Celebrity Fashion Annual Report 2010

1
Celebrity Fashions Limited

21
st
ANNUAL REPORT 2009-2010
2
Contents Page No
Board of Directors 3

Manufacturing Facilities 4
Notice Convening AGM 5
Section 302 Notice 7
Directors Report 8
Report on Corporate Governance 16
Management Discussion and Analysis 23
Auditors Report 26
Annexure to Auditors Report 27
Balance Sheet 29
Proft & Loss Account 30

Schedules forming part of the accounts 31
Cash Flow Statement 45
Balance Sheet Abstract 46
Subsidiary Companies 47
3
Board of Directors

Mr. V. Rajagopal Chairman and Managing Director
Mrs. Rama Rajagopal Executive Director
Mr. S. Surya Narayanan Executive Director
Mr. P.S. Raman
Mr. N.K. Ranganath
Mrs. Nidhi Reddy
Company Secretary
Mr. G. Balaji
Management Team
Executive Vice-President
Mr.Suresh Rajagopal Strategic Sourcing & Marketing
Chief Executive Offcer
Mr. Charath Narasimhan Domestic - Indian Terrain
Senior Vice - Presidents
Mr.John Dulip Kumar Merchandising
Mr.J.V.J.Franklin Operations
Mr.Amitabh Suri Marketing & Product Design & Development
General Managers
Mr.V.Sridharan Finance
Mr.Selin Reubalin C.C Operations
Mr.A.M. Gopinath Commercial
4
REGISTERED OFFICE & CORPORATE OFFICE
SDF - IV & C2, 3rd Main Road,
MEPZ - SEZ, Tambaram, Chennai - 600 045.
LEGAL ADVISORS
Dua Associates,
Chennai - 600 017.
STATUTORY AUDITORS
M/s. Anil Nair & Associates,
Egmore, Chennai - 600 008.
M/s. CNGSN & Associates,
T.Nagar, Chennai - 600 017.
INTERNAL AUDITORS
M/s. R.Venkatakrishnan & Associates,
R.A.Puram, Chennai - 600 028.
BANKERS
State Bank of India,
Chennai - 600 001
HDFC Bank Limited,
Chennai - 600 002
MEDIA SOLUTIONS PARTNER
Bennett Coleman & Co Ltd
(Times of India Group)
Times House, 126/127, Chamiers Road,
Nandanam, Chennai - 600 035
MANUFACTURING FACILITIES
No.72/1,Senneerkuppam Village,
Poonamallee High Road,
Poonamallee
Chennai 600 054.
SDF- IV, 3
rd
Main Road,
MEPZ - SEZ, Tambaram,
Chennai 600 045.
No. 70/2 & 3A, Selaiyur Agaram Road,
Thiruvanchery, Chennai 600 073.
No.208, Velachery Tambaram Road,
Narayanapuram,
Pallikaranai, Chennai 601 302.
Warehouse
Narayanapuram,Pallikaranai,
Chennai 601 302.
114/2, Anna Salai Extension,
Nagalkeni, Chrompet,
Chennai 600 044.
Washing Plant
No.70/2 & 3A, Selaiyur Agaram Road,
Thiruvanchery, Chennai 600 073.
SDF- IV, 3
rd
Main Road,
MEPZ - SEZ, Tambaram,
Chennai 600 045.
5
NOTICE CONVENING THE ANNUAL GENERAL MEETING
NOTICE is hereby given that the Twenty First Annual General
Meeting of Celebrity Fashions Limited will be held on Friday
the 24th September, 2010 at 10.30 A.M. at the Registered
Offce of the Company, situated at SDF-IV & C2, 3rd Main
Road, MEPZ-SEZ, Tambaram, Chennai 600 045 to transact
the following businesses:
ORDINARY BUSINESS
1. To receive, consider and adopt the audited Proft and
Loss account for the year ended 31st March, 2010 and
the Balance Sheet as on that date together with the
report of the Directors and Auditors thereon.
2. To appoint a Director in place of Mr.N.K.Ranganath, who
retires by rotation and being eligible offers himself for
reappointment.
3. To appoint a Director in place of Mrs.Nidhi Reddy, who
retires by rotation and being eligible offers herself for
reappointment.
4. To appoint M/s. Anil Nair & Associates, Chartered
Accountants, Chennai and M/s. CNGSN & Associates,
Chartered Accountants, Chennai as Joint Auditors of the
Company and to fx their remuneration.
SPECIAL BUSINESS
5. To consider and if thought ft, to pass with or without
modifcation(s) the following resolution as an
Ordinary Resolution:
RESOLVED THAT pursuant to the provisions of sections
198, 269, 309 and other applicable provisions, if any,
of the Companies Act 1956 (including any statutory
modifcation(s) or re-enactment thereof, for the time
being in force) read with Schedule XIII of the said
Act, the company hereby accords its approval to the
reappointment of Mr.V.Rajagopal as the Managing
Director of the Company for a period of fve years effective
from 1st October, 2010 to 30th September, 2015 (both
days inclusive).
RESOLVED FURTHER THAT the consent of the
members be and is hereby accorded for the payment
of remuneration as set out in the explanatory statement
annexed hereto and forming part of this Notice, to
Mr.V.Rajagopal, Managing Director of the company for
the period from 1st October, 2010 to 30th September,
2015 (both days inclusive).
RESOLVED FURTHER THAT the Board of Directors of
the Company be and are hereby authorized to fx and
vary remuneration and perquisites including monetary
value thereof to the extent the Board of Directors may
consider appropriate and as may be considered and
permitted or authorized in accordance with the provisions
of the Companies Act, 1956 for the time being in force
and any statutory modifcations or reenactment thereof,
and/or any rules or regulations framed thereunder.
Date : 13-08-2010 For and On behalf of the Board
Place: Chennai
G.BALAJI
Company Secretary
NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE INSTEAD OF HIMSELF AND A PROXY NEED
NOT BE A MEMBER OF THE COMPANY. Proxies, in
order to be effective must be received at the companys
Registered Offce not less than 48 hours before the
meeting. Proxies submitted on behalf of Companies,
Societies and Partnership frms etc must be supported
by appropriate resolution/authority as applicable issued
on behalf of the nominating organization.

2. The Register of members and transfer books of the
Company will be closed from Monday, the 20th
September, 2010 to Friday the 24th September, 2010
(both days inclusive).

3. In terms of Clause 49 of the Listing Agreement
entered with Stock Exchanges, a brief resume of the
directors proposed to be reappointed in this meeting,
nature of expertise in specifc functional areas, their
other directorship, committee membership and their
Shareholdings in the Company are annexed to this
notice.
ANNEXURE TO THE NOTICE CONVENING THE
ANNUAL GENERAL MEETING
Additional information on directors seeking re-election at
the Annual General Meeting
Mr.N.K.Ranganath
Profle and expertise in specifc functional areas
Born on 13th March 1956, Mr.N.K.Ranganath is a mechanical
engineer and holds a post graduate degree in Business
Management from XLRI.
Mr.N.K.Ranganath is Managing Director of M/s.Grundfos
Pumps India Private Limited. He had acquired valuable
knowledge, experience and expertise in sales, marketing,
fnance, production and human resources disciplines.
He was inducted as a director by the Board on 6th September
2005. He does not hold any share in the Company.
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Mrs.Nidhi Reddy
Profle and expertise in specifc functional areas

Born on 13th April 1956, Mrs.Nidhi Reddy holds a Master
degree in Economics from Delhi School of Economics and a
Post Graduate diploma in Personnel Management and
Industrial relations from XLRI.
Mrs.Nidhi Reddy is the sole proprietrix of Nidhi Reddy
Consultants. She specializes in the feld of human resource
management, behavioral training and recruitment
She was co-opted as a director by the Board on 6th September
2005. She is not a director of any other company and does not
hold any share in the Company.
ANNEXURE TO THE NOTICE
Explanatory Statement pursuant to section173(2) of the
Companies Act 1956
Item No.5
The Board of Directors of the Company at their meeting
held on 13th August, 2010 have reappointed Mr.V.Rajagopal
as Managing Director of the Company for a period of fve
years effective from 1st October, 2010 to 30th September,
2015. The remuneration committee of the Board of Directors
had approved in its meeting held on 13th August, 2010 by
its resolution the terms of the remuneration payable to
Mr.V.Rajagopal and the same was in accordance with and
within the ceiling of maximum remuneration permitted under
Section II (1) (A) of Part II of Schedule XIII to the Act. The
terms of appointment and disclosures pursuant to clause 49
of the listing agreement are given below:
i) Tenure
For a period of 5 years with effect from 1st October, 2010 to
30th September, 2015
ii) Salary
Basic salary Rs.2,00,000/- per month.
iii) Medical Benefts
Suitable Mediclaim Policy for hospitalisation for himself
and family. Reimbursement of all actual medical expenses
for himself and family to the extent not reimbursed under
Mediclaim Policy
iv) Telephone
Telephone, Telefax and other communication facilities at
residence at Companys cost.
v) Automobile
He shall be entitled to a fully maintained Company car for
companys business.
vi) Reimbursement of expenses
He shall be entitled to the reimbursement of all actual expenses
or charges, including travel, entertainment and other out of
pocket expenses incurred by him for and on behalf of the
Company, in furtherance of its business and objects.
vii) Sitting Fees
He will not be entitled to any sitting fees for attending the
meetings of the Board or of any committee thereof.
Disclosure as per Clause 49 of the Listing Agreement
(a) Profle of Mr. V. Rajagopal
Mr. V.Rajagopal aged 53 is a B.A. Honors in Economics
from Sri Ram College of Commerce, New Delhi and a Post
Graduate in Master of Arts from Bangalore University.
He joined the Indian Police Service during the year 1979
and he served the nation for a decade. During the year
1988, Mr. V.Rajagopal quit the Indian Police Service and
entered into the business of garment exports. He is an
avid reader and a sports person. Was a member of a
Social Organisation called Round Table for 8 years till
1998. Was associated in organizing the International
conference of Round Tablers in 1996, in Chennai in the
capacity as Vice-Chairman of the conference.
He is currently a member of the young Presidents
Organization, Madras Chapter.
(b) Expertise in specifc functional areas
Managerial, Financial, Marketing and Administration.
(c) Directorships of other Companies and the
membership of Committees of the Board
Mr. V.Rajagopal is the director of the following
companies:
Celebrity Clothing Limited : Director
Indian Terrain Fashions Limited : Managing Director
Membership of the Committees of the Board
Shareholders Grievance
Committee : Member
Mr.V.Rajagopal holds 41,07,318 equity shares in the
company.
None of the Directors except Mr.V.Rajagopal and Mrs. Rama
Rajagopal are interested or concerned in the proposed
resolution.
Date : 13
th
Aug, 2010 For and on behalf of the Board
Place : Chennai
G.BALAJI
Company Secretary
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Section 302 Notice
To
All Members
Sub: Memorandum under Section 302 of the Companies
Act, 1956
I. Reappointment of Mr.V.Rajagopal as Managing
Director
The Board of Directors of the Company at its meeting
held on 13th August, 2010 reappointed Mr.V.Rajagopal
as Managing Director of the Company for a period of
fve years from 1st October, 2010 to 30th September,
2015 subject to the approval of the shareholders at the
ensuing 21st Annual General Meeting.
Mr. V. Rajagopal aged 53 is a B.A. Honors in Economics
from Sri Ram College of Commerce, New Delhi and a Post
Graduate in Master of Arts from Bangalore University.
He joined the Indian Police Service during the year 1979
and he served the nation for a decade. During the year
1988, Mr. V.Rajagopal quit the Indian Police Service and
entered into the business of garment exports. He is an
avid reader and a sports person. Was a member of a
Social Organisation called Round Table for 8 years till
1998. Was associated in organizing the International
conference of Round Tablers in 1996, in Chennai in the
capacity as Vice-Chairman of the conference.
Mr.V.Rajagopal shall have the overall responsibility of
managing the affairs of the Company, in particular the
commercial and marketing activities of the Company
subject to the supervision and control of the Board of
Directors.
The proposed re-appointment of Mr.V.Rajagopal as
Managing Director is subject to the approval of the
shareholders by way of ordinary resolution at the ensuing
21st Annual General Meeting of the Company.
Mrs. Rama Rajagopal being the spouse of Mr.V.Rajagopal
is concerned or interested in the aforesaid re-appointment
as Managing Director.
Pursuant to Section 302 of the Companies Act 1956, the
abstract of the terms of reappointment and remuneration
of Mr.V.Rajagopal is furnished herewith.
For Celebrity Fashions Limited
G.Balaji
Company Secretary
Place: Chennai
Date: 13-08-2010
Abstract of the terms of reappointment and remuneration
of Mr.V.Rajagopal as Managing Director
(Pursuant to section 302 of the Companies Act, 1956)
1 Tenure 1st October, 2010 to 30th September, 2015
2 Salary Rs.2,00,000/- per month
3 Medical benefts Reimbursement of all actual medical expenses for himself and family to the extent not
reimbursed under Mediclaim Policy
4 Telephone Telephone, telefax and other communication facilities at residence at Companys cost.
5 Automobile He shall be entitled to a fully maintained company car for companys cost.
6 Reimbursement of expenses He shall be entitled to the reimbursement of all actual expenses or charges, including travel,
entertainment and other out of pocket expenses incurred by him for and on behalf of the
Company, in furtherance of its business and objects.
7 Sitting fees He will not be entitled to any sitting fees for attending the meetings of the Board or of any
Committee thereof.
8 Power to vary The Board shall have power to vary or enhance the remuneration from time to time at its
discretion on the recommendation of the Remuneration Committee within the limits specifed in
Schedule XIII to the Companies Act, 1956.
For Celebrity Fashions imited
G.Balaji
Company Secretary
Place : Chennai
Date: 13-08-2010
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Directors Report
Dear Shareholders,
Your Directors hereby present the 21st Annual Report along
with the Audited Statement of the Company for the year ended
31st March 2010.
Industry Outlook
The global policy stimulus has gone a long way in fnding an exit
to the Great Recession. The economic recovery is underway.
The Countrys GDP growth in the third quarter of 2009-10 stood
at 6.0% as against the growth of 6.2% registered in the same
quarter of the previous year. The GDP growth for the whole fscal
2009-10 was estimated to be 7.2%. Indias trade is observed to
recover from depression, which existed up to the later half of
2009. In the end of 2009 the exporters again reported to get
orders in good numbers. As per FICCI, the data from November
2009 was also seen to substantiate the same. In February
2010, exports rose by 34.0% as against the rise of 23.0%
in February, previous year.
Buoyed by a robust 8.6 % expansion in the fourth quarter,
the Indian economy witnessed a healthier growth of 7.4%
in 2009-10 as compared to the 7.2% estimated by the Central
Statistical Organization (CSO) earlier, primarily owing to a
stimulus aided rebound in manufacturing coupled with better
than anticipated performance by the farm sector. With this
India has maintained its position as the second fastest growing
economy after China which posted an 11.9% growth in the
same quarter.
Exports jumped by 36.2% to $16.88 billion in April, showing clear
signs that the export sector was making a strong comeback.
After continuous decline for 13 months from October 2008,
exports turned positive in November 2009 and since then
shipments have followed the growth path. Indian Rupee in
February March 2010 traded Rs.45 levels vis-a-vis the level in
May 2009 at Rs.49-50. The sharp appreciation in Indian Rupee
is an obvious cause of concern for the Indian exporters.
Indian textile industry is on revival path with production of fbre,
yarn and cloth showing positive growth during April to November
2009. The production of cloth increased by 10.8 percent, man-
made fbre and yarn production grew by 21.3% & 11.8%,
respectively, and the total spun yarn production increased by
5.1% during the period.
The second quarter of the current fscal saw a strong revival in
sales growth and weaving companies posted a sales growth
of 19.7%, spinning industry 8.9%, man-made Fibre industry
15.7% and readymade garments industry 14.2%. The Sector
witnessed a favorable investment climate since last quarter of
last fscal. For the government, however the litmus test now
would be whether the economic recovery continues to hold
even after partial roll back of stimulus measures.
Garment exports formed 45 percent of total textile exports
from the country. While in other industries, the third generation
entrepreneurs expanded the horizon further, the same was
not the case with garment industry in India. Fragmentation
and absence of vertical integration affected the industry
most. Establishment of clusters, common facility centres and
development of brands held the key to success. If sustained
efforts are made by the industry, the country can capture
additional US$ 1.5 billion textile and clothing export in US
market, which will also help to generate additional employment
opportunities.
The domestic apparel market in India has shown a signifcant
growth in the past by registering a Compounded Annual Growth
Rate (CAGR) of 13%.
Despite the recent demand slump, the domestic market is
expected to grow at around 9-10% in the next 5 years. Market
is moving away from the traditional segmentation to a much
deeper and wider segmentation based on consumer needs.
Indian domestic apparel market is currently pegged at between
Rs 120-150 billion, with several high potential demographics
still untapped such as teens, extra large sizes and children,
among others.
As per the CSO data, the countrys per capita income stood at
Rs.44,345 in 2009-10. It was higher by 10.5 % over Rs.40,141
a year ago. This means the potential buying capacity will go up
in the domestic market.

