Liberty Shoes Ltd
Directors Reports
Dear Shareholders,
Your Directors are presenting the 37th Annual Report of the Company together with the
Audited Financial Statements for the financial year ended 31st March, 2023.
Financial Highlights:
The highlights of the financial statements are as under:-
(`in Lakh)
| Particulars |
2022-23 |
2021-22 |
| Gross Sales |
65,432.70 |
48,781.68 |
| Add: Other Income |
17.42 |
28.28 |
| Revenue from Operations and Other Income |
65,450.12 |
48,80 9.96 |
| Profit before Tax Expense (PBT) |
1,785.48 |
397.95 |
| Less: Tax Expenses |
494.35 |
173.65 |
| Net Profit for the year (NP) |
1,291.13 |
224.29 |
| Other Comprehensive Income/(Loss) |
51.47 |
38.43 |
| Total Comprehensive Income |
1,342.60 |
262.72 |
Review of the operations of the Company:
During the financial year 2022-23, your Company achieved its highest-ever turnover in
its history, with total revenue reaching to ` 65,432.70 Lakh as against ` 48,781.68 Lakh
during the previous year. This achievement reflects a 34% increase compared to the
previous year. Furthermore, your Company's profitability also soared, with net profits
reaching to ` 1,291.93 Lakh, marking a 476% increase from the previous year of ` 224.29
Lakhs. These financial milestones are purely a demonstration of our dedication, thought
out plans and the management commitment for continuous improvement.
The Financial results have to be observed keeping in view the fact that the year under
consideration has been the first full year of operations without any disruption of impact
of COVID-19 which has impacted company's operations in the last 2/3 years.
E-commerce (on line portals) played a pivotal role in our success, contributing 15% of
our total revenue during the financial year. This channel's growth underscores our
commitment to digital transformation and meeting customer preferences of the modern trade.
We also strengthened our retail footprint by opening of 55 new stores, reaching 425
exclusive showrooms nationwide including COCO stores. The first half of the financial year
2022-23 saw a surge in pent-up demand across our industry wherein opening of schools,
institutions and offices compelled the consumers to revive their need of essential items
like footwear and other related products. Your Company responded promptly to meet this
demand, adapting our operations and strategies to capitalize on these opportunities. This
resilience and adaptability have been helpful for our continuing growth trajectory in 2nd
half as well. Our focus on sound financial management resulted in reducing receivables and
the efficient utilization of working capital which contributed to a healthy free cash flow
position. This financial strength allows us to explore new growth avenues and also
comprehend our investment towards long-term sustainability of the Company.
In line with our commitment to innovation and enhanced customer satisfaction, your
Company during the year under consideration has introduced its new range of premium casual
footwear with novel identity of LEAP7X which has been very well acknowledged by the
consumers. To augment the promotion of this product category, the Company strategically
engaged two eminent Bollywood celebrities, Ayushman Khurana and Rakul Preet Singh, as
Brand Ambassadors for our athleisure brand, Leap7X. Considering the athleisure-centric
nature of the brand, the association with these Bollywood stars perfectly aligns with the
message conveyed in Leap7X's latest campaign, "Sitaare Aise Hi Nahi Bante Mehnat
Karni Padti Hai AM To PM." Their endorsement creates a compelling connection
between the brand and the essence of the campaign, reflecting the contemporary and active
lifestyle embraced by Leap7X. Their presence and influence bring credibility and appeal to
the brand, further enhancing Company's market position and customer engagement.
During the financial year 2022-23, to enhance our brand presence and customer
engagement, we allocated substantial resources to marketing activities and incurred
approx. ` 25 Crores as against ` 5 Crores (approx.) during the previous year .The said
advertising expenses comprised almost 30% value done through use of non cash mode against
clearance of slow moving stocks as part of strategy of promotions and also reduction of
stocks. These efforts have yielded positive results, strengthening our market position and
customer loyalty.
Liberty ,as members are aware, has always been perceived as Innovative brand and
continuing with the same approach has recently introduced new technology of NITPRO to
further maintain our competitive edge and staying at the forefront. Your Company during
the year also successfully upgraded its proven ERP by implementing the SAP S/4 HANA
system, (cloud based) for streamlining its operations and also enhancing efficiency across
the organization. This technology upgrade positions us for greater agility and
adaptability in the ever-evolving business landscape.
Your Director are of the opinion that Footwear Industry per se has enormous potential
to grow in future and Liberty is all set to exploit that potential.
Credit Rating:
During the year under review, CARE Ratings Limited, a leading rating agency, has
assigned its Ratings CARE BBB+; (Triple B Plus) in respect of Long Term banking facilities
(comprising Term Loan and Working Capital fund based facilities) and CARE “A2”
(“A” Two) in respect of Short Term banking facilities (comprising non fund based
facilities) sanctioned by the Banks to the Company. According to the rating given based on
Company's improved liquidity position ,the outlook on the Long Term rating has been
assigned stable.
