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Tuesday, May 30, 2000

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Liberty Shoes EGM to decide on revamp

Girish Singhal

NEW DELHI, May 29

THE Haryana-based Liberty Shoes Ltd has called an extraordinary general meeting (EGM) of its shareholders on June 19 to seek their consent for certain specific businesses forming part of the company's restructuring plan.

``The plan includes acquisition of established brands by LSL from other companies within the Liberty group. It also envisages use of production facilities of other group companies on franchise basis by LSL for manufacturing products under the targeted br and umbrella,'' a company official told Business Line.

LSL has decided to enter into a formal agreement with other group companies in this regard once the resolution is approved by the company's shareholders at the June 19 EGM, the official said. However, he did not give the details regarding the brands to b e acquired and the proposed facilities to be used by LSL on franchise basis.

In the normal circumstance, such an approval would have been granted by the company's board itself, but since all the directors of the company are interested in the transactions, it was decided by the company to obtain shareholders' approval at the propo sed EGM.

The consent of shareholders will also authorise the company to obtain approval of the Union Government as required under Section 297 read with the provisions of Section 299 and 300 of the Companies Act, 1956.

The company is currently engaged in the manufacturing of various kinds of footwear at its production facilities situated at Liberty Puram, Karnal (Haryana). In order to become more competitive and increase its presence in the domestic as well as internat ional markets, the company recently launched a new five-year marketing policy which was implemented in the quarter ended March 31, 2000.

In the meanwhile, the board of directors of LSL has decided to extend the financial year of the company by three months from March 31 to June 30, 2000.

The company has reported a dismal financial performance for the 12 months ended March 31, 2000. While its net profit for the period has fallen by 8.10 per cent to Rs. 7.69 crores, the sales turnover has registered a fall of 6.95 per cent to Rs. 70.90 cro res as against a net profit of Rs. 8.38 crores and a sales turnover of Rs. 76.20 crores, respectively in the previous fiscal. The operating profit (profit before depreciation, interest and tax) for the 12 month period rose marginally to Rs. 13.66 crores (Rs. 13.42 crores).

For the fourth quarter ended March 31, 2000, the net profit fell by 44 per cent to Rs. 1.30 crores (Rs. 2.34 crores) and the PBDIT by 37.5 per cent to Rs. 2.50 crores (Rs. 4 crores). The sales turnover during the quarter registered a fall of 15.35 per ce nt to Rs. 18.14 crores (Rs. 21.43 crores).

The company has declared an interim dividend of 40 per cent for 1999-2000.

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