Financial Highlights Rs. In Crs

FY 2009-10 FY 2008-09
Income From operations 294.09 230.04
Gross Proft / (Loss)
before interest and
depreciation
8.37 (89.27)
Interest 18.98 21.04
Proft / (Loss) before
depreciation and tax
(10.61) (110.31)
Depreciation 9.94 8.74
Proft / (Loss) before
Extra-Ordinary Income
(20.56) (119.05)
Extra-Ordinary Income 8.33 -
Proft / (Loss) before tax (12.23) (119.05)
Provision for Taxation 0.29
Proft / (Loss) after tax (12.23) (119.34)
Balance brought forward
from previous year
(122.40) (3.06)
Balance carried to
Balance Sheet
(134.63) (122.40)
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Operational Highlights
The Income from operations has gone up by Rs.64.05 crs as
compared to the previous year, an increase of 27.8% than
the previous year. EBIDTA for the year is at Rs.8.37 crs (+ve)
as against Rs. 89.27 crs (-ve) in the previous year. The loss
for the year stood at Rs.12.23 crs after accounting for extra-
ordinary item of Rs.8.33 crs of income as against the loss of
the Rs.119.34 crs recorded in the previous year. The Company
has ended the fourth quarter of the year on a high note with a
Proft after Tax of Rs.1.64 crs.
The Companys both the divisions, Exports and Domestic, have
performed reasonably well this year with Exports recording
over 37% growth over the previous year and domestic division,
Indian Terrain with 8% increase in turnover. Revenues from
Exports stood at over Rs.214 crs and Indian Terrain at Rs.80
crs.
Exports Division has recorded signifcant improvements in
terms of productivity in operations. The fall in Rupee against
the USD until the third quarter of the fnancial year has helped
the Exports Market to swing back. But with the European
Crisis, the Indian currency started its recovery in the last
quarter and has signaled cautious attitude for the Exporters.
The Company with an Expert Management Team in place is
exploring the various risk mitigation strategies and has also
initiated a Productivity Improvement Program which will serve
as a catalyst in achieving the set goals.
Indian Terrain has been performing extra-ordinarily and has
currently 53 Exclusive Branded Outlets. Indian Terrain has
recorded its fabulous presence in over 700 outlets across the
nation. The brand is just bullish in its expansion and has chosen
the franchisee route as its expansion strategy for administrative
and economic reasons. With the rise in per capita income,
Indian Terrain is staged well for its wide-spread expansion both
geographically and product wise.
The Company has let out its property at Chrompet to one of
the Hospitals from 1st April 2010 at a rental income of Rs.1.50
crs per annum. The rental income is being utilized to repay the
bank borrowings. Further the Company is also proposing to
sell / lease-out another property at Pallikaranai.
The Company has implemented various initiatives to improve
on the effciencies and control the losses. The Company
has recorded positive EBITDA and there are strong signs of
revival.
As at the year end, the accumulated losses have resulted in
substantial erosion of the networth of the Company. However,
in view of the various strategic initiatives that the Company is
exploring, the Company is confdent of being able to continue
and operate the business on a going concern basis and
accordingly the fnancial statements have been prepared on
the same lines.
The Company has not provided for the service tax liability of
Rs.103.36 lakhs, which has been qualifed by the auditors in
their report. The Company is confdent of getting stay order
against the levy as advised by the legal counsel.
Financial Re-structuring
The Company in view of the losses incurred has approached its
Bankers during September 2008 for re-structuring its corporate
debts. State Bank of India (SBI), the Companys primary
banker has sanctioned the fnancial re-structuring scheme on
23rd December 2008 with retrospective effect from 1st October
2008. HDFC Bank has sanctioned the re-structuring scheme
during June 2009 with retrospective effect from 1st April 2009.
The Re-structuring Scheme includes interalia carving out Clean
Term Loan from Working Capital Facilities, reduction of Interest
Rates on loans, re-scheduling of all Term Loan Repayments
with repayments starting from October 2011, deferment of
interest repayments through Funded Interest Termloan of 2
years from October 2008 / April 2009 (for SBI and HDFC).
The Company has to comply with conditions laid by the
Scheme which includes fresh infusion of additional equity by
the Promoters to the extent of Rs.5 crores, deployment of
funds in investments into Business, pledge of Equity Shares
of Promoters and Personal Guarantee of the Promoters viz.
Mr. V. Rajagopal, Chairman and Managing Director and Mrs.
Rama Rajagopal, Executive Director.
The Company has complied with the various conditions
stipulated by the Banks.
The other bankers have opted to enter into a One-Time
Settlement with the Company. Accordingly, the Company has
settled its other Bankers by paying 35% of the Outstanding
dues. The balance 65%, viz. 8.33 crs, of the total dues has
been written back as gain on One-Time Settlement and the
same has been classifed as Extra-Ordinary Income in the
Proft and Loss Statement.
Business Re-structuring Proposal
The Company is broadly segmented into Exports and Domestic
Divisions. Exports Division is further sub-divided into Tops and
Bottoms Division. The Domestic Division (brand Indian Terrain)
and Bottoms Division cater to different markets / products. The
10
company sensing the need to manage them as independent
entities for enhancement of their capabilities and to have
greater focus on their operations, has decided to hive-off the
divisions. Further, the hive-off would provide greater fexibility
to the entities, to meet the needs for carrying out its operations.
The hived-off divisions will realize true values when separated
and also will maximize their returns and effciency.

The Company has fled a scheme of arrangement with the
Honble High Court of Madras for the demerger of Indian
Terrain Division into Indian Terrain Fashions Limited (ITFL)
and transfer of Bottoms Division on a going concern basis to
Celebrity Clothing Limited (CCL), a 100% subsidiary, through
slump sale.
Further, the Company intends to fair value the assets of the
company and write off the accumulated losses against the
existing reserves. The Scheme of Arrangement is under
Section 391 to 394 read with Section 78 and Section 100 to
103 of the Companies Act.
Upon demerger, ITFL would be a listed entity, with its shares
listed in National Stock Exchange of India Limited (NSE) and
Bombay Stock Exchange Limited (BSE). Every shareholder of
the Company would be issued 2 shares of ITFL for every 7
shares held in the company. CCL will remain unlisted.
The Company has got the in-principal approval for the Scheme
from NSE and BSE. The Scheme was fled with the High Court
of Madras on 15th April 2010.
The Honble High Court of Madars vide its order dated 26th
April 2010 has ordered for a meeting of the Equity Share
holders of the Company on 9th June 2010. The entire Scheme
is subject to the approval of the Shareholders and Creditors of
the Company.
This scheme facilitates the entities involved, to explore new
avenues and would enhance the future growth prospects
for the people and organizations connected with them.
The restructuring activities under the scheme would unlock
shareholders value and create long term value for all the
stakeholders.
Finance and Accounts
The company has incurred Loss for the year and hence there
is no provision for Income Tax.
The company has not availed any credit facility from any
institutions during the year. The company has not accepted
any deposits within the meaning of Section 58A and 58AA of
the Companies Act 1956.
Share Capital
State Bank of India, in its Sanction letter dated 23rd December
2008 has stipulated that the Promoters will have to bring in Rs.5
crs in phases as contribution towards equity. Accordingly, the
promoters have brought in Rs.50 lakhs during March 2009.
The Company has gone for a preferential allotment of 2,94,118
equity shares at Rs.17.03 per share to one of the promoters,
Mr. V. Rajagopal during August 2009. The allotment was
approved by the Shareholders in the Annual General Meeting
held in July 2009.
Further, pursuant to ESOP Scheme, the Company has allotted
7,500 equity shares on conversion of options exercised by
employees.
Consequent to the above, the Share Capital of the Company
has increased by Rs.30.16 lakhs.
The promoters have brought in next tranche of their contribution
towards equity to an extent of Rs.25 lakhs and the same is
classifed under Share Application Money as on 31st March
2010. The promoters / directors have further brought in Rs.2.83
crs during April 2010 towards equity of the Company.
Dividend
In view of the business loss for the year, no dividend is being
recommended
Personnel
The Board wishes to place on record its appreciation to all
the employees in the Company for their sustained efforts and
contributions in the current Challenging Scenario.
Directors
The whole time Directors have been accorded approval for
payment of minimum remuneration under Section 198(4) read
with Section II of Part II of Schedule XIII of the Companies
Act, 1956, consequent to which the terms of appointment has
been fxed for 3 years effective from 1st April 2006. Due to
inadequacy of profts, the Board of Directors at its Meeting
held on 13th December 2007 approved on recommendation
of the Remuneration and Compensation Committee and as
approved by the Members in the Annual General Meeting held
on 28th August 2008, modifed the remuneration of the whole
time Directors of the Company with effect from 01st January
2008 as Rs.24.00 lakhs per annum for each of the whole time
11
Director as against Rs.42.00 lakhs per annum earlier.
Pursuant to Section 255 of the Companies Act, 1956, Mr.
N.K. Ranganath and Mrs. Nidhi Reddy, retire by rotation at
the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment.
Subsidiary companies
As required under Section 212 of the Companies Act, 1956, the
Annual Reports for the year 2009-2010 and Accounts for the
year ended on March 31, 2010, of the subsidiary companies
Indian Terrain Fashions Limited and Celebrity Clothing Limited
are attached.
Auditors
M/s Anil Nair & Associates, Chartered Accountants, Chennai and
M/s CNGSN & Associates, Chartered Accountants, Chennai,
the Joint Auditors of the Company, retire at the ensuing Annual
General Meeting and are eligible for re-appointment.
Corporate Governance Report and Management Discussion
and Analysis Statement
A report on Corporate Governance is attached to this Report as
also a Management Discussion and Analysis statement.
Particulars as per Section 217 of the Companies Act, 1956

A) Pursuant to the requirement of Section 217 (2AA) of the
Companies Act, 1956 and based on the representations
received, your Directors hereby confrm that:
i. In the preparation of the Annual Accounts for the year
ended 31st March 2010, the applicable Accounting
Standards have been followed and there are no material
departures;
ii. The Directors 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 fnancial year and of the proft or loss of the
Company for that period;
iii. The Directors have taken proper and suffcient care
for maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. The Directors have prepared the Annual Accounts on a
going concern basis.
B) The Particulars of employees, as required under Section
217 (2A) of the Companies Act, 1956 are given in a
separate statement attached to this Report and forms part
of it.
C) The information pursuant to Section 217 (1) (e) of the
Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules,
1988 is given below:
i. Conservation of Energy:
The operations of the Company are not energy-intensive.
However, wherever possible, the Company strives to
curtail the consumption of energy on a continuing basis.
ii. Technology absorption:
Not applicable.
iii. Foreign Exchange Earning and Outgo:
Total Foreign exchange
earned (FOB Value) Rs.20,827.75 lakhs

Total Foreign exchange
outgo Rs. 6,966.85 lakhs
Employee Stock Option Plan
The particulars of ESOP Scheme 2005, ESOP 2007 and ESOP
2007 (2) which are provided as per the SEBI ESOP Guidelines,
forms part of this report.
Appreciation
The Directors are sincerely thankful to you the esteemed
shareholders, customers, business partners, fnancial /
investment institutions and commercial banks for the faith
reposed and valuable support provided by them in the
Company and its Management. The Directors wish to place on
record the co-operation extended and the solidarity shown by
the employees in assisting the organization to control its losses
and contributing for a good turnaround.

For and on Behalf of the Board

V Rajagopal
Chairman & Managing Director

Place:Chennai
Date : 04-06-2010
12
ANNEXURE TO THE DIRECTORS REPORT
Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 and forming part of the Directors Report for the year ended March 31, 2010
Name Designation Qualifcation Age
Date of
Joining
Experience in
years
Gross
Remuner-
ation (Rs. in
lakhs)
Previous
Employer
V.Rajagopal
Chairman and
Managing director
M.A., I.P.S 53 28.04.1988 32 24.00
Indian
Police
Service
Rama Rajagopal Executive Director M.A. 53 04.01.1994 15 24.00 -
S.Surya
Narayanan
Executive Director B.Com, FCA 45 01.07.1996 22 24.00
Manager
- Finance,
Harita
Finance
Limited
Suresh Rajagopal
Executive Vice
President - Sourcing
B.A.
Economics
59 01.04.2000 36 24.00
Marketing -
Czech
Republic
Charath
Narsimhan
Chief Executive Offcer
Domestic Division
B.Tech,
MBA
37 07.11.2005 14 24.00
General
Manager
- Sales &
Marketing,
Raymond
Apparel
Limited
Notes :
1. Remuneration comprises basic salary, allowances, retirement benefts and taxable value of perquisites.
2. Nature of employment - The above employees are whole time employees of the Company except Mr. V. Rajagopal,
Mrs. Rama Rajagopal, Mr. S .Surya Narayanan whose employment are contractual in nature.
3. Mr. V. Rajagopal, Chairman and Managing Director and Mrs. Rama Rajagopal, Executive Director are related to each
other.
4. Mr. Suresh Rajagopal, Executive Vice President is related to Mr. V. Rajagopal, Director of the Company.
5. None of the employees own more than 2% of the shares of the Company as on March 31, 2010 except the promoter
directors.
13
ANNEXURE TO THE DIRECTORS REPORT
Disclosure under SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
Employees Stock Option Plan 2005 In 2005, the Company has introduced Employee Stock option plan 2005 in order
to motivate and retain the employees and details of which are appended below:
Particulars ESOP 2005 ESOP (2) 2005
Options granted 1,50,000 options 20,000 options
The Pricing formula 30% of the fair Market Value 16.67% of the fair market value
Options Vested 96,800 Options Nil
Options Exercised 53,000 Options Nil
Total number of shares arising as a
result of exercise of options
1,50,000 options 20,000 Equity Shares
Options Lapsed 43,800 Options Nil
Variation of terms of options Nil Nil
Money realised by exercise of options Rs. 15,90,000 /- Nil
Total number of options in force 53,200 options 20,000
Employee wise details of
options granted to
a) Senior Managerial Personnel
b) Employees receiving 5% or more of
the total number of options granted
during the year
c) Identifed employees who were
granted option during any one year equal
to or exceeding 1% of the issued capital
of the company at the time of grant
52,000 options, (details provided
below)
86,000 options (details provided below)
Nil
20000 options to Charath
Narsimhan
CEO - Domestic Division
Nil
Diluted EPS pursuant to issue of shares
on exercise of options
calculated in accordance with AS 20
The Options are antidilutive as the EPS
is in negative
The Options are antidilutive as the
EPS is in negative
Senior Management (under ESOP 2005)
S. Surya Narayanan, Executive Director & CFO 25,000
Suresh Rajagopal, Executive Vice-President 21,000
V.V. Naresh, GM - Finance & Company Secretary 6,000
14
Employees receiving in excess of 5% - (under ESOP 2005)
S. Surya Narayanan 25,000 16.67%
Suresh Rajagopal 21,000 14.00%
Josiah Franklin 20,000 13.33%
Amitabh Suri 20,000 13.33%

Employees Stock Option
During the fnancial year 2006 - 07, the company has formulated two Schemes viz., Employees Stock Option Plan 2007
(ESOP 2007) and Employees Stock Option Plan (2) 2007 (ESOP (2) 2007) in accordance with the provisions of SEBI
(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, after obtaining the approval of
the shareholders and the details of the same has been furnished below:
Particulars ESOP 2007 ESOP (2) 2007
Options granted 1,60,000 options 1,80,000 Options
The Pricing formula Rs.75/- per option
Pricing as per SEBI Preferential
guidelines
Options Vested Nil Nil
Options Exercised Nil Nil
Total number of shares arising as a
result of exercise of options
1,60,000 Equity Shares 1,80,000 Equity Shares
Options Lapsed 1,20,000 Options 1,00,000 Options
Variation of terms of options Nil Nil
Money realised by exercise of options Nil Nil
Total number of options in force 40,000 options 80,000 options
Employee wise details of options granted to
a. Senior Managerial Personnel
b. Employees receiving 5% or more of the total
number of options granted during the year
1,60,000 options, (details provided
below)
160,000 options (details provided
below)
1,60,000 options, (details provided
below)
1,75,000 options (details provided
below)
c. Identifed employees who were granted option
during any one year equal to or exceeding 1% of the
issued capital of the company at the time of
grant
Nil Nil
Diluted EPS pursuant to is-
sue of shares on exercise of options
calculated in accordance with AS 20
The Options are antidilutive as the EPS
is in negative
The Options are antidilutive as the
EPS is in negative