Subsidiary Company, their Performance & Consolidated financial statement:
The Wholly Owned Subsidiary (WOS) in the Middle East has already been discontinued by
the Company, as previously announced. No financial statements for the year under review
were required to be filed and submitted, as required by Section 129 of the Companies Act,
2013, as this WOS ceased to exist as of 2018.
Appropriations:
Dividend
Since your Company is not among top 1000 listed Companies based on market
capitalization (calculated as on 31st March, 2023), therefore it is not having dividend
distribution policy as provided under Regulation 43 of the SEBI (Listing Obligations &
Disclosure Requirements) Regulations, 2015 (as amended) herein after referred as
“Listing Regulations” in this report). However, your Company will adopt the same
as and when it is applicable on it.
The Board considering the Company's performance and financial position for the year
under review, approved and paid Interim dividend at the rate of 25% (Rs. 2.50 per equity
share) on each fully paid-up equity share of Rs. 10/-. The total outflow on account of
Interim Dividend from the company's profits for the financial year that ended on 31st
March, 2023 was Rs. 4.26 Cr.(inclusive of applicable T.D.S.). The Interim dividend was
paid to the members whose names were listed in the Register of Members as of Friday,
September 23, 2022 i.e, which was the Record Date for the purpose of payment of interim
dividend.
Transfer to Reserves
Your Directors proposed to transfer ` NIL (Previous Year ` NIL) to the General Reserves
out of the profits available with the Company for appropriations. Accordingly, an amount
of ` 1342.60 Lakh (Previous Year ` 262.72 Lakh) has been proposed to be retained in the
Profit & Loss Account of the Company.
Transfer to Investor Education and Protection Fund
In compliance with Sections 124 and 125 of the Act read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016 (“IEPF Rules”) as amended from time to time, a sum of ` 3.48 Lakh
for FY 2014-15 (Final Dividend) has been deposited into the specified bank account of the
IEPF, Government of India, towards unclaimed/unpaid dividend amount for the financial year
ended March 31, 2015.
As per the said Rules, the corresponding equity shares in respect of which Dividend
remains unclaimed/ unpaid for seven consecutive years or more, are required to be
transferred to the Demat Account of the IEPF Authority. During the year under review, your
Company has transferred 30,561 underlying Equity Shares to the Demat Account of the IEPF
Authority, in compliance with the aforesaid Rules.
Employees Stock Option Scheme(s)
During the year ended 31st March, 2023, your Company has not floated any scheme in
relation to Employees Stock Option(s) and no such further plans have been initiated at
present in this regard.
Nomination and Remuneration Policy
Your Board of Directors, on the recommendation of the Nomination and Remuneration
Committee, framed and adopted a policy for identifying and recommending the selection and
appointment of Directors and KMPs of the Company and remuneration to Directors, KMPs and
other employees. The contents of the Policy and evaluation criteria have been stated in
the Corporate Governance Report. The revised Nomination and Remuneration Policy is set out
in Annexure-I of this Report. The Policy is also available on 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 a
view to regulate trading in Equity Shares of the Company by the Promoters, Directors,
Employees, designated persons and other connected persons. The said Code of Conduct is
available on the website of the Company at www.libertyshoes.com. The Code requires
pre-clearance for dealing in Company's shares and prohibits purchase or sale of shares in
your Company by the Promoters, Directors, Employees, designated persons and other
connected persons while they are in possession of unpublished price sensitive information
and also during the period when the Trading Window remains closed.
Familiarization Program
In order to encourage active participation of Independent Directors and in order to
understand the business environment, your Company has been familiarizing the Independent
Directors on its Board with detailed presentations by its business functional heads on the
Company operations, strategic business plans, new products and technologies including
significant aspects of the Industry and its future outlook. Once appointed, the Non
Executive & independent Directors undergo the familiarization program of the Company.
The Non executive & independent Directors are also provided with financial results,
internal audit findings and other specific documents as sought by them from time to time.
They are also made aware of the various policies and code of conduct and business ethics
adopted by the Board. Details of familiarization programs extended to the Non Executive
& Independent Directors during the year under consideration are disclosed on the
Company website at www.libertyshoes.com.
