned subsidiary and the related information will be made available to anymember of the Company/its wholly owned subsidiary seeking such information and areavailable for inspection by any member of the Company/ its wholly owned subsidiary at theRegistered Office of the Company.
Your Directors considering the financial requirement to the Company have notrecommended any dividend for the financial year ended 31st March 2017.
Transfer to Reserves
Your Directors proposed to transfer Rs.300.00 Lakh (Previous Year Rs. 600.00 Lakh) tothe General Reserves out of the profits available with the Company for appropriations.Accordingly an amount of Rs.353.91 Lakh (Previous Year Rs.420.74 Lakh) has been proposedto be retained in the Profit & Loss Account of the Company.
Employees Stock Option Scheme(s)
During the year ended 31st March 2017 your Company has not floated any scheme inrelation to Employees Stock Option(s) and no such further plans have been initiated atpresent in this regard.
Nomination and Remuneration Policy
Your Board of Directors on the recommendation of the Nomination and RemunerationCommittee framed and adopted a policy for selection appointment and remuneration ofDirectors and Senior Management Personnel. The contents of the Policy and evaluationcriteria have been stated in the Corporate Governance Report. The above Nomination andRemuneration Policy is set out in Annexure-II of this Report. The Policy is also availableon the website of the Company i.e. www.libertyshoes.com.
Policy on Prevention of Insider Trading
Your Company has adopted a code of Conduct for Prevention of Insider Trading with aview to regulate trading in Equity Shares of the Company by the Promoters DirectorsEmployees designated persons and other connected persons. The said Code of Conduct isavailable on the website of the Company at www.libertyshoes.com. The Code requirespre-clearance for dealing in Company's shares and prohibits purchase or sale of shares inyour Company by the Promoters Directors Employees designated persons and otherconnected persons while they are in possession of unpublished price sensitive informationand also during the period when the Trading Window remains closed.
In order to encourage active participation of Independent Directors and in order tounderstand the business environment your Company has been familiarizing the IndependentDirectors on its Board with detailed presentations by its business functional heads on theCompany operations strategic business plans new products and technologies includingsignificant aspects of the Industry and its future outlook. Once appointed the NonExecutive & independent Directors undergo the familiarization program of the Company.The Non executive & independent Directors are also provided with financial resultsinternal audit findings and other specific documents as sought by them from time to time.They are also made aware of the various policies and code of conduct and business ethicsadopted by the Board. Details of familiarization programs extended to the Non Executive& Independent Directors during the year under consideration are disclosed on theCompany website at www.libertyshoes.com.
Risk Management Policy & Risk Management
The Management of the Company has always been consciously reviewing its businessoperations in accordance with set rules and procedure and if any deviation or risk isfound remedial and effective steps are being taken to minimize the deviation and risk. Inline with the provisions of Section 134 (3) (n) of the Companies Act 2013 the Companyhas developed a Risk Management Policy to build and establish the process and procedurefor Identifying assessing quantifying minimizing mitigating and managing theassociated risk at early stage. Policy is aimed to develop an approach to make assessmentand management of the risks in financial operational and project based areas in timelymanner. The main objectives of the Risk Management Policy is inter-alia to ensure thatall the current and future material risk exposures of the Company are identifiedassessed quantified appropriately mitigated minimized and managed to protect the brandvalue through strategic control and operational policies and to enable compliance withappropriate regulations wherever applicable through the adoption of best practices. TheBoard of Directors of the Company assesses several type of risks which include BusinessEnvironment Risks Strategic Business Risks and Operational Risks etc. The Board ofDirectors periodically reviews and evaluates the risk management system of the Company sothat the management controls the risks through properly defined networks. Head of theDepartments are responsible for implementation of the risk management system as may beapplicable to their respective areas of functioning and report to the Board and AuditCommittee. No risks threatening the existence of the organization have been identified.However there are other risks against which adequate mitigation plans are prepared.
The Risk Management policy is available on the Company's website of the Company athttp://investor.libertyshoes.com/doc/Risk_ Management_Policy.