Senior Management (under ESOP 2007)
Sandeep Walia, CEO - Exports Division 80,000
Charath Narsimhan, CEO - Domestic Division 80,000
15
Employees receiving in excess of 5% - (under ESOP 2007)
*Sandeep Walia, CEO - Exports Division 80,000 50%
**Charath Narsimhan, CEO - Domestic Division 80,000 50%
* 80,000 Stock options granted to Mr.Sandeep Walia stands cancelled subsequent to his resignation in the fnancial year
2007-08.
** Out of 80,000 options granted to Mr.Charath Narasimhan, 40,000 options have not been granted since the required
parameters have not been met.
Senior Management (under ESOP (2) 2007)
*Sandeep Walia, CEO - Exports Division 20,000
John Dulip Kumar, GM - Merchandising 10,000
*V.K.Vijayaraghavan, VP - Finance & Commercial 15,000
*Sonya Arora, GM - Merchandising 10,000
*S.Saravanan, GM - Projects 10,000
*S.Shyam Sundar, GM - Human Resource 10,000
V.V.Naresh, GM - Finance & Company Secretary 15,000
*N.Ramakrishnan, GM - Sourcing 5,000
V.Sridharan, GM - Finance 10,000
Amitabh Suri, Senior VP- Marketing & Product Development 15,000
A.M.Gopinath, GM - Commercial 10,000
*Supratim Choudury, GM - Product Design & Development 10,000
*Amit Rai, GM - Operations 10,000
J.V.Josiah Franklin, Senior VP - Operations 10,000
*1,00,000 options granted to Sandeep Walia, Vijayaraghavan, Sonya Arora, S.Saravanan, S.Shyam Sundar, N.Ramakrishnan,
Supratim Choudury, Amit Rai, Tapan Kumar Das stands lapsed, subsequent to their resignation.
Employees receiving in excess of 5% - (under ESOP (2) 2007)
Sandeep Walia, CEO - Exports Division 20,000 11.11%
John Dulip Kumar, GM - Merchandising 10,000 5.55%
V.K.Vijayaraghavan, VP - Finance & Commercial 15,000 8.33%
Sonya Arora, GM - Merchandising 10,000 5.55%
S.Saravanan, GM - Projects 10,000 5.55%
S.Shyam Sundar, GM - Human Resource 10,000 5.55%
V.V.Naresh, GM - Finance & Company Secretary 15,000 8.33%
V.Sridharan, GM - Finance 10,000 5.55%
Amitabh Suri, Senior VP- Marketing & Product Development 15,000 8.33%
A.M.Gopinath, GM - Commercial 10,000 5.55%
L.Visalakshi, AGM - Finance 10,000 5.55%
Tapan Kumar Das, AGM - Finance 10,000 5.55%
Supratim Choudury, GM - Product Design & Development 10,000 5.55%
Amit Rai, GM - Operations 10,000 5.55%
J.V.Josiah Franklin, Senior VP - Operations 10,000 5.55%
_______________________________________________________________________________________________
DECLARATION
As per provisions of clause 49 of the Listing Agreement entered with the Stock Exchanges, I hereby declare that all the
Board Members and Senior Managerial Personnel have affrmed the compliance of the Code of Conduct of the Company for
the fnancial year ended 31st March 2010.
Date : 04-06-2010 V Rajagopal
Place: Chennai Chairman and Managing Director
16
REPORT ON CORPORATE GOVERNANCE
Companys Philosophy on Code of Corporate
Governance Celebrity Fashions Limited focuses
Corporate Governance as a key driver of sustainable
corporate growth and a powerful medium to achieve the
companys goal of maximizing value for all its stakeholders.
A sound corporate governance strengthens investors
trust and enables the company to fulfll its commitment
towards the customers, employees and the society in
general. Celebrity Fashions Limited believes that the
primary objective is to create and adhere to a corporate
culture of conscience and consciousness, empowerment,
accountability and independent monitoring.
The company philosophy is based on the key elements
in corporate governance viz., transparency, disclosure,
supervision and internal controls, risk management,
internal and external communications, high standard of
safety, health, accounting fdelity, product and service
quality. The company has a strong legacy of fair and
ethical governance practices.
BOARD OF DIRECTORS
The Board of Directors of the Company possess highest
personal and professional ethics, integrity and values,
and provides leadership, strategic guidance and objective
judgement on the affairs of the company. The Board is fully
aware of its fduciary responsibilities and is committed to
represent the long-term interest of the Stakeholders. The
Board adopted the principles of corporate governance
and remains informed, participative, and independent to
implement its broad policies and guidelines and has set
up adequate review procedures.
The Key to good corporate governance is the optimum
combination of the executive and non-executive directors
on the board and the extent of their independence. The
Board consists of six members with knowledge and
experience in diverse felds and professionally acclaimed
to understand their role in addressing the issues raised by
the management. The day-to-day affairs of the company
are managed by the Managing Director and Executive
Directors under the supervision of the Board.
Composition of the Board
The Board has constituted in the manner, which will result
in an appropriate mix of Executive / non executive and
independent directors to ensure proper governance and
Management.
During the fnancial year 2009-10, the Board consisted
of six Directors. Mr.V.Rajagopal is the Chairman and
Managing Director and Mrs. Rama Rajagopal and Mr.
Surya Narayanan are the Executive Directors.
Out of six Directors, three directors viz., Mr.P.S.Raman,
Mr.N.K.Ranganath and Mrs. Nidhi Reddy are non executive
Independent Directors. The number of independent
directors on the Board is half of its strength. Thus the
Company meets the requirements of composition of the
Board according to the Listing agreement.
Board Meetings
During the fnancial year 2009-10, the Board met 7 times
on 29th April 2009, 26th June 2009, 31st July 2009, 30th
October 2009, 3rd November 2009, 28th January 2010
and 3rd March 2010.
Details of attendance of each director at the Board
Meetings and in the last Annual General Meeting and
number of directorships / committee memberships held
by them as on 31st March 2010 are as follows:
Name of the Director Category Attendance
at the Board
Meetings
Attendance
at the Last
AGM
Number of
other Director-
ships held**
Other Committee
Membership ***
Member Chairman
Mr. V. Rajagopal
Chairman and
Managing Director
Executive / Promoter 6 Yes 2 1 -
Mrs.Rama Rajagopal
Executive Director
Executive / Promoter 4 Yes 2 - -
Mr.S.Surya Narayanan
Executive Director
Executive 7 Yes 3 2 -
Mr.P.S.Raman
Director
Independent Non
Executive
2 No 1 2 1
Mr.N.K.Ranganath
Director
Independent
Non Executive
6 Yes 1 2 1
Mrs.Nidhi Reddy
Director
Independent
Non Executive
5 Yes - - -
17
Notes:
** The Directorship held by the Directors, as mentioned
above, includes the directorship held in Private Limited
Companies
*** Only membership of audit committee and shareholders
/ investors grievance committee has been taken into
consideration.
Access to information and updation to Directors
The required information as enumerated in Annexure 1A
to Clause 49 of the Listing Agreement is made available to
the Board of Directors for discussions and consideration
at Board Meetings. The Board also reviews signifcant
strategic, fnancial, operational and compliance matters in
the meeting.
COMMITTEES OF THE BOARD
The Board in order to be effective had constituted an Audit
Committee, a Shareholder / Investor Grievance Committee
and a Remuneration and Compensation Committee.
AUDIT COMMITTEE
The Audit Committee plays an important role in fnancial
reporting of performance and review of internal control
procedure.
The Company consists of qualifed and independent Audit
Committee. The committee consists of three members
Mr.N.K.Ranganath, Non-executive independent director as
its Chairman, Mr.S.Surya Narayanan and Mr.P.S.Raman
as its members. All the members of the Committee have
excellent fnancial and accounting knowledge.
The role of the Audit Committee, in brief, is to review
fnancial statements, internal controls, accounting policies
and internal audit. The quarterly fnancial results are placed
before the audit committee for its review, suggestions
and recommendation(s), before taking the same to the
Board. The Committee also reviews the management
discussion and analysis of fnancial conditions and results
of operations, related party transactions.
The Committee met 5 times on 29th April 2009, 26th
June 2009, 31st July 2009, 30th October 2009 and 28th
January 2010 during the fnancial year ended 31st March
2010, wherein all the Committee members were present
for all the meetings.

REMUNERATION AND COMPENSATION COMMITTEE
The Board has set up Remuneration and Compensation
Committee with a role to determine the remuneration
payable to whole time directors and key managerial
personnel of the Company, to recommend to the Board
the appointment / reappointment of the Executive / Non-
executive directors, to grant stock options and for framing
of policies to attract, motivate and retain personnel.

The Committee consists of three non-executive
independent directors, Mrs.Nidhi Reddy as its Chairman,
Mr.P.S.Raman and Mr.N.K.Ranganath as its members.
During the year ended 31st March 2010, the Remuneration
and Compensation Committee has not met.

Remuneration Policy
The Remuneration policy of the company has been
structured to match the market trends of the industry,
qualifcations and experience of the employee and
responsibilities handled by them.
Remuneration to Directors
The Non executive directors do not draw any remuneration
from the Company other than the sitting fees for attending
each meeting of the Board and committees thereof. The
Company pays sitting fees of Rs. 2,500/- to all the non-
executive directors for attending each meeting of the
Board and Rs.1,500/- for each meeting of its committee
thereof which is within the limits prescribed under the
Companies Act, 1956.

During the fnancial year 2009-10, the sitting fee paid
to Non - Executive Directors were as under:
Name of the
Director
Sitting Fees (includes the fees
paid for Committee Meetings)
Rs.
Mr. P.S.Raman 5,500
Mr. N.K.Ranganath 10,500
Mrs. Nidhi Reddy 5,000

There are no other particular pecuniary relationships or
transactions of the non-executive directors vis--vis of
the Company.

The Company pays remuneration by way of Salary,
perquisites and allowances to the Managing Director
and Executive Directors. Details of the remuneration and
perquisites paid to the whole time directors are as under:
18
connected with share transfers, issue of duplicate share
certifcates, etc. The Committee also looks into the redressal
of investors grievances pertaining to transfer of shares and
dematerialization, non-receipt of balance sheet, non-receipt
of declared dividends, etc.

The Committee consists of three members and
Mr.P.S.Raman, Non executive independent director as its
Chairman and Mr.V.Rajagopal and Mr.S.Suryanarayanan
as its members. During the year, the committee met once
on 6th April 2009, wherein all the members of the committee
were present.
Mr.V.V.Naresh, GM - Finance and Company Secretary was
appointed as Compliance Offcer by the Board of Directors
at their meeting held on 06th September, 2005 pursuant to
Clause 47(a) of the Listing Agreement.
Subsequent to his resignation on March 31, 2010, Mr. S.
Surya Narayanan, Executive Director and Chief Financial
Offcer has assumed the role of Compliance Offcer.
The Board has approved the appointment of Mr. G. Balaji as
Company Secretary in its meeting held 4th June 2010.
The Company received one complaint during the year and
the same was resolved. There were no complaints pending
to be resolved as on 31st March 2010.
Subsidiary Companies
The Company has foated two subsidiaries during the
year Indian Terrain Fashions Limited (ITFL) which was
incorporated on 29th September 2009 and Celebrity
Clothing Limited (CCL), which was incorporated on 30th
September 2009. The Company holds 98.40% of the
shares in ITFL and CCL is a 100% wholly owned subsidiary.
Both ITFL and CCL were incorporated as in lieu of the Re-
structuring Scheme the Company is proposing and both
the Companies have not earned revenues nor incurred any
expenditure (other than preliminary expenditure) for the
year ended 31st March 2010.
Clause 49 of the listing agreement defnes a material
non-listed subsidiary company as an unlisted subsidiary,
incorporated in India, whose turnover or net worth (i.e.
paid up capital and free reserves) exceeds 20% of the
consolidated turnover or net worth respectively, of the listed
holding company and its subsidiaries in the immediately
preceding accounting year. Accordingly, ITFL and CCL are
not material non-listed subsidiary companies.
General Body Meetings
The details of the last three Annual General Meetings
(AGMs) held were as under:
Name of the Director Salary
(Rs. in
Lakhs)
Retirement
Benefts
Total
(Rs. in
Lakhs)
Mr.V Rajagopal
Chairman and
Managing Director
24.00 Nil 24.00
Mrs.Rama Rajagopal
Executive Director
24.00 Nil 24.00
Mr.S.Surya Narayanan
Executive Director
24.00 Nil 24.00
In addition to the above, the whole time directors shall
be entitled to suitable mediclaim policy for hospitalization
and reimbursement of all actual medical expenses for
themselves and their family to the extent not reimbursed
under Mediclaim policy. They shall be entitled to telephone,
fax and other communication facilities at their residence
at companys cost. They are entitled to a fully maintained
company car for companys business and the company
shall pay the cost of vehicle, inclusive of driver. They shall
also be entitled to reimbursement of all actual expenses
or charges, including travel, entertainment and other out
of pocket expenses incurred by them for and on behalf of
the Company, in furtherance of its business and objects.

During the year under review, Mr.S.Surya Narayanan,
Executive Director had exercised 7,500 Stock options out
of 25,000 Stock options granted to him under Employees
Stock Option Plan 2005. On 17th September 2009, the
Company had allotted the aforesaid 7500 Equity Shares
at the exercise price of Rs.30/- per share.
As per the Employees Stock Option Plan 2005, the stock
options granted can be exercised within three years from
the date of vesting of options and the period of vesting
and its proportion are hereunder:
Period Vesting proportion
End of one year from the date of
grant
20% of options granted
End of two years from the date
of grant
End of three years from the date
of grant
End of four years from the date
of grant
Shareholders/Investors Grievance Committee
The Committee oversees and reviews all matters
19
Financial
year
Day and
Date
Time Venue
2008 09
Monday,
27th July
2009
10.30 A.M
Corporate Offce,
SDF- IV & C 2,3rd
Main Road, MEPZ -
SEZ, Tambaram,
Chennai 600 045.
2007 - 08
Thursday,
28th August
2008
10.30 A.M
Corporate Offce,
SDF- IV & C 2,3rd
Main Road, MEPZ -
SEZ, Tambaram,
Chennai 600 045.
2006 - 07
Thursday,
23rd August
2007
10.30 A.M.
Corporate Offce,
SDF - IV & C 2,3rd
Main Road, MEPZ -
SEZ, Tambaram,
Chennai 600 045.
The following special resolutions were passed by the
members during the last 3 annual general meetings:
AGM held on 27.07.09
Preferential allotment of Equity Shares to the Promoter,
Mr. V. Rajagopal, Chairman and Managing Director in
accordance with SEBI (DIP) guidelines
1. Appointment of Ms. Anjali Rajagopal, daughter of
Mr. V. Rajagopal and Mrs. Rama Rajagopal, Directors
of the Company as Management Trainee
2. Appointment of Mr. Vidyuth Rajagopal, son of
Mr. V. Rajagopal and Mrs. Rama Rajagopal, Directors
of the Company as Management Trainee
3. Reduction in Remuneration payable to
Mr. V. Rajagopal, Managing Director, Mrs. Rama
Rajagopal, Executive Director and Mr. S. Surya
Narayanan, Executive Director in accordance with
Sections 198, 269 and 309 read with the provisions
of Schedule XIII and other applicable provisions of the
No special resolution passed
All Special resolutions moved in the last Annual General
meetings were passed with requisite majority on show of
hands by the shareholders present at the meeting.
Code of conduct
The Company has adopted a Code of Conduct for all
board members and senior management of the Company.
The Code has been communicated to the directors and
the members of the Senior Management of the Company.
The code has been displayed on the Companys website
namely www.celebritygroup.com. All the members of the
Board and senior management have confrmed compliance
with the Code for the year ended, 31st March 2010. The
annual report contains a declaration to this effect signed
by the Chairman and Managing Director and the Executive
Director as Compliance Offcer of the Code.
The Company has also framed a Code of Conduct for
prevention of Insider Trading incompliance with SEBI
(Prohibition of Insider Trading) Regulations, 1992. This
code is applicable to all directors/offcers and designated
employees of the company. The code regulates dealing in
shares by the persons having access to the unpublished
price sensitive information.
CEO/ CFO CERTIFICATION
CEO and CFO have given the certifcate as given in
Clause 49 of the Listing Agreement.
DISCLOSURES
There were no materially signifcant related party
transactions that may have potential confict with the
interest of company at large. The details of the related
party transactions are disclosed under the notes on
accounts, as required under the Accounting standard 18
issued by the Institute of Chartered Accountants of India.
The Company has complied with the requirements of SEBI
and stock exchanges on the matters relating to capital
markets as applicable from time to time. There has been
no instance of non-compliance by the company or penalty
or strictures imposed on company by the stock exchanges
or SEBI or any statutory authority, on any matter relating
to capital markets, during last three years.
The company has complied with all the mandatory
requirements of the code of corporate governance
prescribed by the stock exchanges. In compliance with non-
mandatory requirements, the company has constituted a
Remuneration and Compensation Committee.
The company has not adopted the whistle blower
mechanism, as it is a non-mandatory requirement.
Means of Communication
The quarterly and half-yearly / annual fnancial results are
communicated to the Bombay Stock Exchange Limited
(BSE) and National Stock Exchange of India Limited
(NSE), where the shares of the Company are listed, as
soon as they are approved and taken on record by the
Board of Directors. The fnancial results are published in
Business Standard All India Edition and in Dhina Bhoomi
Tamil newspaper.
20
Celebrity Fashions Limited Share Price Performance
in comparison with BSE Sensex
Registrar and Share Transfer Agents
M/s. Link Intime India Private Limited, Mumbai are the
Registrar and Share Transfer agents for handling physical
and electronic registry work. The Shareholders are
requested to address their share related requests/ queries
to the RTA. The contact address of the registrar and share
transfer agent is as follows:
M/s. Link Intime India Private Limited
C - 13, Pannalal Silk Mills Compound,
L.B.S.Marg, Bhandup (W),
Mumbai 400 078
Tel: + 91 22 2596 3838
Fax : + 91 22 2596 2691
Website : www.linkintime.co.in
E-mail : celebrityfashions@linkintime.com
Share Transfer System
The Board has delegated the powers to approve share
transfers, transmissions, rematerialisation by constituting
a Shareholders/ Investors Grievance Committee. As
99.99% of the shares were held in dematerialized mode,
the transfers of those shares were done through the
depositories with no involvement of the company.
The physical share transfer, transmissions are processed
based on number of requests received. The shares lodged
for transfers are processed and registered as per the
requirements of the listing agreement if the documents
are complete in all respects.
Distribution of Shareholding:

General Shareholders Information
Financial Year
1st April to 31st March
Annual General Meeting and Date of Book Closure
This Corporate Governance Report was taken on record
by the Board in their meeting held on 4th June 2010. The
date and venue of the Annual General Meeting was not
fnalized in the Board Meeting. Hence the details as to
the Schedule of Annual General Meeting and the dates of
Book Closure have not been provided.
Listing on Stock Exchanges
Bombay Stock Exchange
Limited Phiroze JeeJeebhoy
Towers, Dalal Street,
Mumbai 400 001
Stock Code: 532695
National Stock Exchange
of India Limited Exchange
Plaza, Block G, Bandra
Kurla Complex, Bandra
(East), Mumbai 400 051
Stock Code: CELEBRITY