Risk Management Policy & Risk Management
The Management of the Company has always been consciously reviewing its business
operations in accordance with set rules and procedure and if any deviation or risk is
found, remedial and effective steps are being taken to minimize the deviation and risk. In
line with the provisions of Section 134 (3) (n) of the Companies Act, 2013, the Company
has developed a Risk Management Policy to build and establish the process and procedure
for Identifying, assessing, quantifying, minimizing, mitigating and managing the
associated risk at early stage. Policy is aimed to develop an approach to make assessment
and management of the risks in financial, operational and project based areas in timely
manner. The main objectives of the Risk Management Policy is inter-alia, to ensure that
all the current and future material risk exposures of the Company are identified,
assessed, quantified, appropriately mitigated, minimized and managed, to protect the brand
value through strategic control and operational policies and to enable compliance with
appropriate regulations wherever applicable, through the adoption of best practices. The
Board of Directors of the Company assesses several type of risks which include Business
Environment Risks, Strategic Business Risks and Operational Risks etc. The Board of
Directors periodically reviews and evaluates the risk management system of the Company so
that the management controls the risks through properly defined networks. Head of the
Departments are responsible for implementation of the risk management system as may be
applicable to their respective areas of functioning and report to the Board and Audit
Committee. No risks threatening the existence of the organization have been identified.
However there are other risks against which adequate mitigation plans are prepared.
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 read
with Regulation 22 of Listing Regulations, your Company has an effective mechanism of
reporting illegal or unethical behavior. The Company has a Whistle Blower Policy (vigil
mechanism) wherein the directors, employees, consultants and contractors are free to
report violations of laws, rules and regulations or unethical conducts, actual or
suspected fraud or violation of the Company's code of conduct or ethics policy to the
nodal officer. The mechanism followed is appropriately communicated within the Company
across all levels and has been posted on the Notice Board of the Company. The
confidentiality of those reporting violations etc. is maintained and they are not
subjected to any discriminatory practice. The concern can be reported by sending an e-mail
message at the dedicated address viz. ethicscounsellors@ libertyshoes.com. Individuals can
also raise their concerns directly to the CEO or the Chairman of the Audit Committee of
the Company. Any allegation falling within the scope of the concerns are identified,
investigated and dealt with appropriately. The Audit Committee periodically reviews the
functioning of this mechanism. The Vigil mechanism established in the
Company provides adequate safeguards against victimization 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. The details of establishment of
Vigil mechanism/Whistle Blower Policy of the Company are available at the website of the
Company viz. www.libertyshoes.com.
Non-applicability of Maintenance of Cost Records:
The Central Government has not prescribed the maintenance of cost records under Section
148(1) of the Companies Act, 2013 and Rules made there under with respect to the Company's
nature of business.
Buy Back of Equity Shares:
Your Company has not undertaken any exercise to buy back its Equity Shares from the
shareholders during the year under review.
Public Deposit(s):
The Company has not accepted/renewed any public deposits and as such, no amount on
account of principal or interest on deposits from public was outstanding as on date of the
balance sheet.
Board of Directors and Key Managerial Personnel:
Re-appointment of Directors to retire by rotation
Sh. Adish Kumar Gupta & Sh. Ashok Kumar, Directors of the Company will be retiring
by rotation at the 37th Annual General Meeting in pursuance of the provisions of Section
152 of the Companies Act, 2013 and being eligible, have offered themselves for the
re-appointment at the 37th Annual General Meeting.
Appointment(s) and Cessation of office of Directors Appointment(s)
(a) The members at the 36th Annual General Meeting held on 30th September, 2022 have
approved the appointment of Sh. Gautam Baid (DIN: 00021400) as an Independent Directors of
the Company for consecutive term effective from 01st April, 2022 to 28thSeptember, 2024.
(b) On the basis of recommendation of Nomination and Remuneration Committee, the Board
of Directors of the Company in their meeting held on 11th August, 2023 have approved the
appointment of Sh. Piyush Dixit (DIN: 03514223) and Sh. Anand Das Mundhra (DIN: 00167418)
as Additional Directors as well as Independent Directors of the Company for a first term
of 3 years commencing from 11th August, 2023 to 10th August, 2026 subject to the approval
of the members in their forthcoming Annual General Meeting. Accordingly, their
candidature(s) along with resolution(s) are being placed in the ensuing Annual General
Meeting for appointment as an Independent Director of the Company as above.
Brief Profile of above Directors, nature of their expertise in specific functional
areas and names of Companies in which they hold directorship/ chairmanships between
directors inter se as stipulated under Companies Act, 2013, Listing Regulations and
Secretarial Standards, is provided in the Annexure A to the Notice
Cessation of office of Director:
After closure of financial year, 2022-23, due to pre-occupations, Sh. Arvind Bali Kumar
and Sh. Sanjay Bhatia, Independent Directors have tendered resignation from the position
of Directorship of the company with effect from 24th May, 2023. Besides above, there were
no other reasons for tendering of their resignations. The Board of Directors of the
Company in their meeting held on 30th May, 2023 have placed on record appreciation for the
contribution made by the above Directors during their respective tenure(s).
Cessation of Chief Executive officer (CEO)
Sh. Adesh Gupta has ceased to be a Chief Executive Officer of the Company w.e.f. 5th
September, 2023 as per the decision of the Board of Directors of the Company taken in
their meeting held on this date.
