Your Directors are presenting the 35th Annual Report of the Company together with theAudited Financial Statements for the financial year ended 31 st March 2021.
The financial results under consideration have to be seen in the context of outburst ofpandemic and its severe aftermath prevailed almost throughout the year under consideraion.
The highlights of the financial statements are as under:-
(Rs. In Lakh)
|Particulars ||2020-21 ||2019-20 |
|Gross Sales ||45596.75 ||64954.16 |
|Add: Other Income ||252.80 ||296.28 |
|Revenue from Operations and Other Income ||45849.55 ||65250.44 |
|Profit before Tax Expense (PBT) ||236.19 ||1726.84 |
|Less: Tax Expenses ||211.06 ||667.93 |
|Net Profit for the year (NP) ||25.13 ||1058.90 |
|Other Comprehensive Income/(Loss) ||(1.42) ||40.83 |
|Total Comprehensive Income ||23.71 ||1099.73 |
Review of the operations of the Company:
Your Company has prepared the Financial Statements for the financial year ended March31 2021 under Sections 129 133 and Schedule III of the Companies Act 2013 read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.
During the financial year ended 31st March 2021 Liberty has recorded a turnover of'45596.75 Lakhs as against turnover of previous year's '64954.16 Lakh a constraineddecline of 30% over corresponding previous year 2020 mainly because of inevitabledisruption arisen due to outbreak of COVID-19 in early part of the financial year 2020-21and its impact continued throughout the year under consideration. The PBDIT stood at'5172.27 Lakh during the year 2020-21 as compared to '6064.56 Lakhs during thecorresponding previous year 201920. The Profit before Tax expenses stood at '236.19 Lakhincluding exceptional expenses of '53.31 Lakh as compared to '1726.84 Lakhs includingExceptional Income of '442.91 Lakh during the corresponding previous year 2019-20. TheProfit after Tax of your Company along with other Comprehensive Income (net of taxes) forthe year under consideration has remained at meager '23.71 Lakhs as against '1099.73Lakhs during the corresponding previous year.
During the year under consideration because of catastrophe major part of the year wasunder lock down including educational institutions shopping malls high streets and otherretail markets etc which has disordered not only Company's business but the entire globaleconomies. The retail and distribution segments the two main strengths of the Companywere stagnated during these period and your company lost the advantage of its peakcustomers demand normally engendered during school season festive season and weddingseason as footwear being non essential items was slipped further low in consumerspreferences. Because of this uncalled-for situation the operations of Company's businessincluding its channel partners got adversely disrupted resulting to pungent relations evento the extent of instances of bankruptcy closure legal disputes. Your Company besidesloser of the perspective business obligated to the statutory guidelines including itspolicy with regard to provisioning and writing off the bad debts has written off debts of'1225 Lakh (Previous year '466.04 Lakh) in addition to making provisions for bad anddoubtful debts for '200.89 Lakh (Previous year '106.16 Lakh). Your Company iscontemplating to reinforce its retail channel with suitable changes in its sales policiesincluding stringent financial screening of the channel partners. Your Company'sinstitutional and on lines sales segments have registered exceptional performance and madesignificant contribution to the overall operations of the company during the year underconsideration.
Your Directors apprehensive of the situation more particularly because of 2nd wave ofCovid-19 has drawn conservative business plan focusing on cost curtailment and furtherimproving of its efficiencies on all fronts. Your Company would continue to expand itsreach by focusing on digitalization Online availability of its footwear through its ownwebsite and also through major E-Com Partner like Amazon Flipkart Myntra etc.
During the year under review CARE Ratings Limited a leading rating agency hasre-affirmed its Ratings CARE "A" (-); (single A Minus) in respect of Long Termbanking facilities (comprising Term Loan and Working Capital fund based facilities) andCARE "A2" (+) ("A" Two Plus) in respect of Short Term bankingfacilities (comprising non fund based facilities) sanctioned by the Banks to the Company.The outlook on the Long Term rating during the lock down period has been assignednegative due to Company's liquidity position to remain stretched amid loss of income andcash flows due to lockdown.