Whistle Blower Policy (Vigil Mechanism)
As per the provisions of Section 177 (9) & (10) of the Companies Act 2013 readwith Regulation 22 of Listing Regulations your Company has an effective mechanism ofreporting illegal or unethical behavior. The Company has a Whistle Blower Policy (vigilmechanism) wherein the directors employees consultants and contractors are free toreport violations of laws rules and regulations or unethical conducts actual orsuspected fraud or violation of the Company's code of conduct or ethics policy to thenodal officer. The mechanism followed is appropriately communicated within the Companyacross all levels and has been posted on the Notice Board of the Company. Theconfidentiality of those reporting violations etc. is maintained and they are notsubjected to any discriminatory practice. The concern can be reported by sending an e-mailmessage at the dedicated address viz. email@example.com. Individuals canalso raise their concerns directly to the CEO or the Chairman of the Audit Committee ofthe Company. Any allegation falling within the scope of the concerns are identifiedinvestigated and dealt with appropriately. The Audit Committee periodically reviews thefunctioning of this mechanism. The Vigil mechanism established in the Company providesadequate safeguards against victimization of director(s) or employee(s) or any otherperson who avail the mechanism. During the year no personnel of the Company was deniedaccess to the Audit Committee. The details of establishment of Vigil mechanism/ WhistleBlower 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 theshareholders during the year under review.
The Company has not accepted/renewed any public deposits and as such no amount onaccount of principal or interest on deposits from public was outstanding as on date of thebalance sheet.
Board of Directors and Key Managerial Personnel:
Retirement by rotation of the Directors
Sh. Adesh Kumar Gupta & Sh. Shammi Bansal Directors of the Company will retire byrotation at the 31 Annual General Meeting in pursuance of the provisions of Section 152 ofthe Companies Act 2013 and being eligible have offered themselves for the re-appointmentat the 31 Annual General Meeting.
Appointment(s) and Cessation of office of Directors
(a) Appointment /Re-appointment of Directors
During the year under consideration there is no appointment/re appointment of anyDirector in the Company. Sh. Adesh Kumar Gupta and Sh. Shammi Bansal retires by rotationin ensuing Annual General Meeting and being eligible have offered themselves forre-appointment.
A brief profile along with necessary details of Directors seeking their re-appointmenthas been provided in Annexure-A of the
Annexure to the Notice of the 31 Annual General Meeting as required under theprovisions of Regulation 36 (3) of the Listing Regulations.
(b) Cessation/Resignation of Directors
There is no change in the Board of Directors of the Company during the year underconsideration.
Key Managerial Personnel
The following persons are the Key Managerial Personnel (KMPs) of the Company as per theprovisions of the Companies Act 2013
|Sh. Adesh Kumar Gupta ||- ||CEO & Executive Director |
|Sh. Shammi Bansal ||- ||Executive Director |
|Sh. Sunil Bansal ||- ||Executive Director |
|Sh. Adeesh Kumar Gupta ||- ||Executive Director |
|Sh. Ashok Kumar ||- ||Executive Director |
|Sh. Munish Kakra ||- ||CFO & Company Secretary |
Committees of the Board
The Company's Board has constituted the following Committees:
1. Audit Committee
2. Management Committee
3. Stakeholders Relationship Committee
4. Nomination and Remuneration Committee
5. Corporate Social Responsibility Committee
The detail of terms of reference of the Committees Committee composition meetingsheld during the year and attendance at the meetings of the Committees are provided in theCorporate Governance Report.
Number of meetings of the board
Five meetings of the board were held during the year. The detail of the compositionboard meetings held during the year and attendance at the meetings are provided inCorporate Governance Report. The maximum time gap between two meetings did not exceed 120days.
Annual Evaluation of Directors and Board as a whole
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard is required to monitor and review the Board evaluation framework. In line with theCorporate Governance Guidelines the Annual Performance Evaluation is conducted for allmembers as well as the working of the Board and its Committees. This evaluation is withspecific focus on the performance and effective functioning of the Board after seekinginputs from all the directors on the basis of the criteria such as the Board compositionand structure effectiveness of board processes information and functioning etc. Theevaluation process also considers the time spent by each of the Board Members corecompetencies personal characteristics accomplishment of specific responsibilities andexpertise. In addition the Chairman is also evaluated on the key aspects of his role. TheBoard evaluation is conducted through questionnaire having qualitative parameters andfeedback based on ratings. The performance of the committees was evaluated by the boardafter seeking inputs from the committee members on the basis of the criteria such as thecomposition of committees effectiveness of committee meetings etc.
The outcome of the Board evaluation for the financial year under consideration wasdiscussed by the Nomination and Remuneration Committee and Board at their meeting held on20 March 2017 excluding the director being evaluated.