Key Managerial Personnel
The following persons are the Key Managerial Personnel (KMPs) of the Company as per the
provisions of the Companies Act, 2013-
| Sh.Adesh Kumar Gupta |
- 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, meetings
held during the year and attendance at the meetings of the Committees are provided in the
Corporate Governance Report.
Number of meetings of the board
Six meetings of the board were held during the year. The detail of the composition,
board meetings held during the year and attendance at the meetings are provided in
Corporate Governance Report. The maximum time gap between two meetings did not exceed 120
days.
Annual Evaluation of Directors and Board as a whole
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the
Board is required to monitor and review the Board evaluation framework. In line with the
Corporate Governance Guidelines, the Annual Performance Evaluation is conducted for all
members as well as the working of the Board and its Committees. This evaluation is with
specific focus on the performance and effective functioning of the Board after seeking
inputs from all the directors on the basis of the criteria such as the Board composition
and structure, effectiveness of board processes, information and functioning, etc. The
evaluation process also considers the time spent by each of the Board Members, core
competencies, personal characteristics, accomplishment of specific responsibilities and
expertise. In addition, the Chairman is also evaluated on the key aspects of his role. The
Board evaluation is conducted through questionnaire having qualitative parameters and
feedback based on ratings. The performance of the committees was evaluated by the board
after seeking inputs from the committee members on the basis of the criteria such as the
composition of committees, effectiveness of committee meetings, etc.
The outcome of the Board evaluation for the financial year under consideration was
discussed by the Nomination and Remuneration Committee and Board at their respective
meeting held on 13th February, 2023, excluding the director being evaluated.
During the year under review, the Company has complied with all the criteria of
Evaluation as evisaged in the SEBI Circular on "Guidance Note on Board
Evaluation”. In lines with the provisions of the Companies Act, 2013 and Listing
Regulations, separate meeting of the Independent Directors of the Company was held on 30th
January, 2023 in the absence of non-independent directors and members of management inter
alia to evaluate the performance of the non-Independent Directors, Board as a whole of the
Company, its committees, Chairman and to assess the quality, quantity and timeliness of
flow 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 of
Directors in terms of the Act and the Rules there under, both in respect of Independent
Directors and other Directors as applicable, has earlier been approved by the Nomination
and 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 drawn
from amongst eminent professionals with experience in business/finance/law/public
administration & enterprises. The Board Diversity Policy of the Company requires the
Board to have balance of skills, experience and diversity of perspectives appropriate to
the Company. Directors are appointed/re-appointed with the approval of the Members for a
shorter period say, two to five years only. All Directors, other than Independent
Directors, are liable to retire by rotation and are eligible for re-election in terms of
the provisions of Articles of Association. The Independent Directors of your Company have
confirmed that they meet the criteria of independence as prescribe under section 149 of
the Companies, Act, 2013 and Regulation 16 of Listing Regulations.
The Nomination and Remuneration Policy as approved by the Board of Directors of the
Company has been attached to this report and also accessible on the website of the Company
at www.libertyshoes.com
Material changes and commitments affecting financial position between end of the
financial year and date of report
As per the provisions of Section 134(3) (1) of the Companies Act, 2013, no material
changes or commitments affecting the financial position have occurred between the end of
financial year of the Company to which the financial statements relates to the date of the
report.
Change in the nature of Business, if any
There was no change in the nature of business of the Company during the year under
review.
Statutory Disclosures
Your Directors state that there being no transactions with respect to following items
during the year under review, no disclosure or reporting is required in respect of the
same.
1. Deposits from the public falling within the ambit of Section 73 of the Companies
Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of your Company under
any scheme
4. No settlements have been done with banks or financial institutions.
Internal financial control systems and their adequacy
Liberty's internal financial controls are adequate and operate effectively and ensure
orderly and efficient conduct of its business including adherence to its policies,
safeguard its assets, prevent and detect frauds and errors, maintain accuracy and
completeness of its accounting records and further enable it in timely preparation of
reliable financial information. During the year, such controls were tested and no
reportable material weakness in the design or operation was observed. However, the Company
has observed few instances of deviation from the existing Corporate Governance guidelines
and immediately coming the same in to information of Board/Management Committee, the
necessary remedial measure has been taken including action against the concerned.
The Company has in place a strong and independent Internal Audit Department which is
responsible for assessing and improving the effectiveness of internal financial control
and governance. To maintain its objectivity and independence, the Internal Audit function
reports to the Chairman of the Audit Committee. The information has been provided in the
Management Discussion and Analysis Report in detailed manner.
Declaration by Independent Directors
The Company has received necessary declarations from each independent director under
Section 149(7) of the Companies Act, 2013, that she/he meets the criteria of independence
laid down in Section 149 (6) of the Companies Act, 2013 and 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 and
have confirmed that they are not aware of any circumstances or situation which exists or
may 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 also
meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8
of the Companies (Accounts) Rules, 2014 (as amended) and on the basis of declarations
submitted by the Independent Directors with the Company the Board of Directors is having
positive outlook towards the integrity and expertise of the Independent Directors.
