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Liberty Shoes Ltd.

BSE: 526596 Sector: Others
NSE: LIBERTSHOE ISIN Code: INE557B01019
BSE 00:00 | 03 Apr 101.00 -7.05
(-6.52%)
OPEN

107.40

HIGH

111.00

LOW

99.45

NSE 00:00 | 03 Apr 100.55 -7.55
(-6.98%)
OPEN

107.60

HIGH

108.80

LOW

99.50

OPEN 107.40
PREVIOUS CLOSE 108.05
VOLUME 10501
52-Week high 163.00
52-Week low 64.05
P/E 24.69
Mkt Cap.(Rs cr) 172
Buy Price 99.35
Buy Qty 2.00
Sell Price 102.50
Sell Qty 100.00
OPEN 107.40
CLOSE 108.05
VOLUME 10501
52-Week high 163.00
52-Week low 64.05
P/E 24.69
Mkt Cap.(Rs cr) 172
Buy Price 99.35
Buy Qty 2.00
Sell Price 102.50
Sell Qty 100.00

Liberty Shoes Ltd. (LIBERTSHOE) - Auditors Report

Company auditors report

To

The Members of Liberty Shoes Ltd.

Report on the Audit of the Financial Statements

We have audited the accompanying financial statements of Liberty Shoes Limited(“the Company”) which comprises the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) and the Statement ofCash Flows for the year then ended and a summary of significant accounting policies andother explanatory information (hereinafter referred to as “financialstatements”.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (“the Act”) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(“Ind AS”) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis of Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Addressing the Key Audit Matters
(I) Trade Receivables Outstanding for more than 180 days Principal Audit Procedures followed:
Our audit procedures based on which we arrived at the conclusion regarding reasonableness of trade receivables outstanding for more than 180 days:
• Obtained the detail of parties having outstanding for more than 180 days
• Evaluated the facts terms & conditions status of legal proceedings wherever initiated and management's rationale for the recoverability of the outstanding dues;
• Meeting with the management.
(ii) Recoverability of Input Tax Credit receivables & MAT Recoverable under the account head ‘Loans & Advances recoverable in cash or kind or for the value to be received' Note No. 4 & 9 Principal Audit Procedures followed:
As at March 31 2019 Long Term Advances (Note No. 4) and Short Term Advances (Note No. 9) consist of MAT Credit Entitlement for Rs 188.21 Lakhs and Balance with Excise and other Statutory Authorities amounting Rs 1573.77 Lakhs including unutilized amount of Input Tax Credit of GST of Rs 1486.37 Lakhs. We reviewed the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution.
(iii) Contingent Liabilities relating to VAT Service Tax EPCG Labour and TDS (Note 38 [(III) to (VII)] Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the related Contingent Liabilities include the following:
There are certain pending matters relating to VAT for the financial year 2005-06 2006-07 2007-08 & 2008-09 on account of classification of goods at different rate of tax service tax on GTA services for the period from January 2005 to March 2007 pending compliances relating to EPCG licenses few labour matters pertaining to earlier years and demand on a/c of non-deduction of tax at source. • Obtained the status of the cases from the related department and their view on the matter;
These are pending before various judicial forums and consequential and possible impact thereof and provisions/ disclosure required have been based on the management's assessment of the probability of the occurrence of the liability. • Evaluated the facts and terms and conditions and management's rationale for the adequacy of the provision so far made and the amount remaining unprovided against the demands made against the Company;
• Meeting with management and reading/ reviewing the correspondences Memos and Notes on related matters.
• Reliance has been placed on the legal views and decisions on similar matters and probability of the liability arising therefrom pending final judgement/ decisions;
• Reviewed the appropriateness and adequacy of the disclosure by the management as required in terms of the requirement of IND AS 37 “Provisions Contingent Liabilities and Contingent Assets”.

Information Other than the Financial Statements and

Auditor's Report Thereon.

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation andpresentation of these Ind-AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income changes inequity and cash flows of the Company in accordance with the Indian Accounting Standards(Ind AS) prescribed under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by section 143 (3) of the Act based on our audit we report to theextent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account;

d) In our opinion the aforesaid Ind-AS financial statements comply with the AccountingStandards specified under section 133 of the Act.

e) On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms section 164 (2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in “Annexure A”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 (“the Order”)issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the “Annexure B” a statement on the matters specified inparagraphs 3 and 4 of the Order.