Market Price data
(Share price in Rs.)
Month
BSE NSE
High Low Volume
(In Nos.)
High Low Volume
(In
Nos.)
Apr-09 14.00 9.30 58,338 13.90 9.90 65,456
May-09 19.79 11.05 169,177 19.50 11.10 120,551
Jun-09 24.60 15.60 143,419 24.90 15.35 166,955
Jul-09 17.70 14.25 43,912 17.75 14.25 36,372
Aug-09 19.80 15.05 136,050 19.90 15.15 103,630
Sep-09 21.45 18.50 155,797 21.25 18.55 133,236
Oct-09 22.55 16.65 110,247 22.85 16.75 144,580
Nov-09 20.65 15.65 77,670 20.60 15.70 88,473
Dec-09 20.40 17.90 94,965 20.60 18.00 111,806
Jan-10 27.80 18.70 304,324 28.40 18.85 360,487
Feb-10 21.40 17.65 51,111 22.00 17.95 59,912
Mar-10 25.90 19.60 139,603 26.00 19.90 190,001
21
Distribution of Shareholding as on 31st March 2010 is as
under:
Range Holding Amount
(Rs.)
% to
Capital
No. of
Hol-
ders
% to
Total
Holders
0001- 5000 3247992 32479920 17.90 15800 99.43
5001- 10000 349664 3496640 1.94 50 0.31
10001- 20000 298952 2989520 1.65 22 0.14
20001- 30000 138720 1387200 0.76 6 0.04
30001- 40000 31742 317420 0.17 1 0.01
40001- 50000 82550 825500 0.45 2 0.01
50001- 100000 131072 1310720 0.72 2 0.01
Greater than
100000
13862647 138626470 76.41 8 0.05
TOTAL 18143339 181433390 100.0000 15891 100.000
Shareholding Pattern as on 31st March 2010
Category No. of
Shares
Percentage
Promoter and promoter group
Promoter and promoter group 7883779 43.45
Sub Total 7883779 43.45
NRIs/OCBs
Foreign Company 3400000 18.74
Foreign Nationals 290 0.001
Non Resident Indians 58556 0.32
Sub Total 3458846 19.06
Others
Clearing Members 84592 0.47
Private Corporate Bodies 3057221 16.85
Public 3658901 20.17
Sub Total 6800714 37.49
Total 18143339 100
Graphical Representation of the Shareholding pattern

Dematerialisation of Shares and liquidity
The Equity Shares of the company were admitted in the
following depositories under International Securities
Identifcation number (ISIN) No. INE185H01016
considering the benefts embedded in holding and trading
of the securities in electronic form.
During the year 2009-10, the Company received a
rematerialization request for 700 shares. The Company
rematerialized the shares and issued the Share Certifcate
accordingly.
Name of the depository Address
National Securities
Depository Limited
4th Floor, Kamala Mills
Compound, Senapati
Bapat Marg, Lower Parel,
Mumbai - 400 013.
Central Depository Services
(India) Limited
28th Floor, Phiroze Jee
Jeebhoy Towers, Dalal
Street, Mumbai - 400 001.
As at 31st March 2010, 18142469 Equity shares aggregating
to 99.99% were held in dematerialized form.
Outstanding GDRs/ADRs/Warrants or any convertible
instruments, conversion date and likely impact on
equity
The Company has not issued any GDRs/ADRs/Warrants
or any convertible instruments during the fnancial year
2009 - 10 under review.
Plant Locations
No.70/2 & 3A, Selaiyur Agaram Road,
Thiruvanchery, Chennai 600 073
Narayanapuram, Pallikaranai, Chennai 601302
No.72/1 and 72/2, Senneerkuppam Village,
Poonamallee Bypass Road, Poonamallee,
Chennai 600 056
Plot C2, Survey Nos. 24, 25 and 54,
Phase II, MEPZ SEZ, Tambaram,
Chennai - 600045.
Address for correspondence
Registered & Corporate Offce
SDF - IV & C2, 3rd Main Road, MEPZ - SEZ, Tambaram,
Chennai 600 045.
Tel : + 91 44 43432200
Fax : +91 44 22622897, 22628184
Email : investorservices@celebritygroup.com
Website : www.celebritygroup.com
22
GROUP COMING WITHIN THE DEFINITION OF GROUP AS DEFINED IN THE MONOPOLIES AND
RESTRICTIVE TRADE PRACTICES ACT, 1969.
1. Mr.Venkatesh Rajagopal
2. Mrs.Rama Rajagopal
3. Mr.Suresh Rajagopal
4. Mr.K.A.Rajagopal
5. Ms.Anjali Rajagopal
6. Mr.Vidyuth Rajagopal
7. Celebrity Connections (Partnership Firm)
8. Indian Terrain Fashions Limited
9. Celebrity Clothing Limited
The above disclosure has been made interalia for the purpose of Regulation 3(1)(e) of the Securities Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
For Celebrity Fashions Limited
S.Surya Narayanan
Executive Director
AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
To the Members
We have examined the compliance of conditions of Corporate Governance by Celebrity Fashions Limited for the year ended on 31st
March 2009, as stipulated in clause 49 of the listing Agreement of the said Company with Bombay Stock Exchange Limited and Na-
tional Stock Exchange of India Limited.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to
procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Gover-
nance. It is neither an audit nor an expression of opinion on the fnancial statement of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has com-
plied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement .
We further state that such compliance is neither an assurance as to future viability of the Comoany nor the effciency or effectiveness
with which the management has conducted the affairs of the company.
For CNGSN & Associates
Chartered Accountants
C.N. Gangadaran
Partner
Membership No.11205
F.R.No.004915S
Dated: 04-06-2010
Place: Chennai
23
Management Discussion and Analysis
Overview:
The Indian textile and apparel industry is very large and
diverse, employing 35 million people and accounting for 27
per cent of the countrys exports. The apparel industry plays
a pivotal role as a key driver of the national economy and has
grown to be the most signifcant contributor to the countrys
economy over nearly three decades of its existence. However,
during last 10 years, the industrys actions, government policies
as well as market events have begun to converge, providing
several growth opportunities for the sector domestically as
well as in the global market. Textile industry besides being a
big employment generating industry continues to be a major
part of Indias export basket. This year was all about the exit
from the Great Recession and it worked courtesy of massive
global policy stimulus. The acute phase of the fnancial
crisis has past and a global economic recovery is underway.
However, the recovery remains fragile and is expected to
slow in the second half of 2010 as the growth impact of fscal
and monetary measures wane and the current inventory
cycle runs its course. A great deal of uncertainty clouds the
outlook for the second half of 2010 and beyond. The waning
growth impact of the fscal stimulus, a progressive end to
the inventory cycle, uncertainty as to the extent that private-
sector confdence will step in and sustain the recovery and
the possibility of a second round of bank failures either in
developed or developing countries could lead to a double-dip
growth recession. On the other hand, with monetary policy
as loose as it is currently in high-income countries there is
a reasonable probability of a more buoyant private-sector
reaction as household saving rates decline more quickly and
investment react more forcefully to low interest rates and
improved confdence.
Indias Q4 Export was the highest among the top economies in
merchandise exports. It is over by 13% against its December
quarter (Q3). In other words, India raked in 13 % more dollars
from merchandise exports valued at $ 50,342 million as
against $ 44,417 million in the December quarter. According
to WTO data, it surpassed global majors such as China, US,
Japan, France, the UK and Germany in growth rate during the
quarter.
The data for about 70 economies representing about 90 % of
world trade show that merchandise trade declined in January
and February 2010, then sharply rose in March. Usually the
December quarter with Christmas and New Year around used
to be very busy, but surprisingly this time March quarter was
better than the December quarter. In India, exports rose to $
19,908 million in March as against $ 16,091 million in February
and $ 14,343 million in January, according to WTO data.
Against this backround, if we look at our Indian garment
exports, it dropped 2.64% to $10.64 billion in 2009-10,
compared to $ 10.93 billion in the previous year. Data source
AEPC. In rupee terms, however there was negligible recovery
of 0.37%. Apparel exports totaled Rs.50,479 crore in 2009-10
as against Rs.50,293 crore in 2008-09.
However, in dollar terms, all the months of 2009-10 except
July, August and November showed a painful downslide.
Exports jumped by 36.2% to $16.88 billion in April, showing
clear signs that the export sector was making a strong
comeback. After continuous decline for 13 months from
October 2008, exports turned positive in November 2009 and
since then shipments have followed the growth path. Indian
Rupee in February March 2010 traded Rs.45 levels vis-a-vis
the level in May 2009 at Rs.49-50. The sharp appreciation in
Indian Rupee is an obvious cause of concern for the Indian
exporters.
Indian textile industry is on revival path with production of
fbre, yarn and cloth showing positive growth during April to
November 2009. The production of cloth increased by 10.8
percent, man-made fbre and yarn production grew by 21.3%
& 11.8%, respectively, and the total spun yarn production
increased by 5.1% during the period.
The Company has recorded a total turnover of Rs.294 crores
for the year, which is over by 27.83% compared to the previous
year. The Companys net loss is Rs.12.23 crores as against
Rs.119.34 crores during previous year.
This was the results of the tough and hard initiatives of the
Management and the awareness created by the Management
with regard to productivity improvement.
Opportunities and concerns
The apparel export sector has shown signs of revival after
falling y-o-y for eight months in a row, the value of Indias
apparel exports to the US grew in September 2009, at 60% of
Indian exports of textiles and over 70% of clothing are to USA
and EU 27 markets, and there is an urgent need to broaden
product mix and explore new markets, while maintaining and
increasing Indian textiles and clothing (T&C) share in core
markets through product innovation and diversifcation.
According to Mr Maran, Union Textile Minister, at FICCI
conference during November 2009, if sustained efforts are
made by the industry, the country can capture additional US$
1.5 billion textile and clothing export in US market, which will
also help to generate additional employment opportunities. He
said that initiative of his Ministry to pool the resources of all
the Export Promotion Council to mount mega shows in non-
traditional markets like Japan, Brazil, Argentina and South
Africa has been a success and this endeavour will continue.
According to the U.N report, economic growth next year will
be strongest in developing countries, especially in Asia.
24
It predicts growth in developing nations will increase from 1.9
percent in 2009 to 5.3 percent in 2010, with Chinas economy
expected to grow by 8.8 percent in 2010 and Indias by 6.5
percent, both below their pre-crisis pace.
Russia is expected to lead the turnaround among economies
in transition, with 1.5 percent growth in 2010 following a severe
drop of 7 percent this year, the report said.
In recent years, the readymade garment sector has seen
vertical growth. This industry is growing at the rate of 20%,
with massive visibility and considerable margins. The potential
buying segment of readymade garments is in the age group
of 16-25, and it is very brand conscious and gives priority to
high quality. Branded readymade garments account over 21
percent of the readymade garment industry.
The domestic apparel market in India has shown a signifcant
growth in the past by registering a Compounded Annual
Growth Rate (CAGR) of 13%.
Despite the recent demand slump, the domestic market is
expected to grow at around 9-10% in the next 5 years. Market
is moving away from the traditional segmentation to a much
deeper and wider segmentation based on consumer needs.
Indian domestic apparel market is currently pegged at between
Rs 120-150 billion, with several high potential demographics
still untapped such as teens, extra large sizes and children,
among others.
As per the CSO data, the countrys per capita income stood at
Rs.44,345 in 2009-10. It was higher by 10.5 % over Rs.40,141
a year ago. This means the potential buying capacity will go
up in the domestic market.
The U.N. report said an increasing number of economies
showed positive growth in the second quarter of 2009, with
the recovery continuing in the third quarter. It pointed to
increased industrial production, a rebound in global equity
markets, and a rise in international trade. But the report, The
World Economic Situation and Prospects 2010, warned that
the recovery is uneven and conditions for sustained growth
remain fragile.
The report said the failure to address two risks could cause
the global economy to enter into a double-dip recession.
The frst is the risk of prematurely abandoning fnancial
stimulus measures and the second is the risk of a widening
U.S. defcit and mounting external debt which could cause a
hard landing for the U.S. dollar and set off a new wave of
fnancial instability, it said.
In nutshell we can categorize the Opportunities and Concerns
as follows:
Opportunities:
1. Growth rate of Domestic Textile Industry is 6-8% per
annum.
2. Large, Potential Domestic and International Market.
3. Product development and Diversifcation to cater global
needs.
4. Market is gradually shifting towards Branded Readymade
Garment.
5. Increased Disposable Income and Purchasing Power of
Indian Customer opens New Market Development.
6. Emerging Retail Industry and Malls provide huge
opportunities for the Apparel, Handicraft and other
segments of the industry.
7. Greater Investment and FDI opportunities are available.
Concerns:
1. Competition from other countries, especially China &
Bangladesh
2. Continuous Quality Improvement is the need of the hour as
there are different demand patterns all over the world.
3. Geographical Disadvantages.
4. International labor and Environmental Laws.
5. Imbalance the demand and supply.
6. Imbalance between price and quality.
Strengths:
1. Indian Textile Industry is an Independent & Self-Reliant
industry.
2. Abundant Raw Material availability that helps industry
to control costs and reduces the lead-time across the
operation.
3. Availability of Low Cost and Skilled Manpower provides
competitive advantage to industry.
4. Availability of large varieties of cotton fber and has a fast
growing synthetic fber industry.
5. India has great advantage in Spinning Sector and has a
presence in all process of operation and value chain.
6. India is one of the largest exporters of Yarn in international
market and contributes around 25% share of the global
trade in Cotton Yarn.
7. The Apparel Industry is one of largest foreign revenue
contributor and holds 12% of the countrys total export.
8. Industry has large and diversifed segments that provide
wide variety of products.
9. Growing Economy and Potential Domestic and International
Market.
10. Industry has Manufacturing Flexibility that helps to increase
the productivity.
Weaknesses:
1. Indian Textile Industry is highly Fragmented Industry.
2. Industry is highly dependent on Cotton.
25
3. Lower Productivity in various segments.
4. There is Declining in Mill Segment.
5. Lack of Technological Development that affect the
productivity and other activities in whole value chain.
6. Infrastructural Bottlenecks and Effciency such as,
Transaction Time at Ports and transportation Time.
7. Unfavorable labor Laws.
8. Lack of Trade Membership, which restrict to tap other
potential market.
9. Lacking to generate Economies of Scale.
10. Higher Indirect Taxes, Power and Interest Rates.
Business Restructuring Proposal:
The Company has fled a scheme of arrangement with the
Honble High Court of Madras for the demerger of Indian
Terrain Division into Indian Terrain Fashions Limited (ITFL)
and transfer of Bottoms Division on a going concern basis to
Celebrity Clothing Limited (CCL), a 100% subsidiary, through
slump sale. The modalities of the scheme has been broadly
outlined in Directors Report.
This scheme facilitates the entities involved, to explore new
avenues and would enhance the future growth prospects
for the people and organizations connected with them.
The restructuring activities under the scheme would unlock
shareholders value and create long term value for all the
stakeholders.
Internal Control Systems and their Adequacy
The Company has developed adequate internal control
system commensurate to its size and business to ensure that
all assets are safeguarded and protected against any loss
from unauthorized use or disposition and that all transactions
are authorized, recorded and reported correctly. The internal
audit reports are periodically reviewed by the Management
together with the Audit Committee of the Board.
The production planning is one of the Key Function in the
garment manufacturing company. The Company has installed
Fast React Software, a production planning software to plan
and monitor the orders accepted by the Company for execution.
The Company has a strong Management Information System
as a part of Control Mechanism.
Risk Management
The Company is exposed to the following risks:
Foreign Exchange Risk
The Companys policy is to systematically hedge its long term
foreign exchange risks as well as short term exposures in line
with its hedging policy. In addition to this, the company also
has a natural hedge on the imports of the company which is
almost 35% of the Exports. In addition to this the long term
derivatives are also being used to hedge the currency risk.
Interest Rate Risk
The Interest rate on the borrowings of the Company is fxed at
10.5% as per the Re-structuring Package sanctioned by the
Bankers to the Company.
Apart from the above, the Company is also exposed to
certain operating business risks in the form of government
regulations and others and the same is taken care through
regular monitoring and corrective mechanisms.
Financial Performance
The fnancial statements have been prepared in compliance
with the requirements of the Companies Act, 1956, and
Generally Accepted Accounting Principles (GAAP) in India.
The management accepts responsibility for the integrity and
objectivity of these fnancial statements, as well as for various
estimates and judgments used therein. The estimates and
judgment relating to the fnancial statements have been made
on a prudent and reasonable basis, in order that the fnancial
statements refect in a true and fair manner the form and
substance of transactions, and reasonably present our state
of affairs and profts /(losses) for the year.
Your Company is proud to inform that the Company was
awarded for Outstanding Export Performance for the
year 2008-09 in the SEZ Category (Non-SSI Readymade
Garments), for the second consecutive year.
Highlights Rs. In lakhs
2009-2010 2008-2009
Income From operations 29,408.95 23,003.95
PBITD 1,669.38 (8,926.81)
Interest 1,897.81 2,104.49
PBDT (228.43) (11,031.30)
Proft/ (Loss) Before Tax (1,222.78) (11,905.19)
Provision for Taxation - 29.12
Net Proft / (Loss) after Tax (1,222.78) (11,934.31)
Human Resources/Industrial Relations
26
Industrial relations have continued to be harmonious at all
units throughout the year. No man-days were lost due to
strike, lock out etc.
Measures for employees safety,their welfare and development
receives top priorities. The Company had about 6274
employees as on 31st March 2010.
Cautionary Statement
Statement in this Management Discussion and Analysis
describing the Companys objectives, projections, estimates,
expectations or predictions may be forward looking
statements within the meaning of applicable securities, laws
and regulations. Actual results could materially differ from
those expressed or implied. Important factors that could make
a difference to the Companys operations include raw material
availability and prices, global demand-supply conditions,
changes in governmental regulations and tax structure,
economic structure within India and the countries with which
the Company has business contacts and other incidental
factors.
AUDITORS REPORT
To the Members of
CELEBRITY FASHIONS LIMITED
We have audited the attached Balance Sheet of M/S
CELEBRITY FASHIONS LIMITED as at 31st March 2010, the
Proft and Loss Account and also the Cash Flow Statement
for the year ended on that date annexed thereto. These
Financial Statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on
these Financial Statements based on our audit.
1. We conducted our audit in accordance with Auditing
Standards generally accepted in India. Those
standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
fnancial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the fnancial
statements. An audit also includes assessing the
accounting principles used and signifcant estimates
made by Management, as well as evaluating the overall
fnancial statement preparation. We believe that our
audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order,
2003 as amended, issued by the Central Government
of India in terms of Section 227(4A) of the Companies
Act, 1956, and on the basis of such checks of the
books and records of the Company as we considered
appropriate and according to the information and
explanations given to us, we give in the Annexure, a
statement on the matters specifed in paragraphs 4 & 5
of the said Order.
3. Further to our comments in the annexure referred to in
paragraph 1 above we report that.
a) We have obtained all the information and
explanations, which to the best of our knowledge
and belief were necessary for the purposes of
our audit;
b) In our opinion, proper books of account as
required by law, have been kept by the Company,
so far as appears from our examination of those
books;