Subsidiary Company their Performance & Consolidated financial statement:
Liberty Foot Fashion Middle East FZE (LFF) Dubai (Erstwhile Wholly Owned OverseasSubsidiary)
The Company has discontinued its Wholly Owned Subsidiary (WOS) at Middle East and itsassets are pending for liquidation due to which no financial statements have been preparedof this WOS. Therefore the same has not been attached and a statement containing salientfeatures of the financial statements of the Company's wholly owned subsidiary has not beenprovided as required under Section 129 of the Companies Act 2013.
Your Directors considering the financial requirement to the Company have notrecommended any dividend for the financial year ended 31st March 2021.
Transfer to Reserves
Your Directors proposed to transfer Rs. NIL (Previous Year '300.00 Lakh) to the GeneralReserves out of the profits available with the Company for appropriations. Accordingly anamount of 23.71 Lakh (Previous Year '799.73 Lakh) has been proposed to be retained in theProfit & Loss Account of the Company.
Employees Stock Option Scheme(s)
During the year ended 31st March 2021 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 identifying and recommending the selection andappointment of Directors and KMPs of the Company and remuneration to Directors KMPs andother employees. The contents of the Policy and evaluation criteria have been stated inthe Corporate Governance Report. The revised Nomination and Remuneration Policy is set outin Annexure-I of this Report. The Policy is also available on the website of the Companyi.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 Companyathttp://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 can also raise their concerns directlyto the CEO or the Chairman of the Audit Committee of the Company. Any allegation fallingwithin the scope of the concerns are identified investigated and dealt withappropriately. The Audit Committee periodically reviews the functioning of this mechanism.The Vigil mechanism established in the Company provides adequate safeguards againstvictimization of director(s) or employee(s) or any other person who avail the mechanism.During the year no personnel of the Company was denied access to the Audit Committee. Thedetails of establishment of Vigil mechanism/ Whistle Blower Policy of the Company areavailable at the website of the Company viz. www.libertyshoes.com.
Non-applicability of Maintenance of Cost Records:
The Central Government has not prescribed the maintenance of cost records under Section148(1) of the Companies Act 2013 and Rules made there under with respect to the Company'snature of business.
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. Ashok Kumar Directors of the Company will be retiringby rotation at the 35th Annual General Meeting in pursuance of the provisions of Section152 of the Companies Act 2013 and being eligible have offered themselves for there-appointment at the 35th Annual General Meeting.
Appointment(s) and Cessation of office of Directors Appointment(s)/Re-appointment(s):
(I) The members at the 34th Annual General Meeting held on 30th September 2020 have:
(a) Appointed Sh. Arvind Bali Kumar as Independent Director of the Company for a firstterm of five consecutive years commencing from 12th November 2019 to 11th November 2024.
(II) On the basis of recommendation of Nomination and Remuneration Committee the Boardof Directors of the Company in their meeting held on 12th February 2021 have re-appointedSh. Adesh Kumar Gupta as CEO & Executive Director and Sh. Shammi Bansal Sh. SunilBansal Sh. Adish Kumar Gupta and Sh. Ashok Kumar as Executive Directors for a furtherperiod of 3 years w.e.f. 1 st April 2021 subject to the approval of members of theCompany at the ensuing Annual General Meeting. Further on the basis of recommendation ofNomination and Remuneration Committee the Board of Directors in their meeting held on11th August 2021 have proposed the appointment of Sh. Sanjay Bhatia Dr. Sujata and Smt.Nidhi Lal as Independent Directors of the Company for a first term of 3 years w.e.f. 29thSeptember 2021 to 28th September 2024. Accordingly their candidature(s) are beingproposed in ensuing Annual General Meeting for appointment as Independent Directors of theCompany as above.
