Celebrity Fashions

1 Contingent Liabilities not provided for:
 
 Guarantees given by Banks and are counter guaranteed 
 by the Company.                                        2.00    163.30
 On account of Letters of credit issued by Bankers 
 on behalf of the Company                           1,039.21   1,878.76
 Claims against Company not acknowledged as debts,
 being Income Tax demand pending before Commissioner
 of Income Tax (Appeals)                              162.12     83.21
 
 
 2 The Company has not received information from vendors regarding their
 status under the Micro, Small and Medium Enterprises Development Act,
 2006 and hence disclosure relating to amounts unpaid as at the year end
 have not been given
 
 3 Service Tax on Rental Payments:
 
 The rent paid on properties for Commercial use will not be subject to
 Service Tax with effect from 01.06.2007 vide Delhi High Court Judgement
 Dated 18th April 2009. Accordingly, refund of Service Tax paid from 1st
 April 2008 is being lodged with the Department and the amount is
 reflected under Service Tax receivable under Other Current Assets of
 the Balance Sheet
 
 4 Sale of Jwala Plant
 
 The Company has sold the Jwala Plant as per the agreement entered
 during FY 2007-08 with effect from 1st April 2008.
 
 The Sale of Undertaking was on a Slump Sale Basis. The net Book Value
 of Assets transferred amounted to Rs.38.92 crs as at 31st March 2008.
 Profit on Sale of undertaking of Rs.4.10 crs has been credited to
 Profit and Loss a/c.
 
 5 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 1 st 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.
 
 6 Financial Re-Structuring Scheme
 
 The huge losses suffered by the Company during the year under review
 has been occassioned as a consequence of multiple factors The losses
 have been primarily on account of cancellation of orders which forced
 the Company to liquidate part of its inventories at values below cost,
 disruption in the operations at MEPZ plant due to the workers strike,
 stock impairment, losses on account of derivatives, fluctuations in the
 exchange rates and general operational losses as a result of the slow
 down in the world economy. As a result of the losses incurred, the
 Company had to approach its bankers to restructure the various loans
 availed by it. The Companys principal banker, State Bank of India has
 approved the Companys proposal to restructure the borrowings and the
 same was sanctioned on December 23, 2008. The financial restructuring
 scheme was to apply with retrospective effect from October 1, 2008.
 The Scheme resulted in carving out a clean term loan from the existing
 working capital facilities, rescheduling of all term loans with a
 moratorium on repayments for 3 years and repayments to be made in 7
 subsequent years, reduction in interest rates and deferment of interest
 payments through funded interest termloan for a period of 2 years.  The
 scheme envisaged certain conditions which includes infusion of fresh
 capital by the Promoters, liquidation of investments held by the
 Company, pledge of equity shareholders held by the promoters in the
 Company and the personal guarantees of the Promoters. The Company has
 also approached its other Bankers namely HDFC Bank, Standard Chartered
 Bank and Citibank for restructuring its borrowings on similar terms and
 the same is in progress as at the balance sheet date As at the year
 end, the accumulated losses has resulted in substantial erosion of the
 networth of the Company. However in view of the implementation of
 financial restructuring implemented between the Company and its
 principal bankers and also other signs of revival, the Company is
 confident of being able to continue and operate the business on a
 Going Concern basis and accordingly these financial statements have
 been prepared on the same lines.
 
 7 Defined Benefit Plan-Gratuity
 
 The employees gratuity fund scheme managed by a Trust is a defined
 benefit 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 benefit entitlement and measures each unit separately to build
 up the final obligation.
 
 8 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 
 Ms. Anjali Rajagopal 
 Mr. Vidyuth Rajagopal
 
 c Enterprises under Control or Significant Influence of Key Managerial
 Personnel:
 
 M/s. Celebrity Connections
 
 9 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
 
 10 Previous Years figures have been regrouped, rearranged and
 reclassified whenever necessary.