c) The Balance Sheet, Proft & Loss Account and
Cash Flow Statement dealt with by this report
are in agreement with the books of account.
d) In our opinion the Balance Sheet, Proft and
Loss Account and Cash Flow Statement dealt
with by this report comply with the Accounting
Standards referred in sub section (3C) of
Section 211 of the Companies Act, 1956,
subject to Note No 2 of the Notes on Accounts,
regarding Contingent Liabilities not provided
for. The Company has not provided for Service
Tax liability in respect of commercial spaces
taken on lease. This is contrary to accrual basis
of accounting. Consequently the loss for the
year and the current liabilities are lower by Rs
103.36 lakhs.
e) In view of the losses incurred by the Company during
the year under review and the accumulated losses of
the Company as at the year end, we have evaluated
the appropriateness of the going concern assumption
in accordance with SA 570. In our opinion and
on the basis of the information and explanations given
to us, we report that we have obtained suffcient audit
evidence to establish continuance of the Company as
a going concern. The mitigating factors have been
outlined in Note No 11 of the Notes on Accounts.
f) On the basis of written representations received from
the Directors as on 31st March, 2010 and taken on
record by the Board of Directors, none of the directors
is prima facie disqualifed as on 31st March 2010 from
being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act,
1956; and
g) In our opinion and to the best of our information
and according to the explanations given to us, the
27
said Financial Statements, subject to our remarks in
para 3 (d) above, give the information required by
the Companies Act, 1956 in the manner so required
and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet of the state of
affairs of the Company as at 31st March 2010;
ii) in the case of the Proft and Loss Account of the
loss for the year ended on that date ; and
iii) in the case of the Cash Flow Statement, of the cash
fows for the year ended on that date.
for ANIL NAIR & ASSOCIATES for CNGSN & ASSOCIATES
Chartered Accountants Chartered Accountants
(Registration No 175S) (Registration No 4915S)
G. ANIL C.N. GANGADARAN
Partner Partner
Membership No 22450 Membership No 11205
Place: Chennai
Date : 04-06-2010
Annexure to the Auditors Reports
(Referred to in paragraph 2 of the Auditors Report of even
date to the members of Celebrity Fashions Limited on the
accounts for the year ended March 31st, 2010)
(i). In respect of its Fixed Assets:
a) The Company has maintained proper records showing
full particulars including quantitative details and
situation of fxed assets.
b) As explained to us, the fxed assets of the Company
have been physically verifed by the Management
during the year in a phased periodical manner, which
in our opinion is reasonable, having regard to the size
of the Company and nature of its assets. In accordance
with the phased programme of verifcation, certain fxed
assets were verifed during the year and no material
discrepancies were noticed on such verifcation.
c) The fxed assets disposed of during the year do not
constitute a substantial part of the fxed assets of the
Company and such disposal in our opinion has not
affected the going concern status of the Company.
(ii). In respect of its Inventories
a) As explained to us the inventories of the Company have
been physically verifed by the Management during the
year. In respect of inventories lying with third parties,
these have substantially been confrmed by them. In
our opinion the frequency of verifcation is reasonable.
b) In our opinion and according to the information and
explanations given to us, the procedures of physical
verifcation of inventories followed by the Management
are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c) The Company has maintained proper record of
inventories. There were no material discrepancies
noticed on physical verifcation of inventories as
compared to the book records.
(iii).
a) The Company has not granted any loans, secured or
unsecured, to companies, frms or other parties listed
in the Register maintained under Section 301 of the
Act.
b) The Company has not taken any loans, secured or
unsecured, from companies, frms or other parties
listed in the Register maintained under Section 301 of
the Act.
(iv). In our opinion and according to the information
and explanations given to us, there is an adequate
internal control system commensurate with the size
of the Company and the nature of its business with
regard to the purchase of inventory and fxed assets
and for the sale of goods. Further on the basis of our
examination of the books and information and as per
the explanations given to us, we have neither come
across nor have we been informed of any instance of
continuing failure to correct major weaknesses in the
aforesaid internal control.
(v). Based on the audit procedures applied by us and
according to the information and explanations given to
us, we are of the opinion that there were no contracts
or arrangements the particulars of which need to be
entered in the register maintained under Section 301
of the Companies Act 1956. Hence the requirement of
reporting regarding transactions of purchase and sale
of goods, materials and services made in pursuance
of such contracts aggregating during the year to Rs.
5,00,000/- or more in respect of each party does not
arise.
(vi). The Company has not accepted any deposits from the
public. Accordingly paragraph 4(vi) of the Order is not
applicable.
(vii). The Company has an internal audit system, which in
our opinion is commensurate with the size and nature
of its business.
(viii). According to the information and explanations given
to us, the Central Government has not prescribed for
the maintenance of cost records under Section 209(1)
(d) of the Companies Act, 1956. Accordingly paragraph
4(viii) of the Order is not applicable.
(ix).
a. According to the information and explanations given
to us and the records of the Company examined by
28
us, in our opinion the Company is generally regular in
depositing with the appropriate authorities undisputed
statutory dues including Provident Fund, Employees
State Insurance, Income Tax, Customs Duty, Cess
and other material statutory dues as applicable.
According to the information and explanations given to
us, no undisputed amounts payable in respect of the
aforesaid dues were in arrears as at 31st March 2010
for a period of more than six months from the date they
became payable.
b. According to the information and explanations given to
us the particulars of the outstanding dues that have not
been deposited on account of disputed matters pending
before the appropriate authorities are as under:
Name otf the
Statute
Nature of
Dues
Period to which
the amount
relate
Forum where
dispute is pending
Amount
(Rs. In Lacs)
Income Tax
Act, 1961
Income Tax
Act, 1961
Income Tax
Act, 1961
Income Tax
Act, 1961
Income Tax
Act, 1961
Income Tax
Demand
Income Tax
Demand
Income Tax
Demand
Income Tax
Demand
Fringe
Beneft Tax
Demand
AY 2003-04
AY 2004-05
AY 2005-06
AY 2006 -07
AY 2007 08
Pending for
re-assessment
before the
Assessing Offcer
Commissioner
of Income Tax
(Appeals) &
Appellate Tribunal
Commissioner
of Income Tax
(Appeals)
Commissioner
of Income Tax
(Appeals)
Pending for
rectifcation
before the
Assessing Offcer
5.26
77.96
2.07
76.84
6.99
(x). The accumulated losses of the Company are in excess
of 50% of the net worth of the Company as per the
Balance Sheet as at the end of the fnancial year
covered by our audit. The company has incurred a
cash loss in the current fnancial year, and also in the
immediately preceding fnancial year.
(xi). The Company has defaulted in repayment of a loan
of Rs 7.75 crores to M/s Standard Chartered Bank.
The default in repayment occurred for a period of fve
months during the fnancial year under review. The
said default has since been regularized and as at 31st
March 2010 there were no dues to the said bank.
(xii). The Company has not granted any loans and
advances on the basis of security by way of pledge of
shares, debentures and other securities. Accordingly
paragraph 4(xii) of the Order is not applicable.
(xiii). In our opinion and according to the information and
explanations given to us, the Company is not a chit fund
or a nidhi/ mutual beneft fund/ society. Accordingly
paragraph 4 (xiii) of the Order is not applicable.
(xiv). The Company has maintained proper records of
the transactions and contracts in respect of dealing
in other investments and timely entries have been
made therein. All investments have been held by the
Company in its own name.
(xv). According to the information and explanations given to
us the Company has not given any guarantee for loans
taken by others from banks or fnancial institutions.
Accordingly paragraph 4(xv) of the Order is not
applicable.
(xvi). According to the information and explanations given to
us, the term loans have been applied for the purposes
for which they were obtained.
(xvii). According to the information and explanations given
to us and an overall examination of the Balance Sheet
of the Company, we are of the opinion that the funds
raised on short term basis have not been used for
long-term investment.
(xviii). The Company has during the year made preferential
allotment of shares to a party, covered in the Register
maintained under section 301 of the Companies Act,
1956. In our opinion and according to the information
and explanations given to us, prices at which such
shares have been issued is not prejudicial to the
interests of the Company.
(xix). The company did not have any outstanding debentures
during the year.
(xx). The company has not raised any money by public
issue during the year. Accordingly paragraph 4(xx) of
the Order is not applicable.
(xxi). During the course of our examination of the books and
records of the Company carried out in accordance with
the generally accepted auditing practices in India, and
according to the information and explanations given to
us, no material fraud on or by the Company has been
noticed or reported during the course of our audit.
for ANIL NAIR & ASSOCIATES
(Registration No 175S)
for CNGSN & ASSOCIATES
(Registration No 4915S)

C.N. GANGADARAN
Partner
Membership No 11205
Place: Chennai
Date : 04-06-2010
G. ANIL
Partner
Membership No 22450
29
To be read with our report of even date For and on Behalf of the Board

For Anil Nair & Associates For CNGSN & Associates V. Rajagopal S. Surya Narayanan
Chartered Accountants Chartered Accountants Chairman & Managing Director Executive Director
Registration # 175S Registration # 4915S
G.Anil C.N.Gangadaran
Partner Partner
Membership # 22450 Membership # 11205
Chennai, 04-06-2010
Balance Sheet as at 31st March 2010
As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
Sch #

SOURCES OF FUNDS
Shareholders Funds
Share Capital 1 1,814.33 1,784.17
Share Application Money 25.00 50.00
Reserves & Surplus 2 11,660.39 11,627.10
13,499.72 13,461.27
Loan Funds
Secured Loans 3 19,547.93 18,310.63
19,547.93 18,310.63

Total 33,047.65 31,771.90
APPLICATION OF FUNDS
Fixed Assets 4
Gross Block 14,445.76 15,012.71
Less: Depreciation 4,613.06 4,229.02
Net Fixed Assets 9,832.70 10,783.69

Investments 5 9.92 -

Current Assets, Loans & Advances
A) Current Assets
Inventories 6 4,995.80 4,767.92
Sundry Debtors 7 5,976.42 4,478.04
Cash and Bank Balances 8 1,909.54 1,315.75
Other Current Assets 9 226.98 150.37
Loans & Advances 10 2,218.80 2,294.02
15,327.54 13,006.10
B) Less: Current Liabilities & Provisions
Current Liabilities 11 4,587.74 3,260.34
Provisions 12 997.38 997.38
5,585.12 4,257.73
Net Current Assets 9,742.42 8,748.37
Proft & Loss Acount 13 13,462.61 12,239.83
Total 33,047.65 31,771.90

Signifcant Accounting Policies and Notes on Accounts 23
30
For Anil Nair & Associates For CNGSN & Associates
Registration # 175S Registration # 4915S V. Rajagopal S. Surya Narayanan
Chairman & Managing Director Executive Director
Partner Partner
Chennai, 04-06-2010

INCOME
Income From Operations 14 29,408.95 23,003.95
Other Income 15 113.41 655.07
Increase / (Decrease) In Stock 16 (76.16) (841.13)
Total 29,446.20 22,817.89
EXPENDITURE
Cost of Materials 17 16,824.42 19,433.45
Employees Costs 18 4,522.83 4,786.40
Other Manufacturing Costs 19 3,367.59 2,844.66
Administrative & Other Costs 20 1,185.06 1,529.88
Selling & Distribution Costs 21 2,709.66 3,150.31
Interest & Other Finance Costs 22 1,897.81 2,104.49
Total 31,501.72 34,723.08
Proft before Extra-Ordinary Income (2,055.51) (11,905.19)

Add / (Less): Extra - Ordinary Item (Refer 14 of Notes II) 832.74 -

Proft Before Tax (1,222.77) (11,905.19)

Provision for Income Tax
Current Tax - -
Deferred Tax -- liability / (asset) - -
Fringe Beneft Tax - 29.12

Net Proft After Tax (1,222.78) (11,934.31)

Balance brought forward (12,239.83) (305.52)
Proft available for Appropriation (13,462.61) (12,239.83)

Appropriations
Proposed Dividend - -
Corporate Dividend Tax on Proposed Dividend - -
General Reserve - -
Total Appropriations - -

Balance carried to Balance sheet (13,462.61) (12,239.83)

Basic and Diluted Earnings Per Share - In Rs.
-- Before Extra-Ordinary Item (11.40) (66.91)
-- After Extra-Ordinary Item (6.78) (66.91)
Signifcant Accounting Policies and Notes on Accounts 23
Proft and Loss a/c for the Year Ending 31st March 2010
31-Mar 09 31-Mar 10
Rs. In lakhs
Sch #
31
Schedules annexed to and forming part of the Accounts

SCHEDULE - 1
SHARE CAPITAL :

Authorized Capital:
2,00,00,000 (Prev. Yr. 2,00,00,000) Equity Shares of Rs.10/- each 2,000.00 2,000.00

Issued, Subscribed and Paid up Capital :
1,81,43,339 (Prev Yr 1,78,41,721) Equity Shares of Rs.10/- each 1,814.33 1,784.17
1,814.33 1,784.17
The above includes -
1) 8,74,500 shares issued as Bonus Shares during 1996-97 by
capitalization of surplus in Proft and loss a/c;

2) 1,99,835 shares allotted as fully paid-up, pursuant to a contract for
consideration other than cash in April 2005 and

3) 56,64,245 shares issued as Bonus Shares in August 2005, by
capitalization of Surplus in Proft & Loss a/c

SCHEDULE - 2
RESERVES & SURPLUS :

Capital Reserves 7.83 7.83

Share Premium Account
Opening Balance 11,518.88 11,518.88
Received during the year 27.43 -
11,546.31 11,518.88

General Reserve 43.51 43.51
Fair Value of Employee Option 62.74 56.88

11,660.39 11,627.10
SCHEDULE - 3
SECURED LOANS :

Working Capital facilities 3,017.88 5,888.28
Term Loans 14,345.01 11,304.22
Export Bills Discounted 2,185.04 1,058.78
Hire Purchase Installments Payable ( net) - 59.35
19,547.93 18,310.63
As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
32
Schedule 4
Fixed Assets
Sl.
No.
Particulars
Gross Block Depreciation Net Block
As on
01/04/09
Additions Deductions
Adjust
ments
As on
31/03/10
As on
01/04/09
For the
year
Deductions /
Adjustments
As on
31/03/10
As on
31/03/10
As on
31/03/09
1 Land and Site Development 215.41 - - - 215.41 - - - - 215.41 215.41
2 Lease Hold Land - - - - - - - - - - -
3 Buildings 2,702.50 - - 126.83 2,829.32 703.68 94.18 56.91 740.95 2,088.37 1,998.82
4 Plant & Machinery 7,832.12 - 155.97 - 7,676.14 2,036.60 391.91 139.59 2,288.92 5,387.22 5,795.52
5 Electrical Installation 1,221.80 - 77.12 (126.83) 1,017.85 336.91 75.93 20.21 392.63 625.22 884.89
6 Offce Equipments 280.97 23.95 94.28 - 210.64 88.37 49.44 94.28 43.54 167.11 192.59
7 Computers 763.35 4.83 2.25 - 765.92 523.66 74.75 2.11 596.30 169.62 239.68
8 Computer Software 216.51 5.66 - - 222.17 91.18 35.16 - 126.33 95.83 125.33
9 Vehicles 245.97 20.49 92.23 - 174.23 81.63 45.71 57.40 69.94 104.29 164.35
10 Furniture & Fixtures 1,534.10 50.80 250.84 - 1,334.06 366.99 227.26 239.81 354.44 979.63 1,167.11
Total 15,012.71 105.73 672.69 - 14,445.76 4,229.02 994.35 610.31 4,613.06 9,832.70 10,783.69
Previous Year 18,721.50 483.45 4,192.24 - 15,012.71 3,725.89 873.89 370.76 4,229.02 10,783.69 14,995.62
SCHEDULE 5
Investments
Face Value Rs. As At
31-Mar-10
As At
31-Mar-09
Number Rs. In lakhs Number Rs. In lakhs
Investment in Subsidiary Companies
Equity Shares - UnQuoted
Indian Terrain Fashions Limited 10.00 49,200 4.92 - -
Celebrity Clothing Limited 10.00 50,000 5.00 - -
Total 99,200 9.92 - -
SCHEDULE - 6
INVENTORIES :
(As certifed by the Management)

Raw Materials 1,050.05 800.91
Trims and Packing Materials 560.36 650.52
Consumables 77.39 115.03
Work-in-Progress 327.71 187.28
Finished Goods / Traded Goods 2,797.59 3,014.18
Stock in Transit 182.70 -
4,995.80 4,767.92
SCHEDULE - 7
SUNDRY DEBTORS :

More than six months - unsecured & considered good 382.71 340.19
Others 5,593.71 4,137.85
5,976.42 4,478.04

As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
33
SCHEDULE - 8
CASH AND BANK BALANCES :