The Independent Directors of the Company had undertaken requisite steps towards the
inclusion of their names in the data bank of Independent Directors maintained with the
Indian Institute of Corporate Affairs (IICA) in terms of Section 150 of the Act read with
Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014 and
have registered themselves with the Independent Director's databank as required under the
above provisions. Furthermore, they have also renewed their registration with IICA for
applicable tenures. The Independent Directors (other than Independent Directors who have
appeared and completed the online proficiency self assessment test) are yet to appear for
the online proficiency self-assessment test and hence, the opinion on the aforesaid would
be provided in the next year's annual report.
Directors' Responsibility statement
Pursuant to Section 134 (3) (c) of the Companies Act, 2013, your Directors, based on
the representations received from the management, confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards have
been followed and there are no material departures from the same;
ii) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the profit
of the Company for that period;
iii) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
iv) they have prepared the annual accounts on a going concern basis;
v) they have laid down internal financial controls to be followed by the Company and
such internal financial controls are adequate and operating effectively; and
vi) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the Internal, Statutory and
Secretarial Auditors and external consultants and the reviews performed by management and
the relevant board committees, including the audit committee, the board is of the opinion
that the Company's internal financial controls were adequate and effective during the
financial year 2022-23.
Audit Committee and their Recommendations/ Observations
Your Board has a duly constituted Audit Committee in terms of Section 177 of the
Companies 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 reference
of the Audit Committee has been approved by the Board. The details pertaining to
composition of Audit Committee, no. of meetings held during the year under review, brief
term of reference and other details have been included in the Corporate Governance Report,
which forms part of this report. The recommendations/observations of the Audit Committee
placed before the Board during the financial year ended 31st March, 2023 in respect of
matters pertaining to the financial management or any other matter related thereto, were
considered and duly accepted by the Board of Directors of the Company.
Statutory Auditors and their Report
Pursuant to the provisions of Section 139 of the Companies Act, 2013, the members at
their 36th Annual General Meeting (“AGM”) of the Company held on 30th September,
2022 had appointed M/s Pardeep Tayal & Co. Chartered Accountants, Panipat (Firm
registration No. 002733N), for a term of 5 (five) consecutive years from the conclusion of
36th Annual General Meeting till the conclusion of 41st Annual General Meeting to be held
in the year 2027.
Auditors' Report:
Your Company's Directors have examined the Statutory
Auditors' Report issued by M/s Pardeep Tayal & Co, Chartered Accountants on the
Annual Accounts of the Company for the financial year ended 31st March, 2023. There is no
reservation, qualification or adverse remark made by the Statutory Auditors in their
Report and their clarifications, wherever necessary, have been included in the Notes to
the Accounts section as mentioned elsewhere in this Annual Report. During the period under
consideration, no incident of frauds was reported by the Statutory Auditors pursuant to
Section 143 (12) of the Companies Act, 2013.
Secretarial Auditors and their Report
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board of Directors in
their meeting held on 9th August, 2022 appointed M/s JVS & Associates, New Delhi a
Practicing Company Secretaries for the financial year 2022-23 for conducting the Audit of
secretarial records of the Company and issue their report.
The Secretarial Audit Report in respect of secretarial records of the Company for the
Financial Year ended March 31, 2023 has been submitted by M/s JVS & Associates and
taken on record by the Board of Directors of the Company. The Report of the Secretarial
Auditors in Form MR-3 for the financial Year ended 31st March, 2023 is enclosed to this
Report. The Board members have examined the above said report and observed that there is
no reservation, qualification and adverse remark made by the Secretarial Auditors except
delay in filing of Corporate Governance Report for the Quarter ended 30th June, 2022.
Management Response: The Company has submitted the said Report on Corporate
Governance for the Quarter ended 30th June, 2022 and also complied with the stipulations
of the Stock Exchanges related to non- compliance.
Internal Auditors and their Report
Appointment of Internal Auditors
On the recommendation of Audit Committee, your Board of Directors in their meeting held
on 30th May, 2023 had appointed M/s R.C. Kapoor & Co., Chartered Accountants, New
Delhi as internal Auditors of the Company, in accordance with terms of the provisions of
Section 138 read with Section 179 of the Companies
Act, 2013 and rule 8 of the Companies (Meetings of Board and its Powers), Rules, 2014
and rule 13 of the Companies (Accounts) Rules, 2014 for the financial year 2023-24 for
conducting the Internal Audit of the books of accounts and reviewing and ensuring the
Internal Control system of the Company and to issue their report. The above firm have
submitted its consent and also confirmation that they are qualified to act as Internal
Auditors of the Company.
Internal Audit Report:
The Internal Audit Report in respect of books of accounts and Internal Control system
of the Company for the Financial Year ended March 31, 2023 has been submitted by Sh.