For U. Shanker & Associates.
Firm Registration No. 014497N
Chartered Accountants
Uma Shanker Gupta
Partner
Membership No. 089919
Place: New Delhi
Dated: Friday 24 May 2019

Annexure - A to Independent Auditors' Report

(Referred to in paragraph 1(f) under the heading “Report on other legal andregulatory requirements” of our report of even date on the Financial Statements ofLiberty Shoes Ltd.)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub Section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of LibertyShoes Limited (“the Company”) as of March 31 2019 in conjunction with our auditof the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the “Guidance Note”) and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of InternalFinancial Controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For U. Shanker & Associates.
Firm Registration No. 014497N
Chartered Accountants
Uma Shanker Gupta
Partner
Membership No. 089919
Place: New Delhi
Dated: Friday 24 May 2019

(Referred to in paragraph 2 under the heading of 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

Reg.: Liberty Shoes Limited (the Company)

1) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) All fixed assets have not been physically verified by the management during the yearbut there exists a regular programme of verification of fixed assets which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.No material discrepancies were noticed on such verification.

c) According to the information and explanation given by the management the titledeeds of the immovable properties included in the property plant and equipment/fixedassets are held in the name of the Company.

2) The management has conducted the physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

3) According to information and explanations given to us the Company has not grantedany loans secured or unsecured to Companies firms Limited Liability partnerships orother parties covered in the Register maintained under section 189 of the Act.Accordingly the provisions of clause 3 (iii) (a) to (c) of the Order are not applicableto the Company and hence not commented upon.

4) In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

5) The Company has not accepted any deposits from the public.

6) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of Cost Records under sub-section (1) of Section 148 of theCompanies Act 2013 for the products of the Company.

7) According to the information and explanations given to us in respect of statutorydues:

a) The Company is regular in depositing the undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Goods & Service Tax Duty ofCustoms Cess and other material statutory dues applicable to it with appropriateauthorities.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods & Service Tax Duty of Customs Cess and othermaterial statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

c) According to the records of the Company the dues outstanding of Income Tax Goods& Service Tax Sales Tax Service Tax Duty of Customs Duty of Excise Value AddedTax and Cess on account of any dispute are as follows:

Nature of Statute Nature of dues Amount (in Rs) Period to which the amount relates Forum where the dispute is pending
Service Tax Act 1994 Service Tax on GTA Services 233486 January 2005 to March 2007 Customs Excise and Service Tax Appellate Tribunal Chandigarh
Service Tax Act 1994 Service Tax on GTA Services 295112 April 2005 to March 2007 Customs Excise and Service Tax Appellate Tribunal Chandigarh
Punjab Value Added Tax 2005 Value Added Tax on account of classification of goods at different rate of tax 1913016 Financial Year 2006-07 Deputy Commissioner (Appeals)
Punjab Value Added Tax 2005 Value Added Tax on account of classification of goods at different rate of tax 2230998 Financial Year 2007-08 Deputy Commissioner (Appeals)
Income Tax Non/shot-deduction of Tax at source 10624897 Financial Year 2016-17 Commissioner (Appeals)

8) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.

9) According to the information and explanations given by the management the Companyduring the year has not raised any money by way of initial public offer/ further publicoffer/ debt instruments except by way of term Loans from the bank and the same wereapplied for the purposes for which it was raised.

10) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven to us by the management we report that no material fraud by the Company or on theCompany by its officers and employees has been noticed or reported during the year.

11) According to the information and explanations given by the management themanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act.

12) In our opinion the Company is not a Nidhi Company.

Therefore the provisions of clause 3 (xii) of the Order are not applicable to theCompany. 13) In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 wherever applicable and the details havebeen disclosed in the notes to the Financial Statements as required by the applicableaccounting standards.

14) According to information and explanations given to us and on an overall examinationof the balance sheet the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewand hence reporting requirements under clause 3 (xiv) of the Order are not applicable tothe Company and not commented upon.

15) According to the information and explanations given by

the management the Company has not entered into any non cash transactions withdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

16) According to the information and explanations given to us the Company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934 andaccordingly the provisions of clause 3 (xvi) of the Order are not applicable to theCompany.

For U. Shanker & Associates.
Firm Registration No. 014497N
Chartered Accountants
Uma Shanker Gupta
Partner
Membership No. 089919
Place: New Delhi
Dated: Friday 24 May 2019