Cash on hand 5.25 18.45
Balance with Scheduled Banks
in Current Account 1,343.99 632.88
in Deposit Account 560.30 664.42
1,909.54 1,315.75

SCHEDULE - 9
OTHER CURRENT ASSETS :

Duty Drawback receivable 93.80 24.81
Cenvat Receivable 26.58 26.58
Service Tax Receivable 71.55 57.85
Interest Receivable on Fixed Deposit 34.24 31.93
Prepaid Expenses 0.81 9.20
226.98 150.37
SCHEDULE - 10
LOANS AND ADVANCES :

Advance Recoverable in cash or in kind for value to be received 324.36 352.92
Advance Income Tax & Fringe Beneft Tax 1,026.14 982.81
Tax Deducted at Source 56.50 50.23
Deposits-Government or Public Bodies 116.94 131.97
Deposits-others 694.86 776.09
2,218.80 2,294.02
SCHEDULE - 11
CURRENT LIABILITIES :

Sundry Creditors
- Trade 2,757.53 1,331.97
- Expenses & Others 820.25 973.77
Other Current Liabilities 1,009.96 954.60
4,587.74 3,260.34
SCHEDULE - 12
PROVISIONS :

Provision for Income Tax & Fringe Beneft Tax 997.38 997.38
997.38 997.38
SCHEDULE - 13
PROFIT & LOSS ACCOUNT :

Opening Balance 12,239.83 305.52
Add:Additions during the year 1,222.78 11,934.31
Closing Balance 13,462.61 12,239.83

As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
34
SCHEDULE - 14
INCOME FROM OPERATIONS

Export Sales 20,827.75 17,982.86
Domestic Sales 8,080.69 7,588.30
Export Incentives 624.39 610.32
Exchange Fluctuation Gain / (Loss) (123.88) (3,177.52)
29,408.95 23,003.95
SCHEDULE - 15
OTHER INCOME :

Interest Accrued / Received on Fixed Deposits 34.94 45.08
Others 78.47 609.99
113.41 655.07
SCHEDULE - 16
INCREASE/(DECREASE) IN STOCK :

Closing Stock
- Finished Goods / Traded Goods 2,797.59 3,014.18
- Stock in Process 327.71 187.28
Opening Stock
- Finished Goods / Traded Goods 3,014.18 3,689.77
- Stock in Process 187.28 352.82
INCREASE / (DECREASE) IN STOCK (76.16) (841.13)

SCHEDULE - 17
COST OF MATERIALS :

Opening Stock of Raw materials 1,451.43 8,970.23
Add: Purchases
-- Rawmaterials (Including Packing Materials) 15,997.63 11,289.38
-- Finished Goods 985.77 625.26

Less: Closing Stock of Raw Materials 1,610.41 1,451.42
16,824.42 19,433.45
SCHEDULE - 18
EMPLOYEE COSTS :
For Factory Staff
Wages, Salaries, Bonus & Exgratia 3,280.58 3,196.34
Statutory Contributions 384.67 358.02
Welfare Expenses 158.01 138.37
For Other Staff
Salaries, Bonus & Exgratia 628.08 1,010.61
Statutory Contributions 36.54 42.93
Welfare Expenses 34.97 40.15
4,522.83 4,786.40
As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
35
SCHEDULE - 19
OTHER MANUFACTURING COSTS :

Garment Processing & Washing Charges 1,237.81 931.87
Power & Fuel 563.87 498.02
Consumables Stores 190.72 116.11
Other Manufacturing and Operating Expenses 1,375.19 1,298.66
3,367.59 2,844.66
SCHEDULE - 20
ADMINISTRATIVE & OTHER COSTS :

Rent, Rates and Taxes 445.49 586.96
Consultancy Charges 139.25 170.67
Traveling & Conveyance 212.51 228.69
Printing & Stationery 23.80 24.09
Repairs & Maintenance - (Offce maintenance) 35.51 36.79
Vehicle Fuel & Repairs 22.49 33.28
Power & Fuel 50.19 70.01
Insurance 37.95 56.91
Communication Expenses 122.00 228.44
Auditors remuneration
- Statutory Audit 8.00 8.82
- Tax audit fees 0.60 0.66
- Certifcation and Reimbursement of Expenses 3.62 3.80
Remuneration to Directors 72.00 72.00
Books, Periodicals & Subscriptions 5.24 3.41
Corporate Expenditure 6.40 5.34
1,185.06 1,529.88
SCHEDULE - 21
SELLING & DISTRIBUTION COSTS :
Advertisement 581.30 1,029.93
Selling Commission & Discounts 1,206.03 1,251.98
Bad Debts 53.94 -
Entertainment & Sales Promotion Expenses 119.00 143.01
Claims 45.87 68.54
ECGC Premium 134.02 14.02
Export Expenses 1.05 1.05
Showroom Maintenance 62.47 82.27
Shipping Charges 505.98 559.51

2,709.66 3,150.31
SCHEDULE - 22
FINANCE COSTS :
Interest - Term Loan 1,084.34 504.59
Interest - Working Capital & Others 631.70 1,396.69
Bank Charges 181.77 203.21
1,897.81 2,104.49
As At
31-Mar 09
As At
31-Mar 10
Rs. In lakhs
36
Signifcant Accounting Policies and Notes on Accounts

I. SIGNIFICANT ACCOUNTING POLICIES:

1 Accounting Convention:
The Financial Statements are prepared on accrual
basis and in accordance with the requirements of the
Companies Act, 1956 and the applicable Accounting
Standards.

2 Fixed Assets & Depreciation:
a Fixed Assets are stated at cost less accumulated
depreciation.
b Depreciation on Fixed Assets acquired pto 31st March
2005 is calculated on Written Down Value Method at the
rates specifed in Schedule XIV to the Companies Act,
1956
c Depreciation on addition to Fixed Assets on or after
1st April 2005 has been provided on Straight Line
Method at the rates specifed in Schedule XIV to the
d Additional Depreciation is being provided to the extent
required during the year of Sale of Assets.
e Borrowing Costs, (if any) attributable to acquisition and
construction of qualifying assets are capitalized as a
part of the cost of such asset. Other Borrowing Costs
are charged to Proft and Loss Account.

3 Inventories:
a Raw Materials and Components are valued at lower
of Cost or Net Realizable Value. Cost of the said is
computed by applying Specifc Identifcation Method.
b Work in Progress and Finished Goods are valued at
lower of Cost or Net Realizable Value. Cost of these
inventories includes Costs of Conversion and Other
Costs incurred in bringing them to the present location
and condition.

4 Foreign Currency Transactions
The Company uses derivative fnancial instruments
such as forward exchange contracts, currency swaps
and interest rate swaps to hedge its risks associated
with foreign exchange fuctuations and interest rate.
The Company does not use the foreign exchange
forward contracts or options for trading or speculating
purpose. Foreign Currency transactions are initially
recorded at the exchange rates prevailing on the date of
transactions. Current Assets and Current Liabilities are
restated at the year end closing rates. The differences
arising on such restatement are refected in the Proft
and Loss Account as Exchange Gain / Loss. Premium
/ Discount on Forward Foreign Exchange Contracts
are recognized over the life of the Contracts. The value
of unperformed contracts is shown under Loans &
Advances. The Company has the policy of accounting
the profts and losses from Derivative Contracts on
Cash basis.

5 Investments:
Invesments are either classifed as current or long
term based on Managements intention at the time of
purchase. Long term investments are stated at cost.
Provision where necessary is made to recognize a
decline other than temporary in the carrying value of
each investments. Current investments are carried at
lower of cost and quoted /fair value.

6 Accounting of Government Grants:
Government grants are recognized where it is
reasonably certain that the ultimate collection will be
made. We have not received any interest subsidy
during the year (Previous Year - 14.32 lakhs under
TUF Scheme). Capital Grants were neither received
nor accrued.

7 Revenue Recognition:
Sales net of trade discounts and rebates are recorded
when the signifcant risks and rewards of ownership
are transferred. Consignment Sales are accounted on
the basis of Sales Memo received from Consignees.
Export Incentives are recognised where it is reasonably
certain that the ultimate collection will be made and
accordingly the Provision is made on accrual basis.
Dividend Income, if any, is recognised on Cash Basis.

8 Retirement Benefts:
Expenditure relating to Provident Fund are charged
to Proft & Loss A/c on accrual basis. Gratuity Liability
under Payment of Gratuity Act is determined on the
basis of an actuarial valuation made at the end of
the fnancial year and in accordance with Revised
Accounting Standard 15.

9 Employee Stock Option Scheme:
The employee compensation costs for the Stock
Option Schemes is recognized in accordance with
the Employee Stock Option Scheme and Employee
Stock Purchase Scheme Guidelines, 1999 issued
by the Securities and Exchange Board of India. The
Company calculates the compensation costs based on
the fair value method. Fair Value of the Shares means
value determined by the Management during the
period the Company was unlisted. The excess of fair
value over the exercise price of the options given to
employees under the employee stock option schemes
of the Company, is recognized as deferred stock
compensation cost and amortized over the vesting
period on a straight line basis.

Schedule # 23 to the Balance Sheet Dated 31st March 2010
37
II. NOTES ON ACCOUNTS: Rs. In lakhs
Sl.No. Particulars 31- Mar-10 31- Mar-09
10 Taxation:
The computation of tax liability is made in accordance
with the provisions of Income Tax Act,1961 and tax
liability so computed is Nil and hence no provision
has been made. The Income Tax assessments of
the Company has been completed upto assessment
year 2007-08. The disputed demands total in all
to is Rs.169.12 lakhs. Based on the decisions of
the appellate authorities for the earlier years and
interpretations of other relevant provisions, the
Company is of the opinion that the demands are likely
to be deleted, and consequently no provision has
been made for such demands. The Company has got
a net deferred tax asset on account of accumulated
losses and unabsorbed depreciation. In Compliance
with the provisions of the Accounting Standard - 22,
Accounting for Taxes on Income and based on
General Prudence, the Company has not recognised
Deferred Tax Asset.

11 Impairment of Assets:
An asset is treated as impaired when the carrying cost
of assets exceeds its recoverable value. The Company
has a policy of comparing the Recoverable Value
of Assets with the Carrying Costs and recognizing
impairment when required.

12 Provisions and Contingent Liabilities:
Provisions are recognized when the Company has a
present obligation, as a result of past events, for which it
is probable that an outfow of economic benefts will be
required to settle the obligation and a reliable estimate
can be made for the amount of obligation. Contingent
liabilities are not recognized but are disclosed in the
Notes.
1 Secured Loans:
The loans under the Multiple Banking Arrangement have been secured as under:
First Charge on Paripassu basis on Inventories in the form of Raw Materials,
Stock In Process and Finished Goods, Receivables and other Current
Assets of the Company both present and future for the loans in the form of
Pre-Shipment / Post-Shipment Credits, Cash Credits, Export Bills Discounting facility
extended by State Bank of India and HDFC Bank.
First Charge to State Bank of India and Second Charge on to HDFC Bank over the
following assets:

* Entire Plant and Machinery - present and future and Brand Value of Indian Terrain
* Factory land and building situated at 107-A, GST Road, Chrompet, Chennai

* Factory land and building situated at Thiruvanchery, Agaram Road, Tambaram
Taluk, Chennai
* Factory land and building situated at Pallikaranai, Chennai
* Factory land and building situated at 72/1, Poonamalle Bypass Road, Poonamalle,
Chennai

* Factory building situated at plot SDF - IV & C2,3rd Main Road, MEPZ/SEZ, Tambaram,
Chennai - 600045

19,547.92 18,251.28

38
Loans from State Bank of India is further secured by Pledge of Promoters Shares in
the Company to an extent of 53,52,516 Equity Shares and Personal Guarantee.
Loans from HDFC Bank is further secured by Pledge of Promoters Shares in the
Company to an extent of 6,00,000 Equity Shares and Personal Guarantee is limited
to an extent of 6,00,000 Equity Shares in the Company.

The Company has approached its Bankers during September 2008 for re-structuring
its corporate debts on account of the huge losses incurred. State Bank of India, the
Companys principal banker had sanctioned the re-structuring scheme in December
2008. HDFC Bank has also sanctioned the re-structuring package in line with State
Bank of India during June 2009 with retrospective effect from 1st April 2009.
The Companys other Bankers had opted for One-Time Settlement and accordingly,
the Company has paid Rs.4.45 crs as full and fnal settlement. The balance amount
of Rs.8.33 crs has been recognised as Gain on One-Time Settlement and has been
classifed as Extra-Ordinary Income during the year.
Loans secured by way of Hypothecation of Vehicles (Net of Interest Suspense)

2 Contingent Liabilities not provided for:
Guarantees given by Banks and are counter guaranteed by the Company. 2.15 2.00
On account of Letters of credit issued by Bankers on behalf of the Company 2,041.16 1,039.21

Claims against Company not acknowledged as debts, being Income Tax demand
pending before Commissioner of Income Tax (Appeals) and Income Tax Appellate
tribunal. Of this a sum Rs.34.00 lakhs has been paid / Adjusted - categorized under
Advance Income Tax. 169.12 162.12

In Service Tax liability on commercial places taken on lease, in view of the legal
opinion that there is no liability to pay Service Tax consequent to Delhi High Court
pronouncement on identical issue, Service Tax has not been provided. 103.36

The Delhi High Court vide its judgment dated 18th May 2010 in petition fled by one
of the Retailers has restrained the Tax Authorities fromrecovering Service Tax on
the act of renting of immovable properties on the basis that there is no value addition
in this regard. The Company is in the process of fling a Stay petition for levy of
Service Tax on renting of immovable properties.

3 Deferred Tax:
Deferred Tax Liability on account of

Deferred Tax Assets on account of
Business loss (266.86) (351.22)
Deferred Tax Liabilities (Net) - -

Deferred Tax assets on account of business loss has been restricted to Deferred
tax liability

4 The Company has not received any information/memorandum (as required to be fled by
the supplier with the notifed authority under the Micro, Small and Medium Enterprises
Development Act,2006) claiming their status as on 31st March 2010 as Micro, Small or
Medium Enterprises. Consequently the amount paid / payable to such parties during the
year is disclosed as Nil.
Rs. In lakhs
___________________________________________________________________________________________________
39
5 No amount is paid / payable by the company U/s 441 A of the Companies Act,1956
(cess on turnover) since the rules specifying the manner in which the cess shall be paid
has not been notifed yet by the Central Government.
6 Foreign Exchange Differences:

Amount of Exchange Difference Gain / (Loss) included in Proft and Loss Account (128.46) (3,181.67)
Premium / (Discount) on Forward Foreign Exchange Contracts recognized 4.58 4.14

7 Other Income - Others:
Proft on Sale of Undertaking - 410.43
Interest received on employees Loan 0.50 0.06
Income from Investments in Mutual Funds 64.55 198.68
Miscellaneous Income 13.41 0.82
Total 78.47 609.99
8 Employee Stock Option Scheme - ESOP 2005, ESOP 2007 and ESOP (2) 2007
Pursuant to Employee Stock Option Scheme, 2005, 2007 and 2007 (2) employees
have exercised their options and were allotted shares in 2009-10 as per the details given
below:
Options outstanding at the beginning of the year 259,900 327,800
Add: Granted during the year
Exercised during the year 7,500 9,300
Allotted during the year 7,500 9,300
Expired / lapsed during the year 59,200 58,600
Options outstanding at the end of the year 193,200 259,900
9 Earnings Per Share:

Net Proft for the year before Extra-Ordinary Item (2,055.52) (11,934.31)
Net Proft for the year after Extra-Ordinary Item (1,222.78) (11,934.31)

Weighted average number of Equity Shares outstanding 18,034,306 17,837,084
Nominal Value per Share - Rs. 10.00 10.00

Earnings per Share - Basic and Diluted
Before Extra-Ordinary Items - Rs. (11.40) (66.91)
After Extra-Ordinary Items - Rs. (6.78) (66.91)

The Companys 193,200 outstanding options are anti-dilutive since the company has
negative profts. Hence there is no differentiation between basic and diluted EPS

10 Managerial Remuneration:

The Shareholders have approved the payment of minimum remuneration under
Section 198(4) read with Section II of Part II of Schedule XIII of the Companies
Act, 1956 to the Whole-Time Directors of the Company for a period of three
years from 1st April 2006 through Postal Ballot dated 23rd March 2007.
The Board of Directors at their meeting held on 13th December 2007 have approved
to reduce the remuneration payable to Whole Time Directors with effect from 1st
January 2008. Accordingly a Special resolution was made and was approved in
the Annual General Meeting held on 28th August, 2008.
Rs. In lakhs
___________________________________________________________________________________________________
40

Computation of Profts as per Sec.349 of the Companies Act, 1956 for remuneration
to the Whole Time Directors for the year ended 31st March 2010.