In lines with the provisions of the Companies Act 2013 and Listing Regulationsseparate meeting of the Independent Directors of the Company was held on 20th March 2017in the absence of non-independent directors and members of management inter alia toevaluate the performance of the non-Independent Directors Board as a whole of theCompany its committees Chairman and to assess the quality quantity and timeliness offlow of information between the Company management and the Board.
Attributes Qualifications & Independence of Directors and their appointment
The criteria for determining qualifications positive attributes and independence ofDirectors in terms of the Act and the Rules there under both in respect of IndependentDirectors and other Directors as applicable has earlier been approved by the Nominationand Remuneration Committee during the financial year 2015-16. The Policy of the Companyalso provides that Non-Independent Independent Directors be drawn from amongst eminentprofessionals with experience in business/ finance/ law/ public administration &enterprises. The Board Diversity Policy of the Company requires the Board to have balanceof skills experience and diversity of perspectives appropriate to the Company. Directorsare appointed/re-appointed with the approval of the Members for a shorter period say twoto five years only. All Directors other than Independent Directors are liable to retireby rotation and are eligible for re-election in terms of the provisions of Articles ofAssociation. The Independent Directors of your Company have confirmed that they meet thecriteria of independence as prescribed under section 149 of the Companies Act 2013 andRegulation 16 of Listing Regulations.
The Nomination and Remuneration Policy as approved by the Board of Directors of theCompany has been attached to this report and also accessible on the website of the Companyat www.libertyshoes.com
Material changes and commitments affecting financial position between end of thefinancial year and date of report
As per the provisions of Section 134(3) (1) of the Companies Act 2013 no materialchanges or commitments affecting the financial position have occurred between the end offinancial year of the Company to which the financial statements relates to the date of thereport.
Change in the nature of Business if any
There was no change in the nature of business of the Company during the year underreview.
Internal financial control systems and their adequacy
Liberty's internal financial controls are adequate and operate effectively and ensureorderly and efficient conduct of its business including adherence to its policiessafeguard its assets prevent and detect frauds and errors maintain accuracy andcompleteness of its accounting records and further enable it in timely preparation ofreliable financial information. During the year such controls were tested and noreportable material weakness in the design or operation was observed.
The Company has in place a strong and independent Internal Audit Department which isresponsible for assessing and improving the effectiveness of internal financial controland governance. To maintain its objectivity and independence the Internal Audit functionreports to the Chairman of the Audit Committee.
Declaration by Independent Directors
The Company has received necessary declarations from each independent director underSection 149(7) of the Companies Act 2013 that she/he meets the criteria of independencelaid down in Section 149 (6) of the Companies Act 2013 and Regulation 16 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Directors' Responsibility statement
Pursuant to Section 134 (3) (c) of the Companies Act 2013 your Directors based onthe representations received from the management confirm that: i) in the preparation ofthe annual accounts the applicable accounting standards have been followed and there areno material departures from the same;
ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 andsuch internal financial controls are adequate and operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2016-17.
Audit Committee and their Recommendations/ Observations
Your Board has a duly constituted Audit Committee in terms of Section 177 of theCompanies Act 2013 read with the Rules framed there under and Regulation 18 of the SEBI(Listing Regulations and Disclosure Requirements) Regulations 2015. The term of referenceof the Audit Committee has been approved by the Board. The details pertaining tocomposition of Audit Committee no. of meetings held during the year under review briefterm of reference and other details have been included in the Corporate Governance Reportwhich forms part of this report. The recommendations/observations of the Audit Committeeplaced before the Board during the financial year ended 31st March 2017 in respect ofmatters pertaining to the financial management or any other matter related thereto wereconsidered and duly accepted by the Board of Directors of the Company.
Statutory Auditors and their Report
Under Section 139 of the Companies Act 2013 and Rules made thereunder it is mandatoryto rotate the statutory auditors on completion of the maximum term permitted under thesaid section. M/s Pardeep Tayal & Co. Chartered Accountants were appointed asStatutory Auditors of the Company at 28th Annual General Meeting of the Company held on29th September 2014 for conducting the audit of the accounts of the Company for threeconsecutive financial years and accordingly in terms of the provisions of said section ofCompanies Act 2013 the maximum term of their office will expire on the conclusion of 31stAnnual General Meeting of the Company. Your Board places on record its deep appreciationfor the valuable contributions of the Auditors during their long association since theinception of your Company and wishes them success in the future.