Rajesh Gupta, which has been duly considered and requisite actions were taken by Audit
Committee and reports thereon were also taken on record by the Board of Directors of the
Company. The Board members have examined the above said report and observed that there is
no reservation, qualification and adverse remark 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 year
ended 31st March, 2023 under Section 186 of the Companies Act, 2013 and Rules made there
under. Pursuant to Section 186 (4) read with Rule 11 of the Companies (Meetings of Board
and its Powers) Rules, 2014 and Schedule V of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing
Regulations”), disclosure on particulars relating to Loans, advances and investments
are provided as part of the financial statements.
Significant and material litigation/orders
(a) During the year under review, no Corporate Insolvency Resolution application was
made or proceeding was initiated, by/against Liberty Shoes Ltd. under the provisions of
the Insolvency and Bankruptcy Code, 2016 (as amended), except two applications filed
earlier against the Company by its two vendors which were pending for adjudication at
National Company Law Tribunal (NCLT), Chandigarh. The Company, in consultation with its
legal consultants, has opposed the admission of the above applications before NCLT and the
Hon'ble Tribunal vide its order dated 15th June 2023 have dismissed the said two
petitions.
As on date no proceedings are pending for adjudication at NCLT Chandigarh in respect of
petitions so filed against the Company.
Sh. Adarsh Gupta, partner of LFC, anticipating the dismissal of IBC petition from
Hon'ble NCLT, has approached Hon'ble Delhi High Court at New Delhi and filed a petition
under Section 9 of the Arbitration & Conciliation Act, 1996 on behalf of the firm
against the Company seeking Ex-parte injunction order against the continuation of
Trademark License agreement dated 3rd April 2013 on the similar grounds of its petition at
NCLT but further extending the disputes of terms of payment of Royalty and its calculation
from financial year 2018-19 to 2022-23 after serving Termination notice on 4th May, 2023.
The Company, on the basis of legal opinion available has opposed the petition filed by Sh.
Adarsh Gupta, partner of LFC including maintainability thereof before Hon'ble Delhi High
Court and the Hon'ble Delhi High Court vide its Order dated 21st August, 2023 has
dismissed the above petition being not maintainable.
Since members are aware that the Company has long term arrangements with three firms
namely Liberty Group Marketing Division (LGMD), Liberty Enterprises (LE) & Liberty
Footwear Co. (LFC), initially executed in 2003 and then last renewed with validity till
31st March 2028 for the exclusive use of complete business of three firms including their
IPR & trademarks. Sh. Harish Gupta, one of the partners of LFC and Sh. Arpan Gupta,
beneficiary and legal heir of one of the partners of LFC, LE & LGMD have given their
termination notice(s) of the Company's arrangements with above firms. It is pertinent to
point out here that Sh. Harish Gupta given his termination notice in respect of Company's
arrangement with LFC and Sh. Arpan Gupta has given his termination notice(s) in respect of
Company's arrangement with three firms i.e. LFC, LE and LGMD and in response to such
notice(s), the Company, besides invoking of arbitration clause available under the
agreement with LFC, has approached jurisdictional
Court at Karnal under Section 9 of Arbitration & Conciliation Act 1996 and has been
granted status quo orders by the Ho'nble Court at Karnal initially against LFC and
subsequently against LGMD. Subsequent to that (granting of status quo order against LFC by
Karnal Court) the Company has also approached Hon'ble Punjab & Haryana High Court at
Chandigarh for appointment of Arbitrator by filing petition against LFC under Section 11
of the said Act. The Company has taken legal opinion form one of the reputed Legal firm in
this regard and hopeful of positive proceedings in the matter. Both the petitions filed by
the Company against the respective firms under Section 9 and Section 11 of the Arbitration
and Conciliation Act, 1996 are pending to be adjudicated by the respective Courts.
Considering the legal opinion available with the Company regarding continuity of
arrangements with the above said firms till the end/expiry of the term till 31st March,
2028, the Company does not foresee or assess any pecuniary impact going forward till the
time it is settled or otherwise adjudicated by the Hon'ble Court(s) or Arbitrator to be
appointed.
(b) During the year under consideration and till the date of this report, there were no
other significant and material orders passed by the regulators or courts or tribunals and
no litigation was outstanding as on 31st March, 2023, which would impact the going concern
status and Company's operations in future.
Transactions with Related Parties
During the year 2022-23, all transactions entered by the Company with related parties
as defined under the Companies Act, 2013, Rules made there under, were in the Ordinary
Course of Business and at Arm's Length basis. The Audit Committee granted omnibus approval
for the transactions (which are repetitive in nature) and the same was reviewed by the
Audit Committee and the Board of Directors on quarterly basis. Your Company does not have
a material unlisted subsidiary as defined under Regulation 16 (1) (c) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. Your Directors shall formulate
a Policy to determine Material Unlisted Subsidiary as and when the relevant provisions for
the same are applicable on it in future.