Proft / (Loss) before Tax (1,222.78) (11,905.19)
Add:
Directors Remuneration 72.00 72.00
Loss on Sale of Assets -
(1,150.78) (11,833.19)
Less:
Proft on Sale of Undertaking - 410.43
Proft on sale of Investments 64.55 171.53

Loss arrived for the purpose of Managerial Remuneration (1,215.33) (12,415.15)
10% of the above Rs.Nil
The details of remuneration paid to the directors is as below:

Salaries 72.00 72.00
Salaries Excludes:
1. Communication facilities at Residence of Directors
2. Company Car for Companys business including the Cost of the Vehicle,
maintenance and chauffer salary
3. Reimbursement of Medical Expenses
11 Business Re-Structuring Proposal
The Company has implemented various initiatives to improve on the effciencies and
control the losses. The Company has recorded positive EBITDA for the fnancial year.
There are strong signals of revival. The Company has basically two major divisions
- Exports and Domestic. Exports is further sub-divided into Tops and Bottoms
Divisions and Domestic is operating under the brand Indian Terrain. The Company
has a Business Re-structuring proposal whereby the respective divisions could
achieve their full potential and lead to maximization of Enterprise Value.
The Market dynamics and key drivers, core competencies required and asset profle
of these divisions are quite distinct. The industry outlook for Exports and Domestic
Divisions are also different. The Company proposes to demerge the Domestic
Division into Indian Terrain Fashions Limited and transfer Bottoms Division to
Celebrity Clothing Limited through Slump sale. Indian Terrain Fashions Limited and
Celebrity Clothing Limited were incorporated during September
2009 as subsidiaries of the Company. Upon Demerger, Indian Terrain Fashions
Limited would be listed in the National Stock Exchange of
India Limited and Bombay
Stock Exchange of India Limited and Celebrity Clothing Limited will remain unlisted
and 100% subsidiary of Celebrity Fashions Limited.
Further, the Company proposes to write off the accumulated losses against the
existing reserves under section 78 and 100 to 103 of the Companies Act,1956 and
revalue the immovable properties.
The Company has obtained the in-principal approval from Stock Exchanges for the
re-structuring and has fled the Application in High Court of Madras during April 2010.
The Court has ordered for a meeting of the Shareholders of the Company on 9th
June 2010.
As at the year end, the accumulated losses have resulted in substantial erosion of
networth of the Company. However inview of the various strategic initiatives that the
company is exploring the Company is confdent of being able to continue and operate
the business on a Going Concern basis and accordingly the fnancial statements
have been prepared on the same lines.
Rs. In lakhs
___________________________________________________________________________________________________
41

12 Defned Beneft Plan-Gratuity

The employees gratuity fund scheme managed by a Trust is a defned beneft plan.
The present value of obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognises each period of service as giving rise
to additional unit of employee beneft entitlement and measures each unit separately
to build up the fnal obligation.
Amount Recognised in the Balance Sheet in respect of gratuity
Present Value of Defned Beneft Obligation at the end of the Year 89.76 116.88
Fair Value of Plan Assets at the end of the Year 107.11 112.40
Net Liability / (Asset) (17.35) 4.48

Amount Recognised in Proft and Loss Account in respect of gratuity
Current Service Cost 35.05 22.73
Interest on Defned Beneft Obligations 8.77 7.83
Expected Return on Plan Assets (8.43) (12.14)
Net Actuarial (Gain) / Loss recognised during the Period (27.21) 94.95
Net Gratuity Cost 8.17 113.37
Actual Return on Plan Assets
Expected Return on Plan Assets 8.43 12.14
Actuarial Gain / (Loss) on Plan Assets (2.12) (12.38)
Actual Return on Plan Assets 6.31 (0.24)
Reconciliation of present value of obligation and the fair value of the plan assets
Opening Defned Beneft Obligation 116.88 97.87
Interest Cost 8.77 7.83
Actuarial (Gain) / Loss (29.33) 82.57
Benefts Paid (41.60) (94.13)
Closing Defned Beneft Obligation 89.76 116.88
Opening Fair Value of Plan Assets 112.40 151.77
Actuarial Gain / (Loss) (2.12) (12.38)
Employer Contributions 30.00 55.00
Benefts paid (41.60) (94.13)
Closing Fair Value of Plan Assets 107.11 112.40

Closing balances of Defned Beneft Obligation
Defned Beneft Obligation at the beginning of the Year 116.88 97.87
Interest Cost 8.77 7. 83
Beneft Paid (41.60) (94.13)
Actuarial (gain) / loss on obligations (29.33) 82.57
Liability at the end of the Year 89.76 116.88
Closing balances of Fair Value of Plan Assets
Fair Value of Plan Assets at the beginning of the Year 112.40 151.77
Rs. In lakhs
___________________________________________________________________________________________________
42
Employer Contributions 30.00 55. 00
Benefits Paid (41.60) ( 94. 13)
Actuarial gain/(loss) on Plan Assets (2.12) (12.38)
Fair Value of Plan Assets at the end of the Year 107.11 112. 40
Actual Return on plan assets 6.31 (0.24)
Investment Details of Plan Assets
Money Market Instruments 100% 1 0 0 %
Balanced Funds
Principal Actuarial Assumptions at the Balance Sheet Date
Discount Rate 8.0% 7.5%
Estimated Rate of Return on Plan Assets 8.0% 7 . 5 %
The estimates of future salary increases, considered in actuarial valuation take
account of infation, seniority, promotion and other relevant factors such as supply
and demand in the employment market.

13 Disclosure in respect of Related Parties pursuant to Accounting Standard 18
a Key Managerial Personnel:
Mr. V.Rajagopal
Mrs. Rama Rajagopal
Mr. S. Surya Narayanan

b Relatives of Key Managerial Personnel:
Mr. Suresh Rajagopal
Mr. Vidyuth Rajagopal

c Enterprises under Control or Signifcant Infuence of Key Managerial Personnel:
M/s Celebrity Connections
M/s Celebrity Clothing Limited
M/s Indian Terrain Fashions Limited
d Transactions carried out with Related Parties during the Year

Nature of the Transactions Note 13 (a) Above Note 13 (b) Above Note 13 (c) Above
(i) Directors Remuneration
(ii) Remuneration to Relatives
(iii) Loans and Advances
72.00
(72.00)
29.60
(28.96)
0.01
(0.78)
Figures in brackets represent corresponding amount of previous year.
Rs. In lakhs
___________________________________________________________________________________________________
43
14 Information pursuant to the provisions of Paragraphs 3, 4C and 4D of Part II of
Schedule VI of the Companies Act, 1956:

Rent (Included under Other Manufacturing Costs) 326.28 280.97
Rent (Included under Administrative Costs) 438.50 564.88
Rates and Taxes (Included under Other Manufacturing Costs) 8.21 10.77
Rates and Taxes (Included under Administrative Costs) 6.99 22.08
Tax Deducted at Source on Interest Accrued / Received on Fixed Deposits / Others 6.27 10.24
Dividends received comprises of income from Non trade investments - 27.15
Proft / (Loss) on Sale of Investments 64.55 171.53

II Earnings in Foreign Currency:
Export of Goods - FOB Value
20,827.75 17,982.86
III Expenditure in Foreign Currency:
a Selling Commission & Consultancy Charges 31.82 35.00
b Travel 30.81 43.98
c Claims 45.87 68.52
d Interest 39.38 133.79
e Others - 28.77

IV Raw Materials Consumed:
Fabrics
Meters in Lakhs 151.62 200.24
Rs. In Lakhs 12,516.72 16,171.74
Others
Rs. In Lakhs 4,307.70 3,261.71

V CIF Value of Imported materials :
a Raw materials 6,818.97 5,312.98
b Capital Goods - 1.91

VI Value of Imported and Indigenous Raw materials consumed and percentage
thereof to the total
Imported
Rs. In lakhs 6,729.77 5,205.58
% to total 40.0% 26.8%
Indigenous
Rs. In lakhs 10,094.65 14,227.87
% to total 60.0% 73.2%

Total 16,824.42 19,433.45
100.0% 100.0%
VII Details on Production, Turnover and Stocks
Particulars Qty Amount
(In Pieces) (Rs In Lakhs)
Class of Goods: Garments
Licensed Capacity * N.A.
Installed Capacity ** 6,250,000
(6,250,000)
Opening Stock 826,410 3,014.18
(919,340) (3,689.77)
Production 6,375,710
(5,707,340)
Rs. In lakhs
___________________________________________________________________________________________________
44
Closing Stock 763,198 2,797.59
(826,410) (3,014.18)
Sales 6,438,922 28,908.44
(5,800,270) (25,571.15)
* Licensed Capacity - N.A. since ready made garments are not within the purview of industrial
licensing requirements under the Industries Development & Regulations Act, 1951.
** Installed Capacity is based on the standard product mix and is variable depending on the
style and type garment and fabric
Figures in brackets represent previous year

15 Segmental Information:
Primary Segment
The Companys activities of manufacture and sale of garments constitutes its single
business segment
Secondary Segment (by geographical distribution)
Segment Revenue
-- India 8,080.69 7,588.30
-- Rest of the World 20,827.75 17,982.86
-- Total 28,908.44 25,571.15

-- India 7,319.03 6,097.44
-- Rest of the World 17,851.12 17,692.35
-- Total 25,170.16 23,789.78
Addition to Fixed Asset
-- India 54.33 419.30
-- Rest of the World 51.40 64.15
-- Total 105.73 483.45

16 Disclosure as per amendment to Clause 32 of the Listing Agreement
Loans and advances in the nature of Loans given to Subsidiaries, Associates and
Others 0.01 -

17 Previous Years fgures have been regrouped, rearranged and reclassifed
whenever necessary.
Rs. In lakhs
___________________________________________________________________________________________________
To be read with our report of even date

For Anil Nair & Associates For CNGSN & Associates For and on Behalf of the Board
G.Anil C.N.Gangadaran V. Rajagopal S. Surya Narayanan
Partner Partner Chairman & Managing Director Executive Director
Date : 04-06-2010
Place : Chennai,
45
To be read with our report of even date

For Anil Nair & Associates For CNGSN & Associates For and on Behalf of the Board
G.Anil C.N.Gangadaran V. Rajagopal S. Surya Narayanan
Partner Partner Chairman & Managing Director Executive Director
Date : 04-06-2010
Place : Chennai,
Cashfow Statement for the year ending 31st March 2010
Sl. No.Particulars 2009-10 2008-09
A Cashfow from Operating Activities
Net Proft before Tax and before Extra-Ordinary Items (2,055.52) (11,905.19)
Adjustments for:
Depreciation for the Year 994.35 873.89
Amortisation of Stock Compensation 5.86 17.18
Unrealised (Gain) / Loss on Exchange Differences (78.48) (16.79)
Interest & Finance Charges paid 1,716.04 1,901.28
Interest Income 34.94 45.08
Dividend Income - (27.15)
(Proft) / Loss on Sale of Fixed Assets - (410.43)
(Proft) / Loss on Sale of Investments (64.55) 2,608.17 171.53) 2,211.53

Operating Proft before Working Capital Changes 552.65 (9,693.65)
Adjustments for:
Decrease / (Increase) in debtors and other receivables (279.01) 594.23
Decrease / (Increase) in inventories (227.87) 8,378.44
Increase / (Decrease) in creditors and other payables 1,360.96 854.07 (5,006.44) 3,966.23

Cash generated from Operations 1,406.72 (5,727.43)
Income Taxes Refund / (Paid) (net) (49.60) (35.98)
Net Cash from Operating Activities 1,357.12 (5,763.41)
B Cashfow from Investing Activities
Proceeds from Sale of Fixed Assets 62.38 4,231.92
(Purchase) of Fixed Assets (105.73) (463.70)
(Purchase) / Sale of Investments (net) 54.63 3,286.96
Interest Received (34.94) (45.08)
Dividend Received - (23.67) 27.15 7,037.25

Net Cash (Used In) / from Investing Activities (23.67) 7,037.25
C Cashfow from Financing Activities
Proceeds from issue of Share Capital 30.16 0.93
Share Premium Received (Net of Issue Expenses) 27.43 8.37
Share Application Money Received (25.00) 50.00
Short Term Borrowings (1,591.16) (5,187.17)
Repayment of Working Capital Loans (446.50) -
Term loan Receipts (Net) 3,040.79 6,624.56
H.P. Instalments (net) (59.35) (72.81)
Interest and Finance Charges paid (1,716.04) (739.67) (1,901.28) (477.40)

Net Cash (Used In) / from Financing Activities (739.67) (477.40)
Net Increase in Cash and Cash Equivalents 593.79 796.44
Cash and Cash Equivalents (Opening Balance) 1,315.75 519.31
Cash and Cash Equivalents (Closing Balance) 1,909.54 1,315.75
Note:
1 The above statement has been prepared on the basis of indirect method as stipulated in Accounting Standard 3
2 Cash and Cash equivalents represents
-- Cash balances
-- Bank balances
3 Previous Years fgures have been regrouped / rearranged wherever necessary to confrm Current Years Presentation
Rs. In lakhs
46

For Anil Nair & Associates For CNGSN & Associates V. Rajagopal S. Surya Narayanan
Chartered Accountants Chartered Accountants Chairman & Managing Director Executive Director
Partner Partner
Date : 04-06-2010
Place : Chennai,
Balance Sheet Abstract and Companys general business profle
1 5 6 5 5 1 8

I. Registration Details
Registration No State Code
Balance Sheet Date
II. Capital raised during the year (Amount in thousands)
Public Issue
Bonus Issue
Rights Issue
Private Placement
Shares allotted under Employee Stock Option Plan Scheme
III. Position of moblisation and deployment of funds (Amount in Lakhs)
Total Liabilities
Total Assets
Source of Funds
Paid up Capital
Share Application Money
Reserves & Surplus
Secured Loans
Application of Funds
Net Fixed Assets
Investments
Net Current Assets
Misc. Expenditure
Accumulated Lossess
IV. Performance of company (Amount in lakhs)
Turnover
Total Expenditure
Extra Ordinary Income
Proft / Loss before tax
Proft / loss after tax
Earning per share in Rs.
Dividend rate %
V. Generic names of three principal products/ services of Company
(as per monetary terms)
Item Code No. (ITC Code) Product Description
Mens or boys shirts
Womens or girls shirts
Mens or boys shorts / Trousers
Womens or girls shorts / Trousers
3 1 0 3 1 0
3 3 0 4 8
3 3 0 4 8
6 2 0 5
6 2 0 6
6 2 0 3
6 2 0 3
2 9 4 4 6
- 1 2 2 3
- 1 2 2 3
- 6 . 7 8
3 1 5 0 2
N I L
8 3 3
1 1 6 6 1
1 9 5 4 8
1 8 1 4
2 5
1 3 4 6 3
9 8 3 3
9 7 4 2
N I L
1 0
2 9 4 1
7 5
N I L
N I L
N I L
47
SUBSIDIARY COMPANIES
Indian Terrain Fashions Limited
Directors Report
Your Directors hereby present the First Annual Report along
with Audited Balance Sheet of the Company for the year ended
31st March 2010.
The Company was incorporated on 29th September 2009
and the Balance Sheet is prepared for the period from 29th
September 2009 to 31st March 2010.
The main object of the Company is to engage in the
designing, manufacture, distribution and retailing of ready made
garments. The Company has fled a petition In the High Court
of Judicature at Madras for the scheme of Arrangement with
M/S Celebrity Fashions Limited and Celebrity Clothing Limited
for proposal of Demerger of M/s Celebrity Fashions Limited
on 15th of April 2010. The scheme envisages the business of
Celebrity Fashions Limited be split into Export and Domestic
business. Domestic Division of Indian Terrain Division be
demerged as Indian Terrain Fashions Limited. The Export
division is further split into Tops division and Bottoms division.
The Tops Division will be operated under the existing name and
style of Celebrity Fashions Limited. All the assets & liabilities of
Celebrity Fashions Limited related to Bottoms Division will be
transferred to Celebrity Clothing Limited on going concern basis
under slump sale. The appointed date for the purpose of above
Demerger is on 1st April 2010.
The Directors feel that the Demerger of Indian Terrain Division
of CFL to ITFL would be advantageous and benefcial to ITFL
and all the stakeholders and that the terms thereof being fair
and reasonable.
Upon sanction of the Scheme, by the Honble High Court of
Judicature at Madras, the equity shares of ITFL will be listed
and / or admitted to trading on the Bombay Stock Exchange and
the National Stock Exchange, as per the terms of sub rule 7 of
Rule 19 of the Securities Contracts (Regulation) Rules, 1957.
Finance and Accounts:
This being the frst year of Balance Sheet and that too for a
period of six months, no transaction has taken place except for
preliminary expenses.
Auditors:
M/s Anil Nair & Associates, Chartered Accountants, Chennai
have been appointed as statutory auditors of the Company
and they retire at the ensuing Annual General Meeting and are
eligible for re-appointment.
Particulars as per Section 217 of the Companies Act,
1956
i. In the preparation of the Annual Accounts for the year
ended 31st March 2010, the applicable Accounting
Standards have been followed and there are no material
departures;
ii. The Directors 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 fnancial year and of the proft or loss of the
Company for that period;
iii. The Directors have taken proper and suffcient care
for maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
B) As there is no employee, the Particulars of employees,
as required under Section 217 (2A) of the Companies Act,
1956 is not appended.
Particulars in the Report of the Board of Directors) Rules,
1988 is given below:
However, wherever possible, the Company strives to
curtail the consumption of energy on a continuing basis.
Not applicable.
V Rajagopal
Chairman and Managing Director
Date : 04-06-2010
Place : Chennai
48
AUDITORS REPORT
To the members of
INDIAN TERRAIN FASHIONS LIMITED
1. We have audited the attached balance sheet of M/S
INDIAN TERRAIN FASHIONS LIMITED as at March 31,
2010, for the year ended on that date annexed thereto.
These fnancial statements are the responsibility of the
companys management. Our responsibility is to express an
opinion on these fnancial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the fnancial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the fnancial statements. An
audit also includes assessing the accounting principles used
and signifcant estimates made by management, as well as
evaluating the overall fnancial statement preparation. We
believe that our audit provides a reasonable basis for our
opinion.
2003 (as amended) issued by the Central Government
of India in terms of sub-section 4A of section 227 of the
Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specifed in paragraphs 4 & 5 of
the said Order (as amended) to the extent possible.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report that:
a. We have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
b. In our opinion, proper books of accounts, as required by
law, have been kept by the Company, so far as appears
from our examination of those books.
c. The Balance Sheet dealt with by this report is in agreement
with the books of account.
d. In our opinion the Balance Sheet dealt with by this report
complies with the accounting standards referred in sub-
section (3C) of Section 211 of the companies Act, 1956.
e. On the basis of written representations received from the
Directors as on March 31, 2010 and taken on record by the
Board of Directors, we report that none of the directors is
prima facie disqualifed as on March 31, 2010 from being
appointed as a director in terms of clause (g) of sub-section
(1) of section 274 of the Companies Act,1956.
f. In our opinion and to the best of our information and
according to the explanations given to us, the said Balance
Sheet give the information required by the Companies
Act, 1956 in the manner so required and gives a true
and fair view in conformity with the accounting principles
generally accepted in India:

i) in the case of the Balance Sheet, of the state of
affairs of the company as at March 31, 2010:
Registration No. 175S
G.ANIL
Partner
Membership No: 22450
Date : 04-06-2010
Place : Chennai,
ANNEXURE TO THE AUDITORS REPORT
(Referred to in the paragraph 3 of our report of even
date)
1.According to the information and explanation given to
us, the company did not own / hold any fxed assets during
the period under review. Hence in our opinion paragraph
4(i) of the order (as amended) are not applicable to the
company.
2.As informed to us , the company is yet to commence
business operations and did not hold any inventory
during the period under review. Hence in our opinion no
comment is required with regard to the requirements of
para 4(ii) of the Order (as amended).
3. According to the information and explanations given
to us, the company has neither granted nor taken any
loans, secured or unsecured to or from companies, frms
or other parties covered in the register maintained under
section 301 of the companies Act, 1956, Consequently
Clauses (iii) (a) to (iii) (g) of paragraph 4 of the order (as
amended) are not applicable.
4. In our opinion and according to the information and
explanations given to us, there is an adequate internal
control system commensurate with the size of the
company and the nature of its business. The company
was yet to commence commercial operations during the
period under review. During the course of our audit, we
have not observed any continuing failure to correct major
weaknesses in the internal control system.
to us, the company has not entered into any contract or
arrangement referred to in section 301 of the companies
49
Act, 1956, consequently Clause (v) (a) and (v) (b) of
paragraph 4 of the order (as amended) are not applicable to
the company for the current period.
6.According to the information and explanations given to us,
the Company has not accepted any deposits from the public.
Therefore the provisions of Clause (vi) of paragraph 4 of the
order (as amended) are not applicable to the Company.
7. According to the information and explanations given to us,
we are of the opinion that since the aggregate of the paid
up capital and free reserves of the Company did not exceed
Rupees Fifty Lakhs at the commencement of the fnancial
year, this is the frst period under review since incorporation
and that the company is yet to commence business activities,
no comment on the internal audit system is required.