Brief profile of above Directors nature of their expertise in specific functionalareas and names of Companies in which they hold directorships/chairmanships of Boardcommittees shareholding and relationships between directors inter se as stipulated underCompanies Act 2013 Listing Regulations and Secretarial Standards is provided in theAnnexure A to the Notice.
Cessation of office of Director:
The second tenure of Sh. Raghubar Dayal Sh. Ramesh Chandra Palhan and Smt. LovelenaMody would be completed on 28th September 2021 and in terms of the provisions of Section149 and Listing Regulations their tenure cannot be exceeded after 28th September 2021.The Board and Management of the Company in its meeting held on 11th August 2021 hasplaced on record appreciation for the contribution made by the above Directors duringtheir respective tenure(s).
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. Adish 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. Considering the severity of the situation the Ministry ofCorporate Affairs vide its General Circular No. 11/ 2020 dated March 24 2020 and SEBIvide circular No. SEBI/HO/CFD/CMDl/CIR/P/2020/38 dated March 19 2020 and Vide CircularNo. SEBI/HO/CFD/CMDl/CIR/P/2020/110 dated June 26 2020 had relaxed the requirement ofthe maximum stipulated time gap of 120 days between two meetings of the Board and AuditCommittees of listed entities as is required under Section 173 of the Companies Act 2013and Regulation 17(2) and 18(2) (a) of SEBI LODR Regulations 2015.
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 respectivemeetings held on 12th February 2021 excluding the director being evaluated.
During the year under review the Company has complied with all the criteria ofEvaluation as evisaged in the SEBI Circular on "Guidance Note on BoardEvaluation". Based on the Performance Evaluation process and on the recommendation ofthe Nomination and Remuneration Committee your Board of Directors have considered andapproved the re-appointment of Sh. Adesh Kumar Gupta as CEO & Executive Director andSh. Shammi Bansal Sh. Sunil Bansal Sh. Adish Kumar Gupta and Sh. Ashok Kumar asExecutive Directors subject to the approval of Shareholders by way of Special Resolutionrespectively.
In lines with the provisions of the Companies Act 2013 and Listing Regulationsseparate meeting of the Independent Directors of the Company was held on 12th February2021 in the absence of non-independent directors and members of management inter alia toevaluate the performance of the nonIndependent Directors Board as a whole of the Companyits committees Chairman and to assess the quality quantity and timeliness of flow ofinformation 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 (amended from time to time).The Policy of the Company also provides that Non-Executive Independent Directors be drawnfrom amongst eminent professionals with experience in business/finance/law/publicadministration & enterprises. The Board Diversity Policy of the Company requires theBoard to have balance of skills experience and diversity of perspectives appropriate tothe Company. Directors are appointed/re-appointed with the approval of the Members for ashorter period say two to five years only. All Directors other than IndependentDirectors are liable to retire by rotation and are eligible for re-election in terms ofthe provisions of Articles of Association. The Independent Directors of your Company haveconfirmed that they meet the criteria of independence as prescribed under section 149 ofthe Companies Act 2013 and Regulation 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 and Regulation 25(8)of the Listing Regulations and there is no change in the status of their independence andhave confirmed that they are not aware of any circumstances or situation which exists ormay be reasonably anticipated that could impair their ability to discharge their duties.The Board of Directors of the Company also confirms that the Independent Directors alsomeet the criteria of expertise experience integrity and proficiency in terms of Rule 8of the Companies (Accounts) Rules 2014 (as amended) and on the basis of declarationssubmitted by the Independent Directors with the Company the Board of Directors is havingpositive outlook towards the integrity and expertise of the Independent Directors.