There were no materially significant transactions with related parties during the
financial year 2022-23 which were in conflict with interest of the Company. Since all the
related party transactions entered in to by your Company were in the ordinary course of
business and also on an arm's length basis, therefore details required to be provided in
the prescribed Form AOC-2 is not applicable to the Company. However, the Company has been
undertaking 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 the concerned
regulatory authorities and shareholders under the provisions of Companies Act and SEBI
Guidelines. All the related party transactions have been disclosed in the Notes to
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, the
Board had approved and adopted policies on Related Party Transactions which has been
uploaded on the Company's website www.libertyshoes.com under the “investor relations
section”.
Particulars of Directors and Employees
The information required under Section 197(12)of the Companies Act, 2013 read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
and subsequent amendments thereto, is given in Annexure II and the same forms part of this
report.
A statement containing the Information of top ten employees in terms of remuneration
drawn 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, and
subsequent amendments thereto, is given in Annexure III and the same forms part of this
report. During the financial year 2022-23, no employee, whether employed for whole or part
of the year, was drawing remuneration exceeding the limits mentioned under Section 197(12)
of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, and subsequent amendments thereto.
Extract of Annual Return
In terms of Sections 92(3) and 134(3)(a) of the Act, annual return is available under
the ‘Investors' section of the Company's website i.e. www.libertyshoes.com.
Corporate Social Responsibility (CSR)
Your Company has been involved in social initiatives for last three decades and engaged
in various activities in the field of education, primary healthcare, communities, ecology
and environment etc. It believes in long lasting impact towards creating a just,
equitable, humane and sustainable society. In Liberty, CSR initiatives were being
undertaken, long before the provisions of the Companies Act, 2013 and with the
implementation of new provisions of Section 135 of the Companies Act, 2013, Liberty is
committed to further strengthen its effort and activities by demonstrating care for the
community through its focus on education and development of skills, health and wellness
including treatment for poor, needy & uninsured people, environment sustainability
including promoting of green initiatives and Improvement of the living conditions of
inhabitants and support to disaster relief efforts etc. The various CSR initiatives
undertaken by your Company during the year under consideration are as under:-
1. Promotion of Quality education in the Schools and Women Empowerment
Liberty, is deeply committed to social responsibility, and this commitment is evident
through various initiatives supporting the education and overall development of
underprivileged children in the vicinity of its Plants/Offices. Through generous
contributions and sponsorships, the company ensures that children from economically
disadvantaged backgrounds have access to quality education, healthcare services, and
balanced nutrition. Liberty's vision extends beyond academic excellence; it aims to
nurture responsible and compassionate citizens who can positively impact society. By
empowering these young minds with education, healthcare, and essential resources, the
company strives to create a brighter and more equitable future for the underprivileged.
In addition to its focus on education and development, Liberty understands the
financial challenges faced by families. To alleviate this burden, the company provides
essential items like books, bags, uniforms, and other necessities to schools free of cost,
ensuring that no child is deprived of education due to economic constraints. These
comprehensive philanthropic efforts reflect Liberty's unwavering dedication to making a
significant and lasting impact on the lives of these children, enabling them to overcome
obstacles and reach their full potential as responsible and empowered individuals.
Liberty is contributing to the promotion of cultural education through their initiative
"Har Ghar Tiranga Azadi ka Mahotsav." This endeavor aims to spread
awareness and knowledge about the significance of our national flag, promoting a sense of
freedom and unity among the people. By actively participating in this celebration,
individuals can embrace their cultural heritage and contribute to the noble cause of
education and patriotism.
2. Promotion of Fitness & Sports amongst the youth from the community
Liberty contributed for providing training to youth athletes of Karnal, Haryana for
preparing them to participate in National Games and Olympics.
Your Company is making significant contributions to the Paralympic Association by
sponsoring disabled players from Guwahati. Their support aims to prepare these talented
athletes to participate in the Olympics. Through this initiative, Liberty is empowering
differently-abled individuals and helping them achieve their dreams on the international
sports.
3. Contribution towards Water, Sanitation and Hygiene
Liberty is dedicated to ensuring access to safe drinking water for students in schools
across Karnal, Haryana. To achieve this goal, they are actively working on supplying water
coolers to the District Child Welfare organization. This initiative will have a positive
impact on the health and well-being of students, creating a conducive learning environment
and promoting overall welfare in the region.
The company, in collaboration with the Rotary Foundation of India, remains committed to
combating hunger, poverty, and providing aid to the underprivileged during emergencies in
New Delhi. Their ongoing efforts are focused on making a positive difference in the lives
of those in need, fostering a sense of compassion and support within the community.