The Audit Committee and the Board of Directors of the Company in their respectivemeetings held on 25 May 2017 considering the profile background qualificationindependent relationship with the Company and experience has recommended and approved theappointment of M/s U. Shanker & Associates Chartered Accountants New Delhi (Firmregistration No. 014497N) as the Statutory Auditors of the Company in place of theretiring Auditors M/s Pardeep Tayal & Co. Chartered Accountants for a period of fiveconsecutive financial years from the conclusion of 31 Annual General Meeting of theCompany to be held on 24 August 2017 till the conclusion of 36 Annual General Meeting tobe held in the year 2022 subject to the approval of the members of the Company in theforthcoming Annual General Meeting and also ratification by the members in their everyAnnual General Meeting to be held after the forthcoming Annual General Meeting.
Your Company has received a certificate from M/s U. Shanker & Associates CharteredAccountants New Delhi (Firm registration No. 014497N) confirming their eligibility to beappointed as Auditors of the Company in terms of the provisions of Section 141 of theCompanies Act 2013 and Rules framed there under. They have also confirmed that they holda valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India (ICAI) as required under the provisions of Regulation 33 of theListing Regulations. The proposal of their appointment has been included in the Noticeconvening the 31 AGM for obtaining approval of the Members of the Company.
Your Company's Directors have examined the Statutory Auditors' Report issued by M/sPardeep Tayal & Co. Chartered Accountants on the Annual Accounts (Stand Alone andConsolidated) of the Company for the financial year ended 31st March 2017. There is noreservation qualification or adverse remark made by the Statutory Auditors in theirReport and their clarifications wherever necessary have been included in the Notes tothe Accounts section as mentioned elsewhere in this Annual Report. During the period underconsideration no incident of frauds was reported by the Statutory Auditors pursuant toSection 143(12) of the Companies Act 2013.
Secretarial Auditors and their Report
Your Directors have appointed M/s Sanjay Grover & Associates a Practicing CompanySecretaries in accordance with the provisions of Section 204 read with Section 179 of theCompanies Act 2013 and rule 8 of the Companies (Meetings of Board and its Powers) Rules2014 for the financial year 2016-17 for conducting the Audit of secretarial records of theCompany and issue their report.
The Secretarial Audit Report in respect of secretarial records of the Company for theFinancial Year ended March 31 2017 has been submitted by M/s Sanjay Grover &Associates and taken on record by the Board of Directors of the Company. The Report of theSecretarial Auditors in Form MR-3 for the financial Year ended 31st March 2017 isenclosed to this Report. The Board members have examined the above said report andobserved that there is no reservation qualification and adverse remark made by theSecretarial Auditors.
Internal Auditors and their Report
Your Directors have appointed M/s Rakesh Kanwar & Co. Chartered AccountantsKarnal Haryana in accordance with terms of the provisions of Section 138 read withSection 179 of the Companies Act 2013 and rule 8 of the Companies (Meetings of Board andits Powers) Rules 2014 and rule 13 of the Companies (Accounts) Rules 2014 for thefinancial year 2016-17 for conducting the Internal Audit of the books of accounts andreviewing and ensuring the Internal Control system of the Company and to issue theirreport.
The Internal Audit Report in respect of books of accounts and Internal Control systemof the Company for the Financial Year ended March 31 2017 has been submitted by M/sRakesh Kanwar & Co. Chartered Accountants Karnal Haryana which has been dulyconsidered and requisite actions were taken by Audit Committee and reports thereon werealso taken on record by the Board of Directors of the Company. The Board members haveexamined the above said report and observed that there is no reservation qualificationand adverse remark made by the Internal Auditors.
Your Board of Directors in their meeting held on 25th May 2017 considering thequalification long association with the Company and having required expertise andexperience in the area of Banking Accounting Taxations and Financial Management etc.has appointed Sh. Rajesh Gupta Chartered Accountant as Internal Auditors of the Companyfor conducting the Internal Audit Audit of the books of accounts and reviewing andensuring the Internal Control system of the Company for the financial year 2017-18 onwardsin place of M/s Rakesh Kanwar & Co. Chartered Accountants Karnal Haryana who wereInternal Auditors of the Company up to the financial year ended 31 March 2017.
Particulars of Loans Advances Guarantees and Investments
The Company has not granted any loan guarantee or made any investments during the yearended 31st March 2017 under Section 186 of the Companies Act 2013 and Rules made thereunder. Pursuant to Section 186 (4) read with Rule 11 of the Companies (Meetings of Boardand its Powers) Rules 2014 and Schedule V of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations) disclosure on particulars relating to Loans advances and investmentsare provided as part of the financial statements.
