Celebrity Fashions Ltd

2. PERFORMANCE REVIEW

The turnover of the Company for the year ended 31st March 2024 was Rs. 342.62 crores as compared to Rs. 364.21 in the previous year. The profit after tax is Rs. 1.84 crores as against a profit of Rs. 6.15 crores during the previous year.

3. COST OF MATERIAL AND CHANGES IN INVENTORIES

The cost of materials adjusted for changes in Inventories of finished goods and work in progress is 60.36% to revenue as against 55.79% in the previous year.

4. EMPLOYEE COSTS

The manpower cost for the year is 22.07 % to revenues as against 22.12 % in the previous year.

5. DEPRECIATION

Depreciation during the year stood at Rs. 8.12 crores as against Rs. 8.23 crores in the previous year.

6. FINANCE COSTS

Finance Cost for the year stood at Rs. 9.66 crores as against Rs. 7.22 crores in the previous year.

7. SHARE CAPITAL EQUITY SHARE CAPITAL

During the year under review, there were no changes in the Authorized Equity Share Capital of the Company. The Authorized equity share capital stood at Rs. 64.00/- crores comprising of 6,40,00,000 Equity Shares of Rs. 10/- each.

During the year under review, the Board of Directors by way for circular resolution have allotted 24,97,961 equity shares by way of preferential issue on private placement basis to Arial Holdings 1 , Foreign Portfolio Investor.

Consequent to the allotment the paid up equity capital of the Company has increased from Rs. 5,40,54,113 to Rs. 5,65,52,074.

The preferential issue was approved by the Shareholders by way of postal ballot on 10th March 2024.

There are no deviation(s) or variation(s) in the use of proceeds of the preferential issue from the specified objects of the issue.

PREFERENCE SHARE CAPITAL

During the year under review, the paid-up preference share capital stood at Rs. 10,04,18,000 divided into 1,00,41,800 1% Cumulative Redeemable Preference Shares of Rs. 10/- each.

During the year under review, the Company had redeemed 50,20,900 1% Cumulative Redeemable Preference Shares on 22nd March 2024 out of fresh issue of equity shares.

8. DIVIDEND

Due to the losses incurred by the Company in the earlier years, the Board of Directors has not recommended any dividend for the financial year ended 31st March 2024.

The Company is liable to pay arrears of dividends to 1% of Cumulative Redeemable Preference Shareholders from inception.

9. TRANSFER TO RESERVES

The Company has not transferred any amount to general reserve for the financial year ended 31st March 2024.

10. FINANCE AND ACCOUNTS

Due to the losses incurred by the Company in the earlier years, there is no provision for Income Tax. The Company has recognized Deferred Tax Asset in unabsorbed depreciation and accumulated losses to the extent of corresponding deferred tax liability on the difference between the book balances and written down value of fixed assets under Income Tax.

11. DEPOSITS

During FY 2023-24, the Company did not accept any deposit within the meaning of Sections 73 and 74 of the Act read together with the Companies (Acceptance of Deposits) Rules, 2014 and accordingly no amount on account of principal or interest on public deposits was outstanding as on 31st March 2024.

12. CASH FLOW STATEMENT

In conformity with the provisions of Section 134 of Companies Act, 2013 and Regulation 34 2(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Cash flow statement for the year ended 31st March 2024 forms part of this Annual Report.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2023-24, there were no materially significant transactions with the related parties, which were in conflict with the interests of the Company and that require an approval of the Members in terms of the SEBI Listing Regulations.

14. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have any subsidiary or associate or joint venture company.

15. CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS

The Corporate Governance Report and Management Discussion & Analysis which forms part of this report are set out separately along with the Certificate from the Secretarial Auditors of the Company regarding compliance of conditions of Corporate Governance and Certificate from a Company Secretary in practice that none of the directors on the Board of the Company have been debarred or disqualified from being

appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority as stipulated in Schedule V read with Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

16. COMPLIANCE WITH CODE OF CONDUCT

All members of the Board and senior management personnel have affirmed compliance to the Code as on March 31, 2024.

As stipulated under Regulation 34 (3) and Schedule V (D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a declaration Signed by Mr. Vidyuth Rajagopal, Managing Director to this effect is annexed to the report on Corporate governance, which forms part of this annual report.

17. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is given in Annexure 3, which forms part of this Report.

18. ESTABLISHMENT OF VIGIL MECHANISM

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors:

a. Appointment of Independent Director

On recommendation of the Nomination and Remuneration Committee, the Board had considered and approved the appointment of Mr. Sanjiv Dewan (DIN: 01160371), as Additional Independent Director of the Company with effect from 30th March 2024 for a term of five consecutive years and same was regularized by the Shareholders on 22nd June 2024 through postal ballot.

b. Retirement of Independent Directors on Completion of Second Term

Mr. Ranganath Nuggehalli Krishna (DIN: 00004044) and Ms. Nidhi Reddy (DIN: 00004081), had ceased to be Independent Directors of the Company since the second term of office as an Independent Directors of the Company had been completed on 31st March 2024.

c. Resignations

No resignations during the financial year 2023-24.

d. Retirement by Rotation

Mr. Venkatesh Rajagopal, (DIN 00003625) Non-Executive Director, retires by rotation and being eligible, offers himself for re-appointment. Based on the recommendation of the Nomination and Remuneration Committee, the Board recommends the reappointment of Mr. Venkatesh Rajagopal as director, liable to retire by rotation.