The company, in alliance with the Diya Foundation, persistently extends its support to
the vulnerable population during emergencies in New Delhi. By maintaining a steadfast
commitment, they aim to provide essential aid and assistance to those in dire need,
working towards alleviating the impact of crises and fostering a stronger, more
compassionate community.
4. Contribution towards COVID 19 (Relief)
Liberty is committed to continuing its support for COVID-19 relief initiatives by
providing Infrared Thermometers in Karnal, Haryana. Collaborating with the District
Education Officer, their efforts aim to ensure the safety and well-being of students,
teachers, and staff by facilitating non- contact temperature measurements and contributing
to the overall health management in educational institutions during these challenging
times.
5. Contribution for reconstruction of heritage Buildings and development of
Public Infrastructure
Liberty has contributed for the reconstruction of building of National heritage Liberty
is making substantial contributions to the restoration and reconstruction of national
heritage buildings. Through these donations, the company plays a vital role in
safeguarding the country's cultural legacy, ensuring the protection and upkeep of
historically significant structures for the benefit of future generations. This commitment
underscores Liberty's deep respect for cultural heritage and its dedication to actively
contributing to the preservation and celebration of the nation's rich historical legacy,
including in the city of Karnal. Sri Guru Ravidas Sabha is among the beneficiaries of
Liberty's commendable support for these endeavors.
6. Other CSR activities and initiatives:
Liberty has contributed for the promotion of religious activities by contributing to
temples/Pooja/various registered Kalyankari Sabhas and societies.
During the year under consideration the Company has complied with the provisions of
Companies Act, 2013 by making the required contribution on the activities as stated in
Schedule VII of the Act. The Annual Report on Corporate Social Responsibility activities
as required under Sections 134 and Section 135 of the Companies Act, 2013 read with Rule 8
of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (as amended) and
Rule 9 of the Companies (Accounts) Rules, 2014 is provided in Annexure IV of this report.
The CSR policy is available on the website of the Company at www.libertyshoes.com.
Disclosure under the Sexual harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
Your Company has always believed in providing a safe and harassment free workplace for
every individual working in Liberty's premises through various interventions and
practices. The Company always endeavors to create and provide an environment that is free
from discrimination and harassment including sexual harassment.
The Company has in place a robust policy on prevention of sexual harassment at
workplace. The policy aims at prevention of harassment of employees as well as contractors
and lays down the guidelines for identification, reporting and prevention of sexual
harassment. There is an Internal Complaints Committee which is responsible for redressal
of complaints related to sexual harassment and follows the guidelines provided in the
policy. The said Committee has its presence at corporate office as well as at plants.
During the year ended 31st March, 2023 the Committee did not receive any complaint
pertaining to sexual harassment.
Corporate Governance and Ethics
Your Company believes in adopting best practices of corporate governance. Corporate
Governance principles are enshrined in the spirit of Liberty, which form the core values
of Liberty. These guiding principles are also articulated through the Company's Code of
Conduct, Corporate Governance guidelines, Charter of various Sub-Committees and disclosure
policy.
As per regulation 34 of the Listing Regulations, a separate section on corporate
governance practices followed by your Company, together with a certificate from Statutory
Auditors M/s Pradeep Tayal & Co., Chartered Accountants, on compliance with corporate
governance norms under the Listing Regulations, is given at page no. 88 to page no. 89 of
this Annual report.
Management Discussion and Analysis Report
In terms of Regulation 34 of the Listing Regulations, the Management Discussion and
Analysis report on your Company's performance, industry trends and other material changes
with respect to your Company, wherever applicable, are presented at page no. 92 to page
no. 97 of this Annual report. The Management Disclosure and Analysis Report provides a
consolidated prospective of economic, social and environmental aspects material to our
strategy and our ability to create and sustain value to our key stakeholders.
Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and
outgo:
Information in accordance with the provisions of Section 134 (1) (m) of the Companies
Act, 2013 read with Companies (Accounts) Rules, 2014 in relation to conservation of Energy
and Technology Absorption and Foreign Exchange Earnings and Outgo is given in the
“Annexure V”, which forms part of this report.
Compliance with Secretarial Standards:
The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
Outstanding Share Capital and its Listing:
Your Company has outstanding Share Capital of ` 17,04,00,000/- (Previous Year `
17,04,00,000/-) consisting of 1,70,40,000 (Previous Year 1,70,40,000) Equity Shares of `
10/- each and these Equity Shares are presently listed and available for trading at
National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE).
Acknowledgments and Appreciation:
Your Directors take this opportunity to place on record their sincere gratitude for the
consistent cooperation and support received from the shareholders, Bankers, Channel
Partners and the Government Authorities.
Your Directors place on record their deep appreciation to the employees at all levels
for their hard work and dedication.
For and on behalf of the Board of Directors
Shammi Bansal
Chairman of the Meeting
DIN: 00138792
Place: Gurugram, Haryana
Dated: Tuesday, 5th September, 2023
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