Significant and material orders
During the year under consideration there are no significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andCompany's operations in future.
Transactions with Related Parties
During the year 2016-17 all transactions entered by the Company with related partiesas defined under the Companies Act 2013 Rules made there under were in the OrdinaryCourse of Business and at Arm's Length basis. The Audit Committee granted omnibus approvalfor the transactions (which are repetitive in nature) and the same was reviewed by theAudit Committee and the Board of Directors on quarterly basis. During the year underconsideration all related party transactions non repetitive in nature for which noomnibus approval was granted were placed before the Audit Committee and Board ofDirectors for their approval. Your Company does not have a material unlisted subsidiary asdefined under Regulation 16 (1) (c) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Your Directors shall formulate a Policy to determineMaterial Unlisted Subsidiary as and when the relevant provisions for the same areapplicable on it in future.
There were no materially significant transactions with related parties during thefinancial year 2016-17 which were in conflict with interest of the Company. Your Companyduring the year did not have any related party transactions which required prior approvalof the Shareholders. However the Company has been undertaking transactions for last somany years in respect of payment of Royalty/ Franchise fees to few of the related partiesafter obtaining the prior approval of shareholders and Central Government under theprovisions of erstwhile Companies Act 1956. All the related party transactions have beendisclosed in the Notes to financial statements as required under AS-18 of the AccountingStandard.
In line with the provisions of the Companies Act 2013 and the Listing Regulations theBoard had approved and adopted policies on Related Party Transactions which has beenuploaded on the Company's website www.libertyshoes.com under the investor relationssection.
Particulars of Directors and Employees
The information required under Section 197(12) of the Companies Act 2013 read withrule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and subsequent amendments thereto is given in Annexure III and the same forms partof this report.
A statement containing the Information of top ten employees in terms of remunerationdrawn as provided under Section 197 (12) of the Companies Act 2013 read with rule 5 (2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andsubsequent amendments thereto is given in Annexure IV and the same forms part of thisreport. During the financial year 2016-17 no employee whether employed for whole or partof 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 ofManagerial Personnel) Rules 2014 and subsequent amendments thereto.
Extract of Annual Return
As provided under Section 92(3) of the Companies Act 2013 the extract of annualreturn is given in Annexure V in the prescribed Form MGT-9 which forms part of thisreport.
Corporate Social Responsibility (CSR)
Your Company has been involved in social initiatives for last three decades and engagedin various activities in the field of education primary healthcare communities ecologyand environment etc. It believes in long lasting impact towards creating a justequitable humane and sustainable society. In Liberty CSR initiatives were beingundertaken long before the provisions of the Companies Act 2013 and with theimplementation of new provisions of Section 135 of the Companies Act 2013 Liberty iscommitted to further strengthen its effort and activities by demonstrating care for thecommunity through its focus on education and development of skills health and wellnessincluding treatment for poor needy & uninsured people environment sustainabilityincluding promoting of green initiatives and Improvement of the living conditions ofinhabitants and support to disaster relief efforts etc. The various CSR initiativesundertaken by your Company during the year under consideration are as under:-
1. Promoting Education and Skill development
Liberty has identified schools and institutions around its Plant/Offices and madecontributions/sponsorships for providing education to children who can't afford it. It hassponsored quality education and healthcare providing of balanced nutrition to underprivileged children for their holistic development so that they can lead better life andcan contribute to the society as responsible citizens etc. In addition to this it hasprovided free of cost footwear to various school/institutions for distribution amongst thechildren/ students who can't afford it.
2. Promoting Preventive and other Health Care
Liberty has provided free of cost/ concessional medical aids and testing facilities tothe poor and needy people by making its suitable contribution to Hospital etc. at Karnal.
3. Rural Development
With due permission of State Government Liberty has adopted village/rural areas inKarnal for their development and uplifting the life of the villagers residing there byfulfilling the necessary and essential requirements of survival including providing ofworking conditions and opportunities for gainful employment of women skill developmentincluding undertaking all work related to improvement of society promotion of communaland societal harmony and brotherhood creation of awareness and addressing social evilspromotion and progress of agriculture and animal husbandry minimizing unemployment amongyouth of weaker section of society women empowerment etc.