The Board recommends the aforementioned re-appointment for approval of the members at the ensuing AGM. Brief resume, expertise in specific functional areas, names of listed companies in which the above-named director hold directorships, committee memberships/ chairmanships, disclosure of relationships between directors inter-se, shareholding etc., are furnished in notice of the ensuing AGM.

e. Key Managerial Personnel:

a) Mr. A. Rishi Kumar (Membership No:F12702) resigned from the position of Company Secretary and Compliance officer with effect from 01st December 2023 after the closure of the business hours due to personnel reasons.

b) Mr. D. Hem Senthil Raj (Membership No: F 8366) appointed as a Compliance officer of the Company with effect from 05th February 2024 and resigned with effect from 03rd May 2024 after the closure of the business hours due to personnel reasons.

c) Mr. H. Narayanarao (Membership No:A47309) appointed as a Company Secretary of the Company with effect from 30th March 2024 and was appointed as a Compliance officer with effect from 29th May 2024.

20. EMPLOYEE STOCK OPTION PLAN (ESOP)

During the financial year ended 31st March 2024 there were no pending options to be vested or exercised.

21. DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are independent of the management. The Board of Directors is of the opinion that the Independent Directors of your Company possess requisite qualifications, experience, expertise (including proficiency) and they hold the highest standards of integrity that enables them to discharge their duties as the Independent Directors of your Company. Further, in compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs.

22. ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the annual return is placed on the website of the Company at www.celebritygroup.com.

23. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 7 (Seven) times during the financial year 2023-24 i.e., 07th April 2024, 19th May 2023, 14th August 2023, 09th November 2023, 05th February 2024, 14th February 2024 and 30th March 2024. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of all Board/ Committee meetings held are given in the Corporate Governance Report.

24. AUDIT COMMITTEE

Pursuant to Section 177 (8) of Companies Act 2013, the particulars relating to the Composition, terms of reference and other details about the Audit Committee has been detailed in the Corporate Governance Report which forms part of this Annual Report.

During the year all the recommendations of the Audit Committee were accepted by the Board.

25. REMUNERATION POLICY

The Remuneration policy of the company has been structured to match the market trends of the industry, qualifications and experience of the employee and responsibilities handled by them.

The Policy inter alia provides for the following:

a) attract, recruit, and retain good and exceptional talent.

b) list down the criteria for determining the qualifications, positive attributes, and independence of the directors of the Company.

c) ensure that the remuneration of the directors, key managerial personnel and other employees is performance driven, motivates them, recognises their merits and achievements, and promotes excellence in their performance.

d) motivate such personnel to align their individual interests with the interests of the Company, and further the interests of its stakeholders.

e) ensure a transparent nomination process for directors with the diversity of thought, experience, knowledge, perspective, and gender in the Board; and

Particulars pertaining constitution of the Nomination and remuneration Committee and its terms of reference has been detailed in the Corporate Governance Report which forms part of this Annual Report.

26. MANAGERIAL REMUNERATION RECEIVED FROM COMPANY, HOLDING OR SUBSIDIARY COMPANY

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not made any investment. Further, the Company has not given any loans or corporate guarantee or provided any security during the year.

28. MATERIAL CHANGES & COMMITMENTS

No material changes and commitments have occurred after the closure of the Financial Year 2023-24 till the date of this Report, which would affect the financial position of the Company.

29. BOARD EVALUATION

The Board has carried out an annual evaluation of its own performance, the directors and also Committees of the Board based on the guidelines formulated by the Nomination & Remuneration Committee under Self-evaluation method. Board composition, quality and timely flow of information, frequency of meetings, and level of participation in discussions were some of the parameters considered during the evaluation process. The Board, upon evaluation, considered that the Board is well balanced and diverse and is commensurate with the business profile and size of the Company. The Board reviewed and noted with satisfaction of its own performance and that of its committees and individual Directors.

30. DISCLOSURE AS PER THE COMPANIES (ACCOUNTS) RULES, 2014

Change in nature of business, if any: Nil

The name of Companies which have become or ceased to be its subsidiaries, Joint Ventures, or Associate companies during the financial year: Not Applicable

31. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

The Company was not in receipt of any orders from the regulator / courts / tribunals impacting the going concern status of future operations of the Company.

The Company was in receipt of the notice / order from statutory authorities during the year for claim not acknowledged as debts by the company. The details of the same have been provided in Note 44 of the financial statements.

32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale, and complexity of its operations. To maintain its objectivity and independence, the

Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and there by strengthen the controls. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.