The Independent Directors of the Company had undertaken requisite steps towards theinclusion of their names in the data bank of Independent Directors maintained with theIndian Institute of Corporate Affairs (IICA) in terms of Section 150 of the Act read withRule 6 of the Companies (Appointment & Qualification of Directors) Rules 2014 andhave registered themselves with the Independent Director's databank as required under theabove provisions. Furthermore they have also renewed their registration with IICA forapplicable tenures. The Independent Directors (other than Independent Directors who havebeen granted exemption under the said Rules) are yet to appear for the online proficiencyself-assessment test and hence the opinion on the aforesaid would be provided in the nextyear's annual report.
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 of the annual accounts the applicable accounting standards havebeen followed and there are no 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 2020-21.
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 2021 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
M/s U. Shanker & Associates Chartered Accountants New Delhi (Firm registrationNo. 014497N) were appointed as the Statutory Auditors of the Company at the Annual GeneralMeeting held on 24th August 2017 for a term of 5 (five) consecutive years.
Your Company's Directors have examined the Statutory Auditors' Report issued by M/s U.Shanker & Associates Chartered Accountants on the Annual Accounts of the Company forthe financial year ended 31st March 2021. There is no reservation qualification oradverse remark made by the Statutory Auditors in their Report and their clarificationswherever necessary have been included in the Notes to the Accounts section as mentionedelsewhere in this Annual Report. During the period under consideration no incident offrauds was reported by the Statutory Auditors pursuant to Section 143 (12) of theCompanies Act 2013.
Secretarial Auditors and their Report
Your Directors have appointed M/s JVS & 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 202021 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 2021 has been submitted by M/s JVS & Associates andtaken on record by the Board of Directors of the Company. The Report of the SecretarialAuditors in Form MR-3 for the financial Year ended 31st March 2021 is enclosed to thisReport. The Board members have examined the above said report and observed that there isno reservation qualification and adverse remark made by the Secretarial Auditors andwhile issuing the said report the Secretarial Auditors have given their comments on thecompliance which were duly complied with by the Company.
Internal Auditors and their Report
Your Directors in their meeting held on 25th May 2017 have appointed Sh. Rajesh GuptaChartered Accountant as internal Auditor of the Company in accordance with terms of theprovisions of Section 138 read with Section 179 of the Companies Act 2013 and rule 8 ofthe Companies (Meetings of Board and its Powers) Rules 2014 and rule 13 of the Companies(Accounts) Rules 2014 for the financial year 201718 onwards for conducting the InternalAudit of the books of accounts and reviewing and ensuring the Internal Control system ofthe Company and to issue their report.
The Internal Audit Report in respect of books of accounts and Internal Control systemof the Company for the Financial Year ended March 31 2021 has been submitted by Sh.Rajesh Gupta which has been duly considered and requisite actions were taken by AuditCommittee and reports thereon were also taken on record by the Board of Directors of theCompany. The Board members have examined the above said report and observed that there isno reservation qualification and adverse remark made by the Internal Auditors.
Particulars of Loans Advances Guarantees and Investments
The Company has not granted any loan guarantee or made any investments during the yearended 31st March 2021 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 litigation/orders
During the year under consideration there are no significant and material orderspassed by the regulators or courts or tribunals and no litigation was outstanding as on31st March 2021 which would impact the going concern status and Company's operations infuture. During the year under review no Corporate Insolvency Resolution application wasmade or proceeding was initiated by/against Liberty Shoes Limited under the provisions ofthe Insolvency and Bankruptcy Code 2016 (as amended) except two applications filedagainst the Company by its two vendors and the same is to be adjudicated at NationalCompany Law Tribunal (NCLT) Chandigarh. The said application(s) are not yet been admittedby NCLT. The Company in consultation to its legal advisor has decided to oppose theadmission of the above applications before NCLT
Transactions with Related Parties
During the year 2020-21 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. Your Company does not havea material unlisted subsidiary as defined under Regulation 16 (1) (c) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Your Directors shall formulatea Policy to determine Material Unlisted Subsidiary as and when the relevant provisions forthe same are applicable on it in future.