8. To the best of our knowledge and as explained to us, the
Central Government has not prescribed the maintenance
of cost records under section 209(1) (d) of the Companies
Act, 1956 for the activities carried out by the Company.
Consequently the provisions of Clause (viii) of paragraph
4 of the Order (as amended ) are not applicable to the
Company.
9. According to the information and explanations given to us
the Company is yet to commence any business operations,
therefore in our opinion no comments are required with regard
to the provisions of clause 4(ix) of the Order (as amended)
10.Since a period of fve years has not elapsed since the
date of incorporation and the fact that the company has not
commenced revenue generation, we are of the opinion that
no comment is required regarding the erosion of 50% or
more of net worth and cash losses in the current year or in
the immediately preceding fnancial years as required under
clause(x) of para 4 of the order (as amended)
11.Based on our audit procedures and according to the
information and explanations given to us, the company has
not borrowed form fnancial institutions or banks till 31st
March, 2010. Hence in our opinion, the question of reporting
on defaults in repayment on dues to fnancial institutions
or banks does not arise. The Company did not have any
debentures outstanding during the year.
12.According to the information and explanations given to
us during the period under review, the Company has not
granted loans and advances on the basis of security by way
of pledge of share, debentures and other securities.
13.In our opinion the Company is not a Chit Fund or a Nidhi
/ Mutual Beneft Fund / Society. Therefore the provisions
of Clause 4(xiii) of the Companies (Auditors Report) Order
2003 (as amended) do not apply to the Company.
14.As per the records of the Company and the information
and explanations given to us, the company is not dealing
or trading in shares, securities, debentures and other
investments.
15. According to the information and explanations given to
us, the Company has not given any guarantee for loans
taken by others from banks or fnancial institutions.
16. To the best of our knowledge and belief and according
to the information and explanations given to us, during the
period under review the Company has not obtained any term
loans. Hence, comments under clause (xvi) of the Order (as
Amended) are not called for.
to us and an overall examination of the balance sheet of
the Company, we are of the opinion that the funds raised
on a short term basis have not been used for long term
investments.
18. The Company has not made any preferential allotment of
shares to Companies/Firms/Parties covered in the register
maintained under section 301 of the Companies Act, 1956.
19. The Company did not have any outstanding debentures
during the period.
20. The Company has not raised any money by way of public
issue during the period covered by our audit report. Hence in
our opinion Clause 4(xx) of the Companies (Auditors Report)
Order 2003 (as amended) is not applicable to the Company.
21.Based upon the audit procedures performed and
information and explanations given by the management we
report that no material fraud on or by the Company has been
noticed or reported during the course of our audit.
For Anil Nair & Associates
Registration No.175S
G.ANIL
Partner
Date : 04-06-2010
Place : Chennai,
50
Indian Terrain Fashions Limited
Balance Sheet as at 31st Rs. In Lakhs
March 2010 As At
31-Mar-10
SOURCES OF FUNDS

Authorized Share Capital (5,00,000
Equity Shares of Rs.10/- each) 50.00

Shareholders Funds
Issued,Subscribed and paid up
Share Capital (50,000 Equity
Shares of Rs.10/- each fully paid up) 5.00

Total 5.00

APPLICATION OF FUNDS\

A) Current Assets
Cash and Bank Balances 3.76
3.76
Current Liabilities 0.01
Provisions -
0.01

Net Current Assets 3.75

Preliminary Expenses written off 1.25

Total 5.00
Notes:
1. The Company has not earned any income and incurred
any expenditure.The expenses incurred are in the nature
of preliminary expenses and hence Proft & Loss account
not prepared.
2. This being the frst year previous year fgures are not
applicable.
Registration #175S
G.Anil
Partner
Membership #22450
Date : 04-06-2010
Place : Chennai,
V. Rajagopal
Chairman & Managing Director
S. Surya Narayanan
Director
CELEBRITY CLOTHING LIMITED
Directors Report
Your Directors hereby present the First Annual Report along
with Audited Balance Sheet of the Company for the year ended
31st March 2010.
The Company was incorporated on 30th September 2009
and the Balance Sheet is prepared for the period from 30th
September 2009 to 31st March 2010.
The main object of the Company is to manufacture and export
of ready made garments. The Company has fled a petition
In the High Court of Judicature at Madras for the scheme of
Arrangement with M/S Celebrity Fashions Limited and Indian
Terrain Fashions Limited for proposal of Demerger of M/s
Celebrity Fashions Limited on 15th of April 2010. The scheme
envisages the business of Celebrity Fashions Limited be split
into Export and Domestic business. Domestic Division of
Indian Terrain Division be demerged as Indian Terrain Fashions
Limited. The Export division is further split into Tops division
and Bottoms division. The Tops Division will be operated under
the existing name and style of Celebrity Fashions Limited. All
the assets & liabilities of Celebrity Fashions Limited related to
Bottoms Division will be transferred to Celebrity Clothing Limited
on going concern basis under slump sale. The appointed date
for the purpose of above Demerger is on 1st April 2010.
The Directors feel that the sale of Bottoms Division of CFL
to CCL would be advantageous and benefcial to CCL and
all the stakeholders and that the terms thereof being fair and
reasonable.
Finance and Accounts:
This being the frst year of Balance Sheet and that too for a
period of six months, no transaction has taken place except for
preliminary expenses.
Auditors:
M/s Anil Nair & Associates, Chartered Accountants, Chennai
have been appointed as statutory auditors of the Company
and they retire at the ensuing Annual General Meeting and are
eligible for re-appointment.
Particulars as per Section 217 of the Companies Act, 1956
51
i. In the preparation of the Annual Accounts for the year ended
31st March 2010, the applicable Accounting Standards have
been followed and there are no material departures;
ii. The Directors 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
fnancial year and of the proft or loss of the Company for that
period;
iii. The Directors have taken proper and suffcient care for
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956 for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;
B) As there is no employee, the Particulars of employees, as
required under Section 217 (2A) of the Companies Act, 1956
is not appended.
Particulars in the Report of the Board of Directors) Rules, 1988
is given below:
However, wherever possible, the Company strives to curtail the
consumption of energy on a continuing basis.
Not applicable.
V. Rajagopal
Chairman
Date : 04-06-2010
Place :Chennai
AUDITORS REPORT
To the members of
1. We have audited the attached balance sheet of
M/S CELEBRITY CLOTHING LIMITED as at March 31, 2010,
for the year ended on that date annexed thereto. These
fnancial statements are the responsibility of the companys
management. Our responsibility is to express an opinion on
these fnancial statements based on our audit.
2. We conducted our audit in accordance with auditing
standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the fnancial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the fnancial statements. An audit also includes assessing
the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall fnancial
statement preparation. We believe that our audit provides a
reasonable basis for our opinion.
2003 (as amended) issued by the Central Government of India
in terms of sub-section 4A of section 227 of the Companies Act,
1956, we enclose in the Annexure, a statement on the matters
specifed in paragraphs 4 & 5 of the said Order (as amended)
to the extent possible.
4. Further to our comments in the Annexure referred to in
paragraph 3 above, we report that:
a. We have obtained all the information and explanations,
which to the best of our knowledge and belief were necessary
for the purposes of our audit;
b. In our opinion, proper books of accounts, as required by law,
have been kept by the Company, so far as appears from our
examination of those books.
c. The Balance Sheet dealt with by this report is in agreement
with the books of account.
d. In our opinion the Balance Sheet dealt with by this report
complies with the accounting standards referred in sub-section
(3C) of Section 211 of the companies Act, 1956.
e. On the basis of written representations received from the
Directors as on March 31, 2010 and taken on record by the
Board of Directors, we report that none of the directors is prima
facie disqualifed as on March 31, 2010 from being appointed
as a director in terms of clause (g) of sub-section (1) of section
274 of the Companies Act,1956.
f. In our opinion and to the best of our information and according
52
to the explanations given to us, the said Balance Sheet give
the information required by the Companies Act, 1956 in the
manner so required and gives a true and fair view in conformity
with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs
of the company as at March 31, 2010:
Registration No. 175S
G.ANIL
Partner
Date : 04-06-2010
Place : Chennai,
ANNEXURE TO THE AUDITORS REPORT
(Referred to in the paragraph 3 of our report of even date)
1.According to the information and explanation given to us, the
company did not own / hold any fxed assets during the period
under review. Hence in our opinion paragraph 4(i) of the order
(as amended) are not applicable to the company.
2.As informed to us , the company is yet to commence business
operations and did not hold any inventory during the period
under review. Hence in our opinion no comment is required
with regard to the requirements of para 4(ii) of the Order (as
amended).
the company has neither granted nor taken any loans, secured
or unsecured to or from companies, frms or other parties
covered in the register maintained under section 301 of the
companies Act, 1956, Consequently Clauses (iii) (a) to (iii) (g)
of paragraph 4 of the order (as amended) are not applicable.
4. In our opinion and according to the information and
explanations given to us, there is an adequate internal control
system commensurate with the size of the company and the
nature of its business. The company was yet to commence
commercial operations during the period under review. During
the course of our audit, we have not observed any continuing
failure to correct major weaknesses in the internal control
system.
the company has not entered into any contract or arrangement
referred to in section 301 of the companies Act, 1956,
consequently Clause (v) (a) and (v) (b) of paragraph 4 of the
order (as amended) are not applicable to the company for the
current period.
6.According to the information and explanations given to us,
the Company has not accepted any deposits from the public.
Therefore the provisions of Clause (vi) of paragraph 4 of the
order (as amended) are not applicable to the Company.
we are of the opinion that since the aggregate of the paid
up capital and free reserves of the Company did not exceed
Rupees Fifty Lakhs at the commencement of the fnancial year,
this is the frst period under review since incorporation and
that the company is yet to commence business activities, no
comment on the internal audit system is required.

8. To the best of our knowledge and as explained to us, the
Central Government has not prescribed the maintenance of cost
records under section 209(1) (d) of the Companies Act, 1956
for the activities carried out by the Company. Consequently
the provisions of Clause (viii) of paragraph 4 of the Order (as
amended ) are not applicable to the Company.
9. According to the information and explanations given to us
the Company is yet to commence any business operations,
therefore in our opinion no comments are required with regard
to the provisions of clause 4(ix) of the Order (as amended)
10.Since a period of fve years has not elapsed since the
date of incorporation and the fact that the company has not
commenced revenue generation, we are of the opinion that
no comment is required regarding the erosion of 50% or
more of net worth and cash losses in the current year or in
the immediately preceding fnancial years as required under
clause(x) of para 4 of the order (as amended)
11.Based on our audit procedures and according to the
information and explanations given to us, the company has not
borrowed form fnancial institutions or banks till 31st March,
2010. Hence in our opinion, the question of reporting on
defaults in repayment on dues to fnancial institutions or banks
does not arise. The Company did not have any debentures
outstanding during the year.
12.According to the information and explanations given to us
during the period under review, the Company has not granted
loans and advances on the basis of security by way of pledge
of share, debentures and other securities.
13.In our opinion the Company is not a Chit Fund or a Nidhi
/ Mutual Beneft Fund / Society. Therefore the provisions of
Clause 4(xiii) of the Companies (Auditors Report) Order 2003
(as amended) do not apply to the Company.
14.As per the records of the Company and the information and
explanations given to us, the company is not dealing or trading
in shares, securities, debentures and other investments.
the Company has not given any guarantee for loans taken by
others from banks or fnancial institutions.
16. To the best of our knowledge and belief and according
53
to the information and explanations given to us, during the
period under review the Company has not obtained any term
loans. Hence, comments under clause (xvi) of the Order (as
Amended) are not called for.
17. According to the information and explanations given to
us and an overall examination of the balance sheet of the
Company, we are of the opinion that the funds raised on a short
term basis have not been used for long term investments.
18. The Company has not made any preferential allotment of
shares to Companies/Firms/Parties covered in the register
maintained under section 301 of the Companies Act, 1956.
19. The Company did not have any outstanding debentures
during the period.
20. The Company has not raised any money by way of public
issue during the period covered by our audit report. Hence in
our opinion Clause 4(xx) of the Companies (Auditors Report)
Order 2003 (as amended) is not applicable to the Company.
21.Based upon the audit procedures performed and information
and explanations given by the management we report that
no material fraud on or by the Company has been noticed or
reported during the course of our audit.
Registration No.175S
G.ANIL
Partner
Date : 04-06-2010
Place : Chennai,
Balance Sheet as at 31st Rs. In Lakhs
March 2010 As At
31-Mar-10
SOURCES OF FUNDS

Authorized Share Capital (50,000
Equity Shares of Rs.10/- each) 5.00

Shareholders Funds
Issued,Subscribed and paid up
Share Capital (50,000 Equity
Shares of Rs.10/- each fully paid up) 5.00

Total 5.00

APPLICATION OF FUNDS

A) Current Assets
Cash and Bank Balances 4.68
4.68
Current Liabilities -
Provisions -
-

Net Current Assets 4.68

Preliminary Expenses written off 0.32

Total 5.00
Notes:
1. The Company has not earned any income and incurred
any expenditure.The expenses incurred are in the nature
of preliminary expenses and hence Proft & Loss account
not prepared.
2. This being the frst year previous year fgures are not
applicable.
Registration #175S
G.Anil
Partner
Membership #22450
Chennai
04-06-2010
V. Rajagopal
Chairman
S. Surya Narayanan
Director
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Regd. offce:SDF - IV & C2, 3
rd
Main Road, MEPZ - SEZ, Tambaram, Chennai - 600 045
Proxy Form
Regd Folio No. /DP/ Client ID
I / We ..................................................................................of ................................................... being a member / members of the
Company hereby appoint ............................................................................................................................................................. of
............................................................................ or failing him / her ............................................................................................ of
.................................................................................. as my / our proxy, to vote for me / us on my behalf at the twenty frst Annual
General Meeting of the Company to be held on Friday, the 24
th
day of September 2010, at 10.30 A.M. at Registered Offce
situated at SDF- IV & C2, 3
rd
Main Road, MEPZ - SEZ, Tambaram, Chennai 600 045 and at any adjournment thereof.
Signed this .......................................................................... day of ........................................................... 2010.
Signature .........................................................
Notes : This form in order to be effective, should be duly stamped, completed, signed and deposited at the Registered Offce of
the Company, not less than 48 hours before the meeting.
Regd. offce:SDF IV & C2, 3
rd
Main Road, MEPZ - SEZ, Tambaram, Chennai - 600 045
ATTENDANCE SLIP
Regd Folio No. /DP/ Client ID
No.of Shares held
I certify that I am member / proxy for the member of the Company.
I hereby record my presence at the Twenty frst Annual General Meeting of the Company at the Registered Offce situated at
SDF - IV & C2, 3
rd
Main Road, MEPZ - SEZ, Tambaram, Chennai 600 045 at 10.30 A.M. on Friday, the 24
th
day of September
2010.
.............................................. ..............................................
Name of the Member / Proxy Signature of member / Proxy
Note : Please fll the Attendance slip and hand it over at the entrance of the meeting hall.
Members are requested to bring their copies of the Annual Report to the Meeting.
Re.1.00
Revenue
Stamp
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If undelivered please return to
SDF - IV & C2, 3
rd
Main Road,
MEPZ - SEZ, Tambaram, Chennai 600 045.
Tel. : +91 44 4343 2200
Fax : +91 44 2262 2897, 2262 8184
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