Adequate systems and processes, commensurate with the size of the Company and of its business are put in place to ensure compliance with the provisions of all applicable laws and such systems and processes are operating effectively.

Audit Committee and Board of Directors of the Company were appraised on the performance of the IFC.

33. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

Pursuant to section 134 (3) (n) of the Companies Act, 2013 the company has framed Risk Management Policy which lays down the framework to define, assess, monitor, and mitigate the business, operational, financial, and other risks associated with the business of the Company. The Company has been addressing various risks impacting the Company in Management Discussion and Analysis Report which forms part of this Annual Report.

During the year under review, the company has not identified any element of risk which may threaten the existence of the company.

34. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTOR

In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility of the Directors, the working of the Company, nature of the Industry in which the Company operates, business model, etc.. The details of such familiarization programmes for the Independent Directors are disclosed on the website of the Company www.celebritygroup.com.

35. AUDITORS Statutory Auditors

The Company at its 33rd AGM held on 09th September 2022 reappointed M/s SRSV & Associates, Chartered Accountants, Chennai, having Firm Registration No. 015041S allotted by the Institute of Chartered Accountants of India, as Statutory Auditors of the Company to hold office, for the second term of five consecutive years from the conclusion of 33rd AGM till the conclusion of 38th AGM, at such remuneration in addition to applicable taxes, out of pocket expenses, travelling and other expenses as may be mutually agreed between the Board of Directors of the Company and the Auditors.

The Statutory Auditors will continue to hold office for the second year in the second term of five consecutive years, from the conclusion of this AGM. The Company has obtained necessary certificate under Section 141 of the Act, 2013 conveying their eligibility for being the Statutory Auditors of the Company for the year 2024 - 25.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company at its meeting held on 19th May 2023 had appointed M/s. BP & Associates, Practicing Company Secretaries, as the Secretarial Auditors of the Company to undertake the Secretarial Audit for the financial year 2023-24.

The Secretarial Audit Report issued by M/s. BP & Associates, Secretarial Auditors for the Financial Year ended 31st March 2024 is annexed with the report as Annexure 2. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark and its self explanatory.

Internal Auditors

Pursuant to Section 138 of the Companies Act 2013 read with rule 13 of The Companies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereto) if any of the Companies Act, 2013 and as recommended by the audit committee M/s. RVKS & Associates, Chartered Accountants, Chennai were appointed as the Internal Auditors of the company for the Financial Year 2023-24.

The audit conducted by the Internal Auditors is based on an internal audit plan, which is reviewed each quarter in consultation with the Audit Committee. These audits are based on risk-based methodology and inter alia involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances. The Internal Auditors share their findings on an ongoing basis during the financial year for corrective action. The Audit Committee oversees the work of Internal Auditors.

Cost records and cost audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activity carried out by the Company.

36. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.

37. LISTING

The Equity Shares of your Company are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The applicable annual listing fees have been paid to the Stock Exchanges before the due dates. The Equity Shares of your Company were not suspended from trading on BSE and NSE at any point of time during the Financial Year 2023-24.

38. DISCLOSURE UNDER SECTION 67 (3) (C) OF THE COMPANIES ACT, 2013

No disclosure is required under section 67 (3) (c) of the Companies Act, 2013 read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

39. PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure 1, which forms part of this Report.

Further, the information pertaining to Rule 5(2) and 5(3) of the aforesaid Rules, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and the Annual Report is being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary and Compliance Officer at the Registered Office address or by email to investorservices@celebritygroup.com.

40. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the financial year 2023-24, no unpaid or unclaimed dividend was required to be transferred to IEPF.

41. INTERNAL COMPLAINTS COMMITTEE

The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment and Non-discrimination at workplace in line with the requirements of Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

An Internal Complaints Committee (ICC) was set up to redress the complaints received from women regarding sexual harassment and discrimination at workplace. The Constitution of the ICC is as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the committee includes external members from NGOs.

During the year ended 31st March 2024, the ICC did not receive any complaint pertaining to sexual harassment/discrimination at the work location.

As required by Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:-

a) In the preparation of the Annual accounts for the financial year ended 31 ^st March 2024, the applicable accounting standards have been followed and there are no material departures.

b) They had in consultation with Statutory Auditors, selected 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 as at 31^st March, 2024 and of the profit of the Company for the year ended on that date;.

c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d) They have prepared the annual accounts on a going concern basis.

e) They have laid down adequate internal financial controls, which are adequate and are operating effectively.

f) They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

43. CREDIT RATING

44. CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE

A. Conservation of Energy:

45. HUMAN RESOURCES AND EMPLOYEE RELATIONS

The Board of Directors commends the continued dedication of all its employees. Details of Human Resources and Employee Relations and matters incidental there to are provided in the Management Discussion and Analysis Report.

46. SECRETARIAL STANDARDS

47. OTHER DISCLOSURES

There are no proceedings initiated/ pending against your Company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

ACKNOWLEDGEMENT