There were no materially significant transactions with related parties during thefinancial year 2020-21 which were in conflict with interest of the Company. Since all therelated party transactions entered in to by your Company were in the ordinary course ofbusiness and also on an arm's length basis therefore details required to be provided inthe prescribed Form AOC-2 is not applicable to the Company. However the Company has beenundertaking transactions for last so many years in respect of payment of Royalty/Franchise fees to few of the related parties after obtaining due prior approval of theconcerned regulatory authorities and shareholders under the provisions of Companies Actand SEBI Guidelines. All the related party transactions have been disclosed in the Notesto financial statements as required under IND AS-24 of the Accounting Standard.
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 II 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 III and the same forms part of thisreport. During the financial year 2020-21 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 IV in the prescribed Form MGT-9 which forms part of thisreport. The Annual return for the financial year ended 31st March 2021 is available onthe website of the Company www.libertyshoes.com.
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. Promotion of Quality education in the Schools
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 provided 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 Books Bags and Uniform to schools for distribution amongst thechildren/students who can't afford it.
2. Promotion of Fitness & Sports amongst the youth from the community
Liberty contributed for providing training to youth athletes of Karnal Haryana forpreparing them to participate in National Games and Olympics.
3. Setting up of Water Check Dam and Tree Plantation
Liberty has set up Check Dam in villages of Rajasthan which is supposed to providebenefits to approx. 10000 villagers and 20000 Animals within the vicinity of the villages.Liberty is also ensuring environmental sustainability through tree plantationconservation of natural resources and maintaining of quality of soil air and water in theplaces around its Plants/Offices.
4. COVID-19 Initiatives
Considering the severity of COVI-19 pandemic Liberty has taken initiatives anddistributed Food Kits Hygiene and Sanitation goods amongst the poor needy and COVID-19impacted people.
5. Contribution for disaster management activities
Liberty has contributed for providing the food and groceries items to the familiesaffected due to disaster in Chamoli District at Uttrakhand.
6. Contribution for reconstruction of heritage Buildings and development of PublicInfrastructure
Liberty has contributed for the reconstruction of building of National heritage anddevelopment of various facilities and structures which are available to the generalpublic.
7. Other CSR activities and initiatives:
Liberty has contributed for the promotion of religious activities by contributing totemples/Pooja/various registered Kalyankari Sabhas and societies.
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 (as amended) andRule 9 of the Companies (Accounts) Rules 2014 is provided in Annexure V of this report.In order to align the CSR Policy with the amendments in law relating to CSR based on therecommendation of the CSR Committee the Board of Directors at its meeting held on August11 2021 has revised the CSR Policy and the same was made applicable immediately from thedate of Board Meeting i.e. 11th August 2021. The revised policy is available on thewebsite 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 free fromdiscrimination 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 2021 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 U. Shanker & Associates Chartered Accountants on compliance withcorporate governance norms under the Listing Regulations is given at page no. 100 to pageno. 101 of this Annual report.
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 wherever applicable are presented at page no. 104 to pageno. 108 of this Annual report. The Management Disclosure and Analysis Report provides aconsolidated prospective of economic social and environmental aspects material to ourstrategy and our ability to create and sustain value to 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 the"Annexure VI" which forms part of this report.
Compliance with Secretarial Standards:
The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.
Outstanding Share Capital and its Listing:
Your Company has outstanding Share Capital of '170400000/- (Previous Year'170400000/-) consisting of '17040000 (Previous Year '17040000) Equity Shares of'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 Council for Footwear Leather & Accessories (CFLA) and the GovernmentAuthorities.
Your Directors place on record their deep appreciation to the employees at all levelsfor their hard work and dedication.
Your Directors and Management would also like to place on record their deepestappreciation for real life warriors who selflessly give themselves to others during thepandemic of COVID-19.
For and on behalf of the Board of Directors
|Place: Gurugram Haryana ||Adesh Kumar Gupta Chairman of the Meeting |
|Dated: Wednesday 11th August 2021 ||DIN: 00143192 |