4. Environmental sustainability
Liberty is ensuring environmental sustainability through tree plantation conservationof natural resources and maintaining of quality of soil air and water in the placesaround its Plants/ Offices.
5. Other CSR activities and initiatives:
Liberty has contributed for the promotion of religious activities by contributing totemples/Pooja/various registered Kalyankari Sabhas and societies and also contributed tothe Association incorporated with the objective of development of trade to which yourCompany belongs.
During the year under consideration the Company has complied with the provisions ofCompanies Act 2013 by making the required contribution on the activities as stated inSchedule VII of the Act. The Annual Report on Corporate Social Responsibility activitiesas required under Sections 134 and Section 135 of the Companies Act 2013 read with Rule 8of the Companies (Corporate Social Responsibility Policy) Rules 2014 and Rule 9 of theCompanies (Accounts) Rules 2014 is provided in Annexure VI of this report. The policy isalso available on the website of the Company at www.libertyshoes.com.
Disclosure under the Sexual harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in Liberty's premises through various interventions andpractices. The Company always endeavors to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
The Company has in place a robust policy on prevention of sexual harassment atworkplace. The policy aims at prevention of harassment of employees as well as contractorsand lays down the guidelines for identification reporting and prevention of sexualharassment. There is an Internal Complaints Committee which is responsible for redressalof complaints related to sexual harassment and follows the guidelines provided in thepolicy. The said Committee has its presence at corporate office as well as at plants.
During the year ended 31st March 2017 the Committee did not receive any complaintpertaining to sexual harassment.
Corporate Governance and Ethics
Your Company believes in adopting best practices of corporate governance. CorporateGovernance principles are enshrined in the spirit of Liberty which form the core valuesof Liberty. These guiding principles are also articulated through the Company's Code ofConduct Corporate Governance guidelines Charter of various Sub-Committees and disclosurepolicy.
As per regulation 34 of the Listing Regulations a separate section on corporategovernance practices followed by your Company together with a certificate from StatutoryAuditors M/s Pardeep Tayal & Co. Chartered Accountants on compliance with corporategovernance norms under the Listing Regulations is given at page no. 38 to page no. 57 ofthis Annual report.
Disclosure as per Regulation 34(3) read with schedule V of the SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 is as under:
Disclosure Requirement as per Regulation 34 (3) read with Schedule V of the Listing(Obligation and Disclosure Requirements) Regulations 2015
Parent Company: Liberty Shoes Ltd.
Subsidiary Company: Liberty Foot Fashion Middle East FZE
Associate Company: NONE
|Particulars ||Amount (Rs. Lakh) |
|Loans and Advances in the nature of Loans to ||NIL |
|Subsidiary || |
|Loans and Advances in the nature of Loans to firms/companies in which Directors are interested ||NIL |
|Investment by the Loanee in the shares of Parent Company & Subsidiary Company when the Parent/Subsidiary Company has made a loan or advance in the nature of loan ||NIL |
Management Discussion and Analysis Report
In terms of Regulation 34 of the Listing Regulations the Management Discussion andAnalysis report on your Company's performance industry trends and other material changeswith respect to your Company and its wholly owned subsidiary wherever applicable arepresented at page no. 59 to page no. 61 of this Annual report. The Management Disclosureand Analysis Report provides a consolidated prospective of economic social andenvironmental aspects material to our strategy and our ability to create and sustain valueto our key stakeholders.
Conservation of Energy and Technology Absorption and Foreign Exchange Earnings andoutgo:
Information in accordance with the provisions of Section 134 (1) (m) of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 in relation to conservation of Energyand Technology Absorption and Foreign Exchange Earnings and Outgo is given in theAnnexure VII which forms part of this report.
Outstanding Share Capital and its Listing:
Your Company has outstanding Share Capital of Rs.170400000/- (Previous YearRs.170400000/-) consisting of 17040000 (Previous Year 17040000) Equity Shares ofRs.10/- each and these Equity Shares are presently listed and available for trading atNational Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).
Acknowledgments and Appreciation:
Your Directors take this opportunity to place on record their sincere gratitude for theconsistent cooperation and support received from the shareholders Bankers ChannelPartners and the Government Authorities.
Your Directors also place on record their deep appreciation to the employees at alllevels for their hard work and dedication.
For and on behalf of the
Board of Directors
Adesh Kumar Gupta
Chairman of the Meeting
Place: Gurugram Haryana
Dated: Thursday 25 May 2017